Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Carnegie Small & Mid Cap Seminar 2022
41 slides from Sanoma Oyj's conference presentation, Sep 7, 2022
Slide 1: Leading K12 learning company capturing further growth in an attractive global market
Leading K12 learning company capturing further growth in an attractive global market Alex Green, CFO Carnegie Small & Mid Cap Seminar 2022
Slide 2: We have an ambitious strategy for sustainable, profitable growth
We have an ambitious strategy for sustainable, profitable growth… ▪ We are one of the global leaders in K12 education serving 25 million Our purpose students and want to grow globally through M&A Through learning and media, we have a positive impact on the lives of millions of people ▪ We are Finlan
Slide 3: Based on a well-balanced portfolio with clear long-term targets
… based on a well- Year 2021 at a glance balanced portfolio with clear long- Net sales term targets More than Free cash flow 1,252m€ 85% 140m€ 51% 49% of customers pay for Learning Media digital services Finland Operational EBIT excl.PPA Operating in More than 197m€ Margin 15.8% 11 5,000 70% 30% Eur
Slide 4: Our key long-term targets
Our key long-term targets (FY 2021 in brackets) Net debt / Equity Increasing Adj. EBITDA ratio dividend < 3.0 35−45% 40−60% (2.4) (40.6%) of free cash flow (55%) Employee Experience Management Index gender balance Carbon neutral >7.5 50/50 by 2030 by 2030 by 2030 (77 gCO2e / € net sales) (7.3) (39 w
Slide 5: We are #1 in K12 learning services in Europe
We are #1 in K12 learning services in Europe… ▪ We focus on K12, which is primary, secondary and vocational education (ie. 6−18 year-olds) – Supporting more than 25m students in 12 European countries – Having a ~16% market share ▪ Teachers and schools are our primary customers – Teachers are key dec
Slide 6: Leading the way in consolidating the market
…and are leading the way in consolidating the market ▪ K12 is a stable and resilient market – Stable population of approx. 75 million students in Europe, corresponding to a market size of 4−5bn€ – Public spending on education is increasing, spend per student varies between countries – Significant fr
Slide 7: In Learning, a successful track record and ambitious plan for profitable growth
In Learning, we have a successful track record and ambitious plan for profitable growth 700 25% M&A has accelerated our transformation ▪ 2019: Four acquisitions in K12 learning services 600 20% ▪ 2020: Santillana, leading provider of K12 learning content in Spain ▪ 2022: Pearson Italy, the third lar
Slide 8: M&A strategy: Focus on growth opportunities in K12 learning business
M&A strategy: Focus on growth opportunities in K12 learning business We aim to grow in K12 We aim to acquire Our M&A pipeline is learning content by companies that healthy ▪ Strengthening our position in ▪ Focus on K12 learning ▪ Market consolidation current operating countries content driven by acc
Slide 9: Sanoma acquired Pearson's K12 learning business in Italy
Sanoma acquired Pearson’s K12 learning business in Italy as of 31 August 2022 ▪ Sanoma enters Italy, one of the largest K12 learning services markets in Europe ▪ The acquisition also includes a small exam preparation business in Germany ▪ Increases the Group’s net sales by 117m€ to ~1.4bn€ (pro form
Slide 10: We are Finland's #1 cross-media company
We are Finland’s #1 cross-media company... ▪ Independent and trusted media is essential for an open and democratic society ▪ We reach 97% of all Finns every week by providing trusted Finnish journalism and inspiring entertainment ▪ Our strategy focuses on – News & feature – Entertainment Share of st
Slide 11: Delivering solid, stable earnings and cash flow
…delivering solid, stable earnings and cash flow In Media Finland, stable net sales and profitability ▪ Sustainable performance in the digital era development continued during the pandemic requires scale 700 20% – We have 1.4 million subscriptions in total 600 15% – ~55% pay for digital component 50
Slide 12: Our Sustainability Strategy emphasises the positive impact of learning and media on society
Our Sustainability Strategy emphasises the positive impact of learning and media on society Trustworthy data Valued people Target: Continuous Target: Employee privacy and security Engagement Index (EEI) training for our above 7.5 employees No Inclusive learning major data Empowering learning of EEI
