2008-05-09 11:10:00 CEST
2008-05-09 11:10:43 CEST
REGULATED INFORMATION
SanomaWSOY - Interim report (Q1 and Q3)
SanomaWSOY's Interim Report 1 January-31 March 2008
SanomaWSOY Corp. Stock Exchange Release 9 May 2008 at 12:10
During the period January-March, the net sales of the SanomaWSOY
Group increased by 2.9% to EUR 683.1 (663.7) million. Operating
profit improved to EUR 72.7 (54.0) million. The major non-recurring
capital gains included in the operating profit amounted to EUR 23.5
(1.2) million. Earnings per share were EUR 0.34 (0.22). The Group's
outlook for 2008 is unchanged.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2008 2007 % 2007
Net sales 683.1 663.7 2.9 2,926.3
Operating profit 72.7 54.0 34.7 343.8
% of net sales 10.6 8.1 11.7
Operating profit excluding major
non-recurring capital gains 49.2 52.8 -6.7 303.5
% of net sales 7.2 8.0 10.4
Balance sheet total 3,306.0 3,172.6 4.2 3,192.3
Capital expenditure 20.6 15.1 36.1 90.5
% of net sales 3.0 2.3 3.1
Equity ratio, % 44.4 46.1 45.4
Gearing, % 62.6 58.3 58.2
Interest-bearing liabilities 964.7 865.3 11.5 881.4
Net debt 860.4 792.6 8.6 793.3
Average number of employees 20,172 18,941 6.5 19,587
Average number of employees
(full-time equivalents) 17,187 16,335 5.2 16,701
Earnings/share, EUR 0.34 0.22 56.6 1.47
Earnings/share, diluted, EUR 0.34 0.21 58.0 1.46
Cash flow from operations/share, EUR 0.29 0.13 121.2 1.38
Equity/share, EUR 8.43 8.15 3.3 8.27
Market capitalisation 2,824.0 3,663.8 -22.9 3,196.2
Hannu Syrjänen, President and CEO"The first quarter of 2008 went well. Our net sales, adjusted for
changes in the Group structure, increased by 5.7%. Particularly
successful were our growth areas: educational publishing, online
operations, magazine publishing in Central Eastern Europe and Russia,
as well as kiosk operations. There were more challenges in newspaper
publishing where the comparable period was exceptionally strong, and
in the magazine business in the Netherlands where newsstand sales
fell. There are still uncertainties in the general development of the
economy.
In growing markets, investments have to be made for solidifying
future market positions. During the first quarter, we continued the
active development of our product and service portfolio by launching
magazines and online services, particularly in Central Eastern
Europe. Our distribution business in Russia advanced as Rautakirja
acquired 89 kiosks in the town of Rostov, Southern Russia.
Educational publishing completed the acquisition of Nowa Era in
Poland.
We also made progress on developed markets: several online services
were launched and acquired in the Netherlands, in Finland the TV
channels increased their viewing share, the number of broadband and
pay TV subscriptions increased and our magazines strengthened their
leading position. Sanoma also invested heavily in digital business.
During the first quarter, digital business accounted for almost 11%
of Group net sales, 6.5% excluding TV business. While developing our
digital business we will also take good care of our printed products.
Our goal is to be one of the leading media companies in Europe, with
focus on sustainable growth and profitability. We also believe in
value-adding market leadership in our chosen businesses."
Net sales
SanomaWSOY's net sales in January-March increased by 2.9%, totalling
EUR 683.1 (663.7) million. SanomaWSOY Education and Books, SWelcom
and Rautakirja increased their net sales. The net sales of Sanoma
Magazines decreased slightly as a result of divestments. The net
sales of Sanoma fell due to the decreases in newsstand sales and
advertising in free sheets. Net sales adjusted for changes in the
Group structure increased by 5.7%.
Advertising sales accounted for 26% (25%) of the Group's total net
sales. Particularly the online advertising grew. In geographical
terms, Finland accounted for 53% (52%) of net sales with other EU
countries accounting for 42% (43%) and other countries for 5% (5%).
Result
The operating profit of SanomaWSOY was EUR 72.7 (54.0) million, or
10.6% (8.1%) of net sales. Operating profit included major
non-recurring capital gains of EUR 23.5 (1.2) million from the
divestment of movie distributor R.C.V. Entertainment. Operating
profit excluding these capital gains decreased by 6.7%, totalling EUR
49.2 (52.8) million. SanomaWSOY Education and Books, SWelcom and
Rautakirja improved their performance. The results of Sanoma
Magazines were reduced by the decreased revenues from newsstand sales
in the Netherlands and increased personnel expenses. Personnel
expenses were in particular increased by investments in new
businesses. The operating profit of Sanoma was mainly reduced by the
fall in tabloid sales.
SanomaWSOY's net financial items totalled EUR -9.2 (-7.1) million.
Financial income amounted to EUR 3.5 (4.8) million. Financial
expenses amounted to EUR 12.7 (11.9) million and comprised primarily
interest costs of EUR 10.6 (8.7) million on interest-bearing
liabilities. Financial expenses increased due to the general rise in
interest rates.
The result before taxes was EUR 66.5 (48.6) million and earnings per
share were EUR 0.34 (0.22).
Balance sheet and financial position
At the end of March, the consolidated balance sheet totalled EUR
3,306.0 (3,172.6) million. Cash flow from operations was EUR 46.2
(21.3) million, and cash flow per share was EUR 0.29 (0.13). The cash
flow from operations was improved by the positive development of
working capital from the comparable period. Due to the nature of the
business, the amount of working capital fluctuates strongly from one
quarter to another.
SanomaWSOY's equity ratio was 44.4% (46.1%) at the end of March,
while gearing increased to 62.6% (58.3%). Equity increased to EUR
1,375.3 (1,359.6) million. A total of EUR 38.6 million of
unrestricted equity was spent on the acquisition of own shares.
Interest-bearing liabilities increased to EUR 964.7 (865.3) million
and net debt to EUR 860.4 (792.6) million. The increase in debt was
mainly caused by the acquisition of Nowa Era. At the end of March,
the Group's cash and cash equivalents totalled EUR 104.2 (72.7)
million.
