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Enskilda Securities Nordic Seminar 2005 20. januar 2005 Kjell Aamot CEO

Enskilda Securities Nordic Seminar 2005 20. januar 2005 Kjell Aamot CEO. Stein Yndestad IR. Q3 Highlights. Schibsted’s best Q3 ever Strong development for online activities continues Record-high results in Aftonbladet Good development in 20 Minutes continues

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Enskilda Securities Nordic Seminar 2005 20. januar 2005 Kjell Aamot CEO

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  1. Enskilda Securities Nordic Seminar 200520. januar 2005 Kjell AamotCEO Stein Yndestad IR

  2. Q3 Highlights • Schibsted’s best Q3 ever • Strong development for online activities continues • Record-high results in Aftonbladet • Good development in 20 Minutes continues • Growth in the recruitment market – Aftenposten proceeds to deliver improved results • Solid results for VG even with a somewhat weaker circulation • Weak quarter for TV-production, while Sandrew Metronome and Publishing have improved Q3 results from last year 2

  3. History 1999 2003 1836 1989 1992 New growth? Established Consolidation Restructuring Focus & consolidation Growth & expansion Listed on Oslo Stock Exchange 3

  4. Strategy • Previous announced strategy to be continued – financials and market position enables increased focus on growth • Growth through both acquisitions and organic growth • The Group’s strong position and competitive advantages as a basis • Acquisitions complementing and strengthening already existing positions • New media and free newspaper engagements • Financial targets unchanged 4

  5. Financial targets – over a business cycle 5

  6. Stand by strategic position as of 1995 Strong Brands Content Know-how Marketing Capacity Strong Cash Flow Execution Skills Online Platforms Off-line Positions New Business Opportunities Newspapers TV-production Publishing Film Rights Internet (www) Mobile Internet Broadband Build on core activities for continuous development 6

  7. Circulation decline puts pressure on the newspapers and emphasizes the need to create new platforms for growth • Development of number of sold copies per capita (1999-2003) Finland Ireland 2,2% USA Island Portugal Austria Greece Denmark Germany Norway France Belgium Spain Italy Sweden Switzerland Luxemburg Netherlands UK 29,2% Source: World Association of Newspapers, Global insight 7

  8. ”It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” Charles Darwin 8

  9. Product scope Strategic repositioning Elektronic media 2004 Newspapers 1995 Norway Scandinavia Europe Geographic focus area 9

  10. The great conserns in 2001 Online 10

  11. Value trigers at the end of 2004 m.fl. 11

  12. 12

  13. A 20 Minutes edition goes through three phases Distribution audience Revenues Phase 1: Optimize circulation Phase 2 Readership growth Phase 3 Revenue growth Time 13

  14. Circulation development 2000 2001 2002 2003 2004 2005 Lille Lyon Marseille Luzern Malaga Toulouse Bordeaux Valence Alicante Madrid Barcelone Bern Basle Paris Sevilla Zaragoza Zurich 14

  15. The development of 10 – 13 year olds, who read a newspaper more than once per week (Switzerland) German-speaking Switzerland 10 – 13 years 100% 50% Before 20minutes 85% 75% After 20minutes 25% 1997 2001 2002 Source: Special survey – “Kids & News“ 15 20 Minuten und die Kids

  16. And the concept is proving itself by attracting advertisers targeting the young, problematic readers! CocaCola on a front page ad! 16

  17. Online 17

  18. Operating revenues – rolling 12 months Operating profit (EBITA) 100%= 8 223 100%= 9 256 100%= 196 100%= 182 100%= 270 100%= 165 27% 18% 14% Online activities Online activities 6% 2% 2% Q4 2003 Q1 2004 Q2 2004 Q3 2004 2001 2004 Share of online activities increasesNOK million For the year of 2001 the online activities had an operating loss incl. restructuring costs of NOK -171 million Accumulated EBITA as of Q3 2004 of NOK 119 million 18

  19. Financials 2000 – 2004 NOK million 36% 33% 24% -42% -10% * * As of 30 September 2004 19

  20. Successful launch of the new format • The positive development within recruitment ads continues • Operating profit (EBITA) in the newspaper improved by NOK 25 million from Q3 last year (adjusted for royalty) • Revenue development in ad markets in Q3 compared to the corresponding period last year: • Recruitment: + 14.5% • Real estate: - 19.3% • High turnover of properties as well as more objects sold directly from the Internet • Brand/display: - 2% • Supplements: + 50% 20

