ALMA MEDIA CORPORATION STOCK EXCHANGE RELEASE
9 FEB 2007, 9.00 AM
1 (14)
FINANCIAL STATEMENTS BULLETIN 2006
Alma Media Group's full-year net sales totalled MEUR 301.9 (MEUR
285.9), representing growth of 5.6 %. The operating profit rose to
MEUR 49.1 (MEUR 42.3), up 16 %. The Newspapers and Marketplaces
businesses were very successful. Media sales for the Kauppalehti
group's Kauppalehti business daily were weak. Market conditions are
expected to remain similar to 2006. In 2007 net sales are expected to
continue growing and operating profit excluding one-time items to
reach at least the same level as in 2006.
- The Group's operating profit includes two one-time items entered in
the fourth quarter: a capital gain, totalling MEUR 4.2, on the sale
of properties in Kemi and Tampere, and cost provisions totalling MEUR
1.5 to cover the restructuring of the Kainuun Sanomat printing works
and structural reorganization within Kauppalehti. One-time income in
2005 totalled MEUR 3.2 and one-time costs MEUR 2.9.
The Group's full-year profit before taxes amounted to MEUR 49.9 (MEUR
49.5). The same figure in the comparison year, 2005, includes two
one-time items reported below the operating profit: a capital gain of
MEUR 3.3 recognized by Alma Media on the associated company Talentum
Oyj's sale of Satama Interactive Oyj, which increased Alma Media's
share of this associated company's result, and a net total of MEUR
4.3 in financial income related to the Group's restructuring in 2005.
- Newspaper media sales picked up towards the end of the year.
Aamulehti registered record media sales in euro terms in December.
Iltalehti reached a circulation market share of 43.1 % between
October and December. The full-year operating profit of the
Newspapers unit was MEUR 38.4 (MEUR 38.9). The operating profit was
depressed by the city paper Tori. A one-time provision of MEUR 0.4
was entered in the Newspapers segments' accounts on the restructuring
of the Kainuun Sanomat printing works.
- The full-year operating profit of the Kauppalehti group decreased
to MEUR 4.8 (MEUR 7.1) owing to weak media sales in the Kauppalehti
newspaper. Personnel negotiations have been started in Kauppalehti Oy
concerning the restructuring of operations and restoring the cost
structure to a level corresponding to income. The Kauppalehti group
recorded a one-time cost provision of MEUR 1.1 on the Kauppalehti
restructuring. The previous year's operating profit included a MEUR
0.8 capital gain resulting from the dilution of the company's
shareholding in Talentum Oyj following an acquisition by Talentum
paid for partly in shares.
- The full-year operating profit recorded by Marketplaces more than
doubled to MEUR 2.8 (MEUR 1.1). Net sales from continuing operations
in Finland rose 23 % and from operations outside Finland 121 %.
Prospects in 2007
Market conditions are expected to remain similar to 2006. Hence net
sales are expected to show further growth and the operating profit
excluding one-time items to reach at least the same level as in 2006.
Dividend proposal
Alma Media Corporation's Board of Directors will propose to the
Annual General Meeting on 8 March 2007 that a dividend of EUR 0.65
per share be paid on the financial year 2006. The dividend payment
date is 20 March 2007.
President and CEO Kai Telanne:
NEWSPAPERS END THE YEAR STRONGLY
The Finnish newspaper sector enjoyed a strong end to the year with
media sales growing by 5.2 % during the final quarter. The entire
media market recorded growth of 4.4 % for the year. Media sales by
Alma Media's Newspapers segment once again grew faster than the
market average at 6.1 %. The number of visitors to our internet pages
showed vigorous growth. Iltalehti's circulation figures and
circulation market share increased clearly. The market share reached
a record high in December, 44.7 %, representing an increase of 4.6
percentage points on the previous year.
2 (14)
The Kauppalehti group failed to reach its profit targets owing to
weaker performance by the publishing company Kauppalehti Oy itself
and especially to weak media sales in the Kauppalehti paper. On the
other hand, Kauppalehti's subsidiaries all showed good business
development. At the end of the year we started negotiations
concerning all Kauppalehti Oy employees in order to streamline its
multimedia operations and to restore its finances to a healthy level.
The Marketplaces segment continued to grow strongly. Domestic
operations grew by 27 % between October and December, and foreign
operations by 190 %. Domestic operations were driven by the
Etuovi.com online home-buying service and printed papers, while
abroad the star performers were City24 and the Bovision companies
acquired in Sweden. Profitability in Finland improved.
Last year the company paid shareholders dividends and a capital
repayment totalling MEUR 48.5. Free cash flow in 2006 brought MEUR
45.2 into the company. Alma Media wishes to continue paying a good
annual dividend and the Board of Directors proposes a dividend of
0.65 euros per share, totalling MEUR 48.5.