SanomaWSOY has maintained a good financial position as a result of,
for example, the strong consolidated balance sheet and the loan
facility renewed in August 2007. At the end of 2007, the Group had a
net debt/EBITDA ratio of 1.6.
Investments, acquisitions and divestments
In January-March, investments in tangible and intangible assets
totalled EUR 20.6 (15.1) million, and they related, for example, to
property renovations, ICT systems and replacement investments. R&D
expenditure was recorded at EUR 1.0 (0.5) million, or 0.2% (0.1%) of
net sales. The definition of R&D expenses at SanomaWSOY has been
amended so that the costs of launching new products are no longer
entered as R&D expenses. The figures for the comparable period have
been adjusted accordingly.
On 10 January 2008, Sanoma Magazines divested the Dutch movie
distribution company R.C.V. Entertainment. In 2007, the company's net
sales amounted to EUR 34.2 million and operating profit to about EUR
5 million. Capital gains amounting to EUR 23.5 million were recorded
in the first quarter of 2008 for the transaction.
On 11 March 2008, SanomaWSOY Education and Books finalised its
acquisition of the Polish educational publisher Nowa Era. Nowa Era's
net sales in 2007 amounted to about EUR 43 million, and the company's
profitability was in line with the general level of profitability in
educational publishing. The impact of the acquisition on SanomaWSOY's
results and balance sheet will be established in more detail during
2008 when the process of integrating business operations is
completed.
Dividend and other profit distributions
The distributable funds of SanomaWSOY Corporation for 2007 amounted
to EUR 503.3 million, of which profit for the year made up EUR 266.8
million. In line with the Board's proposal, the Annual General
Meeting paid out a dividend of EUR 1.00 (0.95) per share. The record
date for 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 337.1 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
During the first quarter, the total volume of trading in SanomaWSOY
shares corresponded to 21% (12%) of the average number of shares on
issue during the period, or to about 34.7 million shares.
SanomaWSOY's total stock exchange turnover was EUR 589.7 (439.6)
million.
The volume-weighted average price of a SanomaWSOY share during
January-March was EUR 16.97, with a low of EUR 15.30 and a high of
EUR 19.87. At the end of March, SanomaWSOY's market capitalisation,
excluding treasury shares held by the Company, was EUR 2,824.0
(3,663.8) million and the closing price of the share was EUR 17.56
(22.21). At the end of March, the Company had 17,452 shareholders,
and foreign holdings accounted for 9.8% (11.4%) of the shares and
voting rights. There were no major changes in share ownership during
the review period and SanomaWSOY did not issue any flagging
announcements.
Under the 2007 AGM authorisation, SanomaWSOY began acquisitions of
its own shares on 10 August 2007. During January-March 2008, the
Company acquired a total of 2,319,097 of its own shares. A total of
EUR 38.6 million was used for the acquisitions. The Board of
Directors of SanomaWSOY decided on 7 February 2008 to cancel all
treasury shares in the Company's possession on that date, a total of
3,136,000 shares, some of which had already been procured in 2007.
The share buybacks continued after the cancellation, and at the end
of March, the Company had a total of 1,760,000 treasury shares, or
1.1% of the Company's total shares and voting rights. The total
accountable par of the shares owned by the Company was EUR
756,800.00.
During the review period, the share capital of SanomaWSOY was
increased by EUR 136,444.16, equalling to 317,312 new shares. The
first increase in share capital took place on 3 January 2008, when
292,462 shares were subscribed using the 2001A option rights and
24,350 shares were subscribed using the 2001B option rights. Trading
in these new shares began on 4 January 2008.The second increase of
share capital was entered into the Trade Register on 18 February
2008, when 500 shares were subscribed using the 2001B option rights.
Trading in these new shares started on 19 February 2008. The
cancellation of treasury shares was also entered in the Trade
Register on 18 February 2008. At the end of March, the registered
share capital of SanomaWSOY was EUR 71,258,354.72 and the number of
outstanding shares was 162,581,104.
Board of Directors and Management of the Company
The AGM of 1 April 2008 confirmed the number of SanomaWSOY's Board
members as 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.
After the review period on 9 April 2008, 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. The current CFO Matti Salmi
will retire according to his own wish during the summer. Sven
Heistermann was appointed Chief Strategy Officer (CSO) and Ben
Tiesnitsch Chief Human Resources Officer (CHRO) of the Group. The
appointments are a continuation of the management model renewal
announced in April 2007.
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, but the
acquisitions of own shares have not commenced yet.
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. 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 or around 1 October 2008 onwards.
At the same time, the name of Sanoma Corporation will change in line
with an earlier resolution. From 1 October, the new name of the
Division 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.
The AGM also decided to reduce the premium fund of SanomaWSOY
Corporation by EUR 171,475,030.04, transferring all the funds in the
premium fund on the AGM date to the Company's reserve for invested
unrestricted equity. The reduction in the premium fund will take
effect without compensation, and it will not have effect on the
number of the Company shares, rights carried by the shares, the
proportional ownership of the Company, or in the terms and conditions
of the Company's stock option schemes.
The AGM further decided that works of art of considerable cultural
historical significance owned by the Company will be transferred into
the ownership of the Helsingin Sanomat Foundation, to the extent and
with the conditions to be decided later by the Board of Directors.
The right of possession of the works of art shall remain with the
Company.
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 annually.
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. Newspapers have fewer issues during
the Easter week and this reduces advertising revenues. The net sales
of press distribution falls when there is less to sell and fewer
selling days than in an ordinary week. Fewer selling days also
reduces bookstore sales. The volume of kiosk trade increases during
Easter when other retailers are closed. Even though exact date of
Easter does make a difference when comparing quarters in these
businesses on a year-to-year basis, it has little impact on the
consolidated net sales of the SanomaWSOY Group.
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 of the current year are related to the growth of media
advertising and consumer spending.
European economies are projected to continue to grow in 2008, but at
a slower rate than in 2007. The uncertainties regarding the
development of economy and the reliability of forecasts for the
current year have increased. SanomaWSOY is prepared to intensify its
cost saving activities to safeguard its profit growth if the general
economic development is considerably weakened.
Research institutions predict that GDP will grow by 2.7% in Finland,
1.9% in the Netherlands and 1.9% in Belgium. The growth rate is
expected to be 2.8% in Hungary, 4.7% in the Czech Republic and 6.7%
in Russia.
