Annual Report • Feb 11, 2016
Annual Report
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| Management commentary 7 | |
|---|---|
| Statement by Management on the Annual Report56 |
|
| Consolidated financial statements59 | |
| Notes to the consolidated statements65 | |
| Board of Directors108 | |
| Executive Board110 | |
| Group chart114 | |
| Parent financial statements118 | |
| Group addresses131 |
The Annual Report 2015 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.
By Richard Bunck, Chairman of the Board of Directors
More than 550,000 households have now signed up for NoAds+. The increase substantiates that NoAds+ is the consumers' choice, and so a future core product of North Media.
Danish consumers become more and more on-demand focussed, and rely on more and more different types of media to access precisely the information and bargains they want at a given time in a given situation. This means that traditional advertising media such as TV, newspapers and unaddressed printed matter are losing users. This is why the Group's strategy in the past few years has resulted in the development of the NoAds+ concept and the online activities.
Since market developments are increasingly calling for faster and more agile strategy development and execution, the North Media Group reorganised its management at the end of 2015. Effective from 1 January 2016, the Group's activities were split into four business lines, each with their own board of directors appointed by the Board of Directors of North Media A/S. These four business lines hold different levels of development potential, have different levels of maturity and therefore require strategically different initiatives to optimise development and earnings.
The strategic goals set for the Group in 2015 were largely achieved. The key goal for 2015 was to continue and build the success of the NoAds+. We did it! During the year, more than 250,000 households have signed up for the NoAds+, resulting in more than 550,000 households having registered at year-end 2015.
NoAds+ is a consumer service developed by FK Distribution. With NoAds+, consumers may choose the printed matter they do want and do not want. The NoAds+ is good for consumers and good for retailers because the marketing effort becomes more precise, targeted and effective.
Unfortunately, 2015 was no exception in terms of Post Danmark's unreasonable actions in the printed matter distribution market. Post Danmark holds the view that declining printed matter volumes warrant lower prices. On the other hand, the raising of the 1st class mail postage stamps ("A-brev") from DKK 10 to DKK 19 is justified by lower letter volumes. For instance, Post Danmark charges DKK 19 for the delivery of a letter, and, by comparison, they only charge around DKK 0.30 for a printed matter item
even though it is the same postman delivering both. So in North Media's opinion, Post Danmark abuses its dominant position to make dumping and bundling offers in the market. North Media also believes that this unfair competition has been a key reason why FK Distribution has lost market shares to Post Danmark.
Financial performance for 2015 turned out as expected. EBIT before special items was a negative DKK 0.7 million, which – seen in isolation – is unsatisfactory, however, also reflects the considerable development and marketing costs for new long-term growth initiatives such as NoAds+, electronic key systems and the Group's online activities.
During 2015, the Group improved its financial resources by DKK 46.2 million, and at year-end the net-interest bearing cash position stood at DKK 113.8 million.
Solid financial resources constitute a key competitive parameter. The Group realised its performance targets for 2015, however, the Board of Directors wants to see stronger evidence of progress in performance before a decision is made to distribute dividend. Therefore the Board of Directors will recommend at the Annual General Meeting of 8 April 2016 that no dividend be paid for the financial year 2015.
For 2016, Group EBIT is expected to range from a negative DKK 20 million to a negative DKK 50 million. This is lower than for 2015, and the primary reasons are the reduction in FK Distribution's revenue due to continuous price dumping on the part of Post Danmark and resultant loss of market shares and ongoing investments in the Group's long-term growth initiatives. The Online segment is expected to achieve break-even for day-to-day operations at year-end 2016. At year-end 2016, the Group's financial resources are expected to be on a par with those at year-end 2015.
Results are expected to improve again in 2017.
| Income statement: | 2015 | 2014 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|
| Revenue | 1,012.4 | 1,073.7 | 1,077.1 | 1,104.6 | 1,211.6 |
| Gross profit | 496.7 | 533.4 | 487.7 | 530.4 | 579.7 |
| EBITDA | 55.6 | 103.4 | 93.6 | 133.8 | 199.5 |
| Amortisation and depreciation | 56.3 | 48.2 | 36.0 | 33.3 | 33.0 |
| EBIT before special items | -0.7 | 55.2 | 57.6 | 100.5 | 166.5 |
| Special items, net | -19.4 | -7.5 | -20.0 | -7.0 | 0.0 |
| EBIT | -20.1 | 47.7 | 37.6 | 93.5 | 166.5 |
| Return on securities | 12.9 | 17.3 | 1.6 | 14.4 | 2.1 |
| Financials, net | -7.8 | -24.0 | -10.0 | -9.3 | -5.8 |
| Profit/loss continued operations before tax | -15.2 | 39.6 | 26.8 | 97.0 | 162.3 |
| Tax for the year | -3.3 | 16.9 | 11.1 | 20.9 | 41.1 |
| Net profit/loss, continuing operations | -11.9 | 22.7 | 15.7 | 76.1 | 121.2 |
| Profit from disposals of subsidiaries | 0.0 | 0.0 | 0.0 | 0.0 | 182.0 |
| Net profit/loss, discontinued operations | 0.0 | 0.0 | 0.0 | 0.0 | -1.6 |
| Net profit for the year | -11.9 | 22.7 | 15.7 | 76.1 | 301.6 |
| Comprehensive income | -9.9 | 18.7 | 20.4 | 74.3 | 302.9 |
| Balance sheet: | |||||
| Total assets | 850.3 | 888.6 | 922.0 | 864.2 | 868.9 |
| Shareholders' equity incl. minorities | 522.0 | 532.4 | 523.3 | 511.6 | 523.8 |
| Net interest-bearing cash position | 113.8 | 67.6 | -11.6 | 47.2 | 107.3 |
| Net working capital (NWC) | -38.2 | -43.2 | -37.1 | -40.2 | -40.3 |
| Invested capital | 408.2 | 464.8 | 534.9 | 464.4 | 416.5 |
| Investments in property, plant and equipment | 10.8 | 25.0 | 25.4 | 25.3 | 13.5 |
| Free cash flow | 40.2 | 83.3 | 65.0 | 106.4 | 166.7 |
| Cash flow statement | |||||
| Cash flows from operating activities | 34.6 | 83.5 | 80.4 | 91.1 | 155.9 |
| Cash flows from investing activities | 8.4 | -88.5 | -42.6 | -22.1 | -178.9 |
| Cash flows from financing activities | 5.9 | -9.5 | -17.2 | -102.7 | -204.4 |
| Changes in cash and cash equivalents | 48.9 | -14.5 | 20.6 | -33.7 | -227.4 |
| Other information: | |||||
| Average number of employees | 610 | 615 | 606 | 637 | 602 |
| Number of shares at year-end, in thousand at DKK 5.00 | 20,055 | 20,055 | 20,055 | 20,055 | 20,055 |
| Treasury shares, in thousand | 1,485 | 1,485 | 1,485 | 1,485 | 444 |
| Share price at year-end, DKK | 14.1 | 18.2 | 16.0 | 17.1 | 22.8 |
| Ratios: | |||||
| Gross margin (%) | 49.1 | 49.7 | 45.3 | 48.0 | 47.8 |
| Operating margin (EBIT before special items) (%) | -0.1 | 5.1 | 5.3 | 9.1 | 13.7 |
| Equity ratio (%) | 61.4 | 59.9 | 56.8 | 59.2 | 60.3 |
| Return on equity (ROE) (%) (1) | -2.3 | 4.3 | 3.0 | 14.7 | 59.0 |
| Return on capital employed (ROIC) (%) | -0.2 | 11.0 | 12.1 | 22.8 | 38.9 |
| Earnings per share (EPS) | -0.5 | 1.1 | 0.5 | 3.4 | 5.8 |
| Earnings per share (EPS) - Total (1) | -0.5 | 1.1 | 0.5 | 3.4 | 15.0 |
| Price/Earnings (P/E) (1) | - | 16.5 | 32.0 | 5.0 | 1.5 |
| Price/Book Value (P/BV) | 0.5 | 0.7 | 0.6 | 0.7 | 0.9 |
| Cash flow per share (CFPS) | 1.9 | 4.5 | 4.3 | 4.7 | 8.0 |
| Dividend and cash remuneration per share, paid in the | |||||
| financial year | 0.0 | 0.0 | 0.0 | 3.0 | 14.0 |
The consolidated highlights are shown for continued operations unless otherwise stated. The consolidated highlights are only restated for changed accounting policies for recognition of joint ventures for 2013.
Note 1: The key figures also include discontinued operations.
Performance targets and strategic goals essentially achieved as planned in 2015.
| DKKm | Revenue | EBIT before special items |
|---|---|---|
| 917.7 | +13.0 | |
| Online | 94.7 | -12.6 |
| Unallocated cost / income | -1,1 | |
| Group | 1,012.4 | -0.7 |
Group revenue for the financial year 2015 totalled DKK 1,012.4 million. This is 6% down on 2014 when revenue stood at DKK 1,073.7 million.
At the onset of 2015, group revenue was expected to range from DKK 1,010 million to DKK 1,050 million. In the Interim Management Statement for Q3 2015, these figures were further specified to range between DKK 1,000 million and DKK 1,020 million. So the revenue realised for the year is consistent with the previous announcement of expected revenue.
FK Distribution's revenue dropped by 8% because of the ongoing decline in prices and market contraction as well as an increase in the number of No Ads Please households. FK Distribution's new No Ads+ product compensates increasingly for this as the number of households signing up rises.
Revenue from newspaper operations went down by 5% from 2014 to 2015. Sales to regional retail customers were lower than last year and behind expectations. Sales to large customers and chains, however, were up to expectations and higher than last year.
Revenue from the Print segment totalled DKK 917.7 million in 2015 against DKK 976.3 million in 2014, and has thus been reduced by 6%.
At the beginning of the year, expectations were that revenue from the Online segment would go up from DKK 97.4 million in 2014 to range between DKK 100 million and DKK 110 million. This growth target was not achieved as revenue from the Online segment reached DKK 94.7 million in 2015.
In early 2015, GodMail.dk was sold and, this activity left out, revenue from the Online segment is the same in 2015 as in 2014.
The reason for this flat development in revenue is Ofir's and BoligPortal's failure to meet the expectations of growth. However, revenue from Ofir went up by 13%, whereas revenue from BoligPortal is the same for 2015 and 2014. As expected, revenue from håndværker.dk was lower in 2015 than in 2014 because of the change in business model.
Group EBIT before special items for 2015 is negative by DKK 0.7 million. In 2014, this figure stood at a positive DKK 55.2 million.
The financial performance realised for 2015 matches expectations at the beginning of the year, when the earnings expectations announced ranged from a negative DKK 20 million to a positive DKK 5 million. In the Interim Management Statement for Q3, these expectations were specified to range from a negative DKK 15 million to DKK 0 million.
The Print segment EBIT of DKK 13.0 million was a little higher than expected, primarily because of lower costs at FK Distribution.
However, the negative Online segment EBIT before special items of DKK 12.6 million was lower than expected. At the beginning of the year, a financial performance between DKK 0 million and a negative DKK 10 million was expected. This deterioration of performance was mainly caused by revenue growth being lower than expected for Ofir and BoligPortal and to a lesser extent by increased marketing costs regarding håndværker.dk. In 2014, the Online segment EBIT before special items stood at a negative DKK 8.2 million.
"FK Distribution must continue to increase the number of households signed up for NoAds+. Moreover, minetilbud.dk must be the leading platform for online readings and locality-based bargain hunting and services. Massive investments must be made in product development and marketing.
The revenue decline in 2015 is expected to be in line with 2014. The upped investments in NoAds+ and minetilbud.dk will exacerbate the decline in performance, however."
In 2015, FK Distribution reached 550,000 sign-ups for No-Ads+, which was up to expectations. This proves that the NoAds+ is in high demand by the consumers and that the Danes are very pleased with physical retail leaflets.
In 2015, the minetilbud app was downloaded more than one million times. The number of offers displayed on minetilbud.dk is soaring, and this is expected to continue. Initially, the locality-based bargain hunting features and services failed to meet expectations.
The paper-based and the online-based versions of retail leaflets are used in different situations. When consumers are looking for specific offers, they increasingly use the online solution, and when it is about being inspired, then the paper version is still their preferred medium.
The 2015 decline in revenue turned out as expected, whereas the decline in performance was smaller than anticipated because of generally lower costs.
Conclusion: Overall, FK Distribution has achieved the goals set for 2015.
"BEKEY must accelerate its momentum, and its leading position in the municipal market must be cemented. Combined with intensified sales efforts abroad, this must result in high revenue growth. Investments in product development must be maintained.
Considerably higher revenue is expected for 2015, and performance on a par with 2014."
In 2015, BEKEY doubled its total revenue for the third year running and at the same time managed to further build its position in the municipal market. Right now 22 municipalities use BEKEY, three of them in Norway and two in Sweden.
Also, BEKEY finished its Thumb Turn 2.0 in 2015 and now has a strong product allowing BEKEY to technologically outdistance its competitors.
The focus on the private market, including in particular on sales to retail chains abroad, did not pay off as expected. The primary reason was delays in the specific product development initiatives taken in this segment. However, Q4
2015 saw the successful completion of a number of these initiatives. This is also why it was possible to form some international partnerships in, for example, the Netherlands, Norway, Sweden, Finland and the USA.
Revenue and financial performance for 2015 were a little lower than expected.
Conclusion: Overall, BEKEY has achieved the goals set for 2015.
"The newspaper activities must regain the setting when revenue and readership developments exceeded the general market. Sales efforts must increasingly focus on ROI and on the Group's newspaper titles being the country's largest push-medium and the best alternative to the surge in No Ads Please households, the decline in dailies' circulation and TV's challenge with respect to delivering adequate effect (target rating points (TRP)).
Revenue and performance for 2015 are expected to be on a par with those for 2014."
In 2015, North Media's newspapers followed the general market development for advertisements in free newspapers and dailies and lost around 5% in business, whereas overall its newspapers did better than the market in terms of readership trend. It is worth noticing in particular that while all of the country's local newspapers lost 0.5% in readership from H2 2014 to H1 2015 (which are the latest figures published), North Media's local newspapers in Copenhagen won 5.5% more readers thanks to a successful strategic effort of targeting contents at modern readers. Advertisers were slower than anticipated in changing behaviour as a consequence of the increased share of No Ads Please households and declining TV coverage.
The objective of the newspapers realising results for 2015 on a par with those for 2014 was almost achieved, although with much lower revenue. This lower revenue and a hence lower contribution margin were largely outweighed by cost savings in both capacity costs and variable costs – for example, by launching a special flexible advertising product which ensured optimal occupancy in all editions of Søndagsavisen.
Conclusion: North Media's newspaper operations have partially achieved the goals set for 2015, although developments in revenue fell short of expectations.
" The most important objective of Ofir is to increase the sale of job ads considerably. Moreover, revenue growth from Emply ApS' e-recruitment systems must maintain its high level from 2014.
Significantly greater revenue is expected for 2015, and the earnings improvement must continue. Ofir is expected to achieve EBIT break-even in H2 2016."
The number of job ads sold was much lower than expected whereas the increase in revenue from the e-recruitment system Emply Hire was largely up to expectations.
At the beginning of 2015, expectations were a heavy increase in ads sold to media in the Ofir job universe through the media selection page on Ofir. However, revenue did not develop as much as expected and experienced a slight decline.
Total revenue growth for Ofir was much lower than expected, for which reason performance for 2015 is on a par with that for 2014. Ofir is no longer expected to reach EBIT break-even in H2 2016.
Conclusion: Ofir failed to achieve the targets set for 2015.
"Byggestart.dk changed its name to håndværker.dk on 1 February 2015 and launched a new website. This new website is supported by marketing and is set to ensure that håndværker.dk offers the best way to find the ideal builder.
Revenue for 2015 is expected to decline slightly due to the restructured business model, but improved performance is expected despite the massive marketing effort. håndværker.dk is expected to achieve EBIT break-even by year-end 2015."
håndværker.dk launched its new site as planned and promoted it on radio and TV in the spring of 2015, and business shows a positive trend measured by key indicators. Based on the successful launch, investments in promotion were increased, meaning that break-even was not achieved at year-end 2015.
Both consumers and crafts firms have welcomed håndværker.dk, and the number of crafts firms has gone up by more than 40% in 2015. Volume and quality of contents on the site in the form of pictures, descriptions and recommendations have also increased considerably in 2015, and traffic has developed as expected. Together with Renault and Danish consumers, håndværker.dk in Q4 2015 elected Denmark's best builder. The campaign was very successful, and the goals set for it were reached.
The conversion of customers from old products to new håndværk.dk products resulted in revenue being lower than anticipated, which also led to lower results.
Conclusion: Overall, håndværker.dk has achieved the goals set for 2015, although with both revenue and performance being at the low end.
" BoligPortal must uphold its market leading position and expand its presence on mobile platforms and social media within advertising of rental housing. New products and services for both landlords and tenants must be introduced. BoligPortal must also create a market for the self-sale of cooperative and owner-occupied dwellings.
Revenue is expected to go up for 2015, whereas performance is expected to go down due to additional investments in product development and marketing compared to 2014."
BoligPortal has maintained its leading position in the market for advertising rental housing, one of the means being a new strategy focusing on matching housing seekers, housing sellers and landlords. Presence on mobile platforms and social media has been improved, not least in the second half of 2015 because of planned investments in promotion and product development. This has led to handsome growth in the number of visitors across platforms. The change in BoligPortal's pricing models has increased the number of customers, but caused a decline in revenue.
In 2015, BoligPortal gained a larger share of the market for self-sale of co-operative and owner-occupied dwellings. The overall self-sale market declined, however, and both revenue and earnings per co-operative and owneroccupied dwelling advertisement do not meet the targets.
In the autumn of 2015, BoligPortal successfully launched a new service, BoligPortal PrisTjek, a service helping Danes to save money, for example, when they order Internet services, raise a housing loan or need a remover.
Conclusion: BoligPortal has partially achieved the goals set for 2015, although developments in revenue fell short of expectations.
Effective from 1 January 2016, the Group implements are new structure under which activities are divided into four business lines. In 2016, the transformation affecting most of the activities in 2015 will continue.
2016 foresees FK Distribution's total revenue to drop by 15- 20% compared to 2015. The primary reason is the loss of Coop as a customer as well as continuing declines in prices. Despite the loss of Coop, revenue from the NoAds+ will go up by approximately 10%. The overall decline in revenue has an adverse effect on earnings, although implemented cost savings will reduce the effect.
FK Distribution's strategic goals for 2016 are a continuation of the results achieved in 2015. FK Distribution will have further focus on NoAds+ and minetilbud.dk by refining and further developing the products for the benefit of both consumers and customers. Also, the range of services available to customers will be expanded, and their functionality be developed to create a basis for closer relations between shops and consumers.
Revenue from the newspaper activities for 2016 is expected to be on a par with that for 2015. A series of promotional measures were taken towards the end of 2015, and new print and online products were launched, and focus on utilising regional advantages was intensified. Earnings are in 2016 expected to be in line with 2015.
With the relaunch of sondagsavisen.dk in 2015, new possibilities of increasing focus on value-based sales and advice to customers were opened up. How to use these new possibilities across media and platforms is something to be communicated better, and new products such as inserts will also give advertising customers access to No Ads Please households.
North Media Online expects revenue to go up by DKK 10-20 million, or 10-20%. A key precondition for this is that Bolig-Portal will achieve the growth expected based on the change in pricing models that took place in 2015, and will generate revenue from new products in 2016. Another key point is that Ofir is able to boost revenue from job ads and sales of Emply Hire. Lastly, håndværker.dk must succeed in attracting more builders to the new site. Expectations are that håndværker.dk will break even by year-end 2016.
BoligPortal is to create new products to match housing seekers, housing sellers and landlords and increase focus on mobile solutions.
Ofir must increase revenue from job ad sales and render visible the advantages of the Ofir job universe by demonstrating high effect.
For håndværker.dk, the aim of the change in business model is to lead to continued high growth in 2016 in the number of paying builders and the number of recommendations from private developers.
BEKEY expects to increase revenue to DKK 25-30 million. This increase is to result partly from the improvement of the strong position held in the municipal market by means of the newly developed Thumb Turn 2.0, partly from the international partnerships formed in, for example, the Netherlands, Norway, Sweden, Finland and the USA, which are expected to up sales in the private market.
Ongoing development of both hardware and software is to make sure that the lock is easier to install and cheaper to make. Software development is to ensure that the system can communicate with different home automation systems. Also, selling is to be conceptualised to optimise sales through partners, distributors or retailers.
The Group's revenue is expected to range from DKK 880 million to DKK 930 million in 2016 compared to DKK 1,012 million in 2015.
The decline in revenue has a major impact on EBIT. Group EBIT before special items is expected to go down from a negative DKK 0.7 million in 2015 to range between a negative DKK 20 million and a negative DKK 50 million in 2016. The primary reason for this poorer performance is the loss of market shares as well as continuing declines in prices in FK Distribution's markets.
In 2016, amortisation and depreciation are expected to stand at approximately DKK 37 million. Group EBITDA is therefore expected to range from a negative DKK 13 million to a positive DKK 17 million.
Investments are expected to be around DKK 10 million. Based on this and the assumption of a value of the portfolio of securities equivalent to that at 31 December 2015, the Group's net interest-bearing cash position is expected to amount to between DKK 105 million and DKK 145 million at year-end 2016. At year-end 2015, the Group's net interestbearing cash position was DKK 113.8 million.
| DKKm FK Distribution |
Revenue 550-575 |
EBIT 0 to +15 |
|---|---|---|
| North Media Newspapers |
200-210 | -30 to -25 |
| North Media Online |
105-115 | -5 to 0 |
| BEKEY | 25-30 | -15 to -10 |
| Group | 880-930 | -50 to -20 |
The Group's portfolio of securities amounted to DKK 196.1 million at 31 December 2015 and consisted of 13 different shares and share-based investment funds, which are shown from the illustration on page 15.
The value of the Group's portfolio of securities will vary with fluctuations in the listed prices and exchange rates of the individual securities. North Media will disclose returns on and value of the portfolio in connection with the quarterly interim management statements. There will be no guidance on expected returns on the share portfolio as the development in specific securities or in the general share market is beyond the Group's control.
As described in the 2014 Annual Report, 2015 and 2016 were expected to be years of transformation in terms of performance, resulting in unsatisfactorily low earnings.
The Group has achieved its primary strategic goals and results for 2015. The strategic course will therefore remain the same. The loss of market shares to Post Danmark was not anticipated.
Consequently, the earnings expectations for 2016 are lower than they were at the time of authorisation of the 2014 Annual Report. This does not change the fact, however, that 2016 will be affected by considerable product development costs in each of the four business lines which may help create new growth in revenue and earnings.
Against this background, revenue growth and positive earnings from new and existing products stretching far into the future media markets are expected as of 2017.
As expected, the Group's performance for 2015 was much poorer than for 2014. This is to be seen in the light of the high level of activity related to new operations such as NoAds+ and BEKEY.
Print revenue in Q4 2015 came to DKK 250.8 million. This is 6% down on the same period last year. The primary reason is lower revenue at FK Distribution and Søndagsavisen.
Print segment EBIT before special items came to DKK 22.0 million for Q4 2015. This is DKK 1.3 million down on the same period last year when this EBIT was DKK 23.3 million. The primary reason why this decline is not heavier is that marketing and IT development costs for the NoAds+ Concept were higher in Q4 2014 than in Q4 2015.
Revenue from the Online segment for Q4 2015 was DKK 22.0 million, which is on a par with that for Q4 2014. Revenue went down or was unchanged for most online activities. Ofir did not succeed in upping revenue as expected, whereas BoligPortal and håndværker.dk changed their pricing structure to boost growth in 2016.
Online segment EBIT before special items in Q4 2015 was negative by DKK 4.6 million compared to a negative DKK 3.2 million for the same period last year. This decline in performance is a reflection of higher costs for, for example, promotional initiatives compared to the year before.
| Revenue | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Year | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||
| DKKm | 2015 | 2014 | 2015 | 2015 | 2015 | 2015 | 2014 | 2014 | 2014 | 2014 |
| 917.7 | 976.3 | 250.8 | 204.0 | 237.0 | 225.9 | 267.9 | 223.1 | 251.8 | 233.5 | |
| Index cp. same period last year | 94.0 | 99.0 | 93.6 | 91.4 | 94.1 | 96.7 | 95.2 | 104.1 | 101.7 | 96.2 |
| Online | 94.7 | 97.4 | 22.0 | 24.0 | 24.1 | 24.6 | 22.3 | 25.2 | 25.1 | 24.8 |
| Index cp. same period last year | 97.2 | 107.0 | 98.7 | 95.2 | 96.0 | 99.2 | 100.5 | 115.6 | 108.2 | 104.2 |
| Group revenue | 1,012.4 | 1,073.7 | 272.8 | 228.0 | 261.1 | 250.5 | 290.2 | 248.3 | 276.9 | 258.3 |
| Index cp. same period last year | 94.3 | 99.7 | 94.0 | 91.8 | 94.3 | 97.0 | 95.7 | 105.1 | 102.2 | 96.9 |
| EBIT | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Year | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||
| DKKm | 2015 | 2014 | 2015 | 2015 | 2015 | 2015 | 2014 | 2014 | 2014 | 2014 |
| 13.0 | 61.2 | 22.0 | -10.0 | 9.2 | -8.2 | 23.3 | 3.7 | 17.4 | 16.8 | |
| Profit margin | 1.4% | 6.3% | 8.8% | -4.9% | 3.9% | -3.6% | 8.7% | 1.7% | 6.9% | 7.2% |
| Online | -12.6 | -8.2 | -4.6 | -3.9 | -0.7 | -3.4 | -3.2 | 2.4 | -3.2 | -4.2 |
| Profit margin | -13.3% | -8.4% | -20.9% | -16.3% | -2.9% | -13.8% | -14.3% | 9.5% | -12.7% | -16.9% |
| Unallocated income/costs | -1.1 | 2.2 | -1.6 | 0.9 | -0.4 | 0.0 | 1.0 | 1.3 | 0.8 | -0.9 |
| Group EBIT, before special items |
-0.7 | 55.2 | 15.8 | -13.0 | 8.1 | -11.6 | 21.1 | 7.4 | 15.0 | 11.7 |
| Profit margin | -0.1% | 5.1% | 5.8% | -5.7% | 3.1% | -4.6% | 7.3% | 3.0% | 5.4% | 4.5% |
| Special items | -19.4 | -7.5 | -19.4 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -7.5 | 0.0 |
| EBIT | -20.1 | 47.7 | -3.6 | -13.0 | 8.1 | -11.6 | 21.1 | 7.4 | 7.5 | 11.7 |
The Group's total revenue for Q4 2015 was DKK 272.8 million, or 6% down on Q4 2014. Group EBIT before special items in Q4 2015 was DKK 15.8 million compared to DKK 21.1 million for the same period last year. This decline in performance was caused by lower revenue at FK Distribution and higher costs in the Online segment.
For the financial year 2015, the Group realised revenue of DKK 1,012 million, which is 6% down on last year. As stated in the Group's Interim Management Statement for Q3 2015, the Group's revenue was expected to total between DKK 1,000 million and DKK 1,020 million in 2015. The revenue realised was in line with expectations.
In 2015, revenue from the Print segment stood at DKK 918 million compared to DKK 976 million in 2014, equivalent to a decline of DKK 58.6 million, or 6%. Revenue realised by FK Distribution went down by 8% whereas that for the newspaper activities was down 5%. Revenue for BEKEY more than doubled, albeit from a low level.
For the Online segment, revenue fell by DKK 2.7 million from 2014 to 2015, primarily because of the disposal of GodMail.dk. If this is left out of account revenue was almost unchanged. Revenue has been adversely affected by the price and concept adjustment of håndværker.dk, however, the other online operations too have seen a weak
development in revenue. Revenue from BoligPortal developed flatly from 2014 to 2015, which is one of the main reasons why the original revenue expectations of DKK 100 million to DKK 110 million were not fulfilled.
In 2015, the aggregate contribution margin of the Group amounted to DKK 496.7 million, equivalent to a contribution ratio of 49.1%. In 2014, the contribution margin came to DKK 533.4 million, and the contribution ratio to 49.7%. The 0.6 percentage point reduction in the contribution ratio was caused by the decrease in FK Distribution's revenue.
Staff costs came to DKK 291.6 million in 2015 compared to DKK 278.9 million in 2014. Staff costs have gone up by DKK 12.7 million, or 5%, from 2014 to 2015. Most of the increase is attributable to costs for the anniversary celebration in April and the severance costs regarding the reorganisation of the Group. In 2015, the average headcount was 610 (both salaried and hourly staff at the terminals), which is five less than in 2014. Please also refer to Notes 6 and 7.
Other costs primarily include marketing costs, costs of premises, IT costs, fees and administrative expenses. Other costs totalled DKK 157.4 million in 2015 compared to DKK 157.3 million in 2014. This unchanged level is attributable to continued high costs for the promotion of NoAds+, high IT development costs regarding minetilbud.dk and product development costs for BEKEY.
Amortisation and depreciation for the Group totalled DKK 56.3 million in 2015 and DKK 48.2 million in 2014. The increase is attributable to the loss from the retirement of assets no longer in use. The loss totalled DKK 10.5 million. In addition, intangible assets were amortised by DKK 12.3 million concerning the eight local newspapers acquired in 2013. Moreover, buildings were depreciated by DKK 8.2 million and plant by DKK 16.1 million in 2015. Please also refer to Notes 9, 17 and 18.
Other operating income amounted to DKK 7.9 million in 2015 against DKK 6.2 million in 2014. The line item includes a net profit of DKK 2.3 million in 2015, arising from the disposal of Good Media A/S, the operator of the web service GodMail.dk.
In 2014, Group EBIT before special items was DKK 55.2 million. In 2015, Group EBIT before special items was negative by DKK 0.7 million and is thus considerably lower than last year. The main reason for this lower performance is a heavy decline in FK Distribution's earnings because of lower revenue. However, part of the decline in FK Distribution's earnings results from continued high costs to extend the NoAds+ concept.
At the same time, the Group's other activities have experienced a small decline in earnings which together have caused the heavy drop in earnings.
At the beginning of the year, EBIT for the year was expected to range from a negative DKK 20 million to a positive DKK 5 million, and was specified to range from a negative DKK 15 million to DKK 0 million in the Interim Management Statement for Q3 2015. As EBIT before special items was realised at a negative DKK 0.7 million, this figure is within the range expected at the onset of the year.
Print segment EBIT before special items came to DKK 13.0 million for 2015.
At the beginning of the year, Print segment EBIT before special items was expected to range from a negative DKK 10 million to a positive DKK 5 million. Thus, the performance realised turned out a little better than originally expected.
Online segment EBIT before special items was negative by DKK 12.6 million for 2015.
At the onset of the year, EBIT before special items for the Online segment was expected to range from a negative DKK 10 million to DKK 0 million. So EBIT realised was lower than anticipated and resulted primarily from lacking revenue growth.
Special items for 2015 also include a partial write-down of goodwill related to the acquisition of the eight local newspapers in 2013, totalling DKK 10 million, and a small reduction in the acquisition price payable of DKK 3.5 million related to the acquisition of two of the local newspapers, for which payment of the remaining 30% of the shares hinges on the Company's financial development. In addition, the line item includes total impairment losses of DKK 9.6 million for the property in Elsinore.
