Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Q2 2016 Earnings Presentation

31 slides from Sanoma Oyj's earnings presentation, Jul 27, 2016

  1. Slide 1: Q2 2016 Interim Report

    Q2 2016 Interim Report Susan Duinhoven, President and CEO Kim Ignatius, CFO 27 July 2016

  2. Slide 2: Q2 2016 Highlights

    Q2 2016 Highlights Significant improvement in top – and bottom line  Strong development in operational performance in all businesses – Organic net sales growth +1.7% – Operational EBIT improved by +76% to EUR 86.9 million (49.4)  Refinancing and deleveraging progressing well  Improved outlook com

  3. Slide 3: Outlook Changed on Stronger H1 2016 Results

    H1 Operational EBIT, EUR million H1 / 2015 Outlook Changed on H1 / 2016 Stronger H1 2016 Results 33 37 30 30 New outlook for 2016: 20 In 2016, Sanoma expects that the Group’s consolidated  Net sales development adjusted for structural changes will improve from last -5 year (-3.4% in 2015). -8  The

  4. Slide 4: Media BeNe – Q2

    SBS share of viewing (20-54) Media BeNe – Q2 Market Viewing time, minutes/day Cross-media brands on track 21.9 % 20.2 % 107 99  Dutch Print & Online – solid net sales growth like-for-like – Higher sales leading to strong profit improvement Q2 2015 Q2 2016 – Benefits from cross-media brand offering

  5. Slide 5: Media Finland – Q2

    Advertising market share Media Finland – Q2 Strong improvement in 26.4 % 28.0 % performance continues  Advertising market share improved in a volatile market – Gains in TV and radio  2% growth in consumer revenues Q2 2015 Q2 2016 – Improving quality of subscription base, pricing optimisation and d

  6. Slide 6: Media Advertising Markets Showing Slight Improvement

    Media Advertising Markets Showing Slight Improvement Netherlands Q1/15 Q2/15 H1/15 Q1/16 Q2/16 H1/16 Magazines -15% -18% -17% -8% -7% -8% TV -4% -6% -5% +6% -2% +1% Online* +7% +6% +7% +8% +8% +8% Total market* +1% -2% +0% +4% +2% +3% Finland Q1/15 Q2/15 H1/15 Q1/16 Q2/16 H1/16 Newspapers -7% -7% -7

  7. Slide 7: Learning – Q2

    Non-print sales Learning – Q2 Share of rolling 12 month net sales Solid development including acquisition at the end of quarter  Q2 profitability impacted positively by: – Restructuring cost benefits – Time shift in costs between quarters Non-print – Change in amortisation schedule  Small bolt-on

  8. Slide 8: Sanoma Group

    Sanoma Group EUR million Operational EBIT-% Learning Q2/16 Q2/15 Net sales 449.8 468.8 Media BeNe Organic growth +1.7% -6.6% Media Finland Operational EBIT 86.9 49.4 Operational EBIT, EUR Last 12 months performance

  9. Slide 9: Financials

    Financials

  10. Slide 10: Income Statement

    Income Statement EUR million 4–6/2016 4–6/2015 1–6/2016 1–6/2015 1–12/2015 1–12/2014 Net sales 449.8 468.8 802.9 848.9 1,716.6 1,901.6 Operational EBITDA 153.0 123.2 226.4 175.1 389.3 392.0 of net sales 34.0% 26.3% 28.2% 20.6% 22.7% 20.6% Amortisations related to TV programme rights -45.8 -53.4 -97.

  11. Slide 11: Operational EBIT Development

    Operational EBIT Development H1 2016 EUR million 1–6/2016 1–6/2015 Media BeNe: + Cost efficiency + Print & Online business Group 88.8 29.6 - Lower TV viewing time in the Netherlands Media BeNe 37.0 32.9 - Lower TV advertising market share Media Finland 30.1 -4.6 Media + Tight cost control driven by

  12. Slide 12: Free Cash Flow

    Free Cash Flow Cash flow from operations less cash CAPEX Operational free cash flow EUR million 4–6/2016 4–6/2015 1–6/2016 1–6/2015 1–12/2015 1–6/2016 1–6/2015 1–12/2015 Operational EBITDA 153.0 123.2 226.4 175.1 389.3 226.4 175.1 389.3 TV programme costs -35.0 -44.6 -84.1 -91.0 -197.6 -84.1 -91.0 -

  13. Slide 13: Refinancing progressing as planned

    Refinancing progressing Maturity profile of as planned committed funding after the new issue and the tender offer  EUR 500 million Syndicated Revolving EUR million Credit Facility signed 8 February 2016 100  The EUR 200 million tender offer of the 81 existing bonds and new issue of EUR 200 245 50

  14. Slide 14: Capital Structure 30 June 2016

    Key figures Capital Structure 30 June 2016 1000 950 930 7 920 900 852 855 845 825 823 6 Net debt: EUR 855 million (Q2 2015: 930) 800 802 801  Net debt / EBITDA* adjusted 3.8 times (5.5) 5 700 – *EBITDA adjusted: 12-month rolling operational EBITDA, where acquired operations are included 600 4 and d

