Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Investor Day (May 2003)
78 slides from Alma Media Oyj's investor day presentation, May 28, 2003
Slide 1: Alma Media Group Review
Alma Media Group Review Juho Lipsanen
Slide 2: Q103 Advertising Impacted by Elections
Q103 Advertising Impacted by Elections 25 % 20 % 15 % 10 % 5% 0% -5 % Newspapers -10 % Magazines TV -15 % Radio -20 % 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Q103 Source: TNS Gallup Oy Adex
Slide 3: Media Advertising Alma Media vs. Market
Media Advertising Alma Media vs. Market Change, % Market Alma Media Market Alma Media Q103 Q103 4/03 4/03 Newspapers*) 5.6 7.9 -1,3 % 3,1 % Business -19.0 -11.4 -33,0 % -29,8 % Papers Magazines -1.5 - 11,0 % - Television 6.2 6.0 -7,5 % -13,3 % Radio 18.7 34.0 35,5 % 21,6 % Internet 6.2 19.6 -8,3 % -
Slide 4: Net Sales Q101-Q103
Net Sales Q101-Q103, MEUR 140 128 130 130 126 125 120 120 120 117 108 111 110 100 90 80 70 Q101 Q201 Q301 Q401 Q102 Q202 Q302 Q402 Q103 Net Sales Rolling 4Q, MEUR
Slide 5: Net Sales by Division
Net Sales by Division 60 49,1 50 50 44,8 41,8 40 30 20 17,4 17,9 10,9 11,6 10 0 Alpress Broadcasting Business Information Media Services Group Net Sales Q102 Net Sales Q103, MEUR
Slide 6: EBIT Q101–Q103
EBIT Q101 –Q103, MEUR 20 6% 5% 15 10,1 10,3 4% 9,13 % 10 6,1 5 2% 1% 1% -0,1 0 0% 0% -5 -3,4 -2 % -2 % -10 -5,9 -7,6 -3 % -3 % -15 -4 % -4 % -20 -16,1 -6 % Q101 Q201 Q301 Q401 Q102 Q202 Q302 Q402 Q103 EBIT, MEUR Rolling 4Q % of Net Sales
Slide 7: EBIT Q102 and Q103 by Division
EBIT Q102 and Q103 by Division 10 6,8 5,5 6 2 1 0,5 0 -0,4 -2 -1,1 -0,8 -1,3 -6 -8,1 -10 Alpress Broadcasting Business Media Services Parent Information Group EBIT Q102 EBIT Q103, MEUR
Slide 8: Net debt 2001 – Q103
Net debt 2001 – Q103, MEUR Q101 Q201 Q301 Q401 1Q02 Q203 Q302 Q402 Q103 0 -20 -40 -60 -80 -100 -120 -140 Target –100 MEUR -160 -180
Slide 9: Cash flow 2001-Q103
Cash flow 2001- Q103, MEUR 40 20 0 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 -20 -40 -60 -80
Slide 10: Major Strategic Publicly Listed Share Holdings
Major Strategic Publicly Listed Share Holdings MEUR Talentum TV4 Total Acquisition Price 60 90 150 Book Value 31.3.2003 52 75 127 Market Value 31.3.2003 19 53 72 Market Value 26.5.2003 23 81 104 • TV 4 concession fee will disappear by 2008, 20 % annual decrease from 2004 • 2002 concession fee MSEK 4
Slide 11: Ownership strategy
Ownership strategy Basic principles: Over 90 % (Access to cashflow and industrial synergies) Lehdentekijät-Group (25% ->100 %) Below 20% (No consolidation) Sports Channel (50% - >19,9 %) Strategic investments TV4 AB 23,4 % Talentum Oyj 32,8 % Acta Print Oy 36,0 %
Slide 12: Share of Associated Companies' Results
Share of Associated Companies´ Results Q101 – Q103, MEUR 4 2,5 2 0 -0,7 -1,0 -2 -1,7 -2,3 -2,4 -2,1 -4 -3,3 -3,1 Q101 Q201 Q301 Q401 Q102 Q202 Q302 Q402 Q103 MEUR Rolling 4Q, MEUR
Slide 13: Associated Companies Q103
Associated Companies Q103 Talentum Oyj Net sales 28.7 (29.5) MEUR EBIT 1.2 (0.4) MEUR Net profit 0.4 (0.3) MEUR Company forecasts positive development to continue TV4 AB Sweden Net sales 546 (535) MSEK EBIT 6.8 (-40.7) MSEK (Q102 included 37 MSEK extraordinary licence fee) Net prof
Slide 14: Alpress Highlights
Alpress Highlights NET SALES Sales slightly up to 50.0 (49.1) MEUR 55 53,8 54 53 Alpress newspaper advertising + 7.9 %, 53 52,2 51,9 52 51,4 parliamentary elections in March raised 51 50 Alpress media advertising by 1 MEUR 50 49,7 49,1 49 48,3 EBIT up to 6.8 (5.5) MEUR 48 47 effective cost c
Slide 15: Broadcasting Highlights
Broadcasting Highlights NET SALES 60 Sales up to 44.8 (41.8) MEUR 48,8 50,4 50 45,1 45,9 44,8 41,8 increase in market share 40 40,1 36,6 34,3 due to active marketing and product 30 development Radio Novas sales increased 20 34 % 10 0 EBIT 0.0 (-8.1) MEUR Q101 Q201 Q301 Q401 Q102 Q202 Q302 Q4
Slide 16: BIG Highlights
