Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Investor Day (December 2019)
44 slides from Alma Media Oyj's investor day presentation, Dec 16, 2019
Slide 1: Analyst meeting
Analyst meeting Alma Media Management, December 16th, 2019
Slide 2: Agenda
Agenda • CEO Kai Telanne: Business review and operating environment • CFO Juha Nuutinen: Financing digital transformation • CDO Santtu Elsinen: Creating value from data • Short glance on business segments and media advertising sales • Alma Markets/Vesa-Pekka Kirsi • Alma Talent/Juha-Petri Loimovuori
Slide 3: Alma Media today
Alma Media today Digital company with ½ revenues and ¾ of adj. EBIT from digital sources. #1 in Eastern Central European recruitment market. #1 publisher of financial and professional media & services in Finland. #2 as a digital advertising network in Finland. Ample room for investments in digital t
Slide 4: Well underway in digital transformation, yet only halfway
Well underway in digital transformation, yet only halfway Q3/19 52.9% M€ MEUR 400 50% Share of digital revenue 45% 350 36 Services 32 40% 300 23 35% 250 17 30% 170 176 Digital 200 25% 20% 150 247 15% 100 10% 149 138 Print 50 5% 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20
Slide 5: Digital transformation and business mix driving operational gearing
Digital transformation and business mix driving operational gearing M€ 70 20% 18,1 % 18% 60 16,2 % 16% 13,9 % 50 14% 12% 40 10,0 % 10% 8,1 % 8,0 % 62,5 30 7,2 % 57,3 8% 51,1 20 6% 35,2 4% 24,3 21,4 23,4 10 2% 0 0% 2013 2014 2015 2016 2017 2018 2019 * Adjusted EBIT Profit margin % *Rolling 12 months
Slide 6: Operating environment
Operating environment
Slide 7: Drivers of change in operating environment
ECONOMIC TRENDS IN OPERATING COUNTRIES • Finland and Eastern Central Europe • Urbanisation COMPETITION • Global technology giants MEDIA CONSUMPTION • Finnish media • Mobile • Social Media • Paid digital content DRIVERS • Print OF CHANGE IN OPERATING ENVIRONMENT MARKETING AND ADVERTISING TECHNOLOGY A
Slide 8: GDP growth decelerates slightly in Eastern European countries
GDP growth decelerates slightly in Eastern European countries GDP forecasts in Alma’s operating countries 2017-2020E 2017 2018 2019 2020 5,7 % 4,8 % 4,6 % 5% 4,2 % 3,8 % 3,8 % 4,0 % 3,6 % 3,2 % 3,0 % 2,5 % 2,6 % 2,7 % 2,6 % 3% 2,1 % 2,4 % 1% -1% Estonia Latvia Lithuania Slovakia 2017 2018 2019 2020
Slide 9: Steady declining trend in Finnish newspaper sales
Steady declining trend in Finnish newspaper sales 2010–2018 Subscription and advertising sales Sales total Sales print Sales digital M€ 1200 1101 1120 1075 1081 1081 1036 2018 989 1000 933 950 915 881 885 867 Finnish media Alma Media’s 832 837 791 market in Finnish business 800 755 710 general - Dig
Slide 10: Norway and Sweden lead the way in paid news content
Source: Reuters Institute Digital News Report 2019 News Content 30% 35% 15% 20% 25% 10% 0% 5% Norway Turkey Sweden Brasil Hong Kong Poland USA Mexico South-Africa Singapore Malesia Finland Denmark Australia Taiwan Ireland Holland Belgium Switzerland Spain South-Korea Norway And Sweden Lead The Way I
Slide 11: Competition in digital advertising is fierce due to international rivals
Competition In Digital Advertising Is Fierce Due To International Rivals Alma Media 13 % 143 M€ Advertising in social media 23 % Sanoma + Search engine 337 17 % advertising 34 % M€ Other Finnish media companies 13 % Source: Kantar TNS, IAB Finland, Q1-Q3/2019 13.1.2020 11
Slide 12: Financing digital transformation
Financing digital transformation
Slide 13: Financing the growth: strong capacity to invest and raise dividends
Financing the growth Strong capacity to invest and raise dividends 1,00 Cash flow from operating activities per share EPS Dividend per share • Business generates significant 0,90 free cash flow 0,80 • Ample room for M&A MEUR 210 0,70 (2.5 X net debt/EBITDA) 0,60 • Capex level on average EUR 0,50 MEU
Slide 14: Strong cash generation