Lastly, in 2015 the line item includes expenses regarding the former Chief Executive Officer during the resignation period.
Special items for 2014 included a write-down of goodwill and reversal of a net earn-out payable of DKK 5.9 million stemming from the acquisition of Byggestart.dk/ HentTilbud.dk (now håndværker.dk).
Special items for 2014 also included DKK 1.6 million in severance pay to staff as the number of employees at Byggestart.dk/HentTilbud.dk was halved to 15 people.
Finally special items for 2014 included a partial write-down of goodwill related to the acquisition of the local newspapers in 2013, and a similar write-down of the acquisition price payable for the acquisition of the remaining 30% of the shares in Lokalaviserne Østerbro og Amager A/S.
In 2015, the Group had a positive net return on securities of DKK 12.9 million, or 6.3%, whereas for 2014 it was DKK 17.3 million, or 10.3%.
At year-end 2015, the composition of the portfolio of securities has been changed so as to consist of shares when previously bonds prevailed. Quarterly returns are evident from the table below.
At 31 December 2015, the Group's portfolio of shares totalled DKK 196.1 million, whereas the portfolio of shares and bonds at the same date in 2014 came to DKK 204.7 million.
Risk has been calculated at 18.8% at 31 December 2015. Risk has been calculated as the annuallised standard deviation measured over the past 90 days of trading. "Value at risk", which reflects the maxium loss over a three-month period with a probability of 95%, was DKK 30.4 million.
At year-end 2015, the Group had invested in 13 different shares and share-based investment funds. The portfolio consists of listed shares and investment funds with high transferability such as OMXC20 shares or shares in similar international indexes. At 31 December 2015, the portfolio consisted of the following shares with accompanying market values, see figure below.
At 31 January 2016, the value of the portfolio of shares was DKK 181.8 million, equivalent to the return for January being negative by DKK 14.3 million, or 7.2%. Risk has been calculated at 20.5% and value at risk at DKK 30.9 million at 31 January 2016. There has not been any changes to the portfolio in January.
Similar reporting will be incorporated in future quarterly interim management statements. Also – if significant changes are made to the portfolio – separate company announcements will be issued.
In Q4 2014, North Media acquired a minority stake in a Ukrainian housing website (Mesto.ua) for a small amount, and North Media has used its housing website skills to contribute strategically and operationally to the development of that website. The site has grown heavily in 2015, and faster than expected. Compared with other housing portals, Mesto.ua now holds a market-leading position in Ukraine measured by number of advertised dwellings, number of active real estate agents and number of users/traffic. In 2015, revenue has been insignificant, for which reason the company is loss-making. Revenue is expected to increase considerably in 2016 when new products and a new pricing structure are launched.
The Group's share of profits/losses after tax from associates was negative by DKK 0.2 million in 2015 and by DKK 1.4 million in 2014. In 2015, the Group's share of the operating loss from the Company's Ukrainian housing portal, Mesto.ua, has been recognised at DKK 1.4 million.
Performance of A/S Vestsjællandske Distriktsblade remains positive.
In 2015, the Group had financial income of DKK 0.5 million, whereas it was DKK 0.7 million in 2014. The income arises from interest income and foreign exchange gains.
In 2015, financial expenses stood at DKK 8.3 million and mainly related to interest on long-term mortgage loans in the Group's properties and the discounting effect on the purchase price payable. In 2014, financial expenses came to DKK 24.7 million, and also consisted of interest on longterm mortgage loans and the discounting effect on the purchase price payable. The line item also included fair value adjustments of other investments in the total amount of DKK 13.8 million.
In 2014, fair value adjustments of other investments were primarily attributable to write-down of the investment in Emply ApS, totalling DKK 12 million. Please refer to Note 12 for further details.
The Group's loss before tax was DKK 15.2 million, which is DKK 54.8 million down on 2014. This poorer performance is mainly attributable to much lower operating results and higher special items, which are partially compensated for by lower financial expenses.
Tax on loss for the year is an income of DKK 3.3 million and equals an effective tax rate of 21.7 %. The tax rate is affected by numerous factors moving in opposite directions. The lower income tax rate reduces deferred tax by DKK 1.0 million whereas the write-down of goodwill and acquisition price payable are not deductible, and in net terms result in tax going up by DKK 0.9 million. In 2014, total tax came to DKK 16.9 million, equalling an effective tax rate of 42.7 %. Also in 2014 did the write-down of goodwill and fair value adjustments of other investments affect tax.
Loss for the year of the Group was DKK 11.9 million for 2015. This is DKK 34.6 million down on 2014.
Goodwill and other intangible assets on the Group's balance sheet amount to DKK 115.4 million. This amount has been reduced by DKK 24.9 million in 2015 as a result of DKK 15.2 million in amortisation and DKK 10.0 million in impairment losses.
In aggregate, goodwill and intangible assets worth DKK 58.2 million may be attributed to the local newspaper activities, whereas the remaining intangible assets relate to FK Distribution and BoligPortal.
This line item consists of investments in Vestsjællandske Distriktsblade and in the Company's Ukrainian housing portal.
For 2015, the Group's total investments exclusive of investments in enterprises came to DKK 11.0 million, of which the overwhelming majority were in plant at FK Distribution's packing terminals. Last year, the Group's investments exclusive of investments in enterprises totalled DKK 26.9 million. In 2014 too, investments were primarily spent on FK Distribution's packing terminals.
At 31 December 2015, the Group's trade receivables amounted to DKK 78.1 million. This is equivalent to a debtor days ratio of 23.0 days. Compared to the same period in 2014, the Group's receivables have gone down by DKK 13.6 million, and the debtor days ratio has gone down by 2.4 days from 25.4 days.
At year-end 2015, short-term trade payables stood at DKK 43.1 million compared to DKK 51.2 million at year-end 2014. In creditor days, this is equivalent to 27.0 days in 2015 compared to 31 days in 2014.
At 31 December 2015, other payables amounted to DKK 84.2 million, which is DKK 3.7 million down on the balance at the same date in 2014. Other payables are primarily composed of holiday pay payable and A tax.
The Group's net working capital (NWC) was negative by DKK 38.2 million at the end of 2015, which is DKK 5.0 million less than at the same time last year, when the Group's NWC was a negative DKK 43.2 million. The reduced NWC is primarily attributable to lower revenue but also to the reduction in creditor days mentioned above.
Cash flows for the year from operating activities went down from DKK 83.5 million in 2014 to DKK 34.6 million in 2015. The reduction has mainly been caused by the lower operating results, but also lower working capital.
Cash flows from investing activities were DKK 8.4 million in 2015 compared to a negative DKK 88.5 million in 2014.
Cash flows from investing activities are heavily affected by the purchase and sale of securities. In 2015, securities were sold for DKK 22.6 million net, whereas 2014 saw DKK 48.8 million in purchases. In addition, DKK 11.0 million was in 2015 invested in intangible assets and property, plant and equipment while in 2014 investments were DKK 26.9 million.
In 2015, cash flows from financing activities were DKK 5.9 million and attributable to a total additional loan of DKK 14.0 million, and net of DKK 2.0 million in dividend paid to minority shareholders and mortgage loan repayments.
In 2014, cash flows from financing activities were negative by DKK 9.5 million, which was also due to the payment of DKK 3.8 million in dividend to minority shareholders and repayments made.
For 2015, total cash flows were DKK 48.9 million compared to a negative DKK 14.5 million in 2014.
In relation to customers and suppliers, it is important that North Media constitutes a strong and long-standing business partner. North Media must be able to partake actively in and exert its influence on the rapid development of the media market, for which reason solid capital resources are considered to be a key competitive parameter.
The Board of Directors regularly assesses whether the Group's capital structure is consistent with the interests of the Company and its shareholders. The overall objective is to ensure a capital structure that supports long-term financial growth while maximising returns to the Group's shareholders by maintaining a naturally balanced debt-to-equity ratio.
It is group policy to distribute dividend insofar as such distribution is considered reasonable, given the existing capital structure and liquidity as well as the earnings expectations.
It is also group policy to be self-supporting to the extent possible, although the Group's properties are financed by way of long-term loans. The Group's overall financial strategy is consistent with that of last year.
The Group's capital structure is composed of cash and cash equivalents inclusive of listed shares and share-based investment funds, long-term mortgage debt and equity.
The Company's Board of Directors reviews the Group's capital structure twice a year in connection with the presentation of the Interim Report and the Annual Report. As part of this review, the Board of Directors considers the Group's cost of capital and the risks associated with the various types of capital.
At 31 December 2015, the Group had cash and cash equivalents of DKK 92.4 million, and shares and share-based investment funds totalling DKK 196.1 million. In addition, the Group has an undrawn overdraft facility in the total amount of DKK 25 million. Thus, cash resources (including overdraft facility) stood at DKK 313.5 million at the end of 2015.
This is DKK 65.3 million more than last year when the Group had cash and cash equivalents of DKK 43.5 million and DKK 204.7 million worth of securities. This increase in cash resources has occurred in spite of the poor performance, and the main reason has been that the capital requirements have been far lower than amortisation and depreciation for the year.
Moreover, the Group has mortgage loans inclusive of negative fair value of interest-rate swaps amounting to DKK 162.0 million. The Group also has an acquisition price payable relating to the acquisition of Lokalaviserne Østerbro og Amager A/S for a total of DKK 12.7 million. DKK 6.6 million of this acquisition price payable falls due in 2016, whereas the remaining amount falls due between 2017 and 2019.
At year-end 2015, net of the acquisition price payable, the Group's net interest-bearing cash position thus totals DKK 113.8 million.
At year-end 2014, the Group's net interest-bearing cash position was DKK 67.6 million.
Strong financial resources are considered an important strategic strength in the present market for achieving the goal of a group relying on several profitable pillars and generating high earnings. Overall, the Group has achieved its performance target for 2015 and a strategic breakthrough with NoAds+. However, the Board of Directors wants to see stronger evidence of progress in performance before a decision is made to distribute dividend. As in previous years, the Board of Director's objective is to achieve business stability that establishes distribution of dividend as an annually recurring event.
Against this background, the Board of Directors will recommend at the Annual General Meeting of 8 April 2016 that no dividend be paid for the financial year 2015.
At 31 December 2015, the Group's equity stood at DKK 522.0 million, which is DKK 10.4 million lower than at yearend 2014.
No treasury shares were purchased or sold during the year.
At 31 December 2015, the Group had 1,485,000 treasury shares, corresponding to 7.4% of share capital and votes in North Media A/S.
Unfair price competition by Post Danmark had a material impact on FK Distribution's revenue and earnings basis in 2015.
FK Distribution's "you choose" service, NoAds+, is becoming more and more popular with the consumers. This service and FK Distribution's development of products in other areas are to ensure retailers an effective future marketing platform and this way build FK Distribution's position as retailers' provider of offers to consumers.
FK Distribution distributes unaddressed printed matter, NoAds+ matter and addressed products as well as free newspapers to all households in Denmark. Distribution is handled by 10,000 paper boys/girls and men/women who between them run 16,000 routes. FK Distribution is also Denmark's largest provider of digital retail leaflets and offers to Danish households through the consumer portal minetilbud.dk.
FK Distribution services a large number of enterprises operating in the retail trade. The customer portfolio includes everything from small grocery stores to the largest retail chain stores.
Post Danmark is market-leading in the distribution of unaddressed printed matter in Denmark, with FK distribution as a clear No. 2.
FK Distribution is Denmark's largest private distributor of printed matter. It distributes retail leaflets and disseminates information and commercial offers on behalf of supermarket chains, DIY retailers, white goods and electronics dealers and other retailers to every household in Denmark – both in printed and electronic form – and is therefore a vital business partner for Danish retailers.
However, FK Distribution is not only responsible for the link between consumers and retailers. In recent years, FK Distribution's activities have, by demand of the customers, increasingly been moving towards analysis and business intelligence. This approach and in-depth market insight help FK Distribution maintain strong relations with large supermarket chains as well as small players in the market.
The consumers' heavy interest in the retail leaflets and their impact, which is markedly higher than other types of ads, still make them the retail shops' preferred form of advertisement. Door-to-door distributed advertisements drive a major flow of customers that can be measured directly through the shops' sales from week to week, and
so they are retailers' most important and effective advertising medium. Neither local newspapers, TV nor the Internet comes close to having the same level of impact or cost efficiency.
In 2013, the volume of printed advertisements dropped by 5% as a direct response to the adoption of the advertising tax in 2012, and by 8% in 2014. According to estimates, the volume of door-to-door distributed advertisements was 2.07 billion leaflets for 2015, and so the volume fell by approximately 6% as expected.
With the new Finance Bill for 2016, the advertising tax has been abolished. Even though the tax was never implemented, the advent of it led to less printed matter and lower weight per item of printed matter – an effect that has now become permanent. So FK Distribution does not expect the abolishment of the tax to affect future volumes. This is why volumes are in 2016 estimated to go down by around 5%. The years ahead will see further reductions in volumes, although at a slower pace.
For many years, the number of households not wanting to receive unaddressed printed matter and thus having opted for the No Ads, Please arrangement has gone up. 2015 was no exception and the share of such households is now nearly 50% of all households.
To counteract this tendency of more and more households opting for the No Ads, Please arrangement and to accommodate a long-held wish by consumers to choose the printed matter they want to receive, FK Distribution developed the NoAds+ concept under which each household may themselves choose which printed matter distributed by FK Distribution they want to receive. In addition, households may even suspend receiving printed matter during holiday periods.
The NoAds+ concept was welcomed extremely well by the consumers. Consumers now receive the printed matter they want to use, and retailers save the printed matter some households do not want to use anyway.
At year-end 2015, the number of households having opted for FK Distribution' NoAds+ had reached 550,000 and now accounts for more than 25% of households wanting to receive printed matter.
Retailers also achieve another benefit in that the retail leaflets they distribute have been actively opted for by the consumers. They are being read more intensively and longer than before.
Also, NoAds+ is a more sustainable solution, which has drawn political recognition for its ability to reduce paper waste.
FK Distribution expects the number of households having joined the NoAds+ to go up next year, although at a slower pace.
TNoAds+ is one of FK Distribution's future core pro-ducts. The strategy will continue into 2016 when FK Distribution will refine and further develop the product for the benefit of both consumers and customers.
Consumers are increasingly looking for good grocery bargains on online media as well. In 2014, FK Distribution therefore relaunched its digital consumer platform, minetilbud.dk, which aside from letting consumers subscribe to NoAds+, also provides them with online retail leaflets, making it possible to search for daily offers via mobile phones, tablets and PC. Thanks to minetilbud.dk, FK Distribution responds to consumer desires of reading daily offers while being on the move. And by using the synergies between Print and Online we can further increase the effect of our customers' marketing effort.
In 2015, FK Distribution expanded the functionality of minetilbud.dk so that consumers may now use locality-based services to find the best offers in their proximity and through these services receive messages when it is possible to buy selected goods at attractive prices.
With more than a million downloads of the minetilbud app, FK Distribution has already left a solid footprint in the market for online reading of consumer offers. The amibition is to be the leading platform for reading online bargains, enabling Danish consumers to easily read leaflets and find good bargains from retailers.
In 2016, FK Distribution intends to refine and further develop attractive functionality in order to build closer relations between shops and consumers. This way, FK Distribution will strengthen the digital area and be able to expand its range of services when we advise customers, and hence enhance customer relationships.
Dansk Supermarked is FK Distribution's largest customer, and much to our satisfaction the existing cooperation agreement of the parties was renewed. Until 31 December
2017, FK Distribution is to handle the distribution of unaddressed printed matter and NoAds+ matter for Bilka, Føtex and Netto.
However, FK Distribution had to realise that it was not possible to reach an agreement with Coop on a renewal of the contract about the distribution of retail leaflets of the Danish supermarkets Kvickly, Fakta, SuperBrugsen, Irma and DagliBrugsen. The contract expired 31 December 2015. The lost contract is estimated to have an adverse effect on FK Distribution's revenue and earnings in 2016 compared with 2015.
The market for distribution of printed matter, local and regional newspapers is characterised by fierce price competition. To respond to this competition, FK Distribution has developed a production and delivery model that is among the most efficient in the industry in Europe. At the same time, FK Distribution has focused on developing new products such as NoAds+ to accommodate the customers' future distribution requirements in a constantly changing market.
In 2015 too did Post Danmark A/S, in FK Distribution's opinion, abuse a dominant position to unfairly make dumping and bundling offers. FK Distribution holds the view that Post Danmark A/S' dumping and bundling offers are based on an artificial allocation of costs. Since FK Distribution, unlike Post Danmark A/S, cannot finance its costs by income other than distribution of printed matter, the company has lodged a complaint against Post Danmark A/S before the Danish Competition and Consumer Authority, which started an investigation in 2015 into the circumstances.
Conversely, Post Danmark A/S filed a complaint against FK Distribution with the Danish Competition and Consumer Authority claiming that FK Distribution was to have violated the ban on anti-competive agreements.
FK Distribution holds the view in this respect that Post Danmark A/S filed its complaint for the purpose of further lowering of its prices to below cost. FK Distribution believes that Post Danmark A/S' current pricing and bundling represent unfair competition in the market for distributing unaddressed printed matter.
Despite a focussed campaign and very satisfactory consumer acceptance of NoAds+ and minetilbud.dk, FK Distribution has in 2015 had lower revenue and a declining market share. This lower revenue and the declining market share are a result of intensified price competition on the part of Post Danmark and a generally declining market.
As a result, revenue was down by 8% on 2014. Proportionately, the decline in performance is larger because considerable resources were allocated to the development of the NoAds+ concept and minetilbud.dk.
Source: Report from the Danish Competition and Consumer Authority: "Special offers with Danish retailers 2012 and Gallup Adfact 2012 and 2013"
In 2016, the spotlight will be on developing and introducing new products and services within Print and Online. FK Distribution will maximise the synergy effects existing across the media channels. Together with its customers, FK Distribution will concentrate on further spreading and refining NoAds+ to enable FK Distribution to offer an even
more efficient marketing channel with fewer retail leaflets, but with more readers. This will increase the value of the retail leaflet significantly as it will become more popular among consumers. At the same time, retailers will achieve a higher return on their marketing costs.
FK Distribution expects that even more retail leaflets will be read online in the years ahead. In 2016, focus will be on further developing, refining and launching new functionalities at the consumer portal, minetilbud.dk, in the expectation of becoming the consumers' preferred digital consumer portal and thus establishing a new and efficient consumer leaflet channel for FK Distribution's customers and business partners.
Continued development of FK Distribution's business, products and services will enjoy the primary focus of Management in 2016 and is set to ensure a competitive position for FK Distribution with close interaction across products and media channels. By increasing and tapping on the value of the retail leaflet, the ambition is to enlarge FK Distribution customers' access path to consumers.
Overall, the market for door-to-door distributed advertisements is changing rapidly. FK Distribution responds to this change by adjusting its business models to the actual needs of consumers by focusing on No Ads+, addressed distribution and minetilbud.dk, etc. All in all, the objective of this strategy is to secure FK Distribution a competitive position by close interaction across products and channels.
Based on the market developments in 2015, the expectations for 2016 are subject to some uncertainty.
Thus, the speed at which the market changes is subject to uncertainty. Developments in 2015 confirm the propriety of the strategic course charted by FK Distribution. This course will ensure that, also in future, will FK Distribution be the provider of the preferred marketing channels to consumers for the retail trade.
Expectations are that FK Distribution's revenue will drop in the range of 15 to 20% in 2016 as a consequence of the decline in market and marketshare and continued price dumping by Post Danmark. The drop in revenue will affect the opera-ting profit adversely, and costs for refining and marketing the No Ads+ and the digital consumer platform, minetilbud.dk, will also affect earnings. So, expectations are that FK Distribution's performance for 2016 will be much lower than that for 2015.
However, FK Distribution expects that the new offensive marketing strategy in 2016 involving increased focus on NoAds+ and minetilbud.dk will enable FK Distribution to build its market position.
| PERFORMANCE | STRATEGY | OBJECTIVE | |
|---|---|---|---|
| Performance for 2015 | Strategy | Outlook for 2016 | |
| Market development and position |
Decline in volume and price pressure continued with nega tive consequences for market development. Abolishment of advertising tax. |
Secure new co-operation agreements through a new product mix, high effect, flexi bility, high quality and cus tomer service. |
Build market position and improve productivity to re duce effect of negative market pressure. |
| Product and business development |
Spreading of the NoAds+ under which consumers may choose which retail leaflets they want to receive and which enhances the marketing value for advertisers. |
Build on and refine the No Ads+, minetilbud.dk and ad dressed products. |
Further spreading of NoAds+ and development of new attractive add-on services. Development of complemen tary online services. |
| Finances | Decline in revenue and earn ings as expected at the begin ning of the year. |
Limit decline in revenue and EBIT in 2016 despite the loss of market share and price dumping from Post Danmark. |
BEKEY realises objectives of increased growth, internationalisation and new product launches.
BEKEY develops and sells electronic door access control systems, which, by way of the Internet and apps, distribute and manage digital keys to users' mobile phones. Via the mobile phone, the digital key can open and close doors in, for example, private homes and companies, and replaces the ordinary physical door key. This saves time and money and increases security control at each location.
BEKEY also deals in other welfare technological solutions, including emergency calls to the municipal elderly care services.
Municipal elderly care and healthcare services in Denmark, Sweden and Norway. Also, business-tobusiness customers as well as private citizens.
BEKEY is market leading in both the business-tobusiness market and the municipal market in Denmark.
The Danish electronic key systems market is booming. Growth is driven, for example, by the public sector's increased demand for easier, cheaper and more secure access to citizens in need of care and nursing. For the municipal elderly care and healthcare services whose cost-saving opportunities are considerable with BEKEY's access control systems.
Growth in the business-to-business segment and the private customer segment is also on the rise. Thus BEKEY has achieved an increase in the business-to-business segment towards the end of 2015.
Since launching and commercialising its solutions, BEKEY has led the market and won most of the public and municipal tenders in Denmark despite intensified competition.
In 2015, the municipal governments put out 14 public tenders in the area, of which BEKEY won nine. The number of municipal tenders and the implementation pace have been lower than expected at the onset of the year, which has reduced growth. However, municipalities are very satisfied with BEKEY's electronic key systems, which are being tested by or in operation with 22 municipalities at 31 December 2015.
In Q1 2015, BEKEY supplemented its product programme with emergency call systems that are in demand by several municipalities and nursing homes and has since then won tenders for the delivery of such systems to the municipalities of Odense, Århus and Svendborg. Also, a newly developed key box solution was added to the product programme in 2015, and this solution too may be activated by mobile phone and managed via BEKEY's proprietary internetbased management system, NETKEY.
BEKEY's activities have increased abroad as well in 2015. Focus has particularly been on introducing the product programme through campaigns aimed at public sector institutions in Sweden and Norway. This has sparked considerable interest, resulting in BEKEY's access control systems now being tested by or in operation with two Swedish and three Norwegian municipalities. Furthermore, at the end of the year BEKEY has formed a number of international partnerships in the Netherlands, Norway, Sweden, Finland and the USA.
BEKEY has introduced an access control product for the private customer market. Based on a user-friendly and 100% self-service platform, expectations were that the product would contribute to growth already from 2015. However, the market has been sluggish in 2015, which has caused sales to private customers to be lower than originally anticipated. But in the latter part of 2015 BEKEY experienced an increase in demand by international retail chains in particular, which inspires optimism for the private customer market.
With FK Distribution being the largest customer, BEKEY has a special "systems network" in Copenhagen in which the BEKEY system is installed in more than 22,000 stairway door units – or more than 50% of all stairway doors – in Greater Copenhagen. In 2015, about 5,000 new installations in stairway doors were made. FK Distribution, Bladkompagniet, Post Danmark as well as Årstiderne now use the system in some of their distribution services. BEKEY
expects continuing growth and the number of installations to be around 28,000 by year-end 2016.
BEKEY's level of activities soared in 2015 because of heavy focus on growth – both domestically and internationally. The higher earnings generated have been reinvested in expanding the staff by four new employees to a total of 24 and in product development, which will result in more products being added to the product programme in 2016. Consequently, operating results for the year were, as planned, negative and slightly lower than for 2014.
In 2015, BEKEY optimised its IT platform considerably so that the user experience by both private and public sector customers has been improved. At the same time, the development of products has gathered speed, and in 2016 we will see further product launches in a market where demand is on the rise in all segments. Although the development set-up remains aggressive, the operating loss is expected to have been reduced in 2016 compared to 2015.
| PERFORMANCE | STRATEGY | OBJECTIVE | |
|---|---|---|---|
| Performance for 2015 | Strategy | Outlook for 2016 | |
| Market development and position |
Market position in the munici pal market improved further in a market characterised by intensified competition. International partnerships formed at the end of the year. |
For both domestic and inter national sales to develop a product with an all-in partner concept including services for all elements within sales, service and operation, a prod uct that will thus become a scalable distribution network. |
Further build the position in the municipal market, particu larly in the other Nordic coun tries. Boost sales to the business-to business segment, including to international distributors. |
| Product and business development |
Software element of the product optimised. New and much improved version of the thumb turn launched just before Christ mas in 2015. Launching of BEKEY key box. |
In 2016, the development process is primarily to support all details of using BEKEY, including support and other elements of the overall expe rience of the concept. |
Integrate BEKEY with Z-Wave and develop fittings that will ensure compatibility with even more types of lock systems, both domestically and interna tionally. |
| Finances | Revenue doubled in 2015. Contribution margin main tained, but much higher ca pacity costs, including in creased product development costs. |
BEKEY to focus on upping current fixed income, for example, through sales mo dels which increase current payments and reduce initial costs of acquiring the product. |
Increase revenue by more than 50%. Maintain contribution margin. Slightly reduce capacity costs. Improve EBIT. |
Søndagsavisen is one of Denmark's largest newspaper publishers and among the best to retain readership on its publications. This position was enhanced in 2015 by launching testuniverset.dk and relaunching sondagsavisen.dk. With these steps, Søndagsavisen continues its development towards becoming a multi-platform-based media company.
Søndagsavisen A/S is the publisher of Søndags-avisen, eight local newspapers in Copenhagen and Frederiksberg as well as Helsingør Dagblad, which also publishes Lokalavisen Nordsjælland. Among its activities are also a 50% stake in Vestsjællandske Distriktsblade, which publishes three mid-week newspapers and the regional edition of Søndagsavisen. In addition, it is the operator of the online platforms of sondagsavisen.dk and testuniverset.dk.
All brands, retailers, estate agents and other advertisers in search of a wide and well-defined geographical coverage area.
Søndagsavisen estimates its market share of the overall advertisement market for dailies and local newspapers at approximately 4% in H1 2015.
Every week, North Media's newspaper operations publishes 1.6 million door-to-door distributed newspapers shared among 36 free newspapers and one daily. Through its publications and online platforms sondagsavisen.dk and testuniverset.dk, North Media's newspaper operations are every week in contact with more than 1.3 million Danes.
The objective of these activities is to achieve maximum economies of scale by capitalising on North Media's unique production setup, its extensive knowledge about advertisement sales and a relevant editorial content for door-todoor distributed free newspapers. The newspaper activities are grouped under Søndagsavisen A/S, ensuring optimal use of cross-disciplinary functions such as pre-press, purchase of print, advertisement sales administration, IT and back-office functions.
At the same time, the publishing of newspapers produces considerable synergy effects for the Group's distribution operations as many of the costs of the newspaper activities arise from distribution purchased from FK Distribution.
As a result of the emergence of TV-on-demand, viewers rejecting traditional TV stations and the spread of NoAds+, North Media's newspaper operations are expected to outperform the market in the years ahead. This development hampers advertisers' access to the wider target groups via traditional electronic channels and non-free print media. Instead, free newspapers and strong brands such as Søndagsavisen and the Group's local weeklies will increasingly become more attractive media to advertisers, which, in the long run, is expected to result in higher prices of push marketing and volume growth.
Søndagsavisen is Denmark's largest newspaper measured by circulation numbers, readership or geographical coverage. The free newspaper is funded by ads and has 1,114,000 readers every week (source: Gallup, H1 2015). It is published in 25 regional versions, whose ads are adjusted to the individual region based on analyses of the inhabitants' purchasing, traffic, movement and behavioural patterns in the relevant area. The editorial content, on the other hand, is the same across regions and focuses on society, consumption, food and health, personal finances and family and work life centring on the modern family with young children.
In 2015, Søndagsavisen's readership went down by approximately 3% to 1.1 million readers – a development corresponding to general market developments. The 2015 decline in Søndagsavisen's revenue was marginally higher than the 5% reduction seen by the market. So the objective of regaining a better development in revenue and readership than the rest of the market was not realised.
This is why a series of promotional measures were taken in H2 2015. Among them are the appointment of dedicated online sales persons, the launching of new print and online products and the intensification of focus on utilising regional advantages. Also, two major initiatives have been implemented: Sale of inserts giving advertising customers access to No Ads, Please households and collaboration with local agents on local editions of Søndagsavisen in selected
areas. These measures are expected to bring Søndagsavisen back on the growth track in 2016.
Customers' continued expectation of digital advertising opportunities has resulted in heavy focus on ensuring critical mass for sondagsavisen.dk in the form of users. This effort has led to a 231% growth rate in the number of unique users and to an inflow of more than 36,000 weekly newsletter recipients in 2015.
Testuniverset.dk was launched in September 2015 as a direct continuation of Søndagsavisen's primary subject area. The site helps consumers make safe purchasing decisions within product categories covering more than two thirds of daily consumption. The goal is not only to have many users but also especially to have users who are of great value to the advertisers and thus provide a basis for achieving higher prices with the customers.
Copenhagen local newspapers gain market shares
In 2013, North Media acquired eight local newspapers in Copenhagen with a total circulation of around 280,000 papers per week. This acquisition was a considerable enhancement of North Media's newspaper activities in Copenhagen, causing North Media to be the undisputedly largest publisher in the capital. With cost synergies already having been realised, the 2015 focus has been on developing the editorial products and the sales organisation.
Source: TNS Gallup: Index Danmark 1 H 2015
Both have proved a great success. While readership of all other local weeklies in Denmark went down by 0.5%, the Copenhagen readership of North Media's weeklies went up by 5.5%. Also, the development of the sales organisation helped ensure increasing revenue from retail customers, which negated the decline in revenue from Danske Lokale Ugeaviser, which is a joint sales organisation for nationwide advertisements, and from estate agents. Lastly, a reorganisation of the editorial office has ensured better operation and improved efficiency and provided a foundation for continued strategic development of the local newspapers.
In 2016, these newspapers must maintain strong focus on the publication area and thus play a central role in the local debate and business doings. The intention is also to strengthen the newspapers' role as the focal point of the democratic debate in Copenhagen, giving particular attention to matters of interest across the local districts.
For the first time in four years, Helsingør Dagblad saw a notable decline of 4% in circulation, which was compensated for, however, by a 5% price increase, as a result of which income from newspapers sold remained intact.
In 2015, ad revenue of Lokalavisen Nordsjælland dropped by 3% on 2014, which is slightly less than the decline generally seen by the weeklies sector. The primary reason is that the newspaper issued a magazine that was out in Elsinore and the surrounding area as well as in Helsingborg, Sweden in June and November with total revenue of close on DKK 1 million.
When finally phased in by 2017, the conversion of the media subsidy will entail a reduced subsidy of DKK 1.5 million for Helsingør Dagblad. To maintain a positive bottom line for the newspaper, the target is to expand the online activities and issue special publications such as a yearbook and a builders' guide.