BIG Highlights NET SALES Sales up to 11.6 (10.9) MEUR 14 12,1 11,6 11,6 11,3 11,5 12 10,9 10,9 media sales down in line with market 9,6 10 9,2 impact of new Lehdentekijät Group 1.5 MEUR 8 6 EBIT 0.5 (1.0) MEUR 4 Talentums impact –0.4 (- 0.4) MEUR 2 0 Key changes Q101 Q201 Q301 Q401 Q102
Slide 17: Media Services Highlights
Media Services Highlights NET SALES 25 23,1 Sales 17.9 (17.8) MEUR 21 18,9 19,8 19,1 20 17,9 17,4 17,8 17,8 Alprint sales down to 14.1 (14.7) MEUR due 15 to decreased exports 10 to Russia 5 classified services sales up to 2.0 (1.8) 0 MEUR Q101 Q201 Q301 Q401 Q102 Q202 Q302 Q402 Q103 EBIT neg
Slide 18: Targets
Business Information Targets ALMA | MEDIA
Slide 19: Financial Targets 2003
Financial Targets 2003 Group net sales slightly up Significantly higher operating profit No major trend changes in media markets during 2003 All divisions are expected to achieve at least 2002 operating profit level Focus on core businesses and profitability
Slide 20: Strategic targets
Strategic targets Long term targets equity ratio 45-55 % gearing 50 % cashflow > 10% of net sales productivity improvement 4-5 %/a #1 in media advertising #1 in multi channel media
Slide 21: Media Services Division
Media Services Division Raimo Mäkilä
Slide 22: Organization 1 Jan 2003, Media Services
Organization 1 Jan 2003, Media Services ALPRESS BROADCASTING Merger of Alprint Rahola and Edita Acta was signed in May 2003 BUSINESS INFORMATION GROUP ALPRINT MEDIA SERVICES CLASSIFIED Sales 70 M€ SERVICES Employees 450 NEW VENTURES ALMA MEDIA INFORMATION SYSTEMS
Slide 23: Media Services after Acta Print merger
Media Services after Acta Print merger New Ventures Sales 1.7 M€ 13 persons 36 % share of Acta Print Oy Information Systems Alprint Sales 6 M€ Sales 9 M€ 42 persons 66 persons Classified Services Sales 8 M€ 40 persons
Slide 24: Classified Services
Classified Services • Target • To become the dominant player in the classified online advertising market in Finland • Sales 7 M€ in 2002 • Services Etuovi.com (housing) Autotalli.com (vehicles) Dime.fi (vacant office space) Jobline.fi (recruiting) Asuntopörssi classified housing newspaper (Helsinki,
Slide 25: Popularity of classified online services on the rise
Popularity of classified online services on the rise, earnings based on number of visitors (excl. Jobline) Visitors per month 200 000 100 000 0 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 Etuovi (housing) Autotalli (vehicles) Jobline (recruiting)
Slide 26: Etuovi, Autotalli, Dime: indexed Q2 2001 – Q1 2003
Etuovi, Autotalli, Dime: indexed Q2 2001 – Q1 2003 2,0 20 % 1,5 1,5 1,3 15 % 1,2 1,1 1,0 1,0 1,0 0,8 10 % 0,7 0,5 0,3 5% 0,3 0,0 0,0 0% -0,1 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 -0,2 -0,5 -5 % -0,5 -0,5 -1,0 -10 % -1,0 -1,5 -15 % Net Sales EBIT EBIT %
Slide 27: Alma Media Information Systems
Alma Media Information Systems • Targets • To provide cost-effective services to Alma Media business divisions • To improve the standardization of the IT infrastructure • To continue to develop corporate-level systems in selected areas • legal systems, crm, payroll, etc. • Sales 5.5 M€ in 2002
Slide 28: New Ventures
New Ventures Targets To be a catalyst for new business development with business divisions To develop the value of current VC investments To develop and maintain IPR To improve the knowledge management of media business trends Sales 2 M€ in 2002 Services Tilt.tv and Ruokala.tv cross-
Slide 29: New Acta Print Oy
New Acta Print Oy Ritva Sallinen
Slide 30: Alprint
Alprint Target • To be a significant player in the Nordic and Russian markets • Rahola unit, sales over 50 M€ • Hyvinkää unit, sales approx. 9 M€
Slide 31: Alprint Rahola
Alprint Rahola Sales approx. 50 M€/a Personnel 300 Expanded to current structure in 2000 Pori + Vantaa + Tampere = Rahola 48 s MAN Roland heat-set offset printing press in 2000 Other investments prepress automatic plate production line cover finishing line summer 2003: advanced g
Slide 32: Alprint: indexed Q2 2001 – Q1 2003
