2012-05-07 13:00:00 CEST
2012-05-07 13:00:09 CEST
REGULATED INFORMATION
Ilkka-Yhtymä Oyj - Interim report (Q1 and Q3)
Ilkka-Yhtymä Oyj's Interim Report for Q1/ 2012
Ilkka-Yhtymä Oyj Interim Report 7 May 2012, at 2:00pm
ILKKA-YHTYMÄ OYJ'S INTERIM REPORT FOR Q1/2012
CIRCULATION REVENUES GREW
- Net sales: EUR 11.8 million (EUR 12.1 million), down 3.1%
- Circulation revenues grew by 1.8%, advertising revenues fell by 2.7%
- Operating profit: EUR 3.4 million (EUR 4.2 million), down 18.9%
- Operating profit excluding Alma Media Corporation and the other associated
companies amounted to EUR 1.6 million (EUR 2.1 million), down 26.5%
- Operating profit totalled 28.8% of net sales, or 13.4% excluding Alma Media
and other associated companies (17.6%)
- Pre-tax profits: EUR 2.7 million (EUR 4.2 million), down 37.4%
- Earnings per share: EUR 0.10 (EUR 0.14)
NET SALES AND PROFIT PERFORMANCE
The Group's consolidated net sales for January-March showed a 3.1% decline. Net
sales came to EUR 11.8 million (EUR 12.1 million in the corresponding period of
the previous year). External net sales from the publishing business fell by
0.9%. Advertising revenues fell by 2.7% and circulation revenues grew by 1.8%.
The decrease in net sales from the publishing business was caused by a weaker
advertising market and the income from parliamentary election advertisements
included in the comparative figure for 2011. External net sales from the
printing business fell by 15.9% due to the decline in volumes. Circulation
income accounted for 41% of consolidated net sales, while advertising income
and printing income represented 46% 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 10.3 million (EUR 10.1
million), up by 1.8% year on year. Expenses arising from materials and services
decreased by 2.7%. Personnel expenses increased by 5.7% and other operating
costs increased by 4.0%. Depreciation contracted by 1.8%.
The share of the associated companies' result was EUR 1.8 million (EUR 2.0
million). This share was affected by non-recurring expense items recorded in
Alma Media's results as well as changes in the fair value of a conditional
purchase price provision arising from the corporate restructuring of Arena
Partners Oy. Consolidated operating profit amounted to EUR 3.4 million (EUR 4.2
million), down by 18.9 per cent year-on-year. The Group's operating margin was
28.8 per cent (34.4%). Operating profit excluding Alma Media Corporation and
the other associated companies amounted to EUR 1.6 million (EUR 2.1 million),
representing 13.4% (17.6%) of net sales. Operating profit from publishing fell
by EUR 0.4 million, and operating profit from printing fell by EUR 0.2 million.
Net financial expenses for January-March amounted to EUR 0.7 million (net
financial income in the corresponding period of the previous year EUR 0.1
million). Net gain/loss on shares held for trading was EUR 0.2 million (EUR
-0.1 million). Interest expenses excluding the fair value change in derivatives
hedging them totalled EUR 0.6 million (EUR 0.6 million). In order to hedge
against interest rate risk, on 21 December 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 2012, the market value of these interest rate
swaps fell by EUR 0.3 million (in January-March 2011, the market value grew by
EUR 0.8 million).
Pre-tax profits totalled EUR 2.7 million (EUR 4.2 million). Direct taxes
amounted to EUR 0.2 million (EUR 0.6 million), and the Group's net profit for
the period totalled EUR 2.4 million (EUR 3.7 million).
BALANCE SHEET AND FINANCING
The consolidated balance sheet total came to EUR 199.5 million (EUR 206.7
million), with EUR 107.0 million (EUR 108.6 million) of equity. On the
reporting date of 31 March 2012, the balance sheet value of the holding in the
associated company Alma Media Corporation was EUR 145.6 million and the market
value of the shares was EUR 120.1 million. According to the management's
estimate, write-down in this holding is unnecessary.