ALMA MEDIA CORPORATION
Terhi Lambert-Karjalainen
Communications Manager
DISTRIBUTION: Helsinki Exchanges, principal media
Further information:
Kai Telanne, President and CEO, tel. +358 (0)10 665 3500
Teemu Kangas-Kärki, CFO, tel. +358 (0)10 665 2244
The FY2006 presentation material in English will be available from 11
am at http://www.almamedia.fi/home. A webcast will begin at 1.00 pm
and last about 20 minutes. A conference call will begin at 1.30 pm.
The webcast can be followed at http://www.almamedia.fi. To
participate in the conference call, please call +44-20 7162 0025.
Alma Media is a profitably growing and internationally expanding
company that invests in the future of newspapers and the online
media. Its best known products are Aamulehti, Iltalehti, Kauppalehti
and Etuovi.com.
Net sales in 2006 totalled EUR 302 million and the operating margin
was 16 %. The company's share is listed in the Mid Cap segment of the
OMX Nordic Exchange's Nordic List, trading code ALN1V. More
information at http://www.almamedia.fi/home
ALMA MEDIA GROUP'S FINANCIAL STATEMENTS BULLETIN JANUARY - DECEMBER
2006
Changes in Group structure compared to 2005
On 1 July 2006 Kauppalehti raised its holding in TietoEnator 121 Oy
from 49 % to 100 %. The company was renamed Kauppalehti 121 Oy and
has annual net sales of around MEUR 9.
Alma Media Lehdentekijät, part of the Kauppalehti group, acquired
Finnish Business Communications Ltd on 1 July 2006. The company has
annual net sales of about MEUR 2.5.
Bovision AB and Objektvision AB were acquired for the Marketplaces
segment on 1 July 2006. The aggregate net sales of the two companies
is approximately MEUR 1.7.
Consolidated net sales and result October-December 2006
Consolidated net sales between October and December totalled MEUR
82.9 (MEUR 75.6) and the operating profit was MEUR 16.0 (MEUR 14.8).
The Group's circulation income rose 6.5 % to MEUR 32.9 (MEUR 30.9),
driven primarily by an increase in the weekday price of the Iltalehti
daily tabloid to 1.20 (1.0) euros. The fourth quarter was a good one
for media sales, which reached MEUR 40.8 (MEUR 37.8), representing
growth of 8.0 %.
3 (14)
The Newspapers segment recorded an operating profit between October
and December of MEUR 10.8 (MEUR 11.9). The operating profit was
depressed by the city paper Tori and the costs of Aamulehti's 125th
anniversary. A MEUR 0.4 provision was entered in the Newspapers
segment's accounts to cover one-time restructuring costs at the
Kainuun Sanomat printing works.
The Kauppalehti group's October-December operating profit declined to
MEUR 0.8 (MEUR 3.9) owing to weak media sales by the Kauppalehti
paper. Personnel negotiations have been started in the publishing
company Kauppalehti Oy aimed at reorganization. A MEUR 1.1 provision
was recorded in the Kauppalehti group accounts to cover the one-time
costs arising from this reorganization. The operating profit in 2005
included a MEUR 0.8 capital gain arising from the dilution of Alma
Media's holding in Talentum Oyj.
Net sales from Marketplaces' operations in Finland, its domestic
market, grew by 27 % and from operations outside Finland by 190 %.
Growth in foreign operations was driven by the presence of the
Bovision companies in Sweden and growth recorded by the City24
companies in Estonia and Lithuania. In Finland, the largest increases
in business volume were evident in the Etuovi.com online home-buying
service, 52 %, and the Monster.fi online recruitment service, 30 %.
The October-December operating profit includes a MEUR 4.2 capital
gain on the sale of properties in the cities of Kemi and Tampere.
Consolidated net sales and result 2006
The Group's net sales for the full year 2006 amounted to MEUR 301.9
(MEUR 285.9) and the operating profit was MEUR 49.1 (MEUR 42.3).
The Group's circulation sales rose 4.2 % to MEUR 125.5 (MEUR 120.4)
and media sales grew 5.4 % to MEUR 146.3 (MEUR 138.8). The volume of
printing contracts declined once again. Other sales increased 22.5 %
to MEUR 27.6 (MEUR 22.6).
The full-year operating profit was increased by the capital gain of
MEUR 4.2 on the sale of the Kemi and Tampere properties. The
operating profit was reduced by restructuring costs, MEUR 1.5 in all,
arising from restructuring of the Kainuun Sanomat printing works and
within Kauppalehti Oy.
In the comparison year the operating profit was increased by one-time
income comprising a MEUR 0.8 capital gain on the dilution of the
Talentum Oyj holding, a capital gain of MEUR 1.2 on the sale of the
NWS unit, and compensation totalling MEUR 1.2 awarded to Alma Media
and paid by Edita Oyj in arbitration proceedings related to Acta
Print Oy.
Restructuring costs in the Group reduced the comparison year's
operating profit by MEUR 2.9.
In the comparison year, Alma Media's result from associated companies
was boosted by a capital gain of MEUR 3.3 recorded by Talentum Oyj on
the sale of Satama Interactive Oyj, and its financial income was
increased by MEUR 5.9 in receivables from the Broadcasting
divestment.
