Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Investor Presentation (August 2015)

51 slides from Sanoma Oyj's investor presentation, August 2015

  1. Slide 1: Sanoma Corporate Presentation

    Sanoma Corporate Presentation August 2015

  2. Slide 2: Agenda

    1. Sanoma in brief 2. Sanoma’s strategy 3. Q2 2015 Interim Report 4. Appendix

  3. Slide 3: Sanoma in a Nutshell

    Sanoma in a Nutshell 2014 figures 1,902 118.8 EBIT excluding non- Net sales, EUR million recurring items, EUR million 7,583 FTEs

  4. Slide 4: Strong Brands, Great Content, Loyal Customers and Consumers

    Strong Brands, Great Content, Loyal Customers and Consumers 4 August 2015

  5. Slide 5: Market Leader in Consumer Media

    Market Leader in Consumer Media Finland Netherlands Sanoma Sanoma Yle De Persgroep NL Alma Media Telegraaf Media MTV #1 Wegener #1 TS-Yhtymä RTL NL Keskisuomalainen Audax Otavamedia STER EUR million 0 200 400 600 800 EUR million 0 200 400 600 800 #1 in newspapers #1 in consumer magazines #1 in magaz

  6. Slide 6: Market Leader in Learning

    Market Leader in Learning Finland Sweden Netherlands Market position: Market position: Market position: #1 #2 #2 Net sales: Net sales: Net sales: ~ EUR 50 million ~ EUR 25 million ~ EUR 100 million Belgium Poland Global market Market position: Market position: Market position: a #1 #1 leading player

  7. Slide 7: Sanoma's Structure and Key Figures

    Sanoma’s Structure and Key Figures 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 Magazines Net sales EUR 580 million Online & mobile Net sales Q3/2014 –

  8. Slide 8: Sanoma's strategy

    1. Sanoma in brief 2. Sanoma’s strategy 3. Q2 2015 Interim Report 4. Appendix

  9. Slide 9: Quick Look at Sanoma's Strategy

    Quick Look at Sanoma’s Strategy Mission: Get the world – Sanoma helps people access and understand the world Our strategic aspiration Market leader in consumer media and learning in our countries of operation Our strategic goals Growth and transformation Renewal of products and services Growth 2016

  10. Slide 10: Strategic Implementation

    Strategic Implementation Mission: Get the world – Sanoma helps people access and understand the world Our strategic aspiration Market leader in consumer media and learning in our countries of operation Our strategic goals Growth and transformation Renewal of products and services Growth 2016 Profita

  11. Slide 11: Organic Growth Development

    Organic Growth Development Rolling 12 month organic sales growth Media BeNe 4  Sale of 23 titles improves growth profile  New sales generated around strong brands 2 0 Media Finland  Good growth in digital sales of news brands -2 -3.2  Magazines transformation on its way with -3.9 -3.7 digital co

  12. Slide 12: New Media Sales Flat in Q2

    New Media Sales Flat in Q2 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 39% 50% 12 August 2015

  13. Slide 13: Media Finland – Responding to Performance Challenges

    Media Finland – Responding to Performance Challenges Challenges in market continue Accelerating implementation of strategy Change in GDP Q1 2012 – Q1 2015 (%)*  Performance in Media Finland 10 8 6 5 below expectations 4 4 4 2 2 1  Change programme in Media Finland ongoing, addressing France Sweden

  14. Slide 14: Media BeNe – SBS Has Positive Momentum

    Media BeNe – SBS Has Positive Momentum Viewing share in June highest for SBS since August 2011  Viewing share on improving path Prime-time share – Viewing share increased to 23.6% in June of viewing in 20-54 target group  TV advertising market declined by 7% in Q2 21.9 – Advertising share increase

  15. Slide 15: Domain Approach Paying Off – Case vtwonen

    Domain Approach Paying Off – Case vtwonen Sundays 18:30-19:30 on SBS6 10 episodes in 2014 Viewers per episode  Leading Dutch home deco brand (in thousands) Voiko näitä jotenkin yhdistää? 550  New sales built around magazine brand 470 475 485 505 380 6: 550k 415 375 7: 330k 330 260 (TV show / E-com

  16. Slide 16: Good Growth in Digital Sales of News Brands

    Good Growth in Digital Sales of News Brands Ilta-Sanomat and Helsingin Sanomat Ilta-Sanomat continues strong Growth in digital sales growth in digital  Very strong position in mobile. Mobile sales developing extremely well +10%  Strong growth in ISTV video starts and sales Q2 2014 Q2 2015 HS digit

  17. Slide 17: Learning – Highlights of Success

    Learning – Highlights of Success Organic sales growth in 2014 + 1.0% Teacher Online Services platform in Finland reaches 90%  Successful new digital tools and services penetration of teachers  H1 2015 organic growth negative due to Of primary school pupils in change in ordering pattern Already 50%

  18. Slide 18: Strategic Implementation

    Strategic Implementation Mission: Get the world – Sanoma helps people access and understand the world Our strategic aspiration Market leader in consumer media and learning in our countries of operation Our strategic goals Growth and transformation Profitability & balance sheet Cost-savings programme

  19. Slide 19: Significant Cash Flow from Sale of Real Estate and Non-Core Operations

    Significant Cash Flow from Sale of Real Estate and Non-Core Operations Sold media operations Cash flow from divestments (cumulative) • Belgium (TV & 3 magazine titles*) 450 EUR million • Bulgaria (all operations) • Croatia (all operations) Media operations Other operations 400 • Czech Republic (all

  20. Slide 20: Cost Savings Programme – Achieved in Advance

    Cost Savings Programme – EUR 100 Million Achieved in Advance  EUR 100 million cost savings Cost savings - annual run rate 100 programme completed ahead of 100 EUR million 93 91 schedule 90  Savings of EUR 25 million achieved 80 in Q2 2015, implying annual run- 70 61 rate of EUR 100 million 60 50 

  21. Slide 21: Strategic Implementation

    Strategic Implementation Mission: Get the world – Sanoma helps people access and understand the world Our strategic aspiration Market leader in consumer media and learning in our countries of operation Our strategic goals Growth and transformation Profitability & balance sheet – ”fund the journey” O

  22. Slide 22: Major Changes in Organisation

    Major Changes in Organisation  Finnish organizations combined, restructuring and new operation model in multiple business units  New talents secured in top management layers  New Digital unit + new Head of Digital  Renewal of commercial operations, new CCOs in Netherlands and Finland  Centralis

  23. Slide 23: 2015 Business Priorities

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

  24. Slide 24: Q2 2015 Interim Report

    1. Sanoma in brief 2. Sanoma’s strategy 3. Q2 2015 Interim Report 4. Appendix

  25. Slide 25: Weak Performance in Finland – Outlook Revised

    Weak Performance in Finland – Outlook for 2015 and Mid-Term (2016) Revised  Operating performance in Q2 2015 - Media BeNe – Stable, TV viewing share builds positive momentum - Learning – Timing shifts and Polish situation impacting business, but full-year outlook solid - Media Finland – Performance

  26. Slide 26: Advertising Market Remains Difficult

    Advertising Market Remains Difficult Finnish market negative despite positive boost in April (+4%) due to parliament elections Netherlands FY/’14 Q1/’15 Q2/’15 Newspapers -4 -3 -3 Magazines -12 -15 -15 TV +2 -4 -7 Radio +6 +3 +3 Online +11 +9 +9 Total market* +4 +2 +1 Finland FY/’14 Q1/’15 Q2/’15 Ne

  27. Slide 27: Group Outlook for 2015 Revised, Mid-Term Outlook Withdrawn

    Group Outlook for 2015 Revised, Mid-Term Outlook (2016) Withdrawn on 16 July 2015 Outlook 2014 Previous outlook New outlook Mid-term actuals for 2015 for 2015 published outlook (2016) on 16 July 2015 Net sales growth EUR 1,901.6 million, “Around previous “Around previous No outlook for 2016 (organic

