Alma Media's Interim Report January-June 2015: Operating profit increased in the second quarter

Alma Media Corporation     Interim Report   21 July 2015 at 9:00 a.m. (EEST)

Alma Media’s Interim Report January–June 2015:
OPERATING PROFIT INCREASED IN THE SECOND QUARTER

Financial performance April–June 2015:

  ·Revenue was MEUR 73.0 (75.7), down 3.5%. The effect of divested
   business  operations on the decrease in revenue was MEUR 3.3.

  ·Online sales increased by 8.0% to MEUR 25.7 (23.8).

  ·EBITDA (Earnings before interest, taxes, depreciation and
   amortisation) excluding non-recurring items MEUR 10.2 (9.7), up 5.2%.

  ·EBITDA was MEUR 11.5 (9.5), up 20.8%.

  ·Operating profit excluding non-recurring items was MEUR 6.8 (6.3) or
   9.3% (8.3%) of revenue, up 8.0%.

  ·Operating profit MEUR 8.1 (6.1), or 11.1% (8.1%) of revenue, up 32.4%.

  ·Profit for the period was MEUR 6.3 (4.8), up 32.8%.

  ·The operating profit for April–June includes non-recurring items of
   MEUR 1.3 (-0.2).

  ·Earnings per share EUR 0.07 (0.06).

Financial performance January–June 2015:

  ·Revenue was MEUR 144.9 (148.4), down 2.3%. The effect of divested
   business operations on the decreasein revenue was MEUR 6.2.

  ·Online sales increased by 4.2% to MEUR 49.5 (47.5).

  ·EBITDA (Earnings before interest, taxes, depreciation and
   amortisation) excluding non-recurring items MEUR 15.6 (15.8), down 1.5%.

  ·EBITDA was MEUR 17.6 (16.4), up 7.7%.

  ·Operating profit excluding non-recurring items was MEUR 8.7 (8.8), or
   6.0% (5.9%) of revenue, down 0.6%.

  ·Operating profit MEUR 10.8 (9.3), or 7.4% (6.3%) of revenue, up 15.5%.

  ·Profit for the period was MEUR 8.2 (6.9), up 18.0%.

  ·The operating profit for January–June includes non-recurring items of
   MEUR 2.1 (0.6).

  ·Earnings per share EUR 0.09 (0.08).

KEY FIGURES  2015  2014  Change       2015   2014   Change      2014
MEUR         Q2    Q2          %      Q1–Q2  Q1–Q2        %     Q1–Q4
Revenue      73.0  75.7  -2.6  -3.5   144.9  148.4  -3.4  -2.3  295.4
Content      24.2  27.0  -2.9  -10.6  50.1   54.4   -4.3  -7.8  110.1
revenue
             22.5  25.7  -3.2  -12.5  47.0   51.8   -4.8  -9.2  104.6
Content
revenue,
print
             1.7   1.4   0.4   26.1   3.2    2.6    0.5   20.6  5.6
Content
revenue,
online
Advertising  38.0  39.2  -1.2  -2.9   73.2   74.3   -1.1  -1.5  146.4
revenue
             17.8  20.6  -2.8  -13.7  34.5   37.6   -3.0  -8.1  73.7
Advertising
revenue,
print
             20.2  18.5  1.7   9.4    38.7   36.5   2.1   5.8   72.7
Advertising
revenue,
online
Service      10.8  9.4   1.4   14.8   21.6   19.7   1.9   9.8   38.8
revenue
Total        66.4  69.5  -3.2  -4.6   136.4  139.9  -3.5  -2.5  274.6
expenses
excluding
non
-recurring
items
EBITDA       10.2  9.7   0.5   5.2    15.6   15.8   -0.2  -1.5  35.1
excluding
non
-recurring
items
EBITDA       11.5  9.5   2.0   20.8   17.6   16.4   1.3   7.7   36.4
Operating    6.8   6.3   0.5   8.0    8.7    8.8    -0.1  -0.6  21.4
profit
excluding
non
-recurring
items
% of         9.3   8.3                6.0    5.9                7.2
revenue
Operating    8.1   6.1   2.0   32.4   10.8   9.3    1.4   15.5  20.7
profit
(loss)
% of         11.1  8.1                7.4    6.3                7.0
revenue
Profit for   6.3   4.8   1.6   32.8   8.2    6.9    1.2   18.0  15.7
the period
Earnings     0.07  0.06  0.02  32.1   0.09   0.08   0.01  17.0  0.19
per share,
EUR
(basic)
Earnings     0.07  0.06  0.02  32.1   0.09   0.08   0.01  17.0  0.19
per share,
EUR
(diluted)
Online       25.7  23.8  1.9   8.0    49.5   47.5   2.0   4.2   94.5
sales
Online       35.2  31.4               34.1   32.0               32.0
sales, % of
revenue

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 economic
development has an impact on advertising volume, which is not expected to
increase in Finland in 2015.

