Ilkka-Yhtymä Oyj Financial Statements Bulletin, 24 February 2010, at 3 p.m.
THE ILKKA-YHTYMÄ GROUP'S FINANCIAL STATEMENTS FOR 2009
FINANCIAL YEAR 2009
- Net sales: EUR 48,811 thousand (EUR 55,384 thousand in 2008), down 11.9%
- Operating profit: EUR 10,482 thousand (EUR 10,776 thousand), down 2.7%
- Operating profit excluding Alma Media and other associated companies amounted
to EUR 7,463 thousand (EUR 10,728 thousand), a drop of 30.4%
- Operating profit 21.5% of net sales; 15.3% excluding Alma Media and the other
associated companies (19.4%)
- Pre-tax profits: EUR 13,495 thousand (EUR 15,616 thousand), down 13.6%
- Earnings per share: EUR 0.55 (EUR 0.70)
- The Board of Directors proposes a per share dividend of EUR 0.35
Q4/2009
- Net sales: EUR 12,797 thousand (EUR 14,442 thousand), down 11.4%
- Operating profit: EUR 3,506 thousand (EUR 2,592 thousand), up 35.3%
- Operating profit excluding Alma Media and the other associated companies
amounted to EUR 1,651 thousand (EUR 2,612 thousand), a drop of 36.8%
- Operating profit totalled 27.4% of net sales; 12.9% excluding Alma Media and
the other associated companies (18.1%)
- Pre-tax profits: EUR 3,502 thousand (EUR 1,504 thousand), up 132.8%
- Earnings per share: EUR 0.12 (EUR 0.06)
MATTI KORKIATUPA, MANAGING DIRECTOR:
“The vision of our communications company is based on operating in sync with the
times, and our strategy is based on profitable growth, customer-orientation, a
competent and motivated staff, and network-like operating methods coupled with
satisfied owners.
Since organic growth in the conventional media sector has been unremarkable in
the last few years, our growth strategy is based on networking with other actors
in the sector, as well as on corporate acquisitions. On 10 August 2009,
Ilkka-Yhtymä acquired 7,500,000 shares in a transaction that made Ilkka-Yhtymä
the principal shareholder in Alma Media Corporation, commanding a 20.4-per cent
stake in the company. The around 10-per cent increase in our holding in Alma
Media promotes our strategy, in accordance with which we will concentrate our
long-term investments in strategic targets, with the investment focus falling on
possible industry restructuring. As a nationwide, even partly international
company, Alma Media has huge potential for growth, and we will be able to report
our share of Alma Media's profit in Ilkka-Yhtymä's financial statements.
Ilkka-Yhtymä used the assets accumulated in the share issue carried out in
September for the refinancing of the Alma Media share purchase. As a result of
this share issue, we were able to strengthen our capital structure, while also
bringing our equity ratio once again to 70 per cent.
Due to the economic downturn, the volume of media advertising dropped by nearly
20%, while print operations volumes decreased as media advertising reduced the
number of pages ordered. In spite of wariness among consumers, newspapers'
circulation income enjoyed slight growth due to price increases.
In order to ensure our profitability, we adapted our costs by means of both
rapidly effective measures and a development programme whose impact will be felt
in the years 2010 to 2011. The goal of this development programme is to improve
the efficiency and competitiveness of both our publishing and printing business.
This remodelling entails an emphasis on the brands of our customer-oriented
magazines, while enhancing the efficiency of our operations by means of more
extensive networking and co-operation. The Group's publishing operations were
concentrated in I-Mediat Oy on 1 January 2010, while the entire printing
operation of I-print Oy was transferred to the Seinäjoki unit at the turn of the
year. We have implemented function-based management, with the objective of
achieving higher-quality management across all of our functions.
We forecast that net sales in our publishing business will enjoy slight growth,
but, as those of the printing business drop, Group net sales will decrease
slightly year-on-year. In order to ensure our competitiveness, we will continue
to place an emphasis on the development of multi-channel journalistic content
and commercial services, in accordance with the roles of our various paper
groups, as well as on the development of I-print's innovative printing and
communications services.
BUSINESS ENVIRONMENT
In its Economic Bulletin of 18 December 2009, the Ministry of Finance estimated
the drop in Finland's GDP in 2009 at approximately 7.6 per cent. The global
economy has recovered from the lowest point of the recession, but the economic
growth rate is expected to remain moderate. Finland's economy will also begin
its slow recuperation, with GDP growth estimated at 0.7 per cent.
Private consumption is estimated to have dropped by around two per cent in 2009.
Although consumer saving will keep increasing due, for instance, to caution
exercised as a result of the unemployment risk, consumption is forecast to show
moderate growth in 2010.
A consumer survey conducted by Statistics Finland in January reported that
consumers' confidence in the economy improved in Q4/2009 by a little over 3
points across the nation, showing a positive result in all provinces.
According to a survey conducted by TNS Gallup Oy and commissioned by the Finnish
Advertising Council, media advertising decreased by 15.8 per cent in 2009.
Advertising in newspapers decreased by 21.6 per cent, while advertising in free
sheets dropped by 18.7 per cent. Newspapers and free sheets accounted for 37.5
per cent and 5.4 per cent of media advertising, respectively.
GROUP STRUCTURE
The Ilkka-Yhtymä Group is a media group that consists of the parent company
Ilkka-Yhtymä Oyj, the publishing company I-Mediat Oy as well as the printing
company I-print Oy. On 31 December, the Group's publishing companies Sanomalehti
Ilkka Oy and Pohjanmaan Lähisanomat Oy were merged with Vaasa Oy, the name of
which was changed into I-Mediat Oy on 1 January 2010.
The Group also includes two property companies, Kiinteistö Oy Seinäjoen
Koulukatu 10 and Seinäjoen Kassatalo Osakeyhtiö, as well as Pohjalaismediat Oy.
Our main products are the regional newspapers Ilkka and Pohjalainen, five local
newspapers (Viiskunta, Komiat, Järviseutu, Suupohjan Sanomat and Jurvan
Sanomat), two free sheets, Vaasan Ikkuna and Etelä-Pohjanmaa, as well as the
online and mobile services of these papers, and the printing products and
services of I-print Oy. The associated companies included in our consolidated
financial statements are Alma Media Corporation, Arena Partners Oy, Väli-Suomen
Media Oy and Yrittävä Suupohja Oy.
CONSOLIDATED NET SALES AND PROFIT PERFORMANCE
Consolidated net sales dropped by 11.9 per cent, amounting to EUR 48,811
thousand (EUR 55,384 thousand in 2008). External net sales from publishing
operations decreased by EUR 4,838 thousand (10.9%) while external net sales from
the printing business decreased by EUR 1,737 thousand (16.0%). Circulation
income accounted for 39 per cent of consolidated net sales, while advertisement
income and printing income represented 42 per cent and 19 per cent,
respectively. Other business income totalled EUR 369 thousand (EUR 626
thousand). The 2008 figures include EUR 213 thousand in capital gains on fixed
assets.
The Group expenses for the financial year totalled EUR 41,707 thousand (EUR
45,280 thousand), while costs decreased by 7.9%. Excluding the depreciation
included in the costs, all other costs showed a drop. As a result of cooperation
negotiations conducted at Ilkka-Yhtymä in March, arrangements concerning holiday
bonuses were agreed together with the personnel. These arrangements resulted in
approximately EUR 1 million in cost savings in 2009. Expenses from materials and
services and other operating costs decreased as a result of a reduction in
volumes, and measures taken to enhance business efficiency.
