Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Merger or Acquisition (February 2020)
24 slides from Alma Media Oyj's merger presentation, Feb 11, 2020
Slide 1: Sanoma acquires Alma Media’s regional news media business
Sanoma acquires Alma Media’s regional news media business Analyst and investor conference, 11 February 2020
Slide 2: Agenda
Agenda Introduction of the speakers & today’s agenda Kaisa Uurasmaa, Head of IR & CSR, Sanoma Acquisition and the strategic rationale for Sanoma Susan Duinhoven, CEO, Sanoma – Q&A for Sanoma Divestment and the strategic rationale for Alma Media Kai Telanne, CEO, Alma Media – Q&A for Alma Media
Slide 3: Sanoma acquires Alma Media’s regional news media business
Sanoma acquires Alma Media’s regional news media business and evaluates strategic options for its online classifieds’ business in Finland Analyst and investor conference, 11 February 2020 Susan Duinhoven, President & CEO
Slide 4: Highly synergistic acquisition supporting the growth of Sanoma’s digital news subscriptions in Finland
Highly synergistic acquisition supporting the growth of Sanoma’s digital news subscriptions in Finland Sanoma has signed an agreement to acquire Alma Media’s regional Supporting Media Sustainable news media business in Finland Finland’s long- future for with net sales of 94m€ and adjusted Growing te
Slide 5: Independence of the strong regional titles will continue after the acquisition
Independence of the strong regional titles, led by dedicated Editors-in-Chiefs, will continue after the acquisition The acquisition will include: Alma Media Kustannus Oy – Leading regional newspapers Aamulehti (founded in 1881) and Satakunnan Kansa (founded in 1873) – Thirteen smaller newspapers i
Slide 6: Alma Media’s regional news media business
Alma Media’s regional news media business Net sales of 94m€ and adjusted EBITDA of approx. 20m€ * in 2019 – Subscriptions are approx. 60% and advertising is approx. 40% of total net sales – Majority of print advertising sales comes from regional advertising – typically more stable than national pr
Slide 7: Recent learnings and successes at Helsingin Sanomat supporting combined digital growth
Recent learnings and successes at Helsingin Sanomat supporting combined digital growth Number of digital-only subscriptions at HS is now above 1-2% annual growth in HS subscription base 100k, equalling more than 27% of total subscription base – Total number of subscriptions grew for the third year
Slide 8: Key rationale: Increasing scale in subscription news benefits readers, advertisers, employees and shareholders
Key rationale: Increasing scale in subscription news benefits readers, advertisers, employees and shareholders Sustainable future for independent domestic journalism in Finland Increasing efficiency Sharing successes Keeping all news titles Bolt-on, synergistic acquisition Continued investments
Slide 9: News media market in Finland continues to be highly fragmented and diverse
News media market in Finland continues to be highly fragmented and diverse Total number of Market shares of two largest domestic news media news media titles players in some European countries published in Finland more than 100 % 160 80 % 60 % Acquired Alma Sanoma’s current Media regional news media
Slide 10: Attractive valuation for highly synergistic bolt-on acquisition
Attractive valuation for highly synergistic bolt-on acquisition Enterprise value of 115m€, including 42m€ of net Pro forma adjusted EBITDA debt and advances received (end of 2019) m€ EV / Pro forma adjusted EBITDA multiples – 5.8 incl. impact of the delivery outsourcing agreement * – 3.5 incl. n
Slide 11: Funding, transaction costs and closing
Funding, transaction costs and closing Sanoma will finance the acquisition through existing debt facilities Transaction and integration costs of approx. 6m€ to be booked as IACs in Sanoma Media Finland’s 2020 result The transaction is subject to customary closing conditions, including approval
Slide 12: Evaluating strategic options for Sanoma’s online classifieds’ business
Evaluating strategic options for Sanoma’s online classifieds’ business Sanoma has decided to evaluate strategic options for Net sales growth and profitability improvement Oikotie Ltd., a leading online classifieds player in m€, pro forma Finland – The leading Finnish online classifieds sites in re
Slide 13: Summary: Highly synergistic acquisition supporting the growth of digital news subscriptions in Finland
Summary: Highly synergistic acquisition supporting the growth of digital news subscriptions in Finland Supporting Media Finland’s long- Sustainable Growing term profitability future for our digital subscription target independent base (12-14% oper. EBIT margin excl. PPA) domestic journalism in Finla
Slide 14: Q&A
Q&A
Slide 15: Alma Media Divests Regional Media Digital Transformation Continues
Alma Media Divests Regional Media Digital Transformation Continues
Slide 16: Transaction Overview
Transaction Overview • Alma Media divests regional news media business and news printing operations to Sanoma Media Finland for enterprise value of EUR 115 million • The transaction comprises sale of shares in Alma Media Kustannus Oy and Alma Manu Oy Janakkalan Sanomat Merikarvia-lehti Jämsän Seutu
Slide 17: Illustrative Key Figures For The Business To Be Divested
Illustrative Key Figures For The Business To Be Divested EUR million, all figures rounded Preliminary, Reported unaudited 2018* FY-2019 Revenue 99 103 Pro forma adj. EBITDA 15 13 Pro forma adj. operating 10 8 profit Cash flow from operating 13 9 activities Non-current assets 57** 63 Net debt and adv
Slide 18: Divestment Rationale
Divestment Rationale Releases capital and management resources to focus in the digital businesses 1) Sharpening strategic 2) In Finland, focus on 3) Impact on financial 4) Responsible buyer focus national media brands position from the media industry and digital services • Concentration on the • Con
Slide 19: Alma Network’s Reach Remains Strong
Alma Network’s Reach Remains Strong • After the transaction, Alma's digital network, printed Iltalehti and Alma Talent media still reach 78 % (81 %), or 3.0 million of Finns every week* WEEKLY REACH of Finns aged 15–74 • Alma Media’s reach in print declines 78 % in Pirkanmaa and Satakunta area (3 M)
Slide 20: Improved Business Mix Accelerates Shareholder Returns
Improved Business Mix Accelerates Shareholder Returns Alma Media Alma Media* post transaction* Growth and margin profile improves as 51 % Share of Digital Revenue 67 % digital and international 26 36 businesses gain more Share of weight % International Revenue % A more detailed description on post t
Slide 21: Expanding our offering from media to related digital services
Expanding our offering from media to related digital services. Fulfilling the needs of our users’ everyday life as consumers and as professionals in business. 11.02.2020 21
Slide 22: Building A Top-Tier European Digital Media And Service Company
Building A Top-Tier European Digital Media And Service Company 1 2 3 Enabling higher profit Strengthening market Securing per user and driving positions in key areas transformation with operational gearing financial solidity 11/02/2020 11.02.2020 22 22
Slide 23: Guidance For 2020
Guidance For 2020 The divestment has an impact on Alma Media’s guidance for 2020. Alma Media will publish its outlook for 2020 in the Full- Year Result 2019 report on 14 February 2020. Alma Media will publish its guidance on the Group’s continuing businesses. 11.02.2020 23
Slide 24: Q&A
Q&A