Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Q1 2017 Earnings Presentation

37 slides from Sanoma Oyj's earnings presentation, May 2017

  1. Slide 1: Investor Presentation May 2017

    Investor Presentation May 2017

  2. Slide 2: Contents

    Contents  Sanoma Nowadays  Q1 2017 Highlights  SBS transaction  Financials

  3. Slide 3: Three Strategic Business Units

    Three Strategic Business Units Sanoma Nowadays Learning Media Media (pro forma 2016 excluding SBS) Finland BeNe Net sales EUR 1,407 million EUR 280 million EUR 580 million EUR 540 million Non-print sales 38% (EUR 540 million) 54% (EUR 150 million) 42% (EUR 240 million) 27% (EUR 140 million) Operatio

  4. Slide 4: Sanoma Learning

    Sanoma Learning A leading learning company in Northern Europe • Leading positions in countries with some of world’s best educational systems: The Netherlands, Poland, Finland, Belgium and Sweden • Solutions that drive higher learning outcomes, engagement and efficiencies • Forerunning digital learni

  5. Slide 5: Our methods save teachers 8 hours/week, improve learning outcomes and engagement

    Our methods save teachers 8 hours/week, improve learning outcomes and engagement of students We enable learning impact*: By supporting key activities in With comprehensive the teaching and learning cycle learning solutions Learning outcomes  Instruction 95% Prepare Administer  Teacher guides  Exe

  6. Slide 6: Solid financial performer and a leading digital player in Northern European markets

    Solid financial performer and a leading digital player in Northern European markets Key figures Composition of net sales 2016 EUR million 2016 2015 Vocational and other Net sales 283 280 Hybrid Print 13% Organic growth -2.5% -4.0% Operational EBITDA* 95 83 Non-print 47% sales K-12 % 33.7% 29.7% 54%

  7. Slide 7: Sanoma Media Finland

    Sanoma Media Finland Leading media company in Finland  Leading position and strong brands in all media platforms: – Fully integrated TV business with growing viewership – Leading news player in print and online with a hybrid offering – Reaching 97% of Finns every week  Unique offering and solution

  8. Slide 8: Strong brands in all media platforms

    Strong brands in all media platforms Engaging consumer oriented content #1 #2 #1 #1 #1/2 in news in television in audio in Magazines in classifieds 50% 20% 5% 20% 5% 8

  9. Slide 9: Improving profitability in Media Finland

    Improving profitability in Media Finland Key figures Composition of net sales 2016 Other* EUR million 2016 2015 Net sales 581 573 Advertising sales Organic growth 0.7% -4.1% Non-print Operational EBITDA 143 117 sales 42% (38%) % 24.7% 20.4% Operational EBIT 50 13 Subscription sales % 8.5% 2.3% Singl

  10. Slide 10: Sanoma Media BeNe

    Sanoma Media BeNe Profitable market leader in the Netherlands and Belgium  Market leader in magazine print and online domain – Sanoma’s magazines reach 7.5 million readers every month – 10 strong cross-media brands in Women, Home & Deco and Kids & Teens domains; 6 out of TOP 10 brands in the Nether

  11. Slide 11: Creating value through strong media brands

    Creating value through strong media brands International mindfulness & lifestyle brand 98% 2% #2 magazine of NL in reach 96% 4% Strong Women brand with > 1m reach 85% 15% Largest Dutch women brand 85% 16% Biggest Automotive magazine in NL 77% 24% 360 Home Deco brand 75% 25% With e-commerce, print, T

  12. Slide 12: Solid performance

    Solid performance Key figures, pro forma excl. SBS Composition of net sales, 2016 excl. SBS EUR million 2016 2015 Distribution Other * Advertising sales Net sales 544 597 Other Organic growth 1.1% 0.6% Non-print Operational EBITDA 87 76 Online sales & % 16.0% 12.8% 27% (22%) mobile Single copy Opera

  13. Slide 13: Focus on our Strongholds

    Focus on our Strongholds Businesses where we have or can reach a leading position Sanoma pro forma 2016 excl. SBS Learning:  Create top line growth in existing and adjacent markets  Further process improvements driving Learning 20% profitability and cash flow increase 34%  Potential for highly sy

  14. Slide 14: What you can expect Sanoma to be going forward

    What you can expect Sanoma to be going forward Continued Increase in Growth by Resulting in: customer focus : Profitability highly synergetic • Improved three distinct and Cash Flow bolt-on profitability businesses with through acquisitions in • Increasing lean Group- operational our stronghold cash

  15. Slide 15: Continued Performance Improvement

    Operational EBIT margin development, % Continued Performance 250 12% Improvement 10% 200 Outlook for 2017: Net sales, adjusted for structural changes 8% including SBS divestment, will be stable and 150 operational EBIT margin will be above 10% 6% In long term, we aim at: 100 4%  Improved profitabil

  16. Slide 16: Sanoma as an investment

    Sanoma as an investment: Strongholds – leading market positions Ensures competitiveness even in changing markets Stable net sales ’Build and Buy’ incl. highly synergetic bolt-on acquisitions Improved profitability Process and business improvements Strong cash flow Financial and strategic flexibility

  17. Slide 17: Q1 2017 Highlights

    Q1 2017 Highlights 17

  18. Slide 18: Highlights of Q1 2017

    Highlights of Q1 2017  Operational EBIT improved to EUR 11 million (2016: 2) mainly due to cost innovations and one-off corrections  Organic net sales reduced by 2% due to decreased single copy sales and timing difference in Learning in seasonally small quarter  Divestment of SBS, Dutch FTA TV bu

