Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Q2 2020 Earnings Presentation
25 slides from Alma Media Oyj's earnings presentation, 2020
Slide 1: Q2 2020: COVID-19 impacted significantly revenue, profitability more resilient due to cost savings
Q2 2020: COVID-19 impacted significantly revenue, profitability more resilient due to cost savings CEO Kai Telanne and CFO Juha Nuutinen
Slide 2: Highlights of Alma Media Q2 2020
Highlights of Alma Media Q2 2020 • In April–June, COVID-19 pandemic impacted significantly revenue of continuing operations, profitability more resilient due to cost savings. • Alma Media is well prepared for current uncertainty and future recovery with a very solid financial position: at the end of
Slide 3: COVID-19 affected Alma Media in Q2
COVID-19 affected Alma Media in Q2 • Focus on securing health and safety of employees and business continuity • Remote work encouraged whenever possible. • Overall rapid cost reductions exceeded previous estimate • Contraction of marketing investments and personnel costs, reduction of external servi
Slide 4: Clear decline in revenue, profitability more resilient due to cost savings
Clear decline in revenue, profitability more resilient due to cost savings -6.2 -3.8 -2.5 Revenue (MEUR) Q2 64.1 52.5 Q2 2019 Alma Markets Alma Talent Alma Consumer Q2 2020 -2.7 -0.5 2.6 -1.5 Adjusted operating 11.9 profit (MEUR) Q2 9.8 Q2 2019 Alma Markets Alma Talent Alma Group Q2 2020 Consumer op
Slide 5: Development of digital business
Development of digital business In continuing operations, digital business accounted for 67.5% of revenue (-17.7 %) in Q2/2020. Share of digital business of Group revenue Digital business growth* 57.3 % % 51.6 % 25 48.0 % 19.7 % 20 18.6 % 42.6 % 15.9 % 15.6 % 37.8 % 15 12.7 % 9.8 % 35.8 % 10 6.9 % 5
Slide 6: Development by business segments
DEVELOPMENT BY BUSINESS SEGMENTS
Slide 7: Alma Markets Q2: Significant cost cuts softened the decline in profitability
Alma Markets Q2: Significant cost cuts softened the decline in profitability Revenue MEUR and adjusted Share of segment revenue by country • Clear decline in revenue by -24.2% to operating margin % in Q2/2020 (revenue change rates in MEUR 19.4 and profitability by -28.0% brackets) to MEUR 7.0. 42.7
Slide 8: Alma Talent Q2: Diversified sales mix provided resilience as advertising decreased
Alma Talent Q2: Diversified sales mix provided resilience as advertising decreased • Revenue -14.4 % to MEUR 22.4, decrease mainly in advertising sales, Revenue MEUR and adjusted Share of segment revenue by country but also in education and events operating margin % in Q2/2020 (revenue change rates
Slide 9: Alma Consumer Q2: Lower operating profit due to sharp decline in advertising
Alma Consumer Q2: Lower operating profit due to sharp decline in advertising • Revenue -20.2% to MEUR 9.8. Advertising fell -31.8% and has not significantly Revenue MEUR and adjusted rebounded as the market situation remains operating margin % challenging. 16.5 % • Content sales -13.3%, the rate of
Slide 10: Financial position
FINANCIAL POSITION
Slide 11: Strong financial position
Strong financial position • At the end of June, gearing was -23.0%. Net cash of MEUR 57.4. • Interest-bearing liabilities totalled MEUR 40.3, consisting entirely of lease liabilities. • Equity ratio 71.0 % Net debt, MEUR and gearing, %; Q2/2017–Q2/2020 Equity ratio; Q1/2017–Q1/2020 55.1 56.8 71.0 %
Slide 12: Cash flow burdened by COVID-19
