Sanoma Corporation, Full-Year 2024 Result: Increased operational EBIT and strong free cash flow improvement

Sanoma Corporation, Stock Exchange Release, 11 February 2025 at 8:30 EET 

Sanoma Corporation, Full-Year 2024 Result: Increased operational EBIT and strong free cash flow improvement 

This release is a summary of Sanoma’s Full-Year 2024 Result. The complete report is attached to this release and is also available at www.sanoma.com/en/investors.

Q4 2024  

• The Group’s net sales amounted to EUR 241.5 million (2023: 253.4). Excluding the impact of the divestment of the exam preparation business Stark in January 2024, Learning's net sales were stable. In Media Finland, the net sales decrease was attributable to lower TV and print advertising sales and divestments, while subscription sales continued to grow. The Group’s organic net sales development was -2% (2023: -2%). 

• Operational EBIT excl. PPA was relatively stable in both businesses. The Group's operational EBIT excl. PPA amounted to EUR -27.3 million (2023: -27.0). 

• EBIT amounted to EUR -46.9 million (2023: -51.4) and items affecting comparability (IACs) to EUR -10.6 million (2023: -14.3). The IACs mainly consisted of restructuring expenses related to strategic development costs, incl. Program Solar. Purchase price allocation adjustments and amortisations (PPAs) amounted to EUR 9.0 million (2023: 10.1). 

• Operational EPS was stable at EUR -0.21 (2023: -0.22). 

• EPS was EUR -0.26 (2023: -0.29). 

•  On 31 October 2024, Sanoma announced that it will repurchase maximum 720,000 own shares (0.44% of the total number of shares) to be used as a part of its incentive programme.
  

FY 2024 

• The Group’s net sales amounted to EUR 1,344.8 million (2023: 1,392.9). In Learning, net sales were mainly impacted by the planned discontinuation of low-value distribution contracts in the Netherlands and Belgium and the divestment of the exam preparation business Stark. Lower sales in Spain were largely offset by growth in other learning content markets. In Media Finland, net sales declined slightly due to small divestments in the beginning of the year, while lower advertising sales were mostly offset by continued growth in subscription sales. The Group’s organic net sales development was -2% (2023: 2%), being -2% in Learning and -1% in Media Finland. 

• The Group’s operational EBIT excl. PPA improved to EUR 180.0 million (2023: 175.4). Earnings were relatively stable in Learning and grew in Media Finland driven by lower paper costs and continuing efficiency improvement. 

• EBIT improved to EUR 81.8 million (2023: 51.7). IACs amounted to EUR -61.5 million (2023: -82.3) and mainly consisted of costs related to Program Solar as well as impairments largely related to the planned discontinuation of low-value distribution contracts in the Netherlands and Belgium. PPAs amounted to EUR 36.7 million (2023: 41.3). 

• Operational EPS improved to EUR 0.46 (2023: 0.39). 

• EPS was EUR 0.19 (2023: -0.03). 

• Free cash flow improved significantly and amounted to EUR 145.3 million (2023: 105.1). The improvement was mainly driven by lower investments in prepublication assets, partially resulting from Program Solar, and TV programme rights as well as higher reported EBIT. 

• Net debt/Adj. EBITDA improved to 2.2 (2023: 2.8), being within the long-term target level of ‘below 3.0’. 

• The Board proposes a dividend of EUR 0.39 per share (2023: 0.37) for the year 2024, corresponding to 44% of the free cash flow. The dividend will be paid in [three equal instalments in May, September and November. 

• On 5 September 2024, Sanoma issued a EUR 150 million 3-year social bond. In accordance with Sanoma's Social Bond Framework, published on 2 September 2024, the funds will be used to finance or refinance expenditures aimed at improving access to essential education services. 

• On 28 August 2024, Sanoma announced that the Supreme Administrative Court has rejected Sanoma’s application for permission to appeal the administrative court’s decision regarding the value added tax (VAT) payment decision given by the Finnish Tax Adjustment Board related to the tax audits at Sanoma Media Finland Oy for the years 2015–2018. The decision had no impact on Sanoma’s financials or free cash flow, as the VAT claim has been paid in 2021 and booked in Sanoma’s result in Q2 2023. 

• On 17 April 2024, the Annual General Meeting decided that a dividend of EUR 0.37 per share (2023: 0.37) shall be paid for 2024 in three instalments. The first instalment of EUR 0.13 was paid on 26 April, the second instalment of EUR 0.13 on 24 September and the third instalment of EUR 0.11 on 12 November. 

