Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Q3 2022 Earnings Presentation
29 slides from Sanoma Oyj's earnings presentation, Oct 27, 2022
Slide 1: Interim Report Q3 2022: Net sales grew driven by Spain and the recent acquisition in Learning
Interim Report Q3 2022: Net sales grew driven by Spain and the recent acquisition in Learning Susan Duinhoven, President & CEO Alex Green, CFO
Slide 2: Net sales grew driven by Spain and the acquisition of Pearson Italy and Germany
Q1−Q3 2022 Net sales grew driven by Spain and the acquisition of Pearson Italy and Germany Net sales Organic net sales Operational EBIT Free cash Net debt / growth excl. PPA flow Adj. EBITDA 1,039m€ 2% 192m€ 48m€ 3.3 (2021: 999) (2021: 8%) (2021: 203) (2021: 85) (2021: 2.5) ▪ Net sales grew both in
Slide 3: Learning: net sales grew driven by organic growth and the Pearson acquisition
LEARNING Q1−Q3 2022 Net sales grew driven by organic growth especially in Spain and the Pearson acquisition… ▪ Net sales grew to 579m€ (2021: 549) – Pearson Italy and Germany, acquired on 31 August 2022, had a 21m€ contribution to the net sales growth – Organic growth was 2% (2021: 7%) – In Spain, t
Slide 4: Learning: earnings impacted by lower profitability in the Dutch distribution business
LEARNING Q1−Q3 2022 Operational EBIT excl. PPA …earnings impacted by lower m€ profitability in the Dutch distribution business 22.2 % 21.0 % 21.0 % ▪ Operational EBIT excl. PPA was 151m€ (2021: 155) 18.5 % 19.8 % 19.5 % 17.8 % – Earnings in the learning content businesses 126 129 improved in all maj
Slide 5: Sanoma acquired Pearson's K12 learning business in Italy as of 31 August 2022
Sanoma acquired Pearson’s K12 learning business in Italy as of 31 August 2022 ▪ Sanoma entered Italy, one of the largest European K12 learning services markets early in its digitalisation – Pearson is the 3rd largest publisher in the Italian market with a market share of 15%, focused on secondary ed
Slide 6: Media Finland: net sales stable, earnings impacted by higher paper costs
MEDIA FINLAND Q3 2022 Operational EBIT excl. PPA Net sales stable, earnings m€ impacted by higher paper costs 15.4 % ▪ Net sales stable at 155m€ (2021: 155) 13.3 % – Total advertising sales declined in-line with the relevant 12.5 % 24 market categories 11.7 % ▪ Digital and radio advertising sales co
Slide 7: Outlook for 2022 (unchanged)
Outlook for 2022 (unchanged) Last updated on 31 August for the acquisition of Pearson Italy and Germany ▪ In 2022, Sanoma expects that the Group’s reported net sales will be 1.3 ‒1.35 bn€ (2021: 1.25) ▪ The Group’s operational EBIT margin excluding PPA is expected to be around 15% (2021: 15.8%) ▪ Re
Slide 8: Operational environment will also be challenging next year
Operational environment will also be challenging next year ▪ Supporting our performance Long-term targets − Resilient learning content business with growth driven by ▪ Second year of curriculum change in Spain Increasing ▪ Poland returning to growth trajectory with new curriculum renewal Learning di
Slide 9: We are well underway to our strategic growth ambition for 2030
We are well underway to our strategic growth ambition for 2030 ▪ Currently approx. 55% of net sales from Learning ▪ We are aiming for the Group’s net sales to be over 2bn€ by 2030, with at least 75% coming from the learning business ▪ Central levers in achieving the ambition are – Organic growth in-
Slide 10: Financials
Financials
Slide 11: Operational EBIT stable
Q3 2022 Operational EBIT excl. PPA Q3 22 vs. Q3 21 Operational EBIT stable m€ Learning + Organic growth in the content business in Spain and the Netherlands + Pearson Italy and Germany acquisition ‒ Weakened profitability in the Dutch distribution business with growing sales ‒ Lower sales in Poland
Slide 12: Lower earnings and higher investments reduced free cash flow
Q1−Q3 2022 Free cash flow Lower earnings and higher m€ investments reduced free cash flow 200 ▪ Free cash flow lower at 48m€ (2021: 85*) + Acquisition of Pearson Italy and Germany 150 + Lower TV programme costs – Lower EBITDA 100 – Higher investments in digital development and office adaptation 50 –
Slide 13: Net debt and leverage increased with the acquisition of Pearson Italy and Germany