  21. Pricing in the new Aftenposten • Focus moved from modular to fraction of page • Developed in close cooperation with advertisers • New pricing model will be introduced based on response and effect • The response of a tabloid full page is close to the response of a full page in broadsheet. Therefore priced to 75-85% of full page in broadsheet • Response increases non-proportional with the size of the ad – reflected in prices • Introducing a new measurement method for ad effects Brand/display ads • No short term impact • Positive long term impacts due to new readers • Competitive advantage, especially towards TV Classified ads • Prises mainly unchanged, discount on larger ads, like for brand/display ads. Differenciated pricing of recruitement ads • Same model as the morning edition Evening issue 21

  22. Migration of classified advertising – Real estate Number of ads, 12-month rolling average 22

  23. Migration of classified advertising – Recruitment Number of ads, 12-month rolling average 23

  24. The steady cash cows 24

  25. Only online version Both Only paper version .se Readership on- and offline Daily readership, thousands Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 1999 2000 2001 2002 2003 2004 25

  26. Only online version Both Only paper version Readership on- and offline Daily readership, thousands 1,655 1,571 1,522 1,481 1,403 1,392 1,391 96/97 97/98 98/99 99/00 00/01 01/02 02/03 Source: Gallup – 96/97 represents Forbruker & Media 02/97 26

  27. Alma Media 27

  28. Alma Media Corporation Alma Media Group ALPRESS BROAD- CASTING BIG GROUP ADMINISTRATION MEDIA SERVICES CLASSIFIED SERVICES ILTALEHTI MTV3 KAUPPALEHTI AAMULEHTI ALMA MEDIA INFORMATION SYS. SUBTV BALANCE CONSULTING SATAKUNNAN KANSA NEW VENTURES RADIO NOVA (74%) BALTIC NEWS SERVICE MTV Interactive LEHDENTEKIJÄT LAPIN KANSA ACTA PRINT (36%) STARFUNDS FINLAND (51%) POHJOLAN SANOMAT TV4 (23,4%) KAINUUN SANOMAT TALENTUM (31,7%) SUOMEN PAIKALLISSANOMAT 28

  29. Strategic fit Strategic principles for growth • Within the core operations • Mainly within areas that will reduce the dependency on business cycles • Strategic control possible over time • Synergies with existing operations • Complementary geographic exposure to Schibsted • Advanced in new media – MTV3.fi is the largest media site in Finland • Limited exposure to offline classifieds, but a strong online presence within real estate and cars • Stronger than Schibsted in TV The two companies have similar business, with Alma being stronger in TV, and complementary geographic presence 29

  30. Schibsteds run for Alma Media • During the summer Schibsted conducted negotiations with the larges institutional owners in Finland to buy 34% of the votes. • Not able to agree on the conditions • The negotiations probably reached Bonnier • A second attempt to buy the institutions holdings during the fall/winter did not result in a deal • Schibsted decidet it was no longer fruitfull to wait, a bid for Alma Media was launched on the 21th of December • The offer was 11,40 for series 1 and 10,70 for series 2, a premium of 55% and 35% on the 12-month volume-weighted average trading price 30

  31. Broadcasting is the gemstone of Alma Media • Schibsted key interest is the broadcasting division • The board initiated a process to restructure the Broadcasting division in November. • Some likely buyers were contacted. Schibsted was for some reason not contacted. • Potential buyers signed the NDA almost immediately after Schibsteds offer was announced. • Our Tender Offer puts us in a difficult position. 31

  32. Share price of Alma Media, Series 1 32

  33. What happens now ? • Schibsted may withdraw the offer • The MAC will probably be invoced • Schibsted completes the tender offer: • If acceptance is more than 33,3%, Schibsteed becomes a major owner of Alma • If accemptance is bellow 33,3%, Schibsted may choose to accept the shares offered. • Schibsted is comfortable with the holdings in TV4. Could be of strategic value depending on the outcome of the Broadcasting sale in Alma Media. • Schibsted may choose to place a bid for Almas TV4 shares separately 33

  34. Outlook • Positive expectations to Aftenposten in relation to the change to tabloid format • The tabloids are expected to continue to deliver strong results • Further challenges for Svenska Dagbladet • A good Q4 in 20 Minutes expected, increased competition • Positive development for the online activities – expected to represent approx. 20% of the Group’s operating profit (EBITA) • Improved outlook for TV/Film • Parliament’s report regarding new media legislation represents small improvements for Schibsted 34

  35. Appendices 35

  36. Ownership structure in Nordic TV Norway Sweden Denmark Finland TV 2 TV 4 TV 2 MTV 3 Other Egmont Schibsted Proventus Bonnier Alma Media Schibsted A-Pressen The Government Alma Media TV Norge Kanal5 TVDanmark 1&2 Nelonen 4 Other Sanoma SBS SBS SBS SBS TV 3 TV 3 TV 3 MTG MTG MTG MTG 36

