SanomaWSOY Corp. Stock Exchange Release 31 Oct 2007 at 8:30
SanomaWSOY Group's net sales increased by 6.3%, totalling EUR 2,126.7
(1,999.8) million. Operating profit was up to EUR 275.5 (218.5)
million. Operating profit included major non-recurring capital gains
of EUR 35.4 (4.3) million, most of which were accrued during the
second quarter. Sanoma Magazines, Sanoma, SWelcom and Rautakirja
improved their results. In the third quarter, Group net sales were
EUR 718.6 (688.2) million and operating profit rose to EUR 88.5
(80.1) million. Third quarter earnings per share were EUR 0.36
(0.36).
KEY INDICATORS 7-9/ 7-9/ Change 1-9/ 1-9/ Change 1-12/
EUR million 2007 2006 % 2007 2006 % 2006
Net sales 718.6 688.2 4.4 2,126.7 1,999.8 6.3 2,742.1
Operating profit 88.5 80.1 10.5 275.5 218.5 26.1 292.5
% of net sales 12.3 11.6 13.0 10.9 10.7
Operating profit 88.5 77.5 14.2 240.1 214.3 12.0 288.2
excluding major
non-recurring
capital gains
% of net sales 12.3 11.3 11.3 10.7 10.5
Balance sheet total 3,283.0 3,181.8 3.2 3,132.2
Capital expenditure 14.4 18.3 -21.4 57.6 51.4 12.2 81.9
% of net sales 2.0 2.7 2.7 2.6 3.0
Equity ratio, % 44.0 39.9 45.0
Gearing, % 65.0 79.6 59.2
Interest-bearing 968.6 1,066.9 -9.2 863.9liabilities
Net debt 879.8 947.5 -7.2 782.4
Personnel under 19,470 18,277 6.5 18,434
employment
contract, average
Personnel, average 16,603 15,565 6.7 15,732
(full-time
equivalents)
Earnings/share, EUR 0.36 0.36 1.0 1.16 0.96 20.6 1.32
Earnings/share, 0.36 0.35 1.9 1.15 0.94 21.6 1.31
diluted, EUR
Cash flow from 0.46 0.53 -13.4 0.71 0.78 -9.1 1.63
operations/share,
EUR
Equity/share, EUR * 8.11 7.33 10.6 7.92
Market 3,599.9 3,243.7 11.0 3,521.8
capitalisation
* Excluding minority interest
Hannu Syrjänen, President and CEO:"The first nine months of the year have gone well. We have been able
to successfully develop our operations in all divisions - net sales,
adjusted for changes in the Group structure, increased by 4% and
operating profit excluding major non-recurring capital gains improved
by 12%. Our markets developed positively. Advertising sales were
clearly up, with the most pronounced increases in the first half of
the year.
We have invested in growth in both print and digital media during the
year. Magazine launches were particularly focused on Russia and
Central Eastern Europe. We have also expanded our range of digital
services. In the third quarter, for instance, we launched the
consumer information portal Kirakat.hu in Hungary and the business
portal rb.ru in Russia. In addition to Central Eastern Europe and
Russia, there have also been new projects and acquisitions in the
Netherlands and Finland, where Sanoma Digital launched its first new
services in the summer and SWelcom expanded its business into online
casual gaming. At the beginning of the year we also launched a new
television channel and two new radio channels in Finland, and a
digital pay TV channel was launched in the autumn.
In April, educational publishing completed its summer 2006
acquisition by purchasing the remaining shareholdings in the
Hungarian Láng Group. Meanwhile, in July we acquired the Polish
educational publisher Nowa Era. The first R-kiosks opened their doors
in Moscow in June, and in August Rautakirja expanded its Russian
operations by buying the press distribution and retail companies
Press Point International and HDS CIS. We will continue to expand our
magazine, educational publishing and press distribution operations
internationally, develop especially our international digital
business and improve our efficiency.
Our diverse business portfolio balances the variations between
quarters. Although the uncertainty regarding the future has increased
from the first half of the year, the market situation would appear to
be continuing to be quite positive in most of the countries in which
we operate. I believe 2007 will be a good year for us."
Operating environment
In January-September 2007, media advertising developed positively in
most of SanomaWSOY's countries of operation. According to TNS Gallup
Adex, advertising in Finland grew by 6%. Advertising increased by 6%
in newspapers, but only slightly in free sheets. Job advertising
increased by 23%, while magazine advertising grew by 3% and
television advertising by 8%. ZenithOptimedia estimates that magazine
advertising sales in the Netherlands and Belgium will increase by 2%
in 2007, but decrease slightly in Hungary. In the Czech Republic, the
growth rate is expected to be 8%. Expenditure on print media
advertising in Russia is estimated to increase by 24%. Online
advertising is expected to grow considerably faster than other media
advertising in all of these countries.
According to the Finnish Grocery Trade Association, Finnish grocery
sales grew by 3% in January-September.
Net sales
In January-September, SanomaWSOY's net sales were up by 6.3%,
totalling EUR 2,126.7 (1,999.8) million. Net sales grew across all
divisions. Net sales adjusted for changes in the Group structure
increased by 4.2%.
Advertising sales accounted for 23% (22%) of the Group's total net
sales. In geographical terms, Finland accounted for 50% (51%) of net
sales with other EU countries accounting for 45% (45%) and other
countries for 5% (4%).
Result
The Group's operating profit grew to EUR 275.5 (218.5) million or
13.0% (10.9%) of net sales. Operating profit included major
non-recurring capital gains of EUR 35.4 (4.3) million, most of which
resulted from the divestments of puzzle magazines and a land area
during the second quarter. Excluding these gains, operating profit
was EUR 240.1 (214.3) million or 11.3% (10.7%). The result was
improved by the positive development of Sanoma Magazines, Sanoma and
SWelcom. In addition to the growth in sales, the increase in
operating profit was driven by moderate cost development and, for
example, the deferral of some marketing investments to the latter
part of the year.
SanomaWSOY's net financial items totalled EUR -25.4 (-19.8) million.
Financial income primarily consisted of interest income and amounted
to EUR 7.1 (7.7) million. Financial expenses amounted to EUR 32.5
(27.5) million. These primarily comprised interest costs of EUR 30.1
(25.0) million on interest-bearing liabilities. The general increase
in interest rates has increased the Group's interest expenses.
The result before taxes was EUR 256.6 (206.3) million and earnings
per share were EUR 1.16 (0.96).
Balance sheet and financial position
The consolidated balance sheet increased and, as of 30 September
2007, totalled EUR 3,283.0 (3,181.8) million. Cash flow from
operations was EUR 117.3 (123.8) million and cash flow per share was
EUR 0.71 (0.78). The development of cash flow from operations was
impacted by timing differences in working capital-related items, as
well as higher payments of taxes and interest expenses in comparison
to the comparable period. The increase in working capital also had an
effect.
SanomaWSOY's equity ratio improved to 44.0% (39.9%) at the end of
September, while gearing was reduced to 65.0% (79.6%). Equity
increased to EUR 1,353.6 (1,190.9) million. The conversion of stock
options and convertible capital notes into shares has served to
increase shareholders' equity and the equity ratio. Interest-bearing
liabilities decreased to EUR 968.6 (1,066.9) million and net debt to
EUR 879.8 (947.5) million. At the end of September the Group's cash
and cash equivalents totalled EUR 88.8 (119.4) million.
