2011-02-09 07:30:00 CET
2011-02-09 07:31:19 CET
REGULATED INFORMATION
Sanoma Oyj - Financial Statement Release
Sanoma's Financial Statement Release 2010: Strong base, focus on new business opportunities
Fourth quarter
- Net sales amounted to EUR 717.3 million (2009: EUR 733.6 million). Adjusted
for changes in the Group structure, Sanoma's net sales grew by 1.0%.
- Operating profit excluding non-recurring items was EUR 34.5 million (2009: EUR
49.3 million). The decrease was due to divestment of operations as well as
increased marketing efforts and development projects.
- Non-recurring items totalled EUR -7.2 million (2009: EUR -17.0 million) and
were related to restructurings and write-downs.
- Earnings per share were EUR -0.01 (2009: EUR 0.04).
2010
- Sanoma Group's net sales were stable at EUR 2,761.2 million (2009: EUR
2,767.9 million).
- Operating profit excluding non-recurring items improved by 7% and totalled
EUR 245.4 million (2009: EUR 229.5 million).
- Cash flow from operations amounted to EUR 273.8 million (2009: EUR 241.8
million).
- Earnings per share were EUR 1.85 (2009: EUR 0.66).
- The proposed dividend is EUR 1.10 per share
- In 2011, Sanoma expects its net sales and operating profit excluding the non-
recurring items to be at the previous year's level.
KEY INDICATORS 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2010 2009 % 2010 2009 %
Net sales 717.3 733.6 -2.2 2,761.2 2,767.9 -0.2
Operating profit excluding non- 34.5 49.3 -29.9 245.4 229.5 6.9
recurring items
% of net sales 4.8 6.7 8.9 8.3
Operating profit 27.4 32.3 -15.3 392.7 195.4 101.0
Result for the period -1.0 8.6 -111.5 297.3 107.1 177.6
Capital expenditure 85.7 83.4 2.8
% of net sales 3.1 3.0
Return on investment (ROI), % 16.2 8.9
Equity ratio, % 45.7 41.4
Net gearing, % 63.8 79.4
Number of employees at the end of the period (FTE) 15,405 16,723 -7.9
Average number of employees (FTE) 16,016 17,343 -7.6
Earnings/share, EUR -0.01 0.04 -113.7 1.85 0.66 182.3
Cash flow from operations/share, EUR 0.62 0.76 -18.8 1.69 1.50 12.6
Equity/share, EUR 8.42 7.36 14.4
Dividend/share, EUR * 1.10 0.80 37.5
Dividend/result, % * 59.4 122.0
Market capitalisation 2,628.0 2,536.5 3.6
* Year 2010 proposal of the Board of Directors
Harri-Pekka Kaukonen, President and CEO"In 2010, Sanoma made a good operational result, thanks to efficiency measures
initiated in 2009 as well as the market recovery in Western Europe and Russia.
In 2011, we want to improve our strong market positions further. Therefore we
increased marketing efforts in the fourth quarter.
The good operational result in 2010, our strong cash flow and balance sheet are
good starting points in developing our businesses further. Convergence in the
media industry proceeds at an increasing pace and Sanoma is ready to exploit the
opportunities arising from the new media world. Supporting and encouraging
innovation will play an essential role in developing our businesses.
We start the year with a new business structure: the Sanoma Media division was
formed to enable us to better leverage our television know-how and assets in
Finland also internationally, as well as further strengthen Sanoma's market
positions in Europe. This arrangement is aligned with Sanoma's strategy to
restructure its business operations according to changing customer needs,
develop synergies across the Group and strengthen its digital operations.
In 2011, the focus in developing our operations will be in new structures
enabling better co-operation, emphasising innovation and scaling up our digital
efforts. These are examples of ways we use to look for organic growth. I'm
looking forward to involving our customers, key partners and employees in
building an even stronger Sanoma."
Outlook for 2011
In 2011, Sanoma's net sales and operating profit excluding non-recurring items
are expected to be at the previous year's level. In 2010, operating profit
excluding non-recurring items was EUR 245.4 million.
This outlook is impacted by the several divestments made in 2010. The operating
profit excluding non-recurring items accumulated from the divested businesses in
2010 amounted to some EUR 10 million. The most significant divestments were
those of Welho and Humo.
Sanoma's net sales and operating profit in 2011 are affected by the development
of advertising and private consumption in the Group's countries of operation.
The current outlook is based on the assumption that the advertising markets in
the Group's main operating countries will grow somewhat in 2011.
Net sales
Fourth quarter
In the fourth quarter of 2010, Sanoma's net sales decreased by 2% and amounted
to EUR 717.3 million (2009: EUR 733.6 million). Net sales were at the comparable
quarter's level in Magazines, News and Learning & Literature but decreased in
Trade. In Entertainment, cable TV and broadband operations were divested earlier
in the year, which affected the net sales. Currency translations did not have
material effect on the fourth quarter sales. Adjusted for changes in the Group
structure, net sales grew by 1.0% in the fourth quarter.
The growth of advertising sales continued: Sanoma's advertising sales grew by
11% in the fourth quarter and accounted for 26% (2009: 23%) of the total net
sales. Online advertising sales increased significantly, by 19%, with the
biggest contributors being Sanoma Magazines Netherlands and Sanoma News.
The circulation sales were slightly below the comparable quarter. The Group's
subscription sales remained stable, but single copy sales decreased slightly in
most of the operating countries.
2010
In January-December, Sanoma's net sales were stable and amounted to
EUR 2,761.2 million (2009: EUR 2,767.9 million; 2008: EUR 3,030.1 million). Net
sales increased in News. Entertainment's net sales were affected by the Welho
divestment. Net sales were stable in other divisions. Currency translations did
not have a material effect on the 2010 net sales.
Advertising sales developed strongly during the year and grew by 8%. However,
the advertising sales were still not at the peak levels of 2008. Advertising
sales represented 23% (2009: 21%) of the Group's net sales.
Sanoma has a target to double its consumer online sales, consisting mostly of
online advertising, by 2012 from 2008. In 2010, such sales grew by 14% to EUR
151.0 million (2009: EUR 132.2 million). Total digital sales, which also include
items such as e-learning and the access services, were at the comparable year's
level despite the divestment of broadband operations in June, and amounted to
12% (2009: 12%) of net sales.
The Group's circulation sales were slightly below the comparable year.
Subscription sales remained stable, but single copy sales decreased slightly in
most of the operating countries.
By country, Finland accounted for 51% (2009: 51%) of the cumulative net sales
and the Netherlands 23% (2009: 23%). Net sales from other EU countries totalled
23% (2009: 23%) and non-EU countries accounted for 3% (2009: 3%).
Result
Fourth quarter
Sanoma's operating profit excluding non-recurring items in October-December
decreased by 30% and totalled EUR 34.5 million (2009: EUR 49.3 million). The
result improved significantly in the Sanoma News division. Sanoma Trade's result
was significantly lower mainly due to the decreased customer volumes and lower
margin of the kiosk operations. The divestments of operations as well as
investments in, notably, marketing decreased the result in other divisions. The
solid development during the year enabled increased investments in developing
new operations as well as increased marketing efforts in order to improve market
positions. In the fourth quarter, the marketing expenses were increased by 23%
from the exceptionally low level of the comparable quarter. Operating profit
excluding non-recurring items was 4.8% (2009: 6.7%) of net sales. Currency
translations did not have a material effect on the fourth quarter result.
NON-RECURRING ITEMS 10-12/ 10-12/ 1-12/ 1-12/
EUR million 2010 2009 2010 2009
Magazines
Restructuring expenses (Magazines Netherlands) -3.3 -0.1 -3.3 -4.7
Impairment of intangible assets (Magazines -6.3
Netherlands)
Impairment of intangible assets (Magazines -1.0 -1.0
International)
Gain on sales of Humo 2.6
Restructuring expenses (Magazines Belgium) -10.9 -12.4
News
Gain on sale of Lehtikuva 6.0
Gain on sales of Sanoma Lehtimedia's local papers 2.9 2.9
Expenses related to the efficiency programme -8.4
Entertainment
Gain on sale of Welho -0.4 179.0
Learning & Literature
Loss on sale of Bertmark Norge 0.1 -1.1
Restructuring expenses -0.8 -2.4 -2.3 -3.9
Impairment of a Dutch non-core entity -2.1 -2.1
Expense related to the sale of children's magazines -1.1
Trade
Loss on sale of Russian operations -2.6 -3.6 -3.6 -3.6
Impairment of goodwill in the Dutch press distribution -28.9
Sanoma Corporation
Gains on the sales of real estates 5.4
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NON-RECURRING ITEMS IN OPERATING PROFIT -7.2 -17.0 147.3 -34.1
Impairment of share in associated company Hansaprint -22.1 -22.1
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NON-RECURRING ITEMS IN RESULTS IN ASSOCIATED COMPANIES -22.1 -22.1
Impairment losses on loans and other receivables
and available-for-sale investments -3.7 -8.7
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NON-RECURRING ITEMS IN FINANCIAL ITEMS -3.7 -8.7
Sanoma continued to see the effects of the efficiency improvement measures and
structural changes mostly carried out in 2009. In the fourth quarter, the
Group's total expenses came down by 1%. Paper costs in particular were
significantly below the comparable period. Employee benefit expenses decreased
by 5%. The Group had some 1,300 employees less than at the year-end 2009,
corresponding to a decrease of 8%. From the comparable quarter, the number of
personnel decreased by 7%. A decrease of some 200 employees is due to the Welho
divestment.
In October-December, the operating profit included a total of EUR -7.2 million
(2009: EUR -17.0 million) in non-recurring items, consisting of both capital
gains and non-recurring costs. The non-recurring costs were related to
restructuring of operations in the Netherlands and Russia as well as an
impairment of publishing rights in some Russian titles and an impairment of a
Dutch non-core entity operating in consultancy. In the comparable period, the
non-recurring items consisted of restructuring costs.
