2008-07-31 09:45:00 CEST
2008-07-31 09:45:52 CEST
REGULATED INFORMATION
SanomaWSOY - Interim report (Q1 and Q3)
SanomaWSOY's Interim Report 1 January-30 June 2008
SanomaWSOY Corp. Stock Exchange Release 31 July 2008 at 10:45
In January-June, SanomaWSOY Group's net sales increased by 3.2%,
totalling EUR 1,452.8 (1,408.0) million. Operating profit was EUR
171.2 (186.9) million, including major non-recurring capital gains of
EUR 25.0 (35.4) million. In the second quarter, Group net sales
increased to EUR 769.8 (744.4) million and operating profit excluding
major non-recurring capital gains totalled EUR 97.0 (98.8) million.
Second quarter earnings per share including capital gains was EUR
0.40 (0.58). The Group's outlook for operating profits remains
unchanged. Net sales are estimated to grow, albeit at a somewhat
slower rate than last year.
KEY INDICATORS 4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
EUR million 2008 2007 % 2008 2007 % 2007
Net sales 769.8 744.4 3.4 1,452.8 1,408.0 3.2 2,926.3
Operating profit 98.5 133.0 -25.9 171.2 186.9 -8.4 343.8
% of net sales 12.8 17.9 11.8 13.3 11.7
Operating profit
excluding
major non-recurring
capital gains 97.0 98.8 -1.8 146.2 151.5 -3.5 303.5
% of net sales 12.6 13.3 10.1 10.8 10.4
Balance sheet total 3,369.2 3,256.6 3.5 3,192.3
Capital expenditure 28.8 28.1 2.5 49.4 43.2 14.3 90.5
% of net sales 3.7 3.8 3.4 3.1 3.1
Equity ratio, % 40.8 42.7 45.4
Net gearing, % 81.6 71.5 58.2
Interest-bearing 1,148.5 1,020.7 12.5 881.4
liabilities
Interest-bearing 1,058.4 930.8 13.7 793.3
net debt
Average number of
employees 20,773 19,267 7.8 19,587
Average number of
employees
(full-time
equivalents) 17,694 16,566 6.8 16,701
Earnings/share, EUR 0.40 0.58 -31.0 0.74 0.80 -7.4 1.47
Earnings/share,
diluted,
EUR 0.40 0.57 -30.6 0.73 0.79 -6.9 1.46
Cash flow from
operations/share, -0.06 0.12 0.23 0.25 -9.1 1.38
EUR
Equity/share, EUR 7.94 7.79 1.9 8.27
Market 2,260.3 3,877.7 -41.7 3,196.2
capitalisation
Hannu Syrjänen, President and CEO"The first six months went according to plan. Magazines and digital
business performed well. The slow down of economic growth, however,
had impacts on the newspaper business and kiosk operations. We have
further intensified the earlier adopted cost-cutting measures in all
our businesses.
In Russia, our magazine business continues to grow at a healthy pace,
and it was further strengthened by the acquisition of the glossy
magazine publisher Lux Media. The integration of the kiosk chain
acquired in March in the city of Rostov in Southern Russia is well
under way, and the same goes for the Polish educational publisher
Nowa Era. In July, we completed the acquisition of Net Info,
announced in the second quarter. As a result of the acquisition, we
now hold a leading position in Bulgaria's fast-developing internet
market.
Digital business continued to grow through new product launches and
acquisitions also in the Netherlands and Hungary. In Finland, the
viewing shares of our television channels continued to increase. In
January-June, digital operations accounted for nearly 11% (7%
excluding TV operations) of the Group's net sales. Further, we
expanded our print products portfolio with the launch and acquisition
of new magazine titles particularly in Central Eastern Europe, but
also in the Netherlands. Strong quarterly fluctuations in the
educational publishing business continued.
Our goal is to be one of the leading media companies in Europe. We
focus on consistent, sustainable growth and improved profitability.
We believe in value-adding market leadership in our chosen businesses
and markets."
Net sales
In January-June, SanomaWSOY's net sales increased by 3.2%, totalling
EUR 1,452.8 (1,408.0) million. Out of the divisions, Sanoma
Magazines, SanomaWSOY Education and Books, SWelcom and Rautakirja
increased their net sales. Sanoma's net sales were affected by the
decline of newsstand sales and free sheet market. Net sales adjusted
for changes in the Group structure increased by 2.9%.
Advertising sales accounted for 26% (25%) of the Group's total net
sales. Online advertising, in particular, has increased. In
geographical terms, Finland accounted for 51% (50%) of net sales with
the other EU countries accounting for 44% (45%) and other countries
for 5% (5%).
Result
SanomaWSOY Group's operating profit totalled EUR 171.2 (186.9)
million or 11.8% (13.3%) of net sales. Operating profit included
major non-recurring capital gains of EUR 25.0 (35.4) million from the
sale of the Dutch movie distribution company R.C.V. Entertainment, as
well as real estate. Operating profit excluding these major
non-recurring capital gains amounted to EUR 146.2 (151.5) million.
Sanoma Magazines' operating profit increased when both the Dutch and
the Central Easter European operations improved their results.
Operating profit improved also in SWelcom, where all businesses
contributed to the growth. The result decreased in Sanoma, SanomaWSOY
Education and Books and Rautakirja.
SanomaWSOY's net financial items totalled EUR -20.6 (-16.7) million.
Financial income amounted to EUR 6.6 (4.7) million. Financial
expenses amounted to EUR 27.2 (21.3) million and comprised primarily
interest costs of EUR 23.9 (19.8) million on interest-bearing
liabilities. Financial expenses were driven by the general increase
in interest rates.
The result before taxes was EUR 155.2 (174.8) million and earnings
per share were EUR 0.74 (0.80).
Balance sheet and financial position
As of 30 June 2008, the consolidated balance sheet totalled EUR
3,369.2 (3,256.6) million. Cash flow from operations was EUR 37.3
(41.9) million and cash flow per share was EUR 0.23 (0.25). Cash flow
from operations decreased mainly due to the increase in working
capital from the comparable period. Fluctuations in working capital
are strong due to the nature of the Group's business.
At the end of June, SanomaWSOY's equity ratio was 40.8% (42.7%),
while net gearing increased to 81.6% (71.5%). Equity decreased to EUR
1,297.1 (1,301.6) million. A total of EUR 41.2 million was spent on
the acquisition of treasury shares during the period under review.
Interest-bearing liabilities increased to EUR 1,148.5 (1,020.7)
million and interest-bearing net debt to EUR 1,058.4 (930.8) million.
The debt was mainly driven by the acquisition of the Polish
educational publisher Nowa Era and other acquisitions. At the end of
June, the Group's balance sheet included cash and cash equivalents of
EUR 90.2 (89.9) million.
SanomaWSOY has a good financial position as a result of the strong
balance sheet and the loan facility renewed in August 2007. At the
end of 2007, the Group's net debt/EBITDA ratio was 1.6.
Investments, acquisitions and divestments
In January-June, investments in tangible and intangible assets
totalled EUR 49.4 (43.2) million, and were focused, for example, on
ICT systems, replacement investments and improvement of real estates.
R&D expenditure was recorded at EUR 2.0 (0.9) million or 0.1% (0.1%)
of net sales.
On 10 January 2008, Sanoma Magazines sold its Dutch movie
distribution company, R.C.V. Entertainment. In 2007, R.C.V.
Entertainment had net sales of EUR 34.2 million and made an operating
profit of some EUR 5 million. As a result of the sale, a capital gain
amounting to EUR 23.5 million was recorded in the first quarter of
2008.
On 11 March 2008, SanomaWSOY Education and Books closed its
acquisition of the Polish educational publisher Nowa Era. In 2007,
Nowa Era's net sales amounted to about EUR 43 million, and the
company's profitability was in line with the general level of good
profitability in educational publishing. The effect of the
acquisition on SanomaWSOY's result and balance sheet will be
established in more detail during 2008, as the integration of the
company's business is completed. The integration of Nowa Era into
SanomaWSOY's educational publishing business has began very well.
