Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Investor Presentation (September 2013)

53 slides from Sanoma Oyj's investor presentation, September 2013

  1. Slide 1: Sanoma Corporate Presentation September 2013

    Sanoma Corporate Presentation September 2013

  2. Slide 2: Market leader in chosen businesses and markets

    Market leader in chosen businesses and markets One of the leading media and Magazine publishing learning companies in Europe Newspaper publishing  #1 media company in Finland Learning Television the Netherlands and Finland Sweden Online operations  Among top 2 educational players Estonia Radio in

  3. Slide 3: Sanoma's largest consumer media markets

    Sanoma’s largest consumer media markets Net sales of main media companies (in EUR million) Netherlands (EUR million) Finland (EUR million) Sanoma Sanoma Telegraaf Media Groep Yle Wegener Alma Media MTV RTL NL TS-Yhtymä Audax Otavamedia De Persgroep NL #1 Keskisuomalainen #1 STER Edita 0 250 500 750

  4. Slide 4: Learning – leading player in Europe

    Learning – leading player in Europe #1 or #2 in markets where present Market: Sweden Market Position: #2 Sales: approx. EUR 25 m FTEs: approx. 60 Size of market: approx. EUR 90 m Market: Finland Market Position: #1 Sales: approx. EUR 55 m Market: Netherlands FTEs: approx. 180 Market Position: #2 Siz

  5. Slide 5: Focus on consumer media and learning

    Focus on consumer media and learning 2010 Sales by EBIT* by 7% operating 26 % operating 20% segment segment 46 % 55% 12 %  Media  Media 18%  News  News 16 %  Learning  Learning  Trade  Trade 2012 6% 13% 25% 18% 63% 13% 62%  Media  Media  News  News  Learning  Learning  Other 5 Septemb

  6. Slide 6: Focus on consumer media and learning

    Focus on consumer media and learning 2010 Sales by 12% Sales by 4% 23% 14% type of sales geographic area 9%  Advertising sales 26% 51%  Subscription sales 17%  Single copy sales  Finland  Learning  The Netherlands 22%  Retail/Press 9% 13%  Belgium distribution  Other EU  Other sales  Othe

  7. Slide 7: Managing the digital transformation

    Managing the digital transformation Focus on consumer media and learning Drive performance of current business Multi-platform and digital growth Print (~55% of net sales) Consumer media New consumer Advertising TV & Radio (~15% of net sales) Support functions revenues solutions Online (~10% of net s

  8. Slide 8: Digital transformation in making

    Digital transformation in making Transformation of main media operations Growth and transformation in Learning News Learning  #1 in Finland  Leading learning player in 6 countries  Growth in engagement  Sanoma at the forefront of gradual  Proven transformation path to digitalisation in newspape

  9. Slide 9: Examples of innovation and digital development

    Examples of innovation and digital development  Consumer data and analytics  E-commerce – Building capabilities and infrastructure on – Kieskeurig International, Szallas, performance metrics, sales optimisation, Huuto.net, Mitä saisi olla, leef.nl targeted advertising and content recommendation 

  10. Slide 10: Convert reach to revenues

    Convert reach to revenues Cross-media adds value for customers and Sanoma Increased added value • Brand extensions & supplements • Improved experience through to consumers / communities multimedia expansion • More targeted segmentation • New digital businesses Improved return on • Increased cross-me

  11. Slide 11: Redesign of consumer media operations

    Redesign of consumer media operations Will change the financial profile of the Group and may affect asset valuations  Strategic choices to enhance focus  Product and service portfolios  Cost efficiency, incl. operational structures  Planning commenced – next update at Q3 publication  Investment

  12. Slide 12: Environment & Outlook

    Environment & Outlook SAN OM CMecauteaelle|

  13. Slide 13: Advertising markets under severe pressure

    Advertising markets under severe pressure Market environment impacting financial performance  Market environment Advertising market** Change in % vs. prior year Netherlands Q1/2013 Q2/2013 – Economy – subdued market conditions and likelihood of clearly improving environment low Magazines -17 -17 TV

  14. Slide 14: Advertising markets by category H1/2013 vs. H1/2012

    Advertising markets by category H1/2013 vs. H1/2012 Print advertising declining in all main categories, mixed development in online and TV Finland* (net development, change in %) Print Online TV Food -23 32 -12 Motor vehicles -14 -8 2 Other classified -8 33 -> 735 Real estate -12 -1 -53 <- Retail -2