A signing fee of MEUR 1.6 increased financial expenses in the
comparison year.
Prospects in 2007
Market conditions are expected to remain similar to 2006. Hence net
sales are expected to show further growth and the operating profit
excluding one-time items to reach at least the same level as in 2006.
Market conditions
Overall, conditions in the Finnish economy continued to be good. The
consumer confidence index was clearly higher in December than on
average. Media advertising rose 3.7 % according to TNS Gallup.
Compared to the previous year, newspaper advertising grew 2.5 %,
whereas advertising in business papers declined by 2 %. Online media
advertising rose 25.7 %.
4 (14)
Of the major advertising businesses, advertising expenditure was
increased by the classified advertising sectors recruiting (+ 17.6
%), vehicles (+ 8.4 %) and homes (+ 9.3 %). Within the homes and
living segment, furniture advertising was given priority, showing
growth of 41.3 %. The major businesses that reduced advertising
expenditure were travel (- 1.8 %) and teleservices. Advertising of
teleservices fell 23.3 % for the whole year but increased by 6.8 % in
newspapers between October and December.
Within the circulation areas of Alma Media's newspapers, media sales
were boosted by the opening of new shopping complexes: Ideapark in
Pirkanmaa, and a shopping mall in Haaparanta where the major
advertiser is Ikea.
The daily tabloid circulation market declined in 2006 by almost 3 %,
principally in the Helsinki metropolitan area.
ALMA MEDIA GROUP
KEY FIGURES 2006 2005 2006 2005
MEUR 10-12 10-12 1-12 1-12
Net sales* 82.9 75.6 301.9 285.9
Operating profit* 16.0 14.8 49.1 42.3
% of net sales 19.3 19.6 16.3 14.8
Net financial expenses* 0.0 0.4 0.5 -2.7
Net financial expenses*, % of net sales 0.0 0.5 0.2 -1.0
Share of associated companies' result* 0.1 0.8 1.2 4.5
Balance sheet total 199.7 243.6
Gross capital expenditure* 3.4 3.2 19.6 19.7
Gross capital expenditure*, % of net 4.2 4.2 6.5 6.9
sales
Equity ratio 61.3 54.5
Gearing, % -5.6 -10.5
Interest-bearing net debt -6.5 -13.2
Interest-bearing liabilities 21.7 56.4
Non-interest-bearing liabilities 62.7 60.4
Average personnel, calculated as 1 929 1 766 1 901 1 808
full-time employees, excl. delivery
staff*
Average no. of delivery staff* 887 834 857 900
Earning/share, EUR 0.16 0.16 0.50 0.52
(basic)*
Earnings/share, EUR 0.16 0.16 0.50 0.52
(diluted)*
Cash flow from operating activities, EUR 0.11 0.14 0.63 0.45
*
Shareholders' equity/share, EUR 1.54 1.69
Market capitalization 690.2 573.0
Average no. of shares (1,000 shares)
- basic 74 613 74 474 74 613 74 474
- diluted 74 629 74 474 74 613 74 474
No. of shares at end of period (1,000 74 613 74 613 74 613 74 613
shares)
* applies to continuing operations
The figures in the tables are independently rounded.
5 (14)
2006 2005 2006 2005
NET SALES BY SEGMENT, MEUR 10-12 10-12 1-12 1-12
Continuing operations:
Newspapers 58,2 55,4 217,9 211,6
Kauppalehti group 19,0 15.9 62.6 53.8
Marketplaces 6.4 5.1 23.1 22.7
Other operations and eliminations -0.7 -0.8 -1.7 -2.2
Continuing operations, total 82.9 75.6 301.9 285.9
Discontinued operations, total 67.2
Adjustments and eliminations -4.6
Total 82.9 75.6 301.9 348.5
2006 2005 2006 2005
OPERATING PROFIT/LOSS BY SEGMENT, MEUR 10-12 10-12 1-12 1-12
Continuing operations:
Newspapers 10.8 11.9 38.4 38.9
Kauppalehti group 0.8 3.9 4.8 7.1
Marketplaces 0.8 0.2 2.8 1.1
Other operations and eliminations 3.7 -1.2 3.1 -4.8
Continuing operations, total 16.0 14.8 49.1 42.3
Discontinued operations, total 3.7
Alma Media Group before capital gain 46.0
Capital gain from Broadcasting 324.5
Total 16.0 14.8 49.1 370.5
NEWSPAPERS
Newspapers, key figures (MEUR) 2006 2005 2006 2005
10-12 10-12 1-12 1-12
Net sales 58.2 55.4 217.9 211.6
Circulation sales 26.4 24.7 101.8 98.1
Media advertising sales 28.8 27.1 104.5 100.4
Printing sales 1.7 2.2 6.2 8.0
Other net sales 1.3 1.3 5.4 5.1
Operating profit 10.8 11.9 38.4 38.9
Operating margin, % 18.5 21.6 17.6 18.4
Gross capital expenditure 0.9 1.9 4.1 7.3
Average personnel, calculated as full-time 1 189 1 179 1 220 1 203
employees, excl. delivery staff
No. of delivery staff 887 834 857 900
The publishing activities of 35 newspapers are reported in the
Newspapers segment. The largest are the regional paper Aamulehti and
the daily tabloid Iltalehti.
