Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Investor Presentation (March 2014)
51 slides from Sanoma Oyj's investor presentation, March 2014
Slide 1: Sanoma Corporate Presentation March 2014
Sanoma Corporate Presentation March 2014
Slide 2: Sanoma in brief
Sanoma in brief Group in 2013: Net sales EUR 2,219 million | EBIT excl. non-recurring items EUR 155 million Three Strategic Business Units Media Finland Media Netherlands Learning Other** Sanoma Digital Media Belgium Net sales EUR 100 million Four consumer media platforms Media RUS&CEE TV & radio* N
Slide 3: Sanoma's starting point – consumer media
Sanoma’s starting point – consumer media Strong position to drive multichannel transformation in Finland and the Netherlands Finland and the Netherlands Finland Sanoma #1 in newspapers – Clear #1 in both advertising markets Yle #1 in magazines MTV #1 in online advertising – Strong assets in print,
Slide 4: Sanoma's starting point – learning
Sanoma’s starting point – learning At the forefront of transformation and well positioned to capture profitable growth #1 or #2 in all core markets Sanoma Pro Sanoma Utbildning Finland Sweden ~35% market share in our footprint, the 750M€ Market position: #1 Market position: #2 K12* learning materi
Slide 5: Sanoma Redesign
Sanoma Redesign SAN OM CMecauteaelle|
Slide 6: Trends in consumer media
Trends in consumer media Technology and weak economy driving industry change Changes in consumer behaviour Increased supply of content to consumers Shift to screen-based devices Aggregation models for digital platforms New usage behaviour and occasions Social media Social media and sharing
Slide 7: Industry in transformation – consumer media 1/2
Industry in transformation – consumer media 1/2 Shifts in time and money Time spent across media (Finland and the Netherlands) min/day 400 CAGR 300 Online +40% 200 Linear TV -1% 100 Magazines & -9% newspapers 0 2006 2008 2010 2012 Source: SPOT tijdsbestedings onderzoek; TNS Gallup; IAB Europe. Share
Slide 8: Industry in transformation – consumer media 2/2
Industry in transformation – consumer media 2/2 Consumer media by platform Printed media in challenging structural position Circulation market volume development (indexed) 100 – Growth in engagement and proven transformation path to digitalisation in newspapers 80 60 – New business logics in digit
Slide 9: Industry in transformation – learning
Industry in transformation – learning Learning – K12* educational market Content market shown predictable development EMEA education text book market – Global spending on education ~6% of GDP, and growing development – Print text book market in gradual decline whereas digital EMEA textbook market
Slide 10: Sanoma's strategic choices
Sanoma’s strategic choices Three criteria in redesigning Sanoma’s future business portfolio Improve business Reduce Restore balance mix complexity sheet health and investment capacity 10 March 2014 Corporate Presentation
Slide 11: Sanoma's strategy
Sanoma’s strategy At the core of our strategy is a renewal of our offering in consumer media and learning Strategic aspiration To be #1 in consumer media and learning in operating markets Strategic objectives Lead and grow strategic focus areas Transform and strengthen offering in the core Accelerat
Slide 12: Key elements of Sanoma's strategy
Key elements of Sanoma’s strategy Vision GET THE WORLD Strategic Win in two #1 consumer media company #1 learning company objectives segments in the Netherlands and Finland in all operating markets Lead and Digitalise core brands to maintain #1 reach and Expand from textbooks to services and sol
Slide 13: Consumer media – speeding up transformation
Consumer media – speeding up transformation Clarify portfolio and business focus, renew offerings, reduce costs, increase synergies and drive innovation Four consumer Platforms – planning renewal of offering media platforms – TV, turnaround SBS and establish competitive digital offerings in non-li
Slide 14: Basis for learning operational model
