2015-05-04 13:30:00 CEST
2015-05-04 13:30:02 CEST
REGULATED INFORMATION
Ilkka-Yhtymä Oyj - Interim report (Q1 and Q3)
Ilkka-Yhtymä Oyj's Interim Report 1 January - 31 March 2015
Ilkka-Yhtymä Oyj Interim Report 4 May 2015, at 2:30pm
ILKKA-YHTYMÄ OYJ'S INTERIM REPORT 1 JANUARY-31 MARCH 2015
- Net sales: EUR 10,078 thousand (EUR 10,143 thousand)
- Operating profit: EUR 1,071 thousand (EUR 1,193 thousand)
- Operating profit excluding Alma Media Corporation and the other associated
companies amounted to EUR 680 thousand (EUR 666 thousand)
- Operating profit totalled 10.6% of net sales, or 6.7% excluding Alma Media
and other associated companies (6.6%)
- Pre-tax profits: EUR 875 thousand (EUR 711 thousand)
- Earnings per share: EUR 0.03 (EUR 0.03)
- Eguity ratio 50.0%
NET SALES AND PROFIT PERFORMANCE
The Group's consolidated net sales for January-March showed a 0.6% decline. Net
sales came to EUR 10,078 thousand (EUR 10,143 thousand). External net sales
from the publishing business fell by 2.8%. Advertising revenues fell by 2.9%
and circulation revenues fell by 2.5%. External net sales from the printing
business increased by 14.3%. Circulation income accounted for 47% of
consolidated net sales, while advertising income and printing income
represented 39% and 14%, respectively. Other operating income in January-March
totalled EUR 154 thousand (EUR 115 thousand).
Operating expenses for January-March amounted to EUR 9,565 thousand (EUR 9,591
thousand), down by 0.3% year on year. Expenses arising from materials and
services increased by 5.5%. Personnel expenses decreased by 2.9%. Other
operating costs decreased by 0.3%. Depreciation contracted by 13.9%.
The share of the associated companies' result was EUR 391 thousand (EUR 527
thousand). Consolidated operating profit amounted to EUR 1,071 thousand (EUR
1,193 thousand), down by 10.2 per cent year-on-year. The Group's operating
margin was 10.6 per cent (11.8%). Operating profit excluding Alma Media
Corporation and the other associated companies amounted to EUR 680 thousand
(EUR 666 thousand), representing 6.7% (6.6%) of net sales. Operating profit
from publishing grew by EUR 56 thousand, and operating profit from printing
fell by EUR 101 thousand.
Net financial expenses for January-March amounted to EUR 196 thousand (EUR 482
thousand). Interest expenses excluding the fair value change in derivatives
hedging them totalled EUR 349 thousand (EUR 434 thousand). In order to hedge
against interest rate risk, the company has transformed some of its
floating-rate liabilities into fixed-rate liabilities, by means of interest
rate swaps. Given that the Group does not apply hedge accounting, unrealised
changes in the market value of the interest rate swaps are recognised through
profit or loss. In January-March 2015, the market value of these interest rate
swaps fell by EUR 44 thousand (in January-March 2014, the market value grew by
EUR 8 thousand). Net gain/loss on shares held for trading was EUR 199 thousand
(EUR -59 thousand).
Pre-tax profits totalled EUR 875 thousand (EUR 711 thousand). Direct taxes
amounted to EUR 91 thousand (EUR 36 thousand), and the Group's net profit for
the period totalled EUR 784 thousand (EUR 675 thousand).
BALANCE SHEET AND FINANCING
The consolidated balance sheet total came to EUR 137,176 thousand (EUR 140,003
thousand), with EUR 65,403 thousand (EUR 58,756 thousand) of equity. On the
reporting date of 31 March 2015, the balance sheet value of the holding in the
associated company Alma Media Corporation was EUR 102,303 thousand and the
market value of the shares was EUR 64,544 thousand. According to the
management's estimate, write-down in this holding is unnecessary.
Interest-bearing liabilities totalled EUR 56,938 thousand (EUR 66,381
thousand). The equity ratio was 50.0 per cent (44.1%), and shareholders' equity
per share was EUR 2.55 (EUR 2.29). The increase in financial assets for the
period totalled EUR 5,405 thousand (EUR 2,163 thousand), with liquid assets at
the end of the period totalling EUR 10,939 thousand (EUR 4,144 thousand).
