Alma Media - Financial Statement Release

Alma Media’s Financial Statements Release 2017: Strong Q4, substantial growth in operating profit

Alma Media Corporation    Financial Statements Bulletin    10 February 2017 at
9:00 a.m. (EET)

Alma Media’s Financial Statements Release 2017:

STRONG Q4, SUBSTANTIAL GROWTH IN OPERATING PROFIT

Financial performance October–December 2016:

  · Revenue MEUR 93.6 (78.6), up 19.2%.
  · Adjusted operating profit MEUR 10.6 (7.1), or 11.2% (9.0%) of revenue, up
49.5%.
  · Operating profit MEUR 6.2 (0.9), or 6.7% (1.1%) of revenue, up 596.4%.
  · Earnings per share EUR 0.06 (0.00).
  · Alma Markets: Strong growth continued internationally as well as in
Finland.
  · Alma Talent: Talentum acquisition increased the segment’s adjusted operating
profit.
  · Alma News & Life: Online advertising continued to grow.
  · Alma Regions: Decline in revenue slowed and profitability remained on par
with the previous year.

Financial performance January–December 2016:

  · Revenue MEUR 353.2 (291.5), up 21.2%.
  · Adjusted operating profit MEUR 35.2 (23.4), or 10.0% (8.0%) of revenue, up
50.4%.
  · Operating profit MEUR 26.8 (17.7), or 7.6% (6.1%) of revenue, up 51.5%.
  · Earnings per share EUR 0.20 (0.13).
  · The Board’s dividend proposal is EUR 0.16 per share
  · At the end of the period, the gearing ratio was 41.4% and the equity ratio
45.7%.

+-----------------------+-----+-----+--------+------+------+----------+
|KEY FIGURES            |2016 |2015 |Change  |2016  |2015  |Change    |
+-----------------------+-----+-----+--------+------+------+----------+
|MEUR                   |Q4   |Q4   |%       |Q1–Q4 |Q1–Q4 |%         |
+-----------------------+-----+-----+--------+------+------+----------+
|Revenue                |93.6 |78.6 |19.2    |353.2 |291.5 |21.2      |
+-----------------------+-----+-----+--------+------+------+----------+
|Content revenue        |33.3 |28.6 |16.1    |128.3 |104.1 |23.3      |
+-----------------------+-----+-----+--------+------+------+----------+
|     Content revenue,  |29.2 |26.3 |11.2    |113.5 |97.0  |17.0      |
|print                  |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|     Content revenue,  |4.1  |2.4  |71.0    |14.8  |7.1   |109.3     |
|online                 |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|Advertising revenue    |45.9 |40.9 |12.2    |171.0 |148.2 |15.3      |
+-----------------------+-----+-----+--------+------+------+----------+
|     Advertising       |17.9 |17.6 |1.7     |68.5  |66.2  |3.5       |
|revenue, print         |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|     Advertising       |28.0 |23.3 |20.5    |102.6 |82.0  |25.1      |
|revenue, online        |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|Service revenue        |14.5 |9.0  |60.5    |53.9  |39.2  |37.6      |
+-----------------------+-----+-----+--------+------+------+----------+
|Adjusted total         |83.3 |71.7 |16.1    |318.9 |268.7 |18.7      |
|expenses               |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|Adjusted EBITDA        |15.2 |10.8 |39.7    |53.3  |37.4  |42.4      |
+-----------------------+-----+-----+--------+------+------+----------+
|EBITDA                 |13.8 |6.1  |127.7   |47.9  |34.5  |38.8      |
+-----------------------+-----+-----+--------+------+------+----------+
|Adjusted operating     |10.6 |7.1  |49.5    |35.2  |23.4  |50.4      |
|profit                 |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|% of revenue           |11.2 |9.0  |        |10.0  |8.0   |          |
+-----------------------+-----+-----+--------+------+------+----------+
|Operating profit       |6.2  |0.9  |596.4   |26.8  |17.7  |51.5      |
|(loss)                 |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|% of revenue           |6.7  |1.1  |        |7.6   |6.1   |          |
+-----------------------+-----+-----+--------+------+------+----------+
|Profit for the period  |4.9  |0.3  |1,530.2 |19.9  |12.1  |64.6      |
+-----------------------+-----+-----+--------+------+------+----------+
|Earnings per share, EUR|0.06 |0.00 |3,533.3 |0.20  |0.13  |57.4      |
|(undiluted and basic)  |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|                       |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+
|Online sales           |36.4 |29.1 |25.0    |133.5 |104.3 |     27.9 |
+-----------------------+-----+-----+--------+------+------+----------+
|Online sales, % of     |38.9 |37.1 |        |37.8  |35.8  |          |
|revenue                |     |     |        |      |      |          |
+-----------------------+-----+-----+--------+------+------+----------+

Dividend proposal to the Annual General Meeting:

On 31 December 2016, the Group’s parent company had distributable funds
totalling EUR 124,646,114 (119,915,169). Alma Media’s Board of Directors
proposes to the Annual General Meeting that a dividend of EUR 0.16 per share
(2015: capital repayment of EUR 0.12 per share) be paid from the reserve for
invested non-restricted equity for the financial year 2016. Based on the number
of shares on the closing date 31 December 2016, the dividend payment totals EUR
13,181,309 (2015: capital repayment EUR 9,885,982).

