The Group has five operating segments as shown in the table below. The operating segments that produce similar products and services are combined into reportable segments due to their uniform profitability and other uniform characteristics.
The change in the segment structure is due to the transformation of the business environment in the media industry, with media consumption increasingly shifting to digital channels.
Centralised services produced by the Group’s parent company and centralised digital support services for the entire Group are reported outside segment reporting.
|REPORTABLE SEGMENT:||OPERATING SEGMENT:|
|Digital Consumer Services
|Financial Media and Business Services||Financial Media and Business Services|
|National Consumer Media||National Consumer Media|
|Regional Media||Regional Media|
Changes in segment reporting:
- In the Digital Consumer Services segment, the centralised digital support services for the entire Group have been moved to non-allocated items outside segment reporting.
- The name of Kauppalehti Group was changed to Financial Media and Business Services.
- The new National Consumer Media segment consists of the IL-Media operating segment, previously reported under the Newspapers segment.
- The new Regional Media segment includes the Alma Regional Media operating segment, previously reported under the Newspapers segment, as well as the Group’s printing and distribution company Alma Manu, previously reported under the Other Operations segment.
- Other Operations no longer constitutes a separate segment. Instead, the operations of the Group’s parent company are reported as non-allocated items.
As the structure and composition of the reportable segments have changed, Alma Media has, in accordance with the IFRS 8 Operating Segments standard, adjusted the corresponding items in segment information for the 2013 comparison period. The effect of the change, as well as segment revenue and operating profit under the previous and newly adopted segment structures, is summarised in the Financial Statement Release pages 30 - 34.
Alma Media’s business segments
The Marketplaces and Alma Diverso operating segments are reported as part of the Digital Consumer Services segment.
Marketplaces comprises Alma Media’s digital classified advertising services. Classified advertising is focused on three main sectors: housing (Etuovi.com and Vuokraovi.com), recruitment (Monster.fi, Jobs.cz, Prace.cz, Topjobs.sk, CV Online, Profesia.sk, MojPosao.net, Monster.hu, Monsterpolska.pl and Monster.cz) and cars (Autotalli.com). In 2014, Alma Media sold City24, a housing portal operating in the Baltic countries, which was previously reported under Digital Consumer Services.
The Alma Diverso operating segment specialises in digital consumer and marketing services. The consumer services include Telkku.com, Kotikokki.net and E-kontakti.fi The marketing services aimed at businesses consist of Almascope and Meedio.
The Financial Media and Business Services segment is focused on the production of financial information, business information and marketing solutions. Its best-known product is Finland’s leading business paper, Kauppalehti. The segment also includes Kauppalehti Information Services, the business premises service provider Objektvision.se, and the custom media house Alma 360. In 2014, Alma Media sold BNS Group, a news agency and media monitoring unit operating in the Baltic countries, which was previously reported under Financial Media and Business Services.
The National Consumer Media segment reports the various publishing services of IL-Media.
The Regional Media segment includes the publishing activities of the more than 30 newspapers of Alma Regional Media and the Group’s printing and distribution company Alma Manu. The segment’s best-known title is Aamulehti.
Online advertising sales and service revenue continue to grow
In 2014, revenue from advertising sales declined by 0.6 per cent to MEUR 146.4 (147.3). Advertising sales for printed papers declined by 7.8 per cent from the comparison period to MEUR 73.7 (80.0), but online advertising sales grew by 9.4 per cent to MEUR 72.7 (66.5).
Content revenue declined by 4.5 per cent to MEUR 110.1 (115.3). Content revenue declined due to the decline of print subscriptions and single-copy sales.
Service revenue increased to MEUR 38.8 (37.6).
In publishing, which includes regional, local and city newspapers, the daily tabloid Iltalehti and the financial media Kauppalehti with their respective online services, business is based on a relationship with readers built through good journalistic content. As media develops, the reader relationship becomes a multidimensional customer relationship with a media brand. The strength of this relationship can vary from an occasional website visit to an ongoing newspaper subscription and the use of online services as a paid and registered user.
The reader relationship and the resulting coverage of the desired target audience are the foundation of advertising sales. The combined reach of Alma Media's brands has increased in recent years as a result of strong growth in website visitors. Alma Media reaches currently 3.3 million Finns every week. Media brand's reader relationships and their strong regional visibility also enable the extension of brands to new areas such as digital services.
In order to offer better service for readers and advertisers, it is important to measure the reader relationship. In the third quarter of 2014 Alma Media started together with Sanoma Media Finland, Yleisradio (Finland's national public service broadcasting company) and MTV a joint development project for audience measurement. The project lasts for few years and its goal is to create common methodology and terminology for measurement and to advance the design development of new media planning tools. Company called Media Metrics Finland was established to lead the project and the goal of the company is to understand the media consumption in Finland even better.
The revenue of Alma Media’s digital services (such as Etuovi.com, Autotalli.com, Monster.fi, Prace.cz, Telkku.com and E-kontakti.fi) is based on fees charged for classified advertising, display advertising, service sales as well as revenue streams from service content and/or advertising targeted at the users of the service. The customers of digital services include both businesses and consumers.
In the competition for market share, brand appeal is of crucial importance. Alma Media’s digital services are the best-known brands in their segments in Finland, the Baltic States, the Czech Republic, Slovakia and other countries the Group operates in. The popularity of these services among users is based on a high level of usability, unique content and, in many cases, the importance of the social or communal dimension. For an advertiser, this opens up valuable opportunities to specifically target the businesses or consumers in a particular category.