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North Media

North Media

Leading print ad distributor

North Media’s history dates back to 1965, when the distribution of unaddressed printed advertisements and newspapers was its main activity. The company has since diversified its product offering to include advertisement-funded internet distribution activities. North Media is the only media company listed on the OMX Copenhagen Stock Exchange. It operates three segments: FK Distribution, North Media Online and BEKEY.

Offline media remains popular in Denmark, with ~75% of Danish households receiving it. Because the number of supermarkets is declining, the industry demands tailored marketing solutions, and North Media offers a strong distribution platform. We believe that the company can therefore leverage its position to increase prices. In addition to its strong offline position, North Media is also expanding its digital efforts, where good expansion opportunities exist.

There are three main risks to the business: 1) the implementation of regulations against physical advertisements and/or an increased negative perception of offline advertisements, 2) increased penetration of online marketing from competitors and its market share versus print media, and 3) difficulties finding growth opportunities in the three smaller segments of the company.

DKKm 2020 2021e 2022e
Sales 1016 1000 988
Sales growth (%) -10,1 -1,6 -1,2
EBITDA 274 280 285
EBITDA margin (%) 26,9 28 28,8
EBIT adj 241 248 253
EBIT adj margin (%) 23,7 24,8 25,6
Pretax profit 379 279 286
EPS rep 16,79 12,1 12,44
EPS growth (%) 48,2 -27,9 2,8
EPS adj 10,29 10,43 10,65
DPS 4 4,5 4,5
EV/EBITDA (x) 2,6 1,7 0,8
EV/EBIT adj (x) 3 1,9 0,9
P/E (x) 4,7 6,6 6,4
P/E adj (x) 7,7 7,6 7,5
EV/sales (x) 0,7 0,5 0,2
FCF yield (%) 11,8 13,9 14,1
Dividend yield (%) 5 5,7 5,7
Net IB debt/EBITDA -2,5 -3,3 -4,2
N/A N/A N/A
DKKm 2020 2021e 2022e
Sales 1016 1000 988
COGS -402 -385 -377
Gross profit 614 614 611
Other operating items -340 -334 -326
EBITDA 274 280 285
Depreciation on tangibles -31 -30 -30
Depreciation on intangibles -2 -2 -2
EBITA 241 248 253
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 241 248 253
Other financial items 0 0 0
Net financial items -5 -5 -5
Associated income -5 -5 -5
Other EO items 147 40 43
Pretax profit 379 279 286
Tax -83 -61 -63
Net profit 295 217 223
Minority interest 0 0 0
Net profit discontinued 6 0 0
Net profit to shareholders 302 217 223
EPS 16,79 12,1 12,44
EPS Adj 10,29 10,43 10,65
Total extraordinary items after tax 110,5 30 32,1
Tax rate (%) -22 -22 -22
Gross margin (%) 60,5 61,5 61,9
EBITDA margin (%) 26,9 28 28,8
EBITA margin (%) 23,7 24,8 25,6
EBIT margin (%) 23,7 24,8 25,6
Pretax margin (%) 37,7 28,3 29,5
Net margin (%) 29,5 22,2 23,1
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -10,1 -1,6 -1,2
EBITDA growth (%) 43,6 2,5 1,6
EBIT growth (%) 50,5 3 2
Net profit growth (%) 45 -26,4 2,8
EPS growth (%) 48,2 -27,9 2,8
Profitability 2020 2021 2022
ROE (%) 36,6 20 17
ROE Adj (%) 22,4 17,2 14,6
ROCE (%) 40,1 23,2 20,2
ROCE Adj(%) 24,7 20 17,2
ROIC (%) 58,3 65,9 73,6
ROIC Adj (%) 58,3 65,9 73,6
Adj earnings numbers 2020 2021 2022
EBITDA Adj 274 280 285
EBITDA Adj margin (%) 26,9 28 28,8
EBITA Adj 241 248 253
EBITA Adj margin (%) 23,7 24,8 25,6
EBIT Adj 241 248 253
EBIT Adj margin (%) 23,7 24,8 25,6
Pretax profit Adj 231 239 244
Net profit Adj 185 187 191
Net profit to shareholders Adj 185 187 191
Net Adj margin (%) 18,7 19,2 19,9
N/A N/A N/A
DKKm 2020 2021e 2022e
EBITDA 274 280 285
Net financial items -5 -5 -5
Paid tax -83 -61 -63
Non-cash items 0 0 0