Alprint: indexed Q2 2001 – Q1 2003 1,0 1,0 1,0 1,1 20 % 0,9 1,0 1,0 0,9 15 % 0,8 10 % 0,3 0,1 5% 0% -0,2 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 -0,1 0,0 -0,2 -5 % -0,3 -10 % -0,7 -0,4 -0,7 -15 % -1,2 -1,0 -20 % Net Sales EBIT EBIT %
Slide 33: Edita Acta Oy
Edita Acta Oy Sales approx 50 M€/a Personnel approx. 250 Production units Espoo, Kivenlahti (2 gravure printing presses) investments in 2003: gravure printing press and binding line Porvoo, Tarmola (3 web offset presses) modernized in 2001 Sales office in Helsinki
Slide 34: New Acta Print Oy (merger of Alprint Rahola and Edita Acta)
New Acta Print Oy (merger of Alprint Rahola and Edita Acta) Key figures Net sales 100 M€ Personnel approx. 550 Balance sheet total 70 M€ Equity ratio 40 % Ownership Edita Oyj 64 % Alma Media Corporation 36 % Key personnel CEO Markku Utti Deputy CEO Erkki Kulmala CFO Ritva Sal
Slide 35: Market situation
Market situation There are now three dominant players in the market Acta Print Hansa Print Helprint The magazine printing market in Finland has clearly contained excess capacity Unacceptable price levels Only slight growth is expected in domestic demand over the next few years The gr
Slide 36: Merger advantages
Merger advantages To become one of the leading printing companies in the Nordic market through know-how, service and versatility Only printing house in Finland offering both gravure and offset printing services Substantial synergy benefits Bigger size makes better product and service selecti
Slide 37: Acta Print Oy
Acta Print Oy Profitability MISSION VISION 2007 STRATEGY Acta Print Oy’s key operation area covers the The most sought -after co-operation partner • Focus on keeping the existing profitable customers. Nordic countries and Russia. The company in selected market segments. handles magazines, printed pr
Slide 38: Economic impact on Alma Media
Economic impact on Alma Media Balance sheet reduced by 17 M€ The 36% holding in Acta Print Oy will have a book value of 5 M€ in Alma Media’s balance sheet Return on invested capital will grow Net debt is diminished substantially Equity ratio improved by 2 % points (42 % at 31 March 2003)
Slide 39: Digital Strategy
Digital Strategy Mikko Räisänen Executive Vice President MTV Oy
Slide 40: Digital TV - Driving Forces
Digital TV - Driving Forces IN GENERAL DTV… • is the final step in the digitalization of the TV broadcast process • is by far the cheapest way to transmit video • improves picture and sound quality MTV/ALMA MEDIA • speeding the switch from analogue saves MTV 20 M€ /year • each DTV household reduces
Slide 41: MTV's Digital Strategy
MTV´s Digital Strategy DTV is an integral part of MTV, not a separate project Viewers into customers New revenues Reduce transmission costs
Slide 42: Review 2002
Review 2002 Expenditure: 10 -17 M€ depending on allocation of SubTV and infrastructure costs (incl. MTV3(D), MTV3+, SubTV, Sports Channel). Pure digital costs; content and distribution 4 M€ Sports Channel; ownership reduced from 50 % to 19,9 % All MTV3 brands under the same roof • all interactive me
Slide 43: Viewers into customers
Viewers Viewers intointo customers customers € Advertisers € € Interactive 3G New revenue
Slide 44: New revenue sources
New revenue sources pay TV, pay per x, games, access,… Consumer market € ???? M ”small advertising pie” € 1 000 M DM, below the line,… ”large advertising pie” € 2000 M
Slide 45: New revenue sources - potential
New revenue sources - potential Sales promotion, BTL Unadressed DM DM, recognize the viewer Adressed DM Movies, outdoor ”small advertising cake” € 1 000 M Internet ”large advertising cake” Radio € 2000 M TV Magazines Interactive advertising Free newsp./magaz. Classified ads Newspapers 0 100 200 300
Slide 46: Digital Service since Nov 2002
Digital Service since Nov 2002 SPORTS World Cup Alpine Ski, Ski Jumping, Freestyle National League Ice Hockey NEWS Kauppalehti financial news Iraq War; first 96 hours live signal from CNN MTV3+ CONTINUES TO ATTRACT CONSUMERS TO DIGITAL TV re-runs delayed MTV3 news, events,… additional programs only
