Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Non-Deal Roadshow (December 2022)
52 slides from Sanoma Oyj's roadshow presentation, December 2022
Slide 1: Leading K12 learning company capturing further growth in an attractive global market
Leading K12 learning company capturing further growth in an attractive global market November−December 2022
Slide 2: We have an ambitious strategy for sustainable, profitable growth
We have an ambitious strategy for sustainable, profitable growth… We are one of the global leaders in K12 education serving 25 million students ▪ Producing inclusive learning materials and platforms to promote equal learning opportunities Our purpose ▪ Strengthening our #1 position in European K12 l
Slide 3: Based on a well-balanced portfolio with clear long-term targets
… based on a well- Year 2021 at a glance balanced portfolio with clear long- Net sales term targets More than Free cash flow 1,252m€ 85% 140m€ 51% 49% of customers pay for Learning Media digital services Finland Operational EBIT excl.PPA Operating in More than 197m€ Margin 15.8% 12 5,000 70% 30% Eur
Slide 4: Our key long-term targets
Our key long-term targets (FY 2021 in brackets) Net debt / Equity Increasing Adj. EBITDA ratio dividend < 3.0 35−45% 40−60% (2.4) (40.6%) of free cash flow (55%) Employee Experience Management Index gender balance Carbon neutral >7.5 50/50 by 2030 by 2030 by 2030 (77 gCO2e / € net sales) (7.3) (39 w
Slide 5: We are #1 in K12 learning services in Europe
We are #1 in K12 learning services in Europe… ▪ We focus on K12, which is primary, secondary and vocational education (ie. 6−18 year-olds) – Supporting more than 25 million students in 12 European countries – Having a ~16% market share ▪ Teachers and schools are our primary customers – Teachers are
Slide 6: Leading the way in consolidating the market
…and are leading the way in consolidating the market ▪ K12 is a stable and resilient market – Stable population of approx. 75 million students in Europe, corresponding to a market size of 4−5bn€ – Public spending on education is increasing, spend per student varies between countries – Significant fr
Slide 7: In Learning, a successful track record and ambitious plan for profitable growth
In Learning, we have a successful track record and ambitious plan for profitable growth 700 25% M&A has accelerated our transformation ▪ 2019: Four acquisitions in K12 learning services 600 20% ▪ 2020: Santillana, leading provider of K12 learning content in Spain ▪ 2022: Pearson Italy, the third lar
Slide 8: Sanoma acquired Pearson's K12 learning business in Italy
Sanoma acquired Pearson’s K12 learning business in Italy as of 31 August 2022 ▪ Sanoma enters Italy, one of the largest K12 learning services markets in Europe – Pearson is the 3rd largest publisher in the Italian market with a market share of 15%, focused on secondary education – Number of students
Slide 9: M&A strategy: Focus on growth opportunities in K12 learning
M&A strategy: Focus on growth opportunities in K12 learning business We aim to grow in K12 We aim to acquire Our M&A pipeline is learning content by companies that healthy ▪ Strengthening our position in ▪ Focus on K12 learning ▪ Market consolidation current operating countries content driven by acc
Slide 10: We are Finland's #1 cross-media company
We are Finland’s #1 cross-media company... ▪ Independent and trusted media is essential for an open and democratic society ▪ We reach 97% of all Finns every week by providing trusted Finnish journalism and inspiring entertainment ▪ Our strategy focuses on – News & feature – Entertainment Share of st
Slide 11: Delivering solid, stable earnings and cash flow
…delivering solid, stable earnings and cash flow In Media Finland, stable net sales and profitability ▪ Sustainable performance in the digital era development continued during the pandemic requires scale 700 20% – We have 1.4 million subscriptions in total 600 15% – ~55% pay for digital component 50
Slide 12: Our Sustainability Strategy emphasises the positive impact of learning and media
