Financial responsibility 2020

Creating value for stakeholders

The aim of Nordic Morning Group is to run its business in a profitable way, which means creating added financial value for key stakeholders, employees, customers and the owner. Important stakeholders for added value also include partners, service providers, investors and the countries and municipalities in which we operate. Nordic Morning Group consists of the following business areas: Nordic Morning, Edita Prima and Edita Publishing.

Nordic Morning Group follows principles of good corporate governance. Financial management is based on the Group’s policies, effective risk management and the principles of internal control.

Financial performance

Digital transformation and change in customer behavior are going through an acceleration phase due to the global COVID-19 pandemic. For Nordic Morning Group this provides new business opportunities in the long run.

In 2020 the Group continued to develop its business operations and structures to improve efficiency and better respond to changes in customer needs. The Group Management Team focused on ensuring employee safety amid the Corona crisis, and securing business continuity. Also, the first phase of the new Group-wide ERP system implementation was completed during the second half of the year to strengthen our development towards becoming a data-driven company.

In 2020, Nordic Morning Group’s operating profit was EUR -2.2 (0.6) million, which was EUR 2.8 million lower than in 2019. The non-operating income included in the operating profit totaled EUR 0.0 (0.1) million. Non-operating expenses amounted to EUR -3.0 (-1.0) million. Nordic Morning Group’s operating profit excluding non-operating items was EUR 0.8 (1.5) million, which was EUR 0.7 million lower than in 2019.

Nordic Morning Group’s consolidated net revenue was EUR 73.9 (EUR 77.6) million. Net revenue grew in the Edita Prima business area thanks to high volume of postal deliveries, a few large service projects, and new customers. Net revenue declined in the Nordic Morning business area in Sweden and Finland largely due to the effects of the COVID-19 pandemic. In the Edita Publishing business area, net revenue decreased mainly due to the last year of current school curriculum, which lead to a decline in learning material sales.

The Group’s equity ratio decreased by 5.8 percentage points, which resulted in a ratio of 32.8 (38.6) percent at the end of the year.

Nordic Morning Group’s financial performance is explained in full in the 2020 Financial Statements, which can be found at http://reporting.nordicmorning.com/en/financials.

Added value for stakeholders

Nordic Morning Group’s operations bring added financial value to the company’s stakeholders, operating areas and market areas. In 2020, Nordic Morning Group sold products and services to its customers totaling EUR 75.1 (78.2) million and spent EUR 43.2 (40.5) million on buying goods and services from partners. Nordic Morning Group produced added financial value for stakeholders totaling EUR 31.9 (37.7) million.


The majority of the added economic value goes toward personnel salaries and other social costs: EUR 28.7 (32.5) million. Information on salaries and other remunerations regarding the Board of Directors, CEO and the Group’s Management Team can be found in the 2020 Financial Statements.

Nordic Morning Group’s gross capital expenditure in 2020 totaled EUR 5.2 (EUR 2.0) million. The shareholders of Nordic Morning Group Oyj resolved that no dividend be paid during 2020 (EUR 0.33 per share, totaling EUR 2.0 million).

A summary of the Group’s added value for stakeholders is provided in the table below.

To safeguard its future, the Group will continue to develop its offerings and processes, invest in developing its people and ways of working, and identify further cost-saving innovations.

Internal control and risk management

Nordic Morning Group aims to effectively secure the profitability of its business operations through good governance, active internal control and risk management.

Every year, the Group conducts risk analyses in conjunction with budgeting. Risks are reported and dealt with immediately. The Board of Directors did not issue a separate assignment for 2020 regarding internal control.

Tax policy 

Nordic Morning Group pays taxes on its business income to each operating country, in compliance with local laws and regulations. More information on the Groups's tax policy and operating principles is in the table below.

Added value for stakeholders

StakeholderIndicator2020201920182017201620152014201320122011
Customers Sales 75 093 78 201 76 981 99 186 105 710 108 060 114 628 123 576 115 491 107 611
Suppliers Cost of goods, materials
and services purchased
43 219 40 485 35 891 45 670 56 703 52 546 56 583 65 590 58 634 50 443
Added value created (tEUR) 31 874 37 716 41 090 53 516 49 007 55 514 58 045 57 986 56 857 57 168
 
