Baltic Classifieds Group PLC
Annual Report and Accounts 2024
STRATEGIC REPORT
2
Strategic Highlights
4
Chair's Statement
6
CEO's Statement
7
Market Overview
10
Our Business at a Glance
•
Our business model
•
Our market position
•
Our purpose and culture
•
Our strategy
•
Why invest in us
13
Moving our Strategy Forward
16
Financial Review
20
Operational Review
21
Section 172(1) Statement
22
Sustainability Report
•
The Task Force for Climate-Related
Financial Disclosure (“TCFD”) Report
•
Non-financial and Sustainability
Information Statement
38
Risk Management
•
Principal risks and uncertainties
40
Viability Statement
GOVERNANCE REPORT
41
Corporate Governance Report
•
Letter from the Chair of the Board
Trevor Mather
•
Board of Directors
•
Senior Management
•
Corporate Governance Statement 2024
•
Board Leadership and Company
Purpose
•
Division of Responsibilities
•
Board Composition, Succession and
Evaluation
53
Nomination Committee Report
56
Audit Committee Report
60
Directors' Remuneration Report
66
Directors' Report
FINANCIAL STATEMENTS
71
Independent Auditor's Report to the
Members of Baltic Classifieds Group PLC
77
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
78
Consolidated Statement of Financial
Position
79
Consolidated Statement of Changes in
Equity
80
Consolidated Statement of Cash Flows
81
Notes to the Consolidated Financial
Statements
•
Going concern
106
Company Statement of Financial Position
107
Company Statement of Changes in Equity
108
Notes to the Company Financial Statements
ADDITIONAL INFORMATION
113
Glossary
113
Shareholder Information
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transactions!
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Look out for our key icons throughout this report:
Investors
New
Consumers and Advertiser
1
st
in the EU
Our People
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Strategic aim
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Environment and Community
1
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in the EU
new
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
2
3
STRATEGIC REPORT
Operational highlights
Leadership position
2
was maintained
(in times vs. closest competitor)
1
Alternative performance measure (see Note 4 to the consolidated financial statements on pages 89 to 90).
1
Note: there were changes in the cookie consent policy (general obligation to consent with all cookies that are not strictly necessary for website operation) and internet browsers
policy of more strict control of 3rd party cookies on websites. Both mentioned reasons result in loss of data collected by web analytics services like Google Analytics.
2
Leadership position is based on time on site except for Auto24. Auto24 has no significant vertical competitor, the next relevant player is Generalist portal, therefore, the relative
market share for this Generalist portal is calculated by multiplying time on site by the percentage of active automotive listings out of total listings at the end of the reported period.
3
In Jobs & Services business line B2C revenue comes from Jobs only.
4
Car listings only (excluding listings of vehicle parts, vehicles other than cars and other categories).
5
In Jobs & Services business line C2C revenue principally comes from Services portals, therefore only Services platforms’ information is presented.
6
Skelbiu.lt only, which is our main Generalist portal.
7
Over 95% of respondents answered YES to both questions: “Do you feel proud to be part of the BCG team?” and
“Would you recommend your friends to work here?” in our annual
employee engagement survey.
Autoplius
2024
2023
2022
2021
Auto24
Aruodas
KV plus City24
in Estonia
CVbankas
Skelbiu
17
19
7
23
7
36
Financial highlights
Revenue
+
19
%
2024: €72.1 million
2023: €60.8 million
2022: €51.0 million
Each Baltic resident visits BCG portals
10 times per month
56.0
m
Operating profit
+
32
%
2024: €38.3 million
2023: €29.1 million
2022: €13.6 million
Adjusted
operating profit
1
+
21
%
2023: €54.5 million
2023: €45.3 million
2022: €38.5 million
EBITDA
1
+
20
%
2023: €55.3 million
2023: €46.0 million
2022: Adjusted EBITDA
1
€39.3 million
EBITDA margin
1
expanded to
77
%
2024: 77%
2023: 76%
2022: Adjusted EBITDA margin
1
77%
+
40
%
Basic EPS
2024: 6.5 € cents
2023: 4.7 € cents
2022: 0.2 € cents
+
20
%
Adjusted basic EPS
1
2024: 9.2 € cents
2023: 7.7 € cents
2022: 6.4 € cents
Cash generated from
operating activities
+
23
%
2024: €59.0 million
2023: €48.0 million
2022: €34.1 million
Cash conversion
1
maintained at
99
%
2024: 99%
2023: 99%
2022: 99%
Leverage
1
decreased to
0.5
x
2024: 0.5x
2023: 1.0x
2022: 1.7x
Monthly
traffic
1
2024: 56.0 million
2023: 61.9 million
2022: 65.1 million
Cultural highlights
The total amount of CO
2
emissions includes
Scope 1 and Scope 2 (market-based), tonnes
of carbon dioxide equivalent. Change in
emissions calculated from a 2022 base year
Total CO
2
emissions
70
%
decrease by
2023: 100
2024: 54
2022: 183
Strategic Highlights
The Group’s objective is to provide trusted marketplaces to
connect sellers and buyers across the Baltic region through
user-friendly and feature-rich portals, resulting in a smooth
transaction experience for all involved parties.
