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Interim Report 1–6/2008 President and CEO Hannu Syrjänen 31 July 2008


Key Figures


Key Figures EUR million Net sales Operating profit % of net sales Operating profit excluding major non-recurring capital gains % of net sales Balance sheet total Capital expenditure Equity ratio, % Net gearing, % Interest-bearing liabilities Interest-bearing net debt Earnings/share, EUR Earnings/share, diluted, EUR Cash flow from operations/share, EUR Equity/share, EUR Market capitalisation Average number of employees Average number of employees *

1–6/2008 1,452.8 171.2 11.8

1–6/2007 1,408.0 186.9 13.3

Ch % 3.2 -8.4

1–12/2007 2,926.3 343.8 11.7

146.2

151.5

-3.5

303.5

10.1 3,369.2 49.4 40.8 81.6 1,148.5 1,058.4 0.74 0.73 0.23 7.94 2,260.3 20,773 17,694

10.8 3,256.6 43.2 42.7 71.5 1,020.7 930.8 0.80 0.79 0.25 7.79 3,877.7 19,267 16,566

3.5 14.3

12.5 13.7 -7.4 -6.9 -9.1 1.9 -41.7 7.8 6.8

10.4 3,192.3 90.5 45.4 58.2 881.4 793.3 1.47 1.46 1.38 8.27 3,196.2 19,587 16,701 * Full-time equivalents

Hannu Syrjänen | 31.7.2008 | 3


SanomaWSOY 900

Net sales, MEUR

2007

Operating profit, MEUR

2008 140

769.8 744.4

800 700 663.7

133.0

2007

2008

Capital gains

799.6

120

718.6

683.1

98.5 100

600

88.5

500

80

400

60

300

72.7

68.3

54.0

40

200

20 100

0

0 Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Hannu Syrj채nen | 31.7.2008 | 4


Net Sales by Division and Geographic Area 1–6/2008 (1–6/2007)

Net sales EUR 1 452.8 million

By division Rautakirja 27% (27%)

By geographic area Sanoma Magazines 40% (41%)

Other countries 5% (5%)

Finland 51% (50%)

SWelcom 5% (5%) SanomaWSOY Education and Books 11% (11%)

Other EU countries 44% (45%) Sanoma 16% (17%)

The Netherlands CEE countries, Russia and Ukraine

22% (24%) 22% (20%)

Intra group eliminations excluded Due to roundings, the sum of percentages of pies’ slides is not always 100% Hannu Syrjänen | 31.7.2008 | 5


Advertising Sales % of net sales

1–6/2008

1–6/2007

Sanoma Magazines Sanoma SWelcom

33% 55% 51%

30% 54% 57%

The Group

26%

25%

Hannu Syrjänen | 31.7.2008 | 6


Digital Business Sales EUR million

Online

100

TV and radio

% of net sales

%

12

10

80

8 60 6 40 4 20

2

0

0 1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

Hannu Syrj채nen | 31.7.2008 | 7


Market Environment


Changes in Market Research Institutions’ Forecasts, March vs. June Country

BE ES FI HU LT LTH NL RU

Nominal GDP (LCU) Private consumption Advertising Expenditure (Change, % yoy) (Change, % yoy) (% real change pa) March June June June March March 2008 2009 2010 2008 2009 2010 2008 2009 2010 2008 2009 2010 2008 2009 2010 2008 2009 2010 4.1 2.3 3.4 5.9 2.6 2.9 1.5 1.7 1.7 1.3 1.5 1.7 5.3 4.4 4.2 5.3 4.4 4.3 9.6 10.6 9.6 7.0 8.9 8.8 6.0 4.5 4.8 3.2 4.0 4.4 4.1 3.7 4.6 3.1 2.8 4.7 3.4 2.8 2.7 2.9 2.5 2.5 5.3 3.5 3.0 5.0 3.8 3.0 3.6 5.2 4.9 4.3 4.9 5.4 0.4 2.5 3.1 0.5 2.3 3.0 3.5 5.0 4.8 6.9 3.0 4.5 16.9 12.3 9.7 15.9 10.2 9.1 6.2 6.0 5.8 -1.0 0.5 3.5 14.7 11.4 9.5 15.2 11.0 10.0 8.9 7.0 6.1 8.3 6.5 6.1 4.4 5.0 4.6 5.5 4.8 3.5 2.1 1.9 1.9 2.1 1.7 1.9 4.4 3.5 4.7 3.2 2.9 3.2 19.5 16.9 14.2 19.8 17.6 15.0 12.3 10.7 10.2 12.0 11.5 11.5 30.4 24.5 18.3 30.4 24.5 18.3

