Financials
2023
SANOMA ANNUAL REPORT 2023
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Financials
Description of our financial performance in 2023
Report of the
Board of Directors
....................................................3
Consolidated Financial Statements....... 44
Notes to the Consolidated
Financial Statements
......................................... 49
Parent Company
Financial Statements
.......................................116
Board’s proposal for
distribution of profits
........................................127
Signatures to the Financial
Statements and the Report
of the Board of Directors
................................128
Auditor’s Report .................................................... 129
Independent Auditor’s Reasonable
Assurance Report on Sanoma
Corporation's ESEF Financial
Statements
................................................................ 134
Information for investors ...............................135
SANOMA ANNUAL REPORT 2023
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Report of the
Board of Directors
Strategic review ..........................................................................4
Financial review .........................................................................4
Financial position ......................................................................6
Cash flow .......................................................................................... 6
Acquisitions and divestments .........................................7
Events during the reporting period ............................. 7
Strategic Business Units ...................................................... 8
Personnel .......................................................................................11
Non-financial information ...............................................11
EU Taxonomy disclosure ...................................................18
Risks and risk management ........................................... 23
Outlook for 2024 .......................................................................32
Corporate Governance .......................................................33
Annual General Meeting 2024 ......................................34
Dividend proposal ..................................................................34
Shares and shareholders ..................................................35
Events after the reporting period ...............................37
Alternative performance measures ........................37
Key indicators and share indicators ........................38
Reconciliation of certain key figures ........................ 42
SANOMA ANNUAL REPORT 2023
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Report of the Board of Directors
Strategic review
In 2023, Sanoma continued to build the long-term
competitive strengths of both Learning and Media Finland.
The operating environment was challenging throughout the
year, while Sanoma managed well in partially mitigating
the direct and indirect impacts of cost and salary inflation,
higher interest rates and weakening consumer confidence
in its financial performance.
In October, it was announced that Learning is expected to
reach its long-term profitability target (operational EBIT
margin excl. PPA) of 23% in 2026 through the process and
efficiency program Solar. Program Solar is estimated to
bring EUR 55 million operational efficiencies from 2026
onwards, and it consists of four streams: 1) organisational
optimisation post curriculum renewals in Poland and
Spain, 2) process improvements in publishing operations,
3) continuing harmonisation of digital learning platforms,
and 4) overhead and other optimisations across the
SBU. Higher than average price increases that were
implemented in the beginning of the year to mitigate the
inflation impact and strong demand in Spain related to
the last year of the LOMLOE curriculum renewal led to
strong 8% organic growth in the learning content business,
which in 2023 represented approx. 74% of Learning’s
net sales. Integration of the local K12 learning content
business acquired in Italy in August 2022 was successful,
and according to plans was nearly completed during the
year. Discontinuation of low-value contracts in the Dutch
distribution business started and is expected to result
in a clear net sales decline of that business in the short-
to mid-term.
In Media Finland, the strategic focus of the year was
in enhancing successful digital transformation both in
newsmedia and entertainment to create a sustainable
long-term competitive advantage and continue
implementing the established cost conscious way of
working, which partially mitigated the impact of high cost
inflation. Media Finland’s total subscription base grew
slightly as solid growth in digital subscriptions, driven by
the subscription video-on-demand (SVOD) service Ruutu+,
offset the decline in print subscriptions. This led to a total of
more than 900,000 subscribers paying for digital content in
a country with approx. 2.7 million households. In B2B, digital
advertising demand was stable, while Sanoma’s market
share within domestic digital advertising increased. Media
Finland has a reasonably balanced business portfolio, with
52% of net sales attributable to the relatively stable B2C
business, mainly subscription, and 48% to the B2B business
in 2023. Within B2B, print advertising represented only 17%
of net sales.
Sustainability is deeply rooted into the purpose of Sanoma’s
learning and media businesses, which have a positive
impact on the lives of millions of people every day. During
the year, Sanoma’s sustainability work focused, among
other things, on reducing its carbon footprint as well as
on developing diversity, equality and inclusion (DE&I),
leadership, ethical use of AI and suppliers’ sustainability
practices across the Group. In November, Sanoma’s
climate targets, which include ambitious reductions of
CO
2
emissions not only in Sanoma’s own operations, but
also in the value chain by 2030, were validated by the
Science Based Targets initiative (SBTi). Together with
XX%
Learning's share of
Group's net sales
targets related to the development of accessibility of digital
learning content, the SBTi targets were already in March
linked as KPIs to Sanoma’s EUR 300 million Revolving
Credit Facility.
Sanoma is in a good position to continue building on the
long-term strengths of both Learning and Media Finland.
Its long-term financial and sustainability targets and
2030 growth ambition are unchanged (details available
under Sanoma as an investment). In 2024–2026, the three
strategic focus areas of the Group are: 1) increasing the
profitability of Learning and Media Finland, 2) growing
organically and through smaller in-market acquisitions in
Learning and 3) deleveraging the balance sheet.
Financial review
The Group’s net sales grew to EUR 1,393 million (2022:
1,298). In Learning, significant net sales growth was
attributable to the acquired Italian and German business as
well as strong growth of learning content sales particularly
in Spain and Poland driven by curriculum renewals. In
Media Finland, net sales declined slightly due to lower
advertising sales. The Group’s organic net sales growth
was 2% (2022: 1%), being 6% in Learning and -3% in
Media Finland.
Operational EBIT excl. PPA decreased to EUR 175 million
(2022: 189). Earnings improved in Learning mainly due to
strong organic growth and the contribution of the acquired
Italian and German businesses. In Media Finland, earnings
decreased significantly driven by lower advertising sales
SANOMA ANNUAL REPORT 2023
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and cost inflation. Other operations’ earnings decreased
mainly due to higher bonus provisions.
