Sanoma Corp Unsp/Adr

Good afternoon, everyone, and welcome to Sanoma's first quarter 2026 results presentation. My name is Kaisa Urasmaa. I'm heading investor relations and sustainability at Sanoma. Our adjusted operating profit improved in learning and media in the first quarter. And today we have the president and CEO Rob Kolkman and CFO Alex Green to present the results. After their presentation, we will have a Q&A session. We will first take questions from here at Sanama House. Please use the microphone. Then we hand over to the telephone line. And you can also use the chat function in the webcast platform. The whole event will be recorded and the recording will be available on our website shortly after the event. With this, I would like to invite Rob on stage, please.

Thank you, Kaisa. And good afternoon, everybody. It's my pleasure to present the quarter one results to you this afternoon. And as Kaisa already mentioned, we've seen improved profit in both learning and media, which is a really solid good start to the year. Let me first go high level on the numbers and then, as usual, zoom in more specifically on learning, try to give a bit of a feel as well for where we stand in the build-up to really that step change in growth there. And then also, of course, say a few words about the media business as well. So overall, our net sales were stable. And underneath that, you see growth in learning. particularly in the Netherlands, Poland and Spain. And the advertising is still impacted by the weaker economic climate here in Finland. Profit-wise, we see improvement. Of course, this is a seasonally small revenue quarter, but the improvement is definitely there, and that is both in learning and in media. Free cash flow relatively stable, and Alex will talk about that a bit more. And Alex will also talk more about the leverage, which was 2.6, very close to our target level of 2.5. Of course, this is also following the repayment that we have done of the hybrid bond and the seasonality. And we were very pleased last week that we closed the acquisition with Visa and Vivas, which really strengthens our position in Spain. And now we'll dive a little bit deeper into that as well. You think about the outlook, we have kept that unchanged, obviously, and we can talk about that later as well. Obviously, the Visa and Viva's acquisition is a real positive that we see. At the same time, we kept it unchanged because it is still very early days in the year. Quarter three is for learning, very important, and clearly on the media side, the uncertainty lies around the advertising. But overall, really solid start, good start to the year. And that also means this outlook being unchanged, that the step change in profits that we indicated back in February, we really truly see that happening this year. And as we also highlighted in the Capital Markets Day. Let me now zoom in on learning a bit more specifically. So net sales increased in learning. Content sales grew in the Netherlands, which is driven by a larger spring order. And just to clarify, that spring order is, of course, a reflection of the growth we're also expecting for the full year in the Netherlands. So it's not like it was different phasing between the quarters. It is just a reflection of the kind of market we do expect in the Netherlands also for the full year. So that means growth in the Netherlands on this bit. Phasing between the quarters is indeed happening a little bit in Spain, small numbers. And we're very pleased in Poland that we see the digital platform sales growth continuing. And that very much is also driven by the more than one million subscribers we have to the B2C platform there. Of course, it's small numbers, and Poland will very much see the growth in quarter three driven by the curriculum. So then this growth will be less visible. But it's really good to see that that continues to be a strong part in the Polish growth story. And a few words on the profit, which, given the low revenue quarter, is lost. That improved a bit, which is, of course, supported by the higher net sales, which was a good margins. There are some cost efficiencies in there in a positive way following program solar. Again, most of that will, of course, materialize once you see the volumes increase. And there is also, to be clear, a higher cost base in preparation for the curriculum renewals in Poland and Spain. So that is something, of course, that we always see in a year like this. When you see big growth happening in quarter three, we have a ramp up from the sales and the marketing and some editorial as well. So that is with regard to the numbers for quarter one. I would like to also give you a bit of a feel that we are well positioned for the growth further on in the year. And there's a few elements there to highlight. So on Poland, really good news there is that the Poland government has reconfirmed its decision to modernize education. And that also comes with a 20% increase that they've signed off on the textbook subsidies, which is part of the market we're active in in Poland, which is, of course, part of our expectation. But it's really good to see that confirmed and therefore also supporting the point that the growth in quarter three increases. will be very noticeable in Poland. In the Dutch market, we see continued good growth on the learning content side. We've also, as part of the seven countries in which we rolled out teacher assistance, we're also rolling it out as a pilot now in the Netherlands. And we particularly think in the Netherlands this will really benefit our offering, particularly in secondary education going forward. It helps teachers to make more personalized exercises in this first phase. There's a lot more to come after that, but the Netherlands will be a market where we think we'll lead the way with regard to personalized learning. And an acquisition of Mr. Chet, which is a small one, but really helping more towards the students, the children, the tutoring is also really a good small step in that direction. Then Spain, the other big market for growth. There, we really have seen that the new funding cycle is about to start. All the indications from the different regions are that that is happening. We, of course, prepared with the content. That's also why some of the cost base is slightly higher in quarter one in preparation for all that. And we're very pleased to see that happening. And if you then think in Spain, on top of that, there is the acquisitions of Visa and Vivas, which, of course, is really value creating. It goes to the heart of what we try to do when we talk about leveraging our scale. So let me zoom in on that a little bit more with some specifics. So Visa & Vivas is one of the major learning content providers in Spain with a net sales of 29 million. It really offers product that complement ours with a similar approach in blended learning. So finding the right print and digital. So when, for example, in the capital markets that we talked about M&A activities, this goes to the heart of what we like in value creation M&A. It's, of course, as you know, in Spain, one of our bigger markets as well. We've got a good position there, and we have real great potential that also Visa and Vivas will benefit now from that funding cycle as well. So very much in line with our strategy, really building on the existing scale and supporting, therefore, also our long-term financial targets. This really has that 10% to 20% percentage of revenue as synergies, like we indicated in the Capital Markets Day as well. And that will take about 12 to 18 months to really fully materialize. And particularly, of course, the coming months are all focused on making sure we have a good start to the school year. Transaction details, no surprises. We've communicated them, the 40 million, and therefore that reflects about 6.8 times EBITDA. And it was completed, signed, closed, completed on the 30th of April. That's on the learning side. Let me now zoom in on media. There, very much the digital transition is continuing. So again, another quarter of growth in subscription sales on the online side, in particular, route to plus digital news media subscriptions. It's against the backdrop of still a more subdued economic climate here in Finland, as we all, of course, are very aware of, which in our case reflected in the lower advertising sales, mainly in TV and in print. So it's very encouraging to see that we have another quarter where, despite there being some headwinds on the top line, we have really robust cost management in place. And that means actually that we have increased our profit in a quarter like that. And that's really a testament to the hard work of Pia and the team, Pia Carlson and the team, to continue to deliver on that. And that improvement comes from the, indeed, growth in subscription sales, the robust cost containment, and then, of course, the impact of the lower advertising sales. And personal expense is part of that cost containment. So that's, from my end, the opening remarks. I will now hand over to Alex to dive a bit more into the financials, and then I'll come back and look forward a bit further and also put in perspective the growth in the coming years. Alex.