= Estimate decreased = Estimate unchanged = Estimate increased

Lähde: EIU, Zenith Optimedia Hannu Syrjänen | 31.7.2008 | 9


Advertising Sales in Finland EUR 1,000

6/2008

Ch %

1–6/2008

Ch %

NEWSPAPERS

47,905

-0.9

326,524

0.1

TELEVISION

18,733

4.9

139,745

5.7

MAGAZINES

12,511

5.1

84,354

1.2

ONLINE

5,322

27.2

34,653

28.3

OUTDOOR

4,406

9.7

23,801

9.6

RADIO

5,214

4.3

23,257

7.9

322

123.3

1,551

66.9

94,413

3,2

633,885

3.3

CINEMA Total

Net figures, Change-% to previous year. Source: TNS Gallup Hannu Syrjänen | 31.7.2008 | 10


Advertising Sales in the NL EUR 1,000

1–5/2008

Ch %

TELEVISION

1,157,051

2.2

NEWSPAPERS

363,190

7.3

UNSOLICITED ADV MATERIAL

219,853

4.5

RADIO

214,315

8.9

MAGAZINES

208,358

-1.5

OUTDOOR

116,028

13.9

68,180

6.8

4,206

-34.2

2,354,162

4.0

INTERNET (1-4/2008) CINEMA Total

Gross figures, Change-% to previous year. Source: Nielsen Media Research Hannu Syrjänen | 31.7.2008 | 11


Key Events


Events in 2Q08 Product launches and acquisitions, digital • TV and web video guide Zie.nl, the Netherlands • Product comparison site Hintaseuranta.fi extended, Finland • eWebsite.com Goes Global, Czech • Online directory for those requesting and supplying domestic work Työtori, Finland • Social shopping website Spot-a-shop.nl, the Netherlands • Renewal of financial news site Taloussanomat.fi, Finland • Telecommunications website Mobilport.hu, Hungary • Casual gaming site Taukopelit.fi, Finland

Hannu Syrjänen | 31.7.2008 | 13


Events in 2Q08 Product launches, print • Renewal of fashion title Beau Monde, Romania • National Geographic Kids, Bulgaria • Women’s magazine Marie Claire, Czech • Health magazine Zdraven Journal, Bulgaria • National Geographic Traveler, Czech • Women’s magazine Marie Claire, Romania • Relaunch of the weekly magazine Story, Czech • Baby guide Babygids, the Netherlands • Parental magazine Kek Mama, the Netherlands • Life style magazine Marijke, the Netherlands

Hannu Syrjänen | 31.7.2008 | 14


Events in 2Q08 Acquisitions • Construction communications and consumer marketing expert Suorakanava, Finland • Publishing house Mama Media, Serbia • Internet company Net Info, Bulgaria • Publishing house Lux Media, Russia Divestment • SWelcom’s holding Maxisat, Finland • Movie magazine Preview, the Netherlands • Annual press subscription service business, Finland Other • Sanoma simplified its corporate structure • Sanoma Magazines Finland set up a new Digital Media unit

Hannu Syrjänen | 31.7.2008 | 15


Divisional Overview


Sanoma Magazines 400

Net sales, MEUR

2007

2008

70

Operating profit, MEUR

318.5 308.2

300 287.1 285.5

2008

Capital gains

352.4 350

2007

61.3 60

290.4

48.2

50

46.6

250 37.2

40

200

32.1

30.4

30

150 20

100 50

10

0

0

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Hannu Syrj채nen | 31.7.2008 | 17


Sanoma Magazines 1–6/2008 EUR million Net sales Sanoma Magazines Netherlands Sanoma Magazines International Sanoma Magazines Belgium Sanoma Magazines Finland Eliminations

Operating profit % of net sales Operating profit excluding major non-recurring capital gains % of net sales Balance sheet total Capital expenditure Average number of employees

1–6/2008

1–6/2007

Ch %

603.9 246.9 146.9 109.7 102.6 -2.2 94.7 15.7

595.3 256.4 134.3 108.3 98.7 -2.4 93.4 15.7

1.5 -3.7 9.4 1.3 4.0 -9.2 1.4

71.2

72.2

-1.3

139.7

11.8 1,992.2 12.2 6,041

12.1 1,971.4 10.1 5,532

1.1 20.0 9.2

11.3 1,937.5 20.6 5,623

1–12/2007 1,238.1 539.8 283.4 216.6 202.8 -4.6

160.9 13.0

Hannu Syrjänen | 31.7.2008 | 18


Sanoma 140

Net sales, MEUR 122.4 120.8

2007

121.1 119.8

120

2008

25

Operating profit, MEUR

2007

2008

124.6 114.0

20

19.6 17.9

100

60

17.2 14.7

15

80

17.3

13.6

10

40

5 20

0

0 Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Hannu Syrj채nen | 31.7.2008 | 19


Sanoma 1–6/2008 EUR million Net sales Helsingin Sanomat Ilta-Sanomat Other publishing Other Eliminations

