Alma Media has rarely been discussed on forums, and for example, in Inderes’ investor sentiment, the company receives surprisingly low ratings in my opinion, even though the company has strongly grown its earnings and cash flow in recent years, and the company’s management has an excellent track record of value-enhancing corporate arrangements.
It would be interesting to hear comments from forum members regarding Alma.
As a basis
From an investor’s perspective, Alma Media presents an interesting discussion point, namely that the company could potentially create more value for its shareholders by splitting into two separate listed companies, similar to Schibsted: 1) A recruitment portal company with a turnover of approximately 80 million euros and an operating profit of 25-30 million euros, and 2) a media and online marketplace business with a turnover of approximately 370 million euros and an operating profit of approximately 30-35 million euros.
Wouldn’t Alma be quite well protected from corona? Digital works even if you can’t go outside..
Alma is, for example, quite undervalued compared to Sanoma in terms of cash reserves, etc. Sanoma’s share price, on the other hand, has been boosted by a major investor’s systematic purchases. The markets are awaiting Alma’s next move. It is difficult to say the effect of Corona now; some companies are driven by emotion and major investors, and some are real.
One could speculate that if the economy falters a bit, digital platforms such as news, job search, and used goods would bring cash flow to Alma… Fortunately, they also managed to lighten the load of paper newspapers and have cash reserves…
There was an interesting view in today’s Kauppalehti. @Petri_Aho What kind of valuation multiples could be used in a “trade-off”? I’m mainly interested in a “broad-brush” vision of who would pay the difference and how Alma’s revenue and profit growth % would change from 2021 onwards?
NettiX’s multiple is likely close to Sanoma’s Oikotie deal’s EV/EBIT 20x (EV around 150-200 MEUR) and Talent/Consumer’s EV/EBIT 10-13x (EV around 200-250 MEUR). So, according to our estimation, the value of these assets would be very close to each other.
There isn’t much discussion about Alma Media on the forum. However, a lot has happened recently, and the company has been in constant change since the financial crisis. On its website, the company describes itself as “Alma Media is a strongly renewing multi-channel media company” with operations in 10 European countries. Alma Media has a reputation for paying stable dividends and generating good returns on capital. Early this year, the company sold its regional media and printing business to Sanoma, receiving 115 million euros in cash.
One question mark has been how to profitably invest the funds received from this sale, among others. Recently, however, interesting new developments have emerged, e.g., a little over 20% stake in Bolt Works (purchase price not disclosed):
The full redemption of Alma Mediapartners from minority shareholders (including well-known brands such as Etuovi.com, Vuokraovi.com, and Autotalli.com) for 53 million euros:
And most recently, increasing the stake from five percent to just over 80% in DIAS Oy, specializing in digital real estate transactions, for 14.3 million euros and a possible additional purchase price:
Kai Telanne has been the company’s CEO since 2005. I believe Telanne has been very convincing in all interviews and events, realistically presenting the company’s market situation and transformation process over the years. In retrospect, it can be said that he has spoken sense, and Alma Media has indeed carried out the moves Telanne has promised. Telanne is currently 56 years old and will likely continue the transformation process for another 4-6 years, so I expect the determined journey to continue under good leadership.
Are there any investors on the forum who closely follow Alma Media? @Petri_Gostowski highlighted Alma Media as a success story during the coronavirus year in his section. If the company performs this well even in a difficult year, what kind of performance is possible with market tailwinds? What are your thoughts on the recent news, and what risks do you see in the development?
I myself am seriously considering additional investments in the company early next year. Alma Media may not be in the big spotlights, but I believe the company is currently developing a massive digital brand portfolio that is highly profitable, somewhat scalable, and further enhances the company’s ability to transform in the future in line with market developments.
An interesting targeted acquisition by Alma Media in the Czech Republic. It fits well into the company’s current business, but in terms of figures, it is a very small part of the whole (2020 revenue EUR 0.3 million) so far. Alma Media is a market leader in recruitment portals in local markets, so there is significant potential for scaling the service across industry boundaries.
Alma joins the ranks of those who issued positive earnings guidance on Tuesday 
Alma Media published its results,
EPS 0.41 → 0.33 EUR, which is strongly down but as expected
Dividend 0.40 → 0.30 EUR/share
Outlook is bleak, i.e. no development, revenue and turnover flat.
