Adevinta revamps growth strategy as Q3 lags on car woes
OSLO, Nov 25 (Reuters) - Norway's Adevinta (ADEA.OL), the world's largest classified ads company, posted on Thursday a smaller-than-expected rise in third-quarter revenue, hampered by weakness in the autos segment, which it said will continue into next year.
Following its recent $13 billion takeover of eBay's (EBAY.O) classified ads unit, Adevinta said it now plans to concentrate its business around fewer countries, primarily in Europe, and will invest more heavily in those markets to boost growth.
Adevinta's July-September revenue rose 6% year-on-year to 386 million euros ($432.7 million), lagging analysts' average forecast of 406 million euros, according to Refinitiv data.
The company's shares fell 5.9% by 0806 GMT.
A shortage of semiconductors has constrained global car production this year, hampering sales and, in turn, advertising. Adevinta's German unit Mobile.de saw a 3% revenue decline in the third quarter, compared to last year.
Adevinta's earnings before interest, tax, depreciation and amortization (EBITDA) declined 7% year-on-year to 127 million euros in the third quarter, lagging the 136 million euros expected by analysts, according to Refinitiv.
The company on Thursday set a goal of growing by 15% in the mid-to-long term, but said this would not be met next year.
"In 2022, assuming a gradual recovery in the motors market in the second half, we expect core markets revenue growth to be low double-digit," Adevinta said in its earnings report.
Adevinta now plans to concentrate on five European markets - Germany, France, Italy, Spain and the Benelux nations - and divest operations in Australia and South Africa next year.
"These are markets where we have strong positions and where we see possibilities for faster growth," Chief Executive Rolv Erik Ryssdal told Reuters.
"Canada, Mexico, Hungary and Belarus have been put up for review. These are smaller operations, but we need some more time to conclude," he said.
However, Adevinta will keep its joint ventures in Brazil, Austria and Ireland. It set a mid-to-long term goal of an EBITDA margin of 40-45%, up from 33% in the third quarter.
($1 = 0.8920 euros)