Sanoma Corporation, Stock Exchange Release, 7 February 2014 at 8:30 CET+1
Fourth quarter
- Net sales amounted to EUR 554.3 million (2012: 586.7).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 5.1%.
- Operating profit excluding non-recurring items was EUR 13.0 million (2012: 31.8).
- Non-recurring items included in the operating profit amounted to EUR -42.3 million (2012: -26.0) mainly related to losses on sales of assets and restructuring expenses.
- Earnings per share were EUR -0.24 (2012: -0.07).
- Earnings per share excluding non-recurring items were EUR 0.01 (2012: 0.08).
- Cash flow from operations was EUR 73.6 million (2012: 108.2).
2013
- Net sales amounted to EUR 2,218.7 million (2012: 2,376.3).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 6.6%.
- Operating profit excluding non-recurring items was EUR 154.9 million (2012: 231.0).
- Non-recurring items included in the operating profit amounted to EUR -427.2 million (2012: -50.0) mainly related to impairment charges, restructuring expenses as well as sales gains and losses.
- Earnings per share were EUR -1.97 (2012: 0.88).
- Earnings per share excluding non-recurring items were EUR 0.53 (2012: 0.77).
- Cash flow from operations was EUR 124.1 million (2012: 192.0).
- The Board of Directors proposes a dividend of EUR 0.10 per share (2012: 0.60). In addition, Board decided to propose to the Annual General Meeting that the Board be authorised to decide on the distribution of additional dividend of no more than EUR 0.20 per share.
Outlook
In 2014, Sanoma expects that the Group’s consolidated net sales adjusted for structural changes will decline somewhat compared to 2013. The operating profit margin excluding non-recurring items is estimated to be below previous year’s level (2013: 7.0% of net sales).
Mid-term outlook
Based on the execution of the strategic redesign, Sanoma expects that from 2016 onwards the Group’s consolidated net sales will return to organic growth. The operating profit margin excluding non-recurring items is targeted to be around 10% of net sales. Sanoma is targeting for a net debt to EBITDA ratio below 3.5.
Key indicators*
| Restated | Restated | |||||
| 10–12/ | 10–12/ | Change | 1–12/ | 1–12/ | Change | |
| EUR million | 2013 | 2012 | % | 2013 | 2012 | % |
| Net sales | 554.3 | 586.7 | -5.5 | 2,218.7 | 2,376.3 | -6.6 |
| Operating profit excluding non-recurring items | 13.0 | 31.8 | -59.3 | 154.9 | 231.0 | -33.0 |
| % of net sales | 2.3 | 5.4 | 7.0 | 9.7 | ||
| Operating profit | -29.4 | 5.7 | -615.0 | -272.3 | 181.0 | -250.5 |
| Result for the period from continuing operations | -38.0 | -9.6 | -295.7 | -332.3 | 69.9 | -575.2 |
| Result for the period *** | -38.0 | -9.6 | -295.7 | -332.3 | 149.0 | -323.1 |
| Capital expenditure ** | 67.3 | 59.5 | 13.1 | |||
| % of net sales | 3.0 | 2.5 | ||||
| Return on equity (ROE), % *** | -23.9 | 9.7 | ||||
| Return on investment (ROI), % *** | -9.3 | 8.3 | ||||
| Equity ratio, % *** | 37.2 | 41.3 | ||||
| Net gearing, % *** | 91.7 | 78.7 | ||||
| Number of employees at the end of the period (FTE) | 9,597 | 10,381 | -7.6 | |||
| Average number of employees (FTE) | 10,043 | 10,804 | -7.0 | |||
| Earnings/share, EUR, continuing operations | -0.24 | -0.07 | -259.7 | -1.97 | 0.39 | -602.6 |
| Earnings/share, EUR *** | -0.24 | -0.07 | -259.7 | -1.97 | 0.88 | -324.2 |
| Cash flow from operations/share, EUR *** | 0.45 | 0.66 | -31.0 | 0.76 | 1.18 | -35.4 |
| Equity/share, EUR *** | 5.78 | 7.82 | -26.1 | |||
| Dividend/share, EUR **** | 0.10 | 0.60 | ||||
| Dividend/result, % **** | n.a. | 68.4 | ||||
| Market capitalisation | 1,039.6 | 1,211.3 | ||||
* Comparable figures have been restated due to a change in IAS19 ‘Employee benefits’. The revised standard eliminates the possibility of using the corridor approach in recognising the actuarial gains and losses from defined benefit plans. The revised IAS 19 standard requires the actuarial gains and losses to be recognised immediately in the statement of other comprehensive income. For 2012, the restated total equity has decreased by EUR 52.0 million to EUR 1,576.6 million and the restated operating profit excluding non-recurring items has decreased by EUR 1.3 million to EUR 231.0 million.