  15. Slide 15: Group outlook for 2013

    Group outlook for 2013 Published on 23 July 2013 In 2013, Sanoma expects that the Group’s consolidated net sales will decline more than 4% compared to 2012 and operating profit excluding non-recurring items is estimated to be below EUR 180 million. Sanoma’s outlook is based on the assumptions that t

  16. Slide 16: Group long-term financial targets

    Group long-term financial targets Financial targets* Net sales growth Faster than GDP growth in main operating countries EBIT margin excl. non-recurring items 12% Net debt / EBITDA** <3.5 Equity ratio 35–45% Gearing <100% Dividend per share >50% of EPS excl. non-recurring items CAPEX < EUR 100 milli

  17. Slide 17: Financials

    Financials SaAN OM CMecautcaelle|

  18. Slide 18: Learning solid – structural changes accelerating in media

    Learning solid – structural changes accelerating in media Q2 2013  Net sales for the Group EUR 591 million (647) – Learning – solid performance impacted by timing shift in sales recognition between quarters – Media – continued deterioration of advertising markets and circulation – News – continued

  19. Slide 19: Net sales development

    Net sales development Q2 2013 4-6/2013 4-6/2013 organic share of 2012 organic EUR million (%) growth net sales growth Group -9.3 -3.3 646.5 -33.7 Media -9.7 60.0 -5.8 -7.0 -7.6 -7.0 591.2 News -6.5 16.9 -3.6 Learning -6.6 17.5 +8.6 Media: Advertising adversely affected net sales, especially in the N

  20. Slide 20: EBIT excl. non-recurring items development

    EBIT excl. non-recurring items development Q2 2013 EUR million 103.8 -22.7 +1.0 -11.0 -3.1 68.0 See slide 12 See slide 13 – Higher spending in digital + Solid underlying performance development – In the Netherlands a timing shift in – Lower net sales not fully sales recognition from Q2 to Q1 compens

  21. Slide 21: Media – net sales and EBIT excl. non-recurring items

    Media – net sales and EBIT excl. non-recurring items Q2 2013 Net sales EUR million 388.6 -20.0  Sales declined mainly due to weak -9.8 advertising market -3.9 354.9 – ¾ of decline in advertising explained by weak advertising market in the Netherlands  Decline in magazine circulation not offset by

  22. Slide 22: News – net sales and EBIT excl. non-recurring items

    News – net sales and EBIT excl. non-recurring items Q2 2013 Net sales EUR million 106.8 -7.7  Sales declined mainly due to weak print -0.6 +1.3 99.8 advertising market  In Ilta-Sanomat online advertising more than off-set the decline in print advertising 4-6/2012 Advertising Circulation Other 4-6/

  23. Slide 23: Non-recurring items

    Non-recurring items Q2 2013  Restructuring expenses – approx. EUR 7 million related to cost savings programme  Netherlands – approx. EUR 6 million tax-deductible impairment of intangible assets related to equestrian sports magazines  Belgium – approx. EUR 11 million tax-deductible impairment of i

  24. Slide 24: Free cash flow

    Free cash flow Cash flow from operations less cash CAPEX Restated* Restated* Restated* EUR million 4–6/2013 4–6/2012 1-6/2013 1-6/2012 1–12/2012 EBITDA excl. non-recurring items 141.1 178.3 217.0 265.2 523.0 TV programming costs -34.7 -40.3 -94.8 -89.0 -179.3 Prepublication costs -8.1 -7.4 -14.6 -13

  25. Slide 25: Cost structure & savings programme

    Cost structure & savings programme  Gross margin – at the level of comparable period Cost of sales split (EUR million) and Gross Margin Rolling 12 months  Fixed costs – lower in absolute terms 1400 70% Other cost of sales  Group-wide cost savings programme – targeting 1200 60% Purchased printing

  26. Slide 26: Capital structure

    Capital structure 30 June 2013  Funding secured for the coming years Net debt / EBITDA adjusted 5,0 – Diversification of funding through sale and leaseback 4,3 4,1 arrangements under consideration <3.5 3,6 2,8  Q2 is seasonally the weakest for the balance sheet 2,5 2,0  Net debt EUR 1,418 million

  27. Slide 27: Seasonality between quarters visible in EBIT and cash flow

    Seasonality between quarters visible in EBIT and cash flow Net sales (EUR million) EBIT excl. non-recurring items (EUR million)* Cash flow from operations (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

