North Media: ABGSC’s investor day seminar feedback - ABG

BoligPortal’s new product offering set to release potential
Remains on the lookout to acquire new IT companies
Capital structure remains solid, room for distributions

Today’s ABGSC seminar saw North Media represented by the group executive director/CFO and CEO of North Media Online. The company is 6 months into its 2021-23 strategy and has already achieved several key strategic milestones. These include increasing the product mix in FK Distribution by expanding the partnership with Deutsche Post and further explore the potential to pack leaflets for 2m German households (albeit the limited revenue impact thus far). This remains a small market for now, but it is an important milestone in terms of North Media’s ability to engage new markets. The Digital Services segment has rolled out a number of new products, most notably in BoligPortal where a new SaaS platform has increased its revenue streams from 1 to 4. The company now provides a full ‘moving tool’ that includes partnerships with electrical (EWII), insurance (Tryg) and internet (Telenor) companies, making it convenient to rent or lease an apartment. Ofir continues to experience high growth in the Danish job market and is strengthening its data capabilities for job providers. Bekey has faced some phasing delays for its HomeCare market and COVID-19 reduced the speed of the digital locks’ installation and roll-out in the Copenhagen Stairwell segment.

North Media targets a dividend of DKK 5/share for 2021-24 if it achieves its strategic ambitions. We believe this is low, given that the company plans to increase its earnings by at least 3% per year during this period and has only earmarked DKK 200m of the DKK 800m net cash position (which is invested in a diversified portfolio of equities). The DKK 200m selected for M&A will target companies that complement the current market offering of high-volume digital services in the Nordic area, although it appears there are no companies on the immediate horizon.

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