The most significant strategic, operational and non-financial risks risks that could have a negative impact on Sanoma’s business, performance or financial status are described below. Under the different categories, the most material risks are presented first. Financial risks are described in more detail here. In addition to the risks presented here, currently unknown or immaterial risks may arise or become material in the future. Significant near-term risks and uncertainties are reported on a continuous basis in each Interim Report.

Sanoma’s Enterprise Risk Management Policy defines the group-wide risk management principles, objectives, roles, responsibilities and procedures also covering sustainability and climate-related risks. The President and CEO, supported by the Executive Management Team, is responsible for defining risk management strategies, procedures and setting risk management priorities. SBUs are responsible for identifying, measuring, reporting, and managing risks. The updated risk assessment results, with related ongoing or planned mitigation actions, are reported to the Audit Committee and, further, to the Board of Directors, twice a year. Risk management and internal control policies, processes, roles and responsibilities are presented in more detail in the Corporate Governance
Statement 2022 and in the Sustainability section.

Strategic risks

Mergers and acquisitions (M&A)

Sanoma’s strategic aim is to grow through acquisitions primarily in Learning, but to a lesser extent also in Media Finland. In Learning, Sanoma is looking for growth opportunities in K12 learning services in new geographies and to expand its offering in the current twelve operating
countries. In Media Finland, Sanoma is interested in synergistic acquisitions in the chosen strategic focus areas of news and feature, entertainment or B2B marketing solutions. However, Sanoma may not be able to identify suitable M&A opportunities or suitable targets may not be available at the right valuation. Even if suitable M&A opportunities were identified and feasible, there are several risks related to M&A transactions. M&A risks may relate to unidentified liabilities of the target companies or their assets, changes in the market conditions, the inability to ensure the right valuation and effective integration of acquisitions or that the anticipated economies of scale or synergies do not materialise. Future M&A transactions may also be financed with debt, increasing Sanoma’s
overall indebtedness, which may, in turn, adversely affect the availability, costs or other terms of future financing. Regulation of M&A activity by competition authorities may, among other things, also restrict or delay the Group’s ability to engage in M&A transactions.

In 2022, the Group announced several transactions, including the acquisition of Pearson’s local K12 learning content business in Italy and its small exam preparation business in Germany. The Pearson Italy and Germany acquisition was completed on 31 August 2022, and the acquisition is estimated to create synergies of EUR 2–3 million to be realised in full 18–24 months after closing. The success of the recent and above-mentioned acquisitions largely depends on the timely and efficient integration of the business operations, processes and ways of working.
The process of integrating the acquired businesses into Sanoma’s existing businesses involves uncertainties, and there can be no assurance that Sanoma will be able to integrate the businesses in the manner or within the timeframe anticipated and achieve the anticipated benefits of the acquisitions.

To focus its business on areas where it has clear competitive advantages and leading market positions, the Group has divested its non-core businesses in recent years. For example, the Group completed the divestment in Eduarte, a student administration system provider for vocational education in the Netherlands in October 2022. In January 2022, the Group also divested one of its three newspaper printing facilities, Savon Paino, located in Varkaus, Finland. Sanoma may divest additional businesses in order to further focus its operations, or for other reasons. Any future divestments may be affected by many factors, such as the availability of bank financing to potential buyers, interest rates and competitors’ capacity, all of which are beyond the Group’s control, and may also lead to exposure to indemnity claims. There can be no assurance that the Group will succeed profitably in the divestment of certain assets or that such divestments will be possible on acceptable terms, or at all. Such divestments may also require attention from the Group’s management, taking its attention away from the management of ongoing business.

Sanoma is actively mitigating these risks by actively maintaining its industrial networks, proactively seeking potential targets, working with well-known parties in transaction processes and following its internal policies and procedures in the decision-making, organisation and follow-up concerning M&A transactions. Despite this, there can be no assurance that the acquisitions will be successful and that Sanoma will achieve its strategic aim of acquisition-based growth.

Changes in customer preferences, technology and industry trends

In learning, digital and hybrid (print and digital) learning materials, methods and platforms have gradually been gaining ground. The coronavirus pandemic has further amplified the growing need for remote learning tools and digital learning materials. In the learning material distribution services, this shift is being paralleled by a move from renting and selling books towards subscriptionbased commercial models. Both trends and/or their acceleration or slow-down may have an effect on the operational performance, financial performance and/or financial position of Learning. In addition, Learning is, by nature, subject to seasonal fluctuation, with most of the sales and earnings accrued during the second and third quarters when the new school year starts, which further increases the pressure to be able to respond to changes in a timely manner.

