Alma Media’s Financial Statements Bulletin January–December 2020: Relative profitability in 2020 was on par with the comparison period, adjusted operating profit nearly 20 per cent

Alma Media Corporation               Financial Statements Bulletin        17 February 2021 at 8:00 a.m. (EET)

ALMA MEDIA’S FINANCIAL STATEMENTS BULLETIN JANUARY–DECEMBER 2020:
Relative profitability in 2020 was on par with the comparison period, adjusted operating profit nearly 20 per cent

Financial performance October–December 2020:

  • The decline in revenue slowed down in the fourth quarter, while profitability was weighed down by the recruitment business.
  • Revenue from continuing operations MEUR 61.9 (65.8), down 5.8%.
  • Adjusted operating profit from continuing operations MEUR 11.1 (12.5), down 10.8%.
  • Operating profit from continuing operations MEUR 10.8 (12.6), down 14.9%.
  • Earnings per share from continuing operations EUR 0.08 (0.11).
  • Earnings per share including discontinued operations EUR 0.05 (0.14).
  • The Group has a strong financial position, with a gearing ratio of -4.5%.
  • Alma Markets: Revenue and operating profit continued to decline in the recruitment business. In Finland, the recovery of the marketplaces business continued and profitability improved year-on-year.
  • Alma Talent: Revenue increased by 5% and profitability improved by 29%, excluding the effect of the divested business operations in Sweden.
  • Alma Consumer: Digital advertising revenue saw strong growth and print media revenue declined. The segment’s profitability improved substantially.

Financial performance January–December 2020:

  • Revenue from continuing operations MEUR 230.2 (250.2), down 8.0%.
  • Adjusted operating profit from continuing operations MEUR 45.4 (49.4), down 8.2%.
  • Operating profit from continuing operations MEUR 43.1 (49.5), down 13.0%.
  • Earnings per share from continuing operations EUR 0.33 (0.41).
  • Earnings per share including discontinued operations EUR 1.15 (0.51).
  • The Board’s dividend proposal is EUR 0.30 (0.40) per share.
KEY FIGURES 2020 2019 Change 2020 2019 Change
MEUR Q4 Q4 % Q1–Q4 Q1–Q4 %
Revenue 61.9 65.8 -5.8 230.2 250.2 -8.0
Content revenue 15.2 17.5 -13.2 59.1 64.2 -7.9
Content revenue, print 10.6 13.8 -23.6 42.0 50.9 -17.5
Content revenue, digital 4.6 3.7 25.8 17.0 13.2 28.8
Advertising revenue 35.1 38.3 -8.4 128.6 148.5 -13.4
Advertising revenue, print 3.4 4.7 -26.9 11.1 16.3 -32.3
Advertising revenue, digital 31.7 33.6 -5.8 117.5 132.2 -11.1
Service revenue 11.7 10.0 17.0 42.6 37.6 13.3
Adjusted total expenses 51.4 53.4 -3.7 186.0 201.1 -7.5
Adjusted EBITDA 14.6 16.5 -11.1 60.8 66.1 -8.0
EBITDA  14.6 16.6 -12.3 58.9 66.2 -11.1
Adjusted operating profit 11.1 12.5 -10.8 45.4 49.4 -8.2
% of revenue 18.0 19.0 19.7 19.8
Operating profit (loss) 10.8 12.6 -14.9 43.1 49.5 -13.0
% of revenue 17.4 19.2 18.7 19.8
Profit for the period 7.4 10.2 -27.4 33.3 40.5 -17.8
Earnings per share, EUR (basic and diluted) 0.08 0.11 -26.9 0.33 0.41 -19.1
   
Digital business revenue 43.0 42.8 0.4 158.9 166.7 -4.7
Digital business, % of revenue 69.3 65.1   69.0 66.6  

Dividend proposal to the Annual General Meeting:

On 31 December 2020, the Group’s parent company had distributable funds totalling EUR 137,958,899 (148,403,121). Alma Media’s Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.30 per share (2019: EUR 0.40 per share) be paid for the financial year 2020. The dividend will be paid to shareholders who are registered in Alma Media Corporation’s shareholder register maintained by Euroclear Finland Ltd on the record date, 26 March 2021. The Board of Directors proposes that the dividend be paid on 6 April 2021.  Based on the number of outstanding shares on the closing date 31 December 2020, the dividend payment totals EUR 24,678,651 (32,913,355).