Dividend and other profit distributions
As of 31 December 2007, SanomaWSOY Corporation's distributable funds
were EUR 503.3 million, of which profit for the accounting period
made up EUR 266.8 million. In accordance with the Board's proposal,
the AGM decided to pay out a dividend of EUR 1.00 (0.95) per share.
The record date for the dividend payment was 4 April 2008 and the
dividend payment date was 11 April 2008. EUR 0.5 million was
transferred to the donation reserve and EUR 342.0 million was left in
equity.
SanomaWSOY conducts an active dividend policy and primarily
distributes over half of the Group result after taxes in dividends.
Shares and holdings
In the first half of 2008, trading with SanomaWSOY shares accounted
for 35% (28%) of the average number of shares in issue during the
period, or about 57.4 million shares. SanomaWSOY's total stock
exchange turnover was EUR 960.2 (1,025.4) million.
In January-June, the volume-weighted average price of a SanomaWSOY
share was EUR 16.70, with a low of EUR 13.88 and a high of EUR 19.87.
At the end of June, SanomaWSOY's market capitalisation excluding
treasury shares held by the Company was EUR 2,260.3 (3,877.7) million
and the closing price of the share was EUR 14.07 (23.47). At the end
of June, the Company had 17,345 shareholders with foreign holdings
accounting for 10.9% (13.0%) of the shares and votes. There were no
major changes in share ownership during the review period and
SanomaWSOY did not issue any flagging announcements.
SanomaWSOY began acquiring its shares on 10 August 2007 under the
2007 AGM authorisation. On 1 April 2008, the AGM issued a new
authorisation to acquire the Company's own shares and the share
buybacks under this authorisation started on 12 June 2008. In
January-June, SanomaWSOY acquired, under these authorisations, a
total of 2,499,097 of the Company's own shares at the cost of EUR
41.2 million. At the end of June, the Company held a total of
1,940,000 of these shares, representing 1.2% of the Company's shares
and votes. The accountable par of the treasury shares held by
SanomaWSOY was EUR 834,200. The acquisitions of the Company's shares
continued after the end of the period under review, and on 31 July
2008 the Company owned 2,375,000 shares, representing 1.5% of the
shares and votes. Under the current AGM authorisation, SanomaWSOY
retains the authority to acquire a further 7,670,000 of its own
shares.
Under the review period, SanomaWSOY's share capital was increased by
EUR 137,076.26. The share capital increases were related to the
exercise of stock options into shares. A total of 292,462 shares were
subscribed with 2001A stock options and 30,820 with 2001B stock
options. In February, SanomaWSOY cancelled all treasury shares held
by the Company at that time. At the end of June, SanomaWSOY's
registered share capital was EUR 71,258,986.82 and the number of
shares on the market was 162,587,074.
Board of Directors and management of the company
The AGM of 1 April 2008 confirmed the number of SanomaWSOY's Board
members at ten. Board members Robert Castrén, Jane Erkko and Paavo
Hohti were re-elected, and Rafaela Seppälä was elected as a new
member to the Board. The Board of Directors of SanomaWSOY consists
of: Jaakko Rauramo, Chairman; Sari Baldauf, Vice Chairman; and Robert
Castrén, Jane Erkko, Paavo Hohti, Sirkka Hämäläinen-Lindfors, Seppo
Kievari, Rafaela Seppälä, Hannu Syrjänen and Sakari Tamminen as
members.
The AGM re-appointed Pekka Pajamo, APA, and Sixten Nyman, APA, as his
deputy, and chartered accountants KPMG Oy Ab, with Kai Salli, APA,
acting as the Auditor in Charge, as the auditors of the Company.
On 7 February 2008, the Board of SanomaWSOY appointed Anu Nissinen as
President of SWelcom and a member of the Executive Management Group
of SanomaWSOY from 25 February 2008. Tapio Kallioja, the long-serving
President of SWelcom, retired in line with his contract of employment
on 31 March 2008.
In April, three new directors were appointed to the Corporate Centre
of SanomaWSOY. Kim Ignatius was appointed Chief Financial Officer
(CFO) of the SanomaWSOY Group and member of the Executive Management
Group. He will assume his new duties on 1 August 2008 when the
current CFO, Matti Salmi, retires. Sven Heistermann was appointed
Chief Strategy Officer (CSO) and Ben Tiesnitsch Chief Human Resources
Officer (CHRO) of the Group. Tiesnitch assumed his new duties on 1
June 2008 and Heistermann will assume his duties on 4 August 2008.
After the review period, Merja Karhapää was appointed Chief Legal
Officer (CLO), and Secretary to the Board, effective 1 August 2008.
Kerstin Rinne, current Senior Vice President, Group Legal Affairs and
M&A, will retire on 1 September 2008.
Board authorisations
The AGM held on 1 April 2008 authorised the Board of SanomaWSOY to
decide on the acquisition of the Company's own shares, valid until
the AGM of 2009.
A maximum of 8,285,000 shares may be acquired, corresponding to 5.1%
of the Company's shares and voting rights at the end of March. These
treasury shares will not be acquired in proportion to the
shareholdings of the existing shareholders. They will be acquired
with the Company's unrestricted equity at the market price at the
time of acquisition on the OMX Nordic Exchange Helsinki. However, the
minimum acquisition price of a share is the lowest market price in
public trading and the maximum acquisition price is the highest price
quoted in public trading during the authorisation period. The Board
decided on 1 April 2008 to deploy the authorisation and the
acquisition of own shares commenced on 12 June 2008.
In addition, the Board has a valid authorisation to increase the
share capital. According to the authorisation issued by the AGM on 4
April 2007, the Board may decide, until the AGM of 2010, on the issue
of new shares, the transfer of treasury shares and the granting of
special rights entitling to shares. The authorisation does not
exclude the right of the Board of Directors to decide on a directed
share issue. With this authorisation, and as a result of the use of
special rights, the Board is authorised to decide on the issuance of
a maximum of 82,000,000 new shares and the transfer of a maximum of
5,000,000 treasury shares. In a directed share issue, a maximum of
41,000,000 shares may be issued or transferred of. With this
authorisation, the Board is authorised to issue a maximum of
5,000,000 stock options as part of an incentive programme within the
Company.
During the review period, the authorisation by the AGM of 4 April
2007 for acquiring own shares was in force. The authorisation allowed
acquiring a maximum of 8,200,000 SanomaWSOY shares. These shares were
not to be acquired in relation to the holdings of existing
shareholders. They were acquired with the Company's unrestricted
equity at the market price at the moment of acquisition - however, in
such a way that the minimum acquisition price of a share was the
lowest market price in public trading and the maximum acquisition
price was the highest price noted in public trading during the
authorisation period. The share acquisitions commenced on 10 August
2007, and the authorisation remained valid until 1 April 2008.
Other resolutions by the AGM
The AGM decided to amend Article 1 (the Company's business name and
domicile) of SanomaWSOY's Articles of Association as proposed by the
Board. The Company's new business name will be Sanoma Oyj in Finnish,
Sanoma Abp in Swedish, and Sanoma Corporation in English. The
Company's registered office continues to be in Helsinki. The new name
will be in use on 1 October 2008 onwards.
At the same time, the name of the Sanoma Division will change in line
with an earlier resolution. From 1 October, the new name is Sanoma
News. On 1 April 2008, the Board decided to also harmonise the names
of other divisions. From the beginning of October, SanomaWSOY
Education and Books will become Sanoma Learning & Literature, and
SWelcom will become Sanoma Entertainment. The Rautakirja Division
will be re-named Sanoma Trade. The name of Sanoma Magazines will not
change.
Seasonal fluctuation
Developments in media advertising have an impact on the net sales and
results of Sanoma Magazines, Sanoma and SWelcom. Advertising sales
are influenced, for example, by the number of newspaper and magazine
issues published during each quarter, which varies yearly. Television
advertising in Finland is usually strongest in the second and fourth
quarters. The exact date of Easter has an impact on the net sales
accumulated from newspapers and distribution when comparing quarters
in these businesses on a year-to-year basis.
A major portion of the net sales and results in publishing and
retail, for example, is generated in the last quarter, particularly
from Christmas sales, while educational publishing accrues most of
its net sales and results during the second and third quarters.
