Alma Media Corporation Interim Report 18 October 2024 at 8 a.m.
ALMA MEDIA'S INTERIM REPORT JANUARY-SEPTEMBER 2024: Adjusted operating profit increased by 6.7% in Q3, boosted by the Marketplaces and News Media segments
Financial performance July-September 2024:
- Revenue MEUR 75.2 (73.4), up 2.4%.
- Digital business accounted for 86.2% (83.9%) of revenue.
- Adjusted operating profit was MEUR 21.9 (20.5), or 29.1% (27.9%) of revenue.
- Operating profit MEUR 21.5 (20.8), up 3.6%.
- Alma Career: Revenue in local currencies declined by 1.6%, development investments in the common platform continued.
- Alma Marketplaces: Revenue and adjusted operating profit increased both organically and supported by acquisitions.
- Alma News Media: Adjusted operating profit increased due to lower print-related expenses.
- Earnings per share EUR 0.18 (0.19).
Financial performance January-September 2024:
- Revenue MEUR 231.5 (226.9), up 2.0%.
- Digital business accounted for 84.5% (82.8%) of revenue.
- Adjusted operating profit was MEUR 57.4 (56.9), or 24.8% (25.1%) of revenue.
- Operating profit MEUR 55.7 (57.2), down 2.5%.
- Earnings per share EUR 0.49 (0.55).
Key figures
| MEUR | 2024 Q3 | 2023 Q3 | Change % | 2024 Q1-Q3 | 2023 Q1-Q3 | Change % | 2023 Q1-Q4 |
| Revenue | 75.2 | 73.4 | 2.4 | 231.5 | 226.9 | 2.0 | 304.9 |
| Classified | 30.7 | 30.5 | 0.8 | 92.4 | 92.8 | -0.4 | 122.4 |
| Advertising | 12.9 | 14.0 | -7.8 | 43.5 | 46.9 | -7.3 | 64.9 |
| Digital services | 14.6 | 11.5 | 26.9 | 42.0 | 33.0 | 27.5 | 43.9 |
| Content | 12.2 | 12.5 | -2.3 | 37.4 | 37.7 | -0.9 | 50.5 |
| Other | 4.7 | 4.9 | -4.0 | 16.2 | 16.5 | -2.0 | 23.2 |
| Digital business revenue | 64.8 | 61.6 | 5.2 | 195.5 | 187.8 | 4.1 | 251.2 |
| Digital business, % of revenue | 86.2 | 83.9 | 84.5 | 82.8 | 82.4 | ||
| Adjusted total expenses | 53.4 | 53.0 | 0.8 | 174.4 | 170.2 | 2.4 | 231.8 |
| Adjusted EBITDA | 26.3 | 24.9 | 5.6 | 70.1 | 70.0 | 0.3 | 91.0 |
| EBITDA | 26.0 | 25.2 | 3.1 | 68.5 | 70.2 | -2.5 | 90.6 |
| Adjusted operating profit | 21.9 | 20.5 | 6.7 | 57.4 | 56.9 | 0.9 | 73.6 |
| % of revenue | 29.1 | 27.9 | 24.8 | 25.1 | 24.1 | ||
| Operating profit/loss | 21.5 | 20.8 | 3.6 | 55.7 | 57.2 | -2.5 | 73.0 |
| % of revenue | 28.6 | 28.3 | 24.1 | 25.2 | 23.9 | ||
| Profit for the period before tax | 18.8 | 19.7 | -4.5 | 50.5 | 57.0 | -11.5 | 68.5 |
| Profit for the period | 15.1 | 15.4 | -1.9 | 40.5 | 45.8 | -11.5 | 56.4 |
CEO's review: Profitability improved in a subdued operating environment
Alma Media's business developed favourably in the third quarter. Revenue increased by 2.4% to MEUR 75.2. Revenue was supported by acquisitions, but the weakened exchange rate of the Czech koruna dampened revenue performance. Domestic advertising sales decreased by 2.7%.
Adjusted operating profit improved by 6.7% to MEUR 21.9, reaching a record-breaking 29.1% of revenue. The share of total revenue represented by digital business also rose to a record high level of 86.2%. We continued to invest in the development of our services, particularly in the Career and Marketplaces segments.
There are also some positive signs in the market. Inflation is decreasing and the ECB started to lower its key interest rate, which will help strengthen consumer confidence in their finances and promote households' opportunities to make purchases of durable consumer goods, such as homes and cars.
We accelerated our investments in product development
In the Alma Career segment, revenue decreased by 4.1% and amounted to MEUR 26.3. Adjusted operating profit decreased by 5.5% to MEUR 11.3 and was 43.2% of revenue. In local currencies, revenue decreased by 1.6% and adjusted operating profit by 2.6%. In the third quarter, the development of invoicing in local currencies was on a par with the comparison period (the development of invoicing in local currencies was -4.9% in Q1 and -1.2% in Q2). The development costs associated with the segment's common platform had a negative effect on profitability.