We believe the Group accomplishes this goal through
its portfolio of leading brands, individually strong market
positions, and scalable business model.
Our objective is to sustain profitable
growth by implementing gradual price
adjustments
for
our
core
classifieds
portals, bolstered by compelling value
propositions and the introduction of new
products and features. Additionally, we
plan
to
continue
expanding
ancillary
services
and
selectively
acquire
complementary businesses within our
current markets and potentially in new
territories.
Note: we are presenting our financial year results, therefore “2024" means 12 months ended 30 April 2024, "2023" means 12 months ended 30 April 2023
and "2022" means 12 months ended 30 April 2022.
B2C monthly number
of users grew across all
business lines
Auto +4%
(to 3,732 from 3,586 in 2023)
Real Estate +1%
(to 4,926 from 4,877 in 2023)
Jobs
3
+5%
(to 2,271 from 2,162 in 2023)
B2C average monthly revenue
per user (ARPU) grew across
all business lines
Auto +26%
(to €289 from €230 in 2023)
Real Estate +22%
(to €181 from €148 in 2023)
Jobs
3
+7%
(to €412 from €384 in 2023)
C2C monthly number
of active ads (listings in
Generalist) grew significantly
Auto
4
+26%
(to 33,695 from 26,824 in 2023)
Real Estate +20%
(to 20,016 from 16,628 in 2023)
Services
5
+32%
(to 8,560 from 6,461 in 2023)
Generalist
6
+5%
(to 99,271 from 94,388 in 2023)
C2C monthly revenue per
active ad (per listing on
Generalist)
Auto
4
+0%
(€20 in both 2024 and 2023)
an arithmetic result of significant
growth in active ads
Real Estate +0%
(€23 in both 2024 and 2023)
an arithmetic result of significant
growth in active ads
Services
5
+11%
(to €24 from €22 in 2023)
Generalist
6
+3%
(to €7 from €6 in 2023)
95
%
more
than
Employee
engagement
Gender
diversity
of employees who are proud
to be part of the BCG team
stays above 95%
7
(2024: > 95%, 2023: > 95%)
Our team continues to be
balanced
(female : male headcount,
as at 30 April each year)
(2023: 51:49, 2022: 51:49)
50
:
50
Strategic Highlights
continued
Chair’s Statement
Our relentless focus on the core business of each of our 14
portals across the Baltic regions continues to reap rewards.
Trevor Mather,
Chair
“
Employees
Our people are critical to our success
and it’s reassuring to see the results of
our engagement survey reflect back to
us that our employees love working with
us too! This is particularly apparent in the
average employee tenure of 8 years, which
in a business with such a high percentage
of technologists is nothing short of
remarkable.
The Group is led by a deeply knowledgeable
management team, both at the Group level
and the individual Portal level, who are
passionate,
dedicated
and
committed
to building a long-lasting culture of rapid
decision making, lean operations, trust
and fun. We recognise that culture is a
huge part of our success story.
We are proud of our employees and know
the strength they bring to our organisation.
For more on our Purpose and Culture
see page 10 and our People see pages
30 to 34.
Environment, Social and
Governance
There are some important differences that
come with a business listed in the UK with
operations purely in the Baltics region,
so we do sometimes have to look at
matters such as diversity or remuneration
through a different lens. However, we
are committed to being a responsible
business. Our priority is to protect and
support our people, customers and all of
our stakeholders and the environment
around us.
We have reduced our absolute Scope
1 and 2 emissions by 70% from a 2022
base year and achieved our goal of having
at least 80% of used electricity derived
from renewable energy sources by 2025
by increasing the portion of electricity
derived from renewable sources from 63%
in 2022 to 88%. We are working toward our
net zero target and as part of our net zero
journey we reported our Scope 3 carbon
emissions for the first time.
We
ranked
within
the
top
10
best
performers
within
FTSE
250
in
the
FTSE Women leaders review 2023 and
maintained our average employee tenure
at 8 years.
I am proud to sponsor the Group’s ESG
working group and am actively involved
with ESG activities.
For more on our ESG see pages 22 to
37.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
5
STRATEGIC REPORT
The operating leverage of the business began to flow through now that the ongoing costs
of being a public company are fully baked into the financial performance.
