Sanoma (SAA1V) Q3 2024 earnings summary

Executive summary

• Operational EBIT improved for the first nine months, with solid Q3 performance and significant free cash flow growth, despite a 2–3% year-over-year net sales decline mainly due to lower sales in Learning and Media Finland divestments.

• Free cash flow for Q1–Q3 more than doubled to EUR 77 million, supported by operational results, lower investments, and working capital management.

• Deleveraging continued, with leverage (Net Debt/Adj. EBITDA) improving to 2.4, below the long-term target of 3.0.

• A EUR 150 million social bond was issued in September 2024 to support education-related expenditures and extend debt maturity.

• Net sales for Q3 2024 were EUR 540 million, down 7% year-over-year, mainly due to planned discontinuation of low-value distribution contracts in Learning and small divestments in Media Finland.

Financial highlights

• Q1–Q3 2024 net sales: EUR 1,103.4 million (-2–3% year-over-year); Q3 2024 net sales: EUR 540 million (-7% year-over-year).

• Operational EBIT excl. PPA for Q1–Q3: EUR 207.3 million (+2% year-over-year); Q3: EUR 170 million (-5% year-over-year).

• Free cash flow for Q1–Q3: EUR 77 million (2023: EUR 35 million), driven by higher operational results and lower investments.

• Equity ratio at 40.8%, within the target range of 35–45%.

• Net debt at EUR 615.5 million (Q3 2023: 691.4 million).

Outlook and guidance

• 2024 net sales expected at EUR 1.32–1.34 billion (2023: 1.4 billion), with operational EBIT excl. PPA at EUR 170–180 million (2023: 175 million), both at the higher end of original guidance.

• Group outlook narrowed, with both net sales and operational EBIT expected at the higher end of the original range.

• Advertising market in Finland expected to decline slightly for the full year, with no signs of near-term improvement.

• Learning business margin expected to remain stable versus 2023, with continued uncertainty around returns in Spain and Italy in Q4.

• Further decline in low-value distribution contracts in the Netherlands and Belgium anticipated in 2025.