Strong cash generation 80 Net cash provided by operat. activities 70 Net cash provided by operat. activities, rolling 12 months 80 100% 60 70 80% 60 50 50 60% 40 MEUR 40 73,6 MEUR 30 30 40% 51,7 56,2 20 30,3 20 42,3 22,6 28,2 33,6 20% 10 19,1 14,6 9,5 10 3,7 4,4 0 0 0% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
Slide 15: Net debt and gearing
Net debt and gearing 97,6 110,5% 76,2 71,1 MEUR 68,5% 57,1 50,5 59,4% 40,2 41,4% 25,4% 27,3% 2,0 1,1% 2013 2014 2015 2016 2017 2018 2019 P9
Slide 16: Value Creation from Data
Value Creation from Data
Slide 17: Data drives monetization in strategic initiatives
Data Drives Monetization In Strategic Initiaves ALMA MEDIA DIGITAL ALMA DIGITAL SOLUTIONS SUBSCRIPTIONS DATA DATA THEMES AUDIENCES Better conversion and Targeting in digital More traffic to higher Personalized services churn prevention in Direct data sales ad sales ARPU services for digital audience
Slide 18: Audience-based monetisation model
Audience-Based Monetisation Model Alma network visitors, consumed content and data layer events per month 192M visits Traffic 530M Data 32M visitors AUDIENCE data layer events & Loyalty 19M hours CONTENT 865M page views Engagement 4,4 page views / visit Monetisation Media and content sales; services
Slide 19: Data drives programmatic & direct ad sales growth
Data Drives Programmatic & Direct Ad Sales Growth Programmatic sales Q1/2014 – Q3/2019 Data products and services for advertisers Audience Tailored Models segments segments Sociodemographic Special / niche Target group segments modelling for Interest areas advertisers Combining Purchase intent audie
Slide 20: Data Architecture
Data Architecture Customer Data Management Platform Subscriptions, demographics Customer segments and modelled data Behaviours, locations and seed data for modelling Ad Server Logs Websites and apps Sammio Marketing Automation Profiles Targeting & segmentation Raw and Subscriptions, users IDs combin
Slide 21: Data Architecture
Data Architecture Customer Data Websites and apps Other sources Management Platform Subscriptions, demographics Page view data and modelled data Customer segments Behaviours, locations and seed data for Device data modelling Data from CRM and Ad Server Semantic data in articles subscription systems
Slide 22: Supervised learning in predicting subscriber churn
Supervised Learning In Predicting Subscriber Churn Relative importance of Prediction accuracy variables in prediction (ROC curves) in test sample 13/01/2020 22
Slide 23: EdIT: Predicting demand of content
EdIT: Predicting Demand Of Content 400 000 articles Classification models Language Model 1 000 000 articles Classification models 600 000 articles 13/01/2020 23
Slide 24: Data Literacy
Data Literacy What do we need to answer? How Value to derive value from the results? V What kind of analytical What data is available? tools or methods are Where is it? required for processing? Information I A Analytics 13/01/2020 24
Slide 25: Business segments
Business segments
Slide 26: 100% digital Alma Markets as the most important profit contributor
100 % digital Alma Markets as the most important profit contributor 40 Adjusted EBIT Profit margin % 37,4 % 40% Revenue, MEUR 35,7 % 34,1 % 35 35% 30 27,8 % 30% 25 25% 20 20% 37,3 34,4 96 100 15 28,3 15% 83 69 10 19,3 10% 5 5% 0 0% 2016 2017 2018 2019 * 2016 2017 2018 2019* *Rolling 12 mn Q3/2019 3-
Slide 27: Revenue streams of Alma Markets
Revenue streams of Alma Markets RECRUITMENT (74%) Ability to realise •Job listings: 80-90% scalability benefits Highly scalable with low cost per listing Investments to HOUSING (18%) CARS (8%) secure growth Banner advertising Add-on services Listing fees Scalability Licence fees (ATS systems) Banner
Slide 28: Business unit strategy – Alma Markets
BUSINESS UNIT STRATEGY – PERFORMANCE Q1-Q3/2019 GOING INTO 2020 ALMA MARKETS • Recruitment services will be expanded: • Bosnia- Herzegovina/Kolektiv geographically, organically and through • Product and service expansion to Poland and M&A. Hungary • Sales focus more on SMEs • Growth slowing down, ma
Slide 29: Alma Talent – digitalization and restructuring improving profitability
