North Media: Q2e figures likely back within guidance range - ABG

- Q2e: sales +41% y-o-y (0% excl. SDR), ~9% EBIT margin
- Lifting '24e EPS by 41% on a DKK 135m Q2e investment gain...
- ...takes the net cash position to 809m: FVR of DKK 58-97

Q2e: sales +41% y-o-y, ~9% EBIT margin
We forecast Q2 group revenues of DKK 335m, up 41% y-o-y (but flat if we exclude SDR, which was consolidated starting Q1'24). Our Q2 EBIT estimate of DKK 30m equates to a margin of ~9%, down 6pp y-o-y (mostly driven by the margin-dilutive SDR). Following a DKK 156m unrealised investment gain in Q1, we estimate another solid gain of DKK 135m in Q2e (equivalent to a quarterly return of 17%), driven mostly by Novo Nordisk and NVIDIA.

'24e-'26e EBIT down 3-1%, EPS up on Q2e investment gain
We make limited estimate revisions in '25e-'26e. For '24e, we lower '24e EBIT by 3% but raise EPS by 41% on the investment gain. We now forecast '24e EBIT of DKK 111m, around the mid-point of the DKK 95m-125m guidance, for a margin of ~8%. Paper prices have remained roughly flat lately, down a mere 1% q-o-q and still 23% above the average in '03-'21, leading us to continue to expect flattish growth in FK (~0% in Q2e and -1% in '24e). For SDR, we will be looking for any concrete follow-up comments about synergies after hearing in Q1 that the company has taken the first steps in exploiting such, including the possibility of shared production in Denmark and automated packaging in Sweden. As of now, however, we consider it unlikely that synergies will be visible in '24e. Turning to North Media's other segments, we highlight tough growth comps in BoligPortal, forecasting 4% y-o-y growth in Q2e (noting a roughly flat development in listings) and an EBIT margin down 8pp y-o-y. We also do not expect to hear many positives from Ofir and BeKey, and expect ~0% y-o-y growth and substantial negative margins in both.

FVR of DKK 58-97 (57-96)
We lift our FVR to DKK 58-97, with the substantial investment gain in Q2e more than compensating for our slightly lower estimates in the core business.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/north-media/Equity-research/2024/7/north-media---q2e-figures-likely-back-within-guidance-range/