Net debt and leverage Net debt m€ increased with the acquisition of Pearson Italy and Germany 3.3 3.1 3.2 Long-term target < 3.0 2.8 ▪ Net debt / Adj. EBITDA was 3.3 (2021: 2.5) 2.6 2.6 ▪ Interest-bearing net debt totalled 838m€ (2021: 630) 2.5 2.4 ▪ Equity ratio was 33.0% (2021: 38.2%) ▪ Net financ
Slide 14: Deep-dive into learning content businesses
Deep-dive into learning content businesses 1 December 2022 Virtual presentation and roundtable discussion with Rob Kolkman (CEO, Sanoma Learning) and Alex Green (CFO, Sanoma Group) Save the Date
Slide 15: Financial reporting in 2023
Financial reporting in 2023 Full-Year Result 2022 10 February Interim Report Q1 2023 4 May Half-Year Report 2023 26 July Interim Report Q3 2023 26 October Financial Statements and Directors’ Report for 2022 week 10 AGM 2023 19 April 15 Interim Report Q3 2022
Slide 16: Q&A
Q&A
Slide 17: Appendix
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Slide 18: Sanoma in 2021
Sanoma in Learning Media Finland 2021 Net sales 637m€ Net sales 615m€ NET SALES 57% 49% 1,252m€ Non-print Non-print Margin 21.0% Margin 11.9% NON-PRINT SALES 53% NET SALES NET SALES Netherlands Subscription OPERATIONAL EBIT MARGIN Poland Non-print 15.8% Spain advertising Print advertising Belgium PE
Slide 19: Group key figures Q3 2022
Group key figures Q3 2022 m€ Q3 2022 Q3 2021 Q3 2022 Q3 2021 Net sales 514.9 486.3 Average number of employees (FTE) 4,996 4,904 Operational EBITDA 188.4 184.5 Number of employees at the end of 5,135 4,828 margin 36.6% 37.9% the period (FTE) Operational EBIT excl. PPA 148.4 147.4 margin 28.8% 30.3%
Slide 20: Group key figures Q1-Q3 2022
Group key figures Q1−Q3 2022 m€ Q1−Q3 Q1−Q3 Q1−Q3 Q1−Q3 2022 2021 2022 2021 Net sales 1,038.8 999.2 Average number of employees (FTE) 4,996 4,904 Operational EBITDA 310.1 318.9 Number of employees at the end of 5,135 4,828 margin 29.9% 31.9% the period (FTE) Operational EBIT excl. PPA 191.6 202.5 ma
Slide 21: Learning: Quarterly key figures
Learning: Quarterly key figures m€ Q3 22 Q2 22 Q1 22 Q4 21 Q3 21 Q2 21 Q1 21 Net sales 360.3 149.8 69.3 88.5 331.6 149.0 68.2 Operational EBITDA 150.7 58.6 -1.3 3.0 144.9 66.0 -0.9 Operational EBIT excl. PPA 129.4 41.0 -19.7 -20.6 125.6 48.9 -20.0 margin 35.9% 27.4% -28.4% -23.3% 37.9% 32.8% -29.3%
Slide 22: Adjusted key figures of Pearson Italy and Germany
Adjusted key figures of Pearson Italy and Germany (pro forma, preliminarily adjusted for IFRS and Sanoma accounting principles, unaudited) Quarterly figures m€ Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Net sales, total 31 11 18 58 29 12 Operational EBIT excl. PPA 6 -4 FY figures m€ FY 2021 FY
Slide 23: Media Finland: Quarterly key figures
Media Finland: Quarterly key figures m€ Q3 22 Q2 22 Q1 22 Q4 21 Q3 21 Q2 21 Q1 21 Net sales 154.8 163.7 141.6 164.1 154.8 154.1 142.2 Operational EBITDA 39.2 38.8 30.7 41.9 40.9 40.0 32.2 Operational EBIT excl. PPA 20.6 17.2 9.9 19.1 23.9 19.3 11.3 margin 13.3% 10.5% 7.0% 11.7% 15.4% 12.5% 7.9% IACs
Slide 24: Finnish advertising market development
Finnish advertising market development Finnish measured media advertising markets Q3 22 Q2 22 Q1 22 FY 21 Q4 21 Q3 21 Q2 21 Q1 21 Newspapers -7% -12% 0% 3% 2% 0% 36% -14% Magazines -5% -5% -14% -4% -5% -4% 11% -16% TV -4% -1% -2% 9% 0% 4% 43% -3% Radio -3% 12% 16% 18% 21% 12% 47% -7% Online (excl. s
Slide 25: We have a well-balanced debt portfolio
We have a well-balanced debt portfolio External debt structure 1) Maturity profile 2022–2024 m€, 30 September 2022 m€, 30 September 2022 1 000 25 25 2 138 800 250 600 650 790m€ 1) 925 900 200 400 200 50 200 250 200 200 Term loan 2022 Term loan 2020 Bond 0 2022 2023 2024 2025 2026 Commercial papers O
Slide 26: Largest shareholders
Largest shareholders 30 September 2022 Largest shareholders Holding by sector Number of % of Shareholders shares shares 3% 1. Jane and Aatos Erkko Foundation 39,820,286 24.4 15% Antti Herlin 16% 2. 19,816,800 12.1 Holding Manutas Oy: 12.10%, personal: 0.02% 3. Langenskiöld Robin 12,273,371 7.5 4. Se
Slide 27: Analyst coverage
Analyst coverage Carnegie Investment Bank Pia Rosqvist-Heinsalmi +358 9 6187 1232 Danske Markets Equities Sami Sarkamies +358 40 502 9194 Inderes Petri Gostowski +358 40 821 5982 Kepler Cheuvreux Stefan Billing +46 8 723 51 48 Nordea Sanna Perälä +358 40 779 0845 OP Corporate Bank Kimmo Stenvall +35
Slide 28: 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 29: 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