In This Article:
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Operational EBIT: Improved for the first nine months, driven by Media Finland and learning.
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Free Cash Flow: Significant improvement for the first nine months, partly driven by Solar.
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Leverage: Improved to 2.4, below the long-term target of 3.0.
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Net Sales Outlook: Expected between EUR1.32 billion and EUR1.34 billion.
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Operational EBIT Outlook (excluding PPA): Expected between EUR170 million and EUR180 million.
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Net Sales Decline in Spain: EUR21 million for Q3, EUR18 million for the first nine months.
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Impact of Low-Value Distribution Contracts Discontinuation: EUR28 million impact for the first nine months.
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Impairment Charge: EUR27 million in Q3 related to distribution business in the Netherlands.
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Restructuring Costs in Spain: EUR12 million provision in Q3.
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Free Cash Flow Improvement: EUR77 million year-to-date.
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Net Debt: Reduced to EUR616 million.
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Equity Ratio: Close to 41%.
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Social Bond Issuance: EUR150 million issued in September.
Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sanoma Oyj (STU:SNQB) reported a solid third quarter with improved operational EBIT for the first nine months.
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Free cash flow has significantly improved, driven by operational efficiencies and the Solar program.
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The company has successfully deleveraged its balance sheet, reducing leverage to 2.4, below the long-term target of 3.0.
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Digital subscriptions and advertising sales in Media Finland have shown growth, offsetting declines in print.
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Sanoma Oyj (STU:SNQB) issued a EUR150 million social bond, marking a significant achievement in the Finnish market.
Negative Points
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Net sales in Spain declined due to the end of the curriculum cycle, impacting profitability.
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The discontinuation of low-value distribution contracts in the Netherlands and Belgium resulted in a EUR28 million impact.
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An impairment of EUR27 million was recorded due to the discontinuation of low-value contracts.
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The advertising market in Finland remains challenging, with no signs of improvement.
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The company faces uncertainties in the learning business, particularly with returns in Spain and Italy.
Q & A Highlights
Q: Regarding the distribution contract, was the EUR28 million impact for Q3 or for the whole year? A: That was the EUR28 million impact for Q3. Most of that business comes in during Q3, so it's similar to the full year.
Q: How much of a decline should we expect in low-value contracts for the next years? A: We expect some low-value contracts to stop, with a similar amount of decline in '25 as seen this year, maybe slightly lower. These contracts are around breakeven, so the impact is more on the top line than the bottom line.