Alma Media Oyj

OMXH:ALMA

Earnings Call Transcript 2021-Q1

[Elina Kukkonen, Senior Vice President of Communications & Brand]

Good morning, ladies and gentlemen, and welcome to this interim report session of Alma Media's Third Quarter 2021. My name is Elina Kukkonen, and I'm responsible of the communications and brand here in Alma. The agenda for the morning is that first, our CEO, Mr. Telanne, presents the results of the business segment; and followed by our CFO, Mr. Juha Nuutinen, on the financial position of Alma. After Mr. Nuutinen, Mr. Telanne continues about the outlook and the implementation of Alma Media strategy. After the presentation, we'll have the Q&A session. First, we take the questions from the conf call line and then all the questions from the online. All questions are more than welcome, of course. So once again, thank you for joining this stream and this session this morning. Hope you can hear and see us all clearly. So now Mr. Kai Telanne, I hand it over to you, please. Thank you.

[Kai Telanne, CEO & President]

Thank you very much, Elina, and good morning on my behalf as well. And as usually, I start with the main events and figures of the corporation and the segment figures as well; and Juha Nuutinen, our CFO, will follow with financials after my presentation. We had a very good start for the year. Actually, it was better than we expected before despite the continuing uncertainties in the operating environment due to the COVID-19. We had a nice rebound in almost every business and in every country, which is, of course, a good sign for coming weeks and months for the company. We had a slight decline in revenues, but the other operating -- adjusted operating profit was almost on last year's level, which was, of course, a good achievement from our businesses in every country. As you noticed, we have put our balance sheet in work, referring to our from Prime Minister, we have done what we have promised to you. We've spent over EUR 200 million according to our strategy to leverage the business, especially the digital business marketplaces. And so on -- so due to this, the leverage has increased remarkably. And during last or coming months, the change is -- in the balance sheet is significant. But likely, we have a high cash conversion, so we have much confident that this will work nicely. We have differences in different segments, as you can notice from this slide, the slight decline in revenues in all segments, but really nice development in profitability in Alma Talent and Alma Consumer, according to our plan, but even better than we thought. We had a decline in recruitment and especially in print media, content and advertising sales We have noticed and said also before that the print business is going to continue to decline, and there's no -- any change seen in the market. So that's what we are expecting to happen also in the near future. So the print advertising is going to decline and print print content is going to decline. But we are able to mitigate those decline nicely with the good development in digital content sales and digital advertising. Digital advertising is -- and overall, digital business in the group is improving step by step from the bottom of the second quarter of 2020 when we had minus 17% decline because of the burst of the COVID-19. Since then, the development has stabilized. And during the first quarter, we are on a positive side. As you can notice from the left side of this slide, 74% of our revenues are now coming from digital sources. This is nicely according to our plan and strategy. I will take a very short dive into our business segment figures and main events so that you can get a clear picture. What has happened and what is happening in the different business units. I start from the Alma Career. Of course, in every country, the situation is still difficult because of the COVID-19, and the revenues are under pressure, even though we have now quite a nice development and a positive trend in invoicing, which is picking up in every country. So the -- as you might remember, we had quite a -- it does comparables during January and February, which were quite good also last year and then the problems came in during the end of March. At a decline of revenues around 12%, we are on a very good profitability level, still because we saved expenses, more than 5%. But that's, of course, the way we do when we see the revenues going down. We have quite a good development in this kind of added value services like said that you have heard about starting from Czech Republic, and now we are leveraging these new services to Slovakia and Finland as well. So on a negative side -- on revenue side, positive signs on invoicing and sales, and we expect sales segment to perform better and actually quite well during coming months. I'm very happy with the performance actually of this segment. In Alma Talent, which is the business-to-business segment, business media and business services, we had a very good performance across the board in almost every business. We had a nice revenue improvement of 6% of continuing operations. Digitalization rate rose to 55%, which is, of course, according to our strategy. We had a very positive revenue and profit development also in telemarketing and talent services. So that means that almost every part of the business is developing favorably. Adjusted operating profit grew nicely, 41.4%, which is very good, better than expected. The adjusted operating margin of Alma Talent, all in all, 21.3%, which is much better than we thought we could achieve under these circumstances. 51% of revenues of this segment are coming from the media businesses like Kauppalehti, Talouselama, Tekniikka&Talous and so on and 33%, so 1/3 of this segment's revenues are coming from the different kind of services on a high profitability level. Very good start for our business-to-business service in Finland and Sweden, in both countries. And then lastly, the Alma Consumer, this is a reorganized group of Iltalehti media and different kind of Finnish consumer digital services like houses and premises and so those are the services that we use to used to run under the Alma Mediapartners before. Growth is driven by marketplaces like houses, premises and different kind of comparison services. They are still performing really good, growing on a high profitability level. On the negative side, we had the declining single copy sales of Iltalehti and also the print advertising sales are declining heavily. In this segment, the role of print advertising is already really small, so we don't suffer that much. So that is not that remarkable in this sense. But on the other hand, the digital advertising and digital content marketing and mobile marketing, these are really important for us and the development of those were really favorable in our case, a nice growth. And because of the decline in print-related expenses and good development in advertising in digital, our adjusted operating profit grew almost 30% during the first quarter. So this is also a very good start for the Alma Consumer segment. In this segment, the revenue split by vertical is, as seen on the right side of this slide: media and ad finance services, almost 60%; housing, 23%; and comparison and sharing economy services, around 9%. So this is the summary of Consumer, but also a very good start for the year. Really happy with this. And now I give the floor to Juha Nuutinen. He will go through the financials, the balance sheet issues and others, and then I will come back after that with the strategy and the outlook of the remainder of the year.

