2016-02-22 14:00:02 CET
2016-02-22 14:00:02 CET
REGULATED INFORMATION
Ilkka-Yhtymä Oyj - Financial Statement Release
The Ilkka-Yhtymä Group's Financial Statements for 2015
Ilkka-Yhtymä Oyj Financial Statements Bulletin, 22 February 2016, at 3 p.m.
THE ILKKA-YHTYMÄ GROUP’S FINANCIAL STATEMENTS FOR 2015
FINANCIAL YEAR 2015
- Net sales: EUR 41,172 thousand (EUR 41,802 thousand)
- Operating profit: EUR 8,998 thousand (EUR 9,251 thousand)
- Operating profit excluding Alma Media Corporation and the other associated
companies amounted to EUR 5,986 thousand (EUR 4,933 thousand)
- Operating profit totalled 21.9% of net sales, or 14.5% (11.8%) excluding Alma
Media and other associated companies
- The operating profit for the period includes a non-recurring capital gain of
EUR 1,421 thousand. The comparable operating profit, excluding associated
companies and the non-recurring capital gain, was EUR 4,565 thousand (EUR 4,933
thousand) and operating margin 11.1% (11.8%).
- As a result of the dilution of ownership in the associated company Alma
Media, a non-recurring loss of EUR 3,533 thousand was recorded in financial
items in the consolidated financial statements. This entry has no impact on
cash flow.
- Earnings per share: EUR 0.14 (EUR 0.35)
- Eguity ratio 52.9% (50.2%)
- Net gearing 67.6% (78.0%)
- The Board of Directors proposes a per share dividend of EUR 0.10
OCTOBER-DECEMBER 2015
- Net sales: EUR 10,711 thousand (EUR 10,963 thousand)
- Operating profit: EUR 1,299 thousand (EUR 2,913 thousand)
- Operating profit excluding Alma Media Corporation and the other associated
companies amounted to EUR 1,356 thousand (EUR 1,768 thousand)
- Operating profit totalled 12.1% of net sales, or 12.7% (16.1%) excluding Alma
Media and other associated companies
- As a result of the dilution of ownership in the associated company Alma
Media, a non-recurring loss of EUR 3,533 thousand was recorded in financial
items in the consolidated financial statements. This entry has no impact on
cash flow.
- Earnings per share: EUR -0.10 (EUR 0.09)
MATTI KORKIATUPA, MANAGING DIRECTOR:
The economic conditions in Finland continued to be challenging in 2015. The
year began on a positive note in terms of net sales and profitability, but the
end of the year was weaker due to a drop in advertising sales.
In accordance with our content strategy, part of our digital content that was
previously free for consumers was turned into paid-for content, and we also
launched a new content and news video production service subject to a charge.
The joint content-creation company of twelve provincial newspapers, Lännen
Media Oy, proved its value in its first year of operation. The feedback
provided by both customers and editorial departments on the collaboration was
positive.
Our largest strategic project aimed at significantly raising the service level
of the newspapers by including digital subscriptions in all paper
subscriptions. The service level improved particularly for customers who live
in sparsely populated areas or travel frequently, due to the possibility to
read the papers anywhere, anytime. In delivery, we continued our cooperation
with Posti by signing a new multi-year contract. The contract is largely based
on joint deliveries and productivity generated by the volumes of postal items
included in these.
We reformed our B2B sales to support the service offering and sales of our new
multi-channel advertising network. We offer a wide range of advertising
solutions consisting of services provided by us and our associated companies or
other partners, in order to boost our customers’ marketing and sales.
During the autumn, we updated our business areas and management system. Our
businesses include provincial newspapers and free sheets, local newspapers, and
printing and communications services. These are backed up by the publishing
company’s and the parent company’s support services, together with the digital
services provided by our associated companies.
In the ongoing year, we will improve customer service by means of a newspaper
revamp based on the existing format of our provincial papers, and by enhancing
the usability of the digital services. Our personnel policy will focus on
motivation and encouragement, along with the development of employee skills in
the transforming newspaper sector.
Although personnel and other costs will rise only slightly, the weak outlook
for net sales calls for increasing productivity in all parts of the company.
The combination of our associated company Alma Media Corporation and Talentum
Corporation inspires faith in the Finnish media’s ability to transform itself
and continue to prosper well into the future.
BUSINESS ENVIRONMENT
According to the Bank of Finland forecast of 10 December 2015, the Finnish GDP
was expected to shrink by approximately 0.1% in 2015. Driven by domestic
demand, GDP is expected to grow in 2016, but only slowly, by 0.7%. Private
consumption is estimated to have increased by 0.5% in 2015. The projected
growth for private consumption in 2016 is in the region of 0.6 per cent.
According to Statistics Finland, the inflation rate was -0.2% in December. The
consumer survey of Statistics Finland shows that consumers’ confidence in
Finland’s economy strengthened in January 2016.
According to a survey conducted by TNS Gallup Oy in cooperation with the
Finnish Advertising Council, media advertising decreased by 2.1% in 2015.
Advertising in newspapers fell by 7.5%, while advertising in free sheets
increased by 1.2%. Newspapers and free sheets accounted for 30.6% and 5.6% of
media advertising, respectively. Web media advertising saw an increase of 6.8%,
representing a 24.8% share of media advertising.
