Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Investor Presentation (December 2012)
64 slides from Sanoma Oyj's investor presentation, December 2012
Slide 1: Sanoma in transformation
Sanoma in transformation Corporate Presentation December 2012
Slide 2: Market leader in chosen businesses and markets
Market leader in chosen businesses and markets • One of the leading media and Magazine publishing learning companies in Europe Television Newspaper publishing – #1 media company in the Netherlands Learning and Finland Online operations Finland Press distribution – Among top 2 educational players in
Slide 3: Sanoma's largest consumer media markets
Sanoma’s largest consumer media markets Net sales of main media companies (in EUR million) Netherlands (EUR million) Finland (EUR million) Sanoma Sanoma Telegraaf Media Groep Yle Alma Media Wegener MTV RTL NL TS-Yhtymä Audax Otavamedia De Persgroep NL 1 Keskisuomalainen 1 STER Edita 0 150 300 450 60
Slide 4: Learning – leading player in Europe
Learning – leading player in Europe #1 or #2 in markets where present Market: Sweden Market: Finland Market Position: #2 Market Position: #1 Sales: approx. EUR 20 m Sales: approx. EUR 50 m FTEs: approx. 60 FTEs: approx. 210 Size of market: approx. EUR 80 m Size of market: approx. EUR 90 m Market: Ne
Slide 5: ONE SANOMA Transformation
Strategy set & portfolio changes executed • Focus on consumer media and learning – Consumer media – value creation from leading multi-channel position Strategic – Learning – at the forefront of transformation focus • Acquisitions ONE SANOMA Transformation – SBS TV operations in the Netherlands and B
Slide 6: Focus on consumer media and learning
Focus on consumer media and learning 2010 Sales by operating segment by type of sales by geographic area Trade 12% 4% 14% 26% 23% Media 9% 46% 26% 51% Lear- 17% ning News 12% 16% 22% 9% 13% Advertising sales Learning Finland Other EU 2011 restated* pro forma** Subscription sales Retail/Press distrib
Slide 7: Organisational structure
Organisational structure CEO Harri-Pekka Kaukonen News Media Media Media Media Learning Pekka Soini Finland Netherlands Russia & CEE Belgium Jacques Anu Nissinen Dick Molman Heike Aime Eijkens Rosener van Hecke Strategy & digital Digital transformation operations John Martin Finance Kim Ignatius New
Slide 8: Success is built on our strong local market positions and our competencies
Success is built on our strong local market positions and our competencies • Strong relationships and brands • Inspiring content • Leading consumer insight • Media, sales and distribution power • Unique reach We differentiate ourselves from our peers through our deeper and broader consumer media por
Slide 9: Environment & Outlook
$3 Sanoma Environment & Outlook
Slide 10: GDP development
GDP development Declining trend continues in our main markets 6 5 4 3 2 1 -0.1 0 -0.3 -1 -0.4 -2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2011 2012 FIN BEL NL Source: FIN: Statistics Finland, BEL: National Bank of Belgium, NL: Centraal Bureau voor de Statistiek. Sanoma in Transformation December 2012 10
Slide 11: Consumer confidence
Consumer confidence Slightly improving – but still very negative 25 20 15 10 2.7 5 0 -5 -10 -14.3 -15 -20 -17.4 -25 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2011 2012 FIN BEL NL Source: European Commission, Business and Consumer Survey Results. Sanoma in Tr
Slide 12: Update on advertising markets
Update on advertising markets Change in total advertising market in % vs. previous year Netherlands* Q1/2012 Q2/2012 Q3/2012 Q1-Q3/2012 Magazines -1 -11 -13 -9 TV -3 -5 -7 -5 Online** +7 +7 -9 +2 Total advertising market -4 -5 -8 -6 Finland*** Q1/2012 Q2/2012 Q3/2012 Q1-Q3/2012 Newspapers -2 -13 -9
Slide 13: Group outlook for 2012 reiterated
Group outlook for 2012 reiterated Group outlook for 2012 (published on 31 October 2012) 1–9/2012act Net sales ‘At the previous year’s level or to +2.3% grow slightly’ EBIT, excluding non- ‘Around 10% of net sales’ 11.2% recurring items, margin EPS excluding non- ‘To be somewhat below previous EUR 0.