Alma Talent – digitalization and restructuring improving profitability 18 Adjusted EBIT Profit margin % 14,9 % 16% Revenue, MEUR 14,2 % 16 12,9 % 14% 14 12% 10,9 % 12 10% 10 8% 114 113 8 15,5 15,6 109 105 14,6 6% 6 12,4 4 4% 2 2% 0 0% 2016 2017 2018 2019 * 2016 2017 2018 2019 * *Rolling 12 mn Q3/201
Slide 30: Revenue streams of Alma Talent
Revenue streams of Alma Talent FINANCIAL AND PROFESSIONAL SERVICES FOR BUSINESSES AND More MEDIA (61%) PROFESSIONALS (39%) towards Content sales/subscriptions: Business information services digital and digital and print Books and related digital content services Trainings and seminars delegate sales
Slide 31: Business unit strategy – Alma Talent
BUSINESS UNIT STRATEGY – PERFORMANCE Q1-Q3/2019 GOING INTO 2020 ALMA TALENT • Media business rapid digitalization, all • Today all Alma Talent media generate digital digital content behind paywalls by 2020 content revenue, we are ahead of target. Digital-only subscription growth +90%* - Kauppalehti
Slide 32: Alma Consumer – securing profits in declining print market
Alma Consumer – securing profits in declining print market Early morning paper distribution outsourcing deal with the Finnish Post to bring cost synergies in 2020-21 18 11,2 % 12% Revenue, MEUR Adjusted EBIT Profit margin % 16 9,7 % 9,5 % 10% 9,0 % 14 12 8% 10 6% 8 16,7 16,1 15,4 14,4 170 172 152 14
Slide 33: Revenue streams of Alma Consumer
Revenue streams of Alma Consumer NATIONAL AND REGIONAL DIGITAL CONSUMERS PRINTING (9%) MEDIA (88%) SERVICES (3%) Internal and external Content sales: Advertising customer sales digital and print subscriptions Subscriptions sales Commission fees Print single-copy sales Advertising sales Content marke
Slide 34: Business unit strategy – Alma Consumer
BUSINESS UNIT STRATEGY – PERFORMANCE Q1-Q3/2019 GOING INTO 2020 ALMA CONSUMER • Profitability ensurement and cost •Cost savings of approx. MEUR 3, adjustments. Strengthening of synergetic • Investment in Etua.fi (60%) service business both organically and through M&A. • Digital content sales expecte
Slide 35: Majority of advertising digital, tipping point in 2018
ALMA MEDIA SOLUTIONS Majority Of Advertising Digital, Tipping Point In 2018 M€ 140 120 100 59 48 43 97 65 80 80 73 66 Advertising in Finland 60 Advertising revenue, print Advertising revenue, digital 40 63 64 58 49 20 37 39 35 35 0 2012 2013 2014 2015 2016 2017 2018 2019 * *Rolling 12 months Q3/19 1
Slide 36: Business unit strategy – Alma Media Solutions
BUSINESS UNIT STRATEGY – PERFORMANCE Q1-Q3/2019 GOING INTO 2020 ALMA MEDIA SOLUTIONS •Aiming for above the average growth of • Slightly underperforming against the market domestic digital market. • Strategic growth areas expected to grow, print and •Focus areas mobile, programmatic and • Good growth
Slide 37: Strategy
Strategy
Slide 38: 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 39: Strong collaboration – value through synergies
Strong Collaboration – Value Through Synergies ALMA MEDIA DIGITAL ALMA DIGITAL DATA SOLUTIONS SUBSCRIPTIONS THEMES AUDIENCES 13/01/2020 39
Slide 40: M&A taps into new digital revenue pools
M&A Taps Into New Digital Revenue Pools ACQUISITIONS ● LMC ● Profesia ● Jobote ● AutoJerry ● Kotikokki ● MojPosao ● Autosofta ● Nettikoti ● Urakka- ● Katsastus- ● Suomen ● Tyrvään ● Cvonline ● Monster ● Talentum ● Rantapallo maailma.fi hinnat.fi Tukkuautot Sanomat ● E-kontakti.fi ● Alkali ● JMTieto
Slide 41: Long-term financial targets
Long-term financial targets Financial target Long-term target level Status at Q3/2019 Digital business growth% >12% 4.5% ROI% >17% 19% Divident payout ratio >50% Digital business growth Return on investment Dividend payout ratio (%) (%) ROI (%) 30% 25% 100% 25% 20% 80% 20% 15% 60% 15% 10% 40% 10% 5%
Slide 42: 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 43: Headwinds and tailwinds going into 2020
Headwinds and tailwinds going into 2020 Macro outlook softening, geopolitical uncertainties prevailing. Ongoing monetization of digital marketplaces, content and services to continue as well as leveraging digital capabilities through technology investments.
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