Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Q1 2024 Earnings Presentation
31 slides from Sanoma Oyj's earnings presentation, May 8, 2024
Slide 1: Interim Report Q1 2024: Improved performance in a seasonally small quarter
Interim Report Q1 2024 Improved performance in a seasonally small quarter Rob Kolkman, President & CEO Alex Green, CFO
Slide 2: Q1 2024: Improved performance in a seasonally small quarter
Q1 2024 Improved performance in a seasonally small quarter Net sales Organic net sales Operational EBIT Free cash Net debt / growth excl. PPA flow Adj. EBITDA 221m€ 5% -24m€ -44m€ 2.9 (2023: 218) (2023: -1%) (2023: -31) (2023: -68) (2023: 3.2) ▪ Net sales grew in Learning mainly as a result of earli
Slide 3: Learning Q1 2024: Improved performance in a seasonally small quarter
LEARNING Q1 2024 Operational EBIT excl. PPA Improved performance in a m€ seasonally small quarter ▪ Net sales grew to 81m€ (2023: 76) – Growth in most markets with some earlier ordering 20.1 % most notably in the Netherlands and Belgium 18.7 % 19.3 % – Divestment of Stark had -4m€ impact (full year
Slide 4: Efficiency program Solar in Learning on track
Efficiency program Solar in Learning on track ▪ Program Solar, launched in October 2023, aims to operational efficiencies amounting to approx. 55m€ annual operational EBIT from Realisation of Solar initiatives 2026 onwards Run-rate of savings in 2026 Program streams touching our key operations acros
Slide 5: Media Finland: Digital growth and lower paper costs supported earnings
MEDIA FINLAND Q1 2024 Operational EBIT excl. PPA Digital growth and lower paper m€ costs supported earnings ▪ Net sales amounted to 140m€ (2023: 142) – Advertising sales were stable as growth in digital compensated for the decline in print 11.2 % – Subscription sales grew driven by good development
Slide 6: Outlook for 2024 (unchanged)
Outlook for 2024 (unchanged) ▪ In 2024, Sanoma expects that the Group’s reported net sales will be 1.29‒1.34bn€ (2023: 1.4) ▪ The Group’s operational EBIT excluding PPA is expected to be 160‒180m€ (2023: 175) ▪ Regarding the operating environment Sanoma expects that: – The advertising market in Finl
Slide 7: Financials
Financials
Slide 8: Operational EBIT improved, although seasonally negative
Q1 2024 Operational EBIT excl. PPA Q1 2024 vs. Q1 2023 Operational EBIT improved, m€ although seasonally negative Learning + Higher net sales driven by earlier ordering + Active cost management + Lower paper and printing costs Media + Lower paper costs driven by both price and Finland volume develop
Slide 9: Improvement in operational and reported earnings
Improvement in operational Key income statement related items Q1 2024 and reported earnings ▪ IACs were positive at 2m€ (2023: -2) and consisted of m€ Q1 2024 Q1 2023 – Capital gain related to the Netwheels divestment Operational EBIT excl. PPA -23.7 -30.7 IACs 1.5 -2.4 – M&A integration costs PPAs
Slide 10: Leverage improved year-on-year
Leverage improved Net debt m€ year-on-year ▪ Net debt at 694m€ clearly lower year-on-year, Long-term 3.2 3.3 3.2 3.2 3.3 target although increased from year-end 2023 due to its <3.0 2.9 2.8 2.8 seasonal pattern 2.6 – Net debt / Adj. EBITDA improved to 2.9 (2023: 3.2) – Equity ratio at 42.0% (2023: 4
Slide 11: Free cash flow improved due to active working capital management
Free cash flow improved due Free cash flow m€ to active working capital management 200 ▪ Free cash flow improved to -44m€ (2023: -68) although being seasonally negative 150 + Higher operational results + Active working capital management 100 + Lower investments ‒ Higher interests paid 50 0 ➢ FY 2024
Slide 12: Q&A
Q&A Q&A
Slide 13: Financial reporting in 2024
Financial reporting in 2024 Half-Year Report 2024 24 July Interim Report Q3 2024 31 October 13 Interim Report Q1 2024
Slide 14: Appendix
Appendix
Slide 15: Sanoma in 2023
Sanoma in 2023 Learning Media Finland Net sales 795m€ Net sales 598m€ NET SALES Non-print 48% Non-print 54% 1,393m€ Margin 18.7% Margin 6.7% NON-PRINT SALES 51% Net sales, m€ Net sales, m€ Netherlands Subscription OPERATIONAL EBIT MARGIN Spain 12.6% Non-print advertising Poland Italy Print advertisi
Slide 16: Group key figures Q1 2024
Group key figures Q1 2024 m€ Q1 2024 Q1 2023 Q1 2024 Q1 2023 Net sales 220.9 217.8 Average number of employees (FTE) 4,834 5,054 Operational EBITDA 21.2 11.7 Number of employees at the end of 4,817 5,070 margin 9.6% 5.4% the period (FTE) Operational EBIT excl. PPA -23.7 -30.7 margin -10.7% -14.1% EB
Slide 17: Learning: Quarterly key figures
Learning: Quarterly key figures m€ Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Net sales 81.1 100.4 430.4 188.0 76.3 Operational EBITDA -5.2 -5.5 186.4 69.5 -12.9 Operational EBIT excl. PPA -27.6 -30.6 164.3 48.3 -33.5 margin -34.0% -30.5% 38.2% 25.7% -43.9% IACs -3.4 -12.2 -23.2 -5.9 -2.0 PPAs -7.6 -8.2 -8.7 -9.