The share of the associated companies' result was EUR 3,019 thousand (EUR 48
thousand). Consolidated operating profit for the year amounted to EUR 10,482
thousand (EUR 10,776 thousand), down by 2.7 per cent year-on-year. The Group's
operating margin was 21.5 per cent (19.5%). Operating profit excluding Alma
Media and the other associated companies amounted to EUR 7,463 thousand (EUR
10,728 thousand), representing 15.3% (19.4%) of net sales.
Net financial income came to EUR 3,013 thousand (EUR 4,840 thousand), financial
assets at fair value through profit or loss accounting for EUR 992 thousand (EUR
-1,115 thousand). Net financial income figures for 2009 included EUR 2,316
thousand (EUR 6,947 thousand) in dividend yields from Alma Media Corporation.
Interest expenses amounted to EUR 964 thousand (EUR 1,626 thousand).
Pre-tax profits totalled EUR 13,495 thousand (EUR 15,616 thousand). Direct taxes
amounted to EUR 1,995 thousand (EUR 2,086 thousand). The Group's net profit for
the period totalled EUR 11,500 thousand (EUR 13,530 thousand), with earnings per
share standing at EUR 0.55 (EUR 0.70).
Q4 NET SALES AND PROFIT PERFORMANCE
In Q4/2009, consolidated net sales totalled EUR 12,797 thousand (EUR 14,442
thousand), down by 11.4 per cent. Net sales decreased for both the publishing
and printing operations.
In Q4, the Group's expenses totalled EUR 11,225 thousand (EUR 11,948 thousand).
The associated companies' impact on profit and loss totalled EUR 1,855 thousand
(EUR -21 thousand). Q4 operating profit stood at EUR 3,506 thousand (EUR 2,592
thousand). Operating profit was up 35.3 per cent year-on-year. The Group's
operating margin was 27.4 per cent (17.9%). Operating profit excluding Alma
Media and the other associated companies amounted to EUR 1,651 thousand (EUR
2,612 thousand), representing 12.9% (18.1%) of net sales.
Net financial income came to EUR -4 thousand (EUR -1,088 thousand), financial
assets at fair value through profit or loss accounting for EUR 155 thousand (EUR
-642 thousand). Interest expenses were down EUR 324 thousand year-on-year.
Pre-tax profits in Q4 totalled EUR 3,502 thousand (EUR 1,504 thousand).
CONSOLIDATED BALANCE SHEET AND FINANCING
The consolidated balance sheet total came to EUR 147,060 thousand (EUR 76,328
thousand), with EUR 100,298 thousand (EUR 23,083 thousand) of equity. Equity
ratio was at 69.0 per cent (30.9%) and shareholders' equity per share stood at
EUR 3.91 (EUR 1.20). During the financial period, Ilkka-Yhtymä Oyj executed a
share issue which raised approximately EUR 38,410 thousand, excluding the
expenses entailed by the issue. Since Ilkka-Yhtymä's holding in Alma Media
changed and resulted in the latter becoming an associated company on 10 August
2009, the valuation loss (EUR 31,509 thousand) on available-for-sale shares
assigned in the fair value reserve under shareholders' equity was transferred to
shares in associated companies, not recognised through profit or loss. Following
this, shares in associated companies have been reported at cost and
shareholders' equity has been increased by the amount transferred. On the
reporting date of 31 December 2009, the market value of the holding in Alma
Media Corporation exceeded its purchase price.
The purchase of shares in Alma Media was financed on a temporary basis through a
debt-financing-type short-term loan arrangement. This temporary financing was
repaid at the end of September. Interest-bearing liabilities at year-end
totalled EUR 37,749 thousand (EUR 43,607 thousand).
With regard to liquidity, the year-end current ratio stood at 1.06 (0.79). Cash
and cash equivalents amounted to EUR 6,648 thousand (EUR 2,321 thousand). Cash
flow from operations totalled EUR 11,081 thousand (EUR 9,355 thousand) during
the year. Cash flow from investments EUR -34,945 thousand (EUR -48,598 thousand)
includes investments in Alma Media Oyj's shares.
PUBLISHING
The Group's publishing segment comprises the publishing company I-Mediat Oy. The
publishing operations of three distinct companies in the Group (Vaasa Oy,
Sanomalehti Ilkka Oy, Pohjanmaan Lähisanomat Oy) were concentrated in one
company on 1 January 2010. During the year, net sales from publishing totalled
EUR 39,826 thousand (EUR 44,648 thousand). Net sales for both regional papers
belonging to the publishing segment, Ilkka and Pohjalainen, decreased. Net sales
for local newspapers remained at the previous year's level. Operating profit
from publishing declined by 37.8 per cent year on year, to EUR 5,582 thousand
(EUR 8,976 thousand).
Certain, significant uncertainty factors still affect the predictability of
Ilkka-Yhtymä's publishing business in 2010. However, it is estimated that net
sales for the publishing business will undergo slight growth from 2009. The drop
in media sales is estimated to stall, with circulation income expected to grow
slightly as a result of price increases.
PRINTING
The printing segment comprises the printing house I-print Oy. The segment's net
sales amounted to EUR 18,032 thousand (EUR 20,181 thousand). Net sales were down
by 10.6 per cent year-on-year. External net sales from the printing business
decreased by EUR 1,737 thousand (16.0%). Operating profit from printing
increased by 1.3 per cent year-on-year, to EUR 2,615 thousand (EUR 2,580
thousand).
In the printing business, the 2010 market situation is expected to be extremely
difficult. In all likelihood, the economic downturn will persist, posing
challenges for printing and the related activities. Net sales will drop markedly
as a result, for instance, of the termination of the HSS Media account. In the
last two years, HSS Media newspapers' share of I-print Oy's net sales has
totalled around 15 per cent.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses for 2009 totalled EUR 294 thousand. Our R&D
has been customer-oriented, generating local and national services related to
news reporting, transactions, communities and leisure time. With regard to the
Group's printing business, development activities were focused on the
development of value-added services and products. The emphasis was placed on
Internet-based services, with kampanjakanava.fi and vaalikanava.fi being the
most significant product launches.
CAPITAL EXPENDITURE
Reported capital expenditure for the year totalled EUR 37,427 thousand, with
printing accounting for EUR 425 thousand and publishing for EUR 538 thousand. In
2009, a total of EUR 36,310 thousand was invested in available-for-sale and
associated company shares. In August, Ilkka-Yhtymä Oyj purchased a total of
7,500,000 shares in Alma Media Corporation at a per-share price of EUR 4.75.
Following this purchase, Ilkka-Yhtymä Oyj's holding in Alma Media Corporation
increased from 10.3% to 20.4% and Alma Media Corporation thus became an
associated company of Ilkka-Yhtymä Oyj.
ACQUISITION OF ALMA MEDIA CORPORATION'S SHARES AND SHARE ISSUE
On 1 July 2009, Ilkka-Yhtymä signed a conditional agreement with Skandinaviska
Enskilda Banken AB (publ)'s Helsinki branch (”SEB”) regarding the purchase of an
aggregate of 7,500,000 shares in Alma Media Corporation at a per share price of
EUR 4.75. The purchase was conditional on the approval of the Ilkka-Yhtymä
Extraordinary General Meeting (EGM) held on 10 August 2009 of an authorisation
to issue new shares in the company for refinancing the share purchase, as well
as certain technical amendments to the Company's Articles of Association. The
EGM's decisions approved the proposals made by the Board of Directors, and the
share purchase between Ilkka-Yhtymä and SEB was executed as planned through the
OMX Nordic Exchange Helsinki, on the same day of 10 August 2009. Following the
purchase, Ilkka-Yhtymä Oyj's holding in Alma Media Corporation increased to
20.4% of shares and voting rights, and Alma Media Corporation thus became an
associated company of Ilkka-Yhtymä Oyj. The purchase of shares in Alma Media was
financed on a temporary basis, through a debt-financing-type short-term loan
arrangement.
