Alma Media Oyj · OMXHEX:ALMA
Alma Media Oyj — Investor Day (November 2009)
65 slides from Alma Media Oyj's investor day presentation, Nov 27, 2009
Slide 1: Welcome to the Capital Markets Day
Welcome to the Capital Markets Day off Alma Media Corporation November 27, 27 2009
Slide 2: Programme
Programme • Introductions • Media Future Preview • Strategy update – Kai Telanne, President & CEO • Questions & Answers Lunch (12 noon) Alma Media Corporation / CMD 2009 / Kai Telanne
Slide 3: The future of media?
The future of media? Alma Media Corporation / CMD 2009 / Kai Telanne 3
Slide 4: Alma Media – transforming the media business
Alma Media – transforming the media b i business Capital Markets Day Kai Telanne, President & CEO
Slide 5: Plenty of transformation issues to solve
Plenty of transformation issues to solve The habits of the New distribution Revenue from digital generation channels online content Digital Co-operation p with New breed concepts other publishers of content for advertisers Future Synergistic Transforming of newspaper operating models revenue models
Slide 6: The change of the media landscape is taking place fast
The change of the media landscape i taking is t ki place l f t fast. Will Alma Media be fast enough to renew the business model? Alma Media Corporation / CMD 2009 / Kai Telanne 6
Slide 7: Alma Media will lead this transformation process
Alma Media will lead this transformation process Alma Media Corporation / CMD 2009 / Kai Telanne 7
Slide 8: The structure of this presentation
The structure of this presentation • Alma Media today • Strategy towards the future • Some answers to future questions • Summary •Q&A Alma Media Corporation / CMD 2009 / Kai Telanne 8
Slide 9: Where are we today?
Where are we today?
Slide 10: Net sales & EBIT 2005 - E2009
Net sales & EBIT 2005 5 - E2009* 9 w/o onetime items Net sales, MEUR EBIT, MEUR *E2009: 400 Reuters 60,0 consensus *E2009: 350 mean Nov Reuters 20, 2009 50 0 50,0 52 9 52,9 consensus 341,2 300 328,9 47,7 mean Nov 310,0 46,4 20, 2009 301,9 285,9 40,0 42,1 250 39,0 200 30,0 150 20,0 100 10,0 50 0 00 0
Slide 11: Key ratios in 2009
Keyy ratios in 2009 9 Equity ratio, % Gearing, % ROE% ROI% 70 8 60 60 53,7* 60 63 4 63,4 6 65 6,5 50 50 57,2 50 4 46,2* 39,0* 40 40 40 2 30 30 41,0* 30 0 20 20 20 2 -2 10 10 10 -4 -3,7 0 -6 0 0 Q4 08 Q3 09 Q4 08 Q3 09 Q3 08 Q3 09 Q3 08 Q3 09 One time items Alma Media Corporation / CMD 2009 / Kai Tel
Slide 12: Newspaper circulations on healthy level
Newspaper circulations on healthy level CHANGE TREND 2007-2008 2009-2010 Circulations of Alma -0,5 % Discontinuation of free copies regional i l papers will cause a drop in circulations Circulations of all 7-day -1,0 , % newspapers, combined bi d Circulation of Discontinuation of free student Kauppa
Slide 13: Newspapers have good reach
Newspapers have good reach Coverage by age group, % Alma Media Corporation / CMD 2009 / Kai Telanne 13
Slide 14: Media usage of young people during a week
Media usage of young people during a week % of 15–24-year-olds 100 80 60 2005 2006 40 2007 20 2008 0 Magazines Motion Internet Literature News- Video/ Sound Radio TV pictures papers DVD recordings Source: Atlas TNS Gallup Alma Media Corporation / CMD 2009 / Kai Telanne 14
Slide 15: Strong online position 2007–2009
Strong online position 2007–2009 Weekly visitors of Alma Media web services (million browsers) 2007 2008 2009 18 1.8 33 3.3 Source TNS Metrix. Visitors as yearly average figure, 2009 figure is 1-9/2009 average. Duplicate use not taken into account. Alma Media Corporation / CMD 2009 / Kai Telanne 15
Slide 16: Market share improving in the falling market (Etuovi)
Market share improving in the falling market Et Etuovi i market k t share h d development l t 30 20 18 25 16 et size, MEUR 11,2 14 9,8 et share, % 20 9,1 12 7,7 15 10 7,4 Marke 7,6 6 1 7,1 Marke 7 8 7,8 8,2 7,5 8,8 8,3 7,7 9,1 10 8,5 6 15,3 14,4 13,9 12,0 10,3 4 9,1 9,0 5 7,4 6,,9 6,,6 6,3 9 6,0 0 9
Slide 17: Market share improving in the falling market (Autotalli)
