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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 2019 2020e 2021e
Sales 1124 1089 1057
Sales growth (%) -1,9 -3,1 -2,9
EBITDA 182 179 176
EBITDA margin (%) 16,2 16,4 16,7
EBIT adj 151 150 149
EBIT adj margin (%) 13,4 13,7 14,1
Pretax profit 240 157 156
EPS rep 10,02 6,56 6,52
EPS growth (%) 240,4 -34,5 -0,7
EPS adj 9,87 6,56 6,52
DPS 4,5 4,5 4,5
EV/EBITDA (x) 2,9 2,3 1,6
EV/EBIT adj (x) 3,5 2,7 1,9
P/E (x) 4,6 7 7,1
P/E adj (x) 4,7 7 7,1
EV/sales (x) 0,5 0,4 0,3
FCF yield (%) 14,8 11,7 13,2
Dividend yield (%) 9,8 9,8 9,8
Net IB debt/EBITDA -1,6 -2,2 -2,9
DKKm 2019 2020e 2021e
Sales 1124 1089 1057
COGS -551 -526 -503
Gross profit 573 563 554
Other operating items -391 -384 -378
EBITDA 182 179 176
Depreciation on tangibles -24 -23 -22
Depreciation on intangibles -7 -6 -6
EBITA 151 150 149
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 151 150 149
Other financial items 0 0 0
Net financial items -6 -5 -5
Associated income 92 13 12
Other EO items 3 0 0
Pretax profit 240 157 156
Tax -55 -36 -36
Net profit 185 121 120
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 185 121 120
EPS 10,02 6,56 6,52
EPS Adj 9,87 6,56 6,52
Total extraordinary items after tax 2,8 0 0
Tax rate (%) -22,8 -22,8 -22,8
Gross margin (%) 51 51,7 52,4
EBITDA margin (%) 16,2 16,4 16,7
EBITA margin (%) 13,4 13,7 14,1
EBIT margin (%) 13,4 13,7 14,1
Pretax margin (%) 13,2 13,2 13,6
Net margin (%) 8,3 10 10,2
Growth rates Y/Y 2019 2020 2021
Sales growth (%) -1,9 -3,1 -2,9
EBITDA growth (%) 32,6 -1,7 -1,5
EBIT growth (%) 37,5 -0,8 -0,7
Net profit growth (%) 231,7 -34,6 -0,7
EPS growth (%) 240,4 -34,5 -0,7
Profitability 2019 2020 2021
ROE (%) 32,6 18,4 15,3
ROE Adj (%) 32,1 18,4 15,3
ROCE (%) 35,1 20,5 17,6
ROCE Adj(%) 34,7 20,5 17,6
ROIC (%) 27,5 27,5 26,5
ROIC Adj (%) 27,5 27,5 26,5
Adj earnings numbers 2019 2020 2021
EBITDA Adj 182 179 176
EBITDA Adj margin (%) 16,2 16,4 16,7
EBITA Adj 151 150 149
EBITA Adj margin (%) 13,4 13,7 14,1
EBIT Adj 151 150 149
EBIT Adj margin (%) 13,4 13,7 14,1
Pretax profit Adj 237 157 156
Net profit Adj 182 121 120
Net profit to shareholders Adj 182 121 120
Net Adj margin (%) 8,1 10 10,2
DKKm 2019 2020e 2021e
EBITDA 182 179 176
Net financial items -6 -5 -5
Paid tax -55 -36 -36
Non-cash items 0 0 0
Cash flow before change in WC 122 138 135
Change in WC 29 -14 1
Operating cash flow 151 124 136
CAPEX tangible fixed assets -25 -25 -24
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 125 99 112
Dividend paid 5 5 5
Share issues and buybacks 0 0 0
Other non cash items -45 2 0
Decrease in net IB debt 95 106 117
Balance Sheet (DKKm) 2019 2020 2021
Goodwill 39 39 39
Indefinite intangible assets 2 0 0
Definite intangible assets 12 5 -1
Tangible fixed assets 253 255 257
Other fixed assets 92 104 117
Fixed assets 397 404 412
Inventories 6 5 5