At the end of August SanomaWSOY replaced the existing short-term
bilateral loan agreements with a longer-term facility that can be
also flexibly utilised to finance possible acquisitions. The new loan
facility is a EUR 802 million syndicated five-year credit facility
with a group of 12 banks. If necessary, the facility may be renewed
for an additional two-year option period. The loan interest rate is
Euribor plus a variable margin dependent on the Company's financial
status. The initial margin is 0.175%.
Investments and acquisitions
In January-September, SanomaWSOY's investments in tangible and
intangible assets totalled EUR 57.6 (51.4) million. These investments
consisted of, e.g. ICT system acquisitions and replacement
investments. R&D expenditure was recorded at EUR 9.9 (8.9) million.
There were no major acquisitions during the period under review or
the comparable period.
Management
The Annual General Meeting of 4 April 2007 confirmed the number of
SanomaWSOY's Board members at ten and re-elected those who had
reached the end of their term of office. The Board of Directors of
SanomaWSOY consists of: Jaakko Rauramo, Chairman, Sari Baldauf, Vice
Chairman, and Robert Castrén, Jane Erkko, Paavo Hohti, Sirkka
Hämäläinen-Lindfors, Seppo Kievari, Robin Langenskiöld, Hannu
Syrjänen and Sakari Tamminen as members.
The Annual General Meeting re-appointed Pekka Pajamo, APA, and Sixten
Nyman, APA, as his deputy, and chartered accountants KPMG Oy Ab, with
Kai Salli, APA, acting as the Auditor in Charge, as the auditors of
the Company.
SanomaWSOY's management model was renewed. Since 5 April 2007 the
Executive Management Group consists of SanomaWSOY's President and CEO
Hannu Syrjänen, and the directors of each division: Eija Ailasmaa,
President and CEO of Sanoma Magazines; Mikael Pentikäinen, President
of Sanoma; Jacques Eijkens, CEO of SanomaWSOY Education; Tapio
Kallioja, President of SWelcom; and Erkki Järvinen, President and CEO
of Rautakirja. The authorisations and responsibilities of the
Executive Management Group remained unchanged.
In connection with this change in management model, SanomaWSOY's
Board of Directors appointed deputies for SanomaWSOY's senior
management: deputy to Hannu Syrjänen is Eija Ailasmaa; deputy to
Mikael Pentikäinen is Pekka Soini, President of Helsingin Sanomat;
deputy to Jacques Eijkens is Veli-Pekka Elonen, President of WSOY;
and deputy to Erkki Järvinen is Hellevi Kekäläinen, CFO of
Rautakirja. At the same time, SanomaWSOY established the Corporate
Centre to support the Group's divisions.
Board authorisations
The AGM of 4 April 2007 authorised the Board of SanomaWSOY to decide
on the purchase of the Company's shares and an increase in share
capital.
Under the authorisation, the Board may decide on the purchase of the
Company's shares with distributable profits until the AGM of 2008. A
maximum of 8,200,000 shares may be purchased. These shares will not
be purchased in relation to the share holdings of existing
shareholders. They will be purchased with the Company's unrestricted
equity at the market price of the purchasing moment; however, so that
the minimum purchase price of a share is the lowest market price in
public trading and the maximum purchase price is the highest price
noted in public trade during the authorisation period.
The AGM also authorised the Board to decide, until the AGM of 2010,
on the issue of new shares, the disposal of treasury shares and the
granting of special rights entitling to shares. The authorisation
does not exclude the right of the Board of Directors to decide on a
directed share issue. With this authorisation, and as a result of the
use of special rights, the Board is authorised to decide on the
issuance of a maximum of 82,000,000 new shares and the disposal of a
maximum of 5,000,000 treasury shares. In a directed share issue, a
maximum of 41,000,000 shares can be issued or disposed of. With this
authorisation, the Board is authorised to issue a maximum of
5,000,000 stock options as part of an incentive programme within the
Company.
On 2 August the Board decided to implement a share buyback programme
of Company shares starting on 10 August. The authorisation to
increase the share capital was not exercised during the review
period.
Shares and holdings
In January-September, trading with SanomaWSOY shares accounted for
41% of the average number of shares on issue during the period, or
about 68.3 million shares. SanomaWSOY's total stock exchange turnover
was EUR 1,525.2 (1,134.1) million.
At the end of the review period the Company's market capitalisation
of outstanding shares was EUR 3,599.9 (3,243.7) million. The closing
price for the period was EUR 21.81 (20.23) per share. The share price
averaged EUR 22.35 over the period with a low of EUR 20.56 and a high
of EUR 24.51. At the end of the period the Company had a total of
16,057 shareholders. Foreign holdings accounted for 13.2% (10.7%) of
the shares and votes.
Under the 2007 AGM authorisation, SanomaWSOY began repurchasing its
shares on 10 August. At the end of the review period the Company held
a total of 334,000 SanomaWSOY shares, representing 0.2% of the
Company's shares and votes. The total book-counter value of the
shares owned by the Company was EUR 143,620. The share buybacks have
continued after the review period, and by the end of October the
Company owned 537,000 shares, representing 0.3% of the shares and
votes.
There were no major changes in share ownership during the review
period and SanomaWSOY did not issue any flagging announcements. At
the end of September SanomaWSOY's registered share capital was EUR
71,118,685.56 and the number of shares was 165,392,292.
SanomaWSOY Corporation issued a convertible capital note on 31 August
2001 and trading with the notes began on the Main List of the
Helsinki Stock Exchange on 6 September 2001. The imputed conversion
price of a share was EUR 15.91 and the nominal value of each note was
EUR 10,000.
The conversion period of the notes ended on 20 June 2007. During the
conversion period, from 6 September 2001 to 20 June 2007, convertible
capital notes worth EUR 149,900,000 were converted into 9,421,615
SanomaWSOY shares. In addition, SanomaWSOY redeemed and invalidated
4,944 notes, worth EUR 49,440,000. The loan matured on 4 July 2007,
on which date the non-converted capital notes totalling EUR 660,000
were repaid.
Dividend
In accordance with the AGM's decision, SanomaWSOY paid out a
per-share dividend of EUR 0.95 (0.90) for 2006. The record date for
dividend payment was 11 April 2007 and the dividend payment date was
18 April 2007. SanomaWSOY conducts an active dividend policy and
primarily distributes over half of the Group result after taxes in
dividends.
Seasonal fluctuation
Developments in media advertising have an impact on the net sales and
results of Sanoma Magazines, Sanoma and SWelcom. Advertising sales
are influenced, for example, by the number of newspaper and magazine
issues published during each quarter, which varies yearly. Television
advertising in Finland is usually strongest in the second and fourth
quarters.
A major portion of the net sales and results in publishing and
retail, for example, is generated in the last quarter, particularly
from Christmas sales, while educational publishing accrues most of
its net sales and results during the second and third quarters.
Seasonal business fluctuations influence the Group's net sales and
operating profit, with the first quarter traditionally being the
smallest.
Outlook for 2007
In 2007 SanomaWSOY's net sales are projected to grow more than last
year. In 2006, net sales increased by 4.6%. Operating profit
excluding major non-recurring capital gains is expected to improve.
In 2006, operating profit excluding capital gains totalled EUR 288.2
million.
