Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — FY2018 Earnings Presentation

34 slides from Sanoma Oyj's earnings presentation, February 2019

  1. Slide 1: Full-Year 2018 Result: Improved operational EBIT across all SBUs

    Full-Year 2018 Result: Improved operational EBIT across all SBUs Susan Duinhoven, President & CEO Markus Holm, CFO & COO

  2. Slide 2: Highlights of FY 2018

    Highlights of FY 2018 ’ Net sales Operational EBIT Operational EBIT Operational EPS Free cash flow margin M€ 1,315 M€ 197 14.9% € 0.83 M€ 109 (2017: 1,328) (2017: 179) (2017: 13.5 %) (2017: 0.71) (2017: 106)  Operational EBIT improved in all SBUs  Free cash flow excl. one-off costs related to the

  3. Slide 3: Operational EBIT improved in all SBUs

    Operational EBIT improved in all SBUs  Learning Operational EBIT by SBU in 2018 EUR million – Finland continued to perform well in the curriculum change 61 – Successful start of the business Learning 56 development programme “High Five”  Media Finland 69 Media Finland – Lower amortisations of 66 T

  4. Slide 4: Learning: Strong performance especially in Finland and in Poland

    Learning: Strong performance especially in Finland and in Poland…  Net sales stable at EUR 313 million Net sales by country Strong growth in use of Sanoma (2017: 318) Pro digital learning environments  In Finland, net sales grew driven by 7% 7% in Finland curriculum renewal completed at the 16% 17

  5. Slide 5: Learning: with clearly improved earnings

    Learning: … with clearly improved earnings  Operational EBIT improved to EUR 61 million Operational EBIT (2017: 56) in 2018 EUR million – Margin 19.5% (2017: 17.5%) 18.8 % 18.3 % 18.7 % 18.4 % 19.5 % 16.7 % 17.5 %  Benefits of the launch of the business development 15.6 % 56 programme “High Five”

  6. Slide 6: Media Finland: Growth in digital subscriptions continued

    Media Finland: Growth in digital subscriptions continued…  FY net sales stable at EUR 579 Net sales by category million (2017: 570)  Digital subscription sales of Ruutu 9% 14% and HS continued to grow Total number of 8% subscriptions  Total number of HS subscriptions 8% continued to grow for the

  7. Slide 7: Advertising market continued to be under pressure

    ..while advertising market continued to be under pressure… Finnish measured media advertising markets FY 18 Q4 18 Q3 18 Q2 18 Q1 18 FY 17 Newspapers -11% -12% -8% -13% -12% -11% Online Magazines -5% -2% -3% -10% -7% -6% incl. search and social media TV 0% -1% 1% 1% 1% -5% Radio 4% 4% 2% 11% -4% 4% +

  8. Slide 8: Media Finland: yet earnings improved still slightly

    Media Finland: …yet earnings improved still slightly  Operational EBIT was EUR 69 million (2017: 66) for 2018 Operational EBIT EUR million – Margin 11.9% (2017: 11.5%) – Lower level of amortizations of TV programme rights, 15.5 % including the EUR 6 million impact of the discontinuation 14.0 % 13.2

  9. Slide 9: Media Netherlands: Focusing on our core businesses continued

    Media Netherlands: Focusing on our core businesses continued…  Net sales amounted to EUR 424 million (2017: 440) Net sales by category in 2018 Highlights of 2018  Stable circulation sales overall – Growth in several magazine titles, such as Donald Duck and vtwonen 29% 11% Net sales + Print  Compa

  10. Slide 10: Media Netherlands: earnings improved as complexity reduced

    Media Netherlands: … and earnings improved as complexity reduced  Operational EBIT improved clearly to Operational EBIT EUR 77 million (2017: 68) for 2018 EUR million 20.8 % – Margin 18.1% (2017: 15.5%) 18.0 % 17.5 % 17.8 % 24  Lower personnel, marketing and other fixed 16.4 % 15.5 % expenses as a