Slide 14: Group long-term financial targets
Group long-term financial targets Financial targets* Net sales growth Faster than GDP growth in main operating countries EBIT margin excl. non-recurring items 12% Net debt / EBITDA** <3.5 Equity ratio 35–45% Gearing <100% Dividend per share >50% of EPS excl. non-recurring items CAPEX < EUR 100 milli
Slide 15: Sanoma's Group-wide transformation process
Sanoma’s Group – wide transformation process
Slide 16: Group-wide transformation process
Group-wide transformation process Two parallel tracks Digital Transformation Cross-media development Convert reach to revenues Build new businesses Raise the performance bar Culture Focus Efficiency Financial flexibility Sanoma in Transformation December 2012 16
Slide 17: Cross-media adds value for customers and Sanoma
Cross-media adds value for customers and Sanoma Convert reach to revenues • Brand extensions & supplements Increased added value to • Improved experience through consumers / multimedia expansion communities • More targeted segmentation • New digital businesses • Increased cross-media reach Improved
Slide 18: Reposition Sanoma for future
Reposition Sanoma for future Raising the performance bar • Fundamental change in mind-set and way of working – act as one • Main portfolio changes executed – continue to dispose non-core assets • Enhance operational efficiency and financial flexibility – Continue to address cost base – Targeting to
Slide 19: Savings target & cost structure
Savings target & cost structure • Group-wide cost savings programme Cost of sales split (EUR million) and Gross Margin 250 EUR million 70% – Targeting around EUR 60 million gross 200 60% savings compared to 2012 base 50% 150 40% • Support functions approx. EUR 30 30% 100 million 20% 50 • Operational
Slide 20: Financials
$3 Sanoma Financials
Slide 21: Strong quarter for Learning
Strong quarter for Learning • Q3 2012 – Net sales EUR 599.5 (627.4) million – organic growth -3.3% – EBIT excl. non-recurring items EUR 80.1 (77.6) million – EPS excl. nri. EUR 0.31 (0.28) – Digital sales 19.6% of total net sales • Balance sheet – improving gradually – Equity ratio 41.4% (36.4%) – G
Slide 22: Income Statement
Income Statement 7–9/2011 1–9/2011 1–12/2011 EUR million 7–9/2012 restated* 1–9/2012 restated* restated* Net sales 599.5 627.4 1,789.6 1,750.2 2,378.1 EBITDA excl. non-recurring items 144.4 138.5 405.3 308.0 446.3 of net sales 24.1% 22.1% 22.6% 17.6% 18.8% Amortisations related to programming rights
Slide 23: Free cash flow
Free cash flow Cash flow from operations less cash CAPEX 7–9/2012 7–9/2011 1–9/2012 1–9/2011 1–12/2011 EUR million Group* Group* Group* Group* Group* EBITDA excl. non-recurring items 144.4 142.6 410.2 323.3 469.5 TV programming costs -45.4 -26.0 -134.4 -50.8 -92.0 Prepublication costs -8.8 -6.8 -22.