EBIT decreased to EUR 52 million (2022: 112) mainly due
to lower operational earnings, the booking of the EUR 36
million VAT claim as an IAC in Media Finland in Q2 2023 and
higher restructuring expenses resulting from Program Solar
launched in October. The Group’s IACs increased to EUR -82
million (2022: -38). The restructuring expenses included
EUR 22 million of costs related to Program Solar and
integration costs of recent acquisitions. The impairments
and capital gains were mainly related to rental book fixed
assets impairment, selling of a minor property in Finland,
recent minor M&As in Media Finland as well as a write-
down of assets related to the German Stark business,
which was divested in early January 2024. PPAs increased
to EUR 41 million (2022: 39) due to the acquisition in Italy
and Germany.
Net financial items increased to EUR -31 million (2022: -13) as
a result of a significant increase in interest rates. The average
interest rate of external loans was 3.6% (2022: 1.5%).
Result before taxes decreased to EUR 21 million (2022: 99)
due to lower reported earnings and higher net financial
expenses. Income taxes were EUR 17 million (2022: 22) and
included a positive EUR 5 million adjustment related to the
VAT claims in Q2 2023 and write-down of certain deferred
tax assets in Q3 2023. Result for the period was EUR 4
million (2022: 77).
Operational earnings per share decreased to EUR 0.39
(2022: 0.65) and earnings per share to EUR -0.03 (2022:
0.47), being adversely impacted by clearly higher financial
expenses and the interest booked for the hybrid bond.
IACS, PPAS AND RECONCILIATION OF OPERATIONAL EBIT
EUR million FY 2023 FY 2022
EBIT 51.7 112.0
Items affecting comparability (IACs)
Restructuring expenses -37.6 -27.2
Of which related to Program Solar -21.8
Impairments -13.3 -11.6
Capital gains/losses 4.6 0.9
VAT claims for years 2015–2018 and 2019–2021 -35.9
IACs total -82.3 -37.9
Purchase price allocation adjustments and amortisations (PPAs) -41.3 -39.3
Operational EBIT excl. PPA 175.4 189.3
40
66
74
148
132
134
Learning
Media Finland
Other operations
Operational EBIT
excl. PPA by SBU,
m
€
197
189
175
-13
2021
2022
2023
-10
-8
1
A detailed reconciliation on SBU level is presented at the end of the Report of the Board of Directors in chapter Reconciliation
of certain key figures.
598
618
615
795
681
637
Learning
Media Finland
1,393
Table
Net sales by SBU,
m
€
2021
2022
2023
1,252
1,298
1
SANOMA ANNUAL REPORT 2023
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Financial position
At the end of December 2023, net debt declined to EUR 640
million (2022: 823). In March, part of the debt financing
was replaced with a EUR 150 million hybrid bond that
is recognised as equity. The net debt also declined
compared to the end of September 2023 in line with the
annual seasonality of the learning business. The Group’s
committed Revolving Credit Facility of EUR 300 million was
fully unused. Net debt to adjusted EBITDA ratio improved to
2.8 (2022: 3.2), being at the long-term target of below 3.0.
Equity ratio improved to 42.5% (2022: 35.8%), being within
the long-term target range of 35–45%. More information
on the hybrid bond is available under Events during the
reporting period.
At the end of December 2023, the Group’s equity totalled
EUR 799 million (2022: 702), including the hybrid bond
of EUR 150 million, and the consolidated balance sheet
amounted to EUR 2,036 million (2022: 2,104).
Cash flow
In 2023, the Group’s free cash flow totalled EUR 105
million (2022: 112). In Learning, active working capital
management throughout the year led to a significant
improvement in operating cash flow. The Italian and
German businesses acquired in August 2022 had a
significant positive impact on the free cash flow in 2022 due
to the timing of the acquisition, when only the seasonally
cash positive months of the year were consolidated.
Consequently, in 2023, the acquired businesses had
a negative impact on the year-on-year change of the
reported free cash flow. Lower earnings in Media Finland
and higher interest paid on external debt had an adverse
impact on free cash flow, while it was supported by lower
taxes paid and lower capital expenditure. The Group’s free
cash flow per share was EUR 0.64 (2022: 0.68).
In 2023, capital expenditure included in the Group’s free
cash flow decreased to EUR 43 million (2022: 53) and
mainly consisted of growth investments in digital platforms
and ICT in Learning.
Development of
nancial position
2021
2022
2023
640
823
616
42.5%
35.8%
40.6%
Net debt, m€
Net debt / adj.EBITDA
Equity ratio, %
2.8
3.2
2.4
1
2021
2022
2023
105
112
140
0.64
0.68
0.86
0.64
0.68
0.86
Free cash flow, m€
Free cash flow per share, €
Free cash
ow
1
SANOMA ANNUAL REPORT 2023
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Acquisitions and divestments
There were no major acquisitions or divestments in 2023.
Information on acquisitions and divestments conducted in
2022 and earlier is available at sanoma.com.
Events during the reporting period
On 26 October, Sanoma announced that Sanoma
Learning’s operational EBIT margin excl. PPA is estimated
to reach its long-term target level of 23% in 2026 (2023:
18.7%) supported by the new process and efficiency
improvement program, Solar. Annual operational
efficiencies from Solar are estimated to amount to approx.
EUR 55 million from 2026 onwards. Solar consists of
several workstreams across the learning business and
operations, including organisational optimisation post
curriculum renewals especially in Spain and Poland,
process improvements in publishing operations across
learning material businesses in seven countries, continuing
harmonisation of digital learning platforms started in 2022,
and overhead and other optimisation across the SBU. In
2023, Sanoma has booked EUR 22 million of costs related
to Solar as items affecting comparability (IACs) in Sanoma
Learning’s result. In 2024, Solar-related costs booked as
IACs are estimated to amount to approx. EUR 23 million. All
organisational optimisation actions are subject to works
council negotiations and other local legal procedures. The
implementation of Solar has started and is progressing on
track, with 80% of the initiatives expected to be finalised
during 2024.
