North Media – 2019 Annual Report · Q4 2019 • 2% growth, driven by FK Distribution, North Media...
Transcript of North Media – 2019 Annual Report · Q4 2019 • 2% growth, driven by FK Distribution, North Media...
North Media – 2019 Annual Report
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1. 2019 financial results o Highlightso Group financial highlights
2. Business areas o Business model o Operations, financial results and outlook
3. Group outlook for 2020
4. Group matters o Creation of value o Capitalo Governanceo Strategic focus
5. Q&As
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Mads Dahl Møberg AndersenChairman of the Board of Directors
Kåre Stausø WighGroup Executive Director & CFO
Forward-looking statementsThis presentation contains statements about the future, including expectations for 2020, which are inherently subject to risks and uncertainties that could cause actual results to differ materially from those expected. Please see the section on risks and risk management on pages 43-44 of our 2018 Annual Report.
Agenda
North Media – 2019 Annual Report
Highlights
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Q4 2019
• 2% growth, driven by FK Distribution, North Media Online and BEKEY
• Operating profit up 50%, owing to good progress in all activities
• All business areas exceeded the results achieved in Q4 2018
2019 full year
• Operating profit at the high end of the most recently announced range
• FK Distribution and North Media Online increased earnings considerably
• Financial results of North Media Aviser and BEKEY as expected
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Group revenue, DKK million
EBIT before special items, DKK million
(DKK million) Actual 06/11/2019 25/06/2019 02/05/2019 07/02/2019
Revenue 1,130 1,110-1,140 1,110-1,160 1,110-1,160 1,100-1,160
EBIT bsi 160 145-160 120-140 105-125 95-125
North Media – 2019 Annual Report
Financial results (DKK million) 2019 2018
Revenue 1,130.0 1,144.9EBITDA 190.6 137.2Depreciation 30.3 27.5EBIT before special items 160.3 109.7Special items, net 1.7 -15.7Operating profit (EBIT) 162.0 94.0Return on securities 122.1 5.2Financial items, net -11.6 -27.0Profit for the year (after tax) 205.3 55.8
Group financial highlights
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Profit margin
14.2%(9.6%)
Return on securities
45.3%(2.6%)
Return on equity
33.9%(10.8%)
Dividend and share buyback
DKK 74.8m(DKK 26.2 million)
Other key figures and financial ratios
Capital resources (DKK million) 484.7 327.2Cash flows from operating activities 130.3 104.7Earnings per share, (DKK) 11.0 3.0
North Media – 2019 Annual Report
Connecting the business community and consumers
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Digital access solutions
Intermediary for bank loans
Job agentsLetting agentsNationwide distribution of leaflets and advertisements etc. to 2.3 million households
Digital advertising platform
9 free local newspapers in Greater Copenhagen and North Zealand
Helsingør Dagblad
Retailers, estate agents and other types of advertiser Landlords Employers Banks Caregivers and
couriers
Consumers in a broad sense House hunters Job seekers Borrowers Households
North Media – 2019 Annual Report
High-volume business
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Retailers, estate agents and other types of advertiser Landlords Employers Banks Caregivers and
couriers
Consumers in a broad sense House hunters Job seekers Borrowers Households
2.3 million+households reached each week
450,000+unique users of minetilbud.dk
approx. 100,000
lettings of Danish rented homes
arranged in 2019
approx. 8m
doors opened in 2019 - 33,000 users
approx. 30,000
loans arranged in 11 countries in
2019
approx. 30,000
job placements in 2019
North Media – 2019 Annual Report
FK Distribution2019 results
• Decline in volume less than expected
• Stable revenue from printed matter
• 15% decline in distribution of local newspapers
• Increasing digital revenue
• Optimisation and efficiencyimprovements - increased earningsexceed expectations
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Outlook for 2020 Revenue
DKK 870-910mEBIT before special items
DKK 175-190m
Objectives for 2020
• Change from two to one weekly distribution rounds
• Sale of new products, e.g. journals and direct mail
• Ongoing optimisation of production process
• Development of digital services
(DKK million) Q4 2019 Q4 2018 2019 2018
Revenue 259 254 926 933
EBIT bsi 65 50 172 139
Financial highlights
North Media – 2019 Annual Report
TV 1.7
Other offline1.5
Display 1.0
Search (Generic + brand)
2.4
Other online1.6
Leaflets1.8
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ROI
Share of return
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The leaflet is a powerful tool for retailers Approx. 70% of households receive leaflets
Approx. 20% of households make their own choice via NoAds+
• Retailers have a high return (ROI) from leaflets
• Results for advertisers using leaflets
Definitions and notes :- ROI: Return on (media) Investment. - Share of return: percentage share of media-driven sales attributable to each media channel. Example: Leaflets are attributable
to 43% of media-driven sales, based on all advertisers using the channel.- The size of the bubble illustrates the average media budget.
