Alma Media Oyj

743700ILU1PL86IW34292022-01-012022-12-31743700ILU1PL86IW34292021-01-012021-12-31743700ILU1PL86IW34292022-12-31743700ILU1PL86IW34292021-12-31743700ILU1PL86IW34292020-12-31743700ILU1PL86IW34292020-12-31ifrs-full:IssuedCapitalMember743700ILU1PL86IW34292020-12-31ifrs-full:SharePremiumMember743700ILU1PL86IW34292020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember743700ILU1PL86IW34292020-12-31almamedia:InvestednonrestrictedequityfundMemberiso4217:EURiso4217:EURxbrli:shares743700ILU1PL86IW34292020-12-31ifrs-full:RetainedEarningsMember743700ILU1PL86IW34292020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember743700ILU1PL86IW34292020-12-31ifrs-full:NoncontrollingInterestsMember743700ILU1PL86IW34292021-01-012021-12-31ifrs-full:RetainedEarningsMember743700ILU1PL86IW34292021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember743700ILU1PL86IW34292021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember743700ILU1PL86IW34292021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember743700ILU1PL86IW34292001-01-012001-01-01ifrs-full:RetainedEarningsMember743700ILU1PL86IW34292001-01-012001-01-01ifrs-full:EquityAttributableToOwnersOfParentMember743700ILU1PL86IW34292001-01-012001-01-01743700ILU1PL86IW34292021-12-31ifrs-full:IssuedCapitalMember743700ILU1PL86IW34292021-12-31ifrs-full:SharePremiumMember743700ILU1PL86IW34292021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember743700ILU1PL86IW34292021-12-31almamedia:InvestednonrestrictedequityfundMember743700ILU1PL86IW34292021-12-31ifrs-full:RetainedEarningsMember743700ILU1PL86IW34292021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember743700ILU1PL86IW34292021-12-31ifrs-full:NoncontrollingInterestsMember743700ILU1PL86IW34292022-01-012022-12-31ifrs-full:RetainedEarningsMember743700ILU1PL86IW34292022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember743700ILU1PL86IW34292022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember743700ILU1PL86IW34292022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember743700ILU1PL86IW34292022-12-31ifrs-full:IssuedCapitalMember743700ILU1PL86IW34292022-12-31ifrs-full:SharePremiumMember743700ILU1PL86IW34292022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember743700ILU1PL86IW34292022-12-31almamedia:InvestednonrestrictedequityfundMember743700ILU1PL86IW34292022-12-31ifrs-full:RetainedEarningsMember743700ILU1PL86IW34292022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember743700ILU1PL86IW34292022-12-31ifrs-full:NoncontrollingInterestsMember ANNUAL REPORT 2022 Contents 03 05 06 07 09 52 124 145 CEO’s review Key ﬁgures Alma Media in brief Alma Media as an investment Report by the Board of Directors Corporate Governance Statement Remuneration Report Financial statements * Audited 156 Sustainability Report FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 2ANNUAL REPORT 2022 SUSTAINABILITY REPORT CEO’S REVIEW A record-breaking year in spite of headwinds – the team is in good shape to take on the challenges ahead A lma Media had a histor- ically successful year in 2022. Our business grew and our proﬁtability rose to an all-time high in spite of the exceptional turbulence in our operating environment. Our strong performance is proof of our agility and adaptability as well as the effectiveness of our strategy. We achieved growth on a broad front. Our revenue grew by 12.1% to MEUR 308.8 (275.4) as pent-up demand was released in the recruit- ment markets and our digital businesses and marketplaces drove us forward. Alma Media’s marketplaces grew by 24.2% and media by 5.7%, while service revenue was close to the previous year’s level (-1.3%). Organic growth, excluding acquisitions and divestments, was 12.8%. Adjusted operating proﬁt increased by 20 per cent to MEUR 73.4 (61.1), representing 23.8% (22.2%) of revenue. Operating proﬁt was MEUR 80.1 (56.8), or 25.9% (20.6%) of revenue. Our ﬁnancial solidity improved substantially thanks to the good proﬁt performance and strong cash ﬂow. Our gearing at the end of the year stood at 69.3% and our equity ratio was 45.8%. Alma Career’s revenue grew by 33.6% to MEUR 109.8, while the segment’s adjusted operating proﬁt increased by 41.7% to MEUR 42.5, representing 38.8% of revenue. The COVID-19 situation improved and restric- tions imposed by the authorities no longer had a signiﬁcant impact on Alma Career’s customer companies, which led to strong customer invoicing. The delay between customer invoicing and the recognition of revenue will help maintain strong revenue performance in the recruitment business at least through the ﬁrst half of 2023. Our recruitment portals had a total of 1.5 million paid job adverts in 10 countries. The total number of visitors to our portals was 74 million and the number of job alerts created by users was 22 million. We were also active in our own recruitment in the Alma Career seg- ment, particularly in the early part of the year, and the number of employees grew by 14.7%. In the Alma Consumer segment, revenue grew by 10.2% to MEUR 104.1, and digital business accounted for 82.7% of revenue. Revenue from the media business grew by FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 3ANNUAL REPORT 2022 SUSTAINABILITY REPORT YEAR 2022 8.8%; content by 11.4% and advertising by 7.6%. Digital advertising accounted for 90.1% of all advertising. Organic revenue growth was 5.5%. Programmatic advertising buying, and especially advertising related to cars, mobility and housing, performed well in the early part of the year in particular, before the change in consumer demand caused by high inﬂation began to have an impact. Iltalehti maintained its position as the larg- est digital news media in Finland. According to ofﬁcial FIAM measurements used in the Finnish National Readership Survey (NRS), an average of 2.87 million Finns read Ilta- lehti online weekly, which is well over half of the population aged over 16 in Finland. The IL Plus service, which gives readers access to all Iltalehti content, saw the number of subscribers exceed 40,000, and single-co- py sales of the print version increased as well. Iltalehti was the leading news media in the coverage of news related to the Nato process. Iltalehti’s articles on the topic were also widely quoted by foreign media. During the year under review, we complet- ed the integration of the acquisitions made in 2021 (the motor vehicle marketplace Net- tix Oy and the digital marketing solutions provider Netello Systems Oy). The segment continues its intensive product develop- ment efforts, which is also reﬂected in the number of employees growing by 10.4%. The change in consumer demand caused by high inﬂation and the fairly severe as new services using data. It seeks new growth opportunities in scalable and sub- scription-based digital services targeted at professionals and companies. Acquisitions and divestments continued The share capital of Netello Systems Oy, a provider of digital marketing solutions, was transferred entirely to Alma Media’s own- ership. We also continued to make divest- ments by selling a non-controlling interest (21.05 per cent) in Bolt Group Oy, a Finnish stafﬁng company specialising in temporary stafﬁng for the construction sector, and selling an 80% share of the share capital of Muugimeistrite A/S, a provider of telemar- keting services in Estonia and Latvia, to the company’s acting management. The operating environment was turbulent Russia’s invasion of Ukraine was the big shock in 2022. It also hampered econom- ic development throughout Europe, and growth slowed in our operating countries in the latter part of the year. The impacts of the COVID-19 pandemic diminished – in spite of new virus variants and ﬂuc- tuations in the level of infections – as the vaccination coverage increased, among other developments. We transitioned from a primarily remote work model to a ﬂexi- ble multi-location work model. Employee satisfaction remained at a high level and we continued to raise the bar with regard to sustainability by increasing the ambition of our emission targets, for example. Moving from a successful digital transformation towards more developed marketplaces Over 80% of the Group’s revenue is derived from digital business. The marketplace business accounts for nearly half of revenue, the media business for about a third and services for about a ﬁfth. In the media busi- ness, the digital transformation from print to digital media is continuing. With regard to the marketplace and service business, our development is heading towards more advanced digital trading platforms. We want to help our customers to use online services easily and smoothly, and we also want to provide additional services at different stag- es of the transaction process. We continue to aim for market leadership in our focus areas: recruitment, housing and mobility. We will diversify and develop new revenue streams in our existing service areas and complement our core offering on our platforms by launching new services that beneﬁt the entire value chain. I want to take this opportunity to thank our employees, customers and stakeholders for their trust and excellent cooperation in 2022! The Alma team is in good shape to take on the challenges presented by 2023. I hope you enjoy reading our Annual Report. As usual, all of the photo models are Alma Medians from various parts of organisation. Kai Telanne President and CEO headwinds in the market were felt par- ticularly by the Alma Talent segment, which performed well considering the circumstances. The segment’s revenue decreased by 3.3%. A new milestone was reached in digital business, which grew by 3 percentage points to 59% of the seg- ment’s total revenue. The development of digital services was strong, although advertising growth slowed towards the end of the year. The segment’s digital housing transaction service has achieved a strong foothold in Finland. Another strategically signiﬁcant success was the growth of 14.0% in Alma Talent Services’ continuously invoiced services, which was driven by growth in revenue from busi- ness information, law- related services and marketplaces, among other areas. There was strong interest in news about the economy. According to the Finnish National Readership Survey, the weekly Talouselämä had the largest audience among ﬁnancial magazines in its various channels with a total reach of 587,000, representing an increase of 81,000 read- ers. Tekniikka&Talous gained as many as 129,000 new readers, with new digital subscriptions driving an increase of 43% in readership. The segment is developing a strong and integrated service portfolio to comple- ment its proﬁtable media business, and it is focusing on the development of digital information and content services as well FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 4ANNUAL REPORT 2022 SUSTAINABILITY REPORT YEAR 2022 309 MEUR Revenue 444 tCO 2 e Scope 1 and Scope 2 emissions 1,679 excluding telemarketers Number of employees as of 31 December 2022 73 MEUR 24% 0.88 EUR 46% Adjusted operating proﬁt Adjusted operating proﬁt % Earnings per share Equity ratio Key ﬁgures 81% Share of digital business of revenue 2.4 -1.8 -8.0 19.6 12.1 -10 -5 0 5 10 15 20 25 2018 2019 2020 2021 2022 Reported Target-level 5 % % Revenue growth 0.0 0.3 -0.2 2.3 1.6 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 2018 2019 2020 2021 2022 Reported Target-level <2.5 Net Debt / EBITDA ratio 18.7 19.8 19.7 22.2 23.8 0 5 10 15 20 25 30 2018 2019 2020 2021 2022 Reported Target-level 25 % % Adjusted operating profit margin Alma Media’s key ﬁgures and the performance indicators monitored with regard to the Group’s long- term strategic targets. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 5ANNUAL REPORT 2022 SUSTAINABILITY REPORT YEAR 2022 39% in 2022 47% in 2022 Our return on equity was Marketplaces share of revenues was Alma Media in brief Alma Media operates in 11 European countries Alma Media is a highly innovative media company focusing on digital services and journalistic content. The company builds sustainable growth from media to services, providing content and services that beneﬁt users in their everyday lives, work and leisure time. Our products are leading media and service brands in their respective ﬁelds. Our best-known brands include Kauppalehti, Talouselämä, Iltalehti, Nettiauto, Etuovi.com and Jobly. Alma Media has employees in 11 European countries. In Finland, our business operations include ﬁnancial and professional media, national consumer media, digital consumer and business services, training and the publishing of professional literature. Alma Media’s international business in Eastern Central Europe, Sweden and the Baltic countries consists of recruitment services and an online marketplace for commercial properties. Sustainability is part of day-to-day work at Alma Media. The most signiﬁcant sustainability impacts of Alma Media’s business are related to the media con- tent published by the company and digital services as enablers of responsible choices by consumers and professionals. A high standard of data security and data privacy and the responsible processing of data are important cornerstones of our business. The themes of our sustainability efforts include cre- ating a better future for young people, good working life and climate change mitigation. Alma Media’s share is listed on Nasdaq Helsinki. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 6ANNUAL REPORT 2022 SUSTAINABILITY REPORT YEAR 2022 Why invest in Alma Media? Juha Nuutinen, Chief Financial Ofﬁcer, Alma Media 1. Successful digital transformation Our strategic focus has been on creating proﬁtable digital growth and we have a strong track record of creating proﬁtable growth. We have made excellent prog- ress in our transformation from business relying on the printed newspaper to a digital media, marketplaces and service company. Digital business now accounts for 80% of our revenue. Our digital busi- ness models are cost-efﬁcient and scal- able and they have enabled the expan- sion into additional services in various verticals, such as recruitment services, housing and the automotive segment. The use of digital business models and data has enabled us to strengthen syn- ergies between media, the marketplaces business and digital services. 2. 3. Leading market position and brands Our products are the leading media and service brands in their respective target groups and they have a strong market position. In the recruitment business, we are the market leader in several countries in Eastern Central Europe. In Finland, our ﬁnancial media Kauppalehti and Talouselämä, and our national news media brand Iltalehti, have a combined reach of approximately 80% of all Finns. Our services include the leading hous- ing and automotive marketplaces Etuovi. com, Nettiauto and Autotalli.com. In addition, we offer professionals and businesses a comprehensive range of content related to company information, real estate information, law, ﬁnancial management, competence, leadership and marketing. For advertisers, we offer Finland’s largest digital advertising network. Solid ﬁnancial position Our cost-efﬁcient business model does not tie up a lot of capital. Our agile business model and proﬁtable growth provides us with a strong ﬁnancial position in spite of an increase in debt due to acquisitions. Our return on equity was nearly 39% in 2022 and our liquidity is good. Alma Media’s good dividend payout capacity is based on the Group’s ability to generate strong and stable cash ﬂow. Our goal, on average, is to distribute more than half of our proﬁt for each ﬁnancial year as dividends. 0 2 4 6 8 10 12 14 Share price development EUR FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 7ANNUAL REPORT 2022 SUSTAINABILITY REPORT YEAR 2022 Alma Media applies a 30-day silent period before the publication of the ﬁnancial statements bulletin, half- year reports and interim reports. Up-to-date information on Alma Media and the ﬁnancial calendar is available online at www.almamedia.ﬁ/en/investors. Important dates related to the Annual General Meeting and dividend payment in 2023 23 March Record date for the Annual General Meeting 4 April Annual General Meeting 5 April Proposed ex-dividend date 6 April Proposed record date of dividend payment 17 April Proposed dividend payment date Information for shareholders ALMA MEDIA AS AN INVESTMENT Annual General Meeting Alma Media Corporation’s Annual Gen- eral Meeting (AGM) will be held in the Grand Ballroom of the Scandic Grand Central Helsinki at the address Vil- honkatu 13, FI-00100 Helsinki, on 4 April 2023 at 12:00 noon EET. The reception of registered participants and the distri- bution of voting slips will commence at 11:00 a.m. Attendance Shareholders may also exercise their voting rights by voting in advance. Shareholders who have registered for the Annual General Meeting can follow the Annual General Meeting online. In- structions for watching the online stream are available on the company’s website at https://www.almamedia.ﬁ/en/investors/ governance/general-meeting/2023/. It Key information about Alma Media’s share MARKET Nasdaq Helsinki Ltd SECTOR Media TRADING CODE ALMA ISIN CODE FI0009013114 2022 MARKET CAPITALISATION MEUR 774.4 HIGH EUR 11.80 LOW EUR 7.78 CLOSING EUR 9.40 is not possible to ask questions, make counter-proposals or vote via the online stream, and following the meeting via the online stream is not considered par- ticipation in the Annual General Meeting or exercise of shareholder rights. Participants may register for the AGM from 9:00 a.m. (EET) on 13 March 2023. The Board of Directors’ dividend proposal Alma Media’s Board of Directors propos- es to the Annual General Meeting that a dividend of EUR 0.44 per share be paid for the ﬁnancial year 2022. The dividend will be paid to shareholders who are registered in Alma Media Corporation’s shareholder register maintained by Euroclear Finland Ltd on the record date, 6 April 2023. Financial reporting calendar in 2023 16 February Financial Statements Bulletin 2022 21 April Interim Report January–March 2023 19 July Half-Year Report January–June 2023 19 October Interim Report January–September 2023 FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 8ANNUAL REPORT 2022 SUSTAINABILITY REPORT YEAR 2022 Report by the Board of Directors FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 9ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Drivers of change in the operating environment SLOWING ECONOMIC GROWTH • Slowing growth in Alma Media’s operating countries • The impacts of high inﬂation, ener- gy prices and market interest rates on consumer purchasing power • Long-term structural challenges in the Finnish economy CHANGING CONSUMER BEHAVIOUR • Digitalisation changes consumer behaviour permanently • Increasing expectations of conve- nience, time saving and security with regard to the digital experi- ence and e-commerce • Corporate sustainability plays a key role TECHNOLOGY AND DATA • Increasing signiﬁcance of tech- nology and automation across all businesses and processes • Data ownership and data-driven development as key drivers of business success • Intense global competition for talent • Cyber security and data protec- tion are increasingly important due to consumer expectations, regulatory requirements and the deteriorating global security situation REGULATION • The EU's expanding data regula- tion imposes stringent require- ments on businesses utilising data. • The development of regulations at the EU level requires continuous monitoring, reporting and actions from companies • The growing popularity of digital services continuously increases the amount of data used RECRUITMENT • A growing shortage of skilled pro- fessionals • Increasing workforce mobility • Employers increasingly try to reach passive jobseekers • The use of freelancers and leased employees is on the rise HOUSING • Rental housing becomes increas- ingly common • The housing ecosystem becomes digital and the use of electronic transactions increases • Marketplaces evolve from listing services to platforms for housing transactions and services • In construction and housing, re- ducing the carbon footprint and sustainable development contin- ues to increase in signiﬁcance • Higher inﬂation and market inter- est rates have a negative impact on the housing transaction vol- ume and consumer conﬁdence CARS AND MOBILITY • Digitalisation changes mobility and the automotive trade • Alternative fuel vehicles grow in signiﬁcance in the automotive trade • The sharing economy grows in this area • Marketplaces evolve to offer a wider selection of services • Component availability issues cause disruptions in the supply chains for new cars MEDIA • Paid content grows in popularity • The need for reliable, fact-based information continues to grow • Competition for consumers’ time and money intensiﬁes in the ad- vertising market • News media production becomes more data-driven and automa- tion-driven STRUCTURAL CHANGE IN DIGITAL MARKETING AND SALES • Digital platforms take on a growing role in commerce, throughout the sales and marketing ecosystem • Technology providers take a growing slice of the cake of digital advertising • New forms of digital advertising, such as content marketing, videos and visual search, are increasingly effective in marketing TENSIONS • Russia’s invasion to Ukraine has led to a Europe-wide energy crisis • There is high uncertainty about political and economic develop- ments and forecasting is difﬁcult FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 10ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Description of the operating environment Market situation in the main markets According to Kantar TNS, the total ad- vertising volume in Finland increased to MEUR 1,328 in 2022 (MEUR 1,276). The total volume exceeded the pre-pandem- ic level of 2019. Advertising sales declined by 7.2% in printed newspapers and by 11.3% in mag- azines, but increased by 4.5% in online media. The industries with the largest in- creases in media advertising were tour- ism and transport, telecommunications services, the ﬁnancial sector and retail. Between December 2021 and Decem- ber 2022, brand advertising declined by 8.3%, retail advertising by 3.7%, classiﬁed advertising by 7.9% and job advertising by 26.6%. In terms of volume, the market for after- noon papers in Finland declined by 7.7% (-9.5%). The effects of Russia’s war of aggression and dwindling economic growth were clearly reﬂected in the operating envi- ronment in the fourth quarter of 2022. The European economy was adversely affected by sanctions, supply chain dis- ruptions and problems associated with the availability of raw materials, among other things. The prices of energy, raw materials and food continued to rise quickly, while market interest rates rose sharply. Combined, these developments have lowered consumer conﬁdence, household purchasing power, consump- tion and economic growth. However, pandemic-related restrictions in Europe were eased in the early part of the year and eventually lifted, which helped stim- ulate activity in the service sector. In December, The European Central Bank (ECB) estimated that economic growth in the eurozone was 3.4% on av- erage in 2022, but expected it to slow to only 0.5% in 2023. It estimated that GDP will shrink slightly both in the last quar- ter of 2022 and the ﬁrst quarter of 2023, as disruptions in energy imports due to the war have continued throughout the economy. According to the forecast of the ECB, the average annual inﬂation rate for last year was 8.4%. This year, it is expected to slow to 6.3% and further to 3.4% in 2024. In addition to Finland, Alma Media’s main markets are the Czech Republic and Slovakia in Eastern Central Europe. The European Commission published its latest GDP forecasts on 13 February 2023. According to the forecast, Finnish REVENUE MEUR 2022 Q1–Q4 2021 Q1–Q4 Change % Alma Career 109.8 82.2 33.6 Alma Consumer 104.1 94.5 10.2 Alma Talent 96.5 99.7 -3.2 Segments total 310.4 276.4 12.3 Non-allocated operations -1.6 -0.9 69.7 Total 308.8 275.4 12.1 144.6 107.8 56.3 Marketplaces Media Services Revenue split 2022 MEUR Finland, 64% (5.2%) Croatia, 3% (41.8%) Sweden, 2% (10.3%) Slovakia, 6% (32.4%) Baltics, 4% (-13.0%) Czech Rep., 21% (38.6%) Other, 1% (28.2%) Revenue split geographically 2022 FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 11ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS ADJUSTED ITEMS MEUR 2022 2021 Alma Career Restructuring -0.2 Gains (losses) on the sale of assets 6.2 Alma Consumer Items recognised through proﬁt or loss arising from business acquisitions -0.4 Gains (losses) on the sale of assets 0.2 Alma Talent Restructuring -0.1 Gains (losses) on the sale of assets 0.5 0.0 Non-allocated Transaction costs of divested and acquired businesses -4.1 Gains (losses) on the sale of assets 0.2 Adjusted items in operating proﬁt 6.6 -4.3 Adjusted items in proﬁt before tax 6.6 -4.3 ADJUSTED OPERATING PROFIT/LOSS MEUR 2022 Q1–Q4 2021 Q1–Q4 Change % Alma Career 42.5 30.0 41.7 Alma Consumer 24.4 23.9 1.8 Alma Talent 19.7 20.6 -4.0 Segments total 86.6 74.5 16.2 Non-allocated operations -13.2 -13.4 1.6 Total 73.4 61.1 20.2 GDP growth in 2022 was 2.0% and will slow to 0.2% this year; the Czech Repub- lic’s growth of 2.5% will slow to 0.1% and Slovakia's growth rate of 1.7% will slow to 1.5%. The Commission estimates that, in 2023, the unemployment rate in Finland will be 7.2%, 3.3% in Czechia and 6.4% in Slovakia. Group revenue and result in 2022 Alma Media’s revenue grew by 12.1% to MEUR 308.8 (275.4). Acquired and divest- ed businesses had an effect of MEUR -1.0 on revenue. Organic growth, excluding acquisitions and divestments, was 12.8%. The growth of revenue was attributable to the strong growth of recruitment demand, acquisitions, and the growth of digital advertising. Adjusted operating proﬁt was MEUR 73.4 (61.1), or 23.8% (22.2%) of revenue. Operat- ing proﬁt was MEUR 80.0 (56.8), or 25.9% (20.6%) of revenue. The adjusted items in 2022 consisted of gains recognised on business sales, the divestment of shares in the associated company Bolt Group Oy, and operational restructuring. The adjusted items in the comparison period were related to gains and losses on the sale of assets and transaction costs related to acquisitions. Total expenses increased by 7.2% to MEUR 236. The increase in expenses was attributable to acquisitions, higher investments in digital business develop- ment, as well as higher marketing and employee expenses. Depreciation and impairment included in the total expens- es amounted to MEUR 17.2 (16.7). Proﬁt for 2022 came to MEUR 71.9 (44.3). Earnings per share were EUR 0.88 (0.53). Revenue increased by 12.1% FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 12ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Balance sheet and ﬁnancial position At the end of December 2022, the consol- idated balance sheet stood at MEUR 495.2 (518.4). The Group's equity ratio at the end of December was 45.8% (34.7%), and equity per share was EUR 2.48 (1.99). Cash ﬂow from operating activities in 2022 was MEUR 79.2 (75.6). Cash ﬂow from operating activities improved year-on-year thanks to the improved operating proﬁt and in spite of the increase of working capital. Cash ﬂow after investments and before ﬁnancing was MEUR 76.2 (-162.3) in 2022. In December 2021, Alma Media signed a new MEUR 200 ﬁnancing arrangement. This replaced the temporary ﬁnancing agreement that had been in place for ﬁ- nancing acquisitions. The new agreement has a maturity of 36 months. Repayments of MEUR 60 on long-term loans were made in 2022. The new ﬁnancing arrange- ment also includes a MEUR 30 revolving credit facility (RCF). The facility will be used for the Group's general ﬁnancing purposes, and it was entirely unused on 31 December 2022. The revolving credit facility has a maturity of 48 months. The ﬁnancing arrangement includes the usual covenants concerning the equity ratio and the ratio of net debt to EBITDA. The Group met the covenants on 31 December 2022. -4.5 % 109.2 % 69.3 % -9.1 181.8 142.6 -100.0 % -50.0 % 0.0 % 50.0 % 100.0 % 150.0 % 200.0 % 250.0 % Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 MEUR Gearing Interest-bearing net debt Interest-bearing net debt and gearing, including discontinued operations 15.3 24.5 17.6 56.0 75.6 79.2 0 20 40 60 80 100 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 MEUR Net cash flow from operating activities Net cash flow from operating activities, rolling 12 months Net cash flow from operating activities, MEUR, including continuing and discontinued operations Alma Media has a commercial paper pro- gramme of MEUR 100 in Finland. Of the commercial paper programme, MEUR 2 had been used on 31 December 2022. At the end of 2022, Alma Media's inter- est-bearing debt amounted to MEUR 172.7 (233.7). Interest-bearing net debt totalled MEUR 142.6 (181.8). Alma Media had MEUR 0.2 in ﬁnan- cial assets created in conjunction with business combinations measured at fair value and recognised through proﬁt or loss, and MEUR 9.9 in ﬁnancial liabilities measured at fair value and recognised through proﬁt or loss. Alma Media signed an interest rate derivative agreement in December 2021. The agreement is a four-year ﬁxed inter- est rate agreement that will commence in December 2023. The nominal value of the derivative is MEUR 50. The positive fair value change of MEUR 5.2 generated by the derivative in 2022 is recognised in ﬁnance income. Capital expenditure Alma Media Group’s capital expenditure in 2022 totalled MEUR 18.3 (247.1). The capital expenditure consisted of the acquisition of the Toimitilat.ﬁ business, normal operational and replacement investments, and increases in IFRS 16 lease liabilities. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 13ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Research and development costs The Group’s research and development costs in 2022 totalled MEUR 7.6 (MEUR 4.6). MEUR 5.6 (MEUR 3.6) was recognised in the income statement, and develop- ment costs of MEUR 1.9 (MEUR 1.0) were capitalised on the balance sheet in 2022. There were capitalised research and development costs totalling MEUR 3.7 (MEUR 2.2) on the balance sheet on 31 December 2022. Business segments in 2022 Alma Media’s reportable segments consist of Alma Career, which focuses on the recruitment business and recruit- ment-related services in Eastern Central Europe and Finland; Alma Consumer, which focuses on the consumer media and marketplaces business, and Alma Talent, which provides ﬁnancial media and services aimed at professionals and businesses; and. Centralised ser- vices produced by the Group’s parent company, as well as centralised sup- port services for advertising and digital sales for the entire Group, are reported outside segment reporting. The Group’s reportable segments correspond to the Group’s operating segments. Alma Career The Alma Career segment's revenue increased by 33.6% to MEUR 109.8 (82.2) in 2022. Revenue and proﬁtability were at record-high levels due to the strong demand for recruitment services and added-value services related to recruit- ment. In 2022, total expenses increased by 28.6% to MEUR 67.4 due to higher em- ployee and ICT expenses. In addition, marketing investments were signiﬁcantly increased, particularly with regard to the acquisition of visitor trafﬁc to recruit- ment portals. Costs were also increased by the high level of inﬂation in the seg- ment's key operating countries. Adjusted operating proﬁt was MEUR 42.5 (30.0) in 2022. The adjusted operating proﬁt was 38.8% (36.6%) of revenue. The segment's operating proﬁt was MEUR 48.5 (30.0). The adjusted items in the re- view period were related to a capital gain recognised on the sale of shares in the associated company Bolt Group Oy and restructuring of operations. No adjusted items were reported during the compar- ison period. Alma Consumer The Alma Consumer segment's revenue grew by 10.2% to MEUR 104.1 (94.5) in 2022. Acquired and divested businesses had a net effect of MEUR 4.5 on revenue growth. Organic revenue growth was 5.5%. Digital business accounted for 82.7% (81.0%) of the segment's revenue. In the housing business area, revenue increased by 11.5% in 2022. Good de- velopment in all areas contributed to growth. Housing systems and advertising on the Etuovi.com and Vuokraovi.com services grew. There were 0.5% fewer active listings for residential properties for sale on the Etuovi.com service when compared to the comparison period. Searches, i.e. the demand for residential properties for sale, decreased by 17.6% from the comparison period; particularly after the ﬁrst quarter, the market took a downward turn due to factors including higher market interest rates and declin- ing consumer conﬁdence. The number of new sales listings increased by 2.6%. On the Vuokraovi.com service, the num- ber of searches for rental apartments declined by 5.2%, the number of active e-mail alert subscriptions declined by 8.4%, and the number of listings on the service decreased by 0.8% from the previous year. The growth in revenue from the auto- motive, mobility and comparison service business areas was mainly attributable to the acquisition of Nettix Oy. Revenue from media and media-related services increased by 8.3%. Comparable digital advertising grew substantially, by MEUR 2.4 (8.2%). Retail industry boosted the growth of advertising in particular. The segment's total expenses increased by 12.4% to MEUR 79.8 (71.0). The increase in expenses was attributable to acquisi- tions, investments in product develop- ment and marketing, and a signiﬁcant increase in printing expenses. The segment's adjusted operating proﬁt was MEUR 24.4 (23.9), or 23.4% (25.3%) of rev- enue. The segment's operating proﬁt was MEUR 24.6 (23.5). The adjusted items in the review period were related to proﬁt recognised on the sale of a business. The adjusted items in the comparison period were related to losses on the sale of a business. Alma Talent The Alma Talent segment's revenue declined by 3.2% to MEUR 96.5 (99.7) in 2022. The divestment of business opera- tions in the Baltic countries had an effect of MEUR 5.4 on the decrease in revenue. Comparable revenue increased by 2.4%. Record-high revenue and proﬁtability for Alma Career FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 14ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Digital business accounted for 59.0% (55.4%) of the segment's revenue. Talent Media's content revenue grew by 2.3%, which was attributable to a 9.8% increase in digital content revenue, ex- ceeding the 4.2% decline in print media revenue. Advertising declined by 3.5%, which was due to a sharp slowdown in listing advertising from the previous year, among other things. The revenue of Alma Talent services was on a par with the previous year. Growth was achieved in the continuously in- voiced company information and law-re- lated services as well as in the sales of marketplaces. Revenue declined in the book and training business. Adjusted op- erating proﬁt increased by 1.2% to MEUR 7.4 (7.3). Digital business represented 82.9% (83.2%) of Alma Talent’s services. Revenue from direct marketing, exclud- ing the effect of divestments, was on a par with the comparison period. The segment’s adjusted total expenses amounted to MEUR 76.8 (79.6). The Alma Talent segment's adjusted operating proﬁt was MEUR 19.7 (20.6) and operat- ing proﬁt MEUR 20.1 (20.5). The adjusted items in the review period were related to operational restructuring. The adjust- ed items in the comparison period were related to a loss on a sale. Alma Media’s strategy Alma Media creates sustainable growth by taking advantage of the opportunities presented by the digital transformation. The objective is to increase sharehold- er value through revenue growth and improved proﬁtability. Alma Media is developing and expanding its current business operations and seeking growth opportunities in new businesses and markets. Strategy implementation during the review period Alma Media’s strategy during the year under review included responding to the changes in media consumption and the demand for digital service by providing content and services that are of value to users in their daily life, work and free time. The strategic priorities included growing the marketplaces business in Finland and internationally, expanding the Group’s professional media and services aimed at professionals as well as developing national multi-channel consumer media and services. The digital transformation strategy of recent years has been successful: the majority of the company's revenue is now derived from digital sources and the share of digital business has already exceeded 80%. The marketplace busi- ness accounts for nearly half of revenue, the media business for about a third and services for about a ﬁfth. In the media business, the digital transformation from print to digital media continues. With regard to the marketplace and service business, development is moving to the next level and towards more advanced trading platforms. The trend of digitalisation continues and is driven by the development of technology and the change in consumer behaviour. Digital business is evolving in response to the expectations of service users. Competition continues to in- crease, as more and more international technology giants and new market-dis- rupting operators challenge local oper- ators. Alma Media is preparing for changes in the market and will continue to im- plement the three focus areas of the strategy: 1) the digital transformation, 2) the growth of digital business and 3) internationalisation. Our goal is to strengthen our current business in recruitment, professional media and services as well as consumer media and services. Users are increas- ingly interested in online services and trading, even when it comes to larger household purchases. With the digitalisation of purchasing processes, we are taking a strategic step towards developing our marketplaces from classiﬁed advertisement listing ser- vices to advanced digital platforms. The goal is to help both our end users and our B2B partners to easily and smoothly interact online, and we also aim to offer additional services at different stages of the transaction process. Examples of these new services in terms of mobility include online paperwork and electronic payments in the car trade, the “Helpot Kaupat” (“Easy transaction”) model that can be used with a smartphone, and the digital auction of used cars that will start in the ﬁrst quarter of 2023. Similar examples in terms of housing include the OviPRO service package, complete electronic tools for housing transactions, 80% of Alma Media’s revenue is derived from digital business FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 15ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS and the Asuntoneuvos service, which provides tools for the digitalisation of lease management and up-to-date market information to support housing investment. We are aiming for market leadership in the areas of recruitment, housing and real estate, as well as automotive and mobility. We will diversify revenue streams in existing service areas and complement our offering with new, synergistic services. We will continue to move forward on the path of internation- alisation in the recruitment business and also look for new opportunities in the current markets. In addition to organic development, growth will be accelerated through acquisitions. An effective response to intensifying competition and a changing operating environment requires active cooperation and the sharing of infor- mation within the Group and within industries. We have launched the Career United integration programme with the aim of accelerating growth and innova- tion and securing the market positions of the Alma Career businesses as leading recruitment services. The cooperation between the segments and the busi- nesses in Finland will continue and syn- ergy will be sought from joint advertising sales, data and technology know-how and audience growth. Economic growth is slowing in our operating countries The war in Ukraine has hampered eco- nomic development throughout Europe, and growth has slowed down our operating countries. Economic growth in our operating countries is expected to weaken, and, in some countries, even a recession is expected in 2023. Geopo- litical risks have also increased in our operating areas. There is signiﬁcant un- certainty about political and economic developments and forecasting is difﬁ- cult. Although long-term trends, such as digitalisation, support the development of our business throughout the strategy period, the company prepares for times of uncertainty and various scenarios of weakening economic growth through careful planning and risk management. Long-term ﬁnancial targets The Group’s long-term ﬁnancial targets, set by the Board of Directors, are relat- ed to business growth, proﬁtability and solvency. They are based on our view of changes in the operating environment, the competitive landscape and the prog- ress of the transformation strategy. The long-term ﬁnancial targets are as follows: – Growth: annual revenue growth in ex- cess of 5% – Proﬁtability: adjusted operating proﬁt margin in excess of 25% – Solvency target: net debt/EBITDA less than 2.5 Changes in Group structure In December 2021, Alma Media’s subsidi- ary Alma Media Finland Ltd agreed to sell the online dating service E-kontakti to the City Digital group. The business was transferred to the new owner on 1 Jan- uary 2022. The transaction resulted in a capital gain of MEUR 0.2. Alma Media Corporation’s subsidiary Alma Career Oy completed the sale INTERNATIONALISATION • Expanding to new geographical regions to accelerate growth • Expanding business operations in the current geographical regions TRANSFORMATION OF THE CORE BUSINESS • Further expansion of operations from media to marketplaces and digital services • Developing marketplaces towards digital commerce platforms • Strengthening cooperation and synergies within the Group and the business segments DIGITAL GROWTH • Developing new revenue streams and diversifying revenue streams in the current service areas • Expanding the value chain to new business areas that complement the existing businesses FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 16ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS of its share in its associated company, the Finnish stafﬁng services provid- er Bolt Group Oy. The transaction was announced on 21 February 2022 and it was completed on 1 April 2022 after the approval of the Finnish Competition and Consumer Authority. The transaction resulted in a capital gain of MEUR 6.2, which was treated as an item recognised through proﬁt or loss and as an adjusted item in the second quarter. In April 2022, Alma Talent Oy’s subsidiary Suoramarkkinointi Mega Oy agreed to sell its shareholding in Muugimeistrite A/S, corresponding to 80% of the total share capital, to the company’s acting management. The transaction resulted in a capital gain of MEUR 0.5. In May 2022, the share capital of Netello Systems Oy was transferred entirely to Alma Media’s ownership. Alma Media previously held a 60% stake in the com- pany. In December 2022, Alma Talent Oy, a subsidiary of Alma Media, agreed to acquire the business of the rental com- mercial property marketplace Toimitilat. ﬁ from Talso Oy. The transaction was carried out as a business acquisition on 1 January 2023. Alma Media’s business segment strategies and their implementation during the year Alma Career • Leading recruitment services in Eastern Central Europe, for example Jobs.cz, Prace.cz, Profesia.sk, Moj- Posao.net and MojPosao.ba and, in Finland, Jobly.ﬁ. • The Seduo online training service and the mobile service Prace za rohem. • Operates in Finland and nine other European countries. The recruitment-related services Jobs.cz, Prace.cz, CV.ee, CVonline.lv, CV.lt, Profesia. sk, MojPosao.net, MojPosao.ba and Jobly. ﬁ are reported under the Alma Career segment. In addition to enhancing job advertising, the segment’s objective is to expand the business into new services to support the needs of job-seekers and employers, such as job advertising-relat- ed technology, digital stafﬁng services and training. In businesses related to job advertising, the focus is on making the services more attractive and enhancing their compet- itiveness by sharing know-how, tech- nology and best practices between the Alma Career countries. Potential areas of growth in the recruitment business include: 1) disruptive technologies and services related to recruitment advertis- ing, 2) digital HR services and 3) profes- sional training. Alma Career Oy is a wholly-owned sub- sidiary of Alma Media Corporation. The clear ownership structure supports the development of Alma Career’s recruit- ment business in accordance with Alma Media’s strategy. Alma Career Oy has operated as the parent company of the Alma Career Group, which includes recruitment companies in 10 European countries. Alma Media’s digital recruitment service Jobly.ﬁ was launched during the review period. It is the ﬁrst in Finland to offer a next-generation service platform that takes into account the applicant’s abilities comprehensively; not only education, skills and experience, but also the ap- plicant’s individual characteristics and social strengths, such as people skills. The service platform’s algorithm-driven classiﬁcation enhances and accelerates recruitment processes by providing in- creasingly targeted search results. Jobly is also the world’s ﬁrst job search service to provide jobseekers with access to independent information on the impact of companies. Alma Career published the Workania.eu job portal for Ukrainian jobseekers in its operating countries. Created through collaboration between Alma Career’s country organisations in the Czech Re- public and Slovakia, the portal collects information on jobs suitable for Ukrai- nians from the recruitment websites of Alma Career’s operating countries and publishes it in a one service. Alma Career Oy sold its 21.05% sharehold- ing in Bolt Group Oy, a Finnish company specialising in temporary stafﬁng for the construction industry, to a newly estab- lished company consisting of the Finnish private equity ﬁrm Vaaka Partners and the operative management and staff of Bolt Group Oy. The Career United project progressed as planned. The project deepens internal cooperation and enhances product de- velopment as well as the more extensive use of common technology and innova- tions. Alma Consumer • Iltalehti, a large Finnish national mul- tichannel news media and diverse lifestyle media that reaches approxi- mately three million Finns each week. • Several marketplaces for consumers and businesses, such as the hous- ing marketplaces Etuovi.com and Vuokraovi.com, as well as the mobility marketplaces Nettiauto.com, Net- timoto.com, Nettikone.com and Autotalli.com. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 17ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS • Proﬁtably growing comparison services, such as Urakkamaailma.ﬁ., Muuttomaailma.ﬁ, Autojerry.ﬁ and Katsastushinnat.ﬁ. • Sales systems for industry custom- ers in the housing and automotive sectors. • Operates in Finland. The segment’s competitiveness is based on the comprehensive reach of me- dia and services as a digital network, the user data pool, and the developing industry verticals in the areas of media, housing, cars and comparison services. The focus of the strategy is on a strong high-reach digital news media with a growing and committed audience and in whose readership the proportion of registered users is growing. Alma Consumer’s goals include strengthening digital services that involve media synergies and make the daily life or free time of consumers easi- er. This will be achieved both organically and through acquisitions. The business segment’s strategy also includes pro- moting the signed-on use of services on a quick schedule (Alma ID) and in- creasing paid editorial content (Iltalehti Plus). Data collected with the consent of registered users also provides versatile targeting solutions for advertising. In line with its strategy, Alma Consumer continues to focus on digital media, digital advertising and digital services. New growth areas in digital advertising include developing the offering and content marketing solutions. As buying processes become increasingly digital, development in the marketplace and service business is moving to the next level and towards more advanced digital trading platforms. The goal is to help customers use online services smoothly and conveniently and to offer additional services at different stages of the trans- action process. Examples of these new services in the Alma Consumer seg- ment in terms of mobility include online paperwork and electronic payments in the car trade, the “Helpot Kaupat” (“Easy transaction”) model that can be used with a smartphone, and the digital auction of used cars that will start in the ﬁrst quarter of 2023. Similar examples in terms of housing include the OviPRO service package, which includes electronic tools for all stages of a housing transaction, and Asuntoneuvos, which provides tools for the digitalisation of lease manage- ment and up-to-date market information. The share capital of Netello Systems Oy, a provider of digital marketing solutions for small and medium-sized enterprises in particular, was transferred entirely to Alma Media’s ownership during the year under review. Alma Media previously held a 60% stake in the company. The E-kontakti online dating service was sold to the City Digital group in December 2021 and the business was transferred to the new owner on 1 January 2022. Alma Talent • Subscription-based digital content media. Alma Talent publishes Fin- land’s leading ﬁnancial media brand Kauppalehti along with other ﬁnan- cial and professional media, includ- ing Talouselämä, Tekniikka&Talous, Tivi, Mediuutiset and Arvopaperi. • Digital information services and marketplace services. Alma Talent Services offers professionals and businesses a comprehensive range of information on companies and real estate as well as content related to law and management. The ser- vices also include business premises marketplaces in Finland and Sweden as well as Digitaalinen Asuntokaup- pa DIAS Oy, which is a platform for digital housing transactions. • Suoramarkkinointi Mega provides telemarketing services to customers in various industries in Finland. • Operates in Finland and Sweden. Alma Talent’s business is divided into two areas: ﬁnancial and professional me- dia in Finland and digital services aimed at companies and professionals. Alma Talent is developing a strong and inte- grated service portfolio to complement its proﬁtable media business and further increase continuous licence-based revenue. Alma Talent Media produces useful con- tent while continuously developing the reader experience of its brands as well as subscription packages and advertis- ing productisation around the brands. Investments in product development help to grow and diversify the audiences of the media brands. Alma Talent Services focuses on the development of digital information and content services as well as new services that make use of data. We are building a next-generation legal information service and expanding the product portfolio to include digital compliance and sales intelligence solutions. We also invest in increasing our market share in the commercial real estate market- places business in the Nordic countries and develop digital housing transaction services in cooperation with banks and real estate agents. The segment seeks new growth op- portunities in scalable and subscrip- tion-based digital services targeted at professionals and companies: • We reﬁne company information into new services to support customers' sales management, FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 18ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS strategic management and risk man- agement processes. We make exten- sive use of the Group’s information content (including news content and signals from ﬁnancial media). • Next-generation legal services compile legal content that is rele- vant to the customer into a single easy-to-use service. The demand for compliance services will increase in the future. • In the commercial premises mar- ketplace business, we will redesign the platform to meet the diverse needs of our customers in Finland and Sweden and expand our digital services to cover the various stages of the end-to-end process. • The digital housing transaction plat- form connects buyers, sellers, real estate agents and banks in a single system. The platform is already used by over 3,000 real estate agents and nearly the entire Finnish mortgage market. Alma Talent owns 80.5% of Digitaalinen asuntokauppa DIAS Oy. During the review period, Alma Talent agreed to acquire the business of the rental commercial property marketplace Toimitilat.ﬁ from Talso Oy on 1 January 2023. During the period under review, Alma Talent Oy’s subsidiary Suoramark- kinointi Mega Oy sold its shareholding in Muugimeistrite A/S, corresponding to 80% of the total share capital, to the company’s acting management. Alma Media Solutions The Alma Media Solutions unit serves advertisers in the development, market- ing and sales of media sales products at the Alma Media level. Its task is to apply itself to customers’ marketing communi- cations challenges and also offer com- prehensive solutions outside the bound- aries of traditional media advertising. The unit’s focus areas include content marketing and data-driven solutions. The strategic choices of Alma Media Solutions include strengthening its posi- tion in the SME advertising market, diver- sifying service production in advertising and improving the customer experience. Alma’s media currently reach millions of Finns every week. Online users consti- tute a network that advertisers can use to target their messaging at the relevant target groups. For example, the use of data and marketing automation makes it possible to recommend relevant and interesting content and subscription products to subscribers and steer users from one Alma network service to anoth- er on a personalised basis. The strategic initiatives are also aimed at improving the customer experience and strengthening user commitment to the Group’s media. Success in the digital transformation of media requires user identiﬁcation and the diverse use of user data. As the use of data improves the personalisation of content, user registration is advan- tageous for both consumers and the business. Alma Media complies fully with data privacy legislation with regard to signing on. Alma ID, a common sign-on system for the readers of Alma Media’s digital content and the users of services, enables smooth and secure switching from one service to another in Alma’s digital network under the single sign-on principle. The single sign-on solution will be expanded to cover all of Alma Media’s services in Finland. The solution allows consumers to manage the collection and use of data related to the use of services. Statement of non-ﬁnancial information This section describes Alma Media’s sustainability-related activities in accor- dance with Chapter 3a of the Finnish Ac- counting Act (non-ﬁnancial information). The Group’s reporting of non-ﬁnancial information includes not only environ- mental, social and ethical perspectives but also the themes of sustainable me- dia, responsible journalism and respon- sible marketing as well as data security and data privacy, which are important aspects of Alma Media’s digital business. The reporting of non-ﬁnancial informa- tion complies, where applicable, with the supplement concerning the report- ing of climate-related information. In sustainability reporting, Alma Media observes the principle of materiality. The Group updated its materiality analysis in autumn 2021 based on an extensive stakeholder survey, individual interviews, industry analyses and expert workshops. More information on the development of sustainability is provided in Alma Me- dia’s Sustainability Report 2022, which is drawn up in accordance with the Global Reporting Initiative (GRI) guidelines and adheres to the Sustainable Accounting Standards Board (SASB) reporting guide- lines where applicable. Description of the business model The company supports the development of democratic society by producing pluralistic, objective and high-quality content as well as by providing useful, secure and reliable digital services for consumers and businesses. Alma Media’s business operations consist of digital marketplaces, media and services. The Group’s reporting segments are Alma Career, Alma Consumer and Alma Talent. Alma Media Group also uses shared functions to pursue synergies between businesses to increase the creation of customer value. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 19ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Digital marketplaces and services con- stitute a key area of Alma Media’s busi- ness. They include services related to re- cruitment, housing, cars and mobility, for example. The customers of Alma Media’s digital services include both companies and consumers. The digital services business model is based on customer fees charged for classiﬁed advertising, fees for increased visibility in classiﬁed advertising, targeted media advertising, service sales and subscription fees and licence fees for the use of information systems. The digital housing transaction platform DIAS serves buyers and sellers in the housing market and it was devel- oped in collaboration with banks and real estate agents. The Group’s other services include information services, training services, event services, digital marketing services and the direct mar- keting business. The media business includes, for exam- ple, the professional and ﬁnancial media and books published by Alma Talent as well as the national consumer media published by Alma Consumer. The media business is based on the reach of the content and the customer and reader relationship between the audience and the media. The strength of this relation- ship can vary from occasional visitors or buyers of single copies to the use of online services as registered users of online services, paying consumers of digital content and long-term subscrib- ers of print publications. Alma Media’s media and services are the best-known brands in their segments in Finland and the Group’s operating coun- tries in Eastern Central Europe. The pop- ularity of these services among users is based on a high level of usability, unique content and the importance of the social or communal dimension. Responding to the needs of local customers is the key to success. In both the service business and the media business, readers and on- line visitors constitute target groups that are characteristic to each brand. These target groups are the basis for advertis- ing sales. These target group contacts are sold to advertisers on a brand-spe- ciﬁc basis and as audience segments in the digital Alma network. Value creation Alma Media’s purpose is to accelerate the sustainable growth of individuals, companies and society. The corner- stones of our strategy are business transformation, digital growth and inter- nationalisation. Alma Media’s business is based on marketplaces, media and services. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 20ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS 2 Value creation model • MEUR 309 in revenue: digital marketplaces, media and services • Enabling sustainable choices for consumers and professionals • Over 80% of revenue from digital sources • MEUR 92.2 per year in compensation • Developing skills, talent and careers • Promoting diversity, equality and inclusion • Adjusted operating profit MEUR 73.4 • Dividends MEUR 36 • MEUR 1.7 in net interest paid to financial institutions • MEUR 83.1 in taxes paid • Defending democracy, freedom of speech and the market economy • Enabling choices • Promoting digitalisation • Co-operation with NGOs • Low emission operations • Accelerating the transition to a low-carbon digital economy. • Invested capital MEUR 389 • Investments MEUR 391 in 2018–2022 • The Alma brand and over 100 content and service brands • Advanced technology • Customer and user data • A carefully selected and well- managed network of business partners • Electricity and water consumption at our offices and data centres • Paper consumption (for print and publishing) Human Talent Customers Employees Investors Society Environment Financial Capital Technology & intellectual Property Business Partners Natural resources RESOURCES IMPACT 2022 BUSINESS MODEL AND SUCCESS DRIVERS SUSTAINABLE DEVELOPMENT GOALS Enriching and fostering strong brands Innovation-driven sustainability Customer retention Talent management Operatinal excellence Good governance Smart capital allocation Digital innovation MARKETPLACES MEDIA SERVICES * Corporate tax, social security contributions and other taxes paid MEUR • The professional skills of 1,700 employees in 11 European countries • Expertise in technology, digital marketing and data FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 21ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Description of the management of non-ﬁnancial information Alma Media has a systematic sustainabil- ity management method that includes the necessary policies, processes, management and organisation as well as competence and communication. The Group develops the sustainabil- ity of its operations with a long-term approach based on its Code of Con- duct, guidelines and commitments, the objectives outlined in its sustainability programme and its SBTi climate targets (Science-Based Targets). Alma Me- dia observes the principles of the UN Global Compact initiative, the Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work and other essential international human rights conventions and recommendations. Alma Media de- velops the sustainability of its operations at various levels of the organisation as part of day-to-day business. The Group Executive Team assesses the sustainability programme regular- ly and the Board of Directors monitors sustainability performance based on the information reported by the manage- ment. Unit-level management teams and key individuals also play a key role by making sustainability-related decisions in the context of developing operations and services. In 2022, the Group Execu- tive Team discussed sustainability-relat- ed projects extensively at three strategy meetings and common sustainability-re- lated topics at six other meetings. During the year under review, Alma Media’s Board of Directors discussed the compa- ny’s sustainability programme four times, in connection with interim reporting. Alma Media’s corporate communications coordinates the progress of the sustain- ability programme. The cornerstones of Alma Media’s sustainability programme are proﬁtable growth and a high standard of business ethics, a future-ﬁt workforce, environ- mental responsibility, and responsible media, marketplaces, and digital ser- vices. Targets have been set for each ele- ment of sustainability and their achieve- ment is monitored annually. Based on a materiality assessment, Alma Media’s sustainability programme is linked to nine of the UN Sustainable Development Goals that relate directly to Alma Media’s opportunities to have an impact through its business operations: quality education, gender equality, decent work and economic growth, innovation and procurement, sustainable cities and communities, responsible consumption, climate action, peace and justice, and partnerships for the goals. Our sustainability programme covers nine of the UN Sustainable Development Goals FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 22ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Summary of Alma Media’s key sustainability targets KPI Target Result 2021 Objectives 2023 Responsible journalism: journalism marketing Condemnatory decisions issued by the Council for Mass Media <5 condemnatory decisions issued by the Council for Mass Media regarding Alma Media’s media 2 condemnatory decisions for Iltalehti <5 condemnatory decisions issued by the Council for Mass Media regarding Alma Media’s media Adherence to the International Chamber of Commerce’s guidelines on good marketing practices 0 advertisements in violation of good marketing practices in the Group’s media and services 0 0 advertisements in violation of good marketing practices in the Group’s media and services Ethics in business: employees subcontractors Adherence to Alma Media’s updated Code of Conduct among the Group’s employees and in the subcontracting chain Rate of completion of Code of Conduct training among the Group’s employees 100% of the employees 100% of the employees Most signiﬁcant subcontractors commit to Alma Media’s Code of Conduct 73 per cent of the most signiﬁcant subcontractors completed the company's Code of Conduct training. 