Based on yesterday’s closing price, quite acidic if there is no development!
P/E 2020=2021=9.42/0.33=28.6
Dividend% = 0.3/9.42=3.2%
Yeah, the views were, for example, considerably lower than Inderes’s views.
Petri, was this positive profit warning on 01/12/2021 even necessary?
Revenue is -8.0% and Operating Profit (adj.) is -8.2%… Aren’t these in the same league…
ALMA MEDIA ISSUES A POSITIVE PROFIT WARNING DUE TO BETTER THAN ANTICIPATED PROFITABILITY DEVELOPMENT IN THE FOURTH QUARTER
Alma Media changes its profit guidance regarding the adjusted operating profit of continuing operations for 2020. The adjusted operating profit for the fourth quarter of 2020 will be lower than the comparison period, but the decline in profitability will be less than expected in 2020. The company estimates that the adjusted operating profit for 2020 will decrease by less than 10 percent from the adjusted operating profit of the comparison period.
New guidance
Alma Media estimates that the revenue of continuing operations for 2020 will decrease significantly and the adjusted operating profit will decrease from the 2019 level. The revenue of continuing operations in 2019 was EUR 250.2 million and the adjusted operating profit was EUR 49.4 million.
In the previous profit guidance issued on 22 October 2020, Alma Media estimated that both revenue and adjusted operating profit would decrease significantly from the 2019 level.
Based on that, it can be interpreted that the company’s board of directors’ guidance policy probably draws the line for the word “clearly” somewhere around 10%, and that’s why the guidance had to be raised when it was noticed that the operating profit wouldn’t be quite so low. The challenge is that there isn’t a single specific range at the stock market level for different guidance formats, and thus we can’t precisely know what those wordings indicate..
At the overall stock market level, I’ve been thinking that these guidance-related practices are really peculiar, when there are different meanings for forms like “decreases significantly,” “decreases,” etc., but actually no one to whom these guidances are given (i.e., the investor) knows exactly what it means 
Then one can question the whole practice, or at least one would think that a more functional one could be developed. I would hope that at the stock market level, a more functional practice would emerge for this.. Of course, it must be remembered that it’s difficult to get a one-size-fits-all system for this.
Agreed, no need to play with those words when they could give some kind of range and then specify it as the year progresses, or change it if a profit warning is due.
In this Alma case, I mainly noticed that
…before the positive outlook, both revenue and adjusted operating profit were said to decrease significantly
…in the positive outlook, revenue was said to decrease significantly, but operating profit to decrease
But now looking at the earnings report, revenue -8.0% and profit -8.2%
I guess the board of Alma must be so skilled that they value the relative change on different lines of the income statement with different scales 
Yes, those views are a big disappointment. I personally expected a much more positive assessment of the development and that the previous arrangements would have supported this. I need to follow the CEO’s comments on these closely, in case there’s something to be gleaned from them.
However, according to the positive earnings revision (posari), revenue “decreases clearly”, it decreased -8.0. Operating profit “decreases” (not clearly), it decreased 8.2%, which is more than revenue. Yes, Alma clearly made a mistake here.
There are also companies where the range for those wordings is different for revenue and operating profit. In this case, for example, for revenue it could be 5-10% and for operating profit 10-15%. This is logical in itself, as profit is inherently more susceptible to larger relative changes. Companies and boards are very precise with these, so I don’t believe that when a positive profit warning was issued, they wouldn’t have known what level the figures would settle at.
The webinar presentation has arrived.
Even after this, the flatness of the outlook is surprising, that Alma would remain at the level of the corona year… Some story that 1Q2020 was strong, but included a thoroughly flat 2Q2020, 3Q2020 was stronger than 1Q2020, efficiency improvements should have been made, etc. On the other hand, recruitment has taken a hit and recovery is probably expected to be long.
On the other hand, the presentation reminds that Alma Media Partners was acquired, a 35% stake & 9.1 MEUR operating profit would give about 35% x 9.1 / 82.4 mkpl = 0.04 EUR/share extra. That good is probably adjusted out of the guidance.
In 2019, Alma Mediapartners’ revenue was 25.2 million euros, EBITDA 10.4 million euros, and operating profit 9.1 million euros (as part of the Alma Media Group according to IFRS principles).
