The most significant risks and uncertainties
Alma Media defines as risks events or circumstances that could prevent reaching a strategic, operative or economic objective. The risks are classified as strategic, operative and financing risks.
The most critical strategic risks for Alma Media are a significant drop in its print newspaper readership, a permanent decline in advertising sales and a significant increase in distribution and delivery costs. The group subscriptions of the major financial and technology-related magazines are significant in scale. Changes to the subscription agreements could have a substantial impact on the magazines’ total subscription volumes. The media industry is undergoing changes following the transformation in media consumption and technological development. Alma Media’s strategic objective is to meet this challenge through renewal and the development of new business in digital consumer and business services.
Fluctuating economic cycles are reflected in the development of advertising sales. Advertising sales account for approximately half of the Group’s revenue. Business operations outside Finland, such as in Eastern and Central European countries, include country-specific risks relating to market development and economic growth. The expansion of business outside Finland has reduced the risks inherent in operating in one market area.
Disturbances of information technology and communications as well as disruption of printing are the most important operative risks. The risks of information technology and communications are reviewed and managed in cooperation with the group’s ICT organisation and the business units as well as cooperation partners. Especially the technical operation and vulnerability of the digital business is closely monitored in the entire media industry.
In printing, it is important to prevent disruptions of operations in advance by means of good management and safety culture as well as with the help of guidelines. Back-up printing plans are made in preparation for interruptions.
The Chief Financial Officer of the Group is responsible for the Group’s financing. Alma Media’s centralised financing function takes care of the operative financing of all companies in the Group. The function includes the management of payments and liquidity, funding and investments.
Capital market arrangements are used for long-term financing. The cash surplus is invested according to the Group’s financing policy in financially sound investment instruments with a maturity of less than one year.
Alma Media has no significant financing risks. The financing risks are described in more detail in the Financial Statements.