The segment's net sales were MEUR 217.9 (MEUR 211.6) and the
operating profit was MEUR 38.4 (MEUR 38.9).
Media sales in the Newspapers segment were more buoyant than in the
Finnish newspaper sector on average, up 4.1 % compared to the
industry average of 2.5 %. Aamulehti reached an all-time high in
media sales in December, this growth being largely attributable to
the opening of the Ideapark shopping centre on 1 December 2006 and to
its spin-off effects. Iltalehti's media sales were boosted by the
success of the online website Iltalehti.fi. The Northern Papers
increased their media sales at the end of the year, helped in part by
the opening of a new shopping mall and Ikea in the town of
Haaparanta.
The segment's operating profit was depressed by the town paper Tori,
Aamulehti's Sunday supplements, and the costs of Aamulehti's 125th
anniversary celebrations. Aamulehti discontinued its book publishing
unit during the autumn.
6 (14)
Personnel negotiations concerning the entire workforce of the Kainuun
Sanomat printing works (about 40 employees) were started on 7
December 2006. A MEUR 0.4 one-time cost provision was entered in
December.
Iltalehti increased the price of its weekday issue on 6 November 2006
from 1.0 to 1.20 euros. Iltalehti's market share in December was
record-high. The paper's good circulation development was supported
by the Iltalehti Ilona supplement launched in March. The market share
for the full year was 41.4 %, (40.0 %).
Kokkolan Sanomat was added to the Local Newspapers chain on 1
September 2006.
Jouko Jokinen began as publisher of Satakunnan Kansa on 1 June 2006.
KAUPPALEHTI GROUP
Kauppalehti group key figures, MEUR 2006 2005 2006 2005
10-12 10-12 1-12 1-12
Net sales 19.0 15.9 62.6 53.8
Circulation sales 6.5 6.2 23.7 22.4
Media advertising sales 6.8 6.9 22.1 23.1
Other net sales 5.7 2.9 16.7 8.4
Operating profit 0.8 3.9 4.8 7.1
Operating margin, % 4.0 24.7 7.7 13.2
Gross capital expenditure 0.5 0.1 6.4 8.1
Average personnel, calculated as full-time 535 420 496 418
employees
The Kauppalehti group specializes in producing business and financial
information. Its best known title is Finland's leading business daily
Kauppalehti. The group also includes Alma Media Lehdentekijät
(contract publishing) and the direct marketing company Kauppalehti
121.
Net sales of the Kauppalehti group totalled MEUR 62.6 (MEUR 53.8) and
its operating profit was MEUR 4.8 (MEUR 7.1).
Kauppalehti group's net sales were increased compared to the previous
year by the new units Kauppalehti 121 and Finnish Business
Communications Ltd from 1 July 2006, and also by increased sales in
the ePortti, Lehdentekijät and BNS units.
The decrease in Kauppalehti group's operating profit was attributable
to weak media sales in the Kauppalehti paper, down 7.3 % on the
previous year. The Presso paper's media sales improved towards the
end of the year. Kauppalehti's circulation volume and income
developed positively.
Kauppalehti Oy announced the start of personnel negotiations
concerning all its employees on 27 December 2006. These are expected
to lead to a reduction of 35-40 employees. Restructuring costs of
MEUR 1.1 were recorded in the fourth-quarter accounts.
The previous year's operating profit included a MEUR 0.8 capital gain
related to the dilution of the Talentum Oyj holding.
Juha-Petri Loimovuori has headed Kauppalehti group since 1 November
2006.
MARKETPLACES
Marketplaces key figures, MEUR 2006 2005 2006 2005
10-12 10-12 1-12 1-12
Net sales 6.4 5.1 23.1 22.7
Operations in Finland 5.1 4.0 19.7 16.1
Operations outside Finland 1.2 0.4 3.3 1.5
Other operations * 0.7 5.1
Operating profit 0.8 0.2 2.8 1.1
Profit margin, % 11.8 3.5 12.3 4.9
Gross capital expenditure 1.7 0.8 7.3 3.5
Average personnel, calculated as full-time 132 91 111 109
employees
7 (14)
* Other operations includes the net sales of the NWS unit and New
Ventures unit for 2005. These units were divested during 2005.
The Marketplaces unit reports Alma Media's classified services, which
are produced on the internet and supported by printed products.
Net sales from Marketplaces amounted to MEUR 23.1 (MEUR 22.7) and the
operating profit was MEUR 2.8 (MEUR 1.1).
Net sales from continuing operations in Finland rose 23 % and from
foreign operations 121 %. In the latter case, sales were boosted by
the inclusion of the Bovision companies from 1 July 2006, as well as
growth in the City24 units in Estonia and Lithuania. In Finland, the
highest growth was shown by Monster.fi, which raised its market
share, and by the online service Etuovi.com.
