2014
ANNUAL REPORT
CONTENTS
4
Review by
the Chairman of the Board
6
Group structure
7
Key figures
8
2014 in brief
10
Otava Group Agency
12
Financial statements
18
Group organisation
19
Contacts
”We believe that reading
will retain its status as
a foundation block for Finnish
well-being and success.”
4
RE V IEW BY TH E C HA I RM A N OF THE BOA RD
T
2014 and outlook
for the future
rends in the media sector continued to be difficult
in Finland in 2014. Net sales in our own operating
sector – publishing books and magazines – continued to decline for the fourth consecutive year. A
major change is underway: more and more people are reading using digital environments and consumers want content in electronic format. This
change has led to great difficulties, particularly for
publishers of printed media. It is difficult to adapt
and safeguard profitability. The sector is facing a
structural change in which overcapacity will need
to be removed and unprofitable operations discontinued.
So far, Otava Group has fared better than its
competitors throughout the aforementioned sectoral changes: despite the decrease in net sales
(2%), the Group’s EBITA (EUR 37.1 million) and
profit for the financial year (EUR 23.6 million)
remained good and the equity ratio rose to a record
level of 77.1%. The personnel will be paid bonuses
for good results on a company-by-company basis.
The high equity ratio will enable the company to
participate in forthcoming mergers and acquisitions
and invest in new and expanding businesses outside the sector. For this reason, Otava Group will
become one of the key players in the overhaul of
the sector.
2014 saw a generational shift in the leadership
of the Board of Directors. Henrik Ehrnrooth was
elected as the new Chairman of the Board of Directors and Olli Reenpää became a Deputy Chairman of the Board. Implementing the generational
shift in this manner means that good cooperation
between the owners will continue, which is a prerequisite for success in private-sector companies.
THE GROUP HAS ALL OF THE RESOURCES
needed to succeed: professional, expert personnel,
a strong balance sheet and opportunities for strategically important investments, and, above all, an
exciting working environment and a joint aim to
bring long-term success to Otava Group.
In 2015, Otava Publishing Company Ltd will celebrate its 125th year in business by arranging a
variety of events throughout the year. Every member of the Group’s personnel will be paid an extra
bonus in reward for their good, highly committed
work, which has benefited Otava Group.
2015 WILL BE A SPECIAL YEAR in another sense: 1815 saw the release of Henrik Renqvist’s first publication, Yxi Sangen Merkillinen Historia Jumalan Hengen Suuresta Armotyöstä kolmen
Judan tytärlapsukaisen tykönä. It is, therefore, 200
years since the Renqvist-Reenpää family began publishing. Juhani Salokantele’s book about the story,
Hengen paloa ja painettua sanaa, will be published
in March 2015.
This long history demonstrates the commitment of Otava’s owners and personnel to the publishing business, which is an important part of the
Group’s identity. We are also looking the same distance into the future and we believe that reading
will retain its status as a foundation block for Finnish well-being and success.
Henrik Ehrnrooth
Chairman of the Board
Olli Reenpää
Deputy Chairman of the Board of Directors
OTAVA- KON S E R N I 5
G ROUP STRUCTURE
Otava Ltd
Otava Publishing
Company Ltd
Suomalainen Kirjakauppa Oy
Otavamedia Ltd
NettiX Oy
Like Publishing Ltd
DeCo Media Oy
Ampparit Oy
Kustannusosakeyhtiö Moreeni
Ühinenud Ajakirjad AS
Otava Book Printing Ltd
Lakiperintä Oy
Group structure 2014
THE GROUP’S four business areas are
book publishing (Books), book sales
(Trade), magazine publishing (Magazines) and New Business Functions. The
company was established in 1890 with
the founding of Otava Publishing Company Ltd, which commenced printing operations in 1908 and magazine publishing in
1916 (Suomen Kuvalehti).
Otava was a founding member of Otavamedia Ltd (1934, previously known as
United Magazines Ltd) and The Great
Finnish Book Club Ltd (1969). The Group
expanded its online business with the
acquisition of Plaza and NettiX Oy in 2006
and Ampparit Oy in 2012. In 2011, Otava Ltd acquired the entire stock of Suomalainen Kirjakauppa Oy.
The Group’s parent company is Otava Ltd. The Group is a private, independent, impartial and financially sound media
corporation.
BOOKS. The principal company of the
Books division is Otava Publishing Company Ltd, the largest book publisher in Finland. The company publishes Finnish-lan-
guage fiction, non-fiction and educational
material. Like Publishing Ltd has been a
part of the division since the beginning
of 2006. Otava acquired a majority stake
in Kustannusosakeyhtiö Moreeni on 31
December 2014.
Otava Book Printing Ltd is a modern,
versatile printing house and book-binding
company that produces books for a number of publishers in Finland and abroad.
