2008-10-29 08:00:00 CET
2008-10-29 08:04:37 CET
REGULATED INFORMATION
Alma Media - Interim report (Q1 and Q3)
Alma Media Corporation's Interim report for January-September 2008: Net sales increased, investments in online business and slower advertising sales weighed on result
Alma Media Corporation Stock Exchange Release October 29, 2008 at
9:00am (EET)
ALMA MEDIA CORPORATION'S INTERIM REPORT FOR JANUARY-SEPTEMBER 2008:
NET SALES INCREASED, INVESTMENTS IN ONLINE BUSINESS AND SLOWER
ADVERTISING SALES WEIGHED ON RESULT
July-September 2008 in brief:
- Net sales MEUR 81.4 (Q3/2007: MEUR 77.5)
- Operating profit MEUR 12.2 (13.4)
- Operating profit 15.0% (17.3%) of net sales
- Operating profit for the comparison period includes a one-time
capital gain of MEUR 0.7
- Profit before taxes MEUR 12.1 (13.9)
- Earnings per share EUR 0.11 (0.14)
- Outlook for the remainder of the year unchanged
Kai Telanne, President and CEO:
Alma Media's business developed as expected during the third quarter,
despite growing uncertainty in the national economy and the media
market. The Group net sales increased 5% over the same period last
year, but the operating profit fell behind. The result was affected
by factors such as continuing investments in online businesses and
slowing advertising sales.
Advertising sales for the Group's newspapers continued to grow in the
third quarter. Of the largest newspapers, I am satisfied with
Iltalehti's performance in particular: it succeeded both in growing
its advertising sales significantly and improving its market share in
a very competitive environment. Advertising sales for Lapin Kansa
also developed favourably. Aamulehti's advertising sales remained at
the previous year's level.
Kauppalehti enjoyed a strong quarter with positive development in
advertising sales, online business and profitability. In the third
quarter, Kauppalehti also reached new circulation and visitor
records.
The growth of Marketplaces' net sales slowed down due to the softened
recruitment market. The general economic uncertainty has caused
companies to postpone their recruitment decisions, which has slowed
the growth of Monster.fi sales. Our investment in the Mikko.fi
business in Finland and the City24 home sales services in Eastern
Europe decreased the operating profit of Marketplaces. The
investments will continue to affect the profitability of the
Marketplaces segment in the fourth quarter. As the markets for home
sales, car sales and recruitment are becoming quieter in Finland as
well as in other countries, the growth of Marketplaces will probably
slow down and its profitability decline.
Advertising sales for our newspapers in the fourth quarter are
supported by local election advertisement as well as new retail store
openings.
Forecasting the advertising sales development in the fourth quarter
has become more difficult due to slowing economic growth and the
financial markets turmoil.
More information:
Kai Telanne, President and CEO, telephone +358 10 665 3500
Tuomas Itkonen, CFO, telephone +358 10 665 2244
Conference, webcast and conference call:
The company will hold a conference in Finnish concerning its
third-quarter results starting at 11:00am on October 29, 2008 in the"Carl" conference room of the Scandic Marski hotel at the address
Mannerheimintie 10, Helsinki. The results will be presented by Kai
Telanne, President and CEO, and Tuomas Itkonen, CFO.
A webcast in English will start at www.almamedia.fi at 1:00pm (EET).
A conference call in English for investors and analysts will start at
1:30pm (EET). Please call +44 (0)20 7162 0125 to participate.
Rauno Heinonen
Vice President, Corporation Communications and IR
Alma Media Corporation
DISTRIBUTION
Nasdaq OMX Helsinki
Principal media
ALMA MEDIA CORPORATION'S INTERIM REPORT JANUARY 1-SEPTEMBER 30, 2008
Comparisons in accordance with the International Financial Reporting
Standards (IFRS) are made with the corresponding period in 2007,
unless otherwise stated. The figures in this interim report are
unaudited. The figures in the tables are independently rounded.
CHANGES IN GROUP STRUCTURE COMPARED TO 2007
On February 20, 2008 Alma Media purchased the entire stock of Jadecon
Oy. The company's business includes Telkku.com, an online TV listing
service, and is reported under the Newspapers segment as part of
Iltalehti.
On September 1, 2008 Suomen Paikallissanomat Oy acquired the business
of Rannikkoseudun Sanomat, the publisher of the Rannikkoseutu
newspaper.
GROUP NET SALES AND RESULT JANUARY-SEPTEMBER 2008
The Group's net sales from January to September 2008 totalled MEUR
254.7 (243.4). The net sales for the comparison period included the
advertising for the Finnish parliamentary elections in March 2007 in
the amount of MEUR 1.5. Net sales of the Newspapers segment were MEUR
175.6 (171.4), of the Kauppalehti Group MEUR 54.5 (51.0) and of the
Marketplaces segment MEUR 26.9 (22.9).
