Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Q2 2014 Earnings Presentation
42 slides from Alma Media Oyj's earnings presentation, Jul 18, 2014
Slide 1: Alma Media Q2/2014
Alma Media Q2/2014 Kai Telanne, President and CEO Juha Nuutinen, CFO 18 July 2014
Slide 2: Agenda
Agenda Main points Market development Financial development Strategy and outlook Q&A 2
Slide 3: Q2/2014 highlights
Q2/2014 highlights • The Group’s revenue in the second quarter declined slightly, but digital revenue increased by more than 13% year-on-year. Digital products and services accounted for 31.4% (27.5%) of Group revenue. • Operating profit excluding non-recurring items increased by 37.3% to MEUR 6.3.
Slide 4: Revenue Q2/2014
Revenue Q2/2014 • Revenue for the quarter decreased by 0.9% to Revenue, MEUR IFRS MEUR 75.7. -5.8% -0.9% 90 • Online business revenue increased by 13.4%. 80 • Digital products and services accounted for 9.7 9.4 70 31.4% (27.5%) of Group revenue in the second 60 quarter. 50 • Content revenue decrease
Slide 5: Operating profit Q2/2014
Operating profit Q2/2014 • Operating profit excluding non-recurring EBIT, MEUR items increased by 37.3% to MEUR 6.3. IFRS -40.1% • Operating profit was MEUR 6.1, or 8.1% of 10 +37.3% revenue. • The operating profit includes net non- 8 recurring items of MEUR -0.2. The non- 4.9 recurring items were r
Slide 6: Growth in digital business
Growth in digital business Segment’s share of the 90 35% Group’s digital revenue 32,0 % 80 28,1 % 30% 3.8 % 70 15.3 % 24,3 % 25% 60 50 18,0 % 20% 57.7 % 15,7 % 23.2 % 84 MEUR 40 13,1 % 78 15% 12,9 % 30 57 10% 44 49 48 20 40 5% Regional Media National Consumer Media 10 Financial Media and Business Se
Slide 7: Market development in Finland
Market development in Finland
Slide 8: Change in media advertising 6/2013–6/2014
Change in media advertising 6/2013–6/2014 30% 25% Change (%) YTD 6/14 vs. 6/13 20% 15% News- papers -8.3 10% 5% Magazines -14.8 0% TV -5.2 -5% -10% Radio +10.5 -15% Internet +13.8 -20% Total -3.6 -25% Advertising sales total, chg % Newspaper advertising, chg % Internet advertising, chg % Source: TNS
Slide 9: Growth in digital advertising
Growth in digital advertising YTD change from previous year, % 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2014 Source: TNS Media Intelligence 9
Slide 10: 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 2013 2014 Source: TNS Media Intelligence * Newspapers, local and free issue papers 10
Slide 11: Advertising declined across all industries
Advertising declined across all industries Advertising by branch Q1-Q2 / 2014 Total market, change from Q1-Q2 2013 Advertising in Q1-Q2 14 MEUR Retail -7.1 % Retail 109 Food & bev. -0.3 % Food & beverages 51 Motor v. -5.3 % Motor vehicles 47 Houses -0.7 % Houses and premises 24 Tourism -4.3 % Touris
Slide 12: The decline is sustained
The decline is sustained Advertising change by branch Total market, change from previous year P4 2014 vs 2013 P5 2014 vs 2013 P6 2014 vs 2013 Retail -0.1 % Retail -1.9 % Retail -4.8 % Food & bev. -3.8 % Food & bev. 8.1 % Food & bev. 2.0 % Motor v. -7.5 % Motor v. -10.6 % Motor v. 6.6 % Tourism -7.9
Slide 13: Financial review
Financial review Juha Nuutinen, CFO
Slide 14: Long-term financial targets
Long-term financial targets Alma 2011 2012 2013 2014 2014 Target Media’s YTD Q2 level financial targets Digital 16.3% 36.8% 8.4% 12.2% 13.4% > 15% business growth Return on 26.1% 13.8% 10.1% 8.6% 12.0% > 15% Investment (ROI), % Dividend 103% 45% 50% n/a n/a > 50% payout ratio* * Includes capital rep
Slide 15: Operating profit increased in the second quarter
Operating profit increased in the second quarter Revenue, MEUR Operating profit, MEUR IFRS -0.9% IFRS 90 -2.9% 12 -54.8% 80 10 +37.3% 70 76.3 77.3 75.7 71.7 72.7 8 0.0 60 4.9 7.8 6 50 6.4 6.3 4 4.6 40 0.7 30 2 2.5 20 0 -0.2 -2.0 10 -2 0 -4 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14
