Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Investor Presentation (February 2013)
56 slides from Sanoma Oyj's investor presentation, February 2013
Slide 1: Sanoma in transformation
Sanoma in transformation Corporate Presentation February 2013
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 Television Newspaper publishing – #1 media company in the Netherlands Learning and Finland Online operations Finland Press distribution – Among top 2 educational players in
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 Alma Media Wegener MTV RTL NL TS-Yhtymä Audax Otavamedia De Persgroep NL 1 Keskisuomalainen 1 STER Edita 0 150 300 450 60
Slide 4: Learning – leading player in Europe
Learning – leading player in Europe #1 or #2 in markets where present Market: Sweden Market: Finland Market Position: #2 Market Position: #1 Sales: approx. EUR 25 m Sales: approx. EUR 55 m FTEs: approx. 60 FTEs: approx. 180 Size of market: approx. EUR 80 m Size of market: approx. EUR 90 m Market: Ne
Slide 5: ONE SANOMA Transformation
Strategy set & portfolio changes executed • Focus on consumer media and learning – Consumer media – value creation from leading multi-channel position Strategic – Learning – at the forefront of transformation focus • Acquisitions ONE SANOMA Transformation – SBS TV operations in the Netherlands and B
Slide 6: Focus on consumer media and learning
Focus on consumer media and learning 2010 Sales by operating segment by type of sales by geographic area Trade 12% 4% 14% 26% 23% Media 9% 46% 26% 51% Lear- 17% ning News 12% 16% 22% 9% 13% Advertising sales Learning Finland Other EU 2012 Subscription sales Retail/Press distribution The Netherlands
Slide 7: Organisational structure
Organisational structure CEO Harri-Pekka Kaukonen News Media Media Media Media Learning Pekka Soini Finland Netherlands Russia & CEE Belgium Jacques Anu Nissinen Dick Molman Heike Aime Eijkens Rosener van Hecke Strategy & digital Digital transformation operations John Martin Finance Kim Ignatius New
Slide 8: Success is built on our strong local market positions and our competencies
Success is built on our strong local market positions and our competencies • Strong relationships and brands • Inspiring content • Leading consumer insight • Media, sales and distribution power • Unique reach We differentiate ourselves from our peers through our deeper and broader consumer media por
Slide 9: Environment & Outlook
$3 Sanoma Environment & Outlook
Slide 10: GDP development
GDP development Declining trend continues in our main markets 6 5 4 3 2 1 -0.4 0 -1 -1.2 -2 -1.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 2012 FIN BEL NL Source: FIN: Statistics Finland, BEL: National Bank of Belgium, NL: Centraal Bureau voor de Statistiek. Sanoma in Transformation February 2013 1
Slide 11: Consumer confidence
Consumer confidence 20 10 4.5 0 -10 -20 -25.3 -27.5 -30 Oct Oct Jan Feb Sep Sep Apr Aug Nov Apr Aug Nov Dec Mar May Jul Dec Jun Mar May Jun Jul Jan Feb 2011 2012 FIN BEL NL Source: European Commission, Business and Consumer Survey Results. Sanoma in Transformation February 2013 11
Slide 12: Update on advertising markets
Update on advertising markets Change in advertising market in % vs. previous year Netherlands* Q1/2012 Q2/2012 Q3/2012 Q4/2012 FY/2012 Magazines -1 -11 -13 -14 -12 TV -3 -5 -7 -7 -6 Online** +7 +7 -9 -2 -1 Total ad market Around -5 Finland*** Q1/2012 Q2/2012 Q3/2012 Q4/2012 FY/2012 Newspapers -2 -13
Slide 13: 2012 ended in line with our outlook
2012 ended in line with our outlook 2012 outlook vs. actuals Group outlook for 2012 (published 1 August 2012) 2012 actuals Net sales ‘At the previous year’s level or to -0.1% grow slightly’ EBIT, excluding non- ‘Around 10% of net sales’ 9.8% recurring items, margin EPS excluding non- ‘To be somewhat
Slide 14: Group outlook for 2013
Group outlook for 2013 In 2013, Sanoma expects to maintain its financial performance compared to 2012 and estimates that in 2013 net sales and operating profit excluding non- recurring items will be a continuation of 2012. Sanoma’s outlook for 2013 is based on assumptions that the European economic
Slide 15: 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