2010
In January-December, Sanoma's operating profit excluding non-recurring items
improved by 7% and totalled EUR 245.4 million (2009: EUR 229.5 million).
Operating profit excluding non-recurring items improved in Magazines, News and
Learning & Literature. The result also improved clearly in the Finnish
broadcasting business. Currency translations did not have a material effect on
the 2010 result.
The non-recurring items included in the operating profit amounted to EUR 147.3
million (2009: EUR -34.1 million) and were related to capital gains from
divestments of businesses and real estate, impairment write-downs in several
businesses as well as restructuring costs. Some EUR 135 million of the net
amount of total capital gains and write-downs was non-taxable. In the comparable
year, non-recurring items consisted of expenses related to restructuring of
operations in all divisions.
The clearly improved operational result as well as significant non-recurring
capital gains increased the Group's operating profit in 2010 to EUR 392.7
million (2009: EUR 195.4 million; 2008: EUR 236.3 million) or 14.2% (2009:
7.1%; 2008: 7.8%) of net sales.
Following the divestment of Welho and the related acquisition of 21% in the
Finnish telecommunication group DNA, Sanoma now reports its share of DNA's
result in the associated companies. The most significant associated companies,
in addition to DNA, include Hansaprint, Stratosféra, Jokerit HC and Desert
Fishes. In the fourth quarter, Sanoma made a EUR 22.1 million impairment of the
Hansaprint asset due to significantly deteriorated future prospects of the
printing business. Therefore the profits from associated companies totalled EUR
- 23.9 million (2009: EUR -3.9 million). DNA's net sales and result in 2010
developed according to expectations. At the end of the year, DNA had about a
quarter of the Finnish telecommunications market and over 40% of the cable TV
market.
In January-December, Sanoma's net financial items totalled EUR -12.8 million
(2009: EUR -30.1 million). Lower reference rates than in the comparable year
decreased the Group's interest expenses significantly. The positive effects of
lower interest rates started to even out in the latter half of the year, since
the reference rates came down in the second quarter of 2009. Financial income
amounted to EUR 11.1 million (2009: EUR 22.5 million), of which exchange rate
gains were EUR 7.0 million (2009: EUR 15.0 million). Financial expenses amounted
to EUR 23.8 million (2009: EUR 52.6 million). Interest expenses amounted to EUR
13.3 million (2009: EUR 25.3 million) and exchange rate losses to EUR 8.0
million (2009: EUR 16.2 million).
The result before taxes amounted to EUR 356.0 million (EUR 161.4 million). The
Group's result and the effective tax rate were significantly affected by the
divestment of Welho in June 2010. The effective tax rate in 2010 was 16.5%
(2009: 33.6%). Earnings per share in 2010 were EUR 1.85 (2009: EUR 0.66). The
result for the period totalled EUR 297.3 million (2009: EUR 107.1 million).
Balance sheet and financial position
At the end of December, Sanoma's consolidated balance sheet totalled EUR
3,203.0 million (2009: EUR 3,106.3 million). Efficient cash flow management was
one of the management focus areas, and during the year, the Group's cash flow
from operations amounted to EUR 273.8 million (2009: EUR 241.8 million). Cash
flow from operations per share was EUR 1.69 (2009: EUR 1.50). In addition to a
significantly better operational result, lower interest costs also improved the
cash flow from the comparable year.
Sanoma's financial position was strong and financial flexibility improved during
the year. The equity ratio strengthened and was 45.7% (2009:
41.4%; 2008: 40.0%) at the end of December. The divestment of Welho improved key
ratios: Return on equity (ROE) was 23.0% (2009: 9.2%; 2008: 9.1%) and the return
on investment (ROI) was 16.2% (2009: 8.9%). Equity totalled EUR 1,376.0 million
(2009: EUR 1,206.6 million). Interest-bearing liabilities continued to decrease
and totalled EUR 941.9 million (2009: EUR 1,017.7 million) and interest-bearing
net debt was EUR 877.9 million (2009: EUR 958.1 million). Sanoma's net
debt/EBITDA ratio was 1.5 at the end of December.
Sanoma's existing credit facilities, such as the syndicated, long-term credit
facility of EUR 802 million, cover all Sanoma's financing needs and Sanoma has
no need for material refinance in the near future. Sanoma Corporation does not
have any other significant agreements covered by the statutory obligation to
disclose. The Group has, within the scope of normal business operations,
agreements or agreements as a whole containing a standard change-of-control
clause.
Investments, acquisitions and divestments
Investments in tangible and intangible assets amounted to EUR 85.7 million
(2009: EUR 83.4 million) in 2010. Investments were mainly related to ICT systems
as well as replacements and renovations. Sanoma has a policy to keep annual
capital expenditure, excluding M&A, below EUR 100 million. Sanoma's business
acquisitions in 2010 totalled EUR 37.1 million (2009: EUR 6.7 million).
R&D expenditure was recorded at EUR 0.9 million (2009: EUR 1.5 million) or 0.0%
(2009: 0.1%) of net sales. R&D expenditure does not include costs related to
launches of new products and services or renewal of existing ones, which are
considered normal portfolio management and incurred as costs. Sanoma leads and
co-ordinates the Finnish Next Media research programme, which develops future
concepts and business models for media. The aim of the research programme is to
enhance digital media R&D activity in Finland as well as to create significant
business internationally. The Next Media research programme includes ten
different projects and is set to end in 2015. The programme is partly financed
by the government and partly by the participating media companies.
In May, Sanoma Magazines Belgium sold 49% of its Humo magazine to Belgian De
Vijver. As part of the transaction, Sanoma Magazines Belgium acquired 25% of
Desert Fishes, which owns Belgium's largest TV production company Woestijnvis.
In June, Sanoma Entertainment divested its cable TV operator Welho to the DNA
telecommunication group, invested the total enterprise value of Welho into DNA
and became DNA's second largest owner with an ownership share of 21%. There were
no significant transactions during the comparable year.
Events after the review period
In order to respond more effectively to the needs of consumers and advertisers
in the converging media world, the Group integrated two of its divisions Sanoma
Entertainment and Sanoma Magazines to form the new division Sanoma Media as of
1 January 2011. This integration enables Sanoma to leverage its television know-
how and assets in Finland also internationally, as well as further strengthen
Sanoma's market positions in Europe.
At the same time, Aldipress was moved from Sanoma Trade's trade services to
Sanoma Media in order to facilitate the execution of its new strategy: to focus
on single copy press distribution and strengthen its service to Dutch
publishers.
Sanoma now has four divisions: Sanoma Media, Sanoma News, Sanoma Learning &
Literature and Sanoma Trade. Sanoma's Executive Management Group comprises the
Group CEO, the heads of the divisions, the Group CFO and the Group CSO. Sanoma
will publish comparable figures for these new segments before its first quarter
results.
SANOMA MAGAZINES
Sanoma Magazines, operating in 12 European countries, is a leading publisher of
magazines and has a strong presence in digital media. The company actively
reaches out to an audience of 290 million consumers at every life stage, and
aims to strengthen its market leader positions in each of the markets it
operates in.
- Advertising sales continued to develop positively in the fourth quarter, both
in print and online.
- Sanoma Magazines' tablet know-how was recognised when its applications were
chosen as the second and third best applications out of over 1,000 magazine and
newspaper apps around the world. Active exploration of mobile business
opportunities continues.
- After the review period, broadcasts of Story 5, the second TV channel of
Sanoma Budapest started in Hungary
- As of 1 January 2011, Sanoma Magazines is part of a new division, Sanoma
Media.
Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2010 2009 % 2010 2009 %
Net sales 306.0 307.1 -0.4 1,110.9 1,111.2 0.0
Sanoma Magazines Netherlands 136.1 138.6 -1.8 490.4 493.2 -0.6
Sanoma Magazines International 60.9 58.5 4.2 214.9 211.3 1.7
Sanoma Magazines Belgium 53.8 57.5 -6.5 208.3 212.3 -1.9
Sanoma Magazines Finland 56.2 53.5 5.0 201.4 198.8 1.3
Eliminations -1.0 -1.0 -2.3 -4.2 -4.3 3.6
Operating profit excluding non- 35.5 38.4 -7.6 128.6 113.4 13.5
recurring items *
% of net sales 11.6 12.5 11.6 10.2
Operating profit 31.2 27.4 13.9 120.6 96.3 25.3
Capital expenditure 19.4 24.4 -20.3
Return on investment (ROI), % 7.2 7.9
Number of employees at the end of the period (FTE) 4,980 5,191 -4.1
Average number of employees (FTE) 5,040 5,452 -7.5
* In 2010, the non-recurring items included in the second quarter a EUR 2.6
million gain from selling 49% of the Humo magazine, in the third quarter a EUR
6.3 million impairment of intangible assets in Sanoma Magazines Netherlands and
in the fourth quarter EUR 3.3 million Sanoma Magazines Netherlands'
restructuring expenses and a EUR 1.0 impairment of intangible assets in Sanoma
Magazines International. In 2009, the non-recurring items included in the second
quarter EUR 1.3 million, in the third quarter EUR 0.2 million and in the fourth
quarter EUR 10.9 million of Sanoma Magazines Belgium's restructuring expenses
and in the third quarter EUR 4.6 million and in the fourth quarter EUR 0.1
million of Sanoma Magazines Netherlands' restructuring expenses.
Operational indicators * 1-12/ 1-12/
2010 2009
Number of magazines published 279 295
Magazine copies sold, thousands 342,316 372,995
Advertising pages sold 50,549 54,108
* Including joint ventures
Fourth quarter
Sanoma Magazines' net sales in October-December were at the comparable quarter's
level. Adjusted for changes in the Division structure, sales grew by 1.3%.
The Division's advertising sales grew by 6% and represented 33% (2009: 30%) of
the fourth quarter net sales. Advertising sales grew in all four businesses.
Sanoma Magazines' online advertising sales grew clearly, in particular due to
the good development in the Netherlands and Sanoma Magazines International.