Seasonal business fluctuations influence the Group's net sales and
operating profit, with the first quarter traditionally being clearly
the smallest.
Significant risks and uncertainty factors
The evaluation of business risks and the opportunities associated
with them is part of SanomaWSOY's daily management procedure. The
management must take calculated risks in order to ensure that the
company carries out its business as successfully as possible.
The most significant risks and uncertainty factors SanomaWSOY is
facing are described in the Annual Report, together with the main
principles of risk management. The most significant uncertainty
factors in the current year are related to the growth of media
advertising and consumer spending.
Growth of economies in the most of the Group's operating countries
has slowed down. Research institutions predict that GDP will grow by
2.7% in Finland, 2.0% in the Netherlands and 1.7% in Belgium. The
growth rate is expected to be 2.3% in Hungary, 4.7% in the Czech
Republic and 7.1% in Russia. Due to the weakened economic growth and
increased inflation, SanomaWSOY has intensified its cost saving
activities in all its businesses.
According to an estimate made by ZenithOptimedia in June, media
advertising in SanomaWSOY's primary market areas will grow faster
than GDP in 2008. However, there are big differences between various
media. This year, magazine advertising is estimated to decrease in
the Netherlands by 0.3%, while it is expected to grow by 8% in
Belgium, by 2% in the Czech Republic and by 2% in Hungary. In Russia,
advertising in printed media is expected to increase by 21%. In
Finland, ZenithOptimedia estimates newspaper advertising to grow by
3.5%, magazine advertising by 3% and TV advertising by 6%.
In 2008, private consumption is estimated to increase by 2.9% in
Finland, 2.1% in the Netherlands, 1.3% in Belgium, 4.1% in the Czech
Republic, 0.5% in Hungary and 12.0% in Russia.
Outlook for 2008
In 2008, operating profit excluding major non-recurring capital gains
is expected to continue to improve. In 2007, operating profit
excluding capital gains totalled EUR 303.5 million.
In 2008, SanomaWSOY's net sales are projected to grow, albeit at a
somewhat slower rate than last year. In 2007 the Group net sales
increased by 6.7%.
The estimate for the development of SanomaWSOY's net sales and
operating profit in 2008 is based on both organic growth, and growth
based on minor acquisitions. During 2008, SanomaWSOY will continue
its strong focus on investing in digital media and strengthening its
market positions. In addition to the Group's own business activities
and development projects, the growth of net sales and operating
profit are naturally also affected by the overall economic
development in the Group's operating countries.
Sanoma Magazines
Sanoma Magazines is one of the largest consumer magazine publishers
in Europe. The Division publishes more than 300 magazines in 13
different countries. Apart from developing its strong portfolio of
magazine brands, Sanoma Magazines is rapidly expanding its business
to digital media platforms.
- Net sales adjusted for changes in Group structure increased with
all businesses contributing to good development.
- Operational result improved in the second quarter, particularly in
the Netherlands.
- Investments in portfolio continued. In total, seven magazine
titles and five online services were launched or acquired during the
second quarter.
- Acquisitions of Bulgarian online company Net Info and Russian
magazines publisher Lux Media were closed.
KEY INDICATORS 4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
EUR million 2008 2007 % 2008 2007 % 2007
Net sales 318.5 308.2 3.3 603.9 595.3 1.5 1,238.1
Operating profit 46.6 61.3 -24.0 94.7 93.4 1.4 160.9
% of net sales 14.6 19.9 15.7 15.7 13.0
Operating profit
excluding
major non-recurring
capital gains 46.6 41.3 12.8 71.2 72.2 -1.3 139.7
% of net sales 14.6 13.4 11.8 12.1 11.3
Balance sheet total 1,992.2 1,971.4 1.1 1,937.5
Capital expenditure 12.2 10.1 20.0 20.6
Average number of
employees 6,041 5,532 9.2 5,623
Average number of
employees
(full-time
equivalents) 5,520 5,085 8.5 5,169
OPERATIONAL INDICATORS * 1-6/2008 1-6/2007
Number of magazines published 323 311
Magazine copies sold, thousands 205,160 214,786
Advertising pages sold 33,153 30,973
* Including joint ventures
Sanoma Magazines' net sales in January-June increased by 1.5% and
totalled EUR 603.9 (595.3) million. Net sales increased in all
businesses, except in Sanoma Magazines Netherlands where operations
were divested both in June 2007 and January 2008. Adjusted for
changes in the Group structure, the Division's net sales grew by
3.2%. Of the Division's net sales, 17% (17%) came from Finland. In
April-June, Sanoma Magazines' net sales grew by 3.3% and amounted to
EUR 318.5 (308.2) million. The growth came mainly from Sanoma
Magazines International.
The Division's advertising sales increased by 12% and represented 33%
(30%) of net sales. Most growth came from Sanoma Magazines
International and online advertising sales in the Netherlands. In
total, the Division's online advertising sales grew by 31%.
Circulation sales were at the previous year's level and represented
56% (57%) of Sanoma Magazines' net sales. The single copy sales in
the Netherlands declined, but the subscription sales in the
Netherlands and Finland developed positively.
Sanoma Magazines Netherlands' net sales decreased to EUR 246.9
(256.4) million. This was mainly due to structural changes. Sanoma
Magazines Netherlands has strongly focused its operations, divesting
its puzzle portfolio in June 2007. In January 2008, it acquired the
remaining shares of magazine publisher Mood for Magazines and
divested movie distributor R.C.V. Entertainment. In 2007, R.C.V.
Entertainment's annual net sales totalled EUR 34.2 million.
According to Nielsen Media Research, the magazine advertising market
in the Netherlands decreased by 1% in January-May 2008 and magazines
advertising's share of the total advertising decreased. Sanoma
Magazines Netherlands' advertising sales grew due to new operations
and online advertising sales. Online advertising sales grew by 23%
and outperformed market growth of 7%. The readers' market in the
Netherlands has declined slightly during the first months of 2008.
However, subscription sales at Sanoma Magazines Netherlands have
increased. With single copy sales below the comparable period, the
total circulation sales decreased. Sanoma Magazines Netherlands
continues its active portfolio management. In the second quarter, it
launched two specials: Marijke, a lifestyle glossy, and a parenting
magazine Kek Mama, as well as Spot-a-Shop.nl, a shopping guide site.
In addition, Sanoma Magazines Netherlands acquired Babygids, pocket
guide targeted at parents and Zie.nl, an online TV guide. Three
magazines were discontinued.
Net sales in Sanoma Magazines International grew to EUR 146.9 (134.3)
million. Growth came from increased advertising sales. Advertising
sales increased in all countries, with Russia showing the biggest
growth. Circulation sales in Sanoma Magazines International were
slightly behind the comparable period, with lagging single copy sales
in the Czech Republic and Hungary.
Sanoma Magazines International continued its active launch programme.
In the second quarter, four magazines and a brand extension were
launched. One magazine was discontinued. In Serbia, Adria Media
acquired Mama Media, a publisher of print and online parenting
titles. In Hungary, Sanoma Magazines acquired a product comparison
site Mobilport.hu that focuses on mobile communication apparel.
Significant steps in the growth strategy were the acquisition of 55%
of shares in the Russian magazine publisher Lux Media, concluded in
June, and 82% in the Bulgarian internet company Net Info, closed in
July.
Sanoma Magazines Belgium's net sales grew to EUR 109.7 (108.3)
million. Advertising sales were slightly behind the previous year's
level due to timing differences of magazine issues. Several titles
have had fewer issues than in the comparable period. Circulation
sales equalled last year. In Belgium, the total advertising market is
estimated to have grown sligthly and the long-term decline of the
readers' market has slowed down. Sanoma Magazines Belgium's market
position has remained solid.
Net sales in Sanoma Magazines Finland increased to EUR 102.6 (98.7)
million. Both subscription and advertising sales grew. The growth was
due to new titles. There were also timing differences, i.e. more
issues in some magazines than in the comparable period. Single copy
sales were at the previous year's level. According to TNS Gallup
Adex, advertising in consumer magazines in Finland decreased by 2% in
January-June. The magazine single copy market declined by 2% during
the first six months. Sanoma Magazines Finland improved its market
share both in advertising and the readers' market.