The operating profit of the Alma Media Group in January-September was
MEUR 38.8 (43.8). The operating profit of the review period includes
a one-time capital gain of MEUR 0.6 from the sale of a property. The
operating profit for the comparison period includes a one-time
capital gain or MEUR 2.6.
The operating profit for the review period, excluding one-time items,
was MEUR 38.2 (41.2).
GROUP NET SALES AND RESULT JULY-SEPTEMBER 2008
During the review period, Alma Media's net sales increased by 5.0%
over the corresponding period in the previous year, totalling MEUR
81.4 (77.5).
The Group's operating profit was MEUR 12.2 (13.4), which is 15.0%
(17.3%) of net sales. The comparison period includes a one-time
capital gain of MEUR 0.7.
OUTLOOK FOR 2008
Alma Media expects its net sales to grow from the previous year. The
comparable operating profit for the whole year is expected to be at
the same level as in 2007.
MARKET CONDITIONS
According to estimates available at the time of writing the report,
the gross national product of Alma Media's main market, Finland, is
expected to grow on average 2.5% in 2008. Finland's economic growth
is slowing down rapidly.
In its latest Economic Survey (September 2008), the Ministry of
Finance expects inflation to gradually slow down next year and the
purchasing power of households to increase by 3.5% in 2009. The
continuing weakness of the international economy, however, increases
the vulnerability of the Finnish economy.
In January-September, advertising expenditure in newspapers decreased
by 0.6%. During the same period, online advertising increased by
27.5%. In January-September, the circulation market for afternoon
papers diminished by 6.6%.
KEY FIGURES
2008 2007 2008 2007 2007
MEUR Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Net sales 81.4 77.5 254.7 243.4 328.9
Operating profit 12.2 13.4 38.8 43.8 64.4
% of net sales 15.0 17.3 15.3 18.0 19.6
Net financial expenses 0.2 0.1 -0.1 0.0 -0.1
Net financial expenses, % of net
sales 0.2 0.1 -0.0 0.0 0.0
Share of associated companies'
results 0.0 0.6 1.8 2.1 3.5
Balance sheet total 166.5 192.5 166.5 192.5 181.3
Gross capital expenditure 1.5 2.9 11.6 8.3 12.1
Gross capital expenditure, % of
net sales 1.8 3.8 4.6 3.4 3.7
Equity ratio 54.2 58.1 54.2 58.1 69.8
Gearing, % 24.6 0.8 24.6 0.8 -15.2
Interest-bearing net debt 19.8 0.8 19.8 0.8 -17.9
Interest-bearing liabilities 25.3 21.6 25.3 21.6 6.8
Non-interest-bearing liabilities 60.8 69.4 60.8 69.4 56.2
Average no. of personnel,
calculated as full-time
employees, excl. delivery staff 2,039 2,027 1,988 1,994 1,971
Average no. of delivery staff 1,045 1,041 987 980 962
Earnings/share, EUR
(basic) 0.11 0.14 0.40 0.46 0.68
Earnings/share, EUR
(diluted) 0.11 0.14 0.39 0.46 0.68
Cash flow from operating
activities, EUR 0.08 0.09 0.51 0.61 0.70
Shareholders' equity/share, EUR 1.07 1.35 1.07 1.35 1.58
Market capitalization 604.4 877.7 604.4 877.4 870.7
Average no. of shares (1,000
shares)
- basic 74,613 74,613 74,613 74,613 74,613
- diluted 74,769 74,783 74,789 74,757 74,773
No. of shares at end of period
(1,000 shares) 74,613 74,613 74,613 74,613 74,613
2008 2007 2008 2007 2007
NET SALES BY SEGMENT, MEUR Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Newspapers 57.1 55.0 175.6 171.4 230.6
Kauppalehti Group 16.5 15.5 54.5 51.0 70.1
Marketplaces 8.4 7.6 26.9 22.9 30.9
Other operations and eliminations -0.6 -0.6 -2.3 -1.9 -2.7
Total 81.4 77.5 254.7 243.4 328.9
2008 2007 2008 2007 2007
OPERATING PROFIT/LOSS BY SEGMENT, MEUR Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Newspapers 10.0 10.4 31.0 33.4 42.8
Kauppalehti Group 2.5 1.5 7.6 5.4 7.6
Marketplaces 1.0 1.3 3.0 4.1 5.3
Other operations and eliminations -1.3 0.2 -2.8 0.9 8.7
Total 12.2 13.4 38.8 43.8 64.4
NEWSPAPERS SEGMENT
Newspapers, key figures, MEUR 2008 2007 2008 2007 2007
Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Net sales 57.1 55.0 175.6 171.4 230.6
Circulation sales 28.3 27.2 81.5 80.0 106.9
Media advertising sales 26.5 25.4 86.4 83.0 112.6
Printing sales 0.9 1.1 3.2 4.2 5.4
Other sales 1.4 1.3 4.5 4.1 5.7
Operating profit 10.0 10.4 31.0 33.4 42.8
Operating margin, % 17.4 18.9 17.7 19.5 18.5
Gross capital expenditure 0.7 1.1 4.0 4.9 6.0
Average no. of personnel,
calculated as full-time
employees, excl. delivery staff 1,244 1,267 1,207 1,235 1,218
Average no. of delivery staff
1,045 1,041 987 980 962
The Newspapers segment reports the publishing activities of 35
newspapers. The largest of these are Aamulehti and Iltalehti.
