Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Non-Deal Roadshow (August 2018)

43 slides from Sanoma Oyj's roadshow presentation, August 2018

  1. Slide 1: Building on our solid base for selective growth

    Roadshow presentation August-September 2018 Building on our solid base for selective growth

  2. Slide 2: Sanoma in brief

    Sanoma in brief

  3. Slide 3: Sanoma in 2017

    Sanoma in 2017 Media Finland Net sales 2017 EUR 571 million News TV/Radio 44% non-print Online & Mobile NET SALES 11.5% margin Magazines other EUR 1,327 million 0 100 200 300 Media Netherlands NON-PRINT SALES EUR 440 million Magazines 40% Online & Mobile 30% non-print Distribution OPERATIONAL EBIT M

  4. Slide 4: Media Finland: Continuing to strengthen our market position

    Media Finland: Continuing to strengthen our market position  Leading media company in Finland Net sales splits 2017  Information, experiences, inspiration and entertainment Other 9% Advertising through multiple media platforms: newspapers, TV, Single copy 8% radio, events, magazines, online and mo

  5. Slide 5: Media Netherlands: Focusing on profitability and cash flow generation

    Media Netherlands: Focusing on profitability and cash flow generation  Dutch consumer media operations and the press Net sales splits 2017 distribution business Aldipress  Leading cross media portfolio with strong brands and Other Advertising market positions in magazines, news, digital, events 19

  6. Slide 6: Learning: Creating a European Champion in Learning

    Learning: Creating a European Champion in Learning  Leading positions in countries with some of world’s best Net sales splits 2017 educational systems Sweden Poland  Solutions that drive higher learning outcomes, 7% Belgium engagement and efficiencies 16% 31% Print Non-print  Scalable technologie

  7. Slide 7: Strategy and financial targets

    Strategy and financial targets

  8. Slide 8: We are building on a solid base for selective growth

    We are building on a solid base for selective growth We have completed major portfolio Resulting in: changes  Solid profitability  Growing cash flow We continue to focus on our  Increasing dividends customers, profitability & cash flow…  Equity ratio and leverage within long-term target … and in

  9. Slide 9: Our major portfolio changes are now completed…

    Our major portfolio changes are now completed… De Boeck Scoupy BE NL Acquisitions Tutorhouse Kortingisleuk.nl Routa N.C.D. FI Scoupy FI FI NL 2016 2017 2018 AAC Global HeadOffice Sanoma SBS Women’s Divestments FI FI Baltics NL magazines BE Autotrader.nl Kieskeurig.nl NL NL Media Finland Media Nether

  10. Slide 10: …resulting in a more balanced business portfolio

    …resulting in a more balanced business portfolio  Higher share of more stable Group net sales by category subscription and learning sales 14% 14%  Lower exposure to more 10% 9% volatile advertising sales – Finland 75% of the Group’s Advertising 26% 36% advertising sales: MEUR 250 27% – The Netherl

  11. Slide 11: Our profitability has improved…

    Our profitability has improved…  Profitability continued to improve Around Operational EBIT in 2017 EUR million 13.6% 14% – Streamlined and more efficient 11.3% operations – Divestments of Dutch TV operations SBS and Belgian 7.4% women’s magazine portfolio 6.2% 4.8% – Cost innovations  Outlook for

  12. Slide 12: … and has a characteristic annual seasonality pattern

    … and has a characteristic annual seasonality pattern  Our quarterly financial performance is Operational EBIT EUR million strongly affected by the seasonal pattern of the Learning business: – Q1 and Q4 are typically loss-making, while most of net sales and earnings are accrued during Q2 and Q3  I

  13. Slide 13: Our leverage is at the long-term target level

    Our leverage is at the long-term target level (< 2.5 net debt/adj. EBITDA)  Our leverage has decreased rapidly: Net Net debt is improving EUR million debt / adjusted EBITDA from 3.6 at the end 7 of Q1 2017 to 2.0 at the end of Q1 2018 6 5  At the same time, net debt nearly halved to 4 EUR 439 mill

  14. Slide 14: We are targeting a higher cash conversion

    We are targeting a higher cash conversion Our mid-term cash conversion * Free cash flow is increasing target is 60-70% EUR million 150  In 2017, cash conversion approx. 50% 100 50 Assumptions for key cash flow elements for 2018 0  Profitability improvement  Lower net financing costs -50  Lower I

  15. Slide 15: We expect headroom for acquisitions to increase to EUR 300-400 million…

    We expect headroom for acquisitions to increase to EUR 300-400 million…  With our leverage at the target level (net debt / adj. EBITDA < 2.5), we estimate to have approx. EUR 300-400 million headroom for acquisitions in 2019, due to – Solid profitability – Improved free cash flow – Reduced leverage

