Harri-Pekka Kaukonen President and CEO, Sanoma Annual General Meeting 9 April 2014
Market environment
“Thunderstorm” 1. Digital transformation 2. Weak macroeconomy
Photo: Rainer Knäpper, Free Art License (http://artlibre.org/licence/lal/en)
9 April 2014 Annual General Meeting 2014 3
6%
14%
42%
26%
12%
23%
10%
43%
22%
3%
64%
1%
24%
11%
1%
Print Radio TV Internet Mobile
Time spent (USA 2012) Advertising expenditure (USA 2012) % of Sanoma's net sales in 2013 (Finland and the Netherlands)
Consumer and advertiser behaviour is changing – and affecting us
9 April 2014 Annual General Meeting 2014 4
= =
=
People spend a daily
average of around 4.4 hours
of their free time at the
screen
Non-screen-based encounters Screen-based encounters
=
Source: IAB, eMarketer, Mary Meeker and Sanoma
-30
-20
-10
0
10
20
30
-30
-20
-10
0
10
20
30
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013
Advertising market Finland Advertising market Netherlands Consumer confidence Finland Consumer confidence Netherlands
Change in the market environment
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Source: European Commission (consumer confidence), TNS Gallup and Sanoma (advertising market)
Advertising market development
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Sources: Sanoma (Netherlands), TNS Gallup (Finland)
Finland FY/2010 FY/2011 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013
Newspapers +2 +3 -2 -13 -9 -13 -18 -17 -13 -15
Magazines -3 +2 -2 -6 -9 -14 -16 -15 -7 -10
TV +12 +7 +5 -4 -2 -3 -10 +3 +1 -1
Online +33 +25 +14 +1 +8 +14 +3 +6 +7 +6
Entire market +7 +7 +1 -8 -5 -7 -13 -8 -6 -7
Netherlands FY/2010 FY/2011 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013
Magazines +3 -4 -1 -11 -13 -14 -17 -16 -15 -18
TV +10 +4 -3 -5 -7 -7 -5 -4 -1 +3
Online +28 +9 +7 +7 -9 -2 -1 -2 -5 -5
Entire market +13 +5 -4 -5 -8 -6 -5 -4 -4 -2
Advertising market* Change (%), compared to the previous year
Strong measures
Net sales (EUR million) Personnel (FTE)
800
100
250
300 300
1 700
1 700
1 400
0
500
1 000
1 500
2 000
2 500
3 000
2010 The Group 2013 The Group 2013 Netherlands,Finland and Learning
Trade, other and eliminations Learning Media
1,700
2,100
2,800
6 300
900
1 700
1 600 1 600
7 400
6 600
4 900
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
2010 The Group 2013 The Group 2013 Netherlands,Finland and Learning
Trade, other and eliminations Learning Media
6,500
9,000
15,400
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8
Net sales
Operating profit before non-recurring items
Earnings/share before non-recurring items
Dividend/share
EUR
* The Board’s proposal to the AGM. The Board also proposes that it be authorised to decide on an extra
dividend of EUR 0.20 per share at the maximum.
2.4 billion
231 million
0.77
0.60
2012 2013
2.1 billion
155 million
0.54
0.10*
Annual General Meeting 2014 9 April 2014
Sanoma’s strategy
Market leader in consumer media and learning in our countries of operation
Our strategic aspiration
Our strategic goals
Profitability & balance sheet
Growth
Cost-saving programme and divestments
Healthy balance sheet
New organisation
Corporate culture
Renewal of products and services
Growth 2016
9 April 2014 Annual General Meeting 2014 10
Mission: Get the world – Sanoma helps people access and understand the world
Sanoma’s strategy
Organisation
Market leader in consumer media and learning in our countries of operation
Our strategic aspiration
Our strategic goals
Profitability & balance sheet
Growth Renewal of products and services
Growth 2016
9 April 2014 Annual General Meeting 2014 11
Mission: Get the world – Sanoma helps people access and understand the world
Sanoma’s strategy
Organisation
Focus areas: consumer media and learning
12
TV & radio
Magazines
Newspapers
Digital
Strategic business units
Are
as o
f consum
er m
edia
Learning Others
Media Russia & CEE
Other operations
Media Belgium
Media
Netherlands
Media
Finland
Net sales
EUR 420 million
Net sales in 2013
EUR 300 million
Digital/hybrid products
and services: 44% of
net sales
(EUR 130 million)
Operating profit before
non-recurring items: 18%
of net sales
Net sales in 2013
EUR 690 million
Digital media and new
services: 46% of
net sales
(EUR 320 million)
Operating profit before
non-recurring items: 11%
of net sales
Net sales in 2013
EUR 680 million
Digital media and new
services: 28% of
net sales
(EUR 190 million)
Operating profit before
non-recurring items: 5%
of net sales
Annual General Meeting 2014 9 April 2014
0 200 400 600 800
Otavamedia
Keskisuomalainen
TS-Yhtymä
Alma Media
MTV
Yle
Sanoma
0 200 400 600 800
STER
Audax
RTL NL
De Persgroep NL
Wegener
Telegraaf Media
Sanoma
Market leader in consumer media
Finland Netherlands
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#1 #1
#1 in consumer magazines
#1 in online advertising
#2 in commercial television
#1 in digital news services
#1 in newspapers
#1 in magazines
#1 in online advertising
#2 in commercial television
#1 in commercial radio
EUR million EUR million
The logic of consumer media
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1.
Reach
2.
Consumer
insight
3.
