Enhance and Expand: A Recipe for Success Justin Saks Emma Browne Craig Schleicher
Enhance and Expand: A Recipe for Success Justin Saks Emma Browne Craig Schleicher Shreya Oswal Value Proposition Value Proposition Objective Critical Issues Objective Enhance Expand Recommendation Implementation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media Value Proposition Value Proposition Objective Critical Issues Objective Enhance Expand Recommendation Implementation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media 1. Attractive to Investors 2. Attractive to Employees 3. Being More Attractive than the Alternatives Value Proposition Value Proposition Objective Critical Issues Objective Critical Issues Enhance Expand Recommendation Implementation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media Global Financial Crisis Need to be Market leader Fast-Moving Industry Value Proposition Value Proposition Objective Critical Issues Objective Critical Issues Enhance Expand Recommendation Implementation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media Global Financial Crisis 1. Every Step is Scrutinized 2. Increased Volatility 3. Opportunity is still there Need to be Market leader Fast-Moving Industry Value Proposition Value Proposition Objective Critical Issues Enhance Expand Recommendation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media Objective Critical Issues Implementation Global Financial Crisis Need to be Market leader 1. 1. Would rather be #1 in one market than #2 in three or four markets 2. 3. Every Step is Scrutinized Increased Volatility Opportunity is still there Fast-Moving Industry Value Proposition Value Proposition Objective Critical Issues Enhance Expand Recommendation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media Objective Critical Issues Implementation Global Financial Crisis Need to be Market leader 1. 1. 2. 3. Every Step is Scrutinized Increased Volatility Opportunity is still there Would rather be #1 in one market then #2 in three or four markets Fast-Moving Industry 1. Industry is constantly changing 2. Need to react quickly 3. Want to be as close to first mover as possible Value Proposition Value Proposition Objective Critical Issues Enhance Recommendation Enhance Objective Critical Issues Recommendation Expand Implementation Conclusion Achieved Value Expand Build an attractive future for Schibsted Classified Media Global Financial Crisis Need to be Market leader “Two E Strategy: Enhance” 1. Move towards a Hybrid business model 2. Ensure that we are equipped for long term sustainable success Fast-Moving Industry “Two E Strategy: Expand” Value Proposition Value Proposition Objective Critical Issues Enhance Expand Recommendation Achieved Value Build an attractive future for Schibsted Classified Media Objective Recommendation Conclusion Expand Enhance Critical Issues Implementation Global Financial Crisis Need to be Market leader “Two E Strategy: Enhance” 1. 2. Move towards a Hybrid business model Ensure that we are equipped for long term sustainable success Fast-Moving Industry “Two E Strategy: Expand” 1. Avoid the “Flight to Safety” mentality 2. Take advantage of the times and position SCM as a first mover 3. Expand aggressively and quickly Value Proposition Value Proposition Objective Critical Issues Objective Critical Issues Recommendation Benefits Enhance Expand Recommendation Implementation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media Global Financial Crisis Need to be Market leader Fast-Moving Industry “Two E Strategy: Enhance” “Two E Strategy: Expand” Leadership Position Across Markets Sustainable Competitive Position Value Proposition Value Proposition Objective Critical Issues Objective Critical Issues Recommendation Benefits Enhance Expand Recommendation Implementation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media Global Financial Crisis Need to be Market leader “Two E Strategy: Enhance” Fast-Moving Industry “Two E Strategy: Expand” NPV of NOK~$410mm or USD$56.11mm Break Even of Less Than A Year Agenda Value Proposition Enhance Justin Saks Emma Browne Craig Schleicher Shreya Oswal Emma Browne Justin Saks Expand Implementation Introduction Situation Analysis Enhance Brand Expand into New Markets Implementation Financials/Conclusion Conclusion Market Growth Changes Enhance Value Proposition The Market Our Position Decision Tree Expand Implementation Conclusion Solution Previous Market Growth Transition from Print Media •Classified media is now primarily online European Classifieds Market Size (Billions of €) Rapid Growth in Market €2.50 •Advertising expenditure for online classifieds alone in Europe expected to rise to 2.5 B Euros by 2012 €2.25 €2.00 Lower competitive threat due to high growth €1.75 2009 2010 2011 2012 Market Growth Changes Enhance Value Proposition The Market Our Position Decision Tree Expand Implementation Conclusion Solution Previous Market Growth Threat in Economic Crisis Transition from Print Media Discourages Consumer Spending •Classified media is now primarily online Rapid Growth in Market •Online advertising expenditure for online classifieds alone in Europe expected to rise to 2.5 B Euros by 2012 •Consumers spend less, including on classified websites due to economic uncertainty Limits Growth with Current Strategy •Necessity to innovate strategy to draw in new consumers Increases Competitive Environment Major growth from market growth •Same companies competing for fewer customers SCM Current Presence: All Markets Value Proposition The Market Our Position Enhance Decision Tree Expand Solution Implementation Conclusion European Presence: Multi-Brand Leaders Value Proposition The Market Our Position Enhance Decision Tree Expand Solution Implementation Conclusion European Presence: Single-Brand Exposure Value Proposition The Market Our Position Enhance Decision Tree Expand Solution Implementation Conclusion Decision Tree Value Proposition The Market Our Position Enhance Expand Decision Tree M&A? Organic Growth? M&A How To Maximize Attractiveness Solution Organic Growth Roll Outs Roll Outs? Implementation Conclusion Decision Tree Value Proposition The Market Our Position Enhance Expand Decision Tree M&A? Organic Growth? Organic Growth Roll Outs Conclusion Solution Roll Outs? Merger Not a good company fit; difficult to coordinate; limits upside Acquisition Expensive; risky; not best idea in these times Cost Effectiveness Not long term enough, falls victim to flight to safety Brand Expansion Encourages customer usage; sustainable in the long term Blocket or Infojobs Model Easier and faster to implement; low capital