Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Investor Day (May 2005)
68 slides from Alma Media Oyj's investor day presentation, May 19, 2005
Slide 1: Capital Markets Day
Capital Markets Day Kai Telanne President and CEO 19 May 2005
Slide 2: Transaction overview
Transaction overview Current Current situation situation Post-transaction Post-transaction Other Bonnier & Other Bonnier & shareholders Proventus shareholders Proventus 58.8% of capital 41.2% of capital 100% of capital 100% of capital 48.4% of votes New Alma Broadcasting Media Alpress MTV3 Other
Slide 3: Alma Media publishes 34 newspapers: combined circulation almost 600,000 copies
Alma Media publishes 34 newspapers: combined circulation almost 600,000 copies Net sales 283.6 MEUR*) EBIT 37 MEUR *) Personnel 2100 *) 2004 IFRS pro forma 3
Slide 4: Alma Media is strong number two newspaper publisher in the Finnish market
Alma Media is strong number two newspaper publisher in the Finnish market (2004 net sales MEUR) Newspaper sales SanomaWSOY **) New Alma Media *) Newspaper sales TS-yhtymä Otava- Kuvalehdet Edita Talentum Keskisuomalainen A-lehdet Ilkka Pohjois-Karjalan Kirjapaino Keski-Uusimaa Kaleva Etelä-Suomen Sa
Slide 5: Alma Media sales structure
Alma Media sales structure 14 % 47 % 39 % Media advertising Circulation sales Other sales 5
Slide 6: Market
Market <x = isa = <x = — <x
Slide 7: Media advertising and GNP 1989 – 2004, change %
Media advertising and GNP 1989 – 2004, change % 15 % 10 % 5% 0% -5 % -10 % 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 GNP Advertising Source: TNS Gallup Oy Adex 7
Slide 8: Newspapers have the biggest share of media advertising in Finland
Newspapers have the biggest share of media advertising in Finland 2% 3% Media advertising 2004 4% Newspapers 631.9 MEUR 20 % Magazines 185.4 MEUR Television 226.5 MEUR 55 % Radio 47.8 MEUR Internet 23.1 MEUR Others 34.8 MEUR 16 % TOTAL 1,149 MEUR Newspapers Magazines TV Radio Internet Others Source:
Slide 9: Media advertising, change 2001-2004
Media advertising, change 2001-2004 15 % 10 % Newspapers 5% Magazines Television 4/05 Radio 0% TOTAL -5 % -10 % 2001 2002 2003 2004 Source: TNS Gallup Oy Adex 9
Slide 10: Circulation development in Finnish newspapers: %-change 2000-2004
Circulation development in Finnish newspapers: %-change 2000-2004 4% 2% 0% 7-day newspapers -2 % Afternoon papers Total -4 % -6 % -8 % 2000 2001 2002 2003 2004 10
Slide 11: Biggest Finnish newspapers: circulation change % 2001-2004
Biggest Finnish newspapers: circulation change % 2001-2004 1 0.5 0 -0.5 Aamulehti -1 Helsingin Sanomat Turun Sanomat -1.5 -2 -2.5 -3 2001 2002 2003 2004 11
Slide 12: Management and Strategy Guidelines
Management and Strategy Guidelines
Slide 13: Management principles
Management principles Lean and flat Group organizational structure Line organization with P & L accountability of brands operating within targets and frames given by Group Entrepreneurship Group-wide steering of support functions Competitive edge by chaining of operations 8 world class c
Slide 14: Chaining of operations
Chaining of operations Competence centres Editorial Circulation Brand marketing Media marketing Distribution Printing operations IT and processes e-publishing Better quality publications more profitably Improved content through intense, systematic development of editorial resou
Slide 15: Strategy guideline: BUILD ON SUCCESSES
Strategy guideline: BUILD ON SUCCESSES Active role in Finnish newspaper publishing consolidation Successful chain strategy Strong balance sheet Only one series of shares and diversified ownership structure Expansion in online activities Marketplaces, databases, DM… Domestic and interna
Slide 16: Building growth based on established strengths
