2009-05-07 10:00:00 CEST
2009-05-07 10:02:18 CEST
REGULATED INFORMATION
Sanoma Oyj - Interim report (Q1 and Q3)
Sanoma's Interim Report 1 Jan-31 March 2009: Focus Now on Improving Efficiency
Interim Report 7/5/2009 11:00
- Sanoma Group's net sales decreased by 6.9% in the first quarter,
totalling EUR 636.0 (683.1) million.
- Operating profit excluding non-recurring items was EUR 23.2 (49.2)
million. Non-recurring items totalled EUR -2.3 (23.5) million.
- Earnings per share, including non-recurring items, were EUR 0.05
(0.34) in the first quarter.
- It is estimated that the Group's full-year EBIT excluding
non-recurring items will be clearly below the 2008 level.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2009 2008 % 2008
Net sales 636.0 683.1 -6.9 3,030.1
Operating profit excluding non-recurring 23.2 49.2 -52.8 295.7
items
% of net sales 3.7 7.2 9.8
Operating profit 20.9 72.7 -71.2 236.3
Result for the period 7.7 54.4 -85.9 120.8
Capital expenditure 20.2 20.6 -2.1 109.9
% of net sales 3.2 3.0 3.6
Equity ratio, % 40.2 44.4 40.0
Net gearing, % 84.1 62.6 78.5
Average number of employees (full-time 17,981 17,187 4.6 18,168
equivalents)
Earnings/share, EUR 0.05 0.34 -84.7 0.72
Cash flow from operations/share, EUR -0.05 0.29 -118.5 1.56
Hannu Syrjänen, President and CEO"Sanoma's balanced portfolio and strong market positions helped us in
the challenging economic environment. In the first quarter, Sanoma
Entertainment performed strongly both in television advertising and
broadband operations. Our online advertising sales continued to
increase, in particular in the Netherlands. Sanoma's total digital
revenues grew by 7% and represented over 12% of the Group's net sales
in the first quarter. Net sales grew also in the learning business,
boosted by the Nowa Era acquisition made in 2008.
However, the sales of advertising in the newspapers and magazines
have decreased rapidly in the first quarter so we must adjust our
operations further. The decline in consumer confidence and private
consumption is being reflected in retail operations - in the Baltic
countries in particular. The Group continues to strongly focus on
improving efficiency and saving costs.
In 2009, Sanoma will make structural changes, discontinue loss-making
operations and examine all processes in order to improve its
efficiency. In the first quarter, for example, we closed down
loss-making kiosks in Russia and discontinued some 20 magazine
titles. The cost-saving measures taken so far have been strongest in
the CEE countries, where the developing economies have been hit
harder than in more mature markets.
Our target is to reduce our operating expenses to be clearly below
the 2008 level. This will partly be achieved through personnel
reductions.
Sanoma's position as a market leader will bring us added value. We
have been able to strengthen our market shares in a number of areas.
For example, our position in the Finnish online classified market has
improved and our key weekly titles for women are performing better
than the market in the Netherlands, Belgium and Finland. Focusing
strongly on our profitability, we continue, at the same time, to be
on the look out for possibilities that can further enhance our
operations and strengthen our market positions."
Outlook for 2009
In 2009, Sanoma's net sales are expected to decrease. It is estimated
that the Group's operating profit excluding non-recurring items will
clearly decline from the previous year. In the comparable year of
2008, operating profit excluding non-recurring items was EUR 295.7
million. The Group's financial expenses are expected to decrease, and
as a result, Sanoma's net result for 2009 is expected to decrease
less than its operating profit. The Group plans to strongly increase
the efficiency of its operations in all markets.
The outlook of Sanoma's net sales and operating profit in 2009 is
affected by the development of advertising and private consumption in
the Group's countries of operation. Advertising is expected to
decrease in all and private consumption in most of the markets in
2009.
Net sales
In January-March Sanoma's net sales were down by 6.9%, totalling EUR
636.0 (683.1) million. Net sales grew in Sanoma Learning & Literature
and were at the comparable year's level in Sanoma Entertainment. Net
sales decreased in other divisions, with advertising sales in
particular being affected by the general economic situation. Net
sales adjusted for changes in the Group structure decreased by 8.0%.
Excluding the effect of changes in exchange rates, net sales for the
first quarter 2009 would have been 5.3% lower than in 2008.
Advertising sales accounted for 23% (26%) of the Group's total net
sales. Online advertising sales continued to increase with the Sanoma
Magazines Netherlands contributing the most. The growth from the
comparable period was 6 %. In geographical terms, Finland accounted
for 53% (53%) of net sales, with other EU countries accounting for
43% (42%) and non-EU countries for 4% (5%).
Result
Sanoma's operating profit excluding non-recurring items was EUR 23.2
(49.2) million in the first quarter. The operating profit included a
total of EUR -2.3 (23.5) million in non-recurring items. These
non-recurring costs were related to restructuring of operations and
voluntary severance packages offered to employees. In the comparable
period, a non-recurring capital gain was recorded from the divestment
of the movie distribution company R.C.V. Entertainment.
NON-RECURRING ITEMS 1-3/ 1-3/ 1-12/
EUR million 2009 2008 2008
Costs related to the efficiency programme, News -2.3
A gain on sale of R.C.V. Entertainment, Magazines 23.5 23.5
A gain on sale of a land area, Sanoma Corporation 1.5
A gain on sale of Payback Kft, Magazines 7.0
Expenses on closing down a youth site and related
impairment loss, Magazines -5.1
Inventory write-offs and restructuring expenses,
Learning & Literature -7.6
Impairment loss of immaterial rights and goodwill, -78.6
Magazines
NON-RECURRING ITEMS TOTAL -2.3 23.5 -59.3
The Group's operating profit was EUR 20.9 (72.7) million or 3.3%
(10.6%) of net sales. Operating profit grew in Sanoma Entertainment,
where all business units developed favourably. The new learning
operations strengthened the seasonality in Sanoma Learning &
Literature's profits. In other divisions, operating profit decreased
as a result of lower sales.
Sanoma has initiated a large number of efficiency improvement
programmes. In order to obtain its targets, Sanoma will continue to
reduce the number of personnel. For example, the Sanoma News
rationalisation programme, in addition to a variety of other
cost-saving measures, aims to reduce the Division's workforce by
100-200 employees through voluntary severance packages. Other staff
reductions have been agreed on in several business units either as a
result of the weakened economic outlook or related to organisational
changes initiated by changing business needs for example in Russia,
the Czech Republic and Finland.
Sanoma's net financial items totalled EUR -10.3 (-9.2) million.
Financial income amounted to EUR 6.7 (3.5) million. Financial
expenses amounted to EUR 17.0 (12.7) million with interest expenses
of EUR 11.1 (10.6) million being the largest item. Exchange rate
changes affected both financial income and expenses.
The result before taxes was EUR 10.9 (66.5) million. Sanoma's tax
rate was clearly higher than in the comparable period, mainly because
of a non-taxable capital gain in the first quarter of 2008. Earnings
per share, including the non-recurring items, were EUR 0.05 (0.34).
The profit for the period totalled EUR 7.7 (54.4) million.