No essential changes have taken place after the end of the financial year with respect to the company’s financial standing. The proposed distribution of profit does not, in the view of the Board of Directors, compromise the company’s liquidity.

Operating environment in 2021

The global COVID-19 pandemic continues to influence and create uncertainty for economic development in 2021. The national economies of Finland and Alma Media’s other operating countries are nevertheless expected to recover compared to 2020.

In the prevailing exceptional circumstances, the consumption of digital content and services has grown significantly in general. The COVID-19 pandemic is expected to lead to permanent changes in consumer behaviour and to accelerate the demand for digital services. As a result, the structural transformation of the media sector is expected to continue and further intensify. Data, analytics, machine learning and automation will become increasingly important, which calls for increasing investments in technology. The areas of digital advertising that are again expected to see the fastest growth are search engine, social media, mobile and video advertising as well as content marketing.

Outlook for 2021

The uncertainty in Alma Media’s operating environment is continuing due to the COVID-19 pandemic in 2021. In 2021, Alma Media expects its full-year revenue and adjusted operating profit for continuing operations to remain at the previous year’s level. In 2020, the full-year revenue of the Group’s continuing operations was MEUR 230.2 and the adjusted operating profit was MEUR 45.4.

Market situation in the main markets and the impacts of the coronavirus epidemic on Alma Media’s business

According to Kantar TNS, the total advertising volume in Finland decreased by 4.0% (-5.4%) to 223,0 million euros in October–December. Online media advertising increased by 9.1% (+0.2%) to 57.4 million euros in October–December. Advertising in newspapers declined by 15.4% (-10.5%) in Finland. Advertising in magazines in decreased in October–December by 11.9% (-11.1%). In terms of volume, the total market for afternoon papers in Finland declined by 18.0% (8.0%) in the fourth quarter of 2020.

In addition to Finland, Alma Media’s main markets are the Czech Republic and Slovakia in Eastern Central Europe. The European Commission published its latest GDP forecasts in February 2021. According to the Commission, the outlook is brightening as progress is made with vaccinations, although the COVID-19 pandemic continues to spread throughout Europe and causes uncertainty. The European Commission predicts that Finland’s GDP will grow by 2.8 per cent in 2021. For 2022, the Commission predicts that Finland’s GDP will grow by 2.0 per cent. The Czech GDP is forecast to grow by 3.2 per cent in 2021. For 2022, the Commission predicts GDP growth of 5.0 per cent. The European Commission forecasts that Slovakia’s GDP will grow by 4.0 per cent in 2021. In 2022, the European Commission expects Slovakia to see GDP growth of 5.4%.

The impacts of the epidemic on Alma Media’s business in the fourth quarter of 2020:

In the operating countries of Alma Markets’ recruitment business in Eastern Central Europe, the number of COVID-19 cases was higher than in the spring, but the restrictions on economic activity imposed by the authorities to prevent the spread of the disease did not affect the business operations of Alma Career’s client companies as broadly as earlier in 2020. This was reflected in the gradual recovery of client invoicing in the latter part of the year, but the delay between invoicing and the recognition of revenue will have a negative impact on the revenue performance of the recruitment business in the first half of 2021. The revenue of the recruitment business decreased by 16 per cent in the fourth quarter. The online education business continued to develop favourably. In Finland, the Alma Markets segment’s marketplaces business recovered and revenue grew year-on-year thanks to the good development of housing-related services as well as comparison services.

