Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — FY2013 Earnings Presentation
54 slides from Alma Media Oyj's earnings presentation, Feb 13, 2014
Slide 1: Alma Media Q4 and FY2013
Alma Media Q4 and FY2013 Kai Telanne, President and CEO Juha Nuutinen, CFO 13 February 2014
Slide 2: Agenda
Agenda Main points Market development Financial development Dividend proposal Strategy and outlook Q&A 2
Slide 3: Main points Q4 and FY2013
Main points Q4 and FY2013 • Accelerated by the weak economic situation, print media sales dropped as media consumption increasingly shifted to digital channels. Alma Media’s digital business growth and cost savings offset EBITDA decline. • Alma Media’s revenue from digital products and services incr
Slide 4: Revenue Q4 2013
Revenue Q4 2013 Revenue, MEUR • Revenue for the quarter declined by 6.5% IFRS to 77.3 MEUR. 90 +1,7% -6,5% • Revenue from digital products and 80 10,6 services was 21.9 MEUR, up 4.0%. 10,2 70 • Content revenue declined by 4.1%. 60 • Content revenue from digital channels 42,2 50 does not completely o
Slide 5: Revenue 2013
Revenue 2013 Revenue, MEUR • The Group’s full-year revenue fell by IFRS 6.2% and was 300.2 MEUR. 350 +1,2% -6,2% • Revenue from digital products and 300 37,1 services grew by 8.4%, primarily on the 37,6 strength of recruitment services outside 250 Finland. 200 160,8 • Content revenue declined by 5.7
Slide 6: Growth in digital business
Growth in digital business Segments’ share of Group total digital revenue 90 28,1 % 30% 16,8 % 80 24,3 % 25% 70 60 18,0 % 20% 50 15,7 % MEUR 23,2 % 12,9 % 15% 60,0 % 13,1 % 40 85 78 30 10% 57 49 20 44 40 5% Newspapers Kauppalehti Group Digital Consumer Services 10 0 0% 2008 2009 2010 2011 2012 2013
Slide 7: Operating profit Q4 2013
Operating profit Q4 2013 • Total expenses excluding non-recurring EBIT, MEUR items decreased by 4.4% to 71.1 MEUR. IFRS • Expenses decreased primarily due to -15,8% 10 restructuring measures carried out in -25,0% 2012 and cost-reduction measures 8 8,5 implemented in 2013. • Operating profit excludin
Slide 8: Operating profit 2013
Operating profit 2013 • Total expenses excluding non-recurring EBIT, MEUR items decreased by 3.6% to 276.7 MEUR. IFRS • Expenses decreased primarily due to -22,0% restructuring measures carried out in 2012 40 -27,8% and cost-reduction measures implemented 35 in 2013. 30 33,5 • Operating profit exclu
Slide 9: Market development in Finland
Market development in Finland
Slide 10: Change in media advertising Q4/2010–Q4/2013
Change in media advertising Q4/2010– Q4/2013 40% Change % 30% Q4/13 vs. Q4/12 20% News- papers -14.8 10% Magazines -10.0 0% TV -0.4 -10% Radio +3.4 -20% Internet +7.6 Total -6.6 -30% Advertising sales total, chg % Newspaper advertising, chg % Internet advertising, chg % Source: TNS Media Intelligenc
Slide 11: Advertising volume in printed newspapers remains low
Advertising volume in printed newspapers* remains low YTD change from previous year, % 0% -2% -4% -6% -8% -10% -12% -14% -16% -18% -20% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 2013 Source: TNS Media Intelligence * Newspapers, local and free issue papers 11
Slide 12: Slow growth in digital advertising
Slow growth in digital advertising YTD change from previous year, % 20% 15% 10% 5% 0% -5% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 2013 Source: TNS Media Intelligence 12
Slide 13: Advertising declined across industries
Advertising declined across industries Advertising by branch Q4/2013 Total market, change from Q4/2012 Advertising in Q4/13 MEUR Retail -9,0 % Retail 69 Motor v. 0,7 % Motor vehicles 22 Food & bev. 2,1 % Food & beverages 21 Entert -10,1 % Entertainment 11 Houses -15,2 % Houses and premises 10 Touris
Slide 14: The decline is sustained