Thank you, Rob. So good to be here with you today. So welcome again to our Q1. Starting off with financials, as usual, with the earnings side, the adjusted operating profit year on year, and bringing together from the two slides Rob showed, the learning and media Finland parts, you can see both businesses contributing to higher earnings year on year. On the learning side, the sales flowing through, particularly good content sales in Netherlands and also in Europe, the digital platform sales in Poland, and also two cost impacts sort of offsetting in there. So the improved position with the solar efficiency costs, but also, as Rob was saying, the extra investment in things like marketing and sales, getting ready in Spain and Poland for the higher curriculum reforms, that netting to still an improvement in the year-on-year earnings. And on the media Finland side, we talked about the decline in advertising sales being more than offset by a combination of the growth in digital subscription sales and the cost containment, the robust cost management, which includes the impact of the temporary printing plant closure, including particularly the lower depreciation, also the personnel costs there as well. So this leading to a good start to the year and, you know, on track for where we want to go. If I then move to the result number, so again, the result for the period being improved versus this time last year flowing down from the operating profit improvement, the slightly higher IACs coming from the strategic development and the technology transformation costs across different parts of the operation. Net financial items at five, so lower interest costs effectively, with the interest rate being on average lower now, 3.4 versus 4.2 this time last year, more than offsetting the slightly higher or the higher external debt, which got higher towards the end of the quarter with the repayment of the hybrid bond. In terms of cash, free cash flow, relatively stable. So you can see here on the top the particular movements. And so the movements there, working capital, some timing of payments impacting there. And also same reason alongside the taxes. The taxes is obviously tax payments and also some tax receipts. So those two things are pretty much offsetting. So basically timing of cash there being the key thing getting to a relatively stable position. position overall and you can see on the bottom of the slide the 12-month rolling line being relatively stable there as a consequence. And then here, this shows you very, very clearly the hybrid bond repayment impact. Now, as you see going, normally, if you look at December to March, we do see the leverage going up as we have the negative cash and the investments, the low costs versus the low revenues at the beginning of the year. That still happens here, but is accentuated by the hybrid bond, 150 million after three years going back and being... being replaced with senior debt and the cash that we have. That we expect to, as the cash starts coming in, being positive in the second half of the year, that will come right down again below the target and to likely a little bit above the end of last year, but in that sort of ballpark. And connected back to the acquisition that we just announced, in April, so after the first quarter of April, we signed a new 70 million bilateral short-term loan to help fund that acquisition. As I said, it is short-term. We expect to repay that as the cash comes in at the back end of the year. So with that, I invite Rob back on stage for the path forward.