In monetary terms the operating profit was boosted most of all by the
Etuovi.com printed papers, and the Mascus and Monster services.
ASSOCIATED COMPANIES
Share of results of associated companies, MEUR 2006 2005 2006 2005
10-12 10-12 1-12 1-12
Newspapers 0.0 0.0
Kauppalehti group
Talentum Oyj 0.2 1.7 0.7 5.4
Other associated companies 0.0 0.1 0.3 0.1
Marketplaces 0.0 0.0 0.0 0.0
Other operations
Acta Print Oy -0.2 -1.5 -0.4 -1.7
Other associated companies 0.1 0.4 0.6 0.7
Total 0.1 0.8 1.2 4.5
The Group's holding in Talentum Oyj, reported under the Kauppalehti
group, is 29.9 %. and in Acta Print Oy, reported under Other
operations, 36.0 %.
Balance sheet and financial position
Almanova's purchase of Alma Media shares was treated as a reverse
acquisition by the Financial Supervision Authority in its decision
released on 26 January 2006. This means that the carrying values in
the consolidated financial statements are the same as those for the
old Alma Media and carried through to the new company after the
merger. Hence the balance sheet total for the new Alma Media on 7
November 2005 is MEUR 247.
The balance sheet on 31 December 2006 totalled MEUR 199.7 (31
December 2005: MEUR 243.6). The total was reduced by the maturity and
repayment on 4 October 2006 of the company's MEUR 30 medium-term
notes, a dividend payment of EUR 0.12 per share on 20 March 2006, and
a capital repayment to shareholders on 23 August 2006 amounting to
EUR 0.53 per share. The company's equity ratio rose to 61.3 % (31
December 2005: 54.5 %).
Operating capital increased during the fourth quarter by MEUR 5.1
owing to later than usual invoicing of December media sales which
fell due in January this year.
The Group's interest-bearing is denominated in euros and therefore
does not require hedging against exchange rate differences.
Capital expenditure
Gross capital expenditure for the full year totalled MEUR 19.6
(19.7). Acquisitions accounted for over half of this total, the
largest being a 51 % holding in TietoEnator 121 Oy for an acquisition
price of MEUR 3.4 (49% of the company acquired in 2005), and the
acquisition of the Bovision companies in Sweden.
8 (14)
Research and development costs
Research and development costs in 2006 amounted to MEUR 1.7 (3.1). Of
this total, MEUR 1.2 was capitalized and MEUR 0.5 expensed.
Risks and risk management
The most important strategic risks contingent on Alma Media's
business operations are a significant drop in the readerships of its
newspapers and a critical decline in retail advertising. The major
operational risks are disturbances in information technology systems
and telecommunication, and an interruption of printing operations.
The company's financial risks are detailed in the notes to the
financial statements.
Alma Media's risk management process identifies the risks, develops
appropriate risk management methods and regularly reports on risk
issues to the risk management function.
Administration
Alma Media's annual general meeting, held on 8 March 2006 elected the
following to the Board of Directors: Lauri Helve, Matti Häkkinen,
Matti Kavetvuo, Kai Seikku, Kari Stadigh and Harri Suutari. The Board
elected Kari Stadigh as its chairman and Matti Kavetvuo as its deputy
chairman.
The meeting appointed KPMG Oy Ab as the company's auditors.
The company applies the recommendations (entry into force on 1 July
2004) prepared by HEX Plc, the Central Chamber of Commerce of Finland
and the Confederation of Finnish Industries EK concerning the
corporate governance of listed companies, subject to the following
derogations:
- Nomination committee (Recommendation 31) Within the Alma Media
Group, this committee is known as the Election Committee. The Board
of Directors does not appoint members to the committee; the
committee's members are appointed from the company's principal
shareholders.
- Compensation committee (Recommendations 25 and 34) The Board of
Directors does not appoint members to the Compensation Committee;
under the Board of Directors' rules of procedure, the members of the
committee are the chairman and deputy chairman of the Board of
Directors.
Information on the company's corporate governance are given in full
and regularly updated on the company's website
http://www.almamedia.fi/corporategovernancesta
The company also applies the Helsinki Exchange's insider guidelines
which came into force on 1 January 2006.
Personnel
The average number of employees, excluding newspaper distribution
staff and calculated as full-time employees, increased to 1,901
(1,808). The average number of distribution staff totalled 857 (900).
Salaries and bonuses paid amounted to altogether MEUR 86.2 (85.7).
The Alma Media share
Trading in Alma Media's shares has been lively. Altogether 47.6
million shares were traded on the Helsinki Stock Exchange during the
year, representing 63.8 % of the total number of shares. The lowest
quotation in the year was EUR 6.90, the highest was EUR 9.95 and the
closing price was EUR 9.25. The highest quotation was reached on 21
December 2006 after the company announced that it was engaged in
merger talks with Keskisuomalainen Oyj. The company subsequently
issued a release on 22 December 2006 that these talks had been
terminated after no conclusion was reached.