Sanoma Magazines' operating profit in January-June improved by 1.4%
and amounted to EUR 94.7 (93.4) million. The result included EUR 23.5
(21.2) million in major non-recurring capital gains related to the
sale of R.C.V. Entertainment. Excluding these sales gains, the
Division's operating profit was EUR 71.2 (72.2) million. Operating
profit in April-June totalled EUR 46.6 (61.3) million. If
non-recurring capital gains are excluded from the comparable period's
EBIT, the operating profit of the Division in the second quarter
improved by 12.8%.
Sanoma Magazines Netherlands' operating profit improved. There were
significant sales gains in both the reporting and comparable period.
The operational result improved due to changes in the product mix and
tight cost control. Increased advertising sales clearly improved
Sanoma Magazines International's operational result, particularly in
Russia. Sanoma Magazines Belgium's result decreased due to
investments in new businesses. Sanoma Magazines Finland's result was
behind the comparable period due to different timing of the marketing
costs than on the comparable period.
Sanoma Magazines continues to develop its magazine portfolio and
online businesses and invest in growth, which is expected to be most
rapid in Russia and the CEE countries.
In 2008, Sanoma Magazines' net sales are estimated to grow and
operating profit excluding major non-recurring capital gains is
expected to improve.
Sanoma
Sanoma is the leading newspaper publisher in Finland, and its
products have a strong presence both in print and digital format in
the lives of their readers. In addition to Helsingin Sanomat, the
largest daily in the Nordic region, the Division publishes national
and regional newspapers and is also investing heavily in digital
business.
- Online advertising continued to perform very well, Sanoma's online
advertising grew by 44% in January-June.
- Sanoma Digital acquired majority shareholding in the leading
Finnish online construction and remodelling service, Rakentaja.fi.
- The discontinuation of the printed version of Taloussanomat,
together with the decline of tabloid and free sheet markets slowed
down growth.
- Sanoma's full-year net sales and operating profit are expected to
remain at the previous year's level.
KEY INDICATORS 4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
EUR million 2008 2007 % 2008 2007 % 2007
Net sales 121.1 119.8 1.1 242.0 242.2 -0.1 480.8
Operating profit 14.7 17.3 -14.9 32.6 36.8 -11.4 67.6
% of net sales 12.1 14.4 13.5 15.2 14.1
Operating profit
excluding
major non-recurring
capital gains 14.7 17.3 -14.9 32.6 36.8 -11.4 67.6
% of net sales 12.1 14.4 13.5 15.2 14.1
Balance sheet total 456.0 514.4 -11.3 445.0
Capital expenditure 9.7 9.2 4.8 17.7
Average number of
employees 2,771 2,679 3.4 2,716
Average number of
employees (full-time
equivalents) 2,457 2,384 3.1 2,411
OPERATIONAL INDICATORS
ADVERTISING, COLUMN KM 1-6/2008 1-6/2007
Helsingin Sanomat 20.4 21.3
Ilta-Sanomat 3.8 3.6
Free sheets 15.8 19.5
Distribution of free sheets, millions 49.1 55.9
AUDITED CIRCULATION 1-12/2007 1-12/2006
Helsingin Sanomat 419,791 426,117
Ilta-Sanomat 176,531 186,462
ONLINE SERVICES, UNIQUE VISITORS, WEEKLY 4-6/2008 4-6/2007
Iltasanomat.fi 1,385,758 889,873
HS.fi 931,577 703,245
Huuto.net 416,724 411,957
Oikotie.fi 311,541 302,816
Taloussanomat.fi 280,286 178,907
Keltainenpörssi.fi 164,407 130,161
Sanoma's net sales in January-June remained at the comparable
period's level and amounted to EUR 242.0 (242.2) million. Net sales
increased slightly in Helsingin Sanomat but decreased in the
Ilta-Sanomat and other publishing business units. Net sales adjusted
for changes in the Group structure remained at the same level as in
the comparable period of 2007. In April-June, net sales increased by
1.1%, totalling EUR 121.1 (119.8) million, with advertising sales
returning to growth and a slight slowing down in the decline in
circulation sales.
According to TNS Gallup Adex, newspapers advertising in Finland
increased by 0.7% in January-June. Job advertising increased by 8%.
The growth rate of job advertising in Finland has slowed down in the
first half of the year. Advertising in free sheets fell by 5%. Online
advertising included in statistics developed strongly, growing by
28%. Online advertising in Sanoma exceeded market growth and
increased by 44%, which also had a significant positive impact on the
total advertising sales of the Division. The total advertising
revenues increased by 1%, amounting to 55% (54%) of net sales.
The circulation figures of subscribed newspapers have developed
rather steadily in Finland during the last few years, but the tabloid
market has been declining. In January-June, the Finnish tabloid
market decreased by 7%. In the first half of the year, the
circulation sales of Sanoma decreased by 4% as a result of a clear
reduction in newsstand sales. Circulation sales accounted for 37%
(39%) of the Division's net sales.
The Helsingin Sanomat business unit increased its net sales to EUR
145.3 (140.3) million as there was growth in both advertising and
circulation sales. The increase in advertising sales came from online
advertising which increased by 18%. Job advertising in Helsingin
Sanomat was on a par with the comparable period. The net sales of
Helsingin Sanomat's electronic products, such as the online service
HS.fi and classified online portal Oikotie, showed excellent
development. Helsingin Sanomat announced close collaboration with
Microsoft to develop new online services for both advertisers and
consumers.
The net sales of the Ilta-Sanomat business unit were EUR 46.6 (48.3)
million. The circulation sales of the business unit decreased due to
the shrinkage of the tabloid market. Ilta-Sanomat commanded a 57.2%
(57.6%) share of the tabloid market. The advertising sales of both
printed newspapers and electronic services were up. According to TNS
Gallup, Iltasanomat.fi has been the online service with most visitors
in Finland almost throughout the first half of the year. Visitor
numbers have continued to increase over the summer months, and the
usage of the website has remained at a high level in contrast to
previous years. For example, in week 28 the Iltasanomat.fi website
was accessed by 1.2 (0.8) million unique visitors.
Net sales from other publishing amounted to EUR 45.7 (49.0) million.
The decrease was affected by the discontinuation of the printed
version of Taloussanomat and the decline of free sheet advertising.
The regional dailies of Sanoma Lehtimedia slightly increased their
advertising and circulation sales. Sanoma Digital, a new company
focusing on online business, continued on the investment trail by
acquiring a majority holding in Suorakanava Oy, a company providing
specialised online services in the fields of construction, interior
decoration and gardening. The company's best known website,
Rakentaja.fi, is the leading Finnish online service for home builders
and remodelers. Sanoma Digital also launched a new online service,
called Työtori, designed to connect households in need of help with
entrepreneurs providing domestic work, and expanded the price
comparison service Hintaseuranta.fi to include new product groups.
Net sales from other operations, mainly comprising internal services,
were EUR 76.6 (76.4) million.
The operating profit of Sanoma decreased by 11.4% to EUR 32.6 (36.8)
million. The decrease in profit was mainly due to the decline in the
tabloid market that reduced the operating profit of the Ilta-Sanomat
business unit. The operating profit of Helsingin Sanomat and other
publishing was also slightly lower. This was, for example, due to
investments in the development of digital business and in the sales.
Earnings from other operations were up. In April-June, the operating
profit totalled EUR 14.7 (17.3) million.
The strongest growth at Sanoma comes from digital businesses, while
the printed media will also be strongly developed. The rate of growth
in media advertising is expected to be more moderate than in 2007.
In 2008, Sanoma's net sales and operating profit excluding major
non-recurring capital gains are expected to remain at the previous
year's level.
SanomaWSOY Education and Books
SanomaWSOY Education and Books is a significant European educational
publisher offering a broad range of printed and digital educational
materials and services to support the learning processes of children
and young people. The Division, operating in eight countries, is also
Finland's leading book publisher and has growing business information
and service operations.
