Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Q4 2018 Earnings Presentation
29 slides from Alma Media Oyj's earnings presentation, February 2019
Slide 1: Alma Media Q4/2018 and FY/2018
Alma Media Q4/2018 and FY/2018 CEO Kai Telanne and CFO Juha Nuutinen
Slide 2: Agenda
Agenda Performance highlights Operating environment Business development by unit Financial position Strategy and outlook Q&A
Slide 3: Fourth consecutive year of profitable growth
Fourth consecutive year of profitable growth Q4: -5.3 % 400 70 Q4: +51.7 % 350 60 94 97 92 300 50 17 250 77 79 11 40 200 30 11 150 260 270 263 219 213 20 6 7 40 40 100 10 25 50 16 16 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Q1-Q3 Q4 Q1-Q3 Q4 Development of revenue 2014–2018 Development
Slide 4: Adjusted operating profit improved in all business units in Q4
Adjusted operating profit improved in all business units in Q4 Revenue (MEUR) Q4/2018 Adjusted operating profit (MEUR) Q4/2018 0.9 0.8 1.7 2.3 -1.1 -5.8 2.4 17.1 97.1 91.9 11.3 Q4 2017 Alma Alma Talent Alma Q4 2018 Q4 2017 Alma Alma Alma Group Q4 2018 Markets Consumer Markets Talent Consumer operati
Slide 5: Alma Markets as the growth engine throughout the year
Alma Markets as the growth engine throughout the year Revenue (MEUR) 2018 Adjusted operating profit (MEUR) 2018 6.1 0.9 -2.2 1.5 13.1 -4.3 -20.1 57.3 367.3 354.6 51.1 2017 Alma Alma Talent Alma 2018 2017 Alma Alma Alma Group 2018 Markets Consumer Markets Talent Consumer operations
Slide 6: Digital business is now almost 1/2 of revenue and 3/4 of adjusted operating profit
Digital business is now almost 1/2 of revenue and 3/4 of adjusted operating profit Share of digital business of Group revenue 35 % Digital business growth 30 29.7 30.4 48.0% 29.5 42.6% 25 37.8% 35.8% 23.8 32.0% 20 28.1% 19.7 24.3% 18.8 18.6 170 15 157 15.9 15.6 18.0% 133 15.7% 12.7 % 13.1% 104 10 84
Slide 7: Profitable expansion of international digital business
Profitable expansion of international digital business Revenue breakdown geographically 83 41% 73 89 25 % 37 37 45 EBIT 75 % 2018 262 261 245 279 282 265 59% Finland International Operations 2013 2014 2015 2016 2017 2018 Finland International Operations Not Allocated Croatia Baltics Slovakia2 % 3% 3
Slide 8: Operating environment
OPERATING ENVIRONMENT
Slide 9: The Finnish advertising market remained soft in 2018
The Finnish advertising market remained soft in 2018 20% OTHER FINNISH A-LEHDET MEDIA 2 % (2%) 15% COMPANIES 11 % (12%) 10% 5% ALMA MEDIA 30 % (30%) 0% Appr. -5% MEUR -10% 186 -15% SANOMA -20% 39 % (38%) MTV MEDIA 7 % (7%) -25% OTAVAMEDIA 11 % (11%) Advertising sales total, chg % Newspaper advertisi
Slide 10: Job and real estate advertising turned into red in Q4/2018
Job and real estate advertising turned into red in Q4/2018 Q1 2018 vs 2017 Q2 2018 vs 2017 Q3 2018 vs 2017 Q4 2018 vs 2017 -5,2 % Retail -3,8 % Retail -4,7 % Retail Retail -9,3 % Retail Food & bev. Food & bev. 9,8 % Food & bev. 9,7 % Food & bev. 4,0 % 12,1 % Motor v. Motor v. Motor v. 4,9 % Motor v.
