Alma Media’s Interim Report January–March 2017: Strong first quarter, growth in revenue and operating profit

Alma Media Corporation               Interim Report                      28 April 2017 at 9:00 a.m. (EEST) 

Alma Media’s Interim Report January–March 2017: 

STRONG FIRST QUARTER, GROWTH IN REVENUE AND OPERATING PROFIT 

Financial performance January–March 2017: 

• Revenue MEUR 90.5 (86.7), up 4.4%. 
• Adjusted operating profit MEUR 12.6 (5.5), or 13.9% (6.4%) of revenue, up 128.3%. 
• Operating profit MEUR 11.4 (2.5), or 12.6% (2.9%) of revenue, up 358.1%. 
• Earnings per share EUR 0.09 (0.01). 
• Alma Markets: Profitable growth continued in both domestic and international operations.  
• Alma Talent: Operating profit improved due to restructuring measures implemented last year.  
• Alma News & Life: Profitability was weighed down by a decline in the single-copy sales of print media. 
• Alma Regions: Profitability was improved by cost savings, election advertising and the external sales of printing services.  

  

KEY FIGURES	2017	2016	Change	2016
MEUR	Q1	Q1	%	Q1–Q4
Revenue	90.5	86.7	4.4	353.2
Content revenue *)	32.1	32.4	-1.0	128.3
Content revenue, print	28.0	29.1	-3.6	113.5
Content revenue, online	4.1	3.4	21.1	14.8
Advertising revenue	43.8	40.4	8.6	169.7
Advertising revenue, print	15.7	16.4	-4.4	68.5
Advertising revenue, online	27.9	24.0	16.3	101.3
Service revenue *)	14.6	13.9	4.9	55.2
Adjusted total expenses	78.0	81.5	-4.2	318.9
Adjusted EBITDA	16.6	9.9	67.0	53.3
EBITDA	15.4	6.9	122.9	47.9
Adjusted operating profit	12.6	5.5	128.3	35.2
% of revenue	13.9	6.4		10.0
Operating profit/loss	11.4	2.5	358.1	26.8
% of revenue	12.6	2.9		7.6
Profit for the period	8.9	1.6	452.3	19.9
Earnings per share, EUR (undiluted and basic)	0.09	0.01	935.4	0.20
Online sales	37.0	31.3	18.2	133.5
Online sales, % of revenue	40.9	36.1		37.8

*) Comparison data has been adjusted between content revenue and service revenue

Outlook for 2017 

The Finnish economy is expected to grow by 1–2% in 2017. Alma Media’s significant operating countries in Eastern Central Europe, such as the Czech Republic and Slovakia, are expected to see economic growth of 2–4%.  Macroeconomic development affects both consumer demand and advertising volume. The structural transformation of advertising will continue in 2017; online advertising will grow, while print media advertising will decline. 

In 2017, Alma Media expects its full-year revenue to remain at the previous year’s level and its adjusted operating profit to increase from the 2016 level. The full-year revenue for 2016 was MEUR 353.2, and the adjusted operating profit was MEUR 35.2. 

Kai Telanne, President and CEO: 

Alma Media’s revenue and profitability developed well in the first quarter of 2017. Revenue grew, mostly organically, by 4.4 per cent and amounted to MEUR 90.5. The sources of this growth included the positive performance of Alma Markets’ digital business and the online advertising of our media in Finland as well as municipal election advertising and the fact that there were more working days and publication dates than in the comparison period. The significant improvement in profitability was mainly attributable to the efficiency improvement measures implemented in several businesses last year. The Group’s adjusted operating profit for January–March rose by 128 per cent to MEUR 12.6. 

The development of the Finnish economy improved in the first months of the year, but the signs of growth are not yet reflected in advertising investments. According to Kantar TNS, media advertising volume declined by 4.7 per cent in the first quarter. Online advertising, however, rose by 7.4 per cent. Alma Media’s digital advertising sales outgrew the market due to effective advertising solutions and new mobile services.  

In the Alma Markets segment, revenue growth and strong operating profit performance were supported by the favourable operating environment for the recruitment business in Eastern Central Europe as well as the increased activity in the housing and automotive markets in Finland. The segment’s result was also improved by lower depreciation.  

In the Alma Talent segment, revenue was unchanged from the previous year and the result improved thanks to restructuring measures related to the integration of Talentum in the Finnish and Swedish media businesses as well as the cost savings achieved in Information Services. Alma Talent’s broad-based media portfolio has been well received by advertisers: the segment’s advertising sales saw positive development, particularly in online advertising and content marketing. Alma Talent’s first digital solutions in line with the development projects outlined in the new strategy were launched in the first quarter.  

The structural change and digital transformation of the media industry were most clearly evident in the Alma News & Life segment: digital advertising sales grew substantially, particularly in mobile advertising and programmatic buying, but the single-copy sales of print media continued to decline. Investments in the service business increased costs. 

The Alma Regions segment’s revenue was increased by the external sales of printing services as well as higher content revenue. The segment’s advertising revenue declined in spite of election advertising during the review period. Profitability was improved by the lighter cost structure implemented in the previous year. 

The sustained decline in demand in the Kemi-Tornio region and unprofitable operations led to the decision to merge Pohjolan Sanomat with Lapin Kansa. The decision to discontinue the centenarian brand was difficult but unavoidable. Our aim is to build a single strong regional media brand in the Lapland region, both in print and as a vital, developing digital media service. 

Thanks to a strong position in selected markets paired with stable operating cash flow and financial position, the conditions are excellent for building Alma Media’s future. We are continuously looking for new sources of business growth, mainly in the area of digital services in Finland and elsewhere in Europe.  

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.fi/en/investors/reports-and-presentations/presentations at 11.00 EEST.

To participate in the conference, kindly register beforehand by e-mail, kutsut@almamedia.fi.

An international conference call and audio webcast concerning the financial result of January-March 2017 will begin at 13.00 EEST. You can participate in the conference by calling +44 (0)330 336 9105 (confirmation code: 1988812) or follow it at http://www.almamedia.fi/en/investors/reports-and-presentations/presentations.

 Alma Media’s financial calendar 2017 

Alma Media will publish financial reports in 2017 as follows:  

– Interim report for January–June 2017 on Friday, 21 July at approximately 9:00 EEST 

– Interim report for January–September 2017 on Friday, 27 October at approximately 9:00 EEST 

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 2,300 professionals (excluding delivery personnel), of whom approximately 30% work outside Finland. Alma Media’s revenue in 2016 was EUR 353.2 million. Alma Media’s share is listed on NASDAQ Helsinki. Read more at www.almamedia.com.

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