** Including finance leases.
*** Includes continuing and discontinued operations.
**** Year 2013 proposal of the Board of Directors. In addition, Board decided to propose to the Annual General Meeting that the Board be authorised to decide on the distribution of additional dividend of no more than EUR 0.20 per share.
Harri-Pekka Kaukonen, President and CEO
”The transformation of our operations continued in 2013. As announced in October, we redesigned our consumer media operations and we are focusing our business towards more structurally attractive markets and transforming it towards digital services. We have two strong business pillars: leading multichannel consumer media assets with growing digital media presences in Finland and the Netherlands; and uniquely positioned learning assets in a number of chosen markets.
The change at Sanoma is fundamentally about renewing our offering. The choices that we have made allow us to fully focus on the areas and businesses that have the best transformation and growth potential.
In the Dutch magazine business we will focus on selected strong magazine brands in five specific content domains. The portfolio rationalisation is proceeding as planned. The share of viewing in the Dutch TV business remained at the comparable year’s level. Digital services showed strong momentum during the fourth quarter.
In Finland, the biggest daily newspaper Helsingin Sanomat reorganised its editorial offices and announced several journalistic and content reforms to continue to respond to its readers’ needs. Investments in the video-on-demand platform and digital services have laid the groundwork for new digital consumer revenues. Mobile use exceeded desktop use of Sanoma’s digital services at the end of 2013. The new, merged Sanoma Media Finland aims to utilise the benefits of its multichannel offering and increased co-operation.
The Learning business, once again, had a solid year ending the fourth quarter with important strategic steps in tutoring and emerging markets. We launched tutoring services in the Netherlands and Belgium as well as initiated a partnership with TutorHouse in Finland.
Divestments in Central and Eastern European countries continued to sharpen our focus on consumer media and learning. In December, we issued a hybrid bond which was significantly oversubscribed. The hybrid bond together with divestments of real estate and non-core operations strengthen our balance sheet supporting effective execution of our strategic plan.
In 2014 we will continue the execution of the transformation strategy. We will accelerate the pace of development of our products and services to consumers, advertisers and teachers. The Group-wide cost savings programme will help Sanoma to finance the investments needed to seize future growth.”
Group outlook
In 2014, Sanoma expects that the Group’s consolidated net sales adjusted for structural changes will decline somewhat compared to 2013. The operating profit margin excluding non-recurring items is estimated to be below previous year’s level (2013: 7.0% of net sales).
Sanoma’s outlook is based on three major factors: (1) continued negative pressure on sales and operating profit due to declining print markets and weak economic development in Sanoma’s core operating countries, (2) strong positive impact from the EUR 100 million cost savings programme, and (3) increased investment levels to fund digital transformation and growth in Consumer Media and the expansion into tutoring and emerging markets in Learning.
Mid-term outlook
Based on the execution of the strategic redesign, Sanoma expects that from 2016 onwards the Group’s consolidated net sales will return to organic growth. The operating profit margin excluding non-recurring items is targeted to be around 10% of net sales. Sanoma is targeting for a net debt to EBITDA ratio below 3.5.
Full-year result webcast
The event for investors and analysts will be held in English by President and CEO Harri-Pekka Kaukonen and CFO Kim Ignatius today at 11:00 Finnish time (9:00 UK time) at Nelonen studio, Sanomatalo, Töölönlahdenkatu 2, Helsinki. The webcast can be viewed on Sanoma’s website at www.sanoma.com/en/investors.
Please join by dialling:
Finland +358 (0)9 2313 9201 / Netherlands +31 (0)20 7965 008 / UK +44 (0)20 7162 0077 / US +1 334 323 6201
Conference id 940705
Financial reporting 2014
Sanoma will publish its Interim Reports in 2014 on a quarterly basis:
— Interim Report January-March on 30 April 2014, at approx. 8:30 a.m.
— Interim Report January-June on 25 July 2014, at approx. 8:30 a.m.
— Interim Report January-September on 29 October 2014, at approx. 8:30. a.m.
Additional information
Sanoma's Investor Relations, Olli Turunen, tel. +358 40 552 8907 or ir@sanoma.com
Sanoma.com
Get the world. Sanoma helps people access and understand the world.
We believe in a world full of opportunities, feelings, reactions and inspiration. A world that you can reach, influence, explore and share. We want to make it yours.
Sanoma is a front running consumer media and learning company in Europe. In Finland and the Netherlands we are the market leading media company with a broad presence across multiple media platforms. Our operating markets in Learning are Belgium, Finland, the Netherlands, Poland and Sweden. In 2013, Sanoma’s net sales totalled EUR 2.2 billion. Sanoma is listed on the NASDAQ OMX Helsinki stock exchange.
File: sanoma_full_year_result_2013.pdf