Sanoma’s 2016 Full-Year Result: Back on Track Faster than Expected
07-02-2017 09:07:00 | Door: Bas Vlugt | hits: 2876 | Tags:

Sanoma Corporation, Stock Exchanget Release, 7 February 2017 at 8:30 CET+1

Fourth quarter

  • Net sales amounted to EUR 398.1 million (2015: 409.3).
  • Adjusted for changes in the Group structure, Sanoma’s net sales were stable.
  • Operational EBIT increased to EUR 1.4 million (2015: -8.4).
  • Operating profit was EUR -23.2 million (2015: -131.3).
  • Earnings per share were EUR -0.20 (2015: -0.69).
  • Operational earnings per share were EUR -0.07 (2015: -0.09).
  • Cash flow from operations was EUR 105.8 million (2015: 68.7).
  • Items affecting comparability included in the operating profit amounted to EUR -24.6 million (2015: -122.9), mainly related to restructuring expenses and impairments. In the fourth quarter of 2015, the items were mainly related to impairment of goodwill and intangible assets, sales losses and restructuring expenses.

 

2016

  • Net sales amounted to EUR 1,639.1million (2015: 1,716.7).
  • Adjusted for changes in the Group structure, Sanoma’s net sales were stable (+0.1%).
  • Operational EBIT improved significantly, to EUR 167.9 million (2015: 83.7).
  • Operating profit increased to EUR 196.6 million (2015: -123.1)
  • Earnings per share were EUR 0.65 (2015: -0.91).
  • Operational earnings per share were EUR 0.51 (2015: 0.13).
  • Cash flow from operations was EUR 153.5 million (2015: 25.5).
  • Net debt/adj. EBITDA ratio was 3.2 times (2015: 5.1) after the redemption of the hybrid.
  • The Board of Directors proposes a dividend of EUR 0.20 per share (2015: 0.10).
  • Items affecting comparability included in the operating profit amounted to EUR 28.7 million (2015: -206.8), mainly related to settlement of the Dutch defined benefit pension plans, sales gains as well as restructuring expenses and impairments. In 2015, the items were mainly related to impairment of goodwill and intangible assets, sales losses and restructuring expenses.

 

Outlook

For 2017, Sanoma expects that the Group’s consolidated net sales adjusted for structural changes will be stable and the operational EBIT margin will be around 10%.

The outlook is based on the assumption of the advertising markets development in the Netherlands and Finland being in line with that of 2016.

 

Key indicators (based on reported figures, not adjusted for structural changes)

 

  10–12/ 10–12/ Change 1–12/ 1–12/ Change
EUR million 2016 2015 % 2016 2015 %
Net sales 398.1 409.3 -2.7 1,639.1 1,716.7 -4.5
Operational EBIT 1.4 -8.4   167.9 83.7  
  % of net sales 0.3 -2.1   10.2 4.9  
Operating profit -23.2 -131.3   196.6 -123.1  
Result for the period -32.1 -131.4   116.0 -157.7  
             
Cash flow from operations 105.8 68.7 54.1 153.5 25.5  
             
Capital expenditure * 12.2 11.5 5.5 34.8 54.7 -36.4
  % of net sales 3.1 2.8   2.1 3.2  
             
Return on equity (ROE), % **       10.9 -13.6  
Return on investment (ROI), % **       9.9 -5.3  
Equity ratio, %       41.0 39.5  
Net gearing, % 78.4 77.8  
       
Number of employees at the end of the period (FTE) 5,227 6,116 -14.5
Average number of employees (FTE)       5,384 6,776 -20.5
             
Earnings/share, EUR -0.20 -0.69   0.65 -0.91  
Cash flow from operations/share, EUR 0.65 0.42 54.2 0.95 0.16  
             
Equity/share, EUR       4.39 4.59 -4.2
Dividend/share, EUR ***       0.20 0.10  
Market capitalisation       1,338.4 633.7  

* Including finance leases.
** Rolling 12-month period.
*** Dividend for 2016 is a proposal by the Board of Directors.

Sanoma presents certain financial performance measures (alternative performance measures or APMs) on a non-IFRS basis. The APMs are provided to reflect the underlying business performance and to enhance comparability from period to period. APMs should not be considered as a substitute for measures of performance in accordance with IFRS. More information is available at Sanoma.com.