Sanoma Magazines' circulation sales decreased slightly and represented 54%
(2009: 56%) of the Division's net sales. Subscription sales were at the
comparable quarter's level but single copy sales decreased somewhat.
Sanoma Magazines Netherlands' net sales were at the comparable quarter's level.
Advertising sales grew somewhat with online advertising sales increasing
clearly. Advertising sales represented 32% (2009: 30%) of Sanoma Magazines
Netherlands' net sales. Its circulation revenues were slightly down with
subscription sales at the comparable quarter's level and single copy sales
declining slightly, due to one issue less of the women's weekly magazines. There
were several mobile launches but no other major changes in Sanoma Magazines
Netherlands' portfolio in the fourth quarter.
Sanoma Magazines International's net sales grew by 4% due to increased
advertising sales in Russia and the favourable currency translation effect. The
advertising market continued to improve also in Hungary and Ukraine, the general
economic environment and the outlook for advertising sales is weak in other CEE
countries. Advertising sales represented 55% (2009: 52%) of Sanoma Magazines
International's net sales in the fourth quarter. Circulation sales decreased,
with both single copy sales and subscription sales falling. Sanoma Magazines
International made one magazine and several online and mobile launches.
Net sales from Sanoma Magazines Belgium decreased by 7%, due to divestment of
49% of the weekly Humo, one of Sanoma Magazines Belgium's key titles, in May.
Adjusted for this divestment, net sales improved clearly. Advertising sales
increased, thanks to other titles' good performance. Circulation sales decreased
with both subscription and single copy sales being clearly lower than in the
comparable period. Advertising sales represented 27% (2009: 25%) of Sanoma
Magazines Belgium's net sales.
Sanoma Magazines Finland's net sales grew by 5%. Advertising sales improved
clearly and represented 14% (2009: 14%) of net sales. With both subscription and
single copy sales increasing, circulation sales grew somewhat.
Sanoma Magazines' operating profit excluding non-recurring items in October-
December decreased by 8%. The result declined in Belgium due to structural
changes and in the Netherlands, where marketing costs were significantly higher
than in the comparable period. At the end of 2009, marketing was at a very low
level. Result improved in Sanoma Magazines International and in Sanoma Magazines
Finland. The non-recurring costs included in the operating profit totalled EUR
4.3 million (2009: EUR 11.0 million) and related to restructuring of the Dutch
operations and an impairment in two Russian magazines.
2010
In January-December, Sanoma Magazines' net sales were at the comparable year's
level. Adjusted for changes in the Division structure, the growth was 1.4%.
Digital revenues, consisting mostly of online advertising, amounted to 9% (2009:
8%) of the Division's net sales.
Operating profit excluding non-recurring items increased by 14%. Growing
advertising sales improved the result significantly in Sanoma Magazines
Netherlands and International. The non-recurring items included in the operating
profit totalled EUR -8.0 million (2009: EUR -17.1 million) and included gains on
the sale of assets, impairments of intangible assets and goodwill as well as
restructuring costs. In the comparable year, the non-recurring costs were
related to restructuring of operations.
Sanoma Magazines' investments in tangible and intangible assets totalled EUR
19.4 million (2009: EUR 24.4 million) and consisted mainly of ICT investments.
The most significant acquisition in 2010 was that of HaziPatika.com Group, which
operates, among other sites, Hungary's most visited healthcare website. In the
comparable year, the major acquisition was Hungarian SELKO kft, which operates
the comparison site Olcsobbat.hu.
According to Nielsen Media Research, the consumer magazine advertising market in
the Netherlands improved slightly in January-November 2010. Sanoma Magazines
Netherlands' sales clearly outperformed the market development. According to TNS
Gallup Adex, advertising in consumer magazines in Finland decreased by 3% in
2010, but Sanoma Magazines Finland outperformed the market development.
Sanoma Magazines continuously develops its magazine portfolio with a special
focus on its key titles in each operating country. Sanoma Magazines is investing
in strengthening its market positions, and wants to become stronger in digital
media, both online and mobile. To support this, the Group decided to combine
Sanoma Entertainment's multimedia know-how together with Sanoma Magazines strong
brand portfolio. The new Sanoma Media division became operational as of 1
January 2011. The Division continues to look for possibilities to expand in
different TV markets.
In 2011, Sanoma Media's net sales are expected to be at the previous year's
level and operating profit excluding non-recurring items is estimated to
decrease clearly due to the divestments made in 2010. The effects of the
Aldipress transfer to Sanoma Media have been included both for the current and
comparable year.
SANOMA NEWS
Sanoma News is the leading newspaper publisher in Finland and its printed and
digital products have a strong presence in the lives of Finns. In addition to
Helsingin Sanomat, the largest daily in the Nordic region, Sanoma News publishes
other national and regional newspapers and it is also one of the most
significant digital media players in Finland.
- Advertising sales improved further with print recruitment advertising in
particular performing well. Oikotie.fi became the leading online recruitment
site in Finland.
- Thanks to increased advertising sales the fourth quarter result also improved
significantly.
- Ilta-Sanomat's market share of the tabloid market continued to increase also
in the last quarter and the circulation of the weekend edition is above that of
2009.
- Sanoma News continued to focus its operations by divesting its local papers in
south eastern Finland in December.
Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2010 2009 % 2010 2009 %
Net sales 114.9 112.9 1.8 437.6 428.9 2.0
Helsingin Sanomat 64.1 61.1 4.9 235.4 228.4 3.1
Ilta-Sanomat 21.6 20.3 6.6 83.3 78.2 6.5
Other publishing 25.0 26.9 -7.2 99.5 103.8 -4.2
Other businesses 33.4 36.6 -8.8 132.9 143.7 -7.5
Eliminations -29.2 -32.0 8.8 -113.5 -125.2 9.4
Operating profit excluding non- 13.0 10.8 20.5 47.2 40.6 16.4
recurring items *
% of net sales 11.3 9.6 10.8 9.5
Operating profit 15.9 10.8 47.5 56.1 32.2 74.5
Capital expenditure 14.0 10.6 32.2
Return on investment (ROI), % 22.0 12.1
Number of employees at the end of the period (FTE) 2,016 2,306 -12.6
Average number of employees (FTE) 2,176 2,399 -9.3
* In 2010, the non-recurring items included in the first quarter a EUR 6.0
million gain on the sale of Lehtikuva and in the fourth quarter a EUR 2.9 gain
on the sale of Sanoma Lehtimedia's local papers. In 2009, the non-recurring
items included in the first quarter EUR 2.3 million and in the second quarter
EUR 6.1 million of expenses related to the efficiency programme.
Operational indicators 1-12/ 1-12/
2010 2009
Distribution of free sheets, millions 74.3 74.8
1-12/ 1-12/
Circulation 2010 2009
Helsingin Sanomat 383,361 397,838
Ilta-Sanomat 149,838 152,948
10-12/ 10-12/
Online services, unique visitors, weekly 2010 2009
Iltasanomat.fi 1,726,762 1,827,379
HS.fi 1,266,968 1,280,225
Huuto.net 460,005 462,347
Oikotie.fi 460,622 374,397
Taloussanomat.fi 547,513 508,089
Fourth quarter
Sanoma News' net sales in October-December increased by 2%. Adjusted for changes
in the Division structure, sales grew by 5%.
Sanoma News continued to strengthen its market share in the Finnish media
market. The Division's advertising sales grew by 11%, with both online and print
advertising sales developing positively and increasing by 27% and 9%
respectively. Advertising sales represented 52% (2009: 48%) of the Division's
net sales in the fourth quarter.
The Division's circulation sales were at the comparable period's level. Single
copy sales performed well and subscription sales remained stable. Circulation
sales accounted for 42% (2009: 42%) of the Division's net sales.
The net sales of the Helsingin Sanomat business unit grew by 5%. Advertising
sales continued to improve, with recruitment advertising in the daily print
edition of Helsingin Sanomat showing impressive growth of 46% in the fourth
quarter. Advertising sales represented 57% (2009: 54%) of the business unit's
net sales. The online news site HS.fi had record audiences in the fourth quarter
and strengthened its position as one of the most visited sites in Finland,
especially in mobile. In December, Helsingin Sanomat launched a tablet version
of the daily paper in connection with the Finnish iPad launch.
The Ilta-Sanomat business unit's net sales grew by 7%. The tabloid's weekday
price was increased from EUR 1.20 to EUR 1.30 in mid-August and the circulation
of the weekend edition grew, which increased circulation sales. Advertising
sales, representing 30% (2009: 28%) of the business unit's net sales, also grew
significantly. A renewed Iltasanomat.fi was successfully launched in November.
Net sales from other publishing operations decreased by 7% due to the divestment
of picture agency Lehtikuva and the transfer of business information provider
Esmerk. Five local papers were also divested in December. Sanoma News is
focusing a significant amount of resources to its digital operations. Online
advertising sales in Sanoma Digital Finland continued their strong performance
also in the fourth quarter, particularly in recruitment. In regional papers,
advertising sales grew somewhat and circulation sales were at the comparable
quarter's level. Advertising sales in free sheets were at the comparable
quarter's level.
In October-December, Sanoma News' operating profit excluding non-recurring items
increased by 20%. Operating profit improved significantly in the Helsingin
Sanomat business unit but Ilta-Sanomat's operating profit decreased due to
Iltasanomat.fi renewal. Despite the structural changes, the result improved
significantly in other publishing, thanks to Sanoma Digital Finland's increased
online advertising sales. The operating profit included EUR 2.9 million (2009:
EUR 0.0 million) non-recurring capital gain on the divestment of local papers in
south-eastern Finland.
2010
In January-December, Sanoma News' net sales grew by 2%. Adjusted for changes in
the Division structure, the growth was 4%. Digital revenues, consisting mostly
of online advertising, amounted to 11% (2009: 11%) of the Division's net sales.
