Alma Media Oyj (ALMA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Alma Media's Capital Markets Day 2021. My name is Elina Kukkonen and I'm responsible of the communications and brand here at Alma. We've come a long way since the last CMD 2018. We accelerated our digital transformation, and we have become a strong -- a company of a strong digital media, marketplaces and services. Along the way, we had also crystallized our vision. We will inspire human curiosity and choice, meaning that we believe that sustainable growth in society will happen if every one -- every each one of us has the choice, opportunity to choose and make the best decisions where and when they matter the most. For today, we have prepared a quite comprehensive set of Alma business segments. All the Senior Vice Presidents of Alma's business segments are presenting today the strategies and the steps going forward, and they are quite eager to do that. So I hope you will follow us quite closely. The President and CEO of Alma Media, Mr. Kai Telanne, will kick off the afternoon. And then we directly move to the presentations of the business segments. After that, our CFO, Mr. Juha Nuutinen, will go present the financial position of Alma Media today. And we have reserved plenty of time for questions and answers. So there will be question-and-answer sessions in between the presentations and also at the end. During the afternoon, we will have 2 breaks, 2 short breaks, and we aim to finish at 4:00 p.m. And this CMD will be recorded, and the recording and also, all the materials presented here today will be available for you at the almamedia.fi at the Capital Markets Day page. So with this introduction, I hand it over, Mr. Telanne, the President and CEO of Alma Media. And once again, welcome to Alma Media's Capital Markets Day 2021. Please, Kai.

Thank you, Elina. Welcome, everybody, ladies and gentlemen, it's great to have, finally, a live event here at Alma House. We waited for this for quite a long, long period. As Elina told you -- can we have the right presentation, please? As Elina told you, I will concentrate in my presentation to the deliverables that we have delivered since the last CMD that we had, actually, 2018, so 3 years ago. I will concentrate on where we come from, where we are at the moment or just the current portfolio and position and how do we go forward from this point, what is the strategy, how do we build long-term value. I have about half an hour to do this. And then after me, the segment heads will go on deeper into the details into the different businesses. As you probably know, we have done major divestments of the print-based business, which has been one of the key elements of the transformational strategy of Alma Media. And hand-in-hand with this, we have done several major investments in digital marketplaces and services. By doing this, we have strengthened our market position in -- especially in digital advertising, marketplaces in Finland and abroad and digital services. With the transformation, our capital intensity has decreased remarkably and we have been able to improve the profitability remarkably as well. At the moment, we have quite a balanced portfolio of businesses of media, especially digital media, digital services and marketplaces. We have reorganized our segments differently. You will hear about that later. And finally, we have overcome well from the pandemic. Businesses are running smoothly at the moment. We haven't had any severe problems during these difficult times. In addition to a decent organic growth, M&A has been driving our digital transformation and growth, as noted. In this slide, we try to show how the investments have been done during these 3, 4 years after the last CMD on the upper side of the slide, the investments on the downside there, the divestments of our print-based businesses. The last ones being regional media and print business, early morning delivery business slowly decreasing businesses with low profitability. And on the upper side of this slide, as you know, faster-growing digital businesses, especially on digital services and marketplaces areas. We bought Alma Media Partners minorities 2020 and Alma Career minorities out 2021. And then of course, Nettix investment this year, which has been a really, really big effort for us. The integration has gone nicely. Kari Kivelä will tell you more about this. So the M&A has been a really important part of this transformational strategy in addition to the organic growth. All this has led to a major change in our business mix. You might remember that 2005, when we started this heavy transformation, almost all of the business were print businesses, 35 print titles of regional and local media as well as national business-to-business media and consumer media Iltalehti. Only EUR 70 million of digital revenues at that time. And now the run rate this year, EUR 180 million, tenfold compared to the beginning, and EUR 50 million remaining print businesses around talent, business-to-business media and Iltalehti paper issues. So this has been the journey. A little bit more than 70% of our revenue is coming from digital sources and increasing. So a heavy s*** -- shift. Not s***, but shift during these times. At least my view is that this has been quite a good journey. This has led to a leading market position in those areas where we have aimed at. And those are recruiting business in CEE area like Finland, Czech Republic, Slovakia, Croatia, Baltic countries and further on to the Balkan area. We are #1 player there. Houses and premises #1 player in Finland, vehicles and machinery nowadays #1 player. Financial and professional media, we've been #1 player forever; commercial premises in Finland and Sweden, #1; digital advertising network in Finland, Alma Media is nowadays #1 player; and then digital consumer news media, we are also #1 player. So I would say that we have a fantastic position and portfolio to grow further profitably. This journey has led to an improved profitability also. From last CMD 2018, our profitability has improved. We had, of course, the difficult last year with a heavy decrease in advertising and marketplaces as well. But now the market is picking up heavily and nicely and the growth has continued. So last year or 2018, our adjusted operating profit was EUR 48 million and the run rate at the moment is more than EUR 50 million. Over 20 -- EBIT over 20% at the moment. So this has been the strategy to discontinue the low profitability businesses with low growth profile and to invest and increase the growing digital profitable businesses. This has been also -- due to these reasons, this has been a good journey for shareholders since 2016, the beginning of 2016. This is the indexed change of Alma Media share compared to the Helsinki OMX or share and peer group index. So we are comparing our businesses and performance against the peers in the Europe at the moment. And you can see from until the August this year, our share price has more than -- is more than 4x the one that we had 2016, the beginning of 2016. And we aim this to continue, of course, with the good growth and profitability. And as I told you, we have now a fantastic portfolio. This is where we have tried to aim at. Marketplace is over 40% of the business, 100% digital with nice profitability profile. Media, less than 40%, around EUR 100 million, of which about around half is digital business. That part of the business, media business, is growing. And then nicely growing services, digital services, mainly EUR 53 million, 1/5 of the portfolio. EBITDA, almost 30% at the moment. All right. That was the past, the beginning of the journey, the way and now we are here. How do we go then forward? A few words about the current and coming strategy. We have a quite clear and simple transformational strategy. First of all, we are going to continue the transformation of the core business, which means in print business, we transfer it from print to services, from print to digital. We are activating the cooperation at the moment in all segments within the group and the business units in order to increase the efficiency and the profitability. And of course, we are still having a close look at the nonprofitable or low profitable businesses. And if needed, we are going to divest or close those. So this is going to happen around the core business that we used to have. And then secondly, we are continuing to grow in digital, which means to diversify from media to marketplaces and from digital and to digital services. We -- you will see several examples during this day in different segments, how do we do this. We're going to diversify our businesses in those value chains where we are in at the moment into new business areas. And of course, in order to do this, we have to have the best people, that we actually have at the moment, to develop this kind of world-class digital capabilities, brands and technology. And then, thirdly, we are going to continue with the internationalization of the company that we started 2010 by going from Finland through Baltic countries to Central Eastern European countries. We are aiming to expand to new geographies, to speed up the growth, and then we are going to leverage the businesses in current geographies in different value chains. We have now a perfect portfolio and stance in Finland, especially. This slide tries -- in this slide, we try to or I try to draw a picture of this combination. The idea is to use the leading media businesses to leverage specific business areas that we have in Finland, like combining state-of-the-art content with the leading marketplaces or other digital services like data services or comparison services or that kind of services. We are strong in recruiting. We are very strong in business information. Juha-Petri Loimovuori will tell you more about this. We have a lot of new initiatives and investments there. We are very strong in housing, houses and premises. [ Kari Kivelä ] will tell you more about this. And of course, with vehicles like cars and motors and other vehicles as well with the Nettix acquisition that we did. We are increasing our vertical focus on integration. A lot of cooperation is going to happen inside the corporation and the company to create higher value from improved average revenue per advertised item. So briefly, the idea is to combine the best content with the best services and use the customer base as good as possible to increase the value of the company and the value for the customers as well. We reach, actually, every, everyone in Finland every day to serve them with the content and with the different services. This is the key for the strategy. How do we then progress with these initiatives? Here, we have 3 ways to show that. First of all, to transform the core, it's about the transformation from print to digital. At the moment, from content, we have 1/3 of the content is coming from digital services or digital forms of content, which means that we have, still, work to do. So transformation is going to continue. This is one of the major strategic focus, especially in talent group, which is well in spirit. And then, of course, the digital advertising, where we are #1 in Finland, almost 80% of the advertising of Alma Media coming from digital sources. And then almost 70% of our services are digital at the moment, and that will increase. In order to speed up the transformation and do it in a profitable way, we need to cooperate to have scale for the businesses. And you will hear more about this intensified cooperation later today. And then, of course, the second part to increase and to speed up the growth in digital. We are moving from current value chains to new ones and then, of course, trying to increase the market position of current businesses. We are moving from like, for an example, from job boards to staffing and add-on career services. Here are few examples that we have gone in like Treamer, like Seduo, Techloop and so on. Vesa-Pekka Kirsi will tell you more about this, and you can ask him. Digital revenue growth has been quite good; commission-based consumer services, 25% growth at the moment; Alma Talent services, almost 17%. So the speed is quite good at the moment. There have been, of course, this kind of underlying demand during the COVID situation, and now it started to fly. Hopefully, that will continue. We have very good plan to keep the rate. And then, of course, to grow in digital, we need to improve the current capabilities, especially the digital capabilities of our personnel and get in new capabilities when the world is changing. And then, of course, we have new initiatives to internationalize the company. We have bought some minorities in the career business. And we are investigating, all the time, different kind of possibilities to leverage our B2B businesses in Nordic countries, especially. And then, of course, marketplaces businesses in Northern Europe and maybe in Central Eastern Europe as well. The world is changing fast around us. I've taken here 6 important issues that we have on the table always while we are formulating our strategy, and these are those. I'm not going to go deeply into this. Maybe some example of here of these 2, just to remind you, like the regulation. It's still unknown how the current regulation around privacy issues, for example. You know that the power of the consumers is growing. EU regulation is changing. We don't know, actually, how and when, but we have to be prepared, and we are. We are concentrating on user value and customer experience on technology and data. The competition is, of course, intensifying all the time. We are in a global play at the moment. We are competing with global giants. We have to have a close look at their moves as well. Economy and society. Now we know that, like the Finnish economy, according to the latest estimate, is going to grow around 3.5% this year or even more next year and the CEE countries, where we are strong, even more. That's a good sign. But then on the other hand, in long term, European growth is estimated to be quite modest. So we have to grow more than the market in order to reach our targets. And in order to do that, we need to have a very good organic growth in current businesses and do some M&As to speed up and so on. These 4 issues that we have here, media, mobility, housing and recruitment, you will hear more about during coming presentations, what's the underlying business that we have in our strategies, in our segments. I won't go through this. But technology, data, consumer behavior change, competition regulation, all these are changes, and you need to be very agile in order to mitigate the negative changes and in order to speed up your growth if there are or new opportunities arising. We have revised our long-term financial targets, and we did this because the portfolio and the position of the company has changed. We are more a digital company. Almost all of the revenues now coming from digital, so it's about revenue growth more than a digital growth from now on. We have set a long-term target of more than 5% annual revenue growth. We have changed also the profitability target. The bottom line is 20%, which means that we are aiming at more than 5% growth with a high profitability businesses. And in the long term, if we can reach the 5% growth with 20% margin, it means a remarkable increase in value. And then, because now we have quite a significant debt load after these significant investments, we took the net debt-to-EBITDA ratio also in place, which should be under 2.5%. At the moment, we have 3.1%. We don't see this -- any kind of problem. Juha Nuutinen, our CFO, will clarify this a bit with this good cash flow. We have a good plan to deleverage the company. So on the down side of this slide, you can see how the performance in these terms has been since the last CMD 2018. So we are, at the moment, close to the profitability target. We are quite far -- we have been quite far from the revenue growth. So we are increasing the ambition in there. And of course, the financials, the balance sheet is totally different than we used to have. And last but not least, sustainability is very close to our heart. We take seriously the -- our role in the society. We are one of the first companies in the world, media companies in the world who set up science based sustainability targets. We are not actually a heavy, heavy carbon category company. Instead, we are a low-carbon company. Only 10% of our CO2 emissions are from our own operations. We have set targets. We actually achieved our targets in advance. Now we are at the position where we are redefining the targets for these purposes. It's -- the work is going on. Secondly, we take care of the personnel. We have a very good situation. We have a good reputation among the employees. We have a lot of different kind of initiatives for inclusive and diverse work life. That's, of course, a question for a Finnish company, which has internationalized, at the moment, focuses heavily on the competence development around the digital businesses, well-being of the personnel, flexible, diverse work life and so on. And then thirdly, of course, for a company in -- for a listed company, growth and profitability of the business in long term in a sustainable way is the key element. Trust, transparency and accountability of the operations is becoming more and more important. We have intensivized (sic) [ incentivized ] targets for profitable and sustainable growth of the business in every segment. Every Alma Median is incentivized for these targets for these purposes. Sustainable growth of individuals, businesses and societies is the key for us. The work is progressing nicely. So that's it. That was my part of the presentation. We will leave room for the questions after CFO Juha Nuutinen's presentation. So I will come back to the stage if needed, if that's okay. Thank you very much.

