North Media lowers full-year 2022 guidance FK Distribution strengthened by greater effect of leaflets, but market under pressure due to rising prices of paper, and higher salaries and expenses for our more than 10,000 deliverers

Announcement no. 20-2022

2 November 2022

While North Media’s H1 2022 results were in line with expectations, the Group’s Q3 performance was adversely affected by rising inflation, reduced business activity in society and higher salaries and expenses for our more than 10,000 deliverers. FK Distribution’s leaflet volumes fell by more than anticipated in September. In addition, the order inflow from small customers without an annual agreement is currently below the expected level for the fourth quarter.

Inflation and, not least, the surge in energy prices have driven up consumer demand for leaflets, both paper-based and digital, from FK Distribution and Minetilbud. Our customers are experiencing increasing effects of leaflets but are exposed to rising prices of paper.

In light of the situation, North Media lowers its full-year 2022 guidance:

• Revenue is now expected in the DKK 995-1,010m range
  (previous guidance: DKK 1,015-1,040m)
• EBIT is now expected in the DKK 190-200m range
  (previous guidance: DKK 195-205m)

North Media CEO Lasse Brodt commented on the developments:
“We are lowering our FY 2022 guidance, because FK Distribution’s customers are distributing slightly reduced leaflet volumes in the second half of 2022, mainly because they are struggling with severe price increases on paper. However, we are confident that FK Distribution continues to build on a strong foundation. Leaflets are having a greater effect and printed matter is gaining strength relative to other media channels in the current economic environment. We expect leaflet volumes to return to normal as paper prices gradually normalise.”

North Media retains its focus on long-term value creation and on having strong financial resources, enabling the Group to freely navigate and both withstand negative and challenging market situations as well as capitalise on opportunities that may arise in such markets.

The Q3 2022 interim report will be released later today, 2 November 2022.

Additional information

Lasse Brodt, CEO, mobile +45 20 24 32 92

Kåre Wigh, CFO, mobile +45 25 65 21 45.

This document is an unofficial translation of the Danish original. In the event of any inconsistencies, the Danish version shall apply.