Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Q1 2015 Earnings Presentation

38 slides from Sanoma Oyj's earnings presentation, Apr 29, 2015

  1. Slide 1: Q1 2015 Interim Report

    Q1 2015 Interim Report Harri-Pekka Kaukonen, President and CEO Kim Ignatius, CFO 29 April 2015

  2. Slide 2: Q1 – Mixed Performance in Challenging Environment

    Q1 – Mixed Performance in Challenging Environment Q1 in brief  Organic growth trend improving  Mixed performance across businesses - Media BeNe – stable development, underlying profitability flat - Media Finland – operating performance not satisfactory - Learning – solid, Q1 impacted by major chan

  3. Slide 3: Advertising Market in Q1 – Sluggish Start for the Year

    Advertising Market in Q1 – Sluggish Start for the Year Change* in % vs. prior year Netherlands Total Finland Total Eur million +2% Eur million -3% 162 Newspapers -3% 74 Newspapers -7% 18 Magazines -17% 16 Magazines -14% 169 TV -4% 62 Radio 3% 63 TV -2% 375 Online 8% 12 Radio -4% Belgium Magazines -1

  4. Slide 4: Organic Growth Trend Picking Up

    Organic Growth Trend Picking Up Rolling 12 month growth improving Sanoma Group - organic growth (%) Media BeNe (rolling 12 months)  SBS net sales positive in weak market, 8 driven by distribution sales 6  Press distribution business Aldipress won 4 market share and achieved new clients 2 Media Fin

  5. Slide 5: Digital is Growing

    Digital is Growing New media sales grew by 5% in Q1 Media BeNe & Media Finland Learning Share of rolling 12 month net sales Share of rolling 12 month net sales New Digital, hybrid media sales and services 38% 49% 5 29 April 2015 Q1 2015 Interim Report

  6. Slide 6: Media Finland – Helsingin Sanomat

    Media Finland – Helsingin Sanomat  Helsingin Sanomat reached Total reach historical landmark – over 50% of Daily and evening newspapers subscribers pay for digital element Ilta-Sanomat 2 450 000  Total reach above 2 million the Iltalehti 2 194 000 first time in HS history – by far the Helsingin Sa

  7. Slide 7: Media Finland – Nelonen Media

    Media Finland – Nelonen Media  Good growth in Pay-VOD subscriptions  Ruutu video starts +22%  Radio sales grew by double digits 7 29 April 2015 Q1 2015 Interim Report

  8. Slide 8: Media BeNe – Dutch Content Media

    Media BeNe – Dutch Content Media Circulation sales in Q1 2015  Focus on top brands in the LINDA vtwonen Netherlands is paying off  Circulation sales have increased for +18% +51% many brands, however organic circulation sales development for the focus portfolio was -1% in Q1  Advertising sales und

  9. Slide 9: Media BeNe – SBS TV

    Media BeNe – SBS TV  Sales improved despite decline in Prime-time viewing share viewing share and negative in target group 20-54 yrs advertising market  TV advertising market expected to be weak in Q2  Measures taken to improve performance 19.9 − New programme director 19.5 − FTE reductions − Cos

  10. Slide 10: Learning – Digitalisation Moving Forward

    Learning – Digitalisation Moving Forward Flanders (Belgium) Wallonia (Belgium)  E-learning platform Bingel has spread from Belgium to Sweden and will be available this year also in Finland  Above 70% of primary schools in VAN IN VAN IN Flanders (Belgium) use Bingel Sweden Finland  Every day 60 00

  11. Slide 11: 2015 Business Priorities

    2015 Business Priorities Growth Media Learning  Improve perfomance of core  Digital transformation brands and domains  Secure ecosystem  Grow media market share  Extend to new markets  Speed up digital growth  Develop the enablers  Boost performance of SBS  Cost effectiveness Culture  Inte

  12. Slide 12: Financials

    Financials SAN OM CMecauteaelile|

  13. Slide 13: Learning – Ordering Pattern Changing

    Learning – Ordering Pattern Changing  Learning has strong seasonality – typically around 75% of sales and 160% of profits generated during Q2 and Q3  Industry trend changing, wholesalers optimise working capital by ordering later – will reinforce seasonality and impact Sanoma as well in Q2 2015 an

  14. Slide 14: Income Statement

    Income Statement Cost savings programme run-rate around EUR 93 million EUR million 1–3/2015 1–3/2014 1–12/2014 1-12/2013 Net sales 380.1 438.3 1,901.6 2,083.5 EBITDA excl. non-recurring items 51.9 65.5 392.0 436.6 of net sales 13.6% 14.9% 20.6% 21.0% Amortisations related to TV programme rights -48.

