2010-02-11 08:00:00 CET
2010-02-11 08:00:08 CET
SÄÄNNELTY TIETO
Talentum Oyj - Financial Statement Release
TALENTUM 2009 YEAR-END STATEMENT RELEASE
TALENTUM OYJ YEAR-END STATEMENT RELEASE 11 Feb 2010, at 9.00 am TALENTUM 2009 YEAR-END STATEMENT RELEASE October-December 2009 (in brief) - Net sales EUR 19.9 million (EUR 25.2 million) - Operating income before non-recurring items EUR 1.6 million (EUR 3.9 million) - Operating income (EBIT) EUR -0.8 million (EUR 3.9 million) - Operating profit/loss percentage -4.2% (15.6 %) - Talentum acquired Sverige Bygger AB and Norge Bygges AS in December - Earnings per share EUR -0.02 (EUR 0.07) January-December 2009 (in brief) - Net sales EUR 66.8 million (EUR 93.4 million) - Operating income before non-recurring items EUR -0.9 million (EUR 11.5 million) - Operating income (EBIT) EUR -5.2 million (EUR 11.5 million) - Operating profit/loss percentage -7.8% (12.3%) - Earnings per share EUR -0.10 (EUR 0.19) - Net cash flow from operating activities EUR -5.8 million (EUR 10.5 million) - Net liabilities EUR 12.2 million (EUR -3.4 million) - The Board proposes that no dividend should be distributed for 2009 (in 2008, dividend EUR 0.04 per share and return of equity of EUR 0.06 per share) KEY FINANCIAL FIGURES -------------------------------------------------------------------------------- | Eur million | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change | | | 2009 | 2008 | % | 2009 | 2008 | % | -------------------------------------------------------------------------------- | Net sales | 19.9 | 25.2 | -20.9 | 66.8 | 93.4 | -28.4 | -------------------------------------------------------------------------------- | Operating income | 1.6 | 3.9 | -60.4 | -0.9 | 11.5 | -107.7 | | before | | | | | | | | non-recurring items | | | | | | | -------------------------------------------------------------------------------- | Operating income | -0.8 | 3.9 | -121.2 | -5.2 | 11.5 | -145.5 | -------------------------------------------------------------------------------- | as % of net sales | -4.2 | 15.6 | | -7.8 | 12.3 | | -------------------------------------------------------------------------------- | Total assets | | | | 58.8 | 49.7 | 18.4 | -------------------------------------------------------------------------------- | Investments | 7.9 | 0.5 | 1569.3 | 8.8 | 2.4 | 274.3 | -------------------------------------------------------------------------------- | as % of net sales | 39.8 | 1.9 | | 13.2 | 2.5 | | -------------------------------------------------------------------------------- | Return on | | | | -19.4 | 32.8 | | | investment % | | | | | | | -------------------------------------------------------------------------------- | Return on equity % | | | | -22.4 | 31.9 | | -------------------------------------------------------------------------------- | Equity ratio % * | | | | 31.4 | 54.8 | | -------------------------------------------------------------------------------- | Gearing ratio % | | | | 81.7 | -15.4 | | | (net debt to | | | | | | | | equity) | | | | | | | -------------------------------------------------------------------------------- | Interest-bearing | | | | 15.9 | 2.3 | | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Net | | | | 12.2 | -3.4 | | | interest-bearing | | | | | | | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Personnel on | | | | 755 | 803 | -6.0 | | average** | | | | | | | -------------------------------------------------------------------------------- | Earnings per share, | -0.02 | 0.07 | -126.4 | -0.10 | 0.19 | -150.5 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Cash flow from | -0.11 | 0.08 | -240.2 | -0.13 | 0.24 | -155.0 | | operating | | | | | | | | activities per | | | | | | | | share, EUR | | | | | | | -------------------------------------------------------------------------------- | Equity per share, | | | | 0.34 | 0.51 | -33.9 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Market | | | | 77.6 | 81.6 | -4.8 | | capitalization on | | | | | | || closing rate at | | | | | | | | period end | | | | | | | -------------------------------------------------------------------------------- * The group has changed the calculation for its equity ratio in the second quarter of 2009 to make it conform to the practice in this industry, i.e., the advance payments of circulation revenues have been deducted from the balance-sheet total. Generally, there is no obligation to refund advance payments to customers. The comparison figures have been changed to correspond with the new calculation method. ** The comparison figures are adjusted. CHIEF EXECUTIVE OFFICER - JUHA BLOMSTER: "The year 2009 can be split into two parts with regards to expectations and successes. We developed our media, and we were rewarded with a greater number of readers and online visitors. Talouselämä magazine achieved its highest circulation of all time, exceeding 80,000 copies, which is particularly rewarding given the current economic conditions. In 2009, as the general economic situation weakened, the level of media advertising both in Finland and in Sweden fell dramatically. Recruitment advertising almost completely ended. In Sweden, the decline began a little earlier than in Finland, and it would appear that Sweden will recover from it earlier too. The level of advertising follows the general economic trend and often over-reacts as the economic trend changes. Media sales, which are still our largest source of income, fell short of our targets. We started to adjust our costs in the previous year, but the general economic situation weakened faster, and I cannot be satisfied with our financial results. The most important objective in the short-term is the improvement of profitability. Talentum's aim is, by the end of 2012, to achieve net sales of EUR 140 million and operating profit that is more than 15 per cent of net sales. There is still some way to go, but our strategy is clear and the management and Board are committed to it. We strive to achieve our aims both by growing our current business and by corporate acquisitions. Any acquisitions must be consistent with Talentum's strategy and must benefit its shareholders. In the late summer, Alma Media Oyj made a mandatory tender offer for Talentum's shares. The tender continued until November, and only 1.49 per cent of the shares were offered to Alma Media. The end result demonstrated our shareholders' confidence in the strategic course taken by Talentum. Our strategic aim is to grow the existing operations as well as achieving growth via corporate acquisitions. During 2009 we investigated many potential targets, and at the end of the year we bought the Swedish company Sverige Bygger AB, which specialises in business information for the construction industry, as well as Norge Bygges AS in Norway. In Sweden, we set up the Talentum Business Information Group, whose aim is to develop business-information operations. As a result of this acquisition, the Group will reduce its dependency on advertising revenue, which is one of our strategic aims." Operating environment and seasonal variation The economic trend in Talentum's fields of activity has improved slightly during the last quarter of the year. The most recent forecasts for the development of the Gross Domestic Product in the Group's main market areas, Finland and Sweden, are positive for 2010. According to TNS Media Intelligence, in Finland media advertising for January-December fell 17.5%, and for periodicals in particular it fell by 21.3%. Online advertising decreased by 3.7%. In Sweden, total media advertising fell by 17% for January-December, while in professional journals the decrease was 36% (Sweden's Media Agencies - Sveriges Mediebyråer). The decline in advertising in professional journals has been significantly stronger than for general-interest magazines. In Finland, separate statistics are not compiled for professional journals. The activity level of customers clearly grew during the last quarter of the year, especially in Sweden. However, decision-making is still very short-term, so producing accurate forecasts is challenging. Our assessment is that the information needs of Talentum's professional target groups will remain high, irrespective of the economic situation. The professionals' choice of channels when searching for information, i.e., books, training, seminars, magazines and online services, may change. Talentum produces quality content for those channels where it can best serve its customers. The media and media-service markets are subject to seasonal variations. Whether the Easter holiday falls in the first or second quarter of the year in spring affects the results in that quarter. In the year of comparison, Easter fell into the first quarter, and in the year under review, it fell into the second quarter. During the summer holidays, magazines and books do not generally come out, and for this reason the third quarter is the weakest in terms of sales. Operations are generally at their busiest in the final quarter. Group net sales and profit for October-December 2009 The consolidated net sales for October-December amounted to EUR 19.9 million (EUR 25.2 million). Net sales for publishing operations fell 22.3%, totalling EUR 18.4 million (EUR 23.7 million) as the level of advertising sales fell 41.9%. The weakening of the Swedish Krona with respect