Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Investor Presentation (November 2019)
45 slides from Alma Media Oyj's investor presentation, November 2019
Slide 1: Alma Media - sustainable growth in digital
Alma Media - sustainable growth in digital Investor slide deck, November 2019
Slide 2: Contents
Contents • Introduction to Alma Media 3-8 • Alma Media investment highlights 1. Financial performance 9-15 2. Operating environment 16-20 3. Market position highlights 21-23 4. Transformation strategy 24-39 • Alma Media & CR 40-44 www.almamedia.fi/investors Alma.IR@almamedia.fi Twitter: @AlmaMedia_I
Slide 3: Alma Media as an investment Q3/19
Alma Media as an investment Q3/19 52.9% DIGITAL GROWTH STRATEGY CAGR 2008-2018 15 % • Share of digital sales 1/2 of Group sales, growth 9 % in 2018 1 • Digital business 3/4 of Group adjusted EBIT in 2018 13% 44 40 49 57 78 84 95 104 133 157 170 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 4: Alma Media in a nutshell
Alma Media in a nutshell Segment splits, % Geographical splits, % Recruitment, REVENUE 96 MEUR Alma Alma properties and DIGITAL 100 % Consumer Markets automobile ADJ. EBITDA 38.1 Revenue 43 % 27 % marketplaces MEUR 355 MEUR 75 | 25 Group across Europe. PERSONNEL 668 revenue 355 MEUR Alma Media and R
Slide 5: Our purpose and vision
OUR PURPOSE OUR VISION To accelerate Alma Media is sustainable growth the most exciting provider of of individuals, businesses and information, services and society. experiences. Through our content and services we increase people’s We aim to set the stage of the competencies, awareness and understa
Slide 6: Alma Markets
Segments in brief Alma Markets Alma Career Alma Mediapartners • Spearhead of Alma’s digital development Recruitment services Properties & Cars and internationalisation since mid-1990’s. (76% of sales) (24% of sales) • Main drivers of growth: market dynamics/GDP growth, Leading recruitment services i
Slide 7: Alma Talent
Segments in brief Alma Talent Financial and professional media Services for businesses and • A unique target group: segments’ media channels and services reach two million influencers in Finland and professionals Sweden. Wide and high-margin professional content and services business portfolio. Enab
Slide 8: Alma Consumer
Segments in brief Alma Consumer • Segments printed and digital media and services National and regional media Digital consumers services Printing and delivery reaches a total of 2.6 million Finns. Nation-wide multi-channel with media synergies (travel • Alma Consumer benefits from the digital know-h
Slide 9: Financial performance highlights
FINANCIAL PERFORMANCE HIGHLIGHTS
Slide 10: Digital transformation driving operational gearing and improving EBITDA
Digital transformation driving operational gearing and improving EBITDA* 364 367 369 364 360 82.7 353 357 359 355 80.1 338 347 347 345 76.5 72.9 66.9 67.4 67.2 66.9 67.8 62.7 59.9 MEUR MEUR 53.3 48.9 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 16 Q4 16 Q1 17 Q2 1
Slide 11: Strong cash flow
Strong cash flow • Cash flow from operating activities in Q3/2019 was MEUR 9.5 (4.4). Improvement was due to profit improvement, lower working capital and implementation of the IFRS 16 leasing standard. • Cash flow from investment activities was MEUR -3.2 (10.1 ) in Q3/2019. A 40 % stake in Etua.fi
Slide 12: Implementation of IFRS 16 increased net debt by MEUR 52.5
Implementation of IFRS 16 standard increased net debt by MEUR 52.5 in the beginning of the year • At the end of September gearing ratio was 27.3 % and net debt stood at MEUR 50.5 • Interest-bearing liabilities totalled MEUR 97.0 • Equity ratio 51.6 % Equity ratio, Net debt, MEUR and gearing, % Q3/20
Slide 13: Strong capacity to invest and raise dividends
Strong capacity to invest and raise dividends 1,00 Cash flow from operating activities per share EPS Dividend per share 0,90 • Business generates significant free cash flow 0,80 • Capex level on average 0,70 MEUR 4–5 per year 0,60 • Head room for M&A activities MEUR 200 (2.5 X net EUR 0,50 0,89 debt
Slide 14: IFRS 16 effects
IFRS 16 effects Effect of IFRS 16 on Alma Media Corporation’s consolidated financial statements 30 Sep 2019 30 Sep 2019 1 Jan 2019 1 Jan 2019 Balance sheet (MEUR) Assets Liabilities Assets Liabilities Leases for business premises and operating leases 49.0 49.4 53.7 53.7 Leases for IT equipment -1.2
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% 4% 7% 10% 18% 22% 19% 92% 78% 62% 69% 0% 0% 0% 0% 2015 2016 2017 2018 1-9/2019 2015 2016 2017 2018 1-9/2019 201
Slide 16: Operating environment
OPERATING ENVIRONMENT
Slide 17: Forces of change in the operating environment
