Alma Media’s Half-Year Report January–June 2021: Revenue and operating profit in the second quarter were significantly increased by strong business development and acquisitions

Alma Media Corporation   Half-Year Report    21 July 2021 at 8.00 a.m.

ALMA MEDIA’S HALF-YEAR REPORT JANUARY–JUNE 2021: REVENUE AND OPERATING PROFIT IN THE SECOND QUARTER WERE SIGNIFICANTLY INCREASED BY STRONG BUSINESS DEVELOPMENT AND ACQUISITIONS.

Financial performance April–June 2021:

– Revenue MEUR 71.6 (52.6), up 36.1%.

– The share of revenue represented by digital business was 77.6% (67.3%).

– Adjusted operating profit MEUR 16.6 (9.8), up 69,2%.

– Operating profit MEUR 13.0 (7.0), up 87,0%.

– Earnings per share from continuing operations EUR 0.12 (0.04).

– Alma Career: Recruitment services recovered even faster than expected, leading to significant growth in revenue and operating profit.

– Alma Talent: Comparable advertising revenue returned to the level seen in 2019. Digital content revenue and digital services continued to see strong growth.

– Alma Consumer: Revenue and operating profit grew significantly, both organically and due to acquisitions.

– Acquisitions and divestments changed the Group’s balance sheet position: Equity ratio 29.4% (71.0%), gearing 160.0% (-23.0%).

Financial performance January–June 2021:

– Revenue MEUR 129.7 (114.5), up 13.3%.

– The share of revenue represented by digital business was 76.0% (67.3%)

– Adjusted operating profit MEUR 27.7 (21.0), up 31.8%.

– Operating profit MEUR 23.8 (19.2), up 24.2%.

– Earnings per share from continuing operations EUR 0.21 (0.14) euroa.

Key figures

MEUR	2021	2020	Change	2021	2020	Change	2020
	Q2	Q2	%	Q1—Q2	Q1—Q2	%	Q1—Q4
Revenue	71.6	52.6	36.1	129.7	114.5	13.3	230.2
Marketplaces	30.7	19.1	61.2	52.7	43.3	21.6	86.7
Media	26.8	21.4	25.4	49.6	47.5	4.5	94.9
Content, media	12.2	12.8	-4.5	23.9	26.5	-10.0	50.4
– of which digital	31.4 %	24.6 %		31.9 %	22.6 %		25.4 %
Advertising, media	14.6	8.6	69.5	25.8	21.0	23.0	44.5
– of which digital	76.1 %	78.7 %		77.0 %	73.6 %		74.5 %
Services	14.1	12.1	15.8	27.3	23.7	15.6	48.6
– of which digital	69.3 %	52.7 %		67.1 %	53.7 %		53.8 %
Adjusted total expenses	55.0	43.0	28.0	103.0	93.8	9.8	186.0
Adjusted EBITDA	20.8	13.8	50.6	35.4	29.2	21.4	60.8
EBITDA	17.2	11.0	57.0	31.5	27.3	15.4	58.9
Adjusted operating profit	16.6	9.8	69.2	27.7	21.0	31.8	45.4
% of revenue	23.2	18.7		21.4	18.4		19.7
Operating profit (loss)	13.0	7.0	87.0	23.8	19.2	24.2	43.1
% of revenue	18.2	13.2		18.4	16.8		18.7
Profit for the period	9.7	4.2	132.0	17.8	14.4	23.7	33.3
Earnings per share, EUR (basic and diluted)	0.12	0.04	232.0	0.21	0.14	49.4	0.33
Digital business revenue	55.6	35.4	56.9	98.6	77.1	28.0	158.4
Digital business, % of revenue	77.6	67.3		76.0	67.3		68.8

The operating environment in 2021

The global COVID-19 pandemic continues to influence and create uncertainty for economic development in 2021. The national economies of Finland and Alma Media’s other operating countries are nevertheless expected to recover compared to 2020.

The adoption of new technology accelerated during the exceptional circumstances created by the COVID-19 pandemic, leading to higher demand for digital media and digital services. The digitalisation of services and the ecosystems they create is expected to accelerate further in the next few years, and sales and purchases will continue to move to digital marketplaces. Consequently, the structural transformation of the media sector is expected to continue and strengthen further. Data, analytics, machine learning and automation will become increasingly important, which calls for increasing investments in technology.

Outlook for 2021 (unchanged, updated on 9 July 2021)

Alma Media expects its full-year revenue and adjusted operating profit from continuing operations in 2021 to increase significantly from the 2020 level. In 2020, the full-year revenue of the Group’s continuing operations was MEUR 230.2 and the adjusted operating profit was MEUR 45.4.

Market situation in the main markets

According to Kantar TNS, the total advertising volume in Finland increased by 42.9% (-38.2%) to MEUR 219.9 in April–June. Online media advertising grew by 42.8% (-22.6%), with classified online advertising increasing by 40.5% (-25.6%). Advertising in magazines and newspapers increased by 28.7% (-39.5%). In terms of volume, the total market for afternoon papers declined by 4.2% (declined by 21.9%) in the second quarter of 2021.