[Juha Nuutinen, Chief Financial Officer]

Thank you, Kai, and good morning also on my behalf. Alma had several M&A actions on acquisitions during the last quarter and also in December, so that's our focus in this financial position in my review. And those acquisitions will naturally have quite big impact on financial position and net debt. So let's look at the net debt situation at the moment. At the end of March, we had interest-bearing net debt of EUR 39 million and equity ratio of 40%. These figures do not include yet the Nettix acquisition, which will happen in April. So our net debt will be increased by EUR 170 million because of that acquisition. So from an equity ratio point of view, we will be at the level of approximately of 30% at the end of June, and so the Nettix will have a big impact in that aspect as well. We have the bridge loan facility taken in March, and that EUR 50 million is taken in March and EUR 170 million in April. Then cash flow. This graph includes the continued operations, but also divested business cash flow. So that explains most of the decrease in cash flow and operating cash flow during the first quarter. But there is also other issues as well. For example, we paid income taxes EUR 3 million more than the year before, and that's affecting also here. And also our EBITDA was slightly weaker than year before in -- concerning continued operations. Also, these new businesses will be more balanced from the cash flow point of view during the year and then compared to the earlier years where the most of the cash flow was generated in the first quarter. Now starting this year, this will be more balanced, and the cash flow is generated more evenly during the year. And then, of course, we have a lot of acquisitions, and that's why our cash flow from investment activities was pretty big number, actually, EUR 64 million, we used for acquisitions in Netello Systems, Quantiq, which is brand name Techloop and also, we purchased the remaining shares in Alma Career with EUR 59 million. This graph, we have presented you also since last June. So this tells you our recruitment business invoicing compared to revenue and in Czech Republic in our LNG company. And like Kai mentioned earlier, we had a pretty good invoicing period in the first quarter. And this graph tells you also that that we are in the level where we were in 2019 and early 2020. And so our revenue will be -- will increase now starting from the second quarter. And this tells pretty positive trend towards the year-end, and we are pretty happy with this invoicing amount in -- from January to March this year. Earnings per share. This graph tells you the earnings per share from continued operations. It was EUR 0.09. And the last year, it was EUR 0.10. So there was slightly decrease there because there were adjusted items, especially last year, EUR 1 million positive. So that's affecting the mostly in this earnings per share. This purchase of minority shares in Alma Career will have a positive effect on earnings per share starting April, and it will increase the earnings per share. in that -- from that quarter. This first quarter, there is a positive effect from the redemption of minority shares in Alma Mediapartners that's affecting already in this first quarter figures. We have keep our long-term financial target, the same that at they were previously, and digital business growth is one of our main drivers. We put it here in graph after just a yellow, even if we are behind the long-term target, that's the reason for that is that we have a quite positive trend now and taking into account the recruitment business positive invoicing in first quarter. It will bring us the revenue growth in the -- starting from the second quarter, and that's why we have a positive -- we are optimistic from the second and third quarters this year from this digital business growth point of view. Return on investment is 15%, which is a good level despite our quite heavy investment. So this is -- we are on a track -- good track in that sense, given peer pressure, we come back to this later, this driver, not been in this review. So that was the financial status. And please, after this presentation, we can go detail with your questions. But now I give the speech to Kai. Thank you.