Under the EGM's authorisation granted on 10 August 2009, the Board of Directors
of Ilkka-Yhtymä Oyj decided on 28 August 2009 upon a new share issue, conducted
during 7-25 September 2009. In the share issue, a total of 10,999,375 new
series-II shares were issued and directed primarily at the company's
shareholders. These shares were first offered to Ilkka-Yhtymä's shareholders, in
accordance with Article 2 of the Articles of Association, granting the current
holders of Ilkka-Yhtymä's series-I or series-II shares a pre-emptive right to
subscribe for the new shares issued.
As part of the share issue, Ilkka-Yhtymä's staff was also reserved, subject to
certain conditions, the right to subscribe for a maximum of 100,000 newly issued
shares if any were left unsubscribed due to subscription rights. In accordance
with the share issue's conditions, other shareholders and other investors also
had the possibility, in a secondary share issue, to subscribe for issued shares
which were still unsubscribed.
The per-share subscription price was EUR 3.63, and since all shares offered for
subscription in the issue were subscribed for, Ilkka-Yhtymä raised a gross total
of EUR 39.9 million through the share issue. Net capital gains generated from
the share issue (approximately EUR 38.4 million) were used by Ilkka-Yhtymä to
repay the temporary debt financing used for the purchase of shares in Alma Media
Corporation and to strengthen the Company's capital structure.
The 10,999,375 new series-II shares of Ilkka-Yhtymä Oyj subscribed for in the
share issue were registered in the Finnish Trade Register on 6 October 2009.
Following this registration, the total number of Ilkka-Yhtymä's shares amounts
to 25,665,208. The number of series-I shares listed on NASDAQ OMX Helsinki Ltd's
Pre List is 4,304,061, while the series-II shares listed on NASDAQ OMX Helsinki
Ltd's List number 21,361,147. Following the registration of new shares,
Ilkka-Yhtymä's share capital totals EUR 6,416,302. Regarding the recognition of
gains raised with the share issue, the portion corresponding to share nominal
value, i.e. EUR 0.25, was recorded in share capital and the portion exceeding
nominal value, i.e. EUR 3.38, was reported under invested unrestricted equity
fund. As of the date of registration 6 October 2009, holders of new shares are
entitled to a dividend or share of other funds distributed by the company and
will benefit from other shareholders' rights.
Trading in provisional shares corresponding to shares subscribed for based on
subscription rights was initiated in the shares' own class in 28 September 2009.
These provisional shares were consolidated in Ilkka-Yhtymä Oyj's series-II
shares on 6 October 2009 when the shares subscribed for in the share issue were
registered in the Finnish Trade Register. Trading in the new registered
series-II shares began on NASDAQ OMX Helsinki Ltd's List, together with
Ilkka-Yhtymä's old series-II shares, on 7 October 2009.
CORPORATE GOVERNANCE AND SHAREHOLDERS' MEETINGS
On 27 April 2009, the Annual General Meeting of Ilkka-Yhtymä Oyj approved the
financial statements, discharged the managing director and the members of the
Supervisory Board and Board of Directors of liability, and decided that a per
share dividend of EUR 0.30 should be paid for the 2008 financial year.
In accordance with Chapter 13, section 6, subsection 2 of the Finnish Limited
Liability Companies Act, the Annual General Meeting authorised the Board to
decide upon the distribution of additional dividends of a maximum of EUR 0.20
per share. The total dividend for the 2008 financial year under this
authorisation may be no more than EUR 0.50 per share. The authorisation includes
the right of the Board of Directors to decide upon all other conditions
pertaining to the distribution of dividends. The authorisation will be valid
until the next ordinary annual general meeting of shareholders. At its meeting
of 9 November 2009, the Ilkka-Yhtymä Oyj Board of Directors decided that it
would not exercise its authorisation to pay additional dividends for the
financial year 2008.
The number of members of the Supervisory Board for 2009 was confirmed to be 27.
Of the Supervisory Board members whose term had come to an end, the following
were re-elected for the term ending in 2013: Markku Akonniemi of Töysä, Alpo
Joensuu of Kuortane, Heikki Järvi-Laturi of Teuva, Petri Latva-Rasku from
Tampere, and Marja Vettenranta of Laihia. Ylivieska's Juhani Hautamäki and
employee representatives Petri Taipale and Seija Peitso (both of Seinäjoki) were
elected as new members of the Supervisory Board.
Ernst & Young Oy, Authorised Public Accountants, was elected as the auditor,
with authorised public accountants Tomi Englund and Marja Huhtala as the chief
auditors. Authorised public accountants Päivi Virtanen and Johanna
Winqvist-Ilkka were elected as deputy auditors.
The Annual General Meeting decided that the Group's 31 December 2008 reserve
fund would be reduced by EUR 12,837,354.95. The amount of the reduction will be
transferred to the invested non-restricted equity fund. After the reduction, the
reserve fund's value will amount to zero. The reduction of the reserve fund
requires a notice and registration procedure as per Chapter 14, sections 3-5 of
the Finnish Limited Liability Companies Act. Under the authorisation granted by
the National Board of Patents and Registration of Finland, the decision on
reserve fund reduction was implemented in September.
On 25 May 2009, the Supervisory Board re-elected Sari Mutka, whose term had come
to an end, to the Board of Directors of Ilkka-Yhtymä Oyj. Heikki Kuoppamäki will
continue as chairman of the Supervisory Board, while Perttu Rinta will continue
as vice-chairman. At its membership meeting, the Board of Directors re-elected
Seppo Paatelainen as its chairman, while Timo Aukia will continue as
vice-chairman.
On 1 July 2009, Ilkka-Yhtymä signed a conditional agreement with Skandinaviska
Enskilda Banken AB (publ)'s Helsinki branch (”SEB”) regarding the purchase of an
aggregate of 7,500,000 shares in Alma Media Corporation. The purchase of Alma
Media shares agreed on was conditional upon approval by the Ilkka-Yhtymä
Extraordinary General Meeting (EGM), held on 10 August 2009, of an authorisation
in line with the Board's proposals to issue new shares in the company for
refinancing the share purchase, as well as certain technical amendments to the
Company's Articles of Association.
Ilkka-Yhtymä Oyj's EGM of 10 August 2009 decided to authorise the Board of
Directors to decide upon one rights issue, as proposed by the Board.
In accordance with the proposal by the Board of Directors, the EGM decided to
amend Article 2 of the Articles of Association in modification of the regulation
on minimum and maximum amounts of shares belonging to different series of
shares. In addition, pursuant to the Board's proposal, the EGM decided that the
regulation concerning the minimum period of invitation to a general meeting,
included in paragraph 1 of Article 11 of the Articles of Association would be
amended due to the amendment of the Limited Liability Companies Act.
Based on the EGM's decisions of 10 August 2009, the purchase of shares in Alma
Media Corporation was conducted through the OMX Nordic Exchange Helsinki on the
same day.