Thank you, Kai. And like he said, we will have the questions-and-answer session combined with our CFO later on. But now we move to the segment presentations. And first, I would invite Mr. Vesa-Pekka Kirsi from Alma Career. And he will tell us about the best-in-class portfolio we are holding at the moment and how are we -- what kind of plans we have for expanding and also deepening our local presence. So welcome, Mr. Kirsi.

Welcome to Alma Career, the recruiting industry arm of Alma Media. In the next 20 minutes or so, I will take you through the market position of Alma Career, explain to you the 4 domains of growth and where we are at the moment in the strategy execution of those growth areas, introduce some key figures to help you understand the scale of the operation and end up with the competitive advantages in the business. Alma Career is an international organization of 12 countries. We span from Finland in the North to North Macedonia in the South at the Adriatic Sea, and all those countries in blue in the map. Overall, in this region, there's about 32 million working people and inhabitants and about 20% of those switch jobs every year. So the switching job population is 6.4 million, and you can consider that kind of the maximum amount of opportunities in the market in a given year. At the moment, we run marketplaces for recruiters and job seekers to meet. Marketplaces we call job boards. We have them in all of the 12 countries; and in 9 of them, we are the clear market leader; in the remaining 3, we are, in our services, among the top 3. On an average year, our services enjoy a very high demand of visitors, 80 million unique visitors visit our sites annually. 25% of those, about 20 million, leave us a job alert, meaning that they post themselves available for any information coming from recruiters and openness for jobs. 180,000 advertisers place 1.3 million job ads into all of our services combined. So it's a very heavy and active operation in our 12 countries at the moment. We are quite happy and proud of this, but that's not all. We're looking for more, and we're looking to expand. In order for me to explain why and how we are planning to expand, let me just show you some things about the recruitment market. Recruitment market is not a unified audience. It has people in all facets of working life to -- from white collars to blue collars and any other collars there is in this market. In order to speak to these different audiences when multiple ways are required. At the moment, we run recruitment advertising sites, so job boards. And that's a very good vehicle to speak to those who are actively seeking for a job. Companies who look for people post ads to these marketing sites where people actively looking for new opportunities come to look through what's available. So these active players of the market meet and make agreements through job boards. But there are other alternatives that actually have your needs met as recruiters. Staffing is an interesting industry for those opportunities where you need temporary staff or project staff to fulfill a temp's position or as a job seeker, you need a vehicle to get into a new opportunity. Staffing industry is a very vital industry for many companies in all -- all over the Alma Career region. Also, there are those segments in the job market that are hard to hire and are hard to reach because they are passive. They are not actively looking. These people do not come to job sites to look for new position. Direct search or head hunting has always been a great vehicle to achieve these people and to offer them new opportunities. When we look ways to grow, it's the whole spectrum of the industry that we are looking into, aiming to expand our portfolio of services to meet the full demands of the recruiters of the job seekers and this industry. This slide with the 4 colored boxes is an illustration of our growth strategy going forward and those areas we are looking to tap next in our operation: The blue, the job boards, the recruitment marketing is our home base and our core. That's where we are today, strong and next slide, I will, a little bit, explain more that we are -- how we are thinking of growing in that space. We view these neighboring operations of digital staffing or staffing service an interesting opportunity. It's about EUR 1.3 billion operation in Alma Career region alone, giving us a sizable business to see what we can do and help companies there. The head hunting or the direct search operation as well as reverse recruiting is another $0.5 billion opportunity in Alma Career region. Again, operating in an interesting space. Both staffing as well as direct search industries are, at the moment, utilizing digital assets more than ever before, heavily digitalizing them and enjoying the data and other assets that are bringing disruption and new opportunities into these areas. Companies hire, but at the same time, they can also upskill their own talent. Sometimes there are hard to hire segments and no talents are available in the market. So teaching your own personnel or as a job seeker, teaching your own skills is an important area. Corporate Learning has been among Alma Career services already for 4 years. This is a very vital, a growing sector in our Alma Career region and outside, posting great growth opportunities for us and many others. At the moment, the estimated size of this [ interest ] is as big as EUR 3 billion within Alma Career region. So in our future growth segments and growth areas, we look at all of these 4 boxes for opportunities to grow as Alma Career and bring services to the industry and for our customers and job seekers. So what have we done in action to actually populate these boxes. In job boards in the recruitment marketing, we have our 12 countries with the leading services in all of them. It's a constant innovation of services, innovation of features to stay relevant to our existing customers and to expand the service to all facets of active work life. We look to expand the services inside the region by bringing new features and business opportunities and products as well as expanding outside the current region through organic and inorganic opportunities. So we view the job board and job advertising industry and business as a great growth opportunity for Alma Career also in the future. In addition to that, we've taken our first step into the digital staffing industry by 2 minority investments in 2020 when we invested in Bolt.Works. and Treamer, 2 Finnish Finland-based staffing platforms. Bolt.Works.is a mobile/Internet solution for heavy sectors, building sector, industrial sector, warehousing sector, to bring them sector-specific solutions for their staffing needs, and it's growing heavily in the Finnish market. Also, Treamer is an industry-specific solution for HoReCa segment, retail segment, maintenance to bring and staff in their very urgent quick needs. If you have a person falling sick, Treamer boasts a 15-minute delivery time to fulfill any urgent need position in these segments. The minority investment gives us a very good position to view the staffing industry and all those advances now taking place through technology and data and how they are disrupting the models of this industry. We've also taken our first step into the direct search or reverse recruiting through a Czech operational service called the Techloop. I will, further today, introduce you to Techloop, but just to say it's a solution for IT segment to specifically serve those looking for IT skills, coding skills or if you are one looking [ for a ] job in that industry in the reverse recruiting area. Already for the past 4 years, we also have our hand in the educational parts of the corporate learning. Seduo is our own homegrown startup from the Czech Republic, where we've created a Seduo platform, which is offering content and offering learning management for companies and individuals now already in 3 markets of Czech Republic, Slovakia and Finland, and we're looking that opportunity to grow in the near months and years to further region. Alma Career is a marketplace. And we see our role in between the demand and the supply, so between the job seekers and recruiters. That's what we do. We are here to match-make these two the most efficient way together. The current services we run in generic and these job boards are the meeting places for these demands and supplies need to meet. We already provide the market with industry tools such as application tracking system, Teamio in this slide is such a service where we help recruiters to run the whole recruitment process from meeting through interviews all the way to signing. CV Databases, Arnold, Seduo, all of these are tools to help the job seekers or recruiters do their work better in that digital matchmaking where we help them to go. Now the investments into the services likes of Bolt and Treamer actually introduced another depth level into this relationship between us and recruiters and job seekers. The industry solutions that these products provide is ever deeper step into what's happening in the industries and how technology can help recruiter ends or job seeker ends find each other and actually work together. It gives us, as Alma Career, a very good look into what are the needs of both sides of this marketplace structure and how can we help them better. Then, few numbers. Alma Career has been a steady growth unit ever since it was born. This was disrupted last year in the pandemia and the effects that, that gave. Actually, our revenues took a heavy hit from the early on of the year, and we were able to do some of that profitability savings through cost measures and other measures that help us to maintain decent profit as well as profitability level. Already in last year, but ever increasingly this year, the business has grown and bounced back to where it was before. And I'm quite happy and I'm proud to say that the numbers indicated here for this year will be definitely met and also exceeded. The sales average in our second quarter has been increasingly good month-by-month through the summer. In the graph to the right, it's quite interesting to see the mix between our job board business or the marketplace business and services. Already for a few years now, the services have taken an increasing part of the revenue and product mix; today, adding up to 10% of our total revenue amount. And we expect this to continue in the upcoming years. It's quite interesting to see also that the service revenue stays stably growing even through the pandemia months, helping us to balance those macroeconomic changes that we see in our market area and in our business. I wanted to give you this view, which is a little bit of a detailed view into our marketplace revenue and sales creation. The blue line in the picture is basically our sales or invoicing of a month, and the purple line is revenue following the sales. In Alma Career business, sales and revenue has a little bit of a delayed relation. What you sell today, you will see in the revenue around 6 months' time. So whatever happens in sales today is an indication of what revenues and where the revenue is going to go in the 6 months. And as you see, roughly in February 2020, the sales, the blue line totally plummeted when society started to close down and business got very cautious about recruiting. In April 2020, the sales reached its low point of all time when we took in the full effect of the pandemia. But already in May 2020, even though society stayed closed, companies started to invest back into their own function and the recruiting started. We haven't seen such months anymore. So ever since May last year, every single month, we have been growing in our invoicing, so much so that we already pierced through the revenue line in the end of 2020; and ever since, we've kept above the revenue line, just to indicate that we are now in bounce back mode and growth for the year and also for the year to come. So in the face of global competition, which was also displayed in Kai's presentation, how do we think that we can compete? We believe in local presence and in the best-in-class services. We are local currently with our services. We are the trusted local brands in local language in the local market, understanding what's happening in these communities and in these customers and knowing how can we adapt our services to their needs. We do not believe in one size fits all, but we believe in being local and being relevant. We also think that we are relevant through the services that we deliver. When we know the needs, we are also able to adapt our services to the evolving needs of job seekers and the recruiters. This is not a sleeping market. It develops all the time. Needs of companies change and so do those of the job seekers. So through our professionals in multiple countries in the Alma Group, we are able to deliver best-in-class services and features to these both sides of this marketplace. We're also able to introduce market or segment specific implementations such as the Techloop in the next page and bring solutions even to the deepening solutions to the needs of the market. The group structure helps us to be more efficient than we would be otherwise. Something that is innovated in one part of the group can be easily then implemented across the group, bringing us improved time to market in local markets as well as benefits of scale in the use of our resources. We find ourselves also quite interestingly situated between the very hungry West -- resource hungry West and, at the moment, a little bit more resource-rich East. And there's an immigration wave that is moving from East to West, us being in the middle, actually being able to utilize and -- utilize the situation to the business' benefit. There's also a location-free trend, which is now catching the market. So people trying to -- skills trying to find work as well as employees trying to find skills from different regions from a larger area than ever before. Us, being geographically span widely, allows us to take an opportunity from this situation as well. So we believe in being local, being ultra-relevant and being efficient as a team as our combination for the future. Then a small case. Techloop being mentioned a couple of times, a great example of niche needs in recruitment business. If you are a high coder today, a very good coder today, you are bombarded, almost daily, with job opportunities. That becomes annoying, and you can't do your work. Many of coders have already left the, so to speak, mainstream job boards and mainstream job advertising sites because it's not working for them. Techloop allows these professionals to build an anonymous profile. Put all your skills in the marketplace, but not your name. I'll let your skills sell you to the companies. Companies come to the site, look at the skill sets, find the ones that they want and make an offer. But the professional himself can choose if he's interested or not into the offer. If he exposes himself to the company, then dialogue can start and they can most likely then exchange jobs and information. Also, Techloop allows these professionals to search and explore and find opportunities across Europe, matching their skills with projects that are happening overseas and in the neighboring areas. Today, Techloop has 16,000 profiles already, carefully curated professionals in our region. We already enjoy a good growth of the business for this year, more than doubling the conversations we had last year. And we're quite proud of boasting about 60% of reply rate, which is quite much above the industry average. So to conclude, what are the competitive advantages of Alma Career today? Well, first of all, we sit on top of a vast and growing job market in this Northern and CEE region in Europe. It's hot in many ways. It's situated interestingly between West and East, and the economies are approaching full employment. Therefore, the market is looking for services and solutions. We're already strongly present in this market with our great services, which gives us a basis for further growth in staffing, in direct search and in education. We believe and we are local and this market proximity ensures our customer and job seeker relevancy. We keep on investing in our services, in our personnel to have the best skills to create services that are and maintain relevant to our customers. The group structure gives us also the operational efficiency, the scale benefits and the time-to-market advantages that we need in order to pay and stay relevant in the market. So that's my introduction for you into the Alma Career business, and I suppose I'm now ready for questions.

Yes, please. [Operator Instructions] But first, we take questions from here from Alma House premises. So please, if there are any questions for Vesa-Pekka Kirsi about Alma Career. Go ahead.

Sami Sarkamies, Nordea Markets. I have a couple of questions for you. Firstly, on the geographic footprint. Are you constantly looking to increase the amount of countries you're operating in? And so you could consider adding new countries as well?

The easy answer is yes, and a bit longer answer is, we're already doing that. The job boards themselves are pretty stable in the region they've been built. But case is, like, Techloop is already expanding our reach to Hungary, to Russia, to Netherlands and Sweden, where we haven't been before. That's one of those concepts that easily crosses borders and gains more market area. In addition to that, we are also looking for opportunities to grow in the job board and job advertising businesses through possibilities of inorganic growth.

Okay. And then secondly, if we think about competitive threats, you went through the market structure, revenues are mostly coming from job boards at the moment, do you see that the market could develop into a direction where the money is flowing to other ways of recruiting than job boards?

There's a lot of innovation in the recruiting business overall. And all kinds of new ideas, also all kinds of new business models are rising and have risen already for years. Many of them are -- in their evolution of business and most also diverting into job board business model. So we are -- we know for the fact that job board business model is one of the prevailing and will maintain a prevailing business model for quite some time, maybe for years and years. But of course, there will be other business models. We're tapping these as well. The Techloop, again, is a SaaS business model, very different from job board model. and we will see these upcoming with introduction of different services.

And then maybe finally on margins. This is clearly a very high-margin business for Alma Media. Looking ahead, do you think you will still be able to improve margins? There's clearly high operating leverage in the job board business, or is it so that when you expand into these new areas, those may actually dilute margins going forward?

This will be an important thing for us to be able to communicate in the future. The segments of job advertising, of staffing, of direct shares, of education, all of these have their own margin brackets and they are not the same. So as we go forward, we need to be very specifically saying what are the market -- profitability brackets in all of them and each of them. The job boards maintains well its profitability level. The one we're working heavily to make sure that in that business, we protect the current levels. We will see low levels of profitability when we move into staffing, that's for sure. Even in the direct search, which is more consultancy based than others, that's the same. Therefore, separating these profitability levels and understanding that in the future is very important.

It's Kimmo Stenvall from OP Markets. Question on the M&A. You mentioned the inorganic growth in this segment. What kind of headroom do you have on this M&A front?

I'll leave the headroom question to Juha Nuutinen. I suppose he's going to tackle that anyway. So let's not do that twice. So if you have patience until Juha's presentation, let's take that then.

Okay. Then the second question is the main markets you have on this, I think the Czech Republic and so on. What is the competitive situation there at the moment?

