Otava’s
Star Moments 2023

For more than 130 years, it has been Otava’s mission to nurture education and Finnish culture. In Otava’s early days, Finland had a strong need to disassociate itself from Russia and stand as an independent nation with its own language and culture.

Otava had a role to play in this. Finns became a nation of readers who appreciate literature.

We have now come full circle: Finland became a member of NATO in 2023. We are unequivocally part of the West and Western culture. Yet even in this new era, a small nation still needs to maintain a strong culture of its own.

Promoting children’s reading is one of the most important ways of influencing learning outcomes.

HENRIK EHRNROOTH

People in Finland are reading less, and children in particular are less passionate about reading. And yet Finland is increasing the value-added tax on books. In Norway, for example, books are completely VAT-free. Sweden also protects its language and culture by taxing books at a much lower rate than the general VAT rate.

The deterioration in PISA learning outcomes observed in Finland became a topic of public debate during 2023. They have declined rapidly, and there was a particularly large fall in schoolchildren’s reading skills. This is alarming: if students do not learn to read properly, they won’t be able to study other subjects either. Promoting children’s reading is one of the most important ways of influencing learning outcomes.

Highly trained teachers have long been one of Finland’s particular strengths. Although teacher education is still of a high standard, studies show that teachers have too little autonomy and cannot play a big enough role in teaching.

We at Otava have also been concerned about the decline in children’s enthusiasm for reading. We seized this topic already before the pandemic and we have taken a variety of measures to encourage children to read more.

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Meur

Otava’s net sales

In line with Otava’s mission, we are working to ensure that Finland will continue to be a nation of readers, and that we will be able to read Finnish books and magazines and study in Finnish.
And this mission has never been more topical than it is now.

As Alvar Renqvist said over a hundred years ago: “The awareness that, although our company is a regular limited company obligated to operate profitably for sustainable functioning, it is simultaneously in service of future purposes closely linked to the overall success of our nation. The consciousness has inspired everyone to work towards a common goal.“

I thank the entire personnel for their work towards the common cause!

Henrik Ehrnrooth
Chairman of the Board of Directors

2023 was a very successful year for Otava financially and better than forecast. We didn’t expect it to be an easy year, as both the market situation and our operating environment were challenging. The Finnish economy was in recession. Rising interest rates, inflation, a lack of consumer confidence and changes in consumer behaviour made the economic situation difficult to predict.

However, as a family business, Otava has a stable future and our success is in our hands.

Good results were generated through hard work in all business areas for which I would like to thank all of our personnel. General literature achieved a good result. Otava Learning has invested heavily in digitalisation with excellent results. Christmas, the biggest sales season for Suomalainen Kirjakauppa, went reasonably well and the company’s result improvement was significant. Otavamedia achieved a good result and media sales outperformed the market. A reduction in the volume of printed learning materials was reflected in Otava Book Printing’s result. For Otava’s success to continue, all of its business areas must be profitable.

At the turn of 2022–2023, Otava invested in a share of the e-book subscription service provider Storytel. Otava acquired an approximately 10 per cent holding in Enento Plc through acquisitions made in December 2023 and January 2024. Enento’s main line of business is providing credit information services in Nordic markets. A mandatory public purchase offer was made for Alma Media shares in the summer and Otava’s share of ownership rose to 31.18 percent.

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Otava’s EBITA

2023 was a breakthrough year for artificial intelligence in the public’s awareness. A number of our business areas have experimented with AI and personnel have received training on how to use it. We will be making increasing use of new technologies and gaining more digital expertise. We must examine the opportunities afforded by artificial intelligence with an open mind, and also weigh up its benefits in areas such as process streamlining. Although AI has already written books, it is unlikely to begin generating content.

In the autumn, we decided to move Otavamedia into Otava’s historic premises in Uudenmaankatu. This decision was enthusiastically received. Our shared premises will offer new opportunities for informal encounters and working together. Closer collaboration between business areas is also guaranteed.

Alexander Lindholm
CEO, Otava Ltd

Read more about Financial Statement:

Significantly improved result in book publishing

Otava’s book publishing business achieved a significantly better year-on-year result in 2023. Otava Publishing Company’s direct operating profit totalled EUR 10.4 (6.3) million. 