Basis for learning operational model Expanding from textbooks to providing solutions and services Transform and strengthen the core Offering – Focus on expanding from publishing to providing solutions and services Emerging markets Current operating which enhance learning outcomes and teaching work
Slide 15: Cost savings programme extended to EUR 100 million
Cost savings programme extended to EUR 100 million Targeting to save in total EUR 100 million Group-wide cost savings programme communicated in 2012 – Targeting EUR 60 million gross savings – Realised gross savings EUR 21 million in 2013 Programme extended from EUR 60 to 100 million (gross) – An
Slide 16: Summary of operating performance
Summary of operating performance Group in 2013: Net sales EUR 2,219 million | EBIT excl. non-recurring items EUR 155 million Three Strategic Business Units Media Finland Media Netherlands Learning Other** Sanoma Digital Media Belgium Net sales EUR 100 million Four consumer media platforms Media RUS&
Slide 17: Digital consumer media portfolio
Digital consumer media portfolio Sanoma Digital Sanoma Digital unit will manage classifieds, digital content, Media Finland and Media Netherlands will manage digital and lead generation businesses assets of transformation businesses YIXX Sanoma Digital sales 2013 Transformational sales 2013 Net sale
Slide 18: Environment & Outlook
Environment & Outlook SAN OM CMecauteaelle|
Slide 19: Market environment expected to remain weak in 2014
Market environment expected to remain weak in 2014 Market environment Advertising market** Change in % vs. prior year Netherlands FY/2012 Q4/2013 FY/2013 Economy – subdued market conditions Magazines -12 -18 -17 Advertising – transformation from print to digital TV -6 +3 -2 Consumer behaviour
Slide 20: Advertising markets by category 2013 vs. 2012
Advertising markets by category 2013 vs. 2012 Print advertising declining in most categories, mixed development in online and TV Finland* (net development, change in %) Print Online TV Food -20 30 -10 Motor vehicles -9 -3 4 Other classified -9 31 -> 955 Real estate -15 -2 -35 Retail -21 20 27 Medica
Slide 21: Group outlook for 2014 and mid-term
Group outlook for 2014 and mid-term Mid-term outlook introduced Main drivers for the 2014 EBIT outlook Outlook 2013 2014 Mid-term + EUR 100 million gross cost savings programme, actuals outlook outlook (2016->) will realise partly in 2014 Net sales EUR 2,218.7 million, ’Decline ’Return to - Underlyi
Slide 22: Dividend per share EUR 0.10
Dividend per share EUR 0.10* In addition, proposal of the Board of Directors to the AGM of additional dividend of up to EUR 0.20 per share Dividend per share in relation to Earnings per Cash flow from operations > dividends paid share excl. non-recurring items, % 2.00 117 1.75 1.50 92 83 77 1.25 69
Slide 23: Group long-term financial targets
Group long-term financial targets Published on 31 October 2013 Financial targets Net debt / EBITDA* <3.5 Equity ratio 35–45% Gearing <100% Dividend per share >50% of the earnings per share excl. non-recurring items * EBITDA is calculated based on 12-month rolling EBITDA excl. non-recurring items, wh
Slide 24: Financials
Financials SAN OM CMecauteaelle|
Slide 25: Net sales split 2013
Net sales split 2013 2013: Net sales EUR 2,219 million | EBIT excl. non-recurring items EUR 155 million Consumer media Learning Netherlands and Finland 78% of net sales Diversified portfolio with five key markets 4% Netherlands 22% 10% 31% Poland 40% Netherlands 11% Finland Finland Belgium Other 18%
Slide 26: Income Statement
Income Statement Restated* Restated* EUR million 10–12/2013 10–12/2012 1–12/2013 1–12/2012 Net sales 554.3 586.7 2,218.7 2,376.3 EBITDA excl. non-recurring items 106.0 113.8 461.4 518.1 of net sales 19.1% 19.4% 20.8% 21.8% Amortisations related to programme rights -65.6 -45.6 -186.5 -156.9 Amortisat
Slide 27: Net sales development
