Sanoma’s Half-Year Report 1 January–30 June 20
Post# of 301275
Sanoma Corporation, Stock Exchange Release, 25 July 2017 at 08:30 CET+1
Second quarter
- Reported net sales amounted to EUR 441.4 million (2016: 449.7).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 2.0%.
- Operational EBIT decreased to EUR 81.7 million (2016: 86.9). Adjusted for the divestment of the Dutch TV operations of SBS, comparable operational EBIT was stable at EUR 78.8 million (2016: 78.6).
- Operating profit was EUR 77.6 million (2016: 141.7).
- Items affecting comparability included in the operating profit totalled EUR -4.2 million (2016: 54.8) and consisted of capital loss and adjustments related to asset held for sale classification of SBS, impairments and restructuring expenses as well as a capital gain on the divestment of Sanoma Baltics.
- Earnings per share were EUR 0.31 (2016: 0.57).
- Operational earnings per share were EUR 0.32 (2016: 0.32).
- Cash flow from operations was EUR -0.4 million (2016: 8.5) and capex was EUR 10.4 million (2016: 9.7).
First half
- Reported net sales amounted to EUR 785.2 million (2016: 802.8).
- Adjusted for changes in the Group structure, Sanoma’s net sales decreased by 2.2%.
- Sanoma announced the divestment of the Dutch TV operations of SBS on 10 April 2017 and classified all related assets and liabilities as held for sale. The impact on the result attributable to the equity holders of the Parent Company (i.e. the net result) in the first half was EUR -286.4 million.
- Operational EBIT improved to EUR 93.1 million (2016: 88.8). Adjusted for the SBS transaction, comparable operational EBIT was EUR 95.5 million (2016: 84.9).
- Items affecting comparability included in the operating profit amounted to EUR -431.4 million (2016: 56.0), and consisted of capital loss and adjustments related to asset held for sale classification of SBS, impairments and restructuring expenses as well as a capital gain on the divestment of Sanoma Baltics.
- Operating profit was EUR -338.3 million (2016: 144.7), the decline largely caused by the capital loss related to the divestment of SBS.
- Earnings per share were EUR -1.45 (2016: 0.56).
- Operational earnings per share were EUR 0.34 (2016: 0.28).
- Cash flow from operations was EUR -42.8 million (2016: -48.2) and capex was EUR 18.8 million (2016: 15.3).
- Net debt/adj. EBITDA ratio at the end of June was 3.6 times (2016: 3.8).
- Equity ratio was 29.0% (2016: 41.7%) due to the capital loss booked in connection with the SBS asset held for sale classification.
Outlook (unchanged)
For 2017, Sanoma expects that the Group’s consolidated net sales adjusted for structural changes, including the divestment of SBS, will be stable and the operational EBIT margin will be above 10%.
The outlook is based on the assumption of the advertising markets development in the Netherlands and Finland being in line with that of 2016.
Reported key indicators
| 4-6/ | 4-6/ | Change | 1–6/ | 1–6/ | Change | 1–12/ | ||||||||||||||
| EUR million | 2017 | 2016 | % | 2017 | 2016 | % | 2016 | |||||||||||||
| Net sales | 441.4 | 449.7 | -1.9 | 785.2 | 802.8 | -2.2 | 1,639.1 | |||||||||||||
| Operational EBIT | 81.7 | 86.9 | -6.0 | 93.1 | 88.8 | 4.9 | 167.9 | |||||||||||||
| % of net sales | 18.5 | 19.3 | 0,0 | 11.9 | 11.1 | 0,0 | 10.2 | |||||||||||||
| Operating profit | 77.6 | 141.7 | -45.3 | -338.3 | 144.7 | 196.6 | ||||||||||||||
| Result for the period | 50.8 | 96.9 | -47.6 | -372.2 | 96.8 | 116.0 | ||||||||||||||
| Cash flow from operations | -0.4 | 8.5 | -42.8 | -48.2 | 153.5 | |||||||||||||||
| Capital expenditure * | 10.4 | 9.7 | 8.0 | 18.8 | 15.3 | 22.7 | 34.8 | |||||||||||||
| % of net sales | 2.4 | 2.1 | 0,0 | 2.4 | 1.9 | 0,0 | 2.1 | |||||||||||||
| Return on equity (ROE), % ** | -38.8 | -3.5 | 10.9 | |||||||||||||||||
| Return on investment (ROI), % ** | -16.2 | 1.2 | 9.9 | |||||||||||||||||
| Equity ratio, % | 29.0 | 41.7 | 41.0 | |||||||||||||||||
| Net gearing, % | 141.5 | 79.3 | 78.4 | |||||||||||||||||
| Number of employees at the end of the period (FTE) | 5,212 | 5,467 | -4.7 | 5,227 | ||||||||||||||||
| Average number of employees (FTE) | 5,181 | 5,491 | -5.6 | 5,384 | ||||||||||||||||
| Earnings/share, EUR | 0.31 | 0.57 | -46.1 | -1.45 | 0.56 | 0.65 | ||||||||||||||
| Cash flow from operations/share, EUR | 0.00 | 0.05 | -0.26 | -0.30 | 0.95 | |||||||||||||||
| Equity/share, EUR | 2.76 | 4.87 | -43.4 | 4.39 | ||||||||||||||||
* Including finance leases. ** Rolling 12-month period.
Sanoma presents certain financial performance measures (alternative performance measures or APMs) on a non-IFRS basis. The APMs are provided to reflect the underlying business performance and to enhance comparability from period to period. APMs should not be considered as a substitute for measures of performance in accordance with IFRS. More information is available at Sanoma.com.
