NHST Media Group - Quarterly Report 3rd quarter

NHST GROUP’S DEVELOPMENT IN THE THIRD QUARTER 2019

The restructuring of NHST Media Group continued in the third quarter of 2019 to secure higher digital content revenues, improved profitability and an increased growth rate going forward. The Q3 results were affected by this process.

The Group reported total revenues of NOK 288.4 million for the third quarter and an operating loss of NOK 15.0 million , compared to revenues of NOK 318.0 million and an operating loss of NOK 0.7 million for the corresponding period last year. One-off costs related to restructuring amounted to NOK 16.2 million for the third quarter.

- We continue to see growth in revenues from digital subscriptions, which is crucial to secure the future growth and competitiveness of NHST in a market characterized by substantial changes. Facing a challenging advertising market, we need to reduce costs to secure acceptable profitability. These measures will enable technology investments, competence developmen, and further development of products and services throughout the Group, providing the foundation for future growth, says Group CEO Hege Yli Melhus Ask.

To secure more cost efficient production processes for both printed and digital publications, the Group is consolidating production and distribution to one shared digital platform for the media segments. This work will continue into 2020.

Dagens Næringsliv experienced a significant reduction in advertising revenues in the second and third quarter of 2019. The financial development of Morgenbladet was weak as a result of lower advertising revenues and higher operating expenses compared to the corresponding period last year.

- The development in Dagens Næringsliv and Morgenbladet have triggered the need for cost reductions in both publications. We aim to secure that each publication has sufficient financial strength to further develop its products, high quality journalism and its market position. The financial position must be robust enough to absorb fluctuations in the revenues, says Ask.

The number of full-time equivalents (FTEs) is expected to be be reduced by a total of approximately 30 in Dagens Næringsliv and Morgenbladet. This is an important part of a cost reduction program which is expected to reduce the cost base for these units by approximately NOK 38 million in 2020 compared to 2019.