Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Investor Presentation (October 2015)
63 slides from Alma Media Oyj's investor presentation, Oct 28, 2015
Slide 1: Alma Media - Adding service into media business
ALMA MEDIA - ADDING SERVICE INTO MEDIA BUSINESS Alma Media Corporation Investor Relations information package October 2015 28.10.2015 1
Slide 2: Introduction to Alma Media
INTRODUCTION TO ALMA MEDIA Structure of business, geographies, ownership 28.10.2015 2
Slide 3: This is Alma Media
This is Alma Media 38,8 • A media and digital services group operating Content revenue, print in 10 European countries 104,6 Content revenue, digital 295 Revenue 2014 • 1,700 full-time employees working for some of Ad revenue, print 72,7 the leading media and services brands Ad revenue, digital MEUR
Slide 4: Alma Media as an investment
Alma Media as an investment Successful transformation from print based to service based media business 1 2 3 Digital strategy Strong brands Growth and value Alma Media has invested Leading media and Long-term financial in digital media and service brands across targets include ambitious services sin
Slide 5: Alma Media's reporting segments
1. DIGITAL STRATEGY Alma Media’s reporting segments Financial Media And DIGITAL CONSUMERS Business Services FINANCIAL MEDIA AND REVENUE 2014 18% SERVICES BUSINESS SERVICES 295 MEUR 19% National Consumer Digital 16% REVENUE 55.8 REVENUE 56.8 Media Consumer Services EBITDA 14.8 (26.7 %) EBITDA 7.1 (13
Slide 6: Sizeable and growing digital business
1. DIGITAL STRATEGY Sizeable and growing digital business Digital revenue and it’s share of total sales 100 40 80 30 60 20 40 10 20 0 0 MEUR 2010 2011 2012 2013 2014 % 28.10.2015 6
Slide 7: Top-of-mind brands across Europe
2. STRONG BRANDS Top-of-mind brands across Europe Wide media and service offering Alma Media’s strong brands offer both local and national media content in Finland, and various online services across in Finland and in Eastern Central Europe. Operations outside of Finland are focused on digital recru
Slide 8: Long-term financial targets
3. GROWTH AND VALUE Long-term financial targets Balancing investments, debt repayment and shareholder return Digital business growth pa. 15 % Alma Media’s long-term financial targets reflect the focus areas of the company’s strategy and business development. Long-term financial targets will be reach
Slide 9: Ownership structure
Ownership structure Shareholders by sector Largest shareholders (September 30th 2015) 1. Ilkka-Yhtymä Oyj 29.79 % 2. Mariatorp Oy 16.03 % 3. Kaleva Kustannus Oy 7.95 % 4. Varma 7.06 % 5. C.V.Åkerlundin säätiö 4.53 % 6. Elo 2.45 % 7. Kaleva 2.08 % 8. Herttaässä Oy Ab 1.74 % General Government Nominee
Slide 10: Markets
MARKETS Revenue sources and the development of main markets 28.10.2015 10
Slide 11: Operations across Europe
Operations across Europe • Based in Finland, Alma Media has operations in 10 countries across Northern and Eastern Central Europe. • Operations outside Finland focused on career services. In Sweden Alma Media has an office space marketplace. Personnel 2014, % Revenue 2014, MEUR EBIT 2014, MEUR 20% 4
Slide 12: Main geographical markets
Main geographical markets Finland • Population 5.4 million • GDP growth rate 0-1 % (2015E) • About 97 % have access to internet • Alma: online and print media, digital services Estonia, Latvia and Lithuania • Population more than 7 million • GDP growth rate 2 to 3 % (2015E) • About 70 % have access
Slide 13: Markets: Development in Finland
MARKETS: DEVELOPMENT IN FINLAND 28.10.2015 13
Slide 14: Finnish media usage: print readership in decline