According to the estimates by ZenithOptimedia, media advertising will
grow in the primary market areas of SanomaWSOY faster than GDP in
2008. Magazine advertising is estimated to grow in the Netherlands by
4%, in Belgium by 3% and in the Czech Republic by 2%, while it is
expected to decrease by 0.5% in Hungary. In Russia, advertising in
printed media is expected to increase by 21%. In Finland,
ZenithOptimedia estimates newspaper advertising to grow by 2%,
magazine advertising by 3 % and TV advertising by 5%.
In 2008, private consumption is estimated to increase by 2.9% in
Finland, 2.1% in the Netherlands, 1.5% in Belgium, 4.1% in the Czech
Republic, 0.4% in Hungary and 12.3% in Russia.
Outlook for 2008
In 2008, SanomaWSOY's net sales are projected to grow in line with
the previous year. In 2007, Group net sales increased by 6.7%.
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.
The forecast 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 increased in all businesses, except in Sanoma Magazines
Netherlands where divestments of operations and lower single copy
sales reduced sales.
- Investments in portfolio continued: in total, five magazine titles
and more than ten online services were launched or acquired.
- Movie distributor R.C.V. Entertainment was divested in January.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2008 2007 % 2007
Net sales 285.5 287.1 -0.6 1,238.1
Operating profit 48.2 32.1 49.9 160.9
% of net sales 16.9 11.2 13.0
Operating profit excluding major
non-recurring capital gains 24.7 30.9 -20.2 139.7
% of net sales 8.6 10.8 11.3
Balance sheet total 1,965.1 1,894.8 3.7 1,937.5
Capital expenditure 5.1 3.4 51.3 20.6
Average number of employees 5,854 5,485 6.7 5,623
Average number of employees
(full-time equivalents) 5,393 5,037 7.1 5,169
OPERATIONAL INDICATORS * 1-3/2008 1-3/2007
Number of magazines published 319 305
Magazine copies sold, thousands 104,242 108,128
Advertising pages sold 14,487 13,549
* Including joint ventures
In January-March Sanoma Magazines' net sales decreased by 0.6% and
totalled EUR 285.5 (287.1) 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
1.9%. Of the Division's net sales, 18% (17%) came from Finland.
The Division's advertising sales increased by 10% and represented 32%
(29%) 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 33%.
Circulation sales decreased by 1% and represented 58% (59%) of Sanoma
Magazines' net sales. The fall was mainly the result of declining
single copy sales in the Netherlands. Subscription sales developed
well, particularly in the Netherlands and Finland.
Sanoma Magazines Netherlands' net sales fell to EUR 111.7 (119.8)
million. This was due to structural changes and the decline in single
copy sales. Sanoma Magazines Netherlands has strongly focused its
operations: In June 2007, it divested its puzzle portfolio, which
affected single copy sales. In January 2008, it acquired the
remaining shares of magazine publisher Mood for Magazines, and more
importantly, 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-February 2008. Sanoma
Magazines Netherlands' advertising sales grew, due to new operations
and online advertising sales. Online advertising sales grew by 24%
and outperformed market growth. The readers' market in the
Netherlands shows signs of growth compared to the end of 2007. Sanoma
Magazines Netherlands increased its subscription revenues, but single
copy sales are lagging behind the comparable period and therefore the
total circulation sales fell. Sanoma Magazines Netherlands continues
its investments in portfolio. During the first quarter, several major
online sites and a cycling magazine Procycling were launched.
Net sales in Sanoma Magazines International grew to EUR 70.1 (65.8)
million. Growth primarily came from increased advertising sales,
particularly from Russia and Hungary, where Sanoma Budapest is also
strong in online advertising market. Advertising sales grew in almost
all countries. Circulation sales in Sanoma Magazines International
were slightly behind the comparable period.
Sanoma Magazines International continued its active launch programme.
In the first quarter, two magazines and five brand extensions were
launched. Two magazines were discontinued. In Croatia, Adria Media
acquired the leading position in the wedding segment both in print
and online. In other countries, online operations grew with four new
sites related to cooking, parenting and blogging. After the review
period, Sanoma Magazines International announced its intention to
acquire 55% of shares in the Russian magazines publisher Lux Media
and some 68% in the Bulgarian internet company Net Info. Both
acquisitions are subject to approvals from the antitrust officials.
Sanoma Magazines Belgium's net sales grew to EUR 54.2 (52.5) million.
Advertising sales in Sanoma Magazines Belgium increased slightly, but
circulation sales were behind the comparable period due to lower
single copy sales. Several magazines had fewer issues than in the
comparable period due to timing differences. In general, the share of
the magazine advertising from total advertising has increased and the
long-term decline in the circulation market seems to have stabilized
in Belgium.
Net sales in Sanoma Magazines Finland totalled EUR 50.7 (50.1)
million. Subscription sales grew, but due to timing differences, also
in Finland major titles had fewer issues than in the comparable
period, which slowed down sales growth. Single copy and advertising
sales remained at the previous year's level. According to TNS Gallup
Adex advertising in consumer magazines in Finland fell by 1% in
January-March. Sanoma Magazines Finland improved its market share
both in advertising and the readers market: Sanoma Magazines
Finland's total circulation increased in 2007 and several titles
again reached record high circulation and readership figures. Sanoma
Magazines Finland made two launches in the first quarter.
Sanoma Magazines' operating profit in January-March improved and
amounted to EUR 48.2 (32.1) million. The result included EUR 23.5
(1.2) 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 fell by 20.2% to EUR 24.7 (30.9) million.
Sanoma Magazines Netherlands' operating profit improved significantly
due to sales gains. The operational result fell due to the divestment
of operations, declining single copy sales and investments in the
print and online portfolio. Sanoma Magazines International's
operational result improved, 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 timing differences in the number of published issues and
increased marketing costs.
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.
- Helsingin Sanomat continued to grow, in particular online
advertising developed well.
- The discontinuation of the printed version of Taloussanomat,
together with the decline of tabloid and free sheet markets, reduced
the net sales of the Division.
