Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Q2 2024 Earnings Presentation
33 slides from Sanoma Oyj's earnings presentation, Jul 24, 2024
Slide 1: Strong earnings improvement in both Learning and Media
Half-Year Report 2024 Strong earnings improvement in both Learning and Media Rob Kolkman, President & CEO Alex Green, CFO
Slide 2: Strong earnings improvement in both Learning and Media
H1 2024 Strong earnings improvement in both Learning and Media Net sales Organic net sales Operational EBIT Free cash Net debt / growth excl. PPA flow Adj. EBITDA 563m€ 3% 37m€ -58m€ 2.9 (2023: 559) (2023: 0%) (2023: 23) (2023: -84) (2023: 3.3) ▪ Net sales grew in Learning driven by the Netherlands
Slide 3: Learning H1 2024: Solid organic growth
LEARNING H1 2024 Solid organic growth ▪ Net sales grew 3% to 272m€ (2023: 264) ▪ 5% organic growth driven by – Learning content sales in the Netherlands, Spain and Poland – Partly offset by phasing to Q3 in Finland and Belgium ▪ Divestment of Stark had -5m€ impact in H1 (FY -14m€) ➢ Impact of lower
Slide 4: Improved operational EBIT
LEARNING H1 2024 Operational EBIT excl. PPA Improved operational EBIT m€ ▪ Operational EBIT excl. PPA improved to 22m€ (2023: 15) driven by 20.1 % 19.3 % 19.4 % – Net sales growth 18.7 % 17.1 % 17.2 % 164 – Lower personnel costs attributable to first results of Solar initiatives especially in Spain
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: Stable net sales
MEDIA FINLAND Q2 2024 Operational EBIT excl. PPA Stable net sales m€ ▪ Net sales were 152m€ (2023: 153) ▪ Subscription sales grew by 6% – Good development in Ruutu+ – Continued solid performance in the news & feature driven by digital ▪ Advertising sales grew by 1% driven by digital and TV ▪ Events
Slide 7: Growth in digital and lower paper costs supported earnings
MEDIA FINLAND Q2 2024 Operational EBIT excl. PPA Growth in digital and lower m€ paper costs supported earnings ▪ Operational EBIT excl. PPA improved to 14m€ (2023: 9) 11.2 % – Growth in digital advertising and subscription sales – Lower paper costs 9.0 % 17 – Events phasing (2 festivals held in Q2 i
Slide 8: Outlook for 2024 (unchanged)
Outlook for 2024 (unchanged) ▪ In 2024, Sanoma expects that the Group’s reported net sales will be 1.29‒1.34bn€ (2023: 1.4) ▪ The Group’s operational EBIT excluding PPA is expected to be 160‒180m€ (2023: 175) ▪ Regarding the operating environment Sanoma expects that: – The advertising market in Finl
Slide 9: Financials
Financials
Slide 10: Good development in both businesses
Q2 2024 Operational EBIT excl. PPA Q2 2024 vs. Q2 2023 Good development in both m€ businesses Learning + Stable net sales with some positive mix impact + Lower paper, printing and personnel costs Media + Growth in digital subscription and Finland advertising sales + Lower paper costs + More events h
Slide 11: Improved EPS
Improved EPS ▪ Q2 IACs amounted to -8m€ (2023: -43) and consisted of Key income statement related items – 2m€ costs related to Program Solar m€ Q2 2024 Q2 2023 H1 2024 H1 2023 Operational EBIT excl. PPA 61.0 53.7 37.2 23.0 – Other IACs mostly driven by IACs -8.4 -43.3 -7.0 -45.7 integration costs of
Slide 12: Improved free cash flow
Improved free cash flow Free cash flow m€ ▪ Free cash flow improved to -58m€ (2023: -84) in H1 200 + Higher operational results + Lower investments 150 + Active working capital management, including significantly lower inventories 100 ‒ Higher interests paid ‒ Lower prepayments due to discontinuatio
Slide 13: Deleveraging the balance sheet
Deleveraging the balance Net debt m€ sheet ▪ Net debt 62m€ lower year-on-year, although 3.2 3.3 3.2 3.2 3.3 Long-term increased from Q1 2024 due to its seasonal target 2.8 2.8 2.9 2.9 <3.0 pattern ▪ Net debt / Adj. EBITDA improved to 2.9 (2023: 3.3), below the long-term target of < 3.0 ▪ Equity rati
