Alma Media Corporation Annual General Meeting Review by the President & CEO March 14, 2013
Contents Contents of of the the review review Contents of the review Alma Alma Media today today The The advertising advertising market market 2012 2012 The Strategic advertising actions market 2012 2012 Strategic Strategic Financial actions actions result 2012 Financial Alma Media s Financial result year result 20122013 and ahead 2012 Alma Alma Media s Media s year year 2013 2013 and and ahead ahead
Alma Media today
NORDICS BALTICS CENTRAL EUROPE Alma Media is a dynamic media company focusing on digital services and publishing. 01. NEWS 02. LIFESTYLE 03. CAREER 04. BUSINESS 4 5.7.2015
OPERATING PROFIT MEUR 33.5 REVENUE 2012 MEUR 320 ALMA EMPLOYEES approximately 1,950 (excluding newspaper deliverers) 5 5.7.2015
Alma Media goes international 01. Recruitment services in the Baltic countries, Czech Republic, Slovakia and Croatia. 02. News agency and home marketplace in the Baltic countries. 03. Commercial premises marketplace in Sweden. 04. Marketplace for used heavy machinery in 35 countries. Outside Finland 18% Outside Finland 585 employees SALES BY REGION STAFF BY REGION 6 11/5/12 Nordea Media Seminar
DIGITAL CONSUMER SERVICES MEUR 56.5 NEWSPAPERS Other KAUPPALEHTI GROUP MEUR 206.6 Digital Consumer Services Kauppalehti Group MEUR Newspapers 56.9 REPORTING SEGMENTS 7 5.7.2015
NEWSPAPERS 6% Share of digital revenue in segment s total revenue Iltalehti Alma Regional Media Revenue 2012 (2011): MEUR 206.6 (218.3) 12.4% Operating margin excluding non-recurring items 8 5.7.2015
KAUPPALEHTI GROUP BNS 26% Share of digital revenue in segment s total revenue Alma360 Kauppalehti Kauppalehti Information Services Revenue 2012 (2011): MEUR 56.9 (56.7) 10.1% Operating margin excluding non-recurring items 9 5.7.2015
DIGITAL CONSUMER SERVICES 100% Alma Diverso 13.1% Share of digital revenue in segment s total revenue Marketplaces Revenue 2012 (2011): MEUR 56.5 (42.1) Operating margin excluding non-recurring items 10 5.7.2015
The advertising market 2012
Cyclical changes affect advertising volume 15% 10% 5% 0% -5% -10% -15% -20% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Annual GDP change Annual advertising volume change Sources: Statistics Finland, Finnish Advertising Council, TNS 12 11/5/12 Nordea Media Seminar
Only online advertising grew in 2012 Change % Q4/2011 vs. Q4/2012 Newspapers -8.8 Magazines -14.0 Television -3.4 Radio -7.1 Online +13.9 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Newspapers Online adv ertising Total change -5.3 13 11/5/12 Nordea Media Seminar
Strategic actions 2012
International acquisitions 60 50 40 30 20 10 0 Liikevaihto Revenue from Suomen ulkopuolella outside Finland 2009 2010 2011 2012 LMC CV Online Growth of digital business accelerated through international acquisitions in 2012. Investment in acquisitions totalled EUR 72 million. Tau-online Profesia Infostud (30%) Development Studio (30%) Average EBITDA of acquired recruitment services nearly 30% in 2012.
Strong in recruitment NUMBER ONE IN FINLAND AND ESTONIA LATVIA LITHUANIA CZECHIA SLOVAKIA CROATIA 75% 80% 50% market share 40 70% 95% Largest market actor in all countries of operation. Synergies between countries: - Product development - Product offering - Competence exchange - Customer relations - Market leadership
Acquisitions accelerate digital growth LMC CV Online Profesia Tau-online E-Kontakti 24% Telkku Kotikokki 6% Alma Media s most significant digital business acquisitions and share of digital revenue in consolidated revenue. 2005 2006 2007 2008 2009 2010 2011 2012 17 11/5/12 Nordea Media Seminar
Digital content through subscription Kauppalehti overhauled the content of its print version in May 2012. At the same time, the content was separated from the digital offering. Kauppalehti.fi was the first to introduce a paywall in Finland. Paywalls will become more common in Alma s media in 2013.
