Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Non-Deal Roadshow (October 2017)

36 slides from Sanoma Oyj's roadshow presentation, October 2017

  1. Slide 1: Roadshow presentation October–December 2017

    Roadshow presentation October – December 2017

  2. Slide 2: Contents

    Contents  Sanoma in brief  Strategy and financial targets  Q3 2017  Appendix 2 Roadshow presentation October-December 2017

  3. Slide 3: Sanoma in brief

    Sanoma in brief

  4. Slide 4: Sanoma at a glance

    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) Operational EBIT margin Above 10% Aroun

  5. Slide 5: Sanoma Learning: A leading learning company in Northern Europe

    Sanoma Learning: Net sales split in 2016 Services A leading learning company in Northern Vocational and other Digital 3% Europe 13% 13% Print Primary 47% 46%  Leading positions in countries with 40% some of world’s best educational 40% systems: The Netherlands, Poland, Secondary Hybrid Finland, Bel

  6. Slide 6: Our methods save teachers' time and improve learning outcomes

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

  7. Slide 7: Sanoma Media Finland: A leading media company in Finland

    Net sales split in 2016 Sanoma Media Finland: Other* A leading media company in Finland Advertising sales Subscription sales Non-print  Leading position and strong brands in sales all media platforms: 42% (38%) – Fully integrated TV business with Single copy sales growing viewership – Leading news

  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 Roadshow presentation October-December 2017

  9. Slide 9: Sanoma Media BeNe: Profitable market leader in the Netherlands and Belgium

    Net sales split in 2016 Sanoma Media BeNe: Profitable market leader in the Distribution Advertising sales Netherlands and Belgium Other Other * Magazines  Market leader in magazine print and online NL Non-print sales Online & domain mobile 27% (22%) – Sanoma’s magazines reach 7.5 million Single rea

  10. Slide 10: 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

  11. Slide 11: Strategy and financial targets

    Strategy and financial targets

  12. Slide 12: Focus on our Strongholds

    Focus on our Strongholds Businesses where we have or can reach a leading position Learning Sanoma 2016 excl. SBS  Create top line growth in existing and adjacent markets  Further process improvements driving 20% profitability and cash flow increase Learning 32%  Potential for highly synergetic bo

  13. Slide 13: 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  Harmonizing, improving processes and 300 43 41 saving costs in businesses and functions, 200 39 100 37 for example in: 0 35 – Sale

  14. Slide 14: Long-term financial targets

    Long-term financial targets Increasing dividend Leverage* below 2.5 Equity ratio 35 – 45% Target payout ratio 40-60% of End of Q3 2017 End of Q3 2017 operating CF less capex  2.2  34.2% 1,40 1 400 6x 50 45 1,20 1 200 5x 40 1,00 1 000 35 4x 30 0,80 800 3x 25 0,60 600 20 2x 0,40 400 15 10 0,20 200 1

  15. Slide 15: 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 flex

  16. Slide 16: Q3

    Q3 2017

  17. Slide 17: Highlights of Q3 2017

    Highlights of Q3 2017  Net sales grew organically 5.4%, driven by Learning – Group’s net sales EUR 405 million – Learning gained share in Poland, in an exceptionally large market due to overlapping educational reforms  Profitability improved by 27% – Group’s operational EBIT EUR 89 million (2016:

  18. Slide 18: Operational EBIT improved across business units

    Q3 2017 Q3 Operational EBIT EUR million Operational EBIT 63 improved across business 51 units EUR million Q3 17 Q3 16 Change Net sales 405 388 adjusted for SBS 16 14 14 Organic growth 5% -2% 10 Net sales 405 438 -3 -5 Operational EBIT 89 70 27% adjusted for SBS Operational EBIT 89 78 Media Media Lea

  19. Slide 19: Q3 Comparable Operational EBIT, adjusted for SBS, improved significantly

    Q3 Comparable Operational EBIT, adjusted for SBS, improved significantly Media BeNe: + Cost innovations in print and online portfolio EUR million - Lower advertising in the Netherlands - Lower sales in Belgium +1.9 +12.0 Media + Cost innovations 89,3 Finland: + Growth in non-print sales + Growth in

  20. Slide 20: Learning YTD Q3

    Quarterly net sales, EUR million Learning YTD Q3 YTD Q3 EUR 285 million (2016: 255) Strong sales growth 153 125 97 100  Net Sales grew organically 10% 33 32 28 – Successful sales of new learning methods in a favorable market situation in Poland – Partial recovery of sales in the Netherlands Q1 Q2 Q

  21. Slide 21: Exceptionally positive market momentum in Poland

    Polish market* benefits in 2017 from Exceptionally positive curriculum reforms market momentum in Poland (index 2016 = 100) 150  Polish market benefits from a unique situation in 2017 of two overlapping curriculum reforms 100  Sanoma has gained share in the Polish market with ‘one-stop-shop’ conce