  16. Slide 16: … with selective growth through M&A opportunities

    … with selective growth through M&A opportunities across all three businesses Three target areas  Core business in current footprint markets Learning  Adjacent business in current footprint markets  Synergistic  Core business outside current footprint markets bolt-on acquisitions  Organic Three

  17. Slide 17: We are fully committed to our dividend policy

    We are fully committed to our dividend policy Dividend policy: Progressive dividend EUR Sanoma aims to pay an increasing dividend, equal to 40–60% of annual cash flow from 0,80 operations, after capital expenditure. 0,60 When proposing a dividend to the AGM, the Board of 55% 0,40 60% Directors will

  18. Slide 18: We continue to focus on our role in society

    We continue to focus on our role in society Content Learning  Journalistic content supporting freedom of  Our modern learning methods supporting teachers speech and independent information gathering in developing the full potential of every pupil  Local entertainment contributing to shared  Help

  19. Slide 19: Q2

    Q2 2018

  20. Slide 20: Highlights of Q2 2018

    Highlights of Q2 2018 ’ Net sales Operational EBIT Operational EPS Free cash flow YTD M€ 363 M€ 80 € 0.33 M€ -43 (2017: 359) (2017: 73) (2017: 0.29) (2017: -54)  Strong growth in Learning with orders shifting from Q1 in the Netherlands and from Q3 in Belgium and Finland  Divestment of the Belgian

  21. Slide 21: Operational EBIT improved due to growth in Learning

    Operational EBIT improved due to growth in Learning  Operational EBIT of Media Finland declined Q2 2018 Operational EBIT by SBU EUR million – Lower print advertising sales – Print and pay TV subscription sales 19 decreased Media Finland 22 – The festival and events business N.C.D. Production had a

  22. Slide 22: Strong improvement in profitability due to Learning…

    Strong improvement in profitability due to Learning… Media + Acquired festival and events business Operational EBIT Q2 18 vs. Q2 17 by SBU Finland N.C.D. Production EUR million - Soft print advertising sales - Declining print subscriptions (magazines) 1 - Discontinuation of Liiga 80 Media + Lower fi

  23. Slide 23: Media Finland: Performance supported by festival and events business

    Media Finland: Performance supported by festival and events business  Net sales stable at EUR 146 million (2017: 145) Operational EBIT – Advertising sales as well as print and pay TV EUR million subscription sales decreased – Number of digital subscriptions grew significantly driven 15,5 % by HS an

  24. Slide 24: Media Netherlands: Solid profitability

    Media Netherlands: Solid profitability  Net sales declined to EUR 108 million (2017: 117) Operational EBIT EUR million – Stable circulation sales – Advertising sales declined inline with market with a 17,8 % 18,0 % further impact due to the divestment of the comparison 16,4 % 15,5 % site Kieskeurig

  25. Slide 25: Learning: Strong quarter supported by phasing of business

    Learning: Strong quarter supported by phasing of business  Net sales grew to EUR 108 million (2017: 98) Operational EBIT driven by EUR million 18,8 % 18,7 % – Traditional spring orders shifting from Q1 received 18,3 % 17,5 % 16,7 % during Q2 in the Netherlands 15,6 % 56 – Certain orders received al

  26. Slide 26: Free cash flow (12mr) continuing on a good level

    Free cash flow (12mr) continuing on a good level  Free cash flow improved by Free cash flow EUR 10 million in H1 18 due to EUR million + Lower net financial items 150 – Higher taxes as a result of real estate sale of Ludviginkatu in 100 Helsinki in Q4 2017  Divestment of Belgian women’s 50 magazin

  27. Slide 27: Net debt substantially lower vs. end of Q2 2017

    Net debt substantially lower vs. end of Q2 2017  At the end of Q2 2018 Net debt EUR million – Net debt to adjusted EBITDA at 2.1 (2017: 3.6) 7 – Net debt EUR 473 million (2017: 847) 6 – Equity ratio 36.6% (2017: 28.8) 3.6 5  Net financial items EUR -6 million (2017: -5) in 4 Q2 18 and EUR -9 milli

  28. Slide 28: Outlook for 2018

    Outlook for 2018 (unchanged) In 2018, Sanoma expects that the Group’s  Consolidated net sales adjusted for structural changes will be slightly below 2017  Operational EBIT margin will be around 14%. The outlook is based on an assumption of the consumer confidence and advertising markets in the Net

  29. Slide 29: Appendix

    Appendix

  30. Slide 30: We adapt to a rapidly changing media landscape

    We adapt to a rapidly changing media landscape Increasing time used on Video is used more Data is increasingly 1 2 3 media though mostly mobile and more important  Constant growth in time spent  Requires different ‘story telling’ utilizing  Recommendations increase expertise from our media portfo

