Alma Media’s Financial Statements Release 2015: Operating profit excluding non-recurring items increased, EPS down due to non-recurring items

Alma Media Corporation  Financial Statements Release  12 February 2016 at 8:00
a.m. (EET)

Alma Media’s Financial Statements Release 2015:

OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS INCREASED, EPS DOWN DUE TO NON
-RECURRING ITEMS

Financial performance October–December 2015:

– Revenue was MEUR 78.6 (76.6), up 2.6%.

– Online sales increased by 17.7% to MEUR 29.1 (24.7).

– EBITDA (Earnings before interest, taxes, depreciation and amortisation)

excluding non-recurring items was MEUR 10.8 (8.9), up 21.5%.

– EBITDA was MEUR 6.1 (10.1), down 40.1%.

– Operating profit excluding non-recurring items was MEUR 7.1 (5.6) or 9.0%
(7.3%) of revenue, up 26.3%.

– Operating profit MEUR 0.9 (4.8) or 1.1% (6.3%) of revenue, down 81.5%.

– The operating profit includes non-recurring items of MEUR -6.2 (-0.8).

– Profit for the period was MEUR 0.3 (4.0), down 93.7%.

– Earnings per share were EUR 0.00 (0.05).

Financial performance full year 2015:

– Revenue was MEUR 291.5 (295.4), down 1.3%.

– Online sales increased by 8.7% to MEUR 102.8 (94.5).

– EBITDA (Earnings before interest, taxes, depreciation and amortisation)
excluding non-recurring items

was MEUR 37.4 (35.1), up 6.5%.

– EBITDA was MEUR 34.5 (36.4), down 5.1%.

– Operating profit excluding non-recurring items was MEUR 23.4 (21.4) or 8.0%
(7.2%) of revenue, up 9.3%.

– Operating profit was MEUR 17.7 (20.7), or 6.1% (7.0%) of revenue, down 14.5%.

– The operating profit includes non-recurring items of MEUR -5.7 (-0.7).

– Profit for the period was MEUR 12.1 (15.7), down 23.3%.

– Earnings per share were EUR 0.13 (0.19).

– The Board of Directors’ proposal of capital repayment is EUR 0.12 per share

KEY FIGURES         2015  2014  Change         2015   2014   Change
MEUR                Q4    Q4           %       Q1–Q4  Q1–Q4         %
Revenue             78.6  76.6  2.0    2.6     291.5  295.4  -3.9   -1.3
Content revenue     29.2  27.7  1.5    5.5     104.7  110.1  -5.5   -4.9
Content revenue,    26.3  26.2  0.1    0.4     97.0   104.6  -7.6   -7.2
print
Content revenue,     2.4   1.5   0.8    53.4    7.1    5.6    1.5   27.3
online
Advertising revenue 40.6  38.6  2.0    5.2     146.9  146.4  0.5    0.3
Advertising         17.6  19.8  -2.2   -10.9   66.2   73.7   -7.5  -10.2
revenue, print
Advertising         23.0  19.0  3.9    20.7    80.7   72.7   8.0    11.0
revenue, online
Service revenue      8.7   10.2  -1.5   -14.9   39.9   38.8   1.1    2.8
Total expenses      71.7  71.2  0.5    0.7     268.7  274.6  -5.9   -2.1
excluding non-recurring
items
EBITDA excluding     10.8  8.9   1.9    21.5    37.4   35.1   2.3    6.5
non-recurring items
EBITDA               6.1   10.1  -4.1   -40.1   34.5   36.4   -1.9  -5.1
Operating profit     7.1   5.6   1.5    26.3    23.4   21.4   2.0    9.3
excluding non-recurring
items
% of revenue         9.0   7.3                  8.0    7.2
Operating profit     0.9   4.8   -3.9   -81.5   17.7   20.7  -3.0  -14.5
(loss)
% of revenue         1.1   6.3                  6.1    7.0
Profit for the       0.3   4.0   -3.8   -93.7   12.1   15.7  -3.7  -23.3
period
Earnings per share,  0.00  0.05  -0.05  -103.3  0.13   0.19  -0.06 -30,9
EUR (basic)
Earnings per share,  0.00  0.05  -0.05  -103.3  0.13   0.19  -0.06 -30.9
EUR (diluted)
Online sales         29.1  24.7  4.4    17.7    102.8  94.5   8.3    8.7
Online sales, % of   37.1  32.3                 35.3   32.0
revenue

Dividend proposal to the Annual General Meeting:

On 31 December 2015, the Group’s parent company had distributable funds
totalling EUR 120,642,934 (179,932,379). Alma Media’s Board of Directors
proposes to the Annual General Meeting that a capital repayment of EUR 0.12
(2014: EUR 0.12) per share be paid from the reserve for invested non-restricted
equity for the financial year 2015. Based on the number of shares on the closing
date 31 December 2015, the capital repayment totals EUR 9,885,982 (2014: EUR
9,058,422).

No essential changes have taken place after the end of the financial year with
respect to the company’s financial standing. The proposed distribution of profit
does not, in the view of the Board of Directors, compromise the company’s
liquidity.

Outlook for 2016:

The Finnish economy is expected to show zero growth or only slight growth in
2016. Alma Media’s significant operating countries in Eastern Central Europe,
such as the Czech Republic and Slovakia, are expected to see continued economic
growth, but at a lower rate than in 2015.

Macroeconomic development affects both consumer demand and advertising volume.
The structural transformation of advertising will continue in 2016; online
advertising will grow, while print media advertising will decline. Total
advertising volume is not expected to increase in Finland in 2016.