- The investments in digital services were strong, and early in the
year, Iltasanomat.fi became the largest online service in Finland.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2008 2007 % 2007
Net sales 120.8 122.4 -1.2 480.8
Operating profit 17.9 19.6 -8.4 67.6
% of net sales 14.8 16.0 14.1
Operating profit excluding major
non-recurring capital gains 17.9 19.6 -8.4 67.6
% of net sales 14.8 16.0 14.1
Balance sheet total 449.5 502.3 -10.5 445.0
Capital expenditure 3.7 2.9 26.5 17.7
Average number of employees 2,724 2,624 3.8 2,716
Average number of employees
(full-time equivalents) 2,407 2,326 3.5 2,411
OPERATIONAL INDICATORS
ADVERTISING, COLUMN KM 1-3/2008 1-3/2007
Helsingin Sanomat 10.4 11.2
Ilta-Sanomat 1.8 1.6
Free sheets 7.6 9.7
Distribution of free sheets, millions 24.0 29.8
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 1-3/2008 1-3/2007
Iltasanomat.fi 1,316,851 916,501
HS.fi 913,506 727,736
Huuto.net 462,371 403,568
Oikotie.fi 325,253 293,888
Taloussanomat.fi 298,424 176,955
Keltainenpörssi.fi 160,099 112,819
Sanoma's net sales in January-March decreased by 1.2%, totalling EUR
120.8 (122.4) million. Net sales increased in Helsingin Sanomat but
decreased in the Ilta-Sanomat business unit and in other publishing.
Net sales adjusted for changes in the Group structure decreased by
2.7%.
In January-March, newspaper advertising in Finland decreased by over
1% according to TNS Gallup Adex. Job advertising increased by 11%.
Advertising in free sheets fell by 10%. Online advertising included
in statistics developed strongly, growing by 30%. Online advertising
in Sanoma exceeded market growth and increased by 46%, but the total
advertising revenues of the Division decreased by 1%, amounting to
55% (55%) of net sales. The decrease was particularly caused by the
discontinuation of the printed version of Taloussanomat and the
decline in free sheet markets. Advertising sales grew strongly in the
Ilta-Sanomat business unit and slightly in the Helsingin Sanomat and
Sanoma Lehtimedia business units. During the comparable period, there
was very strong growth in advertising sales due to the parliamentary
elections, for example.
The circulation figures of subscribed newspapers have developed
rather steadily in Finland during the last few years, but the tabloid
markets have been declining. In January-March, the tabloid markets in
Finland decreased by 6%. During the first quarter, the circulation
sales of Sanoma decreased by 5% as a result of a distinct reduction
in newsstand sales. The circulation sales accounted for 37% (39%) of
the Division's net sales.
The Helsingin Sanomat business unit increased its net sales to EUR
74.1 (72.3) million as there was growth in both advertising and
circulation sales. The increase in advertising sales mainly came from
online advertising which increased by 39%. Growth was also generated
by housing-related advertising and job advertising which grew by 3%.
Helsingin Sanomat continued to develop its services during the first
months of the year: Electronic services grew stronger as ownership in
Netwheels Oy, a company specialising in car trade systems, was
increased to 55% in January. The net sales of Helsingin Sanomat's
electronic products, such as the online service of HS and classified
online portal Oikotie, showed excellent development. In March, HS
Teema magazine was launched.
The net sales of the Ilta-Sanomat business unit decreased to EUR 22.5
(23.6) million. The unit increased its advertising sales; online
advertising grew in particular. The circulation sales of the business
unit were clearly below the comparable period. The Finnish tabloid
markets have been declining for a long time now. Ilta-Sanomat
commanded a 57.6% (58.2%) share of the tabloid market. Ilta-Sanomat
continued to invest on its online service. According to TNS Gallup,
Iltasanomat.fi has been the online service with most visitors in
Finland almost throughout the early part of the year. Classified
advertising and eCommerce are also being further developed. For
example, the online auction service Huuto.net, with a steady increase
in the volume of transactions completed through it, launched in
February new services aimed at businesses.
The net sales from other publishing decreased to EUR 22.4 (24.3)
million. The decrease was affected by the discontinuation of the
printed version of Taloussanomat. The dailies of Sanoma Lehtimedia
slightly increased their advertising and circulation sales. Metro was
the most successful of the free sheets published by Sanoma
Kaupunkilehdet. The online service of free sheet Vartti,
concentrating on real-time local news, expanded. Sanoma Digital,
focusing on online business, launched in February its Motomania.fi
site for motorcycle enthusiasts. Taloussanomat which in the beginning
of the year concentrated its resources on online has continued to
increase its visitor volumes.
Net sales from other operations, mainly comprising internal services,
were EUR 38.5 (38.5) million.
The operating profit of Sanoma decreased by 8.4% to EUR 17.9 (19.6)
million. The decrease in profit was mainly due to the decline in
tabloid markets 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 e.g. due to investments
in sales and in development of digital business. Earnings from other
operations were up.
The strongest growth of 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 are estimated to increase and operating
profit excluding major non-recurring capital gains is expected to
improve.
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 a growing business
information and service business.
- Educational publishing's net sales grew clearly.
- Language services continued to grow.
- Acquisition of Polish educational publisher Nowa Era was closed in
March.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2008 2007 % 2007
Net sales 58.3 52.2 11.7 322.5
Operating profit -4.3 -6.5 33.2 44.5
% of net sales -7.4 -12.4 13.8
Operating profit excluding major
non-recurring capital gains -4.3 -6.5 33.2 44.5
% of net sales -7.4 -12.4 13.8
Balance sheet total 649.5 595.3 9.1 585.0
Capital expenditure 2.8 1.2 133.2 7.7
Average number of employees 2,874 2,723 5.5 2,769
Average number of employees
(full-time equivalents) 2,389 2,293 4.2 2,345
OPERATIONAL INDICATORS 1-3/2008 1-3/2007
EDUCATIONAL PUBLISHING
Number of new titles published, books 323 300
Number of new titles published, electronic products 73 55
PUBLISHING
Number of new titles published, books 146 142
Number of new titles published, electronic products 50 10
Books sold, millions 2.2 2.1
SanomaWSOY Education and Books' net sales in January-March increased
by 11.7% and totalled EUR 58.3 (52.2) million. Net sales increased in
all businesses. Growth was particularly strong in the international
growth areas, educational publishing and language services. Net sales
adjusted for changes in the Group structure increased by 9.6%. A
total of 48% (45%) of the Division's net sales came from outside of
Finland.