The COVID-19 epidemic did not have a significant impact on Alma Talent’s business in the fourth quarter. There was continued strong demand for digital subscriptions for high-quality media content, which first began in the spring. Telemarketing, B2B marketplaces services and information services also developed favourably during the review period. In the training business, the shift to digital channels gained strength. Advertising, particularly in the automotive and financial categories, exceeded the comparison period’s level.

In the Alma Consumer segment, advertising sales – including retail advertising – has recovered from the sharp drop seen in the spring and exceeded the comparison period’s level in October–December. The travel restrictions caused by the epidemic and the accelerated shift among readers from print to digital have sharpened the decline of Iltalehti’s single-copy sales. At the same time, Iltalehti’s online readership remains at a higher level than before: its digital media is read weekly by more than 2.8 million Finns and reader commitment is also substantially higher than in previous years according to the Finnish National Readership Survey (NRS).

As the impacts of the COVID-19 epidemic lessened, Alma Media did not carry out extensive adjustment measures in its businesses during the latter part of the year. In the fourth quarter, the Group increased its investments in advertising and product development, for example.

The economic uncertainty caused by the COVID-19 epidemic is causing a decline in Alma Media’s cash flow from operating activities, but the Group’s financial position nevertheless remains very strong. Credit loss risks did not increase substantially during the fourth quarter. There is currently no evidence of impairment risk concerning goodwill.

Alma Media is monitoring the development of the market situation in its business segments and additional measures will be taken as necessary.

From the President and CEO

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.

The impacts of the COVID-19 epidemic on our business segments and the measures we have taken to mitigate the impacts are described in more detail on page 3.

More information:
Kai Telanne, President and CEO, telephone +358 (0)10 665 3500
Juha Nuutinen, CFO, telephone +358 (0)10 665 3873
 

News conference and live webcast:

An analyst and investor webcast and teleconference will be held in English by President & CEO Kai Telanne and CFO Juha Nuutinen at 11.00–12.00.

The live webcast can be followed via https://almamedia.videosync.fi/2020-q4-results/register.  To ask questions by phone during the live webcast, please join at least five minutes prior to the starting time by dialing one of the following numbers:

Dial-in details:

Finland Toll: +358 981710310

Sweden Toll: +46 856642651

United Kingdom Toll: +44 3333000804

United States Toll: +1 6319131422

PIN: 24183609#

An on-demand version of the webcast and the presentation material will be available on the company's website later on the same day www.almamedia.fi/en/investors/reports-and-presentations/presentations.

Alma Media’s financial calendar 2021

– Interim Report for January–March 2021 on Wednesday, 21 April 2021 at approximately 8:00 EET  – Interim Report for January–June 2021 on Wednesday, 21 July 2021 at approximately 8:00 EET  

– Interim Report for January–September 2021 on Thursday, 21 October 2021 at approximately 8:00 EET  

Financial Statements, Report by the Board of Directors and Corporate Governance Statement for the 2020 financial year will be published on Wednesday, 25 February 2021.  

The Annual General Meeting is planned to be held on Wednesday, 24 March 2021. The materials related to the Annual General Meeting will be available on the Alma Media website.  

ALMA MEDIA CORPORATION

Board of Directors

Distribution: NASDAQ Helsinki, main media, www.almamedia.com

Alma Media in brief

Alma Media is a dynamic digital service business and media company with a strong capacity for renewal. The company’s best-known brands are Kauppalehti, Talouselämä, Iltalehti, Etuovi.com and Monster. Alma Media builds sustainable growth expanding its offering from media to related digital services fulfilling the needs of users’ everyday life as consumers and as professionals in business. Alma Media operates in 11 countries in Europe. Alma Media employs approximately 1,500 professionals. Alma Media’s revenue from continuing operations was EUR 230.2 million in 2020. Alma Media’s share is listed on NASDAQ Helsinki. Read more at www.almamedia.com 

  • Date: 17.2.2021, 08:00
  • News type: Stock exchange release

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