SHARE PERFORMANCE
At the end of 2009, the company's share capital totalled EUR 6,416,302. The
number of shares was 25,665,208, of which 4,304,061 were Series I shares (20
votes per share) and 21,361,147 were Series II shares (1 vote per share). Shares
of both series entitle the holders to the same dividend. The nominal value of
the company share is EUR 0.25.
According to the Articles of Association, no-one at a General Meeting may use,
on behalf of him/herself or by proxy, a total number of votes exceeding
one-twentieth (1/20) of the number of votes presented at the meeting.
The transfer of Series I shares is restricted by an approval clause. According
to this clause, Series I shares cannot be transferred to another holder without
the approval of the Board of Directors.
The series-I shares of Ilkka-Yhtymä Oyj were listed on the Helsinki Stock
Exchange in 1981 and have been listed ever since. The series-II shares have been
listed since their issue in 1988, and on 10 June 2002 they were listed on the
Main List of the Helsinki Stock Exchange. At present, the series-II shares of
Ilkka-Yhtymä Oyj are listed on the NASDAQ OMX Helsinki List, in the Consumer
Discretionary sector, the company's market value being classified as Mid Cap.
The series-I shares are listed on the Pre List.
The number of Series I shares of Ilkka-Yhtymä Oyj traded in 2009 was 61,968,
which represents 1.4 per cent of series share stock. The trading value of shares
was EUR 0.5 million. The number of Series II shares traded totalled 2,659,985,
which equals 20.0 per cent of the series share stock. Their trading value was
EUR 18.2 million. During the report period, the lowest quotation for
Ilkka-Yhtymä Oyj's Series I share was EUR 5.60 and the highest EUR 10.00, while
the lowest quotation for a Series II share was EUR 5.03 and the highest EUR
8.75. At the period-end closing price, the share capital market value was EUR
170.1 million.
The Board of Directors has an effective authorisation to decide upon a share
issue and/or granting stock options and/or other special rights and upon their
conditions. This effective authorisation has not been exercised. The Board of
Directors is not authorised to acquire or sell company's own shares.
FLAGGING ANNOUNCEMENTS
As a result of a share purchase completed on 14 July 2009, Keskisuomalainen
Oyj's holding in Ilkka-Yhtymä Oyj's share capital increased to 5.4378 per cent
of share capital and 0.8269 per cent of voting rights.
On 28 August 2009, Ilkka-Yhtymä received flagging announcements from Nordea Bank
AB, Tapiola General Mutual Insurance Company and Ilmarinen Mutual Pension
Insurance Company. Pursuant to the underwriting guarantee agreement associated
with Ilkka-Yhtymä Oyj's share issue signed on 28 August 2009, Nordea Bank
Finland Plc, Ilmarinen Mutual Pension Insurance Company and Tapiola General
Mutual Insurance Company committed to subscribing for any shares issued that
were not subscribed for upon the actualisation of the share issue, in accordance
with normal terms. In their flagging announcements, each of the above-mentioned
parties guaranteeing underwriting reported the holding accruing to it in the
case of the full actualisation of the underwriting guarantee it had granted for
the share issue.
On 6 October 2009, Ilkka-Yhtymä declared that it had received flagging
announcements from each of the above-mentioned parties providing underwriting
guarantees. Since Ilkka-Yhtymä's share issue was oversubscribed, the
underwriting guarantee associated with the issue provided by Nordea Bank Finland
Plc, Ilmarinen Mutual Pension Insurance Company and Tapiola General Mutual
Insurance Company was not used.
In its announcement, Nordea Bank AB stated that its Finnish subsidiary Nordea
Bank Finland Plc did not receive any of Ilkka-Yhtymä's series-II shares for
subscription based on the underwriting guarantee referred to in the flagging
announcement of 28 August 2009. According to the flagging announcement, Nordea
Group did not own any of Ilkka-Yhtymä Oyj's shares.
Prior to the share issue, Ilmarinen Mutual Pension Insurance Company and Tapiola
General Mutual Insurance Company each owned less than 1/20 of Ilkka-Yhtymä Oyj's
shares and voting rights. Each of them had separately committed to participating
in Ilkka-Yhtymä Corporation's share issue, providing both a subscription
commitment and underwriting guarantee. On 6 October 2009, both Tapiola General
Mutual Insurance Company and Ilmarinen Mutual Pension Insurance Company
announced, respectively, that following the subscriptions carried out during the
share issue their holdings in Ilkka-Yhtymä Oyj remained under 1/20, both in
terms of shares and voting rights, since the underwriting guarantee had not been
exercised.
PERSONNEL
The Group had an average of 414 employees during the period (438 in 2008), while
the average number of personnel expressed as full-time equivalents was 366
(393).
On 31 December 2009, the Group had 354 full-time employees (374).
Since 2000, Ilkka-Yhtymä Group's entire personnel has been covered by an
incentive scheme. In 2009, the incentive scheme was not used.
The Articles of Association provide for two employee representatives to serve on
the Supervisory Board of Ilkka-Yhtymä Oyj.
Kalle Heiskanen was appointed the new Chief Editor of Pohjalainen as of 1
February 2010. The previous Chief Editor, Arno Ahosniemi, was invited to serve
as Chief News Editor and Deputy Editor-in-Chief of Kauppalehti as of 1 September
2009.
As a result of cooperation negotiations conducted in Ilkka-Yhtymä in March,
arrangements concerning holiday bonuses were agreed together with the personnel.
These arrangements resulted in approximately EUR 1 million in cost savings in
2009. In addition to this, in Ilkka-Yhtymä Group's production company I-print
Oy, the negotiations entailed the dismissal of 6 employees on production-related
grounds.
In the spring of 2009, Ilkka-Yhtymä launched a Group-wide development programme
for 2010-2011 in order to prepare for the weakening market conditions caused by
the prolonged recession.
In May, Ilkka-Yhtymä Oyj's Board of Directors decided to consolidate the Group's
publishing operations, currently being carried out in three different companies,
into one company whose principal offices will remain in Vaasa and Seinäjoki, as
of the beginning of 2010. Local newspapers will continue to operate in their
respective circulation areas.
The long-term printing contract between Ilkka-Yhtymä's printing house I-print Oy
and HSS Media Ab expired on 31 December 2009. Consequently, I-print Oy initiated
cooperation negotiations on 31 August 2009 with the purpose of closing down the
operations of the Vaasa printing unit responsible for printing HSS Media Ab's
papers and in order to centralise printing operations in Seinäjoki by early
2010. The cooperation negotiations ended on 22 October 2009, affecting 18
employees in I-print Oy's printing and maintenance team in Vaasa. As a result of
these negotiations, three employees will retire and seven will be dismissed.
At this stage in the term of the contract, HSS Media's newspapers have annually
accounted for around 10% of I-print Oy's net sales. During the last two years,
their share of I-print Oy's net sales has been around 15% and some 5% of
Ilkka-Yhtymä Group's net sales.
In December, Ilkka-Yhtymä announced that, as part of the Group development
programme, retirement arrangements are to be carried out for 21 people. The cost
savings from these retirement arrangements will be realised in full after the
mid-point of 2010.
ESTIMATED OPERATING RISKS AND UNCERTAINTIES
Ilkka-Yhtymä's most significant short-term risks are related to the development
of media advertising and printing volumes, applying to the entire sector.
Through its holding in Alma Media stock, the company will also be exposed to
risks related to Alma Media's profit-making capacity, dividend policy and the
price development of its share as well as risks resulting from the development
of Alma Media's ownership structure.
Communications industry
According to the company's estimates, the Group's core business does not involve
special business risks, but only risks normally associated with the industry.
