Alma Media Corporation's Interim Report: Operating profit weakened as
expected, profitability good i
(Thomson Reuters ONE) - Alma Media Corporation Interim Report July 23, 2009 at 9:00AM (EET)ALMA MEDIA CORPORATION'S INTERIM REPORT FOR JANUARY-JUNE 2009:Operating profit weakened as expected, profitability good in view ofmarket conditionsApril-June 2009 in brief:- Net sales MEUR 79.3 (89.3), down 11.2%.- Operating profit MEUR 11.9 (15.0), 15.1% (16.8%) of net sales.- Operating profit without one-time capital gains MEUR 12.2 (14.4),down 15.3%- Profit before taxes MEUR 11.5 (15.7), profit before taxes withoutone-time capital gains MEUR 11.8 (15.1).- Financial result for the period MEUR 8.3 (11.8), down 29.9%.- Earnings per share EUR 0.11 (0.16).Outlook for 2009:- Alma Media expects that the comparable net sales and operatingprofit will be lower than in 2008 due to the decline in mediaadvertising. In the third quarter, net sales and operating profitwill fall behind the comparison period in 2008.Kai Telanne, President and CEO:The weakness in the advertising market continued in the secondquarter. The steep drop from the comparison period in 2008 in thefirst quarter levelled during the second quarter. The advertisingsales market in newspapers steadied at a level approximatelyone-fifth lower than in the previous year, which naturally decreasedAlma Media's net sales and operating profit compared with the secondquarter in the previous year. A significant part of the drop isattributable to nationwide advertising. Many of our newspapers,however, showed remarkable performance in local advertising sales,which on average stayed at the same level as in 2008. Advertisingsales for the newspapers' onlineservices continued to grow well.No significant changes took place in the circulation of ournewspapers. The readership has remained at a good level. Our onlineservices have managed to further increase their market share. We willcontinue the development of the combination of printed newspapers andonline services according to strategy.The savings measures initiated at business units in the beginning ofthe year progressed according to plan during the second quarter.Considering the market conditions, the results were good.Alma Media's financial position is excellent. We will continueproduct development, business development and the charting ofpossible acquisitions according to strategy.More information:Kai Telanne, President and CEO, telephone +358 10 665 3500Tuomas Itkonen, CFO, telephone +358 10 665 2244Conference, webcast and conference call:The company will hold a conference for analysts, investors and themedia in Finnish in the "Carl" conference room of the Scandic Marskihotel at theaddress Mannerheimintie 10, Helsinki on July 23, 2009 from 11:00am to12:00noon. The material for the event will be available on theinternet at www.almamedia.fi/calendar beginning 11:00am.A webcast and conference call in English will start on July 23, 2009at 1:30pm. You can participate by navigating tohttps://www.livemeeting.com/cc/almamedia/join and telephoning the number given on the registration page. Formore detailed instructions on participation, seewww.almamedia.fi/calendar. The webcast will use Microsoft LiveMeeting technology.Rauno HeinonenVice President Corporation Communications and IRAlma Media CorporationDISTRIBUTIONNASDAQ OMX HelsinkiPrincipal mediaALMA MEDIA CORPORATION'S INTERIM REPORT JANUARY 1-JUNE 30, 2009The figures are compared in accordance with the InternationalFinancial Reporting Standards (IFRS) with those of the correspondingperiod in 2008, unless otherwise stated. The figures are unaudited.The figures in the tables are independently rounded.KEY FIGURES 2009 2008 Change 2009 2008 Change 2008 2007MEUR 4-6 4-6 % 1-6 1-6 % 1-12 1-12Net sales 79.3 89.3 -11.2 155.8 173.2 -10.1 341.2 328.9Operating profit 11.9 15.0 -20.3 18.5 26.6 -30.6 48.3 64.4 % of net sales 15.1 16.8 11.8 15.4 14.2 19.6Operating profitwithoutone-time items 12.2 14.4 -15.3 19.7 26.0 -24.2 47.7 52.9 % of net sales 15.3 16.1 12.6 15.0 14.0 16.1Return on Equity/ROE(Annually)* 52.6 92.3 33.4 50.2 37.7 43.8Return on Invest/ROI(Annually)* 38.3 57.7 28.7 42.9 34.8 39.9Net financialexpenses 0.0 0.1 -100.0 0.1 -0.2 150.0 0.4 -0.1Net financialexpenses,% of net sales 0.0 0.1 0.1 -0.1 0.1 0.0Share of associatedcompanies' results -0.4 0.8 -150.2 -0.3 1.8 -115.6 4.5 3.5Balance sheet total 156.0 170.3 -7.8 166.9 181.3Gross capitalexpenditure 1.4 3.9 -64.1 3.0 10.1 -70.3 14.5 12.1Gross capitalexpenditure, % ofnetsales 1.8 4.3 1.9 5.8 4.2 3.7Equity ratio 58.4 48.5 57.2 69.8Gearing, % 0.4 33.2 6.5 -15.2Interest-bearing netdebt 0.3 23.9 -98.7 5.8 -17.9Interest-bearingliabilities 14.7 32.4 -54.6 19.1 6.8Non-interest-bearingliabilities 63.3 66.0 -4.1 59.3 56.2Average no. ofpersonnel,calculated asfull-timeemployees, excl.delivery staff 1,930 1,993 -3.2 1,932 1,962 -1.5 1,981 1,971Average no. ofdeliverystaff 998 980 1.8 968 959 0.9 968 962Earnings/share, EUR(basic) 0.11 0.16 -25.0 0.17 0.28 -35.7 0.51 0.68Earnings/share, EUR(diluted) 0.11 0.16 -25.0 0.17 0.28 -35.7 0.51 0.68Cash flow fromoperatingactivities, EUR 0.05 0.08 -37.5 0.40 0.44 -9.1 0.63 0.70Shareholders'equity/share, EUR 1.05 0.96 9.4 1.18 1.58Marketcapitalization 362.6 643.2 -43.7 