Trevor Mather,
Chair
“
Chair's Statement
continued
Returns to Shareholders and
dividends
The Board is confident in our ability to
continue our capital policy of returning
all of our surplus cash to shareholders,
through
a
combination
of
paying
dividends and share buybacks. The total
amount of cash returned to shareholders
since IPO through dividends and the share
buyback programme is c. €49 million and
the leverage has reduced from 2.75x at
IPO in July 2021 to 0.50x at the end of this
reporting period.
We initiated a share buyback program
during the prior year with the purpose of
returning cash to shareholders. We are
still actively engaged in this programme.
We are recommending a final dividend
of 2.1 € cents per share for 2024. The
final dividend will be paid, subject to
shareholder approval, on 18 October 2024.
For more details on our capital policy
see the Financial review on page 19.
Looking ahead
I continue to be excited about the future
for BCG and the growth potential and
opportunities to create value not only
for our shareholders but for all of our
stakeholders.
Our strategy remains consistent, relevant
and achievable and I look forward to
reporting more demonstrable progress
against that strategy in the year ahead.
I have personally enjoyed reaching out and
meeting with some of our investor base in
person and I hope to be able to build upon
that in the coming year.
On behalf of the Board, I want to thank
all of our employees for their remarkable
contribution and dedication this year, and
for serving all of our stakeholders so well.
Trevor Mather
Chair
2 July 2024
Overview
The
last
twelve
months
have
been
ones of considerable success for Baltic
Classifieds Group. Our relentless focus on
the core business of each of our 14 portals
across the Baltic regions continues to
reap rewards as does both the quantum
and consistency of our overall revenue
and profit growth in the three years since
becoming a public company.
We continue to have the most visited
portals in Lithuania and Estonia, as well
as maintaining our significant leadership
position over the nearest competitor for
all our largest sites compared to 2023,
despite only a modest investment in
marketing.
Our three verticals (Autos, Real Estate
and Jobs & Services) continue to lead the
high growth revenue charge across the
business, and our fourth business unit
(Generalist) continues to both provide
solid growth and an extended competitive
moat around all of our businesses allowing
most of our advertisers to dual list on the
two best known portals for their particular
category.
Particularly pleasing this year was to see
the operating leverage of the business
beginning to flow through now that
the ongoing costs of being a public
company are fully baked into the financial
performance.
The resilience of the growth despite a
changed market backdrop in the Baltic
regions (with a mild decline in GDP and
lower inflation than recent years) means
we will continue with our current strategy
for the foreseeable future – focusing on
the core of our business, consistently
improving
the
consumer
experience
and constantly evolving the pricing and
packaging of our products.
For more on our Strategy and Business
Model see page 10.
Board
We are fortunate that our Board and its
committees enjoy great stability and
consistency which is the cornerstone to
our effectiveness as a Board.
For more on our Board see pages 42
to 43; Board effectiveness see page 55
and our approach to Diversity see page
54.
As a Board, we are acutely aware of
our obligations to ensure diversity and
inclusion and are actively seeking to
expand our Board in a very considered
fashion with culture, fit, diversity and
succession
planning
all
part
of
our
priorities.
We have been scanning the
market for potential diverse candidates
to expand the Board, with a particular
focus on candidates who have a high
appreciation of the business environment
in the Baltics, Scandinavia and/or Eastern
Europe.
On 11 June 2024, Rūta Armonė joined the
Board as an Independent Non-Executive
Director and will join all of the Board
Committees. Rūta is based in Vilnius and
has worked at Ellex Valiūnas, one of the
most prestigious legal firms in the Baltic
region for 13 years. As an M&A partner at
Ellex Valiūnas, her breadth of skills and
experience will bolster the regulatory,
governance and M&A experience on the
Board.
As part of our succession planning, we will
continue to look out for other outstanding
candidates to further expand the Board in
the years to come to ensure we minimise
the chances of needing to replace large
segments of the Board at any one time in
the future.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
4
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
6
7
STRATEGIC REPORT
0%
5%
10%
15%
20%
3%
6%
9%
12%
15%
5%
6%
7%
8%
Source: Skandinaviska Enskilda Banken (SEB), May 2024
Consumer prices, YoY change
4
Wages, YoY change
4
Unemployment
4
Lithuania
Estonia
Latvia
Euro area
Lithuania
Estonia
Latvia
Euro area
Lithuania
Estonia
Latvia
Euro area
2022
2022
2022
2023
2023
2023
2024F
2024F
2024F
2025F
2025F
2025F
CEO’s Statement
2024
marked
another
year
of
solid
financial,
operational
and
strategic
execution for BCG, with strong momentum
observed across each of our business
segments. We are in the early stages of
our monetisation journey, which underpins
the resilience of our top line and EBITDA
growth, and, we are particularly pleased
that our operational leverage is once again
flowing through to our EBITDA margin now
that public listed company costs have
been normalised.