Slide 16: Sanoma's Group-wide transformation process
Sanoma’s Group – wide transformation process
Slide 17: Group-wide transformation process
Group-wide transformation process Two parallel tracks Digital Transformation Cross-media development Convert reach to revenues Build new businesses Raise the performance bar Culture Focus Efficiency Financial flexibility Sanoma in Transformation February 2013 17
Slide 18: Cross-media adds value for customers and Sanoma
Cross-media adds value for customers and Sanoma Convert reach to revenues • Brand extensions & supplements Increased added value to • Improved experience through consumers / multimedia expansion communities • More targeted segmentation • New digital businesses • Increased cross-media reach Improved
Slide 19: Reposition Sanoma for future
Reposition Sanoma for future Raising the performance bar • Fundamental change in mind-set and way of working – act as one • Main portfolio changes executed – continue to dispose non-core assets • Enhance operational efficiency and financial flexibility – Continue to address cost base – Targeting to
Slide 20: Group-wide transformation proceeding
Group-wide transformation proceeding Two parallel tracks Number of smaller acquisitions From holding to Group company Sanoma Ventures founded – seven Streamlining and enhancing operational investments made efficiency Monetising reach and content Group-wide cost savings programme Engagi
Slide 21: Monetising reach and content
Monetising reach and content Investing in innovation and digital development Increasing reach offers attractive Monetise content opportunities Porous pay-wall in Helsingin Sanomat Sales for automated trading and real-time introduced bidding sites grew >30% All magazines now available as Sale
Slide 22: Savings target & cost structure
Savings target & cost structure • Gross margin continued to improve Cost of sales split (EUR million) and Gross Margin EUR million • Fixed cost reduction visible also in 1200 70% relation to net sales 1000 60% 50% 800 • Group-wide cost savings programme 600 40% 30% – Targeting around EUR 60 million
Slide 23: Financials
$3 Sanoma Financials
Slide 24: Strong year for Learning – consumer media undergoing transformation
Strong year for Learning – consumer media undergoing transformation • Q4 2012 – decent set of figures in turbulent market environment – Net sales EUR 586.7 (627.9) million – organic growth -6.9% – EBIT excl. non-recurring items EUR 32.1 (54.7) million – EPS excl. non-recurring items EUR 0.08 (0.18)
Slide 25: Income Statement
Income Statement 10–12/2011 1–12/2011 EUR million 10–12/2012 restated* 1–12/2012 restated* Net sales 586.7 627.9 2,376.3 2,378.1 EBITDA excl. non-recurring items 114.1 138.3 519.4 446.3 of net sales 19.4% 22.0% 21.9% 18.8% Amortisations related to programming rights -45.6 -49.1 -156.9 -92.9 Amortisa
Slide 26: Free cash flow
Free cash flow Cash flow from operations less cash CAPEX 10–12/2012 10–12/2011 1–12/2012 1–12/2011 EUR million Group* Group* Group* Group* EBITDA excl. non-recurring items 114.1 146.2 524.3 469.5 TV programming costs -44.9 -41.2 -179.3 -92.0 Prepublication costs -5.9 -9.7 -28.2 -28.4 Change in worki
Slide 27: Balance sheet improving gradually
Balance sheet improving gradually • Net debt at the end of 2012 was EUR 1.2 billion (EUR 1.6 billion) • On average interest rate around 3.5% p.a. • Interest sensitivity*** is EUR 1.3 million and the duration is 24 months • Secured our funding for the coming years Net debt / EBITDA**** adjusted Commi
Slide 28: Sanoma – taxes and CAPEX
Sanoma – taxes and CAPEX • Reported effective tax rate mainly Taxes recognised in P&L and paid taxes EUR million impacted by Underlying 26.4% 30.6%** 26.0% effective tax rate* – Non-taxable sales gains and losses as well 66 as goodwill impairments 59 54 58 49 – Earnings deviation between countries o
Slide 29: High dividend yield
High dividend yield Dividend per share EUR 0.60* - dividend yield of 8.1% in 2012** Dividend per share in relation to EPS reported Cash flow from operations > dividends paid and EPS excl. non-recurring items, % EUR 125 122 1.75 117 116 1.50 92 83 1.25 81 77 68 69 68 1.00 59 0.75 >50% 0.50 9.8 8.1 0.