expenditure Finn Model Very expensive and slow to implement; risky M&A How To Maximize Attractiveness Implementation Decision Tree Value Proposition The Market Our Position Enhance Decision Tree Expand Organic Growth Roll Outs Conclusion Solution Merger Not a good company fit; difficult to coordinate; limits upside Acquisition Expensive; risky; not best idea in these times Cost Effectiveness Not long term enough, falls victim to flight to safety Brand Expansion Initiative 1: Implement Hybrid Strategy in Current Leadership Markets M&A How To Maximize Attractiveness Implementation Blocket or Infojobs Model Finn Model Initiative 2: Expand revenues by immediately rolling out easier models internationally Very expensive and slow to implement; risky Current Business Models Enhance Value Proposition The Hybrid Model In Theory Country Spain Sweden Norway AOL Case Study Expand Details Implementation Conclusion Theoretical Roll Out Finn vs. Hybrid General Cars Real Estate Jobs New Business Model Enhance Value Proposition The Hybrid Model In Theory Country AOL Case Study Expand Details Implementation Conclusion Theoretical Roll Out Finn vs. Hybrid General Cars Real Estate Jobs Coches Casas Empleos Bilar Hus Jobb Biler Hus Jobb Spain Sweden Norway New Business Model Enhance Value Proposition The Hybrid Model In Theory Country Spain Sweden Norway AOL Case Study Expand Details Implementation Conclusion Theoretical Roll Out Finn vs. Hybrid General Cars Real Estate Hybrid model incorporates Coches Casas specialized sites with greater Bilar Hus functionality than current Finn model Biler Hus Jobs Empleos Jobb Jobb AOL Classifieds Case Study Enhance Value Proposition The Hybrid Model AOL Case Study Expand Details Implementation Conclusion Theoretical Roll Out Key Takeaways Similar Approach AOL Classifieds •USA Launch: 23 February 2009 •Expanding to Canada and UK by end of week •Access to 40 million listings through Oodle partnership •Interconnected with AOL Jobs, Autos, and Real Estate Horizontal breadth with depth in fullfunction vertical segments No Immediate Threat Oodle aggregation only available in UK, US, Canada…AOL not major player in Europe Need for Speed Must get to market before other companies can Hybrid Model Enhance Value Proposition The Hybrid Model Expand AOL Case Study Implementation Details Structure Structure INTEGRATED Single login for all product categories to improve ease of use BROAD PRESENCE Horizontal coverage of all product categories within general marketplace FULL FUNCTIONALITY Improved functionality within key vertical categories including autos, real estate, and jobs Conclusion Theoretical Roll Out Benefits Example Revenue Sources Hybrid Model Enhance Value Proposition The Hybrid Model Expand AOL Case Study Implementation Details Structure Conclusion Theoretical Roll Out Benefits Example Revenue Sources Structure Benefits INTEGRATED Powerful Brand Name Single login for all product categories to improve ease of use BROAD PRESENCE Horizontal coverage of all product categories within general marketplace FULL FUNCTIONALITY Improved functionality within key vertical categories including autos, real estate, and jobs •All marketing focused on single brand •Leverage credibility across categories Expanded Customer Base •Customers come for one category but see them all •Potential to increase time on site per viewer Tailored To Consumer Preferences •Only provides expert services when needed •Takes best of both worlds from previous business models Hybrid Model Enhance Value Proposition The Hybrid Model Expand AOL Case Study Implementation Details Structure Conclusion Theoretical Roll Out Benefits Example Revenue Sources Structure Benefits INTEGRATED Powerful Brand Name Single login for all product categories to improve ease of use •All marketing focused on single site •Can build a strong reputation for community Hybrid Platform Combines Expanded Customer Base BROAD PRESENCE Functionality of Multiple Sites •Customers come for one category but see them all Horizontal coverageInto of all product A Single Strong Brand categories within general marketplace •Potential to increase time on site per viewer FULL FUNCTIONALITY Improved functionality within key vertical categories including autos, real estate, and jobs Tailored To Consumer Preferences •Replicates successful functionality of individual sites by only providing additional expertise when necessary Site Design Mock-Up Enhance Value Proposition The Hybrid Model Expand AOL Case Study Details Structure www.URL.xx www.URL.xx Implementation Conclusion Theoretical Roll Out Benefits Example Revenue Sources Site Design Mock-Up Value Proposition The Hybrid Model Enhance Expand AOL Case Study Implementation Details Structure Full-Service Portals www. URL.xx www.URL.xx Simple Lists Conclusion Theoretical Roll Out Benefits Example Revenue Sources Revenue Sources Value Proposition Enhance The Hybrid Model Expand AOL Case Study Details Structure Specific Categories •Free Search Full-Service Portals •Listing Fee •Paid Advertising General Merchandise •Free Search •Free Listing •Paid Advertising Implementation Simple Lists Conclusion Theoretical Roll Out Benefits Example Revenue Sources Revenue Sources Value Proposition Enhance The Hybrid Model Expand AOL Case Study Details Structure Specific Categories Implementation Conclusion Theoretical Roll Out Benefits Example Revenue Sources Benefits •Free Search •Listing Fee •Paid Advertising Encourages Consumer Use •Free postings in most categories increase willingness to use site Monetization When Possible •Listing fees in specialized categories where listers are willing to pay General Merchandise •Free Search •Free Listing •Paid Advertising Sustainable for Long-Term •Don’t have to worry about being undercut by free competitors •Large community of free users will attract paid listers in premium categories Roll-Out Process Value Proposition The Hybrid Model Enhance AOL Case Study Expand Details Implementation Theoretical Roll Out Timing Existing Market Step Include content from existing 1 specialty websites all Step Re-brand websites under one 2 name per country Develop additional Step specialty content as 3 needed Risks Conclusion Roll-Out Process Value Proposition The Hybrid Model Enhance AOL Case Study Expand Details Implementation Theoretical Roll Out Timing Existing Market Step Include content from existing 1 specialty websites all Step Re-brand websites under one 2 name per country Develop additional Step specialty content as 3 needed Risks Greenfield Roll-Out Step Introduce 1 blocket-model Heavy Step advertising to 2 gain audience