”The world around us changed dramatically on 24 February with the unprovoked Russian invasion of Ukraine. We are shocked and appalled by the war and the atrocities committed, and we stand with the Ukrainian people. Sanoma has, together with its employees, made a donation to the Red Cross to support humanitarian aid to Ukraine. We are also supporting in different ways through our businesses: our Polish learning business, for example, is very concretely supporting local schools to enable the continuation of the education of refugee children, and our journalists and photographers work relentlessly to share fact-based news of the war, also on site in Ukraine. As Sanoma has no business in Ukraine or Russia, the war has had a very limited direct impact on our business.

All in all, we had a solid start to the year in both our learning and media businesses. In Learning, the first quarter is always seasonally small in net sales, and as a consequence loss-making. The high share of digital learning materials increased net sales in the Netherlands and Finland even during a small quarter, as digital sales are recognised evenly throughout the year. On the other hand, our large businesses in Spain and Poland amplify the seasonality within the year, as the digitalisation level in those markets is still low, and the delivery of printed learning materials largely focuses on the start of the new school year during the third quarter. We are well-prepared for the forthcoming high season and our focus is especially on Spain, where we currently expect 12 out of 17 regions to implement the new curriculum in 2022. This represents slightly more than half of the total market revenues, while the remainder will follow a year later. At the same time, we expect demand in Poland to decline in 2022 ahead of a smaller curriculum renewal, which is expected to start in 2023. Overall, the Spanish growth and Polish decline are expected to more or less offset each other in 2022.

In Media Finland, advertising demand had a temporary slowdown and was indirectly slightly affected by the war in Ukraine in March and early April, while we now again see it returning to the levels expected earlier. Subscription sales continued to normalise after the strong growth during the pandemic. In the largest daily newspaper, Helsingin Sanomat, and the regional newspapers, the number of digital subscriptions continued to grow, albeit more modestly. Supply of newsprint was very tight in January−April due to a long strike in the only newsprint paper mill in Finland and the discontinuation of procurement of paper from Russia. As expected already at the beginning of the year, the price of newsprint paper increased significantly during the quarter and is expected to remain high for the rest of the year, while we have been optimising our paper usage to mitigate part of the additional costs. I am very happy about the current outlook for the upcoming festival and events season, as for the first time in two years it seems that festivals can be organised in a normal manner. Overall, there will be a record number of events organised in Finland this year, and the enthusiasm among people is already seen in high ticket demand, although we expect actual buying of tickets to be closer to the event dates than before the pandemic."

"For our shareholders, Sanoma offers a good balance of an increasing dividend and growth through M&A. Our leverage improved compared to the previous year, while increasing slightly compared to the end of 2021, in line with the seasonal pattern of our cash flow. We have a solid EUR 300−400 million headroom for further acquisitions, and with the integration of our latest large acquisition, Santillana, progressing as planned, we are operationally ready for the next acquisition.

I would like to thank our employees for their commitment and agility under the continuously changing circumstances. We have luckily seen societies and workplaces incrementally returning to a ‘new normal’ after the pandemic and have welcomed that with joy, while still paying special attention to each other’s health and safety. Even with the uncertainties in our operating environment, our outlook for 2022 is unchanged, and we look positively and confidently to the future.’’


29 April 2022