Sanoma (SAA1V) Q2 2024 earnings summary

Executive summary

• Strong earnings improvement in both Learning and Media Finland segments in H1 2024, with operational EBIT excl. PPA rising to EUR 37 million from EUR 23 million year-over-year and net sales up to EUR 563 million, driven by growth in the Netherlands, Spain, and Poland.

• Cost containment, lower paper prices, and price increases supported profitability; free cash flow improved to EUR -58 million from EUR -84 million, though it remained negative due to seasonality.

• Balance sheet deleveraging continued, with net debt/adj. EBITDA improving to 2.9 from 3.3 and equity ratio at 37.4%.

• Outlook for 2024 remains unchanged, with full-year operational EBIT excl. PPA expected at EUR 160–180 million and net sales at EUR 1.29–1.34 billion.

• Dividend of EUR 0.37 per share for 2024 to be paid in three instalments.

Financial highlights

• Q2 2024 net sales reached EUR 342.4 million (Q2 2023: EUR 341.3 million); operational EBIT excl. PPA was EUR 61 million (Q2 2023: EUR 53.7 million).

• H1 2024 operational EBIT excl. PPA was EUR 37 million (H1 2023: EUR 23 million); result for the period improved to EUR -3 million from EUR -51 million.

• Free cash flow improved to EUR -58 million (2023: -84 million); net debt reduced by EUR 62 million year-over-year.

• Operational EPS for Q2 2024 was EUR 0.17 (Q2 2023: 0.14); EPS was EUR 0.14 (Q2 2023: -0.08).

• Operational EBITDA margin for H1 2024 at 22.3% (2023: 19.6%).

Outlook and guidance

• 2024 net sales expected at EUR 1.29–1.34 billion (2023: 1.4 billion); operational EBIT excl. PPA at EUR 160–180 million (2023: 175 million).

• Full-year guidance remains unchanged despite strong H1, due to expected headwinds in Learning (notably Spain) and uncertainties in the advertising market.

• Free cash flow for 2024 expected to be similar to 2023, with further improvements targeted for 2025 and 2026.

• Advertising market in Finland anticipated to decline slightly; economic conditions in operating countries expected to remain stable.

• Profit improvement in Media Finland expected to persist, but H2 performance anticipated to be similar to last year due to market conditions.