TALENTUM OYJ INTERIM REPORT 27 October 2010 at 9.00 am
TALENTUM INTERIM REPORT JANUARY-SEPTEMBER 2010
July-September 2010 in brief
- Net sales EUR 15.7 million (EUR 12.3 million)
- Operating income without non-recurring items EUR 0.0 million (EUR -1.3
million)
- Operating income (EBIT) EUR -1.3 million (EUR -1.5 million)
- Talentum acquired IIR Finland Oy in order to strengthen its event business
- Earnings per share EUR -0.02 (EUR -0.02)
January-September 2010 in brief
- Net sales EUR 56.2 million (EUR 46.9 million)
- Operating income without non-recurring items EUR 0.5 million (EUR -2.4
million)
- Operating income (EBIT) EUR -0.8 million (EUR -4.4 million)
- Earnings per share EUR -0.01 (EUR -0.08)
- Net cash flow from operating activities EUR -0.4 million (EUR -6.9 million)
- Net liabilities EUR 15.3 million (31 Dec 2009: EUR 12.2 million)
- Amortisation of intangible assets of acquisitions Sverige Bygger and IIR
Finland Oy EUR 0.4 million (EUR 0.0 million)
KEY FINANCIAL FIGURES
--------------------------------------------------------------------------------
| EUR million | 7-9/ | 7-9/ | Change | 1-9/ | 1-9/ | 1-12/ |
| | 2010 | 2009 | % | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Net sales | 15.7 | 12.3 | 27.9 | 56.2 | 46.9 | 66.8 |
--------------------------------------------------------------------------------
| Operating income | 0.0 | -1.3 | -100.1 | 0.5 | -2.4 | -0.9 |
| without | | | | | | |
| non-recurring items | | | | | | |
--------------------------------------------------------------------------------
| Operating income | -1.3 | -1.5 | 13.2 | -0.8 | -4.4 | -5.2 |
--------------------------------------------------------------------------------
| as % of net sales | -8.3 | -12.3 | | -1.5 | -9.4 | -7.8 |
--------------------------------------------------------------------------------
| Total assets | | | | 65.1 | 49.4 | 58.8 |
--------------------------------------------------------------------------------
| Investments | 3.9 | 0.9 | 335.5 | 4.5 | 0.9 | 8.8 |
--------------------------------------------------------------------------------
| as % of net sales | 24.9 | 7.3 | | 8.1 | 1.9 | 13.2 |
--------------------------------------------------------------------------------
| Equity ratio % | | | | 32.0 | 38.9 | 31.4 |
--------------------------------------------------------------------------------
| Gearing ratio % | | | | 92.5 | 57.0 | 81.7 |
| (net debt to | | | | | | |
| equity) | | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | | | 16.1 | 9.5 | 15.9 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Net | | | | 15.3 | 8.8 | 12.2 |
| interest-bearing | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Personnel on | | | | 776 | 740 | 755 |
| average | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | -0.02 | -0.02 | -0.1 | -0.01 | -0.08 | -0.10 |
| EUR | | | | | | |
--------------------------------------------------------------------------------
| Cash flow from | -0.12 | -0.14 | 13,4 | -0.01 | -0.16 | -0.13 |
| operating | | | | | | |
| activities per | | | | | | |
| share, EUR | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, | | | | 0.38 | 0.35 | 0.34 |
| EUR | | | | | | |
--------------------------------------------------------------------------------
| Market | | | | 82.0 | 82.9 | 77.6 |
| capitalization on | | | | | | |
| closing rate at | | | | | | |
| period end | | | | | | |
--------------------------------------------------------------------------------
Sector and Talentum prospects for 2010
The growth in the activeness of Talentum's customers, which started at the end
of 2009, continued during the third quarter of 2010. In Talentum this could be
seen in the form of improved sales figures in Sweden. The trend was positive in
Publishing Finland. However, it continued to be subdued.
Talentum's prospects for the whole year remain unchanged and it estimates that
its comparable total net sales for the year will increase from the previous year
(2009) and that operating income will be positive.
Future-related statements
Talentum defines its strategy and goals as follows:
- Talentum is specialised in publishing operations designed for professionals.
The key products and services of Talentum's publishing operations are magazines,
books, online and information services, training and events.
- The main short term objective is to improve profitability.
- The long-term goal is profitable growth. Organic growth is supported by
acquisitions. Significant potential is seen in the Nordic countries.
Furthermore, Talentum is also exploring ways to expand to other nearby market
areas.
- The goal is for over half of net sales to come from outside Finland.
- Talentum strives to diversify its revenue structure and to reduce dependence
on economically sensitive revenues.
Talentum does not communicate its long-term net sales and operating profit
target numerically.
CHIEF EXECUTIVE OFFICER - JUHA BLOMSTER:
“The general economic situation is reflected in the amount of marketing
investments and the activity of media companies. The positive trend in
Talentum's fields of activity continued after the summer, but fast recovery is
not on the horizon.
- During the year, the amount of media advertising has increased in both Finland
and Sweden. In Sweden, the decline in advertising began earlier than in Finland,
and recovery has been faster. Talentum's advertising revenue for
January-September increased by 3 per cent in Finland and 63 per cent in Sweden
from the previous year, which is more than market growth. In Finland, the more
positive trend only started in mid-September.
- Talentum Group's net sales for January-September increased by 20 per cent and
net sales from publishing operations by 21 per cent. Without the Sverige Bygger
and Norge Bygges companies, acquired at the end of 2009, and the IIR Finland
company, acquired in September, and with comparable exchange rates, consolidated
net sales increased by 3 per cent.
- Net sales from publishing operations for January-September remained at the
same level as in the previous year in Finland, while they increased by 56 per
cent in Sweden. In January-September, e-business increased by 89 per cent. Its
share of the net sales from publishing operations is 21 per cent. The revenue of
the construction information companies operating in Sweden and Norway is mainly
due to content sales.
- The third quarter was an active period for Talentum. We completed many
important projects. In September, Talentum strengthened its training and event
business by purchasing IIR Finland Oy, a leading event provider in Finland. The
company now operates under the name Talentum Events Oy, and it organises events
under the trademark FYI as well as in cooperation with Talentum's other brands.
Our strategic goal is to reduce dependence on economically sensitive
advertising, and this acquisition plays its part in supporting the achievement
of the goal.
- We also carried out internal reorganisations. Talentum moved from the previous
matrix organisation to an income unit organisation in both Finland and Sweden.
We combined the editorial offices of Talouselämä and Markkinointi & Mainonta as
well as that of the Tekniikka & Talous, Energia and Metallitekniikka magazines.
- We have actively promoted internal innovations. The magazines published many
new products. For example, Talouselämä is making a high-quality lifestyle
supplement to be published once this year and four times next year. In addition,
we have developed online services for our readers, including the Talouselämä
Yrityskaupat service, which is based on a unique database and gives external
experts the opportunity to share basic information on acquisitions through their
own column.
- Our most important goal for the current year is to improve profitability.
Consolidated operating income without non-recurring items for January-September
was EUR 0.5 million, which is 120 per cent higher than in the previous year. The
result is still unsatisfactory. However, I believe that, with product
development and the structural changes made, achieving the goal of profitability
will be easier than before. Growth through acquisitions is also important, but
not at the expense of profitability.