Slide 47: Outlook 2003
Outlook 2003 Receiver market • Set top boxes and integrated TV sets available; basic DVB and interactive MHP versions • Penetration May -03: 90 to 100 000 (retailers estimate), monthly sales 10 – 15 000 units Channels • new licenses issued in March –03 • four new channels will start within 10 months
Slide 48: Outlook 2003
Outlook 2003 MTV • increase MTV3+ services • new MHP services will be introduced after summer • further integration of TV, DTV, web, mobile and selection of focus areas, based on earning logic and cash flow Expenditure • DTV is an integral part of business; no more a development project • Separate D
Slide 49: Available to all - in all relevant distribution channels
Available to all - in all relevant distribution channels Analog TV Cable, Terrestrial, Satellite Content and Digital TV services to all relevant distribution Dial-up, Broadband Internet 2G, Mobile SMS
Slide 50: Example: F1 game on web, mobile and TV
-example: F1 game on web, mobile and TV MTV3.fi with MOBILE MTV3.fi MTV3 NETWORK
Slide 51: Example: "do" since May 14, 2002
Example: ”do” since May 14,2002 -symbol on TV screen: Interactive application attached to the program Start with sport content - National League Ice Hockey and Formula 1 Nine other applications -Food, Interior and Lifestyle programs -Travel and Adventure Programs Additional content and TV viewing at
Slide 52: Future MTV3 offering
Future MTV3 will have several kinds of offering: 1. More online information 2. Gaming 3. Betting Advertisers will expand their marketing space: 1. Sponsorship elements 2. Promotions for digital TV sets owners 3. Links for advertiser`s content or superteletext sites
Slide 53: "Magneetti" Our New Conceptualized Client Approach
”Magneetti” Our New Conceptualized Client Approach Heikki Rotko Executive Vice President MTV Oy
Slide 54: Electronic media dominate daily media use
Electronic media dominate daily media use TV TV Radio Radio Internet Internet Newspapers Newspapers Free Freepapers papers Magazines Magazines Direct Directadvertising advertising Audio Audiorecords records Video Video Books Books Total 9 h 22 min Tv, radio and Internet: 76 % Source: Gallup Media In
Slide 55: Business environment
Business environment Main trends affecting our business 2003-2005 1. Electronic media are strengthening and their importance to customers are increasing. Time spent with electronic media is increasing. 2. Electronic media are increasing market share. Media advertising is increasing yearly with growt
Slide 56: Alma Media Broadcasting Division - strategic direction
Alma Media Broadcasting Division - strategic direction Alma Media Broadcasting is strategically well positioned to benefit from these changes Media consumption by consumers is in continuous change Media that offer a continuous presence will be winners B-to-B customers expect more comprehensi
Slide 57: Daily viewing minutes
Daily viewing minutes Finns watch television 2 hours 51 minutes per day Min/day Growth 4 min 180 171 168 167 160 150 150 150 161 140 130 136 137 141 108 107 124 120 100 80 60 40 20 0 Year 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: Finnpanel Oy, People-Meter Panel (
Slide 58: Electronic media complement each other
Electronic media complement each other Time of day when medium is followed, total population 12+ Television Radio Internet Teletext 80 60 40 20 0 Source: Gallup Media Intermedia Survey 2002
Slide 59: Role of electronic media
Role of electronic media Electronic media Dominant media used by consumers Complement each other: used at different times of the day Are present in consumers’ daily cycle, filling the need for both information and entertainment Enchant consumers by different means: rational, emotional, activ
Slide 60: Impact of electronic media
Impact of electronic media Emotion Commitment Short-term influence TV Long-term influence Activation Information
Slide 61: Impact of electronic media
