Kai Telanne, President and CEO:
CEO’s review: Growth on a broad front (21 october 2021)
The performance of Alma Media’s businesses was excellent as the economy continued to recover. Organic growth in the third quarter was 14.4%. Acquisitions also increased Alma Media’s revenue and adjusted operating profit in July–September. The adjusted operating profit margin was at a record high level (26.3%). Revenue growth was diverse and derived from a broad range of business areas.
In the third quarter of 2021, exceptionally strong demand for recruitment services drove revenue and profitability to record high levels in the Alma Career segment, where revenue grew by 41.2% to MEUR 21.9 (15.5). As COVID-19 infection rates decreased and the restrictions imposed by the authorities were lifted, the brisk recovery of business continued in all of our operating countries and customer invoicing reached a record high level. The high activity in the recruitment market is believed to be driven by not only the realisation of pent-up demand but also the intensifying competition for labour in some of our operating countries. In addition to recruitment advertising, revenue growth was also strong in the digital training service Seduo and other added-value services related to recruitment. We expect to see continued strong growth in the next quarter.
In the Alma Talent segment, both media and service businesses developed in line with the strategy. The organic growth of digital business was 14% and its share of the segment’s revenue rose to 57.2% (50.5%). Robust growth was seen in both media advertising and the content business in the third quarter. Digital advertising grew by 30% and the strong growth of digital subscriptions continued.
Further factors underpinning the segment’s good performance included acquisitions and the organic growth of the service business in marketplaces as well as digital company information and law-related services.
The development of the Alma Talent segment’s information and data services for companies creates economies of scale and is reflected in improved operational efficiency. The demand for training services still suffered from COVID-19 restrictions to some extent in the third quarter, but demand is expected to recover as the remote work recommendation and meeting restrictions are lifted.
Strong growth was seen in all business areas in the Alma Consumer segment. The segment’s revenue grew by 39.3% and its result improved significantly in July–September, both organically and due to acquisitions. The share of revenue represented by digital business rose to 81.2% (74.9%). Housing, automotive and mobility marketplaces saw strong demand. In the media business, particularly strong growth was seen in digital advertising as Iltalehti’s advertising revenue again reached a new record. According to the Finnish Internet Audience Measurement published in September, Iltalehti has grown into Finland’s largest digital news service in terms of audience size with a reach of 2.77 million Finns (week 34). Investments in regional advertising sales also strengthened Alma Consumer’s market position in the SME customer segment. Due to the strong demand for advertising in the comparison period, we expect more moderate revenue growth in the next quarter.
The integration of Nettix into Alma Media and the Alma Consumer business segment has progressed according to plan. The first stage of the integration, which involved linking the business and support services to Alma Media’s processes, has been completed. The next key focus areas of the integration process include strengthening product and service synergies, refining harmonised operating models and building and developing a coherent company culture.
We have carried out a significant number of acquisitions this year, which has naturally affected our financial position and increased our gearing ratio. Our financial position strengthened as planned in the third quarter and our solvency improved thanks to our good profit performance and strong cash flow. Our gearing at the end of the third quarter stood at 132.0%, compared to 160.0% at the end of the second quarter. Our equity ratio improved to 33.3% from 29.4% during the same time period. Alma Media will convert the existing temporary bridge financing agreement facility into long-term financing during 2021.
We have already turned our attention to the post-epidemic period and will continue to operate under a flexible multi-local work model. The period of the COVID-19 epidemic has shown that Alma Media employees are adaptable, flexible and willing to work towards common goals. The lessons learned will benefit us in the future.