Alma Media Corporation Interim Report 29 April 2014 at 9:00am (EEST)
Alma Media's interim report January-March 2014:
THE DECLINE IN PRINT MEDIA REVENUE REDUCED OPERATING PROFIT, MEASURES TO ADJUST COST STRUCTURE ARE IN PROGRESS
Financial performance January-March 2014:
- Revenue MEUR 72.7 (74.9), down 2.9%.
- Online sales increased by 11.0% to MEUR 23.8 (21.4).
- EBITDA (Earnings before interest, taxes, depreciation and amortisation) excluding non-recurring items MEUR 6.1 (8.0), down 24.3%.
- EBITDA MEUR 6.8 (8.0), down 14.7%.
- Operating profit excluding non-recurring items MEUR 2.5 (5.5) or 3.4% (7.3%) of revenue, down 54.8%.
- Operating profit MEUR 3.2 (5.4) or 4.4% (7.2%) of revenue, down 40.7%.
- Profit for the period MEUR 2.2 (4.1), down 47.3%.
- The result for the review period includes a non-recurring item, proceeds of MEUR 0.7 from the sale of the BNS business.
- Earnings per share EUR 0.02 (0.05).
|Contents revenue, print||26.1||28.2||-2.1||-7.5||111.2|
|Contents revenue, online||1.3||0.8||0.4||50.2||3.8|
|Advertising revenue, print||16.9||19.1||-2.1||-11.1||80.0|
|Advertising revenue, online||18.1||17.1||1.1||6.2||66.5|
|Total expenses excluding non-recurring items||70.4||69.6||0.8||1.1||276.7|
|EBITDA excluding non-recurring items||6.1||8.0||-1.9||-24.3||37.5|
|Operating profit excluding non-recurring items||2.5||5.5||-3.0||-54.8||24.2|
|% of revenue||3.4||7.3||8.0|
|% of revenue||4.4||7.2||9.0|
|Profit for the period||2.2||4.1||-1.9||-47.3||16.0|
|Earnings per share, EUR (basic)||0.02||0.05||-0.03||-54.1||0.20|
|Earnings per share, EUR (diluted)||0.02||0.05||-0.03||-54.1||0.20|
|Online sales, % of net sales||32.7||28.6||4.1||28.1|
Outlook for 2014:
The revenue and operating profit of Alma Media's print newspaper business, especially regional media, did not develop as expected during the first quarter of the year. Therefore, the company lowered its estimate on 15 April 2014 of the development of both revenue and operating profit during the first half of the year, as announced in the Financial Statements Release on 13 February 2014.
The economic operating environment in Finland has remained weaker than expected in the beginning of 2014. The advertising market for print media has declined more than anticipated. In the current economic situation, forecasting the operating environment and especially advertising sales is exceptionally difficult.
In its Financial Statements Release on 13 February 2014, Alma Media expected the revenue of the first half of 2014 to be on a par with, or slightly lower than the corresponding period in 2013. Operating profit excluding non-recurring items was estimated to be MEUR 9.0-10.5.
According to the company's new estimate, the revenue for the first half of the year will be lower than the corresponding period in 2013 and operating profit excluding non-recurring items will be below the level estimated in the Financial Statements Release on 13 February 2014.
Revenue for the first half of 2013 was MEUR 151.2 and operating profit excluding non-recurring items MEUR 10.1.
Kai Telanne, President& CEO:
The advertising and content revenue from Alma Media's online and mobile channels and the sales of different types of digital services, such as recruitment services, developed favourably in the first quarter of 2014. We introduced several mobile applications for news and lifestyle content. The volume of video publishing and viewing in IL-TV grew by 30% and also advertising in this new channel increased. The video service sales of Alma360 for its clients' own channels developed well.
Alma Career, a holding company managing Alma Media's recruitment business operations in all the different countries, started its operation in the beginning of the year 2014. The company, owned jointly with Monster Worldwide, Inc., integrates recruitment services in all of Alma Media's nine operating countries more closely and enables international sales growth through Monster's global network.
Good sales figures for digital advertising and digital content were not enough to offset the weak development of print media in the first quarter. The plummeting of newspaper advertising has its roots primarily in the recession of Finnish national economy. Retail and specialist trade's sales and marketing investments, which are especially important for newspaper advertising, have decreased strongly due to the weak consumer demand, stemming from the declining consumer purchasing power. Also the digitalisation of communication has an impact on advertising as businesses are increasingly shifting their investments to e-commerce and digital marketing communications channels.
Owing to the market conditions, the revenue and profit of Alma Media's print newspaper business, in particular the regional media, did not develop as expected in the first quarter. The company had to lower its revenue and operating profit estimates for the first half-year from the Financial Statements release of 13 February 2014.
Due to the performance being weaker than expected, Alma Media will launch streamlining measures in Alma Regional Media, with the objective of achieving annual savings of MEUR 1.5. In addition, the Group's financial administration will be reorganised to increase operational efficiencies.
To ensure the profitability of regional publishing operations and the quality of its content, Alma Media and five other Finnish newspaper publishers signed a letter of intent in the beginning of 2014 aiming at significantly wider journalistic cooperation between the newspapers and the establishment of a joint company, Lännen Media, during the year 2014.
The declining print media has further accelerated Alma Media's business development efforts and investments in future digital business. The share of digital products and services of Group total revenue in the first quarter was 32.7% (28.6%). Online sales increased by 11.0% during the first quarter.
For more information, please contact:
Kai Telanne, President and CEO, telephone +358 10 665 3500
Juha Nuutinen, CFO, telephone +358 10 665 3873
Alma Media Corporation follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority. This stock exchange release is a summary of Alma Media Corporation's Interim Report January - March 2014. The complete report is attached to this release in pdf format. The Interim Report is also available on Alma Media's website at www.almamedia.com/investors/.
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-March 2014 will begin at 13.00 EEST. You can participate in the conference by calling +44(0)20 3427 1906 (confirmation code: 8523318) or follow the direct transmission at www.almamedia.com/press_room/downloads/presentations/.
Vice President, Corporate Communications and IR
Alma Media Corporation
DISTRIBUTION: NASDAQ OMX Helsinki, main media
Alma Media in brief
Alma Media is a media company focusing on digital services and publishing. In addition to news services, the company's products provide useful information related to lifestyle, career and business development. The services of Alma Media have expanded from Finland to the Nordic countries, the Baltics and Central Europe. The company employs 1,965 professionals (excluding distributors), of whom approximately one third work outside Finland. Alma Media's revenue in 2013 totalled approximately MEUR 300. Alma Media's share is listed on NASDAQ OMX Helsinki. Read more at www.almamedia.com.