Regional paper Efficient operating model for Regional Media Cooperating with: Ilkka Pohjalainen Subscription-based local paper Nationwide joint editorial desks produce, for example: - Sports news - Foreign news - Political news - Utility content Local editorial offices genuinely focus on content.
The world s best printing press Replacement investment in Tampere printing facility is being commissioned. Production will start in April. The new press is capable of printing three newspapers simultaneously. The new printing facility in Tampere operates 50% more efficiently than the old one, being one of the world s most modern in its class.
Financial result 2012
Revenue and operating profit 2011 2012 Revenue MEUR Operating profit MEUR Non-recurring items
Cash flow remained good 30,0 25,0 MEUR 20,0 15,0 10,0 5,0 0,0-5,0 12,3 20,3 11,3 Cash flow remained at normal average level. VAT increase for print newspapers at end of 2011 brought in advance payments. -10,0 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Veronpalautus Tax returns and ja ennakon supplementary täydennykset tax payments 23 11/5/12 Nordea Media Seminar
Investment phase reflected in increased net debt Acquisitions of digital businesses increased gearing to 73.7% and decreased equity ratio to 36.7%. 24 11/5/12 Nordea Media Seminar
Balance sheet liabilities increase through new printing press MEUR Q42012 Q42011 Intangible assets 118.2 40.5 Tangible assets 41.3 23.0 Share of associated companies 31.3 35.0 Current assets 0.7 1.0 Receivables 36.4 40.6 Cash 17.1 57.8 Assets 245.1 198.0 Equity 84.5 96.7 Compulsory provisions 0.5 1.2 Pension obligations 2.4 2.6 Interest-bearing debt 79.4 25.5 Non-interest bearing debt 63.5 43.8 Short-term advance payments 14.8 28.2 Liabilities 245.1 198.0 Leasing liability from Tampere printing press investment (approx. MEUR 47) will be shown on balance sheet H1 2013. 25 11/5/12 Nordea Media Seminar
Dividend history 2005 2012 Dividend 1 and effective dividend yield 2005-2011 2005 2006 2007 2008 2009 2010 2011 2012 Dividend 1, EUR 0.65 0.65 0.90 0.30 0.40 0.70 0.40 0.10 Effective dividend yield 1 Dividend and repayment of capital, total 7.0 % 7.7 % 6.1 % 5.3 % 5.3 % 8.5 % 6.5 % 2.2 % Proposed distribution of profit for 2012 EUR 0.10 per share. 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 Div Osinko idend / per osake share Tulos Earnings / osake per share 2007 2008 2009 2010 2011 2012 Effective dividend yield 2.2% (share price Dec 31, 2012, 4.55 per share). 26 11/5/12 Nordea Media Seminar
Alma Media s year 2013 and ahead 27 11/5/12 Nordea Media Seminar
Significant changes in business structure Source of revenue Advertising Print Digital Share of revenue 2012 50% 30% 19% Change in revenue 2011 2012 + 4% - 12% + 43% Circulation 37% - 6% Content and service sales 13% + 4% Effects on change: economic cycle shift of advertising and media consumption from print to digital channels 28 11/5/12 Nordea Media Seminar
Accelerating growth of digital media 30 % 25 20 15 10 5 0 MEUR 80 70 60 50 78 40 57 30 49 44 36 40 20 27 17 10 0 2005 2006 2007 2008 2009 2010 2011 2012 90 Share of print media in Alma Media revenue now 68%, but declining. Digital services and online advertising have a significant, rapidly growing share in Alma Media s revenue and financial result. Share of digital revenue in Group revenue, MEUR and % 29 11/5/12 Nordea Media Seminar
Strategy implementation 2013 DIGITAL GROWTH Growing service businesses. Integrating businesses outside Finland. AGILE GROUP Strategic flexibility. Leadership competence. Understanding of digital business. Data systems. NEW LIFE FOR PRINT Ensuring cash flow from multi-media publishing. Exploiting new print investment. Distribution efficiency. 30 30 11/5/12 Nordea Media Seminar
Thank you!