Building growth based on established strengths Leverage Transformation Entering new customer New segments or geographies Markets Protect & Extend Build Existing Protecting and improving Building new competencies market position to strengthen market position Extending products and services Existi
Slide 17: Building growth based on established strengths
Building growth based on established strengths Leverage Transformation M&A New city24.lv city24.lt Markets Protect & Extend Build Existing Product development New products Value Control Chaining Existing New Distinctive Competencies 17
Slide 18: Outlook 2005
Outlook 2005 Growth in media advertising is expected to continue although confidence in growth of b-to-b advertising has weakened Comparable group net sales higher than 2004 Comparable operating profit higher than 2004 18
Slide 19: Capital Markets Day – Chief Financial Officer
Capital Markets Day Teemu Kangas-Kärki Chief Financial Officer 19 May 2005
Slide 20: The new Alma Media in brief
The new Alma Media in brief New Alma Media Business Information Talentum Alpress Media Services Group (31%) Iltalehti Kauppalehti Classified electronic marketplaces Aamulehti Balance Consulting IT platforms Satakunnan Kansa Baltic News Service Northern newspapers Customer magazines Local newspapers
Slide 21: P/L statement Q105 (IFRS), MEUR
P/L statement Q105 (IFRS), MEUR 2005 2004 1-3 1-3 Net sales 115.3 110.4 Other operating income 0.5 1.2 Total expenses -107.6 -102.9 Operating profit (EBIT) 8.2 8.7 % of net sales 7.1 % 7.9 % Financial income/exp. -0.8 -1.1 Share of profits in assoc. com -0.5 -1.8 Profit before taxes 6.8 5.8 Earnings
Slide 22: EBIT by segment Q105 (IFRS), MEUR
EBIT by segment Q105 (IFRS), MEUR 2005 2004 1-3 1-3 Ongoing operations Alpress 7.5 7.1 Business Information Group 0.7 1.2 Media Services 0.1 0.1 Other -2.7 -0.3 Ongoing operations total 5.6 8.1 Discontinued operations 2.5 0.5 Adjustments and eliminations 0.1 0.1 Alma Media total 8.2 8.7 22
Slide 23: Cash flow from operating activities Q104-Q105
Cash flow from operating activities Q104-Q105 (IFRS), MEUR 30 20 10 0 -10 Q104 Q204 Q304 Q404 Q105 23
Slide 24: IFRS impact on the P/L statement
IFRS impact on the P/L statement In preparing its opening balance sheet Alma Media applied the IFRS 1 standard The following P/L items were mainly affected through the transition: 1. Goodwill is no longer amortized on a straight-line basis, instead goodwill is subject to annual tests for impairm
Slide 25: IFRS impact on the B/S
IFRS impact on the B/S 3. The most important item increasing the balance sheet total is caused by the recognition of finance leases as assets and liabilities Impact is 18.8 MEUR (31 Dec. 2004) 4. The most important changes in equity in the opening balance sheet at 1 Jan. 2004 arise from the treatm
Slide 26: Treatment of the restructuring costs (8.5 MEUR)
Treatment of the restructuring costs (8.5 MEUR) P & L (IFRS pro forma) B/S 2004 2005 Assets Net Sales 283.6 XXX -… EBIT excl. EOI 37.0 xx -Transaction costs 0.0 -1.2 General restructuring 1.2 MEUR Liabilities EBIT reported 37.0 xx Initial public offering 1.2 “ Equity -1.2 -Net interest -1.7 Signing
Slide 27: Capital Markets Day – Business Information Group
Capital Markets Day Juha Blomster, Hannu Leinonen, Päivi Nurmesniemi 19 May 2005
Slide 28: Kauppalehti Group
Kauppalehti Group (Net sales in 2004: 49 MEUR) Lehdentekijät (customer magazines) ¾ media products Talentum Oyj 31 % Baltic News Service ¾ corporate services 28
Slide 29: Business idea of Kauppalehti
Business idea of Kauppalehti Kauppalehti’s business idea is to acquire, edit, sell and distribute reliable, useful, interesting and topical business information Directed to business decision- makers and others interested in economic information Operational area: all Finland 29