The company’s printing house operates in
Keuruu, Finland.
TRADE. Suomalainen Kirjakauppa Oy
is engaged in the retail sales of books.
The company has a network of 58 book
stores. The store network covers all of
Finland. It is the largest company in the
sector and also has an online book shop,
suomalainen.com.
MAGAZINES. The Group’s Magazines
division comprises Otavamedia Ltd and its
subsidiaries, which engage in the publication of magazines, periodicals and customer magazines and book club activities.
Otavamedia’s customer communications
offices are located in Helsinki and Turku. Since 2011, DeCo Media Oy, a webcast and video production company, has
been part of the division. The book club
activities are undertaken under the Great
Finnish Book Club brand.
Otavamedia has a subsidiary in Estonia (Ühinenud Ajakirjad AS), which
focuses on the magazine business.
Suomen Golfpiste Oy, which has been
part of the division since 2007, maintains
the golfpiste.com portal and publishes
Golflehti/GolfDigest. The company was
merged with Otavamedia Ltd at the end
of the year.
NEW BUSINESS FUNCTIONS. The
Group’s New Business Functions comprise the Plaza portal and NettiX Oy,
which were acquired in 2006. NettiX Oy’s
numerous websites serve as electronic marketplaces, the best known of which
are nettiauto.com and nettivene.com. In
spring 2012, NettiX Oy acquired 65% of
the stock of Ampparit Oy. This company
maintains the ampparit.com news site and
sells media monitoring services.
The second largest graphic
communications publisher in Finland.
6
K E Y F IG URES
2014
KEY FIGURES
223.3
314.7 301.9
296.0
260.3
26.5
29.7
25.9
30.1
31.6
31.0
38.6
31.7
19.0
4.0
10
11
Net sales, M€
12
13
14
10
11
12
13
Operating profit, M€
14
10
11
12
13
Debt development, M€
14
INCOME
GROUP
STATEMENT
2014 2013201220112010
M€% M€% M€% M€% M€%
Net sales
EBITA
Depreciation of goodwill and
business acquisition costs
Operating profit
Profit before taxes
Profit for the financial year
296.0 301.9314.7260.3223.3
37.1
12.6 32.4
10.726.6
8.535.7
13.728.2
12.6
Cash flow from operations
5.82.0
2.80.9
1.20.4
3.51.3
2.10.9
31.6
10.7 30.1
10.025.9
8.229.7
11.426.5
11.9
31.3
10.6 29.6
9.825.0
8.028.5
10.925.0
11.2
23.6
8.0
22.0
7.3
18.5
5.9
20.5
7.9
17.7
7.9
36.3
12.3
32.1
10.6
26.4
8.4
28.9
11.1
24.8
11.1
BALANCE SHEET AND
PROFITABILITY
Capital expenditure
Shareholders’ equity
Non-current liabilities
Current liabilities
5.913.510.414.8 3.1
165.6 150.3134.6121.9113.8
2.0 13.713.024.720.9
69.1 62.981.682.465.9
Equity ratio % Return on investment (ROI) %
Return on equity (ROE) %
77.1
18.6
15.0
72.8
18.0
15.5
64.8
15.9
14.6
59.4
19.4
17.5
63.9
18.4
16.5
Group personnel (average)
1082117812491010915
*) The figures for 2011 represent 12 months (included in the consolidation with Otava as from 1 October 2011)
**) General-circulation, customer and online magazines
BOOKS
Net sales
EBITA
Operating volumes
New titles published
New editions
Books sold, million
Books printed, million
51.5 55.558.457,557.8
5.811.3
6.311.3
8.915,1
9.416,4
8.614.8
597 666722677670
1011 1019134512171009
4.4 5.0 5.4 5.5 5.8
5.4 6.2 7.9 7.6 7.9
TRADE *)
Net sales
EBITA
Operating volumes:
Number of customers, million
Books sold, million
106.7
106.3
106.5
105.6
4.2 3.9
2.4 2.2
-1.9-1.8
-1.4-1.4
5.8
5.7
6.0
6.1
4.6 5.1 4.7 4.5
MAGAZINES
Net sales
EBITA
Operating volumes:
Number of magazines and
periodicals**)
Annual magazine sales, million**)
Books sold
(Great Finnish Book Club), million
137.8 143.6154.6163.4163.3
22.516.4
18.713.0
16.810.9
20.412.5
18.211.2
111 107108131 98
35
35
40
44
45
1.0
1.1
1.2
1.3
1.6
NEW BUSINESS FUNCTIONS
Net sales
EBITA
14.112.311.0 8.6 7.4
7.653.6
6.553.1
5.449.6
3.742.7
3.041.2
O TAVA - KO N S ER N I 7
Kjell Westö’s Kangastus
38 (”Mirage 38”) won
the Nordic Council’s
Literature Prize.