Sanoma News's operating profit excluding non-recurring items grew by 16%, mainly
due to improved advertising sales and lower paper costs. The non-recurring items
included in the operating profit totalled EUR 8.9 million (2009: EUR -8.4
million) and consisted of capital gains on the divestment of Lehtikuva and local
papers. In the comparable year, the non-recurring items were related to the
Division's efficiency programme. The withheld holiday pay in 2009 and the equal-
size bonus paid in May 2010 had impacts on the operating profit in the second
quarter in particular. Excluding the effects of the holiday pay, the increase in
the full-year result would have been some 50%.
Sanoma News' investments in tangible and intangible assets totalled EUR 14.0
million (2009: EUR 10.6 million), and consisted mainly of investments in digital
business and a reader-customer management system. There were no significant
acquisitions in 2010 or the comparable year.
According to TNS Gallup Adex, newspaper advertising in Finland grew by 2% in
2010. Recruitment advertising in Finland increased by 32%, and real estate
advertising by 1%. Job advertising in the daily print edition of Helsingin
Sanomat was 28% above the comparable year and real estate advertising 4%.
Online, Oikotie recruitment advertising outperformed the market and doubled.
Advertising in free sheet market was up by 8%, partly due to changes in
reporting. Online advertising included in the statistics grew by 33% during the
year, much faster than other media segments.
The total volume of the Finnish tabloid market decreased by 3% in 2010. However,
Ilta-Sanomat was able to improve its market position further in the tabloid
newsstand market and now has a market share of 58.1% (2009: 57.1%).
Sanoma News aims to strengthen its multichannel approach both when creating
journalistic content as well as when serving its advertisers. The Division will
increase its share of digital operations and create new sources of revenues
through development of the product and service portfolio. Strengthening market
share both in the media market and in the readers' market remains a key priority
for Sanoma News.
In 2011, Sanoma News' net sales and operating profit excluding non-recurring
items are estimated to be at the previous year's level due to the divestments
made in 2010.
SANOMA ENTERTAINMENT
Sanoma Entertainment offers entertaining experiences on television, radio and
online. Sanoma Entertainment consists of Nelonen Media, which focuses on
broadcast operations as well as online TV, and Sanoma Games, provider of online
casual gaming.
- Nelonen Media's commercial viewing shares continued to improve in the fourth
quarter.
- Excellent performance in TV and radio continued and the Division's advertising
sales grew by 26% in the fourth quarter.
- As of 1 January 2011, Sanoma Entertainment is part of a new division, Sanoma
Media.
Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2010 2009 % 2010 2009 %
Net sales 31.3 41.1 -23.9 138.2 157.1 -12.0
Operating profit excluding non-recurring 0.8 3.9 -80.2 16.8 20.7 -19.0
items *
% of net sales 2.5 9.5 12.1 13.2
Operating profit 0.4 3.9 -90.4 195.8 20.7 845.1
Capital expenditure 5.3 9.3 -42.9
Return on investment (ROI), % 95.1 18.3
Number of employees at the end of the period (FTE) 218 458 -52.4
Average number of employees (FTE) 337 469 -28.1
* In 2010, the non-recurring items included in the second quarter a EUR 179.0
million gain on the sale of the cable TV operator Welho. In 2009, the operating
profit did not include any non-recurring items.
Operational indicators 1-12/ 1-12/
2010 2009
TV channels' share of Finnish TV advertising 32.8% 32.6%
TV channels' national commercial viewing share 35.5% 29.8%
TV channels' national viewing share 15.1% 14.8%
Fourth quarter
Sanoma Entertainment's net sales in October-December decreased by 24%, following
the divestment of cable TV and broadband operator Welho at the end of the second
quarter. Adjusted for changes in the Division structure, sales grew by 30%, due
to marked improvement in TV advertising sales. In addition, online sales showed
excellent development, with Ruutu.fi growing 76% and Sanoma Games 28%. Following
the Welho transaction, advertising sales are 85% of the Division's net sales
(2009: 51%). In December, Sanoma Games launched a fantasy sports game in Germany
based on a successful concept already in place in Finland and Sweden. Online
casual gaming is one of the focus areas of the Group's consumer online strategy.
Sanoma Entertainment's operating profit excluding non-recurring items in
October-December declined by 80%. However, the profitability of broadcasting
operations improved significantly due to improved advertising sales. The
operating profit did not include any non-recurring items in the fourth quarter.
2010
In January-December, Sanoma Entertainment's net sales decreased by 12% due to
the divestment of Welho. Adjusted for changes in the Division structure, net
sales grew by 12%.
Sanoma Entertainment's operating profit excluding non-recurring items in 2010
declined by 19%. However, the profitability of broadcasting operations improved
significantly due to improved advertising sales. The operating profit included a
EUR 179.0 million (2009: EUR 0.0 million) non-recurring capital gain from the
divestment of Welho.
Sanoma Entertainment's investments in tangible and intangible assets totalled
EUR 5.3 million (2009: EUR 9.3 million), most of which was allocated to the
development of Welho's cable network and services. The most significant
acquisition, with an enterprise value of EUR 200 million, was a 21% share in the
Finnish telecommunication group DNA in connection with the Welho transaction.
There were no major transactions in the comparable year.
The Finnish TV advertising market grew by 12% in 2010 according to TNS Gallup
Adex. Nelonen Media outperformed the market growth and was able to increase its
market share to 32.8%, thanks to its improved viewing share and the successful
execution of the multichannel strategy in broadcast operations combining TV,
radio and online TV. Nelonen Media actively introduced new types of advertising
products. In addition, Nelonen Media's radio channels outperformed the market
growth of 9% in 2010.
Nelonen Media's commercial viewing share also improved to 35.5% (2009: 33.7%) in
its main target group, viewers between 10 and 44 years of age. The viewing
shares were boosted by the programming investments as well as the continued
success of the targeted theme channels, Liv and Jim. The viewing of these
channels has continuously improved. In 2011, Nelonen Media will expand its pay
TV offering in Finland: the existing series and movie channel Nelonen Kino will
be renewed and two new ones, family-oriented Nelonen Perhe and Nelonen Maailma
focusing on documentaries, travel and nature, will be launched. The sports
channel offering has already grown to two channels: Nelonen Pro 1 and Nelonen
Pro 2.
With the growing convergence of media, TV and videos are becoming a natural part
of all online content. Sanoma Entertainment's multimedia know-how offers
interesting opportunities in combining media assets across Sanoma's markets. To
further exploit these possibilities, Sanoma Entertainment became a part of the
new Sanoma Media division as of 1 January 2011. The Division continues to look
for possibilities to expand in different TV markets.
SANOMA LEARNING & LITERATURE
Sanoma Learning & Literature, operating in 14 countries, is a leading European
provider of learning materials and solutions in print and digital format. The
Division has growing international business information and language service
operations and is also the leading general literature publisher in Finland.
- Nowa Era sales continued to increase in the fourth quarter, thanks to their
success in the Polish educational reform and the full-year net sales of learning
developed well in all operating countries.
- The Division's full-year result improved significantly. In the fourth quarter,
increased cost of sales and depreciation contributed to the operating loss
increase.
Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2010 2009 % 2010 2009 %
Net sales 65.1 64.7 0.6 350.1 345.1 1.4
Learning 33.7 32.7 3.2 249.3 239.1 4.2
Language services 8.9 6.3 40.7 27.1 27.5 -1.3
Literature and other businesses 24.8 28.0 -11.5 83.6 88.9 -6.0
Eliminations -2.2 -2.3 1.6 -9.9 -10.4 4.4
Operating profit excluding non-recurring -14.4 -10.4 -38.2 52.6 43.5 21.1
items *
% of net sales -22.0 -16.1 15.0 12.6
Operating profit -17.2 -12.8 -34.1 47.1 38.5 22.5
Capital expenditure 14.9 13.1 13.4
Return on investment (ROI), % 8.9 7.2
Number of employees at the end of the period (FTE) 2,656 2,745 -3.3
Average number of employees (FTE) 2,629 2,780 -5.4
* In 2010, the non-recurring items included in the first quarter a EUR 1.1
million loss on the sale of Bertmark Norge and in the second quarter EUR 1.3
million, in the third quarter EUR 0.2 million and in the fourth quarter EUR 0.8
million restructuring expenses and in the fourth quarter a EUR 2.1 million
impairment of a Dutch non-core entity. In 2009, the non-recurring items included
in the third quarter EUR 1.5 million and in the fourth quarter EUR 2.4 million
restructuring expenses and in the third quarter EUR 1.1 million of expenses
related to the sale of children's magazines.
Operational indicators 1-12/ 1-12/
2010 2009
Learning
Number of new titles published, books 1,238 1,470
Number of new titles published, digital products 282 346
Literature and other businesses
Number of new titles published, books 377 400
Number of new titles published, digital products 120 102
Books sold, millions 32.5 35.6
Fourth quarter
Sanoma Learning & Literature's net sales in October-December were at the
comparable quarter's level. Adjusted for changes in the Division structure, net
sales decreased by 5%.
Learning business has by nature an annual cycle and strong seasonality. It
accrues most of its net sales and results during the second and third quarters.
Changes between quarters can be significant and often explain most of the
changes from the comparable period.
Net sales in learning were slightly higher than in the comparable period. In
Poland, Nowa Era's sales continued to increase clearly. In other operating
countries, the timing of the sales was different from the comparable period with
some countries accruing net sales later than in 2009 and some already in earlier
quarters. The e-learning provider YDP's net sales were significantly lower than
in the comparable period because of reduced government spending in 2010.
Net sales in language services increased significantly due to new operations:
the business information and media monitoring service provider Esmerk was
transferred from Sanoma News in September in order to consolidate the Group's
B2B service offering. The sales of translation services and language training
grew in Finland but remained challenging in the other Nordic countries.
Net sales in literature and other businesses decreased by 12%. The effects of
the restructuring in multi-volume business are starting to be visible in sales.
WSOY's sales of general literature were boosted by active marketing in the
fourth quarter.