Cash flow from operations for the period came to EUR 2,832 thousand (EUR 2,718
thousand). Cash flow from investments totalled EUR 2,573 thousand (EUR -552
thousand), including capital repayment from Alma Media Corporation in the
amount of EUR 2,699 thousand.
PERSONNEL
The Group had an average of 294 (304) employees during the period.
On 30 January 2015, Ilkka-Yhtymä Group announced that the Group's publishing
company I-Mediat Oy and the printing house I-print Oy will start cooperation
negotiations. The negotiations mainly concerned provincial newspapers'
technical production and media sales personnel and the personnel of the
printing press. The purpose of the negotiations was to adjust the operations
and the amount of personnel to the requirements of increasingly digital
operations and reducing volumes.
As a result of the negotiations, I-Mediat Oy will cut seven posts and lay off
its advertisement production personnel for a maximum of three weeks. I-print Oy
will lay off its printing press personnel for a maximum of five weeks.
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
Helsinki List, in the Consumer Services sector, the company's market value
being classified as Small Cap. The Series I shares are listed on the Pre List.
In January-March, 31,151 series-I shares of Ilkka-Yhtymä Oyj were traded,
accounting for 0.7 per cent of the total number of series-I shares. The total
value of the shares exchanged was EUR 91 thousand. In total, 951,085 series-II
shares were traded, corresponding to 4.5 per cent of the total number of series
II shares. The total value of the shares traded was EUR 2,123 thousand. The
lowest price at which series-I shares of Ilkka-Yhtymä Oyj were traded during
the period under review was EUR 2.20, and the highest per-share price was EUR
3.49. The lowest price at which series-II shares were traded was EUR 1.92 and
the highest EUR 2.50. The market value of the share capital at the closing rate
for the reporting period was EUR 65,343 thousand.
RISKS AND RISK MANAGEMENT
In the current economic climate, major uncertainties are associated with the
predictability of both net sales and operating profit. Ilkka-Yhtymä's most
significant short-term risks are related to the development of media
advertising, in particular, as well as circulation and printing volumes, which
affect the industry in general. The risks in the industry are due to its
digitalisation and the continuing poor economic conditions. Other risks
associated with the Group's own operations and its holding in associated
company Alma Media Corporation are described in more detail in the Annual
Report 2014.
The Group's major financial risks include credit risk of the Group's operative
business, the risk associated with the price of shares held for trading, the
risk of changes in market interest rates applied to the loan portfolio and
liquidity risk. In order to hedge against interest rate risk, the company has
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 2014
Annual Report.
EVENTS AFTER THE REPORT PERIOD
ANNUAL GENERAL MEETING DECISIONS
On 22 April 2015, the Annual General Meeting (AGM) of Ilkka-Yhtymä Oyj approved
the financial statements, discharged the members of the Supervisory Board and
the Board of Directors and the Managing Director from liability and decided
that a per-share dividend of EUR 0.10 be paid for the year 2014.
The number of members on the Supervisory Board for 2015 was confirmed to be 24.
Of the Supervisory Board members whose term had come to an end, the following
were re-elected for the term ending in 2019: Lasse Hautala, Satu Heikkilä,
Perttu Rinta, Ari Rinta-Jouppi, Minna Sillanpää and Jorma Vierula.
At the Annual General Meeting it was decided to maintain the payments made to
the Chairman of the Supervisory Board and the board members at their current
level: the Chairman will receive a retainer of EUR 1,500 per month and a fee of
EUR 400 per meeting, and the board members will be paid a fee of EUR 400 per
meeting attended. The board members' travel expenses are reimbursed in
accordance with the current maximum level specified by the tax authorities.
Ernst & Young Oy, Authorised Public Accountants, was elected as the auditor,
with Authorised Public Accountant, M.Sc.(Econ.) Harri Pärssinen as the
principal auditor. It was decided that the auditors would be reimbursed per the
invoice.
The AGM authorised the Board of Directors to decide upon a share issue and/or
granting stock options and/or other special rights and upon their conditions.
The maximum number of Series II shares issued under the authorisation is
7,700,000, corresponding to around 30 per cent of the company's total shares
and 36.05 per cent of Series II shares at present. This authorisation includes
the right to issue shares and/or stock options and/or other special rights as
distinct from the shareholders' pre-emptive rights, under conditions prescribed
by law, and the right to decide upon a free issue to the company itself. The
authorisation is valid for five years from the date of the AGM's decision.
