Alma Media’s Interim Report January–September 2021: Strong growth in all business segments − profitability at a record high level

Alma Media Corporation   Interim Report    21 October 2021 at 8.00 a.m.

ALMA MEDIA’S INTERIM REPORT JANUARY–SEPTEMBER 2021: STRONG GROWTH IN ALL BUSINESS SEGMENTS − PROFITABILITY AT A RECORD HIGH LEVEL

Financial performance July–September 2021:

• Revenue MEUR 67.8 (53.8), up 25.9%.
• The share of revenue represented by digital business was 79.0% (71.4%).
• Adjusted operating profit MEUR 17.8 (13.2), up 35,2%.
• Operating profit MEUR 17.4 (13.2), up 32.3%.
• Earnings per share from continuing operations EUR 0.18 (0.12).
• Alma Career: Exceptionally strong demand for recruitment services drove revenue and profitability to record high levels.
• Alma Talent: Increased revenue and profitability for both media and services. Service revenue grew both organically and through acquisitions.
• Alma Consumer: Continued strong growth in digital media and marketplaces. Revenue and operating profit were also increased by acquisitions.
• The balance sheet position improved compared to the previous quarter: the equity ratio was 33.3% and gearing was 132.0%.

Financial performance January–September 2021:

• Revenue MEUR 197.4 (168.3), up 17.3%.
• The share of revenue represented by digital business was 77.0% (68.6%)
• Adjusted operating profit MEUR 45.5 (34.2), up 33.1%.
• Operating profit MEUR 41.2 (32.3), up 27.5%.
• Earnings per share from continuing operations EUR 0.39 (0.26) 

Key figures

MEUR	2021	2020	Change	2021	2020	Change	2020
	Q3	Q3	%	Q1—Q3	Q1—Q3	%	Q1—Q4
Revenue	67.8	53.8	25.9	197.4	168.3	17.3	230.2
Marketplaces	31.2	22.0	42.0	83.9	65.3	28.5	86.7
Media	22.9	20.7	10.7	72.5	68.2	6.4	94.9
Content, media	11.7	11.5	2.2	35.6	38.0	-6.4	50.4
– of which digital	34.9%	28.3%		32.9%	24.3%		25.4%
Advertising, media	11.2	9.2	21.3	36.9	30.2	22.5	44.5
– of which digital	79.8 %	75.1 %		77.9 %	74.1 %		74.5 %
Services	13.6	11.2	22.2	41.0	34.8	17.7	48.6
– of which digital	67.3%	56.3%		67.1%	54.6%		53.8%
Adjusted total expenses	50.0	40.9	22.3	153.0	134.6	13.6	186.0
Adjusted EBITDA	22.2	17.0	30.5	57.6	46.2	24.8	60.8
EBITDA	21.8	17.0	28.3	53.3	44.3	20.4	58.9
Adjusted operating profit	17.8	13.2	35.2	45.5	34.2	33.1	45.4
% of revenue	26.3	24.5		23.1	20.3		19.7
Operating profit (loss)	17.4	13.2	32.3	41.2	32.3	27.5	43.1
% of revenue	25.7	24.4		20.9	19.2		18.7
Profit for the period	14.6	11.5	27.6	32.4	25.8	25.5	33.3
Earnings per share, continuing operations, EUR (basic and diluted)	0.18	0.12	51.3	0.39	0.26	50.3	0.33
Digital business revenue	53.5	38.4	39.2	152.1	115.5	31.7	158.4
Digital business, % of revenue	79.0	71.4		77.0	68.6		68.8

The operating environment in 2021

The COVID-19 epidemic continues, but the high rate of vaccination coverage reduces uncertainty regarding financial performance in 2021. The economies of Finland and in Alma Media’s other main market countries are expected to recover compared to 2020.

The adoption of new technology accelerated during the exceptional circumstances created by the COVID-19 epidemic, 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

Media advertising in Finland continued to grow in July–August. According to Kantar TNS, the total advertising volume in Finland increased by 12.2% (-17.1%) to MEUR 104.7. Online media advertising increased by 16.3% (-5.8%) in July–August, while advertising in print newspapers grew by 2.5% (-25.1%) year-on-year. Advertising in print magazines, in turn, decreased by 2.8% (-26.8%). Job advertising increased by 38.8% (-35.6%).

In terms of volume, the total market for afternoon papers declined by 10.5% (declined by 16.4%) in the third 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. According to the forecast, GDP growth in Finland will be 2.7% this year and 2.9% next year. In September, the Ministry of Finance predicted that the unemployment rate in Finland will be 7.8% this year and 6.8% next year. The European Commission predicts that the Czech GDP will grow by 3.9% this year and 4.5% next year. The Czech National Bank estimates that the unemployment rate will be 3.5% this and next year. The European Commission predicts that Slovakia’s GDP will grow by 4.9% this year and 5.3% next year. The National Bank of Slovakia estimates that the unemployment rate will be 7.0% this year and 6.5% next year.

CEO’s review: Growth on a broad front

The performance of Alma Media’s businesses was excellent as the economy continued to recover. Organic growth in the third quarter was 14.4%. Acquisitions also increased Alma Media’s revenue and adjusted operating profit in July–September. The adjusted operating profit margin was at a record high level (26.3%). Revenue growth was diverse and derived from a broad range of business areas.