Operating environment and seasonal variation
In Finland, economic recovery has been faster than what the forecasts made in
the spring indicated. Forecasts for the development of Growth Domestic Product
for this year are mainly 3-4%. Forecasts for the general economic climate in
Sweden continue to be more positive than in Finland. Forecasts for 2010 are
mainly 4-5%.
According to TNS Media Intelligence, in Finland media advertising for
January-September rose by 5.6%, and for periodicals in particular it shrank by
3.3%. Online advertising revenues increased by 36.9%. In Sweden, total media
advertising revenues rose by 17.1% for January-September, while in professional
journals the increase was 5.5% (Sweden's Media Agencies - Sveriges Mediebyråer).
In 2009, the decline in advertising of professional journals was significantly
more severe than for general-interest magazines. In Finland, separate statistics
are not compiled for professional journals.
Our assessment is that the information needs of Talentum's professional target
groups will remain high, irrespective of the economic situation. 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 affects the
results in that quarter. Easter fell at the beginning of the second quarter in
both the year of comparison and the one under review. Magazines and books do not
generally come out during the summer holiday season, which is why the third
quarter is the weakest in terms of sales. Profit for the third period is
historically negative. Operations are generally at their busiest in the final
quarter.
Consolidated net sales and profit for July-September 2010
Consolidated net sales for July-September increased by 27.9%, totalling EUR 15.7
million (EUR 12.3 million). Without corporate acquisitions (IIR Finland Oy and
Sverige Bygger AB) and with comparable exchange rates, net sales increased by
4.7%. The strengthening of the Swedish krona against the euro improved net sales
by EUR 0.5 million. Net sales from publishing operations increased by 30.4%,
totalling EUR 14.2 million (EUR 10.9 million). Advertising sales rose by 39.5%.
Consolidated operating income without non-recurring items was EUR 0.0 million
(EUR -1.3 million). Consolidated operating income for July-September was EUR
-1.3 million (EUR -1.5 million) and -8.3% of net sales (‑12.3%). Of
non-recurring expenses, EUR 1.0 million arose from personnel reductions in
Sweden and EUR 0.3 million from the acquisition of IIR Finland Oy. A
non-recurring expense for the year of comparison (EUR 0.2 million) was related
to personnel reduction.
Operating income from publishing operations without non-recurring items was EUR
0.3 million (EUR -1.0 million). Operating income from publishing operations was
EUR -0.7 million (EUR -1.2 million).
Net financial expenses amounted to EUR 0.1 million (EUR 0.1 million). The
Group's share of the income of associated companies was EUR 0.0 million (EUR
-0.2 million).
Income before taxes was EUR -1.2 million (EUR -1.6 million). Taxes for the Group
were EUR 0.1 million (EUR 0.6 million) for the period under review. The
effective tax rate for the period under review was 10.5% (38.8%). The
consolidated income for July-September was EUR -1.1 million (EUR -1.0 million).
Consolidated net sales and profit for January-September 2010
Consolidated net sales for January-September increased by 19.9%, totalling EUR
56.2 million (EUR 46.9 million). Without corporate acquisitions and with
comparable exchange rates, net sales increased by 3.4%. The strengthening of the
Swedish krona against the euro improved net sales by EUR 2.0 million. Net sales
from publishing operations increased by 21.4%, totalling EUR 51.5 million (EUR
42.4 million). The level of advertising sales rose by 28.2%.
Consolidated operating income without non-recurring items was EUR 0.5 million
(EUR -2.4 million). Consolidated operating income for January-September was EUR
-0.8 million (EUR -4.4 million) and -1.5% of net sales (‑9.4%). Depreciation of
intangible assets of corporate acquisitions were EUR 0.4 million (EUR 0.0
million). Operating income from publishing operations without non-recurring
items was EUR 1.4 million (EUR -1.6 million). Operating income from publishing
operations was EUR 0.4 million (EUR -3.5 million).
The Group's expenses decreased by approximately 1.9%, or EUR 0.9 million, with
respect to the same period of the previous year (with comparable exchange
rates). This comparison does not include the information business acquired at
the turn of the year and the event business acquired in September.
Net financial expenses amounted to EUR -0.4 million (EUR 0.1 million). The
Group's share of the income of associated companies was EUR 0.0 million (EUR
-0.2 million).
Income before taxes was EUR -0.4 million (EUR -4.6 million). The Group's taxes
for the period under review were EUR 0.0 million (EUR 1.2 million). The
effective tax rate for the financial period was 26.3% (26.3%). Consolidated
income for the period under review was EUR -0.4 million (EUR ‑3.4 million).
Short-term risks for the business
With the growth of the Group's international operations, the consolidated profit
and loss account and balance sheet are increasingly exposed to the effects of
exchange rate fluctuations. Net sales Publishing Other Nordic countries for the
period under review were 49% (38%) of consolidated net sales. The share of the
balance sheet total attributable to Publishing Other Nordic countries was 45%
(45%). The companies' operations are local and area-bound by language, and there
are very few currency-denominated transactions. The profit and loss account and
balance sheet have not been hedged against exchange rate fluctuations.
The changes in general economic growth will affect Talentum's revenue and
revenue structure. Traditionally, about 40% of consolidated net sales are
dependent on advertising and particularly on the B2B sector, which is sensitive
to economic conditions. Under the present economic conditions, the share of
advertising is about 36% (34%) of net sales. The most economically sensitive
part of advertising revenue is job advertising.
The aim is to minimise the market risk relating to advertising by increasing
revenue from circulation and content sales. The goal is for all Talentum
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 in 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 poor economic conditions.
If the company is unable to develop its operations to respond to changes in
media usage habits, it could undermine its 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 magazine circulations and,
indirectly, media sales.
The general economic uncertainty increases the uncertainty regarding 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
Cash flow from business operations for January-September was EUR -0.4 million
(EUR -6.9 million). The change in working capital was EUR -0.6 million (EUR -2.8
million). Working capital is negative, as is usual for the sector, because
liabilities include subscription fee advances received from customers of EUR
13.2 million. (In the balance sheet items, the comparison date is 31 December
2009: EUR 11.2 million.)
The consolidated balance sheet total at the end of the period under review stood
at EUR 65.1 million (EUR 58.8 million). The Group's interest-bearing loans and
borrowing amounted to EUR 16.1 million (EUR 15.9 million). The Group's liquid
assets were EUR 0.7 million (EUR 3.7 million). Interest-bearing net liabilities
were EUR 15.3 million (EUR 12.2 million).
On 30 September 2010, Talentum Oyj had 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 12.1 million of the finance limits was used at the end of the period under
review.
In addition, the Group has a commercial paper programme of EUR 30 million, of
which EUR 4 million was used at the end of the period under review.
The financing arrangements have been renewed, with the agreements signed at the
beginning of October 2010, so that the used bank overdraft limit is EUR 14
million and the used financing credit limit is EUR 22 million. About half of the
limits are valid for three years and the other half for four years.
The equity ratio at the end of the period under review was 32.0% (31.4%). The
Group's equity per share was EUR 0.38 (EUR 0.34). 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. On 30 September 2010, the translation difference in
the Group's equity was EUR 0.1 million. The change for January-September was EUR
2.3 million (positive).
Investments
Gross investments in tangible and intangible assets for January-September
totalled EUR 4.3 million (EUR 0.9 million), which is 7.6% (1.9%) of net sales.
They include the tangible and intangible assets of the acquisition of IIR
Finland Oy.