The AGM authorised the Board of Directors to decide upon a donation to be put
toward charitable causes or similar, totalling, at maximum, EUR 50,000, as well
as to decide upon the recipients, purposes of use, schedules and other terms of
these donations.
OUTLOOK FOR 2015
In the current economic climate, forecasting net sales in the media sector and,
in particular, media advertising spending involves still major uncertainties.
Media advertising in Finland is expected to remain roughly at the previous
year's level. Due to caution among consumers as well as competition in the
media market, newspaper circulation income is forecast to decline slightly.
Printing business volumes have shrunk in Finland and the trend is expected to
continue in 2015.
Group net sales and operating profit from Ilkka-Yhtymä's own operations,
excluding the share of Alma Media's and other associated companies' results,
are expected to remain roughly the same as in 2014.
The associated company Alma Media Corporation (Group ownership 29.79%) will
have a significant impact on Group operating profit and profit.
SUMMARY OF FINANCIAL STATEMENTS AND NOTES
DRAFTING PRINCIPLES
Ilkka-Yhtymä Group's interim report was prepared in accordance with the
requirements of the IAS 34 Interim Financial Reporting standard.
The interim report has been prepared according to the same principles as the
2014 financial statements. The principles and formulae for the calculation of
the indicators, presented on page 63 of the 2014 annual report, remain
unchanged.
All the figures in the interim report are rounded, so the sum of separate
figures may differ from that presented in the report.
The figures in the interim report have been presented unaudited.
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2015 2014 2014
NET SALES 10 078 10 143 -1 % 41 802
Change in inventories of finished and 12 -2 720 % -3
unfinished products
Other operating income 154 115 34 % 454
Materials and services -3 392 -3 215 6 % -13 379
Employee benefits -4 380 -4 510 -3 % -16 782
Depreciation -421 -489 -14 % -1 856
Other operating costs -1 372 -1 377 -5 302
Share of associated companies' profit 391 527 -26 % 4 318
OPERATING PROFIT/ LOSS 1 071 1 193 -10 % 9 251
Financial income and expenses -196 -482 59 % 883
PROFIT/ LOSS BEFORE TAX 875 711 23 % 10 133
Income tax -91 -36 151 % -1 063
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW 784 675 16 % 9 070
Earnings per share, undiluted (EUR) *) 0.03 0.03 16 % 0.35
The undiluted share average (to the nearest 25 665 25 665 25 665
thousand) *)
*) There are no factor diluting the figure.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2015 2014 2014
PROFIT/ LOSS FOR THE PERIOD UNDER REVIEW 784 675 16 % 9 070
OTHER COMPREHENSIVE INCOME:
Items that may be reclassified subsequently to profit
or loss:
Available-for-sale assets
Measured at fair value 2 1 260 % -24
Transferred to the income statement 11 2 439 % 126
Share of associated companies' other comprehensive 103 -12 963 % -173
income
Income tax related to components of other -1 -20
comprehensive income
Other comprehensive income, net of tax 115 -10 1266 % -91
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 899 665 35 % 8 979
SEGMENT INFORMATION
NET SALES BY SEGMENT
(EUR 1,000) 1-3/2015 1-3/2014 Change 1-12/2014
Publishing
External 8 629 8 875 -3 % 36 330
Inter-segments 30 25 21 % 83
Publishing total 8 658 8 900 -3 % 36 413
Printing
External 1 449 1 268 14 % 5 472
Inter-segments 1 575 1 686 -7 % 6 861
Printing total 3 024 2 954 2 % 12 333
Non-allocated
Inter-segments 554 560 -1 % 2 231
Non-allocated total 554 560 -1 % 2 231
Elimination -2 159 -2 271 -5 % -9 175
Group net sales total 10 078 10 143 -1 % 41 802
OPERATING PROFIT/ LOSS BY SEGMENT
(EUR 1,000) 1-3/2015 1-3/2014 Change 1-12/2014
Publishing 554 499 11 % 3 481
Printing 230 330 -31 % 1 749
Associated companies 391 527 -26 % 4 318
Non-allocated -104 -163 36 % -297