Reijo Mäki’s Cowboy,
Anna-Leena Härkönen’s
Kaikki oikein (”All correct”)
and Enni Mustonen’s
Lapsenpiika (”Childminder”)
were among the best selling
Finnish novels of the year.
The market considers
Otava Book Printing
to be a reliable Finnish
company. The company is
an important part of Otava
Group’s book-producing
value chain and logistics
operations.
2014
Otava, Like and the
companies’ authors were
strongly represented at the
Frankfurt book fair, where
Finland was the theme
country.
The Finnish Book Art
Committee selected Lasse J.
Laine’s book, Suomen luonto
(”Finnish nature”),
as the most beautiful Finnish
book of the year.
books
Otava’s Book Foundation
distributed grants, literature
prizes and allowances
totalling over EUR 1,000,000.
Prizes and recipients:
otavankirjasaatio.fi
Ari Mennander’s Teemu –
an impressively illustrated
biography of ice hockey legend
Teemu Selänne – is the best
selling Finnish sports book in
recent decades.
Pajtim Statovci’s Kissani
Jugoslavia (”My Cat
Yugoslavia”) won Helsingin
Sanomat’s literature prize,
which is awarded to the best
debut work of the year.
The operations of online
stores and shops were
improved, resulting in
better profitability.
Strong investments in
merchandise to support
bookshops were successful
and our sales increased
clearly across almost all
merchandise segments.
Implementing the strategy
resulted in improved stock
rotation and return on the
capital tied up in inventory.
trade
Suomalainen Kirjakauppa’s
102nd year of business
was successful despite
challenging operating
conditions.
Planned store investments
continued with the
renovation of 10 stores
during the year.
As a result of successful
sales work, the market
share increased.
8
Seura celebrated its 80th year,
Koululainen its 70th year and
Maalla its tenth year.
DeCo Media won the
Gold Award, Magic Eye
and Grand Award at the
WorldMedia festival for its
video programme entitled ”A
Second Chance”, which was
produced for NCC.
Editorial offices were
organised into magazine
families. An organisational
change was implemented
for consumer relationships
and Customer
Communication.
A cooperation agreement
with the Finnish Golf Union
took effect
at the beginning of 2014.
magazines
Customer Communication
won two prizes (Overall
Design, Metsä Board Magazine
and Use of Photography, IssueX
magazine) and two honourable
mentions at the international
FOLIO competition.
Suomen Kuvalehti’s new
digital service has solidified
the reader base and the
number of users of the
service increased. The digital
services offered by Tekniikan
Maailma and Erä were
modernised.
Sales of subscriptions to
Seura, Metsästys ja Kalastus
(which has now been
published for more than 100
years) and Maalla
began to grow.
Ellit.fi became part of the
Anna brand. Anna&Ellit are
read by almost half a million
people whose interests
include lifestyle themes.
Witpik, the media
monitoring service
offered by Ampparit,
was comprehensively
modernised.
Nettix Oy is the market
leader as an electronic
market place in the motor
sector.
new business
functions
Otava Group is Finland’s
fifth largest online
company.
Thanks to our
The biggest car
marketplace in Finland,
Nettiauto.com, registered
more than one million
unique browsers.
comprehensive range of
online media, we regularly
serve more than 2.7 million
unique visitors every
month.
OTAVA- KON S E R N I 9
Otava Group Agency
Finland was the Guest of Honor
at the Frankfurt Book Fair.
OGA was strongly present at the fair.
PHOTO PEKKA HOLMSTRÖM
OTAVA PUBLISHING LTD is a bold, principled publisher whose current roster of
authors includes leading writers from Finland and abroad, much-loved storytellers
and promising young authors. Otava also
publishes pedagogically approved learning
materials written by Finnish teachers and
authors. Enthusiasm and commitment to
high quality, as well as tradition and new
ideas, walk hand in hand in our Art Nouveau style granite building in the heart of
Helsinki.
Otava Group Agency (OGA) was
founded 2006 and it sells foreign rights to
fiction, illustrated and narrative non-fic-
10
tion, and children’s and young adult’s titles
from Otava and LIKE publishing. We sell
translation rights worldwide, directly and
through sub-agents in selected markets,
for authors and titles in all genres.
2014: FINNLAND. COOL. The Frankfurt
Book Fair is the world’s leading event for
the publishing and media industries. Finland was designated the Guest of Honour
for 2014, which was the country’s most
high-profile cultural export event ever.
