Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Non-Deal Roadshow (January 2021)
36 slides from Sanoma Oyj's roadshow presentation, January 2021
Slide 1: Two focused and leading businesses poised for further growth
Two focused and leading businesses poised for further growth Roadshow presentation, January 2021
Slide 2: Two focused and leading businesses poised for further growth
Two focused and leading businesses poised for ▪ We continue to grow Sanoma Learning, the leading European K12 learning further growth business ▪ We are the leading cross-media company in Finland and continue our successful digital transformation ▪ We have 300-400m€ headroom for M&A and focus on gr
Slide 3: We have accelerated our transformation during the past year
We have accelerated our transformation during the past year ≈ 800m€ invested More than 400m€ new, highly profitable net sales acquired Four acquisitions Regional news Santillana Spain, in K12 learning media business leading provider of services in 2019 in Finland K12 learning content Iddink | Itslea
Slide 4: Acquisition of Santillana Spain expands our footprint in blended learning solutions in Europe
Acquisition of Santillana Spain expands our footprint in blended learning solutions in Europe ▪ Santillana Spain is a leading provider of learning materials, primarily Net sales split 2019 K-12 textbooks, for primary and secondary education in Spain ~90% 6% 7% ▪ Net sales of 122m€ and standalone ope
Slide 5: Learning is now contributing close to 70% of Group earnings
Learning is now contributing close to 70% of Group earnings We have a balanced …B2C more than half of our Learning close to revenue profile with… media sales 70% of earnings Net sales by SBU, % Group net sales by category, % Operational EBIT excl. PPA by SBU, % 5% Other 33% Media Finland 49% Media F
Slide 6: We continue to grow Sanoma Learning with strong focus on K12 learning services
We continue to grow Sanoma Learning with strong focus on K12 learning services… ▪ We focus on growing our K12 learning services Net sales split Pro forma LTM Q3 2020 – K12 being primary, secondary and vocational education – Learning services being blended learning content (print & digital), digital
Slide 7: … and we are the leading European player in a highly fragmented market
… and we are the leading European #1 player in a highly fragmented market #2 ▪ European K12 learning services market ‒ Fragmented market of approx. 4-5bn€ ‒ Serving a total of about 75 million students #1 #1 ▪ Our annual net sales of around 600m€ #1 represent a market share of only about 13% – Alrea
Slide 8: We continue to grow our learning business through M&A
We continue to grow our learning business through M&A M&A headroom ▪ We have a well-developed pipeline and a good momentum for further acquisitions 300-400m€ – Focus on European K12 learning services by 2022 – Both learning content and digital platform businesses – Entering new geographies and expan
Slide 9: Sanoma is the leading media company in Finland successful in its digital transformation
Sanoma is the leading media company in Finland successful in its digital transformation… ▪ Focused media company with scale – News & feature, entertainment and B2B marketing solutions – Highly synergistic, bolt-on acquisitions could be considered ▪ Increasing share of consumer income and subscriptio
Slide 10: … and has proven resilience even in an exceptional year
… and has proven resilience even in an exceptional year ▪ Corona pandemic had a significant impact on Finland’s advertising and events market in 2020 – Our advertising sales declined by 13% in January-September, strong recovery since September ▪ We have been gaining 2-3%-points in market share over
Slide 11: Solid dividend for our shareholders while growing through M&A
Solid dividend for our Dividend per share shareholders while growing € through M&A 60% Dividend policy unchanged Sanoma aims to pay an increasing dividend, 40% equal to 40–60% of annual free cash flow 0,10 0,76 0,20 0,63 0,35 0,77 0,45 0,86 0,50 -0,18 Dividend yield 4.1% as of 30 Nov 2020 2015 2016
Slide 12: Learning and media have a positive impact on society
SANOMA SUSTAINABILITY PROGRAM Learning and media have a positive impact on society Inclusive Sustainable Trustworthy Vital Value learning media data environment people We develop inclusive We provide trusted Finnish We use the data you trust We act to protect We promote equality and learning solutio
Slide 13: Two focused and leading businesses poised for further growth
Two focused and leading businesses poised for ▪ We continue to grow Sanoma Learning, the leading European K12 learning further growth business ▪ We are the leading cross-media company in Finland and continue our successful digital transformation ▪ We have 300-400m€ headroom for M&A and focus on gr
Slide 14: Appendix: Learning
Appendix: Learning
Slide 15: Market leader in European K12 with strong digital footprint and benefits of scale
LEARNING: Market leader in European K12 with strong digital footprint and benefits of scale ▪ Upgrading long-term profitability target to ‘above 23%’ operational EBIT margin excl. PPA ▪ Successfully executing on M&A strategy ▪ Increasing attractiveness due to conversion from single product to subscr
Slide 16: We are a focused European provider of K12 learning products and services
We are a focused European provider of K12 learning products and services Education K12 Higher Corporate Life-long Pre-school Key market sectors Primary Secondary Vocational education learning learning School infrastructure ▪ ICT and other equipment ▪ Distribution & Maintenance services Learning prod
Slide 17: We have developed as a publisher of learning materials into an integrated provider
We have developed as a publisher of learning materials into an integrated provider… Commercial contact Learning products Net sales share* Teachers Administrators & services Blended learning content 60% Material distribution 25% Digital platforms for teaching 5% Digital platforms for administration 5
Slide 18: … with significant increase in usage on platforms supporting teachers during the corona pandemic