The Talentum acquisition completed in late 2015 will increase Alma Media’s
revenue and operating profit in 2016. In 2016, Alma Media expects its full-year
revenue and operating profit excluding non-recurring items to increase from the
2015 level. The full-year revenue for 2015 was MEUR 291.5, and operating profit
excluding non-recurring items was MEUR 23.4.

Kai Telanne, President and CEO:

For Alma Media, 2015 was a good year, taking the operating environment into
consideration. The development of foreign operations was excellent due to strong
economic growth in Eastern Central Europe, but the Finnish market did not see
the hoped-for recovery that would have supported a significant improvement in
Alma Media’s result. In 2015, macroeconomic development in Finland was among the
weakest in the EU, and consumer purchasing power declined. The weak economic
climate in Finland had a negative impact on expectations among consumers and the
business sector, as well as advertising investment.

Nevertheless, Alma Media’s operating profit excluding non-recurring items
improved in 2015 in spite of the difficult economic climate. Revenue for the
full year declined to MEUR 291.5 due to divestments. Operating profit excluding
non-recurring items increased by 9.3 per cent to MEUR 23.4. Alma Media’s
business in its primary international markets in Eastern Europe, in particular,
showed continued positive profit performance. In the final quarter of 2015, the
recruitment business outside Finland grew by nearly 21 per cent.

The focus of media consumption is shifting rapidly to digital channels, mobile
in particular. In response to the changes in media consumption, advertising
investments in print media are declining and the shift to digital channels is
continuing. Alma Media has made a concerted effort to move its business
operations and employees from the world of print media towards digital
multimedia services. The Group’s revenue from digital products and services
exceeded the MEUR 100 milestone with year-on-year growth of 8.7 per cent.

In the Digital Consumer Services segment, revenue growth was highly profitable
as operating profit excluding non-recurring items grew by 47 per cent from the
previous year. The most significant factor in the improved result was the strong
development of the recruitment business outside of Finland. In Finland, Alma
Media’s digital services maintained their profit level.

The improved profitability of the Financial Media and Business Services segment
was supported by good advertising sales and the increase in revenue attributable
to JM Tieto. Kauppalehti’s content sales managed to compensate for the decline
in print media by achieving growth in digital content revenue.

For IL-Media, 2015 was a difficult year. Print media content revenue and
advertising sales showed a significant decline. Nevertheless, there was a
positive turn in digital advertising towards the end of the year. The increase
in online advertising sales in the latter part of the year was particularly
supported by mobile sales as well as new programmatic buying and targeted
advertising solutions.

The Regional Media segment made several divestments and implemented operational
restructuring and efficiency improvement measures to secure the profitability of
the publishing business. The segment also began a gradual shift towards paid
digital content.

One of the biggest news in the Finnish media sector in 2015 was Alma Media’s
acquisition of Talentum. With the two companies’ business operations
complementing each other very well, the combination creates a significant player
in professional media and business services.

The Talentum acquisition was funded by both equity financing and debt. In spite
of this significant investment, Alma Media’s financial position remained strong
in 2015, with our equity ratio remaining at 42.5%. Our strong balance sheet
enables us to continue investing in growth and internationalisation whenever
opportunities that are in line with our strategy arise.

We carried out organisational restructuring in our national media sales in 2015.
We strengthened our competitiveness and increased our market share in
advertising by focusing on areas such as the development of effective digital
multimedia solutions and the versatile utilisation of data.

According to TNS Media Intelligence, the media advertising volume in Finland
decreased by approximately two per cent in 2015 compared to the previous year,
totalling EUR 1.2 billion. It is estimated that media advertising’s share of GDP
was at a historical low in 2015, at a level that is similar to many developing
markets. Well-executed marketing communications play an important role in
maintaining economic activity in Finland. Instead of streamlining and cost
restructuring, Finland needs an atmosphere that encourages investment, hard work
and entrepreneurship in order to increase confidence in the future. If you want
to sell and be successful, you must also create consumer demand and be active in
marketing.

For more information, please contact:
Kai Telanne, President and CEO, telephone +358 10 665 3500
Juha Nuutinen, CFO, telephone +358 010 665 3873

Conference, webcast and conference call:

A conference for Finnish media, investors and analysts will be held on the same
day at 10.30–11.30 EET in the Alma House (address: Alvar Aallon katu 3 C,
Helsinki). In addition to the presentations held by President & CEO Kai Telanne
and CFO Juha Nuutinen, participants will have an opportunity to discuss with
other members of the company's management. Please note that the conference will
be held in Finnish. The presentation material in English will be available on
www.almamedia.fi/en/investors/reports-and-presentations/presentations at 10.30
EET.

To participate in the conference, kindly register beforehand by e-mail,
kutsut@almamedia.fi.

An international conference call and audio webcast concerning the financial
result 2015 will begin at 13.00 EET. You can participate in the conference by
calling +44 20 3427 0503 (confirmation code: 4069252) or follow the direct
transmission at www.almamedia.fi/en/investors/reports-and
-presentations/presentations.

ALMA MEDIA CORPORATION

Board of Directors

Distribution: NASDAQ OMX Helsinki, main media, www.almamedia.com

Alma Media in brief

Alma Media is a media company focusing on the service business and journalistic
content. The company’s best-known brands are Kauppalehti, Talouselämä,
Affärsvärlden, Iltalehti, Aamulehti, Etuovi.com and Monster. Alma Media builds
sustainable growth for its customers by utilising the opportunities of
digitality, including information services, system and expert services and
advertising solutions. Alma Media’s operations have expanded from Finland to the
Nordic countries, the Baltics and Central Europe. Alma Media employs
approximately 2,500 professionals (excluding delivery personnel), of whom
approximately 30% work outside Finland. Alma Media’s revenue in 2015 was EUR
291.5 million. Alma Media’s share is listed on NASDAQ Helsinki. Read more at
www.almamedia.com.