[Kai Telanne, CEO & President]

Thank you very much, Juha. I will continue with a few remarks about the operating environment and the outlook and strategy as well. There's, of course, a question of the underlying economies and environment during coming months. Unfortunately, we don't have a new forecast for the European Commission or other institutions. These are the winter forecasts that our view is that there's not a big change in underlying debts. The businesses are running surprisingly well in every country have in mind in the difficult situation with the COVID-19 like in Czech Republic or Slovakia, the businesses are running and the companies are trying to bring the business is open. So we are expecting this -- the environment and the underlying economies to develop favorably, even though we have quite blurry situation and poor visibility. So we don't see any big difficulties in the business environment. So we will continue with the current strategy and run the businesses, as expected. In Finland, the ad market is on a quite negative side still, and that is because of the poor performance of print advertising, especially the newspaper and magazine advertising, which is still on highly negative side. Luckily, we have the digital advertising, online advertising on the positive side, as we had also in Alma Media, our market share is developing favorably and the businesses are running nicely. The decline of the Finnish market as well as other European markets are coming from the print side. We have had also the news from the printing forest sector lately, which shows how difficult the situation in the print business is. Well, 75% of our businesses are coming from digital sources. So we don't suffer that much of this for development of print sector, but still it has also some effect on on our businesses, unfortunately, and that will continue. A few words about the strategy. I just want to remind you the key elements of Alma's strategy, our transformational strategy that we will continue. The first thing is to continue with the transformation of the core business, which means, of course, to accelerate the digitalization of the print media business. Still, we have the print media. We are in a good way to transform it to digital and a good achievements and results on that, like in Alma Talent and in Consumer as well. We will activate the cooperation within the group and different business units. So we want to have all the benefits of this kind of group-wide cooperation that use all the abilities and skills that we have inside the group for the benefit of every business unit. And of course, we're going to going to continue to divest or discontinue this kind of unprofitable or low profitable business we see those. We don't have any big problems at the moment with unprofitable businesses, which you can see from the profitability of the company, of course, But we will have a close look at every business all the time. The second part of the strategy is, of course, to continue growing in digital businesses, which means that we continue to diversify our business from media to marketplaces and digital services. We have a very good initiatives like In talent segment in this kind of diversifying to digital services with a profitable way. We will, of course, concentrate more on the services with synergy benefits. So we will use all the abilities and the resources that we have or for this kind of new initiatives. We will continue in diversifying the business in different kind of value chains to new business areas like from a classified business in the term of services around housing and promises career and cars and so on. And of course, one of the key elements is to continue on developing this kind of world-class digital capabilities, skills, human resources and technology. This is one of the key elements, of course, and that development will continue also in the future. And the third part of the strategy is to continue on internationalizing the company to expand the new geographies is possible in order to speed up the growth and to decrease the dependency on Finnish economy, which is not growing that well as we wanted. We want to continue on expanding our business in current geographies and then also to expand and leverage the current businesses to new businesses in current geographies, like this kind of platform services close to our current core business, like this kind of like recruiting treatment verticals or car verticals or whatever. So this is the core. Quite simple: transform the core, growing digital and internationalize. This is what we're going to continue. A few examples of this strategy during the first quarter. Alma Career, we acquired the remaining shares of the Alma Career minority, 16.7%. So we now own the full package of Alma Career, the whole business. As you might remember, we acquired also the other minorities from the media partners, the Finnish classified businesses during last year, the end of last year. This quarter, we acquired 60% of a local Netello System, which is a company that provides this kind of digital marketing solutions to SMEs, especially. This is an add-on to our extremely good advertising or marketing digital services. And the third example is also from Alma Career, where we acquired a Czech startup, which is called Quantiq, which is a company, SaaS-based recruitment service, especially concentrated on recruiting IT professionals and businesses. The brand is Techloop.io actually. So these are very good examples of the transactions that we have made and the layoffs going forward with our strategy. This is only a reminder of a major investment that we did. You all know that we acquired Nettix with EUR 170 million. I will go through this in detail. This is in the material, just to remind you what we did, put the balance sheet in work. This is a continuation of our digitalization strategy, and this is a nice add-on to our business. The acquisition was completed on first of April. So it will be in our books during the second quarter. At the moment, we have the TSA period going on, and the integration process is ongoing nicely. We are in a good speed with we will hear, of course, more of this during the coming months. We organized in a new way inside the Alma Consumer. So if you remember, we told you that we will put all the Finnish consumer businesses in one entity called Alma Consumer. So this is a combination of a leading digital brand of Iltalehti and leading digital verticals in Finnish scale in houses and premises, cars, if you kind of comparison services and so on. Highly digital, 78% digital business on a high profitability level. So we -- by doing this, we will get all the synergies and keep the leading position -- marketing position of ours also in the coming months. So the integration is going on and proceeding nicely, as expected. And then last outlook for the year. So we will repeat our outlook, even though the uncertainty is going to continue. We expect our full year revenue and adjusted operating profit to increase compared to last year. So this is what I had in mind. Thank you very much. If you have any kind of questions, I'm more than happy to answer those and Juha Nuutinen as well. Please with your questions.