Slide 30: Appendix 1: Sanoma's business units in transformation
Appendix 1 Sanoma’s business units in transformation
Slide 31: Managing the digital transformation
Managing the digital transformation Drive performance of current business Multi-platform and digital growth Print (~60% of net sales) New Advertising consumer TV & Radio solutions Support functions (~15% of net sales) revenues Online Balance sheet (~10% of net sales) Learning solutions Learning mate
Slide 32: From platform based to multi-channel and cross-media
From platform based to multi-channel and cross-media Supplements and Traditional print media Online product extensions Brand Content Services to advertisers Customers Services to consumers Our know- how Paid Free Print publishing Mobile and tablet Application publishing TV devices Web publishing Key
Slide 33: Sanoma Media
Sanoma Media Key figures 10- FY 10- FY EUR million 12/12 7-9/12 4-6/12 1-3/12 2012 12/11 7-9/11 4-6/11 1-3/11 2011 Net sales 406.3 338.1 388.6 354.1 1,487.1 435.8 342.2 311.2 280.0 1,369.2 The Netherlands 207.2 173.5 208.1 171.6 760.4 232.2 174.0 130.6 105.3 642.0 Finland 82.2 65.4 76.7 77.4 301.7 8
Slide 34: 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. Sanoma in Transformation February 2013
Slide 35: Magazines – net sales and EBIT seasonality
Magazines – net sales and EBIT seasonality 2010-2012 average for Magazines* Net sales split EBIT** split 19% 24% 27% 30% 30% 25% 24% 21% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes Dutch, Finnish, Belgium and Russian operations. **Excluding non-recurring items. Sanoma in Transformation February 2013 35
Slide 36: Sanoma Media
Sanoma Media Net sales EBIT excluding non-recurring items EUR million EUR million 500 70 64 450 436 406 60 389 55 400 354 342 338 50 47 350 311 300 280 38 40 250 30 27 200 25 23 23 150 20 100 10 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2011 2012 Sanoma in Transformation February 2013 36
Slide 37: 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
Slide 38: 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
Slide 39: 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
Slide 40: 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
Slide 41: Sanoma News
Sanoma News Key figures 10- FY 10- FY EUR million 12/12 7-9/12 4-6/12 1-3/12 2012 12/11 7-9/11 4-6/11 1-3/11 2011 Net sales 107.6 98.3 106.8 110.0 422.8 112.0 103.2 112.2 108.4 435.8 Helsingin Sanomat 57.1 52.2 56.2 59.3 224.9 60.8 55.3 61.2 61.2 238.5 Ilta-Sanomat 21.1 20.0 22.0 21.2 84.3 21.6 21.6
Slide 42: 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. Sanoma in Transformation February 2013 42
Slide 43: Sanoma News
Sanoma News Net sales EBIT excluding non-recurring items EUR million EUR million 115 16 112 112 14 14 13 110 110 12 108 108 12 107 10 10 10 105 9 103 8 8 100 98 6 5 4 95 2 90 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2011 2012 Sanoma in Transformation February 2013 43
Slide 44: 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
Slide 45: Learning transformation still in infancy
Learning transformation still in infancy Sanoma at the forefront and well positioned Global textbook revenue by product type Sanoma learning business unit Pro forma net sales by type of sales 30.000 USD million 25.000 20.000 Print Services 15.000 54% 4% 10.000 5.000 Hybrid 0.000 Pure digital 29% 200
Slide 46: Organic expansion opportunity
Organic expansion opportunity Total educational budget for the countries where we are present This part of the budget will hardly grow Learning materials because 1% or approx. EUR 0.75 billion • Commoditization of content Addressable • Demographic development Variable expenses (e.g. platforms, devel
Slide 47: Sanoma Learning
Sanoma Learning Key figures 10- EUR million 12/12 7-9/12 4-6/12 1-3/12 FY 2012 10-12/11 7-9/11 4-6/11 1-3/11 FY 2011 Net sales 35.5 127.4 111.1 38.4 312.4 39.2 110.4 97.0 44.0 290.6 Learning 35.5 127.4 109.3 34.2 306.4 34.7 100.2 87.4 34.3 256.6 Other businesses 0.0 0.0 1.8 4.6 6.5 5.0 10.8 10.2 10.
Slide 48: Learning net sales split (business unit)
Learning net sales split (business unit) 2012 net sales Hungary 7% Sweden 8% Netherlands 28% Belgium 11% Finland 19% Poland 27% Sanoma in Transformation February 2013 48
Slide 49: 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. Sanoma in Transformation February 2013 49
Slide 50: Sanoma Learning
Sanoma Learning Net sales EBIT excluding non-recurring items EUR million EUR million 140 60 127 50 50 47 120 111 110 43 40 97 31 100 30 80 20 60 10 44 38 39 0 40 36 -10 -6 20 -15 -20 -20 -22 0 -30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2011 2012 Note: Q2/2012 EBIT includes a timing shift of EUR 8 million
Slide 51: 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
Slide 52: Appendix 2: About owners and coverage
Appendix 2 About owners and coverage
Slide 53: Sanoma – largest shareholders
Sanoma – largest shareholders % of shares 31 January, 2013 and votes 23% 1. Jane and Aatos Erkko Foundation 23.02 2. Robin Langenskiöld 7.54 8% 3. Rafaela Seppälä 6.31 4. Antti Herlin (Holding Manutas Oy: 4.7%, 5.59 6% Security Trading 0.88%, personal: 0.02%) 76% 5. Helsingin Sanomat Foundation 3.50
Slide 54: Analyst coverage
Analyst coverage ABN Amro Evli Bank Pareto Securities / Öhman Maurits Heldring Mikko Ervasti Teemu Vainio tel. +31 20 344 1191 tel. +358 9 4766 9205 tel. +358 9 8866 6038 abnamro.com Evli.com Ohman.se Carnegie Investment Bank FIM Pohjola Matti Riikonen Mona Grannenfelt Kimmo Stenvall tel. +358 9 618
Slide 55: 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]
Slide 56: 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