Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — FY2013 Earnings Presentation

43 slides from Sanoma Oyj's earnings presentation, Feb 7, 2014

  1. Slide 1: Full-Year Result 2013

    Full-Year Result 2013 Harri-Pekka Kaukonen, President and CEO Kim Ignatius, CFO 7 February 2014

  2. Slide 2: Q4 2013 – mixed picture

    Q4 2013 – mixed picture Online and mobile sales growing well while print markets in decline Q4 2013  Print advertising main driver for negative development, net sales -21%  Good quarter in online and mobile advertising, net sales +9%  Excellent development in consumer digital sales, net sales +37

  3. Slide 3: Sanoma Redesign – strategic update

    Sanoma Redesign – strategic update Concrete actions since the communication of Redesign on 31 October 2013 Strategic #1 consumer media company in the Netherlands and Finland objectives #1 learning company in all operating markets Lead and Consumer media (37% of net sales in new media in the NL and F

  4. Slide 4: Summary of operating performance FY 2013

    Summary of operating performance FY 2013 Three Strategic Business Units Sanoma Sanoma Sanoma Other Finland Netherlands Learning Sanoma Digital Sanoma Belgium Net sales EUR 100 million Four consumer media platforms Sanoma RU&CEE TV & radio* Net sales Other operations** EUR 330 million 1-12/2013 1-12/

  5. Slide 5: 2013 in brief – Consumer Media

    2013 in brief – Consumer Media New media (i.e. non-print) represents 37% of net sales in the Netherlands and Finland Netherlands (net sales EUR 706 million) Magazines Pure digital  Focus on 17 strong brands in five specific  Good momentum in digital business content domains: Women, Parenting,  Su

  6. Slide 6: 2013 in brief – Consumer Media

    2013 in brief – Consumer Media New media (i.e. non-print) represents 37% of net sales in the Netherlands and Finland Finland (net sales EUR 682 million) Magazines TV & Radio  Focus on two content domains: Women  Nelonen increased its national viewing share and Family  Pay-TV and Pay-VOD concept b

  7. Slide 7: 2013 – Digital highlights in Consumer Media

    2013 – Digital highlights in Consumer Media Success stories and evidence of transformation in the Netherlands and Finland Netherlands (incl. international Sanoma Digital unit)  Lindanieuws.nl - New version tripled monthly visitors to 1.2 million, advertising sales grew by more than +100%  Digital

  8. Slide 8: 2013 – Digital highlights in Consumer Media

    2013 – Digital highlights in Consumer Media Success stories and evidence of transformation in the Netherlands and Finland Finland  Online media market share close to 40%, grew by 5 %-points  Digital sales of Ilta-Sanomat grew by around 40% and Ilta-Sanomat overtook Iltalehti in visits market share

  9. Slide 9: 2013 in brief – Learning

    2013 in brief – Learning Market share gains and growth initiatives Learning (net sales EUR 305 million)  Market share gains in multiple countries  Exit from Hungary in October due to adverse market conditions  Five key countries to remain as core markets  YDP operating as global e-learning provi

  10. Slide 10: 2013 – Digital highlights in Learning

    2013 – Digital highlights in Learning 44% of net sales is digital/hybrid Digital highlights in Learning  14% growth in number of exercises made on Bingel.be compared to 2012; in November all time high number of 1,000,000 of exercise series made in one week  Number of exercises made on StudySteps t

  11. Slide 11: Market environment expected to remain weak in 2014

    Market environment expected to remain weak in 2014 Market environment Advertising market** Change in % vs. prior year Netherlands FY/2012 Q4/2013 FY/2013  Economy – subdued market conditions Magazines -12 -18 -17  Advertising – transformation from print to digital TV -6 +3 -2  Consumer behaviour

  12. Slide 12: Group outlook for 2014 and mid-term

    Group outlook for 2014 and mid-term Mid-term outlook introduced Main drivers for the 2014 EBIT outlook Outlook 2013 2014 Mid-term + EUR 100 million gross cost savings programme, actuals outlook outlook (2016->) will realise partly in 2014 Net sales EUR 2,218.7 million, ’Decline ’Return to - Underlyi

  13. Slide 13: Dividend per share EUR 0.10*

    Dividend per share EUR 0.10* In addition, proposal of the Board of Directors to the AGM of additional dividend of up to EUR 0.20 per share Dividend per share in relation to Earnings per Cash flow from operations > dividends paid share excl. non-recurring items, % 2.00 117 1.75 1.50 92 83 77 1.25 69

  14. Slide 14: Financials

    Financials SAN OM CMecauteaelle|

  15. Slide 15: Net sales split 2013

    Net sales split 2013 Consumer media Learning Netherlands and Finland 78% of net sales Diversified portfolio with five key markets 4% Netherlands 22% 10% 31% Poland 40% Netherlands 11% Finland Finland Belgium Other 18% Sweden 38% 27% Other Consumer media (NL and FIN) Learning 37% of net sales in new