Our Sustainability Strategy emphasises the positive impact of learning and media on society Trustworthy data Valued people Target: Continuous Target: Employee privacy and security Engagement Index (EEI) training for our above 7.5 employees No Inclusive learning major data Empowering learning of EEI
Slide 13: Growing through M&A while paying an increasing dividend
Growing through M&A while paying an increasing dividend € Solid balance sheet Growing dividend with Investing in further supporting M&A an attractive yield digital growth ▪ Implementing our ▪ Our policy is to pay an ▪ Harmonising and clear growth strategy increasing dividend, developing our digital
Slide 14: We are on track for our strategic growth ambition for 2030
We are on track for our strategic growth ambition for 2030 ▪ We are aiming for the Group’s net sales to be over 2bn€ by 2030, with at least 75% coming from the learning business ▪ Central levers in achieving the ambition are – Organic growth in-line with long-term targets of 2−5% p.a. for Learning a
Slide 15: We have an ambitious strategy for sustainable, profitable growth
We have an ambitious strategy for sustainable, profitable growth ▪ We are one of the global leaders in K12 education serving Our purpose 25 million students and want to grow globally through M&A Through learning and media, we have a positive impact on the lives of millions of people ▪ We are Finland
Slide 16: Q3 2022 Financials
Q3 2022 Financials
Slide 17: Net sales grew driven by Spain and the Pearson Italy acquisition
Q1−Q3 2022 Net sales grew driven by Spain and the acquisition of Pearson Italy and Germany Net sales Organic net sales Operational EBIT Free cash Net debt / growth excl. PPA flow Adj. EBITDA 1,039m€ 2% 192m€ 48m€ 3.3 (2021: 999) (2021: 8%) (2021: 203) (2021: 85) (2021: 2.5) ▪ Net sales grew both in
Slide 18: Learning Q1-Q3 2022: net sales growth
LEARNING Q1−Q3 2022 Net sales grew driven by organic growth especially in Spain and the Pearson acquisition… ▪ Net sales grew to 579m€ (2021: 549) – Pearson Italy and Germany, acquired on 31 August 2022, had a 21m€ contribution to the net sales growth – Organic growth was 2% (2021: 7%) – In Spain, t
Slide 19: Learning: earnings impacted by lower profitability in Dutch distribution
LEARNING Q1−Q3 2022 Operational EBIT excl. PPA …earnings impacted by lower m€ profitability in the Dutch distribution business 22.2 % 21.0 % 21.0 % ▪ Operational EBIT excl. PPA was 151m€ (2021: 155) 18.5 % 19.8 % 19.5 % 17.8 % – Earnings in the learning content businesses 126 129 improved in all maj
Slide 20: Media Finland: net sales stable, earnings impacted by paper costs
MEDIA FINLAND Q3 2022 Operational EBIT excl. PPA Net sales stable, earnings m€ impacted by higher paper costs 15.4 % ▪ Net sales stable at 155m€ (2021: 155) 13.3 % – Total advertising sales declined in-line with the relevant 12.5 % 24 market categories 11.7 % ▪ Digital and radio advertising sales co
Slide 21: Outlook for 2022 (unchanged)
Outlook for 2022 (unchanged) Last updated on 31 August for the acquisition of Pearson Italy and Germany ▪ In 2022, Sanoma expects that the Group’s reported net sales will be 1.3 ‒1.35 bn€ (2021: 1.25) ▪ The Group’s operational EBIT margin excluding PPA is expected to be around 15% (2021: 15.8%) ▪ Re
Slide 22: Operational environment will also be challenging next year
Operational environment will also be challenging next year ▪ Supporting our performance Long-term targets − Resilient learning content business with growth driven by ▪ Second year of curriculum change in Spain Increasing ▪ Poland returning to growth trajectory with new curriculum renewal Learning di
Slide 23: Lower earnings and higher investments reduced free cash flow
Q1−Q3 2022 Free cash flow Lower earnings and higher m€ investments reduced free cash flow 200 ▪ Free cash flow lower at 48m€ (2021: 85*) + Acquisition of Pearson Italy and Germany 150 + Lower TV programme costs – Lower EBITDA 100 – Higher investments in digital development and office adaptation 50 –
