Sanoma’s treasury operations are managed centrally by the Group Treasury unit. Operating as a counterparty to the Group’s operational units, Group Treasury is responsible for managing external financing, liquidity and external hedging operations.
Centralised treasury operations aim to ensure financing on flexible and competitive terms, optimised liquidity management, cost-efficiency and efficient management of financial risks. Sanoma is exposed to interest rate, currency, liquidity and credit risks. Its risk management aims to hedge the Group against material risks. Sanoma Board of Directors has approved the unit’s guidelines in the Group Treasury Policy.
In the long-term, to ensure financial flexibility, Sanoma’s goal is to reach a capital structure where net debt/adj. EBITDA is below 3.0 and equity ratio is 35% – 45%.
Financial risks can be mitigated with various financial instruments and derivatives whose use, effects and fair values are clearly verifiable. The Group used currency forward contracts to hedge against foreign exchange risks during the year.
For more detailed information on financial risk management, please see note 25 on p. 85 of the Financial Statements 2020.