Alma Media’s Interim Report January–September 2015: Operating profit excluding non-recurring items increased in the third quarter


Alma Media Corporation      Interim Report       23 October 2015 at 9:00 a.m.
(EEST)

Alma Media’s Interim Report January–September 2015:

OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS INCREASED IN THE THIRD QUARTER

Financial performance July–September 2015:

– Revenue was MEUR 68.0 (70.5), down 3.5%.

– Online sales increased by 9.5% to MEUR 24.2 (22.1).

– EBITDA (Earnings before interest, taxes, depreciation and amortisation)
excluding

non-recurring items MEUR 11.0 (10.4), up 5.7%.

– EBITDA was MEUR 10.8 (9.9), up 9.5%.

– Operating profit excluding non-recurring items was MEUR 7.6 (7.0) or 11.1%
(9.9%) of revenue, up 8.2%.

– Operating profit MEUR 6.0 (6.5) or 8.8% (9.2%) of revenue, down 7.5%.

– Profit for the period was MEUR 3.7 (4.8), down 23.2%.

– The operating profit for July–September includes non-recurring items of MEUR
-1.6 (-0.5).

– Earnings per share EUR 0.04 (0.06).

Financial performance in January–September 2015:

– Revenue was MEUR 212.9 (218.8), down 2.7%.

– Online sales increased by 5.9% to MEUR 73.6 (69.6).

– EBITDA (Earnings before interest, taxes, depreciation and amortisation)
excluding

non-recurring items MEUR 26.6 (26.2), up 1.4%.

– EBITDA was MEUR 28.4 (26.2), up 8.4%.

– Operating profit excluding non-recurring items was MEUR 16.3 (15.8) or 7.7%
(7.2%) of revenue, up 3.3%.

– Operating profit MEUR 16.8 (15.8), or 7.9% (7.2%) of revenue, up 6.1%.

– Profit for the period was MEUR 11.8 (11.7), up 1.2%.

– The operating profit for January–September includes non-recurring items of
MEUR 0.5 (0.0).

– Earnings per share EUR 0.13 (0.14).

KEY FIGURES  2015  2014  Change        2015   2014   Change       2014
MEUR         Q3    Q3           %      Q1–Q3  Q1–Q3        %      Q1–Q4
Revenue      68.0  70.5  -2.5   -3.5   212.9  218.8  -5.9  -2.7   295.4
Content      25.3  28.0  -2.7   -9.7   75.4   82.4   -7.0  -8.5   110.1
revenue
             23.8  26.6  -2.9   -10.8  70.8   78.4   -7.7  -9.8   104.6
Content
revenue,
print
             1.6   1.4   0.2    11.1   4.7    4.0    0.7   17.3   5.6
Content
revenue,
online
Advertising  33.1  33.5  -0.4   -1.2   106.3  107.8  -1.5  -1.4   146.4
revenue
             14.0  16.3  -2.3   -14.3  48.6   53.9   -5.4  -10.0  73.7
Advertising
revenue,
print
             19.1  17.2  1.9    11.2   57.7   53.8   4.0   7.5    72.7
Advertising
revenue,
online
Service      9.6   8.9   0.7    7.5    31.2   28.6   2.6   9.1    38.8
revenue
Total        60.6  63.5  -2.9   -4.5   197.0  203.4  -6.4  -3.1   274.6
expenses
excluding
non
-recurring
items
EBITDA       11.0  10.4  0.6    5.7    26.6   26.2   0.4   1.4    35.1
excluding
non
-recurring
items
EBITDA       10.8  9.9   0.9    9.5    28.4   26.2   2.2   8.4    36.4
Operating    7.6   7.0   0.6    8.2    16.3   15.8   0.5   3.3    21.4
profit
excluding
non
-recurring
items
% of         11.1  9.9                 7.7    7.2                 7.2
revenue
Operating    6.0   6.5   -0.5   -7.5   16.8   15.8   1.0   6.1    20.7
profit
(loss)
% of         8.8   9.2                 7.9    7.2                 7.0
revenue
Profit for   3.7   4.8   -0.8   -23.2  11.8   11.7   0.1   1.2    15.7
the period
Earnings     0.04  0.06  -0.02  -28.4  0.13   0.14   0.00  -1.9   0.19
per share,
EUR
(basic)
Earnings     0.04  0.06  -0.02  -28.4  0.13   0.14   0.00  -1.9   0.19
per share,
EUR
(diluted)

Online       24.2  22.1  2.1    9.5    73.6   69.6   4.1   5.9    94.5
sales
Online       35.6  31.4                34.6   31.8                32.0
sales, % of
revenue

Outlook for 2015:

Low interest rates, a weaker euro and lower oil price improve the chances for
growth in the long run. However, in 2015, economic growth is still expected to
remain weak in Europe and, in particular, in Finland. The weak economic
development has an impact on advertising volume, which is not expected to
increase in Finland in 2015.

Alma Media expects its revenue to decrease in 2015 and operating profit
excluding non-recurring items to remain unchanged or decrease from the 2014
level. The full-year revenue 2014 was MEUR 295.4, and operating profit excluding
non-recurring items was MEUR 21.4.