9 (14)
The Helsinki Exchanges ended trading in trading lots in October 2006.
The Alma Media share is now traded on the Nordic Mid Cap List of the
OMX Helsinki stock exchange, introduced in October 2006.
The company's market capitalization on 29 December 2006 was MEUR
690.2 (MEUR 573.0).
The company had 4,404 registered shareholders on the balance sheet
date. There were 11,154,585 nominee-registered shares, or 15.0 % of
the total number of shares.
The company does not own its own shares and it has no authorization
to purchase its own shares in public trading.
Option rights
The annual general meeting on 8 March 2006 approved a three-stage
option programme (option rights 2006A, 2006B and 2006C), disapplying
the pre-emptive subscription right of the shareholders, under which
stock options would be granted to the managements of Alma Media
Corporation and its subsidiaries as a scheme for ensuring personnel's
motivation and long-term commitment to the company. Altogether
1,920,000 stock options may be granted in three lots of 640,000 each,
and these may be exercised to subscribe for at most 1,920,000 Alma
Media shares.
So far 515,000 of the 2006A options have been issued to Group
management. A further 65,000 options have been issued to the Group's
subsidiaries for granting to new personnel by the Board of Directors.
If all the subscription rights were exercised, this programme would
dilute the holdings of the earlier shareholders by 2.5 %.
The share subscription periods and prices under the scheme are:
2006A: 1 April 2008-30 April 2010, average trade-weighted price 1
April-31 May 2006
2006B: 1 April 2009-30 April 2011, average trade-weighted price 1
April-31 May 2007
2006C: 1 April 2010-30 April 2012, average trade-weighted price 1
April-31 May 2008
The subscription price of shares that may be subscribed under these
stock option rights will be reduced by the amount of dividends and
capital repayments decided after the start of the period determining
the subscription price and before the subscription of shares, on the
settlement date for each dividend payment or capital repayment. The
current subscription price of the 2006A option after the capital
repayment in 2006 is EUR 7.13 per share.
The Board of Directors is authorized until 8 March 2007 to decide on
raising one or more convertible bond loans, and/or on raising the
share capital with one or more rights issues provided that, when
converting the convertible bonds, and/or when issuing new shares, at
most 14,922,000 shares may be issued and the share capital may be
raised by at most 8,953,200 euros.
This authorization includes the right to disapply the pre-emptive
right of the shareholders provided that the company has weighty
financial grounds for so doing, such as the need to finance or
execute acquisitions or other corporate arrangements or to motivate
the personnel.
Liquidity providing
Alma Media Corporation and eQ Pankki Oy have made a liquidity
providing contract under which eQ Pankki Oy guarantees bid and ask
prices for the shares with a maximum spread of 3% during 85% of the
exchange's trading hours. The contract applies to a minimum of 2,000
shares.
10 (14)
Flagging notices
17 July 2006: Oy Herttaässä Ab announced that it had made forward
contracts corresponding to a holding of 4.88 % maturing on 19
December 2006. These would raise the company's total holding to over
10 %.
19 July 2006: Capital Group's holding decreased to 3.7 %.
21 August 2006: Skandinaviska Enskilda Banken's holding rose to 5 %.
13 September 2006: Procomex S.A. and Helsingin Mekaaninkontalo Oy
announced that their combined holding would rise to 5 % through
forward contracts maturing on 19 December 2006.
10 November 2006: Evli group increased its holding to 5.6 %
18 December 2006: Evli group reduces its holding to 2.9 %
The Procomex and Helsingin Mekaanikontalo and the Herttaässä forward
contracts matured on 19 December 2006; the former two announced that
their holding would increase to 5 % and the latter that its holding
would exceed 10 % on maturity. Both parties renewed their contracts
and their registered holdings did not at the time exceed the flagging
limits mentioned. The new maturity dates are 16 February 2007 (2.5 %)
and 16 March 2007 (2.5 %) for Procomex and Helsingin Mekaanikontalo
respectively, and 15 June 2007 (5.5 %) for Herttaässä.
Environmental impacts
Alma Media's operations have a small direct impact on the
environment. However, the company is committed to continuously making
its production and transport processes more environmentally sound and
energy-efficient. Paper waste in the printing plants is minimized.
The company's main environmental impacts relate to its newspaper
printing operations. These generate waste, which is recycled or taken
to hazardous waste treatment plants. The company's operations comply
with the permits granted by the relevant environmental centres.
Dividend proposal
Alma Media Corporation's Board of Directors will propose to the
annual general meeting on 8 March 2006 that a dividend of 0.65 euros
per share be distributed on the financial year 2006. The payment date
is 20 March 2006.
Subsequent events
The company sold the property in Rovaniemi used by the Lapin Kansa
newspaper to Varma Mutual Pension Insurance Company on 1 February
2007, recording a capital gain of MEUR 1.9 on the sale.
