Annual Report 2016 Important strategic measures

Important strategic measures taken in 2016 are beginning to take effect and will improve earnings in the years ahead.

Company announcement no 01-17

9 February 2017

The media market continued its rapid development driven by increasing competition and demand for on-demand solutions that put pressure on the business models of conventional media.

For North Media, 2016 was a year marked by substantial changes, adjustments and investments to ensure satisfactory future returns in an increasingly digitalised market.

“The many investments and massive adjustments we do are necessary if we are to ensure that our activities remain commercially relevant and produce earnings in future. Developments in 2016 demonstrate that we have the patience needed to work long term with the right business model, and indeed have the courage to carry through substantial changes and develop new business models when this is the right thing to do. We will continue along this road in 2017 and strengthen the business segments. We expect this to prompt a halt in 2017 to the Group’s earnings decline,” says Kåre Wigh, Group Executive Director & CFO of North Media.

In terms of earnings, 2016 was not a satisfactory year. The Group’s total revenue went down by 13% to DKK 881 million while EBIT before special items was a loss of DKK 26 million. In view of the market contraction and the loss of market share, FK Distribution performed satisfactorily. Growth and performance of both North Media Online and BEKEY were lower than expected. Finally, performance of North Media Aviser was of course affected by the heavy reorganisation measures in this business segment during the year.

”In 2016, we implemented a new group structure at North Media under which the decision-making power has been allocated to our four business segments. This has made us more agile and put us in a better position to rapidly evaluate and respond to the development opportunities that each business segment represents. One of the results has been a massive restructuring of North Media Aviser where much of Søndagsavisen was sold off and focus on the Copenhagen editions was intensified by investing in an additional five local newspapers. At the same time, we have reduced our costs considerably,” says Kåre Wigh.

For further information, please contact:

Group Executive Director & CFO Kåre Wigh, mobile + 45 25 65 21 45 Chief Executive Officer of FK Distribution Mads Dahl Andersen, mobile +45 20 42 09 85 Chief Executive Officer of North Media Aviser Gorm Wesing Flyvholm, mobile +45 25 45 67 74 Chief Executive Officer of North Media Online Henrik Løvig, mobile +45 61 79 94 31 Chief Executive Officer of BEKEY Søren Holmblad, mobile +45 25 65 21 30.

Yours faithfully North Media A/S

Kåre Wigh Group Executive Director & CFO