CEO's Review

Kai Telanne, President and CEO:

(published 18 July 2018)

Alma Media’s adjusted operating profit for April–June 2018 was at the same good level as in the previous year. Revenue was reduced mostly by divestments. Our businesses developed at very different rates during the second quarter. Alma Markets was again the strongest driver of growth and profitability. The stable revenue development and improved profitability of Alma Talent’s operations in Finland was another positive aspect of the second quarter. However, we continue to face challenges in Sweden. The structural transformation of media was reflected in the Alma Consumer segment’s result as print media continued to decline.

The Finnish economy is booming, but the domestic advertising market continued to decline further and competition with international platform operators has increased. According to Kantar TNS, media advertising volume in Finland declined by 2.5 per cent in April–June.  

The strong development of the Alma Markets segment’s operating result continued in the second quarter. The segment’s revenue grew by 18 per cent and the operating profit margin was 36 per cent. The excellent performance was attributable to international recruitment services and domestic marketplaces, both of which benefited from favourable market development. The segment’s expenses were increased by launch and marketing investments in a new mobile recruitment service in Poland, among other things. The development of the service’s user volume has stabilised at a good rate of growth and the service is in the process of moving from the trial phase to becoming a paid service for recruitment customers.

Alma Talent’s revenue was on par with the comparison period, but the segment’s adjusted operating profit improved by 15 per cent due to previously implemented restructuring measures in Finland and effective cost control. The segment’s Swedish business performed poorly and measures to remedy the situation are ongoing. Alma Talent’s key objective is to move rapidly towards digital media and service business models. Digital content sales, digital subscriptions and digital advertising sales all increased during the reporting period.  

The revenue of the Alma Consumer segment, which was established in the spring, was reduced by factors including the divestment of the newspaper business in Lapland. The result was weighed down by the continued decline of advertising sales in print media, the falling single-copy sales of Iltalehti as well as the weaker-than-expected development of revenue from programmatic buying in digital advertising. The entry into force of the new General Data Protection Regulation (GDPR) created temporary uncertainty in the programmatic buying market in the spring.

In recent years, legislation has emerged as a significant driver of change in the media sector’s operating environment. The GDPR and the preparations for its entry into force were intensely reflected in the activities of all of Alma’s media products and services, including the documentation of data management and processing and the amendment of data processing agreements pertaining to the transfer or disclosure of personal data as well as impact assessments and employee training.

The Finnish economy is booming, but the domestic advertising market continued to decline further and competition with international platform operators has increased.