Alma Media’s Financial Statements Release 2015: Operating profit excluding non-recurring items increased, EPS down due to non-recurring items
Alma Media Corporation Financial Statements Release 12 February 2016 at 8:00 a.m. (EET)
Alma Media’s Financial Statements Release 2015:
OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS INCREASED, EPS DOWN DUE TO NON-RECURRING ITEMS
Financial performance October–December 2015:
– Revenue was MEUR 78.6 (76.6), up 2.6%.
– Online sales increased by 17.7% to MEUR 29.1 (24.7).
– EBITDA (Earnings before interest, taxes, depreciation and amortisation)
excluding non-recurring items was MEUR 10.8 (8.9), up 21.5%.
– EBITDA was MEUR 6.1 (10.1), down 40.1%.
– Operating profit excluding non-recurring items was MEUR 7.1 (5.6) or 9.0% (7.3%) of revenue, up 26.3%.
– Operating profit MEUR 0.9 (4.8) or 1.1% (6.3%) of revenue, down 81.5%.
– The operating profit includes non-recurring items of MEUR -6.2 (-0.8).
– Profit for the period was MEUR 0.3 (4.0), down 93.7%.
– Earnings per share were EUR 0.00 (0.05).
Financial performance full year 2015:
– Revenue was MEUR 291.5 (295.4), down 1.3%.
– Online sales increased by 8.7% to MEUR 102.8 (94.5).
– EBITDA (Earnings before interest, taxes, depreciation and amortisation) excluding non-recurring items
was MEUR 37.4 (35.1), up 6.5%.
– EBITDA was MEUR 34.5 (36.4), down 5.1%.
– Operating profit excluding non-recurring items was MEUR 23.4 (21.4) or 8.0% (7.2%) of revenue, up 9.3%.
– Operating profit was MEUR 17.7 (20.7), or 6.1% (7.0%) of revenue, down 14.5%.
– The operating profit includes non-recurring items of MEUR -5.7 (-0.7).
– Profit for the period was MEUR 12.1 (15.7), down 23.3%.
– Earnings per share were EUR 0.13 (0.19).
– The Board of Directors’ proposal of capital repayment is EUR 0.12 per share
| KEY FIGURES | 2015 | 2014 | Change | 2015 | 2014 | Change | ||
| MEUR | Q4 | Q4 | % | Q1–Q4 | Q1–Q4 | % | ||
| Revenue | 78.6 | 76.6 | 2.0 | 2.6 | 291.5 | 295.4 | -3.9 | -1.3 |
| Content revenue | 29.2 | 27.7 | 1.5 | 5.5 | 104.7 | 110.1 | -5.5 | -4.9 |
| Content revenue, print | 26.3 | 26.2 | 0.1 | 0.4 | 97.0 | 104.6 | -7.6 | -7.2 |
| Content revenue, online | 2.4 | 1.5 | 0.8 | 53.4 | 7.1 | 5.6 | 1.5 | 27.3 |
| Advertising revenue | 40.6 | 38.6 | 2.0 | 5.2 | 146.9 | 146.4 | 0.5 | 0.3 |
| Advertising revenue, print | 17.6 | 19.8 | -2.2 | -10.9 | 66.2 | 73.7 | -7.5 | -10.2 |
| Advertising revenue, online | 23.0 | 19.0 | 3.9 | 20.7 | 80.7 | 72.7 | 8.0 | 11.0 |
| Service revenue | 8.7 | 10.2 | -1.5 | -14.9 | 39.9 | 38.8 | 1.1 | 2.8 |
| Total expenses excluding non-recurring items | 71.7 | 71.2 | 0.5 | 0.7 | 268.7 | 274.6 | -5.9 | -2.1 |
| EBITDA excluding non-recurring items | 10.8 | 8.9 | 1.9 | 21.5 | 37.4 | 35.1 | 2.3 | 6.5 |
| EBITDA | 6.1 | 10.1 | -4.1 | -40.1 | 34.5 | 36.4 | -1.9 | -5.1 |
| Operating profit excluding non-recurring items | 7.1 | 5.6 | 1.5 | 26.3 | 23.4 | 21.4 | 2.0 | 9.3 |
| % of revenue | 9.0 | 7.3 | 8.0 | 7.2 | ||||
| Operating profit (loss) | 0.9 | 4.8 | -3.9 | -81.5 | 17.7 | 20.7 | -3.0 | -14.5 |
| % of revenue | 1.1 | 6.3 | 6.1 | 7.0 | ||||
| Profit for the period | 0.3 | 4.0 | -3.8 | -93.7 | 12.1 | 15.7 | -3.7 | -23.3 |
| Earnings per share, EUR (basic) | 0.00 | 0.05 | -0.05 | -103.3 | 0.13 | 0.19 | -0.06 | -30,9 |
| Earnings per share, EUR (diluted) | 0.00 | 0.05 | -0.05 | -103.3 | 0.13 | 0.19 | -0.06 | -30.9 |