On 18 October, Sanoma announced it has signed a new
EUR 100 million term loan facility agreement with OP
Corporate Bank. Maturity of the new term loan is twelve
months from the drawdown plus an extension option of ten
months at the discretion of Sanoma. Sanoma will withdraw
the loan in March 2024 and use the funds, together with its
other existing funding facilities, to repay the EUR 200 million
bond, expiring on 18 March 2024. In addition, the maturity
of Sanoma’s EUR 300 million syndicated Revolving Credit
Facility (RCF) has been extended by one year to November
2026. The RCF is provided by a group of ten relationship
banks and is currently fully unused.
On 16 June, Sanoma announced the composition of its
Shareholders’ Nomination Committee. The four largest
shareholders have appointed the following members to
the Shareholders’ Nomination Committee: Juhani Mäkinen
(Vice Chair of the Board, Jane and Aatos Erkko Foundation),
Antti Herlin (Chair of the Board, Holding Manutas), Robin
Langenskiöld (3rd largest shareholder in Sanoma) and
Rafaela Seppälä (4th largest shareholder in Sanoma). In
its meeting on 16 June 2023, the Committee elected Juhani
Mäkinen as a Chair of the Committee and invited Pekka Ala-
Pietilä, Chair of Sanoma’s Board of Directors, to serve as an
expert in the Committee.
On 8 June, Sanoma announced that the Administrative
Court had rejected Sanoma’s appeal that concerned the
VAT payment decision regarding the tax audits at Sanoma
Media Finland Oy for the years 2015–2018, received from
the Finnish Tax Adjustment Board on 29 April 2021. The
case concerned the treatment of VAT of certain magazines
that were printed in multiple locations in Europe, and
processed in and distributed through a centralised logistics
centre in Norway. Based on the payment decision by the
Tax Adjustment Board, Sanoma paid approx. EUR 25 million
of VAT, penalties and interest in Q3 2021. According to the
Administrative Court’s decision and pursuant to the Tax
Assessment Procedure Act, no tax was refunded to Sanoma.
On 16 December 2022, Sanoma announced it had received
a similar payment decision based on the tax audits for
the years 2019–2021, and paid approx. EUR 11 million of
VAT, penalties and interests in December 2022. Sanoma
also considered these claims for the years 2019-2021 fully
unjustified and appealed the decision to the Finnish Tax
Adjustment Board, where the process is still ongoing. Based
on the Administrative Court’s decision on 8 June 2023,
the VAT claims for the years 2015–2018 and 2019–2021,
amounting to EUR 36 million, were booked as IACs in Media
Finland’s Q2 2023 result, and a positive EUR 5 million
adjustment to the Group’s income taxes. The court decision
had no impact on Sanoma’s free cash flow as the VAT
claims were pre-paid already in 2021 and 2022. Sanoma
has applied for a permission to appeal the 2015–2018
decision to the Supreme Administrative Court. The VAT
regulations have changed as of 1 July 2021 and thus further
tax audits related to the matter are not expected.
SANOMA ANNUAL REPORT 2023
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On 9 March, Sanoma announced that it will issue a EUR 150
million hybrid bond. The funds are used for general corporate
purposes, including strengthening of the balance sheet to
increase the financial flexibility to support the execution of
the strategic plan. The issue date was 16 March. The hybrid
bond bears a fixed coupon interest of 8.000% p.a. until 16
March 2026 payable annually, and, from the Reset Date, a
floating interest rate as defined in the terms and conditions
of the hybrid bond. Paying the interest on the hybrid bond is
at the discretion of the company, however an obligation to
pay the interest arises if the company decides to distribute
dividends. Following the AGM’s decision on 19 April 2023 to
distribute dividends, the obligation to pay the interest arose
and the full annual interest of EUR 12 million was deducted
from equity in Q2 2023. The interest will be paid in March
2024. The hybrid bond does not have a specified maturity
date, but Sanoma is entitled to redeem it at its nominal
amount in whole on the Reset Date or on any interest
payment date thereafter. The hybrid bond is subordinated to
the company's other debt obligations and treated as equity
in Sanoma’s consolidated financial statements prepared in
accordance with the IFRS. It does not confer to its holders the
rights of a shareholder and does not dilute the holdings of
the current shareholders.
On 2 March, Sanoma signed a Sustainability Side Letter
to add sustainability-linked KPIs to its EUR 300 million
Revolving Credit Facility signed in November 2022 with
ten banks. With the addition, a minor part of the pricing
of the loan will be linked to Sanoma’s sustainability
performance in reducing greenhouse gas emissions in line
with Sanoma's commitment to the Science Based Targets
initiative and developing inclusive learning solutions, more
specifically accessibility of digital learning content and
platforms. The KPIs will be measured annually and the
progress will be reported in Sanoma’s Sustainability Report
as well as directly to the lenders.
Strategic Business Units
In 2023, Sanoma Group included two strategic business
units (SBU), Learning and Media Finland.
SANOMA ANNUAL REPORT 2023
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Learning
Sanoma Learning is one of the global leaders in
K12 education, serving about 25 million students
in 12 European countries. Our learning products
and services enable teachers to develop the talents
of every child to reach their potential. We offer
printed and digital learning materials as well as
digital learning and teaching platforms for K12, i.e.
primary, secondary and vocational education, and
we aim to continue to grow our business in Europe
and beyond. We develop our methodologies based
on deep teacher and student insight and truly
understanding their individual needs. By combining
our educational technologies and pedagogical
expertise, we create learning products and services
with the highest learning impact.
Net sales of Learning grew significantly and amounted to
EUR 795 million (2022: 681). Growth of learning content
sales was particularly strong in Spain and Poland, driven
by the successful implementation of the recent curriculum
renewals. In the Netherlands, sales of learning content
increased, while distribution sales declined mainly as low-
value contracts were discontinued as planned. Successfully
implemented price increases also contributed to the strong
organic net sales growth of 6% (2022: 1%). The acquired
Italian and German businesses made a EUR 119 million
(2022: 37) contribution to the net sales. The October 2022
divestment of Eduarte, a Dutch student administration
system provider for vocational education, reduced
net sales.
