Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — FY2016 Earnings Presentation

30 slides from Sanoma Oyj's earnings presentation, Feb 7, 2017

  1. Slide 1: Full year result 2016

    Full year result 2016 Susan Duinhoven, President and CEO Kim Ignatius, CFO 7 February 2017

  2. Slide 2: Back on track…

    Photo: HS Kuukausiliite 8/2016 Back on track…  Q4: Operational EBIT improvement continued EUR 1.4 million (-8.4)  FY2016: – Operational EBIT doubled to EUR 168 million (84) – Organic net sales stable (+0.1%) – Deleveraging continued as planned: net debt / adj. EBITDA 3.2 (5.1) after redemption of

  3. Slide 3: …faster than expected

    Full year operational EBIT, MEUR …faster than 100 80 expected 60 64 86 2015 2016 40 57 50 45 20 Sanoma Group 0 13 EUR million 2016 2015 -20 -24 Net sales 1,639.1 1,716.7 -38 -40 Media Finland Media BeNe Learning Other Organic growth 0.1% -3.4% Operational EBIT 167.9 83.7 Composition of net sales 201

  4. Slide 4: Media Advertising Markets

    Media Advertising Markets Netherlands Q1/16 Q2/16 Q3/16 Q4/16 FY/15 FY/16 Magazines -8% -8% -9% -3% -13% -7% TV +6% -2% -5% -5% +1% -2% Online* +10% +14% +8% +8% +8% +10% Total market* +4% +4% +1% +1% +1% +3% Finland Q1/16 Q2/16 Q3/16 Q4/16 FY/15 FY/16 Newspapers -6% -5% -3% -4% -6% -4% Magazines -1

  5. Slide 5: FY16 Media BeNe

    FY16 Media BeNe Composition of net sales 2016 Improved performance in Advertising sales 22% print & online portfolio Single copy sales 41% Subscription sales 22%  Operational EBIT up by 34% with all Other* business units contributing 15% – Improvement driven by organic sales *Other sales mainly inc

  6. Slide 6: FY16 Media Finland

    FY16 Media Finland Composition of net sales 2016 9% Transformation ahead of plan Advertising sales Single copy sales 46%  Operational EBIT improved to EUR 50 Subscription sales 37% million (13), all business units contributing Other* – Driven by advertising sales as well as cost and 8% process inno

  7. Slide 7: FY16 Learning

    FY16 Learning Net sales by country 2016 Solid net sales and significant Netherlands Finland 25% 33% profitability improvement Sweden Belgium 16%  Clear improvement in profitability, Poland 17% operational EBIT +27% 9% – Cost innovations, prepublication amortisation schedule changes and De Boeck con

  8. Slide 8: Successful deleveraging

    Successful deleveraging Key figures Hybrid Bond redeemed 1000 950 7 930 900 845 852 855  Cash flow from operations less capex 800 825 802 801 823 766 786 6 increased to EUR 119 million (-30) 700 5  Net debt: EUR 786 million (801) 600 4 – Net debt/EBITDA* adjusted 3.2 times (5.1) 500 after redempti

  9. Slide 9: Increasing dividend / Renewed long-term financial targets

    Increasing dividend Renewed long-term New dividend policy financial targets  For 2016, Board proposes dividend of New target Old target EUR 0.20 (0.10) per share. Net debt / EBITDA < 2.5 < 3.5 Equity ratio 35%-45% 35%-45%  The dividend policy from 2017 onwards: Sanoma aims to pay an increasing div

  10. Slide 10: Outlook for 2017

    Outlook for 2017  For 2017, Sanoma expects that the Group’s consolidated – Net Sales adjusted for structural changes will be stable and – The operational EBIT margin will be around 10%  The outlook is based on the assumption of the advertising market development in Finland and the Netherlands bein

  11. Slide 11: Financials

    Financials 11

  12. Slide 12: Income Statement

    Income Statement EUR million 10–12/2016 10–12/2015 1–12/2016 1–12/2015 Net sales 398.1 409.3 1,639.1 1,716.7 Operational EBITDA 86.7 89.1 452.4 389.7 of net sales 21.8% 21.8% 27.6% 22.7% Amortisations related to TV programme rights -53.8 -51.5 -180.9 -186.2 Amortisations related to prepublication ri

  13. Slide 13: Sanoma cost structure improved

    Sanoma cost structure improved Operational fixed cost split (EUR million) Net sales and operational cost structure and share of net sales 2015: 2016: 48 % 44% 1,717 MEUR 1,639 MEUR EUR million % 900 55 Other 800 53 51 Rents 2015 84 700 168 49 600 47 Office and IT 306 500 45 813 285 713 400 Advertisi

  14. Slide 14: Operational EBIT Development

    Operational EBIT Development Q4/2016 EUR million Q4/2016 Q4/2015 Media BeNe: + Cost innovations + Higher program rights impairment in 2015 Group 1.4 -8.4 - Higher targeted investments to Media BeNe 26.8 10.9 programming - Divestments of non-core, non-strategic Media Finland 9.3 15.6 operations Learn

  15. Slide 15: Income Statement

    Income Statement EUR million 10–12/2016 10–12/2015 1–12/2016 1–12/2015 Slight Improvement in Finland Net sales 398.1 409.3 1,639.1 1,716.7 Operational EBITDA 86.7 89.1 452.4 389.7 Operational EBIT 1.4 -8.4 167.9 83.7 Items affecting comparability -24.6 -122.4 28.7 -206.8 Operating profit -23.2 -131.

