Sanoma’s Interim Report 1 January – 31 March 2

Sanoma Corporation, Stock Exchange Release, 29 April 2015 at 8:30 CET+1

First quarter

• Net sales amounted to EUR 380.1 million (2014: 438.3).
• Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 3.8%.
• Operating profit excluding non-recurring items was EUR -19.9 million (2014: -4.0).
• Non-recurring items included in the operating profit amounted to EUR 8.8 million (2014: 166.0), mainly related to a sales gain and restructuring expenses. In the previous year, non-recurring items consisted mainly of sales gains on real estate.
• Earnings per share were EUR -0.06 (2014: 0.77).
• Earnings per share excluding non-recurring items were EUR -0.15 (2014: -0.09).
• Cash flow from operations was EUR -73.1 million (2014: -52.1).

Outlook (unchanged)

In 2015, Sanoma expects that the Group’s consolidated net sales growth adjusted for structural changes will be around the previous year’s development (2014: -3.7%). The operating profit margin excluding non-recurring items is estimated to be at or above the previous year’s level (2014: 6.2% of net sales).

Mid-term outlook (unchanged)

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 (based on reported figures, not adjusted for structural changes)

* Including finance leases. ** Rolling 12-month period.

Organic growth, %

Harri-Pekka Kaukonen, President and CEO

“Our performance in the first three months of 2015 was mixed. The rolling 12 month growth trend improved from -3.7% to -3.2%. This was supported by new media sales, which grew by over 5%. Now close to 40% of our consumer media sales in the Netherlands, Belgium and Finland have been generated from new media products and services during the last 12 months. However, the profitability for the Group was not at a satisfactory level as operating profit declined.

Our Finnish consumer media operations faced headwinds in the first quarter. Print advertising sales declined by over 10% and growth in digital sales was not able to compensate for the decline. Helsingin Sanomat consumer sales grew thanks to improved content and good uptake in digital sales. However, total sales and profitability declined for the Finnish operations. The need to turn the tide is obvious. Pia Kalsta was appointed as new CEO of Media Finland. With Kalsta we will enter the next phase of Sanoma's transformation in Finland: improve profitability and return to growth.

Media BeNe, the new unit of our Dutch and Belgian media operations, performed quite well in a tough market. The TV advertising market declined in the first quarter. Visibility in TV advertising is poor and volatility between months is high. Our Dutch TV operation had a slightly weaker start to the year in terms of viewing share but SBS was able to achieve organic growth. Regarding the Dutch magazine business, the focus title approach is paying off. Cross and upsell is easier with a smaller portfolio and a number of magazines showed growth in the first quarter. Also the press distribution business turned the negative trend to positive as a result of achieving new clients. Overall profitability in Media BeNe was on last year’s level when adjusted for divestments and acquisitions.

For Learning, the first quarter is seasonally very minor. The ordering pattern is changing in the industry towards end of the summer, reinforcing seasonality even more. This was partly visible in the Netherlands in the first quarter and will be visible in the second quarter in Poland. However, this is a timing shift issue between quarters and will not have an impact on the full year.”

January–March 2015 Interim Report webcast

The event for analysts, investors and media will be held in English by President and CEO Harri-Pekka Kaukonen and CFO Kim Ignatius on 29 April 2015 at 11:00 Finnish time (9:00 UK time) at Sanomatalo, Töölönlahdenkatu 2, Helsinki. The live webcast can be viewed on Sanoma’s website at www.sanoma.com/en/investors and on demand after the event.

Please join by dialing Finland: +358 (0)9 6937 9543 / US: +1 646 254 3362 / UK: +44 (0)20 3427 1905 / Netherlands: +31 (0)20 794 6706 Conference id: 8622277

Financial reporting 2015

-  Interim Report January–June on 23 July 2015, approx. at 8:30 -  Interim Report January–September on 29 October 2015, approx. at 8:30.

Additional information Sanoma's Investor Relations, Olli Turunen, tel. +358 40 552 8907

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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 platforms. Our main markets in learning are Belgium, Finland, the Netherlands, Poland and Sweden. In 2014, Sanoma’s net sales totalled EUR 1.9 billion. Sanoma is listed on the Nasdaq Helsinki stock exchange.