Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Q2 2015 Earnings Presentation

37 slides from Sanoma Oyj's earnings presentation, Jul 23, 2015

  1. Slide 1: Q2 2015 Interim Report

    Q2 2015 Interim Report Harri-Pekka Kaukonen, President and CEO Kim Ignatius, CFO 23 July 2015

  2. Slide 2: Weak Performance in Finland – Outlook for 2015 and Mid-Term (2016) Revised

    Weak Performance in Finland – Outlook for 2015 and Mid-Term (2016) Revised  Operating performance in Q2 2015 - Media BeNe – Stable, TV viewing share builds positive momentum - Learning – Timing shifts and Polish situation impacting business, but full-year outlook solid - Media Finland – Performance

  3. Slide 3: Organic Growth Development

    Organic Growth Development Rolling 12 month organic sales growth Media BeNe 4  SBS gained advertising and viewing share in negative Dutch TV advertising market 2  Shift to automated advertising buying in online and mobile has put pressure on prices 0 Media Finland -2  Weak print sales not offset

  4. Slide 4: New Media Sales Flat in Q2

    New Media Sales Flat in Q2 Media BeNe & Media Finland Learning Share of rolling 12 month net sales Share of rolling 12 month net sales New Digital, hybrid media sales and services 39% 50% 4 23 July 2015 Q2 2015 Interim Report

  5. Slide 5: Advertising Market Remains Difficult

    Advertising Market Remains Difficult Finnish market negative despite positive boost in April (+4%) due to parliament elections Netherlands FY/’14 Q1/’15 Q2/’15 Newspapers -4 -3 -3 Magazines -12 -15 -15 TV +2 -4 -7 Radio +6 +3 +3 Online +11 +9 +9 Total market* +4 +2 +1 Finland FY/’14 Q1/’15 Q2/’15 Ne

  6. Slide 6: Media Finland – Responding to Performance Challenges

    Media Finland – Responding to Performance Challenges Challenges in market continue Accelerating implementation of strategy Change in GDP Q1 2012 – Q1 2015 (%)*  Performance in Media Finland below 10 8 6 expectations 5 4 4 4 2 2 1  Change programme in Media Finland ongoing, addressing overall Franc

  7. Slide 7: Media BeNe – SBS Building Positive Momentum

    Media BeNe – SBS Building Positive Momentum Viewing share in June highest for SBS since August 2011  Viewing share on improving path Prime-time share – Viewing share increased to 23.6% in June of viewing in 20-54 target group  TV advertising market declined by 7% in Q2 – Advertising share increase

  8. Slide 8: Cost Savings Programme Completed

    Cost Savings Programme Completed EUR 100 million Group-wide cost savings programme  EUR 100 million cost savings programme completed ahead of schedule  Savings of EUR 25 million achieved in Q2 2015, implying annual run-rate of EUR 100 million  Further opportunities beyond EUR 100 million identifi

  9. Slide 9: Reasons for Changes in Outlooks

    Reasons for Changes in Outlooks H2 2015 and FY 2016 expected to be weaker than anticipated – Media Finland the main reason Media BeNe Group EBIT excl. non-recurring items,  Overall no changes margin (%) Media Finland 6.4 6.2  Depressed market development  Operational underperformance, incl. addit

  10. Slide 10: Group Outlook for 2015 Revised, Mid-Term Outlook (2016) Withdrawn on 16 July 2015

    Group Outlook for 2015 Revised, Mid-Term Outlook (2016) Withdrawn on 16 July 2015 Outlook 2014 Previous outlook New outlook Mid-term actuals for 2015 for 2015 published outlook (2016) on 16 July 2015 Net sales growth EUR 1,901.6 million, “Around previous “Around previous No outlook for 2016 (organic

  11. Slide 11: Financials

    Financials SAN OM CMecauteaelile|

  12. Slide 12: Amortisations in Finnish TV Operations

    Amortisations in Finnish TV Operations  International TV rights – Demand for domestic TV content has increased in highly competitive market – Sanoma booked in Q2 2015 additional amortisations of EUR 6 million related to previously acquired international TV rights of series and movies  TV rights fo

  13. Slide 13: Learning – Timing Shifts Impacting Quarterly EBIT

    Learning – Timing Shifts Impacting Quarterly EBIT  Learning has strong seasonality – typically around 75% of sales and 160% of profits generated during Q2 and Q3  Industry trend changing, wholesalers optimise working capital by ordering later – the impact was visible in Q1 and Q2 2015 and will be

