Sanoma Corporation, Stock Exchange Release, 29 October 2015 at 8:30 CET+1
Third quarter
- Net sales amounted to EUR 458.8 million (2014: 477.8).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 0.4%.
- Operating profit excluding non-recurring items was EUR 62.5 million (2014: 62.1).
- Non-recurring items included in the operating profit amounted to EUR -52.5 million (2014: 15.5), mainly related to impairments as well as restructuring expenses. In the previous year, non-recurring items consisted mainly of sales gains and restructuring expenses.
- Earnings per share were EUR -0.04 (2014: 0.34).
- Earnings per share excluding non-recurring items were EUR 0.24 (2014: 0.24).
- Cash flow from operations was EUR 71.0 million (2014: 89.9).
First nine months
- Net sales amounted to EUR 1,307.8 million (2014: 1,449.1).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 3.7%.
- Operating profit excluding non-recurring items was EUR 92.1 million (2014: 124.4).
- Non-recurring items included in the operating profit amounted to EUR -83.9 million (2014: 118.5), mainly related to impairments, sales gains and losses as well as restructuring expenses. In the previous year, non-recurring items consisted mainly of sales gains, restructuring expenses as well as a capital loss and write-down related to the sale of Belgian TV operations.
- Earnings per share were EUR -0.22 (2014: 0.97).
- Earnings per share excluding non-recurring items were EUR 0.22 (2014: 0.38).
- Cash flow from operations was EUR -42.6 million (2014: 23.6).
Additional information regarding the fourth quarter of 2015
As part of its ongoing review of TV rights, Sanoma has done an initial valuation for programme rights in the Netherlands. Changes in the competitive landscape and consumer habits will lead to a devaluation especially of international fiction. As a result, the valuation will most likely lead to an additional amortisation of around EUR 14-18 million in the fourth quarter of 2015. This does not change the Group’s outlook for 2015.
Outlook (unchanged)
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 above 4% of net sales (2014: 6.2% of net sales).
Key indicators (based on reported figures, not adjusted for structural changes)
| 7–9/ | 7–9/ | Change | 1–9/ | 1–9/ | Change | 1–12/ | |
| EUR million | 2015 | 2014 | % | 2015 | 2014 | % | 2014 |
| Net sales | 458.8 | 477.8 | -4.0 | 1,307.8 | 1,449.1 | -9.8 | 1,901.6 |
| Operating profit excluding non-recurring items | 62.5 | 62.1 | 0.6 | 92.1 | 124.4 | -26.0 | 118.8 |
| % of net sales | 13.6 | 13.0 | 7.0 | 8.6 | 6.2 | ||
| Operating profit | 10.1 | 77.6 | -87.0 | 8.2 | 242.9 | -96.6 | 133.8 |
| Result for the period | -3.1 | 57.0 | -26.3 | 165.7 | 61.6 | ||
| Capital expenditure * | 12.9 | 9.1 | 42.3 | 43.2 | 32.0 | 34.9 | 50.7 |
| % of net sales | 2.8 | 1.9 | 3.3 | 2.2 | 2.7 | ||
| Return on equity (ROE), % ** | -11.0 | 11.0 | 4.9 | ||||
| Return on investment (ROI), % ** | -4.0 | 9.7 | 6.5 | ||||
| Equity ratio, % | 41.2 | 41.9 | 42.2 | ||||
| Net gearing, % | 73.5 | 65.4 | 66.7 | ||||
| Number of employees at the end of the period (FTE) | 6,650 | 7,731 | -14.0 | 7,583 | |||
| Average number of employees (FTE) | 6,935 | 8,452 | -17.9 | 8,259 | |||
| Earnings/share, EUR | -0.04 | 0.34 | -0.22 | 0.97 | 0.32 | ||
| Cash flow from operations/share, EUR | 0.44 | 0.55 | -21.0 | -0.26 | 0.14 | 0.45 | |
| Equity/share, EUR | 5.24 | 5.92 | -11.5 | 5.54 | |||
* Including finance leases.
** Rolling 12-month period.
Organic growth, %
| 7–9/2015 vs. 7–9/2014 | 1–9/2015 vs. 1–9/2014 | 1–12/2014 vs. 1–12/2013 | ||
| Media BeNe | -0.3 | -2.6 | -2.7 | |
| Media Finland | -5.0 | -4.5 | -5.3 | |
| Learning | 6.4 | -1.5 | 1.0 | |
| Other | -22.2 | -28.7 | -14.2 | |
| Group | -0.4 | -3.7 | -3.7 |
Susan Duinhoven, President and CEO
“Since joining Sanoma as President and CEO at the beginning of October 2015, I’ve been impressed by the strength of Sanoma’s local brands and their superior reach, the great content that consumers engage with and the talented people in the organisation.
The Dutch and Belgian (BeNe) media business is realising the benefits of its strategy of positioning cross-media domains, experiencing growth in Q3 when sales are normalised for the current portfolio. Positive developments can be seen in Home Deco and certain pockets of the Women domain, such as LINDA. SBS had a solid quarter with improvements in the total viewing share. The clear choices made in portfolio management, as well as a consistent focus on execution and cost control is paying off in the BeNe media business.
In Media Finland, the growth of online and mobile advertising and digital subscriptions, as well as the stable circulation sales of Helsingin Sanomat, gives our team a solid foundation to improve financial performance
The co-operation negotiations concerning Media Finland and Group-wide support functions, which were instigated as part of the EUR 50 million cost savings initiative launched in August 2015, were completed last week. We are on track to implement the majority of these savings by the end of this year, with most of the benefits realised in 2016. Cost innovation will be a continuing focus area for the whole of Sanoma also in the coming years.
Learning is on track to deliver its full year targets, although challenges in the Polish business are continuing, due to changes in the regulatory environment. Successful counteractive measures are being implemented to combat these challenges. The digital transformation in Learning is progressing well with the popular e-learning platform Bingel now available in Finland too.”
January–September 2015 Interim Report webcast
The event for analysts, investors and media will be held in English by President and CEO Susan Duinhoven and CFO Kim Ignatius on 29 October 2015 at 11:00 Finnish time (9:00 am 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 dialling
Finland: +358 (0)969379590 / US: +1 6462543360 / UK: +44 (0)2034271900 / Netherlands: +31 (0)20 7168296
Conference id: 9560410
Financial reporting 2016
Sanoma will publish its Full-Year Result for 2015 on 9 February 2016 at approx. 8:30 am Finnish time.
Interim Reports in 2016 will be published on quarterly basis:
- Interim Report January–March on 29 April 2016, at approx. 8:30
- Interim Report January–June on 27 July 2016, at approx. 8:30
- Interim Report January–September on 28 October 2016, at approx. 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.