Source: Dansk oplagskontrol H2 2014 –H1 2015
| Publications | Distributed to |
|---|---|
| Søndagsavisen, 25 reg. edditions | 1,225,038 |
| Amager Bladet | 68,010 |
| Uge Nyt | 53,285 |
| Nørrebro/Nordvest Bladet | 48,765 |
| Frederiksberg Bladet | 44,544 |
| Østerbro Avis | 36,562 |
| Lokalavisen Nordsjælland | 32,932 |
| Valby Bladet/Kgs. Enghave | 30,693 |
| City Avisen | 20,496 |
| Korsør Posten/Skælskør Avis | 20,818 |
| Vanløse Bladet | 15,038 |
| Vesterbro Bladet | 16,199 |
| Helsingør Dagblad | 5,337 |
| Total | 1,617,717 |
Despite its position as Denmark's largest newspaper, Søndagsavisen and the local mid-weeklies have been prevented from receiving the new media subsidy, which compensates the media for approximately 25% of the editorial costs. The reason given is a provision of the law which prevents media with an ad content above 50% from receiving the subsidy. Søndagsavisen interprets this as discriminatory treatment conflicting with the EU competition rules, for which reason the newspaper has brought the new law on media subsidy before the European Court of Justice. This year too did Søndagsavisen participate in the Medienævnet's hearing on the media's experience with the media subsidy arrangement and advanced arguments concerning the unfair treatment of local newspapers with respect to the media subsidy.
The advertisement market developed as expected in 2015, and revenue from the newspaper operations was on a par
with the market. The loss of market shares for regional customers and estate agents was larger than originally assumed, and it was not outweighed by a favourable development seen for Søndagsavisen's large customers and chains. The Copenhagen newspapers, however, did much better than the rest of the market as revenue from own sales was much better than anticipated, whereas the housing market and particularly DLU lost considerable market shares. Overall, their revenue for 2015 was 5% lower than the year before. Operating profit for the year also decreased, however, with some of the decline in revenue being compensated for by reductions in costs.
All forecasts suggest that the structural fall in the overall printed ad market will continue in 2016. This is why North Media Aviser has launched a string of initiatives designed to ensure that the newspapers of the Group can beat the market and achieve limited revenue growth. At the same time, costs will remain a heavy focal point.
The largest and most important initiative will be to boost sales of newspaper inserts for large national chains which have had difficulties in reaching a sufficiently wide community, due to the development in the No Ads, Please arrangement because of the success of NoAds+. Today, Søndagsavisen is the only printed medium able to ensure a wide reach in urbanised Denmark.
In 2015, Søndagsavisen experienced highly intensified competition in several markets. To respond to this, a new cooperation model with local agents was launched in early February 2016, under which they will in principle be operating their own local section of Søndagsavisen.
Finally after two years of building up digital platforms North Media Aviser will up revenue from its digital business.
Overall, performance for 2016 is expected to be on a par with that for 2015.
| PERFORMANCE | STRATEGY | OBJECTIVE | |
|---|---|---|---|
| Performance for 2015 | Strategy | Outlook for 2016 | |
| Market development and position |
Søndagsavisen lost marginal market shares whereas the local newspapers won market shares in a market expected to have gone down by approxi mately 5%. |
Focus on new formats for volume-driven advertising customers, cooperation with local partners on local sections of Søndagsavisen and utilisa tion of regional advantages. |
Enhance market position in spite of continuing declining market trends. |
| Product and business development |
Relaunching of sondags avisen.dk and launching of testuniverset.dk helped strengthen the position as a media house. |
More focus on retaining and increasing readership through enhanced quality. |
Up number of readers per newspaper and improve sales efficiency. |
| Finances | Revenue decline largely out weighed by lower costs. |
Slight revenue growth and earnings on a par with 2015. |
Focus on growth and innovation secured BoligPortal's market position in 2015. 2016 will see increased earnings from new business areas and the establishment of other strong sources of revenue.
BoligPortal is a tool to match housing providers with housing seekers and its PrisTjek feature (price-check) helps Danes save money, for example, when they change accommodation.
With more than 110,000 dwellings advertised annually and over 2.5 million visitors every month, BoligPortal is one of Denmark's largest market places for dwellings, and the largest within rental property to easily and swiftly link landlords with housing seekers. The business model primarily relies on ad packages for landlords, housing sellers and housing seekers. Basic ad packages are free while searches for, letting and sale of dwellings may be optimised by purchasing premium services.
In 2015, BoligPortal maintained heavy focus on developing business and products in order to sustain its market-leading position, increase presence on mobile platforms and social media for rental property and launch new products and services for both landlords and tenants. Another focal point has been the establishment of a self-sale platform for cooperative and owner-occupied dwellings.
A market place for housing seekers, housing sellers and landlords. This market place provides an opportunity for effective housing advertising and easy access to dwellings for tenants and buyers.
The BoligPortal PrisTjek feature that helps Danes save money, for example, on insurance, telephone and financial services when they change accommodation.
Housing seekers, housing sellers and landlords as well as business-to-consumer advertisers – both services providers and banner ad advertisers.
BoligPortal is among Denmark's largest and most effective housing portals and leading in the rental property market.
In 2015, the housing market has been characterised by a heavy demand for housing in the large cities, and as a result the need to advertise particularly rented accommodation here has gone down. In the rest of the country, supply has been stable, and demand on the rise. Market developments have been contributory to sharpening competition, with ad portals, social media and new players having launched new offers for the rental property and owneroccupied housing markets.
At BoligPortal, the number of advertised rental housing units has gone down by 9%, which is consistent with market developments. The market position therefore remains the same.
In 2015, the basis for increased growth and innovation has been fortified by a new strategy, focussing on improved matching of housing seekers, housing sellers and landlords as well as on considerably strengthening the competencies and agility of the organisation.
In Q2 2015, BoligPortal launched a string of new products which improved the matching functionality and optimised the user -friendliness of both internet -based and mobile phone -based platforms in the areas of rental property, co operative and owner -occupied dwellings. This increased focus on social media and mobile platforms has also had the effect that the BoligPortal mobile phone app has now been downloaded by more than 300,000 customers.
In 2015, the number of co -operative and owner -occupied dwellings advertised on BoligPortal went up by 13% on 2014. Particularly in self -sale advertisements, BoligPortal was able to increase its market share although it is still an area accounting for a small part of the overall market for the sale of co -operative and owner -occupied dwellings. Because of this, BoligPortal has reduced its promotion of the area and instead concentrates on improving the matching of housing seekers and housing sellers.
In the spring of 2015, BoligPortal introduced a new product for sellers of owner-occupied dwellings who were given the opportunity to maybe put up their home for sale. This product has upped the number of advertised dwellings, but does not yet contribute much to the total revenue from the co-operative and owner-occupied housing area.
Lastly, BoligPortal launched a new service, BoligPortal PrisTjek, in the autumn of 2015, a service helping housing seekers to save money, for example, when they order Internet and TV services, telephony, raise a housing loan or need a remover.
BoligPortal realised revenue for 2015 on a par with that for 2014. Revenue was lower than originally estimated, partly because the level of activities in the co-operative and owner-occupied housing area did not match expectations, partly because BoligPortal changed its pricing models for rental property in Q3 2015.
This change led to a shift in revenue; however, the change has already secured more users and a higher conversion rate.
Marketing costs were increased in 2015 to improve awareness. Also, the product development costs increased as planned, which, overall, has resulted in the operating profit – as expected – being lower than for 2014.
Based on the considerable development activities carried out in 2015, the 2016 focus of BoligPortal will be on growing both revenue and earnings. Growth will be created through the changed pricing models that were introduced in 2015, the launching of new products for housing seekers, housing sellers and landlords as well as much higher revenue from business-to-consumer advertisers.
| PERFORMANCE | STRATEGY | OBJECTIVE | |
|---|---|---|---|
| Performance for 2015 | Strategy | Outlook for 2016 | |
| Market development and position |
Market position maintained in a market characterised by intensified competition. |
New improved matching of housing seekers, housing sellers and landlords to boost the market. |
Intensified competition calls for more investments in prod uct development. |
| Product and business development |
Improvements of core product and mobile feature. A new self-sale product increased advertisements from housing sellers. Launching of BoligPor tal PrisTjek feature. |
Longer customer retention period and more customers on mobile feature. |
Focus on mobile feature, improvement of core product and launching of complemen tary services for customers. |
| Finance | Revenue maintained and earnings reduced because of changed pricing models and investments and product development and marketing. |
Allocation of more resources for product development. |
Higher growth (above market level) and increased earnings. |
In Sweden, BostadsPortal is dealing in the same business areas as BoligPortal in Denmark and applies the same basic business models. In addition, BostadsPortal has homes for exchange, which is a key segment in Sweden. The vision is to gather all housing advertisements in Sweden in one site and in this way create an optimal basis for contact between the players in the housing market.
BostadsPortal is primarily an aggregating site retrieving housing advertisements from hundreds of other websites and making them accessible via BostadsPortal in a simple and transparent manner. In addition, housing providers may opt to post advertisements directly on BostadsPortal, which is especially the case for the home exchange segment.
In 2015, a targeted effort was made to increase the supply of advertisements by way of further aggregation. These efforts were successful, and the volume of active housing advertisements grew by 55% to approximately 70,000 advertisements. All advertising segments saw progress, but the co-operative and owner-occupied housing segments in particular boosted.
While the supply of advertisements grew, BostadsPortal also got a firmer hold on mobile users, which led to more traffic as well as revenue.
The market for BostadPortal's solutions is characterised by fierce competition from several large and well-established
players as well as by a highly dynamic plethora of challengers.
We will maintain the strategy of aggregation in 2016 while steadily adding more value-creating services so that we may attract and retain more customers. In 2016, this will include increased focus on our matching services as well as expanding and activating our presence on the social media for them to serve as drivers of traffic, inflow of advertisements and revenue.
The rental property and home exchange segments will remain our main focus, and at the same time a basis will be created for growth within the co-operative and owneroccupied housing segments.
Virtual services (primarily advertising and matching) for housing seekers, housing sellers and landlords in Sweden.
Housing seekers and housing providers, primarily within the rental property and home exchange segments.
Aggregating site for most dwellings in Sweden. Own advertisements account for a small, yet increasing part.
Higher market share for Emply Hire among online recruitment systems, but disappointing advertisement revenue growth in the Ofir job universe in 2015.
Ofir is the owner and operator of the Ofir job site, every day facilitating contact between hundreds of employers and thousands of active or passive job seekers.
Ofir is also the sole distributor of Emply Hire, an innovative online recruitment system aimed at large and medium-sized enterprises in Denmark and Sweden.
Public and private sector employers wanting new employees and posting job ads in Ofir's job universe. More and more customers use Emply Hire to ensure an integrated, effective and targeted recruiting process.
Ofir is among Denmark's largest privately owned job sites.
Ofir's vision is to offer employers a unique and competitive platform for recruiting new staff. The activities centre on two business areas:
Emply Hire is integrated with Ofir's job universe, thereby linking recruiting processes and advertising campaigns smoothly together. This creates unique value for the customers and secures considerable business synergy effects for Ofir.
The positive development having gradually surfaced in the job ads market since mid-2013 continued in 2015. In a year in which the demand for skilled labour increased in pace with a generally more favourable outlook for the Danish business sector, the job ads market which is dominated completely by online advertising grew by 19% to a total value of approximately DKK 315 million from a total value of approximately DKK 265 million 2014.
The Ofir job universe, which give employers the option to choose between different media packages, depending on job title, job category and workplace, is being developed on a regular basis, and new, relevant media are constantly added. In H1 2015, focus was particularly on adding social media such as Facebook and LinkedIn, whose significance in terms of recruitment has been growing considerably. New media have been added to the Ofir job universe, which has prompted a massive increase in the number of applications received by employers when posting their vacancies through the site.
However, this stronger platform has not generated the expected increase in advertising activities, one of the reasons being that the sales synergy effects between Emply Hire and the Ofir job universe have yet to unfold at a satisfactory level, as was expected at the beginning of the year. All in all, advertisement sales have therefore been weaker in 2015 than expected, and Management's original target of incre-ased revenue in 2015 was not achieved. Because of this, Ofir's share of the job ads market fell from approximately 5% in 2014 to approximately 4% in 2015 (measured in DKK).
In 2015, the online recruitment systems market has been stable with a trend towards higher investment appetite. The potential customer segment is composed of the 1,500 largest private and public sector businesses in Denmark, and the share of them using an online recruitment system has increased moderately.
Being sole distributor, Ofir is responsible for selling, implementing and supporting the Emply Hire recruitment system in Denmark. As expected, new sales of Emply Hire developed positively in H1 2015, partly through the signing of several new contracts, partly through stable and satisfactory operations. However, it was not possible to maintain this strong momentum in H2 2015 when sales of new systems disappointed. Overall, however, Ofir has entered into contracts in 2015 for the sale, implementation and support of 36 new recruitment systems, bringing the total number of licence agreement solutions to 156 at year-end 2015. In 2015, the market share went up from 14% to 15%, making Ofir the second largest provider of online recruitment systems in Denmark, which is considered to be of material strategic significance to Ofir's overall business concept.
Ofir upped its revenue by approximately 13% in 2015, primarily as a result of increased licence and support income from Emply Hire. Advertisement sales were on a par with the year before and thus not up to the expectations for growth laid down by Management at the beginning of the year.
Throughout the year, Ofir has taken a pro-active approach to marketing and platform development, meaning that, combined with the non-occurring growth, the expectations for a reduced operating loss were not fulfilled. Because of this, Ofir restructured its organisation in Q3 2015, which has reduced capacity costs. Overall, Ofir's operating loss for 2015 is on a par with that for 2014.
EN UNIK KOMBINATION Ofir jobunivers, Danmarks største medienetværk
til jobannoncering, i unik kombination med Emply Hire, et rekrutteringssystem i verdensklasse
The increase in Emply Hire's market share is to be increased further in 2016. Also, the synergies between the recruitment system and the sale of advertisements to the Ofir job universe is to be realised and, combined with the effect of the marketing initiatives launched, to help boost advertisement sales. Together with the costs cut by Ofir in H2 2015, growth will reduce the operating loss.
| PERFORMANCE | STRATEGY | OBJECTIVE | ||
|---|---|---|---|---|
| Performance for 2015 | Strategy | Outlook for 2016 | ||
| Market development and position |
Progress in licence fee income and increased market share in the market for sale of online recruitment systems. Status quo in ad sales from Ofir's job universe. |
The integration of Ofir's job universe into Emply Hire is set to improve sales of Emply Hire and sales of ads. Refinement of the partner media network in Ofir's job universe. |
Cautious widespread optimism will prompt general market growth on a par with 2015. |
|
| Product and business development |
In 2015, vacancies advertised through the Ofir job universe have produced much better results measured by the num ber of applicants. Transformation to a new platform for advertisers/site for employers completed. |
With a built-in Ofir job uni verse, Emply Hire is intended to improve customers' posi tive experience with both products. Refinement of the site towards a self-service universe and optimisation of user experience. |
Refinement of Ofir's job uni verse aimed at securing even more applicants for vacancies. Increase in customers' use of media recommended by Ofir. The Ofir platform to be devel oped further. |
|
| Finances | Limited revenue growth and the same financial perfor mance as for 2014. |
Solid reduction in operating loss in 2016, driven by adver tisement income growth and sale of Emply Hire and reduc tion of fixed costs. |
MatchWork provides one of the market's most sophisticated job portal solutions and produces solid sales growth in Denmark.
Development, operation and support of complete job portal solutions based on MatchWork's flexible standard platform that is adapted to each customer. The platform may be used commercially to sell job advertisements or as a service for members and citizens, for example, for CV matching and job placement.
Newspapers, trade associations, unemployment funds, job portals and public organisations such as the Government of Greenland (www.suli.gl), Djøf (www.jobunivers.dk) and Nordjyske Medier (www.nordjyskejob.dk).
The leading provider of job portal solutions in Denmark and with a strong market position in the UK. Match-Work also has customers in Sweden, Norway, Germany and the USA.
Over the past 15 years, MatchWork has developed and operated job portals on the Internet. The customers are media houses, trade associations and organisations in Denmark and abroad that have opted for the MatchWork solution because it is a perfect combination of a sophisticated job portal standard platform and functionality adaptable to each customer.
MatchWork's solutions are upgraded all the time with new value-adding features without compromising on design and user-friendliness.
Also, MatchWork assists with advisory and sales support services so that customers will have the best basis for selling job advertisements, promotion and job placement services.
MatchWork is renowned for its solid and scalable business model, innovative and user-friendly products, expertise, reliability, good customer service and operational continuity.
In 2015, MatchWork has had a strong intake of new customers, particularly in Denmark, who have increased business from subscriptions. The progress in business has re-
sulted in a solid increase in revenue, and heavy investments have been made in both platform and staff to reach the target of becoming Scandinavia's leading provider of job portal solutions.
In 2016, MatchWork expects to see a heavy increase of 50% in its customer base, primarily in Scandinavia. Investments will continue to be made in new value-creating designs and features which are to help create growth with MatchWork's customers.
The job portal software that can be adapted to match the design and functional requirements of any customer. MatchWork is renowned for its solid and scalable business model, innovative and user-friendly products, expertise, reliability and operational continuity.
Successful launching of Denmark's largest online platform for arranging qualified contact between consumers and builders.
FACTS ON HÅNDVÆRKER.DK
håndværker.dk provides a setting in which private developers can share with each other their experiences with builders on the Internet – and in this way help each other find good builders.
håndværker.dk gives consumers an overview, makes things easier and, through transparency, gives the consumer the security of choosing the right builder – who in turn receive serious inquiries that often turn into orders.
Consumers living in house or a flat and small and medium-sized crafts firms.
Denmark's largest online platform for contact between consumers and crafts firms.
The håndværker.dk web service was launched in February 2015 – an upgraded and more user-friendly version of Byggestart.dk with more than ten years of experience in arranging building services. The web site is the hub of håndværker.dk where private developers may find, choose and share with other consumers their experiences with the builders within all trades.
Thus the site breaks with the lack of transparency otherwise characteristic of the building industry where stories of failed building projects etc create an unnecessary sense of insecurity in future building projects. håndværker.dk helps the consumer in this process by offering pictures and descriptions of the builder's previous projects and recommendations by previous customers. This way, consumers may help each other in easily and safely finding good builders for their next project, be it a leaking water pipe or a large extension. Why make do with just asking one neighbour or colleague for the name of a good builder when, in minutes, you can ask hundreds of others in the local community by using håndværker.dk?
The change in strategy and the transformation of the business model from Byggestart.dk to håndværker.dk began mid-2014, and the implementation was a success.
In H1 2015, marketing activities were considerable, and they were stepped up in H2 2015 to heighten the awareness and improve the market position of håndværker.dk. The outcome has been more users, and the number of signed-up builders has increased by 40% from year-end 2014 to year-end 2015. So the site has rapidly established itself as the largest portal for crafts firms in the industry, and the realisation of the objective of becoming a clear market leader who sets the standard for how consumers find and choose a builder is well underway.
As expected early in the year, the change of the business foundation to the new business model has led to a small reduction in revenue compared to 2014. As anticipated, the operating loss was substantially reduced in H1 2015 compared to the same period last year. However, in H2 2015 the decision of intensifying the marketing effort has resulted in break-even not expected until at year-end 2016.
In 2016, focus will be on increasing volume and revenue further and hence on tapping the huge potential håndværker.dk is estimated to hold. This increase is expected to lead to håndværker.dk achieving EBIT break-even by year-end 2016.
| PERFORMANCE | STRATEGY | OBJECTIVE | |
|---|---|---|---|
| Performance for 2015 | Strategy | Outlook for 2016 | |
| Market development and position |
Already in its first year of existence, håndværker.dk has established itself as the largest portal for crafts firms in Den mark. |
Use high momentum to fur ther strengthen the market position. |
Build the market-leading position and set a new stand ard for contact between pri vate developers and builders. |
| Product and business development |
Integration of a simple mem bership and start-up of simple add-ons with a huge potential. |
Increase the volume of self generated content and traffic. |
Heavy rise in the number of signed-on crafts firms. |
| Finances | Seen in isolation, performance is not satisfactory, yet as planned; the reason is massive investments in marketing |
Revenue is expected to go up by 25% because of more builders signing up. |
|
| activities. | Operating results to improve considerably. Break-even expected at EBIT level at year end 2016. |
North Media A/S was the first Danish media group to be listed on the then Copenhagen Stock Exchange. This took place in May 1996.
| Address: | North Media A/S Gladsaxe Møllevej 28 DK - 2860 Søborg |
|---|---|
| Internet: | www.northmedia.dk |
| Telephone: | (+45) 39 57 70 00 |
| Telefax: | (+45) 39 66 74 15 |
| E-mail: | [email protected] |
| CVR.no.: | 66 59 01 19 |
| Securities ID:: | DK001027034-7 |
| Auditors: | Deloitte Statsautoriseret Revisionspartnerselskab |
| Banker: | Danske Bank A/S |
The Group's financial year follows the calendar year, and this Annual Report covers the period 1 January to 31 December 2015, the Company's 35th financial year.
The Annual General Meeting will be held on 8 April 2016 at 3.00 pm at Ingeniørforeningens Mødecenter A/S, Kalvebod Brygge 31-33, 1780 Copenhagen V, Denmark.
The Company's share capital is DKK 100.3 million, distributed on 20,055,000 shares of DKK 5.00 nominal, which has been fully paid up. All shares are listed on NASDAQ OMX Copenhagen. No shares carry special rights, and the negotiability of shares is not limited in any way. Any amendment to the Articles of Association must be presented to the General Meeting and must be adopted by at least twothirds of the votes cast as well as of the voting share capital represented at the General Meeting. If no proposal has been made or adopted by the Board of Directors, at least half of the voting share capital must be represented at the General Meeting.
The Board of Directors is authorised to increase the share capital once or several times by up to DKK 25 million.
Increases may take place by way of cash contributions or otherwise. Increases may take place without any preemptive right for the Company's existing shareholders if the increase is effected at market price, or as consideration for the Company's acquisition of an existing business, or specified assets at a price equivalent to the value of the shares issued. Other than in the cases described in the previous sentence, the shareholders have a pre-emptive right to subscribe for new shares on a proportionate basis. The authorisation is given for a period up to 9 March 2017.
The Board of Directors is authorised to allow North Media A/S to acquire treasury shares up to an aggregate amount of 15% of the share capital in accordance with applicable law provided that the acquisition is made at the market price in force at the time of purchase with a variance of plus or minus 5%. The authorisation has been granted for a five-year period ending on 26 March 2020.
The Company's holding of treasury shares at 31 December 2015 was 1,485,000 shares, or 7.40% of the share capital.
The Board of Directors will at the Annual General Meeting to be held on 8 April 2016 recommend that ordinary dividend not be distributed.
The Parent's income statement shows a loss of DKK 13.7 million. The Board of Directors recommends the following appropriation of profit/loss:
| Appropriation of profit/loss | DKKm |
|---|---|
| Retained earnings at 1 January 2015 | 391.8 |
| Loss for the year | -13.7 |
| Share-based payment | 1.3 |
| Adjustments, investments in subsidiaries and associates |
2.4 |
| Other equity items | -0.3 |
| Available for distribution | 381.5 |
| The Board of Directors submits the following appropriation of profit for approval by the Annual General Meeting: |
|
The register of shareholders holding at least 5% of the share capital, which the Company keeps in accordance with the Danish Companies Act, includes the following shareholders:
Olav W. Hansen A/S Holmboes Alle 1 DK-8700 Horsens including related parties owns 1,635,455 shares, equivalent to an equity interest of 8.15%.
Baunegård ApS Fredensborg Kongevej 49 DK-2980 Kokkedal
The principal shareholder is Richard Bunck, founder of the Company, who through a wholly-owned and controlled holding company, Baunegård ApS, holds 56.39% of the share capital.
Baunegård ApS prepares consolidated financial statements including North Media A/S.
| Board of Directors | Shares |
|---|---|
| Richard Bunck | |
| (incl. Baunegård ApS) | 11,308,832 |
| Peter Rasztar | 0 |
| Steen Gede | 1,170 |
| Ulrik Holsted-Sandgreen | 0 |
| Total | 11,310,002 |
| Executive Board | Shares |
|---|---|
| Kåre Stausø Wigh | 30,000 |
| Mads Dahl Andersen | 16,418 |
| Arne Ullum Laursen | 10,000 |
| Henrik Løvig Jensen | 0 |
| Søren Jacob Frederik Holmblad | 0 |
| Total | 56,418 |
At year-end 2015, the Company's Board of Directors and Executive Board, excluding Richard Bunck, controlled 57,588 shares, or 0.29% of the share capital.
At 31 December 2015, the market capitalisation of the Company's shares was DKK 282.8 million.
North Media A/S has an open and consistent dialogue with investors and analysts so as to provide the stock market with optimum and adequate information about the Company.
Meetings with shareholders, investors, financial analysts and other stakeholders are held.
North Media A/S' corporate site, www.northmedia.dk, provides information about the Company, the Board of Directors, the Executive Board, shareholders, etc.
Kåre Stausø Wigh, Group Executive Director & CFO:
Telephone: (+45) 39 57 70 00 E-mail: [email protected]
| Financial Calendar for 2016 | |
|---|---|
| 11 February 2016: | Annual Report 2015 for North Media A/S |
| 26 February 2016: | Term for submission of items for the agenda of the Annual General Meeting |
| 8 April 2016: | Annual General Meeting |
| 4 May 2016: | Interim Management Statement for Q1 2016 |
| 18 August 2016: | Interim Report 2016 |
| 3 November 2016: | Interim Management Statement for Q3 2016 |
Thursday, 28 January 2016 Wednesday, 10 February/Thursday, 11 February 2016 Friday, 8 April 2016 Tuesday, 3 May/Wednesday, 4 May 2016 Wednesday, 17 August/Thursday, 18 August 2016 Wednesday, 2 November/Thursday, 3 November 2016 Tuesday, 6 December 2016
The Group's values set the guidelines for how to practise management in the subsidiaries. To make sure that these values are present and relevant in our staff's working days, they are spiced with some "words of wisdom". Words of wisdom reflect in concentrated form an observation, a position or a wish and thus forms part of the Group's core values.
"Customers do not constitute an interruption of your work. They ARE your work."
Above all, focus at North Media is on the customer. We develop and deliver products and services that create growth and value for them.
"It is important not to be afraid to take responsibility and to use one's own judgment, should the situation call for that. And to be held accountable if you have crossed the line."
We take responsibility when we interact with customers and each other. When things go as planned, but also when the unexpected suddenly occurs, ownership, honesty and thoughtfulness are the very substance of our actions. Because only by demonstrating accountability in all of our actions and at all times, can we make the right decisions for the benefit of our customers, staff, shareholders and other stakeholders.
"In order to do our job well, we need to have the skills to do it, the necessary knowledge, a healthy and positive approach to work and the will to make the effort that it takes."
At North Media, we want to be known for the quality of our products and services, and we strive persistently and relentlessly to ensure that through thoroughness, efficiency and focus on optimising all of our products, processes and dialogues.
We believe that value-creating quality products delivered at the right time and price are the bedrock of long-lasting relationships.
Words of wisdom:
"Sound business practice is a matter of common sense: We think before we spend money. We deliver a good product, and for that we must be paid a fair price."
We are fair in all we do and exercise sound business practice so that both our customers and we benefit from the partnership. We make great demands on each other and on our customers, and we mutually keep the agreements made.
Words of wisdom:
"It is imperative to be active and create activity. He or she who can, will and does - is given a chance."
The very substance of our success is based on a passion for what we do, on perseverance and on the ability and courage to think new thoughts. We never act from fear, but from what we want and desire. We call that positive aggressiveness.
The general meeting of North Media A/S has the ultimate authority to elect members to the Company's Board of Directors and is responsible for its overall management. The Board of Directors supervises the Company's activities and safeguards the proper management of the Company in accordance with the Articles of Association, the Danish Companies Act and other regulations of relevance to the Company. The primary duties of the Board of Directors are to lay down the overall goals and strategies, define clear guidelines for the division of responsibilities, planning and risk management and appoint a competent executive board and serve as its easy-to-reach and active sounding board. The Board of Directors is made up of four members with Richard Bunck, principal shareholder, serving as chairman.
The Executive Board is responsible for the day-to-day management of the Company. In compliance with the guidelines and directions prepared by the Board of Directors, the Executive Board prepares action plans and forecasts that support the Company's strategy and reports earnings performance, risks and other significant data to the Board of Directors on a regular basis.
In the period 1 January 2011 to 31 December 2015, Lars Nymann Andersen served as CEO of the Group.
Besides Lars Nymann Andersen, the Group's Executive Board consists of Arne Ullum Laursen, who serves as Media Director in charge of all newspaper activities, and of Kåre Stausø Wigh, CFO.
The Board of Directors and the CEO are the Company's Chief Operating Decision Makers (CODM) focusing on and being responsible for the Group's Print and Online segments. The Executive Board is responsible for the different business areas/segments and for cross-segment product and business developments.
In 2015, the Board of Directors held 11 meetings against nine in 2014.
The Board of Directors evaluates the work and competence of the Board of Directors and the Executive Board. The results of the 2015 evaluation showed good co-operation on both the boards and between them as well as satisfactory individual efforts, results and competencies.
As stated in Company announcement no 10-15 of 26 November 2015, the Group's Print and Online segments will be replaced by four new business lines from 1 January 2016. These four new business lines are:
Consequently, the Group Executive Board will in future consist of five executive officers. Kåre Stausø Wigh will be Group Executive Director and CFO. Furthermore, the Executive Board consists of the four chief executive officers, who are each in charge of their business line and refer directly to the Board of Directors of each separate company.
The Board of Directors and the chief executive officers of each of the four business lines are the companies' Chief Operating Decision Makers (CODM) focusing on and being responsible for the Group's four business lines. The Executive Board is in charge of cross-disciplinary product and business development and for joint HR guidelines and values.
The Board of Directors is responsible for the overall management of the Company. The Board of Directors has set up
an audit committee to supervise financial reporting, among other procedures. The Audit Committee is made up of two members of North Media's Board of Directors. The members are appointed by the Board of Directors for a term of two year at a time. In 2015, the Audit Committee consisted of Peter Rasztar, Vice-Chairman of the Company's Board of Directors, who chairs the Audit Committee, and Steen Gede.
Audit Committee members are to have accounting or auditing insight into as well as experience in listed companies. The Board of Directors appoints the chairman of the Audit Committee.
The Audit Committee convenes at least twice a year in connection with the external auditor's issuance of audit book comments on interim audits and their year-end audit of the financial statements, respectively. Other than that, the Audit Committee convenes as necessary.
The primary tasks of the Audit Committee are to monitor and check the financial information of external financial reports or other material financial reports on behalf of the Board of Directors as well as to ensure compliance with applicable law, standards and other requirements applicable to financial reporting. At least once a year, the Audit Committee also reviews and considers internal control procedures in order to evaluate the appropriateness of controls and/or any weaknesses. Further, the Audit Committee considers the external auditor's audit plan and reviews the related audit engagement letter and audit fee as well as the auditor's management letters and audit book comments.
In 2015, the Committee held three meetings, and three meetings were held in 2014.