Forces of change in the operating environment ECONOMIC TRENDS IN OPERATING COUNTRIES MEDIA CONSUMPTION • The domestic advertising market and • Mobile Economic trends in Finnish GDP growth have • differentiated. Social media operating • Market growth expected to level off in • Paid digital content •
Slide 18: GDP growth decelerates slightly in Eastern European countries
GDP growth decelerates slightly in Eastern European countries GDP forecasts in Alma’s operating countries 2018-2020E 2018 2019 2020 4,8 % 5% 3,9 % 4,1 % 3,5 % 3,6 % 3,3 % 2,9 % 3,0 % 2,8 % 3,1 % 3% 2,3 % 2,4 % 1,7 % 1,5 % 1,2 % 1% -1% Estonia Latvia Lithuania Slovakia Finland 2018 2019 2020 4,9 % 5,
Slide 19: Finnish advertising market continues to be soft
Finnish advertising market continues to be soft 15% 10% 5% 0% -5% -10% -15% Advertising sales total, chg % Newspaper advertising, chg % Online advertising, chg % Monthly change in media advertising 9/2018–9/2019 Source: Kantar TNS
Slide 20: Online advertising in Finland
Online advertising in Finland A-LEHDET OTHER FINNISH MEDIA Share of international operators of Finnish digital 2 % (2%) COMPANIES 11 % (12%) advertising market, % 60% 57% 53% 48% 49% 49% ALMA MEDIA 50% 44% 42% 42% Appr. 30 % (30%) 40% 29% 186 30% 20% SANOMA MEUR 10% 39 % (38%) MTV MEDIA 0% 7 % (7%)
Slide 21: Market position highlights
MARKET POSITION HIGHLIGHTS
Slide 22: Strong market position
Strong market position Leading brands and technology #1 #1 #1 #2 #2 #2 in recruitment Property sales & Financial and rental portal Digital platforms in professional Regional Online news in advertising media and 7 European #2 services Finland newspaper in Finland network in Finland countries Car port
Slide 23: Meeting customers' needs with local strong brands
Meeting customers’ needs with local strong brands #1 in Czech Republic (market 55 MEUR) • prace.cz, jobs.cz, monster.cz, profesia.cz #1 in Slovakia (market 11 MEUR) • profesia.sk #1 in Croatia (market 8 MEUR) • mojposao.net #1/2 in Finland (market 28 MEUR) • monster.fi #1 in Estonia, Latvia, Lithuan
Slide 24: Transformation strategy highlights
TRANSFORMATION STRATEGY HIGHLIGHTS
Slide 25: Well underway in digital transformation, but yet halfway
Well underway in digital transformation, but yet halfway MEUR MEUR Q3/19 400 52.9% 60% 350 32 50% 300 23 40% 250 17 Services 176 Digital 200 30% Print 150 Share of digital 20% business 247 100 138 10% 50 0 0% Revenue, 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 rolling
Slide 26: Digital transformation and change in business mix striving operational gearing
Digital transformation and change in business mix striving operational gearing Q3/19 20.1% MEUR 80 20,0 % 18,1 % 70 18,0 % 16,2 % 60 16 16,0 % 14,0 % 13,8 % 14,1 % 13,9 % 13,6 % 50 14,0 % 16 40 12,0 % 10,5 % 10,0 % 41 30 10,0 % 8,1 % 13 8,0 % 20 7,2 % 8,0 % 37 10 7 6,0 % 10 9 0 2 4,0 % -6 -8 -6 2008
Slide 27: Digital business exceeds 50% of revenue
Digital business exceeds 50 % of revenue Digital revenue steadily increasing, growth stabilizing Share of digital business of Group revenue Digital business growth 35 % 51.7% 30.4% 48.0% 29.5% 30 42.6% 37.8% 25 23.8% 35.8% 32.0% 19.7% 28.1% 20 18.6% % 24.3% 170 15.9% 15.6% 157 15 18.0% 12.7% 15.7% 1
Slide 28: Profitable expansion of international digital business
Profitable expansion of international digital business *Figures rolling 12 months end Q3/2019 Revenue breakdown geographically Finland International Operations Not Allocated 43% 73 83 89 26 % 37 89 EBIT 45 74 % 2019 * 261 279 282 265 257 57% 245 Finland International Operations 2014 2015 2016 2017 2
Slide 29: Digital content sales increase as the key success factor
Digital content sales increase as the key success factor Alma Media engages well over 0.5 million subscribers for print and digital Content revenue split 1-9/2019 in Finland* 6% 4% 11.1 84 % 16 % Meur 0% 6% Print Digital B2C digital-only B2B digital-only Bundle Others *Excluding content sales of Alm
Slide 30: All subscribed Alma brands generate digital content revenue
All subscribed Alma brands Alma Media Content Sales (number of BtoC digital-only subs) generate digital content 2013–2019 revenue 49 000 BtoC digital-only subs. by the end of September • Last brands out of the digital product development pipeline: • M&M and Uusi Suomi. • Digital-only subscriber base
Slide 31: Strategy 2019–2021
STRATEGY 2019–2021
Slide 32: Expanding our offering from media to related digital services
Expanding our offering from media to related digital services. Fullfilling the needs of our users’ everyday life as consumers and as professionals in business.
