2014-05-05 13:00:00 CEST
2014-05-05 13:00:03 CEST
REGULATED INFORMATION
Ilkka-Yhtymä Oyj - Interim report (Q1 and Q3)
Ilkka-Yhtymä Oyj's Interim Report for Q1/2014
Ilkka-Yhtymä Oyj Interim Report 5 May 2014, at 2:00pm
ILKKA-YHTYMÄ OYJ'S INTERIM REPORT FOR Q1/2014
- Net sales: EUR 10.1 million (EUR 11.0 million)
- Circulation revenues increased slightly and total expenses decreased
- Operating profit: EUR 1.2 million (EUR 2.3 million)
- Operating profit excluding Alma Media Corporation and the other associated
companies amounted to EUR 0.7 million (EUR 0.9 million)
- Operating profit totalled 11.8% of net sales, or 6.6% excluding Alma Media
and other associated companies (7.8%)
- Pre-tax profits: EUR 0.7 million (EUR 2.1 million)
- Earnings per share: EUR 0.03 (EUR 0.08)
- Eguity ratio 44.1% remained at a good level
NET SALES AND PROFIT PERFORMANCE
The Group's consolidated net sales for January-March showed a 7.7% decline. Net
sales came to EUR 10.1 million (EUR 11.0 million in the corresponding period of
the previous year). External net sales from the publishing business fell by
5.5%. Advertising revenues fell by 11.8% and circulation revenues grew by 0.7%.
The decrease in net sales from the publishing business was caused by a weaker
advertising market. External net sales from the printing business decreased by
20.7%. Circulation income accounted for 47% of consolidated net sales, while
advertising income and printing income represented 40% and 13%, respectively.
Other operating income in January-March totalled EUR 0.1 million (EUR 0.1
million).
Operating expenses for January-March amounted to EUR 9.6 million (EUR 10.2
million), down by 6.2% year on year. Expenses arising from materials and
services decreased by 10.9%. Personnel expenses decreased by 1.1% and other
operating costs by 10.1%. Depreciation contracted by 6.7%.
The share of the associated companies' result was EUR 0.5 million (EUR 1.4
million). Consolidated operating profit amounted to EUR 1.2 million (EUR 2.3
million), down by 47.2 per cent year-on-year. The Group's operating margin was
11.8 per cent (20.6%). Operating profit excluding Alma Media Corporation and
the other associated companies amounted to EUR 0.7 million (EUR 0.9 million),
representing 6.6% (7.8%) of net sales. Operating profit from publishing fell by
EUR 0.3 million, while operating profit from printing remained at the previous
year's level.
Net financial expenses for January-March amounted to EUR 0.5 million (EUR 0.2
million). Net gain/loss on shares held for trading was EUR -0.1 million (EUR
-0.01 million). Interest expenses excluding the fair value change in
derivatives hedging them totalled EUR 0.4 million (EUR 0.4 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 2014, the market value of these interest rate
swaps grew by EUR 0.01 million (in January-March 2013, the market value grew by
EUR 0.2 million).
Pre-tax profits totalled EUR 0.7 million (EUR 2.1 million). Direct taxes
amounted to EUR 0.04 million (EUR 0.2 million), and the Group's net profit for
the period totalled EUR 0.7 million (EUR 1.9 million).
BALANCE SHEET AND FINANCING
The consolidated balance sheet total came to EUR 140.0 million (EUR 169.6
million), with EUR 58.8 million (EUR 82.6 million) of equity. On the reporting
date of 31 March 2014, the balance sheet value of the holding in the associated
company Alma Media Corporation was EUR 100.9 million and the market value of
the shares was EUR 62.5 million. According to the management's estimate,
write-down in this holding is unnecessary.
Interest-bearing liabilities totalled EUR 66.4 million (EUR 70.6 million). The
equity ratio was 44.1 per cent (50.7%), and shareholders' equity per share was
EUR 2.29 (EUR 3.22). The increase in financial assets for the period totalled
EUR 2.2 million (EUR 5.8 million), with liquid assets at the end of the period
totalling EUR 4.1 million (EUR 8.1 million).