German publishers had invited 11
authors from Otava and three authors
from Like to Frankfurt. OGA was strong-
ly present at the fair, selling translation
rights. Otava’s learning materials were
also on display, as new ways of reading
and learning were one of Finland’s central
themes as the Guest of Honour. The special year was celebrated with a great variety of cultural programmes in Germany and
German-speaking parts of Europe, coordinated by the Finnish Literature Exchange
(FILI) and the Finnish Institute in Germany.
According to research commissioned by
FILI, Finland’s media coverage was greater
than that of any previous Guest of Honour
country. The interest was also noticeable at
the fair amongst publishing professionals
from all around the world. Finland’s Granta* 3: Best of Young Finnish Novelists, published by Otava, was translated into English
and given out to professionals in order to
promote Finnish literature and authors.
Several children’s books represented by OGA have been extremely popular internationally. During the Frankfurt
fair, five titles from Mauri Kunnas were
sold to publishers from Turkey, the 36th
country and the 33rd language for Kunnas’s books. The picture books about the
hilarious Oddville boys, Tatu and Patu, by
Aino Havukainen and Sami Toivonen have
been sold in 21 countries, and Siri Kolu’s
The Robbersons series has been sold in
18 countries. Ninka Reittu’s picture books
on Messi and the Mystery Cat have so far
found foreign publishers in France, Germany, Denmark and Korea.
OUR INTERNATIONALLY successful
adult fiction authors include Riikka Pulkkinen, whose rights have been sold in 17
countries, Antti Tuuri whose novels have
been published in 24 languages, as well as
Kristina Carlson, Olli Jalonen, Kati Hiekkapelto, Juha Itkonen, and many more. The
bright new star is Pajtim Statovci whose
literary debut novel MY CAT YUGOSLAVIA was sold to publishers in eight countries during 2014.
is a lite* GRANTA
rary magazine
whose mission centres
on its ”belief in the
power and urgency
of the story, both
in fiction and
non-fiction, and
the story’s supreme
ability to describe,
illuminate and
make real.” Granta
was founded in
1889 by students
at Cambridge
University.
OGA’S TEAM
* Minna
Castrén, Publishing Director,
General Publishing
Leenastiina Kakko, Foreign Rights
Manager (Fiction)
Katja Kaulio, Foreign Rights Manager
(Children’s books, Young Adults)
Teuvo Sankila, Publishing Director,
Educational Publishing
Noora Sällström, Foreign Rights
Assistant (Non-Fiction, Comics)
Milla Palovaara, Producer (Playrights)
*
*
*
*
*
My cat Yugoslavia by
Pajtim Statovci was
a success also internationally.
OTAVA-KON S E R N I 11
F IN A N C I A L STATEM ENTS
Board of Directors
C H A IRM A N >
MEMBERS >
Henrik Ehrnrooth
Olli Reenpää,
Vice Chairman
SINCE 19 8 8
SINCE 1968
Jorma Ollila,
Vice Chairman
Eero Broman
Heikki Lehtonen
Alexander Lindholm
Pasi Vainio
Minna Castrén
Timo Kopra
SINCE 2007
SINCE 1991
SINCE 2008
SINCE 1996
D EP UTY MEM B ERS >
SINCE 2010
SINCE 2011
SECRETA RY OF T HE BOARD >
Pekka Harju
SINCE 2013
12
Ora Lyytikäinen
SINCE 2006
SINCE 2012
F IN A NC I A L STATEM ENTS
Review by the Board of Directors
Business environment. The downturn
continued and the situation of the Finnish
national economy deteriorated owing to
the crisis in Ukraine. General economic
uncertainty grew towards the year’s end.
Gross domestic product decreased by
almost one per cent year-on-year. There
are some signs of growth in exports
but not of overall economic growth.
Unemployment increased to a rate of
over 8% by the end of the year, according
to Statistics Finland. Interest rates and
inflation remained low. Investment figures
have not begun to recover in earnest since
the 2008 financial crisis. According to
preliminary figures, retail sales decreased
by more than 5% year-on-year and
Christmas sales contracted for the second
consecutive year. Online sales continued
to grow, taking a share of more than 10%
of all retail sales, but almost half of online
orders are placed with overseas stores.
The trend in the communications sector followed that of the economy in general. Book sales were down on the previous
year, both in general literature and educational materials. Media sales decreased
by almost 3% and magazine media sales
by more than 15% year-on-year. The magazine sales market contracted in parallel with a decrease in circulation and it is
now difficult to sell magazines to new customers. Online businesses continued to
increase their share of the communications market but growth has decelerated.
There is now a market in Finland for digital magazines and books, but their share of
the overall market is still small.