Receivables 92 92 90
Other current assets 0 0 0
Cash and liquid assets 425 531 648
Total assets 921 1032 1154
Shareholders equity 596 722 846
Minority 0 0 0
Total equity 596 722 846
Long-term debt 123 123 123
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 5 5 5
Other long-term liabilities 10 10 10
Short-term debt 11 11 11
Accounts payable 71 59 58
Other current liabilities 104 102 102
Total liabilities and equity 785 825 921
Net IB debt -291 -397 -514
Net IB debt excl. pension debt -291 -397 -514
Capital invested 410 430 438
Working capital 13 26 25
EV breakdown 2019 2020 2021
Market cap. diluted (m) 849 849 849
Net IB debt Adj -291 -397 -514
Market value of minority 0 0 0
Reversal of shares and participations -33 -46 -58
Reversal of conv. debt assumed equity 0 0 0
EV 525 406 277
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 128,7 111,6 96,7
Capital invested turnover (%) 265,3 259,4 243,7
Capital employed turnover (%) 160,6 137,4 115,2
Inventories / sales (%) 0,4 0,5 0,5
Customer advances / sales (%) 1,1 1,2 1,1
Payables / sales (%) 5,4 6 5,5
Working capital / sales (%) 2,4 1,8 2,4
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -48,9 -55 -60,7
Net debt / market cap (%) -42,8 -46,8 -60,5
Equity ratio (%) 64,7 69,9 73,3
Net IB debt adj. / equity (%) -48,9 -55 -60,7
Current ratio (%) 280,8 365,6 437,2
EBITDA / net interest (%) 3239 3285,2 3331,8
Net IB debt / EBITDA (%) -160,1 -222 -291,8
Interest cover (%) 2675,4 2737,9 2801,9
DKKm 2019 2020e 2021e
Shares outstanding adj. 18 18 18
Fully diluted shares Adj 18 18 18
EPS 10,02 6,56 6,52
Dividend per share Adj 4,5 4,5 4,5
EPS Adj 9,87 6,56 6,52
BVPS 32,29 39,1 45,86
BVPS Adj 29,55 36,7 43,78
Net IB debt / share -15,8 -21,5 -27,9
Share price 36,93 46 46
Market cap. (m) 682 849 849
Valuation 2019 2020 2021
P/E 4,6 7 7,1
EV/sales 0,47 0,37 0,26
EV/EBITDA 2,9 2,3 1,6
EV/EBITA 3,5 2,7 1,9
EV/EBIT 3,5 2,7 1,9
Dividend yield (%) 9,8 9,8 9,8
FCF yield (%) 14,8 11,7 13,2
P/BVPS 1,42 1,18 1
P/BVPS Adj 1,56 1,25 1,05
P/E Adj 4,7 7 7,1
EV/EBITDA Adj 2,9 2,3 1,6
EV/EBITA Adj 3,5 2,7 1,9
EV/EBIT Adj 3,5 2,7 1,9
EV/cap. employed 0,7 0,5 0,3
Investment ratios 2019 2020 2021
Capex / sales 2,3 2,3 2,3
Capex / depreciation 81,4 83,9 86,8
Capex tangibles / tangible fixed assets 10 9,6 9,3
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 58,2 120,7 -850,9
Depreciation on tangibles / tangibles 9,6 9 8,4

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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 % 30 Sep 2019
BIL Danmark 1.4 % 1.4 % 31 Dec 2019
Mads Dahl Andersen 1.1 % 1.1 % 30 Aug 2019
Fundamental Fondsmæglerselskab A/S 0.9 % 0.9 % 30 Sep 2019
C WorldWide Asset Management 0.7 % 0.7 % 31 Dec 2019
MP Pension 0.6 % 0.6 % 31 Jul 2019
Sparinvest 0.4 % 0.4 % 30 Nov 2019
Kåre Stausø Wigh 0.4 % 0.4 % 31 Dec 2018
Source: Holdings by Modular Finance AB