Kai Telanne, President and CEO:

Alma Media’s third quarter 2015 was in line with our expectations. The Group’s
revenue decreased by 3.5% to MEUR 68, which was primarily due to divestments.
Operating profit excluding non-recurring items increased by 8% year-on-year to
MEUR 7.6. Alma Media has focused on the growth and development of digital
products and services. In the third quarter, they grew to account for 35 per
cent of Group revenue. The Group’s relative profitability has improved as a
result of streamlining operations, implementing operational changes and
divesting unprofitable businesses. Alma Media’s goal remains to accelerate its
growth in digital services and media.

In July–September, Finland’s subdued economic development and the weak
advertising market posed challenges to Alma Media’s domestic units. However,
foreign operations continued to achieve good results with their share of Group
revenue increasing to 16 per cent. In particular, the growth of the national
economies of Eastern Central Europe and active labour markets in the region
supported the growth of Alma Media’s digital recruitment service business. The
recruitment business grew by nearly 27% in the third quarter and its
profitability was at a good level. The domestic marketplaces business maintained
its revenue at the previous year’s level and its profitability improved as a
result of cost savings.

As in the previous quarter, the growth of the Financial Media and Business
Services segment was attributable particularly to JM Tieto, which builds
marketing and sales concepts for B2B companies. The business unit’s
profitability was at the same level as in the previous year in spite of the
challenging domestic market situation. The customer media and content marketing
provider Alma 360 was sold to Otavamedia at the beginning of October. The
decision to divest the business was based on a reassessment of the segment’s
business priorities and refocusing its operations.

Revenue continued to decline in the National Consumer Media segment,
particularly in print media. However, the decline in digital advertising revenue
slowed and there were positive signs in mobile advertising. The decrease in
profitability slowed down compared to the first two quarters, particularly as
volume-linked printing and distribution costs as well as content acquisition
costs declined.

In the Regional Media segment, profitability remained at the previous year’s
level thanks to streamlining measures in publishing operations and the improved
efficiency of the printing facility. The Group has decided to continue to
implement measures to enhance operational efficiency, as the segment’s profit
performance has declined substantially in recent years due to the decline in
revenue significantly outpacing the reduction in costs.

During the review period, Alma Media renewed its Group-level media sales model
in order to improve its competitiveness and agility in the shifting media sector
landscape. A centralised operating model enables the realisation of new Alma
-level products and customer-specific, unique solutions especially in digital
format. Buying Finland’s best media solutions will become easier, faster and
more flexible for customers.

Alma Media’s financial position has strengthened further. The equity ratio was
45% at the end of September, and the gearing ratio was at a good level at under
60%. This provides a solid foundation for continued investments in growth and
internationalisation.

The most significant event for Alma Media during the review period—and major
news for the Finnish media sector as a whole—was Alma Media’s and Talentum’s
announcement of the combination of the companies, and Alma Media’s subsequent
exchange offer for all of Talentum’s issued shares and option rights. The
combination of the companies is aimed at strengthening the competitiveness of
Finnish decision-maker media and ensuring the future of high-quality business
journalism as well as information and business services against the backdrop of
intensifying global competition and Finland’s economic situation, which appears
likely to remain weak. The multichannel media company created by the combination
will be in an excellent position to develop increasingly diverse services for
attractive target groups as well as more profitable business.

For more information, please contact:

Kai Telanne, President and CEO, telephone +358 10 665 3500

Juha Nuutinen, CFO, telephone +358 10 665 3873

Conference, webcast and conference call:

A conference for Finnish media, investors and analysts will be held on the same
day at 11.00–12.00 EEST in the Alma House (address: Alvar Aallon katu 3 C,
Helsinki). In addition to the presentations held by President & CEO Kai Telanne
and CFO Juha Nuutinen, participants will have an opportunity to discuss with
other members of the company's management. Please note that the conference will
be held in Finnish. The presentation material in English will be available on
www.almamedia.com/press_room/downloads/presentations/ at 11.00 EEST.

To participate in the conference, kindly register beforehand by e-mail,
kutsut@almamedia.fi.

An international conference call and audio webcast concerning the financial
result of January-September 2015 will begin at 13.00 EEST. You can participate
in the conference by calling + 44(0)20 3427 1908 (confirmation code: 9806947) or
follow the direct transmission at
www.almamedia.com/press_room/downloads/presentations/.

ALMA MEDIA CORPORATION

Board of Directors

Distribution: NASDAQ OMX Helsinki, main media, www.almamedia.com

Alma Media in brief

Alma Media is a media company focusing on digital services and publishing. In
addition to news services, the company’s products provide useful information
related to lifestyle, career and business development. The services of Alma
Media have expanded from Finland to the Nordic countries, the Baltics and
Central Europe. In 2014, the company employed an average of 1,830 professionals
(excluding deliverers), of whom approximately one quarter worked outside
Finland. Alma Media’s revenue in 2014 totalled approximately EUR 295 million.
Alma Media’s share is listed on NASDAQ OMX Helsinki. Read more at
www.almamedia.com.

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