Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Non-Deal Roadshow (June 2018)

42 slides from Sanoma Oyj's roadshow presentation, June 2018

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

    Roadshow presentation June 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

    Net sales Operational EBIT Media Finland  Leading media company in Finland M€ 571 M€ 66  Information, experiences, inspiration and entertainment through multiple media platforms: newspapers, TV, radio, (2016: 581) (2016: 50) events, magazines, online and mobile channels  Reaching 95% of all Finns

  5. Slide 5: Media Netherlands

    Net sales Operational EBIT Media Netherlands  Dutch consumer media operations and the press M€ 440 M€ 68  distribution business Aldipress Leading cross media portfolio with strong brands and (2016: 459) (2016: 67) market positions in magazines, news, digital, events and e-commerce  Content and cu

  6. Slide 6: Learning

    Net sales Operational EBIT Learning  Leading positions in countries with some of world’s best M€ 318 M€ 56  educational systems Solutions that drive higher learning outcomes, engagement and efficiencies (2016: 283) (2016: 57)  Scalable technologies to support leadership in the digital transformat

  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: 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: 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: Selective growth through M&A opportunities across all three businesses

    … 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: Q1

    Q1 2018

  20. Slide 20: Highlights Q1 2018

    Highlights Q1 2018 ’ Net sales Operational EBIT Operational EPS Free cash flow M€ 262 M€ 8 € 0.02 M€ -44 (2017: 282) (2017: 20) (2017: 0.06) (2017: -47)  Outlook for 2018 unchanged  The pattern of our business and financial performance will be different in 2018 vs. 2017 with more emphasis on the s

  21. Slide 21: Earnings developed in line with net sales

    Earnings developed in line with net sales  Operational EBIT of Media Finland Q1 2018 Operational EBIT by SBU declined following lower net sales EUR million – Q1 2017 included an EUR 4 million 13 positive one-off correction to earlier Media Finland accounting (* in the graph) 15 4*  Operational EBI

  22. Slide 22: EBIT development by SBU in Q1 2018

    EBIT development by SBU in Q1 2018 Media Finland - One-off correction of EUR 4 million included in Q1 2017 Operational EBIT Operational EBIT Q1 18 vs. Q1 17 by SBU - Soft advertising sales, in line with market EUR million + Ruutu+ performed well Media + Lower personnel costs due to streamlined Nethe

  23. Slide 23: Media Finland: Strengthening the events business

    Media Finland: Strengthening the events business  Net sales declined to EUR 137 million (2017: 144, incl. EUR 3 million one-off correction) Operational EBIT EUR million – Advertising sales followed the slightly declining market development 15.5 % – Subscription sales stable 13.2 % – Ruutu+ subscrip

  24. Slide 24: Media Netherlands: Earnings improved

    Media Netherlands: Earnings improved  Net sales declined to EUR 96 million (2017: 102) Operational EBIT EUR million – Stable circulation sales – Advertising sales declined due to the divestment of 17.8 % Kieskeurig.nl in Q2 2017 and soft market momentum 16.4 % 15.5 %  Operational EBIT improved to

  25. Slide 25: Learning: Structural shift to later ordering

    Learning: Structural shift to later ordering  Net sales declined to EUR 29 million (2017: 36) Operational EBIT EUR million – Traditional spring orders moving from Q1 to Q2-Q3 18.8 % especially in the Netherlands 18.3 % 16.7 % 17.5 % – Net sales grew in Poland and Finland 15.6 % 56  Operational EBI

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

    Free cash flow (12mr) on a good level  Main cash flow impacts in Free cash flow Q1 2018 vs. Q1 2017 EUR million 150 + Lower net financial items – Lower operational EBITDA 100 – Higher taxes as a result of real estate sale of Ludviginkatu in 50 Helsinki in Q4 2017  Divestment of Belgian women’s 0 m

  27. Slide 27: Net debt substantially lower vs. Q1 2017

    Net debt substantially lower vs. Q1 2017  At the end of Q1 2018 Net debt EUR million – Net debt to adjusted EBITDA at 2.0 (2017: 3.5) 7 – Net debt EUR 439 million (2017: 864) 6 – Equity ratio 34.1% (2017: 27.3) 5  Average interest rate was 2.6% (2017: 2.5%) in 4 Q1 2018 3 2  Net financial items d

  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

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  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 Media Finland Net sales 2017 News EUR 571 million TV/Radio 44% Online & Mobile Magazines NET SALES Around 12% other EUR 1,327 million 0 100 200 300 Media Netherlands NON-PRINT SALES EUR 437 million Magazines 40% Online & Mobile 30% Other OPERATIONAL EBIT MARGIN Around 16% Distribution

  32. Slide 32: Media Finland: Quarterly key figures

    Media Finland: Quarterly key figures EUR million Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 137.0 150.4 131.3 144.5 144.1 Operational EBITDA 35.8 35.3 35.5 42.1 42,9 Operational EBIT 13.1 9.8 14.2 22.4 19.0 margin 9.5% 6.5% 10.8% 15.5% 13.2% EBIT 11.6 8.2 13.5 30.5 19.6 Capital expenditure 1.8 0.5 3.0

  33. Slide 33: Media Netherlands: Quarterly key figures

    Media Netherlands: Quarterly key figures Adjusted for the SBS divestment EUR million Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 95.8 116.9 103.9 116.9 101.9 Operational EBITDA 16.3 21.9 16.0 22.9 16.4 Operational EBIT 14.9 19.2 14.0 20.8 14.2 margin 15.5% 16.4% 13.4% 17.8% 13.9% EBIT 16.9 14.2 11.3 15.

  34. Slide 34: Learning: Quarterly key figures

    Learning: Quarterly key figures EUR million Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net sales 28.9 38.5 145.7 97.9 36.2 Operational EBITDA -7.3 -7.2 66.1 41.8 -0.7 Operational EBIT -18.0 -21.6 56.1 31.9 -10.9 margin -62.2% -56.0% 38.5% 32.6% -30.0% EBIT -18.4 -23.7 56.2 22.8 -11.4 Capital expenditure 3.5 6.0

  35. Slide 35: Overall advertising market declined by 2% in Finland in Q1 2018

    Overall advertising market declined by 2% in Finland in Q1 2018 Finnish measured media advertising markets Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Newspapers -12% -10% -12% -12% -9% Magazines -7% -1% -9% -12% -7% TV 1% -4% -4% -7% -6% Radio -4% 4% 8% 0% 4% Online 7% 12% 10% 1% 8% Total market -2% -1% -2% -5%

  36. Slide 36: 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, 31 March 2018 EUR million, 31 March 2018 the EUR 300 million RCF  The EUR 200 million bond will Bank account 50 be repaid or refinanced Other loans 17 4

  37. Slide 37: Largest shareholders

    Largest shareholders 31 May 2018 Largest shareholders Holding by category 31 May 2018 Number of shares 2.6 % 1. Jane and Aatos Erkko Foundation 39,820,286 24.4% 18.7 % 13.3 % 2. Antti Herlin 19,506,800 11.9% (Holding Manutas Oy: 11.91%, personal: 0.02%) 3. Robin Langenskiöld 12,273,371 7.5% 4.0 % 4.

  38. Slide 38: Financial reporting in 2018

    Financial reporting in 2018 24 July 2018 Half-year Report 24 October Q3 2018 Interim Report 38 Roadshow Presentation June 2018

  39. Slide 39: 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

  40. Slide 40: 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

  41. Slide 41: 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

  42. Slide 42: 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 — Non-Deal Roadshow (June 2018) on 6ix