Separate strategy and action plans as well as budgets and estimates have been prepared for the individual subsidiaries and activities. The plans and the budgets are checked against monthly reporting. Strategy and action plans as well as budgets are prepared annually on the basis of a detailed and standardised process. Material risks are identified during this process, and decisions are made about their handling.
North Media applies a number of systems across the Group regarding day-to-day management, including advertisement booking, invoicing, user payment, route planning, financial reporting and consolidation. The systems have been integrated to the extent possible in order to avoid duplication of data and to reduce the risk of errors as well as to enhance efficiency. Procedures for internal control and reconciliation have been introduced to ensure the consistency of data obtained from different sources. The control procedures consist of monthly reconciliations, among other processes, performed as part of financial reporting.
The finance departments have been centralised into two large groups to ensure enhanced efficiency, an efficient control environment and an appropriate segregation of duties. In addition, the use of the subsidiaries' and activities' local finance systems has been upgraded and aligned.
Based on the Board of Directors' instructions, including values for corporate governance, guidelines on corporate governance and in co-operation with the Audit Committee, Group Finance has developed systems for detailed financial reporting with integrated control procedures. The systems will not eliminate the risk of errors and do not guarantee detection and correction of all errors, but they help ensure identification and management of risk as well as correction of material errors and deficiencies. The key processes are as follows:
Page 54 contains a section on "Control and risk management of financial reporting" which is an integral part of the financial reporting process.
The contents of the reports submitted to the Executive Board and the Board of Directors are evaluated continuously to ensure relevance in relation to focus areas and development of the Group. Further, constant efforts are made to improve reporting efficiency and increase reporting speed. In this way, the Board of Directors and the Executive Board will have quick access to correct and relevant information.
According to section 107b of the Danish Financial Statements Act and paragraph 4.3 of "Rules for Issuers of Shares – NASDAQ OMX Copenhagen", listed companies must draw up a report on corporate governance. The report must describe how the company deals with the recommendations regularly published by the Committee on Corporate Governance in Denmark. The Committee's recommendations are available from www.corporategovernance.dk.
When drawing up the report on corporate governance, the company must apply the "comply or explain" principle. Under this principle, the company must either comply with the corporate governance recommendations or explain why it has decided not to comply with them, or to just comply with some of them. This means that the company must state the recommendations that it does not comply with and the reasons for non-compliance and, where relevant, explain what measures it has taken instead.
According to the principle, the affairs and conditions of the company are what determine the extent to which the recommendations are complied with, or whether it would be
inappropriate or undesirable for the company to do so, as the top priority is to ensure transparent corporate governance.
The Board of Directors and the Executive Board of North Media A/S regularly discuss and consider the Company's corporate governance policies and procedures. The recommendations, together with applicable law and guidelines as established by the Board of Directors, form the basis of such work.
The Group follows 41 of a total of 47 recommendations. Therefore, the Board of Directors is of the opinion that the Company generally follows the recommendations, and the Board of Directors is constantly considering how the recommendations may contribute to ensuring maximum value creation for the Company's shareholders. Accordingly, the Board of Directors also considers whether recommendations not previously complied with should be complied with.
A complete report and tables are available from the Company's homepage www.northmedia.dk/governance.cfm.
Recommendation 3.1.4 regarding the retirement age for members of the board of directors is not followed. The Company has not set a retirement age for board members as the Board of Directors believes that a member's experience and qualifications alone shall determine whether he/she can add value to the work of the Board of Directors.
Recommendation 3.2.1 that at least half of the members of the board of directors elected by the general meeting be independent is not complied with. Richard Bunck, the Chairman of North Media's Board of Directors, is also principal shareholder and hence not independent. Board Member Ulrik Holsted-Sandgreen is an attorney-at-law and partner of Horten Advokatpartnerselskab, the law firm providing professional advisory services to the Company. Therefore, Ulrik Holsted-Sandgreen may not be considered independent. Since 25 April 2015, Steen Gede has had a seat on the Board for more than 12 years and may therefore not be considered independent.
The Board of Directors believes that the interests of the principal shareholder, Richard Bunck, coincide with those of the other shareholders. Also, the Board holds the view that Ulrik Holsted-Sandgreen's work on the Board of Directors has no bearing on the circumstance that he or other attorneys of Horten Advokatpartnerselskab provide professional services to the Group. Nor is it considered crucial to Steen Gede's independence that he has been on the Board of Directors for more than 12 years.
Recommendation 4.1.2 concerning variable pay components is followed in part. The recommendation is followed except that the Company cannot require repayment of variable pay components paid to an employee based on information, which later on turns out to be incorrect. Following the recommendation is considered inappropriate taking into the account the limited number of variable pay components paid.
The Company does not follow Recommendation 4.2.1 concerning disclosure of the remuneration policy in the Chairman's report to the general meeting. The Company does not follow Recommendation 4.2.2 concerning the shareholders' approval of proposed remuneration of the Board of Directors. Recommendation 4.2.3 concerning disclosure in the annual report of total remuneration of the individual members of the Board of Directors and the Executive Board is not followed.
Remuneration of the Board of Directors, the Executive Board and executive staff is disclosed in the Annual Report. The aim of the general remuneration policy of North Media A/S is to ensure that the Company offers competitive remuneration, which is based on efforts and performance, and which is on a par with remuneration offered by comparable listed companies. The remuneration policy intends to help attract and retain qualified members of the Company's Board of Directors, Executive Board and other executive staff. Total remuneration of the Executive Board is determined by the Board of Directors, serving as Remuneration Committee. The Board of Directors finds it more appropriate that it has the right to adjust the remuneration of management at any time without having to obtain the shareholders' prior approval.
Board members receive a fixed annual fee and do not take part in a share option programme, nor do they receive any bonus.
The members of the Company's Executive Board, other executives and deputy executives receive a fixed basic salary, and the Company makes competitive pension contributions. In addition, the Company offers a bonus plan, which is based on increase/decrease in revenue and increase/decrease in EBIT as well as on EBIT for the year concerned. Any bonus is limited to a maximum of 100% of the annual basic salary. The bonus is paid upon approval of the financial statements by the Annual General Meeting.
North Media's business units are managed and driven by strong core values forming the basis of the Company's policies, rules and business processes. The Group considers corporate social responsibility a natural element of the different business units' strategies and daily operations.
One of North Media's basic principles is to demonstrate accountability to society, customers and employees. We also aim to demonstrate fairness and loyalty in any decision we make.
North Media regularly focuses on CSR-related matters as much as it does on its constant efforts to strengthen working processes and products. Being accountable in all respects is an important element of the Group's values and therefore a key element of great relevance to the Group's vision, objectives and strategy.
This means that North Media constantly focuses on not just complying with Danish and international rules and conventions, but also on using responsible behaviour to increase its financial, social and environmental performance through regular control, optimisation, operationalisation and reporting.
Thanks to its distribution business, North Media is one of Denmark's largest workplaces for young people. Working as a distributor is often the first source of money earned outside their home. This places heavy demands on North Media as a business and on the organisation, systems and procedures to ensure that each of our employees has a positive and favourable perception of their first job.
The introduction to the job is always given in dialogue with the distributor and his or her parents. Thorough instructions and follow-up are provided, and comprehensive introduction material has been prepared, which – based on many years of experience – is aimed at introducing the young distributor to the job before, during and after having done the work.
The distributors are involved in the planning of their work. From their personal page at www.blivomdeler.nu they can easily plan the delivery sequence they find optimal for visiting the individual households. Then we pack the products in the sequence requested.
To ensure that the employee always receives a pay reflecting the effort made on the individual route, various checks are carried out. Their purpose is to ensure that we comply with the working environment rules and that the distributors receive a fair pay reflecting the work they do. The distribution business has dedicated employees, who regularly give instructions and check that North Media meets the targets set.
We believe that we help our young distributors develop basic skills such as organising one's time and planning an assignment by offering them a job as a distributor. Add to this attitudinal values such as reliability and a sense of responsibility. These are all skills that help develop them as individuals and citizens; specific skills that they will need to have when they begin their studies and later when they enter the job market as adults. The distributors' sense of responsibility is also underlined by the fact that they perform on the same level as our adult distributors.
The distribution business' policy is to put conditions in place for a good working environment. A low frequency of industrial injuries and sickness absenteeism for the packing terminals is a measure of success in that respect.
The low frequency of sickness absenteeism is to be maintained on the basis of continued, close staff involvement and visible management, but also by maintaining the systematic efforts to counter and prevent industrial accidents. Industrial injuries are always analysed by the health and safety organisation.
Focus is on sickness absence, and systematic follow-ups are made on the basis of sickness interviews. In that respect, the Company also focuses on long-term healthy employees who have not contracted any sickness over the past 12 months.
In 2015, six minor industrial injuries occurred in production. During 2015, staff at the terminals was cut by 26%. As a result of this, employees on long-term sick leave increase average absenteeism. Compared to 2014, sickness absenteeism has gone up and totals 6.0 days a year inclusive of employees on long-term sick leave, equivalent to a sickness absenteeism rate of 3.29%. The table above shows sickness absenteeism for the period 2010 to 2015 compared to industry figures up to 2014. A comparable industry figure is nine sick days per employee.
The Company's staff policy is based on its strong core values, which aim at providing equal opportunities to everybody, and which require that, as a rule, everybody must meet the same demands.
A requirement for being employed is that the candidate is able to speak and understand Danish. Employees are also instructed to speak only Danish at the workplace so that everyone can understand all conversations and no one feels left out.
In 2015, all production staff had their Danish language skills tested, and staff needing an update of their skills were offered training during working hours. A project that has aroused interest by both media and politicians and resulted in a visit by the former Minster of Employment.
This has led to the successful integration of those approximately 75% of the Group's packaging staff who are non-ethnic Danes. As a result, the supervisory positions are increasingly held by non-ethnic Danes, which in itself has a cumulative effect on successful integration.
In practice, no conflicts seem to exist in the workplace despite the fact that people from different cultures work together at North Media A/S.
North Media works with the following two points to reduce the Group's climate impact on the surrounding environment:
It is important for North Media A/S that the Group's newspapers are produced following sustainable methods. This is why the Søndagsavisen, Helsingør Dagblad and Lokalavisen Nordsjælland newspapers have been using only FSCcertified newsprint since late 2011. The FSC Certificate is a global labelling system widely supported by a number of environmental organisations such as WWF, Greenpeace and Nepenthes.
North Media co-operates with some of Denmark's largest and best printing houses for the printing of the Group's newspapers. Pressens Fællesindkøb, the procurement association of the Danish press, and the printing houses ensure that the requirements for the traceability of newsprint, among others, are met, which is an important element of FSC certification.
The wood used to produce newsprint is from FSC-certified forests, mainly Nordic forests, where trees are felled as new trees start to grow. In addition, the newsprint is produced from the residues from saw mills as well as recycled paper.
Most of the newsprint already used is collected and recycled through municipal recycling systems and is thus included in the production of new newsprint. This helps reduce the environmental impact as much as possible.
North Media regularly explores avenues of more ecofriendly distribution arrangements, and would in this context particularly underline No Ads+, which holds the potential for revolutionising physical distribution in Denmark and for creating a much greener and sustainable distribution arrangement.
North Media's subsidiary, FK Distribution, has developed NoAds+, allowing recipients of retail leaflets to choose exactly what printed matter they want to receive and what not to receive. This has led to a reduction in paper consumption by approximately 70% on average per NoAds+ household.
FK Distribution has also refined its digital platform, minetilbud.dk. Via iOS and Android apps, users can look for bargains while on the road and read the latest retail leaflets whether on a train or on their couch at home. minetilbud.dk is seeing substantial growth and will in the long run also contribute to a greener distribution of retail leaflets.
Danes have embraced the new solutions. Consumers still want to read retail leaflets, but the modern consumer also wants to shield the environment against unnecessary waste burdens, and thusly takes a positive view on NoAds+ and minetilbud.dk.
At year-end 2015, the reduced volume of paper from No-Ads+ has lowered the consumption of paper by 22,000 tonnes compared to the level before the introduction of this arrangement. Because of this, CO2 emissions have been reduced by approximately 50,000 tones calculated on the basis of a life-cycle analysis of retail leaflets made by the DTU Department of Environmental Engineering for Vestforbrænding.
FK Distribution expects the NoAds+ to grow further because 70% of consumers today accepting all advertisements are interested in the solution, which also receives positive response from an impressive 40% of current No Ads Please households. Consequently, NoAds+ has every possibility of becoming a green game changer in the Danish distribution industry.
NoAds+ has in a very short time gained wide backing from the retail trade. This is because NoAds+ consumers spend more time reading the individual leaflet opted for, but also because NoAds+ enables retailers to enhance their CSR profile vis-à-vis customers, business partners and political stakeholders.
North Media's objective is to be an attractive workplace to persons with strong skills who can help develop the Group. The overall aim of the diversity and social inclusion policy is to ensure that all North Media employees are evaluated on the same terms and conditions based on their competencies. Moreover, we consider diversity a precondition for maintaining a good and innovative working environment and strive to have a diversified composition of staff regardless of gender, ethnicity, religion, nationality, sexual orientation and age. We believe that diversity is a strength that helps the Group attract and maintain the best talent.
To North Media, social inclusion means that different groups of employees are able to make a career for themselves without facing cultural or organisational barriers. We admit that ensuring this takes a special effort. For example, we would like to have even more women managers, and we make an active effort to achieve this objective.
At North Media, there is a balance of male employees and female employees. At present the Board of Directors is made up of four members who are all men. At executive board level, the current three members are also all men. The current number of male and female managers is three and three, respectively.
The policy applies to the listed Parent, North Media A/S. The subsidiaries will be drawing up their own policies in so far as they are subject to Danish Act no 1383 of 23 December 2012.
North Media makes use of employee surveys and performance evaluations to identify manager potential among group employees to develop staff and encourage skilful employees to apply for a managerial position within the Group. A key element of the Group's staff development efforts is to ensure that both male and female candidates are considered and identified as part of internal and external recruitment of managers and that women and men form part of the North Media Group's pool of talents for managerial positions.
Further, North Media systematically uses employee surveys and performance evaluations to identify any barriers to men's and women's equal opportunities to pursue a managerial career. Other measures include emphasis of equal pay for men and women and the drawing-up of job ads appealing to women managers.
North Media's Board of Directors is currently made up of four persons, who are elected for one year at a time. The current male Board members have been carefully selected based on their competence as well as the challenges and development potential faced by the Group.
When, at a given moment in time, North Media decides to add new skills to the Board of Directors, or if a Board member would like to resign, North Media will seek to have at least 25% of the candidates for the vacant seat(s) on the Board represent the underrepresented gender, meaning women at this point. Over the four-year period from 2013 to 2017, the objective is also for women to make up at least 20% of the Board of Directors. These objective are considered ambitious, but also realistic.
At the Annual General Meeting held on 27 March 2015, the present Board of Directors was re-elected, and the number of Board members was not increased. Thus, no seats on the Board were up for refilling.
So, the objective of at least 25% women candidates for vacant seats on the Board and at least 20% women on the Board has not been fulfilled yet.
North Media's staff policy is based on the Company's strong core values that underpin the very foundation of the its policies, rules and business procedures.
Based on the open corporate culture and the fact that, in practice, the Group operates only within Denmark's borders, it was not found relevant to prepare a policy for human rights and anti-corruption.
The main purpose of the review is to ensure that risks potentially critical to the Group's ability to achieve the set targets are identified and hedged.
Like the rest of the Group, the general management of the risk area is based on the principles of the fundamental management structure, which is described in the section on corporate governance. Daily follow-up and management of risks are based on a structure of internal policies, concepts and procedures.
At North Media, risks are divided into six levels and illustrated as follows:
In an open and well-developed society, private suppliers of goods and services compete against each other to provide the best and least expensive services to consumers.
This competition for consumers represents the very precondition for goods and services continuously being developed in accordance with the consumers' needs and wishes. North Media does not consider a competitive setting with businesses operating under the same competitive preconditions and terms to pose a risk that cannot be overcome with a positive result.
North Media considers political decisions and initiatives to pose risks that are greater than any risk private businesses may inflict on the Group.
With its laws, provisions and regulations, the Danish State imposes competition on North Media's distribution business, FK Distribution, in a large number of areas, by, in the eyes of North Media A/S, giving preferential treatment to the Danish postal service, the main shareholder of which is the State.
Thanks to VAT exemption and government-backed media subsidy to publishers of dailies and free newspapers, Søndagsavisen is subjected to taxpayer-funded competition. Søndagsavisen is not exempted from VAT and does not receive media subsidy.
Through the state-operated "Jobnet.dk" site, the Danish State competes against the private job portals, including Ofir. The state-owned Jobnet.dk site is 100% taxpayerfunded and thus imposes unfair competition on the privately operated job portals.
North Media makes a targeted effort to ensure that politicians can make their decisions on a well-documented and informed basis and that the necessary insight into factors affecting and of interest to North Media's stakeholders is available.
Megatrends have a long incubation period and materialise gradually without any actual ending.
Megatrends in North Media's business areas include developments and trends, which on a global and national scale determine the direction of how and in which media businesses choose to advertise and communicate with their existing and potential customers.
North Media's print media such as printed advertisements and newspapers are gradually supplemented and replaced by digital media in the long run. The megatrends in advertising point towards more and more types of media, each serving their own needs and purposes. In the job ad market, however, the migration from the Print segment to the Online segment has largely already taken place.
North Media wants to be at the cutting edge of this development and therefore works actively with product development for the Print and Online activities and on linking up the two media in order to achieve increased utility value for both advertisers and consumers.
The implementation and current development of the No-Ads+ and minetilbud.dk are some of the most recent examples of this.
Market risks affect all market participants in the markets, in which North Media operates. North Media considers market risk to be relevant now and within the next one to two years. Like other private companies, North Media is affected by macroeconomic developments.
The market for distributing unaddressed printed matter for retailers in particular is only affected to a limited extent by the economic cycles. The distribution of unaddressed printed matter to non-retail customers is affected to some degree though by economic trends. Assessments are that FK Distribution's latest product, NoAds+, is even less sensitive to economic cycles than the traditional unaddressed advertisement.
Both FK Distribution and the newspaper activities are highvolume businesses subject to high marginal contribution margins. This entails that, in the short run, earnings are sensitive to fluctuations in volume as the production capacity cannot be adjusted at short notice.
FK Distribution's contract portfolio is composed of one- and two-year contracts, which as a main rule follow the calendar year.
For many years, the newspaper market has been characterised by considerable excess capacity. This has enabled advertisers in the market to exert considerable price pressure and reduce the average prices of ads in all publications. The price pressure is expected to continue, for which reason investments are made in the automation of work processes. North Media is financially prepared to operate in a difficult market and will continue its product development efforts.
Newsprint is an important raw material in the production of newspapers. Thanks to the Group's membership of Pressens Fællesindkøb, it may buy newsprint at the same favourable prices as those offered to other dailies and free newspapers in Denmark. Therefore, the market risk involved in newsprint is limited.
North Media prints its newspapers in a narrow time window. Through long-term printing contracts, attempts are made to ensure that printing prices are always competitive, and that any changes in printing prices can be adjusted through advertisement prices.
The durability of the future business model remains uncertain within some areas of the online business. North Media works continuously on various models to ensure satisfactory earnings.
North Media defines operational risks as risks associated with day-to-day operations such as IT systems or fire at terminals or office buildings. The most material risks relate to the distribution activities, which could have a significant impact on the Group's financial performance in the event of lengthy breakdowns.
In the distribution market, high quality is an important competitive parameter. North Media's distribution terminals in Taastrup and Tilst are of great importance to continuous quality improvement. Sorting systems pack the printed matter in household sets by route with a very low number of errors per thousand, and the distribution quality is ensured through training and test calls. North Media cooperates closely with selected customers on an ongoing basis to continuously improve quality.
The new school reform became effective after the school summer holidays in 2014, and in August 2015 mandatory homework clubs started. One of the consequences of this was longer school days for the pupils. This prompted FK Distribution to adjust elements of the daily operations to ensure that youths of compulsory school age were still able to hold an after-school job with FK Distribution.
The newspaper activities would only to a lesser degree be affected by IT downtime as production can be moved swiftly to other servers. In the event of a breakdown in one printing house, the printing of the newspaper could swiftly be redirected to other printing houses as there is spare capacity in the printing market.
The quality of the Søndagsavisen newspaper is managed via internal control procedures in the editorial and pre-pressrelated processes, while the print quality is described in performance specifications for external printing houses.
In 2010, North Media decided to outsource IT operations of the newspaper and online activities in Søborg. Most servers and other IT equipment were then transferred to KMD Informatik, the staff of which are also responsible for performing backup procedures on all production servers every night in order to ensure the existence of two sets of identical data.
All systems are protected by access controls, which limit the access to functions needed by the individual employee. In addition, daily updates are performed of firewall, spam filters and anti-virus programs, and emails are scanned for high-risk contents. North Media regularly updates the Group's procedures for this area, including the Group's IT security policy, IT risk analysis and IT security test.
In the insurance policy, the Board of Directors has laid down guidelines for the protection of the Group's assets and earnings as well as for risk prevention work and provided an overview of imminent financial risks and consequences. In addition, it is the Executive Board's and the Board of Directors' opinion that the Group is appropriately insured in terms of insurable risks and own risks.
North Media's most significant financial risk is related to the portfolio of external securities.
For a detailed analysis of each element, please refer to Note 38.
At 31 December 2015, the portfolio of shares stood at DKK 196.1 million. The portfolio accounts for 63% of the total cash resources.
It is considered a key strategic strength for North Media to have strong cash resources. To raise the return on capital, some of the cash resources have been invested in external blue-chip Danish and foreign shares and investment funds.
In recent years, North Media has had a high positive return on securities. However, historically realised returns are no guarantee of future returns. North Media pursues a longterm buy-and-hold investment strategy, although the portfolio will be rebalanced at appropriate intervals. This is why the value of the porfolio of securities may fluctuate heavily both in the short-term and the long-term in connection with the general fluctuations in the share markets. The section on returns and portfolio of securities on page 15 contains a list of the most significant shares held in the portfolio at 31 December 2015.
Furthermore, North Media defines interest rate, liquidity, credit and currency risks as financial risks.
North Media has implemented a finance policy, which regulates the general frameworks for managing the Group's exposure to, for example, currency and interest-rate movements. The policy lays down hedging guidelines. Where financial hedging or other instruments are used, hedging is done for the sole purpose of reducing commercial risks.
It is the Group's policy to hedge the interest-rate risks on its long-term loans when interest payments are deemed hedgeable at a satisfactory level.
The Group upholds liquidity management to ensure that adequate and flexible financial resources exist at all times. The risk of the liquidity situation suddenly and unexpectedly developing adversely and affecting the Group's investment and operational liquidity requirements is handled through a number of management tools. The planning of anticipated liquidity requirements is carried out in connection with the preparation of budgets and action plans. The liquidity requirements are monitored on a daily and monthly basis.
It is the Group's objective to have sufficient cash resources to continuously make appropriate arrangements in case of unforeseen changes in the drain on liquidity. The Group's cash pool is monitored daily in order to optimise interest received and interest paid on the Group's total cash flows.
It is group policy to be self-supporting to the extent possible. However, the Group's properties are financed by way of long-term loans.
North Media is exposed to credit risks from receivables, deposits with banks and investments in corporate bonds. The maximum credit risk equals the carrying amount.
North Media's policy is to do business only with banks enjoying high credit ratings. Losses on receivables will always constitute a risk, but the risk of loss on a customer is weighted against the earnings potential on an ongoing basis. The Group's bad debt loss has historically been limited in size. Credit insurance has been taken out against a portion of the Group's trade receivables at 31 December 2015.
Newsprint is purchased via Pressens Fællesindkøb, whose prices depend on fluctuations in SEK and NOK. Consequently, the Group has an indirect exchange-rate risk towards Swedish and Norwegian kroner. In addition, the Group is subject to an exchange-rate risk in relation to investments in foreign shares.
The Group regularly considers whether or not to adjust the capital structure in order to weigh the increase in the required rate of return on equity against the increasing uncertainty associated with loan capital.
It is group policy to distribute dividend in so far as such distribution is considered reasonable, given the existing general capital structure, liquidity and estimated future earnings.
Detailed internal control and risk management systems have been established in connection with the financial reporting process. The aim is to ensure that internal and external financial reports give a true and fair view free from material misstatement. Furthermore, the systems are to ensure that the external interim management statements, interim reports and annual reports of the Group are presented in accordance with IFRS as adopted by the EU as well as additional Danish disclosure requirements for the presentation of financial statements of listed companies.
Since 2013, North Media has being reviewing its risks and internal control for the processes related to key financial statement items. In this context, current processes have been mapped, and future goals been established based on a maturity scale.
The Group will continue the work of optimising internal control. In 2015, the Group began implementing an IT system set to manage and monitor the Group's risks and internal controls.
The Board of Directors and the Executive Board have today considered and approved the annual report of North Media A/S for the financial year 1 January to 31 December 2015.
The consolidated financial statements are presented in accordance with International Financial Reporting Standards as adopted by the EU. The parent financial statements are presented in accordance with the Danish Financial Statements Act. Further, the annual report is prepared in accordance with Danish disclosure requirements for listed companies.
In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group's and the Parent's financial position at 31 December 2015 and of their financial performance and cash flows for the financial year 1 January to 31 December 2015.
We believe that the management commentary contains a fair review of the developments in the Group's and the Parent's activities and finances, performance for the year and the Parent's financial position, and of the financial position as a whole for the entities included in the consoledated financial statements as well as a description of the most material risks and uncertainties facing the Group and the Parent.
We recommend the Annual Report for adoption at the Annual General Meeting.
Søborg, 11 February 2016
Kåre Stausø Wigh Group Executive Director & CFO
Henrik Løvig Jensen CEO, North Media Online A/S Mads Dahl Møberg Andersen CEO, Forbruger-Kontakt A/S
Arne Ullum Laursen CEO, North Media Aviser A/S
Søren Jacob Frederik Holmblad CEO, BEKEY A/S
Board of Directors
Richard Bunck Chairman
Peter Rasztar Vice Chairman Steen Gede
Ulrik Holsted-Sandgreen
As presented and adopted at the Annual General Meeting of shareholders on 8 April 2016.
As chairman of the meeting:
We have audited the consolidated financial statements and parent financial statements of North Media A/S for the financial year 1 January to 31 December 2015, which comprise the balance sheet, statement of changes in equity and notes, including accounting policies, for the Group as well as for the Parent, and statement of comprehensive income and consolidated cash flow statement for the Group and income statement for the Parent. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies, and the parent financial statements are prepared in accordance with the Danish Financial Statements Act.
Management is responsible for the preparation of consoledated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies as well as the preparation of parent financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements and parent financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on the consolidated financial statements and parent financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and parent financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and parent financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatements of the consolidated financial statements and parent financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of consolidated financial statements and parent financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as the overall presentation of the consolidated financial statements and parent financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Our audit has not resulted in any qualification.
In our opinion, the consolidated financial statements give a true and fair view of the Group's financial position at 31 December 2015 and of the results of its operations and cash flows for the financial year 1 January to 31 December 2015 in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.
Further, in our opinion, the parent financial statements give a true and fair view of the Parent's financial position at 31 December 2015, and of the results of its operations for the financial year 1 January to 31 December 2015 in accordance with the Danish Financial Statements Act.
Pursuant to the Danish Financial Statements Act, we have read the management commentary. We have not performed any further procedures in addition to the audit of the consolidated financial statements and parent financial statements.
On this basis, it is our opinion that the information provided in the management commentary is consistent with the consolidated financial statements and parent financial statements.
