February 12, 2020 / 7:44 AM / 10 days ago

Norway's Adevinta eyes acquisitions in Europe

OSLO (Reuters) - Online classifieds group Adevinta (ADEB.OL) could spend parts of its growing cash pile on acquisitions in European markets, the company’s chief executive told Reuters on Wednesday.

FILE PHOTO: Adevinta CEO Rolv Erik Ryssdal speaks at the Oslo stock exchange, Norway April 10, 2019. REUTERS/Nerijus Adomaitis/File Photo

The Norwegian firm, which listed in Oslo last April, has seen its shares rise by 50% since the spin-off from media company Schibsted (SBSTA.OL).

Adevinta had said from the outset it would not pay a dividend for 2019, and has not yet decided when to start doing so, Rolv Erik Ryssdal said in an interview.

Cash flow from operating activities, excluding acquisitions and investments made during the year, rose by 81% year-on-year in 2019 to 134 million euros ($146.2 million).

“At some point we will pay a dividend but it’s a bit early to say when. We do want to keep out financial flexibility but we’re not going to sit on a mountain of cash, so it depends on our mergers and acquisitions activity,” Ryssdal told Reuters.

“We want to strengthen out position in markets we’re already in, but we could also be interested in geographies that are adjacent to those we’re already in, particularly in western Europe,” he added.

Adevinta’s biggest markets are in France, Spain and Brazil.

The company’s underlying revenues grew by 16% year-on-year in the fourth quarter of 2019 to 200.2 million euros against a long-term goal of expanding by between 15% and 20% annually.

The company’s earnings before interest, tax, depreciation and amortization also grew by 16% to 52.4 million euros, slightly lagging the 54 million euros expected on average by analysts polled by Refinitiv.

“We had a mixed result in the fourth quarter,” Ryssdal said, adding that while its main markets had delivered as expected, the performance in Italy had been weak amid a deteriorating economic outlook.

The company will continue to invest strongly in technology in 2020 to help retain and attract users to its sites, the CEO added.

The company’s brands include France’s Leboncoin, Brazil’s OLX and dozens more across Europe, the Americas and North Africa.

Reporting by Terje Solsvik, editing by Gwladys Fouche

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