[Elina Kukkonen, Senior Vice President of Communications & Brand]

Okay. Operator, I hope you can hear us. We will be ready for questions.

[Operator]

[Operator Instructions] The first question comes from the line of Pete Kujala from SEB.

[Pete-Veikko Kujala]

It's Pete-Veikko Kujala calling from SEB. Just if we start with the Alma Career minority share acquisition, can you discuss a little bit about this, why you decided that this is now a kind of good place and time to acquire these shares? And was this a long discussion with the previous owner? Or did it come as a kind of a surprise as now we say, possibility to acquire the shares?

[Kai Telanne, CEO & President]

Well, that's a good question. Thank you, Veikko. It was not a very long discussion. We came to the conclusion quite easily. But the idea, of course, was to use the balance sheet and the resources that we have to run the business as a one entity with our own targets and our way to get all the all the benefits of the cooperation is at the company, especially in the carrier unit. And after we reorganized in a new way -- way is quite a natural thing that is at Alma Career, you have all the resources in one hand, and we can develop the business from our purposes and according to our targets. So this is quite a normal thing. And the timing, of course, is more or less coming from the ability to to fund this kind of acquisition after we divested the regional media business. So we had room of proceeding with this kind of things as we did with the media partners minority.

[Pete-Veikko Kujala]

Yes. Very clear. Moving on to more of the business side. You mentioned that invoicing has gone very well during Q1 and that you expect growth in the Alma Career segment in Q2. Do you expect this growth to be broad-based across the different countries? Or are there some differences? Are some countries lagging behind? Or is this very even kind of growth year-over-year across countries?