With the continued development of alternative forms of media, particularly digital media, the Group’s media businesses and the strength of its media brands depend on its continued ability to identify and respond to constantly shifting consumer preferences and industry trends, as well as its ability to develop new and appealing products and services in a timely manner. Ongoing digitalisation is currently the driving force behind many of these changes, and the increasing use of mobile devices is changing the way people consume media, with viewing time of free-to air television decreasing and online video consumption increasing. The demographic structure in Finland may have a further impact on these trends. The demand for advertising derived from printed media has also been in decline in recent years as advertisers shift to digital channels. However, even the digital advertising ecosystem is changing. For example, the deprecation of third-party cookies may result in changes in business models related to the sales of digital advertising.

To mitigate these risks, Sanoma is continuously developing digital and hybrid learning and media products and services. In addition, Sanoma maintains close and long-term relationships with schools, teachers and governing bodies and typically sells digital solutions and printed materials together. The wide cross-media offering provides Sanoma with a solid foundation to constantly develop its offering to advertisers and to introduce new services, such as crossmedia solutions, native or branded and premium content. However, there can be no assurance that Sanoma will be able to adjust to and meet the changes in consumer preferences, industry trends and technological developments in the future. Failure to respond to market changes by developing and/or adopting new products and services, through both established and new platforms on a competitive and profitable basis may result in the Group losing market share in its established businesses to competitors.

Competitive environment and threat of new entrants

The learning and media markets in which the Group operates are highly competitive and include many regional, national and international companies. In media, competition is affected by the level of consolidation within the Group’s markets as well as by the development of alternative distribution channels for the products and services offered by the Group. Competition may arise from large international media and telecom companies entering new geographic markets or expanding the distribution of their products and services to new distribution channels, which may have a significant effect on competition as these companies enjoy high brand awareness and often have greater financial and other resources to penetrate new markets and gain market share. In addition, new entrants in the market may be able to take advantage of alternative forms of media and new technologies faster than the Group and, therefore, gain market share from Sanoma’s established businesses. In Learning, there is a similar risk stemming from large international media companies, digital entrants, educational technology companies, open educational resources and user-generated content or digital tools. Furthermore, Sanoma is exposed to competition also from traditional publishers in different countries.

To mitigate these risks, the Group’s ability to compete effectively will require continuous efforts by the Group in, among other things, sales and marketing, cost innovation and investment in technology to respond to changes in the markets. Although the Group currently holds strong positions in its key markets, there can be no assurance that it will be able to maintain these positions or that these positions will enable the Group to compete effectively in the future.

Changes in applicable laws, regulations or political environment

The Group’s operations are subject to various laws and regulations in the countries in which the Group operates and changes in such laws and regulations could have a material effect on Sanoma’s ability to conduct its business effectively. For example, changes in education-related regulation could have a material effect on Sanoma’s commercial propositions, technology or content investment needs, or financial performance. Although legislation related to learning is typically country specific, which limits the magnitude of said risk at the Group level, Sanoma faces an increased legislative risk in Poland and Spain, which both are large markets and where broad or abrupt education-related legislative changes could have a material effect on Learning. The introduction or delay, pace, scope and timing of changes in education-related legislation, or their reflections in public educational spending, in the markets in which Sanoma operates – most notably in Poland or Spain, but potentially also other markets – may also influence the performance of Learning as a whole. In media, any adverse developments affecting
the freedom of the press or source protection could have an adverse effect on the performance of Media Finland.

Changes in taxation as well as in the interpretation of tax laws and practices may have an effect on the operations of the Group or on its financial performance (e.g. value-added tax (“VAT”) applicable to Sanoma’s printed, digital and hybrid products).

Tightening of consumer protection-related laws may necessitate the amendment of some consumer media sales business models, such as telesales, imposing additional costs on Sanoma and having an adverse effect on profitability. For example, the Finnish national law implementing the Omnibus Directive (EU) 2019/2161 became applicable as of 1 January 2023. Furthermore, the deterioration of publishers’ and broadcasters’ copyright protection or increase in legal obligations (such as reporting or monetary obligations) towards original authors of copyright protected works affects the Group’s ability to provide its customers with new products and services and may increase costs or impact the valuation of balance sheet items related to acquiring and managing copyrights. Data is an increasingly essential part of Sanoma’s business, putting privacy and consumer trust at the core of the Group’s daily operations. Regulatory changes and new guidance by authorities or regulatory enforcement actions regarding the use of consumer or cookie data for commercial purposes could, therefore, have an adverse effect on Sanoma’s ability to utilise data in its business. For example, the proposed regulation of the European Parliament and of the Council concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC (Regulation on Privacy and Electronic Communication) may require consent for telesales for subscriptions and may also have a negative impact on cookie-related usage and thus demand for digital advertising. This would have an effect on business to consumer media sales and business to business advertising both in news and video-on-demand (VOD) businesses.

