The leading communications group in the Nordic region

In 2014, our focus was on improving comprehensive customer service. We began to talk about our service ecosystem, where the whole is greater than the sum of its parts. We developed our digital service portfolio and expertise, strengthened synergies and intensified cooperation between our businesses. Late in the year, we conceptualized our approach as the Circles of Success, which represent our service strategy of effectively combining our focus and expertise in online communication to promote our customers’ success.

The Circles of Success comprise five interlinked service areas: Insights, Content, Service Design, Visibility, and Campaigns. All five of these areas are needed to build successful interaction in a rapidly changing business environment that is increasingly focused on online activities.

Research and analyses constitute the core for success that guides the development of other services: preparing a content strategy, designing content and its marketing, service design, strategic media optimization for greater visibility, as well as the personalization and targeting of campaigns.

We are focusing on expertise in all of these areas, and we also offer solutions for effectively managing this rapidly developing set of activities.

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The Group decided to organize its operations according to the new service strategy into three business areas: Visibility & Service Design, Content, and Campaigns & Dialogue. The new organizational structure took effect at the beginning of January 2015.

Over the past 10 years, we have implemented significant structural changes and made acquisitions and divestments on a nearly annual basis in order to develop our business to better respond to customers’ communication needs.

The largest changes in 2014 were made in Sweden, where printing operations were consolidated to create a modern direct marketing company, and digital service development was accelerated by restructuring Citat and acquiring the advertising agency Leon. In Finland, the Group acquired Seed Digital Media to complement the service portfolio with expertise in loyalty marketing. The Group sold properties in Sweden as well as in Finland and divested the media sales company Klikki Networks in Finland.

The Group’s net sales declined to EUR 106.6 million (EUR 121.3 million) primarily due to the reduction of third-party invoicing in the Klikki Group and the depreciation of the Swedish krona. The Group’s operating profit, EUR 1.0 million (EUR 4.0 million), was lower than planned, particularly due to the consolidation of Swedish printing operations stretching from the spring to the autumn.

The Group’s result, EUR 3.4 million (EUR 4.0 million) includes a significant amount of non-operating items at EUR 2.4 million (EUR 0.0 million), which were attributable to the rationalization of operations and the sales of property assets. The Group’s equity-to-assets ratio increased to 51.4 percent (42.2), and cash and cash equivalents remained at a good level due to strong operating cash flow.

The most successful of the Group companies were Klikki, which specializes in strategic media optimization in Finland and Sweden, the strategic content agency JG Communication, and Mods, which specializes in image manipulation in Sweden. Edita Publishing’s legal information services and learning materials were also successful, and the company had a strong focus on service development.

Edita Prima also focused on service development, particularly with regard to marketing automation, personalized targeting and loyalty marketing. The latter of these areas was bolstered by the acquisition of Seed Digital Media in October.

The Group companies cooperated on customer projects and sales. In particular, the Klikki companies, the Citat companies and JG Communication combined their expertise to benefit customers. To further expand Group-wide cooperation, a sales team with representatives from different businesses was established late in the year. In addition, Klikki, Citat, JG Communication, Brand Systems and Nordic Morning moved to a shared office on Gävlegatan in Stockholm in December.

Overall growth in the demand for communications services was slow. Sweden’s faster recovery from the general economic slowdown compared with Finland was also reflected in the growth of media investments. Media advertising grew in Sweden by approximately 2 percent, while in Finland, media advertising declined by 2.6 percent from the previous year. Growth was fastest in digital media advertising: mobile, search engine, instream and display advertising. Media advertising is estimated to grow by approximately 2 percent in Sweden in 2015.* In Finland, the decline in media advertising is likely to continue. Companies and organizations are expected to continue to invest in strategic communication services and social media services.

Competent and committed professionals are our most important success factor. Our goal is to be among the most attractive workplaces in the Nordic communications industry. In 2014, we focused on leadership development. A development program was launched in the Group companies’ management teams in the spring, and the program was subsequently expanded to cover all managers in the autumn.

The Nordic Bond 001 training program for young talents with managerial potential was concluded in the spring. The Nordic Bond 002 training program began in November, with a focus on improving customer service skills. Late in the year, we also published our key behaviors to encourage everyone to promote a good work community and success both at the individual and company levels.

We take responsibility for the environmental awareness of our employees and customers. We spread information on the environmental impacts of different communications solutions. In our print products, we offer the option of a description of the product’s environmental impacts, which allows the information to also reach our customers’ customers.

We have systematically reduced the environmental impact of our operations since the start of the 1990s. Our printing companies are leading the way in environmental responsibility in the Nordic region, and nearly all of our offices are WWF Green Office-certified. In 2014, the WWF awarded Green Office certificates to Klikkicom Oy and Klikki AB. Edita Prima Oy and Edita Bobergs AB updated their right to use the Swan ecolabel, pursuant to the new criteria.

Most of the environmental impact from the communication industry is already caused by the use of digital services and devices. In this report, we are publishing our first article on this topic, discussing the opportunities for analyzing our own digital eco-footprint, as well as that of our services. A complete analysis is impossible with the information currently available, but perhaps in the future, a digital service can also be awarded a certificate of ecological efficiency. We will strive to develop our analysis of the digital eco-footprint and describe our progress on this front in our annual reports.

Corporate responsibility issues are important to our customers. Based on our survey, our customers are active in developing their own responsibility, and they also wish to receive support in communicating their responsibility and in the acquisition of information on corporate responsibility. They also expect their service providers to operate in a responsible manner. Most of our audiences do not know enough about Nordic Morning’s corporate responsibility, and they expect more active communication on responsibility. We happily accept this challenge – after all, our goal is to be a leader in responsibility in the communications sector. In our most recent employee survey, 92 percent of the respondents indicated that they consider it important for the Nordic Morning Group to be a model of corporate responsibility (90 percent in 2013).

Timo Lepistö
CEO, Nordic Morning Plc

* IRM (Institutet för Reklam- och Mediestatistik, Institute for Advertising and Media Statistics), Reviderad reklam- och medieprognos 2014-2015 (“Revised Advertising and Media Forecast”), November 20, 2014; TNS Gallup Oy, Ad Intelligence, Mainosvuosi 2014 (“The Year in Advertising 2014”), January 29, 2015.