”We had a solid third quarter in both Learning and Media Finland, which – combined with our strong performance during the first half of the year – led to improved operational EBIT excl. PPA and strong free cash flow for January–September.

The third quarter is always the important high season in Learning, and this year it made the expected decrease in net sales driven by the planned discontinuation of low-value distribution contracts in the Netherlands and Belgium visible in our numbers. In the learning content business, the decline of net sales in Spain resulting from the lower curriculum cycle was in line with our expectations, and it was more than offset by growth in other learning content markets, in particular Poland and the Netherlands. In Italy, we saw a successful transition of users to the new Sanoma platform My digital book, with nearly half a million students and teachers already logging in. Our organic growth was largely driven by the continued above average price increases implemented across the learning content business. As the cost inflation in our operating markets has largely normalised, we also expect the price increases to mostly normalise going forward. We are satisfied with the earnings development in Learning and continue to expect a stable margin for the full year 2024 compared to 2023."

"The implementation of Program Solar has continued throughout the year according to our plans. We are continuing the postcurriculum renewal optimisation in Spain and the newly established Tech hubs have started to contribute significantly as well. Supported by our increased scale and Program Solar, we are on track to reach Learning’s long-term profitability (operational EBIT margin excl. PPA) target of 23% by 2026.

In Media Finland, the good development in both digital subscription and advertising sales continued. Growth in digital subscriptions was driven by the SVOD service Ruutu+, accelerated by new partnerships started in 2023. In advertising, we are happy to see the continued growth in digital offsetting the impact of the expected, longer term declining trend in print. Supported by lower paper and printing costs, the operational EBIT excl. PPA continued to improve slightly. We continue to expect the advertising market in Finland to decline slightly for the full year 2024.

Our free cash flow improved significantly. The stronger free cash flow was mainly attributable to lower investments in prepublication costs, partially resulting from Program Solar, and TV programme rights, active working capital management across the business and higher operational earnings in particular in Media Finland. The deleveraging of our balance sheet is progressing well. Our net debt and leverage improved year-on-year and Net debt / Adjusted EBITDA was well below the long-term target of < 3.0.

In September, we established our first Social Bond Framework and issued a EUR 150 million 3-year Social Bond, which became the first social bond issued by a corporate in Finland. The Social Bond Framework emphasises the unique positive impact our learning business has on society, offering investors the ability to support equal access to education by investing in Sanoma. Together with the extension of the maturity of the majority of our EUR 300 million Revolving Credit Facility by one year to November 2027, the Social Bond clearly extended the average maturity of our external debt portfolio and diversified our funding sources. During the third quarter, we also improved our scoring in two key ESG ratings, ISS Corporate Rating and S&P Global Corporate Sustainability Assessment, and both ratings are now among the leading levels in our industry.

Following our solid performance in January–September, we have narrowed the ranges in our Outlook for 2024 to the upper end of the original ranges. Beyond 2024, discontinuation of the low value distribution contracts in the Netherlands and Belgium will continue to have an adverse impact on Learning's net sales development. In Media Finland, we expect the solid growth in digital subscription sales to moderate somewhat, driven by continuing uncertainty among Finnish consumers and more demanding comparison figures, and the uncertainty in advertising demand to continue. Particularly attributable to Program Solar, we expect our free cash flow for 2024 to improve compared to the previous year, and the same trend to continue going forward.

During the first nine months of 2024, we have achieved solid progress in Learning and a profitability improvement in Media Finland, deleveraged our balance sheet, completed the refinancing of our long-term funding and generated a strong free cash flow. We continue to be fully focused on delivering on our strategic focus areas for 2024–2026, which are 1) increasing the profitability of Learning and Media Finland, 2) growing organically and through in-market acquisitions, and 3) deleveraging the balance sheet. I would like to extend my warmest thanks to all our teams for delivering the good results and supporting our customers in the best possible way.”

31 October 2024