Slide 13: Growing through M&A while paying an increasing dividend
Growing through M&A while paying an increasing dividend € Solid balance sheet Growing dividend with Investing in further supporting M&A an attractive yield digital growth ▪ Implementing our ▪ Our policy is to pay an ▪ Harmonising and clear growth increasing dividend, developing our digital strategy
Slide 14: We are on track for our strategic growth ambition for 2030
We are on track for our strategic growth ambition for 2030 ▪ 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-line with long-term targets of 2−5% p.a. for Learning a
Slide 15: We have an ambitious strategy for sustainable, profitable growth
We have an ambitious strategy for sustainable, profitable growth ▪ We are one of the global leaders in K12 education serving 25 million Our purpose students and want to grow globally through M&A Through learning and media, we have a positive impact on the lives of millions of people ▪ We are Finland
Slide 16: Appendix
Appendix
Slide 17: We have an ambitious strategy for sustainable, profitable growth
We have an ambitious strategy for sustainable, profitable growth We are one of the global leaders in K12 education serving 25 million students ▪ Producing inclusive learning materials and platforms to promote equal learning opportunities Our purpose ▪ Strengthening our #1 position in European K12 le
Slide 18: Sanoma in 2021
Sanoma in Learning Media Finland 2021 Net sales 637m€ Net sales 615m€ NET SALES Non-print 57% Non-print 49% 1,252m€ Margin 21.0% Margin 11.9% NON-PRINT SALES NET SALES NET SALES 53% Netherlands Subscription Poland Non-print OPERATIONAL EBIT MARGIN advertising Spain 15.8% Belgium Print advertising Si
Slide 19: Appendix: Sanoma Group
Appendix: Sanoma Group
Slide 20: Largest shareholders
Largest shareholders 30 June 2022 Largest shareholders Holding by sector Number of % of 3% Shareholders 15% shares shares 1. Jane and Aatos Erkko Foundation 39,820,286 24.4 16% Antti Herlin 2. 19,816,800 12.1 Holding Manutas Oy: 12.10%, personal: 0.02% 3. Langenskiöld Robin 12,273,371 7.5 4. Seppälä
Slide 21: Solid dividend for our shareholders while growing through M&A
Solid dividend for our shareholders while growing through M&A Dividend per share € Dividend yield 4.0% as of 31 Dec 2021 60% 40% 0.63 0.35 0.77 0.45 0.50 0.71 0.52 0.99 0.54 0.87 2017 2018 2019 2020 2021 Free cash flow / share1) DPS Payout ratio 1) 2021 FCF excl. the net free cash flow impact of the
Slide 22: Importance for the stakeholders
To develop sustainability, we engage with our stakeholders... …to clarify our sustainability strategy… ▪ 1,500 customers, suppliers, investors, NGOs and Data employees around Europe participated autumn 2020 Importance for the stakeholders ▪ Board and Executive Management Team clarified priorities ba
Slide 23: Our sustainability actions are strongly linked to the global Agenda 2030
Our sustainability actions are strongly linked to the global Agenda 2030 17 Partnerships for the goals 16 Peace, justice and strong institutions 4 Quality education 13 Climate action 5 Gender equality 12 Responsible consumption and production 10 Reduced inequalities 8 Decent work and 9 Industry, inn
Slide 24: We are committed to global sustainability initiatives
We are committed to global sustainability initiatives Global Implementing Reporting Sustainability UN Sustainable Initiative Standards Development reporting Board reporting Goals Signatory Committed Task Force on of UN Global to Science- Climate-related Compact Based Financial Targets Disclosure Int
Slide 25: Sanoma is a sustainable investment with solid ESG performance
Sanoma is a sustainable investment with solid ESG performance MSCI rating Sustainalytics risk rating CDP score ISS rating AA 9.8 B C+ Scale 0–100, Scale AAA – CCC Scale A – D- Scale A – D lower score = lower risk Aligned with Signatory of Science UN SDGs UN Global Based Targets Compact Sustainable C
Slide 26: Appendix: Sanoma Learning
Appendix: Sanoma Learning
Slide 27: Sanoma Learning has been successfully built through M&A
