Sanoma in brief Sanoma in 2017 Media Finland Net sales 2017 EUR - PowerPoint PPT Presentation

Roadshow presentation August-September 2018 Building on our solid base for selective growth

Sanoma in brief

Sanoma in 2017 Media Finland Net sales 2017 EUR 571 million News TV/Radio 44% non-print Online & Mobile 11.5% margin Magazines NET SALES other EUR 1,327 million 0 100 200 300 Media Netherlands NON-PRINT SALES EUR 440 million Magazines 40% Online & Mobile 30% non-print Distribution 15.5% margin OPERATIONAL EBIT MARGIN Other 13.6% 0 100 200 300 Learning EUR 318 million Poland Netherlands 45% non-print Finland Belgium 17.5% margin Sweden 0 20 40 60 80 100 Roadshow presentation 3 August-September 2018

Media Finland: Continuing to strengthen our market position Net sales splits 2017  Leading media company in Finland  Information, experiences, inspiration and entertainment Other Advertising through multiple media platforms: newspapers, TV, 9% Single copy 8% radio, events, magazines, online and mobile channels Print Non-print  Reaching 95% of all Finns weekly 46% 56% 44%  A trusted partner with insight, impact and reach for 37% Subscription advertisers Key figures 2017 Focus areas MEUR 2017 2016  Improved competitiveness and profitability Net sales 571 581  Strengthening positions in three areas: – Growing in entertainment Operational EBIT 66 50 – Transforming B2B offering and organization Margin 11.5% 8.5% – Building on our unique position in the news media Capex 6 5 Personnel (FTE) 1,700 1,800 Roadshow presentation 4 August-September 2018

Media Netherlands: Focusing on profitability and cash flow generation  Dutch consumer media operations and the press Net sales splits 2017 distribution business Aldipress  Leading cross media portfolio with strong brands and Other Advertising 19% market positions in magazines, news, digital, events Print Non-print 31% and e-commerce 60% 30%  Content and customer data combined to develop successful marketing solutions for our clients 33% Single copy 17% Other 10% Subscription  Reaching 12+ million consumers every month Key figures 2017 Focus areas MEUR 2017 2016  Stable core business with >1.3m subscriptions Net sales 440 459  NU.nl & data business will drive value creation through topline growth Operational EBIT 68 67  Strong profitability with 15.5% EBIT margin Margin 15.5% 14.7%  Increasing cash conversion as portfolio restructuring is Capex 3 2 now completed Personnel (FTE) 1,100 1,200 Roadshow presentation 5 August-September 2018

Learning: Creating a European Champion in Learning Net sales splits 2017 Leading positions in countries with some of world’s best  educational systems Sweden Poland  Solutions that drive higher learning outcomes, 7% Belgium Print Non-print engagement and efficiencies 16% 31%  Scalable technologies to support leadership in the 55% 45% digital transformation 17% Finland of which app.  A clear strategy to become a European champion Netherlands 29% ½ hybrid Key figures 2017 Focus areas MEUR 2017 2016  Organic growth in footprint markets Net sales 318 283  Capturing synergies across borders  Pursuing M&A in K12 and adjacent markets Operational EBIT 56 57 – Core business in current footprint markets Margin 17.5% 20.1% – Adjacent business in current footprint markets Capex 20 18 – Core business outside current footprint markets Personnel (FTE) 1,400 1,400 Roadshow presentation 6 August-September 2018

Strategy and financial targets

We are building on a solid base for selective growth We have completed major portfolio Resulting in: changes  Solid profitability  Growing cash flow  Increasing dividends We continue to focus on our customers, profitability & cash flow …  Equity ratio and leverage within long-term target … and increasingly focus on selective growth through M&A Roadshow presentation 8 August-September 2018

Our major portfolio changes are now completed… De Boeck Scoupy BE NL Acquisitions N.C.D. Tutorhouse Kortingisleuk.nl Routa FI FI Scoupy FI NL 2016 2017 2018 Women’s AAC Global HeadOffice Sanoma SBS Divestments FI FI Baltics NL magazines BE Kieskeurig.nl Autotrader.nl NL NL Media Finland Media Netherlands Learning Roadshow presentation 9 August-September 2018