Such industry risks are mainly associated with the development of media
advertising and media consumption, since more and more alternatives are being
offered to consumers and advertisers. The prolongation of the recession coupled
with a rise in unemployment may have a negative impact on the consumption of
media products and services. Competition in the industry is being affected by
the digitalisation of content, the emergence of new distribution channels,
growth in freely available content, changes in media use and ways of spending
time as well as the new operating methods and actors these are enabling.
In the face of intensifying competition, the strength of provincial and local
papers lies in their emphasis on local issues and community spirit. A close
relationship with readers, high circulation coverage and competitive contact
prices create a competitive advertising media.
Publishing
In the long term, regional demographic and economic developments will have an
impact on provincial and local newspapers' circulation and advertising income.
On the other hand, the current reduction underway in the average number of
individuals in households will maintain circulation figures. A healthy
circulation coverage percentage, a competitive contact price and strong
relationships with readers are enhancing newspapers' competitiveness in the
advertising market. Provincial papers' overall reach has increased as a result
of steep growth in the number of online media visitors.
In general, ordinary economic cycles have not had a major impact on local or
provincial newspapers' circulation income. On the other hand, media advertising
volumes reflect changes in economic cycles, competitive situations and the
outlook of advertisers' own industries. The on-going exceptionally steep
downturn in the general economy has reduced newspapers' media sales by a fifth.
Income from subscriptions, on the other hand, has thus far remained steady. Both
rapid and long-term measures to enhance business are used in order to counteract
the current recession.
The market entry and exit of new media, such as new free sheets, depends on
economic cycles, regional volumes of the advertisement market and the
competitive environment. Since most newspaper groups, such as Ilkka-Yhtymä
Group, have decades' of experience with respect to their free sheets, they can
prepare for this changing competitive environment by focusing on high quality,
and local customer relationships.
As a result of new technology, some classified advertisements, such as car,
housing and job advertisements, have shifted online. In response to this
development, Ilkka and Pohjalainen provide Arena services, integrated with their
provincial newspapers' common newspaper advertising. New players in the markets
include national and regional search engine companies.
In order to face the challenges posed by changing reading habits among young
people and growing volumes of content available free of charge on the Internet,
Ilkka-Yhtymä Group is providing its provincial newspapers' premium online
services for the benefit of the region's consumers. In line with the allied
Arena Partners' strategy, our online services aim at becoming the leading place
for electronic news, services, transactions and commerce for consumers,
communities and companies in our operating provinces.
Graphics
The aggressive price competition in the printing sector is continuing.
Developments in circulation and advertising volumes are reflected in the numbers
of pages in newspapers, while general economic trends are affecting the use of
other advertising media. Exports to the Nordic countries are dependent not only
on market conditions but also on the development of exchange rates.
The availability of newsprint has been good and price developments have been
moderate, even on the downturn, in spite of the fact that the paper industry has
downsized its capacity. Such capacity cuts are intended to safeguard future
profitability, and will most probably entail increased pricing pressures.
I-print Oy has prepared for both supply and price risks by dividing its
acquisitions between several suppliers.
Newspaper delivery has been outsourced to Itella Oyj and Suomen Suorajakelu Oy.
Risks in delivery operations include price developments and the availability of
deliverers in the future.
Financial risks
In terms of financial risks, the Group is mainly exposed to interest-rate risk
and risk associated with share prices. On 31 December 2009, the Group's
interest-bearing liabilities totalled EUR 37.7 million (31 Dec 2008: EUR 43.6
million). Interest-rate risk is managed by agreeing on both fixed and floating
interest rates in loans. On the balance sheet date, fixed-rate loans accounted
for 24 per cent and floating-rate loans for 76 per cent of the Group's loans.
Loan maturities range from 4 to 6 years. In its operations, the Group is exposed
to price risks arising from the volatility of market prices of quoted shares. In
order to ensure the availability and flexibility of financing, the Group has
available credit limits. On 31 December 2009, unused credit limits totalled EUR
13 million (On 31 December 2008, EUR 2 million of the EUR 13 million credit
limit was in use).
THE BOARD'S PROPOSAL ON PROFIT SHARING
The Board of Directors proposes to the Annual General Meeting of 19 April 2010
that a per-share dividend of EUR 0.35 be paid for the financial year 2009,
representing a total dividend payment of EUR 8,982,822.90. The Group distributes
78.1 per cent of its profit in dividends. Dividends will be distributed to those
who are listed on the matching day, 22 April 2010, as shareholders in the
Ilkka-Yhtymä Group's list of shareholders, maintained at Euroclear Finland Oy.
Dividend payments are issued on 29 April 2010. On 31 December 2009, the parent
company's free capital amounted to EUR 82,588,617.90.
Ilkka-Yhtymä Oyj practices an active dividend policy and aims to distribute at
least half of its consolidated annual income as dividend payments, taking into
consideration the financing required for profitable growth and the company's
future outlook.
PROSPECTS FOR 2010
The impact of the continued uncertainty in the global economy on media
advertising as well as circulation and printing numbers in 2010 is difficult to
predict. In Finland, the fall in media advertising is expected to come to a
halt. In spite of wariness amongst consumers, newspapers' circulation income is
expected to enjoy slight growth due to price increases. Printing business
volumes in Finland have been permanently reduced as media advertising decreases
the number of pages ordered, and printing customers have exited the field as a
result of the recession.
Net sales for the Ilkka-Yhtymä Group are expected to experience a slight drop as
net sales for the printing business decrease. Net sales for the publishing
business, on the other hand, are forecast to increase slightly.
Group operating profit from Ilkka-Yhtymä's own operations and operating profit
as a percentage of net sales, excluding the share of Alma Media's and other
associated companies' profit, are expected to remain almost at the previous
year's level. In addition, the year's results will depend on interest-rate
trends, any trading in securities and the price performance of securities
investments.
The associated company Alma Media has a significant impact on the Group's
operating profit and results.
In the current economic climate, several uncertainty factors remain, related to
the predictability of both net sales and operating profit.