Key figures for the Group:
2014
2013
2012
Group
Net sales, EUR million
296.0 301.9314.7
Operating profit, EUR million
37.1 32.426.6
Net profit margin %
12.610.7 8.5
Return on investment (ROI) %
18.6 18.015.9
Return on equity (ROE) %
15.0 15.514.6
Equity ratio %
77.1 72.864.8
structure remained unchanged. At the end
of the financial year, Otava Publishing Company acquired 60% of the shares in Kustannusosakeyhtiö Moreeni. The Group
structure was simplified by incorporating Suomen Golfpiste Oy and Suomen
Kuvapalvelu Oy into Otavamedia Ltd on 31
December 2014. In December, Otavamedia
Ltd and A-lehdet Oy established Osuuskunta Suomen Lehtimiehet with the aim of
safeguarding cost-efficient, high-quality
logistics services in the longer term.
Books. Net sales totalled EUR 51.5
(55.5) million, down 7% year-on-year.
Operating profit was EUR 5.8 (6.3)
million, or 11.3% (11.3%) of net sales.
Although Otava Publishing Company’s net
sales and profit decreased, the company
still generated a good result. The net sales
of Otava Book Printing Ltd decreased and
the result was weaker due to decreased
volumes. Like Publishing Ltd’s net sales
increased and the result improved from
the previous year.
Trade. Suomalainen Kirjakauppa Oy’s
Business trends in the Group. Otava
Group’s net sales decreased by 2%. Otava
Group’s business result for the year
was competitive in view of the general
economic situation. The result and
relative profitability remained good due
to timely enhancement and adjustment
measures as well as the changes in the
company’s operating procedures.
net sales were EUR 106.7 (106.3) million,
representing growth of 0.4% (0.2%).
Operating profit improved considerably in
comparison with the previous year thanks
to more efficient product management.
During the year under review, the number
of revamped concept stores increased to
30, and the company increased its market
share in book sales.
Group organisation and structure.
Magazines. The magazine division’s net
By and large, the Group’s organisation and
sales totalled EUR 137.8 (143.6) million,
down by 4% (7%). Magazine subscription
sales and media sales both fell from the
previous year. Operating profit was EUR
22.5 (18.7) million, or 16.4% (13.0%) of
net sales. Profitability remained stable
despite the decrease in net sales as a result
of measures that were taken to enhance
efficiency and restructure operations.
The net sales of the book club business
decreased but its result remained on
par with the previous year. Otavamedia
Ltd’s result remained good. The net sales
of Suomen Golfpiste Oy increased and
the result improved. DeCo Media Oy’s
business environment was difficult and
the company made a loss. Sales at the
Estonian subsidiary, Ühinenud Ajakirjad AS,
decreased but the operating profit remained
positive. Based on an agreement concluded
with A-lehdet Oy during the financial
period, the magazine businesses of the
Estonian companies will be incorporated
into Ühinenud Ajakirjad AS. Following the
merger, Otavamedia Ltd will own 60% of
the company and A-lehdet Oy will own
40%. The merger will take place in February
2015.
New Business Functions. New
Business Functions comprise NettiX
Oy, Ampparit Oy and the Plaza portal.
The business area continued to grow
briskly (+15%) and it remained relatively
profitable.
Balance sheet, investments and
financial position. In 2014, no material
changes took place in the balance sheet
structure or the balance sheet total. The
OTAVA-KON S E R N I 13
F IN A N C I A L STATEM ENTS
Group’s equity ratio improved. It ended the
year at 77.1% (72.8%).
The Group’s gross capital expenditure
was EUR 5.9 (13.5) million. The most significant investments were made in store
revamping and computer software.
The Group’s financial position and
liquidity remained good. An extra capital
repayment of EUR 9.7 million was made
to reduce the outstanding long-term debt.
In addition to accounts with credit facilities, the Group’s liquidity has been secured
using short-term credit limits. The Group’s
cash flow from operations totalled EUR
36.3 (32.1) million. Net financial expenses were EUR 0.3 (0.5) million, representing
0.1% (0.2%) of net sales.
Risks. The Group has a well established
position in the book and magazine markets,
which have remained relatively stable .
Annual estimates of the Group’s overall
book sales have not differed significantly from actual sales figures. The Group’s
companies use a time-based, title-specific
obsolescence procedure, which keeps the
risk of obsolete book stocks very low.
The Group’s magazine subscribers are
long-term customers, who mainly pay
for their subscriptions in advance. As a
rule, agreements in the customer magazine market are made for at least twelve
months. Fluctuations in the media sales
market may be bigger, but the sector
accounts for a smaller share of net sales
than magazine sales.
Trends in the prices of most of the
goods and services needed by the Group
are easy to predict. The Group has signed
long-term agreements to make provisions
for paper price fluctuations.
The Group has invested in online businesses related to its core operations in
order to secure growth as sales of printed
products decrease and do not show any
sign of improving.
Based on the above, the risks related to the Group’s operations are minor.
A strong cash flow and high equity ratio
safeguard the continuity of the Group’s
operations in the event of market disturbances or other risk situations. Risks have
also been hedged with property and business interruption insurance policies.