GROUP STRUCTURE
The Ilkka-Yhtymä Group is a media group that consists of the parent company
Ilkka-Yhtymä Oyj, the publishing company I-Mediat Oy, as well as the printing
company I-print Oy. The Group also includes property company, Kiinteistö Oy
Seinäjoen Koulukatu 10. In the financial year 2015 Ilkka-Yhtymä Oyj sold the
shares of one of its property companies, Seinäjoen Kassatalo Oy. On 31 December
2015, Pohjalaismediat Oy was merged with Ilkka-Yhtymä Oyj. Our main products
are the regional newspapers Ilkka and Pohjalainen, five local newspapers
(Viiskunta, Komiat, Järviseutu, Suupohjan Sanomat and Jurvan Sanomat), two free
sheets (Vaasan Ikkuna and Etelä-Pohjanmaa), including the online and mobile
services of these papers, and I-print Oy's printing and communications
services.
The associated companies included in our consolidated financial statements are
Alma Media Corporation, Arena Partners Oy and Yrittävä Suupohja Oy.
CONSOLIDATED NET SALES AND PROFIT PERFORMANCE FOR THE FINANCIAL YEAR
Consolidated net sales decreased by 1.5%, amounting to EUR 41,172 thousand (EUR
41,802 thousand in 2014). External net sales from publishing operations
decreased by 3.3%. Advertising revenues fell by 6.5% and circulation revenues
by 1.8%. External net sales from the printing business increased by 10.5%.
Circulation income accounted for 46% of consolidated net sales, while
advertising income and printing income represented 39% and 15%, respectively.
Other operating income totalled EUR 1,763 thousand (EUR 454 thousand). The
other operating income for the financial year, includes a non-recurring capital
gain of EUR 1,421 thousand. Ilkka-Yhtymä Oyj sold the shares of one of its
property companies, Seinäjoen Kassatalo Oy. The deal was closed on 30 September
2015.
The Group operating expenses for the financial year amounted to EUR 36,950
thousand (EUR 37,319 thousand), down by 1.0% year-on-year. Expenses arising
from materials and services increased by 0.3%. Personnel expenses decreased by
1.4%. Other operating costs increased by 0.5%. Depreciation contracted by
10.9%.
The share of the associated companies’ result was EUR 3,012 thousand (EUR 4,318
thousand). Consolidated operating profit amounted to EUR 8,998 thousand (EUR
9,251 thousand), down by 2.7% year-on-year. The Group’s operating margin was
21.9% (22.1%). Operating profit excluding Alma Media Corporation and the other
associated companies amounted to EUR 5,986 thousand (EUR 4,933 thousand),
representing 14.5% (11.8%) of net sales. The operating profit for the financial
year includes a non-recurring capital gain of EUR 1,421 thousand. The
comparable operating profit, excluding associated companies and the
non-recurring capital gain, was EUR 4,565 thousand (EUR 4,933 thousand) and
operating margin 11.1% (11.8%).
Net financial expenses amounted to EUR 4,519 thousand (net financial income in
the corresponding period of the previous year EUR 883 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 financial expenses in
the consolidated financial statements. This entry has no impact on cash flow.
In November 2015, Alma Media Corporation made an exchange offer to Talentum’s
shareholders. In accordance with the offer, Alma Media gave 0.25 new Alma Media
shares as share consideration and EUR 0.70 as cash consideration for each
Talentum share. After the completion of the exchange offer, Ilkka-Yhtymä Oyj’s
holding in Alma Media Corporation decreased from 29.79% to 27.30%. Ilkka-Yhtymä
Oyj is the largest shareholder of Alma Media Corporation. As an associated
company, Alma Media is consolidated using the equity method.
Interest expenses excluding the fair value change in derivatives hedging them
totalled EUR 1,308 thousand (EUR 1,678 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.
The change in the market value of these interest rate swaps amounted to EUR -3
thousand (in 2014, EUR -102 thousand). Net gain/loss on shares held for trading
was EUR 46 thousand (EUR -130 thousand). Financial income for 2014 includes a
capital gain of EUR 2 million from the sale of Anvia Oyj’s shares.
Profit before tax totalled EUR 4,479 thousand (EUR 10,133 thousand). Direct
taxes amounted to EUR 872 thousand (EUR 1,063 thousand), and consolidated
profit for the period totalled EUR 3,607 thousand (EUR 9,070 thousand).
Earnings per share amounted to EUR 0.14 (EUR 0.35).
Q4 NET SALES AND PROFIT PERFORMANCE
In Q4/2015, consolidated net sales totalled EUR 10,711 thousand (EUR 10,963
thousand), down by 2.3%. External net sales from the publishing business fell
by 4.7%. External net sales from the printing business increased by 13.3%.
Circulation income accounted for 44% of consolidated net sales in
October–December, while advertising income and printing income represented 40%
and 16%, respectively. Other operating income in October–December totalled EUR
41 thousand (EUR 154 thousand).
In Q4, the Group’s expenses totalled EUR 9,395 thousand (EUR 9,344 thousand),
up by 0.5%. For October-December 2015, the share of the associated companies’
result was EUR -56 thousand (EUR 1,145 thousand).
In the fourth quarter, consolidated operating profit amounted to EUR 1,299
thousand (EUR 2,913 thousand). Operating profit decreased 55.4% from
corresponding period. The Group’s operating margin was 12.1% (26.6%) in
October–December. Operating profit excluding Alma Media Corporation and the
other associated companies amounted to EUR 1,356 thousand (EUR 1,768 thousand),
representing 12.7% (16.1%) of net sales.