Educational publishing's net sales grew to EUR 24.6 (20.0) million.
Most growth came from the Dutch operations, largely due to the shift
of sales from the second quarter to the first quarter. In Hungary and
Belgium, sales were in line with the previous year. In Finland, net
sales in the first quarter were slightly behind the comparable
period. The eLearning unit in Poland had a slow start to the year.
Net sales in publishing amounted to EUR 27.5 (26.3) million. Most
growth came from language services. General literature was slightly
up from the comparable period. Retail sales in Finland grew, but
direct sales remained under pressure. Growth in language services was
strong. 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 12.0
(12.0) million.
The operating loss, typical for SanomaWSOY Education and Books at the
beginning of the year, decreased and the result was EUR -4.3 (-6.5)
million. The result improved clearly in educational publishing,
mainly due to earlier sales than in the comparable period. Operating
profit in publishing increased significantly with Finnish general
literature and language services improving their results. Results in
other operations fell.
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 grows the educational publishing business and
therefore increases 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 improve clearly.
SWelcom
SWelcom offers consumers entertaining experiences in 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 TV company and a major provider of
broadband services.
- The pay TV subscriptions of Welho increased considerably, and also
the number of broadband subscriptions already exceeds 100,000.
- JIM reaches over one million viewers each day.
- Anu Nissinen started as President of SWelcom.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2008 2007 % 2007
Net sales 40.5 35.2 15.1 146.0
Operating profit 4.0 2.9 38.8 15.8
% of net sales 10.0 8.3 10.8
Operating profit excluding major
non-recurring capital gains 4.0 2.9 38.8 15.8
% of net sales 10.0 8.3 10.8
Balance sheet total 163.3 163.0 0.2 168.2
Capital expenditure 3.0 2.7 10.2 14.8
Average number of employees 517 465 11.3 501
Average number of employees
(full-time equivalents) 472 431 9.7 457
OPERATIONAL INDICATORS 1-3/2008 1-3/2007
TV channels' share of Finnish TV advertising 29.1% 29.3%
TV channels' daily reach 48% 44%
TV channels' national commercial viewing share 29.2% 21.8%
TV channels' national viewing share 13.9% 10.6%
Number of connected households, thousands (31 320 308
March)
Number of pay TV subscriptions, thousands (31 103 69
March)
Number of broadband internet connections, thousands 101 90
(31 March)
The net sales of SWelcom in January-March increased by 15.1% to EUR
40.5 (35.2) million. This considerable increase in net sales was
brought about in particular by the growth of Welho and the new TV and
radio channels. Adjusted for changes in the Group structure, the
Division's net sales grew by 10.7%. Advertising sales accounted for
50% (56%) of SWelcom's net sales.
Largely due to the new channels, broadcast operations increased its
net sales to EUR 22.6 (20.1) million. In January-March, 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 29.1% (29.3%). The TV channels clearly
increased their shares of viewing numbers, and in March their share
of all TV viewing rose to 14.3% (11.1%). JIM, the channel launched in
February 2007, has constantly increased its share of viewers, and had
over one million viewers on many days early in the year.
According to the Association of Finnish Broadcasters, national radio
advertising grew by 11% in January-March. Nelonen Media strengthened
its market share to 11%. Radio Rock, the radio channel launched at
the beginning of 2007, reached a record-breaking 850,000 listeners on
a weekly basis in February. Radio Aalto has maintained its listener
numbers on the previous year's level while its average listening time
has continued to increase.
Welho's net sales increased strongly due to strong growth in pay TV,
broadband subscriptions and the sale of digital set-top boxes. The
100,000-mark in Welho's broadband subscriptions was reached in
January, and in pay TV services in February. The switch-over to the
era of digital TV was successful in the cable network which partly
contributed to the increase in demand for pay TV services. In autumn
2007, Welho launched new, revised pay TV packages that can be
augmented with individual channels. Early in the current year, Welho
launched, among others, six such additional channels.
Visitors in online gaming sites are on the increase at SWelcom. The
Pelikone.fi online game portal launched in August 2007, where users
can play games for free and also download their own games for use by
others, has become the most popular free gaming service in Finland
alongside quiz portal Alypaa.com.
The operating profit of SWelcom in January-March increased by 39% to
EUR 4.0 (2.9) million. This improvement was in particular brought
about by improved profitability of the broadcasting operations and
the positive development at Welho.
In line with its strategy, SWelcom concentrates on its core
businesses television, broadband services and entertainment services
to consumers. In January, SWelcom divested the operations of 2ndhead,
creator of corporate digital communications and marketing solutions.
The deal will have no significant impact on the Division's earnings
for 2008.
Anu Nissinen was appointed as the new President of SWelcom, effective
from 25 February 2008. Tapio Kallioja, President of the Division,
retired in line with his contract of employment on 31 March 2008.
SWelcom is continuing the development of its digital content and
media solutions business, and invests resources in the development of
its online community services.
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, particularly successful during
the first quarter were kiosks and movie theatres.
- The kiosk business is developing strongly in Russia. Rautakirja
has almost 200 kiosks now, mainly in the Moscow and Rostov regions.
- The movie theatre business continues to grow. Movie-goer numbers
have continued to grow, and new theatres will be opened during the
latter part of the year.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2008 2007 % 2007
Net sales 202.7 192.4 5.3 849.3
Operating profit 9.9 9.0 10.7 55.6
% of net sales 4.9 4.7 6.5
Operating profit excluding major
non-recurring capital gains 9.9 9.0 10.7 50.7
% of net sales 4.9 4.7 6.0
Balance sheet total 542.8 544.5 -0.3 565.0
Capital expenditure 6.1 4.5 36.4 28.4
Average number of employees 8,097 7,568 7.0 7,886
Average number of employees
(full-time equivalents) 6,425 6,177 4.0 6,234
OPERATIONAL INDICATORS 1-3/2008 1-3/2007
Customer volume in kiosk operations, thousands 50,754 50,889
Customer volume in bookstores, thousands 1,802 1,747
Customer volume in movie theatres, thousands 2,813 2,321
Number of copies sold (press distribution), 97,488 94,834
thousands
In January-March, Rautakirja's net sales grew by 5.3%, totalling EUR
202.7 (192.4) million. Net sales increased across all businesses.
