Sanoma Oyj · OMXHEX:SANOMA
Sanoma Oyj — Non-Deal Roadshow (February 2012)
62 slides from Sanoma Oyj's roadshow presentation, February 2012
Slide 1: Transforming Sanoma
Sanoma - Transforming Sanoma February 2012
Slide 2: Contents
Contents Sanoma Transforming Sanoma Appendix 1: Highlights of 4Q11 and FY2011 result Appendix 2: Next priorities Appendix 3: Additional information on 4Q11 result Appendix 4: Seven strategic business units Appendix 5: About owners and coverage February 2012 © Sanoma Corporation 2
Slide 3: Sanoma in brief
Sanoma in brief One of the leading media companies in Europe Focusing on consumer media and learning Market leader in chosen businesses and markets Strong cash generator Good dividend payer February 2012 © Sanoma Corporation 3
Slide 4: Focusing on media and learning
Focusing on media and learning 2011*: Net sales EUR 2,746 million EBIT EUR 239 million** Personnel 13,646 (FTE) Sanoma Sanoma Sanoma Sanoma Sanoma Sanoma Sanoma News Media Media Media Media Learning Trade Belgium Finland Netherlands Russia & CEE Net sales M€ 436 Net sales M€ 209 Net sales M€ 310 Net
Slide 5: Market leadership based on strong brands, excellent content and loyal customers
Market leadership based on strong brands, excellent content and loyal customers #1 media company in the Netherlands and Among the top 5 magazine Finland publishers in Europe #2 TV player in the #2 media Netherlands and Finland #1 newspaper company publisher in in Hungary Finland Among the top 2 maga
Slide 6: Year of restructuring & refocusing
Year of restructuring & refocusing Towards One Sanoma • New priorities • Focus on consumer established media and learning • Divest non-core assets - Movie operations, Finnish bookstores, general literature publishing, real estates and kiosk/press • Seven Strategic Business distribution in Russia, Un
Slide 7: New priorities
New priorities • Four operational legs – Develop print business – Ensure profitable organic growth in TV business – Ensure profitable organic growth in learning business – Drive cross-media and multi-channel expansion through digital • Streamline OPEX and ensure financial flexibility • Transform San
Slide 8: Sanoma Pro Forma
Sanoma Pro Forma* 2011 Sales by operating segment by type of sales by geographic area 10 % 3% 16 % 11 % 32 % 17 % 10 % 43 % 12 % 57 % 10 % 15 % 18 % 33 % 13 % Advertising sales Subscription sales Finland The Netherlands Single copy sales Learning Belgium Other EU Media News Learning Trade Retail Oth
Slide 9: Significant changes in portfolio mix
Significant changes in portfolio mix Stable net sales, EBIT and cash flow generation EBIT excluding non-recurring Cash flow from operations Net sales (EUR million) items (EUR million) (EUR million) 800 100 160 90 140 700 80 120 600 70 100 500 60 80 400 50 60 40 300 40 30 200 20 20 100 0 10 0 0 -20 Q
Slide 10: High dividend yield – based on solid cash generation
High dividend yield – based on solid cash generation Dividend yield of 6.8% in 2011** Dividend/share Earnings/share Cash flow from operations/share 2,0 EUR million 1,8 1,6 1,4 1,2 1,0 0,8 0,6 * 0,4 0,2 0,0 2004 2005 2006 2007 2008 2009 2010 2011 Cash flow from operations stable over the years * Prop
Slide 11: Investment highlights
Investment highlights One of the leading media companies in Europe Focusing on consumer media and learning Market leader in chosen businesses and markets Strong cash generator Good dividend payer February 2012 Sanoma Corporation 11
Slide 12: Appendix 1: Highlights of 4Q11 and FY2011 result
Appendix 1 Highlights of 4Q11 and FY2011 result
Slide 13: Year of solid performance and structural changes in volatile markets