Group operating profit/ loss total 1 071 1 193 -10 % 9 251
ASSETS BY SEGMENT
(EUR 1,000) 3/2015 3/2014 Change 12/2014
Publishing 14 239 14 304 8 826
Printing 9 253 9 999 -7 % 8 674
Non-allocated 113 685 115 700 -2 % 113 036
Group assets total 137 176 140 003 -2 % 130 536
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 3/2015 3/2014 Change 12/2014
ASSETS
NON-CURRENT ASSETS
Intangible rights 621 708 -12 % 629
Goodwill 314 314 314
Investment properties 142 173 -18 % 147
Property, plant and equipment 9 960 11 210 -11 % 10 230
Shares in associated companies 103 105 101 758 1 % 105 310
Available-for-sale assets 2 945 10 541 -72 % 2 953
Non-current trade and other receivables 567 567 567
Other tangible assets 214 214 214
TOTAL NON-CURRENT ASSETS 117 869 125 486 -6 % 120 364
Current assets
Inventories 551 584 -6 % 523
Trade and other receivables 6 144 8 201 -25 % 2 876
Income tax assets 396 396 150
Financial assets at fair value 1 278 1 192 7 % 1 089
through profit or loss
Cash and cash equivalents 10 939 4 144 164 % 5 534
TOTAL Current assets 19 307 14 517 33 % 10 172
Total assets 137 176 140 003 -2 % 130 536
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDER'S EQUITY
Share capital 6 416 6 416 6 416
Invested unrestricted equity fund and other 48 729 48 637 48 716
reserves
Retained earnings 10 257 3 703 177 % 9 371
SHAREHOLDER'S EQUITY 65 403 58 756 11 % 64 503
NON-CURRENT LIABILITIES
Deferred tax liability 148 197 -25 % 178
Non-current interest-bearing liabilities 54 559 61 634 -11 % 54 549
Non-current interest-free liabilities 75 88 -15 % 75
NON-CURRENT LIABILITIES 54 781 61 919 -12 % 54 801
CURRENT LIABILITIES
Current interest-bearing liabilities 2 379 4 747 -50 % 2 387
Accounts payable and other payables 13 955 14 222 -2 % 8 340
Income tax liability 659 359 84 % 504
CURRENT LIABILITIES 16 992 19 328 -12 % 11 232
SHAREHOLDERS' EQUITY AND LIABILITIES TOTAL 137 176 140 003 -2 % 130 536
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-3/ 1-3/ 1-12/
2015 2014 2014
CASH FLOW FROM OPERATIONS
Profit/ loss for the period under review 784 675 9 070
Adjustments 313 454 -2 334
Change in working capital 2 165 2 052 -486
CASH FLOW FROM OPERATIONS 3 262 3 180 6 250
BEFORE FINANCE AND TAXES
Interest paid -221 -208 -1 649
Interest received 5 6 31
Dividends received 8 8 55
Other financial items -11 -11 -45
Direct taxes paid -212 -257 -932
CASH FLOW FROM OPERATIONS 2 832 2 718 3 710
CASH FLOW FROM INVESTMENTS
Investments in tangible and -133 -111 -352
intangible assets, net
Capital repayment received 2 699 2 249
Other investments -29
Proceeds from sale of other investments 8 126 10 056
Granted loans -567 -567
Dividends received from investments 484
CASH FLOW FROM INVESTMENTS 2 573 -552 11 841
CASH FLOW BEFORE FINANCING ITEMS 5 405 2 166 15 551
CASH FLOW FROM FINANCING
Change in current loans -3 561
Change in non-current loans -5 889
Dividends paid and other profit distribution -3 -2 548
CASH FLOW FROM FINANCING -3 -11 998
INCREASE (+) OR DECREASE (-)IN FINANCIAL ASSETS 5 405 2 163 3 553
Liquid assets at the beginning of the financial period 5 534 1 980 1 980
Liquid assets at the end of the financial period 10 939 4 144 5 534
KEY FIGURES
3/2015 3/2014 12/2014
Earnings/share (EUR) 0.03 0.03 0.35
Shareholders' equity/share (EUR) 2.55 2.29 2.51
Average number of personnel 294 304 311
Investments (EUR 1,000) *) 140 150 464
Interest-bearing debt (EUR 1,000) 56 938 66 381 56 936
Equity ratio, % 50.0 44.1 50.2
Net gearing, % 68.4 103.9 78.0
Average number of shares during the 25 665 208 25 665 208 25 665 208
financial period
Number of shares at the end on the financial 25 665 208 25 665 208 25 665 208
period
*) Includes investments in tangible and intangible assets and shares in
associated companies and in available-for-sale financial assets.
Taxes included in the income statement are taxes corresponding to the profit
for the period under review.
