2013-02-07 10:15:00 CET
2013-02-07 10:15:15 CET
REGULATED INFORMATION
Sanoma Oyj - Financial Statement Release
Sanoma’s Financial Statement Release 2012: Strong year for learning - consumer media undergoing transformation
Sanoma Corporation, Financial Statement Release, 7 February 2013 at 11:15 CET+1
Fourth quarter
- Net sales in the fourth quarter amounted to EUR 586.7 million (2011: EUR
627.9 million). Adjusted for changes in the Group structure, Sanoma's net sales
decreased by 6.9%.
- Operating profit excluding non-recurring items was EUR 32.1 million (2011:
EUR 54.7 million).
- Non-recurring items included in the operating profit in the fourth quarter
amounted to EUR -26.0 million (2011: EUR -8.7 million) and consisted mainly
non-cash goodwill and other intangible asset impairment.
- Earnings per share were EUR -0.07 (2011: EUR 0.11). EPS excluding
non-recurring items was EUR 0.08 (2011: EUR 0.18).
2012
- Annual net sales amounted to EUR 2,376.3 million (2011: EUR 2,378.1 million).
Adjusted for changes in the Group structure, Sanoma's net sales decreased by
3.3%.
- Operating profit excluding non-recurring items totalled EUR 232.3 million
(2011: EUR 224.1 million) and amounted to 9.8% (2011: 9.4%) of net sales.
- Non-recurring items included in the operating profit amounted to EUR -50.0
million (2011: EUR -51.5 million) and consisted mainly of restructuring
expenses and impairments.
- Non-recurring items included in the results of associated companies amounted
to EUR -17.5 million (2011: EUR -4.0 million) and consisted mainly of loss on
sales of DNA.
- Non-recurring items included in the discontinued operations amounted to EUR
77.4 million (2011: EUR -4.7 million) and consisted of gain on sales of kiosk
operations, Baltic bookstores and press distribution.
- Cash flow from operations was EUR 192.0 million (2011: EUR 273.8 million).
- Earnings per share were EUR 0.88 (2011: EUR 0.52). EPS excluding
non-recurring items was EUR 0.78 (2011: EUR 0.87).
- The Board of Directors proposes a dividend of EUR 0.60 per share.
- In 2013, Sanoma expects to maintain its financial performance compared to
2012 and estimates that in 2013 net sales and operating profit excluding
non-recurring items will be a continuation of 2012.
KEY INDICATORS * 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2012 2011 % 2012 2011 %
Net sales 586.7 627.9 -6.6 2,376.3 2,378.1 -0.1
Operating profit excluding 32.1 54.7 -41.3 232.3 224.1 3.6
non-recurring items
% of net sales 5.5 8.7 9.8 9.4
Operating profit 6.0 46.0 -86.9 182.3 172.6 5.6
Result for the period from -9.4 21.1 -144.3 70.9 78.6 -9.7
continuing operations
Result for the period *** -9.4 24.4 -138.4 149.9 86.0 74.4
Capital expenditure ** 59.5 76.2 -21.9
% of net sales 2.5 3.2
Return on investment (ROI), % 8.2 6.8
Equity ratio, % *** 42.4 37.0
Net gearing, % *** 76.2 105.7
Number of employees at the end of the period (FTE) 10,381 10,960 -5.3
Average number of employees (FTE) 10,804 11,607 -6.9
Earnings/share, EUR, -0.07 0.09 -172.7 0.40 0.47 -16.1
continuing operations
Earnings/share, EUR *** -0.07 0.11 -159.6 0.88 0.52 70.2
Cash flow from 0.66 0.86 -23.1 1.18 1.68 -29.9
operations/share, EUR ***
Equity/share, EUR 8.14 7.70 5.7
Dividend/share, EUR **** 0.60 0.60 0.0
Dividend/result, % **** 68.0 115.6 -41.2
Market capitalisation 1,211.3 1,443.3 -16.1
* Sanoma renewed its operative reporting from the third quarter of 2012. The
continuing operations of the Group include three reportable segments: Media,
News and Learning. As a result, the Trade segment is no longer a reportable
segment. Trade's remaining operation is reported in the line item ‘Other
companies and eliminations'. Aldipress from the Media segment's ‘Other
businesses' and all remaining ‘Other businesses' from the Learning segment are
reported in the line item ‘Other companies and eliminations'. The line item
‘Other companies and eliminations' includes non-core operations, head office
functions, real estate companies and Group eliminations. In addition, key
indicators contain only continuing operations. On 5 March 2012 Sanoma announced
that it had signed an agreement to sell its kiosk operations in Finland,
Estonia and Lithuania as well as its press distribution operations in Estonia
and Lithuania. According to International Financial Reporting Standards (IFRS),
any material divestment that represents a separate major line of business shall
be classified as a discontinued operation. Hence, Sanoma classified these
operations to be divested as discontinued operations for the 2012 reporting.
The discontinued operations are eliminated from the Consolidated Income
Statement and only the result for the period of these discontinued operations
is presented as a separate item after the result for the continuing operations.
Accordingly, the Consolidated Income Statement for 2011 has been restated.
** Including finance leases.
*** Includes continuing and discontinued operations.
**** Year 2012 proposal of the Board of Directors.
Harri-Pekka Kaukonen, President and CEO
”Our performance in the first half of the year was solid. During the summer the
external environment changed dramatically, forcing us to take a more cautious
view for the remainder of the year. Consequently, we decided to take
incremental actions to speed up the internal transformation. All in all, we
ended 2012 in line with our outlook from the end of the summer. The Learning
business had a strong year. The performance of our TV operations in the
Netherlands did not yet live up to our expectations affected by weaker than
expected development of the TV advertising market.
In the fourth quarter, we were able to report a decent set of numbers despite
the continued deterioration in print circulation and advertising markets as
well as seasonally weak quarter for Learning.
We continue to improve the efficiency of our operations. In the autumn we
commenced a Group-wide three-year cost savings programme, targeting to reduce
our cost base by some EUR 60 million (gross) compared to the 2012 level. The
programme is progressing according to the plan.
Divestments made during the year continued to sharpen our focus on consumer
media and learning, and strengthened our balance sheet. We also successfully
secured the base of our funding for the coming years by making more than EUR 1
billion of refinancing.
In addition to renewing and streamlining our portfolio, we launched several
digital products and services and made a number of smaller acquisitions that
support our digital transformation. The extensive reach of Sanoma offers an
attractive channel for advertisers and provides us with new opportunities to
monetise content.
In 2013, we will continue to execute our Group-wide digital and cross-media
transformation and streamline our operations to improve our overall
performance.”
Group outlook for 2013
In 2013, Sanoma expects to maintain its financial performance compared to 2012
and estimates that in 2013 net sales and operating profit excluding
non-recurring items will be a continuation of 2012.
Sanoma's outlook for 2013 is based on assumptions that the European economic
situation remains subdued and the likelihood of an advertising market recovery
during 2013 is low.
The first quarter for the Group is seasonally the weakest. In addition, Sanoma
will invest materially in the Dutch and Finnish TV operations as well as
digital development. Hence, the operating profit excluding non-recurring items
will be negative for the Group in the first quarter of 2013.
Cost savings programme
As a part of streamlining operations and ensuring competitive cost levels,
Sanoma has commenced a three-year Group-wide cost savings programme. Sanoma's
target is to reduce its cost base by EUR 60 million gross by the end of 2015
compared to the cost level of 2012. The targeted EUR 60 million gross saving
consists of EUR 30 million cost savings in support functions and EUR 30 million
related to operational efficiency. The programme is proceeding according to the
plan.
Net sales
Fourth quarter
In October-December, Sanoma's net sales decreased by 6.6% and amounted to EUR
586.7 million (2011: EUR 627.9 million). The decrease is mainly due to the
continued deterioration in circulation and advertising markets. Currency
translations did not have a material effect on the fourth quarter net sales.
When adjusted for changes in the Group structure, net sales decreased by 6.9%.
Circulation sales decreased by 5.1%. Subscription sales decreased by 4.5%,
while single copy sales decreased by 5.8% mainly as a result of declining
trends, including increased volatility in single copy markets. In Finland, the
VAT introduction from the beginning of 2012 also adversely affected print
subscription sales.
Advertising sales decreased by 7.3%. Within total advertising, online
advertising increased by 1.8%.
Sanoma's online, TV and radio advertising sales decreased by 8.4% to EUR 140.3
million (2011: EUR 153.2 million) and accounted for 23.9% (2011: 24.4%) of the
Group's net sales.
By country, the Netherlands accounted for 38.3% (2011: 39.6%), Finland for
37.4% (2011: 36.9%) and Belgium for 11.4% (2011: 10.4%) of the Group's fourth
quarter net sales. Net sales from other EU countries totalled 8.6% (2011: 8.9%)
and non-EU countries accounted for 4.2% (2011: 4.2%).
By type of sales, advertising sales accounted for 41.9% (2011: 42.3%),
subscription sales for 20.7% (2011: 20.3%), single copy sales for 13.9% (2011:
13.8%), learning for 6.1% (2011: 5.5%) and other sales for 17.4% (2011: 18.1%)
of the Group's fourth quarter net sales. Other sales include mainly press
distribution and marketing services, language and translation services, custom
publishing, event marketing, other literature and print sales.
2012
In January-December, Sanoma's net sales were stable and amounted to EUR 2,376.3
million (2011: EUR 2,378.1 million). The deterioration in circulation and
advertising markets during 2012 adversely affected net sales in Media and News
segments. The decline was offset by the consolidation of the acquired SBS TV
and print operations in the Netherlands and Belgium as well as increased sales
of the Learning segment and Nelonen Media in Finland. Currency translations did
not have a material effect on the 2012 net sales. When adjusted for changes in
the Group structure, net sales decreased by 3.3%.
Circulation sales decreased by 2.0%. Subscription sales increased by 1.1%,
while single copy sales decreased by 6.1%, mainly as a result of declining
trends, including increased volatility in single copy markets. In Finland, the
VAT introduction from the beginning of the year also adversely affected print
subscription sales.
Total advertising sales increased by 11.8%. Within total advertising online
advertising increased by 3.9%.