Balance sheet and financial position
At the end of March, the consolidated balance sheet totalled EUR
3,215.1 (3,306.0) million. Cash flow from operations was EUR -8.5
(46.2) million and cash flow per share was EUR -0.05 (0.29). Cash
flow from operations decreased as a result of weaker profit for the
period and due to changes in the working capital. Due to the nature
of the Group's businesses fluctuations in working capital are
typical.
There were no significant changes in the Group's financial position
during the first quarter. Sanoma's equity ratio at the end of March
was 40.2% (44.4%) and in line with the year-end 2008. The changes
from the comparable period were mainly caused by the impairment
write-downs made in the fourth quarter of 2008. Net gearing increased
to 84.1% (62.6%). Equity totalled EUR 1,209.1 (1,375.3) million.
Interest-bearing liabilities were EUR 1,099.4 (964.7) million and
interest-bearing net debt EUR 1,016.5 (860.4) million. At the end of
March, the Group's cash and cash equivalents totalled EUR 82.9
(104.2) million.
Sanoma's financial position is stable. The existing credit
facilities, such as the syndicated, long-term credit line worth a
total of EUR 802 million, cover all Sanoma's financing needs and
Sanoma has no need for material refinance in the near future. Net
debt/EBITDA ratio at the end of March was 2.4.
Investments, acquisitions and divestments
Investments in tangible and intangible assets totalled EUR 20.2
(20.6) million in the first quarter, and were focused, for example,
on ICT systems and replacement investments.
There were no significant transactions during the review period. In
the comparable period, Sanoma Magazines divested the Dutch movie
distribution company R.C.V. Entertainment and a capital gain of EUR
23.5 million was recorded for the transaction. On 11 March 2008,
Sanoma Learning & Literature finalised its acquisition of the Polish
educational publisher Nowa Era.
SANOMA MAGAZINES
Sanoma Magazines is a leading publisher of magazines and has a strong
digital media presence in 13 European countries. 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.
- Sanoma Magazines' online advertising sales and subscription sales
continued to develop positively. Total net sales decreased,
especially in the CEE countries and Russia.
- Sanoma Magazines actively reacted to the changing advertising
market: in total 20 magazines have been discontinued during the first
quarter.
- Investments in segments that have performed well continued. Two new
magazines and five online sites were launched.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2009 2008 % 2008
Net sales 262.1 285.5 -8.2 1,246.8
Operating profit excluding non-recurring
items * 15.5 24.7 -37.1 138.9
% of net sales 5.9 8.6 11.1
Operating profit 15.5 48.2 -67.8 85.7
Capital expenditure 4.6 5.1 -10.8 26.8
Average number of employees (full-time
equivalents) 5,713 5,393 5.9 5,731
* In 2008, the non-recurring items included EUR 23.5 million capital
gain from the divestment of movie distributor R.C.V. Entertainment in
the first quarter.
Operational indicators ** 1-3/ 1-3/
2009 2008
Number of magazines published 316 319
Magazine copies sold, thousands 94,859 104,242
Advertising pages sold 12,283 14,487
** Including joint ventures.
Sanoma Magazines' net sales in January-March decreased by 8.2% to EUR
262.1 (285.5) million. Net sales were in line with the comparable
period in the Netherlands and Finland, but decreased significantly in
Sanoma Magazines International. Net sales adjusted for changes in the
Group structure decreased by 9.5%. Of the Division's net sales, 19%
(18%) came from Finland.
The Division's advertising sales decreased by 17% in the first
quarter and represented 29% (32%) of net sales. In particular Sanoma
Magazines International's advertising revenues were affected by the
general economic uncertainty. The Division's online advertising sales
continued to grow and were up by 8%, due to good development in the
Netherlands.
Sanoma Magazines' circulation sales decreased by 3% and represented
62% (58%) of the Division's net sales. Subscription sales developed
positively in Belgium and Finland. Single copy sales in the CEE
countries declined clearly.
In January-March Sanoma Magazines Netherlands' net sales amounted to
EUR 110.6 (111.7) million. Advertising sales grew slightly with
online advertising performing strongly. Sanoma Magazines Netherlands'
online revenues grew by 14% and outperformed the market growth.
According to Nielsen Media Research, the consumer magazine
advertising market in the Netherlands decreased by 14% in
January-March 2009 with magazine advertising's share of the total
advertising market remaining almost at the comparable period's level.
In total, advertising sales represented 26% (25%) of Sanoma Magazines
Netherlands' net sales. The readers market in the Netherlands has
continued to decline. Subscription sales at Sanoma Magazines
Netherlands were at the comparable period's level and single copy
sales were only slightly below. Sanoma Magazines Netherlands launched
five online sites and one magazine. Five magazines were closed in the
first quarter.
Sanoma Magazines International's net sales were EUR 50.9 (70.1)
million. Advertising sales decreased in most countries, especially in
Russia and Ukraine as well as in the Czech Republic where number of
magazine titles were closed. The reported net sales were also clearly
affected by the negative exchange rate developments, especially in
Russia and Hungary. In total, advertising sales represented 49% (54%)
of Sanoma Magazines International's net sales. Circulation sales were
also below the comparable period, partly because the number of
magazines and in some cases the number of issues was reduced. Net
sales in Russia, Sanoma Magazines International's largest market,
decreased by 42% and amounted to some EUR 16 million, including the
effects of currency translations. In local currency the decrease was
29%. In the first quarter, Sanoma Magazines International launched
one title and discontinued 15 others across its markets.
Net sales at Sanoma Magazines Belgium totalled EUR 51.3 (54.2)
million with decreasing advertising sales. Advertising sales
represented 28% (29%) of Sanoma Magazines Belgium's net sales.
Circulation sales, especially subscription sales, increased in
Belgium, due to successful price increases. In Belgium, both the
advertising and readers market remained stable. Sanoma Magazines
Belgium's market position has also remained strong.
Sanoma Magazines Finland's net sales remained stable at EUR 50.3
(50.7) million. The decline in advertising sales was offset by the
good development of circulation sales. Subscription sales grew in
particular, followed by increase in the frequency of some magazine
titles. Advertising sales represented 14% (17%) of Sanoma Magazines
Finland's net sales. According to TNS Gallup Adex, advertising in
consumer magazines in Finland decreased by 14% in January-February.
The magazine single copy market decreased in volume by 14% in. Sanoma
Magazines Finland outperformed the market development.
In January-March, Sanoma Magazines' operating profit excluding
non-recurring items decreased by 37.1% to EUR 15.5 (24.7) million. In
the comparable period, operating profit included a EUR 23.5 million
non-recurring gain on the divestment of movie distributor R.C.V.
Entertainment. Operating profit in the first quarter decreased by
67.8% to EUR 15.5 (48.2) million.
Sanoma Magazines Netherlands' operational result weakened due to
lower sales and increased personnel expenses. The operating profit
was down significantly since the comparable period included the
non-recurring sales gain from R.C.V. Entertainment. The decline in
advertising sales decreased Sanoma Magazines International's
operating result markedly. Sanoma Magazines Belgium's result
decreased due to lower advertising sales and increased personnel
expenses. Sanoma Magazines Finland's operating profit improved with
cost-saving offsetting the effects of lower advertising sales.