The forecast for the development of SanomaWSOY's net sales and
operating profit in 2007 is based on both organic growth and growth
based on minor acquisitions. SanomaWSOY will continue its strong
focus on investing in digital media and strengthening its market
positions during 2007. In addition to the Group's own business
activities and development projects, the growth of net sales and
operating profit are also affected by the overall economic
development, such as the growth of media advertising and private
consumption in the Group's operating countries. Short-term risks and
uncertainties are related to market development, especially the
growth rate of advertising and its distribution across different
media. Risks related to the industry and the Group's business, as
well as Group risk management, are described in more detail in
SanomaWSOY's Financial Statements 2006.
European economies are projected to grow in 2007, albeit at a slower
rate than in 2006. Research institutions predict that GDP will grow
by 2.4% in the Netherlands, 2.4% in Belgium and 4.2% in Finland. The
growth rate is expected to be 2.7% in Hungary, 5.2% in the Czech
Republic and 6.9% in Russia. In 2007, private consumption is
estimated to increase by 2.7% in Finland, 2.3% in the Netherlands,
2.6% in Belgium, 5.7% in the Czech Republic and 10.6% in Russia. In
Hungary, private consumption is expected to decrease by 0.7%.
Sanoma Magazines
Sanoma Magazines is one of Europe's largest consumer magazine
publishers, operating in 13 countries. In addition to publishing its
strong portfolio of magazine brands for various reader communities,
Sanoma Magazines is expanding its business to other media platforms,
with a strong focus on interactivity.
- Continuous investments in magazine launches and developing online
operations: 19 new magazine titles and several online services added
to the portfolio in January-September
- Strong growth in Russian magazine advertising continues
- Online advertising sales outperforming market growth; in total,
the Division's online advertising sales grew by 45%
- Divestment of puzzle magazines in the Netherlands
KEY INDICATORS 7-9/ 7-9/ Change 1-9/ 1-9/ Change 1-12/
EUR million 2007 2006 % 2007 2006 % 2006
Net sales 290.4 275.2 5.5 885.7 831.7 6.5 1,155.9
Operating profit 30.4 28.2 7.7 123.8 86.8 42.5 128.8
% of net sales 10.5 10.2 14.0 10.4 11.1
Operating profit 30.4 25.6 18.6 102.6 84.2 21.8 126.2
excluding major
non-recurring
capital gains
% of net sales 10.5 9.3 11.6 10.1 10.9
Balance sheet total 1,900.9 1,798.0 5.7 1,910.0
Capital expenditure 14.0 11.8 18.4 16.5
Personnel under 5,577 5,241 6.4 5,302
employment
contract, average
Personnel, average 5,127 4,781 7.3 4,848
(full-time
equivalents)
OPERATIONAL INDICATORS * 1-9/2007 1-9/2006
Number of magazines published 313 275
Magazine copies sold, thousands 320,645 329,422
Number of advertising pages sold 44,382 41,411
* Including joint ventures
Sanoma Magazines' net sales in January-September grew by 6.5%,
amounting to EUR 885.7 (831.7) million. All businesses increased
their net sales, mainly due to growth in advertising sales. Adjusted
for changes in the Group structure, the Division's net sales grew by
4.6%. Of the Division's net sales, 17% (17%) came from Finland. The
Dutch press distribution company Aldipress has been transferred to
Rautakirja as of 1 January 2007, and figures for the comparable year
have been adjusted accordingly.
The Division's advertising sales increased by 16% and represented 29%
(27%) of net sales. With all businesses developing favourably, most
advertising growth came from Sanoma Magazines International and
online advertising sales in the Netherlands.
Circulation sales grew by 3% and represented 57% (60%) of Sanoma
Magazines' net sales. The increase was partly the result of improved
single copy sales in Belgium and the growth of subscription sales in
Finland and Belgium.
Net sales in Sanoma Magazines Netherlands amounted to EUR 385.6
(382.8) million. Both print and online advertising sales increased.
In January-September, Sanoma Magazines Netherlands' online
advertising grew by 39%. Strong brands like Donald Duck, Libelle and
Margriet performed well on the readers market, but single copy sales
for most titles and total circulation sales decreased slightly.
Sanoma Magazines Netherlands continued to invest in online activities
by e.g. launching the user-generated content platform Maakjezo.nl in
September. Finance portal Belegger.nl, acquired in March, got a print
extension in the third quarter. Sanoma Uitgevers brought the glossy
fashion weekly Grazia to the Dutch market in September. The marketing
expenses of the new launch will incur mainly during the fourth
quarter.
After the review period Sanoma Magazines Netherlands announced that
it is possibly further focusing its operations by considering the
possibilities to sell its movie distribution company R.C.V.
Entertainment B.V., the largest independent distributor of films in
the Benelux countries.
Sanoma Magazines International's net sales grew to EUR 200.3 (175.7)
million. Growth mainly came from increased advertising sales in all
operating countries, excluding the Czech Republic. Most growth came
from magazine advertising sales in Russia and from Hungary, where
online advertising continues to develop positively. Circulation sales
increased slightly, but competition in the single copy market is
intense - e.g. in the Czech Republic and Hungary. Sanoma Magazines
International is actively developing its print and online portfolio:
in the third quarter, four new magazines were launched and several
online sites were launched or acquired. A total of 14 titles were
launched in January-September, among them Grazia, a new weekly glossy
for the Russian market together with Mondadori, and seven titles were
divested or discontinued.
Net sales in Sanoma Magazines Belgium grew to EUR 156.4 (136.7)
million, partly due to new niche publishing operations acquired in
September 2006 and increased circulation sales. Single copy sales
especially grew. In the comparable period, net sales were negatively
influenced by single copy distribution problems. Sanoma Magazines
Belgium's major magazine launch was Milo, a 40+ women's magazine in
January.
Sanoma Magazines Finland's net sales increased to EUR 146.8 (140.1)
million. Both advertising and circulation sales grew. Subscription
sales performed especially well, thanks to both established titles
and the success of recent launches like Sara. Sanoma Magazines
Finland's titles have succeeded in continuously increasing their
circulation, with family and parenting magazines showing the biggest
growth percentages.
In January-September, Sanoma Magazines' operating profit improved
significantly and amounted to EUR 123.8 (86.8) million. The result
included EUR 21.2 (2.6) million of major non-recurring capital gains
related to the sale of puzzle magazines and other titles. In the
comparable period, an adjustment of EUR 2.0 million related to the
acquisition in 2001 and the terms and conditions of the agreement
improved the result.
Sanoma Magazines Netherlands' operating profit improved
significantly, mainly due to sales gains. Moderate cost development
also improved the result. However, marketing expenses are estimated
to increase in the fourth quarter. Sanoma Magazines International's
results increased, given the strong sales development and the
different timing of marketing activities to that in the comparable
period, the emphasis this year being on the latter part of the year.
Sanoma Magazines Belgium's result improved markedly due to growth in
single copy sales and the niche publishing activities acquired in
September 2006. In the comparable period, single copy distribution
problems reduced the result. Sanoma Magazines Finland's operating
profit grew mainly due to sales growth and moderate cost development.
Sanoma Magazines is continuing to develop its magazine portfolio and
online businesses and invest in growth, which is expected to be most
rapid in Russia and the CEE countries.
Sanoma Magazines' net sales are estimated to grow in 2007. Despite
significant investments in marketing during the latter part of the
year, the operating profit excluding major non-recurring capital
gains is expected to improve clearly.
Sanoma
Sanoma is the leading newspaper publisher in Finland. In addition to
Helsingin Sanomat, the largest daily in the Nordic region, the
Division publishes national and regional daily newspapers, local
papers and free sheets, and offers digital services.