The Division's operating result excluding non-recurring items in October-
December was 38% weaker than in the comparable period, due to increased cost of
sales and depreciation related to for example ICT in the learning business.
Efficiency measures improved results in language services and in literature and
other businesses. The result was positively impacted by a EUR 3 million release
in pension bookings. The non-recurring costs included in the operating profit
totalled EUR 2.8 million (2009: EUR 2.4 million) and were related to
restructuring in literature and an impairment of a Dutch non-core entity
operating in consultancy.
2010
In January-December, Sanoma Learning & Literature's net sales were at the
comparable year's level, also when adjusted for changes in the Division
structure.
Operating profit excluding non-recurring items grew by 21%. The non-recurring
items included in the operating profit totalled EUR -5.5 million (2009: EUR -5.0
million) and were related to restructuring and divestment of non-core operations
both in 2010 and the previous year.
Sanoma Learning & Literature's investments in tangible and intangible assets
totalled EUR 14.9 million (2009: 13.1 million). They comprised ICT investments,
among others. The most significant acquisition was the remaining shares of the
e-learning provider YDP in Poland. The most significant transactions in the
comparable year were the acquisition of the Belgian Wees Wegwijs, specialised in
publishing road safety books, and the merger of the Finnish book printer
Gummerus Printing into Bookwell.
Sanoma Learning & Literature's customers are increasingly looking for
comprehensive solutions both in learning and language services. The Division
will continue its transformation in order to offer the most appealing solutions,
create value for the customer by applying new technologies and gain efficiency
through developing concepts and platforms to be used in several markets. At the
same time, the Division is looking for growth through further
internationalisation of its learning and language services businesses.
In 2011, the net sales of Sanoma Learning & Literature are estimated to increase
slightly and operating profit excluding non-recurring items is expected to be at
the previous year's level.
SANOMA TRADE
Operating in five countries, retail specialist Sanoma Trade's strengths lie in a
thorough understanding of customers' needs and solid concepts. Sanoma Trade
serves its customers in 200 million annual sales contacts at kiosks, bookstores
and movie theatres. Sanoma Trade's trade services business unit is a strong link
between publishers and retailers.
- The movie operations continued to perform well in the fourth quarter.
- The roll-out of the new kiosk concept continued and the first bookstore with
the new concept was opened in Finland.
- Sanoma Trade divested its Russian operations in the fourth quarter.
Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2010 2009 % 2010 2009 %
Net sales 226.1 235.3 -3.9 825.4 827.8 -0.3
Kiosk operations 102.4 110.5 -7.4 398.4 404.2 -1.4
Trade services 60.1 60.6 -0.9 230.4 227.9 1.1
Bookstores 43.2 44.5 -3.1 120.6 123.3 -2.2
Movie operations 23.9 23.6 1.4 90.0 88.0 2.2
Eliminations -3.5 -4.0 14.3 -14.0 -15.6 10.3
Operating profit excluding non-recurring 5.6 10.3 -45.1 19.4 27.6 -29.6
items *
% of net sales 2.5 4.4 2.4 3.3
Operating profit 3.0 6.7 -54.4 -13.1 24.0 -154.4
Capital expenditure 30.2 25.5 18.5
Return on investment (ROI), % -4.0 8.2
Number of employees at the end of the period (FTE) 5,370 5,943 -9.7
Average number of employees (FTE) 5,710 6,164 -7.4
* In 2010, the non-recurring items included in the third quarter a EUR 28.9
million impairment of goodwill in the Dutch press distribution and in the third
quarter EUR 1.0 million and in the fourth quarter a EUR 2.6 million loss on sale
of Russian operations. In 2009, the non-recurring items included in the fourth
quarter EUR 3.6 million of restructuring expenses.
Operational indicators 1-12/ 1-12/
Thousands 2010 2009
Customer volume in kiosk operations 181,328 194,692
Customer volume in bookstores 7,214 7,239
Customer volume in movie theatres 9,877 9,501
Number of copies sold (press distribution) 336,753 350,186
Fourth quarter
Sanoma Trade's net sales in October-December decreased by 4%. Net sales adjusted
for changes in the Group structure decreased by 3%.
Net sales from kiosk operations were down by 7%. Net sales grew in Latvia and
Romania, but decreased in other countries. The sluggish economic environment had
an impact on sales in Lithuania and Estonia. In Finland, the changes in sales
mix continued to affect net sales also in the fourth quarter. Sanoma Trade is
focusing its resources in developing its concepts and the roll-out of the new
kiosk concept continued. The results from the 36 new kiosks show increased sales
in high-traffic areas. Numerous new services, such as safe payment instruments
and wider postal services, were introduced to a great number of Finnish kiosks.
Net sales from trade services were at the comparable period's level. Of the
operating countries, net sales were stable in Finland, but decreased in other
countries. As of 1 January 2011, Aldipress has been part of Sanoma Media in
order to increase the focus on local markets and strengthen its relationship
with the Dutch publishers.
Net sales from bookstores decreased by 3%. In Finland, especially the sales of
educational material developed well, but the lack of interesting titles clearly
lowered the sales of fiction. The bookstore concept is being developed and
stores with the new concept were opened both in Finland and Estonia in the
fourth quarter.
Net sales from movie operations were at the comparable quarter's level. Net
sales increased clearly in Finland, boosted by the popularity of domestic and
3D movies. In the Baltic countries, sales continued to be below the comparable
period.
Sanoma Trade's operating profit excluding non-recurring items in October-
December decreased by 45%. The result improved in trade services, but was below
the comparable period in other businesses. In the Finnish kiosks, the new
Opening Hours Act influenced the customer volume and sales mix, which affected
the sales margin negatively. The poor economic situation in the Baltic countries
continued to have an effect on the results in all businesses. In the fourth
quarter, the operating profit included EUR -2.6 million (2009: EUR -3.6 million)
of non-recurring costs related to the discontinuation of the Russian kiosk
operations.
2010
In January-December, Sanoma Trade's net sales were at the comparable year's
level. Also adjusted for changes in the Division structure, net sales were
stable.
Operating profit excluding non-recurring items decreased by 30% mainly due to
the lower sales margin and customer volume in the Finnish kiosks. The result
improved in trade services and movie operations. Bookstores posted a clearly
lower result than in the comparable year. The non-recurring items included in
the operating profit totalled EUR -32.5 million (2009: EUR -3.6 million) and
consisted of an impairment of goodwill in the Dutch press distribution
operations as well as restructuring in the Estonian and Russian operations. In
the comparable year, the non-recurring items were related to restructuring in
Russia, Latvia and Lithuania.
Sanoma Trade's investments in tangible and intangible assets totalled EUR 30.2
million (2009: EUR 25.5 million), and focused mainly on concept development in
kiosks and bookstores, ICT projects and 3D digital equipment. In May, the
marketing logistics company Postituspojat was acquired to strengthen trade
services' growth strategy. There were no major acquisitions in the comparable
year.
Continuous development of its product and service offering, based on the
consumer insight gained from its 200 million annual customer contacts, is a key
success factor for Sanoma Trade. Sanoma Trade continues to focus its resources
to improve its concepts and better cater for the needs of its customers. The new
kiosk and bookstore concepts continue to be rolled out in 2011, and the service
offering of trade services and movie operations will be expanded.
In 2011, Sanoma Trade's net sales are estimated to grow slightly and operating
profit excluding non-recurring items is estimated to improve clearly. The
effects of the Aldipress transfer to Sanoma Media have been included both for
the current and comparable year.
THE GROUP
Personnel
In 2010, the average number of persons employed by the Sanoma Group was 19,463
(2009: 20,625; 2008: 21,329). In full-time equivalents, the number of Group
employees at the end of the year was 15,405 (2009: 16,723; 2008: 18,453).
Divestments and restructuring decreased the number of personnel in 2010. In
addition, some of the restructuring measures initiated in 2009 affected the
number of employees also in 2010. In full-time equivalents, Sanoma Magazines had
4,980 (5,191) employees at the end of 2010, Sanoma News 2,016 (2,306), Sanoma
Entertainment 218 (458), Sanoma Learning & Literature 2,656 (2,745) and Sanoma
Trade 5,370 (5,943). During the year, a Financial Shared Service Centre was
established at headquarters and the number of employees in the Parent Company
rose to 165 (79).
The total employee benefits to Sanoma employees in 2010, including the expense
recognition of options granted, amounted to EUR 545.9 million (2009: EUR 563.0
million; 2008: EUR 575.5 million).
Dividend
On 31 December 2010, Sanoma Corporation's distributable funds were EUR 641.3
million, of which profit for the year made up EUR 87.9 million.
The Board of Directors proposes to the Annual General Meeting that:
- A dividend of EUR 1.10 per share, or in total an estimated EUR 179.1 million,
shall be paid.
- A sum of EUR 0.55 million shall be transferred to the donation reserve and
used at the Board's discretion.
- The amount left in equity shall be EUR 461.7 million.
In accordance with the Annual General Meeting's decision, Sanoma paid out a per-
share dividend of EUR 0.80 for 2009. Sanoma conducts an active dividend policy
and primarily distributes over half of the Group result for the period in
dividends.
AGM, Financial Statements and Annual Report
Sanoma Corporation AGM will be held on 5 April 2011 at 2 pm at the Congress Wing
of the Helsinki Exhibition & Convention Centre, Finland. The agenda of the
meeting will be available on the Group's website at Sanoma.com at a later date.
Sanoma's Annual Report, Financial Statements, Board of Directors' Report and
Corporate Governance Statement for 2010 will be published in digital format on
the Materials section of the Group website during week 10 (the week beginning 7
March). A printed copy of the Annual Report will be available during week 11
(the week beginning 14 March) and can be ordered from the Group website.Shares and holdings
In January-December, 63,477,720 (2009: 72,078,344) Sanoma shares were traded on
the NASDAQ OMX Helsinki. Traded shares accounted for 39% (2009: 45%) of the
average number of shares. Sanoma's total stock exchange turnover was EUR 987.9
million (2009: EUR 821.6 million).