The Group may also be faced with the risk of overregulation on the European or national levels, or different, potentially tighter national interpretations of the EU-level regulation in its operating countries. In particular, this risk is seen to relate to sustainability, compliance, intellectual property rights, data protection, digital transformation, consumer protection and accessibility.

To mitigate these risks, Sanoma aims to anticipate any changes by closely monitoring the regulatory developments and adapting its business models accordingly. However, implementing changes to its business models in order to adapt to new regulations is likely to impose additional costs and may take time. Violations of any applicable laws or regulations could also result in penalties and fines.

General economic and market conditions

The general economic and political conditions in Sanoma’s operating countries and overall industry trends could influence Sanoma’s business activities and operational performance. In addition to the recently increasing global risks, including geopolitical unrest, the cost and supply of global commodities such as energy, and high inflation, general economic conditions may be affected by various additional events that are beyond Sanoma’s control, such as natural disasters and pandemics. For example, the COVID-19 pandemic has, in general caused a reduction in business activity and financial transactions, lockdowns, quarantines, labour shortages, supply chain interruptions, additional precautionary activities, additional costs and overall economic and financial market instability. Although Sanoma’s diversified and well-balanced business portfolio to a certain extent mitigates this type of risk, it may cause disruptions to Sanoma, its employees, markets, suppliers and customers, any of which could have a material adverse effect on Sanoma’s business, operating model, financial condition and/or results of operations.

In general, political risks associated with the performance of Learning relate to the development of public and private education spending especially during curriculum renewals. Sanoma faces political risks particularly in Poland and Spain, where changes in the political landscape could have a material effect on Learning, as described above. Moreover, changes in the overall economic environment can affect Learning’s cost base, particularly the cost and availability of paper and printing, as well as of personnel. Such changes could also affect demand in segments where it is the parents or students themselves, rather than the government or schools, who pay for learning materials such as by increasing the demand for second-hand books. Such segments constitute a minority of Learning’s business.

In Media Finland, risks associated with business and financial performance typically relate to advertising demand and consumer spending. A significant proportion of the Group’s sales is derived from advertising sales in magazines, newspapers, television, radio and digital (online and mobile) media as well as circulation sales of printed media. Both of these sources of income are sensitive to changes in the general economic environment and consumer confidence, with advertising sales being historically somewhat more sensitive to economic downturns than circulation sales, particularly in subscription sales. Moreover, changes in the overall economic environment can affect Media Finland’s cost base, particularly the cost and availability of paper and printing, as well as of personnel and distribution costs. In addition to increasing Media Finland’s direct operating costs, higher cost inflation may have an adverse indirect impact on the demand for its products and services.

Changes in the geopolitical situation in Finland, such as Russia’s attack and war in Ukraine and Finland’s application for a membership in the North Atlantic Treaty Organisation (NATO), could have an indirect impact on the business operations and financial performance of Sanoma’s businesses in Finland.

Sanoma’s diverse business portfolio and actions to manage the risks and costs related to prevailing and expected economic conditions, partially mitigate these risks. In 2022, approx. 52% (2021: 51%) of Sanoma’s net sales was derived from learning, approx. 22% (2021: 23%) from single copy or subscription sales, approx. 4% (2021: 5%) from print advertising, approx. 14% (2021: 15%) from non print advertising and approx. 7% (2021: 6%) from other sales.

Operational risks

Changes in the economic conditions

Changes in the general economic conditions may be reflected in Sanoma’s operational and financial performance. Cost inflation, especially salary inflation and continuing high paper prices, is expected to continue to have an impact on Sanoma’s operating costs. The availability of newsprint paper, the paper quality most used by Sanoma, has remained at its normal level since the second quarter of 2022, but could be negatively impacted by the availability and prices of energy, particularly gas in Central Europe. Weakening confidence among Finnish consumers, impacted by the war in Ukraine as well as increasing inflation and interest rates, may have an adverse impact on the demand for Media Finland’s products and services. In addition, the weakening of the euro against main currencies, including the U.S. dollar, may increase the cost of the goods and services Sanoma buys in currencies other than euro (e.g. hosting and TV content) and poses a risk to Sanoma’s financial performance, albeit part of the currency transaction risk is hedged with forward contracts. Sanoma has been able to partially mitigate these impacts on its financial performance through, for example, costs management actions; however higher operating expenses are expected to have an adverse impact on earnings also in 2023.