Our
platforms
have
established
themselves as a key destination for those
looking for transactions in automotive,
real estate, jobs, services and general
merchandise.
The
attractive
business
environment in which we operate - part of
the EU, the euro area and NATO enhances
our prospects for further success and
expansion. And the fact that we are based
in Lithuania, a country which, based on the
World Happiness Report, is renowned for
having the happiest young people in the
world reflects the joy we have in running
this company.
This year, I am pleased to report that the
strongest growth came from our core
classified revenue streams, B2C and C2C,
which together account for 90% of BCG's
revenue. Notably, B2C performance saw
the highest growth at 22% year-on-year,
driven by both an increase in customers
and ARPU growth across all our business
units. Additionally, we observed a steady
recovery
in
C2C
volumes
due
to
a
normalised selling time and exceptional
growth in Services. C2C growth was also
remarkable, achieving an 18% increase
year-on-year, propelled by a 23% rise in
Auto, a 21% increase in Real Estate, and
an impressive 45% growth in Services.
The remaining 10% of the Group's revenue
comprise ancillary and banner advertising
revenue, which combined grew by 6%.
Throughout the year, we successfully
implemented
pricing
and
packaging
changes across all our business units
in both B2C and C2C. The outstanding
results
we
achieved
this
year
have
provided strong momentum as we move
into the next financial year.
I am happy to report that the Estonian
Competition Authority (“ECA”) terminated
its investigations into our Real Estate and
Auto platforms. During the supervision
procedure, the ECA came to the conclusion
that KV.ee, City24.ee and Auto24.ee "have
not set unfairly high prices for the services
they offer".
Strong consumers numbers:
•
On average, a resident in the Baltics
visits one of our sites 10 times per
month.
•
Our site leadership positions
1
are as
strong as ever for all of our largest
websites: Autoplius at 7x (6x in 2023),
Auto24 at 36x (29x in 2023), Aruodas
at 17x (21x in 2023), , KV plus City24 in
Estonia at 19x (16x in 2023), CVBankas
at 7x (9x in 2023) and Skelbiu at 23x
(19x in 2023).
Growth in both B2C and C2C
number of customers:
•
The number of business customers
grew
across
all
business
areas:
automotive dealers +4%; real estate
brokers +1%; customers in Jobs +5%.
•
All business areas saw an increase
in active C2C ads: in Auto +26%; Real
Estate
+20%;
Services
+32%
and
Generalist listings grew +5%.
The combination of increased prices of
goods and services being advertised
on our sites, normalised speed of sale
and changes to our packages, has led to
increased yields across all business areas
and in both the B2C and C2C segments.
Market context:
•
Similar to trends in other countries,
inflation has rapidly declined in Baltic
economies,
reaching
more
normal
levels. Prices in the underlying markets
of real estate and automotive have risen
reflecting rising salaries.
•
The
number
of
used
car
market
transactions over the last 12 months
has grown by 6%. The average price per
used car increased by 5% year-on-year,
while the speed of sale has normalised.
This has led to a 28% increase in the
number of days a vehicle is advertised,
providing a tailwind for the stock of
vehicles on our sites.
•
The number of real estate transactions
declined 11% year-on-year, primarily due
to higher construction costs since 2023
(and consequent lower supply of new
build homes) and increase in the interest
rates. However, estate prices grew 6%
and most of our customers operate in
the secondary market, therefore the
commission pool remained healthy.
In the environment of a lengthening
selling time, BCG was able to double
The attractive business environment in which we operate
- part of the EU, the euro area and NATO enhances our
prospects for further success and expansion.
Justinas Šimkus,
CEO
“
1
Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal; therefore, relative market
share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period.
revenue from developers as a result of
improvements to our sites in terms of
the presentation of new homes and the
associated changes in our pricing.
•
The employment market has been
very active this year, with companies
continuing to face a significant labour
shortage. The number of employers
using Cvbankas.lt increased by 5%.
Average salary grew by over 12%,
prompting companies to increase their
investment in employee search and
selection.
•
More people are seeking to find service
providers
online,
leading
to
rapid
growth in our Services verticals. We
now have 32% more service provider
advertisements on our platforms, and
the yield has grown by 11%.
•
The continuous growth of eCommerce
activities
has
resulted
in
more
transactions moving online. This has
supported the growth of our Generalist
platforms and ancillary products such
as deliveries.
I would like to thank all of my colleagues
for their efforts over the last 12 months.
The
results
of
our
recent
employee
engagement survey reaffirm our belief that
the team's motivation is at an all-time high,
with over 95% of employees expressing
pride in being part of BCG and would
recommend it as a great place to work.