  16. Slide 16: Income Statement

    Income Statement Restated* Restated* EUR million 10–12/2013 10–12/2012 1–12/2013 1–12/2012 Net sales 554.3 586.7 2,218.7 2,376.3 EBITDA excl. non-recurring items 106.0 113.8 461.4 518.1 of net sales 19.1% 19.4% 20.8% 21.8% Amortisations related to programme rights -65.6 -45.6 -186.5 -156.9 Amortisat

  17. Slide 17: Net sales development

    Net sales development Q4 2013 EUR million 10-12/2013 share of 10-12/2013 2013 organic (%) net sales organic growth growth 586.7 -17.1 Group -5.1 -6.6 -7.6 -3.1 -4.7 554.3 Media 70.2 -4.1 -7.1 News 18.0 -7.0 -6.9 Learning 5.8 -2.7 -0.6 Media: Print advertising explained more than three quarters of th

  18. Slide 18: EBIT excl. non-recurring items development

    EBIT excl. non-recurring items development Q4 2013 EUR million 31.8 -18.0 + One-off compensation + Internal cost allocation from Group regarding ICT system to segments + Cost savings + Non-core operations improved - Print advertising sales profitability due to cost savings -0.6 -2.8 +2.6 13.0 + Cost

  19. Slide 19: Free cash flow

    Free cash flow Cash flow from operations less cash CAPEX Restated* Restated* EUR million 10–12/2013 10–12/2012 1–12/2013 1–12/2012 EBITDA excl. non-recurring items 106.0 113.8 461.4 523.0 TV programme costs -54.2 -44.9 -202.4 -179.3 Prepublication costs -6.7 -5.9 -31.2 -28.2 Change in working capita

  20. Slide 20: Cost structure & savings programme

    Cost structure & savings programme Cost savings programme proceeding well  Gross margin increased vs. previous year Cost of sales split (EUR million) and Gross Margin  Fixed costs lower in absolute terms 1200 70% Other cost of sales 1000 60%  Spending on TV programmes increased 800 50% Purchased

  21. Slide 21: Capital structure

    Capital structure 31 December 2013  Net debt EUR 1,135 million (2012: 1,242) Net debt / EBITDA adjusted 4.6 4.3 – Net debt / EBITDA adjusted 4.6 times (3.6) 3.6 <3.5  EBITDA adjusted is calculated based on 12-month 2.8 rolling EBITDA excl. non-recurring items (continuing 2.5 2.0 operations), where

  22. Slide 22: Q&A

    Q&A

  23. Slide 23: Appendix: Sanoma's business units

    Appendix 1 Sanoma’s business units

  24. Slide 24: Advertising markets by category 2013 vs. 2012

    Advertising markets by category 2013 vs. 2012 Print advertising declining in most categories, mixed development in online and TV Finland* (net development, change in %) Print Online TV Food -20 30 -10 Motor vehicles -9 -3 4 Other classified -9 31 -> 955 Real estate -15 -2 -35 Retail -21 20 27 Medica

  25. Slide 25: Sanoma Media

    Sanoma Media Key figures EUR million FY 2013 10–12/13 7–9/13 4–6/13 1–3/13 FY 2012 10–12/12 7–9/12 4–6/12 1–3/12 Net sales 1,390.1 389.2 322.5 354.9 323.5 1,487.1 406.3 338.1 388.6 354.1 The Netherlands 705.8 199.3 164.7 184.6 157.2 760.4 207.2 173.5 208.1 171.6 Finland 293.4 82.6 67.5 73.7 69.6 301

  26. Slide 26: Media – net sales and EBIT excl. non-recurring items

    Media – net sales and EBIT excl. non-recurring items FY 2013 Net sales EUR million 1487.1 -56.4 -29.8  Print advertising explains almost entirely -10.8 1390.1 the decline in advertising sales – Magazine circulation not offset by price increases, decline arising from single copy sales  Operating pr

  27. Slide 27: TV – net sales and EBIT seasonality

    TV – net sales and EBIT seasonality 2010 - 2013 average for TV* Net sales split EBIT** split 8% 22% 29% 30% 43% 29% 20% 19% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes SBS Netherlands (excluding PPA amortization) and Nelonen Media Finland. **Excluding non-recurring items. 27 7 February 2014 Full-Year Result 2

  28. Slide 28: Magazines – net sales and EBIT seasonality

    Magazines – net sales and EBIT seasonality 2010 - 2013 average for Magazines* Net sales split EBIT** split 18% 27% 24% 31% 28% 25% 24% 23% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes Dutch, Finnish, Belgium and Russian operations, excluding TV guides. **Excluding non-recurring items. 28 7 February 2014 Full-Y

  29. Slide 29: Sanoma Media

    Sanoma Media Net sales EBIT excluding non-recurring items* EUR million EUR million 500 70 64 450 436 406 60 55 389 389 400 354 355 342338 50 47 350 324 311 323 40 38 300 280 32 29 250 30 27 25 23 24 23 200 20 150 10 100 -1 50 0 Q1 Q2 Q3 Q4 0 -10 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figur

  30. Slide 30: Sanoma News

    Sanoma News Key figures EUR million FY 2013 10–12/13 7–9/13 4–6/13 1–3/13 FY 2012 10–12/12 7–9/12 4–6/12 1–3/12 Net sales 393.5 100.0 92.6 99.8 101.0 422.8 107.6 98.3 106.8 110.0 Helsingin Sanomat 213.3 54.0 50.0 53.0 56.3 224.9 57.1 52.2 56.2 59.3 Ilta-Sanomat 85.6 22.3 20.7 22.7 20.0 84.3 21.1 20.