Interest-bearing liabilities totalled EUR 76.5 million (EUR 83.0 million). The
equity ratio was 55.6 per cent (54.3%), and shareholders' equity per share
stood at EUR 4.17 (EUR 4.23). The increase in financial assets for the period
totalled EUR 6.0 million (EUR 17.1 million), with liquid assets at the end of
the period totalling EUR 16.9 million (EUR 20.1 million).
Cash flow from operations for the period came to EUR 6.1 million (EUR 20.3
million). This includes EUR -2.9 million (EUR 4.6 million) from the Group's own
operations as well as EUR 9.0 million (EUR 15.7 million) of dividend income
from Alma Media Corporation. Due to VAT changes, subscription fees for the
Group's regional newspapers for 2012 were exceptionally invoiced in December
2011. Consequently, cash flow from the Group's own operations fell in
January-March 2012 compared to the same period in 2011. Cash flow from
investments totalled EUR -0.1 million (EUR -3.2 million).
SHARE PERFORMANCE
The Series I shares of Ilkka-Yhtymä Oyj were listed on the Helsinki Stock
Exchange in 1981 and have remained listed ever since. The Series II shares have
been listed since their issue in 1988, and on 10 June 2002 they were
transferred from the I List of the Helsinki Stock Exchange to the Main List. At
present, the Series II shares of Ilkka-Yhtymä Oyj are listed on the NASDAQ OMX
Helsinki List, in the Consumer Services sector, the company's market value
being classified as Mid Cap. The Series I shares are listed on the Pre List.
In January-March, 5,814 series-I shares of Ilkka-Yhtymä Oyj were traded,
accounting for 0.1 per cent of the total number of series-I shares. The total
value of the shares exchanged was EUR 0.1 million. In total, 303,244 series-II
shares were traded, corresponding to 1.4 per cent of the total number of series
II shares. The total value of the shares traded was EUR 2.1 million. The lowest
price at which series-I shares of Ilkka-Yhtymä Oyj were traded during the
period under review was EUR 9.00, and the highest per-share price was EUR
11.29. The lowest price at which series-II shares were traded was EUR 6.43 and
the highest EUR 7.67. The market value of the share capital at the closing rate
for the reporting period was EUR 184.6 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 as well as circulation and printing volumes, which apply to the
entire sector. Other business risks are discussed in more detail in the 2011
Annual Report.
The Group's major financial risks include credit risk, 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 2011 Annual Report.
EVENTS AFTER THE REPORT PERIOD
ANNUAL GENERAL MEETING DECISIONS
On 19 April 2012, 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 0.40 be paid for the year 2011. The dividend
will be paid on 2 May 2012, and the record date of dividend payment is 24 April
2012.
The number of members on the Supervisory Board for 2012 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 2016: Vesa-Pekka Kangaskorpi
(Jyväskylä), Jarmo Rinta-Jouppi (Seinäjoki), Kimmo Simberg (Seinäjoki) and
Jyrki Viitala (Seinäjoki). Timo Mäkinen (Seinäjoki) was elected to the
Supervisory Board to replace an employee representative who resigned from her
position during the term of office. Mäkinen's term will end in 2013.
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 Tomi Englund 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 2012
In the current economic climate, major uncertainties are associated with the
predictability of both net sales and operating profit. Media advertising is
forecast to grow slightly in Finland. Due to consumer caution, VAT on
circulation revenues and media competition, newspapers' circulation revenues
are predicted to decrease. Printing business volumes have declined permanently
in Finland and the prospects for growth in the sector are weak.
The net sales of Ilkka-Yhtymä Group are estimated to remain almost at the 2011
level.
Group operating profit from Ilkka-Yhtymä's own operations, and operating profit
as a percentage of net sales, excluding the share of Alma Media's and other
associated companies' results, are expected to decrease from the 2011 level due
to cost developments. In addition, the year's results will depend on
interest-rate trends and the price performance of securities investments.
The associated company Alma Media Corporation (Group ownership 29.79%) will
have a significant impact on Group operating profit and profit.