[Kai Telanne, CEO & President]

Well, there are differences. It's a good question. But it seems that almost every country is developing favorably with -- in terms of invoicing and sales at the moment. As you noticed, the LMC development also in revenues where was it minus 10%. And in the worst case, it's about, was it in core Slovakia, minus 20% or minus 21%. So there are differences still. And that's, of course, partly because of the differences in the COVID situation, but also with the differences of the way of running the business. So we have a bit different stance in sales or organizing the business in Czech Republic and Slovakia. So in Slovakia our Career business is more based on self-service. And in Czech Republic, we have a strong sales organization pushing the sales and driving the sales on. So there are differences. Like in Baltic countries, the revenues or the revenue was it on last year's level, more or less or plus 1% or something like that, which is, of course, quite an interesting thing, even though there are difficulties also in both countries with the COVID situation. But to summarize this, we see that the sales are picking up in all countries. We will still face difficulties, of course, in the markets because of the disease, but things are running to a right direction at the moment. So we are expecting our revenues to develop favorably during coming months and quarters, as said before.

[Pete-Veikko Kujala]

Yes. Very clear. And lastly, on Alma Career from my side. If I remember correctly, you mentioned that you had reduced some marketing expenses in the segment. But if invoicing and when invoicing was very strong in Q1, shouldn't this kind of be kind of tied with higher marketing expenses, if the market demand is quite strong? So how should we think about the expenses in the Career segment as we move forward?

[Kai Telanne, CEO & President]

Yes. The sales expenses are increasing with the invoicing and sales. So we have like sales dependent cost, of course, the sales expenses are increasing, which is natural And then the marketing expenses are highly dependent on the initiatives that we do or have there. We have new launches or new product features and so on. So we are increasing the marketing. And we have had marketing expenses like launching these in Czech or Slovakia, and we have a marketing special put on the table in Finland where we're launching new services. But all in all, we are careful, of course, at the moment, we are careful with the marketing costs in all segments because the situation with the COVID-19 is still unclear. So our way of running the business is that we do have to be careful with the cost if you don't know how the revenues are continuing. So if we are seeing the good development of the revenues as we expect, so we are releasing the costs, of course, hand-in-hand with that.

[Pete-Veikko Kujala]

Yes, makes sense. Then on Alma Talent, it seems the margins keep on continuously surprising, at least myself. Can you discuss a little bit the different uses when we split it to media and services and then the direct marketing, which you show also in the presentation, what kind of like profitability differences are there between these these different businesses? Are there significant difference?

[Kai Telanne, CEO & President]

Well, broadly, I could say that the -- these kind of classified marketplaces for marketplaces, although in the business-to-business side are more profitable than the the traditional print media business that is not news, any news for anybody. So broadly, you can say that the new businesses in talent like marketplaces or this kind of data businesses that we are creating and innovating at the moment are very profitable ones. And the new initiatives like , it will be really profitable. Also, it's growing nicely on a profitable way. So we are expecting that part of the business of the segment also to develop very favorably in the future. And then on the other hand, the traditional media business is also trending nicely because the transformation from print to digital brings the favorable profitability along that. While we are getting rid of the print-related costs, but at the same time, increasing the highly profitable digital business. So the machine is working as expected. So the -- during the time, I think the -- also the media business profitability will increase as it does in the digital marketplaces and service business. So the long story short, the service business and the marketplace is business also in talent segment is really profitable. But our mega telemarketing business have been surprisingly good for years, and it is still improving, which is also a nice surprise for me. So we are doing that very effectively. We have a very skilled management and personnel there and it's been running nicely also during this quarter. But you will see the favorable development and the split between the businesses from now on also in the talent segment.

[Operator]

The next question comes from the line of Ahmed Sarkamies from Nordea.

[Sami Sarkamies, Senior Analyst of TMT]

It's Sami Sarkamies from Nordea. I'll first come back to the topic of operating costs. You disclosed that over the quarter, about 5% lower for both Career and Consumer. Are you planning on maintaining such a lower level also in the coming quarters? Are you not completely dropping the temporary cost measures from last year? And what will need to happen for you to completely drop these temporary cost measures?