StakeholderIndicator2020201920182017 201620152014201320122011
Employees Wages and salaries,
pensions, social costs
28 729 32 461 35 339 41 455 49 513 50 645 45 671 48 393 51 273 48 798
Public sector Direct taxes -40 50 26 1 026 -143 -132 -102 123 -255 -40
Financers Net financing costs -89 -1 866 636 421 254 131 -49 -19 600 707
Charitable organizations Donations 0 0 6 10 134 139 127 124 125 119
Owners Dividends 0 2 000 2 230 2 000 2 000 2 000 1 500 0 0 990
Investors Investments 5 249 2 034 1 796 11 024 5 297 7 786 3 980 3 379 7 368 5 017
Total added value distributed to stakeholders   33 849 34 678 40 032 55 937 57 055 60 569 51 127 52 200 59 111 55 591
Value added remaining in the company   -1 974 3 037 1 058 -2 421 -8 048 -5 055 6 918 5 786 -2 254 1 577
Added value created / FTE (tEUR)   86 85 87 98 75 78 88 87 81 77

Tax policy and operating principles

Nordic Morning Group pays taxes on its business income to the countries in which it operates, in compliance with local laws and regulations.

Nordic Morning Group’s main markets are located in Finland and Sweden. Nordic Morning Group has no companies or business in other countries or countries considered a tax haven. The Group’s aim is to secure and increase shareholder value through profitable and efficiently managed business operations.

The Group’s tax policy is also aimed at securing shareholder value by ensuring that the local tax legislation of each operating country is always complied with, and that taxes are paid to the country in question.

In tax matters that are open to interpretation or otherwise complicated, support is obtained from external tax advisors or the tax authorities, who are requested to provide rulings and advice in advance.

The Group’s objective is to handle its taxes and other levies appropriately, in as timely a manner as possible, and in full compliance with the law.

Nordic Morning Group has prepared a transfer pricing policy that defines the pricing principles for the Group’s internal cross-border trading. The transfer pricing policy is in line with current official guidelines and legislation.

Tax report

Nordic Morning Group pays direct taxes on earnings and property. The Group also influences the economies of the operating countries through indirect taxes, such as value added tax (VAT), as well as other similar charges, such as the employer’s charges and social security premiums that the Group collects on behalf of governments.

In 2020, the Group’s profit before taxes was EUR -2.1 (0.3) million. Taxable profit was negative in Finland and Sweden. The Group will pay income taxes of EUR 0.1 (0.3) million for the financial year 2020.

The amount of confirmed tax losses carried forward from previous years was EUR 9.9 million in Sweden and EUR 0.0 million in Finland at the end of the 2020 financial year. In 2020, the Group’s effective income tax rate was -1.9 (16.4) percent.

At the end of 2020, deferred tax assets stood at EUR 0.1 (0.1) million and deferred tax liabilities at EUR 0.0 (0.1) million. In accordance with the company’s principals of cautiousness, the Group has not booked any deferred tax receivables from taxes carried forward from previous fiscal years.

Of the taxes paid for the financial year, the most significant item was statutory employer’s contributions at EUR 3.1 (3.3) million, the majority of which was paid to Sweden.

Of the taxes remitted for the financial year, VAT payments totaled EUR 7.8 (8.3) million and withholding taxes totaled EUR 6.2 (7.3) million.

In addition, the Group also pays additional mandatory contributions, other tax-related contributions and indirect taxes associated with its purchases, such as road tolls, energy taxes and insurance taxes.

Tax contribution

M€FinlandSwedenGroup
   2020 2019 2020 2019 2020 2019
Turnover 52.0 50.7 21.9 26.8 73.9 77.6
Profit before tax -0.7 0.9 -1.4 -0.6 -2.1 0.3
Utilized tax losses 0.0 0.1 1.5 0.3 1.5 0.5
Personnel 224 254 155 187 379 442

Taxes borne 2019-2020
Corporate income tax 0.1 0.3 0.0 0.0 0.1 0.3
Employment taxes 0.2 0.1 2.9 3.1 3.1 3.3
Taxes on property 0.0 0.0 0.0 0.0 0.0 0.0
Other taxes 0.0 0.0 0.3 0.4 0.3 0.4

Taxes collected 2019-2020
Payroll taxes 3.2 3.7 3.0 3.5 6.2 7.3
Tax at source 0.0 0.0 0.0 0.0 0.0 0.0
Sales VAT 14.1 12.4 5.5 8.3 19.5 20.7
VAT, purchases -10.0 -8.7 -1.8 -3.8 -11.7 -12.5
VAT, returns 0.0 0.0 0.0 0.0 0.0 0.0