Slide 24: Refinancing completed successfully
Refinancing completed successfully More than EUR 1 billion done • Gross debt EUR 1,455.6 million and net debt Committed credit facilities profile* EUR 1,369.5 million as of 30 September As of 30 September 2012 (EUR million) 2012 – Average interest rate around 3.5% p.a. 49 – Interest sensitivity ***h
Slide 25: Long-term Group financial targets
Long-term Group financial targets Financial target EBIT margin excl. non-recurring items 12% • Operational efficiency EBIT margin excl. non-recurring items, % • SBS turnaround • Efficiency in support functions 12% – ICT infrastructure, centralised 10.4 procurement function, financial services, 9.8 9
Slide 26: Long-term Group financial targets
Long-term Group financial targets Financial targets Equity ratio 35–45% Gearing <100% Equity ratio, % Gearing, % 45 46 106 40 41 <100% 96 39 37 35-45% 79 79 64 58 2007 2008 2009 2010 2011 Q1/2012 2007 2008 2009 2010 2011 Q1/2012 Equity ratio Gearing Sanoma in Transformation December 2012 26
Slide 27: Long-term Group financial targets
Long-term Group financial targets Financial target Net debt / EBITDA* <3.5 4.3 • Gross debt EUR 1,456 million and net debt EUR 4.0 1,370 million (30 September, 2012) <3.5 3.3 2.8 2.9 • Inaugural EUR 400 million 5-year eurobond issued 2.6 2.5 <3.5 under investment grade documentation 2.0 2.1 2.0 1.6
Slide 28: Long-term Group financial targets
Long-term Group financial targets Financial target *FCF = Free Cash Flow is Cash Flow from Operations Dividend per share less Cash CAPEX. >50% of EPS excl. non-recurring items DPS in relation to EPS reported and EPS excl. Cash flow from operations > dividends paid non-recurring items, % EUR 1.75 125
Slide 29: Appendix 1: Sanoma's business units in transformation
Appendix 1 Sanoma’s business units in transformation
Slide 30: Managing the digital transformation
Managing the digital transformation Drive performance of current business Multi-platform and digital growth Print (~60% of net sales) New Advertising consumer TV & Radio solutions Support functions (~15% of net sales) revenues Online Balance sheet (~10% of net sales) Learning solutions Learning mate
Slide 31: From platform based to multi-channel and cross-media
From platform based to multi-channel and cross-media Supplements and Traditional print media Online product extensions Brand Content Services to advertisers Customers Services to consumers Our know- how Paid Free Print publishing Mobile and tablet Application publishing TV devices Web publishing Key
Slide 32: Sanoma Media
Sanoma Media Net sales EBIT excluding non-recurring items EUR million EUR million 500 70 64 450 436 60 389 55 400 354 342 338 50 350 311 300 280 38 40 250 30 27 200 25 23 23 150 20 100 10 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2011 2012 Sanoma in Transformation December 2012 32
Slide 33: Successful in multi-channel
Successful in multi-channel Built on our competencies and strong local market positions Strong power ratios We have We know our Dominant Domain Built Trusted strong target market knowledge communities relation with brands groups positions advertisers Professional and creative staff Consumer/customer
Slide 34: TV viewing stays strong
TV viewing stays strong Average daily viewing time per individual in Europe 250 min/day 222 227 228 212 213 215 215 216 215 217 194 196 200 199 203 203 191 200 150 100 50 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average daily viewing time Average daily v
Slide 35: Social- and Online-TV will activate TV viewers
Social- and Online-TV will activate TV viewers • In Finland Ruutu.fi going beyond Engagement with the show and additional content & information catch-up – paid content will be launched in autumn 2012 • In the Netherlands SBS will launch Full Media Format concept as well as 2nd screen applications Ru
Slide 36: Magazines will also be extended to digital
Magazines will also be extended to digital B2C Bundling B2C + B2B Content Library E-commerce Sanoma in Transformation December 2012 36
Slide 37: Sanoma News
Sanoma News Net sales EBIT excluding non-recurring items EUR million EUR million 115 16 112 112 14 14 13 110 110 12 108 12 107 10 10 105 9 103 8 8 100 98 6 5 4 95 2 90 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2011 2012 Sanoma in Transformation December 2012 37