Comparable key indicators, adjusted for the SBS transaction
| 4-6/ | 4-6/ | Change | 1–6/ | 1–6/ | Change | 1–12/ | |||||||||||||
| EUR million | 2017 | 2016 | % | 2017 | 2016 | % | 2016 | ||||||||||||
| Net sales | 382.2 | 387.6 | -1.4 | 678.5 | 691.3 | -1.9 | 1,407.0 | ||||||||||||
| Operational EBIT | 78.8 | 78.6 | 0.2 | 95.5 | 84.9 | 12.5 | 152.6 | ||||||||||||
| % of net sales | 20.6 | 20.3 | 14.1 | 12.3 | 10.8 | ||||||||||||||
| Operating profit | 74.5 | 133.4 | -44.1 | 88.5 | 140.8 | -37.2 | 188.3 | ||||||||||||
| Result for the period | 48.4 | 90.6 | -46.6 | 53.8 | 93.8 | -42.6 | 110.2 | ||||||||||||
| Cash flow from operations | -2.8 | 3.1 | -43.1 | -48.9 | 136.5 | ||||||||||||||
| Capital expenditure * | 9.4 | 8.1 | 16.2 | 17.0 | 13.1 | 30.2 | 30.4 | ||||||||||||
| % of net sales | 2.5 | 2.1 | 2.5 | 1.9 | 2.2 | ||||||||||||||
| Number of employees at the end of the period (FTE) | 4,854 | 5,094 | 4,847 | ||||||||||||||||
| Average number of employees (FTE) | 4,812 | 5,111 | 5,006 | ||||||||||||||||
| Earnings/share, EUR | 0.30 | 0.55 | -46.0 | 0.32 | 0.55 | -41.3 | 0.63 | ||||||||||||
| Cash flow from operations/share, EUR | -0.02 | 0.02 | -0.27 | -0.30 | 0.84 | ||||||||||||||
* Including finance leases.
Comparable adjusted figures exclude fully the divested operations of SBS but include 100% of Veronica Uitgeverij.
Reported organic growth of net sales, %
| 4-6/2017 vs. 4-6/2016 | 1-6/2017 vs. 1-6/2016 | 1–12/2016 vs. 1–12/2015 | ||
| Media BeNe | -2.3 | -3.0 | +0.5 | |
| Media Finland | -2.2 | -0.9 | +0.7 | |
| Learning | -0.9 | -2.5 | -2.5 | |
| Group | -2.0 | -2.2 | +0.1 |
Susan Duinhoven, President and CEO
“The second quarter went according to our expectations, even though the Finnish advertising markets were under some pressure. Sanoma’s operational EBIT in the second quarter totalled EUR 81.7 million (2016: 86.9). We finalised the divestment of the Dutch TV operations of SBS on 19 July. Adjusted for the SBS transaction, operational EBIT in the second quarter was stable at EUR 78.8 million (2016: 78.6). For the first half of the year, we increased our operational EBIT by 13% when adjusting for SBS and our operational earnings per share improved to EUR 0.35 (2016:.0.28).
In Media BeNe, the result improved clearly in the print and online portfolio thanks to continuous cost innovations, and the streamlining of the organisation continued. Lower TV advertising sales decreased reported results, but adjusted for the SBS transaction, our operational EBIT improved to EUR 24.6 million (2016: 21.4) in the second quarter. Sanoma is the leading local publisher in the Netherlands in reach both online and offline and our news site NU.nl gained an all-time record audience, 7.2 million unique visitors, in May.
Operational EBIT in Media Finland improved in the second quarter. The slightly disappointing development in the Finnish advertising markets in the first half of the year has affected our advertising sales, but our overall business performance remains positive thanks to improved subscription sales, growing online advertising sales and the continuous cost innovations. Nelonen Media has continued its strong viewing performance and in June its channels were once again the most viewed in Finland, with the commercial viewing share going up from 35.6% to 36.2%.
Sales in Learning grew following the good development in Finland as well as the consolidation of De Boeck in Belgium. As expected, the profitability was impacted by costs related to creating new learning methods for the Polish market, currently undergoing an educational reform, as well as our investments in our professional learning initiative SAM and the expected higher depreciation and amortisation related to earlier investments.
In the beginning of April, we announced the divestment of SBS. In July, we closed this transaction, and this will now allow us to decrease our debt significantly and give us better position to pursue opportunities in our businesses. Our portfolio going forward will be focused on businesses and brands with a leading market position, giving us the opportunity to offer consumers the most compelling content and our advertisers a unique combination of both reach and targeting. We continue to look for ways to serve our customers even better, while continuously also improving our processes and ways of working.”
Half-Year Report (January–June 2017) webcast
The event for analysts, investors and media will be held in English by President and CEO Susan Duinhoven and CFO and COO Markus Holm on 25 July 2017 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 in 5–10 minutes prior to the start time by dialing Finland: +358 (0)9 7479 0404 US: +1 719 457 1036 UK: +44 (0)330 336 9411 Netherlands: +31 (0)20 703 8261
Conference id: 7454706
Financial reporting 2017
- Interim Report January–September on 25 October 2017, approx. at 8:30.
Additional information Sanoma's Investor Relations, Anna Tuominen, tel. +358 40 584 6944
Sanoma.com
Sanoma
Sanoma is a front running media and learning company impacting the lives of millions every day. We provide consumers with engaging content, offer unique marketing solutions to business partners and enable teachers to excel at developing the talents of every child.
With companies operating in Finland, the Netherlands, Belgium, Poland and Sweden, our net sales totalled EUR 1.6 billion and we employed more than 5,000 professionals in 2016. The Sanoma shares are listed on Nasdaq Helsinki.
(0)
(0)