Market share improving in the falling market Autotalli market share development 10 12 % 9 10 % 8 Market sizze, MEUR ket share 7 8% 6 0% 10,6 % 10,4 % 5 6% Mark 11,0 8,2 % 4 8,0 % 8,0 % 8,0 % 6,7 % 4% 6,5 % 6,4 % 6,3 % 3 5,6 % 5,3 % 5,2 % 5,0 % 2 2% 5 1 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 18: Market share improving in the falling market (Monster)
Market share improving in the falling market Monster market share development 25,0 14,0 % 12,0 % 20 0 20,0 10,0 % Market siize, MEUR 15,0 Markett share 8,0 % 22,,7 20,5 6,0 % 10,0 18,0 17,4 17,1 16,2 16,1 15,9 15,6 14,1 13,2 13,0 12,7 4,0 % 12,1 12,0 11,0 9,6 5,0 7,5 6 6,6 20% 2,0 0,0 0,0 % Q1 Q2 Q3
Slide 19: The strategy towards the future
The strategy towards the future
Slide 20: Online media as the second support leg
Online media as the second support leg Market size & market share estimates for 2009 ALMA’S ALMA S FUTURE GROWTH MARKET ~20 % ~23 % ~18 % % SHARE % 800 25 700 20 600 500 5 15 400 10 300 WEB NEWSPAPER NEWSPAPER ADVERTISING CIRCULATION ADVERTISING GROWTH 200 SALES GROWTH p.a. NEWSPAPER NEWSPAPER 5 GRO
Slide 21: Online sales & other sales
Online sales & other sales 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% 2005 2006 2007 2008 E2009 E2010 E2011 E2012 E2013 E2014 Excl. online sales Online sales Alma Media Corporation / CMD 2009 / Kai Telanne 21
Slide 22: Cornerstones of Alma's strategy
Cornerstones of Alma’s strategy CHAINING OPERATIONS RENEWAL Competitive advantage and capabilities From newspaper into a through managed internal combination of paper and online cooperation and projects complementing each other THE WINNING TEAM IN NEWSPAPER AND ONLINE MEDIA INTERNATIONALISATION MERG
Slide 23: Mergers & acquisitions
Strategic cornerstone Mergers & acquisitions
Slide 24: Mergers & acquisitions as accelerators of organic growth
Mergers g & acquisitions q as accelerators of organic growth • Talentum – Strategic shareholding approved by Competition Authority – Ownership after mandatory tender offer: 32.14 % • Consolidation in Finland • Russia R i Alma Media Corporation / CMD 2009 / Kai Telanne 24
Slide 25: Internationalisation
Strategic g cornerstone Internationalisation
Slide 26: Mascus: International status and future markets
Mascus: International status and future markets MASCUS IN 2009 2010 2011 Europe • Scandinavia • Italy • Turkey • Bulgaria • Central Europe • Spain • Croatia • UK & Ireland, ia. • Russia Asia/ • Australia • China • South Korea • Thailand • Philippines Oceania • Parts of Indonesia • Taiwan • India • V
Slide 27: Renewal
Strategic cornerstone Renewal
Slide 28: Einstein quote on ideas
"If att first fi t th the id idea is not absurd, absurd then there is no hope for itit". Albert Einstein
Slide 29: The need for renewal in the media business
The need for renewal in the media business TECHNO- LOGICAL PROGRESS MEDIA CONSUMP- TION CHANGES CHALLENGES IN MEDIA BUSINESS RENEWAL: PRODUCTS, PROCESSES PROCESSES, COMPETENCIES Alma Media Corporation / CMD 2009 / Kai Telanne 29
Slide 30: The elements of innovation in the organisation
The elements oof innovation o o in the organisation INNOVATIVENESS CHANNELS Innovation process Innovation group ATMOSPHERE Systems CULTURE MANAGEMENT Management methods Vision, strategy Working g methods p Development projects p j RESOURCES AND CAPABILITIES Alma Media Corporation / CMD 2009 / Kai Te
Slide 31: Innovation as an evolving process
Innovation as an evolving process 2007 2008 2009 2010 Innovation vision Objectives j and Future Media 2015 Innovation Innovation guidelines – idea project processes in all workgroup Renewal index for entire staff business units adopted Initiative system Rewards Active ”Helmi” system supporting commu
Slide 32: Chaining operations
Strategic cornerstone Chaining operations
Slide 33: Synergistic network organisation
Synergistic network organisation HIGH HIGH Group structure Structure of with centralised synergistic network Capability of management organisation managing g g the entity and exploit synergies & Process and systems unity Group structure with decentralised management g LOW LOW Sensitivity to customer