• In January 2024, Sanoma announced two small divestments: Stark in Learning and Netwheels in Media Finland. 

Outlook for 2025 

In 2025, Sanoma expects that the Group’s reported net sales will be EUR 1.28?1.33 billion (2024: 1.34). The Group’s operational EBIT excl. PPA is expected to be EUR 170-190 million (2024: 180). 

The outlook is based on the following assumptions: 

• Demand for learning content will be relatively stable across the Group's main operating markets. 

•  The advertising market in Finland will be relatively stable.
  

President and CEO Rob Kolkman: 

”In 2024, we made good progress on our strategic focus areas of increasing the profitability of Learning and Media Finland and deleveraging the Group's balance sheet. We also continued building on the long-term strengths of both businesses. As a result, our operational EBIT excl. PPA increased and our free cash flow improved strongly – by EUR 40 million or 38% – from the previous year. 

During the year, we have strengthened our digital offering in both Learning and Media. Examples of this in Learning include successful launches of the new Sanoma platform in Italy, the eduVULCAN platform in Poland and the itslearning development project with several German states. Across Media Finland, we have renewed our way of working to be even more customer focused and to bring new digital propositions faster to the market. Examples of these include the launches of Ilta-Sanomat (IS) Extra, a subscription-based digital tabloid, and +Kaikki, a bundle subscription including all Media Finland's digital consumer products. 

We continued to move forward with our AI initiatives and launched new services empowered by generative AI, with a strong emphasis on its responsible use and human oversight. In Learning, we concluded multiple AI pilots across our markets, including AI driven survey tool and text-to-speech implementation in tests. The development of AI tools and services also progressed in journalism, driven, for example, by the HS-IS (Helsingin Sanomat - Ilta-Sanomat) AI Lab delivering services like news summaries and news bots. In audio, generative AI was used, for example, for weather reports and DJ slots. 

In Learning, net sales decreased driven by the planned discontinuation of low-value distribution contracts in the Netherlands and Belgium and the divestment of Stark. In the learning content business, growth in other learning content markets, in particular Poland and the Netherlands, more than offset the decline of net sales in Spain that resulted from the lower curriculum cycle. 

Program Solar is now materially complete, with more than 80% of the actions taken by the end of 2024 in line with our original plan. The first impacts of the program were already visible in our 2024 free cash flow through a lower cost base and lower investments. Supported by our increased scale and Program Solar, we are on track to reach Learning’s long-term profitability (operational EBIT margin excl. PPA) target of 23% by 2026. 

In Media Finland, both digital subscription and digital advertising sales continued to develop positively. Growth in digital subscriptions was driven by the SVOD service Ruutu+, where the subscription base reached its all-time-high. The digital news media subscriptions are developing favourably, driven especially by Helsingin Sanomat (HS). Digital advertising continued to grow despite the fact that the overall demand for advertising weakened slightly towards the end of the year. We are happy to see the results of the continued improvement in operational efficiency and lower paper costs in the increased profitability. 

The deleveraging of our balance sheet took a major step forward during the year. Our net debt and leverage improved year-on-year and Net debt / Adjusted EBITDA was well within the long-term target of < 3.0. We also refinanced a key part of our external loan portfolio by issuing a EUR 150 million 3-year Social Bond in September. 

The Board proposes a dividend of EUR 0.39 (2023: 0.37), corresponding to 44% of the 2024 free cash flow. This proposal reflects our ability to deliver increasing free cash flow and it balances the capital use between the dividend, which continues to be an important part of our equity story, and the continued deleveraging of the balance sheet. 

We have a unique sustainability profile as learning and media have a positive impact on the lives of millions of people every day. To support the purpose of our businesses, we have set ambitious targets for sustainability aspects in which we have the biggest impact and we performed well against these targets in 2024. The Employee Experience Index (EEI) was relatively stable at 7.4 (2023: 7.5), being close to our long-term target level. Sustainability targets related to data, privacy & AI, employee engagement and climate are also linked to the executive management’s short-term incentives. Our full sustainability performance will be included in the Sustainability Report, prepared for the first time according to European Sustainability Reporting Standards (ESRS) and to be published as part of the Report of the Board of Directors in week 14 (starting 31 March 2025). 