- Educational publishing operations grew, largely due to the Nowa
Era acquisition.
- Language services continued to grow.
- Sales growth was slowed down in the second quarter because of
timing differences in deliveries of educational materials compared to
the previous year.
KEY INDICATORS 4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
EUR million 2008 2007 % 2008 2007 % 2007
Net sales 110.5 104.8 5.4 168.8 157.0 7.5 322.5
Operating profit 26.4 29.8 -11.5 22.0 23.3 -5.4 44.5
% of net sales 23.9 28.4 13.0 14.8 13.8
Operating profit
excluding
major non-recurring
capital gains 26.4 29.8 -11.5 22.0 23.3 -5.4 44.5
% of net sales 23.9 28.4 13.0 14.8 13.8
Balance sheet total 689.7 638.2 8.1 585.0
Capital expenditure 7.4 2.9 7.7
Average number of
employees 3,094 2,748 12.6 2,769
Average number of
employees (full-time
equivalents) 2,618 2,333 12.2 2,345
OPERATIONAL INDICATORS 1-6/2008 1-6/2007
EDUCATIONAL PUBLISHING
Number of new titles published, books 765 620
Number of new titles published, electronic products 202 171
PUBLISHING
Number of new titles published, books 253 250
Number of new titles published, electronic products 75 30
Books sold, millions 12.9 10.5
SanomaWSOY Education and Books' net sales in January-June increased
by 7.5% and totalled EUR 168.8 (157.0) million. Most growth came from
new operations in educational publishing. Net sales adjusted for
changes in the Group structure decreased by 2.4%. A total of 57%
(56%) of the Division's net sales came from outside of Finland. In
April-June, the Division's net sales grew by 5.4% to EUR 110.5
(104.8) million.
Educational publishing's net sales increased to EUR 108.4 (98.4)
million. Most of the growth came from the new Polish operations.
Sales in the Netherlands in some categories are shifting to the
latter part of the year due to uncertainties in the market resulting
from changes in governmental funding and procurement model of
educational materials. Net sales increased in all other countries and
particularly in Belgium, where sales have been more focused on the
second quarter than in the comparable period. Earlier deliveries
increased sales also in Hungary. The acquisition of the Polish
educational publisher Nowa Era was concluded at the end of first
quarter. Young Digital Planet, the e-learning unit in Poland has had
a slow start to the year and its net sales were below the comparable
period due to delays in governmental tenders.
Net sales in publishing increased to EUR 48.3 (47.1) million with
growth coming from language services. General literature was slightly
below the previous year's level. Retail sales in Finland grew, but
direct sales continued to remain under pressure. Language services,
one of the international growth areas of the Division, are clearly
growing. In part, the increase came from new operations: AAC Global
expanded its operations in March 2007 with the acquisition of
Translation Services Noodi in Finland and in June 2007 the operations
of the language service company The Works, Sweden.
Net sales from other operations, mainly printing, totalled EUR 23.3
(22.9) million.
The Division's operating profit decreased by 5.4% and was EUR 22.0
(23.3) million. The result was slightly behind the comparable period
in educational publishing, where the sales in the Dutch unit
decreased. Operating profit grew in publishing due to the good
development of language services and retail sales of general
literature. Results in other operations grew slightly. The Division's
operating profit in April-June decreased due to timing differences in
educational publishing and amounted to EUR 26.4 (29.8) million.
The Division's business is very seasonal. Profit in educational
publishing is mainly accrued in the second and third quarters. The
acquisition of Nowa Era adds to growth in the educational publishing
business and therefore strengthens seasonality in the Division.
SanomaWSOY Education and Books continues to focus on further
internationalising its educational business, expanding language
services and maintaining market leadership in Finnish general
literature publishing.
In 2008, net sales of SanomaWSOY Education and Books are estimated to
increase. Operating profit excluding major non-recurring capital
gains, Nowa Era included, is expected to clearly improve.
SWelcom
SWelcom offers consumers entertaining experiences for television,
radio, online and mobile devices. The television channel Nelonen is
Finland's third largest medium in terms of advertising sales. Welho
is the country's largest cable television company and a major
provider of broadband services.
- The viewing shares of television channels increased significantly.
- Nelonen was the first TV channel in Finland to launch a free HDTV
(High-Definition Television) service on Welho's cable network.
KEY INDICATORS 4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
EUR million 2008 2007 % 2008 2007 % 2007
Net sales 40.9 35.4 15.5 81.4 70.6 15.3 146.0
Operating profit 6.3 4.0 59.2 10.4 6.9 50.6 15.8
% of net sales 15.5 11.3 12.8 9.8 10.8
Operating profit excluding
major non-recurring
capital gains 6.3 4.0 59.2 10.4 6.9 50.6 15.8
% of net sales 15.5 11.3 12.8 9.8 10.8
Balance sheet total 167.0 164.5 1.6 168.2
Capital expenditure 7.5 7.4 0.3 14.8
Average number of
employees 517 473 9.3 501
Average number of
employees (full-time
equivalents) 471 438 7.6 457
OPERATIONAL INDICATORS 1-6/2008 1-6/2007
TV channels' share of Finnish TV advertising 29.8% 29.5%
TV channels' daily reach 46% 41%
TV channels' national commercial viewing share 30.3% 23.7%
TV channels' national viewing share 14.6% 11.3%
Number of connected households, thousands (30 June) 321 312
Number of pay TV subscriptions, thousands (30 June) 103 70
Number of broadband internet connections, thousands 102 93
(30 June)
In January-June, SWelcom's net sales increased by 15.3% to EUR 81.4
(70.6) million. This clear increase in net sales was brought about in
particular by the new TV and radio channels and the growth of Welho.
Net sales adjusted for changes in Group structure increased by 9.4%.
Advertising sales accounted for 51% (57%) of SWelcom's net sales. In
April-June, the operating profit increased by 15.5% to EUR 40.9
(35.4) million.
Due to the new channels, broadcast operations increased its net sales
to EUR 47.1 (40.4) million in January-June. In January-June, TV
advertising in Finland grew by 6% according to TNS Gallup Adex. The
combined share of the television channels of Nelonen Media of all
television advertising was 29.8% (29.5%). Nelonen Media has invested
heavily in its programming. The TV channels significantly increased
their shares of viewing figures, and in April their share of all TV
viewing rose to 15.8%. JIM, the channel launched in February 2007,
has constantly increased its share of viewers, and had a commercial
viewing share of 6.5% in June.
In June, Nelonen was the first TV channel in Finland to launch a free
HDTV service on Welho's cable network. The launch of Nelonen HD
allows viewers to enjoy programming in higher definition and quality.
Nelonen Media's pay TV operations grew and in May, KinoTV already had
over 100,000 and Urheilu+kanava over 300,000 subscribers.
According to the Association of Finnish Broadcasters, national radio
advertising grew by 9% in January-June and Nelonen Media strengthened
its market share to 12%. The audience reaches of Radio Rock and Radio
Aalto remained at a good level in the first half of 2008.
Welho's net sales increased strongly due to strong growth in pay TV,
broadband subscriptions and the sale of digital set-top boxes. Welho
expanded its line up of HD channels with the launch of Eurosport HD
in May. Further, Welho increased the speeds of its most popular
broadband products.
The usage of SWelcom's online casual gaming sites increased. The
Pelikone.fi online game portal launched in August 2007 has become the
most popular free online casual gaming service in Finland. A new
casual game website, Taukopelit.fi, targeting especially women was
launched in June.
SWelcom's operating profit increased by 50.6% in January-June,
totalling EUR 10.4 (6.9) million. This significant improvement was
driven by improved profitability of broadcasting operations and the
positive development of Welho. In April-June, the operating profit
increased by 59.2% to EUR 6.3 (4.0) million.
In line with its strategy, SWelcom focuses on its core businesses of
television and radio, broadband services and consumer-oriented
entertainment services. In May, SWelcom divested its holding in
Maxisat. The deal will have no significant impact on the Division's
earnings for 2008.
SWelcom continues to develop its digital content and media solutions
business, invest resources in the development of its online community
services and in its viewing and listening shares.
