North Media - Launching strategic ambition targets for 2023
New 2022-23 ambitions with a focus on online growth… …and acquisitions for upwards of DKK 200m Following our CC, we reiterate FVR DKK 75-105/share 2021e will be back-end loaded Today we hosted a conference call with the group executive director, the CEO of FK Distribution and CEO of NM Online. In light of its guidance for 2021e and a new strategic plan with targeted ambitions for ’22-’23e, we raise our sales estimates to ~3% (-1%) given the 20% growth ambition in the smaller Digital Services businesses. However, we lower our expected earnings in FK Distribution by 1-3%, offsetting the positive online revisions. For ’23e, North Media now targets 3% organic growth, an EBIT margin of ~24%, investments of up to DKK 200m and DPS of DKK 5.
The firm said that it plans to acquire up to DKK 200m worth of digital services companies within its field of expertise, including scaling current operations in international markets or other services that require high volumes, but price and fit are essential. North Media has capital resources of DKK 739m (excluding the upcoming DKK 100m dividend). All of FK’s companies are seeking ways to expand FK Distribution is seeking new ways to utilise the expertise gained from collaborations to work on direct mail services for e.g.
YouSee and potentially magazines. It sees an ESG trend towards paper packaging (vs. plastic) and has begun to collaborate with Deutsche Post.
It also hopes to engage in similar relationships over the next few years. During 2020, supermarkets performed well in light of the lockdowns, as did click-and-collect retailers, where leaflets won a share of marketing spend. The company is currently analysing ways to expand its service primarily in Denmark, or possibly within the Nordics.
Following years of competition with PostNord and after the solid price increases seen in recent years (~2.5% in 2020), FK now believes that a fair market price has been established, therefore we can expect only minor price adjustments....