Sanoma Magazines is currently strongly focused on improving
efficiency and saving costs. The division has initiated several
cost-saving programmes to improve the profitability of its business
units. At the same time Sanoma Magazines continues to develop its
magazine portfolio and online businesses as well as invest in
strengthening its market positions in all countries it operates in,
with a special focus on its key titles in each operating country.
In 2009, Sanoma Magazines' net sales are expected to decrease and it
is estimated that operating profit excluding non-recurring items will
be clearly below the previous year's level.
SANOMA NEWS
Sanoma News is the leading newspaper publisher in Finland, and its
products, both in print and digital format, have a strong presence in
the lives of their readers. In addition to Helsingin Sanomat, the
largest daily in the Nordic region, Sanoma News publishes other
national and regional newspapers and is also a significant digital
player in Finland.
- Net sales and operating profit in Sanoma News were affected by the
continued decline of the advertising market.
- Sanoma News will adjust its operations further and strongly focus
on improving efficiency and saving costs to be able to respond better
to the changing media environment.
- Investments in printed and digital products continued in the first
quarter with the re-launch of Veikkaaja and the ongoing development
of existing online sites.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2009 2008 % 2008
Net sales 107.7 120.8 -10.9 474.7
Operating profit excluding non-recurring 8.3 17.9 -53.4 57.3
items *
% of net sales 7.8 14.8 12.1
Operating profit 6.0 17.9 -66.2 57.3
Capital expenditure 3.2 3.7 -14.6 19.6
Average number of employees (full-time 2,404 2,407 -0.1 2,491
equivalents)
* In 2009, the non-recurring items included EUR -2.3 million costs
related to the efficiency programme.
Operational indicators 1-3/ 1-3/
2009 2008
Distribution of free sheets, millions 19.2 24.0
1-12/ 1-12/
Audited circulation 2008 2007
Helsingin Sanomat 412,421 419,791
Ilta-Sanomat 161,615 176,531
1-3/ 1-3/
Online services, unique visitors, weekly 2009 2008
Iltasanomat.fi 1,641,494 1,316,851
HS.fi 1,097,170 913,506
Huuto.net 473,677 462,371
Oikotie.fi 351,653 325,253
Taloussanomat.fi 465,231 298,424
Keltainenpörssi.fi 192,815 160,099
Sanoma News' net sales in January-March decreased by 10.9%, totalling
EUR 107.7 (120.8) million. Net sales decreased in particular in the
Helsingin Sanomat business unit, where advertising sales declined
significantly. Net sales in other business units were also somewhat
below the comparable period. Adjusted for changes in the Group
structure, net sales decreased by 10.9%.
According to TNS Gallup Adex, newspaper advertising in Finland
decreased by 24% in January-February. Job advertising in Finland
decreased by 50% and real estate advertising by 36%. Advertising in
free sheets was down by 19%. Following the general advertising
environment, also online advertising included in statistics decreased
by 9%. Sanoma News' advertising sales decreased by 25% from the
comparable period, due to the decline in newspaper advertising, with
the classified advertising development affecting the sales the most.
Online advertising sales performed slightly better, but were down by
4% during the first quarter of the year. Sanoma News' advertising
sales represented 46% (55%) of the Division's net sales.
In the Finnish tabloid market, the structural migration to online
continued. The printed tabloid market declined by 12%, but the
numbers of online visitors continued to increase. Sanoma News'
circulation sales grew. Subscription sales performed well, but
newsstand sales decreased. Circulation sales accounted for 43% (37%)
of the Division's net sales.
The Helsingin Sanomat business unit's net sales totalled EUR 61.7
(74.1) million. Circulation sales increased slightly due to price
increases. Advertising sales were clearly down, and Helsingin
Sanomat's job and real estate print advertising, in particular, were
affected by the overall economic situation. Job advertising in the
Helsingin Sanomat daily paper decreased by 52% and real estate
advertising by 54%. Online advertising of the business unit decreased
by 17%, but Oikotie.fi, the classified online site, strengthened its
market position. In total, advertising sales represented 55% (64%) of
net sales. Helsingin Sanomat reorganised its newsroom and established
a centralised desk to support its news management to different
channels. The acquisition of the remaining minority shareholding,
49%, in the recruitment system provider Skillnet enables a more
efficient organisation to be created in the recruitment vertical in
the future.
Net sales of the Ilta-Sanomat business unit amounted to EUR 18.4
(20.5) million. Ilta-Sanomat commanded a 57.4% (57.5%) share of the
tabloid market. The overall readership continued to increase due to
the strong growth of online readers. Both circulation and advertising
sales of the Ilta-Sanomat business unit declined. In total,
advertising sales represented 21% (29%) of net sales. The business
unit successfully renewed its sports and betting weekly Veikkaaja.
The new editorial process launched at the end of 2008 has improved
the efficiency of the editorial office and the quality of the content
both in the tabloid Ilta-Sanomat and its online version,
Iltasanomat.fi.
Net sales from other publishing were at EUR 22.9 (23.9) million. The
decrease was mainly affected by the decline of advertising sales,
especially in Sanoma Lehtimedia's regional newspapers. The
circulation sales in the regional papers were at the comparable
period's level. Sanoma Lehtimedia is redesigning its organisation to
improve efficiency and to secure resources for developing the local
service level in news production and sales. Net sales in Sanoma
Kaupunkilehdet business unit for free sheets decreased slightly
mainly due to structural changes. However, Sanoma Kaupunkilehdet has
gained market share in the advertising market, in consequence of free
sheets in general performing better than dailies in the current media
development. Sanoma Kaupunkilehdet made several efficiency
improvements in its portfolio during 2008. Visitor figures for
Vartti.fi, the local news site, have shown constant improvement and
reached a new record in week 13 with 242,541 unique visitors. The
acquisition of the remaining minority shareholding of Taloussanomat,
the online financial daily, will improve the possibilities to further
develop the organisation.
Net sales from other operations, mainly comprising internal services,
were EUR 36.2 (37.9) million. Net sales decreased due to fewer
internal printing jobs. External print sales grew by over 40%.
In January-March, Sanoma News' operating profit excluding
non-recurring items decreased by 53.4%, totalling EUR 8.3 (17.9)
million. The non-recurring items included in the operating profit
totalled EUR -2.3 (0.0) million and consisted of expenses related to
the efficiency programme, including such items as voluntary severance
packages to employees. Operating profits in all the reporting units
decreased from the comparable period mainly due to decline in
advertising sales.
In 2009, the media advertising market continues to be challenging.
Sanoma News has launched a cost-savings programme in order to adapt
to the lower revenue level. At the same time, Sanoma News will
continue the planned development of its printed products and digital
services - the company has, for example, decided to invest in a new
reader-customer management system to support, among other actions,
the product development opportunities for newspapers in the
multimedia environment.
In 2009, net sales of Sanoma News are estimated to decrease clearly
and operating profit excluding non-recurring items will lessen
markedly from the previous year due to the decline in the advertising
market.
SANOMA ENTERTAINMENT
Sanoma Entertainment offers entertaining experiences on television,
radio, online and mobile. Sanoma Entertainment's business units
include Nelonen Media, which focuses on broadcast operations, and
Welho, Finland's largest cable television operator. The Division's
latest business area is online casual gaming.
- Sanoma Entertainment's operating profit increased in the first
quarter.