Changes in Group structure
Talentum strengthened its training and event business with an acquisition. On 15
September 2010, Talentum acquired the entire share capital of IIR Finland Oy.
The company's name was changed to Talentum Events Oy. The company produces
training and events under the trademark FYI. At the time of the acquisition, the
company had 46 employees. The sellers in the agreement comprised six individuals
who are part of the company's active management and who will continue to work
for company.
The shares of the associated company Mentor Online AB were transferred in
August.
Talentum established Talentum Business Information Group AB (TBIG) in Sweden on
30 December 2009. TBIG purchased companies operating in the construction
information business in Sweden and Norway. On 31 December 2009, Talentum pledged
to sell a 9.9% minority interest of TBIG to an associate outside the Group.
Therefore, the Group's holding of the company on 31 December 2009 was calculated
as 90.1%. However, the agreement was cancelled and the Group's holding of the
company is as 100% as of 1 January 2010. The change only had a minor impact on
the Group's financial position.
Personnel
In January-September, Talentum Group employed an average of 776 (740) people.
Geographically, the personnel were divided as follows: Finland 386 people (400),
Sweden 219 (178), Norway 9 (0), Latvia 73 (57), Lithuania 0 (32), Estonia 84
(68) and Russia 5 (5). The construction information business acquired at the end
of 2009 increased the number of employees in Sweden and Norway by 88 on the
acquisition date. The event business acquired in September 2010 increased the
number of employees in Finland and Sweden by 46 on the acquisition date.
BUSINESS AREAS
--------------------------------------------------------------------------------
| EUR million | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Net sales | | | | | |
--------------------------------------------------------------------------------
| Publishing Finland | 7.1 | 6.4 | 26.2 | 26.2 | 37.3 |
--------------------------------------------------------------------------------
| Publishing Other Nordic | 7.2 | 4.5 | 25.2 | 16.1 | 23.5 |
| Countries | | | | | |
--------------------------------------------------------------------------------
| Direct marketing | 2.1 | 2.0 | 6.8 | 6.6 | 8.8 |
--------------------------------------------------------------------------------
| Other | -0.6 | -0.6 | -2.0 | -2.1 | -2.8 |
--------------------------------------------------------------------------------
| Total | 15.7 | 12.3 | 56.2 | 46.9 | 66.8 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating income without | | | | | |
| non-recurring items | | | | | |
--------------------------------------------------------------------------------
| Publishing Finland | -0.7 | -0.5 | -0.2 | 0.5 | 1.9 |
--------------------------------------------------------------------------------
| Publishing Other Nordic | 1.0 | -0.4 | 1.6 | -2.1 | -1.4 |
| Countries | | | | | |
--------------------------------------------------------------------------------
| Direct marketing | 0.2 | 0.2 | 0.7 | 0.6 | 0.7 |
--------------------------------------------------------------------------------
| Other | -0.5 | -0.5 | -1.6 | -1.5 | -2.1 |
--------------------------------------------------------------------------------
| Total | 0.0 | -1.3 | 0.5 | -2.4 | -0.9 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Non-recurring items | | | | | |
--------------------------------------------------------------------------------
| Publishing Finland | - | 0.2 | - | -1.0 | -2.1 |
--------------------------------------------------------------------------------
| Publishing Other Nordic | -1.0 | -0.4 | -1.0 | -0.9 | -1.8 |
| Countries | | | | | |
--------------------------------------------------------------------------------
| Direct marketing | - | - | - | - | -0.2 |
--------------------------------------------------------------------------------
| Other | -0.3 | 0.0 | -0.3 | -0.1 | -0.3 |
--------------------------------------------------------------------------------
| Total | -1.3 | -0.2 | -1.3 | -2.0 | -4.4 |
--------------------------------------------------------------------------------
| Operating income | -1.3 | -1.5 | -0.8 | -4.4 | -5.2 |
--------------------------------------------------------------------------------
In 2010, non-recurring items included expenses related to personnel reduction in
Sweden (EUR 1.0 million) and expenses arising from the acquisition of IIR
Finland Oy (EUR 0.3 million). IIR Finland is reported in the Publishing Finland
segment.
Publishing
July-September
Net sales from publishing operations for July-September amounted to EUR 14.2
million (EUR 10.9 million), a change of 30.4% from the previous year. Of net
sales from publishing operations, 50% (59%) originated from Finland and the
remaining 50% (41%) from the other Nordic countries.
In July-September, advertising revenue increased by 39.5% from the previous
year. The share of advertising revenue in net sales from publishing operations
totalled 34% (32%).
January-September
Net sales from publishing operations for January-September amounted to EUR 51.5
million (EUR 42.4 million), a change of 21.4% from the previous year. Of net
sales from publishing operations, 51% (62%) originated in Finland and the
remaining 49% (38%) in the other Nordic countries.
In January-September, advertising revenue increased by 28.2% from the previous
year. The share of advertising revenue in net sales from publishing operations
totalled 36% (34%).
Net sales from e-business for January-September increased by 88.7%. Net sales
from e-business were EUR 10.8 million (EUR 5.7 million), which corresponds to
21% (14%) of the total figure for publishing. The net sales (EUR 5.1 million) of
the construction information service company acquired in 2009 mostly consist of
revenue from e-content.
Online Talentum media focuses on building premium services that require
registration. Talouselämä agreed with OP-Pohjola Group to cooperate on an expert
column focusing on the subject to be published in the magazine's Yrityskaupat
online service.
Talouselämä announced that it was working on a lifestyle supplement -
Talouselämä Platinum - to be published in December and four times next year.
The editorial offices of Talouselämä and Markkinointi & Mainonta magazines were
combined, as well as the editorial offices Tekniikka & Talous, Metallitekniikka
and Energia. The aim of the change is to increase synergy between printed
magazines and their online services as well as to ensure continuous content
development.
Dagensmedia.se online was awarded Årets Tidskrift prize as Sweden's best digital
media. The award is annually granted by Sveriges Tidskrifter.
In September, the job advertisement service of the Nyteknik.se website recorded
the highest monthly number of advertisements since 2008.
The book Paras sijoitus (Best Investment) by Marko Erola is a nominee for
Finland's Best Business Book award, presented by the Finnish Association of
Business School Graduates.
PUBLISHING REVENUE
--------------------------------------------------------------------------------
| EUR million | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Net sales | | | | | |
--------------------------------------------------------------------------------
| Advertisement revenue | 4.9 | 3.5 | 18.3 | 14.3 | 20.4 |
--------------------------------------------------------------------------------
| Circulation revenue | 4.3 | 4.4 | 17.1 | 17.0 | 23.4 |
--------------------------------------------------------------------------------
| Other content revenue | 5.0 | 3.0 | 16.0 | 11.1 | 17.0 |
| * | | | | | |
--------------------------------------------------------------------------------
| Total | 14.2 | 10.9 | 51.5 | 42.4 | 60.8 |
--------------------------------------------------------------------------------
* 'Other content revenue' includes books, events, training and information
services.
Publishing Finland
In the Publishing Finland segment, financial development is reported for ten
periodicals, book publishing, training and the event business. Furthermore, the
event business of IIR Finland Oy (now Talentum Events Oy), which was acquired in
September 2010, has belonged to this segment since the acquisition (15 September
2010). The magazines with the highest circulation are Talouselämä and Tekniikka
& Talous. The Finnish Law product family is the foundation of Talentum's book
publishing and legal training.