369.3 870.7Average no. ofshares(1.000 shares)- basic 74,613 74,613 74,613 74,613 74,613 74,613- diluted 74,613 74,770 74,613 74,796 74,764 74,773No. of shares at endofperiod(1.000 shares) 74,613 74,613 74,613 74,613 74,613 74,613*ref. Main accounting principles of Interim ReportGROUP NET SALES AND RESULT APRIL-JUNE 2009During the review period, Alma Media's net sales declined 11.2% fromthe corresponding period in the previous year, being MEUR 79.3(89.3).The operating profit declined to MEUR 11.9 (15.0), 15.1% (16.8%) ofnet sales. The second-quarter operating profit includes one-timecapital gains of MEUR -0.2 (0.6).GROUP NET SALES AND RESULT JANUARY-JUNE 2009The Group's net sales from January to June 2009 totalled MEUR 155.8(173.2). The share of the online business was 13.3% (13.2%) ofconsolidated net sales, MEUR 20.6 (23.0). The operating profitamounted to MEUR 6.5 (11.6). The comparable operating profit for thefirst half-year was MEUR 19.7 (26.0), down 24.2% from the comparisonperiod in the previous year.The operating profit includes one-time items in the amount of MEUR-1.2 (0.6). The one-time items in the current year are reorganisationcosts due to savings measures. As the result of statutory personnelnegotiations and other turnover, Alma Media's number of personneldeclined by 49 employees in the first half-year. The one-time profitfrom sales in the comparison period is from the sale of real estate.Net sales of the Newspapers segment were MEUR 111.0 (118.5). Netsales of the segment's advertising sales declined 13.8% from thecomparison period. Circulation net sales for Newspapers increasedslightly, supported by price increases. The comparable operatingprofit for Newspapers was MEUR 18.8 (21.1).Net sales of the Kauppalehti group were MEUR 32.3 (38.0). Thesegment's advertising sales declined 28.3% from the comparisonperiod. Circulation sales declined 7.5%. The comparable operatingprofit for the Kauppalehti group was MEUR 2.5 (5.1).Net sales of the Marketplaces segment were MEUR 14.2 (18.4). Thecomparable operating loss of Marketplaces was MEUR 0.4 (operatingprofit of MEUR 2.0).CHANGES IN GROUP STRUCTURE IN 2009Alma Media's ownership in Kotikokki.net Oy has risen to 40% in June,and this company will be reported as an associated company under theNewspapers segment in the consolidated financial statements.OUTLOOK FOR 2009Uncertainty about the development of advertising sales will continuein the third quarter and towards the end of the year 2009.Alma Media expects the single-copy sales of afternoon papers tocontinue their decline. The chargeable circulations of regional andlocal papers, as well as Kauppalehti, are expected to stay neutral ordecline moderately. Advertising in newspapers and the online media isexpected to stay at a lower level than in the previous year also inthe second half-year.Alma Media expects the full-year comparable net sales and operatingprofit to decrease from the 2008 level as a result of the decline inadvertising sales. In the third quarter, net sales and operatingprofit will fall behind the levels of Q3/2008.MARKET CONDITIONSThe Finnish national economy declined rapidly in early 2009. In thefirst quarter, the GNP weakened 7.5% from Q1/2008 according to theEconomic Bulletin of the Finnish Ministry of Finance. The GNP ofFinland is forecast to weaken 5-6% in 2009. According to preliminaryinformation by Statistics Finland, the output of the Finnish nationaleconomy decreased 9.2% in April, compared with April 2008.The decline in advertising sales that began towards the end of 2008accelerated in the early part of 2009. According to TNS MediaIntelligence, advertising spending declined 19.4% in January-June2009 and 19.8% in June in comparison with 2008. Advertising innewspapers during the same periods declined 23.8% and 23.9%,respectively. During the second quarter, advertising spending wasreduced by 19.6 % in all media groups together and 22.8 % innewspapers.During the second quarter, advertising in online media declinedaccording to TNS by 9.6 %. From the beginning of the year the declineis 8.8 % compared to the previous years' first half.Single-copy sales of afternoon papers declined 8.0% in January-June.NET SALES AND OPERATING PROFIT BY SEGMENTNET SALES AND OPERATING PROFIT AND LOSS BY SEGMENT 2009 2008 2009 2008 2008NET SALES BY SEGMENT, MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecNewspapers External 56.0 60.1 108.8 116.2 232.2 Inter-segments 1.1 1.1 2.2 2.3 4.5Newspapers total 57.1 61.2 111.0 118.5 236.7Kauppalehti group External 16.0 19.6 32.2 38.0 73.4 Inter-segments 0.1 0.0 0.1 0.0 0.1Kauppalehti group total 16.0 19.5 32.3 38.0 73.5Marketplaces External 7.1 9.2 14.2 18.2 34.0 Inter-segments 0.0 0.1 0.0 0.2 0.3Marketplace total 7.0 9.4 14.2 18.4 34.3Others External 0.3 0.4 0.7 0.8 1.6 Inter-segments 3.9 3.2 7.5 6.2 13.5Others total 4.2 3.6 8.2 7.0 15.1Elimination -5.0 -4.4 -9.9 -8.7 -18.4Total 79.3 89.3 155.8 173.2 341.2OPERATING PROFIT/LOSS BY 2009 2008 2009 2008 2008SEGMENT, MEUR * Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec Newspapers 11.1 11.8 18.0 21.1 41.5 Kauppalehti group 1.4 3.1 2.1 5.1 9.7 Marketplaces -0.2 0.9 -0.4 2.0 2.0 Other operations -0.3 -0.8 -1.2 -1.6 -4.9Total 11.9 15.0 18.5 26.6 48.3*) including one-time