  15. Slide 15: Net Sales Development

    Net Sales Development Q1 2015 1–3/2015 1–3/2014 1–3/2015 Media BeNe: Sales decline is mainly related to EUR million EUR million organic growth, % divestments of non-focus magazine Group 380.1 438.3 -3.8 titles and lower sales in print business. TV distribution sales and Aldipress Media BeNe 189.5 19

  16. Slide 16: EBIT Excluding Non-Recurring Items Development

    EBIT Excluding Non-Recurring Items Development Q1 2015 EUR million 1–3/2015 1–3/2014 Media BeNe: + Cost efficiency Group -19.9 -4.0 + Aldipress performance supported by new clients Media BeNe 5.8 8.3 - Print sales, mainly due to divestments Media Finland -2.1 0.4 - Higher TV programming amortisation

  17. Slide 17: Profitability Impacted by Multiple Elements

    Profitability Impacted by Multiple Elements Q1 2015 Sanoma Group – EBIT excl. nri in Q1 2015 Underlying development declined mainly by: Media Finland -4.0  Suffered mainly from weak advertising sales -3  Operational performance not satisfactory -1.5 Learning -19.9 -5  Netherlands impacted by high

  18. Slide 18: Free Cash Flow

    Free Cash Flow Cash flow from operations less cash CAPEX EUR million 1–3/2015 1–3/2014 1–12/2014 1-12/2013 EBITDA excl. non-recurring items 51.9 65.5 392.0 436.6 TV programme costs -46.4 -44.8 -184.7 -186.4 Prepublication costs -6.8 -7.1 -28.5 -31.2 Change in working capital -30.4 -27.8 22.9 19.8 In

  19. Slide 19: Capital Structure

    Capital Structure 31 March 2015  Net debt: EUR 846 million (Q1 2014: 920) Key figures – Net debt / EBITDA adjusted 4.7 times (4.1) Net debt (lhs) Net debt / EBITDA (rhs)  EBITDA adjusted: 12-month rolling EBITDA excl. non- 1600 6 recurring items, where acquired operations are included 1408 and div

  20. Slide 20: Group Outlook for 2015 and Mid-Term Unchanged

    Group Outlook for 2015 and Mid-Term Unchanged 2014 2015 Mid-term Outlook actuals outlook outlook (2016) Net sales growth EUR 1,901.6 million, ’Around previous year’s ’Return to organic growth’ (organic) organic growth -3.7% development (2014: -3.7%)’ Operating profit margin, EUR 118.8 million, ‘At o

  21. Slide 21: Q&A

    &A SQN OM CMecauaelle|

  22. Slide 22: Appendix

    Appendix ERM aeMiKe] get the world

  23. Slide 23: Consumer confidence

    Consumer confidence Netherlands Finland 30 20 10.2 10 0 8.0 -10 -20 -30 -40 2011 2012 2013 2014 2015 23 29 April 2015 Q1 2015 Interim Report

  24. Slide 24: Net Sales Split

    Net Sales Split Rolling 12 months Media operations Learning Netherlands and Finland 86% of net sales Diversified portfolio with several key markets 44% 33% 42% 26% 16% 12% 12% 9% 4% 2% Netherlands Finland Belgium Other Netherlands Poland Finland Belgium Sweden International Consumer media (BeNe and

  25. Slide 25: Summary of Operating Performance

    Summary of Operating Performance Last 12 months* – New media sales: EUR 560 million in Media Finland and Media BeNe Three Strategic Business Units Media Finland Media BeNe Learning Other** TV & radio Net sales EUR 340 million Russia Magazines Net sales Other operations EUR 600 million Online & mobil

  26. Slide 26: Advertising Market Change in % vs. Prior Year

    Advertising Market* Change in % vs. Prior Year Netherlands FY/’14 Q1/’15 Newspapers -4 -3 Magazines -13 -17 TV +2 -4 Radio +6 +3 Online +11 +8 Total market** +1 +2 Finland FY/’14 Q1/’15 Newspapers -9 -7 Magazines -16 -14 TV -4 -2 Radio +9 -4 Online +12 +6 Total market -4 -3 *NL: Sanoma estimates, FI