Net financial expenses amounted to EUR 3,743 thousand (EUR 336 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
Group’s financial expenses in the fourth quarter. This entry has no impact on
cash flow. For the fourth quarter, interest expenses excluding the fair value
change in derivatives hedging them totalled EUR 304 thousand (EUR 382
thousand). In October–December 2015, the change in the market value of interest
rate swaps was EUR -15 thousand (in October-December 2014, EUR +31 thousand).
Net gain/loss on shares held for trading was EUR 90 thousand (EUR -2 thousand).
The consolidated loss for the fourth quarter totalled EUR 2,669 thousand
(profit EUR 2,280 thousand for October-December 2014).
BALANCE SHEET AND FINANCING
The consolidated balance sheet total came to EUR 127,181 thousand (EUR 130,536
thousand), with EUR 66,035 thousand (EUR 64,503 thousand) of equity. On the
reporting date of 31 December 2015, the balance sheet value of the holding in
the associated company Alma Media Corporation was EUR 101,760 thousand and the
market value of the shares was EUR 67,468 thousand. According to the
management’s estimate, write-down in this holding is unnecessary.
At the end of the 2015 financial year, interest-bearing liabilities totalled
EUR 52,229 thousand (EUR 56,936 thousand on 31 December 2014), and their
average maturity was 3 years 2 months (3 years 11 months on 31 December 2014).
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. Presently, some 58% of the loans in the company’s total
loan portfolio have a fixed rate and some 42% a floating rate. These hedging
measures included, the average interest rate for interest-bearing liabilities
on 31 December 2015 came to 2.16% (2.50%).
As at 31 December 2015, the impact of floating-rate interest-bearing
liabilities on profit before taxes would have amounted to -/+ EUR 220 thousand
over the next 12 months, if the interest level increases or decreases by one
percentage point. Of interest-bearing liabilities existing during the 12 months
following the financial year, a total of EUR 20,250 thousand will fall due for
payment.
Group net gearing was 67.6% (78.0%) at the end of the financial period. Equity
ratio was 52.9% (50.2%) and shareholders’ equity per share stood at EUR 2.57
(EUR 2.51). The increase in financial assets for the period totalled EUR 967
thousand (EUR 3,553 thousand), with liquid assets at the end of the period
totalling EUR 6,500 thousand (EUR 5,534 thousand).
For the financial year, cash flow from operations came to EUR 4,201 thousand
(EUR 3,710 thousand). Cash flow from investments totalled EUR 4,019 thousand
(EUR 11,841 thousand), including capital repayment from Alma Media Corporation
in the amount of EUR 2,699 thousand (EUR 2,249 thousand in the comparison
period). Cash flow from investments for the financial year includes EUR 1,748
thousand of proceeds from the sale of property company’s shares. Cash flow from
investments for 2014 includes EUR 9,462 thousand of proceeds from the sale of
Anvia Oyj’s shares.
PUBLISHING
The Group’s publishing segment comprises the publishing company I-Mediat Oy.
During the year, net sales from publishing totalled EUR 35,218 thousand (EUR
36,413 thousand). Net sales from the publishing business decreased by 3.3%. The
decrease in net sales from the publishing business was mainly caused by a
weaker advertising market. Advertising revenues fell by 6.5% and circulation
revenues by 1.8%. Operating profit from publishing decreased by 7.0%
year-on-year, to EUR 3,238 thousand (EUR 3,481 thousand).
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.
Net sales of I-Mediat Oy are expected to remain almost the same as in the
previous year.
PRINTING
The printing segment comprises the printing house I-print Oy. Net sales for the
printing business, EUR 12,321 thousand (EUR 12,333 thousand), were almost
unchanged from the previous year. External net sales from the printing business
increased by EUR 576 thousand (10.5%). Operating profit from printing decreased
by 11.7% year-on-year, to EUR 1,543 thousand (EUR 1,749 thousand).
Within the printing business, the market situation in Finland is expected to
remain difficult in 2016. The overcapacity in the graphics sector will
continue, while printing volumes will decrease further. The rise in raw
material and energy costs is expected to be moderate. I-print Oy’s net sales
are projected to fall slightly.
ASSOCIATED COMPANIES
Ilkka-Yhtymä Group’s associated companies are Alma Media Corporation (27.30%),
Arena Partners Oy (37.82%) and Yrittävä Suupohja Oy (38.46%).
Alma Media focuses on publishing operations and digital consumer and corporate
services. Its high-profile newspapers are Aamulehti, Iltalehti and Kauppalehti.
In November 2015, Alma Media Corporation made an exchange offer to Talentum’s
shareholders, of whom around 95% accepted the offer.
Arena Partners Oy is a digital business development and production company
jointly owned by five provincial newspaper companies. Arena Partners owns a 35%
share of Alma Mediapartners Oy, which is Alma Media’s housing sales, vehicle
and consumer advertising marketplace company operating in Finland. The Arena
Partners Group also includes the subsidiary Arena Interactive Oy (65%),
focusing on mobile services, the recruitment agency Uranus Oy (100%) and Adfore
Technologies Oy (34%).
Yrittävä Suupohja Oy publishes Suupohjan Seutu, a free sheet distributed in the
Suupohja region.
ILKKA-YHTYMÄ OYJ AND POSTI OY SIGNED AN AGREEMENT FOR NEWSPAPER DELIVERIES IN
SOUTH OSTROBOTHNIA AND VAASA
Ilkka-Yhtymä Oyj and Posti Oy announced on 12 May 2015 that they had agreed to
continue their collaboration on newspaper deliveries for several years, and
that they would specify the contract over the course of the year. The final
agreement, signed on 20 August 2015, will ensure the best possible service
level and cost-efficiency for the provincial and local newspapers in both
population centres and sparsely populated areas.