- Nelonen Media launched a new TV channel Liv in February.
- Welho launched a mobile broadband service in January.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2009 2008 % 2008
Net sales 40.3 40.5 -0.5 157.1
Operating profit excluding non-recurring items 6.1 4.0 52.2 17.3
% of net sales 15.2 10.0 11.0
Operating profit 6.1 4.0 52.2 17.3
Capital expenditure 2.0 3.0 -33.7 13.5
Average number of employees (full-time 486 472 3.0 482
equivalents)
Operational indicators 1-3/ 1-3/
Thousands 2009 2008
TV channels' share of Finnish TV advertising 33.2% 29.1%
TV channels' national commercial viewing share 28.1% 29.2%
TV channels' national viewing share 13.5% 13.9%
Number of connected households (31 March) 324 320
Number of pay TV customers (31 March) 68 68
Number of broadband internet connections (31 March) 107 101
Sanoma Entertainment's net sales for January-March were at the
comparable period's level, totalling EUR 40.3 (40.5) million. When
Division's net sales are adjusted for changes in the Group structure,
they were also at the level of the first quarter in 2008. Advertising
sales accounted for 53% (50%) of Sanoma Entertainment's net sales.
Broadcast operations increased its net sales to EUR 23.5 (22.6)
million in January-March, while the Finnish TV advertising market
shrank by 14% according to TNS Gallup Adex. Nelonen Media's
multichannel strategy in TV operations has resulted in increasing its
market share to 33.2% (29.1%). New targeted TV channels, national
radio stations and WebTV all increased their advertising sales.
Integrated and measurable advertising solutions based on TV, radio
and online have proved to be effective.
In addition to its five operating channels, in February Nelonen Media
successfully launched Liv, a new free TV channel available on the
cable network. Sanoma Entertainment has applied for a licence to
begin broadcasting lifestyle channel Liv on the terrestrial network
as well.
Online services at Sanoma Entertainment have continued to grow. A
significant number of TV programmes can be watched for free online as
a catch up service. Also, the number of visitors on Sanoma
Entertainment's online casual gaming sites has increased steadily.
According to the Association of Finnish Broadcasters, national radio
advertising grew by 6% in January-March and Nelonen Media's share of
the national radio advertising increased to 13.6%. The number of
weekly listeners of Radio Rock has remained at a high level. Radio
Aalto has increased its number of listeners.
Net sales from other operations were behind the comparable period
because Welho's sales of set-top-boxes peaked in the first quarter of
2008 due to the digital switch-over. Welho's broadband subscriptions
continued to increase. In pay TV operations, Welho has moved to
reporting the number of customers instead of the number of
subscriptions. In line with the market development, Welho's pay TV
customer base remained at the comparable period's level.
Sanoma Entertainment's operating profit increased by 52.2% in
January-March, totalling EUR 6.1 (4.0) million. Operating profit
improved both in broadcasting and other operations. The increase was
driven by lower expenses in general and cost-saving measures.
In line with its strategy, Sanoma Entertainment focuses on its core
businesses: television, broadband services and consumer entertainment
services. Sanoma Entertainment continues to develop its digital
content and media solutions business, invest resources in the
development of its online services and in its viewing and listening
shares. In addition, Sanoma Entertainment is refining its processes
and service offering to better meet the needs of its customers and to
improve its efficiency.
In 2009, Sanoma Entertainment's net sales and operating profit
excluding non-recurring items are expected to be at the previous
year's level.
SANOMA LEARNING & LITERATURE
Sanoma Learning & Literature is a leading European educational
publisher offering learning materials in print and digital format.
With operations in nine countries, the Division has growing
international language service operations and is also the leading
general literature publisher in Finland.
- Net sales increased in learning and language services, partly
through new businesses.
- Cost-savings and shifts in time offset the seasonal operating loss
of newly acquired learning operations.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2009 2008 % 2008
Net sales 60.8 58.3 4.3 390.0
Operating profit excluding non-recurring -6.9 -4.3 -58.9 53.2
items
% of net sales -11.3 -7.4 13.6
Operating profit -6.9 -4.3 -58.9 45.6
Capital expenditure 2.3 2.8 -17.6 15.6
Average number of employees (full-time 2,863 2,389 19.9 2,737
equivalents)
Operational indicators 1-3/ 1-3/
2009 2008
Learning
Number of new titles published, books 319 338
Number of new titles published, digital products 60 88
Literature and other businesses
Number of new titles published, books 111 131
Number of new titles published, digital products 23 35
Books sold, millions 2.5 2.2
In January-March Sanoma Learning & Literature's net sales increased
by 4.3% and totalled EUR 60.8 (58.3) million. Net sales grew in the
learning and language services business units. Net sales adjusted for
changes in the Group structure decreased by 3.1%. A total of 54%
(48%) of the Division's net sales came from outside Finland.
Sanoma Learning & Literature's reporting structure has been modified
to better reflect the focus of operations. The comparable figures for
2008 have been adjusted accordingly. Sanoma Learning & Literatures
three reporting levels are now learning, language services, and
literature and other business, which includes general literature,
printing and logistics.
Net sales in learning increased to EUR 30.6 (27.8) million. Most
growth came from Poland, where the acquired operations of Nowa Era
were consolidated only at the end of the first quarter 2008. Net
sales also grew in Belgium and the Netherlands, where most of the
increase came as a shift in sales from the second quarter to the
first quarter. Excluding the effects of the currency translations,
sales also grew in Hungary. In Finland, net sales were slightly below
the comparable period.
Net sales in language services grew to EUR 8.3 (6.2) million. The
increase is attributable to the new operations acquired in 2008.
Sales of language services are decreasing due to the general economic
situation. Sanoma Learning & Literature is focusing on building a
strong language service business and integrating the acquired units.
Language service operations are one of the focus areas of the Sanoma
Group.
Net sales in literature and other businesses were EUR 24.6 (27.8)
million. In general literature, domestic fiction sales in particular
are still benefitting from the awards won at the end of 2008.
However, the sales of non-fiction are not developing positively. In
printing net sales have decreased but remained at the comparable
year's level in logistics.
The Division's operating loss in January-March grew to EUR 6.9 (4.3)
million. The operating loss did not include any non-recurring items
in the first quarter. The operating loss in learning increased
slightly due to the negative impact of the consolidation of Nowa
Era's seasonal losses, which was largely offset by cost-savings.
Operating profit in language services decreased due to integration
costs and lower sales. Literature and other businesses had an
operating profit slightly below the comparable period.
The Division's business is very seasonal. Profit in learning is
mainly accrued in the second and third quarters. The acquisition of
Nowa Era added to the size of the learning business and therefore
increased seasonality in the Division.
Sanoma Learning & Literature continues to focus on further
internationalising its learning business, expanding language services
and maintaining market leadership in Finnish general literature
publishing.
In 2009, it is estimated that the net sales and operating profit
excluding non-recurring items of Sanoma Learning & Literature will
decrease from the previous year's level. The development of net sales
and operating profit is strongly affected by the exchange rates of
Sanoma Learning & Literature's operating countries.
SANOMA TRADE
Retail specialist Sanoma Trade's strengths are a thorough
understanding of customers' needs and solid concepts. Sanoma Trade
serves its customers in over 200 million annual sales contacts at
kiosks, bookstores and movie theatres. Operating in seven countries,
press distribution is a strong link between publishers and retailers.