In general literature, net sales of printed books decreased on the previous year, while slight growth was seen in digital sales. People are now using their time in different ways, and we are not spending as much time reading printed books as we did during the pandemic years.

In 2023, more than half (692) of the books published by Otava’s publishing houses were in printed format, compared to 1,179 digital books. The growth in sales of e-book subscription services has levelled off in general literature. About half of net sales came from digital books. 

The Finlandia Prize for children’s and young people’s literature was won by Magdalena Hai with her book The Horned God. It is the chilling horror story of a teenage boy whose life is changed by a car accident. The Horned God also won the public vote. The musician and artist Herra Ylppö, who chose the winner, was particularly impressed by the book’s atmosphere and how well it sucks you into the story.

The quality of Otava’s publishing programmes was reflected in the Finlandia Awards: all of Otava’s publishing houses had titles nominated in every category. 

Niko Hallikainen won the Kalevi Jäntti Foundation’s literature prize for young writers with his novel Big Wet Secret.

The uncertain state of the world has created new demand for popular literature, which is very much in vogue globally. Readers are yearning for fun and laughter. Audio and eBook services have also introduced new readers to popular literature. Digital books have lowered the threshold for trying out a new title or genre. Series make ideal audiobooks, as an author’s entire oeuvre is easily accessible. Popular literature and thrillers are often streamed for many hours on end. After listening to the first part, it’s easy to stream the whole series.

The uncertain state of the world has created new demand for popular literature.

Appreciation for popular literature has also clearly risen compared to the 1980s. Although translations of foreign-language books have often sold better than domestic ones, the popularity of Finnish popular literature has risen in recent years.

 Romantasy is the biggest new phenomenon to appear in the book market for a long time. Thanks to readers and fans, a genre that once consisted of individual cult titles has now gained mainstream popularity and a rapidly growing readership, especially among young adults.

Romantasy is a type of escapist fiction that obeys the laws of romance and relationships, but has fantasy elements that enable more convoluted plot twists than in the real world. A strong fan culture, particularly on social media, is a big part of the romantasy phenomenon.

Otava Book Printing’s net sales and operating result decreased on the back of a fall in volumes.  Otava Book Printing produced 4.2 (5.1) million books in 2023. 

Digital sales drive growth for Otava Learning

2023 was an excellent year for Otava Learning financially. Both its net sales and direct operating result improved on the previous year.

Growth was generated by digital sales in particular. Year-on-year digital sales have increased in upper-secondary learning materials in particular, and already account for 80 per cent of upper-secondary school sales. Otava Learning has invested in digital skills and platforms, and this hard work is now paying off.

Learning materials have a huge social impact. This is something that Otava Learning has always communicated, but the responsible nature of our work is now being highlighted. Diversity, equality and inclusion are strongly reflected in the design of Otava’s learning materials. Our goal is for all types of learners to be able to identify with the characters they encounter in learning materials.

For example, the diversity concept in the new Skylight material for primary school English is expressed thought plots, characters and illustrations. One of the main characters has parents with different ethnic backgrounds, and another main character has a toy with one arm.

In autumn 2023, Otava Publishing Company and Otava Learning launched the national Tähtipöllö (Star Owl) reading competition for primary school classes.

Literacy, changes in reading habits among children and young people, and Finnish schools’ PISA results have been repeated topics of discussion in Finnish classrooms, homes and the media in recent years. In autumn 2023, Otava Publishing Company and Otava Learning launched the national Tähtipöllö (Star Owl) reading competition for primary school classes. This competition was a way of taking concrete action to encourage schoolchildren to read more and thereby improve their reading skills.

 The winning class read a total of 2,394,870 pages. The students who entered the competition read an amazing total of 18,338,041 pages. The Star Owl competition will be inspiring primary schoolchildren again soon when it returns in autumn 2024.

Location is increasingly important in the book trade

The book trade suffered from low consumer demand during 2023. Consumer confidence indicators remained extremely low in Finland and people were very unwilling to spend money. This also affected Suomalainen Kirjakauppa’s sales,and net sales decreased by three per cent on the previous year.