itemsNEWSPAPERS 2009 2008 2009 2008 2008Key figures, MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecNet sales 57.1 61.2 111.0 118.5 236.7Circulation sales 27.2 26.9 54.2 53.3 108.6Media advertisingsales 27.3 31.5 51.7 60.0 117.7Other sales 2.6 2.8 5.1 5.3 10.4Operating profit 11.1 11.8 18.0 21.1 41.5Operating margin, % 19.4 19.2 16.2 17.8 17.5Operating profitwithout one-timeitems 11.2 11.8 18.8 21.1 41.5Operating marginwithout one-timeitems, % 19.6 19.2 16.9 17.8 17.5Average no. ofpersonnel,calculated asfull-timeemployees excl.delivery staff 1 176 1210 1 164 1188 1 197Average no. ofdelivery staff 998 980 968 959 968Operational key 2009 2008 2009 2008 2008figures 4-6 4-6 1-6 1-6 1-12Audited circulationIltalehti 122,548Aamulehti 139,130Online services,unique visitors,WeeklyIltalehti.fi 1,695,372 1,357,835 1,702,838 1,327,961 1,412,534Telkku.com 569,955 499,422 582,994 516,422 515,939Aamulehti.fi 183,412 149,159 188,915 140,219 147,048The Newspapers segment reports the publishing activities of 35newspapers. The largest of the papers are Aamulehti and Iltalehti.The second-quarter net sales for the Newspapers segment declined 6.7%from the previous year, totalling MEUR 57.1. Advertising sales inthis segment declined MEUR 4.2 (-13.5%) during the second quarter of2009. Aamulehti particularly suffered from this development. Thedecline in sales did not worsen from the situation in the early partof the year in the second quarter. Advertising sales for the onlineservices developed well throughout the segment.Circulation net sales for Newspapers grew in the second quarter,assisted by price increases. Circulation development for regional andlocal papers remained neutral or in a slight decline. Iltalehti'scirculation decreased 3.2% while the entire afternoon paper marketdeclined 4.1%.Cost savings have been realised according to business unit specificplans. In the second quarter, savings have primarily encompassedprinting and distribution costs as well as personnel and marketingcosts. The production efficiency of printing houses has been good.The Newspapers segment's second-quarter operating profit declined toMEUR 11.1 (11.8). The segment's comparable operating profit was MEUR11.2 (11.8).Satakunnan Kirjateollisuus Oy sold its distribution business toAamujakelu Oy as a group internal transaction on June 1, 2009. Thedeal will become effective on January 1, 2010. The distributionoperations of Satakunnan Kirjateollisuus Oy are responsible for theearly-morning distribution of Satakunnan Kansa and several othernewspapers.KAUPPALEHTI GROUP 2009 2008 2009 2008 2008Keu figures, MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecNet sales 16.0 19.5 32.3 38.0 73.5Circulation sales 5.6 6.3 11.6 12.5 24.8Media advertising sales 4.0 5.8 8.3 11.6 22.2Other sales 6.4 7.5 12.4 14.0 26.4Operating profit 1.4 3.1 2.1 5.1 9.7Operating margin, % 9.0 16.1 6.5 13.4 13.2Operating profit withoutone-time items 1.6 3.1 2.5 5.1 9.7Operating margin withoutone-time items, % 9.7 16.1 7.6 13.4 13.2Average no. of personnel,calculated as full-time 501 489employees 490 499 499 2009 2008 2009 2008 2008Operational key figures Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecAudited circulationKauppalehti 86,654Online services, uniquevisitors, weeklyKauppalehti.fi 537,302 366,292 540,683 357,585 391,453The Kauppalehti Group specialises in the production of business andfinancial information. Its best known title is Finland's leadingbusiness paper, Kauppalehti. The group also includes the contractpublishing company Lehdentekijät, direct marketing companyKauppalehti 121 and the news agency BNS that operates in the Balticcountries.The net sales of the Kauppalehti group declined 17.9% in the secondquarter of 2009, mainly due to the decline of Kauppalehti'sadvertising sales by 33%, and was MEUR 16.0. Kauppalehti'sadvertising sales is mainly affected by the reduced advertising byfinancial and car sectors and overall decline of recruitmentadvertising. The segment's circulation sales did not reach theprevious year's second-quarter level mainly due to the salesdevelopment in contract publishing.According to the TNS Päättäjä Atlas (Decision-maker Atlas) study,Kauppalehti has risen to third position in the printed newspapercategory in the decision-maker target group. In the participanttarget group, both Kauppalehti and in particular Kauppalehti.fisucceeded in increasing their reach. In the entrepreneur targetgroup, Kauppalehti rose to the position of the newspaper with thewidest reach.Market Information Services, part of the Kauppalehti group andincluding ePortti, Kauppalehti.fi and the business operations ofBalance Consulting, continued to develop its content and increasedits net sales.Programmes to implement the planned cost savings have advanced in allbusiness units of the Kauppalehti group. The most significant savingshave been achieved in printing and distribution costs, as well assales and marketing operations.The second-quarter operating profit of the Kauppalehti group declinedMEUR 1.7 and was MEUR 1.4. The comparable operating profit for thegroup was MEUR 1.6 (3.1).MARKETPLACES 2009 2008 2009 2008 2008Key figures, MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecNet sales 7.0 9.4 14.2 18.4 34.3Operations