Full-Year Result 2017

Transcription

1 Full-Year Result 2017 Susan Duinhoven, President and CEO Markus Holm, CFO & COO 8 February 2018

2 Before we start: Adjustments and Discontinued operations In January 2018 Sanoma announced an intention to divest its Belgian women s magazine portfolio Net sales of the divested business was EUR 81 million and operational EBIT EUR 7 million (EBIT margin 8.1%) in The divested business is consequently classified as Discontinued operations in this presentation. All income statement related quarterly and FY figures presented in this report, including corresponding periods in 2016, cover Continuing operations only and exclude Discontinued operations, unless otherwise stated. In July 2017, Sanoma divested its Dutch FTA TV operations, SBS, for a net cash consideration of EUR 237 million As a result of the transaction Sanoma recognised a non-cash capital loss of EUR million. The total impact of the transaction on the Group s net result is EUR -286 million. All income statement related quarterly and FY figures presented in this presentation for 2017, including corresponding periods in 2016, are adjusted for the SBS divestment unless otherwise stated Full-Year Result Complete financial performance is presented in FY 2017 Results. Financial Statements 2017 are to be published on 28 February 2018.

3 Highlights FY 2017: Solid operational EBIT improvement Profitability improved by 21% Operational EBIT EUR 181 million (2016: 150) Operational EBIT incl. SBS EUR 178 million (2016: 165), EBIT margin 12.4% Driven by strong profitability improvement in Media Finland and lower Other costs Net sales were stable EUR 1,327 million (2016: 1,322) Major changes in our business portfolio finalized Operational EPS improved by 56% EUR 0.72 (2016: 0.46) Leverage down to 1.7 (2016: 3.2) Below the long-term target level of <2.5 Proposed dividend EUR 0.35 per share To be paid in two instalments, EUR 0.20 on 4 April and EUR 0.15 on 1 November (estimated) Outlook for FY 2018 Net sales adjusted for structural changes slightly below 2017 Operational EBIT margin around 14% Full-Year Result

4 FY 2017 Operational EBIT improved by 21% Operational EBIT improved to EUR 181 million, margin to 13.6% Earnings growth driven by strong profitability improvement in Media Finland Learning EBIT stable with higher investments and development costs related to creating new learning methods Media BeNe s operational EBIT stable while margin improved to 15.6% All three SBUs absorbed a significantly larger part of overall Group costs (booked in Other in 2016) Operational EBIT by SBU in 2017 MEUR Media BeNe Media Finland Learning Other Full-Year Result

5 Media BeNe Year of finalizing portfolio change Net sales were EUR 437 million (2016: 459) Decline mainly due to the divestment of Kieskeurig.nl while subscription sales grew Operational EBIT margin improved further to 15.6% (2016: 14.7%) Major changes finalized FTA TV operations, SBS, divested in July 2017 Intention to divest Belgian women s magazines announced in January 2018, expected closing by the end of Q Streamlined back-office organisation reflecting lower complexity of the business New CEO Marc Duijndam started on 1 Jan 2018 Composition of net sales 2017 Advertising sales Subscription sales Single copy sales Other * 31% 17% 19% 33% * Other sales mainly include press distribution and marketing services, custom publishing, event marketing and books. NU.nl reach and user engagement at all-timehigh > 7mn Unique visitors a month 49% Coverage of Dutch population (13+ y) > 300mn Video views annually Full-Year Result

6 Finnish measured media advertising markets Q4 16 FY 16 Q1 17 Q2 17 Q3 17 Q4 17 FY 17 Newspapers -4% -4% -9% -12% -12% -10% -11% Magazines -12% -9% -7% -12% -9% -1% -6% TV 1% -1% -6% -7% -4% -4% -5% Radio -4% 3% 4% 0% 8% 4% 4% Online * 15% 13% 8% 1% 10% 12% 7% Total market * 0% 1% -3% -5% -2% -1% -3% Source: Kantar TNS, Media advertising trends 12/2017 * Quarterly figures excl. online search, Full year numbers are based on a larger amount of data than quarterly numbers and include online search. Total market includes other smaller categories such as cinema and outdoor advertising Full-Year Result

7 Media Finland Significant profitability improvement Net sales were stable and amounted to EUR 571 million (2016: 581) Share of non-print sales continued to grow representing 44% (2016: 42%) of net sales Operational EBIT improved by 33% to EUR 66 million driven by continued cost and process innovations The total number of HS subscriptions increased throughout H2 Nelonen Media s commercial viewing share on a good level and strong growth in the reach of the Ruutu VOD Composition of net sales 2017 Advertising Subscription Single copy Other * * Other sales mainly include marketing services, custom publishing, event marketing, books and printing services. HS subscriptions Total number of subscriptions % 8% 37% > 387,000 46% Jan Feb March April May June July Aug Sep Oct Nov Dec Full-Year Result