  22. Slide 22: Media Finland Q3

    Nelonen TV viewing share Media Finland Q3 Commercial TV (10-44 years) Cost innovations continued to 45% 2015 support profitability improvement 2016 40% 2017 35%  Net sales were stable, adjusted for structural changes 30%  Non-print sales continued to increase and 25% represented 42% of total 20% J

  23. Slide 23: Finnish Measured Media Advertising Markets

    Finnish Measured Media Advertising Markets Q1 16 Q2 16 Q3 16 FY 16 Q1 17 Q2 17 Q3 17 Newspapers -6% -5% -3% -4% -9% -12% -12% Magazines -11% -10% -4% -9% -7% -12% -9% TV -2% -4% +2% -1% -6% -7% -4% Radio +15% +3% +2% +3% +4% +0% +8% Online* +5% +18% +17% +13% +8% +1% +10% Total market* -1% -1% +1% +

  24. Slide 24: Media BeNe Q3

    Media BeNe Q3 libelle.nl all-time-high reach in September: Continuous profitability improvement 1.7  EBIT adjusted for SBS improved 9% as a result of cost innovations in the support million unique monthly functions visitors in September  Net sales adjusted for structural changes declined by 5%, in

  25. Slide 25: Strong operational improvement in Media businesses

    Sanoma Q1-Q3 2017 Q1–Q3 Operational EBIT EUR million Strong operational improvement in Media 81 82 businesses 55 56 47 Q1-Q3 Q1-Q3 40 EUR million Change 17 16 Net sales 1,083 1,079 adjusted for SBS Organic growth -13 -7 1% 0% adjusted for SBS Net sales 1,190 1,241 Operational EBIT 185 155 19% Media

  26. Slide 26: Free Cash Flow (12 mr) on a good level

    Free Cash Flow (12 mr) on a good level 150 Quarterly YTD Q3 2017 12mr + Higher EBITDA 100 * + Significantly lower financial items 50 - Working capital change 0 - Higher taxes paid -50 -100 * Exceptional positive working capital Free cash flow = Cash flow from operations less cash capex change in Q4

  27. Slide 27: Leveraging reached long term target level

    Leveraging reached long 1200 7 term target level 1000 6 5  Net debt to adjusted EBITDA* at 2.2 at the 800 end of Q3 (2016: 3.3); reached long term 4 target level of below 2.5 600 3  EUR 237 million from SBS divestment was 400 used to reduce debt 2 200  Net debt EUR 519 million at the end of Q3 1

  28. Slide 28: Lower Financing Costs

    Lower Financing Costs Debt structure as of 30 September 2017 EUR 555 million 19  Net financial items YTD EUR -16 million (2016: -24) 200  Average interest rate during 1-9/2017 down to 2.0% (2016: 2.8%) 294  EUR 200 million of Bond 2017 repaid in March, using commercial papers and bank financing 5

  29. Slide 29: Group Outlook for 2017

    Group Outlook for 2017 As revised on October 24 Sanoma expects that the Group’s  Consolidated net sales adjusted for structural changes, including the divestment of SBS, will be stable  The operational EBIT margin will be above 12%. 29 Q1 2017 Result Roadshow presentation October-December 2017

  30. Slide 30: Largest Shareholders

    Largest Shareholders % of shares 30 September 2017 and votes 24.5 % 1. Jane and Aatos Erkko Foundation 24.46 2. Antti Herlin 11.69 (Holding Manutas Oy: 11.47%, personal: 0.02%) 3. Robin Langenskiöld 7.54 4. Rafaela Seppälä 6.31 46.7 % 5. Helsingin Sanomat Foundation 3.50 6. Ilmarinen Mutual Pension

  31. Slide 31: Appendix

    Appendix

  32. Slide 32: Reported Income Statement

    Reported Income Statement EUR million 7–9/2017 7–9/2016 1–9/2017 1–9/2016 1–12/2016 Net sales 404.6 438.1 1,189.9 1,241.0 1,639.1 Operational EBITDA 124.5 139.3 354.9 365.7 452.4 Operational EBIT 89.3 77.7 182.4 166.5 167.9 Items affecting comparability -3.0 -2.6 -434.4 53.3 28.7 Operating profit 86

  33. Slide 33: Key Indicators

    Key Indicators Adjusted for the SBS divestment Change, Change, EUR million 7–9/2017 7–9/2016 1–9/2017 1–9/2016 1–12/2016 % % Net sales 404.6 387.8 4.3 1,083.1 1,079.1 0.4 1,407.0 EBITDA 121.8 106.9 13.9 289.1 327.4 -11.7 353.3 Operational EBIT 89.3 70.2 27.1 184.8 155.1 19.1 152.6 % of net sales 22.

  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 Inderes t

  35. Slide 35: 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

  36. 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

Sanoma — Non-Deal Roadshow (October 2017) on 6ix