Since 2008, Alma Media has implemented a significant structural transformation that has led to the digital business growing to account for a third of revenue. At the same time, the company has become more international by acquiring recruitment businesses in Eastern Central Europe. The profitability of the new businesses is at an excellent level. At the same time, the domestic operating environment is likely to remain difficult.
In the turn of the year 2014–2015, there are hardly any signs of the economy turning to sustainable growth, even in the long term in Alma Media's main market, Finland. The long-term outlook is weakened by structural problems in the economy and a decline in productivity.
The predicted extended period of slow growth is likely to affect consumer demand and investments in marketing communications in Finland.
In Eastern Central European countries, economic growth is expected to continue in the coming years. Brisk economic activity supports the growth and profitability of the recruitment business.
Digitisation has resulted in a substantial increase in the amount of content and services available to consumers, while also permanently changing consumers’ media behaviour. The fragmentation of media consumption is continuing with regard to media, services, the use of time, and devices. Competition for content and service provision is growing and loyalty to media brands is diminishing.
The rapid growth in the use of smartphones and tablets will continue, promoting growth in the mobile consumption of media content. Online video consumption will continue to see strong growth.
The consumer threshold for paying for digital content will remain high. Paid services must provide clear added value to the consumer compared to free and advertising-funded content.
In marketing, new forms of advertising, such as content marketing and native advertising, are growing in significance by complementing the services provided to consumers. In the digital advertising market, strong growth trends include the development of programmatic buying and self-service solutions, as well as mobile and video advertising. The role of behavioural data and analytics in business development will grow with regard to both content and advertising.
In 2015, Alma Media will continue to implement its strategy under four themes - while following our values.
- Multichannel content
- Marketing solutions
- Digital services
- Resources and expertise
A major goal announced by Alma Media in late 2013 is to increase the share of digital revenue to 50% by 2020. In 2014, the share of digital revenue was 32 per cent. The goal will be achieved provided that the long-term financial target of 15 per cent annual growth in digital revenue is realised.
Alma Media is also examining opportunities to implement its strategy through acquisitions. The acquisition opportunities being examined are related particularly to growing the recruitment business in Europe, digital business services in Finland, and various digital consumer services in Finland.
Alma Media’s long-term financial targets take into account the investments required for growth, repayment of debt taken to support growth, and the distribution of profit to shareholders.
On 31 December 2014, the Group’s parent company had distributable funds totalling EUR 179,932,379 (23,905,611). No essential changes in the company’s financial standing have taken place after the end of the financial year. Alma Media’s Board of Directors proposes to the Annual General Meeting that a capital repayment of EUR 0.12 (2013: EUR 0.10) per share be paid from the reserve for invested non-restricted equity for the financial year 2014. Based on the number of shares on the closing date 31 December 2014, the capital repayment totals EUR 9,058,422 (2013: EUR 7,548,685).
Outlook for 2015
Low interest rates, a weaker euro and lower oil price improve the chances for growth in the long run. However, in 2015, economic growth is still expected to remain weak in Europe and, in particular, in Finland. The weak overall economic growth has an impact on advertising volume, which is not expected to increase in Finland in 2015.
In the first half of 2015, Alma Media expects its revenue and operating profit excluding non-recurring items to decrease from the 2014 level. The revenue for the first half of 2014 was MEUR 148.4, and operating profit excluding non-recurring items MEUR 8.8.
Sustainable Media in 2015
The Sustainable Media corporate responsibility programme creates the framework for Alma Media’s responsibility.
In 2015, the focus areas of the programme are:
1. The development of transparent corporate communications and the brand
- Internal and external communication about the sustainability themes & development
- Linking the Sustainable Media programme and measures under it more strongly to the Alma Media corporate brand
- Achieving success in indices and surveys related to responsible investments, such as the Carbon Disclosure Project
2. Responsible influence
- Continuous participation in the promotion of economic and social well-being in society, such as the Responsible Summer Job 2015 campaign, VAMOS, the Pirkanmaa Me & My City
- Theme seminars linked to the business and marketing of sustainable development as well as digitisation & creating commitment among advertisers and media agency customers to marketing solutions and activities that are in line with the principles of sustainable business development.
- Advancement of responsibility in the media: including the Media CR Forum, FIBS, Climate Campaign, Procom’s corporate responsibility division
3. Development of environmental responsibility
- Preparation of the environmental certification of Alma Manu’s printing facility
- Development of the monitoring process of the achievement of environmental objectives and the verification of figures
4. Responsibility as an integral part of product and service development
- Incorporating responsibility as a central consideration in advertising and marketing, together with Alma Media’s media sales, as well as the long-term development of the environmental footprint of the advertising value chain
- Further integration of responsibility as part of ICT purchasing
- Customer engagement in Alma Media’s service development in order to guarantee the best responsible customer-driven service and product development.
5. Incorporating responsibility into the day-to-day work of all Alma Media employees
- Increasing well-being at work through the promotion of the continuous development of managerial work and diversity
- Improving occupational safety by developing accident prevention
- Engaging Alma Media employees and the different units of Alma Media in the development of corporate responsibility through work community communication and CR development projects.