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