Slide 24: Net debt and leverage increased with the Pearson acquisition
Net debt and leverage Net debt m€ increased with the acquisition of Pearson Italy and Germany 3.3 3.1 3.2 Long-term target < 3.0 2.8 ▪ Net debt / Adj. EBITDA was 3.3 (2021: 2.5) 2.6 2.6 ▪ Interest-bearing net debt totalled 838m€ (2021: 630) 2.5 2.4 ▪ Equity ratio was 33.0% (2021: 38.2%) ▪ Net financ
Slide 25: Appendix: Sanoma Learning
Appendix: Sanoma Learning
Slide 26: Sanoma is one of the global leaders in education
LEARNING Sanoma is one of the global leaders in #1 #2 education ▪ Serving more than 25 million K12 students in 12 countries across Europe, market share approx. 16% – European K12 student population stable at 75 million #1 – Value of K12 learning services market approx. #1 4−5bn€ p.a. with low single
Slide 27: A focused provider of K12 learning products and services
LEARNING We are a focused 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 pro
Slide 28: Leading the way in digitalisation across our markets
LEARNING …leading the way in digitalisation across our markets Stage Print Free digital Paid digital Subscription digital Digital Model Print only Free digital Paid digital Subscription digital Markets Poland Finland Netherlands Italy Belgium ~65% Spain Sweden of learning material France UK sales Ge
Slide 29: Wide footprint in learning content enables scaling digital competences
LEARNING Our wide footprint in learning content enables us to scale our digital competences Share of net sales and operational EBIT margin excl. PPA in 2021 Distribution services 20% Below average Digital platforms* 15% Below average Printed and digital learning content 65% Above average 637m€ 21.0%
Slide 30: Sanoma Learning has been successfully built through M&A
LEARNING Sanoma Learning has been successfully built through M&A Iddink Tammi (Sanoma Pro) the Netherlands, Finland Belgium, Spain Pearson Italy Sanoma Italy WSOY Van In Sanoma Utbildning Essener Pearson Germany Finland Belgium Sweden the Netherlands Germany 1999 2004 2008 2011 2016 2019 2020 2022 M
Slide 31: The acquired Pearson business has a strong position in Italy
LEARNING: ACQUISITION OF PEARSON ITALY & GERMANY Focus on secondary education The acquired Pearson business* Pro forma net sales, m€, 2021 has a strong position in Italy 11% 3%5% Primary 25% Lower secondary ▪ 3rd largest publisher in a fragmented K12 learning material market in Italy with a market s
Slide 32: Large Italian K12 learning material market
LEARNING: ACQUISITION OF PEARSON ITALY & GERMANY Total addressable market in Italy Large Italian K12 learning material m€ 768 768 748 742 market provides significant 701 722 potential for digitalisation ▪ Overall Italian K12 learning material market was estimated at above 750m€ in 2021, making it on
Slide 33: Modest synergies with opportunity for digital development
LEARNING: ACQUISITION OF PEARSON ITALY & GERMANY Modest synergies with opportunity for digital development in secondary education ▪ Estimated synergies of 2−3m€ (annual run-rate) expected to be realised in full in 18−24 months after closing and mainly related to support functions and procurement – C
Slide 34: Adjusted key figures of Pearson Italy and Germany
Adjusted key figures of Pearson Italy and Germany (pro forma, preliminarily adjusted for IFRS and Sanoma accounting principles, unaudited) Quarterly figures m€ Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Net sales, total 31 11 18 58 29 12 Operational EBIT excl. PPA 6 -4 FY figures m€ FY 2021 FY
Slide 35: Appendix: Sanoma Media Finland
Appendix: Sanoma Media Finland
Slide 36: Leading positions in news & feature, entertainment and B2B marketing
MEDIA FINLAND 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 domest
Slide 37: Digital transformation driven by shared success factors
MEDIA FINLAND 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 eas
Slide 38: #1 in independent Finnish journalism