…resulting in a more balanced business portfolio  Higher share of more stable Group net sales by category subscription and learning sales 14% 14%  Lower exposure to more 9% 10% volatile advertising sales – Finland 75% of the Group’s Advertising 26% 36% advertising sales: MEUR 250 27% – The Netherlands 25%: Subscription 23% MEUR 80 24% Learning 17%  Overall focus on our stronghold positions in all 2016, incl. SBS 2017, excl. SBS segments we operate in Learning Subscription Advertising Single copy Other Roadshow presentation 10 August-September 2018

Our profitability has improved…  Profitability continued to improve Around Operational EBIT in 2017 14 % 13.6% EUR million – Streamlined and more efficient 11.3% operations – Divestments of Dutch TV operations SBS and Belgian 7.4% women’s magazine portfolio 6.2% 4.8% – Cost innovations  Outlook for 2018 operational EBIT margin is around 14% 155 119 84 150 181  EBIT margin is in line with the Outlook for 2018 2013 2014 2015 2016 2017 top tertile industry benchmark of Operational EBIT Margin, % Industry top tertile benchmark 14% in 2017 Roadshow presentation 11 August-September 2018

… and 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: – Q1 and Q4 are typically loss-making, while most of net sales and earnings are accrued during Q2 and Q3  In 2018, we are experiencing a structural shift to later ordering in Learning mainly due to – Increasing share of digital learning methods – Optimisation of supply and inventories 4 throughout the chain 20 76 73 71 81 7 -4 – Increased importance of Poland where deliveries Q1 Q2 Q3 Q4 are typically close to school start 2016 2017 2016 figures not restated for IFRS 15 Roadshow presentation 12 August-September 2018

Our leverage is at the long-term target level (< 2.5 net debt/adj. EBITDA)  Our leverage has decreased rapidly: Net Net debt is improving EUR million debt / adjusted EBITDA from 3.6 at the end 7 of Q1 2017 to 2.0 at the end of Q1 2018 6 5  At the same time, net debt nearly halved to 4 EUR 439 million 3 2  Equity ratio 34.1% at the end of Q1 2018 1 845 930 852 801 823 855 766 786 864 847 519 392 439 – Long-term target 35-45% 0 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar 15 15 15 15 16 16 16 16 17 17 17 17 18 Net debt Hybrid bond Net debt / Adjusted EBITDA Roadshow presentation 13 August-September 2018

We are targeting a higher cash conversion Our mid-term cash conversion * Free cash flow is increasing target is 60-70% EUR million 150  In 2017, cash conversion approx. 50% 100 50 Assumptions for key cash flow elements for 2018 0  Profitability improvement  Lower net financing costs -50  Lower IAC in continuing -100 operations  Stable working capital Quarterly 12mr  Stable capex Free cash flow = Cash flow from operations less capital expenditure Roadshow presentation 14 August-September 2018 * Cash conversion = Free Cash Flow / EBITDA adjusted for non-operative items minus investments into TV program rights and prepublication assets

We expect headroom for acquisitions to increase to EUR 300-400 million…  With our leverage at the target level (net debt / adj. EBITDA < 2.5), we estimate to have approx. EUR 300-400 million headroom for acquisitions in 2019, due to – Solid profitability – Improved free cash flow – Reduced leverage  In addition, we have flexibility to temporarily exceed the leverage target level if we identify a major transaction fitting our M&A criteria Roadshow presentation 15 August-September 2018

… with selective growth through M&A opportunities across all three businesses Three target areas  Core business in current footprint markets Learning  Adjacent business in current footprint markets  Synergistic  Core business outside current footprint markets bolt-on acquisitions  Organic Three target areas growth Media  Entertainment: Total TV strategy and live experiences initiatives Finland  News, feature & lifestyle: Aiming for growth in B2C  Active  B2B: Growth in value-added services and supporting SME companies portfolio management Media Target area Netherlands  Value creation through topline growth by increasing value of advertising Roadshow presentation 16 August-September 2018