Slide 16: Content revenue fell; advertising revenue increased in Q2
Content revenue fell due to a declining trend in print media. Advertising revenue increased in Q2. Content revenue, MEUR Advertising revenue, MEUR 0.0 2.0 +2.1% 1.0 -0.5 0.8 0.0 -1.0 -1.2 -1.0 -1.5 -4.1% -2.0 -3.5% -2.0 -3.0 -2.2 -6.3% -3.0 -2.5 -4.0 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q2 13 Q3 13 Q4 13 Q
Slide 17: Digital Consumer Services Q2/2014
Digital Consumer Services Q2/2014 • Revenue increased by 4.9% to MEUR 14.0. • The revenue in the comparison period Revenue and operating profit, included MEUR 0.7 in revenue from the MEUR & % Mascus business that was sold in April 2013. Excluding non-recurring items 16.0 +4.9% 30% • Revenue was incr
Slide 18: Financial Media and Business Services Q2/2014
Financial Media and Business Services Q2/2014 • Revenue declined by 9.1% to MEUR 13.1. Revenue and operating profit, • Digital business accounted for 42.6% of MEUR & % revenue. Excluding non-recurring items -1.7% -9.1% • The divestment of the BNS business had an 17.0 30% effect of MEUR 1.1 on the de
Slide 19: National Consumer Media Q2/2014
National Consumer Media Q2/2014 • Content revenue grew by 3.2% to MEUR 12.7. • Online business accounted for 28.8% of the Revenue and operating profit, segment’s revenue. MEUR & % • Content revenue decreased by 6.0% due to a Excluding non-recurring items -4.4% 14.0 +3.2% 30% decline in Iltalehti’s c
Slide 20: Regional Media Q2/2014
Regional Media Q2/2014 • Revenue was on a par with the comparison period at MEUR 37.2. Revenue and operating profit, MEUR • Digital business accounted for 2.5% of revenue. Excluding non-recurring items -3.9% • Content revenue decreased by 2.9% due to 45.0 +0.0% 30% declining circulations. 40.0 • Adv
Slide 21: Cash flow from operating activities
Cash flow from operating activities 16,7 25.0 20.0 0.3 15.0 10.0 MEUR 5.0 0.3 3.0 0.0 -4.2 -5.0 -10.0 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 21
Slide 22: Cash flow and capital expenditure
Cash flow and capital expenditure IFRS 4 12.0 3 10.0 11.0 3.0 2 8.0 2.1 2.1 1 6.0 0 4.0 MEUR MEUR -1 2.0 0.7 -2 0.0 -1.7 -3 -2.0 -4.6 -4 -4.2 -4.0 -5 -6.0 Q2 13 Q2 14 Q2 13 Q2 14 From operating activities Gross investments Before financing activities Proceeds from sales of assets 22
Slide 23: Interest-bearing liabilities
Interest-bearing liabilities Net debt Q4/2011–Q2/2014 Net debt distribution 120 100 104.1 Q2/2014 103.5 97.6 80 Financial leasing 71.8 82.1 79.7 60 Financial loans 9.5 MEUR 40 42.9 Commercial 12.0 papers 20 Cash and cash -13.6 0 equivalents -20 Total 79.7 -40 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 1
Slide 24: Key indicators
Key indicators IFRS Equity ratio, % Gearing, % 45 140 40 120 38.9 119.3 35 32.9 100 30 25 80 82.1 20 60 15 40 10 20 5 0 0 Q2 13 Q2 14 Q2 13 Q2 14 24
Slide 25: Earnings per share and equity per share
Earnings per share and equity per share 0.12 1.2 1.12 0.10 1.09 0.10 1.0 0.42 0.39 0.08 0.8 0.06 0.06 0.06 0.6 0.04 0.06 0.4 0.02 0.70 0.70 0.04 0.2 0.00 0.00 -0.02 0.0 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Non-recurring items Retained earnings EPS wo non-recurring items Restricted equity 25
Slide 26: Balance sheet
Balance sheet MEUR Q2 2014 Q2 2013 Intangibles and goodwill 114.8 116.4 Tangibles 83.2 87.9 Associated companies 24.9 31.0 Inventory 1.1 0.7 Receivables 33.8 37.8 Cash 13.6 12.4 Assets 271.3 286.2 Equity 97.1 86.8 Reserves-obligatory 3.9 3.9 Pension liabilities 2.9 2.8 Ib debt 93.3 116.0 Non-Ib debt
Slide 27: Strategy and outlook
Strategy and outlook Kai Telanne
Slide 28: Focal points of strategy implementation in 2014