There were again significant differences in the labour market cycle between the segment's operating countries. Among the significant operating countries, the situation in the Czech Republic remained unchanged, with small and medium-sized employers engaging in recruitment while the largest customer companies maintained a more cautious approach. The lively recruitment markets in Slovakia continued to be driven by the high level of activity among job-seekers, intense competition for skilled labour and low unemployment. The situation in the Baltic countries and Finland remained challenging.
In the Alma Marketplaces segment, revenue increased by 16.6% to MEUR 24.5 in the third quarter, supported by the acquisition of Netwheels. Adjusted operating profit increased by 15.5% to MEUR 8.6 and was 35.3% of revenue. Organic revenue growth was 5.5%.
Revenue from the Mobility business area increased by 48.4% to MEUR 8.7 (5.9). Excluding the effect of acquisitions and divestments, revenue increased by 8.9%. There were initial signals of a recovery in the housing market. Revenue in the Real Estate business area increased by 10.7%, driven by the growth of digital services and business premises marketplaces.
Due to acquisitions, expenses in the Marketplaces segment increased by 17.4%. In spite of the weak market conditions, we continued to implement our development projects, particularly in digital services related to the automotive and housing verticals, focusing on the development of transactional business.
The integration of Netwheels into the segment's business has progressed well. The acquisition complements the automotive and mobility services offered to our corporate customers, streamlines vehicle purchase and sales processes, and supports the development of the marketplace and systems business.
The Alma News Media segment's revenue decreased by 2.2% to MEUR 24.5 due to a 2.4% decline in advertising, but active cost management meant that the segment's adjusted operating profit improved to 16.4% (13.8%) of revenue, which represents strong accomplishment in the media business even by international comparison.
Alma News Media announced change negotiations to ensure its long-term competitiveness. The aim of the negotiations is to carry out a strategic assessment of Kauppalehti Optio, Fakta and Mediuutiset, and reorganise the work in parts of the editorial departments.
The economic conditions remain challenging for Finnish media in spite of high general interest in the news. The number of subscribers to the Iltalehti Plus service increased by 18% to 55,580. The share of digital business of revenue increased and was above 60%.
The world is changing with artificial intelligence, and so are we
The three cornerstones of our strategy are transformation, growth and scalability. We make the necessary investments in competence and technology in order to produce solutions that leverage AI and improve processes in our customers' value chains, and to respond to the changing needs of our customers and partners.
We already make extensive use of AI in our own operations. The Group currently has over 50 projects under way with the aim of taking advantage of AI. These projects will improve productivity and efficiency in our existing processes, complement our existing services with AI-driven components, and ultimately introduce completely new AI-based business concepts to the market. We have a high level of preparedness, capabilities and motivation for continuous renewal.
Kai Telanne
President and CEO
Operating environment
In its most recent economic forecast, the European Commission projected economic growth of 1.0% in the EU for 2024. The Commission further expects inflation to slow to 2.7%. For the Finnish economy, the Commission projects zero growth, inflation of 1.4% and an unemployment rate of 7.4% this year.
Inflation has stabilised in the eurozone this year and the ECB has already twice reduced its deposit facility rate, which it uses to adjust the monetary policy framework. The expectation is that credit conditions will gradually improve and housing construction will recover slowly. At the same time, however, geopolitical risks have elevated again.
At the end of 2023, in the 20-64 age group in the EU, the activity rate was 80.1%, the employment rate was 75.5% and the unemployment rate was 6.0%.
In addition to Finland, Alma Media's main markets are the Czech Republic and Slovakia in Eastern Central Europe, and Croatia in Southern Europe. The Commission projects that, in 2024, the GDP growth rate will be 1.2% in the Czech Republic, 2.2% in Slovakia and 3.3% in Croatia. The Commission's unemployment rate projections are 2.8% for the Czech Republic, 5.4% for Slovakia and 5.8% for Croatia.
Outlook for 2024 (unchanged)
Alma Media expects its full-year revenue and adjusted operating profit of 2024 to remain at the 2023 level. The full-year revenue for 2023 was MEUR 304.9 and the adjusted operating profit was MEUR 73.6.
Background for the outlook
The outlook is based on an estimate that there will be no material changes to the prevailing situation in the company's main market areas. In the countries where the company operates, forecasts for national economies have been adjusted downwards due to weak development in the early part of the year, which has continued to be reflected in the development of the recruitment market.
