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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 1130 1012 994
Sales growth (%) -1,3 -10,5 -1,7
EBITDA 191 186 197
EBITDA margin (%) 16,9 18,4 19,8
EBIT adj 160 162 174
EBIT adj margin (%) 14,2 16 17,5
Pretax profit 266 152 174
EPS rep 11,02 6,25 7,55
EPS growth (%) 192,2 -43,3 20,9
EPS adj 4,41 6,59 7
DPS 2 4 4
EV/EBITDA (x) 2,3 2,9 2
EV/EBIT adj (x) 2,8 3,4 2,3
P/E (x) 4 9,4 7,8
P/E adj (x) 10,1 8,9 8,4
EV/sales (x) 0,4 0,5 0,4
FCF yield (%) 14,7 12,7 13,4
Dividend yield (%) 4,5 6,8 6,8
Net IB debt/EBITDA -1,8 -2,6 -3,3
DKKm 2019 2020e 2021e
Sales 1130 1012 994
COGS -541 -482 -455
Gross profit 589 529 539
Other operating items -398 -343 -342
EBITDA 191 186 197
Depreciation on tangibles -29 -23 -22
Depreciation on intangibles -2 -1 -1
EBITA 160 162 174
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 160 162 174
Other financial items 0 0 0
Net financial items -12 -5 -5
Associated income -5 -5 -5
Other EO items 122 0 10
Pretax profit 266 152 174
Tax -62 -33 -38
Net profit 204 118 136
Minority interest 0 0 0
Net profit discontinued 0 -6 0
Net profit to shareholders 204 112 136
EPS 11,02 6,25 7,55
EPS Adj 4,41 6,59 7
Total extraordinary items after tax 122,1 0 9,9
Tax rate (%) -23,4 -22 -22
Gross margin (%) 52,1 52,3 54,2
EBITDA margin (%) 16,9 18,4 19,8
EBITA margin (%) 14,2 16 17,5
EBIT margin (%) 14,2 16 17,5
Pretax margin (%) 24 15,5 18
Net margin (%) 18,5 12,2 14,1
Growth rates Y/Y 2019 2020 2021
Sales growth (%) -1,3 -10,5 -1,7
EBITDA growth (%) 38,9 -2,3 5,9
EBIT growth (%) 46,1 0,9 7,5
Net profit growth (%) 184,8 -41,9 14,6
EPS growth (%) 192,2 -43,3 20,9
Profitability 2019 2020 2021
ROE (%) 33,7 15,4 15,8
ROE Adj (%) 13,5 16,2 14,6
ROCE (%) 37,7 18,2 18,1
ROCE Adj(%) 21,2 18,2 17,1
ROIC (%) 35,8 38,6 44,3
ROIC Adj (%) 35,8 38,6 44,3
Adj earnings numbers 2019 2020 2021
EBITDA Adj 191 186 197
EBITDA Adj margin (%) 16,9 18,4 19,8
EBITA Adj 160 162 174
EBITA Adj margin (%) 14,2 16 17,5
EBIT Adj 160 162 174
EBIT Adj margin (%) 14,2 16 17,5
Pretax profit Adj 144 152 164
Net profit Adj 82 118 126
Net profit to shareholders Adj 82 118 126
Net Adj margin (%) 7,6 12,2 13,1
DKKm 2019 2020e 2021e
EBITDA 191 186 197
Net financial items -12 -5 -5
Paid tax -62 -33 -38
Non-cash items 0 0 0
Cash flow before change in WC 117 148 154
Change in WC 2 5 1
Operating cash flow 130 152 155
CAPEX tangible fixed assets -12 -12 -12
CAPEX intangible fixed assets 1 0 0
Acquisitions and disposals 2 -5 0
Free cash flow 121 135 142
Dividend paid 28 5 5
Share issues and buybacks 1 0 0
Other non cash items -7 2 10
Decrease in net IB debt 155 141 157
Balance Sheet (DKKm) 2019 2020 2021
Goodwill 39 39 39
Indefinite intangible assets 3 0 0
Definite intangible assets 11 10 9
Tangible fixed assets 250 239 230
Other fixed assets 86 81 76
Fixed assets 389 369 353
Inventories 5 4 4
Receivables 89 84 83
Other current assets 0 0 0
Cash and liquid assets 485 626 783
Total assets 968 1083 1222
Shareholders equity 671 788 928
Minority 0 0 0
Total equity 671 788 928
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 1083 1222
Net IB debt -351 -492 -649
Net IB debt excl. pension debt -351 -492 -649
Capital invested 339 314 298
Working capital -50 -55 -55
EV breakdown 2019 2020 2021
Market cap. diluted (m) 821 1059 1059
Net IB debt Adj -351 -492 -649
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 444 546 394
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 126 98,6 86,3
Capital invested turnover (%) 329,3 309,5 324,8
Capital employed turnover (%) 153,3 117,2 100,3
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 -5,2 -5,5
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -52,3 -62,5 -69,9
Net debt / market cap (%) -51,5 -46,5 -61,3
Equity ratio (%) 69,4 72,7 75,9
Net IB debt adj. / equity (%) -52,3 -62,5 -69,9
Current ratio (%) 373,7 465,1 569,5
EBITDA / net interest (%) 1643,1 3681,1 3965,3
Net IB debt / EBITDA (%) -184,2 -264,4 -329,3
Interest cover (%) 1318,9 3045,4 3328,8
DKKm 2019 2020e 2021e
Shares outstanding adj. 18 18 18
Fully diluted shares Adj 18 18 18
EPS 11,02 6,25 7,55
Dividend per share Adj 2 4 4
EPS Adj 4,41 6,59 7
BVPS 36,37 43,88 51,68
BVPS Adj 33,64 41,15 49,03
Net IB debt / share -19 -27,4 -36,1
Share price 36,93 59 59
Market cap. (m) 682 1059 1059
Valuation 2019 2020 2021
P/E 4 9,4 7,8
EV/sales 0,39 0,54 0,4
EV/EBITDA 2,3 2,9 2
EV/EBITA 2,8 3,4 2,3
EV/EBIT 2,8 3,4 2,3
Dividend yield (%) 4,5 6,8 6,8
FCF yield (%) 14,7 12,7 13,4
P/BVPS 1,22 1,34 1,14
P/BVPS Adj 1,32 1,43 1,2
P/E Adj 10,1 8,9 8,4
EV/EBITDA Adj 2,3 2,9 2
EV/EBITA Adj 2,8 3,4 2,3
EV/EBIT Adj 2,8 3,4 2,3
EV/cap. employed 0,6 0,6 0,4
Investment ratios 2019 2020 2021
Capex / sales 1 1,2 1,2
Capex / depreciation 37 50,9 52,4
Capex tangibles / tangible fixed assets 4,9 5,2 5,3
Capex intangibles / definite intangibles -8,9 0 0
Depreciation on intangibles / definite intangibles 15,2 14 15,4
Depreciation on tangibles / tangibles 11,4 9,6 9,6

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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 Mar 2020
Mads Dahl Andersen 1.1 % 1.1 % 31 Dec 2019
Gudme Raaschou Asset Management 1.1 % 1.1 % 31 Mar 2020
C WorldWide Asset Management 0.6 % 0.6 % 31 Mar 2020
MP Pension 0.6 % 0.6 % 29 Feb 2020
Kåre Stausø Wigh 0.4 % 0.4 % 31 Dec 2019
BIL Danmark 0.3 % 0.3 % 30 Jun 2020
Source: Holdings by Modular Finance AB