Alma Media’s Interim Report January–March 2021: Adjusted operating profit in Q1 was on a par with the comparison period. Significant transactions executed successfully.
Alma media corporation Interim Report 21 april 2021 at 8.00 A.M.
ALMA MEDIA’S INTERIM REPORT JANUARY–MARCH 2021: ADJUSTED OPERATING PROFIT IN Q1 WAS ON A PAR WITH THE COMPARISON PERIOD. SIGNIFICANT TRANSACTIONS EXECUTED SUCCESSFULLY.
Alma Media’s new segment structure entered into effect on 1 March 2021. Alma Media also changed its revenue reporting by distributing revenue between marketplaces, media and service revenue. As part of the transition to a new segment structure, the Alma Mediapartners services that were previously reported as part of the Alma Markets business segment are now reported under the Alma Consumer business segment. In connection with the change, the name Alma Markets was changed to Alma Career.
On 9 April 2021, Alma Media published comparison data under the new segment structure and the revised distribution of revenue for each quarter and for the full financial year January–December 2020. The reporting in this interim report reflects the new segment structure and revised distribution of revenue. Alma Media also publishes more detailed segment-specific revenue and profitability figures in accordance with the nature of each segment’s business.
Financial performance January–March 2021:
- Revenue MEUR 58.1 (61.9), down 6.1%.
- The share of revenue represented by digital business was 74.1% (67.3%).
- Adjusted operating profit MEUR 11.1 (11.2), down 1.1%.
- Operating profit MEUR 10.8 (12.2), down 11.6%.
- Earnings per share from continuing operations EUR 0.09 (0.10).
- Equity ratio 40.5% (56.0%), gearing 31.2% (0.8%).
- Alma Career: Revenue and profitability declined year-on-year as expected. The recovery of invoicing was better than anticipated and added-value services developed favourably.
- Alma Talent: Revenue increased by 6% excluding the effect of the divested business operations in Sweden and profitability improved significantly. Strong growth was seen in digital services, digital content and direct marketing.
- Alma Consumer: The housing marketplaces business and competitive tender services saw growth in revenue and their profitability improved. The segment’s revenue was weighed down by print media.
Key figures
| MEUR | 2021 Q1 |
2020Q1 | Change % |
2020Q1–Q4 |
| Revenue | 58.1 | 61.9 | -6.1 | 230.2 |
| Marketplaces | 21.9 | 24.3 | -9.5 | 86.7 |
| Media | 22.8 | 26.1 | -12.5 | 94.9 |
| Content, media | 11.7 | 13.8 | -15.2 | 50.4 |
| - of which digital | 32.4 % | 20.8 % | 25.4 % | |
| Advertising, media | 11.1 | 12.3 | -9.6 | 44.5 |
| - of which digital | 78.2 % | 70.1 % | 74.5 % | |
| Services | 13.3 | 11.5 | 15.4 | 48.6 |
| - of which digital | 64.7 % | 54.9 % | 53.8 % | |
| Adjusted total expenses | 47.9 | 50.7 | -5.6 | 186.0 |
| Adjusted EBITDA | 14.6 | 15.3 | -4.9 | 60.8 |
| EBITDA | 14.3 | 16.3 | -12.5 | 58.9 |
| Adjusted operating profit | 11.1 | 11.2 | -1.1 | 45.4 |
| % of revenue | 19.1 | 18.1 | 19.7 | |
| Operating profit (loss) | 10.8 | 12.2 | -11.6 | 43.1 |
| % of revenue | 18.6 | 19.7 | 18.7 | |
| Profit for the period | 8.1 | 10.2 | -20.4 | 33.3 |
| Earnings per share, EUR (basic and diluted) | 0.09 | 0.10 | -11.6 | 0.33 |
| Digital business revenue | 43.1 | 41.7 | 3.4 | 158.4 |
| Digital business, % of revenue | 74.1 | 67.3 | 68.8 |
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.
The rapid growth in the use of digital media and services during the exceptional circumstances caused by the COVID-19 pandemic as well as the simultaneous quick adoption of new technology suggest that consumer behaviour has changed permanently. The digitalisation of services and the ecosystems they create is expected to accelerate further in the next few years, and sales and purchases will continue to move to digital marketplaces. Consequently, the structural transformation of the media sector is expected to continue and strengthen further. Data, analytics, machine learning and automation will become increasingly important, which calls for increasing investments in technology.
Outlook for 2021 (unchanged, updated on 5 March due to the Nettix acquisition)
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 increase compared to 2020. 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
According to Kantar TNS, the total advertising volume in Finland decreased by 13.8% (-2.3%) to MEUR 108.9 in January–February. Online media advertising increased by 2.7% (+4.6%), with classified advertising in online media growing by 4.0% (-4.0%). Advertising in magazines and newspapers decreased by 20.5% (-10.9%). In terms of volume, the total market for afternoon papers declined by 15% (-12%) in the first quarter of 2021.