Net sales development Q4 2013 EUR million 10-12/2013 share of 10-12/2013 2013 organic (%) net sales organic growth growth 586.7 -17.1 Group -5.1 -6.6 -7.6 -3.1 -4.7 554.3 Media 70.2 -4.1 -7.1 News 18.0 -7.0 -6.9 Learning 5.8 -2.7 -0.6 Media: Print advertising explained more than three quarters of th
Slide 28: EBIT excl. non-recurring items development
EBIT excl. non-recurring items development Q4 2013 EUR million 31.8 -18.0 + One-off compensation + Internal cost allocation from Group regarding ICT system to segments + Cost savings + Non-core operations improved - Print advertising sales profitability due to cost savings -0.6 -2.8 +2.6 13.0 + Cost
Slide 29: Free cash flow
Free cash flow Cash flow from operations less cash CAPEX Restated* Restated* EUR million 10–12/2013 10–12/2012 1–12/2013 1–12/2012 EBITDA excl. non-recurring items 106.0 113.8 461.4 523.0 TV programme costs -54.2 -44.9 -202.4 -179.3 Prepublication costs -6.7 -5.9 -31.2 -28.2 Change in working capita
Slide 30: Cost structure & savings programme
Cost structure & savings programme Cost savings programme proceeding well Gross margin increased vs. previous year Cost of sales split (EUR million) and Gross Margin Fixed costs lower in absolute terms 1200 70% Other cost of sales 1000 60% Spending on TV programmes increased 800 50% Purchased
Slide 31: Capital structure
Capital structure 31 December 2013 Net debt EUR 1,135 million (2012: 1,242) Net debt / EBITDA adjusted 4.6 4.3 – Net debt / EBITDA adjusted 4.6 times (3.6) 3.6 <3.5 EBITDA adjusted is calculated based on 12-month 2.8 rolling EBITDA excl. non-recurring items (continuing 2.5 2.0 operations), where
Slide 32: Seasonality between quarters visible in EBIT and cash flow
Seasonality between quarters visible in EBIT and cash flow Net sales EBIT excl. non-recurring items Cash flow from operations (EUR million) (EUR million)* (EUR million)* 700 120 200 600 100 150 500 80 100 400 60 50 300 40 0 200 20 -50 100 0 0 -20 -100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 20
Slide 33: Appendix 1: Sanoma's business units
Appendix 1 Sanoma’s business units
Slide 34: Sanoma Media
Sanoma Media Key figures EUR million FY 2013 10–12/13 7–9/13 4–6/13 1–3/13 FY 2012 10–12/12 7–9/12 4–6/12 1–3/12 Net sales 1,390.1 389.2 322.5 354.9 323.5 1,487.1 406.3 338.1 388.6 354.1 The Netherlands 705.8 199.3 164.7 184.6 157.2 760.4 207.2 173.5 208.1 171.6 Finland 293.4 82.6 67.5 73.7 69.6 301
Slide 35: Media – net sales and EBIT excl. non-recurring items
Media – net sales and EBIT excl. non-recurring items FY 2013 Net sales EUR million 1487.1 -56.4 -29.8 Print advertising explains almost entirely -10.8 1390.1 the decline in advertising sales – Magazine circulation not offset by price increases, decline arising from single copy sales Operating pr
Slide 36: TV – net sales and EBIT seasonality
TV – net sales and EBIT seasonality 2010 - 2013 average for TV* Net sales split EBIT** split 8% 22% 29% 30% 43% 29% 20% 19% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes SBS Netherlands (excluding PPA amortization) and Nelonen Media Finland. **Excluding non-recurring items. 36 March 2014 Corporate Presentation
Slide 37: Magazines – net sales and EBIT seasonality
Magazines – net sales and EBIT seasonality 2010 - 2013 average for Magazines* Net sales split EBIT** split 18% 27% 24% 31% 28% 25% 24% 23% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes Dutch, Finnish, Belgium and Russian operations, excluding TV guides. **Excluding non-recurring items. 37 March 2014 Corporate P
Slide 38: Sanoma Media
Sanoma Media Net sales EBIT excluding non-recurring items* EUR million EUR million 500 70 64 450 436 406 60 55 389 389 400 354 355 342338 50 47 350 324 311 323 40 38 300 280 32 29 250 30 27 25 23 24 23 200 20 150 10 100 -1 50 0 Q1 Q2 Q3 Q4 0 -10 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figur
Slide 39: Sanoma News
Sanoma News Key figures EUR million FY 2013 10–12/13 7–9/13 4–6/13 1–3/13 FY 2012 10–12/12 7–9/12 4–6/12 1–3/12 Net sales 393.5 100.0 92.6 99.8 101.0 422.8 107.6 98.3 106.8 110.0 Helsingin Sanomat 213.3 54.0 50.0 53.0 56.3 224.9 57.1 52.2 56.2 59.3 Ilta-Sanomat 85.6 22.3 20.7 22.7 20.0 84.3 21.1 20.