Slide 11: GDP continues growing at a good rate in Eastern Central Europe
GDP continues growing at a good rate in Eastern Central Europe 2017 2018 2019 2020 6% 4,9 % 5% 4,5 % 4,1 % 4,0 % 4,1 % 3,8 % 4% 3,5 % 3,4 % 3,4 % 3,5 % 3,2 % 2,8 % 2,9 % 2,8 % 2,9 % 3% 2,6 % 2,5 % 2,6 % 2,2 % 1,9 % 2% 1% 0% -1% Estonia Latvia Lithuania Slovakia Finland 2017 2018 2019 2020 6% 4,6 % 4
Slide 12: Development by business segments
DEVELOPMENT BY BUSINESS SEGMENTS
Slide 13: Alma Markets Q4/2018: Operating profit improved particularly by domestic business growth
Alma Markets Q4/2018: Operating profit improved particularly by domestic business growth and lower marketing expenses • Revenue growth of the recruitment business slowed down compared to H1/2018 and in Q4/2018 was +5.9% year-on-year. • In Finland, organic growth of the domestic marketplaces business
Slide 14: Alma Talent Q4/2018: Divestments and restructuring improved profitability
Alma Talent Q4/2018: Divestments and restructuring improved profitability • Focus on core businesses and progress in transformation towards digital media and service business models. • Digital content revenue +13.7% and compensated for the decline in print media. Alma Talent had some 57,000 company
Slide 15: Alma Consumer Q4/2018: Successful digital sales and cost savings
Alma Consumer Q4/2018: Successful digital sales and cost savings improved profit performance • Revenue down on the Lapland newspaper business divestment. Also down by the single-copy sales of Iltalehti and the print media advertising sales. The decline in print advertising revenue slower than market
Slide 16: Financial position
FINANCIAL POSITION Juha Nuutinen, CFO
Slide 17: Long-term financial targets
Long-term financial targets - updated in December 2018 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% 12% 10% 28% 17% 9% 10% 7% 10% 18% 22% 63% 92% 78% 62% 69% 0% 0% 0% 2014 2015 2016 2017 2018 2014 20
Slide 18: Development of revenue and EBITDA
Development of revenue and EBITDA Organic revenue growth -0.3% in Q4/2018 and 0.2% in FY/2018. 364 367 369 364 360 73.0 353 357 359 355 325 338 66.9 67.4 67.2 66.9 67.8 306 62.7 292 59.9 53.3 48.9 46.2 42.0 37.4 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q4 15 Q1 1
Slide 19: DPS up by 46 %
DPS up by 46 % • Earnings per share in Q4 were EUR 0.12 (EUR 0.04). Adjusted items MEUR -0.9 (Q4/2017: MEUR -5.4). • The Board’s dividend proposal is EUR 0.35 (0.24) per share. 0,80 0,70 Cash flow fr.operat.activities per share EPS Dividend per share 0,60 . 0,50 EUR 0,40 0.68 0,30 0.63 0.51 0.51 0,2
Slide 20: Consistently strong cash flow
Consistently strong cash flow • Cash flow from operating activities in Q4/2018 was MEUR 19.1 (8.5). The increase was due to better result and a lower level of working capital. • Cash flow from investment activities was MEUR -0.6 (-14.7) in Q4/2018. 60 Operating cash flow and capital expenditure 50 4
Slide 21: Good profitability and strong cash flow: nearly net debt-free level achieved
Good profitability and strong cash flow: nearly net debt-free level achieved • At the end of December, the gearing ratio was 1.1 % and net debt stood at MEUR 2.0. • At the end of December, interest-bearing liabilities totalled MEUR 51.5 (61.3). • Equity ratio 57.5% Net debt, MEUR and gearing, % Equi
Slide 22: Strategy and outlook
STRATEGY AND OUTLOOK Kai Telanne, President and CEO
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 STRATEGIC INITIATIVES BUSINESS FOCUS VALUE Data-d
Slide 24: Strategic Alma data initiative
Strategic Alma data initiative - from storing data to analysis and activation technologies Customer Data Management Platform Subscriptions, demographics and Customer segments advanced data models Behaviours, location and seed information Ad Server Logs Websites and apps Sammio Marketing Automation P
Slide 25: Atmoskop.cz company culture reviews portal
The December TV ad said: There are easier ways how to learn about atmosphere in companies. Try Atmoskop.cz. • Biggest and fastest growing portal with company culture reviews by employees in the Czech Republic. • Launched in December 2017 • 60 000+ reviews on 16 000+ companies • 80 % of user say the
Slide 26: Alma Talent
Alma Talent • Alma Talent’s strategy is to make content easily accessible for customers across various channels. During Q4: • Digital content production was improved in several of Alma Talent’s media • Kauppalehti implemented a significant content renewal. • Redesign of the online bookstore for prof
Slide 27: Operating environment
Operating environment • Finland and Alma Media’s significant operating countries in Eastern Central Europe, such as the Czech Republic and Slovakia, are expected to see economic growth, but the rate of growth is predicted to slow down in 2019. • The structural transformation of the media will contin
Slide 28: Outlook
Outlook 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 • Report by the Board of Directors and Financial Statements 2018: 22.2.2019 • AGM: 15.3.2019 • Interim report for January–March 2019: 25.4.2019