  31. Slide 31: News – net sales and EBIT excl. non-recurring items

    News – net sales and EBIT excl. non-recurring items FY 2013 Net sales EUR million 422.8 -29.2 -7.7 +7.6 393.5  Sales declined due to weak print advertising market  In Ilta-Sanomat digital advertising more than offset the decline in print business – digital represents more than half of total advert

  32. Slide 32: News – net sales and EBIT seasonality

    News – net sales and EBIT seasonality 2010-2013 average for News Net sales split EBIT* split 26% 25% 24% 29% 19% 24% 25% 28% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Excluding non-recurring items. 32 7 February 2014 Full-Year Result 2013

  33. Slide 33: Sanoma News

    Sanoma News Net sales EBIT excluding non-recurring items* EUR million EUR million 120 112 112 16 108110 107 108 14 101 103 100 100 98 14 13 100 93 12 12 80 10 10 10 9 9 8 8 60 8 6 6 6 5 40 4 20 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figures have been restated due to a cha

  34. Slide 34: Sanoma Learning

    Sanoma Learning Key figures EUR million FY 2013 10–12/13 7–9/13 4–6/13 1–3/13 FY 2012 10–12/12 7–9/12 4–6/12 1–3/12 Net sales 304.6 32.4 123.0 103.5 45.7 312.4 35.5 127.4 111.1 38.4 Learning 305.1 32.7 123.0 103.7 45.7 306.4 35.5 127.4 109.3 34.2 Other businesses 6.5 0.0 0.0 1.8 4.6 Eliminations -0.

  35. Slide 35: Learning – net sales and EBIT seasonality

    Learning – net sales and EBIT seasonality 2010-2013 average for learning* Net sales split EBIT** split in relative terms 12% 13% 34% 41% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes only learning business of the Learning segment. **Excluding non-recurring items. 35 7 February 2014 Full-Year Result 2013

  36. Slide 36: Sanoma Learning

    Sanoma Learning Net sales EBIT excluding non-recurring items* EUR million EUR million 140 60 127 123 47 49 50 50 120 111 110 43 104 40 36 97 31 100 30 80 20 60 10 44 46 38 39 36 0 40 32 -10 -6 -4 20 -20 -15 -20 -22 0 -30 -25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figures have b

  37. Slide 37: Seasonality between quarters visible in EBIT and cash flow

    Seasonality between quarters visible in EBIT and cash flow Net sales EBIT excl. non-recurring items Cash flow from operations (EUR million) (EUR million)* (EUR million)* 700 120 200 600 100 150 500 80 100 400 60 50 300 40 0 200 20 -50 100 0 0 -20 -100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 20

  38. Slide 38: Appendix: About owners and coverage

    Appendix 2 About owners and coverage

  39. Slide 39: Sanoma – largest shareholders

    Sanoma – largest shareholders % of shares 31 Jan 2014 and votes 1. Jane and Aatos Erkko Foundation 23.02 23% 2. Robin Langenskiöld 7.54 3. Rafaela Seppälä 6.31 4. Antti Herlin (Holding Manutas Oy: 4.98%, 6.10 Security Trading 1.11%, personal: 0.02%) 5. Helsingin Sanomat Foundation 3.50 6. Ilmarinen

  40. Slide 40: Analyst coverage

    Analyst coverage  Carnegie Investment  Evli Bank  Nordea  Pohjola Bank Mikko Ervasti Sami Sarkamies Kimmo Stenvall Matti Riikonen tel. +358 9 4766 9205 tel. +358 9 165 59928 tel. +358 10 252 4561 tel. +358 9 6187 1231 Evli.com Nordea.com/markets Pohjola.fi Carnegie.fi  Handelsbanken  Pareto Se

  41. Slide 41: Sanoma's IR team

    Sanoma’s IR team Mr Olli Turunen tel. +358 40 552 8907 olli.turunen@sanoma.com Ms Katariina Hed tel. +358 50 412 5120 katariina.hed@sanoma.com IR team’s joint email address: ir@sanoma.com 41 7 February 2014 Full-Year Result 2013

  42. Slide 42: Important notice

    Important notice The information above contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or future financial performance, including, but not limited to, expectations regarding market growth and development as well growth and profitability of

  43. Slide 43: sqnomd

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