The decline is sustained Advertising change by branch Total market, change from previous year Q2 2013 vs 2012 Q3 2013 vs 2012 Q4 2013 vs 2012 Retail -9,8 % Retail -7,6 % Retail -9,0 % Motor v. -12,0 % Motor v. -1,5 % Motor v. 0,7 % Food & bev. -11,7 % Food & bev. -2,6 % Food & bev. 2,1 % Entert 0,5
Slide 15: Fall in newspaper advertising is steeper
Fall in newspaper advertising is steeper Advertising change by branch Newspapers total*, change from previous year Q2 2013 vs 2012 Q3 2013 vs 2012 Q4 2013 vs 2012 Retail -18,5 % Retail -15,7 % Retail -14,3 % Motor v. -17,3 % Motor v. -5,8 % Motor v. -0,4 % Houses -16,5 % Houses -17,2 % Houses -18,7
Slide 16: Digital advertising has increased slightly
Digital advertising has increased slightly Advertising change by branch Internet, change from previous year Q2 2013 vs 2012 Q3 2013 vs 2012 Q4 2013 vs 2012 Retail 43,4 % Retail 21,2 % Retail 37,1 % Motor v. -9,0 % Motor v. -6,3 % Motor v. 3,2 % Houses 2,7 % Houses -2,1 % Houses -5,3 % Recru -16,5 %
Slide 17: Financial review
Financial review Juha Nuutinen, CFO
Slide 18: Long-term financial targets
Long-term financial targets Alma Media’s Target 2008 2009 2010 2011 2012 2013 financial level targets Digital > 15% 29.7% -10.0% 22.5% 16.3% 36.8% 8.4% business growth Return on > 15% 34.8% 28.3% 31.1% 26.1% 13.8% 10.1% Investment (ROI), % Dividend > 50% 59% 103% 159% 103% 45% 50%** payout ratio* *I
Slide 19: Decline in revenue continued in the fourth quarter
Decline in revenue continued in the fourth quarter Revenue, MEUR Operating profit, MEUR IFRS IFRS -6,5% 90 -4,6% 12 -12,6% 80 82,7 10 -25,0% 70 74,9 76,3 77,3 71,7 8 0,0 8,5 4,9 60 7,8 6 50 6,4 5,5 4 4,6 40 30 2 20 0 -0,9 0,0 -2,0 10 -2 0 -4 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q4 12 Q1 13 Q2 13 Q3 13 Q4 1
Slide 20: Content and advertising revenue fell due to a declining trend in print media
Content and advertising revenue fell due to a declining trend in print media IFRS Content revenue, MEUR Advertising revenue, MEUR 0,0 2,0 1,0 -5,5% -8,9% -0,5 0,0 -1,0 -1,0 -2,0 -1,5 -3,0 -5,2% -4,1% -2,0 -4,0 -2,5 -5,0 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 20
Slide 21: Newspapers Q4 2013
Newspapers Q4 2013 • Revenue declined by 9.3% to 47.7 MEUR. • Content revenue declined by 4.9%. Revenue and operating profit • Single-copy sales of Iltalehti’s print edition MEUR & % and the circulations of other newspapers Excluding non-recurring items -7,8% -9,3% 65,0 30% declined. • Advertising s
Slide 22: Newspapers full year 2013
Newspapers full year 2013 • Revenue declined by 10.2% to 185.6 MEUR. • Content revenue declined by 6.5%. Revenue and operating profit • The decline was primarily due to the MEUR & % decreasing single-copy sales of Iltalehti Excluding non-recurring items -5,4% -10,2% 250,0 30% and the declining circu
Slide 23: Kauppalehti Group Q4
Kauppalehti Group Q4 • Revenue declined by 4.2% to 15.4 MEUR. Revenue and operating profit, • Digital business accounted for 34.0% of MEUR & % revenue. Excluding non-recurring items -4,2% • Content revenue was 4.4 MEUR, on a par 17,0 -1,1% 30% with the previous year. 16,1 15,0 15,4 • Digital content
Slide 24: Kauppalehti Group full year 2013
Kauppalehti Group full year 2013 Revenue and operating profit, • Revenue declined by 3.7% to 56.8 MEUR. MEUR & % • Digital business accounted for 33.4% of Excluding non-recurring items revenue. -3,7% 70,0 +1,1% 30% • Content revenue declined by 1.1%. 60,0 64,0 • Digital content revenue grew by 22.1%
Slide 25: Digital consumer services Q4 2013
Digital consumer services Q4 2013 • Revenue declined by 1.2% to 13.8 Revenue and operating profit, MEUR. MEUR & % Excluding non-recurring items • The development of revenue was 16,0 30% +1,7% -1,2% affected by the devaluation of the Czech koruna and the decrease in the 14,0 revenue from operations i
Slide 26: Digital consumer services full year 2013