The solution is based on the current delivery model, developed together by the
parties since 2007. The delivery model will make partial use of the joint
delivery of newspapers and other postal items.
RESEARCH AND DEVELOPMENT EXPENSES
In the Group's publishing business, product development for multiple channels
has been carried out with Arena Partners Oy, Lännen Media Oy and their
shareholding newspapers as well as the Next Media programme of Finnmedia
(Federation of the Finnish Media Industry). The focus in product development is
on customer-driven multi-channel services related to news reporting,
transactions and communities. With regard to the Group’s printing business, the
focus was on the development of value-added services and products.
CAPITAL EXPENDITURE
Reported capital expenditure for the year totalled EUR 584 thousand, with
printing accounting for EUR 120 thousand and publishing for EUR 272 thousand.
ANNUAL GENERAL MEETING, SUPERVISORY BOARD AND BOARD OF DIRECTORS
On 22 April 2015, 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 2014.
The number of members on the Supervisory Board for 2015 was confirmed to be 24.
Of the Supervisory Board members whose term had come to an end, the following
were re-elected for the term ending in 2019: Lasse Hautala, Satu Heikkilä,
Perttu Rinta, Ari Rinta-Jouppi, Minna Sillanpää and Jorma Vierula.
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, MSc(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 share issue and/or
granting stock options and/or other special rights and upon their conditions.
The maximum number of Series II shares issued under the authorisation is
7,700,000, corresponding to around 30% of the company’s total shares and 36.05%
of Series II shares at present. This authorisation includes the right to issue
shares and/or stock options and/or other special rights as distinct from the
shareholders’ pre-emptive rights, under conditions prescribed by law, and the
right to decide upon a free issue to the company itself. The authorisation is
valid for five years from the date of the AGM’s decision.
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.
At its meeting on 4 May 2015, the Supervisory Board re-elected Markku Hautanen
and Tapio Savola to the Board of Directors of Ilkka-Yhtymä Oyj when their terms
of service had come to an end. Lasse Hautala will continue as chairman of the
Supervisory Board, while Perttu Rinta will continue as vice-chairman.
At its membership meeting, the Board of Directors re-elected Timo Aukia as its
chairman, while Esa Lager will continue as vice-chairman. The Board of
Directors of Ilkka-Yhtymä Oyj now has the following membership: chairman Timo
Aukia, vice-chairman Esa Lager, members Markku Hautanen, Sari Mutka, Tapio
Savola, and Riitta Viitala.
SHARE PERFORMANCE
At the end of 2015, the company’s share capital totalled EUR 6,416,302. The
number of shares was 25,665,208, of which 4,304,061 were Series I shares (20
votes per share) and 21,361,147 were Series II shares (1 vote per share).
Shares of both series entitle the holders to the same dividend.
According to the Articles of Association, a single shareholder at a General
Meeting may not use more than one twentieth (1/20) of the entire number of
votes represented in a meeting.
The transfer of Series I shares is restricted by an approval clause. According
to this clause, Series I shares cannot be transferred to another holder without
the approval of the Board of Directors.
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.
The number of Series I shares of Ilkka-Yhtymä Oyj traded in 2015 was 129,096,
which represents 3.0% of the series share stock. The total value of the shares
exchanged was EUR 339 thousand. In total, 3,393,977 series-II shares were
traded, corresponding to 15.9% of the total number of series II shares. The
total value of the shares traded was EUR 7,283 thousand. The lowest price at
which series-I shares of Ilkka-Yhtymä Oyj were traded during the period under
review was EUR 2.17, and the highest per-share price was EUR 3.49. The lowest
price at which series-II shares were traded was EUR 1.92 and the highest EUR
2.68. The market value of the share capital at the closing rate for the
reporting period was EUR 53,994 thousand.
The Board of Directors has an effective authorisation to decide upon a share
issue and/or granting stock options and/or other special rights and upon their
conditions. On 4 November 2010, Ilkka-Yhtymä Oyj purchased 7,250,000 shares in
Alma Media Corporation from Oy Herttaässä Ab. From the share purchase price,
EUR 30 million was paid in cash. In addition, Ilkka-Yhtymä decided to issue
freely negotiable convertible bonds, with a value of EUR 20.0 million, to the
seller. The bond issue decision taken by Ilkka-Yhtymä’s Board of Directors is
based on the authorisation granted to it by the AGM on 19 April 2010.
In addition to this, the company has not issued any option rights or other
special rights.
The Board of Directors is not authorised to acquire or sell the company’s own
shares.
PERSONNEL
The average number of employees (full-time equivalents) was 299 (311 in 2014).
In the year under review, the Group had, on average, 331 (348) employees with
employment contracts. On 31 December 2015, the Group had 290 full-time
employees (294).
Ilkka-Yhtymä Group's entire personnel has been covered by an incentive scheme
since 2000. According to the Articles of Association, Ilkka-Yhtymä Oyj's
Supervisory Board must include two employee representatives.
On 30 January 2015, Ilkka-Yhtymä Group announced that the Group’s publishing
company I-Mediat Oy and the printing house I-print Oy will start cooperation
negotiations. The negotiations mainly concerned provincial newspapers’
technical production and media sales personnel and the personnel of the
printing press. The purpose of the negotiations was to adjust the operations
and the amount of personnel to the requirements of increasingly digital
operations and reducing volumes.
As a result of the negotiations, I-Mediat Oy cut seven jobs and laid off
advertisement production employees temporarily. At I-print Oy’s newspaper
printing house, employees were also temporarily laid off.