Impact of electronic media Emotion Commitment Short-term influence TV Radio Long-term influence Activation Information
Slide 62: Impact of electronic media
Impact of electronic media Emotion Commitment Short-term influence TV Radio Internet Long-term influence Activation Information
Slide 63: Impact of electronic media
Impact of electronic media Emotion Commitment Short-term influence TV Radio Internet Teletext Long-term influence Activation Information
Slide 64: Impact of electronic media
Impact of electronic media Emotion Commitment Short-term influence TV Radio Internet Teletext Mobile and Long-term influence Activation direct advertising Information
Slide 65: How to increase revenue beyond classical advertising
How to increase revenue beyond classical advertising SMALL MEDIA PIE 1 M€ Internet / Mobile / Digi-tv *Advertising airtime *Direct e-mail *Banners *Mobile marketing *Programme *Games / chatting *Merchandising/licensing sponsorship *Mobile revenue *Service and content *Virtual communities co-operatio
Slide 66: Summary
Summary Consumer behaviour is changing constantly Consumers are spending more time with electronic media than ever Advertisers want more comprehensive solutions with less time spent than ever Selling and buying advertising space and time just doesn’t create enough added value Media compani
Slide 67: BIG: Focus on Growth
BIG: Focus on Growth Capital Markets Day 28 May 2003 Juha Blomster
Slide 68: BIG vision, mission and values
BIG vision, mission and values BIG vision BIG = Superiority in business information regardless of time and place. BIG mission Connecting businesses and people interested in financial affairs by producing and marketing versatile business information services profitably.
Slide 69: Business Information Group Business Intelligence
TALENTUM OYJ Business Information Group 33 % Business PRODUCT FAMILY Intelligence Starfunds Finland Oy morningstar.fi 51 % 51 %
Slide 70: Kauppalehti multiple media
Kauppalehti multiple media RADIO: 252 000 listeners/week TV: 780 000 viewers/broadcast PRINT: Kauppalehti, Optio, TEXT TV: 58 0000 regular users Extra, Saldo; 485 000 readers FLOW OF NEWS AND FLOW OF NEWS AND INFORMATION INFORMATION Super Desk Corporate intranets INTERNET: Kauppalehti Online, MOBILE
Slide 71: Multiple media in BIG
Multiple media in BIG Desk Chief Editors News Background information Kauppalehti AD Saldo Layout Extra Reporters Optio Daily layout Weekly layout Online TV Images, processing and editing Radio
Slide 72: Role of reporters
Role of reporters News agency Stock market commentator for the printed paper Market commentator on TV
Slide 73: Media complement each other 24 hours a day
Added value from users’ point of view Media complement each other 24 hours a day
Slide 74: Media usage at different times of the day
Media usage at different times of the day Decision-makers, private companies % 90 80 70 60 50 40 30 20 10 0 06-09 09-12 12-16 16-19 19-22 22-24 24-06 Kauppalehti Magazines TV/VCR Radio Internet Decision Makers’ Media Survey 2002, Suomen Gallup Media
Slide 75: Added value from advertisers' viewpoint
Added value from advertisers’ viewpoint “Advertisers believe that use of new technologies and advertising expenditures on them will grow significantly. However, there is confusion in the supply chain about how interactive media should be used in the marketing mix of advertisers.” Analysis of success
Slide 76: Marketing mix of print, online and mobile in Kauppalehti
Marketing mix of print, online and mobile in Kauppalehti
Slide 77: Benefits in multi channel publishing
Benefits in multi channel publishing Efficiency Better information flow Total savings Marketing Readers can be reached around the clock, top-of-mind priority Competitive advantages, less price competition New product and target group possibilities Personnel Job rotation (20 % of th
Slide 78: "It is not the strongest that survive…"
“It is not the strongest that survive…but those most responsive to change.” Darwin