[Kai Telanne, CEO & President]

Actually, we don't have this kind of temporary cost measures anymore in place. So we are more on a normal cost level. The -- on the consumer side, the decline of the cost came from the print-related cost with the volumes like the single copy sales are declining, and of course, the advertising as well. And it doesn't have that big effect, but especially the single-copy sales are declining, which means we have a declining paper print and delivery costs. So that is the main reason on that side. In carrier, the main decline came from marketing expenses. And with the increasing sales, the the sales force will increase. But the overall situation in the company is that the continuing businesses costs are developing more or less according to the inflation rate. And if you want to somehow calculate the cost base, I think a good target is to compare this year's cost to 2019 cost, which was a normal -- more or less a normal level. It was a tough year. We had a high sales cost. But if we are going to reach the good level of 2019 in sales, I will expect that those sales costs are approaching to that level. So to summarize, we don't have, at the moment, this kind of COVID-related savings in place in any business. So we are trying to exit the situation, and we are exiting the situation according to the strategy and trying to normalize the business as soon as possible, which means, of course, that the -- we expect the second half of the year should be more more close to the normalized situation like 2019 situation than we have had during the last year.

[Sami Sarkamies, Senior Analyst of TMT]

Okay. That's very helpful. Then I would continue on Talent. Could you still briefly summarize sort of the reasons for strong development at Talent in Q1?

[Kai Telanne, CEO & President]

Well, first of all, we had a good development in continuing businesses. The revenues grew nicely. And it comes from digital advertising, digital content sales and digital marketplaces and data businesses from Mega, the telemarketings, and that was it actually more or less. So we have several nicely performing businesses in the segment. So almost every business picking up and proceeding at least according to the plan or even better. And then the transformational strategy from print to digital is working nicely in this group. We have 55% approximately of digital business in the company. So there are still room for improvements. 45% of the business are nondigital, and the transformation is working as expected, and the profitability is improving. And then secondly, we have a focus in developing the profitable digital services in the segment. And we are in an early stage for us. We have had these businesses nicely. But still, we have a lot of room to improve And the investments that we are making, like teas and other service investments inside the group are working according to the strategy, and they are growing. And we want to grow organically and organically inside this segment. So the transformation of current businesses and the new investment into new businesses are the reason and the profitable ones. That's how it goes.

[Sami Sarkamies, Senior Analyst of TMT]

Okay. Then on Alma Career, I've asked that which year do you expect revenues to be back at 2019 peak level. What's the current thinking?

[Kai Telanne, CEO & President]

By the end of the year, we are as per that level. It remains to be seen. Of course, we are heavily dependent on the underlying market that you very well know. But it seems that the invoicing level, the sales level is close to the top years invoicing or sales level in many businesses, which is a very good sign for this revenue development. We had this kind of revenue recognition problem, which is, of course, a bit annoying when you don't see very quickly the change in revenues when we have the same change in invoicing and sales. But the invoicing level at the moment is a good sign for a good development also in the coming coming months. So I hope that by the end of the year, we are -- in our sales, especially and hopefully, in revenues, we are at the good and decent level.

[Sami Sarkamies, Senior Analyst of TMT]

Yes. It is implying that next year, revenues for Career could be at 2019 level?

[Kai Telanne, CEO & President]

Yes, we are -- absolutely. Like we know the poor performance of invoicing during the first half of last year is burdening the revenues of this year's first half, and the second half should be better. And if the good performance in sales and invoicing continues, 2022 will be good. It will be good in the business. So we are expecting a highly improving revenues and profitability, of course, in that case.

[Sami Sarkamies, Senior Analyst of TMT]

Okay. And then finally, I'd like to ask about your plans for deleveraging. Firstly, for how many years do you think that you will be paying down debts and will not be in a position to do any material new acquisitions. And then secondly, as you continue to deleverage, are you planning on paying a rising dividend?

[Juha Nuutinen, Chief Financial Officer]

Yes. I start from the last part of the question. So we have our plan is to continue in paying increasing dividends stable but increasing dividends. So we are not planning to decrease the level of dividend payments, which means that we are now in the phase of digesting the investments and make sure that they are running as expected with the high cash conversion rate and of course, profitability. So It might take some years before we are in the same situation with this balance sheet to these kind of major investments. But we have a high cash reversion rate, which means we are quite confident in being able to pay back the debt and continue with the add-on investment that we have in plant and also continuing the development of the businesses also inorganically in different segments. So like we have before, we think that the net debt level 3.5% is quite an okay and healthy level in our case, and we are now after this this net tax investment and new debt, we are close to that. And we want to deleverage from that a little bit in order to live rule for some extraordinary things if those happen But like I said, things are going in the right direction. So we are confident our ability to hand and this situation very well.