Sanoma's online, TV and radio advertising sales grew by 33.3% to EUR 486.4
million (2011: EUR 364.8 million) and accounted for 20.5% (2011: 15.3%) of the
Group's net sales, mainly due to the consolidation of the acquired TV
operations in the Netherlands and Belgium.
By country, the Netherlands accounted for 37.7% (2011: 32.5%), Finland for
36.6% (2011: 41.7%) and Belgium for 11.0% (2011: 10.2%) of the Group's 2012 net
sales. Net sales from other EU countries totalled 10.7% (2011: 11.6%) and
non-EU countries accounted for 3.9% (2011: 4.0%).
By type of sales, advertising sales accounted for 36.7% (2011: 32.8%),
subscription sales for 20.3% (2011: 20.1%), single copy sales for 14.0% (2011:
14.9%), learning for 12.9% (2011: 10.8%) and other sales for 16.1% (2011:
21.4%) of the Group's 2012 net sales. Other sales include mainly press
distribution and marketing services, language and translation services, custom
publishing, event marketing, other literature and print sales.
Result
Fourth quarter
In October-December, Sanoma's operating profit excluding non-recurring items
decreased by 41.3% and totalled EUR 32.1 million (2011: EUR 54.7 million) due
to weak advertising market and deterioration in circulation. In the comparable
period, operating profit excluding non-recurring items included EUR 11.1
million of one-off transaction costs and order backlog amortisations related to
the SBS acquisition, which were not categorised as non-recurring. Operating
profit excluding non-recurring items amounted to 5.5% (2011: 8.7%) of net
sales. Currency translations did not have a material effect on the fourth
quarter result.
In the fourth quarter, the Group's total expenses, excluding non-recurring
items, decreased by 4.7% due to streamlining of operations and efficiency
measures. Paper costs decreased by 8.5% and employee benefit expenses decreased
by 8.0%. The Group had around 580 fewer employees than at the end of 2011,
corresponding to a decrease of some 5%. The decrease in the number of personnel
is mostly attributable to streamlining of operations and efficiency measures.
In October-December, operating profit included EUR -26.0 million (2011: EUR
-8.7 million) of non-recurring items consisting mainly of restructuring
expenses and impairment related to Sanoma Media Russia and CEE strategic
business unit and other cash generating units. In the comparable period,
non-recurring items consisted mainly of sales gains, restructuring expenses,
including voluntary pension and exit packages, and write-downs related to ICT.
As part of the three-year group-wide cost savings programme, severance packages
were offered to 119 employees in News and the Sanoma Magazines Finland business
unit during the fourth quarter, and as a result 118 employees have left the
company during 2012.
NON-RECURRING ITEMS 10-12/ 10-12/ 1-12/ 1-12/
EUR million 2012 2011 2012 2011
Media
Gain on sale (Humo and Desert Fishes) 9.1
Impairment of goodwill and intangible assets -6.0 -6.0 -53.4
(Russia & CEE)
Write down of Jok Foe Group (Belgium) -1.6 -1.6
Restructuring expenses -8.9 -9.8 -14.2 -9.8
Sales loss (Adria Media Ljubljana) -1.1 -1.1
Impairment of intangible assets (The Netherlands) -3.4
News
Write down of intangible assets -9.9
Restructuring expenses -2.0 -9.2 -2.0 -9.2
Learning
Restructuring expenses (Learning in Poland) -4.4
Gain on sale (Esmerk) 5.7
Sale of LDC 0.9
Impairment of intangible assets -2.9 -2.9
Restructuring expenses -0.1 -1.6 -1.8
Other companies
Gains and losses on sales 16.4 49.2
Income related to Keimola Area 4.5 4.5
Impairment of goodwill -11.6 -11.6
Restructuring expenses -1.0 -1.5 -2.0 -2.5
Impairments and write downs -7.5 -26.1
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NON-RECURRING ITEMS IN OPERATING PROFIT -26.0 -8.7 -50.0 -51.5
Loss on sales (DNA) -19.3
Impairment of share in Hungarian associated -1.2
company
Gain on sales (Hansaprint) 3.0
Impairment of share in associated company -4.0
Hansaprint
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NON-RECURRING ITEMS IN RESULTS -17.5 -4.0
IN ASSOCIATED COMPANIES
Gain on sales (Kiosk operations and Baltic bookstores and press 77.4
distribution)
Write-down of real estates -1.9
Restructuring expenses -2.8
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NON-RECURRING ITEMS IN DISCONTINUED OPERATIONS 77.4 -4.7
Sanoma's fourth quarter result included EUR -0.2 million (2011: EUR -2.2
million) profit from associated companies.
Sanoma's net financial items totalled EUR -15.0 million (2011: EUR -13.0
million). Financial income amounted to EUR 3.0 million (2011: EUR 9.3 million),
of which EUR 1.5 million were exchange rate gains (2011: EUR 7.8 million).
Financial expenses amounted to EUR -18.0 million (2011: EUR -22.2 million), of
which EUR -1.3 million were exchange rate losses (2011: EUR -11.7 million).
Interest expenses amounted to EUR -14.2 million (2011: EUR -11.4 million)
Profit before taxes amounted to EUR -9.1 million (2011: EUR -30.8 million) in
the fourth quarter.
Earnings per share were EUR -0.07 (2011: EUR -0.09). Earnings per share
excluding non-recurring items were EUR 0.08 (2011: EUR 0.18).
2012
In January-December, Sanoma's operating profit excluding non-recurring items
increased by 3.6% and totalled EUR 232.3 million (2011: EUR 224.1 million). The
weak development of advertising and circulation sales lowered the result in the
Media and News segments. The decline was more than offset by the consolidation
of the acquired SBS TV and print operations in the Netherlands and Belgium as
well as the improved result in the Learning segment. Higher investments in TV
programming rights in the Netherlands also affected adversely the Sanoma Media
Netherlands strategic business unit's result in 2012. In the comparable period,
operating profit excluding non-recurring items included EUR 34.4 million of
one-off transaction costs and order backlog amortisations related to the SBS
acquisition, which were not categorised as non-recurring. Operating profit
excluding non-recurring items amounted to 9.8% (2011: 9.4%) of net sales.
Currency translations did not have a material effect on the 2012 result.
In 2012, the Group's total expenses, excluding non-recurring items, decreased
by 4.4% due to structural changes and efficiency measures. Paper costs
decreased by 3.2% and employee benefit expenses increased by 0.3%. The Group
had around 580 fewer employees than at the end of 2011, corresponding to a
decrease of some 5%. The decrease in the number of personnel is mostly
attributable to streamlining of operations and efficiency measures.
The non-recurring items included in the operating profit amounted to EUR -50.0
million (2011: EUR -51.5 million) and included impairments of goodwill and
intangible assets, restructuring expenses and gain on the sale of assets. In
2011, non-recurring items related to impairments of goodwill and intangible
assets, restructuring expenses and gain on the sale of assets.
Sanoma's 2012 result included EUR -17.7 million (2011: EUR -3.7 million) of
profits from associated companies. Non-recurring items included in the result
of associated companies amounted to EUR -17.5 million (2011: EUR -4.0 million)
and consisted of a gain and a loss on sales as well as an impairment.
Sanoma's net financial items totalled EUR -57.4 million (2011: EUR -32.7
million). Financial income amounted to EUR 18.2 million (2011: EUR 13.9
million), of which EUR 11.6 million were exchange rate gains (2011: EUR 9.3
million). Financial expenses amounted to EUR -75.6 million (2011: EUR -46.6
million), of which EUR -12.6 million were exchange rate losses (2011: EUR -16.2
million). Interest expenses amounted to EUR -52.9 million (2011: EUR -28.8
million).
Profit before taxes amounted to EUR 107.3 million (2011: EUR 136.3 million) and
the effective tax rate was 19.8% (2011: 40.3%). The effective tax rate in 2012
was affected mainly by non-taxable sales gains. In the comparable year, the tax
rate was impacted mainly by the impairments of goodwill and non-taxable sales
gains and losses.
Non-recurring items included in the discontinued operations amounted to EUR
77.4 million (2011: EUR -4.7 million) and consisted mainly of gain on the sale
of kiosk operations.
Earnings per share were EUR 0.88 (2011: EUR 0.52), of which EUR 0.40 (2011: EUR
0.47) relates to continuing operations and EUR 0.49 (2011: EUR 0.05) to
discontinued operations. Earnings per share excluding non-recurring items were
EUR 0.78 (2011: EUR 0.87).
Balance sheet and financial position
At the end of 2012, Sanoma's consolidated balance sheet totalled EUR 4,041.6
million (2011: EUR 4,328.3 million). In 2012, the Group's cash flow from
operations was EUR 192.0 million (2011: EUR 273.8 million). Cash flow from
operations per share was EUR 1.18 (2011: EUR 1.68).
Sanoma's equity ratio was 42.4% (2011: 37.0%) at the end of 2012. The return on
equity (ROE) was 9.6% (2011: 5.9%) and the return of investment (ROI) was 8.2%
(2011: 6.8%). In 2011, the acquisition of the TV and print operations in the
Netherlands and Belgium negatively affected these ratios. Equity totalled EUR
1,628.6 million (2011: EUR 1,524.2 million). The equity per share was EUR 8.14
(2011: EUR 7.70). Interest-bearing liabilities at the end of the December 2012
totalled EUR 1,408.7 million (2011: EUR 1,727.2 million). Interest-bearing net
debt was EUR 1,241.5 million (2011: EUR 1,611.2 million).
On 13 March 2012, Sanoma Corporation issued its first ever corporate bond, a
EUR 400 million five-year Senior Unsecured Eurobond, under investment grade
documentation without any financial covenants. The bond pays a fixed coupon of
5.000% and had an issue price of 99.413, equivalent to a yield of 5.136%.
On 6 July 2012, Sanoma Corporation signed a new EUR 600 million Revolving
Credit Facility with a five-year maturity. The margin depends on the leverage
of the borrower, the initial margin being 1.5% over Euribor. The new facility
replaced the former EUR 802 million syndicated revolving credit facility.