Ilkka-Yhtymä announced on 17 June 2015 that it would clarify operational
responsibilities at its publishing company I-Mediat Oy and complement the Group
Executive Team as of 1 September 2015. The matrix organisation and governance
model, which have been in use since 2010, was changed into a business-driven
management system, which will better meet the requirements of the increasingly
digital business environment.
Marko Orpana, MSc (Econ.), was appointed as the director in charge of I-Mediat
Oy’s provincial newspaper and free sheet business and internal support
services. Previously Orpana was the director in charge of I-Mediat Oy’s web and
mobile business. Sauli Harjamäki, DSc (Econ.), will continue as the director in
charge of I-Mediat Oy’s local newspaper business and newspaper delivery. They
were both appointed as members to the Group Executive Team.
In December, Ilkka-Yhtymä Oyj’s Board of Directors appointed Annika Tuovinen,
MSocSc, to succeed Paula Mahlamäki as the Group’s HR Director. Tuovinen will
take up her post at the beginning of March 2016. The HR Director is a member of
the Group Executive Team.
In accordance with Ilkka-Yhtymä’s management system, the joint editorial
function of the provincial newspapers is managed by a management team, which is
alternately chaired by the Editors-in-Chief of Ilkka and Pohjalainen. The
chairman of the editorial function’s management team is also a member of the
Group Executive Team. Since January 2016, the post has been held by the
Editor-in-Chief of Pohjalainen, Toni Viljanmaa (MA).
ESTIMATED OPERATING RISKS AND UNCERTAINTIES
Ilkka-Yhtymä's most significant short-term risks are still related to the
development of media advertising, as well as circulation and printing volumes.
In a weak economic climate, these risks affect the entire sector. In the longer
term, there is a risk of a decrease in circulation and advertising volumes, if
consumers choose to switch to competitors’ alternative digital services.
Through its holding in Alma Media stock, the company is also exposed to risks
related to Alma Media’s profit-making capacity, dividend policy and the price
development of its shares.
Communications industry
The company estimates that the Group's core operations only involve risks
normally associated with the industry operating in a changing business
environment. Such industry risks are mainly related to the development of media
advertising and content consumption, since more and more alternatives are being
offered to consumers and advertisers. A prolonged weak economic situation and a
slow recovery will have a negative impact on the consumption of media products
and services. Competition in the industry is being affected by the
digitalisation of content and advertising, the emergence of new distribution
channels, growth in advertiser-funded digital content, changes in media use and
ways of spending time, as well as by the new operating methods and the actors
these are enabling.
Publishing
In the long term, regional demographic and economic developments will have an
impact on provincial and local newspapers’ circulation and advertising income.
A healthy circulation coverage percentage, a competitive contact price and
strong relationships with readers are enhancing provincial and local
newspapers’ competitiveness in the advertising market. The strong growth seen
in the volumes of online and mobile users has extended the overall reach of
provincial newspapers.
In general, ordinary economic cycles have not had a major impact on local or
provincial newspapers' circulation income. On the other hand, media advertising
volumes reflect changes in economic cycles, competitive situations and the
outlook of advertisers’ own industries. Media sales took a downturn in spring
2012, and the trend still continued in 2015.
Economic cycles, the regional development of the advertising market and other
competitive conditions all have an influence on the rate of market entry and
exit of new media, such as free sheets and digital services. Like most other
newspaper groups, Ilkka-Yhtymä has years of experience of its own free sheets
and digital services. The comprehensive regional advertising network formed by
these, coupled with local customer relationships, give the Group a competitive
edge.
Due to the consumer behaviour enabled by new technology, some classified
advertisements, such as car, housing and job advertisements, have shifted
online. In response to this development, Ilkka and Pohjalainen are engaged in
collaboration with Arena Partners and Alma Mediapartners. Ilkka-Yhtymä’s
associated companies Alma Media Corporation and Arena Partners Oy own the
Etuovi.com, Vuokraovi.com and Autotalli.com services, which enable us to
provide our customers with the best services in these sectors. New players in
the market include for instance international search engine companies.
In order to face the challenges posed by changing reading habits among
consumers and the growing volumes of digital content available free of charge,
Ilkka-Yhtymä Group is providing its provincial newspapers’ premium online and
mobile services for the benefit of the region's consumers. In line with the
allied Arena Partners’ strategy, the aim is for these services to become the
leading place for digital news, services, transactions and commerce for
consumers, communities and companies in our operating provinces.
Graphics
Fierce price competition continues in the Finnish printing sector. Developments
in circulation and advertising volumes are reflected in the numbers of pages in
newspapers, and the use of other advertising media is affected by their price
competitiveness and general economic trends.
The availability of newsprint has been good and price developments in recent
years have been moderate. Pricing pressures may increase in the future, since
the paper industry’s capacity cuts were intended to safeguard future
profitability. I-print Oy has prepared for both availability and price risks by
spreading purchases among suppliers and through joint procurement with other
actors within the industry.
Newspaper distribution has been outsourced to Posti and HSS Media. The
short-term risks in delivery operations mainly concern price and service level
developments. These risks depend on the diminishing volumes, pay development of
deliverers, competition between delivery companies and the reform of the Postal
Services Act. In the longer term, the availability of distribution services as
well as the related price risks will increase.
