Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Non-Deal Roadshow (March 2021)

52 slides from Sanoma Oyj's roadshow presentation, March 2021

  1. Slide 1: Two focused and leading businesses poised for further growth

    Two focused and leading businesses poised for further growth Roadshow presentation, March 2021

  2. 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

  3. Slide 3: FY 2020: Strong operational EBIT margin in an exceptional year

    FY 2020: Strong operational EBIT margin in an exceptional year Net sales Operational EBIT Operational EBIT Free cash Net debt / excl. PPA margin excl. PPA flow Adj. EBITDA 1,062m€ 157m€ 14.7% 95m€ 2.6 (2019: 913) (2019: 138) (2019: 15.1%) (2019: 131) (2019: 2.7)  Net sales grew by 49% in Learning a

  4. Slide 4: Our two focused and leading businesses in brief

    Our two focused and leading businesses in brief LEARNING MEDIA FINLAND Market leader in European K12 with strong Finland’s leading cross media company digital footprint and benefits of scale 500m€ 19.2% ~13% >20m 563m€ 11.8% ~50% 97% Net sales Oper. EBIT Market share students Net sales Oper. EBIT B2

  5. Slide 5: We accelerated our transformation during 2020

    We accelerated our transformation during 2020 ≈ 800m€ invested More than 400m€ new, highly profitable net sales acquired Four acquisitions Two focused, Regional news Santillana Spain, in K12 learning media business leading provider of leading services in 2019 in Finland K12 learning content business

  6. Slide 6: 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 net sales profile with… media sales 70% of earnings Net sales by SBU Group net sales by category, % Operational EBIT excl. PPA by SBU 10% Other 30% Non-print adv ~30% 48% 52% 1

  7. Slide 7: Learning and media have a positive impact on society

    SANOMA SUSTAINABILITY STRATEGY Learning and media have a positive impact on society… Inclusive Sustainable Trustworthy Vital Valued learning media data environment people We develop inclusive We provide trusted Finnish We use the data you trust We act to reduce our We promote equality and learning s

  8. Slide 8: Clear targets in our Sustainability Strategy

    …and we have set clear targets in our Sustainability Strategy Our sustainability KPIs and performance Our sustainability targets: in 2020 are summarised on p. 33 Inclusive Sustainable Trustworthy Vital Valued learning media data environment people 1. We co-create high- 1. We promote open 1. Data sup

  9. Slide 9: Early closing and successful start of integration of Santillana Spain

    Early closing and successful start of integration of Santillana Spain  Acquisition of Santillana Spain, the leading provider of learning materials, primarily textbooks, for primary and secondary education in Spain, was closed Net sales split 2020 K-12 on 31 December 2020 ~90%  Net sales of 106m€ a

  10. Slide 10: 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 – K12 being primary, secondary and vocational education – Learning services being blended learning content (print & digital), digital platforms for teaching and administrat

  11. Slide 11: 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

  12. Slide 12: Shift towards attractive subscription model

    Greater integration of products and digital services creates shift towards attractive subscription model Greater benefits for all through subscription State of maturity of the various countries  For students: more up-to-date materials, books can be retained, notes in books improves learning impact

  13. Slide 13: 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 in

  14. Slide 14: 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

  15. Slide 15: Net sales growth driven by acquisitions and strong comparable growth

    LEARNING FY 2020 Net sales growth driven by acquisitions and strong comparable growth…  Net sales grew significantly to 500m€ (2019: 336)  143m€ from acquisitions, in particular Iddink  Strong comparable net sales growth of 5% driven by curriculum renewals in both Poland and the Netherlands  Cor

  16. Slide 16: Solid full year earnings improvement of 27%

    LEARNING FY 2020 … and solid full year earnings improvement of 27% Long-term  Operational EBIT excl. PPA improved Learning’s 5-year development financial targets to 96m€ (2019: 76) in FY 2020 m€ Margin  Margin 19.2% (2019: 22.5%) 500 25% above – Decrease resulting from acquisitions 23% 20% of Iddi