Furthermore, we expect our successes this
year to continue, with healthy growth in
B2C and C2C both in terms of volumes and
ARPU, as well as sustained strong growth
in Services. With an engaged and highly
experienced team, we remain focused
on consistently delivering outstanding
products and services to our customers.
Justinas Šimkus
Chief Executive Officer
28 June 2023
1
Source: Skandinaviska Enskilda Banken (SEB), May 2024.
2
Source: Wordometers, April 2024.
3
Source: Eurostat.
4
Actual figures in 2022-2023 and forecasted figures in 2024-2025.
Market Overview
Macroeconomic overview
The Group operates in the Baltic region,
generating 70% of its revenue for the
financial year from Lithuania, 28% from
Estonia and 2% from Latvia.
For context, the Baltic states, also known
as the “Baltics”, consist of Lithuania,
Estonia and Latvia.
Note: the macroeconomic data in the
Macroeconomic overview is presented
in calendar years, which differ from our
financial year that starts on 1 May and ends
on 30 April.
The Baltic States have been a part of NATO,
the European Union, the euro area and
OECD since:
2004: the Baltic states joined NATO
2004: the Baltic states joined the
European Union
2010: Estonia joined OECD
2011: Estonia joined the euro area
2014: Latvia joined the euro area
2015: Lithuania joined the euro area
2016: Latvia joined OECD
2018: Lithuania joined OECD
The Baltic region has a strong credit profile
with some of the lowest gross public debt
to gross domestic product (“GDP”) ratios in
Europe in 2023: 38.3% in Lithuania, 19.6%
in Estonia and 39.7% in Latvia. These are
significantly below the euro area average of
88.6%.
1
The Baltics have a total population of 5.8
million (Lithuania: 2.7 million, Estonia: 1.3
million and Latvia: 1.8 million)
2
and had a
nominal aggregate GDP of approximately
€150.0 billion in 2023 (Lithuania: €72.0
billion, Estonia: €37.7 billion and Latvia:
€40.3 billion.
3
4.6%
4.1%
Source: Eurostat (data for EU members), The Office for National Statistics (data for United Kingdom).
Real GDP per capita CAGR during calendar years 2000-2023
Lithuania
Latvia
Estonia
Poland
European Union
Germany
France
United Kingdom
Spain
Italy
3.1%
3.7%
1.1%
0.7%
0.9%
0.6%
0.7%
0.2%
The region’s economy has demonstrated
resilience and ability to grow significantly
over the period of last 23 years, with real
GDP per capita growing at a compound
annual growth rate (“CAGR”) of 4.6% in
Lithuania, 3.1% in Estonia and 4.1% in
Latvia from 2000 to 2023, compared to
1.1% in the European Union.
The
Baltic
economies
demonstrated
remarkable resilience to recent adverse
shocks, including the COVID-19 pandemic,
the Russian invasion of Ukraine, energy
and food price surge, high inflation and
high interest rates.
In 2023, the Baltic economies experienced
a mild decline in GDP: (0.3)% in Lithuania,
(3.0)% in Estonia and (0.3)% in Latvia.
1
However, a normalising inflation, a resilient
labour market, anticipated improvement
in foreign demand and declining interest
rates are forecasted to contribute to a
gradual recovery. On average, GDP growth
in the Baltics in 2024 and 2025 is expected
to surpass the euro area average of 0.6%
in 2024 and 1.7% in 2025. GDP growth is
forecasted to be 1.5% in 2024 and 2.8%
in 2025 for Lithuania, (0.5)% and 3.5% for
Estonia and 1.9% and 2.7% for Latvia.
1
The unemployment level in the Baltic
countries remains low and is forecasted
to stay near the euro area average in
the coming years. In 2023, the average
unemployment level was 6.8% in Lithuania,
6.4% in Estonia and 6.5% in Latvia.
As projected, inflation in the Baltics eased
in 2023 after a year of high double-digit
levels, dropping to 8.7% in Lithuania, 9.1%
in Estonia and 9.0% in Latvia. Inflation is
expected to decrease further in 2024 to
1.0% in Lithuania, 3.5% in Estonia and 1.5%
in Latvia.
The Baltic countries have a trend towards
higher wage inflation, which is also part of
increasing prosperity of the region. In 2023,
despite a slowdown in the economy, labour
markets showed resilience and wages
increased by 12.2% in Lithuania, 11.4% in
Estonia and 7.5% in Latvia.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
8
9
STRATEGIC REPORT
1
Number of transactions in Lithuania and Estonia, including vehicles that were registered in these countries for the first time.
2
The home ownership rate measures the share of the population who are owner-occupants with or without a mortgage. Source: Statista, 2022.
3
Source: Company information.