| Online sales | 29.1 | 24.7 | 4.4 | 17.7 | 102.8 | 94.5 | 8.3 | 8.7 |
| Online sales, % of revenue | 37.1 | 32.3 | 35.3 | 32.0 | ||||
Dividend proposal to the Annual General Meeting:
On 31 December 2015, the Group’s parent company had distributable funds totalling EUR 120,642,934 (179,932,379). Alma Media’s Board of Directors proposes to the Annual General Meeting that a capital repayment of EUR 0.12 (2014: EUR 0.12) per share be paid from the reserve for invested non-restricted equity for the financial year 2015. Based on the number of shares on the closing date 31 December 2015, the capital repayment totals EUR 9,885,982 (2014: EUR 9,058,422).
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.
Outlook for 2016:
The Finnish economy is expected to show zero growth or only slight growth in 2016. Alma Media’s significant operating countries in Eastern Central Europe, such as the Czech Republic and Slovakia, are expected to see continued economic growth, but at a lower rate than in 2015.
Macroeconomic development affects both consumer demand and advertising volume. The structural transformation of advertising will continue in 2016; online advertising will grow, while print media advertising will decline. Total advertising volume is not expected to increase in Finland in 2016.
The Talentum acquisition completed in late 2015 will increase Alma Media’s revenue and operating profit in 2016. In 2016, Alma Media expects its full-year revenue and operating profit excluding non-recurring items to increase from the 2015 level. The full-year revenue for 2015 was MEUR 291.5, and operating profit excluding non-recurring items was MEUR 23.4.
Kai Telanne, President and CEO:
For Alma Media, 2015 was a good year, taking the operating environment into consideration. The development of foreign operations was excellent due to strong economic growth in Eastern Central Europe, but the Finnish market did not see the hoped-for recovery that would have supported a significant improvement in Alma Media’s result. In 2015, macroeconomic development in Finland was among the weakest in the EU, and consumer purchasing power declined. The weak economic climate in Finland had a negative impact on expectations among consumers and the business sector, as well as advertising investment.
Nevertheless, Alma Media’s operating profit excluding non-recurring items improved in 2015 in spite of the difficult economic climate. Revenue for the full year declined to MEUR 291.5 due to divestments. Operating profit excluding non-recurring items increased by 9.3 per cent to MEUR 23.4. Alma Media’s business in its primary international markets in Eastern Europe, in particular, showed continued positive profit performance. In the final quarter of 2015, the recruitment business outside Finland grew by nearly 21 per cent.
The focus of media consumption is shifting rapidly to digital channels, mobile in particular. In response to the changes in media consumption, advertising investments in print media are declining and the shift to digital channels is continuing. Alma Media has made a concerted effort to move its business operations and employees from the world of print media towards digital multimedia services. The Group’s revenue from digital products and services exceeded the MEUR 100 milestone with year-on-year growth of 8.7 per cent.