to the Euro reduced net sales by a further EUR 0.2 million. The consolidated operating income before non-recurring items for October-December was EUR 1.6 million (EUR 3.9 million). The consolidated operating result was EUR -0.8 million (EUR 3.9 million), which was -4.2% of net sales (15.6%). The operating income for publishing before non-recurring items was EUR 2.1 million (EUR 4.3 million). Net financial expenses amounted to EUR 0.2 million (EUR 0.0 million). The Group's share of the income of associated companies was EUR 0.0 million (EUR 0.1 million). The consolidated income before taxes for October-December was EUR -1.1 million (EUR 4.0 million). The consolidated income for the period under review was EUR -0.8 million (EUR 2.7 million). The income from discontinued operations during the period under review in 2008 was EUR -0.7 million. Group net sales and profit for January-December 2009 The consolidated net sales for January-December amounted to EUR 66.8 million (EUR 93.4 million). Net sales for publishing operations fell 30.6%, totalling EUR 60.8 million (EUR 87.5 million) as the media advertising sales fell 50.5%. The weakening of the Swedish Krona with respect to the Euro reduced net sales by a further EUR 2.5 million. The consolidated operating income before non-recurring items for January-December was EUR -0.9 million (EUR 11.5 million). The consolidated operating income was EUR -5.2 million (EUR 11.5 million) and -7.8% of net sales (12.3%). The operating profit for publishing before non-recurring items was EUR 0.5 million (EUR 12.5 million). The Group's costs before non-recurring items were reduced for January-December by EUR 14.2 million or by 17.2% compared to last year, as a result of both savings programs and decreased production costs. Via lay-offs and pay cuts during the year, savings of around EUR 1.0 million were achieved, EUR 0.5 million in Finland and EUR 0.5 million in Sweden. The non-recurring expenses in the Group were EUR 4.4 million, and they were due to staff cuts and the pension arrangement where the assets and liabilities of Talentum's pension fund were transferred to a pension insurance company. In the spring of 2009, a significant cost adjustment was implemented in response to the market conditions. Staff levels in the group were reduced by about 50 full-time equivalents during 2009. Of these staff reductions, around 30 were in Finland, and around 20 were in Sweden. The non-recurring expenses relating to reductions in staffing levels were around EUR 3.1 million. The impact of the non-recurring costs arising from employment terminations during the last quarter of the year was EUR 1.1 million for 2009. A one-off expense of EUR 1.3 million resulted from the the pension arrangements, when a net asset in accordance with the IFRS, was removed from the balance sheet on 31 December 2009. The dissolution of the pension fund took place on 1 January 2010, and it has no effects on cash flow. Net financial expenses amounted to EUR 0.2 million (EUR 0.3 million). The Group's share of the income of associated companies was EUR -0.2 million (EUR -0.4 million). The income before taxes was EUR -5.6 million (EUR 10.9 million). The taxes for the Group were EUR +1.5 million (EUR -2.8 million) for the financial period. The effective tax rate for the financial period was 25.9% (25.5%). A positive change in deferred tax assets was recorded for the losses incurred in 2009. The consolidated income for the period under review was EUR -4.2 million (EUR 8.1 million). The income from discontinued operations during the period under review in 2008 was EUR -2.9 million. (Discontinued operations include the television content production and pre-media operations sold in 2008.) Sector and Talentum prospects for 2010 Small positive signs of a recovery in the economy and growing demand in the industry can be seen but customers are still only making short-term decisions. Cost adjustments made during 2009 will give Talentum a good base from which to work in 2010. Talentum estimates that comparable total net sales for the year will increase from the previous year (2009) and that operating income will be positive. However, growth during the start of the year will clearly be slower than for the end of the year. Short-term risks for the business The changes to economic growth will affect Talentum's revenues and revenue structures. Traditionally, about 40% of consolidated net sales are dependent on advertising and particularly on the b-to-b sector, which is sensitive to economic conditions. Under the present economic conditions, the share of advertising is about 30% of net sales. The most economically sensitive part of advertising revenue is job advertising. Our aim is to minimise the market risk relating to advertising by increasing the revenue from circulation sales and content sales. Our goal is for all our products and services to be market leaders in their fields, so that success is possible even in a recession. Online services are a factor that could change the earnings logic of magazines and books temporarily, or even over the long term. This channel selection could be significant for the Group's revenue structure. The move from printed products to online products may be accelerated particularly under the poor economic conditions. If we are unable to develop our activities to respond to changes in media usage habits, it could undermine our competitiveness. Group orders for major magazines are significant as far as coverage is concerned, and contracts have been in place for several decades. Changes in these contracts could have major impacts on circulations and indirectly affect media sales. In Direct Marketing, the weak economic conditions in the Baltic States could have a negative effect on the Group's local direct-marketing companies. The economic uncertainty increases the uncertainty regarding, in particular, advertising sales receivables. Credit-loss risks are managed by following customers' credit standing and by focusing on the follow-up of debts. Cash flow, financial position and balance sheet for the Group The cash flow from business operations for January-December was EUR -5.8 million (EUR 10.5 million). The change in working capital was EUR -4.0 million (EUR 0.9 million). Working capital is negative, as is usual for the sector, because liabilities include subscription fee advances received from customers of EUR 11.2 million (EUR 9.1 million). The consolidated balance sheet total at the end of December stood at EUR 58.8 million (EUR 49.7 million). The Group's interest-bearing loans and borrowing amounted to EUR 15.9 million (EUR 2.3 million). The Group's liquid assets were EUR 3.7 million (EUR 5.7 million). Interest-bearing net liabilities were EUR 12.2 million (EUR -3.4 million). The Group's interest-bearing liabilities increased by EUR 7.6 million as a consequence of the corporate acquisition made on 30 December 2009, and cash and cash equivalents increased by EUR 3.4 million. Talentum Oyj has a bank overdraft limit of EUR 14.0 million and a financing credit limit of EUR 20.0 million, a total of EUR 34.0 million. According to the rules agreed, loans within the financial credit limits can be drawn down and repaid throughout the maturity of the agreement until the beginning of February 2011. EUR 20.1 million of the limits was unused as at the financial year end. Discussions have been started with the banks regarding revision of the financing arrangements. The covenant of the loans is the equity ratio specified by the investors, which differs in its method of calculation from the equity ratio used generally in that the advances received are not deducted from the balance sheet total. The lower limit specified for the investors' covenant is exceeded in the financial statements by less than one percentage point. In addition, the Group has a commercial-paper programme of EUR 30 million, of which EUR 2 million were issued at the financial year end. The equity ratio at the end of December was 31.4% (54.8%) The Group's equity per share was EUR 0.34 (EUR 0.51). The Group does not hedge against currency fluctuations with regard to the acquisition of subsidiaries. The weakening or strengthening of the Swedish Krona against the Euro affects the Group's equity through the translation difference arising from the acquisition of the Swedish subsidiaries. In these financial statements, the translation difference reduces the Group's equity by EUR 1.5 million; the change for January - December was EUR 1.0 million (positive). Investments The gross investments in tangible and intangible assets totalled EUR 1.2 million (EUR 2.4 million) for January-December, which is 1.8% (2.5%) of net sales. Moreover, the addition to intangible assets arising from the corporate acquisition was EUR 7.6 million, which is presented in the balance sheet as goodwill, because the fair value of the net assets acquired is a preliminary figure and is dependent on the final determination of value. Changes in Group structure Talentum established the Talentum Business Information Group AB (TBIG) in Sweden, of which Talentum pledged to sell a minority interest of 9.9% to an associate outside the Group. Talentum Group's holding of the company on December 31, 2009 is computed as 90.1%. TBIG acquired construction-industry information businesses based in Sweden and