4
Source: Swedbank, March 2024.
5
Average apartment price per square metre in Vilnius, Tallinn and Riga during calendar years 2021, 2022 and 2023.
6
Total number of real estate transactions in Lithuania, Estonia and Latvia.
Average used vehicle price, €K
New vehicle transactions, K
Used vehicle transactions, K
Source: Company information (average used vehicle
price); Regitra, Autotyrimai and Maanteeamet (number of
transactions)
Average used vehicle price and total
transactions
1
2022
446
496
50
9.4
2023
437
487
50
11.2
2024
464
517
53
11.8
Baltic Classifieds Group operates Auto
portals in Lithuania and Estonia. Over
the past 12 months the used car markets
in
Lithuania
and
Estonia
have
been
influenced by rebounding supply, increased
car affordability due to rising consumer
incomes, and more favourable conditions
for sourcing used cars from abroad.
Additionally, the upcoming introduction of a
car tax in Estonia has led to increased local
market activity within the country.
During this financial year, the number of
new car transactions increased by 5% to
52 thousand per year, while the number
of used car transactions increased by 6%
to 464 thousand per year, combined in
both Lithuanian and Estonian markets.
The growth of the used car market was
driven by continued recovery in used car
imports in Lithuania, where they represent
a significant portion of dealer business,
and by more active local markets in both
countries.
The average price of a used car has
remained stable for the last three half-year
periods, but, on average, it is 5% higher
than the previous financial year, at €11.8
thousand. Consumer demand continues to
be strong and steady, supported by rising
household incomes, ensuring that there is
no affordability pressure on vehicle prices.
The increasing number of transactions,
combined with price growth and more
favourable acquisition costs in Western
European markets for used cars, has
contributed to the expansion of the dealer
margin pool.
The rebounding supply and inventory levels
on our marketplaces have resulted in a 28%
increase in the time it takes for dealers to
sell a used car compared to last year. While
this metric remained unchanged in Estonia,
it significantly increased in Lithuania,
where inventory and supply are recovering
from an all time low in 2022.
The Group operates an online jobs board
in Lithuania. Over the past 12 months
ending April 2024, employer activity has
shown much more stability, with job
posting
numbers
remaining
relatively
consistent with the previous year, in
contrast to the significant year-over-year
fluctuations
observed
earlier.
Despite
ongoing
geopolitical
tensions
and
economic headwinds, the number of job
advertisements listed on our jobs portal
remained significantly higher than pre-2022
levels. This indicates a continued strong
demand for workers in the Lithuanian job
market.
A tight labour market has supported
strong wage growth. Over the past 9 years,
the compound annual growth rate for
average gross wage was a notable 10%,
showcasing consistent and substantial
salary increases.
1
During the calendar year
2023, the average gross wage in Lithuania
increased by 12%. Growing wages support
the trend of higher investment in employee
search and selection.
The
average
unemployment
rate
in
Lithuania
has
slightly
increased
from
5.9% to 6.8% in the calendar year 2023.
However, the number of employed persons
in Lithuania increased in the calendar year
2023 and reached the highest level since
2007.
1
Jobseekers' activity continues to grow
rapidly, rebounding from the post-pandemic
stagnation. This growth is supported by the
inflow of workforce from foreign countries.
Over the past 12 months, there has been
a significant surge in applications on
CVbankas.lt, with a 19% increase compared
to the previous year.
The Group operates services portals in
Lithuania, Latvia and Estonia. Examining
the service providers market, we have
observed a significant increase in activity
in 2024. Since 2023, the number of active
advertisements on our Services portals
has risen by 32%. The main drivers behind
this growth was the increasing popularity
and traffic to the portals, as well as the
impact of the acquired portals GetaPro in
Latvia and Estonia in 2023. The growing
number of clients and leads encouraged
more service providers to advertise. The
slowdown in the macro environment has
further catalysed this growth.
The Group operates online classifieds
portals in the real estate markets of
Lithuania, Estonia and Latvia. The home
ownership rates in Lithuania, Estonia and
Latvia are some of the highest in Europe:
89% (16% with mortgage or loan), 82%
(27% with mortgage or loan) and 83%
(13% with mortgage or loan) respectively.
2
Accordingly,
secondary
market
transactions in the region are popular and
account for the majority of real estate
transactions.
3
During the last 12 months ending April
2024, the Baltic real estate market was
affected by several factors, including a
rapid increase in interest rates, geopolitical
tensions, and a slowdown in the economy.
These factors led to an 11% decrease in
the number of real estate transactions in
2024, bringing the total to 195 thousand
transactions.
This
figure
includes
90
thousand residential and 105 thousand
non-residential
real
estate
and
land
transactions.
