2016-05-09 12:00:01 CEST
2016-05-09 12:00:01 CEST
REGLERAD INFORMATION
Ilkka-Yhtymä Oyj - Interim report (Q1 and Q3)
Ilkka-Yhtymä Oyj's Interim Report 1 January-31 March 2016
Ilkka-Yhtymä Oyj Interim Report 9 May 2016, at 1:00pm
ILKKA-YHTYMÄ OYJ’S INTERIM REPORT 1 JANUARY-31 MARCH 2016
- Net sales: EUR 9,748 thousand (EUR 10,078 thousand)
- Operating profit: EUR 748 thousand (EUR 1,071 thousand)
- Operating profit excluding Alma Media Corporation and the other associated
companies amounted to EUR 518 thousand (EUR 680 thousand)
- Operating profit totalled 7.7% (10.6%) of net sales, or 5.3% excluding Alma
Media and other associated companies (6.7%)
- Net financial expenses were EUR 1,026 thousand (EUR 196 thousand), of which
the change in the market value of interest rate swaps accounted for EUR -730
thousand (EUR -44 thousand).
- Loss before tax: EUR 278 thousand (profit before tax EUR 875 thousand)
- Earnings per share: EUR -0.01 (EUR 0.03)
- Net gearing was 59.6 % (68.4 %) and eguity ratio 52.0 % (50.0 %)
NET SALES AND PROFIT PERFORMANCE
The Group’s consolidated net sales for January–March showed a 3.3% decline. Net
sales came to EUR 9,748 thousand (EUR 10,078 thousand). External net sales from
the publishing business fell by 2.2%. Advertising revenues fell by 4.3% and
content revenues fell by 2.2%. External net sales from the printing business
decreased by 9.4%. Content income accounted for 47% of consolidated net sales,
while advertising income and printing income represented 38% and 13%,
respectively. Other operating income in January–March totalled EUR 49 thousand
(EUR 154 thousand).
Operating expenses for January–March amounted to EUR 9,280 thousand (EUR 9,565
thousand), down by 3.0% year on year. Expenses arising from materials and
services increased by 0.9%. Personnel expenses decreased by 3.0%. Other
operating costs decreased by 11.3%. Depreciation contracted by 7.3%.
The share of the associated companies’ result was EUR 230 thousand (EUR 391
thousand). Consolidated operating profit amounted to EUR 748 thousand (EUR
1,071 thousand), down by 30.2 per cent year-on-year. The Group’s operating
margin was 7.7 per cent (10.6%). Operating profit excluding Alma Media
Corporation and the other associated companies amounted to EUR 518 thousand
(EUR 680 thousand), representing 5.3% (6.7%) of net sales. Operating profit
from publishing fell by EUR 77 thousand, and operating profit from printing
fell by EUR 75 thousand.
Net financial expenses for January–March amounted to EUR 1,026 thousand (EUR
196 thousand). Interest expenses excluding the fair value change in derivatives
hedging them totalled EUR 303 thousand (EUR 349 thousand). In order to hedge
against interest rate risk, the company has 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 2016, the change in the market value of these
interest rate swaps amounted to EUR -730 thousand (EUR -44 thousand). Net
gain/loss on shares held for trading was EUR -6 thousand (EUR 199 thousand).
Loss before tax totalled EUR 278 thousand (profit before tax EUR 875 thousand)
and the Group's loss for the period totalled EUR 175 thousand (profit for the
period EUR 784 thousand).
BALANCE SHEET AND FINANCING
The consolidated balance sheet total came to EUR 133,009 thousand (EUR 137,176
thousand), with EUR 65,837 thousand (EUR 65,403 thousand) of equity. On the
reporting date of 31 March 2016, the balance sheet value of the holding in the
associated company Alma Media Corporation was EUR 99,242 thousand and the
market value of the shares was EUR 76,478 thousand. According to the
management’s estimate, write-down in this holding is unnecessary.
Interest-bearing liabilities totalled EUR 52,220 thousand (EUR 56,938
thousand). The equity ratio was 52.0 per cent (50.0%), and shareholders’ equity
per share was EUR 2.57 (EUR 2.55). The increase in financial assets for the
period totalled EUR 5,467 thousand (EUR 5,405 thousand), with liquid assets at
the end of the period totalling EUR 11,967 thousand (EUR 10,939 thousand).
Cash flow from operations for the period came to EUR 2,840 thousand (EUR 2,832
thousand). Cash flow from investments totalled EUR 2,626 thousand (EUR 2,573
thousand), including capital repayment from Alma Media Corporation in the
amount of EUR 2,699 thousand (EUR 2,699 thousand).
