Sanoma Corporation, Stock Exchange Release, 27 July 2016 at 8:30 CET+1
Second quarter
- Net sales amounted to EUR 449.8 million (2015: 468.8).
- Adjusted for changes in the Group structure, Sanoma’s net sales increased by 1.7%.
- Operational EBIT was EUR 86.9 million (2015: 49.4).
- Items affecting comparability included in the operating profit amounted to EUR 54.8 million (2015: -40.3), mainly related to the settlement of changing defined benefit pension plans in the Netherlands to a defined contribution plan. In the previous year, items affecting comparability consisted mainly of a write-down on Belgian magazine titles and restructuring expenses.
- Operating profit was EUR 141.7 million (2015: 9.2).
- Earnings per share were EUR 0.57 (2015: -0.12).
- Operational earnings per share were EUR 0.33 (2015: 0.13).
- Cash flow from operations was EUR 9.2 million (2015: -40.6).
First half
- Net sales amounted to EUR 802.9 million (2015: 848.9).
- Adjusted for changes in the Group structure, Sanoma’s net sales increased by 1.0%.
- Operational EBIT was EUR 88.8 million (2015: 29.6).
- Items affecting comparability included in the operating profit amounted to EUR 56.0 million (2015: -31.4), mainly related to the settlement of changing defined benefit pension plans in the Netherlands to a defined contribution plan. In the previous year, items affecting comparability consisted mainly of sales gains and losses, restructuring expenses and a write-down on Belgian magazine titles.
- Operating profit was EUR 144.7 million (2015: -1.8).
- Earnings per share were EUR 0.57 (2015: -0.18).
- Operational earnings per share were EUR 0.29 (2015: -0.02).
- Cash flow from operations was EUR -46.9 million (2015: -113.7).
Outlook (unchanged from the revised outlook published on 14 July 2016)
In 2016, Sanoma expects that the Group’s consolidated net sales development adjusted for structural changes will improve from last year (2015: -3.4%). The operational EBIT margin is estimated to be around 9%.
Key indicators (based on reported figures, not adjusted for structural changes)
| EUR million | 4-6/ 2016 | 4-6/ 2015 | Change % | 1-6/ 2016 | 1-6/ 2015 | Change % | 1-12/ 2015 |
| Net sales | 449.8 | 468.8 | -4.1 | 802.9 | 848.9 | -5.4 | 1,716.6 |
| Operational EBIT | 86.9 | 49.4 | 75.8 | 88.8 | 29.6 | 200.0 | 83.2 |
| % of net sales | 19.3 | 10.5 | 11.1 | 3.5 | 4.8 | ||
| Operating profit | 141.7 | 9.2 | 144.7 | -1.8 | -123.6 | ||
| Result for the period | 97.3 | -14.9 | 97.9 | -23.2 | -158.0 | ||
| Cash flow from operations | 9.2 | -40.6 | -46.9 | -113.7 | 25.2 | ||
| Capital expenditure * | 9.6 | 18.3 | -47.3 | 15.3 | 30.3 | -49.4 | 54.7 |
| % of net sales | 2.1 | 3.9 | 1.9 | 3.6 | 3.2 | ||
| Return on equity (ROE), % ** | -3.4 | -5.8 | -13.6 | ||||
| Return on investment (ROI), % ** | 1.2 | -0.4 | -5.3 | ||||
| Equity ratio, % | 41.7 | 41.9 | 39.5 | ||||
| Net gearing, % | 79.3 | 78.1 | 77.8 | ||||
| Number of employees at the end of the period (FTE) | 5,467 | 7,005 | -22.0 | 6,116 | |||
| Average number of employees (FTE) | 5,491 | 7,021 | -21.8 | 6,776 | |||
| Earnings/share, EUR | 0.57 | -0.12 | 0.57 | -0.18 | -0.91 | ||
| Cash flow from operations/share, EUR | 0.06 | -0.25 | -0.29 | -0.70 | 0.16 | ||
| Equity/share, EUR | 4.87 | 5.45 | -10.6 | 4.59 | |||
* Including finance leases.