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY (EUR 1,000)
Change in Share Fair Invested Other Retain Total
shareholders' equity capita value unrestricted reserv ed
1-3/ 2014 l reserv equity fund es earnin
e gs
SHAREHOLDERS' EQUITY 6 416 113 48 498 24 3 040 58 091
1.1.
Comprehensive income 2 663 665
for the period
TOTAL SHAREHOLDERS' 6 416 115 48 498 24 3 703 58 756
EQUITY 3/2014
Change in Share Fair Invested Other Retain Total
shareholders' equity capita value unrestricted reserv ed
1-3/ 2015 l reserv equity fund es earnin
e gs
SHAREHOLDERS' EQUITY 6 416 194 48 498 24 9 371 64 503
1.1.
Comprehensive income 12 887 899
for the period
TOTAL SHAREHOLDERS' 6 416 207 48 498 24 10 257 65 403
EQUITY 3/2015
GROUP CONTINGENT LIABILITIES
(EUR 1,000) 3/2015 3/2014 12/2014
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 52 694 51 042 50 491
Contingent liabilities on behalf of associated company
Guarantees 3 961 4 059 3 961
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
(EUR 1,000) 1-3/ 1-3/ Change 1-12/
2015 2014 2014
Carrying amount at the beginning of the 10 230 11 459 -11 % 11 459
financial period
Increase 88 147 -40 % 294
Decrease -1 -4
Depreciation for the financial period -357 -396 -10 % -1 519
Carrying amount at the end of the financial 9 960 11 210 -11 % 10 230
period
RELATED PARTY TRANSACTIONS
Ilkka-Yhtymä Group's related parties include associated companies, members of
the Board of Directors, members of the Supervisory Board, the Managing Director
and the Group Executive Team.
THE FOLLOWING RELATED PARTY TRANSACTIONS WERE CARRIED OUT:
(EUR 1,000) 1-3/2015 1-3/2014 1-12/2014
Sales of goods and services
To associated companies 58 56 256
To other related parties 198 173 837
Purchases of goods and services
From associated companies 73 125 335
From other related parties 2 2 4
Non-current loan receivables from associated 567 567 567
companies
Trade and other receivables
From associated companies 45 10 53
From other related parties 81 42 16
Accounts payable
To associated companies 23 61 8
Transactions with related parties are conducted at fair market prices.
EMPLOYEE BENEFITS TO MANAGEMENT
(EUR 1,000) 1-3/2015 1-3/2014 1-12/2014
Salaries and other short-term employee benefits 226 293 1 005
Management comprises the Board of Directors, Supervisory Board, Managing
Director and Group Executive Team. The stated figures based on the cash method
do not differ significantly from those based on the accrual method.
FAIR VALUE HIERARCHY OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES MEASURED AT
FAIR VALUE
Fair value at end of period
(EUR 1,000) 3/2015 Level 1 Level 2 Level 3
ASSETS MEASURED AT FAIR VALUE
Financial assets at fair value through profit 1 278 1 278
or loss
Available-for-sale financial assets 1 525 1 525
TOTAL 2 803 1 278 1 525
LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps 1 848 1 848
TOTAL 1 848 1 848
Fair value at end of period
(EUR 1,000) 3/2014 Level 1 Level 2 Level 3
ASSETS MEASURED AT FAIR VALUE
Financial assets at fair value through profit 1 192 1 192
or loss
Available-for-sale financial assets 9 122 9 122
TOTAL 10 313 1 192 9 122
LIABILITIES MEASURED AT FAIR VALUE
Interest rate swaps 1 693 1 693
TOTAL 1 693 1 693
Available-for-sale assets also include EUR 1,420 thousand for unlisted shares
(EUR 1,419 thousand in 3/2014), which are measured at cost since no reliable
fair value was available for them.
At Level 1 of the hierarchy, fair value is based on quoted prices (unadjusted)
in active markets for identical assets or liabilities.
At Level 2, the instruments' fair value is based on inputs other than quoted
prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
At Level 3, the instruments' fair value is based on inputs for the asset or
liability that are not based on observable market data.
General statement
This report contains certain statements that are estimates based on the
management's best knowledge at the time they were made. For this reason, they
involve a certain amount of inherent risk and uncertainty. The estimates may
change in the event of significant changes in general economic and business
conditions.
ILKKA-YHTYMÄ OYJ
Board of Directors
Matti Korkiatupa
Managing Director
For more information:
Matti Korkiatupa, Managing Director, Ilkka-Yhtymä Oyj
Tel. +358 (0)500 162 015
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