Slide 1: ALMA MEDIA Q3/2016
ALMA MEDIA Q3/2016 Kai Telanne, President and CEO Juha Nuutinen, CFO 28 October 2016
Slide 2: Agenda
Agenda Highlights Market development Financial development Strategy and outlook Q &A
Slide 3: Alma Media's Q3/2016 in brief
Alma Media’s Q3/2016 in brief Business continued to develop favourably Among the Group’s businesses, Alma Markets and Alma News & Life saw strong growth in Q3 • Alma Media’s revenue increased by 18.9% to • Alma Markets: international recruitment services MEUR 80.9. and domestic marketplaces achieved
Slide 4: Market development in Finland
MARKET DEVELOPMENT IN FINLAND @AlmaMedia_IR
Slide 5: Overall the advertising market remains subdued
Overall the advertising market remains subdued Strong growth in online advertising 15% 10% Advertising sales change, 5% cumulative development 9/2015 - 9/2016 0% -5% -10% Advertising sales total, chg % Newspaper advertising, chg % Online advertising, chg % Source: TNS Ad Intelligence
Slide 6: Media advertising has increased particularly in the telecom, motor vehicle and retail sectors
Media advertising has increased particularly in the telecom, motor vehicle and retail sectors Total market, change from previous year Q4 2015 vs 2014 Q1 2016 vs 2015 Q2 2016 vs 2015 Q3 2016 vs 2015 Retail -3.2 % Retail 4.3 % Retail 8.4 % Retail 3.2 % Motor v. 3.8 % Motor v. 9.3 % Motor v. 8.4 % Moto
Slide 7: Alma Media's profit performance
ALMA MEDIA’S PROFIT PERFORMANCE
Slide 8: Revenue Q3: The positive development seen in H1 continued in Q3
Revenue Q3: The positive development seen in H1 continued in Q3 • Revenue grew by 18.9% to MEUR 80.9, particularly due to the positive sales development of Alma Markets and Alma News & Life. Alma Talent’s revenue grew as a result of the Talentum acquisition. Alma Regions had a difficult quarter in t
Slide 9: Adjusted operating profit Q3: Operating profit excluding non-recurring items improved
Adjusted operating profit Q3: Operating profit excluding non- recurring items improved • Adjusted operating profit grew by 20.1% to MEUR 9.1 and was 11.2% (11.1%) of revenue. The improment was attributable to the strong growth of Alma Markets and Alma News & Life. • The operating profit includes net
Slide 10: Digital business grew by 31.7 % in Q3/2016
Digital business grew by 31.7 % in Q3/2016 Accounted for 40% of the Group's revenue in Q3 37.6 % Digital business by segments 35.7 % Q3/2016 32.0 % 28.1 % 6.6 % 24.3 % 14.7 % 18.0 % 15.7 % 12.9 % 13.1 % 104 98 95 52.6 % 78 84 57 44 49 40 26.1 % Alma Regions Alma News & Life 2008 2009 2010 2011 2012
Slide 11: A significant share of Alma Media's result comes from international operations
A significant share of Alma Media’s result comes from international operations Revenue, MEUR Adjusted operating profit, MEUR 16 11 4 2 55 59 7 8 Employees Q3 2015 Q3 2016 Domestic International Foreign Operations Not Allocated Q3 2015 Q3 2016 (35%) Domestic International Foreign Operations Internati
Slide 12: Financial review
FINANCIAL REVIEW Juha Nuutinen, CFO
Slide 13: Long-term financial targets
Long-term financial targets Alma Media’s financial 2012 2013 2014 2015 1–9/2016 Target level targets Digital business growth 36.8% 8.4% 11.9% 8.7% 30.6% > 15% Return on Investment 13.8% 10.0% 9.8% 6.9% 10.4% > 15% (ROI), % Dividend payout ratio* 45% 50% 63% 92% n/a > 50% *Includes capital repayment
Slide 14: Revenue breakdown Q3/2016
Revenue breakdown Q3/2016 • Content revenue +18.8% (MEUR +4.8) • Advertising revenue +15.9% (MEUR +5.4) • Comparable content revenue -6.7% due to the • Online advertising sales +23.7% (MEUR +4.6). lower circulations of print media. • Advertising sales for print media +5.5% (MEUR +0.8). 18.9 % Segmen
Slide 15: Operating profit breakdown Q3/2016
Operating profit breakdown Q3/2016 • Adjusted operating profit was MEUR 9.1 (7.6), or 11.2% (11.1%) of revenue. • The operating profit includes net adjusted items of MEUR -0.2 (-1.6) related to restructuring. Segment operating profit breakdown and change 20.1 % Q3/2015–Q3/2016 28.4% 9.1 -3.0% 184.0%
Slide 16: Alma Markets Q3/2016: Continued strong development
Alma Markets Q3/2016: Continued strong development • Revenue grew by 16.7% to MEUR 17.2. The segment’s international operations continued to see strong growth. In Finland, revenue increased across all business areas: housing, automotive and recruitment. • Total revenue from the recruitment business
Slide 17: Alma Talent Q3/2016: Profitability unchanged year-on-year
Alma Talent Q3/2016: Profitability unchanged year-on-year • Revenue grew by 84.1% to MEUR 23.0. Comparable revenue declined by 6.5%, particularly due to advertising sales in Sweden and the Events business. • The integration of the Talentum businesses has progressed according to plan and the estimate
Slide 18: Alma News & Life Q3/2016: Result boosted by digital advertising