The competitive situation in Czech markets, Slovak market and all of our Central European markets, from us, is very favorable. Our services in Czech and Slovak markets are, well, we shouldn't perhaps say they're monopolistic, but we are in almost a monopolistic situation where we dominate the market at the moment with our services through LMC as well as through [ Profese ], that are those market -- operations that we have there. So we are very -- and as we go forward in this year and you see from the figures, we've actually been able to grow in these markets even against our previous performance. So it's a very interesting and highly good markets for us.

Pia Rosqvist from Carnegie. Your -- you showed the chart with your market position in your various markets, and Finland is a weakness. But I'm now thinking about, overall, your position and your ability to drive pricing in the markets where you are dominant and particularly in the part which you now define as the core business. So my question is really, are you able to drive pricing per advertisement and increase the profitability? Or have you kind of reached the top in that part?

Well, we drive and we carefully manage pricing every single year. Price increases or price increase structure is part of our business operation as we speak. We also carefully monitor what is happening in the competitive space, what's happening with pricing of LinkedIn or other global platforms or local players and how much headroom is there to use pricing as a vehicle to drive revenues. But we do that all the time. And at the moment, at least, there has been a healthy opportunity to do that. It's also a question of market. At the moment, we are almost in a full employment situation in the Central East Europe, meaning that people -- companies are fighting for the resource. And they're willing to invest in, not just job advertising, but brand building and all kinds of advertising opportunities to actually boost what they have to say, which is pushing our capabilities to either play with packaging or pricing the same way.

Okay. And then on your brand strategy, you have a multi-brand strategy and a very local approach. But is this defendable still? I mean, given the investments in marketing to defend your position, is it -- or should you kind of move towards a single or a few brand strategy?

Yes, this is not in our core at all. We believe in the local brands, and we believe maintaining those local brands because they are the brands that people locally love, use and know. There is no plan at the moment to replace any of our local brands with Alma-wide or something like that.

Okay. It seems there's no other questions at the moment on line. So thank you, Vesa-Pekka Kirsi.

Thank you.

And at this point, we have a short break. So we'll continue at quarter past 2. And so see you then. Thank you. [Break]

Welcome back. Welcome back to follow Alma Media's Capital Markets Day 2021. And now on the agenda, we move on to Alma Consumer, one of our business segments. And I would invite our Senior Vice President, Kari Kivelä of Alma Consumer, to present how uniquely this segment is positioned and [ how's ] the market-leading industry verticals and digital news to build on. [Operator Instructions] But now, welcome Kari Kivelä.

Thank you. So what are we covering today, first, so description of new Alma Media Consumer with key figures of the segment. Then more concrete growth strategy of Alma Consumer. And then we go more deeply to our strong verticals, housing and mobility and their growth strategy. Then there is some time to answer question, how we see the outlook of digital advertising market and digital media market. Some outlook also for our comparison services, very interesting unit in our segment. And finally, summary with our fundamental competitive advantage. Alma Media Consumer consists of digital media, digital housing vertical, digital mobility vertical and comparison service segment. I will not dive deep in these numbers. But shortly, as you see, our market position in our marketplaces as well in digital media and conversion services is extremely good. And as we know in our business market position really matters. We know that in marketplaces, there is a clear tendency that supply and demand will concentrate on market leaders. It's also good to remind that market leaders have and has better possibilities to call it and utilize data. And some niche markets, niche marketplaces like marketplace of boats or motorbikes and even some comparison services in a small market like Finland, there is just room for only 1 service. And naturally, this service might have quite good entry barriers around it. Here we see key financials of new Alma Consumer. It's word of note is that this rolling 12-month pictures, the left picture, consist just 1 quarter of Nettix vertical, quarter 2 2021. Another word of note might be that you see that we have maintained quite solid profitability, even COVID period, pandemia period 2020. And also -- in the beginning of this year 2021. So good market position, solid profitability, even clear cost synergies. It's good to remind that when we told this acquisition of Nettix verticals, we gave an estimation of cost synergies EUR 1.5 million. And after 5 months of this acquisition, we can definitely keep that estimation. But when we talk about growth possibilities, it's good to remind that we definitely want to concentrate on services, which -- and focus on services, which have high importance as household investments. And definitely, housing and mobility are excellent examples of that. Then we want to strengthen our revenue streams from industrial solutions inside those verticals. We will go deeper to the strategy of our verticals later on. And also, we believe that within our verticals, we should have also possibilities to look later on also geographical expansion. All the digital advertising, which has been a key growth driver in digital media is a very complex and demanding market. We are still operating in promising growth areas there. Marketing services, new services which utilize data for better targeting that are clear examples of that. We believe that in future, digital media demands 2 strong revenue streams: advertising and digital subscriptions. And this year, we have moved to this market also with Iltalehti and the first month has been quite promising. Also, we will open up this a bit more later on. And definitely one key component in our strategies materialize the synergy between strong consumer media and consumer services, and this EUR 1.5 million is an example of that, the cost synergy. But we can utilize excellent sales organization also the marketing power of Iltalehti will help a lot of our services. And nowadays, it's a main market in channel besides search and marketing for most of our digital services. As told before, we will focus on -- heavily focus on big markets, housing and mobility, and utilize the digitalization of ecosystem in these markets. This means that we'll have expanded our offering, for example, to B2B solutions, professional solutions, enterprise solutions, industrial solutions. For example, agent layer in housing. We will go a little bit deeper in that. But also there are favorable trends in housing segments in Finland. Digitalization, but also urbanization and structural assays, which feeds up rental and service business here. A similar story or development in car market business. As you see later on, similar vertical strategy, expanding offering towards industrial solutions and develop related services, which correlate this vertical strategy. All doubt, there is some kind of decrease with new registrations cars regarding the pandemia, we believe that there will be different story later on when electric cars take a major role in a market. But here is a very concrete example of our vertical growth strategy in housing. You see there are those strong market leaders, marketplaces, Etuovi and Vuokraovi. These are some kind of bridge to industrial solutions like [indiscernible] and DIAS. DIAS Is digital trade platform. It's part of Alma Talent. Mr. Juha Loimovuori will open up later. But we work very close together because it helps and it's a very useful tool for our agent customers. [indiscernible] enterprise, resource planning system and which have a very close correlation with those marketplaces. And then we have those related services, which serve customers and service providers after the housing trade. Urakkamaailma is a comparison service for renovation services, Muuttomaailma comparison service for removals and Etua help our customers to find feasible housing loans. And same kind of growth strategy, vertical growth strategy in mobility platform. Strong marketplaces, bridge to Industrial Solutions. We have there 2 strong ERP systems, but also B2B marketplace to quote and then several solutions for C2C trade nowadays. And as well as in-house is promising related services, outer comparison for maintenance Etua also here helping finance your maintenance or usage car. And both verticals' task is to collect common data for that whole vertical. It will help advertising. It will help development of new services and that will help our strong market position. Okay. Then a short outlook. Another unit in our segment, digital media and digital market, digital advertising. As we heard earlier Kai Telanne told that Alma has divested printing business before the TV business, regional newspapers and so on. And one might ask, is it any sense to own just one consumer media. Iltalehti, now our case. The domestic media market is very demanding market in every country. Facebook, Google, Spotify and other platforms, they have incredible pricing power as well as data storage. We believe that digital news media with high reads clear focus on domestic content and news and 2 revenue streams: digital advertising and digital subscription will be only model, which can survive in this very demanding media market, and even have some growth possibilities for coming years. Our history, the right column, which is the growth of digital advertising is still promising. And this year and spring, we have been a higher level than before pandemia. But it's good to remind that this whole digital advertising ecosystem offers still a lot of growth opportunities. In this market, you can build REITs. In our case, with news media or those strong marketplaces. You can build more and more efficient targeting solutions with data you have. It fulfills the demands of contextual advertising and has room for new marketing services. We made this acquisition of Netello, which is high profile search engine optimization firm. And now, we have developed solutions for advertiser clients where we combine media and search engine solutions together so that these solutions support for each other. Very, very interesting path there. So as we told, this comparison services are totally about EUR 7 million business at the moment. Overall, we can say that these services are relative unestablished practice in Finland, but getting more and more familiar within customers and service providers. What is extremely interesting is that well-established, well-designed comparison service outperforms the results of search engine marketing with customers. Why? Because the purchase intention is much stronger inside the comparison service funnel than it's in search engine funnel. Let's take a more closer look for AutoJerry, which is example of that. Those fixtures are quite impressing. 450,000 registered users at the moment. 1,800 companies registered maintenance companies as customers. Promising turnover growth during the past years. Built the trust, built the customer satisfaction. Then you see more revenues, more margin. This is a clear example of that. And in this new vertical strategy and new Alma Consumer, AutoJerry is just one of, but very promising service that will utilize the synergy with Iltalehti and maybe especially with the Nettiauto, the market leader of used cars. So it's time to summarize and underline the competitive advantage of Alma Consumer. As told, we have impressive market position in marketplaces and comparison services. This enables creation and onboarding, and develop new services and features. We have very good data storage at the moment as we can call it more and utilize more in near future. Strong synergy between consumer media and consumer service, as told before. And then there is a question, what is the competition power against the large platforms. Same story than in Alma Career before. But besides that, we have also many integrations for local orders information that they are producing. That is something that those big platforms want to avoid. So -- and also, local sales and customer service belongs to that advantage here. And then new evolving markets with media, paid content, new marketing services are examples of that. Iltalehti has now operated 6 months with digital subscription and that 20,000 subscribers, which has paid for the content, is very promising start. Thank you.

