Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — H1 2019 Earnings Presentation
29 slides from Alma Media Oyj's earnings presentation, 2019
Slide 1: Alma Media Q2/2019 and H1/2019
Alma Media Q2/2019 and H1/2019 CEO Kai Telanne and CFO Juha Nuutinen
Slide 2: Agenda
Agenda Highlights Operating environment Business development by segments Financial position Strategy and outlook Q&A
Slide 3: Alma Media Q2/2019
Alma Media Q2/2019 • Profitable growth continued in Q2 due to good performance of digital sales and cost reduction measures, operating margin was 16.9 %. • Revenue on par year-on-year, organic revenue growth -0.2%. -1.0% +15.5% 14.9 12.9 88.9 88.0 14.5 % 16.9 % Q2 2018 Q2 2019 Q2 2018 Q2 2019 Revenu
Slide 4: Earnings improved in Alma Markets and Alma Consumer
Earnings improved in Alma Markets and Alma Consumer 1.3 -1.9 0.0 Revenue 88.9 88.0 (MEUR) Q2 Q2 2018 Alma Markets Alma Talent Alma Consumer Q2 2019 1.2 1.6 1.6 1.6 -0.2 -0.2 -0.2 1.2 1.2 -0.6 -0.6 -0.6 Adjusted operating 14.9 14,9 14,9 profit (MEUR) Q2 12.9 12,9 12,9 Q2 2018 Alma Markets Alma Talent
Slide 5: Development in H1
Development in H1 2.5 -3.6 -6.1 Revenue 181.1 (MEUR) H1 173.0 H1 2018 Alma Markets Alma Talent Alma Consumer H1 2019 2.4 0.1 1.6 0.0 Adjusted operating 29.3 25.1 profit (MEUR) H1 H1 2018 Alma Markets Alma Talent Alma Group H1 2019 Consumer operations 5
Slide 6: Digital business amounts over 50 % of revenue
Digital business amounts over 50 % of revenue Share of digital business of Group revenue Digital business growth 51.2% 48.0% 35 % 42.6% 30.4% 29.5% 30 37.8% 35.8% 25 23.8% 32.0% 28.1% 19.7% 20 18.6% % 24.3% 15.9% 15.6% 170 157 15 18.0% 12.7% 133 15.7% 13.1% 104 9.8% 95 10 84 89 6.9% 78 5.8% 5.1% 49
Slide 7: Operating environment
OPERATING ENVIRONMENT
Slide 8: Softness of the domestic advertising market continued
Softness of the domestic advertising market continued 15% OTHER FINNISH A-LEHDET MEDIA 1 % (2%) COMPANIES 10% 11 % (11%) 5% ALMA MEDIA 29 % (30%) 0% Appr. MEUR -5% 99 -10% SANOMA MTV MEDIA 41 % (39%) 8 % (7%) -15% OTAVAMEDIA 10 % (11%) Advertising sales total, chg % Newspaper advertising, chg % Onli
Slide 9: Recruitment and housing advertising figures in the red territory in Q4/2018-Q2/2019
Recruitment and housing advertising figures in the red territory in Q4/2018-Q2/2019 Q3 2018 vs 2017 Q4 2018 vs 2017 Q1 2019 vs 2018 Q2 2019 vs 2018 Retail -5,2 % Retail -3,8 % Retail -3,3 % Retail 9,3 % Food & bev. 12,1 % Food & bev. 9,8 %Food & bev. -7,4 % Food & bev. 0,6 % Motor v. 4,9 % Motor v.
Slide 10: GDP growth decelerates slightly in Eastern European countries
GDP growth decelerates slightly in Eastern European countries GDP forecasts in Alma’s operating countries 2016-2020E 2018 2019 2020 4,8 % 5% 4,1 % 3,9 % 3,8 % 3,4 % 3,4 % 3,1 % 2,8 % 2,8 % 2,7 % 3% 2,4 % 2,4 % 2,3 % 1,6 % 1,2 % 1% -1% Estonia Latvia Lithuania Slovakia Finland 2018 2019 2020 4,9 % 5,
Slide 11: Development by business segments
DEVELOPMENT BY BUSINESS SEGMENTS
Slide 12: Alma Markets Q2/2019: Good margin development continued
Alma Markets Q2/2019: Good margin development continued • Segment revenue increased by 5.6% to MEUR 25.6. Recruitment business continued to grow but at a lower rate, especially in the Czech Republic, Finland and the Baltic countries. • Positive trend in the housing and car marketplaces business in F
Slide 13: Alma Talent Q2/2019: Advertising down, strong digital content sales in Finland continued
Alma Talent Q2/2019: Advertising down, strong digital content sales in Finland continued • Revenue down by 6.8 % to MEUR 26.1. Revenue weighed down by declining advertising and divested/discontinued operations. Finnish financial and professional media digital content sales +24 %, exceeding the decli
Slide 14: Alma Consumer Q2/2019: Strong digital revenue growth, cost savings lifted profitability
Alma Consumer Q2/2019: Strong digital revenue growth, cost savings lifted profitability • Revenue on par year-on-year at MEUR 37.2. Digital content sales and digital advertising revenue, particularly content marketing and mobile media, performed well in Q2/2019. Favorable development in visitor traf
Slide 15: Financial position
FINANCIAL POSITION
Slide 16: Long-term financial targets