Copenhagen, 11 February 2016
Deloitte Statsautoriseret Revisionspartnerselskab CVR. no. 33 96 35 56
Kim Mücke State-Authorised Public Accountant
Morten Kiærskou State-Authorised Public Accountant
| Consolidated financial stateme nts | 2015 | 2014 | |
|---|---|---|---|
| Note | DKKm | DKKm | |
| Revenue | 1,012.4 | 1,073.7 | |
| 21 | Direct expenses | 317.2 | 333.7 |
| 6 | Direct staff costs | 198.5 | 206.6 |
| Gross margin | 496.7 | 533.4 | |
| 6, 7 8 |
Staff costs Other costs |
291.6 157.4 |
278.9 157.3 |
| 9, 17, 18 | Amortisation and depreciation | 56.3 | 48.2 |
| Other operating income | 7.9 | 6.2 | |
| EBIT before special items | -0.7 | 55.2 | |
| 13 | Special items, net | -19.4 | -7.5 |
| EBIT | -20.1 | 47.7 | |
| 10 | Share of profit/loss in associates | -0.2 | -1.4 |
| 11 12 |
Return on securities Financial income |
12.9 0.5 |
17.3 0.7 |
| 12 | Financial expenses | -8.3 | -24.7 |
| Profit/loss before tax | -15.2 | 39.6 | |
| 14 | Tax for the year | -3.3 | 16.9 |
| Net profit/loss for the year | -11.9 | 22.7 | |
| Financial statement items that may later be reclassified to the income statement: |
|||
| Translation adjustments, foreign companies | -0.1 | -0.2 | |
| Fair value adjustment of hedging instruments | 2.7 | -5.1 | |
| Tax, other comprehensive income | -0.6 | 1.3 | |
| Other comprehensive income | 2.0 | -4.0 | |
| Comprehensive income | -9.9 | 18.7 | |
| Attributable, net profit/loss | |||
| Shareholders in North Media A/S | -10.1 | 20.6 | |
| Minority interests | -1.8 | 2.1 | |
| -11.9 | 22.7 | ||
| Attributable, comprehensive income | |||
| Shareholders of North Media A/S | -8.1 | 16.6 | |
| Minority interests | -1.8 | 2.1 | |
| -9.9 | 18.7 | ||
| 15 | Earnings per share, in DKK | ||
| Earnings per share (EPS) - total | -0.5 | 1.1 | |
| Diluted earnings per share (EPS-D) - total | -0.5 | 1.1 |
| 2015 | 2014 | ||
|---|---|---|---|
| Note | DKKm | DKKm | |
| Goodwill | 62.1 | 72.0 | |
| Other intangible assets Completed development projects, software |
50.8 2.5 |
63.9 3.8 |
|
| Development projects in progress | 0.0 | 0.6 | |
| 17 | Intangible assets | 115.4 | 140.3 |
| Land and buildings | 275.0 | 292.2 | |
| Plant and machinery | 42.1 | 62.2 | |
| Operating equipment, fixtures and fittings | 9.6 | 12.9 | |
| 18 | Property, plant and equipment | 326.7 | 367.3 |
| 20 | Investments in associates | 8.5 | 11.0 |
| Other securities and investments | 4.7 | 4.7 | |
| Other receivables | 2.4 | 2.3 | |
| Other non-current assets | 15.6 | 18.0 | |
| Total non-current assets | 457.7 | 525.6 | |
| 21 | Inventory | 10.7 | 5.0 |
| 22 | Trade receivables | 78.1 | 91.7 |
| Receivables from associates | 0.6 | 0.6 | |
| Other receivables | 1.5 | 1.3 | |
| Prepayments | 13.2 | 16.2 | |
| 23 | Securities | 196.1 | 204.7 |
| 24 | Cash | 92.4 | 43.5 |
| Total current assets | 392.6 | 363.0 | |
| Total assets | 850.3 | 888.6 |
| 2015 | 2014 | ||
|---|---|---|---|
| Note | DKKm | DKKm | |
| Share capital | 100.3 | 100.3 | |
| Treasury shares | -41.2 | -41.2 | |
| Hedging reserves | -12.7 | -14.3 | |
| Reserve, translation adjustments | -3.5 | -3.4 | |
| Retained earnings | 477.7 | 485.8 | |
| Parent's share of shareholders' equity | 520.6 | 527.2 | |
| Minority interests | 1.4 | 5.2 | |
| 26 | Total equity | 522.0 | 532.4 |
| 25 | Deferred tax | 7.7 | 16.1 |
| 27 | Financial institutions | 139.2 | 131.9 |
| 28 | Fair value, interest-rate swap | 13.3 | 15.8 |
| 29 | Purchase price payable | 6.1 | 15.4 |
| Total non-current liabilities | 166.3 | 179.2 | |
| 27 | Financial institutions | 6.5 | 5.9 |
| Trade payables | 43.1 | 51.2 | |
| 29 | Purchase price payable | 6.6 | 8.4 |
| 28 | Income tax payable Fair value, forward exchange contract |
3.6 | 1.5 |
| Deferred income | 3.0 15.0 |
3.2 18.9 |
|
| 30 | Other payables | 84.2 | 87.9 |
| Total current liabilities | 162.0 | 177.0 | |
| Total liabilities | 328.3 | 356.2 | |
| Total equity and liabilities | 850.3 | 888.6 |
| 2015, DKKm | Share capital |
Trea sury shares |
Hedging reserves |
Reserve, transla tion adjust ment |
Retai ned earn ings |
Pa rent's total share |
Mino rity inte rests |
Total equity |
|---|---|---|---|---|---|---|---|---|
| Equity 1 January 2015 | 100.3 | -41.2 | -14.3 | -3.4 | 485.8 | 527.2 | 5.2 | 532.4 |
| Changes in equity 2015 Net profit for the year |
0.0 | 0.0 | 0.0 | 0.0 | -10.1 | -10.1 | -1.8 | -11.9 |
| Translation adjustment, foreign companies Fair value adjustment of hedging |
0.0 | 0.0 | 0.0 | -0.1 | 0.0 | -0.1 | 0.0 | -0.1 |
| instruments Tax, other comprehensive income |
0.0 0.0 |
0.0 0.0 |
2.7 -1.1 |
0.0 0.0 |
0.0 0.5 |
2.7 -0.6 |
0.0 0.0 |
2.7 -0.6 |
| Other comprehensive income after tax | 0.0 | 0.0 | 1.6 | -0.1 | 0.5 | 2.0 | 0.0 | 2.0 |
| Total comprehensive income | 0.0 | 0.0 | 1.6 | -0.1 | -9.6 | -8.1 | -1.8 | -9.9 |
| Dividend distributed Share-based payment |
0.0 0.0 |
0.0 0.0 |
0.0 0.0 |
0.0 0.0 |
0.0 1.5 |
0.0 1.5 |
-2.0 0.0 |
-2.0 1.5 |
| Total changes in equity in 2015 | 0.0 | 0.0 | 1.6 | -0.1 | -8.1 | -6.6 | -3.8 | -10.4 |
| Equity at 31 December 2015 | 100.3 | -41.2 | -12.7 | -3.5 | 477.7 | 520.6 | 1.4 | 522.0 |
| 2014, DKKm |
| Equity 1 January 2014 | 100.3 | -41.2 | -10.5 | -3.2 | 462.2 | 507.6 | 15.7 | 523.3 |
|---|---|---|---|---|---|---|---|---|
| Changes in equity 2014 | ||||||||
| Net profit for the year | 0.0 | 0.0 | 0.0 | 0.0 | 20.6 | 20.6 | 2.1 | 22.7 |
| Translation adjustment, foreign companies Fair value adjustment of hedging |
0.0 | 0.0 | 0.0 | -0.2 | 0.0 | -0.2 | 0.0 | -0.2 |
| instruments | 0.0 | 0.0 | -5.1 | 0.0 | 0.0 | -5.1 | 0.0 | -5.1 |
| Tax, other comprehensive income | 0.0 | 0.0 | 1.3 | 0.0 | 0.0 | 1.3 | 0.0 | 1.3 |
| Other comprehensive income after tax | 0.0 | 0.0 | -3.8 | -0.2 | 0.0 | -4.0 | 0.0 | -4.0 |
| Total comprehensive income | 0.0 | 0.0 | -3.8 | -0.2 | 20.6 | 16.6 | 2.1 | 18.7 |
| Purchase of minority interests | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -7.6 | -7.6 |
| Altered recognition of minority interests | 0.0 | 0.0 | 0.0 | 0.0 | 1.2 | 1.2 | -1.2 | 0.0 |
| Dividend distributed | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -3.8 | -3.8 |
| Share-based payment | 0.0 | 0.0 | 0.0 | 0.0 | 1.8 | 1.8 | 0.0 | 1.8 |
| Total changes in equity in 2014 | 0.0 | 0.0 | -3.8 | -0.2 | 23.6 | 19.6 | -10.5 | 9.1 |
| Equity at 31 December 2014 | 100.3 | -41.2 | -14.3 | -3.4 | 485.8 | 527.2 | 5.2 | 532.4 |
| Note | 2015 DKKm |
2014 DKKm |
|
|---|---|---|---|
| Net profit/loss | -11.9 | 22.7 | |
| 31 | Adjustment for non-cash operating items | 62.9 | 79.9 |
| 32 | Changes in working capital | -6.5 | 7.4 |
| Cash flow from operating activities before net financials | 44.5 | 110.0 | |
| Interest received | 0.3 | 0.3 | |
| Interest paid | -7.1 | -7.8 | |
| Cash flow from ordinary activities before tax | 37.7 | 102.5 | |
| Income tax paid | -3.1 | -19.0 | |
| Cash flow from operating activities, total | 34.6 | 83.5 | |
| 33 | Investment in intangible assets and property, plant and equipment | -11.0 | -26.9 |
| Disposals of intangible assets and property, plant and equipment | 0.7 | 1.0 | |
| 20 | Dividend from associates | 3.5 | 13.6 |
| Investment in securities, net | 22.6 | -48.8 | |
| Dividend from securities | 2.7 | 1.0 | |
| 29 | Investment in other non-current assets Acquisition of companies, deferred payments |
-0.1 | -4.8 |
| 19 | Purchase of equity interests in group enterprise | -8.8 0.0 |
-11.5 -7.6 |
| 20 | Investment in associates | -1.2 | -4.5 |
| Cash flow from investing activities, total | 8.4 | -88.5 | |
| Additions of non-current liabilities | 14.0 | 0.0 | |
| Repayment of non-current liabilities | -6.1 | -5.7 | |
| 19 | Dividend to minority interests | -2.0 | -3.8 |
| Cash flow from financing activities, total | 5.9 | -9.5 | |
| Cash flow, total | 48.9 | -14.5 | |
| Cash and cash equivalents at 1 January | 43.5 | 58.0 | |
| Cash and cash equivalents at 31 December | 92.4 | 43.5 |
| Notes – Basis of accounting | Page |
|---|---|
| 1 Basis of accounting | 66 |
| 2 Accounting policies | 66 |
| 3 Ratio definitions | 74 |
| 4 Significant accounting estimates and judgements | 75 |
| Notes – Consolidated income statement | |
| 5 Segment information | 76 |
| 6 Employees and staff costs | 78 |
| 7 Share-based payment | 79 |
| 8 Fee to the auditors appointed by the General Meeting | 81 |
| 9 Amortisation and depreciation | 81 |
| 10 Share of loss of associates after tax | 81 |
| 11 Return on securities | 82 |
| 12 Net financials | 82 |
| 13 Special items | 83 |
| 14 Income tax | 84 |
| 15 Earnings per share | 85 |
| 16 Dividend per share | 85 |
| Notes – Consolidated balance sheet | |
| 17 Intangible assets | 86 |
| 18 Property, plant and equipment | 89 |
| 19 Subsidiaries | 90 |
| 20 Investment in associates | 91 |
| 21 Inventories | 93 |
| 22 Trade receivables | 93 |
| 23 Securities | 93 |
| 24 Cash and cash equivalents | 94 |
| 25 Deferred tax | 94 |
| 26 Equity | 94 |
| 27 Debt to financial institutions etc | 95 |
| 28 Fair value, interest-rate swap | 96 |
| 29 Purchase price payable 30 Other payables |
96 97 |
| Notes – Consolidated cash flow statement | |
| 31 Adjustments for non-cash operating items | 97 |
| 32 Changes in working capital | 97 |
| 33 Investment in intangible assets and property, plant and equipment | 97 |
| Notes – Other information | |
| 34 Operating leases and rental obligations | 98 |
| 35 Contingent liabilities | 98 |
| 36 Security for loan | 98 |
| 37 Related parties | 99 |
| 38 Financial risks | 100 |
| 39 Carrying amount, financial assets and liabilities | 104 |
| 40 Subsequent events | 105 |
| 41 Authorisation of the consolidated financial statements | 105 |
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements for annual reports for listed companies and the Danish Executive Order on Adoption of IFRSs issued in accordance with the Danish Financial Statements Act.
The income statement is presented classified by nature.
Accounting policies are unchanged compared to 2014.
The implementation of new or revised Standards and Interpretations effective from 1 January 2015 has not resulted in any changes in accounting policies.
The business scope of investments in securities and the related returns are such that it has been decided to disclose income from securities in a separate line item in the income statement to better illustrate the effect of such income on profit or loss for the year. The comparative figures have been adjusted to reflect the new form of presentation.
At the time of publication of this Annual Report, a number of new or revised Standards and Interpretations exist that have not yet become effective, for which reason they have not been incorporated in this Annual Report.
IFRS 15, Revenue from Contracts with Customers was issued in May 2014 and enters into force on 1 January 2018. The Company will need to use a five-step model to determine when, how and by what amount revenue has to be recognised, depending on whether certain criteria have been met. The North Media Group intends to analyse whether IFRS 15, Revenue from Contracts with Customers will impact on major existing and future contracts. The new Standard is not expected to have significant effect on future consolidated financial statements.
IFRS 9, Financial Instruments was issued in July 2014 and enters into force on 1 January 2018. IFRS 9 relates to the accounting treatment of financial assets and liabilities in relation to classification and measurement. This Standard also contains revised regulations with respect to hedge accounting and impairment. The North Media Group intends to analyse the impact of this new Standard, but does not expect it to have significant effect on future consolidated financial statements.
The Annual Report is presented in Danish kroner.
The consolidated financial statements comprise the Parent, North Media A/S, and the subsidiaries in which North Media A/S exercises control through a controlling interest. Control exists where North Media A/S owns or holds, directly or indirectly, more than 50% of the voting rights or otherwise exercises control over the enterprise concerned. Enterprises, in which the Group holds between 20% and 50% of the voting rights and exercises a significant, but not controlling, influence, are considered associates.
The consolidated financial statements are prepared by consolidating the financial statements of the Parent and the relevant subsidiaries, all of which are presented in accordance with the Group's accounting policies. All intragroup items, including revenue, expenses, interest, dividends, unrealised gains and losses on intra-group transactions, as well as balances and investments, are eliminated for the purpose of consolidation.
Investments in subsidiaries are offset against the proportionate share of the fair value of the subsidiary's identifiable net assets and recognised contingent liabilities at the time of acquisition.
Newly acquired or newly established enterprises are recognised in the consolidated financial statements from the date of acquisition or establishment. Enterprises sold or discontinued are recognised in the consolidated income statement up to the time of sale or discontinuance. Comparatives are not restated for enterprises newly acquired, sold or discontinued, unless sold or discontinued enterprises qualify under IFRS 5 as discontinued activities. Acquisitions of new enterprises which give the Parent control over the enterprise acquired are accounted for by applying the purchase method, according to which the identifiable assets, liabilities and contingent liabilities of the acquired enterprises are measured at fair value at the time of acquisition. Identifiable intangible assets are recognised if they can be separated from or arise from a contractual right. Deferred tax is recognised on the revaluations.
Positive differences (goodwill) between the cost of the acquisition and the fair value of the identifiable assets, liabilities and contingent liabilities acquired are recognised as goodwill under intangible assets. Goodwill is not amortised but is tested for impairment. The first impairment test is carried out before the end of the year of acquisition. On acquisition, goodwill is allocated to the cash-generating
units which subsequently provide the basis for the impairment test. Negative differences (negative goodwill) are recognised in the income statement at the time of acquisition.
Profits or losses from divestment or winding-up of subsidiaries and associates are calculated as the difference between selling price plus fair value of any equity interests held or settlement price and the carrying amount of net assets, including goodwill, at the time of sale plus divestment or winding-up expenses.
On initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Exchange differences that arise between the rate at the transaction date and the rate in effect at the payment date are recognised in the income statement as financial income or financial expenses.
Receivables, payables and other monetary items denominated in foreign currency which have not been settled at the balance sheet date are translated at the closing rate. Differences between the closing rate and the exchange rate at the time when the receivable or payable has occurred or is recognised in the latest financial statements are recognised in the income statement under financial income and expenses.
On recognition of foreign subsidiaries and associates in the consolidated financial statements using a functional currency different from the presentation currency of the Group, the income statement is translated at the average exchange rate for each month, and the balance sheet items are translated at the exchange rates at the balance sheet date. Exchange differences arising from the translation of the opening equity of foreign group enterprises at closing rates and exchange differences from the translation of income statements from average rates to closing rates are taken directly to other comprehensive income and are taken to a separate reserve in equity.
Derivative financial instruments are initially recognised at fair value and subsequently measured at fair value. Positive and negative fair values are recognised as other receivables and other payables, respectively.
Fair value adjustments of derivative financial instruments classified as hedges of expected future cash flows are recognised in other comprehensive income and are included in equity under a separate hedging reserve until the hedge transaction is carried through.
Revenue comprises income from Print and Online for services rendered less VAT, cash and quantity discounts.
Online income comprises job and banner ads, user charges, subscription income as well as sales of software for classified advertisement databases, including in particular Job & CV databases. Sales of job and banner ads are recognised when the ad is published on the Internet site. Software sales are recognised when delivery and risk have passed to the purchaser. Online income imposing future liabilities on the Group is recognised over the life of the liability.
Print income comprises newspaper ads, newspaper sales, including subscription income, sale of key systems and door-to-door-distributed newspapers and printed matter. Sales are recognised on the day of publication/distribution, whereas subscription income is recognised over the subscription period.
Direct expenses include expenses incurred to generate revenue for the year. The expenses comprise printing, external distribution, distribution services, excluding direct staff costs and Google expenses that may be attributed directly to revenue-generating activities.
Direct staff costs include costs of staff in functions performed directly to generate the year's revenue, including distribution pay and payroll costs of warehouse and other production functions.
Staff costs include wages and salaries as well as social security costs, pensions etc for the Company's staff in production management, sales and administrative functions.
Other costs include costs of sale, advertising, administration, premises, bad debts etc. Costs relating to development projects which do not qualify for recognition in the balance sheet are recognised under other costs.
Amortisation and depreciation comprise amortisation of intangible assets and depreciation of property, plant and machinery over the expected useful life of the individual asset. Profit from the sale or retirement of intangible assets and property, plant and equipment is calculated as the selling price less selling expenses and the carrying amount at the time of sale.
Other operating income includes items of a secondary nature relative to the activities of the enterprises.
The item also includes public grants which the Group receives from the Danish Agency for Culture to cover editorial costs for Helsingør Dagblad. Grants are obtained by application. In 2015, the Group received DKK 3.6 million in grants (2014: DKK 3.4 million). Public grants are recognised when it is virtually certain that the grant conditions will be fulfilled and the grant will be received.
The value of options granted in relation to the Group's share option programme is measured at the fair value of the options at the grant date.
The Group's share option programme can solely be exercised by acquiring shares in North Media A/S, and is therefore classified as an equity programme, whereby the determined fair value of the granted share options is recognised in the income statement under staff costs over the period in which the final right to the options vests. The contra entry is carried directly to equity.
On initial recognition of the share options, an estimate is made of the number of options to which the employees are expected to acquire a right, see the granting conditions described in Note 7. Subsequently, adjustments are made for changes in the estimate of the number of vested options so that the total recognition is based on the actual number of vested options.
The fair value of the options granted is estimated by using the Black Scholes pricing model. In this estimate, allowance is made for the terms and conditions that apply to the share options granted.
Special items include write-down of goodwill and reversal of acquisition price payable related to acquisitions of enterprises or activities. Included in special items are also impairment losses for properties no longer used for their original purpose, termination benefits for members of the Executive Board and severance costs in cases where the Danish Collective Dismissal Act has been applied. Finally, the line item includes capital gains or losses from the sale of enterprises or activities.
This item includes realised and unrealised gains or losses from the portfolio of securities as well as income received in the form of dividends, interest etc.
The proportionate shares of the net profits or losses of associates are included in the consolidated income statement after elimination of the proportionate shares of unrealised intra-group gains/losses.
Financial income and expenses relate to interest rates, discount effect of purchase price payable, debt and transactions in foreign currency, and additions and allowances pursuant to the Danish tax prepayment scheme etc.
The item also contains fair value adjustments of other investments.
Borrowing costs are amortised over the term of the loan.
North Media A/S participates in a joint taxation arrangement. The current Danish income tax is allocated among the jointly taxed Danish companies in proportion to their taxable income (full allocation with refunds for losses). The jointly taxed companies are covered by the tax prepayment arrangement.
Tax for the year, which consists of current tax and changes in the calculated deferred tax, is recognised in the income statement by the portion that relates to the net profit or loss for the year and directly in the statement of comprehensive income by the portion that relates to other comprehensive income.
Initially, goodwill is recognised in the balance sheet at cost as described under 'Business combinations'. Subsequent measurements are at cost less accumulated impairment losses. Goodwill is not amortised.
The carrying amount of goodwill is allocated to the Group's cash-generating units at the time of acquisition. The definition of cash-generating units follows the management structure and the internal financial management policy.
The carrying amount of goodwill is tested for impairment if there are any indications of impairment, but at least on a yearly basis. The impairment test is carried out for all operating assets taken together in the cash-generating unit to which goodwill is allocated. Goodwill is written down to the lower of the carrying amount and the recoverable amount of the cash-generating unit to which goodwill relates. Goodwill impairment is presented in the income statement under "Special items".
Development costs comprise costs and salaries that are directly attributable to the Company's development activities, primarily development of software for the Group's online activities.
Development projects that are clearly defined and identifiable and in respect of which the technical rate of utilisation, sufficient resources and a potential future market or development potential in the enterprise can be demonstrated and where the intention is to produce, market or use the project, are recognised as intangible assets provided that cost can be determined reliably and it is sufficiently certain that future earnings will be adequate to cover the production, sales and administrative expenses and actual development costs. Other development costs are expensed in the income statement as incurred.
Capitalised development projects are measured at cost net of accumulated amortisation and impairment losses.
After completion of the development work, a development project is amortised on a straight-line basis over its estimated useful life. The period of amortization for software is usually 3-5 years.
Other intangible assets include distribution rights, trademarks and customer relations taken over in connection with acquisitions. For some of these assets, the Group cannot forecast a limit in the period in which the assets are expected to generate future economic benefits to the Group. In these cases, the lives of the assets are therefore deemed indefinite, for which reason they are not amortised. Other intangible assets the lives of which are deemed definite are amortised over their expected useful lives.
Other intangible assets are amortised on a straight line basis over their estimated useful lives of 3-10 years. The basis of amortisation is reduced by any impairment losses.
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes cost and expenses directly related to the acquisition until the asset is ready for use. Where parts of an item of property, plant and equipment have different useful lives, they are depreciated as separate items of property, plant and equipment.
The cost of properties includes the cash cost of acquisition for land and buildings and the aggregate building and/or refurbishment expenses.
The assets are depreciated on a straight-line basis over the expected useful lives based on the following assessment of the expected useful lives of the assets:
| Leasehold improvements | 5 years |
|---|---|
| Owner-occupied property | 50 years |
| Mixed land, property and buildings | |
| 20-35 years | |
| Plant and machinery | 5-10 years |
| Other fixtures and fittings, tools and | |
| equipment | 3-5 years |
Land is not depreciated.
Depreciation is expensed in the income statement under "Amortisation and depreciation".
The basis of depreciation is calculated allowing for the asset's scrap value and is reduced by any impairment losses. The scrap value is fixed at the time of acquisition and is reconsidered every year. If the scrap value exceeds the asset's carrying amount, no further depreciation will be made.
If the period of depreciation or the scrap value is changed, the impact on depreciation will be recognised prospectively as a change of accounting estimates.
Investments in associates are measured according to the equity method.
The purchase method is used with respect to acquiring investments in associates; see the description of business combinations.
Investments in associates are measured in the balance sheet at the proportionate share of the equity value of the associates less or plus a proportionate share of unrealised intra-group profits and losses plus the carrying amount of goodwill.
Any receivables from associates are written down to the extent that the receivable is found to be irrecoverable.
Inventories are measured at the lower of cost using the FIFO method and net realisable value.
The cost of goods for resale, raw materials and consumables consists of purchase price plus delivery costs. Cost of manufactured goods and work in progress consists of costs of raw materials, consumables and direct labour costs as well as production costs.
The net realisable value of inventories is calculated as the estimated selling price less completion costs and costs incurred to execute sale.
Receivables are measured at amortised cost which will in most cases be equivalent to nominal value net of impairment losses.
Prepayments include expenses related to subsequent reporting periods.
Shares and bonds, which are regularly monitored, are measured and reported at fair value in accordance with the Group's policy for investments, recognised on the trading date at fair value in current assets and subsequently measured at fair value. Fair value changes are recognised on a continuing basis in the income statement in the line item "Income from securities".
Other equity investments include investments in other enterprises as part of the Group's business operations, and which are not classified as subsidiaries or associates. Other equity investments are presented as non-current assets and measured and reported at fair value. Fair value changes are recognised on a continuing basis in the income statement as financial income or financial expenses.
North Media tests goodwill for impairment if there are indications of impairment, but at least on a yearly basis. Any impairment loss is recognised in the income statement under "Special items".
Intangible assets with an indefinable useful life are tested for impairment if there are indications of impairment. The test is carried out on at least a yearly basis, the first time before the end of the year of acquisition. Development projects in progress are also tested for impairment on at least a yearly basis.
The carrying amount of intangible assets and property, plant and equipment with definite useful lives is reviewed on an annual basis to determine whether there is any indication of impairment. If such an indication exists, the recoverable amount of the asset is estimated. The recoverable amount is the higher of the asset's fair value less expected selling costs and its value in use.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds the recoverable amount of the asset or the cash-generating unit.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the assumptions and estimates that led to recognition of the impairment loss. An impairment loss is reversed only to the extent that the asset's new carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Proposed dividend is recognised as a liability when a resolution approving the dividend has been adopted by the Annual General Meeting of shareholders (the time of declaration).
Cost and selling prices related to treasury shares are recognised in a separate account under equity. A capital reduction through cancellation of treasury shares reduces the share capital by an amount equal to the nominal value of the investment. Dividend related to treasury shares is taken to the retained earnings account.
Current tax payable and current tax receivable are recognised in the balance sheet as tax calculated on the taxable income for the year, adjusted for tax on previous years' taxable income and for prepaid tax.
Deferred tax is measured according to the balance-sheet liability method on all temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, no deferred tax is recognised on temporary differences relating to goodwill not deductible for tax purposes, office properties, or other items where temporary differences – except in the case of acquisitions of companies – have arisen at the time of acquisition and affect neither the net profit for the year nor the taxable income. In those cases where the calculation of the tax base can be made under alternative taxation rules, deferred tax is measured on the basis of the planned use of the asset and settlement of the liability, respectively.
Deferred tax assets, including the tax base of tax loss carryforwards, are recognised under other non-current assets at the values at which they are expected to be realised, either by elimination against tax on future earnings or by set-off against deferred tax liabilities within the same legal tax entity and jurisdiction.
Deferred tax is adjusted for eliminations of unrealised intragroup gains and losses.
The Company is jointly taxed with all foreign subsidiaries. Deferred tax relating to re-taxation of deducted losses in foreign subsidiaries is recognised based on a specific assessment of the purpose of each subsidiary.
Deferred tax is measured on the basis of the tax rules and tax rates that under the legislation in force at the balance sheet date would be applicable in the respective countries when the deferred tax liability is expected to crystallise as current tax. Changes in deferred tax as a result of changed tax rates are recognised in the income statement.
Debt to credit institutions etc is recognised at the time of borrowing at the proceeds received after deduction of transaction costs incurred.
In subsequent periods, the financial liabilities are measured at amortised cost using "the effective interest method" so that the difference between the proceeds and the nominal value is recognised in the income statement under financial expenses over the loan term.
Other financial liabilities are measured at amortised cost except for the Group's interest-rate swap and forward exchange contract, which are measured at fair value.
Deferred income comprises payments received for recognition in subsequent reporting periods.
Financial instruments measured at fair value in the balance sheet are classified using the following fair value hierarchy:
The cash flow statement shows the consolidated cash flows for the year, broken down by cash flows from operating, investing and financing activities, the year's changes in cash and cash equivalents and the cash and cash equivalents at the beginning and end of the year. The cash flow statement is presented by the indirect method.
Cash flows from enterprises acquired are recognised from the date of acquisition.
Cash flows from operating activities are calculated as the profit or loss before tax, adjusted for non-cash operating items, working capital changes, interest received and paid and income taxes paid.
Cash flows from investing activities include payments in connection with purchases and sales of enterprises and activities, purchases and sales of intangible assets, property, plant and equipment, and other non-current assets, and purchases and sales of securities not recognised as cash and cash equivalents.
Cash flows from financing activities comprise changes in the size or composition of the share capital and related costs, as well as the raising of loans, repayments on interest-bearing debt, purchases and sales of treasury shares, and payment of dividend to shareholders.
Cash and cash equivalents include cash balances which are an integrated part of the Company's financial resources.
The Print segment includes the distributing activities of FK Distribution and BEKEY as well as the newspapers of Søndagsavisen, Frederiksberg Mediecenter, Lokalaviserne Østerbro og Amager, Helsingør Dagblad and Lokalavisen Nordsjælland.
The Group's Online segment consists of Ofir, Match-Work.com, Sondagsavisen.dk, BoligPortal, BostadsPortal.se and håndværker.dk (formerly Byggestart.dk/ HentTilbud.dk).
The segment of unallocated costs consists of group-related activities which are not allocated on the operating activities in the Print and Online segments.
Revenue in the operating segments comprises newspaper publishing, distribution, sale of key systems and Internet services.
Segment income and expenses as well as segment assets and liabilities comprise the items that are directly attributable to the individual segment and the items that can be allocated to the individual segment on a reliable basis.
Unallocated items mainly comprise assets and liabilities as well as income and expenses relating to the Group's administrative functions, investment activities, income taxes, etc. Unallocated items also include the Group's owner-occupied property and the financing thereof.
Non-current assets in the segments include non-current assets used directly in the segment's operations, including intangible assets and property, plant and equipment, and investments in associates.
Current assets in the segments comprise current assets used directly in the segment's operations, including trade receivables, other receivables and prepayments.
Segment liabilities comprise liabilities derived from the segments' operations, including trade payables as well as other payables.
Segment information is determined based on the the Group's accounting policies.
| Gross margin | = | Gross profit x 100 Revenue |
|---|---|---|
| Operating profit before depreciation and amortisation= | EBITDA | |
| EBIT before special items | EBIT + Special items, net | |
| Operating profit | = | EBIT |
| Profit margin | = | EBIT x 100 Revenue |
| Return on assets | = | EBIT x 100 Average total assets |
| Equity ratio | = | Equity at the end of the period incl minority interests x 100 Total assets |
| Return on equity (ROE) | = | Net profit after tax x 100 Average equity incl minority interests |
| Net interest-bearing debt/cash position | = | Interest-bearing debt (incl acquisition price payable) less interest-bearing assets and cash |
| Net working capital (NWC) | = | Non-interest-bearing receivables less current liabilities excl non-interest-bearing debt |
| Capital employed incl goodwill | = | Equity and minority interests plus net interest-bearing debt |
| Return om capital employed incl goodwill (ROIC) | = | EBITA x 100 Average capital employed incl goodwill |
| Free cashflow before tax (CFFO) | = | EBITDA minus investments and adjusted for changes in opera tional balance sheet items excl tax |
| Earnings per share (EPS) | = | Parent's share of net profit for the year Average number of shares in circulation |
| Diluted earnings per share (EPS-D) | = | Parent's share of net profit for the year Average numbers of diluted shares in circulation |
| Price/Earnings (P/E) | = | Share price EPS |
| Price to book value (P/BV) | = | No of shares, 31 December x market price Parent's share of equity |
| Cash flows per share (CFPS) | = | Cash flow from operating activities Average number of diluted shares in circulation |
Earnings per share (EPS) and diluted earnings per share (EPS-D) are calculated in accordance with IAS 33.
Ratios have been prepared in accordance with the Danish Society of Financial Analysts' "Recommendations & Key Ratios 2015" with the following exceptions:
Determining the carrying amount of certain assets and liabilities requires an estimate of how future events will affect the value of those assets and liabilities at the balance sheet date. Estimates that are significant to the financial reporting are i.a. made by evaluating future cash flows.
The estimates used are based on assumptions found reasonable by North Media, but which are inherently uncertain and unpredictable as unexpected incidents or circumstances may arise. Furthermore, the Company is exposed to risk and uncertainties that may cause actual results to vary from those estimates. Risks related to North Media A/S are specified in the paragraph describing risks and risk management on pages 52-54.
Assumptions about the future and other estimation uncertainties at the balance sheet date are disclosed in the specific notes if they involve a material risk of changes that may lead to considerable adjustment of the carrying amounts of assets or liabilities within the next financial year.
North Media considers the following estimates and judgments and the relevant accounting policies material to the preparation of the consolidated financial statements.
The Group conducts an impairment test if indications of impairment arise. However, goodwill and intangible assets having indefinite useful lives are tested at least once a year. Management estimates the value in use as a reflection of the recoverable amount, which is calculated by discounting the expected future cash flows that are estimated based on Management's estimates in this respect and Management's estimates of the discount factor and growth rates.
Compared to the original plans, the declining revenue and the resultant reduced earnings of the local newspapers acquired in 2013 have prompted a write-down of the goodwill amount by DKK 10.0 million in 2015 and DKK 15.0 million in 2014. For both years, write-downs were calculated based on updated assumptions for the future development in revenue and earnings. For further comments on write-downs for the year, please refer to Notes 13 and 17.
Management makes accounting estimates relating to method of depreciation, useful lives and residual values, and reconsiders them on an annual basis. Particularly plant is exposed to technological developments, and changed estimates of useful lives may thus affect depreciation for the year.
Enterprises, over which North Media has control, are recognised as subsidiaries of the Group. At 1 October 2013, the Group sold 10% of its stake in Tryksagsomdelingen Fyn P/S and the relating general partnership, after which the Group's ownership is reduced to 50%. At the same time, an ownership agreement was signed with the co-owner. After an overall evaluation of the ownership agreement, assessments are that, despite only holding 50% of the shares, North Media A/S still exercises control, for which reason profit or loss and balance sheet are fully consolidated since 2013. The co-owner's share of profit or loss and equity is included in the minority interest's profit/loss and equity.
