Alma Media Corporation Interim Report 29 April 2016 at 9:00 a.m. (EEST)
Alma Media’s Interim Report January–March 2016:
REVENUE AND OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS INCREASED
Financial performance January–March 2016:
- Revenue was MEUR 86.7 (71.9), up 20.6%.
- Operating profit excluding non-recurring items was MEUR 5.5 (1.9) or 6.4% (2.7%) of revenue, up 189.8%.
- Operating profit was MEUR 2.5 (2.7), or 2.9% (3.7%) of revenue, down 6.4%.
- Earnings per share were EUR 0.01 (0.02).
- At the end of the period, the equity ratio was 55.9% and the gearing ratio 40.3%.
- Alma Markets: The strong development of the national economies of Eastern Central Europe continued, supporting the growth and profitability of the recruitment business.
- Alma Talent: The integration of Talentum’s business operations progressed to the implementation phase as planned.
- Alma News & Life: Programmatic buying and mobile advertising saw substantial growth, online sales grew to account for 39% of the business unit’s revenue.
- Alma Regions: Profitability improved following restructuring and the divestment of loss-making businesses.
|Content revenue, print||29.5||24.5||20.2||97.0|
|Content revenue, online||3.4||1.4||133.2||7.1|
|Advertising revenue, print||16.4||16.7||-1.9||66.2|
|Advertising revenue, online||24.3||18.8||29.5||82.0|
|Total expenses excluding non-recurring items||81.4||70.0||16.3||268.7|
|EBITDA excluding non-recurring items||9.9||5.3||86.5||37.4|
|Operating profit excluding non-recurring items||5.5||1.9||189.8||23.4|
|% of revenue||6.4||2.7||8.0|
|Operating profit (loss)||2.5||2.7||-6.4||17.7|
|% of revenue||2.9||3.7||6.1|
|Profit for the period||1.6||1.8||-12.0||12.1|
|Earnings per share, EUR||0.01||0.02||-50.6||0.13|
|Online sales, % of revenue||36.4||33.6||35.7|
Outlook for 2016:
The Finnish economy is expected to show zero growth or only slight growth in 2016. Alma Media’s significant operating countries in Eastern Central Europe, such as the Czech Republic and Slovakia, are expected to see continued economic growth, but at a lower rate than in 2015.
Macroeconomic development affects both consumer demand and advertising volume. The structural transformation of advertising will continue in 2016; online advertising will grow, while print media advertising will decline. Total advertising volume is not expected to increase in Finland in 2016.
The Talentum acquisition completed in late 2015 will increase Alma Media’s revenue and operating profit in 2016. In 2016, Alma Media expects its full-year revenue and operating profit excluding non-recurring items to increase from the 2015 level. The full-year revenue for 2015 was MEUR 291.5, and operating profit excluding non-recurring items was MEUR 23.4.
Kai Telanne, President and CEO:
There were cautiously positive signs in the Finnish economy in the first quarter of 2016. Nevertheless, growth is expected to remain subdued. The macroeconomic outlook in Alma Media’s main markets in Eastern Central Europe remained positive.
Alma Media’s revenue increased by 21 per cent to MEUR 86.7 due to reasons including the Talentum acquisition. Operating profit excluding non-recurring items rose to MEUR 5.5, which was particularly attributable the improved results of the recruitment business and Iltalehti.
The revenue of the Alma Markets segment increased by 21 per cent, while the operating profit excluding non-recurring items grew by 65 per cent. The factors behind the positive profit performance again included the excellent development and profitable growth of the international recruitment business in Eastern Central Europe. The domestic operations of Alma Markets also developed favourably.
In Alma Talent, comparable revenue and operating profit excluding non-recurring items remained at the previous year’s level. The integration of Talentum’s business operations into the new organisation progressed according to plan. Alma Talent is becoming an entity that offers a broad range of media expertise, information services and efficient business and skills development tools. The combined editorial office that is currently in the integration phase will represent the pinnacle of Finnish business journalism.
The ever accelerating technological transformation of advertising is particularly affecting the Alma News & Life segment. Content revenue and the single-copy sales of afternoon papers continued to decline, but the upturn in digital advertising achieved late last year saw the segment’s advertising revenue grow by 28 per cent. Operating profit excluding non-recurring items increased significantly and amounted to MEUR 1.5. Online sales grew to account for almost 40 per cent of the Alma News & Life segment’s revenue in the first quarter.
Revenue decreased in the Alma Regions segment, but operating profit excluding non-recurring items was boosted by operational restructuring measures aimed at reducing the cost structure of publishing operations. At the same time, Alma Regions continued its determined work on the renewal of the online publications and mobile services of its various media.
Alma Media is making systematic progress in its transformation into a European media and service company. The revised segment structure and the new names of the business units better reflect the nature of the company operating in this digital era.
The development of Alma Media’s domestic operating environment was characterised by an expectant mood due to factors such as upcoming decisions on the VAT treatment of digital content. The European Commission has published an Action Plan for making the VAT system more harmonised and flexible, including an initiative to apply a reduced VAT rate to digital content as early as this year. Following the decisions at the EU level, it remains to be seen how committed Finnish policymakers are to the objective outlined in the government programme. An appropriate change in taxation would support the competitiveness of Finnish media companies.
More information, please contact:
Kai Telanne, President and CEO, telephone +358 10 665 3500
Juha Nuutinen, CFO, telephone +358 010 665 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.fi/en/investors/reports-and-presentations/presentations at 11.00 EEST.
To participate in the conference, kindly register beforehand by e-mail, firstname.lastname@example.org.
An international conference call and audio webcast concerning the financial result of January-March 2016 will begin at 13.00 EEST. You can participate in the conference by calling +44(0)20 3427 1919 (confirmation code: 5671426) or follow the direct transmission at http://www.almamedia.fi/en/investors/reports-and-presentations/presentations.
Alma Media’s financial calendar 2016
Alma Media will publish financial reports in 2016 as follows:
– Interim report for January–June 2016 on Friday, 22 July at approximately 9:00 EEST
– Interim report for January–September 2016 on Friday, 28 October at approximately 9:00 EEST
Board of Directors
Distribution: NASDAQ Helsinki, main media, www.almamedia.com
Alma Media in brief
Alma Media is a media company focusing on the service business and journalistic content. The company’s best-known brands are Kauppalehti, Talouselämä, Affärsvärlden, Iltalehti, Aamulehti, Etuovi.com and Monster. Alma Media builds sustainable growth for its customers by utilising the opportunities of digitality, including information services, system and expert services and advertising solutions. Alma Media’s operations have expanded from Finland to the Nordic countries, the Baltics and Central Europe. Alma Media employs approximately 2,500 professionals (excluding delivery personnel), of whom approximately 30% work outside Finland. Alma Media’s revenue in 2015 was EUR 291.5 million. Alma Media’s share is listed on NASDAQ Helsinki. Read more at www.almamedia.com.