In addition to Finland, Alma Media’s main markets are the Czech Republic and Slovakia in Eastern Central Europe. The European Commission published its latest GDP forecasts in July 2021. The European Commission predicts that Finland’s GDP will grow by 2.7% in 2021 and 2.9% in 2022. In May, the Ministry of Finance forecast that the unemployment rate in Finland will be 7.8% in 2021 and 7.2% in 2022. The European Commission predicts that the Czech GDP will grow by 3.9% in 2021 and 4.5% in 2022. The Czech National Bank estimates that the unemployment rate will be 3.6% in 2021 and 3.5% in 2022. The European Commission predicts that Slovakia’s GDP will grow by 4.9% in 2021 and 5.3% in 2022. The National Bank of Slovakia estimates that the unemployment rate will be 7.1% in 2021 and 6.8% in 2022.

CEO’s review

The performance of Alma Media’s businesses was excellent as the economy continued to recover. Organic growth in the second quarter was 24%. Acquisitions also increased Alma Media’s revenue and adjusted operating profit in April–June. Our relative profitability was at a record high of 23%.

As rates of COVID-19 infections have decreased and the restrictions imposed by the authorities have been lifted, the recovery of the Alma Career segment’s business has been very rapid in all of our operating countries and the segment’s revenue turned to growth in the spring. The customer invoicing was at all-time high level in Q2. The realisation of pent-up demand is also thought to be a factor driving the increased activity in the recruitment market. In addition to traditional recruitment advertising, revenue growth in April–June was also strong in the digital training service Seduo and other added-value services related to recruitment. The segment’s expenses were increased by investments in marketing and employees.

In Alma Talent, a particularly positive aspect of the segment’s performance in the second quarter was the quick recovery of advertising (+55%) to the level seen in the comparison period in 2019. Digital content revenue also continued its strong growth (24%), which compensated for the decline in revenue from print products. Further factors underpinning the segment’s good performance included acquisitions and growth in marketplaces as well as digital property information, company information and law-related services. The segment’s expenses were on a par with the comparison period. The development of the Alma Talent Services  information and data services for companies creates significant economies of scale and is reflected in improved operational efficiency. Digital revenue now represents nearly 90% of Alma Talent Service’s revenue.

The Alma Consumer segment’s revenue grew and its result improved significantly in April–June, both organically and due to acquisitions. Demand was strong for housing-related and automotive marketplaces as well as comparison services. In the media business, particularly strong growth was seen in digital advertising as Iltalehti’s advertising revenue reached a new record. Investments in regional advertising sales also strengthened Alma Consumer’s market position in the SME customer segment.

The integration of Nettix into Alma Media and the Alma Consumer business segment is under way. The segment’s new organisational structure and management model have already been established. The key focus areas of the integration process are the development of harmonised operating models and company culture.

During the past six months, we have carried out a significant number of acquisitions – totalling MEUR 241 – which has naturally affected our financial position and increased our gearing ratio. Nevertheless, our solvency will improve quickly thanks to good profit performance and strong cash flow.

We have already turned our attention to the post-pandemic period and we are continuing to operate under a flexible multi-local work model. The period of the COVID-19 pandemic has shown that Alma Media employees are adaptable, flexible and prepared to work towards common goals. We will take advantage of the lessons we have learned as we enter the new normal.

More information:
Kai Telanne, President and CEO, telephone +358 (0)10 665 3500
Juha Nuutinen, CFO, telephone +358 (0)10 665 3873

News conference and live webcast
An analyst and investor webcast and teleconference will be held in English by President & CEO Kai Telanne and CFO Juha Nuutinen at 11.00–12.00.

The live webcast can be followed via https://almamedia.videosync.fi/2021-q2-results/register. To ask questions by phone during the live webcast, please join at least five minutes prior to the starting time by dialing one of the following numbers:

Dial in details:
Finland Toll: +358 981710310
Sweden Toll: +46 856642651
United Kingdom Toll: +44 3333000804
United States Toll: +1 6319131422

PIN: 97610181#

An on-demand version of the webcast and the presentation material will be available on the company's website later on the same day https://www.almamedia.fi/en/investors/reports-and-presentations/presentations/.

Alma Media’s financial calendar 2021
– Interim Report for January–September 2021 on Thursday, 21 October 2021 at approximately 8:00 EET 

ALMA MEDIA CORPORATION

Board of Directors

Distribution: NASDAQ Helsinki, main media, www.almamedia.com

Alma Media in brief

Alma Media is a dynamic multi-channel media company with a strong capacity for renewal. We are building sustainable growth from media to services, providing content and services that benefit users in their everyday lives, work and leisure time. In Finland, our best-known brands include Kauppalehti, Talouselämä, Iltalehti, Etuovi.com, Nettiauto and Nettimoto. Our recruitment services include prace.cz and jobs.cz in the Czech Republic, Profesia.sk in Slovakia and mojposao.net in Croatia.

Alma Media operates in 11 countries in Europe and employs approximately 1,500 professionals. Alma Media’s revenue from continuing operations was EUR 230.2 million in 2020. Alma Media’s share is listed on NASDAQ Helsinki. Read more at www.almamedia.com.

• AlmaMediaCorporation Half Year Report 2021

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