Net sales for the Newspapers segment grew 3.8% in July-September,
totalling MEUR 57.1 (55.0). Iltalehti and Lapin Kansa increased their
net sales most.
Newspaper circulation sales increased 3.8% in July-September. Most of
Alma Media's newspapers increased their circulation sales. Iltalehti
was successful in turning its circulation sales back into positive in
a declining market with fierce competition. Iltalehti's market share
in the third quarter was 43.1% (42.6%).
Advertising sales in the Newspapers segment grew by 4.4% in the third
quarter. Iltalehti, Iltalehti.fi and Lapin Kansa increased their
advertising sales strongly. In Aamulehti, September was a challenging
time for advertising sales.
The operating profit of the Newspapers segment decreased by 4.0%,
totalling MEUR 10.0 (10.4). The decrease was due to investments in
the development of online services and the slowing down of
Aamulehti's advertising sales.
KAUPPALEHTI GROUP
Kauppalehti Group, key figures, MEUR 2008 2007 2008 2007 2007
Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Net sales 16.5 15.5 54.5 51.0 70.1
Circulation sales 5.9 6.0 18.3 18.1 24.4
Media advertising sales 4.7 4.3 16.3 15.0 21.5
Other sales 5.9 5.2 19.8 17.9 24.3
Operating profit 2.5 1.5 7.6 5.4 7.6
Operating margin, % 15.4 10.0 14.0 10.5 10.8
Gross capital expenditure 0.3 0.3 1.1 0.7 1.1
Average no. of personnel,
calculated as full-time employees 503 536 500 537 527
The Kauppalehti Group specialises in the production of business and
financial information. Its best known title is Finland's leading
business media, Kauppalehti. The group also includes the contract
publishing company Lehdentekijät, direct marketing company
Kauppalehti 121 and the news agency Baltic News Service (BNS)
operating in the Baltic countries.
The net sales of the Kauppalehti Group increased 6.4% in
July-September, being MEUR 16.5 (15.5). The net sales of the
comparison period include the net sales of the Presso magazine,
discontinued at the end of 2007 (MEUR 0.4).
Kauppalehti's advertising sales increased by 12% and circulation
sales by 10%. According to an extraordinary circulation audit in
August, Kauppalehti's circulation reached an all-time high. The
online service Kauppalehti.fi also broke visitor records. Kauppalehti
Oy's drive was further enhanced by the increased net sales of
ePortti, Kauppalehti.fi content sales and Balance Consulting.
The positive profitability development of the Kauppalehti Group
continued in the third quarter. The group's operating profit
increased by 64%, being MEUR 2.5 (1.5).
MARKETPLACES
Marketplaces, key figures, MEUR 2008 2007 2008 2007 2007
Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Net sales 8.4 7.6 26.9 22.9 30.9
Operations in Finland 6.9 6.2 22.1 18.7 25.2
Operations outside Finland 1.5 1.4 4.8 4.2 5.7
Operating profit 1.0 1.3 3.0 4.1 5.3
Operating margin, % 11.6 16.7 11.1 18.1 17.3
Gross capital expenditure 0.4 0.9 1.2 1.2 2.8
Average no. of personnel,
calculated as full-time employees 220 158 210 155 158
The Marketplaces segment reports Alma Media's classified services
produced on the internet and supported by printed products. The
services in Finland are Etuovi.com, Monster.fi, Autotalli.com,
Mascus.fi, Mikko.fi and Vuokraovi.com. The services outside Finland
are City24, Motors24, Mascus, Bovision and Objektvision.
The July-September net sales for Marketplaces were MEUR 8.4 (7.6).
Net sales growth slowed down to 11.1%. The growth of Monster's sales
in particular slowed down due to a significant decrease in the growth
of the recruitment market. The decrease in the home sales market
during the third quarter did not have a marked effect on the net
sales development of the Etuovi.com online service.
