CEO's review 2015
"Close cooperation leads to innovations that help our customers create successful experiences for their customers."
Timo Lepistö, CEO, Nordic Morning Plc
Our customers increasingly meet their customers in the digital environment. It is now more important than ever, therefore, to understand technology, data, and analytics in order to create successful customer encounters and service experiences. This challenge lies at the heart of Nordic Morning’s service strategy launched in January 2015. It forms the foundation around which we have built our special expertise, service portfolio, and way of working.
We create innovative solutions that are driven by data and analytics. They combine strategic content, service design based on the user experience, optimal visibility, and engaging customer dialogue. Our strength lies in our diverse expertise and close internal cooperation, which enable us to take a broad-based approach to the customer’s challenges. This new strategy has had a transformative effect on Nordic Morning as well as on our customers.
Our home markets, Finland and Sweden, developed in different directions in 2015. In Sweden, media investments grew by 1.8 percent*, while in Finland, media investments declined by 2.1 percent from the previous year** . The internet dominated investments in both markets, led by mobile, online TV, and search services.
The Group’s net revenue was EUR 104.9 million (106.6), of which 39 percent (42) came from Finland and 61 percent (58) from Sweden and other Nordic countries. The decline in net revenue was mainly due to the lower demand for printed products, the contraction of the net revenue of the Content business area, and the depreciation of the Swedish krona.
The Group’s operating profit was EUR -0.2 million (EUR 3.4 million). The operating profit included a significantly lower amount of non-recurring items than in the previous year at EUR -0.2 million (EUR 2.4 million). The Group’s operating profit excluding non-recurring items was EUR -0.1 million (EUR 1.0 million). It was weighed down by profitability issues related to the sheet-fed offset printing business in Sweden.
The Group’s equity ratio was excellent, 48.6 percent (51.4 percent) and cash and cash equivalents totaled EUR 4.8 million (EUR 9.3 million).
We strengthened our business through acquisitions, restructuring, and increasing internal cooperation, as well as by investing in competence development, particularly with regard to the use of technology, data, and analytics in service solutions.
Nordic Morning’s business operations were reorganized on January 1, 2015 into three business areas: Visibility & Service Design, Content, and Campaigns & Dialogue.
The Visibility & Service Design business area saw the Group’s most significant acquisition. The acquisition of Ottoboni, a highly respected Swedish company specializing in business and service design, significantly strengthened the Group’s digital service portfolio in March. In September, we established Ottoboni in Finland by merging Citat’s Finnish operations with the newly acquired Alkuvoima. Klikki, which specializes in media optimization, focused on developing its customers’ strategic visibility through data and analytics-based information.
In the Content business area, the need to strengthen our content strategy expertise led to the establishment of Sitrus in September. In Sweden, this next-generation content agency was created by merging JG Communication and Citat. Sitrus specializes in building content ecosystems and social media. In Finland, Sitrus was formed by combining the content expertise of Edita Publishing and the former Citat. Edita Publishing’s core competencies are learning, training, and information services. The National Centre for Professional Development in Education Educode was merged with Edita Publishing, and Educode became the company’s education and training brand. In 2015, Edita Publishing focused particularly on the development of digital learning solutions.
In the Campaigns & Dialogue business area, the share of revenue represented by traditional printing operations continued to decline, while net revenue from multichannel and dynamic data services nearly doubled. The focus of the business area’s development was on the production of targeted and automated communications in Edita Prima and Edita Bobergs, and on solutions to increase customer loyalty in Seed.
The Group’s sales cooperation took major steps forward. Early in the year, we established local sales teams in Sweden and Finland, which together constitute the Group’s Nordic sales team. We launched the Sales Lab training program to support sales development.
Today’s organizations require broad-based expertise in solving problems, which was reflected in exponential growth in the Group’s cooperative customer projects in 2015. Our approach to these projects is based on a data- and analytics-driven perspective on the operating environment and solutions.
Our values of renewal, respect, and responsibility are our anchors in a time of major change both internally and in our operating environment. Our values and ethical guidelines provide guidance to us in our work and stakeholder interaction. We also require our partners to operate according to the same standards.
We invest in good leadership, being a good employer, and attracting and securing the commitment of the best employees who share the Group’s values. Our values have helped us expand the Group by bringing in companies and people that contribute a broad perspective and expertise to our organization, as well as an enthusiastic attitude based on teamwork.
The Group engages in various charitable activities, with many projects based on employee initiatives. Nordic Morning supports activities aimed at preventing social exclusion among young people. In 2015, we granted support to various charitable projects, including Finnish Youth Academy group projects carried out by young people and related to communications. We also supported the John Nurminen Foundation’s Clean Baltic Sea initiative.
When it comes to the Group’s premises, the head offices in Helsinki and Stockholm as well as the Helsinki offices of Edita Publishing, Klikkicom, and Ottoboni are included in the Green Office system. The Group’s production plants in Helsinki and Falun are ISO14001 certified, Swan ecolabel-certified, and climate-neutral, and they have also been granted the right to use labels related to the paper chain of custody.
We support, motivate, and assist our employees to help them achieve success in their work. The cornerstones of our HR strategy are Learning and Development, Leadership, and Culture of Engagement.
During the year, we organized various training and coaching programs for our employees and management. The Nordic Bond 002 program launched in November 2014 ended in the spring with a “Shark Tank” day for presenting business ideas, and continued again in the autumn with the mentoring phase.
In the spring, we launched HEIMO, a social game aimed at building togetherness and cooperation, which went on to win the Group’s internal Innovation Awards competition and be shortlisted for the European Digital Communication Awards.
