Accounting policies

Sanoma prepares its consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS), adhering to related standards and interpretations effective at the year end.

Previously Sanoma reported according to the Finnish Accounting Standards (FAS). Some changes in the accounting policies required by the IFRS were already made in 2004 and the comparable figures for 2003 were adjusted accordingly. The IFRS transition date of the Group was 1 January 2004.

Accounting policies and definitions of Key indicators are available in Financial Statements for 2016

Alternative Performance Measures

New ESMA (European Securities and Markets Authority) guidelines on Alternative Performance Measures (APMs)* are effective for the financial year 2016. Accordingly, Sanoma is publishing the explanation of use, definitions as well as reconciliations of its APMs to the IFRS financial statements.

Sanoma presents APMs 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 the IFRS.

From Q1 2016, Sanoma has relabelled the previously referenced “excluding non-recurring items” non-IFRS financial measures with “Operational” performance measures. Operational performance measures exclude the income statement impacts of certain non-operational or non-cash valuation items affecting comparability.

The items affecting comparability and APMs used by Sanoma are defined below:

  • Items affecting comparability: Gains/losses on sale, restructuring expenses and impairments that exceed EUR 1 million.
  • Interest-bearing net debt: Interest-bearing liabilities – cash and cash equivalents.
  • Net sales growth adjusted for structural changes (organic growth): Net sales growth adjusted for the impact of acquisitions and divestments.
  • Operational EBIT: Operating profit – items affecting comparability
  • Operational EPS: (Result for the period attributable to the equity holders of the parent company – tax-adjusted interest on hybrid loan – items affecting comparability)/ Adjusted average number of shares in the market
  • Net debt/adj. EBITDA: The adjusted EBITDA used in this ratio is the 12-month rolling operational EBITDA, where acquired operations are included and divested operations excluded, and where programming rights and prepublication rights have been raised above EBITDA on cash flow basis.

On 19 July 2017 Sanoma completed the divestment of its 67% stake in the Dutch TV business SBS and obtaining 100% ownership of the TV guide business Veronica UItgeverij. SBS was included in Sanoma’s reported figures until 30.6.2017. Sanoma presents in its materials some comparable adjusted figures to illustrate the effect of the divestment on the Group. Comparable figures adjusted for the SBS transaction exclude fully the divested operations of SBS but include 100% of Veronica Uitgeverij. No other structural changes have been adjusted.

* Alternative performance measure (APM) = financial measure other than financial measure defined or specified in IFRS