90 per cent of the most signiﬁcant subcontractors have completed the company's Code of Conduct training. Data security and data pro- tection Alma Media’s services offer a high standard of data security for users, and customer data is processed in a diligent and legally compliant manner There are no serious data privacy breaches in the services for which the authorities would impose a ﬁne. 0 0 serious data privacy breaches Good employer Alma Media’s QWL (Quality Worklife) employee survey > 83% 83.1% 83% QWL index Environmental responsibility: Own operations (Scope 1 & 2) Subcontracting chain (Scope 3) CO2 emissions arising from the consumption of electricity, district heating and district cooling and the energy consumption of company cars -52% (2019–2030) -9.2% (Scope 1 & 2) -4.3% (Scope 1 & 2) Indirect CO2 emissions caused by the subcontracting chain -14% (2019–2030) +8.2% (Scope 3) -1.23% (Scope 3) A high standard of business ethics Alma Media bears social, economic and environmental responsibility for its oper- ations and does not condone the use of unethical or environmentally or socially unsustainable operating methods by its suppliers and partners. The Group has a zero tolerance policy for corruption, bribery, human rights violations and inhumane working conditions. All of the company’s employees in 11 countries are committed to the Alma Media Code of Conduct and have completed training on the Code of Conduct. During the year under review, 73% of Alma Media’s key subcontractors completed the compa- ny’s new online training for subcontrac- tors on the Supplier Code of Conduct. Alma Media’s employees and stake- holders have access to an anonymous whistleblowing channel for reporting any possibly observed misconduct. Alma Media’s whistleblowing team receives the notiﬁcations and reports them to the Audit Committee of the Board of Direc- tors. During the year under review, the Group was informed of three suspected Code of Conduct violations through the whistleblowing channel. There were no incidents of corruption or anti-competitive behaviour at Alma FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 23ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Media in 2022. The company is also not aware of any ongoing ofﬁcial investi- gations related to Alma Media. During the year under review, Alma Media was not the subject of any reprimands from the authorities or rulings pertaining to non-compliance with laws and regula- tions governing economic, environmen- tal or social responsibility. As a result, there were no ﬁnancial losses arising from legal action. The Group’s executive management, assisted by the legal de- partment, is responsible for the ethical- ity of Alma Media’s business operations. Sustainability is one of the common incentive criteria for Alma Media’s man- agement and employees. Environmental responsibility For two decades, Alma Media has sys- tematically and successfully imple- mented a strategy based on the digital transformation of business. During the past ﬁve years, Alma Media has halved the greenhouse gas emissions arising from its own operations. The production and distribution of digital content and services is not only more environmen- tally friendly but also more cost-efﬁcient compared to print products. At the same time, the transition to low-carbon society has created business opportunities and increased resource efﬁciency. In 2022, digital sources accounted for 80%, or approximately MEUR 250, of Alma Me- dia’s business. The transition from print to digital has been reﬂected in improved proﬁtability and increased adjusted op- erating proﬁt. The Group’s annual capital expenditure under the digital business model has amounted to approximately MEUR 4 on average. In 2018, Alma Media was the third media company in the world to publish ap- proved, science-based climate targets. Thanks to signiﬁcant changes in the business operations, the SBT for 2025 based on the 2016 baseline was achieved ahead of schedule and the company wanted to update and signiﬁcantly tight- en its climate targets. In June 2022, the Science Based Targets (SBT) organisation approved Alma Me- dia’s new science-based climate targets. Alma Media is committed to reducing its absolute Scope 1 and Scope 2 green- house gas emissions by 52 per cent and the emissions of its subcontracting chain by 14 per cent by 2030 compared to 2019. The SBTi initiative aims to limit global warming to 1.5°C. Emission reductions in accordance with Alma Media’s plan will focus particularly on reducing emissions from company cars, district heating and cooling in business premises, and on magazine printing, logistics and ICT pro- curement in the subcontracting chain. The carbon footprint of Alma Media’s own operations is small, and only four per cent of the greenhouse gases arising from the Group arise in the Group’s own operations, while 96 per cent arise in the subcontracting chain. According to the SBTi target set by Alma Media in 2022, the company must reduce its greenhouse gas emissions caused by electricity, district heating, district cooling and fuel consumption by 4.3% annually until 2030. Indirect greenhouse gas emissions from procurement must decrease until 2030 and by 1.2% annually. To improve the reliability and continuity of emission calculations, Alma Media adopted the International Energy Alma Media and the environment Unit 2019 2020 2021 2022 Amount of energy Fuels GJ 6,151 3,946 3,634 3,380 Electricity GJ 7,455 5,991 5,414 5,429 District heating and district cooling GJ 4,955 3,880 6,071 5,423 Emissions Direct emissions (Scope 1) tC0-eq Fuels 420 264 240 217 Indirect emissions (Scope 2) tCO-eq District heating, district cooling and electricity, mar- ket-based 375 291 250 228 District heating, district cooling and electricity, loca- tion-based 494 349 411 386 Share of renewable energy, Scope 1 and Scope 2 28% 36% 49% 53% Share of renewable energy, Scope 2 42% 49% 63% 68% Scope 3 tCO-eq 17,338 13,964 14,996 16,222 FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 24ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Agency IEA’s country-speciﬁc emission coefﬁcients in 2021 for instances where an energy producer-speciﬁc emission factor is unavailable, and emission ﬁg- ures were retrospectively recalculated according to this decision. The ﬁgures for 2019–2022 have also been adjusted to only reﬂect the Group’s continuing op- erations. The reporting of environmental ﬁgures covers all of Alma Media. In 2022, the Scope 1 and Scope 2 emis- sions reported by the company de- creased by 9.3 per cent compared to 2021. Compared to 2019, the baseline year for the SBTi target, the change is -44.1%. The purchasing of zero-emission hydropower electricity continued in Fin- land in 2022 and, for example, the cloud services and telecommunication ser- vices used for data management in Alma Media’s Finnish operations are produced primarily from renewable energy or the emissions are offset. Table on the page 24 describes the environmental indicators, amounts and development of own energy, direct greenhouse gas emissions (Scope 1) and indirect greenhouse gas emissions (Scope 2) in the Group’s continuing operations during the period 2019–2022. The energy consumption of proper- ties controlled by the Group totalled 3,013 MWh of electricity, district heating and district cooling. Renewable ener- gy accounted for 68% of the total. The energy consumption of the cars owned and used by the company decreased by 9.5% compared to the previous year. The decrease in the energy consump- tion of company cars was due to an increase in remote work and remote meetings in business operations as well as the renewal of the car ﬂeet towards a lower-emission, more energy-efﬁ- cient direction. Alma Media calculates the consumption of electricity, district heating and district cooling mainly at the company’s Finnish properties based on the invoices issued by the energy companies. The same practice is used in the other operating countries where consumption data is available. If the data is not available and if energy is includ- ed in the monthly rent for the property, electricity consumption is calculated based on the ﬂoor area. In the business activities in Finland, electricity is hydro- power-generated, emission-free and renewable. With regard to the head ofﬁce in Finland, the procurement of district heating and cooling produced with re- newable energy was continued in 2022. The energy consumption data for Alma Media’s company cars and cars that fall under an unlimited car beneﬁt has been primarily collected from service providers. The calculation of emissions is based on actual energy consump- tion where purchased energy types are multiplied by energy type-speciﬁc emission coefﬁcients for each country of use. Scope 1 emissions consist primarily of carbon dioxide emissions (CO 2 ). When possible, Alma Media utilises the ener- gy supplier-speciﬁc emission ﬁgures in the calculation of Scope 2 emissions using the market-based method. If such ﬁgures are not available, the Group uses the country-speciﬁc IEA emission coef- ﬁcients that are also used as the basis of location-speciﬁc emission calculations. In 2022, the Group’s greenhouse gas emission intensity was 0.26 tCO 2 e per employee. Alma Media calculates its greenhouse gas emission intensity based on its Scope 1 and Scope 2 emis- sions. Scope 2 emissions are calculated using the market-based method. Emis- sions intensity is reported relative to the number of employees. The greenhouse gas emissions caused by the electrici- ty, district heating and district cooling consumption of properties decreased by 9.1% from the comparison year to 228 tCO 2 e, calculated using the mar- ket-based method. Energy consumption is measured using country, type and supplier-speciﬁc emission coefﬁcients. Alma Media’s indirect Scope 3 emis- sions continued on a downward trend during the year as the circulations of print publications continued to decline and consumers switched from print to digital media. The emissions caused by business ﬂights taken by Alma Media employees increased by 177% year-on- year as the pandemic-related travel restrictions were lifted, but the level of emissions was still 37% lower than in 2019. Emissions were decreased by the lower use of services resulting from the reduced utilisation rate of transport services, distribution, aviation emissions and business premises. Alma Media achieved its environmental targets for 2022, with the exception of the Scope 3 emissions of the subcontracting chain. The increase in emissions was due to Alma Media upgraded its climate targets FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 25ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS higher procurement activity relating to the printing of newspapers and mag- azines and the development of digital services, for example. However, even in Scope 3 emissions, the company main- tained a downward trend in line with the long-term target level for the year 2030. The Group’s indirect Scope 3 emissions declined by 9% (1,195 tCO 2 e) compared to 2019. The calculation of emissions associated with the ﬁnal recycling of publications covers all of Alma Media’s newspapers, magazines and books. Alma Media reports the ﬁgures for ongoing business. Following Russia’s invasion of Ukraine in February 2022, Finland and the rest of Europe were hit with an energy crisis. Russia began to blackmail Europe with its energy asset, and during the spring and summer, imports of electricity, wood chips, pipeline gas, coal and oil from Rus- sia ceased. Electricity prices, in particular, were at times very high due to the crisis, but historically high prices were paid for almost all forms of energy. However, the dependence of Finland and Alma Media’s operating countries on natural gas was lower than in the rest of Europe. The appalling war in Ukraine has forced the whole of Europe to innovate and renew itself in the ﬁeld of energy. In addition to improvements in energy efﬁciency, re- newable energy, hydrogen and new tech- nologies have increasingly transformed from a possibility to a reality in almost all of the company's operating countries. In 2023, Alma Media will continue to focus on minimising the carbon footprint of its own operations and reducing emis- sions in its subcontracting chain, as well as on strengthening the climate-friendly impacts of its own operations. Alma Me- dia will continue to require the compa- ny's most signiﬁcant service providers to commit to the climate targets and the implementation of the company's Code of Conduct. The renewal of the compa- ny's car ﬂeet in a lower-emission, more energy-efﬁcient direction will be con- tinued in all operating countries. Alma Media’s operating countries in Eastern Central Europe are also engaged in an active dialogue with the landlords of the premises on the possibilities of ensuring the use of low-emission and renewable energy. Various measures are taken to ensure that cooperation to mitigate cli- mate change, promote sustainable con- sumption and ethical good governance in business is sufﬁciently ambitious, comprehensive and effective. Reporting in accordance with the EU Taxonomy Regulation In order to meet the European Union’s climate and energy targets for 2030 and achieve the objectives of the Europe- an Green Deal, it is essential to direct investments towards sustainable projects and activities. The EU Taxonomy Regulation, which entered into force in 2021, establishes a classiﬁcation sys- tem for economic activities based on their environmental sustainability. This classiﬁcation system primarily speciﬁes required disclosures that help investors and companies make informed deci- sions on environmentally sustainable economic activities. The purpose of the classiﬁcation system, which is referred to as the EU taxonomy, is to identify economic activities that are relevant to climate change and to establish sci- ence-based criteria for these activities to assess the sustainability and eco-friend- liness of the operations of companies. It classiﬁes taxonomy-eligible and taxonomy-aligned activities, which are economic activities that make the most substantial contribution to the achieve- ment of the EU’s climate targets. The EU taxonomy focuses on six environmental objectives: 1. climate change mitigation; 2. climate change adaptation; 3. the sustainable use and protection of water and marine resources; 4. the transition to a circular economy; 5. pollution prevention and control; 6. the protection and restoration of bio- diversity and ecosystems. Reporting obligations for the ﬁnancial year 2022 The Taxonomy Regulation (Article 8) applies to undertakings, such as Alma Media, that are subject to a reporting obligation under the Directive con- cerning the reporting of non-ﬁnancial information (NFRD). Taxonomy regula- tions: Regulation (EU) 2020/852 of the European Parliament and of the Council, the related Delegated Regulation and its annexes (Annex I climate change mitigation and Annex II climate change adaptation). Pursuant to the regulation, Alma Media has an obligation to report as taxonomy KPIs the share of turn- over, capital expenditure and operating expenditure relating to activities that are identiﬁed in the taxonomy as potentially environmentally sustainable economic activities or meet the technical screen- ing criteria of the taxonomy. In accordance with the Taxonomy Reg- ulation, the Commission has produced a list of environmentally sustainable activi- ties and issued Delegated Regulations to specify the technical screening criteria for each environmental objective. The reporting obligations enter into force in several stages according to the schedule set out in the Taxonomy Regulation. The ﬁrst Delegated Regulation on sustain- able activities with regard to the ﬁrst two environmental objectives (1. climate FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 26ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS change mitigation and 2. climate change adaptation) has been published. The classiﬁcation system will be expanded later to cover the reporting obligations relating to the EU’s environmental objec- tives 3 to 6. In the second year of reporting under the Taxonomy Regulation, companies are required to disclose the taxonomy-eligi- ble share of their activities and report on the taxonomy alignment of their taxon- omy-eligible activities. Taxonomy-eligi- ble activities refer to activities that are identiﬁed in the taxonomy, and taxon- omy-aligned activities refer to those taxonomy-eligible activities that meet the technical screening criteria. The technical screening criteria determine whether an activity contributes substan- tially to the achievement of the environ- mental objective in question. An activity can only be classiﬁed as sustainable if the criteria are met. Furthermore, even if an activity meets the technical screening criteria, the reporting entity must ensure that the activity does no signiﬁcant harm to any of the other ﬁve environmental objectives and is in line with the UN Guiding Principles on Business and Hu- man Rights and the OECD Guidelines. Alma Media’s approach to EU taxonomy eligibility and alignment The EU taxonomy and its technical screening criteria are dynamic, and the development of the criteria will continue as part of the development of the EU’s sustainable ﬁnance framework. The de- velopment of the EU taxonomy has ﬁrst prioritised certain economic activities, and not all economic activities have yet been taken into account in the frame- work and its criteria. We reported on our taxonomy eligibility for the ﬁrst time last year and noted that, due to the nature of our operations, the direct emissions caused by our operations, and conse- quently the negative climate change impacts of our own operations, are minor. To determine the taxonomy-eligible share of our operations, we have con- ducted an analysis to assess which of our activities correspond to the economic activities identiﬁed in the taxonomy. The aims of this effort were as follows: a) to identify and assess the Group’s sig- niﬁcant taxonomy-eligible and taxono- my-aligned activities b) to assess the impacts of the identiﬁed economic activities and ensure that they meet the technical screening criteria c) calculate and communicate our tax- onomy-eligible and taxonomy-aligned key performance indicators (KPIs) In the next stage of determining the tax- onomy alignment of our taxonomy-eligi- ble and taxonomy-aligned activities, we will assess whether the activity makes a substantial contribution to at least one environmental objective, meet the technical screening criteria (TSC) for all economic activities as presented in the Taxonomy Regulation, do no signiﬁcant harm to any of the environmental objec- tives (DNSH) and meet the minimum so- cial safeguards (MSS). Our interpretation based on the analysis is that part of Alma Media’s business substantially contributes to the environmental objec- tive of climate change adaptation. With regard to turnover, we have identi- ﬁed the following as taxonomy-eligible and taxonomy-aligned activities: digital advertising relating to the marketplaces business, the training business, book sales, digital advertising relating to the media business, and digital data-driven service solutions that enable emissions reductions in accordance with taxono- my activity 8.2 (data-driven solutions for GHG emissions reductions), 8.3 (pro- gramming and broadcasting activities) and 11 (education). While we have iden- tiﬁed multiple activities as being tax- onomy-eligible and taxonomy-aligned, we have ensured that each service or product produced by the Group is counted only once in the KPI reﬂecting taxonomy- eligible and taxonomy- aligned turnover. At this stage, only those economic ac- tivities that have the greatest need and potential to substantially contribute to climate change mitigation and adaptation are considered to be within the scope of the EU Taxonomy Regulation. As most of Alma Media’s business activities are not yet deﬁned in the EU Taxonomy, they are classiﬁed in the table above as non-eligible. This includes classiﬁed advertising in the marketplaces business, print-based media business, digital comparison ser- vices, the data business, telemarketing and media sales consulting. As regards capital expenditure, our deﬁnition of taxonomy-eligible and taxonomy-aligned capital expenditure covers capital expenditure that is closely linked to taxonomy-eligible and taxon- omy-aligned assets based on turnover and that meet the more detailed spec- iﬁcations concerning the reduction of emissions. Alma Media’s taxonomy- eligible and taxonomy-aligned capital expenditure mainly relates to business premises project and capital expendi- ture on digital advertising sales systems. As regards operating expenditure, our deﬁnition of taxonomy-eligible and FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 27ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS taxonomy- aligned operating expendi- ture covers operating expenditure that aims to reduce environmental emissions and is allocated to research, server, busi- ness premises, motor vehicle or training expenses. Examples of operating expen- diture that we have counted as taxon- omy-eligible and taxonomy-aligned include investments in electric vehicle charging infrastructure and the elec- triﬁcation of the motor vehicle ﬂeet, employee training investments related to climate action and the additional costs of renewable energy purchased by the Group. It should be noted that the deﬁnition of taxonomy-eligible and tax- onomy-aligned operating expenditure is highly speciﬁc and it only includes a very small proportion of the Group’s operat- ing expenditure. Operating expenditure has been deﬁned in accordance with the taxonomy regulations and it includes Alma Media Group’s research and de- velopment expenditure, expenditure on business premises’ energy and renova- tions and the leasing expenses for the motor vehicle ﬂeet. We continuously monitor the develop- ment of the taxonomy regulations and assess – and report on – the taxono- my eligibility and taxonomy alignment of Alma Media’s economic activities accordingly. Alma Media’s taxonomy reporting may change when the ﬁnal technical screening criteria for the four remaining environmental objectives of the taxonomy are completed. In addition to the taxonomy-related activities that have already been identiﬁed, certain other Alma Media activities may be taxonomy-eligible under the four other environmental objectives. Consequently, Alma Media’s taxonomy-eligible and tax- onomy-aligned turnover may increase in 2023, as some of the activities related to the company’s services may be partly covered by the upcoming “Transition to a circular economy” environmental objective. Accounting principles concerning the ﬁnancial KPIs related to the EU taxonomy The taxonomy-related reporting ob- ligations include a description of the accounting principles concerning the ﬁnancial KPIs, including the calcula- tion criteria for the numerator and the denominator. In this section, we dis- cuss how turnover, capital expenditure and operating expenditure have been deﬁned and allocated to the numerator, and describe the calculation criteria for turnover, capital expenditure and operating expenditure included in the denominator. The turnover KPI deter- mines the degree to which the Group’s activities are taxonomy-eligible and tax- onomy-aligned. The capital expenditure and operating expenditure KPIs illus- trate how the Group aims to improve its infrastructure, processes and production lines to become a low-carbon operator or reduce climate emissions. Turnover In determining taxonomy-eligible and taxonomy-aligned turnover, Alma Media includes in the numerator the estimated total turnover of products and ser- vices relating to taxonomy-eligible and taxonomy-aligned economic activities. The denominator corresponds to Alma Media’s total turnover according to the consolidated ﬁnancial statements for 2022. Capital expenditure In determining taxonomy-eligible capital expenditure, Alma Media includes in the numerator capital expenditure on assets relating to taxonomy-eligible and taxonomy-aligned economic activities. The denominator covers increases in tangible and intangible assets during the ﬁnancial year, as reported in Alma Media Group’s ﬁnancial statements for 2022. Operating expenditure In determining taxonomy-eligible oper- ating expenditure, Alma Media includes in the numerator the direct operating ex- penditure associated with products and services relating to taxonomy- eligible economic activities. The denominator covers direct expenditure relating to re- search and development, building reno- vations, leases, maintenance and repairs, and other direct expenses associated with tangible and intangible assets FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 28ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Table 1: Turnover Contributes substantially to an environmental objective Does no signiﬁcant harm to any environmental objective Economic activities Codes Turnover FY2022 Turnover FY2021 Share of turnover Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Climate change mitigation Climate change adaptation The sustainable use and pro- tection of water and marine resources The transition to a circular economy Pollution prevention and control The protection and restoration of biodiversity and ecosystems Adherence to the UN Guiding Principles on Business and Human Rights and the OECD Guidelines Share of taxonomy-aligned turn- over of total turnover, 2022 Share of taxonomy-aligned turn- over of total turnover, 2021 Enabling activity Transitional activity MEUR MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Incl. E T Taxonomy-eligible and taxonomy-aligned Data-driven solutions for GHG emissions reduc- tions 8.2 7.7 6.8 2.5 0 2.5 0 0 0 0 Y Y Y Y Y Y Complies 2.5 2.5 N/A Programming, broad- casting and other media activities 8.3 77.5 68.9 25.1 0 25.1 0 0 0 0 Y Y Y Y Y Y Complies 25.1 25.0 E Education 11.1 15.0 13.7 4.9 0 4.9 0 0 0 0 Y Y Y Y Y Y Complies 4.9 5.0 E Total 100.1 89.4 32.4 0 32.4 0 0 0 0 Y Y Y Y Y Y Complies 32.4 32.5 Taxonomy-eligible but not taxonomy-aligned No economic activities 0 0 0 0 0 0 0 0 0 0 0 Taxonomy-eligible share 100.1 89.4 32.4 0.0 32.4 0 0 0 0 Y Y Y Y Y Y Complies 32.4 32.5 Non-eligible share Marketplaces, classiﬁed advertising 122.3 96.4 39.6 Print media 41.2 43.2 13.3 Other operations 45.1 46.3 14.6 Total 208.6 186.0 67.6 Total turnover 308.8 275.4 100 FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 29ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Table 2: Capital expenditure Contributes substantially to an environmental objective Does no signiﬁcant harm to any environ- mental objective Economic activities Codes Capital expenditure FY2022 Capital expenditure FY2021 Share of capital expenditure Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Climate change mitigation Climate change adaptation The sustainable use and protection of water and marine resources The transition to a circular econ- omy Pollution prevention and control The protection and restoration of biodiversity and ecosystems Adherence to the UN Guiding Principles on Business and Human Rights and the OECD Guidelines Share of taxonomy-aligned capital expenditure of total capital expen- diture, 2022 Share of taxonomy-aligned capital expenditure of total capital expen- diture, 2021 Enabling activity Transitional activity MEUR MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Incl. % % E T Taxonomy-eligible and taxonomy-aligned Investments relating to activities in accordance with item 8.3 of the taxon- omy regulations 8.3 0.8 0.1 6.0 0.0 6.0 0 0 0 0 Y Y Y Y Y Y Complies 6.0 1.7 E Investments in business premises solutions that reduce climate emissions 3.4 0.0 25.4 0.0 25.4 0 0 0 0 Y Y Y Y Y Y Complies 25.4 0.0 E Total 4.1 0.1 31.4 0.0 31.4 0 0 0 0 Y Y Y Y Y Y Complies 31.4 1.7 E Non-eligible Other operations 9.1 6.0 68.6 Total 13.2 6.1 100 FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 30ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Table 3: Operating expenditure Contributes substantially to an environmental objective Does no signiﬁcant harm to any environmen- tal objective Economic activities Operating expenditure FY2022 Operating expenditure FY2021 Share of operating expenditure Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Climate change mitigation Climate change adaptation The sustainable use and pro- tection of water and marine resources The transition to a circular econ- omy Pollution prevention and control The protection and restoration of biodiversity and ecosystems Adherence to the UN Guiding Principles on Business and Human Rights and the OECD Guidelines Share of taxonomy-aligned operating expenditure of total operating expenditure, 2022 Share of taxonomy-aligned operating expenditure of total operating expenditure, 2021 Enabling activity Transitional activity MEUR MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Incl. % % E T Taxonomy-eligible and taxonomy-aligned Share of research and development costs recognised as expenses and relating to tax- onomy-aligned research and development expenditure 4.6 3.5 39.4 0.0 39.4 0 0 0 0 Y Y Y Y Y Y Complies 39.4 38.7 E Business premises expenses (maintenance costs, electrical charging systems, sustain- ably produced energy) that reduce climate emissions 0.1 0.2 1.2 0.0 1.2 0 0 0 0 Y Y Y Y Y Y Complies 1.2 2.6 E Replacement of fully electric or hybrid cars / cost 0.2 0.1 1.9 0.0 1.9 0 0 0 0 Y Y Y Y Y Y Complies 1.9 1.3 E Server expenses allocated to taxono- my-aligned economic activities 0.9 0.6 7.3 0.0 7.3 0 0 0 0 Y Y Y Y Y Y Complies 7.3 6.3 E Total 5.8 4.4 49.8 0.0 49.8 0 0 0 0 Y Y Y Y Y Y Complies 49.8 49.0 E Non-eligible Share of research and development costs recognised as expenses and not relating to taxonomy-aligned research and develop- ment expenditure 1.0 0.1 9.0 Business premises expenses that are not directly related to the reduction of climate emissions 1.6 2.0 13.3 Expenses relating to cars that are not fully electric or hybrid 0.3 0.4 2.9 Server expenses not allocated to taxono- my-aligned economic activities 2.5 1.7 21.8 Training costs 0.4 0.3 3.4 Non-eligible operating expenditure, total 5.8 4.6 50.4 Total operating expenditure 11.7 8.9 100 FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 31ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Council for Mass Media. In another decision, the Council for Mass Media stated that Iltalehti should have labelled the news about its IL Plus service more clearly as an advertisement. Accord- ing to another condemnatory decision, Iltalehti corrected an error in one of the news reports too slowly. In 2022, the Council for Mass Media handled a total of 41 complaints in Finland and issued a condemnatory decision in eight of those cases. The company's media also have annual development targets to promote the sustainable development of society. Of the ﬁnancial and professional media, Kauppalehti and Tekniikka&Talous set their own speciﬁc keywords for each edi- torial article offering solutions to climate change. The keyword makes it easier for the reader to ﬁnd content that offers solutions for mitigating climate change and improves the veriﬁcation of the effectiveness of the media in raising the awareness of citizens and companies. A total of 180 articles offering solutions to mitigate climate change were published in Kauppalehti and 203 such articles were published in Tekniikka&Talous. These articles were read a total of 1.5 mil- lion times. In 2022, the editorial ofﬁces of Iltalehti and Kauppalehti were trained on the background of the condemnatory decisions made by the Council for Mass Media and, at the editorial staff’s own Number of employees Women as supervisors, % Men as supervisors, % Finland 1,029 45 55 Czech Republic 432 25 75 Baltic countries: Estonia, Latvia, Lithuania 75 50 50 Slovakia 124 18 82 Croatia 95 50 50 Bosnia 47 50 50 Sweden 16 0 100 Other 35 25 75 Total 1,831 38 62 Under 30 years 30–50 years Over 50 years Fixed term Permanent Full-time Part-time Total Baltic countries 17% 76% 7% 0% 100% 93% 7% 100% Bosnia and Herzegovina 21% 77% 2% 32% 68% 100% 0% 100% Croatia 13% 84% 3% 0% 100% 89% 11% 100% Other operating countries 15% 85% 0% 8% 92% 100% 0% 100% Sweden 19% 75% 6% 6% 94% 88% 12% 100% Slovakia 19% 78% 3% 1% 99% 97% 3% 100% Finland 18% 62% 20% 7% 93% 88% 12% 100% Czech Republic 15% 82% 3% 9% 91% 85% 15% 100% Responsible media The main sustainability target of the company's media is the truthfulness of the content, the reliability of the sourc- es, the accuracy of the content and the promotion of good commercial practice. Alma Media does not receive or grant political or other contributions that could compromise its independence. Alma Media’s media brands grant dis- counts on advertising to non-proﬁts and non-governmental organisations as well as parties and candidates in election ad- vertising, but the terms of the discounts are the same for everyone. One of the in- dicators is the number of condemnatory decisions of the Council for Mass Media addressed to the media, which shall not exceed the threshold of ﬁve (5) condem- natory decisions. During the year under review, Alma Media’s Iltalehti received two condemnatory decisions from the FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 32ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS request, training on the terminology of diversity was also organised in Iltalehti in cooperation with the LGBTI rights organisation SETA. In addition, Iltalehti's journalists received training on legisla- tion concerning journalism. The truthfulness of marketing and pre- venting the misleading of consumers is a basic condition for campaigns published in the Group’s media and services. The automation and internationalisation of advertising and the increasingly com- plex digital advertising ecosystem re- quire Alma Media to make signiﬁcant in- vestments in maintaining a high-quality and safe media environment. The Group systematically strengthens its technical capabilities and employee competen- cies to ensure that no advertising fraud or advertisements that are contrary to good marketing practices are pub- lished in its online and mobile services, and that user data is not collected or used inappropriately in connection with advertising. Alma Media complies with the legislation governing marketing as well as the marketing communications industry’s self-regulation in monitoring the advertising activities of its customers and when engaging in marketing com- munications for its media brands and services. The Group is actively involved in the development of digital marketing competence throughout the marketing communications industry in Finland. The company promotes good com- mercial practice and complies with the marketing rules of the International Chamber of Commerce and the guide- lines of the Council of Ethics in Adver- tising. The key principle guiding respon- sible operations is that the company's online or mobile services do not contain advertisements that would violate the marketing regulations of the Interna- tional Chamber of Commerce. In the year under review, one programmatically purchased gambling advertisement by an international operator managed to penetrate the technical protection of our site and was brieﬂy published on our site. The advertisement was quickly removed, as foreign gambling advertising is not allowed in Finland. Alma Media did not receive any complaints in its operat- ing countries from the authorities that supervise ethics in advertising or the marketing industry’s own self-regulatory bodies. Responsible marketplaces and services Alma Media develops its online services with a long-term approach with the aim of providing consumers and advertisers with safe and versatile services with the best customer experience. It is essential for the success of the Group’s business that the users of its digital services feel conﬁdent that their customer data is stored, managed and used responsibly. Alma Media assesses its performance as a responsible digital operator primarily from the perspective of the users of the Group’s services. Accordingly, the Group has selected the security of its service as the focus area of its responsibility efforts. The Group has set two annual targets in this area. In line with the ﬁrst target, no serious breach of data protection should occur in the company's online services. During the year under review, the company submitted one (1) personal data security breach notiﬁcation to the data protection authority and received a total of zero (0) requests for clariﬁcation. In addition, the company received two (2) requests for clariﬁcation from the Finnish Transport and Communications Agency Traﬁcom regarding the use of cookies on the website. The incidents did not result in condemnatory decisions or a sanction imposed by a decision of the authority. During the year, no legal action was taken against the Group related to the privacy of users. Alma Media’s business environment is constantly changing. That is why the company regularly reviews the risks affecting data security and the ability to react to the risks of the changing envi- ronment. Data security and data protec- tion will be strengthened as necessary in order to reduce risks. In order to mitigate these identiﬁed risks (both external and internal threats), entities outside Finland have been integrated into the Group network, which has brought all units under the same data security policies and controls, as well as user and access management. The Group’s privacy policy describes the Group’s responsibilities, requirements and practices related to the collection, use and storage of data based on the applicable legislation. At Alma Media, users of online services are asked for the necessary permits and the data is primarily used to deliver the service ordered by the user, to develop the user experience and to meet users' expectations. Secondarily, user data is used, for example, on the basis of user interest and behaviour, to target relevant advertising and content. As the operating environment became signiﬁcantly more unstable in 2022, Alma Media updated its business continuity plan. The purpose of the continuity plan is to enable business to continue in problematic circumstances by adopting an appropriate strategy and measures to protect people and proper- ty. The business continuity plan outlines the potential impacts of disasters on the business and describes the policy related to these situations to ensure the company's rapid recovery after a poten- tial crisis. The management of the business units, together with the ICT organisation and FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 33ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS the legal department, are responsible for the technical development of the online services owned by the Group and for ensuring that they comply with data protection and data security recom- mendations and regulations as well as maintaining the appropriate level of em- ployee competence pertaining to data protection and data security. Diversity, equality and inclusion The foundation for Alma Media’s devel- opment of an equal and diverse work community is provided by regular em- ployee surveys, among other things. The survey results, salary analyses and other employee data are used as the starting point when Alma Media’s Finnish busi- ness units update their non-discrimina- tion, diversity and equality plans in two- year intervals under the guidance of the HR function. The plans cover topics such as differences in pay, the justiﬁcation for ﬁxed-term employment relationships and the job-speciﬁc gender distribution in each unit. Alma Media recruits new employees purely based on their competence and aptitude. All Alma Media employees have the right to: • fair and incentivising remuneration, • competence development, • feedback, • information about the company, • a safe, comfortable, renewing and evolving work environment, and • respect for privacy and private life. In accordance with the Group’s Code of Conduct, everyone at Alma Media must respect basic human rights. Alma Media does not condone discrimination based on age, gender, race, skin colour, nation- ality or ethnic origin, religious beliefs, convictions, family relationships, sexual orientation or disabilities. Alma Media has a zero tolerance policy regarding the discrimination and inap- propriate treatment of employees. The Group reports annually on whether it has been informed of any such incidents. A total of six (6) suspected incidents of bullying or sexual harassment were reported in 2022. All of the incidents re- ported to the company were thoroughly investigated. The necessary measures were taken and all six cases were closed by the end of the year. Alma Media’s Board of Directors had eight members in 2022. Two (25%) of them were women. The average age of the Members of the Board was 52 years. Alma Media’s Group Executive Team consisted of 10 members during the year under review, three (30%) of whom were women. The average age of the Group Executive Team was 55 years. Women accounted for 38 per cent of supervisors in the Group as a whole and 45 per cent of supervisors in Finland. A more detailed distribution of employees is provided in Table 8. More than 90 per cent of Alma Media’s employees were permanently employed during the year under review. Most of Alma Media’s employees worked full time. A special feature of Alma Media’s Finnish operations was — as in previous years — the use of freelancers by the Group’s media brands. Each year, the Group’s media brands employ dozens of photographers and journalists by way of freelance contracts in addition to their in-house resources. The media brands order stories, videos and photos from the freelancers based on their needs. In the year under review, the largest age group in all of Alma Media’s country units was 30–50. In Finland, the proportions of employees aged under 30 and over 50 were almost equal. In the other operat- ing countries, the second-largest age group was employees under 30 years of age. More detailed region-speciﬁc infor- mation on employment contract types, the age distribution and the duration of employment is provided on page 32 in the Sustainability report. In order to develop an equal and diverse work community during the year under review, Alma Media surveyed employees' experiences of diversity, equality and inclusion in all Alma Media's operating countries. A total of 596 people respond- ed to the survey, and the response rate was 40%. Based on the survey responses, employees have equal opportunities to develop their skills and Alma Media is seen as a ﬂexible employer in different life situations. Based on the results, Alma Medians perceive the work community as equal. The results will be used in the development of these themes. We continued to coach our employees in workshops aimed at increasing employee appreciation towards diversity and view- ing diversity as a resource. By the end of 2022, approximately 700 Alma employees had participated in these workshops. We also adhered to our multi-location work principles, which facilitate and increase ﬂexibility in combining individual life sit- uations and work, and improve well-be- ing at work. During 2022, we offered our employees the opportunity to increase their competence in diversity and in- clusion through online coaching. Alma Media participated in Pride Week in June, and the colours of the rainbow were seen in Alma's ofﬁces, Teams background and social media channels. In addition, for Pride month, Alma offered two trainings open to everyone on the theme in Alma's digital training service, Seduo: ‘The ba- sics of rainbow communications’ and ‘A great team is an inclusive team’. Future-ﬁt workforce In a constantly changing operating envi- FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 34ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS ronment, competence development plays a key role in ensuring future competitive- ness. Alma Media’s HR strategy sup- ports the Group’s business through the goal-driven development of employee competence, amongst other things. It is based on competence targets, which are deﬁned at the team level at a minimum. The Group’s aim is to have a personal plan prepared for each employee to sup- port the development of their compe- tence. Goal-driven competence devel- opment is followed up on in one-on-one discussions between the supervisors and employees. Alma Media arranges training programmes that support the development of employee compe- tence and invests in the collaborative learning of employees and knowledge sharing by organising mentoring pro- grammes, competence workshops and theme events, amongst other things. The company takes a long-term approach to the development of managerial work and builds an international network of supervisors to support the sharing of best practices related to leadership and management. Alma Media measures its performance in engaging the commitment of em- ployees and competence development by means of annual employee surveys, which provide a comprehensive picture of employee perceptions regarding the effectiveness of the work community and Alma Media as an employer. The most extensive of these surveys is the annual Quality of Work Life (QWL) survey conducted in all of Alma Media’s units. The target set for the survey is a QWL index of at least 83 per cent. This target was exceeded in the year under review, with the score being 83.1 per cent. The state of the work community is also mea- sured annually by ﬁnding out how willing the employees are to recommend Alma Media as an employer. The target is a score of at least 8 on a scale of 1–10. Alma Media achieved a score of 8.3 (eNPS 43). In addition to using surveys, Alma Media evaluates its performance as an employer by monitoring the long-term retention of new employees. The target is for 90 per cent of new employees to stay with the Group for at least two years after being hired. Of the employees who joined the company two years ago as new employees in Finland, 86.5 per cent remained with the company during the year under review. The voluntary depar- ture turnover of Alma Media’s employees in the Group’s operating countries was 10.2 per cent on average. Risks and risk management At Alma Media Group, the task of risk management is to detect, evaluate and monitor business opportunities, threats and risks, to ensure the achievement of FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 35ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS objectives and business continuity. The risk management process identiﬁes and controls the risks, develops appropriate risk management methods, and regu- larly reports on risk issues to the risk management organisation and the Board of Directors. Risk management is part of Alma Media’s internal control func- tion and thereby part of good corporate governance. Alma Media uses a harmonised risk assessment and reporting model. With regard to risks, the company also monitors the development of national, EU-level and international regulations and agreements. Risks are assigned priorities in the risk matrix by estimat- ing the euro-denominated impacts and probabilities of the realisation of each risk. In estimating the impacts of the realisation of risks, reputation impacts and environmental impacts are taken into account in addition to the estimated direct euro-denominated impacts. Each segment, function and unit is responsi- ble for the management of risks related to their operations. The company’s most signiﬁcant strategic risks are related to rapid changes in the existing business models of market- places, changes in media consumption among consumers, and data protection violations. An increasingly important source of competitive advantage, but also a strategic risk, in Alma Media’s business is the ability to use customer data to improve the users’ service expe- rience and develop the product and ser- vice offering for advertisers. Alma Media manages customer data and behavioural data, taking regulatory requirements into consideration, by centralising customer data repositories and deploying analysis and activation technology. Potential restrictions concerning the use of third-party cookies could create uncertainty factors, at least temporarily, related to digital advertising sales. The regulation of the media sector and the related market practices is becoming stricter. The changes in the operating environment and the rapid technological development require continuous invest- ments in employee competence and development. Ensuring adequate and highly competent technology-related human resources for the years to come is a signiﬁcant strategic risk. A further risk to Alma Media’s business is the potential decline in digital audiences, as well as a potential permanent decrease in digital advertising sales and listing advertising. The continuation of the widespread pandemic may have a signiﬁcant impact on the demand for services on the one hand and, on the other hand, it can cause substantial production disruptions in business processes due to signiﬁcant risks related to employee health. In addition to the COVID-19 pandemic, geopolitical risks in Alma Media’s oper- ating countries may have a signiﬁcant impact on service demand. The most signiﬁcant operational risks are cyber risks, disruptions of informa- tion technology and communications as well as interruptions in daily news pro- duction. Data security risks are managed in various ways; for example, by im- proving proactive automation to detect server attacks in a timely manner and by regularly training the employees on data security and data privacy. The non-ﬁnancial risk management process also covers responsibility risks whose signiﬁcance is assessed both in ﬁnancial terms and in terms of the potential damage caused to the Group’s reputation if the risk were to materialise. The Group communicates its sustain- ability risks and challenges related to the development of corporate sustainability transparently in its stakeholder commu- nications. Risks related to the erosion of the responsibility of media and services Even in Finland, trust in the media has weakened, although it is still high by international comparison. Alma Media’s business is based on trust. Readers, ad- vertisers and the users of digital services must be able to trust that the Group publishes truthful, objective and pluralis- tic content while also providing a secure advertising environment and digital services that are safe to use. To maintain the trust of its readers and customers, Alma Media systematically develops its employees’ competencies and techno- logical skills, and the Group has also set annual and long-term targets concerning responsible journalism and marketing as well as digital responsibility, which are incorporated into the incentive schemes for employees. The day-to-day work of editorial teams, media sales and the ICT organisation are also guided by the deci- sions of the regulatory bodies concern- ing responsible journalism and market- ing, data privacy and data security. They are also guided by the feedback from customers and readers received through various channels and the results of read- er and customer satisfaction surveys. Environmental risks Based on its materiality assessment of sustainability, Alma Media has de- termined that the strategic decision to invest in digital business reduces risks related to climate change and the environment. In the short term, warmer winters will complicate the timbering of FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 36ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS wood by the paper suppliers that oper- ate as Alma’s subcontractors, which may lead to higher paper prices. Increasing- ly strict national and EU-level climate regulations may also have cost impacts in Alma Media’s subcontracting chain. Changes involving paper and delivery costs have an effect on the costs of print publications, for example. Print media accounts for approximately 66% (MEUR 32) of Alma Media’s content sales. In the longer term, increasing extreme weather phenomena caused by climate change are predicted to increase the risk of technical disruptions to digital services in Alma Media’s operating countries. Alma Media manages its environmental risks by systematically developing its op- erations in accordance with the Group’s science-based SBTi climate targets and by also engaging the commitment of its key suppliers to the Group’s climate targets. The environmental risks associated with purchasing are reduced by Alma Me- dia operating in 11 European countries. The procurement of each country unit is focused on the domestic market or nearby regions, which enables compre- hensive oversight of suppliers. The risk of disruptions in the availability of digital services is mitigated by improving oper- ational reliability. Operational reliability has been improved by transitioning to cloud services and by purchasing other necessary server capacity from state-of- the-art data centres. Social and HR-related risks The development of Alma Media’s busi- ness is highly dependent on the system- atic development of employee compe- tence and the Group’s ability to attract and retain highly competent and motivat- ed employees. Many of the professional groups that are signiﬁcant to the Group’s capacity for renewal and competitiveness are characterised by intense competition in the job market. For this reason, Alma Media considers the failure to adequately develop competencies and engage the commitment of employees to be its most signiﬁcant HR-related risk. The Group manages its HR-related risks by taking a long-term approach to the development of its employer image, recruitment, supervisory work and man- agement. In accordance with its HR strategy, the Group also invests in career guidance and provides employees with diverse opportunities for on-the-job learning and the continuous development of competence. Alma Media assesses its risk manage- ment performance by monitoring its progress towards its responsibility targets related to the Group’s ability to engage and retain new employees, the employee experience and strengthening the company’s employer image. Prog- ress towards these targets is reported annually. Risks related to unethical business practices and human rights violations Alma Media has a vast and diverse sub- contracting network that ranges from sole proprietorships engaged in content production to large international corpo- rations. Alma Media has business opera- tions in 11 countries. Ethics violations by the Group’s subcontractors or employ- ees could potentially have ﬁnancial or legal repercussions for Alma Media and they could damage the Group’s repu- tation. To ensure that consistent ethical principles are observed in the Group’s business operations, Alma Media re- quires all of its employees and its most signiﬁcant subcontractors to commit to the Group’s ethical business principles and takes a goal-driven approach to the development of its organisational cul- ture and operating methods and strives to minimise risks through target setting, reporting and communication, among other things. The continuity plan was updated During the year under review, as the operating environment became signiﬁcantly more unstable, Alma Media updated its business continuity plan. The plan is an important part of the company’s risk management and ensures the continuity of operations in the event of disruptions. It systematically describes how the continuity of certain functions, processes or systems is ensured in disruptions and how they are recovered, including the actions to be taken in response to a speciﬁc disruptive event. The aim is to reduce negative impacts and accelerate recovery. The continuation of business in prob- lematic circumstances is ensured by adopting an appropriate strategy and measures to protect people and prop- erty. The continuity plan outlines the potential impacts of disasters on the business and describes the operating policy related to these situations to en- sure the company's rapid recovery after a potential crisis. Due to the changes in the potential threats in spring 2022, Alma Media carried out a so-called hardening of the data security controls of critical systems to improve interference tolerance and recovery from disruptions. The response to personal data breaches was enhanced with updated instructions, of which a separate version was also prepared for the company's subcontractors. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 37ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Risk Risk deﬁnition Risk mitigating actions STRATEGIC RISKS Changes in media con- sumption and the business models of marketplaces Industry transformation following trends in media consumption and technological development. The capacity of product and service development to assess changes in consumer behaviour or invest in the appropriate technological service solutions. Business development driven by customer needs. Measures to promote digital business competitiveness. Ensuring that content is interesting. Devel- oping the user interfaces of media as well as purchasing paths and payment systems, for example. Sufﬁcient investments and resources in research and development. Changes in the competi- tive landscape and intensi- fying competition Expansion of international platforms, industry convergence, re- duced price competitiveness. Technological solutions and im- plementations by platform providers that restrict the operations of other companies. Regulation and potential legislative changes concerning taxation. Service business development, active development of the existing business, diversiﬁcation of revenue sources, geographic diversiﬁcation of business. Digital media audiences and digital advertising A signiﬁcant drop in subscribers and readers, a permanent decline in digital advertising sales and pricing pres- sures on services Maintaining and developing an interactive media-reader relationship, cus- tomer satisfaction surveys, Alma Media’s internal cooperation in content production, content sales, advertising sales, support functions and product development. Distribution partnerships and cooperation with publishers. Customer data, restrictions on the use of third-party cookies The ability to utilise the growing amount of customer data in delivering better and more targeted service solutions. The capacity of product and service development to an- ticipate changes in customer needs. Violations of the GDPR or other regulations governing data privacy. Third-party cookies cannot be used for data collection and, subsequently, for targeting advertising and content sales. Business development driven by customer needs. Measures to promote dig- ital business competitiveness and data management. Sufﬁcient investments and resources in data management and systems as well as the development of data privacy procedures and employee competence. Increasing the num- ber of registered users of services and increasing the use of Alma ID. The global pandemic and its continuation A widespread pandemic may have a signiﬁcant impact on the de- mand for services and products on the one hand and, on the other hand, it can cause substantial production disruptions in business processes due to signiﬁcant risks related to employee health Monitoring the operating environment and reacting to changing circum- stances with sufﬁcient speed. The organisation’s ability to adapt to the pre- vailing circumstances. Occupational safety measures concerning employees GDPR and data protection Interpretations by the authorities regarding the practical applica- tion of the GDPR and the EU's expanding data regulation . Internal training, monitoring legislation and the regulatory interpretations of the authorities, building processes for legally required changes in the organisation Data regulation The ﬁnal form and impacts of the EU’s data regulation package (DSA, DMA, DGA, Data Act, AI Act) are not yet known but, in the worst-case scenario, the impacts on Alma Media’s business opera- tions could be signiﬁcant Scenario analyses and preparation for various outcomes together with the business. Internal training, monitoring legislation and the regulatory interpretations of the authorities, increasing awareness of legally required changes in the organisation Competence; the reten- tion, recruitment and development of highly competent employees Technological development and the demands of new technology increase the risk of obtaining and maintaining sufﬁcient competen- cies and achieving employee commitment. HR strategy, creating commitment in key individuals, additional resource allocation and trainee programmes, employee well-being. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 38ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Risk Risk deﬁnition Risk mitigating actions Geopolitical risks Geopolitical risks in our operating countries can have a signiﬁcant impact on the demand for services and cause signiﬁcant produc- tion disruptions in business processes Continuous monitoring and reacting quickly to the changing environment. The organisation’s ability adapt to its operations to the prevailing circumstances. Responding in accordance with the continuity plan if neces- sary. OPERATIVE RISKS Serious disruptions in information technology, networks and data communications and recovery from such disruptions The reliability of information networks. Inability to appropriately restore operations or data after a major disruption, damage to or unavailability of back-ups Contingency plans, decentralised server solutions, cloud computing, ensur- ing sufﬁcient competencies. Planning and testing pertaining to back-ups of data. Detailed targets for the business segments’ cloud infrastructure and services, and specifying employee-level responsibilities and procedures. Cyber risks The risk of being targeted by data security attacks and data theft. Contingency plans and risk management actions, ensuring sufﬁcient com- petencies, insurance. Disruptions in daily news production Serious problems with the functioning of content generation sys- tems (e.g. Newspilot, Writer, Open Content). System design, back-ups, software vendors’ support agreements, reactive capabilities. Moving services to a managed public cloud to increase ﬂexibil- ity. FINANCIAL RISKS Interest and foreign ex- change risks A change in an interest rate or currency exchange rate causes a sig- niﬁcant impact on the company’s proﬁt or balance sheet position. Treasury policy and the hedging principles deﬁned therein. Reﬁnancing risk The company is unable to renew maturing ﬁnancing agreements. Treasury policy, ﬁnancing plan and agreements, sufﬁciently long maturity of loans, sufﬁcient equity ratio. Liquidity risk The company is unable to cover its maturing obligations in the short term. Treasury policy, ﬁnancing limit agreements of sufﬁcient size. RISKS RELATED TO THE REPORTING OF NONFINANCIAL INFORMATION Risks related to journalism The erosion of the appreciation and reliability of media content. Monitoring and managing editorial content is challenging in the digital environment Developing editorial teams’ practices and employee competence. Reader satisfaction surveys, customer contacts and feedback. Participation in jour- nalism industry events and organisations. Risks related to marketing Diminishing reliability as an advertising environment. Publishing advertising that is contrary to good marketing practices or disrupts the reading experience. Ethical risks related to digital marketing, such as programmatic buying, including partner risks, providing a safe brand environment as a publisher. Technological risks. Customer satisfaction surveys, customer contacts and feedback. Developing marketing practices and employee competence. Technology acquisition. Risks related to service providers Reputation risks related to unethical actions by service providers used by Alma Media Careful risk analysis before signing an agreement, monitoring, engaging service providers’ commitment to Alma Media’s Code of Conduct FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 39ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Identiﬁcation, assessment and management of risks and opportunities related to climate change Alma Media’s climate scenarios aim to identify both risks and opportunities related to climate change. The company has two scenarios that differ in terms of their assessments of technological development, regulation and changes in the political operating environment as well as the level of ambition concerning climate change. The scenario analyses are based on the company’s internal industry expertise and conclusions drawn on the basis of external sources. As digital sources represent 80% of Alma Media’s business, climate change is not seen to constitute a signiﬁcant direct op- erational or ﬁnancial risk to the company. The digital scalability of business, large reach, digital expertise and in-house product development present opportu- nities for Alma Media to mitigate climate change through its actions in its key industries and promote the transition to a low-carbon society. Climate-related risks The management of climate-relat- ed risks has been integrated into the Group’s risk management process and adheres to the same operating models as the management of other signiﬁcant risks and uncertainties. Risks are iden- tiﬁed and assessed on a regular basis and in accordance with a predetermined process. Each risk has a designated own- er. They are responsible for risk manage- ment. Risks are reported and monitored on a regular basis in various teams made up of management, employees and spe- cialists. Climate-related risks are divided into two categories: transition risks and physical risks. The identiﬁed physical risks generally fall into the category of operative risks, while transition risks are generally strategic risks. The optimistic scenario is based on warming of 1.5–2°C, while the pessimistic scenario is based on global warming of 4°C. Transition risks are the most signif- icant risks in both scenarios. Acute and chronic physical risks are more relevant in higher-temperature scenarios. The EU’s ambitious climate targets, paired with the still-unﬁnished regula- tions and guidelines for digital business, as well as differences in application in the company’s operating countries, con- stitute a key uncertainty factor. For ex- ample, most of the company’s business activities are still entirely excluded from the EU’s taxonomy classiﬁcation, which makes target setting more difﬁcult. Alma Media is committed to the Paris Climate Agreement and supports ambitious global climate action to reduce emis- sions and improve resource efﬁciency. Financial impacts: Low 0–1%, Medium 3–5%, High 10–20%. Time horizon: Short-term 1–2 years, Medium-term 3–5 years, Long-term 10–20 years. In addition to the impacts, the estimat- ed probability (improbable/probable/ highly probable) and indicated ﬁnancial impacts as a combination of probabil- ity. Risks and opportunities related to temperature, wind, water and solid mass were taken into consideration, and the most signiﬁcant of these are listed in the table below. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 40ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Alma Media’s climate scenarios Topic Transition risks and opportunities Transition risks and opportunities Preparing for transition risks: management or adaptation, and probability Financial impact Below 2°C climate model SSP1-2.6 +3–4°C climate model SSP5-8.5 Transition risk Policies and regulation • The transition to a low-carbon society poses risks to the compa- ny, but also presents opportunities. • Carbon pricing. Emissions trading schemes. Carbon border tax. Carbon border adjustment mechanisms. • The Sustainable Finance Disclosure Regulation (SFDR) enables lower-cost external ﬁnancing for low-carbon companies. • Increasing regulation limits the company’s choice of partners in subcontracting. • Growing obligations for transparency in reporting increase costs within the company but also present business opportunities, as Alma Media already operates in the business information market. • Growing requirements pertaining to biodiversity may limit the use of hydropower as a source of Scope 1 energy for Alma Media. • The unpredictable regulatory environment poses challenges to the company’s operations and the fulﬁlment of its obligations. • Major differences in regional adaptation. • The business environment becomes less predictable for both Alma Media and its customers. • Protecting biodiversity emerges as an objective that is even more important than climate targets, as climate targets are almost impossible to achieve without protecting biodiversity. • Alma Media’s strategy is based on digital growth and development, which supports climate change mitigation. • Low-carbon business model. • SBTi targets: reducing emissions from own operations and the subcontracting chain. • Probable in the medium term. Low Techno- logy • Technological development speeds up, which accelerates digi- talisation but also increases the company’s costs. • The development of technology enables the development of new climate-related business. • Adaptation requires increasing investments in technology and the rapid acceleration of digitalisation. • Rapid technological development and digital solutions are needed to support adaptation for customers. • Alma Media has the digital capabilities necessary for develop- ing new services relating to sustainable consumption and the circular economy. • Alma Media uses continuity planning to prepare for the identiﬁcation of techno- logical risks and reacting to them. • The company systematically strengthens its digital and technology competencies. • The geographical diversiﬁcation of server locations reduces the risk of service disruptions. • Highly probable in the short term. Low Market (demand and supply) • Fluctuations in the energy market are reﬂected in consumer conﬁdence. Rising energy prices reduce household purchasing power and the willingness to make larger purchases for one’s home. • In the area of cars and mobility, the demand for non-fossil pow- ered vehicles exceeds the supply, production bottlenecks grow and market growth in the automotive sector – for both new and used cars – slows. • The business environment changes as increasing regulation affects consumer preferences and Alma Media’s customers. • The demand for low-carbon goods and services grows, which presents a business opportunity for Alma Media. • Declining travel and tourism in Croatia and Slovenia leads to lower demand for labour and recruitment services. • Carbon pricing makes business difﬁcult in certain geographical regions and creates price-related barriers to economic activity with regard to air travel, for example. • The limited availability of commodities increases prices, includ- ing the price of energy, raw materials that are critical to society, and technological components. • The mobility of people and goods is signiﬁcantly reduced. • Waves of climate displacement from Africa and Asia can disrupt society and negatively affect the advertising sales business. • Quick digital solutions are needed to support customers’ adap- tation, which also presents an opportunity for a digital company with its own product development activities. • Alma Media actively develops its products and services to respond to changes in the market, such as the impacts of regulation. • Consumer preferences and the changing needs of business customers are closely monitored. • Services and media are developed further to provide solutions to climate change. • Highly probable in the short term. Low Reputation and brand • Alma Media is a leader in its industry with regard to the transition to a low-carbon society. The company has ambitious SBTi tar- gets extending to 2030. • Failure to grow taxonomy-aligned business is a potential risk that may affect the availability of ﬁnancing.. • Failure to grow taxonomy-aligned business could make the company less attractive to investors. • The SBTi targets are in line with the Paris Climate Agreement (Scope 1, 2 and 3). Ac- tive development of Alma Media’s prod- uct portfolio and value-added services to mitigate climate change. • Improbable. Low FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 41ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Alma Media’s climate scenarios Nature of the risk Transition risks and opportunities Transition risks and opportunities Preparation for physical risks: management or adaptation, and risk probability Financial impact Below 2°C climate model SSP1-2.6 +3–4°C climate model SSP5-8.5 Physical risk Acute risks • The increase in physical risks is moderate. Certain phenome- na, such as hurricanes, will become more common around the world. Floods will become more common in Europe. • Vulnerability to physical risks is considered to be lower in Europe than elsewhere in the world, but extreme weather phe- nomena may have an impact to some degree in Alma Media’s operating countries in Eastern Central Europe. • Extreme temperatures leading to fatalities and signiﬁcant losses in productivity will remain rare in Alma Media’s operating regions. • Increased uncertainty in the operating environment increases the need for information and real-time, reliable news coverage of events.. • Extreme weather phenomena, such as drought and wildﬁres, storms and subsequent ﬂash ﬂoods and landslides will become more common, posing an acute physical risk of the loss of build- ings, property and human lives. • Indirect losses will also occur due to transport and delivery issues or the jeopardised continuity of business. • The risks include losses of margins on interrupted business operations and damage to movable property and equipment. • Elevated risks may drive demand for investments in adaptation, potential relocation and business disruptions caused by damages and the need to repair premises after extreme events. • The most signiﬁcant exposures to phys- ical risks can be avoided through Alma Media’s effective continuity planning, which is updated on a regular basis. • The geographical diversiﬁcation of oper- ations into smaller units reduces physical risks for the Group as a whole. • Probable in the short and medium term.. Low Chronic long-term risks • Long-term changes in the climate affect the availability of energy, hydropower and wind power production, and energy demand, as heating and cooling needs become increasingly seasonal. • The ﬂooding of rivers will increase due to sudden increases in rainfall. . • Long-term changes in the climate affect the availability of energy, hydropower and wind power production, and energy demand, as heating and cooling needs become increasingly seasonal. • In the Nordic countries, the average temperature of waters will rise more than in the rest of the world in relative terms. • Productivity losses and health issues will be highlighted in cer- tain regions due to heat waves. • The regular updating and re-evaluation of climate scenarios. • Developing new business models to- gether with customers and partners to mitigate climate change.. Low Financial impacts: • Low 0–1%, • Medium 3–5%, • High 10–20%. Time horizon: • Short-term 1–2 years, • Medium-term 3–5 years, • Long-term 10–20 years. In addition to the impacts, the estimated probability (improbable/probable/highly probable) Risks and opportunities related to tempera- ture, wind, water and solid mass were taken into consideration, and the most signiﬁcant of these are listed in the table. above. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 42ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Changes in Group structure in 2022 Changes in Group structure are de- scribed in the strategy section of the Report by the Board of Directors as well as in the notes to the consolidated ﬁnan- cial statements, in Note 4.2 Subsidiaries, Note 4.3 Business combinations and 4.4 Associated companies. Annual General Meeting 2022 Alma Media Corporation’s Annual Gener- al Meeting (AGM), held on 29 March 2022 under special arrangements, conﬁrmed the ﬁnancial statements for 2021 and released the members of the Board of Directors and the President and CEO from liability. The AGM decided that a dividend of EUR 0.35 per share shall be paid for the ﬁnancial year 2021. Peter Immonen, Petri Niemisvirta, Esa Lager, Alexander Lindholm, Catharina Stackelberg-Hammarén, Eero Broman, Heikki Herlin and Kaisa Salakka were elected as Board members. In its consti- tutive meeting after the AGM, the Board of Directors elected Catharina Stackel- berg-Hammarén as its Chair and Eero Broman as its Vice Chair. The Board of Directors also appointed the members to its permanent com- mittees. Petri Niemisvirta, Eero Broman, Kaisa Salakka and Heikki Herlin were elected as members of the Audit Com- mittee, with Esa Lager as Chair. Catharina Stackelberg-Hammarén and Alexander Lindholm were elected as members of the Nomination and Compensation Committee, with Peter Immonen as Chair. The Board of Directors has assessed that, with the exception of Peter Immonen, Esa Lager, Alexander Lindholm, Heikki Herlin and Eero Broman, the members of the Board are independent of the company and its signiﬁcant sharehold- ers. Heikki Herlin is the Chair of the Board of Mariatorp Oy, Peter Immonen is a member of the Board of Mariatorp Oy, Esa Lager is a member of the Board of Ilkka-Yhtymä Oyj, Alexander Lindholm is the CEO of Otava Group and, as of 2022, Eero Broman has been a member of the Board of Otava Ltd for over 10 consecu- tive years (a relationship with a signiﬁ- cant shareholder pursuant to subsection J.) of Recommendation 10 of the Corpo- rate Governance Code). Mikko Korttila, General Counsel of Alma Media Corporation, serves as the secre- tary to the Board of Directors in accor- dance with the Board’s Charter. The AGM appointed Pricewaterhouse- Coopers Oy as the company’s auditors, with Niina Vilske, APA, as the principal auditor. Remuneration of Board members In accordance with the proposal of the Shareholders’ Nomination Committee, the Annual General Meeting decided that the remuneration be kept unchanged, and that the following annual remunera- tion be paid to the members of the Board of Directors for the term of ofﬁce ending at the close of the Annual General Meet- ing 2023: to the Chairman of the Board of Directors, EUR 62,500 per year; to the Vice Chairman, EUR 40,000 per year, and to members EUR 32,500 per year. In addition, the Chair of the Board of Di- rectors and the Chair of the Audit Com- mittee will be paid a fee of EUR 1,500, the Chair of the Nomination and Compen- sation Committee a fee of EUR 1,000, the Deputy Chairs of the committees a fee of EUR 700 and members a fee of EUR 500 for those Board and Committee meetings that they attend. The travel expenses of Board members will be compensated in accordance with the company’s travel policy. The attendance fees for each meeting are: • doubled for (i) Members living out- side Finland in Europe or (ii) meet- ings held outside Finland in Europe; and • tripled for (i) members resident outside Europe or (ii) meetings held outside Europe. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 43ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS The Members of the Board shall, as decided by the Annual General Meeting, acquire a number of Alma Media Corpo- ration shares corresponding to approx- imately 40% of the full amount of the annual remuneration for Board Members, taking into account tax deduction at source, at the trading price on the reg- ulated market arranged by the Helsinki Stock Exchange. Members of the Board are required to arrange the acquisition of the shares within two weeks of the release of the ﬁrst quarter 2023 interim report or, if this is not possible due to insider trading regulations, as soon as possible thereafter. If it is not possible to acquire the shares by the end of 2023 for a reason such as pending insider transactions, the annual remuneration shall be paid in cash. Shares acquired in this way cannot be transferred until the recipient’s membership on the Board has ended. The company is liable to pay any transfer taxes that may arise from the acquisition of shares. Authorisation to the Board of Directors to repurchase own shares The AGM authorised the Board of Di- rectors to decide on the repurchase of a maximum of 824,000 shares in one or more lots. The maximum authorised quantity represents approximately one (1) per cent of the company’s entire share capital. The shares shall be acquired using the company’s non-restricted shareholders’ equity through trading on a regulated market arranged by Nasdaq Helsinki Ltd and in accordance with its rules and instructions, for which reason the acquisition is directed, in other words, the shares will be purchased otherwise than in proportion to the shareholders’ current holdings. The price paid for the shares shall be based on the price of the company share on the regulated market so that the minimum price of purchased shares is the lowest market price of the share quoted on the regulated market during the term of validity of the authori- sation and the maximum price, corre- spondingly, the highest market price quoted on the regulated market during the term of validity of the authorisation. Shares can be purchased for the purpose of improving the company’s capital struc- ture, ﬁnancing or carrying out corporate acquisitions or other arrangements, implementing incentive schemes for the management or key employees or to be otherwise transferred or cancelled. The authorisation is valid until the following AGM, but not later than 30 June 2022. Authorisation to the Board of Directors to decide on the transfer of own shares The AGM authorised the Board of Di- rectors to decide on a share issue by transferring shares in possession of the company. A maximum of 824,000 shares may be issued on the basis of The Board can use the authorisation in one or more lots. The Board can use the authorisation for developing the capital structure of the company, widening the ownership base, ﬁnancing or executing acquisitions or other arrangements, or for other pur- poses decided on by the Board. The authorisation cannot, however, be used to implement incentive schemes for the management or key employees of the company. The authorisation is valid until the fol- lowing AGM, but not later than 30 June 2022. This authorisation overrides the corresponding share issue authorisation granted by the AGM of 24 March 2021, but not the share issue authorisation proposed above. Donations The AGM authorised the Board to decide on donations amounting to no more than a total of EUR 50,000 to universities in 2022–2023, with the more detailed condi- tions of the donations to be decided by the Board of Directors. Dividends In accordance with the proposal of the Board of Directors, the AGM resolved that a dividend of EUR 0.35 per share be paid for the ﬁnancial year 2021. The divi- dend was to be paid to shareholders who this authorisation. The maximum autho- rised quantity represents approximately one (1) per cent of the company's entire share capital. The authorisation entitles the Board to decide on a directed share issue, which entails deviating from the pre-emption rights of shareholders. The Board can use the authorisation in one or more lots. The Board of Directors can use the authorisation to implement incentive programmes for the management or key employees of the company. The authorisation is valid until the fol- lowing AGM, but not later than 30 June 2022. This authorisation overrides the share issue authorisation granted at the Annual General Meeting of 24 March 2021. Authorisation to the Board of Directors to decide on a share issue The AGM authorised the Board of Direc- tors to decide on a share issue. A maxi- mum of 16,500,000 shares may be issued on the basis of this authorisation. The maximum number of shares that may be issued under the authorisation corre- sponds to approximately 20 per cent of the company’s entire share capital. The share issue can be implemented by issuing new shares or by transferring treasury shares. The authorisation en- titles the Board to decide on a directed share issue, which entails deviating from the pre-emption rights of shareholders. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 44ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS 20 principal shareholders on 31 December 2022 Pcs % of shares and votes 1. Otava Oy 24,036,845 29.18 2. Mariatorp Oy 15,675,473 19.03 3. Ilkka Oyj 8,993,473 10.92 4. Varma Mutual Pension Insurance Company 5,627,994 6.83 5. Ilmarinen Mutual Pension Insurance Com- pany 3,221,695 3.91 6. Nordea Nordic Small Cap 1,859,045 2.26 7. Elo Mutual Pension Insurance Company 1,563,000 1.90 8. Sr Evli Suomi Select 1,120,961 1.36 9. Veljesten Viestintä Oy 851,500 1.03 10. Keskisuomalainen Oyj 782,497 0.95 11. Häkkinen Matti Juhani 721,390 0.88 12. C.V Åkerlundin Mediasäätiö Sr. 382,871 0.46 13. Broman Eero Väinö 367,071 0.45 14. Sinkkonen Raija Irmeli 333,431 0.40 15. Danilostock Oy 330,000 0.40 16. Koskinen Riitta Inkeri 274,571 0.33 17. Tallberg Marianne 237,250 0.29 18. Telanne Kai Markus 216,155 0.26 19. Tampereen Tuberkuloosisäätiö Sr 210,000 0.25 20. Alma Media Corporation 198,391 0.24 Total 67,003,613 81.33 Nominee-registered 4,505,465 5.47 Other 10,874,104 13.20 Total 82,383,182 100.00 ) Alma Media Corporation owns a total of 198,391 of its own shares, representing 0.24% of the total number of the company’s shares and related votes. Ownership structure on 31 December 2022 Number of shareholders % of shareholders Number of shares % of shares Private companies 334 3.2 51,762,547 62.8 Financial and insurance institu- tions 14 0.1 3,627,990 4.4 Public entities 7 0.1 10,419,218 12.6 Households 9,775 94.9 10,626,529 12.9 Non-proﬁt associations 107 1.0 1,231,119 1.5 Foreign owners 48 0.5 210,314 0.3 Nominee-registered shares 10 0.1 4,505,465 5.5 Total 10,295 100.0 82,383,182 100.0 Distribution of ownership Number of shareholders % of shareholders Number of shares % of shares 1–100 3,889 3.2 167,261 0.2 101–1 000 4,726 0.1 1,930,477 2.3 1,001–10,000 1,497 0.1 4,266,707 5.2 10,001–100,000 153 94.9 3,778,754 4.6 100,001–500,000 17 1.0 3,671,777 4.5 500,000– 13 0.5 68,568,206 83.2 Total 10,295 100.0 82,383,182 100.0 FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 45ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS were registered in Alma Media Corpo- ration’s shareholder register maintained by Euroclear Finland Ltd on the record date, 31 March 2022. The dividend was paid on 7 April 2022. The Alma Media share In 2022, altogether 2,804,467 Alma Media shares were traded at the NASDAQ Hel- sinki Stock Exchange, representing 3.4% of the total number of shares. The clos- ing price of the Alma Media share at the end of the last trading day of the review period, 30 December 2022, was EUR 9.40. The lowest quotation during the review period was EUR 7.78 and the highest EUR 11.80. Alma Media Corporation’s market capitalisation at the end of the review period was MEUR 774.4. At the end of the ﬁnancial year, on 31 De- cember 2022, Alma Media Corporation held a total of 198,391 of its own shares. In 2022, the company purchased 426,462 of its own shares for a total cost of MEUR 4.2. In 2022, the company transferred 398,481 of its own shares without consid- eration as part of the long-term share- based incentive scheme for the compa- ny’s employees. Share-based retention and incentive schemes The share-based incentive schemes are described in Note 1.4.2 to the consolidat- ed ﬁnancial statements. Flagging notices Alma Media Corporation did not receive any ﬂagging notices in 2022. Corporate Governance Statement for 2022 In 2022, Alma Media Corporation applied the Finnish Corporate Governance Code 2020 for listed companies in its un- altered form. A Corporate Governance Statement required by the Corporate Governance Code is presented as a separate report in connection with the Annual Report. In addition, it is pub- licly available on Alma Media’s web- site at www.almamedia.ﬁ/en/investors/ governance/corporate-governance- statement/. Remuneration policy and remuneration report In accordance with the EU Shareholder Rights Directive, Alma Media has pub- lished its Remuneration Policy, which documents the principles of the re- muneration of the Group’s governing bodies and the key terms applicable to service contracts on 8 March 2022. The remuneration policy of the governing bodies was presented to Alma Media’s Annual General Meeting on 29 March 2022 and it was approved without a vote. The 2022 remuneration report for the Group’s governing bodies, produced in compliance with the EU Share- holder rights Directive (SHRD) and the Finnish Corporate Governance Code 2020 for listed companies, will be dis- cussed at the Annual General Meeting to be held on 4 April 2023. Operating environment in 2023 The national economies of Finland and Alma Media’s other operating countries are expected to see a marked decline in the growth rate in 2023, and some coun- tries are even expecting a recession. According to the European Central Bank, economic activity will start to recover in the second half of 2023 if the situation in the energy market stabilises, supply dis- ruptions subside, real incomes improve and export demand strengthens. Outlook for 2023 Alma Media expects its full-year revenue and adjusted operating proﬁt in 2023 to remain at the 2022 level or decrease from 2022. The full-year revenue for 2022 was MEUR 308.8 and the adjusted operating proﬁt was MEUR 73.4. The outlook is based on the assessment that the company’s revenue and operat- ing proﬁt will decline in the ﬁrst half of the year due to lower advertising sales and the higher costs of the recruitment business. The economic outlook is ex- pected to improve in the second half of the year. We expect the demand for re- cruitment services to remain strong and advertising sales to recover during the year. The efﬁciency improvement mea- sures initiated by the Group will improve proﬁtability in the latter half of the year. Dividend proposal to the Annual General Meeting On 31 December 2022, the Group’s par- ent company had distributable funds totalling EUR 156,856,329 (144,833,995). Alma Media’s Board of Directors propos- es to the Annual General Meeting that a dividend of EUR 0.44 per share be paid for the ﬁnancial year 2022 (2021: EUR 0.35 per share). The dividend will be paid to shareholders who are registered in Alma Media Corporation’s shareholder register maintained by Euroclear Finland Ltd on the record date, 6 April 2023. The Board of Directors proposes that the dividend be paid on 17 April 2023. Based on the number of outstanding shares on the closing date, 31 December 2022, the dividend payment totals EUR 36,161,308 (28,774,470). No essential changes have taken place after the end of the ﬁnancial year with respect to the company’s ﬁnancial standing. The proposed distribution of proﬁt does not, in the view of the Board of Directors, compromise the company’s liquidity. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 46ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS SHAREHOLDINGS 31 December 2022 ** 2015 IV TSR 2020 MSP 2021 MSP 2022 MSP Catharina Stackelberg-Hammarén, Chair of the Board 28,535 Jorma Ollila, Chair of the Board until 29 March 2022 * 20,448 Eero Broman, Deputy Chair 367,071 Petri Niemisvirta, member of the Board 26,756 Heikki Herlin, member of the Board 15,690,503 Peter Immonen, member of the Board 5,625 Esa Lager, member of the Board 19,450 Alexander Lindholm, member of the Board 5,625 Kaisa Salakka, member of the Board 1,320 Kai Telanne, President and CEO 216,155 36,000 120,000 126,000 150,000 Santtu Elsinen, Group Executive Team 39,565 9,000 30,000 36,000 42,000 Virpi Juvonen, Group Executive Team 43,812 6,000 24,000 30,000 36,000 Tiina Kurki, Group Executive Team 49,772 9,000 24,000 30,000 36,000 Kari Kivelä, Group Executive Team 82,096 12,000 36,000 42,000 48,000 Mikko Korttila, Group Executive Team 56,135 9,000 30,000 36,000 42,000 Elina Kukkonen, Group Executive Team 21,023 5,000 14,316 13,500 24,540 Juha-Petri Loimovuori, Group Executive Team 87,619 12,000 36,000 42,000 48,000 Vesa-Pekka Kirsi, Group Executive Team 6,600 0 39,600 Juha Nuutinen, Group Executive Team 60,092 6,000 30,000 36,000 42,000 Total 16,412,148 104,000 344,316 391,500 508,140 * Shareholding on 29 March 2022 ** The ﬁgure also includes holdings of entities under their control as well as hold- ings of related parties. Management ownership The members of the Board of Directors, the President and CEO of the parent company and the other members of the Group Executive Team together held 16,412,148 shares in the company on 31 December 2022, representing 19.9% of the total number of shares and votes. Based on the incentive schemes cur- rently in effect, the President and CEO and the members of the Group Execu- tive Team may receive a total of 1,347,816 shares in the company, corresponding to 1.6% of the total number of shares and votes. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 47ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS INCOME STATEMENT IFRS 2022 Change % IFRS 2021 Change % IFRS 2020 Change % IFRS 2019 Change % IFRS 2018 Revenue MEUR 308.8 12.1 275.4 19.6 230.2 -8.0 250.2 -1.8 254.7 Digital revenue MEUR 249.7 17.7 212.1 33.9 158.9 -4.7 166.7 3.2 161.5 % of revenue % 80.9 77.0 69.0 66.6 63.4 Operating proﬁt (loss) MEUR 80.0 40.9 56.8 31.7 43.1 -13.0 49.5 4.4 47.5 % of revenue % 25.9 20.6 18.7 19.8 18.6 Adjusted operating proﬁt MEUR 73.4 20.2 61.1 34.7 45.4 -8.2 49.4 3.8 47.6 % of revenue % 23.8 22.2 19.7 19.8 18.7 Adjusted items MEUR 6.6 -252.5 -4.3 90.2 -2.3 -2196.5 0.1 -178.9 0.1 Proﬁt before tax MEUR 86.4 53.4 56.3 33.4 42.2 -13.8 49.0 1.8 48.1 Adjusted proﬁt before tax MEUR 79.9 31.7 60.6 36.3 44.5 -9.0 48.9 1.3 48.3 Proﬁt for the period, continuing operations MEUR 72.0 62.6 44.3 33.1 33.3 -17.8 40.5 5.8 38.2 Share of proﬁt of associated compa- nies MEUR 0.7 31.3 1.0 755.2 0.1 -78.4 0.5 272.0 -0.3 Net ﬁnancial expenses MEUR -5.8 -504.1 1.4 47.0 1.0 -8.7 1.1 -208.8 -1.0 Net ﬁnancial expenses, % of revenue % -1.9 0.5 0.4 0.4 -0.4 Proﬁt for the period, discontinued operations MEUR 65.8 702.7 8.2 9.7 Proﬁt for the period MEUR 72.0 62.6 44.3 -55.2 99.1 103.6 48.7 1.6 47.9 Key ﬁgures describing ﬁnancial performance The key ﬁgures are calculated according to IFRS recognition and measurement principles. * The adjusted items are speciﬁed in more detail on page 12 of the Report by the Board of Directors. FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 48ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS BALANCE SHEET * IFRS 2022 Change % IFRS 2021 Change % IFRS 2020 Change % IFRS 2019 Change % IFRS 2018 Balance sheet total MEUR 495.2 -4.5 518.4 55.2 333.9 -16.7 400.9 16.0 345.6 Interest-bearing net debt MEUR 142.6 181.8 -9.1 23.7 2.0 Interest-bearing liabilities MEUR 172.7 -26.1 233.7 500.9 38.9 -57.1 90.8 76.2 51.5 Non-interest-bearing liabilities MEUR 116.6 -1.3 118.2 30.6 90.5 -15.9 107.6 0.3 107.2 OTHER INFORMATION * IFRS 2022 Change % IFRS 2021 Change % IFRS 2020 Change % IFRS 2019 Change % IFRS 2018 Average no. of employees, excl. tele- marketers 1,679 8.4 1,549 3.4 1,497 -2.1 1,530 1.2 1,512 Telemarketers on average 196 -41.8 337 0.6 335 10.2 304 -7.2 328 Capital expenditure MEUR 18.3 -92.6 247.1 170.4 91.4 620.0 12.7 -41.7 21.8 Capital expenditure, % of revenue % 5.9 89.7 39.7 5.1 8.6 Research and development costs MEUR 7.6 64.3 4.6 0.0 4.6 8.1 4.3 -1.0 4.3 Research and development costs, % of revenue % 2.4 1.7 2.0 1.7 1.7 KEY FIGURES * IFRS 2022 Change % IFRS 2021 Change % IFRS 2020 Change % IFRS 2019 Change % IFRS 2018 Return on equity (ROE) % 38.6 62.0 23.9 -51.0 48.7 94.7 25.0 -10.0 27.8 Return on investment (ROI) % 18.9 32.7 14.3 -61.9 37.4 96.5 19.0 -11.6 21.6 Equity ratio % 45.8 34.7 63.1 54.1 57.5 Gearing % 69.3 109.2 -4.5 11.7 1.5 * The ﬁgures include both continuing and discontinued operations, unless otherwise mentioned FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 49ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS PER SHARE DATA * IFRS 2022 IFRS 2021 Change % IFRS 2020 Change % IFRS 2019 Change % IFRS 2018 Earnings per share, basic EUR 0.88 0.53 1.13 0.51 0.51 Earnings per share, diluted EUR 0.86 0.52 1.11 0.50 0.50 Cash ﬂow from operating activities per share EUR 0.96 0.92 0.68 0.87 0.68 Shareholders’ equity per share EUR 2.48 1.99 2.23 2.09 1.94 Dividend per share ** EUR 0.44 0.35 0.30 0.40 0.35 Payout ratio % 50.3 66.0 26.5 78.0 69.2 Effective dividend yield % 4.7 3.2 3.4 5.0 6.3 P/E Ratio 10.7 20.4 7.9 15.5 10.9 Highest share price EUR 11.80 12.7 9.30 8.10 8.14 Lowest share price EUR 7.78 8.42 5.82 5.48 5.10 Share price on 30 December EUR 9.40 10.82 8.92 7.96 5.54 Market capitalisation *** MEUR 774.4 891.4 734.9 655.8 456.4 Turnover of shares, total kpcs 2,804 3,699 4,481 3,464 19,644 Relative turnover of shares, total % 3.4 4.5 5.4 4.2 23.9 Average no. of shares (1,000 shares), basic, excluding treasury shares kpcs 82,185 82,213 82,262 82,283 82,147 Average no. of shares (1,000 shares), diluted kpcs 83,706 83,991 83,692 83,673 83,219 No. of shares on 31 December kpcs 82,383 82,383 82,383 82,383 82,383 * The ﬁgures include both continuing and discontinued operations, unless otherwise mentioned ** Board’s proposal to the Annual General Meeting *** Includes treasury shares FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 50ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Calculation of key ﬁgures Return on shareholders’ equity, % (ROE) Proﬁt for the period x 100 Shareholders’ equity + non-controlling interest (average during the year) Return on investment, % (ROI) Proﬁt for the period + interest and other ﬁnancial expenses x 100 Balance sheet total - non-interest-bearing debt (average during the year) Equity ratio, % Shareholders’ equity + non-controlling interest x 100 Balance sheet total - advances received Operating proﬁt Proﬁt before tax and ﬁnancial items EBITDA Operating proﬁt excluding depreciation, amortisation and impairment losses Digital business, % of revenue Digital business revenue x 100 Revenue Basic earnings per share, EUR Share of net proﬁt belonging to parent company owners Average number of shares adjusted for share issues - trea- sury shares Diluted adjusted earnings per share, EUR Share of net proﬁt belonging to parent company owners Diluted average number of shares adjusted for share issues Gearing, % Interest-bearing debt - cash and bank receivables x 100 Shareholders’ equity + non-controlling interest Net ﬁnancial expenses, % Financial income and expenses x 100 Revenue Dividend per share, EUR Dividend per share approved by the Annual General Meeting with respect to the most recent year, the Board’s proposal to the AGM Payout ratio, % Dividend/share x 100 Share of EPS belonging to parent company owners Effective dividend yield, % Dividend/share adjusted for share issues x 100Final quotation at close of period adjusted for share issues Price/earnings (P/E) ratio Final quotation at close of period adjusted for share issues Share of EPS belonging to parent company owners Shareholders’ equity per share, EUR Equity attributable to owners of the parent Basic number of shares at the end of period adjusted for share issues - treasury shares Market capitalisation of share stock, EUR Number of shares x closing price at end of period Alternative Performance Measures Alma Media Corporation additionally uses and presents Alternative Performance Measures to illustrate the operative development of its business and improve comparability between reporting periods. The Alternative Performance Measures are reported in addition to IFRS key ﬁgures. The Alternative Performance Measures used by Alma Media Corporation are the following: Operating proﬁt excluding adjust- ed items (MEUR and % of revenue) Proﬁt before tax and ﬁnancial items excluding adjust- ed items EBITDA excluding adjusted items Operating proﬁt excluding depreciation, amortisation, impair- ment losses and adjusted items Items adjusting operating proﬁt are income or expenses arising from non-recurring or rare events. Gains or losses from the sale or discontinuation of business operations or assets, gains or losses from restructuring business operations as well as impairment losses of goodwill and other assets are recognised by the Group as adjustments. Adjustments are recognised in the income statement within the corresponding income or expense group. Interest-bearing net debt (MEUR) Interest-bearing debt – cash and cash equivalents FINANCIAL STATEMENTS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 51ANNUAL REPORT 2022 SUSTAINABILITY REPORT REPORT BY THE BOARD OF DIRECTORS Consolidated comprehensive income statement MEUR Note 1.1.–31.12.2022 1.1.–31.12.2021 Revenue 1.1, 1.2 308.8 275. 4 Other operating income 1.2 7. 2 1.4 Change in inventories of ﬁnished products 0.0 0 .1 Materials and services 1.3 3 7. 6 35.6 Expenses arising from employee beneﬁts 1.3, 1.4 119.6 109. 2 Depreciation, amortisation and impairment 2.1, 2.2 1 7. 2 16 .7 Other operating expenses 1.3 6 1.6 58.6 Operating proﬁt 1.1 80.0 56.8 Finance income 3.1 9.2 0.9 Finance expenses 3.1 3.4 2.3 Share of proﬁt of associated companies 4.4 0.7 1.0 Proﬁt before tax 86.4 56.3 Income tax 5.1, 5.2 -14 . 5 -1 2 .1 Proﬁt for the period 71.9 44.3 Other comprehensive income Items arising due to the redeﬁnition of net deﬁned beneﬁt liability (or asset item) 0.1 -0. 2 Translation differences 0.3 0.3 Other comprehensive income for the year, net of tax 0.4 0 .1 Total comprehensive income for the year, net of tax 72.3 4 4.3 MEUR Note 1.1.–31.12.2022 1.1.–31.12.2021 Proﬁt for the period attributable to Owners of the parent company 71.9 4 3.6 Non-controlling interest 0.0 0.7 Total comprehensive income for the period attributable to: Owners of the parent company 72.3 43 .7 Non-controlling interest 0.0 0.7 Earnings per share calculated from the proﬁt for the period attribut- able to the parent company shareholders (€) Earnings per share (basic) 3.9 0.8 8 0.53 Earnings per share (diluted) 3.9 0. 86 0.52 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 52ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Consolidated balance sheet 429 432 66 86 0 100 200 300 400 500 600 2022 2021 Short term assets Non-current assets MEUR Balance sheet, Assets 495 518 206 166 173 234 117 118 0 100 200 300 400 500 600 2022 2021 Non-interest-bearing liabilities Interest-bearing liabilities Equity MEUR Balance sheet, Equity & liabilities 495 518 MEUR Note 31.12.2022 31.12.2021 ASSETS Non-current assets Goodwill 2.1 294.4 294.5 Other intangible assets 2.1 87.4 90.6 Tangible assets 2.2 3.6 2.3 Right-of-use assets 2.2 30.0 32.9 Shares in associated companies 4.4 4.2 7. 7 Pension receivables, deﬁned beneﬁt plans 3.6 0.0 0.0 Other non-current ﬁnancial assets 3.2 8.8 3.8 Deferred tax assets 5.2 0.6 0.7 429.0 432.5 Current assets Inventories 3.7 0.7 0.7 Tax receivables 0.1 1.8 Trade and other receivables 3.7 35.4 31.5 Cash and cash equivalents 3.2 30.0 51. 9 66.2 85.9 Assets, total 495. 2 518. 4 EQUITY AND LIABILITIES Share capital 45.3 45.3 Share premium reserve 7.7 7. 7 Translation differences 0.6 0.3 Invested non-restricted equity fund 1 9.1 1 9 .1 Retained earnings 13 1 .7 9 1 .1 Equity attributable to owners of the parent 3.9 204.4 1 63.5 Non-controlling interest 1.5 2.9 Total equity 205 .9 166.5 MEUR 31.12.2022 31.12.2021 Non-current liabilities Deferred tax liabilities 5.2 1 7. 2 18.9 Pension liabilities 3.6 0.6 0.8 Lease liabilities 3.3 23 .7 26.8 Non-current ﬁnancial liabilities 3.3 149.6 216.3 191. 2 262 .8 Current liabilities Advances received 45 .4 39. 2 Income tax liability 7. 0 5 .3 Lease liabilities 3.3 7. 0 7. 0 Current ﬁnancial liabilities 3.3 3.0 0.8 Trade and other payables 3.7 35 .9 36.8 98.2 89.1 Liabilities, total 289. 4 351.9 Equity and liabilities, total 495. 2 518 .4 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 53ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Consolidated cash ﬂow statement 75,6 -237,9 166,4 79,2 -3,0 -98,2 -300 -250 -200 -150 -100 -50 0 50 100 150 200 Cash flow from operating activities Cash flow from investments Cash flow from financing 2021 2022 MEUR Cash flow from investing activities MEUR Note 1.1.–31.12.2022 1.1.–31.12.2021 Cash ﬂow from operating activities Proﬁt for the period 71.9 4 4.3 Adjustments 22 .4 3 7.1 Change in working capital -2 . 8 7. 3 Dividends received 0.3 0.4 Interest received 0 .1 0.1 Interest paid -2 .1 -2 . 2 Taxes paid -1 0. 6 -1 1 . 3 Net cash ﬂow from operating activities 79.2 75 .6 Investing activities Acquisitions of tangible assets -3.3 -1 . 5 Acquisitions of intangible assets -5 .7 -2. 3 Proceeds from sale of tangible and intangible assets 0.0 0.4 Other investments -0. 4 -0. 5 Proceeds from sale of available-for-sale ﬁnancial assets 0.0 1 .0 Business acquisitions less cash and cash equivalents at the time of acquisition -5.2 -236 .7 Proceeds from sale of businesses less cash and cash equiva- lents at the time of sale 1.4 2.2 Acquisition of associated companies 4.4 0.0 -0. 4 Proceeds from sale of associated companies 4.4 10 .1 0.0 Cash ﬂows from/(used in) investing activities -3.0 -2 3 7. 9 MEUR Note 1.1.–31.12.2022 1.1.–31.12.2021 Cash ﬂow before ﬁnancing activities 76. 2 -16 2 . 3 Financing activities Long-term loans taken 420.0 Repayment of long-term loans -60.0 -2 2 0.0 Short-term loans taken 36 .0 5 .0 Repayment of short-term loans -34 .0 -5 .0 Payments of lease liabilities -7.1 -7. 5 Acquisition of own shares -4.2 -1 .1 Dividends paid and capital repayment 3.9 -28.9 -24 . 9 Financing activities -98 .2 166.4 Change in cash and cash equivalent funds increase (+) de- crease (-) -2 1 . 9 4.1 Cash and cash equivalents at beginning of period 3.2 51.9 48 .0 Effect of change in foreign exchange rates 0.0 -0. 2 Cash and cash equivalents at end of period 3.2 30.0 51.9 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 54ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS MEUR 1.1.–31.12.2022 1.1.–31.12.2021 Cash ﬂow from operating activities Adjustments: Depreciation, amortisation and impairment 2 17.2 16.7 Share of proﬁt of associated companies 4.4 -0.7 -1.0 Capital gains (losses) on the sale of ﬁxed assets and other investments -7.2 0.0 Financial income and expenses 3.1 -5.8 1.4 Income tax 5.1 14.5 12.1 Change in provisions 1.3 0.0 -0.0 Other adjustments 4.3 7.9 Adjustments, total 22.4 37.1 Change in working capital: Change in trade receivables -6.4 -2.9 Change in inventories 0.0 -0.1 Change in trade payables 3.5 10.3 Change in working capital, total -2.8 7.3 Investing activities Investments ﬁnanced through ﬁnance leases -5.2 -2.1 Gross capital expenditure, payment-based ) -4.2 -2.2 Sold and purchased business operations, non-payment- based -2.4 -237.2 Investments, total -11.8 -241.5 * Excluding investments of acquired businesses REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 55ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Consolidated statement of changes in equity Equity at- Foreign cur- Invested tributable to Non-con- Share premi- rency transla- non-restricted Retained the owners of trolling MEUR Note Share capital um reserve tion reserve equity fund earnings parent interest Total equity Total equity 1 January 2021 45.3 7.7 0.0 19.1 111.4 18 3.6 2 1.0 204 .6 Proﬁt for the period 43.6 43 .6 0.7 4 4.3 Other comprehensive income -0. 2 -0. 2 -0. 2 Translation differences 0.3 0. 3 0.6 0. 8 Transactions with equity holders Dividends paid by parent -24.7 -24.7 -24.7 Share of subsidiaries’ dividends allocated to non-controlling interests 0.0 0.0 0.0 Acquisition of own shares -1 .1 -1 .1 -1 .1 Refund of unredeemed dividends 0.1 0.1 0.1 Tax-like payments related to shares transferred in connection -0. 6 -0.6 -0.6 with the share-based incentive scheme Accrual-based proportion of the share-based incentive 4.2 4.2 4.2 scheme recognised for the ﬁnancial year Acquisitions and other changes in non-controlling interests -41 .6 -41 .6 -19.3 -60.9 Total equity 31 December 2021 3.9 45.3 7.7 0. 3 19.1 91.2 163.6 2.9 166.5 Total equity 1 January 2022 45.3 7.7 0. 3 19.1 91.2 163.6 2.9 166.5 Proﬁt for the period 71.9 71.9 0.0 7 1.9 Other comprehensive income 0.1 0.1 0.1 Translation differences 0.3 0. 3 0.3 0.3 Transactions with equity holders Dividends paid by parent -28 . 8 -2 8 . 8 -28 . 8 Share of subsidiaries’ dividends allocated to non-controlling interests -0 .1 -0.1 Acquisition of own shares -4.2 -4.2 -4.2 Tax-like payments related to shares transferred in connection -4.2 -4.2 -4.2 with the share-based incentive scheme Performance-based proportion of the share-based incentive 4.4 4.4 4.4 scheme recognised for the ﬁnancial year Acquisitions and other changes in non-controlling interests 1.3 1.3 -1 . 4 -0.1 Total equity 31 December 2022 3.9 45.3 7.7 0.6 19.1 131 .7 204.5 1.5 205 .9 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 56ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Accounting principles used in the consolidated ﬁnancial statements Basic information on the Group Alma Media Corporation (1944757-4) is an innovative media group focusing on digital services and journalistic content. The company’s best-known brands are Kauppalehti, Talouselämä, Iltalehti, Etuovi.com, Nettiauto and Jobly. Alma Media generates sus- tainable growth from media to services, providing content and services that beneﬁt users in their everyday lives, work and leisure time. Alma Media operates in 13 Euro- pean countries. The Group’s parent company Alma Media Corporation is a Finnish public company established under Finnish law, domiciled in Helsinki at Alvar Aallon katu 3 C, PL 140, FI-00100 Helsinki, Finland. A copy of the consolidated ﬁnancial statements is available online at www.almamedia. ﬁ or from the parent company head ofﬁce. The Board of Directors approved the ﬁnancial statements for disclosure on 15 Febru- ary 2023. According to the Finnish Limited Liability Companies Act, shareholders have the opportunity to approve or reject the ﬁnancial statements at the General Meeting of Shareholders held after publication. It is also possible to amend the ﬁnancial state- ments at the General Meeting of Shareholders. The ﬁgures in the ﬁnancial statements are independently rounded. Accounting principles The consolidated ﬁnancial statements have been prepared in accordance with the International Financial Reporting Standards, IFRS. The IAS and IFRS standards and SIC and IFRIC interpretations in effect on 31 December 2022 have been applied. In- ternational Financial Reporting Standards refer to the standards and their interpreta- tions approved for application in the EU in accordance with the procedure stipulated in EU regulation (EU) no 1606/2002 and embodied in Finnish accounting legislation and the statutes enacted under it. The notes to the consolidated ﬁnancial statements also comply with Finnish accounting and company legislation. The consolidated ﬁnancial statements are based on the purchase method of ac- counting unless otherwise speciﬁed in the accounting principles below. The ﬁgures in the tables in the ﬁnancial statements are presented in millions of euros except where presenting the ﬁgures at a greater level of accuracy is deemed to be appropri- ate. Changes in accounting principles The changes in IFRS standards that entered into effect in the ﬁnancial year 2022 mainly consisted of amendments to existing standards, and they had no material effect on Alma Media’s consolidated ﬁnancial statements. Translation of items denominated in foreign currencies Figures in the consolidated ﬁnancial statements are shown in euro, the euro being the functional and presentation currency of the parent company. Foreign currency items are entered in EUR at the rates prevailing at the transaction date. Monetary for- eign currency items are translated into EUR using the rates prevailing at the balance sheet date. Non-monetary foreign currency items are measured at their fair value and translated into EUR using the rates prevailing at the balance sheet date. In other respects, non-monetary items are measured at the rates prevailing at the transac- tion date. Exchange rate differences arising from sales and purchases are treated as additions or subtractions respectively in the statement of comprehensive income. Exchange rate differences related to loans and loan receivables are taken to other ﬁnance income and expenses in the proﬁt or loss for the period. The income statements of foreign Group subsidiaries are translated into EUR using the weighted average rates during the period, and their balance sheets at the rates prevailing on the balance sheet date. Goodwill arising from the acquisition of for- eign companies is treated as assets and liabilities of the foreign units in question and translated into EUR at the rates prevailing on the balance sheet date. Translation differences arising from the consolidation of foreign subsidiaries and associated REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 57ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS companies are entered under shareholders’ equity. Exchange differences arising on a monetary item that forms part of the reporting entity’s net investment in the foreign operation shall be recognised in the balance sheet and reclassiﬁed from equity to proﬁt or loss on disposal of the net investment. Operating proﬁt and EBITDA IAS 1 Presentation of Financial Statements does not include a deﬁnition of operating proﬁt or gross margin. Gross margin is the net amount formed when other operating proﬁt is added to net sales, and material and service procurement costs adjusted for the change in inventories of ﬁnished and unﬁnished products, the costs arising from employee beneﬁts and other operating expenses are subtracted from the total. Op- erating proﬁt is the net amount formed when other operating proﬁt is added to net sales, and the following items are then subtracted from the total: material and service procurement costs adjusted for the change in inventories of ﬁnished and unﬁnished products; the costs arising from employee beneﬁts; depreciation, amortisation and impairment costs; and other operating expenses. All other items in the proﬁt or loss not mentioned above are shown under operating proﬁt. Exchange rate differences and changes in the fair value of derivative contracts are included in operating proﬁt if they arise on items related to the company’s normal business operations. Otherwise they are recognised in the ﬁnancial items. Adjusted items Adjusted items are income or expense arising from non-recurring or rare events. Gains or losses from the sale or discontinuation of business operations or assets, transaction costs arising from business acquisitions, gains or losses from restructur- ing business operations as well as impairment losses of goodwill and other assets are recognised by the Group as adjusted items. Adjusted items are recognised in the proﬁt and loss statement within the corresponding income or expense group. Adjust- ed items are described in the Report by the Board of Directors. Accounting principles requiring management’s judgement and key sources of estimation uncertainty The preparation of the consolidated ﬁnancial statements in conformity with IFRS requires management to make estimates and assumptions which may differ from actual results in the future. Management is also required to use its discretion as to the application of the accounting principles used to prepare the statements. The management of the Group makes judgement-based decisions pertaining to the selection and application of the accounting principles used in the ﬁnancial state- ments. This particularly applies in cases where the existing IFRS regulations allow for alternative methods of recognition, measurement and presentation. Alma Media has identiﬁed subscription products and customer loyalty products in accordance with the provisions of IFRS 15. As the item prices of these products are not material, they are not treated as separate performance obligations based on the management’s assessment of materiality. The revenue derived from such products is recognised as part of the main products. According to IFRS 15 Revenue from Contracts with Customers, an entity shall recog- nise revenue when it satisﬁes a performance obligation by transferring a promised good or service to a customer. Alma Media’s exception to the revenue recognition practices required by IFRS 15 is the recognition of revenue from credit packages as- sociated with the recruitment business. In credit package transactions, the customer buys credits against which Alma Media provides advertising sales services during the validity of the credits, subject to an agreed-upon price list. According to the manage- ment’s assessment, recognising revenue evenly over the contract period instead of a revenue recognition model based on actual use leads to essentially the same out- come as recognising revenue based on the use of the credits. The estimates made in conjunction with preparing the ﬁnancial statements are based on the management’s best assessments on the reporting period end date. The esti- mates are based on prior experience, as well as future assumptions that are consid- ered to be the most likely on the balance sheet date with regard to issues such as the expected development of the Group’s economic operating environment in terms of sales and cost levels. The Group monitors the realisation of estimates and assump- tions, as well as changes in the underlying factors, on a regular basis in cooperation with the business units, using both internal and external sources of information. Any changes to these estimates and assumptions are entered in the accounts for the peri- od in which the estimate or assumption is adjusted and for all periods thereafter. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 58ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Future assumptions and key sources of uncertainty related to estimates made on the balance sheet date that involve a signiﬁcant risk of changes to the book values of the Group’s assets and liabilities during the following ﬁnancial year are presented below. The management has considered these components of the ﬁnancial statements to be the most relevant in this regard, as they involve the most complicated accounting pol- icies from the Group’s perspective and their application requires the most extensive application of signiﬁcant estimates and assumptions—for example, in the valuation of assets. In addition, the effects of potential changes to the assumptions and estimates used in these components of the ﬁnancial statements are estimated to be the largest. The determination of the fair value of intangible assets in conjunction with business combinations is based on the management’s estimate of the cash ﬂows related to the assets in question. The determination of the fair value of liabilities related to contin- gent considerations arising from business combinations are based on the manage- ment’s estimate. The key variable in the change in fair value of contingent consider- ations is the estimate of future operating proﬁt. Impairment tests: The Group tests goodwill and intangible assets with an indeﬁnite useful life for impairment annually and reviews any indications of impairment in the manner described above. The amounts recoverable from cash-generating units are recognised based on calculations of their fair value. The preparation of these calcu- lations requires the use of estimates. The estimates and assumptions used to test major goodwill items for impairment, and the sensitivity of changes in these factors with respect to goodwill testing is described in more detail in the note which speciﬁes goodwill. Useful lives: Estimating useful lives used to calculate depreciation and amortisation also requires management to estimate the useful lives of these assets. The useful lives applied for each type of asset are listed in the notes under 2.2 Property, Plant and Equipment and 2.1 Intangible Assets. Other estimates: Other management estimates relate mainly to other assets, such as the current nature of receivables and capitalised R&D costs, to tax risks, to deter- mining pension obligations and to the utilisation of tax assets against future taxable income. For leases that are valid with a reasonable level of certainty but have a short period of notice, the ﬁnancial statements also include an assumption of the period of time the premises in question will be used in business operations. This estimate affects the balance sheet amount of lease liability for the leases for the premises in question. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 59ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Notes to the consolidated ﬁnancial statements 1. Segments and operating proﬁt 1.1 Information by segment Alma Media has three business segments: Alma Career, which focuses on the re- cruitment business and recruitment-related services in Eastern Central Europe and Finland; Alma Talent, which provides ﬁnancial media and services aimed at profes- sionals and businesses; and Alma Consumer, which focuses on the consumer media and marketplaces business. Centralised services produced by the Group’s parent company, as well as centralised support services for advertising and digital sales for the entire Group, are reported as non-allocated items in segment reporting. The Group’s reportable segments correspond to the Group’s operating segments. Segment information is based on internal management reporting, which has been prepared in accordance with IFRS. Recruitment-related services, such as Jobs.cz, Prace.cz, CV-Online, Profesia.sk, Moj- Posao.net, MojPosao.ba, Jobly, the Seduo online training service and Prace za rohem, are reported under the Alma Career segment. In addition to enhancing job advertis- ing, Alma Career’s objective is to expand the business into new services to support the needs of job-seekers and employers, such as job advertising-related technology, digital stafﬁng services and training. Alma Career operates in 10 countries in Europe. Alma Talent’s core business consists of digital subscription-based content media, as well as digital data, content and marketplace services. In addition to the leading ﬁnancial media brand Kauppalehti, Alma Talent’s ﬁnancial and professional media include Talouselämä, Tekniikka&Talous and Arvopaperi. Alma Talent Services offers professionals a comprehensive range of services related to company information, real estate information, law, ﬁnancial management, competence development, leadership and marketing. The Alma Consumer segment consists of a broad offering of over 30 consumer and B2B brands. The business of the Alma Consumer segment includes the multi-chan- nel news and lifestyle media Iltalehti, Finland’s leading housing marketplace Etuovi. com and housing rental marketplace Vuokraovi.com, the automotive marketplaces Nettiauto, Autotalli.com and Nettimoto, as well as the housing and car trade systems that serve companies representing these ﬁelds. In addition, the segment includes comparison services, such as Autojerry, Urakka- maailma and Etua.ﬁ. Netello, which specialises in digital advertising solutions, is also reported under the Alma Consumer segment. Alma Consumer’s competitiveness is based on the reach of media and services as a digital network, the user data pool, and the developing industry verticals in the areas of media, housing, cars and comparison services. The segments’ assets and liabilities are items used by the respective segments in their business operations. The Group’s business is mainly divided between two geographical areas: Finland and the rest of Europe. Alma Career operates in Finland and 10 other European countries, principally the Czech Republic and Slovakia. The Alma Talent segment’s business op- erations are located in Finland and Sweden. The Alma Consumer segment operates in Finland. The revenue and assets for different geographical regions are based on where the services are located. The following tables show the geographical breakdown of the Group’s revenue and assets in 2022 and 2021: REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 60ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Revenue MEUR 2022 Share of total, % 2021 Share of total, % Segments, Finland 197.9 64.1 188.1 68.3 Segments, other countries 110.9 35.9 87.3 31.7 Total 308.8 100.0 275.4 100.0 Operating proﬁt MEUR 2022 Share of total, % 2021 Share of total, % Segments, Finland 48.3 60.4 41.1 72.5 Segments, other countries 44.9 56.1 32.9 58.0 Segments total 93.2 116.5 74.1 130.5 Non-allocated * -13.2 -16.5 -17.3 -30.5 Total 80.0 100.0 56.8 100.0 * The non-allocated operations comprise the common services produced by the parent company. Assets MEUR 2022 Share of total, % 2021 Share of total, % Finland 339.4 68.5 375.2 72.4 Other countries 156.1 31.5 144.0 27.8 Eliminations -0.3 -0.1 -0.9 -0.2 Total 495.2 100.0 518.4 100.0 197.8 188.1 110.9 87.3 0 50 100 150 200 250 300 350 2022 2021 Revenue Finland International MEUR 48.3 41.1 44.9 32.9 -13.2 -17.3 -20 0 20 40 60 80 100 2022 2021 Operating profit Finland International Not allocated MEUR REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 61ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Proﬁt for the period MEUR Alma Career Alma Consum- er Alma Talent Reportable segments total Non-allo- cated items and elimina- tions Group Financial year 2022 EBITDA excluding adjusted items 45.5 29.9 23.1 98.5 -7.8 90.6 Depreciation, amortisation and impairment -2.9 -5.5 -3.4 -11.8 -5.3 -17.2 Operating proﬁt excluding adjusted items 42.5 24.4 19.7 86.6 -13.2 73.4 Adjusted items 6.0 0.2 0.4 6.6 0.0 6.6 Operating proﬁt/loss 48.5 24.6 20.1 93.2 -13.2 80.0 Share of proﬁt of associated companies 0.6 0.0 0.0 0.7 0.0 0.7 Net ﬁnancial expenses -1.1 -0.2 4.2 2.8 3.0 5.8 Proﬁt before tax and appro- priations 48.0 24.3 24.3 96.7 -10.2 86.5 Income tax -14.5 -14.5 Proﬁt for the period 48.0 24.3 24.3 96.7 -24.8 71.9 275.4 308.8 2021 Alma Career Alma Consumer Alma Talent Shared Services 2022 Change in revenue, 2021-2022 MEUR 27.6 9.6 -3.2 -0.7 Revenue MEUR Alma Career Alma Con- sumer Alma Talent Segments, total Non-allocat- ed items and eliminations Group Financial year 2022 Revenue External revenue 110.6 74.4 89.7 274.7 34.1 308.8 Inter-segment revenue -0.8 29.7 6.8 35.7 -35.7 0.0 Segments total 109.8 104.1 96.5 310.4 -1.6 308.8 Financial year 2021 Revenue External revenue 83.1 67.8 94.2 245.0 30.4 275.4 Inter-segment revenue -0.9 26.8 5.5 31.3 -31.3 Segments total 82.2 94.5 99.7 276.4 -0.9 275.4 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 62ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Assets and liabilities MEUR Alma Career Alma Consumer Alma Talent Segments, total Non-allo- cated items and elimi- nations Group Financial year 2022 Assets 86.2 221.9 110.1 418.3 72.7 491.0 Investments in associated companies and joint ventures 3.7 0.0 0.5 4.2 0.1 4.2 Assets, total 89.9 221.9 110.6 422.5 72.7 495.2 Liabilities, total 48.8 14.4 31.9 95.1 194.3 289.4 Capital expenditure 6.0 6.2 3.6 15.8 2.5 18.3 Financial year 2021 Assets 79.7 224.1 113.1 416.9 93.8 510.7 Investments in associated companies and joint ventures 7.2 0.0 0.4 7.6 0.1 7.7 Assets, total 86.9 224.1 113.5 424.5 93.9 518.4 Liabilities, total 39.5 14.2 38.4 92.1 259.8 351.9 Capital expenditure 3.2 180.9 1.0 185.2 61.9 247.1 The assets not allocated to segments comprise ﬁnancial assets and tax receivables. Liabilities not allocated to segments are ﬁnancial and tax liabilities. 61.1 73.4 2021 Alma Career Alma Consumer Alma Talent Shared Services 2022 Change in adjusted operating profit, 2021-2022 MEUR 12.5 -0.8 0.4 0.2 Proﬁt for the period MEUR Alma Career Alma Consumer Alma Talent Report- able segments total Non-allo- cated items and elimi- nations Group Financial year 2021 EBITDA excluding adjusted items 32.8 28.6 24.3 85.7 -7.9 77.8 Depreciation and impairment -2.8 -4.6 -3.7 -11.1 -5.6 -16.6 Operating proﬁt excluding adjusted items 30.0 23.9 20.6 74.5 -13.4 61.1 Adjusted items 0.0 -0.4 0.0 -0.4 -3.9 -4.3 Operating proﬁt/loss 30.0 23.5 20.5 74.1 -17.3 56.8 Share of proﬁt of associated companies 1.0 0.0 0.0 1.0 0.0 1.0 Net ﬁnancial expenses 0.3 -0.2 -0.7 -0.6 -0.9 -1.4 Proﬁt before tax and appro- priations 31.4 23.3 19.8 74.5 -18.2 56.3 Income tax 0.0 -12.1 -12.1 Proﬁt for the period 31.4 23.3 19.8 74.5 -30.2 44.3 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 63ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS IFRS 15 includes a ﬁve-stage framework for the recognition of revenue from contracts with customers. According to IFRS 15, an entity shall recognise revenue at an amount that reﬂects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue can be recognised over time or at a point in time, with the central criterion being the trans- fer of control. Alma Media changed its revenue reporting on 1 March 2021, with revenue now being distributed between marketplaces, media and service revenue. These constitute the Alma Media Group’s signiﬁ- cant revenue streams. The revenue of marketplaces mainly consists of digital advertising revenue. Revenue from classiﬁed digital advertising sales is recognised over time during the term of the advertisement. Revenue from the sales of advertisements with a long contract period (1–12 months) is recognised over the contract period. Advertising revenue in marketplaces and media consists of selling advertising space in the Group’s media and services, both online and in print. The performance obligations in marketplaces and media advertising are advertising online and in print publications, such as display advertising, content marketing and partner sales. Digital revenue from marketplaces and media is recognised over time, primarily based on the timing of the advertisement’s publication, while revenue from print advertising sales is recognised at a point in time, based on publication dates. Media content revenue includes fees for content sold by the Group’s media. Revenue from media content sales is earned from content sold for both print and digital publications. Under media con- tent revenue, digital services and print products are separate performance obligations, with print revenue recognised at a point in time on the publication dates and digital revenue recognised over time during the term of the agreement, relative to calendar days. Service sales include the Alma Talent segment’s book, event and training business and the sale of information services. The Group also has online services aimed at consumers. Service revenue is recognised over time during the period in which the service is delivered. Alma Media also engages in business operations where Alma Media acts as an agent for services pro- vided by external partners. In these cases, Alma Media does not have primary responsibility for the fulﬁlment of the contract. The net amount of consideration is recognised as revenue when the sales transaction occurs. Agency sales represent a small proportion of total revenue. Transaction prices are list prices or contractual customer-speciﬁc prices, less other items that reduce the amount of expected consideration, such as discounts granted. Alma Media’s contracts typically do not include variable amounts of consideration where the related uncertainty would only be resolved after the performance obligation has been fulﬁlled. Due to the nature of Alma Media’s products and services, returning them is not possible as a rule. Accordingly, no refund liabilities arise from their sale. When the period between the transfer of the product or service to the customer and the customer paying for it is one year or less, Alma Media applies the practical expedient by which it does not need to recognise a signiﬁcant ﬁnancing component nor adjust the transaction price for the effects of the time value of money. As a rule, the subscriptions associated with content revenue are paid at the start of the subscription period. Marketplace revenue, media advertising revenue and service revenue are paid at the start of the contract period as a rule. Payments received from customers are treated as prepayments on the balance sheet, from where the prepayments are recognised as revenue as the performance obliga- tions are transferred to customers based on, for example, based on the publication dates of the print products included in subscriptions . Alma Media has incremental costs of obtaining contracts, such as commissions on the sale of publi- cations. Alma Media applies the practical expedient and does not recognise an asset from the costs incurred to obtain a contract. The costs would be recognised as expenses in one year or less. The balance sheet items related to contracts with customers are included in trade receivables, which are described in more detail in note 3.7, and in advances received, which totalled MEUR 45.4 (MEUR 39.2) on 31 December 2022. 1.2 Operating income 1.2.1 Revenue 2022 MEUR Alma Career Alma Consumer Alma Talent Segments, total Non-allocat- ed items and elimina- tions Group Marketplaces 99.2 41.6 6.7 147.5 -2.9 144.6 Media 52.1 53.4 105.5 2.3 107.8 Content media 16.3 34.4 50.8 0.0 50.8 - of which digital 11.9% 50.3% 37.9% Advertising media 35.8 19.0 54.8 2.3 57.1 - of which digital 90.1% 59.5% 80.8% Service revenue 10.6 10.4 36.4 57.3 -1.0 56.3 - of which digital 96.3% 98.7% 59.4% 71.8% Total 109.8 104.1 96.5 310.4 -1.6 308.8 * Service revenue includes rental income that is not treated in accordance with IFRS 15. The amount of rental income is immaterial with respect to the consolidated ﬁnancial statements . 2021 MEUR Alma Career Alma Consumer Alma Talent Segments, total Non-allocat- ed items and elimina- tions Group Marketplaces 74.1 37.3 6.2 117.6 -1.2 116.4 Media 47.9 53.2 101.1 0.8 101.9 Content media 14.7 33.5 48.2 0.0 48.2 - of which digital 3.4% 46.7% 33.5% Advertising media 33.3 19.6 52.9 0.8 53.7 - of which digital 88.6% 57.4% 77.8% Service revenue 8.1 9.3 40.3 57.7 -0.6 57.1 - of which digital 96.8% 98.0% 54.7% 65.7% Total 82.2 94.5 99.7 276.4 -0.9 275.4 * Service revenue includes rental income that is not treated in accordance with IFRS 15. The amount of rental income is immaterial with respect to the consolidated ﬁnancial statements. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 64ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 1.2.2 Other operating income MEUR 2022 2021 Gains on sale of non-current assets 6.9 0.2 Other operating income 0.3 1.2 Total 7.2 1.4 1.3 Operating expenses 1.3.1 Materials and services MEUR 2022 2021 Use of materials and supplies External services 37.6 35.6 Total 37.6 35.6 Materials and services 37.6 35.6 1.3.2 Research and development expenses The Group’s research and development costs in 2022 totalled MEUR 7.6 (MEUR 4.6). MEUR 5.6 (MEUR 3.6) was recognised in the income statement and development expenses of MEUR 1.9 (MEUR 1.0) was capitalised on the balance sheet in 2022. There were capitalised research and developments expenses totalling MEUR 3.7 (MEUR 2.2) on the balance sheet on 31 December 2022 . 1.3.3 Employee beneﬁts expense Employee beneﬁts cover short-term employee beneﬁts, other long-term beneﬁts, beneﬁts paid in connection with dismissal and post-employment beneﬁts. Short-term employee beneﬁts include salaries and beneﬁts in kind, annual holidays and bonuses. Other long-term beneﬁts include, for example, a celebration, holiday or remuneration based on a long period of service. Beneﬁts paid in connection with dismissal are beneﬁts that are paid due to the termination of an employee’s contract and not for service in the compan y . Post-employment beneﬁts comprise pension and beneﬁts to be paid after termination of the employee’s contract, such as life insurance and healthcare. These beneﬁts are classiﬁed as either deﬁned contribution or deﬁned beneﬁt plans. The Group has both forms of beneﬁt plans. The ac- counting principles related to pensions are presented in more detail in Note 3.5 Pension obligations. Past service costs are recognised as expenses through proﬁt or loss at the earlier of the following: when the plan is rearranged or downsized, or when the entity recognises the related rearrangement expenses or beneﬁts related to the termination of employment. MEUR 2022 2021 Wages, salaries and fees 92.2 84.8 Pension costs – deﬁned contribution plans 12.9 11.9 Share-based payment transaction expense 4.4 4.3 Other employee expenses 10.0 8.3 Total 119.6 109.2 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 65ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 59 % 41 % Finland International Personnel 1.3.4 Other operating expenses Speciﬁcation of other operating expenses by category: MEUR 2022 2021 Information technology and telecommunication 30.3 27.2 Business premises 1.7 2.2 Sales and marketing expenses 14.2 11.9 Administration and experts 7.3 8.1 Other employee costs 6.7 4.8 Other expenses 1.4 4.4 Total 61.6 58.6 1.3.5 Audit expenses EUR 1,000 2022 2021 Companies belonging to the PricewaterhouseCoopers chain Audit 244.1 232.8 Reporting and opinions 25.9 4.0 Other 69.2 127.1 Total 339.2 363.4 The non-audit services provided by PricewaterhouseCoopers Oy for Alma Media Group companies in the ﬁnancial period 2022 totalled EUR 69,200 (a total of EUR 127,000 in the ﬁnancial period 2021). Average number of employees, calculated as full-time employees (excl. telemarketers) 2022 2021 Alma Career 682 594 Alma Consumer 374 339 Alma Talent 438 444 Shared operations 184 172 Total 1,679 1,549 Telemarketers on average 196 337 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 66ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 1.4 Salaries, bonuses and share-based payments paid to management The reward scheme of the President and CEO of Alma Media Corporation and other senior management consists of a ﬁxed monetary salary (monthly salary), fringe beneﬁts (company car and a mobile telephone beneﬁt, and a housing beneﬁt for the President & CEO), an incentive bonus related to the achievement of ﬁnancial and operational targets (short-term reward scheme) and a share-based incentive scheme for key employees of the Group (long-term reward scheme) as well as a pension ben- eﬁt for management. 1.4.1 Salaries and bonuses paid to management Parent company President and CEO (Kai Telanne) EUR 1,000 2022 2021 Salaries and other short-term employee beneﬁts 1,007.7 908.4 Post-employment beneﬁts 471.9 415.2 Incentive schemes implemented and paid in the form of shares 908.7 944.5 Total 2,388.4 2,268.1 The ﬁgures in the table are presented on an accrual basis. In 2022, the salary and beneﬁts paid to the President and CEO of the Group totalled EUR 3,450,902 (2021: EUR 1,410,619). Pension beneﬁts of the President and CEO: In addition to statutory employment pension security, the President and CEO has a deﬁned contribution group pension beneﬁt. The supplementary pension contribu- tion of the President and CEO’s ﬁxed annual salary is 37% of the annual salary, which is calculated by adding a computational share of 50% of the maximum incentive to the ﬁxed annual salary. The retirement age is 60 years, at which time the payment of insurance premiums terminates. The pension is determined on the basis of the in- surance savings accrued by the time of retirement. Retirement can be postponed up to 70 years of age. In this case, the pension is determined on the basis of insurance savings adjusted according to the value development of the investment objects . Notice period of the President and CEO: The notice period of the President and CEO is six months. An additional contractual compensation equal to 12 months’ salary is paid if the employer terminates his con- tract without the President and CEO being in breach of contract. This compensation corresponding to the 12-month salary is not paid if the President and CEO resigns on his own initiative. Alma Media’s Board of Directors decides on the appointment and, as necessary, dismissal of the President and CEO. Other members of the Group Executive Team EUR 1,000 2022 2021 Salaries and other short-term employee beneﬁts 2,659.4 2,850.0 Post-employment beneﬁts 857.2 840.6 Incentive schemes implemented and paid in the form of shares 1,853.1 1,782.1 Total 5,369.7 5,472.8 The ﬁgures in the table are presented on an accrual basis. In 2022, the salary and beneﬁts paid to the other members of the Group Executive Team totalled EUR 7,050,554 (2021: EUR 3,954,450). Board of Directors of Alma Media Corporation and beneﬁts paid to its members EUR 1,000 2022 2021 Catharina Stackelberg-Hammarén, Chair since 29 March 2022, member until 29 March 2022 78.0 39.0 Jorma Ollila, Chair until 29 March 2022 3.5 78.5 Eero Broman, Deputy Chair since 29 March 2022 48.3 Petri Niemisvirta, Deputy Chair until 29 March 2022, member since 29 March 2022 40.9 50.2 Heikki Herlin, member since 29 March 2022 39.0 Peter Immonen, member 40.0 40.0 Esa Lager, member 45.5 45.5 Alexander Lindholm, member 39.0 40.0 Kaisa Salakka, member since 29 March 2022 39.0 Päivi Rekonen, member until 29 March 2022 4.0 Total 373.2 297.2 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 67ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS The ﬁgures in the table are presented on an accrual basis. According to the resolu- tion of the General Meeting, the beneﬁts to the Board members are paid as shares of Alma Media Corporation. Salaries and beneﬁts to the Board of Directors, the President and CEO, and other members of the Group Executive Team, total EUR 1,000 2022 2021 Salaries and other short-term employee beneﬁts 4,040.3 4,055.6 Post-employment beneﬁts 1,329.1 1,255.9 Incentive schemes implemented and paid in the form of shares 2,761.8 2,726.6 Total 8,131.2 8,038.1 1.4.2 Share-based retention and incentive schemes Share-Based Incentive Scheme (LTI 2015) In 2015, the Board of Directors of Alma Media Corporation approved the establish- ment of a long-term share-based incentive scheme for the key management of Alma Media (hereinafter referred to as “LTI 2015”). The objective of LTI 2015 is to align the interests of the participants with those of Alma Media’s shareholders by creating a long-term equity interest for the participants and, thus, to increase the company value in the long term as well as to drive performance culture, retain participants and offer them competitive compensation for excellent performance in the company. LTI 2015 consists of annually commencing individual plans, each subject to sepa- rate Board approval. Each of the individual plans consists of three main elements: an investment in Alma Media shares as a precondition for participation in the scheme, matching shares based on the said share investment and the possibility of earning performance-based matching shares. Matching Share Plan In the matching share plan, the participant receives a ﬁxed amount of matching shares against an investment in Alma Media shares. In the matching share plan that commenced in 2015 (LTI 2015 I), the participant receives two matching shares for each invested share free of charge after a two-year vesting period, provided that the other conditions stipulated by the terms of the plan for the receipt of the share- based incentive are still satisﬁed at the time. Performance Matching Plan The performance matching plan comprises a ﬁve-year performance period in total. The potential share rewards will be delivered in tranches after three and ﬁve years if the performance targets set by the Board of Directors are attained. The performance measures used in the performance matching plan that commenced in 2015 are based on the company’s proﬁtable growth and share value. If the perfor- mance targets set by the Board of Directors are attained in full, the participant will receive in total four matching shares for each invested share free of charge, provided that the other conditions stipulated by the terms of the plan for the receipt of the share-based incentive are still satisﬁed at the time. Share-based incentive schemes LTI 2015 III (2017) and LTI 2015 IV (2018) The Board of Directors of Alma Media Corporation has decided on the following share-based incentive schemes for the following years based on the LTI 2015 scheme: LTI 2015 III (2017) and LTI 2015 IV (2018). The main terms of the incentive schemes correspond to those of the share-based incentive scheme that was launched in 2015. The Board of Directors has estimated that no new shares will be issued in connection with LTI 2015. Therefore, the plan will have no dilutive effect on the number of the company’s registered shares. The allocation and maximum reward potential of the share-based incentive scheme for the President and CEO and the Group Executive Team: The information covers the LTI III and LTI IV incentive schemes: Share-Based incentive scheme (LTI 2019) In December 2018, the Board of Directors of Alma Media Corporation decided on changes to the share-based, long-term incentive scheme of the company’s top man- agement. At the same time, the Board of Directors decided to establish a new share- based long-term incentive scheme for the other key employees of Alma Media Cor- poration. The new incentive scheme entered into effect from the beginning of 2019. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 68ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS The Annual General Meeting of Alma Media Corporation held on 29 March 2022 au- thorised the Board of Directors to decide on the repurchase of a maximum of 824,000 shares in one or more lots, and further authorised the Board of Directors to decide on a share issue by transferring shares in possession of the company to implement incentive programmes. In February 2020, the Board of Directors of Alma Media Corporation decided on the commencement of a new period under the long-term share-based incentive scheme for senior management (MSP 2020). The Board of Directors further decided on the commencement of a new period under the performance-based share-based incen- tive scheme aimed at middle management and selected key employees (PSP 2020). In April 2021, the Board of Directors of Alma Media Corporation decided on the com- mencement of a new period under the long-term share-based incentive scheme for senior management (MSP 2021). The Board of Directors further decided on the com- mencement of a new period under the performance-based share-based incentive scheme aimed at middle management and selected key employees (PSP 2021). In February 2022, the Board of Directors of Alma Media Corporation decided on the commencement of a new period under the long-term share-based incentive scheme for senior management (MSP 2022). The Board of Directors further decided on the commencement of a new period under the performance-based share-based incen- tive scheme aimed at middle management and selected key employees (PSP 2022). Recognition of share-based incentives Share-based incentives are recognised in their entirety as equity-settled share-based payment transactions. Share-based incentives payable on the basis of incentive schemes are paid in shares in net amounts after deducting taxes from the amount payable in shares. The incentives are based on the market price of Alma Media’s share on the grant date and recognised as an employee beneﬁt expense over the vesting period with corresponding entries in equity. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 69ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Principal terms and conditions of the performance share plan: Instrument Performance Match- ing Plan MSP 2022 Performance Matching Share Plan PSP 2022 AGM date/ Date of issuing 29 Mar 2022 29 Mar 2022 Maximum number of shares 528,000 290,000 Dividend adjustment No No Initial allocation date 16 Feb 2022 16 Feb 2022 Performance period begins 1 Jan 2022 1 Jan 2022 Performance period ends 31 Dec 2024 31 Dec 2024 Vesting date 28 Feb 2025 28 Feb 2025 Maximum contractual life, years 3.0 3.0 Remaining contractual life, years 2.2 2.2 Maximum number of people entitled to participate 10 80 Payment method Cash & share Cash & share Instrument Performance share plan PSP 2020 Performance share plan MSP 2019 Matching share plan PSP 2019 AGM date/ Date of issuing 18 Dec 2018 18 Dec 2018 18 Dec 2018 Maximum number of shares 226,000 375,000 310,000 Dividend adjustment No No No Initial allocation date 8 May 2020 28 Mar 2019 28 Mar 2019 Performance period begins 1 Jan 2020 1 Jan 2019 1 Jan 2019 Performance period ends 31 Dec 2022 31 Dec 2021 31 Dec 2021 Vesting date 28 Feb 2023 28 Feb 2022 28 Feb 2022 Maximum contractual life, years 2.8 2.9 2.9 Remaining contractual life, years 0.2 Maximum number of people entitled to participate 47 Payment method Cash & share Cash & share Cash & share Instrument Matching share plan MSP 2021 Performance share plan PSP 2021 Matching share plan MSP 2020 AGM date/ Date of issuing 18 Dec 2018 18 Dec 2018 18 Dec 2018 Maximum number of shares 450,000 226,000 390,000 Dividend adjustment No No No Initial allocation date 7 Apr 2021 7 Apr 2021 8 May 2020 Performance period begins 1 Jan 2021 1 Jan 2021 1 Jan 2020 Performance period ends 31 Dec 2023 31 Dec 2023 31 Dec 2022 Vesting date 29 Feb 2024 29 Feb 2024 28 Feb 2023 Maximum contractual life, years 3.0 3.0 2.8 Remaining contractual life, years 1.2 1.2 0.2 Maximum number of people entitled to participate 9 58 9 Payment method Cash & share Cash & share Cash & share Instrument Performance match- ing share plan LTI 2015 IV Performance matching share plan LTI 2015 III Performance matching share plan TSR LTI 2015 IV AGM date/ Date of issuing 12 Feb 2015 12 Feb 2015 12 Feb 2015 Maximum number of shares 195,000 195,000 195,000 Dividend adjustment No No No Initial allocation date 7 May 2018 30 Jun 2017 7 May 2018 Performance period begins 1 Jan 2018 1 Jan 2017 1 Jan 2018 Performance period ends 31 Mar 2021 31 Mar 2022 31 Mar 2023 Vesting date 31 Mar 2021 31 Mar 2022 31 Mar 2023 Maximum contractual life, years 3.8 4.8 4.8 Remaining contractual life, years 0.3 Maximum number of people entitled to participate 31 Payment method Cash & share Cash & share Cash & share REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 70ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Changes during share plan period 1 Jan 2022 Matching share plan MSP 2022 Perfor- mance share plan PSP 2022 Matching share plan MSP 2021 Performance share plan PSP 2021 Matching share plan MSP 2020 Outstanding at the beginning of the report- ing period, pcs 391,500 206,000 344,316 Changes during the period Granted during the period 508,140 258,000 Lost during the period 18,000 20,000 Earned during the period 31 Dec 2022 Outstanding at the end of the period, pcs 508,140 240,000 391,500 186,000 344,316 Changes during share plan period 1 Jan 2022 Perfor- mance share plan PSP 2020 Matching share plan MSP 2019 Perfor- mance share plan PSP 2019 Performance matching share plan TSR LTI 2015 III Performance matching share plan LTI 2015 IV Perfor- mance matching share plan TSR LTI 2015 IV Total Outstanding at the begin- ning of the report- ing period, pcs 203,000 375,000 214,000 139,810 146,988 146,988 2,167,602 Changes during the period Granted during the period 13,729 779,869 Lost during the period 9,000 25,601 6,499 35,042 2,000 116,142 Earned during the period 388,729 188,399 133,311 111,946 822,385 31 Dec 2022 Outstanding at the end of the period, pcs 194,000 144,988 2,008,944 Effect of the share-based incentive programme on the ﬁnancial year’s result and ﬁnancial position MEUR 2022 2021 Costs for the ﬁnancial year, share-based payments 4.4 4.2 Estimate of the total future share payable to the tax authorities of all current LTI incentive schemes after the ﬁnancial period 7.5 8.0 Measurement inputs for the incentives granted during the reporting period Share price at time of granting, EUR 10.88 Share price at end of period, EUR 9.40 Dividend yield assumption, EUR 0.94 Valuation method Monte Carlo simulation Fair value on 31 December 2022, MEUR 3.8 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 71ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Goodwill created through mergers and acquisitions is recorded at the amount by which the sum of the purchase price, the share of the non-controlling interest in the acquired entity and the pur- chaser’s previously held share in the entity exceed the fair value of the net assets acquired. Goodwill is applied to cash-generating units and tested on the transition date and thereafter annually for impairment. Goodwill is measured at the original acquisition cost less impairment losses. Research costs are entered as an expense in the period in which they arise. Development costs arising from the development of new or signiﬁcantly improved products are capitalised as intangible assets when the costs of the development stage can be reliably determined, the product is tech- nically feasible and economically viable, the product is expected to produce an economic beneﬁt and the Group has the intention and the required resources to complete the development effort. Capitalised development costs include the costs of material, labour and testing as well as capital- ised borrowing costs, if any, that directly arise from the process of making the product complete for its intended purpose. Development costs that have previously been recognised as expenses will not be capitalised at a later date . Patents, customer agreements, copyright and software licences with a ﬁnite useful life are shown in the balance sheet and expensed on a straight-line basis in the proﬁt or loss during their useful lives. No depreciation is entered on intangible assets with an indeﬁnite useful life; instead, these are tested annually for impairment. In Alma Media, intangible assets with an indeﬁnite useful life are trademarks measured at fair value at the time of acquisition . The useful lives of intangible assets are 3–10 year s . MEUR Intangible rights Other intangible assets Advances, intangible Goodwill Total Financial year 2022 Acquisition cost 1 Jan 159.9 1.8 2.2 296.2 460.1 Increases 0.5 0.0 5.4 0.0 5.8 Acquisitions of business operations 0.0 0.0 0.0 0.0 0.0 Decreases -0.2 -0.1 -0.2 -0.7 -1.2 Exchange rate differences 1.0 0.0 0.0 0.5 1.5 Transfers between items 2.2 0.0 -2.2 0.0 0.0 Acquisition cost 31 Dec 163.4 1.7 5.1 296.0 466.3 Accumulated depreciation, amortisation and impairment 1 Jan 72.4 1.0 0.0 1.7 75.1 Accumulated depreciation in decreases and transfers 0.0 0.0 0.0 0.0 0.0 Depreciation for the ﬁnancial year 8.7 0.4 0.0 0.0 9.0 Exchange rate differences 0.3 0.0 0.0 0.0 0.3 Accumulated depreciation, amortisation and impair- ments 31 Dec 81.3 1.4 0.0 1.7 84.4 2 Tangible and intangible assets 2.1 Intangible assets and goodwill REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 72ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS MEUR Intangible rights Other intangible assets Advances, intangible Goodwill Total Book value 1 Jan 87.7 0.7 2.2 294.5 385.1 Book value 31 Dec 82.1 0.2 5.1 294.4 381.8 Financial year 2021 Acquisition cost 1 Jan 122.7 1.1 1.1 152.3 277.2 Increases 0.1 1.6 1.9 0.0 3.6 Acquisitions of business operations 41.0 0.0 0.0 142.6 183.6 Decreases -6.6 -0.9 0.0 0.0 -7.5 Exchange rate differences 1.8 0.0 0.0 1.3 3.2 Transfers between items 0.9 0.0 -0.9 0.0 0.0 Acquisition cost 31 Dec 159.9 1.8 2.2 296.2 460.1 Accumulated depreciation, amortisation and impairment 1 Jan 69.3 0.6 0.0 1.7 71.5 Accumulated depreciation in decreases and transfers -5.4 -0.9 0.0 0.0 -6.3 Depreciation for the ﬁnancial year 7.3 1.3 0.0 0.0 8.6 Exchange rate differences 1.2 0.0 0.0 0.0 1.2 Accumulated depreciation, amortisation and impair- ments 31 Dec 72.4 1.0 0.0 1.7 75.1 Book value 1 Jan 53.6 0.4 1.1 150.7 205.8 Book value 31 Dec 87.7 0.7 2.2 294.5 385. 1 Allocation of intangibles with indeﬁnite lives to cash-generating units The book value of intangible assets includes intangible rights totalling MEUR 59.5 which are not depreciated; instead, these rights are tested annually for impairment. In Alma Media, intangible assets with an indeﬁnite useful life are trademarks measured at fair value at the time of acquisition. These non-depreciated intangible rights are allocated to the cash-generating units as follows: MEUR 2022 2021 Alma Career 16.3 15.9 Alma Consumer 26.5 26.8 Alma Talent 16.7 16.7 Assets with indeﬁnite lives, total 59.5 59.4 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 73ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Allocation of goodwill to business operations: MEUR 2022 2021 A signiﬁcant amount of goodwill has been allocated to the following cash-generating units Alma Career 48.8 47.9 Alma Consumer 169.5 169.8 Alma Talent 76.0 76.7 Non-allocated goodwill 0.1 0.1 Total goodwill 294.4 294.5 Goodwill, intangible rights with indeﬁnite useful lives and other long-term assets are tested at the level of cash generating units. In testing for impairment, the recover- able amount is the value in use. Following the model used before, estimated cash ﬂows determined in the test are based on the Group’s strategic forecasts for the following three years conﬁrmed by the Board of Directors and business units’ management. The years following this period are estimated by the management, taking the business cycle into account. The calculations of value in use are based on a period of 5 years. The cash ﬂow for the terminal year is determined on the basis of the cash ﬂow of the most recent year of the forecast period and without a growth assumption. In addition to general economic factors, the main assumptions and variables used when determining cash ﬂows are, for the media business, the growth assumptions for advertising and content sales in different market segments, the unit-speciﬁc average cost of capital (discount rate) and the estimated development of revenue from marketplaces. The growth rate assumptions vary in different market segments and in different product categories. When evaluating growth, past events in the Group and the impact of business cycles are taken into account. The Group’s business, advertising sales in particular, is very dependent on business cycles. A signiﬁcant portion of the Group’s revenue is generated from advertising sales. Advertising sales correlate with changes in GDP, and changes in advertising sales are largely intensiﬁed at cyclical turns. Investments in advertising have been low in Finland in relation to the level of GDP in 2013–2022, even by international comparison. Alma Media estimates that advertising investments will grow, or at least remain at the current level, in the domestic market. The growth assumptions for reve- nue and costs used in the value-in-use calculations are presented in the table below. According to its strategy, the Group has invested in the development of digital prod- ucts and services. Digital services account for over 80% of the Group’s revenue. In digital services, the realised changes are larger and the future growth assumptions are higher than in average advertising investments. The discount rate used in impairment testing has been determined using geo- graphical (country) and business-speciﬁc weighted average cost of capital (WACC) separately for the media business and the digital business. The discount rate is determined net of taxes. The WACC consists of the required return on equity and the required return on debt after corporate taxes (net of taxes as adjusted for ﬁnal pre- sentation purposes). Following capital market theory, the generally accepted method of estimating the cost of equity is the Capital Asset Pricing Model (CAPM). Following On each balance sheet date, the Group assesses the carrying amounts of its assets to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. In addition, the recoverable amounts are assessed annually of goodwill, capitalised development costs for projects in progress and intangible assets with an indeﬁnite useful life. These are assessed regardless of whether or not indications of impairment exist. The re- coverable amounts of intangible and tangible assets are determined as the higher of the fair value of the asset less cost to sell, or the value in use. The value in use refers to the estimated future net cash ﬂows obtainable from the asset or cash-generating unit, discounted to their current value. Impair- ment losses are recognised when the carrying amount of the asset or cash-generating unit exceeds the recoverable amount. Impairment losses are recognised in the proﬁt or loss. An impairment loss may be reversed if circumstances regarding the intangible or tangible assets in question change. Impairment losses recognised on goodwill are never reversed . Impairment testing of goodwill and intangibles with indeﬁnite lives REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 74ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS The most signiﬁcant growth assumptions used in impairment testing Financial year 2022 Revenue growth assumption, % * Expense growth assumption, % * WACC before taxes, % Business Alma Career Finland, the Czech Repub- lic, the Baltic countries, Slovakia 3.6 3.2 12.6 Digital Alma Consumer Finland 2.3 2.9 10.7 Media, digital Alma Talent Finland, Swe- den 1.1 1.9 10.8 Media, digital, services Financial year 2021 Revenue growth assumption, % * Expense growth assumption, % * WACC before taxes, % Business Alma Career Finland, the Czech Repub- lic, the Baltic countries, Slovakia 7.9 8.3 9.7 Digital Alma Consumer Finland 5.8 5.1 8.3 Media, digital Alma Talent Finland, Swe- den 2.5 2.8 8.3 Media, digital, services * The growth assumptions are based on the annual averages for the period . the CAPM, the rate of return on equity can be constructed from the risk-free inter- est rate and a risk premium. Elements of WACC/CAPM have been determined for impairment testing by an independent third party analyst. The calculations take into account the risk-adjusted WACC, in which the beta for the asset item is based on the median of the peer group and the capital structure (D/EV) is based on the industry’s average gearing ratio on the valuation date. The calculations also apply the small enterprise risk premium, approximately 1.43%, which is based on Alma Media’s market capitalisation on the valuation date as well as the statistical analysis of small enter- prise risk premiums conducted by Duff & Phelps. Changes from 2021: No changes were made to the Alma Career and Alma Consumer segments’ tested units. The Alma Talent segment is tested as a single entity instead of by country, which was the case previously. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 75ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Impairment losses and their allocation During the past ﬁnancial year, the Group recognised MEUR 0.6 in impairment losses, which were allocated to other investments. In the management’s view, there are no indications of impairment with regard to the units of Alma Media Group. During the previous ﬁnancial year, the Group recognised MEUR 0.2 in impairment losses, which were allocated to other investments. Sensitivity analyses of impairment testing Goodwill allocated to new business areas, as well as goodwill arising from recent acquisitions, is more sensitive to impairment testing and, therefore, more likely to be subject to impairment loss when the above main assumptions change. In connection with the sensitivity analysis, the impact of an increase in the discount rate (at most 3%), a decrease in marketplaces sales (at most 6%) and a decrease in media sales (at most 6%) on estimated cash ﬂows has been estimated. The sensitivity analysis of marketplaces sales and media sales is based on the management view of the future development on the balance sheet date. The aggregate book values of the Alma Career segment were approximately 17% of the current value of the estimated recoverable amount at the time of testing. The impact of the terminal on the value-in-use was 63% in the calculations. Based on the analysis carried out by the management, the estimated net present value (NPV) of future cash ﬂows has increased by a total of MEUR 102 compared to 2021. This in- crease is particularly attributable to the strong growth of demand in the recruitment business. The effect of the increase in the WACC discount rate compared to the pre- vious ﬁnancial year was approximately MEUR 119. The proﬁtability of the recruitment business is expected to continue to grow in the years to come. The book value of the assets of the Alma Career segment on the reporting date was MEUR 75. Based on the sensitivity analysis performed, the Alma Career business does not involve a signiﬁ- cant risk of future impairment . The aggregate book values of the Alma Consumer segment were approximately 75% of the current value of the estimated recoverable amount at the time of testing. The impact of the terminal on the value-in-use was approximately 67% in the calculations. Based on the analysis carried out by the management, the estimated net present value (NPV) of future cash ﬂows has decreased by a total of MEUR 37 compared to 2021. Proﬁtability remained stable in 2022, especially in the media and marketplaces businesses. The effect of the increase in the discount rate on the decrease in the net present value was approximately MEUR 76. Proﬁt performance is expected to remain stable in the years to come. Based on the sensitivity analysis performed, the Alma Consumer segment is not subject to a signiﬁcant risk of future impairment. The aggregate book values of the Alma Talent segment were approximately 53% of the current value of the estimated recoverable amount at the time of testing. The impact of the terminal on the value-in-use was 66% in the calculations. Based on the analysis carried out by the management, the net present value (NPV) of future cash ﬂows has decreased by a total of MEUR 25 compared to 2021. The proﬁtability of the business has remained stable. The effect of the increase in the discount rate on the decrease in the net present value was approximately MEUR 48. Proﬁt performance is expected to remain stable in the years to come. Based on the sensitivity analysis performed, the Alma Talent business does not include a signiﬁcant risk of future impairment. The balance sheet value of associated companies is assessed in relation to the cash ﬂow obtained from the companies (dividend income), in comparison to their net asset value, or through other assessment of the company’s proﬁt performance with respect to future cash ﬂow estimates. Based on the analysis performed, the shares in associ- ated companies do not include a risk of impairment. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 76ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 2.2 Property, plant and equipment Property, plant and equipment are measured at cost less depreciation, amortisation and impair- ment losses. The acquisition cost includes the costs arising directly from the acquisition of a tangible asset. In the event that a tangible asset comprises several components with different useful lives, each component will be recognised as a separate asset. Straight line depreciation is entered on the assets over their estimated useful lives. Depreciation is not entered on land. The estimated useful lives are: Buildings 30–40 years Structures 5 years Machinery and equipment 3–15 years The residual value and useful life of an asset are reviewed, at a minimum, at the end of each ﬁnancial period and adjusted, where necessary, to reﬂect the changes in their expected useful lives. When an item of property, plant and equipment is replaced, the costs related to this new item are capitalised. The same procedure is applied in the case of major inspection or service operations. Other costs arising later are capitalised only when they give the company added economic beneﬁt. All other expenses, such as normal service and repair procedures, are entered as an expense in the proﬁt or loss as they arise. Gains and losses arising from the decommissioning and sale of tangible assets are recognised through proﬁt and loss under other operating income and expenses. The gains or losses on sale are deﬁned as the difference between the selling price and the remaining acquisition cost . MEUR Buildings and structures Machinery and equipment Other tangible assets Advance pay- ments and pur- chases in progress Total Financial year 2022 Acquisition cost 1 Jan 58.0 2.8 1.4 0.1 62.4 Increases 4.2 1.7 0.0 1.6 7.4 Decreases -0.2 -0.8 -0.1 0.0 -1.2 Exchange rate differences 0.0 0.0 0.0 0.0 0.0 Transfers between items 0.9 0.7 -0.1 -1.6 0.0 Acquisition cost 31 Dec 63.0 4.4 1.2 0.1 68.8 Accumulated depreciation, amortisation and impairment 1 Jan 25.0 1.8 0.2 27.1 Accumulated depreciation in decreases -0.1 -0.8 -0.2 0.0 -1.1 Depreciation for the ﬁnancial year 7.1 1.0 0.1 0.0 8.1 Exchange rate differences 0.1 0.8 0.0 0.0 0.0 Accumulated depreciation, amortisation and impairments 31 Dec 32.1 2.8 0.1 0.0 35.1 Book value 1 Jan 33.0 1.0 1.1 0.1 35.2 Book value 31 Dec 30.9 1.6 0.9 0.1 33.6 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 77ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS MEUR Buildings and structures Machinery and equipment Other tangible assets Advance payments and purchases in progress Total Financial year 2021 Acquisition cost 1 Jan 57.3 2.5 1.3 0.0 61.3 Increases 1.1 0.3 0.1 0.4 1.9 Decreases -0.4 -0.3 0.0 0.0 -0.7 Exchange rate differences 0.0 0.1 0.0 0.0 0.1 Transfers between items 0.0 0.3 0.0 -0.4 -0.1 Acquisition cost 31 Dec 58.0 2.8 1.4 0.1 62.4 Accumulated depreciation, amortisation and impair- ment 1 Jan 20.2 0.3 0.1 20.7 Accumulated depreciation in decreases -1.4 -0.3 0.0 -1.7 Depreciation for the ﬁnancial year 6.2 1.8 0.1 8.1 Exchange rate differences 0.0 0.1 0.0 0.1 Accumulated depreciation, amortisation and impair- ments 31 Dec 25.0 1.8 0.2 27.1 Book value 1 Jan 37.1 2.1 1.2 0.0 40.6 Book value 31 Dec 33.0 1.0 1.1 0.1 35.2 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 78ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Property, plant and equipment include right-of-use assets as follows: MEUR Buildings Machinery and equipment Total Financial year 2022 Acquisition cost 1 Jan 57.0 2.6 59.6 Increases 4.2 1.0 5.2 Decreases -0.2 -0.7 -0.9 Acquisition cost 31 Dec 61.0 2.9 63.9 Accumulated depreciation 1 Jan 25.3 1.4 26.7 Accumulated depreciation in decreases Depreciation for the ﬁnancial year 6.6 0.8 7.3 Accumulated depreciation 31 Dec 31.8 2.1 33.9 Book value 31 Dec 29.2 0.8 30.0 Financial year 2021 Acquisition cost 1 Jan 56.1 1.4 57.5 Increases 0.9 1.2 2.1 Acquisition cost 31 Dec 57.0 2.6 59.6 Accumulated depreciation 1 Jan 19.1 0.2 19.3 Depreciation for the ﬁnancial year 6.2 1.2 7.4 Accumulated depreciation 31 Dec 25.3 1.4 26.7 Book value 31 Dec 31.7 1.2 32.9 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 79ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 3. Capital structure and ﬁnancial expenses 3.1 Financial income and expenses Financial income presented by category of ﬁnancial instrument MEUR 2022 2021 Interest income on held-to-maturity investments 0.1 0.1 Fair value gain on items recognised at fair value through proﬁt or loss Change in the fair value of contingent consideration liabilities 4.2 0.2 Changes in value of non-current investments 0.1 Change in the fair value of interest rate and foreign currency deriva- tives 4.8 0.4 Dividend income from assets measured at fair value through other com- prehensive income 0.1 0.2 Total 9.2 0.9 Financial expenses by category of ﬁnancial instrument MEUR 2022 2021 I nterest expenses from interest-bearing debts measured at amortised cost 1.2 1.1 Interest expenses from leases recognised on the balance sheet and measured at amortised cost 0.5 0.5 Foreign exchange gains and losses (loans and receivables) 0.4 0.1 Changes in value of non-current investments 0.5 Other ﬁnancial expenses 0.7 0.6 Total 3.4 2.3 The Group’s ﬁnancial assets are measured and classiﬁed according to IFRS 9 as follows: mea- sured at amortised cost, measured at fair value through comprehensive income, and measured at fair value through proﬁt or loss. The classiﬁcation is made on initial acquisition and it is based on the objective of the business model and the contractual cash ﬂow characteristics of the ﬁnancial assets. Financial assets measured at fair value through proﬁt or loss are contingent considerations from the sales of the business operations and derivatives. Contingent considerations arise in sales of business operations. The company employs interest rate derivatives to hedge against changes in the interest rates of ﬁnancial liabilities. Contingent considerations and derivatives are measured at fair value as they arise and remeasured on the balance sheet date. Changes in the fair value of the contingent considerations are recognised in the proﬁt or loss. Changes in the fair value of derivatives are rec- ognised through proﬁt or loss in the ﬁnancial items . The measurement of contingent considerations and liabilities is based on the discounted values of estimated future cash ﬂows. The measurement is conducted on each reporting date based on the terms of consideration agreements. The management estimates whether the terms are met on each reporting date . Financial assets measured at amortised cost include trade receivables and other receivables. Im- pairment on trade receivables is recognised based on expected credit losses using the simpliﬁed approach described in Note 3.6.3. Trade receivables and contract assets are written off when the Group has no reasonable expectations of the recovery of the contractual cash ﬂows. Indications that recovering the contractual cash ﬂows cannot be reasonably expected to occur include a debtor experiencing considerable ﬁnancial difﬁculties, the probability of bankruptcy, the failure to make payments or a payment being delayed by more than 180 days. Impairment losses recognised on trade receivables and contract assets are presented under other operating expenses in the income statement. Unquoted shares are measured at acquisition cost in the absence of a reliable fair value. Dividends received from shares are recognised in ﬁnancial income when the right to the dividend is estab- lished. Cash and cash equivalents consist of cash, demand and time deposits, and other short-term highly liquid investments. The Group has assessed that there are no material expected credit losses associ- ated with cash and cash equivalents . The transaction date is generally used when recognising ﬁnancial assets. Financial assets are derecognised from the balance sheet when the Group has lost the contractual right to the cash ﬂows or when the Group has transferred a substantial portion of the risks and income to an external party . 3.2 Financial assets REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 80ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 3.2.1 Other ﬁnancial assets MEUR Balance sheet values 2022 Balance sheet values 2021 Non-current ﬁnancial assets Available-for-sale ﬁnancial assets Unquoted share investments, assets classiﬁed as held for sale 3.4 3.6 Investments held to maturity Interest rate derivatives 5.5 0.2 Total 8.8 3.8 Financial assets, total 8.8 3.8 Unquoted share investments are presented in the following table: MEUR 2022 2021 At beginning of period 3.6 3.9 Other increases 0.4 0.6 Decreases -0.6 0.9 At end of period 3.4 3.6 3.2.2 Cash and cash equivalents MEUR 2022 2021 Cash and bank accounts 30.0 51.9 Total 30.0 51.9 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 81ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 3.3 Financial liabilities The determination of the fair value of liabilities related to contingent considerations arising from business combinations are based on the management’s estimate. The key variables in the change in the fair value of contingent considerations are estimates of future operating proﬁt. Contingent liabilities arising from acquisitions are classiﬁed as ﬁnancial liabilities through proﬁt or loss. They are recognised at fair value in the balance sheet and the change in fair value is recognised in the ﬁnan- cial items through proﬁt or loss. Other ﬁnancial liabilities are initially recognised in the balance sheet at fair value. Later other ﬁnan- cial liabilities are measured at amortised cost. Financial liabilities are included in current and long- term liabilities and can be interest-bearing or non-interest bearing . Costs arising from interest-bearing liabilities are expensed in the period in which they arise. The Group has not capitalised its borrowing costs because the Group does not incur borrowing costs on the purchase, building or manufacturing of an asset in the manner speciﬁed in IAS 23 . The Group leases various ofﬁces, warehouses, equipment and vehicles. Rental contracts are typically made for ﬁxed periods of 6 months to 15 years, but may have extension options as described below. Contracts may include both lease and non-lease components. The Group allocates the consider- ation in the contract to the lease and non-lease components based on their relative stand-alone prices. The other components of leases, such as service agreements, are not included in the balance sheet value. Instead, they are recognised as expenses as they are incurred. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrow- ing purposes. Leases applying to tangible assets in which the Group holds a signiﬁcant share of the risks and rewards incidental to their ownership are recognised as right-of-use assets and as a corresponding liability when the leased asset is available for use by the Group. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabili- ties include the net present value of the following lease payments: • ﬁxed payments • variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date The lease payments are discounted using the interest rate implicit in the lease or the lessee’s incre- mental borrowing rate. The incremental borrowing rate is the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The computational interest rate used in calculating lease liabilities varies between 1.5% and 6.0% depending on the lease agreement, and the amount of the liability is based on the contractual obli- gations pertaining to leases for business premises. If the computational interest rate used in calcu- lating lease liabilities were to be increased by one percentage point, the effect on ﬁnancial expenses would be MEUR 0.3 . The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease payments are allocated between principal and ﬁnance cost. The ﬁnance cost is charged to proﬁt or loss over the lease period so as to produce a constant periodic rate of interest on the re- maining balance of the liability for each period. Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease liability. Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense in proﬁt or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of ofﬁce furniture. Extension and termination options are included in a number of property and equipment leases across the Group. These are used to maximise operational ﬂexibility in terms of managing the assets used in the Group’s operations. Most extension options in ofﬁces and vehicles leases have not been included in the lease liability, because the Group could replace the assets without signiﬁcant cost or business disruption. Alma Media has leases for which the lease term has been deﬁned as valid with reasonable certainty. For these leases, the extension option has been deﬁned as three years. The lease term is reassessed if an option is actually exercised (or not exercised) or the Group be- comes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a signiﬁcant event or a signiﬁcant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee. The lease contracts recognised on the balance sheet are mainly for business premises and cars. Leases for ICT equipment, on the other hand, are treated as off-balance sheet obligations. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 82ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Reconciliation of net debt MEUR Cash and cash equiva- lents Lease liabilities within one year Lease liabilities after one year Loans within one year Loans after one year Total Net debt 1 Jan 2022 51.9 7.0 26.8 200.0 181.8 Cash ﬂows -21.9 -7.1 2.0 -60.0 -43.2 Acquisitions – lease lia- bilities and incentives Increase in IFRS 16 lease liability 4.1 4.1 Exchange rate adjust- ments Other non-cash changes 7.1 -7.1 Net debt 31 Dec 2022 30.0 7.0 23.7 2.0 140.0 142.6 Net debt 1 Jan 2021 48.0 7.0 31.9 0.0 -9.1 Cash ﬂows 4.1 -7.5 200.0 188.3 Acquisitions – lease lia- bilities and incentives Increase in IFRS 16 lease liability 2.0 2.0 Exchange rate adjust- ments Other non-cash changes 7.5 -7.5 Net debt 31 Dec 2021 51.9 7.0 26.8 200.0 181.8 The Group has categorised items recognised at fair value through proﬁt or loss according to the following hierarchy of fair values: 2022 2021 Level 2 Interest rate derivatives 5.5 0.2 Foreign currency derivatives -0.7 -0.3 Level 3 Contingent consideration liabilities arising from the acquisition of business operations 9.9 16.8 Shares measured at fair value through comprehensive income 3.4 3.6 The table describes the Group’s non-current and current ﬁnancial liabilities. MEUR 2022 2021 FINANCIAL LIABILITIES Non-current ﬁnancial liabilities Financial liabilities measured at amortised cost Non-current lease liabilities 23.7 26.8 Non-current loans from credit institutions 140.0 200.0 Liabilities recognised at fair value through proﬁt or loss Contingent consideration liabilities arising from the acquisition of busi- ness operations 9.6 16.3 Other liabilities 0.0 0.0 Total 173.3 243.1 Current ﬁnancial liabilities Based on amortised cost Lease liabilities 7.0 7.0 Short-term loans from credit institutions 2.0 0.0 Liabilities recognised at fair value through proﬁt or loss 1.0 0.8 Foreign currency derivatives 0.7 0.3 Contingent consideration liabilities arising from the acquisition of busi- ness operations 0.3 0.5 Total 9.9 7.8 Financial liabilities total 183.3 250.8 The Group’s ﬁnancial liabilities are denominated in euro and carry a variable interest rate. At the end of 2022, the Group’s interest-bearing liabilities consisted of a Term Loan and lease liabilities. The hedging of the interest rate risk is described in more detail in Note 3.7 Financial risks. The average interest rate of the Group’s ﬁnancial liabilities in 2022 was 0.9% (1.2% in 2021) . REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 83ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Level 1 includes the quoted (unadjusted) prices of identical liabilities in active mar- kets. Level 2 instruments’ fair values are, to a signiﬁcant degree, based on inputs other than the quoted prices included in Level 1, but nevertheless on data that can be ei- ther directly or indirectly veriﬁed for the asset or liability in question. Level 3 includes inputs concerning liabilities that are not based on observable mar- ket data (unobservable inputs). No transfers between the fair value hierarchy levels have taken place during the end- ed ﬁnancial period and the previous ﬁnancial period. The contingent consideration liabilities arose from acquisitions of business opera- tions and are based on the acquired businesses’ projected growth and proﬁt perfor- mance during the period 2021–2025. Depending on individual agreements, the actual total amount of the contingent consideration liabilities may range from MEUR 0 to MEUR 26. Based on the best available information, MEUR 9.9 in liabilities has been recognised in the ﬁnancial statements dated 31 December 2022 (MEUR 16.8 on 31 December 2021). Contingent consideration liability MEUR 31.12.2022 31.12.2021 Fair value of the contingent consideration liability at the start of the period 16.8 19.9 Considerations, settled in cash -2.4 -2.0 Change in fair value during the ﬁnancial period * -4.6 -1.1 Fair value of the contingent consideration liability at the end of the period 9.8 16.8 * Includes changes in the fair value of the contingent consideration liabil- ities for Digitaalinen asuntokauppa DIAS Oy, Asuntopuntari and Netello Systems Oy Contingent consideration assets MEUR 31.12.2022 31.12.2021 Fair value of the contingent consideration assets at the start of the period 0.2 1.8 Change in fair value during previous ﬁnancial periods -0.5 Considerations, settled in cash -0.6 Change in fair value during the ﬁnancial period -0.5 Fair value of the contingent consideration assets at the end of the period 0.2 0.2 The book values of ﬁnancial liabilities correspond to their fair values. The table below separately describes the fair values of derivative contracts and the value of the underlying instruments. Derivative contracts MEUR 2022 2021 Interest rate derivatives Fair value 5.5 0.2 Value of underlying instruments 50.0 50.0 Foreign currency derivative Fair value -0.7 -0.3 Value of underlying instruments 13.7 11.9 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 84ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Maturities of lease liabilities MEUR 2022 2021 Lease liabilities – total minimum lease payments 2022 7.4 2023 7.5 6.6 2024 7.1 6.0 2025 6.6 5.4 2026 6.1 5.4 2027 4.7 Later 1.5 4.5 Total 33.5 35.2 Lease liabilities – present value of minimum lease payments 2022 7.2 2023 7.0 6.3 2024 6.9 5.7 2025 6.3 5.1 2026 5.4 5.0 2027 4.1 Later 1.1 4.3 Total 30.7 33.7 Financial expenses accruing in the future 2.7 1.5 The fair values of forward exchange contracts are determined using the market prices for con- tracts of similar duration on the balance sheet date. The fair values of interest rate swaps have been determined using a method based on the present value of future cash ﬂows, supported by market interest rates and other market information on the balance sheet date. The fair values correspond to the prices the Group would pay or receive in an orderly transaction for the derivative contract in the prevailing market conditions on the balance sheet date . The maturity distribution of ﬁnancial liabilities is described in more detail in Note 3.7. Financial risk s 3.4 Other leases Short-term leases with a term of less than 12 months and leases of low value, such as leases for ICT equipment, are treated as off-balance sheet liabilities. When the Group is the lessor, lease income is entered in the proﬁt or loss on a straight-line basis over the lease term . The Group as the lessee Minimum lease payments payable based on other non-cancellable leases: MEUR 2022 2021 Within one year 0.4 0.4 Within 1–5 years 0.7 0.5 After 5 years 0.0 0.0 Total 1.1 0.9 The Group as the lessor Minimum rental payments receivable based on other non-cancellable leases: MEUR 2022 2021 Within one year 0.2 0.8 Within 1–5 years 0.2 0.1 Total 0.4 0.9 3.5 Pension obligations The Group has both deﬁned contribution pension plans and deﬁned beneﬁt pension plans. The deﬁned beneﬁt pension plans comprise the Group’s old supplementary pension plans for personnel, which have already been discontinued and closed. The beneﬁts associated with them include both supplementary pension beneﬁts and death ben- eﬁts. The Group’s deﬁned beneﬁt pension plans include both funded and unfunded pension plans. The unfunded pension plans are direct supplementary pension obli- REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 85ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS gations, primarily for old employees who have already retired. The new supplemen- tary pension beneﬁts granted by the Group are deﬁned contribution-based pension plans. Obligations arising from deﬁned beneﬁt plans are calculated for each arrangement separately using the Projected Unit Credit Method. Pension costs are recognised as expenses over the beneﬁciaries’ period of employment in the Group based on calculations made by authorised actuaries. The discount rate used in calculating the present value of the pension obligation is based on market yields on high quality cor- porate bonds issued by the company and, if this data is not available, on yields of gov- ernment bonds. The maturity of corporate and government bonds and corresponds to a reasonable extent with the maturity of the pension obligation. The pension plan assets measured at fair value on the balance sheet date are deducted from the pres- ent value of the pension obligation to be recognised in the balance sheet. The net liabilities (or assets) associated with the deﬁned beneﬁt pension plan are recorded on the balance sheet. Service costs for the period (pension costs) and the net interest on the net liabilities associated with the deﬁned beneﬁt plan are recognised through proﬁt or loss and presented under employee beneﬁt expenses. Items (such as actuarial gains and loss- es and return on funded deﬁned beneﬁt plan assets) arising from the redeﬁnition of the net liabilities (or assets) associated with the deﬁned beneﬁt plan are recognised in other comprehensive income in the period in which they arise. Present value of obligations and fair value of assets MEUR 2022 2021 Present value of unfunded obligations 0.6 0.7 Present value of funded obligations 0.2 0.4 Fair value of assets -0.2 -0.3 Pension liability 0.6 0.8 The deﬁned beneﬁt pension obligation on the balance sheet is determined as follows: MEUR 31.12.2022 31.12.2021 Present value of obligations at start of period 1.1 1.1 Divestments Service cost during period 0.0 0.0 Interest cost 0.0 0.0 Actuarial gains and losses -0.2 0.2 Payments of deﬁned beneﬁt obligations -0.1 -0.1 Present value of funded obligations at end of period 0.8 1.1 Fair value of plan assets at start of period 0.3 0.3 Divestments Interest income 0.0 0.0 Actuarial gains and losses -0.1 0.0 Restructuring of contracts 0.0 0.0 Incentive payments paid Payments of deﬁned beneﬁt obligations 0.0 0.0 Fair value of plan assets at end of period 0.2 0.3 Deﬁned beneﬁt pension liabilities 0.6 0.8 Net pension liability Pension liability 0.6 0.8 Pension asset Net pension liability 0.6 0.8 The plan assets are invested primarily in ﬁxed income or share-based instruments, and they have an aggregate expected annual return of 3.0%. A more detailed spec- iﬁcation of the plan assets is not available. The plan assets are considered to be in- cluded in the payment made to the insurance company. The assets are the insurance company’s responsibility and part of the insurance company’s investment assets. Accordingly, no speciﬁcation of the assets can be presented . REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 86ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS The deﬁned beneﬁt pension expense in the income statement is determined as follows: MEUR 2022 2021 Service cost during period 0.0 0.0 Interest cost 0.0 0.0 Interest income 0.0 0.0 Actuarial gains and losses and adjustments -0.1 0.2 Total -0.1 0.2 Changes in liabilities shown on the balance sheet MEUR 2022 2021 At beginning of period 0.8 0.7 Divestments 0.0 0.0 Incentive payments paid Payments of deﬁned beneﬁt obligations -0.1 -0.1 Pension expense in income statement 0.0 0.0 Comprehensive income for the period -0.1 0.2 Deﬁned beneﬁt pension liabilities on the balance sheet 0.6 0.8 A similar investment is expected to be made in the plan in 2023 as in 2022. Sensitivity analysis of the pension plan MEUR Present value of pen- sion obligation Change in present value of pension obli- gation, % Change of +0.5%-p in the discount rate 0.8 -13.6 Change of +0.5%-p in the salary increase assumption 0.2 1.6 Change of +0.5%-p in the pension increase rate 0.8 9.2 The sensitivity analysis uses the same methods as the calculation of the pension ob- ligation. Sensitivity is calculated for changes in the discount rate, the salary increase assumption, pension increases and the insurance company’s bonus index. Sensitivity has been calculated by changing one parameter at a time. Actuarial assumptions used % 2022 2021 Discount rate 3.1 0.3 Future salary increase assumption 3.8 2.9 Inﬂation assumption 2.6 1.7 Future increase in pension beneﬁt 2.8 2.0 The duration of the pension plan is 7–9 years. The duration was calculated based on a discount rate of 3.1% (0.3%). Deﬁned beneﬁt plans expose the Group to several different risks, the most signiﬁcant of which are the following: Asset volatility The calculation of the liabilities arising from the plans uses a discount rate based on the yield of bonds issued by the company. If the yield on the assets used for the plan is lower than this level, there will be a deﬁcit. Inﬂation risk Some of the beneﬁt obligations under the plans are tied to inﬂation, and higher inﬂation will lead to higher liabilities (although a ceiling for inﬂation adjustments has been set in most cases to protect the plan from unusually high inﬂation). Life expectancy As the majority of the obligations under the plans are related to providing lifelong beneﬁts to the members, the expected increase in life expectancy will result in high- er obligations under the plans. 3.6 Working capital 3.6.1 Inventories Inventories are materials and supplies, work in progress and ﬁnished goods. Fixed overhead costs are capitalised to inventories in manufacturing. Inventories are measured at the lower of their acquisition cost or net realisable value. The net realisable value is the sales price REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 87ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS expected to be received on them in the normal course of business less the estimated costs neces- sary to bring the product to completion and the costs of selling. The acquisition cost is deﬁned by the FIFO (ﬁrst-in-ﬁrst-out) method. Within Alma Media, inventories mainly consist of the products sold by the book business. MEUR 2022 2021 Finished products 0.7 0.7 Total 0.7 0.7 3.6.2 Trade and other receivables In recognising expected credit losses, the Group applies the simpliﬁed approach deﬁned in IFRS 9, according to which a loss allowance based on lifetime expected credit losses is recognised for all trade receivables and contract assets. For the purposes of determining expected credit losses, trade receivables have been grouped on the basis of shared credit risk characteristics and delinquency in payment. Credit losses are recognised in other operating expenses . 31.12.2022 MEUR Current 5–30 days past due 31–120 days past due 121–180 days past due More than 180 days past due Total Expected loss rate 0.14% 0.92% 3.43% 32.99% 100% Gross carrying amount – trade re- ceivables 23.0 2.5 1.0 0.0 0.4 26.9 Loss allowance 0.0 0.0 0.0 0.0 0.4 0.5 31.12.2021 MEUR Current 5–30 days past due 31–120 days past due 121–180 days past due More than 180 days past due Total Expected loss rate 0.14% 0.92% 3.43% 32.99% 100% Gross carrying amount – trade re- ceivables 23.1 2.1 0.7 0.1 0.5 26.6 Loss allowance 0.0 0.0 0.0 0.0 0.5 0.6 MEUR 2022 2021 Trade receivables 26.5 26.6 Receivables from associated companies Total 26.5 26.6 Receivables from others Prepaid expenses and accrued income 5.3 4.3 Other receivables 3.6 0.6 Total 8.9 4.9 Receivables, total 35.4 31.5 The book values of trade receivables, other current and non-current receivables and other current investments are estimated to correspond to fair values. The impact of discounting is not signiﬁcant. 3.6.3 Trade payables and other liabilities The book values of trade payables and other liabilities are estimated to correspond with their fair values. The impact of discounting is not signiﬁcant taking the maturity of the liabilities into account. The main items in accrued expenses and prepaid income are allocated wages, sala- ries and other employee expenses. MEUR 2022 2021 Trade payables 3.7 4.2 Owed to associated companies Trade payables 0.0 Accrued expenses and prepaid income 26.2 26.0 Other liabilities 6.0 6.6 Total 35.9 36.8 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 88ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 3.7 Financial risks Financial risk management is part of the Group’s risk management policy. The risk management strategy and plan, the control limits imposed and the course of action are reviewed annually. The Group has a risk management organisation tasked with identifying the risks threatening the company’s business, assess and update them, develop the necessary risk management methods and regularly report on the risks. Alma Media categorises its ﬁnancial risks as follows: Interest rate risk The interest rate risk describes how changes in interest rates and maturities relat- ed to various interest-bearing business transactions and balance sheet items could affect the Group’s ﬁnancial position and net result. The impact of the interest rate risk on net result can be reduced using interest rate swaps, interest forwards and futures and interest or foreign exchange options. The Group’s interest-bearing debt totalled MEUR 172.7 (233.7) on 31 December 2022. The interest-bearing debt consists of a Term Loan of MEUR 140 with a maturity of three years, IFRS 16 lease liabilities, and a short-term commercial paper in the amount of MEUR 2. The Group’s net debt amounted to MEUR 142.6 (181.8) on 31 December 2022. The computational interest rate used in calculating lease liabilities varies between 1.5% and 6.0% depending on the lease agreement, and the amount of the liability is based on the contractual obligations pertaining to leases for business premises. If the computational interest rate used in calculating lease liabilities were to be in- creased by one percentage point, the effect on the Group’s ﬁnancial expenses would be MEUR 0.3. The variable interest rate on the Term Loan is linked to the three-month Euribor rate. If the three-month Euribor rate used as the reference rate for the Term Loan were to increase by one percentage point in 2023, the annual effect on ﬁnancial expenses would be MEUR 1.4. In December 2021, the Group took out an interest rate hedge for its Term Loan. The in- terest rate hedge has a nominal value of MEUR 50. The interest rate hedge agreement is a four-year ﬁxed interest rate agreement that will commence in December 2023. On the balance sheet date, the fair value of the interest rate hedge was MEUR 5.5 (0.2). The change in fair value has been recognised through proﬁt or loss in ﬁnancial items. Foreign exchange risks Transaction risk The transaction risk describes the impact of changes in foreign exchange rates on sales, purchases and balance sheet items denominated in foreign currencies Alma Media’s most signiﬁcant currencies in addition to the euro are the Czech koruna, the Swedish krona and the US dollar. The impact of changes in exchange rates on net result in the most important currencies of the Group can be reduced by the following measures: • Cash ﬂows in the same currency are netted through a common foreign currency account whenever the cost/beneﬁt ratio is signiﬁcant • Known, continuous and signiﬁcant foreign currency cash ﬂow is hedged. The Czech koruna is hedged at a target level of approximately 50% of the cash ﬂow accrued during the next two years. Translation risk A foreign exchange risk that arises from the translation of foreign investments into the functional currency of the parent company, the euro. The risk associated with translating long-term net investments in foreign currencies is assessed on a regular basis. Should there be a clear and permanent risk of a currency devaluating, Group management may decide to hedge the company’s foreign currency exposure. There was no hedged open currency exposure related to translation risk on the balance sheet date. The Group’s open foreign currency derivatives on the balance sheet date are de- scribed in Note 3.3. Capital management risks Liquidity management In December 2021, Alma Media signed a new MEUR 200 Term Loan ﬁnancing facil- ity that will mature in December 2024. This replaced the temporary Bridge Facility agreement that was in place for ﬁnancing acquisitions. Voluntary early repayments amounting to MEUR 60 were made in 2022 to amortise the Term Loan. The ﬁnancing REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 89ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS arrangement includes the usual covenants concerning the equity ratio and the ratio of net debt to EBITDA. The Group met the covenants on 31 December 2022. The new ﬁnancing arrangement also includes a MEUR 30 revolving credit facili- ty (RCF). The facility will be used for the Group’s general ﬁnancing purposes. The revolving credit facility has a maturity of four years and it was entirely unused on 31 December 2022. Liquidity is assessed daily and liquidity forecasts are made at weekly, monthly and 12-month rolling intervals. On the balance sheet date, the company had a commercial paper programme of MEUR 100 in Finland. Within the programme, the company may issue commercial papers to a total value of MEUR 0–100. During the ﬁnancial year, the Group took out MEUR 36 under the commercial paper programme and repaid MEUR 34. Of the com- mercial paper programme, MEUR 2 was in use on 31 December 2022. Long-term capital funding To secure its long-term ﬁnancing needs, Alma Media uses capital market instru- ments, leasing or other ﬁnancial arrangements. The table illustrates the maturity distribution of interest-bearing liabilities and other trade payables and short-term ﬁnancial liabilities: Credit risk The Group’s credit policy is described and documented in the Group credit man- agement policy. The Group does not have signiﬁcant risks of past due receivables because it has a large customer base and no individual customer will comprise a sig- niﬁcant amount. During the ﬁnancial year, credit losses of MEUR 0.4 were recognised through proﬁt or loss. These credit losses were caused by an unexpected change in customers’ economic environment. The maturity structure of trade receivables is presented in Note 3.6.2 Trade and other receivables . Capital management The aim of the Group’s capital management is to support business operations through an optimal capital structure and to secure normal business preconditions. The capital structure is inﬂuenced through dividend distribution, for example. The development of the Group’s capital structure is continuously monitored with gearing and equity ratio key ﬁgures. The company’s ﬁnancing agreements contain covenants concerning the company’s equity ratio and the ratio of net debt to EBITDA. The fol- lowing describes the values of these key ﬁgures in 2022 and 2021 as well as an itemis- ation of net debt and changes therein during the ﬁnancial periods in question . REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 90ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS MEUR 31.12.2022 0–6 months 1 year 1–2 years 2–5 years Over 5 years Total Balance sheet value Loans from ﬁnancial institutions 1.7 1.7 143.5 146.9 140.0 Commercial paper 2.0 2.0 2.0 Contingent consideration liability 9.6 9.6 9.6 Lease liabilities 3.8 3.8 7.1 17.4 1.5 33.5 30.7 Foreign currency derivative 0.4 0.4 0.7 0.7 Trade payables and other current ﬁnancial liabilities 35.9 35.9 35.9 Total 43.7 5.8 160.1 17.4 1.5 228.6 218.9 MEUR 31.12.2021 0–6 months 1 year 1–2 years 2–5 years Over 5 years Total Balance sheet value Loans from ﬁnancial institutions 0.4 0.8 3.5 203.5 208.2 200.0 Contingent consideration liability 16.8 16.8 16.8 Lease liabilities 3.6 3.6 6.6 17.1 4.3 35.2 33.7 Foreign currency derivative 0.2 0.2 0.2 0.2 Trade payables and other current ﬁnancial liabilities 36.8 36.8 36.8 Total 41.0 4.6 10.1 237.4 4.3 297.2 234.0 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 91ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Reconciliation of net debt MEUR 2022 2021 Interest-bearing long-term liabilities 163.7 226.8 Short-term interest-bearing liabilities 9.0 7.0 Cash and cash equivalents 30.0 51.9 Net debt 142.6 181.8 Total equity 205.9 166.5 Gearing, % 69.3% 109.2% Equity ratio, % 45.8% 34.7% 3.8 Information on shareholders’ equity and its management The Group classiﬁes the instruments it has issued in either equity or liabilities (ﬁnan- cial liabilities) based on their nature. An equity instrument is any contract that evi- dences a residual interest in the assets of an entity after deducting all of its liabilities. Expenses related to the issuance or acquisition of equity instruments are presented as a deduction from equity. If the Group acquires equity instruments of its own, their acquisition cost is deducted from equity. The following describes information on Alma Media Corporation’s shares and changes in 2022. Total number of shares Share capital, MEUR Share premium fund, MEUR Invested non-restricted equity fund, MEUR 1.1.2022 82,383,182 45.3 7.7 19.1 31.12.2022 82,383,182 45.3 7.7 19.1 The company has one share series and all shares confer the same voting rights with one vote per share. The shares have no nominal value . Book-entry securities system The company’s shares are registered in the book-entry system. Only such sharehold- ers have the right to receive distributable funds from the company, and to subscribe to shares in conjunction with an increase in the share capital, 1) who are listed as shareholders in the shareholders’ register on the record date; or 2) whose right to receive payment is recorded in the book-entry account of a shareholder listed in the shareholders’ register on the record date, and this right is entered in the share- holders’ register; or 3) whose shares, in the case of registered shares, are registered in their book-entry account on the record date, and as required by section 28 of the Act on the Book-Entry System, the respective manager of the shares is listed on the record date in the shareholders’ register as the manager of said shares. Shareholders whose ownership is registered in the waiting list on the record date have the right to receive distributable funds from the company, and the right to subscribe to shares in conjunction with an increase in the share capital, provided they are able to furnish evidence of ownership on the record date. Own shares Alma Media Corporation owns a total of 198,391 of its own shares, representing 0.2 per cent of the total number of the company’s shares and related votes. The total regis- tered number of Alma Media’s shares is 82,383,182, which entitle to 82,383,182 votes . Foreign currency translation reserve The translation differences fund comprises the exchange rate differences arising from the translation into EUR of the ﬁnancial statements of the independent foreign units. Share premium reserve In cases in which stock options have been decided during the time the previous Finnish Limited Liability Companies Act (29.9.1978/734) was in force, payments re- ceived for share subscriptions based on stock options have been recognised in share capital and the share premium reserve in accordance with the terms of the respective option programmes, less the transaction costs. Distributable funds The distributable funds of the Group’s parent company totalled EUR 156,846,256 on 31 December 2022 . REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 92ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Dividend policy Alma Media aims to pay, on average, more than 50% of the proﬁt for the period in divi- dends or capital repayments over the long term. Redemption of shares A shareholder whose proportional holding of all company shares or whose propor- tional entitlement to votes conferred by the company shares, either individually or jointly with other shareholders, is or exceeds 33.3% or 50% is obligated on demand by other shareholders to redeem such shareholders’ shares. 3.9.1 Earnings per share Basic earnings per share are calculated by dividing the proﬁt for the period attrib- utable to the ordinary equity holders of the parent by the weighted average number of shares outstanding during the year. Diluted earnings per share are calculated by dividing the proﬁt for the period attributable to the equity holders of the parent by the weighted average number of diluted shares during the period . MEUR 2022 2021 Proﬁt attributable to ordinary shareholders of parent 72.0 43.6 Number of shares (1,000 pcs) Weighted average number of shares for basic earnings per share 82,185 82,213 Incentive schemes 1,522 1,778 Diluted weighted average number of outstanding shares 83,706 83,991 Earnings per share (basic) 0.88 0.53 Earnings per share (diluted) 0.86 0.52 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 93ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 4. Consolidation 4.1 General principles of consolidation All subsidiaries are consolidated in the consolidated ﬁnancial statements. Subsidiaries are com- panies in which the Group has a controlling interest. The criteria for control are fulﬁlled when the Group is exposed, or has rights, to variable returns from its involvement with an entity and has the ability to affect those returns through its power over the entity. The accounting principles applied in the subsidiaries have been brought into line with the IFRS principles applied in the consolidated ﬁnancial statements. Mutual holdings are eliminated using the purchase method. Purchase consid- eration and the individualised assets and liabilities of the acquired entity are recognised at their fair value on the acquisition date. The costs related to the acquisition, with the exception of costs arising from the issue of equity or debt securities, are recorded as expenses. Additional purchase cost, if applicable, is recognised at fair value on the acquisition date and classiﬁed as a liability through proﬁt or loss. Additional purchase cost classiﬁed as a liability is measured through proﬁt or loss at fair value on the last day of each reporting period . 4.2 Subsidiaries The Group’s parent and subsidiary relationships are as follows: Holding, % Share of votes, % Company Finland 2022 2021 2022 2021 Parent company Alma Media Corpo- ration Finland Alma Finanssipalvelut Oy Finland 100.0 100.0 Alma Career Oy Finland 100.0 100.0 100.0 100.0 Alma Career, spletno oglasevanje d.o.o Slovenia 100.0 100.0 100.0 100.0 Alma Media Suomi Oy Finland 100.0 100.0 100.0 100.0 Alma Talent Oy Finland 100.0 100.0 100.0 100.0 CV-Online Estonia OÜ Estonia 100.0 100.0 100.0 100.0 Digitaalinen asuntokauppa DIAS Oy Finland 80.5 80.5 80.5 80.5 Etua Oy Finland 100.0 100.0 100.0 100.0 Karenstock Oy Finland 100.0 100.0 100.0 100.0 Kolektiv d.o.o Bosnia and Herzegovina 100.0 100.0 100.0 100.0 Kotikokki.net Oy Finland 65.0 65.0 65.0 65.0 LMC s.r.o Czech Republic 100.0 100.0 100.0 100.0 Talentem s.r.o. Czech Re- public 100.0 100.0 100.0 100.0 Objektvision AB Sweden 100.0 100.0 100.0 100.0 Profesia s.r.o Slovakia 100.0 100.0 100.0 100.0 Profesia s.r.o Czech Republic 100.0 100.0 100.0 100.0 Rantapallo Oy Finland 79.0 79.0 79.0 79.0 SIA CV-Online Latvia Latvia 100.0 100.0 100.0 100.0 Seduo Slovakia Slovakia 100.0 100.0 Suoramarkkinointi Mega Oy Finland 100.0 100.0 100.0 100.0 TAU On-line d.o.o Croatia 100.0 100.0 100.0 100.0 UAB CV-Online LT Lithuania 100.0 100.0 100.0 100.0 Neirone SP. z.o.o Poland 100.0 100.0 Netello Systems Oy Finland 100.0 60.0 100.0 60.0 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 94ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Holding, % Share of votes, % Subsidiaries merged with other Group companies during the ﬁnancial year: Finland 2022 2021 2022 2021 Alma Mediapartners Oy Finland 100.0 100.0 100.0 100.0 Nettix Oy Finland 100.0 100.0 100.0 100.0 Quantiq s.r.o Czech Republic 100.0 100.0 100.0 100.0 Holding, % Share of votes, % Subsidiaries sold during the period: Finland 2022 2021 2022 2021 Müügimeistrite A/S Estonia 80.0 80.0 Telemarket SI A Latvia 72.0 72.0 In 20 22 , dispos als of subsidiaries had an ef fe ct of MEUR - 0. 