Operational EBIT excl. PPA increased to EUR 148 million
(2022: 132). Strong organic growth driven by successfully
implemented curriculum renewals in Spain and Poland,
as well as price increases across the learning content
businesses, contributed to the good earnings development.
Earnings improvement was partly offset by inflation
impact particularly in paper, printing and personnel costs.
The acquired Italian and German businesses had a solid
positive contribution on earnings.
EBIT grew to EUR 71 million (2022: 67), supported by
solid operational earnings performance. IACs increased
to EUR -43 million (2022: -32) and consisted of, among
others, restructuring expenses related to Program
Solar, integration costs of recent acquisitions as well as
impairments related to rental book fixed assets and a
write-down of assets related to the German Stark business,
which was divested in early January 2024. PPAs increased
to EUR 35 million (2022: 33) as a result of the acquisition in
Italy and Germany.
Capital expenditure amounted to EUR 34 million (2022:
40) and mainly consisted of growth investments in digital
platforms and ICT.
Net sales by country,
m
€
51
82
61
105
126
152
219
Exact value
The Netherlands
Spain
Poland
Italy
Belgium
Finland
Other countries and eliminations
Total
795m€
1
KEY INDICATORS
EUR million 2023 2022 Change
Net sales 795.2 681.0 17%
Operational EBITDA
1
237.6 212.8 12%
Operational EBIT excl. PPA
2
148.4 131.8 13%
Margin
2
18.7% 19.4%
EBIT 70.6 67.2 5%
Capital expenditure 33.8 40.4 -16%
Average number of
employees (FTE) 2,849 2,717 5%
¹ Excluding IACs
2
Excluding IACs of EUR -43.4 million in 2023 (2022: -32.2) as well
as PPA adjustments and amortisations of EUR 34.5 million in 2023
(2022: 32.5).
Full reconciliation of operational EBITDA and operational EBIT excl.
PPA is presented in a separate table at the end of the Report of the
Board of Directors in chapter Reconciliation of certain key figures.
SANOMA ANNUAL REPORT 2023
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Media Finland
Media Finland is the leading cross-media company
in Finland, reaching 97% of all Finns weekly. We
provide information, experiences, inspiration and
entertainment through multiple media platforms:
newspapers, TV, radio, events, magazines, online
and mobile channels. We have leading brands and
services, such as Helsingin Sanomat, Ilta-Sanomat,
Aamulehti, Me Naiset, Aku Ankka, Nelonen, Ruutu,
Supla and Radio Suomipop. For advertisers, we are
a trusted partner with insight, impact and reach.
decline was attributable to newsprint and TV, while digital
advertising sales grew. Comparable subscription sales
grew slightly, supported by price increases and a minor
increase in the subscription base. The divestment of Supla’s
audiobook operations during the first quarter had a small
adverse impact on the reported subscription sales. In other
sales, the solid performance of the events and festival
business during its high season in the third quarter offset
the decline in external printing sales. Organic net sales
growth was -3% (2022: 0%).
According to the Finnish Advertising Trends survey for
December 2023 by Kantar TNS, the advertising market in
Finland declined by 4% year-on-year on a net basis in 2023.
Advertising decreased in all categories relevant to Sanoma:
by 13% in newspapers, by 15% in magazines, by 4% in
TV, by 2% in radio and by 2% online excluding search and
social media (0% including search and social media).
Operational EBIT excl. PPA decreased to EUR 40 million
(2022: 66) mostly driven by lower advertising sales.
Personnel costs increased due to salary inflation and
normalised bonus provisions in comparison to the lower
previous year levels. However, lower paper, printing and
distribution costs as well as active cost containment
actions supported profitability.
EBIT declined to EUR -8 million (2022: 54) as a result of
lower operational earnings, the EUR 36 million VAT claims
for the years 2015–2021 booked as IACs in Q2 2023 and
costs related to recent minor M&As. Consequently, the IACs
increased to EUR -41 million (2022: -5). PPAs were EUR 7
million (2022: 7).
Capital expenditure amounted to EUR 9 million (2022: 9) and
included mainly investments in technology and investments
in adapting offices to the hybrid way of working.
Net sales by category,
m
€
325
273
Print
Non-print
Total
598m€
1
Net sales by category,
m
€
94
38
246
219
Advertising sales
Subscription sales
Single copy sales
Other
Total
598m€
1
KEY INDICATORS
EUR million 2023 2022 Change
Net sales 597.8 618.1 -3%
Operational EBITDA
1
132.4 150.2 -12%
Operational EBIT excl. PPA
2
39.8 65.8 -40%
Margin
2
6.7% 10.6%
EBIT -8.4 54.3 -115%
Capital expenditure 8.6 8.9 -4%
Average number of
employees (FTE) 2,144 2,160 -1%
1
Excluding IACs
2
Excluding IACs of EUR -41.3 million in 2023 (2022: -4.6) as well
as PPA adjustments and amortisations of EUR 6.8 million in 2023
(2022: 6.9).
Full reconciliation of operational EBITDA and operational EBIT excl.
PPA is presented in a separate table at the end of the Report of the
Board of Directors in chapter Reconciliation of certain key figures.
Net sales of Media Finland declined slightly and
amounted to EUR 598 million (2022: 618). Challenges in
the advertising markets continued throughout the year
resulting in 7% lower advertising sales. The majority of the
SANOMA ANNUAL REPORT 2023
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10
Personnel
In 2023, the average number of employees in full-time
equivalents (FTE) was 5,119 (2022: 5,018). The average
number of employees (FTE) per SBU was as follows:
Learning 2,849 (2022: 2,717), Media Finland 2,144 (2022:
2,160) and Other operations 125 (2022: 141). The increase
in the average number of employees in Learning was
mainly due to the acquired Italian and German business.
At the end of December, the number of employees (FTE) of
the Group was 5,017 (2022: 5,079).