Finnish media usage: print readership in decline 1 400 400 1 200 350 Aamulehti 300 1 000 Turun Sanomat 250 800 Kaleva Helsingin 200 Sanomat 600 Keskisuomalainen Ilta-Sanomat 150 Satakunnan Kansa 1000 pieces 400 1000 pieces Iltalehti 100 Lapin Kansa 200 50 Kauppalehti Kainuun Sanomat 0 0 2004 2005 20
Slide 15: Finnish media usage: online readership keeps growing
Finnish media usage: online readership keeps growing Weekly browser visits to Alma Media’s online network 7 000 000 Alma Media RON 6 000 000 • A network of Alma Media’s main 5 000 000 media and service sites. 4 000 000 • Weekly reach 2.3 million users. 3 000 000 • Current market position in Finland
Slide 16: Finnish media usage: mobile usage growing fastest
Finnish media usage: mobile usage growing fastest Share of mobile visitors to Alma Media’s news sites and services 50,00% 60,00% 45,00% 55,00% 50,00% 40,00% 45,00% 35,00% 40,00% 30,00% 35,00% 25,00% 30,00% 20,00% 25,00% 20,00% 15,00% 15,00% 10,00% 10,00% 5,00% 5,00% 0,00% 0,00% 201312 201401 201402
Slide 17: Finland: Advertising spend by media
Finland: Advertising spend by media* 1999-2014 MEUR 800 Newspapers 700 Magazines 600 Printed directories 500 TV 400 300 Online 200 Radio 100 Movies 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Outdoor *Excluding Google, FB 28.10.2015 17
Slide 18: Finland: Advertising spend by media, %
Finland: Advertising spend by media, % 100 % 1% Outdoor 1% 1% 1% 1% 2% 3% 6% 90 % 8% 10% 17% 14% 15% 16% 16% 20% 19% 18% 17% 18% 18% 20% Movies 80 % 17% 23% 18% 18% 70 % 18% 20% 16% 17% 17% 20% 21% Radio 60 % 23% 15% 15% 15% 15% 14% 23% 14% 14% Online 50 % 12% 11% 11% 10% 9% 40 % 8% TV 30 % 57% 56%
Slide 19: Finland: advertising volumes follow GDP closely
Finland: advertising volumes follow GDP closely 15% 10% 5% 0% -5% -10% -15% -20% 1990 1997 1998 1991 1992 1993 1994 1995 1996 1999 2000 2007 2008 2001 2002 2003 2004 2005 2006 2009 2010 2011 2012 2013 2014 Annual GDP change Annual advertising volume change Sources: Statistics Finland, Finnish Advert
Slide 20: Finland: advertising / GDP
Finland: advertising / GDP 1 0,9 0,9 0,85 0,81 0,85 0,82 0,82 0,8 0,8 0,78 0,81 0,81 0,8 0,76 0,76 0,76 0,75 0,78 0,74 0,74 0,75 0,73 0,7 0,73 0,75 0,7 0,6 0,6 0,6 0,5 0,4 28.10.2015 20
Slide 21: Finland: advertising market in decline across almost all industries
Finland: advertising market in decline across almost all industries Total market, change from Q1-Q4 2013 Advertising in Q1-Q4 14 MEUR -4,3 % Retail Retail 228 -5,9 % Motor v. Motor vehicles 89 -0,4 % Food & bev. Food & beverages 88 -2,6 % Houses Houses and premises 45 -3,1 % Entert Entertainment 43
Slide 22: Change in advertising 9/2014 – 9/2015
Change in advertising 9/2014 – 9/2015 20% 15% 10% 5% 0% -5% -10% -15% Advertising sales total, chg % Newspaper advertising, chg % Internet advertising, chg % Source: TNS Media Intelligence 28.10.2015 @AlmaMedia_IR 22
Slide 23: Online advertising growth has slowed down
Online advertising growth has slowed down YTD change from previous year, % 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 2015 Source: TNS Media Intelligence 28.10.2015 @AlmaMedia_IR 23
Slide 24: Steady decrease in newspaper advertising
Steady decrease in newspaper* advertising YTD change from previous year, % 0% -2% -4% -6% -8% -10% -12% -14% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 2015 Source: TNS Media Intelligence * Newspapers, local and free issue papers 28.10.2015 @AlmaMedia_IR 24
Slide 25: Advertising decreasing in most industries
Advertising decreasing in most industries Total market, change from previous year P7 2015 vs 2014 P8 2015 vs 2014 P9 2015 vs 2014 Retail 7.5 % Retail -2.1 % Retail -4.1 % Motor v. -0.8 % Motor v. -3.2 % Motor v. 4.0 % Food & bev. -5.9 % Food & bev. 6.0 % Food & bev. -18.0 % Houses -6.6 % Houses -15.