Cash flow* burdened by COVID-19 Operating cash flow and capital expenditure • Cash flow from operating activities in 80 Q2/2020 was MEUR 3.2 (14.6), due to • weaker result 70 Net cash provided by • decrease in customer invoicing in 60 operat. activities recruitment business 50 • discontinuing operat
Slide 13: Case LMC: revenue & invoicing recognition
Case LMC: revenue & invoicing recognition 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 2019 2020 Revenue Invoicing 13
Slide 14: EPS
EPS 0.80 0.76 • Earnings per share from 0.04 Continuing operations in 0.70 Q2/20202 were EUR 0.04 (EUR 0.60 0.09). Adjusted items in Q2/2020 MEUR -2.9 (MEUR -0.1). 0.50 EUR 0.40 • Earnings per share including discontinued operations EUR 0.76 0.30 0.21 (0.12), includes also capital gain of 0.20 0.15
Slide 15: Long-term financial targets
Long-term financial targets* Financial target Long-term target level Performance H1/2020 Digital business growth, %* >12% -8% ROI, %** >17% 66% Dividend payout ratio >50% Digital business growth Return on investment Dividend payout ratio (%) (%) ROI (%) 30% 70% 100% 25% 60% 80% 20% 50% 15% 60% 40% 1
Slide 16: Operating environment
OPERATING ENVIRONMENT
Slide 17: European Commission: A deep and uneven recession and uncertain recovery
European Commission: A deep and uneven recession and uncertain recovery GDP forecasts in Alma’s operating countries 2019-2021E 2019 2020 2021 Finland Czech Republic Slovakia Croatia Estonia 10% 7.4 % 7.5 % 6.2 % 4.5 % 4.3 % 5% 2.8 % 2.6 % 2.3 % 2.9 % 1.1 % 0% -5% -6.3 % -10% -7.8 % -7.7 % -9.0 % -10
Slide 18: Finnish Advertising Market: Massive impact of COVID-19
Finnish Advertising Market: Massive impact of COVID-19 Monthly change in media advertising 6/2019–6/2020 Online advertising by Finnish media companies H1/2020 (H1/2019) Source: Kantar TNS Source: Kantar TNS OTHER FINNISH MEDIA A-LEHDET 20% COMPANIES 1 % (1%) 9% (11%) 10% 0% ALMA MEDIA -10% 29% (29%)
Slide 19: In Q2 all sectors contracted heavily
In Q2 all sectors contracted heavily Q3 2019 vs 2018 Q4 2019 vs 2018 Q1 2020 vs 2019 Q2 2020 vs 2019 Retail -13.4 % Retail -32.8 % Retail -1.2 % Retail -1.2 % Motor v. Motor v. 3.7 % Motor v. -46.8 % Motor v. 0.0 % 1.9 % Food & bev. -4.2 % Food & bev. -10.5 % Food & Bev 8.4 % Food & Bev -41.6 % Ente
Slide 20: Strategy and outlook
STRATEGY AND OUTLOOK
Slide 21: Q2 in brief
Q2 in brief • The sale of the regional news media business and printing operations to Sanoma was completed at the end of April. • The shift of the strategic focus to digital business continued in Sweden: • Alma Talent sold the share capital of Alma Talent Ab to New Technology Media Group Ab in June.
Slide 22: Outlook for 2020
Outlook for 2020 • The uncertainty in operating environment is continuing and visibility remains weak. • Alma Media expects its full-year revenue and adjusted operating profit from continuing operations in 2020 to decline significantly from the 2019 level. • In 2019, the full-year revenue of the con
Slide 23: Strategic focus on digital
Strategic focus on digital Growing Leveraging Developing national marketplace professional media multi-channel business and b2b-services consumer media and services
Slide 24: Strategic fundaments for driving growth and value
Strategic fundaments for driving growth and value 1 2 3 Monetizing audiences Exploiting data Solid financial base – of digital content and and investing in asset-light and scalable services technological business model capabilities Maintaining and building market leader position in chosen verticals
Slide 25: Thank you! Questions?
THANK YOU! QUESTIONS? Upcoming events in the investor calendar: • Interim report for January–September 2020 on Thursday, 22 October 2020 25