Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Q3 2024 Earnings Presentation
33 slides from Sanoma Oyj's earnings presentation, Oct 30, 2024
Slide 1: Interim Report Q1–Q3 2024
Interim Report Q1–Q3 2024 Solid quarter delivering improved operational EBIT for the first nine months Rob Kolkman, President & CEO Alex Green, CFO
Slide 2: Solid quarter delivering improved operational EBIT for the first nine months
Q1–Q3 2024 Solid quarter delivering improved operational EBIT for the first nine months Net sales Organic net sales Operational EBIT Free cash Net debt / development excl. PPA flow Adj. EBITDA 1,103m€ -2% 207m€ 77m€ 2.4 (2023: 1,139) (2023: 3%) (2023: 202) (2023: 35) (2023: 2.8) ▪ Net sales in both
Slide 3: Learning: Lower net sales in line with earlier indications
LEARNING Q1–Q3 2024 Lower net sales in line with earlier indications ▪ Net sales amounted to 668m€ (2023: 695) – In Q3, net sales declined by 21m€ in Spain (-18m€ in Q1–Q3) driven by the ending of the LOMLOE curriculum renewal – This was offset by growth in other learning content markets, in particu
Slide 4: Learning: Stable operational EBIT
LEARNING Q1–Q3 2024 Operational EBIT excl. PPA Stable operational EBIT m€ ▪ Operational EBIT excl. PPA amounted to 178m€ (2023: 179) 20.1 % 19.3 % 19.4 % 19.1 % – Net sales decrease in Spain 18.7 % 17.1 % 17.2 % 164 – Lower paper costs and price increases in other 155 learning content markets suppor
Slide 5: Efficiency program Solar in Learning on track
Efficiency program Solar in Learning on track ▪ Program Solar, launched in October 2023, aims to operational efficiencies amounting to approx. 55m€ annual operational EBIT from Realisation of Solar initiatives 2026 onwards Run-rate of savings in 2026 Program streams touching our key operations acros
Slide 6: Media Finland: Lower net sales attributable to events timing and divestments
MEDIA FINLAND Q3 2024 Lower net sales attributable to events timing and divestments ▪ Net sales were 144m€ (2023: 150) ▪ Subscription sales grew by 4% – Good development in Ruutu+ – Continued solid performance in the digital news & feature subscriptions ▪ Advertising sales stable with growth in digi
Slide 7: Media Finland: Solid quarterly earnings
MEDIA FINLAND Q3 2024 Operational EBIT excl. PPA Solid quarterly earnings m€ ▪ Operational EBIT excl. PPA improved to 18m€ (2023: 17) – Continued growth in digital subscription sales 12.2 % 11.2 % more than offsetting the decline in print – Growth in digital advertising sales offsetting the 9.0 % 18
Slide 8: Outlook for 2024 (narrowed)
Outlook for 2024 (narrowed) ▪ In 2024, Sanoma expects that the Group’s reported net sales will be 1.32‒1.34bn€ (2023: 1.4) ▪ The Group’s operational EBIT excluding PPA is expected to be 170‒180m€ (2023: 175) ▪ Regarding the operating environment Sanoma expects that: – The advertising market in Finla
Slide 9: Financials
Financials
Slide 10: Operational earnings impacted by Learning net sales
Q3 2024 Operational EBIT excl. PPA Q3 2024 vs. Q3 2023 Operational earnings impacted m€ by Learning net sales Learning + Growth in learning content sales esp. in the Netherlands and Poland 0 + Lower paper costs – Lower sales in Spain Media + Growth in digital subscription and Finland advertising sal
Slide 11: Improved operational EPS in Q1–Q3, impairment and Solar costs booked in Q3
Improved operational EPS in Q1–Q3, impairment and Solar costs booked in Q3 ▪ Q3 IACs increased to -44m€ Key income statement related items (2023: -22) and consisted of m€ Q3 2024 Q3 2023 Q1–Q3 2024 Q1–Q3 2023 – 27m€ impairment linked to the future Operational EBIT excl. PPA 170.0 179.4 207.3 202.4 r
Slide 12: Strong improvement in free cash flow
Strong improvement in free Free cash flow m€ cash flow ▪ Free cash flow improved to 77m€ (2023: 35) 200 in Q1–Q3 + Higher operational results mainly in Media Finland 150 + Active working capital management across the business + Lower investments in prepublication costs partly driven 100 by Solar + L
Slide 13: Good progress in deleveraging the balance sheet
Good progress in Net debt m€ deleveraging the balance sheet 3.3 3.2 3.2 3.3 Long-term ▪ Net debt significantly lower vs. previous year target 2.9 2.9 <3.0 2.8 2.8 and end of June 2.4 ▪ Net debt / Adj. EBITDA improved to 2.4 (2023: 2.8), below the long-term target of < 3.0 ▪ Equity ratio at 40.8% (20
Slide 14: Refinancing improved the maturity of external debt
Refinancing improved the Maturity profile of external debt m€, 30 September 2024 maturity of external debt ▪ 150m€ Social Bond issued on 5 September – Maturity 3 years – Fixed interest rate 4.000% – Issue price 99.872% 100 – Funds used to finance or refinance expenditures, incl. improving access to
Slide 15: Q&A
Q&A
Slide 16: Financial reporting in 2025
Financial reporting in 2025 Full-Year Result 2024 11 February Interim Report Q1 2025 29 April Half-Year Report 2025 30 July Interim Report Q3 2025 30 October Financial Statements and Directors’ Report for 2024 week 14 AGM 2025 29 April 16 Interim Report Q1-Q3 2024
Slide 17: Appendix
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Slide 18: Sanoma in 2023
Sanoma in 2023 Learning Media Finland Net sales 795m€ Net sales 598m€ NET SALES Non-print 48% Non-print 54% 1,393m€ Margin 18.7% Margin 6.7% NON-PRINT SALES 51% Net sales, m€ Net sales, m€ Netherlands Subscription OPERATIONAL EBIT MARGIN Spain 12.6% Non-print advertising Poland Italy Print advertisi
Slide 19: Group key figures Q3 2024
Group key figures Q3 2024 m€ Q3 2024 Q3 2023 Q3 2024 Q3 2023 Net sales 540.0 580.3 Average number of employees (FTE) 4,858 5,141 Operational EBITDA 211.8 220.9 Number of employees at the end of 4,751 5,095 margin 39.2% 38.1% the period (FTE) Operational EBIT excl. PPA 170.0 179.4 margin 31.5% 30.9%
Slide 20: Learning: Quarterly key figures
Learning: Quarterly key figures m€ Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Net sales 395.9 190.6 81.1 100.4 430.4 188.0 76.3 Operational EBITDA 178.9 72.2 -5.2 -5.5 186.4 69.5 -12.9 Operational EBIT excl. PPA 155.2 49.8 -27.6 -30.6 164.3 48.3 -33.5 margin 39.2% 26.1% -34.0% -30.5% 38.2% 25.7% -43.
