GuruFocus -
- Revenue Growth: 2.4% increase, primarily from the acquisition of Netwheels.
- Adjusted Operating Profit: Increased by almost 7% to a record high of 29.1% for the quarter.
- Digital Revenue Share: 86% for the third quarter, with a rolling 12-month average of 84%.
- Equity Ratio: Healthy level, with leverage decreasing.
- Marketplaces Segment Organic Growth: 5.5% increase.
- Career Segment Profitability: 43.2%, with room for further development.
- News Media Profitability: 16.4%, despite a decline in revenues.
- Cash Flow After Investments: EUR16.4 million, compared to EUR10.5 million in the previous year.
- Earnings Per Share: EUR0.18, compared to EUR0.19 in the previous year.
- Interest Rate: Average of 3.8%, compared to 4% in the previous year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alma Media Oyj (FRA:A4M) achieved an all-time high quarterly profitability with an adjusted operating profit increase of almost 7% to 29.1%.
- The company reported a slight revenue growth of 2.4%, primarily driven by the acquisition of Netwheels and organic growth in certain segments.
- Digital transformation continues successfully, with digital revenues accounting for 86% of total revenues in the third quarter.
- The Marketplaces segment showed strong performance with a 5.5% organic growth, particularly in the commercial premises business in Sweden and Finland.
- Alma Media Oyj's balance sheet is healthy, with a strong equity ratio and decreasing leverage, providing room for future investments.
- The print business continues to decline, with a reported decrease of around 10%, impacting overall revenue streams.
- The Finnish labor market remains challenging, affecting the Career segment's performance, particularly in Finland and the Baltic regions.
- The housing market in Finland is at a low level, and the new car sales market is also struggling, impacting related business segments.
- The advertising market remains weak, contributing to a decline in revenues for the News Media segment.
- Despite positive signs, there is still uncertainty in the overall business environment, making future growth projections cautious.
A: Kai Telanne, CEO, explained that the South area is stabilizing after a period of strong growth driven by the travel industry. The growth is now at a healthy level, and future growth will depend on overall economic improvement.
Q: Can you discuss the drivers behind the organic sales increase in mobility and real estate verticals?
A: Kai Telanne, CEO, noted that growth in mobility is driven by the used car business and data services from Netwheels. In real estate, commercial premises are performing well, especially in Sweden, with stable volumes and competitive pricing in Finland.
Q: How fast are you moving with new strategic initiatives, particularly regarding AI, and which aspect is more important: additional sales or internal efficiency?
A: Kai Telanne, CEO, stated that the company is taking a step-by-step approach, starting with internal efficiencies to improve cost-effectiveness and agility. The focus will then shift to enhancing current services and eventually developing new business models.
Q: Regarding the Career invoicing slide, how should we interpret the current invoicing levels in relation to revenue?
A: Kai Telanne, CEO, explained that when invoicing is above the revenue curve, revenue growth is expected. Currently, the invoicing and revenue curves are aligning, indicating that revenue development has likely bottomed out.
Q: What are the key success factors behind the high profitability in News Media, and how sustainable is this level?
A: Kai Telanne, CEO, attributed the success to a series of initiatives, strong teamwork, and a focus on customer needs. The profitability is seen as sustainable with continuous product development and strategic focus on key areas.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.