In 2023, the employee benefit expenses grew to EUR 405
million (2022: 356) due to salary inflation, higher bonus
provisions and the increase in the number of employees
resulting from the Italian and German acquisition and
insourcing of certain support operations.
Personnel by SBU,
FTE
, average
2021
2022
2023
Learning
Media Finland
Other operations
5,119
214
125
4,885
5,018
214
141
125
2,072
2,160
2,144
2,849
2,717
2,599
1
Non-financial information
As a leading K12 learning company in Europe and a
leading digital media company in Finland, Sanoma plays
an important role in society and has a positive impact
on the lives of millions of people every day. Sanoma’s
Sustainability Strategy consists of six themes: Inclusive
learning, Sustainable media, Valued people, Trustworthy
data, Vital environment, and Responsible business
practices. With its Sustainability Strategy, Sanoma is
committed to the United Nations’ Sustainable Development
Goals (SDGs). Sanoma’s Code of Conduct and its policies
and practices are built upon global conventions and
commitments and applied across the Group. The policies
are approved by the Board of Directors.
Sanoma’s Sustainability Strategy relates to the themes
covered by the Non-Financial Reporting Directive (NFRD):
environment, employee and social issues, human rights,
and anti-bribery and corruption. In addition to this NFRD
review, more information on sustainability is available in
the Sustainability Report, which is prepared according
to the Global Reporting Initiative (GRI) standards, the
Sustainability Accounting Standard Board’s (SASB)
standards and the Task Force on Climate Related
Disclosures (TCFD) guidelines. Sanoma’s EU Taxonomy
Disclosure can be found in chapter EU Taxonomy disclosure
of this report.
During 2023, Sanoma continued preparations for the
EU’s Corporate Sustainability Reporting Directive (CSRD)
and the reporting requirements of the related European
Sustainability Reporting Standards (ESRS). In September
2023, the members of the Board of Directors and the
Group’s executive management were trained by the
company’s auditor, PwC, on the impact of the CSRD on
sustainability management and reporting, and especially
on the roles and responsibilities of the supervisory bodies.
In late 2023, Sanoma conducted its first double materiality
assessment following the CSRD and the reporting
requirements set in the ESRS. The results of the double
materiality assessment will be finalised during 2024 and
will determine which sustainability topics Sanoma will
include in its CSRD report. Sanoma will publish its first
CSRD report, including the results of the double materiality
assessment, in its Report of the Board of Directors for 2024.
In March 2023, Sanoma signed a Sustainability Side
Letter to add sustainability-linked KPIs to its EUR 300
million Revolving Credit Facility with ten banks, maturing
in November 2026. With the addition, a minor part of the
pricing of the loan is linked to Sanoma’s sustainability
performance in reducing greenhouse gas emissions in line
with Sanoma's commitment to the Science Based Targets
initiative and developing inclusive learning solutions, more
specifically the accessibility of digital learning content and
platforms.
Sanoma’s business model and its role and impacts in
the value chain are described in more detail in the value
creation model. Risks related to non-financial aspects are
included in chapter Risks and risk management. Sanoma’s
governance structure and framework is presented in the
Corporate Governance Statement.
SANOMA ANNUAL REPORT 2023
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11
Value creation model
The value creation model summarises Sanoma’s business model and its role and impacts in the value chain. Sanoma uses
resources and inputs in developing, producing and distributing learning and media content and offering services. The model
also describes the most material outputs of Sanoma’s business operations and their impacts on Sanoma’s audiences,
customers, society and other stakeholders. All figures presented in the model are for the year 2023.
Inputs Business activities Outputs Impacts
Operational
■
Systems and applications
■
Own and external printing facilities
■
Transportation and distribution
■
User data
Human, social & intellectual
■
Committed and diverse personnel
(more than 5,500 employees at the
end of 2023) and freelancers, who
have competence and know-how in
learning and media content creation,
innovation and development
■
Key stakeholder relations and
engagement with teachers,
readers and users to understand
customers’ needs
Financial
■
Equity 799 m€
■
Net debt 640 m€
Natural
■
Energy used 39 GWh
■
Paper used 63,100 tonnes
Operational, intellectual & social
■
Modern learning materials, methods
and digital platforms
■
Independent, high-quality journalism
■
Local entertainment
■
Optimal reach and targeting
for successful and
responsible advertising
■
Customer value by responsible
use of data
■
New products and solutions to meet
the changing customer needs
Human
■
Engaged diverse employees
■
Increased knowledge and know-how
Financial
■
Earnings
1
175 m€
■
Employee benefits 405 m€
■
Net financial items 31 m€
■
Taxes and employer charges 96 m€
■
Free cash flow 105 m€
■
Dividends paid 61 m€
Natural
■
GHG emissions 108,900 tCO
2
e
Learning materials,
methods &
digital platforms
Media content
Advertising
Business
development
Leadership
and talent
management
Data & privacy
Governance framework
Our products have a
positive impact on the
lives of millions of people
every day.
Customers are
at the heart
of everything we do.
We think and work
according to our values.
1
Operational EBIT excl. PPA
■
Our products have a positive impact
on the lives of millions of people
every day
■
Our modern, high-quality materials,
methods and digital platforms
support high learning results and
contribute to the successful and
stable development of societies
■
Our independent, high-quality
journalism supports freedom
of speech and increases
people’s awareness and
intellectual capital
■
We enrich people’s lives by
entertainment contributing to shared
values and experiences
■
We contribute to economic
growth via responsible advertising
and employment
■
We support users' awareness about
the benefits of data and
their trust in our data integrity
■
We play an active role in the
responsible and forward-looking
development of the learning and
media industries
■
We work to minimise the environment
and climate impact across our
value chain
SANOMA ANNUAL REPORT 2023
∙
12
Valued people:
Social and employee matters
Employees are at the centre of Sanoma’s strategy
and operations: this is the only way to ensure the level
of engagement and focus on results required for an
organisation where creativity and people orientation
are key drivers. Our strategic growth ambition requires
excellence, focus and full alignment from the employees,
together with strong capabilities to operate in the current
challenging environment and lead Sanoma to a successful
future. The mix of characteristics of Sanoma as an employer
is quite unique: meaningful work with a strong purpose, a
competitive offering and equal treatment, flexible working
arrangements, a collaborative environment and clear
opportunities to grow and develop.