- The result continued to improve
- Advertising sales grew faster than the market with solid growth
also in the third quarter
- Online advertising sales developed strongly; Sanoma Digital
launched new consumer services
- In September, Iltasanomat.fi the largest online newspaper in
Finland
KEY INDICATORS 7-9/ 7-9/ Change 1-9/ 1-9/ Change 1-12/
EUR million 2007 2006 % 2007 2006 % 2006
Net sales 114.0 108.2 5.4 356.2 334.7 6.4 457.1
Operating profit 17.2 15.0 14.7 54.1 46.1 17.2 62.7
% of net sales 15.1 13.9 15.2 13.8 13.7
Operating profit 17.2 15.0 14.7 54.1 44.5 21.6 61.0
excluding major
non-recurring capital
gains
% of net sales 15.1 13.9 15.2 13.3 13.3
Balance sheet total 525.9 501.4 4.9 526.6
Capital expenditure 11.4 11.3 1.0 16.5
Personnel under 2,715 2,679 1.4 2,672
employment contract,
average
Personnel, average 2,422 2,392 1.3 2,378
(full-time equivalents)
OPERATIONAL INDICATORS
ADVERTISING VOLUME, COLUMN KM 1-9/2007 1-9/2006
Helsingin Sanomat 30.9 30.3
Ilta-Sanomat 5.4 5.1
Free sheets 27.7 24.0
Distribution, free sheets, million copies 78.6 70.8
AUDITED CIRCULATION 1-12/2006 1-12/2005
Helsingin Sanomat 426,117 430,785
Ilta-Sanomat 186,462 195,673
ONLINE SERVICES, UNIQUE VISITORS, WEEKLY 7-9/2007 7-9/2006
Iltasanomat.fi 943,675 659,852
HS.fi 700,994 471,167
Huuto.net 397,541 322,016
Oikotie.fi 302,355 251,449
Taloussanomat.fi 214,639 44,325
Keltainenpörssi.fi 145,396 91,861
Sanoma's net sales increased by 6.4% during January-September and
totalled EUR 356.2 (334.7) million. Net sales were particularly
strengthened by the significant increase in advertising sales over
the review period. Advertising sales were clearly up in nearly all
newspapers and online products. Net sales adjusted for changes in the
Group structure increased by 5.3%.
In January-September the Division reported a 10% overall improvement
in advertising sales, which accounted for 53% (51%) of net sales. In
the third quarter sales were up by 8%. Circulation sales increased by
2% and accounted for 40% (41%) of Sanoma's net sales.
Sanoma's reporting structure has been modified to better reflect the
focus of operations. The comparable figures for 2006 have been
adjusted accordingly. With effect from 2007, Sanoma's reporting
businesses include Helsingin Sanomat, Ilta-Sanomat, other publishing
and other operations, which include Sanoma's ICT and printing
operations.
The Helsingin Sanomat business unit increased its net sales to EUR
206.5 (195.9) million in January-September mainly due to the growth
in advertising revenues. Job advertising (+23%), real estate
advertising (+12%) and online advertising (+30%) showed the strongest
growth. The circulation sales of Helsingin Sanomat also increased.
Helsingin Sanomat continued to expand its online services by
launching a new kind of home auction service at Oikotie.fi in
September.
The Ilta-Sanomat business unit increased its net sales to EUR 71.2
(68.4) million. The unit's advertising sales were up clearly. In
January-September, Ilta-Sanomat commanded a 57.6% (59.1%) share of
the tabloid market. Ilta-Sanomat, which is celebrating its 75th
Anniversary, significantly increased its investments in its online
service after the summer. In September, Iltasanomat.fi became
Finland's largest newspaper-based online service with 1.1 million
unique visitors per week. The position of classified advertising is
being developed: in April, the company acquired a 20% share in
Auto24, the leading marketplace for used and new cars in Estonia, and
in September, the Huuto.net service launched a new pricing model and
a postal package service.
Net sales from other publishing increased to EUR 71.6 (62.8) million.
The growth in advertising sales was particularly strong in the Sanoma
Lehtimedia and Sanoma Kaupunkilehdet business units. The number of
free sheets increased from the comparable period with the acquisition
of the Finnish operations of the Metro free sheet in September 2006.
Taloussanomat redesigned the print magazine in August. The
Taloussanomat.fi online service continued to grow. Sanoma Digital, a
new company focusing on online business, was established on 1 January
2007 and is currently developing new online advertising products and
thematic services for, e.g., car, style and cooking enthusiasts
together with users.
Net sales from other operations, mainly comprising internal services,
were up to EUR 113.5 (108.8) million.
In January-September, Sanoma's operating profit increased clearly to
EUR 54.1 (46.1) million. The operating profit for the comparable
period included a total of EUR 1.7 million in major non-recurring
capital gains. Helsingin Sanomat increased its operating profit
clearly due to the growth of advertising sales. The improvement in
the earnings of Ilta-Sanomat was due to both increased advertising
and newsstand sales. Other publishing also improved its result
regardless of the investments in Sanoma Digital. Earnings from other
operations were up slightly.
Sanoma is seeking growth in, for example, new businesses. The
positive development of media advertising is expected to slow down
slightly during the rest of the year and the growth in newsstand
sales is expected to level off.
In 2007, Sanoma's net sales are estimated to increase and operating
profit excluding major non-recurring capital gains is expected to
improve.
SanomaWSOY Education and Books
SanomaWSOY Education and Books is a significant European educational
publisher with operations in the Netherlands, Finland, Hungary,
Belgium and Poland. The Division is also Finland's leading book
publisher and active in business information and services.
- Language services continued their expansion: The Works, Sweden,
acquired in July
- The acquisition of the Polish educational publisher Nowa Era
approved by the antitrust officials
KEY INDICATORS 7-9/ 7-9/ Change 1-9/ 1-9/ Change 1-12/
EUR million 2007 2006 % 2007 2006 % 2006
Net sales 97.0 103.3 -6.1 254.0 245.8 3.3 309.2
Operating profit 27.9 25.6 8.8 51.2 55.1 -7.1 48.0
% of net sales 28.8 24.8 20.1 22.4 15.5
Operating profit excluding 27.9 25.6 8.8 51.2 55.1 -7.1 48.0
major
non-recurring capital
gains
% of net sales 28.8 24.8 20.1 22.4 15.5
Balance sheet total 655.9 588.7 11.4 598.2
Capital expenditure 4.8 6.9 -30.6 8.9
Personnel under employment 2,754 2,353 17.0 2,455
contract, average
Personnel, average 2,328 2,033 14.5 2,106
(full-time equivalents)
OPERATIONAL INDICATORS 1-9/2007 1-9/2006
EDUCATIONAL
Number of new titles published, books 1,082 803
Number of new titles published, electronic products 293 142
PUBLISHING
Number of new titles published, books 430 436
Number of new titles published, electronic products 44 58
Number of copies sold, published books 21.0 21.4
In January-September, SanomaWSOY Education and Books' net sales
increased by 3.3% and totalled EUR 254.0 (245.8) million. Net sales
increased in educational publishing and in business information and
services. A total of 58% (59%) of the Division's net sales came from
outside Finland. Net sales adjusted for changes in the Group
structure decreased by 2.5%.