Slide 26: Disruption in digital advertising
Disruption in digital advertising Advertising channels in Finland H1 2015: 553 MEUR Online advertising channels in Finland, H1 2015* TV 24 % Others Alma 10 % Media Online advertising Magazines 25 % 139 MEUR Rest of 6% Finnish online Newspapers incl free media sheets 34 % Source: IAB Finland *Display
Slide 27: Market development in Eastern Central Europe
MARKET DEVELOPMENT IN EASTERN CENTRAL EUROPE 28.10.2015 27
Slide 28: GDP growth in our career service countries support solid market development
GDP growth in our career service countries support solid market development Career Market Alma GDP growth rate, % Alma Career services size Career’s market position market MEUR brands 2015e 2016e Baltic 9 CV Online 2.3 – 2.8 2.9 - 3.6 # 1 in all states Poland 40 Monster 3.3 3.4 #4 Czech 45 LMC 2.5 2
Slide 29: Alma Media's career operations in brief
Alma Media’s career operations in brief 15 % Monster Worldwide’s share of Alma Career Oy, the 11 400 company managing the Countries south from operations. Alma Media Finland to the Adriatic Sea. owns 85 %. personnel across Europe. 35 >30% MEUR of revenue. EBITDA 28.10.2015 29
Slide 30: Strategy
STRATEGY Alma Media’s response to the dynamically developing marketplace 28.10.2015 30
Slide 31: Mission, values and vision
MISSION For individual freedom and wellbeing. VALUES For individual’s Freedom and pluralism of journalism freedom and Team play Courage wellbeing. Pluralism of journalism Courage The most exciting provider VISIOMME VISION of information, The mostservices andprovider of exciting experiences. informat
Slide 32: Strategy 2015 - 2017
Strategy 2015 - 2017 Alma Media will accelerate growth in digital business through service innovations, media solutions offering and digital content sales. The company will also investigate and utilize possibilities to support organic growth by targeted acquisitions. 28.10.2015 32
Slide 33: Elements of strategy for growth and profitability
Elements of strategy for growth and profitability A. B. Support continued organic Four strategic Digital Consumer growth and strategic focus by Services targeted acquisitions & themes: divestments. Financial Media Service extensions and innovations. Multichannel content and Business Services C. Mark
Slide 34: A. Four strategic themes for all businesses
A. Four strategic themes for all businesses Multichannel content Digital content income, web tv, mobile media, content packages NATIONAL FINANCIAL MEDIA CONSUMER AND BUSINESS MEDIA SERVICES Marketing solutions Programmatic buying, targeting, premium packages, consultative sales Service business Mark
Slide 35: B. Supporting focus & growth in digital business
B. Supporting focus & growth in digital business The Combination Agreement CV Online and the Talentum Exchange Kotikokki.net E-Kontakti.fi Alkali (Baltics) Offer . Gross Monster investment Tyrvään L.M.C. Profesia (Poland, into career JM-Tieto Sanomat (Czech) (Slovakia) Hungary, Acquisitions services
Slide 36: B. Supporting focus & growth in digital business
B. Supporting focus & growth in digital business NET DEBT / EBITDA (2009 – 2014) NET DEBT / EQUITY (GEARING), 2009 – 2014 NET DEBT Q2/2012 – Q4/2014 120 Alma Media had a strong investment period during 2011-2013 (approx. MEUR 150). 100 97,6 80 82,1 During 2013-2014 Alma Media has concentrated on int
Slide 37: C. Strengthen the market position of the digital mass media
