Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Investor Presentation (February 2014)

50 slides from Sanoma Oyj's investor presentation, February 2014

  1. Slide 1: Sanoma Corporate Presentation February 2014

    Sanoma Corporate Presentation February 2014

  2. Slide 2: Market leader in chosen businesses and markets

    Market leader in chosen businesses and markets One of the leading media and Magazine publishing learning companies in Europe Newspaper publishing  #1 media company in Finland Learning Television the Netherlands and Finland Sweden Online operations  Among top 2 educational players Estonia Radio in

  3. Slide 3: 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

  4. Slide 4: Sanoma's starting point – consumer media

    Sanoma’s starting point – consumer media Strong position to drive multichannel transformation in Finland and the Netherlands  Finland and the Netherlands Finland Sanoma #1 in newspapers – Clear #1 in both advertising markets Yle #1 in magazines Alma Media #1 in online advertising – Strong assets in

  5. Slide 5: Sanoma's starting point – learning

    Sanoma’s starting point – learning At the forefront of transformation and well positioned to capture profitable growth #1 or #2 in all core markets Sanoma Pro Sanoma Utbildning Finland Sweden  ~35% market share in our footprint, the 750M€ Market position: #1 Market position: #2 K12* learning materi

  6. Slide 6: Sanoma Redesign

    Sanoma Redesign SAN OM CMecauteaelle|

  7. Slide 7: Trends in consumer media

    Trends in consumer media Technology and weak economy driving industry change Changes in consumer behaviour Increased supply of content to consumers  Shift to screen-based devices  Aggregation models for digital platforms  New usage behaviour and occasions  Social media  Social media and sharing

  8. Slide 8: Industry in transformation – consumer media 1/2

    Industry in transformation – consumer media 1/2 Shifts in time and money Time spent across media (Finland and the Netherlands) min/day 400 CAGR 300 Online +40% 200 Linear TV -1% 100 Magazines & -9% newspapers 0 2006 2008 2010 2012 Source: SPOT tijdsbestedings onderzoek; TNS Gallup; IAB Europe. Share

  9. Slide 9: Industry in transformation – consumer media 2/2

    Industry in transformation – consumer media 2/2 Consumer media by platform  Printed media in challenging structural position Circulation market volume development (indexed) 100 – Growth in engagement and proven transformation path to digitalisation in newspapers 80 60 – New business logics in digit

  10. Slide 10: Industry in transformation – learning

    Industry in transformation – learning Learning – K12* educational market  Content market shown predictable development EMEA education text book market – Global spending on education ~6% of GDP, and growing development – Print text book market in gradual decline whereas digital EMEA textbook market

  11. Slide 11: Sanoma's strategic choices

    Sanoma’s strategic choices Three criteria in redesigning Sanoma’s future business portfolio Improve business Reduce Restore balance mix complexity sheet health and investment capacity 11 February 2014 Corporate Presentation

  12. Slide 12: Sanoma's strategy

    Sanoma’s strategy At the core of our strategy is a renewal of our offering in consumer media and learning Strategic aspiration To be #1 in consumer media and learning in operating markets Strategic objectives Lead and grow strategic focus areas Transform and strengthen offering in the core Accelerat

  13. Slide 13: Key elements of Sanoma's strategy

    Key elements of Sanoma’s strategy Vision GET THE WORLD Strategic Win in two #1 consumer media company #1 learning company objectives segments in the Netherlands and Finland in all operating markets Lead and  Digitalise core brands to maintain #1 reach and  Expand from textbooks to services and sol

  14. Slide 14: Consumer media – speeding up transformation

    Consumer media – speeding up transformation Clarify portfolio and business focus, renew offerings, reduce costs, increase synergies and drive innovation Four consumer  Platforms – planning renewal of offering media platforms – TV, turnaround SBS and establish competitive digital offerings in non-li

  15. Slide 15: Learning operational model: from textbooks to solutions and services

    Basis for learning operational model Expanding from textbooks to providing solutions and services  Transform and strengthen the core Offering – Focus on expanding from publishing to providing solutions and services Emerging markets Current operating which enhance learning outcomes and teaching work

  16. Slide 16: Cost savings programme planned to be extended

    Cost savings programme planned to be extended Targeting to save in total EUR 100 million  Group-wide cost savings programme Plan for the remaining cost savings communicated in 2012 programme – Targeting EUR 60 million gross  Around EUR 83 million (gross) savings  Cost savings likely to result in

  17. Slide 17: 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/

  18. Slide 18: Digital consumer media portfolio

    Digital consumer media portfolio Sanoma Digital – Finland and the Netherlands Sanoma Digital unit will manage classifieds, Sanoma Baltics, Sanoma Finland and Sanoma Netherlands will manage digital digital content, and lead generation businesses assets of transformation businesses YIXX Sanoma Digital

  19. Slide 19: Environment & Outlook

    Environment & Outlook SAN OM CMecauteaelle|

  20. Slide 20: 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

  21. Slide 21: 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

  22. Slide 22: 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

  23. Slide 23: Group long-term financial targets

    Group long-term financial targets Published on 31 October 2013 Financial targets Net debt / EBITDA* <3.5 Equity ratio 35–45% Gearing <100% Dividend per share >50% of the earnings per share excl. non-recurring items * EBITDA is calculated based on 12-month rolling EBITDA excl. non-recurring items, wh

  24. Slide 24: Financials

    Financials SAN OM CMecauteaelle|

  25. Slide 25: 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

  26. Slide 26: 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

  27. Slide 27: 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

  28. Slide 28: 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

  29. Slide 29: 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

  30. Slide 30: 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

  31. Slide 31: 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

  32. Slide 32: Appendix 1: Sanoma's business units

    Appendix 1 Sanoma’s business units

  33. Slide 33: 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

  34. Slide 34: 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

  35. Slide 35: 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. 35 February 2014 Corporate Presentati

  36. Slide 36: 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. 36 February 2014 Corporat

  37. Slide 37: 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

  38. Slide 38: 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.

  39. Slide 39: 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

  40. Slide 40: 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. 40 February 2014 Corporate Presentation

  41. Slide 41: 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

  42. Slide 42: 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.

  43. Slide 43: 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. 43 February 2014 Corporate Presentation

  44. Slide 44: 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

  45. Slide 45: Appendix 2: About owners and coverage

    Appendix 2 About owners and coverage

  46. Slide 46: Appendix 2: About owners and coverage

    Appendix 2 About owners and coverage

  47. Slide 47: 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

  48. Slide 48: 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

  49. Slide 49: 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 49 February 2014 Corporate Presentation

  50. Slide 50: 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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