Year of the Tiger

(From the 2009 Annual Report)

In the first week of 2010 I was in Singapore attending NHST’s annual Asia seminar. It is now 15 years since NHST Asia was set up. From one man and an annual turnover of USD 0.4 million business in the first year of operation, NHST has gone on to have 60 employees in Asia, 39 of them in Singapore alone. Turnover has grown to USD 12 million. NHST Asia’s activities were one of the few areas in the group that was able to demonstrate growth in 2009, and strong growth is expected in 2010. The volume of advertising from China in particular is increasing rapidly.

The highpoint of the Asia seminar was a perceptive and quite light-hearted speech on Chinese astrology and the fact that Chinese New Year in February marks the beginning of the “Year of the Tiger”. And as the saying goes the Year of the Tiger is supposed to be very good for business. - I have to admit that the speech made me quite excited. Not that I have become a sworn believer in Chinese astrology, but more because of the opportunities and good market positions that NHST now has. At the same time - I am still well aware of just how painful 2009 was, in most ways; large deficits, lots of disappointments, difficult conversations, questioning looks and lingering doubts.

In the period 2003-2008 NHST achieved a near doubling of turnover, a distinct improvement in profitability, uniquely strong growth for our Norwegian business daily Dagens Næringsliv, the launch of several new products for both the global market and the more digitally oriented sector, and the recruitment of able new additions to our staff. Then the financial crisis arrived. Advertising revenues fell dramatically, with job advertisements in particular down by 60–70 %. NHST had to slam the brakes in September and October 2008, followed by downsizing of existing activities and abandoning a number of new -initiatives. At the same time we also decided to keep going with our new venture Recharge.

Restructuring and downsizing took a lot of time and resources in the first quarter of 2009. We perceived the process as difficult, but controlled. Most of the second quarter also went according to plan. But then June arrived with sharp new drops in advertising revenues, especially for global and digital activities. Market reports from all over the world told the same story. Therefore, we implemented a second round of downsizing, initially in some of our digital activities such as DN.no and then at Intrafish in particular. At the same time excellent work was done involving close cooperation between the subscription and advertising departments and the group’s finance department, leading to satisfactory cash flow from operations, with trade receivables in particular being reduced. In the fourth quarter it also became clearer that the global economy had improved and the stock markets were showing growth again. It soon became apparent that the advertising markets were beginning to turn around as advertising customers’ situation normalised and they were able to extend their planning horizon. Order volume in early 2010 was much better than at the beginning of 2009 and more like a “normal year”. The trend circulation is still difficult, but we have seen new growth from September/October 2009 onwards for the group’s largest activity, Dagens Næringsliv.

I also noticed that the organisation was increasingly starting to go on the offensive again. New roles and routines had been introduced, activity levels were -rising and the organisation noticed the improvement too.

Where is NHST currently heading? The core of our strategy is set. NHST aims to lead the way in business news in Norway on paper and in digital formats. NHST also aims to be the world leader for shipping, oil/gas, seafood and renewable energy news. Related to this, the trend towards a number of more independent digital activities, such as Newsdesk, Smartcom and initiatives at Nautisk Forlag, will continue. The emphasis on retaining and developing good editorial staff and working environments will also remain unchanged.

The commercial departments also have to be leaders in their markets, and these activities need to be supported by excellent technical infrastructure and quality IT, finance and HR departments at the group level.

NHST’s publications are easy to recognise: they are characterised by exclusive content; they are primarily business -oriented, but they also provide in-depth coverage of other prioritised areas of interest to our readers. At the same time we realise that visual tools and interaction with readers is becoming increasingly important. Our customers – both readers and advertisers – must be able to rely on our long-term commitment and accountability.

Meanwhile, our publications will continue to develop in line with changes in the media landscape. Dagens Næringsliv will be further strengthened as a newspaper that reflects the broader interests of its readers. The interplay between news-papers and net activities will be developed, there will be more interaction with readers and contributors, and more and better services will be added to our digital offerings. As our readers travel a great deal, NHST is also monitoring developments in mobile platforms closely. -Business models for digital -content are largely decided by the competitive situation on the market. Digital content is increasingly password protected with -a view to developing a business model in which the group’s main source of revenue is paid content – regardless of whether it is on paper or distributed digitally. In line with this policy, FBFI.no was made a paid service in 2009 and all our global publications reserve most of their online content for subscribers.

We also publish content that is open for all readers and financed by advertising, and DN.no has achieved the highest turnover for a business news website in Norway using this model. NHST supports global initiatives to protect copyright of editorial content in digital formats.

A clear improvement in financial results is expected throughout the group in 2010 – primarily because of higher revenue, but very much as a result of lower costs in 2010 as well. The markets are expected to improve. The market positions of all our publications have been strengthened during the crisis and our cost-effectiveness has improved. The full effect of the cost programme implemented in 2009 will take effect in 2010.

And where is NHST heading the rest of the decade? The emphasis in the next two years will be on quality and improving profitability in the short term. Growth in turnover is expected first and foremost as a result of better economic conditions. An ever more cost-effective and dynamic organisation will be important. It is also expected that more and more readers will find the content of our publications relevant to their work and lifestyle, both in Norway and globally. We therefore anticipate an overall increase in circulation. This will also open the way for further expansion, most likely in Asia in particular, where news from TradeWinds and Upstream, for example, is already translated into Mandarin. Digital developments will open the way for greater interaction with the hundreds of thousands of -readers of the group’s titles, and this area offers great potential for the development of new revenue streams over time.

There will be all sorts of opportunities, but first we require solid progress in 2010 – the Year of the Tiger.