Sanoma Learning has been successfully built through M&A Iddink Tammi (Sanoma Pro) the Netherlands, Finland Belgium, Spain Pearson Italy Sanoma Italy WSOY Van In Sanoma Utbildning Essener Pearson Germany Finland Belgium Sweden the Netherlands Germany 1999 2004 2008 2011 2016 2019 2020 2022 Malmberg N
Slide 28: We are a focused provider of K12 learning products and services
We are a focused provider of K12 learning products and services Education K12 Higher Corporate Life-long Pre-school Key market sectors Primary Secondary Vocational education learning learning School infrastructure ▪ ICT and other equipment ▪ Distribution & Maintenance services Learning products & se
Slide 29: Our wide footprint in learning content enables us to scale our digital competences
Our wide footprint in learning content enables us to scale our digital competences Share of net sales and operational EBIT margin excl. PPA in 2021 Distribution services 20% Below average Digital platforms* 15% Below average Printed and digital learning content 65% Above average 637m€ 21.0% 30 Carne
Slide 30: We are leading the way in digitalisation across all our markets
We are leading the way in digitalisation across all our markets Stage Print Free digital Paid digital Subscription digital Digital Model Print only Free digital Paid digital Subscription digital Markets Poland Finland Netherlands Italy Belgium ~65% Spain Sweden of learning material France UK sales G
Slide 31: In learning materials, modest market growth expected over the cycle
In learning materials, modest market growth expected over the cycle ▪ In Poland, fluctuations due to the Value of K12 publishing market* educational reform ending in 2021 120 Spain ▪ In Spain, the LOMLOE reform is 115 Poland Netherlands driving fluctuation in 2022-2023 110 ▪ Dutch market will be mod
Slide 32: Appendix: Sanoma Media Finland
Appendix: Sanoma Media Finland
Slide 33: We have leading positions in news & feature, entertainment and B2B marketing solutions
We have leading positions in news & feature, entertainment and B2B marketing solutions ▪ Sustainable demand ▪ Our strong history and position #1 in domestic, ▪ Proven track record in digital independent journalism News & feature transformation ▪ Increasing consumer revenue #1 in domestic entertainme
Slide 34: #1 in Finnish journalism, further strengthened by acquired regional news media
NEWS & FEATURE #1 in Finnish journalism, further strengthened by acquired regional news media Leading national and regional news media Focus on ▪ Growing digitally active subscription base ▪ Growing daily national reach 35 Carnegie Small & Mid Cap Seminar 2022
Slide 35: We have leading positions in our selected areas
ENTERTAINMENT We have leading positions in our selected areas TV & video Radio & audio Live events Our market positions #1-2 #2 #1 36 Carnegie Small & Mid Cap Seminar 2022
Slide 36: Our digital transformation is driven by a unique combination of success factors
Our digital transformation is driven by a unique combination of success factors, shared between businesses Success factors across our units Excellent digital Subscription sales B2C and B2B News & feature customer management and cross-sales of experience different products to enable easy use and buyi
Slide 37: Digital transformation increases profit contribution per incremental subscriber, but reduces net sales
Digital transformation increases profit contribution per incremental subscriber, but reduces net sales ▪ Acquiring an additional subscriber Net sales per additional … but profit contribution for digital instead of printed news will subscription1 reduces… increases1 – Generate 50% the net incremental
Slide 38: Subscriptions growing for the fifth year in a row with strong growth in digital
CASE HELSINGIN SANOMAT Subscriptions growing for the fifth year in a row with strong growth in digital +1% annual growth in HS subscription base ▪ HS total number of subscriptions over 420k ▪ Number of digital-only subscriptions over 150k, 400k 35% of total subscription base ~15% – Already more than
Slide 39: 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 40: 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 41: Please contact our Investor Relations
Please contact our Investor Relations: Kaisa Uurasmaa, Head of IR & Sustainability M +358 40 560 5601 E kaisa.uurasmaa@sanoma.com ir@sanoma.com www.sanoma.com