- Movie admissions continued to grow in Finland.
- Sanoma Trade's business in Finland has remained steady, but the
economic situation is clearly affecting the Baltic businesses.
KEY INDICATORS 1-3/ 1-3/ Change 1-12/
EUR million 2009 2008 % 2008
Net sales 187.7 202.7 -7.4 866.6
Operating profit excluding non-recurring 3.8 9.9 -61.6 45.1
items
% of net sales 2.0 4.9 5.2
Operating profit 3.8 9.9 -61.6 45.1
Capital expenditure 8.1 6.1 31.8 33.8
Average number of employees (full-time 6,433 6,425 0.1 6,633
equivalents)
Operational indicators 1-3/ 1-3/
2009 2008
Customer volume in kiosk operations, thousands 48,624 50,753
Customer volume in bookstores, thousands 1,747 1,802
Customer volume in movie theatres, thousands 2,622 2,813
Number of copies sold (press distribution), thousands 85,123 97,488
Sanoma Trade's net sales in January-March decreased by 7.4%,
totalling EUR 187.7 (202.7) million. Net sales of kiosk operations
and movie operations were almost at the comparable period's level.
Net sales decreased in press distribution and bookstores. Net sales
adjusted for changes in the Group structure decreased by 6.9%. Of
Sanoma Trade's net sales, 32% (33%) came from outside Finland.
Net sales from kiosk operations amounted to EUR 91.1 (94.6) million.
Sales in the Finnish R-kiosks decreased somewhat. This was mainly due
to the timing of Easter. The challenging economic situation in the
Baltic countries affected both the number of customers in kiosks as
well as sales volumes. However, net sales in Lithuania and Russia
grew slightly. In Russia, closures of unprofitable R-kiosks
continued. New kiosks were acquired in the Samara region.
Net sales from press distribution were EUR 49.4 (58.2) million. Net
sales decreased overall in comparison with the comparable period -
with the exception of Russia, where there was some growth. Press
distribution volumes decreased in all countries, but were partly
offset by the increased cover prices in most markets. The efficiency
improvement programme the Dutch press distribution company Aldipress
is conducting has decreased the number of FTEs by 45.
The net sales of bookstores were EUR 27.3 (31.0) million. The net
sales of the comparable period included the subscription business
divested in May 2008. In Finland, sales remained at the previous
year's level, and the bookstore chain Suomalainen Kirjakauppa was
further developed. In Estonia, sales were behind the comparable
period.
Net sales from movie operations totalled EUR 23.6 (24.4) million.
During the first quarter, movie admissions in Finland continued to
grow from the record year 2008. Net sales increased in Finland. The
movie theatre chain was expanded and modernized further with the
latest 3D technology. New alternative content, such as sports and
cultural events, has proved to be successful also in the Baltic
countries, where sales, however, developed less favourably due to the
lower private consumption.
In January-March, Sanoma Trade's operating profit decreased by 61.6%,
totalling EUR 3.8 (9.9) million. The operating profit did not include
any non-recurring items. Operating profit of kiosk operations was
influenced by the economic slowdown and declining sales in the Baltic
countries and the earlier investments in Russia and Romania. In press
distribution, the operating profit declined due to falling
point-of-sale marketing sales. The operating profit of bookstores was
in line with the comparable period. In movie operations, the result
decreased due to falling sales in the Baltic countries. Sanoma Trade
has initiated cost-saving programmes in all of its businesses.
The exact dates of Easter cause some seasonality in Sanoma Trade's
business when comparing the yearly quarters. The volume of kiosk
trade usually increases during Easter when other retailers are
closed. Fewer selling days reduce bookstore sales. In the comparable
year, Easter was in the first quarter, whereas in 2009 it fell in the
second quarter.
Sanoma Trade focuses on further developing its concepts in all its
businesses. Efficient chain management as well as the product and
service offerings catering to the needs of customers are key success
factors in all markets and will ensure the competitiveness of Sanoma
Trade.
In 2009, Sanoma Trade's net sales are expected to decrease somewhat
and operating profit excluding non-recurring items to decrease
clearly.
THE SANOMA GROUP
Dividend
In line with the Board's proposal, the Annual General Meeting decided
to pay out a dividend of EUR 0.90 (1.00) per share for the year 2008.
The record date for distribution of dividends was 6 April 2009 and in
Finland, the dividends were paid on 15 April 2009. EUR 0.5 million
was transferred to the donation reserve and EUR 511.5 million was
left in equity. Sanoma conducts an active dividend policy andprimarily distributes over half of the Group result after taxes in
dividends.
Shares and holdings
Trading in Sanoma shares was less active than in the comparable
period. The number of Sanoma shares traded totalled 22,324,951
(34,712,673). Traded shares accounted for 14% (21%) of the average
number of shares for the period. Sanoma's total stock exchange
turnover was EUR 207.1 (589.7) million.
In January-March, the volume-weighted average price of a Sanoma share
was EUR 9.27, with a low of EUR 8.02 and a high of EUR 10.50. At the
end of the review period, Sanoma's market capitalisation was EUR
1,548.3 (2,824.0) million and the closing price of the share was EUR
9.62 (17.56). On 31 March 2009, Sanoma had 20,310 shareholders, with
foreign holdings accounting for 9.7% (9.8%) of all shares and votes.
There were no major changes in share ownership during the review
period and Sanoma did not issue any flagging announcements.
During the period under review, Sanoma had an authorisation to
repurchase Company's shares. No shares were repurchased in the first
quarter of 2009. A total of 2,425,000 Sanoma shares repurchased under
two earlier authorisations were cancelled on 10 February 2009. The
cancellation was entered into the Trade Register on 19 February 2009.
A total of 278,007 shares were registered with 2001B stock options
under the review period. Following the registration, the number of
Sanoma's shares increased from 163,090,651 shares to 163,368,658
shares. The number of shares decreased after the cancellation and was
160,943,658 at the end of the period. There were no changes in the
Company's registered share capital which totalled EUR 71,258,986.82
at the end of March.
Board of Directors, auditors and management
The AGM of 1 April 2009 confirmed the number of Sanoma's Board
members at ten. Board members Jaakko Rauramo and Sakari Tamminen were
re-elected, and Annet Aris was elected to the Board as a new member.
The Board of Directors of Sanoma consists of: Jaakko Rauramo,
Chairman; Sakari Tamminen, Vice Chairman; and Annet Aris, Robert
Castrén, Jane Erkko, Paavo Hohti, Sirkka Hämäläinen-Lindfors, Seppo
Kievari, Rafaela Seppälä and Hannu Syrjänen 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.
Timo Mänty was appointed President and CEO of Sanoma Trade and member
of the Group's Executive Management Group as of 1 January 2009.
Board authorisations
The AGM held on 1 April 2009 authorised the Board of Sanoma to decide
on the repurchase of the Company's own shares. The authorisation is
effective until 30 June 2010.
