Sanoma Corporation, Stock Exchange Release, 1 August 2013 at 8:30 CET+1
Second quarter
- Net sales amounted to EUR 591.2 million (2012: 646.5).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 9.3%.
- Operating profit excluding non-recurring items was EUR 68.0 million (2012: 103.8).
- Non-recurring items included in the operating profit amounted to EUR -31.0 million (2012: -5.7) mainly related to restructuring expenses as well as non-cash impairment charges of intangible assets.
- Earnings per share were EUR 0.13 (2012: 0.83).
- Earnings per share excluding non-recurring items were EUR 0.26 (2012: 0.39).
- Cash flow from operations was EUR 2.6 million (2012: 18.8).
- Outlook: In 2013, Sanoma expects that the Group’s consolidated net sales will decline more than 4% compared to 2012 and operating profit excluding non-recurring items is estimated to be below EUR 180 million.
First half
- Net sales amounted to EUR 1,096.4 million (2012: 1,190.1).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 8.3%.
- Operating profit excluding non-recurring items was EUR 65.0 million (2012: 119.4).
- Non-recurring items included in the operating profit amounted to EUR -68.3 million (2012: -5.7) mainly related to restructuring expenses as well as non-cash impairment charges of intangible assets and goodwill.
- Earnings per share were EUR -0.11 (2012: 0.72).
- Earnings per share excluding non-recurring items were EUR 0.23 (2012: 0.39).
- Cash flow from operations was EUR -60.2 million (2012: -3.1).
Key indicators*
| Restated | Restated | Restated | |||||
| 4-6/ | 4-6/ | Change | 1-6/ | 1-6/ | Change | 1-12/ | |
| EUR million | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net sales | 591.2 | 646.5 | -8.5 | 1,096.4 | 1,190.1 | -7.9 | 2,376.3 |
| Operating profit excluding non-recurring items | 68.0 | 103.8 | -34.6 | 65.0 | 119.4 | -45.6 | 231.0 |
| % of net sales | 11.5 | 16.1 | 5.9 | 10.0 | 9.7 | ||
| Operating profit | 36.9 | 98.1 | -62.4 | -3.2 | 113.7 | -102.9 | 181.0 |
| Result for the period from continuing operations | 23.0 | 58.8 | -60.9 | -28.8 | 40.8 | -170.7 | 69.9 |
| Result for the period**** | 23.0 | 137.3 | -83.3 | -28.8 | 120.5 | -123.9 | 149.0 |
| Capital expenditure** | 33.6 | 25.3 | 32.5 | 59.5 | |||
| % of net sales | 3.1 | 2.1 | 2.5 | ||||
| Return on equity (ROE), %***/**** | -0.0 | 5.9 | 9.7 | ||||
| Return on investment (ROI), %***/**** | 2.4 | 6.9 | 8.3 | ||||
| Equity ratio, %**** | 38.2 | 39.6 | 41.3 | ||||
| Net gearing, %**** | 98.2 | 95.0 | 78.7 | ||||
| Number of employees at the end of the period (FTE) | 10,130 | 10,799 | -6.2 | 10,381 | |||
| Average number of employees (FTE) | 10,276 | 11,020 | -6.7 | 10,804 | |||
| Earnings/share, EUR, continuing operations | 0.13 | 0.34 | -61.5 | -0.11 | 0.23 | -147.3 | 0.39 |
| Earnings/share, EUR**** | 0.13 | 0.83 | -84.0 | -0.11 | 0.72 | -115.0 | 0.88 |
| Cash flow from operations/share, EUR**** | 0.02 | 0.12 | -86.4 | -0.37 | -0.02 | 1.18 | |
| Equity/share, EUR**** | 7.05 | 7.74 | -8.9 | 7.82 |
* Comparable figures have been restated due to a change in IAS19 ‘Employee benefits’. The revised standard eliminates the possibility of using the corridor approach in recognising the actuarial gains and losses from defined benefit plans. The revised IAS 19 standard requires the actuarial gains and losses to be recognised immediately in the statement of other comprehensive income. For 2012, the restated total equity has decreased by EUR 52.0 million to EUR 1,576.6 million, and the restated operating profit excluding non-recurring items has decreased by EUR 1.3 million to EUR 231.0 million.
** Including finance leases.
*** Rolling 12-month period.
**** Includes continuing and discontinued operations.
Harri-Pekka Kaukonen, President and CEO
”Learning’s solid performance continued in the second quarter whereas structural changes accelerated in consumer media.
Advertising markets in Sanoma’s main operating countries continued to be depressed. The likelihood of clearly improving market conditions in the second half of the year is estimated to be low. In addition, circulation sales continue to be under pressure, impacting our sales and profitability.
The ongoing EUR 60 million gross savings programme is proceeding according to plan. The programme and additional actions executed are not able to compensate for the estimated decline in our consumer media net sales. Therefore we were forced to revise our outlook for 2013. The changed outlook also affects our free cash flow.
To counteract the structural changes, including underlying shift in consumer behaviour and advertising spend, we will continue to invest in transforming our core operations. In addition, we have commenced a redesign of our consumer media operations, including our product and service portfolios as well as cost structures. We will make strategic choices to enhance our focus. This redesign will change the financial profile of the Group and may affect asset valuations.”
Group outlook for 2013 (unchanged from the revised outlook published on 23 July 2013)
In 2013, Sanoma expects that the Group’s consolidated net sales will decline more than 4% compared to 2012 and operating profit excluding non-recurring items is estimated to be below EUR 180 million.
Sanoma’s outlook is based on the assumptions that the European economic environment remains under pressure and adversely impacts advertising markets in Sanoma’s main operating countries. The likelihood of clearly improving market conditions in the second half of the year is estimated to be low.
January–June 2013 Interim Report webcast
The event for investors and analysts will be held in English by President and CEO Harri-Pekka Kaukonen and CFO Kim Ignatius today at 11:00 Finnish time (9:00 UK time) at Nelonen studio, Sanomatalo, Töölönlahdenkatu 2, Helsinki. The webcast can be viewed on Sanoma’s website at www.sanoma.com/en/investors.
Please join by dialing
UK +44 (0)207 1620 177
Finland +358 (0)9 2313 9202
Netherlands +31 (0)20 7965 012
US +1 334 323 6203
Access code 933 431
Sanoma will publish its Interim Reports in 2013 on a quarterly basis
Interim Report January–September 2013 on 31 October, at approximately 8:30 CET+1
Additional information
Sanoma's Investor Relations, Martti Yrjö-Koskinen, tel. +358 40 684 4643 or ir@sanoma.com
Sanoma.com
Get the world. Sanoma helps people access and understand the world. Sanoma is a front runner in consumer media and learning in Europe. We employ around 10,000 professionals in more than 10 countries. In 2012, the Group’s net sales totalled EUR 2.4 billion. Sanoma’s share is listed on the NASDAQ OMX Helsinki.