Alma Media Corporation Interim Report 21 July 2015 at 9:00 a.m. (EEST)
Alma Media’s Interim Report January–June 2015:
OPERATING PROFIT INCREASED IN THE SECOND QUARTER
Financial performance April–June 2015:
Revenue was MEUR 73.0 (75.7), down 3.5%. The effect of divested business operations on the decrease in revenue was MEUR 3.3.
Online sales increased by 8.0% to MEUR 25.7 (23.8).
EBITDA (Earnings before interest, taxes, depreciation and amortisation) excluding non-recurring items MEUR 10.2 (9.7), up 5.2%.
EBITDA was MEUR 11.5 (9.5), up 20.8%.
Operating profit excluding non-recurring items was MEUR 6.8 (6.3) or 9.3% (8.3%) of revenue, up 8.0%.
Operating profit MEUR 8.1 (6.1), or 11.1% (8.1%) of revenue, up 32.4%.
Profit for the period was MEUR 6.3 (4.8), up 32.8%.
The operating profit for April–June includes non-recurring items of MEUR 1.3 (-0.2).
Earnings per share EUR 0.07 (0.06).
Financial performance January–June 2015:
Revenue was MEUR 144.9 (148.4), down 2.3%. The effect of divested business operations on the decreasein revenue was MEUR 6.2.
Online sales increased by 4.2% to MEUR 49.5 (47.5).
EBITDA (Earnings before interest, taxes, depreciation and amortisation) excluding non-recurring items MEUR 15.6 (15.8), down 1.5%.
EBITDA was MEUR 17.6 (16.4), up 7.7%.
Operating profit excluding non-recurring items was MEUR 8.7 (8.8), or 6.0% (5.9%) of revenue, down 0.6%.
Operating profit MEUR 10.8 (9.3), or 7.4% (6.3%) of revenue, up 15.5%.
Profit for the period was MEUR 8.2 (6.9), up 18.0%.
The operating profit for January–June includes non-recurring items of MEUR 2.1 (0.6).
Earnings per share EUR 0.09 (0.08).
|Content revenue, print||22.5||25.7||-3.2||-12.5||47.0||51.8||-4.8||-9.2||104.6|
|Content revenue, online||1.7||1.4||0.4||26.1||3.2||2.6||0.5||20.6||5.6|
|Advertising revenue, print||17.8||20.6||-2.8||-13.7||34.5||37.6||-3.0||-8.1||73.7|
|Advertising revenue, online||20.2||18.5||1.7||9.4||38.7||36.5||2.1||5.8||72.7|
|Total expenses excluding non-recurring items||66.4||69.5||-3.2||-4.6||136.4||139.9||-3.5||-2.5||274.6|
|EBITDA excluding non-recurring items||10.2||9.7||0.5||5.2||15.6||15.8||-0.2||-1.5||35.1|
|Operating profit excluding non-recurring items||6.8||6.3||0.5||8.0||8.7||8.8||-0.1||-0.6||21.4|
|% of revenue||9.3||8.3||6.0||5.9||7.2|
|Operating profit (loss)||8.1||6.1||2.0||32.4||10.8||9.3||1.4||15.5||20.7|
|% of revenue||11.1||8.1||7.4||6.3||7.0|
|Profit for the period||6.3||4.8||1.6||32.8||8.2||6.9||1.2||18.0||15.7|
|Earnings per share, EUR (basic)||0.07||0.06||0.02||32.1||0.09||0.08||0.01||17.0||0.19|
|Earnings per share, EUR (diluted)||0.07||0.06||0.02||32.1||0.09||0.08||0.01||17.0||0.19|
|Online sales, % of revenue||35.2||31.4||34.1||32.0||32.0|
Outlook for 2015:
Low interest rates, a weaker euro and lower oil price improve the chances for growth in the long run. However, in 2015, economic growth is still expected to remain weak in Europe and, in particular, in Finland. The weak economic development has an impact on advertising volume, which is not expected to increase in Finland in 2015.
