2013-05-06 13:00:00 CEST
2013-05-06 13:00:04 CEST
REGULATED INFORMATION
Ilkka-Yhtymä Oyj - Interim report (Q1 and Q3)
Ilkka-Yhtymä Oyj's Interim Report for Q1/2013
Ilkka-Yhtymä Oyj Interim Report 6 May 2013, at 2:00pm
ILKKA-YHTYMÄ OYJ'S INTERIM REPORT FOR Q1/2013
- Net sales: EUR 11.0 million (EUR 11.8 million)
- Operating profit: EUR 2.3 million (EUR 3.4 million)
- Operating profit excluding Alma Media Corporation and the other associated
companies amounted to EUR 0.9 million (EUR 1.6 million)
- Operating profit totalled 20.6% of net sales, or 7.8% excluding Alma Media
and other associated companies (13.4%)
- Pre-tax profits: EUR 2.1 million (EUR 2.7 million)
- Earnings per share: EUR 0.08 (EUR 0.10)
NET SALES AND PROFIT PERFORMANCE
The Group's consolidated net sales for January-March showed a 6.6% decline. Net
sales came to EUR 11.0 million (EUR 11.8 million in the corresponding period of
the previous year). External net sales from the publishing business fell by
8.6%. Advertising revenues fell by 14.9% and circulation revenues fell by 1.9%.
The decrease in net sales from the publishing business was caused by a weaker
advertising market. External net sales from the printing business increased by
7.3%. Circulation income accounted for 44% of consolidated net sales, while
advertising income and printing income represented 42% and 15%, respectively.
Other operating income in January-March totalled EUR 0.1 million (EUR 0.1
million).
Operating expenses for January-March amounted to EUR 10.2 million (EUR 10.3
million), down by 0.8% year on year. Expenses arising from materials and
services increased by 0.9%. Personnel expenses decreased by 0.2%. The national
collective agreement for journalists expired on 30 April 2013, and the
negotiations remain unresolved. Other operating costs increased by 8.8%.
Depreciation contracted by 30.9%.
The share of the associated companies' result was EUR 1.4 million (EUR 1.8
million). Consolidated operating profit amounted to EUR 2.3 million (EUR 3.4
million), down by 33.3 per cent year-on-year. The Group's operating margin was
20.6 per cent (28.8%). Operating profit excluding Alma Media Corporation and
the other associated companies amounted to EUR 0.9 million (EUR 1.6 million),
representing 7.8% (13.4%) of net sales. Operating profit from publishing fell
by EUR 0.6 million, while operating profit from printing remained roughly the
same in euro terms as in the previous year.
Net financial expenses for January-March amounted to EUR 0.2 million (EUR 0.7
million). Net gain/loss on shares held for trading was EUR -0.01 million (EUR
0.2 million). Interest expenses excluding the fair value change in derivatives
hedging them totalled EUR 0.4 million (EUR 0.6 million). In order to hedge
against interest rate risk, in 2010 the company transformed some of its
floating-rate liabilities into fixed-rate liabilities, by means of interest
rate swaps. Given that the Group does not apply hedge accounting, unrealised
changes in the market value of the interest rate swaps are recognised through
profit or loss. In January-March 2013, the market value of these interest rate
swaps grew by EUR 0.2 million (in January-March 2012, the market value fell by
EUR 0.3 million).
Pre-tax profits totalled EUR 2.1 million (EUR 2.7 million). Direct taxes
amounted to EUR 0.2 million (EUR 0.2 million), and the Group's net profit for
the period totalled EUR 1.9 million (EUR 2.4 million).
BALANCE SHEET AND FINANCING
The consolidated balance sheet total came to EUR 169.6 million (EUR 199.5
million), with EUR 82.6 million (EUR 107.0 million) of equity. On the reporting
date of 31 March 2013, the balance sheet value of the holding in the associated
company Alma Media Corporation was EUR 126.7 million and the market value of
the shares was EUR 83.2 million. According to the management's estimate,
write-down in this holding is unnecessary.