Investments, acquisitions and divestments in 2012
In January-December, investments in tangible and intangible assets, including
finance leases, amounted to EUR 59.5 million (2011: EUR 76.2 million).
Investments were mainly related to ICT systems as well as replacements and
renovations. In the comparable period, the renewal of the long-term rental
agreements of the divested movie operations accounted for about one-third of
the total investments.
In 2012, Sanoma's business acquisitions totalled EUR 27.3 million (2011: EUR
1,415.2 million). The impact of each individual acquisition on the Group assets
and liabilities was minor. The combined effect of the acquisitions since the
acquisition date on the Group's net sales amounted to EUR 17.1 million, and to
operating profit excluding non-recurring items EUR 1.7 million.
In January, Sanoma Media Netherlands increased its ownership in the Dutch joint
venture Hemels from 51% to 71%. The first 51% was acquired in 2011.
Consolidation of Hemels continues using the proportional consolidation method,
by the share of 71%. Hemels operates in custom publishing.
In March, Sanoma sold its entire 21.11% shareholding in Finnish
telecommunications group DNA Ltd and received a EUR 181.5 million cash
consideration for the shareholding. As a result of the transaction, Sanoma
recognised a non-tax-deductible non-recurring capital loss of EUR -19.3 million
in the first quarter of 2012.
In April, Sanoma divested its book logistics company Porvoon Kirjakeskus Oy. As
a result of the transaction, Sanoma recognised a non-taxable capital gain of
EUR 0.1 million in the second quarter of 2012.
In May, Sanoma sold its kiosk operations in Finland, Estonia and Lithuania as
well as its press distribution operations in Estonia and Lithuania, including
the Rautakirja trade mark, as well as its bookstore operations in Estonia. As a
result, Sanoma recognised a non-taxable non-recurring capital gain of EUR 77.4
million in the second quarter of 2012. According to International Financial
Reporting Standards (IFRS), any material divestment that represents a separate
major line of business shall be classified as a discontinued operation. Hence,
Sanoma classified these operations to be divested as discontinued operations
for the 2012 reporting. The discontinued operations are eliminated from the
Consolidated Income Statement and only the result for the period of these
discontinued operations is presented as a separate item after the result for
the continuing operations. Accordingly, the Consolidated Income Statement for
2011 has been restated.
In May, Sanoma Media acquired online retail group Read & View in the
Netherlands. The result of the company has been consolidated to Sanoma from the
beginning of May 2012.
In June, Sanoma sold its business information services company Esmerk Oy. As a
result of the transaction, Sanoma recognised a non-taxable non-recurring
capital gain of EUR 5.7 million in the second quarter of 2012.
In June, Sanoma Learning acquired and closed the acquisition of the testing and
examination company Bureau ICE. The result of the company has been consolidated
to Sanoma from the beginning of the third quarter of 2012.
In June, Sanoma sold its total ownership in Esan Kirjapaino Oy to
Keskisuomalainen Oyj. Shares represent 14.7% of the total voting shares of Esan
Kirjapaino Oy and 19.2% of the total number of shares. As a result of the
transaction, Sanoma recognised a non-taxable capital gain of EUR 0.9 million in
the third quarter of 2012.
In July, Nelonen Media, part of Sanoma Media Finland, extended its portfolio of
radio stations, currently based on Radio Aalto and Radio Rock, by purchasing
Radio SuomiPOP, Groove FM and Metro FM. The result of the acquired operations
has been consolidated to Sanoma from the beginning of the third quarter of
2012.
In July, Sanoma Media Belgium acquired and closed the acquisition of
Communication Agency HeadOffice. HeadOffice is a relationship marketing agency
that is specialised in (online) direct marketing, customer magazines, brand
activation, content marketing and loyalty. The result of the new company has
been consolidated to Sanoma from the beginning of the third quarter of 2012.
In September, Sanoma sold its total ownership in Hansaprint Oy to TS-Yhtymä Oy.
The shares represented 40% of the total voting and number of shares. As a
result of the transaction, Sanoma recognised a non-taxable non-recurring
capital gain of EUR 3.0 million in the third quarter of 2012.
In November, Sanoma Media Netherlands acquired 40% of the shares in the Dutch
e-commerce company SB Commerce, owner of, for instance, home deco web shop
Voor-thuis.nl. SB Commerce is consolidated to Sanoma by the proportional
line-by-line consolidation method, with 40% share of ownership.
In December, Sanoma sold its Slovenian operations. As a result of the
transaction, Sanoma recognised a non-tax-deductible non-recurring capital loss
of EUR -1.1 million in the fourth quarter of 2012.
MEDIA
The Media segment includes magazine, TV, radio and online businesses in 11
European countries and comprises four strategic business units: Sanoma Media
Netherlands, Sanoma Media Finland, Sanoma Media Belgium and Sanoma Media Russia& CEE.
- Underlying macro-economic uncertainty impacts the overall advertising markets
adversely.
- The TV viewing share of SBS Netherlands stabilised at around 20% during 2012.
- Sanoma's share of TV advertising market strengthened in Finland and Belgium.
- Sanoma sold its operations in Slovenia.
- In May 2012, Sanoma acquired online retail group Read & View in the
Netherlands to support reselling subscriptions online. The result of the new
company has been consolidated to Sanoma from the beginning of May 2012.
- In July 2012, Sanoma acquired three radio stations in Finland to gain a
market leadership position. The result of the acquired operations has been
consolidated to Sanoma from the beginningof the third quarter of 2012.
- In July 2012, Sanoma acquired HeadOffice in Belgium to strengthen its market
position in custom media. The result of the new company has been consolidated
to Sanoma from the beginning of the third quarter of 2012.
Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2012 2011 % 2012 2011 %
Net sales 406.3 435.8 -6.8 1,487.1 1,369.2 8.6
The Netherlands 207.2 232.2 -10.8 760.4 642.0 18.4
Finland 82.2 86.2 -4.6 301.7 309.7 -2.6
Russia & CEE 53.5 56.7 -5.6 199.5 213.1 -6.4
Belgium 64.1 61.9 3.5 228.3 209.1 9.2
Other businesses and -0.7 -1.2 42.7 -2.7 -4.8 42.6
eliminations
Operating profit excluding 46.9 64.4 -27.2 151.2 149.5 1.1
non-recurring items *
% of net sales 11.5 14.8 10.2 10.9
Operating profit 30.9 53.0 -41.7 130.0 90.4 43.8
Capital expenditure 30.7 21.9 40.2
Return on investment (ROI), % 4.2 4.5
Number of employees at the end of the period (FTE) 5,718 5,638 1.4
Average number of employees (FTE) 5,772 5,411 6.7
* In 2012, the non-recurring items included in the second quarter EUR -2.6
million restructuring expenses, in the third quarter EUR -2.7 million
restructuring expenses and in the fourth quarter EUR -8.9 million restructuring
expenses, a EUR -1.1 million loss on sales of Adria Media Ljubljana and a EUR
-6.0 million impairment of goodwill and intangible assets in Russia & CEE. In
2011, the non-recurring items included in the second quarter a EUR 9.1 million
gain on sale of Humo and Desert Fishes, in the third quarter a EUR -3.4 million
impairment of intangible assets in the Netherlands and a EUR -53.4 million
impairment of goodwill and intangible assets in Russia & CEE, and in the fourth
quarter EUR -9.8 million restructuring expenses and a EUR -1.6 million
write-down of Jok Foe Group.
Operational indicators * 1-12/ 1-12/
Magazines 2012 2011
Number of magazines published 269 280
Magazine copies sold, thousands 332,494 324,974
Advertising pages sold 47,635 48,559
Finnish TV operations
TV channels' share of TV advertising 34.0% 32.8%
TV channels' national commercial viewing share (10-44 years) 32.9% 34.5%
TV channels' national viewing share 15.1% 15.0%
Dutch TV operations
TV channels' share of TV advertising 25.8% 30.1%
TV channels' national viewing share (20-49 years) 20.1% 22.9%
* Including joint ventures
Fourth quarter
In October-December, net sales in the Media segment decreased by 6.8 % to EUR
406.3 million (2011: EUR 435.8 million). Adjusted for structural changes, net
sales declined by 7.9%.
The segment's advertising sales decreased by 7.4% and represented 47.7% (2011:
48.0%) of the fourth quarter net sales. Online advertising sales decreased by
1.1%.
The segment's print circulation sales decreased by 5.3% and represented 38.9%
(2011: 38.3%) of the fourth quarter net sales. Single copy and subscription
sales both decreased slightly.
Sanoma's online, TV and radio advertising sales in the Media segment decreased
by 9.7% due to the poor TV advertising market in the Netherlands, and
represented 31.8% (2011: 32.8%) of the segment's fourth quarter net sales.
In Media Netherlands, net sales decreased by 10.8%. Advertising sales decreased
significantly and represented 49.4% (2011: 52.1%) of Dutch net sales. Sanoma
estimates that the net TV advertising market in the Netherlands decreased by
around 7% in October-December. Online advertising sales decreased somewhat.
Sanoma estimates that the net consumer magazine advertising market decreased by
around 14% in October-December. Magazine operations' sales decreased clearly.
Single copy and subscription sales both decreased somewhat compared to the
comparable quarter. Circulation sales represented 38.3% (2011: 36.4%) of the
Dutch net sales. The declining trends in the readers market continued.
In Media Finland, net sales decreased by 4.6% in the fourth quarter as slightly
growing TV and radio sales, including acquired radio operations, did not offset
clearly decreasing magazine operations' sales. According to TNS Gallup Adex,
the net TV advertising market in Finland decreased by around 3% in the fourth
quarter compared to the comparable quarter. The net magazine advertising market
decreased by some 14%. In total, advertising sales of the Finnish operations
represented 45.1% (2011: 42.0%) of net sales in the fourth quarter.
Subscription sales decreased somewhat and single copy sales remained at the
comparable quarter's level. Circulation in total represented 41.6% (2011:
41.9%) of Finnish net sales.