Educational publishing's net sales amounted to EUR 167.1 (162.3)
million. Net sales in the Netherlands were on the comparable period's
level. The diversification of educational publishing operations in
the Netherlands continued with the acquisition of the educational
consultancy company TSM consultants in June. In Belgium, the net
sales increased clearly and Van In has gained additional market
share. Educational sales in Finland were slightly behind the
comparable period. The Hungarian educational publisher Láng became
part of SanomaWSOY Education in June 2006 and, as a result,
contributed to increased sales in the educational publishing
business. Net sales in Poland were below the comparable period. A
large proportion of Young Digital Planet's sales comes from tenders
and other major projects. The timing of these projects, as well as
their effect on the result, varies considerably between years.
The Polish educational publisher Nowa Era and its subsidiaries were
acquired in June and the necessary antitrust approvals were received
at the end of October. The closing of the deal is expected at the
beginning of 2008.
Net sales in publishing totalled EUR 67.7 (65.3) million in
January-September. Net sales of general literature was behind those
of the comparable period. The growth in publishing came from business
information and services, where customised learning products and
language services performed especially well. The language service
provider AAC Global, acquired in February 2006, expanded its
operations in March 2007 with the acquisition of Translation Services
Noodi in Finland and the Sweden-based language service company The
Works, Sweden, in June 2007. Docendo Sverige AB, focusing on ICT
publishing, was divested in August.
Net sales from other operations, mainly printing, totalled EUR 37.1
(31.3) million.
In January-September, operating profit in SanomaWSOY Education and
Books was EUR 51.2 (55.1) million. There were no major non-recurring
capital gains during the review period or the comparable period.
Operating profit in educational publishing decreased due to timing
differences and a different composition of, especially, Polish sales
than in the comparable period. Operating profit in publishing was at
the previous year's level. Operating profit in other operations
decreased.
SanomaWSOY Education and Books is continuing to develop its three
main businesses with the focus on internationalising educational
publishing, maintaining Finnish market leadership in general
literature publishing and expanding business information and
services, especially in the language services market.
In 2007, net sales of SanomaWSOY Education and Books are estimated to
increase. Operating profit excluding major non-recurring capital
gains is expected to be at the previous year's level.
SWelcom
The commercial TV channel Nelonen, part of the electronic media
division SWelcom, is Finland's third largest medium in terms of
advertising sales, while Welho is the country's largest cable
television company and a major provider of broadband services.
- The pay TV movie and series channel KinoTV was launched
- SWelcom expanded its business into online casual gaming and
acquired Alypaa.com, the biggest online quiz portal in Finland
- Welho revised its pay TV offering
KEY INDICATORS 7-9/ 7-9/ Change 1-9/ 1-9/ Change 1-12/
EUR million 2007 2006 % 2007 2006 % 2006
Net sales 32.8 27.2 20.7 103.4 94.6 9.3 131.8
Operating profit 3.5 0.4 683.8 10.4 7.7 35.6 12.5
% of net sales 10.7 1.7 10.1 8.1 9.5
Operating profit excluding 3.5 0.4 683.8 10.4 7.7 35.6 12.5
major
non-recurring capital gains
% of net sales 10.7 1.7 10.1 8.1 9.5
Balance sheet total 171.9 145.5 18.2 158.6
Capital expenditure 10.0 7.9 26.3 15.2
Personnel under employment 488 439 11.1 437
contract, average
Personnel, average 448 400 12.2 398
(full-time equivalents)
OPERATIONAL INDICATORS 1-9/2007 1-9/2006
TV channels' share of Finnish TV advertising 29.4% 31.7%
TV channels' daily reach 43% 41%
TV channels' national commercial viewing share 25.5% 25.7%
TV channels' national viewing share 11.8% 12.2%
Number of connected households, thousands (30.9) 318 301
Number of pay TV subscriptions, thousands (30.9) 81 49
Number of broadband internet connections, thousands 97 82
(30.9)
In January-September, SWelcom's net sales increased by 9.3% and
totalled EUR 103.4 (94.6) million. This increase was primarily due to
the growth of Welho. Net sales adjusted for changes in the Group
structure increased by 10.2%. Advertising sales represented 53% (57%)
of SWelcom's net sales.
Largely due to the new channels, broadcast operations increased its
net sales to EUR 56.7 (53.6) million. The television channels'
combined share of all TV advertising declined to 29.4% (31.7%).
Nelonen's viewing shares declined due to the fragmentation of viewing
across an increasing number of channels. Nelonen's viewing shares are
expected to increase as a result of programme investments in the
autumn. JIM, the new television channel launched in February, has
increased its viewing share during the year.
At the end of September Nelonen launched its "Hot from the US" Video
on Demand (VOD) service that allows viewers to watch episodes of
popular television series' with subtitles on Web TV just a few days
after their original broadcast in the United States. September also
saw the launch of the national pay TV channel KinoTV. KinoTV is
available in both cable and non-cable homes, and its programming
consists of movies and series. SWelcom currently operates five TV
channels, two of which are pay channels.
Radio Aalto, launched at the beginning of 2007, has doubled its
listening audience since its first few months of operation. In July,
the radio station reached 460,000 listeners each week. Radio Aalto
has increased its listening share, particularly among female
listeners over 25 years of age. Radio Rock also reaches its target
group, 20-44 year old males, extremely well.
Welho's net sales increased strongly as a result of the rapid growth
in pay TV, broadband subscriptions and the sale of digital set-top
boxes. Welho revised its pay TV offering with new channel packages
that can be augmented with individual channels. Welho also offers
four high definition (HDTV) channels.
In January-September, SWelcom's operating profit increased to EUR
10.4 (7.7) million. The increase in operating profit was primarily
driven by the positive development of Welho, but also by the improved
profitability of the Division's television operations.
SWelcom expanded its operations into online casual gaming. August saw
the launch of the Pelikone.fi online game portal, where users can
play games for free and also publish their own games. In September,
SWelcom acquired Alypaa.com, the biggest online quiz portal in
Finland. SWelcom is continuing the development of its digital content
and media solutions business, as well as its online community
services.
SWelcom's net sales are estimated to increase clearly in 2007.
Operating profit excluding major non-recurring capital gains is also
projected to improve clearly despite substantial development
investments.
Rautakirja
Rautakirja is the market leader in kiosk operations, press
distribution and movie theatres in Finland and the Baltic countries,
and press distribution in Romania. Additionally, it leads the Finnish
and Estonian markets for bookstores and, from the beginning of 2007,
also the Dutch market for press distribution. Its press distribution
business and kiosk operations have also expanded into the Russian
market.
- Net sales grew across all businesses
- Kiosk operations and press distribution expanded in Russia
- After the review period, Rautakirja sold its multipurpose arena in
Hamburg
KEY INDICATORS 7-9/ 7-9/ Change 1-9/ 1-9/ Change 1-12/
EUR million 2007 2006 % 2007 2006 % 2006
Net sales 214.5 199.6 7.5 608.2 567.0 7.3 799.9
Operating profit 13.0 13.7 -5.7 32.5 32.2 0.8 54.7
% of net sales 6.0 6.9 5.3 5.7 6.8
Operating profit 13.0 13.7 -5.7 32.5 32.2 0.8 54.7
excluding major
non-recurring capital
gains
% of net sales 6.0 6.9 5.3 5.7 6.8
Balance sheet total 540.4 535.2 1.0 586.9
Capital expenditure 16.3 12.5 30.7 23.1
Personnel under 7,847 7,492 4.7 7,496
employment contract,
average
Personnel, average 6,193 5,888 5.2 5,932
(full-time equivalents)
OPERATIONAL INDICATORS 1-9/2007 1-9/2006
Customer volume in kiosk operations, thousands 156,481 155,517
Customer volume in bookstores, thousands 4,988 4,789
Customer volume in movie theatres, thousands 7,120 5,746
Number of copies sold (press distribution), 289,609 281,634
thousands
In January-September, Rautakirja's net sales grew by 7.3%, totalling
EUR 608.2 (567.0) million. Net sales increased across all businesses.