Long-term financial targets Digital business growth (%) Return on investment Dividend payout ratio (%) 30% ROI (%) 25% 100% 25% 20% 80% 20% 15% 60% 15% 10% 40% 10% 5% 5% 20% 10% 28% 17% 9% 4% 7% 10% 18% 22% 19% 92% 78% 62% 69% 0% 0% 0% 2015 2016 2017 2018 H1/2019 2015 2016 2017 2018 H1/2019 2015 201
Slide 17: Digital transformation driving operational gearing: record high EBITDA
Digital transformation driving operational gearing: despite flat revenue development record high EBITDA* 364 367 369 364 360 353 357 359 355 80.1 338 347 347 76.5 325 72.9 66.9 67.4 67.2 66.9 67.8 62.7 59.9 MEUR MEUR 53.3 48.9 46.2 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1
Slide 18: EPS
EPS • Earnings per share in Q2 were EUR 0.12 (EUR 0.15). Adjusted items in Q2/2019 MEUR -0.3 (Q2/2018: MEUR 4.5). 0,16 0,14 0,12 0,10 . EUR 0,08 0.15 0.13 0.11 0,06 0.12 0.12 0.12 0.12 0.12 0,04 0,02 0.04 0,00 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19
Slide 19: Strong cash flow continued
Strong cash flow continued • Cash flow from operating activities in Q2/2019 was MEUR 14.6 (3.7). IFRS 16 leasing standard implementation increased operating cash flow by MEUR 1.8 • Cash flow from investment activities was MEUR -12.3 (2.6 ) in Q2/2019. Tukkuautot Oy was acquired in May 2019. Also add
Slide 20: Implementation of IFRS 16 standard increased net debt by MEUR 52.5
Implementation of IFRS 16 standard increased net debt by MEUR 52.5 • At the end of June gearing ratio was 32.6 % and net debt stood at MEUR 56.8 • Interest-bearing liabilities totalled MEUR 100.0 • Equity ratio 48.9 % Equity ratio, Net debt, MEUR and gearing, % Q2/2016–Q2/2019 Q2/2016–Q2/2019 70,0 5
Slide 21: IFRS 16 effects
IFRS 16 effects Effect of IFRS 16 on Alma Media Corporation’s consolidated financial statements 30 Jun 2019 30 Jun 2019 1 Jan 2019 1 Jan 2019 Balance sheet (MEUR) Assets Liabilities Assets Liabilities Leases for business premises and operating leases 51.1 51.5 53.7 53.7 Leases for IT equipment -1.2
Slide 22: Strategy and outlook
STRATEGY AND OUTLOOK
Slide 23: Driving more customer value as one Alma
Driving more customer value as one Alma PURPOSE ACCELERATING SUSTAINABLE GROWTH World-class Digital Value Agile Solid KEY marketing Transformation content worth -adding local financial ELEMENTS and communication paying services partner base expertise CROSS-BUSINESS STRATEGIC INITIATIVES BUSINESS FOC
Slide 24: Alma Themes – Cars, Housing and Work life
Alma cross-business strategic initiatives Alma Themes – Cars, Housing and Work life WHY? • To strengthen the market position in contents and services with high interest for consumers in terms of time and money consumed. • To be No 1 in selected themes in Finland: reach (audience) and market share (e
Slide 25: Outsourcing of Alma Manu's early morning delivery operations
Alma Consumer Outsourcing of Alma Manu’s early morning delivery operations • Alma Manu’s early morning delivery of Alma Media Kustannus newspapers in Pirkanmaa and Satakunta to be outsourced to Posti in 2020. • Approximately 800 Alma Manu delivery employees to be transferred to Posti. • 2018 revenue
Slide 26: Tukkuautot.fi - a marketplace for automotive industry professionals
Tukkuautot.fi - a marketplace for automotive industry professionals • Alma Mediapartners acquired tukkuautot.fi to strengthen automotive portfolio and increase sales synergies and functionalities between automotive system and media products. • In 2018, the company’s revenue was MEUR 0.95. • The annu
Slide 27: Operating environment
Operating environment • In Alma operating countries economic growth forecasted to continue, but to level off in 2019. Uncertainty about the economic development in Germany has increased and, due to its indirect effects, demand for recruitment advertising has declined in certain sectors in the Czech
Slide 28: Outlook (unchanged)
Outlook (unchanged) In 2019, Alma Media expects its full-year revenue to remain at the previous year’s level and its adjusted operating profit to increase compared to 2018. The full-year revenue for 2018 was MEUR 354.6 and the adjusted operating profit was MEUR 57.3.
Slide 29: Thank you! Questions?
THANK YOU! QUESTIONS? Upcoming events in the investor calendar Interim report for January–September 2019: 23.10.2019