Alma Media expects its revenue to decrease in 2015 and operating profit excluding non-recurring items to remain unchanged or decrease from the 2014 level. The full-year revenue 2014 was MEUR 295.4, and operating profit excluding non-recurring items was MEUR 21.4.
Kai Telanne, President and CEO:
The Finnish economy continued to be characterised by sustained weak development in the second quarter of 2015. According to TNS Gallup, advertising volume, which is linked to GDP, declined by 3.3%. The circulation volumes and single-copy sales of print media continued to decline.
The significance of Alma Media’s foreign operations to the company’s income formation is increasing rapidly. Profitable growth in foreign markets compensated for the decline in domestic revenue and profitability in the first half of the year. Alma Media has recruitment and career services in 10 countries as well as business premises services in Sweden. Foreign operations accounted for 14% of revenue and 44% of operating profit excluding non-recurring items in the first half of the year.
The Group’s revenue declined by 3.5% in April–June and amounted to MEUR 73. Operating profit excluding non-recurring items improved 8% year-on-year to MEUR 6.8.
Alma Media’s domestic business operations were weighed down by the weak economic situation in Finland and its impact on the decline in advertising volume and content revenue, particularly in print media. At the same time, the Group was successful in implementing measures to reduce its cost structure. Positive developments in the national economies of Eastern Central Europe and the improved employment situation in the region supported the strong growth of Alma Media’s digital recruitment service business. The Group’s international recruitment business grew by 23% in the second quarter. The domestic marketplaces business maintained its level of financial performance.
In the Financial Media and Business Services segment, growth was attributable particularly to the acquisitions of JM Tieto, which builds marketing and sales concepts for B2B companies and has been fully owned by Alma Media since the start of the year. Reorganisation measures in the customer magazine business improved the segment’s profitability. Revenue and operating profit continued to decline in National Consumer Media, which is the segment hit hardest by the weak domestic advertising market. In the Regional Media segment, declining content revenue and advertising volume weighed down revenue, but operational cost adaptation measures and an increase in external revenue from printing operations helped curb the decline in the segment’s profit.
Alma Media will continue to focus on digital development, such as effective advertising solutions and the creation of new mobile solutions. Organisational changes are currently underway concerning advertising sales and sales support. New operating models aimed at digital development and accelerating sales will be implemented during the third quarter.
Alma Media’s financial position has continued to strengthen and the equity ratio was nearly 43% at the end of June. The strengthened balance sheet provides a solid foundation for continued investments in growth and internationalisation.
Alma Media is very concerned about the viability of Finnish media. Finland should have strong local and national media in a time when consumer media consumption spans multiple channels and is becoming increasingly fragmented, and international media conglomerates are having a growing impact on domestic media consumption. The new Finnish government that was formed in May must urgently make decisions on national policies to reduce value added taxes on digital media. An appropriate change in taxation would help Finnish media companies maintain their competitiveness and also improve Alma Media’s capacity to build multi-channel media consumption experiences for its customers.
For more information, please contact:
Kai Telanne, President and CEO, telephone +358 10 665 3500
Juha Nuutinen, CFO, telephone +358 10 665 3873
Conference, webcast and conference call:
A conference for Finnish media, investors and analysts will be held on the same day at 11.00-12.00 EEST in the Alma House (address: Alvar Aallon katu 3 C, Helsinki). In addition to the presentations held by President & CEO Kai Telanne and CFO Juha Nuutinen, participants will have an opportunity to discuss with other members of the company's management. Please note that the conference will be held in Finnish. The presentation material in English will be available on www.almamedia.com/press_room/downloads/presentations/ at 11.00 EEST.
To participate in the conference, kindly register beforehand by e-mail, email@example.com.
An international conference call and audio webcast concerning the financial result of January-June 2015 will begin at 13.00 EEST. You can participate in the conference by calling +44(0)20 3427 1915 (confirmation code: 8892701) or follow the direct transmission at www.almamedia.com/press_room/downloads/presentations/.
ALMA MEDIA CORPORATION
Board of Directors
Distribution: NASDAQ OMX Helsinki, main media, www.almamedia.com