Norway on 30 December 2009. The total consideration paid for the shares of Sverige Bygger AB and Norge Bygges AS was EUR 7.6 million. In November, the Group disposed of Telemarketing UAB, which was the subsidiary of direct-marketing business situated in Lithuania. Corporate acquisitions and disposals are detailed in the notes to the Financial Statements. Personnel During January-December, the Talentum Group employed an average of 755 (803) people. Geographically, the personnel were divided as follows: Finland 399 people (427), Sweden 176 (187), Latvia 63 (79), Lithuania 33 (33), Estonia 78 (73) and Russia 5 (5). BUSINESS AREAS -------------------------------------------------------------------------------- | EUR million | 10-12/ | 10-12/ | 1-12/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | Publishing Finland | 11.1 | 14.7 | 37.3 | 53.1 | -------------------------------------------------------------------------------- | Publishing Sweden | 7.3 | 9.0 | 23.5 | 34.4 | -------------------------------------------------------------------------------- | Direct marketing | 2.2 | 2.3 | 8.8 | 9.8 | -------------------------------------------------------------------------------- | Other | -0.6 | -0.8 | -2.8 | -4.0 | -------------------------------------------------------------------------------- | Total | 19.9 | 25.2 | 66.8 | 93.4 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Operating income without | | | | | | non-recurring items | | | | | -------------------------------------------------------------------------------- | Publishing Finland | 1.5 | 3,4 | 1.9 | 9.7 | -------------------------------------------------------------------------------- | Publishing Sweden | 0.6 | 0.9 | -1.4 | 2.8 | -------------------------------------------------------------------------------- | Direct marketing | 0.1 | 0.2 | 0.7 | 1.1 | -------------------------------------------------------------------------------- | Other | -0.6 | -0.6 | -2.1 | -2.1 | -------------------------------------------------------------------------------- | Total | 1.6 | 3.9 | -0.9 | 11.5 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Non-recurring items | | | | | -------------------------------------------------------------------------------- | Publishing Finland | -1.1 | | -2.1 | | -------------------------------------------------------------------------------- | Publishing Sweden | -0.9 | | -1.8 | | -------------------------------------------------------------------------------- | Direct marketing | -0.2 | | -0.2 | | -------------------------------------------------------------------------------- | Other | -0.2 | | -0.3 | | -------------------------------------------------------------------------------- | Total | -2.4 | | -4.4 | | -------------------------------------------------------------------------------- | Operating income | -0.8 | 3.9 | -5.2 | 11.5 | -------------------------------------------------------------------------------- Non-recurring items include expenses arising from restructuring of the group and additional expenses arising from the pension arrangements. Both are included in consolidated employee benefit expenses. Publishing October-December Publishing's net sales for October-December amounted to EUR 18.4 million (EUR 23.7 million), a change of -22.3% from the previous year. Of publishing's net sales, 60% (62%) originated from Finland and the rest, 40% (38%), from Sweden. Advertising revenue decreased for October-December by 41.9% from the previous year. The share of advertising revenue in net sales from publishing totalled 33% (44%). Job advertising, which is sensitive to economic conditions, decreased further. January-December Publishing's net sales for January-December amounted to EUR 60.8 million (EUR 87.5 million), a change of -30.6% from the previous year. Of publishing's net sales, 61% (61%) came from Finland and the rest, 39% (39%), from Sweden. Advertising revenue decreased for January-December 50.5% from last year. The share of advertising revenue in net sales from publishing was 34% (47%). -------------------------------------------------------------------------------- | EUR million | 10-12/ | 10-12/ 2008 | 1-12/ 2009 | 1-12/ 2008 | | | 2009 | | | | -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | Advertisement revenue | 6.1 | 10.5 | 20.4 | 41.1 | -------------------------------------------------------------------------------- | Circulation revenue | 6.4 | 6.6 | 23.4 | 24.8 | -------------------------------------------------------------------------------- | Other content revenue * | 5.9 | 6.6 | 17.0 | 21.6 | -------------------------------------------------------------------------------- | Total | 18.4 | 23.7 | 60.8 | 87.5 | -------------------------------------------------------------------------------- * 'Other content revenue' includes books and training as well as information services. The total net sales of e-business decreased 28.3% for January-December as advertising was reduced. Investments in e-business appear in the growing numbers of web-page hits. Net sales for e-business were EUR 7.9 million (EUR 11.0 million), which corresponds to 13% (13%) of the total figure for publishing. Publishing Finland October-December Publishing Finland's net sales for October-December amounted to EUR 11.1 million (EUR 14.7 million), a change of -24.6% from the previous year. Advertising revenues were 49.5% down on the previous year. Advertising in online media also decreased, but significantly less. Magazine circulation revenue remained at a good level. In other content revenues, books performed well, and seminars did reasonably well. Training performed poorly, as companies economised in their training budgets. Publishing Finland's operating income before non-recurring items was EUR 1.5 million (EUR 3.4 million). Publishing Finland's operating profit (EBIT) was EUR 0.4 million (EUR 3.4 million). The reduction in advertising revenues weakened profitability further. January-December Publishing Finland's net sales for January-December were EUR 37.3 million (EUR 53.1 million), and the change from the previous year was -29.7%. Advertising revenues were 51.1% down on last year. Publishing Finland's operating income before non-recurring items was EUR 1.9 million (EUR 9.7 million). Non-recurring expenses are EUR 1.2 million for expenses arising from staff cuts and EUR 0.9 million for expenses arising from the pension arrangements. Publishing Finland's operating result (EBIT) was EUR -0.1 million (EUR 9.7 million). Online Talentum media focused on building premium services that require registration. The aim of the new content areas is to strengthen relationships with readers. This becomes apparent, above all, in the number of web-page hits. In Finland, the total of web-page hits grew by 22% compared with the corresponding period in the previous year. Publishing Sweden October-December Publishing Sweden's net sales for October-December amounted to EUR 7.3 million (EUR 9.0 million), a change of -18.7% from the previous year. Advertising revenues were 32.7% down on last year. Exchange rates reduced net sales by about EUR 0.2 million. Publishing Sweden's operating income before non-recurring items was EUR 0.6 million (EUR 0.9 million). Publishing Sweden's operating income (EBIT) was EUR -0.2 million (EUR 0.9 million). The reduction in advertising revenues was the primary reason for weakened profitability. Advertising revenues in Sweden are more sensitive to economic fluctuations than in Finland, due to the higher proportion of job advertising. January-December Publishing Sweden's net sales for January-December amounted to EUR 23.5 million (EUR 34.4 million), a change of -31.9% from the previous year. Exchange rates reduced net sales by EUR 2.5 million; without the effect of exchange rates, net sales were reduced by 24.7%. Advertising revenues were 49.7% down on last year. Publishing Sweden's operating income before non-recurring items was EUR -1.4 million (EUR 2.8 million). Presented as non-recurring expenses are EUR 0.8 million for costs arising from staff cuts. Publishing Sweden's operating result (EBIT) was EUR -3.2 million (EUR 2.8 million). The number of subscribers to the Ny Teknik magazine's electronic newsletter has increased significantly and is now approximately 78,000. In its segment, Ny Teknik's online service is the biggest in Sweden, according to KiaIndex. Direct Marketing October-December Direct Marketing's net sales for October-December amounted to EUR 2.2 million (EUR 2.3 million), and the operating income without non-recurring items was EUR 0.1 million (EUR 0.2 million). The operating income (EBIT) for Direct Marketing was EUR -0.2 million (EUR 0.2 million). January-December Direct Marketing's net sales for January-December amounted to EUR 8.8 million (EUR 9.8 million), and the operating income without non-recurring items was EUR 0.7 million (EUR 1.1 million). Operating income is reduced by the EUR 0.1 million loss arising on the disposal of the company in Lithuania. The operating income (EBIT) for Direct Marketing was EUR 0.5 million (EUR 1.1 million). The one-off expense arising from the pension arrangement was EUR 0.2 million. As Talentum Group decreased its direct marketing, its internal net sales fell by around EUR 1.2 million. The Group's external net sales, on the other hand, continued their growth. Changes