Source: Data Intelligence, 2019
The figure shows the average ROI and share of the return, broken down by media group from the database in the period 2016-2018. 17 brands are included in the results.
Source: PDK and FK
North Media – 2019 Annual Report
83.00% 81.50% 79.00% 78.00%71.20% 70.40%
61.70%53.80%
49.80% 50.20% 49.70%
17.00% 18.50% 21.00% 22.00%28.80% 29.60%
38.30%46.20% 50.20% 49.80% 50.30%
0.20% 1.80%11.20%
20.10%24.30% 21.50% 19.70%
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
%-of all households (january)Receives all ads NoAds NoAds+
2019 results
• Revenues affected by closure of weekend editions and fewer advertisements
• Relaunch of newspapers
• Content earmarked for individual neighbourhoods
• Organisational restructuring and new management team
(DKK million) Q4 2019 Q4 2018 2019 2018
Revenue 27 29 94 107
EBIT bsi 1 0 -6 -9
Outlook for 2020 Financial highlights
North Media Aviser
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Revenue
DKK 87-91mEBIT before special items
DKK -12 to -8m
Objectives for 2020
• Focus on strong local anchorage
• More digital platforms in close interactionwith printed newspapers
• Restructuring, training and upgrading of media advisers’ qualifications
• Focus on powerful local stories
North Media – 2019 Annual Report
(DKK million) Q4 2019 Q4 2018 2019 2018
Revenue 21 20 86 81
EBIT bsi 2 0 7 -4
Outlook for 2020 Financial highlights
North Media Online2019 results
• Boligportal: 9% growth after launch of new digital services
• Ofir: Flat revenue trend
• Total operating profit improved
• Lead Supply: good progress; ownership share written down by DKK 6 million
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Revenue
DKK 93-97mEBIT before special items
DKK 10-14m
Objectives for 2020
• Boligportal: New services, improve use of data, partnerships
• Ofir: improve focus on SoMe, improve infrastructure
• Lead Supply: consolidate position in principal markets, increase traffic
North Media – 2019 Annual Report
BEKEY2019 results
• Close down unprofitable niches and delay of local authority tenders
• 34% growth in business with local authorities
• Collaboration with 65 local authorities in Denmark and Norway
• Operating loss reflects trend in cover of stairwells in Greater Copenhagen
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Revenue
DKK 25-30mEBIT before special items
DKK -10 to -7m
(DKK million) Q4 2019 Q4 2018 2019 2018
Revenue 8 5 25 24
EBIT bsi -2 -4 -10 -10
Objectives for 2020
• Extend market coverage in Greater Copenhagen from approx. 50% to at least 70% of stairwells
• Establish cooperation with selected distribution companies
• Further develop products and systems
• Conclude more agreements with local authorities
2020 Forecast Financial highlights
North Media – 2019 Annual Report
Group outlook for 2020
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Group revenue, DKKm
EBIT before special items, DKKm
North Media expects additional EBIT growth in 2020
• FK Distribution: Slightly lower revenue and increased operating profit
• North Media Online: Revenue and profit growth
• North Media Aviser: Higher operating losses due to cost of strengthening sales, editorial content and digital platforms
• BEKEY: Reduced operating losses despite expenses for extended coverage
Revenue, DKKm
1,075-1,125(1,130)
EBIT before special items, DKKm
160-190(160)
North Media – 2019 Annual Report
Creating value for shareholders
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Recommended dividend distribution
• Dividend of DKK 4 due to extraordinary financial results
• Dividend of DKK 74 million (excluding treasury shares)
42% return to shareholders in 2019
• Dividend and price increases
• Share buy-backs for approx. DKK 20 million
Strengthening investor relations
• Quarterly reporting and increased news flow
• Analyses and market maker scheme
• Improved investor dialogue
• Clear labelling
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Dividend DKK per share for the financial year
Distributions including buyback (DKKm)
North Media – 2019 Annual Report
New capital structure and dividend policy
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• Maintain cash resources in the region of DKK 550 million
• Significant share of investments in highly liquid listed shares, etc.