July-September
Net sales from Publishing Finland for July-September amounted to EUR 7.1 million
(EUR 6.4 million), a change of 10.4% from the previous year. Without the event
business acquired in September, the increase from the previous year was 0.5%.
Advertising revenue was 9.6% up on the previous year. The demand for training
has increased somewhat from the previous year.
Operating income without non-recurring items was EUR -0.7 million (EUR -0.5
million). The operating income from Publishing Finland was EUR -0.7 million (EUR
-0.4 million).
January-September
Net sales from Publishing Finland for January-September amounted to EUR 26.2
million (EUR 26.2 million), a change of -0.1% from the previous year.
Advertising revenue was 2.9% up on the previous year.
The operating income without non-recurring items was EUR -0.2 million (EUR 0.5
million). The savings arising from lay-offs improved the operating income by EUR
0.5 million for the year of comparison (2009). The operating income from
Publishing Finland was EUR -0.2 million (EUR -0.5 million).
Publishing Other Nordic Countries
In the Publishing Other Nordic Countries segment, financial development is
reported for six periodicals, the event business and the business information
business. The magazines with the highest circulation are Ny Teknik and
Affärsvärlden. The largest providers of business information are Sverige Bygger
and Talentum HR.
July-September
Net sales from Publishing Other Nordic Countries for July-September amounted to
EUR 7.2 million (EUR 4.5 million), a change of 58.8% from the previous year.
Without the construction information business acquired at the end of 2009 and
with comparable exchange rates, net sales increased by 9.8%. Compared to the
previous year, changes in exchange rates increased net sales by EUR 0.5 million.
Advertising revenue was 82.5% up on the previous year.
Operating income without non-recurring items was EUR 1.0 million (EUR -0.4
million). The operating income from Publishing Other Nordic Countries was EUR
0.0 million (EUR -0.8 million).
January-September
Net sales from Publishing Other Nordic Countries for January-September amounted
to EUR 25.2 million (EUR 16.1 million), a change of 56.4% from the previous
year. Without the construction information business acquired at the end of 2009
and with comparable exchange rates, net sales increased by 12.3%. Changes in
exchange rates increased net sales by EUR 2.0 million. Advertising revenue was
63.5% up on the previous year.
Operating income without non-recurring items was EUR 1.6 million (EUR -2.1
million). Operating income from Publishing Other Nordic countries was EUR 0.6
million (EUR -3.0 million).
Direct Marketing
In the Direct Marketing segment, financial development is reported for the
business of Talentum's subsidiary Suoramarkkinointi Mega Oy in Finland and the
Baltic countries. The company operates in the telemarketing business.
July-September
Net sales from direct marketing for July-September amounted to EUR 2.1 million
(EUR 2.0 million), and the operating income was EUR 0.2 million (EUR 0.2
million).
Group external net sales were up on the previous year due to the fact that
customers used more telemarketing.
January-September
Net sales from direct marketing for January-September amounted to EUR 6.8
million (EUR 6.6 million), and the operating income was EUR 0.7 million (EUR 0.6
million).
TALENTUM GROUP
Payment of dividends
The Annual General Meeting, held on 31 March 2010, decided, on a motion by the
Board of Directors, not to pay out any dividends for 2009.
Management
Talentum Oyj's Annual General Meeting decided that the Board of Directors shall
comprise six people. Harri Kainulainen, Insurance Counsellor, Eero Lehti,
Commercial Counsellor, Atte Palomäki, Group Vice President Corporate
Communications and Merja Strengell, MSc (Eng.) were all re-elected as members of
the Board of Directors. Joachim Berner, MBA, BBA and Kai Telanne, President and
CEO were elected as new members. Merja Strengell was elected the Chairman of the
Board and Kai Telanne the Deputy Chairman.
The AGM re-elected Authorised Public Accountants PricewaterhouseCoopers Oy as
auditors, with APA Juha Wahlroos as the auditor responsible.
Extraordinary General Meeting
Talentum's Extraordinary General Meeting was held on 15 June 2010. The Board of
Directors had called the EGM upon Oy Herttaässä Ab's request to elect one new
member to the Board of Directors and to elect Kai Mäkelä as the seventh member
of the Board. At the time of the request, Oy Herttaässä Ab owned 10.27% of
Talentum Oyj shares. After voting, the EGM decided that Talentum's Board of
Directors would continue to be composed of six members and that no new members
would be elected.
Shares and share capital
On 30 September 2010, Talentum Oyj's share capital totalled EUR 18,593,518.79
and the company had 44,295,787 fully paid shares. The shares are listed on the
NASDAQ OMX Helsinki exchange.
A total of 663,011 shares were traded in July-September, which corresponds to
1.5% of the number of shares. The highest price paid for shares in
January-September was EUR 2.26, and the lowest was EUR 1.64. The closing price
for the shares on 30 September 2010 was EUR 1.88.
On 30 September 2010, the company held 681,000 of its own shares, which is about
1.5% of Talentum's total shares and votes. During the period under review,
Talentum did not buy any more of its own shares.
Shareholdings of the Board of Directors and CEO
On 30 September 2010, 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.
Authorisations of the Board of Directors
Authorisation of the Board of Directors to decide on the acquisition of Talentum
shares
The Annual General Meeting on 31 March 2010 authorised the Board of Directors to
decide on the acquisition of Talentum shares, cancelling all previous
authorisations. By virtue of the authorisation, the Board of Directors has the
right to decide on the acquisition of own shares. The shares can be acquired for
the value determined by the Board of Directors, based on the fair value of the
shares in public trading at the time of their acquisition. Talentum may only
acquire its own shares using unrestricted equity. Based on this authorisation,
Talentum may acquire its shares in one or several lots, but limited to a total
of 3,500,000 shares, which corresponds to approximately eight (8) per cent of
the issued shares of the company. The authorisation will remain in force until
30 June 2011. The Board of Directors is otherwise authorised to decide on all
terms and conditions regarding the acquisition, including the manner of
acquisition of the shares. The authorisation does not exclude the right of the
Board of Directors to also decide on a directed acquisition of Talentum's own
shares, providing that there are strong financial grounds for the company to do
so.
The authorisations were unused as of 30 September 2010.
Authorisation of the Board of Directors to decide on a share issue including the
conveyance of the company's own shares and the issue of special rights
The Annual General Meeting on 31 March 2010 authorised the Board of Directors to
decide on the issue of shares and special rights, cancelling all previous
authorisations. By virtue of the authorisation, the Board of Directors has the
right to decide on a share issue that may be either chargeable or free of
charge, including the issue of new shares and the conveyance of Talentum shares,
which may be in the company's possession. The Annual General Meeting has also
authorised 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 that may be in the company's possession. Based on the
authorisations pertaining to share issues and/or special rights, new shares may
be issued and/or Talentum shares held by the company may be conveyed in one or
several lots, but limited to a total of 3,500,000 shares, which corresponds to
approximately eight (8) per cent of the issued shares of the company. The
authorisations will remain in force until 30 June 2011. The Board of Directors
is otherwise authorised to decide on all terms and conditions regarding share
issue and granting of special rights, including 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 authorisations were unused as of 30 September 2010.
Management share-based incentive scheme
Talentum Oyj's Board of Directors decided on 18 March 2010 to establish a new
share-based incentive scheme for corporate management. The scheme consists of
three earnings periods, each comprising at least one and no more than three
earnings periods, the first of which began on 1 January 2010 and will end on 31
December 2010. 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. Shares cannot
be transferred for two years from the end of the earnings period in question.