Cash flow before change in WC 185 214 217
Change in WC 4 1 0
Operating cash flow 190 215 218
CAPEX tangible fixed assets -12 -12 -12
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals -9 -4 -4
Free cash flow 169 199 202
Dividend paid 5 5 5
Share issues and buybacks 0 0 0
Other non cash items 165 44 47
Decrease in net IB debt 338 247 254
Balance Sheet (DKKm) 2020 2021 2022
Goodwill 39 39 39
Indefinite intangible assets 0 0 0
Definite intangible assets 9 8 6
Tangible fixed assets 232 214 196
Other fixed assets 81 76 71
Fixed assets 361 336 311
Inventories 4 4 4
Receivables 85 83 82
Other current assets 0 0 0
Cash and liquid assets 823 1070 1324
Total assets 1273 1494 1721
Shareholders equity 977 1199 1427
Minority 0 0 0
Total equity 977 1199 1427
Long-term debt 123 123 123
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 10 10 10
Other long-term liabilities 9 9 9
Short-term debt 11 11 11
Accounts payable 42 41 41
Other current liabilities 101 101 101
Total liabilities and equity 1273 1494 1721
Net IB debt -689 -936 -1190
Net IB debt excl. pension debt -689 -936 -1190
Capital invested 307 281 256
Working capital -54 -55 -55
EV breakdown 2020 2021 2022
Market cap. diluted (m) 1426 1426 1426
Net IB debt Adj -689 -936 -1190
Market value of minority 0 0 0
Reversal of shares and participations -21 -17 -12
Reversal of conv. debt assumed equity 0 0 0
EV 715 473 224
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 90,7 72,3 61,5
Capital invested turnover (%) 314,6 340,1 367,9
Capital employed turnover (%) 106 81,8 68,3
Inventories / sales (%) 0,5 0,4 0,4
Customer advances / sales (%) 0,9 0,9 0,9
Payables / sales (%) 4,1 4,1 4,1
Working capital / sales (%) -5,1 -5,5 -5,6
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -70,6 -78,1 -83,4
Net debt / market cap (%) -66,5 -65,7 -83,5
Equity ratio (%) 76,8 80,3 82,9
Net IB debt adj. / equity (%) -70,6 -78,1 -83,4
Current ratio (%) 593 756,6 925,4
EBITDA / net interest (%) 5389 5609 5769
Net IB debt / EBITDA (%) -251,9 -333,9 -417,6
Interest cover (%) 4520,4 4729,6 4881,7
N/A N/A N/A
DKKm 2020 2021e 2022e
Shares outstanding adj. 18 18 18
Fully diluted shares Adj 18 18 18
EPS 16,79 12,1 12,44
Dividend per share Adj 4 4,5 4,5
EPS Adj 10,29 10,43 10,65
BVPS 54,43 66,77 79,46
BVPS Adj 51,73 64,18 76,96
Net IB debt / share -38,4 -52,2 -66,3
Share price 57,71 79,4 79,4
Market cap. (m) 1036 1426 1426
Valuation 2020 2021 2022
P/E 4,7 6,6 6,4
EV/sales 0,7 0,47 0,23
EV/EBITDA 2,6 1,7 0,8
EV/EBITA 3 1,9 0,9
EV/EBIT 3 1,9 0,9
Dividend yield (%) 5 5,7 5,7
FCF yield (%) 11,8 13,9 14,1
P/BVPS 1,46 1,19 1
P/BVPS Adj 1,54 1,24 1,03
P/E Adj 7,7 7,6 7,5
EV/EBITDA Adj 2,6 1,7 0,8
EV/EBITA Adj 3 1,9 0,9
EV/EBIT Adj 3 1,9 0,9
EV/cap. employed 0,6 0,4 0,1
Investment ratios 2020 2021 2022
Capex / sales 1,2 1,2 1,2
Capex / depreciation 38,4 38,4 38,4
Capex tangibles / tangible fixed assets 5,4 5,8 6,2
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 19,5 23,7 30,5
Depreciation on tangibles / tangibles 13,2 14,1 15,2
N/A N/A N/A

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Main shareholders - North Media

Main shareholders Share capital % Voting shares % Verified
Richard Bunck 55.7 % 55.7 % 31 Dec 2019
North Media A/S 10.5 % 10.5 % 3 Mar 2020
Olav W. Hansen 5.0 % 5.0 % 18 Feb 2020
Fundamental Fondsmæglerselskab A/S 1.6 % 1.6 % 30 Nov 2020
Lærernes Pension 1.4 % 1.4 % 30 Jun 2020
Gudme Raaschou Asset Management 1.1 % 1.1 % 30 Nov 2020
Mads Dahl Andersen 0.8 % 0.8 % 1 Sep 2020
Kåre Stausø Wigh 0.4 % 0.4 % 31 Dec 2019
BIL Danmark 0.3 % 0.3 % 31 Oct 2020
Bissan Value Investing EAFI 0.1 % 0.1 % 31 Dec 2020
Source: Holdings by Modular Finance AB