to the Group Executive Management Talentum Group's Human Resources Manager, Ulla Martola, MSc (Econ), was appointed to the Group Executive Management. Talentum Sweden's CEO, Christer Björkin, and CFO, Axel Östergren, who were also members of the Group Executive Management, ceased to work for the company in December. TALENTUM GROUP AGM, Board and Auditor Talentum's Annual General Meeting was held on 27 March 2009. The meeting confirmed the financial statements for 1 January - 31 December 2008 and granted the company's Board of Directors and CEO exemption from liability. The AGM re-elected partner - Manne Airaksinen, Insurance Counsellor - Harri Kainulainen, Chairman of the Board - Eero Lehti, Group Vice President, Corporate Communications - Atte Palomäki, and Tuomo Saarinen, MSc (Eng.), as members of the Board of Directors. Merja Strengell, MSc (Eng.), was elected as a new member. Tuomo Saarinen was re-elected Chairman of the Board, and Manne Airaksinen was re-elected Deputy Chairman. The AGM decided that the Board's monthly fees would remain at EUR 4,000 for the Chairman, EUR 2,500 for the Deputy Chairman and EUR 2,000 for members. Authorized Public Accountants PricewaterhouseCoopers Oy were re-elected auditors, with APA Juha Wahlroos as the accountable auditor. Dividend and return of equity for 2008 The AGM on 27 March 2009 decided, on a motion by the Board of Directors, to pay out a dividend of EUR 0.04 per share and pay EUR 0.06 per share in return of equity, totalling EUR 0.10 per share. The record date was 1 April 2009, and the date of payment was 8 April 2009. Shares and share capital At the end of the period under review, Talentum Oyj's share capital totalled EUR 18,593,518.79 comprising 44,295,787 fully paid-up shares. The shares are listed on the NASDAQ OMX Helsinki. A total of 7,389,719 shares were traded during 2009, 16.7% of the total average number of shares during the financial period. The highest price paid for shares during the financial period was EUR 2.39, and the lowest was EUR 1.44. The closing price for the shares on 30 December 2009 was EUR 1.78. At the end of the period under review, the company held 681,000 of its treasury shares, which is about 1.5% of Talentum's total shares and votes. During the financial period, no new treasury shares were bought. Notifications Accendo Capital SICAV-SIF Fund (Luxembourg) announced on 18 May 2009 that its shareholding in the company had exceeded 5% of the share capital on 15 May 2009. The number of the shares held by the fund was 2,278,674, which is 5.14% of the total shares and votes. Alma Media Oyj announced on 10 August 2009 that its shareholding and the shareholding of Kauppalehti, its wholly owned subsidiary, in the company had exceeded 30% of the share capital. The number of the shares held by them totalled 13,575,000, which is 30.65% of the total shares and votes. Alma Media Oyj's mandatory public tender offer Alma Media Oyj announced on 10 August 2009 that it was to make a mandatory public tender offer for Talentum's shares. Alma Media published the offer document on 19 August 2009 when the takeover bid was commenced. The statement by Talentum's Board of Directors on the takeover bid, in accordance with the Finnish Securities Markets Act, was released on 4 September 2009. Talentum's Board of Directors pointed out in its statement, among other things, that it regards the offer price of the tender offer as too low and cannot recommend acceptance of the offer to Talentum's shareholders. The Finnish Competition Authority disclosed on 6 November 2009 its resolution that the purchase by a public tender offer could have been completed without conditions set by the FCA. Alma Media Oyj extended its tender offer of 14 September 2009 to 15 October 2009 and, on 14 October 2009, further extended it to 16 November 2009. The tender offer expired on 16 November 2009. The tender offer was accepted by shareholders representing around 1.49% of the total votes for Talentum's shares. Taking these shares into account, Alma Media Group's ownership of Talentum rose to around 32.14% of Talentum's total votes or 32.64% if own shares held by Talentum that do not have a voting right are taken into account. Shareholder agreements The company is not aware of any mutual shareholder agreements between its shareholders relating to the operations or ownership of the company. Shareholdings of the Board of Directors and CEO On 31 December 2009, the number of Talentum Oyj shares and options owned by members of the Board of Directors and the CEO personally or through companies in which they have a controlling interest was 49,912, representing 0.11% of the company's total shares and votes. Authorizations of the Board of Directors Authorization of the Board of Directors to decide on a share issue including the conveyance of treasury shares and the issue of special rights The Annual General Meeting on 27 March 2009 authorized the Board of Directors to decide on a share issue that may be either chargeable or free of charge, including the issuing of new shares and the conveyance of treasury shares possibly in the company's possession. The Annual General Meeting has authorized the Board of Directors to decide on an issue of option rights and other special rights which grant entitlement, in return for payment, to receive new shares or any shares in the company's possession. By virtue of the aforementioned authorizations, a maximum of 3,500,000 new shares, corresponding to approximately eight percent of the issued shares of the company, may be issued in one or several lots and/or own shares held by the company may be conveyed, in a share issue and/or on the basis of the special rights given. The authorizations will remain in force until 30 June 2010. The authorizations do not exclude the Board's right to decide on a directed share issue and the granting of special rights. Shareholders' pre-emptive subscription rights can be deviated from, provided that there are strong financial grounds for the company to do so. The authorization was unused as of 31 December 2009. Authorization of the Board of Directors to decide on acquisition of treasury shares The Annual General Meeting on 27 March 2009 authorized the Board of Directors to decide on the acquisition of the company's treasury shares. The shares can be acquired for the value determined by the Board of Directors and is based on the fair value of the shares in public trading at the time of their acquisition. The company's treasury shares may be only acquired using unrestricted equity. By virtue of the authorization, the company's treasury shares may be acquired, either in one or in several lots, but limited to a total of 3,500,000 shares, which corresponds to approximately eight per cent of the issued shares of the company. The authorization will remain in force until 30 June 2010. The Board of Directors is otherwise authorized to decide on all terms and conditions regarding the acquisition of the company's treasury shares, including the manner of acquisition of the shares. The authorization does not exclude the right of the Board of Directors to also decide on a directed acquisition of the company's treasury shares providing that there are strong financial grounds for the company to do so. The authorization was unused as of 31 December 2009. Management's share-based incentive scheme Talentum Oyj operates a share-based incentive system for corporate management. The scheme consists of three earnings periods, each comprising of at least one and no more than three financial periods. The first earnings period was the 2007 financial year, the second was the 2008 financial year, and the final earnings period of the scheme was the 2009 financial year. The total length of the scheme is five years. The bonuses will be paid partly in the Company's shares and partly in cash after the end of each earnings period. The share paid in cash will cover any taxes and other such costs arising from the bonus. Transferring the shares earned within two years of the end of the earnings period is prohibited. However, after this, the CEO of the Company must retain one half of the shares earned by him under the scheme until the termination of his employment contract and for one year after its termination. Eleven people were covered by the scheme for the 2009 earnings period. The targets for 2009 were based on the consolidated operating profit as well as the overall yield for Talentum's shares. No shares were issued in respect of the 2008 and 2009 earnings periods. Initially it was possible to earn 493,500 shares in the scheme, of which 74,970 have been issued for 2007. Market guarantee for the provision of liquidity An agreement with Nordea Securities Oyj on a market guarantee for Talentum Oyj shares became effective on 21 June 2004. Under the agreement, Nordea Securities will submit a purchase and sale offer, so that the maximum permitted differential between them is 3% of the purchase offer. The offers will include a minimum of 2,500 shares. Proposal of the Board of Directors for distribution of profits On 31 December 2009, the parent company's non-restricted equity fund comprised invested non-restricted equity of EUR 86,976,714.06, the treasury shares fund of EUR -2,834,420.30 and retained earnings of EUR -13,477,728.74, of which the income for the financial period