However, the year-on-year direct operating result improved significantly thanks to restructuring.

Although Suomalainen Kirjakauppa’s online sales increased considerably during the pandemic, post-pandemic consumption habits have changed and online sales have fallen. Areas with heavy pedestrian traffic are the best locations for stores. Major cities (such as Helsinki, Turku and Tampere), and especially shopping centres, are good locations for businesses. The Helsinki Airport store has also been reopened now that tourism has recovered. Customers in smaller municipalities have to travel longer distances to their nearest store, and are therefore thinking more carefully before heading to the shops.

Areas with heavy pedestrian traffic are the best locations for stores.

Suomalainen Kirjakauppa had 58 stores at the end of the year.

Sales of fiction increased in 2023, but demand for non-fiction fell. About fifty per cent of Suomalainen Kirjakauppa’s sales consisted of book products.

December is the most important season for bookstores and Christmas sales went fairly well in 2023, although a strike in the middle of the month affected people’s mobility and consequently also sales.

Providing personalised customer service is even more important during the Christmas season. Customers will be asking for more recommendations than usual, so sales personnel must be aware of the year’s bestsellers. In addition to giving recommendations in person, salespeople also insert recommendation slips into books and games. These slips provide good tips for customers while also saving time.

Collaboration yields good results at Otavamedia

Otavamedia performed well financially in 2023 in spite of the difficult market situation. The company’s direct operating profit totalled EUR 11.0 million.

A legislative amendment in early 2023 means that any magazine subscriptions sold over the phone must now be confirmed later in writing. This took a chunk out of consumer sales volumes. Initially, only 85 per cent of subscriptions were confirmed. The subscription process was significantly enhanced during the spring, which brought this figure up to 92 per cent.

Compared to 2022, online sales of subscriptions increased last year in terms of both monetary value and the number of subscriptions sold. This growth is due to successful collaboration between new online sales locations and our sales and editorial teams. A significant rise has been seen in digital subscriptions to Tekniikan Maailman in particular.

Media sales were good in spite of the falling market. They were on par with the previous year and Otavamedia clearly outperformed both the market and its competitors. Our efforts focused on direct sales of media space. Online media sales saw significant growth.

Traffic to Otavamedia’s website continued to grow in spite of the changes in Facebook’s algorithm. Our largest online service, Kotiliesi, experienced significant year-on-year growth in terms of both visitors (+21%) and page views (+27%). Seura is also preparing for its 90th anniversary, and generated over forty per cent more traffic than in the previous year. Otavamedia’s online media sales grew by 13 per cent in 2023.

Toukola by Kotiliesi is a new lifestyle media for homebodies that focuses on short videos. This joint project from our editorial and media sales teams was launched in late autumn.

Both the content and layout of Tekniikan Maailma were redesigned during the year. The TM mobile app was also launched in late 2023.

Both the content and layout of Tekniikan Maailma were redesigned during the year. The TM mobile app was also launched in late 2023. Tekniikan Maailma’s AI app, TM Tuuma, was launched in November 2023. You can ask Tuuma anything you like, and it will search Tekniikan Maailma articles for the answer to these questions.

In early autumn, Otava decided to centralise Otavamedia’s operations at Uudenmaankatu and the TM test laboratory in Pasila. Moving into new premises will not only save money, but will also present us with an opportunity to renew our workplace culture. Planning for the move was handled by the relocation advisory team, which consisted of employees working in a variety of roles and teams.

At the turn of the year, we launched a series of info sessions on the opportunities for harnessing AI and their practical implementation as part of the digital learning path.

All personnel were involved in putting Otavamedia’s strategy into practice via a series of workshops. Small groups considered the challenges faced by the different functions, as well as potential solutions for achieving targets. These workshops also discussed Otava’s Code of Conduct, and a Code of Conduct for Otavamedia was drawn up on the basis of discussions that were held in small groups.

     

We calculated our carbon footprint for the second time

In 2022, Otava carried out a large-scale update of its sustainability action to bring it in line with the new sustainability programme. The aim was to create a clear and well-organised package that supports Otava’s business through concrete action. Sustainability was reviewed both for the Otava Group as a whole and within individual business areas.  

