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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 2019 2020e 2021e
Sales 1130 1016 999
Sales growth (%) -1,3 -10,1 -1,7
EBITDA 191 269 271
EBITDA margin (%) 16,9 26,4 27,1
EBIT adj 160 236 239
EBIT adj margin (%) 14,2 23,2 23,9
Pretax profit 266 353 279
EPS rep 11,02 14,99 12,13
EPS growth (%) 192,2 36 -19,1
EPS adj 4,41 8,27 9,35
DPS 2 4 4
EV/EBITDA (x) 2,1 2,5 1,6
EV/EBIT adj (x) 2,5 2,8 1,8
P/E (x) 3,8 5 6,2
P/E adj (x) 9,6 9,1 8
EV/sales (x) 0,4 0,7 0,4
FCF yield (%) 15,5 12,8 14,3
Dividend yield (%) 4,7 5,3 5,3
Net IB debt/EBITDA -1,8 -2,4 -3,3
N/A N/A N/A
DKKm 2019 2020e 2021e
Sales 1130 1016 999
COGS -541 -407 -392
Gross profit 589 609 607
Other operating items -398 -340 -336
EBITDA 191 269 271
Depreciation on tangibles -29 -31 -30
Depreciation on intangibles -2 -2 -2
EBITA 160 236 239
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 160 236 239
Other financial items 0 0 0
Net financial items -12 -5 -5
Associated income -5 -5 -5
Other EO items 122 127 50
Pretax profit 266 353 279
Tax -62 -78 -61
Net profit 204 275 218
Minority interest 0 0 0
Net profit discontinued 0 -6 0
Net profit to shareholders 204 269 218
EPS 11,02 14,99 12,13
EPS Adj 4,41 8,27 9,35
Total extraordinary items after tax 122,1 127 50
Tax rate (%) -23,4 -22 -22
Gross margin (%) 52,1 60 60,8
EBITDA margin (%) 16,9 26,4 27,1
EBITA margin (%) 14,2 23,2 23,9
EBIT margin (%) 14,2 23,2 23,9
Pretax margin (%) 24 35,2 28,5
Net margin (%) 18,5 27,6 22,3
Growth rates Y/Y 2019 2020 2021
Sales growth (%) -1,3 -10,1 -1,7
EBITDA growth (%) 38,9 40,9 0,9
EBIT growth (%) 46,1 47,3 1,3
Net profit growth (%) 184,8 35,3 -20,9
EPS growth (%) 192,2 36 -19,1
Profitability 2019 2020 2021
ROE (%) 33,7 33,3 20,6
ROE Adj (%) 13,5 18,4 15,9
ROCE (%) 37,7 38,1 23,9
ROCE Adj(%) 21,2 24,6 19,7
ROIC (%) 35,8 57 63,5
ROIC Adj (%) 35,8 57 63,5
Adj earnings numbers 2019 2020 2021
EBITDA Adj 191 269 271
EBITDA Adj margin (%) 16,9 26,4 27,1
EBITA Adj 160 236 239
EBITA Adj margin (%) 14,2 23,2 23,9
EBIT Adj 160 236 239
EBIT Adj margin (%) 14,2 23,2 23,9
Pretax profit Adj 144 226 229
Net profit Adj 82 148 168
Net profit to shareholders Adj 82 148 168
Net Adj margin (%) 7,6 15,1 17,3
N/A N/A N/A
DKKm 2019 2020e 2021e
EBITDA 191 269 271
Net financial items -12 -5 -5
Paid tax -62 -78 -61
Non-cash items 0 0 0
Cash flow before change in WC 117 186 205
Change in WC 14 4 1
Operating cash flow 130 190 205
CAPEX tangible fixed assets -12 -12 -12
CAPEX intangible fixed assets 1 0 0
Acquisitions and disposals 2 -5 0
Free cash flow 121 173 193
Dividend paid 28 5 5
Share issues and buybacks 1 0 0
Other non cash items -7 129 50
Decrease in net IB debt 155 306 248
Balance Sheet (DKKm) 2019 2020 2021
Goodwill 39 39 39
Indefinite intangible assets 3 0 0