  17. Slide 17: Sanoma is the leading media company in Finland

    Sanoma is the leading media company in Finland successful in its digital transformation  Focused media company with scale – Focus: News & feature, entertainment and B2B marketing solutions – Highly synergistic, bolt-on acquisitions could be considered  Increasing share of consumer income and subsc

  18. Slide 18: Subscriptions growing for the fourth year in a row

    CASE HELSINGIN SANOMAT Subscriptions growing for the fourth year in a row with strong growth in digital +3% 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% – Already 70%

  19. Slide 19: Digital transformation increases profit contribution per incremental subscriber

    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 subscription1 reduces… increases1 – Generate 50% the net incremental

  20. Slide 20: Digital transformation 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

  21. Slide 21: Solid growth in subscription sales while advertising declined due to corona

    MEDIA FINLAND FY 2020 Solid growth in subscription sales while advertising and events sales declined due to corona  Net sales declined slightly to 563m€ (2019: 577) Monthly advertising development 1 – Comparable net sales declined by 10% % – Net sales of the regional news media business 54m€ Jan Fe

  22. Slide 22: Stable profitability in an exceptional year

    MEDIA FINLAND FY 2020 Stable profitability in an exceptional year  Operational EBIT excl. PPA stable 67m€ (2019: 69), Operational EBIT excl. PPA margin 11.8% (2019: 12.0%) m€  Active cost mitigation actions across cost categories 16.8 % offsetting most of the impact of lower advertising sales 14.8

  23. Slide 23: Solid dividend for our shareholders while growing through M&A

    Solid dividend for our shareholders while growing through M&A  The Board proposes a dividend of 0.52€ Dividend per share (2019: 0.50) per share to be paid for 2020 € – Representing a total of approx. 85m€  To be paid in two parts – 0.26€ on 22 April (record date 15 April) – 0.26€ in November (reco

  24. Slide 24: Outlook for 2021

    Outlook for 2021  In 2021, Sanoma expects that the Group’s reported net sales will be 1.2‒1.3bn€ (2020: 1.1 bn€)  The Group’s operational EBIT margin excl. PPA is expected to be 14‒16% (2020: 14.7%)  The mid-points of the outlook ranges are based on the assumption that – The advertising market wi

  25. Slide 25: 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

  26. Slide 26: Appendix: Sanoma Group

    Appendix: Sanoma Group 26 Roadshow presentation March 2021

  27. Slide 27: Sanoma in 2020

    Sanoma in Learning Media Finland 2020 500m€ 563m€ NET SALES 64% 48% 1,062m€ 19.2% 11.8% NON-PRINT SALES NET SALES 2020 NET SALES 2020 56% Netherlands Subscription Non-print Poland OPERATIONAL EBIT MARGIN advertising 14.7% Belgium Print advertising Finland Single copy Other Other 0 50 100 150 200 0 5

  28. Slide 28: Raised long-term targets for Learning's profitability and Group's leverage

    We raised long-term targets for Learning’s profitability and Group’s leverage in December Updated GROUP target 31 Dec 2020 Net debt / adj. EBITDA below 3.0 2.6 Equity ratio 35-45% 37.4% Increasing dividend Dividend 40-60% 73% of free cash flow LEARNING Updated FY 2020 target Comparable net sales dev

  29. Slide 29: Free cash flow of continuing operations grew in 2020

    Free cash flow of continuing operations grew in 2020  Free cash flow of continuing operations grew Free cash flow strongly in 2020 m€ 150  Reported free cash flow (incl. discontinued operations) declined to 95 m€ (2019: 131) 100 + Learning: acquisitions and comparable net sales growth – Media Finl

  30. Slide 30: Net debt increased at the end of the year due to closing of Santillana

    Net debt increased at the end of the year due to closing of Santillana Spain acquisition  Acquisition of Santillana Spain was closed on Net debt 31 December 2020 M€ Long-term target < 3.0 3.0  Net debt 661m€ (2019: 795) 2.8 2.7 2.6 2.6  Net debt / Adj. EBITDA 2.6 (2019: 2.7) 2.2 2.0  Equity rati