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. The European Commission predicts that Finland’s GDP will grow by 2.8 per cent in 2021 and 2.0 per cent in 2022. The Ministry of Finance forecasts that the unemployment rate in Finland will be 8.0 per cent in 2021 and 7.6 per cent in 2022. The European Commission predicts that the Czech GDP will grow by 3.2 per cent in 2021 and 5.0 per cent in 2022. The Czech National Bank estimates that the unemployment rate will be 3.6 per cent in 2021 and 2.5 per cent in 2022. The European Commission predicts that Slovakia’s GDP will grow by 4.0 per cent in 2021 and 5.4 per cent in 2022. The National Bank of Slovakia estimates that the unemployment rate will be 7.1 per cent in 2021 and 6.3 per cent in 2022.
The impacts of the pandemic on Alma Media’s business in the first quarter of 2021:
In spite of the deterioration of the COVID-19 pandemic situation, the negative impacts of the exceptional circumstances on the Group’s business mainly involved recruitment, events and travel-related businesses. As the impacts of the COVID-19 pandemic became less severe, no further significant cost savings were pursued in Alma Media’s businesses. Instead, investments in product development, for example, were increased in the first quarter.
The recovery of the sales and invoicing of the Alma Career segment’s recruitment business continued, although the delay between invoicing and the recognition of revenue had a negative impact on the revenue performance of the recruitment business in the first quarter of 2021. Revenue is expected to turn to growth starting from the second quarter. No customer events were organised in the Alma Talent segment during the review period. All training activities were carried out online due to the restrictions imposed by the authorities to prevent the spread of COVID-19. In the Alma Consumer segment, the travel restrictions caused by the pandemic and the accelerated shift among readers from print to digital further sharpened the decline of Iltalehti’s single-copy sales. The pandemic also continues to have a negative impact on Alma Media’s digital service related to travel and tourism.
CEO’s review
The year 2021 has started favourably in spite of the pandemic. Alma Media’s result for the first quarter was better than we anticipated in the uncertain operating environment. Our revenue was reduced by the lower revenue of the recruitment business, as expected, but also by the weak development of content and advertising revenue from print media.
The adjusted operating profit of the Alma Career segment decreased by 22.9 per cent due to lower revenue. During the early part of the year, the demand for recruitment services and the gradual recovery of customer invoicing have continued in spite of the difficult COVID-19 situation in many of our operating countries. The delay between invoicing and the recognition of revenue had a negative impact on the revenue performance of the recruitment business in the first quarter of 2021. Revenue is expected to turn to growth starting from the second quarter. Alma Career’s strategic goal is to expand from job boards and recruitment advertising to services. In respect to this, positive development was seen in Seduo digital training service and other added-value services related to re-cruitment during the period under review.
In the Alma Talent segment, the accelerating transition of media and services towards digital business models was reflected in the share of digital business rising to 54.5 per cent. Thanks to the successful structural transformation, the development of the segment’s business was strong across the board during the review period. The rapid growth (39%) of digital content revenue continued, compensating for the decline in print media revenue. Direct marketing services and Alma Talent Services also performed very well. In services, strong development was achieved in the marketplaces business as well as digital property information, company information and law-related services, for example. Advertising revenue reduced due to divested businesses and restrictions imposed by the authorities on customer events.
In the Alma Consumer segment, the good development of the housing-related marketplaces business and competitive tender services continued and their first quarter performance was strong. Media revenue was reduced by the decline of print media, particularly with single-copy sales being affected by the restrictions on movement. In digital advertising, growth was seen in content marketing. One important initiative aimed at the growth of paid editorial content during the review period was the launch of the IL Plus digital subscription product.
The past few months have been a significant period in our efforts to build an increasingly competitive Alma Media. We have completed several significant transactions over a short period of time. We have acquired full ownership of Alma Mediapartners and Alma Career and we have expanded our product portfolio in digital housing transactions as well as advertising and recruitment business technologies. In March 2021, we closed our largest-ever acquisition by acquiring Nettix, the leading marketplace for motor vehicles. Following this acquisition, we have strong business cornerstones in areas that represent the most pivotal investments in consumers’ lives – housing and cars – along with Finland’s leading digital advertising network.
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/2021-q1-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:
Finland Toll: +358 981710310
Sweden Toll: +46 856642651
United Kingdom Toll: +44 3333000804
United States Toll: +1 6319131422
PIN: 51039517#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–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
ALMA MEDIA CORPORATION
Board of Directors
Distribution: NASDAQ Helsinki, main media, www.almamedia.com
Alma Media in brief
Alma Media is a dynamic multi-channel media company with a strong capacity for renewal. We are building sustainable growth from media to services, providing content and services that benefit users in their everyday lives, work and leisure time. In Finland, our best-known brands include Kauppalehti, Talouselämä, Iltalehti, Etuovi.com, Nettiauto and Nettimoto. Our recruitment services include prace.cz and jobs.cz in the Czech Republic, Profesia.sk in Slovakia and mojposao.net in Croatia.
Alma Media operates in 11 countries in Europe and 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.