Marketing
solutions
15
2.2 million readers weekly in different
channels
Growth in digital subscriptions: 115% in
2013
Annual General Meeting 2014 9 April 2014
1. Increasing reach: examples
The largest radio channel in Finland
Weekly reach: more than 1.1 million,
growth 32%
The most popular magazine in Finland:
880,000 readers
Launched in the autumn of 2013, its digital
service has more than 20,000 subscribers
Nearly 8 million video starts monthly
Reach increased by more than 25% in 2013
3.0 million readers in different channels
Mobile reach increased by 153%
The largest news service in the
Netherlands
900 million page views monthly
A news service for women
Its reformed version multiplied the number of
monthly visitors to 2.2 million
A news service based on videos
152 million video starts in 2013, growth
40%
A leading television channel in the
Netherlands
Utopia, a new format, attracted an average
of 1.0 million viewers in 2014
Consumer experience
Targeted advertising
Digital content
2. Customer insight – Big Data offers new business opportunities
Consumer insight Targeted offering Effective
marketing
Behavioural
segmentation
Interesting target
groups
Mobile and location
targeting
Personalised
content
Digital product
development
Product
innovations
Examples:
Sanoma account: concerns
around 1 million Finns
Advertising campaigns targeted
based on age, gender and
interests
Startpagina Search: customised
content for consumers
16 Annual General Meeting 2014 9 April 2014
Sanoma is the media company with the widest reach in Finland
and the Netherlands, with target groups such as:
– Sports
– Science and technology
– Fitness and well-being
Customised marketing solutions
– The entire value chain, from offline and online advertising solutions to
the management of materials and printing services
– One-stop-shop principle
Continuous marketing programmes based on Sanoma’s Big Data
3. Marketing solutions
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Finland
Market position: #1
Net sales:
~ EUR 55 million
Sweden
Market position: #2
Net sales:
~ EUR 30 million
Netherlands
Market position: #2
Net sales:
~ EUR 95 million
Belgium
Market position: #1
Net sales:
~ EUR 35 million
Poland
Market position: #1
Net sales:
~ EUR 70 million
Global market
Market position: a
leading player in
online learning
Net sales:
~ EUR 10 million
Market leader in learning
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We create added value by being close to the learning process
Teachers need help
with reducing their workload
Learning
results
Management of data and reports
Personnel management
Financial management
Planning of the school
year
Management of operations
Identification of needs
Evaluation and selection
Monitoring
Evaluation of results
Practice
Coaching
Preparation
Testing and evaluation
Theory
Principals need
management tools
Parents want guidance for their children
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1,000,000
exercises were
completed on the
Bingel digital
service in a week
The number of
exercises
completed grew
tenfold during the
last 12 weeks of
2013
More than
1,000,000
students use
Malmberg’s
learning
application
More than 800 e-
textbooks were
published on the
YDP digital
bookshelf
The Sanoma Pro
working
environment
for teachers
reached a
penetration rate of
90%
Digitised learning: examples
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Market leader in consumer media and learning in our countries of operation
Our strategic aspiration
Our strategic goals
Profitability & balance sheet
Growth
Cost-saving programme and divestments
Healthy balance sheet
Renewal of products and services
Growth 2016
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Mission: Get the world – Sanoma helps people access and understand the world
Sanoma’s strategy
Organisation
A cost-saving programme of EUR 100 million
Measures include:
Sales – harmonisation
Magazines in Finland – 3T, Iiris and Kodinrakentaja
Helsingin Sanomat – further development of editorial
processes
IT – improvement of operational efficiency
Financial Shared Services Centre – adjustment to the
changing operating environment
Printing operations – capacity optimisation
Magazines in the Netherlands – portfolio optimisation
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Balance sheet tune-up Divested operations and properties
Other operations
Press distribution
Lehtipiste
Properties
Sale and leaseback
of Sanoma House
and Sanomala
Learning
materials
Hungary
Media operations
Bulgaria
Media operations
Romania
Media operations
Slovenia
Media operations
Serbia
Media
operations
Czech Republic
Divestments
total around EUR 300
million in cash
Market leader in consumer media and learning in our countries of operation
Our strategic aspiration
Our strategic goals
Profitability & balance sheet
Growth
Cost-saving programme and divestments
Healthy balance sheet
New organisation
Corporate culture
Renewal of products and services
Growth 2016
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Mission: Get the world – Sanoma helps people access and understand the world
Sanoma’s strategy
Organisation
Marketing
and
development
(1,400)
Technology
(800)
Creative content
(1,600)
Personnel number in parentheses
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Media company as a source of innovation
* Media Finland, Media Netherlands, Learning
Sanoma’s
core operations*
(6,600)
Sanoma Accelerator
Open Innovation Accelerator
Internal Ventures
Sanoma Ventures
New approaches to innovation
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External
Internal
Ide
as M
ark
et
Changes in management
27
TV & radio
Magazines
Newspapers
Digital
Strategic business units
Are
as o
f consum
er m
edia
Learning Others
Media Russia & CEE
Other operations
Media Belgium
Media
Netherlands
Media
Finland
Annual General Meeting 2014 9 April 2014
Pekka Soini Peter de Mönnink John Martin
Strategy implementation
Profitability & balance sheet
Growth
Cost-saving programme and divestments
Healthy balance sheet
New organisation
Corporate culture
Renewal of products and services
Growth 2016
9 April 2014 Annual General Meeting 2014 29
Strategy implementation at Sanoma
Organisation
Sanoma 2016
Smaller and more focused
Strong growth in digital
media and new services
Return to organic growth
Better profitability
Healthier balance sheet
9 April 2014 Annual General Meeting 2014 31
Thank you!