Interim Report Q1 2024
Improved performance in a seasonally small quarter
Rob Kolkman, President & CEO
Alex Green, CFO
Q1 2024
Improved performance in a seasonally small quarter
Net sales
221m€
(2023: 218)
Organic net sales growth
5%
(2023: -1%)
Operational EBIT excl. PPA
-24m€
(2023: -31)
Free cash flow
-44m€
(2023: -68)
Net debt / Adj. EBITDA
2.9
(2023: 3.2)
- Net sales grew in Learning mainly as a result of earlier ordering and stable in Media Finland
- Operational EBIT improved driven by lower operating expenses, especially paper, in both businesses and higher sales in Learning
- Free cash flow improved driven by higher earnings and active working capital management
- Leverage improved to 2.9, meeting the long-term target level of below 3.0
- Efficiency program Solar in Learning on track to reach the long-term profitability target of 23% in 2026
- Outlook unchanged: In 2024, Sanoma expects that the Group's reported net sales will be
1.29‒1.34bn€ (2023: 1.4). The Group's operational EBIT excluding PPA is expected to be
between 160−180m€ (2023: 175).
2 | Interim Report Q1 2024 |
LEARNING Q1 2024
Improved performance in a
seasonally small quarter
- Net sales grew to 81m€ (2023: 76)
- Growth in most markets with some earlier ordering most notably in the Netherlands and Belgium
- Divestment of Stark had -4m€ impact (full year -14m€)
- Operational EBIT excl. PPA improved to -28m€ (2023: -34)
- Driven by higher net sales
- Active cost management as well as lower paper and printing costs
Operational EBIT excl. PPA
m€
20.1 %
17.1 % 17.2 % 164
48
18.7 % 19.3 %
- FY 2024 margin expected to be relatively stable vs. 2023 due to the impact of lower curriculum cycle in Spain visible in H2 2024
-34 | -31 | -28 | |||||
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | |||
Operational EBIT excl. PPA | Margin (12mr) | ||||||
3 | Interim Report Q1 2024 |
Efficiency program Solar in Learning on track
- Program Solar, launched in October 2023, aims to operational efficiencies amounting to approx. 55m€ annual operational EBIT from
2026 onwards
Program streams touching our key operations across countries
Realisation of Solar initiatives
Run-rate of savings in 2026
100%
Organisational optimisation
Publishing process improvement
Harmonisation of digital platforms
Other optimisations
- Post-curriculumrenewal optimisation in Spain and Poland
- Optimising selected other operations
- Increasingly leveraging benefits of scale in content creation (sharing) and production (centres of excellence)
- Reviewing publishing portfolios and plans
- Optimising product development and maintenance through outsourcing and nearshoring mainly to Poland and Spain
- Rightsizing support functions by optimising the overall organisational structure
80%
60%
40%
20%
0%
2024 2025 2026
Current status of the run-rate of realisation of initiatives Expected run-rate of realisation of initiatives
4 | Interim Report Q1 2024 |
MEDIA FINLAND Q1 2024
Digital growth and lower paper
costs supported earnings
- Net sales amounted to 140m€ (2023: 142)
- Advertising sales were stable as growth in digital compensated for the decline in print
-
Subscription sales grew driven by good development in digital, especially Ruutu+
▪ Ruutu+ subscription base above 370,000 - Impact of portfolio changes -3m€ (full year -16m€)
- Operational EBIT excl. PPA improved to 8m€
(2023: 5) - Lower paper costs driven by both price and volume development
- Growth in digital subscription sales
Operational EBIT excl. PPA
m€
11.2 %
17 | ||||
6.0 % | ||||
5.7 % | 5.5 % | |||
3.6 % | 9 | 9 | ||
8 | ||||
5 | ||||
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | ||||
Operational EBIT excl. PPA | Margin | |||||||
5 | Interim Report Q1 2024 |
Outlook for 2024 (unchanged)
- In 2024, Sanoma expects that the Group's reported net sales will be 1.29‒1.34bn€ (2023: 1.4)
- The Group's operational EBIT excluding PPA is expected to be 160‒180m€ (2023: 175)
- Regarding the operating environment Sanoma expects that:
- The advertising market in Finland will decline slightly
- The development in the economies of the Group's operating countries is expected to be relatively stable
6 | Interim Report Q1 2024 |
Financials
Q1 2024
Operational EBIT improved,
although seasonally negative
Learning | + | Higher net sales driven by earlier ordering |
+ | Active cost management | |
+ Lower paper and printing costs | ||
Media | + | Lower paper costs driven by both price and |
Finland | volume development | |
+ Growth in digital subscription sales | ||
‒ Lower external printing sales | ||
Other & | ‒ | Higher personnel and technology costs |
elim. | largely due to timing |
➢ FY 2024 costs expected to be similar to 2023
Operational EBIT excl. PPA Q1 2024 vs. Q1 2023
m€
8 | Interim Report Q1 2024 |
Improvement in operational and reported earnings
Key income statement related items Q1 2024
- IACs were positive at 2m€ (2023: -2) and consisted of
- Capital gain related to the Netwheels divestment
- M&A integration costs
- Only small costs related to Program Solar
- Net financial items were relatively stable
- FY 2024 will be impacted by the repayment of the low coupon rate 200m€ bond in March 2024
- Result for the period follows the operational result and the lower IACs
m€ | Q1 2024 | Q1 2023 |
Operational EBIT excl. PPA | -23.7 | -30.7 |
IACs | 1.5 | -2.4 |
PPAs | -9.2 | -10.0 |
EBIT | -31.4 | -43.1 |
Net financial items | -6.8 | -6.5 |
RESULT BEFORE TAXES | -38.3 | -50.6 |
Income taxes | 10.8 | 10.8 |
RESULT FOR THE PERIOD | -27.6 | -39.8 |
Operational EPS, € | -0.20 | -0.23 |
EPS, € | -0.18 | -0.25 |
9 | Interim Report Q1 2024 |
Leverage improved | Net debt |
year-on-year | m€ | ||||||||
▪ Net debt at 694m€ clearly lower year-on-year, | Long-term | 3.2 | 3.3 | 3.2 | 3.2 | 3.3 | |||
although increased from year-end 2023 due to its | target | ||||||||
<3.0 | 2.8 | 2.8 | 2.9 | ||||||
seasonal pattern | |||||||||
2.6 | |||||||||
- Net debt / Adj. EBITDA improved to 2.9 (2023: 3.2) | |||||||||
- Equity ratio at 42.0% (2023: 40.6%) within the long- | |||||||||
term target range | |||||||||
▪ 200m€ bond was paid back in March 2024 with a | |||||||||
new 100m€ term loan and CPs | |||||||||
- Average interest rate of external loans 4.3% | |||||||||
(2023: 2.9%) in Q1 2024 | |||||||||
663 | 771 | 838 | 823 | 757 | 792 | 691 | 640 | 694 | |
Mar 22 | Jun 22 | Sep 22 | Dec 22 | Mar 23 | Jun 23 | Sep 23 | Dec 23 | Mar 24 |
Net debt | Net debt / Adjusted EBITDA | |
150m€ hybrid bond, issued in March 2023, is booked as equity, and excluded from net debt and net financial items.
10 Interim Report Q1 2024
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Sanoma Oyj published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 05:44:11 UTC.