Slide 14: Q&A
Q&A
Slide 15: Financial reporting in 2024
Financial reporting in 2024 Interim Report Q3 2024 31 October 15 Half-Year Report 2024
Slide 16: Appendix
Appendix
Slide 17: 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 18: Group key figures Q2 2024
Group key figures Q2 2024 m€ Q2 2024 Q2 2023 Q2 2024 Q2 2023 Net sales 342.4 341.3 Average number of employees (FTE) 4,852 5,116 Operational EBITDA 104.4 97.9 Number of employees at the end of 4,963 5,295 margin 30.5% 28.7% the period (FTE) Operational EBIT excl. PPA 61.0 53.7 margin 17.8% 15.7% EBI
Slide 19: Learning: Quarterly key figures
Learning: Quarterly key figures m€ Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Net sales 190.6 81.1 100.4 430.4 188.0 76.3 Operational EBITDA 72.2 -5.2 -5.5 186.4 69.5 -12.9 Operational EBIT excl. PPA 49.8 -27.6 -30.6 164.3 48.3 -33.5 margin 26.1% -34.0% -30.5% 38.2% 25.7% -43.9% IACs -5.8 -3.4 -12.2 -23.2
Slide 20: Media Finland: Quarterly key figures
Media Finland: Quarterly key figures m€ Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Net sales 151.9 139.9 153.1 149.9 153.4 141.5 Operational EBITDA 34.5 29.9 38.6 35.9 31.3 26.6 Operational EBIT excl. PPA 13.7 7.7 9.2 16.8 8.7 5.1 margin 9.0% 5.5% 6.0% 11.2% 5.7% 3.6% IACs -2.5 4.4 -2.3 -0.5 -36.5 -1.9 PPA
Slide 21: Finnish advertising market development
Finnish advertising market development Finnish measured media advertising markets Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Newspapers -17% -20% -13% -14% -11% -7% Magazines -9% -12% -14% -17% -22% -6% TV 2% 3% -6% -5% -4% -1% Radio 3% -4% -4% 0% -8% 5% Online (excl. search and social media) 4% -2% -1% -2
Slide 22: Learning's profitability to reach 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 Learning operations and processes – Brings full benefits from the increased scale of the Learning business Full margin potential will be ▪ Operational efficiencies amounti
Slide 23: Learning content sales vary driven by curriculum renewals
Learning content sales vary driven by curriculum Learning renewals in our major operating countries content 74% of net sales ▪ Expected development of learning K12 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 24: 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) 2024−2027 acquisition method, whereby the cost is allocated m€ to the acquired assets and liabilities assumed at the
Slide 25: Group debt portfolio Q2 2024
Group debt portfolio Q2 2024 External debt structure 1) Maturity profile 2024–2026 m€, 30 June 2024 m€, 30 June 2024 800 2 600 164 100 249 400 200 615m€ 1) 200 300 100 100 0 50 2024 2025 2026 100 Term Loan 2020 RCF (fully unused) Term Loan 2022 Term Loan 2020 Term Loan 2023 Term Loan 2022 Term Loan
Slide 26: 150m€ hybrid bond was issued in March
150m€ hybrid bond was issued in March ▪ The bond seen as the best way to strengthen the balance sheet and to increase financial flexibility that supports the execution of the strategic plan at all times ▪ With the learning business being an increasing part of Sanoma, its annual cyclicality relating
Slide 27: Key factors influencing 2024 performance
Key factors influencing 2024 performance 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 reported net 2−5% − Discontinuation
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 June 2024 Largest shareholders Holding by sector Number of % of Shareholders shares shares 1. Jane and Aatos Erkko Foundation 39,820,286 24.35 3% 12% 2. Holding Manutas Oy 21,870,000 13.37 Private companies 3. Langenskiöld Robin 12,273,371 7.50 17% 4. Seppälä Rafaela 7,654,74
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