Year of solid performance and structural changes in volatile markets Fourth quarter • Net sales EUR 725.4 (717.3) million – Adjusted for structural changes -1.8% • Operating profit excl. non-recurring items EUR 60.6 (34.5) million • Strong cash flow generation, EUR 140.8 (99.8) million Year 2011 • N
Slide 14: Financial highlights
Financial highlights Q4 2011 EUR million 10–12/2011 10–12/2010 Change % Net sales 725.4 717.3 +1.1 EBITDA excl. non-recurring items 146.2 79.5 +84.0 of net sales 20.2% 11.1% EBIT excl. non-recurring items 60.6 34.5 +75.6 of net sales 8.4% 4.8% EBIT 51.9 27.4 +89.9 EPS excl. non-recurring items, EUR
Slide 15: Asset mix changed
Asset mix changed Net sales – Q4 2011 EUR million 2011 Organic Share of organic (%) Growth growth net sales growth +95.0 -2.9 -12.5 Group +1.1 -1.8 +0.3 Media +27.1 -4.4 60.7 -0.4 -76.0 News -2.5 -1.8 15.2 +1.9 Learning -19.1 -4.6 7.2 -1.0 Trade -37.9 +3.2 16.9 +0.1 Media: Consolidation of acquired
Slide 16: Structural changes, efficiency improvements
Structural changes, efficiency improvements EBIT excl. non-recurring items – Q4 2011 EUR million +28.3 +1.1 -5.4 +3.1 60.6 -1.0 Efficiency improvement • Mainly related to divestment of bookstores in Sep 2011 • Operational result in kiosk operations improved significantly 34.5 • Mainly related to str
Slide 17: Items related to SBS transaction
Items related to SBS transaction Post acquisition Transaction related items, EUR million 2011 estimate 2011 actual 2012 (pre acquisition) annual estimate (post acquisition) Above EBITDA Transaction costs 10.0 16.8 n/a Below EBITDA Amortisation of trade names* 3.3 2.8 6.5 Amortisation of customer and
Slide 18: Income Statement
Income Statement EUR million 1–12/2011 1–12/2010 Change Net sales 2,746.2 2,761.2 -15.0 EBITDA excl. non-recurring items 469.5 406.3 63.2 of net sales 17.1% 14.7% Amortisations related to programming rights 92.9 36.3 -56.7 Other amortisation 52.1 28.2 -23.9 Depreciations related to prepublication ri
Slide 19: Operating expenses down by 1.8% in 2011
Operating expenses down by 1.8% in 2011 Net sales decreased by 0.5% Operating expenses 2008 MEUR 2,659.0 CAGR 2009 08–11 -3.5% 2010 MEUR 2,386.6 Net sales 2011 0 500 1000 1500 2000 2500 3000 CAGR EUR million 08–11 Total paper costs Raw materials & supplies (excl. paper) -3.2% Purchased transport & d
Slide 20: Free cash flow
Free cash flow Cash flow from operations less CAPEX EUR million 1–12/2011 1–12/2010 Change EBITDA excl. non-recurring items 469.5 406.3 63.2 TV programming costs 92.0 33.8 58.1 Prepublication costs 28.4 24.7 3.7 Change in working capital 50.2 5.2 45.0 Interest paid 23.6 13.7 9.9 Other financial item
Slide 21: Debt portfolio
Debt portfolio 31 December 2011 Committed credit facilities profile* • Gross debt EUR 1,727.2 million and (EUR million) net debt EUR 1,611.2 million • Average interest rate just below 563 2.5% p.a. • Post tax interest expense would increase by EUR 8.5 million, should the level in market interest rat
Slide 22: Material pension fund obligations
Material pension fund obligations • The Netherlands – Market value of the assets EUR 366.8 million – Pension obligations EUR 352.6 million • Finland – Market value of the assets EUR 143.2 million – Pension obligations EUR 137.0 million As of 31 December 2011. February 2012 © Sanoma Corporation 22
Slide 23: High dividend yield – based on solid cash generation
High dividend yield – based on solid cash generation Dividend yield of 6.8% in 2011** Dividend/share Earnings/share Cash flow from operations/share 2,0 EUR million 1,8 1,6 1,4 1,2 1,0 0,8 0,6 * 0,4 0,2 0,0 2004 2005 2006 2007 2008 2009 2010 2011 Cash flow from operations stable over the years * Prop