  15. Slide 15: Q&A

    Q&A

  16. Slide 16: Appendix

    Appendix

  17. Slide 17: Media BeNe – Key Financials in Q2/2016

    Key Financials in Q2/2016 Operational EBIT-% Media BeNe EUR million Learning Q2/16 Q2/15 Net sales 202.6 216.0 Media BeNe Organic growth +2.6% -5.5% Media Finland Operational EBIT 29.6 27.1  Reported net sales declined due to divestments  Organic sales growth driven by Dutch print & online brand p

  18. Slide 18: Media Finland – Key Financials in Q2/2016

    Key Financials in Q2/2016 Operational EBIT-% Media Finland EUR million Learning Q2/16 Q2/15 Net sales 150.1 145.7 Media BeNe Organic growth +2.2% -5.4% Media Finland Operational EBIT 19.0 -2.5  Net sales grew due to advertising market share gains, online and mobile sales as well as higher viewing s

  19. Slide 19: Learning – Key Financials in Q2/2016

    Key Financials in Q2/2016 Operational EBIT-% Learning EUR million Learning Q2/16 Q2/15 Q3/15-Q2/16 Net sales 97.1 97.9 Media BeNe Organic growth -0.9% -8.1% Media Finland Operational EBIT 41.1 32.5  Net sales: 4% growth in Western European footprint markets offset by market decline in Poland due to

  20. Slide 20: Summary of Operating Performance

    Summary of Operating Performance Last 12 months* – Non-print sales: EUR 600 million in Media Finland and Media BeNe Three Strategic Business Units TV & Radio Media Media Learning Other** Net sales EUR 350 million Finland BeNe Magazines Q3/2015-Q2/2016 Q3/2015-Q2/2016 Q3/2015-Q2/2016 Q3/2015-Q2/2016

  21. Slide 21: Consumer Confidence

    Consumer Confidence 30 15.2 20 10 0 -10 6.3 -20 -30 -40 Nov Nov Nov Nov Nov Mar May Jul Mar May Jul Mar May Jul Mar May Jul Mar May Jul Mar May Jan Sep Sep Sep Sep Sep Jan Jan Jan Jan Jan 2011 2012 2013 2014 2015 2016 Netherlands Finland Source: Eurostat 21 27 July 2016 Q2 2016 Result

  22. Slide 22: Sanoma's Key Strategic Priorities

    Sanoma’s Key Strategic Priorities Fulfil customer Utilise growth Accelerate Improve cash needs in selected and digital cost innovation conversion and media brands transformation deleverage our and domains opportunities business in Learning

  23. Slide 23: TV – Net Sales and EBIT Seasonality

    TV – Net Sales and EBIT Seasonality 2010–2015 average for Dutch and Finnish TV* Net sales split Operational EBIT split 5% 22% 29% 30% 44% 29% 20% 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes SBS Netherlands (excluding PPA amortisation) and Nelonen Media Finland. 23 27 July 2016 Q2 2016 Result

  24. Slide 24: Magazines – Net Sales and EBIT Seasonality

    Magazines – Net Sales and EBIT Seasonality 2010–2015 average for Dutch and Finnish Magazines* Net sales split Operational EBIT split 19% 23% 27% 29% 29% 26% 24% 23% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes Dutch and Finnish operations, excluding TV guides. 2010-2012 not restated with IFRS 11 ‘Joint Arrange

  25. Slide 25: Newspapers – Net Sales and EBIT Seasonality

    Newspapers – Net Sales and EBIT Seasonality 2010–2015 average for Newspapers (Finland) incl. digital business Net sales split Operational EBIT 25% 22% 26% 34% 16% 24% 25% 28% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 25 27 July 2016 Q2 2016 Result

  26. Slide 26: Learning – Net Sales and EBIT Seasonality

    Learning – Net Sales and EBIT Seasonality 2010–2015 average for Learning Net sales split Operational EBIT split in relative terms 11% 13% 41% 35% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 26 27 July 2016 Q2 2016 Result

  27. Slide 27: Sanoma – Largest Shareholders

    Sanoma – Largest Shareholders 30 June 2016 % of shares and votes 1. Jane and Aatos Erkko Foundation 24.46 24.5% 2. Antti Herlin 11.29 (Holding Manutas Oy: 11.27%, personal: 0.02%) 3. Robin Langenskiöld 7.54 4. Rafaela Seppälä 6.31 46.9% 5. Helsingin Sanomat Foundation 3.50 6. Ilmarinen Mutual Pensio

  28. Slide 28: Analyst Coverage

    Analyst Coverage Carnegie Handelsbanken Nordea Investment Bank Capital Markets Sami Sarkamies Matti Riikonen Rasmus Engberg tel. +358 9 165 59928 tel. +358 9 6187 1231 tel. +46 8 701 5116 Nordea.com/markets Carnegie.fi Handelsbanken.com/ capitalmarkets Pohjola Danske Markets Equities Kimmo Stenvall

  29. Slide 29: Sanoma's Investor Relations

    Sanoma’s Investor Relations Mr Pekka Rouhiainen tel. +358 40 739 5897 pekka.rouhiainen@sanoma.com 29 27 July 2016 Q2 2016 Result

  30. Slide 30: 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

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