When acquiring a 70% stake in Lokalaviserne Østerbro og Amager A/S in 2013, a put/call option was also entered into for the remaining 30%, which may be exercised in instalments after presenting the financial statements for 2015 and 2018. The entering-into of the put/call options entailed that Management found it probable that the North Media Group would gain full ownership of Lokalaviserne Østerbro og Amager A/S. This resulted in the determination and recognition of an acquisition price payable. As part of the presentation of the financial statements for 2014 and 2015, the estimated liability was reduced because of lower operating results and an expected decline in future profit. The determination was based on the estimated developments in future earnings which form the basis of the computation of the options' exercise prices, see Notes 13 and 14. The income is included in special items, see Note 13.
As part of the restructuring of the Group, the property in Elsinore was assigned to the Group's property company. In this context, the possibility of leasing out the property, including rent level, was examined in detail. Based on these updated and more conservative assumptions, an indication of impairment in the total amount of DKK 9.6 million was identified. Measurement is based on the estimated rent level for the different areas, and it has been taken into consideration that part of the property has not been used for a long time. The measurement is subject to major sensitivity, however, the assessment is that the property will be realisable at its carrying amount. The property has been recorded at DKK 7.3 million at 31 December 2015, including value of the land.
| Unallocated | ||||
|---|---|---|---|---|
| 2015, DKKm | Online | costs/elimi. *) | Total | |
| Revenue | 917.7 | 94.7 | - | 1.012.4 |
| Internal revenue | 0.9 | 3.3 | -4.2 | 0.0 |
| Gross profit | 411.8 | 85.0 | -0.1 | 496.7 |
| EBITDA | 58.5 | -11.2 | 8.3 | 55.6 |
| Amortisation and depreciation | 45.5 | 1.4 | 9.4 | 56.3 |
| EBIT, before special items | 13.0 | -12.6 | -1.1 | -0.7 |
| Special items | -16.1 | 0.0 | -3.3 | -19.4 |
| EBIT | -3.1 | -12.6 | -4.4 | -20.1 |
| Share of profit/loss in associates | 1.2 | -1.4 | 0.0 | -0.2 |
| Return on securities | - | - | 12.9 | 12.9 |
| Net financials | - | - | -7.8 | -7.8 |
| Profit/loss before tax | -1.9 | -14.0 | 0.7 | -15.2 |
| Net loss for the year | - | - | - | -11.9 |
| Minority interests' share of net loss | - | - | - | -1.8 |
| Shareholders' share of net loss | - | - | - | -10.1 |
| Non-current assets | 150.4 | 41.1 | 266.2 | 457.7 |
| Current assets, excl cash and cash equivalents | 92.1 | 6.9 | 5.1 | 104.1 |
| Segment assets | 242.5 | 48.0 | 271.3 | 561.8 |
| Securities | - | - | 196.1 | 196.1 |
| Cash and cash equivalents | - | - | 92.4 | 92.4 |
| Goodwill | 42.6 | 19.5 | 0.0 | 62.1 |
| Intangible assets with an indefinite life | 3.0 | 11.9 | 0.0 | 14.9 |
| Non-current liabilities | 13.1 | 1.6 | 151.6 | 166.3 |
| Current liabilities | 108.5 | 22.9 | 30.6 | 162.0 |
| Segment liabilities | 121.6 | 24.5 | 182.2 | 328.3 |
| Investments in associates | 3.7 | 4.8 | - | 8.5 |
| Additions, intangible assets, property, plant and | ||||
| equipment | 8.8 | 0.6 | 1.6 | 11.0 |
| Cash flow from operating activities | 33.7 | -14.2 | 15.1 | 34.6 |
| Cash flow from investing activities | -6.8 | -8.5 | 23.7 | 8.4 |
| Cash flow from financing activities | 0.0 | 0.0 | 5.9 | 5.9 |
| Average number of employees | 491 | 84 | 35 | 610 |
| Profit margin (EBIT) | 1% | -13% | - | 0% |
| EBITDA margin | 6% | -12% | - | 5% |
| Return on assets | 5% | -26% | - | 0% |
| Gross margin | 45% | 90% | - | 49% |
North Media A/S mainly operates in the Danish market, and more than 97% of the consolidated revenue is invoiced in DKK to Danish customers.
No significant foreign assets or liabilities are recognised in the balance sheet. Non-current assets outside Denmark represent less than DKK 1 million.
* Internal revenue has been eliminated in other operating expenses. Other items relate to unallocated costs as well as assets and liabilities.
| 2014, DKKm | Online | |
|---|---|---|
| 2014, DKKm | Online | costs/elimi. *) | Total | |
|---|---|---|---|---|
| Revenue | 976.3 | 97.4 | - | 1.073.7 |
| Internal revenue | 0.8 | 4.8 | -5.6 | 0.0 |
| Gross profit | 446.1 | 86.8 | 0.5 | 533.4 |
| EBITDA | 96.7 | -5.1 | 11.8 | 103.4 |
| Amortisation and depreciation | 35.5 | 3.1 | 9.6 | 48.2 |
| EBIT, before special items | 61.2 | -8.2 | 2.2 | 55.2 |
| Special items | 0.0 | -7.5 | 0.0 | -7.5 |
| EBIT | 61.2 | -15.7 | 2.2 | 47.7 |
| Share of profit/loss in associates | 0.7 | -2.1 | - | -1.4 |
| Return on securities | - | - | 17.3 | 17.3 |
| Net financials | - | - | -24.0 | -24.0 |
| Profit/loss before tax | 61.9 | -17.8 | -4.5 | 39.6 |
| Net profit for the year | - | - | - | 22.7 |
| Minority interests' share of net profit | - | - | - | 2.1 |
| Shareholders' share of net profit | - | - | - | 20.6 |
| Non-current assets | 216.0 | 42.2 | 267.4 | 525.6 |
| Current assets, excl cash and cash equivalents | 102.0 | 6.5 | 6.3 | 114.8 |
| Segment assets | 318.0 | 48.7 | 273.7 | 640.4 |
| Securities | - | - | 204.7 | 204.7 |
| Cash and cash equivalents | - | - | 43.5 | 43.5 |
| Goodwill | 52.5 | 19.5 | 0.0 | 72.0 |
| Intangible assets with an indefinite life | 3.0 | 11.9 | 0.0 | 14.9 |
| Non-current liabilities | 30.4 | 1.4 | 147.4 | 179.2 |
| Current liabilities | 127.1 | 25.5 | 24.4 | 177.0 |
| Segment liabilities | 157.5 | 26.9 | 171.8 | 356.2 |
| Investments in associates | 6.0 | 5.0 | - | 11.0 |
| Additions, intangible assets, property, plant and | ||||
| equipment | 25.4 | 0.3 | 1.2 | 26.9 |
| Cash flow from operating activities | 103.3 | -0.2 | -19.6 | 83.5 |
| Cash flow from investing activities | -21.6 | -17.1 | -49.8 | -88.5 |
| Cash flow from financing activities | 0.0 | 0.0 | -9.5 | -9.5 |
| Average number of employees | 496 | 86 | 33 | 615 |
| Profit margin (EBIT) | 6% | -8% | - | 5% |
| EBITDA margin | 10% | -5% | - | 10% |
| Return on assets | 19% | -17% | - | 9% |
| Gross margin | 46% | 89% | - | 50% |
Unallocated
North Media A/S mainly operates in the Danish market, and more than 97% of the consolidated revenue is invoiced in DKK to Danish customers.
No significant foreign assets or liabilities are recognised in the balance sheet. Non-current assets outside Denmark represent less than DKK 1 million.
* Internal revenue has been eliminated in other operating expenses. Other items relate to unallocated costs as well as assets and liabilities.
| 6 Employees and staff costs | 2015 number |
2014 number |
|---|---|---|
| Average number of employees In addition a large number of part-time employees are working in distribution. |
610 | 615 |
| 2015 DKKm |
2014 DKKm |
|
| Total salaries and remuneration for the year | ||
| Wages and salaries, including holiday pay | 435.6 | 433.7 |
| Defined contribution plans | 20.8 | 20.9 |
| Other social security costs | 3.9 | 4.2 |
| Remuneration of Parent's Board of Directors | 1.2 | 1.2 |
| Share-based payment | 1.5 | 1.8 |
| Other staff costs | 30.4 | 25.3 |
| Total staff costs | 493.4 | 487.1 |
| The total staff costs are included under the following items in the income statement: |
||
| Direct staff costs | 198.5 | 206.6 |
| Staff costs | 291.6 | 278.9 |
| Special items | 3.3 | 1.6 |
| Total staff costs | 493.4 | 487.1 |
| Board of Directors of |
The Parent Company's |
Other | ||
|---|---|---|---|---|
| Parent | Executive | managerial | ||
| 2015, DKKm | Company | Board | staff | Total |
| Wages and salaries | 1.2 | 8.5 | 11.3 | 21.0 |
| Pension (defined contribution plans) | 0.0 | 0.4 | 0.8 | 1.2 |
| Share-based payment | 0.0 | 0.3 | 0.4 | 0.7 |
| Severance pay | 0.0 | 3.3 | 0.0 | 3.3 |
| Remuneration of the Board of Dir., Exec. Board and man. staff | 1.2 | 12.5 | 12.5 | 26.2 |
| Number of members (average) | 4 | 3 | 6 | 13 |
| 2014, DKKm | ||||
| Wages and salaries | 1.2 | 8.3 | 10.8 | 20.3 |
| Pension (defined contribution plans) | 0.0 | 0.4 | 0.8 | 1.2 |
| Share-based payment | 0.0 | 0.4 | 0.5 | 0.9 |
| Remuneration of the Board of Dir., Exec. Board and man. staff | 1.2 | 9.1 | 12.1 | 22.4 |
| Number of members (average) | 4 | 3 | 6 | 13 |
In 2015, the Board of Directors consisted of four members, the same as in 2014. The Executive Board had three members in 2015, also unchanged. Chief Executive Officer Lars Nymann Andersen has resigned effective from 1 January 2016. Please refer to page 44.
In 2015 no share options have been granted.
In 2012, North Media has granted share options to a group of 22 persons, consisting of the Company's Executive Board and selected executives. The Company's Board of Directors has not been granted share options. Subsequently, five staff members have exited the programme in connection with their resignation and two have entered the options programme.
The share option programme 2012 comprises a total of 1,485,000 share options, of which 390,000 were granted to the Executive Board. The share options were granted in three tranches.
During the exercise period the options may only be exercised in the windows applicable at the exercise date pursuant to the internal rules laid down by the Company and in accordance with the rules of Nasdaq OMX and the Danish Securities Trading Act.
Each share option entitles the holder to acquire one existing share in North Media A/S denominated at DKK 5.00 at a price corresponding to the average closing price of the Company's shares in the period 8 August 2012 to 14 August 2012, both days included. On this basis, the exercise price was calculated at DKK 21.12 per share.
Share options are granted in accordance with the overall guidelines for incentive programmes that were adopted at the Annual General Meeting held by North Media A/S on 4 April 2008.
The options may only be settled by way of shares. North Media A/S has in earlier years acquired a total of 1,485,000 treasury shares. These shares are reserved for settlement of the options granted.
The options granted equal 7.40% of the share capital. The theoretical market value (as assessed using the Black-Scholes pricing model) of the share options granted was DKK 5.8 million at the grant date.
The following assumptions were used to calculate the fair value of the options:
| Option | First exercise date |
Last exercise date |
Lives of options |
Risk-free interest |
Expected volatility |
NVP of dividend |
Option value |
|---|---|---|---|---|---|---|---|
| Tranche 1 | Aug 2014 | Feb 2016 | 2 years | 0.0000% | 39.5% | DKK 2 | 3.27 |
| Tranche 2 | Aug 2015 | Feb 2017 | 3 years | 0.0004% | 39.1% | DKK 3 | 3.60 |
| Tranche 3 | Aug 2016 | Feb 2018 | 4 years | 0.0712% | 45.3% | DKK 4 | 4.62 |
The expected volatility has been calculated based on the historic volatility of the share price of North Media A/S's shares with a performance history corresponding to the term of the individual option. Expectations are that the option will be exercised one year after the first exercise opportunity.
At the balance sheet date, options corresponding to 1,185,000 shares remain outstanding, equalling 5.91% of the share capital.
In 2015, DKK 1.3 million (2014: DKK 1.6 million) was expensed under staff costs in respect of the share option programmes, originating from equity-settled share option plans in North Media A/S. The expenses charged for the year are based on an estimated weighted average term of 4.1 years until the options are exercised.
| Outstanding share options, 1 January Changes in the 2012 share option programme |
2015 number 1,335,000 -150,000 |
2014 number 1,372,500 -37,500 |
|---|---|---|
| Outstanding share options, 31 December | 1,185,000 | 1,335,000 |
| Number of share options which can be exercised at the balance sheet date | 705,000 | 360,000 |
| Share options programme, total | 1,485,000 | 1,485,000 |
| Of this, allocated for a possible subsequent granting of options | 300,000 | 150,000 |
Options forfeited at the termination of an employee's employment may be granted to other employees on the same terms and conditions.
| Time of earliest exercise |
Number of options granted |
Number of employees who have been granted options |
Allocated for a pos sible sub sequent granting, no |
Number exercised |
Number of unexer cised at 31.12.2015 |
Exercise price |
Accumula ted costs recog nised DKKm |
|
|---|---|---|---|---|---|---|---|---|
| Executive Board | ||||||||
| Granted 2012, tranche 1 | 2014 | 100,000 | 3 | 40,000 | 0 | 60,000 | 21.12 | 0.33 |
| Granted 2012, tranche 2 | 2015 | 130,000 | 3 | 50,000 | 0 | 80,000 | 21.12 | 0.39 |
| Granted 2012, tranche 3 | 2016 | 160,000 | 3 | 60,000 | 0 | 100,000 | 21.12 | 0.50 |
| Other managerial staff | ||||||||
| Granted 2012, tranche 1 | 2014 | 130,000 | 6 | 0 | 0 | 130,000 | 21.12 | 0.43 |
| Granted 2012, tranche 2 | 2015 | 165,000 | 6 | 0 | 0 | 165,000 | 21.12 | 0.50 |
| Granted 2012, tranche 3 | 2016 | 200,000 | 6 | 0 | 0 | 200,000 | 21.12 | 0.62 |
| Other staff | ||||||||
| Granted 2012, tranche 1 | 2014 | 160,000 | 13 | 40,000 | 0 | 120,000 | 21.12 | 0.52 |
| Granted 2012, tranche 2 | 2015 | 200,000 | 13 | 50,000 | 0 | 150,000 | 21.12 | 0.60 |
| Granted 2012, tranche 3 | 2016 | 240,000 | 13 | 60,000 | 0 | 180,000 | 21.12 | 0.75 |
The share option programme was established to ensure performance-oriented and value-adding commitment. Also, the aim of the programme is to develop long-term loyalty and to constitute competitive remuneration to employees under this programme.
The fair value of the share option programme is DKK 0.0 million at 31 December 2015, calculated under the Black & Scholes pricing model (2014: DKK 1.4 million). The exercise of share options is conditional upon the holder not retiring from their position with the Group prior to the time of exercise.
Aside from the share option programme in North Media A/S, share options in the subsidiary, BEKEY A/S, were also granted at 1 July 2012 to two key members of staff. The share options entitle the two members of staff to acquire 12% of the total share capital in BEKEY A/S at a predetermined price. The option price will be increased by a share of future losses. The objective is to ensure incentive for a quick product and value development of the company while also ensuring a financial incentive to keep operating expenses and development costs down. The options may be exercised from the grant date and until 30 April 2016.
The option price is determined as the difference between the strike price at the grant date and an estimated fair value of BEKEY A/S at the grant date. The option price was calculated at DKK 0.9 million and is recognised in the income statement over the term of the options, which has been estimated at 3.8 years. In 2015, DKK 0.2 million (2014: DKK 0.2 million) was charged to staff costs.
North Media A/S has not committed itself to buying the shares back, but has pre-emptive rights to the shares if the option holders contemplate selling to a third party.
| 8 Fee to the auditors appointed by the General Meeting | 2015 DKKm |
2014 Dkkm |
|---|---|---|
| Deloitte | ||
| Statutory audit services | 1.8 | 1.8 |
| Other assurance engagements | 0.0 | 0.0 |
| Tax services | 0.1 | 0.2 |
| Other services | 0.6 | 0.7 |
| Total fee to the auditors appointed by the General Meeting | 2.5 | 2.7 |
| 9 Amortisation and depreciation | 2015 DKKm |
2014 Dkkm |
|---|---|---|
| Amortisation, intangible assets | 15.2 | 16.8 |
| Depreciation, property, plant and equipment Loss from sale/retirement of assets |
30.6 10.5 |
31.7 -0.3 |
| Total amortisation and depreciation | 56.3 | 48.2 |
As part of the efficiency measures taken for the production processes, plant has been retired at a carrying amount of DKK 10.3 million. In addition, the line item includes a loss of DKK 0.2 million from the sale of assets.
| 10 Share of profit/loss of associates after tax | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Share of profit/loss before tax | 0.5 | 0.5 |
| Share of tax | -0.7 | -0.6 |
| Loss on sales of investments | 0.0 | -1.3 |
| Total share of profit/loss of associates after tax | -0.2 | -1.4 |
| 11 Return on securities | 2015 mio. kr. |
2014 mio. kr. |
|---|---|---|
| Dividend | 2.7 | 1.0 |
| Net capital gains on shares | 11.2 | 12.2 |
| Interest and gain on bonds, net | -1.0 | 4.1 |
| Total return on securities | 12.9 | 17.3 |
A summary of the portfolio of securities is given in Note 23.
| 12 Net financials | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Exchange gains | 0.2 | 0.4 |
| Interest income etc | 0.3 | 0.3 |
| Total financial income | 0.5 | 0.7 |
| Interest expenses etc | 7.1 | 7.5 |
| Exchange losses | 0.0 | 0.3 |
| Fair value adjustment of other investments | 0.0 | 13.8 |
| Discount effect of the purchase price payable | 1.2 | 3.1 |
| Total financial expenses | 8.3 | 24.7 |
Financial expenses relate to financial liabilities measured at amortised cost, see Note 38. Financial expenses include the discount effect of the acquisition price payable on the acquisition price payable/future dividend for the acquisition of the remaining 30% of the shares in Lokalaviserne Østerbro og Amager A/S. Financial expenses also include the discount effect of the acquisition price payable for HentTilbud ApS, up to 30 June 2014, at which date the acquisition price was reversed.
In 2014, fair value adjustments of other investments consisted of a DKK 12.0 million write-down of the investment in Emply ApS. As part of the 5.5% investment in Emply ApS in 2013, Ofir A/S was granted sole distribution rights to the Emply Hire system in Denmark and Sweden. The Emply Hire system constitutes an important element of Ofir's strategy of strengthening ties between advertisement customers and the business. When sealing the investment, it was agreed that Emply ApS was to develop a range of Ofir-specific features. In step with the sub-deliverables and the accomplishment of a number of sales targets, it was agreed that Ofir was to invest further in Emply ApS. In 2014 and 2015, a total of DKK 9.5 million was invested for a total equity interest of 10.5%, bringing the aggregate equity interest to 16%.
The Group has assessed the fair value of Ofir's stake in Emply ApS and, based on this, estimated that no revaluation or writedown is necessary for 2015. In 2014, it was estimated that a total write-down of DKK 12.0 million was needed. At 31 December 2015, the investment was measured at DKK 3.0 million (2014: DKK 3.0 million).
Aside from the fair value adjustment of Emply ApS in 2014, the investment in Pressens Fællesindkøb was written down by DKK 1.8 million in 2014. At 31 December 2015, the investment was measured at DKK 1.5 million (2014: DKK 1.5 million), equalling the value in use of the company.
| 13 Special items | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Write-down of goodwill relating to Byggestart/HentTilbud ApS | 0.0 | 14.1 |
| Reversal of deferred consideration related to the acquisition of HentTilbud ApS | 0.0 | -8.2 |
| Severance costs on organisational change in HentTilbud ApS | 0.0 | 1.6 |
| Severance costs regarding change in management of North Media A/S | 3.3 | 0.0 |
| Impairment losses for former printing house | 9.6 | 0.0 |
| Write-down of goodwill related to local newspapers | 10.0 | 15.0 |
| Reversal of acquisition price payable related to the acquisition of Lokalaviserne Østerbro og Amager A/S |
-3.5 | -15.0 |
| Total special items, net | 19.4 | 7.5 |
Special items for 2015 include a partial write-down of goodwill related to the acquisition of the local newspapers in 2013, totalling DKK 10 million, and a reduction in the acquisition price payable of DKK 3.5 million related to the acquisition of the remaining 30% of the shares in Lokalaviserne Østerbro og Amager A/S. Results of the local newspapers have seen a poorer development than expected 12 months ago, which has demanded further write-down of goodwill and resulted in a reduction of the acquisition price payable concerning Lokalaviserne Østerbro og Amager A/S. The write-down of both line items is based on estimated future earnings from these newspapers which are now estimated to be lower due to intensified competition and generally declining income from advertisement sales.
In addition, the line item includes total impairment losses of DKK 9.6 million for the Group's former printing house in Elsinore. The property has been subjected to further write-down following an assessment of its current rent level. Based on these updated and more conservative assumptions, an indication of impairment in the total amount of DKK 9.6 million was identified.
Lastly, in 2015 the line item includes expenses regarding the former Chief Executive Officer during the resignation period.
In 2014, the line item included write-down of the balance goodwill related to the acquisition of Byggestart/HentTilbud.dk and reversal of the acquisition price payable for HentTilbud ApS. It also included DKK 1.6 million in severance pay to staff as around half of the organisation was dismissed.
In 2014, the line item also included a write-down of goodwill and reversal of the acquisition price payable for the acquisition of the remaining 30% of the shares in Lokalaviserne Østerbro og Amager A/S. The decrease in expected operating profit led to an indication of impairment of goodwill as well as reversal of the acquisition price payable.
As regards the assumptions underlying the impairment test, please refer to Note 17.
| 14 Income tax | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Tax on profit for the year | ||
| Current tax charges Change in the deferred tax charge Change in tax rate |
5.1 -9.4 1.0 |
17.0 -0.8 0.7 |
| Total tax on profit for the year | -3.3 | 16.9 |
| Tax on profit for the year | ||
| Calculated tax on the profit before tax 23.5% (2014: 24.5%) | -3.6 | 9.7 |
| Tax effect of: | ||
| Effect of tax transparent companies | 0.1 | -1.6 |
| Reversal of deferred tax previously capitalised | 0.0 | 2.8 |
| Reversal of purchase price payable | -0.8 | -2.0 |
| Net other non-deductible expenses/non-taxable income Share-based payment |
0.2 0.4 |
0.3 0.4 |
| Discount effect of the purchase price payable | 0.3 | 0.7 |
| Share of loss after tax of associates | 0.0 | 0.4 |
| Fair value adjustment of other investments | 0.0 | 3.4 |
| Tax free gain on sale of company | -0.6 | 0.0 |
| Change in tax rate | -1.0 | -0.7 |
| Impairment on goodwill | 1.7 | 3.5 |
| Total tax on profit for the year | -3.3 | 16.9 |
| Effective tax rate | 21.7% | 42.7% |
North Media A/S is jointly taxed with Baunegård ApS. Baunegård ApS is the administration company which attends to payment of income tax, including tax prepayment. Income tax payable is settled with the administration company.
| 15 Earnings per share | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Net profit/loss for the year - total | -11.4 | 22.7 |
| Minority interests' share of consolidated profit/loss | 1.8 | -2.1 |
| The North Media Group's share of the net profit/loss for the year | -9.6 | 20.6 |
| Average number of shares (in millions) | 20.1 | 20.1 |
| Average number of treasury shares | 1.5 | 1.5 |
| Average number of shares in circulation (in millions) | 18.6 | 18.6 |
| Average dilution effect of outstanding share options | 0.0 | 0.0 |
| Average number of diluted shares in circulation (in millions) | 18.6 | 18.6 |
| Earnings per share (EPS) - total | -0.5 | 1.1 |
| Diluted earnings per share (EPS-D) - total | -0.5 | 1.1 |
The calculation of diluted earnings per share does not include 1,185,000 share options (2014: 1,335,000), which have not been in-the-money, but which may potentially dilute earnings per share in future. The share options expire in the period 2016-2018, see details in Note 7.
At the Annual General Meeting on 8 April 2016, the Board recommends that no dividend be distributed for the financial year 2015 (2014: DKK 0.0 per share).
| 2015, DKKm | Goodwill | Other intangible assets |
Completed develop ment projects, software |
Develop ment projects in progress |
Total |
|---|---|---|---|---|---|
| Cost at 1 January | 130.2 | 109.2 | 117.5 | 0.6 | 357.5 |
| Additions for the year | 0.0 | 0.0 | 0.8 | -0.6 | 0.2 |
| Disposals in the year | -0.2 | 0.0 | 20.5 | 0.0 | 20.3 |
| Cost at 31 December | 130.4 | 109.2 | 97.8 | 0.0 | 337.4 |
| Amortisation and impairment losses at 1 January | 58.2 | 45.3 | 113.7 | 0.0 | 217.2 |
| Amortisation for the year | 0.0 | 13.1 | 2.1 | 0.0 | 15.2 |
| Impairment losses for the year | 10.0 | 0.0 | 0.0 | 0.0 | 10.0 |
| Amortisation of disposals | -0.1 | 0.0 | 20.5 | 0.0 | 20.4 |
| Amortisation and impairment losses at 31 December | 68.3 | 58.4 | 95.3 | 0.0 | 222.0 |
| Carrying amount at 31 December | 62.1 | 50.8 | 2.5 | 0.0 | 115.4 |
| Amortised over (years) | - | 3-10 | 3-5 | - | - |
Other intangible assets include assets worth DKK 14.9 million which are considered to have indefinite lives, for which reason they are not amortised. The majority of other intangible assets are amortised over five years.
2014, DKKm
| Cost at 1 January | 128.2 | 106.4 | 115.9 | 0.3 | 350.8 |
|---|---|---|---|---|---|
| Additions, assets transferred from DDC | 2.0 | 2.8 | 0.0 | 0.0 | 4.8 |
| Additions for the year | 0.0 | 0.0 | 1.6 | 0.3 | 1.9 |
| Cost at 31 December | 130.2 | 109.2 | 117.5 | 0.6 | 357.5 |
| Amortisation and impairment losses at 1 January | 30.1 | 27.8 | 110.9 | 0.0 | 168.8 |
| Amortisation for the year | 0.0 | 14.4 | 2.4 | 0.0 | 16.8 |
| Impairment losses for the year | 27.1 | 1.6 | 0.4 | 0.0 | 29.1 |
| Additions, assets transferred from DDC | 1.0 | 1.5 | 0.0 | 0.0 | 2.5 |
| Amortisation and impairment losses at 31 December | 58.2 | 45.3 | 113.7 | 0.0 | 217.2 |
| Carrying amount at 31 December | 72.0 | 63.9 | 3.8 | 0.6 | 140.3 |
| Amortised over (years) | - | 3-10 | 3-5 | - | - |
Other intangible assets include assets worth DKK 14.9 million which are considered to have indefinite lives, for which reason they are not amortised.
Assets with an indefinite life are not amortised, but are instead subject to an annual impairment test. Goodwill is by definition an asset with an indefinite life.
Other intangible assets comprise distribution rights and trademarks acquired in connection with acquisitions. For some of these assets, the Group cannot foresee a limit to the period over which the assets may be expected to generate future economic benefits for the Group. In these cases, the lives of the assets are therefore deemed indefinite, for which reason they are not amortised. Other intangible assets the lives of which are deemed limited are subjected to amortisation.
The Group's total goodwill of DKK 62.1 million includes DKK 22.9 million attributable to local newspapers, DKK 19.6 million attributable to FK Distribution and DKK 19.5 million attributable to BoligPortal.
Intangible assets with indefinite lives, other than goodwill, stand at DKK 14.9 million, DKK 3.0 million of which relates to FK Distribution and DKK 11.9 million to BoligPortal.
When preparing the financial statements, goodwill and intangible assets were tested for impairment for the following "Cash Generating Units" (CGU) holding intangible assets:
In 2015, this resulted in a DKK 10.0 million write-down of goodwill related to the local newspapers (2014: DKK 15.0 million). Byggestart.dk/HentTilbud.dk (now håndværker.dk) was also written down in 2014, then by DKK 14.1 million.
The primary assumptions underlying future earnings and impairment testing are the development in revenue and its spillover effect on the EBITDA margin.
The write-down of goodwill for"Lokalaviserne" is motivated by the expectation that revenue will continue to decline, which will have a negative impact on future earnings expectations.
The review for impairment now includes an expected future decline in revenue as opposed to previously a small increase or a flat development in revenue over the forecast period. The forecasted decline in revenue is lower than the general market contraction, which is expected to remain at 5-8% a year. The reason for the expectation that "Lokalaviserne" will do better than the general market is the fact that they enjoy extensive awareness among advertisers in the Copenhagen market – a market that is also expected to fare better than the general nationwide market.
Depending on revenue development in the next few years, it may prove necessary to write down goodwill and other intangible assets relating to "Lokalaviserne" by DKK 0 to 20 million. Based on the existing business plan and the sales initiatives implemented, assessments are, however, that the revenue forecasted for 2016 is realisable, implying that existing earnings may be upheld.
The sensitivity related to the outlook for future revenue development and the resulting earnings is substantial, however, it hinges on the ability to regularly adjust organisation and costs to the future market. An isolated additional revenue reduction by, for example, 1% throughout the forecast period will up the required write-down by up to DKK 10 million (assuming unchanged contribution ratio and costs). Should revenue take a negative turn, however, expectations are that costs may be adjusted to some degree, while intangible assets in the coming years are amortised at an amount equivalent to DKK 12.3 million a year. The overall uncertainty related to goodwill and other intangible assets in terms of further write-downs is therefore estimated to be small for "Lokalaviserne".
For FK Distribution, the impairment test shows a value in use considerably exceeding the value of its non-current assets and working capital, as a result of which there has been no reason to write down intangible assets related to this CGU.
For 2016, FK Distribution's EBITDA earnings expectations are lower than those realised in recent years. It is estimated, however, that EBITDA earnings will go up again from 2017 and onwards. This estimate is based primarily on FK Distribution in 2016 and onwards succeeding in upping the number of NoAds+ households from the current level of 550,000. Also, the largest investments in production equipment and IT infrastructure etc have already been made, meaning that in the years ahead only few investments will be necessary. If FK Distribution does not succeed in increasing EBITDA earnings, there is a risk, however, that intangible assets in the total amount of DKK 22.6 million would have to be written down in subsequent years.
BoligPortal is Denmark's largest housing advertising portal, whose revenue and positive earnings have gone up throughout the years. Earnings of BoligPortal are expected to continue to develop positively, and there has been no indication of impairment of goodwill or other intangible assets related to this site. Reduced earnings of even 20% would not affect the indication of impairment.
For as long as BoligPortal remains market leader, no write-down of goodwill or other intangible assets is estimated to be necessary.
The impairment model for the three CGUs holding intangible assets builds on the 2016 forecast, which is projected four years based on estimates of future developments in each CGU. For the subsequent terminal period, a growth factor of a negative 4% was used in 2015 (2014: a negative 4%) for all CGUs in the Print segment. This decline is slightly smaller than the market contraction expected for both the newspaper ad market and the distribution market, and is attributable to the Group believing that its products will fare better than the general print ad market.