  14. Slide 14: Income Statement

    Income Statement Reported figures impacted by multiple divestments EUR million 4–6/2015 4–6/2014 1–6/2015 1–6/2014 1-12/2014 Net sales 468.8 533.1 848.9 971.3 1,901.6 EBITDA excl. non-recurring items 123.2 133.4 175.1 198.9 392.0 of net sales 26.3% 25.0% 20.6% 20.5% 20.6% Amortisations related to TV

  15. Slide 15: Net Sales Development

    Net Sales Development Q2 2015 4–6/2015 4–6/2014 4–6/2015 Media BeNe: TV net sales flat thanks to market share EUR million EUR million organic growth, % gains and higher distribution sales. Print Group 468.8 533.1 -6.6 magazine sales declined, driven by divestments and closing of titles. Media BeNe 2

  16. Slide 16: EBIT Excluding Non-Recurring Items Development

    EBIT Excluding Non-Recurring Items Development Q2 2015 EUR million 4–6/2015 4–6/2014 Media BeNe: + Cost efficiency Group 49.4 66.3 + Solid quarter for SBS driven by better viewing and advertising share Media BeNe 27.1 25.7 + Aldipress continued on positive track Media Finland -2.5 7.5 - Print sales,

  17. Slide 17: Free Cash Flow

    Free Cash Flow Cash flow from operations less cash CAPEX EUR million 4–6/2015 4–6/2014 1–6/2015 1–6/2014 1-12/2014 EBITDA excl. non-recurring items 123.2 133.4 175.1 198.9 392.0 TV programme costs -44.6 -41.5 -89.1 -86.3 -184.7 Prepublication costs -7.4 -7.1 -14.2 -14.2 -28.5 Change in working capit

  18. Slide 18: Capital Structure

    Capital Structure 30 June 2015  Net debt: EUR 930 million (Q2 2014: 950) Key figures – Net debt / EBITDA adjusted 5.5 times (4.2) Net debt (lhs) Net debt / EBITDA (rhs)  EBITDA adjusted: 12-month rolling EBITDA excl. non- 1600 6 recurring items, where acquired operations are included 1408 and dive

  19. Slide 19: Q&A

    &A SQN OM CMecauaelle|

  20. Slide 20: Appendix

    Appendix ERM aeMiKe] get the world

  21. Slide 21: Consumer confidence

    Consumer confidence Netherlands Finland 30 20 12.1 10 0 10.0 -10 -20 -30 -40 2011 2012 2013 2014 2015 21 23 July 2015 Q2 2015 Interim Report

  22. Slide 22: Net Sales Development H1 2015

    Net Sales Development H1 2015 1–6/2015 1–6/2014 1–6/2015 Media BeNe: Net sales declined mainly due to EUR million EUR million organic growth, % divestments of non-focus magazine Group 848.9 971.3 -5.3 titles as well as lower print advertising sales. TV sales were flat despite Media BeNe 405.5 425.7

  23. Slide 23: EBIT Excluding Non-Recurring Items Development H1 2015

    EBIT Excluding Non-Recurring Items Development H1 2015 EUR million 1–6/2015 1–6/2014 Media BeNe: + Cost efficiency Group 29.6 62.3 + SBS TV operations - Print sales, mainly due to divestments Media BeNe 32.9 34.0 Media Finland -4.6 7.9 Learning 19.8 34.2 Media + Cost savings Other & elim. -18.5 -13.

  24. Slide 24: Net Sales Split

    Net Sales Split Rolling 12 months Media operations Learning Netherlands and Finland 86% of net sales Diversified portfolio with several key markets 45% 34% 41% 25% 15% 13% 12% 9% 5% 1% Netherlands Finland Belgium Other Netherlands Poland Finland Belgium Sweden International Consumer media (BeNe and

  25. Slide 25: Summary of Operating Performance

    Summary of Operating Performance Last 12 months* – New media sales: EUR 560 million in Media Finland and Media BeNe Three Strategic Business Units Media Finland Media BeNe Learning Other** TV & radio Net sales EUR 340 million Magazines Net sales EUR 580 million Online & mobile Net sales Q3/2014 – Q2