  31. Slide 31: Sanoma in 2017

    Sanoma in 2017 Learning Net sales 2017 EUR 318 million Poland Netherlands 45% Finland Belgium NET SALES 17.5% Sweden EUR 1,327 million 0 50 100 Media Finland NON-PRINT SALES Newspaper EUR 571 million 40% TV/Radio 44% Online & Mobile Magazines OPERATIONAL EBIT MARGIN 11.5% other 13.6% 0 100 200 300 M

  32. Slide 32: Group key figures 2017

    Group key figures 2017 Adjusted for the SBS divestment EUR million 2017 2016 EUR 2017 2016 Net sales 1,328.0 1,322.3 Operational EPS, continuing 0.71 0.46 Operational EBITDA 328.5 299.0 operations margin 24.7% 22.6% Operational EPS * 0.74 0.47 Operational EBIT 186.4 149.6 EPS, continuing operations

  33. Slide 33: Media Finland: Quarterly key figures

    Media Finland: Quarterly key figures EUR million Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 146.2 137.0 150.4 131.3 144.5 144.1 Operational EBITDA 37.9 35.8 35.3 35.5 42.1 42.9 Operational EBIT 18.6 13.1 9.8 14.2 22.4 19.0 margin 12.7% 9.5% 6.5% 10.8% 15.5% 13.2% EBIT 20.5 11.6 8.2 13.5 30.5 19.6

  34. Slide 34: Media Netherlands: Quarterly key figures

    Media Netherlands: Quarterly key figures Q1-Q2 2017 adjusted for the SBS divestment EUR million Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 108.4 95.8 116.9 103.9 116.9 101.9 Operational EBITDA 20.9 16.3 21.9 16.0 22.9 16.4 Operational EBIT 19.5 14.9 19.2 14.0 20.8 14.2 margin 18.0% 15.5% 16.4% 13

  35. Slide 35: Learning: Quarterly key figures

    Learning: Quarterly key figures EUR million Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 108.3 28.9 38.5 145.7 97.9 36.2 Operational EBITDA 54.3 -7.3 -7.2 66.1 41.8 -0.7 Operational EBIT 43.7 -18.0 -21.6 56.1 31.9 -10.9 margin 40.3% -62.2% -56.0% 38.5% 32.6% -30.0% EBIT 42.2 -18.4 -23.7 56.2 22.8 -

  36. Slide 36: Largest shareholders

    Largest shareholders Largest shareholders Holding by category 2,7 % 30 June 2018 Number of shares 18,6 % 1. Jane and Aatos Erkko Foundation 39,820,286 24.4% 13,4 % 2. Antti Herlin 19,506,800 11.9% (Holding Manutas Oy: 11.91%, personal: 0.02%) 4,0 % 3. Robin Langenskiöld 12,273,371 7.5% 4. Rafaela Se

  37. Slide 37: Overall advertising market declined by 3% in Finland in Q2 2018

    Overall advertising market declined by 3% in Finland in Q2 2018 Finnish measured media advertising markets Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Remarks on Q2 18 development Newspapers -13% -12% -10% -12% -12%  Easter included in Q2 17 figures  Election advertising included in 2017 Magazines -10% -7% -1%

  38. Slide 38: We have a balanced debt portfolio and lower net financial expenses

    We have a balanced debt portfolio and lower net financial expenses  Next refinancing early 2019 for Debt structure Maturity profile EUR million, 30June 2018 EUR million, 30 Juner 2018 the EUR 300 million RCF  The EUR 200 million bond will 50 20 be repaid or refinanced Other loans depending on acqu

  39. Slide 39: Financial reporting in 2018

    Financial reporting in 2018 24 October Q3 2018 Interim Report Roadshow presentation 39 August-September 2018

  40. Slide 40: Analyst coverage

    Analyst coverage Carnegie Investment Bank Matti Riikonen +358 9 6187 1231 Danske Markets Equities Panu Laitinmäki +358 10 236 4867 Handelsbanken CM Rasmus Engberg +46 8 701 5116 Inderes Petri Aho +358 50 340 2986 Nordea Sami Sarkamies +358 9 165 59928 Pohjola Kimmo Stenvall +358 10 252 4561 SEB Ensk

  41. Slide 41: Adjustments and restatements

    Adjustments and restatements  All 2016-2017 figures presented in this presentation are for continuing operations only. – Sanoma announced on 16 January 2018 the intention to divest its Belgian women’s magazine portfolio. The divested business was consequently classified as Discontinued operations i

  42. Slide 42: Disclaimer

    Disclaimer 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 Sanoma

  43. Slide 43: Please contact our Investor Relations:

    Please contact our Investor Relations: Kaisa Uurasmaa, Head of IR & CSR M +358 40 560 5601 E kaisa.uurasmaa@sanoma.com ir@sanoma.com www.sanoma.com

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