Net sales in Media Belgium increased by 3.5% due to significantly increased
advertising sales in TV and the acquisition of HeadOffice. Sanoma estimates
that the net magazine advertising market in Belgium decreased by around 20% in
October-December. Sanoma estimates that the net TV advertising market in
Belgium declined by around 9% in October-December. Sanoma's TV operations in
the Flemish part of Belgium continued to strengthen its share of viewing and
consequently improved its net advertising market share during the year to 28.3%
(2011: 25.4%). In total, advertising sales represented 36.3% (2011: 34.6%) and
circulation sales 45.1% (2011: 45.6%) of the net sales in Belgium,
respectively.
In Media Russia and the CEE countries, net sales decreased by 5.6% due to
continued pressure on circulation sales. Advertising sales in the Russia and
CEE business unit remained at the comparable quarter's level. In total,
advertising sales represented 58.9% (2011: 54.5%) of net sales in the Russia
and CEE strategic business unit. Following the declining market trends and
pressure on consumer purchasing power, single copy and subscription sales
continued to come down in most countries. Circulation sales decreased therefore
somewhat, and represented 29.3% (2011: 32.0%) of the strategic business unit's
net sales. Service and product portfolios are optimised according to their
future development potential as well as to reflect changes in the market
environment.
Operating profit excluding non-recurring items in the Media segment in
October-December decreased by 27.2% to EUR 46.9 million (2011: EUR 64.4
million). In the comparable period, operating profit excluding non-recurring
items included EUR 11.1 million of one-off transaction costs and order backlog
amortisations related to the SBS acquisition, which were not categorised as
non-recurring. In the Netherlands, the operating profit excluding non-recurring
items decreased significantly, mainly as a result of poor advertising market
development and higher investments in TV programming rights. In Finland, the
operating profit excluding non-recurring items decreased significantly as a
result of the decline in circulation sales. In Belgium, the operating profit
excluding non-recurring items decreased clearly mainly due to higher marketing
expenses and investments in portfolio development. In Russia and CEE countries
the operating profit excluding non-recurring items increased significantly as a
result of cost control. Non-recurring items included in the operating profit
totalled EUR -15.9 (2011: EUR -11.4 million) related to restructuring costs as
well as impairment of goodwill and intangibles. In the comparable period,
non-recurring items related to restructuring expenses and write-downs.
Media's investments in tangible and intangible assets totalled EUR 10.0 million
(2011: EUR 6.0 million) and consisted of ICT investments.
2012
In January-December, Media's net sales increased by 8.6% to EUR 1,487.0 million
(2011: EUR 1,369.2 million). The growth came mainly from the consolidation of
the acquired SBS TV and print operations in the Netherlands and Belgium which
more than offset lower circulation and magazine advertising sales. Adjusted for
structural changes, net sales decreased by 5.8%.
In the Media segment, operating profit excluding non-recurring items increased
by 1.1% to EUR 151.2 million (2011: EUR 149.5 million), as consolidation of the
acquired operations as well as good development in online and Finnish TV
operations offset lower results in magazine operations in all strategic
business units. In the comparable period, operating profit excluding
non-recurring items included EUR 34.4 million of one-off transaction costs and
order backlog amortisations related to the SBS acquisition, which were not
categorised as non-recurring. Non-recurring items included in the operating
profit totalled EUR -21.2 (2011: EUR -59.1 million) and included impairments of
goodwill and intangibles, restructuring expenses, loss on the sale of assets
and expenses in relation to efficiency improvement projects. In the comparable
year, non-recurring items were related to impairments of goodwill and
intangible assets, restructuring expenses and gains on the sale of assets.
Media's investments in tangible and intangible assets totalled EUR 30.7 million
(2011: EUR 21.9 million) and consisted mainly of ICT investments for business
support and digital developments. The most significant acquisitions made in
2012 were online retail group Read & View in the Netherlands, three commercial
radio stations in Finland and content marketing company HeadOffice in Belgium.
In 2011, the most significant acquisition was the acquisition of the SBS TV and
print operations in the Netherlands and Belgium.
NEWS
The News segment includes the Sanoma News strategic business unit, Finland's
leading player in newspaper publishing and online media.
- The underlying macro-economic uncertainty impacts the advertising market,
particularly printed recruitment advertising, which adversely affects the News
segment.
- Subscription sales continued to decrease and the VAT introduction from the
beginning of 2012 also adversely affected print subscription sales.
- The effects of the on-going efficiency improvements are not yet offsetting
the negative impact from lower net sales.
- Helsingin Sanomat renewed its format substantially, including the combination
of newsroom with editorial staff at TV channel Nelonen, the introduction of
pay-wall in late November and change from broadsheet to tabloid in January
2013.
Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2012 2011 % 2012 2011 %
Net sales 107.6 112.0 -3.9 422.8 435.8 -3.0
Helsingin Sanomat 57.1 60.8 -6.0 224.9 238.5 -5.7
Ilta-Sanomat 21.1 21.6 -2.4 84.3 84.4 -0.1
Other publishing 24.6 25.4 -3.1 96.4 97.0 -0.6
Other businesses and eliminations 4.8 4.2 13.5 17.2 15.9 7.8
Operating profit excluding 10.0 14.1 -29.2 32.4 49.4 -34.5
non-recurring items *
% of net sales 9.3 12.6 7.7 11.3
Operating profit 8.0 4.9 62.3 20.5 40.2 -49.1
Capital expenditure 11.0 16.9 -35.0
Return on investment (ROI), % 9.3 16.7
Number of employees at the end of the period (FTE) 1,928 2,025 -4.8
Average number of employees (FTE) 2,055 2,061 -0.3
* In 2012, the non-recurring items included in the third quarter a EUR -9.9
million write down of intangible assets and in the fourth quarter EUR -2.0
million restructuring expenses. In 2011, the non-recurring items included in
the fourth quarter EUR -9.2 million restructuring expenses.
Operational indicators 10-12/ 10-12/
Online services, unique visitors, weekly 2012 2011
Iltasanomat.fi 2,451,672 2,219,968
HS.fi 1,394,027 1,413,050
Huuto.net 442,911 458,174
Oikotie.fi 496,600 461,842
Taloussanomat.fi 723,001 664,339
1-12/ 1-12/
Circulation 2012 2011
Helsingin Sanomat 337,962 365,994
Ilta-Sanomat 132,595 143,321
Fourth quarter
In October-December, net sales in the News segment decreased by 3.9% mainly due
to Helsingin Sanomat business unit. Adjusted for structural changes, sales
decreased by 4.5%.
Print circulation sales decreased by 4.3%, as single copy sales declined
somewhat and subscription sales decreased slightly. Circulation sales accounted
for 41.3% (2011: 41.5%) of the segment's net sales.
Advertising sales decreased by 6.5% due to adverse market conditions. Print
advertising declined clearly, whereas online advertising clearly increased.
Advertising sales represented 49.4% (2011: 50.7%) of the net sales in News in
the fourth quarter.
According to TNS Gallup Adex, the net newspaper advertising market in Finland
decreased by some 13% in the fourth quarter compared to the comparable quarter.
Online advertising (net) included in the statistics was up by some 14%.
Total digital sales increased by 3.2%. Digital sales consisting mostly of
advertising, but also increasingly services and content, represented 14.1%
(2011: 13.1%) of the segment's net sales.
The net sales of the Helsingin Sanomat business unit decreased by 6.0%. The
underlying macro-economic uncertainty affected recruitment advertising sales in
particular. Accordingly, advertising sales decreased clearly and represented
52.7% (2011: 54.6%) of the business unit's net sales. Subscription sales
decreased slightly, partly driven by the VAT introduction on print
subscriptions from the beginning of 2012.
The Ilta-Sanomat business unit's net sales decreased by 2.4%. Advertising sales
increased slightly, as online advertising development more than offset the
clearly declining print advertising, and represented 31.7% (2011: 30.2%) of the
business unit's net sales. Circulation sales declined slightly. The total
volume of the Finnish print tabloid market has decreased somewhat during 2012.
Ilta-Sanomat continued to strengthen its market leadership and its market share
is 59.2% (2011: 58.3%) of the tabloid newsstand market for the rolling 12-month
period.
Net sales from other publishing operations decreased by 3.1%, as net sales of
free sheets and regional newspapers continued to decline.
In October-December, News' operating profit excluding non-recurring items
decreased by 29.2% to EUR 10.0 million (2011: EUR 14.1 million). The effects of
the on-going efficiency improvements did not offset lower net sales. News'
operating profit included EUR -2.0 million (2011: EUR -9.2 million) of
non-recurring items related to restructuring costs. In the comparable period,
non-recurring items were related to pension and exit packages.
2012
In January-December, News' sales decreased by 3.0% to EUR 422.8 million (2011:
EUR 435.8 million). Advertising sales decreased by 6.0% due to adverse market
conditions. Digital sales, consisting mostly of online advertising, but also to
a larger extent content, continued to develop positively and amounted to 13.8%
(2011: 12.1%) of News' total sales. The underlying macro-economic uncertainty
adversely impacts the advertising market, particularly printed recruitment
advertising. Print circulation sales decreased by 3.1%, as both single copy and
subscription sales declined slightly. Adjusted for structural changes, net
sales decreased by 3.6%.
Operating profit excluding non-recurring items in the News segment decreased by
34.5% to EUR 32.4 million (2011: EUR 49.4 million), mainly due to the
significantly lower result of the Helsingin Sanomat business unit.
Non-recurring items included in the operating profit totalled EUR -11.9 million
(2011: EUR -9.2 million) and were related to an ICT system and restructuring
costs. In the comparable year, non-recurring items were related to pension and
exit packages.
News' investments in tangible and intangible assets totalled EUR 11.0 million
(2011: EUR 16.9 million), and consisted mainly of investments in digital
business, ICT and replacement investment in printing. There were no material
acquisitions in 2012 or in the comparable year.
LEARNING
The Learning segment includes the Sanoma Learning strategic business unit.
Sanoma Learning is a leading European provider of learning materials and
solutions in print and digital format.
- Market conditions remained stable in most of our operating countries.
- In June 2012, Sanoma acquired the testing and examination company Bureau ICE
to expand its learning solutions portfolio. The result of the company has been
consolidated to Sanoma from the beginning of the third quarter of 2012.