No essential changes have taken place after the end of the financial year with
respect to the company’s financial standing. The proposed distribution of profit
does not, in the view of the Board of Directors, compromise the company’s
liquidity.


Outlook for 2017

The Finnish economy is expected to grow by 1–2% in 2017. Alma Media’s
significant operating countries in Eastern Central Europe, such as the Czech
Republic and Slovakia, are expected to see economic growth of 2–4%.
Macroeconomic development affects both consumer demand and advertising volume.
The structural transformation of advertising will continue in 2017; online
advertising will grow, while print media advertising will decline.

In 2017, Alma Media expects its full-year revenue to remain at the previous
year’s level and its adjusted operating profit to increase from the 2016 level.
The full-year revenue for 2016 was MEUR 353.2, and the adjusted operating profit
was MEUR 35.2.

Kai Telanne, President and CEO:

Alma Media’s business developed well in 2016. Full-year revenue grew by 21 per
cent to MEUR 353 and adjusted operating profit increased by 50 per cent to MEUR
35. Earnings per share rose to EUR 0.20 in spite of restructuring costs,
impairment and an increase in the number of shares. The Board of Directors
proposes to the Annual General Meeting that a dividend of EUR 0.16 per share be
paid.

The growth in revenue was attributable to the strong organic development of Alma
Markets and Alma News & Life, as well as acquisitions. Growth was also supported
by the media advertising market in Finland, which showed signs of recovery in
the fourth quarter. The improved profitability is particularly attributable to
the Alma Markets and Alma News & Life segments, which both achieved organic
sales growth.

The Alma Markets segment’s revenue and profitability improved in each quarter
thanks to excellent development efforts and work with customers, as well as the
favourable operating environment in Eastern Central Europe. The revenue and
operating profit of the marketplace businesses also increased substantially in
Finland. The segment’s full-year adjusted operating profit grew by nearly 40 per
cent year-on-year, to MEUR 19.

In the Alma News & Life segment, Iltalehti’s digital business saw strong
development. The factors contributing to the growth included programmatic ad
buying, content marketing and mobile advertising. The adjusted operating profit
grew to MEUR 7 on the strength of good digital sales and cost savings in print
media.

For Alma Talent, the year was a time of building a new entity. The integration
of Talentum’s businesses went according to plan and the estimated cost synergies
will be achieved in full. Comparable revenue decreased by three per cent. The
decline was particularly attributable to the service business. The integration
process has made Alma Talent a unique media and service provider in Finland and
Sweden, with the aim of introducing multimedia products and services to the
market that offer superior usability and richer content.

In Alma Regions, the decline in revenue from publishing operations slowed in
late 2016. The segment’s adjusted operating profit remained on a par with the
previous year thanks to cost savings. Digital media advertising sales grew
faster than the overall market by a substantial margin, but the growth was not
yet sufficient to compensate for the decline in print media advertising sales.

The Group’s financial position improved further due to strong cash flow from
operating activities. At the end of December, the equity ratio was 46 per cent
and the gearing ratio was 41 per cent. Interest-bearing net debt declined by
MEUR 19.1. The strong financial foundation provides operating space for future
investments and the acceleration of growth by leveraging the opportunities
presented by digitisation.

The Finnish government’s favourable view on the European Commission’s proposal
to reduce value added taxes on digital publications and books is a positive
signal for our industry. The potential lowering of the Finnish digital VAT rate
from the current level of 24 per cent to 10 per cent in 2018 would help Finnish
media companies maintain their competitiveness while also increasing the demand
and use of digital services and content.

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 EET 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.fi/en/investors/reports-and-presentations/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 2016 will begin at 13.00 EET. You can participate in the conference by
calling +44(0)20 3427 1912 (confirmation code: 4381793) or follow it at
http://www.almamedia.fi/en/investors/reports-and-presentations/presentations.



Alma Media’s financial calendar 2017

Alma Media will publish financial reports in 2017 as follows:

– Interim report for January–March 2017 on Friday, 28 April at approximately
9:00 EEST

– Interim report for January–June 2017 on Friday, 21 July at approximately 9:00
EEST

– Interim report for January–September 2017 on Friday, 27 October at
approximately 9:00 EEST

Alma Media’s Annual Review 2016, including corporate responsibility reporting,
is scheduled to be published in calendar week 12, 2017 at the latest.

The Annual General Meeting is planned to be held on Wednesday, 22 March 2017.
Financial Statements, Report by the Board of Directors, Auditor's Report and
Corporate Governance Statement for the 2016 financial year will be published on
Wednesday, 1 March 2017.

The materials related to the Annual General Meeting will be available on the
Alma Media website.

ALMA MEDIA CORPORATION

Board of Directors

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


Alma Media in brief

Alma Media is a media company focusing on the service business and journalistic
content. The company’s best-known brands are Kauppalehti, Talouselämä,
Affärsvärlden, Iltalehti, Aamulehti, Etuovi.com and Monster. Alma Media builds
sustainable growth for its customers by utilising the opportunities of
digitality, including information services, system and expert services and
advertising solutions. Alma Media’s operations have expanded from Finland to the
Nordic countries, the Baltics and Central Europe. Alma Media employs
approximately 2,300 professionals (excluding delivery personnel), of whom
approximately 30% work outside Finland. Alma Media’s revenue in 2016 was EUR
353.2 million. Alma Media’s share is listed on NASDAQ Helsinki. Read more at
www.almamedia.com.

Attachments:

02096716.pdf