Data and privacy

Data is an increasingly essential part of Sanoma’s products and services in both Learning and Media Finland. The Group holds large volumes of personal data, including that of employees, customers and, in its assessment businesses, students and citizens. Sanoma is subject to the General Data Protection Regulation ((EU) 2016/679, “the GDPR”), which sets strict requirements for implementing data subject rights, and for companies to demonstrate their accountability for complying with the regulation. Non-compliance with the GDPR in Sanoma’s business and operations, or potential inadequacy of the data protection processes and practices may cause problems, difficulties or additional costs to Sanoma. Any infringement of the GDPR could adversely affect Sanoma’s reputation. Furthermore, under the GDPR, a national data protection authority is vested with the power to impose corrective actions, such as temporary or definitive bans on processing, and to impose administrative fines for breaches of the GDPR up to EUR 20 million or 4% of the total worldwide annual turnover of a company. The Directive on privacy and electronic communications 2002/58/EC also imposes requirements for online data collection and use. There have been various authority enforcement actions across the EU during 2021 regarding consent practices for the use of cookies and similar identifiers. While these, along with the expected ePrivacy Regulation, are benefiting the media and advertising industry in the long term by creating a level playing field for small media players, in the short term they could also have a negative impact on media through additional costs. Although Sanoma runs a privacy programme that monitors development and enforcement of privacy regulations, there can be no assurance that such measures will be successful in ensuring compliance with privacy laws, which could lead to penalties, significant remediation costs and reputational damage to Sanoma. In addition, Sanoma is exposed to potential data breaches resulting from unauthorised or accidental loss of or access to personal data managed by Sanoma or by third parties processing data on Sanoma’s behalf. For example, Sanoma’s or its third-party suppliers’ systems could be vulnerable to unauthorised access, misuse, breaches due to employee error or malfeasance, computer viruses, attacks by hackers or other similar threats. Data is key in the development of Sanoma’s products and services, as it enables content and learning services to be better tailored to the needs of customers, such as by providing individualised learning paths and even more compelling media content. Continuing the use of data in the future is dependent on maintaining the trust of customers, and potential data breaches could significantly undermine this trust.

To mitigate these risks, Sanoma’s key privacy implementation processes include conducting privacy impact assessments, data lifecycle management, negotiating data processing agreements with third parties, information security measures to protect data, data breach management procedures and the implementation of data subject rights. However, there can be no assurance that data breaches will not occur despite these efforts to prevent such breaches or, in the event that breaches occur, that Sanoma will be able to mitigate the effects of such a breach. This could lead to reputational damage which could ultimately lead to Sanoma’s inability to effectively compete for future business and to potential cancellations of existing contracts.

Information and communication technology (ICT)

Functioning and reliable information and communications technology systems are integral aspects of the Group’s learning and media business. The systems include online services, digital learning platforms, video-on demand platforms, newspaper and magazine subscriptions, advertising and delivery systems, as well as various internal systems for production control, customer relations management and supporting functions. Information and communications technology security risks may relate to confidentiality, integrity and/or the availability of information, as well as to reliability and compliance of data processing. The risks can be divided into physical risks, such as fire, sabotage and equipment breakdown and logical risks, such as information security risks, including increased threat of malware and cyber-attacks, hacking of personal data or other sensitive data assets, and employee or software failure. Additionally, the fragmentation of the data landscape and legacy systems or failure in meeting customer needs or local requirements when developing or harmonising the digital offering could cause a delay or hinder the Group’s digitalisation.

To mitigate these risks, Sanoma has continuity and disaster recovery plans in place for its critical systems and clear responsibilities regarding information and communications technology security. Information security controls include the use of threat intelligence capabilities, cyber security incident detection capabilities, identity and access management solutions, log management capabilities and the use of external information security audits. Sanoma’s insurance programme provides partial coverage for insurable information security risk. Although Sanoma has several information security control measures in place, there can be no assurances that such measures will be adequate to prevent failures of one or more of the Group’s essential information and communications technology systems, which could cause disruptions to its business and reputational damage resulting from possible data breaches.