Develop specialty Step content within 3 blocket-style site Conclusion Roll-Out Process Value Proposition The Hybrid Model Enhance Expand AOL Case Study Details Implementation Theoretical Roll Out Timing Existing Market Step Include content from existing 1 verticals websites all Step Re-brand websites under one 2 name per country Risks Greenfield Roll-Out Step Introduce 1 blocket-model Both new and existing markets Heavy Step experience advertising to 2 gain audience phased transitions Develop additional Step vertical content as 3 needed Develop verticals Step within blocket3 style site Conclusion Risk Analysis Enhance Value Proposition The Hybrid Model AOL Case Study Expand Implementation Details Conclusion Theoretical Roll Out Timing Risks RISK MITIGATION CONTINGENCY 1 Brand Confusion Emphasize Different Page Layouts, i.e. “Cars by Finn” Increase focus on sub-branding; Category specific advertisements 2 Consumer Resistance to OneShop-Fits-All Focus on additional services and convenience Encourage consumers to go straight to category sites; De-emphasize portal 3 Excessive Costs Phased development; Completed loan restructuring Scale back development schedule; Only complete Phase 1 in each locations 4 Logistics Leveraging best practices; Phased roll-out Bring in project management experts to assist with training Factors Influencing Evaluation Value Proposition Enhance The Potential Opportunities Expand The Criteria Implementation Prime Opportunities Conclusion Markets to Enter Top Line Evaluation of 50 European Countries In Depth Evaluation of 24 Countries Factors Influencing Evaluation Value Proposition Enhance Expand The Potential Opportunities Generalist Vehicles The Criteria Travel Implementation Prime Opportunities Jobs Conclusion Markets to Enter General Indicators Factors that indicate consumers’ willingness to “buy” our product Indicates strong chance of success in those markets A way to prioritize expansion into different countries Resources are limited in current financial crisis Factors Influencing Evaluation Enhance Value Proposition Expand The Criteria The Potential Opportunities Generalist Generalist Implementation Vehicles Vehicles Travel Prime Opportunities Travel Jobs Jobs Conclusion Markets to Enter General Indicators General Indicators Consumer expenditure on clothing - € mn Consumer expenditure on clothing materials - € mn Consumer expenditure on garments - € mn Consumer expenditure on other articles of clothing and clothing accessories - € mn Consumer expenditure on cleaning, repair and hire of clothing - € mn Consumer expenditure on footwear - € mn Consumer expenditure on household goods and services - € mn Consumer expenditure on household goods and services - € mn Consumer expenditure on audio-visual, & information processing equipment - € mn Consumer expenditure on other major durables for recreation and culture - € mn Consumer expenditure on other recreational items and equipment, gardens and pets - € mn Consumer expenditure on recreational and cultural services - € mn Consumer expenditure on newspapers, magazines, books and stationery - € mn Consumer expenditure on package holidays - € mn Consumer expenditure on miscellaneous goods and services - € mn Factors Influencing Evaluation Value Proposition Enhance Expand The Criteria The Potential Opportunities Generalist Generalist Vehicles Implementation Vehicles Travel Prime Opportunities Travel Jobs Jobs Consumer expenditure on purchase of cars, motorcycles and other vehicles - € mn Conclusion Markets to Enter General Indicators General Indicators Consumer expenditure on buses, coaches and taxis € mn Factors Influencing Evaluation Enhance Value Proposition Expand The Criteria The Potential Opportunities Generalist Generalist Vehicles Implementation Vehicles Travel Prime Opportunities Travel Jobs Conclusion Markets to Enter Jobs General Indicators General Indicators Consumer expenditure on transport services - € mn Consumer expenditure on rail travel - € mn Consumer expenditure on air travel - € mn Consumer expenditure on other travel - € mn Consumer expenditure on hotels and catering - € mn Consumer expenditure on communications - € mn Factors Influencing Evaluation Value Proposition Enhance Expand The Criteria The Potential Opportunities Generalist Generalist Vehicles Implementation Vehicles Travel Population aged 15-19: January 1st Population aged 20-24: January 1st Population aged 25-29: January 1st Population aged 30-34: January 1st Population aged 35-39: January 1st Population aged 40-44: January 1st Population aged 45-49: January 1st Economically active population Unemployed population Prime Opportunities Travel Jobs Jobs Conclusion Markets to Enter General Indicators General Indicators Factors Influencing Evaluation Enhance Value Proposition Expand The Criteria The Potential Opportunities Generalist Generalist Vehicles Implementation Vehicles Travel Prime Opportunities Travel Jobs Jobs Conclusion Markets to Enter General Indicators General Indicators Annual disposable income - € mn Personal computers (PCs) in use - '000 Internet users - '000 Internet subscribers - '000 Dial-up Internet subscribers - '000 Broadband Internet subscribers - '000 Capital investment in telecommunications - € mn Total telecommunications revenues - € mn Population: national estimates at January 1st - '000 Households by tenure [home owner] Households by type of dwelling [house] Households by type of dwelling [apartment] Consumer expenditure by resident households - € mn Gross national income (GNI) - € mn Households by tenure [rented] Choosing Attractive Markets to Enter Value Proposition Enhance Expand The Potential Opportunities Ideal Netherlands Finland Switzerland Russia Turkey Greece Ukraine Poland Internet Sales Sales Growth The Criteria Implementation Prime Opportunities Consumer Sentiment Conclusion Markets to Enter Fragmentation Choosing Attractive Markets to Enter Value Proposition Enhance Expand The Potential Opportunities Ideal Netherlands Finland Switzerland Russia Turkey Greece Ukraine Poland Internet Sales Sales Growth The Criteria Implementation Prime Opportunities Consumer Sentiment Conclusion Markets to Enter Fragmentation Choosing Attractive Markets to Enter Value Proposition Enhance Expand The Potential Opportunities Ideal Netherlands Finland Switzerland Russia Turkey Greece Ukraine Poland Internet Sales Sales Growth The Criteria Implementation Prime Opportunities Consumer Sentiment Conclusion Markets to Enter Fragmentation Choosing Attractive Markets to Enter Value Proposition Enhance Expand The Potential Opportunities Ideal Netherlands Finland