- Language services and book printing operations have been transferred to the
Group line item ‘Other companies and eliminations'. Therefore there will be no
sales recorded in the ‘Other businesses' unit as of the third quarter 2012.
Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change
EUR million 2012 2011 % 2012 2011 %
Net sales 35.5 39.2 -9.6 312.4 290.6 7.5
Learning 35.5 34.7 2.4 306.4 256.6 19.4
Other businesses 0.0 5.0 -100.0 6.5 36.1 -82.1
Eliminations 0.0 -0.4 92.0 -0.5 -2.1 75.8
Operating profit excluding -22.0 -20.0 -10.2 59.6 47.7 24.9
non-recurring items *
% of net sales -62.0 -50.9 19.1 16.4
Operating profit -22.0 -23.0 4.2 59.3 43.9 35.0
Capital expenditure 7.3 10.0 -26.9
Return on investment (ROI), % 11.0 8.8
Number of employees at the end of the period (FTE) 1,735 2,011 -13.7
Average number of employees (FTE) 1,832 2,088 -12.2
* In 2012, the non-recurring items included in the third quarter EUR -4.4
million restructuring expenses of the Polish Learning operations, in the second
quarter EUR 5.7 million gain on sales of Esmerk and EUR -1.6 million
restructuring expenses. In 2011, the non-recurring items included in the first
quarter a EUR 0.9 million non-recurring income related to sale of LDC, in the
second quarter EUR -1.7 million restructuring expenses and in the third quarter
EUR -0.1 million restructuring expenses. In the fourth quarter, the
non-recurring items included EUR -2.9 million write-down of intangible assets
Fourth quarter
In October-December, net sales in the Learning segment decreased by 9.6% to EUR
35.5 million (2011: 39.2 million). Adjusted for structural changes, net sales
increased by 0.4%.
The learning business has, by nature, an annual cycle and strong seasonality.
It accrues most of its net sales and results during the second and third
quarters, whereas the first and fourth quarter are typically loss-making.
The book logistics company Porvoon Kirjakeskus Oy was divested in April 2012
and it is no longer included in Learning's figures from the beginning of April
2012.
The business information service provider Esmerk was divested in June 2012 and
it is no longer included in Learning's figures from the beginning of June 2012.
Net sales in the learning business unit increased by 2.4% to EUR 35.5 million.
In most of our operating countries market conditions remained stable. In
Hungary, upcoming reforms may cause a lot of uncertainty in spending.
Operating profit excluding non-recurring items in the Learning segment
decreased by 10.2% to EUR -22.0 million (2011: EUR -20.0 million). The decrease
is mainly related to structural changes but partly explained by the timing
shift between quarters. There were no non-recurring items included in the
operating profit (2011: EUR -3.0 million).
Learning's investments in tangible and intangible assets totalled EUR 2.2
million (2011: EUR 3.5 million). They were comprised mainly of investments in
ICT.
2012
In January-December, Learning segment's net sales increased by 7.5% to EUR
312.4 million (2011: EUR 290.6 million), mainly related to structural changes
and improved underlying performance. Adjusted for structural changes, net sales
increased by 8.6%.
Operating profit excluding non-recurring items in the Learning segment
increased by 24.9% to EUR 59.6 million (2011: EUR 47.7 million), mainly related
to acquisitions but also improved underlying performance. Non-recurring items
included in the operating profit totalled EUR -0.3 million (2011: EUR -3.8
million).
Learning's investments in tangible and intangible assets totalled EUR 7.3
million (2011: EUR 10.0 million). They comprised mainly of investment in ICT.
The most significant acquisition made in 2012 was the testing and examination
company Bureau ICE. The most significant transaction in the comparable year was
the acquisition of the Finnish educational publisher Tammi Learning (now part
of Sanoma Pro) and the Swedish educational publisher Bonnier Utbildning (now
Sanoma Utbildning).
THE GROUP
Personnel
In 2012, the average number of persons employed by the Sanoma Group was 10,804
(2011: 11,607). In full-time equivalents, the number of Group employees at the
end of the year was 10,381 (2011: 10,960). Divestments and restructuring
decreased the number of personnel in 2012. In full-time equivalents, the Media
segment had 5,718 (2011: 5,638) employees at the end of 2012, the News segment
1,928 (2011: 2,025), the Learning segment 1,735 (2011: 2,011) and the Group
functions 203 (2011: 178).
The total employee benefits to Sanoma employees in 2012, including the expense
recognition of options granted, amounted to EUR 517.6 million (2011: 549.7
million).
Dividend
On 31 December 2012, Sanoma Corporation's distributable funds were EUR 578.7
million, of which profit for the year made up EUR 136.5 million.
The Board of Directors proposes to the Annual General Meeting that:
- A dividend of EUR 0.60 per share, or in total an estimated EUR 97.7 million,
shall be paid.
- A sum of EUR 0.55 million shall be transferred to the donation reserve and
used at the Board's discretion.
- The amount left in equity shall be EUR 480.4 million.
In accordance with the Annual General Meeting's decision, Sanoma paid out a
per-share dividend of EUR 0.60 for 2011. Sanoma conducts an active dividend
policy and primarily distributes over half of the Group result excluding
non-recurring items for the period in dividends.
AGM, Financial Statements and Annual Report
Sanoma Corporation's AGM will be held on 3 April 2013 at 14:00 Finnish time
(CET+1) in the Congress Wing of the Helsinki Exhibition & Convention Centre,
Finland. The agenda for the meeting will be available later on the Group's
website at Sanoma.com.
Sanoma's Financial Statements, Board of Directors' Report and Corporate
Governance Statement for 2012 will be published in digital format in the
Archive section of the Group website during week 10 (the week beginning 4
March). The ‘Sanoma View' will be published on 3 April 2013 and can be ordered
from the Group's website Sanoma.com.
Shares and holdings
In 2012, 106,129,204 (2011: 89,486,428) Sanoma shares were traded on the NASDAQ
OMX Helsinki and traded shares accounted for some 65% (2011: 55%) of the
average number of shares. Sanoma's NASDAQ OMX Helsinki stock exchange turnover
was EUR 851.7 million (2011: EUR 1,096.9 million). Sanoma's shares traded on
the NASDAQ OMX Helsinki corresponded to around 65% of the total traded share
volume on stock exchanges.
During 2012 the volume-weighted average price of a Sanoma share on the NASDAQ
OMX Helsinki was EUR 8.15, with a low of EUR 5.79 and a high of EUR 11.70. At
the end of the year, Sanoma's market capitalisation was EUR 1.2 billion (2011:
EUR 1.4 billion), with Sanoma's share closing at EUR 7.44 (2011: EUR 8.87).
On 29 May 2012, Sanoma Corporation received flagging notifications pursuant to
Chapter 2 Section 9 of the Finnish Securities Markets Act (26 May 1989 / 495)
concerning shares in Sanoma Corporation. Aatos Erkko's estate announced that
the ownership of shares in Sanoma Corporation held by the estate (directly and
indirectly via Asipex Oy) on 29 May 2012 will transfer to the Jane and Aatos
Erkko Foundation after the estate inventory has been concluded and the
testamentary disposition has been executed. Following this, the shares held by
the estate in Sanoma Corporation will decrease from 37,483,619 shares, to zero,
i.e. 0.0000% of all shares and votes in Sanoma Corporation. The holding of Jane
and Aatos Erkko Foundation of the shares and voting rights of Sanoma
Corporation will increase by the corresponding amount, thus exceeding 20% of
all shares and votes in Sanoma Corporation.
On 3 October 2012, Sanoma Corporation received flagging notifications pursuant
to Chapter 2 Section 9 of the Finnish Securities Markets Act (26 May 1989 /
495) concerning shares in Sanoma Corporation, stating that the ownership of
shares in Sanoma Corporation held by Aatos Erkko's estate (directly and
indirectly via Asipex Oy) has been transferred to the Jane and Aatos Erkko
Foundation in accordance with testamentary disposition that was executed on 3
October 2012. Following this, the shares held by the Aatos Erkko's estate in
Sanoma Corporation decreased from the current 37,483,619 shares to zero, i.e.
0.0000% of all shares and votes in Sanoma Corporation. The holding of Jane and
Aatos Erkko Foundation of the shares and voting rights of Sanoma Corporation
increased by the corresponding amount, thus on the date of flagging exceeding
20% of all shares and votes in Sanoma Corporation.
On 31 October 2012, Sanoma Corporation received flagging notifications pursuant
to Chapter 2 Section 9 of the Finnish Securities Markets Act (26 May 1989 /
495) concerning shares in Sanoma Corporation, stating that the ownership to
shares in Sanoma Corporation held by Oy Asipex Ab (indirectly owned by Jane and
Aatos Erkko Foundation) has been transferred in a transaction between Jane and
Aatos Erkko Foundation and Oy Asipex Ab to the Jane and Aatos Erkko Foundation
(direct ownership). Following this, the shares held by the Oy Asipex Ab in
Sanoma Corporation decreased from the current 11,803,543 shares, to zero, i.e.
0.00% of all shares and votes in Sanoma Corporation. The direct holding of Jane
and Aatos Erkko Foundation of the shares and voting rights of Sanoma
Corporation increased by the corresponding amount to 37,483,619 shares, thus on
the date of flagging totalling 23.02% of all shares and votes in Sanoma
Corporation.
On 2 November 2012, Sanoma Corporation received a flagging notification
pursuant to Chapter 2 Section 9 of the Finnish Securities Markets Act (26 May
1989 / 495) concerning shares in Sanoma Corporation, stating that the total
ownership to shares in Sanoma Corporation held by Mr Antti Herlin and the
companies he controls, Holding Manutas Oy and Security Trading Oy, has
increased from 7,556,800 shares to 8,556,800, thus on the date of flagging
totalling 5.26% of all shares and votes in Sanoma Corporation.
At the end of 2012, Sanoma's registered share capital was EUR 71,258,986.82 and
the number of shares was 162,812,093.
