Alma Media’s Interim Report January–June 2016: Good growth in profitability and digital business in the second quarter

Alma Media Corporation               Interim Report                     22 July 2016 at 9:00 a.m. (EEST) 

Alma Media’s Interim Report January–June 2016: 

GOOD GROWTH IN PROFITABILITY AND DIGITAL BUSINESS IN THE SECOND QUARTER  

Financial performance April–June 2016: 

-          Revenue MEUR 92.0 (73.0), up 25.9%. 

-          Adjusted operating profit MEUR 9.9 (6.8), or 10.8% (9.3%) of revenue, up 45.5%. 

-          Operating profit MEUR 9.1 (8.1), or 9.9% (11.1%) of revenue, up 12.5%. 

-          Earnings per share EUR 0.07 (0.07). 

-          Alma Markets: Strong growth continued internationally as well as in Finland. 

-          Alma Talent: The benefits gained from the integration of Talentum boosted operating profit. 

-          Alma News & Life: The segment’s online advertising grew by 26.6%. 

-          Alma Regions: Profitability declined slightly year-on-year. 

Financial performance January–June 2016: 

-          Revenue MEUR 178.7 (144.9), up 23.3%. 

-          Adjusted operating profit MEUR 15.4 (8.7), or 8.6% (6.0%) of revenue, up 77.1%. 

-          Operating profit MEUR 11.6 (10.8), or 6.5% (7.4%) of revenue, up 7.8%. 

-          Earnings per share EUR 0.08 (0.09). 

-          At the end of the period, the equity ratio was 55.7% and the gearing ratio 41.9%. 

Outlook for 2016: 

The Finnish economy is expected to show zero growth or only slight growth in 2016. Alma Media’s main 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 adjusted operating profit to increase from the 2015 level. The full-year revenue for 2015 was MEUR 291.5, and the adjusted operating profit was MEUR 23.4. 

Kai Telanne, President and CEO: 

The second quarter saw Alma Media continue the positive development achieved in the first quarter. The Group’s revenue grew by 26 per cent to MEUR 92 due to reasons including the Talentum acquisition as well as positive development in the sales of the Alma Markets and News & Life segments. Adjusted operating profit increased by
46 per cent and amounted to MEUR 9.9. Earnings per share were weighed down by a provision of MEUR 1.5 recognised in relation to restructuring expenses in Alma Talent’s Swedish operations. 

The second quarter revenue of the Alma Markets segment increased by 20 per cent and operating profit by 25 per cent. The factors behind the excellent performance included both international recruitment services and domestic marketplaces. 

The comparable revenue of Alma Talent increased slightly. The segment’s operating profit, however, showed significant improvement as a result of cost synergies, with the integration of Talentum’s business operations into a new entity progressing as planned and in a positive spirit. The arrangements concerning the Finnish operations have mostly been completed, including relocations to new premises. The integration process is still ongoing, particularly in Swedish operations, where significant restructuring decisions were made in June. 

The Alma News & Life segment achieved significant growth in digital advertising revenue for the third consecutive quarter. The unit’s revenue from digital consumer services grew due to reasons including the acquisition of a majority share in Rantapallo.fi. As a result of the positive development of the digital business, on the one hand, and declining single-copy sales, on the other hand, digital revenue grew to account for 41 per cent of the unit’s total revenue. The unit more than doubled its result.  

The Alma Regions segment achieved good development in digital content and advertising sales in local and regional media in the second quarter. However, as the growing digital sales volume is not yet sufficient to cover the gap left by the falling sales of print media, the unit’s revenue and adjusted operating profit declined.

As a whole, Alma Media’s team play and the Group’s strong media and service brands proved their effectiveness in an operating environment that remains full of challenges. Economic trends in Alma Media’s operating countries in Central Europe remained favourable, which creates conditions for the continued success of Alma Markets’ recruitment services. In Sweden, the strong economy provides a solid foundation for new growth in Alma Talent’s Swedish operations. Finland’s fledgling economic growth, however, hangs in the balance with factors such as European political turbulence influencing economic decisions.  

The relatively low level of marketing that Finnish companies engage in for their own products has been shown by research to be a problem for our national competitiveness. Through its actions and initiatives, Alma Media strives to support the strengthening of a pro-growth atmosphere in Finland. In our view, significantly increasing marketing investments would be one of the ways to build growth and success not only for Finnish businesses, but also the country as a whole. 

For more information, please contact:
Kai Telanne, President and CEO, telephone +358 10 665 3500
Juha Nuutinen, CFO, telephone +358 10 665 3873 

Conference, webcast and conference call:

A conference for Finnish media, investors and analysts will be held on the same day at 11.00–12.00 EEST 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 11.00 EEST.

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 of January-June 2016 will begin at 13.00 EEST. You can participate in the conference by calling +44(0)20 3427 0503 (confirmation code: 3704124) or follow it at http://www.almamedia.fi/en/investors/reports-and-presentations/presentations.

Alma Media’s financial calendar 2016

Alma Media will publish financial reports in 2016 as follows:

– Interim report for January–September 2016 on Friday, 28 October at approximately 9:00 EEST

Board of Directors

Distribution: NASDAQ 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.