Slide 38: Total reach expanded
Total reach expanded Case Helsingin Sanomat & Ilta-Sanomat Helsingin Sanomat Ilta-Sanomat Single copy Subscription Single copy Subscription Total reach* (’000) Total reach* (’000) 2.000 2.500 2.000 1.500 1.500 1.000 1.000 0.500 0.500 0.000 0.000 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Prin
Slide 39: Funnel – framework for monetizing online visitors
Funnel – framework for monetizing online visitors Awareness/ inspiration CPM, CPC Product/service comparison CPC, CPL Purchase € CPS, sales € € € € € Content driven/ traffic sites Value of the visitor increases Transactional sites Competitive advantages: • Number of visitors • Web analytics know-how
Slide 40: Sanoma Learning
Sanoma Learning Net sales EBIT excluding non-recurring items EUR million EUR million 140 60 127 50 50 47 120 111 110 43 40 97 31 100 30 80 20 60 10 44 38 39 0 40 -10 -6 20 -15 -20 -20 0 -30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2011 2012 Note: Q2/2012 EBIT includes a timing shift of EUR 8 million from Q
Slide 41: Transformation still in infancy
Transformation still in infancy Sanoma at the forefront and well positioned Global textbook revenue by product type Sanoma learning business unit Pro forma net sales by type of sales 30.000 USD million 25.000 20.000 Print 15.000 56% 10.000 Services 5.000 Hybrid 4% 0.000 Pure digital 24% 2009 2010 20
Slide 42: Organic expansion opportunity
Organic expansion opportunity Total educational budget for the countries where we are present This part of the budget will hardly grow Learning materials because 1% or approx. EUR 0.75 billion • Commoditization of content Addressable • Demographic development Variable expenses (e.g. platforms, devel
Slide 43: Appendix 2: Additional key information
Appendix 2 Additional key information
Slide 44: Successful Integration
Successful Integration Steps to a leading media company 1999: Sanoma and WSOY merged and listed on the Helsinki Stock Exchange 2001: VNU Consumer Information Group acquisition Magazine division with operations in nine countries 2003: Rautakirja merged into Sanoma 2004: Malmberg and Van In acquisitio
Slide 45: Focusing on consumer media and learning
Focusing on consumer media and learning 2011*: Net sales EUR 2,378 million EBIT EUR 224 million** Personnel 10,960 (FTE) Sanoma Sanoma Sanoma Sanoma Sanoma Sanoma News Media Media Media Media Learning Belgium Finland Netherlands Russia & CEE Net sales M€ 436 Net sales M€ 209 Net sales M€ 310 Net
Slide 46: Sanoma Media Netherlands
Sanoma Media Netherlands • Net sales 2011: EUR 642 million, pro forma 2011: EUR 818 million • Has an extensive portfolio with over a 100 different brands in print, TV and online • Is the dominant player in the Dutch magazine market – Libelle, Margriet, LINDA., Donald Duck, Story, Veronica magazine •
Slide 47: Sanoma Media Finland
Sanoma Media Finland • Net sales 2011: EUR 310 million • Over 40 quality titles and a readership of over 3 million – Finland’s number-one publisher of children’s and juvenile publications – Popular titles include Aku Ankka (Donald Duck), Kodin Kuvalehti, ET-lehti, Me Naiset • No 2 commercial TV play
Slide 48: Sanoma Media Belgium
Sanoma Media Belgium • Net sales 2011: EUR 209 million, pro forma 2011: EUR 235 million • Operates in both the Dutch and French speaking markets • Market leader in women's magazines and TV titles (Libelle, TeVe-Blad, Story) • Has a number of popular internet sites in Belgium • 33% of De Vijver – Fre
Slide 49: Sanoma Media Russia & CEE
Sanoma Media Russia & CEE • Net sales 2011: EUR 213 million • Operates in nine markets: Bulgaria, Croatia, the Czech Republic, Hungary, Romania, Russia, Serbia, Slovenia and Ukraine • Publishes over 140 consumer magazines mainly targeted at women – Cosmopolitan, Men’s health, Harper’s Bazaar, Nation
Slide 50: Sanoma Media
Sanoma Media Key figures EUR million 7-9/12 4-6/12 1-3/12 10-12/11 7-9/11 4-6/11 1-3/11 FY 2011 Net sales 338.1 388.6 354.1 435.8 342.2 311.2 280.0 1,369.2 The Netherlands 173.5 208.1 171.6 232.2 174.0 130.6 105.3 642.0 Finland 65.4 76.7 77.4 86.2 70.0 79.4 74.2 309.7 Russia & CEE 46.9 50.1 49.0 56.