During the year, the volume-weighted average price of a Sanoma share was EUR
15.57, with a low of EUR 13.41 and a high of EUR 17.07. At the end of December,
Sanoma's market capitalisation was EUR 2.6 billion (2009: EUR 2.5 billion), with
Sanoma's share closing at EUR 16.22 (2009: EUR 15.76). The Company had 23,079
shareholders at the year-end, with foreign holdings accounting for 9.8% (2009:
10.4%) of all shares and votes. There were no major changes in share ownership
during 2010 and Sanoma did not issue any flagging announcements. At the end of
December, Sanoma had 162,810,593 shares.
Board of Directors, auditors and management
The AGM held on 8 April 2010 confirmed the number of Sanoma's Board members at
ten. Board members Sirkka Hämäläinen-Lindfors and Seppo Kievari were re-elected
and Antti Herlin was elected as a new member to the Board. The Board of
Directors of Sanoma consists of Jaakko Rauramo (Chairman), Sakari Tamminen (Vice
Chairman), and Annet Aris, Robert Castrén, Jane Erkko, Antti Herlin, Paavo
Hohti, Sirkka Hämäläinen-Lindfors, Seppo Kievari and Rafaela Seppälä as members.
The AGM re-appointed Pekka Pajamo, APA, and Sixten Nyman, APA, as his deputy,
and Authorised Public Accountants KPMG Oy Ab, with Kai Salli, APA, acting as the
Auditor in Charge, as the auditors of the Company.
There were changes in the Group management during the year: Pekka Soini was
appointed President of Sanoma News and member of Sanoma's Executive Management
Group as of 24 September 2010. Previously he was the acting president of the
Sanoma News division. Harri-Pekka Kaukonen was appointed President and CEO of
the Sanoma Group as of 1 January 2011. Hannu Syrjänen will retire as originally
agreed in his contract at the age of 60 in the autumn of 2011. In November, it
was announced that Timo Mänty, head of the Sanoma Trade division, will resign
his current duties. Mänty continues in his position until 31 March 2011, after
which he will transfer outside the Sanoma Group.
As of 1 January 2011, when the new Sanoma Media division was formed, the EMG
comprised Harri-Pekka Kaukonen (chairman), Eija Ailasmaa, Jacques Eijkens, Sven
Heistermann, Kim Ignatius, Timo Mänty and Pekka Soini.
Board authorisations
The AGM held on 8 April 2010 authorised the Board of Directors to decide on an
issuance of a maximum of 82,000,000 new shares and a transfer of a maximum of
5,000,000 treasury shares, together accounting for 35.5% of total voting rights
that the maximum number of own shares covered by the authorisation would provide
entitlement to. The authorisation will be valid until 30 June 2013. Under this
authorisation, the Board decided on 22 December 2010 on the issuance of Stock
Option Scheme 2010. The AGM also authorised the Board to decide on the
repurchase of a maximum of 16,000,000 of the Company's own shares, accounting
for 9.8% of total voting rights that the maximum number of own shares covered by
the authorisation would provide entitlement to. This authorisation is effective
until 30 June 2011 and terminates the corresponding authorisation granted by the
AGM on 1 April 2009. The Board of Directors did not exercise its right under
this authorisation during 2010.
Seasonal fluctuation
The net sales and result of media businesses are particularly affected by the
development of advertising. Advertising sales are influenced, for example, by
the number of newspaper and magazine issues published each quarter, which varies
annually. Television advertising in Finland is usually strongest in the second
and fourth quarters.
Learning accrues most of its net sales and results during the second and third
quarters.
A major portion of the net sales and results in retail are, on the other hand,
generated in the last quarter, particularly from Christmas sales. Of course, the
number of shopping days and, for example, the distribution of holidays over
different quarters impacts the retail sales between quarters.
Seasonal business fluctuations influence the Group's net sales and operating
profit, with the first quarter traditionally being clearly the smallest one for
both.
Significant risks and uncertainty factors
The most significant risks and uncertainty factors Sanoma currently faces are
described in the Financial Statements and on the Group's website at Sanoma.com,
together with the Group's main principles of risk management. Many of the
identified risks relate to changes in customer preferences. The driving force
behind these changes is the ongoing digitisation. Sanoma has identified action
plans in all its divisions on how to respond to this challenge.
Normal business risks associated with the industry relate to developments in
media advertising and consumer spending. Media advertising is sensitive to
economic fluctuations. Therefore, the general economic conditions of the
countries in which the Group operates and the economic trends of the industry
influence Sanoma's business activities and operational performance.
GROUP FINANCIAL STATEMENTS (FULL-YEAR FIGURES AUDITED)
Accounting policies
The Sanoma 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 31 December 2010.
The Group has applied the following revised and amended standards as of 1
January 2010: IFRS 3 (Revised 2008) Business Combinations and IAS 27 (Amended
2008) Consolidated and Separate Financial Statements.
The adoption of the revised IFRS 3 'Business Combinations' will have an impact
on the amount of goodwill from acquisitions and results on disposing businesses.
The standard is also estimated to have an impact on profit and loss in those
periods in which new business is acquired, the deferred purchase price is paid
or additional shares are acquired. According to the transitional provisions of
the standard, business combinations for which the acquisition date is before the
adoption of the standard are not adjusted.
The amended IAS 27 'Consolidated and Separate Financial Statements' requires the
effects of all transactions with a non-controlling interest to be recorded in
equity if the control remains with the parent company. The amendment also
specifies that a share of the loss for a period can also be allocated to non-
controlling interest when the losses exceed the amount of invested capital by
the non-controlling parties.
The accounting policies of the Interim Report and the definitions of key
indicators are presented on the Sanoma website at Sanoma.com. All figures have
been rounded and consequently the sum of individual figures can deviate from the
presented sum figure. Key figures have been calculated using exact figures.
CONSOLIDATED INCOME STATEMENT
EUR million 10-12/ 10-12/ 1-12/ 1-12/
2010 2009 2010 2009
NET SALES 717.3 733.6 2,761.2 2,767.9
Other operating income 20.3 17.9 258.8 64.6
Materials and services 320.4 332.2 1,207.4 1,238.5
Employee benefit expenses 175.3 184.0 668.6 695.5
Other operating expenses 168.7 156.8 554.2 536.2
Depreciation, amortisation and impairment losses 45.9 46.0 197.1 167.0
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OPERATING PROFIT 27.4 32.3 392.7 195.4
Share of results in associated companies -24.0 -1.6 -23.9 -3.9
Financial income 2.4 2.8 11.1 22.5
Financial expenses 6.6 11.3 23.8 52.6
------------------------------------------------------------------------------
RESULT BEFORE TAXES -0.8 22.3 356.0 161.4
Income taxes -0.2 -13.7 -58.6 -54.3
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RESULT FOR THE PERIOD -1.0 8.6 297.3 107.1
Result attributable to:
Equity holders of the Parent Company -0.9 6.4 299.6 105.6
Non-controlling interests -0.1 2.2 -2.3 1.6
Earnings per share for result attributable
to the equity holders of the Parent company:
Earnings per share, EUR -0.01 0.04 1.85 0.66
Diluted earnings per share, EUR -0.01 0.04 1.85 0.66
STATEMENT OF COMPREHENSIVE INCOME
EUR million 10-12/ 10-12/ 1-12/ 1-12/
2010 2009 2010 2009
Result for the period -1.0 8.6 297.3 107.1
Other comprehensive income:
Change in translation differences 1.2 3.7 9.8 -5.0
Cash flow hedges 0.2 0.2
Other comprehensive income for the period, net of tax 1.3 3.7 10.0 -5.0
-------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 0.3 12.3 307.3 102.1
Total comprehensive income attributable to:
Equity holders of the Parent Company 0.4 9.8 309.6 100.5
Non-controlling interests -0.1 2.4 -2.3 1.6
CONSOLIDATED BALANCE SHEET
EUR million 31.12.2010 31.12.2009
ASSETS
NON-CURRENT ASSETS
Tangible assets 429.3 484.2
Investment property 8.7 9.4
Goodwill 1,447.5 1,488.9
Other intangible assets 403.2 399.3
Interests in associated companies 248.7 63.5
Available-for-sale financial assets 15.8 15.7
Deferred tax receivables 34.8 30.1
Trade and other receivables 28.3 31.4
--------------------------------------------------------------------------------
NON-CURRENT ASSETS, TOTAL 2,616.3 2,522.3
CURRENT ASSETS
Inventories 122.8 141.6
Income tax receivables 8.6 19.3
Trade and other receivables 391.0 362.9
Available-for-sale financial assets 0.3 0.5
Cash and cash equivalents 64.0 59.7
