Sanoma Corporation, Stock Exchange Release, 5 February 2015 at 8:30 CET+1
Fourth quarter
- Net sales amounted to EUR 452.5 million (2013: 517.5).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 4.7%.
- Operating profit excluding non-recurring items was EUR -5.6 million (2013: 12.3).
- Non-recurring items included in the operating profit amounted to EUR -103.5 million (2013: -35.0), mainly related to impairment of goodwill and intangible assets, realisation of FX loss (Russia) as well as restructuring expenses.
- Earnings per share were EUR -0.65 (2013: -0.20).
- Earnings per share excluding non-recurring items were EUR -0.05 (2013: 0.01).
- Cash flow from operations was EUR 50.2 million (2013: 73.8).
2014
- Net sales amounted to EUR 1,901.6 million (2013: 2,083.5).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 3.7%.
- Operating profit excluding non-recurring items was EUR 118.8 million (2013: 154.6).
- Non-recurring items included in the operating profit amounted to EUR 15.0 million (2013: -412.4), mainly related to capital gains, impairment of goodwill and other intangible assets, realisation of FX loss (Russia), restructuring expenses as well as a capital loss and a write-down related to the sale of Belgian TV operations.
- Earnings per share were EUR 0.32 (2013: -1.89).
- Earnings per share excluding non-recurring items were EUR 0.33 (2013: 0.44).
- Cash flow from operations was EUR 73.7 million (2013: 119.1).
- The Board of Directors proposes a dividend of EUR 0.20 per share (2013: 0.10).
Outlook
In 2015, Sanoma expects that the Group’s consolidated net sales growth adjusted for structural changes will be around the previous year’s development (2014: -3.7%). The operating profit margin excluding non-recurring items is estimated to be at or above the previous year’s level (2014: 6.2% of net sales).
Mid-term outlook (unchanged)
Based on the execution of the strategic redesign, Sanoma expects that from 2016 onwards, the Group’s consolidated net sales will return to organic growth. The operating profit margin excluding non-recurring items is targeted to be around 10% of net sales. Sanoma is targeting a net debt to EBITDA ratio below 3.5.
Key indicators* (based on reported figures, not adjusted for structural changes)
| Restated | Restated | |||||
| 10–12/ | 10–12/ | Change | 1–12/ | 1–12/ | Change | |
| EUR million | 2014 | 2013 | % | 2014 | 2013 | % |
| Net sales | 452.5 | 517.5 | -12.6 | 1,901.6 | 2,083.5 | -8.7 |
| Operating profit excluding non-recurring items | -5.6 | 12.3 | 118.8 | 154.6 | -23.2 | |
| % of net sales | -1.2 | 2.4 | 6.2 | 7.4 | ||
| Operating profit | -109.2 | -22.8 | 133.8 | -257.7 | ||
| Result for the period | -104.1 | -31.2 | 61.6 | -320.3 | ||
| Capital expenditure ** | 18.7 | 18.8 | -0.7 | 50.7 | 65.6 | -22.7 |
| % of net sales | 4.1 | 3.6 | 2.7 | 3.1 | ||
| Return on equity (ROE), % *** | 4.9 | -24.2 | ||||
| Return on investment (ROI), % *** | 6.5 | -9.2 | ||||
| Equity ratio, % | 42.2 | 37.2 | ||||
| Net gearing, % | 66.7 | 95.7 | ||||
| Number of employees at the end of the period (FTE) | 7,583 | 9,035 | -16.1 | |||
| Average number of employees (FTE) | 8,259 | 9,446 | -12.6 | |||
| Earnings/share, EUR | -0.65 | -0.20 | 0.32 | -1.89 | ||
| Cash flow from operations/share, EUR | 0.31 | 0.45 | -32.0 | 0.45 | 0.73 | -38.1 |
| Equity/share, EUR | 5.54 | 5.42 | 2.3 | |||
| Dividend/share, EUR **** | 0.20 | 0.10 | 100.0 | |||
| Dividend/result, % **** | 62.0 | neg. | ||||
| Market capitalisation | 748.9 | 1,039.6 | -28.0 | |||
* Comparable figures have been restated due to the new IFRS11 Joint Arrangements.
** Including finance leases.
*** Rolling 12-month period.
**** Dividend for 2014 is a proposal by the Board of Directors
Harri-Pekka Kaukonen, President and CEO
“The year 2014 ended according to our expectations and in line with the outlook we provided a year ago. As anticipated, the organic growth was somewhat negative. New media sales grew by around 6% and we are very pleased with the fact that already 42% of our consumer media sales in the Netherlands and Finland have been generated from new media products and services.
Our largest strategic business unit, Media Netherlands, went through major magazine portfolio pruning, which was successfully completed. We are now better able to focus on strong brands and key domains. Our domain approach is starting to deliver clear results, for example around the home deco brand vtwonen. We will continue to develop the strategy further. The SBS TV operations improved its viewing share in all but one month, excluding the major sports events that were shown on public channels. In addition, SBS won Champions League football rights for 2015-2018. These give us confidence that SBS is on the right track. During 2015, we will integrate our Belgian business into the Dutch operations. This combination will create the most strategic and financial value in both markets, enhancing the overall strategic position of Sanoma.
Our Finnish consumer media operations improved its underlying performance during the year despite heavy headwinds due to the weak economy and slow advertising market. Double-digit growth in online and mobile sales was one of the highlights of the year. TV and radio businesses developed particularly well. However, the profitability level of Finnish consumer media business is still too low. We are continuing to improve its profitability by increasing operative efficiency especially as 2015 looks unpredictable for the Finnish economy and advertising market.
The learning business continued its success including organic growth. Successful new digital tools and services are behind the improved performance. Digital and service sales grew by 15% in 2014. Market conditions in all operating countries except Poland remained stable. In Poland, new legislation is expected to have a material negative impact on the educational textbook market in the coming years. We estimate that the negative impact will be partly compensated for by new products and services as well as cost savings across the segment.
The Group-wide cost savings programme is ahead of schedule. The annual run-rate is already close to the promised EUR 100 million mark, almost a year in advance. In addition, our balance sheet has strengthened significantly compared to the previous year. All in all, we are on our way to improving the growth profile and financial performance of the company.”
Full-Year Result 2014 webcast
The event for analysts and investors will be held today in English by President and CEO Harri-Pekka Kaukonen and CFO Kim Ignatius at 11:00 Finnish time (9:00 UK time) at Sanomatalo, Töölönlahdenkatu 2, Helsinki. The live webcast can be viewed on Sanoma’s website at www.sanoma.com/en/investors and on demand after the event.
Please join by dialing
Finland: +358 (0)9 2313 9201 / US: +1 334 323 6201 / UK: +44 (0)207 1620 077 / Netherlands: +31 (0)20 7965 008
Conference id: 950 766
Financial reporting 2015
- Interim Report January-March on 29 April 2015, approx. at 8:30
- Interim Report January-June on 23 July 2015, approx. at 8:30
- Interim Report January-September on 29 October 2015, approx. at 8:30.
Additional information
Sanoma's Investor Relations, Olli Turunen, tel. +358 40 552 8907
Sanoma.com
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Sanoma is a front running consumer media and learning company in Europe. In Finland and the Netherlands we are the market leading media company with a broad presence across multiple platforms. Our main markets in learning are Belgium, Finland, the Netherlands, Poland and Sweden. In 2014, Sanoma’s net sales totalled EUR 1.9 billion. Sanoma is listed on the Nasdaq Helsinki stock exchange.