was EUR -16,443,911.13. A decrease in value of Talentum Media Oy's shares of EUR 15.6 million had a negative effect on the income and retained earnings of the parent company. The book value of the shares, after entry, is EUR 80.0 million. The Board proposes that a dividend or return of equity is not distributed for the financial period 2009. Annual General Meeting - 2010 Talentum Oyj's Annual General Meeting will be held on 31 March 2010 at 2 p.m. TABLES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME -------------------------------------------------------------------------------- | EUR million | 10-12/ | 10-12/ | 1-12/ | 1-12/ | | | 2009 | 2008* | 2009 | 2008 |-------------------------------------------------------------------------------- | CONTINUING OPERATIONS | | | | | -------------------------------------------------------------------------------- | Net sales * | 19.9 | 25.2 | 66.8 | 93.4 | -------------------------------------------------------------------------------- | Other operating income | 0.3 | 0.2 | 0.7 | 0.5 | -------------------------------------------------------------------------------- | Materials and services | 3.6 | 3.8 | 12.2 | 15.0 | -------------------------------------------------------------------------------- | Employee benefit expenses | 11.4 | 10.7 | 39.2 | 41.6 | -------------------------------------------------------------------------------- | Depreciation, amortisation and | 0.5 | 0.4 | 1.8 | 1.7 | | impairment | | | | | -------------------------------------------------------------------------------- | Other operating expenses | 5.5 | 6.6 | 19.6 | 24.1 | -------------------------------------------------------------------------------- | Operating income * | -0.8 | 3.9 | -5.2 | 11.5 | -------------------------------------------------------------------------------- | Financial income | -0.2 | 0.2 | 0.1 | 0.5 | -------------------------------------------------------------------------------- | Financial expenses | 0.1 | 0.2 | 0.3 | 0.8 | -------------------------------------------------------------------------------- | Share of income of associated | 0.0 | 0.1 | -0.2 | -0.4 | | companies | | | | | -------------------------------------------------------------------------------- | Income before taxes | -1.1 | 4.0 | -5.6 | 10.9 | -------------------------------------------------------------------------------- | Taxes | 0.2 | -1.3 | 1.5 | -2.8 | -------------------------------------------------------------------------------- | Income for the period, | -0.8 | 2.7 | -4.2 | 8.1 | | continuing operations | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | DISCONTINUED OPERATIONS | | | | -2.9 | -------------------------------------------------------------------------------- | Income for the period, | | -0.7 | | 5.2 | | discontinued operations | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Income for the period | -0.8 | 2.0 | -4.2 | 5.2 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Other comprehensive income: | | | | | -------------------------------------------------------------------------------- | Translation differences | 0.0 | -2.2 | 1.0 | -3.0 | -------------------------------------------------------------------------------- | Available-for-sale investments | 0.0 | | 0.0 | | -------------------------------------------------------------------------------- | Income tax on | 0.0 | | 0.0 | | | available-for-sale investments | | | | | -------------------------------------------------------------------------------- | Total comprehensive income for | -0.7 | -0.1 | -3.1 | 2.2 | | the period | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Income for the period | | | | | | attributable to: | | | | | -------------------------------------------------------------------------------- | Owners of the parent company | -0.8 | 2.0 | -4.2 | 5.2 | -------------------------------------------------------------------------------- | Minority interest | 0.0 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total comprehensive income for | | | | | | the period attributable to: | | | | | -------------------------------------------------------------------------------- | Owners of the parent company | -0.8 | 2.0 | -3.1 | 2.3 | -------------------------------------------------------------------------------- | Minority interest | 0.0 | 0.0 | 0.0 | -0.0 | -------------------------------------------------------------------------------- | Basic and diluted ** | | | | | -------------------------------------------------------------------------------- | Earnings per share, EUR | -0.02 | 0.05 | -0.10 | 0.12 | -------------------------------------------------------------------------------- | Earnings per share, continuing | -0.02 | 0.07 | -0.10 | 0.19 | | operations, EUR | | | | | -------------------------------------------------------------------------------- | Earnings per share, | | -0.02 | | -0.07 | | discontinuing operations, EUR | | | | | -------------------------------------------------------------------------------- * The net sales and operating income for the period under review January - December 2008 have been corrected by changing the periodicity of the circulation revenues so that the circulation revenues of the comparison period also match the number of issues in the period. The effect for October-December 2008 on both net sales and operating income is EUR 0.5 million. ** Earnings per share are calculated from the income attributed to the equity owners of the parent company. CONSOLIDATED STATEMENT OF FINANCIAL POSITION -------------------------------------------------------------------------------- | | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | EUR million | | | -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 1.3 | 1.6 | -------------------------------------------------------------------------------- | Goodwill | 28.1 | 20.0 | -------------------------------------------------------------------------------- | Other intangible assets | 11.6 | 11.3 | -------------------------------------------------------------------------------- | Investments in associates | 0.1 | 0.3 | -------------------------------------------------------------------------------- | Available-for-sale investments | 0.1 | 0.1 | -------------------------------------------------------------------------------- | Deferred tax assets | 1.8 | 0.5 | -------------------------------------------------------------------------------- | Other non-current receivables | 0.3 | 1.6 | -------------------------------------------------------------------------------- | Total non-current assets | 43.3 | 35.4 | -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Inventories | 1.3 | 1.3 | -------------------------------------------------------------------------------- | Trade and other receivables | 10.5 | 7.2 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 3.7 | 5.7 | -------------------------------------------------------------------------------- | Total current assets | 15.5 | 14.2 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 58.8 | 49.7 | -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | -------------------------------------------------------------------------------- | Equity attributable to equity owners | | | | of the parent | | | -------------------------------------------------------------------------------- | Share capital | 18.6 | 18.6 | -------------------------------------------------------------------------------- | Share premium reserve | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Treasury shares | -2.8 | -2.8 | -------------------------------------------------------------------------------- | Other reserves | -2.2 | -3.2 | -------------------------------------------------------------------------------- | Invested non-restricted equity fund | 3.3 | 5.9 | -------------------------------------------------------------------------------- | Retained earnings | -2.2 | 3.7 | -------------------------------------------------------------------------------- | Total | 14.6 | 22.2 | -------------------------------------------------------------------------------- | Minority interest | 0.3 | 0.1 | -------------------------------------------------------------------------------- | Total equity * | 14.9 | 22.3 | -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 2.9 | 3.1 | -------------------------------------------------------------------------------- | Non-current financial liabilities | 0.1 | 0.4 | -------------------------------------------------------------------------------- | Pension obligation | 0.1 | - | -------------------------------------------------------------------------------- | Other non-current liabilities | 0.4 | 0.5 | -------------------------------------------------------------------------------- | Non-current provisions | 0.2 | 0.9 | -------------------------------------------------------------------------------- | Total non-current liabilities | 3.7 | 4.8 | -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Current financial liabilities | 15.8 | 1.9 | -------------------------------------------------------------------------------- | Advances received | 11.2 | 9.1 | -------------------------------------------------------------------------------- | Trade and other payables | 13.1 | 11.6 | -------------------------------------------------------------------------------- | Current provisions | 0.1 | 0.1 | -------------------------------------------------------------------------------- | Total current liabilities | 40.2 | 22.6 | -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 58.8 | 49.7 | -------------------------------------------------------------------------------- * The comparison period has been adjusted by transferring the translation difference change of EUR 0.7 million included in retained earnings into the translation reserve. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW -------------------------------------------------------------------------------- | EUR million | 1-12/ 2009 | 1-12/ 2008 | -------------------------------------------------------------------------------- | Cash flow from operating activities, | | | | continuing operations | | | -------------------------------------------------------------------------------- | Operating income | -5.2 | 11.5 | -------------------------------------------------------------------------------- | Adjustments to operating income | 4.1 | 0.3 | -------------------------------------------------------------------------------- | Change in working capital | -4.0 | 0.9 | -------------------------------------------------------------------------------- | Financial items and taxes | -0.6 | -2.3 | -------------------------------------------------------------------------------- | Net cash from operating activities | -5.8 | 10.5 | -------------------------------------------------------------------------------- | Cash flow from investing activities, | | | | continuing operations | | | -------------------------------------------------------------------------------- | Acquisition of subsidiaries and associates, | -4.3 | | | net of cash acquired | | | -------------------------------------------------------------------------------- | Disposal of subsidiaries and associates | -0.1 | | -------------------------------------------------------------------------------- | Acquisition of property, plant and equipment | -1.2 | -2.4 | | and intangible assets | | | -------------------------------------------------------------------------------- | Other items | 0.0 | -0.1 | -------------------------------------------------------------------------------- | Net cash from investing activities | -5.6 | -2.5 | -------------------------------------------------------------------------------- | Cash flow from financing activities, | | | | continuing operations | | | -------------------------------------------------------------------------------- | Change in current loans | 15.0 | -14.0 | -------------------------------------------------------------------------------- | Repayment of non-current loans | -1.4 | -1.0 | -------------------------------------------------------------------------------- | Dividends paid | -4.4 | -8.8 | -------------------------------------------------------------------------------- | Purchase of treasury shares | | -1.5 | -------------------------------------------------------------------------------- | Net cash used in financing activities | 9.2 | -25.3 | -------------------------------------------------------------------------------- | Discontinued operations | | | -------------------------------------------------------------------------------- | Net cash from operating activities | | -2.2 | -------------------------------------------------------------------------------- | Net cash from investing activities | | 12.4 | -------------------------------------------------------------------------------- | Net cash from financing activities | | -0.5 | -------------------------------------------------------------------------------- | Cash flow from discontinued operations | | 9.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -2.1 | -7.5 | -------------------------------------------------------------------------------- | Cash and cash equivalents at the beginning of | 5.7 | 13.8 | | period | | | -------------------------------------------------------------------------------- | Foreign exchange adjustment | 0.1 | -0.6 | -------------------------------------------------------------------------------- | Net change in cash and cash equivalents | -2.1 | -7.5 | -------------------------------------------------------------------------------- | Cash and cash equivalents at the end of period | 3.7 | 5.7 | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN EQUITY -------------------------------------------------------------------------------- | a = Share capital | f = Invested non-restricted equity fund | | b = Share premium reserve | g = Retained earnings | | c = Treasury shares | h = Equity attributable to equity owners of | | d = Fair value reserve | the parent (before minority interest) | | e = Translation reserve | i = Minority interest | | | j = Total equity | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR | a | b | c | d | e | f | g | h | i | j | | millio | | | | | | | | | | | | n | | | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 0.0 | -2.8 | 0.0 | -3.2 | 5.9 | 3.7 | 22.2 | 0.1 | 22.3 | | at 1 | | | | | | | | | | | | Januar | | | | | | | | | | | | y 2009 | | | | | | | | | | | -------------------------------------------------------------------------------- | Return | | | | | | -2.6 | | -2.6 | | -2.6 | | of | | | | | | | | | | | | equity | | | | | | | | | | | -------------------------------------------------------------------------------- | Divide | | | | | | | -1.7 | -1.7 | | -1.7 | | nds | | | | | | | | | | | | paid | | | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | -0.0 | | 0.2 | 0.2 | | items | | | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | 0.0 | 1.0 | | -4.2 | -3.1 | -0.0 | -3.2 | | compre | | | | | | | | | | | | hensiv | | | | | | | | | | | | e | | | | | | | | | | | | income | | | | | | | | | | | | for | | | | | | | | | | | | the | | | | | | | | | | | | year | | | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 0.0 | -2.8 | 0.0 | -2.2 | 3.3 | -2.2 | 14.6 | 0.3 | 14.9 | | at | | | | | | | | | | | | 31 | | | | | | | | | | | | Decemb | | | | | | | | | | | | er | | | | | | | | | | | | 2009 | | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | 18.6 | 5.9 | -1.3 | | -0.2 | 0.0 | 7.4 | 30.3 | 1.6 | 31.9 | | at 1 | | | | | | | | | | | | Januar | | | | | | | | | | | | y 2008 | | | | | | | | | | | -------------------------------------------------------------------------------- | Share | | -5.9 | | | | 5.9 | | | | | | premiu | | | | | | | | | | | | m | | | | | | | | | | | | transf | | | | | | | | | | | | er | | | | | | | | | | | -------------------------------------------------------------------------------- | Divide | | | | | | | -8.8 | -8.8 | | -8.8 | | nds | | | | | | | | | | | | paid | | | | | | | | | | | -------------------------------------------------------------------------------- | Purcha | | | -1.5 | | | | | -1.5 | | -1.5 | | se of | | | | | | | | | | | | treasu | | | | | | | | | | | | ry | | | | | | | | | | | | shares | | | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | -0.1 | -0.1 | -0.1 | -0.2 | | items | | | | | | | | | | | -------------------------------------------------------------------------------- | Dispos | | | | | | | | | -1.3 | -1.3 | | al of | | | | | | | | | | | | compan | | | | | | | | | | | | ies | | | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | | -3.0 | | 5.2 | 2.3 | 0.0 | 2.2 | | compre | | | | | | | | | | | | hensiv | | | | | | | | | | | | e | | | | | | | | | | | | income | | | | | | | | | | | | for | | | | | | | | | | | | the | | | | | | | | | | | | year * | | | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 0.0 | -2.8 | | -3.2 | 5.9 | 3.7 | 22.2 | 0.1 | 22.3 | | at 31 | | | | | | | | | | | | Decenb | | | | | | | | | | | | er2008 | | | | | | | | | | | -------------------------------------------------------------------------------- * The comparison period has been adjusted by transferring the translation difference change of EUR 0.7 million included in retained earnings into the translation reserve. The change in the number of shares is detailed in the notes to the financial statements. NOTES TO THE FINANCIAL STATEMENTS In preparation of this interim report, Talentum has applied the same accounting principles as in the financial statements for 2008, apart from the additions described below. The calculation of the equity ratio has been changed in the second quarter in such a way that total equity is divided by the balance sheet total minus subscription fee advances. Thus, the method of calculation for solvency corresponds to common practice for the sector. Subscription fee advances are recognised as sales in line with the numbers of magazines published. Subscription fee advances received were earlier included in accrued expenses and deferred income in the balance sheet, and they were not deducted from the balance sheet total when calculating the key indicator. The periodicity of net sales from circulation revenues for Finnish magazines has been changed so that from the beginning of the year the circulation revenues match the number of issues. Previously the revenue was allocated to calendar months evenly. The figures from the comparison period have been restated to correspond to the changed periodicity practice. The change affects both net sales and the operating income by the same amount. From 1 January 2009, Talentum has adopted the