Financial risks
The Group is exposed to an interest-rate risk and a risk associated with share
prices. The Group’s interest-rate risk consists of changes in market interest
rates applied in the loan portfolio. The company follows an interest-rate
management policy confirmed by the Board of Directors. With respect to
interest-rate risk management, the goal is to reduce the volatility of interest
expenses in order to keep interest expenses, and the associated risk that they
will grow, at an acceptable level. Interest-rate risk is managed by selecting
both fixed and floating interest rates in loans, and using interest-rate fixing
periods. If necessary, in order to hedge against interest-rate risk, the
company can rely on interest rate swaps. The Group’s loan arrangements and
hedging against interest-rate risk have been described in further detail above,
under ‘Consolidated balance sheet and financing’. The company’s loan
arrangements involve ordinary collaterals and no special covenants.
In order to ensure the availability and flexibility of financing, the Group has
available credit limits. On 31 December 2015, unused credit limits totalled EUR
13 million (On 31 December 2014, EUR 13 million). In its operations, the Group
is also exposed to price risks arising from the volatility of market prices of
quoted shares.
THE BOARD’S PROPOSAL ON PROFIT SHARING
The Board of Directors proposes to the Annual General Meeting of 20 April 2016
that a per-share dividend of EUR 0.10 be paid for the financial year 2015,
representing a total dividend payment of EUR 2,566,520.80. Dividends will be
distributed to those who are listed on the record day, 22 April 2016, as
shareholders in the Ilkka-Yhtymä Oyj's list of shareholders, maintained at
Euroclear Finland Oy. Dividend payments are issued on 29 April 2016. On 31
December 2015, the parent company's distributable funds amounted to EUR
55,343,303.48.
No substantial changes have taken place in the company’s financial position
since the end of the financial year. In the view of the Board of Directors, the
proposed dividends do not jeopardise the company’s liquidity.
Ilkka-Yhtymä Oyj practises an active dividend policy and aims to distribute at
least half of its consolidated annual income as dividend payments. However,
dividend distribution is affected not only by the earnings trend, but also by
the Group's financial standing, the financing required for profitable growth
and the company's future outlook and development needs.
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
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 10-12/ 10-12/ Change 1-12/ 1-12/ Change
2015 2014 % 2015 2014 %
NET SALES 10 711 10 963 -2 % 41 172 41 802 -2 %
Change in inventories of -2 -5 63 % 1 -3 141 %
finished and unfinished
products
Other operating income 41 154 -73 % 1 763 454 288 %
Materials and services -3 391 -3 384 0 % -13 418 -13 379 0 %
Employee benefits -4 146 -4 060 2 % -16 548 -16 782 -1 %
Depreciation -411 -426 -4 % -1 653 -1 856 -11 %
Other operating costs -1 447 -1 473 -2 % -5 331 -5 302 1 %
Share of associated -56 1 145 -105 % 3 012 4 318 -30 %
companies’ profit
OPERATING PROFIT/ LOSS 1 299 2 913 -55 % 8 998 9 251 -3 %
Financial income and expenses -3 743 -336 -1013 % -4 519 883 -612 %
*)
PROFIT/ LOSS BEFORE TAX -2 444 2 577 -195 % 4 479 10 133 -56 %
Income tax -225 -297 -24 % -872 -1 063 -18 %
PROFIT/ LOSS FOR THE PERIOD -2 669 2 280 -217 % 3 607 9 070 -60 %
UNDER REVIEW
Earnings per share, undiluted -0.10 0.09 -217 % 0.14 0.35 -60 %
(EUR)**)
The undiluted share average 25 665 25 665 25 665 25 665
(to the nearest 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) 10-12/ 10-12/ Change 1-12/ 1-12/ Change
2015 2014 % 2015 2014 %
PROFIT/ LOSS FOR THE PERIOD UNDER -2 669 2 280 -217 % 3 607 9 070 -60 %
REVIEW
OTHER COMPREHENSIVE INCOME:
Items that may be reclassified
subsequently to profit or loss:
Available-for-sale assets
Measured at fair value 1 2 -50 % 4 -24 116 %
Transferred to the income -8 126 -107 %
statement
Share of associated companies' 355 -43 928 % 517 -173 399 %
other comprehensive income
Income tax related to components 3 -20 115 %
of other comprehensive income
Other comprehensive income, net of 356 -42 955 % 516 -91 666 %
tax
TOTAL COMPREHENSIVE INCOME FOR THE -2 313 2 239 -203 % 4 123 8 979 -54 %
PERIOD
SEGMENT INFORMATION
NET SALES BY SEGMENT
(EUR 1,000) 10-12/ 10-12/ Change % 1-12/ 1-12/ Change %
2015 2014 2015 2014
Publishing
External 9 031 9 481 -5 % 35 123 36 330 -3 %
Inter-segments 23 20 13 % 95 83 14 %
Publishing total 9 054 9 501 -5 % 35 218 36 413 -3 %
Printing
External 1 680 1 482 13 % 6 048 5 472 11 %
Inter-segments 1 586 1 797 -12 % 6 273 6 861 -9 %
Printing total 3 266 3 279 0 % 12 321 12 333 0 %
Non-allocated
Inter-segments 554 550 1 % 2 199 2 231 -1 %