SUMMARY OF AND NOTES TO THE FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
--------------------------------------------------------------------------------
| (EUR 1,000) | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| | 2009 | 2008 | % | 2009 | 2008 | % |
--------------------------------------------------------------------------------
| NET SALES | 12 797 | 14 442 | -11 | 48 811 | 55 384 | -12 |
--------------------------------------------------------------------------------
| Change in | -5 | -10 | 52 | -10 | -1 | -920 |
| inventories of | | | | | | |
| finished and | | | | | | |
| unfinished | | | | | | |
| products | | | | | | |
--------------------------------------------------------------------------------
| Other | 84 | 128 | -34 | 369 | 626 | -41 |
| operating | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Materials and | -3 611 | -4 619 | -22 | -15 211 | -17 082 | -11 |
| services | | | | | | |
--------------------------------------------------------------------------------
| Employee | -4 739 | -4 557 | 4 | -16 940 | -18 016 | -6 |
| benefits | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | -1 023 | -820 | 25 | -3 411 | -2 961 | 15 |
--------------------------------------------------------------------------------
| Other | -1 852 | -1 953 | -5 | -6 145 | -7 221 | -15 |
| operating | | | | | | |
| costs | | | | | | |
--------------------------------------------------------------------------------
| Share of | 1 855 | -21 | 9133 | 3 019 | 48 | 6230 |
| associated | | | | | | |
| companies' | | | | | | |
| profit | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | 3 506 | 2 592 | 35 | 10 482 | 10 776 | -3 |
| PROFIT | | | | | | |
--------------------------------------------------------------------------------
| Financial | -4 | -1 088 | 100 | 3 013 | 4 840 | -38 |
| income and | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| PROFIT BEFORE | 3 502 | 1 504 | 133 | 13 495 | 15 616 | -14 |
| TAXES | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -428 | -403 | 6 | -1 995 | -2 086 | -4 |
--------------------------------------------------------------------------------
| PROFIT FOR THE | 3 074 | 1 101 | 179 | 11 500 | 13 530 | -15 |
| PERIOD UNDER | | | | | | |
| REVIEW | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | 0.12 | 0.06 | 110 | 0.55 | 0.70 | -22 |
| share, | | | | | | |
| undiluted | | | | | | |
| (EUR)*) | | | | | | |
--------------------------------------------------------------------------------
| The undiluted | 25 665 | 19 308 | | 20 997 | 19 308 | |
| share average, | | | | | | |
| adjusted for | | | | | | |
| the share | | | | | | |
| issue (to the | | | | | | |
| nearest | | | | | | |
| thousand)*) | | | | | | |
--------------------------------------------------------------------------------
*) There are no factor diluting the figure.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
| (EUR 1,000) | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| | 2009 | 2008 | % | 2009 | 2008 | % |
--------------------------------------------------------------------------------
| PROFIT FOR THE | 3 074 | 1 101 | 179 | 11 500 | 13 530 | -15 |
| PERIOD UNDER | | | | | | |
| REVIEW | | | | | | |
--------------------------------------------------------------------------------
| OTHER | | | | | | |
| COMPREHENSIVE | | | | | | |
| INCOME: | | | | | | |
--------------------------------------------------------------------------------
| Available-for- | | -24 186 | 100 | | -42 562 | 100 |
| sale assets | | | | | | |
--------------------------------------------------------------------------------
| Share of | 43 | | | 195 | | |
| associated | | | | | | |
| companies' | | | | | | |
| other | | | | | | |
| comprehensive | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Income tax | | -1 904 | 100 | | 2 874 | -100 |
| related to | | | | | | |
| components of | | | | | | |
| other | | | | | | |
| comprehensive | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Other | 43 | -26 090 | 100 | 195 | -39 688 | 100 |
| comprehensive | | | | | | |
| income, net of | | | | | | |
| tax | | | | | | |
--------------------------------------------------------------------------------
| TOTAL | 3 117 | -24 989 | 112 | 11 695 | -26 158 | 145 |
| COMPREHENSIVE | | | | | | |
| INCOME FOR THE | | | | | | |
| PERIOD | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
| (EUR 1,000) | 12/2009 | 12/2008 | Change % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
| Intangible rights | 1 198 | 723 | 66 |
--------------------------------------------------------------------------------
| Goodwill | 314 | 314 | |
--------------------------------------------------------------------------------
| Investment property | 496 | 531 | -7 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 17 218 | 19 805 | -13 |
--------------------------------------------------------------------------------
| Shares in associated companies | 109 167 | 533 | 20363 |
--------------------------------------------------------------------------------
| Available-for-sale assets | 5 566 | 43 316 | -87 |
--------------------------------------------------------------------------------
| Non-current trade and other | 58 | 39 | 49 |
| receivables | | | |
--------------------------------------------------------------------------------
| Other tangible assets | 214 | 213 | 0 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | 134 232 | 65 476 | 105 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 622 | 930 | -33 |
--------------------------------------------------------------------------------
| Trade and other receivables | 2 862 | 3 287 | -13 |
--------------------------------------------------------------------------------
| Income tax assets | 224 | 2 030 | -89 |
--------------------------------------------------------------------------------
| Financial assets at fair value | 2 472 | 2 285 | 8 |
| through profit or loss | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 6 648 | 2 321 | 187 |
--------------------------------------------------------------------------------
| TOTAL Current assets | 12 828 | 10 852 | 18 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 147 060 | 76 328 | 93 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDER'S EQUITY | | | |
--------------------------------------------------------------------------------
| Share capital | 6 416 | 3 666 | 75 |
--------------------------------------------------------------------------------
| Fair value reserve and other | 48 522 | -18 647 | 360 |
| reserves | | | |
--------------------------------------------------------------------------------
| Retained earnings | 45 359 | 38 064 | 19 |
--------------------------------------------------------------------------------
| SHAREHOLDER'S EQUITY | 100 298 | 23 083 | 335 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| Deferred tax liability | 1 505 | 1 758 | -14 |
--------------------------------------------------------------------------------
| Non-current interest-bearing | 33 204 | 37 749 | -12 |
| liabilities | | | |
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES | 34 709 | 39 508 | -12 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| Current interest-bearing liabilities | 4 545 | 5 858 | -22 |
--------------------------------------------------------------------------------
| Accounts payable and other payables | 7 160 | 7 734 | -7 |
--------------------------------------------------------------------------------
| Income tax liability | 347 | 146 | 137 |
--------------------------------------------------------------------------------
| CURRENT LIABILITIES | 12 053 | 13 738 | -12 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND LIABILITIES | 147 060 | 76 328 | 93 |
| TOTAL | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| (EUR 1,000) | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| CASH FLOW FROM OPERATIONS | | |
--------------------------------------------------------------------------------
| Profit for the period under review | 11 500 | 13 530 |
--------------------------------------------------------------------------------
| Adjustments | -634 | -181 |
--------------------------------------------------------------------------------
| Change in working capital | 571 | -126 |
--------------------------------------------------------------------------------
| CASH FLOW FROM OPERATIONS | 11 438 | 13 223 |
| BEFORE FINANCE AND TAXES | | |
--------------------------------------------------------------------------------
| Financial income and expenses | -116 | 1 138 |
--------------------------------------------------------------------------------
| Direct taxes paid | -242 | -5 006 |
--------------------------------------------------------------------------------
| CASH FLOW FROM OPERATIONS | 11 081 | 9 355 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CASH FLOW FROM INVESTMENTS | | |
--------------------------------------------------------------------------------
| Investments in tangible and | -1 470 | -3 242 |
| intangible assets, net | | |
--------------------------------------------------------------------------------
| Acquisition of shares in associated companies | -35 701 | |
--------------------------------------------------------------------------------
| Other investments, net | -459 | -52 593 |
--------------------------------------------------------------------------------
| Granted loans | -19 | |
--------------------------------------------------------------------------------
| Dividends received from investments | 2 704 | 7 237 |