Switzerland Russia Turkey Greece Ukraine Poland Internet Sales Sales Growth The Criteria Implementation Prime Opportunities Consumer Sentiment Conclusion Markets to Enter Fragmentation Choosing Attractive Markets to Enter Value Proposition Enhance Expand The Potential Opportunities Ideal Internet Sales Sales Growth The Criteria Implementation Prime Opportunities Consumer Sentiment Conclusion Markets to Enter Fragmentation Netherlands 1 Finland 2 Switzerland 3 Russia 2 Turkey 1 Greece 2 Ukraine 3 Poland 3 Three Phases of Expansion Into New Markets Value Proposition Enhance The Potential Opportunities Expand The Criteria Implementation Conclusion Prime Opportunities Markets to Enter Where Phase One: Most Attractive Phase Two: Attractive Phase Three: Becoming Attractive How Implementing a Hybrid Model Value Proposition Enhance The Potential Opportunities Expand The Criteria Implementation Prime Opportunities Conclusion Markets to Enter Where Step 1: Enter with a Blocket or Infojobs Model • Allows quicker and more cost effective entry • Can use profits for next phases of expansion How Implementing a Hybrid: Step 2 Value Proposition Enhance The Potential Opportunities Expand The Criteria Implementation Prime Opportunities Conclusion Markets to Enter Where Step 1: Enter with a Blocket or Infojobs Model • Allows quicker and more cost effective entry • Can use profits for next phases of expansion Step 2: Add Vertical Components to Model • Increase traffic to website • Build credibility in key areas: jobs, vehicles, & real estate How Implementing a Hybrid: Step 3 Value Proposition Enhance The Potential Opportunities Expand Implementation The Criteria Prime Opportunities Conclusion Markets to Enter Where Step 1: Enter with a Blocket or Infojobs Model • Allows quicker and more cost effective entry • Can use profits for next phases of expansion Step 2: Add Vertical Components to InfoJobs Model • Increase traffic to website • Build credibility in key areas: jobs, vehicles, & real estate How Step 3: Integrate Vertical & Horizontal Services • Enhance user experience • Become one-stop shop for consumers • Solidify market leader position Achieved Value from Hybrid Model Value Proposition Enhance The Potential Opportunities Expand Implementation The Criteria Prime Opportunities Conclusion Markets to Enter Where Step 1: Enter with a Blocket or Infojobs Model • Allows quicker and more cost effective entry • Can use profits for next phases of expansion Step 2: Add Vertical Components to InfoJobs Model • Increase traffic to website • Build credibility in key areas: jobs, vehicles, & real estate How Step 3: Integrate Vertical & Horizontal Services • Enhance user experience • Become one-stop shop for consumers • Solidify market leader position Cross category synergies Increased number of unique users Increased number of page views Increased revenue per user Logistics and HR Implementation Value Proposition Enhance Expand Logistics Hire personnel in each new country division Project Manager Marketing Director Senior Developer Senior Developer Marketing Implementation Financials Conclusion Timeline Logistics and HR Implementation Value Proposition Enhance Expand Logistics Marketing Hire personnel in each new country division Project Manager Marketing Director Senior Developer Inform SCM Headquarters of best practices in market Senior Developer Implementation Financials Conclusion Timeline Logistics and HR Implementation Value Proposition Enhance Expand Logistics Marketing Marketing Director Senior Developer Financials Conclusion Timeline Spread knowledge and best practices to new and existing markets Hire personnel in each new country division Project Manager Implementation Inform SCM Headquarters of best practices in market Senior Developer Logistics and HR Implementation Value Proposition Enhance Expand Logistics Hire personnel in each new country division Project Manager Marketing Director Senior Developer Marketing Implementation Financials New country divisions can add to overall success of company through Inform SCM spreading Headquarters ofglobal best practices in learning market Senior Developer Conclusion Timeline Spread knowledge and best practices to new and existing markets Marketing Implementation Value Proposition Enhance Expand Logistics Marketing Comparable marketing • Localized by country marketing director budget to • Large percent of initial previous launch budget rollouts Cross-brand • Purchase confirmation e-mails with embedded viral advertisements advertising • Promote cross-brand traffic campaign on website Implementation Financials Conclusion Timeline $100,000 Initial Marketing Budget Fits in with hybrid model to leverage horizontal products Marketing Implementation Value Proposition Enhance Expand Logistics Partnerships with online newspapers Marketing 50% Shared Rev. Financials • Use linked interface from their classifieds • Additional source for revenue streams • Push more traffic towards our broad site SCM: Charge newspapers to link to co-branded classified page Increased Online Shoppers for Ad Posters Implementation Exposure to Users in SCM’s New Markets Newspapers: Give readers opportunity to post on national classified page Conclusion Timeline Marketing Implementation Value Proposition Enhance Expand Logistics Partnerships with online newspapers Marketing 50% Shared Rev. Financials Conclusion Timeline • Use linked interface from their classifieds • Additional source for revenue streams • Push more traffic towards our broad site SCM: Charge newspapers to link to co-branded classified page Increased Online Shoppers for Ad Posters Implementation Exposure to Users in SCM’s New Markets Newspapers: Give readers opportunity to post on national classified page Potential Clients in Initial New Markets Largest Media Group in NL; No Online Classifieds Most widely circulated newspaper in Turkey; No Online Classifieds Financial Implications Value Proposition Enhance Expand Logistics Implementation Marketing Financials Enhance Financials FCFF From Project 2009E 2010E 2011E 2012E $202,732,240 $247,131,148 $284,200,820 $326,830,943 (300,000) 506,831 709,563 916,393 (900,000) 1,235,656 864,959 1,200,615 (600,000) 710,502 994,703 1,105,205 2 (169,614) (280,644) (110,000) (200,000) (200,000) 3 (254,421) (420,966) (165,000) (300,000) (300,000) 1 (84,807) (140,322) (55,000) (100,000) (100,000) 817,077 1,143,908 1,960,986 2 (169,614) (280,644) (110,000) (200,000) (200,000) 15,580,400 15,094,600 0 0 0 0 0 0 1,916,389 1,856,636 0 0 0 0 0 0 2,812,767 17,917,460 17,358,790 3,226,000 34,214,800 5,180,700 0 0 0 2,203,848 2,135,131 264,532 2,805,614 