The total length of the scheme is 5 years. After this, the company's CEO must
retain one half of the shares earned by him under the scheme for the entire
duration of his employment relationship and for one year after its termination.
The Board of Directors will decide at a later stage on the next earnings periods
and the restrictions related to the disposal of the shares earned during these
periods. The possible scheme revenue for the 2010 earnings period is based on
Talentum Group's net sales and operating profit and Talentum's share revenue.
Nine people were covered by the scheme for the 2010 earnings period. If the
scheme targets are fully achieved in the 2010 earnings period, a maximum of
161,500 shares and the amount of cash required for the tax-like charges arising
from the distributed shares being issued will be given under the scheme. If the
scheme targets are fully achieved, a maximum of 484,500 shares of Talentum Oyj
and the amount of cash required for the tax-like charges arising from the
distributed shares being issued will be given under the scheme over a period of
3 years.
This scheme replaces the scheme of the same design taken into use on 1 January
2007 and terminated on 31 December 2009.
Flagging notifications
No flagging notifications were made in January-September.
Shareholder agreements
The company is not aware of any mutual shareholder agreements between its
shareholders relating to the operations or ownership of the company.
Market guarantee
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.
TABLES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
| EUR million | 7-9 | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| CONTINUING OPERATIONS | | | | | |
--------------------------------------------------------------------------------
| Net sales | 15.7 | 12.3 | 56.2 | 46.9 | 66.8 |
--------------------------------------------------------------------------------
| Other operating income | 0.2 | 0.0 | 0.5 | 0.5 | 0.7 |
--------------------------------------------------------------------------------
| Materials and services | 2.4 | 2.1 | 9.2 | 8.6 | 12.2 |
--------------------------------------------------------------------------------
| Employee benefit expenses | 9.2 | 7.4 | 30.6 | 27.8 | 39.2 |
--------------------------------------------------------------------------------
| Depreciation, amortisation | 0.6 | 0.5 | 1.9 | 1.3 | 1.8 |
| and impairment | | | | | |
--------------------------------------------------------------------------------
| Other operating expenses | 5.1 | 3.9 | 15.9 | 14.1 | 19.6 |
--------------------------------------------------------------------------------
| Operating income | -1.3 | -1.5 | -0.8 | -4.4 | -5.2 |
--------------------------------------------------------------------------------
| Financial income | 0.4 | 0.1 | 0.8 | 0.2 | 0.1 |
--------------------------------------------------------------------------------
| Financial expenses | 0.3 | 0.1 | 0.5 | 0.2 | 0.3 |
--------------------------------------------------------------------------------
| Share of income of | 0.0 | -0.2 | 0.0 | -0.2 | -0.2 |
| associated companies | | | | | |
--------------------------------------------------------------------------------
| Income before taxes | -1.2 | -1.6 | -0.4 | -4.6 | -5.6 |
--------------------------------------------------------------------------------
| Taxes | 0.1 | 0.6 | 0.0 | 1.2 | 1.5 |
--------------------------------------------------------------------------------
| Income for the period | -1.1 | -1.0 | -0.4 | -3.4 | -4.2 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Other comprehensive income: | | | | | |
--------------------------------------------------------------------------------
| Translation differences | 0.8 | 0.9 | 2.3 | 1.0 | 1.0 |
--------------------------------------------------------------------------------
| Available-for-sale | - | - | - | - | 0.0 |
| investments | | | | | |
--------------------------------------------------------------------------------
| Income tax on | - | - | - | - | 0.0 |
| available-for-sale | | | | | |
| investments | | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | -0.3 | -0.1 | 1.8 | -2.4 | -3.1 |
| for the period | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Income for the period | | | | | |
| attributable to: | | | | | |
--------------------------------------------------------------------------------
| Owners of the parent company | -1.1 | -1.0 | -0.4 | -3.4 | -4.2 |
--------------------------------------------------------------------------------
| Non-controlling interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income | | | | | |
| for the period attributable | | | | | |
| to: | | | | | |
--------------------------------------------------------------------------------
| Owners of the parent company | -0.3 | -0.1 | 1.8 | -2.4 | -3.1 |
--------------------------------------------------------------------------------
| Non-controlling interest | 0.0 | 0.0 | 0.0 | -0.0 | 0.0 |
--------------------------------------------------------------------------------
| Basic and diluted Earnings | -0.02 | -0.02 | -0.01 | -0.08 | -0.10 |
| per share, EUR * | | | | | |
--------------------------------------------------------------------------------
* Earnings per share are calculated from the income attributed to the equity
owners of the parent company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
--------------------------------------------------------------------------------
| EUR million | 30.9.2010 | 30.9.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1.2 | 1.3 | 1.3 |
--------------------------------------------------------------------------------
| Goodwill | 31.2 | 20.6 | 28.1 |
--------------------------------------------------------------------------------
| Other intangible assets | 14.5 | 11.7 | 11.6 |
--------------------------------------------------------------------------------
| Investments in associates | 0.1 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Available-for-sale investments | 0.1 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Deferred tax assets | 1.9 | 0.5 | 1.8 |
--------------------------------------------------------------------------------
| Other non-current receivables | 1.4 | 2.1 | 0.3 |
--------------------------------------------------------------------------------
| Total non-current assets | 50.4 | 36.3 | 43.3 |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 1.2 | 1.3 | 1.3 |
--------------------------------------------------------------------------------
| Trade and other receivables | 12.7 | 11.0 | 10.5 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 0.7 | 0.7 | 3.7 |
--------------------------------------------------------------------------------
| Total current assets | 14.6 | 13.0 | 15.5 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 65.1 | 49.4 | 58.8 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
| Equity attributable to equity | | | |
| owners of the parent | | | |
--------------------------------------------------------------------------------
| Share capital | 18.6 | 18.6 | 18.6 |
--------------------------------------------------------------------------------
| Share premium reserve | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Treasury shares | -2.8 | -2.8 | -2.8 |
--------------------------------------------------------------------------------
| Other reserves | 0.8 | 1.7 | -2.2 |
--------------------------------------------------------------------------------
| Invested non-restricted equity | 3.3 | 3.3 | 3.3 |
| fund | | | |
--------------------------------------------------------------------------------
| Retained earnings | -2.7 | -2.1 | -2.2 |
--------------------------------------------------------------------------------
| Total | 16.5 | 15.4 | 14.6 |
--------------------------------------------------------------------------------
| Non-controlling interest | 0.1 | 0.1 | 0.3 |
--------------------------------------------------------------------------------
| Total equity | 16.6 | 15.5 | 14.9 |
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 3.9 | 3.3 | 2.9 |
--------------------------------------------------------------------------------
| Non-current financial | 0.1 | 0.1 | 0.1 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Pension obligation | 0.1 | - | 0.1 |
--------------------------------------------------------------------------------
| Other non-current liabilities | 1.9 | - | 0.4 |
--------------------------------------------------------------------------------
| Non-current provisions | 0.2 | 0.8 | 0.2 |