Real estate prices have demonstrated
resilience despite the decline in market
activity. In the calendar year 2023, the
average price per square metre of an
apartment for sale in the Baltic capitals
increased by 6%. This price increase is
supported by the solid financial situation
of real estate developers and elevated
construction costs.
4
As a result, decreased real estate demand
in the region and elevated prices have
led to longer selling times and increased
inventory on our real estate portals. This
provides visitors with a larger array of
property choices.
Real estate transactions, K
Source: State Enterprise Centre of Registers Lithuania,
Land Register Latvia, Land Board Estonia
2022
271
2023
219
2024
195
1
Source: The Lithuanian Department of Statistics.
2
E-commerce retail value RSP (retail selling price) excl. sales tax in calendar years. Figures updated as per changes in Euromonitor data (May 2024).
The Group operates Generalist portals
in Lithuania and Estonia. The COVID-19
pandemic restrictions in 2020 and 2021
significantly boosted e-commerce growth
in these countries. As a result, more
customers turned to online shopping,
leading to an increase in the number of
online buyers, sellers, and transactions.
The Lithuanian and Estonian e-commerce
markets experienced significant growth,
with a combined CAGR of approximately
20% from calendar year 2017 to 2019, 37%
from 2019 to 2021, and 15% from 2021 to
2023. Although growth slowed in 2022 and
2023 compared to the peak pandemic years
of 2020 and 2021, it remained strong. This
sustained growth continued to support
our Generalist platforms and ancillary
products, such as delivery services.
E-commerce market growth
2
Source: Euromonitor
2017
516
382
898
2018
628
469
1,097
2019
753
542
1,295
2020
1,057
712
1,769
2021
1,434
996
2,430
2022
1,748
1,086
2,834
2023
1,941
1,301
3,242
2024E
2,100
1,416
3,516
2025E
2,264
1,506
3,770
2026E
2,421
1,591
4,012
2027E
2,572
1,665
4,237
2028E
2,733
1,737
4,470
Lithuania, €m
Estonia, €m
Automotive market
Real estate market
Jobs & services market
Generalist market
Market Overview
continued
Market Overview
continued
Average apartment price
5
and real estate
transactions
6
Average apartment price per m
2
, €K
Source: Swedbank
2021
2022
2023
1.9
2.2
2.3
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
10
11
STRATEGIC REPORT
Our business model
Our success stems from a proactive,
consumer-focused business model that
integrates both specialised (vertical) and
general (horizontal) online portals, as
shown in the table on the next page.
Our
brands
include
vertical
portals
tailored to specific industries, facilitating
advertising, promotion and sales within
those sectors. These portals attract a
significant number of loyal and returning
business customers (B2C subscribers
with contracts). They are also widely used
by individual customers and the general
public (C2C users engaging in one-time
transactions and returning to our portals
every few years to transact), enriching
our portals with unique, hard-to-replicate
content.
In addition, we operate horizontal or
generalist portals, such as marketplaces,
online auctions, and price comparison
websites,
which
are
popular
among
individual customers and the general
public.
The advantages of this combined business
model are:
•
A wide selection for prospective
consumers, maximising our audience
reach.
•
The ability to cross-list items between
vertical and generalist portals,
expanding reach, increasing available
content, and driving traffic from
generalist portals to higher monetizing
vertical portals.
•
Strong brand awareness across a wide
network.
Our market position
The Group’s portals attract a large and
highly engaged consumer audience.
Our
leadership
2
position
remains
very strong compared to our closest
competitor. The Group’s portals are among
the most visited websites in Lithuania and
Estonia. According to April 2024 ratings
from SimilarWeb, (which also include
websites such as Facebook, Youtube and
local news portals) Skelbiu was the 5
th
,
Autoplius - 7
th
, Auto24 - 10
th
, Aruodas - 14
th
,
KV – 17
th
, Osta - 13
th
in their respective
countries.
Our strategy
Our successful business model,
combining
vertical
and
generalist
platforms,
is
sustained by strategic decisions, including:
•
Investing in fit-for-purpose, long-term
technology:
We develop all technology
in-house
and
on
a
portal-specific
basis, allowing an agile approach while
sharing components and applications
across the platforms. This investment
has created a scalable infrastructure
capable of handling increasing traffic
levels.
•
Focusing
on
cash
generation
with
excellent margins:
Our market leadership
and strong brand identity enable low
marketing expenditures. Additionally,
our organisational structure supports
shared corporate functions and minimal
capital expenditure.
•
Talent
recruitment
and
retention:
We attract and retain a highly skilled
and efficient workforce. Our core HR
objective is to recruit high-potential,
motivated
employees
and
provide
them with opportunities for growth and
development.
For our strategic aims see Moving our
Strategy Forward on pages 13 to 15.
