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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 four segments: FK Distribution, North Media Newspapers, 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 2018 2019e 2020e
Sales 1145 1124 1089
Sales growth (%) 27,3 -1,9 -3,1
EBITDA 137 182 179
EBITDA margin (%) 12 16,2 16,4
EBIT adj 110 151 150
EBIT adj margin (%) 9,6 13,4 13,7
Pretax profit 73 240 157
EPS rep 2,94 10,02 6,56
EPS growth (%) 99,3 240,4 -34,5
EPS adj 3,77 9,87 6,56
DPS 28,4 4,5 4,5
EV/EBITDA (x) 3 2,6 2
EV/EBIT adj (x) 3,8 3,2 2,4
P/E (x) 11,6 4,4 6,6
P/E adj (x) 9,1 4,4 6,6
EV/sales (x) 0,4 0,4 0,3
FCF yield (%) 10,8 15,6 12,4
Dividend yield (%) 83 10,3 10,3
Net IB debt/EBITDA -1,4 -1,6 -2,2
DKKm 2018 2019e 2020e
Sales 1145 1124 1089
COGS -592 -551 -526
Gross profit 553 573 563
Other operating items -415 -391 -384
EBITDA 137 182 179
Depreciation on tangibles -23 -24 -23
Depreciation on intangibles -4 -7 -6
EBITA 110 151 150
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 110 151 150
Other financial items 0 0 0
Net financial items -27 -6 -5
Associated income 6 92 13
Other EO items -16 3 0
Pretax profit 73 240 157
Tax -17 -55 -36
Net profit 56 185 121
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 56 185 121
EPS 2,94 10,02 6,56
EPS Adj 3,77 9,87 6,56
Total extraordinary items after tax -15,7 2,8 0
Tax rate (%) -23,7 -22,8 -22,8
Gross margin (%) 48,3 51 51,7
EBITDA margin (%) 12 16,2 16,4
EBITA margin (%) 9,6 13,4 13,7
EBIT margin (%) 9,6 13,4 13,7
Pretax margin (%) 5,9 13,2 13,2
Net margin (%) 4,3 8,3 10
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 27,3 -1,9 -3,1
EBITDA growth (%) 383,1 32,6 -1,7
EBIT growth (%) 109800 37,5 -0,8
Net profit growth (%) 99,3 231,7 -34,6
EPS growth (%) 99,3 240,4 -34,5
Profitability 2018 2019 2020
ROE (%) 10,8 32,6 18,4
ROE Adj (%) 13,8 32,1 18,4
ROCE (%) 15,4 35,1 20,5
ROCE Adj(%) 17,8 34,7 20,5
ROIC (%) 19,1 27,5 27,5
ROIC Adj (%) 19,1 27,5 27,5
Adj earnings numbers 2018 2019 2020
EBITDA Adj 137 182 179
EBITDA Adj margin (%) 12 16,2 16,4
EBITA Adj 110 151 150
EBITA Adj margin (%) 9,6 13,4 13,7
EBIT Adj 110 151 150
EBIT Adj margin (%) 9,6 13,4 13,7
Pretax profit Adj 89 237 157
Net profit Adj 72 182 121
Net profit to shareholders Adj 72 182 121
Net Adj margin (%) 5,7 8,1 10
DKKm 2018 2019e 2020e
EBITDA 137 182 179
Net financial items -27 -6 -5
Paid tax -17 -55 -36
Non-cash items 0 0 0
Cash flow before change in WC 93 122 138
Change in WC -3 29 -14
Operating cash flow 105 151 124
CAPEX tangible fixed assets -26 -25 -25
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals -9 0 0
Free cash flow 70 125 99
Dividend paid 28 5 5
Share issues and buybacks 0 0 0
Other non cash items -49 -45 2
Decrease in net IB debt 47 95 106
Balance Sheet (DKKm) 2018 2019 2020
Goodwill 39 39 39
Indefinite intangible assets 2 2 0
Definite intangible assets 12 12 5
Tangible fixed assets 247 253 255
Other fixed assets 95 92 104
Fixed assets 396 397 404
Inventories 4 6 5
Receivables 99 92 92
