Revised strategy: stronger growth from digital services
The year 2010 was one of renewed optimism for Alma Media after the recessionary circumstances of 2009. As total demand improved through the course of the year, the economy picked up and advertising spending increased, our business got a nice uplift.
This was also reflected in our key indicators for the year. Our revenue increased to M€ 311.4 and operating profit reached M€ 43.4, or 13.9% of revenues. The Board of Directors will propose that a dividend of € 0.70 be paid per share, which corresponds to a dividend yield of 8.5%.
Setting a direction for the industry
We continued Alma Media’s renewal and development projects with great success in 2010. In many ways, we are blazing a path for the entire media sector.
Pohjois-Suomen Media, which is Alma Media’s unit responsible for publishing regional newspapers in Northern Finland, succesfully introduced new ways of operating and a renewed format for its papers. The first tabloid format issues of Lapin Kansa, Pohjolan Sanomat and Kainuun Sanomat were delivered to subscribers in January 2011. The response to the changes was positive among both readers and advertisers. Changes to the operating methods and content of Aamulehti, implemented in the autumn, were also well received.
During the year, we decided to invest in the future of the printed newspaper by modernising our printing facility in Tampere. A new facility featuring the latest in printing technology will be constructed next to the existing printing facility, with the launch of operations scheduled for early 2013.
The year 2010 was also quite positive on the digital services front. Iltalehti cemented its position as the leading Finnish online media measured in both visitors and revenue. Kauppalehti continued its pioneering efforts to develop a profitable information services business alongside traditional publishing operations. In the online marketplace business, a co-operation was launched with Arena Partners, owned by newspapers operating in Central Finland, giving national coverage for our services Etuovi.com, Vuokraovi.com, Autotalli.com and Mikko.fi. This gives us an excellent opportunity to further develop these businesses.
Digital services in a key role in growth strategy
We revised Alma Media’s strategy for the coming years in autumn 2010. The focus will be increasingly on digital consumer and business services, which are outpacing traditional media in growth. The key objectives of the revised strategy are increased revenue, strong profitability and the ability to pay dividends – in other words, continuing to increase shareholder value.
The implementation of the strategy will be based on strengthening existing products and services, aggressively driving the renewal of our newspaper brands as multimedia brands and increasing revenue from digital consumer and business services. To achieve these, we need to develop our expertise, management, organisation and steering systems to support growth and business renewal.
Particularly in the area of digital services, we will also pursue growth through acquisitions. Alma Media’s strong financial position gives us the potential to make significant moves on this front. Read more on the revised strategy.
Reading devices present new opportunities
Alma Media is keeping a close eye on the market for electronic reading devices and their development. We carry out experiments on various platforms. While estimations vary, the expectations are that dozens of new e-readers and tablets will be launched in the near future. Their era is just beginning, but it is already clear that they will offer completely new kinds of possibilities for the media industry. I also see e-readers and tablets as an avenue for creating consumer revenue from digital content. They may also improve the availablity of our services in sparsely populated areas and compensate the rapidly increasing costs of the newspaper delivery.
Alma Media is Finland’s most responsible media company
Alma Media has also continued to pave the way for the rest of the industry in terms of corporate responsibility. The role of a watchdog is inherently one of great responsibility, and we have continued to make our operations increasingly transparent in the past year. In the early summer we became the first Finnish media company to release an independent corporate responsibility report. Alma Media ranked first among Nordic media houses in Carbon Disclosure Project of 2010. We aim to continue on this path of a greater focus on responsibility and transparency by, for example, publishing Alma Media’s Code of Conduct in 2011.
This publication is a combination of a traditional annual report and a corporate responsibility report. The decision to combine the two is one of our ways of showing that responsibility is an integral part of our daily work.
The year 2010 was one of success and development for Alma Media. I wish to extend my warmest thanks to everyone at Alma Media, our customers, shareholders, partners and other stakeholders for the past year. We have a lot to look forward to.