PERSONNEL
The Group had an average of 285 (294) employees during the period.
Ilkka-Yhtymä announced on 29 February 2016 that it would initiate negotiations
at its printing house I-print Oy in accordance with the Act on Co-operation
within Undertakings. The negotiations concerned the production personnel of
I-print Oy’s newspaper printing press. The objective was to adjust the
operations and the amount of personnel to the reduced volumes. The negotiations
affected the production personnel of the newspaper printing press, excluding
service staff, 26 persons in all.
The negotiations ended on 27 April 2016. As a result, one person will retire
and three persons will be made redundant. Additionally, part of the personnel
will be laid off for up to 38 working days per person and some full-time jobs
will be turned into part-time jobs.
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
Helsinki List, in the Consumer Services sector, the company’s market value
being classified as Small Cap. The Series I shares are listed on the Pre List.
In January–March, 27,373 series-I shares of Ilkka-Yhtymä Oyj were traded,
accounting for 0.6 per cent of the total number of series-I shares. The total
value of the shares exchanged was EUR 65 thousand. In total, 530,719 series-II
shares were traded, corresponding to 2.5 per cent of the total number of series
II shares. The total value of the shares traded was EUR 1,065 thousand. The
lowest price at which series-I shares of Ilkka-Yhtymä Oyj were traded during
the period under review was EUR 2.20, and the highest per-share price was EUR
2.59. The lowest price at which series-II shares were traded was EUR 1.95 and
the highest EUR 2.12. The market value of the share capital at the closing rate
for the reporting period was EUR 54,506 thousand.
RISKS AND RISK MANAGEMENT
In the current economic climate, the forecasting of both net sales and
operating profit involve uncertainties. 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. The risks in the industry are due to its digitalisation
and the continuing poor economic conditions. 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 2015.
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, the
risk of changes in market interest rates applied to the loan portfolio and
liquidity risk. In order to hedge against interest rate risk, the company has
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 2015
Annual Report.
EVENTS AFTER THE REPORT PERIOD
ANNUAL GENERAL MEETING DECISIONS
On 20 April 2016, 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 0.10 be paid for the year 2015.
The number of members on the Supervisory Board for 2016 was confirmed to be 23.
Of the Supervisory Board members whose term had come to an end, the following
were re-elected for the term ending in 2020: Vesa-Pekka Kangaskorpi, Kimmo
Simberg and Jyrki Viitala. Raimo Puustinen, Managing Director, Pohjois-Karjalan
Kirjapaino Oyj, was elected as a new member for the term ending in 2020.
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 2016
In the current uncertain economic climate and competitive environment,
forecasting net sales in the newspaper business involves major uncertainties.
Media advertising in Finland is expected to remain roughly at the previous
year’s level and newspaper circulation income is forecast to decline slightly.
Printing business volumes are expected to decline further.
The net sales of Ilkka-Yhtymä Group are estimated to remain almost at the 2015
level. Operating profit from the Group’s own operations, excluding
non-recurring items and the share of Alma Media’s and other associated
companies’ results, is expected to fall slightly.
The associated company Alma Media Corporation (Group ownership 27.30%) 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 was prepared in accordance with the
requirements of the IAS 34 Interim Financial Reporting standard.
The interim report has been prepared according to the same principles as the
2015 financial statements. Annual improvements to IFRS and IFRIC
interpretations (Annual Improvements 2012–2014) that become effective in 2016
have also been complied with. These changes have not affected the reported
figures. The principles and formulae for the calculation of the indicators,
presented on page 63 of the 2015 annual report, remain unchanged.
All the figures in the interim report are rounded, so the sum of separate
figures may differ from that presented in the report.
The figures in the interim report have been presented unaudited.
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2016 2015 2015
NET SALES 9 748 10 078 -3 % 41 172
Change in inventories of finished and 1 12 -90 % 1
unfinished products
Other operating income 49 154 -68 % 1 763
Materials and services -3 423 -3 392 1 % -13 418
Employee benefits -4 250 -4 380 -3 % -16 548
Depreciation -390 -421 -7 % -1 653
Other operating costs -1 217 -1 372 -11 % -5 331
Share of associated companies’ profit 230 391 -41 % 3 012
OPERATING PROFIT/ LOSS 748 1 071 -30 % 8 998
Financial income and expenses *) -1 026 -196 -424 % -4 519
PROFIT/ LOSS BEFORE TAX -278 875 -132 % 4 479
Income tax 103 -91 -213 % -872
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW -175 784 -122 % 3 607
Earnings per share, undiluted (EUR)**) -0.01 0.03 -122 % 0.14
The undiluted share average (to the nearest 25 665 25 665 25 665
thousand)**)
*) As a result of the dilution of ownership in the associated company Alma
Media Corporation, a non-recurring loss of EUR 3,533 thousand was recorded in
the financial expenses for Q4/2015.