--------------------------------------------------------------------------------
| Total non-current liabilities | 6.2 | 4.2 | 3.7 |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Current financial liabilities | 15.9 | 9.4 | 15.8 |
--------------------------------------------------------------------------------
| Advances received | 13.2 | 9.5 | 11.2 |
--------------------------------------------------------------------------------
| Trade and other payables | 13.1 | 10.5 | 13.1 |
--------------------------------------------------------------------------------
| Currents provisions | 0.1 | 0.2 | 0.1 |
--------------------------------------------------------------------------------
| Total current liabilities | 42.3 | 29.7 | 40.2 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES | 65.1 | 49.4 | 58.8 |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOW
--------------------------------------------------------------------------------
| EUR million | 1-9/ 2010 | 1-9/ 2009 | 1-12/ 2009 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | | |
--------------------------------------------------------------------------------
| Operating income | -0.8 | -4.4 | -5.2 |
--------------------------------------------------------------------------------
| Adjustments to operating income | 1.4 | 1.1 | 4.1 |
--------------------------------------------------------------------------------
| Change in working capital | -0.6 | -2.8 | -4.0 |
--------------------------------------------------------------------------------
| Financial items and taxes | -0.3 | -0.8 | -0.6 |
--------------------------------------------------------------------------------
| Net cash from operating activities | -0.4 | -6.9 | -5.8 |
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries and | -2.5 | - | -4.3 |
| associates, net of cash acquired | | | |
--------------------------------------------------------------------------------
| Disposal of subsidiaries and | 0.3 | - | -0.1 |
| associates | | | |
--------------------------------------------------------------------------------
| Acquisition of property, plant and | -0.6 | -0.9 | -1.2 |
| equipment and intangible assets | | | |
--------------------------------------------------------------------------------
| Other items | - | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Net cash from investing activities | -2.7 | -0.9 | -5.6 |
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| Change in current loans | 0.1 | 8.0 | 15.0 |
--------------------------------------------------------------------------------
| Repayment of non-current loans | - | -0.7 | -1.4 |
--------------------------------------------------------------------------------
| Dividends paid | - | -4.5 | -4.4 |
--------------------------------------------------------------------------------
| Purchase of treasury shares | - | - | - |
--------------------------------------------------------------------------------
| Net cash used in financing activities | 0.1 | 2.7 | 9.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -3.0 | -5.1 | -2.1 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the | 3.7 | 5.7 | 5.7 |
| beginning of period | | | |
--------------------------------------------------------------------------------
| Foreign exchange adjustment | -0.1 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Net change in cash and cash | -3.0 | -5.1 | -2.1 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end | 0.7 | 0.7 | 3.7 |
| of period | | | |
--------------------------------------------------------------------------------
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 non-controlling interest) |
| e = Translation reserve | i = Non-controlling interest |
| | j = Total equity |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR | a | b | c | d | e | f | g | h | i | j |
| million | | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 18. | 0.0 | -2.8 | 0.0 | -2.2 | 3.3 | -2.2 | 14.6 | 0.3 | 14.9 |
| at 1 | 6 | | | | | | | | | |
| January | | | | | | | | | | |
| 2010 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | | | -0.2 | -0.2 |
| items | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | 2.3 | | -0.5 | 1.8 | 0.0 | 1.8 |
| comprehe | | | | | | | | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 18. | 0.0 | -2.8 | 0.0 | 0.1 | 3.3 | -2.7 | 16.4 | 0.1 | 16.6 |
| at 30 | 6 | | | | | | | | | |
| Septembe | | | | | | | | | | |
| r 2010 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity | 18. | 0.0 | -2.8 | 0.0 | -2.5 | 5.9 | 3.0 | 22.1 | 0.1 | 22.3 |
| at 1 | 6 | | | | | | | | | |
| January | | | | | | | | | | |
| 2009 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Return | | | | | | -2.6 | | -2.6 | | -2.6 |
| of | | | | | | | | | | |
| equity | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | -1.7 | -1.7 | | -1.7 |
| paid | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | 0.9 | | -3.3 | -2.4 | 0.0 | -2.4 |
| comprehe | | | | | | | | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 18. | 0.0 | -2.8 | 0.0 | -1.6 | 3.3 | -2.1 | 15.4 | 0.1 | 15.5 |
| at 30 | 6 | | | | | | | | | |
| Septembe | | | | | | | | | | |
| r 2009 | | | | | | | | | | |
--------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
In preparation of this interim report, Talentum has applied the same principles
as in the financial statements for 2009, apart from the additions described
below.
From 1 January 2010, Talentum has adopted the following revised and amended IFRS
standards:
Revised IFRS 3 Business Combinations
The revisions of the Standard affect, among other things, the amount of goodwill
from acquisitions and income of sale of the business operations.
Acquisition-related expenses, such as consultants' fees, will be recognised in
profit or loss according to the revised IFRS 3 standard. The conditional
purchase price is valued at fair value and subsequent changes in its value will
be recognised through profit or loss. The the noncontrolling interest for each
acquisition can be valued either at fair value or as a proportion of the net
assets of the acquisition target.
Amended IAS 27 Consolidated and Separate Financial Statements
The amendments to the Standard affect how phased acquisitions and disposals are
treated. If the parent company retains its control in the subsidiary, the
effects of changes in share of ownership are recognised directly in equity, and
no goodwill or revenue and expenses to be recognised through profit or loss will
arise. If the parent company loses its control in the subsidiary, any remaining
investment is measured at fair value through profit or loss.
In addition, the Group has adopted the April 2009 Annual Improvements to IFRS.
The other new and revised standards and interpretations are not relevant to the
Group.
All figures in this report have been rounded up or down, so the sum of single
figures may be different from the totals shown.
TALENTUM GROUP BY SEGMENTS
--------------------------------------------------------------------------------
| 1-9/2010 | Publishing | Publishing | Direct | Other | Group |
| | Finland** | Other | market | | total |
| | | Nordic | ing | | |
| | | Countries* | | | |
--------------------------------------------------------------------------------
| EUR million | | | | | |
--------------------------------------------------------------------------------
| External sales | 26.2 | 25.2 | 4.6 | 0.2 | 56.2 |
--------------------------------------------------------------------------------
| Inter-segment net | | | 2.2 | -2.2 | 0.0 |
| sales | | | | | |
--------------------------------------------------------------------------------
| Operating income | -0.2 | 0.6 | 0.7 | -1.9 | -0.8 |
--------------------------------------------------------------------------------
| Segment income | -0.2 | 0.6 | 0.7 | -1.9 | -0.8 |
| before taxes | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Reconciliation: | | | | | |
--------------------------------------------------------------------------------
| Segment income | | | | | -0.8 |
| before taxes | | | | | |
--------------------------------------------------------------------------------
| Financing items, | | | | | 0.4 |
| net | | | | | |
--------------------------------------------------------------------------------
| Share of income | | | | | 0.0 |
| of associated | | | | | |
| companies | | | | | |
--------------------------------------------------------------------------------
| Consolidated | | | | | -0.4 |
| income before | | | | | |
| taxes | | | | | |
--------------------------------------------------------------------------------
*Includes the business information operations acquired on 30 December 2009.