Cash flow from operations for the period came to EUR 2.7 million (EUR 5.9
million). Cash flow from operations for the comparison period includes EUR 3.6
million from the Group's own operations as well as EUR 2.2 million of dividend
income from Alma Media Corporation. Cash flow from investments totalled EUR
-0.6 million (EUR -0.1 million).
NEWSPAPERS TO COLLABORATE MORE CLOSELY THROUGH LÄNNEN MEDIA
Six Finnish newspaper publishers (I-Mediat Oy, Keski-Pohjanmaan Kirjapaino Oyj,
Alma Media Kustannus Oy, Kaleva Oy, Hämeen Sanomat Oy and Turun Sanomat Oy)
have signed a letter of intent, which will act as the basis for plans to
significantly strengthen and expand their current journalistic collaboration.
The newspapers Ilkka, Pohjalainen, Keskipohjanmaa, Aamulehti, Satakunnan Kansa,
Lapin Kansa, Kainuun Sanomat, Pohjolan Sanomat, Kaleva, Hämeen Sanomat, Forssan
Lehti and Turun Sanomat are planning to establish during 2014 an editorial
undertaking called Lännen Media. The new company would produce shared content
for all the newspapers.
In the event of the collaboration becoming reality, Lännen Media Oy would
provide its 12 stakeholder newspapers with news items on national politics and
the economy as well as social issues. Furthermore, Lännen Media would produce
international news, weekend supplement material, themed content and national
online news items for the use of its stakeholder newspapers. Lännen Media's
principal goal is to accelerate product development in the field of digital
content. Lännen Media would act as a joint editorial house, with around 40
journalists located around Finland.
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 Small Cap. The Series I shares are listed on the Pre List.
In January-March, 15,247 series-I shares of Ilkka-Yhtymä Oyj were traded,
accounting for 0.4 per cent of the total number of series-I shares. The total
value of the shares exchanged was EUR 0.1 million. In total, 458,994 series-II
shares were traded, corresponding to 2.1 per cent of the total number of series
II shares. The total value of the shares traded was EUR 1.3 million. The lowest
price at which series-I shares of Ilkka-Yhtymä Oyj were traded during the
period under review was EUR 3.72, and the highest per-share price was EUR 4.98.
The lowest price at which series-II shares were traded was EUR 2.65 and the
highest EUR 3.05. The market value of the share capital at the closing rate for
the reporting period was EUR 74.0 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 2013.
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 2013 Annual Report.
EVENTS AFTER THE REPORT PERIOD
ANNUAL GENERAL MEETING DECISIONS
On 24 April 2014, 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 2013.
The number of members on the Supervisory Board for 2014 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 2018: Kari Aukia, Sami Eerola, Jari
Eklund, Johanna Kankaanpää, Yrjö Kopra, Juha Mikkilä and Sami Talso.
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 2014
In the current economic climate, forecasting net sales in the media sector and,
in particular, media advertising spending involves major uncertainties. Media
advertising in Finland is expected to remain roughly at the previous year's
level and, due to caution among consumers as well as competition in the media
market, newspaper circulation income is forecast to shrink. Printing business
volumes have shrunk in Finland and the trend is expected to continue in 2014.
The net sales of Ilkka-Yhtymä Group are estimated to decline from the 2013
level.
Group operating profit from Ilkka-Yhtymä's own operations, excluding the share
of Alma Media's and other associated companies' results, are expected to
decline from the 2013 level.
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 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
2013 financial statements. New or revised IFRS standards and IFRIC
interpretations that become effective in 2014 have also been complied with, as
specified in the 2013 financial statements. These changes have not affected the
reported figures. The principles and formulae for the calculation of the
indicators, presented on page 63 of the 2013 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/
2014 2013 2013
NET SALES 10 143 10 987 -8 % 44 893
Change in inventories of finished and -2 5 -141 % 6
unfinished products
Other operating income 115 93 24 % 392
Materials and services -3 215 -3 608 -11 % -14 484
Employee benefits -4 510 -4 560 -1 % -17 020
Depreciation -489 -524 -7 % -2 078
Other operating costs -1 377 -1 532 -10 % -5 711
Share of associated companies' profit *) 527 1 397 -62 % -22 630
OPERATING PROFIT/ LOSS 1 193 2 258 -47 % -16 631
Financial income and expenses -482 -162 -198 % -347
PROFIT/ LOSS BEFORE TAX 711 2 097 -66 % -16 978
Income tax -36 -170 -79 % -1 199
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW 675 1 927 -65 % -18 178
Earnings per share, undiluted (EUR)**) 0.03 0.08 -65 % -0.71
The undiluted share average (to the nearest 25 665 25 665 25 665
thousand)**)
*) 1-12/2013: Includes the EUR 27 million non-recurring write-down on the
holding in the associated company Alma Media Corporation (Q3/2013).
