Alma Media’s Interim Report January–March 2022: Revenue and operating profit increased significantly by strong organic growth and acquisitions

Alma Media Corporation                       Interim Report                  22 April 2022 at 8.00 a.m.

ALMA MEDIA’S INTERIM REPORT JANUARY–MARCH 2022: REVENUE AND OPERATING PROFIT INCREASED SIGNIFICANTLY BY STRONG ORGANIC GROWTH AND ACQUISITIONS

Financial performance January–March 2022:

• Revenue MEUR 76.2 (58.1), up 31.3%.
• The share of revenue represented by digital business was 79.9% (74.1%)
• Adjusted operating profit MEUR 19.6 (11.1), up 77.4%.
• Operating profit MEUR 19.8 (10.8), up 83.2%.
• Earnings per share EUR 0.19 (0.09).​
• Alma Career: A record-breaking quarter in all business areas and operating countries in spite of the crisis in Ukraine.
• Alma Consumer: Revenue and operating profit were increased by acquisitions and strong organic revenue growth of 11%, especially in digital media.
• Alma Talent: Revenue grew in the media business as well as the service business, boosted by strong demand for digital products.
• Equity ratio 33.0% and gearing 102.4%. 

Key figures

	2022	2021	Change	2021
MEUR	Q1	Q1	%	Q1–Q4
Revenue	76.2	58.1	31.3	275.4
Marketplaces	35.0	21.9	59.6	116.4
Media	26.2	22.8	14.9	101.9
– of which digital	60.1%	54.8%		56.9%
Service revenue	15.0	13.3	12.6	57.1
– of which digital	67.3%	64.7%		65.7%
Digital business revenue	60.9	43.1	41.4	212.1
Digital business, % of revenue	79.9%	74.1%		77.0%
Adjusted total expenses	56.7	47.9	18.3	215.6
Adjusted EBITDA	24.0	14.6	64.5	77.8
EBITDA	24.1	14.3	68.7	73.5
Adjusted operating profit	19.6	11.1	77.4	61.1
% of revenue	25.8	19.1		22.2
Operating profit (loss)	19.8	10.8	83.2	56.8
% of revenue	26.0	18.6		20.6
Profit for the period	16.0	8.1	97.1	44.3

The operating environment in 2022 and the impacts of the crisis in Ukraine

The economic growth outlook in Europe was strong at the beginning of the year, but the crisis in Ukraine made the outlook more negative at the end of February. The European economy will be adversely affected by the sanctions against Russia and the related counter-sanctions. The supply shock caused by the war has further accelerated inflation. Market interest rates in Europe have also risen.

The national economies of Finland and Alma Media’s other operating countries are still expected to grow this year, but the period of rapid growth is expected to have levelled off. In addition to the war, the global COVID-19 pandemic and the variants of the virus still affect the overall economic situation and continue to create increased uncertainty regarding economic development in 2022.

The overall economic situation in our operating countries still appears to be moderate in spite of the uncertainty caused by the pandemic, the war, rising inflation and production costs, the threat of stagflation and the shortage of labour.
 

The demand for digital advertising, media and services is expected to continue to grow. The digitalisation of services and the ecosystems they create is expected to accelerate, and sales and purchases will continue to move to digital marketplaces. E-commerce is expected to accelerate, also with regard to larger goods. Data, analytics, machine learning and automation will become increasingly important, which calls for growing investments in technology.

Market situation in the main markets

Media advertising in Finland continued to grow in the first quarter. According to Kantar TNS, the advertising volume in January – February 2022 increased by 8.5% compared to last year. Advertising in print newspapers rose 2.2%, but declined 14.3% in print magazines. Advertising increased in other media categories. Job advertising increased by 17.9% year-on-year, brand advertising by 4.8%, retail advertising by 13.0% and classified advertising by 19.8% compared to year ago.

In terms of volume, the total market for afternoon papers in Finland declined by 7% (-15%) in the first quarter of 2022.

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 February 2022, before Russia’s attack on Ukraine. According to this forecast, Finnish GDP growth (3.5% in 2021) will slow down to 3.0%, the Czech GDP will grow by 4.4% and Slovakia’s GDP will grow by 5.0% this year. However, there are significant uncertainties in these GDP forecasts and it is likely that the projections described above will clearly be lowered later this year.
 

On 13 April 2022, the Finnish Ministry of Finance predicted that the unemployment rate in Finland will be 7.2% this year. In February 2022, the Slovakian Ministry of Labour estimated that the country’s unemployment rate was 6.9%. In March, the Czech Ministry of Labour and Social Affairs estimated that the national unemployment rate was 3.4%. 

Outlook for 2022

In 2022, Alma Media expects its full-year revenue and adjusted operating profit to increase from the 2021 level. The full-year revenue for 2021 was MEUR 275.4 and the adjusted operating profit was MEUR 61.1.

CEO’s review: Strong growth in an exceptional operating environment

Russia’s attack on Ukraine shocked Europe. However, the economic impacts of the war on Alma Media’s operations have been minor thus far, and the company’s businesses achieved strong development in the first quarter of the year. Revenue grew by 31.1% to MEUR 76.2. Adjusted operating profit grew at a record rate of 77.4%, reaching MEUR 19.6.