  11. Slide 11: The Board proposes a dividend of EUR 0.45

    The Board proposes a dividend of EUR 0.45 Dividend  The Board proposes a dividend of EUR 0.45 per Dividend per share growth yoy share to be paid for 2018 EUR +29% – Increase of 29% vs. 2017 – Representing a total of approx. EUR 73 million  58% of free cash flow (excl. one-off costs related to 60%

  12. Slide 12: Outlook for 2019

    Outlook for 2019 In 2019, Sanoma expects that the Group’s  Comparable net sales will be in-line with 2018  Operational EBIT margin excl. PPA * will be around 15% (2018: 15.7%). The outlook is based on an assumption of the consumer confidence and advertising market development in Finland and in the

  13. Slide 13: Financials

    Financials

  14. Slide 14: Profitability improved in all SBUs in Q4 2018

    Profitability improved in all SBUs in Q4 2018 Learning + Benefits of High Five business development programme Operational EBIT Q4 2018 vs. Q4 2017 EUR million + Net sales growth + Release of a provision related to a legal case in Belgium -1 - Other costs 5 18 Media + Lower TV program amortisations F

  15. Slide 15: Annual free cash flow improved slightly

    Annual free cash flow improved slightly  Free cash flow improved to Free cash flow EUR 109 million (2017: 106) EUR million + Lower TV programming spend 150 + Lower net financial items – Higher taxes 100 – One-off restructuring costs of EUR 17 million related to the 50 divested Belgian women’s magaz

  16. Slide 16: Leverage improvement continued

    Leverage improvement continued At the end of 2018 Net debt EUR million  Net debt to adjusted EBITDA 1.4 (2017: 1.7) 4  Net debt EUR 338 million (2017: 392)  Equity ratio 44.7% (2017: 38.2%) 3  Net financial items decreased to EUR -17 million (2017: -23) due to the lower amount of interest- 1.4 2

  17. Slide 17: New debt facility extends the maturity profile

    New debt facility extends the maturity profile  Gross external debt EUR 357 million (2017: 412) at the end of 2018 Debt structure Maturity profile EUR million, 31 December 2018 EUR million, 6 February 2019  On 4 February Sanoma signed a new EUR 550 million syndicated facility agreement with nine b

  18. Slide 18: Financial reporting in 2019

    Financial reporting in 2019 Week 10 Financial Statements and Directors’ Report 2018 27 March Annual General Meeting 30 April Interim Report Q1 2019 25 July Half-Year Report 2019 25 October Interim Report Q3 2019 18 Full-Year 2018 Result

  19. Slide 19: Q&A

    Q&A

  20. Slide 20: Appendix

    Mr. President, welcome to the land of free press, sanoma

  21. Slide 21: Sanoma in 2018

    Sanoma in 2018 Learning Net sales 2018 EUR 313 million Poland Netherlands 46% Finland Belgium NET SALES 19.5% Sweden EUR 1,315 million 0 50 100 Media Finland NON-PRINT SALES Newspaper EUR 579 million 45% Online & Mobile 49% TV/Radio Magazines OPERATIONAL EBIT MARGIN 11.9% other 14.9% 0 100 200 Media

  22. Slide 22: Group key figures 2018

    Group key figures 2018 2017 adjusted for the SBS divestment EUR million 2018 2017 EUR 2018 2017 Net sales 1,315.4 1,328.0 Operational EPS, continuing 0.83 0.71 Operational EBITDA 326.3 328.5 operations margin 24.8% 24.7% Operational EPS 1 0.84 0.74 Operational EBIT 196.6 179.0 EPS, continuing operat

  23. Slide 23: Amortisations and depreciations included in Operational EBIT

    Amortisations and depreciations included in Operational EBIT EUR million 2018 2017 Change Net sales 1,315.4 1,328.0 -1% Operational EBITDA 326.3 328.5 -1% margin 24.8% 24.7% Amortisations related to TV programme rights -56.6 -69.9 -19% Amortisations related to prepublication rights -23.3 -22.6 3% Ot