14
Board’s proposal to the AGM
The parent company’s distributable funds are EUR 125,324 thousand, of which
profit for the financial year made up EUR 26,721 thousand. The Board proposes
to the Annual General Meeting that the distributable funds be used as follows:
EUR thousand
EUR 3.80 per share will be distributed as dividend
7,391
EUR 0.70 per share will be distributed as a 125- year dividend
1,362
to be left as equity
116,571
125,324
No material changes have taken place in the financial position of the company
since the end of the financial period. The liquidity of the company is good and,
in the Board of Directors’ view, the proposed dividends will not compromise the
solvency of the company.
Personnel
In the reporting year, the Group’s personnel numbers were as follows:
2014
2013
2012
Group
Average number of personnel
1 082
1 178
1 249
Salaries and remuneration (EUR thousand) 51 297
51 784
53 075
The Group has had an incentive scheme in place for the entire personnel since
2002. Performance incentives will be paid to the personnel for results that have
exceeded the targets set for each company using the earnings generated in
2014. In addition to this, the earnings for 2014 will also be used to pay a bonus
to every member of the Group’s personnel in celebration of Otava’s 125th year of
business. The bonus will correspond to one week’s salary. In total, bonuses worth
EUR 3.0 million will be paid to the personnel, including social security expenses.
Resolutions of the general meetings.
Shares. The company has 1,945,085
The Annual General Meeting held on 25
March 2014 elected Olli Reenpää, Henrik Ehnrooth, Jorma Ollila, Eero Broman,
Heikki Lehtonen and Alexander Lindholm
as members of the Board of Directors. Pasi
Vainio, Minna Castrén, Timo Kopra and
Pekka Harju were elected as deputy members. Henrik Ehrnrooth was elected as the
Chairman. Ora Lyytikäinen served as Secretary of the Board. Kari Miettinen, Authorised Public Accountant, was re-elected as
chief auditor, and Oy Audicon Ab, Authorised Public Accountants, as deputy auditor.
The Annual General Meeting decided to
distribute a dividend of EUR 3.50 per share,
or EUR 6.8 million in total.
Furthermore, the Annual General Meeting decided to authorise the Board to repurchase company shares representing up to
15% of the total stock with non-restricted
equity. The authorisation is valid until the
following Annual General Meeting.
shares. The shares have no nominal value.
Each share entitles the holder to one vote
at the shareholders’ meeting. The transfer
of shares is subject to a redemption clause
in the Articles of Association.
Outlook for 2015. Otava Group expects
2015 to be another challenging year.
There are no positive signs for the Finnish
economy, so the operating environment will
remain difficult. Magazine subscriptions,
which constitute a substantial part of the
Group’s net sales and profit, have become
more difficult to sell. It is difficult to increase
net sales in the print media sector in any
case. It is essential to develop new business
functions, despite the fact that sales of
electronic books and magazines have been
low and sales have grown more slowly than
anticipated. Enhancement measures and
new procedures will help to maintain the
Group’s result, which is currently good.
F IN A NC I A L STATEM ENTS
Consolidated Income Statement
1.1.–31.12. EUR million
NET SALES
Change in inventories of completed and
unfinished products
Other operating income
2014
2013
296.0
301.9
-1.1
-1.5
-118.3
-122.5
-12.7
-10.1
4.0
Materials and services
Personnel expenses
-63.2
Depreciation and impairment
Other operating expenses
-74.2
Share of results of associated companies
0.3
3.6
-63.7
-79.1
0.5
-268.2
- 274.9
OPERATING PROFIT
31.6
30.1
Financial income and expenses
-0.3
-0.5
PROFIT BEFORE TAXES
31.3
29.6
-7.5
-7.4
23.6
22.0
Income taxes
Minority interest
PROFIT FOR THE FINANCIAL YEAR
-0.2
-0.1
Consolidated Cash Flow Statement
EUR million
2014
2013
Cash flow from business operations
42.8
33.7
Cash flow before financing
37.5
Investments
Financing
Changes in liquid assets
Liquid assets at 31 December
-5.3
-13.3
-21.8
-19.0
32.1
16.4
15.7
20.4
1.4
OTAVA-KON S E R N I 15
F IN A N C I A L STATEM ENTS
Consolidated Balance Sheet
31.12. M€
2014
2013
85.9
91.9
ASSETS
NON-CURRENT ASSETS
Intangible assets
Tangible assets
Long-term financial assets
Total non-current assets
63.4
7.0
65.2
6.6
156.3
163.7
Inventories
28.7
29.6
Cash and bank balances
32.1
16.4
CURRENT ASSETS
Short-term receivables
21.0
18.4
Total current assets
81.9
64.4
TOTAL ASSETS
238.2
228.1
8.9
8.9
Equity and liabilities
SHAREHOLDERS’ EQUITY
Share capital
Share premium fund
25.0
25.0
Retained earnings
105.8
92.1
Total equity
165.6
150.3
0.6
0.3
Short-term liabilities
2.8
69.1
14.6
Total liabilities
72.0
77.5
238.2
228.1
Reserve for invested non-restricted equity
Profit for the financial year
Minority interest
2.3
23.6
2.3
22.0
LIABILITIES
Long-term liabilities
TOTAL EQUITY AND LIABILITIES
16
62.9
F IN A NC I A L STATEM ENTS
Auditor’s report
TO THE ANNUAL GENERAL MEETING
OF OTAVA LTD. I have audited the
accounting records, the financial
statements, the review by the Board of
Directors and the administration of Otava
Ltd for the period 1 January 2014 – 31
December 2014. The financial statements
comprise the consolidated balance sheet,
income statement, cash flow statement
and notes to the financial statements, as
well as the corresponding documents for
the parent company.