• Debt only in the form of long-term fixed-rate mortgage credit loans
• Invest in existing activities
• Acquisitions holding positive synergy and scale potential
• Constant, attractive dividend for shareholders
• Occasional share buy-backs
Changes in capital resources in 2019
Projection of capital resources 2020
Maintain sufficient financial flexibility to exploit market potential and meet strategicobjectives
Ensure independence of structural market fluctuations
North Media – 2019 Annual Report
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2018 Ord. Operations
Return on
-75
Dividend/ Buy-
backs
-5
DiverseMortg.Repaym.
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2019
327
485
+158
securities
137 540
2019 Ord.Operations
(avg.)
-74
Dividend
-8
PaymentMortgage
2020E(avg.)
485
+55
Continued strengthening of the board of directors
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Ulrik Falkner Thagesen
North Media – 2019 Annual Report
Thomas Weikop
Thomas Weikop (aged 53)• Danish School of Media and
Journalism/Graphic Arts Institute of Denmark, School of Communication Arts, London
• In-depth knowledge of investmentand trends in Danish and international technology businesses
• Member of the boards of directors of FK Distribution, North Media Aviser, North Media Online, BEKEY, Brandhouse, Go Dogo, Subsero and vertigo.ai
• Former Director of Danske Bank/MobileLife
Ulrik Falkner Thagesen (aged 48)• M.Sc. (Econ) from Aarhus
University and media planner from the Danish School of Advertising
• Formal board member training at the Copenhagen Business School
• Member of the board of directors of Basisbank and Peytz & Co.
• CEO of e-Boks A/S
”The board of directors recommendsThomas Weikop and Ulrik Falkner Thagesen for election to the board of directors of North Media A/S at the annual general meeting on 27 March 2020. Both are expected to contribute to the growth and digital transformation of North Media A/S in the years ahead."
Continued value creation at North Media
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• Differentiation, new services
• Growth in Denmark and Sweden
• Internationalisation
• Penetrate stairwell market
• Grow local authority business
• Expand through distributors
• Optimise value chain
• New products and customers
• Good results in the years ahead
• A better value proposition
• Multi-media mediation
• Break-even not later than year-end 2021
Focus on earnings in all activities
Growth focus Optimisation focus
• Improve minetilbud.dk
• New digital/print solutions
• Exploit Big Data systematically
• Improve local relevance
• Symbiosis digital/print
• Break-even not later than year-end 2021
• Strengthen market position
• More users, more traffic
• Focus on quality
DIGITAL
North Media – 2019 Annual Report
Questions17North Media – 2019 Annual Report
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Financial calendar 2020
7 May: Q1 report
20 August: Q2 report
5 November: Q3 report
Investor relations contact
CEO Kåre Stausø Wigh T: (+45) 3957 7000
E: [email protected] M: (+45) 2565 2145
Thank you for attending
North Media – 2019 Annual Report