In 2008, SWelcom's net sales are estimated to increase and operating
profit excluding major non-recurring capital gains is expected to
improve clearly.
Rautakirja
Rautakirja is a retail specialist with operations in seven countries
and whose business is based on a thorough understanding of customers'
needs and on strong concepts. Rautakirja's success is built on over
200 million annual sales contacts, in which the consumer is present
at a kiosk, bookstore or movie theatre. Rautakirja's press
distribution operations serve publishers and retailers.
- Net sales grew in all businesses.
- Kiosk operations in Finland increased, and the integration of the
Russian kiosk chain is progressing smoothly.
- Great movies in the early summer further increased the number of
movie-goers.
KEY INDICATORS 4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
EUR million 2008 2007 % 2008 2007 % 2007
Net sales 203.2 201.3 0.9 405.8 393.7 3.1 849.3
Operating profit 7.4 10.6 -30.0 17.3 19.5 -11.3 55.6
% of net sales 3.6 5.2 4.3 5.0 6.5
Operating profit
excluding
major non-recurring
capital gains 7.4 10.6 -30.0 17.3 19.5 -11.3 50.7
% of net sales 3.6 5.2 4.3 5.0 6.0
Balance sheet total 552.3 548.1 0.8 565.0
Capital expenditure 12.4 11.9 4.2 28.4
Average number of
employees 8,244 7,750 6.4 7,886
Average number of
employees (full-time
equivalents) 6,527 6,247 4.5 6,234
OPERATIONAL INDICATORS 1-6/2008 1-6/2007
Customer volume in kiosk operations, thousands 104,435 103,932
Customer volume in bookstores, thousands 3,218 3,139
Customer volume in movie theatres, thousands 4,799 4,527
Number of copies sold (press distribution), 194,982 191,794
thousands
In January-June, Rautakirja's net sales grew by 3.1%, totalling EUR
405.8 (393.7) million. Net sales increased particularly in
bookstores, movie theatres and kiosk operations. Net sales adjusted
for changes in the Group structure increased by 4.3%. Of Rautakirja's
net sales, 34% (34%) came from outside Finland. In April-June, net
sales increased by 0.9% to EUR 203.2 (201.3) million. Net sales
growth in the second quarter was adversely affected by kiosk
operations, with sales of some product groups lagging behind the
comparable period.
Net sales from kiosk operations increased to EUR 197.1 (186.2)
million. The sales of R-kiosks in Finland increased. The summer
product range of the kiosks also included fishing permits. In
addition to traditional kiosk products, various collector cards sold
well. Despite the general economic uncertainty in the Baltic
countries, net sales from kiosk operations increased in these
markets. In Russia, where operations were launched in June 2007, net
sales from kiosk operations developed according to plan. The
integration of a kiosk company KP Roznitsa acquired at the end of
March is under way. KP Roznitsa has 89 kiosks in the Rostov region in
Southern Russia, and its net sales in 2007 amounted to some EUR 2
million.
Press distribution increased its net sales to EUR 118.4 (117.2)
million. Net sales were up in Finland, where the sales of the
point-of-sale (POS) marketing company Printcenter acquired in
February 2007 developed favourably. In Finland, the newsstand sales
of tabloids fell in the first half of the year, while magazine sales
were up slightly. Net sales also increased in the Baltic countries
and Russia. The competitive situation in Romania has become
increasingly tough; despite this, Hiparion Distribution has seen its
net sales grow. In the Netherlands, the net sales of Aldipress
decreased as a result of smaller distribution volumes. A programme
aimed at rationalising operations is in progress at Aldipress and as
a result, the company's workforce will be reduced by about one-third
during 2008.
The net sales of bookstores grew to EUR 55.0 (52.7) million. Net
sales increased both in Finland and Estonia. In Finland, growth was
generated by the successful January book sale, the final
Finnish-language volume of the Harry Potter series that hit the
stores in March, and the strengthening of non-fiction sales in late
spring. But on the whole, the development of the Finnish book market
has been weak. In Estonia, net sales were boosted, for example, by
the new stores opened in 2007. In May, Suomalainen Kirjakauppa sold
its magazine subscription business to Lehtimarket. From now on,
Suomalainen Kirjakauppa is concentrating on its core businesses of
book trade and online book trade. In 2007, subscription business
recorded net sales of about EUR 10 million and employed 16 people.
The deal will have no significant impact on the Division's earnings
for 2008.
Net sales from the entertainment business amounted to EUR 43.8 (45.4)
million. Net sales from movie theatre operations increased in
Finland, Lithuania and Latvia. Net sales of the entertainment
business for the comparable period included net sales of the
multi-purpose arena in Hamburg divested in October 2007. Movie
admissions continued to grow. In addition to the good selection of
movies, the growth has been particularly boosted by new movie
theatres. In April 2007, the company opened a new multiplex in
Kaunas, Lithuania, followed by a multiplex in Lahti, Finland, in
November. New multiplex theatres will be opened during autumn 2008 in
Vantaa, Finland, and Panevezys, Lithuania. Video rental operations
expanded in April with the acquisition of a chain of 11 video rental
stores in Lithuania. In May, the Finnish theatres pioneered the
digital age of cinema by bringing alternative entertainment in the
form of Formula 1 World Championships live to the big screen.
In January-June, Rautakirja's operating profit decreased by 11.3% to
EUR 17.3 (19.5) million. Operating profit from kiosk operations
decreased due to the increased level of costs. The operating profit
of press distribution decreased as a result of the decreased tabloid
volumes in Finland and magazine volumes in the Netherlands. Profits
from kiosk operations and press distribution were also affected by
investments in Russia. The results of the bookstores were at the
comparable period's level. The entertainment business improved its
operating profit. In April-June, Rautakirja's operating profit was
EUR 7.4 (10.6) million. The result of the second quarter was clearly
affected by the rapid increase in the level of costs, such as
transportation and wages, across many of the businesses. Rautakirja
has initiated a number of cost-saving measures throughout its
businesses and in all of its operating countries.
In addition to the home markets of Finland and the Baltic countries,
Rautakirja's expansion and development efforts will also focus on the
emerging economies of Russia and Central Eastern Europe. At the
moment, the company is investing in kiosks and press distribution in
Russia and Romania. Rautakirja's goal is to achieve a strong position
in these countries and participate actively in the development of the
local newspaper and magazine markets.
In 2008, Rautakirja's net sales are estimated to grow. Operating
profit excluding major non-recurring capital gains is expected to
improve.
Helsinki
Board of Directors
SanomaWSOY Corporation
Accounting policies
The SanomaWSOY Group has prepared its Interim Report in accordance
with IAS 34'Interim Financial Reporting' while adhering to related
IFRS standards and interpretations applicable within the EU on 1
January 2008. SanomaWSOY's interim financial report has been prepared
in accordance with the accounting policies described in the Group's
Consolidated Financial Statements for 2007. This Interim Report is
unaudited. The definitions of key indicators have been refined. The
definitions are presented on the Group's website at
www.sanomawsoy.com.