 

Organic Growth, %

   
10–12/2016 vs. 10–12/2015

1–12/2016 vs. 1–12/2015
1–12/2015 vs. 1–12/2014
Media BeNe   -2.2 0.5 -1.4
Media Finland   0.8 0.7 -4.1
Learning   15.9 -2.5 -4.0
Group   0.0 0.1 -3.4

 

Susan Duinhoven, President and CEO

Sanoma’s performance in the fourth quarter of the year was in line with the significant improvement in results seen in previous quarters. In 2016, our organic net sales were stable. The benefits from the cost innovation initiatives, started in the third quarter of 2015, came in faster than anticipated and our operational EBIT in 2016 doubled to EUR 167.9 million.

In Media BeNe, all businesses posted improved results in 2016 due to successful cost innovations. Most of the increase in profits came from the Dutch print and online brand portfolio. According to a recent study, Sanoma is the leading local online publisher and our Dutch news site NU.nl reaches 67% of the population monthly.

In 2016, Media Finland’s results improved very significantly driven by cost innovations. In addition, the good development of non-print sales contributed to increased profitability. Non-print sales amounted to 42% of net sales at the end of the year (2015: 38%). Nelonen’s share of TV viewing increased throughout the year and rose in the fourth quarter to 35.8% from 32.6% in the comparable period last year. Media Finland will be continuing with the implementation of the over 100 ‘Suunta’ revenue, cost and process improvement initiatives, and the profitability in 2017 is likely to be affected by related development costs.

Also Learning had a good year. Curriculum changes, successes of the digital learning platform Bingel, as well as the acquisition of De Boeck in Belgium contributed to 8% increase in sales in the Western European markets in 2016. In Poland, we were able to increase our market share, but the sharp market decline influenced Learning’s total net sales negatively. The improved market share makes Sanoma well positioned to invest in developing new methods to support the new educational reform beginning in 2017. Profitability in Learning improved significantly, driven by cost innovations in all businesses.

Our significantly improved cash flow has enabled us to deleverage our balance sheet during 2016 considerably. For 2016, the Board proposes a dividend of EUR 0.20 (2015: 0.10). Deleveraging continues to be important also in the coming years and we have reviewed our long-term financial targets to reflect this. Our new dividend policy, published today, will also be based on cash flow. From 2017 onwards, we aim to pay an increasing dividend, equal to 40–60% of annual cash flow from operations less capital expenditure. The improvements in cash flows and continued deleveraging will have a positive effect on our operational earnings per share going forward.

The faster than expected improvement in our results clearly shows the strength of Sanoma. The strong brands, the good market positions and the great teams working to serve our customers have been able to get the company back on track in 2016. We look forward to continue on our transformation path and further improve our processes and products in 2017.”

 

Full-Year Result 2016 webcast

The event for analysts and investors will be held today in English by President and CEO Susan Duinhoven and CFO Kim Ignatius at 11:00 Finnish time (9:00 UK time) at Sanomatalo, Töölönlahdenkatu 2, Helsinki. The live webcast can be viewed on Sanoma’s website at www.sanoma.com/en/investors and on demand after the event.

Please join by dialing

Finland: +358 (0)9 7479 0361 / US: +1 719 457 2086 / UK: +44 (0)330 336 9105 / Netherlands: +31 (0)20 721 9251

Conference id: 3062306

Financial reporting 2017

-  Interim Report January–March on 26 April 2017, approx. at 8:30

-  Half-Year Report (January–June) on 25 July 2017, approx. at 8:30

-  Interim Report January–September on 25 October 2017, approx. at 8:30.

 

Additional information

Sanoma's Investor Relations, Anna Tuominen, tel. +358 40 5846944

Sanoma.com

Sanoma

Sanoma is a front running media and learning company impacting the lives of millions every day. We provide consumers with engaging content, offer unique marketing solutions to business partners and enable teachers to excel at developing the talents of every child.

With companies operating in Finland, the Netherlands, Belgium, Poland and Sweden, our net sales totalled EUR 1.6 billion and we employed more than 5,000 professionals in 2016. The Sanoma shares are listed in Nasdaq Helsinki.

File: Sanoma_2016_Full Year Result.pdf


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