Taking leaps to advance our strategy

Dear Shareholder,

The past year was particularly difficult for media companies. As a result of the general economic slump in the eurozone and a marked decline in the media markets, Alma Media fell short of its financial targets for 2012. Revenue grew by 1.2% to approximately MEUR 320, largely due to acquisitions. The operating profit was MEUR 26,5, or 8,3% of revenue, and earnings per share was EUR 0.22. Alma Media's Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.10 per share be paid for the financial year 2012.

Media use among consumers is undergoing a rapid diversification

Media use among consumers is undergoing a rapid diversification spurred by digital technology, particularly in the form of new mobile terminal devices such as smartphones and tablets. At the same time, the downward trend of print media is becoming increasingly emphatic.

Alma Media will take advantage of the opportunities presented by the market transformation by developing our publishing business into a combination of print and digital media, while also growing our digital service businesses aimed at both consumers and enterprises.

In 2012, we successfully carried out a series of significant acquisitions to strengthen our digital business

In 2012, we successfully carried out a series of significant acquisitions to strengthen our digital recruitment services business by adding local market leaders CV Online in the Baltic region, LMC in the Czech Republic, Profesia in Slovakia and several others to our portfolio. The acquisitions, most of which focused on the Eastern Central European markets, had a total value of some MEUR 65 and substantially strengthen Alma Media’s digital business operations.

We also revised the business model of the Etuovi.com housing portal in response to a sudden change in the domestic market situation, quickly becoming the Finnish market leader in housing advertisements posted by consumers.

We established Alma Diverso, a new unit that not only serves the digital business development needs of the entire Group, but also develops and refines digital services based on content targeted at consumers. Furthermore, we expanded our service offering by acquiring Finland’s number one paid online dating service e-Kontakti.

A significant first move towards paid digital content in the Finnish market

Kauppalehti implemented a new operating model with digital content accessible through paid product packages, which was a significant first move towards revenue generation in the Finnish market for online newspaper content. A simultaneous renewal of the printed newspaper, involving a shift in focus to in-depth journalism that contributes to the Finnish economy and society, also strengthened Kauppalehti’s position as the leading financial media in the country.

In publishing operations, Iltalehti continued to make convincing progress as a frontrunner on the path to multimedia. The most significant move of all was the consolidation of Alma Media’s regional and local newspapers into a single unit, Alma Regional Media. The restructuring of the organisation and adjusting the number of employees in line with the new operating model emphasising efficient cooperation was highly successful, with many joint editorial teams already fully operational in autumn 2012. The new approach to the production of local media also attracted interest outside Alma Media: welcome cooperation on content with Ilkka Group and certain other regional newspaper companies started in the beginning of 2013.

After colourful early stages, our investment in a new printing press in Tampere has progressed according to plan. Once commissioned in spring 2013, the new printing facility will provide a significant boost for efficiency, ensure high quality and open new product opportunities for the newspaper business.

The effects of rapid media transformation and the difficult market conditions have made the restructuring of operations unavoidable. Even as Alma Media has welcomed hundreds of new digital services experts to the company through acquisitions, there have been cutbacks in the number of personnel in publishing operations. Alma Media’s employees deserve recognition for having maintained their work ethic and professional attitude to cooperation even under difficult circumstances.

During the past year we made significant investments in improving working conditions, based on paying close attention to the needs of personnel. The most notable investments were the new office building completed in Helsinki’s Töölönlahti district and the new printing press in Tampere, both of which were designed to be highly eco-friendly.

I wish to extend my warmest thanks to everyone at Alma Media, our customers, shareholders and other stakeholders for the past year. Under the circumstances, 2012 was financially satisfactory, but from the standpoint of implementing our strategy, it was a year of great significance. 

Kai Telanne, President and CEO