CEO’s Review

CEO’s review: Building success in spite of turbulence (published 21 April 2023)

Alma Media’s business performance in the first quarter was in line with expectations in spite of the slowing of economic growth and the disruptions caused by Russia’s war of aggression. Revenue decreased by 1.3% to MEUR 75.2 and adjusted operating profit decreased by 13.3% to MEUR 17.0. Excluding divested businesses, revenue was on a par with the comparison period. Profitability was weakened by the decrease in media advertising sales and increased expenses. Measures to adapt costs and protect profit performance are under way, with good progress being made. The effects of these measures will become apparent particularly in the latter half of the year.

The Alma Career segment had a fairly good quarter, considering that the comparison period was a historically strong period. Demand for recruitment services increased revenue by 3.6% to MEUR 27.7. Adjusted operating profit declined by 10.0% to MEUR 11.0, representing 39.9% of revenue.

Sales of recruitment services remained at a good level in the Czech Republic, Slovakia and Croatia. The continued high level of activity in the recruitment market is driven by intense competition for skilled labour. The low unemployment rate in our key operating countries also boosts demand for our added-value services.

The Career United project, which seeks to deepen internal cooperation, continued to progress according to plan, which will help curb the increase in costs going forward. The increase (15.3%) in costs was attributable to investments in product development and visitor marketing, among other things.

Customer invoicing increased year-on-year, and we expect revenue in Q2 to be at least on a par with the comparison period. Market conditions are expected to remain challenging in the Baltic countries and particularly in Finland.

The Alma Consumer segment’s revenue decreased by 2.3% to MEUR 24.2. Adjusted operating profit declined by 20.0% to MEUR 4.0, representing 16.7% of revenue. Digital business accounted for 82.5% of revenue. Revenue from comparison services and sharing economy services showed strong development, but revenue from media and media-related services decreased by 6.5%. The drop in advertising revenue can be considered significant (-12.3%). We continued our planned investments, particularly focusing on service development in marketplaces and comparison services.

The demand for news and the level of media consumption have remained high due to the prevailing geopolitical tensions and interest in war-related news. The demand for the paid Iltalehti Plus service continued to develop favourably. The service now has 42,500 subscribers.

Among the segment’s business areas, revenue from housing-related services grew by 1.1% in spite of the difficult market conditions, while revenue from automotive and mobility-related services was close to the level seen in the comparison period. We also launched Baana, a digital used car auction service between consumers and car dealers. The growth of the automotive segment was hindered by the global supply chain problems and component shortages in the automotive industry. Furthermore, increased consumer uncertainty caused by high energy prices, inflation and market interest rates was reflected in housing and automotive marketplaces and related advertising more than in the preceeding quarters.

In the Alma Talent segment, comparable revenue – excluding the Baltic telemarketing business divested in the spring – remained on a par with the comparison period. IPO activity was very low and the market situation was also otherwise difficult for financial media. Nevertheless, the segment’s strong digital transformation continued, with the share of digital business rising to exceed 60% of revenue. The adjusted operating profit was 20.3% of revenue. It declined by 11.8% year-on-year to MEUR 4.8.

Strategically significant success stories were the increase of 20% in Alma Talent Services’ recurring revenues, which was driven by growth in revenue from business information and law-related services, as well as the positive development of real estate business in Finland and Sweden.

Alma Media in a good position

Our financial position has been strengthened as planned thanks to our strong profit performance and cash flow. Our gearing at the end of the quarter stood at 58.7% (102.4%) and our equity ratio was 47.6% (33.0%).

Russia’s invasion of Ukraine has slowed down economic growth in Alma Media’s operating countries: inflation has accelerated, market interest rates have risen, consumers’ confidence in their finances has declined substantially, and geopolitical tensions have increased. Alma Media’s financial development and performance have been strong despite these factors. The decisions made in previous years – with regard to focusing on marketplaces, for example – are now producing positive results.

We will continue to build future growth through the continuous development of our operations and the creation of new openings. With regard to the marketplace and service business, our development is heading towards more advanced digital platforms. As the purchase processes are digitalised, we want to help our customers to easily and smoothly interact in digital platforms, and to offer them additional services at different stages of the transaction process.

Kai Telanne
President and CEO

“We will continue to build future growth through the continuous development of our operations and the creation of new innovations.”

CEO’s Review

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