SUMMARY OF FINANCIAL STATEMENTS AND NOTES
DRAFTING PRINCIPLES
Ilkka-Yhtymä Group's interim report has been prepared in compliance with the
recognition and measurement principles of IFRS, but not in compliance with all
IAS 34 requirements.
The interim report has been prepared according to the same principles as the
2011 financial statements. New or revised IFRS standards and IFRIC
interpretations that become effective in 2012 have also been complied with, as
specified in the 2011 financial statements. These changes have not affected the
reported figures. The principles and formulae for the calculation of the
indicators, presented on page 61 of the 2011 annual report, remain unchanged.
The figures in the interim report have been presented unaudited.
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 1-3/20 1-3/20 Change 1-12/20
12 11 11
NET SALES 11 763 12 143 -3 % 49 952
Change in inventories of finished and 11 7 43 % 12
unfinished products
Other operating income 109 113 -4 % 435
Materials and services -3 575 -3 676 -3 % -14 830
Employee benefits -4 570 -4 322 6 % -17 275
Depreciation -758 -772 -2 % -3 098
Other operating costs -1 407 -1 353 4 % -6 265
Share of associated companies' profit 1 813 2 035 -11 % 8 659
OPERATING PROFIT 3 385 4 174 -19 % 17 590
Financial income and expenses -730 66 -1206 % -3 817
PROFIT BEFORE TAXES 2 655 4 240 -37 % 13 773
Income tax -206 -567 -64 % -1 098
PROFIT FOR THE PERIOD UNDER REVIEW 2 449 3 673 -33 % 12 675
Earnings per share, undiluted (EUR)*) 0.10 0.14 -33 % 0.49
The undiluted share average, adjusted for the 25 665 25 665 25 665
share issue (to the nearest thousand)*)
*) There are no factor diluting the figure.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR 1,000) 1-3/201 1-3/201 Change 1-12/20
2 1 11
PROFIT FOR THE PERIOD UNDER REVIEW 2 449 3 673 -33 % 12 675
OTHER COMPREHENSIVE INCOME:
Available-for-sale assets -47 99 % -517
Share of associated companies' other 158 -22 824 % -53
comprehensive income
Income tax related to components of other 12 -99 % 138
comprehensive income
Other comprehensive income, net of tax 158 -57 379 % -432
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 2 607 3 617 -28 % 12 243
SEGMENT INFORMATION
Group net sales (EUR 1,000) 1-3/2012 1-3/2011 Change 1-12/2011
Publishing 10 304 10 396 -1 % 43 318
Printing 3 524 3 852 -9 % 15 235
Non-allocated 534 502 6 % 2 002
Net sales between segments -2 599 -2 608 0 % -10 603
Group net sales total 11 763 12 143 -3 % 49 952
Group operating profit (EUR 1,000) 1-3/2012 1-3/2011 Change 1-12/2011
Publishing 1 356 1 708 -21 % 7 697
Printing 342 550 -38 % 1 953
Associated companies 1 813 2 035 -11 % 8 659
Non-allocated -126 -119 -6 % -719
Group operating profit total 3 385 4 174 -19 % 17 590
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 3/2012 3/2011 Change 12/2011
ASSETS
NON-CURRENT ASSETS
Intangible rights 1 052 1 292 -19 % 1 120
Goodwill 314 314 0 % 314
Investment properties 277 366 -25 % 295
Property, plant and equipment 12 918 14 734 -12 % 13 481
Shares in associated companies 147 072 147 519 0 % 154 097
Available-for-sale assets 10 747 10 502 2 % 10 714
Other tangible assets 214 214 214
TOTAL NON-CURRENT ASSETS 172 594 174 940 -1 % 180 236
Current assets
Inventories 614 565 9 % 602
Trade and other receivables 6 556 7 337 -11 % 3 079
Income tax assets 762 625 22 % 254
Financial assets at fair value 2 067 3 097 -33 % 1 902
through profit or loss
Cash and cash equivalents 16 898 20 111 -16 % 10 926
TOTAL Current assets 26 897 31 734 -15 % 16 762