Slide 51: TV – net sales and EBIT seasonality
TV – net sales and EBIT seasonality 2009–2011 average for TV* Net sales split EBIT** split 12% 22% 29% 32% 37% 28% 21% 19% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes SBS Netherlands (excluding PPA amortization) and Nelonen Media Finland. **Excluding non-recurring items. Sanoma in Transformation December 2012
Slide 52: Magazines – net sales and EBIT seasonality
Magazines – net sales and EBIT seasonality 2009–2011 average for Magazines* Net sales split EBIT** split 19% 24% 27% 29% 27% 25% 24% 25% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Include Dutch, Finnish, Belgium and Russian operations. **Excluding non-recurring items. Sanoma in Transformation December 2012 52
Slide 53: Sanoma News
Sanoma News • Net sales 2011: EUR 436 million • Finland represents 99% of the segment’s sales • Helsingin Sanomat and Ilta-Sanomat are the leading newspapers in Finland • Metro is the leading free sheet in Finland • Etelä-Saimaa, Kouvolan Sanomat and Kymen Sanomat are the leading regional papers • D
Slide 54: Sanoma News
Sanoma News Key figures EUR million 7-9/12 4-6/12 1-3/12 10-12/11 7-9/11 4-6/11 1-3/11 FY 2011 Net sales 98.3 106.8 110.0 112.0 103.2 112.2 108.4 435.8 Helsingin Sanomat 52.2 56.2 59.3 60.8 55.3 61.2 61.2 238.5 Ilta-Sanomat 20.0 22.0 21.2 21.6 21.6 22.2 19.1 84.4 Other publishing 22.3 24.3 25.2 25.4
Slide 55: News – net sales and EBIT seasonality
News – net sales and EBIT seasonality 2009-2011 average for News Net sales split EBIT* split 25% 22% 26% 28% 21% 24% 25% 29% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Excluding non-recurring items. Sanoma in Transformation December 2012 55
Slide 56: Sanoma Learning
Sanoma Learning • Net sales 2011: EUR 291 million • One of Europe’s largest providers of learning materials and solutions operating in Finland, Hungary, Belgium, the Netherlands, Poland and Sweden • Among top 2 learning players in its all 6 operating countries • The roots of our educational publishi
Slide 57: Sanoma Learning
Sanoma Learning Key figures EUR million 7-9/12 4-6/12 1-3/12 10-12/11 7-9/11 4-6/11 1-3/11 FY 2011 Net sales 127.4 111.1 38.4 39.2 110.4 97.0 44.0 290.6 Learning 127.4 109.3 34.2 34.7 100.2 87.4 34.3 256.6 Other businesses 0.0 1.8 4.6 5.0 10.8 10.2 10.1 36.1 Eliminations 0.0 0.0 -0.4 -0.4 -0.6 -0.6
Slide 58: Sanoma learning business unit
Sanoma learning business unit Pro forma Hungary 8% Sweden 8% Netherlands 28% Belgium 11% Finland 19% Poland 26% Sanoma in Transformation December 2012 58
Slide 59: Learning – net sales and EBIT seasonality
Learning – net sales and EBIT seasonality 2009–2011 average for learning* Net sales split EBIT** split in relative terms 14% 13% 33% 40% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes learning business of the Learning segment only. **Excluding non-recurring items. Sanoma in Transformation December 2012 59
Slide 60: Appendix 3: About owners and coverage
Appendix 3 About owners and coverage
Slide 61: Sanoma – largest shareholders
Sanoma – largest shareholders % of shares 30 November, 2012 and votes 23% Jane and Aatos Erkko Foundation 23.02 Robin Langenskiöld 7.54 8% Rafaela Seppälä 6.31 Antti Herlin (Holding Manutas Oy: 4.7%, 5.59 6% Security Trading 0.88%, personal: 0.02%) 76% Helsingin Sanomat Foundation 3.50 6% 4% Ilmarin
Slide 62: Analyst coverage
Analyst coverage ABN Amro Evli Bank Pareto Securities / Öhman Maurits Heldring Mikko Ervasti Teemu Vainio tel. +31 20 344 1191 tel. +358 9 4766 9205 tel. +358 9 8866 6038 abnamro.com Evli.com Ohman.se Carnegie Investment Bank FIM Pohjola Matti Riikonen Mona Grannenfelt Kimmo Stenvall tel. +358 9 618
Slide 63: Sanoma's IR team
Sanoma’s IR team Mr Martti Yrjö-Koskinen tel. +358 40 684 4643 martti.yrjo-koskinen@sanoma.com Mr Olli Turunen tel. +358 40 552 8907 olli.turunen@sanoma.com Ms Katariina Hed tel. +358 50 412 5120 katariina.hed@sanoma.com IR team’s joint email address: ir@sanoma.com
Slide 64: Important notice
Important notice 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