A maximum of 16,000,000 of the Company's own shares can be
repurchased with the Company's unrestricted shareholders' equity, and
the repurchases will reduce the funds available for distribution of
profits. The shares will be repurchased to develop the Company's
capital structure, carry out potential corporate acquisitions or
other business arrangements, or to be transferred for other purposes,
retained as treasury shares, or cancelled. The shares can be
repurchased either through a tender offer made to all shareholders on
equal terms or in other proportion than that of the current
shareholders at the market price on the NASDAQ OMX Helsinki Ltd at
the moment of repurchase.
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. Under the authorisation, the Board decided on 19 December
2008 on the issuance of Stock Option Scheme 2008.
During the review period, the authorisation by the AGM of 1 April
2008 for repurchasing the Company's own shares was in force. The
authorisation allowed the repurchase of a maximum of 8,285,000
Company shares. These shares were not to be repurchased in proportion
to the holdings of existing shareholders. They were repurchased with
the Company's unrestricted equity at the market price at the moment
of repurchase - however, in such a way that the minimum purchase
price of a share was the lowest market price in public trading and
the maximum purchase price was the highest price noted in public
trading during the authorisation period. The share repurchases
commenced on 12 June 2008, and the authorisation remained valid until
1 April 2009.
Seasonal fluctuation
The net sales and result of Sanoma Magazines, Sanoma News and Sanoma
Entertainment are particularly affected by the development of
advertising. 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.
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 also
impacts the net 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.
Significant risks and uncertainty factors
Management of business risks and the opportunities associated with
them is included in the daily responsibilities of Sanoma's
management. The management takes calculated risks in order to ensure
that the Company develops its business as successfully as possible.
The most significant risks and uncertainty factors Sanoma is facing
are described in the Financial Statements, together with the main
principles of risk management. The most significant uncertainty
factors of the current year are related to the development of media
advertising and consumer spending, as well as the development of
currency exchange rates. Due to the general economic situation,
reliable estimates on, for example, the development of media
advertising in the Group's various markets are not available. Sanoma
expects media advertising to continue to decrease in 2009. A rapid
change in media advertising and consumer confidence would affect the
Group result.
If the uncertainty in the financial markets continues, Sanoma's
stable business, strong balance sheet and current loan agreements
ensure the Group's financial position.
Helsinki
Board of Directors
Sanoma Corporation
INTERIM REPORT (UNAUDITED)
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 1 January
2009. Sanoma Learning & Literature has started to capitalize
prepublication costs of learning material to intangible assets as of
1 January 2009. Previously, the principle was to include
prepublication expenses in acquisition cost of inventory. The change
in accounting policy does not have any material impact on Sanoma's
income statement or balance sheet. 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 1-3/ 1-3/ 1-12/
EUR million 2009 2008 2008
NET SALES 636.0 683.1 3,030.1
Other operating income 14.1 38.1 97.1
Materials and services 286.4 309.4 1,367.4
Employee benefit expenses 176.2 172.2 702.8
Other operating expenses 128.2 131.1 588.8
Depreciation and impairment losses 38.4 35.8 231.9
OPERATING PROFIT 20.9 72.7 236.3
Share of results in associated companies 0.3 3.0 4.9
Financial income 6.7 3.5 18.9
Financial expenses 17.0 12.7 69.9
RESULT BEFORE TAXES 10.9 66.5 190.3
Income taxes -3.2 -12.2 -69.4
RESULT FOR THE PERIOD 7.7 54.4 120.8
Result attributable to:
Equity holders of the Parent Company 8.3 54.5 115.7
Minority interest -0.6 -0.2 5.1
Earnings per share for result attributable to the
equity
holders of the Parent company
Earnings per share, EUR 0.05 0.34 0.72
Diluted earnings per share, EUR 0.05 0.34 0.72
STATEMENT OF COMPREHENSIVE INCOME
EUR million 1-3/ 1-3/ 1-12/
2009 2008 2008
Result for the period 7.7 54.4 120.8
Other comprehensive income:
Change in translation differences -34.7 -5.0 -39.1
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -27.0 49.4 81.7
Total comprehensive income attributable to:
Equity holders of the Parent Company -25.8 49.5 77.5
Minority interest -1.2 -0.2 4.2
CONSOLIDATED BALANCE SHEET
EUR million 31.3.2009 31.3.2008 31.12.2008
ASSETS
NON-CURRENT ASSETS
Tangible assets 503.7 501.8 510.4
Investment property 9.6 9.4 10.2
Goodwill 1,480.9 1,487.1 1,491.6
Other intangible assets 386.2 389.9 379.7
Interests in associated companies 70.2 73.4 69.9
Available-for-sale financial 20.5 16.1 20.6
assets
Deferred tax receivables 37.1 43.4 36.6
Trade and other receivables 40.1 39.4 41.0
NON-CURRENT ASSETS, TOTAL 2,548.2 2,560.4 2,560.0
CURRENT ASSETS
Inventories 150.3 175.1 173.2
Income tax receivables 37.4 31.6 24.9
Trade and other receivables 395.8 433.5 409.1
Available-for-sale financial 0.5 1.1 0.5
assets
Cash and cash equivalents 82.9 104.2 110.9
CURRENT ASSETS, TOTAL 667.0 745.5 718.7
ASSETS, TOTAL 3,215.1 3,306.0 3,278.7
EQUITY AND LIABILITIES
EQUITY
Equity attributable to the equity holders of the
Parent Company
Share capital 71.3 71.3 71.3
Share premium fund 187.6
Treasury shares -28.5 -37.5
Fund for invested unrestricted 192.7 192.7
equity
Other equity 931.4 1,124.7 993.7
1,195.3 1,355.0 1,220.1
Minority interest 13.8 20.3 17.0
EQUITY, TOTAL 1,209.1 1,375.3 1,237.1
NON-CURRENT LIABILITIES
Deferred tax liabilities 104.0 106.7 106.2
Pension obligations 37.3 44.4 37.9
Provisions 6.3 8.7 6.0
Interest-bearing liabilities 677.2 338.0 449.0
Trade and other payables 36.1 29.6 34.6
CURRENT LIABILITIES
Provisions 9.3 7.8 10.9
Interest-bearing liabilities 422.2 626.7 633.6
Income tax liabilities 13.7 23.5 11.7
Trade and other payables 699.9 745.2 751.7
LIABILITIES, TOTAL 2,006.1 1,930.6 2,041.6
EQUITY AND LIABILITIES, TOTAL 3,215.1 3,306.0 3,278.7
CHANGES IN CONSOLIDATED EQUITY
EUR million
Equity attributable to the equity holders
of the Parent Company
Fund
for
inves-
ted Mino-
Share Trea- unres- rity Equi-
