"In Learning, net sales grew in most of our major operating countries, especially Spain and the Netherlands, partially supported by earlier ordering. During the upcoming third quarter high season, we expect growth in other learning content
markets to offset the expected decline in Spain resulting from the lower curriculum cycle. When adding the impact of the discontinuation of low-value Dutch distribution contracts, we continue to expect lower net sales and a stable margin for the full year 2024.
The implementation of the process and efficiency improvement program, Solar, continued to proceed according to our plans across all streams. We have, for example, established a sizable Tech hub in Poland that will bring benefits both to us and our customers in the years to come. During the first half of the year, we saw the first results of Solar initiatives taken in Spain at the end of 2023 in Learning’s personnel expenses. Supported by our increased scale and Program Solar, we are on track to reach Learning’s long-term profitability (operational EBIT margin excl. PPA) target of 23% by 2026.
In Media Finland, we have seen good development in both digital subscription and advertising sales throughout the first half of the year. Together with a lower cost base – to a great extent driven by lower paper and printing costs – this has resulted in an approx. EUR 7 million improvement in Media Finland’s operational EBIT excl. PPA. We expect this improvement to hold for the full year and July–December operational earnings to be similar to 2023. This is due to the advertising market in Finland declining slightly, a stronger prior year comparable for both advertising and subscription sales, and continuing, but
lower, paper cost gains.
The significant improvement in the Group’s free cash flow was mainly attributable to higher earnings in both businesses, lower investments, active working capital management and some phasing. Our net debt and leverage improved year-onyear and Net debt / Adjusted EBITDA was below the long-term target of < 3.0. In line with the annual seasonality of the learning business, the ratio is expected to decline further during the second half of this year.
We continue to be fully focused on delivering on our strategic focus areas for 2024–2026, which are 1) increasing the profitability of Learning and Media Finland, 2) growing organically and through in-market acquisitions, and 3) deleveraging the balance sheet.
I would like to extend my warmest thanks to all our teams for delivering the good results during the first half of the year and supporting our customers in the best possible way.”
24 July 2024