** Includes the event business operations acquired on 15 September 2010.
--------------------------------------------------------------------------------
| 1-9/2009 | Publishing | Publishing | Direct | Other | Group |
| | Finland | Other | market | | total |
| | | Nordic | ing | | |
| | | Countries | | | |
--------------------------------------------------------------------------------
| EUR million | | | | | |
--------------------------------------------------------------------------------
| External net | 26.2 | 16.1 | 4.3 | 0.1 | 46.9 |
| sales | | | | | |
--------------------------------------------------------------------------------
| Inter-segment | | | 2.3 | -2.3 | 0.0 |
| net sales | | | | | |
--------------------------------------------------------------------------------
| Operating income | 0.5 | -2.1 | 0.6 | -1.5 | -2.4 |
--------------------------------------------------------------------------------
| Segment income | 0.5 | -2.1 | 0.6 | -1.5 | -2.4 |
| before taxes | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Reconciliation: | | | | | |
--------------------------------------------------------------------------------
| Segment income | | | | | -2.4 |
| before taxes | | | | | |
--------------------------------------------------------------------------------
| Non-recurring | | | | | -2.0 |
| items | | | | | |
| unallocated to | | | | | |
| the segments | | | | | |
--------------------------------------------------------------------------------
| Financing items, | | | | | 0.1 |
| net | | | | | |
--------------------------------------------------------------------------------
| Share of income | | | | | -0.2 |
| of associated | | | | | |
| companies | | | | | |
--------------------------------------------------------------------------------
| Consolidated | | | | | -4.6 |
| income before | | | | | |
| taxes | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1-12/2009 | Publishing | Publishing | Direct | Other | Group |
| | Finland | Other | market | | total |
| | | Nordic | ing | | |
| | | Countries | | | |
--------------------------------------------------------------------------------
| EUR million | | | | | |
--------------------------------------------------------------------------------
| External net | 37.3 | 23.5 | 5.8 | 0.2 | 66.8 |
| sales | | | | | |
--------------------------------------------------------------------------------
| Inter-segment net | | | 3.0 | -3.0 | 0.0 |
| sales | | | | | |
--------------------------------------------------------------------------------
| Operating income | 1.9 | -1.4 | 0.7 | -2.1 | -0.9 |
--------------------------------------------------------------------------------
| Segments income | 1.9 | -1.4 | 0.7 | -2.1 | -0.9 |
| before taxes | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Reconciliation: | | | | | |
--------------------------------------------------------------------------------
| Segments income | | | | | -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 | | | | | |
--------------------------------------------------------------------------------
BUSINESS ACQUISITIONS
Acquisitions of subsidiaries and business functions
IIR Finland Oy
On 15 September 2010, Talentum Oyj acquired the complete share capital of IIR
Finland Oy. At the time of the acquisition, the acquired company had 40
employees. IIR Finland Oy provides events, training and seminars for business
management and experts that focus on industry and technology, sales and
marketing, business management and HR, as well as financial administration and
financing. IIR Finland Oy has a 49.9% holding of Professio Oy, a healthcare
training company.
The purchase consideration was EUR 3.4 million and it was paid in cash on the
date of the transaction. On defining the acquisition price an additional
purchase price estimated at EUR 0.9 million and a penalty of EUR 1.2 million for
2011-2013 stated in the terms of the contract, were also included. The
realisation of the additional purchase price depends on the company's
profitability growth in 2011-2013. The price, which will be paid annually, last
instalment in spring 2014, is included in consolidated non-current liabilities.
The consultancy fees arising from the acquisition (EUR 0.3 million) were
recognised as expenses at the time of the acquisition. The penalty is recognised
as expense for its entire duration.
In the purchase consideration allocation one intangible asset, i.e. customer
relationships, was recognised as its own balance sheet item in the goodwill that
arose from the acquisition. The goodwill that arose in the acquisition is
presented as a EUR 1.9 million item in the balance sheet of the reporting date.
The fair value of the net assets acquired is provisional and is dependent on the
final determination. The final figure for goodwill is regarded as arising
principally from event production process know-how, specialist personnel and
industry expertise.
The consolidated financial statements at the time of reporting include the
acquired company's net sales after the acquisition (EUR 0.6 million) as well as
its income (EUR 0.1 million). Had the acquisition taken place at the beginning
of the financial period 2010, it would have increased the consolidated net sales
by EUR 3.4 million and operating profit by EUR 0.4 million.
--------------------------------------------------------------------------------
| EUR million | Recognised fair values |
| | at 15 September 2010 |
--------------------------------------------------------------------------------
| Assets and liabilities of acquired companies at the | |
| date of acquisition: | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 0.0 |
--------------------------------------------------------------------------------
| Intangible assets | 0.6 |
--------------------------------------------------------------------------------
| Affiliated company shares | 0.1 |
--------------------------------------------------------------------------------
| Trade and other receivables | 0.7 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 0.9 |
--------------------------------------------------------------------------------
| Total assets | 2.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax liabilities | 0.2 |
--------------------------------------------------------------------------------
| Current liabilities | 0.9 |
--------------------------------------------------------------------------------
| Total liabilities | 1.1 |
--------------------------------------------------------------------------------
| Net assets | 1.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of an acquisition | 3.1 |
--------------------------------------------------------------------------------
| Goodwill | 1.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consideration paid (in cash) | 3.4 |
--------------------------------------------------------------------------------
| Cash and cash equivalents of acquired companies | -0.9 |
--------------------------------------------------------------------------------
| Net cash outflow | 2.5 |
--------------------------------------------------------------------------------
Sverige Bygger AB and Norge Bygges AS
Talentum's Swedish subsidiary, Talentum Business Information Group AB, acquired
the entire share capital of Sverige Bygger AB and Norge Bygges AS on 30 December
2009. The goodwill that arose from the acquisition was presented as a EUR 7.6
million item in the balance sheet of 31 December 2009, because the fair value of
the net assets acquired was provisional and was dependent on the final
determination. The amount of goodwill was reviewed on 30 June 2010, and two
intangible assets, a database and its management system, as well as customer
relationships, were recognised in their own balance sheet items. The reviewed
figure for goodwill is regarded as arising principally from specialist
personnel, market share and industry expertise.
The amount of goodwill was reviewed again in the third quarter. After the
review, the amount of goodwill arising from the acquisition is EUR 6.8 million
in the balance sheet of the reporting date, and the total value of intangible
assets separated from goodwill is EUR 1.9 million after amortisation.
Amortisation on these intangible assets in January-September totalled EUR 0.4
million. Amortisation in January-March and April-June was not adjusted as the
adjustment was not considered to have a significant impact on the financial
statements on 31 March 2010 and 30 June 2010.
--------------------------------------------------------------------------------
| EUR million | |
--------------------------------------------------------------------------------
| Reconciliation of goodwill | |
--------------------------------------------------------------------------------
| Carrying amount at 1 Jan 2010 | 7.6 |
--------------------------------------------------------------------------------
| Purchase price allocation | -2.1 |
--------------------------------------------------------------------------------
| Deferred taxes | 0.5 |
--------------------------------------------------------------------------------
| Exchange rate differences | 0.7 |
--------------------------------------------------------------------------------
| Carrying amount at 30 September 2010 | 6.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Recognised fair | Reviewed fair |
| | values/ carrying | values/ carrying |
| | amounts at 30 Dec | amounts at |
| | 2009 | 30 Dec 2009 |
--------------------------------------------------------------------------------
| Assets and liabilities of | | |
| acquired companies at the date | | |
| of acquisition: | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Intangible assets | - | 2.1 |
--------------------------------------------------------------------------------
| Trade and other receivables | 1.9 | 1.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 3.4 | 3.4 |
--------------------------------------------------------------------------------
| Total assets | 5.3 | 7.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax liabilities | - | 0.5 |
--------------------------------------------------------------------------------
| Current liabilities | 4.6 | 4.6 |
--------------------------------------------------------------------------------
| Total liabilities | 4.6 | 5.1 |
--------------------------------------------------------------------------------
| Net assets | 0.8 | 2.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of an acquisition | 8.3 | 8.3 |
--------------------------------------------------------------------------------
| Goodwill | 7.6 | 6.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consideration paid (in cash) | 7.6 | 7.6 |
--------------------------------------------------------------------------------
| Cash and cash equivalents of | -3.4 | -3.4 |
| acquired companies | | |
--------------------------------------------------------------------------------
| Net cash outflow | 4.3 | 4.3 |
--------------------------------------------------------------------------------
EMPLOYEE BENEFITS:
POST-EMPLOYMENT BENEFITS
The Talentum Group general pension fund's statutory pension liabilities
according to the Employees Pensions Act, as well as the management of the
related assets were transferred to Ilmarinen Mutual Pension Insurance Company on
1 January 2010. The pension fund was placed into liquidation on the same date.
The pension fund will be permanently liquidated after completion of the 2009
pension liability distribution in November 2010.
