Sanoma completes the acquisition of Iddink – Outlook for 2019 improved

Sanoma Corporation, Inside Information, 13 September 2019 at 13:20 EET

Sanoma completes the acquisition of Iddink – Outlook for 2019 improved

Sanoma has completed the acquisition of Iddink Group (“Iddink”), a leading Dutch educational platform and service provider. The acquisition was announced on 11 December 2018 and it was subject to customary closing conditions, including the approval of Dutch competition authorities, which was announced on 29 August 2019.

Outlook for 2019 improved

Sanoma improves its Outlook for 2019 on Operational EBIT margin excluding PPA due to consolidation of Iddink into the Group for Q4 2019 as well as continued solid business performance across SBUs.

New Outlook for 2019:

In 2019, Sanoma expects that the Group’s comparable net sales will be in line with 2018 and operational EBIT margin excluding PPA will be above 15% (2018: 15.7%).

The outlook is based on an assumption of the consumer confidence and advertising market development in Finland and in the Netherlands to be in line with 2018.

Previous Outlook (given on 6 February and repeated on 25 July):

In 2019, Sanoma expects that the Group’s comparable net sales will be in line with 2018 and operational EBIT margin excluding PPA will be around 15% (2018: 15.7%).

The outlook is based on an assumption of the consumer confidence and advertising market development in Finland and in the Netherlands to be in line with 2018. The outlook does not include any assumptions of the intended acquisition of Iddink (announced on 11 December 2018), which is expected to be closed by the end of Q3 2019.

About Iddink

Iddink’s integrated learning and school administration platforms provide its customers – pupils, parents, schools and teachers – with access, communication and learning tools. Iddink’s business is complementary to Sanoma’s Dutch subsidiary Malmberg, a leading educational publisher for primary, secondary and vocational education. The acquisition enables further development of integrated digital learning platforms for secondary and vocational education in the Netherlands. Iddink will remain a separate operational company within Sanoma Learning and continues to serve all educational publishers and content providers in its markets on fair, reasonable and non-discriminatory terms.

Iddink’s key quarterly income statement figures (preliminarily adjusted for IFRS, unaudited)

EUR million Q2 19 Q1 19   Q4 18 Q3 18 Q2 18 Q1 18   FY 18
Net sales 20.6 18.9 23.8 82.5 18.8 16.6 141.7
  Incl. Group internal sales 7.9 0.2 0.3 4.9 11.6 0.1 16.9
EBITDA 9.0 8.1 6.8 16.9 7.6 8.4 39.7
  Depreciation and amortisation * 7.9 7.9 7.5 7.3 7.4 7.3 29.4
Reported EBIT 1.1 0.2 -0.7 9.6 0.3 1.1 10.3
  Items affecting comparability (IAC) 0.0 0.0 -0.4 -0.4 -1.3 -0.9 -3.0
  PPA amortisations -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 -6.8
Operational EBIT excl. PPA 2.8 1.9 1.4 11.7 3.3 3.7 20.1

* Incl. rental book depreciations of EUR 16.6 million in 2018.

The difference between Reported EBIT adjusted for IFRS of EUR 10 million in 2018 and earlier announced Reported EBIT according to Dutch GAAP of EUR 4 million is due to different goodwill accounting. IFRS does not allow goodwill amortization, while according to Dutch GAAP goodwill is annually amortised.

Iddink’s key balance sheet figures (preliminarily adjusted for IFRS, unaudited)

EUR million 30 Jun 2019 31 Dec 2018
Non-current assets (incl. rental books) 211.1 214.3
Current assets 26.4 25.6
Total assets 237.5 239.9
Total equity 83.7 85.4
Liabilities * 153.9 154.5
Total equity & liabilities 237.5 239.9

* Excluding IFRS 16 impact

Iddink employs approx. 300 people in total, about half of the employees working in technology.

Sanoma estimates that the acquisition will create annual synergies of approx. EUR 6 million that will be realised in full within 3 years. The synergies are expected to come from improved customer offerings and streamlined supply chain.

About the transaction

Cash and debt free purchase price of Iddink was EUR 277 million. Sanoma has financed the acquisition with a four-year term loan facility as announced on 4 February 2019. The acquisition is expected to temporarily increase Sanoma’s net debt / adj. EBITDA ratio above its long-term target level of <2.5.

Sanoma will book transaction related costs of approx. EUR 5 million as items affecting comparability (IAC) in Learning’s Q3 2019 result. Iddink will be reported as part of Sanoma Learning SBU as of 1 October 2019.


Additional information

Kaisa Uurasmaa, Head of Investor Relations and CSR, tel. +358 40 560 5601

Sanoma

Sanoma is a front running learning and media company impacting the lives of millions every day. We enable teachers to excel at developing the talents of every child, provide consumers with engaging content, and offer unique marketing solutions to business partners.

With operations in Finland, the Netherlands, Poland, Belgium and Sweden, our net sales totalled EUR 1.3 billion and we employed more than 4,400 professionals in 2018. Sanoma shares are listed on Nasdaq Helsinki. More information is available at www.sanoma.com.

 

13.09.2019