424,817 0 0 0 6,393,555 20,605,079 19,962,609 3,709,900 39,347,020 5,957,805 2,623,500 0 0 2,534,425 2,455,401 304,212 3,226,456 488,540 215,127 0 0 8,744,031 23,695,841 22,957,000 4,266,385 45,249,073 6,851,476 3,017,025 13,392,000 7,486,000 2,914,588 2,823,711 349,844 3,710,424 561,821 247,396 549,072 306,926 10,503,524 $3,729,160 $7,594,170 $9,849,236 $12,464,510 Timeline Expand Financials Football Field Key Assumptions - Base Case Transforming Web Dev. I1, P1 Transformations I1, P2 Transformations I1, P3 Transformations I1, P1 Marketing Synergies I1, P2 Marketing Synergies I1, P3 Marketing Synergies I1, P1 Sales Synergies I1, P2 Sales Synergies I1, P3 Sales Synergies Development Roll out Project Manger Cost per Sr. Developer Marketing Director Marketing Budget Internet Mkt. Growth Aggressive Market Capture Safe Market Capture Conservative Market Capture Revenue Per User $300,000 1.0 3.0 2.0 0.25% 0.50% 0.25% 0.35% 0.35% 0.35% $100,000 ($84,807) ($70,161) ($55,000) ($100,000) 15.0% 30.0% 20.0% 10.0% $0.41 Project Valuation WACC EBITDA Exit Existing SCM Operating Profit (1) Transforming Existing Businesses Web Development per Transform Synergies from Marketing Synergies from Sales Web Development Initiative Expansion into new business market Costs Number of Rollouts Project Manager Senior Developers 2x Marketing Director Web Development Marketing Budget Revenue Netherlands Total Subscribers Turkey Total Subscribers Finland Total Subscribers Russia Total Subscribers Switzerland Total Subscribers Greece Total Subscribers Poland Total Subscribers Ukraine Total Subscribers Netherlands Revenue Turkey Total Revenue Finland Total Revenue Russia Total Revenue Switzerland Revenue Greece Total Revenue Poland Total Revenue Ukraine Total Revenue Expansion Initiative Conclusion 3.0x 3.5x 4.0x 4.5x 5.0x 9.94% $51.22 $55.48 $59.75 $64.02 $68.28 10.94% $49.66 $53.78 $57.89 $62.01 $66.12 11.94% $48.17 $52.14 $56.11 $60.08 $64.05 12.94% $46.74 $50.57 $54.40 $58.23 $62.06 13.94% $45.37 $49.06 $52.76 $56.46 $60.16 Financial Implications Enhance Value Proposition Expand Logistics Implementation Marketing Financials Enhance Financials (1) Existing SCM Operating Profit Transforming Existing Businesses Web Development per Transform Synergies from Marketing Synergies from Sales Hybrid Initiative Expansion into new business market Costs Number of Rollouts Project Manager Senior Developers 2x Marketing Director Web Development Marketing Budget Revenue Netherlands Total Subscribers Turkey Total Subscribers Finland Total Subscribers Russia Total Subscribers Switzerland Total Subscribers Greece Total Subscribers Poland Total Subscribers Ukraine Total Subscribers Netherlands Revenue Turkey Total Revenue Finland Total Revenue Russia Total Revenue Switzerland Revenue Greece Total Revenue Poland Total Revenue Ukraine Total Revenue Expansion Initiative FCFF From Project 2009E 2010E 2011E 2012E $202,732,240 $247,131,148 $284,200,820 $326,830,943 (300,000) 506,831 709,563 916,393 (900,000) 1,235,656 864,959 1,200,615 (600,000) 710,502 994,703 1,105,205 2 (169,614) (280,644) (110,000) (200,000) (200,000) 3 (254,421) (420,966) (165,000) (300,000) (300,000) 1 (84,807) (140,322) (55,000) (100,000) (100,000) 817,077 1,143,908 1,960,986 2 (169,614) (280,644) (110,000) (200,000) (200,000) 15,580,400 15,094,600 0 0 0 0 0 0 1,916,389 1,856,636 0 0 0 0 0 0 2,812,767 17,917,460 17,358,790 3,226,000 34,214,800 5,180,700 0 0 0 2,203,848 2,135,131 264,532 2,805,614 424,817 0 0 0 6,393,555 20,605,079 19,962,609 3,709,900 39,347,020 5,957,805 2,623,500 0 0 2,534,425 2,455,401 304,212 3,226,456 488,540 215,127 0 0 8,744,031 23,695,841 22,957,000 4,266,385 45,249,073 6,851,476 3,017,025 13,392,000 7,486,000 2,914,588 2,823,711 349,844 3,710,424 561,821 247,396 549,072 306,926 10,503,524 $3,729,160 $7,594,170 $9,849,236 $12,464,510 Conclusion Timeline Expand Financials Football Field Hybrid Initiative Initial Development Cost Synergies from Marketing Synergies from Sales Financial Implications Enhance Value Proposition Expand Logistics Implementation Marketing Financials Enhance Financials (1) Existing SCM Operating Profit Transforming Existing Businesses Web Development per Transform Synergies from Marketing Synergies from Sales Hybrid Initiative Expansion into new business market Costs Number of Rollouts Project Manager Senior Developers 2x Marketing Director Web Development Marketing Budget Revenue Netherlands Total Subscribers Turkey Total Subscribers Finland Total Subscribers Russia Total Subscribers Switzerland Total Subscribers Greece Total Subscribers Poland Total Subscribers Ukraine Total Subscribers Netherlands Revenue Turkey Total Revenue Finland Total Revenue Russia Total Revenue Switzerland Revenue Greece Total Revenue Poland Total Revenue Ukraine Total Revenue Expansion Initiative FCFF From Project 2009E 2010E 2011E 2012E $202,732,240 $247,131,148 $284,200,820 $326,830,943 (300,000) 506,831 709,563 916,393 (900,000) 1,235,656 864,959 1,200,615 (600,000) 710,502 994,703 1,105,205 2 (169,614) (280,644) (110,000) (200,000) (200,000) 3 (254,421) (420,966) (165,000) (300,000) (300,000) 1 (84,807) (140,322) (55,000) (100,000) (100,000) 817,077 1,143,908 1,960,986 2 (169,614) (280,644) (110,000) (200,000) (200,000) 15,580,400 15,094,600 0 0 0 0 0 0 1,916,389 1,856,636 0 0 0 0 0 0 2,812,767 17,917,460 17,358,790 3,226,000 34,214,800 5,180,700 0 0 0 2,203,848 2,135,131 264,532 2,805,614 424,817 0 0 0 6,393,555 20,605,079 19,962,609 3,709,900 39,347,020 5,957,805 2,623,500 0 0 2,534,425 2,455,401 304,212 3,226,456 488,540 215,127 0 0 8,744,031 23,695,841 22,957,000 4,266,385 45,249,073 6,851,476 3,017,025 13,392,000 7,486,000 2,914,588 2,823,711 349,844 3,710,424 561,821 247,396 549,072 306,926 10,503,524 $3,729,160 $7,594,170 $9,849,236 $12,464,510 Conclusion Timeline Expand Financials Football Field New Market Expansion Chosen upon 50 different criteria Team Cost: 1 IT Manager 2 Senior Developer 1 Marketing Director Marketing Budget Web Development Cost % of Market Captured Financial Implications Value Proposition Enhance Expand Logistics Implementation Marketing Financials Enhance Financials $95.00 Conclusion Timeline Expand Financials $92.87 $85.00 $78.96 $75.00 $65.00 $60.16 $55.00 $46.87 $51.22 $45.00 $35.00 $39.59 Conservative Case Base Case Aggressive Case Football Field Financial Implications Value Proposition Enhance Expand Logistics Implementation Marketing Financials Enhance Financials $95.00 Conclusion Timeline Expand Financials Football Field $92.87 Average $86.57 $85.00 $78.96 $75.00 $65.00 $60.16 $56.11 $55.00 $46.87 $45.00 $35.00 Average Average $51.22 $43.57 $39.59 Conservative Case WACC: 11.94% Terminal Exit Multiple: 4.0x Revenue/user: $0.35 Aggressive Capture: 25% Conservative Capture: 20% Conservative Capture: 15% Avg. Synergies Realized: 0.44% Internet Market Growth: 10% Base Case WACC: 11.94% Terminal Exit Multiple: 4.0x Revenue/user: $0.41 Aggressive Capture: 30% Conservative Capture: 20% Conservative Capture: 10% Avg. Synergies Realized: 0.49% Internet Market Growth: 15% Aggressive Case WACC: 11.94% Terminal Exit Multiple: 4.0x Revenue/user: $0.50 Aggressive Capture: 35% Conservative Capture: 25% Conservative Capture: 20% Avg. Synergies Realized: 0.53% Internet Market Growth: 20% Financial Implications Value Proposition Enhance Expand Logistics Implementation Marketing Financials Enhance Financials Conclusion Timeline Expand Financials $95.00 Football Field $92.87 Average $86.57 $85.00 $75.00 $65.00 $55.00 Four Year Implementation Yields a Net Present Value $56.11of $60.16 $46.87 $45.00 $35.00 Average $78.96 Average $51.22 $43.57 $39.59 $56.11 M or 410 M NOK Conservative Case WACC: 11.94% Terminal Exit Multiple: 4.0x Revenue/user: $0.35 Aggressive Capture: 25% Conservative Capture: 20% Conservative Capture: 15% Avg. Synergies Realized: 0.44% Internet Market Growth: 10% Base Case WACC: 11.94% Terminal Exit Multiple: 4.0x Revenue/user: $0.41 Aggressive Capture: 30% Conservative Capture: 20% Conservative Capture: 10% Avg. Synergies Realized: 0.49% Internet Market Growth: 15% Aggressive Case WACC: 11.94% Terminal Exit Multiple: 4.0x Revenue/user: $0.50 Aggressive Capture: 35% Conservative Capture: 25% Conservative Capture: 20% Avg. Synergies Realized: 0.53% Internet Market Growth: 20% Implementation Timeline Value Proposition Enhance Expand Logistics Implementation Marketing Financials Wave 1 Expand Wave 1 Contract,Expand Develop, Install 2009 P1 Expansion P2 Expansion 1. Introduce blocket variations in 3 phased process 2. Newspaper Marketing Partnership Implementation P3 Expansion Marketing 2010 Conclusion Timeline Wave 2 Enhance 2011 2012 Wave 3 Evaluate 2013 Implementation Timeline Value Proposition Enhance Expand Logistics Implementation Marketing Financials Wave 1 Expand Wave 2 Contract,Enhance Develop, Install 2009 P1 Expansion P2 Expansion 1. Develop Hybrid Platform 2. Roll out in Primary Markets 3. Continue to Roll out in other markets P3 Expansion Marketing Develop Primary Roll-out Continued Roll Out 2010 Conclusion Timeline Wave 2 Enhance 2011 2012 Wave 3 Evaluate 2013 Implementation Timeline Value Proposition Enhance Expand Logistics Implementation Marketing Financials Wave 1 Expand Wave 3 Review Develop, and Monitor Contract, Install 2009 P1 Expansion P2 Expansion 1. Constantly Review and Evaluate Performance 2. Continue to realize scale and leverage best practice P3 Expansion Marketing Develop Primary Roll-out Continued Roll Out Evaluate Best Practice 2010 Conclusion Timeline Wave 2 Enhance 2011 2012 Wave 3 Evaluate 2013 Value Proposition Value Proposition Objective Critical Issues Objective Critical Issues Recommendation Benefits Enhance Expand Recommendation Implementation Conclusion Achieved Value Build an attractive future for Schibsted Classified Media Global Financial Crisis Need to be Market leader “Two E Strategy: Enhance” Fast-Moving Industry “Two E Strategy: Expand” NPV of NOK~$410mm or USD$58mm Break Even of Less Than A Year Enhance and Expand: A Recipe for Success Justin Saks Emma Browne Craig Schleicher Shreya Oswal Presentation Index 1. Value Proposition 2. Agenda 3. Market Growth Changes 4. SCM Current Presence 5. Decision Tree 6. Current Business Model 7. New Business Model 8. AOL Classifieds Study 9. Hybrid Model 10.Site Design Mock-Up 11.Revenue Sources 12. Roll Out Process 13.Risk Analysis 14. Factors Influencing Evaluation 15. Choosing Attractive Markets to Enter 16.Three Phases of Expansion Into New Markets 17.Implementing a Hybrid Model 18.Achieved Value from Hybrid Model 19.Logistics and HR Implementation 20.Marketing Implementation 21.Financial Implications 22.Implementation Timeline Appendix Index 1. 2. 3. 4. 5. 6. Growth Strategies 13. Newspaper Partnerships Exit Strategy Examples Value Proposition 14. Market Size & Growth For WACC Expansion Targets Base Case Detail 15. Competition in Netherlands & Base Case Assumption and Turkey Output 16. Finn vs. Hybrid 7. Aggressive Case Detail 17. Why not mobile (yet)? 8. Aggressive Case Assumption 18. Why not acquisitions? and Output 19. How our strategy addresses 9. Conservative Case Detail financial crisis 10. Conservative Case Assumption 20. Finn Jobs vs. Hybrid Jobs and Output 21. AOL Classifieds 11. Valuation Outputs 22. Breakdown of Target Market 12. Decision Tree 23. Potential Vertical Businesses 24. Markets to Keep Watching Growth Strategies Value Proposition Total Growth Enhance Expand Implementation Portfolio Momentum Growth achieved through general market growth Mergers & Acquisitions Net revenue growth from acquisitions or divestitures Share Gain Revenue growth from gaining market shares Conclusion Covered by “Expand” Strategy Covered by “Enhance” Strategy Exit Strategy Value Proposition Enhance Expand Implementation Conclusion Problem with Market Sell off sites Problem with Hybrid Platform Convert to separate sites Value Proposition Value Proposition Objective Critical Issues Recommendation Benefits Enhance Expand Implementation Conclusion Build an attractive future for Schibsted Classified Media Global Financial Crisis Need to be #1 Fast-Moving Industry Hybrid Platform Phased Global Rollout Leadership Position Across Markets Sustainable Competitive Position WACC Value Proposition Enhance Expand Implementation Norway Risk Free Rate Market Risk Premium Weighting Beta (1) Spain France 4.500% 7.100% 3.700% 8.800% 4.700% 6.400% 4.100% 7.000% 36.000% 44.000% 15.000% 5.000% 1.500 S&P 5 Year Return (2) Market risk premium CAPM (Current Beta) 12.0% 7.50% 15.750% Cost of Debt (3) Debt/Equity E/V D/V Tax Rate 10.000% 0.535 0.612 0.328 30% WACC Sweden Conclusion 11.94% Source 1: Nataxis Research Report 2: Standard and Poors 3: Based off of cost of current 6.1% credit facility + 4% premium for current market conditions Base Case Detail Enhance Value Proposition Existing SCM Operating Profit (1) Transforming Existing Businesses Web Development per Transform Synergies from Marketing Synergies from Sales Hybrid Initiative Expansion into new business market Costs Number of Rollouts Project Manager Senior Developers 2x Marketing Director Web Development Marketing Budget Revenue Netherlands Total Subscribers Turkey Total Subscribers Finland Total Subscribers Russia Total Subscribers