  24. Slide 24: Learning: Quarterly key figures

    Learning: Quarterly key figures EUR million FY 18 FY 17 Q4 18 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 313.3 318.3 39.8 136.3 108.3 28.9 38.5 145.7 97.9 36.2 Operational EBITDA 105.2 100.0 -6.0 64.2 54.3 -7.3 -7.2 66.1 41.8 -0.7 Operational EBIT 61.2 55.6 -17.8 53.4 43.7 -18.0 -21.6 56.1

  25. Slide 25: Media Finland: Quarterly key figures

    Media Finland: Quarterly key figures EUR million FY 18 FY 17 Q4 18 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 578.5 570.4 144.5 150.7 146.2 137.0 150.4 131.3 144.5 144.1 Operational EBITDA 142.8 155.7 35.4 33.7 37.9 35.8 35.3 35.5 42.1 42.9 Operational EBIT 68.8 65.5 16.0 21.2 18.6 13.1 9.8

  26. Slide 26: Media Netherlands: Quarterly key figures

    Media Netherlands: Quarterly key figures Q1-Q3 2017 adjusted for the SBS divestment EUR million FY 18 FY 17 Q4 18 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 424.0 439.6 113.8 106.0 108.4 95.8 116.9 103.9 116.9 101.9 Operational EBITDA 81.7 77.2 24.7 19.7 20.9 16.3 21.9 16.0 22.9 16.4 Operat

  27. Slide 27: Group Operational EBIT excl. PPA

    Group Operational EBIT excl. PPA Quarterly comparison figures for 2018 EUR million FY 18 Q4 18 Q3 18 Q2 18 Q1 18 EBIT 168.5 0.6 88.9 70.6 8.4 Items affecting comparability (IACs) -28.2 -17.0 -2.1 -9.2 0.2 Operational EBIT 196.6 17.6 91.0 79.8 8.2 margin 14.9% 5.9% 23.2% 22.0% 3.1% Purchase price all

  28. Slide 28: Operational EBIT excl. PPA by SBU 1/2

    Operational EBIT excl. PPA by SBU 1/2 Quarterly comparison figures for 2018 Learning EUR million FY 18 Q4 18 Q3 18 Q2 18 Q1 18 EBIT 56.1 -20.0 52.1 42.4 -18.4 Items affecting comparability (IACs) -5.1 -2.2 -1.3 -1.3 -0.4 Operational EBIT 61.2 -17.8 53.4 43.7 -18.0 Purchase price allocation amortisat

  29. Slide 29: Operational EBIT excl. PPA by SBU 2/2

    Operational EBIT excl. PPA by SBU 2/2 Quarterly comparison figures for 2018 Media Netherlands EUR million FY 18 Q4 18 Q3 18 Q2 18 Q1 18 EBIT 58.0 13.4 19.1 8.7 16.9 Items affecting comparability (IACs) -18.5 -10.3 0.5 -10.8 2.0 Operational EBIT 76.6 23.7 18.6 19.5 14.9 Purchase price allocation amor

  30. Slide 30: Simulation of preliminary impacts on key ratios

    Adoption of IFRS 16 as of 1 January 2019: Simulation of preliminary impacts on key ratios  Sanoma will adopt the new IFRS 16  As reported in the Q3 2018 Interim Report, significant impacts on Leases standard as of 1 Jan 2019 certain key ratios are expected – Lease agreements will be recognised  B

  31. Slide 31: Largest shareholders

    Largest shareholders Largest shareholders Holding by category 31 December 2018 Number of shares 2.6 % 1. Jane and Aatos Erkko Foundation 39,820,286 24.4% 18.5 % 14.0 % 2. Antti Herlin 19,506,800 11.9% (Holding Manutas Oy: 11.91%, personal: 0.02%) 3. Robin Langenskiöld 12,273,371 7.5% 4. Rafaela Sepp

  32. Slide 32: 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 Kepler Cheuvreux Stefan Billing +46 8 723 51 48 Nordea Sami Sarkamies +358 9 165 59928

  33. Slide 33: 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

  34. Slide 34: 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

Sanoma — FY2018 Earnings Presentation on 6ix