Sanoma’s Diversity and Inclusion Policy sets the ambition
for a diverse and inclusive workplace with fair treatment
and equal opportunities, non-discrimination, equal pay for
equal roles, and gender-neutral experience. In most of the
Group’s operating countries, equality actions are centred
around local equality and non-discrimination plans. In
2023, Sanoma continued advancing diversity, equity and
inclusion (DE&I) following its long-term development plan
with the aim of improving equal opportunities. Sanoma has
zero tolerance for any form of discrimination, harassment or
bullying at the workplace. Sanoma’s Code of Conduct sets
out the general principles of ethical conduct and Sanoma’s
responsibilities as an employer.
The Human Resources Committee is responsible for the
evaluation of related policies, practices, development
plans and the performance of the key executives.
Sanoma’s human resources management model ensures
well-organised overall management and employee
participation in the development, implementation, and
evaluation of occupational health, safety and well-being.
Outcomes and performance
In 2023, Sanoma employed more than 5,500 people
across 12 countries. Sanoma recruited 642 (2022: 963)
new employees, while 845 (2022: 892) employees left
the company, resulting in an average employee turnover
of 13.3% (2022: 16.5%). The impact of the process and
efficiency improvement program Solar in Learning is
somewhat visible in the number of employees who left the
company, having also an impact on the lower number of
new hires. 42% (2022: 42%) of employees have worked for
Sanoma for more than ten years.
At the end of 2023, 70% (2022: 69%) of Sanoma employees
were covered by collective bargaining agreements.The
commitment to the right of freedom of association and
collective bargaining is embedded into Sanoma’s Code
of Conduct.
Sanoma conducts an annual Employee Engagement Survey
for all its employees. In 2023, the Employee Experience
Index (EEI) increased to 7.5 (2022: 7.3), reaching the long-
term target level and continuing to be above the industry
benchmark level of 7.1. In 2023, the EEI result made up 10%
of Sanoma’s short-term executive management incentives
and the performance outcome on the Group level reached
the maximum level of 150%.
RESULTS OF THE EMPLOYEE ENGAGEMENT SURVEY (EES)
2023 2022 2021
Employee Experience Index (EEI)
1
7.5 7.3 7.3
Response rate % 92 87 90
1
EEI is a 10-item index measured in the annual employee
engagement survey, scale 1–10
By 2030, Sanoma aims for a 50/50 gender balance in
managerial positions (i.e. managers with subordinates). In
2023, 56% (2022: 56%) of all personnel were women and
44% (2022: 44%) men. The share of women who were team
managers increased to 47% (2022: 44%) and directors or
senior management to 45% (2022: 41%). The Board has
set a measurable objective regarding the representation
of both genders: both genders shall be represented in the
Board with the share of the under-represented gender
being at least 40%. Where two candidates are equally
qualified, priority will be given to the candidate of the
under-represented gender. In 2023, 33% (2022: 33%) of
Board members were women.
43%
53%
55%
50%
67%
57%
47%
45%
50%
33%
Female
Male
Board of
Directors
Executive
Management
Team
Directors and
Senior
Management
Managers
with
Subordinates
Employees
Gender diversity,
% at the end of 2023
1
SANOMA ANNUAL REPORT 2023
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13
Trustworthy data:
Privacy and information security
As both Learning and Media Finland offer digital content,
matters related to information security and data
protection are important for Sanoma. Sanoma’s Group-
wide Privacy Programme ensures that the company
continuously develops the responsible use of personal
data in compliance with privacy laws. Sanoma focuses on
fair and transparent practices defined in the Privacy and
Data Protection Policy. Privacy is incorporated into product
and business development through Privacy and Security-
by-Design processes. Sanoma’s Privacy Programme is
supported by a separate Information Security Programme
to build robust information security measures across the
organisation and to protect personal data and other key
data assets. There is a team of information security experts
supporting the implementation of the Information Security
Policy and standards and implementing security controls
consistently across the organisation.
Sanoma actively monitors relevant authority and industry
guidelines related to privacy and information security
and develops guidance and training to implement legal
requirements in practice. Internal Audit reviews the Privacy
and Data Protection Policy implementation on a regular
basis, and compliance is reported on a biannual basis
to the Audit Committee. Third parties processing data on
Sanoma’s behalf are expected to contractually comply with
Sanoma’s Supplier Code of Conduct and Data Processing
Agreement, which defines and instructs suppliers on data
protection measures that need to be implemented on
Sanoma’s behalf.
The interpretation of the ePrivacy Directive remains
unclear across the EU, which is why there have been
various authority enforcement actions during 2021–2023
regarding consent practices for the use of cookies and
similar identifiers. Media Finland has received an authority
decision from the Finnish Transport and Communications
Agency (Traficom) about its cookie practices in 2023,
which was appealed to the Helsinki Administrative Court to
gain clarity on the technical scope and applicability of the
ePrivacy Directive rules.
Outcomes and performance
Sanoma closely follows the number of data breaches in
Learning and Media Finland. During 2023, there were 164
(2022: 196) personal data breaches in total, out of which
none (2022: 0) were considered major. Most of the minor
breaches occurred mainly in Media Finland’s B2C sales
domain, and were typically related to a single customer’s
data. Sanoma did not receive any formal substantiated
complaints, notices, orders or penalties related to personal
data breaches from the regulatory authorities during 2023.
Consumers have the right to ask Sanoma as a data
controller to provide them access to, and to correct or delete
their data, if needed. Media Finland received 120 (2022: 80)
consumer requests for data access, deletion and portability,
out of 1.4 million subscriptions in total.