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED INCOME STATEMENT
EUR million 1-6/2008 1-6/2007 Change, % 1-12/2007
NET SALES 1,452.8 1,408.0 3.2 2,926.3
Other operating income 55.8 62.3 -10.4 95.2
Materials and services 642.8 622.0 3.3 1,308.9
Personnel expenses 349.8 320.5 9.1 646.5
Other operating expenses 272.5 268.9 1.4 572.7
Depreciation and impairment 72.4 72.0 0.6 149.7
losses
OPERATING PROFIT 171.2 186.9 -8.4 343.8
Share in result of associated 4.6 4.5 2.2 12.4
companies
Financial income 6.6 4.7 42.1 9.2
Financial expenses 27.2 21.3 27.5 44.9
RESULT BEFORE TAXES 155.2 174.8 -11.2 320.4
Income taxes -35.5 -44.3 -19.9 -74.4
RESULT FOR THE PERIOD 119.7 130.4 -8.2 246.1
Attributable to:
Equity holders of the Parent 118.9 131.3 -9.4 242.8
Company
Minority interest 0.7 -0.9 3.2
Earnings per share for result attributable to
the equity holders of the Parent Company:
Earnings per share, EUR 0.74 0.80 -7.4 1.47
Diluted earnings per share, EUR 0.73 0.79 -6.9 1.46
CONSOLIDATED BALANCE SHEET
EUR million 30.6.2008 30.6.2007 Change, % 31.12.2007
ASSETS
NON-CURRENT ASSETS
Tangible assets 506.8 566.8 -10.6 498.7
Investment property 9.8 9.5 2.4 9.5
Goodwill 1,504.1 1,414.6 6.3 1,432.8
Other intangible assets 380.1 380.1 0.0 379.6
Interest in associated 70.4 70.0 0.5 75.2
companies
Available-for-sale financial 21.4 16.3 31.3 15.9
assets
Deferred tax receivables 45.7 53.5 -14.6 42.4
Trade and other receivables 42.2 38.4 9.8 37.9
NON-CURRENT ASSETS, TOTAL 2,580.5 2,549.4 1.2 2,492.1
CURRENT ASSETS
Inventories 196.1 170.9 14.8 170.7
Income tax receivables 42.2 22.4 88.6 25.9
Trade and other receivables 459.2 424.0 8.3 415.4
Available-for-sale financial 1.1 0.0 0.1
assets
Cash and cash equivalents 90.2 89.9 0.3 88.1
CURRENT ASSETS, TOTAL 788.7 707.2 11.5 700.2
ASSETS, TOTAL 3,369.2 3,256.6 3.5 3,192.3
EQUITY AND LIABILITIES
EQUITY
Equity attributable to the equity holders of the Parent Company
Share capital 71.3 71.1 0.3 71.3
Treasury shares -31.2 -51.6
Other equity 1,236.0 1,216.7 1.6 1,326.2
1,276.1 1,287.8 -0.9 1,345.9
Minority interest 21.0 13.8 51.8 18.3
EQUITY, TOTAL 1,297.1 1,301.6 -0.3 1,364.2
NON-CURRENT LIABILITIES
Deferred tax liabilities 106.1 105.0 1.0 103.9
Pension obligations 43.7 55.2 -20.9 45.2
Provisions 8.4 8.0 6.0 8.8
Interest-bearing liabilities 448.7 40.9 328.1
Trade and other payables 28.3 34.5 -17.8 28.3
CURRENT LIABILITIES
Provisions 9.3 9.4 -0.8 7.8
Interest-bearing liabilities 699.8 979.8 -28.6 553.4
Income tax liabilities 29.2 27.0 8.1 8.4
Trade and other payables 698.6 695.2 0.5 744.3
LIABILITIES, TOTAL 2,072.1 1,955.0 6.0 1,828.1
EQUITY AND LIABILITIES, 3,369.2 3,256.6 3.5 3,192.3
TOTAL
CHANGES IN CONSOLIDATED EQUITY
EUR million Equity attributable to the equity
holders
of the Parent Company
Share Treasury Other Total Minority Equity,
capital shares equity interest total
EQUITY AT 1 JAN 70.9 1,234.8 1,305.7 17.0 1,322.7
2007
Change in 1.6 1.6 0.2 1.8
translation
differences
Other items 0.0 -0.2 -0.2 -0.2
Items recognised 0.0 1.4 1.4 0.2 1.6
directly in
equity, total
Result for the 131.3 131.3 -0.9 130.4
period
TOTAL RECOGNISED
INCOME
AND EXPENSES 0.0 132.8 132.8 -0.7 132.0
Conversion of 0.0 1.7 1.7 0.0 1.7
capital notes
Use of share 0.1 1.4 1.4 0.0 1.4
options
Expense 0.0 2.8 2.8 0.0 2.8
recognition of
options granted
Dividends paid -156.7 -156.7 -2.1 -158.9
Change in minority -0.2 -0.2
interests
EQUITY AT 30 JUNE 71.1 1,216.7 1,287.8 13.8 1,301.6
2007
EQUITY AT 1 JAN 71.3 -51.6 1,326.2 1,345.9 18.3 1,364.2
2008
Change in 13.8 13.8 0.6 14.5
translation
differences
Other items 0.0 0.0 0.0 0.0
Items recognised 0.0 13.8 13.8 0.6 14.5
directly in
equity, total
Result for the 118.9 118.9 0.7 119.7
period
TOTAL RECOGNISED
INCOME
AND EXPENSES 0.0 132.8 132.8 1.4 134.1
Acquisition of -41.2 0.0 -41.2 -41.2
treasury shares
Cancellation of 61.6 -61.6 0.0 0.0 0.0
treasury shares
Use of share 0.0 0.0 0.0 0.0 0.0
options
Expense 0.0 2.6 2.6 0.0 2.6
recognition of
options granted
Dividends paid -160.8 -160.8 -2.2 -163.0
Change in minority -3.1 -3.1 3.5 0.4
interests
EQUITY AT 30 JUNE 71.3 -31.2 1,236.0 1,276.1 21.0 1,297.1
2008
CONSOLIDATED CASH FLOW STATEMENT
EUR million 1-6/2008 1-6/2007 Change, % 1-12/2007
OPERATIONS
Result for the period 119.7 130.4 -8.2 246.1
Adjustments 77.7 71.3 9.0 161.5
Change in working capital -97.8 -87.2 12.2 -45.8
Financial items and taxes -62.3 -72.6 -14.3 -133.8
CASH FLOW FROM OPERATIONS 37.3 41.9 -11.0 227.9
INVESTMENTS
Acquisition of tangible and -49.9 -42.3 17.9 -88.6
intangible assets
Operations acquired -75.4 -29.7 -49.8
Sales of tangible and 9.7 20.2 -51.8 23.8
intangible assets
Operations sold 39.6 21.1 87.6 85.0
Loans granted -20.2 -5.7 -4.4
Repayments of loan receivables 3.3 3.6 -7.6 3.9
Other cash flow from 7.4 8.6 -14.3 13.0
investments
CASH FLOW FROM INVESTMENTS -85.5 -24.2 -17.2
CASH FLOW BEFORE FINANCING -48.3 17.6 210.7
FINANCING
Proceeds from share 0.0 1.4 -96.8 5.2
subscriptions
Change in loans with short 106.9 18.1 101.5
maturity
Drawings of other loans 167.9 152.9 9.8 295.5
Repayments of other loans -6.0 -23.4 -74.1 -403.1
Treasury shares -40.9 0.0 -51.0
Dividends paid -163.0 -158.9 2.6 -158.8
Other cash flow from financing -1.8 -2.2 -18.4 -3.0
CASH FLOW FROM FINANCING 63.0 -12.0 -213.7
CHANGE IN CASH AND CASH
EQUIVALENTS
ACCORDING TO CASH FLOW 14.7 5.6 -3.0
STATEMENT
Effect of exchange rate
differences on cash and
cash equivalents -0.5 0.4 -1.7
NET CHANGE IN CASH AND CASH
EQUIVALENTS 14.2 6.0 -4.7
Cash and cash equivalents at 1 72.4 77.1 -6.1 77.1
Jan
Cash and cash equivalents at 30 86.6 83.0 4.3 72.4
June / 31 Dec
Cash and cash equivalents in cash flow statement include cash and
cash equivalents less bank overdrafts.