Slide 18: Media Finland: Quarterly key figures
Media Finland: Quarterly key figures m€ Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Net sales 139.9 153.1 149.9 153.4 141.5 Operational EBITDA 29.9 38.6 35.9 31.3 26.6 Operational EBIT excl. PPA 7.7 9.2 16.8 8.7 5.1 margin 5.5% 6.0% 11.2% 5.7% 3.6% IACs 4.4 -2.3 -0.5 -36.5 -1.9 PPAs -1.6 -1.8 -1.6 -1.7 -1.7 EBIT
Slide 19: Finnish advertising market development
Finnish advertising market development Finnish measured media advertising markets Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Newspapers -20% -13% -14% -11% -7% Magazines -12% -14% -17% -22% -6% TV 3% -6% -5% -4% -1% Radio -4% -4% 0% -8% 5% Online (excl. search and social media) -2% -1% -2% -4% 0% Total market -6
Slide 20: Learning's profitability to reach its long-term target of 23% in 2026 through program Solar
Learning’s profitability to reach its long-term target of 23% in 2026 through program Solar ▪ Program “Solar” aims to streamline Learning operations and processes – Brings full benefits from the increased scale of the Learning business Full margin potential will be ▪ Operational efficiencies amounti
Slide 21: Learning content sales vary driven by curriculum renewals in our major operating countries
Learning content sales vary driven by curriculum Learning renewals in our major operating countries content 74% of net sales ▪ Expected development of learning K12 publishing market values in Sanoma’s key in 2023 content sales in 2024−2026 is a operating countries indexed to 2020 function of changes
Slide 22: Estimated amortisations of acquired intangible assets (PPA) of the Group
Estimated amortisations of acquired intangible assets (PPA) of the Group ▪ Acquired subsidiaries are consolidated using the Estimated amortisations of acquired intangible assets (PPA) 2023−2027 acquisition method, whereby the cost is allocated m€ to the acquired assets and liabilities assumed at the
Slide 23: Group debt portfolio Q1 2024
Group debt portfolio Q1 2024 External debt structure 1) Maturity profile 2024–2026 m€, 31 March 2024 m€, 31 March 2024 800 109 600 100 400 200 249 558m€ 1) 100 200 300 100 50 0 100 2024 2025 2026 Term Loan 2020 RCF (fully unused) Term Loan 2022 Term Loan 2020 Term Loan 2023 Commercial papers Term Lo
Slide 24: 150m€ hybrid bond was issued in March
150m€ hybrid bond was issued in March ▪ The bond seen as the best way to strengthen the balance sheet and to increase financial flexibility that supports the execution of the strategic plan at all times ▪ With the learning business being an increasing part of Sanoma, its annual cyclicality relating
Slide 25: Key factors influencing 2024 performance
Key factors influencing 2024 performance Expected 2024 Long-term targets Learning financial impact y-o-y for SBUs unchanged ▪ Comparable net sales impacted by ▪ Organic growth − Lower cycle in Spain mitigated by growth in other learning content businesses ▪ Lower reported net 2−5% − Discontinuation
Slide 26: Three strategic focus areas to deliver increasing profitability and prepare for future growth
Three strategic focus areas to deliver increasing profitability and prepare for future growth Mid-term focus areas 1. Increasing profitability of Learning and Media Finland Our purpose Through learning and media, we have 2. Growing organically and through smaller in-market acquisitions a positive im
Slide 27: 2030 growth ambition and long-term financial targets unchanged
2030 growth ambition and long-term financial targets unchanged ▪ We are aiming for the Group’s net sales to be over 2bn€ by 2030, with at least 75% coming from the learning business – Over the cycle, organic growth in-line with long-term targets in Learning and Media Finland – In Learning, focus on
Slide 28: Largest shareholders
Largest shareholders 31 March 2024 Largest shareholders Holding by sector Number of % of Shareholders shares shares 1. Jane and Aatos Erkko Foundation 39,820,286 24.35 3% 12% 2. Holding Manutas Oy 21,870,000 13.37 Private companies 3. Langenskiöld Robin 12,273,371 7.50 17% 4. Seppälä Rafaela 7,654,7
Slide 29: Analyst coverage
Analyst coverage Carnegie Investment Bank Pia Rosqvist-Heinsalmi +358 9 6187 1232 Danske Markets Equities Sami Sarkamies +358 10 546 8468 Inderes Petri Gostowski +358 40 821 5982 Kepler Cheuvreux Kristoffer Carleskär +44 207 621 5149 Nordea Sanna Perälä +358 40 779 0845 OP Corporate Bank Kimmo Stenv
Slide 30: 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
Slide 31: Please contact our Investor Relations
Please contact our Investor Relations: Kaisa Uurasmaa, Head of IR & Sustainability +358 40 560 5601 | kaisa.uurasmaa@sanoma.com ir@sanoma.com | www.sanoma.com