Growth was particularly good in the kiosk business. Net sales
adjusted for changes in the Group structure increased by 6.5%. Of
Rautakirja's net sales, 33% (33%) came from outside Finland.
Net sales from kiosk operations increased to EUR 94.6 (86.9) million.
According to the Finnish Grocery Trade Association, the sales of
daily consumer goods grew by 10% in January-March. The sales of
R-kiosks in Finland developed favourably. Service products and
traditional kiosk products did particularly well. The product range
is under constant development. The first cash dispensers were
installed in kiosks in Helsinki during the review period. The
intention is to introduce cash dispensers to more than 500 kiosks in
Finland over the next few years. The net sales of kiosk business also
increased in the Baltic countries and Russia where operations
commenced in June 2007. At the end of March, Rautakirja strengthened
its position in the Russian kiosk business by acquiring the kiosk
company KP Roznitsa. 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 58.2 (56.2)
million. The main sources of growth were the February 2007
acquisition of the point-of-sale (POS) marketing company Printcenter,
and the Romanian market. In Finland, the newsstand sales of tabloids
and magazines both fell in the first part of the year. Net sales
increased in the Baltic countries, Russia and Romania. Rautakirja's
negotiations, announced in December 2007, with the Swiss publishing
company Ringier regarding the creation of a joint venture for the
Romanian press distribution market have ended for the moment. The
operations of Rautakirja's Romanian press distribution company
Hiparion as well as its co-operation with Ringier will continue as
before. In Lithuania in January, a transaction was finalised whereby
Rautakirja increased its holding in the Lithuanian press distribution
company Impress Teva to 100% and the company's new logistics centre
was commissioned in the town of Vievis. 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; as a result, the company's workforce will be reduced by
about one-third during 2008. The development of the press
distribution concept continued in Russia.
The net sales of bookstores were EUR 31.0 (29.6) million. Net sales
increased both in Finland and Estonia. In Finland, growth was
generated by the successful January sales of books and the last
Finnish volume of the Harry Potter books that hit the stores in
March. In Estonia, net sales were boosted, for example, by the new
stores opened in 2007. At the end of March, the bookstore chain
Suomalainen Kirjakauppa agreed to sell its magazine subscription
business to Lehtimarket, effective 1 May 2008. Suomalainen
Kirjakauppa is now concentrating on its core businesses, book trade
and online book trade.
Net sales from the entertainment business increased to EUR 24.4
(23.5) million. Net sales increased in all markets; the movie theatre
business developed particularly well in Lithuania. The net sales for
the comparable period included the multi-purpose arena in Hamburg
that was divested in October. The numbers of movie-goers continued to
increase strongly both in Finland and the Baltic countries. 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.
During the early part of the year, Rautakirja increased its operating
profit by 10.7% to EUR 9.9 (9.0) million. The kiosk operations and
entertainment business improved their operating profits considerably
as a result of increased sales. The operating profit of press
distribution decreased from the comparable period, a result of the
smaller volumes in Finland and the Netherlands. The results of the
bookstores were at the comparable period's level.
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. Rautakirja's goal is to achieve a strong position also in
Russia and participate actively in the development of the local
newspaper and magazine market.
In 2008, Rautakirja's net sales are expected 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
standards and interpretations applicable within the EU on 1 January
2008. SanomaWSOY 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. Definitions of key indicators are presented in
SanomaWSOY's Financial Statements 2007.
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED INCOME STATEMENT
EUR million 1-3/2008 1-3/2007 Change, % 1-12/2007
NET SALES 683.1 663.7 2.9 2,926.3
Other operating income 38.1 13.3 187.6 95.2
Materials and services 309.4 294.9 4.9 1,308.9
Personnel expenses 172.2 158.4 8.8 646.5
Other operating expenses 131.1 135.0 -2.9 572.7
Depreciation and impairment 35.8 34.6 3.3 149.7
losses
OPERATING PROFIT 72.7 54.0 34.7 343.8
Share in result of associated 3.0 1.8 70.5 12.4
companies
Financial income 3.5 4.8 -27.9 9.2
Financial expenses 12.7 11.9 6.4 44.9
RESULT BEFORE TAXES 66.5 48.6 36.8 320.4
Income taxes -12.2 -13.7 -11.6 -74.4
RESULT FOR THE PERIOD 54.4 34.9 55.8 246.1
Attributable to:
Equity holders of the Parent 54.5 35.5 53.5 242.8
Company
Minority interest -0.2 -0.6 -73.0 3.2
Earnings per share for result
attributable to the equity
holders
of the Parent Company:
Earnings per share, EUR 0.34 0.22 56.6 1.47
Diluted earnings per share, EUR 0.34 0.21 58.0 1.46
CONSOLIDATED BALANCE SHEET
EUR million 31.3.2008 31.3.2007 Change, % 31.12.2007
ASSETS
NON-CURRENT ASSETS
Tangible assets 501.8 565.6 -11.3 498.7
Investment property 9.4 10.0 -5.5 9.5
Goodwill 1,487.1 1,401.2 6.1 1,432.8
Other intangible assets 389.9 365.8 6.6 379.6
Interest in associated 73.4 70.3 4.4 75.2
companies
Available-for-sale financial 16.1 16.4 -1.9 15.9
assets
Deferred tax receivables 43.4 46.3 -6.4 42.4
Trade and other receivables 39.4 36.4 8.2 37.9
NON-CURRENT ASSETS, TOTAL 2,560.4 2,512.0 1.9 2,492.1
CURRENT ASSETS
Inventories 175.1 159.3 9.9 170.7
Income tax receivables 31.6 20.7 53.1 25.9
Trade and other receivables 433.5 407.9 6.3 415.4
Available-for-sale financial 1.1 0.0 0.1
assets
Cash and cash equivalents 104.2 72.7 43.4 88.1
CURRENT ASSETS, TOTAL 745.5 660.6 12.9 700.2
ASSETS, TOTAL 3,306.0 3,172.6 4.2 3,192.3
EQUITY AND LIABILITIES
EQUITY
Equity attributable to the
equity
holders of the Parent
Company
Share capital 71.3 71.0 0.4 71.3
Treasury shares -28.5 -51.6
Other equity 1,312.3 1,273.9 3.0 1,326.2
1,355.0 1,344.9 0.8 1,345.9
Minority interest 20.3 14.8 37.6 18.3
EQUITY, TOTAL 1,375.3 1,359.6 1.2 1,364.2
NON-CURRENT LIABILITIES
Deferred tax liabilities 106.7 95.6 11.6 103.9
Pension obligations 44.4 57.1 -22.2 45.2
Provisions 8.7 7.8 12.3 8.8
Interest-bearing liabilities 338.0 43.7 328.1
Trade and other payables 29.6 34.7 -14.8 28.3
CURRENT LIABILITIES
Provisions 7.8 7.4 6.7 7.8
Interest-bearing liabilities 626.7 821.6 -23.7 553.4
Income tax liabilities 23.5 31.6 -25.6 8.4
Trade and other payables 745.2 713.6 4.4 744.3
LIABILITIES, TOTAL 1,930.6 1,812.9 6.5 1,828.1
EQUITY AND LIABILITIES, 3,306.0 3,172.6 4.2 3,192.3
TOTAL
CHANGES IN CONSOLIDATED EQUITY
EUR million Equity attributable to
the equity holders of
the Parent Company
Share Trea Other Total Minor Equity,
capital sury equity ity total
sha inter
res est
EQUITY AT 1 JAN 2007 70.9 1,234.8 1,305.7 17.0 1,322.7
Change in translation 1.1 1.1 0.0 1.1
differences
Other items 0.0 0.3 0.3 0.3
Items recognised directly 0.0 1.4 1.4 0.0 1.4
in equity, total
Result for the period 35.5 35.5 -0.6 34.9
TOTAL RECOGNISED INCOME
AND EXPENSES 0.0 36.9 36.9 -0.6 36.3
Conversion of capital 0.0 0.7 0.8 0.0 0.8
notes
Use of share options 0.0 0.0 0.0 0.0 0.0
Expense recognition of 0.0 1.4 1.4 0.0 1.4
options granted
Dividends paid 0.0 0.0 -1.1 -1.1
Change in minority -0.4 -0.4
interests
EQUITY AT 31 MARCH 2007 71.0 1,273.9 1,344.9 14.8 1,359.6
EQUITY AT 1 JAN 2008 71.3 -51.6 1,326.2 1,345.9 18.3 1,364.2
Change in translation -4.7 -4.7 0.0 -4.6
differences
Other items 0.0 -0.4 -0.4 -0.4
Items recognised directly 0.0 -5.0 -5.0 0.0 -5.0
in equity, total
Result for the period 54.5 54.5 -0.2 54.4
TOTAL RECOGNISED INCOME
AND EXPENSES 0.0 49.5 49.5 -0.2 49.4
Acquisition of treasury -38.6 0.0 -38.6 -38.6
shares
Cancellation of treasury 61.6 -61.6 0.0 0.0 0.0
shares
Use of share options 0.0 0.0 0.0 0.0 0.0
Expense recognition of 0.0 1.3 1.3 0.0 1.3
options granted
Dividends paid 0.0 0.0 -1.4 -1.4
Change in minority -3.1 -3.1 3.6 0.5
interests
EQUITY AT 31 MARCH 2008 71.3 -28.5 1,312.3 1,355.0 20.3 1,375.3
CONSOLIDATED CASH FLOW STATEMENT
EUR million 1-3/2008 1-3/2007 Change, % 1-12/2007
OPERATIONS
Result for the period 54.4 34.9 55.8 246.1
Adjustments 19.2 43.5 -55.8 161.5
Change in working capital -6.0 -34.3 -82.4 -45.8
Financial items and taxes -21.4 -22.8 -6.4 -133.8
CASH FLOW FROM OPERATIONS 46.2 21.3 116.7 227.9
INVESTMENTS
Acquisition of tangible and -22.4 -16.4 36.6 -88.6
intangible assets
Operations acquired -64.3 -18.5 -49.8
Sales of tangible and 4.8 1.6 23.8
intangible assets
Operations sold 38.4 1.4 85.0
Loans granted -18.2 -4.1 -4.4
Repayments of loan receivables 0.3 4.3 -93.4 3.9
Other cash flow from 0.4 1.8 -75.9 13.0
investments
CASH FLOW FROM INVESTMENTS -60.9 -30.0 103.2 -17.2
CASH FLOW BEFORE FINANCING -14.7 -8.6 69.8 210.7
FINANCING
Proceeds from share 0.0 0.0 -97.8 5.2
subscriptions
Change in loans with short 79.6 -2.9 101.5
maturity
Drawings of other loans 4.6 2.6 78.0 295.5
Repayments of other loans -3.7 -15.0 -75.4 -403.1
Treasury shares -39.2 0.0 -51.0
Dividends paid -1.4 -1.1 28.6 -158.8
Other cash flow from financing -0.7 -0.9 -29.9 -3.0
CASH FLOW FROM FINANCING 39.3 -17.4 -213.7
CHANGE IN CASH AND CASH
EQUIVALENTS ACCORDING TO
CASH FLOW STATEMENT 24.6 -26.0 -3.0
Effect of exchange rate
differences
on cash and cash equivalents -0.1 0.2 -1.7
NET CHANGE IN CASH AND
CASH EQUIVALENTS 24.5 -25.8 -4.7
Cash and cash equivalents at 1 72.4 77.1 -6.1 77.1
Jan
Cash and cash equivalents at
31 March / 31 Dec 96.8 51.2 89.0 72.4
Cash and cash equivalents in cash flow statement include cash and
cash equivalents less bank overdrafts.
