How would you describe Alma Media’s year 2015?
Considering the operating environment, I am satisfied with Alma Media’s development in 2015. The overall economic climate in Finland remained bleak, and the hoped-for improvement in media advertising volume, for example, still did not materialise. Nevertheless, we progressed as planned in the development of multi-channel media and services. In our international operations, we have found the path of profitable growth in our recruitment business.
What were Alma Media’s most important development steps in 2015?
Operationally, Alma Media is in better shape than ever. The company’s businesses are growing, and our growth is profitable. The strong growth of our recruitment business in Central Europe played a key role in the improvement of our operating profit excluding non-recurring items. The share of international operations of Alma Media’s result has increased significantly, with nearly half of our operating profit now coming from markets other than Finland. Our developing service business also plays a significant role in improving our operating profit excluding non-recurring items.
Our efforts to improve profitability in 2015 also included restructuring measures in our publishing operations: in particular in the Regional Media segment, we implemented efficiency improvement measures and even divested certain newspapers, but we also restructured operations in IL-Media.
Alma Media has been on the path of digital business development for two decades. It began in the mid-1990s with the launch of the online editions of Iltalehti and Kauppalehti. We reached a significant milestone last year with our revenue from digital products and services exceeding MEUR 100.
The most significant business transaction we made in 2015 was the acquisition of Talentum. The business operations of Alma Media and Talentum complement each other very well, which means that the combination creates a significant player in professional media and business services in both the Finnish and Swedish market. The integration of operations has got off to a good start.
To what extent did Alma Media achieve its financial targets in 2015?
Alma Media’s operating profit excluding non-recurring items improved in spite of the difficult economic climate. Much of the credit belongs to our recruitment business in Eastern Europe, which achieved strong growth. We have set new ambitious targets for ourselves, particularly with regard to the long-term growth of digital business and our return on investment (ROI). We fell short of our target of 15 per cent annual growth in digital business due to a sluggish start in digital advertising sales, especially in IL-Media. The improvement in our result was not yet sufficient to reach our long-term target for our return on investment (ROI), 15 per cent, particularly due to non-recurring items related primarily to cost adaptation measures in domestic publishing operations, especially in Regional Media, as well as impairment recognised in conjunction with impairment testing.
How has Alma Media responded to the forces of change in its operating environment?
The focus of media consumption is continuing to shift to digital channels, mobile in particular. The changes in media consumption saw marketers further reduce their investments in newspaper advertising. Digitalisation has also created a global advertising market. Foreign players already account for more than half of the Finnish digital advertising market.
Marketing communication and related technologies are changing at an accelerating rate. The past year saw significant growth in programmatic buying in Finland. We were able to tap this growing market, particularly in the second half of the year. The coverage of Alma Media’s mobile advertising network is already one of the most extensive in Finland, and the combination of Alma’s services with Talentum’s offering will expand it even further. We will focus on the programmatic buying of mobile advertising in addition to traditional direct sales solutions. We offer new and effective digital multimedia solutions to our customers. With Alma’s tools, advertisers can utilise data, analytics and user profile data from mobile sites and applications and target their campaigns effectively.
Our capacity to respond to changes in the operating environment is also strengthened by the fact that our strategic decisions have allowed us to diversify the geographical risk of our operations. While economic growth in Finland has declined to the point where it is one of the lowest in the EU, we have market presence in the countries that have been Europe’s fastest-growing national economies in recent years. Our extensive portfolio of brands also provides stability in our operations.
Alma Media has not remained a bystander in its rapidly changing operating environment. We have been an early mover in the digital transformation, which is why we now have a strong and active role in taking advantage of the ongoing changes.
What aspects of corporate responsibility development were most significant in 2015?
Last year, we continued our activities and co-operation to mitigate our environmental impacts, develop the competence of our employees and reduce youth unemployment. Corporate responsibility activities particularly highlighted the effects of journalism on society, responsible management of consumer data, the development of diversity and the local social responsibility of journalism.
The general instability of the economy is undermining Finnish media companies and, in the worst case, it will deplete our diverse media landscape. Without a functional, wide-ranging, pluralistic high-quality media, democracy cannot exist. Alma Media wants to combat this threat by improving our publications and services to respond to consumers’ needs even better - without compromising on the quality of content. In addition, responsible collection, use and storage of consumer data is always essentially important for Alma Media’s business. In 2015, we updated and redefined the key responsibility priorities of our operations in co-operation with external and internal stakeholders. The results of the materiality analysis guide us towards even stronger development of corporate responsibility in 2016. In addition, in 2015 we moved on reporting our sustainability themes based on GRI G4-reporting where applicable.
In 2015, we paid taxes amounting to approximately MEUR 50 in Finland.
What are Alma Media’s sources of growth in the future?
Alma Media has deep roots in Finnish society, with operations that can be traced back to the mid-1800s. We have been part of village communities and growing cities. We know Finland and its people. Internationalisation has also seen us become integrated into the Czech, Slovakian and Estonian societies and economies, to mention just a few. This puts us in a better position to produce more attractive and meaningful publications and services than many of our global competitors.
In product development and innovation, we must significantly increase our clock frequency. We must be agile in producing new services: planning and implementation must respond to current needs in a timely and flexible manner.
Alma Media will continue to move forward on the path of sustainable growth. Our strategy is to leverage the opportunities presented by digitalisation to actively develop and grow our existing products and services, while strengthening our existing business areas through acquisitions. We seek to increase our net sales and market shares, particularly in digital media and services in Finland, and to expand our international business operations. We will take advantage of our strong financial position and seek new business initiatives with a focus on digital business.