2 on th e Group’s equity. Itemisation of signiﬁcant non-controlling interests in the Group: Subsidiary Finland Holding, % 2022 Holding, % 2021 Digitaalinen asuntokauppa DIAS Oy Finland 19.5 19.5 During the ﬁnancial year 2022, Alma Media Corporation acquired 40% of the share capital of Netello Systems and thereby increased its shareholding to 100% (previously 60%). The acquisition had an effect of MEUR -0.1 on the Group’s equity. During the ﬁnancial year 2021, Alma Media Corporation acquired the entire share cap- ital of Nettix Oy, 60% of the share capital of Netello Systems and increased its shareholding to 100% in Alma Career Oy (previously 83.34%) and Etua Oy (previously 60%). In 2021, the redemption of the non-controlling interests of 16.66% in Alma Career Oy and 40% in Etua Oy affected the Group’s balance sheet position by the redemption prices of the non-controlling interests being deducted directly from the Group’s eq- uity. The redemption of the minority interest in Alma Career Oy reduced the Group’s equity by MEUR 40 and the redemption of the minority interest in Etua Oy increased the Group’s equity by MEUR 0.7 . Subsidiaries acquired are consolidated from the time when the Group gains the right of control, and divested subsidiaries until the Group ceases to exercise the right of control. All intra-Group transactions, receivables, liabilities and proﬁts are eliminated in the consolidated ﬁnancial state- ments. The distribution of the proﬁt for the year between the parent company owners and non-con- trolling interest shareholders is shown in the statement of comprehensive income. The eventual non-controlling interest in the acquired companies is measured at fair value or to the amount corresponding to the share of the non-controlling interest based on the proportionate share of the speciﬁed net assets. The measurement method is deﬁned for each acquisition separately. The comprehensive income is attributed to parent company shareholders and non-controlling shareholders, even if this were to lead to a negative portion being attributed to non-controlling shareholders. The amount of shareholders’ equity attributable to non-controlling shareholders is shown as a separate item in the balance sheet under shareholders’ equity. Changes in the parent company’s holding in a subsidiary that do not lead to a loss of control are treated as equity transac- tions. In conjunction with acquisitions achieved in stages, the previous holding is measured at fair value through proﬁt or loss. When the Group loses control in a subsidiary, the remaining investment is measured at fair value through proﬁt or loss on the date control in the subsidiary is lost, and the difference is recognised through proﬁt or loss. Acquisitions that took place before 1 January 2010 are recognised according to the provisions valid at the time . 4.3 Business combinations Acquisitions in 2022 The Group did not carry out any acquisitions in 2022. Acquisitions in 2021 The Group carried out the following acquisitions in 2021: Business Acquisition date Acquired share Group share Alma Career segment Quantiq s.r.o Online service 7 Jan 2021 100% 100% Alma Consumer segment Netello Systems Oy Online service 31 Mar 2021 60% 60% Nettix Oy Online service 1 Apr 2021 100% 100% REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 95ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Alma Career Consideration MEUR Fair value Consideration, settled in cash 1.0 Contingent consideration 0.9 Total consideration 1.9 The assets and liabilities recorded as a result of the acquisition were as follows: MEUR Fair values entered in inte- gration Property, plant and equipment 0.8 Trade receivables and other receivables 0.0 Cash and cash equivalents 0.0 Total assets acquired 0.8 Deferred tax liabilities 0.1 Trade payables and other payables 0.2 Total liabilities acquired 0.3 Acquired identiﬁable net assets at fair value, total 0.5 Group’s share of net assets 0.5 Goodwill 1.5 Annual amortisation of intangible assets related to acquisitions 0.0 Alma Consumer Consideration MEUR Nettix Oy Other Total Consideration, settled in cash 171.2 2.9 174.1 Total consideration 171.2 2.9 174.1 The assets and liabilities recorded as a result of the acquisition were as follows: MEUR Nettix Oy Other Total Property, plant and equipment 0.0 0.0 0.1 Intangible assets 38.7 3.1 41.7 Trade receivables and other receivables 1.9 0.3 2.2 Cash and cash equivalents 3.2 0.2 3.4 Total assets acquired 43.8 3.6 47.4 Deferred tax liabilities 7.6 0.6 8.1 Trade payables and other pay- ables 4.7 0.6 5.3 Total liabilities acquired 12.3 1.1 13.4 Acquired identiﬁable net assets at fair value, total 31.6 2.4 34.0 Group’s share of net assets 31.6 1.5 33.0 Non-controlling interest 1.0 1.0 Goodwill 139.7 1.4 141.1 Fair values entered in integration REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 96ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Alma Media completed the acquisition of Nettix Oy from Otava Group in spring 2021. The transaction was announced on 5 March 2021 and closed on 1 April 2021. Nettix Oy is reported as part of the Alma Consumer business segment starting from the second quarter of 2021. Nettix Oy’s business consists of Finland’s leading motor vehicle marketplaces, such as Nettiauto, Nettikone and Nettimoto, and they reach an audience of 2.5 million Finns every week. In 2020, marketplaces generated over 81% of Nettix Oy’s revenue. The compound annual growth rate (CAGR) of the marketplaces was approximately 7% in 2016–2020. In addition, Nettix Oy consists of Konepörssi, the leading professional media for machine and transport business, and the news service Ampparit. As a result of the ac- quisition, a total of 39 Nettix Oy employees (converted to full-time employees) were transferred to Alma Media. The acquisition of Nettix Oy is a continuation of Alma Media’s strategy, which concen- trates on digital media and services. Nettix complements Alma Media’s marketplaces business, offering opportunities for cross-selling and additional sales and the sharing of best practices between the services. Through this acquisition, Alma Media contin- ues its strategic expansion into new digital products and services that address cus- tomer needs and cover the entire value chain, ranging from sales systems to transac- tions. Digitalisation of mobility services and the automotive ecosystem is expected to accelerate even further in the next few years, and sales and purchases will continue to move to digital marketplaces. In 2020, Nettix Oy’s revenue totalled MEUR 22.5, its EBITDA was MEUR 11.2 and its op- erating proﬁt amounted to MEUR 10.0. The purchase price for the acquired business was MEUR 171.2. There are no additional purchase price components included in the transaction. Alma Media ﬁnanced the acquisition entirely with debt. The transaction costs related to the acquisition have amounted to MEUR 4.6, of which MEUR 0.5 was recognised in expenses in 2020 and MEUR 4.1 in other other operating expenses in the ﬁrst half of 2021. The expense is treated as an operating proﬁt adjustment item in 2021. The Nettix Oy acquisition increases Alma Media’s goodwill by MEUR 140. The goodwill consists of the future growth expectations of the business, as well as synergies. Alma Media estimates that the transaction will generate annual synergy gains of approximately MEUR 1.5, mostly associated with media sales, support func- tions, premises, IT systems and IT development. In addition, other intangible assets increased by MEUR 38 in connection with the transaction, consisting of customer agreements amounting to MEUR 16.8 and brands amounting to MEUR 21. The assets recognised at fair value in connection with the acquisition increase depreciation by MEUR 3.4 annually. Nettix Oy’s effect on Alma Media Group’s revenue in 2021 was MEUR 16.5, on EBITDA MEUR 8.2, and on operating proﬁt less PPA amortisation MEUR 5.3. Had Nettix Oy been consolidated into Alma Media Group from the beginning of 2021, its effect on the Group’s revenue would have been MEUR 21.8, on EBITDA 10.7, and on operating proﬁt less PPA amortisation MEUR 6.8. The fair values entered on intangible assets in consolidation relate primarily to acquired customer agreements, the brand and information systems developed in- house. Factors contributing to goodwill were the synergies related to these business- es expected to be realised and the expectation of the growth of the mobility market- places business in the coming years. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 97ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 4.4 Investments in associated companies and joint ventures Associated companies are those in which the Group has a signiﬁcant controlling interest. A signiﬁcant controlling interest arises when the Group holds 20% or more of the company’s voting rights or over which the Group otherwise is able to exercise signiﬁcant control. A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. A joint arrangement is either a joint operation or a joint venture. A joint venture is a joint arrangement whereby the Group has rights to the net assets of the arrangement, whereas in a joint operation, the Group has rights to the assets, and obligations for the liabilities, relating to the arrangement. Associated companies and joint ventures are consolidated using the equity method. Investments in associated companies include any goodwill arising from their acquisition. If the Group’s share of the associated compa- ny’s losses exceeds the book value of the investment, this investment is entered at zero value in the balance sheet and any losses in excess of this value are not recognised unless the Group has obli- gations with respect to the associated companies. The Group’s share of the results of its associated companies is shown as a separate item after operating proﬁt. The Group’s share of its associated companies’ other changes in comprehensive income is recognised in the consolidated comprehen- sive income statement under other comprehensive income . MEUR 2022 2021 Investments in associated companies and joint ventures At beginning of period 7.7 6.6 Increases 0.5 Decreases -4.0 0.0 Share of results 0.7 1.0 Capital repayments received Dividends received -0.2 -0.3 Impairment At end of period 4.2 7. 7 Further information on associated companies: Summary of ﬁnancial information on associated companies and joint ventures (100%). MEUR Alma Career Alma Talent Other associated companies Year 2022 Current assets 4.2 0.5 Non-current assets 10.8 0.0 Current liabilities 0.9 0.2 Non-current liabilities 2.9 0.1 Revenue 24.4 0.8 Proﬁt/loss for the period 3.1 0.1 Other comprehensive income Reconciliation between associated companies’ and joint ventures’ ﬁnan- cial information and the balance sheet value recognised by the Group: Associated company’s net assets 11.3 0.0 0.1 Group’s share of net assets 3.0 0.1 0.1 Goodwill 0.6 0.4 Other adjustments 0.1 Associated companies’ balance sheet value on the consolidated balance sheet 3.7 0.5 0.1 Receivables from associated compa- nies Owed to associated companies Dividends and capital repayments received from associated companies during the period 0.2 MEUR 2022 2021 Paid cash less acquired cash: Cash consideration 236.5 Asset transfer tax and transaction costs 0.0 4.5 Contingent considerations paid during the ﬁnancial year 2.4 Less acquired amounts Cash 3.4 Net cash ﬂow – capital expenditure 2.4 236.7 Consideration paid for acquisitions – cash ﬂow REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 98ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS MEUR Alma Career Alma Talent Other associated companies 2021 Current assets 23.7 0.5 Non-current assets 8.3 0.0 Current liabilities 13.6 0.1 Non-current liabilities 3.0 0.1 Revenue 81.4 0.3 Proﬁt/loss for the period 4.9 -0.1 Other comprehensive income 0 0 Reconciliation between associated companies’ and joint ventures’ ﬁnancial information and the balance sheet value recognised by the Group: Associated company’s net assets 12.5 -0.1 0.1 Group’s share of net assets 3.6 0.1 0.1 Goodwill 3.2 0.4 Other adjustments 1.0 0 Associated companies’ balance sheet value on the consolidated balance sheet 7.2 0.4 0.1 Receivables from associated companies Owed to associated companies Dividends and capital repayments received from associated companies during the period 0.3 Associated companies Segment Holding (%) Share of votes (%) Year 2022 Infostud 3 d.o.o. Alma Career 25.0 25.0 Kytöpirtti Oy Non-allocated 43.2 43.2 Media Metrics Finland Oy Alma Career 25.0 25.0 Suomen Tunnistetieto Oy Alma Talent 25.0 25.0 Vrabotuvanje Online Alma Career 30.0 30.0 During the ﬁnancial year, the Group sold its 21.1% stake in the associated company Bolt Group Oy . REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 99ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 4.5 Related party transactions Alma Media Group’s related parties are its associated companies (see Note 4.4), the companies that they own and afﬁliated companies. The related parties also include the Group’s most signiﬁcant shareholders. The largest shareholders are listed in the Report by the Board of Directors. Related parties also include the company’s management (the Board of Directors, the Presidents and the Group Executive Team). The employee beneﬁts of management and other related party transactions between management and the company are detailed in Note 1.4. Sales of goods and services with related party members are based on the Group’s prices in force at the time of transaction. Related party transactions – associated companies MEUR 2022 2021 Sales of goods and services 0.1 0.1 Purchases of goods and services 0.2 0.1 Trade, loan and other receivables 0.0 0.0 Trade payables -0.1 Related party transactions – principal shareholders MEUR 2022 2021 Sales of goods and services 0.1 0.1 Purchases of goods and services 0.7 0.2 Trade, loan and other receivables 0.0 0.0 Trade payables 0.0 0.0 Acquired businesses 171.2 Divested business operations 1.0 Related party transactions – corporations where management exercises inﬂuence MEUR 2022 2021 Sales of goods and services 0.5 0.2 Purchases of goods and services 0.7 0.2 Trade, loan and other receivables 0.0 0.0 Trade payables * The selling party in the Nettix Oy transaction in 2021 was Otava Markkinapaikat Oy, a subsidiary of Otava Oy, which is Alma Media’s largest shareholder. Otava Oy is Alma Media’s largest share- holder, and the transaction has been classiﬁed as a transaction with a related party. ** In 2021, Alma Media Corporation sold its shareholding in KPK Yhtiöt Oyj (formerly Kes- ki-Pohjanmaan Kirjapaino Oyj) to Ilkka-Yhtymä. The transaction concerned the 24,379 series A shares held by Alma Media Corporation, corresponding to 5.6 per cent of KPK Yhtiöt Oyj’s share capital and 0.5 per cent of votes. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 100ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 5 Other notes 5.1 Income tax The tax expense in the proﬁt or loss comprises the tax based on the company’s taxable income for the period together with deferred taxes. The tax based on taxable income for the period is the taxable income calculated on the applicable tax rate in each country of operation. The tax is adjusted for any tax related to previous periods . MEUR 2022 2021 Current income tax charge 15.5 13.5 Adjustments in respect of current income tax of previous years 0.0 0.0 Deferred taxes -1.0 -1.5 Total 14.5 12.1 Reconciliation of tax expenses in the income statement and tax calculated on the parent company’s tax rate (20.0%) : MEUR 2022 2021 Proﬁt before tax 86.4 56.3 Share of proﬁt of associated companies -0.7 -1.0 Total 85.8 55.3 Tax calculated on the parent company’s tax rate of 20.0% 17.2 11.1 Impact of varying tax rates of foreign subsidiaries -0.4 -0.2 Tax-free income -2.5 -0.1 Non-tax-deductible expenses 0.2 1.3 Items from previous periods Use of previously non-entered deferred tax assets Unrecognised deferred tax asset from the conﬁrmed tax losses 0.0 0.0 Recognition of previously unrecognised deferred tax assets on the bal- ance sheet Other items 0.0 0.1 Tax recognised in the income statement 14.5 12.1 Tax impacts of entries due to IAS 19 accounting principles are included in other com- prehensive income. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 101ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Changes in deferred taxes during 2022: MEUR 31.12.2021 Recognised in income statement Recognised in equity Acquired/sold subsidiaries 31.12.2022 Deferred tax assets Provisions 0.0 0.0 0.0 0.0 0.0 Pension beneﬁts 0.0 0.0 0.0 0.0 0.0 Deferred depreciation 0.0 0.0 0.0 0.0 0.0 Loss for the period rec- ognised in deferred tax assets 0.0 0.0 0.0 0.0 Other items 0.4 0.0 0.0 0.0 0.4 Total 0.5 -0.1 0.0 0.0 0.4 Taxes, net 0.3 0.2 Deferred tax assets on balance sheet 0.7 0.6 Deferred tax liabilitie s 5.2 Deferred tax assets and liabilities Deferred tax assets and liabilities are recognised on all temporary differences between their book and actual tax values. Deferred taxes are calculated using the tax rates enacted by the balance sheet date. However, the deferred tax liability is not recognised on the initial recognition of goodwill or if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable proﬁt or loss. Deferred tax assets are recognised to the extent that it is probable that taxable proﬁt will be avail- able against which the deductible temporary differences can be utilised. A deferred tax liability is recognised on non-distributed retained earnings of subsidiaries when it is likely that the tax will be paid in the foreseeable future. Deferred tax assets and liabilities are netted by the company when they relate to income tax levied by the same tax authority and when the tax authority permits the company to pay or receive a single net tax payment. Deferred taxes are recognised to the extent that it is probable that taxable proﬁt will be available, against which the deductible temporary differences can be utilised. For this purpose, the conditions for the recognition of deferred taxes are assessed on the ﬁnal day of each reporting period. MEUR 31.12.2021 Recognised in income statement Recognised in equity Acquired/sold subsidiaries 31.12.2022 Accumulated depreciation differences 0.2 0.0 0.0 0.0 0.2 Business combinations 17.8 -1.5 0.0 0.0 16.3 Retained earnings of sub- sidiary companies 0.5 0.0 0.0 0.0 0.5 Other items 0.0 0.1 0.0 0.0 0.1 Total 18.6 -1.4 0.0 0.0 17.1 Taxes, net 0.3 0.2 Deferred tax liabilities on balance sheet 18.9 17.2 No deferred tax asset has been recognised on the conﬁrmed losses of Group compa- nies. The utilisation of tax assets requires that the normal operations of such compa- nies would generate taxable income. The losses expire in 2023, at the latest . REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 102ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Changes in deferred taxes during 2021: MEUR 31.12.2020 Recognised in income state- ment Recognised in equity Acquired/sold subsidiaries 31.12.2021 Deferred tax assets Provisions 0.1 -0.1 0.0 0.0 0.0 Pension beneﬁts 0.0 0.0 0.0 0.0 0.0 Deferred depreciation 0.0 0.0 0.0 0.0 0.0 Other items -0.1 0.5 0.0 0.0 0.4 Total 0.0 0.4 0.0 0.0 0.5 Taxes, net 0.2 0.3 Deferred tax assets on bal- ance sheet 0.3 0.7 Deferred tax liabilities Accumulated depreciation differences 0.2 0.0 0.0 0.0 0.2 Business combinations 10.7 -1.1 0.0 8.2 17.8 Retained earnings of subsid- iary companies 0.4 0.1 0.0 0.0 0.5 Other items -0.1 0.1 0.0 0.0 0.0 Total 11.3 -0.9 0.0 8.2 18.6 Taxes, net 0.2 0.3 Deferred tax liabilities on balance sheet 11.5 18.9 5.3 Events after the balance sheet date The period during which matters affecting the ﬁnancial statements are taken into account is the period from the closing of the accounts to the release of the statements. The release date is the day on which the Financial Statements Bulletin will be published. Events occurring during the period re- ferred to above are examined to determine whether they do or do not render it necessary to correct the information in the ﬁnancial statements. Information in the ﬁnancial statements is corrected in the case of events that provide additional insight into the situation prevailing on the balance sheet date. Events of this nature include, for example, information received after the closing of the accounts indicating that the value of an asset had already been reduced on the balance sheet date. Alma Talent Oy, a subsidiary of Alma Media, agreed to acquire the business of the rental commercial property marketplace Toimitilat.ﬁ from Talso Oy. The transaction will be carried out as a business acquisition on 1 January 2023. Business Acquisition date Alma Talent segment Toimitilat .ﬁ Online service 1 Jan 2023 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 103ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Alma Talent Consideration MEUR Fair value Consideration, settled in cash 2.8 Contingent consideration 0.6 Total consideration 3.4 The assets and liabilities recorded as a result of the acquisition were as follows: MEUR Fair values entered in integration Intangible assets 1.1 Total assets acquired 1.1 Deferred tax liabilities 0.2 Total liabilities acquired 0.3 Acquired identiﬁable net assets at fair value, total 0.9 Group’s share of net assets 0.9 Goodwill 2.5 Annual amortisation of intangible assets related to acquisitions 0.2 The fair values entered on intangible assets in consolidation relate primarily to acquired customer agreements, the brand and information systems developed in- house. Factors contributing to goodwill were the synergies related to these business- es expected to be realised and the expectation of the growth of the business premis- es marketplaces business in the coming years. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 104ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Parent company income statement (FAS) EUR Note 1 January–31 December 2022 1 January–31 December 2021 Revenue 6.1 24,627,319 22,680,291 Other operating income 6.2 2,185 196,300 Materials and services 6.3 1,881 15,911 Expenses arising from employee beneﬁts 6.4 15,050,760 11,072,872 Depreciation, amortisation and impairment 6.5 443,291 730,749 Other operating expenses 6.6, 6.7, 6.8 22,374,554 21,547,856 Operating proﬁt (loss) -13,240,981 -10,490,797 Financial income and expenses 6.9 30,972,534 24,749,320 Proﬁt before appropriations and taxes 17,731,553 14,258,522 Appropriations 6.10 26,665,369 19,627,811 Income tax 6.11 -3,300,496 -1,818,067 Proﬁt for the period 41,096,427 32,068,266 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 105ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Parent company balance sheet (FAS) EUR Note 31.12.2022 31.12.2021 ASSETS Non-current assets Intangible assets 6.12 1,206,829 611,405 Property, plant and equipment 6.13 1,275,263 1,009,638 Investments Holdings in Group companies 6.14 500,537,954 529,877,545 Other investments 6.14 2,280,269 1,930,410 Non-current receivables 6.15 5,468,485 234,737 Non-current assets, total 510,768,800 533,663,736 Current assets Current receivables 6.15 31,546,165 26,767,223 Cash and cash equivalents 7,284,931 22,352,457 Current assets, total 38,831,096 49,119,680 Assets, total 549,599,896 582,783,416 EUR Note 31.12.2022 31.12.2021 EQUITY AND LIABILITIES Equity Share capital 45,292,112 45,292,112 Share premium reserve 119,295,759 119,295,759 Other reserves 5,357,269 5,357,269 Invested non-restricted equity fund 110,756,338 110,756,338 Retained earnings (loss) 5,126,546 2,214,360 Proﬁt for the period (loss) 41,096,427 32,068,266 Total equity 6.16 326,924,451 314,984,104 Accumulated appropriations 6.17 181,872 158,241 Liabilities Non-current liabilities 6.18 140,485,840 200,610,241 Current liabilities 6.19 82,007,734 67,030,830 Liabilities, total 222,493,574 267,641,071 Shareholders’ equity and liabilities, total 549,599,896 582,783,416 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 106ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Parent company cash ﬂow statement (FAS) EUR 1 January–31 December 2022 1 January–31 December 2021 Cash ﬂow from operating activities Proﬁt for the period 41,096,427 32,068,266 Depreciation, amortisation and impairment 443,291 730,749 Gains on sale of non-current assets -148,868 Net ﬁnancial expenses (income statement) -27,738,786 -29,919,549 Income tax 3,300,496 1,818,067 Other adjustments -20,951,215 -13,725,849 Change in working capital: Change in trade receivables and other receivables -5,557,372 836,194 Change in trade payables and other payables 305,941 -1,117,097 Dividend received 29,942,746 31,533,254 Interest received 31,142 60,399 Interest expenses paid and other ﬁnance expenses -2,235,102 -1,674,104 Taxes paid -212,449 -2,475,865 Cash ﬂow from operating activities 18,425,119 17,985,597 Capital expenditure Acquisitions of business operations -2,692,408 -238,722,246 Capital repayments 30,000,000 5,000,000 Acquisitions of tangible assets -384,445 -35,539 Acquisitions of intangible assets -919,894 Other investments -350,000 -230,000 Proceeds from sale of available-for-sale ﬁnancial assets 950,000 Proceeds from sale of tangible and intangible assets 407,458 Acquisition and sale of associated companies -450,000 Net cash ﬂows from/(used in) investing activities 25,653,253 -233,080,327 Cash ﬂow before ﬁnancing activities 44,078,371 -215,094,730 EUR 1 January–31 December 2022 1 January–31 December 2021 Financing activities Non-current loans taken 419,440,972 Repayment of non-current loans -60,000,000 -220,000,000 Current loans taken 26,000,000 11,000,000 Repayment of current loans -24,000,000 -11,000,000 Acquisition of own shares -4,191,315 -1,135,557 Change in interest-bearing receivables 12,248,738 24,091,493 Group contributions received and paid 19,600,000 11,440,000 Dividends paid -28,803,320 -24,695,940 Net cash ﬂows from/(used in) ﬁnancing activities -59,145,897 209,140,968 Change in cash and cash equivalent funds (increase +/decrease -) -15,067,526 -5,953,762 Cash and cash equivalents at beginning of period 22,352,457 28,306,219 Cash and cash equivalents at end of period 7,284,931 22,352,457 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 107ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Accounting principles used in the parent company’s ﬁnancial statements General information Alma Media Corporation is a Finnish public limited company incorporated under Finnish law. Its registered ofﬁce is in Helsinki at the address Alvar Aallon katu 3 C, P.O. Box 140, FI-00101 Helsinki, Finland. Parent company ﬁnancial statements The ﬁnancial statements of the parent company are prepared in accordance with Finnish Accounting Standards (FAS). The parent company was established on 27 January 2005. On 7 November 2005, the old Alma Media Corporation was merged with Almanova Corporation, which adopted the name Alma Media Corporation after the merger. The merger difference arising in conjunction with the merger has been capitalised to the Group’s shares. Non-current assets Tangible and intangible assets are capitalised at direct acquisition cost less planned depreciation and write-downs. Planned depreciation is calculated from the original acquisition cost based on the estimated economic life of the asset. The land areas are not depreciated. The economic lifetimes of the assets are as follows: Machinery and equipment 3–10 years Other intangible assets 5–10 years Intangible rights 5–10 years Research and development costs Research costs are recognised as an expense in the ﬁnancial period during which they are incurred. Development costs are capitalised when it is expected that the in- tangible asset will generate future economic added value and the costs arising from this can be reliably determined. Taxes Taxes in the income statement are the taxes corresponding to the results of the Group companies during the ﬁnancial year as well as adjustments to taxes in previ- ous years. No deferred tax assets are recognised in the parent company’s accounts. Foreign currency items Foreign currency items are entered at the rates prevailing on the transaction date. Receivables and payables on the balance sheet are valued at the average rate on the balance sheet date. Exchange rate differences arising from sales and purchases are treated as additions or subtractions, respectively, in the income statement. Realised and unrealised exchange rate differences related to loans and loan receivables are recognised in other ﬁnancial income and expenses in the income statement. The parent company does not have any signiﬁcant foreign currency loans. Pension commitments Statutory and voluntary employee pension beneﬁts for the parent company's per- sonnel are arranged mainly through pension insurance companies. Other employee beneﬁts The parent company has a long-term share-based incentive scheme for key man- agement in effect. In accordance with Finnish Accounting Standards (FAS), the op- tion beneﬁt and the share reward are not measured at fair value, nor is the calculated employee beneﬁt expensed in the income statement. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 108ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Notes to the parent company’s ﬁnancial statements 6.1 Revenue by market area MEUR 2022 2021 Finland 24.6 22.7 Total 24.6 22.7 6.2 Other operating income MEUR 2022 2021 Gains on the sale of assets 0.0 0.2 Other income 0.0 0.0 Total 0.0 0.2 6.3 Materials and services MEUR 2022 2021 Materials and services 0.0 0.0 Total 0.0 0.0 6.4 Employee expenses MEUR 2022 2021 Wages, salaries and fees 12.8 8.7 Pension expenses 1.4 1.6 Other payroll-related expenses 0.9 0.8 Total 15.1 11.1 Average number of employees 100 99 Salaries and bonuses paid to management President and CEO 1.0 0.9 Other members of the Group Executive Team 2.7 2.9 Members of the Board of Directors 0.4 0.3 Total 4.0 4.1 The beneﬁts to which the President and CEO of the parent company is entitled are described in more detail in Note 1.4.1 to the consolidated ﬁnancial statements. 6.5 Depreciation and write-downs MEUR 2022 2021 Depreciation on tangible and intangible assets 0.4 0.7 Total 0.4 0.7 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 109ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 6.6 Other operating expenses MEUR 2022 2021 Information technology and telecommunication 12.7 10.7 Business premises 6.1 6.3 Other expenses 3.6 4.5 Total 22.4 21.5 6.7 Auditors’ fees EUR 1,000 2022 2021 Audit 244.1 232.3 Reporting and opinions 25.9 4.0 Tax consultation Other 69.2 127.1 Total 339.2 363.4 Parent company audit expenses include audit fees for the whole group. 6.8 Research and development costs The Group’s research and development costs in 2021 totalled EUR 125,000 (EUR 140,000). No development costs were capitalised on the balance sheet in 2022 or 2021. 6.9 Financial income and expenses MEUR 2022 2021 Dividend income From Group companies 29.8 31.2 From associated companies 0.2 0.3 From others 0.0 0.0 Total 29.9 31.5 Income from other non-current investments From others 0.2 Other interest and ﬁnancial income From Group companies 0.0 0.1 Fair value gain on ﬁnancial assets at fair value through proﬁt or loss 5.2 0.2 From others 0.0 0.0 Total 5.3 0.3 Impairment of non-current investments Impairment of shares in Group companies -2.0 -5.6 Total -2.0 -5.6 Interest expenses and other ﬁnancial expenses To Group companies -0.8 To others -1.5 -1.7 Total -2.3 -1.7 Foreign exchange rate gains/losses Foreign exchange rate gains and losses 0.1 0.0 Financial income and expenses, total 31.0 24.7 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 110ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 6.10 Appropriations MEUR 2022 2021 Difference between planned depreciation and depreciation made for tax purposes 0.0 0.0 Group contribution 26.7 19.6 Total 26.7 19.6 6.11 Income tax MEUR 2022 2021 Income tax from regular business operations -3.3 -1.8 Total -3.3 -1.8 6.12 Intangible assets MEUR Intangible rights Advance payments Total Financial year 2022 Acquisition cost 1 Jan 3.4 3.4 Increases 0.9 0.9 Acquisition cost 31 Dec 3.4 0.9 4.3 Accumulated depreciation, am- ortisation and impairment 1 Jan 2.7 2.7 Depreciation for the ﬁnancial year 0.3 0.3 Accumulated depreciation 31 Dec 3.1 3.1 Book value 31 Dec 2022 0.3 0.9 1.2 MEUR Intangible rights Total Financial year 2021 Acquisition cost 1 Jan 6.3 6.3 Decreases -3.0 -3.0 Acquisition cost 31 Dec 3.4 3.4 Accumulated depreciation, am- ortisation and impairment 1 Jan 5.0 5.0 Accumulated depreciation in decreases -3.0 -3.0 Depreciation for the ﬁnancial year 0.7 0.7 Accumulated depreciation 31 Dec 2.7 2.7 Book value 31 Dec 2021 0.6 0.6 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 111ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 6.13 Tangible assets MEUR Buildings Machinery and equipment Other tangible assets Total Financial year 2022 Acquisition cost 1 Jan 0.2 1.1 1.3 Increases 0.4 0.4 Decreases Acquisition cost 31 Dec 0.6 1.1 1.8 Accumulated depreciation 1 Jan 0.1 0.2 0.3 Accumulated depreciation in decreases Depreciation for the ﬁnancial year 0.1 0.1 0.1 Accumulated depreciation 31 Dec 0.2 0.2 0.5 Book value 31 Dec 2022 0.4 0.9 1.3 Financial year 2021 Acquisition cost 1 Jan 0.5 0.1 1.2 1.8 Increases 0.0 0.0 Decreases -0.5 0.0 -0.5 Acquisition cost 31 Dec 0.0 0.2 1.1 1.3 Accumulated depreciation 1 Jan 0.3 0.1 0.1 0.5 Accumulated depreciation in decreases -0.3 -0.3 Depreciation for the ﬁnancial year 0.0 0.0 0.1 0.1 Accumulated depreciation 31 Dec 0.1 0.2 0.3 Book value 31 Dec 2021 0.0 0.0 0.9 1.0 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 112ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 6.14 Investments MEUR Shares in Group companies Shares in associated companies Shares, other Total Financial year 2022 Acquisition cost 1 Jan 663.2 1.6 0.3 665.2 Increases 2.7 0.4 3.0 Decreases -30.0 -30.0 Transfers between items Acquisition cost 31 Dec 635.7 1.6 0.7 638.0 Accumulated depreciation, amortisation and impairment 1 Jan 133.2 133.2 Accumulated depreciation in decreases and transfers Impairment 2.0 2.0 Accumulated depreciation, amortisation and impairments 31 Dec 135.2 135.2 Book value 31 Dec 2022 500.5 1.6 0.7 502.8 Financial year 2021 Acquisition cost 1 Jan 432.4 1.2 0.8 434.4 Increases 235.8 0.5 0.2 236.5 Decreases -5.0 -0.7 -5.7 Transfers between items Acquisition cost 31 Dec 663.2 1.6 0.3 665.2 Accumulated depreciation, amortisation and impairment 1 Jan 127.6 127.6 Accumulated depreciation in decreases and transfers Impairment 5.6 5.6 Accumulated depreciation, amortisation and impairments 31 Dec 133.2 133.2 Book value 31 Dec 2021 530.0 1.6 0.3 531.8 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 113ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Parent company holdings in Group companies and associated companies Company Registered ofﬁce Holding % Share of votes, % Group holding % Subsidiaries Alma Career Oy Helsinki, Finland 100.00 100.00 100.00 Alma Finanssipalvelut Oy Helsinki 100.00 100.00 100.00 Alma Media Suomi Oy Helsinki 100.00 100.00 100.00 Alma Talent Oy Helsinki 100.00 100.00 100.00 Etua Oy Helsinki 100.00 100.00 100.00 Karenstock Oy Helsinki 100.00 100.00 100.00 Kotikokki.net Oy Helsinki 65.00 65.00 65.00 Netello Systems Oy Helsinki 100.00 100.00 100.00 Objektvision AB Stockholm, Sweden 100.00 100.00 100.00 Rantapallo Oy Helsinki 79.00 79.00 79.00 Associated companies Infostud 3 d.o.o. Serbia 25.00 25.00 25.00 Kytöpir tti Oy Seinäjoki, Finland 43.20 43.20 43.20 Suomen Tunnistetieto Oy Turku, Fin - land 25.00 25.00 25.00 During the ﬁnancial year 2022, Alma Media Corporation acquired 40% of the share capital of Netello Systems and thereby increased its shareholding to 100% (previously 60%). Alma Mediapartners Oy and Nettix Oy were merged with Alma Media Suomi Oy during the ﬁnancial year 2022. 6.15 Receivables MEUR 2022 2021 Non-current receivables Interest rate derivatives 5.5 0.2 Non-current receivables, total 5.5 0.2 Current receivables Receivables from Group companies Loan receivables 28.8 22.8 Prepaid expenses and accrued income 0.7 0.7 Total 29.5 23.4 Receivables from others Trade receivables 0.0 0.0 Other receivables 0.1 0.1 Prepaid expenses and accrued income 1.9 3.2 Total 2.0 3.4 Current receivables, total 31.5 26.8 * Cash and cash equivalents in Group bank accounts are included in loan receivables. ** Major items in prepaid expenses and accrued income consist of purchase invoice accruals. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 114ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 6.16 Shareholders’ equity MEUR 2022 2021 Restricted shareholders' equity Share capital 1 Jan 45.3 45.3 Share capital 31 Dec 45.3 45.3 Share premium reserve 1 Jan 119.3 119.3 Share premium reserve 31 Dec 119.3 119.3 Other reserves 1 Jan 5.4 5.4 Other reserves 31 Dec 5.4 5.4 Restricted shareholders' equity total 169.9 169.9 Non-restricted shareholders’ equity Invested non-restricted equity fund 1 Jan 110.8 110.8 Invested non-restricted equity fund 31 Dec 110.8 110.8 Retained earnings 1 Jan 34.3 27.5 Cancellation of unpaid dividends 0.1 Dividend payment -28.8 -24.7 Acquisition of own shares -4.2 -1.1 Disposal of own shares 3.8 0.5 Retained earnings 31 Dec 5.1 2.2 Proﬁt for the period 41.1 32.1 Non-restricted shareholders’ equity total 157.0 145.0 Total equity 326.9 315.0 MEUR 2022 2021 Calculation of the parent company's distributable funds on 31 December Invested non-restricted equity fund 110.8 110.8 Capitalised research and development costs -0.1 -0.2 Proﬁt from the previous year 5.1 2.2 Proﬁt for the period 41.1 32.1 Total 156.9 144.8 6.17 Appropriations MEUR 2022 2021 Difference between planned depreciation and depreciation made for tax purposes 0.2 0.2 6.18 Non-current liabilities MEUR 2022 2021 Loans from credit institutions 140.0 200.0 Other non-current liabilities 0.5 0.6 Total 140.5 200.6 REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 115ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS 6.19 Current liabilities MEUR 2022 2021 Loans from credit institutions 2.0 Trade payables 0.9 0.6 Total 2.9 0.6 Liabilities to Group companies Trade payables 0.0 0.0 Other liabilities 73.7 62.5 Accrued expenses and prepaid income Total 73.7 62.5 To others Other current liabilities 0.4 0.6 Accrued expenses and prepaid income 5.1 3.3 Total 5.4 3.9 Current liabilities total 82.0 67.0 Most of the accrued expenses and prepaid income consist of allocated employee expenses. 6.20 Commitments and contingencies MEUR 2022 2021 Collateral for Group company’s commitments Guarantees 2.5 2.5 Other own commitments Rental commitments – within one year 5.6 5.8 Rental commitments – after one year 20.2 25.1 Rental commitments total 25.9 30.9 Total Guarantees 2.5 2.5 Other commitments 25.9 30.9 Commitments total 28.4 33.4 Alma Media has a MEUR 30 committed ﬁnancing limit at its disposal, which was entirely unused on 31 December 2022. The company also has a commercial paper programme of MEUR 100 in Finland. Of the commercial paper programme, MEUR 2 was in use on 31 December 2022. 6.21 Derivative contracts MEUR 2022 2021 Interest rate derivative Fair value 5.5 0.2 Nominal value 50.0 50.0 * The fair value represents the return that would have arisen if the derivative had been cleared on the balance sheet date. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 116ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS The distributable funds of the Group’s parent company totalled EUR 156,856,329 on 31 December 2022. There were 82,383,182 shares carrying dividend rights. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.44 per share be paid for the ﬁnancial year 2022. Based on the number of outstanding shares on the balance sheet date 31 December 2022, the divi- dend payment totals EUR 36,161,308. Catharina Stackelberg-Hammarén Chair of the Board Eero Broman Deputy Chair of the Board Petri Niemisvirta Board member Kaisa Salakka Board member Heikki Herlin Board member Esa Lager Board member Peter Immonen Board member Alexander Lindholm Board member AUDITOR’S NOTE A report on the audit carried out has been submitted today. Helsinki, 15 February 2023 PricewaterhouseCoopers Oy Authorised Public Accountants Niina Vilske Authorised Public Accountant No essential changes have taken place after the end of the ﬁnancial year with respect to the company’s ﬁnancial standing. The proposed distribution of proﬁt does not, in the view of the Board of Directors, compromise the company’s liquidity. Signatures to the report by the Board of Directors and the ﬁnancial statements Helsinki, 15 February 2023 Kai Telanne President and CEO REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 117ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Auditor’s Report To the Annual General Meeting of Alma Media Corporation Report on the Audit of the Financial Statements Opinion In our opinion, • the consolidated ﬁnancial statements give a true and fair view of the group’s ﬁnancial position and ﬁnancial performance and cash ﬂows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU • the ﬁnancial statements give a true and fair view of the parent company’s ﬁnancial performance and ﬁnancial position in accordance with the laws and regulations governing the preparation of the ﬁnancial statements in Finland and comply with statutory requirements. Our opinion is consistent with the additional report to the Audit Committee. What we have audited We have audited the ﬁnancial statements of Alma Media Oyj (business identity code 1944757-4) for the year ended 31 December 2022. The ﬁnancial statements comprise: • the consolidated balance sheet, statement of comprehensive income, statement of changes in equity, statement of cash ﬂows and notes, including a summary of signiﬁcant accounting policies • the parent company’s balance sheet, income statement, statement of cash ﬂows and notes. Basis for Opinion We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion. Independence We are independent of the parent company and of the group companies in accor- dance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulﬁlled our other ethical responsibilities in accordance with these requirements. To the best of our knowledge and belief, the non-audit services that we have provid- ed to the parent company and to the group companies are in accordance with the ap- plicable law and regulations in Finland and we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014. The non-audit services that we have provided are disclosed in note 1.3.5 to the Financial Statements. Our Audit Approach Summary Materiality • We have applied an overall group materiality of EUR 4,0 million Group scoping • We have audited the parent company and its subsidiaries in Finland, Czech Republic and Slovakia. Key audit matters • Valuation of goodwill and intangibles with indeﬁnite lives • Valuation of holdings in group companies (parent company) As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the ﬁnancial statements. In particular, we considered where management made subjective judgements; for example, in respect of signiﬁcant ac- counting estimates that involved making assumptions and considering future events that are inherently uncertain. (Translation of the Finnish Original) REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 118ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Materiality The scope of our audit was inﬂuenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the ﬁnancial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expect- ed to inﬂuence the economic decisions of users taken on the basis of the ﬁnancial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated ﬁnancial statements as set out in the table below. These, together with qualitative consid- erations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the ﬁnancial statements as a whole. Overall group materiality EUR 4,0 million How we determined it We used 5% of proﬁt before tax to determine overall group materiality. Rationale for the materiality benchmark applied We chose proﬁt before tax as the benchmark because, in our view, it is the bench- mark against which the performance of the group is most commonly measured by users, and is a generally accepted benchmark. We chose 5% which is within the range of acceptable quantitative materiality thresholds in auditing standards. How we tailored our group audit scope We tailored the scope of our audit, taking into account the structure of the group, the accounting processes and controls, and the industry in which the group operates. We have performed audit procedures in the most signiﬁcant subsidiaries in Finland, Czech Republic and Slovakia. We have considered that the remaining subsidiaries don’t present a reasonable risk of material misstatement for consolidated ﬁnancial statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most signiﬁcance in our audit of the ﬁnancial statements of the current period. These matters were addressed in the context of our audit of the ﬁnancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evi- dence of bias that represented a risk of material misstatement due to fraud. Key audit matter in the audit of the group Valuation of goodwill and intangibles with indeﬁnite lives Refer to Accounting principles and note 2.1 of the consolidated ﬁnancial statements On 31 December 2022 the Group’s goodwill balance amounted to EUR 294,4 million and intangible rights with indeﬁnite lives EUR 59,5 million. Goodwill and intangible rights with indeﬁnite lives are allocated to the cash-generating units. The Company tests goodwill for potential impairment whenever there is an indica- tion that the carrying value may be impaired and at least once a year. The impairment testing is carried out by comparing the recoverable amount against the carrying value of goodwill. The recoverable amounts are determined using the value in use model. Value in use calculations are subject to signiﬁcant management judgement with respect to cash ﬂows forecasts and discount rates. Valuation of goodwill and intangible rights with indeﬁnite lives is a key audit matter due to the signiﬁcance of the balance sheet amount and the high degree of manage- ment judgement involved. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 119ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS How our audit addressed the key audit matter Our audit procedures included, for example, the following procedures: • We assessed the methodology applied in the value in use calculation by com- paring it to the requirements of IAS 36, Impairment of Assets, and testing the mathematical accuracy of calculations. • We evaluated the process by which the future cash ﬂow forecasts were deter- mined for the value in use model and compared the forecasts to the budgets and strategic plans approved by the Board of Directors. • We assessed the reasonableness of cash ﬂow forecasts, for example, by compar- ing the accuracy of prior period revenue growth and operating proﬁt forecasts to actual outcomes. • We considered whether the sensitivity analysis performed by the management around key assumptions was appropriate. • The discount rates applied within the model were assessed by PwC business valuation specialists. • We assessed the adequacy and the appropriateness of the disclosures in the ﬁnancial statements. Key audit matter in the audit of the parent company Valuation of holdings in group companies Refer to note 6.14 of the parent company’s ﬁnancial statements On 31 December 2022 holdings in group companies in the parent company’s balance sheet amounted to EUR 500,5 million. The parent company has accounted for a EUR 2,0 million impairment of holdings in group companies during the ﬁnancial year. The holdings in group companies are tested annually for impairment by comparing the recoverable amount against the book value of an individual holding. The recover- able amounts are determined using the value in use model. Valuation of holdings in group companies is a key audit matter due to the signiﬁ- cance of the balance sheet amount and the high degree of management judgement involved. How our audit addressed the key audit matter Our audit procedures included, for example, the following procedures: • We evaluated the process by which the future cash ﬂow forecasts were deter- mined for the value in use model and compared the forecasts to the budgets and strategic plans approved by the Board of Directors. • We assessed the reasonableness of cash ﬂow forecasts, for example, by compar- ing the accuracy of prior period revenue growth and operating proﬁt forecasts to actual outcomes. • The discount rates applied within the model were assessed by PwC business valuation specialists. There are no signiﬁcant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated ﬁnancial statements or the parent company ﬁnancial statements. Responsibilities of the Board of Directors and the Managing Director for the Financial Statements The Board of Directors and the Managing Director are responsible for the prepara- tion of consolidated ﬁnancial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of ﬁnancial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of ﬁnancial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁnancial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The ﬁnancial statements are prepared using the going concern basis of accounting unless there is an inten- tion to liquidate the parent company or the group or to cease operations, or there is no realistic alternative but to do so. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 120ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the ﬁnancial state- ments as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individual- ly or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements. As part of an audit in accordance with good auditing practice, we exercise profession- al judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the ﬁnancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁcient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may in- volve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to de- sign audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company’s or the group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonable- ness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of the Board of Directors’ and the Managing Di- rector’s use of the going concern basis of accounting and based on the audit ev- idence obtained, whether a material uncertainty exists related to events or con- ditions that may cast signiﬁcant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the ﬁnancial state- ments, including the disclosures, and whether the ﬁnancial statements represent the underlying transactions and events so that the ﬁnancial statements give a true and fair view. • Obtain sufﬁcient appropriate audit evidence regarding the ﬁnancial information of the entities or business activities within the group to express an opinion on the consolidated ﬁnancial statements. We are responsible for the direction, supervi- sion and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other mat- ters, the planned scope and timing of the audit and signiﬁcant audit ﬁndings, includ- ing any signiﬁcant deﬁciencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have com- plied with relevant ethical requirements regarding independence, and to communi- cate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most signiﬁcance in the audit of the ﬁnancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a mat- ter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest beneﬁts of such communication. Other Reporting Requirements Appointment We were ﬁrst appointed as auditors by the annual general meeting on 20 March 2014. Our appointment represents a total period of uninterrupted engagement of 9 years. REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 121ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Other Information The Board of Directors and the Managing Director are responsible for the other infor- mation. The other information comprises the report of the Board of Directors and the information included in the Annual Report, but does not include the ﬁnancial state- ments and our auditor’s report thereon. We have obtained the report of the Board of Directors prior to the date of this auditor’s report and the Annual Report is expected to be made available to us after that date. Our opinion on the ﬁnancial statements does not cover the other information. In connection with our audit of the ﬁnancial statements, our responsibility is to read the other information identiﬁed above and, in doing so, consider whether the other information is materially inconsistent with the ﬁnancial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations. In our opinion • the information in the report of the Board of Directors is consistent with the infor- mation in the ﬁnancial statements • the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstate- ment of this other information, we are required to report that fact. We have nothing to report in this regard. Helsinki 15 February 2023 PricewaterhouseCoopers Oy Authorised Public Accountants Niina Vilske Authorised Public Accountant (KHT) REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 122ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS Independent Auditor’s Reasonable Assurance Report on Alma Media Corporation’s ESEF Financial Statements To the Management of Alma Media Oyj We have been engaged by the Management of Alma Media Oyj (business identity code 1944757-4) (hereinafter also “the Company”) to perform a reasonable assurance engagement on the Company’s consolidated IFRS ﬁnancial statements for the ﬁnancial year 01 January–31 December 2022 in European Single Electronic Format (“ESEF ﬁnancial statements”). Management’s Responsibility for the ESEF Financial Statements The Management of Alma Media Oyj is responsible for preparing the ESEF ﬁnancial statements so that they comply with the requirements as speciﬁed in the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 (“ESEF requirements”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of ESEF ﬁnancial statements that are free from material non- compliance with the ESEF requirements, whether due to fraud or error. Our Independence and Quality Control We have complied with the independence and other ethical requirements of the Inter- national Code of Ethics for Professional Accountants (including International Indepen- dence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, conﬁdentiality and professional behaviour. Our ﬁrm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and pro- cedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Our Responsibility Our responsibility is to express an opinion on the ESEF ﬁnancial statements based on the procedures we have performed and the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the Interna- tional Standard on Assurance Engagements (ISAE) 3000 (Revised) Assurance Engage- ments Other than Audits or Reviews of Historical Financial Information. That standard requires that we plan and perform this engagement to obtain reasonable assurance about whether the ESEF ﬁnancial statements are free from material noncompliance with the ESEF requirements. A reasonable assurance engagement in accordance with ISAE 3000 (Revised) involves performing procedures to obtain evidence about the ESEF ﬁnancial statements com- pliance with the ESEF requirements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material noncompliance of the ESEF ﬁnancial statements with the ESEF requirements, whether due to fraud or error. In mak- ing those risk assessments, we considered internal control relevant to the Company’s preparation of the ESEF ﬁnancial statements. We believe that the evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion. Opinion In our opinion, Alma Media Oyj’s ESEF ﬁnancial statements for the ﬁnancial year ended 31 December 2022 comply, in all material respects, with the minimum requirements as set out in the ESEF requirements. Our reasonable assurance report has been prepared in accordance with the terms of our engagement. We do not accept, or assume responsibility to anyone else, except for Alma Media Oyj for our work, for this report, or for the opinion that we have formed. Helsinki 13 March 2023 PricewaterhouseCoopers Oy Authorised Public Accountants Niina Vilske Authorised Public Accountant (KHT) REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 123ANNUAL REPORT 2022 SUSTAINABILITY REPORT FINANCIAL STATEMENTS CORPORATE GOVERNANCE STATEMENT 2022 Contents 126 135 142 The Shareholders’ Nomination Committee Internal control and risk management systems in ﬁnancial reporting Corporate Governance Statement of Alma Media Corporation 127 136 144 Alma Media Group President & CEO and Group Executive Team of Alma Media Corporation Auditing 128 140 Board of Directors of Alma Media Corporation Insider Management FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 125ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Corporate Governance Statement I n 2022, Alma Media Corpo- ration applied the Finnish Corporate Governance Code 2020 for listed companies, which entered into force on 1 January 2020, in its unaltered form. A Corporate Governance State- ment, required by the Corporate Gover- nance Code, is presented as a separate report in connection with the Financial Statements. In addition, it is publicly available on Alma Media’s website: www. almamedia.ﬁ/en/investors/governance/ corporate-governance. The Audit Committee of Alma Media Corporation’s Board of Directors has reviewed the Corporate Governance Statement. The statement will not be updated during the ﬁnancial period, but up-to-date information on its sections is available on Alma Media’s website: https://www.almamedia.ﬁ/en/investors/ governance/corporate-governance. The Finnish Corporate Governance Code is downloadable from the website of the Securities Market Association: www.cgﬁnland.ﬁ. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 126ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Alma Media Group R esponsibility for Alma Media Group’s manage- ment and operations belongs to the consti- tutional bodies required by the Limited Liability Companies Act: the General Meeting of Shareholders, which elects the mem- bers of the Board of Directors; and the President and CEO, who is appointed by the Board of Directors. Alma Media Corporation’s supreme deci- sion-making body is the General Meet- ing of Shareholders, where shareholders exercise their decision-making power. The Board of Directors is responsible for the company’s governance and its appropriate organisation. In its capacity as the Group’s parent company, Alma Media Corporation is responsible for the Group’s management, legal affairs, cor- porate restructuring, strategic planning, ﬁnancial administration, human resourc- es and facilities management, ﬁnancing, ICT, internal and external communica- tions as well as the Alma brand. Alma Media Group has three reporting segments. The Alma Career segment consists of the recruitment business and comple- mentary services that respond to the needs of jobseekers and employers in 11 European countries. The Alma Consumer segment includes the national afternoon paper Iltalehti, automotive and housing marketplaces and comparison services, as well as housing and automotive sales systems that serve companies in those industries. The Alma Talent segment publishes subscription-based ﬁnancial and profes- sional media and provides digital data, content and marketplace services for professionals and companies in various industries to support business growth. Alma Media’s shared sales function (Alma Media Solutions) is a sales and development organisation that serves the business segments’ advertiser customers. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 127ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Board of Directors of Alma Media Corporation T he Shareholders’ Nomination Committee of Alma Media Corporation prepares a pro- posal for the General Meeting regarding the composition and remuneration of the Board of Directors. The Board of Directors shall comprise no fewer than three (3) and no more than nine (9) members elected by the Annual General Meeting. The term of ofﬁce of a member of the Board shall be one (1) year, ending at the close of the Annual General Meeting following their election. The President and CEO of the company may not act as the Chair of the Board. There is no spe- ciﬁc order of appointment of members of the Board. The Annual General Meeting decides on the remuneration and travel allowances of the members of the Board of Directors. The Board Diversity Policy sets out the prin- ciples concerning the diversity of the Board of Directors. The principles are available in their entirety on the Alma Media website at http://www.almamedia.ﬁ/en/investors/ governance/board-of-directors. Pursuant to the Board Diversity Policy, the Board of Directors and its members, as a group, shall have sufﬁcient complemen- tary expertise and experience on matters related particularly to the company’s line of business and operations, the management of a listed company, ﬁnancial statements and ﬁnancial reporting, internal control and risk management, strategy, acquisitions and corporate governance. The members of the Board of Directors shall represent diverse expertise and qualiﬁ- cations and the diversity of the members’ age and gender distribution, academic and professional backgrounds and experience of the international business shall support the company’s business and its development. Members of the Board of Directors shall possess the necessary qualiﬁcations and the opportunity to dedicate sufﬁcient time to their duties as members of the Board. The num- ber of members and the composition of the Board of Directors shall enable the effective fulﬁlment of the Board’s responsibilities. Both genders shall be represented on the Board of Directors. Composition of the Board and shareholdings of members The Annual General Meeting 2022 elected the following members to the Board of Directors: Catharina Stackelberg-Hammarén, Eero Broman, Heikki Herlin, Peter Immonen, Esa Lager, Alexander Lindholm, Petri Niemisvirta and Kaisa Salakka. The Chair of the Board was Catharina Stackelberg-Hammarén and the Deputy Chair was Eero Broman. Catharina Stackelberg-Hammarén Chair of the Board of Directors Born: 1970 M.Sc. (Econ.) Finnish citizen Senior Advisor Marketing Clinic Oy Member of the Board 2009–, member of the Nomination and Compensation Committee Essential work experience • Marketing Clinic Oy: Executive Chair 2019–2022 • Marketing Clinic Oy: CEO 2004–2019 • Coca-Cola Finland: Managing Director 2003–2004 and 2000–2002 • Coca-Cola AB: Managing Director 2002–2003 • Coca-Cola Nordic & Baltic Division: Marketing Director (Copenhagen) 2000 • Coca-Cola Finland: Consumer Marketing Manager 1996–2000 • Sentra plc: Marketing Manager 1994–1996 Principal positions of trust • Marimekko Oyj: member of the Board 2014–2022 • Marketing Clinic Oy: member of the Board 2004– • Royal Unibrew A/S: member of the Board 2019– • Kojamo plc: member of the Board 2021– • Purmo Group Oy: member of the Board 2021– • Knowit Insight Oy: member of the Board 2022– Independent of the company and its signiﬁcant shareholders Shareholding on 31 December 2022 28,535 Alma Media Corporation shares FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 128ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT CEO of Broman Yhtiöt Oy Deputy Chair of the Board, member of the Board 2022–, member of the Audit Committee Essential work experience • Broman Companies Oy: CEO 2019– • Motonet Oy: CEO 2007–2016 • Broman Group Ltd: Director of Administration 1987–1995 • Broman Group Ltd: Vice President 1995–2016 Principal positions of trust • Broman Group Ltd,:Vice Chair of the Board 2022–, Chair of the Board 2013–2021: member of the Board 1987– • Motonet Oy: member of the Board 2007– • Suomalainen Kirjakauppa Oy: member of the Board 2013– • Eventio Group,: Chair of the Board 2019– • Varma Mutual Pension Insurance Company: member of the Supervisory Board 2018– Independent of the company, but not independent of its signiﬁcant shareholder. Shareholding on 31 December 2022 367,071 Alma Media Corporation shares Eero Broman Born: 1963 M.Sc. (Econ.) Finnish citizen Chair of the Board until 29 March 2022 Member of the Board 2019–2022, Member of the Board’s Nomination and Compensation Committee until 29 March 2022 Essential work experience • Nokia Corporation: Chair of the Board, CEO, Chair of the Group Executive Board 1999–2006 • Nokia Corporation: President and CEO and Chair of the Group Executive Board 1992–1999 • Nokia Mobile Phones: President 1990–1992 • Nokia Corporation: CFO 1986–1989 Principal positions of trust • TBG AG: member of the Board 2016– • Perella Weinberg Partners Inc: member of the Board 2014– • Miltton Group Oy: Chair of the Board 2015– • The Finnish Innovation Fund Sitra: member of the Board 2020– • Algorithmiq Inc.: Chair of the Board 2021– Independent of the company, but not independent of its signiﬁcant shareholder. Shareholding on 29 March 2022 20,448 Alma Media Corporation shares Jorma Ollila Born: 1950 M.Soc.Sc., M.Sc. (Econ.), M.Sc. (Tech.) Finnish citizen Chair of the Board of Mariatorp Oy Member of the Board 2022–, member of the Audit Committee Essential work experience • Mariatorp Oy, CEO, Chair of the Board 2017– • Freelancer: editor, producer 2015–2017 Principal positions of trust • Yellow Film & TV: member of the Board 2018– • Publishing company Teos: member of the Board 2018– • Riikka Herlin Foundation: Chairman of the Board, member 2018– Independent of the company, but not independent of its signiﬁcant shareholder. Shareholding on 31 December 2022 15,030 Alma Media Corporation shares directly , and 15,675,473 Alma Media Corporation shares through Mariatorp Oy Heikki Herlin Born: 1990 Graduate in Political Sciences Finnish citizen FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 129ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Alexander Lindholm Born: 1969 BBA Finnish citizen Otava Group, CEO 2010– Member of the Board 2018–, member of the Nomination and Compensation Committee Essential work experience • Yhtyneet Kuvalehdet /Otavamedia CEO 2008–2012 • Yhtyneet Kuvalehdet: Publishing Director 2005–2007 • Yhtyneet Kuvalehdet: Sales Director 2001–2004 Principal positions of trust • Otava Ltd: member of the Board 2008– • Yhtyneet Kuvalehdet Oy/Otavamedia Ltd, member of the Board/Chair 2008– • Otava Publishing Company Ltd: Chair of the Board 2010– • Suomalainen Kirjakauppa Ltd: Chair of the Board 2011– • Kirjavälitys Oy: Chair of the Board 2013– Independent of the company, but not independent of its signiﬁcant shareholder. Shareholding on 31 December 2022 5,625 Alma Media Corporation shares WIP Asset Management Oy: Chair of the Board 2005– Member of the Board 2018–, Chair of the Nomination and Compensation Committee Essential work experience • WIP Asset Management Oy: Chair of the Board 1995–2001 and 2005–, Managing Director 2002–2005 Principal positions of trust • Mariatorp Oy: member of the Board 2015– • Wipunen varainhallinta Oy: member of the Board 2005– • Dasos Capital Oy: member of the Board 2010– • Finsilva Oyj: member of the Board 2015– • Stiftelsen Svenska Handelshögskolan, member of the Board 2019– Independent of the company, but not independent of its signiﬁcant shareholder. Shareholding on 31 December 2022 5,625 Alma Media Corporation shares Peter Immonen Born: 1959 M.Sc. (Econ.) Finnish citizen Member of the Board 2014–, Chair of the Audit Committee Essential work experience • Outokumpu Group: Deputy CEO 2011–2013 • Outokumpu Group: Chief Financial Ofﬁcer (CFO) 2005–2013 • Outokumpu Group: Director, Financing and Administration 2001–2004, Director, Financing 1995–2000, Vice President 1991–1994 • Kansallis-Osake-Pankki: various expert and managerial positions (Head Ofﬁce foreign operations and the London branch) 1984–1990 Principal positions of trust • Stockmann Oyj: member of the Board 2017–2022 • SATO Oyj: member of the Board 2016–, Chair of the Board 2015–2016, Deputy Chair of the Board 2014–2015 • Ilkka Oyj: member of the Board 2011–, Deputy Chair of the Board 2014– • GRK Infra Oy: member of the Board 2020– Independent of the company, but not independent of its signiﬁcant shareholder. Shareholding on 31 December 2022 19,450 Alma Media Corporation shares Esa Lager Born: 1959 LL.M., M.Sc. (Econ.) Finnish citizen FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 130ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Member of the Group Executive Committee of Sampo plc, Manag- ing Director of Mandatum Holding and Mandatum Life Insurance Company Limited Member of the Board 2011–, Chair 2018, Deputy Chair 2011–2018 and 2019–2022, member of the Audit Committee Essential work experience • Evli Life Ltd: Managing Director 2000–2001 • Sampo Life Insurance Company Limited: Product Manager (unit- linked insurance) 1999–2000 • Kaleva Mutual Insurance Company/Sampo Life Insurance Com- pany Limited: Life Insurance Sales Manager, 1995–1999 Principal positions of trust • Topdanmark A/S: member of the Board 2017– • Mandatum Life: Member of the Board 2019– • Kaleva Mutual Insurance Company: Chair of the Board 2014–, member of the Board 2013– • Varma Mutual Pension Insurance Company: Chair of the Board 2014–, member of the Board 2013– • Finance Finland (FFI): member of the Board 2019–, Chair of the Life Insurance Executive Committee 2019–, member 2017–2018, Chair 2015–2016, member 2011–2014, Chair 2007–2010 • Confederation of Finnish Industries EK, Finance and Tax Com- mission: member 2017–, Chair 2015–2016 • Enento Group: Chair of the Nomination Committee 2019– • Mandatum Asset Management: Deputy Chair of the Board 2021– • Precordior Oy: member of the Board 2021– • Midaxo Oy: member of the Board 2022– Independent of the company and its signiﬁcant shareholders. Shareholding on 31 December 2022 26,756 Alma Media Corporation shares Petri Niemisvirta Born: 1970 LL.M. Finnish citizen VP, Product at Wolt Enterprises Oy Member of the Board 2022–, member of the Audit Committee Essential work experience • Wolt: VP, Product 2022– • Unity: Director, Research Labs 2020–2022 • Unity: Director, Product Management 2016–2020 • Unity: Senior Product Manager 2015–2016 • Omniata: Director, Product Management 2015–2015 and Director, Data Analytics 2014–2014 • Comptel: General Product Director 2013–2014 and Director, Analytics Technical Sales 2012–2012 • Xtract: Vice President, Professional Services 2006–2012 and Project Manager 2005–2006 Principal positions of trust • Finnish Startup Community: member of the Board 2021–2022 • Remedy Entertainment: member of the Board 2022– • Hive Helsinki: member of the Board 2022– Independent of the company and its signiﬁcant shareholders. Shareholding on 31 December 2022 1,320 Alma Media Corporation shares Kaisa Salakka Born: 1979 M.Sc. (Econ.) Finnish citizen FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 131ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT It is the duty of the members of the Board of Directors to provide the Board of Directors with sufﬁcient information for the assessment of their competence and independence. The Board of Directors has assessed that, with the exception of Eero Broman, Heikki Herlin, Peter Immonen, Esa Lager, Alexander Lindholm and Jorma Ollila, the members of the Board are independent of the company but dependent of its signiﬁcant shareholders. The Board members are assessed to be dependent of the company’s signiﬁcant shareholders based on the following grounds: Eero Broman has been a member of the Board of Otava Ltd for over 10 consecutive years in 2022 (a relationship with a signiﬁcant shareholder pursuant to subsection j) of Recommendation 10 of the Corporate Governance Code). Heikki Herlin is the Chair of the Board of Mariatorp Oy, Peter Immonen is a member of the Board of Mariatorp Oy, Esa Lager is a member of the Board of Ilkka-Yhtymä Oyj, Alexander Lindholm is the CEO of Otava Group and Jorma Ollila has been a member of the Board of Otava Ltd. for ten consecutive years in 2019 (a relationship with a signiﬁcant shareholder pursuant to Recommendation 10, item j of the Corporate Governance Code). Tasks and responsibilities of the Board of Directors The Board of Directors is responsible for the company’s governance and the due organisation of its operations. The tasks and responsibilities of the Board of Directors are determined by the Finnish Limited Liability Companies Act and the Articles of Association. The detailed working of the Board of Directors is set out in the Board's Charter. Principal tasks of the Board of Directors include conﬁrming the Group’s strategy and objectives as well as deciding on signiﬁcant investments and acquisitions. The Board of Directors monitors the Group’s performance through monthly reports and other information provided by the Group's management. The company ensures that all members of the Board of Directors receive adequate information on Alma Media’s operations, operating environment and ﬁnancial position. New members of the Board of Directors are familiarised with Alma Media’s operations. The duties of the Board of Directors include: • conﬁrming the Group’s strategy and objectives, monitoring their imple- mentation, and, if required, initiating corrective action; • considering and approving the interim reports and the ﬁnancial statements; • approving strategically signiﬁcant corporate and real estate acqui- sitions and disposals as well as investments according to separate investment instructions; • deciding on Alma Media Corpora- tion’s capital ﬁnancing programmes and operations according to a separate treasury policy; • approving Alma Media Corporation’s dividend policy and submitting a dividend proposal to the General Meeting of Shareholders; • annually reviewing the main risks associated with the company’s opera tions and the management of these risks; if necessary, giving the President and CEO instructions on how to deal with them, and, if required, initiating corrective action; • approving the principles for the ad- vance approval of non-audit services provided by the auditor; • appointing and, if required, dis- missing the President and CEO; • deciding on the Nomination and Compensation Committee’s proposal for the terms of employment of the President and CEO and the other members of the Group Executive Team; • conﬁrming the company’s organisa- tion based on the CEO’s proposal; • conﬁrming the terms of employment of the CEO’s direct subordinates based on the CEO’s proposal; • based on the President and CEO’s proposal, conﬁrm the appointment and dismissal of the Editors-in-Chief of newspapers and magazines with signiﬁcant revenue and circulation; • holding a meeting with the compa- ny’s auditors at least once a year; • deciding on matters that are ex- ceptional and have wide-ranging consequences; • making decisions on such activities within the inner circle that are not part of the company’s regular activities or which diverge from normal commercial conditions; • considering other matters that the Chair of the Board and President and CEO have agreed to be included in the agenda for the Board’s meeting. Other Board members are also entitled to put a matter before the Board by notifying the Chair of such a matter; • representing the company and entitling individuals to represent the company, as well as deciding on procurations; • approving the principles concern- ing the donation of sums to good causes. The Board’s Charter is available in full on the Alma Media website: http://www. almamedia.