Our Outlook for 2025 indicates lower net sales and relatively stable operational EBIT excl. PPA compared to 2024. In Learning, we expect growth in most of our learning content businesses to more than offset the impact of the last year of the lower cycle in Spain, while the discontinuation of low-value contracts in the Dutch distribution business will continue. In Finland, we expect the advertising market to be relatively stable and modest growth in subscriptions to continue. 

Our focus remains on increasing our profitability and free cash flow, while the upcoming curriculum renewals in our major learning markets, particularly Poland and Spain, are expected to accelerate organic growth from 2026 onwards. In Media Finland, we are continuing and accelerating our successful digital transformation. We aim to also expand through value-creating M&A in K12 learning services, while being committed to meeting our leverage and equity ratio targets and paying an increasing dividend, equal to 40–60% of our annual free cash flow. 

I would like to extend my warmest thanks to all Sanoma employees for their excellent work in delivering these good results and for their strong commitment and passion in supporting our customers. We are in a great position to continue on our strategic path, to grow and further strengthen our business, improve our performance, and create value for all our stakeholders. I am looking forward to a successful 2025.”

Key indicators  

EUR million	Q4 2024	Q4 2023	Change	FY 2024	FY 2023	Change
Net sales	241.5	253.4	-5%	1,344.8	1,392.9	-3%
Operational EBITDA 1)	23.5	27.8	-16%	360.8	358.3	1%
Margin 1)	9.7%	11.0%		26.8%	25.7%
Operational EBIT excl. PPA 2)	-27.3	-27.0	-1%	180.0	175.4	3%
Margin 2)	-11.3%	-10.7%		13.4%	12.6%
EBIT	-46.9	-51.4	9%	81.8	51.7	58%
Result for the period	-40.3	-44.6	10%	40.6	4.1	900%
Free cash flow	68.6	70.5	-3%	145.3	105.1	38%
Equity ratio 3)				45.0%	42.5%
Net debt				568.5	639.7	-11%
Net debt / Adj. EBITDA				2.2	2.8	-21%
Operational EPS, EUR 1)	-0.21	-0.22	2%	0.46	0.39	18%
EPS, EUR	-0.26	-0.29	9%	0.19	-0.03	816%
Free cash flow per share, EUR	0.42	0.43	-3%	0.89	0.64	38%
Dividend per share 4)				0.39	0.37	5%
Average number of employees (FTE)				4,820	5,119	-6%
Number of employees at the end of the period (FTE)				4,648	5,017	-7%

1) Excluding IACs  
2) Excluding IACs and purchase price allocation adjustments and amortisations (PPAs) 
3) Advances received included in the formula of equity ratio were EUR 162.5 million in FY 2024 (2023: 153.8).
4) 2024 is a proposal of the Board of Directors to the AGM. 

Dividend proposal 

On 31 December 2024, Sanoma Corporation’s distributable funds were EUR 338 million, of which profit for the year made up EUR -1 million. Including the fund for non-restricted equity of EUR 210 million, the distributable funds amounted to EUR 548 million. The Board of Directors proposes to the Annual General Meeting that: 

• A dividend of EUR 0.39 per share shall be paid for the year 2024. The dividend shall be paid in three equal instalments. The first instalment of EUR 0.13 per share shall be paid to a shareholder who is registered in the shareholders’ register of the company maintained by Euroclear Finland Ltd on the dividend record date 2 May 2025. The payment date for this instalment is 9 May 2025. The record date for the second instalment of EUR 0.13 per share will be decided by the Board of Directors in September, and the estimated payment date will be in September 2025. The record date for the third instalment of EUR 0.13 per share will be decided by the Board of Directors in October, and the estimated payment date will be in November 2025. 

• The amount left in equity shall be EUR 484 million. 

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 the 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 Rob Kolkman and CFO Alex Green today at 11:00 EET at Sanomatalo, Flik Studio Eliel, 1st floor, Töölönlahdenkatu 2, Helsinki. 

The conference can be followed as a live webcast at https://sanoma.videosync.fi/q4-2024. 

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, the participant is required to register at https://palvelu.flik.fi/teleconference/?id=50051353. After the registration you will receive the phone number and conference ID to access the conference. If you wish to ask a question, please press *5 on your telephone keypad to enter the queue. 

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 
 
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 across Europe and employ close to 5,000 professionals. In 2024, our net sales amounted to approx. 1.3bn€ and our operational EBIT margin excl. PPA was 13.4%. Sanoma shares are listed on Nasdaq Helsinki. More information is available at sanoma.com.

Attachment

• Full-Year 2024 Result