Okay. So now we're ready for questions. At the moment, there is no questions on line. So I encourage you, us, following online also, to post some questions. We'll get them here. But first, we take questions here from the Alma premises, please?

Sami Sarkamies, Nordea Markets. I have 2 questions. Firstly, on the online classifieds business of Alma Consumer, mainly housing and cars, I think there's been substantial pent-up demand after COVID-19, and we have seen high growth rates, especially during the second quarter. Are you seeing that this part of the market is starting to cool down towards the end of this year?

We haven't seen those signs of yet, but especially in housing, we see that COVID impact. But also, there is a structural change. More and more people are keen on rental and the urbanization, or moving inside the country feeds up the market. But I think that next year, we'll -- we see what was the real COVID impact.

Okay. And then secondly, on the media part of the business, Iltalehti, you have a sort of formidable competitor in Finland. How have you been sort of doing against them more recently? So are you happy with your performance thinking of Iltalehti?

We are happy, yes. And we are happy that we were brave enough to move to digital subscription business also. We strongly believe that -- the strong media will need 2 revenue streams, subscription and advertising.

Pia, any questions?

Pia Rosqvist from Carnegie. The competitive situation is intensifying in Finland. And looking at the marketplaces business, again, it seems like one of your competitors, at least, they highlight that the fragmented and underdeveloped market here in Finland is kind of posing a challenge at least for them. But how would you describe the average revenue per user in the Finnish market? I mean is there something we need to understand here in terms of the potential, in terms of the structure, something that would limit you from reaching a higher level, or your competitor from reaching higher levels in average revenues per user?

I might guess which competitor you're thinking about. We agree that average revenue per user is slightly under the Nordic level. But we are not worried about that so much. In that -- for example, in mobility vertical, we have managed to increase the ARPU with new services. If you think about advertising and digital advertising, and look at the ARPU of that, you must remind that there are big platforms who have enormous pricing power and then they set the pricing level. But you can make a higher ARPU with new services. And also, moving to transactional services and so on.

Any other questions?

And also one difference is that if you have a strong horizontal services, where you sell a lot of items, it's a little bit different story when you concentrate on some verticals.

Okay. Thank you, Kari. There's no other questions from online at this point. So we move on. Thank you.

Okay. Thank you.

And now we move on to Alma Talent, one business -- one more business segment of Alma Media. And Mr. Juha-Petri Loimovuori, the Senior Vice President of Alma Talent, will tell us about the growth -- profitable growth part of the leading business media and the business information -- digital business information Services. So please, Juha.

Thank you, Elina. Good afternoon. I'm JP Loimovuori, I tell you the updated story of Alma Talent, which starts here. Leading business media, profitable growth from digital information services. The structure of this presentation is mainly the same than what my colleagues Vesa-Pekka and Kari had. But I will focus quite a lot on the services side because that is -- that might be a bit -- you don't know that yet so well than our media business. Some background first to the people who might be online who are not Finnish. Our operations are mainly in Finland, but one of our best businesses happens to be in Sweden. That means that the Objektvision, which is the commercial premises marketplace business, which also operates in Finland actually under the name of Toimitilat Kauppalehti. We have minor operation in the Baltic states of Estonia and Latvia with our direct marketing, telemarketing business. But as I said, we are mainly in Finland, and we are quite strong in Finland. When you compare Alma Talent to other parts of our Alma businesses, it's good to note that this is mostly a business-to-business operation. So we are working with the companies, with the professionals of the companies and decision makers and so on, We have around 11,000 active corporate customers. So we -- that's quite a lot actually if you compare the real base of companies in Finland. So we have a lot of companies. That's mainly on the service side of the business. That's good to note. The main customer segments are finance, ICT, housing and property. So our business is slightly overlapping, for example, with the consumer segment, in the housing, but we are taking care of the business-to-business part of that. So that's the logic here. Eight media brands. Good reach, still good reach on the decision makers and professionals in Finland, 1,350,000 people weekly. To the figures. We have been -- we had the last CMD in 2018, and since then, maybe I could say so, we have had our tight focus on the growing digital and recurring revenue. So you can see that the profitability is on the quite good level right now. This is the rolling 12 months, the last chart on the left side graph. So we are reaching the 50% digital rate, actually passed it already, and the profitability is good. So when you look at this figure, it's good to note that there's also divestment of Media Sweden, which was the part of the talent mergers since 2016, and we divested it now '19 and '20, and that takes a lot of the revenue side. But at the same time, we have been able to improve the profitability. So that was what Kai told us about transforming the core. So we have been really active with that. And we also invested in DIAS platform 2020, and I will tell you some more about that later on. We have 3 strong businesses. We have media, we have the services, and then we have direct marketing. And as I said, I will concentrate on the services today. But maybe here, we have the same KPIs, digital revenue and share of recurring revenue. So maybe it's bit surprised. It was a surprise to me. These are now the first half of this year's KPI. So our share of digital in the services already 88% and share of recurring is 72%. So that creates us a strong second leg, I would say. So that is something to look at. We have spent some management time during last 2 years like reinvent this business. And when we are talking about the service business, the right question is, how can we help you as a customer? And when you look at the mobile illustration here, the right answer is that we can help our customer to accelerate growth, to fulfill the compliance needs, and also to streamline their processes to be more efficient. And these are the 3 fields where we work the most right now. So when you ask me that, don't you publish books? I said, yes, we still publish book, but that is not the need of our customers. Their customers is to be compliant, and that's why they need a law book. So this is maybe the thinking behind what we are doing. And actually, I take you a little bit deeper with this picture. How do we operate now and even more in the future? So Alma Talent is like a platform or a hub between the sources of data or information and the customers who need this information. So we have actually quite good sources. We -- of course, we use the normal external sources, the public registers and legislation and open data and so on. But we are also having our own data assets to create these products. So we -- of course, we have the editorial contents from Alma Talent and Alma other sources, which is quite kind of unique actually in the Finnish market. We have our own collection call team, where we gather the information from the companies, for example, their decision makers. So that data, what we get by calling them is much more accurate than crawling on the Internet. We have our own experts to do the data collection. And then we have, of course, I was talking about the books or education. We have a wide network of the best experts in the Finnish market. We know all the professors or other experts in each field of information we supply. So this creates -- this is quite unique way of collecting compared to our competitors. They don't -- no one of them has all these sources. And then comes the main part where we refine, combine, enrich and everything inside Alma Talent. So we have the data people, we have the content people who do the text and so on, and so we can do first-class product of this raw data and information. And that is something which really makes the data into valuable information. Data is just binaries. So this is something that what we -- our customers really need that we do the productization and then we deliver it to online services, for example, suomenlaki.com could be an example or analyzer, or integrate the solutions where we supply the data straight into the customer systems, CRM or something else. And as said, we are working with the corporates but also public sector actually state and academia, they are quite big client groups here. So that is good to note as well. And of course, single persons as professionals buy our services, for example, Seduo, which Vesa-Pekka already introduced you. That was -- so to the figures also here, we have quite tight focus that we do now and more and more in the future. We target the corporate sales. So that allows us to grow the revenues steadily to the scalable model. So that is really something that we have been focusing already, and we are doing it all the time, more and more from one-off type of businesses to corporate sales type of businesses. When we are talking about this market, I would say that there is expert reports. For example, [indiscernible] says that might be 3% to 5% per annum, the global market growth, this kind of business information products and services. Also, our peers give similar estimates. But I would say that, that is not really our problem because we are a challenger here in the market. So we just need to make better products, find the niches, do the development, and there will be a good growth opportunity to us because all the customers, they are now digitalizing their processes, they are making more and