  28. Slide 28: Appendix – Sanoma's business units

    Appendix 1 – Sanoma’s business units

  29. Slide 29: Organisational structure

    Organisational structure President and CEO Harri-Pekka Kaukonen News Media Media Media Media Learning Pekka Soini Finland Netherlands Russia & CEE Belgium Jacques Eijkens Anu Nissinen Dick Molman Heike Rosener Aime van Hecke Strategy & digital Digital transformation operations John Martin Finance Ne

  30. Slide 30: Sanoma Media

    Sanoma Media Key figures EUR million 4–6/2013 1–3/2013 FY 2012 10–12/2012 7–9/2012 4–6/2012 1–3/2012 FY 2011 Net sales 354.9 323.5 1,487.1 406.3 338.1 388.6 354.1 1,369.2 The Netherlands 184.6 157.2 760.4 207.2 173.5 208.1 171.6 642.0 Finland 73.7 69.6 301.7 82.2 65.4 76.7 77.4 309.7 Russia & CEE 43

  31. Slide 31: Sanoma Media Netherlands

    Sanoma Media Netherlands  Net sales 2012: EUR 760 million  Has an extensive portfolio with over a 100 different brands in print, TV and online  Is the dominant player in the Dutch magazine market – Libelle, Margriet, LINDA., Donald Duck, Story, Veronica magazine  No 2 commercial TV player in the

  32. Slide 32: Sanoma Media Finland

    Sanoma Media Finland  Net sales 2012: EUR 302 million  Over 40 quality titles and a readership of over 3 million – Finland’s number-one publisher of children’s and juvenile publications – Popular titles include Aku Ankka (Donald Duck), Kodin Kuvalehti, ET-lehti, Me Naiset  No 2 commercial TV play

  33. Slide 33: Sanoma Media Belgium

    Sanoma Media Belgium  Net sales 2012: EUR 228 million  Operates in both the Dutch and French speaking markets  Market leader in women's magazines and TV titles (Libelle, TeVe-Blad, Story)  Has a number of popular internet sites in Belgium  33% of De Vijver – Free-to-air TV channels VIER and VIJ

  34. Slide 34: Sanoma Media Russia & CEE

    Sanoma Media Russia & CEE  Net sales 2012: EUR 200 million  Operates in eight markets: Bulgaria, Croatia, the Czech Republic, Hungary, Romania, Russia, Serbia and Ukraine  Publishes over 140 consumer magazines mainly targeted at women – Cosmopolitan, Men’s health, Harper’s Bazaar, National Geogra

  35. Slide 35: TV – net sales and EBIT seasonality

    TV – net sales and EBIT seasonality 2010-2012 average for TV* Net sales split EBIT** split 13% 22% 29% 31% 39% 29% 20% 17% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes SBS Netherlands (excluding PPA amortization) and Nelonen Media Finland. **Excluding non-recurring items. 35 September 2013 Corporate Presentati

  36. Slide 36: Magazines – net sales and EBIT seasonality

    Magazines – net sales and EBIT seasonality 2010-2012 average for Magazines* Net sales split EBIT** split 19% 27% 24% 30% 30% 25% 24% 21% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes Dutch, Finnish, Belgium and Russian operations. **Excluding non-recurring items. 36 September 2013 Corporate Presentation

  37. Slide 37: Sanoma Media

    Sanoma Media Net sales EBIT excluding non-recurring items* EUR million EUR million 500 70 64 450 436 406 60 55 400 389 354 355 342338 50 47 350 324 311 40 38 300 280 32 250 30 27 25 23 23 200 20 150 10 100 -1 50 0 0 -10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figures have been r

  38. Slide 38: Sanoma News

    Sanoma News Key figures EUR million 4-6/2013 1–3/2013 FY 2012 10–12/2012 7–9/2012 4–6/2012 1–3/2012 FY 2011 Net sales 99.8 101.0 422.8 107.6 98.3 106.8 110.0 435.8 Helsingin Sanomat 53.0 56.3 224.9 57.1 52.2 56.2 59.3 238.5 Ilta-Sanomat 22.7 20.0 84.3 21.1 20.0 22.0 21.2 84.4 Other businesses 24.1 2

  39. Slide 39: Sanoma News

    Sanoma News  Net sales 2012: EUR 423 million  Finland represents 99% of the segment’s sales  Helsingin Sanomat and Ilta-Sanomat are the leading newspapers in Finland  Metro is the leading free sheet in Finland  Etelä-Saimaa, Kouvolan Sanomat and Kymen Sanomat are the leading regional papers  D