RESPONSIBILITY OF THE BOARD
OF DIRECTORS AND MANAGING
DIRECTOR. The Board of Directors and
the Managing Director are responsible
for preparing the financial statements
and the review by the Board, and for
providing a true and fair representation
in accordance with the regulations in
force in Finland governing the preparation
of financial statements and the review
by the Board of Directors. The Board of
Directors is responsible for appropriately
arranging monitoring of accounting and
asset management, while the Managing
Director is responsible for ensuring that
the accounts comply with legislation and
that asset management has been arranged
in a reliable manner.
AUDITOR’S OBLIGATIONS. It is my
responsibility to express an opinion on
the financial statements, consolidated
financial statements and review by the
Board of Directors based on the audit I
perform. The Auditing Act requires that
I comply with professional ethics. I have
performed the audit in compliance with
good accounting practices observed in
Finland. Good accounting practices require
that I plan and carry out the audit to
obtain reasonable assurance of whether
the financial statements or review by
the Board of Directors contain material
misstatement, and whether the parent
company’s Board members or Managing
Director are guilty of any action or
negligence that might lead to liability for
damages towards the company, or have
violated the Companies Act or the Articles
of Association.
An audit involves procedures to obtain
audit evidence about the figures and disclosures in the financial statements and
review by the Board of Directors. The
selection of procedures is based on the
auditor’s judgement, which includes
assessing the risk of material misstatement resulting from fraud or error. When
assessing such risks, the auditor takes
into consideration internal control, which
is relevant to the company’s preparation
of financial statements and review by the
Board of Directors, and should ensure that
these documents give a true and fair view.
The auditor assesses internal control in
order to plan auditing measures appropriate for the circumstances, but not for the
purpose of making a statement on the efficiency of internal control. An audit also
includes evaluating the appropriateness
of the accounting policies used, the suitability of accounting estimates made by
the company’s management, as well as
the general presentation of the financial
statements and the review by the Board of
Directors.
In my opinion, the audit evidence I have
obtained provides a sufficient and appropriate basis for an audit statement.
DECLARATION. In my opinion, the
financial statements and review by the
Board of Directors give a true and fair
view of the results of the operations of
the Group and the parent company and
of their financial position, in accordance
with the accounting provisions in force in
Finland. The information in the review by
the Board of Directors and the financial
statements is consistent.