Our purpose and culture
BCG exists to connect consumers
with advertisers, facilitating easier
transactions.
The Group’s purpose, values, and strategy
are closely aligned with its culture. Our
governance
framework,
organisational
structure,
and
culture
significantly
contribute to the successful delivery
of our business model and support our
overarching purpose.
To achieve our purpose, we focus on the
following strategic goals:
•
Enhancing the transaction experience.
•
Providing the easiest solutions for
sellers and buyers to connect.
•
Ensuring a simple advertising process
for our consumers and advertisers.
•
Being the primary solution for our
consumers’ and advertisers’ transaction
needs.
See pages 47 to 48 for information on
our Stakeholders and our approach to
engagement.
See pages 22 to 37 for information on
our approach to Sustainability.
Our Business at a Glance
We love
transactions!
BCG is a collection of the leading online
classifieds websites across real estate,
cars and jobs in the Baltic region. The
Group is proud to be operating 14 online
portals as shown in the Our brands section
on the following page.
Our portals are among the most visited
sites
in
Lithuania
and
Estonia.
The
majority of the Group’s traffic is direct,
with a combination of direct and organic
unpaid search channels accounting for
86% of total traffic. Paid search traffic is
minimal, and our total marketing expenses
are less than 2% of Group revenue.
Based on the number of user visits and the
number of online listings across the Group
portals, BCG is foremost in the online
classifieds market. In 2024, the Group’s
portals were visited on average 56.0
1
million times per month which means that
on average, a resident in the Baltics visited
one of our sites 10 times every month.
We consider using our portals as one of
the easiest and most effective ways to
reach those interested via advertising and,
therefore, to transact auto, real estate,
and other items, as well as job seeking,
recruiting or locating a service provider.
1
Note: The changes in the cookie consent policy, which now require general consent for all cookies not strictly necessary for website operation, have impacted data collection.
Additionally, internet browsers have implemented stricter controls on third-party cookies, leading to a loss of data collected by Google Analytics. As a result, the statistics in Google
Analytics are incomplete and show a decline in total visits to our portals.
2
Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal; therefore, relative market
share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period.
1
Calendar years.
2
Calendar year 2023. Source: Skandinaviska Enskilda Banken (SEB), May 2024.
3
Source: Economic Freedom of the World Annual Report, 2023.
4
Source: World Bank’s Doing Business report, 2020.
5
Source: Digital Quality of Life, 2023.
6
‘EU27+’: the 27 European Union Member States, Iceland , Norway , Switzerland , Albania , Montenegro , North Macedonia , Serbia and Turkey. Source:
eGovernment Benchmark 2022.
Our brands
Lithuania
Estonia
Latvia
Automotive
Real Estate
Jobs & Services
Generalist
% of BCG revenue
for 2024
38%
25%
19%
18%
(Jobs)
(Services)
(Services)
(Services)
Why invest in us
Attractive business environment
Western-minded and
business-oriented
•
Part of EU and
NATO
since 2004
1
•
Part of the euro
area
since
2011-2015
1
•
Part of OECD
since 2010-2018
1
38%
in Lithuania
20%
in Estonia
40%
in Latvia
vs
89%
euro area average
4.6%
in Lithuania
3.1%
in Estonia
4.1%
in Latvia
vs
1.1%
EU average
Low public debt
Ease of doing business
High digital quality of life
gross public debt to GDP ratio
2
Real GDP per capita
CAGR 2000-2023
#12
Lithuania
#12
Estonia
#25
Latvia
#11
Lithuania
#18
Estonia
#19
Latvia
#2
Lithuania
#2
Estonia
#20
Latvia
Economic freedom
in respect to the economic freedom
globally
3
in respect to ease of doing
business globally
4
in electronic security globally
5
eGovernment
maturity score
#8
Lithuania
#2
Estonia
#9
Latvia
GDP growth exceeds
EU avg
in eGovernance maturity score
ratings in the “EU27+”
6
Our Business at a Glance
continued
BCG is a collection of the leading
online classifieds websites across
real estate, cars and jobs in the
Baltic region.
“
1
st
in the EU
Baltic Classifieds Group PLC Annual Report and Accounts 2024
12
1
Alternative performance measure (see note 4 to the consolidated financial statements on pages 89 to 90). 2023-2024 EBITDA and 2022 adjusted EBITDA.
2
Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal; therefore, relative market
share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period.
3
Source: Google Analytics, 2024.
4
Source: SimilarWeb data, 2024.
5
Annual BCG employee survey, 2024.
Moving our Strategy Forward
Our priority
We are committed to being a responsible
business.
Our
priority
is
to
protect
and
support
our
people,
customers,
Stakeholders and the environment around
us.
Our purpose is to connect consumers with