Slide 24: Outlook for 2012
Outlook for 2012 • Net sales to grow slightly, mostly due to the acquired SBS operations in the Netherlands and Belgium – In 2011, net sales were EUR 2,746.2 million • Operating profit margin, excluding non-recurring items, is estimated to be around 10% of net sales – In 2011, operating profit margi
Slide 25: Seasonality between the quarters
Seasonality between the quarters Annual net sales, EBIT and cash flow generation stable over the years EBIT excluding non-recurring Cash flow from operations Net sales (EUR million) items (EUR million) (EUR million) 800 100 160 90 140 700 80 120 600 70 100 500 60 80 400 50 60 40 300 40 30 200 20 20
Slide 26: Appendix 2: New priorities
Appendix 2 New priorities
Slide 27: New priorities
New priorities • Four operational legs – Develop print business – Ensure profitable organic growth in TV business – Ensure profitable organic growth in learning business – Drive cross-media and multi-channel expansion through digital • Streamline OPEX and ensure financial flexibility • Transform San
Slide 28: Next steps in print
New priorities Next steps in print • Ensure market leadership and competitiveness – Foster integrated process for content creation – Strengthen and expand key brands – Portfolio optimisation – Operational efficiency – Develop custom media • Successful digitalisation through cross-media and multi-cha
Slide 29: TV in Finland
TV in Finland • Grown to a strong challenger Nelonen Media reach of target group (weekly) 100% • Pay TV +41% and online +44% in 2011 • Online catch-up service market share 25% in 75% Q4/11 50% • Next steps • Strive for market leadership in 10–44 target 25% group 0% • Strengthen paid content and onli
Slide 30: TV in Netherlands
TV in Netherlands • Turnaround needed to strengthen the SBS reach of target group (weekly) challenger position 100% • Next steps 75% • Turnaround - to change the tide of declining viewing and advertising shares 50% • Investments and cross promotion to fuel 25% innovation and quality to strengthen vi
Slide 31: Learning business in transformation
Learning business in transformation • It is all about workflow efficiency and personalised learning • Next steps – Move content to digital – Add new functionalities – Build modular technology platforms – Move to annual subscription model Net sales (EUR million) CAGR 09–11 +3.6% 300 250 200 150 100 5
Slide 32: Drive cross-media and multi-channel expansion through digital
New priorities Drive cross-media and multi-channel expansion through digital • Continue to roll-out classical/digital propositions for our core media brands • Develop online/mobile positions and competencies • Develop capabilities and offerings for next generation advertising and e-commerce services
Slide 33: Streamline OPEX and ensure financial flexibility
New priorities Streamline OPEX and ensure financial flexibility • Focus on cash flows, including – Operational benchmarking – Working capital efficiency – Centralised procurement function – Efficiency in shared services – Number of legal entities – CAPEX efficiency • Divest non-core assets Sanoma’s
Slide 34: Transforming Sanoma’s culture
New priorities Transforming Sanoma’s culture • Nurture our winning culture and build a higher-performing company • Strong emphasis on customer insight: we know our consumers, advertisers, pupils and teachers • Adopt new mind-sets in driving growth and innovation – From selling inventory to selling s
Slide 35: Appendix 3: Additional information on 4Q11 result
Appendix 3 Additional information on 4Q11 result
Slide 36: Sanoma Pro Forma