Switzerland Total Subscribers Greece Total Subscribers Poland Total Subscribers Ukraine Total Subscribers Netherlands Revenue Turkey Total Revenue Finland Total Revenue Russia Total Revenue Switzerland Revenue Greece Total Revenue Poland Total Revenue Ukraine Total Revenue Expansion Initiative FCFF From Project Expand Implementation 2009E 2010E 2011E 2012E $202,732,240 $247,131,148 $284,200,820 $326,830,943 (300,000) 506,831 709,563 916,393 (900,000) 1,235,656 864,959 1,200,615 (600,000) 710,502 994,703 1,105,205 2 (169,614) (280,644) (110,000) (200,000) (200,000) 3 (254,421) (420,966) (165,000) (300,000) (300,000) 1 (84,807) (140,322) (55,000) (100,000) (100,000) 817,077 1,143,908 1,960,986 2 (169,614) (280,644) (110,000) (200,000) (200,000) 15,580,400 15,094,600 0 0 0 0 0 0 1,916,389 1,856,636 0 0 0 0 0 0 2,812,767 17,917,460 17,358,790 3,226,000 34,214,800 5,180,700 0 0 0 2,203,848 2,135,131 264,532 2,805,614 424,817 0 0 0 6,393,555 20,605,079 19,962,609 3,709,900 39,347,020 5,957,805 2,623,500 0 0 2,534,425 2,455,401 304,212 3,226,456 488,540 215,127 0 0 8,744,031 23,695,841 22,957,000 4,266,385 45,249,073 6,851,476 3,017,025 13,392,000 7,486,000 2,914,588 2,823,711 349,844 3,710,424 561,821 247,396 549,072 306,926 10,503,524 $3,729,160 $7,594,170 $9,849,236 $12,464,510 Conclusion Base Case Assumption and Output Enhance Value Proposition Expand Implementation Conclusion Key Assumptions - Base Case $300,000 1.0 3.0 2.0 0.25% 0.50% 0.25% 0.35% 0.35% 0.35% $100,000 ($84,807) ($70,161) ($55,000) ($100,000) 15.0% 30.0% 20.0% 10.0% $0.41 Project Valuation - Base WACC EBITDA Exit Transforming Web Dev. I1, P1 Transformations I1, P2 Transformations I1, P3 Transformations I1, P1 Marketing Synergies I1, P2 Marketing Synergies I1, P3 Marketing Synergies I1, P1 Sales Synergies I1, P2 Sales Synergies I1, P3 Sales Synergies Development Roll out Project Manger Cost per Sr. Developer Marketing Director Marketing Budget Internet Mkt. Growth Aggressive Market Capture Safe Market Capture Conservative Market Capture Revenue Per User WACC 3.0x 3.5x 4.0x 4.5x 5.0x 9.94% $51.22 $55.48 $59.75 $64.02 $68.28 10.94% $49.66 $53.78 $57.89 $62.01 $66.12 11.94% $48.17 $52.14 $56.11 $60.08 $64.05 12.94% $46.74 $50.57 $54.40 $58.23 $62.06 13.94% $45.37 $49.06 $52.76 $56.46 $60.16 Aggressive Case Detail Value Proposition Enhance Existing SCM Operating Profit (1) Transforming Existing Businesses Web Development per Transform Synergies from Marketing Synergies from Sales Hybrid Initiative Expansion into new business market Costs Number of Rollouts Project Manager Senior Developers 2x Marketing Director Web Development Marketing Budget Revenue Netherlands Total Subscribers Turkey Total Subscribers Finland Total Subscribers Russia Total Subscribers Switzerland Total Subscribers Greece Total Subscribers Poland Total Subscribers Ukraine Total Subscribers Netherlands Revenue Turkey Total Revenue Finland Total Revenue Russia Total Revenue Switzerland Revenue Greece Total Revenue Poland Total Revenue Ukraine Total Revenue Expansion Initiative FCFF From Project Expand Implementation 2009E 2010E 2011E 2012E $202,732,240 $247,131,148 $284,200,820 $326,830,943 (300,000) 709,563 912,295 1,321,858 (900,000) 1,482,787 1,112,090 1,694,877 (600,000) 994,703 1,278,904 1,673,607 2 (169,614) (280,644) (110,000) (200,000) (200,000) 3 (254,421) (420,966) (165,000) (300,000) (300,000) 1 (84,807) (140,322) (55,000) (100,000) (100,000) 1,143,908 1,470,739 2,614,648 2 (169,614) (280,644) (110,000) (200,000) (200,000) 15,580,400 15,094,600 0 0 0 0 0 0 2,726,570 2,641,555 0 0 0 0 0 0 4,407,867 17,917,460 17,358,790 3,226,000 34,214,800 5,180,700 0 0 0 3,135,556 3,037,788 403,250 4,276,850 647,588 0 0 0 10,060,644 20,605,079 19,962,609 3,709,900 39,347,020 5,957,805 2,623,500 0 0 3,605,889 3,493,456 463,738 4,918,378 744,726 327,938 0 0 13,073,994 23,695,841 22,957,000 4,266,385 45,249,073 6,851,476 3,017,025 13,392,000 7,486,000 4,146,772 4,017,475 533,298 5,656,134 856,434 377,128 1,339,200 748,600 16,714,784 $5,729,725 $11,755,521 $14,747,601 $19,329,431 Conclusion Aggressive Case Assumption and Output Enhance Value Proposition Expand Implementation Conclusion Key Assumptions - Base Case $300,000 1.0 3.0 2.0 0.35% 0.60% 0.35% 0.45% 0.45% 0.45% $100,000 ($84,807) ($70,161) ($55,000) ($100,000) 20.0% 35.0% 25.0% 20.0% $0.50 Project Valuation - Aggressive WACC EBITDA Exit Transforming Web Dev. I1, P1 Transformations I1, P2 Transformations I1, P3 Transformations I1, P1 Marketing Synergies I1, P2 Marketing Synergies I1, P3 Marketing Synergies I1, P1 Sales Synergies I1, P2 Sales Synergies I1, P3 Sales Synergies Development Roll out Project Manger Cost per Sr. Developer Marketing Director Marketing Budget Internet Mkt. Growth Aggressive Market Capture Safe Market Capture Conservative Market Capture Revenue Per User WACC 3.0x 3.5x 4.0x 4.5x 5.0x 9.94% 10.94% $78.96 $76.56 $85.58 $82.94 $92.20 $89.32 $98.81 $95.71 $105.43 $102.09 11.94% $74.26 $80.42 $86.57 $92.73 $98.88 12.94% $72.05 $77.99 $83.93 $89.87 $95.81 13.94% $69.93 $75.67 $81.40 $87.14 $92.87 Conservative Case Detail Value Proposition Enhance Expand (1) Existing SCM Operating Profit Transforming Existing Businesses Web Development per Transform Synergies from Marketing Synergies from Sales Hybrid Initiative Expansion into new business market Costs Number of Rollouts Project Manager Senior Developers 2x Marketing Director Web Development Marketing Budget Revenue Netherlands Total Subscribers Turkey Total Subscribers Finland Total Subscribers Russia Total Subscribers Switzerland Total Subscribers Greece Total Subscribers Poland Total Subscribers Ukraine Total Subscribers Netherlands Revenue Turkey Total Revenue Finland Total Revenue Russia Total Revenue Switzerland Revenue Greece Total Revenue Poland Total Revenue Ukraine Total Revenue Expansion Initiative FCFF From Project Implementation 2009E 2010E 2011E 2012E $202,732,240 $247,131,148 $284,200,820 $326,830,943 (300,000) 405,464 506,831 612,295 (900,000) 988,525 617,828 706,352 (600,000) 710,502 710,502 821,004 2 (169,614) (280,644) (110,000) (200,000) (200,000) 3 (254,421) (420,966) (165,000) (300,000) (300,000) 1 (84,807) (140,322) (55,000) (100,000) (100,000) 817,077 817,077 1,634,155 2 (169,614) (280,644) (110,000) (200,000) (200,000) 15,580,400 15,094,600 0 0 0 0 0 0 1,363,285 1,320,778 0 0 0 0 0 0 1,723,805 17,917,460 17,358,790 3,226,000 34,214,800 5,180,700 0 0 0 1,567,778 1,518,894 225,820 2,395,036 362,649 0 0 0 4,629,790 20,605,079 19,962,609 3,709,900 39,347,020 5,957,805 2,623,500 0 0 1,802,944 1,746,728 259,693 2,754,291 417,046 183,645 0 0 6,684,219 23,695,841 