CEO's Review

Kai Telanne, President and CEO:

(published 14 February 2019)

Alma Media’s profitability continued to see strong development in 2018. Adjusted operating profit grew by 12.2% to a record-high MEUR 57.3, while the operating profit margin was 16.2%. Earnings per share increased by 29.5% to EUR 0.51. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.35 per share be paid. 

The result for the final quarter of 2018 was excellent, with all businesses improving their financial performance. 

Alma Markets led the way once more with an operating profit margin of 33.7%. The growth of the recruitment business in our operating countries in Eastern Central Europe slowed down compared to the earlier part of the year, but was still at a good level supported by the economic growth in the region. The domestic marketplaces business, excluding the recruitment business, achieved organic growth of 11% in October–December. Further sources of growth and profitability were the new businesses acquired at the beginning of 2018 as well as investments in value added services. Operating profit was also increased by lower marketing expenses. 

Alma Talent continued to focus on its core business and made progress in its transformation towards digital media and service business models. Digital content revenue developed favourably in several media. For Kauppalehti digital content revenue compensated for the decline in print media content revenue in 2018. The events and books business as well as digital advertising revenue also developed favourably in Finland. 

In Alma Consumer, measures to ensure the profitability of publishing operations continued. Print media advertising revenue decreased, although the rate of decline was slower than that of the market in general. At the same time, the growth of the segment’s digital advertising revenue outperformed the market, particularly in the areas of video advertising, programmatic buying and content marketing. The digital subscription revenue of Alma Consumer’s regional and local media has showed promising development. 

Buoyed by the good financial result and strong cash flow, Alma Media became a nearly net debt-free company at the end of the review period.Our strong balance sheet, in spite of the effects of IFRS 16, gives us operating space to build our future growth, make acquisitions to support the growth of our digital business and invest in technologies that enhance our competitiveness.  

Global economic growth is levelling off, but our target remains to exceed market growth, especially in the digital business. Digital business now constitutes nearly half of the Group’s revenue and three quarters of its adjusted operating profit. International operations account for 20 per cent of total revenue and 40 per cent of the Group’s adjusted operating profit. 

Our fourth consecutive year of improving annual profits is a proof of our succesfull digital transformation, changes to our business portfolio and cost optimisation. In line with our strategy, we have made our print business more efficient and invested particularly in expanding our international digital business. At the same time, we have divested unprofitable businesses.  

The result for the final quarter of 2018 was excellent, with all businesses improving their financial performance.