The net sales of Marketplaces' international operations increased to
MEUR 1.5 (1.4) despite the market conditions in the Baltic countries
and Eastern Europe.
The operating profit of the Marketplaces segment decreased 23.1% from
the corresponding period in the previous year, now being MEUR 1.0
(1.3). Investments in the Mikko.fi business in Finland and the City24
home sales services in Eastern Europe were the main contributors to
the decrease in profitability.
ASSOCIATED COMPANIES
Share of associated companies' results, 2008 2007 2008 2007 2007
MEUR Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Newspapers 0,0 0,1 0,1 0,1 0,1
Kauppalehti Group
Talentum Oyj -0,3 0,3 1,0 1,3 2,6
Marketplaces 0,0 0,0 0,0 0,0 0,0
Other operations
Acta Print Kivenlahti Oy 0,0 0,0 0,0 0,1 0,1
Other associated companies 0,3 0,2 0,7 0,6 0,7
Total 0,0 0,6 1,8 2,1 3,5
Alma Media Group holds a 29.9% stake in Talentum Oyj, which is
reported under the Kauppalehti Group. The shares in the possession of
Talentum itself are here included in the total number of shares. In
the consolidated financial statements of Alma Media the Talentum
shares held by Talentum itself are not included in the total number
of shares. Alma Media's shareholding was stated as 30.3% in its
consolidated financial statements of September 30, 2008.
Alma Media Group has a 36.0% stake in Acta Print Kivenlahti Oy,
reported under Other operations.
BALANCE SHEET AND FINANCIAL POSITION
The Group's balance sheet totalled MEUR 166.5 (192.5) at the end of
September. The equity ratio at the end of September was 54.2%
(58.1%).
The ordinary Annual General Meeting of Alma Media Corporation on
March 12, 2008 decided to distribute a dividend of EUR 0.90 per
share. The record date was March 17, and the dividend payment date
March 27. The company paid total dividends in the amount of MEUR 67.2
to its shareholders in March.
The Group currently has a MEUR 100 commercial paper programme in
Finland. In March, the Group issued papers to a total amount of MEUR
35. On September 30, 2008, the unused portion of the programme was
MEUR 81.0.
The Group's interest-bearing debt is denominated in euros and
therefore does not require hedging against exchange rate differences.
The most significant purchasing agreements based in foreign
currencies are hedged.
The Group's cash flow decreased from the comparison period by MEUR
1.0, being MEUR 5.8. Cash flow before financing activities was MEUR
4.6 (6.6).
CAPITAL EXPENDITURE
The Group's capital expenditure in July-September totalled MEUR 1.5
(2.9).
EVENTS AFTER THE REVIEW PERIOD
With its decision of October 16, 2008, the District Court of Helsinki
dismissed the claims against Alma Media's use of the Etuovi.com
trademark. Among other things, the district court decision confirmed
Alma Media's right to use the trademark "ETUOVI.COM" for online home
and real estate business and a special newspaper focusing on real
estate sales.
RISKS AND RISK MANAGEMENT
The most important strategic risks for Alma Media are a significant
drop in the readership of its newspapers and a critical decline in
retail advertising. The major operational risks are disturbances in
information technology systems and telecommunication, and an
interruption of printing operations.
Alma Media's risk management process identifies the risks, develops
appropriate risk management methods and regularly reports on risk
issues to the risk management organisation.
ADMINISTRATION
Mr Tuomas Itkonen has been appointed Chief Financial Officer of Alma
Media Corporation and member of the Group Executive Team. He started
in the position on October 1, 2008.
THE ALMA MEDIA SHARE
In July-September, altogether 5,994,670 Alma Media shares were traded
at Nasdaq OMX Helsinki, which represented 8.0% of the total number of
shares. The closing price of the Alma Media share at the end of the
last trading day of the review period, September 30, 2008, was EUR
8.10. The lowest quotation during the third quarter was EUR 7.01 and
the highest was EUR 9.20. Alma Media Corporation's market
capitalisation at the end of the review period was MEUR 604.4.
The company does not own any of its own shares and it has no
authorisation to purchase its own shares.
Option rights
The Annual General Meeting of March 8, 2006 approved a three-stage
option programme (option rights 2006A, 2006B and 2006C), disapplying
the pre-emptive subscription right of the shareholders. Under the
programme, stock options may be granted to the managements of Alma
Media Corporation and its subsidiaries as incentives for ensuring
motivation and long-term commitment. Altogether 1,920,000 stock
options may be granted in three lots of 640,000 each, and these may
be exercised to subscribe to a maximum of 1,920,000 Alma Media
shares.