Slide 21: Media Finland: Quarterly key figures
Media Finland: Quarterly key figures m€ Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Net sales 144.1 151.9 139.9 153.1 149.9 153.4 141.5 Operational EBITDA 35.3 34.5 29.9 38.6 35.9 31.3 26.6 Operational EBIT excl. PPA 17.6 13.7 7.7 9.2 16.8 8.7 5.1 margin 12.2% 9.0% 5.5% 6.0% 11.2% 5.7% 3.6% IACs -1.5
Slide 22: Finnish advertising market development
Finnish advertising market development Finnish measured media advertising markets Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Newspapers -17% -17% -20% -13% -14% -11% -7% Magazines -12% -9% -12% -14% -17% -22% -6% TV 3% 2% 3% -6% -5% -4% -1% Radio -5% 3% -4% -4% 0% -8% 5% Online 3% 4% -2% -1% -2% -4%
Slide 23: Estimated amortisations of acquired intangible assets (PPA) of the Group
Estimated amortisations of acquired intangible assets (PPA) of the Group ▪ Acquired subsidiaries are consolidated using the Estimated amortisations of acquired intangible assets (PPA) 2024−202 acquisition method, whereby the cost is allocated m€ to the acquired assets and liabilities assumed at thei
Slide 24: Group debt portfolio Q3 2024
Group debt portfolio Q3 2024 External debt structure 1) Maturity profile of external debt m€, 30 September 2024 m€, 30 September 2024 600 37 100 100 400 150 249 536m€ 1) 200 31 269 199 50 150 0 2024 2025 2026 2027 Term Loan 2022 Social Bond Term Loan 2022 RCF (fully unused) Term Loan 2023 Commercial
Slide 25: Learning content sales vary driven by curriculum renewals in our major operating countries
Learning content sales vary driven by curriculum Learning renewals in our major operating countries content 74% of net sales ▪ Expected development of learning K 2 publishing market values in Sanoma’s key in 2023 content sales in 2024−2026 is a operating countries indexed to 2020 function of changes
Slide 26: Learning's profitability to reach its long-term target of 23% in 2026 through program Solar
Learning’s profitability to reach its long-term target of 23% in 2026 through program Solar ▪ Program “Solar” aims to streamline earning operations and processes – Brings full benefits from the increased scale of the Learning business Full margin potential will be ▪ Operational efficiencies amountin
Slide 27: Key factors influencing 2024 performance
Key factors influencing 2024 performance As published on 11 February 2024 Expected 2024 Long-term targets Learning financial impact y-o-y for SBUs unchanged ▪ Comparable net sales impacted by ▪ Organic growth − Lower cycle in Spain mitigated by growth in other learning content businesses ▪ Lower rep
Slide 28: Three strategic focus areas to deliver increasing profitability and prepare for future growth
Three strategic focus areas to deliver increasing profitability and prepare for future growth Mid-term focus areas 1. Increasing profitability of Learning and Media Finland Our purpose Through learning and media, we have 2. Growing organically and through smaller in-market acquisitions a positive im
Slide 29: 2030 growth ambition and long-term financial targets unchanged
2030 growth ambition and long-term financial targets unchanged ▪ We are aiming for the Group’s net sales to be over 2bn€ by 2030, with at least 75% coming from the learning business – Over the cycle, organic growth in-line with long-term targets in Learning and Media Finland – In Learning, focus on
Slide 30: Largest shareholders
Largest shareholders 30 September 2024 Largest shareholders Holding by sector Number of % of Shareholders shares shares 1. Jane and Aatos Erkko Foundation 39,820,286 24.35 3% 13% 2. Holding Manutas Oy 21,870,000 13.37 Private companies 3. Langenskiöld Robin 12,273,371 7.50 17% 4. Seppälä Rafaela 7,6
Slide 31: Analyst coverage
Analyst coverage Carnegie Investment Bank Pia Rosqvist-Heinsalmi +358 9 6187 1232 Danske Markets Equities Sami Sarkamies +358 10 546 8468 Inderes Petri Gostowski +358 40 821 5982 Kepler Cheuvreux Kristoffer Carleskär +44 207 621 5149 Nordea Sanna Perälä +358 40 779 0845 OP Corporate Bank Joona Harja
Slide 32: 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 33: 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