NET SALES BY BUSINESS 1-3/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
EUR million 2008 2007 2007 2007 2007 2007
SANOMA MAGAZINES
Sanoma Magazines Netherlands 111.7 119.8 136.6 129.2 154.2 539.8
Sanoma Magazines International 70.1 65.8 68.5 66.0 83.2 283.4
Sanoma Magazines Belgium 54.2 52.5 55.8 48.1 60.1 216.6
Sanoma Magazines Finland 50.7 50.1 48.6 48.1 56.0 202.8
Eliminations -1.3 -1.2 -1.2 -1.0 -1.2 -4.6
TOTAL 285.5 287.1 308.2 290.4 352.4 1,238.1
SANOMA
Helsingin Sanomat 74.1 72.3 68.0 66.2 72.4 278.9
Ilta-Sanomat 22.5 23.6 24.6 22.9 23.6 94.8
Other publishing 22.4 24.3 24.7 22.6 25.9 97.5
Other businesses 38.5 38.5 38.0 37.0 39.1 152.6
Eliminations -36.6 -36.4 -35.5 -34.8 -36.4 -143.0
TOTAL 120.8 122.4 119.8 114.0 124.6 480.8
SANOMAWSOY EDUCATION AND BOOKS
Educational publishing 24.6 20.0 78.5 68.7 30.6 197.7
Publishing 27.5 26.3 20.8 20.7 29.6 97.3
Other businesses 12.0 12.0 11.0 14.2 14.0 51.1
Eliminations -5.7 -6.0 -5.4 -6.5 -5.7 -23.7
TOTAL 58.3 52.2 104.8 97.0 68.5 322.5
SWELCOM
TV and radio 22.6 20.1 20.3 16.3 26.5 83.2
Other businesses 18.0 15.4 15.3 16.7 16.2 63.6
Eliminations -0.1 -0.3 -0.2 -0.2 -0.2 -0.8
TOTAL 40.5 35.2 35.4 32.8 42.5 146.0
RAUTAKIRJA
Kiosk operations 94.6 86.9 99.3 95.5 103.8 385.5
Press distribution 58.2 56.2 61.0 61.8 66.5 245.5
Bookstores 31.0 29.6 23.1 37.7 50.0 140.3
Entertainment 24.4 23.5 22.0 24.0 26.6 95.9
Eliminations -5.5 -3.9 -4.0 -4.3 -5.8 -18.0
TOTAL 202.7 192.4 201.3 214.5 241.1 849.3
Other companies and -24.8 -25.6 -25.1 -30.1 -29.4 -110.3
eliminations
TOTAL 683.1 663.7 744.4 718.6 799.6 2,926.3
OPERATING PROFIT BY DIVISION
EUR million 1-3/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2008 2007 2007 2007 2007 2007
Sanoma Magazines 48.2 32.1 61.3 30.4 37.2 160.9
Sanoma 17.9 19.6 17.3 17.2 13.6 67.6
SanomaWSOY Education and Books -4.3 -6.5 29.8 27.9 -6.6 44.5
SWelcom 4.0 2.9 4.0 3.5 5.4 15.8
Rautakirja 9.9 9.0 10.6 13.0 23.1 55.6
Other companies and eliminations -3.0 -3.1 10.1 -3.4 -4.3 -0.7
TOTAL 72.7 54.0 133.0 88.5 68.3 343.8
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 31.3.2008 31.3.2007 Change, % 31.12.2007
Carrying amount at 1 Jan 498.7 572.3 -12.9 572.3
Increases 15.9 11.3 41.2 63.4
Acquisition of operations 6.0 0.4 1.2
Decreases -2.2 -0.8 185.8 -4.3
Disposals of operations -0.1 -0.8 -84.1 -66.9
Depreciation for the period -15.6 -16.2 -3.4 -65.7
Impairment losses for the -0.6 0.0 -0.3
period
Exchange rate differences
and other changes -0.2 -0.6 -60.1 -1.1
Carrying amount at 31 March 501.8 565.6 -11.3 498.7
/ 31 Dec
The commitments for acquisitions of tangible assets were EUR 3.1
million (2007: EUR 6.3 million).
CONTINGENT LIABILITIES
EUR million 31.3.2008 31.3.2007 Change, % 31.12.2007
CONTINGENCIES FOR OWN COMMITMENTS
Mortgages 21.7 8.8 145.7 20.2
Pledges 5.8 18.7 -69.0 5.8
Other items 0.4 0.4 0.5 0.4
TOTAL 28.0 28.0 0.0 26.4
CONTINGENCIES INCURRED ON BEHALF OF ASSOCIATED COMPANIES
Guarantees 7.9 7.9 0.0 7.9
TOTAL 7.9 7.9 0.0 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 260.2 251.7 3.3 275.8
Royalties 25.3 24.9 1.5 27.2
Other 40.5 44.4 -8.8 42.9
TOTAL 326.0 321.1 1.5 345.9
CONTINGENT LIABILITIES, 362.0 357.1 1.4 380.4
TOTAL
CONSOLIDATED INCOME STATEMENT BY QUARTER
EUR million 1-3/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2008 2007 2007 2007 2007 2007
NET SALES 683.1 663.7 744.4 718.6 799.6 2,926.3
Other operating income 38.1 13.3 49.0 12.4 20.6 95.2
Materials and services 309.4 294.9 327.1 323.3 363.5 1,308.9
Personnel expenses 172.2 158.4 162.2 151.8 174.2 646.5
Other operating expenses 131.1 135.0 133.9 130.3 173.5 572.7
Depreciation and impairment 35.8 34.6 37.3 37.1 40.7 149.7
losses
OPERATING PROFIT 72.7 54.0 133.0 88.5 68.3 343.8
Share in result of associated 3.0 1.8 2.7 2.0 5.9 12.4
companies
Financial income 3.5 4.8 -0.2 2.5 2.1 9.2
Financial expenses 12.7 11.9 9.4 11.2 12.4 44.9
RESULT BEFORE TAXES 66.5 48.6 126.1 81.9 63.8 320.4
Income taxes -12.2 -13.7 -30.6 -20.3 -9.7 -74.4
RESULT FOR THE PERIOD 54.4 34.9 95.5 61.5 54.1 246.1
Attributable to:
Equity holders of the Parent 54.5 35.5 95.8 59.7 51.8 242.8
Company
Minority interest -0.2 -0.6 -0.3 1.8 2.3 3.2
Press conference
The press and analyst meeting in Finnish will be held by Mr Hannu
Syrjänen, President and CEO of SanomaWSOY at 2 pm (Finnish time) at
Sanomatalo, Töölönlahdenkatu 2, Helsinki.
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 2Q08 Interim Report
SanomaWSOY will publish its Interim Report January-June on 31 July
2008 approximately at 11 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 Group
employs nearly 20,000 people.
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