Interest-bearing liabilities totalled EUR 70.6 million (EUR 76.5 million). The
equity ratio was 50.7 per cent (55.6%), and shareholders' equity per share
stood at EUR 3.22 (EUR 4.17). The increase in financial assets for the period
totalled EUR 5.8 million (EUR 6.0 million), with liquid assets at the end of
the period totalling EUR 8.1 million (EUR 16.9 million).
Cash flow from operations for the period came to EUR 5.9 million (EUR 6.1
million). This includes EUR 3.6 million (EUR -2.9 million) from the Group's own
operations as well as EUR 2.2 million (EUR 9.0 million) of dividend income from
Alma Media Corporation. Due to VAT changes, subscription fees for the Group's
provincial newspapers were exceptionally invoiced in the amount of EUR 6.6
million in December 2011. Cash flow from investments totalled EUR -0.1 million
(EUR -0.1 million).
SHARE PERFORMANCE
The Series I shares of Ilkka-Yhtymä Oyj were listed on the Helsinki Stock
Exchange in 1981 and have remained listed ever since. The Series II shares have
been listed since their issue in 1988, and on 10 June 2002 they were
transferred from the I List of the Helsinki Stock Exchange to the Main List. At
present, the Series II shares of Ilkka-Yhtymä Oyj are listed on the NASDAQ OMX
Helsinki List, in the Consumer Services sector, the company's market value
being classified as Mid Cap. The Series I shares are listed on the Pre List.
In January-March, 12,695 series-I shares of Ilkka-Yhtymä Oyj were traded,
accounting for 0.3 per cent of the total number of series-I shares. The total
value of the shares exchanged was EUR 0.1 million. In total, 553,634 series-II
shares were traded, corresponding to 2.6 per cent of the total number of series
II shares. The total value of the shares traded was EUR 2.3 million. The lowest
price at which series-I shares of Ilkka-Yhtymä Oyj were traded during the
period under review was EUR 4.95, and the highest per-share price was EUR 7.95.
The lowest price at which series-II shares were traded was EUR 3.61 and the
highest EUR 5.19. The market value of the share capital at the closing rate for
the reporting period was EUR 102.1 million.
RISKS AND RISK MANAGEMENT
In the current economic climate, major uncertainties are associated with the
predictability of both net sales and operating profit. Ilkka-Yhtymä's most
significant short-term risks are related to the development of media
advertising, in particular, as well as circulation and printing volumes, which
affect the industry in general. Other risks associated with the Group's own
operations and its holding in associated company Alma Media Corporation are
described in more detail in the Annual Report 2012.
The Group's major financial risks include credit risk of the Group's operative
business, the risk associated with the price of shares held for trading,
liquidity risk and the risk of changes in market interest rates applied to the
loan portfolio. In order to hedge against interest rate risk, on 21 December
2010 the company transformed some of its floating-rate liabilities to a fixed
rate, by means of interest rate swaps. Given that the Group does not apply
hedge accounting, changes in the market value of the interest rate swap are
recognised through profit and loss. Other financial risks are discussed in more
detail in the 2012 Annual Report.
EVENTS AFTER THE REPORT PERIOD
ANNUAL GENERAL MEETING DECISIONS
On 18 April 2013, the Annual General Meeting (AGM) of Ilkka-Yhtymä Oyj approved
the financial statements, discharged the members of the Supervisory Board and
the Board of Directors and the Managing Director from liability and decided
that a per-share dividend of EUR 0.15 be paid for the year 2012.
The number of members on the Supervisory Board for 2013 was confirmed to be 25.
Of the Supervisory Board members whose term had come to an end, the following
were re-elected for the term ending in 2017: Markku Akonniemi (Töysä), Juhani
Hautamäki (Ylivieska), Heikki Järvi-Laturi (Teuva), Petri Latva-Rasku (Tampere)
ja Marja Vettenranta (Laihia). The employee representatives Terhi Ekola (Vaasa)
and Niina Vuolio (Seinäjoki) were elected as new members of the Supervisory
Board.
At the Annual General Meeting it was decided to maintain the payments made to
the Chairman of the Supervisory Board and the board members at their current
level: the Chairman will receive a retainer of EUR 1,500 per month and a fee of
EUR 400 per meeting, and the board members will be paid a fee of EUR 400 per
meeting attended. The board members' travel expenses are reimbursed in
accordance with the current maximum level specified by the tax authorities.