  27. Slide 27: Media BeNe

    Media BeNe Key figures 2015 2014 2013 EUR million Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 189.5 870.8 241.5 203.6 231.7 194.0 896.8 Digital 67.1 308.6 90.3 67.8 84.6 65.9 305.3 Online & mobile 20.9 87.2 24.9 20.1 21.8 20.4 90.3 TV 46.2 221.4 65.4 47.7 62.8 45.5 215.0 Print 105.6 479.4 123.2 115.6 1

  28. Slide 28: Media Finland

    Media Finland Key figures 2015 2014 2013 EUR million Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 143.0 637.2 165.5 148.0 164.6 159.0 675.4 Digital 50.0 198.7 53.2 43.5 53.4 48.6 185.9 Online & mobile 21.9 84.8 23.2 18.3 22.1 21.3 74.7 TV & radio 28.0 113.8 30.1 25.1 31.4 27.3 111.2 Print 90.5 432.5 110

  29. Slide 29: Learning

    Learning Key figures 2015 2014 2013 EUR million Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 37.4 292.0 30.9 113.0 106.9 41.2 304.6 Netherlands 21.5 98.1 8.3 24.6 40.7 24.5 95.3 Poland 6.6 86.8 12.6 51.1 17.8 5.2 83.8 Finland 3.8 48.3 4.1 10.6 28.8 4.8 53.5 Belgium 1.5 34.8 2.6 16.7 13.6 1.9 33.8 Sweden

  30. Slide 30: TV – Net Sales and EBIT Seasonality

    TV – Net Sales and EBIT Seasonality 2010–2014 average for Dutch and Finnish TV* Net sales split EBIT** split 5% 22% 29% 30% 44% 29% 20% 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes SBS Netherlands (excluding PPA amortization) and Nelonen Media Finland. **Excluding non-recurring items. 30 29 April 2015 Q1 2

  31. Slide 31: Magazines – Net Sales and EBIT Seasonality

    Magazines – Net Sales and EBIT Seasonality 2010–2014 average for Dutch and Finnish Magazines* Net sales split EBIT** split 18% 23% 27% 29% 28% 26% 24% 24% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes Dutch and Finnish operations, excluding TV guides. 2010-2012 not restated with IFRS 11 ‘Joint Arrangements’. **

  32. Slide 32: Newspapers – Net Sales and EBIT Seasonality

    Newspapers – Net Sales and EBIT Seasonality 2010–2014 average for Newspapers (Finland) incl. digital business Net sales split EBIT* split 26% 25% 23% 30% 19% 24% 25% 29% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Excluding non-recurring items. 32 29 April 2015 Q1 2015 Interim Report

  33. Slide 33: Learning – Net Sales and EBIT Seasonality

    Learning – Net Sales and EBIT Seasonality 2010–2014 average for Learning Net sales split EBIT* split in relative terms 12% 13% 35% 40% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Excluding non-recurring items. 33 29 April 2015 Q1 2015 Interim Report

  34. Slide 34: Sanoma – Largest Shareholders

    Sanoma – Largest Shareholders % of shares 31 March 2015 and votes 1. Jane and Aatos Erkko Foundation 23.18 23.2% 2. Antti Herlin 10.53 (Holding Manutas Oy: 10.51%, personal: 0.02%) 3. Robin Langenskiöld 7.54 4. Rafaela Seppälä 6.31 5. Helsingin Sanomat Foundation 3.50 48.9% 6. Ilmarinen Mutual Pensi

  35. Slide 35: 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 Equities Kimmo

  36. Slide 36: Sanoma's IR Team

    Sanoma’s IR Team Mr Olli Turunen tel. +358 40 552 8907 olli.turunen@sanoma.com Mr Pekka Rouhiainen tel. +358 40 739 5897 pekka.rouhiainen@sanoma.com Ms Katariina Hed tel. +358 50 412 5120 katariina.hed@sanoma.com 36 29 April 2015 Q1 2015 Interim Report

  37. Slide 37: 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

  38. Slide 38: sqnomd

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Sanoma — Q1 2015 Earnings Presentation on 6ix