in Finland 5.9 7.6 12.0 15.1 28.0Operations outside Finland 1.1 1.8 2.2 3.3 6.3Operating profit -0.2 0.9 -0.4 2.0 2.0Operating margin, % -3.2 9.4 -3.0 10.9 5.9Operating profit withoutone-time items -0.2 0.9 -0.4 2.0 2.0Operating margin withoutone-time items, % -3.2 9.4 -2.9 10.9 5.9Average no. of personnel,calculated as full-timeemployees 202 211 216 205 216 2009 2008 2009 2008 2008Operational key figures Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecOnline services, uniquevisitors, weeklyEtuovi.com 348,487 319,636 350,077 323,029 321,176Autotalli.com 92,106 91,336 96,705 95,641 91,744Monster.fi 70,158 59,801 77,037 71,866 65,585Mikko.fi 70,973 44,362 74,676 22,181 47,915Mascus.com 118,392 66,888 122,972 63,961 80,679City24 220,867 256,534 258,350 260,442 265,516The Marketplaces segment reports classified services produced on theinternet and supported by printed products. The services in Finlandare Etuovi.com, Monster.fi, Autotalli.com, Mascus.fi and Mikko.fi.The services outside Finland are City 24, Mascus and Bovision.In the second quarter of 2009, the net sales of Marketplaces declined25.0%. No significant changes in comparison with the first quartertook place in the operating environment of Marketplaces. Therecruitment market in Finland continued to decline. The slightcyclical upturn in the home sales and used vehicle markets did notreflect markedly on the sales of the Etuovi.com and Autotalli.comservices.Mascus, the marketplace for heavy machinery, has continued to expandits operations into new countries. At the end of the second quarter,Mascus operates in 29 countries on four continents.The result of Marketplaces declined from an operating profit of MEUR0.9 to an operating loss of MEUR 0.2 in the second quarter. Thefigures for the segment do not include any significant one-timecapital items in the second quarter.Alma Media has sold the auto sales portal Motors24 operating inEstonia, Latvia and Lithuania. The sale did not have any significanteffect on the result of the segment.ASSOCIATED COMPANIESASSOCIATED COMPANIESShare of associated 2009 2008 2009 2008 2008companies' results, MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecNewspapers 0.0 0.1 0.0 0.1 0.1Kauppalehti group Talentum Oyj -0.6 0.6 -0.7 1.3 1.6Marketplaces 0.0 0.0 0.0 0.0 0.0Other operations AP-Paino Oy 0.0 0.0 0.0 0.0 1.8 Other associated companies 0.2 0.2 0.4 0.4 0.9Total -0.4 0.8 -0.3 1.8 4.5The Group holds a 29.9 per cent stake in Talentum Oyj, which isreported under the Kauppalehti group. The company's own shares in thepossession of Talentum are here included in the total number ofshares. In the consolidated financial statements of Alma Media theown shares held by Talentum itself are not included in the totalnumber of shares. Alma Media's shareholding was stated as 30.3% inits consolidated financial statements of June 30, 2009.The corporation sold its ownership in AP-Paino Oy in December 2008.BALANCE SHEET AND FINANCIAL POSITIONThe consolidated balance sheet at the end of June 2009 stood at MEUR156.0 (166.9 on December 31, 2008). The corporation's equity ratio atthe end of June was 58.4% (57.2% on December 31, 2008) and equity pershare was EUR 1.05 (1.18 on December 31, 2008).The Group currently has a MEUR 100 commercial paper programme inFinland underwhich it is permitted to issue papers to a total amount of MEUR0-100. The unused part of the programme was MEUR 90.7 on June 30,2009.The corporation's interest-bearing debt is denominated in euros andtherefore does not require hedging against exchange rate differences.The most significant purchasing contracts denominated in foreigncurrency are hedged.The consolidated cash flow fell MEUR 1.7 behind the comparisonperiod, being MEUR 4.0. Cash flow before financing was MEUR 2.9(2.5).CAPITAL EXPENDITUREThe Alma Media Group's capital expenditure in April-June totalledMEUR 1.4 (3.9). The expenditure comprised, besides normal operationaland replacement investments, the purchase of the shares inKotikokki.net Oy.RISKS AND RISK MANAGEMENTThe purpose of Alma Media's risk management activities is tocontinuously evaluate and manage all opportunities, threats and risksin conjunction with the company's operations to enable the company toreach its set objectives and to secure business continuity.The risk management process identifies the risks, developsappropriate risk management methods and regularly reports on riskissues to the risk management organisation. Risk management is partof Alma Media's internal audit function and thereby part of goodcorporate governance. Written limits and processing methods are setfor quantitative and qualitative risks by the corporate riskmanagement system.The most important strategic risks for Alma Media are a significantdrop in the readership of its newspapers and a decline in advertisingsales. Fluctuating economic cycles are reflected on the developmentof advertising sales, which accounts for approximately half of thecorporation's net sales. Developing businesses outside Finland, suchas the Baltic countries and other East European countries, includecountry-specific risks relating to market development and economicgrowth.In the long term, the media business will undergo changes along withthe changes in media