Ernst & Young Oy, Authorised Public Accountants, was elected as the auditor,
with Authorised Public Accountant, M.Sc.(Econ.) Harri Pärssinen as the
principal auditor. It was decided that the auditors would be reimbursed per the
invoice.
The AGM authorised the Board of Directors to decide upon a donation to be put
toward charitable causes or similar, totalling, at maximum, EUR 50,000, as well
as to decide upon the recipients, purposes of use, schedules and other terms of
these donations.
OUTLOOK FOR 2013
In the current economic climate, forecasting net sales in the media sector and,
in particular, media advertising spending involves major uncertainties. Due to
consumer caution, VAT on circulation revenues and media competition,
newspapers' circulation revenues are predicted to decrease. Printing business
volumes have declined permanently in Finland and the prospects for growth in
the sector are weak.
Advertising in Finland was weaker than expected in the first quarter.
The net sales of Ilkka-Yhtymä Group are estimated to decline from the 2012
level.
Group operating profit from Ilkka-Yhtymä's own operations, and operating profit
as a percentage of net sales, excluding the share of Alma Media's and other
associated companies' results, are expected to decline clearly from the 2012
level. In addition, the year's results will depend on interest-rate trends and
the price performance of securities investments.
The associated company Alma Media Corporation (Group ownership 29.79%) will
have a significant impact on Group operating profit and profit.
SUMMARY OF FINANCIAL STATEMENTS AND NOTES
DRAFTING PRINCIPLES
Ilkka-Yhtymä Group's interim report has been prepared in compliance with the
recognition and measurement principles of IFRS, but not in compliance with all
IAS 34 requirements.
The interim report has been prepared according to the same principles as the
2012 financial statements. New or revised IFRS standards and IFRIC
interpretations that become effective in 2013 have also been complied with, as
specified in the 2012 financial statements. These changes have not affected the
reported figures. The principles and formulae for the calculation of the
indicators, presented on page 61 of the 2012 annual report, remain unchanged.
The figures in the interim report have been presented unaudited.
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2013 2012 2012
NET SALES 10 987 11 763 -7 % 46 158
Change in inventories of finished and 5 11 -54 %
unfinished products
Other operating income 93 109 -15 % 437
Materials and services -3 608 -3 575 1 % -13 980
Employee benefits -4 560 -4 570 0 % -17 824
Depreciation -524 -758 -31 % -2 918
Other operating costs -1 532 -1 407 9 % -5 966
Share of associated companies' profit *) 1 397 1 813 -23 % -16 774
OPERATING PROFIT/ LOSS 2 258 3 385 -33 % -10 868
Financial income and expenses -162 -730 78 % -2 550
PROFIT/ LOSS BEFORE TAX 2 097 2 655 -21 % -13 418
Income tax -170 -206 -18 % -669
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW 1 927 2 449 -21 % -14 087
Earnings per share, undiluted (EUR)**) 0.08 0.10 -21 % -0.55
The undiluted share average (to the nearest 25 665 25 665 25 665
thousand)**)
*) 1-12/2012: Includes the EUR 22 million non-recurring write-down on the
holding in the associated company Alma Media Corporation.