Risks related to third parties

A wide network of third parties in a wide variety of countries plays an integral role in Sanoma’s daily operations. Third-party suppliers in Sanoma’s value chain include, among others, technology solution and service providers, paper, print and logistics suppliers as well as content providers for both Learning and Media Finland. Therefore, risks relating to the availability, price, quality, security and delivery schedules of third party suppliers are material for Sanoma’s operations. These include during recent years the increased use of external cloud-based services, the functioning of which is strongly dependent on the usability and accessibility of global internet connections. The expanding global supply chain risks that are a combination of, for example, geopolitics, the post-pandemic situation, the economic environment, high inflation and production factors may result in much tighter supply market conditions and availability concerns.

Sanoma utilises freelancers to support its own editorial staff in content creation. The status of freelancers and related copyright legislation development may vary by authority and country, but no individual case is estimated to become material unless it escalates to concern a large group of freelancers working for Sanoma. The development in the status of freelancers or the related regulation may, however, also increase the related costs.

In addition, certain advertising and marketing efforts are executed with the help of third parties. The advertising technology ecosystem consists of players, such as Google and Facebook, that have dominant market power, which may lead to an imbalance between their rights and liabilities in agreements entered into with Sanoma.

Sanoma’s daily business is dependent on its ability to identify sources of supply that meet Sanoma’s standards and identified business, technology and sustainability requirements, although Sanoma is not dependent on individual suppliers. To mitigate third-party related risks, Sanoma follows the guiding principles of supplier risk management set out in the Group’s Procurement Policy, Supplier Code of Conduct and legal framework, and the most significant suppliers are selected through competitive bidding and qualification processes. Suppliers and other third parties are subject to a Know Your Counterparty (KYC) process to identify any risks related to anti-bribery, sanctions regulations and other issues. With suppliers most relevant for Sanoma’s business continuity, Sanoma has set up steering practices and supplier engagement to jointly mitigate the identified risks, such as by increasing the paper inventory and agreeing on steps to avoid problems with newspaper delivery. If any of the key suppliers had to be replaced abruptly, it could cause temporary business interruptions and even increase costs.

Despite the processes and risk mitigation activities that Sanoma has in place, Sanoma may not be able to ensure that its suppliers or other third parties comply with all relevant regulations and its internal policies and standards, which could, for example, lead to legal processes and/or reputational damage. In addition, cooperation with third parties exposes Sanoma to certain data-related risks.

Intellectual Property Rights (IPRs)

The Group’s products and services largely consist of intellectual property delivered through a variety of media. Key intellectual property rights (“IPRs”) related to Sanoma’s products and services are copyrights including rights to make the copyright protected works available to the public, trademarks, business names, domains and know-how owned and licensed by the Group. In addition, the Group conducts business in certain countries where the extent of effective legal protection and enforcement of IPRs may differ and, therefore, cause uncertainty. Moreover, despite
 trademark and copyright protection, third parties may copy, commercially exploit, infringe on or otherwise profit from the Group’s proprietary rights without authorisation. These unauthorised activities may be more easily facilitated by the Internet. The scarcity of Internet specific legislation relating to trademark and copyright protection or enforcement of rights, as well as effective and concrete means to intervene with online IPR infringements, create an additional challenge for the Group in protecting its proprietary rights relating to its online business processes and other digital rights, and failure to protect its proprietary rights or IPRs could result in the loss or diminution in value of these rights. Sanoma also uses a high volume of thirdparty IPRs in its operations, which exposes it to possible infringement claims from third parties. Such claims could result in burdensome litigations and additional costs as well as adversely affect Sanoma’s reputation, which could, in turn, have a negative impact on Sanoma’s operations.

To mitigate these risks, the Group relies on copyright, trademark and other intellectual property laws as well as its group-wide IPR Policy and procedures to establish and protect its proprietary rights in these products. However, there can be no assurance that the Group’s proprietary rights will not be challenged, invalidated or circumvented.

Business interruption, health and safety and hazard climate-related risks

Operational disruption to the Group’s business may be caused by a major disaster and/or external threats that could restrict its ability to supply products and services to its customers, including potential disruptions such as internet or energy availability in the Group’s main operating countries. The Group is exposed to various health and safety and environmental risks, such as natural disasters and hazards following climate change, that are beyond Sanoma’s control and that could cause business interruption and result in significant costs. External threats including but not limited to pandemics, such as COVID-19, terrorist attacks, strikes and weather conditions, could affect the Group’s businesses and employees, disrupting daily business activities. Also, any failure to maintain high levels of safety management could result in physical injury, sickness or liability to Sanoma’s employees, which could, in turn, result in the impairment of Sanoma’s reputation or inability to attract and retain skilled employees.