consumption and technological developments. Thecorporation's strategic objective is to meet this challenge throughrenewal and the development of new business operations, particularlyin online media.The most important operational risks are disturbances in informationtechnology systems and telecommunication, and an interruption ofprinting operations.ADMINISTRATIONAlma Media Corporation's ordinary annual general meeting held onMarch 11, 2009 elected Lauri Helve, Matti Kavetvuo, Kai Seikku, ErkkiSolja, Kari Stadigh, Harri Suutari, Catharina Stackelberg-Hammarénand Seppo Paatelainen members of the company's Board of Directors.In its constitutive meeting held after the annual general meeting,the Board of Directors elected Kari Stadigh its Chairman and SeppoPaatelainen its Deputy Chairman. The Board also elected the membersof its committees. Kai Seikku, Erkki Solja, CatharinaStackelberg-Hammarén and Harri Suutari were elected members of theAudit Committee. Kari Stadigh, Seppo Paatelainen and Lauri Helve wereelected members of the Nomination and Remuneration Committee.The annual general meeting elected the auditing firm Ernst & Young Oythe company's auditor.DIVIDENDSIn accordance with the proposal by the Board of Directors, the annualgeneral meeting decided to pay a dividend of EUR 0.30 per share forthe financial period 2008. Dividend payment date was March 25, 2009.The dividends paid to the shareholders of the company in Marchtotalled MEUR 22.4.In addition, the annual general meeting authorised the Board ofDirectors to decide on distributing a maximum of EUR 0.20 per sharein additional dividends. The additional dividend may be distributedin one lot or in several proportions. The total dividend for the 2008financial year based on the authorisation may be no more than EUR0.50 per share. The authorisation includes a right to the Board ofDirectors to decide upon all other conditions pertaining to thedistribution of the dividend.THE ALMA MEDIA SHAREIn April-June, altogether 2,679,832 Alma Media shares were traded atNASDAQ OMX Helsinki Stock Exchange, representing 3.6% of the totalnumber of shares. The closing price of the Alma Media share at theend of the last trading day of the review period, June 30, 2009, wasEUR 4.86. The lowest quotation during the review period was EUR 4.60and the highest was EUR 5.90. Alma Media Corporation's marketcapitalisation at the end of the review period was MEUR 362.6.The company does not own any of its own shares. The annual generalmeeting decided to authorise the Board of Directors to repurchase amaximum of 3,730,600 of the company's shares, representing 5% of allshares. The authorisation is valid until the closing of the nextordinary general meeting.Option rightsOption programme 2006The Annual General Meeting of March 8, 2006 approved a three-stageoption programme (option rights 2006A, 2006B and 2006C), disapplyingthe pre-emptive subscription right of the shareholders. Under theprogramme, stock options may be granted to the managements of AlmaMedia Corporation and its subsidiaries as incentives for ensuringmotivation and long-term commitment. Altogether 1,920,000 stockoptions may be granted in three lots of 640,000 each, and these maybe exercised to subscribe to a maximum of 1,920,000 Alma Mediashares.A total of 515,000 2006A options have been issued to Groupmanagement. Altogether 75,000 of the 2006A options have been returnedto the company due to the termination of employment contracts. Afterthe returned options, Group management possesses a total of 440,0002006A option rights. In 2007 and 2008, Alma Media's Board ofDirectors decided to annul a total of 200,000 2006A option rights inpossession of the company. The option rights of the 2006A programmeare traded at NASDAQ OMX Helsinki Exchange since April 10, 2008.In 2007, the Board of Directors of Alma Media decided to issue515,000 options under the 2006B programme to Group management.Altogether 50,000 of the 2006B options have been returned to thecompany. Group management possesses a total of 465,000 2006B optionrights. All 175,000 2006B option rights in the possession of thecompany have been annulled. The option rights of the 2006B programmeare traded at NASDAQ OMX Helsinki Exchange since April 1, 2009.In 2008, the Board of Directors of Alma Media decided to issue520,000 options under the 2006C programme to Group management.Altogether 50,000 of the 2006C options have been returned to thecompany, and Group management now possesses a total of 470,000 2006Coption rights. 