Slide 34: Chain operation as model for internal cooperation
Chain operation p as model for internal cooperation 2009 2012 Centralisation and TARGET: reorganisation of printing and distribution operations Joint development projects Increased content Radical changes in structures cooperation and operating models Increased online advertising Developing renewal
Slide 35: Cooperation with other publishers
Cooperation with other publishers Printing Distribution Paper purchases Research programmes p g Newspaper printing facilities in Finland, 2009 Alma Media Corporation / CMD 2009 / Kai Telanne 35
Slide 36: Content strategy
Content strategy
Slide 37: Towards new breed of content and services
Towards new breed of content and services NEW SERVICES AND SERVICE • Strong media brands CONTENT support operational DEBATE expansion new kind of ENTER- services and content TAINMENT NEWS CONTENT Alma Media Corporation / CMD 2009 / Kai Telanne 37
Slide 38: Case Iltalehti
Case Iltalehti: • Strong news content of traditional print media enables new services for readers – New revenue streams for Iltalehti include b k sales book l packages k as a successful f l trial i l Alma Media Corporation / CMD 2009 / Kai Telanne 38
Slide 39: Case Iltalehti.fi
Case Iltalehti.fi: Iltalehti fi: • New breed of online content raised Iltalehti.fi to be the most popular news medium among young adults • # 2 advertising media for 20-29 year age group is Iltalehti.fi Alma Media Corporation / CMD 2009 / Kai Telanne 39
Slide 40: Service-oriented journalism, case Aamulehti and H1N1 epidemic
Alma Media Corporation / CMD 2009 / Kai Telanne 40 Service-oriented journalism, case Aamulehti and H1N1 epidemic
Slide 41: Media growing into service
Media g growing g into service Business media Corporate service market market ? ? ePortti BC Yritykset Market information services ? ? Online media Online media Print media Print media
Slide 42: Leading the transformation
a. — No / ~ i 4 Ud p 9 ~ y | Wy Leading
Slide 43: Solutions to transformation issues?
Solutions to transformation issues? Changes in New distribution Revenue from consumer channels online content behaviour Digital Co-operation p with New breed concepts other publishers of content for advertisers Future Synergistic Transforming of newspaper operating models revenue models printing Alm
Slide 44: Solutions to transformation issues? (consumer behaviour)
Solutions to transformation issues? Changes in Listening & understanding consumer Dialogue with the digital generation behaviour New distribution Paper will prevail channels Involvement in R&D Revenue from Payment models online content Unique, useful content Alma Media Corporation / CMD 2009 / Kai T
Slide 45: Solutions to transformation issues? (content, advertisers)
Solutions to transformation issues? Co-operation with Printing other publishers Distribution Digital concepts Offer advertising as a service for advertisers Differentiated content New breed Service journalism of content User g generated content Alma Media Corporation / CMD 2009 / Kai Telanne 45
Slide 46: Solutions to transformation issues? (operating and revenue models)
Solutions to transformation issues? Synergistic Radical change in ways to cooperate internally operating models Transforming g New services & p products for both p print and revenue models online New content Future of newspaper Content will be king also in the future printing Distribution methods va
Slide 47: The change is taking place fast
The change is taking place fast. Will Alma Media be fast enough to renew the h business b i model? d l Alma Media Corporation / CMD 2009 / Kai Telanne 47
Slide 48: We have ability, agility and ambition
We have ability, bilit agility ilit and d ambition biti to lead the transformation process p successfully. Alma Media Corporation / CMD 2009 / Kai Telanne 48
Slide 49: Questions?
~ 4 Questions?