Other current assets 0 0 0
Cash and liquid assets 327 425 531
Total assets 825 921 1032
Shareholders equity 539 596 722
Minority 0 0 0
Total equity 539 596 722
Long-term debt 127 123 123
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 5 5 5
Other long-term liabilities 0 10 10
Short-term debt 5 11 11
Accounts payable 51 71 59
Other current liabilities 100 104 102
Total liabilities and equity 766 785 825
Net IB debt -196 -291 -397
Net IB debt excl. pension debt -196 -291 -397
Capital invested 437 410 430
Working capital 42 13 26
EV breakdown 2018 2019 2020
Market cap. diluted (m) 648 805 805
Net IB debt Adj -196 -291 -397
Market value of minority 0 0 0
Reversal of shares and participations -35 -33 -46
Reversal of conv. debt assumed equity 0 0 0
EV 417 480 362
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 142,2 128,7 111,6
Capital invested turnover (%) 260,7 265,3 259,4
Capital employed turnover (%) 176,2 160,6 137,4
Inventories / sales (%) 0,4 0,4 0,5
Customer advances / sales (%) 0,8 1,1 1,2
Payables / sales (%) 4,6 5,4 6
Working capital / sales (%) 3,5 2,4 1,8
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) -36,4 -48,9 -55
Net debt / market cap (%) -27,8 -36,2 -49,4
Equity ratio (%) 65,3 64,7 69,9
Net IB debt adj. / equity (%) -36,4 -48,9 -55
Current ratio (%) 276,6 280,8 365,6
EBITDA / net interest (%) 508,1 3239 3285,2
Net IB debt / EBITDA (%) -142,9 -160,1 -222
Interest cover (%) 405,2 2675,4 2737,9
DKKm 2018 2019e 2020e
Shares outstanding adj. 19 18 18
Fully diluted shares Adj 19 18 18
EPS 2,94 10,02 6,56
Dividend per share Adj 28,4 4,5 4,5
EPS Adj 3,77 9,87 6,56
BVPS 28,42 32,29 39,1
BVPS Adj 25,7 29,55 36,7
Net IB debt / share -10,3 -15,8 -21,5
Share price 37,22 43,6 43,6
Market cap. (m) 706 805 805
Valuation 2018 2019 2020
P/E 11,6 4,4 6,6
EV/sales 0,36 0,43 0,33
EV/EBITDA 3 2,6 2
EV/EBITA 3,8 3,2 2,4
EV/EBIT 3,8 3,2 2,4
Dividend yield (%) 83 10,3 10,3
FCF yield (%) 10,8 15,6 12,4
P/BVPS 1,2 1,35 1,11
P/BVPS Adj 1,33 1,48 1,19
P/E Adj 9,1 4,4 6,6
EV/EBITDA Adj 3 2,6 2
EV/EBITA Adj 3,8 3,2 2,4
EV/EBIT Adj 3,8 3,2 2,4
EV/cap. employed 0,6 0,7 0,4
Investment ratios 2018 2019 2020
Capex / sales 2,2 2,3 2,3
Capex / depreciation 93,5 81,4 83,9
Capex tangibles / tangible fixed assets 10,4 10 9,6
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 33,9 58,2 120,7
Depreciation on tangibles / tangibles 9,4 9,6 9

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Main shareholders - North Media

Main shareholders Share capital % Voting shares % Verified
Richard Bunck 55.7 % 55.7 % 31 Dec 2018
Olav W. Hansen 9.2 % 9.2 % 31 Dec 2018
North Media A/S 8.0 % 8.0 % 3 Apr 2019
BIL Danmark 1.5 % 1.5 % 30 Nov 2019
Mads Dahl Andersen 1.1 % 1.1 % 30 Aug 2019
Fundamental Fondsmæglerselskab A/S 0.8 % 0.8 % 31 Aug 2019
C WorldWide Asset Management 0.7 % 0.7 % 30 Sep 2019
MP Pension 0.6 % 0.6 % 31 Jul 2019
Sparinvest 0.5 % 0.5 % 31 Oct 2019
Kåre Stausø Wigh 0.4 % 0.4 % 31 Dec 2018
Source: Holdings by Modular Finance AB