The Alma Career segment had an excellent quarter. The continued strong demand for recruitment services increased revenue by 65.0% to MEUR 26.7. Adjusted operating profit grew by 140.5% to MEUR 12.3, representing 46.0% of revenue. The demand for recruitment services increased in all of our operating countries, and the positive development of added-value services related to recruitment – such as system solutions and employer branding related – continued. While COVID-19 infection numbers remained high due to the Omicron variant, the public authorities moved to quickly lift restrictions in all of our operating countries. The brisk activity in the recruitment market is believed to stem from the strong recovery of labour demand from the COVID-19 crisis, which increases the need for recruitment advertising and accelerates competition for labour. As our customer invoicing was again at a strong level, we expect growth to continue in the second quarter. The potential negative impacts of the crisis in Ukraine on the segment’s business operations are not expected to materialise until the second half of the year at the earliest. 

Strong growth was seen in all businesses in the Alma Consumer segment. Revenue grew by 41.5% to MEUR 24.8. Organic revenue growth was 11.1%. Adjusted operating profit grew by 47.4% to MEUR 5.0, representing 20.4% of revenue. The share of revenue represented by digital business rose to 82.9%. Revenue from media and media-related services increased by 22.1%. Russia’s attack on Ukraine increased the consumption of news media, which had a positive impact on Iltalehti. The demand for the paid Iltalehti Plus service developed favourably throughout the quarter. The benefits of the integration of Nettix and synergies between our Finnish media and marketplaces are also becoming increasingly apparent. In the second quarter, the increase in consumer uncertainty caused by the war in Ukraine may be reflected particularly in housing and automotive marketplaces and related advertising.

The Alma Talent segment’s revenue increased by 3% to MEUR 25.2. The segment’s strong digital transformation continued, with the share of digital business rising to 56.4% of revenue. Adjusted operating profit grew by 5.2% to MEUR 5.5, representing 21.7% of revenue. Alma Talent Media’s revenue increased by 4.8% to MEUR 13.4, and Alma Talent Services’ revenue increased by 3.6% to MEUR 8.7.

Talent Media’s content revenue grew by 1.1%, as the increase in digital content revenue exceeded the decline in print media revenue. The war in Ukraine tempered the growth of the transaction volume for housing and other properties as well as new IPOs. At the same time, the war increased online traffic for the segment’s media. The digital housing transaction service continued to grow in popularity, and Talent’s positive performance was also attributable to digital business information and law services. Finland’s leading HR industry event, HRx, was organised very successfully at the end of March. The event brought a large number of HR professionals physically together to enjoy networking activities and discussions and to be inspired by leaders in the field.

Our financial position strengthened as planned in the first quarter thanks to our excellent profit performance and strong cash flow. Our gearing at the end of the quarter stood at 102.3%, compared to 160.0% at the end of the Q2 2021 after significant acquisitions that had an impact on our financial position. Our equity ratio increased from 29.4% to 33.0% over the same period.

The war in Ukraine will have an impact on economic growth also in Alma Media’s operating countries. While our company has no business activities or assets in Ukraine or Russia, we will not be unaffected by the indirect economic impacts of the war. While the estimates of economic development naturally involve uncertainty, it is likely that the war will weaken economic growth and simultaneously accelerate inflation in Alma Media’s operating countries during the remainder of the year. Emotionally, we have been hit hard by the tragedy in Ukraine. We have supported refugees through aid organisations and offered free advertising space to the organisations. We have also supported Ukrainians in finding work by developing a job portal Workania.eu for Ukranians entering the Alma Career countries. Service helps Ukrainian refugees find work in their own language, and the service currently has over 7000 jobs available to Ukrainians.

The crisis in Ukraine and the still fluctuating epidemiological situation underscore the importance of agility, strategic flexibility and resilience for a company. To operate in volatile and uncertain conditions, we need to have a strategy that is clear, well-communicated and capable of being implemented. It is also important for us to have a strong operational capacity as well as adaptability, flexibility and a willingness to work towards shared goals. As the COVID-19 pandemic has shown, Alma Media employees have the ability to quickly adapt to difficult circumstances and maintain excellent business performance even in weak economic environment. In spite of the geopolitical gloom, we look forward to the post-crisis period with optimism.

Kai Telanne

President and CEO

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

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

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/results-q1-2022/register. Questions can be asked through the webcast chat function.

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

Alma Media’s financial calendar 2022

• Interim Report for January–June 2022 on Wednesday, 20 July 2022, at approximately 8:00 EET

• Interim Report for January–September 2022 on Thursday, 20 October 2022, at approximately 8:00 EET

ALMA MEDIA CORPORATION

Board of Directors

Distribution: NASDAQ Helsinki, main media, www.almamedia.fi/en

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 275.4 million in 2021. Alma Media’s share is listed on NASDAQ Helsinki. Read more at www.almamedia.fi/en/.

• AlmaMediaCorp Q1 InterimReport 22April2022

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