Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Q1 2019 Earnings Presentation
29 slides from Alma Media Oyj's earnings presentation, 2019
Slide 1: Alma Media Q1/2019
Alma Media Q1/2019 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 Q1/2019
Alma Media Q1/ 2019 • Earnings improved in all business segments. • Increase in digital sales, cost reduction measures and divestments boosted the Group’s adjusted operating margin to 16.9 %. • Revenue down, mainly due to divestments but also weighted down by the declining print media market. Organi
Slide 4: Adjusted operating profit improved in all segments
Adjusted operating profit improved in all segments 1.2 -1.6 -6.1 Revenue 92.2 (MEUR) Q1 85.0 Q1 2018 Alma Markets Alma Talent Alma Consumer Q1 2019 0.9 0.3 0.5 0.6 Adjusted operating 14.4 profit (MEUR) Q1 12.2 Q1 2018 Alma Markets Alma Talent Alma Group Q1 2019 Consumer operations 4
Slide 5: Digital business exceeded 50 % of revenue
Digital business exceeded 50 % of revenue Share of digital business of Group revenue Digital business growth 48.0% 50.7% 35 % 42.6% 29.7% 30.4% 29.5% 30 37.8% 25 23.8% 35.8% 32.0% 19.7% 20 18.6% 28.1% % 24.3% 15.9% 15.6% 170 157 15 12.7% 18.0% 133 15.7% 9.8% 13.1% 10 95 104 6.9% 78 84 5.8% 49 57 5 2
Slide 6: Operating environment
OPERATING ENVIRONMENT
Slide 7: Weakness of the domestic advertising market continued
Weakness of the domestic advertising market continued 15% OTHER FINNISH A-LEHDET MEDIA 1 % (2%) 10% COMPANIES 11 % (10%) 5% ALMA MEDIA 0% 30 % (31%) -5% Appr. MEUR -10% -15% 46 -20% SANOMA MTV MEDIA 41 % (40%) 7 % (7%) -25% OTAVAMEDIA 10 % (10%) Advertising sales total, chg % Newspaper advertising,
Slide 8: Recruitment and housing advertising figures in the red territory in Q4/2018 and Q1/2019
Recruitment and housing advertising figures in the red territory in Q4/2018 and Q1/2019 Q2 2018 vs 2017 Q3 2018 vs 2017 Q4 2018 vs 2017 Q1 2019 vs 2018 -9,3 % Retail -3,8 % Retail -3,3 % Retail Retail -5,2 % Motor v. -5,2 % Motor v. 4,9 % Motor v. -7,6 % Motor v. -5,2 % Food & bev. 4,0 % Food & bev.
Slide 9: GDP forecasts in Alma's operating countries 2018-2020E
GDP forecasts in Alma’s operating countries 2018-2020E 2018 2019 2020 4,7 % 5% 4,2 % 4,1 % 3,5 % 3,6 % 3,5 % 3,1 % 2,7 % 2,6 % 2,7 % 2,5 % 3% 2,4 % 2,4 % 1,9 % 1,7 % 1% -1% Estonia Latvia Lithuania Slovakia Finland 2018 2019 2020 5,1 % 4,8 % 5% 3,4 % 3,5 % 3,2 % 2,9 % 2,9 % 2,7 % 2,8 % 2,7 % 3% 2,6
Slide 10: Development by business segments
DEVELOPMENT BY BUSINESS SEGMENTS
Slide 11: Alma Markets Q1/2019: Growth continues, but levelling off
Alma Markets Q1/2019: Growth continues, but levelling off • Revenue increased by 5.1 % to MEUR 25.0. Recruitment business continued to grow but more slowly, especially in the Czech Republic and Finland. Positive trend in the housing and car marketplaces business in Finland continued. • Expenses up b
Slide 12: Alma Talent Q1/2019: Digital content revenue in Finland strongly up
Alma Talent Q1/2019: Digital content revenue in Finland strongly up • Revenue decreased by 5.9 % to MEUR 26.2. Finnish media business developed well. Digital content sales +21 %. B2B advertising sales developed well in Finland. • In Sweden, decline of advertising and divested and discontinued operat
Slide 13: Alma Consumer Q1/2019: Cost savings improved earnings