Definite intangible assets 11 9 8
Tangible fixed assets 250 232 214
Other fixed assets 86 81 76
Fixed assets 389 361 336
Inventories 5 4 4
Receivables 89 85 83
Other current assets 0 0 0
Cash and liquid assets 485 791 1038
Total assets 968 1240 1462
Shareholders equity 671 945 1167
Minority 0 0 0
Total equity 671 945 1167
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 42 41
Other current liabilities 102 101 101
Total liabilities and equity 968 1240 1462
Net IB debt -351 -657 -905
Net IB debt excl. pension debt -351 -657 -905
Capital invested 339 307 281
Working capital -50 -54 -55
EV breakdown 2019 2020 2021
Market cap. diluted (m) 778 1347 1347
Net IB debt Adj -351 -657 -905
Market value of minority 0 0 0
Reversal of shares and participations -26 -21 -17
Reversal of conv. debt assumed equity 0 0 0
EV 400 668 425
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 126 92 73,9
Capital invested turnover (%) 329,3 314,6 339,8
Capital employed turnover (%) 153,3 107,9 84
Inventories / sales (%) 0,4 0,5 0,4
Customer advances / sales (%) 0,9 0,9 0,9
Payables / sales (%) 4,1 4,1 4,1
Working capital / sales (%) -4,3 -5,1 -5,5
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -52,3 -69,6 -77,5
Net debt / market cap (%) -54,4 -48,8 -67,2
Equity ratio (%) 69,4 76,2 79,8
Net IB debt adj. / equity (%) -52,3 -69,6 -77,5
Current ratio (%) 373,7 572 736,1
EBITDA / net interest (%) 1643,1 5289 5429
Net IB debt / EBITDA (%) -184,2 -244,6 -333,6
Interest cover (%) 1318,9 4425,3 4558,4
N/A N/A N/A
DKKm 2019 2020e 2021e
Shares outstanding adj. 18 18 18
Fully diluted shares Adj 18 18 18
EPS 11,02 14,99 12,13
Dividend per share Adj 2 4 4
EPS Adj 4,41 8,27 9,35
BVPS 36,37 52,63 65,01
BVPS Adj 33,64 49,93 62,41
Net IB debt / share -19 -36,6 -50,4
Share price 34,97 75 75
Market cap. (m) 645 1347 1347
Valuation 2019 2020 2021
P/E 3,8 5 6,2
EV/sales 0,35 0,66 0,43
EV/EBITDA 2,1 2,5 1,6
EV/EBITA 2,5 2,8 1,8
EV/EBIT 2,5 2,8 1,8
Dividend yield (%) 4,7 5,3 5,3
FCF yield (%) 15,5 12,8 14,3
P/BVPS 1,16 1,43 1,15
P/BVPS Adj 1,25 1,5 1,2
P/E Adj 9,6 9,1 8
EV/EBITDA Adj 2,1 2,5 1,6
EV/EBITA Adj 2,5 2,8 1,8
EV/EBIT Adj 2,5 2,8 1,8
EV/cap. employed 0,5 0,6 0,3
Investment ratios 2019 2020 2021
Capex / sales 1 1,2 1,2
Capex / depreciation 37 38,4 38,4
Capex tangibles / tangible fixed assets 4,9 5,4 5,7
Capex intangibles / definite intangibles -8,9 0 0
Depreciation on intangibles / definite intangibles 15,2 19,5 23,7
Depreciation on tangibles / tangibles 11,4 13,2 14,1
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 % 31 Jul 2020
Lærernes Pension 1.4 % 1.4 % 30 Jun 2020
Gudme Raaschou Asset Management 1.2 % 1.2 % 31 Jul 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
Danske Invest (DK) 0.1 % 0.1 % 30 Sep 2020
Source: Holdings by Modular Finance AB