In the third quarter of 2021, exceptionally strong demand for recruitment services drove revenue and profitability to record high levels in the Alma Career segment, where revenue grew by 41.2% to MEUR 21.9 (15.5). As COVID-19 infection rates decreased and the restrictions imposed by the authorities were lifted, the brisk recovery of business continued in all of our operating countries and customer invoicing reached a record high level. The high activity in the recruitment market is believed to be driven by not only the realisation of pent-up demand but also the intensifying competition for labour in some of our operating countries. In addition to recruitment advertising, revenue growth was also strong in the digital training service Seduo and other added-value services related to recruitment. We expect to see continued strong growth in the next quarter.

In the Alma Talent segment, both media and service businesses developed in line with the strategy. The organic growth of digital business was 14% and its share of the segment’s revenue rose to 57.2% (50.5%). Robust growth was seen in both media advertising and the content business in the third quarter. Digital advertising grew by 30% and the strong growth of digital subscriptions continued. Further factors underpinning the segment’s good performance included acquisitions and the organic growth of the service business in marketplaces as well as digital company information and law-related services. The development of the Alma Talent segment’s information and data services for companies creates economies of scale and is reflected in improved operational efficiency. The demand for training services still suffered from COVID-19 restrictions to some extent in the third quarter, but demand is expected to recover as the remote work recommendation and meeting restrictions are lifted.

Strong growth was seen in all business areas in the Alma Consumer segment. The segment’s revenue grew by 39.3% and its result improved significantly in July–September, both organically and due to acquisitions. The share of revenue represented by digital business rose to 81.2% (74.9%). Housing, automotive and mobility marketplaces saw strong demand. In the media business, particularly strong growth was seen in digital advertising as Iltalehti’s advertising revenue again reached a new record. According to the Finnish Internet Audience Measurement published in September, Iltalehti has grown into Finland’s largest digital news service in terms of audience size with a reach of 2.77 million Finns (week 34). Investments in regional advertising sales also strengthened Alma Consumer’s market position in the SME customer segment. Due to the strong demand for advertising in the comparison period, we expect more moderate revenue growth in the next quarter.

The integration of Nettix into Alma Media and the Alma Consumer business segment has progressed according to plan. The first stage of the integration, which involved linking the business and support services to Alma Media’s processes, has been completed. The next key focus areas of the integration process include strengthening product and service synergies, refining harmonised operating models and building and developing a coherent company culture.

We have carried out a significant number of acquisitions this year, which has naturally affected our financial position and increased our gearing ratio. Our financial position strengthened as planned in the third quarter and our solvency improved thanks to our good profit performance and strong cash flow. Our gearing at the end of the third quarter stood at 132.0%, compared to 160.0% at the end of the second quarter. Our equity ratio improved to 33.3% from 29.4% during the same time period. Alma Media will convert the existing temporary bridge financing agreement facility into long-term financing during 2021.

We have already turned our attention to the post-epidemic period and will continue to operate under a flexible multi-local work model. The period of the COVID-19 epidemic has shown that Alma Media employees are adaptable, flexible and willing to work towards common goals. The lessons learned will benefit us in the future.

News conference and live webcast

A combined analyst, investor and media conference, webcast and teleconference will be held in English by President & CEO Kai Telanne and CFO Juha Nuutinen on Thursday 21 October at 11.00–12.00 EEST.

The conference will be held in the Alma House (address: Alvar Aallon katu 3 C, Helsinki). To participate in the conference in Alma House, we kindly ask you to register beforehand by e-mail, kutsut@almamedia.fi. 

The live webcast can be followed via https://almamedia.videosync.fi/q3-2021-results. You may also ask questions in the webcast in writing. 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: 72970642#

The presentation material will be available on www.almamedia.fi/en/investors/reports-and-presentations/presentations at approximately 11.00 EEST. An on-demand version of the webcast will be available on the same page later the same day.

Alma Media’s Financial Reporting 2022

Alma Media Corporation will publish its financial reports in 2022 as follows: 

– Financial Statement Bulletin for financial year 2021 on Wednesday, 16 February 2022 approximately at 8:00 EET 

– Interim report for January–March 2022 on Friday, 22 April 2022, approximately at 8:00 EEST 

– Interim report for January–June 2022 on Wednesday, 20 July 2022, approximately at 8:00 EEST 

– Interim report for January–September 2021 on Thursday, 20 October 2022, approximately at 8:00 EEST 

Financial Statements, Report by the Board of Directors, Auditor’s Report and Corporate Governance Statement for financial year 2021 will be published on Tuesday, 8 March 2022. 

The Annual General Meeting is planned to be held on Tuesday, 29 March 2022.

ALMA MEDIA CORPORATION

Board of Directors

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

Alma Media in brief

Alma Media is a digital service business and 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.

In Finland, our business operations include leading housing and automotive marketplaces, financial and professional media, national consumer media and content and data services for professionals and businesses. Alma Media’s international business in Eastern Central Europe,  Sweden and the Baltic countries consists of recruitment services, an online marketplace for commercial properties and direct marketing services.

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.

• Alma-Media-Q3-2021-Interim-Report

Share article