following, new IFRS standards: IAS 1 Presentation of financial statements The presentation of the interim report income statement and statement showing the changes in equity have been altered to correspond to the presentation required by IAS 1. IFRS 8 Operating segments Since the beginning of 2009, the Group has adopted the standard Operating Segments, IFRS 8. In accordance with the new standard, the Group has changed its segment reporting as follows: the Group has three operating segments to be reported that represent the Group's business units and that are managed as separate units. The segments are Publishing Finland, Publishing Sweden and Direct Marketing. Publishing Finland publishes magazines for professionals as well as literature for the legal and other professions. It also provides online services, information services and seminars. Publishing Sweden publishes magazines as well as provides online services, information services and seminars. Direct Marketing is focused on telemarketing of newspapers and books in Finland and the Baltic States. Included in "Others" are Conseco Press, Talentum Oyj - the parent company providing administrative services to the Group - and intra-Group item eliminations. Amendments to IFRS 7 "Financial Instruments": Disclosures - The improvement of disclosures about financial instruments. The changes extend the disclosures to be given on liquidity risk and the determination of fair values for financial assets and liabilities. In addition, the Group has adopted the Annual Improvements made to IFRS standards that was issued in May 2008. The other new and revised standards and interpretations are not relevant to the Group. Discontinued operations include the television content production and pre-media operations sold in 2008. All the figures in this report have been rounded up or down, so the sum of the figures may be different from the totals shown. YEAR 2008 COMPARISON FIGURES IN FINANCIAL REPORTING Released on 17 June 2009, Talentum presented the historical comparison figures from 2008 in its financial reporting for the year 2009. The comparison figures changed as a result of the sale of business operations not belonging to core business activities, and due to the change in the bases of calculation presented above. TALENTUM GROUP BY SEGMENTS -------------------------------------------------------------------------------- | 1-12/2009 | Publishing | Publishing | Direct | Other | Group | | | Finland | Sweden* | marketing | | Total | -------------------------------------------------------------------------------- | EUR million | | | | | | -------------------------------------------------------------------------------- | External net | 37.3 | 23.5 | 5.8 | 0.2 | 66.8 | | sales | | | | | | -------------------------------------------------------------------------------- | Inter-segment | | | 3.0 | -3.0 | 0.0 | | net sales | | | | | | -------------------------------------------------------------------------------- | Operating income | 1.9 | -1.4 | 0.7 | -2.1 | -0.9 | -------------------------------------------------------------------------------- | Segment income | 1.9 | -1.4 | 0.7 | -2.1 | -0,9 | | before taxes | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Reconciliation: | | | | | | -------------------------------------------------------------------------------- | Segment income | 9.7 | 2.8 | 1.1 | -2.1 | -0.9 | | before taxes | | | | | | -------------------------------------------------------------------------------- | Non-recurring | | | | | -4.4 | | items | | | | | | | unallocated to | | | | | | | the segments | | | | | | -------------------------------------------------------------------------------- | Financing items, | | | | | -0.2 | | net | | | | | | -------------------------------------------------------------------------------- | Share of income | | | | | -0.2 | | of associated | | | | | | | companies | | | | | | -------------------------------------------------------------------------------- | Consolidated | | | | | -5.6 | | income before | | | | | | | taxes | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Segment assets | 11.1 | 44.5 | 1.1 | 2.1 | 58.8 | -------------------------------------------------------------------------------- * Includes the assets of the business-information operations acquired. -------------------------------------------------------------------------------- | 1-12/2008 | Publishin | Publishing | Direct | Other | Group | | | g Finland | Sweden | marketing | | Total | -------------------------------------------------------------------------------- | EUR million | | | | | | -------------------------------------------------------------------------------- | External net | 53.1 | 34.4 | 5.6 | 0.2 | 93.4 | | sales | | | | | | -------------------------------------------------------------------------------- | Inter-segment | | | 4.2 | -4.2 | 0.0 | | net sales | | | | | | -------------------------------------------------------------------------------- | Operating income | 9.7 | 2.8 | 1.1 | -2.1 | 11.5 | -------------------------------------------------------------------------------- | Segment income | 9.7 | 2.8 | 1.1 | -2.1 | 11.5 | | before taxes | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Reconciliation: | | | | | | -------------------------------------------------------------------------------- | Segment income | | | | | 11.5 | | before taxes | | | | | | -------------------------------------------------------------------------------- | Financing items, | | | | | -0.3 | | net | | | | | | -------------------------------------------------------------------------------- | Share of income | | | | | -0.4 | | of associated | | | | | | | companies | | | | | | -------------------------------------------------------------------------------- | Consolidated | | | | | 10.9 | | income before | | | | | | | taxes | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Segment assets | 10.5 | 33.5 | 1.3 | 4.4 | 49.7 | -------------------------------------------------------------------------------- BUSINESSES DISPOSED AND ACQUIRED Disposals of subsidiaries and businesses In November, the Group disposed of Telemarketing UAB, which was the subsidiary of direct-marketing business situated in Lithuania. The annual net sales for the company disposed of were around EUR 0.5 million, and it had around 30 staff members. The effect of the sale on the consolidated balance sheet was minor. The loss of EUR 0.1 million that arose from the sale is included in the consolidated operating income. Acquisitions of subsidiaries and businesses Talentum's 90.1% owned Swedish subsidiary, Talentum Business Information Group AB, acquired the complete share capital of Sverige Bygger AB and Norge Bygges AS in an agreement made on 30 December 2009. At the time of acquisition, the company employed 85 people. The companies acquired provide information services concerning companies, projects, tenders and acquisitions in the construction industry, and they provide marketing services to the construction industry. The purchase consideration was EUR 7.6 million, and it was paid in cash on the day of completion of the deal. In addition, expert fees of EUR 0.3 million were included in the acquisition cost along with an estimated EUR 0.4 million contingent consideration liability. Payment of this liability depends on how profitability of the companies develops during 2010 and 2011, and it will be payable no later than spring 2012. The liability is included in Group non-current liabilities. The goodwill that arose from the acquisition is presented as a EUR 7.6 million item in the year-end balance sheet, because the fair value of the net assets acquired is provisional and is dependent on the final determination. The final fair values are included in the final acquisition-cost calculation in net assets of the companies, and they reduce the level of goodwill. The final figure for goodwill is regarded as arising principally from specialist personnel and industry expertise. The group financial statements at the reporting date include the balance sheets of the acquired companies, and the acquisition has no effect on the income for the reporting period. If the acquisition had happened at the beginning of the 2009 financial period, it would have increased consolidated net sales by EUR 6.2 million and the operating income by EUR 0.8 million. -------------------------------------------------------------------------------- | Assets and liabilities of acquired companies: | | -------------------------------------------------------------------------------- | Property, plant and equipment | 0.0 | -------------------------------------------------------------------------------- | Trade and other receivables | 1.9 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 3.4 | -------------------------------------------------------------------------------- | Total assets | 5.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | 4.6 | -------------------------------------------------------------------------------- | Total liabilities | 4.6 | -------------------------------------------------------------------------------- | Net assets | 0.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cost of an acquisition | 8.3 | -------------------------------------------------------------------------------- | Goodwill | 7.