Despite Sanoma’s operational policies, efficient and accurate process management and contingency planning, there can be no assurance that these will be sufficient in preventing any of the above-mentioned risks, or recovering from such risks. To mitigate potential hazard physical risks, Sanoma has continuity and disaster recovery plans in place for its critical systems and operations, but there can be, however, no assurance that these will be sufficient in preventing such risks impacting Sanoma negatively. Sanoma’s insurance programme provides coverage for insurable hazard risks, subject to insurance terms and conditions, but there can be no assurances that Sanoma’s insurance coverage would adequately cover all or any of such costs, if such an incident were to occur, which could result in significant costs.

Non-financial risks

Talent attraction and retention

The Group’s success depends on having competent, skilled and engaged management and employees, and on their competencies and skills in developing appealing products and services in accordance with customer needs in a changing environment. Recruiting and retaining skilled and motivated personnel may become increasingly difficult as a result of various factors, including a shortage of skills in the labour market and intensifying competition for personnel. In addition, Sanoma’s involvement in M&A transactions generally exposes it to the risk of employees, including senior management and other key employees, leaving before such projects are completed or the acquired businesses integrated to Sanoma’s existing business. Also, cultural differences, resistance to change or uncertainty around successful adaptation of new (hybrid and remote) working models may hinder the Group’s performance or transformation. Should the Group fail to attract, retain, develop, train and motivate qualified, engaged and diverse employees at all levels, it could have an adverse effect on the Group’s profitability and value creation, competitiveness and development of its business operations in the long term.

To mitigate these risks, Sanoma aims to enhance a corporate culture that supports training, innovation, creativity, diversity, as well as an ethical and efficient way of working, for which the framework is set in Sanoma’s Code of Conduct and Diversity Policy. Sanoma measures employee engagement on an annual basis, and the results are also linked to the executive and senior management remuneration.

Climate change-related risks

Sanoma’s most significant environmental impacts derive from greenhouse gas emissions caused by the energy and materials used in its value chain. The availability and price of forest commodities and energy pose a risk for Sanoma and changes in them may potentially have an adverse impact on the Group’s business and financial performance. Sanoma is also exposed to a risk of increasing pricing of energy due to carbon taxes both in its own operations and in the supply chain. The effects of climate change are wide-ranging and may bring, for example, considerable social uncertainty, although Sanoma’s business is not highly carbon intensive and climate change risks are not estimated to have material financial impacts.

Sanoma mitigates climate-related risks through its ambitious climate strategy and by developing sustainability together with its stakeholders and working alongside its suppliers to improve their sustainability performance. To identify and control environmental and climate-related risks and opportunities, Sanoma evaluates them as part of its annual risk assessment process. In addition, Sanoma analyses its climate-related risks and opportunities by using the Task Force on Climate-related Financial Disclosure (TCFD) framework, which is available in the Sustainability Report.

Risks related to human rights, anti-corruption and bribery

Sanoma operates in twelve European countries and is committed to conducting business in a legal and ethical manner in compliance with local and international laws and regulations applicable to its business as well as its Code of Conduct. Nevertheless, there is a risk that Sanoma’s employees or business partners may act in a way that violates human rights or anti-corruption and bribery laws and regulations or they may act unethically.

In Learning, Sanoma’s business partners mainly include municipalities, other governmental units and schools, while Media Finland, for example, uses many third-party content providers.

To mitigate these risks for example, all of Sanoma’s employees must comply with Sanoma’s Code of Conduct, which supports the international standards on human rights and labour conditions and clearly prohibits all corruption and bribery. The requirements of the Code of Conduct are extended to Sanoma’s suppliers through the Supplier Code of Conduct. Sanoma aims to ensure compliance with measures such as a mandatory e-learning course on the Code of Conduct for all employees; however,
there can be no assurance that Sanoma’s internal control measures will detect and prevent misbehaviour by individual employees or third-party suppliers. Breaches of applicable laws and regulations or corporate policies by Sanoma’s employees or business partners may lead to legal processes, sanctions and fines, as well as reputational damage affecting Sanoma’s operations, which could have a material adverse effect on Sanoma’s business, financial condition or results of operations.