A total of 515,000 2006A options have been issued to Group
management. Altogether 75,000 of the 2006A options have been returned
to the company due to the termination of employment contracts. After
the returned options, Group management possesses a total of 440,000
2006A option rights. The option rights of the 2006A programme are
traded at Nasdaq OMX Helsinki since April 10, 2008.
In 2007, the Board of Directors of Alma Media decided to issue
515,000 options under the 2006B programme to Group management.
In 2008, the Board of Directors of Alma Media decided to issue
520,000 options under the 2006C programme to Group management.
In 2007 and 2008, the Board of Directors decided to annul the 200,000
2006A option rights in the company's possession. In 2008, the Board
of Directors decided to annul the 125,000 2006B option rights in the
company's possession.
If all the subscription rights are exercised, this programme would
dilute the holdings of the earlier shareholders by 2.1%.
The share subscription periods and prices are:
2006A: April 1, 2008-April 30, 2010, average trade-weighted price
April 1-May 31, 2006
2006B: April 1, 2009-April 30, 2011, average trade-weighted price
April 1-May 31, 2007
2006C: April 1, 2010-April 30, 2012, average trade-weighted price
April 1-May 31, 2008
The subscription price of shares that may be subscribed under these
stock option rights will be reduced by the amount of dividends and
capital repayments decided after the start of the period determining
the subscription price and before the subscription of shares, on the
settlement date for each dividend payment or capital repayment. The
share subscription price under the 2006A option was EUR 5.58 per
share, the subscription price under the 2006B option was EUR 8.95 and
the subscription price under the 2006C option was EUR 9.06,
correspondingly.
The Board of Directors has no other current authorisations to raise
convertible loans and/or to raise the share capital through a new
issue.
Market liquidity guarantee
Alma Media and eQ Bank have made a liquidity providing contract under
which eQ Bank guarantees bid and ask prices for the shares with a
maximum spread of 3% during 85% of the exchange's trading hours. The
contract applies to a minimum lot of 2,000 shares.
Flagging notices
In the third quarter, Alma Media did not receive any flagging
notices.
SUMMARY OF AND NOTES TO THE FINANCIAL STATEMENTS
2008 2007 2008 2007 2007
INCOME STATEMENT, MEUR Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
NET SALES 81.4 77.5 254.7 243.4 328.9
Other operating income 0.1 1.3 0.8 4.0 13.0
Materials and services -25.0 -24.6 -76.5 -73.4 -99.1
Costs arising from employment -27.5
benefits -25.3 -87.0 -81.7 -111.7
Depreciation and writedowns -2.2 -2.7 -6.4 -7.5 -9.8
Operating expenses -14.6 -12.8 -46.7 -41.0 -56.8
OPERATING PROFIT 12.2 13.4 38.8 43.8 64.4
Financial income 0.2 0.3 1.0 1.0 1.2
Financial expenses -0.3 -0.3 -0.9 -1.0 -1.1
Share of associated companies' 0.0
results 0.6 1.8 2.1 3.5
PROFIT BEFORE TAX 12.1 13.9 40.7 45.9 68.0
Income tax -3.5 -3.4 -10.6 -11.3 -16.8
PROFIT FOR THE PERIOD 8.6 10.5 30.1 34.6 51.2
Distribution:
To the parent company shareholders 8.5 10.3 29.5 34.1 50.5
Minority interest 0.2 0.1 0.6 0.5 0.6
Earnings/share, EUR 0.11 0.14 0.40 0.46 0.68
Earnings/share (diluted), EUR 0.11 0.14 0.39 0.46 0.68
BALANCE SHEET, 30 Sep 2008 30 Sep 2007 31 Dec 2007
MEUR
ASSETS
NON-CURRENT ASSETS
Goodwill 33.3 29.8 29.7
Intangible assets 12.0 9.7 10.2
Tangible assets 36.2 50.4 38.4
Investments in associated 31.5
companies 32.7 34.1
Other long-term investments 4.1 3.9 4.0
Deferred tax assets 1.0 3.7 1.0
Other receivables 0.1 0.2 0.0
CURRENT ASSETS
Inventories 1.0 1.3 1.4
Tax receivables 1.6 0.0 0.0
Accounts receivable and other 32.7
receivables 32.6 29.9
Other short-term investments 2.7 2.6 3.0
Cash and cash equivalents 5.6 20.8 24.8
ASSETS AVAILABLE FOR SALE 4.7 4.7 4.7
TOTAL ASSETS 166.5 192.5 181.3
