Telenor Media

In Norway, Telenor Media is responsible not least for the development, production and distribution of the Norwegian Phone Book, the Norwegian Yellow Pages, the local directories Ditt Distrikt and the Business Pages. With the exception of the Norwegian White Pages (private subscriptions), all these directories can also be found on the Internet. Telenor Media operates the Internet portal Yellow Pages Internet.

Yellow Pages Internet has become one of the most popular web sites in Norway; with just over 1.5 million hits a month. In 1999, Telenor Media's focus on electronic products resulted in a favourable growth in turnover, and advertising on Yellow Pages Internet accounts for approximately a fourth of Norway's total advertising sales on the Internet, which in 1999 amounted to approximately NOK 170 million. Yellow Pages Internet is also a natural point of entry for the GULeHANDEL service, where advertisers can purchase space to present their products, and where users can shop from various advertisers, place everything in one virtual shopping trolley, get everything delivered in one consignment by courier or via the post office and pay with a single invoice. GULeHANDEL was launched in November 1999.

Telenor Media's international operations have given the company a strong foothold in the European directory market. Telenor Media has subsidiaries in nine European countries; Sweden, Poland, Spain, the Baltic states, Russia, the Czech Republic and France. In 1999, Telenor Media's shares in the Swedish companies Lokaldelen and Telenor Företagsinfo were sold. The sale and the price achieved confirmed the value creation of Telenor Media's international operations.

General analysis of results

The Telenor Media group's operating profit was NOK 1,006 million in 1999, an increase of NOK 761 million compared with 1998. The gain on the disposal of operations was NOK 683 million. The improvement is due to considerably higher profitability in Norway.

Turnover

The directory operation in Norway had in 1999 a turnover of NOK 1,334 million, an increase of NOK 181 million (16%). The increase relates to increased advertisement sales in printed directories and electronic media.

Turnover from operations outside Norway was NOK 1,034 million including gains on sales. Adjusted for acquisitions/disposals of business, operations outside Norway showed a reduction in turnover of NOK 22 million. Reorganisation in the Spanish directory operation is the cause of the temporary reduction in turnover.

Operating costs

charges was NOK 4 million. The increase is primarily a result of having to reprint volume 4 of the Norwegian telephone directory due to errors in the directory (NOK 7 million) and the increased price of paper and printing costs for the Norwegian directory operator. Reduced activity in Spain led to lower production costs.

Salary and personnel costs were NOK 473 million in 1999, which represents an increase of NOK 36 million. When adjusted for acquisition/disposals of operations, salary and personnel costs were NOK 365 million, an increase of NOK 22 million (6%). The increase is a result of a general increase in salary levels, increased resource usage in sales resulting from higher activity levels and increased product development in the Norwegian directory operation, although productivity improvements also generated significant cost reductions in the same period for the Norwegian directory operation.

The number of employees increased by 42 to 1,536 in 1999. Adjusted for acquisitions/disposals of business, the total number of employees increased by 170 compared to 1998. The increase is a result of higher activity in the Norwegian operation, as well as a greater number of part-time employees than in 1998.

Other operating costs increased by NOK 21 million in 1999 to NOK 494 million. Adjusted for acquisitions/ disposals of business, the increase was NOK 32 million. The increase is a result of greater market activity, increased use of consultants, higher technical costs and an increased group internal charge for IT costs to the Norwegian operation.

Depreciation and write-downs were NOK 79 million in 1999, which is a reduction of NOK 13 million compared to 1998. Adjusted for acquisitions/disposals of business, depreciation and write-downs were NOK 17 million lower than in 1998. The primary cause of this reduction is that the depreciation of the rebuilding costs of the company's head office in Oslo ended in 1998.

Associated companies

Investments

Total investments on plant and equipment was NOK 57 million in 1999. This consisted primarily of the completion of the DSMP support system for the directory operation in Norway and investment in the home PC scheme. Investment to increase the shareholding in the Baltic directory company Interinfo to 100% was NOK 14 million.

Key Figures

Amounts in NOK million	1999		1998
External turnover	1,594		1,494
Intercompany turnover	91		89
Gain on sale of fixed assets and operations	683		1
Total turnover	2,368		1,584
External cost of materials and traffic charges	319		337
Internal cost of materials and traffic charges	-		-
Total cost of materials and traffic charges	319		337
Own work capitalized	-3		-
Salary and personnel costs	473		437
Other operating expences external	371		356
Other operating expences internal	123		117
Depreciations and write downs	79		92
Loss on sale of fixed assets and operations -
Total operating expences	1,043		1,002
Operating profit	1,006		245
Associated companies	-3		-15
Net financial items	42		2
Profit before tax	1,045		232
EBITDA (Inclusive gain and losses)	1,085		337
EBITDA - margin	46%		21%
Investments	71		31
No. of man-years at 31.12	1,407		1,460
- of which abroad	531		605
The 1998 figures have been restated to reflect the new accounting principles and the new business area.