Slide 30: Kauppalehti business news – Kauppalehti Presso
Kauppalehti business news – Kauppalehti Presso 30
Slide 31: Kauppalehti multiple media
Kauppalehti multiple media RADIO: 252,000 listeners/week TV: 780,000 PRINT: Kauppalehti, Optio and Extra viewers/broadcast cover 457,000 readers + Presso TELETEX: 275,000 regular viewers FLOW OF NEWS & INFO FLOW OF NEWS & INFO Super Desk INTERNET Kauppalehti Online, CORPORATE INTRANETS 100,000 visit
Slide 32: Aim at those with the bigger hats…
Aim at those with the bigger hats… 32
Slide 33: Kauppalehti Presso – the newspaper for the creative class
Kauppalehti Presso – the newspaper for the “creative class” Service class Working class 40% Agriculture 30% 20% CREATIVE CLASS 10% THE CORE OF THE CREATIVE CLASS 1900 1950 1980 2000 Source: Richard Florida, The Rise of the Creative Class 33
Slide 34: Target position
Target position 34
Slide 35: Networked Kauppalehti services can be utilized for multiple purposes
Networked Kauppalehti services can be utilized for multiple purposes Launches, Corporate image, product advertising brand Services for owners and analysts Getting customer Sales promotion and interest groups Recruiting Media relations committed and relations with the authorities Sales Marketing Comm
Slide 36: Customer portfolio by volume and number of services
Customer portfolio: Number of customers by volume in euros and by number of services used Number of services* Number of services* 200 1-2 3-5 6- total 200 1-2 3-5 6- total There are two goals in our 3 4 customer relationship management: 500- 1 3 4 500- 1 4 5 Volume, 1000€ 1. growth in B-to-B sector
Slide 37: Iltalehti: The Challenger with a Promising Track Record
Iltalehti The Challenger with a Promising Track Record Kari Kivelä, Sirpa Salin Capital Markets Day 19 May 2005
Slide 38: The market for Finnish afternoon papers 1994-2004
The market for Finnish afternoon papers 1994-2004: steady position in competitive daily newspaper market 400000 350000 353606 339106 343325 340977 333985 331141 331652 300000 315187 320591 319960 317550 Single copy sales 250000 Cover price increase 200000 150000 100000 50000 Total Market 0 1994 1995
Slide 39: Afternoon papers: vehicles of growth
Afternoon papers: vehicles of growth Afternoon paper concept redefines journalism. It combines private and public views, hard news and entertainment, serious issues and human interest. Afternoon papers have strong credibility as news media during major, serious news events. The papers have an im
Slide 40: Development of circulation 1994-2004
Development of circulation 1994-2004 400 000 350 000 353 606 Total 333 985 339 106 343 325 340 977 331 141 331 652 market 300 000 317 550 315 187 320 591 319 960 250 000 Circu latio n 220 926 219 634 218 931 214 610 218 829 Ilta- 200 000 215 629 212 533 214 589 204 820 198 693 201 281 Sanomat 150 00
Slide 41: Iltalehti: development of market share 1994-2004 (6-day)
Iltalehti: development of market share 1994-2004 6-Day Paper 100 80 67,9 67,4 66,9 66,1 64,8 60 Ilta- M arket S hare % 63,8 62,9 61,9 61,9 62,1 60,7 Sanomat 40 37,1 38,1 38,1 37,9 39,3 33,9 35,2 36,2 32,1 32,6 33,1 20 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Levikintarkastus
Slide 42: Iltalehti: development of market share 1994-2004 (weekend)
Iltalehti: development of market share 1994-2004 Weekend Paper 100 80 64,9 64,3 64,0 63,7 Ilta- M arket S hare % 60 62,8 61,4 59,9 60,1 60,4 60,8 59,9 Sanomat 40 40,1 39,9 39,6 39,2 40,1 37,2 36,3 38,6 35,7 36,0 35,1 20 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Levikintarkastu
Slide 43: Iltalehti success factors