170,000 2006C option rights have been annulled.If all the subscription rights are exercised, the programme willdilute the holdings of the earlier shareholders by 1.8%.The share subscription periods and prices are:2006A: April 1, 2008-April 30, 2010, average trade-weighted priceApril 1-May 31, 20062006B: April 1, 2009-April 30, 2011, average trade-weighted priceApril 1-May 31, 20072006C: April 1, 2010-April 30, 2012, average trade-weighted priceApril 1-May 31, 2008The subscription price of shares that may be subscribed under thesestock option rights will be reduced by the amount of dividends andcapital repayments decided after the start of the period determiningthe subscription price and before the subscription of shares on thesettlement date for each dividend payment or capital repayment. Theshare subscription price under the 2006A option is EUR 5.28 pershare, the subscription price under the 2006B option is EUR 8.65 andthe subscription price under the 2006C option is EUR 8.76,correspondingly.Option programme 2009The annual general meeting of Alma Media on March 11, 2009 decided,in accordance with the proposal by the Board of Directors, tocontinue the incentive and commitment system for Alma Mediamanagement through an option programme according to earlierprinciples and decided to grant stock options to the key people ofAlma Media Corporation and its subsidiaries in the period 2009-2011.Altogether 2,130,000 stock options may be granted, and these may beexercised to subscribe to a maximum of 2,130,000 Alma Media shares,either new or in possession of Alma Media.The Board of Directors of Alma Media Corporation in May 2009 decidedto grant 640,000 option rights to corporate management under the2009A programme. The company is in possession of 70,000 2009Aoptions. The subscription price of a 2009A option is EUR 5.21 pershare.The granting of option rights is decided upon by the Board ofDirectors. The shares subscribed on the basis of the option rightsnow issued will constitute no more than 2.8% of all of the company'sshares and votes after a share subscription, in case new shares areissued.The share subscription periods and prices are:2009A: April 1, 2012-March 31, 2014, average trade-weighted priceApril 1-30, 20092009B: April 1, 2013-March 31, 2015, average trade-weighted priceApril 1-30, 20102009C: April 1, 2014-March 31, 2016, average trade-weighted priceApril 1-30, 2011The Board of Directors has no other current authorisations to raiseconvertible loans and/or to raise the share capital through a newissue.Market liquidity guaranteeAlma Media and eQ Pankki Oy have made a liquidity contract underwhich eQ Pankki Oy guarantees bid and ask prices for the shares witha maximum spread of 3% during 85% of the exchange's trading hours.The contract applies to a minimum lot of 2,000 shares.EVENTS AFTER THE REVIEW PERIODOn July 2, 2009 Alma Media received information from SkandinaviskaEnskilda Banken, Ilkka-Yhtymä Oyj and Kaleva Kustannus Oy thatSkandinaviska Enskilda Banken, Ilkka-Yhtymä Oyj and Kaleva KustannusOy have entered a conditional agreement on the sale of 11,958,000Alma Media shares to Ilkka-Yhtymä Oyj and Kaleva Kustannus Oy. Incase the agreement is fulfilled, the holding of SkandinaviskaEnskilda Banken will become under 1/20 (5%), the holding ofIlkka-Yhtymä Oyj will rise to 20.4% (15,218,991 shares) and theholding of Kaleva Kustannus Oy will rise to 5.97% (4,458,000 shares).SUMMARY OF FINANCIAL STATEMENTS AND NOTESSUMMARY OF FINANCIAL STATEMENTS AND NOTES 2009 2008 2009 2008 2008INCOME STATEMENT. MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecNET SALES 79.3 89.3 155.8 173.2 341.2 Other operating income 0.1 0.7 0.2 0.7 1.7 Materials and services -23.9 -26.4 -47.3 -51.5 -102.0 Costs arising fromemployment benefits -28.5 -30.1 -58.1 -59.5 -119.0 Depreciation and writedowns -2.2 -2.1 -4.4 -4.3 -8.8 Operating expenses -12.9 -16.3 -27.7 -32.1 -64.9OPERATING PROFIT 11.9 15.0 18.5 26.6 48.3 Financial income 0.1 0.2 0.5 0.8 1.2 Financial expenses -0.1 -0.3 -0.6 -0.6 -1.6 Share of associatedcompanies' results -0.4 0.8 -0.3 1.8 4.5PROFIT BEFORE TAX 11.5 15.7 18.1 28.6 52.4 Income tax -3.3 -4.0 -5.1 -7.2 -13.4PROFIT FOR THE PERIOD 8.3 11.8 12.9 21.5 39.0OTHER COMPREHENSIVE INCOMEExchange difference ontranslation of foreignoperations -0.1 0.0 -0.1 0.0 -0.8Share of associatedcompanies' othercomprehensive income 0.0 0.0 -0.7 -0.3 -0.9Income tax relating tocomponents of othercomprehensive income 0.0 0.0 0.0 0.0 0.0Other comprehensive incomefor the period.net of tax -0.1 0.0 -0.8 -0.3 -1.8TOTAL COMPREHENSIVE INCOMEFOR THE PERIOD 8.2 11.8 12.1 21.1 37.2Distribution of the profitfor the period: To the parent companyshareholders 8.3 11.6 12.9 21.0 38.4 Minority interest 0.0 0.2 0.0 0.4 0.6Distribution of thecomprehensive income for theperiod: To the parent companyshareholders 8.2 11.6 12.1 20.7 36.6 Minority interest 0.0 0.2 0.0 0.4 0.6Earning/share calculated fromthe profit for the period tothe parent companyshareholdersEarnings/share, EUR 0.11 0.16 0.17 0.28 0.51Earnings/share (diluted), EUR 0.11 0.16 0.17 0.28 0.51 30 Jun 2009 30 Jun 2008 31 DecBALANCE SHEET, MEUR 2008ASSETSNON-CURRENT ASSETS Goodwill 32.9 32.6 33.0 Intangible assets 11.9 11.8 12.3 Tangible assets 33.3 36.9 35.2 Investments in associated companies 28.7 31.9 31.6 Other financial assets 4.4 5.2 4.2 Deferred tax assets 1.1 1.1 1.3CURRENT ASSETS Inventories 1.4 1.2 1.5 Tax receivables 1.6 0.8 4.0 Accounts receivable and other 24.4 32.8receivables 27.5 Other short-term financial assets 1.8 2.7 2.9 Cash and cash equivalents 14.4 8.5 13.3ASSETS AVAILABLE FOR SALE 0.0 4.7 0.0TOTAL ASSETS 156.0 170.3 166.9 30 Jun 2009 30 Jun 2008 31 DecBALANCE SHEET, MEUR 2008SHAREHOLDERS' EQUITY AND LIABILITIES Share capital 44.8 44.8 44.8 Share premium fund 2.8 2.8 2.8 Cumulative translation adjustment -0.9 0.0 -0.8 Retained earnings 31.3 23.9 41.1 Parent company shareholders' equity 78.0 71.5 87.9 Minority interest 0.0 0.4 0.6TOTAL SHAREHOLDERS' EQUITY 78.0 71.9 