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consideration paid (in cash) | 7.6 | -------------------------------------------------------------------------------- | Cash and cash equivalents of acquired companies | -3.3 | -------------------------------------------------------------------------------- | Net cash outflow | 4.3 | -------------------------------------------------------------------------------- EMPLOYEE BENEFITS: POST-EMPLOYMENT BENEFITS The Talentum Group general pension fund statutory Finnish Employees' Pensions Act pension liability and the assets relating to it were transferred to an insurance company on 1 January 2010. After the transfer, the Group has no direct or indirect liability to pay its staff any pension benefits arising from their employment. The present value of pension obligations and the fair value of assets on the balance sheet at the financial year end are equal in size, i.e. the net liability recorded on the balance sheet is zero. The non-recurring cost of EUR 1.3 million arising from the pension arrangement is included in employee-benefit expenses. CHANGE IN SHARE QUANTITIES * -------------------------------------------------------------------------------- | 1000 | 1-12/2009 | 1-12/2008 | -------------------------------------------------------------------------------- | Shares outstanding at the beginning of | 43 615 | 44 040 | | period | | | -------------------------------------------------------------------------------- | Share issue | | 75 | -------------------------------------------------------------------------------- | Purchase of treasury shares | | -500 | -------------------------------------------------------------------------------- | Number of shares outstanding at end of | 43 615 | 43 615 | | period | | | -------------------------------------------------------------------------------- * Excluding treasury shares held by the company The weighted average number of shares used in the calculation of earnings per share during the financial period was 43,614,787 (for January-December 2008, it was 43,775,710). The number of shares issued is 44,295,787. PERSONNEL BY SEGMENT, ON AVERAGE -------------------------------------------------------------------------------- | | 1-12/2009 | 1-12/2008 | -------------------------------------------------------------------------------- | Publishing Finland | 201 | 223 | -------------------------------------------------------------------------------- | Publishing Sweden | 176 | 187 | -------------------------------------------------------------------------------- | Direct marketing | 357 | 374 | -------------------------------------------------------------------------------- | Other | 20 | 19 | -------------------------------------------------------------------------------- | Continuing operations | 755 | 803* | -------------------------------------------------------------------------------- * The comparison data has been adjusted. CHANGES IN PROPERTY, PLANT AND EQUIPMENT -------------------------------------------------------------------------------- | EUR million | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Carrying amount at the beginning of | 1.6 | 6.6 | | period | | | -------------------------------------------------------------------------------- | Additions | 0.3 | 0.6 | -------------------------------------------------------------------------------- | Acquisitions through business | 0.0 | - | | combinations | | | -------------------------------------------------------------------------------- | Disposal of businesses | -0.0 | -4.5 | -------------------------------------------------------------------------------- | Depreciation | -0.7 | -1.0 | -------------------------------------------------------------------------------- | Carrying amount at the end of period | 1.3 | 1.6 | -------------------------------------------------------------------------------- CHANGES IN INTANGIBLE ASSETS -------------------------------------------------------------------------------- | EUR million | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Carrying amount at the beginning of | 31.3 | 44.4 | | period | | | -------------------------------------------------------------------------------- | Additions | 1.0 | 1.8 | -------------------------------------------------------------------------------- | Acquisitions through business | 7.6 | - | | combinations | | | -------------------------------------------------------------------------------- | Disposals | -0.5 | - | -------------------------------------------------------------------------------- | Disposal of businesses | - | -7.4 | -------------------------------------------------------------------------------- | Amortisation | -1.2 | -0.8 | -------------------------------------------------------------------------------- | Impairment | - | -2.9 | -------------------------------------------------------------------------------- | Carrying amount at the end of period | 39.7 | 31.3 | -------------------------------------------------------------------------------- RELATED PARTY TRANSACTIONS -------------------------------------------------------------------------------- | EUR million | 1-12/2009 | 1-12/2008 | -------------------------------------------------------------------------------- | Employee benefits for key management | 1.8 | 1.6 | -------------------------------------------------------------------------------- | Support payments to pension fund | 3.7 | 5.6 | -------------------------------------------------------------------------------- | Associates and joint ventures: | | | -------------------------------------------------------------------------------- | Sales | 0.3 | 0.2 | -------------------------------------------------------------------------------- | Liabilities | 0.5 | 0.5 | -------------------------------------------------------------------------------- GUARANTEES AND CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | EUR million | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Guarantees posted for own commitments | | | -------------------------------------------------------------------------------- | Financial institution loans | - | 0.5 | -------------------------------------------------------------------------------- | Book value of shares pledged | - | 2.3 | -------------------------------------------------------------------------------- | Business mortgage | - | 0.3 | -------------------------------------------------------------------------------- | Guarantees posted on behalf of | 0.2 | 0.2 | | commitments of associates | | | -------------------------------------------------------------------------------- | Guarantees posted on behalf of | 0.4 | 0.4 | | Talentum's pension fund | | | -------------------------------------------------------------------------------- Significant events after the reporting period Insurance policies administered by the Talentum Group's general pension fund were transferred to the Ilmarinen Pension Insurance Company on 1 January 2010, and the pension fund was placed in liquidation on the same day. The pension fund will be finally dissolved when the distribution of liabilities for pensions in 2009 is completed in November 2010. Calculation of key indicators Earnings per share = Income for the period attributable to equity owners of the parent / Adjusted average number of shares at the end of the period Equity per share = Equity attributable to the equity owners of the parent / Adjusted average number of shares at the end of the period Return on capital invested % = Income before taxes + interest and other financial expenses / Balance-sheet total - non-interest bearing debts (average of the figures at the start and end of the year) x 100 Return on equity % = Income for the financial period / Total equity (average of the figures at the start and end of the year) x 100 Equity ratio % = Total equity / Balance-sheet total - advances received x 100 Gearing % = Interest-bearing liabilities - cash and cash equivalents / Total equity x 100 Market capitalization = Number of shares at the end of the period x trading price at the end of the period The figures in this release are unaudited. General statement The forecasts and estimates presented here are based on the management's view of developments in the economy at this present moment, and the actual results may differ substantially from what the company now expects. Financial statements for 2010 Talentum is planning to publish interim reports for the first, second and third quarters on 28 April, 21 July and 27 October respectively. TALENTUM OYJ Juha Blomster CEO FURTHER INFORMATION Juha Blomster, CEO, tel. +358 (0)40 342 4444 Kaisa Kokkonen, CFO, tel. +358 (0)40 342 4212 COPIES TO: NASDAQ OMX Helsinki Key media BRIEFING A briefing in Finnish will be held for analysts and the media today, 11 February 2010 at 11.00 at the Talentum head office, Annankatu 34-36 B, Kamppi, Helsinki, Finland. The financial results will be presented by CEO Juha Blomster and CFO Kaisa Kokkonen. In addition, Mika Malin, Corporate Development Director, will present details of the businesses acquired by Talentum at the end of 2009, Sverige Bygger AB and Norge Bygges AS. Talentum Oyj Annankatu 34 - 36 B 00100 Helsinki, Finland Telephone: +358 (0)20 442 40 www.talentum.com
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