--------------------------------------------------------------------------------
CURRENT ASSETS, TOTAL 586.8 584.0
ASSETS, TOTAL 3,203.0 3,106.3
EQUITY AND LIABILITIES
EQUITY
Equity attributable to the equity holders of the Parent
Company
Share capital 71.3 71.3
Fund for invested unrestricted equity 203.3 188.8
Other equity 1,096.7 931.1
--------------------------------------------------------------------------------
1,371.2 1,191.2
Non-controlling interests 4.8 15.4
--------------------------------------------------------------------------------
EQUITY, TOTAL 1,376.0 1,206.6
NON-CURRENT LIABILITIES
Deferred tax liabilities 94.2 101.2
Pension obligations 26.7 29.9
Provisions 7.3 10.7
Interest-bearing liabilities 472.5 541.6
Trade and other payables 19.9 28.2
CURRENT LIABILITIES
Provisions 15.6 23.8
Interest-bearing liabilities 469.4 476.1
Income tax liabilities 22.1 16.9
Trade and other payables 699.4 671.3
--------------------------------------------------------------------------------
LIABILITIES, TOTAL 1,827.0 1,899.7
EQUITY AND LIABILITIES, TOTAL 3,203.0 3,106.3
CHANGES IN CONSOLIDATED EQUITY
EUR million
Equity attributable to the equity holders of the Parent
Company
Fund
for Non-
inves- cont-
ted rol-
Share Trea- unres- Other Other ling Equi-
capi- sury tricted re- equity inte- ty,
tal shares equity serves Total rests total
Equity at
1 Jan 2009 71.3 -37.5 192.7 993.7 1,220.1 17.0 1,237.1
Share subscription
with options 12.3 12.3 12.3
--------------------------------------------------------------------------------
Cancellation
of treasury shares 37.5 -37.5
--------------------------------------------------------------------------------
Expense
recognition of
options granted 3.8 3.8 3.8
--------------------------------------------------------------------------------
Dividends paid -144.9 -144.9 -1.2 -146.2
--------------------------------------------------------------------------------
Change in non-
controlling
interests -2.0 -2.0
--------------------------------------------------------------------------------
Donations -0.5 -0.5 -0.5
--------------------------------------------------------------------------------
Transfer from
fund -16.1 16.1
--------------------------------------------------------------------------------
Comprehensive
income for the period 100.5 100.5 1.6 102.1
--------------------------------------------------------------------------------
Equity at
31 Dec 2009 71.3 188.8 931.1 1,191.2 15.4 1,206.6
Equity at
1 Jan 2010 71.3 188.8 931.1 1,191.2 15.4 1,206.6
Share subscription
with options 14.5 14.5 14.5
--------------------------------------------------------------------------------
Expense
recognition of
options granted 3.6 3.6 3.6
--------------------------------------------------------------------------------
Dividends paid -129.5 -129.5 -1.9 -131.3
--------------------------------------------------------------------------------
Change in non-
controlling
interests -17.8 -17.8 -6.5 -24.3
--------------------------------------------------------------------------------
Donations -0.5 -0.5 -0.5
--------------------------------------------------------------------------------
Comprehensive
income for the period 0.2 309.4 309.6 -2.3 307.3
--------------------------------------------------------------------------------
Equity at
31 Dec 2010 71.3 203.3 0.2 1,096.5 1,371.2 4.8 1,376.0
INCOME STATEMENT BY QUARTER
EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
2010 2010 2010 2010 2009 2009 2009 2009
NET SALES 637.9 715.4 690.6 717.3 636.0 697.2 701.1 733.6
Other operating income 20.4 197.3 20.9 20.3 14.1 19.4 13.3 17.9
Materials and services 279.0 307.3 300.7 320.4 286.4 304.8 315.0 332.2
Employee benefit expenses 169.1 172.3 151.9 175.3 176.2 174.8 160.5 184.0
Other operating expenses 128.9 132.4 124.2 168.7 128.2 129.0 122.1 156.8
Depreciation, amortisation and 40.8 39.6 70.7 45.9 38.4 42.8 39.8 46.0
impairment losses
--------------------------------------------------------------------------------
OPERATING PROFIT 40.4 261.0 63.9 27.4 20.9 65.1 77.1 32.3
Share of results in associated -2.4 1.7 0.8 -24.0 0.3 -0.6 -2.0 -1.6
companies
Financial income 2.2 2.5 4.0 2.4 6.7 8.8 4.1 2.8
Financial expenses 6.0 6.2 5.0 6.6 17.0 12.3 12.0 11.3
--------------------------------------------------------------------------------
RESULT BEFORE TAXES 34.1 259.0 63.7 -0.8 10.9 61.1 67.2 22.3
Income taxes -10.0 -23.8 -24.6 -0.2 -3.2 -17.4 -20.0 -13.7
--------------------------------------------------------------------------------
RESULT FOR THE PERIOD 24.1 235.1 39.1 -1.0 7.7 43.7 47.2 8.6
Result attributable to:
Equity holders of the Parent 25.9 235.4 39.2 -0.9 8.3 43.3 47.6 6.4
Company
Non-controlling interests -1.8 -0.2 -0.1 -0.1 -0.6 0.3 -0.3 2.2
Earnings per share for result attributable
to the equity holders of the Parent company:
Earnings per share, EUR 0.16 1.45 0.24 -0.01 0.05 0.27 0.30 0.04
Diluted earnings per share, 0.16 1.45 0.24 -0.01 0.05 0.27 0.30 0.04
EUR
INCOME STATEMENT BY YEAR
EUR million 1-12/ 1-12/
2010 2009
NET SALES 2,761.2 2,767.9
Other operating income 258.8 64.6
Materials and services 1,207.4 1,238.5
Employee benefit expenses 668.6 695.5
Other operating expenses 554.2 536.2
Depreciation, amortisation and impairment losses 197.1 167.0
----------------------------------------------------------------
OPERATING PROFIT 392.7 195.4
Share of results in associated companies -23.9 -3.9
Financial income 11.1 22.5
Financial expenses 23.8 52.6
----------------------------------------------------------------
RESULT BEFORE TAXES 356.0 161.4
Income taxes -58.6 -54.3
----------------------------------------------------------------
RESULT FOR THE PERIOD 297.3 107.1
Result attributable to:
Equity holders of the Parent Company 299.6 105.6
Non-controlling interests -2.3 1.6
Earnings per share, EUR 1.85 0.66
Diluted earnings per share, EUR 1.85 0.66
CONSOLIDATED CASH FLOW STATEMENT 1-12/ 1-12/
EUR million 2010 2009
OPERATIONS
Result for the period 297.3 107.1
Adjustments
Income taxes 58.6 54.3
Financial expenses 23.8 52.6
Financial income -11.1 -22.5
Share of results in associated companies 23.9 3.9
Depreciation, amortisation and impairment losses 197.1 167.0
Gains/losses on sales of non-current assets -195.2 -2.4
Other adjustments -55.1 -56.4
Change in working capital
Change in trade and other receivables -41.1 47.4
Change in inventories 9.5 5.6
Change in trade and other payables, and provisions 36.8 -36.9
Interest paid -13.7 -34.6
Other financial items -3.2 -2.0
Taxes paid -53.9 -41.4
-------------------------------------------------------------------------------
CASH FLOW FROM OPERATIONS 273.8 241.8
INVESTMENTS
Acquisition of tangible and intangible assets -81.8 -80.2
Operations acquired -49.5 -27.1
Sales of tangible and intangible assets 17.8 5.4
Operations sold 30.8 0.5
Loans granted -0.8 -0.9
Repayments of loan receivables 3.5 3.3
Sales of short-term investments 0.2 0.0
Interest received 2.7 4.8
Dividends received 3.9 4.3
-------------------------------------------------------------------------------
CASH FLOW FROM INVESTMENTS -73.1 -89.9
CASH FLOW BEFORE FINANCING 200.8 151.9
FINANCING
Proceeds from share subscriptions 14.5 12.3
Minority capital investment/repayment of equity 1.6
Change in loans with short maturity 4.2 -42.6
Drawings of other loans 287.7 399.7
Repayments of other loans -355.8 -460.0
Payment of finance lease liabilities -3.7 -3.5
Dividends paid -131.3 -146.2
Donations/other profit sharing -0.5 -0.5
-------------------------------------------------------------------------------
CASH FLOW FROM FINANCING -183.3 -240.8
CHANGE IN CASH AND CASH EQUIVALENTS
ACCORDING TO CASH FLOW STATEMENT 17.5 -88.9
Effect of exchange rate differences on cash and cash equivalents 2.1 0.0
NET CHANGE IN CASH AND CASH EQUIVALENTS 19.5 -88.9
Cash and cash equivalents at the beginning of the period 21.6 110.5
Cash and cash equivalents at the end of the period 41.1 21.6
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/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
2010 2010 2010 2010 2009 2009 2009 2009
SANOMA MAGAZINES
Sanoma Magazines Netherlands 107.4 128.0 118.8 136.1 110.6 123.2 120.7 138.6
Sanoma Magazines International 48.7 54.3 51.0 60.9 50.9 53.2 48.8 58.5
Sanoma Magazines Belgium 53.5 52.3 48.7 53.8 51.3 52.6 50.8 57.5
Sanoma Magazines Finland 51.2 47.1 46.9 56.2 50.3 48.0 46.9 53.5
Eliminations -1.0 -1.2 -1.0 -1.0 -1.0 -1.2 -1.2 -1.0
--------------------------------------------------------------------------------
TOTAL 259.9 280.6 264.4 306.0 262.1 275.9 266.1 307.1
SANOMA NEWS
Helsingin Sanomat 59.1 56.7 55.5 64.1 58.7 55.4 53.3 61.1
Ilta-Sanomat 19.9 20.7 21.1 21.6 18.4 19.8 19.6 20.3
Other publishing 25.3 25.6 23.5 25.0 25.9 26.8 24.2 26.9
Other businesses 34.4 33.1 32.0 33.4 36.2 35.9 34.9 36.6
Eliminations -29.3 -27.6 -27.4 -29.2 -31.6 -30.9 -30.8 -32.0
--------------------------------------------------------------------------------
TOTAL 109.4 108.5 104.8 114.9 107.7 107.1 101.2 112.9