88.5LIABILITIESNon-current liabilities Interest-bearing liabilities 3.3 4.2 3.9 Deferred tax liabilities 2.4 2.4 2.5 Pension obligations 3.5 3.6 3.7 Provisions 0.1 0.1 0.1 Other long-term liabilities 0.5 0.5 0.5Current liabilities Interest-bearing liabilities 11.3 28.2 15.2 Advances received 22.4 22.0 12.3 Tax liabilities 0.0 0.0 1.3 Provisions 0.6 0.2 1.0 Accounts payable and other 33.8 37.2liabilities 37.9TOTAL LIABILITIES 77.9 98.4 78.4TOTAL EQUITY AND LIABILITIES 156.0 170.3 166.9RECONCILIATION OF SHAREHOLDERS' EQUITY 1 January - 30 June 2009 Share Transla- Parent Share premium tion Retained company Minority EquityMEUR capital fund difference earnings total interest totalEquity, 1 44.8 2.8 -0.8 41.1 87.9 0.6 88.5January 2009 Dividendpaid byparentcompany -22.4 -22.4 -22.4Dividendspaid bysubsidiaries -0.6 -0.6Share-basedpayments 0.3 0.3 0.3TotalComprehensiveincome forthe period -0.1 12.2 12.1 0.0 12.1Equity, 30June 2009 44.8 2.8 -0.9 31.3 78.0 0.0 78.0RECONCILIATION OF SHAREHOLDERS' EQUITY 1 January - 30 June 2008 Share Transla-tion Parent Share premium difference Retained company Minority EquityMEUR capital fund earnings total interest totalEquity, 1 44.8 2.8 0.0 70.0 117.7 0.6 118.3January 2008 Dividendpaid byparentcompany -67.2 -67.2 -67.2Dividendspaid by -0.6 -0.6subsidiariesShare ofassociatedcompanies'equity items -0.1 -0.1 -0.1Share-basedpayments 0.4 0.4 0.4TotalComprehensiveincome forthe period 20.7 20.7 0.4 21.1Equity, 30 44.8 2.8 0.0 23.9 71.5 0.4 71.9June 2008 2009 2008 2009 2008 2008CASH FLOW STATEMENT. MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecCash flow from operatingactivities Profit for the period 8.3 11.8 12.9 21.5 39.0 Adjustments 5.3 4.7 9.3 8.6 17.5 Change in working capital -6.9 -8.1 9.1 7.4 4.0 Dividend income received 1.5 3.8 2.3 4.0 4.5 Interest income received 0.1 0.2 0.5 0.6 0.9 Interest expenses paid -0.1 -0.3 -0.6 -0.6 -1.6 Taxes paid -4.1 -6.3 -3.9 -8.9 -17.5Net cash provided byoperating activities 4.0 5.7 29.5 32.5 46.9Cash flow from investingactivities Investments in tangible andintangible assets -0.9 -1.5 -1.7 -2.4 -4.2 Proceeds from disposal oftangible and intangibleassets 0.0 1.0 0.0 1.0 1.0 Other investments -0.1 -0.8 -0.1 -0.8 -1.2 Proceeds from disposal ofother investments 0.1 0.0 0.1 0.1 0.8 Subsidiary shares purchased 0.0 -1.9 0.0 -3.9 -4.0 Associated company sharespurchased -0.2 0.0 -0.2 0.0 0.0 Associated company sharespurchased 0.0 0.0 0.0 0.0 6.5Net cash used in investingactivities -1.0 -3.2 -1.9 -6.0 -1.0Cash flow before financingactivities 2.9 2.5 27.7 26.5 45.8Cash flow from financingactivities Long-term loan repayments 0.0 0.0 0.0 0.0 0.0 Short-term loans raised 0.0 0.0 17.8 35.0 35.0 Short-term loans repaid -21.0 -9.5 -22.5 -10.2 -24.3 Change in interest-bearingreceivables 1.1 0.4 1.1 0.2 0.0 Dividends paid and capitalrepayment -0.6 -0.6 -23.0 -67.8 -67.8 -20.4 -9.8 -26.6 -42.8 -57.1Change in cash funds(increase + / decrease -) -17.5 -7.3 1.1 -16.3 -11.2Cash and cash equivalents atstart of period 31.8 15.7 13.3 24.8 24.8Impact of change in foreignexchange rates 0.0 0.0 0.0 0.0 -0.2Cash and cash equivalents atend of period 14.4 8.5 14.4 8.5 13.3Net sales by geographical 2009 2008 2009 2008 2008area, MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec Finland 76.1 84.6 149.2 163.9 324.0 Rest of EU countries 3.1 4.6 6.2 9.1 16.7 Rest of other countries 0.1 0.1 0.3 0.3 0.6Total 79.3 89.3 155.8 173.2 341.2INFORMATION BY SEGMENTAlma Media's reporting segments in the financial statements areNewspapers, Kauppalehti group and Marketplaces. Other Operationscomprise the Group's parent company and the operations of the Group'sfinancial management service centre.The descriptive section of the financial statements presents the netsales and operating profits of the segments and the allocation of theassociated companies' results to the reporting segments. Financialitems and income taxes are not allocated to the segments. Thefollowing table presents the assets and liabilities of the segmentsas well as the non-allocated asset and liability items. 30 Jun 2009 30 Jun 2008 31 DecASSETS BY SEGMENT, MEUR 2008 Newspapers 64.1 69.4 67.5 Kauppalehti group 47.4 54.0 52.3 Marketplaces 13.3 16.7 15.2 Other operations and eliminations 12.6 19.7 10.5 Non-allocated assets 18.6 10.5 21.4Total 156.0 170.3 166.9 30 Jun 2009 30 Jun 2008 31 DecLIABILITIES BY SEGMENT, MEUR 2008 Newspapers 38.6 40.2 32.7 Kauppalehti group 13.2 13.5 11.8 Marketplaces 3.5 4.3 4.2 Other operations and eliminations 5.6 5.6 6.8 Non-allocated liabilities 17.0 34.7 22.9Total 77.9 98.3 78.4 2009 2008 2009 2008 2008GROUP INVESTMENTS, MEUR Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec Newspapers 0.6 2.1 1.5 7.5 9.4 Kauppalehti group 0.3 0.4 0.6 0.8 1.4 Marketplaces 0.3 0.5 0.5 0.8 2.1 Others 0.3 0.9 0.4 1.0 1.6Total 1.4 3.9 3.0 10.1 14.5PROVISIONSThe company's provisions on June 30, 2009 totalled MEUR 0.7,representing a decrease of MEUR 0.4 from the situation on December31, 2008. The major part of the provisions concern restructuringprovisions. It has not been necessary to change the estimates madewhen the provisions were entered. The change in provisions is due toactual expenses. 