22,957,000 4,266,385 45,249,073 6,851,476 3,017,025 13,392,000 7,486,000 2,073,386 2,008,737 298,647 3,167,435 479,603 211,192 703,080 393,015 8,374,838 $2,336,100 $5,336,142 $7,505,224 $10,008,992 Conclusion Conservative Case Assumption and Output Enhance Value Proposition Expand Implementation Key Assumptions - Base Case $300,000 1.0 3.0 2.0 0.20% 0.40% 0.25% 0.25% 0.25% 0.25% $100,000 ($84,807) ($70,161) ($55,000) ($100,000) 10.0% 25.0% 20.0% 15.0% $0.35 WACC Project Valuation - Conservative WACC EBITDA Exit Transforming Web Dev. I1, P1 Transformations I1, P2 Transformations I1, P3 Transformations I1, P1 Marketing Synergies I1, P2 Marketing Synergies I1, P3 Marketing Synergies I1, P1 Sales Synergies I1, P2 Sales Synergies I1, P3 Sales Synergies Development Roll out Project Manger Cost per Sr. Developer Marketing Director Marketing Budget Internet Mkt. Growth Aggressive Market Capture Safe Market Capture Conservative Market Capture Revenue Per User Conclusion 3.0x 3.5x 4.0x 4.5x 5.0x 9.94% $39.59 $43.02 $46.45 $49.87 $53.30 10.94% $38.37 $41.67 $44.98 $48.28 $51.59 11.94% $37.20 $40.38 $43.57 $46.76 $49.95 12.94% $36.07 $39.15 $42.22 $45.30 $48.38 13.94% $34.99 $37.96 $40.93 $43.90 $46.87 Valuation Outputs Value Proposition Enhance Expand Implementation Conclusion 11.94% $74.26 $80.42 $86.57 $92.73 $98.88 12.94% $72.05 $77.99 $83.93 $89.87 $95.81 13.94% $69.93 $75.67 $81.40 $87.14 $92.87 Project Valuation - Base WACC 3.0x 3.5x 4.0x 4.5x 5.0x 9.94% $51.22 $55.48 $59.75 $64.02 $68.28 10.94% $49.66 $53.78 $57.89 $62.01 $66.12 11.94% $48.17 $52.14 $56.11 $60.08 $64.05 12.94% $46.74 $50.57 $54.40 $58.23 $62.06 13.94% $45.37 $49.06 $52.76 $56.46 $60.16 Project Valuation - Conservative WACC EBITDA Exit 3.0x 3.5x 4.0x 4.5x 5.0x 9.94% 10.94% $78.96 $76.56 $85.58 $82.94 $92.20 $89.32 $98.81 $95.71 $105.43 $102.09 EBITDA Exit EBITDA Exit Project Valuation - Aggressive WACC 3.0x 3.5x 4.0x 4.5x 5.0x 9.94% $39.59 $43.02 $46.45 $49.87 $53.30 10.94% $38.37 $41.67 $44.98 $48.28 $51.59 11.94% $37.20 $40.38 $43.57 $46.76 $49.95 12.94% $36.07 $39.15 $42.22 $45.30 $48.38 13.94% $34.99 $37.96 $40.93 $43.90 $46.87 Decision Tree Value Proposition Enhance M&A How To Maximize Attractiveness Expand Implementation Conclusion Merger or Joint Venture Able to succeed alone; difficult to coordinate; limits upside Acquisition Expensive; no brand coordination; risky; not SCW’s talent Initiatives contribute Does to dual Increase not reach new customers; growth strategy : limits brand synergies Brand Depth Organic Growth Roll Outs Increase Initiative 1: Implement Hybrid Share Gain Brand Breadth Strategy in Current Leadership And Markets Blocket Model Portfolio Momentum Initiative 2: Expand revenues by immediately rolling out easier Infojobs models internationally Model Finn Model Very expensive and slow to implement; risky Newspaper Partnerships Examples Value Proposition Enhance Sun-Times / Monster •Announced Jan. 5, 2009 •Includes 70 newspapers in Midwestern United States •Co-branded website providing job classifieds on Monster platform Expand Implementation Conclusion Yahoo! HotJobs •264 newspapers have linked jobswanted sites to HotJobs •Provides greater traffic to both parties •Revenue split between HotJobs and Yahoo! Market Size & Growth For Expansion Targets Value Proposition Enhance Expand Implementation Conclusion Country Market Size Percentage Growth (2008) Why Enter? Netherlands $ 1.7 billion 43% Finland $ 0.529 billion 20% Switzerland $ 1.6 billion 12% Russia $ 54.4 billion 31% Turkey $ 1.3 billion 22% Greece $ 0.343 billion 19% Ukraine $ 1.7 billion 29% High Growth Markets Not Overly Mature markets Gaining a strong position in these countries reinforces dominant position in Europe Poland $3.7 billion 22% Competition in Netherlands & Turkey Value Proposition Enhance Expand 3 main competitors • Kugli.com • Hurriyet.com • Craigslist.com Either don’t know the target market very well or don’t have the scale and experience of a larger company • We can provide an enhanced user experience These are countries where we have a strong chance of being a market leader Implementation Conclusion Finn vs. Hybrid Value Proposition The Hybrid Model In Theory Enhance Expand AOL Case Study Details Implementation Conclusion Theoretical Roll Out Finn vs. Hybrid Biler Hus Jobb Finn vs. Hybrid Value Proposition The Hybrid Model In Theory Enhance Expand AOL Case Study Details Implementation Conclusion Theoretical Roll Out Finn vs. Hybrid Biler Hus Jobb Forums Videos Expert Advice News Forums Videos Expert Advice News Forums Videos Expert Advice News Why not mobile (yet)? Value Proposition Enhance Expand Implementation Lack of consumer demand Heavy reliance on SMS for mobile apps Low iPhone penetration in Europe (8%) Already leader in mobile news, so can afford to wait and see Conclusion Why not acquisitions? Value Proposition Enhance Expand Implementation Corporate strength in training and development Economic environment not conducive No need to pay premium when we can grow organically Potential for integration issues Conclusion How our strategy addresses financial crisis Value Proposition Enhance Expand Phased Expenditures Consolidation of Strong Positions Emphasis on Loyal Customers Protection Against Downturn Implementation Conclusion Finn Jobs vs. Hybrid Jobs Value Proposition Enhance Expand Implementation Conclusion Finn Jobs Hybrid Jobs Job Listings Job Listings CV Prep Advice Forums Financial News Templates Interview Training Newsletters Downloadable Models AOL Classifieds Value Proposition Enhance Expand Implementation Conclusion Breakdown of Target Market Value Proposition Enhance Expand Implementation Conclusion Generalist Automotive Real Estate Jobs Age 18-80 16-60 21-50 18-60 Gender Male & Female Male & Female Male & Female Male & Female Income Low to Middle Income Middle to High Income Middle to High Income All Incomes Psychographic Internet savvy, adventurous consumer Budget conscious yet adventurous consumer Careful buyer who does extensive research Educated, ambitious consumer Potential Vertical Businesses Value Proposition Enhance Expand Dating & Personals Implementation Services Travel Way to expand consumer base & market share in the future Conclusion Markets to Keep Watching Value Proposition Enhance Expand Implementation Conclusion Enter These Markets If… These Factors Increase Bulgaria Czech Republic Hungary Romania Slovakia Internet usage Computer usage Online spending Consumer disposable income Enhance and Expand: A Recipe for Success Justin Saks Emma Browne Craig Schleicher Shreya Oswal
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