Non-allocated total 554 550 1 % 2 200 2 231 -1 %
Elimination -2 163 -2 368 -9 % -8 567 -9 175 -7 %
Group net sales total 10 711 10 963 -2 % 41 172 41 802 -2 %
OPERATING PROFIT/ LOSS BY SEGMENT
(EUR 1,000) 10-12/ 10-12/ Change % 1-12/ 1-12/ Change %
2015 2014 2015 2014
Publishing 960 1 231 -22 % 3 238 3 481 -7 %
Printing 469 556 -16 % 1 543 1 749 -12 %
Associated companies -56 1 145 -105 % 3 012 4 318 -30 %
Non-allocated -73 -20 -271 % 1 205 -297 505 %
Group operating profit/ loss 1 299 2 913 -55 % 8 998 9 251 -3 %
total
ASSETS BY SEGMENT
(EUR 1,000) 12/2015 12/2014 Change %
Publishing 9 882 8 826 12 %
Printing 9 257 8 674 7 %
Non-allocated 108 042 113 036 -4 %
Group assets total 127 181 130 536 -3 %
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 12/2015 12/2014 Change %
ASSETS
NON-CURRENT ASSETS
Intangible rights 674 629 7 %
Goodwill 314 314 0 %
Investment properties 63 147 -57 %
Property, plant and equipment 8 825 10 230 -14 %
Shares in associated companies 102 608 105 310 -3 %
Available-for-sale assets 2 922 2 953 -1 %
Non-current trade and other receivables 567 567 0 %
Other tangible assets 214 214 0 %
TOTAL NON-CURRENT ASSETS 116 188 120 364 -3 %
Current assets
Inventories 614 523 17 %
Trade and other receivables 2 787 2 876 -3 %
Income tax assets 36 150 -76 %
Financial assets at fair value 1 057 1 089 -3 %
through profit or loss
Cash and cash equivalents 6 500 5 534 17 %
TOTAL Current assets 10 993 10 172 8 %
Total assets 127 181 130 536 -3 %
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDER’S EQUITY
Share capital 6 416 6 416 0 %
Invested unrestricted equity fund and other reserves 48 691 48 716 0 %
Retained earnings 10 928 9 371 17 %
SHAREHOLDER’S EQUITY 66 035 64 503 2 %
NON-CURRENT LIABILITIES
Deferred tax liability 194 178 9 %
Non-current interest-bearing liabilities 31 943 54 549 -41 %
Non-current interest-free liabilities 61 75 -18 %
NON-CURRENT LIABILITIES 32 199 54 801 -41 %
CURRENT LIABILITIES
Current interest-bearing liabilities 20 286 2 387 750 %
Accounts payable and other payables 8 309 8 340 0 %
Income tax liability 352 504 -30 %
CURRENT LIABILITIES 28 947 11 232 158 %
SHAREHOLDERS’ EQUITY AND LIABILITIES TOTAL 127 181 130 536 -3 %
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-12/ 1-12/
2015 2014
CASH FLOW FROM OPERATIONS
Profit/ loss for the period under review 3 607 9 070
Adjustments 2 592 -2 334
Change in working capital 62 -486
CASH FLOW FROM OPERATIONS 6 262 6 250
BEFORE FINANCE AND TAXES
Interest paid -1 255 -1 649
Interest received 50 31
Dividends received 66 55
Other financial items -33 -45
Direct taxes paid -889 -932
CASH FLOW FROM OPERATIONS 4 201 3 710
CASH FLOW FROM INVESTMENTS
Investments in tangible and -590 -352
intangible assets, net
Disposal of subsidiaries 1 748
Capital repayment received 2 699 2 249
Other investments -29
Proceeds from sale of other investments 68 10 056
Granted loans -567
Dividends received from investments 95 484
CASH FLOW FROM INVESTMENTS 4 019 11 841
CASH FLOW BEFORE FINANCING ITEMS 8 220 15 551
CASH FLOW FROM FINANCING
Change in current loans -2 353 -3 561
Change in non-current loans -2 353 -5 889
Dividends paid and other profit distribution -2 547 -2 548
CASH FLOW FROM FINANCING -7 253 -11 998
INCREASE (+) OR DECREASE (-)IN FINANCIAL ASSETS 967 3 553
Liquid assets at the beginning of the financial period 5 534 1 980
Liquid assets at the end of the financial period 6 500 5 534
KEY FIGURES
2015 2014
Net sales, Meur 41.2 41.8
change % -1.5 -6.9
Operating profit/ loss, Meur 9.0 9.3
% of net sales 21.9 22.1
Profit/ loss before tax, Meur 4.5 10.1
% of net sales 10.9 24.2
Profit/ loss for the financial period, Meur 3.6 9.1
% of net sales 8.8 21.7
Return on equity (ROE), % 5.5 14.8
Return on investment (ROI), % 4.8 9.7
Equity ratio, % 52.9 50.2
Net gearing, % 67.6 78.0
Gross capital expenditure, Meur *) 0.6 0.5
% of net sales 1.4 1.1
Balance sheet total, Meur 127.2 130.5
Current ratio 0.38 0.91
Average no. of employees 299 311
Earnings per share (EPS), eur 0.14 0.35
Cash flow from operations per share, eur 0.16 0.14
Shareholders’ equity per share, eur 2.57 2.51
Dividend per share (Series I), eur **) 0.10 0.10
Dividend per share (Series II), eur **) 0.10 0.10
Dividend per earnings (Series I), % 71.2 28.3
Dividend per earnings (Series II), % 71.2 28.3
Effective dividend yield (Series I), % 4.0 3.3
Effective dividend yield (Series II), % 4.9 5.2
Price per earnings (P/E) (Series I) 17.6 8.5
Price per earnings (P/E) (Series II) 14.4 5.4
Market capitalisation, Meur 54.0 53.7
Average number of shares during the financial period 25 665 208 25 665 208
Number of shares at the end on the financial period 25 665 208 25 665 208
*) Includes investments in tangible and intangible assets and shares in
associated companies and in available-for-sale financial assets (shares).