Board of Directors, auditors and management
The AGM held on 3 April 2012 confirmed the number of Sanoma's Board members as
10. Board members Annet Aris, Jaakko Rauramo and Sakari Tamminen were
re-elected as members of the Board. The Board of Directors of Sanoma consists
of Jaakko Rauramo (Chairman), Sakari Tamminen (Vice Chairman), and Annet Aris,
Jane Erkko, Antti Herlin, Sirkka Hämäläinen-Lindfors, Seppo Kievari, Nancy
McKinstry, Rafaela Seppälä and Kai Öistämö as members.
The AGM appointed chartered accountants KPMG Oy Ab as the auditor of the
company, with Virpi Halonen, Authorised Public Accountant, as Auditor in
Charge.
Sanoma's new organisational model was announced on 5 August 2011. From the end
of December 2012, the Executive Management Group (EMG) comprises: Harri-Pekka
Kaukonen (President and CEO of the Sanoma Group, chairman of the EMG),
Jacqueline Cuthbert (CHRO), Jacques Eijkens (CEO, Sanoma Learning), Heike
Rosener (CEO, Sanoma Media Russia & CEE), Kim Ignatius (CFO), John Martin
(Chief Strategy and Digital Officer, CSDO), Dick Molman (CEO, Sanoma Media
Netherlands), Anu Nissinen (CEO, Sanoma Media Finland), Pekka Soini (CEO,
Sanoma News) and Aimé Van Hecke (CEO, Sanoma Media Belgium).
Board authorisations
The AGM held on 3 April 2012 authorised the Board to decide on the repurchase
of a maximum of 16,000,000 of the company's own shares, accounting for 9.8% of
total voting rights that the maximum number of own shares covered by the
authorisation would provide entitlement to. This authorisation is effective
until 30 June 2013 and terminates the corresponding authorisation granted by
the AGM on 5 April 2011. The Board of Directors did not exercise its right
under this authorisation during the fourth quarter.
The Board also has a valid authorisation from the AGM held on 8 April 2010 to
decide on an issuance of a maximum of 82,000,000 new shares and a transfer of a
maximum of 5,000,000 treasury shares, together accounting for 35.5% of the
total voting rights that the maximum number of own shares covered by the
authorisation would provide entitlement to. The authorisation will be valid
until 30 June 2013. Under this authorisation, the Board decided on 20 December
2011 on the issuance of Stock Option Scheme 2011 and on 22 December 2010 on the
issuance of Stock Option Scheme 2010.
Seasonal fluctuation
The net sales and results of media businesses are particularly affected by the
development of advertising. Advertising sales are influenced, for example, by
the number of newspaper and magazine issues published each quarter, which
varies annually. Television advertising in the Netherlands, Finland and Belgium
is usually strongest in the second and fourth quarters.
Learning 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 one for
both.
Significant risks and uncertainty factors (unchanged)
The most significant risks and uncertainty factors Sanoma currently faces are
described in the Financial Statements and on the Group's website at Sanoma.com,
together with the Group's main principles of risk management. Many of the
identified risks relate to changes in customer preferences. The driving force
behind these changes is the on-going digitisation process. Sanoma takes actions
in all its strategic business units to respond to this challenge.
With regard to changing customer preferences and digitisation, new entrants
might be able to better utilise these changes and therefore gain market share
from Sanoma's established businesses.
Normal business risks associated with the industry relate to developments in
media advertising and consumer spending. Media advertising is sensitive to
economic fluctuations. Therefore, general economic conditions and economic
trends of the industry influence Sanoma's business activities and operational
performance.
Sanoma's financial risks include interest rate and currency risks, liquidity
risk and credit risk. Other risks include risks related to equity, impairment
and the availability of capital. On the Group level, the most significant risks
relate to liquidity risk and changes in exchange rates and interest rates.
As a result of the SBS acquisition, Sanoma's consolidated balance sheet
includes about EUR 3.0 billion in goodwill, publishing rights and other
intangible assets. Most of this is related to magazine and TV operations. In
accordance with IFRS, instead of goodwill being amortised regularly, it is
tested for impairment on an annual basis, or whenever there is any indication
of impairment. Major changes in business fundamentals could lead to impairment.
FULL-YEAR STATEMENT (AUDITED)
Accounting policies
The Sanoma Group has prepared its Interim Report in accordance with IAS 34
'Interim Financial Reporting' while adhering to related IFRS standards and
interpretations applicable within the EU on 31 December 2012. The accounting
policies of the Interim Report and the definitions of key indicators are
presented on the Sanoma website at Sanoma.com. All figures have been rounded
and consequently the sum of individual figures can deviate from the presented
sum figure. Key figures have been calculated using exact figures.
CONSOLIDATED INCOME STATEMENT
EUR million 10-12/ 10-12/ 1-12/ 1-12/
CONTINUING OPERATIONS 2012 2011 2012 2011
NET SALES 586.7 627.9 2,376.3 2,378.1
Other operating income 15.7 29.1 52.5 116.5
Materials and services 199.6 207.0 816.3 858.2
Employee benefit expenses 155.4 168.8 613.6 611.7
Other operating expenses 141.8 147.1 491.5 541.3
Share of results in associated companies -1.2
Depreciation, amortisation and impairment 99.7 88.1 325.2 309.5
losses
----------------
----------------------------------------------- -----------------
OPERATING PROFIT 6.0 46.0 182.3 172.6
Share of results in associated companies -0.2 -2.2 -17.7 -3.7
Financial income 3.0 9.3 18.2 13.9
Financial expenses 18.0 22.2 75.6 46.6
----------------
----------------------------------------------- -----------------
RESULT BEFORE TAXES -9.1 30.8 107.3 136.3
Income taxes -0.3 -9.7 -36.4 -57.7
----------------
----------------------------------------------- -----------------
RESULT FOR THE PERIOD FROM CONTINUING -9.4 21.1 70.9 78.6
OPERATIONS
DISCONTINUED OPERATIONS
Result for the period from discontinued 0.0 3.3 79.0 7.4
operations
--------------------------------------------------------------------------------
RESULT FOR THE PERIOD -9.4 24.4 149.9 86.0
Result from continuing operations attributable to:
Equity holders of the Parent Company -10.8 14.9 64.7 77.0
Non-controlling interests 1.4 6.2 6.2 1.5
Result attributable to:
Equity holders of the Parent Company -10.8 18.1 143.7 84.5
Non-controlling interests 1.4 6.2 6.2 1.5
Earnings per share for result attributable
to the equity holders of the Parent company:
Earnings per share, EUR, continuing operations -0.07 0.09 0.40 0.47
Diluted earnings per share, EUR, continuing -0.07 0.09 0.40 0.47
operations
Earnings per share, EUR, discontinued 0.00 0.02 0.49 0.05
operations
Diluted earnings per share, EUR, discontinued 0.00 0.02 0.49 0.05
operations
Earnings per share, EUR -0.07 0.11 0.88 0.52
Diluted earnings per share, EUR -0.07 0.11 0.88 0.52
STATEMENT OF COMPREHENSIVE INCOME
EUR million 10-12/ 10-12/ 1-12/ 1-12/ 2012 2011 2012 2011
Result for the period -9.4 24.4 149.9 86.0
Other comprehensive income:
Change in translation differences -2.9 -2.2 23.4 -25.6
Cash flow hedges 3.2 -4.8 0.9 -11.7
Income tax related to cash flow hedges -0.8 1.1 -0.2 2.9
Other comprehensive income for the period, net -0.5 -5.9 24.1 -34.4
of tax
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -9.8 18.5 174.0 51.6
Total comprehensive income attributable to:
Equity holders of the Parent Company -11.2 12.3 167.8 50.1
Non-controlling interests 1.4 6.2 6.2 1.5
CONSOLIDATED BALANCE SHEET
EUR million 31.12.2012 31.12.2011
ASSETS
NON-CURRENT ASSETS
Tangible assets 283.4 343.6
Investment property 12.0 5.8
Goodwill 2,307.6 2,316.2
Other intangible assets 700.2 709.8
Interests in associated companies 8.1 219.3
Available-for-sale financial assets 8.0 15.4
Deferred tax receivables 28.8 29.9
Trade and other receivables 48.4 44.3
---------------------------------------------------------------
NON-CURRENT ASSETS, TOTAL 3,396.6 3,684.3
CURRENT ASSETS
Inventories 66.2 96.8
Income tax receivables 27.1 12.5
Trade and other receivables 384.1 418.4
Available-for-sale financial assets 0.3 0.3
Cash and cash equivalents 167.2 116.0
---------------------------------------------------------------
CURRENT ASSETS, TOTAL 645.0 644.0
ASSETS, TOTAL 4,041.6 4,328.3
EQUITY AND LIABILITIES
EQUITY
Equity attributable to the equity holders of the Parent Company
Share capital 71.3 71.3
Fund for invested unrestricted equity 203.3 203.3
Other reserves -8.0 -8.7
Other equity 1,058.6 988.0
---------------------------------------------------------------
1,325.1 1,253.9
Non-controlling interests 303.4 270.3
---------------------------------------------------------------