Share premium sury tricted Other inte- ty,
capital fund shares equity equity Total rest total
Equity at
1 Jan 2008 71.3 187.6 -51.6 1,138.6 1,345.9 18.3 1,364.2
Unregistered usage
of share -0.1 -2.4 -2.6 -2.6
options
Acquisition
of treasury shares -38.6 -38.6 -38.6
Cancellation
of treasury shares 61.6 -61.6
Registration of
new shares 0.1 2.4 2.6 2.6
Expense
recognition of
options granted 1.3 1.3 1.3
Dividends paid -1.4 -1.4
Change in
minority
interests -3.1 -3.1 3.6 0.5
Comprehensive
income for the year 49.5 49.5 -0.2 49.4
Equity at
31 March 71.3 187.6 -28.5 1,124.7 1,355.0 20.3 1,375.3
2008
Equity at
1 Jan 2009 71.3 -37.5 192.7 993.7 1,220.1 17.0 1,237.1
Unregistered usage
of share options -1.8 -1.8 -1.8
Cancellation
of treasury shares 37.5 -37.5
Registration of
new shares 1.8 1.8 1.8
Expense
recognition of
options granted 1.0 1.0 1.0
Dividends paid -0.7 -0.7
Change in
minority
interests -1.3 -1.3
Comprehensive
income for the year -25.8 -25.8 -1.2 -27.0
Equity at
31 March 71.3 192.7 931.4 1,195.3 13.8 1,209.1
2009
CONSOLIDATED INCOME STATEMENT BY QUARTER
EUR million 1-3/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2009 2008 2008 2008 2008 2008
NET SALES 636.0 683.1 769.8 778.6 798.7 3,030.1
Other operating income 14.1 38.1 17.7 14.8 26.5 97.1
Materials and services 286.4 309.4 333.4 352.0 372.6 1,367.4
Employee benefit expenses 176.2 172.2 177.5 167.8 185.2 702.8
Other operating expenses 128.2 131.1 141.5 141.9 174.3 588.8
Depreciation and impairment 38.4 35.8 36.6 37.7 121.9 231.9
losses
OPERATING PROFIT 20.9 72.7 98.5 94.0 -28.8 236.3
Share of results in associated 0.3 3.0 1.6 0.4 -0.1 4.9
companies
Financial income 6.7 3.5 3.1 6.1 6.2 18.9
Financial expenses 17.0 12.7 14.5 15.3 27.4 69.9
RESULT BEFORE TAXES 10.9 66.5 88.7 85.2 -50.1 190.3
Income taxes -3.2 -12.2 -23.4 -24.1 -9.8 -69.4
RESULT FOR THE PERIOD 7.7 54.4 65.3 61.1 -59.9 120.8
Result attributable to:
Equity holders of the Parent 8.3 54.5 64.4 59.0 -62.2 115.7
Company
Minority interest -0.6 -0.2 0.9 2.1 2.3 5.1
Earnings per share for result
attributable
to the equity holders of the
Parent company
Earnings per share, EUR 0.05 0.34 0.4 0.37 -0.39 0.72
Diluted earnings per share, 0.05 0.34 0.4 0.37 -0.39 0.72
EUR
CONSOLIDATED CASH FLOW STATEMENT 1-3/ 1-3/ 1-12/
EUR million 2009 2008 2008
OPERATIONS
Result for the period 7.7 54.4 120.8
Adjustments
Income taxes 3.2 12.2 69.4
Financial expenses 17.0 12.7 69.9
Financial income -6.7 -3.5 -18.9
Share of results in associated companies -0.3 -3.0 -4.9
Depreciation and impairment losses 38.4 35.8 231.9
Gains/losses on sales of non-current assets -1.1 -25.2 -34.2
Other adjustments -11.6 -9.7 -40.1
Change in working capital
Change in trade and other receivables 6.9 -11.0 -18.5
Change in inventories -0.2 1.9 -0.5
Change in trade and other payables, and -26.4 3.0 3.6
provisions
Interest paid -18.6 -11.5 -53.4
Other financial items -1.4 0.1 -4.5
Taxes paid -15.4 -10.0 -70.2
CASH FLOW FROM OPERATIONS -8.5 46.2 250.3
INVESTMENTS
Acquisition of tangible and intangible assets -23.9 -22.4 -113.3
Operations acquired -15.2 -64.3 -162.3
Sales of tangible and intangible assets 1.2 4.8 12.7
Operations sold 0.0 38.4 49.2
Loans granted -1.1 -18.2 -19.8
Repayments of loan receivables 2.4 0.3 8.8
Sales of short-term investments 0.5
Interest received 1.6 -0.3 7.4
Dividends received 0.2 0.7 7.5
CASH FLOW FROM INVESTMENTS -34.8 -60.9 -209.3
CASH FLOW BEFORE FINANCING -43.3 -14.7 41.1
FINANCING
Proceeds from share subscriptions 0.0 5.1
Minority capital investment/repayment of equity 1.0
Purchase of treasury shares -39.2 -48.2
Change in loans with short maturity -68.9 79.6 -53.8
Drawings of other loans 233.7 4.6 525.1
Repayments of other loans -150.9 -3.7 -264.6
Payment of finance lease liabilities -1.1 -0.7 -2.8
Dividends paid -0.7 -1.4 -164.3
Donations/other profit sharing 0.0 0.0 -0.5
CASH FLOW FROM FINANCING 12.3 39.3 -3.1
CHANGE IN CASH AND CASH EQUIVALENTS
ACCORDING TO CASH FLOW STATEMENT -31.1 24.6 38.0
Effect of exchange rate differences on cash and -4.0 -0.1 0.1
cash equivalents
NET CHANGE IN CASH AND CASH EQUIVALENTS -35.1 24.5 38.1
Cash and cash equivalents at the beginning of the 110.5 72.4 72.4
period
Cash and cash equivalents at the end of the 75.4 96.8 110.5
period
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 2009 2008 2008 2008 2008 2008
SANOMA MAGAZINES
Sanoma Magazines Netherlands 110.6 111.7 135.2 124.8 143.9 515.7
Sanoma Magazines International 50.9 70.1 76.8 77.4 82.4 306.7
Sanoma Magazines Belgium 51.3 54.2 55.5 53.7 59.8 223.2
Sanoma Magazines Finland 50.3 50.7 51.9 49.1 53.9 205.6
Eliminations -1.0 -1.3 -0.9 -1.0 -1.1 -4.3
TOTAL 262.1 285.5 318.5 304.0 338.9 1,246.8
SANOMA NEWS
Helsingin Sanomat 61.7 74.1 71.2 65.6 68.6 279.5
Ilta-Sanomat 18.4 20.5 21.9 20.6 20.2 83.2
Other publishing 22.9 23.9 24.9 23.5 25.8 98.2
Other businesses 36.2 37.9 37.5 36.5 38.2 150.1
Eliminations -31.7 -35.5 -34.5 -32.7 -33.5 -136.2
TOTAL 107.7 120.8 121.1 113.5 119.2 474.7
SANOMA ENTERTAINMENT
TV and radio 23.5 22.6 24.5 18.0 23.8 88.9
Other businesses 17.3 18.0 16.7 16.8 17.9 69.4
Eliminations -0.5 -0.1 -0.3 -0.1 -0.6 -1.1
TOTAL 40.3 40.5 40.9 34.7 41.0 157.1
SANOMA LEARNING & LITERATURE
Learning 30.6 27.8 87.5 105.9 52.2 273.3
Language services 8.3 6.2 5.8 7.5 9.3 28.8
Literature and other 24.6 27.8 20.4 23.3 29.7 101.2
businesses
Eliminations -2.6 -3.4 -3.2 -3.5 -3.2 -13.3
TOTAL 60.8 58.3 110.5 133.2 88.0 390.0
SANOMA TRADE
Kiosk operations 91.1 94.6 102.5 103.8 108.6 409.4
Press distribution 49.4 58.2 60.2 61.8 61.3 241.5
Bookstores 27.3 31.0 24.0 36.9 47.3 139.2
Movie operations 23.6 24.4 19.4 23.8 26.7 94.3
Eliminations -3.7 -5.5 -3.0 -4.8 -4.5 -17.8
TOTAL 187.7 202.7 203.2 221.4 239.3 866.6
Other companies and -22.7 -24.8 -24.4 -28.2 -27.9 -105.2
eliminations
TOTAL 636.0 683.1 769.8 778.6 798.7 3,030.1
OPERATING PROFIT BY DIVISION 1-3/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
EUR million 2009 2008 2008 2008 2008 2008
Sanoma Magazines 15.5 48.2 46.6 31.6 -40.6 85.7
Sanoma News 6.0 17.9 14.7 15.2 9.4 57.3
Sanoma Entertainment 6.1 4.0 6.3 2.8 4.1 17.3
Sanoma Learning & Literature -6.9 -4.3 26.4 36.3 -12.7 45.6
Sanoma Trade 3.8 9.9 7.4 13.0 14.7 45.1
Other companies and eliminations -3.7 -3.0 -2.9 -5.0 -3.7 -14.6
TOTAL 20.9 72.7 98.5 94.0 -28.8 236.3
SEGMENT INFORMATION
The operating segments of the Sanoma Group comprise the Group's 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 and broadband
business. Sanoma Learning & Literature business is mainly b-2-b
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. More detailed description of operating segments can be
found in note 2 in Financial Statements for 2008.
