Alma Media’s Interim Report January–September 2019: Revenue improved and content sales grew in the third quarter
Alma Media Corporation Interim Report 23 October 2019 at 8:00 a.m. (EEST)
ALMA MEDIA’S INTERIM REPORT JANUARY–SEPTEMBER 2019:
REVENUE IMPROVED AND CONTENT SALES GREW IN THE THIRD QUARTER
Financial performance July–September 2019:
- Revenue MEUR 80.3 (81.6), down 1.6%.
- Adjusted operating profit MEUR 16.1 (15.1), or 20.1% (18.5%) of revenue, up 6.7%.
- Operating profit MEUR 15.7 (14.6), or 19.6% (17.9%) of revenue, up 7.7%.
- Earnings per share EUR 0.14 (0.12).
- Alma Markets: Profitable growth continued particularly in the housing and automotive businesses in Finland.
- Alma Talent: Profitability improved in spite of a decrease in advertising revenue. Digital content revenue grew by 19%.
- Alma Consumer: Profitability was weighed down by the decline of print media advertising sales. Digital content revenue grew by 20%.
Financial performance January–September 2019:
- Revenue MEUR 253.3 (262.7), down 3.6%.
- Adjusted operating profit MEUR 45.4 (40.2), or 17.9% (15.3%) of revenue, up 12.9%.
- Operating profit MEUR 44.6 (44.9), 17.6% (17.1%) of revenue, down 0.5%.
- Earnings per share EUR 0.37 (0.38).
| KEY FIGURES | 2019 | 2018 | Change | 2019 | 2018 | Change | 2018 |
| MEUR | Q3 | Q3 | % | Q1–Q3 | Q1–Q3 | % | Q1–Q4 |
| Revenue | 80.3 | 81.6 | -1.6 | 253.3 | 262.7 | -3.6 | 354.6 |
| Content revenue | 26.9 | 26.6 | 1.1 | 82.0 | 85.3 | -3.9 | 114.8 |
| Content revenue, print | 21.9 | 22.4 | -2.3 | 67.8 | 72.8 | -6.8 | 97.9 |
| Content revenue, digital | 5.0 | 4.2 | 19.6 | 14.2 | 12.6 | 13.1 | 16.9 |
| Advertising revenue | 41.7 | 42.7 | -2.3 | 133.9 | 136.6 | -2.0 | 185.7 |
| Advertising revenue, print | 9.5 | 11.0 | -14.9 | 32.9 | 39.1 | -15.9 | 50.6 |
| Advertising revenue, digital | 32.2 | 31.7 | 1.5 | 101.0 | 97.5 | 3.6 | 132.7 |
| Service revenue | 11.7 | 12.3 | -5.1 | 37.4 | 40.7 | -8.3 | 54.1 |
| Adjusted total expenses | 64.2 | 66.6 | -3.6 | 208.2 | 222.9 | -6.6 | 297.9 |
| Adjusted EBITDA | 21.5 | 18.9 | 13.8 | 62.0 | 52.1 | 19.0 | 72.9 |
| EBITDA | 21.0 | 18.3 | 14.8 | 61.2 | 56.7 | 7.9 | 76.6 |
| Adjusted operating profit | 16.1 | 15.1 | 6.7 | 45.4 | 40.2 | 12.9 | 57.3 |
| % of revenue | 20.1 | 18.5 | 17.9 | 15.3 | 16.2 | ||
| Operating profit (loss) | 15.7 | 14.6 | 7.7 | 44.6 | 44.9 | -0.5 | 61.0 |
| % of revenue | 19.6 | 17.9 | 17.6 | 17.1 | 17.2 | ||
| Profit for the period | 13.1 | 12.2 | 7.0 | 35.6 | 36.4 | -2.3 | 47.9 |
| Earnings per share, EUR (basic) | 0.14 | 0.12 | 9.5 | 0.37 | 0.38 | -2.6 | 0.51 |
| Digital business revenue | 42.5 | 40.6 | 4.5 | 131.0 | 125.8 | 4.2 | 170.3 |
| Digital business, % of revenue | 52.9 | 49.8 | 51.7 | 47.9 | 48.0 |
Operating environment in 2019
European economies are expected to face slower growth in 2019. Uncertainty about the economic development in Germany has increased, which has been reflected in a decline in the demand for recruitment advertising in certain sectors in the Czech Republic and Slovakia.