2006 2005 2006 2005
INCOME STATEMENT, MEUR 10-12 10-12 1-12 1-12
Continuing operations:
NET SALES 82.9 75.6 301.9 285.9
Other operating income 4.5 1.3 5.5 5.2
Operating expenses -68.8 -59.8 -248.1 -238.2
Depreciation, amortization and impairment -2.6 -2.4 -10.1 -10.5
charges
OPERATING PROFIT 16.1 14.8 49.9 42.3
Financial income and expenses 0.0 -0.4 -0.5 2.7
Share of results in associated companies 0.1 0.8 1.2 4.5
PROFIT BEFORE TAX 15.9 15.1 49.6 49.5
Income tax -4.3 -3.0 -12.5 -10.5
PROFIT FROM CONTINUING OPERATIONS 11.8 12.1 37.3 39.0
Income from discontinued operations -0.1 1.4
Capital gain on Broadcasting disposal 324.5
NET PROFIT FOR THE PERIOD 11.8 12.0 37.3 365.0
11 (14)
2006 2005 2006 2005
10-12 10-12 1-12 1-12
Distribution
To the parent company shareholders 11.8 12.0 37.0 364.6
Minority interest 0.0 0.0 0.3 0.4
Earnings/share (EPS), EUR, continuing 0.16 0.16 0.50 0.52
operations (basic)
Earnings/share (EPS), EUR, continuing 0.16 0.16 0.50 0.52
operations (diluted)
EPS, EUR, discontinued operations, incl.
Broadcasting capital gain (basic) 4.37
EPS, EUR, discontinued operations. incl.
Broadcasting capital gain (diluted) 4.37
BALANCE SHEET, MEUR 31.12.2006 31.12.2005
ASSETS; CONTINUING OPERATIONS
NON-CURRENT ASSETS
Tangible assets 51.7 60.6
Intangible assets 9.7 7.4
Goodwill 30.2 18.9
Investments in associated companies 32.1 40.4
Other long-term investments 3.9 6.6
Deferred tax assets 4.1 4.8
Other receivables 4.8 5.3
CURRENT ASSETS
Inventories 1.8 1.5
Trade and other receivables 31.9 28.5
Cash and cash equivalents *) 28.2 69.6
Non-current assets held for sale 1.2
ASSETS, TOTAL 199.7 246.6
BALANCE SHEET, MEUR 31.12.2006 31.12.2005
EQUITY AND LIABILITIES; CONTINUING OPERATIONS
Parent company shareholders' equity 114.9 126.2
Minority interest 0.4 0.5
SHAREHOLDERS' EQUITY, TOTAL 115.3 126.7
LIABILITIES
Deferred tax liabilities 1.8 2.0
Long-term liabilities 30.0 31.3
Current liabilities 52.6 84.8
EQUITY AND LIABILITIES, TOTAL 199.7 243.6
12 (14)
RECONCILIATION OF SHAREHOLDERS' EQUITY 1 JAN - 30 DEC 2006
Share Parent
Share Share premium Retained company's Minority Equity,
MEUR capital issue fund earnings share interest total
Equity 1.
Jan. 2006 44.8 0.0 42.4 39.0 126.2 0.5 126.7
Cumulative
translation
differences 0.1 0.1 0.1
Share of
assoc.
company
items
recognized
directly in
equity -0.1 -0.1 -0.1
Net income
recognized
directly in
equity 0.0 0.0 0.0
Profit in
the period 37.0 37.0 0.3 37.3
Net income
entered for
the period 37.0 37.0 0.3 37.3
Share-based
payments 0.3 0.3 0.3
Dividend
paid by
parent
company -9.0 -9.0 -9.0
Capital
repayment by -39.5 -39.5 -39.5
parent
company
Dividend
paid by -0.3 -0.3
subsidiaries
Dissolution
of -0.2 -0.2
subsidiary
Equity 31 44.8 0.0 2.8 67.2 114.9 0.4 115.3
Dec. 2006
RECONCILIATION OF SHAREHOLDERS' EQUITY 1 JAN - 30 DEC 2005
Parent
Share Share Share Retained company's Minority Equity,
MEUR capital issue premium earnings share interest total
Equity 1 Jan.
2005 26.5 1.8 50.8 66.8 145.8 2.1 147.9
Share of items
recognized
directly in
associated
company's
equity 0.8 0.8 0.8
Net income
recognized
directly in
equity 0.8 0.8 0.8
Profit in the
period 364.6 364.6 0.4 365.0
Net income
entered for 365.4 365.4 0.4 365.8
the period
Establishment
of Almanova 0.1 0.9 1.0 1.0
Corporation
Almanova
Corporation 5.2 47.4 52.7 52.7
rights issue
28 April
Almanova
Corporation 39.4 405.6 445.0 445.0
rights issue 7
November
Impact on
equity of -27.3 -470.4 -393.2 -890.9 -890.8
reverse
acquisition
Listing costs -1.6 -1.6 -1.6
Minority
interest in -1.8 -1.8
subsidiaries
sold
Dividend paid
by -0.1 -0.1
subsidiaries
Share options 0.9 -1.8 9.7 8.7 8.7
exercised
Other changes 0.1 0.1
Equity 31 Dec.
