Alma Media’s Interim Report January–March 2015
Revenue and operating profit decreased as expected, the strong growth of international business operations continued
Alma Media Corporation Interim Report 30 April 2015 at 9:00 a.m. (EEST)
Alma Media’s Interim Report January–March 2015:
REVENUE AND OPERATING PROFIT DECREASED AS EXPECTED, THE STRONG GROWTH OF INTERNATIONAL BUSINESS OPERATIONS CONTINUED
Financial performance January–March 2015:
– Revenue was MEUR 71.9 (72.7), down 1.1%.
– Online sales increased by 0.3% to MEUR 23.8 (23.7).
– EBITDA (Earnings before interest, taxes, depreciation and amortisation) excluding non-recurring items
MEUR 5.3 (6.1), down 12.2%.
– EBITDA was MEUR 6.1 (6.8), down 10.6%.
– Operating profit excluding non-recurring items was MEUR 1.9 (2.5), or 2.7% (3.4%) of revenue,
down 22.6%.
– Operating profit MEUR 2.7 (3.2) or 3.7% (4.4%) of revenue, down 16.9%.
– Profit for the period was MEUR 1.8 (2.2), down 14.7%.
– The operating profit for January–March includes non-recurring items of MEUR 0.8 (0.7).
– Earnings per share EUR 0.02 (0.02).
| KEY FIGURES | 2015 | 2014 | Change | 2014 | |
| MEUR | Q1 | Q1 | % | Q1–Q4 | |
| Revenue | 71.9 | 72.7 | -0.8 | -1.1 | 295.4 |
| Content revenue | 26.0 | 27.4 | -1.4 | -5.1 | 110.1 |
| Content revenue, print | 24.5 | 26.1 | -1.6 | -6.0 | 104.6 |
| Content revenue, online | 1.4 | 1.3 | 0.2 | 14.7 | 5.6 |
| Advertising revenue | 35.2 | 35.1 | 0.1 | 0.2 | 146.4 |
| Advertising revenue, print | 16.7 | 16.9 | -0.2 | -1.3 | 73.7 |
| Advertising revenue, online | 18.4 | 18.1 | 0.4 | 2.1 | 72.7 |
| Service revenue | 10.8 | 10.2 | 0.5 | 5.2 | 38.8 |
| Total expenses excluding non-recurring items | 70.0 | 70.4 | -0.3 | -0.5 | 274.6 |
| EBITDA excluding non-recurring items | 5.3 | 6.1 | -0.7 | -12.2 | 35.1 |
| EBITDA | 6.1 | 6.8 | -0.7 | -10.6 | 36.4 |
| Operating profit excluding non-recurring items | 1.9 | 2.5 | -0.6 | -22.6 | 21.4 |
| % of revenue | 2.7 | 3.4 | 7.2 | ||
| Operating profit (loss) | 2.7 | 3.2 | -0.5 | -16.9 | 20.7 |
| % of revenue | 3.7 | 4.4 | 7.0 | ||
| Profit for the period | 1.8 | 2.2 | -0.3 | -14.7 | 15.7 |
| Earnings per share, EUR (basic) | 0.02 | 0.02 | 0.00 | -20.0 | 0.19 |
| Earnings per share, EUR (diluted) | 0.02 | 0.02 | 0.00 | -20.0 | 0.19 |
| Online sales | 23.8 | 23.7 | 0.1 | 0.3 | 94.5 |
| Online sales, % of revenue | 33.1 | 32.6 | 32.0 | ||
Outlook for 2015:
Low interest rates, a weaker euro and lower oil price improve the chances for growth in the long run. However, in 2015, economic growth is still expected to remain weak in Europe and, in particular, in Finland. The weak overall economic growth has an impact on advertising volume, which is not expected to increase in Finland in 2015.
In the first half of 2015, Alma Media expects its revenue and operating profit excluding non-recurring items to decrease from the 2014 level. The revenue for the first half of 2014 was MEUR 148.4, and operating profit excluding non-recurring items MEUR 8.8.
Kai Telanne, President and CEO:
The first quarter of 2015 was another subdued period for the media industry. The weak economic situation and the poor development of the Finnish advertising market had a negative impact on the business operations of media companies. According to TNS Media Intelligence, advertising volume decreased in Finland in the first quarter by 2.8% year-on-year.
Alma Media’s first quarter revenue remained almost at the previous year’s level. The recruitment service business continued to see strong growth in Eastern Central Europe. In the first quarter of 2015, recruitment business outside Finland grew by more than 18%.
Alma Media’s revenue from domestic business operations declined due to the general economic situation in Finland. The difficult market situation weighed down the result of businesses such as IL-Media and domestic digital services. However, the Financial Media and Business Services segment’s performance showed positive development. Digital content revenue increased in that segment by 14.5% and partly covered the decline in content revenue for print media. Kauppalehti saw its visitor numbers increase after a content renewal implemented in January 2015. The segment’s print and online advertising sales also grew, with sales performance being particularly positive in March.
At the beginning of 2015, Alma Media acquired the entire share capital of JM Tieto Oy, which builds marketing and sales concepts for B2B companies. The acquisition strengthens Alma Media’s information service business and supports the company’s strategy of expanding its media business towards a greater emphasis on services.
In the first quarter, Alma Media implemented structural reforms in order to improve the profitability of the publishing business. The company sold its newspaper business in Kainuu to SLP Kustannus Oy in March. Alma Media is also planning to implement significant changes in the production of its two daily newspapers published in Lapland, namely Lapin Kansa and Pohjolan Sanomat.
In response to changes in the media sector, Alma Media has implemented a significant structural transformation in recent years that has led to the digital business growing to account for a third of its revenue. At the same time, the company has become more international through acquisitions. Faced with ongoing uncertainty in its business environment, Alma Media will continue to focus on renewal and invest in new digital business operations. Alma Media wants to be a digital trailblazer in its industry and to continue the implementation of its long-term growth strategy to increase its digital business.
For more information, please contact:
Kai Telanne, President and CEO, telephone +358 10 665 3500
Juha Nuutinen, CFO, telephone +358 10 665 3873
Disclosure procedure:
Alma Media Corporation follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority. This stock exchange release is a summary of Alma Media Corporation's Interim Report January – March 2015. The complete report is attached to this release in pdf format. The Interim Report is also available on Alma Media's website at www.almamedia.com/investors/.
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 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.com/press_room/downloads/presentations/ at 10.30 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-March 2015 will begin at 12.00 EEST. You can participate in the conference by calling +44(0)20 3427 1916 (confirmation code: 3093752) or follow the direct transmission at www.almamedia.com/press_room/downloads/presentations/.
ALMA MEDIA CORPORATION
Rauno Heinonen
Vice President, Corporate Communications and IR
Distribution: NASDAQ OMX Helsinki, main media
Alma Media in brief
Alma Media is a media company focusing on digital services and publishing. In addition to news services, the company’s products provide useful information related to lifestyle, career and business development. The services of Alma Media have expanded from Finland to the Nordic countries, the Baltics and Central Europe. In 2014, the company employed an average of 1,830 professionals (excluding deliverers), of whom approximately one quarter worked outside Finland. Alma Media’s revenue in 2014 totalled approximately EUR 295 million. Alma Media’s share is listed on NASDAQ OMX Helsinki. Read more at www.almamedia.com.