**) There are no factor diluting the figure.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2013 2012 2012
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW 1 927 2 449 -21 % -14 087
OTHER COMPREHENSIVE INCOME:
Items that may be reclassified subsequently to
profit or loss:
Available-for-sale assets 2 -3
Share of associated companies' other 85 158 -46 % 100
comprehensive income
Income tax related to components of other 1
comprehensive income
Other comprehensive income, net of tax 86 158 -45 % 98
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 2 013 2 607 -23 % -13 989
SEGMENT INFORMATION
Group net sales (EUR 1,000) 1-3/2013 1-3/2012 Change 1-12/2012
Publishing 9 425 10 304 -9 % 40 528
Printing 3 372 3 524 -4 % 13 710
Non-allocated 567 534 6 % 2 139
Net sales between segments -2 377 -2 599 -9 % -10 219
Total 10 987 11 763 -7 % 46 158
Group operating profit/ loss (EUR 1,000) 1-3/2013 1-3/2012 Change 1-12/2012
Publishing 778 1 356 -43 % 5 046
Printing 317 342 -7 % 1 379
Associated companies 1 397 1 813 -23 % -16 774
Non-allocated -234 -126 -86 % -519
Total 2 258 3 385 -33 % -10 868
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 3/2013 3/2012 Change 12/2012
ASSETS
NON-CURRENT ASSETS
Intangible rights 981 1 052 -7 % 1 008
Goodwill 314 314 314
Investment properties 220 277 -20 % 233
Property, plant and equipment 11 926 12 918 -8 % 11 862
Shares in associated companies 128 029 147 072 -13 % 128 796
Available-for-sale assets 10 682 10 747 -1 % 10 723
Other tangible assets 214 214 214
TOTAL NON-CURRENT ASSETS 152 367 172 594 -12 % 153 151
Current assets
Inventories 577 614 -6 % 647
Trade and other receivables 6 422 6 556 -2 % 2 950
Income tax assets 510 762 -33 % 118
Financial assets at fair value 1 672 2 067 -19 % 1 695
through profit or loss
Cash and cash equivalents 8 060 16 898 -52 % 2 263
TOTAL Current assets 17 241 26 897 -36 % 7 673
Total assets 169 609 199 491 -15 % 160 823
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDER'S EQUITY
Share capital 6 416 6 416 6 416
Invested unrestricted equity fund and other 48 622 48 623 48 621
reserves
Retained earnings 27 541 52 008 -47 % 25 529
SHAREHOLDER'S EQUITY 82 579 107 047 -23 % 80 567
NON-CURRENT LIABILITIES
Deferred tax liability 54 392 -86 % 23
Non-current interest-bearing liabilities 66 349 72 448 -8 % 63 954
Non-current interest-free liabilities 102 115 -12 % 102
NON-CURRENT LIABILITIES 66 504 72 956 -9 % 64 079
CURRENT LIABILITIES
Current interest-bearing liabilities 4 241 4 022 5 % 6 633
Accounts payable and other payables 15 929 15 041 6 % 9 390
Income tax liability 355 425 -17 % 155
CURRENT LIABILITIES 20 525 19 488 5 % 16 177
SHAREHOLDERS' EQUITY AND LIABILITIES TOTAL 169 609 199 491 -15 % 160 823
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-3/ 1-3/ 1-12/
2013 2012 2012
CASH FLOW FROM OPERATIONS
Profit/ loss for the period under review 1 927 2 449 -14 087
Adjustments -546 -131 22 867
Change in working capital 2 813 -4 474 -6 732
CASH FLOW FROM OPERATIONS 4 194 -2 156 2 048
BEFORE FINANCE AND TAXES
Interest paid -224 -244 -2 235
Interest received 7 12 46
Dividends received 2 257 9 004 9 117
Other financial items -12 -14 -53
Direct taxes paid -331 -489 -947
CASH FLOW FROM OPERATIONS 5 890 6 111 7 976
CASH FLOW FROM INVESTMENTS
Investments in tangible and -204 -106 -1 083
intangible assets, net
Other investments, net 97 -33 -16
Dividends received from investments 15 529
CASH FLOW FROM INVESTMENTS -92 -139 -570
CASH FLOW BEFORE FINANCING ITEMS 5 798 5 972 7 406
CASH FLOW FROM FINANCING
Change in current loans -3 925
Change in non-current loans -1 964
Dividends paid and other profit distribution -1 -10 180
CASH FLOW FROM FINANCING -1 -16 069
INCREASE (+) OR DECREASE (-)IN FINANCIAL ASSETS 5 797 5 972 -8 663
Liquid assets at the beginning of the financial period 2 263 10 926 10 926
Liquid assets at the end of the financial period 8 060 16 898 2 263
KEY FIGURES
3/2013 3/2012 12/2012
Earnings/share (EUR) 0.08 0.10 -0.55
Shareholders' equity/share (EUR) 3.22 4.17 3.14
Average number of personnel 320 325 336
Investments (EUR 1,000) *) 561 141 1 311
Interest-bearing debt (EUR 1,000) 70 590 76 470 70 587
Equity ratio, % 50.7 55.6 50.7
Average number of shares during the 25 665 208 25 665 208 25 665 208
financial period
Number of shares at the end on the financial 25 665 208 25 665 208 25 665 208
period
*) Includes investments in tangible and intangible assets and shares in
associated companies and in available-for-sale financial assets.