2005 44.8 0.0 42.4 39.0 126.2 0.5 126.7
13 (14)
2006 2005 2006 2005
CASH FLOW STATEMENT, MEUR 10-12 10-12 1-12 1-12
Continuing operations:
Operating activities
Net profit for the period 11.8 12.0 37.3 39.0
Adjustments 3.9 2.2 18.2 8.8
Change in working capital -5.2 -1.5 -3.8 1.3
Financial items and taxes -2.6 -2.3 -5.1 -15.4
Net cash provided by operating activities 7.9 10.4 46.7 33.7
Cash flow from investing activities 8.0 -1.8 -1.5 -12.0
Cash flow before financing activities 15.8 8.6 45.2 21.7
Cash flow used in financing activities -30.6 -397.9 -86.5 -438.1
Discontinued operations:
Cash flow from operating activities 0.0 -1.3
Cash flow from investing activities 345.7 383.2
Cash flow used in financing activities 0.0 81.6
Change in cash and cash equivalents
(increase +/decrease -) -14.7 -43.6 -41.4 47.1
Cash and cash equivalents at start of
period 42.9 113.2 69.6 22.5
Cash and cash equivalents at close of
period 28.2 69.6 28.2 69.6
2006 2005 2006 2005
GROUP INVESTMENTS. MEUR 10-12 10-12 1-12 1-12
Gross capital expenditure, continuing 3.4 3.2 19.6 19.7
operations
Gross capital expenditure, discontinued
operations 2.7
Gross capital expenditure on fixed assets, 3.4 3.2 19.6 22.4
total
ACQUIRED BUSINESSES during
1-9/2006, MEUR Book value before Fair values used in
consolidation consolidation
Tangible assets 0.2 0.2
Intangible assets 0.1 2.6
Receivables 2.0 2.0
Cash and cash equivalents 0.9 0.9
Assets total 3.1 5.6
Deferred tax liabilities 0.7
Current liabilities 1.9 1.9
Total liabilities 1.9 2.6
Net assets 1.2 3.0
Goodwill arising in acquisition 8.1
Acquisition cost 11.1
Cash and cash equivalents of
acquired operations 0.9
Impact on cash flow 10.2
During 2006 the following companies were acquired: Autoinfo,
Apartament.pl housing portal, Bovision AB and Objektvision AB for the
Marketplaces segment. For Kauppalehti group segment Mediaskopas,
Finnish Business Communications Ltd and the remaining (51 %) holding
of Kauppalehti 121 Oy. For the Newspapers segment Kokkolan Sanomat.
14 (14)
GROUP CONTINGENT LIABILITIES, MEUR 31.12.2006 31.12.2005
Collateral for own commitments:
Chattel mortgages 0.1 0.0
Collateral for others:
Guarantees 0.0 2.2
Other commitments:
Commitments based on agreements 0.1 0.1
Minimum rent payable on other rent agreements:
Within 12 months 6.1 4.8
Within 1-5 years 14.6 13.3
After 5 years 13.0 13.2
Total 33.8 31.3
The Group also has certain purchasing
commitments based on IFRIC 4 that include
another rental component as ref. to in IAS 17. 7.7 9.6
GROUP DERIVATIVE CONTRACTS. MEUR 31.12.2006 31.12.2005
Raw material derivatives
Fair value * 0.0
Amount. tonnes 5 000
Nominal value 2.6
Share options
Fair value * 0.8
Nominal value 2.6
* The fair value represents the yield that would have arisen if the
derivative positions had been cleared at the balance sheet date.
MAIN ACCOUNTING PRINCIPLES (IFRS)
This interim report has been prepared applying the recognition and
measurement principles of IAS 34 (Interim Financial Reporting).
Owing to the Group's restructuring in 2005, the per share data for
the comparative period have been adjusted to correspond with the
current share structure to ensure comparability.
In the comparative figures, the restructuring in 2005 is evident in
the treatment of the merger of the previous Alma Media Corporation
and Almanova Corporation as a reverse acquisition, as required by the
Finnish Financial Supervision Authority in January 2006. The reverse
acquisition took place in the second quarter of 2005.
The consolidated financial statements have been prepared in the name
of the legal parent company (Almanova Corporation until 7 November
2005) but continuity in the consolidated accounts applies to the
financial statements of the old Alma Media. In other words the book
values of the old Alma Media have been carried through to the new
company.
The figures in this interim report are unaudited.
Use of estimates
This bulletin contains certain statements that are estimates based on
management's best knowledge at the time they were made. For this reason they
contain risks and uncertainty. The estimates could change in the event of
significant changes in business conditions.
Alma Media publishes its interim report for the first three months of the year at
9.00 am (EET) on 3 May 2007.
ALMA MEDIA CORPORATION
Board of Directors
FINANCIAL STATEMENTS BULLETIN 2006
| Source: Alma Media