  16. Slide 16: Free cash flow

    Free cash flow Cash flow from operations less CAPEX Operational free cash flow (without items effecting comparability) EUR million 10–12/2016 10–12/2015 1–12/2016 1–12/2015 1-12/2016 1-12/2015 Operational EBITDA 86.7 89.1 452.4 389.7 452.4 389.7 TV programme costs -34.1 -46.1 -179.3 -197.6 -179.3 -1

  17. Slide 17: Funding

    Funding 31.12.2016 Debt structure Maturity profile of committed funding as of 31 December 2016, MEUR as of 31 December 2016, MEUR 2718 12 200 275 Bond 2017 87 Bond 2019 212 SBS Term Loan 1125 340 850 SBS RCF 763 CP Finland 551 551 CP Belgium 200 Other Loans 2016 2017 2018 2019 2020 12 Committed fund

  18. Slide 18: Q&A

    Q&A

  19. Slide 19: Appendix

    Appendix 19

  20. Slide 20: Summary of Operating Performance

    Summary of Operating Performance Non-print sales in 2016: EUR 620 million in Media Finland and Media BeNe Three Strategic Business Units TV & Radio Media Media Learning Net sales EUR 350 million Finland BeNe Magazines 2016 2016 2016 Net sales EUR 470 million Net sales Net sales Net sales EUR 580 mil

  21. Slide 21: Media BeNe key figures

    Media BeNe key figures EUR Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 FY/16 FY/15 million Net sales 218.0 179.7 202.6 175.6 227.6 196.4 216.0 189.5 775.9 829.5 Digital 97.1 71.4 82.3 68.2 94.9 70.6 83.9 67.1 318.9 316.6 Print 88.9 85.5 92.1 87.1 102.3 102.6 109.4 105.6 353.5 419.9 Other 32.0 22

  22. Slide 22: Media Finland key figures

    Media Finland key figures EUR Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 FY/16 FY/15 million Net sales 152.4 133.8 150.1 144.5 152.2 131.9 145.7 143.0 580.9 572.8 Digital 64.0 52.2 63.5 58.3 59.3 46.6 56.9 50.0 237.9 212.8 Print 87.2 80.4 85.9 85.3 92.0 84.8 89.7 90.5 338.9 356.9 Other 1.2 1.3

  23. Slide 23: Learning key figures

    Learning key figures EUR Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 FY/16 FY/15 million Net sales 28.0 124.7 97.1 32.9 23.7 121.2 98.0 37.5 282.6 280.3 Netherlands 6.5 25.8 42.4 19.7 6.4 27.5 39.9 21.5 94.4 95.3 Poland 8.0 50.1 8.2 4.5 7.7 56.6 12.8 6.7 70.8 83.9 Finland 5.5 14.5 24.9 3.2 3.4 1

  24. Slide 24: Consumer Confidence

    Consumer Confidence 22.4 30 20 10 15.0 0 -10 -20 -30 -40 Nov Mar Nov Nov Nov Mar May Jul May Jul Mar May Jul Mar May Jul Sep Sep Sep Sep Jan Jan Jan Jan 2013 2014 2015 2016 Netherlands Finland Source: Eurostat 24

  25. Slide 25: Learning – Net Sales and EBIT Seasonality

    Learning – Net Sales and EBIT Seasonality 2012–2016 average for Learning Net sales split Operational EBIT split in relative terms 10% 13% 42% 35% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 25

  26. Slide 26: Sanoma – Largest Shareholders

    Sanoma – Largest Shareholders % of shares 30 December 2016 and votes 1. Jane and Aatos Erkko Foundation 24.46 2. Antti Herlin 11.49 (Holding Manutas Oy: 11.47%, personal: 0.02%) 24,5 % 3. Robin Langenskiöld 7.54 4. Rafaela Seppälä 6.31 5. Helsingin Sanomat Foundation 3.50 46,7 % 6. Ilmarinen Mutual

  27. Slide 27: Analyst Coverage

    Analyst Coverage Carnegie Handelsbanken Nordea Investment Bank Capital Markets Sami Sarkamies Matti Riikonen Rasmus Engberg tel. +358 9 165 59928 tel. +358 9 6187 1231 tel. +46 8 701 5116 Nordea.com/markets Carnegie.fi Handelsbanken.com/ capitalmarkets Pohjola Danske Markets Kimmo Stenvall Equities

  28. Slide 28: Sanoma's Investor Relations

    Sanoma’s Investor Relations Ms Anna Tuominen tel. +358 40 584 6944 anna.tuominen@sanoma.com Mr Anssi Imppola tel. +358 40 832 0128 anssi.imppola@sanoma.com 28

  29. Slide 29: 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

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Sanoma — FY2016 Earnings Presentation on 6ix