Growth opportunities – from paper to electronic media
Trond Berger CFO
DnB Media Summit 2005
2DnB Media Summit
Strong Position in Old and New Economy
Strong BrandsContentKnow-howMarketing CapacityStrong Cash FlowExecution Skills
New BusinessOpportunities
Newspapers
TV-production
Publishing
Film Rights
Internet (www)
Mobile Internet
Broadband
Build on core activities for continuous development
Off-line Positions
Online Platforms
3DnB Media Summit
Strategy
Previous announced strategy to be continued – financials
and market position enables increased focus on growth
Growth through both acquisitions and organic growth
• The Group’s strong position and competitive advantages as a basis
• Acquisitions complementing and strengthening already existing positions
• New media and free newspaper engagements
Financial targets unchanged
4DnB Media Summit
Strategic repositioning
2004
Pro
du
ct s
cop
e
Geographic focus area
Newspapers
Elektronic
media
Norway Scandinavia Europe
1995
5DnB Media Summit
Loss of younger
readers and
migration from
paper to online
Classifieds from
paper to the net
The mobile phone
as a new media
channel
Schibsted’s strategic response:
Four fundamental trends which influence the media industry
Search and
directories will
be important
categories
online
6DnB Media Summit
Classifieds migrate to the net – regional newspaper business model is changingRevenues from classified advertising, NOK million
2001 2002 2003 200420002001 2002 2003 20042000
CAGR: -13%
CAGR: 45%
7DnB Media Summit
Migration of classified advertising – Real estateNumber of ads, 12-month rolling average
0
1000
2000
3000
4000
5000
6000
7000
8000
2001 2002 2003 2004 2005
8DnB Media Summit
Migration of classified advertising – RecruitmentNumber of ads, 12-month rolling average
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2001 2002 2003 2004 2005
9DnB Media Summit
-30
0
30
60
90
120
150
180
210
2000 2001 2002 2003 2004 LTM
Revenue
Operating profit
Financials 2000 – Q1 2005
-42% -10%
40%
NOK million
24%
33%
*
*As of 31 March 2005
43%
10DnB Media Summit
Readership on- and offline
96/97 97/98 98/99 99/00 00/01
1,3911,481 1,522
1,403
1,655
Source:Gallup – 96/97 represents Forbruker & Media 02/97
01/02 03/04
1,571
1,392
Only online versionBothOnly paper version
Daily readership, thousands
2004 02/03
1,7541,696
11DnB Media Summit
Operating profit (loss) – Online newspapers
(NOK million) 2005 2004 2004
Advertising revenues 21,9 14,2 60,5
Other revenues 1,4 1,3 5,8
Total operating revenues 23,2 15,5 66,3
Operating expenses (15,4) (10,9) (47,1)
Operating profit (loss) 7,8 4,6 19,2
As of March 31
(NOK million) 2005 2004 2004
Advertising revenues 20,6 13,4 71,2
Other revenues 8,9 8,3 34,1
Total operating revenues 29,5 21,7 105,3
Operating expenses (22,9) (19,6) (91,2)
Operating profit (loss) 6,6 2,1 14,1
As of March 31
.se
12DnB Media Summit
Operations overview
Online newspaper and development of new content services
Online classified portal for consumers
Online classified portal for second hand car dealers
Online number information service, direct marketing and number information
13DnB Media Summit
Strong growth and new initiatives
• Operating profit for Aftonbladet Nya Medier of SEK 7 million (SEK 2 million)
• Agreements to export ”Viktklubben” to several European markets
• Focus on development of new services – e.g. IPTV
• Continued strong growth for Blocket
• New record with 1.2 million unique visitors in March
• Number of ads increased by 43% y-on-y in Q1
• Hitta.se had 1.1 million unique monthly visitors in January
• Aftonbladet will take Metro’s new service Metromarknad to court
14DnB Media Summit
58,269,624
18,859,507
12,046,111
5,545,962
5,571,035
4,986,758
2,855,269
4,111,222
.se Internet traffic on media sites
Source:Red Measure, January 2004
53,975,864
Unique visits, January 2005
15DnB Media Summit
Operating profit (loss) – Online activities
Includes FINN, Byt Bil, Blocket and Retriever in addition to the group’s online newspapers. The results are included in the newspaper business area.