--------------------------------------------------------------------------------
| CASH FLOW FROM INVESTMENTS | -34 945 | -48 598 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CASH FLOW BEFORE FINANCING ITEMS | -23 865 | -39 243 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CASH FLOW FROM FINANCING | | |
--------------------------------------------------------------------------------
| Share issue | 38 410 | |
--------------------------------------------------------------------------------
| Change in current loans | -1 313 | 2 000 |
--------------------------------------------------------------------------------
| Change in non-current loans | -4 545 | 41 607 |
--------------------------------------------------------------------------------
| Dividends paid and other profit distribution | -4 360 | -14 440 |
--------------------------------------------------------------------------------
| CASH FLOW FROM FINANCING | 28 193 | 29 167 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| INCREASE (+) OR DECREASE (-)IN FINANCIAL | 4 328 | -10 075 |
| ASSETS | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liquid assets at the beginning of the | 2 321 | 12 396 |
| financial period | | |
--------------------------------------------------------------------------------
| Liquid assets at the end of the financial | 6 648 | 2 321 |
| period | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES |
--------------------------------------------------------------------------------
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Net sales, Meur | 48.8 | 55.4 |
--------------------------------------------------------------------------------
| - change % | -11.9 | 0.9 |
--------------------------------------------------------------------------------
| Operating profit, Meur | 10.5 | 10.8 |
--------------------------------------------------------------------------------
| - % of net sales | 21.5 | 19.5 |
--------------------------------------------------------------------------------
| Profit before taxes, Meur | 13.5 | 15.6 |
--------------------------------------------------------------------------------
| - % of net sales | 27.6 | 28.2 |
--------------------------------------------------------------------------------
| Result for the financial period, Meur | 11.5 | 13.5 |
--------------------------------------------------------------------------------
| - % of net sales | 23.6 | 24.4 |
--------------------------------------------------------------------------------
| Return on equity (ROE), % | 18.6 | 31.1 |
--------------------------------------------------------------------------------
| Return on investment (ROI), % | 14.1 | 26.4 |
--------------------------------------------------------------------------------
| Equity ratio, % | 69.0 | 30.9 |
--------------------------------------------------------------------------------
| Gearing, % | 28.5 | 169.0 |
--------------------------------------------------------------------------------
| Gross capital expenditure, Meur *) | 37.4 | 56.3 |
--------------------------------------------------------------------------------
| - % of net sales | 76.7 | 101.7 |
--------------------------------------------------------------------------------
| Balance sheet total, Meur | 147.1 | 76.3 |
--------------------------------------------------------------------------------
| Current ratio | 1.06 | 0.79 |
--------------------------------------------------------------------------------
| Average no. of employees | 366 | 393 |
--------------------------------------------------------------------------------
| Earnings per share (EPS), eur | 0.55 | 0.70 |
--------------------------------------------------------------------------------
| Cash flow from operations per share, eur | 0.53 | 0.48 |
--------------------------------------------------------------------------------
| Shareholders' equity per share, eur | 3.91 | 1.20 |
--------------------------------------------------------------------------------
| Dividend per share (Series I), eur **) | 0.35 | 0.23 |
--------------------------------------------------------------------------------
| Dividend per share (Series II), eur **) | 0.35 | 0.23 |
--------------------------------------------------------------------------------
| Dividend per earnings (Series I), % | 63.9 | 33.4 |
--------------------------------------------------------------------------------
| Dividend per earnings (Series II), % | 63.9 | 32.2 |
--------------------------------------------------------------------------------
| Effective dividend yield (Series I), % | 3.9 | 3.5 |
--------------------------------------------------------------------------------
| Effective dividend yield (Series II), % | 5.7 | 4.2 |
--------------------------------------------------------------------------------
| Price per earnings (P/E) (Series I) | 16.4 | 9.5 |
--------------------------------------------------------------------------------
| Price per earnings (P/E) (Series II) | 11.2 | 7.7 |
--------------------------------------------------------------------------------
| Market capitalisation, Meur | 170.1 | 111.3 |
--------------------------------------------------------------------------------
| Weighted average of adjusted number of | 20 997 391 | 19 307 920 |
| shares during the financial period | | |
--------------------------------------------------------------------------------
| Adjusted number of shares at the end on the | 25 665 208 | 19 307 920 |
| financial period | | |
--------------------------------------------------------------------------------
*) Includes investments in tangible and intangible assets and shares in
associated companies and in available-for-sale financial assets (shares).
**) 2009: Proposal of the Board of Directors
CONSOLIDATED NET SALES AND PROFIT BY QUARTER
--------------------------------------------------------------------------------
| (EUR 1,000) | Q1/ 2009 | Q2/ 2009 | Q3/ 2009 | Q4/ 2009 |
--------------------------------------------------------------------------------
| NET SALES | 12 005 | 12 616 | 11 393 | 12 797 |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 1 810 | 2 382 | 2 783 | 3 506 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 3 409 | 2 537 | 2 480 | 3 074 |
| UNDER REVIEW | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| (EUR 1,000) | Q1/ 2008 | Q2/ 2008 | Q3/ 2008 | Q4/ 2008 |
--------------------------------------------------------------------------------
| NET SALES | 13 423 | 14 209 | 13 309 | 14 442 |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 2 768 | 2 650 | 2 766 | 2 592 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 8 877 | 1 981 | 1 571 | 1 101 |
| UNDER REVIEW | | | | |
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY (EUR 1,000)
--------------------------------------------------------------------------------
| Change in | Share | Fair | Invest | Other | Retained | Total |
| shareholde | capita | value | ed | reserves | earnings | |
| rs' equity | l | reserve | unrest | | | |
| 1-12/2008 | | | ricted | | | |
| | | | equity | | | |
| | | | fund | | | |
--------------------------------------------------------------------------------
| SHAREHOLDE | 3 666 | 8 179 | | 12 862 | 39 199 | 63 907 |
| RS' EQUITY | | | | | | |
| 1.1. | | | | | | |
--------------------------------------------------------------------------------
| Comprehens | | -39 688 | | | 13 530 | -26 158 |
| ive income | | | | | | |
| for the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | -14 666 | -14 666 |
| distributi | | | | | | |
| on | | | | | | |
--------------------------------------------------------------------------------
| TOTAL | 3 666 | -31 509 | | 12 862 | 38 064 | 23 083 |
| SHAREHOLDE | | | | | | |
| RS' EQUITY | | | | | | |
| 12/2008 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in | Share | Fair | Invest | Other | Retained | Total |
| shareholde | capita | value | ed | reserves | earnings | |
| rs' equity | l | reserve | unrest | | | |
| 1-12/2009 | | | ricted | | | |
| | | | equity | | | |
| | | | fund | | | |
--------------------------------------------------------------------------------
| SHAREHOLDE | 3 666 | -31 509 | | 12 862 | 38 064 | 23 083 |
| RS' EQUITY | | | | | | |
| 1.1. | | | | | | |
--------------------------------------------------------------------------------
| Transfers | | | 12 837 | -12 837 | | |
| between | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| Transfer | | 31 509 | | | | 31 509 |
| to shares | | | | | | |
| in | | | | | | |
| associated | | | | | | |
| companies | | | | | | |
--------------------------------------------------------------------------------
| Comprehens | | | | | 11 695 | 11 695 |
| ive income | | | | | | |
| for the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | -4 400 | -4 400 |
| distributi | | | | | | |
| on | | | | | | |
--------------------------------------------------------------------------------
| Rights | 2 750 | | | | | 2 750 |
| issue | | | | | | |
--------------------------------------------------------------------------------
| Share | | | 35 660 | | | 35 660 |
| premium | | | | | | |
--------------------------------------------------------------------------------
| TOTAL | 6 416 | | 48 498 | 24 | 45 359 | 100 298 |
| SHAREHOLDE | | | | | | |
| RS' EQUITY | | | | | | |
| 12/2009 | | | | | | |
--------------------------------------------------------------------------------
GROUP CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
| (EUR 1,000) | 12/2009 | 12/2008 |
--------------------------------------------------------------------------------