Total assets 199 491 206 674 -3 % 196 998
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDER'S EQUITY
Share capital 6 416 6 416 0 % 6 416
Invested unrestricted equity fund and other 48 623 48 967 -1 % 48 623
reserves
Retained earnings 52 008 53 264 -2 % 49 401
SHAREHOLDER'S EQUITY 107 047 108 647 -1 % 104 440
NON-CURRENT LIABILITIES
Deferred tax liability 392 1 560 -75 % 532
Non-current interest-bearing liabilities 72 448 78 475 -8 % 72 438
Non-current interest-free liabilities 115 115
NON-CURRENT LIABILITIES 72 956 80 035 -9 % 73 085
CURRENT LIABILITIES
Current interest-bearing liabilities 4 022 4 545 -12 % 4 029
Accounts payable and other payables 15 041 12 714 18 % 15 383
Income tax liability 425 733 -42 % 61
CURRENT LIABILITIES 19 488 17 992 8 % 19 473
SHAREHOLDERS' EQUITY AND LIABILITIES TOTAL 199 491 206 674 -3 % 196 998
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-3/ 1-3/ 1-12/
2012 2011 2011
CASH FLOW FROM OPERATIONS
Profit for the period under review 2 449 3 673 12 675
Adjustments -131 -797 -683
Change in working capital -4 474 1 947 7 395
CASH FLOW FROM OPERATIONS -2 156 4 824 19 387
BEFORE FINANCE AND TAXES
Interest paid -244 -209 -2 491
Interest received 12 13 102
Dividends received 9 004 15 772 15 955
Other financial items -14 283 322
Direct taxes paid -489 -369 -2 104
CASH FLOW FROM OPERATIONS 6 111 20 314 31 171
CASH FLOW FROM INVESTMENTS
Investments in tangible and -106 -484 -785
intangible assets, net
Other investments, net -33 -2 795 -3 477
Dividends received from investments 30 628
CASH FLOW FROM INVESTMENTS -139 -3 249 -3 633
CASH FLOW BEFORE FINANCING ITEMS 5 972 17 065 27 538
CASH FLOW FROM FINANCING
Change in current loans -6 930
Dividends paid and other profit distribution -1 -1 -12 728
CASH FLOW FROM FINANCING -1 -1 -19 658
INCREASE (+) OR DECREASE (-)IN FINANCIAL ASSETS 5 972 17 064 7 879
Liquid assets at the beginning of the financial period 10 926 3 047 3 047
Liquid assets at the end of the financial period 16 898 20 111 10 926
GROUP KEY FIGURES
3/2012 3/2011 12/2011
Earnings/share (EUR) 0.10 0.14 0.49
Shareholders' equity/share (EUR) 4.17 4.23 4.07
Average number of personnel 325 326 341
Investments (EUR 1,000) *) 141 3 135 4 414
Interest-bearing debt (EUR 1,000) 76 470 83 021 76 467
Equity ratio, % 55.6 54.3 55.5
Adjusted average number of shares during the 25 665 208 25 665 208 25 665 208
period
Adjusted number of shares on the balance 25 665 208 25 665 208 25 665 208
sheet date
*) 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/ 2011 l reserv equity fund es earnin
e gs
SHAREHOLDERS' EQUITY 6 416 480 48 498 24 49 612 105 030
1.1.
Comprehensive income -35 3 652 3 617
for the period
TOTAL SHAREHOLDERS' 6 416 445 48 498 24 53 264 108 647
EQUITY 3/ 2011
Change in Share Fair Invested Other Retain Total
shareholders' capita value unrestricted reserv ed
equity 1-3/ 2012 l reserv equity fund es earnin
e gs
SHAREHOLDERS' EQUITY 6 416 101 48 498 24 49 401 104 440
1.1.
Comprehensive income 2 607 2 607
for the period
TOTAL SHAREHOLDERS' 6 416 101 48 498 24 52 008 107 047
EQUITY 3/ 2012
GROUP CONTINGENT LIABILITIES
(EUR 1,000) 3/2012 3/2011 12/2011
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 70 735 107 824 81 332
Contingent liabilities on behalf of associated company
Guarantees 4 182 2 458 2 767
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.
Seinäjoki, 7 May 2012
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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