OPERATING SEGMENTS
The Publishing in Sweden segment changed its name into Publishing Other Nordic
Countries on 1 January 2010. The content of the segment has not changed. After
the name change, the Group's operating segments are Publishing Finland,
Publishing Other Nordic Countries and Direct Marketing.
The event business acquired on 15 September 2010 belongs to the Publishing
Finland segment.
CHANGE IN SHARE QUANTITIES *
--------------------------------------------------------------------------------
| 1000 shares | 1-9/2010 | 1-9/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Shares outstanding at | 43,615 | 43,615 | 43,615 |
| the beginning of period | | | |
--------------------------------------------------------------------------------
| Number of shares | 43,615 | 43,615 | 43,615 |
| outstanding at end of | | | |
| period | | | |
--------------------------------------------------------------------------------
* Excluding own shares held by the company
For the period under review, the weighted average number of shares used in the
calculation of earnings per share during the financial period is 43,614,787
(43,614,787 shares 1-9/2009).
The number of shares issued is 44,295,787.
PERSONNEL BY SEGMENT, ON AVERAGE
--------------------------------------------------------------------------------
| | 1-9/2010 | 1-9/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Publishing Finland | 203** | 208 | 201 |
--------------------------------------------------------------------------------
| Publishing Other Nordic Countries | 227* | 178 | 176 |
--------------------------------------------------------------------------------
| Direct Marketing | 328 | 334 | 357 |
--------------------------------------------------------------------------------
| Other | 18 | 20 | 20 |
--------------------------------------------------------------------------------
| Total | 776 | 740 | 755 |
--------------------------------------------------------------------------------
* Includes the 79 people of the business information business acquired on 30
December 2009.
** Includes the 5 people of the event business acquired on 15 September 2010.
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
--------------------------------------------------------------------------------
| EUR million | 30.9.2010 | 30.9.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
| Carrying amount at the beginning | 1.3 | 1.6 | 1.6 |
| of period | | | |
--------------------------------------------------------------------------------
| Additions | 0.3 | 0.2 | 0.3 |
--------------------------------------------------------------------------------
| Acquisitions through business | - | - | 0.0 |
| combinations | | | |
--------------------------------------------------------------------------------
| Disposal of businesses | - | - | -0.0 |
--------------------------------------------------------------------------------
| Disposals | -0.2 | - | - |
--------------------------------------------------------------------------------
| Depreciation | -0.4 | -0.5 | -0.7 |
--------------------------------------------------------------------------------
| Carrying amount at the end of | 1.2 | 1.3 | 1.3 |
| period | | | |
--------------------------------------------------------------------------------
CHANGES IN INTANGIBLE ASSETS
--------------------------------------------------------------------------------
| EUR million | 30.9.2010 | 30.9.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
| Carrying amount at the beginning | 39.7 | 31.3 | 31.3 |
| of period | | | |
--------------------------------------------------------------------------------
| Additions | 0.5 | 0.7 | 1.0 |
--------------------------------------------------------------------------------
| Purchase price allocation | 0.8 | - | - |
--------------------------------------------------------------------------------
| Acquisitions through business | 2.5 | - | 7.6 |
| combinations | | | |
--------------------------------------------------------------------------------
| Disposals | - | -0.5 | -0.5 |
--------------------------------------------------------------------------------
| Amortisation | -1.6 | -0.9 | -1.2 |
--------------------------------------------------------------------------------
| Exchange rate differences | 3.8 | 1.7 | 1.6 |
--------------------------------------------------------------------------------
| Carrying amount at the end of | 45.8 | 32.3 | 39.7 |
| period | | | |
--------------------------------------------------------------------------------
RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------
| EUR million | 1-9/2010 | 1-9/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Employee benefits for key | 0.7 | 1.0 | 1.8 |
| management | | | |
--------------------------------------------------------------------------------
| Support payments to pension fund | - | 2.9 | 3.7 |
--------------------------------------------------------------------------------
| Associates and joint ventures: | | | |
--------------------------------------------------------------------------------
| Sales | 0.2 | 0.2 | 0.3 |
--------------------------------------------------------------------------------
| Liabilities | 0.3 | 0.3 | 0.5 |
--------------------------------------------------------------------------------
GUARANTEES AND CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
| EUR million | 30.9.2010 | 30.9.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
| Guarantees posted for own | | | |
| commitments | | | |
--------------------------------------------------------------------------------
| Financial institution loans | - | 0.2 | - |
--------------------------------------------------------------------------------
| Book value of shares pledged | - | 2.4 | - |
--------------------------------------------------------------------------------
| Business mortgage | - | 0.4 | - |
--------------------------------------------------------------------------------
| 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 | | | |
--------------------------------------------------------------------------------
Calculation of key indicators
Earnings per share = Profit for the period attributable to equity owners of the
parent company / Adjusted average number of shares at the end of the financial
period
Equity per share = Equity attributable to equity owner of the parent company /
Adjusted average number of shares at the end of the financial period
Return on invested capital, % = Income before taxes + interest and other
financial expenses / Balance sheet total - non-interest-bearing liabilities
(average of beginning and end of financial year) x 100
Return on equity, % = Result for the financial period / Total equity (average of
beginning and end of financial 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 capitalisation = Number of shares at the end of the financial period x
trading price at the end of the financial period
The figures in this release are unaudited.
General statement
The forecasts and estimates presented here are based on the management's current
view of economic development, and the actual results may differ substantially
from what is now expected of the company.
Financial information 2011
Talentum is planning to publish the results in 2011 as follows:
Financial statements bulletin 2010, 15 February 2011
January-March interim report, 29 April 2011
January-June interim report, 21 July 2011
January-September interim report, 27 October 2011
Talentum is planning to hold its next Annual General Meeting on 1 April 2011.
TALENTUM OYJ
Juha Blomster
Chief Executive Officer
ADDITIONAL INFORMATION
Chief Executive Officer Juha Blomster, telephone +358 40 342 4444
Chief Financial Officer Kaisa Kokkonen, telephone +358 40 342 4212
DISTRIBUTION
NASDAQ OMX Helsinki
Principal media
www.talentum.com
BRIEFING
A briefing in Finnish will be held for analysts and the media today, 27 October
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.
Talentum Oyj
Annankatu 34-36 B
FI-00100 Helsinki
Telephone +358 20 442 40
www.talentum.com
