The Year Alma Media Got Down to Business
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The year Alma Media got down to business. Contents Key figures 3 From the President and CEO 4 Highlights 6 Strategy 7 Segments 8 Financial performance 10 Media industry 12 Marketplaces 16 By the journalist 17 Newspapers 18 Circulations 24 Kauppalehti group 25 Responsibility 28 Personnel 32 Chain management 34 Company Governance 36 Organization 40 Board of Directors 41 Group Executive Team 42 Financial statements Report by the Board of Directors 46 Consolidated statements Income statement 50 Balance sheet 51 Cash flow statement 52 Statement of changes in equity 53 Accounting principles 54 Notes 59 Key figures 85 Parent company statements Income statement 87 Balance sheet 87 Cash flow statement 88 Accounting principles 89 Notes 90 Board’s proposal to the AGM 98 Auditors’ report 98 Shares and shareholders 99 Information for shareholders 101 Analysts 102 Contacts 103 Breakdown of net sales 2006 (M€ 301.9) Media sales 48.5% Circulation sales 41.6% Other sales 9.1% Contract printing sales 0.8% ‡ FROM THE PRESIDENT AND CEO “Dear Reader, ear 2006 was successful for Alma Media. Almost all our The supply of business and financial journalism outstrips demand business units made progress in the right direction and our and only the strongest brands will survive into the future. Kauppalehti, chaining concept moved up a gear. Our net sales and operating ranking number one in its field, has a head start when it comes profit exceeded the previous year’s already good level. We to multimedia development, and internet services already account for Yfurther consolidated our market position. The circulations of our a significant share of Kauppalehti’s income. Accelerating growth newspapers and number of visitors to our internet services were on through acquisitions has likewise proved a good step. The fast-growing the rise. All of which demonstrates that we developed our journalism contract publishing and direct marketing businesses give and services in the right direction. the Kauppalehti group new drive and added synergies that the whole The strong position of our newspapers is based on readerships Alma Media can benefit from. The growth in Kauppalehti’s and built up over many years, an asset to be carefully maintained. One Kauppalehti Presso’s circulations in recent years encourage us to of the main strengths of our newspapers is the sense of community continue developing content with an open mind also in the print media. they create. They are the banner-holders in their own areas, leading We need growth and we are seeking it. But Finland’s saturated from the front, working for the community’s well-being. They must market offers only limited scope for this and in consequence we are improve journalistically to ensure they are equipped to meet setting our sights on Finland’s neighbouring regions. Expansion of our tomorrow’s needs. Marketplaces unit eastwards via the Baltic region is already making One aspect is making more diverse use of the internet and mobile good speed and accelerating all the time. We will support the large technology. Mass culture is a thing of the past; readers are now number of new online vehicle and home-buying marketplaces now looking for dialogue and interaction. They also want to make the news emerging by further acquisitions as opportunities arise. The themselves, continue discussion, take issue, produce content. The proportion of net sales derived from our foreign operations will internet services of our newspapers are opening up new increase sharply in the years ahead. opportunities, enabling people to participate directly in dialogue and We are keeping a close eye on our competitors, on changes in to enliven it. consumer behaviour and especially on how young people are using I believe that you too are looking for perspectives, understanding the media and advertising. Our strategy will evolve to reflect these and interpretation when you open the morning paper. We are firmly of trends and we will also identify what skills and knowhow we will need the opinion that the need for high-quality, thoughtful journalism will in the future as the world changes. not diminish. The facts are nowadays on the internet at everyone’s We simply have to see far enough ahead and have the courage fingertips but it’s understanding and interpretation that decide the to take the right steps. And indeed we will.” = game. Our newspapers must learn to provide greater value, to arouse emotions, and advance opinions. It’s not enough that we provide only Kai Telanne news when our readers are expecting views. President and CEO “The strong position of our newspapers is based on readerships built up over many years, an asset to be carefully maintained.” ‡ xHIGHLIGHTS x x x x Highlights of Almanova’s also approved a three-stage acquired 49% the year before. Pohjolan Sanomat newspapers. 