Sanoma Pro Forma* 2011 Sales by operating segment by type of sales by geographic area 10 % 3% 16 % 11 % 32 % 17 % 10 % 43 % 12 % 57 % 10 % 15 % 18 % 33 % 13 % Advertising sales Subscription sales Finland The Netherlands Single copy sales Learning Belgium Other EU Media News Learning Trade Retail Oth
Slide 37: Consumer online sales up by 16.3% in Q4 and 13.2% in 2011
Consumer online sales up by 16.3% in Q4 and 13.2% in 2011 EUR million 60 50 50 43 43 41 40 38 39 35 35 30 20 10 0 Q1 Q2 Q3 Q4 2010 2011 Consumer online includes online advertising, online services and digital content sales from Media and News segments. February 2012 © Sanoma Corporation 37
Slide 38: Sanoma Media
Sanoma Media Net sales EBIT excluding non-recurring items EUR million EUR million 500 70 65 446 450 60 400 355 351 339 50 47 350 324 312 291 298 300 38 40 36 250 31 31 30 26 200 23 150 20 100 10 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2010 2011 February 2012 © Sanoma Corporation 38
Slide 39: Sanoma Media key figures
Sanoma Media Key figures 10–12/ 10–12/ Change 1–12/ 1–12/ Change EUR million 2011 2010 % 2011 2010 % Net sales 445.6 350.6 +27.1 1,415.8 1,299.6 +8.9 The Netherlands 232.2 136.1 +70.5 642.0 490.4 +30.9 Finland 86.2 87.4 -1.4 309.7 339.3 -8.7 Russia & CEE 56.7 60.9 -6.9 213.1 214.9 -0.8 Belgium 61.9
Slide 40: Sanoma News
Sanoma News Net sales EBIT excluding non-recurring items EUR million EUR million 116 115 18 114 16 16 112 112 14 112 14 13 13 109 12 110 108 109 12 108 10 10 10 9 106 105 8 104 103 6 102 100 4 98 2 96 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2010 2011 February 2012 © Sanoma Corporation 40
Slide 41: Sanoma News key figures
Sanoma News Key figures 10–12/ 10–12/ Change 1–12/ 1–12/ Change EUR million 2011 2010 % 2011 2010 % Net sales 112.0 114.9 -2.5 435.8 437.6 -0.4 Helsingin Sanomat 60.8 64.1 -5.1 238.5 235.4 +1.3 Ilta-Sanomat 21.6 21.6 -0.1 84.4 83.3 +1.4 Other publishing 25.4 25.0 +1.7 97.0 99.5 -2.5 Other businesses
Slide 42: Sanoma Learning
Sanoma Learning Net sales EBIT excluding non-recurring items EUR million EUR million 140 50 46 42 121 121 120 40 109 106 29 30 26 100 20 80 65 10 58 61 60 53 0 40 -5 -10 -6 20 -14 -20 -20 0 -30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2010 2011 February 2012 © Sanoma Corporation 42
Slide 43: Sanoma Learning key figures
Sanoma Learning Key figures 10–12/ 10–12/ Change 1–12/ 1–12/ Change EUR million 2011 2010 % 2011 2010 % Net sales 52.7 65.1 -19.1 343.1 350.1 -2.0 Learning 34.7 33.7 +2.8 256.6 249.3 +3.0 Language services 8.4 8.9 -5.6 32.4 27.1 +19.4 Literature and other businesses 10.4 24.8 -58.0 59.5 83.6 -28.9 E
Slide 44: Sanoma Trade
Sanoma Trade Net sales EBIT excluding non-recurring items EUR million EUR million 250 8 7 7 7 201 200 181 6 170 174 6 162 156 155 5 5 150 125 4 4 4 3 100 3 2 2 50 1 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2010 2011 February 2012 © Sanoma Corporation 44
Slide 45: Sanoma Trade key figures
Sanoma Trade Key figures 10–12/ 10–12/ Change 1–12/ 1–12/ Change EUR million 2011 2010 % 2011 2010 % Net sales 124.5 200.5 -37.9 597.0 726.3 -17.8 Kiosk operations 94.0 102.4 -8.2 379.2 398.4 -4.8 Trade services 28.6 34.5 -16.9 121.7 131.3 -7.3 Bookstores 3.7 43.2 -91.5 77.0 120.6 -36.2 Movie operat
Slide 46: Appendix 4: Seven strategic business units
Appendix 4 Seven strategic business units
Slide 47: Successful Integration
Successful Integration Steps to a leading media company 1999: Sanoma and WSOY merged and listed on the Helsinki Stock Exchange 2001: VNU Consumer Information Group acquisition Magazine division with operations in nine countries 2003: Rautakirja merged into Sanoma 2004: Malmberg and Van In acquisitio