more decisions on data, and of course, the regulation, mostly EU regulation, gives us new opportunities, like, I would say, an example, report a minority on the company called Suomen Tunnistetieto, or brand name DOKS, which is on the know your customer process. And that is really interesting service, and there seems to be a lot of demand on that. Coming to our competitive advantage in this field. We have own data bases and maybe it's good to mention that the legal database, what Alma Talent is having, there is 2 actors in the Finnish market who has this. So that is some kind of unique. And I guess that we can build a lot of new businesses on that database. We have a unique combination as I already mentioned. And I cannot forget Alma's marketing power when we are entering the new businesses in this field. We are quite reliable as a partner, and that also is proven by the fact that we are having finance sector as the main customer segment. So they trust on Alma and Alma Talent, we have a long relations in the media side as well. And what is important also is that we have accurate -- we have always accurate rights to the information that we provide. So this is really important, and that's part of our corporate responsibility as well that we have rights to do what we are doing. All the players in the field do not have. And then to the strategic goals in this is that we are the market leader actually in the housing and property information. So we are going to keep and seize that domain in the future as well. And then one part of that is DIAS, which, we are trying to grow to its full extent, of course, in the coming years. We are going to develop the digital legal information market and grow the market share there. And I hope that in the next CMD, I will do -- I will have some new things to tell you about that domain. Legal information market is really interesting. And then the company data services, I already mentioned, DOKS. So there might be some new innovations as well. Actually, we are having in the pipeline already some new products in there. But maybe it's best that I open this services part also with some cases. Maybe it opens up a little bit what I'm talking about because this is not the easiest business to communicate. So this is a product or a service called analyzer plus data care. And what we are basically doing, this is a B2B sales data-as-a-service to our corporate customers. So in this, we are really combining a lot of the sources I mentioned already. We have the official company data from public source. We have adjusted financial statements, what we are -- now we have had the balanced consulting unit for 20 years already, but we are using that information in this product. And then we have the decision maker information, which is updated by calling the companies, which is unique in the Finnish market as well. And then we have Kauppalehti news and other news service to give the sign of what's happening in the target companies. And what the customers are doing is that they are updating their customer bases and their plans of how to sell to the customers and what kind of customer would be now hot and which is not maybe a bit colder or something like that. That's the analyzer part. But then, we have the data care part, which is giving the same information straight to their CRM systems, which are integrated with our information sources. And this is something which, of course, offer us a quite good business model when the business model is based on the monthly license and then we charge of the information -- the amount of the information that the customers are using. And we started this, this is now the new thinking. We started in the beginning of 2020 with this, and we have already doubled the annual recurring revenue amount. So this is going very well, and we have only seen the start now. And it's good to understand that each kind of business is quite tempting business model because when we reach the breakeven after that, the cost base is mainly, of course, fixed. We don't pay too much for the contents because most of it is our own and so on. So it's going to be very profitable quite soon. Another, this is very different. Very important to us, very interesting. Pioneering in the field of housing, digital housing DIAS. This is actually a startup. It was founded in 2018 by Tomorrow Tech and then major Finnish banks; 4 of them. And then Alma went in, in the beginning of 2020, and then we bought 80%, as Kai mentioned, in the end of 2020. So now we own 80% of the company. And the main function of this company is that it transforms the way people sell and buy apartments or houses. So it transforms the traditional meet at the back office way to the digital work or meeting. And it's not only signing the papers. It's also taking care of the money transfers and also the collateral management between banks. So this actually is network and platform, which is actually unites the network, which is on the picture as well, of all Finnish banks, 99% of them are with us and also the real estate agents. And it makes the process much smoother. The business model here is that we -- DIAS, we receive a flat per trade commission in addition that, of course, the users have also a small license fee. And then, the housing market itself in Finland is around 100,000 transactions per year. And as you know, and somebody already asked it, that the housing market has been quite hot this year after COVID. But I don't see the cooling down yet, but maybe it's not so high growth anymore. But our market share of that market, where we are in, we are now in -- only in the apartment market, so which is share type of not real estate -- not real, real estate. So our market share is growing month by month. And then I'm really interested -- or this is a good business. And I'm looking forward next year, we can still grow several years because now the market where we are in is a bit limited. We are going to have new products, which grows the market actually in the future. And it's also good to remember that this network of banks and real estate agents will provide us a good chance in the future to give them some additional services like different types of data and so and so. So this is just a thought, but this is not anymore a start-up. This is real business. This year, it is going to grow the next couple of years or hopefully, 10 years. Then back to media, and I'll go quite fast because I guess that most of the viewers, you know Kauppalehti, Arvopaperi and Talous if you are interested in stocks. You know these brands very well. But maybe the possible foreign viewers, this is news media. Covers topics from business to stocks to lifestyle, even to medicine. 250 employees; out of this, 150 journalists. Maybe it's good to mention that this is absolutely the biggest journalistic organization in Finland in the field of business and professional journalism. And I already mentioned about the reach what we still have. Last time, when we had CMD, it was in the end of 2018, I told you about our plans to digitalize all of our products and also put some kind of content-earning method, payable or something else, on the products. And at that time, our subscription base was 13,000, mainly Kauppalehti digital subscriptions, and it's so fine. Of course, there has been quite a long time, 3 years, but I'm so happy to show you this. So we have maybe tripled, or even more, our subscription base in the digital single subscription since then. And this is funny because you can see the COVID-19 effect in the Finnish market as well. This effect was with the U.S. papers and Financial Times and so on. But it was really hard because it started immediately in the March, April last year. But since then, we have been growing. Now actually, there is the summer time where the graph end is. So I'm still very positive on the growth opportunities in this field. And it's good to mention that it's not only Kauppalehti. Actually, all of our media brands are generating some kind of content revenue now in the digital as well. And that makes me confident that this is the right way we can continue on this. And maybe even media, even the printed media, transform to digital, can be very tempting business in the future. Here are the figures. Digital rate is now 47, this year, rolling figure. As Kai said, in the -- our event this Wednesday, someday, it will be all digital. That will take sometime. I would say that after 5 years, we are quite near all digital business-to-business media at Alma Talent. The profitability, what we are having now, we lost several millions of advertising last year with the COVID that has come more or less back now. So the profitability is in a very good level when you compare to other media companies wherever. So that is nice to tell you. We are -- our investments, I had a question of our product development, and I take it seriously from the audience, I mean. So we need development, our products, all the time, more and more. That's for sure. And that's the technical, not only content. Then, Elina, the competitive advantage of Alma Talent. Just a short wrap-up. We are a lead media in the Finnish market. Really strong market position in the B2B media. Actually, we have been able to compete with the giants quite good. We are digital subscription forerunner, as I showed you. Our personnel is very skillful. We have the best-in-class editorial team in business and tech media in Finland. I'm really proud of the work what we are doing. And that's not only, of course, journalists also all other personnel are very good. Top brands and great audiences, and great trust from our audience still. And then the information services side, we are an agile challenger. We are trying a bit harder than our peers. We have our own databases and a kind of unique combination of contents. And there, I mean, for example, that we have the legal and we have the company data, and there's no such competitor in the Finnish market actually. And we have the agreed rights, the information provided. And maybe when the time is right, we are going to do some bolt-on acquisitions here as well. I mentioned DIAS, that was a good one. We are also working with this bolt. We are putting the cooperation now together and it's interesting. And then, what we are going to do, we focus on digital. We focus on scalable and subscription base and recurring revenue type of businesses. That's our -- what we are doing. Thank you so much.