Digital consumer services full year 2013 • Content revenue grew by 2.6% to 55.9 Revenue and operating profit, MEUR. MEUR & % Excluding non-recurring items • Revenue from operations outside Finland 60,0 +34,3% +2,6% 30% was 30.0 MEUR. 54,5 55,9 • Revenue from the recruitment business 50,0 25% grew wi
Slide 27: Other operations full year 2013
Other operations full year 2013 • Revenue was 85.4 MEUR, of which external revenue accounted for 7.1 (6.3) Revenue and operating profit, MEUR. MEUR Excluding non-recurring items • External revenue grew as a result of increased sales of printing services 100,0 +6,7% +0,7% outside the Group. 80,0 84,8
Slide 28: Cash flow from operating activities
Cash flow from operating activities 25,0 20,0 20,3 15,0 10,0 MEUR 11,3 8,7 5,0 0,0 -5,0 -10,0 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Tax return and final withholding tax 28
Slide 29: Cash flow and capital expenditure
Cash flow and capital expenditure IFRS 15 5,0 10 11,3 0,0 0,5 -1,2 0,0 8,7 7,5 -5,0 5 -10,0 MEUR MEUR 0 -15,0 -5 -20,0 -25,1 -10 -25,0 -13,3 -15 -30,0 Q4 12 Q4 13 Q4 12 Q4 13 From operating activities Gross investments Before financing activities Proceeds from sales of assets 29
Slide 30: Interest-bearing liabilities
Interest-bearing liabilities Net debt Q2/2011-Q4/2013 Net debt distribution 120 100 103,5 104,1 101,4 97,6 Q4/2013 80 60 Financial leasing 74.9 62,3 MEUR 40 Commercial 35.0 20 papers 0 Cash and cash -12.3 equivalents -20 -32,3 -40 Total 97.6 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 1
Slide 31: Key indicators
Key indicators IFRS Equity ratio, % Gearing, % 40 120 35 36,5 34,9 100 108,0 30 80 25 74,1 20 60 15 40 10 20 5 0 0 2012 2013 2012 2013 31
Slide 32: Key indicators
Key indicators IFRS Return on Equity, % Return on Investment, % 25 15 13 13,8 20 19,3 11 18,3 15 9 10,1 7 10 5 5 3 0 1 -1 -5 -3 -10 -5 2012 2013 2012 2013 32
Slide 33: Earnings per share and equity per share
Earnings per share and equity per share 0,50 1,4 1,17 0,22 0,40 0,20 1,2 1,08 0,30 1,0 0,46 0,37 0,20 0,38 0,8 0,10 0,23 0,6 0,00 0,4 -0,03 0,70 0,70 -0,16 0,2 -0,10 -0,20 0,0 2012 2013 2012 2013 Non-recurring items Retained earnings EPS wo non-recurring items Restricted equity 33
Slide 34: Balance sheet
Balance sheet (consolidated balance sheet and the parent company’s balance sheet) MEUR Q4 2013 Q4 2012 Parent company BS MEUR, FAS Q4 2013 Q4 2012 Intangibles and goodwill 112,9 118,2 Intangibles and goodwill 4,0 3,0 Tangibles 86,3 41,3 Tangibles 2,8 2,8 Associated companies 25,5 31,3 Investments in
Slide 35: Dividend proposal
Dividend proposal The proposal by the Board of Directors to the AGM March 20, 2014. On 31 December 2013, the Group’s parent company had distributable funds totalling EUR 23,905,611 (8,014,054). No essential changes in the company’s financial standing have taken place after the end of the financial y
Slide 36: Strategy and outlook
Strategy and outlook Kai Telanne
Slide 37: Alma Media's strategic themes for 2013–2015
Alma Media’s strategic themes for 2013–2015 1. DEVELOPMENT OF 2. GROWING DIGITAL 3. AGILE GROUP PUBLISHING OPERATIONS SERVICES Increasing and developing Ensuring the cash flows of the digital service business. Increasing strategic multimedia publishing and flexibility and efficiency. improving profi
Slide 38: Strategy implementation Q4 2013
Strategy implementation Q4 2013 NEW LIFE OF PRINT GROWTH IN DIGITAL SERVICES AGILE GROUP IL-Media launched Fiidi.fi. Market launch of Almascope, a The Google Analytics Premium Kauppalehti engaged in strong service for audience-targeted system was implemented. development of mobile channels, digital
Slide 39: New life of print
LIVING INFORMATION
Slide 40: Good progress in the Aamulehti renewal project
Good progress in the Aamulehti renewal project Aamulehti’s newspaper renewal • Aamulehti will shift to the tabloid format 1) Aamulehti on April 1, 2014 2) Two daily sections • Aamulehti’s news concept, visual design 3) ”Super Sunday”, the Aamulehti Sunday and section structure will be renewed to edi
