NHST Media Group - Quarterly Report 4th quarter 2019

Initiatives to position NHST Media Group for improved profitability continued in the fourth quarter of 2019. Operations were impacted by challenging and continuously changing market conditions, with increasing competition. The Group sees lower demand for paper based products and declining advertising revenues for traditional media. Meanwhile, cost-cutting efforts in combination with technology and product development are yielding results in the form of a positive underlying development in the Group’s profitability during the quarter.

- 2019 has been a challenging year for NHST Media Group. In response to significant market changes and growing competition, we have implemented measures to improve profitability in all parts of the organization, in parallel with investments in competence and technology development to maintain our competitive position. I’m pleased to see that these initiatives are yielding results through increased income from digital platforms and a reduced cost base, says Hege Yli Melhus Ask, CEO of NHST Media Group.

Among the activities NHST Media Group has initiated to meet challenging market conditions are improvement of the customer experience for digital platforms, strengthened management in several publications and a reduction of structural costs.

In the fourth quarter, a major reorganization was carried out in Dagens Næringsliv which aims to strengthen the prioritization of selected user segments and facilitate better utilization of resources. As communicated in the Group's report for the third quarter, a staffing reduction of 25 full-time equivalents (FTEs) was implemented to reduce the cost level as a result of a significant drop in newspaper advertising revenues. During the fourth quarter, Morgenbladet completed its manning reductions which were expensed in the third quarter. Reorganizations have also been carried out in the other segments.

The media companies' resources in the field of data analysis have been consolidated into a shared team at group level, to ensure better use of their specialist skills. The team became fully operational in the fourth quarter and mainly works with analysis of user behavior and optimization of products and services adapted to user needs. This will lead to better and more customized, individualized products and services for customers, lower customer churn and improved acquisition of new customers.

The Group achieved revenues of NOK 318.3 million for the fourth quarter of 2019, compared to NOK 331.0 million for the same period in 2018. 44.4 per cent of operating revenues were from digital subscriptions and digital advertisements. This is an increase from a 39.7 per cent share for the fourth quarter of 2018 and from 43.6 per cent for the third quarter of 2019. The Group reported an operating profit before depreciation (EBITDA) of NOK 5.3 million for the quarter, compared to NOK 11.4 million for the corresponding period in 2018. Non-recurring restructuring costs were NOK 21.6 million for the quarter and EBITDA before non-recurring items shows an increase of NOK 22.6 million compared to the fourth quarter of 2018. This is an improvement of the EBITDA margin by 6 percentage points.