Okay. So now we're ready for Q&A. Unfortunately, there's been some technical problem on our chat function, but now it should work perfectly. So please post your questions if you had any. Also concerning the previous presentations, we can take all the questions at the end. But now questions for Alma Talent here from Alma. Yes?

Sami Sarkamies, Nordea Markets. I have 3 questions. Firstly, on the direct marketing business, do you see that starting to peak? I guess it has benefited from COVID-19 period to some extent?

Actually, if the question is, was it benefit?

Is it -- do you see it peaking, that it's -- or will it continue to grow also in the future?

Yes. The funny thing is that it has been growing quite steadily. And now we had a peak because of the COVID, but I don't see it going down now. But of course, it's not -- the growth is much so steep any more. So yes, that was something -- it was interesting to understand how each and one business model works, but it was like -- that's a revenue share type of business. And when we earn more revenue to our customers because the care customers were at home. So that's interesting.

And then secondly, on information services, you did open up that this is an area where you will be expanding going forward. Will the new service development happen more through internal development that you will, yourself build those databases? Or are you looking to partner with external providers of data?

We are doing -- the product development is done by ourselves, actually, yes. So we rely quite heavily on Alma know-how on the tech. So we have built the data, what's that called, database structures for the media actually. But now, we have found out that we can use the same innovations in this field as well. And that is giving us a good support from the Alma Group. But the innovations must be inside the company or then, we need to do some acquisitions, of course, like DIAS kind of innovation. We, by ourselves, would never have invented, I would say.

Okay. And then finally, on DIAS, there is a competing service in Finland, but it seems that you've been able to utilize early mover advantage and they've been suffering from the fact that they don't have interfaces with all the banks. Do you see that changing going forward, meaning that there could be more competition in this area where you're sort of currently a bit on your own?

That is very good question. Right now, at the moment, there is no such intelligent service competing with us. There is competing services, of course, but they are more like a communication ways. So we are doing the whole transaction. And we are developing our products really heavily now, actually. So it's -- we feel that it's still on the stage of product development. But I hope that we can be fast enough to penetrate the market in the coming 2 years, I will say, and then have a strong market position. But it is evident that there will be competition, of course.

Yes. Pia Rosqvist from Carnegie. Can you scroll back to Page 59, where you showed a revenue split. I'd like to dig a bit deeper into that. Still backwards, 59.

Okay.

Go back.

Say when to stop.

Yes. This is one. Yes. So if we look on the pie chart to the right, the split in data process products, content products and marketplaces. I'm just wondering if you could give kind of the 2 largest revenue contributors, or brands, or services in that respective area, would make easier to kind of grasp the content of your revenues.

I would say that this is external information -- no, internal information, sorry. So I don't want to open up the products right now at this moment. So marketplace is evident. That's the Objektvision and Kauppalehti Toimitilat. So that's already public, but I don't want to open more the other ones. But we are having like DIAS is, of course, in here. That's one of them. And then we have Seduo and other educational and so on.

But you don't want to guide me where they are?

I would say that if it says that we have process products that might be near to DIAS.

Okay. Okay. And then on page, I think, it's 66, you had a similar revenue split. Yes. Here, so again, to the right, the pie chart to the right, looking at the 44%, I think that maybe print?

Yes. That's print.

Yes. So is this any indication on the split here between Kauppalehti and the other magazines and like the content books you sell?