Slide 33: 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 34: Accelerating growth with strategic initiatives
Accelerating growth with strategic initiatives MAIN ACHIEVEMENTS: FUTURE AMBITION (2019-): • AMS: above the average growth of domestic • AMS: preferred local marketing partner. digital market. • eCOM: more engaged audience and digital • eCOM: digital subscription growth 40%. subscription growth. • D
Slide 35: Business units' strategy 2019–2021
Business units’ strategy 2019–2021 •Recruitment services will be •Media business rapid digitalization, •Profitability ensurement and cost expanded: geographically, organically all digital content behind paywalls by adjustments. Strengthening of and through M&A. 2020 synergetic service business both
Slide 36: Portfolio development
Portfolio development ’Future growth options’ FUTURE BUSINESS AREAS ’Growth leaps’ ’Market Position and BUSINESS EXPANSION Market Shares’ ’Profitability and BUSINESS EXTENSIONS performance’ CURRENT BUSINESS
Slide 37: M&A and divestments
M&A and divestments In the years 2010–2018, the annual pre-tax return on investments has been 12% of the invested capital. Jobote Mediuutiset AutoJerry Tukkuautot Talentum UusiSuomi Monster Urakka- Katsastushinnat.fi Etua JMTieto NettiKoti Alkali maailma.fi Talosofta AutoSofta Rantapallo 2014 2015 2
Slide 38: Operating environment
Operating environment • European economies are expected to face slower growth in 2019. Uncertainty about the economic development in Germany has increased, which has been reflected in a decline in the demand for recruitment advertising in certain sectors in the Czech Republic and Slovakia. • Media s
Slide 39: 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 40: Corporate responsibility
CORPORATE RESPONSIBILITY
Slide 41: Alma Media value creation model
Alma Media value creation model* Figures FY/2018 41
Slide 42: Responsibility lies in the heart of our business
Responsibility lies in the heart of our business HIGH-QUALITY MEDIUM AND SERVICE PROVIDER RESPONSIBLE RESPONSIBLE INFORMATION SECURITY JOURNALISM MARKETING AND DATA PROTECTION Improves Improves advertising Improves relevance engagement receptivity Constructive, accurate, verifiable…. Viewability, ad
Slide 43: On a growth path
On a growth path The aim of Alma Media’s sustainability program is to accelerate the sustainable growth of individuals, businesses and society by utilizing the strenghts of a digitalized media company. SUSTAINABILITY THEMES TARGETS ACHIEVEMENTS IN 2018 Contributor of Under 20 % of all condemnatory d
Slide 44: Alma Media & ESG
Alma Media & ESG • Alma Media is committed to developing its sustainable business practices against highest standards • Code of Conduct implemented with a whistle-blower mechanism across all operations • ALMA is part OMX GES Sustainability Finland index • CR reporting since 2012 following GRI / G4.
Slide 45: Thank you!
Thank you! Alma Media IR contacts • CFO Juha Nuutinen, tel. +358 10 665 3873. • IR Nora Hallberg, tel. +358 40 720 1775. • www.almamedia.fi/investors • Alma.IR@almamedia.fi • Twitter: @AlmaMedia_IR