Slide 41: Alma Regional Media's Premium - paid content on online services
Alma Regional Media’s Premium - paid content on online services • Premium model implemented at Aamulehti in January 2014. • The aim is to achieve significant additional income from digital content sales and offsetting the decrease in print circulation within a couple of years. • The project involved
Slide 42: Aamulehti's mobile renewal
Aamulehti’s mobile renewal • Aamulehti launched its renewed mobile site in December 2013. • The aim is to increase the appeal of the mobile site and thereby increase user numbers and media sales. • Based on the experiences gained, renewed mobile sites will be launched for Lapin Kansa, Pohjolan Sanom
Slide 43: Kauppalehti engaged in strong development of mobile channels
Kauppalehti engaged in strong development of mobile channels • Pre-installed application on Nokia 1020 and 1520 phones • Campaign partnership on the 2520 tablet device • Launch of an application designed for Windows 8 tablet devices.
Slide 44: IL-Media launches fiidi.fi
IL-Media launches fiidi.fi • IL-Media is the first provider to offer Finnish users a service in which the publication decision is based on the willingness of the community to share content. • Fiidi includes the funniest, most touching and most shareable online content in a single service. • Many opp
Slide 45: Growth in digital services
Le Growth in digital services LIVING INFORMATION
Slide 46: The new mobile applications of Telkku.com
The new mobile applications of Telkku.com • New applications for iPhone, Android and Windows Phone in December 2013. • The application includes programme details for over 100 channels. • Subscribers to the paid recorder service can also record and later watch their favourite shows anywhere, anytime.
Slide 47: Etuovi.com begins beta testing a responsive mobile site
Etuovi.com begins beta testing a responsive mobile site +60% growth in browser hits in 2014 compared to 2013 47
Slide 48: Almascope: Making use of Big Data
Almascope: Making use of Big Data • Almascope is a marketing service launched in October 2013. • Guaranteed number of advertising displays for audience-targeted campaigns in the desired time period and in a high-quality media environment • The advertiser reaches precisely the right target audience a
Slide 49: Tau-online launched a virtual recruitment fair
Tau-online launched a virtual recruitment fair 49
Slide 50: New from Monster.fi – Teamio Recruit
New from Monster.fi – Teamio Recruit • TEAMIO is an easy-to-use recruitment system developed by the Czech-based LMC. • The product has been developed and marketed for over six years. • Monster began to offer TEAMIO in Finland in May 2013. • The selling of the new product began in earnest in the four
Slide 51: Alma Media expanded its partnership with Monster
Alma Media expanded its partnership with Monster Alma Media’s career services + monster.cz (Czech Republic) were expanded with three new portals. + monster.hu (Hungary) + monsterpolska.pl (Poland) & Monster became a minority shareholder in Alma Media’s recruitment portals with a 15% share. The arran
Slide 52: Updated strategy
Updated strategy FOUR FOCUS AREAS • Alma Media updated its strategy in December 2013. • We will build new capacities, seek efficiency and accelerate growth in digital services and media. • Target for 2020: 50% digital revenue. 13.2.2014
Slide 53: Future outlook February 2014
Future outlook 13 February 2014 Economic growth is estimated to pick up gradually in Europe but remain weak during the first half of 2014 in Finland. The decline in media advertising is expected to slow down during the first half of the year. Alma Media expects the revenue of the first half of 2014
Slide 54: Thank you! Questions?
Thank you! Questions? Upcoming events in the investor calendar: - Annual General Meeting 20 March 2014 - Q1 result 29 April 2014