** Rolling 12-month period.
Sanoma presents certain financial performance measures (alternative performance measures or APMs) on a non-IFRS basis. The APMs are provided to reflect the underlying business performance and to enhance comparability from period to period. APMs should not be considered as a substitute for measures of performance in accordance with IFRS.
From Q1 2016, Sanoma has relabelled the previously referenced "excluding non-recurring items" non-IFRS financial measures as "Operational" performance measures. Operational performance measures exclude the income statement impacts of certain non-operational or non-cash valuation items affecting comparability. There is more information about Alternative Performance Measures on page 8.
Organic growth, %
| 4-6/2016 vs. 4-6/2015 | 1–6/2016 vs. 1–6/2015 | 1–12/2015 vs. 1–12/2014 | ||
| Media BeNe | +2.6 | +3.0 | -1.4 | |
| Media Finland | +2.2 | +0.7 | -4.1 | |
| Learning | -0.9 | -4.2 | -4.0 | |
| Group | +1.7 | +1.0 | -3.4 |
Susan Duinhoven, President and CEO
“Sanoma continued its good development during the second quarter. Organic net sales grew by 1.7% - a very satisfactory achievement under still challenging market conditions. Supported both by increased advertising sales in Media Finland and tight cost control, our operational performance improved strongly during the quarter.
Media Finland was the biggest single positive factor behind the improved profitability. Both consumer and advertising sales increased compared to last year. TV & Radio operations continued their excellent performance. Both also won market share during the second quarter. The viewing share of TV channels improved in the second quarter to 36.6% from 31.1% and radio sales grew by 30%.
Besides the good sales development, profitability at Media Finland was also supported by operational improvements and cost savings. The planning for the turn-around initiatives Suunta for Media Finland is now completed and various activities will now commence, each with their own timelines. In preparation, the organisational structure has already changed in the second quarter.
The operational performance development of Media BeNe in the second quarter was also good. Organic net sales grew by 2.6% and profitability improved. Especially the print & online brand portfolio continued on a positive path. Like-for-like net sales and the profitability improved strongly. The Dutch free-to-air television real time viewing time trend developed negatively in Q2. In June the European soccer championship, shown on public broadcasting channels, also had the expected negative impact on SBS viewing shares.
Sanoma Learning continued its steady development. Sales in the second quarter declined slightly, mainly due to the legislation driven market change in Poland. Profitability improved versus last year, partially due to the change in the amortisation schedule and some shifts between the quarters. Sanoma Learning successfully acquired the Belgian company De Boeck and this will be included in Sanoma’s income statement from 1 July onwards. This transaction reinforces our existing market leadership in the Belgian market and will create attractive integrational synergies going forward.
Based on the strongly improved results in the first half of the year and assuming continuation of market trends in the second half of the year, we improved our outlook for the year 2016. We will of course remain exposed to continued volatility in the general economy and the advertising markets, but with the dedication of our teams in all our businesses we are confident that we can continue our improvement for the remainder of the year 2016.”
January–June 2016 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 27 July 2016 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 2310 1619 / US: +1 646 254 3376 / UK: +44 (0)20 3427 1935 / Netherlands: +31 (0)20 716 8251
Conference id: 4878127
Financial reporting 2016
- Interim Report January–September on 28 October 2016, approx. at 8:30.
Additional information
Sanoma's Investor Relations, Pekka Rouhiainen, tel. +358 40 7395897
About Sanoma
Sanoma is an inspiring, relevant and trusted consumer media and learning company. Ever since its formation in 1889, the company has held creativity and independent thinking at its core in order to deliver high-quality content in new and different ways.
Sanoma’s consumer media business provides consumers with engaging and personalised content through cross-media brands that touch their lives. Sanoma’s close relationships with its consumers enable the company to offer unique value-added marketing solutions to its business partners.
Sanoma Learning’s learning solutions enable teachers to excel at developing the talents of every child, creating opportunities for children to advance their prospects in life.
With operating companies in Finland, the Netherlands, Belgium, Poland and Sweden, Sanoma realised net sales of more than EUR 1.7 billion in 2015. The company employed over 6,000 employees.