2023 was the first full year of working with the new sustainability programme and its objectives.

Otava’s carbon footprint was calculated for the second time in spring 2023. In June 2023, Otava published its first Sustainability Report as part of its preparations for statutory sustainability reporting.   

The Otava Group’s star sustainability moments 2023

We calculated our carbon footprint for the second time.

In June 2023, we published the first Sustainability Report in the history of the Otava Group.

We carried out the double materiality analysis required by the CSRD Directive as part of our preparations for future sustainability reporting. We also conducted a CSRD and ESRS gap analysis, and assessed the taxonomy eligibility of our business operations. 

In late 2023, we joined the world’s largest corporate sustainability initiative, the UN Global Compact. Joining this network will support our sustainability efforts and further strengthen our commitment to sustainable business practices. 

Our businesses arranged a working capacity leadership package for their supervisors.

In 2023, our businesses also implemented concrete sustainability measures based on their own sustainability programmes.

Suomalainen Kirjakauppa:

Suomalainen Kirjakauppa reduced the number of products that had to be pulped by revising the removal process and launching cooperation with Finlandia Book with respect to products that were destined for pulping.

Suomalainen Kirjakauppa also piloted the recycling of new books in its stores. This trial is still ongoing.

Otava Book Printing:

Otava Book Printing was given the right to use the FSC label in late 2023. This label guarantees that the raw materials we use in our books are sustainably sourced. 

Otava Publishing Company:

Otava Learning launched its first sustainability programme and appointed an internal sustainability team to promote its objectives.

Otava Publishing Company, Otava Book Printing and the parent company conducted an employee survey on diversity, equality and inclusion. Based on the results of this survey, Otava Publishing Company and the parent company established a joint DEI team to promote these topics  within the workplace. 

Otavamedia:

Otavamedia enhanced its stakeholder collaboration by developing a workflow for conducting smooth partnership surveys.

A series of three workshops was organised for Otavamedia personnel to provide them with training on topics such as our Code of Conduct.

Study path provided tools for managing working capacity in daily life

Otava’s skilled and dedicated personnel are the most important factor in our success. We ensure the overall wellbeing of our employees, and create the framework for a supportive working environment that promotes equality and diversity. 

2023 was still coloured by the challenges that impacted our business.  Some companies had to make some necessary structural adjustments to ensure a good foundation for our collective success in the future. This would not have been possible without skilled and dedicated personnel who are able to adapt to change.

2023 also cemented a permanent change in the way we work – a change that had already been accelerated by the coronavirus pandemic. When multi-location work became a permanent part of daily life at Otava, we realised that we needed less office space. We have therefore given up our office in Tripla and the majority of Otava employees will now use our premises on Uudenmaankatu.

The themes covered by the study paths included working capacity management, leadership that supports mental wellbeing, and the effects of working incapacity on our business.

Promoting our employees’ personal development and education is important to us at Otava. We foster our employees’ competitiveness and labour market value by providing learning opportunities and encouraging personal competence development. Everyday learning and working with colleagues and partners both play a major role in this. Individual competence development is planned on the basis of each employee’s needs and goals. Development is supported and monitored through regular discussions that also provide an opportunity for making work more meaningful.

In 2023, all Otava companies launched study paths for their supervisors with the aim of strengthening their working capacity management skills and providing tools for managing working capacity in daily life and during changes at work.

The study paths consisted of joint coaching sessions interspaced with exercises done either alone or in small groups. The themes covered by the study paths included working capacity management, leadership that supports mental wellbeing, and the effects of working incapacity on our business. An e-learning course based on this training material is being planned for supervisors sometime in spring 2024. 

In spring 2023, Otavamedia personnel attended a series of three Pohjantähti strategy workshops. This package also covered Otava’s Code of Conduct, and example cases created by personnel were turned into a Code of Conduct for Otavamedia in the form of an e-learning course. Otavamedia employees on the digital learning path delved deeper into opportunities for harnessing artificial intelligence at work both through training and under the guidance of experts.

In 2023, Otava Publishing Company, Otava Ltd, and Suomalainen Kirjakauppa once again implemented a mentoring programme that focused on personal competence development and mutual knowledge sharing.