Sanoma Corporation, Full-Year 2021 Result: Strong growth in net sales and operational EBIT in both businesses

Sanoma Corporation, Stock Exchange Release, 11 February 2022 at 8:30 EET Sanoma Corporation, Full-Year 2021 Result: Strong growth in net sales and operational EBIT in both businesses This release is a summary of Sanoma's Full-Year 2021 Result. The complete report is attached to this release and is also available atwww.sanoma.com/en/investors. Q4 2021  The Group's net sales grew to EUR 252 million (2020: 227) driven by the acquisition of Santillana as well as strong...

Helsinki, 11/02/2022 (informazione.news - comunicati stampa - editoria e media)

Sanoma Corporation, Stock Exchange Release, 11 February 2022 at 8:30 EET

Sanoma Corporation, Full-Year 2021 Result :  Strong growth in net sales and operational EBIT in both businesses

This release is a summary of Sanoma's Full-Year 2021 Result. The complete report is attached to this release and is also available at www.sanoma.com/en/investors.

Q 4  2021   

FY  2021  

Outlook for 2022

In 2022, Sanoma expects that the Group's reported net sales will be EUR 1.25‒1.30 billion (2021: 1.25). The Group's operational EBIT margin excl. PPA is expected to be between 15−16% (2021: 15.8%).

Regarding the operating environment Sanoma expects that:

President and CEO Susan Duinhoven:

”2021 was another successful year for Sanoma. The Group's net sales grew by 18%, operational EBIT excluding PPA even more strongly by 26% and free cash flow by 47%, or EUR 45 million. I am particularly encouraged by the strong organic growth of 7% in both Learning and Media Finland, which proves that our focus on the customers, the digitalisation of our offering and our increased scale are successful contributors to our organic growth and improved profitability. I would like to thank all our teams for the work well done under the challenging conditions that we have experienced during 2021. Having seen how agile and flexible our teams are, I am confident that we can again adapt and capture the positives of the 'better normal' in the times ahead.

In Learning, 2021 was a year of strong net sales and profitability growth, resulting both from the organic growth across the businesses and the acquisition of Santillana in Spain. The integration of Santillana has progressed according to our plan and its first year as a Sanoma company was successful. The Santillana team is well prepared for the educational reform in 2022−23, although its pace and phasing continue to be partially uncertain, as the local authorities in the Spanish provinces have not yet concluded their decision taking. In 2021, majority of the organic growth in Learning resulted from Poland, where it was the last implementation year of the latest curriculum renewal, and the Netherlands, where demand was amplified by higher public spending on education, increasing share of subscriptions as well as an increase in market share.

In Media Finland, organic growth was strong. It was driven by advertising rebound from the 2020 decline caused by the coronavirus pandemic as well as the reopened opportunity to organise some events during the summer. The number of subscriptions to both Helsingin Sanomat and Ruutu+ continued to grow, even though we saw signs of the strong corona-driven subscription growth normalising towards the end of the year. Digital advertising growth accelerated during the year, and we expect this to continue also in the coming year. We are quite pleased that our large, fast-growing digital advertising base was already offsetting the decline in print advertising, which all-in-all amounted to only approx. EUR 60 million of net sales. Strong net sales growth also supported earnings growth, and profitability improved slightly.

In 2022, we expect another strong year with the Group's reported net sales at EUR 1.25−1.30 billion (2021: 1.25) and operational EBIT margin excl. PPA 15−16% (2021: 15.8%). In Learning, we expect strong curriculum driven sales growth in Spain during 2022−2023. In Poland, we foresee after years of strong growth a significant market decline in 2022 ahead of the next curriculum renewal in 2023. In Media Finland the advertising sales are expected to show continued strength driven by digital, which is already exceeding the share of the declining print advertising. During the year, we will continue to develop our digital platforms and adapt our offices to the new ways of working both in Learning and Media Finland. We expect to see a temporary margin impact due to increasing paper and printing costs. We have a strong pipeline of acquisition opportunities that we continue to work on and develop further. Our long-term targets are unchanged: 2−5% organic growth in Learning and +/-2% in Media Finland, and above 23% operational EBIT margin excl. PPA in Learning and 12−14% in Media Finland.