8 Learning Net sales growth of 13% Net sales by country 2017 Poland 7% Net sales grew to EUR 320 million (2016: 283) Netherlands Finland Belgium Sweden 16% 17% 31% Growth was strongest in Poland with market share gain in a strongly grown market due to curriculum reform 29% Net sales grew also in Finland and Belgium Composition of net sales 2017 Operational EBITDA improved by 13% Positive impact of well managed cost innovations and net sales growth Operational EBIT was stable Higher development costs as well as increased depreciation and amortisation due to higher investments and acquired De Boeck assets in Belgium Hybrid Digital Services Print 55 % 28 % 14 % 3 % Full-Year Result

9 The Board proposes a dividend of EUR 0.35 Dividend development EUR For 2017, Board proposes dividend of EUR 0.35 (2016: 0.20) per share 55% of operational cash flow less capex To be paid in two instalments, EUR 0.20 on 4 April and EUR 0.15 on 1 November Dividend policy: Sanoma aims to pay an increasing dividend, equal to 40 60% of annual cash flow from operations less capital expenditure % When proposing a dividend to the AGM, the Board of Directors will look at the general macro-economic environment, Sanoma s current and target capital structure, future business plans and investment needs as well as both previous year s cash flows and expected future cash flows affecting capital structure Oper. CF - capex / share DPS Full-Year Result

10 Sanoma in 2018 and beyond Major portfolio changes completed Smaller portfolio adjustments in our core businesses still to be expected part of normal operation Continued focus on customer, profitability & cash flow Follow the customer Constant cost innovations Restructuring costs to decrease Cash conversion to increase Increasing focus on growth Market and geographic expansion in Learning Highly synergetic bolton acquisitions All this resulting in Improved profitability Stronger cash generation Increasing dividend Equity ratio and leverage within long-term target Solid base with improved profitability and leverage within the long-term target range Full-Year Result

11 Outlook for 2018 Sanoma expects that the Group s Consolidated net sales, adjusted for structural changes, will be slightly below 2017 Operational EBIT margin will be around 14%. The outlook is based on the assumption of the consumer confidence and advertising markets in the Netherlands and Finland being in line with that of Full-Year Result

12 Financials

13 Improvement both in operational EBITDA and EBIT levels EUR million Q Q Change FY 2017 FY 2016 Change Net sales % 1, , % EBITDA % % Items affecting comparability Operational EBITDA % % of net sales 15.1% 12.5% 24.9 % 22.6 % Amortisations related to TV programme rights % % Amortisations related to prepublication rights % % Other amortisations % % Depreciation % % Operational EBIT % % of net sales 0.5% -1.4% 13.6% 11.3% Operational EPS % Full-Year Result

14 Solid operational EBIT improvement Media BeNe Media Finland + Cost innovations across the board, incl. streamlining of back-office post SBS - Lower sales, especially B2B due to the divestment of Kieskeurig.nl + Growth in HS and Ruutu subscription sales + Cost innovations, esp. distribution + Lower fixed costs + One-off corrections of EUR 4 million in Q1 EUR million SBS Learning + Strong sales growth + Good overall cost management - Higher development costs, esp. in Poland - Increased depreciation and amortisation following higher investments and acquisitions Other + Changes in internal allocations bringing a higher share of the overall costs to SBUs + Cost reductions FY 2016 Media BeNe Media Finland Learning Other & Elim. FY Full-Year Result

15 Free Cash Flow (12 mr) on a good level 150 Quarterly FY mr * + Higher EBITDA + Significantly lower financial cost - Restructuring costs 0 - Higher taxes paid - Working capital change * Exceptional positive working capital change in Q Free cash flow = Cash flow from operations less cash capex, incl. SBS and Discontinued operations Full-Year Result

16 Leverage below the long-term target level 1,200 1, Net debt to adjusted EBITDA* at 1.7 at the end of 2017 (2016: 3.2) EUR 237 million from SBS divestment was used to reduce debt Net debt EUR 392 million at the end of 2017 (2016: 786) Equity ratio recovered to 38.5% being within the long-term target range of 35 45% 0 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Hybrid bond 100 M (lhs) Mar 16 Net debt / Adjusted EBITDA * (rhs) Jun 16 Sep 16 Dec 16 Mar 17 Net debt M (lhs) Jun 17 Sep 17 Dec Full-Year Result * Adjusted EBITDA: 12-month rolling operational EBITDA, where acquired operations are included and divested operations excluded, and where programming rights and prepublication rights have been raised above EBITDA on cash-flow basis

17 Lower financing costs Debt structure EUR million, 31 December 2017 Net financial items decreased to EUR -23 million (2016: -37) 17 2 Average interest rate down to 2.1% (2016: 2.8%) in EUR 200 million of Bond 2017 was repaid in March, using commercial papers and bank financing 50 Bond 3.5% CPs Bank account limits Term loan Other loans Full-Year Result

18 IFRS 15: Revenue from contracts with customers Effective 1 January 2018 The impact of IFRS 15 on the Group s net sales, net result and balance sheet is considered insignificant, although the phasing over individual quarters will be affected, mainly in Learning Sanoma will disclose restated financial figures for 2017 in a separate release during Q Full-Year Result

19 Coming up in February Financial Statements March AGM April Q Interim Report 7 June CMD 2018 Helsinki 24 July Half-year Report October Q Interim Report Full-Year Result