C. Strengthen the market position of the digital mass media Some examples of Iltalehti.fi development • Utilising smart data in content development and advertising (targeting) solutions. • New premium advertising solutions to counter online advertising price erosion. • Building audience reach and en
Slide 38: D. Development of regional media
D. Development of regional media Structural reform of Lapland newspapers Structural changes support quality and efficiency • We combined the editorial Main operations and other functions of two • Regional daily newspapers Aamulehti and daily newspaper in Lapland • Personnel reduction 21 Satakunnan K
Slide 39: Old and new competition
Old and new competition Traditional competition Alma Media’s New and emerging business competition Free sheets; direct mail; regional TV & radio broadcasts Regional media News aggregators; social media Other tabloid publisher; broadcast TV online Tabloid media Social media; news aggregators Other pu
Slide 40: Financial dynamics
FINANCIAL DYNAMICS Revenue sources, costs, investments and financing 28.10.2015 40
Slide 41: Advertising is the main revenue source for Alma
Advertising is the main revenue source for Alma Content and service revenue growing in share Sales 2014 38,8 Content revenue, print 104,6 295 Content revenue, online Advertising revenue, print 72,7 Advertising revenue, online MEUR Service revenue 5,6 73,7 Total share of advertising revenue 49.5 % 28
Slide 42: Organic group sales development scenario
Organic group sales development scenario 295 MEUR Services Digital media Printed media Note: for illustrative purposes only 2014 2020 actual 28.10.2015 42
Slide 43: Cost structure
Cost structure Personnel costs represent largest cost element Costs 2014 120 Personnel 100 11 % Depreciation, amortization 5% 80 Materials and printing The development of main cost elements 2010-2014 275 7% 44 % Delivery 60 9% Content sourcing and other 40 MEUR services ICT 20 10 % Sales and marketi
Slide 44: Sensitivity analysis
Sensitivity analysis Factor Change (%) Impact on EBIT (MEUR) Media advertising +1 +1.5 Paper prices +1 -0.1 The impacts in euros of the changes referred in the table above Distribution costs +1 -0.3 are provided as gross values. The calculations are estimates and based on historical annual figures.
Slide 45: Balancing investments, dividend and debt repayment
Balancing investments, dividend and debt repayment 2013 2014 Net investments Repayment of loans Net investments Repayment of loans 2.3 MEUR 22.5 MEUR 8.4 MEUR 26.9 MEUR (0.03 €/share) (0.30 €/share) (0.11 €/share) (0.36 €/share) Cash flow Cash flow from operations from operations 24.4 MEUR 26.5 MEUR
Slide 46: Debt level decreasing as planned
Debt level decreasing as planned Q3/2015 Financial leasing 66.2 Financial loans 7.0 Interest-bearing debt, distribution and maturities Commercial papers 2.0 Cash and cash equivalents -13.1 120 Total 62.1 100 104.1 M€ 30,0 80 25,0 80.3 MEUR 71.1 67.8 20,0 60 63.4 62.1 15,0 40 10,0 20 5,0 0 0,0 Q1 13
Slide 47: Balance sheet
Balance sheet MEUR Q3 2015 Q3 2014 Intangibles and goodwill 108.1 111.5 Tangibles 71.5 81.8 Associated companies 24.8 24.7 Inventory 1.1 1.2 Receivables 33.6 37.9 Cash 13.1 10.5 Assets 252.3 267.5 Equity 105.7 99.8 Reserves-obligatory 0.4 3.7 Pension liabilities 2.7 2.9 Ib debt 75.2 90.7 Non-Ib debt
Slide 48: Performance & financial targets
Performance & financial targets Alma Media’s 2011 2012 2013 2014 Target level long-term financial targets Digital business growth 16.3% 36.8% 8.4% 11.9% > 15% Return on Investment (ROI), % 26.1% 13.8% 10.0% 9.7% > 15% Dividend payout ratio* 103% 45% 50% 63% > 50% *Including capital repayments 28.10.