In Finland, demand and employment are expected to remain unchanged, and there is continued uncertainty around advertising. Acquisitions will increase the company's revenue and operating profit. The diversification of the Group's business activities between multiple geographical markets and business areas, and purposeful cost control, stabilise the company's outlook even in challenging market conditions.
Market situation in the main markets in Finland
Market development in the automotive industry
According to statistics provided by the Finnish Information Centre of the Automobile Sector, first registrations of new passenger cars in Finland decreased in January-September by 19.1% when compared to the previous year. In January-September, sales of used passenger cars by car dealerships increased by approximately 5%.
Market development in housing
Across Finland in September, a total of 4,468 transactions for old dwellings (+10.3% year-on-year) and 135 sales of new dwellings (-32.5%), or a total of 4,603 housing transactions (+8.3%), were reported to the KVKL price monitoring service maintained by the Central Federation of Finnish Real Estate Agencies. According to the Central Federation of Finnish Real Estate Agencies, the slow housing market has been boosted by inflation levelling off, interest rates falling, asset transfer tax being reduced and housing prices declining. This year, 1,000 more dwellings have been sold through real estate agents than in the corresponding period last year, even though Q1/2024 was historically weak. The number of old dwellings sold in Q3 (13,730 dwellings) represented a 13.6% increase year-on-year, but was still 17.4% below the five-year average. The number of new dwellings sold in Q3 (407 dwellings) was 22.2% below the 2023 level and 78.9% below the five-year average.
Market development in the media business
According to Kantar TNS, the total media advertising volume in January-August 2024 decreased by 2.8%. Among the media categories, outdoor advertising and TV advertising increased their share.
In the period under review, the sectors with the highest increases in media advertising when compared to January-August 2023 were cosmetics, food and telecommunication services. The sectors with the sharpest decreases in advertising were construction, oil and energy. Job advertising decreased by 28.2% in August in Finland which is currently the most up-to-date available information.
More information:
Kai Telanne, President and CEO, tel. +358 (0)10 665 3500
Taru Lehtinen, CFO, tel. +358 (0)10 665 3609
News conference and live webcast
Alma Media will publish its Interim Report for 1 January-30 September 2024 on Friday, 18 October 2024 approximately at 8.00 EEST. An analyst and investor webcast will be held in English by President & CEO Kai Telanne and CFO Taru Lehtinen at 11.00-12.00.
The conference will be held in the Alma House (address: Alvar Aallon katu 3 C, Helsinki). To participate in the conference in Alma House, we kindly ask you to register beforehand by e-mail to: kutsut@almamedia.fi.
The live webcast can be followed via https://almamedia.videosync.fi/q3-2024/register. Questions can be asked through the webcast chat function.
An on-demand version of the webcast and the presentation material will be available on the company's website on the same day www.almamedia.fi/en/investors/reports-and-presentations/presentations.
Alma Media's financial calendar 2025
- Financial Statements Bulletin for the financial year 2024 on Wednesday, 5 February 2025 at approximately 8:00 EET
- Interim Report for January-March 2025 on Friday, 25 April 2025, at approximately 8:00 EET
- Interim Report for January-June 2025 on Thursday, 17 July 2025, at approximately 8:00 EET
- Interim Report for January-September 2025 on Friday, 31 October 2025 at approximately 8:00 EET
- The Financial Statements, Report by the Board of Directors, Auditor's Report and Corporate Governance Statement for the financial year 2024 will be published by Thursday, 20 March 2025.
- The Annual General Meeting is planned to be held on Thursday, 10 April 2025. The materials related to the Annual General Meeting will be available on the Alma Media website.
ALMA MEDIA CORPORATION
Board of Directors
Distribution: NASDAQ Helsinki, main media, www.almamedia.fi/en
Alma Media in brief
Alma Media is an international company of digital media, marketplaces and services with a strong capacity for renewal. We inspire human curiosity and choice by creating services that combine technology and content with a local heart. In Finland, our best-known brands include Kauppalehti, Talouselämä, Iltalehti, Jobly, Etuovi.com, Nettiauto and Nettimoto. Our recruitment services include prace.cz and jobs.cz in the Czech Republic, Profesia.sk in Slovakia and mojposao.net in Croatia.
In Finland, our business operations include leading housing and automotive marketplaces, financial and professional media, national consumer media and content and data services for businesses and professionals. Alma Media's international business in Eastern Central Europe, Sweden and the Baltic countries consists of recruitment services and an online marketplace for commercial properties.
Alma Media operates in 11 countries in Europe and employs approximately 1,700 professionals. Alma Media's revenue from continuing operations was EUR 305 million in 2023 of which the share of digital business was 82%. Alma Media's share is listed on NASDAQ Helsinki. Read more at www.almamedia.fi/en/.