  26. Slide 26: Media BeNe Key Figures

    Media BeNe Key figures 2015 2014 2013 EUR million Q2 Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 216.0 189.5 870.8 241.5 203.6 231.7 194.0 896.8 Digital 83.9 67.1 308.6 90.3 67.8 84.6 65.9 305.3 Online & mobile 21.6 20.9 87.2 24.9 20.1 21.8 20.4 90.3 TV 62.3 46.2 221.4 65.4 47.7 62.8 45.5 215.0 Print 1

  27. Slide 27: Media Finland Key Figures

    Media Finland Key figures 2015 2014 2013 EUR million Q2 Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 145.7 143.0 637.2 165.5 148.0 164.6 159.0 675.4 Digital 56.9 50.0 198.7 53.2 43.5 53.4 48.6 185.9 Online & mobile 25.7 21.9 84.8 23.2 18.3 22.1 21.3 74.7 TV & radio 31.2 28.0 113.8 30.1 25.1 31.4 27.3 11

  28. Slide 28: Learning Key Figures

    Learning Key figures 2015 2014 2013 EUR million Q2 Q1 FY 2014 Q4 Q3 Q2 Q1 FY 2013 Net sales 97.9 37.4 292.0 30.9 113.0 106.9 41.2 304.6 Netherlands 39.9 21.5 98.1 8.3 24.6 40.7 24.5 95.3 Poland 12.8 6.6 86.8 12.6 51.1 17.8 5.2 83.8 Finland 25.5 3.8 48.3 4.1 10.6 28.8 4.8 53.5 Belgium 14.3 1.5 34.8 2

  29. Slide 29: TV – Net Sales and EBIT Seasonality

    TV – Net Sales and EBIT Seasonality 2010–2014 average for Dutch and Finnish TV* Net sales split EBIT** split 5% 22% 29% 30% 44% 29% 20% 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes SBS Netherlands (excluding PPA amortization) and Nelonen Media Finland. **Excluding non-recurring items. 29 23 July 2015 Q2 20

  30. Slide 30: Magazines – Net Sales and EBIT Seasonality

    Magazines – Net Sales and EBIT Seasonality 2010–2014 average for Dutch and Finnish Magazines* Net sales split EBIT** split 18% 23% 27% 29% 28% 26% 24% 24% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Includes Dutch and Finnish operations, excluding TV guides. 2010-2012 not restated with IFRS 11 ‘Joint Arrangements’. **

  31. Slide 31: Newspapers – Net Sales and EBIT Seasonality

    Newspapers – Net Sales and EBIT Seasonality 2010–2014 average for Newspapers (Finland) incl. digital business Net sales split EBIT* split 26% 25% 23% 30% 19% 24% 25% 29% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Excluding non-recurring items. 31 23 July 2015 Q2 2015 Interim Report

  32. Slide 32: Learning – Net Sales and EBIT Seasonality

    Learning – Net Sales and EBIT Seasonality 2010–2014 average for Learning Net sales split EBIT* split in relative terms 12% 13% 35% 40% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Excluding non-recurring items. 32 23 July 2015 Q2 2015 Interim Report

  33. Slide 33: Sanoma – Largest Shareholders

    Sanoma – Largest Shareholders % of shares 30 June 2015 and votes 1. Jane and Aatos Erkko Foundation 23.18 23.2% 2. Antti Herlin 10.79 (Holding Manutas Oy: 10.77%, personal: 0.02%) 3. Robin Langenskiöld 7.54 4. Rafaela Seppälä 6.31 5. Helsingin Sanomat Foundation 3.50 48.7% 6. Ilmarinen Mutual Pensio

  34. Slide 34: Analyst Coverage

    Analyst Coverage  Carnegie  Handelsbanken  Nordea Investment Bank Capital Markets Sami Sarkamies Matti Riikonen Rasmus Engberg tel. +358 9 165 59928 tel. +358 9 6187 1231 tel. +46 8 701 5116 Nordea.com/markets Carnegie.fi Handelsbanken.com/ capitalmarkets  Pohjola  Danske Markets Equities Kimmo

  35. Slide 35: Sanoma's IR Team

    Sanoma’s IR Team Mr Olli Turunen tel. +358 40 552 8907 [email protected] Mr Pekka Rouhiainen tel. +358 40 739 5897 [email protected] Ms Katariina Hed tel. +358 50 412 5120 [email protected] 35 23 July 2015 Q2 2015 Interim Report

  36. Slide 36: 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

  37. Slide 37: sqnomd

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Sanoma — Q2 2015 Earnings Presentation on 6ix