The structural transformation of the media will continue; online advertising and content sales will grow, while the demand for print media will decline. The profitability of print media will be reduced by higher distribution and delivery costs as well as volume-linked costs. Data, analytics, machine learning and automation will become increasingly important, which calls for increasing technology investments. The areas of digital advertising that are expected to see the fastest growth are search engine, social media, mobile and video advertising as well as content marketing.
Outlook for 2019 (unchanged)
In 2019, Alma Media expects its full-year revenue to be at the previous year’s level and its adjusted operating profit to increase compared to 2018. The full-year revenue for 2018 was MEUR 354.6 and the adjusted operating profit was MEUR 57.3.
Kai Telanne, President and CEO:
Alma Media’s profitability developed positively in the third quarter. The adjusted operating profit was MEUR 16.1 and the operating profit margin was 20.1 per cent. Profitability was improved by higher digital revenue and effective cost control. Alma Media’s revenue declined by 1.6 per cent to MEUR 80.3. In the past quarter, the growth in digital content sales exceeded the decline in print media content sales for the first time at the Group level.
The Alma Markets segment maintained an excellent level of profitability in July–September: the operating profit margin was 42.7 per cent thanks to effective cost control. Revenue from the recruitment business continued to increase, although the rate of growth slowed down as the uncertain economic outlook had an impact on the recruitment market. The housing and automotive marketplace and systems business continued the strong performance seen during the first half of the year. The demand for added value and competitive tender services related to housing and cars increased in particular in July–September.
In Alma Talent, digital content revenue increased in the segment’s Finnish financial and professional media by 25.3 per cent in July–September. The latest renewal measures related to the digital subscription model were implemented in Uusi Suomi and Markkinointi&Mainonta during the review period. All of the segment’s media are now available for digital subscription and behind a paywall. The segment’s revenue in July–September was weighed down by a decline in recruitment advertising, automotive advertising, advertising related to IPOs and training services, all of which are sensitive to economic trends. In spite of the decline in revenue, the segment’s profitability improved thanks to tight cost control.
For Alma Consumer, the past quarter was challenging in terms of print media advertising sales, which saw the segment’s revenue and profitability decline year-on-year. Service revenue decreased due to a decline in the volume of external printing services. The sales of digital subscriptions, however, continued to see strong growth. Good progress has been made in content renewal and leveraging data to create a better digital reading and user experience.
Our adjusted operating profit has improved and our financial position has strengthened further. We have improved the profitability of our business through digital growth and product development projects as well as effective cost control. Alma Media is in an excellent position to take advantage of new opportunities for value creation and growth even during a period of slower growth in the operating environment.
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 media conference in English will be held on the same day at 11.00–12.00 EEST in the Alma House (address: Alvar Aallon katu 3 C, Helsinki). The report will be presented by President & CEO Kai Telanne and CFO Juha Nuutinen.
To participate in the conference in Alma House, kindly register beforehand by e-mail, kutsut@almamedia.fi.
A live webcast, during which written questions may be presented, can be followed via https://almamedia.videosync.fi/2019-q3-results. An on-demand version of the webcast will be available on the company's website later on the same day www.almamedia.fi/en/investors/reports-and-presentations/presentations.
The presentation material will be available on www.almamedia.fi/en/investors/reports-and-presentations/presentations at approximately 11.00 EEST.
Alma Media’s financial calendar 2020
- Financial Statement Bulletin for financial year 2019 on Friday, 14 February 2020 at approximately 8:00 EET
- Interim Report for January–March 2020 on Tuesday, 21 April 2020 at approximately 8:00 EET
- Interim Report for January–June 2020 on Friday, 17 July 2020 at approximately 8:00 EET
- Interim report for January–September 2020 on Thursday, 22 October 2020 at approximately 8:00 EET
Financial Statements, Report by the Board of Directors, Auditor's Report and Corporate Governance Statement for the 2019 financial year will be published on Wednesday, 4 March 2020.
The Annual General Meeting is planned to be held on Wednesday, 25 March 2020. 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 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 digitalisation, 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 1,900 professionals (excluding delivery employees), of which approximately 30% work outside Finland. Alma Media’s revenue in 2018 was EUR 354.6 million. Alma Media’s share is listed on NASDAQ Helsinki. Read more at www.almamedia.com.