MEDIA FINLAND: NEWS & FEATURE #1 in independent Finnish journalism Leading national and regional news media * Focus on ▪ Growing digitally active subscription base ▪ Growing daily national reach * Regional news media business acquired in April 2020 38 Roadshow presentation November-December 2022
Slide 39: Digital transformation increases profit contribution per subscriber
MEDIA FINLAND: NEWS & FEATURE 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 Inde
Slide 40: Helsingin Sanomat subscriptions growing for the fifth year
MEDIA FINLAND: CASE HELSINGIN SANOMAT Subscriptions growing for the fifth year in a row with strong growth in digital +1% annual growth in HS subscription base ▪ HS total number of subscriptions over 420k ▪ Number of digital-only subscriptions over 150k, 400k 35% of total subscription base ~15% – Al
Slide 41: Leading positions in TV & video, radio & audio, live events
MEDIA FINLAND: ENTERTAINMENT We have leading positions in our selected areas TV & video Radio & audio Live events Our market positions #1-2 #2 #1 41 Roadshow presentation November-December 2022
Slide 42: Appendix: Sanoma Group
Appendix: Sanoma Group
Slide 43: Sanoma in 2021
Sanoma in Learning Media Finland 2021 Net sales 637m€ Net sales 615m€ NET SALES Non-print 57% Non-print 49% 1,252m€ Margin 21.0% Margin 11.9% NON-PRINT SALES NET SALES NET SALES 53% Netherlands Subscription Poland Non-print OPERATIONAL EBIT MARGIN advertising Spain 15.8% Belgium Print advertising Si
Slide 44: Sanoma is a sustainable investment with solid ESG performance
Sanoma is a sustainable investment with solid ESG performance MSCI rating Sustainalytics risk rating CDP score ISS rating Upright net impact AA 9.8 B C+ AA+ Scale 0–100, Scale AAA – CCC Scale A – D- Scale A – D lower score = lower risk Aligned with Signatory of Science UN SDGs UN Global Based Target
Slide 45: Solid dividend for our shareholders while growing through M&A
Solid dividend for our shareholders while growing through M&A ▪ A dividend of 0.54€ (2020: 0.52) per share to be paid for 2021 Dividend per share € – Representing a total of approx. 88m€ ▪ Payment in two parts – 0.27€ was paid in April – 0.27€ to be paid in November (record date 28 Oct) 60% Dividend
Slide 46: We have a well-balanced debt portfolio
We have a well-balanced debt portfolio External debt structure 1) Maturity profile 2022–2024 m€, 30 September 2022 m€, 30 September 2022 1 000 25 25 2 138 800 250 600 650 790m€ 1) 925 900 200 400 200 50 200 250 200 200 Term loan 2022 Term loan 2020 Bond 0 2022 2023 2024 2025 2026 Commercial papers O
Slide 47: Largest shareholders
Largest shareholders 31 October 2022 Largest shareholders Holding by sector Number of % of Shareholders shares shares 3% 1. Jane and Aatos Erkko Foundation 39,820,286 24.4 15% Antti Herlin 16% 2. 19,816,800 12.1 Holding Manutas Oy: 12.10%, personal: 0.02% 3. Langenskiöld Robin 12,273,371 7.5 4. Sepp
Slide 48: Analyst coverage
Analyst coverage Carnegie Investment Bank Pia Rosqvist-Heinsalmi +358 9 6187 1232 Danske Markets Equities Sami Sarkamies +358 40 502 9194 Inderes Petri Gostowski +358 40 821 5982 Kepler Cheuvreux Stefan Billing +46 8 723 51 48 Nordea Sanna Perälä +358 40 779 0845 OP Corporate Bank Kimmo Stenvall +35
Slide 49: Deep-dive into learning content businesses
Deep-dive into learning content businesses 1 December 2022 Virtual presentation and roundtable discussion with Rob Kolkman (CEO, Sanoma Learning) and Alex Green (CFO, Sanoma Group) Save the Date 49 Roadshow presentation November-December 2022
Slide 50: Financial reporting in 2023
Financial reporting in 2023 Full-Year Result 2022 10 February Interim Report Q1 2023 4 May Half-Year Report 2023 26 July Interim Report Q3 2023 26 October Financial Statements and Directors’ Report for 2022 week 10 AGM 2023 19 April 50 Roadshow presentation November-December 2022
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
Slide 52: Please contact our Investor Relations
Please contact our Investor Relations: Kaisa Uurasmaa, Head of IR & Sustainability M +358 40 560 5601 E [email protected] [email protected] www.sanoma.com