**) There are no factor diluting the figure.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2016 2015 2015
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW -175 784 -122 % 3 607
OTHER COMPREHENSIVE INCOME:
Items that may be reclassified subsequently to profit
or loss:
Available-for-sale assets
Measured at fair value 2 4
Transferred to the income statement 11 -8
Share of associated companies' other comprehensive -24 103 -123 % 517
income
Income tax related to components of other 3
comprehensive income
Other comprehensive income, net of tax -24 115 -121 % 516
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -199 899 -122 % 4 123
SEGMENT INFORMATION
NET SALES BY SEGMENT
(EUR 1,000) 1-3/2016 1-3/2015 Change 1-12/2015
Publishing
External 8 435 8 629 -2 % 35 123
Inter-segments 22 30 -27 % 95
Publishing total 8 457 8 658 -2 % 35 218
Printing
External 1 313 1 449 -9 % 6 048
Inter-segments 1 438 1 575 -9 % 6 273
Printing total 2 751 3 024 -9 % 12 321
Non-allocated
Inter-segments 526 554 -5 % 2 199
Non-allocated total 526 554 -5 % 2 200
Elimination -1 985 -2 159 -8 % -8 567
Group net sales total 9 748 10 078 -3 % 41 172
OPERATING PROFIT/ LOSS BY SEGMENT
(EUR 1,000) 1-3/2016 1-3/2015 Change 1-12/2015
Publishing 477 554 -14 % 3 238
Printing 154 230 -33 % 1 543
Associated companies 230 391 -41 % 3 012
Non-allocated -113 -104 -9 % 1 205
Group operating profit/ loss total 748 1 071 -30 % 8 998
ASSETS BY SEGMENT
(EUR 1,000) 3/2016 3/2015 Change 12/2015
Publishing 14 228 14 239 0 % 9 882
Printing 8 869 9 253 -4 % 9 257
Non-allocated 109 912 113 685 -3 % 108 042
Group assets total 133 009 137 176 -3 % 127 181
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 3/2016 3/2015 Change 12/2015
ASSETS
NON-CURRENT ASSETS
Intangible rights 639 621 3 % 674
Goodwill 314 314 0 % 314
Investment properties 63 142 -56 % 63
Property, plant and equipment 8 512 9 960 -15 % 8 825
Shares in associated companies 100 115 103 105 -3 % 102 608
Available-for-sale assets 2 922 2 945 -1 % 2 922
Non-current trade and other receivables 567 567 0 % 567
Other tangible assets 214 214 0 % 214
TOTAL NON-CURRENT ASSETS 113 347 117 869 -4 % 116 188
Current assets
Inventories 576 551 4 % 614
Trade and other receivables 5 848 6 144 -5 % 2 787
Income tax assets 231 396 -42 % 36
Financial assets at fair value 1 041 1 278 -19 % 1 057
through profit or loss
Cash and cash equivalents 11 967 10 939 9 % 6 500
TOTAL Current assets 19 662 19 307 2 % 10 993
Total assets 133 009 137 176 -3 % 127 181
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDER’S EQUITY
Share capital 6 416 6 416 0 % 6 416
Invested unrestricted equity fund and other 48 690 48 729 0 % 48 691
reserves
Retained earnings 10 730 10 257 5 % 10 928
SHAREHOLDER’S EQUITY 65 837 65 403 1 % 66 035
NON-CURRENT LIABILITIES
Deferred tax liability 23 148 -84 % 194
Non-current interest-bearing liabilities 31 943 54 559 -41 % 31 943
Non-current interest-free liabilities 61 75 -18 % 61
NON-CURRENT LIABILITIES 32 028 54 781 -42 % 32 199
CURRENT LIABILITIES
Current interest-bearing liabilities 20 277 2 379 752 % 20 286
Accounts payable and other payables 14 411 13 955 3 % 8 309
Income tax liability 457 659 -31 % 352
CURRENT LIABILITIES 35 145 16 992 107 % 28 947
SHAREHOLDERS’ EQUITY AND LIABILITIES TOTAL 133 009 137 176 -3 % 127 181
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-3/ 1-3/ 1-12/
2016 2015 2015
CASH FLOW FROM OPERATIONS
Profit/ loss for the period under review -175 784 3 607
Adjustments 1 079 313 2 592
Change in working capital 2 269 2 165 62
CASH FLOW FROM OPERATIONS 3 173 3 262 6 262
BEFORE FINANCE AND TAXES
Interest paid -179 -221 -1 255
Interest received 6 5 50
Dividends received 9 8 66
Other financial items -11 -11 -33
Direct taxes paid -157 -212 -889
CASH FLOW FROM OPERATIONS 2 840 2 832 4 201
CASH FLOW FROM INVESTMENTS