Iltalehti success factors Continuous improvement as a news media Continuous improvement in credibility Increased ability to take bold, tough line on accidents, wrongdoings, crime, abuse, etc. More facts, more background and at the same time more emotion, more authentic stories from the peopl
Slide 44: Iltalehti success factors
Iltalehti success factors Continuous programme of supplements – Different target groups, different needs Weekend supplement Q2/04 TV supplement Q2/04 Sport supplement Q1/05 “More for less” advertising programme + Every day Mondays Tuesdays Saturdays 44
Slide 45: Next challenges and paths for success
Next challenges and paths for success GOAL: The number one afternoon paper and the leading media internet site in Finland by 2009 Product development on the internet: news as well as interactive services. The revenue model: advertising income and content sales Carefully selected focus areas with
Slide 46: Brand advertising in newspapers c. 287 MEUR in 2004
Brand advertising in newspapers c. 287 MEUR in 2004 - only 9% of this spent on afternoon papers Big Potential: Afternoon Papers 9% Î Cost-effective Î Media dominance Î Easy to buy Î Potential target group readers Newspapers 92 % • Individual exploration (RISC) • Economic priority (RISC) • Baby-boom
Slide 47: TNS Metrix – Visitors on site TOP10
TNS Metrix – Visitors on site TOP10 MTV3 1 204 932 Suomi24.fi 783 855 Iltalehti Online 604 459 Iltasanomat.fi 583 095 Jippii 458 548 Elisa.net 456 892 Helsingin Sanomat Verkkoliite 362 745 Eniro.fi 291 620 MBNet 255 527 Oikotie 234 882 Source: TNS Gallup, TNS Metrix, week 19/2005
Slide 48: Iltalehti Online unique visitors 2002-2004
ILTALEHTI ONLINE - Unique Visitors on site 2002-2004 Growth 50 % (January-April 2005 vs. 2004) 1 800 000 v. 2005 1 600 000 1 400 000 v. 2004 1 200 000 1 000 000 800 000 v. 2003 600 000 v. 2002 400 000 200 000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Nielsen NetRatings Site Census 48
Slide 49: Iltalehti Online advertising sales growing faster than total web advertising
Iltalehti Online Advertising Sales are growing faster than Total Web Advertising Market IL Online growth 57 % January-March 2005 Total Web advertising growth 30 % IL Online growth 74 % March 2005 Total web advertising growth 15 % Source: TNS Gallup / Total web advertising market 49
Slide 50: Iltalehti and supplements: the killer combination for advertisers
Iltalehti: the killer combination for advertisers ILTALEHTI OTHER and ILTALEHTI SUPPLEMENTS PRODUCTS • UrheiluMax (sports) • Daily Newsletter • TV-maailma (TV • Direct Email guide) • Iltalehti Light for • Viikonvaihde (weekend) Nokia Communicator ILTALEHTI • Mobile Paper for new MMS phones ONLINE •
Slide 51: Summary of Iltalehti Media Marketing
Summary of Iltalehti Media Marketing Q1: Growth begins Q2: Growth accelerates Iltalehti Online is growing faster than the market in general, and the aim is to speed up even more MAIN DEVELOPMENT TARGETS Active, customer-orientated and planned working with clients Systematic and goal-direct
Slide 52: Electronic Marketplaces - Growth with Increasing Cash Flow
Electronic Marketplaces - Growth with Increasing Cash Flow Raimo Mäkilä, Petri Pekki and Ismo Repka Capital Markets Day 19 May 2005
Slide 53: Alma Media's electronic marketplaces
Alma Media’s electronic marketplaces 53
Slide 54: Electronic marketplaces: vision, business idea, values
Skenaariot Electronic marketplaces: vision, business idea, values Every other house, used car, job, heavy equipment will be VISION purchased through our services in Finland To create a European-wide media for the real estate and heavy equipment markets BUSINES We offer media services in categories w
Slide 55: What is our business about?