**) 2015: Proposal of the Board of Directors
CONSOLIDATED NET SALES AND PROFIT BY QUARTER
(EUR 1,000) Q1/ 2015 Q2/ 2015 Q3/ 2015 Q4/ 2015
NET SALES 10 078 10 634 9 748 10 711
OPERATING PROFIT/ LOSS 1 071 2 969 3 658 1 299
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW 784 2 982 2 510 -2 669
(EUR 1,000) Q1/ 2014 Q2/ 2014 Q3/ 2014 Q4/ 2014
NET SALES 10 143 10 777 9 918 10 963
OPERATING PROFIT/ LOSS 1 193 2 523 2 622 2 913
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW 675 2 603 3 512 2 280
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
1-12/ 2014 l reserv equity fund es earnin
e gs
SHAREHOLDERS’ EQUITY 6 416 113 48 498 24 3 040 58 091
1.1.
Comprehensive income 82 8 897 8 979
for the period
Dividend distribution -2 567 -2 567
SHAREHOLDERS’ EQUITY 6 416 194 48 498 24 9 371 64 503
12/ 2014
Change in Share Fair Invested Other Retain Total
shareholders’ equity capita value unrestricted reserv ed
1-12/ 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 -1 4 124 4 123
for the period
Dividend distribution -2 567 -2 567
Changes in ownership -24 -24
interests in
subsidiaries
SHAREHOLDERS’ EQUITY 6 416 193 48 498 10 928 66 035
12/ 2015
GROUP CONTINGENT LIABILITIES
(EUR 1,000) 12/2015 12/2014
Collateral pledged for own commitments
Mortgages on company assets 1 245 1 245
Mortgages on real estate 8 801 8 801
Pledged shares 55 081 50 491
Contingent liabilities on behalf of associated company
Guarantees 3 961 3 961
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
(EUR 1,000) 1-12/ 1-12/ Change %
2015 2014
Carrying amount at the beginning of the financial 10 230 11 459 -11 %
period
Increase 410 294 39 %
Decrease -261 -4 -6368 %
Depreciation for the financial period -1 408 -1 519 7 %
Transfers between items -147
Carrying amount at the end of the financial period 8 825 10 230 -14 %
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) 12/2015 12/2014
Sales of goods and services
To associated companies 258 256
To other related parties 921 837
Purchases of goods and services
From associated companies 256 335
From other related parties 37 4
Non-current loan receivables from associated companies 567 567
Trade and other receivables
From associated companies 68 53
From other related parties 75 16
Accounts payable
To associated companies 24 8
Transactions with related parties are conducted at fair market prices.
EMPLOYEE BENEFITS TO MANAGEMENT
(EUR 1,000) 12/2015 12/2014
Salaries and other short-term employee benefits 1 026 1 005
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) 12/2015 Level 1 Level 2 Level 3
ASSETS MEASURED AT FAIR VALUE
Financial assets at fair value through 1 057 1 057
profit or loss
Available-for-sale financial assets 1 502 1 502
TOTAL 2 559 1 057 1 502
LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps 1 806 1 806
TOTAL 1 806 1 806
Fair value at end of period
(EUR 1,000) 12/2014 Level 1 Level 2 Level 3
ASSETS MEASURED AT FAIR VALUE
Financial assets at fair value through 1 089 1 089
profit or loss
Available-for-sale financial assets 1 533 1 533
TOTAL 2 623 1 089 1 533
LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps 1 803 1 803
TOTAL 1 803 1 803
Available-for-sale assets also include EUR 1,420 thousand for unlisted shares
(EUR 1,420 in 2014), 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.
AUDITED TOTAL CIRCULATION OF NEWSPAPERS IN 2015
Ilkka 45 046
Pohjalainen 20 076
Komiat 5 905
Viiskunta 5 165
Järviseutu 4 787
Suupohjan Sanomat 3 646
Jurvan Sanomat 1 935
Vaasan Ikkuna (delivery) 55 600
Etelä-Pohjanmaa (delivery) 52 000
Drafting principles
This financial statements bulletin, issued by Ilkka-Yhtymä Group, was prepared
in accordance with the requirements of the IAS 34 Interim Financial Reporting
standard.
The same drafting principles have been applied to the financial statements
bulletin as used in the previous financial statements on 31 December 2014.
Moreover, the calculation formulas and principles for indicators also 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 financial statements bulletin are unaudited.
PROPOSALS TO THE ANNUAL GENERAL MEETING
The Board of Directors proposes to the Annual General Meeting of 20 April 2016
that a per-share dividend of EUR 0.10 be paid for the financial year 2015,
representing a total dividend payment of EUR 2,566,520.80. Dividends will be
distributed to those who are listed on the record day, 22 April 2016, as
shareholders in the Ilkka-Yhtymä Oyj's list of shareholders, maintained at
Euroclear Finland Oy. Dividend payments are issued on 29 April 2016. On 31
December 2015, the parent company's distributable funds amounted to EUR
55,343,303.48.
AUTHORISATION TO DONATE
The Board of Directors proposes to the AGM that the Board of Directors be
authorised to decide upon a donation, totalling a maximum of EUR 50,000, to be
made towards charitable causes or similar, and that the Board of Directors be
authorised to decide upon the recipients, purposes of use, schedules and other
terms of these donations.
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
DISTRIBUTION
Nasdaq Helsinki
The main media
www.ilkka-yhtyma.fi
© 2024 Nasdaq, Inc. All Rights Reserved |