  19. Slide 19: Continuous performance improvement

    Sanoma Q1 2017: Continuous performance improvement EUR million Q1/2017 Q1/2016 Q1 Operational EBIT EUR million Net sales 344 353 19* 2016 Organic growth -2.4% -0.1% 2017 11 9 Operational EBITDA** 82 73 7 % 24.0% 20.8% Operational EBIT 11 2 -2 -6 % 3.3% 0.5% -11 Operational EPS (EUR) 0.02 -0.04 -15 L

  20. Slide 20: Operational EBIT Improved Significantly

    Operational EBIT Improved Significantly Q1/2017 Media BeNe: + Cost innovations EUR million - Higher seasonal loss in SBS +8.0 -4.1 - Lower sales +3.7 11.4 Media + One-off corrections (EUR 4.4 million) Finland: + Cost innovations + Improved sales mix Learning: - Lower sales - New methods in Poland -

  21. Slide 21: Free cash flow improved

    Free cash flow* improved 0 -10 -20 -51 -30 -62 10 -8 -40 -10 1 -50 21 -3 -60 -70 2016 Q1 EBITDA** Financial Net working TV rights Taxes Cash capex 2017 Q1 items capital * Free cash flow = cash flow from operations less capex ** EBITDA adjusted for SBS, capital gains/losses of businesses and share of

  22. Slide 22: Media Advertising Markets

    Media Advertising Markets Preliminary estimate on Netherlands Q1/16 FY/16 Q1/17* Magazines -8% -7% -7% TV +6% -2% -3% Online* +10% +10% +7% Total market* +4% +3% +3% Sanoma’s outlook for 2017 is based on the assumption of the advertising market development Finland Q1/16 FY/16 Q1/17* in Finland and t

  23. Slide 23: SBS transaction

    SBS transaction 23

  24. Slide 24: Sanoma Divests SBS to Talpa

    Announcement April 10: Sanoma Divests SBS to Talpa  SBS is #3 free-to-air TV business in the Dutch market with four TV channels (SBS 6, NET 5, SBS 9 and Veronica)  Sanoma to receive a net cash consideration of EUR 237 million for its 67% stake and 100% ownership of the TV guide business Veronica U

  25. Slide 25: Sanoma post SBS transaction

    More balanced composition of net sales Sanoma Group net sales 2016, pro forma excl. SBS post SBS transaction 100 % 14% 14% 90 %  Improved financial and strategic flexibility 80 % 17% 20% to grow and create value in stronghold 70 % businesses – Reduced leverage with Net debt / adj. EBITDA 60 % 23% t

  26. Slide 26: Financial impacts of SBS divestment

    Capital loss related to SBS, Q1 and FY estimate Financial impacts of SBS divestment  Following the announcement, all assets and liabilities relating to SBS are classified as held for sale in accordance with IFRS5 resulting in a -287 non-cash capital loss for Sanoma -425 – Goodwill decreases to EUR

  27. Slide 27: Financials

    Financials 27

  28. Slide 28: Income Statement

    Income Statement EUR million 1-3/2017 1–3/2016 1–12/2016 Net sales 343.8 353.1 1,639.1 Operational EBITDA 82.4 73.5 452.4 Depreciation and amortisations -71.0 -71.6 -284.6 Amortisations related to TV programme rights -51.3 -51.4 -180.9 Amortisations related to prepublication rights -5.8 -5.2 -20.4 O

  29. Slide 29: Continuous profitability improvement through cost innovation

    Reported operational fixed costs, EUR million Continuous profitability % of net sales improvement through 800 55 700 53 cost innovation 600 48% 51 49 500 47 400 44% 45  Continuous profitability improvement 300 43 41 200 through process and cost innovation 100 39 37 0 35  Discontinuing unprofitable

  30. Slide 30: Improving Free Cash Flow and Dividends

    Improving Free Cash Flow and Dividends New dividend policy as of February 2016: an increasing dividend, equal to 40-60% of FCF 200 150 What to expect in 2017: 100  Net financial items around EUR 25 million 50 (2016: 37 )  Cash capex around 0 EUR 40 million (2016: 34) -50  Change in working capita

  31. Slide 31: Significant debt reduction in recent years

    Net debt, EUR million Significant debt reduction 1 400 6x in recent years 1 200 100 Target 5x 1 000 <2.5 4x  The divestment of SBS will improve the 800 100 100 leverage ratio going forward 3x 1242 600  Net debt / adj. EBITDA in 2016 would have 1135 2x been 2.5x (reported 3.2x), equal to long 400 8

  32. Slide 32: Increasingly efficient funding structure

    Debt structure as of 31 March 2017, EUR million Increasingly efficient (Including SBS loans) funding structure Other; Term SBS loans; 25 MEUR  The main funding sources are commercial loan; 42 MEUR papers, bank facilities and the bond 50 MEUR  The proceeds of the SBS divestment of EUR 237 million w

  33. Slide 33: Sanoma – Largest Shareholders

    Sanoma – Largest Shareholders % of shares Jane and 30 April 2017 and votes Aatos Erkko 1. Jane and Aatos Erkko Foundation 24.46 Foundation 2. Antti Herlin Others 24.5% 11.49 46.7% (Holding Manutas Oy: 11.47%, personal: 0.02%) 3. Robin Langenskiöld 7.54 4. Rafaela Seppälä 6.31 5. Helsingin Sanomat Fo

  34. Slide 34: 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

  35. Slide 35: 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 35 February 2017 Investor Presentation

  36. Slide 36: sSQqnomd

    sSQqnomd

  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

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