Yes. I would say that maybe it helps you somehow, anyway. I don't know if I mentioned that, but Kauppalehti's digital rate is now 61%. So it's much more than the average talent media, digital rates. So -- but I don't actually -- I must admit that I don't recall exactly how to split the print pie in here. But I think that the magazine part because we still have their products that are mainly print. So that's major of that part. So it would be quite easy actually to calculate, and I can give you the information sometimes later. But then we have -- this is something that we -- I can open more easily is that we have the B2C digital. That is the single subscription -- single subscriptions, what I showed you actually, where we have like 45,000 single subscriptions now. And then the B2B digital is the corporate solutions where we sell straight to the companies to all their employees a solution of our information where we actually package our brands. There is not only Kauppalehti Talouselämä, but both. And then we have the unions, which is the group subscriptions of Talouselämä and Tekniikka & Talous. We still have them. And that's mainly print, of course. Actually, I forgot to mention, but the company solutions also in the media side is very interesting and promising. We have benchmarked very carefully with our Nordic peers. We are having this kind of once a year meeting with them because we are not competing with these sources. And there seems to be a lot of possibilities also to do the corporate sales in the media side with the digital productization.

Then on the analyzer and data care, and maybe also on DIAS. So if I understand you correctly, you have no direct competitor or there might be a competitor in -- or there is a competitor in DIAS to some extent, but -- and you are kind of creating your own market here. But can you in, any way quantify the market opportunity you are going after for the analyzer and data care product or, for example, in DIAS, what kind of revenues could we think about?

Actually, analyzer and data care is the field where there is a lot of competition actually, many kind of competition, but we are kind of unique where we are still small actually. But for example, probably you know a company called [indiscernible]. This has been in the Finnish market for a long time, and they have been internationalizing and so on. And also Enento is on this market now. So -- but the market itself is growing, and there will always be this kind of pockets where we can find our own growth despite the competition. So you need to be fast and then better, I will say. But DIAS, then, it -- of course, that is related -- basic markets related to the housing market of Finland, which I mentioned that it's 100,000 transactions per year. And if you multiple that with our fee, which I don't -- I cannot tell you. But if you buy a house, you need to pay something for the real estate agents and so you can still estimate something. But it will be a good market anyway because we have only started yet. So there is still a lot to earn. And then when we have the integrations and the network between all the banks, that might be even a bigger possibility to earn something.

It's Kimmo Stenvall from OP Markets. Back to DIAS. So you mentioned that there is still a lot to do to develop the service. I think that the basic infrastructure is now in place. But what are the main tasks that you will do? And are these kind of -- these kind of easy wins that just take time? Or how should we look at the future of the service?

Right now, we are operating only with what is called apartment type [indiscernible], if you remember the name was that. So that is now possible and maybe the simplest cases also. And when the buyer has a bank loan to finance it. So we are still on the limited market. The next natural step is the real estate, which means with houses and summer houses and so on. So we are developing that right now. It's not a big secret, of course, that we are going on to that and hopefully launch that during this year still.

Okay. Thank you for the questions, and thank you, JP. And before now the break, we have a short break coming up. Before the break, I would like to lift up the one question that was sort of coming late because of our fault, our other technical problems. And I would invite Mr. Kari Kivela, Senior Vice President from Alma Consumer to answer this question. And this comes from Petri Gostowski from Inderes. So the question goes that you mentioned geographical expansion. Is this an area where you are looking at M&A? And what characteristics does the market need to have in order to be attractive for you? Do you see new areas for comparison services emerging where you are not currently a service provider?

Okay. The last question first. Yes, we see room for new comparison services. For example, this sharing economy is quite interesting. A concrete case is that in Finland, we have near 0.5 million summer cottages or vacation homes, and only small minority of owners of this vacation are nowadays renting their premises. And we believe that developing a good platform, we will encourage this will to give your vacation home for rent and definitely, there is also a need. At the moment, we have a listing service for homeowners, but it's not that kind of rental or comparison platform. But that's a concrete area, which seems to be quite lucrative at least. Then this geographical expansion. At this moment, we will not give you a very concrete answers. But at least, we can say that underdeveloped markets with good growth, naturally lucrative and maybe some challengers, promising challengers, if you think about M&A opportunities with keen on our vertical strategy and solution in building strong verticals, there might be some sense at this moment.

Okay. Thank you, Kari. And now we have a short break. We'll be back by 3:30, so 10 minutes and see you again. Thank you. [Break]

Okay. Welcome back to the Alma Media's Capital Markets Day 2020 (sic) [ 2021 ]. We are closing to the end, and we have the last part of this afternoon to go. Next will have our CFO, Mr. Juha Nuutinen, presenting us how all that you have heard today implies to our financial position. So please, Juha, the stage is yours. And after Juha's presentation, we have the Q&A session for Juha but also our CEO, Kai Telanne, will be on stage to answer the questions concerning the company.

Thank you, Elina. That's quite natural because there has been a lot of changes in our position during the last year because of quite substantial acquisitions. But first, earlier presentations included revenue and operating profit information in each business segment. And this is the summary at Alma Group level. We have had this year pretty good revenue growth, approximately 13% in the first half year. And it's coming of all our business segments. And thanks to COVID recovery, I would say, it has been much faster than what we have expected in the beginning of the year. Like I mentioned earlier, we have a quite good business portfolio at the moment, and it's pretty same size comparing the marketplaces and the media business. And then we have the services, 20% of revenue. And it comes from the Alma talent B2B services and as well as services, which are pretty close related to marketplaces in Alma Career and Alma Consumer. Our operating profit has been increased this year also, pretty good, and we are from the operating margin point of view at a record level. So -- and if you look at the left graft here, we are also above the 2019 figures if we are taking only the continued operations into account. And that's also because of COVID recovery and -- especially in recruitment and digital advertising. On the right-hand side, you can see the cost per functions. And why we are showing this graph here is that we try to show you what kind of cost items we have and operating costs. And there are 2 big elements. And the other one is advertising sales and other sales-related costs, which is around 1/4. And the other cost item is technology and development costs. That's also pretty close to 1/4 of all costs. And what it means is that we are pushing quite a lot development and technology costs straight lead to asset costs and not as a CapEx. And this is good to notice when you analyze our company that almost 50% of our cost goes to either advertising or sales cost or technology. Yes, and like Kai said, we have done quite a lot acquisitions lately. And of course, it has changed our leverage. And at the moment, if you look at the June second quarter interim report, our leverage or net debt to EBITDA, KPI was around 3%. We have EUR 220 million interest net debt and gearing is around 160%. And equity ratio is close to 30%. So our balance sheet is stressed. But because of our strong cash flow and strong good growth in all business segments, this is not a problem, and we will have a stronger balance sheet after a couple of quarters. I had also this presentation, which tells you our acquisitions since last CMD. I don't call that any more detail. But one interesting thing is that we have a pretty good M&A track record. This has been one of our key strategy for a long time now. And if you look at 10 years history, we have done a little over 25 acquisitions during that time, approximately EUR 200 million. This EUR 200 million do not include Nettix yet. It comes later on into our calculations. But without Nettix, it's around EUR 200 million. And if we calculate the internal revenue or internal rate of return for these acquisitions, they have bring us approximately 17% annual revenue. And this is a big achievement to us and really good performance. Of course, we have had a couple of mistakes also. Everybody does mistakes, and we have had also some poor M&A actions as well. But what is important that the bigger ones and most of the cases have been very successful. And clearly, this is also one of our key strategy also in the future. This is -- the asset side is not very often in our presentations, but this time, we chose this because of these acquisitions. If you look at our long-term assets side from the balance sheet, you can see that the amount is over EUR 400 million at the moment and most comes from the goodwill and intangible assets. And it might be a big number. But if you compare it to our -- for example, our enterprise value or the business portfolios performance, it's not bad. And just calculate it that compared to enterprise value, its enterprise value is slightly 3x long-term asset value. So that means that if the business performance continues with this like, there is no major impairment loss risk in our balance sheet. So that's, I think good issue and important issue as noticed. Cash flow, we mentioned that we have strong cash flow. This graph here includes also divested businesses, so that's why there are 2018 and 2019, bigger figures, but this EUR 57 million cash flow is a good result for this current business, and we have a high conversion rate, and because of quite modest or low CapEx, actually. But what is interesting, if we compare the history is that our cash flow, if you look at it in a quarter phase, is much more stabilized now than previously. The 3 latest quarters actually are pretty same size from cash flow point of view. It's around EUR 15 million, EUR 16 million. So that has been a big change, and that comes from the digital business that more we have digital business and more we have this classified online platforms business that it makes more stabilized cash flow during the year than compared to the media business itself. And then I'll summarize my presentation and with this updated long-term financial targets what we announced today and Kai mentioned already about this. A few points from those. Revenue growth, we changed the digital growth ratio to revenue growth for whole Alma Media Group. And like Kai said, it's natural because we have almost 80% of digital ratio already. So it's better to express our targets with the whole revenue and 5% is our new target. This year, we will be above that clearly. And it's good to notice that this target is, it's good to understand that it's starting next year because this year, we will be clearly over 5%. Adjusted operating margin is 20%, and we are currently at the phase of 21%, and there has been a question that why this is too modest and why this kind of revenue operating margin level? We think that this is a combination of revenue growth and operating margin. That if we are exceeding 5% revenue growth rate, it's important that we keep the profitable level, and it's good to understand it's a combination. And we are really happy if this growth can be a profitable growth. And this 20% is some kind of a bottom line that we should keep the level at least at that level. We don't regret if we have 21% or 22% or 25% operating margin. That's not a bad issue. So of course, so -- but that explains a little bit our attitude towards these targets. And then the net debt and EBITDA ratio, we set the target. This is a new target to us because, of course, we have a lot of debt at the moment, and it's good to express what is our targeting ambitions. We are currently at the stage of 3% and this 2.5% is what we are trying to have. Of course, it's a combination of business profits. What is the business profitable in the future. It's depending on the dividends and also our M&A acquisitions. But if we keep our dividends as they are and don't have any major M&A activities, we will be under this ratio already next year. So we are pretty soon under this -- meet this target if no major M&A acquisitions are done. So that's pretty much background with these financial targets. And then we keep our dividend policy as it is, but we don't any more include it in the financial targets. We have it separately from now on that our dividend policy, and it will be the same. We have not changed that, and our target is to pay dividend more than 50% of our earnings per share. So that's not forgotten, but we are handling that in a different way in the future. So that was the financial position summary. And thank you. And now we have time for questions and answers.