  28. Slide 28: Reasons for Changes in Outlooks

    Reasons for Changes in Outlooks H2 2015 and FY 2016 expected to be weaker than anticipated – Media Finland the main reason Media BeNe Group EBIT excl. non-recurring items,  Overall no changes margin (%) Media Finland 6.4 6.2  Depressed market development  Operational underperformance, incl. addit

  29. Slide 29: Amortisations in Finnish TV Operations

    Amortisations in Finnish TV Operations  International TV rights – Demand for domestic TV content has increased in highly competitive market – Sanoma booked in Q2 2015 additional amortisations of EUR 6 million related to previously acquired international TV rights of series and movies  TV rights fo

  30. Slide 30: Learning – Timing Shifts Impacting Quarterly EBIT

    Learning – Timing Shifts Impacting Quarterly EBIT  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 – the impact was visible in Q1 and Q2 2015 and will be

  31. Slide 31: Income Statement

    Income Statement Reported figures impacted by multiple divestments EUR million 4–6/2015 4–6/2014 1–6/2015 1–6/2014 1-12/2014 Net sales 468.8 533.1 848.9 971.3 1,901.6 EBITDA excl. non-recurring items 123.2 133.4 175.1 198.9 392.0 of net sales 26.3% 25.0% 20.6% 20.5% 20.6% Amortisations related to TV

  32. Slide 32: Net Sales Development

    Net Sales Development Q2 2015 Media BeNe: TV net sales flat thanks to market share 4–6/2015 4–6/2014 4–6/2015 EUR million EUR million organic growth, % gains and higher distribution sales. Print magazine sales declined, driven by Group 468.8 533.1 -6.6 divestments and closing of titles. Media BeNe 2

  33. Slide 33: EBIT Excluding Non-Recurring Items Development

    EBIT Excluding Non-Recurring Items Development Q2 2015 EUR million 4–6/2015 4–6/2014 Media BeNe: + Cost efficiency Group 49.4 66.3 + Solid quarter for SBS driven by better viewing and advertising share Media BeNe 27.1 25.7 + Aldipress continued on positive track Media Finland -2.5 7.5 - Print sales,

  34. Slide 34: Free Cash Flow

    Free Cash Flow Cash flow from operations less cash CAPEX EUR million 4–6/2015 4–6/2014 1–6/2015 1–6/2014 1-12/2014 EBITDA excl. non-recurring items 123.2 133.4 175.1 198.9 392.0 TV programme costs -44.6 -41.5 -89.1 -86.3 -184.7 Prepublication costs -7.4 -7.1 -14.2 -14.2 -28.5 Change in working capit

  35. Slide 35: Capital Structure

    Capital Structure 30 June 2015  Net debt: EUR 930 million (Q2 2014: 950) Key figures – Net debt / EBITDA adjusted 5.5 times (4.2) 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 dive

  36. Slide 36: Appendix

    1. Sanoma in brief 2. Sanoma’s strategy 3. Q2 2015 Interim Report 4. Appendix

  37. Slide 37: 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 45% 34% 41% 25% 15% 13% 12% 9% 5% 1% Netherlands Finland Belgium Other Netherlands Poland Finland Belgium Sweden International Consumer media (BeNe and

  38. Slide 38: Consumer confidence

    Consumer confidence Netherlands Finland 30 20 12.1 10 0 10.0 -10 -20 -30 -40 2011 2012 2013 2014 2015 38 August 2015

  39. Slide 39: Sanoma Group

    Sanoma Group Net sales EUR 1,902 million, EBIT excl. nri EUR 118.8 million Net sales by type of sales, FY 2014 Cost structure FY 2014* Other & elim. Transport and distribution 10 % 5% TV & Radio 18 % Paper, raw materials, supplies, printing 10 % Learning 15 % Other cost of sales 10 % Total cost of s