Slide 48: Operations in over 20 countries
Operations in over 20 countries - reaching out to 290 million potential customers Magazine publishing Television Newspaper publishing Norway Finland Learning Sweden Estonia Online operations Press distribution and retail Lithuania Russia UK The Netherlands Poland Belgium Czech Republic Ukraine Hunga
Slide 49: Focusing on media and learning
Focusing on media and learning 2011*: Net sales EUR 2,746 million EBIT EUR 239 million** Personnel 13,646 (FTE) Sanoma Sanoma Sanoma Sanoma Sanoma Sanoma Sanoma News Media Media Media Media Learning Trade Belgium Finland Netherlands Russia & CEE Net sales M€ 436 Net sales M€ 209 Net sales M€ 310 Net
Slide 50: Sanoma News
Sanoma News • Net sales 2011: EUR 436 million • Helsingin Sanomat and Ilta-Sanomat are the leading newspapers in Finland • Metro and Vartti are the leading free sheets in Finland • Etelä-Saimaa, Kouvolan Sanomat and Kymen Sanomat are the leading regional papers • Digital media, a growth area: – Mark
Slide 51: Sanoma Media Belgium
Sanoma Media Belgium • Net sales 2011: EUR 209 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 TV4 and vijf
Slide 52: Sanoma Media Finland
Sanoma Media Finland • Net sales 2011: EUR 310 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 53: Sanoma Media Netherlands
Sanoma Media Netherlands • Net sales 2011: EUR 642 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 54: Sanoma Media Russia & CEE
Sanoma Media Russia & CEE • Net sales 2011: EUR 213 million • Operates in nine markets: Bulgaria, Croatia, the Czech Republic, Hungary, Romania, Russia, Serbia, Slovenia and Ukraine • Publishes over 140 consumer magazines mainly targeted at women - Cosmopolitan, Men’s health, Harper’s Bazaar, Nation
Slide 55: Sanoma Learning
Sanoma Learning • Net sales 2011: EUR 343 million • One of Europe’s largest providers of learning materials and solutions operating in Finland, Hungary, Belgium, the NL, Poland, Russia and Sweden • Leading language service provider in the Nordic countries • Business information provider Esmerk opera
Slide 56: Sanoma Trade
Sanoma Trade • Net sales 2011: EUR 597 million • Sanoma Trade is the market leader – in kiosk operations and trade services in Finland and Lithuania, and has strong position in Estonia • Finland’s largest trade services organisation Lehtipiste supplies newspapers and magazines to more than 8,000 out
Slide 57: Appendix 5: About owners and coverage
Appendix 5 About owners and coverage
Slide 58: Largest shareholders
Largest shareholders 31 Jan 2012 % of shares and votes Aatos Erkko (of which through Oy Asipex Ab: 7.25%) 23.02 Robin Langenskiöld 7.54 Rafaela Seppälä 6.31 Antti Herlin (Holding Manutas Oy: 3.51%, Security Trading 0.60%) 4.13 Helsingin Sanomat Foundation 3.50 Ilmarinen Mutual Pension Insurance Comp
Slide 59: Analyst coverage
Analyst coverage Carnegie Investment Bank E. Öhman J:or Securities Finland Nordea Matti Riikonen Teemu Vainio Sami Sarkamies tel. +358 9 6187 1231 tel. +358 9 8866 6038 tel. +358 9 165 59928 Carnegie.fi Ohman.se Nordea.com/markets Crédit Agricole Cheuvreux Nordic FIM Pohjola Niklas Kristoffersson Ma
Slide 60: Sanoma’s IR team
Sanoma’s IR team Mr Martti Yrjö-Koskinen tel. +358 105 19 5064 martti.yrjo-koskinen(at)sanoma.com Ms Anna Tuominen tel. +358 105 19 5066 anna.tuominen(at)sanoma.com Ms Katariina Hed tel. +358 105 19 5062 katariina.hed(at)sanoma.com IR team’s joint email address: ir(at)sanoma.com February 2012 © Sano
Slide 61: Important notice
Important notice The following information 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
Slide 62: Inspires, Informs and Connects
Inspires, Informs and Connects