Alma News & Life Q3/2016: Result boosted by digital advertising • Revenue grew by 5.9% to MEUR 11.1. Adjusted operating profit tripled to MEUR 1.8. • The positive development of the digital business and declining single-copy sales saw the online business increase its share of the segment’s total rev
Slide 19: Alma Regions Q3/2016: A challenging quarter
Alma Regions Q3/2016: A challenging quarter • Revenue decreased by 3.4% to MEUR 30.5, adjusted operating profit down 20.9% to MEUR 2.0. • Measures to promote customers’ shift to digital are continuing. Online business accounted for 7.3% (3.3%) of the segment’s revenue. • Adjusted total expenses decl
Slide 20: Operating cash flow and capital expenditure
Operating cash flow and capital expenditure • Operating cash flow increased to MEUR 7.8 (5.8) due to the stronger result. • Cash flow from investing activities amounted to MEUR -5.6 (-4.4). Maintenance investments totalled MEUR -1.5. Acquisitions include the redemption of minority shares in Talentum
Slide 21: Interest-bearing liabilities decreased, equity ratio improved
Interest-bearing liabilities decreased, equity ratio improved • At the end of September, the gearing ratio was 51% and net debt stood at MEUR 67.7. • Interest-bearing liabilities totalled MEUR 89.0 at the end of September. Of the interest-bearing liabilities, non-current liabilities accounted for ME
Slide 22: EPS and equity per share
EPS and equity per share • EPS in Q3 increased to EUR 0.07 (EUR 0.04) due to the improved result. The comparison period also included adjusted items of MEUR -1.6. Earnings per share, EUR Shareholders’ equity per share, EUR 0.08 1.60 0.07 1.40 0.06 1.20 0.05 1.00 0.04 0.80 0.07 0.07 0.07 1.38 1.35 1.
Slide 23: Strategy and outlook
STRATEGY AND OUTLOOK Kai Telanne
Slide 24: Strategic development areas
Strategic development areas Multi-channel Marketing Resources and Digital services content solutions expertise We will build new capabilities, seek efficiency and accelerate growth in digital services and media.
Slide 25: Digital advertising distribution system
Digital advertising distribution system Marketing solutions • Investment in a comprehensive digital advertising distribution system, cooperation with AppNexus. • Modernises and enhances the efficiency of digital advertising functions with regard to management, optimisation, forecasting, yield analys
Slide 26: Finnish media companies' Automated Guaranteed market place
Finnish media companies’ Marketing Automated Guaranteed solutions market place • Alma and 9 other largest Finnish media companies launched on October 25 a shared Automated Guaranteed digital advertising market place. • It makes easier and faster for media agencies to plan and buy digital advertising
Slide 27: Uusi Suomi returns to Alma Media
Uusi Suomi returns to Alma Media Multi-channel content • Alma Media acquired the business of Uusi Suomi, a digital news and blog service that specialises in social dialogue. • Measured by the number of visitors, Uusi Suomi is one of the largest online services in Finland. Its average weekly reach, m
Slide 28: Additional services in recruitment
Additional services in recruitment Digital services • Pracezarohem.cz (Work Behind the Corner) , a mobile service which provides information on vacancies based on geographic proximity, has been well received after its launch in the Czech Republic and the service has seen rapid growth in its visitor
Slide 29: IL-TV: over 5 million plays per week
IL-TV: over 5 million plays per week Digital services Advertisement production also to product portfolio • IL-TV exceeded the milestone of five million plays per week during the review period, which is a significant amount even by international standards. • Launched in 2007, IL-TV is one of Finland’
Slide 30: Alma Talent's integration progressing as planned
Alma Talent’s integration Resources and expertise progressing as planned • The names of Alma Talent’s service businesses will be harmonised during the autumn. • The visual identity of all businesses will be made consistent with the Alma brand. • The strategy drafted for digital media products and se
Slide 31: Outlook
Outlook • Alma Media revised its outlook for 2016 in a release published on 14 September 2016. In 2016, the company expects its full-year revenue and adjusted operating profit to increase clearly from the 2015 level. Outlook for 2016 according to the release published on 14 September 2016: • The Fin
Slide 32: Thank you!
THANK YOU! Upcoming events in the investor calendar: • Q4 result and financial statements release 2016: 10 February 2017 • Annual General Meeting: 22 March 2017. • Financial Statements, Report by the Board of Directors, Auditor's Report and Corporate Governance Statement for the 2016 financial year: