Isolation and a lack of face-to-face contact were still part of our daily lives in early 2022. Pandemic anxiety was reflected in consumer behaviour, which impacted our entire operating environment, and the retail trade and book business in particular.
Russia’s war of aggression, which began in February, reminded us Finns of our own history and the importance of culture, education and constitutional government. Finland grew into an independent state on the basis of Enlightenment ideals. These include constitutional government, liberal democracy and freedom of speech: all of the things that now distinguish Finland from Russia.
When Otava was established in 1890, Finland was still part of Russia. Our independence became a Western success story.
Finnish culture played a major role in this success – a culture that was, above all, built on books and information shared in the Finnish language.
With the outbreak of war in Ukraine, this historical context has become relevant again. Literacy and freedom of expression were key factors in the educational project that led to Finland’s independence.
Otava has played an important role in this project throughout its history, from education and a free critical press to edifying books.
Our educational mission has remained relevant over time, and literature, education and freedom of speech still form the core of Otava’s business. Responsibility is one of Otava’s values, which means that we take responsibility for promoting culture, growth and learning.
In autumn 2022, we were finally able to celebrate Otava’s 130th anniversary with a Group-wide event – albeit two years late due to coronavirus restrictions.
239.6
Otava’s net sales
Otava’s mission continues, even though our operating environment has not made things easy for us in recent years. We are building our future on a long-term basis – with an eye to the next 130 years.
One aspect of preparing for the future is the Shareholders’ Council, which was established at the beginning of 2023. Its task is to involve a younger generation of owners in Otava’s activities. The Shareholders’ Council aims to intensify dialogue and cooperation between the Group’s owners and personnel.
Working together will enhance our Group’s operations, and I hope that everyone will get actively involved in the discussions.
Henrik Ehrnrooth
Chairman of the Board of Directors
Although the coronavirus pandemic was still limiting everyday life in early 2022, restrictions could finally be lifted during the spring.
The world received a shock in February: Russia invaded Ukraine – an act that also constituted an attack on Western values and freedom of speech. In March, Otava and Suomalainen Kirjakauppa donated EUR 50,000 to the Finnish Red Cross to support victims of the war in Ukraine. Otava also published several books, the proceeds of which were used to support Ukraine.
A clear deterioration in the economic environment began after the summer, when interest rates started to rise and inflation had a significant impact on consumer demand. Otava’s result can be considered unsatisfactory. The company’s high equity ratio and excellent liquidity provide a good foundation for participating in any restructuring within the sector, and even for making major acquisitions.
The result for the book business was weakened by rising costs combined with increased digital investments and the difficulties experienced by bookstores. In terms of total sales, fiction rose and children’s and young adult books remained on par with the previous year, but there was a fall in printed non-fiction books and general literature. Although the digital market increased, growth slowed down noticeably compared to previous years.
Otava Learning invested heavily in the operational reliability of its digital services, as nearly 80 per cent of new sales to upper secondary schools are digital. Investments were also made in developing new teaching content.
Developments also continued at Otava Book Printing, and it achieved a slightly better operating result than in the previous year in spite of the difficult situation.
8.8
Otava’s EBITA
2022 was a particularly difficult year for the Trade business area. The lifting of coronavirus restrictions contributed to a significant decrease in demand for general literature. Consumer demand for educational materials declined as expected. The impacts of rising fuel prices were seen in rural areas and smaller towns. However, major centres continued to show faint signs of recovery from the pandemic.
The outlook for the Media business weakened towards the end of the year. In early 2022, consumer sales were almost at the same level as in 2021, while media sales were clearly ahead. During the autumn, subscription sales faced increasing challenges, media sales slowed down, and costs increased. However, media sales were more successful than the market in general, and digital media sales overtook print for the first time. Our sales and editorial teams engaged in closer cooperation, and our new operating methods were successful.
In order to bring Otava’s result back to the good level of previous years, we need to streamline our operations and develop new ways of working. Together, we can do this.
Alexander Lindholm
CEO, Otava Ltd