BALANCE SHEET, 30 Sep 2008 30 Sep 2007 31 Dec 2007
MEUR
SHAREHOLDERS' EQUITY AND
LIABILITIES
Share capital 44.8 44.8 44.8
Share premium fund 2.8 2.8 2.8
Cumulative translation 0.0
adjustment 0.1 0.0
Retained earnings 32.2 53.3 70.0
Parent company shareholders' 79.8
equity 101.0 117.7
Minority interest 0.6 0.5 0.6
TOTAL SHAREHOLDERS' EQUITY 80.4 101.5 118.3
LIABILITIES
Non-current liabilities
Interest-bearing liabilities 4.1 18.8 4.6
Deferred tax liabilities 2.6 1.6 1.8
Pension obligations 3.6 3.6 3.7
Provisions 0.1 0.1 0.1
Other long-term liabilities 0.4 6.8 0.9
Current liabilities
Interest-bearing liabilities 21.2 2.8 2.2
Advances received 18.3 17.8 12.0
Tax liabilities 0.0 2.0 1.1
Provisions 0.2 1.3 0.3
Accounts payable and other 35.6
liabilities 36.2 36.4
TOTAL LIABILITIES 86.1 91.0 63.0
TOTAL EQUITY AND LIABILITIES 166.5 192.5 181.3
RECONCILIATION OF SHAREHOLDERS' EQUITY 1 JAN. - 30 SEPTEMBER 2008
Share Parent
Share premium Retained company, Minority Equity,
MEUR capital fund earnings total interest total
Equity, 1 Jan. 44.8 2.8 70.0 117.7 0.6 118.3
2008
Translation
differences 0.0 0.0 0.0
Share of items
recognized
directly in
associated
company's equity -0.7 -0.7 -0.7
Income recognized
directly in equity -0.7 -0.7 -0.7
Profit for the
period 29.5 29.5 0.6 30.1
Net income for the
period 28.8 28.8 0.6 29.4
Share-based
payments 0.6 0.6 0.6
Dividend paid by
parent company -67.2 -67.2 -67.2
Dividends paid by
subsidiaries -0.6 -0.6
Equity, 30 44.8 2.8 32.2 79.8 0.6 80.4
September 2008
RECONCILIATION OF SHAREHOLDERS' EQUITY 1 JAN. - 30 SEPTEMBER 2007
Share Parent
Share premium Retained company, Minority Equity,
MEUR capital fund earnings total interest total
Equity, 1 Jan.
2007 44.8 2.8 67.3 114.9 0.4 115.3
Translation
differences 0.0 0.0 0.0
Share of items
recognized
directly in
associated
company's equity 0.1 0.1 0.1
Income
recognized
directly in
equity 0.1 0.1 0.1
Profit for the
period 34.1 34.1 0.5 34.6
Net income for
the period 34.2 34.2 0.5 34.7
Share-based
payments 0.4 0.4 0.4
Dividend paid
by parent
company -48.5 -48.5 -48.5
Dividends paid -0.4
by subsidiaries
Equity, 30 44.8 2.8 53.3 101.0 0.5 101.5
September 2007 2008 2007 2008 2007 2007
CASH FLOW STATEMENT, MEUR Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Cash flow from operating activities
Profit for the period 8.6 10.5 30.1 34.6 51.2
Adjustments 5.8 4.3 14.4 12.5 8.8
Change in working capital -4.3 -4.6 3.1 5.9 3.4
Dividend income received 0.0 0.0 4.0 3.2 3.2
Interest income received 0.1 0.3 0.7 0.8 1.1
Interest expenses paid -0.3 -0.3 -1.0 -1.0 -1.1
Taxes paid -4.1 -3.4 -13.0 -10.6 -14.1
Net cash provided by operating activities 5.8 6.8 38.3 45.2 52.5
Cash flow from investing activities
Investments in tangible and intangible
assets -1.2 -1.4 -3.5 -3.8 -5.6
Proceeds from disposal of tangible and
intangible assets 0.0 1.3 1.0 1.5 1.5
Other investments -0.1 0.0 -0.8 0.0 -1.0
Proceeds from disposal of other 0.0
investments 0.0 0.1 3.2 3.4
Subsidiary shares purchased 0.0 -0.1 -3.9 -0.3 -0.3
Associated company shares purchased 0.0 0.0 0.0 -1.6 -1.5
Net cash used in investing activities -1.2 -0.2 -7.2 -0.9 -3.5
Cash flow before financing activities 4.6 6.6 31.1 44.5 49.1
Cash flow from financing activities
Long-term loan repayments 0.0 0.0 0.0 0.0 0.0
Short-term loans raised 0.0 0.0 35.0 2.0 2.0
Short-term loans repaid -7.5 -0.8 -17.7 -4.5 -5.2
Change in interest-bearing receivables 0.0 -0.2 0.2 -0.5 -0.5
Dividends paid and capital repayment 0.0 0.0 -67.8 -48.9 -48.8
-7.5 -1.0 -50.3 -51.9 -52.5
Change in cash funds (increase + / -2.9
decrease -) 5.5 -19.2 -7.4 -3.4
Cash and cash equivalents at start of 8.5
period 15.2 24.8 28.2 28.2
Cash and cash equivalents at end of 5.6
period 20.8 5.6 20.8 24.8
BUSINESS ACQUISITIONS 1-9/2008
On February 20, 2008, Alma Media acquired the entire stock of Jadecon
Oy. The company's business includes Telkku.com, an online TV listing
service, and is reported under the Newspapers segment as part of
Iltalehti.