In 2023, data and privacy related targets made up 10% of
Sanoma’s short-term executive management incentives
on target level. The performance outcome of 148% on the
Group level was close to the maximum level.
Vital environment: Climate and biodiversity
Sanoma’s climate strategy is an important part of its 2030
business strategy, transforming the business to meet the
requirements of a low-carbon economy. In November
2023, the Science Based Targets initiative (SBTi) approved
Sanoma’s near-term science-based emission reduction
targets for its own operations (Scope 1 and 2) and value
chain (Scope 3). This validation confirms that Sanoma’s
climate strategy and business model are compatible with
transitioning to a sustainable economy and limiting of
global warming to 1.5°C in line with the Paris Agreement.
In 2023, 94% (2022: 94%) of Sanoma’s greenhouse gas
emissions derived from its value chain (Scope 3) and 6%
(2022: 6%) from its own operations. Scope 1 covers direct
emissions from owned or controlled sources, including
reserve power consumption and company cars. Scope 2
covers indirect emissions from the generation of purchased
energy consumed in facilities, warehouses and printing
houses used by Sanoma. Scope 3 includes all other indirect
emissions that occur in the company’s value chain.
Sanoma’s target is to reduce Scope 1 and 2 own operations’
GHG emissions by 42% by 2030 from a 2021 base year. In
Scope 3, Sanoma’s target is to reduce GHG emissions from
purchased goods and services, fuel and energy-related
activities, and upstream transportation and distribution
by 38% by 2030 from a 2021 base year. The Scope 3
target applies to categories that have the biggest impact
on Sanoma’s GHG emissions – printed products, services
(e.g. as marketing, consulting, TV production services) and
transportation. In addition to the science-based emission
reduction targets, Sanoma aims to be carbon neutral in all
operations in 2030. Climate-related risks and opportunities
are reported according to the Task Force on Climate-related
Financial Disclosures (TCFD) framework, including a detailed
description of the management of climate-related topics.
In addition to climate action, Sanoma acts to safeguard
biodiversity with a goal that all paper qualities used by
Sanoma originate from sustainable, FSC or PEFC certified
sources. The target was not achieved within the set time
line, the end of 2023, and during 2024, Sanoma will
further intensify cooperation with suppliers to verify the
source of paper.
SANOMA ANNUAL REPORT 2023
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14
Sanoma owns two printing houses in Finland, which
operate according to the ISO 14001 environmental
management system. Sanoma monitors the use of paper
and minimises the use of printing plates, ink, wetting water
additive, water and energy to minimise the greenhouse gas
emissions.
To manage the environmental impacts in the value chain,
Sanoma’s key policies and principles include the Supplier
Code of Conduct and the Paper Procurement Standard. All
business partners and suppliers are expected to uphold
the Supplier Code of Conduct, a key element in Sanoma’s
supplier management system. The Supplier Code of
Conduct is included in the terms of contract with all key
suppliers.
Outcomes and performance
In 2023, Sanoma’s direct and indirect greenhouse gas
(GHG) emissions totalled 108,900 tCO
2
e (2022: 145,100).
Scope 1 and 2 emissions declined by 31% (2022: 7%)
compared to base year 2021. Emissions in Scope 3
categories 1, 3 and 4, linked to the Scope 3 science-based
target, declined by 29% (2022: 8%). Sanoma’s emission
intensity declined despite the growth of the business.
The consumption of electricity, district heating and cooling
in both own and leased properties declined to 39 GWh
(2022: 43) mainly as a result of the AI optimisation of
heating, benefits from the earlier energy efficiency projects
and office floorspace restructurings. In total, 93% (2022:
92%) of electricity and 73% (2022: 57%) of all energy used
was fossil-free. Sanoma’s target was to use only fossil-free
by the end of 2023. The aim is to reach the target in 2024.
In 2023, the total amount on paper used was 63,100 (2022:
70,900) tonnes. Mainly driven by the decline of paper usage
in Media Finland, the amount of paper used declined by
11% (2022: +9%). This follows the prevailing media trend of
consumers moving from printed to hybrid and digital media
products. In Learning, paper used also declined in 2023
despite growing net sales. In 2023, the share of certified
paper was 94% (2022: 94%). The total share of certified
paper was impacted by the scarcity of certified paper
available in the market and Sanoma being unable to ensure
that only certified paper was provided for all orders. For
2024, Sanoma has agreed with newspaper and magazines
suppliers to increase the share of certified paper used
to 100%. In Learning, the share of certified bookpaper
increased as a result of changing paper suppliers and
source. During 2024, Learning will also cooperate with
paper suppliers to ensure only certified paper is used.
SANOMA ANNUAL REPORT 2023
∙
15
GREENHOUSE GAS (GHG) EMISSIONS AND INTENSITY
2023 2022 2021
Change 2023
vs. base year
2021
Scope 1 and 2. Own operations direct and indirect GHG emissions total, tCO
2
e 6,200 8,300 9,000 -31%
Scope 3. Value chain indirect GHG emissions total, categories 1, 3 and 4, tCO
2
e 87,700 113,700 123,100 -29%
GHG emission intensity in own operations: Scope 1 and 2 GHG emissions,
tCO
2
e/employee 1.1 1.5 1.7
GHG emission intensity in own and value chain: Scope 1, 2 and 3 GHG emissions,
tCO
2
e/employee 19.5 25.9 27.7
GHG emission intensity in own and value chain: Scope 1, 2 and 3 GHG emissions,
tCO
2
e/ EUR 1,000 of net sales 0.08 0.11 0.12
Emissions calculated according to the GHG protocol. GHG emissions disclosure is described in detail in the Sustainability Report under
Reporting scope and practices.