(NOK million) 2005 2004 2004 2003 2002 2001
Advertising revenues 152 98 471 269 188 154
Other revenues 25 22 97 83 49 31
Total operating revenues 177 120 568 352 237 185
Operating expenses (125) (94) (409) (301) (241) (356)
Operating profit (loss) 52 26 159 51 (4) (171)
As of 31 Mar
16DnB Media Summit
Online activities’ share of Schibsted’s operating profit (EBITA)
2002
Percent
2003 2004 2005
17DnB Media Summit
A 20 Minutes edition goes through three phases
Time
Distribution audience Revenues
Phase 1Optimize circulation
Phase 3Revenue growth
Phase 2Readership growth
18DnB Media Summit
0
250
500
750
1 000
1 250
1 500
1 750
2 000 2000 2001 2002 2003 2004
Zurich Bern
Basle
Madrid
BarceloneParis Seville Zaragoza
Lille
Lyon
Marseille
Valence
Alicante
Luzern
Circulation development
Toulouse
Bordeaux
19DnB Media Summit
2000 2001 2002 2003 Q1 2004
Development of revenues and expenses in Switzerland (Figures in EUR 1000)
Source: 20 minutes/Schibsted
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
Revenues Expenses
20DnB Media Summit
Attractive margins at start of fifth year
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
Revenues Expenses
2000 2001 2002 2003 Q1 2004
Source: 20 minutes/Schibsted
Development of revenues and expenses in Switzerland (Figures in EUR 1000)
21DnB Media Summit
New launches in both markets – strategic cooperation with
Grupo Zeta in Spain
• New launches contributes to an operating loss in Q1
• Continued strong revenue growth in both markets
• Spain: 36% y-on-y in Q1
• France: 69% y-on-y in Q1
• New readership survey shows that 20 Min has 2.023 million daily readers
in Spain
• Gain on sale of 20 Min in Switzerland of NOK 200 million
• Grupo Zeta, Spain’s third largest media group, has paid EUR 15 million
for 20% ownership in Spain
Latest development
22DnB Media Summit
Strong position in all markets
Daily readershipThousands
Switzerland1)
CirculationThousands
Spain
France
Total
Ranking
1
2
2
1) Not owned by Schibsted
23DnB Media Summit
France – #2 overall, but #1 in target group
Overall readersship
Readership, May 2005, thousands
Readersship in target group – 15 to 34 year olds
24DnB Media Summit
Revenue Development
0
20
40
60
80
100
120
140
160
180
200
2000 2001 2002 2003 2004
NOK million
25DnB Media Summit
Merger of the to companies decided in March – ongoing
integration process
• Schibsted largest shareholder with 44.5% of the shares
• Leading provider of mobile services in the Scandinavian markets
• Revenues of more than SEK 400 million
• More than 900 000 members in Norway and Sweden
• The companies complete each other both product wise and
geographically
• Accounting gain of NOK 89 million for Schibsted
• The deal was effective from 22 March
26DnB Media Summit
Successful integration – continued growth
• Proforma consolidated revenues of SEK 102 million for “the new
Aspiro” – operating profit of SEK 8 million
• Continued strong sales in Q1
• 2 million ringtones
• 1.1 million pictures and movies
• 600 000 java games
• Introduction of 3G and new advanced phones lead to increased
demand for mobile content
Q1 highlights
27DnB Media Summit
Online search – strategic rationale
Users are moving from print to online
Revenues are starting to move online
Google and Yahoo have strong market positions and are
moving into new areas of business
• Directories
• News
• Mobile content
• Banner ads
International competitors have established Nordic sales force
Economies of scale for Schibsted – possible to capitalize on
traffic
28DnB Media Summit
Online advertising forecasts – search is expected to be important
Source:Jupiterresearch
Online advertising in the US, USD billion
29DnB Media Summit
Costs in Q1 relating to new growth initiatives
New online projects in Aftenposten and FINN
Search in Sweden and Norway
New projects based on 20 Min and Blocket
Total costs in Q1 relating to new growth initiatives
Percent
100% = NOK 20 million
30DnB Media Summit
Financial targets – over a business cycle
EBITA-margin 12%
EBITDA-margin 16%
Return on equity 22%
Return on assets 15%
Long term target for organic profitable growth 7%
Equity ratio 35% (min. 25%)
Net interest bearing debt/EBITDA 3
Minimum net cashflow from operations after maintenance
capex (before dividend)
NOK 400 million