Growth was particularly strong in kiosk operations, entertainment
business and press distribution, where growth was fuelled by the
February acquisition of the point-of-sale (POS) marketing company
Printcenter. Net sales adjusted for changes in the Group structure
increased by 5.5%. Of Rautakirja's net sales, 34% (33%) came from
outside Finland. The Dutch press distribution company Aldipress was
combined with Rautakirja on 1 January 2007. The comparable figures
have been adjusted to reflect the inclusion of Aldipress.
Net sales from kiosk operations increased in all countries of
operation, rising to EUR 281.7 (268.1) million. Net sales for the
comparable period include the net sales of the Pizza Hut restaurant
chain, which was divested in June 2006. In Finnish R-kiosks,
traditional kiosk products, mobile communications and travel tickets
generated the most positive results. R-kiosks continued to launch new
service products.
In March, Rautakirja expanded its kiosk operations to Russia. The
first R-kiosks in Moscow opened their doors in June. In August,
Rautakirja acquired the press distributor Press Point International
and the kiosk operator HDS CIS from Lagardère Services. The combined
net sales of the two companies are about EUR 5 million and they have
some 180 employees. Antitrust officials approved the deal in August
and the businesses were consolidated in Rautakirja's kiosk operations
and press distribution in October. As a result of the deal,
Rautakirja acquired 25 store locations, most of which are in Moscow,
and the rest in St. Petersburg, Kazan, Yekaterinburg and Nizhny
Novgorod. These stores will be converted into R-kiosks.
In January-September, the net sales of press distribution rose to EUR
178.9 (164.8) million. Net sales increased in all countries of
operation with the exception of the Netherlands. The growth was
particularly strong in the Baltic countries and Romania. In Finland,
press distribution sales were bolstered by the February acquisition
of the point-of-sale (POS) marketing company Printcenter and the
weekday cover price increase by quality tabloids. The Dutch newsstand
market has been challenging for quite some time, and the distribution
volumes of Aldipress decreased somewhat from the comparable period.
In September a decision was made to begin an efficiency improvement
programme at Aldipress, and as a result, the company's workforce will
be reduced by about one-third in 2008.
The net sales of bookstores were EUR 90.4 (89.9) million. Finnish
in-store sales did well. In the third quarter sales were particularly
boosted by the release of the latest Harry Potter book. The net sales
of the comparable period included the library business divested in
the autumn of 2006. Net sales were also up in Estonia, partly due to
the May opening of a new store in Pärnu.
Net sales from the entertainment business increased in all countries
of operation, rising to EUR 69.4 (53.7) million. Driven by summer
blockbusters, movie theatres in Finland and the Baltic countries
broke all-time box office records in July. Movie theatre audiences
increased clearly during the review period in all markets. In
addition to the good selection of movies, the growth has been
particularly boosted by new operations: Finnish operations were
expanded through acquisitions and by the opening of additional new
multiplexes during the second half of 2006, and another new multiplex
was opened in Kaunas, Lithuania, this April.
After the review period, Rautakirja sold D+J Arena Hamburg GmbH, the
company responsible for the multipurpose arena in Hamburg. The net
sales of the company were EUR 12.7 million in 2006. The gain on the
sale of asset will amount to some EUR 2 million.
Rautakirja's operating profit was EUR 32.5 (32.2) million. The
entertainment business improved its performance clearly, particularly
in the second and third quarters. Operating profit from kiosk
operations increased slightly. The result of press distribution was
below the comparable period last year, mainly reflecting
non-recurring costs incurred in connection with the rationalisation
of Aldipress operations. Bookstores' operating profit was down due
to, e.g., a decline in subscription sales in the first half of the
year.
In addition to the home markets of Finland and the Baltic countries,
Rautakirja's expansion and development efforts will also focus on the
emerging economies of Russia and Central Eastern Europe.
In 2007, Rautakirja's net sales are expected to grow and operating
profit excluding major non-recurring capital gains is expected to be
at the previous year's level.
This Interim Report is unaudited. Definitions of key indicators are
presented in SanomaWSOY's Financial Statements 2006.
CONSOLIDATED FINANCIAL STATEMENTS (NON-AUDITED)
CONSOLIDATED INCOME STATEMENT
EUR million 1-9/2007 1-9/2006 Change,% 1-12/2006
NET SALES 2,126.7 1,999.8 6.3 2,742.1
Other operating income 74.6 42.0 77.8 57.2
Materials and services 945.3 909.5 3.9 1,243.3
Personnel expenses 472.3 436.4 8.2 595.5
Other operating expenses 399.2 378.9 5.3 532.2
Depreciation and impairment 109.0 98.5 10.7 135.8
losses
OPERATING PROFIT 275.5 218.5 26.1 292.5
Share of result of associated 6.5 7.5 -13.8 8.4
companies
Financial items -25.4 -19.8 28.2 -24.5
RESULT BEFORE TAXES 256.6 206.3 24.4 276.3