SANOMA ENTERTAINMENT 41.5 44.6 20.8 31.3 40.3 40.6 35.0 41.1
SANOMA LEARNING & LITERATURE
Learning 29.9 85.0 100.6 33.7 30.6 81.6 94.3 32.7
Language services 6.9 6.2 5.2 8.9 8.3 6.2 6.7 6.3
Literature and other 23.6 17.2 18.0 24.8 24.6 17.0 19.3 28.0
businesses
Eliminations -2.3 -2.9 -2.5 -2.2 -2.6 -2.8 -2.7 -2.3
--------------------------------------------------------------------------------
TOTAL 58.2 105.5 121.2 65.1 60.8 101.9 117.6 64.7
SANOMA TRADE
Kiosk operations 91.9 104.9 99.2 102.4 89.9 104.5 99.3 110.5
Trade services 51.9 60.8 57.6 60.1 50.5 57.4 59.4 60.6
Bookstores 26.0 19.9 31.6 43.2 27.3 19.7 31.8 44.5
Movie operations 25.4 19.9 20.7 23.9 23.6 18.0 22.7 23.6
Eliminations -3.4 -4.0 -3.1 -3.5 -3.6 -3.9 -4.1 -4.0
--------------------------------------------------------------------------------
TOTAL 191.8 201.4 206.0 226.1 187.7 195.7 209.2 235.3
Other companies and -23.0 -25.3 -26.7 -26.0 -22.7 -24.1 -28.0 -27.5
eliminations
--------------------------------------------------------------------------------
TOTAL 637.9 715.4 690.6 717.3 636.0 697.2 701.1 733.6
NET SALES BY BUSINESS
EUR million 1-12/ 1-12/
2010 2009
SANOMA MAGAZINES
Sanoma Magazines Netherlands 490.4 493.2
Sanoma Magazines International 214.9 211.3
Sanoma Magazines Belgium 208.3 212.3
Sanoma Magazines Finland 201.4 198.8
Eliminations -4.2 -4.3
-------------------------------------------------
TOTAL 1,110.9 1,111.2
SANOMA NEWS
Helsingin Sanomat 235.4 228.4
Ilta-Sanomat 83.3 78.2
Other publishing 99.5 103.8
Other businesses 132.9 143.7
Eliminations -113.5 -125.2
-------------------------------------------------
TOTAL 437.6 428.9
SANOMA ENTERTAINMENT 138.2 157.1
SANOMA LEARNING & LITERATURE
Learning 249.3 239.1
Language services 27.1 27.5
Literature and other businesses 83.6 88.9
Eliminations -9.9 -10.4
-------------------------------------------------
TOTAL 350.1 345.1
SANOMA TRADE
Kiosk operations 398.4 404.2
Trade services 230.4 227.9
Bookstores 120.6 123.3
Movie operations 90.0 88.0
Eliminations -14.0 -15.6
-------------------------------------------------
TOTAL 825.4 827.8
Other companies and eliminations -101.0 -102.3
-------------------------------------------------
TOTAL 2,761.2 2,767.9
OPERATING PROFIT BY DIVISION (BY QUARTER)
EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
2010 2010 2010 2010 2009 2009 2009 2009
Sanoma Magazines 25.8 41.0 22.6 31.2 15.5 30.2 23.1 27.4
Sanoma News 15.6 8.9 15.7 15.9 6.0 3.5 11.8 10.8
Sanoma Entertainment 6.2 187.6 1.6 0.4 6.1 6.9 3.8 3.9
Sanoma Learning & Literature -6.4 25.1 45.5 -17.2 -6.9 25.1 33.1 -12.8
Sanoma Trade 2.9 3.1 -22.1 3.0 3.8 3.8 9.7 6.7
Other companies and eliminations -3.7 -4.7 0.5 -6.1 -3.7 -4.3 -4.4 -3.7
------------------------------------------------------------------------------
TOTAL 40.4 261.0 63.9 27.4 20.9 65.1 77.1 32.3
OPERATING PROFIT BY DIVISION (BY YEAR)
EUR million 1-12/ 1-12/
2010 2009
Sanoma Magazines 120.6 96.3
Sanoma News 56.1 32.2
Sanoma Entertainment 195.8 20.7
Sanoma Learning & Literature 47.1 38.5
Sanoma Trade -13.1 24.0
Other companies and eliminations -13.9 -16.2
---------------------------------------------
TOTAL 392.7 195.4
SEGMENT INFORMATION
The operating segments of the Sanoma Group in 2010 comprised five divisions:
Sanoma Magazines, Sanoma News, Sanoma Entertainment, Sanoma Learning &
Literature and Sanoma Trade. The segmentation is based on business model and
product differences. The media business, based on advertising and circulation
sales, is divided into three segments: Sanoma Magazines is responsible for
magazines, Sanoma News for newspapers and Sanoma Entertainment for TV business.
Sanoma Learning & Literature's business is mainly B2B business. Sanoma Trade, on
the other hand, operates on a retail business model. In addition to the Group
eliminations column unallocated/eliminations includes Sanoma Corporation and
real estate companies as well as items not allocated to segments.
Segment assets do not include cash and cash equivalents, interest-bearing
receivables and tax receivables. Transactions between segments are based on
market prices.
Sanoma Divisions 1.1-31.12.2010
Lear- Unallo-
Enter- ning & cated/ Con-
Maga- tain- Lite- elimi- soli-
EUR million zines News ment rature Trade nations dated
----------------------------------------------------------------------
External net sales 1,107.9 431.7 135.8 334.8 751.5 -0.5 2,761.2
Internal net sales 3.0 5.9 2.5 15.2 73.9 -100.5
NET SALES, TOTAL 1,110.9 437.6 138.2 350.1 825.4 -101.0 2,761.2
OPERATING PROFIT 120.6 56.1 195.8 47.1 -13.1 -13.9 392.7
Share of results in
associated companies -27.6 0.3 3.1 0.0 0.3 -23.9
Financial income 11.1 11.1
Financial expenses 23.8 23.8
RESULT BEFORE TAXES 356.0
SEGMENT ASSETS 1,509.3 324.9 281.8 551.8 410.3 4.8 3,082.8
Sanoma Divisions 1.1-31.12.2009
Lear- Unallo-
Enter- ning & cated/ Con-
Maga- tain- Lite- elimi- soli-
EUR million zines News ment rature Trade nations dated
----------------------------------------------------------------------
External net sales 1,108.8 420.5 155.5 329.9 753.3 -0.2 2,767.9
Internal net sales 2.4 8.4 1.6 15.3 74.5 -102.1
NET SALES, TOTAL 1,111.2 428.9 157.1 345.1 827.8 -102.3 2,767.9
OPERATING PROFIT 96.3 32.2 20.7 38.5 24.0 -16.2 195.4
Share of results in
associated companies -4.4 0.2 -0.1 0.4 -3.9
Financial income 22.5 22.5
Financial expenses 52.6 52.6
RESULT BEFORE TAXES 161.4
SEGMENT ASSETS 1,519.1 345.4 125.0 550.4 439.1 3.8 2,982.7
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 31.12.2010 31.12.2009
Carrying amount at the beginning of the period 484.2 510.4
Increases 50.7 46.0
Acquisition of operations 0.4 1.0
Decreases -5.4 -2.9
Disposal of operations -31.8 0.0
Depreciation for the period -61.8 -68.5
Impairment losses for the period -1.0 -1.6
Exchange rate differences and other changes -6.1 0.0
--------------------------------------------------------------------
Carrying amount at the end of the period 429.3 484.2
At the end of the reporting period the commitments for acquisitions of tangible
assets were EUR 4,0 million (2009: EUR 0.0 million).
EFFECT OF ACQUISITIONS ON THE CONSOLIDATED BALANCE SHEET
EUR million 1-12/ 1-12/
2010 2009
Acquisition costs 37.1 6.7
Fair value of acquired net assets 14.5 2.8
Recognised in equity -18.7
Recognised in income statement -0.5
---------------------------------------------------------
Goodwill 3.5 3.9
Negative goodwill in income statement -0.9
---------------------------------------------------------
Change in goodwill 3.5 4.8
CONTINGENT LIABILITIES
EUR million 31.12.2010 31.12.2009
Contingencies for own commitments
Mortgages 20.6 22.8
Pledges 6.7 6.8
Other items 0.6 0.4
TOTAL 27.8 30.0
Contingencies incurred on behalf of associated companies
Guarantees 10.5 10.5
TOTAL 10.5 10.5
Contingencies incurred on behalf of other companies
Guarantees 0.0 0.1
TOTAL 0.0 0.1
Other contingencies
Operating lease liabilities 249.1 255.4
Royalties 23.5 18.9
Other items 26.9 27.7
TOTAL 299.5 302.0
------------------------------------------------------------------------------
TOTAL 337.8 342.5
DERIVATIVE INSTRUMENTS
EUR million
Fair values 31.12.2010 31.12.2009
Interest rate derivatives
Interest rate swaps 0.1
KEY EXCHANGE RATES
1-12/ 1-12/
Average rate 2010 2009
EUR/CZK (Czech Koruna) 25.36 26.52
EUR/HUF (Hungarian Forint) 276.04 280.30
EUR/PLN (Polish Zloty) 4.01 4.33
EUR/RUB (Russian Rouble) 40.45 44.07
EUR/SEK (Swedish Crown) 9.55 10.61
Closing rate 31.12.2010 31.12.2009
EUR/CZK (Czech Koruna) 25.06 26.47
EUR/HUF (Hungarian Forint) 277.95 270.42
EUR/PLN (Polish Zloty) 3.98 4.10
EUR/RUB (Russian Rouble) 40.82 43.15
EUR/SEK (Swedish Crown) 8.97 10.25
Press Conference
Press and analyst meeting will be held in English by President and CEO Harri-
Pekka Kaukonen and CFO Kim Ignatius, at 11:00 am at Sanomatalo, Töölönlahdenkatu
2, Helsinki. Webcast of the event can be viewed at Sanoma.com either live or
later on as on demand. Questions to the presenters can be asked also by phone
during the meeting.
The presentation material of the press and analyst meeting will be available on
Sanoma's website when the press and analyst meeting has started.
Sanoma's 1Q11 Interim Report will be published on 3 May 2011 at approximately
11 am Finnish time.
Sanoma Corporation
Kim Ignatius
Chief Financial Officer
Additional information: Sanoma's Group Communications, tel +358 105 19 5062 or
communications@sanoma.com
Sanoma.com
Sanoma inspires, informs and connects. As a diversified media group, we bring
information, experiences, education and entertainment to millions of people
every day. We make sure that quality content and interesting products and
services are easily available and meet the demands of our readers, viewers and
listeners. We offer a challenging and interesting working environment for nearly
20,000 people in over 20 countries throughout Europe. In 2009, the Group's net
sales totalled EUR 2.8 billion.
[HUG#1486855]
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