For CGUs in the Online segment, a growth factor of 2% is still used in the terminal period (2014: 2%).
The tax rate used in the model is 22.0% (2014: 22.0-23.5%).
The impairment test was performed for each CGU by comparing the carrying amount of intangible assets and property, plant and equipment with the discounted values of future cash flows. As part of the impairment test, different discount rates are used for the print and online businesses, see below:
| Discount rate | Online | |
|---|---|---|
| 2015 after tax | 8.4% | 11.1% |
| 2015 before tax | 11.2% | 14.5% |
| 2014 after tax | 8.6% | 11.1% |
| 2014 before tex | 11.2% | 14.5% |
The discount rate is composed of a debt element and an equity element. For the Online segment only an equity element, however, as assessments are it would be difficult to obtain debt financing for the online business. The equity element has been determined on the basis of a risk-free interest rate plus a market risk premium weighted by an expected equity element. Similarly, the debt element is based on the interest rate on loan capital weighted by an expected debt element.
The increase in discount rate was triggered by the increased risk in the print business in particular, due to the declining market and the uncertainty surrounding the transformation from print to online.
The impairment model is generally not sensitive to an increase in the discount rate. However, "Lokalaviserne" would have to be written down by another DKK 10 million if the discount rate went up by 3% after tax.
| 2015, DKKm | Land and buildings |
Plant and machinery |
Fixtures and fittings |
Total |
|---|---|---|---|---|
| Cost at 1 January | 435.9 | 184.4 | 110.5 | 730.8 |
| Additions for the year | 0.6 | 6.5 | 3.7 | 10.8 |
| Disposals for the year | 0.0 | 14.6 | 4.1 | 18.7 |
| Cost at 31 December | 436.5 | 176.3 | 110.1 | 722.9 |
| Depreciation and impairment losses at 1 January | 143.7 | 122.2 | 97.6 | 363.5 |
| Depreciation for the year | 8.2 | 16.1 | 6.3 | 30.6 |
| Impairment losses for the year | 9.6 | 0.0 | 0.0 | 9.6 |
| Disposals for the year | 0.0 | 4.1 | 3.4 | 7.5 |
| Depreciation and impairment losses at 31 December | 161.5 | 134.2 | 100.5 | 396.2 |
| Carrying amount at 31 December | 275.0 | 42.1 | 9.6 | 326.7 |
| Depreciated over (years) | 20-50 | 5-10 | 3-5 | - |
| 2014, DKKm | ||||
| Cost at 1 January | 435.6 | 163.9 | 108.9 | 708.4 |
| Additions, assets transferred form DDC | 0.5 | 0.0 | 0.0 | 0.5 |
| Additions for the year | 0.0 | 20.5 | 4.5 | 25.0 |
| Disposals for the year | 0.2 | 0.0 | 2.9 | 3.1 |
| Cost at 31 December | 435.9 | 184.4 | 110.5 | 730.8 |
| Depreciation and impairment losses at 1 January | 134.5 | 106.7 | 92.5 | 333.7 |
| Depreciation for the year | 8.9 | 15.5 | 7.3 | 31.7 |
| Additions, assets transferred from DDC | 0.5 0.2 |
0.0 0.0 |
0.0 2.2 |
0.5 2.4 |
| Disposals for the year | ||||
| Depreciation and impairment losses at 31 December | 143.7 | 122.2 | 97.6 | 363.5 |
| Carrying amount at 31 December | 292.2 | 62.2 | 12.9 | 367.3 |
| Depreciated over (years) | 20-50 | 5-10 | 3-5 | - |
The Group's subsidiaries are evident from the group chart on page 114. There is no difference between ownership interest and share of voting rights in any of the Group's companies. Subsidiaries holding minority interests are listed below.
| Subsidiaries | Registered office |
Minority interest | |
|---|---|---|---|
| 2015 | 2014 | ||
| Tryksagsomdelingen Fyn P/S (TOF) | Svendborg | 50% | 50% |
| Tryksagsomdelingen Fyn Komplementar ApS (TOF) | Svendborg | 50% | 50% |
Reference is made to the group chart on page 114.
| DKKm Revenue Net profit/loss for the year Comprehensive income |
TOF 60.4 -3.6 -3.6 |
2015 Elimina tions |
Total | TOF 74.4 3.8 3.8 |
2014 Other minorities |
Elimina tions |
Total |
|---|---|---|---|---|---|---|---|
| Parent's share of profit/loss for the year | -1.8 | 1.9 | |||||
| Minority interests' share of profit/loss for the year |
-1.8 | 0.0 | -1.8 | 1.9 | 0.0 | 0.2 | 2.1 |
| Balance sheet | |||||||
| Non-current assets Current assets Current liabilities Parent's share of equity |
0.3 5.5 -7.3 1.4 |
4.3 15.2 -9.6 5.0 |
|||||
| Minority interests' share of equity | 1.4 | 0.0 | 1.4 | 5.0 | 0.0 | 0.2 | 5.2 |
| Contingent liabilities Cash flow statement |
0.0 | 0.0 | |||||
| Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities |
-0.2 0.0 -3.9 |
17.6 -4.4 -7.6 |
|||||
| Increase/decrease in cash and cash equivalents |
-4.1 | 0.0 | -4.1 | 5.6 | 0.0 | 3.9 | 9.5 |
| Transactions with minorities | |||||||
| Dividend paid to Parent Dividend to minority interests Purchase of shares in group enterprise |
1.9 2.0 0.0 |
0.0 0.0 |
2.0 0.0 |
3.8 3.8 0.0 |
0.0 0.0 7.6 |
0.0 0.0 |
3.8 7.6 |
The Group is not subject to restrictions on access to transacting with the Group's assets or repaying the Group's liabilities. The only exception is that cash and cash equivalents of Tryksagsomdeling Fyn P/S and the relating general partnership are recognised at DKK 0.4 million in the consolidated financial statements whereas the Group's actual ownership share of these cash and cash equivalents stands at DKK 0.2 million.
| Registered | ||||
|---|---|---|---|---|
| 20 Investments in associates |
office | Ownership | ||
| 2015 | 2014 | |||
| Significant associates | ||||
| A/S Vestsjællandske Distriktsblade (VD) | Slagelse | 50.0% | 50.0% | |
| Dansk Distributions Center ApS and the relating general partnership (DDC) | Taastrup | 50.0% | 50.0% | |
| Mesto.ua | Ukraine | 21.4% | 20.0% | |
| Reference is made to the group chart on page 114. |
| 2015 | 2014 | |
|---|---|---|
| DKKm | DKKm | |
| Net asset value at 1 January | 11.0 | 25.0 |
| Additions for the year | 1.2 | 5.0 |
| Disposals for the year | 0.0 | -5.3 |
| Share of profit/loss before tax | 0.5 | 0.5 |
| Share of tax | -0.7 | -0.6 |
| Dividend received/capital reduction | -3.5 | -13.6 |
| Net asset value at 31 December | 8.5 | 11.0 |
In 2014, DKK 5.0 million was invested in an Ukrainian housing portal, and DKK 1.2 million in additional capital was contributed to the company in 2015. The Group's equity interest is 21.4% at year-end 2015 (2014: 20.0%).
The investment in Shopbox ApS was sold at the end of June 2014, and a loss of DKK 1.3 million taken to profit or loss, see Note 10.
| VD | Mesto Immaterial | 2015 total | VD | DDC Immaterial | 2014 total | |||
|---|---|---|---|---|---|---|---|---|
| Ownership | 50% | 21,4% | - | - | 50% | 50% | - | - |
| Revenue | 33.6 | 0.2 | - | - | 35.3 | 0.0 | - | - |
| Profit/loss for the year | 4.2 | -7.0 | - | - | 3.4 | -0.2 | - | - |
| Comprehensive income | 4.2 | -7.0 | - | - | 3.4 | -0.2 | - | - |
| Parent's share of comprehensive income |
1.2 | -1.4 | 0.0 | -0.2 | 0.8 | -0.1 | -0.8 | -0.1 |
| Balance sheet | ||||||||
| Non-current assets | 6.3 | 0.0 | - | - | 8.0 | 0.0 | - | - |
| Current assets | 13.3 | 0.1 | - | - | 14.2 | 0.0 | - | - |
| Non-current liabilities | -0.3 | 0.0 | - | - | -0.1 | 0.0 | - | - |
| Current liabilities | -6.1 | 0.0 | - | - | -6.1 | 0.0 | - | - |
| Net assets (equity) | 13.2 | 0.1 | - | - | 16.0 | 0.0 | - | - |
| Parent's share of equity in associates (book value) |
3.4 | 4.8 | 0.3 | 8.5 | 5.6 | 0.4 | 5.0 | 11.0 |
| Transactions with associates | ||||||||
| Dividend received from | ||||||||
| associates | 3.5 | 0.0 | 0.0 | 3.5 | 3.3 | 9.6 | 0.0 | 12.9 |
| Capital increases/acquisition of equity interests |
0.0 | 1.2 | 0.0 | 1.2 | 0.0 | 0.0 | 5.3 | 5.3 |
| Capital reduction | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.7 | 0.0 | 0.7 |
| Contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
The Group has no non-recognised shares of losses in associates, either in 2015 or in previous years.
None of the associates are subject to limitations with respect to distribution of cash dividends aside from the general requirements for propriety of dividends under Danish company law.
| 21 Inventories | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Work in progress | 1.6 | 1.1 |
| Manufactured goods and goods for resale | 9.1 | 3.9 |
| Total inventories | 10.7 | 5.0 |
No goods are expected to be sold more than 12 months after the balance sheet date. DKK 8.4 million in cost of sales has been recognised in direct costs (2014: DKK 2.5 million).
| 22 Trade receivables | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Trade receivables | 82.2 | 94.0 |
| Write-downs | -4.1 | -2.3 |
| Trade receivables, net | 78.1 | 91.7 |
| Write-downs included in the above receivables have developed as follows: | ||
| Write-downs at 1 January | 2.3 | 3.2 |
| Expensed for the year, net | 2.8 | 1.5 |
| Recovered from previous year | 0.2 | 0.1 |
| Recorded losses | -1.2 | -2.5 |
Write-downs at 31 December *) 4.1 2.3
*) In Note 38, in the section on credit risk, the balance on receivables due is evident.
A write-down account is used to reduce the carrying amount of trade receivables, the value of which is impaired due to risk of loss.
Based on historical experience, amounts are recognised in the write-down account beginning from when receivables have been overdue for more than 30 days. When receivables have been overdue for more than 90 days, the amount is fully provided for. If a customer suspends payments or goes bankrupt, an individual assessment is made that may result in a further indication of impairment. Neither 2015 nor 2014 saw indications of material impairment aside from the general writedowns.
In the financial year under review, interest income totalling DKK 0.0 million was recognised with respect to receivables written down (2014: 0.1 million).
| 23 Securities | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Mortgage bonds | 0.0 | 61.6 |
| Corporate bonds | 0.0 | 72.4 |
| Shares | 196.1 | 70.7 |
| Securities 31 December | 196.1 | 204.7 |
At 31 December 2015, the portfolio of securities, which is measured at fair value, comprises listed Danish and foreign shares and share-based investment funds.
| 24 Cash and cash equivalents | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Cash and cash equivalents comprise | ||
| Cash | 92.4 | 43.5 |
| Cash and cash equivalents | 92.4 | 43.5 |
| 25 Deferred tax | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Deferred tax at 1 January, net Deferred tax included in net profit/loss for the year Change in tax rate |
16.1 -9.4 1.0 |
16.2 -0.8 0.7 |
| Deferred tax at 31 December, net | 7.7 | 16.1 |
| DKKm | Assets | 2015 Liabilities |
Total | Assets | 2014 Liabilities |
Total |
|---|---|---|---|---|---|---|
| Specification of deferred tax | ||||||
| Intangible assets | 1.1 | 11.9 | -10.8 | 1.4 | 16.1 | -14.7 |
| Property, plant and equipment | 4.7 | 0.0 | 4.7 | 2.5 | 1.9 | 0.6 |
| Current assets | 0.3 | 1.1 | -0.8 | 0.3 | 1.5 | -1.2 |
| Non-current liabilities | 0.0 | 0.8 | -0.8 | 0.0 | 0.8 | -0.8 |
| Total | 6.1 | 13.8 | -7.7 | 4.2 | 20.3 | -16.1 |
| Set-off of deferred tax assets and deferred tax liabilities within the same legal tax entities and jurisdictions |
6.1 | 6.1 | 0.0 | 4.2 | 4.2 | 0.0 |
| Deferred tax liabilities at 31 December | 0.0 | 7.7 | -7.7 | 0.0 | 16.1 | -16.1 |
| Number in thousands |
Nominal value DKK'000 |
|||
|---|---|---|---|---|
| Share capital | 2015 | 2014 | 2015 | 2014 |
| Number of shares at 1 January | 20,055 | 20,055 | 100,275 | 100,275 |
| Number of shares at 31 December | 20,055 | 20,055 | 100,275 | 100,275 |
The share capital consists of 20,055,000 shares of DKK 5.00 nominal value each, fully paid in. No shares carry special rights.
| 26 Equity, continued | 2015 | 2014 | ||||
|---|---|---|---|---|---|---|
| Treasury shares | Number in thousands |
Nominal value DKK'000 |
% of share capital |
Number in thousands |
Nominal value DKK'000 |
% of share capital |
| At 1 January | 1,485 | 7,425 | 7.40% | 1,485 | 7,425 | 7.40% |
| At 31 December | 1,485 | 7,425 | 7.40% | 1,485 | 7,425 | 7.40% |
North Media A/S is authorised by the company in general meeting to acquire a maximum nominal amount of DKK 15,041,000 of share capital. This authorisation runs until 26 March 2020.
In the financial years 2015 and 2014, North Media A/S has not acquired or sold treasury shares.
The portfolio of treasury shares was acquired with a view to funding share options outstanding relating to the Group's share option programme, see details in Note 7.
The reserve for treasury shares includes the accumulated purchase price of the Company's portfolio of treasury shares. The reserve is dissolved for the portion of the portfolio of shares that is cancelled or sold.
The hedging reserve includes the accumulated net change in the fair value of hedging transactions which meet the criteria for hedging future cash flows, with the transaction hedged not having been carried out yet.
The reserve for foreign currency translation adjustments includes all exchange rate adjustments resulting from the translation of financial statements of entities using a functional currency other than DKK as well as exchange adjustments relating to assets and liabilities which represent part of the Group's net investments in such entities.
| 27 Debt to financial institutions etc | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Mortage debt | 145.7 | 137.8 |
| Carrying amount | 145.7 | 137.8 |
| Of which, floating rate (CIBOR-6 loan) Of which, fixed rate Debt to financial institutions is included under the following items in the balance sheet |
82.8 62.9 |
73.4 64.4 |
| Non-current liabilities Current liabilities |
139.2 6.5 |
131.9 5.9 |
| Carrying amount | 145.7 | 137.8 |
| Nominal value | 149.0 | 141.0 |
| Fair value | 149.4 | 141.0 |
Debt to financial institutions includes a capital loss relating to the raising of a loan of DKK 3.5 million (2014: DKK 3.2 million) which is amortised over the remaining time to maturity. Please refer to Note 38 for information on interest rate sensitivity and to Note 39 for information on fair value.
| 28 Fair value, interest-rate swap | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Fair value, interest-rate swap | 13.3 | 15.8 |
| Non-current portion | 13.3 | 15.8 |
| Fair value, interest-rate swap | 3.0 | 3.2 |
| Current portion | 3.0 | 3.2 |
| Fair value, interest-rate swap | 16.3 | 19.0 |
The Group's CIBOR-6 loans (that is falling due on 30 September 2031) carrying a floating interest rate are repaid as a 20-year annuity loan. In order to reduce interest rate uncertainty, the interest rate was fixed throughout the term of the loan via an interest-rate swap. The interest-rate swap is also repaid as a 20-year annuity loan based on a fixed interest rate, including contributions of 5.38% p.a.
The interest rate on the CIBOR 6 loans including the interest-rate payments under the swap agreement are recognised in financial expenses.
The interest-rate swap is measured at fair value at 31 December 2015. The value of the interest-rate swap (debt) is DKK 16.3 million (DKK 19.0 million in 2014), and revaluations are recognised through other comprehensive income.
The interest-rate sensitivity of the interest-rate swap is described in more detail in Note 38 under the section Interestrate risks, and computation of fair value is described in Note 39.
| 29 Purchase price payable | 2015 | 2014 |
|---|---|---|
| DKKm | DKKm | |
| Net liability value at 1 January | 23.8 | 51.8 |
| Additional | 0.0 | 4.8 |
| Payments | -8.8 | -11.5 |
| Value adjustments | -3.5 | -24.4 |
| Discount effect of the purchase price payable | 1.2 | 3.1 |
| Total purchase price payable | 12.7 | 23.8 |
| Non-current part | ||
| 6.1 | 15.4 | |
| Current part | 6.6 | 8.4 |
| Total purchase price payable | 12.7 | 23.8 |
| Specified as follows: | ||
| Purchase price payable, Lokalaviserne Østerbro og Amager A/S, see Note 12 | 12.7 | 16.9 |
| Purchase price payable, HentTilbud ApS | 0.0 | 2.1 |
| Purchase price payable, Emply ApS, see Notes 12 and 39 | 0.0 | 4.8 |
| Purchase price payable | 12.7 | 23.8 |
DKK 6.6 million of the purchase price payable falls due in 2016, whereas the remaining purchase price falls due in 2017-2019.
| 30 Other payables |
2015 DKKm |
2014 DKKm |
|---|---|---|
| A tax (PAYE) etc payable to public authorities | 0.9 | 1.6 |
| VAT liability | 9.6 | 14.5 |
| Holiday pay obligation | 38.0 | 38.6 |
| Other debt | 35.7 | 33.2 |
| Total other payables | 84.2 | 87.9 |
| 31 Adjustments for non-cash operating items | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Share of profit in associates | 0.2 | 1.4 |
| Tax on profit/loss for the year | -3.3 | 16.9 |
| Amortisation and depreciation of assets | 45.8 | 48.4 |
| Loss on disposals/retirement of assets | 10.5 | -0.2 |
| Share-based payment | 1.5 | 1.8 |
| Special items, non-cash effect | 16.0 | 5.9 |
| Net financials | -20.7 | -11.7 |
| Value adjustments, securities | 12.9 | 17.4 |
| Total adjustments | 62.9 | 79.9 |
| 32 Changes in working capital | ||
|---|---|---|
| Increase/decrease in receivables etc | 10.7 | 16.5 |
| Increase/decrease in current liabilities | -17.2 | -9.1 |
| Changes in working capital | -6.5 | 7.4 |
| 33 Investments in intangible assets and property, plant and equipment |
| Investment in software | -0.2 | -1.9 |
|---|---|---|
| Investment in land and buildings | -0.6 | 0.0 |
| Investment in plant and machinery | -6.5 | -20.5 |
| Investment in operating equipment, fixtures and fittings | -3.7 | -4.5 |
| Total investments | -11.0 | -26.9 |
| 34 Operating leases and rental obligations | 2015 DKKm |
2014 DKKm |
|---|---|---|
| Operating leases | ||
| Future minimum expenses related to operating leases: Due within 1 year |
0.0 | 0.0 |
| Total | 0.0 | 0.0 |
| The Group has no operating leases relating to operating assets. | ||
| For operating leases the following amounts have been recognised in the income statement |
0.0 | 0.0 |
| Rental obligations | ||
| Future minimum payments related to rental obligations: Due within 1 year |
2.0 | 2.1 |
| Due within 1 and 5 years | 0.0 | 0.3 |
| Total | 2.0 | 2.4 |
| For rental obligations the following amounts have been recognised in the income statement |
3.6 | 4.1 |
The Company participates in a Danish joint taxation arrangement in which Baunegård ApS serves as the administration company. According to the joint taxation provisions of the Danish Corporation Tax Act, the Company is therefore liable from the financial year 2013 for income taxes etc for the jointly taxed companies and from 1 July 2012 also for obligations, if any, relating to the withholding of tax on interest, royalties and dividend for the jointly taxed companies.
| 36 Security for loan |
2015 | 2014 |
|---|---|---|
| DKKm | DKKm | |
| Carrying amount for mortgaged properties provided as security for the Group's mortgage | ||
| debt | 264.7 | 272.1 |
| Bonds have been deposited as security for payment of the remaining purchase price for HentTilbud ApS, value |
0.0 | 15.7 |
As a majority shareholder in North Media A/S' Parent, Baunegård ApS, Richard Bunck is subject to the disclosure requirements for related parties. During the financial year and last financial year, there were no transactions with Richard Bunck except for the payment of remuneration to the Board of Directors.
Baunegård ApS is wholly owned and controlled by Richard Bunck. This company is an administration company in the joint taxation arrangement with North Media A/S and manages payment/receipt of Danish income tax on behalf of the North Media Group's Danish companies. Baunegård ApS (registered in the Municipality of Fredensborg) pre-pares the consolidated financial statements, in which North Media A/S and its subsidiaries are included.
Board Member Ulrik Holsted-Sandgreen is an attorney-at-law and partner of Horten (formerly a partner of Plesner), the law firm providing professional advice to the Company. Therefore, Ulrik Holsted-Sandgreen may not be considered independent. Horten has not issued invoices to the Group for fees in 2015, whereas Plesner has submitted invoices for a total of DKK 1.2 million during the period when Ulrik Holsted-Sandgreen was partner with this firm. In 2014, Plesner issued invoices to the Group for a total of DKK 0.9 million for advisory services during the period when Ulrik Holsted-Sandgreen was partner with this firm.
In the year under review no transactions were made with the Board of Directors, Executive Board, managerial staff, significant shareholders or other related parties, except for salaries and remuneration set out in Note 7.
North Media has transactions with associates and subsidiaries in the form of ordinary business activities such as buying and selling services and internal rental agreements. All related party transactions are conducted on an arm's length basis.
Transactions with subsidiaries are eliminated in the consolidated financial statements in accordance with the accounting policies.
| 2015 DKKm |
2014 DKKm |
|
|---|---|---|
| Transactions with associates | ||
| A/S Vestsjællandske Distriktsblade, sale | 6.6 | 6.6 |
| Total transactions | 6.6 | 6.6 |
| Dansk Distributions Center P/S | 0.0 | 0.2 |
| A/S Vestsjællandske Distriktsblade | 0.6 | 0.4 |
| Total receivables | 0.6 | 0.6 |
The Group's handling of risks and risk management are described in detail in a separate section in the management commentary. Supplementary information for understanding the Group's financial risks is given below.
The Group's cash reserves consist of cash funds in the total amount of DKK 92.4 million. (2014: DKK 43.5 million). In addition, the Group has readily negotiable securities of DKK 196.1 million. (2014: DKK 204.7 million). Presently, the Group has undrawn overdraft facilities of DKK 25.0 million.
| 2015, DKKm | Carrying amount |
Contractual cash flow** |
Within 3 months |
Within 3-12 months |
1-5 years | After 5 years |
|---|---|---|---|---|---|---|
| Financial instruments | ||||||
| Financial institutions incl interest-rate swap* | 162.0 | 206.6 | 0.0 | 12.2 | 46.0 | 148.4 |
| Trade payables | 43.1 | 43.1 | 43.1 | 0.0 | 0.0 | 0.0 |
| Purchase price payable, see Note 29 | 12.7 | 14.1 | 0.0 | 6.7 | 7.4 | 0.0 |
| Other payables | 84.2 | 84.2 | 46.2 | 38.0 | 0.0 | 0.0 |
| Liabilities at 31 December | 302.0 | 348.0 | 89.3 | 56.9 | 53.4 | 148.4 |
| 2014, DKKm | ||||||
| Financial instruments | ||||||
| Financial institutions incl interest-rate swap* | 156.8 | 218.8 | 0.0 | 12.2 | 46.8 | 159.8 |
| Trade payables | 51.2 | 51.2 | 51.2 | 0.0 | 0.0 | 0.0 |
| Purchase price payable, see Note 29 | 23.8 | 27.1 | 0.0 | 8.4 | 18.7 | 0.0 |
| Other payables | 87.9 | 87.9 | 49.3 | 38.6 | 0.0 | 0.0 |
*) The contractual cash flow for the interest-rate swap has been included in figures for financial institutions as, in the Company's view, this provides the truest and fairest view of the total cash flows from the financing activity. **) Inclusive of known/determined interest payments.
Liabilities at 31 December 319.7 385.0 100.5 59.2 65.5 159.8
It is group policy to hedge the interest-rate risk of the Group's loans when the Group believes that the interest payments can be secured at a satisfactory level compared to the related costs. Hedging is usually made through interest-rate swaps, where floating-rate loans are changed into a fixed interest rate. However, a minor share of the mortgage borrowing may be maintained as floating-rate loans if this is deemed attractive.
In 2012, the Group's fixed-interest mortgage loans were refinanced. An additional loan for a total of DKK 14.0 million was raised in 2015. The Group's mortgage loans can be stated as follows:
| 2015 | 2014 | |
|---|---|---|
| DKKm | DKKm | |
| CIBOR 6 loan, 30-year annuity loan falling due on 30 September 2045 | 9.0 | 0.0 |
| CIBOR 6 loan, 20-year annuity loan falling due on 30 September 2035 | 4.9 | 0.0 |
| CIBOR 6 loan, 20-year annuity loan falling due on 30 September 2031 | 68.9 | 73.4 |
| 3% bond debt, 30-year annuity loan falling due on 30 September 2041, convertible | 62.9 | 64.4 |
| Fair value of interest-rate swap | 16.3 | 19.0 |
| Total mortgage debt incl interest-rate swap | 162.0 | 156.8 |
The main part of the CIBOR 6 loan maturing in 2031 is fixed through an interest-rate swap. A minor share of the loan totalling DKK 4.0 million (2014: DKK 4.6 million) is not fixed.
Fluctuations in the interest-rate level affect the Group's bank deposits, mortgage debt and market value of interest-rate swaps. An increase in the interest-rate level by 1% per annum will have no significant effect on the fair values of the CIBOR 6 loans because their interest rates are determined every six months. The fair value (debt) of the interest-rate swap will, however, be increased by DKK 4.3 million in the event of a drop in the interest-rate level by 1% annually. An increase in the interest-rate level would reduce the fair value of the interest-rate swap by DKK 4.0 million. The duration has been determined at 6.0. For 2014, the interest-rate sensitivity of the interest-rate swap was approximately DKK 4.2 million in the event of an increase in the interest-rate level by 1% per annum (and a decline in the interest-rate level would increase the interest-rate swap by DKK 4.6 million), equivalent to a duration of 6.5.
The bond debt is recognised at amortised cost, and fluctuations in the fair value are therefore not recognised in the financial statements. A 1% increase per year in the interest-rate level would reduce the fair value of the debt by DKK 3.8 million. Conversely, a drop in the interest-rate level by 1% would only increase the fair value of the debt by DKK 0.0 million as a result of the debt is callable at par. For 2014, an increase in the interest-rate level by 1% would have reduced the fair value of the debt by DKK 0.5 million, while a drop in the interest rate by 1% would have increased the fair value of the debt by DKK 0.0 million.
The calculation of the Group's interest rate sensitivity is based on the following assumptions:
The Group's cash and cash equivalents are mainly placed in the Group's cash pool account, on which negative interest is currently charged. The interest rate of deposits is considered immaterial.
As to the Group's financial assets and liabilities, the carrying amount may be allocated on the following contractual dates of interest-rate adjustment or expiry, depending on which date comes first, and how large a portion of the interest-carrying assets and liabilities carry fixed interest. Loans carrying floating interest are considered having interest-rate adjustment dates falling within a year. Interest-rate swaps are included in the table by the underlying debt and not fair value.
| 2015, DKKm | Within 1 year |
Between 2 - 5 years |
After 5 years |
Total | Average duration |
|---|---|---|---|---|---|
| Bank deposits | 92.4 | 0.0 | 0.0 | 92.4 | 1 |
| Mortgage debt, fixed rate | -1.6 | -7.0 | -54.3 | -62.9 | 5 |
| Mortgage debt, floating rate | -4.9 | -19.6 | -58.3 | -82.8 | 1 |
| Interest-rate swap | 4.1 | 18.4 | 42.4 | 64.9 | 7 |
| 31 December | 90.0 | -8.2 | -70.2 | 11.6 | - |
| 2014, DKKm | |||||
| Bonds | 4.5 | 32.6 | 96.9 | 134.0 | 2 |
| Bank deposits | 43.5 | 0.0 | 0.0 | 43.5 | 1 |
| Mortgage debt, fixed rate | -1.6 | -6.8 | -56.1 | -64.5 | 5 |
| Mortgage debt, floating rate | -4.2 | -17.1 | -52.0 | -73.3 | 1 |
| Interest-rate swap | 3.9 | 17.5 | 47.4 | 68.8 | 7 |
| 31 December | 46.1 | 26.2 | 36.2 | 108.5 | - |
Acquisition price payable is not included in the Group's determination of interest-rate risks as the discount rate is not affected directly by market-oriented interest-rate risks.
A major portion of the Group's excess liquidity is placed in 13 different Danish and foreign shares and share-based investment funds, see description in the Financial review on page 15. A 10% change in the share price would influence profit or loss for the year and equity by DKK 19.6 million (2014: DKK 7.1 million). A 10% change in the USD exchange rate compared to the exchange rate at 31 December 2015 would influence profit or loss for the year and equity by DKK 4.0 million (2014: DKK 1.6 million). Please refer to page 15 in the Financial review for a more detailed description of returns and value at risk.
More than 97% of the Group's activities are in Denmark and invoiced in Danish kroner. There are minor activities in the UK, Sweden and Germany.
No significant direct trading takes place between business entities in different countries, and North Media is only insignificantly exposed to currency risks with respect to cash flows from financial transactions and dividend flows with the exception of share price exposure, see above. An insignificant translation risk exists with respect to consolidating and translating foreign subsidiaries' financial statements to Danish kroner, and in connection with the Group's net investments in these companies. The maximum aggregate currency risk of the direct trading between business entities is estimated to be DKK 1.0 million and is therefore not hedged.
The Group purchases newsprint for its newspaper activities. Newsprint is paid in DKK, but the underlying purchase price is tied to SEK and NOK. A 10% increase in SEK and NOK on DKK would inevitably result in an increase in paper prices of approximately DKK 3 million.
The Group has no noteworthy currency risks with respect to receivables and debt denominated in foreign currencies at 31 December 2015 and 2014.
The Group is particularly exposed to credit risks vis-à-vis receivables and deposits with banks. The maximum credit risk equals the carrying amount. The Group's credit risk policy ensures that the Group's cash resources are spread across various asset types and counterparties.
No noteworthy credit risks are considered to be associated with cash and cash equivalents as the counterparties are banks designated by the Danish Financial Supervisory Authority as systemically important financial institutions. Outstanding receivables are regularly followed up on in accordance with the Group's receivables policy. If uncertainty arises as to a customer's ability or willingness to pay an amount receivable, and estimations are that the claim is subject to risk, write-down is made to hedge this risk.
The Group has no significant risks relating to a single customer or business partner. In accordance with the Group's credit risk assumption policy, all major customers and other business partners are subject to continuous credit assessment. At 31 December 2015, total receivables of DKK 39.2 million are credit-insured with a maximum credit risk of DKK 9.1 milion (2014: DKK 50.5 million, and a maximum credit risk of DKK 6.7 million).
In the past three years, the Group's bad debts have been at the level of 1.0‰ to 3.0‰ of revenue.
