Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Q3 2019 Earnings Presentation
29 slides from Alma Media Oyj's earnings presentation, 2019
Slide 1: Alma Media Q3/2019
Alma Media Q3/2019 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 Q3/2019
Alma Media Q3/2019 • Good development of profitable growth continued also in Q3 due to higher digital sales and effective cost control, operating margin was 20.1 %. • For the first time the growth in digital content sales exceeded the decline in print media content sales at Group level. -1.6% +6.7%
Slide 4: In Q3 revenue and earnings improved in Alma Markets
In Q3 revenue and earnings improved in Alma Markets 0.9 -0.8 -1.4 Revenue 81.6 80.3 (MEUR) Q3 Q3 2018 Alma Markets Alma Talent Alma Consumer Q3 2019 1.2 0.1 -0.7 0.4 Adjusted operating 15.1 16.1 profit (MEUR) Q3 Q3 2018 Alma Markets Alma Talent Alma Group Q3 2019 Consumer operations 4
Slide 5: Profitability improved in all segments in Q1-Q3
Profitability improved in all segments in Q1-Q3 3.4 -4.3 -7.5 Revenue (MEUR) Q1-Q3 262.7 253.3 Q3 18 YTD Alma Markets Alma Talent Alma Consumer Q3 19 YTD 0.1 1.7 0.5 2.8 Adjusted operating 40.2 45.4 profit (MEUR) Q1-Q3 Q3 18 YTD Alma Markets Alma Talent Alma Group Q3 19 YTD Consumer operations 5
Slide 6: Digital business revenue steadily increasing, growth stabilizing
Digital business 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% 133 131 13.1% 9.8% 95 104 10 78 8
Slide 7: Operating environment
OPERATING ENVIRONMENT
Slide 8: Finnish advertising market continues to be soft
Finnish advertising market continues to be soft 15% OTHER FINNISH A-LEHDET MEDIA 1 % (2%) COMPANIES 10% 11 % (11%) 5% ALMA MEDIA 29 % (30%) 0% Appr. -5% 143 MEUR -10% SANOMA MTV MEDIA -15% 41 % (39%) 8 % (7%) OTAVAMEDIA 10 % (11%) Advertising sales total, chg % Newspaper advertising, chg % Online ad
Slide 9: Recruitment and housing advertising figures in the red territory in Q4/2018–Q3/2019
Recruitment and housing advertising figures in the red territory in Q4/2018–Q3/2019 Q4 2018 vs 2017 Q1 2019 vs 2018 Q2 2019 vs 2018 Q3 2019 vs 2018 Retail -3,8 % Retail -3,3 % Retail 9,3 % Retail -1,2 % Motor v. -7,6 % Motor v. -5,2 % Motor v. -1,2 % Motor v. 0,0 % Food & bev. 9,8 % Food & bev. -7,4
Slide 10: 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 11: Development by business segments
DEVELOPMENT BY BUSINESS SEGMENTS
Slide 12: Alma Markets Q3/2019: Excellent level of profitability
Alma Markets Q3/2019: Excellent level of profitability • Revenue +3.8 % to MEUR 24.9. Recruitment revenue continued to increase, but a slower rate as uncertain economic outlook impacted the job listings market. Positive trend in the housing and car businesses in Finland continued. The demand for add
Slide 13: Alma Talent Q3/2019: Good level of digital content sales in Finland continued, advertising down
Alma Talent Q3/2019: Good level of digital content sales in Finland continued, advertising down • Revenue -3.3 % to MEUR 22.3. Revenue weighed down by sectors sensitive to economic fluctuation (recruitment, automotive and IPO advertising) and training services. • Finnish financial and professional m
Slide 14: Alma Consumer Q3/2019: Challenging for print media advertising sales
Alma Consumer Q3/2019: Challenging for print media advertising sales, strong digital revenue sales continued • Revenue -4.0% to MEUR 33.9. Advertising down in automotive and jobs advertising. Regional sales of print supplements lower y-on-y. Service revenue down due to a decline in the volume of ext
Slide 15: Financial position
FINANCIAL POSITION
Slide 16: 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 17: 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 18: EPS
EPS • Earnings per share in Q3/2019 were EUR 0.14 (EUR 0.12). Adjusted items in Q3/2019 MEUR -0.4 (Q3/2018: MEUR -0.6). 0,16 0,14 0,12 0,10 . EUR 0,08 0.15 0.14 0,06 0.12 0.12 0.12 0.12 0.12 0.11 0,04 0,02 0.04 0,00 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19
Slide 19: Strong cash flow continued
Strong cash flow continued • 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. An additional
Slide 20: Implementation of IFRS 16 standard 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 21: 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 22: Strategy and outlook
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Slide 23: 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 24: 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 25: 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 26: Majority ownership in Etua.fi
Majority ownership in Etua.fi • Alma’s digital marketplace business has expanded to include various comparison and competitive tender services • Stake in Etua.fi, a provider of competitive tender services for loans and insurance increased to 60 % in July. • First on the market to compare consumer cr
Slide 27: 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 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 • Financial Statement Bulletin for financial year 2019 on Friday, 14 February 2020 • Interim report for January–March 2020 on Tuesday, 21 April 2020 • Interim report for January–June 2020 on Friday, 17 July 2020 • Interim report for Janu