NET SALES BY BUSINESS
EUR million 1-3/ 4-6/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2008 2008 2007 2007 2007 2007 2007
SANOMA MAGAZINES
Sanoma Magazines 111.7 135.2 119.8 136.6 129.2 154.2 539.8
Netherlands
Sanoma Magazines 70.1 76.8 65.8 68.5 66.0 83.2 283.4
International
Sanoma Magazines Belgium 54.2 55.5 52.5 55.8 48.1 60.1 216.6
Sanoma Magazines Finland 50.7 51.9 50.1 48.6 48.1 56.0 202.8
Eliminations -1.3 -0.9 -1.2 -1.2 -1.0 -1.2 -4.6
TOTAL 285.5 318.5 287.1 308.2 290.4 352.4 1,238.1
SANOMA
Helsingin Sanomat 74.1 71.2 72.3 68.0 66.2 72.4 278.9
Ilta-Sanomat 22.5 24.1 23.6 24.6 22.9 23.6 94.8
Other publishing 22.4 23.3 24.3 24.7 22.6 25.9 97.5
Other businesses 38.5 38.1 38.5 38.0 37.0 39.1 152.6
Eliminations -36.6 -35.6 -36.4 -35.5 -34.8 -36.4 -143.0
TOTAL 120.8 121.1 122.4 119.8 114.0 124.6 480.8
SANOMAWSOY EDUCATION AND BOOKS
Educational publishing 24.6 83.9 20.0 78.5 68.7 30.6 197.7
Publishing 27.5 20.8 26.3 20.8 20.7 29.6 97.3
Other businesses 12.0 11.3 12.0 11.0 14.2 14.0 51.1
Eliminations -5.7 -5.5 -6.0 -5.4 -6.5 -5.7 -23.7
TOTAL 58.3 110.5 52.2 104.8 97.0 68.5 322.5
SWELCOM
TV and radio 22.6 24.5 20.1 20.3 16.3 26.5 83.2
Other businesses 18.0 16.7 15.4 15.3 16.7 16.2 63.6
Eliminations -0.1 -0.3 -0.3 -0.2 -0.2 -0.2 -0.8
TOTAL 40.5 40.9 35.2 35.4 32.8 42.5 146.0
RAUTAKIRJA
Kiosk operations 94.6 102.5 86.9 99.3 95.5 103.8 385.5
Press distribution 58.2 60.2 56.2 61.0 61.8 66.5 245.5
Bookstores 31.0 24.0 29.6 23.1 37.7 50.0 140.3
Entertainment 24.4 19.4 23.5 22.0 24.0 26.6 95.9
Eliminations -5.5 -3.0 -3.9 -4.0 -4.3 -5.8 -18.0
TOTAL 202.7 203.2 192.4 201.3 214.5 241.1 849.3
Other companies and -24.8 -24.4 -25.6 -25.1 -30.1 -29.4 -110.3
eliminations
TOTAL 683.1 769.8 663.7 744.4 718.6 799.6 2,926.3
OPERATING PROFIT BY DIVISION
EUR million 1-3/ 4-6/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2008 2008 2007 2007 2007 2007 2007
Sanoma Magazines 48.2 46.6 32.1 61.3 30.4 37.2 160.9
Sanoma 17.9 14.7 19.6 17.3 17.2 13.6 67.6
SanomaWSOY Education
and Books -4.3 26.4 -6.5 29.8 27.9 -6.6 44.5
SWelcom 4.0 6.3 2.9 4.0 3.5 5.4 15.8
Rautakirja 9.9 7.4 9.0 10.6 13.0 23.1 55.6
Other companies and -3.0 -2.9 -3.1 10.1 -3.4 -4.3 -0.7
eliminations
TOTAL 72.7 98.5 54.0 133.0 88.5 68.3 343.8
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 30.6.2008 30.6.2007 Change, % 31.12.2007
Carrying amount at 1 Jan 498.7 572.3 -12.9 572.3
Increases 37.9 29.3 29.2 63.4
Acquisition of operations 6.5 0.7 1.2
Decreases -3.7 -1.7 112.1 -4.3
Disposals of operations -0.2 -0.8 -74.3 -66.9
Depreciation for the period -32.0 -32.7 -2.2 -65.7
Impairment losses for the -0.7 0.0 -0.3
period
Exchange rate differences 0.3 -0.3 -1.1
and other changes
Carrying amount at 30 June / 506.8 566.8 -10.6 498.7
31 Dec
The commitments for acquisitions of tangible assets were EUR 3.1
million (2007: EUR 6.3 million).
CONTINGENT LIABILITIES
EUR million 30.6.2008 30.6.2007 Change, % 31.12.2007
CONTINGENCIES FOR OWN COMMITMENTS
Mortgages 23.2 9.8 20.2
Pledges 5.8 18.7 -68.9 5.8
Other items 0.4 0.4 0.5 0.4
TOTAL 29.4 28.9 2.0 26.4
CONTINGENCIES INCURRED ON BEHALF OF ASSOCIATED COMPANIES
Guarantees 10.5 7.9 33.1 7.9
TOTAL 10.5 7.9 33.1 7.9
CONTINGENCIES INCURRED ON BEHALF OF OTHER COMPANIES
Guarantees 0.2 0.1 25.5 0.1
TOTAL 0.2 0.1 25.5 0.1
CONTINGENCIES INCURRED ON BEHALF OF OTHER COMPANIES
Operating lease liabilities 261.1 256.7 1.7 275.8
Royalties 23.4 22.5 3.7 27.2
Other 38.2 49.5 -22.9 42.9
TOTAL 322.7 328.7 -1.8 345.9
CONTINGENT LIABILITIES, 362.8 365.7 -0.8 380.4
TOTAL
CONSOLIDATED INCOME STATEMENT BY QUARTER
EUR million 1-3/ 4-6/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2008 2008 2007 2007 2007 2007 2007
NET SALES 683.1 769.8 663.7 744.4 718.6 799.6 2,926.3
Other operating income 38.1 17.7 13.3 49.0 12.4 20.6 95.2
Materials and services 309.4 333.4 294.9 327.1 323.3 363.5 1,308.9
Personnel expenses 172.2 177.5 158.4 162.2 151.8 174.2 646.5
Other operating expenses 131.1 141.5 135.0 133.9 130.3 173.5 572.7
Depreciation and
impairment losses 35.8 36.6 34.6 37.3 37.1 40.7 149.7
OPERATING PROFIT 72.7 98.5 54.0 133.0 88.5 68.3 343.8
Share in result of
associated companies 3.0 1.6 1.8 2.7 2.0 5.9 12.4
Financial income 3.5 3.1 4.8 -0.2 2.5 2.1 9.2
Financial expenses 12.7 14.5 11.9 9.4 11.2 12.4 44.9
RESULT BEFORE TAXES 66.5 88.7 48.6 126.1 81.9 63.8 320.4
Income taxes -12.2 -23.4 -13.7 -30.6 -20.3 -9.7 -74.4
RESULT FOR THE PERIOD 54.4 65.3 34.9 95.5 61.5 54.1 246.1
Attributable to:
Equity holders of
the Parent Company 54.5 64.4 35.5 95.8 59.7 51.8 242.8
Minority interest -0.2 0.9 -0.6 -0.3 1.8 2.3 3.2
Press conference at Sanomatalo
Press and analyst meeting in Finnish will be held by Mr Hannu
Syrjänen, President and CEO of SanomaWSOY at 1:30 pm (Finnish time)
at Sanomatalo, Töölönlahdenkatu 2, Helsinki. To join the meeting,
please register on the Group's website at www.sanomawsoy.com or by
email katariina.hed@sanomawsoy.fi by 30 July at the latest.
The conference call in English for analysts and investors will be
arranged at 4 pm (Finnish time). Mr Hannu Syrjänen will present the
result. To join the conference, please dial +44 20 3003 2666 (Europe)
or +1 866 966 5335 (US). The event can also be listened on web at
www.sanomawsoy.com either live or later on as on demand.
The presentation material of the press and analyst meeting as well as
the slides used in the conference call will be available on
SanomaWSOY's website after the press and analyst meeting has started.
Publishing of 3Q08 Interim Report
SanomaWSOY will publish its Interim Report January-September on 31
October 2008 approximately at 8:30 am Finnish time.
SANOMAWSOY CORPORATION
Matti Salmi
Senior Vice President
Finance and Administration
Additional information: SanomaWSOY's Group Communications, tel. +385
105 19 5062 or ir@sanomawsoy.fi
www.sanomawsoy.com
www.sanomawsoy.com/Investors
SanomaWSOY provides information, experiences, education and
entertainment to millions of people. Quality content, products and
services that are creative and customer centric, and efficient
distribution ensure satisfaction for our customers in the more than
20 European countries we operate in. In 2007, SanomaWSOY's net sales
totalled EUR 2.9 billion and our EBIT was EUR 344 million. The media
group employs nearly 20,000 people.
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