**) There are no factor diluting the figure.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2014 2013 2013
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW 675 1 927 -65 % -18 178
OTHER COMPREHENSIVE INCOME:
Items that may be reclassified subsequently to
profit or loss:
Available-for-sale assets
Measured at fair value 1 2 -70 % 2
Transferred to the income statement 2
Share of associated companies' other comprehensive -12 85 -114 % -342
income
Income tax related to components of other -1 11
comprehensive income
Other comprehensive income, net of tax -10 86 -111 % -328
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 665 2 013 -67 % -18 506
SEGMENT INFORMATION
NET SALES BY SEGMENT
(EUR 1,000) 1-3/2014 1-3/2013 Change 1-12/2013
Publishing
External 8 875 9 388 -5 % 38 098
Inter-segments 25 37 -33 % 159
Publishing total 8 900 9 425 -6 % 38 257
Printing
External 1 268 1 599 -21 % 6 795
Inter-segments 1 686 1 774 -5 % 6 968
Printing total 2 954 3 372 -12 % 13 763
Non-allocated
Inter-segments 560 567 -1 % 2 269
Non-allocated total 560 567 -1 % 2 269
Elimination -2 271 -2 377 -4 % -9 395
Group net sales total 10 143 10 987 -8 % 44 893
OPERATING PROFIT/ LOSS BY SEGMENT
(EUR 1,000) 1-3/2014 1-3/2013 Change 1-12/2013
Publishing 499 778 -36 % 4 594
Printing 330 317 4 % 1 827
Associated companies 527 1 397 -62 % -22 630
Non-allocated -163 -234 30 % -422
Group operating profit/ loss total 1 193 2 258 -47 % -16 631
ASSETS BY SEGMENT
(EUR 1,000) 1-3/2014 1-3/2013 Change 1-12/2013
Publishing 14 304 15 364 -7 % 9 252
Printing 9 999 10 184 -2 % 8 788
Non-allocated 115 700 144 060 -20 % 115 762
Group assets total 140 003 169 609 -17 % 133 802
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 3/2014 3/2013 Change 12/2013
ASSETS
NON-CURRENT ASSETS
Intangible rights 708 981 -28 % 789
Goodwill 314 314 314
Investment properties 173 220 -21 % 182
Property, plant and equipment 11 210 11 926 -6 % 11 459
Shares in associated companies 101 758 128 029 -21 % 103 492
Available-for-sale assets 10 541 10 682 -1 % 10 668
Non-current trade and other receivables 567
Other tangible assets 214 214 214
TOTAL NON-CURRENT ASSETS 125 486 152 367 -18 % 127 118
Current assets
Inventories 584 577 1 % 483
Trade and other receivables 8 201 6 422 28 % 2 866
Income tax assets 396 510 -22 % 96
Financial assets at fair value 1 192 1 672 -29 % 1 259
through profit or loss
Cash and cash equivalents 4 144 8 060 -49 % 1 980
TOTAL Current assets 14 517 17 241 -16 % 6 684
Total assets 140 003 169 609 -17 % 133 802
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDER'S EQUITY
Share capital 6 416 6 416 6 416
Invested unrestricted equity fund and other 48 637 48 622 0 % 48 635
reserves
Retained earnings 3 703 27 541 -87 % 3 040
SHAREHOLDER'S EQUITY 58 756 82 579 -29 % 58 091
NON-CURRENT LIABILITIES
Deferred tax liability 197 54 266 % 216
Non-current interest-bearing liabilities 61 634 66 349 -7 % 60 432
Non-current interest-free liabilities 88 102 -13 % 88
NON-CURRENT LIABILITIES 61 919 66 504 -7 % 60 736
CURRENT LIABILITIES
Current interest-bearing liabilities 4 747 4 241 12 % 5 947
Accounts payable and other payables 14 222 15 929 -11 % 8 768
Income tax liability 359 355 1 % 260
CURRENT LIABILITIES 19 328 20 525 -6 % 14 975
SHAREHOLDERS' EQUITY AND LIABILITIES TOTAL 140 003 169 609 -17 % 133 802
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-3/ 1-3/ 1-12/
2014 2013 2013
CASH FLOW FROM OPERATIONS