Investments in tangible and -73 -133 -590
intangible assets, net
Disposal of subsidiaries 1 748
Capital repayment received 2 699 2 699 2 699
Proceeds from sale of other investments 8 68
Dividends received from investments 95
CASH FLOW FROM INVESTMENTS 2 626 2 573 4 019
CASH FLOW BEFORE FINANCING ITEMS 5 467 5 405 8 220
CASH FLOW FROM FINANCING
Change in current loans -2 353
Change in non-current loans -2 353
Dividends paid and other profit distribution -2 547
CASH FLOW FROM FINANCING -7 253
INCREASE (+) OR DECREASE (-)IN FINANCIAL ASSETS 5 467 5 405 967
Liquid assets at the beginning of the financial period 6 500 5 534 5 534
Liquid assets at the end of the financial period 11 967 10 939 6 500
GROUP KEY FIGURES
3/2016 3/2015 12/2015
Earnings/share (EUR) -0.01 0.03 0.14
Shareholders' equity/share (EUR) 2.57 2.55 2.57
Average number of personnel 285 294 299
Investments (EUR 1,000) *) 42 140 584
Interest-bearing debt (EUR 1,000) 52 220 56 938 52 229
Equity ratio, % 52.0 50.0 52.9
Net gearing, % 59.6 68.4 67.6
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’ equity capita value unrestricted reserv ed
1-3/ 2015 l reserv equity fund es earnin
e gs
SHAREHOLDERS’ EQUITY 6 416 194 48 498 24 9 371 64 503
1.1.
Comprehensive income 12 887 899
for the period
SHAREHOLDERS’ EQUITY 6 416 207 48 498 24 10 257 65 403
3/ 2015
Change in shareholders’ Share Fair Invested unrestricted Retain Total
equity 1-3/ 2016 capita value equity fund ed
l reserv earnin
e gs
SHAREHOLDERS’ EQUITY 6 416 193 48 498 10 928 66 035
1.1.
Comprehensive income for -199 -199
the period
SHAREHOLDERS’ EQUITY 3/ 6 416 193 48 498 10 730 65 837
2016
GROUP CONTINGENT LIABILITIES
(EUR 1,000) 3/2016 3/2015 12/2015
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 62 425 52 694 55 081
Contingent liabilities on behalf of associated company
Guarantees 3 961 3 961 3 961
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2016 2015 2015
Carrying amount at the beginning of the financial 8 825 10 230 -14 % 10 230
period
Increase 20 88 -78 % 410
Decrease -1 -100 % -261
Depreciation for the financial period -333 -357 -7 % -1 408
Transfers between items -147
Carrying amount at the end of the financial 8 512 9 960 -15 % 8 825
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) 1-3/2016 1-3/2015 1-12/2015
Sales of goods and services
To associated companies 76 58 258
To other related parties 264 198 921
Purchases of goods and services
From associated companies 98 73 256
From other related parties 2 37
Non-current loan receivables from associated 567 567 567
companies
Trade and other receivables
From associated companies 90 45 68
From other related parties 102 81 75
Accounts payable
To associated companies 31 23 24
Transactions with related parties are conducted at fair market prices.
EMPLOYEE BENEFITS TO MANAGEMENT
(EUR 1,000) 1-3/2016 1-3/2015 1-12/2015
Salaries and other short-term employee benefits 317 226 1 026
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) 3/2016 Level 1 Level 2 Level 3
ASSETS MEASURED AT FAIR VALUE
Financial assets at fair value through profit 1 041 1 041
or loss
Available-for-sale financial assets 1 502 1 502
TOTAL 2 543 1 041 1 502
LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps 2 536 2 536
TOTAL 2 536 2 536
Fair value at end of period
(EUR 1,000) 3/2015 Level 1 Level 2 Level 3
ASSETS MEASURED AT FAIR VALUE
Financial assets at fair value through profit 1 278 1 278
or loss
Available-for-sale financial assets 1 525 1 525
TOTAL 2 803 1 278 1 525
LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps 1 848 1 848
TOTAL 1 848 1 848
Available-for-sale assets also include EUR 1,420 thousand for unlisted shares
(EUR 1,420 thousand in 3/2015), 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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