  40. Slide 40: Media BeNe

    Media BeNe Net sales EUR 870.8 million, EBIT excl. nri EUR 71.2 million Net sales by type of sales, FY 2014 Cost structure FY 2014* Transport and distribution 15 % Other 17% Print circulation Paper, raw materials, supplies, printing 10 % 42% Other cost of sales 15 % TV & radio 22% Total cost of sale

  41. Slide 41: Media Finland

    Media Finland Net sales EUR 637.2 million, EBIT excl. nri EUR 23.5 million Net sales by type of sales, FY 2014 Cost structure FY 2014* Other 10% Transport and distribution 15 % TV & radio 15% Paper, raw materials, supplies, printing 10 % Print circ. 42% Other cost of sales 10 % Online & mobile Total

  42. Slide 42: Learning

    Learning Net sales EUR 292.0 million, EBIT excl. nri EUR 51.4 million Net sales by type of sales, FY 2014 Cost structure FY 2014* Pure 33% Transport and distribution 5% digital 14% 25% Paper, raw materials, supplies, printing 10 % 16% 12% Other cost of sales 10 % 9% Print 4% Hybrid 52% Total cost of

  43. Slide 43: Media BeNe Key Figures

    Media BeNe Key figures 2015 2014 2013 EUR million Q2 Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 216.0 189.5 870.8 241.5 203.6 231.7 194.0 896.8 Digital 83.9 67.1 308.6 90.3 67.8 84.6 65.9 305.3 Online & mobile 21.6 20.9 87.2 24.9 20.1 21.8 20.4 90.3 TV 62.3 46.2 221.4 65.4 47.7 62.8 45.5 215.0 Print 1

  44. Slide 44: Media Finland Key Figures

    Media Finland Key figures 2015 2014 2013 EUR million Q2 Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 145.7 143.0 637.2 165.5 148.0 164.6 159.0 675.4 Digital 56.9 50.0 198.7 53.2 43.5 53.4 48.6 185.9 Online & mobile 25.7 21.9 84.8 23.2 18.3 22.1 21.3 74.7 TV & radio 31.2 28.0 113.8 30.1 25.1 31.4 27.3 11

  45. Slide 45: Learning Key Figures

    Learning Key figures 2015 2014 2013 EUR million Q2 Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 97.9 37.4 292.0 30.9 113.0 106.9 41.2 304.6 Netherlands 39.9 21.5 98.1 8.3 24.6 40.7 24.5 95.3 Poland 12.8 6.6 86.8 12.6 51.1 17.8 5.2 83.8 Finland 25.5 3.8 48.3 4.1 10.6 28.8 4.8 53.5 Belgium 14.3 1.5 34.8 2

  46. Slide 46: Dividend Per Share EUR 0.20

    Dividend Per Share EUR 0.20 Dividend per share and dividend yield* Payout ratio (DPS / EPS excluding non-recurring items, %) 6.8% 8.1% 0.60 0.60 77 69 61 4.3% >50% 1.6% 0.20 23 0.10 2011 2012 2013 2014 2011 2012 2013 2014 Dividend policy Sanoma conducts an active dividend policy and primarily pays o

  47. Slide 47: Sanoma – Largest Shareholders

    Sanoma – Largest Shareholders % of shares 31 July 2015 and votes 23.2% 1. Jane and Aatos Erkko Foundation 23.18 2. Antti Herlin (Holding Manutas Oy: 10.77%, 10.79 personal: 0.02%) 3. Robin Langenskiöld 7.54 4. Rafaela Seppälä 6.31 48.7% 5. Helsingin Sanomat Foundation 3.50 10.8% 6. Ilmarinen Mutual

  48. Slide 48: Analyst Coverage

    Analyst Coverage  Carnegie Investment  Handelsbanken  Nordea Bank Capital Markets Sami Sarkamies Matti Riikonen Rasmus Enberg tel. +358 9 165 59928 tel. +358 9 6187 1231 tel. +46 8 701 5116 Nordea.com/markets Carnegie.fi Handelsbanken.com/  Pohjola  Danske Markets Equities capitalmarkets Kimmo

  49. Slide 49: 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 49 August 2015

  50. Slide 50: 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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