| Collateral pledged for own commitments | | |
--------------------------------------------------------------------------------
| Mortgages on company assets | 1 245 | 1 245 |
--------------------------------------------------------------------------------
| Mortgages on real estate | 8 801 | 8 801 |
--------------------------------------------------------------------------------
| Pledged shares | 39 309 | 26 013 |
--------------------------------------------------------------------------------
SEGMENT INFORMATION
--------------------------------------------------------------------------------
| Group net sales | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| (EUR 1,000) | 2009 | 2008 | % | 2009 | 2008 | % |
--------------------------------------------------------------------------------
| Publishing | 10 469 | 11 434 | -8 | 39 826 | 44 648 | -11 |
--------------------------------------------------------------------------------
| Printing | 4 638 | 5 411 | -14 | 18 032 | 20 181 | -11 |
--------------------------------------------------------------------------------
| Non-allocated | 752 | 709 | 6 | 3 016 | 2 774 | 9 |
--------------------------------------------------------------------------------
| Net sales | -3 062 | -3 112 | -2 | -12 064 | -12 219 | -1 |
| between | | | | | | |
| segments | | | | | | |
--------------------------------------------------------------------------------
| Group net sales | 12 797 | 14 442 | -11 | 48 811 | 55 384 | -12 |
| total | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Group operating | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| profit (EUR | 2009 | 2008 | % | 2009 | 2008 | % |
| 1,000) | | | | | | |
--------------------------------------------------------------------------------
| Publishing | 1 482 | 2 237 | -34 | 5 582 | 8 976 | -38 |
--------------------------------------------------------------------------------
| Printing | 511 | 504 | 1 | 2 615 | 2 580 | 1 |
--------------------------------------------------------------------------------
| Non-allocated | 1 513 | -150 | 1112 | 2 285 | -780 | 393 |
--------------------------------------------------------------------------------
| Group operating | 3 506 | 2 592 | 35 | 10 482 | 10 776 | -3 |
| profit total | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Official circulation volumes of newspapers | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Ilkka | 54 055 |
--------------------------------------------------------------------------------
| Pohjalainen | 26 670 |
--------------------------------------------------------------------------------
| Jurvan Sanomat | 2 298 |
--------------------------------------------------------------------------------
| Järviseutu | 5 689 |
--------------------------------------------------------------------------------
| Komiat | 7 158 |
--------------------------------------------------------------------------------
| Suupohjan Sanomat | 4 239 |
--------------------------------------------------------------------------------
| Viiskunta | 6 186 |
--------------------------------------------------------------------------------
| Vaasan Ikkuna (delivery) | 52 338 |
--------------------------------------------------------------------------------
| Etelä-Pohjanmaa (delivery) | 44 500 |
--------------------------------------------------------------------------------
Drafting principles
This financial statements bulletin, issued by Ilkka-Yhtymä Group, was prepared
in accordance with the recognition and measurement principles of the
International Financial Reporting Standards (IFRS), excluding some requirements
of IAS 34.
In the Group's financial reporting, the share of the associated companies'
profit is included in operating profit. The associated companies are closely
related to the Group's publishing business, and, acting in its role as the
owner, the Group participates in the development of their operations. Reporting
for 2008 has been made comparable.
Since 1 January 2009, the Group has complied with the following new or updated
standards:
- IFRS 8 Operating Segments. The Group's operating segments continue to be
Publishing and Printing. From 1 January 2009, assets allocated to the segments
and associated income were changed to correspond to internal reporting, in
accordance with IFRS 8. Following this change, certain properties will no longer
be allocated to operating segments; instead, they shall be assigned to the
non-allocated group. The share of Alma Media Corporation's and the other
associated companies' profit is also included under non-allocated. The 2008
reference data for segment information have been corrected to match the new
accounting principles.
- IAS 1 Presentation of Financial Statements. These changes will have an impact
on the way the income statement and changes in shareholders' equity have been
presented.
- IAS 23 Borrowed capital expenses. Change has no impact on the financial
statements.
- IFRS 7 Financing instruments: Information presented in the financial
statements - Improvement of information related to financing instruments.
Alteration has an impact on the attached information presented concerning
financing instruments.
- Improvements on IFRS standards (May 2008). Several minor changes have no
bearing on the financial statements.
As regards other parts and issues, the same drafting principles have been
applied to the financial statements bulletin that were used in the previous
financial statements on 31 December 2008. Moreover, the calculation formulas and
principles for indicators also remain unchanged.
The figures in the financial statements bulletin are unaudited.
PROPOSALS TO THE ANNUAL GENERAL MEETING
The Board of Directors proposes to the Annual General Meeting of 19 April 2010
that a per-share dividend of EUR 0.35 be paid for the financial year 2009,
representing a total dividend payment of EUR 8,982,822.90. The Group distributes
78.1 per cent of its profit in dividends. Dividends will be distributed to those
who are listed on the matching day, 22 April 2010, as shareholders in the
Ilkka-Yhtymä Group's list of shareholders, maintained at Euroclear Finland Oy.
Dividend payments are issued on 29 April 2010. On 31 December 2009, the parent
company's free capital amounted to EUR 82,588,617.90.
THE BOARD'S PROPOSAL ON THE AMENDMENT OF THE ARTICLES OF ASSOCIATION
The Board of Directors proposes that certain changes resulting from amendments
to the Companies Act as well as some other, primarily technical, changes be made
to the Articles of Association. The Board thus proposes that the current
sections 2, 4, 6, 10, 11, 14, 16 and 17 of the Articles of Association be
amended and section 13 be removed, resulting in some changes to section numbers.
The amendment proposals include the following:
- Relinquishment of the minimum and maximum amounts of share capital and shares,
and relinquishment of the nominal value of share (section 2).
- First paragraph of section 11, concerning the time of the summons to the
General Meeting, will be amended as follows: “The summons to a General Meeting
must be delivered to shareholders no more than three months (3) and no less than
three (3) weeks prior to the General Meeting by publishing a notice in a
newspaper published by the company or its subsidiary, and on the corporate
website. The summons to a General Meeting must, however, be published a minimum
of nine (9) days prior to the matching date of the General Meeting.”
- The current section 14 on a single shareholder's number of votes is amended as
follows: “At a General Meeting, a single shareholder may not use more than one
twentieth (1/20) of the entire number of votes represented in a meeting.”
- It is proposed that the number of auditors be cut back to one (current section
17).
PROPOSAL ON AUTHORISATION TO THE BOARD
The Board of Directors of Ilkka-Yhtymä Oyj proposes to the AGM of 19 April 2010
that the Board of Directors be authorised to decide upon a share issue and/or
granting stock options and/or other special rights and upon their conditions.
The proposed maximum number of Series II shares issued is 7,700,000
corresponding to around 30 per cent of the company's total shares and 36.05 of
Series II shares at present.
The authorisation would include the right to issue shares and/or stock options
and/or other special rights as distinct from the shareholders' pre-emptive
rights, under conditions prescribed by law, and the right to decide upon a free
issue to the company itself.
The authorisation would be valid for five years from the date of the decision of
the AGM.
AUTHORISATION TO DONATE
The Board of Directors proposes to the AGM that the Board of Directors be
authorised to decide in 2010 upon a donation, totalling a maximum of EUR
100,000, to be made towards charitable causes or similar, and that the Board of
Directors be authorised to decide upon the recipients, purposes of use and other
terms of these donations.
General statement
This report contains certain statements that are estimates based on the
management's best knowledge at the time they were made. For this reason, they
involve a certain amount of inherent risk and uncertainty. The estimates may
change in the event of significant changes in general economic and business
conditions.
Seinäjoki, 24 February 2010
ILKKA-YHTYMÄ OYJ
Board of Directors
Matti Korkiatupa
Managing Director
For more information:
Matti Korkiatupa, Managing Director, Ilkka-Yhtymä Oyj
Tel. +358 (0)500 162 015
DISTRIBUTION
NASDAQ OMX Helsinki
The main media
www.ilkka-yhtyma.fi
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