30 Jun 2009 30 Jun 2008 31 DecCOMMITMENTS AND CONTINGENCIES, MEUR 2008Collateral on own behalf Chattel mortgages 0.0 0.0 0.0Collateral for others Guarantees 0.0 0.0 0.0Other commitments Commitments based on agreements 0.1 0.1 0.1Minimum rents payable based on otherlease agreements: Within one year 7.5 7.6 7.9 Within 1-5 years 18.8 17.4 19.1 After 5 years 26.5 25.1 27.9 Total 52.8 50.1 54.9The Group also has purchase agreementsbased on IFRIC 4 which include a leasecomponent per IAS 17, Minimum paymentsbased on these agreements: 2.0 4.2 3.1 31 DecGROUP DERIVATIVE CONTRACTS, MEUR 30 Jun 2009 30 Jun 2008 2008Commodity derivative contracts.electricity derivatives Fair value * -0.1 0.2 -0.1 Nominal value 0.9 0.4 0.7* the fair-value represents the return that would have arisen if thederivative had been cleared on the balance sheet date.RELATED PARTIESAlma Media Group's related parties are its associated companies andthe companies they own. The following table summarises the businessoperations undertaken between Alma Media and its associated companiesand the status of their receivables and liabilities:RELATEDPARTYACTIVITIES 2009 2008 2009 2008 2008WITH Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-DecASSOCIATEDCOMPANIES,MEURSales ofgoods andservices 0.0 0.1 0.1 0.2 0.2Purchases ofgoods andservices 1.0 1.2 1.9 2.3 4.5Accountsreceivable,loan andotherreceivablesat thebalancesheet date 0.0 4.7 0.0Accounts 0.1 0.1payable atthe balancesheet date 0.1Related parties also include the company's senior management (membersof the Board of Directors, presidents and the Group Executive Team).The section The Alma Media Share - Option Rights of this reportpresents information on changes to the current option programmeintended to motivate and secure the long-term commitment of theGroup's senior management.MAIN ACCOUNTING PRINCIPLES (IFRS)This interim report has been prepared according to IFRS standards(IAS 34).The report applies the same accounting principles and calculationmethods as the previous annual accounts dated December 31, 2008.However, the interim report does not contain all the information ornotes to the accounts included in the annual financial statements.This interim report should therefore be read in conjunction with thecompany's annual report.The key indicators are calculated using the same formulae as appliedin the previous annual financial statements. The quarterlypercentages of Return on Investment (ROI) and Return on Equity (ROE)have been annualised using the formula ((1+quarterly return)4)-1).In June, the Group performed and impairment test on goodwill andother assets. Based on the tests, no impairments have been recorded.In the financial year 2009, the Group has adopted the following newaccounting standards and interpretations:IFRS 8 Operating StandardsIAS 23 Borrowing costs, amendment to standardIAS 1 Presentation of financial statements, amendment to standardIFRS 2 Share-based payments, amendment to standardIAS 1 Presentation of financial statements and IAS 32 presentation offinancing instruments, amendment to standardIAS 39 IAS 39 Financial Instruments: recognition and measurement,amendment to standardIFRIC 12 Service concession arrangementsIFRIC 13 Customer loyalty programmesIFRIC 16 Hedges of net investments in a foreign operationImprovements to IFRS amendmentsThe European Union has not yet approved the adoption of the amendedstandard IAS 39. An EU approval is necessary for the amendedstandards to be adopted within the Group.The Group preliminarily expects that the above new standards andinterpretations will have only a minor effect. The Grouppreliminarily expects that their application mainly affects the wayof presenting the profit and loss statement, the balance sheet, thepresentation of changes in equity and notes to the financialstatements.New accounting standards to be adopted from the beginning of 2010are:IFRS 3 Business combinations, amendment to standardIAS 27 Consolidated and separate financial statementsThese amendments will affect the treatment of future acquisitions asfar as, for example, the minority share, goodwill and acquisitioncosts are concerned. The amendments will have no effect onacquisitions already made.The figures in this interim report are unaudited.SEASONALITYThe Group recognises its circulation revenues as paid. For thisreason circulation revenues accrue in the income statement fairlyevenly during the four quarters of the year. The bulk of circulationinvoicing takes place at the beginning of the year and therefore thecash flow from operating activities is strongest in the first andsecond quarters. This also affects the company's balance sheetposition in different quarters.GENERAL STATEMENTThis report contains certain statements that are estimates based onthe management's best knowledge at the time they were made. For thisreason they contain a certain amount of risk and uncertainty. Theestimates may change in the event of significant changes in thegeneral economic conditions.NEXT INTERIM REPORTAlma Media will publish its financial statements for the first ninemonths of 2009 on October 29, 2009 at 9:00am (EET).ALMA MEDIA CORPORATIONBoard of Directorshttp://hugin.info/3000/R/1330479/314529.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 23.07.2009 - 07:59 Uhr
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