Slide 49: Alma Media Q3 2015
ALMA MEDIA Q3 2015 23 October 2015 @AlmaMedia_IR 28.10.2015
Slide 50: Alma Media's performance Q3/2015 – main points
Alma Media’s performance Q3/2015 – main points The Group’s performance was in line Domestic operations hindered by the weak with expectations Finnish market situation • Revenue MEUR 68.0 (-3.5%) • Marketplaces business: domestic revenue at the • Operating profit MEUR 7.6 (+8.2%) previous year’s leve
Slide 51: Q3 revenue and operating profit
Revenue, MEUR IFRS Q3 revenue and operating profit -1.8% -3.5% 80 70 8.9 9.6 60 50 • Q3 revenue decreased by 3.5%, primarily due to 40 33.5 33.1 divestments. 30 • Content revenue declined by 9.7% 20 28.0 • Content revenue from digital channels did not cover the 10 25.3 decline in print content rev
Slide 52: Digital products and services growing share of revenue
Digital products and services are growing to account for a higher share of revenue – the goal is to further accelerate this growth Online business revenue grew by 9.5% in Q3 MEUR 34.6 % 100 32.0 % 35% Segment’s share of the Group’s 90 28.1 % digital revenue 30% 24.3 % 80 4.1 % 25% 10.6 % 70 60 18.0
Slide 53: Combination of Alma Media and Talentum
Combination of Alma Media and Talentum • Alma Media has for long been Talentum’s largest shareholder with a stake of more than 32%. The Combination Agreement and the Talentum Exchange Offer are a logical step in the implementation of Alma Media’s strategy. • The Combination will: • Ensure the future
Slide 54: Significance of foreign operations to income formation increased in Q3
The significance of foreign operations to Alma Media’s income formation continued to increase in Q3 Revenue, MEUR Q3 15 Q3 14 Chg Chg % Digital Consumer Services 15.3 13.5 1.8 13.1 % Financial Media and Business Services 12.5 12.2 0.3 2.3 % National Consumer Media 9.9 11.5 -1.6 -13.7 % Regional Medi
Slide 55: Digital Consumer Services Q3/2015
Digital Consumer Services Q3/2015: continued strong growth in foreign markets Revenue and operating profit, MEUR & % • Revenue grew by 13.1% to MEUR 15.3 • In Finland, profitability was at the same level as in 2014 the previous year in spite of the challenging domestic market situation. 18.0 +9.4%
Slide 56: Financial Media and Business Services Q3/2015
Financial Media and Business Services Q3/2015: growth boosted especially by JM Tieto Revenue and operating profit, MEUR & % • Revenue increased by 2.3% to MEUR 12.5 • Digital business accounted for 43.7% of revenue. 17.0 +7.2% 30% +2.3% • Content revenue increased by 0.6% and was 15.0 MEUR 4.0 25% 1
Slide 57: National Consumer Media Q3/2015
National Consumer Media Q3/2015: positive signs in mobile advertising Revenue and operating profit, MEUR & % • Revenue declined by 13.7% to MEUR 9.9. • Online business accounted for 25.9% of the segment’s revenue. 14.0 -15.8% -13.7% 30% • Content revenue decreased by 16.4% due to a decline in Iltal
Slide 58: Regional Media Q3/2015
Regional Media Q3/2015: adjustment measures and the external sales of printing services kept profitability at the 2014 level Revenue and operating profit, MEUR & % • Revenue was MEUR 31.6. • Digital business accounted for 3.2% of revenue. 45.0 -8.5% 30% -8.7% • The effect of divested business oper
Slide 59: Cash flow from operating activities and investments
Cash flow from operating activities and investments 16,7 20.0 0.5 0.0 0.0 0.0 15.0 -0.5 -0.7 -1.0 10.0 -1.5 MEUR 5.0 -2.0 MEUR 5.8 -2.5 3.3 0.6 0.0 -3.0 3.3 -5.0 -3.5 -4.0 -4.4 -10.0 -4.5 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 -5.0 Q3 14 Q3 15 Cash flow from operating acti
Slide 60: Interest-bearing liabilities
Interest-bearing liabilities Net debt Q1/2013–Q3/2015 Net debt distribution 120 Q3/2015 100 104.1 Financial leasing 66.2 80 Financial loans 7.0 80.3 MEUR 71.1 60 67.8 63.4 Commercial papers 2.0 62.1 40 Cash and cash -13.1 equivalents 20 Total 62.1 0 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1
Slide 61: Key indicators
Key indicators IFRS Equity ratio, % Gearing, % 50 90 45 80 44.9 80.4 40 70 40.0 35 60 30 58.7 50 25 40 20 30 15 10 20 5 10 0 0 Q3 14 Q3 15 Q3 14 Q3 15 28.10.2015 @AlmaMedia_IR 61
Slide 62: Earnings per share and equity per share
Earnings per share and equity per share 0.07 0.06 1.4 0.04 0.06 1.19 1.2 1.12 0.05 0.04 1.0 0.42 0.49 0.03 0.06 0.06 0.8 0.02 0.6 0.01 0.00 -0.01 0.4 0.70 0.70 -0.01 -0.02 0.2 -0.02 -0.03 0.0 2014 2015 2014 2015 Non-recurring items Retained earnings EPS wo non-recurring items Restricted equity 28.10
Slide 63: Upcoming events in the investor calendar
Upcoming events in the investor calendar Q4 interim report 12 February 2016 28.10.2015 @AlmaMedia_IR 63