Solid Financial Position Improving Efficiency

Transcription

1 Solid Financial Position Improving Efficiency Kim Ignatius CFO, Sanoma Group Sanoma Capital Markets Day 12 October 2009

2 Solid financial performance improving efficiency Cost reductions Reshaping operations to improve efficiency in longer term Exit loss-making units and operations Significantly lower interest expenses Tax management Focus on managing net working capital Focus on capital expenditure Targeting good results, stable cash flows and solid capital structure 2

3 Cost reductions & efficiency improvements Operating expenses decreased by over 5% in 1H09 1H09 Net sales EUR 1,333.2 million Operating expenses EUR 1,189.8 million 1H08 Net sales EUR 1,452.8 million Operating expenses EUR 1,265.1 million Total paper costs Cost of sales (excl. paper) Total employee benefit expenses Advertising & marketing Rents Office & IT Travel expenses Other expenses Non-recurring personnel costs excluded. 3

4 Cost reductions & efficiency improvements Operating expenses Cost of goods sold adjusting well to changes in net sales Immediate savings from lower marketing expenditure At the end of June, FTE s lowered by 1,144 from year-end 2008 and by 1,021 compared to June 2008 impact getting more visible Reshaping operations and functions in order to build competitive positions going forward Targeting clearly lower operating expenses in

5 Net working capital EUR million Jan08 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan09 Feb Mar Apr May Jun Total current receivables Inventories Total current liabilities NET WORKING CAPITAL NWC/NS 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% Increased focus on net working capital management Positive development as a percentage of sales helping us to keep a good cash flow from operations 5

6 Capital expenditure EUR million Group target to keep annual capex level below EUR 100 million In 2009, the Group is aiming at clearly lower levels Capex consists mainly of maintenance and developing operational ICT 1H09 1H Sanoma TOTAL Magazines News Entertainment Learning & Literature Trade 6

7 Capital structure Net debt development EUR million Net debt 1,058.4 Cash flow from operations Capex 63.4 Acquisitions & disposals 77.3 Other 14.4 Net debt Cash flow from operations 7.5 Dividends Acquisitions Capex & Disposals Other 8.1 Net debt 1, Driven by the economic environment; lower profitability impacting negatively Lower paid interest and taxes + NWC development having a positive impact Majority of cash flow from operations accumulated in the second half Net debt /EBITDA at 3.0 (Net debt levels at the highest at second quarter) Favourable long-term credit facility 7

8 Disney Capital structure Equity development EUR million Equity 1,297.1 Profit for the period* 1.1 Acquisition of treasury shares -6.4 Translation differencies Other -1.1 Equity 1,237.1 Profit for the period 51.6 Dividends Translation differencies Other -0.7 Equity 1, EBIT under pressure due to market conditions Interest expense development positive Effective tax rate improving No equity hedging in place, cumulative translation differences at EUR million Group has adequate levels of distributable equity * Impacted by the impairment of EUR 83.7 million. 8

9 Reshaping operations Exiting loss-making businesses and units Sanoma News Sanoma Magazines Belgium Sanoma Uitgevers Estonian retail operations Language services General literature Discontinuing some 30 magazines Closing down some 120 kiosks Dutch marketing organisation (Felicitas) Multi-volume books Divestments of non-core activities Studiebeurs, educational magazines 9

10 Dividend over the years EUR Dividend/share Earnings/share Cash flow from operations/share EPS in 2008 impacted by impairment Cash flow from operations very stable over the years Dividend payout impacted by both earnings/share and cash flow from operations/share 10

11 Conclusions Internal focus continues to be in safeguarding profitability and stable cash flows; also in 2010 Keeping a solid capital structure is a must Strengthening profits and cash flow will provide additional financial flexibility, allowing us to invest in growth areas Dividend policy to pay over 50% of net profit (unchanged) 11

12 Inspires, Informs, Connects