20 Q&A Full-Year Result

21 Appendix

22 Group and Media BeNe figures include Continuing operations only and are adjusted for the SBS divestment. Sanoma in 2017 Learning Media Finland Media BeNe Net sales EUR 1,327 million EUR 320 million EUR 571 million EUR 437 million Non-print sales 45% (EUR 525 million) 45% (EUR 144 million) 44% (EUR 251 million) 30% (EUR 129 million) Operational EBIT margin 13.6% Around 18% Around 12% Around 16% Net sales 2017 (EUR million) Net sales 2017 (EUR million) Net sales 2017 (EUR million) Poland Netherlands Finland Belgium Sweden Newspaper TV&radio Online & mobile Magazines Other Magazines Online & mobile Other Distribution Full-Year Result

23 Reported income statement Continuing operations, not adjusted for the SBS divestment EUR million 10 12/ / / /2016 Net sales , ,554.4 Operational EBITDA Operational EBIT Items affecting comparability Operating profit Total financial items Result before taxes Income taxes Result for the period from continuing operations Result attributable to: Equity holders of the parent company Non-controlling interests Earnings per share, continuing operations Operational EPS, continuing operations Full-Year 2017 Result

24 Key indicators EUR million 10 12/ /2016 Change, % 1 12/ /2016 Change, % Net sales , , EBITDA Operational EBIT % of net sales Operating profit Result for the period from continuing operations Cash flow from operations * Capital expenditure ** % of net sales Number of employees at the end of the period (FTE) 4,425 4, Average number of employees (FTE) 4,562 4, Earnings/share, EUR, continuing operations Operational earnings/share, EUR, continuing operations Cash flow from operations/share, EUR * Full-Year 2017 Result * Includes both continued and discontinued operations ** Including finance leases

25 Media BeNe quarterly key figures adjusted for the SBS divestment EUR million Q4/17 Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 FY/17 FY/16 Net sales Non-print Print Other Operational EBITDA Operational EBIT % of net sales Number of employees (FTE)* 1,083 1,110 1,135 1,185 1,199 1,194 1,187 1,234 1,083 1, Full-Year 2017 Result

26 Media Finland quarterly key figures EUR million Q4/17 Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 FY/17 FY/16 Net sales Non-print Print Operational EBITDA Operational EBIT % of net sales Number of employees (FTE)* 1,703 1,691 1,853 1,718 1,718 1,749 1,907 1,794 1,703 1, Full-Year 2017 Result

27 Learning quarterly key figures EUR million Q4/17 Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 FY/17 FY/16 Net sales Netherlands Poland Finland Belgium Sweden Other and eliminations Operational EBITDA Operational EBIT % of Net sales Number of employees (FTE)* 1,358 1,379 1,397 1,448 1,439 1,426 1,431 1,364 1,358 1, Full-Year 2017 Result

28 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Consumer confidence Netherlands Finland 28 Full-Year 2017 Result

29 Largest shareholders 31 December 2017 Number of shares % 1. Jane and Aatos Erkko Foundation 39,820, Antti Herlin (Holding Manutas Oy: 11.62%, personal: 0.02%) 19,036, Robin Langenskiöld 12,273, Rafaela Seppälä 10,273, Helsingin Sanomat Foundation 5,701, Ilmarinen Mutual Pension Insurance Company 3,572, Foundation for Actors Old-Age Home 2,000, Alex Noyer 1,908, The State Pension Fund 1,860, Lorna Auboin 1,852, largest shareholders total 117,335, Foreign holding * 31,367, Other shareholders 14,862, Total number of shares 163,565, Total number of shareholders 20,393 Institutional investors: around 70% of shares Private investors: around 30% of shares 24.4 % 46.7 % 11.6 % 7.5 % 3.5 % 6.3 % Jane and Aatos Erkko Foundation Antti Herlin Robin Langenskiöld Rafaela Seppälä Helsingin Sanomat Foundation Others 29 Full-Year 2017 Result *Including nominee registered shareholders

30 Analyst Coverage Carnegie Investment Bank Matti Riikonen tel Carnegie.fi Danske Markets Equities Panu Laitinmäki tel Danskeequities.com Handelsbanken Capital Markets Rasmus Engberg tel Handelsbanken.com/ capitalmarkets Inderes Petri Aho tel Inderes.fi Nordea Sami Sarkamies tel Nordea.com/markets Pohjola Kimmo Stenvall tel Pohjola.fi SEB Enskilda Jutta Rahikainen tel Enskilda.fi 30 Full-Year 2017 Result

31 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 Sanoma. In some cases, such forward-looking statements can be identified by terminology such as expect, plan, anticipate, intend, believe, estimate, predict, potential, or continue, or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the forward-looking statements, possibly to a material degree. All forward-looking statements included herein are based on information presently available to Sanoma and, accordingly, Sanoma assumes no obligation to update any forward-looking statements, unless obligated to do so pursuant to an applicable law or regulation. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Sanoma or otherwise to engage in any investment activity. 31 Full-Year 2017 Result

32 Please contact our Investor Relations: Kaisa Uurasmaa, Head of IR & CSR M E kaisa.uurasmaa@sanoma.com ir@sanoma.com