The focal points of the implementation of the strategy in 2014 Multi-channel Marketing Resources and Digital services content solutions expertise We will build new capacities, seek efficiency and accelerate growth in digital services and media. 28
Slide 29: Multi-channel content
Multi-channel content Multi-channel content
Slide 30: IL-TV launches new content concepts - IL-Doc documentary series
Multi-channel content IL-TV launches new content concepts - IL-Doc documentary series • Iltalehti IL-Doc is an IL-TV concept, with the themes of the episodes also covered in reports in the newspaper. • The topics of the documentary series will be touching or surprising. • Examples: • Area 51: a loca
Slide 31: Development in multi-channel content concepts
Multi-channel content Development in multi-channel content concepts • Iltalehti will have a strong multi- channel focus on the topical theme of the Finnish Continuation War (jatkosota). • The IL Jatkosota 1944 coverage includes: • A special paper • A daily series of articles in Iltalehti and at ilta
Slide 32: Lifestyle content moves ahead in digital media
Multi-channel content Lifestyle content moves ahead in digital media • The IL-Lifestyle content selection is growing in digital media. • Two tablet publications, Autot 2014 and Kesäkeittiö, published in the spring. • Digital Ilona to be launched in the second week of August.
Slide 33: Marketing solutions
Marketing solutions Marketing solutions
Slide 34: New content marketing solutions – Kauppalehti Studio
Advertising and marketing New content marketing solutions – solutions Kauppalehti Studio • Kauppalehti Studio is a turnkey solution for content marketing. The service is handled on the customer’s behalf in cooperation between Kauppalehti and Alma 360. • News-style content produced by Alma 360 or the
Slide 35: New content marketing solutions - Iltalehti Ilab
Advertising and marketing New content marketing solutions - solutions Iltalehti Ilab • Ilab is a turnkey approach to planning and implementing content cooperation campaigns according to customer needs. • The advertiser receives support to ensure the optimal utilisation of purchased, owned and earned
Slide 36: Digital services
Digital services Digital services
Slide 37: Alma Mediapartners strengthened its software expertise in automotive retail
Digital services Alma Mediapartners strengthened its software expertise in the automotive retail industry • Alma Media’s subsidiary Alma Mediapartners Oy purchased all of the shares in Alma Media’s associated company Alkali Oy. • Through Alkali, a comprehensive selection of applications will be adde
Slide 38: Resources and expertise
Resources and expertise Resources and expertise
Slide 39: Alma Manu applies for a licence for postal operations
Resources and expertise Alma Manu applies for a licence for postal operations • Alma Manu, the printing and distribution company of Alma Media, has submitted an application to the government for a licence for postal operations. • The licence is being applied for to provide a distribution service for
Slide 40: Progress in Lännen Media collaboration
Resources and expertise Progress in Lännen Media collaboration • The Lännen Media collaboration • Appointed personnel: agreement was finalised. • Editor-in-Chief: Matti Posio • The Lännen Media joint editorial team • Head of Newsroom: Veikko Valtonen will produce national content on • Producer for w
Slide 41: Outlook
Outlook 18 July 2014 Economic growth in Europe, and in particular Finland, is expected to remain weak also in the second half of 2014. In this market situation, Alma Media’s strong growth in digital service revenue does not yet fully offset the decline in the sales of print media. Alma Media expects
Slide 42: Thank you! Questions?
Thank you! Questions? Upcoming events in the investor calendar: - Q3 result 24 October 2014