Slide 50: Appendix material
Appendix material
Slide 51: Newspapers and online media in Finland
Newspapers p p and online media in Finland NATIONAL NEWSPAPERS REGIONAL AND LOCAL NEWSPAPERS + ONLINE SERVICES SUPPORTING EACH PUBLICATION Alma Media Corporation / CMD 2009 / Kai Telanne 51
Slide 52: Online services in Finland
Online li services i i Finland in i l d REAL JOBS VEHICLES ESTATES CONSUMER ADS Telkku.com Alma Media Corporation / CMD 2009 / Kai Telanne 52
Slide 53: Marketplaces as the driver for international expansion
Marketplaces p as the driver for international expansion SWEDEN BALTIC COUNTRIES Bovision Objektvision City24 Mascus Baltic News Service UK UKRAINE POLAND Mascus CROATIA SERBIA City24 Alma Media Corporation / CMD 2009 / Kai Telanne 53
Slide 54: Key figures Q3 2009, MEUR
Key figures Q3 2009, MEUR Net sales, MEUR EBIT, MEUR 100 14 -4,5% 90 12 12,2 80 86,6 11,7 -10,3% 10 3% 79,3 10 76,4 0,0 70 73,0 9,5 8 60 7,5 50 6 40 4 30 2 20 10 0 -0,2 -0,5 -1,0 0 -2 Q4 08 Q1 09 Q2 09 Q3 09 Q4 08 Q1 09 Q2 09 Q3 09 Onetime items Alma Media Corporation / CMD 2009 / Kai Telanne 54
Slide 55: Net sales change by type
Net sales change by type Circulation, MEUR Advertising, g MEUR 1,0 4,0 0,8 2,0 0,6 0,0 0,4 +1,0 -2,0 0,2 -4,0 -0,8% 0,0 -6,0 -0,2 -8,0 -17,6% -20,4% -0,4 -10,0 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Alma Media Corporation / CMD 2009 / Kai Telanne 55
Slide 56: Sales and expenses breakdown
Sales and expenses breakdown Sales 73,0 meur Advertising sales (41,8%) Sensitivity analysis Circulation sales (47,1%) Factor (Full year Change (%- (% Impact on Other sales (11,1%) impact) point) EBIT, MEUR Media advertising + 1.0 % 1,4 Wages and salaries + 1.0 % -1,1 Expenses 61,3 meur (w/o onetime
Slide 57: Sales and expenses breakdown
Sales and expenses breakdown Sales 73,0 meur Advertising sales (41,8%) Sensitivity analysis Circulation sales (47,1%) Factor (Full year Change (%- (% Impact on Other sales (11,1%) impact) point) EBIT, MEUR Media advertising + 1.0 % 1,4 Wages and salaries + 1.0 % -1,1 Expenses 61,3 meur (w/o onetime
Slide 58: Debts
Debts Net, MEUR 30 25 19,8 20 15 10 5,8 3,8 MEUR 5 0,8 0,3 0 M -5 -3,2 -10 -15 -20 -25 Q 07 Q1 0 Q2 07 Q 0 Q3 0 07 Q 07 Q4 0 Q1 08 Q Q2 08 Q Q3 08 Q 08 Q Q4 Q1 09 Q2 09 Q Q3 09 Dividends Dividends Dividends 20.3.07 48.5 MEUR 27.3.08 67.2 MEUR 25.3.09 22.4 MEUR Alma Media Corporation / CMD 2009 / Kai
Slide 59: EPS and shareholders' equity per share
EPS and shareholders' equity per share 0,12 1,40 0,10 1,20 0,08 1,00 0 54 0,54 0 52 0,52 0,06 0,11 0,80 0,11 0,04 0,60 0,02 0,40 0,64 0,64 0 00 0,00 -0,01 0 01 0 20 0,20 -0,02 0,00 Q3 08 Q3 09 Q4 08 Q3 09 One time items Retained earnings EPS w/o one time items Restricted equity Alma Media Corporatio
Slide 60: Advertising sales change 10/2008 - 10/2009
Advertising sales change 10/2008 - 10/2009 20 % 15 % 10 % 5% 0% -5 % -10 % -15 % -20 % -25 25 % -30 % Advertising sales total, chg % Newspaper advertising, chg % Internet advertising, chg % Alma Media Corporation / CMD 2009 / Kai Telanne 60 * Source: TNS Media Intelligence
Slide 61: Advertising by branch 1-10 2009
Advertising g byy branch 1-10 2009 9 Change from 1-10 2008, estimate Advertising in 1-10 09 MEUR 13 8 % -13,8 R t il Retail Retail 201 -11,3 %Food & bev. Food & beverages 75 -28 1 % -28,1 Motor vv. Motor vehicles 74 -6,7 %Entert Entertainment 36 -36,3 % Houses Houses and premises 36 -11,7 % Tourism
Slide 62: Advertising sales change Q3/2009
Advertising sales change Q3/2009 Alma Media vs. market Market Alma Media Change, % Q3/09 * Q3/09 Newspapers -23,4 -21,7 ** Magazines -22 22,7 7 - Television -13,6 - Radio -10,3 10 3 - Internet -4,8 -12,3 TOTAL -19,5 19 5 -20,4 20 4 Alma Media Corporation / CMD 2009 / Kai Telanne 62 * Source: TNS Med
Slide 63: Dividends
Dividends • The Annual General Meeting of Alma Media decided to pay a dividend of 0.30 euro per share for the financial year 2008. • In addition, the AGM authorised the Board to decide upon additional dividends of max. 0.20 euro per share. • The Board of Alma Media Corporation has decided not to use
Slide 64: Outlook for 2009
Outlook for 2009 • Alma Media expects the full-year comparable net sales and operating profit to decrease from the 2008 level as a result of the decline in advertising sales. • In the last quarter, net sales will fall behind the levels of the corresponding di periodi d iin 2008, 8 bbut operating i p
Slide 65: Thank You!
Thank You!