The adoption of IFRS 8 has not changed reportable segments because
also the segment information the Group has presented earlier has been
based on internal management reporting.
The accounting policies for segment reporting do not differ from
Group's accounting policies and have not changed due to the adoption
of IFRS 8. The decisions concerning assessing the performance of
operating segments and allocating resources to the segments are based
on segments' operating profit. The chief operating decision maker is
the President and CEO. The Group has not aggregated operating
segments to form the above mentioned reportable segments. Segment's
total assets do not include interest-bearing receivables and tax
receivables. Transactions between segments are based on market
prices.
Sanoma Divisions
1.1-31.3.2009
Lear- Unallo-
Enter- ning & cated/
Maga- tain- Lite- elimi- Consoli-
EUR million zines News ment rature Trade nations dated
External net sales 261.4 105.8 40.1 57.2 171.8 -0.4 636.0
Internal net sales 0.7 1.9 0.2 3.6 15.9 -22.3
NET SALES, TOTAL 262.1 107.7 40.3 60.8 187.7 -22.7 636.0
OPERATING PROFIT 15.5 6.0 6.1 -6.9 3.8 -3.7 20.9
Share of results
in
associated 0.1 0.0 0.2 0.3
companies
Financial income 6.7
Financial expense 17.0
PROFIT BEFORE 10.9
TAXES
TOTAL ASSETS 1,576.5 371.0 132.0 574.3 442.3 29.4 3,125.5
Sanoma Divisions
1.1-31.3.2008
Lear- Unallo-
Enter- ning & cated/
Maga- tain- Lite- elimi- Consoli-
EUR million zines News ment rature Trade nations dated
External net sales 284.5 118.6 39.9 54.6 185.3 0.1 683.1
Internal net sales 1.0 2.3 0.6 3.7 17.4 -24.9
NET SALES, TOTAL 285.5 120.8 40.5 58.3 202.7 -24.8 683.1
OPERATING PROFIT 48.2 17.9 4.0 -4.3 9.9 -3.0 72.7
Share of results
in
associated 2.8 0.0 -0.2 -0.1 0.1 0.3 3.0
companies
Financial income 3.5
Financial expense 12.7
PROFIT BEFORE 66.5
TAXES
TOTAL ASSETS 1,631.1 381.0 123.3 599.2 450.3 25.3 3,210.1
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 31.3.2009 31.3.2008 31.12.2008
Carrying amount at the beginning of 510.4 498.7 498.7
the period
Increases 13.3 15.9 81.2
Acquisition of operations 0.0 6.0 7.3
Decreases -1.0 -2.2 -7.0
Disposals of operations -0.1 -0.2
Depreciation for the period -17.0 -15.6 -66.4
Impairment losses for the period -0.1 -0.6 -0.7
Exchange rate differences and other -1.9 -0.2 -2.6
changes
Carrying amount at the end of the 503.7 501.8 510.4
period
The commitments for acquisitions of tangible assets were EUR 0.0
(3.1) million.
EFFECT OF ACQUISITIONS ON THE CONSOLIDATED BALANCE SHEET
EUR million 1-3/2009
Acquisition costs 4.2
Fair value of acquired net assets 0.9
Goodwill 3.3
1-12/2008 1-12/2008
Nowa Era Other
Acquisition costs 62.5 128.2
Fair value of acquired net assets 7.8 39.4
Goodwill 54.6 88.8
CONTINGENT LIABILITIES
EUR million 31.3.2009 31.3.2008 31.12.2008
Contingencies for own commitments
Mortgages 23.9 21.7 23.7
Pledges 6.0 5.8 6.0
Other items 0.4 0.4 0.4
TOTAL 30.4 28.0 30.1
Contingencies incurred on behalf of
associated companies
Guarantees 10.5 7.9 10.5
TOTAL 10.5 7.9 10.5
Contingencies incurred on behalf of
other companies
Guarantees 0.1 0.2 0.2
TOTAL 0.1 0.2 0.2
Other contingencies
Operating lease liabilities 270.8 260.2 263.8
Royalties 21.0 25.3 23.6
Other items 37.3 40.5 38.1
TOTAL 329.1 326.0 325.5
TOTAL 370.1 362.0 366.2
Derivative contracts are recorded to balance sheet. The Sanoma Group
had no derivative contracts during the reporting period or during the
previous the year.
KEY EXCHANGE RATES
1-3/ 1-3/ 1-12/
Average rate 2009 2008 2008
EUR/CZK (Czech Koruna) 27.56 25.82 25.16
EUR/HUF (Hungarian Forint) 293.61 259.19 251.25
EUR/PLN (Polish Zloty) 4.50 3.57 3.53
EUR/RUB (Russian Rouble) 44.39 36.47 36.69
EUR/SEK (Swedish Crown) 10.97 9.43 9.66
Closing rate 31.3.2009 31.3.2008 31.12.2008
EUR/CZK (Czech Koruna) 27.39 25.34 26.88
EUR/HUF (Hungarian Forint) 308.18 259.43 266.70
EUR/PLN (Polish Zloty) 4.69 3.52 4.15
EUR/RUB (Russian Rouble) 45.03 37.11 41.28
EUR/SEK (Swedish Crown) 10.94 9.40 10.87
Press Conference
Press and analyst meeting in Finnish will be held by Mr Hannu
Syrjänen, President and CEO of Sanoma at 1:30 pm (Finnish time) at
Sanomatalo, Töölönlahdenkatu 2, Helsinki.
The conference call in English for analysts and investors will be
arranged at 4.30 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 to
at Sanoma.com, either live or on demand at a later date.
The presentation material of the press and analyst meeting as well as
the slides used in the conference call will be available on Sanoma's
website after the press and analyst meeting has started.
Sanoma's second quarter 2009 results will be published on 6 August
2009 at approximately 8:30 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
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In 2008, the Group's net sales totalled EUR 3.0 billion.
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