Kai Telanne, President and CEO:
17 February 2020
The year 2020 was exceptional due to the global COVID-19 pandemic and required a very quick response to ensure the continuity of Alma Media’s business and safeguard the health of employees and customers. The company implemented significant cost savings in order to maintain profitability.
Our strong performance in the unpredictable operating environment was good indication of our adaptability and the agility of our business model. In spite of lower revenue, our relative profitability in 2020 was on par with the previous year at nearly 20 per cent.
The impacts of COVID-19 on Alma Media’s business varied during the year depending on the business and country. The economy came to a sudden halt in the spring, but demand recovered towards the end of the year and mitigated the decline in our revenue. In the final quarter of the year, we increased our investments in marketing and product development to ensure our long-term competitiveness, which was a factor in our fourth-quarter EBITDA declining by 12.3 per cent year-on-year.
The deterioration of the COVID-19 situation meant that shutdown measures by the authorities continued in Central Europe in the latter part of the year, but the impacts on the business operations of Alma Career’s client companies were less dramatic than earlier in the year. This was reflected in an increase in client invoicing in October–December compared to the preceding quarters. However, the delay between invoicing and the recognition of revenue had a negative impact on the revenue performance of the recruitment business in the fourth quarter and will continue to weigh it down in the first half of 2021. In Finland, the Alma Markets segment’s marketplace business recovered better than expected thanks to the good development of housing-related services as well as comparison services.
Alma Talent aims to build a stronger and more integrated service offering alongside its media business. The portfolio’s focus on digital media and services and the reduced impacts of COVID-19 were reflected in the positive development of the business in October–December. Alma Talent’s digital content revenue remained strong (+42%). Digital B2B marketplaces, telemarketing services and information services also developed well during the review period. Digital advertising in financial and professional media exceeded the level seen before the COVID-19 crisis.
In the Alma Consumer segment, digital advertising saw a strong recovery in October–December and increased year-on-year: growth was achieved particularly in programmatic advertising as well as advertising in the retail and automotive categories. The decline in Iltalehti’s single-copy sales accelerated due to the COVID-19 restrictions, but Iltalehti’s online readership remained at a higher level than before. Profitability improved substantially in the fourth quarter due to digital advertising growth and the lower volume-linked costs of print media.
In spite of the exceptional circumstances, we continued to implement our change strategy in 2020 through active portfolio management and digital business development. The concrete steps we took in the implementation of our strategy included the divestment of the print-heavy regional news media and printing business in Finland and the divestment of the professional media business in Sweden on the one hand and several acquisitions focused on digital business on the other hand. The COVID-19 pandemic has accelerated the ongoing digital transformation and further convinced us that our strategic direction is correct.
We are growing and diversifying our product portfolio by expanding from media to marketplaces and digital services. We will continue to move forward on the path of internationalisation and seek new growth opportunities in digital services targeted at both professionals and consumers. The accelerated change in consumer behaviour also presents new digital business opportunities in areas such as the subscription business, housing and property transactions, online training and online buying.