Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Investor Presentation (May 2013)
57 slides from Sanoma Oyj's investor presentation, May 2013
Slide 1: Sanoma Corporate Presentation May 2013
Sanoma Corporate Presentation May 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 Newspaper publishing #1 media company in Finland Learning Television the Netherlands and Finland Sweden Online operations Among top 2 educational players Estonia Radio 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 Wegener Alma Media MTV RTL NL TS-Yhtymä Audax Otavamedia De Persgroep NL #1 Keskisuomalainen #1 STER Edita 0 250 500 750
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 80 m Market: Finland Market Position: #1 Sales: approx. EUR 55 m Market: Netherlands FTEs: approx. 180 Market Position: #2 Siz
Slide 5: ONE SANOMA Transformation
Strategy set & portfolio changes executed Focus on consumer media and learning Strategic – Consumer media – value creation from leading multi-channel position focus – Learning – at the forefront of transformation ONE SANOMA Transformation Acquisitions and divestments of non-core assets in 2011 P
Slide 6: 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 Other 6 May
Slide 7: Focus on consumer media and learning
Focus on consumer media and learning 2010 Sales by 12% EBIT by 4% 23% 14% type of sales operating segment 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 Oth
Slide 8: Environment & Outlook
Environment & Outlook SAN OM CMecauteaelle|
Slide 9: Challenging environment
Challenging environment European economic outlook remains subdued Advertising market** Change in % vs. prior year Netherlands FY/2012 Q1/2013 Advertising markets under pressure Magazines -12 -17 Changes in market environment and weakened TV -6 -5 outlook for underlying businesses led to an Onl
Slide 10: Group outlook for 2013
Group outlook for 2013 Unchanged from the revised outlook published on 22 March 2013 In 2013, Sanoma expects that the Group’s consolidated net sales will decline by 2–4% compared to 2012 and operating profit excluding non-recurring items is estimated to be EUR 180–205 million. Sanoma’s outlook for 2
Slide 11: 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 12: 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, % Dividend yield, %** Dividend/share 125 122 EPS excl. nri FCF***/share 117 116 Cash flow fr
Slide 13: Sanoma's Group-wide transformation process
Sanoma’s Group – wide transformation process
Slide 14: Managing the digital transformation
Managing the digital transformation Drive performance of current business Multi-platform and digital growth Print (~60% of net sales) New consumer Advertising TV & Radio (~15% of net sales) Support functions revenues solutions Online (~10% of net sales) Balance sheet Learning solutions Learning mate
Slide 15: Group-wide transformation process
Group-wide transformation process Two parallel tracks Digital Transformation Raise the performance bar Cross-media development Focus Convert reach to revenues Culture Build new businesses Efficiency Financial flexibility
Slide 16: Cross-media development
Cross-media development From platform based to multi-channel and cross-media Supplements and Traditional Online product extensions print media Brand Content Services to Services Customers advertisers to consumers Our know- how Paid Free Key enabler: Print publishing Mobile and Application publishing
Slide 17: 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
Slide 18: Build new businesses
Build new businesses 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 Expans
Slide 19: Reposition Sanoma for future
Reposition Sanoma for future Raise the performance bar – focus & culture Focus on consumer media and learning From holding to Group company Main portfolio changes executed – continue to dispose non-core assets Fundamental change in mind-set and way of working Streamlining and enhancing ope
Slide 20: Savings target & cost structure
Savings target & cost structure Raise the performance bar – efficiency & financial flexibility Gross margin – continued to improve 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 pro
Slide 21: Financials
Financials SaAN OM CMecautcaelle|
Slide 22: First quarter is seasonally the weakest for the Group
First quarter is seasonally the weakest for the Group Q1 2013 – Solid performance in learning – investments and efficiency improvements in consumer media to address challenging environment – Net sales EUR 505 million (544) – organic growth -7.5% – EBIT excl. non-recurring items EUR -3.0 million (1
Slide 23: Income Statement
Income Statement Q1 2013 EUR million 1–3/2013 Restated* 1–3/2012 Restated* 1–12/2012 Net sales 505.2 543.6 2,376.3 EBITDA excl. non-recurring items 75.9 83.3 518.1 of net sales 15.0% 15.3% 21.8% Amortisations related to programming rights -48.1 -37.7 -156.9 Amortisations related to prepublication ri
Slide 24: Free cash flow
Free cash flow Cash flow from operations less cash CAPEX EUR million 1–3/2013 Restated 1–3/2012* Restated 1–12/2012* EBITDA excl. non-recurring items 75.9 86.9 523.0 TV programming costs -60.1 -48.7 -179.3 Prepublication costs -6.5 -6.2 -28.2 Change in working capital -35.3 -20.4 -11.4 Interest paid
Slide 25: Net sales development
Net sales development Q1 2013 1-3/2013 1-3/2013 organic share of 2012 organic EUR million (%) growth net sales growth Group -7.5 -3.3 543.6 -30.6 Media -10.8 64.0 -5.8 -9.0 +7.3 -6.2 News -8.2 20.0 -3.6 505.2 Learning +31.6 9.0 +8.6 Media: Advertising adversely affected net sales, especially in the
Slide 26: EBIT excl. non-recurring items development
EBIT excl. non-recurring items development Q1 2013 EUR million See slide 11 15.6 -28.3 + Solid underlying performance + In the Netherlands sales recognition earlier than expected -3.0 +2.0 +10.6 See slide 12 + Cost savings in other operations -2.9 1-3/2012 restated* Media News Learning Other & Elim.
