North Media A/S : Interim Management Statement for Q1 2016

North Media A/S
Company Announcement

Interim Management Statement for Q1 2016

Company announcement no 05-16

North Media continues to invest in the development and transformation of each business segment to cater for the new advertising media habits of retailers and consumers.

'The activities of North Media have largely developed as expected in Q1 2016. The progress of the NoAds+ concept continues, although FK Distribution's revenue development is affected by the loss of Coop as a customer effective from 1 January 2016. The newspaper operations maintain their market position, and at Online and BEKEY focus remains on optimising their growth assumptions. We are highly affected by the underlying structural changes in the media market, which mean that the pressure on revenue and earnings in our traditional business segments continues. We will continue to give full prominence to the development of our business segments in order to unlock their individual potential by developing both new and existing business concepts,' says Kåre Wigh, Group Executive Director & CFO of North Media A/S.

Group financial highlights from Q1 2016

• Group revenue reached DKK 216.3 million (2015: DKK 250.5 million), which is 14% down on last year.
• EBITDA amounted to DKK 0.1 million (2015: DKK 0.2 million).
• EBIT before special items was a loss of DKK 9.9 million (2015: a loss of DKK 11.6 million).
• The Q1 2016 return on securities was negative by DKK 17.3 million, or a negative 9.4%. The Group's total portfolio of securities amounted to DKK 185.4 million at 31 March 2016.
• The Group's net interest-bearing cash position was DKK 98.7 million at the balance sheet date, and the capital resources amounted to DKK 267.0 million. Consequently, the Group's financial resources remain strong.

Outlook for 2016

The financial, strategic and executional development of the Group's activities in Q1 2016 support the course charted by Management and on which the performance expectations for the financial year 2016 are based.

The revenue and performance development for North Media Newspaper and North Media Online in Q1 2016 was weaker than anticipated.

As stated in Company announcement no 04-16 of 2 May 2016 (subsequent event), North Media A/S has signed an agreement for the sale of some editions of Søndagsavisen and the equity interest in A/S Vestsjællandske Distriktsblade.

Based on this, group revenue is expected to range between DKK 865 million and DKK 915 million and EBIT before special items to range from a negative DKK 55 million to a negative DKK 25 million for the financial year 2016. To this should be added a net profit from above mentioned sale of approx DKK 40 million which will be included in the financial statements partly as profit from associates and partly as a special item.

FK Distribution in Q1 2016

• Revenue was DKK 137.3 million (2015: DKK 164.9 million, down 17%. Besides continued strong price competition, revenue development is affected by the loss of Coop as a customer effective from 1 January 2016.
• EBITDA amounted to DKK 7.7 million (2015: DKK 5.4 million).
• EBIT reached DKK 3.6 million (2015: a negative DKK 0.2 million), thus producing a profit margin of 2.6% (2015: a negative 0.1%).
• At 31 March 2016, 583,000 households had signed up for NoAds+. The level of sign-ups is now lower, and marketing efforts have been reduced considerably.

North Media Newspaper in Q1 2016

• Revenue was DKK 49.5 million (2015: DKK 56.4 million), down 12%.
• EBITDA was negative by DKK 5.7 million (2015: negative by DKK 0.3 million).
• EBIT stood at a negative DKK 8.8 million (2015: a negative DKK 3.7 million).
• The print ads market has developed worse than expected. It is estimated that North Media Newspaper's negative revenue development is consistent with market developments and that its market position has therefore been maintained. In view of this, revenue and performance development has been weaker than expected.

North Media Online in Q1 2016

• Online's total revenue stood at DKK 24.2 million (2015: DKK 24.6 million).
• EBITDA was negative by DKK 1.9 million (2015: negative by DKK 3.0 million).
• EBIT stood at a negative DKK 2.3 million (2015: a negative DKK 3.4 million).
• Revenue from online activities developed more weakly in Q1 2016 than expected, which is not satisfactory. The reasons for this lack of growth are that the implementation of the new price and product mix at BoligPortal did not proceed as fast as expected and that the number of customers opting out of håndværker.dk has been higher than anticipated.

BEKEY in Q1 2016

• Revenue was DKK 5.3 million (2015: DKK 4.6 million), up 15%.
• EBITDA was negative by DKK 3.7 million (2015: negative by DKK 4.2 million).
• EBIT stood at a negative DKK 3.8 million (2015: a negative DKK 4.3 million).
• Sales activities are in progress and tests have been carried out in Norway, Finland, the Netherlands and the USA.

For further details, please contact Group Executive Director & CFO Kåre Wigh at +45 25 65 21 45.

The Interim Management Statement for Q1 2016 in its full is attached.

This Interim Management Statement for Q1 2016 has been prepared in Danish and English. The Danish text shall be the governing text for all purposes and in case of any discrepancy the Danish wording shall be applicable.