Growth in shareholder value through producing information, service and experiences
Alma Media has offered its shareholders solid dividends and reasonably good growth in shareholder value over the past five years. As change in the media markets picked up speed, the company revised its strategy for the coming years in autumn 2010. Alma Media aims for faster growth in shareholder value by increasing its revenue from digital consumer and business services.
In 2005–2010, the company’s focus was on developing its newspaper and online media. The strategy was based on developing publishing operations, continuously renewing the company’s products and services, using chaining operations as a tool for improving quality and efficiency, internationalisation and acquisitions, all with the primary goal of accelerating the rate of internationalisation, particularly in the Marketplaces business. At the same time, the recession brought about by the global financial crisis intensified the changes in the operating environment and in the media markets. For more information on operational enviroment, please see Operating environment.
As a result of strategic choices, the products and services of Alma Media have been strongly renewed, financial development has been positive and the company has distributed dividends even during economically challenging times. At the same time, job satisfaction among employees has reached an excellent level. There is still room for improvement, however, as revenue growth and the rate of internationalisation fell short of targets.
Digital services in a key role in the growth strategy
Alma Media has revised its strategy for the coming years. The focus will be increasingly on digital consumer and business services, which are outpacing traditional media in growth. With strong financials, the company is well positioned to make significant acquisitions if the right opportunity presents itself.
The company aims to increase shareholder value through increased revenue, strong profitability and ability to pay dividends by focusing on the following strategic goals:
- Strengthening existing products and services
- Aggressively driving the remodeling of newspaper brands into multimedia brands.
- Increasing revenue from digital consumer and business services through both organic growth and acquisitions.
- Developing expertise, management, organisation and steering systems to support growth and business renewal.
In the future, the focus of Alma Media’s business will be on publishing, digital consumer services and digital business services. Digital services will generate an increasing share of the company’s revenue.
The strategic focus in publishing operations will be on the following:
- Developing the content of newspapers and their digital services (service journalism, redesigns, paid content online and on new distribution channels, Internet TV).
- Increasing the company’s share of the advertising market.
- Developing new revenue streams (paid services, new forms of advertising, packaging content).
- Expanding the distribution business.
- Seizing the opportunities offered by new printing technology.
- Increasing competitive advantage through chaining operations.
- Expanding the chain of newspapers through acquisitions in strategically important areas.
The focal points in the strategy for digital services are:
- Acquiring new businesses.
- Developing new business concepts.
- Strengthening the company’s position as the Finnish market leader in classified advertising.
- Strengthening the partnership network.
The digital services business aims for strong growth by benefiting from good consumer and business customer relations and their national coverage. Digital services create attractive benefits for media clients.
Group level actions
Group level actions include strengthening expertise to support the execution of strategy and developing operating processes that enable the flexible expansion and internationalisation of operations. Further points of emphasis include developing the ability to innovate, improving operational efficiency, shortening product development process (time-to-market) and leveraging shared marketing resources. Established internal collaboration system (chaining operations) play a significant role in, among other things, renewing Alma Media’s ways of operating and its products.
Research and development is conducted in close proximity to customers, both in business units and in chains shared by them, with a focus on developing products and services. Alma Media also participates in collaborative research and development projects with other industry members and is an active initiator and participant in public dialogue on responsibility in the media sector. www.almamedia.fi/strategy
Financial objectives and dividend policy
Alma Media does not publish its numerical financial targets. The company is aiming for significant growth in shareholder value in the next five years.
Alma Media does not have a fixed dividend policy. In 2005–2010, the company’s dividend yield ranged from 5.3% to 8.5% (based on the Board’s proposal on dividend of 2010).
Outlook for 2011
Alma Media expects its full-year revenue and operating profit excluding non-recurring items to increase from the 2010 level. Full-year revenue for 2010 was M€ 311.4, operating profit M€ 43.4 and operating profit excluding non-recurring items M€ 43.9. www.almamedia.fi/investors