We see -1.5% sales growth y-o-y & +2.3pp EBIT growth

YesPlease subscribers back to ~50% following dip

ABGSCe in high end of guidance, FVR to DKK 110-165

EPS driven by strong equity portfolio during October
With strong seasonal comps for Q3’21e on sales, we estimate North Media will deliver sales of DKK 257 (-1.5% y-o-y), but see a continued margin expansion with an EBIT margin of 25.5% (2.3pp y-o-y). We reduce our return on securities estimate to DKK 0m (DKK 12m) for Q3’21e, with weighted gains in Genmab, DSV, Novo Nordisk and SEA and losses in Amazon, SimCorp, Orsted, Visa, Teradyne and PayPal. However, we see positive signs during October (~3.4%), and thus increase our return on securities to 20m (DKK -34m) for Q4’21e driven by strong rebounds in nearly all North Media’s equity holdings. This is the basis of our EPS changes for 2021e.

Tough comps in Q3, but can likely uphold high margins
We reiterate our organic considerations. FK Distribution had one extra trading week last year, so we forecast -5% growth for Q3’21 and flat EBIT margin growth of 26% (0.3pp y-o-y). YesPlease subscribers were up in July-September ‘21 to a normalised ~50% following a decrease from 52% to 49% during COVID-19. Following a slow H1’21 for BoligPortal (3% y-o-y growth) due to the platform upgrade, which increased its revenue streams to 5 (2), we believe the company is on track to deliver higher sales growth of 13% in H2’21e, alongside an EBIT margin of ~35%, on par with H1’20’s all-time high. Due to order postponements from three municipalities, we believe North Media’s subsidiary Bekey will deliver a sales decline of ~14% in H2’21e and an EBIT level (DKK -3m) on par with H1’21. For the group overall, we reiterate our estimates of revenue and EBIT (bsi.) of DKK 1,039m and DKK 262m, which is at the high end of guidance (rev: DKK 1,025-1,035 and EBIT: DKK 250-265m)

FVR up to DKK 110-165 (106-159)
With the higher return on our securities estimate for 2021, we increase our fair value range to DKK 1
...

research@abgsc.com (Introduce.se)

ABG Sundal Collier - Introduce.se