Income taxes -64.6 -55.9 15.6 -68.0
RESULT FOR THE PERIOD 192.0 150.4 27.7 208.4
Attributable to:
Equity holders of the Parent 191.0 151.9 25.8 209.5
Company
Minority interest 0.9 -1.5 -1.1
Earnings per share for result
attributable
to the equity holders of the Parent
Company:
Earnings per share, EUR 1.16 0.96 20.6 1.32
Diluted earnings per share, EUR 1.15 0.94 21.6 1.31
CONSOLIDATED BALANCE SHEET
EUR million 30.9.2007 30.9.2006 Change,% 31.12.2006
ASSETS
NON-CURRENT ASSETS
Tangible assets 560.6 558.9 0.3 572.3
Investment property 9.5 10.6 -9.9 10.0
Goodwill 1,418.5 1,376.1 3.1 1,392.7
Other intangible assets 375.4 357.9 4.9 368.1
Interest in associated 72.2 67.9 6.3 68.2
companies
Available-for-sale 15.8 16.2 -2.7 16.4
financial assets
Deferred tax receivables 55.9 56.5 -1.1 45.2
Trade and other receivables 44.7 37.6 18.9 38.4
NON-CURRENT ASSETS, TOTAL 2,552.6 2,481.6 2.9 2,511.3
CURRENT ASSETS
Inventories 168.5 148.2 13.7 150.1
Receivables 473.0 432.6 9.3 389.3
Available-for-sale 0.1 0.0 272.9 0.0
financial assets
Cash and cash equivalents 88.8 119.4 -25.6 81.5
CURRENT ASSETS, TOTAL 730.4 700.2 4.3 620.9
ASSETS, TOTAL 3,283.0 3,181.8 3.2 3,132.2
EQUITY AND LIABILITIES
EQUITY
Equity attributable to the equity holders of the
Parent Company
Share capital 71.1 69.1 2.9 70.9
Treasury shares -7.2
Other equity 1,274.2 1,105.7 15.2 1,234.8
1,338.1 1,174.9 13.9 1,305.7
Minority interest 15.5 16.0 -3.2 17.0
EQUITY, TOTAL 1,353.6 1,190.9 13.7 1,322.7
NON-CURRENT LIABILITIES
Deferred tax liabilities 106.3 94.9 12.1 96.2
Pension obligations 53.8 63.4 -15.1 57.6
Provisions 8.5 11.6 -27.1 7.8
Interest-bearing 41.1 43.3 -5.0 44.2
liabilities
Other liabilities 36.0 31.1 15.9 36.0
CURRENT LIABILITIES
Provisions 9.6 9.5 0.6 7.9
Interest-bearing 927.5 1,023.6 -9.4 819.7
liabilities
Other liabilities 746.7 713.5 4.6 740.1
LIABILITIES, TOTAL 1,929.4 1,990.9 -3.1 1,809.5
EQUITY AND LIABILITIES, 3,283.0 3,181.8 3.2 3,132.2
TOTAL
CHANGES IN CONSOLIDATED EQUITY
EUR million Equity attributable to the equity holders of the
Parent Company
Share Treasury Other Minority Equity,
capital shares equity interest total
EQUITY AT DEC. 31, 67.5 1,074.0 16.3 1,157.7
2005
Change in -4.7 -0.2 -4.9
translation
differences
Other items 0.0 -0.7 -0.7
Items recognised 0.0 -5.4 -0.2 -5.6
directly in equity,
total
Profit for the 151.9 -1.5 150.4
period
TOTAL RECOGNISED 0.0 146.5 -1.7 144.8
INCOME AND EXPENSES
Directed issue of 1.0 1.0
shares
Conversion of 0.6 21.2 0.0 21.8
capital notes
Usage of share 0.1 1.4 0.0 1.5
options
Expense recognition 0.0 4.1 0.0 4.1
of granted options
Dividends paid -141.3 -1.4 -142.7
Change in minority 2.8 2.8
interests
EQUITY AT SEPTEMBER 69.1 1,105.7 16.0 1,190.9
30, 2006
EQUITY AT JAN. 1, 70.9 1,234.8 17.0 1,322.7
2007
Change in -2.4 0.1 -2.3
translation
differences
Other items 0.0 -0.8 -0.8
Items recognised 0.0 -3.2 0.1 -3.1
directly in equity,
total
Profit for the 191.0 0.9 192.0
period
TOTAL RECOGNISED 0.0 187.8 1.0 188.8
INCOME AND EXPENSES
Conversion of 0.0 1.7 0.0 1.7
capital notes
Purchase of treasury -7.2 -7.2
shares
Usage of share 0.1 2.4 0.0 2.6
options
Expense recognition 0.0 4.2 0.0 4.2
of granted options
Dividends paid -156.7 -2.3 -159.0
Change in minority -0.2 -0.2
interests
EQUITY AT SEPTEMBER 71.1 -7.2 1,274.2 15.5 1,353.6
30, 2007
CONSOLIDATED CASH FLOW STATEMENT
EUR million 1-9/2007 1-9/2006 Change,% 1-12/2006
OPERATIONS
Result for the period 192.0 150.4 27.7 208.4
Adjustments 124.7 122.6 1.7 158.1
Change in working capital -98.8 -56.2 75.7 4.9
Financial items and taxes -100.6 -93.0 8.2 -111.5
CASH FLOW FROM OPERATIONS 117.3 123.8 -5.2 259.9
INVESTMENTS
Acquisition of tangible and -57.6 -57.7 -0.3 -81.2
intangible assets
Operations acquired -39.1 -71.7 -45.5 -91.2
Sales of tangible and intangible 18.3 10.7 70.7 11.9
assets
Operations sold 23.6 20.6 14.6 23.8
Loans granted -3.3 -11.6 -71.3 -9.5
Repayments of loan receivables 3.6 3.3 8.5 3.4
Other cash flow from investments 10.5 7.2 45.9 9.9
CASH FLOW FROM INVESTMENTS -43.9 -99.2 -55.7 -132.9
CASH FLOW BEFORE FINANCING 73.4 24.5 199.0 127.0
FINANCING
Proceeds from share 2.6 2.5 4.8 2.8
subscriptions
Change in loans with short 107.3 77.3 38.7 7.1
maturity
Drawings of other loans 155.0 141.2 9.7 328.3
Repayments of other loans -178.8 -73.6 143.0 -329.1
Treasury shares -5.1 0.0 0.0
Dividends paid -159.0 -142.7 11.4 -142.7
Other cash flor from financing -2.2 -1.8 22.7 -2.3
CASH FLOW FROM FINANCING -80.3 3.0 -136.0
CHANGE IN CASH AND CASH -6.9 27.5 -125.1 -8.9
EQUIVALENTS
ACCORDING TO THE CASH FLOW
STATEMENT
Exchange rate differences under -0.8 -1.1 -30.0 1.1
cash and cash equivalents
NET CHANGE IN CASH AND CASH -7.7 26.4 -129.0 -7.8
EQUIVALENTS
Cash and cash equivalents at 77.1 84.9 -9.2 84.9
Jan. 1
Cash and cash equivalents at 69.4 111.3 -37.7 77.1
September 30 / Dec. 31
Cash and cash equivalents in cash flow statement include cash and
cash equivalents less bank overdrafts.
Accounting Policies
SanomaWSOY has prepared its Interim Report in accordance with IAS 34
standard while adhering to related standards and interpretations
applicable within the EU.
SanomaWSOY applies all the standards, amendments to standards, and
interpretations, that took effect at January 1, 2007. These have no
material effect on consolidated financial statements.