ﬁ/en/investors/governance/ board-of-directors. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 132ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Name Role Attendance at Board meetings Catharina Stackelberg-Hammarén Chair since 29 March 2022 10/10 Jorma Ollila Chair until 29 March 2022 2/2 Eero Broman Deputy Chair since 29 March 2022 8/8 Heikki Herlin Member since 29 March 2022 8/8 Peter Immonen Member 10/10 Esa Lager Member 10/10 Alexander Lindholm Member 10/10 Petri Niemisvirta Member, Deputy Chair until 29 March 2022 10/10 Kaisa Salakka Member since 29 March 2022 8/8 The Board convenes approximately 12 times a year according to a previously conﬁrmed timetable and, in addition, whenever necessary. Most meetings are connected with the publication of the company’s ﬁnancial statements and interim reports. Part of the meetings are focused on strategy, and at these meetings the Board discusses the Group’s future scenarios and conﬁrms the strategy for each strategy period. In 2022, the Board met 10 times. The attendance of each member is shown in the table below. Assessment of the Board’s performance In 2022, the Board of Directors evaluated its performance and working methods through self-assessment. Permanent committees The Board of Directors has established two permanent committees: the Audit Committee and the Nomination and Compensation Committee. At its consti- tutive meeting after the Annual General Meeting, the Board of Directors elects the members of these committees from among the Board members. The Board of Directors conﬁrms a written Charter for the committees. The committees report to the Board of Directors. Audit Committee The members of the Audit Committee shall have the expertise and experience required for the duties of the Committee, and at least one member shall have spe- cial expertise in accounting or auditing. As a whole, the Audit Committee must possess sufﬁcient expertise and experi- ence in the tasks of the Audit Committee as well as the company’s operating environment. At its constitutive meeting after the Annual General Meeting, the Board of Directors elects a minimum of three members to the Audit Committee from among the Board members, who then elect a Chair for the Committee. The Audit Committee meets at least four times a year. From 29 March 2022, the members of the Audit Committee were Esa Lager, Eero Broman, Heikki Herlin, Petri Niemisvirta and Kaisa Salakka. Esa Lager was the Chair of the Audit Committee. The Audit Committee’s meetings are attended by the company’s Auditor, the Group’s Chief Financial Ofﬁcer and General Counsel. Matters to the Committee are presented by the CFO. The Board of Directors has appointed the Audit Committee to monitor the compa- ny’s internal control systems. The work of the Audit Committee includes tasks such as evaluating compliance with legislation and regulations; evaluating and monitoring the ﬁnancial reporting process and ﬁnancial statements report- ing, including compliance with ﬁnancial statements standards; monitoring the auditing process; approving, in accor- dance with the principles conﬁrmed by the company’s Board of Directors, or giving advance authorisation to the Chair of the Audit Committee to approve, all permitted non-audit services provid- ed by the auditor, including their scope and the estimated fees payable for them; and monitoring signiﬁcant ﬁnancial, ﬁnancing and tax risks; and monitoring FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 133ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT the company’s ﬁscal position. The Audit Committee is required to process the company's central approval and op- erational instructions for investments and funding, for example. In addition, the Audit Committee monitors pro- cesses and risks related to IT security and processes any messages received through the Group’s ethical reporting – the whistleblowing channel. The Audit Committee also monitors and evaluates the independence of the auditor and, in particular, the auditor’s provision of non-audit services. The Charter of the Audit Committee is available in full on the Alma Media website: http://www. almamedia.ﬁ/en/investors/governance/ board-of-directors The Audit Committee convened ﬁve times in 2022. The attendance of each member is shown in the table below. Name Role Attendance at Audit Committee meetings Esa Lager Chair 5/5 Alexander Lindholm Member until 29 March 2022 1/1 Heikki Herlin Member since 29 March 2022 4/4 Petri Niemisvirta Member until 29 March 2022 1/1 Kaisa Salakka Member since 29 March 2022 4/4 Name Role Attendance at Nomina- tion and Compensation Committee meetings Peter Immonen Chair 2/2 Alexander Lindholm Member since 29 March 2022 1/1 Jorma Ollila Member until 29 March 2022 1/1 Catharina Stackelberg-Hammarén Member 2/2 Nomination and Compensation Committee At its constitutive meeting after the Annual General Meeting, the Board of Directors elects the members to the Nomination and Compensation Commit- tee from among the Board members. The Nomination and Compensation Commit- tee comprises at least three members, who elect a Chair for the Committee. On 29 March 2022, Peter Immonen, Alexander Lindholm and Catharina Stackelberg-Hammarén were elected as members of the Nom- ination and Compensation Committee. Peter Immonen was the Chair of the committee. The principal task of the Nomination and Compensation Committee is to prepare matters for the Board con- cerning appointments, compensation, incentive systems, the self-evaluation of the Board and the development of good governance. In the Nomination and Compensation Committee, the matters concerning compensation are presented by the President and CEO. The Charter of the Nomination and Compensation Committee is available in full on the Alma Media website: www. almamedia.ﬁ/en/investors/governance/ board-of-directors. The Nomination and Compensation Committee convened twice in 2022 to consider matters according to its Char- ter. The attendance of each member is shown in the table below. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 134ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT The Shareholders’ Nomination Committee T he Nomination Com- mittee’s duties include preparing proposals related to the election and remuneration of the members of the Board of Directors to the Annual General Meeting. The Shareholders’ Nomination Commit- tee consists of four members appointed by Alma Media’s four largest sharehold- ers, and the members elect a Chair from among their number. More information on the members of the Shareholders’ Nomination Committee of Alma Media Corporation in 2022 is presented in the table. The Shareholders’ Nomination Commit- tee convened twice during its term of ofﬁce in 2022–2023: in November 2022 and January 2023. All members of the Nomination Committee attended both meetings. On 24 January 2023, the Shareholders’ Nomination Committee issued a proposal to the Annual General Meeting to be held on 4 April 2023. Name Role Henrik Ehrnrooth Born: 1954, B.Sc. (Forest Econ.), M.Sc. (Econ.) Chair of the Board of Directors, Otava Oy Member of the Board of AFRY AB (publ) Shareholding on 31 December 2022: 0 Alma Media Corporation shares Chair Timo Aukia Born: 1973, M.Sc. (Econ.) Managing Director, Timo Aukia Oy & Jaakko Aukia Oy Shareholding on 31 December 2022: 5,246 Alma Media Corporation shares Member Peter Immonen Born: 1959, M.Sc. (Econ.) Chair of the Board of Directors, WIP Asset Management, member of the Board of Directors of Mariatorp Oy Shareholding on 31 December 2022: 5,625 Alma Media Corporation shares Member Timo Sallinen Born: 1970, M.Sc. (Econ.) Head of Listed Securities, Varma Mutual Pension Insurance Company Shareholding on 31 December 2022: 0 Alma Media Corporation shares Member Catharina Stackelberg-Hammarén Born: 1970, M.Sc. (Econ.) Senior Adviser, Marketing Clinic Oy Chairman of the Board of Directors of Alma Media, Member of the Board 2009–, member of the Nomination and Com- pensation Committee Shareholding on 31 December 2022: 28,535 Alma Media Corporation shares Expert member during the term 2022–2023 Jorma Ollila Born: 1950, M.Soc.Sc., M.Sc. (Econ.), M.Sc. (Tech.) Chair of the Board and member of the Board’s Nomination and Compensation Committee until 29 March 2022 Shareholding on 29 March 2022: 20,448 Alma Media Corporation shares Expert member during the term 2021–2022 FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 135ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT President & CEO and Group Executive Team of Alma Media Corporation T he President and CEO of Alma Media Corporation is Kai Telanne, M.Sc. (Econ.), born 1964. The President and CEO is responsible for the day-to-day mana- gement of the company in accordance with the guidelines and instructions of the Board of Directors. The President and CEO is responsible for the company’s accounts conforming to legislation and its assets being reliably managed. The President and CEO must supply all the information necessary for the appropri- ate working of the Board of Directors to the Board or any of its members. The President and CEO may undertake matters that are exceptional or have wide-ranging consequences with regard to the scope and nature of the compa- ny’s business only through authorisation by the Board of Directors or in circum- stances in which it is not possible to wait for the Board’s decision without causing essential damage to the company’s operation. In the latter case, the Board must be notiﬁed of the action taken as soon as possible. The President and CEO, Mr Kai Telanne, is supported by a Group Executive Team, in 2022 comprising Kari Kivelä (Senior Vice President, Alma Consumer), Vesa-Pekka Kirsi (Senior Vice President, Alma Career), Juha-Petri Loimovuori (Managing Director, Alma Talent), Tiina Kurki (Senior Vice President, Alma Media Solutions), Santtu Elsinen (CDO), Virpi Juvonen (Senior Vice President, Human Resources), Mikko Korttila (General Counsel), Elina Kukkonen (Senior Vice President, Communications and Brand) and Juha Nuutinen (CFO). The members of the executive team take turns acting as secretary to the Group Executive Team. The Group Executive Team prepares the monthly reports, investments, Group guidelines and policies, the strategy and other long-term plans, action plans covering the following 12 months and the ﬁnancial statements for conﬁrmation by the Board of Directors. The Group Executive Team convened 23 times in 2022. President and CEO, Chair of the Group Executive Team In the current position 2005– Member of the Group Executive Team 2005– Essential work experience • Kustannus Oy Aamulehti: Managing Director 2001–2005 • Kustannus Oy Aamulehti: Deputy Managing Director 2000–2001 • Kustannus Oy Aamulehti: Marketing Director 1999–2000 • Suomen Paikallissanomat Oy: Marketing Director 1996–1999 • Kustannus Oy Aamulehti: Marketing Manager 1993–1996 • Kustannus Oy Aamulehti: Sales Manager 1991–1993 • Kustannus Oy Aamulehti: Research Manager 1990–1991 • Nokian Paperi Oy: Product Manager 1989–1990 Principal positions of trust • Teleste Corporation: Member of the Board 2008– • Tampere Chamber of Commerce & Industry: Member of the Board 2018– Shareholding on 31 December 2022 216,155 Alma Media Corporation shares Kai Telanne Born: 1964 M.Sc. (Econ.) FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 136ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Santtu Elsinen Born: 1972 B.Sc.-level studies in Economics Virpi Juvonen Born: 1963 M.Soc.Sc. Senior Vice President, Human Resources In the current position 2013– Member of the Group Executive Team 2012– Essential work experience • Alma Media Corporation: Acting Senior Vice President, Hu- man Resources, December 2012–April 2013 • Alma Media Corporation: Director, Human Resources, Mar- ketplaces unit, 2011–2012 • Kustannusosakeyhtiö Iltalehti: Human Resources Manager 2007–2011 • Elisa Corporation: Human Resources Manager 2004–2007 • Oy Radiolinja Ab: Human Resources Manager 2002–2004 Principal positions of trust • Finla Työterveys Oy: Member of the Board 2017– Shareholding on 31 December 2022 43,812 Alma Media Corporation shares Chief Digital Ofﬁcer (CDO) In the current position 2016– Member of the Group Executive Team 2016– Essential work experience • Talentum Oyj: Business Development Director, member of extended Group Management Team 2012–2016 • Trainers’ House Oyj: Vice President, Business Development, member of the Management Team 2011–2012 • Satama Interactive Oyj: Director, Business Development, 2005–2010 • Quartal Oy: Chair of the Board of Directors 2000–, CEO 2011–, Business Development Director 1998–2005, Creative Director 1997–1998 • Kauppamainos Bozell Oy: Director, Digital media, 1997 • Specialist positions at advertisement agencies and the media, 1994–1996 Principal positions of trust • Media Industry Research Foundation of Finland: Member of the Board 2016–2022 • Digia Corporation: member of the Board 2018– • Finnmedia, Chair of the Technology team 2019– • Finnish Authentication Cooperative: Chair of the Board 2021– Shareholding on 31 December 2022 29,465 Alma Media Corporation shares directly and 10,100 shares through via Winterfell Capital Oy • – – Vesa-Pekka Kirsi Born: 1969 BA Senior Vice President, Alma Career In the current position 2021– Member of the Group Executive Team 2019– Essential work experience • Fonecta Ltd.: Business Unit Director, B2B business unit, and member of the executive management team 2016–2019, Fonecta Markets, Vice President and member of the execu- tive management team 2011–2016 • Openbit Oy/Tanla Solutions Ltd.: Vice President, Sales 2008–2011 • Nokia Corporation: Head of Nokia Games Publishing 2004–2007, Senior Manager Games Application Forum Nokia 2002–2004 • Riot Entertainment Ltd: Head of Product Development and Publishing Director 2000–2002 • Hewlett-Packard Oy: Program Manager 1998–2000 • Dava Ltd: Product Marketing Manager 1996–1998 Principal positions of trust • Salama BidCo Oy: member of the Board 2022– • Salama TopCo Oy: member of the Board 2022– Shareholding on 31 December 2022 6,600 Alma Media Corporation shares FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 137ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Kari Kivelä Born: 1959 M.Soc.Sc., MBA Mikko Korttila Born: 1962 Master of Laws, Master of Laws trained on the bench, eMBA Senior Vice President, Alma Consumer In the current position 2018– Member of the Group Executive Team 2005– Essential work experience • Director, Alma News & Life 2016–2017 • Publisher and Editor-in-Chief of Iltalehti, 2005–2017 • Startel Oy: Managing Director 2002–2004 • Saunalahti Group Corporation: Deputy Managing Director 2000–2002 • Uutislehti 100 Oy, City-lehti: Managing Director 1997–2000 • City-lehti: Editor-in-Chief 1986–1997 Principal positions of trust - Shareholding on 31 December 2022 82,096 Alma Media Corporation shares General Counsel, Legal Affairs, M&A and Corporate Development Secretary to the Board of Directors of Alma Media Corporation In the current position 2007– Member of the Group Executive Team 2008– Essential work experience • Raisio plc: Executive Vice President and General Counsel, member of the Executive Committee 2003–2007 • Raisio plc: Executive Vice President, HR and Legal; General Counsel, member of the Executive Committee 2001–2003 • Raisio plc: Legal Counsel, Chemicals and Benecol divisions 1997–2001 • Attorney-at-Law 1990–1997 Principal positions of trust • Advisory Board of Finnish Listed Companies: Chair, member 2008– • International Chamber of Commerce, Finnish Committee: Member of certain working groups 2006– • Securities Market Association, Member of the Takeover Board 2019– Shareholding on 31 December 2022 56,135 Alma Media Corporation shares Tiina Kurki Born: 1970 M.Sc. (Econ.) Senior Vice President, Alma Media Solutions In the current position 2015– Member of the Group Executive Team 2017– Essential work experience • Alma Media Corporation: Senior Vice President, Alma Media Solutions 2015– • Kauppalehti Ltd: Director, Sales and Marketing 2013–2015 • Iltalehti Oy: Director, Sales and Marketing 2008–2013 • Iltalehti Oy: Director, Customer Relations 2006–2008 • Iltalehti Oy: Sales Manager 2004–2006 Principal positions of trust • Finnish Periodical Publishers’ Association: Member of the Board 2018–2022 Shareholding on 31 December 2022 49,772 Alma Media Corporation shares FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 138ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Elina Kukkonen Born: 1970 Doctor of Business Administration DBA (KTT) Juha-Petri Loimovuori Born: 1964 M.Sc. (Econ.) Juha Nuutinen Born: 1972 M.Sc. (Econ.) Managing Director, Alma Talent Oy In the current position 2016– Member of the Group Executive Team 2006– Essential work experience • Alma Media Corporation: Director, Kauppalehti Group, 2006–2015 • Alma Media: Director, Media Sales 2004–2006 • Kustannus Oy Aamulehti: Director, Media Sales 2002–2006 Principal positions of trust • Finnmedia: member of the Board, Chair of the committee for labour market issues 2017– Shareholding on 31 December 2022 87,619 Alma Media Corporation shares Chief Financial Ofﬁcer In the current position 2012– Member of the Group Executive Team 2012– Essential work experience • University Properties of Finland Ltd: CFO, member of the Executive Team 2009–2012 • Alma Media Corporation: Group Financial Manager 2005–2009 • IF P&C Insurance Company: Financial Manager 2003–2005 • KPMG Oy: Auditor, APA (as of December 2000) 1996–2003 Principal positions of trust - Shareholding on 31 December 2022 60,092 Alma Media Corporation shares Senior Vice President, Communications and Brand In the current position 2017– Member of the Group Executive Team 2017– Essential work experience • Alma Media Corporation: Marketing Director, Alma Media Solutions, 2015–2018 • Kauppalehti Oy: Marketing Manager, 2006–2015 • Gant/Profashion Oy: Product Manager, 2006 • C More Entertainment / Canal+, Sweden: Marketing Manager 2006 • Kustannus Oy Aamulehti: Marketing Manager, 2003–2006 • Kustannus Oy Aamulehti: Specialist positions, 1999–2003 Principal positions of trust • Media Industry Research Foundation of Finland: Member of the committee for labour market issues 2019–, Deputy Chair of the Board 2022– Shareholding on 31 December 2022 21,023 Alma Media Corporation shares FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 139ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Insider Management A lma Media Corpora- tion’s Board of Directors approved Alma Media Group’s current Guide- lines for Insiders on 29 March 2022. The Guidelines for Insiders are based on the Market Abuse Regulation, Level 2 European Commission Regulations and the rules and guidelines issued by the European Securities and Markets Authority (ESMA), and they supplement the valid provisions of NASDAQ Helsinki Ltd’s Guidelines for Insiders, Chapter 51 of the Finnish Criminal Code, the Finnish Securities Markets Act and the regulations and guidelines issued by the Finnish Financial Supervisory Authority regarding the management and han- dling of insider information. Insiders are divided into two categories at Alma Media Corporation: managers subject to the notiﬁcation obligation and project insiders. At Alma Media Corporation, the following shall be considered managers subject to the notiﬁcation obligation: the Chair of the Board and the Deputy Chair, the members of the Board and any deputy members, the CEO and any deputies to the CEO, and the members of the Group Executive Team. Managers subject to the notiﬁcation obligation shall not trade in the company’s ﬁnancial instruments before the publication of the company’s interim reports and ﬁnancial statement release within a time frame beginning 30 days before the publication of the interim reports and the ﬁnancial state- ment release and ending on the day following the publication date (“closed window”). Project insiders shall not trade in Alma Media Corporation’s ﬁnancial instruments until the project in question has ended. Alma Media Corporation has further decided that the persons involved in the preparation and drafting of Alma Media Corporation’s interim reports and ﬁnancial statement releases must not trade with ﬁnancial instruments issued by the Company before the publication of the company’s interim reports and ﬁnancial statement releases within a time frame beginning 30 days before the publication of the interim reports and the ﬁnancial statement release and end- ing on the day following the publication date (“extended closed window”). The extended closed window also applies to persons who, in the course of performing their duties, obtain information on Alma Media Group’s sales ﬁgures or the sales ﬁgures of a business unit that has mate- rial signiﬁcance to the result of the Alma Media Group as a whole. Alma Media Corporation uses an ethical reporting channel, Alma-Whistleblow, which is intended for employees and third parties to report suspected inci- dents of criminal activity and miscon- duct that cannot, for some reason, be communicated directly to Alma Media’s responsible persons or if the person submitting the report wishes to remain anonymous. The whistleblowing channel can also be used to report suspected violations of securities market regulations. Alma Media Corporation shall disclose transactions by managers and their closely associated persons involving the company’s ﬁnancial instruments by issuing a stock exchange release in accordance with the Market Abuse Regulation. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 140ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Information concerning the sharehold- ings of the company’s management is updated every day on the Alma Media website: www.almamedia.ﬁ/en/investors/ share-and-shareholders/insider-share- holdings. The Company’s General Counsel is responsible for the insider management of the Alma Media Group. Related party transactions The Group’s parent company, subsidiaries, associated companies and joint ventures included in Alma Media’s related parties. Pursuant to IAS 24, the Group’s related parties consist of its Board of Directors, the CEO and the Deputy CEO of the parent company and the managing directors of the major subsidiaries as well as the other executives of the Group and the Group’s key shareholders who exercise control or signiﬁcant inﬂuence over the decision-making processes relating to the ﬁnances and business of the parent company or signiﬁcant subsidiary. The close family members of the afore- mentioned persons are also considered to be related parties of the Group. The related parties also include Alma Media shareholders who own more than 20 per cent of the Group’s shares or the total number of votes carried by the Group’s shares. The Group maintains a record of its related parties in order to identify trans- actions with related parties. Transactions with related parties are monitored using the Group’s reporting system. Related party transactions that are not part of the ordinary course of the Group’s business or are not carried out on an arm’s length basis are subject to a decision by the Board of Directors. Related party trans- actions and the nature of their terms is assessed on a case-by-case basis and in relation to the Group’s ordinary course of business and the arm’s length principle as well as the industry’s generally ob- served and accepted market practices. To organise the identiﬁcation, reporting and monitoring of related party transac- tions, the Board of Directors has as- signed the Audit Committee to monitor transactions by the Group’s manage- ment and their related parties and any potential conﬂicts of interest involved therein. The Audit Committee monitors and evaluates the degree to which contracts and other legal transactions between the Group and its related par- ties comply with the legal requirements for being part of the ordinary course of business and being conducted on an arm’s length basis. The CEO reports all related party transactions to the Audit Committee annually. The Group has issued guidelines for the members of the Group Executive Team on the identiﬁ- cation of related party transactions and they are obligated to notify the Group in advance of any contracts and legal transactions they plan to carry out with Group companies. The Group reports any transactions with related parties annually in its Report by the Board of Directors and the notes to the ﬁnancial statements in accordance with the Limited Liability Companies Act and the legislative provisions governing the preparation of ﬁnancial statements. The Group publishes related party transactions in the manner stipulated by the Securities Market Act, the rules of the stock exchange and the Market Abuse Regulation. During the ﬁnancial year, Alma Media did not have related party transactions that deviated from the Group’s normal business operations or were not made on market or market-equivalent terms. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 141ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Internal control and risk management systems in ﬁnancial reporting Internal control Internal control is an essential part of the company’s governance and man- agement systems, covering all of the Group’s functions and organisational levels. The purposes of internal control include providing sufﬁcient certainty that the company will be able to execute its strategy. Internal control is not a separate process; instead, it is part of the company’s operations, covering all Group-wide operational principles, guidelines and systems. Financial reporting The Board of Directors and the President and CEO carry the overall responsibility for organising the internal control and risk management systems for ﬁnancial reporting. The President and CEO, members of the Group Executive Team and the heads of the business units are responsible for ensuring that the accounting and administration of the areas within their spheres of responsibil- ity comply with legislation, the Group’s operating principles and the guidelines and instructions issued by Alma Media Corporation's Board of Directors. In Alma Media Group, the control over business unit administration and accounting is centralised in the Group’s ﬁnancial ad- ministration. The ﬁnancial administration monitors and gives guidance regarding internal control measures and prac- tices, based on the Group’s operating principles and guidelines. The ﬁnancial administration, working under the Group CFO, is the centralised source of ﬁnan- cial statement data required by external accounting, as well as the source of anal- yses and reports to Group and business unit management teams for monitoring the proﬁtability of business operations. The Group’s internal control practices ensure the correctness of ﬁnancial re- porting within the Group. Risks related to ﬁnancial reporting are managed with the help of the Group’s accounting manual, ﬁnance and investment policy, acquisi- tion guidelines and internal control. Alma Media Group follows the Inter- national Financial Reporting Standards (IFRS) approved for use within the European Union. Guidelines for ﬁnancial reporting and accounting principles are collected in an accounting manual that is updated as standards change, as well as the ﬁnancial department guidelines that are applied in all Group companies. Group accounting is responsible for the monitoring and observance of the ﬁnancial reporting standards as well as maintaining ﬁnancial reporting princi- ples and communicating them to the business units. Risk management Risk management is part of Alma Media Corporation’s ﬁnancial reporting process and one of the company’s signiﬁcant measures of internal control. At Alma Media Group, the task of risk manage- ment is to continuously evaluate and monitor all business opportunities and threats, and to manage risks to ensure the achievement of objectives and business continuity. The Board of Directors carries the primary responsibility for Alma Media’s risk management. The Board of Directors considers the most signiﬁcant identiﬁed risks and is in charge of deﬁning the Group’s risk appetite and risk tolerance. The Audit Committee prepares for the Board of Directors the risk management Alma Media’s internal control and risk management organisation ALMA CAREER ALMA CONSUMER ALMA TALENT ALMA MEDIA’S BOARD OF DIREC TORS ALMA MEDIA’S AUDIT COMMIT TEE PRESIDENT AND CEO GROUP EXECUTIVE TEAM CHIEF FINANCIAL OFFICER FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 142ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT principles of the Group and monitors the efﬁciency of the risk management systems. The Audit Committee also discusses the management reports on signiﬁcant risks and the company’s exposure to them and it considers the plans to minimise risks. The CEO, the Group Executive Team and other managers in the Group at all organisational levels are responsible for daily risk management. In each business unit, a member of the unit’s executive group, usually the person in charge of the ﬁnances, is responsible for risk management and reporting on risk management operations. The risk management process identiﬁes the risks, develops appropriate risk man- agement methods and regularly reports on risk issues to the risk management organisation and the Board of Directors. Risk management is part of Alma Media Corporation’s internal control and, thus, is part of good corporate governance. Alma Media sets limits and procedures for quantitative as well as qualitative risks in writing in its risk management system. Alma Media classiﬁes its busi- ness risks as strategic, operational and ﬁnancing risks. Alma Media’s most signiﬁcant strategic risks are related to cyber risks, data security and data privacy violations, rapid changes in the existing business models of marketplaces and changes in media consumption among consumers. An increasingly important source of competitive advantage, but also a strategic risk, in Alma Media’s business is the ability to use customer data to improve the product and service offering for advertisers and to enrich end-user services. Alma Media manages customer data and behavioural data, taking regula- tory requirements into consideration, by centralising customer data repositories and deploying analysis and activation technology. Potential restrictions con- cerning the use of third-party cookies could create uncertainty factors, at least temporarily, related to digital advertising sales. The regulation of the media sector and the related market practices is becoming stricter. The changes in the operating envi- ronment and the rapid technological development require continuous invest- ments in employee competence and development. One signiﬁcant strategic risk is the availability of highly competent IT specialists for demanding product development projects. A further risk to Alma Media’s business is the potential decline in digital audi- ences, as well as a potential permanent decrease in digital advertising sales and listing advertising. The continuation of the widespread pandemic may have a signiﬁcant impact on the demand for services on the one hand and, on the other hand, it can cause substantial production disruptions in business processes due to signiﬁcant risks related to employee health. In addition to the COVID-19 pandemic, the escalation of geopolitical risks in Alma Media’s operating countries may have a signiﬁcant impact on service demand. The most signiﬁcant operational risks are disturbances of information tech- nology and communications as well as interruptions in daily news production. The strategic, operational and ﬁnancial risks related to Alma Media’s business and the actions taken to mitigate them are described in more detail in the Re- port by the Board of Directors. Financial risks are also described in more detail in the notes to the consolidated ﬁnancial statements. Internal audit In Alma Media Group, internal audit functions have been incorporated into the responsibilities of Alma Media Corporation’s ﬁnancial administration. Internal audits test the effectiveness of processes and the controls included in them. Internal auditing is carried out by means of monitoring reports as well as separate reviews. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 143ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT Auditing T he General Meeting of Shareholders annually elects an auditor and deputy auditor for the Group. An auditing ﬁrm can also be appointed as the auditor. If an auditing ﬁrm, that is entered in the register of auditors of the Finnish Patent and Registration Ofﬁce (PRH) and whose key audit partner is an Authorised Public Accountant, is appointed the auditor, no deputy is required. The term of ofﬁce of the auditors expires at the close of the next Annual General Meeting following their election. The auditor’s task is to ensure that the ﬁnancial statements are prepared in accordance with current regulations and that they provide correct and sufﬁcient information on the company’s result, ﬁnancial position and other aspects of the business for the stakeholders. As part of their annual auditing assignment, the auditors of Alma Media Corporation audit the accounting and governance of the business units. The requirements set by the internal audit are taken into account in the audit plans. The auditors submit their report to Alma Media Corporation’s shareholders at the Annual General Meeting. Furthermore, the auditors submit an annual summary of their auditing plan and a written report on the entire Group to the Board of Directors and Audit Committee in conjunction with the publication of each interim report and the annual ﬁnancial statements. In addition, the auditors provide a separate report on any ob- servations concerning the audit of the ﬁnancial year to the Group’s ﬁnancial management and the Audit Committee. Alma Media Corporation’s Annual General Meeting 2022 elected Authorised Public Accountants Pricewa- terhouseCoopers Oy as the company’s auditors, with Niina Vilske, Authorised Public Accountant, as the principal au- ditor. As a rule, PricewaterhouseCoopers is the auditor of the subsidiaries of Alma Media Group. Alma Media Group’s auditing fees for 2022 amounted to EUR 244,050. In addition, the auditing ﬁrm PwC charged the Group a total of EUR 95,127 in fees for other services in the 2022 ﬁnancial year, including, among other things, advisory services related to reporting on corpo- rate responsibility. PwC has served as the Group’s auditor since 2014. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 REMUNERATION REPORT 144ANNUAL REPORT 2022 SUSTAINABILITY REPORT CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 2022 Contents 147 151 155 Comparison data Veriﬁcation of the Remuneration Report From the Chairman 149 152 Key remuneration principles Remuneration of the Board of Directors 150 154 Deviation from the Remuneration Policy and clawback of remuneration Remuneration of the President and CEO FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 146ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT From the Chairman Dear shareholders Alma Media continued its renewal in 2022. The Group offered its broad product portfolio in digital housing transactions and advertising as well as recruitment services and technologies, and continued to shift its strategic focus even more clearly to the development of digital and international business. Alma Media also completed the integration of the Nettix marketplace, which became part of the Group in the previous year and was the largest acquisition in the Group’s history. Business development was strong in 2022, and proﬁtability rose to a record- high level. The development of the recruitment business was particularly good. Russia’s invasion of Ukraine and sharply rising inﬂation hampered economic development throughout Europe. At the same time, however, the economic uncertainty caused by the COVID-19 pandemic decreased substantially compared to 2020 and 2021. Alma Media’s incentive schemes emphasise the reconciliation of the interests of the executives and the interests of Alma Media’s shareholders, engaging the commitment of the executives through long-term share ownership and thereby increasing the company’s shareholder value in the long term. The Annual General Meeting 2022 kept the fees of the Board of Directors unchanged. Remuneration systems align the interests of the management and shareholders FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 147ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT During the past few years, the key criteria for the short-term incentive bonuses of Alma Media’s President and CEO have been the development of the Group’s proﬁtability, i.e. adjusted ope- rating proﬁt, and digital business growth targets. Alma Media’s long-term incen- tive scheme, in turn, is based on the total shareholder return of the company’s share and the growth of digital business. The rewards of the long-term incentive scheme are paid in Alma Media shares. Variable remuneration components, i.e. short-term and long-term incentives, represent a signiﬁcant proportion of the remuneration of the President and CEO. This ensures a strong alignment between the implementation of the Group’s strategy and the President and CEO’s remuneration, as the targets set for the short-term and long-term incen- tive systems are directly linked to the Group’s business development. The total remuneration paid to the President and CEO in 2022, including pension contribu- tions (supplementary pension + statuto- ry pension), amounted to EUR 3,450,902, with variable remuneration components representing 70 per cent of the total. This remuneration report for the Group’s governing bodies has been produced in compliance with the EU Shareholder Rights Directive (SHRD) and the Finnish Corporate Governance Code 2020 for listed companies. I hope you will ﬁnd this report informative. Peter Immonen Chairman of the Nomination and Compensation Committee FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 148ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT Key remuneration principles I n accordance with its strategy, Alma Media builds sustainable growth by taking advantage of the opportunities presented by the digital transformation. The objective is to increase shareholder value through revenue growth and improved proﬁtability. Alma Media is developing and expanding its current business operations and seeking growth opportunities in new businesses and markets. The company’s Remune- ration Policy and remuneration systems are aimed at promoting the Group’s long-term ﬁnancial success, competi- tiveness and the development of share- holder value. The remuneration of the members of the Board of Directors at Alma Media must be competitive to ensure that the Board of Directors consists of members with sufﬁcient expertise to carry out the duties of the Board of Directors, which include, among other things, deciding on the company’s strategy and monitoring its implementation. The remuneration schemes concerning the company’s President and CEO are based on the principle of achieving the Group’s strategic objectives deﬁned and conﬁrmed by the Board of Directors as well as the principle of improving the company’s result. The incentive schemes emphasise the reconciliation of the interests of the executives and the interests of Alma Media’s shareholders, engaging the commitment of the execu- tives through long-term share ownership and thereby increasing the company’s shareholder value in the long term. The remuneration principles include the promotion of a performance-based operating culture, offering competitive compensation for development that promotes the implementation of stra- tegy and the achievement of targets. Alma Media’s remuneration principles and processes are transparent, clear and consistent. Alma Media’s Annual General Meeting conﬁrmed the Remuneration Policy of Alma Media’s Governing Bodies, pre- pared in accordance with the Corpo- rate Governance Code 2020 for Finnish listed companies and the EU amend- ment directive concerning shareholder rights (SHRD II), in spring 2022. The Remune ration Policy is available in full on Alma Media’s website at https://www. almamedia.ﬁ/en/investors/governance/ remuneration. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 149ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT Deviation from Alma Media’s Remuneration Policy and clawback of remuneration in 2022 T emporary deviations from Alma Media’s Remune- ration Policy may be made if such a deviation is necessary to ensure the long-term interests of Alma Media. The assessment may take into account, among other things, the company’s long-term ﬁnancial success, competitiveness, ensuring the undis- rupted continuation of business and the development of shareholder value. Deviations from the Remuneration Policy concerning the President and CEO shall be prepared by the Board’s Nomination and Compensation Committee and decided on by the Board of Directors. If there are grounds for temporary devi- ation, the deviation may concern any component or aspect of remuneration. There were no deviations from the Remuneration Policy in 2022. There were also no circumstances that would have given cause for the Group to exercise its right to claw back or cancel paid or unpaid incentives. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 150ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT Comparison ﬁgures on the remuneration of the management and employees and Alma Media’s ﬁnancial performance 2018–2022 A lma Media’s businesses achieved excellent development and proﬁtability rose to a record-high level in 2022. Revenue grew broadly across the Group’s businesses, with recruitment services seeing very strong demand, for example. The remuneration schemes concerning the company’s President and CEO are in line with the updated long-term targets and they are based on the principle of achieving the Group’s strategic objectives, digital business growth and improving the Group’s result. These criteria are also reﬂected in the short-term and long-term remuneration of the President and CEO. The remune ration of the President and CEO is closely aligned with the principle of performance-based remuneration. The development of the remuneration of the Board of Directors and the Presi- dent and CEO compared to the average remuneration of the Group’s employees and the Group’s ﬁnancial performance for the past ﬁve ﬁnancial years: EUR 2018 2019 2020 2021 2022 Average fees paid to a member of the Board of Directors 54,733 56,571 54,014 49,533 46,650 Basic salary + beneﬁts paid to the President and CEO (excluding pension beneﬁts) 473,735 511,777 523,853 552,988 577,935 Year-on-year change, % -4.4% 8.0% 2.4% 5.6% 4.5% Total remuneration paid to the President and CEO 654,621 600,004 1,246,306 442,390 2,401,031 Year-on-year change, % 46.7% -8.3% 107.7 % -64.5% 442.7% Average employee salary 50,633 50,242 49,523 53,257 56,129 Adjusted operating proﬁt (MEUR) 49.9 49.3 45.4 61.1 73.4 Digital business growth, % 8.7 3.7 -4.7 33.9 17.7 Share price (end of the year) 5.54 7.96 8.92 10.82 9.40 Dividend 0.35 0.40 0.30 0.35 0.44 The average salary is formed by dividing personnel costs by the average number of employees for the year (number of employees excluding telemarketers). The comparison ﬁgures illustrate the salaries and fees paid during each ﬁnan- cial year. The bonuses based on short- term and long-term incentive schemes are always paid in the year following the performance period. For example, the ﬁgures for 2022 are based on the short- term incentive scheme’s performance period 2021 and the long-term incentive scheme’s performance period 2017–2021. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 151ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT Remuneration of the Board of Directors in 2022 Fees paid to the members of the Board of Directors for their work on the Board and its committees in 2022 (EUR) T he members of the Board of Directors of Alma Media Corporation are not in an employment relationship with the company. The compensation received by the members of the Board of Direc- tors from the company is limited to com- pensation related to membership of the Board of Directors and its committees and their work on the Board of directors. The members of the Board of Directors are not included in Alma Media’s share- based incentive schemes or the compa- ny’s other incentive schemes. The members of the Board shall, as decided by the Annual General Meeting, acquire a number of Alma Media Corpo- ration shares corresponding to approx- imately 40 per cent of the full amount of the annual remuneration for Board members, taking into account tax deduction at source, at the trading price on the regulated market arranged by the Helsinki Stock Exchange. The acquired shares cannot be transferred until the recipient’s membership on the Board has ended. If it is not possible to acquire the shares by the end of each year for a reason such as pending insider trans- actions, the annual remuneration shall be paid in cash. * The number of shares corresponds to approximately 40% of the full amount of the annual fee after taxation. Year Name Position Board meetings Audit Committee Nomination and Compensation Committee Fees total Annual fee Annual fee paid in shares, no. of shares Meeting fees 2022 Catharina Stackelberg-Hammarén Chair since 29 March 2022, member until 29 March 2022 62,500 2,539 14,500 1,000 78,000 2022 Jorma Ollila Chair until 29 March 2022 - - 3,000 500 3,500 2022 Eero Broman Deputy Chair since 29 March 2022 40,000 1,625 6,300 2,000 48,300 2022 Petri Niemisvirta Deputy Chair until 29 March 2022, member since 29 March 2022 32,500 1,320 5,900 2,500 40,900 2022 Heikki Herlin Member since 29 March 2022 32,500 1,320 4,500 2,000 39,000 2022 Peter Immonen Member 32,500 1,320 5,500 2,000 40,000 2022 Esa Lager Member 32,500 1,320 5,500 7,500 45,500 2022 Alexander Lindholm Member 32,500 1,320 5,500 500 500 39,000 2022 Kaisa Salakka Member since 29 March 2022 32,500 1,320 4,500 2,000 39,000 The meeting fees of the members of the Board of Directors are paid in cash. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 152ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT The Annual General Meeting 2022 kept the fees of the Board of Directors unchanged and, in accordance with the proposal of the Shareholders’ Nomina- tion Committee, resolved on the annual fees of the Board of Directors as follows: • To the Chair of the Board of Direc- tors, EUR 62,500 per year; to the Vice Chair, EUR 40,000 per year, and to the other members EUR 32,500 per year. • In addition, the Chair of the Board of Directors and the Chair of the Audit Committee will be paid a fee of EUR 1,500, the Chair of the Nomination and Compensation Committee a fee of EUR 1,000, the Deputy Chairs of the committees a fee of EUR 700 and members a fee of EUR 500 for those Board and Committee meetings that they attend. • The travel expenses of Board mem- bers will be compensated in accor- dance with the company’s travel policy. The attendance fees for each meeting are • doubled for (i) members living outside Finland in Europe or (ii) meetings held outside Finland in Europe; and • tripled for (i) members resident outside Europe or (ii) meetings held outside Europe. In the ﬁnancial year 2022, the fees paid to the Board members totalled EUR 373,200. All fees paid to the Board members during the ﬁnancial year 2022 were in accordance with Alma Media’s Remuneration Policy. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 153ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT Remuneration of the President and CEO in 2022 The total remuneration of Alma Media’s President and CEO in 2022, including pension beneﬁts (supplementary pen- sion + statutory pension), amounted to EUR 3,450,902. Short-term and long-term incentive bonuses paid in 2022 repre- sented 69.6 per cent of the total remu- neration of the President and CEO, while the ﬁxed annual salary including pension beneﬁts (statutory pension and supple- mentary pension) represented 30.4 per cent. The remuneration of the President and CEO in 2022 was in accordance with Alma Media’s Remuneration Policy. According to the Remuneration Policy, the ﬁxed remuneration includes basic salary, beneﬁts and supplemen- tary pension contributions. The variable remuneration consists of a short-term incentive (STI) bonus scheme related to the achievement of short-term ﬁnancial and operational targets and long-term remuneration schemes (LTI). The supplementary pension contribution of the President and CEO’s ﬁxed annual salary is 37% of the annual salary, which is calculated by adding a computational share of 50% of the maximum incentive to the overall salary. The President and CEO has the right to retire at the age of 60. No other ﬁnancial beneﬁts were paid to the President and CEO in 2022. Variable remuneration components: Short-term remuneration The main elements of the short-term incentive bonus scheme of Alma Media’s President and CEO were based on two criteria: Meeting Alma Media Group’s ﬁnancial targets concerning adjusted operating proﬁt (weight 70%), the achievement of strategic objectives (weight 25%) and meeting the ESG goals (weight 20%) for each calendar year. The maximum remuneration payable to the President and CEO under the short- term incentive scheme is 100 per cent (66% in 2021) of the annual basic remu- neration. In addition to the earning op- Variable remuneration components Pension beneﬁts Fixed annual salary (including taxable fringe beneﬁts) Short-term incentive bonuses paid for the year 2020 Share-based incentive bonuses paid Supplementary and statutory pension con- tributions Total President and CEO 577,935 345,424 2,055,607 471,936 3,450,902 portunity based on the incentive scheme, the President and CEO may be eligible for one-off project bonuses based on, for example, key development projects, projects relating to signiﬁcant changes in Group structure or M&A transactions or other one-off projects or arrangements as determined by the Board of Directors on a case-by-case basis. The rate of achievement of the targets of the President and CEO’s short-term incentive scheme was 100 per cent in 2021 and the bonus of EUR 345,424 was paid in March 2022. The rate of achieve- ment of the targets was 77.5 per cent in 2022 and the bonus of EUR 447,900 will be paid in March 2023. * The share-based incentive bonus (LTI) was paid in two instalments. The ﬁrst instalment was paid on 24 February 2022; the number of earned shares under the incen- tive scheme was 28,751 and the average share price on the payment date was 9.47 euros; and the second instalment was paid on 13 June 2022; the number of earned shares under the incentive scheme was 63,360 and the average share price on the payment date was 10.39 euros. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 154ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT Variable remuneration components: Long-term remuneration The President and CEO’s long-term incentive structure consists of share- based incentive schemes (LTI 2015 and LTI 2019). Dividing the maximum incen- tive reward over the measurement peri- od on average, the maximum incentive reward based on the LTI schemes is limited to 95 per cent of the President and CEO’s ﬁxed annual salary. The mea- 2015 III TSR 2015 IV TSR 2015 IV (Matching plan) 2019 MSP 2020 MSP 2021 MSP 2022 MSP Total Maximum 36,000 36,000 36,000 135,000 120,000 126,000 150,000 639,000 shares Performance indicators Total shareholder return (TSR) Total shareholder return (TSR) Digital growth Digital growth (50%), total shareholder return (TSR) (50%) Digital growth (33%), EPS (33%), total shareholder return (TSR) (33%) Digital growth (33%), EPS (33%), total shareholder return (TSR) (33%) Revenue growth (33%), EPS (33%), total share- holder return (TSR) (33%) Performance period 2017–2021 2018–2022 2018–2019, 2021 2019–2021 2020–2022 2021–2023 2022–2024 Year of payment 2022 2023 2022 2022 2023 2024 2025 Amount earned 36,000 27,504 135,000 surement period is ﬁve years for the LTI 2015 scheme and three years for the LTI 2019 scheme. On February 24, 2022 and June 13, 2022, the President and CEO was paid share-based incentive bonuses under three different incentive schemes (LTI 2015 III, LTI 2015 IV and MSP 2019). The gross number of shares received by the President and CEO based on the incentive schemes was 198,504 shares, corresponding to EUR 2,055,607. The Board of Alma Media decided to delay the transfer of shares MSP 2019 for the programme to June 2022, because the company did not have enough of its own shares at the original time of payment in February 2022. The lost dividends were compensated for participants in the MSP -program. In accordance with the Board of Direc- tors’ recommendation concerning share ownership, the President and CEO is expected to retain ownership of at least half of the net shares received through the company’s share-based incentive schemes until the total value of the Alma Media shares held corresponds to at least one year’s ﬁxed gross annual salary. The long-term incentive bonus is subject to a transfer restriction and the President and CEO can only transfer the shares pursuant to the terms and conditions of the incentive scheme. Veriﬁcation of the Remuneration Report The auditing ﬁrm PricewaterhouseCoo- pers Oy, which served as Alma Media’s auditor for the ﬁnancial year 2022, has veriﬁed that the legally required disclo- sures are included in this Remuneration Report. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS THE YEAR 2022 CORPORATE GOVERNANCE STATEMENT 155ANNUAL REPORT 2022 SUSTAINABILITY REPORT REMUNERATION REPORT SUSTAINABILITY REPORT 2022 Contents 158 199 GRI index Greetings from the President and CEO 160 Sustainability year 2022 165 186 Sustainable Alma Media Sustainable brands FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 157ANNUAL REPORT 2022 SUSTAINABILITY REPORT We encourage sustainable choices Sustainability work is an integral and con- stantly developing part of our operations. Our basic mission is to accelerate the sustainable growth of individuals, busi- nesses and society aiming to maximise the positive impact of our operations on society and minimise our environmental footprint. We carefully listen to our cus- tomers and employees and ensure that our working environment is encouraging and safe. We are a low-carbon company We have been implementing our strat- egy based on the digital transformation for two decades already. While only six per cent of our revenue was from digi- tal operations in 2005, by last year, this percentage had increased to as much as 80 per cent. Our digital journey has clearly improved our proﬁtability while also changing our climate proﬁle to a signiﬁcantly more low-carbon one. Over the past six years, we have halved the emissions caused by our operations. Only four per cent of the greenhouse gases generated by the company are created by the company's own operations while 96 per cent are cre- ated by the subcontracting chain. During the year under review, Alma Media received again the Leadership level grade A–, the second highest score, in the Climate Change Disclosure 2022 assessment of the international CDP organisation. We also updated our sci- ence-based climate targets to be more ambitious: we commit to reduce the greenhouse gas emissions of our own operations (Scope 1 and 2) by 52 per cent and emissions of the subcontracting chain (Scope 3) by 14 per cent by 2030. We are part of a united front that seeks to limit global warming to no more than 1.5 degrees Celsius. In minimising our carbon footprint, we pay attention to our digital service de- sign and other own operations, and the our subcontracting chain. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 158ANNUAL REPORT 2022 SUSTAINABILITY REPORT Helping Ukrainians Last year, we developed the Ukrainian- language Workania.eu service platform to make it easier for Ukrainian citizens ﬂeeing Ukraine to ﬁnd work in our 11 op- erating countries. To help those caught up in the brutal war, we made a one-off donation to People In Need, the largest charity in Eastern Central Europe. We also supported international aid or- ganisations, the Finnish Red Cross and UNICEF by delivering donations from Finland through our media and service websites. Alma Media’s management, employees in Finland and management teams in our 11 operating countries committed to a common sustainability target alongside ﬁnancial targets as part of our employ- ees’ incentive system. We required more than half of our most signiﬁcant suppli- ers to commit to our Code of Conduct and each Alma employee completed the Code of Conduct training designed for employees. Better journalism, better society Our journalistic media have a signiﬁ- cant impact on the society around us and it sustainable development. Last year, Kauppalehti and Tekniikka&Talous among other actions developed an as- signed indexing that distinguishes even better the content providing solutions to climate change in our media. As for Iltalehti, it organised a journalist training covering the terminology of diversity and gender minorities with the non-gov- ernmental organisation SETA which deals with the human rights of LGBT+ people. The Council for Mass Media pro- vided training for Alma Media’s journal- ists on the factors inﬂuencing condem- natory decisions. Last year, Kauppalehti and Tekniikka&Talous developed an assigned indexing that distinguishes cli- mate change solutions from the content. With the help of our media, we aim to increase awareness and understanding of sustainable development and offer practical solutions in making sustainable choices. Our values, sustainability targets and operating principles are reﬂected in our everyday activities, guiding our daily work. We also want to inspire our part- ners to commit to promote sustainable development in an ambitious, compre- hensive and effective manner. Learn more in our sustainability report for 2022! Kai Telanne President and CEO FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 159ANNUAL REPORT 2022 SUSTAINABILITY REPORT Sustainability year 2022 SHOWING SUPPORT AND SOLIDARITY WITH THE UKRAINIANS EMPLOYEES AND SUBCONTRACTORS COMMIT TO CODE OF CONDUCT MORE AMBITIOUS CLIMATE TARGETS SUSTAINABILITY BECOMES A BASIS FOR INCENTIVES JOURNALISM SUPPORTING SUSTAINABLE DEVELOPMENT FUTUREFIT WORKFORCE We developed the Ukrainian-language Workania.eu service platform to make it easier for people fleeing Ukraine to find work in our 11 operating countries. We made a one-off do- nation to People In Need, the largest NGO in Eastern Cen- tral Europe, to help Ukrainians in the midst of the war. We supported international humanitarian aid organisations, the Finnish Red Cross and UNICEF by delivering donations from Finland through our media and service websites. We designed and implemented a Code of Conduct online training for our subcontracting network. We successfully in- spired more than half of our most significant suppliers to commit to our Code of Conduct. In our 11 operating countries, each of our employees com- pleted the Code of Conduct training by the end of 2022. The audience of Iltalehti and financial and professional me- dia continued to grow. Kauppalehti and the Tekniikka&Talous media developed an assigned indexing that distinguishes climate change solu- tions from the content. Iltalehti organised a journalist train- ing covering the terminology of diversity and gender minori- ties with SETA. The Council for Mass Media provided training for Alma Media’s journalists on the factors influencing con- demnatory decisions. Alma Media’s new, tightened targets under the Science Based Targets initiative (SBTi) were officially approved. The target is in line with the international trajectory limit- ing global warming to 1,5 degrees Celsius. We will reduce the greenhouse gas emissions of our own operations (Scope 1 and 2) by 52 per cent and the greenhouse gas emissions of our subcontracting chain (Scope 3) by 14 per cent by 2030. We provided diverse support to develop and maintain well-being at work for Alma Medians. We continued and fur- ther developed the operating model of multi-location work. We developed the competence and leadership of Alma’s employees through numerous training and coaching pro- grammes. We investigated the development opportunities related to diversity, equality and the sense of inclusion. Alma Media’s management, employees in Finland and man- agement teams in our 11 operating countries committed to a common sustainability target alongside financial targets. Our sustainability target covers seven indicators related to the environment, social responsibility and good governance. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 160ANNUAL REPORT 2022 SUSTAINABILITY REPORT Alma Media’s sustainability programme SUSTAINABLE ALMA MEDIA AND SUSTAINABLE BRANDS PROFITABLE GROWTH AND HIGH BUSINESS ETHICS FUTUREFIT WORKFORCE ENVIRONMENTAL RESPONSIBILITY RESPONSIBLE MEDIA, JOURNALISM AND MARKETING RESPONSIBLE SERVICES AND MARKETPLACES The profitability of operations is a prerequisite for our sustainable growth. We expect high integrity and ethics from ourselves and our cooperation partners. We do not accept violations of human rights, discrimination, harassment or corruption. We promote sense of equality, in- clusion and diversity in our work community. We provide develop- ment opportunities for our our employees. We minimise the greenhouse gas emissions of our own operations and our subcontracting chain. We set an example of the transi- tion to digital business in the me- dia sector. Reliable, pluralistic and indepen- dent journalism is a precondition for democracy in our society. We take responsibility for our con- tents, correct any errors and de- fend the freedom of speech. We develop media and services and use data responsibly. Our leading digital services for mobility, housing and recruit- ment enable sustainable choic- es in both business activities and private consumption. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 161ANNUAL REPORT 2022 SUSTAINABILITY REPORT Materiality analysis Innovation, cooperation and partnerships Customer satisfaction Future-fit workforce Data security and data protection Responsible media Business ethics Diversity, equality and inclusion Supply chain sustainability Climate change Sustainable cities and communities Ethical and green service design In autumn 2021, Alma Media conducted a materiality analysis to identify the expectations of its key stake- holders for the company’s sustainability work. The anal- ysis was based on an extensive stakeholder survey, sec- tor analyses, interviews of individuals and workshops for employee groups. Over 1,000 readers of Alma’s media and users of our services as well as over 500 Group em- ployees responded to the survey in October–November 2021. In addition, we organised several internal dis- cussion forums and nine workshops with internal and external specialists in order to determine the objectives for the corporate responsibility programme. The materiality analysis led to the deﬁnition of 11 essential sustainability areas for Alma Media. These 11 focus areas can be inspected at two levels: sustain- able Alma Media and sustainable brands. Alma Media’s stakeholders consider the company’s digital transition, which has continued for years, to be a positive devel- opment and recognise the company's previous sustain- ability efforts. According to stakeholders, Alma Media’s sustainability efforts emphasise the importance of data protection and data security, responsible processing of data and responsibility in the development of new digital business. From the perspective of social sustain- ability, the Group’s key focus areas include the well-be- ing of employees, competence development, career opportunities and the equal treatment of employees. From the environmental perspective, our stakeholders felt that the positive environmental impact of products and services as well as the environmental efﬁciency of Alma Media’s own operations were the most important subjects. Sustainable Alma Media Sustainable brands Stakeholder survey and individual interviews Media readers, users of services (1,123) Customers, investors Employees in Finland and abroad Users and readers Employees in Finland and in 10 European countries (524) Individual interviews (8) Workshops (9) FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 162ANNUAL REPORT 2022 SUSTAINABILITY REPORT Stakeholder Form of interaction Matters most relevant for the group of stakeholders Employees • Online survey to all employees • Workshops and discussion forums with different employee groups • Employee well-being, appreciation and equal treatment • Competence development and support for career opportunities • Proﬁtable and stable business • Sustainability in the development of new products and services • Reliable and fair management communications • Code of Conduct and anticipation of risks Readers, users, consumers • An online survey for the readers and users of the biggest media and websites • Reliability of information, journalistic integrity and accuracy of contents • Promoting societal discussion and freedom of speech • Preventing misleading and false advertising • Observing the laws and regulations in the collection and processing of personal data • Taking care of the data security and data protection of services • Responsible processing and utilisation of customer data Customers, advertisers • Operational analyses of the most relevant customer industries for our revenue and individual interviews with representatives of the companies • Good environmental risk management • Emphasising social sustainability and good governance in Alma’s international business • Ensuring competent workforce in the digital transformation • Ensuring the ethics of advertising and the brand safety of our own advertising platforms Investors, shareholders, analysts • Analyst interviews • Market environment and competitive landscape, objectives, reporting, strategy and ﬁnancial position • Adequate and balanced sharing of ﬁnancial and non-ﬁnancial information about the Group • Responding to increasingly tight sustainability requirements • Alma Media’s sustainability story as a part of the equity story • Building sustainable business growth Suppliers, subcontractors • Interviews with the managers of key purchasing sectors (printing, delivery and ICT) • Fair and equal treatment, equitable, open and transparent supplier requirements • Alma Media’s procurement policy and Code of Conduct for suppliers • Cooperation to minimise greenhouse gas emissions in the partner network Media • Desktop analysis and interviews of the Editors-in-Chief of the biggest media • Responsible journalism and marketing, high quality of data • Data protection and data security according to the laws and regulations • Openness, transparency and proactivity in the offering of information • Accuracy of contents • Quick response and replying to enquiries Society and the authorities • Sector and desktop analysis • Observing the laws and regulations in the collection and processing of personal data • Taking care of the data security and data protection of services • Responsible processing and utilisation of customer data Stakeholder interaction Alma Media updated its materiality analysis in 2021 based on an extensive stakeholder survey, individual interviews and sector analysis as well as workshops. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 163ANNUAL REPORT 2022 SUSTAINABILITY REPORT The Sustainable Development Goals of the UN relevant for Alma Media The Sustainable Development Goals of the UN cover the global challenges shared by us all. Alma Media is committed to supporting sustainable growth in society, for companies and for individuals. Based on our materiality analysis, Alma Media has included nine Sustainable Development Goals of the UN in its sustainability programme. We focus on the competence devel- opment of our employees and sup- port personal career development by providing many kinds of training and coaching. Our selection of publications and training enables the development of skills required in working life. Our media increase understanding of the importance of equal working life in society. We offer equal opportunities for development and require gender equality and the development of diver- sity and sense of inclusion in our work community. Our ﬁnancial and professional media focus on the promotion of sustain- able ﬁnancial growth. Our cooperation with various parties aims to support young people and those suffering from reduced working capacity. Alma is an employer and a taxpayer in 11 European countries. Our media raise awareness about inno- vations for sustainable development, the ﬁnancial and non-ﬁnancial results of companies and solutions to mitigate climate change. We also encourage innovation in our organisation. The carbon footprint of our operations was halved within the past six years. We set an example for our industry in the transition to a low-carbon society. We minimise the CO 2 emissions of our own operations and those of our subcon- tracting chain. Reliable and independent journalism is a precondition for functional democra- cy in society. Our media cherish peace and fairness, examine the ethically sustainable operations of those in power and do not hesitate to reveal any injustices. Our media and services are widely con- nected with business and society and through numerous sustainable projects in our 11 European countries. We care- fully select our partners and require ethically sustainable business. We bring together supply and demand as well as service providers and con- sumers and offer sustainable options for housing, mobility, working life and recruitment. Our media publish news about the environmental impacts of different industries and increase awareness of sustainable consumption. We seek to maximise the positive environmental impacts of our operations and inspire to make sustainable choices. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 164ANNUAL REPORT 2022 SUSTAINABILITY REPORT Sustainable Alma Media FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 165ANNUAL REPORT 2022 SUSTAINABILITY REPORT Alma Media’s sustainability efforts are guided by the Group’s core values as well as the Sustainable Development Goals (SDG) of the UN that are the most relevant to Alma Media’s business: • quality education (SDG 4) • gender equality (SDG 5), • decent work and economic growth (SDG 8), • innovation and procurement (SDG 9), • sustainable cities and communities (SDG 11, related to the housing marketplace business in Finland), • responsible consumption (SDG 12, related to the ability of consumer media and services to inﬂuence consumer choices), • climate change mitigation (SDG 13), • peace and justice (SDG 16, related to the functioning of media as a social institution), and • partnerships and co-operation for the goals (SDG 17, related to Alma Media’s ability to contribute to sustainable development with its extensive partner network). Alma Media develops its responsibil- ity in compliance with the legislation governing business activities and the media industry. The development of corporate responsibility is guided by the Management of corporate sustainability and risks company’s policies, guidelines and com- mitments as well as guidelines deﬁned by external parties that are signiﬁcant to the Group’s operations. Good governance • The corporate sustainability pro- gramme and its targets • Code of Conduct • Disclosure policy • Insider guidelines • Procedures for related party trans- actions • Remuneration principles and remuneration policy • Tax policy • Investment and ﬁnancing policy • Procurement policy • Data security policy • Data protection guidelines and principles • Continuity plan • Contractual terms and terms of sale concerning the advertising custom- ers of Alma Media’s media sales Environmental responsibility • The Group’s climate targets based on the Science Based Targets initiative • The UN Global Compact initiative and the Sustainable Development Goals of the UN Social responsibility • Equality and non-discrimination principles and equality and diversity plans • Career development principles • The Board of Directors’ diversity policy Journalistic content Guidelines created by external parties: • The Council for Mass Media Guidelines for Journalists and basic agreement Media and marketing • The marketing code of the Interna- tional Chamber of Commerce • Principles concerning good market- ing practices • Europe-wide self-regulation of tar- geted online advertising (so-called OBA self regulation) • Guidelines by the IAB digital marketing network, including the IAB Europe Transparency & Consent Framework v2.0 (TCF) Management of sustainability and responsibility at Alma Media Alma Media’s Board of Directors discusses corporate sustainability goals and the action plan when assessing the risks related to the business, deciding on annual renumeration principles and when approving the Group’s statement of non-ﬁnancial information. The compa- ny’s Management Team leads the devel- opment of responsibility, sets the targets of the sustainability programme and is responsible for monitoring progress. Business unit management and key employees in the Group’s procure- ment function, HR management, legal department and ICT are responsible for the practical implementation of the sustainability programme. The develop- ment of the sustainability programme Alma Media’s sustainability efforts are guided by the Group’s core values as well as the Sustainable Development Goals (SDG) of the UN that are the most relevant to its business. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 166ANNUAL REPORT 2022 SUSTAINABILITY REPORT in the Group Executive Team is coor- dinated by the Senior Vice President, Communications and Brand, supported by the corporate communications team. Business functions are supported in the setting of objectives to different areas and the achieving of the sustainabil- ity targets, implementation of proj- ects and development work as well as communications. Management of risks related to sustainability and responsibility Alma Media’s risk management is de- scribed more comprehensively in the Report by the Board of Directors that also covers sustainability and respon- sibility risks, whose signiﬁcance is assessed both in ﬁnancial terms and in terms of the potential damage caused to the Group’s reputation. The Group communicates its sustainability risks and challenges transparently to company stakeholders.. Stakeholder interaction Interaction with signiﬁcant stakeholders, employees, customers, investors and cooperation partners is a natural and important part of Alma Media’s business. Alma Media also manages its stakehold- er relationships by being involved in cooperative bodies and associations. The Group’s most signiﬁcant memberships include the Confederation of Finnish Industries EK, the Central Chamber of Commerce, the Advisory Board of Finnish Listed Companies, the Finnish Media Federation (Finnmedia), the digital marketing and advertising growth-pro- moting organisation IAB Finland, the FIBS corporate responsibility network, the City of Helsinki Climate Partners network and the Responsible Media Forum. The goal is to engage in equal dialogue with other parties and to an- ticipate changes related to the industry and corporate sustainability. In addition to these, many members of Alma Media’s Group Executive Team and managers and experts hold board memberships in the Media Industry Research Foundation of Finland, Finnish Media Federation, the Finnish Periodical Publishers’ Association and Media Metrics Finland. Alma Media is also a member of INMA (International News Media Association) and ICMA (International Classiﬁed Marketplace Association). During the year under review, Alma Media’s most important social partner in Finland was the Finnish Children and Youth Foundation, with which the Group has a key partnership agreement. As a media company, it is important for Alma Media to maintain its impartiality and independence with respect to various stakeholder interests. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 167ANNUAL REPORT 2022 SUSTAINABILITY REPORT Summary of Alma Media’s key sustainability targets KPI Target Result 2022 Objectives 2023 Responsible journalism: journalism marketing Condemnatory decisions issued by the Council for Mass Media <5 condemnatory decisions issued by the Council for Mass Media regarding Alma Media’s media 2 condemnatory decisions for Iltalehti <5 condemnatory decisions issued by the Council for Mass Media regarding Alma Media’s media Adherence to the International Chamber of Commerce’s guidelines on good marketing practices 0 advertisements in violation of good marketing practices in the Group’s media and services 0 0 advertisements in violation of good marketing practices in the Group’s media and services Ethics in business: employees subcontracting Adherence to Alma Media’s updated Code of Conduct among the Group’s employees and in the subcontracting chain Rate of completion of Code of Conduct training among the Group’s employees 100% of the employees 100% of the employees Most signiﬁcant subcontractors commit to Alma Media’s Code of Conduct 73 per cent of the most signiﬁcant subcontractors completed the company's Code of Conduct training. 90 per cent of the most signiﬁcant subcontractors have completed the company's Code of Conduct training. Data security and data pro- tection Alma Media’s services offer a high standard of data security for users, and customer data is processed in a diligent and legally compliant manner There are no serious data privacy breaches in the services for which the authorities would impose a ﬁne 0 0 serious data privacy breaches Good employer Alma Media’s QWL (Quality Worklife) employee survey > 83% 83.1% 83% QWL index Environmental responsibility: Own operations (Scope 1 & 2) Subcontracting chain (Scope 3) CO2 emissions arising from the consumption of electricity, district heating and district cooling and the energy consumption of company cars -52% (2019–2030) -9.2% (Scope 1 & 2) -4.3% (Scope 1 & 2) Indirect CO2 emissions caused by the subcontracting chain -14% (2019–2030) +8.2% (Scope 3) -1.23% (Scope 3) FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 168ANNUAL REPORT 2022 SUSTAINABILITY REPORT Business ethics Alma Media does not condone the use of unethical business practices by its employees or suppliers. The Group condemns corruption and bribery. These and other key ethical principles are documented in the company’s Code of Conduct, which is the foundation of the Group’s responsible business. The digital Code of Conduct training is part of employee induction, and 100 per cent of Alma Media’s employees in 11 operating countries have completed the Code of Conduct training. The most sig- niﬁcant subcontractors are also required to complete the Code of Conduct online training intended for subcontractors and partners. Alma Media does not receive or grant political or other contributions that could compromise its independence. Alma Media’s media brands grant dis- counts on advertising to non-proﬁts and non-governmental organisations as well as parties and candidates in election ad- vertising, but the terms of the discounts are the same for everyone. Alma Media has a zero tolerance policy for unethical business conduct. Alma Media’s employees and stakeholders have access to a whistleblowing channel for anonymously reporting any suspi- cions of misconduct. The Group’s exec- utive management is responsible for the regulatory compliance, ethicality and Table 1: Business ethics Deﬁnition 2022 Progress made in 2022 Deﬁnition 2023 Alma Media does not condone the use of unethical business practices by its employees or suppliers, condemns corruption and bribery and requires commitment to the Group’s Code of Conduct. We implemented Alma Media’s updated Code of Conduct training course for our employees in 11 languages in 11 European countries. Alma Media does not condone the use of unethical business practices by its employees or suppliers, condemns corruption and bribery and requires commitment to the Group’s Code of Conduct. Strategic intent Strategic intent Alma Media’s employees and subcontractors have taken the Group’s Code of Conduct training and committed to observing it in everything they do. We designed and implemented a Supplier Code of Conduct training. We required all new Alma employees to take the Alma Code of Con- duct training. There are no violations of the Group’s Code of Conduct amongst the company’s employees or its subcontracting chain. Objectives for 2022: Objectives for 2023: Alma employees in all the countries of operation complete the updated Code of Conduct training. By the end of 2022, 100 per cent of Alma employees had completed the Group’s updated Code of Conduct training. All Alma employees in all 11 countries, including new employees, have completed the updated Code of Conduct training. 50 per cent of the company's most signiﬁcant suppliers in the subcon- tracting chain are committed to complying with Alma Media’s Code of Conduct. Alma Media required all of its key subcontractors to commit to com- pleting the Supplier Code of Conduct training. By the end of 2022, 73 per cent of the most signiﬁcant suppliers on the basis of the value of the purchases in the 11 operating countries had completed the Supplier Code of Conduct training. 90 per cent of Alma Media’s most signiﬁcant subcontractors are com- mitted to the company's ethical guidelines by completing the Supplier Code of Conduct training. The whistleblowing channel informs the company of any potential misconduct in the Group. The whistleblowing channel is available in all Alma Media’s operating countries in 11 languages. The whistleblowing channel informs the company of any potential misconduct in the Group. There are no incidents of corruption, bribery or human rights violations in the Group or in its subcontracting chain. There were no incidents of corruption or anti-competitive behaviour at Alma Media in 2022. The company is not aware of any ongoing ofﬁcial investigations related to Alma Media. Risk management will be improved further by reviewing the risk proﬁle in Alma Media’s operating areas and, if necessary, by enhancing com- munications and training. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 169ANNUAL REPORT 2022 SUSTAINABILITY REPORT transparency of business operations. The whistleblowing team, consisting of rep- resentatives of Group management, re- ceives the notiﬁcations and reports them to the Audit Committee of the Board of Directors. Violations of the Code of Conduct result in the necessary mea- sures and, if necessary, the termination of employment. During the year under review, the Group was informed of three suspected Code of Conduct violations through the whistleblowing channel. There were no incidents of corruption or anti-competitive behaviour at Alma Media in 2022. Furthermore, the compa- ny was not the subject of any reprimands from the authorities or rulings pertaining to non-compliance with laws and regu- lations governing social and economic responsibility. As a result, there were no ﬁnancial losses arising from legal action. Alma Media’s business is built on the foundation of consumer and advertiser trust in the Group’s content and ser- vices, and the company’s credibility as an independent, reliable and responsible operator must not be compromised. The Group’s media did not receive any gov- ernmental or private subsidies or assis- tance to fund their operations. Alma Media’s tax footprint in 2022 Alma Media reports its tax footprint an- nually to ensure the transparency of its operations. The Group’s tax policy is to pay taxes in the country where the result is generated. Alma Media’s services are the leading services in their segments in many of the Group’s countries of op- eration and they are also perceived as attractive employers. They support eco- nomic activity in their communities by paying taxes and purchasing products and services from their subcontractors. The Group complies with the current legislation, tax instructions and interna- tional transfer pricing guidelines in its operations. The corporate income tax rates in Alma Media’s operating coun- tries vary from 10 per cent in Bosnia and Herzegovina to 21 per cent in Slovakia. Alma Media did not receive any subsi- dies from public or private sources in the review year. The value creation model on page 21 of the Report by the Board of Directors describes the added value cre- ated by Alma Media to its stakeholders. Development projects during the year During the year under review, Alma Media implemented the Code of Conduct online training aimed at subcontractors and partners. By the end of 2022, 73 per cent of Alma Media’s most signiﬁcant suppliers in the 11 operating countries had completed the Code of Conduct training. Focus areas for the development of sustainability in 2023 In 2023, the company will continue to encourage its subcontractors to com- mit to the Code of Conduct aimed at Alma Media’s suppliers. The aim is also to require the company's new subcon- tractors and partners to commit to the completion of Alma Media’s Supplier Code of Conduct training when con- cluding a cooperation agreement. Furthermore, risk management will be improved by reviewing the risk proﬁle in Alma Media’s operating areas, and if nec- essary, communications and training will be enhanced. Alma Media has deﬁned the key areas of the company's sustain- ability and responsibility and the relat- ed target values or KPIs. The Group’s sustainability targets are also part of the incentive criteria for all Alma employees, in addition to the ﬁnancial targets. Collected and payed taxes Suomi Tsekki Slovakia Baltia Ruotsi Muut maat Yhteensä Corporate income tax 2.6 4.0 1.6 1.0 0.7 1.0 10.4 Effective tax rate 19.5% 19.5% 21.8% 20.0% 20.7% 17.1% 20.6% Employer contributions 1.6 4.1 1.0 0.8 0.3 0.8 8.8 Other paid taxes 0.0 1.7 0.0 0.0 0.0 0.0 1.7 Payed taxes total 4.3 9.7 2.7 0.2 1.0 1.8 21.0 Net VAT 19.7 11.3 2.9 1.7 1.1 2.6 39.3 Employer taxes 20.6 0.0 0.7 0.7 0.3 0.7 23.0 Other collected taxes 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Collected taxes total 40.2 11.3 3.6 2.4 1.4 3.3 62.2 Collected and payed taxes total 44.5 21.1 6.3 4.0 2.3 5.1 83.2 FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 170ANNUAL REPORT 2022 SUSTAINABILITY REPORT For two decades, Alma Media has systematically and successfully imple- mented a strategy based on the digital transformation of business. During the past six years, Alma Media has halved the greenhouse gas emissions arising from its own operations. The production and distribution of digital content and services is not only more environmen- tally friendly but also more cost-efﬁ- cient compared to print products. The transition from print to digital has been reﬂected in improved proﬁtability and increased adjusted operating proﬁt. Climate change The decision to invest in digital business has also mitigated the company's short and medium-term risks related to climate change. At the same time, the transition to low-carbon society has created business opportunities and increased resource ef- ﬁciency. Thanks to the digital transforma- tion, Alma Media has been able to reduce its emissions and optimise its distribution routes and production both in terms of energy use and materials. The production of digital content and services involves substantially lower consumption of mate- rials and electricity compared to the print business. The cloud services and tele- communication services used for data management in Alma Media’s Finnish operations are produced primarily from renewable energy or the emissions are compensated. In 2022, digital sources accounted for 80 per cent, or approximately EUR 250 million, of Alma Media’s business. The Group’s annual capital expenditure un- der the digital business model amounts to approximately EUR 3–4 million. The transition from print to digital was a signiﬁcant factor affecting the Group’s improved proﬁtability in 2016–2022. Management of environmental responsibility In 2018, Alma Media was the third media company in the world to publish ap- proved, science-based climate targets. Thanks to signiﬁcant changes in the business operations, the SBT for 2025 based on the 2016 baseline was achieved ahead of schedule and the company wanted to update and signiﬁcantly tight- en its climate targets. Emissions reduction 2016–2022 Scope 1 & 2 and Scope 3 The ﬁgures may differ from those previously reported due to the calculation method in accordance with the SBTi 1.5C validation, the revised emission coefﬁcients and the revised calculation values. 2016 2017 2018 2019 2020 2021 2022 tCO 2 -eq Scope 1 +2 Emission trend Scope 1 Scope 2 Excl. portfolio changes 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 tCO 2 -eq 2016 2017 2018 2019 2020 2021 2022 Scope 3 Emission trend Scope 3 Excl. portfolio changes 60,000 50,000 40,000 30,000 20,000 10,000 0 FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 171ANNUAL REPORT 2022 SUSTAINABILITY REPORT The carbon footprint of Alma Media’s own operations is small, and only four per cent of the greenhouse gases arising from the Group arise in the Group’s own operations, while 96 per cent arise in the subcontracting chain. In June 2022, the Science Based Targets (SBT) organisa- tion approved Alma Media’s new sci- ence-based climate targets. Alma Media is committed to reducing its absolute Scope 1 and Scope 2 greenhouse gas emissions by 52 per cent and the emis- sions of its subcontracting chain by 14 per cent by 2030 compared to 2019. The SBTi initiative aims to limit global warming to 1.5°C. Emission reductions in accordance with Alma Media’s plan will focus particularly on reducing emissions from company cars, electricity, district heating and cooling in business prem- ises, and on magazine printing, logistics and ICT procurement in the subcon- tracting chain. Alma Media’s Board of Directors mon- itors the company’s progress towards the environmental responsibility targets speciﬁed in the sustainability pro- gramme. The key employees, together with the management team, plan and decide on the actions to be taken. Alma Media or its business units were not subject to any penalties or reprimands for non-compliance with environmental laws and regulations in their operating countries during the year under review. The climate target is one of the common incentive criteria for Alma Media’s man- agement and employees. Achievement of sustainability targets in 2022 According to the SBTI target set by Alma Media in 2022, the company must reduce its greenhouse gas emissions caused by electricity, district heating, district cooling and fuel consumption by 4.3 per cent annually and by 52 per cent by 2030. Indirect greenhouse gas emissions from procurement must decrease by 14 per cent by 2030 and by 1.23 per cent annually. Progress with respect to the latter target is reported on page 21 / 160 (Supply chain sustainability). To improve the reliability and conti- nuity of emission calculations, Alma Media adopted the International Energy Agency IEA’s country-speciﬁc emission coefﬁcients in 2021 for instances where an energy producer-speciﬁc emission factor is unavailable, and emission ﬁg- ures were retrospectively recalculated according to this decision. The ﬁgures for 2019–2022 have also been adjusted to only reﬂect the Group’s continuing op- erations. The reporting of environmental ﬁgures covers all of Alma Media. In 2022, the Scope 1 and Scope 2 emis- sions reported by the company de- creased by 9.3 per cent compared to 2021. Compared to the level of 2019, the Table 2: Alma Media and the environment Unit 2019 2020 2021 2022 Amount of energy Fuels GJ 6,151 3,946 3,634 3,380 Electricity GJ 7,455 5,991 5,414 5,429 District heating and district cooling GJ 4,955 3,880 6,071 5,423 Emissions Direct emissions (Scope 1) tC0-eq Fuels 420 264 240 217 Indirect emissions (Scope 2) tCO-eq District heating, district cooling and electricity, mar- ket-based 375 291 250 228 District heating, district cooling and electricity, loca- tion-based 494 349 411 386 Share of renewable energy, Scope 1 and Scope 2 28% 36% 49% 53% Share of renewable energy, Scope 2 42% 49% 63% 68% Scope 3 tCO-eq 17,338 13,964 14,996 16,222 Greenhouse gas emissions from electricity, fuel consumption, district heating and cooling will be reduced by 52 per cent by 2030. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 172ANNUAL REPORT 2022 SUSTAINABILITY REPORT change is -44.1 per cent. The purchasing of zero-emission hydropower electricity continued in Finland in 2022. Table 2 on the last page describes the amounts and development of own energy, direct greenhouse gas emis- sions (Scope 1) and indirect greenhouse gas emissions (Scope 2) in the Group’s continuing operations. The energy consumption of the properties under the company's control amounted to 3,013 MWh of electricity, district heating and district cooling. Renewable energy accounted for 68 per cent of this. The energy consumption of the cars owned and used by the company decreased by 6.9 per cent compared to the previous year. The decrease in the energy con- sumption of company cars was due to an increase in remote work and remote meetings in business operations as well as the renewal of the car ﬂeet towards a lower-emission, more energy- efﬁcient direction. Alma Media calculates the consumption of electricity, district heating and district cooling mainly at the company’s Finnish properties based on the invoices issued by the energy companies. The same practice is used in the other operating countries where consumption data is available. If the data is not available and if energy is includ- ed in the monthly rent for the property, electricity consumption is calculated based on the ﬂoor area. In the business activities in Finland, electricity is hydro- power-generated, emission-free and renewable. With regard to the head ofﬁce in Finland, the procurement of district heating and cooling produced with re- newable energy was continued in 2022. The energy consumption data for Alma Media’s company cars and cars that fall under an unlimited car beneﬁt has been primarily collected from service providers. The calculation of emissions is based on actual energy consump- tion where purchased energy types are multiplied by energy type-speciﬁc emission coefﬁcients for each country of use. Scope 1 emissions consist primarily of carbon dioxide emissions (CO 2 ). When possible, Alma Media utilises the ener- gy supplier-speciﬁc emission ﬁgures in the calculation of Scope 2 emis- sions using the market-based method. If such ﬁgures are not available, the Group uses the country-speciﬁc IEA emission coefﬁcients that are also used as the basis of location-speciﬁc emis- sion calculations. In 2022, the Group’s greenhouse gas emission intensity was 0.2 tCO 2 -eq per employee. Alma Media calculates its greenhouse gas emis- sion intensity based on its Scope 1 and Scope 2 emissions. Scope 2 emissions are calculated using the market-based method. Emissions intensity is reported relative to the number of employees. The greenhouse gas emissions caused by the electricity, district heating and district cooling consumption of properties de- creased by 9.3 per cent from the com- parison year to 228 tCO 2 -eq, calculated using the market-based method. Energy consumption is measured using speciﬁc emission coefﬁcients based on country, type and supplier. Table 3: Climate change Deﬁnition 2022 Progress made in 2022 Deﬁnition 2023 In accordance with the 1.5°C limit SBTi target set in 2022, the green- house gas emissions from the company’s activities (Scope 1&2) must be reduced by 4.3 per cent annually and by a total of 52 per cent by 2030. In the subcontracting chain (Scope 3), reduction of greenhouse gas emissions by 1.23 per cent annually and by a total of 14 per cent by 2030 compared to 2019 Alma Media’s science-based climate target was formally approved by the SBTi organisation in June 2022. Annual Scope 1, 2 & 3 targets set for the company’s operations and subcontracting chain were achieved. In accordance with the 1.5°C limit SBTi target set for 2030, the green- house gas emissions from the company's activities (Scope 1&2) must be reduced by 4.3 per cent annually and by a total of 52 per cent by 2030, compared to 2019. Strategic intent: Strategic intent: Minimising the greenhouse gas emissions arising from the Group’s own operations. An industry leader in the transition to low-carbon business operations and climate change mitigation. Minimising the greenhouse gas emissions arising from the Group’s own operations. An industry leader in the transition to low-carbon business operations and climate change mitigation. Objectives for 2022: Objectives for 2023: Reduction of direct (Scope 1&2) emissions by 4.3 per cent annually and by 52 per cent by 2030 (real estate, energy, company cars). In 2022, direct (Scope 1&2) greenhouse gas emissions decreased by -9.3 per cent compared to 2021 and the decrease compared to 2019 was -44.1 per cent Reduction of direct (Scope 1&2) greenhouse gas emissions by 4.3 per cent compared to 2022 (real estate, energy company cars) and decrease compared to 2019 52 per cent in total by 2030 Reduction of indirect (Scope 3) greenhouse gas emissions in the sub- contracting chain by 1.23 per cent by 2021 and by 14 per cent from 2019 to 2030. Indirect (Scope 3) greenhouse gas emissions increased by +8.2 per cent compared to 2021 and decreased by a total of -6.4 per cent com- pared to 2019. Reduction of indirect (Scope3) greenhouse gas emissions by 1.2 per cent annually and by 14 per cent by 2030 FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 173ANNUAL REPORT 2022 SUSTAINABILITY REPORT Management of risks related to climate change Alma Media applies a business-oriented and holistic approach to risk assessment and management, and climate-relat- ed risks are included in this process. The risk identiﬁcation process is the same for short, medium and long-term risks. All business areas and most of the business-critical functions are included in a company-wide, consolidated risk management process. In the matrix, the risks and parameters are assessed on a scale of low to medium to high. Each risk undergoes a qualitative assessment of likelihood and consequences. The assessed results are placed in the risk matrix. The company considers the risk substantial when the probability of the risk materialising within 6 months is high and the net losses are more than EUR 10 million (high risk). The group in charge of the ﬁnances of the business segments is responsible for developing the segment's risk matrix. The director of the ICT organisation also compiles a risk matrix because safe, fast and reliable ICT operations are critical for the company's business and ICT can opt for digital solutions to replace more en- ergy-intensive solutions. In the Group's risk matrix, the most signiﬁcant risks and uncertainties, as well as the related material changes and responses to them, are reported by the CFO to the Audit Committee of the Board of Directors. The Board of Directors of Alma Media pro- cesses the Group's most signiﬁcant risks and uncertainties. The Board of Directors reports on the most signiﬁcant risks and uncertainties and any material changes in the company's half-year and interim reports. The CFO coordinates the risk management process and performs the risk identiﬁcation and risk management speciﬁcation and is responsible for the implementation together with the busi- ness operations and ICT. All employees must know and manage the risks in their area of responsibility. Alma Media has identiﬁed risks relat- ed to climate change that may have a signiﬁcant ﬁnancial or strategic im- pact on the company's business. Alma Media manages its environmental risks by systematically developing its oper- ations in accordance with the Group’s SBTi climate targets and by engaging in active environmental dialogue with its key suppliers. The environmental risks associated with purchasing are reduced by Alma Media operating in 11 European countries. The procurement of each country unit is focused on the domestic market or nearby regions, which enables comprehensive oversight of suppliers. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 174ANNUAL REPORT 2022 SUSTAINABILITY REPORT Risks and opportunities related to climate change Examples of risks and opportunities re- lated to climate change in Alma Media’s business operations include tighter regulation of companies at the EU level and changes in carbon pricing mecha- nisms. Climate change is likely to have a wide-ranging impact on consumer behaviour, and Alma Media must adapt to these changes in order to remain competitive in the market. As consum- ers become more aware of the environ- mental impacts of their consumption habits, they may be more likely to make choices that are more sustainable or environmentally friendly. In addition, climate change may change consumer behaviour by inﬂuencing the availability and price of certain products, which may also lead to changes in customer adver- tising and marketing. Extreme weather events caused by climate change, such as ﬂoods and the resulting landslides, are estimated to in- crease the risk of digital service disrup- tion in Alma Media’s operating countries to some extent. The risk of disruptions in the availability of digital services is mitigated by improving operational reliability. Reliability has been improved by moving all of the services that are important to Alma Media’s business to cloud services. Other server capacity needed by the Group is purchased from modern data centres maintained by subcontractors. In addition to the risks, the company has also identiﬁed opportunities related to climate change in business, the most im- portant of which is the digital transition. Consumers' growing interest in the use of digital services in larger purchases as well, such as in connection with home and housing or driving and mobility, in- creases Alma Media’s business opportu- nities. The increased use of low-emission energy sources is also an opportunity in Alma Media’s business and creates cost savings for the company. Alma Media’s services reach the majority of consumers in their operating areas and are the market leader in 11 countries. 80 per cent of the business is already based on digital business models that are highly scalable and, thus, enable the development of additional services and entirely new digital business in the tran- sition to a low-carbon society. Alma Media follows the international recommendations of TCFD (Task Force on Climate-related Financial Disclosure) on the reporting of the Group’s risks and opportunities related to the climate. Alma Media’s climate risk table in accor- dance with TCFD is shown on page 42 of sustainability report and on 181 of the Annual Report. Focus areas for the development of environmental responsibility in 2023 After the Russian invasion of Ukraine in February 2022, Finland, together with the rest of Europe, faced an energy crisis. Russia began to blackmail Europe with its energy assets, and during the spring and summer, imports of electricity, wood chips, pipeline gas, coal and oil from Russia ceased. Electricity prices, in particular, were at times very high due to the crisis, but historically high prices were paid for almost all forms of energy. However, the dependence of Finland and Alma Media’s operating countries on natural gas was lower than in the rest of Europe. The terrible war in Ukraine has forced the whole of Europe to innovate and renew itself in the ﬁeld of ener- gy. Renewable energy, hydrogen, new technologies and energy efﬁciency have transformed from a possibility to a reality in almost all of the company's operating countries. In 2023, Alma Media will continue to focus on minimising the carbon footprint of its own operations and reducing emis- sions in its subcontracting chain, as well as on strengthening the climate-friendly impacts of its own operations. Alma Media’s SBTi target means an annual re- duction of at least 4.3 per cent in green- house gas emissions caused by its own operations and a reduction of at least 1.2 per cent in the emissions of the subcon- tracting chain. Alma Media will continue to require the company's most signiﬁcant service pro- viders to commit to the climate targets and the implementation of the compa- ny's Code of Conduct. The renewal of the company's car ﬂeet in a lower-emission, more energy-efﬁcient direction will be continued in all operating countries. Alma Media’s operating countries in Eastern Central Europe are also engaged in an active dialogue with the landlords of the premises on the possibilities of ensuring the use of low-emission and renewable energy. Various measures are taken to ensure that cooperation to mitigate climate change, promote sus- tainable consumption and ethical good governance in business is sufﬁciently ambitious, comprehensive and effective. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 175ANNUAL REPORT 2022 SUSTAINABILITY REPORT Development and focus areas of supply chain sustainability in 2023 Alma Media’s updated, science-based climate targets were approved in June 2022. Achieving the Group’s SBTi target requires a reduction of greenhouse gas emissions arising from the subcontract- ing chain by 14 per cent by 2030 com- pared to 2019. According to this target, the emissions arising from the subcon- tracting chain must decline by 1.23 per cent annually. The emission reduction target mainly applies to the Group’s printing and logistics procurements and the procurement of ICT services. Supply chain sustainability In addition to the dialogue with its key subcontractors regarding the reduction of greenhouse gas emissions, the Group engages in regular dialogue regarding the importance of ethically sustainable business. Alma Media’s relationships with subcontractors are guided by the Group’s Code of Conduct, which un- equivocally prohibits corruption, bribery, human rights violations and other in- appropriate treatment of employees. In order to develop sustainability in its sub- contracting chain, Alma Media required its most signiﬁcant suppliers during 2022 to commit to complete the Supplier Code of Conduct training designed for the company's subcontractors and part- ners, with the aim of committing at least 50 per cent of the signiﬁcant suppliers. By the end of the year, more than 70 per cent of the company's most signiﬁ- cant subcontractors had completed the training and agreed to commit to the Code of Conduct. Alma Media reserves the right to monitor the sustainability of its suppliers by conducting audits at their premises or by requiring docu- mentation regarding the sustainability of the services or products they produce. When the Group signs a signiﬁcant new subcontracting agreement, a visit is made to the production facility before Table 4: Other indirect emissions (Scope3) tCO2-eq 2019 2020 2021 2022 Purchased products and services (category 1) 13,304 10,385 11,871 13,057 Capital goods (category 2) 0 0 0 0 Fuel production and energy transmission losses not included in Scope 1 or 2 (category 3) 183 124 138 128 Product transport and service (upstream, category 4) 3,476 3,257 2,778 2,764 Business travel (category 6) 165 23 37 103 Commuter trafﬁc (category 7) 81 63 65 72 Disposal of products sold (category 12) 93 74 67 58 Investments (category 15) 36 38 39 39 Total Scope 3 emissions according to SBTi 1.5C validation 17,338 13,964 14,996 16,222 Use of products sold (category 11) 212 158 141 135 Our relations with subcontractors are determined by our ethical guidelines and the Supplier Code of Conduct. These Scope 3 categories have been re- viewed in the validation but are not relevant to Alma’s business. 5. Waste (reported as service purchases) 8. Leased property 9. Transportation and distribution (Down- stream) - reported as service purchases 10. Processing of products sold 13. Self-leased assets (reported as service purchases) 14. Franchising FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 176ANNUAL REPORT 2022 SUSTAINABILITY REPORT Table 5: Supply chain sustainability Deﬁnition 2022 Progress made in 2022 Deﬁnition 2023 Alma Media does not allow unethical business practices in companies included in its subcontracting chain, and the Group also requires that its subcontractors set targets to mitigate climate change. Alma Media planned and implemented a new ethical guidance for its subcontracting chain, the Supplier Code of Conduct training. The com- pany's Scope 3 emissions decreased by 6.4 per cent compared to 2019. Alma Media does not allow unethical business practices in companies included in its subcontracting chain, and the Group also requires that its subcontractors set targets to mitigate climate change. Strategic intent Strategic intent Alma Media’s subcontracting chain promotes the realisation of the Group’s climate target and the ethical conduct of business. Alma Media’s subcontracting chain has, in its part, committed to promoting the achieving of the SBTi target and socially and ethically sustainable business. Objectives for 2022: Objectives for 2023: 50 per cent of Alma Media’s key subcontractors have committed them- selves to the Group’s Supplier Code of Conduct. Alma Media implemented the new Supplier Code of Conduct training based on the value of its procurements to its most signiﬁcant subcon- tractors in its 11 operating countries. By the end of 2022, 73 per cent of the most signiﬁcant subcontractors had completed the training and acknowledged their commitment to the company's Code of Conduct. 90 per cent of Alma Media’s most signiﬁcant subcontractors have committed themselves to the Group's Supplier Code of Conduct by the end of 2023. According to the company's new SBTi target set in 2022, the green- house gas emissions of the subcontracting chain must be reduced by 1.23 per cent annually. By 2030, the reduction must be 14 per cent compared to 2019. In 2022, greenhouse gas emissions increased by 8.2 per cent from 2021. However, compared to 2019, the greenhouse gas emissions of the subcontracting chain have decreased by 6.4 per cent. Reduction of greenhouse gas emissions by 1.2 per cent from 2022. the ﬁnal choice of supplier. Alma Media was not made aware of any violations of the Group’s Code of Conduct among its subcontractors in 2022. Alma Media will continue to engage its most signiﬁcant suppliers to commit to the company's Code of Conduct in 2023. The Group’s most signiﬁcant subcon- tractors are certain ICT, printing and delivery suppliers. Continuous procure- ment from these suppliers correspond to 46 per cent of the Group’s procure- ments. Correspondingly, the share of procurements related to content generation of all the procurements made was 12 per cent in 2022. Alma Media units in all of the countries of operation make most of their purchases domestically or from nearby regions where businesses are subject to supervision and regula- tion. Country-level management is in charge of supply chain sustainability in Alma Media’s foreign units. In Finland, the Chief Procurement Ofﬁcer and the Director in charge of ICT procurement are in charge of developing the sustain- ability of the procurement policy and Group-level purchasing. Achievement of sustainability targets in 2022 According to the SBTi emissions target set in 2019 for Alma Media's indirect greenhouse gas emissions primari- ly caused by procurement (so-called Scope 3 emissions), the company must reduce its emissions by 14 per cent by 2030. The annual emission reductions must be at least 1.23 per cent. Alma Media’s indirect greenhouse gas emis- sions increased by 8.2 per cent in the year under review to 16,222 tCO 2 -eq (2021: 14,996 tCO 2 -eq). The increase in emis- sions was due to increased procurement related to newspaper printing and distribution, for example, as well as in- creased investments in the development of digital services. However, even in Scope 3 emissions, the company main- tained a downward trend in line with the long-term target level for the year 2030. Compared to 2019, the Group’s Scope 3 emissions have declined by 6.4 per cent in total. Alma Media continued to engage in active dialogue with subcontractors to reduce emissions and started de- velopment projects with signiﬁcant FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 177ANNUAL REPORT 2022 SUSTAINABILITY REPORT subcontractors in ICT services, deliv- ery services and printing operations to support Alma Media’s new SBTi climate targets. Alma Media’s supply chain in Finland consists of 2,000 subcontractors and approximately 3,900 subcontractors in all countries. The largest group com- prises small enterprises that primarily provide content production services to Alma Media’s editorial ofﬁces. The total purchases of the company's subcon- tracting in 2022 amounted to EUR 98 mil- lion. The most signiﬁcant subcontractor base for the company consisted of ap- proximately 140 suppliers in Finland and abroad, most of the companies providing distribution, printing and ICT services. Alma Media’s procurement function in Finland operates with a two-tier approach. In addition to centralised procurement at the Group level, there are also local purchases. Alma Media’s editorial ofﬁces, for example, purchase their content production services in- dependently because the production and procurement of relevant content requires a high degree of familiarity with the target audience. During the report- ing year, Alma Media’s purchases from service providers and suppliers totalled EUR 98 million. Alma Media’s most signiﬁcant Scope 3 emission intensities are related to the procurement of transport and deliv- ery services as well as the printing of publications. Alma Media reports on its other indirect greenhouse gas emissions in accordance with the international GHG Protocol. An itemisation of the company’s Scope 3 emissions is provid- ed in Table 4. Alma Media adopted the International Energy Agency IEA’s coun- try-speciﬁc emission coefﬁcients in 2022 for those instances where an energy pro- ducer-speciﬁc emission coefﬁcient has been unavailable. The emission ﬁgures for 2016–2022 were retrospectively recal- culated according to the IEA factors. The adoption of the IEA calculation guide- lines improves the reliability of environ- mental ﬁgures published by Alma Media and enables a continuous comparison. The monitoring of Alma Media’s SBTi targets also requires following the IEA standards. Scope 3 emissions consist primarily of carbon dioxide emissions (CO 2 ). FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 178ANNUAL REPORT 2022 SUSTAINABILITY REPORT Data security and data protection Approximately 80 per cent of Alma Media’s revenue now comes from digital sources. The company develops its online services in the long term, with the aim of providing consumers and advertisers with safe and versatile services with the best customer experience. It is essential for the success of the Group’s business that the users of its digital services feel con- ﬁdent that their customer data is stored, managed and used responsibly. It is equally important that our custom- ers feel that the services are competitive, effective and pleasant to use. In order to ensure the quality of its digital services, Alma Media focuses its investments on the development of digital business opera- tions that are also supported by actively monitoring changes in data protection and data security regulations as part of the company's risk management, and by strengthening the digital expertise as well as data protection and data security knowledge of its employees. The manage- ment of the business units, together with the ICT organisation and the legal depart- ment, are responsible for the technical development of the online services owned by the Group and for ensuring that they comply with data protection and data se- curity recommendations and regulations Data security and data protection as well as maintaining the appropriate level of employee competence pertaining to data protection and data security. Alma Media’s business environment is constantly changing, which is why the company regularly reviews the risks affecting data security and the ability to react to the risks of the changing environ- ment. Data security and data protection will be strengthened as necessary in order to reduce risks. In order to mitigate these identiﬁed risks (both external and inter- nal threats), entities outside Finland have been integrated into the Group network, which has brought all units under the same data security policies and controls, as well as user and access management. The Group’s privacy policy describes the Group’s responsibilities, requirements and practices related to the collection, use and storage of data based on the applica- ble legislation. At Alma Media, users of on- line services are asked for the necessary permits and the data is primarily used to deliver the service ordered by the user, to develop the user experience and to meet users' expectations. Secondarily, user data is used, for example, on the basis of user interest and behaviour, to target relevant advertising and content. In digital advertising, Alma Media is com- mitted to IAB's self-regulatory principles and uses the Consent Management Platform (CMP) of the Transparency and Consent Framework. In order to protect the privacy of users, the company com- plies with the statutory privacy protection obligations. The practices related to ensur- ing privacy protection and the purposes for which data are used are described in the Group’s privacy policy at https://www. almamedia.ﬁ/en/data-privacy/ Achievement of sustainability targets in 2022 Alma Media assesses its performance as a responsible digital operator primarily from the perspective of the users of the Group’s services. Accordingly, the Group has selected the security of its service as the focus area of its responsibility efforts. The Group has set two annual targets in this area. In line with the ﬁrst target, no serious breach of data protection should occur in the company's online services. During the year under review, the com- pany submitted one (1) personal data security breach notiﬁcation to the data protection authority and received a total of zero (0) requests for clariﬁcation. In addition, the company received two (2) requests for clariﬁcation from the Finnish Transport and Communications Agency Traﬁcom regarding the use of cookies on the website. The incidents did not result in condemnatory decisions or a sanction imposed by a decision of the authority. During the year, no legal action was taken against the Group related to the privacy of users. In the spring of 2022, the Russian inva- sion of Ukraine increased global political instability and the risk of data breaches. The most important media in Finland, including Alma Media, were targeted by data security breaches. However, se- rious, long-term service interruptions were avoided and the continuity of data security and data protection was ensured during 2022 as well. Alma Media’s second target related to the security of its online services covered the company's business operations in Finland. The target was that Alma Media was to organise at least four training events on data protection and two general training events on informa- tion security for its employees each year. The training was organised as planned in 2022. Other development projects during the year As the operating environment became signiﬁcantly more unstable in 2022, Alma Media updated its business continuity plan. The purpose of the continuity plan is to enable business to continue in prob- lematic circumstances by adopting an appropriate strategy and measures to FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 179ANNUAL REPORT 2022 SUSTAINABILITY REPORT Table 6: Data security and data protection Deﬁnition 2022 Progress made in 2022 Deﬁnition 2023 Data security and data protection are the cornerstones of Alma Media’s responsibility. We process data carefully, always observing privacy and meeting the expectations of our users. We develop our capability to anticipate and respond in time to ensure data security. The data security of the cloud environments used for the commer- cial services was improved by enhancing the existing data security capabilities and introducing new ones as well as by improving the data security monitoring of the Group’s internal network and workstations. Data security and data protection are cornerstones of Alma Media’s sus- tainability. We process data carefully, always observing privacy and meet- ing the expectations of our users. We develop our capability to anticipate and respond in time to ensure data security. Strategic intent Strategic intent We ensure the safe use of market-leading services and the protection of privacy. With our continuity plan, we aim to avoid serious data secu- rity breaches. We ensure the safe use of market-leading services and the protection of privacy. With our continuity plan, we aim to avoid serious data security breaches. Objective for 2022: Progress made in 2022: Objective for 2023: There are no serious personal data breaches in the services for which the authorities would impose a ﬁne on the company. There were no serious personal data breaches in the services for which the authorities would impose a ﬁne on the company. There are no serious personal data breaches in the services for which the authorities would impose a ﬁne on the company. We organise at least four data protection trainings and two data securi- ty trainings for our employees. We organised at least four data protection trainings and two data se- curity trainings for our employees. In addition, we organised two data protection trainings for software developers, supplemented with an online course. Continuous training of employees to develop data protection and data security in the changing operating environment. Improving registered use, customer experience and the reliability of services. The number of registered Alma IDs increased by nearly 500,000 to 1,900,000 in 2022. We developed the automation of the access to the reg- istered user's own data, and the work continues. We mapped out a solution for measuring customer experience and implementation starting in 2023. The amount of monthly active use of the Alma ID is on the rise. The cus- tomer satisfaction of Alma Media’s largest media and services has been measured (NPS) and the results are in. We will deﬁne the development actions based on the measurement during 2023.. Proactive development of data security and data protection to prepare for data security attacks. We improved the resilience of our systems and recovery from dis- ruptions. We updated the guidelines for responding to data security breaches. We invest in the further development of the management of data requests from registered users and the data security monitoring capabilities. We will further strengthen our employees' data protection and data security expertise through a digital training platform. There is no downtime in our services. When the Russian invasion of Ukraine began, there were some inci- dents of downtime in our media. However, serious long-term interrup- tions were avoided. There are no serious long-term interruptions in our services. protect people and property. The busi- ness continuity plan outlines the poten- tial impacts of disasters on the business and describes the policy related to these situations to ensure the company's rapid recovery after a potential crisis. Due to the changes in the potential threats in spring 2022, Alma Media carried out so-called hardening of the data security controls of critical systems to improve interfer- ence tolerance and recovery from dis- ruptions. The response to personal data breaches was enhanced with updated instructions, of which a separate version was also prepared for the company's subcontractors. Alma Media continued to actively partici- pate in the cybersecurity-related cooper- ative bodies of ISAC (Information Sharing and Analysis Centre) groups. The data security of the cloud environments used for Alma Media’s commercial services was improved in 2022 by enhancing existing data security capabilities and introducing new ones as well as by improving the data security monitoring of Alma’s internal network and workstations. Information security and data protection training for employees form a part of the proactive risk management operations involving the Group’s employees. Alma Media undertakes proactive risk management with regard to data security. This can be seen in the form of several data security inspections of the commercial services and the new data security con- trols implemented in the service develop- ment process with regard to vulnerability and software dependency management. Focus areas for the development of sustainability in 2023 With regard to the current focus areas — data security and data protection — resources in 2023 will be particularly allocated to the continued development of managing registered information requests and the Group’s monitoring capabilities pertaining to data securi- ty. The continuous data protection and data security expertise of the Group's employees will be further strengthened through a digital training platform. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 180ANNUAL REPORT 2022 SUSTAINABILITY REPORT The foundation for Alma Media’s devel- opment of an equal and diverse work community is provided by regular em- ployee surveys, among other things. The survey results, salary analyses and other employee data are used as the starting point when Alma Media’s Finnish busi- ness units update their non-discrimina- tion, diversity and equality plans in two- year intervals under the guidance of the HR function. The plans cover topics such as differences in pay, the justiﬁcation for ﬁxed-term employment relationships and the job-speciﬁc gender distribution in each unit. Diversity, equality and inclusion Alma Media recruits new employees purely based on their competence and aptitude. All Alma Media employees have the right to: • fair and incentive pay; • competence development; • feedback; • information about the company; • a safe, comfortable, renewing and evolving work environment; and • respect for privacy and private life. In accordance with the company’s Code of Conduct, everyone at Alma Media must respect basic human rights. Alma Media does not condone discrimination based on age, gender, race, skin colour, nationality or ethnic origin, religious beliefs, convictions, family relation- ships, sexual orientation or disabilities. Alma Media has a zero tolerance policy concerning sexual harassment and other forms of harassment, threats, offensive conduct, physical and psychological violence as well as workplace bullying. Every Alma Media employee has an obligation to report any observations of discrimination. Such incidents can be reported internally through employ- ee representatives, Group HR or the anonymous Whistleblow channel. Alma Media’s whistleblowing team receives the notiﬁcations, reports them to the Audit Committee of the Board of Director and takes action as necessary. Building an inspiring, inclusive, equal and diverse work community is a shared goal for all Alma Media employees. Development in this area is supported by the Group HR function. Achievement of sustainability targets in 2022 Alma Media has a zero tolerance policy regarding the discrimination and inap- propriate treatment of employees. The Group reports annually on whether any such incidents have occurred. A total of Table 7: Diversity, equality and inclusion Deﬁnition 2022 Progress made in 2022 Deﬁnition 2023 Alma Media’s employees feel that the Group promotes equality, diver- sity and sense of inclusion. All types of harassment, discrimination or bullying are prevented efﬁciently, and any shortcomings are corrected swiftly.. Alma Media’s Code of Conduct strictly prohibits all discrimination and harassment at the workplace. Each Alma employee must complete a Code of Conduct training. 100 per cent of the employees completed the training. Alma Media’s employees feel that the Group promotes equality, diver- sity and sense of inclusion. All types of harassment, discrimination or bullying are prevented efﬁciently, and any shortcomings are corrected swiftly. Strategic intent: Strategic intent: A positively developing experience of the realisation of equality, diver- sity and inclusion in the work community. A positively developing experience of the realisation of equality, diver- sity and inclusion in the work community.. Objectives for 2022: Objectives for 2023: Zero tolerance against harassment and discrimination: There are no incidents of improper treatment amongst Alma Media’s employees. A total of six (6) suspected incidents of misconduct were reported in 2022. The incidents were investigated and closed by the end of the year. Zero tolerance against harassment and discrimination: There are no incidents of improper treatment amongst Alma Media’s employees and any incidents reported are handled. Promoting diversity and inclusion in the work community. We will conduct a survey about the experiences of the realisation of diversity and inclusion in the work community. An action and training plan to enhance diversity and inclusion will be prepared based on the survey results. The realisation of diversity and inclusion in the work community was surveyed in late 2022. The survey was answered by 40 per cent of Al- ma’s employees in 11 countries. Unit-speciﬁc action and training plans based on the results are in the works. We will implement action and training plans based on the survey con- ducted in 2022 to strengthen equality, diversity and inclusion. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 181ANNUAL REPORT 2022 SUSTAINABILITY REPORT Alma Media’s Board of Directors had eight members in 2022. Two (25%) of them were women. The average age of the Members of the Board was 52 years. Alma Media’s Group Executive Team consisted of 10 members during the year under review, three (30%) of whom were women. The average age of the Group Executive Team was 55 years. Women ac- counted for 38 per cent of supervisors in the Group as a whole and 45 per cent of supervisors in Finland. A more detailed distribution of employees is provided in Table 8. Over 90 per cent of Alma Media’s em- ployees were permanently employed during the year under review. Most of Alma Media’s employees worked full time. A special feature of Alma Media’s Finnish operations was — as in previous years — the use of freelancers by the Group’s media brands. Each year, the Group’s media brands employ dozens of photographers and journalists by way of freelance contracts in addition to their in-house resources. The media brands order stories, videos and photos from the freelancers based on their needs. In the year under review, the largest age group in all of Alma Media’s country units was 30–50. In Finland, the proportions of em- ployees aged under 30 and over 50 were almost equal. In the other operating countries, the second-largest age group was employees under 30 years of age. More detailed region-speciﬁc infor- mation on employment contract types, the age distribution and the duration of employment is provided in Table 9. Other development projects during the year The objective of Alma Media’s HR strat- egy is to support the development of the Group’s business and the execution of strategy. During the past few years, the Group has particularly focused on enhancing the digital competencies of its employees and creating an employer image and employee experience of Alma Media as a responsible employer with a strong capacity for renewal. In order to develop an equal and diverse work community during the year under review, Alma Media surveyed employees' experiences of diversity, equality and Table 9: Employee age distribution and contract type under 30 years 30–50 years over 50 years Fixed- term Permanent full- time part- time All total Baltic countries 17% 76% 7% 0% 100% 93% 7% 100% Bosnia and Herzegovina 21% 77% 2% 32% 68% 100% 0% 100% Croatia 13% 84% 3% 0% 100% 89% 11% 100% Other operating countries 15% 85% 0% 8% 92% 100% 0% 100% Sweden 19% 75% 6% 6% 94% 88% 12% 100% Slovakia 19% 78% 3% 1% 99% 97% 3% 100% Finland 18% 62% 20% 7% 93% 88% 12% 100% Czech Republic 15% 82% 3% 9% 91% 85% 15% 100% Table 8: Alma Media’s employees Employees Women as managers, % Men as managers, % Finland 1,029 45 55 Czech Republic 432 25 75 Baltic countries: Estonia, Latvia, Lithuania 75 50 50 Slovakia 124 18 82 Croatia 95 50 50 Bosnia 47 50 50 Sweden 16 0 100 Other 13 25 75- Total 1,831 38 62 six (6) suspected incidents of bullying or sexual harassment were reported in 2022. All of the incidents reported to the company were thoroughly investigated. The necessary measures were taken and all six cases were closed by the end of the year. Alma Media was not subject to any reprimands or penalties by the authorities due to discrimination during the year under review. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 182ANNUAL REPORT 2022 SUSTAINABILITY REPORT inclusion in all Alma Media’s operating countries. A total of 596 people respond- ed to the survey, and the response rate was 40 per cent. Based on the survey responses, employees have equal oppor- tunities to develop their skills and Alma is seen as a ﬂexible employer in different life situations. Based on the results, Alma employees perceive the work commu- nity as equal. The results will be used in the development of these themes. We continued to coach our employees in workshops aimed at increasing employ- ee appreciation towards diversity and viewing diversity as a resource. By the end of 2022, 700 Alma employees had participated in these workshops. We also adhered to our multi-location work prin- ciples, which facilitate and increase ﬂexi- bility in combining individual life situa- tions and work, and improve well-being at work. As part of Alma Media’s Code of Conduct package, the Group’s principles and operating model to prevent harass- ment and bullying were implemented in all of Alma’s operating countries. During 2022, we offered our employees the op- portunity to increase their competence in diversity and inclusion through online coaching. Alma Media participated in Pride Week in June, and the colours of the rainbow were seen in Alma's ofﬁc- es, Teams wallpapers and social media channels. In addition, for Pride month, Alma offered two trainings open to everyone on the theme in Alma's digital training service, Seduo: ‘The basics of rainbow communications’ and ‘A great team is an inclusive team’. Focus areas for the development of sustainability in 2023 Alma Media is committed to building a pluralistic and pro-diversity organisa- tional culture by providing all employees with equal rights and opportunities and by treating everyone equally. In 2023, based on the results of a survey con- ducted in 2022, the company will plan measures to further develop equality, diversity and inclusion. The signiﬁ- cance of diversity will be emphasised in communications to supervisors and in supervisor and work community devel- opment training in 2023. An extensive DEI training package will be implement- ed for Alma HR in all operating countries to support the development of sustain- ability work. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 183ANNUAL REPORT 2022 SUSTAINABILITY REPORT Developing competence and well-being In a constantly changing operating environment, competence development plays a key role in ensuring future com- petitiveness. Alma Media’s HR strategy supports the Group’s business through the goal-driven development of employ- ee competence, amongst other things. Alma Media’s goal-driven competence development is based on competence targets, which are deﬁned at the team level at a minimum. The Group’s aim is to have a personal plan prepared for each employee to sup- port the development of their compe- tence. Goal-driven competence devel- opment is followed up on in one-on-one discussions between the supervisors and employees. Alma Media arranges training programmes that support the development of employee compe- tence and invests in the collaborative learning of employees and knowledge sharing by organising mentoring pro- grammes, competence workshops and theme events, amongst other things. The company takes a long-term approach to the development of managerial work and builds an international network of supervisors to support the sharing of Future-ﬁt workforce best practices related to leadership and management. The development of employee compe- tence and well-being at Alma Media is supported by the Group HR function. Its tasks include the steering, priori- tisation and speciﬁcation of functions and processes related to pay, beneﬁts, employee reporting and competence development. Together with occupational health, Alma Media regularly organises webinars to promote the well-being of its employ- ees. Information and tips for building a healthy everyday life are shared, for ex- ample, in terms of ergonomics, recovery, sleep, mental well-being and interac- tion. The well-being of the employees is supported by occupational health care and the Auntie service. Auntie is a low-threshold psychological well-be- ing service aimed at reducing stress, improving employees’ ability to cope, increasing efﬁciency and providing con- crete tools for managing one’s daily life. Achievement of sustainability targets in 2022 Alma Media measures its performance in engaging the commitment of employees and competence development by means of annual employee surveys, which provide a comprehensive picture of employee perceptions regarding the effectiveness of the work community and Alma Media as an employer. The most extensive of these surveys is the annual Quality of Work Life (QWL) survey conducted in all of Alma Media’s units. The target set for the survey is a QWL index of at least 83 per cent. This target was exceeded in the year under review, with the score being 83.1 per cent. The state of the work community is also mea- sured annually by ﬁnding out how willing the employees are to recommend Alma Media as an employer. The target is a score of at least 8 on a scale of 1–10. Alma Media achieved a score of 8.3 (eNPS 43). In addition to using surveys, Alma Media evaluates its performance as an employer by mon- itoring the long-term retention of new employees. The target is for 90 per cent of new employees to stay with the Group for at least two years after being hired. Of the employees who joined the com- pany two years ago as new employees in Finland, 86.5 per cent remained with the company during the year under review. The voluntary departure turnover of Alma Media’s employees in the Group’s operating countries was 10.2 per cent on average. Other development projects during the year Alma Talent continued the extensive managerial training programme called Kasvun valmentajat (‘Instructors of Growth’) started in 2021 to support supervisors’ capabilities in a digital and multi-location work environment. In 2022, a similar managerial programme was launched in the Alma Consumer segment. In 2022, the Alma Academy of Mentoring programmes, knowledge workshops and theme events aim at competence growth and learning together. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 184ANNUAL REPORT 2022 SUSTAINABILITY REPORT Table 10: Future-ﬁt workforce Deﬁnition 2022 Progress made in 2022 Deﬁnition 2023 Employee well-being, commitment and competence development as well as competence development within the organisation are of key importance to ensure the success of our business Alma Media’s number of employees increased by 9 per cent in 2022. We arranged training programmes that supported the development of employee competence and invested in the collaborative learning of employees and knowledge sharing by organising competence work- shops and theme events, amongst other things. Employee well-being, commitment and competence development as well as competence development within the organisation are of key importance to ensure the success of our business. Strategic intent: Strategic intent: To have the most competent, committed and well-being employees in the industry To have the most competent, committed and well-being employees in the industry. Objectives for 2022: Objectives for 2023: Equality in learning and personal development Open virtual training. Personal competence goals and development plans for everyone. Equality in learning and personal development Continuous professional development, sharing of competence and self-development Development programmes for managerial work, coaching that sup- ports continuous learning and knowledge sharing, competence work- shops and theme events Continuous professional development, sharing of competence and self-development High quality of working life, QWL >83. High quality of working life, QWL = 83.1 High quality of working life, QWL >83. Well-being training in cooperation with the occupational health care provider. The development and implementation of the operating model of multi-location work continued in 2022 The employees have been offered webinars on topics that promote well-being at work and the Auntie service is available to the employ- ees. The multi-location work model increases the ﬂexibility of work in different life situations. Well-being training to be arranged in cooperation with the occupation- al health care provider. Development of the multi-location work model to continue in 2023. Turnover of new employees to be lower than 10 per cent Turnover of employees who have been in the company for less than 2 years was 13.5 per cent. The average employee turnover in the Group was 10.2 per cent. Turnover of new employees under 10 per cent Likelihood of recommending the Group as an employer 8 (1–10). Likelihood of recommending 8.3 (1–10) Likelihood of recommending the Group as an employer 8 (1–10) Alma Media Solutions was also contin- ued on the topic of feedback culture. Alma employees in Finland utilised the Alma Talent Seduo online learning environment. The digital training service, which has been localised for the Finnish market by Alma Talent, gives employees the opportunity to complete training modules on various themes, such as the digital transformation, management, communication and data as well as sales and marketing. In 2022, we implemented a trainee pro- gramme for recent technology gradu- ates. With the help of the programme, we increased the know-how important to the company's business and employed 15 young people in the early stages of their careers. Focus areas for the development of sustainability in 2023 In 2023, Alma Media aims to further improve its employees’ opportunities for the continuous goal-driven develop- ment of their competence. The company will increase the use of online training materials. Competence development utilises, for example, expert commu- nities and builds customised thematic coaching utilising Alma's expertise. The development of managerial skills and leadership is supported by managerial training. Managers and all employees are trained with the aim of achieving success in a digital, diverse and multi-lo- cation work environment. The coaching will continue with the Growth Day, Agile Challenge, Product Academy and Alma Academy concepts. The culture of knowledge sharing is promoted by, for example, growing and training the Alma coach community. We will contin- ue to develop the operating model for multi-location work introduced at Alma Media in 2022. The Auntie service will continue to be available to employees to support well-being at work and lectures on well-being will also continue. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 185ANNUAL REPORT 2022 SUSTAINABILITY REPORT Sustainable brands FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 186ANNUAL REPORT 2022 SUSTAINABILITY REPORT Responsible media Managing responsible journalism The editorial teams of our media are committed to truthful, open and plural- istic journalism. Preserving trust in the media is a prerequisite for Alma Media’s business. Our media comply with the Guidelines for Journalists drafted by the Council for Mass Media, which is the Finnish media sector’s self-regulatory organisation. The guidelines concern- ing journalism are in many ways stricter than the legislation governing freedom of speech, freedom of expression and the media in general. The topics cov- ered in the Guidelines for Journalists include the principles of obtaining information, the journalist’s professional position and the rights of interviewees. The Guidelines also stipulate how media outlets need to rectify their errors and separate journalism from advertising. In addition to publishing guidelines con- cerning ethics in journalism, the Council for Mass Media handles dozens of complaints each year regarding content published by Finnish media outlets. Alma Media’s editorial teams interpret the Council’s decisions as precedents that guide operations. In responsible journal- ism, Alma Media journalists and editorial ofﬁces act transparently and responsibly under all circumstances in their role as a source of information. High-quality jour- nalism engages the readers’ long-term commitment to Alma Media’s media and, consequently, the readers characterise them as high in quality and reliable in reader surveys. The responsibility for the journalistic content of Alma Media’s me- dia lies with the Editor-in-Chief of each media, assisted by editorial supervisors. Editors-in-Chief and other supervisors of the editorial teams are responsible for creating a strong journalistic cul- ture by providing active guidance and feedback as well as by developing the editorial teams’ internal guidelines and style books. The aim is to ensure that all employees of Alma Media’s editorial ofﬁces understand their professional responsibility. In developing responsi- ble journalism, the supervisors of the editorial teams also monitor the results of reader surveys and brand surveys as well as customer feedback and the public discussion regarding the media to ensure the purposefulness, service abil- ity and pluralism of content. Monitoring the readership indicates the importance of the subjects to our readers and of their signiﬁcance for society. Readers who are dissatisﬁed with content can, for FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 187ANNUAL REPORT 2022 SUSTAINABILITY REPORT example, send feedback to the editorial team or submit a request for correction. Management of responsible marketing The truthfulness of marketing and pre- venting the misleading of consumers is a basic condition for campaigns published in the Group’s media and services. The digitalisation of advertising has seen the focus of the development of responsible advertising shift increasingly to ensuring the security of the advertising environ- ment as well as the responsible col- lection and use of consumer data. The automation and internationalisation of advertising and the increasingly com- plex digital advertising ecosystem re- quire Alma Media to make signiﬁcant in- vestments in maintaining a high-quality and safe media environment. The Group systematically strengthens its technical capabilities and employee competen- cies to ensure that no advertising fraud or advertisements that are contrary to good marketing practices are pub- lished in its online and mobile services, and that user data is not collected or used inappropriately in connection with advertising. Alma Media complies with the legislation governing marketing as well as the marketing communications industry’s self-regulation in monitoring the advertising activities of its customers and when engaging in marketing com- munications for its media brands and services. The Group is actively involved in the development of digital marketing competence throughout the marketing communications industry in Finland. The possibilities of consumers to impact the collection and utilisation of data cre- ate a framework for the utilisation of data by the media. It is possible to display or measure programmatically bought advertising targeted on a data-driven basis, personalise content and create advertising proﬁles only for users who have consented to it. Regardless of the commercial practice, it is possible to display or measure bought advertising targeted on a data-driven basis, per- sonalise content and create advertising proﬁles only for users who have consent- ed to it. User consent to the targeting of advertising is forwarded to Alma Media’s approved partners in the advertising buying supply chain. Through the TCF (Transparency & Consent Framework), Alma Media approves its partners and the purposes of data use as part of Alma Media’s data protection practices and maintains a list of approved partners on its website. Alma Media’s media sales and marketing organisation is in charge of the develop- ment of responsible marketing together with each brand’s marketing organisa- tion. In software procurement related to digital marketing, assistance is provided by Alma Media’s Chief Digital Ofﬁcer and the rest of the ICT organisation. The Group’s specialist on data protection ensures the compliance of the manage- ment and utilisation of user data and the user consent management tool. Achievement of sustainability targets in 2022 The main sustainability target of the company's media is the truthfulness of the content, the reliability of the sourc- es, the accuracy of the content and the promotion of good commercial practice. One of the indicators is the number of condemnatory decisions of the Council for Mass Media addressed to the media, which shall not exceed the threshold of 5 decisions. During the year under review, Alma Media’s Iltalehti received two con- demnatory decisions from the Council for Mass Media. In another decision, the Council for Mass Media stated that Iltalehti should have labelled the news about its IL Plus service more clearly as an advertisement. According to another condemnatory decision, Iltalehti correct- ed an error in one of the news reports too slowly. In 2022, the Council for Mass Media handled a total of 41 complaints and issued a condemnatory decision in eight of those cases. The company promotes good com- mercial practice and complies with the marketing rules of the International Chamber of Commerce and the guidelines of the Council of Ethics in Advertising. The key principle guid- ing responsible operations is that the company's online or mobile services do not contain advertisements that would violate the marketing regulations of the International Chamber of Commerce. In the year under review, one programmati- cally purchased gambling advertisement by an international operator managed to penetrate the technical protection of our site and was brieﬂy published on our site. The advertisement was quickly removed. Foreign gambling advertising is not allowed in Finland. Alma Media did not receive any complaints in its oper- ating countries from the authorities that supervise ethics in advertising or the marketing industry’s own self-regulatory bodies. The truthfulness of marketing and preventing the misleading of consumers is a basic condition for campaigns published in the Group’s media and services. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 188ANNUAL REPORT 2022 SUSTAINABILITY REPORT Other development projects during the year The company's media have annual development targets to promote the sustainable development of society. Out of the ﬁnancial and professional media, Kauppalehti and Tekniikka&Talous set their own speciﬁc keywords for each edi- torial article offering solutions to climate change. The keyword makes it easier for the reader to ﬁnd content that offers solutions for mitigating climate change and improves the veriﬁcation of the effectiveness of the media in raising the awareness of citizens and companies. A total of 180 articles offering solutions to mitigate climate change were published in Kauppalehti and 203 such articles were published in Tekniikka&Talous. These articles were read a total of 1.5 mil- lion times. In 2022, the editorial ofﬁces of Iltalehti and Kauppalehti were trained on the background of the condemnatory decisions made by the Council for Mass Media and, at the editorial staff’s own request, training on the terminology of diversity was also organised in Iltalehti in cooperation with SETA. In addition, Iltalehti's journalists received training on legislation concerning journalism. During the year under review, the Alma Media Solutions organisation developed the Muutoksentekijät (‘Change Makers’) solution for content marketing to em- phasise the signiﬁcance of corporate social responsibility work. The solution includes the production and publica- tion of an article and a video interview in Kauppalehti and enables companies to emphasise their responsibility priorities. The Group’s media did not receive any funding from government, non-gover- mental or political entities. There were no legal proceedings associated with libel or slander and, therefore, also no ﬁnancial liabilities related to them. In order to ensure the IP protection of its media and services, the Alma Media Group efﬁciently protects is trademarks through the appropriate registrations, monitors the market for any violations of its trademarks and defends its trade- marks in case of violations. Alma Media also actively ensures the protection and defending of copyright and database rights. The journalistic principles of media in- clude the principle of protecting vulner- able groups of the public. Information that might be shocking to children or young people, for example, is only pub- lished when strong journalistic grounds exist, and the appropriate labels are used to warn of such content in advance. Alma Media automatically excludes advertis- ing classiﬁed as shocking and harmful from articles and videos. Advertisers may also separately request the removal of their advertising from certain media environments in order to ensure brand compatibility. Furthermore, it is prohib- ited to target content and advertising to young people under the age of 18 in Alma Media’s media. Focus areas for the development of media responsibility in 2023 In our ﬁnancial media, we invest in the development of the diversity of our audi- ences, especially with regard to gender and age. In practice, we take the interests of different reader groups more widely into account in content planning and use data to monitor the development of the diversity of audiences following the content. Kauppalehti has, in cooperation with the British consulting company FT Strategies, launched a project to develop the diversi- ty of the subscriber base and media audi- ences moving forward. In connection with the project, we will implement, for exam- ple, a newsletter on the content related to climate change, which will contribute to increasing awareness of the promotion of sustainable development while increas- ing the diversity of our audiences. As a media company that operates at the national scale, Alma Media is actively in- volved in the development of the Finnish marketing communications industry’s expertise and responsibility agenda. Alma Media also takes the special challenges associated with digital marketing into consideration in the development of its own technical and other capabilities. Alma Media ensures compliance with the obligations placed on digital adver- tising by the General Data Protection Regulation (GDPR) and IAB Europe by allocating sufﬁcient resources to the related activities, by ensuring it has the appropriate information management and data processing processes in place and by training its employees. In 2023, we will continue to develop re- sponsible media and marketing, ensuring a high-quality and brand-secure media environment and targeting data for ad- vertisers. We strive to minimise the carbon foot- print of digital media and advertising and to provide guidance to our customers and partners on more environmentally friendly advertising. As a member of the IAB, we participate in the development of sustainability standards in the industry. The GDPR and the browser-based measures taken by platform operators to restrict targeting based on cookies require media companies to more care- fully assess alternatives based on user identiﬁcation and contextual targeting, among other things. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 189ANNUAL REPORT 2022 SUSTAINABILITY REPORT Table 11: Responsible media. Deﬁnition 2022 Progress made in 2022 Deﬁnition 2023 Readers’ trust is a precondition for journalistic media. We are committed to truthful, open and pluralistic journalism and responsible marketing. Kauppalehti and Tekniikka&Talous introduced a special keyword to dis- tinguish and monitor content that offers solutions to climate change. Alma Media trained its journalists and Kauppalehti started cooperation to develop the diversity of its media audiences. Readers’ trust is a precondition for journalistic media. We are committed to truthful, open and pluralistic journalism and responsible marketing. Strategic intent Strategic intent A defender of the freedom of speech, democracy and pluralist commu- nications A defender of the freedom of speech, democracy and pluralist commu- nications Objectives for 2022: Objectives for 2023: No more than ﬁve (5) of all the condemnatory decisions issued by the Council for Mass Media apply to Alma Media’s media. Iltalehti was subject to two condemnatory decisions: one about la- beling news on ILPlus service and one of too slow reaction to error in content. No more than ﬁve (5) condemnatory decisions are issued to Alma Media’s media by the Council for Mass Media annually. Implementation of keywords based on sustainable development and a responsible journalism training for reporters. Based on the use of keywords, a total of 180 articles offering solutions to mitigate climate change were published in Kauppalehti and 203 such articles were published in Tekniikka&Talous. These articles were read a total of 1.5 million times. The editorial staff participated in training on the background of the condemnatory decisions of the Council for Mass Media, and a diversity terminology training was arranged for Iltalehti employees in cooperation with SETA. Iltalehti also organised training on legislation related to journalism. In the ﬁnancial media, a project will be carried out to develop the diversity of audiences. The development of keywords on sustainable development will also continue. The content on climate change will be developed into a separate newsletter available as a subscription. Edito- rial staff are trained in responsible journalism. Alma Media’s media and services do not publish any advertisements that violate the guidelines of good marketing practices published by the International Chamber of Commerce. One gambling campaign by an international operator was able to pass the protection measures of Alma Media’s digital advertising network but it was quickly noticed and removed. Alma Media did not receive any complaints in its operating countries from the authorities that super- vise ethics in advertising or the marketing industry’s own self-regula- tory bodies. Alma Media’s media and services do not publish any advertisements that violate the guidelines of good marketing practices published by the International Chamber of Commerce. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 190ANNUAL REPORT 2022 SUSTAINABILITY REPORT Sustainable services and brands Our sustainability work is a reﬂection of its time and an even more integrated part of our operations. Our digital services en- able us to inﬂuence climate change and promote responsible choices in housing and transportation as well as in deci- sions related to working life. Our training services allow us to develop professional competences in companies and promote sustainable business operations. Our corporate information business helps our customers grow sustainably and succeed responsibly by providing reliable infor- mation about the market and companies. Customer satisfaction We have earned our customers’ trust thanks to our interesting and accurate content, good service, excellent user experience and our responsible record in processing customer data. Our busi- ness operations have transitioned more and more towards paying for the media and service content, which emphasises the signiﬁcance of customer satisfaction even further. High customer satisfaction speeds up business growth, reduces the costs of customer acquisition, improves trust in the customer relationship and decreases the risk of customer loss. A satisﬁed customer is committed to using our service or product, the usage volume increases and the likelihood of recommending the service increases. In the digital service experience, customer satisfaction is strongly based on the cor- relation between customer expectations and experiences regarding the contents of our services, the technical user expe- rience of our websites, such as ﬁndability and availability, ease of navigation and ease of the purchase process as well as the operation of customer support. Trust in the functionality of the service and the data security of use are signif- icant psychological factors affecting customer satisfaction. The common credentials for our media and services, the Alma ID, enable a smooth and safe navigation from one service to another in Alma's digital network. The Alma ID is now used in almost all Alma media and digital services in Finland. By the end of 2022, the number of registered users of the Alma ID was 1.9 million. The develop- ment of the self-service account and the transparency of the data collected from consumers was continued and harmon- ised with common tools. During the year, the Alma ID was also introduced to B2B FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 191ANNUAL REPORT 2022 SUSTAINABILITY REPORT customers and its use will expand signiﬁ- cantly in 2023. Developing an increasingly better and more personalised user and customer experience for a logged-in user is continuous work. The Alma ID enables the user-oriented development of our services and the growth of customer insight. Customer satisfaction metrics Alma Media’s services and media are developed continuously. Customer satisfaction is measured by means of customer surveys and the Net Promotor Score metric, in which the users are asked about the likelihood of recom- mending the service to other users on a scale of 0–10. The results are divided into recommenders (score 9–10), pas- sive users (score 7–8) who are satisﬁed but not committed to the service to such a degree that they would recom- mend it and critics (0–6) who have been dissatisﬁed with the service received. The number of critics is deducted from the number of recommenders, and the result is divided by the total number of respondents. This gives a score of -100 to 100. -100 means that all the custom- ers are dissatisﬁed and 100 that all the customers are recommenders. In 2022, the annual NPS average in Alma Media’s services varied from 18.1 (Vuokraovi.com) to 44.1 (Etuovi.com). Autotalli.com, for ex- ample, had an NPS score between these values (average 25.0). So far, only some of the services have measured customer satisfaction using NPS, but a decision was made during the year to harmonise the metrics and the implementation of the model will start in 2023. Ethical service design In 2022, Aalto University's Capstone students carried out a project to provide a framework for Alma’s ethical and green service design, the guiding factors of which were accessibility, data protec- tion, cyber security and reducing energy consumption. In Alma Media, ethical service design refers to the planning and development of ethically sustainable business with the purpose of, among other things, ensuring the good availability of our digital services to all population groups. In Alma Media, ethical service design also means utilising machine learning, data and analytics ethi- cally. We do not create target groups con- sisting of children or young people aged under 18 and, therefore, do not target any content or advertising to such a group. The algorithms used for targeting content do not restrict the accessibility of con- tent to any user group. Alma Media has also started a survey on the compliance of our services with the EU accessibility directive, even though the directive is not directly binding to our services. In 2022, Alma Talent's services invested in build- ing a design system where improving accessibility is one of the key objectives. This system has already been implement- ed by Talouselämä and will be implement- ed by all Alma Talent websites. The evaluation of corporate responsibil- ity is an important part of the selection of partners in every aspect of business operations. Reliable and comparable corporate sustainability information is still scarce, especially for small and medium-sized enterprises. The regu- lations will facilitate the collection of corporate sustainability information as reporting obligations will be expanded and the legislation related to companies' duty of care will be speciﬁed. In 2022, a study was carried out on SMEs' corporate sustainability information and a hack- athon was organised to brainstorm future corporate sustainability data services. Efforts to ﬁnd a sufﬁciently high-quality solution will continue, and the goal for the next few years is to help customers ﬁnd and select their customers and part- ners more responsibly. During the year, Alma Media’s employees have been offered internal training on accessibility and an accessibility testing guide has been compiled to provide tips and guidelines for starting accessibility testing. In addition, an internal handbook on ethical service design and a testing guide following accessibility criteria were prepared to support measures such as auditing. The mapping of the produc- tion of internal documents will continue in 2023. Green service design Another service design factor identiﬁed in the materiality analysis is the green development path. In 2022, Alma Media’s housing services reached an average of 965,000 different visitors per week and motoring services an average of 797,000 The purpose of ethical service design is to ensure the accessibility of our digital services to all audiences. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 192ANNUAL REPORT 2022 SUSTAINABILITY REPORT different visitors per week. Our services enable users to make responsible choic- es by offering environmentally oriented search criteria for listing items. In our Etuovi.com service, the user can restrict the available choices based on factors such as the source of heat used in the apartment. In a similar manner, users of our automobile services Nettiauto.com and Autotalli.com can choose a vehi- cle based on the type of energy used, consumption and emission category. These factors also have a direct impact on the amount of vehicle tax and the costs of operation. In 2022, the number of electric or gas cars offered in both services has increased by 100 per cent in Nettiauto, reaching more than 5,000 options at the end of the year and more than 4,000 options in Autotalli.com. The search in the Nettiauto service was de- veloped to take into account the search for electric cars. The new search criteria include, among other things, battery ca- pacity, charging power and type as well as electric range. Sales trends in electric cars and hybrids have been excellent. The criteria used in these services will be developed further, and the possibil- ities to make sustainable choices in the acquisition of a home or a vehicle will be highlighted in communications. Sustainable cities and communities The sustainability area Sustainable cities and communities identiﬁed in Alma Media’s materiality analysis is an oppor- tunity for the company to inﬂuence sus- tainable development as our services in- clude electronic services, digital services that support everyday living and loca- tion services that reduce unnecessary driving and transport. Different kinds of residential community services may also increase a feeling of togetherness among the residents of a speciﬁc area and improve social connections and the pleasantness of the community. Through the services of the comparative and sharing economy, goods and services in regional communities ﬁnd new owners efﬁciently, reduce the carbon footprint of housing and cut back on unnecessary consumption and storage. In 2022, to support consumers' sustain- able choices in housing, the compa- ny's housing services Etuovi.com and Vuokraovi.com developed a service con- cept that will enable consumers to make sustainable choices in housing quickly and easily. This also gives housing pro- fessionals the opportunity to market their own services in relation to sustainable choices. The conceptualisation work will continue with regard to sustainable data on housing, consumption habits and the FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 193ANNUAL REPORT 2022 SUSTAINABILITY REPORT provision of sustainable housing services in close cooperation with customers, operators in the ﬁeld and Aalto University, as well as in student projects. During the year, two development projects were carried out with the stu- dents of Aalto University's Information Technology Programme; the ﬁrst related to the EU-published taxonomy for sus- tainable ﬁnance and the second to map and location-based services. The results of the project will be utilised in product development with the aim of creating smart future services for assessing the sustainability of buildings and visualising site-speciﬁc and regional data on a map. Cooperation and partnerships for sustainable development in 2022 Thanks to its extensive cooperation with companies, Alma Media is highly networked in its business areas. Alma Media also has signiﬁcant social part- nerships in Finland and abroad. In Finland, the Group is an active member in the industry organisation Finnmedia, Finland Chamber of Commerce and IAB Finland. Collaboration with the Finnish Children and Youth Foundation started in 2016 already with the aim of ensuring a better future for young people. The cooperation has included media literacy projects, cooperation with young climate inﬂuencers and the development of young people's mental well-being and working life skills, also taking into ac- count young people in need of special support. In 2022, the most signiﬁcant form of cooperation in Finland was the project of national introduction to work- ing life (TET) launched together with the Finnish Children and Youth Foundation. The parties agreed on cooperation for the years 2022–2024 and on the focus of cooperation in enabling young people to familiarise themselves with working life on a more equal basis than before, on in- creasing working life experience and on building connections between business- es and young people. In May 2022, Alma Media, together with the Finnish Children and Youth Foundation, launched the concept of in- troduction to working life (TET), with the aim of making the TET experiences more meaningful for both young people and businesses. TET weeks in accordance with the new concept were carried out in the project’s cooperation companies in the spring and autumn. In 2023, a service will be launched to signiﬁcantly increase the number of publicly available TET positions through business cooperation. The development work has involved a number of young people and education- al institutions from all over Finland, as well as Alma Media and other signiﬁcant companies such as Deloitte, Outokumpu, Wärtsilä, Stora Enso and the Deaconess Foundation. The ‘introduction to working life’ week, or TET, is an activity includ- ed in the ofﬁcial school curriculum in Finland. In October 2022, Alma Media’s job search service, previously known as Monster, was redesigned as Jobly. The service introduces impact data from the Finnish technology company Upright to support job search, making it the world's ﬁrst job search service that offers applicants independent information on the impact of companies. Impact data is presented from companies for which it is currently available. The emphasis is initially on the largest companies, but the goal is to increase the number signiﬁcantly in the coming years. During the year, cooperation with the Women in Tech Finland (WIT) organ- isation was launched. The common goal is to increase diversity, equality and inclusion in the ﬁeld of technology and to encourage and inspire women to seek employment in technology. As part of the cooperation, women working in technology at Alma and their career stories will be highlighted. In 2022, WIT and Alma organised a joint event called Responsible business in digital environment. Alma Media supports the growth and development of the automotive industry by cooperating with The Confederation of the Automotive Industry (AKL). The Confederation of the Automotive Industry is an association that promotes the economic and labour market inter- ests of the sector and provides various services. Its mission is to promote the operating conditions of its member com- panies. The partnership started in 2019 and has included content and devel- opment cooperation, other customised training, and discussions between Alma employees and automotive experts. Alma Career collected nearly 12,000 permanent jobs suitable for Ukrainians in the Workania.eu service. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 194ANNUAL REPORT 2022 SUSTAINABILITY REPORT International social projects — we sup- port the job search of Ukrainians Alma Media operates in 11 countries, and the company's operations in Eastern Central Europe have focused on recruit- ment and employment services, such as training of professionals. In Alma Media’s operating countries, recruitment services are involved in several projects aimed at improving working life skills in Eastern Central Europe. Internationally, Alma Media’s most signiﬁcant social project in 2022 was to harness its job portals in 11 countries to support the job search of Ukrainian refugees almost immediately after the war began. In practice, the Alma Career countries offered Ukrainian refugees suitable jobs on the basis of their lan- guage skills on the recruitment websites of their own countries. Later, the site created by Alma Career in cooperation with country organisations in the Czech Republic and Slovakia brought these jobs together under the Workania.eu service. Nearly 12,000 permanent jobs suitable for Ukrainian refugees in the Czech Republic were published through Workania.eu during 2022. In addition, local ofﬁces in the company’s operating countries organised collec- tions for goods and clothing to be sent to Ukraine and arranged transportation of aid to the border as soon as the Russian invasion started. Moreover, the employ- ees collected and donated funds to aid Ukrainians in addition to Alma Media’s ofﬁcial monetary donations. The Czech LMC participated in many na- tional and NGO projects to help refugees and people affected by the war in Ukraine – in particular in cooperation with People in Need, one of the largest NGOs, and the Czech Ministry of Labour and Social Affairs. In addition, Profesia launched a call cen- tre for Ukrainian-speaking jobseekers in Slovakia and CV-Online in Latvia opened a Telegram account for Ukrainian job- seekers, quickly attracting more than 1,000 subscribers and 5,000 impressions of publications. CV-Online Latvia also conducted a survey of its client com- panies regarding the recruitment of Ukrainian workforce. 146 local companies responded to the survey, more than half of which said they had hired a Ukrainian jobseeker on a permanent or tempo- rary basis since February. CV-Online in Estonia conducted a survey of 4,378 em- ployers and jobseekers to gain a better understanding of how to help Ukrainian refugees ﬁnd work in Estonia. Increasing inclusion in the labour market In Slovakia, Profesia continued its long-term work to increase the sense of inclusion in the labour market by devel- oping tools and services for companies. In 2022, the Help with Heart programme supported companies in recruitment and training for the employment of disabled people and provided vocational and career counselling to more than 100 disabled jobseekers. Profesia announced the launch of the Profesia Lab that brings the latest know-how to the em- ployment of neurodivergent people. Modern HR tools for schools and NGOs In Slovakia, Profesia launched an acad- emy for school principals four years ago with the aim of improving the manage- ment of primary and secondary school staff to promote the work motivation, well-being and commitment of teach- ing staff. The project has inspired other NGOs to involve school principals in their projects. By the end of 2022, 86 school principals completed all three modules of the training, which consist of developing leadership, teamwork and vision in an educational environment. In order to promote the openness of Slovakian society and the equality of job search, Profesia continued to provide recruitment services free of charge to NGOs and schools in 2022 to increase the openness and transparency of re- cruitment to public posts. 291 job adver- tisements for non-proﬁt organisations with a monetary value of EUR 30,689 were published on Profesia.sk. The use of edujobs.sk, a job listing service for school and educational staff, reached a record level in its history. In order to improve the transparency of the recruit- ment processes in the Slovakian school system, Profesia's support for recruit- ment was signiﬁcant; a total of 7,190 jobs in 1,560 schools were publicly advertised in the service. The monetary value of the job advertisements was EUR 568,010. LMC, a subsidiary of Alma Media in the Czech Republic, continued the pro- gramme to provide recruitment services to NGOs and non-proﬁt organisations for a nominal fee of one euro. More than 730 NGOs and other non-proﬁt organisations participated in the programme. The cal- culated value of the services in the year under review was approximately EUR 8.1 million and more than 9,000 permanent jobs were announced through the pro- gramme. LMC has also provided NGOs and non-proﬁt organisations access to its other services – such as Seduo.cz online training service and Arnold survey tool – for a nominal fee. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 195ANNUAL REPORT 2022 SUSTAINABILITY REPORT In Bosnia and Herzegovina, Kolektiv im- plemented a project for the employment of young people funded by the Swiss government. In 2022, ﬁve academies were implemented in the partner com- panies, offering training positions to 308 young people. In addition, Kolektiv, in cooperation with the World Bank, carried out a project providing employment and counselling services for the long-term unemployed and women not included in workforce free of charge. In the year under review, counselling services were provided to 600 unemployed women. Training in social and cooperative skills was provided to 464 project participants and technical training to 10. The proj- ect helped 231 unemployed people ﬁnd employment. In addition, Kolektiv, in co- operation with the Sarajevo Open Centre and the United Nation Population Fund (UNFPA), conducted The Most Attractive Employer survey with responses from 15,000 people from a total of 500 companies. The winners for 2022 were announced at the the award ceremony in February 2023. In Croatia, MojPosao highlighted the importance of diversity in society during Pride Month by changing its logo to a rainbow on social media and in the job portal. In addition to the annual employ- ee satisfaction surveys improving the quality of working life and the Best HR Practice Award, MojPosao also supports the Key Different project that encour- ages employers to hire disabled job seekers. In the Baltics, the Lithuanian CV-Online participated in the international DUOday event and theme day where compa- nies and organisations open their doors and introduce their companies to the disabled. CV-Online has also supported SOPA which assists the integration of people with disabilities into the open labour market. CV-Online organised free seminars for approximately 24,000 up- per secondary school, vocational school and higher education students on the labour market, job search and CV writing and launched a YouTube project aimed at young people, reaching 158,500 young job seekers. CV-Online Estonia conducted surveys on the state of work environments and well-being in Estonia, such as “Working during holidays” and “Bullying at work- places”, receiving almost 5,000 respons- es. The aim of the surveys was to raise awareness of mental health and dis- tribute information in order to improve working environments in Estonia. Based on the results, CV-Online Estonia created more than 20 educational blog articles. The blog has attracted more than 64,055 readers and three times the attention on social media. Developing sustainability and responsibility through cooperation in 2023 In 2023, Alma Media aims to further enhance social and business cooper- ation in order to promote sustainable development. Resources are focused on key themes deﬁned on the basis of the company's strategy and materiality analysis as well as the company's busi- ness operations in accordance with key opportunities for inﬂuence. More and more areas of materiality are strongly re- lated to the company's service business and brands and create the basis for the creation of new business opportunities based on sustainable development. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 196ANNUAL REPORT 2022 SUSTAINABILITY REPORT Table 12: Information in accordance with TCFD Strategy The impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and ﬁnancial planning Financial risks are assessed as a part of the annual Group-level risk assessment process. The thresh- olds apply to all the risks in the Group’s business segment and operations. The ﬁnancial or strategic impacts of the risks are classiﬁed as: • substantial if the probabilities of the realisation of the risk within 6 months is high and if the net loss is over 10 million euros (high risk) • signiﬁcant if the net loss is 5–10 million euros (medium risk) • minor if the net loss is 1–5 million euros (small risk). Strategy The impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and ﬁnancial planning In the short term, warmer winters will complicate the harvesting of wood by the paper suppliers that operate as Alma’s subcontractors, which may lead to higher paper prices. Increasingly strict national and EU-level climate regulations may also have cost impacts in Alma Media’s subcontracting chain. Changes involving paper and delivery costs have an effect on the costs of print publications, for ex- ample. In the longer term, increasing extreme weather phenomena caused by climate change are pre- dicted to increase the risk of technical disruptions to digital services in Alma Media’s various operating countries. The Group manages its environmental risks by systematically developing its operations in accordance with the Group’s science-based climate targets (SBTi) and by engaging in active environ- mental dialogue with its key suppliers. Risk management Links of the climate risk identiﬁcation, assessment and management to other risk management within the organisation Financial risks are assessed as a part of the annual Group-level risk assessment process. With regard to climate risks, the Group has identiﬁed the risks of, for example, extreme weather conditions, increased regulation, emission trade pricing and the pricing mechanism as well as changes in customer behaviour related to climate change. The Group has also identiﬁed the impacts of these risks on the operational costs, including the price of insurance. Risk management The processes used by to identify and assess climate-related risks Climate-related risks are identiﬁed and assessed as a part of the annual Group-level risk assessment process. This covers the Group’s marketing and operating environment, operational and business as- pects as well as the current and future framework of regulation and reputational risks. Metrics and targets Scope 1, Scope 2 and Scope 3 emissions and the risks related to them Content in Alma Media’s Report by the Board of Directors: Statement of non-ﬁnancial information/Envi- ronmental responsibility p. 24–25, 41–42 and Sustainability Report p. 158, 160–161, 168, 171–173, 176–177 Metrics and targets The targets and results used to manage relevant climate-related risks and opportunities Content in Alma Media’s Report by the Board of Directors: Statement of non-ﬁnancial information/Envi- ronmental responsibility p. 26, 40–42, and Sustainability Report p. 172, 173, 177 Alma Media continuously develops its ﬁnancial reporting related to the climate. One of the new aspects of this report is the description of ﬁnancial risks and Calculation and data collection principles for corporate sustainability Alma Media uses the GRI Standards of the Global Reporting Initiative and opportunities related to the climate according to the TCFD recommenda- tions (Task Force on Climate-related Financial Disclosures). In accordance with the TCFD recommendations, they are described in four subject areas: gov- ernance, strategy, risk management and metrics and targets. the instructions of the Sustainable Accounting Standard Board, where ap- plicable, in its sustainability reporting. As a general rule, the reporting covers all of Alma Media Group. Responsible media is still also reported under the GRI-G4 guidelines. The aspect boundaries and GRI and SASB aspects used in Alma Media’s sustainability reporting are pre- sented in the tables on following pages. The 2022 report has not been subject to an independent assurance. FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 197ANNUAL REPORT 2022 SUSTAINABILITY REPORT Milestones in Alma Media’s Sustainability Path 2010 Alma Media starts reporting for the Carbon Disclosure Project (CDP) 2012 Alma Media works out the environmental impact of printed magazine and online media together with VTT and Kungliga Tekniska Högskola 2013 The share of digital business rate exceeds 50% of the revenues 2015 Alma Media commits to the Paris Agreement to achieve the objectives of COP21 2018 Alma Media is the third media company in the world to set the validated SBT 2ºC targets based on 2016 baseline 2019 The company moves to the procurement of zero-emission renewable energy (hydropower) for Finnish activities 2020 The Alma House (HQ) switches to renewable energy sources for district heating and district cooling 2021 SBTi 1.5ºC targets approved, based on the latest normal year before the pandemic 2019 baseline FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 198ANNUAL REPORT 2022 SUSTAINABILITY REPORT GRI Indicator Location More information Organisation 102-1 Name of the organisation Alma Media 102-2 Activities, brands, products and services Report by the Board of Directors p. 6, 17–19 102-3 Location of headquarters www.almamedia.ﬁ/en/contacts/ 102-4 Location of operations Finland, Czech Republic, Slovakia, Estonia, Latvia, Lithuania, Croatia, Bosnia and Herzegovina, Sweden, Poland, Slovenia 102-5 Ownership and legal form Report by the Board of Directors p. 45 102-6 Markets served Report by the Board of Directors p. 6 102-7 Scale of the organisation Report by the Board of Directors p. 49 102-8 Information on employees and other workers Sustainability Report p. 182 102-9 Supply chain Sustainability Report p. 176 102-10 Signiﬁcant changes to the organisation and its supply chain Financial Statement p. 52, Report by the Board of Directors, p. 15–18 102-11 Precautionary Principle or approach Report by the Board of Directors, p. 36–40 102-12 Principles or initiatives of external operators, approved or promoted by the organisation Sustainability Report p. 166 102-13 Memberships of associations and advocacy organisations Sustainability Report p. 166–167 Strategy 102-14 CEO’s review Report by the Board of Directors, p. 3–4 102-15 Key impacts, risks, and opportunities Report by the Board of Directors p. 10, 15–19 Ethics and integrity 102-16 Values, principles, standards, and norms of behaviour Sustainability Report p. 169 102-17 Mechanisms for advice and concerns about ethics Sustainability Report p. 169 Governance 102-18 Governance structure Corporate Governance Statement p. 113–115 102-19 Delegating authority Corporate Governance Statement p. 113–119 102-20 Executive-level responsibility Corporate Governance Statement p. 115–118 102-21 Consulting stakeholders Sustainability Report p. 162–163, 167 102-22 Composition of the Board of Directors Corporate Governance Statement p. 115–118 102-23 Chair of the Board of Directors Corporate Governance Statement p. 115 102-24 Nominating and selecting the Board of Directors Corporate Governance Statement p. 115 102-25 Process in place for the Board to ensure conﬂicts of interest are avoided Corporate Governance Statement p. 128, 130 GRI index FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 199ANNUAL REPORT 2022 SUSTAINABILITY REPORT GRI Indicator Location More information 102-26 Role of the Board of Directors in setting purpose, values and strategy Corporate Governance Statement p. 113–115 102-27 Collective knowledge of the Board of Directors Corporate Governance Statement p. 113–115 102-28 Evaluating the Board of Directors’ performance Corporate Governance Statement p. 119–122 102-29 The Board of Directors’ role in identifying and managing impacts and risks Corporate Governance Statement p. 119–122 102-30 Effectiveness of risk management processes Corporate Governance Statement p. 119–121 102-31 Frequency of the Board of Directors’ reviews of risks Report by the Board of Directors p. 36–37 102-32 The Board of Directors’ role in sustainability reporting Report by the Board of Directors p. 22, Sustainability Report p. 166–167 102-33 Communicating critical concerns Report by the Board of Directors p. 22 102-34 Nature and total number of critical concerns Report by the Board of Directors p. 22 102-35 Remuneration of the Board and senior executives Remuneration Report p. 135–140 102-36 Process for determining remuneration Remuneration Report p. 135–140 102-40 List of stakeholder groups engaged by the organisation Sustainability Report p. 163 102-41 Percentage of total employees covered by collective bargaining agreements Alma Media complies with the labour legislation in all its operating countries. Information about the number of employees covered by collective bargaining agree- ments is available for the business operations in Fin- land and Sweden. In Finland, 61 per cent of employees were covered by collective agreements at the end of 2022. All of Alma Media’s employees in Sweden were covered by collective agreements in 2022. Stakeholder interaction 102-42 Basis for identiﬁcation and selection of stakeholders with whom to engage Sustainability Report p. 162–163 102-43 Approach to stakeholder engagement Sustainability Report p. 162–163 102-44 Key topics and concerns raised through stakeholder engagement Sustainability Report p. 162–163 Reporting practice 102-45 Entities included in the consolidated ﬁnancial statements Report by the Board of Directors p. 12 102-46 Deﬁning the report content Report by the Board of Directors p. 2, Sustainability Report p. 157 102-47 Material topics and their calculation boundaries Sustainability Report p. 162, 197 102-48 Restatements of information Sustainability Report p. 197 102-49 Signiﬁcant changes in the scope and topic boundaries Sustainability Report p. 197 102-50 Reporting period 1 January–31 December 2022 102-51 Date of most recent report 8 March 2022 102-52 Reporting cycle Annual FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 200ANNUAL REPORT 2022 SUSTAINABILITY REPORT GRI Indicator Location More information 102-53 Contact point for questions regarding the report comms@almamedia.ﬁ 102-54 Claims of reporting in accordance with the GRI Standards Sustainability Report p. 199–202 102-55 GRI content index Sustainability Report p. 199–202 102-56 External assurance Sustainability Report p. 197 Management approach 103-1 Material topics and their Boundaries Sustainability Report p. 166–167 103-2 The management approach and its components Sustainability Report p. 166–167 103-3 Evaluation of the management approach Sustainability Report p. 166–167 Economic standards Economic performance 201-1 Direct economic value generated and distributed Report by the Board of Directors p. 21 201-4 Financial assistance received from government Sustainability Report p. 170 Anti-corruption 205-1 Operations assessed for risks related to corruption Sustainability Report p. 169–170 205-2 Communication and training about anti-corruption policies and procedures Sustainability Report p. 169–170 205-3 Conﬁrmed incidents of corruption and the actions taken Sustainability Report p. 170 Anti-competitive behaviour 206-1 Legal actions for anti-competitive behaviour, anti-trust and dominant market position practices Sustainability Report p. 170 Environmental standards Energy 302-1 Energy consumption within the organisation Sustainability Report p. 172 302-2 Energy consumption outside of the organisation Sustainability Report p. 172 Emissions 305-1 Direct (Scope 1) GHG emissions Sustainability Report p. 172 305-2 Energy indirect (Scope 2) GHG emissions Sustainability Report p. 172 305-3 Other indirect (Scope 3) GHG emissions Sustainability Report p. 172, 176 305-4 GHG emissions intensity Sustainability Report p. 172 305-5 Reduction of GHG emissions Sustainability Report p. 172, 176 307-1 Non-compliance with the environmental laws and regulations Sustainability Report p. 172 308-1 New suppliers were screened using environmental criteria Sustainability Report p. 176 FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 201ANNUAL REPORT 2022 SUSTAINABILITY REPORT GRI Indicator Location More information 308-2 Negative environmental impacts in the supply chain and actions taken Sustainability Report p. 176 Social standards Employee turnover 401-1 New employee hires and employee turnover Sustainability Report p. 184 Training and education 404-1 Average hours of training per year per employee 404-1 Not available for 2022 404-2 Programs for upgrading employee skills and transition assistance programs Sustainability Report p. 184–185 404-3 Percentage of employees receiving regular performance and career development reviews Sustainability Report p. 184 Diversity and equal opportunity 405-1 Diversity of governance bodies and employees Sustainability Report p. 181–182 405-2 Ratio of basic salary and remuneration of women to men Alma Media does not deﬁne the gender of its employ- ees. Non-discrimination 406-1 Incidents of discrimination and corrective actions taken Sustainability Report p. 182 414-1 New suppliers that were screened using social criteria Sustainability Report p. 176 414-2 Actions taken to minimise negative social impacts in the supply chain Sustainability Report p. 176 Public policy 415-1 Political contributions Sustainability Report p. 169 Marketing and labelling 417-3 Incidents of non-compliance with laws, regulations and/or voluntary codes con- cerning marketing communications Sustainability Report p. 188 Customer privacy 418-1 Total number of substantiated complaints received concerning breaches of customer privacy and losses of customer data Sustainability Report p. 179 Compliance 419-1 Non-compliance with the laws and regulations in the social and economic area Sustainability Report p. 170, 182 Content in accordance with GRI G4 Standards applicable to the media sector G4-M1 Signiﬁcant funding and other support received from non-governmental sources Sustainability Report p. 169 G4-M2 Methodology for assessing and monitoring adherence to content creation values Sustainability Report p. 187–189 G4-M3 Actions taken to improve adherence to content creation values Sustainability Report p. 187–189 G4-M4 Content accessibility, protection of vulnerable audiences and informed deci- sion-making Sustainability Report p. 187–188 G4-M7 Actions taken to empower audiences through media literacy skills development Sustainability Report p. 189, 194 FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 202ANNUAL REPORT 2022 SUSTAINABILITY REPORT Principle Location Human rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights. Sustainability Report: Code of Conduct p. 169, 176–178, 181 Principle 2: Businesses should make sure that they are not complicit in human rights abuses. Sustainability Report: Code of Conduct p. 169, 176–178, 181 Careers Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. Sustainability Report: Code of Conduct p. 169, 176–178, 181 Principle 4: Businesses should support the elimination of all forms of forced and compulsory labour. Sustainability Report: Code of Conduct p. 169, 176–178, 181 Principle 5: Businesses should support the effective abolition of child labour. Sustainability Report: Code of Conduct p. 169, 176–178, 181 Principle 6: Businesses should support the elimination of discrimination in respect of employment and occupation. Sustainability Report: Code of Conduct p. 169, 176–178, 181 Environment Principle 7: Businesses should support a precautionary approach to environmental challenges. Sustainability Report: Code of Conduct p. 176–178, 181 Principle 8: Businesses should undertake initiatives to promote greater environmental responsibility. Sustainability Report: Code of Conduct p. 176–178, 181 Principle 9: Businesses should encourage the development and diffusion of environmentally friendly technologies. Sustainability Report: Code of Conduct p. 176–178, 181 Anti-corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. Sustainability Report: Code of Conduct p. 169, 176–178, 181 Global Compact content index FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 203ANNUAL REPORT 2022 SUSTAINABILITY REPORT SASB compliance Location More information TC-IM-520a.1 Total amount of monetary losses as a result of legal proceedings associated with anticompetitive behaviour regulations Sustainability Report p. 170 SV-ME-270a.3 Description of approach for ensuring journalistic integrity of news programming related to: (1) truthfulness, accuracy, objectivity, fairness, and accountability, (2) independence of content and/or transparency of potential bias, and (3) protection of privacy and limitation of harm Sustainability Report p. 187–188, 179–180 SV-ME-520a.1 Description of approach to ensuring intellectual property (IP) protection Sustainability Report p. 179–180 SV-ME-270a.1 Total amount of monetary losses as a result of legal proceedings associated with libel or slander Sustainability Report p. 170 SV-ED-230A.1 CG-EC-230A.1 TC-IM-230A.2 Description of approach to identifying and addressing data security risks, including use of third-party cybersecurity standards Sustainability Report p. 179–180 SV-ED-230A.2 Description of policies and practices relating to collection, usage and retention of student information Sustainability Report p. 179–180 SV-ED-230A.3 CG-EC-230A.1 TC-IM-230A.1 (1) Number of data security breaches, (2) percentage involving personally identiﬁable information (PII), (3) number of users affected Sustainability Report p. 179–180 CG-EC-220A.1 TC-IM-220A.1 Number of users whose information is used for secondary purposes Sustainability Report p. 179–180 CG-EC-220A.2 TC-IM-220A.1 Description of policies and practices relating to behavioural advertising and user privacy Sustainability Report p. 188 TC-IM-220A.3 Total amount of monetary losses as a result of legal proceedings associated with user privacy Sustainability Report p. 179, 170 SV-ME-260A.2 Description of policies and procedures to ensuring pluralism in news media content Sustainability Report p. 187 SV-ME-260a.1 TC-IM-330A.3 Percentage of gender and racial/ethnic group representation for (1) management, (2) technical staff and (3) all other employees Sustainability Report p. 181–182 TC-IM-330A.1 Percentage of employees that are foreign nationals Sustainability Report p. 182 TC-IM-330A.2 Employee engagement as a percentage, 5 Sustainability Report p. 184 TC-IM-130A.3 Discussion of the integration of environmental considerations into strategic planning for data centre need Sustainability Report p. 174–175 Sustainability reporting in accordance with the SASB (Sustainable Accounting Standard Board) Reporting Framework NASDAQ ESG Location G6.1 Does your company follow an Ethics and/or Anti-Corruption policy? Sustainability Report p. 169 G6.2 If yes, what percentage of your workforce has formally certiﬁed its compliance with the policy? Sustainability Report p. 169 FINANCIAL STATEMENTS REPORT BY THE BOARD OF DIRECTORS YEAR 2022 CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT 204ANNUAL REPORT 2022 SUSTAINABILITY REPORT Alma Media Corporation Alvar Aallon katu 3 C, FI-00100 Helsinki, Postal address: P.O. Box 140, FI-00101 Helsinki Tel. +358 10 665 000, ﬁrstname.lastname@almamedia.ﬁ, almamedia@almamedia.ﬁ

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