26 Jan acquisition incentive programme for key The acquisition increased The new function will start of the Alma Media shares personnel. A new member, Kauppalehti group’s annual net operating by autumn 2007. is interpreted as a reverse Kai Seikku, was elected to sales by roughly 9 million euros. acquisition. The Finnish the Board of Directors. Alma Media Financial Supervision ruled Finnish Business 24 Oct announces its that the transaction should Aamulehti 1 Jul Communications divestment of properties in be treated as a reverse 12 Mar redesigns becomes part of Alma Media’s Tampere and Kemi for a total acquisition, which means that its Sunday edition with contract publishing group of almost 10 million euros. the post-merger carrying the addition of two new Lehdentekijät, giving values in the consolidated sections, Asiat (What Matters) Lehdentekijät added expertise Iltalehti raises accounts are those of and Ihmiset (Who Matters). in professional advertisement 6 Nov the copy price the previous Alma Media. The change was warmly marketing for corporate of its weekday edition to 1.20 Hence the balance sheet of approved by readers but at magazines. euros. The cost of the weekend the new Alma Media, which the same time it slightly edition remains unchanged at began operations on increased production costs. Marketplaces buys 2 euros. 7 November 2005, totalled 1 Jul online services 247 million euros. The for home-buying and business Personnel 27 Apr Marketplaces premises in Sweden. 30 Nov negotiations Establishment unit announces its acquisition are started at the Kainuun 10 Feb of new of a majority holding in a Polish Kauppalehti Sanomat printing works and marketplaces in Tallinn home-buying portal, which 31 Aug group’s apply to all staff on the rotation (Estonia) and Kiev (Ukraine) became part of the City24 president announces he will and sheet-printing presses. announced. Later in the spring chain in the autumn. Mascus become president of Talentum The press machinery was an online marketplace, signs licence agreements Oyj on 1 November 2006. previously updated in the 1970s Motors24, for trade-in cars in Poland and Slovenia. and is now nearing the end will be opened in Tallinn and Kokkolan Sanomat of its lifetime. a home-buying marketplace, Jouko Jokinen 1 Sep becomes part of City24, in Kiev. 1 Jun starts as publisher the Local Newspapers group. Alma Media of Satakunnan Kansa on the This free sheet published in 22 Dec announces Iltalehti retirement of Tuomo Saarinen. the town of Kokkola has that the board of directors 1 Mar announces March Jokinen was previously a print-run of over 30,000. of Keskisuomalainen is not launch of a new tabloid, Iltalehti executive editor-in-chief willing to continue discussions Ilona, for female readers. of the newspaper. Juha-Petri on the merger of the two The aim is to increase the 29 Sep Loimovuori companies. Information on tabloid’s circulation sales and Aamulehti is appointed to Kauppalehti the year-long negotiations the paper was highly successful 14 Jun terminates its group’s board of management leaked to the press the day in this task. book publishing unit. Four new from 1 November 2006. He before and the companies books will be published in previously headed media sales admit to holding discussions. The annual the autumn. Book publishing and marketing in Kauppalehti. 8 Mar general meeting will continue but on a smaller Kauppalehti Oy approves the Board’s dividend scale. Alma Media 27 Dec announces the and capital repayment 29 Sep announces need for operational proposal. In March the company Kauppalehti exercises it will set up a joint political streamlining. The company paid a dividend of 0.12 euros 1 Jul its option to buy the desk in Helsinki serving starts personnel negotations per share and an additional outstanding 51% of the shares the Kauppalehti, Aamulehti, that apply to all employees. = capital repayment of 0.53 of TietoEnator’s direct Satakunnan Kansa, Lapin euros per share. The meeting marketing company 121, having Kansa, Kainuun Sanomat and ‡ S T R A T E G Y Group strategy MIssIon VALUES VISIon For individual freedom Freedom and pluralism The winning team in newspaper and well-being of journalism and online media Team play STRATEGIC CHOICES CHAINING OF OPErations Renewal INTErnational Growth MErGErS AND acqUISITIONS lma Media Group’s newspapers are supported by strong product and development (content renewal, development of online media, new supplements and newspaper sections); its Aability to evolve; chaining, which enhances quality and profitability; and growth in the Newspaper chain. The online media business will see further growth. Online media include classified marketplaces, online business intelligence services, and the online services of the newspapers. A further driver of growth is international expansion. = ‡ S E G M E N T S Profits seven-fold Alma Media Group generates its profits from seven profit centres: Aamulehti, Iltalehti, Satakunnan Kansa, Northern Newspapers, Local Newspapers group, Kauppalehti group and Marketplaces.