55 n io ) at ly pp m e or op su nf Sc and Service ke ti (web services) d ar an Media M em (d What is our business about ? IT ns tio s) ) el nd nn bra lu ce ha d so rvi tic in ul - m er l se m a (m -of to tion p us a To C per (o
Slide 56: Electronic marketplaces: net sales, MEUR
Electronic marketplaces: net sales, MEUR 5 5 4,0 Annual 4 growth over 3,4 3,5 4 30 % 3,0 3 2,8 3 2,0 2,0 2,0 2,0 2 2 1 1 0 Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 56
Slide 57: Electronic marketplaces unique visitors in April 2005
Electronic marketplaces had 1.046,090 unique visitors in April 2005 600 000 500 000 Etuovi (home-buying) Autotalli (cars) Monster (recruiting) 400 000 Mascus (heavy equipment) 300 000 200 000 100 000 0 n n l l ov ov ct ct ar ar n g n g n ay ay r r b b b p p ec ec Ju Ju Ap Ap Ju Ju Au Au Ja Ja Ja Fe
Slide 58: Etuovi (home-buying) net sales (MEUR)
Etuovi (home-buying) net sales (MEUR) 3 2 0,9 0,7 0,9 0,6 0,7 0,5 0,5 0,6 0,5 1 1,6 1,6 1,5 1,4 1,4 1,1 1,1 1,1 1,1 0 Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Print Web 58
Slide 59: Leading Finnish real estate media
Leading Finnish real estate media Market share 22 % of total 40 MEUR market Print 15 % + Web 7 % Etuovi.com has more visitors than whole Oikotie.fi Etuovi.com print delivered biweekly to one million households 1,052 real estate customers (potential of 1,200) Next steps for growth price
Slide 60: Monster (recruiting) net sales (MEUR)
Monster (recruiting) net sales (MEUR) 1,0 0,8 0,8 0,6 0,6 0,4 0,4 0,4 0,4 0,3 0,2 0,3 0,2 0,2 0,0 Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 60
Slide 61: Monster is more than doubling its business this year
Monster is more than doubling its business this year Co-operation with world-leading online recruitment marketplace Monster Alma Media owns 75 % and Monster Ltd 25 % of shares In most recent three quarters Monster has taken 1% more market share Now share is 7 % of total 40 MEUR market Co-o
Slide 62: Autotalli.com (cars) net sales (MEUR)
Autotalli.com (cars) net sales (MEUR) 0,5 0,4 0,4 0,3 0,2 0,3 0,2 0,2 0,2 0,1 0,1 0,1 0,1 0,1 0,0 Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 62
Slide 63: Used-car media market is going to the web
Used-car media market is going to the web 8 % market share of total 20 MEUR media markets Dealers’ mindset is favourable to the web marketplaces and own website work 75 % of used car buyers use the web 21 % of all buyers consider that the newspaper is the most important information source,
Slide 64: Mascus (heavy equipment) net sales (MEUR)
Mascus (heavy equipment) net sales (MEUR) 0,5 0,4 0,4 0,4 0,4 0,4 0,3 0,2 0,2 0,1 0,0 Q104 Q204 Q304 Q404 Q105 64
Slide 65: European-wide marketplace until 2008
European-wide marketplace until 2008 Alma Media acquired Mascus from Partek at beginning of 2004 Mascus is used in 15 languages Own office in Sweden and UK 17,000 machines on site Expansion through licensing or acquisitions Hjemmet Mortensen is partner in Norway (market share 80 % of pri
Slide 66: Leading portal for real estate advertising (City24)
Leading portal for real estate advertising Established in Estonia in 2000 Market leader after 6 months Acquired by Alma Media 1/2005 More than 250 customers (real estate companies) 14,000 objects in database 300,000 page views daily Coming up: CiTY24.lv 05/05 CiTY24.ee magazine
Slide 67: Number of home transactions in Baltic countries (thousands)
Number of home transactions in Baltic countries (thousands) 120 100 80 60 40 20 0 2001 2002 2003 2004 2005F Estonia 40 40 46 49 Latvia 30 39 49 60 Lithuania 68 75 80 90 101 Source: State enterprise center of register 67
Slide 68: Success factors
Success factors Growing market for real estate advertising (market in general, especially web) Low adaptation costs, simple roll-out plan Co-operation with BNS (facilities, accounting, “street credibility”) lean organization Low cost structure – high EBIT margin (target 35-40%) New marke