EQUITY, TOTAL 1,628.6 1,524.2
NON-CURRENT LIABILITIES
Deferred tax liabilities 143.6 146.1
Pension obligations 14.2 17.2
Provisions 4.1 6.3
Financial debt 942.2 1,101.2
Trade and other payables 44.9 38.9
---------------------------------------------------------------
NON-CURRENT LIABILITIES, TOTAL 1,148.9 1,309.7
CURRENT LIABILITIES
Provisions 13.0 15.3
Financial debt 466.5 626.0
Income tax liabilities 27.4 27.4
Trade and other payables 757.1 825.8
---------------------------------------------------------------
CURRENT LIABILITIES, TOTAL 1,264.1 1,494.5
----------------------------------------------------------------
---------------------------------------------------------------
LIABILITIES, TOTAL 2,413.0 2,804.1
EQUITY AND LIABILITIES, TOTAL 4,041.6 4,328.3
CHANGES IN CONSOLIDATED EQUITY
EUR million
Equity attributable to the equity holders of the Parent
Company
Fund for Non-
inves- cont-
ted rol-
unres- Other ling Equi-
Share tricted re- Other inte- ty,
capital equity serves equity Total rests total
Equity at
1 Jan 2011 71.3 203.3 0.2 1,096.5 1,371.2 4.8 1,376.0
Share subscription
with options 0.0 0.0 0.0
--------------------------------------------------------------------------------
Expense
recognition of
options granted 3.5 3.5 3.5
--------------------------------------------------------------------------------
Dividends paid -179.1 -179.1 -0.6 -179.7
--------------------------------------------------------------------------------
Change in non-
controlling
interests 8.2 8.2 264.6 272.8
--------------------------------------------------------------------------------
Comprehensive
income for the period -8.8 58.9 50.1 1.5 51.6
--------------------------------------------------------------------------------
Equity at
31 December 2011 71.3 203.3 -8.7 988.0 1,253.9 270.3 1,524.2
Equity at
1 Jan 2012 71.3 203.3 -8.7 988.0 1,253.9 270.3 1,524.2
Expense
recognition of
options granted 2.6 2.6 2.6
--------------------------------------------------------------------------------
Dividends paid -97.7 -97.7 -0.4 -98.1
--------------------------------------------------------------------------------
Change in non-
controlling
interests -1.5 -1.5 27.4 25.9
--------------------------------------------------------------------------------
Comprehensive
income for the period 0.7 167.2 167.8 6.2 174.0
--------------------------------------------------------------------------------
Equity at
31 December 2012 71.3 203.3 -8.0 1,058.6 1,325.1 303.4 1,628.6
INCOME STATEMENT BY QUARTER
EUR million
1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
CONTINUING OPERATIONS 2012 2012 2012 2012 2011 2011 2011 2011
NET SALES 543.6 646.5 599.5 586.7 530.2 592.6 627.4 627.9
Other operating income 8.6 19.4 8.7 15.7 7.0 70.0 10.4 29.1
Materials and services 190.0 212.2 214.6 199.6 205.5 217.3 228.4 207.0
Employee benefit 156.2 156.4 145.6 155.4 148.1 152.1 142.6 168.8
expenses
Other operating 122.4 118.2 109.1 141.8 118.7 136.6 139.0 147.1
expenses
Share of results in associated companies -0.1 -1.1
Depreciation, 67.6 80.6 77.2 99.7 37.7 39.8 143.9 88.1
amortisation and
impairment losses
-----------------------
---------------------------------------------------------
OPERATING PROFIT 15.9 98.5 61.8 6.0 27.2 116.7 -17.2 46.0
Share of results in -16.4 -3.4 2.3 -0.2 1.9 -0.1 -3.2 -2.2
associated companies
Financial income 7.0 4.9 3.3 3.0 2.3 1.4 1.0 9.3
Financial expenses 20.7 19.1 17.8 18.0 4.7 6.6 13.1 22.2
-----------------------
---------------------------------------------------------
RESULT BEFORE TAXES -14.1 80.8 49.7 -9.1 26.7 111.3 -32.5 30.8
Income taxes -3.6 -21.8 -10.7 -0.3 -8.3 -18.4 -21.3 -9.7
--------------------------------------------------------------------------------
-----------------------
RESULT FOR THE PERIOD -17.8 59.0 39.0 -9.4 18.4 92.9 -53.8 21.1
FROM CONTINUING
OPERATIONS
DISCONTINUED OPERATIONS
Result for the period 1.2 78.6 -0.7 0.0 0.1 4.6 -0.5 3.3
from discontinued
operations
--------------------------------------------------------------------------------
RESULT FOR THE PERIOD -16.6 137.6 38.3 -9.4 18.5 97.5 -54.4 24.4
Result from continuing operations attributable to:
Equity holders of the -19.0 56.3 38.1 -10.8 18.4 92.9 -49.2 14.9
Parent Company
Non-controlling 1.2 2.7 0.9 1.4 0.0 -0.1 -4.6 6.2
interests
Result attributable to:
Equity holders of the -17.8 135.0 37.4 -10.8 18.5 97.5 -49.7 18.1
Parent Company
Non-controlling 1.2 2.6 0.9 1.4 0.0 -0.1 -4.6 6.2
interests
Earnings per share for result attributable
to the equity holders of the Parent company:
Earnings per share, -0.12 0.35 0.23 -0.07 0.11 0.57 -0.30 0.09
EUR, continuing
operations
Diluted earnings per -0.12 0.35 0.23 -0.07 0.11 0.57 -0.30 0.09
share, EUR,
continuing operations
Earnings per share, 0.01 0.48 0.00 0.00 0.00 0.03 0.00 0.02
EUR, discontinued
operations
Diluted earnings per 0.01 0.48 0.00 0.00 0.00 0.03 0.00 0.02
share, EUR,
discontinued
operations
Earnings per share, -0.11 0.83 0.23 -0.07 0.11 0.60 -0.31 0.11
EUR
Diluted earnings per -0.11 0.83 0.23 -0.07 0.11 0.60 -0.31 0.11
share, EUR
INCOME STATEMENT BY QUARTER
EUR million
1-12/ 1-12/
CONTINUING OPERATIONS 2012 2011
NET SALES 2,376.3 2,378.1
Other operating income 52.5 116.5
Materials and services 816.3 858.2
Employee benefit expenses 613.6 611.7
Other operating expenses 491.5 541.3
Share of results in associated companies -1.2
Depreciation, amortisation and impairment losses 325.2 309.5
---------------------------------------------------------
-----------------
OPERATING PROFIT 182.3 172.6
Share of results in associated companies -17.7 -3.7
Financial income 18.2 13.9
Financial expenses 75.6 46.6
---------------------------------------------------------
-----------------
RESULT BEFORE TAXES 107.3 136.3
Income taxes -36.4 -57.7
--------------------------------------------------------------------------
---------------------------------------------------------
RESULT FOR THE PERIOD FROM CONTINUING OPERATIONS 70.9 78.6
DISCONTINUED OPERATIONS
Result for the period from discontinued operations 79.0 7.4
--------------------------------------------------------------------------
RESULT FOR THE PERIOD 149.9 86.0
Result from continuing operations attributable to:
Equity holders of the Parent Company 64.7 77.0
Non-controlling interests 6.2 1.5
Result attributable to:
Equity holders of the Parent Company 143.7 84.5
Non-controlling interests 6.2 1.5
Earnings per share for result attributable
to the equity holders of the Parent company:
Earnings per share, EUR, continuing operations 0.40 0.47
Diluted earnings per share, EUR, continuing operations 0.40 0.47
Earnings per share, EUR, discontinued operations 0.49 0.05
Diluted earnings per share, EUR, discontinued operations 0.49 0.05
Earnings per share, EUR 0.88 0.52
Diluted earnings per share, EUR 0.88 0.52
CONSOLIDATED CASH FLOW STATEMENT 1-12/ 1-12/
EUR million 2012 2011
OPERATIONS
Result for the period 149.9 86.0
Adjustments
Income taxes 37.0 58.1
Financial expenses 75.6 49.1
Financial income -18.2 -13.9
Share of results in associated companies 17.7 4.9
Depreciation, amortisation and impairment losses 327.8 319.7
Gains/losses on sales of non-current assets -79.6 -56.8
Acquisitions of broadcasting rights and prepublication -207.4 -120.3
costs
Other adjustments -3.9 3.5
Change in working capital
Change in trade and other receivables -2.4 0.8
Change in inventories 5.4 0.4
Change in trade and other payables, and provisions -15.8 49.0
Interest paid -35.7 -23.6
Other financial items -9.2 -17.4
Taxes paid -49.3 -65.5
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATIONS 192.0 273.8
INVESTMENTS
Acquisition of tangible and intangible assets -63.5 -70.8
Operations acquired -25.7 -1,350.2
Sales of tangible and intangible assets 16.4 14.0
Operations sold 317.2 74.0
Loans granted -9.2 -8.7
Repayments of loan receivables 8.1 246.3
Sales of short-term investments 0.0 0.0
Interest received 3.7 3.2
Dividends received 5.5 14.9
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTMENTS 252.4 -1,077.4
CASH FLOW BEFORE FINANCING 444.4 -803.6
FINANCING
Proceeds from share subscriptions 0.0
Minority capital investment/repayment of equity 26.6 264.0
Change in loans with short maturity -32.3 -183.5
Drawings of other loans 1,103.0 1,042.7
Repayments of other loans -1,465.1 -84.5
Payment of finance lease liabilities -0.9 -2.0
Dividends paid -98.1 -179.7
Donations/other profit sharing 0.0
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING -466.9 857.1
CHANGE IN CASH AND CASH EQUIVALENTS
ACCORDING TO CASH FLOW STATEMENT -22.5 53.6
Effect of exchange rate differences on cash and cash 2.0 -1.1
equivalents
NET CHANGE IN CASH AND CASH EQUIVALENTS -20.4 52.4
Cash and cash equivalents at the beginning of the period 93.5 41.1
Cash and cash equivalents at the end of the period 73.1 93.5
Cash and cash equivalents in cash flow statement include cash and cash
equivalents less bank overdrafts.