On September 1, 2008, the Alma Media Group company Suomen
Paikallissanomat Oy (Local Newspapers) acquired the business of
Rannikkoseudun Sanomat, the publisher of the Rannikkoseutu newspaper.
Book value before Fair values used in
consolidation consolidation
Intangible assets 0.0 1.9
Receivables 0.2 0.2
Cash and cash equivalents 0.1 0.1
Assets total 0.3 2.2
Deferred tax liabilities 0.5
Current liabilities 0.1 0.1
Total liabilities 0.1 0.6
Net assets 0.2 1.6
Goodwill arising in
acquisitions 3.7
Acquisitions cost 5.3
Cash and cash equivalents of
acquired operations 0.1
Impact on cash flow 5.2
The fair values entered under intangible assets mainly pertain to
trademarks, the acquired IT application and customer agreements. The
goodwill generated by the acquisitions was affected by the expected
synergy benefits from the acquired businesses. The operating profit
of the acquired businesses, calculated from the acquisition dates,
totals MEUR 0.4. The Group's net sales during the first three
quarters would have been approximately MEUR 255.8 and operating
profit MEUR 39.1, if the acquisitions had taken place in the
beginning of 2008.
INFORMATION BY SEGMENT
Alma Media's reporting segments in the financial statements are
Newspapers, Kauppalehti Group and Marketplaces. Other operations
comprise the Group's parent company and the operations of the Group's
financial management service centre.
The descriptive section of the financial statements presents the net
sales and operating profits of the segments and the allocation of the
associated companies' results to the reporting segments. Financial
items and income taxes are not allocated to the segments. The
following table presents the assets and liabilities of the segments
as well as the non-allocated asset and liability items.
ASSETS BY SEGMENT, 30 Sep 2008 30 Sep 2007 31 Dec 2007
MEUR
Newspapers 65.4 66.2 64.7
Kauppalehti group 55.2 57.4 56.5
Marketplaces 16.6 15.6 15.4
Other operations and 18.6
eliminations 25.2 19.0
Non-allocated assets 10.7 28.2 25.7
Total 166.5 192.5 181.3
LIABILITIES BY SEGMENT, 30 Sep 2008 30 Sep 2007 31 Dec 2007
MEUR
Newspapers 35.8 33.9 31.4
Kauppalehti group 12.4 14.6 12.6
Marketplaces 4.0 4.3 3.9
Other operations and 5.9
eliminations 9.2 5.5
Non-allocated liabilities 28.0 29.0 9.7
Total 86.1 91.0 63.0
2008 2007 2008 2007 2007
GROUP INVESTMENTS, MEUR Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Gross capital expenditure 1.5 2.9 11.6 8.3 12.1
PROVISIONS
The company's provisions on June 30, 2008 totalled MEUR 0.3,
representing a decrease of MEUR 0.1 from the situation on December
31, 2007. It has not been necessary to change the estimates made when
the provisions were entered. The change in provisions is due to
actual expenses.
30 Sep 2008 30 Sep 31 Dec
COMMITMENTS AND CONTINGENCIES, MEUR 2007 2007
Collateral on own behalf
Chattel mortgages 0.0 0.0 0.0
Collateral for others
Guarantees 0.0 0.0 0.0
Other commitments
Commitments based on agreements 0.1 0.1 0.1
Minimum rents payable based on other lease
agreements:
Within one year 7.7 6.0 7.5
Within 1-5 years 17.2 13.7 18.1
After 5 years 24.4 11.8 26.5
Total 49.3 31.5 52.1
The Group also has purchase agreements
based on IFRIC 4 which include a lease
component per IAS 17. Minimum payments
based on these agreements: 3.6 5.1 4.6
GROUP DERIVATIVE CONTRACTS, MEUR 30 Sep 2008 30 Sep 2007 31 Dec 2007
Commodity derivative contracts,
electricity derivatives
Fair value * 0.1 0.0 0.1
Nominal value 0.5 0.0 0.4
* The fair value represents the return that would have arisen if the
derivative positions had been cleared on the balance sheet date.