Alma Media expects its revenue to decrease in 2015 and operating profit
excluding non-recurring items to remain unchanged or decrease from the 2014
level. The full-year revenue 2014 was MEUR 295.4, and operating profit excluding
non-recurring items was MEUR 21.4.

Kai Telanne, President and CEO:

The Finnish economy continued to be characterised by sustained weak development
in the second quarter of 2015. According to TNS Gallup, advertising volume,
which is linked to GDP, declined by 3.3%. The circulation volumes and single
-copy sales of print media continued to decline.

The significance of Alma Media’s foreign operations to the company’s income
formation is increasing rapidly. Profitable growth in foreign markets
compensated for the decline in domestic revenue and profitability in the first
half of the year. Alma Media has recruitment and career services in 10 countries
as well as business premises services in Sweden. Foreign operations accounted
for 14% of revenue and 44% of operating profit excluding non-recurring items in
the first half of the year.

The Group’s revenue declined by 3.5% in April–June and amounted to MEUR 73.
Operating profit excluding non-recurring items improved 8% year-on-year to MEUR
6.8.

Alma Media’s domestic business operations were weighed down by the weak economic
situation in Finland and its impact on the decline in advertising volume and
content revenue, particularly in print media. At the same time, the Group was
successful in implementing measures to reduce its cost structure. Positive
developments in the national economies of Eastern Central Europe and the
improved employment situation in the region supported the strong growth of Alma
Media’s digital recruitment service business. The Group’s international
recruitment business grew by 23% in the second quarter. The domestic
marketplaces business maintained its level of financial performance.

In the Financial Media and Business Services segment, growth was attributable
particularly to the acquisitions of JM Tieto, which builds marketing and sales
concepts for B2B companies and has been fully owned by Alma Media since the
start of the year. Reorganisation measures in the customer magazine business
improved the segment’s profitability. Revenue and operating profit continued to
decline in National Consumer Media, which is the segment hit hardest by the weak
domestic advertising market. In the Regional Media segment, declining content
revenue and advertising volume weighed down revenue, but operational cost
adaptation measures and an increase in external revenue from printing operations
helped curb the decline in the segment’s profit.

Alma Media will continue to focus on digital development, such as effective
advertising solutions and the creation of new mobile solutions. Organisational
changes are currently underway concerning advertising sales and sales support.
New operating models aimed at digital development and accelerating sales will be
implemented during the third quarter.

Alma Media’s financial position has continued to strengthen and the equity ratio
was nearly 43% at the end of June. The strengthened balance sheet provides a
solid foundation for continued investments in growth and internationalisation.

Alma Media is very concerned about the viability of Finnish media. Finland
should have strong local and national media in a time when consumer media
consumption spans multiple channels and is becoming increasingly fragmented, and
international media conglomerates are having a growing impact on domestic media
consumption. The new Finnish government that was formed in May must urgently
make decisions on national policies to reduce value added taxes on digital
media. An appropriate change in taxation would help Finnish media companies
maintain their competitiveness and also improve Alma Media’s capacity to build
multi-channel media consumption experiences for its customers.

For more information, please contact:

Kai Telanne, President and CEO, telephone +358 10 665 3500

Juha Nuutinen, CFO, telephone +358 10 665 3873

Conference, webcast and conference call:

A conference for Finnish media, investors and analysts will be held on the same
day at 11.00-12.00 EEST in the Alma House (address: Alvar Aallon katu 3 C,
Helsinki). In addition to the presentations held by President & CEO Kai Telanne
and CFO Juha Nuutinen, participants will have an opportunity to discuss with
other members of the company's management. Please note that the conference will
be held in Finnish. The presentation material in English will be available on
www.almamedia.com/press_room/downloads/presentations/ at 11.00 EEST.

To participate in the conference, kindly register beforehand by e-mail,
kutsut@almamedia.fi.

An international conference call and audio webcast concerning the financial
result of January-June 2015 will begin at 13.00 EEST. You can participate in the
conference by calling +44(0)20 3427 1915 (confirmation code: 8892701) or follow
the direct transmission at
www.almamedia.com/press_room/downloads/presentations/.

ALMA MEDIA CORPORATION

Board of Directors

Distribution: NASDAQ OMX Helsinki, main media,
www.almamedia.com (http://media.ne.cision.com/l/phouseer/www.almamedia.com/)
Alma Media in brief

Alma Media is a media company focusing on digital services and publishing. In
addition to news services, the company’s products provide useful information
related to lifestyle, career and business development. The services of Alma
Media have expanded from Finland to the Nordic countries, the Baltics and
Central Europe. In 2014, the company employed an average of 1,830 professionals
(excluding deliverers), of whom approximately one quarter worked outside
Finland. Alma Media’s revenue in 2014 totalled approximately EUR 295 million.
Alma Media’s share is listed on NASDAQ OMX Helsinki. Read more at
www.almamedia.com.