Yes, now we have time for questions and answers. And I would have it over to our Alma premises. So if there's questions for financials. Please, Pia, go ahead.

Pia from Carnegie. With regards to the time frame of your long-term financial targets, you say we should kind of start looking at this from 2022 and onwards. But what in your mind is long-term target? Do we talk about 5 years, 3 to 5 years or 5 to 7?

I would say that 3 to 5 years is okay. And if they start to be too easy, we are happy to adjust them even earlier. No problem.

Okay. And your long-term growth target is now above 5% annually. Can you give me some kind of indication on what it would mean in terms of sales split Finland versus your international business or print versus digital or growth in marketplaces and services versus the rest?

Not really. We haven't done that split yet. So we are in the middle of the strategy process at the moment and the planning process, so we will -- we might come back later to the split of the targets as well. So this is the overall target of over 5% for the company. So we don't disclose long-term targets for separate businesses.

Okay. And then the EBIT margin target, taking into account that you are now above. Clearly above 20%, and you said this should be looked upon as a lower threshold. Should we now understand that the growth in services, particularly will come at a lower margin in, for example, the marketplaces business, and that's one of the signals you want to send that there is downward pressure in the profitability.

If you go outside the current business into new businesses like staffing business like Vesa-Pekka said, and other this kind of new business segments, they are definitely -- they usually are in the beginning on the lower profitability level and you have to put costs, CapEx to improve them. So that's an answer for that exactly. Yes, you have to have that in mind.

But there is just one comment that there is no hidden facts there that we are expecting lower margins, but that's the bottom line, the 20% margin is the target. We are not saying that we are expecting lower more operating margins in the future. But that's not the point. That's -- even if yes, new services, they will have lower operating margin levels, but fewer, but we are not expecting that in the future. So we are not saying that we will have lower operating margin in the future.

We think that it's quite difficult to find companies with over 5% growth and 20% margin, you can get quite a good return on investment if you have that, you can achieve that. That's our goal.

Yes?

Sami Sarkamies, Nordea Markets. A couple of questions on the targets as well. Starting from the top line target you did previously have above 12% growth target for the regional business. And if we think that digital business nowadays, close to 80% of sales, the new target translates to perhaps 6% to 8% growth for digital business. Do you think that's sort of a realistic growth rate? I think in many of your peers, for example, the Nordic countries, we are looking at growth rates between let's say, 10% and 15% for digital businesses like online classifieds. So you're not expecting any more double-digit growth rates in digital businesses.

There are differences between markets, of course, and businesses. So we have businesses that are growing more than 10%. And then we have these print businesses and the current traditional businesses like the media in Finland, which are not growing. The print business is still declining. So the print business is burdening the growth rate of Alma Media still. So we have 30% of print business still around and that's how they go to the different direction. So after having a fully digital business, you will definitely have a different kind of growth profile than we have nowadays.

Okay. And then continuing, if we look at the above 20% EBIT margin target, that's looking fairly conservative as you are already there. And if you look at cost estimates, it's about 24% for '23. So you're expected to sort of increase margins from current levels quite substantially. So is this margin like dilution that you're anticipating, is that more coming from the internal development that we just discussed that you need to invest more into sort of -- into growing these services? Or are you anticipating that you might acquire businesses with a lower margin?

We are not anticipating decreasing margins, as you have said. We're not expecting that. It's nice to hear that you trust us and you have expecting more than we have put here on the table. So I'm fine with that, and we are happy to deliver more than we have here. But that's a combination. As you have said, it's a combination of growth and profitability. And with this kind of profitability and this kind of growth, we are more than happy to have in long-term steady development, which gives you quite a nice return compared to any company or our competitors. But with specific businesses, different kind of digital businesses, we have more growth. And then other businesses, if you're going to staffing business, for example, it's -- the growth or the profitability profile is totally different. And then you have to handle the combination cleverly in order to keep the 20% balance. But that's a guideline for us for new investments and CapEx usage to do it in a profitable way. So in our case, the growth is not the -- how should I say, the priority in that sense. It's easy to gain growth, but profitable growth is totally different. And we have had the history and have a target to grow profitably and take care of the profitability in the first place.

Okay. Maybe just to be absolutely clear, you're not planning any sort of material increase in spending in order to ensure that you continue to grow in post-COVID-19 world, that sort of current spending levels, those will likely prevail also going forward?

No, no, we're not. And we have to have in mind that the balance sheet is totally different now. So we have to be careful with that. And we have to digest the investments that we just did, which means that coming couple of 2, 3 years, we have to deliver the profitability, decrease the leverage and then go again with the M&A and the bigger moves. We can do some bolt-on acquisitions right now, but the bigger moves will wait until we are in the stance again.

Okay. And then finally, on dividends. You're obviously going to deleverage the balance sheet a bit over the next few years. But do you think you will still be in a position to pay growing dividends during this deleveraging period?

Yes. Yes, we are. So the plan is to continue increasing the dividends. And we have -- like you have said, we are quite confident with this cash flow, we can have a combination of good dividends and deleveraging of the company.

Kimmo Stenvall, OP Mortgage. Question on the investment or the CapEx levels of the company. You had the graph that there was quite thin line on the CapEx level, but the structural changes that have happened in the company. So what is your thinking about the CapEx level going forward? Will it come down in 1 to 2 years, if you compare, for example, when you had the print business already in these regional newspapers and the printing plant in Tampere?

I would say that the CapEx level, what we have discussed around EUR 4 million a year or something like that is a pretty good estimate also in the future. So it is EUR 4 million is going to different kind of digital business solutions and renewables. And if you take the history, there wasn't so much print-based investments during the last 5, 6 years ago anymore. The major investments were done when we made new printing facilities 10 years ago. But after that, there has been not many investments in the print side. So what I mean that the investments and CapEx, what we have done lately has been focused on digital products and services. And that's why the EUR 4 million is a pretty good estimate also in the future.

Okay. Apparently, there is no more questions, and there is no questions from online. So thank you for your questions, and thank you, Juha, thank you, Kai. And maybe Kai can continue here straightaway with the closing remarks and then we're ready and set. Go ahead.

Okay. Thank you very much, and thank you very much for your attention and very good questions. After this broad extensive digital journey that we have had during last 15 -- 10 years, we are in a leading position in the brands in the key areas where we are, I am happy with that. We have, as you heard, a very well-balanced business mix of media and marketplaces and services. It's a good ground to grow further. Our current customer base and products enables us to extend the business in different kind of value chains that we heard from the segment reports. We have quite a good presence in CEE area, which is, of course, a great basis for further international expansion. Juha better told you about the B2B in for services and comprehensive own data assets, which are a very strong foundation for data economy and different kind of ecosystems in the B2B area. And finally, as Juha have told you, we have a strong stable cash flow, which enables us to good dividend payout. And as we think a good total shareholder return also in the future as we have had during the last 5, 6 years. So with these words, I want to thank you very much for your attention being here at Alma House and online. And any day, if you have any kind of questions, we are more than happy to answer those questions. And I hope we will see you all when we have the Q3 interim report, which will be on...

21st October.

21st October. Thank you.

Before you leave, there is 1 question.

Okay.

So we're taking now [indiscernible] is asking that you mentioned no planned increased spending for M&A to continue to grow post-COVID, as the goal is deleveraging. What about the agreement for the capital increase? Any plans?

Yes. That's a very good question. So the Board of Alma Media is always open for a very good initiative. So in case we have a very good possibility to grow with a remarkable M&A, there's always the possibility to go into the equity market. So that's for sure, for Alma Media. So we are open for this, of course. But now we are talking about our current balance sheet and its ability to do the acquisition. So with this balance sheet, without going to the equity market. We are having this kind of -- in short term, we are having this kind of bolt-on acquisitions to digest the done investments. And then later on, we will do something else. But of course, equity market is there. There's quite a -- it seems to be quite a good demand for new initiatives, especially on the digital area, and we have seen some really nice IPOs as well in the area. So there's a good chance. We are open for this.

Good. Thank you. That's all.

Thank you very much.