CEO's Review

 

Kai Telanne, President and CEO:

(published 14 February 2018)

In 2017, Alma Media’s operative performance was good, and we achieved all three of our long-term financial targets. Full-year revenue grew by 4 per cent to MEUR 367 and adjusted operating profit increased by 45 per cent to MEUR 51. Earnings per share increased by 90 per cent to EUR 0.39. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.24 per share be paid.

Organic revenue growth continued in the last quarter of 2017 as planned. Revenue grew by 4 per cent in October–December and amounted to MEUR 97.1. Adjusted operating profit grew by 6 per cent to MEUR 11.3 year-on-year. In order to secure our leading position as a provider of digital multimedia services in the future, we continued our investments in product development and marketing at the end of the year. 

In the Alma Markets segment, the basic business was supported by the continued strong economic development in Eastern Central Europe and the Finnish economy returning to growth. The business segment also implemented highly active sales efforts and expanded its product portfolio. Costs were increased by investments in sales and marketing as well as the development of online services, such as the renewed Etuovi online service.  

The Alma Talent segment’s revenue in October-December was on a par with the previous year, but the business unit’s profitability was weighed down by costs allocated to the fourth quarter. Alma Talent’ aims to increase digital content sales and seek synergies between the unit’s different business operations. The Talouselämä online service was renewed during the review period, and the positive content synergy between the book and training business increased the sales of training.

In the Alma News & Life segment, digital advertising saw strong growth and was at a record level in October–December. Growth was especially strong in mobile and content marketing. The development can be attributable to major advertisers shifting from print media to national digital media. Digital business now constitutes more than half of the segment’s revenue. Content revenue declined in October–December due to a decrease in Iltalehti’s print circulation. 

In Alma Regions, measures to ensure the profitability of publishing operations continued in the last quarter of the year. The structural transformation of advertising was clearly demonstrated in the decline of regional newspaper advertising. Content revenue decreased slightly as a result of the sale of newspapers in Pohjois-Pohjanmaa, but the investment in the growth of digital subscriptions progressed according to plan.  

The Finnish economy experienced a strong growth spurt in 2017, but this was not reflected in the long-awaited revival of the advertising market. According to TNS Kantar, investments in media advertising declined in 2017 by 2.8 per cent to 0.9 billion euros. Increasing investments in advertising would strengthen Finland’s competitiveness in the long term. International platform operators account for around half of the Finnish digital advertising market. A positive aspect of this development is that, unlike in many other countries, the growth of these operators has not accelerated towards the end of the year in the Finnish advertising market.

An increasingly crucial factor in our growth is our rapidly growing and extremely profitable international business. The Czech Republic, Slovakia and Croatia were among the fastest growing countries in 2017. Our operations outside of Finland accounted for 23 per cent of our revenue and 39 per cent of our operating profit. 

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An increasingly crucial factor in our growth is our rapidly growing and extremely profitable international business. Our operations outside of Finland accounted for 23 per cent of our revenue and 39 per cent of our operating profit.