[Operator]

[Operator Instructions] The next question comes from the line of Pia Rosqvist from Carnegie.

[Pia Rosqvist-Heinsalmi]

It's Pia from Carnegie. I think my questions on costs have been answered. But can you please remind us on any particular seasonality in your business in terms of costs or revenues for this year?

[Kai Telanne, CEO & President]

If I try to repeat, if I heard it right, so you're asking about seasonality of the businesses also on the cost side?

[Pia Rosqvist-Heinsalmi]

Yes, please.

[Kai Telanne, CEO & President]

All right. Well, on this kind of -- in terms of revenues, of course, the -- there's seasonality in cash flow like the subscription business. The big part of the subscription revenues are coming in, in the first quarter of the year. And then on the other hand, in Alma Career, for example, the last month, usually are quite silent. So there are differences. And also like the book business, they are -- it is heavily concentrated on the last quarter during the Christmas time and so on. But I think that our portfolio is more balanced than ever because of the increased part of digital services and different kind of digital marketplaces that we have, which are more stable in that sense than and some other services. So I would say that the seasonality of the business with the increased diversity of the company has lessen than increased.

[Pia Rosqvist-Heinsalmi]

Okay. Then looking at the regional sales split, Sweden has, due to divestments, decreased clearly in size. And if I remember correctly, Objektvision is the only service you have left in Sweden. How committed are you to the Swedish market? Or what are your plans?

[Kai Telanne, CEO & President]

Well, as before, Swedish market is interesting At the moment, we don't have any other activities that sure, which is running nicely. But in raw sense, we are interested in the Swedish market as we are interested in Finnish market. So the time will show if we find -- or found any new ways of approaching Swedish market or investing in there.

[Operator]

There are no further audio questions, but I will pass back for any web questions.

[Elina Kukkonen, Senior Vice President of Communications & Brand]

Thank you, operator. We have some -- one question from Petri Gostowski from the online. It's a 2-part question. First, about the guidance and then about the marketing spending. It goes like this: the guidance upgrade was obviously driven by the Nettix acquisition, but it seems that the economic recovery is picking up. Do you see that your outlook has improved reasonably compared to what the situation was when your previous guidance was given the last quarter of 2020? And the other part is that you had some savings from lower marketing costs in a sample Career segment. Will you accelerate marketing spending in the short term? Or do you expect the current level to hold in the coming quarters?

[Kai Telanne, CEO & President]

I'll start from the last part of the question. Good questions, actually. So we will release the marketing costs hand-in-hand with the increase in revenues in Career. So that is the question. So if the business is running nicely and favorably and increasing, as expected, so we are releasing hand-in-hand the costs, not in advance. And the other part of the question, we don't want to go ahead the development. So we want to see how the COVID develops, how the economies are opening and so on. So we are holding on the current outlook. But the good start of the year is quite encouraging. So if the things are changing heavily, there is a chance, of course, for a better-than-expected development. But of course, there's a chance, of course, to the other side. If the -- if we don't manage in handling the disease, the businesses might go to the other direction. We have also almost of course, that possibility. But the first signs are really good. So we are confident with the current outlook. And if something more positive happens, we will come out with new outlook, of course.

[Elina Kukkonen, Senior Vice President of Communications & Brand]

Currently, there is no other questions at the moment.

[Kai Telanne, CEO & President]

Okay. In that case, I thank you very much for your attention and hope we will see after the latest, after the second quarter result presentation. And in the meantime, anytime if you have any questions, just post those via e-mail or call us. We are here to serve you. Thank you very much.

[Operator]

Thank you for attending. You may now disconnect your lines.