8 May 2014
Company announcement no 05-14
Execution of initiatives launched progresses as planned. Revenue and profit for Q1 2014 are as anticipated, and earnings expectations for FY2014 remain unchanged.
- Group revenue for Q1 2014 is DKK 258.3 million and EBIT stands at DKK 11.7 million. This performance is as anticipated.
- Group EBITDA for Q1 2014 is DKK 23.9 million.
- Total earnings expectations remain unchanged.
- Implementation of No Ads+ and other strategic initiatives progress as planned.
- The Group’s net interest-bearing cash position is DKK 2.0 million, and capital resources come to DKK 212.2 million at 31 March 2014.
The Group’s revenue and financial results for Q1 2014 were largely on a par with Q1 2013. FK Distribution’s revenue declined by 10% as expected, primarily due to structural market developments, but also due to continued unfair competition represented by Post Danmark, which cross-subsidises its prices. Newspaper activities, however, helped to considerably up revenue for Q1 2014 compared to Q1 2013, mainly due to the acquisition in autumn 2013 of eight local newspapers in the Copenhagen area. Further, revenue for Q1 2014 is negatively influenced by Easter of 2013 falling in Q1 whereas Easter of 2014 fell in Q2.
Group EBIT for Q1 2014 is DKK 11.7 million, which is DKK 4.1 million down on Q1 2013. This is mainly due to the financial results for 2014 including a further DKK 3 million in amortisation of intangible assets relating to the acquisition of eight local newspapers based in the Copenhagen area. Further, Easter affected revenue negatively for 2014 as referred to above.
FK Distribution continues to implement No Ads+ at www.minetilbud.dk. Having opted for No Ads+, consumers only receive printed matter of their choice. The post markets are changing fast. FK Distribution develops solutions for future post markets, and therefore the company is in the process of transforming its business into a high-tech distribution business offering a product range catering for future needs.
Except for the island of Bornholm, the No Ads+ product is offered to consumers all over Denmark. In the week of 28 April 2014, a marketing campaign was launched with a view to raising awareness about the product. In addition, FK Distribution has extended its activities by offering addressed and segmented distribution of printed matter. Work is progressing as planned, and the first contracts have been signed with customers. The third most important measure taken by FK Distribution is the refinement of its digital services. Minetilbud.dk has been launched as a replacement for Forum.dk and MinReklame.dk. Also, an updated web version with new features as well as relaunched apps for IOS and Android are being tested.
BEKEY continues rollout of the electronic access control at the municipal market. Q1 2014 saw fewer municipal tenders than expected. Not only Danish municipalities use the BEKEY system, it is also being used in Malmö, Sweden. The process of preparing the product for the private market is proceeding as planned.
Søndagsavisen and the eight Copenhagen mid-weeklies acquired realised the synergies planned for. At the beginning of 2014, the market for ads was weaker than expected. Revenue from the Group's total newspaper activities, however, grew considerably as a result of the acquisition of eight Copenhagen newspapers. The planned operating and cost synergies plus enhanced efficiency and sales optimisation measures were implemented according to plan.
Ofir’s sale of the Emply recruitment system satisfied expectations. One of Ofir’s strategic focus areas, the electronic Emply recruitment system, developed positively, landing the expected number of contracts and realising very stable and satisfactory operations. The sale of the other key product, namely ads for media in Ofir's job universe selected through the Ofir media selection page, developed slightly below expectations. The planned cost reduction measures were implemented as predicted.
The implementation of Byggestart.dk’s revised concept progressed as planned in Q1-2014. However, there are challenges with scalability of the business. During the second quarter of 2014, Byggestart must show increased volume and the desired revenue growth.
BoligPortal.dk has maintained its leading position in the market for advertising rental housing. The rental housing market developed as expected in Q1 2014, and BoligPortal.dk increased revenue by two-digit growth rates. Growth in the new market place for self-sale of co-operative and owner-occupied dwellings, however, is lower than expected.
Expectations for Group revenue and performance for FY2014 remain unchanged Overall, the Group’s revenue is expected to still range from DKK 1,060 million to DKK 1,110 million for 2014. Group EBIT for 2014 is expected to remain in the range of DKK 50 million to DKK 75 million for 2014.
Please contact Lars Nymann Andersen, CEO, or Kåre Wigh, CFO, at +45 39 57 70 00 for further information.
The Interim Management Statement in its full is attached.
This Interim Management Statement for Q1 2014 has been prepared in Danish and English. The Danish text shall be the governing text for all purposes and in case of any discrepancy the Danish wording shall be applicable.