NET SALES BY BUSINESS UNIT
EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
2012 2012 2012 2012 2011 2011 2011 2011
MEDIA
The Netherlands 171.6 208.1 173.5 207.2 105.3 130.6 174.0 232.2
Finland 77.4 76.7 65.4 82.2 74.2 79.4 70.0 86.2
Russia & CEE 49.0 50.1 46.9 53.5 51.4 54.3 50.8 56.7
Belgium 56.8 54.6 52.9 64.1 50.1 48.7 48.4 61.9
Other businesses and -0.7 -0.8 -0.6 -0.7 -0.9 -1.8 -0.9 -1.2
eliminations
--------------------------------------------------------------------------------
TOTAL 354.1 388.6 338.1 406.3 280.0 311.2 342.2 435.8
NEWS
Helsingin Sanomat 59.3 56.2 52.2 57.1 61.2 61.2 55.3 60.8
Ilta-Sanomat 21.2 22.0 20.0 21.1 19.1 22.2 21.6 21.6
Other publishing 25.2 24.3 22.3 24.6 23.7 25.0 22.9 25.4
Other businesses and 4.3 4.3 3.9 4.8 4.4 3.9 3.4 4.2
eliminations
--------------------------------------------------------------------------------
TOTAL 110.0 106.8 98.3 107.6 108.4 112.2 103.2 112.0
LEARNING
Learning 34.2 109.3 127.4 35.5 34.3 87.4 100.2 34.7
Other businesses 4.6 1.8 0.0 0.0 10.1 10.2 10.8 5.0
Eliminations -0.4 0.0 0.0 0.0 -0.4 -0.6 -0.6 -0.4
--------------------------------------------------------------------------------
TOTAL 38.4 111.1 127.4 35.5 44.0 97.0 110.4 39.2
Other companies and 41.1 40.0 35.6 37.3 97.8 72.1 71.6 40.9
eliminations
--------------------------------------------------------------------------------
CONTINUING OPERATIONS 543.6 646.5 599.5 586.7 530.2 592.6 627.4 627.9
NET SALES BY BUSINESS UNIT
EUR million 1-12/ 1-12/
2012 2011
MEDIA
The Netherlands 760.4 642.0
Finland 301.7 309.7
Russia & CEE 199.5 213.1
Belgium 228.3 209.1
Other businesses and eliminations -2.7 -4.8
---------------------------------------------------
TOTAL 1,487.1 1,369.2
NEWS
Helsingin Sanomat 224.9 238.5
Ilta-Sanomat 84.3 84.4
Other publishing 96.4 97.0
Other businesses and eliminations 17.2 15.9
---------------------------------------------------
TOTAL 422.8 435.8
LEARNING
Learning 306.4 256.6
Other businesses 6.5 36.1
Eliminations -0.5 -2.1
---------------------------------------------------
TOTAL 312.4 290.6
Other companies and eliminations 154.0 282.4
---------------------------------------------------
CONTINUING OPERATIONS 2,376.3 2,378.1
OPERATING PROFIT BY SEGMENT
EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
2012 2012 2012 2012 2011 2011 2011 2011
Media 26.9 51.9 20.3 30.9 22.8 46.6 -31.9 53.0
News 8.9 5.1 -1.5 8.0 12.9 9.9 12.5 4.9
Learning -14.9 51.1 45.1 -22.0 -5.1 29.4 42.6 -23.0
Other companies and -5.0 -9.6 -2.0 -10.9 -3.3 30.8 -40.4 11.0
eliminations
--------------------------------------------------------------------------------
CONTINUING OPERATIONS 15.9 98.5 61.8 6.0 27.2 116.7 -17.2 46.0
OPERATING PROFIT BY SEGMENT
EUR million 1-12/ 1-12/
2012 2011
Media 130.0 90.4
News 20.5 40.2
Learning 59.3 43.9
Other companies and eliminations -27.5 -1.9
----------------------------------------------
CONTINUING OPERATIONS 182.3 172.6
OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS BY SEGMENT
EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
2012 2012 2012 2012 2011 2011 2011 2011
Media 26.9 54.5 23.0 46.9 22.8 37.5 24.9 64.4
News 8.9 5.1 8.4 10.0 12.9 9.9 12.5 14.1
Learning -14.9 47.0 49.5 -22.0 -6.0 31.1 42.6 -20.0
Other companies and -5.0 -2.4 -0.7 -2.8 -3.3 -12.9 -2.4 -3.9
eliminations
--------------------------------------------------------------------------------
CONTINUING OPERATIONS 15.9 104.2 80.1 32.1 26.3 65.6 77.6 54.7
OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS BY SEGMENT
EUR million 1-12/ 1-12/
2012 2011
Media 151.2 149.5
News 32.4 49.4
Learning 59.6 47.7
Other companies and eliminations -10.9 -22.5
---------------------------------------------------------
CONTINUING OPERATIONS 232.3 224.1
SEGMENT INFORMATION
Sanoma renewed its operative reporting in the third quarter of 2012. The change
is in line with Sanoma's strategy to focus on consumer media and learning. As a
result, the Trade segment is no longer a reportable segment.
The Group includes three reportable segments: Media, News and Learning. The
segmentation is based on business model and product differences. Media,
operating in 11 countries, is responsible for magazines and TV operations.
Sanoma News is responsible for newspapers in Finland. Both segments also have a
great variety of online and mobile services. Learning's business is mainly B2B
business. In addition to the Group eliminations column,
unallocated/eliminations includes non-core operations, head office functions,
real estate companies as well as items not allocated to segments.
Segment assets do not include cash and cash equivalents, interest-bearing
receivables, tax receivables and deferred tax receivables. Transactions between
segments are based on market prices.
Sanoma segments 1.1-31.12.2012
Other
Companies Dis-
/
Lear- elimi- Continuin continue
g d
EUR million Media News ning nations operation operatio Total
s ns
--------------------------------------------------------------------------------
External net 1,484.3 422.1 311.6 157.7 2,375.8 116.4 2,492.2
sales
Internal net 2.8 0.7 0.8 -3.7 0.6 1.5
sales
NET SALES, TOTAL 1,487.1 422.8 312.4 154.0 2,376.3 117.9 2,492.2
OPERATING PROFIT 130.0 20.5 59.3 -27.5 182.3 79.7 262.0
Share of results in
associated -18.8 0.5 0.0 0.7 -17.7 -17.7
companies
Financial income 18.2 18.2 0.1 18.2
Financial expenses 75.6 75.6 0.1 75.6
RESULT BEFORE TAXES 107.3 79.7 186.9
SEGMENT ASSETS 2,819.0 297.0 504.8 179.5 3,800.3
Sanoma segments 1.1-31.12.2011
Other
Companies Dis-
/
Lear- elimi- Continuin continue
g d
EUR million Media News ning nations operation operatio Total
s ns
--------------------------------------------------------------------------------
External net 1,365.5 434.1 279.6 297.6 2,376.8 369.4 2,746.2
sales
Internal net 3.7 1.7 11.0 -15.2 1.2 5.9
sales
NET SALES, TOTAL 1,369.2 435.8 290.6 282.4 2,378.1 375.3 2,746.2
OPERATING PROFIT 90.4 40.2 43.9 -1.9 172.6 10.3 182.9
Share of results in
associated -2.5 0.6 0.4 -2.2 -3.7 -3.7
companies
Financial income 13.9 13.9 0.3 13.9
Financial expenses 46.6 46.6 2.8 49.1
RESULT BEFORE TAXES 136.3 7.8 144.1
SEGMENT ASSETS 3,026.1 320.7 494.4 311.3 4,152.5
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 31.12.2012 31.12.2011
Carrying amount at the beginning of the period 343.6 429.3
Increases 29.0 52.9
Acquisition of operations 2.3 7.0
Decreases -5.2 -2.2
Disposal of operations -45.0 -86.9
Depreciation for the period -40.7 -50.5
Impairment losses for the period -1.3 -3.9
Exchange rate differences and other changes 0.6 -2.1
----------------------------------------------------------------------
Carrying amount at the end of the period 283.4 343.6
The Group had no commitments for acquisition of tangible assets at the end of
the reporting period or in the comparative period.
Changes in property, plant and equipment include continued and discontinued
operations.
At the end of the reporting period, the commitments for acquisition of
intangible assets (film and TV broadcasting rights included) were EUR 273.9
million (2011: EUR 173.8 million).
EFFECT OF ACQUISITIONS ON THE CONSOLIDATED BALANCE SHEET
EUR million 1-12/ 1-12/
2012 2011
Acquisition costs 27.3 1,415.2
Fair value of acquired net assets 4.1 433.2
--------------------------------------------------------
Goodwill 23.2 982.0
CONTINGENT LIABILITIES
EUR million 31.12.2012 31.12.2011
Contingencies for own commitments
Mortgages 9.7 9.7
Pledges 2.4 2.5
Other items 45.8 0.3
TOTAL 57.9 12.5
Other contingencies
Operating lease liabilities 199.4 196.1
Royalties 17.5 19.8
Other items 46.0 51.3
TOTAL 262.9 267.2
---------------------------------------------------
TOTAL 320.8 279.7
DERIVATIVE INSTRUMENTS
EUR million
Fair values 31.12.2012 31.12.2011
Interest rate derivatives
Interest rate swaps -16.2 -11.5
Currency derivatives
Forward contracts -1.1 0.6
KEY EXCHANGE RATES
1-12/ 1-12/
Average rate 2012 2011
EUR/CZK (Czech Koruna) 25.19 24.64
EUR/HUF (Hungarian Forint) 290.24 280.46
EUR/PLN (Polish Zloty) 4.19 4.13
EUR/RUB (Russian Rouble) 40.24 41.02
EUR/SEK (Swedish Crown) 8.70 9.00
Closing rate 31.12.2012 31.12.2011
EUR/CZK (Czech Koruna) 25.15 25.79
EUR/HUF (Hungarian Forint) 292.30 314.58
EUR/PLN (Polish Zloty) 4.07 4.46
EUR/RUB (Russian Rouble) 40.33 41.77
EUR/SEK (Swedish Crown) 8.58 8.91
Press Conference
A press and analyst meeting will be held in English by President and CEO
Harri-Pekka Kaukonen and CFO Kim Ignatius on 7 February 2013 at 13:30 CET+1 at
Sanomatalo, Töölönlahdenkatu 2 (seventh floor), Helsinki. A webcast of the
event can be viewed at Sanoma.com either live or later on as on demand. If you
want to ask questions during the webcast, please join the conference call by
dialling +44 (0)20 7162 0125 (Europe) or +1 334 323 6203 (US) and quote the
conference code 928086.
Sanoma will publish its Interim Reports in 2013 on a quarterly basis:
- Interim Report January - March 2013 on 2 May, at approximately 11:00 CET+1
- Interim Report January - June 2013 on 1 August, at approximately 8:30 CET+1
- Interim Report January - September 2013 on 31 October, at approximately 8:30
CET+1
Additional information
Sanoma's Investor Relations, Martti Yrjö-Koskinen, tel. +358 40 684 4643 or
ir@sanoma.com
Sanoma.com
Sanoma inspires, informs and connects. Sanoma is a leading European group with
a focus on consumer media and learning. We bring information, experiences,
education and entertainment to millions of people every day. We employ over
10,000 professionals in some 20 countries. In 2012, the Group's net sales
totalled EUR 2.4 billion. Sanoma's shares are listed on the NASDAQ OMX
Helsinki.
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