CONTINGENT LIABILITIES
The Group has contingent liabilities totalling MEUR 7.8. The tax
authorities have issued a claim to correct the company's income tax
for 2003. The tax authorities consider that the loss arising from
Alma Media's disposal of the shares of its associated company
Talentum to Kauppalehti Oy at the market price should not have been
tax-deductible. At the end of 2006 (December 20, 2006) the company
was informed of a ruling by the Adjustments Board of the Corporate
Taxation Centre to the effect that the Adjustments Board rejected the
claim by the tax authorities. The tax authorities have appealed the
Adjustments Board's ruling to the Helsinki Administrative Court. The
company continues to believe that it is improbable that the claim
will lead to additional tax consequences since the transaction was
carried out at market prices for commercial reasons. The ruling of
the Helsinki Administrative Court is expected before the end of 2008.
RELATED PARTIES
Alma Media Group's related parties are its associated companies and
the companies they own. The following table summarises the business
operations undertaken between Alma Media and its associated companies
and the status of their receivables and liabilities:
RELATED PARTY ACTIVITIES WITH ASSOCIATED 2008 2007 2008 2007 2007
COMPANIES, MEUR 7-9 7-9 1-9 1-9 1-12
Sales of goods and services 0.0 0.0 0.2 0.1 0.2
Purchases of goods and services 1.0 1.5 3.3 4.5 5.9
Accounts receivable, loan and other 4.7 4.7 4.7
receivables at the balance sheet date 4.7 4.7
Accounts payable at the balance sheet date 1.1 0.4 1.1 0.4 0.1
Related parties also include the company's senior management (members
of the Board of Directors, presidents and the Group Executive Team).
The section The Alma Media Share - Option Rights of this report
presents information on changes to the current option programme
intended to motivate and secure the long-term commitment of the
Group's senior management.
MAIN ACCOUNTING PRINCIPLES (IFRS)
This interim report has been prepared according to IFRS standards
(IAS 34).
The report applies the same accounting principles and calculation
methods as the previous annual accounts dated December 31, 2007.
However, the interim report does not contain all the information or
notes to the accounts included in the annual report. This interim
report should therefore be read in conjunction with the company's
annual report.
The key indicators are calculated using the same formulae as applied
in the previous annual financial statements.
Since the beginning of 2008, the Group has adopted the following new
accounting standards and interpretations:
IFRIC 11 IFRS 2 - Business operations concerning the shares of group
companies and own shares
New accounting standards and interpretations to be adopted from the
beginning of 2009 are:
IFRS 2 Share-based payments, amendment to standard
IFRS 8 Operating segments
IAS 1 Presentation of financial statements, amendment to standard
IAS 23 Borrowing costs, amendment to standard
The Group preliminarily expects that the above new standards and
interpretations will have only a minor effect. Their application
mainly affects the way of presenting the profit and loss statement,
the balance sheet, changes in equity and notes to the financial
statements.
The European Union has not yet approved the adoption of the amended
standards IFRS 2, IAS 1 and IAS 23. An EU approval is necessary for
the amended standards to be adopted within the Group.
New accounting standards to be adopted from the beginning of 2010
are:
IFRS 3 Business combinations, amendment to standard
IAS 27 Consolidated and separate financial statements, amendment to
standard
These amendments will affect the treatment of future acquisitions as
far as, for example, the minority share, goodwill and acquisition
costs are concerned. The amendments will have no effect on
acquisitions already made.
These amended standards are not yet approved for application in the
EU. This approval is necessary for their adoption by the Group.
The Group's long-term receivable from the associated company Acta
Print Kivenlahti Oy is shown in the balance sheet under assets
available for sale. Alma Media intends to relinquish its entire
holding in this company. The divestment is not expected to have a
significant impact on Alma Media's financial position.
The figures in this interim report are unaudited.
SEASONALITY
The Group recognises its circulation revenues as paid. For this
reason circulation revenues accrue in the income statement fairly
evenly during the four quarters of the year. The bulk of circulation
invoicing takes place at the beginning of the year and therefore the
cash flow from operating activities is strongest early in the year.
This also affects the company's balance sheet position in different
quarters.
GENERAL STATEMENT
This report contains certain statements that are estimates based on
the management's best knowledge at the time they were made. For this
reason they contain a certain amount of risk and uncertainty. The
estimates may change in the event of significant changes in the
general economic and business conditions.
NEXT INTERIM REPORT
Alma Media will publish its financial statements for the year 2008 at
9:00am (EET) on Friday, February 13, 2009.
ALMA MEDIA CORPORATION
Board of Directors
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