Profit/ loss for the period under review 675 1 927 -18 178
Adjustments 454 -546 26 229
Change in working capital 2 052 2 813 408
CASH FLOW FROM OPERATIONS 3 180 4 194 8 459
BEFORE FINANCE AND TAXES
Interest paid -208 -224 -1 749
Interest received 6 7 35
Dividends received 8 2 257 2 344
Other financial items -11 -12 333
Direct taxes paid -257 -331 -920
CASH FLOW FROM OPERATIONS 2 718 5 890 8 502
CASH FLOW FROM INVESTMENTS
Investments in tangible and -111 -204 -1 398
intangible assets, net
Other investments, net 126 97 121
Granted loans -567
Dividends received from investments 15 528
CASH FLOW FROM INVESTMENTS -552 -92 -750
CASH FLOW BEFORE FINANCING ITEMS 2 166 5 798 7 753
CASH FLOW FROM FINANCING
Change in current loans -4 217
Dividends paid and other profit distribution -3 -3 818
CASH FLOW FROM FINANCING -3 -8 035
INCREASE (+) OR DECREASE (-)IN FINANCIAL ASSETS 2 163 5 797 -282
Liquid assets at the beginning of the financial period 1 980 2 263 2 263
Liquid assets at the end of the financial period 4 144 8 060 1 980
KEY FIGURES
3/2014 3/2013 12/2013
Earnings/share (EUR) 0.03 0.08 -0.71
Shareholders' equity/share (EUR) 2.29 3.22 2.26
Average number of personnel 304 320 321
Investments (EUR 1,000) *) 150 561 1 423
Interest-bearing debt (EUR 1,000) 66 381 70 590 66 379
Equity ratio, % 44.1 50.7 44.2
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/ 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
Change in Share Fair Invested Other Retain Total
shareholders' capita value unrestricted reserv ed
equity 1-3/ 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 2 663 665
for the period
TOTAL SHAREHOLDERS' 6 416 115 48 498 24 3 703 58 756
EQUITY 3/ 2014
GROUP CONTINGENT LIABILITIES
(EUR 1,000) 3/2014 3/2013 12/2013
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 51 042 53 451 49 680
Contingent liabilities on behalf of associated company
Guarantees 4 059 4 096 4 059
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2014 2013 2013
Carrying amount at the beginning of the 11 459 11 862 -3 % 11 862
financial period
Increase 147 484 -70 % 1 266
Depreciation for the financial period -396 -420 -6 % -1 670
Carrying amount at the end of the financial 11 210 11 926 -6 % 11 459
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) 3/2014 3/2013 12/2013
Sales of goods and services
To associated companies 56 55 261
To other related parties 173 213 860
Purchases of goods and services
From associated companies 125 136 464
From other related parties 2 29
Non-current trade and other receivables
Loan receivables from associated companies 567
Trade receivables
From associated companies 10 14 48
From other related parties 42 77 61
Accounts payable
To associated companies 61 15 16
Transactions with related parties are conducted at fair market prices.
EMPLOYEE BENEFITS TO MANAGEMENT
(EUR 1,000) 3/2014 3/2013 12/2013
Salaries and other short-term employee benefits 293 247 989
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) 3/2014 Level 1 Level 2 Level 3
ASSETS MEASURED AT FAIR VALUE
Financial assets at fair value through profit 1 192 1 192
or loss
Available-for-sale financial assets 9 122 9 122
TOTAL 10 313 1 192 9 122
LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps 1 693 1 693
TOTAL 1 693 1 693
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 1,419 thousand for unlisted shares
(EUR 1,439 thousand in 3/2013), 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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