In the Digital Consumer Services segment, revenue growth was highly profitable as operating profit excluding non-recurring items grew by 47 per cent from the previous year. The most significant factor in the improved result was the strong development of the recruitment business outside of Finland. In Finland, Alma Media’s digital services maintained their profit level.
The improved profitability of the Financial Media and Business Services segment was supported by good advertising sales and the increase in revenue attributable to JM Tieto. Kauppalehti’s content sales managed to compensate for the decline in print media by achieving growth in digital content revenue.
For IL-Media, 2015 was a difficult year. Print media content revenue and advertising sales showed a significant decline. Nevertheless, there was a positive turn in digital advertising towards the end of the year. The increase in online advertising sales in the latter part of the year was particularly supported by mobile sales as well as new programmatic buying and targeted advertising solutions.
The Regional Media segment made several divestments and implemented operational restructuring and efficiency improvement measures to secure the profitability of the publishing business. The segment also began a gradual shift towards paid digital content.
One of the biggest news in the Finnish media sector in 2015 was Alma Media’s acquisition of Talentum. With the two companies’ business operations complementing each other very well, the combination creates a significant player in professional media and business services.
The Talentum acquisition was funded by both equity financing and debt. In spite of this significant investment, Alma Media’s financial position remained strong in 2015, with our equity ratio remaining at 42.5%. Our strong balance sheet enables us to continue investing in growth and internationalisation whenever opportunities that are in line with our strategy arise.
We carried out organisational restructuring in our national media sales in 2015. We strengthened our competitiveness and increased our market share in advertising by focusing on areas such as the development of effective digital multimedia solutions and the versatile utilisation of data.
According to TNS Media Intelligence, the media advertising volume in Finland decreased by approximately two per cent in 2015 compared to the previous year, totalling EUR 1.2 billion. It is estimated that media advertising’s share of GDP was at a historical low in 2015, at a level that is similar to many developing markets. Well-executed marketing communications play an important role in maintaining economic activity in Finland. Instead of streamlining and cost restructuring, Finland needs an atmosphere that encourages investment, hard work and entrepreneurship in order to increase confidence in the future. If you want to sell and be successful, you must also create consumer demand and be active in marketing.
For more information, please contact:
Kai Telanne, President and CEO, telephone +358 10 665 3500
Juha Nuutinen, CFO, telephone +358 010 665 3873
Conference, webcast and conference call:
A conference for Finnish media, investors and analysts will be held on the same day at 10.30–11.30 EET in the Alma House (address: Alvar Aallon katu 3 C, Helsinki). In addition to the presentations held by President & CEO Kai Telanne and CFO Juha Nuutinen, participants will have an opportunity to discuss with other members of the company's management. Please note that the conference will be held in Finnish. The presentation material in English will be available on www.almamedia.fi/en/investors/reports-and-presentations/presentations at 10.30 EET.
To participate in the conference, kindly register beforehand by e-mail, kutsut@almamedia.fi.
An international conference call and audio webcast concerning the financial result 2015 will begin at 13.00 EET. You can participate in the conference by calling +44 20 3427 0503 (confirmation code: 4069252) or follow the direct transmission at www.almamedia.fi/en/investors/reports-and-presentations/presentations.
ALMA MEDIA CORPORATION
Board of Directors
Distribution: NASDAQ OMX Helsinki, main media, www.almamedia.com
Alma Media in brief
Alma Media is a media company focusing on the service business and journalistic content. The company’s best-known brands are Kauppalehti, Talouselämä, Affärsvärlden, Iltalehti, Aamulehti, Etuovi.com and Monster. Alma Media builds sustainable growth for its customers by utilising the opportunities of digitality, including information services, system and expert services and advertising solutions. Alma Media’s operations have expanded from Finland to the Nordic countries, the Baltics and Central Europe. Alma Media employs approximately 2,500 professionals (excluding delivery personnel), of whom approximately 30% work outside Finland. Alma Media’s revenue in 2015 was EUR 291.5 million. Alma Media’s share is listed on NASDAQ Helsinki. Read more at www.almamedia.com.