Alma Consumer Q1/2019: Cost savings improved earnings • Divested business decreased revenue by MEUR 4.7. Organic revenue went down due to declining print advertising, Iltalehti’s single-copy sales and lower external printing volumes. • Two-digit growth in digital content sales. • Restructuring measu
Slide 14: Financial position
FINANCIAL ROSITIOR™ _ fil
Slide 15: 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% 3% 7% 10% 18% 22% 20% 92% 78% 62% 69% 0% 0% 0% 0% 2015 2016 2017 2018 Q1/2019 2015 2016 2017 2018 Q1/2019 2015
Slide 16: Despite revenue decrease record high EBITDA
Despite revenue decrease record high EBITDA* 364 367 369 364 360 353 357 359 355 338 347 76.5 325 72.9 306 66.9 67.4 67.2 66.9 67.8 62.7 59.9 MEUR MEUR 53.3 48.9% 46.2 42.0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q
Slide 17: EPS
EPS • Earnings per share in Q1 were EUR 0.12 (EUR 0.11). No adjusted items in Q1/2019 (Q1/2018: MEUR 0.7). 0,16 0,14 0,12 0,10 . EUR 0,08 0.15 0.13 0,06 0.12 0.12 0.12 0.12 0.11 0,04 0.09 0,02 0.04 0,00 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19
Slide 18: Strong cash flow continued
Strong cash flow continued • Cash flow from operating activities in Q1/2019 was MEUR 30.3 (28.2). IFRS 16 leasing standard implementation increased operating cash flow by MEUR 1.9 • Cash flow from investment activities was MEUR -0,4 (-6,4 ) in Q1/2019. No acquisitions in Q1/2019. Operating cash flow
Slide 19: 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 March gearing ratio was 33.1 % and net debt stood at MEUR 55.1 • Interest-bearing liabilities totalled MEUR 102.7 • Equity ratio 46.1 % Equity ratio, Net debt, MEUR and gearing, % Q1/2016–Q1/2019 Q1/2016–Q1/2019 67.4
Slide 20: IFRS 16 effects
IFRS 16 effects Effect of IFRS 16 on Alma Media Corporation’s consolidated financial statements 31 Mar 2019 31 Mar 2019 1 Jan 2019 1 Jan 2019 Balance sheet (MEUR) Assets Liabilities Assets Liabilities Leases for business premises and operating leases 53.0 53.2 53.7 53.7 Leases for IT equipment -1.2
Slide 21: Strategy and outlook
STRATEGY AND OUTLOOK
Slide 22: 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 23: Traffic management
Strategic Alma initiatives Traffic management • As all common cross-business Alma initiatives, traffic management targets to boost content and media sales • Aims to increase incoming traffic as well to steer visiting flow cross brands effectively • Increases user engagement: time spent in Alma netwo
Slide 24: Renewal of Etuovi service
Alma Markets Renewal of Etuovi service • Finland’s largest digital service for finding a new home • More than 1,6 million unique visitors per month*, and displays more than 60 000 apartment ad listings per week • Service’s new features include a LMC- developed algorithm for recommending homes and AI
Slide 25: Tivi online redesigned
Alma Talent Tivi online redesigned • Part of the content only for subscribers • Content expanded to also cover Alma Talent’s IT business data, sector’s jobs and IT professional training and coaching • In digital transformation of Alma Talent’s media • websites moved on to same technical platform • f
Slide 26: AI-based reader moderation
Alma Consumer AI-based reader moderation • Machine learning based moderation in Iltalehti’s news-related comments started late 2018 • Already 60 % of comment moderation decisions made by machine • Generates cost savings and accelerates flow of online discussion • Quality of automatic moderation vari
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–June 2019: 17.7.2019 Interim report for January–September 2019: 23.10.2019