Slide 27: Media – net sales and EBIT excl. non-recurring items
Media – net sales and EBIT excl. non-recurring items Q1 2013 Net sales EUR million 354.1 -18.4 Net sales impacted by adverse market -10.6 development -1.6 323.5 – Half of decline explained by weak advertising market in the Netherlands Decline in magazine circulation due to negative volume trends
Slide 28: News – net sales and EBIT excl. non-recurring items
News – net sales and EBIT excl. non-recurring items Q1 2013 Net sales EUR million 110.0 -7.7 Print advertising -19% while online +7% -1.2 -0.1 101.0 – Ilta-Sanomat was able to compensate the decline in print by growth in online Circulation sales decline slower than the average of 2012 due to the
Slide 29: Impairment charge in Sanoma Media Netherlands
Impairment charge in Sanoma Media Netherlands Impairment test – impact on Group vs local level Changes in market environment and weakened Group level outlook for underlying businesses led to an A goodwill and other intangible asset impairment charge impairment in March of EUR 34.8 million in San
Slide 30: Capital structure
Capital structure 31 March 2013 Funding secured for the coming years Net debt / EBITDA adjusted 4.3 4.1 Net debt EUR 1.3 billion (1.5) 3.6 – Net debt / EBITDA adjusted 4.1 times (4.0) <3.5 2.8 2.5 EBITDA adjusted is calculated based on 12-month rolling 2.0 EBITDA excl. non-recurring items (con
Slide 31: First quarter is seasonally the weakest for the Group
First quarter is seasonally the weakest for the Group 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
Slide 32: Sanoma's business units
Appendix 1 – Sanoma’s business units
Slide 33: Organisational structure
Organisational structure 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 New operating mo
Slide 34: Sanoma Media
Sanoma Media Key figures EUR million 1–3/2013 FY 2012 10–12/2012 7–9/2012 4–6/2012 1–3/2012 FY 2011 Net sales 323.5 1,487.1 406.3 338.1 388.6 354.1 1,369.2 The Netherlands 157.2 760.4 207.2 173.5 208.1 171.6 642.0 Finland 69.6 301.7 82.2 65.4 76.7 77.4 309.7 Russia & CEE 42.8 199.5 53.5 46.9 50.1 49
Slide 35: 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 36: 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 37: 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 38: 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 39: 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. 39 May 2013 Corporate Presentation
Slide 40: 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. 40 May 2013 Corporate Presentation
Slide 41: 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 342338 50 47 350 324 311 40 38 300 280 250 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 restated
Slide 42: Sanoma News
Sanoma News Key figures EUR million 1–3/2013 FY 2012 10–12/2012 7–9/2012 4–6/2012 1–3/2012 FY 2011 Net sales 101.0 422.8 107.6 98.3 106.8 110.0 435.8 Helsingin Sanomat 56.3 224.9 57.1 52.2 56.2 59.3 238.5 Ilta-Sanomat 20.0 84.3 21.1 20.0 22.0 21.2 84.4 Other businesses 24.8 113.5 29.4 26.1 28.6 29.5
Slide 43: 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 44: 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. 44 May 2013 Corporate Presentation
Slide 45: 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 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 IAS19 ‘Em
Slide 46: Sanoma Learning
Sanoma Learning Key figures EUR million 1–3/2013 FY 2012 10–12/2012 7–9/2012 4–6/2012 1–3/2012 FY 2011 Net sales 45.7 312.4 35.5 127.4 111.1 38.4 290.6 Learning 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 -0.5 0.0 0.0 0.0 -0.4 -2.1 EBIT excluding -4.
Slide 47: 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 48: 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 by type of sales Services 15.000 4%
Slide 49: 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
Slide 50: 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% 50 May 2013 Corporate Presentation
Slide 51: 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. 51 May 2013 Corporate Presentation
Slide 52: 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 40 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 due to a
Slide 53: About owners and coverage
Appendix 2 – About owners and coverage
Slide 54: Sanoma – largest shareholders
Sanoma – largest shareholders % of shares 30 April, 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: 4.89%, 5.83 Security Trading 0.92%, personal: 0.02%) 5. Helsingin Sanomat Foundation 3.50 6. Ilmarin
Slide 55: 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
Slide 56: 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] 56 May 2013 Corporate Presen
Slide 57: 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