Media Houses Scandinavia. Didrik Munch, CEO Schibsted Norge

Transcription

1 Media Houses Scandinavia Didrik Munch, CEO Schibsted Norge

2 What we do PROFITABILITY IN PRINT TRANSFORMATION TO DIGITAL 2

3 SWEDEN NORWAY Market leaders in Scandinavia Local presence in the most affluent cities Number one positions in browser, mobile, print No. 1 single copy paper No. 1 site by traffic No. 1 in web TV No. 1 mobile site 1 Bergen Oslo Stavanger Kristansand No. 1 subscription paper 4 strong positions in 4 major cities 1 Stockholm No. 1 single copy paper No. 1 site by traffic No. 1 in web TV No. 1 mobile site 1 Stockholm s quality subscription paper Top high-end online destination 2 3

4 Not in Anglo-American decline Scandinavian economies are well connected but maintain continuously high print newspaper readership and advertising revenues Mobile subs pr capita US 1.0 (1) Scandinavia 1.5 UK 1.3 Circulation (volume) 1,00 Peak level -10% 0,90 Current level Advertising (revenue) 1,00 Peak level -11% 0,89 Current level PAPERS (3) SCHIBSTED SUBSCRIPTION Broadband penetration (2) Circulation (volume) Advertising (revenue) Scandinavia 89% UK US 56% 53% 1,00 Peak level -28% 0,72 Current level 1,00 Peak level -53% 0,47 Current level US AVERAGE (4) Sources: (1) Morgan Stanley (2010), Wired (2011); (2) ITU (2011); (3) Schibsted historical and current figures; (4) Huber Research Partners (2012) 4

5 Cooperation and tightening creates leaner media houses Loose coordination, redundant functions Tight cooperation and centralized support units Focused media houses with light backbones MEDIA HOUSES IN 2008, PRIOR TO MERGERS MEDIA HOUSES NOW, AFTER TRIMMING ROOM TO IMPROVE GOING FORWARD 5

6 Operationally focused emphasizing improvement DONE Centralized IT infrastructure and applications Centralized finance, payroll, accounting Co-located in Stockholm Common call centre and digital development Shared content among regional media houses Common management groups Printing plants spun off in separate profit centre DOING Pooling resources in online development Sales cooperation in Norway Common system platforms Cost-programme in Norway and Sweden Common circulation backoffice functions Common digital back-office Profitability program in printing plants WILL DO Offshore digital development in Poland Increased outsourcing Centralization of support functions Bigger units to water down overhead Improved sales cooperation between subscription and single copy sales newspapers Reduce exposure to legacy infrastructure Shedding non-core activities Co-locating in Oslo 6

7 A smart approach to content sharing Local for local All for one Most content purely local Written for and by residents Aftenposten s exclusive coverage of Wikileaks US Embassy Cables BT road deaths special feature BT workout site Stavanger Food vertical 22 July terror attack Earthquake in Japan Financial turmoil One for all All for all 7

8 Committed to profitability - and to offset inflation and wage growth EBITDA for online and print news, subscription papers in Norway 50 0 ONLINE NEWS PRINT NEWS PRINTING PLANTS MAINTAIN MAINTAIN >> >> >> 0 Print News 2009 including printing plants spun off in 2010 New price structure shifted NOK 70 million from printing to newspapers in Print News includes corporate overhead in Norway 8

9 Improvements keep cash flow, transformation assures future Profitability in print Growth in digital Cost adaptation Price hikes Mobile growth Online commercialization Emerging user payment 9

10 We have levers to pull to respond to structural challenges Taken out 420 FTEs and NOK 500m from Norwegian subscription papers since merger in 2008 COST AND PERSONNEL DISCIPLINE MATERIALIZES IN REDUCED FTE LEVELS Ongoing cost program in Norway despite advertising growth and margin expansion: We stay ahead FTE REDUCTIONS IN NORWAY IN CURRENT PROGRAM ~ ~ ~ YE Program in Norway Program end Example: Media Norge FTEs Example: Media Norge FTEs

11 Pricing is an upside partly offset circulation decline for years MON-THURSDAY FRI-SUNDAY COMPETITION 16.3 kr 20 kr +25% SCHIBSTED 13 kr +54% 20 kr Example: Single copy papers, Norway. Average prices weekdays and weekends 11

12 OFFSHORE HOME Offshore development teams critical mass and cost efficiency Cost effiency in offshore units Facing recruitment constraints on top talent Home development team 1 : 1 developer cost Typical effect of offshoring Cost reduction scenario 1 : 0,5 developer cost Potency scenario 2 : 1 developer cost Currently setting up development unit in Krakow, Poland to leverage top university environment and emerging tech cluster 12

13 Million NOK Thousands We are able to transfer print and browser positions to mobile Strong mobile user growth VG ahead of the pack Revenues following suit last twelve months Weekly page views Monthly revenues 18, , , , jan.10 jan.11 jan.12 VG mobile, PIs vs competitors VG mobile, revenues per month 13

14 Real effect to advertisers is key to monetizing mobile Tirsdag morgen Monday morning Tuesday morning 14

15 Emerging user payment Aftonbladet Plus subs. 15

16 We will defend our positions and safeguard profitability, whilst growing on new platforms Brands and products that grow in mobile and user payment Willingness and ability to sustain profitability 1 Strong positions for the long run 16

17 Key takeaway: We re committed DISCIPLINE ON THE COST SIDE COMMITTED TO SUSTAIN CASH FLOWS TRANSFERRING TO MOBILE Maintain cost at current real levels by keeping cost discipline Ensure a stable cash flow from traditional channels across the business cycle, Transferring our current offline positions to mobile media 17

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