Adevinta : Q2 2021 Quarterly Report

Adevinta Highlights

Highlights of Q2 2021

Further recovery in revenues

• Total revenues1 up 36% yoy at €213m
• Organic growth2 of 36% yoy (+15% vs Q2 2019)
• Online classifeds revenues1 up 39% yoy (of which 6% from transactional services)
• Display advertising revenues1 up 35% yoy

EBITDA1 up 24% yoy to €52m

• Top line growth
• Beneft from divestments
• Partially offset by strong marketing investment which more than doubled vs Q2 2020
• Increase in personnel costs (one-off benefts in Q2 2020 related to Covid-19 temporary redundancy support and expected ramp-up in hirings)
• Increase in transactional costs due to the ramp-up of the service
• One-offimpact of ESOP in Brazil

Acquisition of eBay Classifeds Group completed on 25 June 2021

• Creation of a globally scaled, pure-play online classifeds leader with a diversifed and complementary portfolio of assets and brands
• New Executive team to drive forward Adevinta's long term strategy and ambitions

Disposal of Shpock completed and sale process for remaining UK assets ongoing

• Sale of Shpock completed on 2 June 2021
• Active engagement on the Gumtree UK and Motors.co.uk sales process

1Proportionate basis incl JVs - for defnition of EBITDA please see section "Defnitions and Reconciliations" at the end of the report 2Growth at constant foreign exchange rate, excluding M&A and disposals

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Key fnancial numbers

Alternative performance measures (APM) used in this report are described and presented in the Defnitions and Reconciliations section at the end of the report.

	Second quarter	(€ million)		YTD
yoy%	2020	2021		2021	2020	yoy%
36%	156	213	Operating revenues incl. JVs	413	344	20%
24%	42	52	EBITDA incl. JVs	109	85	28%
	27.3%	24.7%	EBITDA margin incl. JVs	26.5%	24.7%
			Operating revenues - segments
36%	86	117	France	228	184	24%
45%	33	48	Spain	92	79	15%
>100 %	13	30	Brazil	57	33	73%
19%	32	38	Global Markets	74	69	7%
			EBITDA - segments
31%	41	54	France	109	88	24%
46%	11	16	Spain	29	25	17%
-175%	5	(3)	Brazil	1	7	-84%
40%	2	2	Global Markets	5	3	57%
			Cash fow
-85%	13	2	Net cash fow from operating activities	41	56	-27%
Key consolidated fnancial fgures
	Second quarter	(€ million)		YTD
yoy%	2020	2021	Consolidated fnancial fgures	2021	2020	yoy%
33%	145	193	Operating revenues - segments	375	320	17%
36%	86	117	France	228	184	24%
45%	33	48	Spain	92	79	15%
>100 %	13	30	Brazil	57	33	73%
19%	32	38	Global Markets	74	69	7%
18%	2	3	Other and Headquarters	5	4	15%
-95%	(22)	(43)	Eliminations	(81)	(50)	-63%
37%	39	53	Gross operating proft (EBITDA) - segments	106	79	34%
31%	41	54	France	109	88	24%
46%	11	16	Spain	29	25	17%
-175%	5	(3)	Brazil	1	7	-84%
40%	2	2	Global Markets	5	3	57%
-39%	(12)	(16)	Other and Headquarters	(32)	(32)	0%
>100 %	(8)	1	Eliminations	(7)	(13)	45%

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Operational Development

Commentary and fnancial numbers in the Operational Development section of this report refers to proportionate numbers including JVs.

Adevinta Overview

	Second quarter	(€ million)		YTD
yoy%	2020	2021	ADEVINTA	2021	2020	yoy%
33%	145	193	Operating revenues	375	320	17%
86%	11	20	Proportional revenues from JVs	38	24	56%
36%	156	213	Operating revenues incl. JVs	413	344	20%
37%	39	53	EBITDA	106	79	34%
	26.6%	27.4%	EBITDA margin	28.2%	24.6%
-109%	4	(0)	Proportional EBITDA from JVs	3	6	-45%
24%	42	52	EBITDA incl. JVs	109	85	28%
	27.3%	24.7%	EBITDA margin incl. JVs	26.5%	24.7%

Operating revenues incl. JVs by category

	Second quarter	YTD
€ million	2021	2020	2021		2020
Advertising revenues	35	26	67		57
Classifeds revenues*	177	127	344		282
Other operating revenues	1	3	2		5
Operating revenues incl. JVs	213	156	413		344

*Classifeds revenues include transactional revenues for €11 million in Q2 2021 and €4 million in Q2 2020.

Revenues, including JVs, were up 36% in Q2 compared to the same period last year. Organic revenue growth (Growth at constant foreign exchange rate and excluding M&A and disposals) stood at 36% year-on-year, and at 15% compared to Q2 2019, demonstrating further recovery across the board. Online classifeds revenues improved by 39% (of which 6% is attributable to transactional services) compared to Q2 2020, which was strongly impacted by the Covid-19 crisis. Display advertising revenues increased 35% year-on-year.

