Financial statements bulletin 1 January 2021 – 30 June 2022
Letter from the CEO: Edita Group focuses on developing Edita businesses
The reporting period of 18 months from 1 January 2021 to 30 June 2022 formed a very special period in the history of the Edita Group and our journey of transformation.
In December 2021, we announced the divestment of the Nordic Morning business area and all its units in Finland and Sweden to the Swedish H&H Group. The transaction was closed on 31 January 2022. The Group was renamed Edita Group, respecting our legacy related to the name Edita. At the same time a new era in our long history was started. We now focus on our Edita businesses and their development and growth. The journey of transformation continues with a new direction.
During the reporting period the world around us has also changed. We have experienced an exceptional market situation and changes in working environment caused by the COVID-19 pandemic. Russia’s war against Ukraine has had a significant negative effect on economic growth. Edita Group has no business activities or assets in Ukraine or Russia, hence only the indirect impact of the war affects us.
Despite the turbulent times, our continuing businesses were able to successfully run their operations which resulted as solid financial performance at the reporting period. Edita Prima reached double-digit annualized growth for the second consecutive period which materialized as improved gross margin and operating profit. The growth was strongly driven by recent new assignments in transactional print. In addition to this, Edita Prima signed new client contracts covering digital services especially in customer communication management, election services and digital asset management. The conditions in the paper market started to change in the beginning of 2021 and the demand of printing papers started to grow rapidly as a post-COVID phenomenon resulting the paper industry facing severe capacity problems. This has led into unforeseen high price increases combined with long delivery times and even shortage of printing papers. The growing material prices have also affected Edita Prima ́s prices during the reporting period and have required various mitigating activities.
Today information security is an integrated part of business processes. Edita Prima started to implement an Information Security Management System in the spring of 2021. The system was taken into use in our daily business operations at the beginning of 2022 and the aim is to get the system certified as ISO27001 compliant. This is an important milestone in strengthening our capabilities in providing high-quality services for our customers.
The reporting period also turned out to be successful for Edita Publishing and it’s learning and legal information businesses. Also, developing the strategic capabilities of these two core businesses have been in our focus.
The global COVID-19 pandemic accelerated the digitalization of learning materials in Finland. Together with the new, free-of-charge secondary education this led to a development where most upper secondary schools turned to digital materials. We were happy to see that our expectations set for the sales of these upper secondary school new curriculum education materials were met during the reporting period. Also, in general all education material sales especially in 2021 exceeded our expectations. Edita Publishing has made a strategic decision to invest in the market entry of primary school education material and has started to build up the capabilities needed, talent acquisition being the core activity. The market expansion is proceeding according to plan.
The legal information business provides online legal services, books and training for lawyers and other stakeholders who need legal information in their profession. The core of our legal information digital web services, Edilex, continued its year-on-year growth. New digital services were introduced and renewed during the reporting period.
Edita Publishing has been providing the free public judicial information service Finlex since the late 1990s for Finland’s Ministry of Justice. During the reporting period, the Legal Register Centre launched a public tendering process for the new version of Finlex and the related service. The final procurement decision and the good news about Edita Publishing winning the tender were published after the reporting period in September 2022.
After the divestment of the Nordic Morning business area, we are now a smaller Group with approximately 200 employees and two offices located only in Finland. While the status of the COVID-19 pandemic for now enables us to work more often face to face, we launched a hybrid way of working in early March 2022.
As part of the ongoing organizational and cultural change, we conducted an employee engagement survey among our employees in March 2022. The aim is to follow-up on progress made and to gain valuable insights for the transformation that continues. The survey proved that our results are very good and have improved in all measured areas that describe the development of our guiding principles compared to the previous survey in 2020. The highest score was given to our principle “We trust and respect.” In a rapidly changing environment and in the middle of transformation this is a remarkable achievement.
With great trust and respect, I would like to thank our teams for their commitment and performance in continuing to grow our business and to successfully execute our various development projects that have been in the core of our transformational journey.