The balance overdue on trade receivables is composed as follows:
| 2015, DKKm | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|
| Overdue trade receivables, not impaired | 18.4 | 1.4 | 0.4 | 0.0 | 20.2 |
| Overdue trade receivables, impaired | 0.0 | 0.5 | 0.3 | 4.3 | 5.1 25.3 |
| Write-down | -4.1 | ||||
| Trade receivables, net value at 31 December 2015 | 21.2 | ||||
| 2014, DKKm | |||||
| Overdue trade receivables, not impaired | 25.0 | 1.6 | 0.3 | 0.0 | 26.9 |
| Overdue trade receivables, impaired | 0.0 | 0.5 | 0.3 | 2.1 | 2.9 29.8 |
| Write-down | -2.3 | ||||
| Trade receivables, net value at 31 December 2014 | 27.5 |
| 39 Carrying amount, financial assets and liabilities DKKm |
Carrying amount |
Fair value | Carrying amount |
Fair value |
|---|---|---|---|---|
| 2015 | 2014 | |||
| Trade receivables | 78.1 | 78.1 | 91.7 | 91.7 |
| Receivables from associates | 0.6 | 0.6 | 0.6 | 0.6 |
| Other receivables | 3.9 | 3.9 | 3.6 | 3.6 |
| Cash | 92.4 | 92.4 | 43.5 | 43.5 |
| Financial assets, measured at amortised cost | 175.0 | 175.0 | 139.4 | 139.4 |
| Other securities and investments | 4.7 | 4.7 | 4.7 | 4.7 |
| Securities | 196.1 | 196.1 | 204.7 | 204.7 |
| Financial assets, measured at fair value through profit or loss | 200.8 | 200.8 | 209.4 | 209.4 |
| Financial institutions | 145.7 | 149.4 | 137.8 | 141.0 |
| Trade payables | 43.1 | 43.1 | 51.2 | 51.2 |
| Income tax payable | 3.6 84.2 |
3.6 84.2 |
1.5 87.9 |
1.5 87.9 |
| Other payables | ||||
| Financial liabilities, measured at amortised cost | 276.6 | 280.3 | 278.4 | 281.6 |
| Purchase price payable | 12.7 | 12.7 | 23.8 | 23.8 |
| Financial liabilities, measured at fair value through profit or loss |
12.7 | 12.7 | 23.8 | 23.8 |
| Interest-rate swap | 16.3 | 16.3 | 19.0 | 19.0 |
| Financial liabilities, used as hedging instruments | 16.3 | 16.3 | 19.0 | 19.0 |
The fair value of securities has been calculated at the market price at 31 December 2015 and 31 December 2014, respectively, for the individual securities (level 1).
The fair value for credit institutions has been calculated based on the market price at 31 December 2015 and 31 December 2014, respectively, based on the loans' underlying bonds (level 1).
Interest-rate swaps are measured using an income method where expected cash flows are based on relevant observable swap curves and discounted using a discount rate that reflects the credit risk of relevant counterparties (level 2).
Fair value and fair value adjustments of other investments are described in detail in Note 12 (level 3).
Fair value of acquisition price payable has been calculated using the fair value model (level 3). For more details, including the fair value adjustments for the year, please refer to Notes 4, 12 and 29.
For other assets and liabilities, carrying amount is considered to equal fair value.
No further events other than those mentioned in the Annual Report have occurred up to the presentation of the Annual Report on 11 February 2016 which would influence the financial statement user's evaluation of the Annual Report.
At the board meeting of 11 February 2016, the Board of Directors authorised this Annual Report for publication. The Annual Report will be submitted for approval at the Annual General Meeting on 8 April 2016.
North Media A/S' Board of Directors and Executive Board
Notes to the consolidated statements North Media A/S 107
EXECUTIVE POSITIONS AT NORTH MEDIA A/S Chairman of the Board of Directors of North Media A/S since 2 April 2004. Term of office expires in 2016.
Born: 1940
Does not comply with the corporate governance recommendations on independence as Richard Bunck is the principal shareholder of the Company.
− CEO, Ofir A/S
The Board of Directors of North Media A/S has asked Richard Bunck to undertake the role as chief executive officer of the subsidiary, Ofir A/S, until further notice.
OTHER DIRECTORSHIPS AT SUBSIDIARIES
Member of the Board of Directors/Executive Officer of:
Trained in shipping at EAC (ØK). At the age of 23 he took up employment with the Thule Airbase in Greenland, performing administrative and managerial tasks.
On returning to Denmark in 1965, Richard Bunck acquired 50% of the business Reklame Distribution in Copenhagen, which later changed its name to Forbruger-Kontakt. In 1978, Richard Bunck published the first edition of Søndagsavisen. In 1996, the first Internet activities began, and the Company went public on the Stock Exchange.
So, Richard Bunck is a model entrepreneur who sees new business opportunities as society and the market change and develop. The activities are founded on strong principles reflecting the Group's values in respect of customer focus, accountability, quality, fairness and positive aggressiveness.
EXECUTIVE POSITIONS AT NORTH MEDIA A/S Vice Chairman of the Board of Directors of North Media A/S since 29 April 2005. Term of office expires in 2016. Appointed Chairman of the Audit Committee by the Board of Directors. Born: 1944
Complies with the corporate governance recommendations on independence.
| 2007-2008 | CEO of Danpo/Kronfågel Group, |
|---|---|
| Denmark and Sweden | |
| 2001-2005 | CEO and Group Managing Director of |
| Swedish Meats ek. för, Sweden | |
| 1997-2001 | CEO of TULIP International Ltd., UK |
| 1991-1997 | CEO of companies in the Danish slaughter |
| ing and refinement sector | |
| 1988-1991 | CEO and Group Managing Director of ESS |
| FOOD UK Group, UK | |
Has the following special skills that are specifically relevant to the work on the Board of North Media A/S:
In-depth knowledge about strategic management of broadly founded businesses as well as accounting, finances and other financial matters.
EXECUTIVE POSITIONS AT NORTH MEDIA A/S Member of the Board of Directors of North Media A/S since 25 April 2003. Term of office expires in 2016. Appointed member of the Audit Committee by the Board of Directors. Born: 1953
No longer complies with the corporate governance recommendations on independence as he has been on the Board of Directors for more than 12 years.
1978 MSc (strategic planning and accounting description methodology)
| 2012-2016 | CEO of Forenede Service A/S |
|---|---|
| 2005-2012 | Wholesaler – Owner of Unicare Nordic A/S |
| 2000-2005 | CEO of Gatetrade.net |
| 1999 | CEO and Group Managing Director of FDB |
| Group Managing Director of Det Berlingske Officin |
|---|
| Group Managing Director of Dagrofa |
| CEO of Dagrofa Friskvarer A/S |
1984-1987 Group Purchasing Manager of Dagrofa A/S
Has the following special skills that are specifically relevant to the work on the Board of North Media A/S: Detailed knowledge about strategic management of businesses with many employees within service, the grocery sector and media as well as accounting, finances and other financial matters.
Attorney and partner at Horten Advokatpartnerselskab
EXECUTIVE POSITIONS AT NORTH MEDIA A/S Member of the Board of Directors of North Media A/S since 4 April 2008. Term of office expires in 2016. Born: 1970
| 2005 | Entitled to appear before the Danish |
|---|---|
| Supreme Court | |
| 1998 | Licensed to practice law |
− Member of the Højesteretsskranken Association
Has the following special skills that are specifically relevant to the work on the Board of North Media A/S: In-depth knowledge about legal matters, international as well as national, inclu ding company and stock market law.
OTHER DIRECTORSHIPS AT SUBSIDIARIES
services to Richard Bunck and the Group.
Does not comply with the corporate governance recommendations on independence as Ulrik Holsted-Sandgreen is an attorney and partner at the law firm of Horten Advokatpartnerselskab, which renders professional advisory
| EXECUTIVE POSITIONS AT NORTH MEDIA A/S |
SKILLS/TRAINING 2011 |
Executive MBA – CBS-SIMI, Copenhagen Business School |
|---|---|---|
| Media A/S at 1 September 2006. Born: 1969 |
2005 | Advanced Development Programme - Cran field School of Management, London, England |
| 2000 | Programme for Executive Development – IMD, |
|
| Lausanne, Switzerland | ||
| − CEO, North Media Ejendomme ApS | 1994 | HD graduate in accounting and financial management, Copenhagen Business School |
| PREVIOUS EMPLOYMENT | ||
| 2001-2005 | Senior Financial Controller, | |
| The East Asiatic Company Ltd. A/S | ||
| (Singapore) | ||
| 1997-2001 | Assistant to CEO Plumrose Latinoamerica | |
| na C.A., Caracas, Venezuela | ||
| 1995-1997 | Administration Manager, Plumrose | |
| Latinoamericana C.A., Cagua, Venezuela | ||
| 1991-1995 | Manager Accounts, ØK/EAC Shipping A/S, | |
| Copenhagen | ||
| − Member, MatchWork World Wide A/S | ||
| Joined the Executive Board of North OTHER EXECUTIVE POSITIONS AT SUBSIDIARIES OTHER DIRECTORSHIPS AT SUBSIDIARIES − Chairman, BEKEY International A/S − Chairman, BoligPortal.dk ApS − Chairman, Spirebox ApS − Chairman, Spirebox 2 ApS − Chairman, Søndagsavisen A/S − Vice Chairman, Lokalaviserne Østerbro og Amager A/S − Member, BostadsPortal ApS − Member, Helsingør Dagblad A/S − Member, håndværker.dk A/S − Member, MatchWork Danmark A/S |
− Member, Ofir A/S
| EXECUTIVE POSITIONS | SKILLS/TRAINING | |
|---|---|---|
| AT NORTH MEDIA A/S | 1989 | Bachelor in Marketing, Copenhagen |
| Joined the Executive Board of North | Business School | |
| Media A/S at 1 January 2016. | 1983 | Savings bank clerk, Sparekasseskolen |
| Born: 1962 | (Danish Savings Bank School) | |
| 1981 | Upper Secondary Examination | |
| (Mathematics/Physics Line), Ribe | ||
| Business School | |
|---|---|
| 1983 | Savings bank clerk, Sparekasseskolen |
| (Danish Savings Bank School) | |
| 1981 | Upper Secondary Examination |
| (Mathematics/Physics Line), Ribe | |
| Kathedralskole |
| 2004-2010 | CEO of Søndagsavisen a-s |
|---|---|
| 1995-2002 | CEO of Forbruger-Kontakt A/S |
| 1990-1994 | Kgl. Brand/Skandia/If, Head of Retail |
| Customer Centre/Regional Manager |
Arne Ullum Laursen CEO of North Media Aviser A/S
EXECUTIVE POSITIONS AT NORTH MEDIA A/S Joined the Executive Board of North Media A/S at 1 August 2009. Born: 1963
| 1991 | Master of Art, American University, |
|---|---|
| Washington D.C., USA | |
| 1987 | Journalist, Danish School of Journalism |
| 2003-2008 | Editor-in-chief, CEO, B.T. |
|---|---|
| 2001-2003 | Head of organisational development, Pro |
| gramme Manager's staff, Danmarks Radio | |
| 1998-2001 | Head of DR-Dokumentar, Danmarks Radio |
| 1995-1997 | Chief sub-editor, Børsens Nyhedsmagasin |
OTHER DIRECTORSHIPS AT SUBSIDIARIES − CEO, Søndagsavisen A/S
OTHER DIRECTORSHIPS AT SUBSIDIARIES AND ASSOCIATES
EXECUTIVE POSITIONS AT NORTH MEDIA A/S Joined the Executive Board of North Media A/S at 1 January 2016. Born: 1974
OTHER DIRECTORSHIPS AT SUBSIDIARIES
OTHER DIRECTORSHIPS AT SUBSIDIARIES
| 2002 | Master of Arts, University of Aarhus |
|---|---|
| PREVIOUS EMPLOYMENT | |
| 2008-2009 | BoligPortal.dk ApS, Portal Director |
| 2007-2008 | Alfa Laval Kolding A/S, eBusiness Project |
| Manager | |
| 2007-2007 | Visiolink ApS, eBusiness Manager |
EXECUTIVE POSITIONS AT NORTH MEDIA A/S Joined the Executive Board of North Media A/S at 1 January 2016. Born: 1975
| 2010 | Head of legal department, Better Place |
|---|---|
| 2007-2010 | Head of legal department Søndagsavisen |
| 2005-2007 | Law firm of Accura Advokatfirma |
| 2005 | Law firm of MAQS Advokatfirma |
| 2002-2004 | Danish Ministry of Justice – Copenhagen |
| Police |
OTHER DIRECTORSHIPS AT SUBSIDIARIES − CEO, BEKEY International A/S
| SKILLS/TRAINING | |
|---|---|
| 2007 | Paralegal |
| 2005 | MBA Stockholm School of Economics |
| 2002 | Master of Law, University of Copenhagen |
*See Note 4 subsidiary pursuant to ownership agreement
* The company will be formed with accounting effect from 1 January 2016.
Financial statements 1 January – 31 December 2015
| Parent income statement | 119 |
|---|---|
| Assets | 120 |
| Equity and liabilities | 121 |
| Parent statement of changes in equity | 122 |
| Notes | 123 |
| Note | 2015 DKKm |
2014 DKKm |
|
|---|---|---|---|
| Revenue | 53.7 | 55.2 | |
| 44 | Staff costs | 39.0 | 31.0 |
| 45 | Other external expenses | 31.9 | 34.0 |
| Amortisation and depreciation | 1.3 | 1.7 | |
| EBIT | -18.5 | -11.5 | |
| 50 | Share of profit/loss in subsidiaries | -12.5 | 21.6 |
| 51 | Share of profit/loss in associates | 1.2 | -0.7 |
| 46 | Financial income | 13.0 | 17.3 |
| Financial expenses | 0.3 | 1.1 | |
| Gain/loss from divestments | 2.3 | 0.0 | |
| Reversal of acquisition price payable | 0.0 | 8.2 | |
| Profit/loss before tax | -14.8 | 33.8 | |
| 47 | Tax for the year, income | -1.1 | 1.7 |
| Net profit/loss for the year | -13.7 | 32.1 | |
| Attributable, net profit/loss | |||
| Retained earnings | -13.7 | 32.1 | |
| -13.7 | 32.1 |
For distribution of profit, please see page 40 in the Annual Report.
| Note | 2015 DKKm |
2014 DKKm |
|
|---|---|---|---|
| Software | 0.2 | 0.3 | |
| 48 | Intangible assets | 0.2 | 0.3 |
| Operating equipment, fixtures and fittings | 1.7 | 2.1 | |
| 49 | Property, plant and equipment | 1.7 | 2.1 |
| 50 | Investments in subsidiaries | 389.5 | 422.6 |
| 51 | Investments in associates | 3.4 | 5.6 |
| Securities | 0.1 | 0.1 | |
| 52 | Deferred tax asset | 0.1 | 0.2 |
| Other receivables | 3.6 | 3.6 | |
| Fixed asset investments | 396.7 | 432.1 | |
| Total non-current assets | 398.5 | 434.5 | |
| Receivables from subsidiaries | 23.9 | 30.6 | |
| Other receivables | 1.8 | 0.8 | |
| Prepayments | 3.0 | 4.5 | |
| Total receivables | 28.7 | 35.9 | |
| Securities | 196.1 | 204.7 | |
| Cash | 85.0 | 30.3 | |
| Total current assets | 309.8 | 270.9 | |
| Total assets | 708.3 | 705.3 |
| Note | 2015 DKKm |
2014 DKKm |
|
|---|---|---|---|
| Share capital Retained earnings |
100.3 381.5 |
100.3 391.8 |
|
| Shareholders' equity | 481.8 | 492.1 | |
| Trade payables Payables to subsidiaries |
2.6 207.3 |
2.5 199.3 |
|
| 53 | Income tax payable Purchase price payable |
3.6 0.0 |
1.5 2.1 |
| 54 | Other payables | 13.1 | 7.8 |
| Total current liabilities | 226.6 | 213.2 | |
| Total liabilities | 226.6 | 213.2 | |
| Total equity and liabilities | 708.4 | 705.3 |
55 Rental obligations
56 Contingent liabilities
57 Related parties
| DKKm | Share capital |
Retained earnings |
Total |
|---|---|---|---|
| Equity at 1 January 2015 | 100.3 | 391.8 | 492.1 |
| Changes in equity in 2015 | |||
| Foreign currency translation adjustments, foreign subsidiaries and associates | 0.0 | -0.3 | -0.3 |
| Adjustments of investments in subsidiaries and associates | 0.0 | 2.4 | 2.4 |
| Net loss for the year | 0.0 | -13.7 | -13.7 |
| Share-based payment | 0.0 | 1.3 | 1.3 |
| Total changes in equity in 2015 | 0.0 | -10.2 | -10.3 |
| Equity at 31 December 2015 | 100.3 | 381.5 | 481.8 |
| DKKm | Share capital |
Retained earnings |
Total | ||
|---|---|---|---|---|---|
| Equity at 1 January 2014 | 100.3 | 361.1 | 461.4 | ||
| Changes in equity in 2014 | |||||
| Foreign currency translation adjustments, foreign subsidiaries and associates | 0.0 | -0.2 | -0.2 | ||
| Adjustments of investments in subsidiaries and associates | 0.0 | -2.7 | -2.7 | ||
| Net profit for the year | 0.0 | 32.1 | 32.1 | ||
| Share-based payment | 0.0 | 1.5 | 1.5 | ||
| Total changes in equity in 2014 | 0.0 | 30.7 | 30.7 | ||
| Equity at 31 December 2014 | 100.3 | 391.8 | 492.1 | ||
| Development in share capital | 2015 | 2014 | 2013 | 2012 | 2011 |
| Share capital at 1 January | 100.3 | 100.3 | 100.3 | 100.3 | 100.3 |
| Share capital at 31 December | 100.3 | 100.3 | 100.3 | 100.3 | 100.3 |
The parent financial statements have been prepared in accordance with the provisions of the Danish Financial Statements Act for reporting class D enterprises and the financial reporting requirements of NASDAQ OMX Copenhagen for listed companies.
The Annual Report is presented in Danish kroner.
Accounting policies are unchanged compared to 2014.
The Parent's recognition and measurement criteria are identical to the Group's accounting policies except in the following areas:
The Parent's profit or loss includes the proportionate share of the net profits or losses of the individual group enterprises after full elimination of intra-group gains or losses and net of amortisation of goodwill.
Investments in group enterprises are measured according to the equity method in the balance sheet at the proportionate share of net asset value plus goodwill regarding such group enterprises.
Both in the consolidated financial statements and in the parent financial statements, investments in associates are determined using the equity method inclusive of a share of goodwill. In the parent financial statements, goodwill is amortised based on the principles below.
Goodwill is measured at cost less accumulated amortisation and impairment losses.
Goodwill is amortised over its estimated economic life which is determined based on Management's experience of the individual business areas. Goodwill is amortised on a straight-line basis over the amortisation period which is not more than ten years and longest for strategically acquired companies with a strong market position and a long-term earnings profile. Amortisation of goodwill is recognised in the income statement under investments in subsidiaries.
The value of group enterprises and associates inclusive of goodwill is tested for impairment in the event of any indication of impairment. The value of group enterprises and associates is written down to the higher of value in use and net selling price of the individual group enterprise or associate.
Subsidiaries and associates with a negative net asset value are measured at DKK 0 and any amount due from these companies is written down by the Parent's share of the negative net asset value to the extent that it is found to be uncollectible. Should the negative net asset value exceed the amount due, the remaining amount will be recognised under provisions to the extent that the Parent has a legal or constructive obligation to cover the liabilities of the company concerned and a loss is expected to follow from this.
Dividend expected to be paid for the year is presented as a separate item under equity.
| 44 Employees and staff costs |
2015 | 2014 |
|---|---|---|
| number | number | |
| Average number of employees | 35 | 33 |
| Total amount of wages, salaries and remuneration for the year was: | 2015 | 2014 |
| DKKm | DKKm | |
| Wages and salaries including holiday pay | 28.7 | 24.6 |
| Defined contribution plans | 1.8 | 1.7 |
| Other social security costs | 0.1 | 0.0 |
| Fee to the Board of Directors | 1.1 | 1.1 |
| Other staff costs | 7.3 | 3.6 |
| Total staff costs | 39.0 | 31.0 |
| 2015, DKKm | Board of Directors |
Executive Board |
Total |
|---|---|---|---|
| Wages and salaries | 1.2 | 8.5 | 9.7 |
| Defined contribution plans | 0.0 | 0.4 | 0.4 |
| Share-based payment | 0.0 | 0.3 | 0.3 |
| Severance pay | 0.0 | 3.3 | 3.3 |
| Total remuneration | 1.2 | 12.5 | 13.7 |
| Number of members | 4 | 3 | 7 |
| 2014, DKKm | Board of Directors |
Executive Board |
Total |
|---|---|---|---|
| Wages and salaries | 1.2 | 8.3 | 9.5 |
| Defined contribution plans | 0.0 | 0.4 | 0.4 |
| Share-based payment | 0.0 | 0.4 | 0.4 |
| Total remuneration | 1.2 | 9.1 | 10.3 |
| Number of members | 4 | 3 | 7 |
| 45 Fee to the auditors appointed by the Company in General Meeting |
2015 | 2014 |
|---|---|---|
| DKKm | DKKm | |
| Statutory audit services | 0.4 | 0.4 |
| Tax services | 0.0 | 0.2 |
| Other services | 0.6 | 0.6 |
| Total fee to auditors | 1.0 | 1.2 |
| 46 Financial income |
2015 | 2014 |
| DKKm | DKKm | |
| Dividend | 2.7 | 0.7 |
| Interest and gains on bonds, net | -0.9 | 4.1 |
| Net capital gains on shares | 11.2 | 12.5 |
| Total financial income | 13.0 | 17.3 |
| 47 Income tax |
2015 | 2014 |
| DKKm | DKKm | |
| Income tax in the income statement | ||
| Current tax charges, incl financing charges | -1.2 | 1.6 |
| Changes in the deferred tax charge | 0.1 | 0.1 |
| Total tax on profit/loss for the year, income | -1.1 | 1.7 |
| 2015, DKKm | Acquired rights |
Software | Total |
|---|---|---|---|
| Cost at 1 January | 8.0 | 4.4 | 12.4 |
| Disposals for the year | 0.0 | 0.1 | 0.1 |
| Cost at 31 December | 8.0 | 4.3 | 12.3 |
| Amortisation and impairment losses at 1 January | 8.0 | 4.1 | 12.1 |
| Amortisation for the year | 0.0 | 0.1 | 0.1 |
| Disposals for the year | 0.0 | 0.1 | 0.1 |
| Amortisation and impairment losses at 31 December | 8.0 | 4.1 | 12.1 |
| Carrying amount at 31 December | 0.0 | 0.2 | 0.2 |
| Amortised over (years) | 5-10 | 3-5 | |
| 2014, DKKm | Acquired rights |
Software | Total |
| Cost at 1 January | 8.0 | 4.2 | 12.3 |
| Additions for the year | 0.0 | 0.2 | 0.2 |
| Cost at 31 December | 8.0 | 4.4 | 12.5 |
| Amortisation and impairment losses at 1 January | 8.0 | 3.9 | 11.9 |
| Amortisation for the year | 0.0 | 0.2 | 0.2 |
| Amortisation and impairment losses at 31 December | 8.0 | 4.1 | 12.1 |
| Carrying amount at 31 December | 0.0 | 0.3 | 0.3 |
| Amortised over (years) | 5-10 | 3-5 |
| 2015, DKKm | Operating equipment, fixtures and fittings |
Total |
|---|---|---|
| Cost at 1 January | 7.8 | 7.8 |
| Additions for the year | 1.0 | 1.0 |
| Disposals for the year | 1.1 | 1.1 |
| Cost at 31 December | 7.7 | 7.7 |
| Depreciation and impairment losses at 1 January | 5.7 | 5.7 |
| Depreciation for the year | 1.1 | 1.1 |
| Disposals for the year | 0.8 | 0.8 |
| Depreciation and impairment losses at 31 December | 6.0 | 6.0 |
| Carrying amout at 31 December | 1.7 | 1.7 |
| Depreciated over (years) | 3-5 | |
| 2014, DKKm | Operating equipment, fixtures and fittings |
Total |
| Cost at 1 January | 6.8 | 6.8 |
|---|---|---|
| Additions for the year | 1.0 | 1.0 |
| Cost at 31 December | 7.8 | 7.8 |
| Depreciation and impairment losses at 1 January | 4.2 | 4.2 |
| Depreciation for the year | 1.5 | 1.5 |
| Depreciation and impairment losses at 31 December | 5.7 | 5.7 |
| Carrying amount at 31 December | 2.1 | 2.1 |
|---|---|---|
| -------------------------------- | ----- | ----- |
| Depreciated over (years) | 3-5 | |
|---|---|---|
| 50 Investments in subsidiaries |
2015 DKKm |
2014 DKKm |
|---|---|---|
| Cost | ||
| Cost at 1 January | 1.136.2 | 1.067.7 |
| Additions for the year | 26.0 | 68.6 |
| Disposals for the year | -17.5 | 0.0 |
| Cost at 31 December | 1.144.7 | 1.136.2 |
| Net revaluation according to the equity method at 1 January | -713.7 | -619.7 |
| Translation adjustments | -0.2 | -0.2 |
| Share of profit/loss for the year | -10.2 | 28.3 |
| Amortisation, goodwill | -2.3 | -6.6 |
| Dividend received | -47.0 | -112.7 |
| Other adjustments | 2.4 | -2.8 |
| Disposals for the year | 15.8 | 0.0 |
| Net revaluation according to the equity method at 31 December | -755.2 | -713.7 |
| Carrying amount at 31 December | 389.5 | 422.6 |
| Of which, goodwill | 4.3 | 6.6 |
Reference is made to the group chart on page 114.
| 51 Investments in associates |
2015 | 2014 |
|---|---|---|
| DKKm | DKKm | |
| Cost | ||
| Cost at 1 January | 9.2 | 14.4 |
| Disposals for the year | 0.0 | -5.2 |
| Cost at 31 December | 9.2 | 9.2 |
| Net revaluation according to the equity method at 1 January | -3.6 | -3.1 |
| Share of profit/loss for the year | 1.2 | -0.1 |
| Dividend | -3.4 | -3.3 |
| Disposals for the year | 0.0 | 2.9 |
| Net revaluation according to the equity method at 31 December | -5.8 | -3.6 |
| Carrying amount at 31 December | 3.4 | 5.6 |
| Of which, goodwill | 0.0 | 0.0 |
Investments in Shopbox ApS were sold at the end of June 2014, and a loss of DKK 0.6 million expensed in "Profit/loss from investments in associates".
Reference is made to the group chart on page 114.
| 52 | 2015 | 2014 |
|---|---|---|
| Deferred tax | DKKm | DKKm |
| Deferred tax at 1 January | -0.2 | -0.3 |
| Deferred tax for the year included in net profit/loss for the year | 0.1 | 0.1 |
| Deferred tax at 31 December, net | -0.1 | -0.2 |
| Deferred tax | Assets | Liabilities | Total 2015 | Assets | Liabilities | Total2014 |
|---|---|---|---|---|---|---|
| DKKm | ||||||
| Intangible assets | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.1 |
| Property, plant and equipment | 0.6 | 0.0 | -0.6 | 0.8 | 0.0 | -0.8 |
| Receivables | 0.0 | 0.5 | 0.5 | 0.0 | 0.5 | 0.5 |
| Total | 0.6 | 0.5 | -0.1 | 0.8 | 0.6 | -0.2 |
| 53 Income tax payable |
2015 DKKm |
2014 DKKm |
|---|---|---|
| Income tax payable at 1 January | 1.5 | 4.8 |
| Current tax for the year recognised in profit or loss | -1.2 | 1.6 |
| Tax payable under the joint taxation arrangement | 6.9 | 14.3 |
| Income tax paid for the year | -3.6 | -19.1 |
| Income tax payable at 31 December | 3.6 | 1.5 |
| 54 | 2015 | 2014 |
|---|---|---|
| Other payables | DKKm | DKKm |
| A-tax (PAYE) etc payable to public authorities | 0.1 | 0.0 |
| Holiday pay obligation | 4.1 | 4.2 |
| Other payables | 8.9 | 3.6 |
| Total other payables | 13.1 | 7.8 |
| 55 Rental obligations |
2015 | 2014 |
|---|---|---|
| Future total expenses related to rental obligations: | DKKm | DKKm |
| Due within 1 year | 6.9 | 7.2 |
| Due within 1 and 5 years | 22.8 | 30.9 |
| Total | 29.7 | 38.1 |
| With respect to rental obligations, the following amounts have been recognised in the income statement: |
7.7 | 8.0 |
Reference is made to Note 35 to the consolidated financial statements concerning contingent liabilities.
Reference is made to Note 37 to the consolidated financial statements for a description of related party transactions.
North Media A/S Gladsaxe Møllevej 28 DK-2860 Søborg CVR.no. 66 59 01 19 Telephone: +45 39 57 70 00 www.northmedia.dk
Gladsaxe Møllevej 28 DK-2860 Søborg CVR.no. 32 88 36 99 Telephone: +45 39 57 75 00 www.sondagsavisen.dk
FK Distribution Fyn P/S Ryttermarken 17 B DK-5700 Svendborg CVR.no. 27 16 77 80 Telephone: +45 62 22 22 22 www.fk.dk
Helsingør Dagblad A/S Klostermosevej 101 DK-3000 Helsingør CVR.no. 86 73 67 13 Telephone: +45 49 22 21 10
DK-2630 Taastrup CVR.no. 27 50 79 80 Telephone: +45 43 43 99 00 www.bekey.dk
Bredebjergvej 6 DK-2630 Taastrup CVR.no. 26 89 97 37 Telephone: +45 43 43 99 00 www.fk.dk
Ebertsgade 2, 1. sal DK-2300 København S CVR.no. 32 44 54 89 Telephone: +45 35 42 25 15
Gladsaxe Møllevej 26 DK-2860 Søborg CVR.no. 25 16 55 27 Telephone: +45 39 57 77 66 www.ofir.dk
8-14 Vine Hill London EC1R 5DX United Kingdom Telephone: +44 (0)20 7520 1600 www.matchwork.com
håndværker.dk ApS Gladsaxe Møllevej 28 DK-2860 Søborg CVR.no. 31 25 89 60 Telephone: +45 88 82 09 00 www.håndværker.dk www.henttilbud.dk
P. Hjort Lorenzens Vej 2A, 3. sal DK-8000 Aarhus C CVR.no. 26 72 25 35 Telephone: +45 70 20 80 82 www.boligportal.dk
Bostadsportal ApS Gladsaxe Møllevej 28 DK-2860 Søborg CVR.no. 27 50 79 72 Telephone: +45 39 57 70 00 www.bostadsportal.se
Spirebox ApS Gladsaxe Møllevej 28 DK-2860 Søborg CVR.no. 36 43 56 74 Telephone: +45 39 57 70 00
A/S Vestsjællandske Distriktsblade Nytorv 10, 1. DK-4200 Slagelse CVR.no. 13 91 29 98 Telephone: +45 58 53 32 22
Gladsaxe Møllevej 28 · DK - 2860 Søborg Telephone: +45 39 57 70 00 · Fax: +45 39 66 74 15 E-mail: [email protected] · www. northmedia.dk
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