CEO's review

President and CEO Susan Duinhoven:

29 April 2020

“We had a good start to the year with solid business performance both in Learning and Media Finland.

In Learning, the first quarter of the year is always seasonally small, and together with our customers, we prepare ourselves for the forthcoming high season of the second and especially the third quarter. This year, the corona virus pandemic put a challenge to our customers and our teams, who have jointly done an amazing job in turning the operating model into remote work and digital support for the teachers and students overnight. During March, we have seen strong growth in the user numbers of our digital platforms across our operating countries. Currently, we estimate that the pandemic will not have a significant impact on Learning’s business performance of 2020. We are well prepared for orders and deliveries for the start of the new school year in autumn as well as for mitigating the possible risks and capturing opportunities arising from the increased penetration of our digital platforms in the short- or long-term.

In Media Finland, our business performed well during January-February, and among other things, we successfully prepared for the launch of Supla+, our subscription-based audio-on-demand service, in March. We started to experience the first signs of the corona virus pandemic impact on advertising in the second half of March. In the B2C business, the success of Helsingin Sanomat in growing the number of digital subscriptions continued during the quarter, offsetting the decline in the number of print subscriptions of HS and magazines. Ilta-Sanomat has hit new all-time records in the number of daily site visits, proving to be a source of reliable news for all Finns. The number of subscriptions for VOD service Ruutu+ has also grown well. Our teams have done a great job in serving the readers with free and paid up-to-date news and entertainment across all media channels, while working completely remotely, and in supporting our B2B customers with insight and innovative ideas for advertising to fit for these unprecedented times.

In mid-February, we announced the acquisition of Alma Media’s regional news media business. The acquisition was unconditionally approved by the Finnish competition authorities on March 19 and will be completed tomorrow, 30 April. The acquired business will support further growth of Media Finland’s digital subscription base in its news & feature business. We are looking forward to integrating the business, learning the best practises from each other and welcoming about 365 new colleagues to Sanoma – while working safely and mostly remotely. At the same time in February, we started a strategic evaluation of our online classifieds business Oikotie in Finland. The evaluation is proceeding according to our plans and is ongoing with all possible outcomes still open.

Last week, we completed another important transaction, the divestment of Media Netherlands. I want to thank the team that created excellent value for Sanoma during the past nearly 19 years and wish them all the best as part of DPG Media, the most prominent cross-media business in the Dutch and Belgian markets. The divestment provides Sanoma with a EUR 400 million headroom for future acquisitions in both of our continuing businesses.

During this corona pandemic, our first and foremost priorities are maintaining the health and safety of our employees and giving solid support to our customers. Practically all our teams have successfully shifted to remote operations and many of them have performed clearly above our expectations. Remote work is largely supported by our improved, cloud-based IT infrastructure, in which we made a major investments in the last years. Due to the current uncertainty in our markets, we have temporarily withdrawn our Outlook for 2020, while we remain committed to our long-term strategy and financial targets as well as the payment of our second dividend instalment, EUR 0.25 per share, in November as decided by the AGM in March. I am grateful for the agility and commitment of our team across the Group to take us and our customers through the current challenges – with a focus on our long-term strategic priorities.”