Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Q1 2019 Earnings Presentation

29 slides from Sanoma Oyj's earnings presentation, April 2019

  1. Slide 1: Q1 2019 Interim Report: Solid start to the year

    Q1 2019 Interim Report: Solid start to the year Susan Duinhoven, President & CEO Markus Holm, CFO & COO

  2. Slide 2: Q1 2019 highlights

    Q1 2019 highlights ’ Net sales Operational EBIT Operational EBIT Free cash flow Net debt / Adj. excl. PPA excl. PPA, margin EBITDA M€ 248 M€ 10 4.1% M€ -41 2.0 (2018: 262) (2018: 10) (2018: 3.9%) (2018: -44) (2018: 2.0)  Solid start to the year – Net sales grew in Learning and declined in the media

  3. Slide 3: Operational EBIT stable in Learning and Media Finland

    Operational EBIT stable in Learning and Media Finland Operational EBIT excl. PPA by SBU  Stable development in Learning EUR million and Media Finland -16.3  Profitability of Media Learning Netherlands declined -17.2 – Lower net sales partially offset 14.2 Media Finland by good cost containment of

  4. Slide 4: Learning: Net sales and earnings stable

    Learning: Net sales and earnings stable  Net sales grew to EUR 31 million (2018: 29) Operational EBIT excl. PPA – In the Netherlands, a large spring order received at the EUR million end of March in 2019 instead of April in 2018 19.5 % 20.6 % 20.7 % 19.7 % – First quarter structurally small 16.6 %

  5. Slide 5: Advertising market continued to be under pressure

    Advertising market continued to be under pressure Finnish measured media advertising markets Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 FY 18 Newspapers -7% -12% -8% -13% -12% -11% Magazines -5% -2% -3% -10% -7% -5% TV -7% -1% 1% 1% 1% 0% Radio 7% 4% 2% 11% -4% 4% Online * 2% 2% 2% 3% 7% 3% Total market -2% -2%

  6. Slide 6: Media Finland: Digital subscription sales of HS and Ruutu+ continued to grow

    Media Finland: Digital subscription sales of HS and Ruutu+ continued to grow  Net sales were EUR 132 million (2018: 137) Operational EBIT excl. PPA EUR million – Advertising sales declined primarily in print and TV in line with the market 14.7 % – Total subscription sales declined due to the 13.2 %

  7. Slide 7: Media Netherlands: Net sales and profitability declined partially due to divestments

    Media Netherlands: Net sales and profitability declined partially due to divestments  Net sales amounted to EUR 85 million (2018: 96) Operational EBIT excl. PPA – Half of the decline due to divestments EUR million – Advertising sales impacted by changes in Scoupy product portfolio as well as market

  8. Slide 8: Outlook for 2019 unchanged

    Outlook for 2019 unchanged 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

  9. Slide 9: Financials

    Financials

  10. Slide 10: Relatively minor movements in profitability

    Relatively minor movements in profitability Learning + Net sales growth in the Netherlands Operational EBIT excl. PPA Q1 2019 vs. Q1 2018 - Higher marketing costs in Poland EUR million 0.7 Media + Lower TV production costs and amortisations partially due to the 0.9 -2.2 Finland 0.4 discontinuation o

  11. Slide 11: Rolling free cash flow continued to be on a good level

    Rolling free cash flow continued to be on a good level  Free cash flow was EUR -41 million Free cash flow (2018: -44) EUR million + Implementation of the IFRS 16 150 standard improved the free cash flow by EUR 6 million 100 ‒ Settlement of rental contract related to Discontinued operations in 50 Be

  12. Slide 12: Balance sheet ratios impacted by IFRS 16

    Balance sheet ratios impacted by IFRS 16 Q1 18 Q1 19 IFRS 16 impact Net debt EUR million Net debt 439 531 +183.5 Net debt / Adj. EBITDA 2.0 2.0 +0.5 Long-term target < 2.5 Equity ratio 34.1% 35.3% -4.6pp 2.0  Net financial items increased to EUR -5 million (2018: -3) due to IFRS 16 impact 864 847 5

  13. Slide 13: Financial reporting in 2019

    Financial reporting in 2019 25 July Half-Year Report 2019 25 October Interim Report Q3 2019 13 Interim Report Q1 2019

  14. Slide 14: Appendix

    Appendix

  15. Slide 15: 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

  16. Slide 16: Group key figures Q1 2019

    Group key figures Q1 2019 EUR million Q1 2019 Q1 2018 EUR Q1 2019 Q1 2018 Net sales 248.2 261.6 Operational EPS, continuing Operational EBIT excl. PPA 10.1 10.3 operations 0.01 0.02 margin 4.1% 3.9% Operational EPS 1 0.01 0.03 EBIT 11.9 8.4 EPS, continuing operations 0.05 0.02 Result for the period