Disposals in Global Markets and the Grupo Zap acquisition had a 0.6 point positive impact on revenue growth, whilst changes in exchange rate contributed negatively with 0.4 points.

Gross operating proft (EBITDA) including JVs increased 24% compared to Q2 2020 (+5% compared to Q2 2019). Revenue growth and beneft from divestments were partially offset by the negative one-off of ESOP costs in Brazil, as well as by strong marketing investment in France, increase in personnel costs in the absence of government subsidies, and ramp-up of transactional services.

France

	Second quarter	(€ million)		YTD
yoy%	2020	2021	France	2021	2020	yoy%
36%	86	117	Operating revenues	228	184	24%
40%	45	63	Operating expenses	119	96	25%
31%	41	54	EBITDA	109	88	24%
	47.5%	46.0%	EBITDA margin	47.7%	47.8%

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Revenues in France grew by 36% in the second quarter and 32% compared to the second quarter of 2019 (including contribution from L'Argus) demonstrating rapid recovery as Covid-19 restrictions eased progressively in the quarter. Total classifeds revenues grew 35% compared to last year (of which 9% attributable to transactional services) and 41% compared to Q2 2019 (including contribution from l'Argus). We continued to see solid growth throughout the second quarter especially in the motor and real estate verticals, primarily driven by positive ARPA development. Holidays rental vertical improved signifcantly as a consequence of the relaxation of mobility restrictions. Advertising revenue grew 46% year-on-year and is now nearly in line with 2019 fgures.

EBITDA margin softened to 46.0% despite revenue growth mainly due to strong marketing investment done in the second quarter, which doubled compared to low levels in Q2 2020, as a result of extensive campaigns to celebrate the 15th anniversary of Leboncoin and to promote transactional services. The increasing share of transactional services (contributing to gross profts, albeit at lower relative margin) as well as the expected increase in personnel costs due to the ramp-up in hiring and the non-recurring beneft from Covid-19 temporary redundancy support measures in 2020, also impacted negatively the margin performance.

Trafc continued to show good growth (+16% year-on-year) especially during the frst half of the quarter while a slight deceleration was noticed in June mainly driven by external factors such as the end of third lockdown. New ads and leads experienced a similar trend.

In Q2 we continued to accelerate the P2P transactional solution with pricing strategy on shipping and a new scoring ranking test on listing. Our payment solution for cars continued to scale with an automated payment for used cars sellers. We reinforced security and trust introducing authentication (sms) and we continued to improve the user experience. We remained focused on our market verticalization strategy in Real Estate (new listing, land surface indication, local information on maps...), Motors (new listings for cars, criterias...) and Holiday Rentals (sms booking approval for hosts, improved calendar…).

Spain

	Second quarter	(€ million)		YTD
yoy%	2020	2021	Spain	2021	2020	yoy%
45%	33	48	Operating revenues	92	79	15%
45%	22	32	Operating expenses	63	55	15%
46%	11	16	EBITDA	29	25	17%
	32.8%	33.0%	EBITDA margin	31.3%	30.9%

Revenues in Spain grew by 45% compared to Q2 2020 and by 4% compared to Q2 2019, now above pre-covid levels and hitting an all time high quarterly level. Classifeds revenues were up 45% compared to Q2 2020 and 5% compared to Q2 2019 demonstrating a strong recovery in the verticals. We observed signifcant growth in cars revenue, also growing at double digit compared to Q2 2019, fueled by the combination of higher dealer penetration in both large clients and through Milanuncios, and higher ARPD. The real estate market continued to recover in terms of the number of house transactions, very close to 2019 levels at the end of May. We saw signifcant recovery in jobs revenue despite the still weak underlying market, benefting from the digitalisation of Small Medium Businesses in Spain.

Display advertising grew 45% year-on-year led by the increase in direct sales and was broadly in line with Q2 2019.

The EBITDA margin in Q2 was slightly above Q2 2020 at 33.0%, as the revenues increase was partly offset by the reactivation of marketing spending and the increase in personnel costs, no longer benefting from the temporary redundancy in the context of Covid-19, in order to support and boost our market positions. We expect investment to further increase in the second half as a result of the increasingly competitive environment

We saw trafc down by 3% year-on-year in Q2, negatively impacted by the new way of measuring following the implementation of the new cookie policies and by strong competition in our generalist brand. This was partially offset by trafc growth in our motor and real estate marketplaces. On the other hand, leads were up 15% and private content grew by 2% in Q2 with all sites showing positive growth.

In Q2, in Fotocasa we launched the express visit feature that enables users to have a 3D video call with the agencies, the Google one tap log-in and the Geo advisor, which will bring trafc growth. In Jobs we developed a multi publishing product between InfoJobs and Milanuncios, we launched the salary calculator and enabled the curriculum vitae multi format upload. In Motor, we launched the price drop notifcation, unifed categories in app and web and started the migration of our professional clients to the new responsive site. We improved content sharing between Milanuncios and Coches.net and developed a car photo autocomplete using machine learning in Milanuncios. Besides, we continued improving our Payment & Delivery solution by the buy button in the price list and by opening transactional to big items.

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