  37. Operating profit (loss) (EBITA) Newspapers 37

  38. Number of unique users improved by 53% in September • Record of more than 100,000 active ads simultaneously and 1,365,000 unique users in September • Operating profit (EBITA) in Q3 of NOK 17 million (NOK 15 million) • Turnover improved by 29% to NOK 44 million in Q3: • Recruitment: + 33% • Real estate: + 18% • Cars: + 50% • Continued strong growth and increased traffic within all segments 38

  39. Solid results and the success on the net continues • Schibsted’s most profitable company (nominal terms) • Operating revenues and EBITA-margin in Q3 at same levels as last year • Circulation on weekdays reduced by 3.7% as of September compared to same time last year • Maintains its strong market share • Operating margin (EBITA) of 25% (2%) for the online newspaper in Q3 39

  40. Low ad revenues continues to weaken the result • Ad revenues in Q3 reduced from the corresponding period last year to SEK 65 million (SEK 85 million) • Positive development in circulation revenues - amounts to SEK 96 million (SEK 92 million) • The tough competition in Stockholm continues • No negative effects so far for SvD from the change of Dagens Nyheter to tabloid format • SvD.se with a postitive development – record high number of uniqe visitors in September of 643,000 • ”New SvD”– a further upgrade of the editorial product will be launched on November 8th 40

  41. Record-high results in Aftonbladet • Operating revenues increased by 15% compared to Q3 2003 • Operating margin (EBITA) of 16% (12%) in Q3 • Circulation on weekdays increased by 3,300 copies from last year • The gap towards Expressen was94,400 by the end of September • Continues to take market shares in the advertising market • Ad revenues increased by 83% to SEK 153 million in Q3 incl. online activities 41

  42. Aftonbladet strengthenes its online position • Online activities comprises now of Aftonbladet Nya Medier, Blocket.se and BytBil (as of July 1st 2004) • Represents 33% (15%) of Aftonbladet’s total ad revenues in Q3 • Increased gap compared to the amount of visitors of the main competitors • Development of new products continues, e.g. paid services like “the Weight Club” and “Plus” 42

  43. Operating profit (EBITA) TV/Film & Publishing *) Figures for 100% of Sandrew Metronome Group. Schibsted owns 50% of the company **) Schibsted owns 33.3% of the company 43

  44. Operating revenues in line with last year, but weaker results • Disappointing results from the major focus on interactive TV in Norway, Sweden and Estonia – the expected positive development in Q3 did not occur • Turn around in the Norwegian production company Rubicon after decreasing order quantity and negative development. New management in place in Q3, but 2004 is not expected to be a good year • The Swedish TV production operations of Metronome maintains a solid market position, but margins squeezed due to severe competition 44

  45. Substantial improvement in results compared to last year • Improved results in both the cinema and distribution operations compared to last year • Positive development within domestic films, especially in Norway and Sweden • Competition authorities finishes review of the sale of cinemas in Sweden in December/January • Blockbusters ”Harry Potter III” and ”Troia” on DVD/video in Q4 • New distribution agreement with Warner as of June 2005 – reorganization of the video/DVD distribution of Sandrew Metronome • Distribution of Warner’s and SM’s films operated by Warner • Warner responsible for sales and logistics • No influence on SM’s distribution of Warner’s cinema films in the Nordic countries 45

  46. Improved operating profit and generally stable operations • Coordination of operations and resources in the merged Norwegian publishing houses proceeds according to plan • Profit improvement in Q3 despite logistical problems throughout main parts of the year due to sale of international books • Improved sale of Norwegian books in an overall decreasing market for books so far this year • Stable circulation figures of the magazines Dine Penger, Maison and 4U – and Pondus close to a monthly sale of 70,000 copies • Q4 is the most important quarter in terms of book sales – expectations associated with the new books Pondus and Petter Solberg 46

  47. TV Group • Olympics and Kanal 24 with negative influence on Q3 results • Increased costs due to broadcasting of summer olympics • Operating profit for the TV channel in Q3 of NOK 6 million (NOK 22 million) • The subsidiaries TV 2 Nettavisen og TV 2 Interaktiv delivers improved operating profits of NOK 0 million (NOK -4 million) and NOK 1 million (NOK -3 million) in Q3 • Sale of share in TVNorge gives a profit of NOK 82.7 million • Further write down of TV 2’s investment in Kanal 24 is by NOK 60 million in Q3 – total exposure for TV 2 is presently close to NOK 55 million 47

  48. Income statement Schibsted Group 48

  49. Advertising – Paper Editions 1) Column meters 2) SEK million 49

  50. Development in real estate and recruitment markets (rolling 12 months) 50

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