… with significant increase in usage on platforms supporting teachers during the corona pandemic ▪ Platforms performed well Usage of selected Sanoma Learning platforms in 2020 Magister to deal with increased Key functionalities, indexed to pre-corona period (09 2019 – 02 2020) Itslearning Itslearnin
Slide 19: Strategic levers support our growth ambitions…
Strategic levers support our growth ambitions… Our growth levers M&A: enter new geographies 3 in K12 and expand our offering in existing markets 2-5% p.a. organic growth target Increase value per student 2 through extending offerings, Classroom as a Service Grow market share 1 by continuing to win i
Slide 20: … with modest market growth over the cycle
… with modest market growth over the cycle ▪ In Poland, fluctuations due to the Value of K12 publishing market* educational reform ending in 2020-2021 120 Spain ▪ In Spain, the LOMLOE reform is 115 Poland Netherlands driving fluctuation in 2022-2024 110 ▪ Dutch market will be modestly 105 growing du
Slide 21: The market is shifting towards a subscription model…
Through greater integration of products and services, the market is shifting towards a subscription model… Blended materials Blended learning content Print Only Print + Free digital Print + Paid digital Subscription Greater benefits for all through subscription ▪ For students: more up-to-date materi
Slide 22: … the pace of this shift differs by country
… the pace of this shift differs by country, but we aim to move to the subscription model across all our European markets… Blended learning content Print Only Print + Free digital Print + Paid digital Subscription Poland Finland Netherlands Spain Rest of Nordics France Belgium Germany UK Sanoma view
Slide 23: … increasing the share of subscription in net sales to above 50%
… increasing the share of subscription in net sales to above 50% ▪ Currently, subscription sales represent Share of subscription in net sales % approx. 25% of our net sales ▪ Ambition supported by various initiatives to raise this to over 50% by 2025 ▪ With countries at different stages of Our digit
Slide 24: Appendix: Media Finland
Appendix: Media Finland
Slide 25: Leading media company successful in digital transformation
▪ Leading positions in news & features, entertainment and B2B marketing solutions ▪ Rapidly increasing digital subscriptions ▪ Stable net sales (+/-2%*) and improving profitability (12-14%*) MEDIA FINLAND: ▪ Important role in Finnish society: Leading media company independent journalism and successf
Slide 26: Finland's leading cross media company
Finland’s leading cross media company 580m€ 10.9% >50% 97% net sales oper. EBIT B2C revenue weekly reach margin excl. PPA Long-term Long-term target for target comparable 12-14% growth +/-2% 26 Roadshow presentation January 2021 All figures LTM Q3 2020 including the acquired regional media and exclu
Slide 27: Outperforming the advertising market despite challenging conditions
Outperforming the advertising market despite challenging conditions ▪ Advertising sales have made a significant recovery Monthly advertising development, Jan-Oct 2020* in H2 2020 as marketing spend has resumed in % many industries not significantly affected by corona Jan Feb Mar Apr May Jun Jul Aug
Slide 28: Long-term digital transformation of media continues
Long-term digital transformation of media continues – corona accelerating digital adoption both in B2C and B2B Finnish media market outlook Market drivers long-term ▪ Consumer willingness to pay for high-quality news, video and audio on a subscription basis is growing +19% +12% +15% ▪ Increasing int
Slide 29: We have leading positions in news & feature, entertainment and B2B marketing solutions
We have leading positions in news & feature, entertainment and B2B marketing solutions ▪ Sustainable demand ▪ Our strong history and position #1 in domestic, ▪ Proven track record in digital independent journalism News & feature transformation ▪ Increasing consumer revenue #1 in domestic entertainme
Slide 30: Integration and synergy capture proceeding to plan
CASE REGIONAL MEDIA Integration and synergy capture proceeding to plan Background Synergy realization ▪ On 30 April 2020, Sanoma acquired Alma Media’s on track to achieve regional news media business in Finland full run rate net synergies of Deal rationale 13m€ by 2022 ▪ Highly synergistic bolt-on a
Slide 31: Subscriptions growing for the fourth year in a row with strong growth in digital
CASE HELSINGIN SANOMAT Subscriptions growing for the fourth year in a row with strong growth in digital 1-2% annual growth in HS subscription base ▪ HS total number of subscriptions over 400k 400k ▪ Number of digital-only subscriptions well above 100k, 30% of total subscription base 30% Print – Alre
Slide 32: Digital transformation increases profit contribution per incremental subscriber, but reduces net sales
Digital transformation increases profit contribution per incremental subscriber, but reduces net sales ▪ Acquiring an additional subscriber Net sales per additional … but profit contribution for digital instead of printed news will subscription* reduces… increases* – Generate 50% the net incremental
Slide 33: Stable net sales driven by digital advertising
CASE ILTA-SANOMAT Stable net sales driven by digital advertising 43m site visits a week +17% YoY ▪ Digitalisation has increased the reach significantly Net sales split print vs. digital – IS reaches the whole of Finland and often audiences Corona effect on who don’t currently subscribe to news print
Slide 34: Our digital transformation is driven by a unique combination of success factors
Our digital transformation is driven by a unique combination of success factors, shared between businesses Success factors across our units Excellent digital Subscription sales B2C and B2B News & feature customer management and cross-sales of experience different products to enable easy use and buyi
Slide 35: 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 36: Please contact our Investor Relations
Please contact our Investor Relations: Kaisa Uurasmaa, Head of IR & CSR M +358 40 560 5601 E kaisa.uurasmaa@sanoma.com ir@sanoma.com www.sanoma.com