NET SALES BY BUSINESS
EUR million 1-3/ 4-6/ 7-9/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2007 2007 2007 2006 2006 2006 2006 2006
SANOMA MAGAZINES
Sanoma Magazines 119.8 136.6 129.2 116.7 138.7 127.4 148.3 531.2
Netherlands
Sanoma Magazines 65.8 68.5 66.0 58.1 59.7 57.9 71.9 247.6
International
Sanoma Magazines 52.5 55.8 48.1 44.7 48.2 43.8 51.9 188.6
Belgium
Sanoma Magazines 50.1 48.6 48.1 45.8 47.1 47.3 53.1 193.2
Finland
Eliminations -1.2 -1.2 -1.0 -1.2 -1.3 -1.2 -0.9 -4.7
TOTAL 287.1 308.2 290.4 264.1 292.3 275.2 324.3 1,155.9
SANOMA
Helsingin Sanomat 72.3 68.0 66.2 66.8 66.2 62.9 71.4 267.3
Ilta-Sanomat 23.6 24.6 22.9 22.3 23.4 22.8 23.7 92.2
Other publishing 24.3 24.7 22.6 20.9 21.5 20.3 24.8 87.6
Others 38.5 38.0 37.0 37.5 36.5 34.9 36.8 145.6
Eliminations -36.4 -35.5 -34.8 -34.9 -33.7 -32.6 -34.3 -135.6
TOTAL 122.4 119.8 114.0 112.6 113.8 108.2 122.4 457.1
SANOMAWSOY EDUCATION AND BOOKS
Educational 20.0 78.5 68.7 15.3 69.7 77.3 25.4 187.7
publishing
Publishing 26.3 20.8 20.7 24.2 22.1 19.0 30.7 96.0
Others 12.0 11.0 14.2 10.3 9.7 11.3 12.0 43.3
Eliminations -6.0 -5.4 -6.5 -4.5 -4.3 -4.3 -4.7 -17.8
TOTAL 52.2 104.8 97.0 45.4 97.2 103.3 63.4 309.2
SWELCOM
TV and radio 20.1 20.3 16.3 19.2 21.0 13.4 22.8 76.5
Others 15.4 15.2 16.7 14.3 13.2 14.0 14.6 56.0
Eliminations -0.3 -0.1 -0.2 -0.2 -0.1 -0.2 -0.1 -0.6
TOTAL 35.2 35.4 32.8 33.3 34.1 27.2 37.2 131.8
RAUTAKIRJA
Kiosk operations 86.9 99.3 95.5 82.3 94.4 91.4 101.0 369.1
Press distribution 56.2 61.0 61.8 50.7 57.5 56.6 58.7 223.6
Bookstores 29.6 23.1 37.7 30.2 22.5 37.2 49.0 138.9
Entertainment 23.5 22.0 24.0 20.1 15.7 18.0 28.0 81.7
Eliminations -3.9 -4.0 -4.3 -2.6 -3.2 -3.6 -3.9 -13.4
TOTAL 192.4 201.3 214.5 180.7 186.8 199.6 232.9 799.9
Other companies -25.6 -25.1 -30.1 -23.6 -25.1 -25.3 -37.9 -111.9
and eliminations
TOTAL 663.7 744.4 718.6 612.5 699.2 688.2 742.2 2,742.1
OPERATING PROFIT BY DIVISION
EUR million 1-3/ 4-6/ 7-9/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2007 2007 2007 2006 2006 2006 2006 2006
Sanoma Magazines 32.1 61.3 30.4 23.3 35.3 28.2 41.9 128.8
Sanoma 19.6 17.3 17.2 16.1 15.0 15.0 16.5 62.7
SanomaWSOY Education and -6.5 29.8 27.9 -4.3 33.8 25.6 -7.1 48.0
Books
SWelcom 2.9 4.0 3.5 3.2 4.0 0.4 4.8 12.5
Rautakirja 9.0 10.6 13.0 10.4 8.1 13.7 22.5 54.7
Other companies and -3.1 10.1 -3.4 -3.1 -3.4 -2.9 -4.7 -14.1
eliminations
TOTAL 54.0 133.0 88.5 45.6 92.8 80.1 73.9 292.5
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 30.9.2007 30.9.2006 Change,% 31.12.2006
Carrying amount at Jan. 1 572.3 566.5 1.0 566.5
Increases 40.8 32.7 24.7 59.4
Acquisition of operations 0.8 9.6 -92.1 15.5
Decreases -2.2 -3.0 -26.6 -5.3
Disposals of operations -0.8 -0.7 25.9 -2.3
Depreciation for the period -49.4 -46.5 6.3 -62.9
Impairment losses for the 0.0 0.0 21.2 -0.2
period
Exchange rate differences and -0.7 0.3 -302.9 1.6
other changes
Carrying amount at September 560.6 558.9 0.3 572.3
30 / Dec. 31
The commitments for acquisitions of tangible assets were EUR 6.3
million (2006: EUR 10.4 million).
CONTINGENT LIABILITIES
EUR million 30.9.2007 30.9.2006 Change,% 31.12.2006
CONTINGENCIES FOR OWN
COMMITMENTS
Mortgages 18.2 10.3 75.7 10.5
Pledges 16.5 10.9 50.9 18.4
Other items 0.4 0.4 -4.4 0.4
TOTAL 35.1 21.7 61.6 29.4
CONTINGENCIES GIVEN ON BEHALF
OF ASSOCIATED COMPANIES
Guarantees 7.9 7.9 0.0 7.9
TOTAL 7.9 7.9 0.0 7.9
CONTINGENCIES GIVEN ON BEHALF
OF OTHER COMPANIES
Guarantees 0.1 0.2 -15.5 0.1
TOTAL 0.1 0.2 -15.5 0.1
CONTINGENCIES GIVEN ON BEHALF
OF OTHER COMPANIES
Operating lease liabilities 261.7 214.5 22.0 249.1
Royalties 20.9 16.1 29.8 15.9
Other 49.8 43.6 14.2 47.2
TOTAL 332.4 274.2 21.2 312.2
CONTINGENT LIABILITIES, TOTAL 375.6 304.0 23.5 349.6
CONSOLIDATED INCOME STATEMENT BY QUARTER
EUR million 1-3/ 4-6/ 7-9/ 1-3/ 4-6/ 7-9/ 10-12/ 1-12/
2007 2007 2007 2006 2006 2006 2006 2006
NET SALES 663.7 744.4 718.6 612.5 699.2 688.2 742.2 2,742.1
Other operating 13.3 49.0 12.4 15.4 12.8 13.8 15.2 57.2
income
Materials and 294.9 327.1 323.3 280.9 306.6 322.0 333.8 1,243.3
services
Personnel 158.4 162.2 151.8 145.6 148.7 142.0 159.1 595.5
expenses
Other operating 135.0 133.9 130.3 124.8 129.8 124.3 153.3 532.2
expenses
Depreciation and 34.6 37.3 37.1 30.9 34.0 33.5 37.3 135.8
impairment losses
OPERATING PROFIT 54.0 133.0 88.5 45.6 92.8 80.1 73.9 292.5
Share of result of 1.8 2.7 2.0 1.9 2.3 3.4 0.8 8.4
associated
companies
Financial items -7.1 -9.6 -8.7 -6.2 -7.5 -6.1 -4.7 -24.5
RESULT BEFORE 48.6 126.1 81.9 41.3 87.6 77.4 70.1 276.3
TAXES
Income taxes -13.7 -30.6 -20.3 -12.4 -25.3 -18.2 -12.1 -68.0
RESULT FOR THE 34.9 95.5 61.5 28.9 62.3 59.2 58.0 208.4
PERIOD
Attributable to:
Equity holders of 35.5 95.8 59.7 32.5 62.2 57.2 57.6 209.5
the Parent Company
Minority interest -0.6 -0.3 1.8 -3.6 0.1 2.0 0.4 -1.1
Press conference
Press and analyst meeting in Finnish will be held by Mr Hannu
Syrjänen, President and CEO of SanomaWSOY at 11:00 am (Finnish time)
at Sanomatalo, Töölönlahdenkatu 2, Helsinki.
The conference call in English for analysts and investors will be
arranged at 1:00 pm (Finnish time). Mr Hannu Syrjänen will present
the result. To join the conference, please dial +44 20 3003 2666
(Europe) or +1 866 966 5335 (US).
The event can also be viewed on web at www.sanomawsoy.fi either live
or later on as on demand.
The presentation material of the press and analyst meeting as well as
the slides used in the conference call will be available on
SanomaWSOY's website after the press and analyst meeting has started.
Publishing of SanomaWSOY's Full-Year Result
SanomaWSOY will publish its Full-Year Result for 2007 on 7 February
2008 with a target time of 11 am Finnish time.
SANOMAWSOY CORPORATION
Matti Salmi
Senior Vice President
Finance and Administration
Additional information: SanomaWSOY's Group Communications, tel. +385
105 19 5062 or ir@sanomawsoy.fi
www.sanomawsoy.fi/
www.sanomawsoy.fi/Investors
SanomaWSOY is the leading media group in the Nordic region operating
in versatile fields of media in over 20 European countries. The Group
has five divisions: Sanoma Magazines, Sanoma, SanomaWSOY Education
and Books, SWelcom, and Rautakirja. In 2006, the Group employed over
18,000 people and its net sales were some EUR 2.7 billion.