We participated in communication industry events as partners and participants. Our partnership with the SIME digital industry event increased awareness of Nordic Morning as a strategic advisor for customers in the Swedish market. Our service portfolio was also prominently on display at the Marketing Communications Week in Helsinki. In 2016, we are partnering with the Nordic Business Forum, and we will implement several customer events related to the theme throughout the year.
In 2016, we will continue to engage in closer internal cooperation and develop our service portfolio in accordance with our customers’ needs. The significance of leveraging data, analytics, and technology in communications and marketing will continue to increase in the coming years. This trend will change our customers’ needs and significantly influence the direction of Nordic Morning’s future development.
*IRM (Institutet för Reklam- och Mediestatistik, Institute for Advertising and Media Statistics), Reviderad reklam- och medieprognos 2015-2016 (“Revised Advertising and Media Forecast”), December 8, 2015
**TNS Gallup Oy, Ad Intelligence 2015 (“The Year in Advertising 2015”), January 26, 2016.
Group strategy and services
Nordic Morning in brief
Nordic Morning is the leading communication group in the Nordic region
We drive business success and build outstanding customer experience through data and insights driven innovations combining smart content, service design, visibility and customer dialogue.
Our strength lies in our diverse expertise and close internal cooperation, which enable us to take a broad-based approach to the customer’s challenges.
We are 800 communications experts working in Finland, Sweden, Denmark, Norway, Ukraine and India. We have been at the forefront of our industry for almost 160 years.
Nordic Morning is made up of the parent company, Nordic Morning Plc, as well as six Finnish and six Swedish subsidiaries that operate in different communications sectors. Nordic Morning is also a shareholder in two Swedish companies.
In the Group structure, the subsidiaries were allocated to three business areas in 2015, namely: Visibility & Service Design, Content, and Campaigns & Dialogue.
Each Group company has a specific market position and service portfolio. Together, they form a strongly synergistic communications service offering that covers our customers’ key communication needs.
The parent company's role in relation to its subsidiaries is to be an active and innovative developer, and an attractive home for strategically interesting business and competences, encouraging innovativeness.
Nordic Morning’s business operations have changed substantially over the past ten years. Operations have been developed in accordance with the major changes taking place in the communications industry as the focus shifts from traditional printed products to digital channels.
While operations and services with declining profitability have been discontinued, the Group has acquired new companies and all Group companies have been developed to become forerunners of digital communications in their respective fields.
According to its strategy, Nordic Morning will continue to reinforce its position as a provider of diverse communication services in the Nordic countries.
Group companies
Parent company Nordic Morning Plc
Nordic Morning AB
Visibility & Service Design
Klikki AB and Ottoboni Sweden AB in Sweden, and Klikkicom Oy and Ottoboni Finland Oy in Finland.
Content
Sitrus Agency AB and Mods Graphic Studio AB in Sweden; Sitrus Agency Oy and Edita Publishing Oy in Finland, and Sitrus Ukraina LLC in Ukraine.
Campaigns & Dialogue
Edita Prima Oy and Seed Digital Media Oy in Finland; Edita Bobergs AB and associate companies Brand Systems AB and Edita Bobergs Förvaltings AB in Sweden.
Organization 2015
Our values
Renewal
We are innovative forerunners of communications.
Respect
We promote equality, openness and integrity.
Responsibility
We pursue good results in a transparent and ethical manner.
Our key behaviors
Passion for Success
We have a positive attitude towards working smoothly and achieving targets. We take the initiative in development.
Openness and Sharing
We want to understand others, work together and be part of a team.
Curiosity to Learn and Innovate
We are curious. We want to learn to know things, people and challenges better. We also want to ask questions, question things and challenge the current ways of doing things and be open to new solutions.
Helping Customers Succeed
We want to serve customers and other stakeholders, and satisfy their needs. We focus our resources on understanding and satisfying customer needs.
Code of business ethics
Nordic Morning's Code of Business Ethics is based on our core values and is intended to guide our interactions with colleagues, customers, partners and other stakeholders. The Code of Business Ethics will help us conduct successful business operations and feel good in our work.
ABOUT OUR SERVICES
Digital tools for good service
Seed Digital Media helps reach customers in the right place.
How having your own archive makes for a smooth operation
The electronic archive services provided by Edita Publishing help customers use information they have on file efficiently to support their day-to-day work.
Achieving digital success by being responsive to end-user needs
For Ottoboni, to focus on end users is very much a reality and an important part of the work process.
Customer insights can boost business
A deep insight into customer behavior and purchasing processes can boost business. Klikki’s expertise includes making detailed analyses of user behavior.
Business areas
Optimizing the brand
The Visibility & Service Design business area comprises: Klikkicom Oy and Ottoboni Finland Oy in Finland; and KliKKi AB and Ottoboni Sweden AB in Sweden.
Ottoboni is specialized in business and service design. Klikkicom and Klikki are specialized in media optimization.
At the heart of every brand
The Content business area comprises: Sitrus Agency Oy and Edita Publishing Oy in Finland; Sitrus Agency AB and Mods Graphic Studio AB in Sweden; and Sitrus Ukraine LLC in Ukraine.
Sitrus is specialized in strategic content and content marketing, Mods Graphic Studio is specialized in image retouching and Edita Publishing is specialized in professional content, information services and learning solutions.
Increased customer loyalty
The Campaigns & Dialogue business area comprises: Edita Prima and Seed Digital Media Oy in Finland; and Edita Bobergs AB and associate company Brand Systems International AB in Sweden.
Edita Prima and Edita Bobergs are specialized in personalized print and Seed Digital Media is specialized in loyalty marketing.