Operating profit % of net sales Operating profit excluding major non-recurring capital gains % of net sales Balance sheet total Capital expenditure Average number of employees

1–6/2008 1–6/2007

Ch % 1–12/2007

242.0 145.3 46.6 45.7 76.6 -72.2 32.6 13.5

242.2 140.3 48.3 49.0 76.4 -71.8 36.8 15.2

-0.1 3.5 -3.4 -6.7 0.2 0.5 -11.4

480.8 278.9 94.8 97.5 152.6 -143.0 67.6 14.1

32.6

36.8

-11.4

67.6

13.5 456.0 9.7 2,771

15.2 514.4 9.2 2,679

-11.3 4.8 3.4

14.1 445.0 17.7 2,716

Hannu Syrjänen | 31.7.2008 | 20


SanomaWSOY Education and Books Net sales, MEUR

2007

2008

120

2007

Operating profit, MEUR

2008

40

110.5 104.8 97.0

100

29.8

30

26.4

27.9

80 68.5 60

20

58.3 52.2 10

40 0

20

-4.3 -10

0 Q1

Q2

Q3

Q4

-6.5 Q1

-6.6 Q2

Q3

Q4

Hannu Syrj채nen | 31.7.2008 | 21


SanomaWSOY Education and Books 1–6/2008 EUR million Net sales Educational publishing Publishing Other Eliminations

Operating profit % of net sales Operating profit excluding major non-recurring capital gains % of net sales Balance sheet total Capital expenditure Average number of employees

1–6/2008

1–6/2007

168.8 108.4 48.3 23.3 -11.3 22.0 13.0

157.0 98.4 47.1 22.9 11.4 23.3 14.8

7.5 10.2 2.5 1.8 -1.3 -5.4

322.5 197.7 97.3 51.1 -23.7 44.5 13.8

22.0

23.3

-5.4

44.5

13.0 689.7 7.4 3,094

14.8 638.2 2.9 2,748

Ch % 1–12/2007

8.1 12.6

13.8 585.0 7.7 2,769

Hannu Syrjänen | 31.7.2008 | 22


SWelcom 50

Net sales, MEUR

2007

2008

7

Operating profit, MEUR

2007

2008

6.3 45

42.5

40.9

40.5

6 5.4

40 35.2

35.4

35

5

32.8

4.0

30

4.0

4

3.5

25

3

20 15

2.9

2

10

1 5

0

0 Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Hannu Syrj채nen | 31.7.2008 | 23


SWelcom 1–6/2008 EUR million Net sales

1–6/2008 1–6/2007 Ch % 1–12/2007

TV and radio

81.4 47.1

70.6 40.4

15.3 16.6

146.0 83.2

Other

34.7

30.7

13.3

63.6

Eliminations

-0.4 10.4 12.8

-0.4 6.9 9.8

-5.9 50.6

-0.8 15.8 10.8

10.4

6.9

50.6

15.8

12.8 167.0 7.5 517

9.8 164.5 7.4 473

1.6 0.3 9.3

10.8 168.2 14.8 501

Operating profit % of net sales Operating profit excluding major non-recurring capital gains % of net sales Balance sheet total Capital expenditure Average number of employees

Hannu Syrjänen | 31.7.2008 | 24


Rautakirja 300

Net sales, MEUR

2007

2008

30

Operating profit, MEUR

2007

2008

Capital gains 241.1

250

200

23.1 203.2 202.7 201.3 192.4

214.5 20

150

13.0

100

10

9.0 9.9

10.6 7.4

50

0

0 Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Hannu Syrj채nen | 31.7.2008 | 25


Rautakirja 1–6/2008 EUR million Net sales Kiosk operations Press distribution Bookstores Entertainment Eliminations

Operating profit % of net sales Operating profit excluding major non-recurring capital gains % of net sales Balance sheet total Capital expenditure Average number of employees

1–6/2008 1–6/2007 Ch-% 1–12/2007 405.8 197.1 118.4 55.0 43.8 -8.5 17.3 4.3

393.7 186.2 117.2 52.7 45.4 -7.9 19.5 5.0

3.1 5.8 1.0 4.4 -3.6 7.9 -11.3

849.3 385.5 245.5 140.3 95.9 -18.0 55.6 6.5

17.3

19.5

-11.3

50.7

4.3 552.3 12.4 8,244

5.0 548.1 11.9 7,750

0.8 4.2 6.4

6.0 565.0 28.4 7,886

Hannu Syrjänen | 31.7.2008 | 26


Outlook for 2008


Group’s Outlook for 2008 Outlook • Net sales to grow, albeit at a somewhat slower rate than last year • Operating profit excluding major non-recurring capital gains continues to improve • In 2007, operating profit excluding capital gains totalled EUR 303.5 million and net sales grew by 6.7%

Hannu Syrjänen | 31.7.2008 | 28


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