  31. Slide 31: Balanced debt structure

    Balanced debt structure  External interest-bearing debt Debt structure Maturity profile 2020–2024 583m€ (2019: 630) at the end of m€, 31 Dec 2020 m€, 31 Dec 2020 December 2020 1) 15 17 1000  Acquisition of Santillana Spain 150 800 financed by the bridge loan and 200m€ term loan 200 600 583m€ ‒ 3-y

  32. Slide 32: Largest shareholders

    Largest shareholders 28 February 2021 Largest shareholders Holding by sector Number of shares 1. Jane and Aatos Erkko Foundation 39,820,286 24.4% 2.7 % 2. Antti Herlin 19,716,800 12.1% 16.0 % 15.6 % Holding Manutas Oy: 12.03% personal: 0.02% 3. Robin Langenskiöld 12,273,371 7.5% 4. Rafaela Seppälä 1

  33. Slide 33: Our sustainability performance in 2020

    Our sustainability performance in 2020 In line with our strategy, we have set targets and defined KPIs for our sustainability work. For more information, see Sanoma Sustainability Report 2020. Inclusive Sustainable Trustworthy Vital Valued learning media data environment people KPIs and KPIs and per

  34. Slide 34: Financial reporting in 2021

    Financial reporting in 2021 Week 10 Financial Statements and Directors’ Report 2020 Sustainability Review 2020 13 April Annual General Meeting 2021 30 April Q1 2021 Interim Report 28 July Half-Year Report 2021 27 October Q3 2021 Interim Report 34 Roadshow presentation March 2021

  35. Slide 35: Appendix: Learning

    Appendix: Learning 35 Roadshow presentation March 2021

  36. Slide 36: In learning materials, modest market growth expected over the cycle

    In learning materials, modest market growth expected 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 b

  37. Slide 37: Market leader in European K12 with strong digital footprint

    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

  38. Slide 38: 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

  39. Slide 39: From 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

  40. Slide 40: Significant increase in platform usage 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 Key functionalities, indexed to pre-corona period (09 2019 – 02 2020) Itslearning to deal with increased Itslearnin

  41. Slide 41: Sanoma Learning has been successfully built through M&A

    Sanoma Learning has been successfully built through M&A the Netherlands, Belgium, Spain Finland Spain Finland Belgium Sweden the Netherlands Spain 1999 2004 2008 2011 2016 2019 2020 the Netherlands 9 countries Poland De Boeck Belgium Spain 41 Roadshow presentation March 2021

  42. Slide 42: Appendix: Media Finland

    Appendix: Media Finland 42 Roadshow presentation March 2021

  43. Slide 43: 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

  44. Slide 44: Leading positions in news & feature, entertainment and B2B marketing

    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

  45. Slide 45: In 2020, we continued to implement our digital transformation strategy

    In 2020, we continued to implement our digital transformation strategy Strong digital growth Focus on core business Helsingin Sanomat (HS) 70%  Combined News & Features out of over 400k subscriptions organisation settled in and include a payable digital showing strategic benefits of element (+8% Yo

  46. Slide 46: #1 in Finnish journalism, strengthened by acquired regional news media

    NEWS & FEATURE #1 in Finnish journalism, further strengthened by acquired regional news media Leading national and regional news media Focus on  Growing digitally active subscription base  Growing daily national reach 46 Roadshow presentation March 2021

  47. Slide 47: 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

  48. Slide 48: We have leading positions in our selected areas

    ENTERTAINMENT We have leading positions in our selected areas TV & video Radio & audio Live events Our market positions #1-2 #2 #1 48 Roadshow presentation March 2021

  49. Slide 49: Increasingly stronger position also in the SME segment

    B2B MARKETING SOLUTIONS Increasingly stronger position also in the SME segment SME (small and mid-size enterprise) Market share per customer segment* 2020 customers – significant potential to grow  Our market share in SME is relatively low Large customers (~15% vs. over 30% in large customers) >30%

  50. Slide 50: 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

  51. Slide 51: 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

  52. Slide 52: Please contact our Investor Relations

    Please contact our Investor Relations: Kaisa Uurasmaa, Head of IR & CSR M +358 40 560 5601 E [email protected] [email protected] www.sanoma.com

Sanoma — Non-Deal Roadshow (March 2021) on 6ix