  40. Slide 40: News – net sales and EBIT seasonality

    News – net sales and EBIT seasonality 2010-2012 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. 40 September 2013 Corporate Presentation

  41. Slide 41: Sanoma News

    Sanoma News Net sales EBIT excluding non-recurring items* EUR million EUR million 115 16 112 112 14 110 14 13 110 12 108 108 12 107 10 10 105 10 9 103 8 101 8 100 6 100 6 98 6 5 4 95 2 90 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figures have been restated due to a change in IAS

  42. Slide 42: Sanoma Learning

    Sanoma Learning Key figures EUR million 4-6/2013 1–3/2013 FY 2012 10–12/2012 7–9/2012 4–6/2012 1–3/2012 FY 2011 Net sales 103.5 45.7 312.4 35.5 127.4 111.1 38.4 290.6 Learning 103.7 45.7 306.4 35.5 127.4 109.3 34.2 256.6 Other businesses 6.5 0.0 0.0 1.8 4.6 36.1 Eliminations -0.2 0.0 -0.5 0.0 0.0 0.

  43. Slide 43: Sanoma Learning

    Sanoma Learning  Net sales 2012: EUR 312 million  One of Europe’s largest providers of learning materials and solutions operating in Finland, Hungary, Belgium, the Netherlands, Poland and Sweden  Among top 2 learning players in its all 6 operating countries  The roots of our educational publishi

  44. Slide 44: Sanoma at the forefront and well positioned

    Sanoma at the forefront and well positioned Learning transformation still in infancy Sanoma at the forefront and well positioned Global textbook revenue by product type (USD million) Sanoma learning Print 30,000 business unit 53 % 25,000 Pro forma net sales 20,000 Services by type of sales 15,000 4%

  45. Slide 45: Organic expansion opportunity

    Organic expansion opportunity Total educational budget for the countries where we are present Learning materials This part of the budget will hardly grow because • Commoditization of content Addressable 1% or approx. EUR 0.75 billion • Demographic development Variable expenses (e.g. platforms, devel

  46. Slide 46: Learning net sales split (business unit)

    Learning net sales split (business unit) 2012 net sales Hungary 7% Sweden 8% Netherlands Belgium 28% 11% Finland 19% Poland 27% 46 September 2013 Corporate Presentation

  47. Slide 47: Learning – net sales and EBIT seasonality

    Learning – net sales and EBIT seasonality 2010-2012 average for learning* Net sales split EBIT** split in relative terms 13% 12% 34% 41% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes only learning business of the Learning segment. **Excluding non-recurring items. 47 September 2013 Corporate Presentation

  48. Slide 48: Sanoma Learning

    Sanoma Learning Net sales EBIT excluding non-recurring items* EUR million EUR million 140 60 127 47 49 50 120 111 110 43 104 40 36 97 31 100 30 80 20 60 10 44 46 38 39 36 0 40 -10 -6 -4 20 -20 -15 -20 -22 0 -30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2011 2012 2013 * 2012 figures have been restated d

  49. Slide 49: Appendix – About owners and coverage

    Appendix 2 – About owners and coverage

  50. Slide 50: Sanoma – largest shareholders

    Sanoma – largest shareholders % of shares 31 August 2013 and votes 1. Jane and Aatos Erkko Foundation 23.02 23% 2. Robin Langenskiöld 7.54 3. Rafaela Seppälä 6.31 4. Antti Herlin (Holding Manutas Oy: 4.98%, 6.10 Security Trading 1.11%, personal: 0.02%) 5. Helsingin Sanomat Foundation 3.50 6. Ilmarin

  51. Slide 51: Analyst coverage

    Analyst coverage  Carnegie Investment  Deutsche Bank  Handelsbanken  Pareto Securities Bank Mark Braley Capital Markets Teemu Vainio Matti Riikonen tel. +44 207 545 9904 Mikael Doepel tel. +358 9 8866 6038 tel. +358 9 6187 1231 Db.com tel. +358 10 444 2450 Paretosec.com Carnegie.fi  Evli Bank H

  52. Slide 52: Sanoma's IR team

    Sanoma’s IR team  Mr Martti Yrjö-Koskinen tel. +358 40 684 4643 [email protected]  Mr Olli Turunen tel. +358 40 552 8907 [email protected]  Ms Katariina Hed tel. +358 50 412 5120 [email protected] IR team’s joint email address: [email protected] 52 September 2013 Corporate

  53. Slide 53: 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

Sanoma — Investor Presentation (September 2013) on 6ix