A leading European learning and media company Content Sanoma in - PowerPoint PPT Presentation

Roadshow presentation May-June 2019 A leading European learning and media company

Content Sanoma in brief p. 3 Our strategic and financial priorities p. 9 Acquisition of Iddink p. 19 Q1 2019 financials p. 28 Appendices p. 38 2 Roadshow presentation May-June 2019

Sanoma in brief 3 Roadshow presentation May-June 2019

SANOMA AS AN INVESTMENT: Growing dividends A leading European learning and media company Strong and Continued balanced focus on business selective portfolio growth Solid Equity ratio profitability and leverage and improving within long- cash flow term target 4 Roadshow presentation May-June 2019

Sanoma in 2018 Learning Net sales 2018 Poland EUR 313 million Netherlands 46% Finland Belgium 19.5% NET SALES Sweden EUR 1,315 million 0 50 100 Media Finland NON-PRINT SALES Newspaper EUR 579 million 45% Online & Mobile TV/Radio 49% Magazines OPERATIONAL EBIT MARGIN 11.9% Other 14.9% 0 100 200 Media Netherlands Magazines EUR 424 million More financial information on the Online & Mobile SBUs is available in 40% Other Appendices, p. 42. Distribution 18.1% 0 100 200 300 5 Roadshow presentation May-June 2019

Learning: A leading position in some of the world’s best education systems  Printed and digital learning methods and digital learning platforms for K12  Integrated product development & design and #2 in Sweden scalable technologies 22% market share  World-class learning and teaching design skills 1.3 million pupils #1 in Finland  Strong local brands and customer relations #2 in the Netherlands 55% market share  Serving 10 million pupils and 0.6 million pupils 30% market share 1 million teachers 2.4 million pupils  Net sales split in 2018 – Printed 54% , digital / hybrid 46% #1 in Belgium #1 in Poland 40% market share 1.5 million pupils More information on country-specific curriculum cycles is 41% market share available in Appendices, p. 43. 4.0 million pupils 6 Roadshow presentation May-June 2019

Media Finland: Strong brands on all media platforms reaching 97% of all Finns weekly #1 #1 #1 #1/2 #1 #1/2 in news in in radio in TV in festivals in online and concerts magazines classifieds 45% 20% 5% 20% 5% 5% Share of net sales in 2018 Unique reach and measurable impact for B2B customers 7 Roadshow presentation May-June 2019

Media Netherlands: Leading local media brands in digital and print reaching 70% of all Dutch every week Blockbuster Online news & Special interest magazine brands data business magazine brands - 5 out of 10 leading - #1 local player in online - Smaller titles magazine brands reach with focus on cost efficiency - Cross media with - Value creation through increasing cash top line growth by conversion increasing value of advertising Share of net 55 % 10 % 35 % sales in 2018 > average ~ average < average Profitability 8 Roadshow presentation May-June 2019

Our strategic and financial priorities 9 Roadshow presentation May-June 2019

Share of more stable subscription and learning business has increased  Higher share of more stable Group net sales by category subscription and learning sales  Lower exposure to more 14% 15% volatile advertising sales 10% 9% – Finland ¾ of the Group’s advertising sales (MEUR 250) 28% print Advertising 26% 36% 72% non-print – The Netherlands ¼ (MEUR 84)  Overall focus on our 25% Subscription stronghold positions in all 23% segments we operate in 24% Learning 17% Information on recent acquisitions 2016, incl. SBS 2018 and divestments is available in Learning Subscription Advertising Single copy Other Appendices, p. 46. 10 Roadshow presentation May-June 2019

Our profitability has improved and margin is above the top tertile industry benchmark  In 2018, earnings improved in all Operational EBIT SBUs: 14.9% EUR million 13.6%  Learning 11.3% – Finland continued to perform well in the curriculum change – Successful start of the business 7.4% development programme “High Five” 6.2% 4.8%  Media Finland – Lower amortisations of TV-program rights (incl. discont. of Liiga) – Continued cost innovations  Media Netherlands 155 119 84 150 181 197 – Solid margin improvement due to 2013 2014 2015 2016 2017 2018 reduced business complexity Operational EBIT Margin, % Industry top tertile benchmark 11 Roadshow presentation May-June 2019