Taxes included in the income statement are taxes corresponding to the profit
for the period under review.
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY (EUR 1,000)
Change in Share Fair Invested Other Retain Total
shareholders' capita value unrestricted reserv ed
equity 1-3/ 2012 l reserv equity fund es earnin
e gs
SHAREHOLDERS' EQUITY 6 416 101 48 498 24 49 401 104 440
1.1.
Comprehensive income 2 607 2 607
for the period
TOTAL SHAREHOLDERS' 6 416 101 48 498 24 52 008 107 047
EQUITY 3/ 2012
Change in Share Fair Invested Other Retain Total
shareholders' capita value unrestricted reserv ed
equity 1-3/ 2013 l reserv equity fund es earnin
e gs
SHAREHOLDERS' EQUITY 6 416 99 48 498 24 25 529 80 567
1.1.
Comprehensive income 1 2 011 2 013
for the period
TOTAL SHAREHOLDERS' 6 416 100 48 498 24 27 541 82 579
EQUITY 3/ 2013
GROUP CONTINGENT LIABILITIES
(EUR 1,000) 3/2013 3/2012 12/2012
Collateral pledged for own commitments
Mortgages on company assets 1 245 1 245 1 245
Mortgages on real estate 8 801 8 801 8 801
Pledged shares 53 451 70 735 65 730
Contingent liabilities on behalf of associated company
Guarantees 4 096 4 182 4 096
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2013 2012 2012
Carrying amount at the beginning of the 11 862 13 481 -12 % 13 481
financial period
Increase 484 75 542 % 838
Depreciation for the financial period -420 -638 -34 % -2 456
Carrying amount at the end of the financial 11 926 12 918 -8 % 11 862
period
RELATED PARTY TRANSACTIONS
Ilkka-Yhtymä Group's related parties include associated companies, members of
the Board of Directors, members of the Supervisory Board, the Managing Director
and the Group Executive Team.
THE FOLLOWING RELATED PARTY TRANSACTIONS WERE CARRIED OUT:
(EUR 1,000) 3/2013 3/2012 12/2012
Sales of goods and services
To associated companies 55 66 288
To other related parties 213 201 823
Purchases of goods and services
From associated companies 136 128 463
From other related parties 5
Trade receivables
From associated companies 14 30 13
From other related parties 77 108 47
Accounts payable
To associated companies 15 19 4
Transactions with related parties are conducted at fair market prices.
EMPLOYEE BENEFITS TO MANAGEMENT
(EUR 1,000) 3/2013 3/2012 12/2012
Salaries and other short-term employee benefits 247 222 936
Management comprises the Board of Directors, Supervisory Board, Managing
Director and Group Executive Team. The stated figures based on the cash method
do not differ significantly from those based on the accrual method.
FAIR VALUE HIERARCHY OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES MEASURED AT
FAIR VALUE
Fair value at end of period
(EUR 1,000) 3/2013 Level 1 Level 2 Level 3
Assets measured at fair value
Financial assets at fair value through profit 1 672 1 672
or loss
Available-for-sale financial assets 9 243 9 243
Total 10 915 1 672 9 243
Liabilities measured at fair value
Interest rate swaps 2 199 2 199
Total 2 199 2 199
Available-for-sale assets also include EUR 1,439 thousand for unlisted shares,
which are measured at cost since no reliable fair value was available for them.
At Level 1 of the hierarchy, fair value is based on quoted prices (unadjusted)
in active markets for identical assets or liabilities.
At Level 2, the instruments' fair value is based on inputs other than quoted
prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
At Level 3, the instruments' fair value is based on inputs for the asset or
liability that are not based on observable market data.
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
involve a certain amount of inherent risk and uncertainty. The estimates may
change in the event of significant changes in general economic and business
conditions.
ILKKA-YHTYMÄ OYJ
Board of Directors
Matti Korkiatupa
Managing Director
For more information:
Matti Korkiatupa, Managing Director, Ilkka-Yhtymä Oyj
Tel. +358 (0)500 162 015
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