Interim Report 2016

| Source: North Media A/S North Media A/S

18 August 2016

Company announcement no. 09-16

Continued optimisation by acquiring, divesting and restructuring activities. Earnings expectations for 2016 upheld.

”In H1 2016 and particularly in Q2 2016, North Media’s focus has been on optimising its business segments. This is seen most clearly at North Media newspapers where we have sold off some of the portfolio and taken major restructuring measures to intensify sales efforts and reduce costs. Also, at North Media Online, we have invested in and acquired 20% of the shares in Lix Technologies ApS, which is to help create the platform of the future for digital learning. And lastly we have continued the progress of NoAds+ and stabilised FK Distribution's revenue. Developments are a mark of the effect of the new governance structure under which each business segment is developed through a direct and targeted strategic effort. This has made us more agile and increased our manoeuvrability that is key to developing the business concepts and actualising the opportunities which are to ensure North Media’s growth and earnings capacity in the years ahead,” says Kåre Wigh, Group Executive Director & CFO of North Media A/S.

Group financial highlights from H1 2016

  • Group revenue reached DKK 430.9 million (2015: DKK 511.6 million), which is 16% down on last year.
  • EBITDA was negative by DKK 5.5 million (2015: positive by DKK 20.3 million).
  • EBIT before special items was a loss of DKK 25.0 million (2015: a loss of DKK 3.5 million).
  • The H1 2016 return on securities was negative by DKK 7.4 million, or 4.5%. The Group’s total portfolio of securities amounted to DKK 214.4 million at 30 June 2016.
  • The Group’s net interest-bearing cash position was DKK 108.7 million at the balance sheet date, and its capital resources amounted to DKK 288.3 million. Consequently, the Group's financial resources remain strong.

Outlook for 2016

The revenue expectations range for the Group has been reduced to now be between DKK 860 million and DKK 895 million. EBIT before special items is expected to remain unchanged between a negative DKK 25 million and a negative DKK 55 million.

Because of the substantial strategic and operational measures taken in H1 2016, the net amount of special items from divested newspapers and restructuring of North Media Aviser A/S is expected to be an income in the order of DKK 7.0 million for the financial year.

The profit earned from divesting the Group’s stake in A/S Vestsjællandske Distriktsblade totals DKK 27.2 million and is recognised as a share of profit/loss from associates.

FK Distribution – H1 2016

  • Revenue was DKK 274.5 million (2015: DKK 340.5 million), down 19%. Besides continued strong price competition, revenue development is affected by the loss of Coop as a customer effective from 1 January 2016.
  • EBITDA was DKK 11.9 million (2015: DKK 29.8 million).
  • EBIT reached DKK 4.2 million (2015: DKK 18.2 million), thus producing a profit margin of 1.5% (2015: 5.3%).
  • At 30 June 2016, 644,000 households had signed up for NoAds+. The number of NoAds+ sign-ups soared during the quarter despite reduced marketing efforts.

North Media newspapers - H1 2016

  • Revenue was DKK 97.6 million (2015: DKK 111.7 million), down 13%.
  • EBITDA was negative by DKK 12.6 million (2015: a negative DKK 1.3 million).
  • EBIT stood at a negative DKK 18.9 million (2015: a negative DKK 8.1 million).
  • The print ads market has developed worse than expected. In view of this, revenue and performance development has been weaker than expected.
  • The divestment of six local editions of Søndagsavisen and the stake in A/S Vestsjællandske Distriktsblade as well as the restructuring of Søndagsavisen are to help provide a better platform for creating value. Gorm Wesing Flyvholm will take up the position as new CEO of North Media Avi­ser A/S from 1 September 2016.

North Media Online - H1 2016

  • Online’s total revenue stood at DKK 48.2 million (2015: DKK 48.7 million).
  • EBITDA was negative by DKK 4.3 million (2015: negative by DKK 3.3 million).
  • EBIT stood at a negative DKK 5.0 million (2015: a negative DKK 4.1 million).
  • DKK 18 million invested in Lix Technologies ApS.
  • Overall, revenue development was weaker than expected because of low growth at BoligPortal and more customers opting out of håndværker.dk than anticipated.

BEKEY – H1 2016

  • Revenue was DKK 10.6 million (2015: DKK 10.7 million, down 1%.
  • EBITDA was negative by DKK 8.6 million (2015: negative by DKK 9.0 million).
  • EBIT stood at a negative DKK 8.7 million (2015: a negative DKK 9.1 million).
  • The first shipment to the USA was made in July. BEKEY won procurement rounds on electronic lock systems for the municipalities of both Malmö and Jönköping in Sweden, and is in close dialogue with many other foreign local governments.

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

The Interim Report 2016 in its full is attached.

This Interim Report 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.

Attachments

Interim Report 2016 UK.pdf