In 2021 we clarified and communicated our Sustainability Strategy and have been very encouraged to see how strongly it resonates with our employees, customers, suppliers and investors. The more structured approach and improved transparency in our sustainability reporting increased our ESG ratings significantly and can attract new impact and ESG investors on both equity and debt sides. We are very pleased that the positive impact our learning and media businesses have on society is now more clearly reflected in our ESG ratings.

After a successful year 2021, the Board proposes an increased dividend of EUR 0.54 (2020: 0.52), corresponding to a yield of 4% and in line with our policy of paying a growing dividend. We are also in good positions and eager to continue to grow Sanoma further. Our focus will be in growing our K12 learning business both organically and through M&A, for which we have a solid balance sheet. In our Finnish media business, we will continue the successful digitalisation in our three strategic strongholds − news & feature, entertainment and B2B marketing solutions.''

Key indicators for continuing operations

Key indicators incl. continuing and discontinued operations

Excluding IACs
Excluding IACs and purchase price allocation adjustments and amortisations (PPAs)
In 2021, discontinued operations include certain Learning operations that are under strategic review. In 2020, discontinued operations also included Sanoma Media Netherlands. More information on discontinued operations' financial performance is available on p. 36–37 of the report.
Advances received included in the formula of equity ratio were EUR 155.2 million in 2021 (2020: 152.3).
2021 is a proposal of the Board of Directors.

Dividend proposal

On 31 December 2021, Sanoma Corporation's distributable funds were EUR 417 million, of which profit for the year made up EUR 191 million. Including the fund for non-restricted equity of EUR 210 million, the distributable funds amounted to EUR 627 million. The Board of Directors proposes to the Annual General Meeting that:

According to its dividend policy, Sanoma aims to pay an increasing dividend, equal to 40–60% of the annual free cash flow. When proposing a dividend to the AGM, the Board of Directors looks at the general macro-economic environment, Sanoma's current and target capital structure, Sanoma's future business plans and investment needs, as well as both previous year's cash flows and expected future cash flows affecting capital structure.

Analyst and investor conference

An analyst and investor conference will be held in English by the President and CEO Susan Duinhoven and CFO and COO Markus Holm the same day at 11:00 EET. The conference can be followed as a live webcast at https://sanoma.videosync.fi/2021-q4-results.

Management presentation is followed by a Q&A session. Questions can be placed through the webcast chat function or by phone. To ask questions by phone, please join in 5–10 minutes prior to the starting time by dialling one of the following numbers:

Finland: +358 9 8171 0310
Sweden: +46 8 5664 2651
United Kingdom: +44 33 3300 0804
United States: +1 631 913 1422

Confirmation code for the call is 17112235#.

An on-demand replay of the webcast will be available shortly after the conference at www.sanoma.com/en/investors.

Interview opportunities for media by Teams or by phone are available after the conference. Media representatives are asked to book interviews via Communications Director Marcus Wiklund, marcus.wiklund@sanoma.com.

Additional information

Kaisa Uurasmaa, Head of Investor Relations and Sustainability, tel. +358 40 560 5601

About Sanoma

Sanoma is an innovative and agile learning and media company impacting the lives of millions every day. Our Sustainability Strategy is designed to maximise our positive 'brainprint' on society and to minimise our environmental footprint. We are committed to the UN Sustainable Development Goals and signatory to the UN Global Compact.

Our learning products and services enable teachers to develop the talents of every child to reach their full potential. We offer printed and digital learning content as well as digital learning and teaching platforms for primary, secondary and vocational education, and want to grow our business.

Our Finnish media provide independent journalism and engaging entertainment also for generations to come. Our unique cross-media position offers the widest reach and tailored marketing solutions for our business partners.

Today, we operate in eleven European countries and employ more than 5,000 professionals. In 2021, our net sales amounted to approx. 1.25bn€ and our operational EBIT margin excl. PPA was 15.8%. Sanoma shares are listed on Nasdaq Helsinki. More information is available at sanoma.com.

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