Media Norge Birger Magnus, EVP Schibsted 1 Establishment of Media Norge • Challenging market conditions reinforces strategic rationale • Long and bumpy road so far • Difficult market conditions call for IPO postponement 2 Background • The regional media-companies are especially important to the broad and unique Norwegian media-diversity • The Norwegian media-landscape and especially the printed newspapers, face great challenges from global players and media-owners without editorial motivation or tradition • In five years, the Norwegian media-market will look different from what it does today • If we want to preserve a diverse and important press, we will have to take important measures 3 The strong rationale is still valid The regional newspapers are facing a common challenge – both advertisers and users are migrating from printed to online news and content • Large share of classified ads have already migrated online • The younger generations are reading less printed newspapers Joint strategic efforts between the media houses have been very successful • FINN is an unparalleled success story • The newspapers combined sales company have outperformed the market over several years A formal integration of the media houses will make it possible to extract even greater sources of value • Revenue upside from development of new products and services • Synergies from improved cost efficiency and economies of scale/scope • Significant potential from consolidating and reducing investments • Creating a stronger employee value proposition and increasing likelihood of attracting and retaining top management talent 4 Media Norge – structure and vision 50.1 % 100 % 88.7 % Media Norge aims to become the leading media company in Norway – characterised by capacity for innovation and the systematic development of new products in all available channels – both regionally and nationally 5 Media Norge will be a national media house with a strong regional presence • The Media Norge headquarters will be located in Bergen • Regional centers of excellence will be established based on available competencies and resources • At least three of the board members elected by employees, including the deputy chairman will be based in the respective regions • Regional news and content will continue to be the core of each media house 6 …with attractive positions in Norway’s most important regions Top 10 – largest cities Top 10 – wealthiest counties Thousands, 2007 GDP per capita, NOK thousands, 2007 Oslo 857 Oslo/ Akershus 451 Bergen 224 Rogaland 336 Stavanger 186 Hordaland 324 Trondheim 157 Sør-Trøndelag 290 Fredrikstad/ 100 Sogn og Fjordane Sarpsborg 282 Drammen 95 Møre og Romsdal 270 Porsgrunn/ Vest-Agder Skien 86 270 Kristiansand 67 Buskerud 266 Tromsø 54 Vestfold 255 Tønsberg 47 Troms 254 7 …and a strong cash flow Revenue 1H 08 EBITDA 1H 08 1H 07 in brackets 1H 07 in brackets 368 (282) 239 (216) 180 385 (141) (362) 556 44 (528) 2699 69 (34) 2640 (108) 524 587 115 (134) 1153 (1167) 139 (170) AP BT STA FVN Finn Total 1H 07 AP BT STA FVN Finn Total 1H 07 8 Note: Proforma, not consolidated figures Synergy potential communicated to the market in 2007 NOK million PRELIMINARY TBD 17-21 67-92 285-313 200 Increased IT, ad Editorial, print New media Total advertising production, call and distribution revenues center, casual sales, support functions 9 Operational areas with identified synergy potential 10 Successful integration of national ad sales National ad sales ”Fire Store” • Two separate sales forces targeting the • Center of excellence same customers integrated in the • Regional or multi regional footprint Aftenposten media house • One common sales force • Jointly covering the most important urban areas in Norway 11 Dividend policy ”Media Norge aims to practise a dividend policy that results in the group’s direct yield being competitive both in the Norwegian market and amongst European media companies. The general guideline of the group is that dividends shall be equivalent to 35-60% of post-tax earnings, but it is also concerned with achieving stability in the level of dividends over time. The dividend level may be maintained in years characterised by recession or particularly large investments, provided that it is justifiable to do so given the capital structure of the group.” 12 Pro-forma shareholder structure 13 A long and bumpy road 2006 August Schibsted announces talks between Aftenposten, Bergens Tidende, Adresseavisen, Fædrelandsvennen and Stavanger Aftenblad about a potential merger December Schibsted board of directors approves merger plans 2007 February Extraordinary general meetings in the media houses approved the merger plans April Notice from The Norwegian Competition Authority about a possible intervention against the establishment of Media Norge June The Media Norge merger approved by The Norwegian Competition Authority July The Norwegian Media Authority announces decision to stop the establishment of Media Norge. Schibsted and the other Media Norge companies announces intent to ask for a new assessment from the independent media ownership council November Schibsted reaches agreement with The Norwegian Media Authority following their acqusition in Stavanger Aftenblad – Schibsted is required to reduce their holding in HTG to 40 % and Adresseavisen to 30 % 2008 February The Independent Media Ownership Council decides to allow the establishment of Media Norge 14 Equity markets are difficult 15 …and the trends in some ad markets are challenging Ad revenues in Aftenposten, 12 months rolling average, NOK million 600 500 400 Recruitment Real estate 300 200 100 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 16 The IPO has been postponed • The project board of Media Norge has decided that the IPO of the new company will not be carried out this autumn • The timing will be evaluated further • The process of preparing the IPO of Media Norge has proceeded as planned • The reason for the postponing is the development in the markets through the last period 17.