  17. Slide 17: 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 Operational EBITDA 326.3 328.5 operations 0.83 0.71 margin 24.8% 24.7% Operational EPS 1 0.84 0.74 Operational EBIT 196.6 179.0 EPS, continuing operat

  18. Slide 18: Learning: Quarterly key figures

    Learning: Quarterly key figures EUR million Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 Net sales 31.4 39.8 136.3 108.3 28.9 Operational EBIT excl. PPA -16.3 -16.9 54.2 44.5 -17.2 margin -51.9% -42.6% 39.8% 41.1% -59.3% EBIT -18.2 -20.0 52.1 42.4 -18.4 Capital expenditure 3.8 6.8 5.2 4.3 3.5 Average number of emp

  19. Slide 19: Media Finland: Quarterly key figures

    Media Finland: Quarterly key figures EUR million Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 Net sales 131.6 144.5 150.7 146.2 137.0 Operational EBIT excl. PPA 14.2 17.1 22.1 19.3 13.5 margin 10.8% 11.8% 14.7% 13.2% 9.9% EBIT 10.0 9.9 19.8 20.5 11.6 Capital expenditure 0.7 1.1 0.7 0.5 1.8 Average number of employ

  20. Slide 20: Media Netherlands: Quarterly key figures

    Media Netherlands: Quarterly key figures EUR million Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 Net sales 85.3 113.8 106.0 108.4 95.8 Operational EBIT excl. PPA 13.4 24.4 19.3 20.3 15.6 margin 15.8% 21.4% 18.2% 18.7% 16.3% EBIT 21.5 13.4 19.1 8.7 16.9 Capital expenditure 0.9 0.8 0.3 0.3 0.9 Average number of emp

  21. Slide 21: Group Operational EBIT excl. PPA

    Group Operational EBIT excl. PPA EUR million Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 FY 18 EBIT 11.9 0.6 88.9 70.6 8.4 168.5 Items affecting comparability (IACs) 4.6 -17.0 -2.1 -9.2 0.2 -28.2 Purchase price allocation (PPA) amortisations -2.7 -2.6 -2.6 -2.4 -2.1 -9.6 Operational EBIT excl. PPA 10.1 20.2 93.6

  22. Slide 22: Operational EBIT excl. PPA by SBU 1/2

    Operational EBIT excl. PPA by SBU 1/2 Quarterly comparison figures for 2018 Learning EUR million Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 FY 18 EBIT -18.2 -20.0 52.1 42.4 -18.4 56.1 Items affecting comparability (IACs) -1.1 -2.2 -1.3 -1.3 -0.4 -5.1 Purchase price allocation (PPA) amortisations -0.8 -0.8 -0.8 -

  23. Slide 23: Operational EBIT excl. PPA by SBU 2/2

    Operational EBIT excl. PPA by SBU 2/2 Quarterly comparison figures for 2018 Media EUR million Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 FY 18 Netherlands EBIT 21.5 13.4 19.1 8.7 16.9 58.0 Items affecting comparability (IACs) 8.9 -10.3 0.5 -10.8 2.0 -18.5 Purchase price allocation (PPA) amortisations -0.8 -0.7 -

  24. Slide 24: IFRS 16 impact on key ratios

    IFRS 16 impact on key ratios  Sanoma has adopted the new IFRS  Main impacts related to the implementation of IFRS 16 standard 16 Leases standard as of 1 Jan 2019 on key ratios in Q1 2019: – Lease agreements are recognised in Operational EBITDA MEUR +6.3 the balance sheet as right-of-use assets and

  25. Slide 25: Debt facility signed in February extended the maturity profile

    Debt facility signed in February extended the maturity profile  Gross external debt EUR 576 million (2018: 458) at the end of Q1 2019 Debt structure Maturity profile EUR million, 31 March 2019 EUR million, 31 March 2019 – Including lease liabilities of EUR 184 million according to IFRS 16  On 4 Fe

  26. Slide 26: Largest shareholders

    Largest shareholders Largest shareholders Holding by category 31 March 2019 Number of shares 2.3 % 1. Jane and Aatos Erkko Foundation 39,820,286 24.4% 18.5 % 14.3 % 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. Rafaela Seppälä

  27. Slide 27: Analyst coverage

    Analyst coverage Carnegie Investment Bank Pia Rosqvist-Heinsalmi +358 9 6187 1232 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 16

  28. 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

  29. Slide 29: 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 — Q1 2019 Earnings Presentation on 6ix