Slide 40: News – net sales and EBIT excl. non-recurring items
News – net sales and EBIT excl. non-recurring items FY 2013 Net sales EUR million 422.8 -29.2 -7.7 +7.6 393.5 Sales declined due to weak print advertising market In Ilta-Sanomat digital advertising more than offset the decline in print business – digital represents more than half of total advert
Slide 41: News – net sales and EBIT seasonality
News – net sales and EBIT seasonality 2010-2013 average for News Net sales split EBIT* split 26% 25% 24% 29% 19% 24% 25% 28% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Excluding non-recurring items. 41 March 2014 Corporate Presentation
Slide 42: Sanoma News
Sanoma News Net sales EBIT excluding non-recurring items* EUR million EUR million 120 112 112 16 108110 107 108 14 101 103 100 100 98 14 13 100 93 12 12 80 10 10 10 9 9 8 8 60 8 6 6 6 5 40 4 20 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figures have been restated due to a cha
Slide 43: Sanoma Learning
Sanoma Learning Key figures EUR million FY 2013 10–12/13 7–9/13 4–6/13 1–3/13 FY 2012 10–12/12 7–9/12 4–6/12 1–3/12 Net sales 304.6 32.4 123.0 103.5 45.7 312.4 35.5 127.4 111.1 38.4 Learning 305.1 32.7 123.0 103.7 45.7 306.4 35.5 127.4 109.3 34.2 Other businesses 6.5 0.0 0.0 1.8 4.6 Eliminations -0.
Slide 44: Learning – net sales and EBIT seasonality
Learning – net sales and EBIT seasonality 2010-2013 average for learning* Net sales split EBIT** split in relative terms 12% 13% 34% 41% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes only learning business of the Learning segment. **Excluding non-recurring items. 44 March 2014 Corporate Presentation
Slide 45: Sanoma Learning
Sanoma Learning Net sales EBIT excluding non-recurring items* EUR million EUR million 140 60 127 123 47 49 50 50 120 111 110 43 104 40 36 97 31 100 30 80 20 60 10 44 46 38 39 36 0 40 32 -10 -6 -4 20 -20 -15 -20 -22 0 -30 -25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figures have b
Slide 46: Appendix 2: About owners and coverage
Appendix 2 About owners and coverage
Slide 47: Appendix 2: About owners and coverage
Appendix 2 About owners and coverage
Slide 48: Sanoma – largest shareholders
Sanoma – largest shareholders % of shares 28 Feb 2014 and votes 1. Jane and Aatos Erkko Foundation 23.02 23% 2. Robin Langenskiöld 7.54 3. Antti Herlin (Holding Manutas Oy: 5.70%, 6.82 Security Trading 1.11%, personal: 0.02%) 3. Rafaela Seppälä 6.31 5. Helsingin Sanomat Foundation 3.50 6. Ilmarinen
Slide 49: Analyst coverage
Analyst coverage Carnegie Investment Evli Bank Nordea Pohjola Bank Mikko Ervasti Sami Sarkamies Kimmo Stenvall Matti Riikonen tel. +358 9 4766 9205 tel. +358 9 165 59928 tel. +358 10 252 4561 tel. +358 9 6187 1231 Evli.com Nordea.com/markets Pohjola.fi Carnegie.fi Handelsbanken Pareto Se
Slide 50: Sanoma's IR team
Sanoma’s IR team Mr Olli Turunen tel. +358 40 552 8907 olli.turunen@sanoma.com Ms Katariina Hed tel. +358 50 412 5120 katariina.hed@sanoma.com IR team’s joint email address: ir@sanoma.com 50 March 2014 Corporate Presentation
Slide 51: 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