Our business has a characteristic annual seasonality pattern  Our quarterly financial performance is Operational EBIT EUR million strongly affected by the seasonal pattern of the Learning business – Most of net sales and earnings are accrued during Q2 and Q3, ie. close to the beginning of the school year  Strengthening of the events business in Media Finland further increases the weight of Q2 and Q3 in business activity and financial performance 4 20 8 76 73 80 71 81 91 18 -4 7 Q1 Q2 Q3 Q4 2016 2017 2018 2016 figures not restated for IFRS 15 12 Roadshow presentation May-June 2019

We are targeting a higher cash conversion Our mid-term cash conversion * Free cash flow target is 60–70% EUR million 150  Currently approx. 50% 100 Assumptions for key cash 50 flow elements for 2019  Businesses acquired in 2018 0  Lower net financing costs  Lower IAC in continuing -50 operations  Stable working capital -100  Stable capex Quarterly 12mr Free cash flow = Cash flow from operations less capital expenditure 13 Roadshow presentation May-June 2019 * Cash conversion = Free Cash Flow / EBITDA adjusted for non-operative items minus investments into TV program rights and prepublication assets

Leverage at the long-term target level allowing acquisitions At the end of Q1 2019 Net debt  Net debt to adjusted EBITDA 2.0 (2017: 2.0) EUR million – Increase of 0.5 due to implementation of IFRS 16  Net debt EUR 531 million (2017: 439) – Increase of EUR 184 million due to IFRS 16 Long-term target < 2.5  Equity ratio 35.3% (2017: 34.1%) 2.0 – Increase of 4.6%-points due to IFRS 16  Acquisition of Iddink may temporarily increase leverage above the long-term target level – Return to around the long-term target level by the end 864 847 519 392 439 473 392 338 531 of 2019 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Net debt IFRS 16 impact Net debt / Adjusted EBITDA 14 Roadshow presentation May-June 2019

Growth opportunities through M&A across businesses Focus on selective Learning * growth › Core business in › Core business › Adjacent business current markets in new markets in current markets › Synergistic bolt-on acquisitions Media Finland › Entertainment › News, feature and lifestyle › Organic growth initiatives › B2B › Active portfolio management Media Netherlands › News & data › Creating 360 media brands 15 Roadshow presentation May-June 2019 * Intention to acquire Iddink was announced on 11 December 2018. More information from p. 19.

We are fully committed to our dividend policy  A dividend of EUR 0.45 per share for 2018 Dividend per share – 58% of free cash flow (excl. one-off costs related to the EUR divestment of Belgian women’s magazine portfolio) – Paid in two parts: EUR 0.25 in April and EUR 0.20 in November 60% Dividend policy: 40% Sanoma aims to pay an increasing dividend, equal to 40–60% of annual free cash flow. 0.20 0.10 0.20 0.35 0.45 0.14 0.76 0.63 0.77 When proposing a dividend to the AGM, the Board of Directors will look -0.18 at the general macro-economic environment, Sanoma’s current and target capital structure, future business plans and investment needs as well as both previous year’s cash flows and expected future cash flows 2014 2015 2016 2017 2018 affecting capital structure. Free cash flow / share DPS Payout ratio 16 Roadshow presentation May-June 2019

Media and learning have a meaningful role in society Media Learning   Journalistic content supports freedom of speech and Our modern learning methods support teachers independent information gathering in developing the full potential of every pupil   Local entertainment contributes to shared values and Helps in building a strong foundation for a stable, productive and prosperous society experiences   Data is central to adaptive learning methods Data assists in serving relevant content to audiences, while focus on “avoiding creating an information bubble” and measuring learning impact Responsible business practices across the value chain Compliance and Code of Conduct ǁ Environmental matters: paper and energy use ǁ Responsible employer ǁ Know your counterparties 17 Roadshow presentation May-June 2019

SANOMA AS AN INVESTMENT: Growing dividends A leading European learning and media company Strong and Continued balanced focus on business selective portfolio growth Solid Equity ratio profitability and leverage and improving within long- cash flow term target 18 Roadshow presentation May-June 2019

Acquisition of Iddink 19 Roadshow presentation May-June 2019