North Media (NM) delivered in line with its FY ’21 guidance by reporting Q4 rev. of DKK 286m (3.1% vs. ABGSCe at DKK 277m) and Q4 EBIT of DKK 57m (11.8% vs. ABGSCe at DKK 51m). Net profit of DKK 67m was stronger than our est. (48.2% vs. ABGSCe at DKK 45m) largely due to ABGSCe underestimating NM’s return on securities of DKK 26m (vs. ABGSCe at DKK 13m). Last Mile drove the outperformance while Digital Services delivered in line with ABGSCe. NM proposed a div. of DKK 5 per share (5.2% yield) and aspires to keep this fixed in ’23-‘24.
No surprises in ’22 guidance
NM guides for ’22 rev. of DKK 1,010-1,045m, in line with the ’21 level (DKK 1,034m), with EBIT in the DKK 190-220m range. The rev. guidance is in accordance with its prelim. ’22 guidance issued on 2 Dec ’21, while EBIT is widened by DKK -2m at the low end and DKK +8m at the high end when adj. for a neg. EBIT impact of DKK 8m from BoligManager (acquired per 1 Feb ’22). The lower ‘22 EBIT guidance vs. ’21 (particularly after adj. for the DKK 20m write-off in Bekey in ’21) follows general cost inflation and full-year inclusion of effects seen in Q4’21. NM’s new ’23-‘24 ambition of 3% org. growth is above ABGSCe at 2% in ‘24, while its 20% EBIT margin ambitions match our 20.4% est.
Undemanding valuation, FVR 90-140 (100-150) on est. chgs.
With a change of analyst, we have thoroughly reviewed our estimates following the Q4 release and ’22 guidance. Our estimates now call for ’22 group revenue of DKK 1,030m, in line with guidance, while our EBIT estimate for ’22 of DKK 209m is towards the high end of guidance. We expect a structural revenue decline in Last Mile (we estimate net -3% in ’22 and -2% in ’23-24) and while we are not convinced by its capital allocation strategy and its DKK 753m internally managed...
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