Helsinki, 12 February 2015
Kari Miettinen,
Authorised Public Accountant
OTAVA-KON S E R N I 17
G ROU P O RGA NI SATI O N
Group organisation 1 January 2015
Board of Directors
Chairman Henrik Ehrnrooth
Executive committee
Chairman Henrik Ehrnrooth
Olli Reenpää
Eero Broman
Alexander Lindholm
Pasi Vainio
Timo Kopra
Pekka Harju
Secretary Ora Lyytikäinen
Otava Ltd
CEO
Alexander Lindholm*
IT Administration
CIO
Maarit Laakkonen
Books
Pasi Vainio*
Trade
Timo Kopra*
Magazines
Pekka Harju*
New Business Functions
Jaakko Haapakangas
Otava Publishing
Company Ltd
Managing Director
Pasi Vainio
Suomalainen
Kirjakauppa Oy
Managing Director
Timo Kopra
Otavamedia Ltd
Managing Director
Pekka Harju
Plaza
Jaakko Haapakangas
General Literature
Minna Castrén
Educational Materials
Teuvo Sankila
Marketing
Maija Kuusi
Financial Administration
Arto Tuokko
Sourcing
Reetta-Liisa Pikkola
Sales
Mervi Jäntti
Finance and
Administration
Pirjo Hämäläinen
Like Publishing Ltd
Päivi Paappanen
Kustannusosakeyhtiö
Moreeni
Pasi Vainio
Otava Book Printing Ltd
Managing Director
Matti Uuttu
Publishing Unit 1
Katriina Kaarre
Publishing Unit 2
Tarja Hurme
Customer
Communication
Marjatta Leino
Consumer Sales and
Marketing
Eija Männistö and
Markus Rouhiainen
Media Sales
Tomi Takanen
Financial Administration
Antti Lahtinen
Customer Service and
Human Resources
Anne Mantila
Graphic Design
Päivi Laakso,
Image Production
Tarja Hurme
DeCo Media Oy
Tomi Takanen
Ühinenud Ajakirjad AS
Managing Director
Marko Tamme
*Member of the Group’s management team
18
Finance and Administration
CFO
Ora Lyytikäinen*
NettiX Oy
Veli-Matti Vänninmaja
Ampparit Oy
Managing Director
Petteri Hannonen
Contacts
Parent company
OTAVA LTD
PO Box 134, FI-00121 Helsinki, Finland
Visiting address:
Uudenmaankatu 10
FI-00120 Helsinki, Finland
Tel. +358 9 1996 606
[email protected]
www.otavakonserni.fi
Books
OTAVA
PUBLISHING COMPANY LTD
PO Box 134, FI-00121 Helsinki, Finland
Visiting address:
Uudenmaankatu 10
FI-00120 Helsinki, Finland
Tel. +358 9 199 61
[email protected]
www.otava.fi
LIKE PUBLISHING LTD
PO Box 37, FI-00521 Helsinki, Finland
Visiting address:
Uudenmaankatu 10
FI-00120 Helsinki, Finland
Tel. +358 9 622 9970
[email protected]
www.like.fi
KUSTANNUSOSAKEYHTIÖ
MOREENI
Uudenmaankatu 10
FI-00120 Helsinki, Finland
Tel. +358 9 199 61
[email protected]
www.moreenikustannus.fi
OTAVA BOOK PRINTING LTD
Otavantie 11
FI-42700 Keuruu, Finland
Tel. +358 9 680 900
Sales and Marketing:
Uudenmaankatu 10
FI-00120 Helsinki, Finland
Tel. +358 9 680 900
[email protected]
www.otavankirjapaino.fi
Trade
SUOMALAINEN KIRJAKAUPPA OY
Maistraatinportti 1
FI-00240 Helsinki, Finland
Tel. +358 9 852 7510
[email protected]
www.suomalainen.com
Magazines
OTAVAMEDIA LTD
Maistraatinportti 1
FI-00015 Otavamedia, Finland
Tel. +358 9 15 661
[email protected]
www.otavamedia.fi
OTAVAMEDIA LTD,
CUSTOMER COMMUNICATIONS
Maistraatinportti 1
FI-00015 Otavamedia, Finland
Tel. +358 9 15 661
[email protected]
www.otavamedia.fi
Kristiinankatu 3 B
FI-20100 Turku, Finland
Tel. +358 9 15 661
[email protected]
www.otavamedia.fi
OTAVAMEDIA LTD /
GREAT FINNISH
BOOK CLUB
Maistraatinportti 1
FI-00015 Otavamedia, Finland
Tel. +358 9 15 661
[email protected]
www.suurisuomalainen.fi
DECO MEDIA OY
Maistraatinportti 1
FI-00240 Helsinki, Finland
Tel. +358 9 15 661
[email protected]
[email protected]
www.decomedia.fi
ÜHINENUD AJAKIRJAD AS
Liivalaia 13/15
EE-10118 Tallinn, Estonia
Tel. +372 610 4000
[email protected]
www.ajakirjad.ee
New Business
Functions
NETTIX OY
Maistraatinportti 1
FI-00240 Helsinki, Finland
Tel. +358 600 04070
[email protected]
[email protected]
[email protected]
www.nettix.fi
AMPPARIT OY
P.O. Box 6, FI-80101 Joensuu, Finland
Visiting address:
Kauppakatu 25 C, 3rd floor
FI-80100 Joensuu, Finland
Tel. +358 45 330 9710
[email protected]
Skype: ampparit
www.ampparit.com
OTAVAMEDIA LTD / PLAZA.FI
Maistraatinportti 1
FI-00015 Otavamedia, Finland
Tel. +358 9 15 661
[email protected]
Plaza.fi
OTAVA-KON S E R N I 19
Annual report 2014
EDITING Kaisa Alapartanen, Otavamedia Ltd, Customer Communication
DESIGN Tuija Tarkiainen COVER PICTURE Mirva Kakko/Otavamedia
COVER PICTURE STYLING Pauliina Ristimäki
REPRODUCTION Aste Helsinki Oy PRINTING Otava Book Printing Ltd