ENERGY INTENSITY
2023 2022 Change
Energy consumption of the organisation, MWh 38,500 43,300 -11%
Share of fossil-free electricity used, % 93 92
Share of fossil-free energy used, % 73 57
Energy intensity, MWh/employee 6.9 7.7 -11%
AMOUNT OF PAPER AND SHARE OF CERTIFIED PAPER
tonnes 2023 2022 Change
Newsprint 26,300 30,300 -13%
Magazine paper 4,600 6,000 -23%
Book paper 32,200 34,600 -7%
Total 63,100 70,900 -11%
Share of certified paper used, % 94 94
Includes paper used in Sanoma’s own printing facilities for its own and externally sold print products as well as paper acquired for products
printed by third parties. Book paper is used in Learning and newsprint and magazine paper in Media Finland.
SANOMA ANNUAL REPORT 2023
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16
Responsible business practices: Anti-
bribery, anti-corruption, and potential
adverse human rights impacts
Sanoma is committed to respecting the international
standards on human rights, freedom of speech, labour
conditions, environment and anti-corruption as defined
in the Ten principles of the UN Global Compact, the UN
Guiding Principles on Business and Human Rights and
the Universal Declaration of Human Rights. Sanoma
also commits to respecting the ILO’s Declaration on
Fundamental Principles and Rights at Work. In its
operations and governance, Sanoma follows laws and
regulations applicable in its operating countries, ethical
guidelines set by the Sanoma Code of Conduct (Code) as
well as the Group’s internal policies and standards. Policies
define how Sanoma’s operations are managed and give
a framework to daily work. The Code and key policies are
enforced annually through mandatory e-learning. All new
employees should complete the Code of Conduct e-learning
in their first month of employment. In the newly acquired
companies, the e-learning takes place within 3–6 months
after the acquisition is completed.
Concerns about misconduct or unethical behaviour
may be reported anonymously via Sanoma’s externally
operated misconduct reporting system, Sanoma-WhistleB
hotline, which is available for employees and external
stakeholders. Possible cases of misconduct or unethical
behaviour are also identified during internal audits or
through other internal channels. All cases and conclusions
of investigations are reported to the Ethics and Compliance
Committee and the Audit Committee.
Sanoma’s Anti-Bribery and Corruption Policy gives specific
rules and monetary limits for received and given gifts (EUR
75), and entertainment and hospitality (EUR 100), and sets
out the process to seek further approval through a separate
gift and hospitality tool if necessary. When it comes to
public officials, gifts of any value must not be offered to
or accepted from public officials unless approved by a
management team member.
Sanoma has a Know Your Counterparty (KYC) process
to identify possible risks and non-compliance in doing
business with third parties. Sanoma’s Supplier Code of
Conduct (Supplier Code) sets out the ethical standards
and responsible business principles the suppliers are
required to comply with and expected to also apply to their
employees, affiliates, and sub-contractors. The Supplier
Code is an integral part of Sanoma’s standard contractual
procurement framework, including supplier selection,
evaluation and performance appraisal. The Supplier Code
is based on recognised international standards, principles
and best practices on human rights, labour conditions,
environment and anti-corruption.
Sanoma’s first Human Rights Impact Assessment was
conducted as part of the UN Global Compact (UNGC)
Business and Human Rights Accelerator programme
in 2023. The programme was organised to support
businesses in building a continuous human rights due
diligence process and setting concrete targets to manage
human rights-related risks. The assessment was conducted
following the due diligence process defined in the UN
Guiding Principles on Business and Human Rights and the
OECD Guidelines for Multinational Enterprises.
Outcomes and performance
Sanoma has two Code of Conduct e-learnings: a Code of
Conduct basic e-learning and a Code of Conduct refresher.
In 2021, Sanoma renewed its Code of Conduct e-learnings
and all employees, both existing and new, took the basic
Code of Conduct e-learning. It includes dedicated sections
for general ethics, anti-bribery and corruption rules,
competition law, privacy, security and compliance with
supplier relationship management. As of 2022, the basic
e-learning has been targeted at only new employees. It is
mandatory for all new employees. At the same time, existing
employees are reminded of ethics and principles of the Code
through a mandatory refresher Code of Conduct e-learning,
which is updated annually. In 2023, this refresher e-learning
covered also current topics such as safe corporate culture
and AI. Sanoma currently tracks the completion rate of both
the Code of Conduct refresher e-learning and the basic
e-learning. As the refresher e-learning is targeted at all
existing employees, Sanoma follows the completion rate of
this e-learning as a key performance indicator from 2023
onwards, when the completion rate was 98% (2022: 95%).
In 2023, the cumulative completion rate of the basic Code of
Conduct e-learning, covering the years 2021–2023 and both
existing and new employees, was 96% (2022: 98%). From
2024 onwards, the basic Code of Conduct e-learning rate will
only include new employees.
The supplier selection for new key suppliers follows
Sanoma’s strategic sourcing process, which incorporates the
Supplier Code as a mandatory step in supplier evaluation.
Tracking is done for new suppliers with over EUR 100,000
spend for the reporting year through Sanoma’s centralised
contract lifecycle management system. In 2023, 92% (2022:
86%) of new key suppliers had signed the Supplier Code.
SANOMA ANNUAL REPORT 2023
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17
EU Taxonomy disclosure
Consolidated disclosures pursuant
to Art. 8 Taxonomy Regulation
The EU’s Sustainable Finance Classification System
(‘Taxonomy’) is a system for defining environmentally
sustainable economic activities. According to the
Taxonomy, an economic activity is classified as
environmentally sustainable if it contributes substantially
to one or more of the six environmental objectives, does
no significant harm (DNSH) to the other environmental
objectives (i.e. complies with DNSH technical screening
criteria in the delegated acts supplementing the Taxonomy
Regulation) and complies with Minimum Safeguards
related to the OECD MNE Guidelines, the UNGPs, the
Declaration of the International Labour Organisation
on Fundamental Principles and Rights at Work and the
International Bill of Human Rights. The six environmental
objectives defined by the EU are:
1) climate change mitigation,
2) climate change adaptation,
3) sustainable use and protection of water and marine
resources,
4) transition to a circular economy,
5) pollution prevention and control and
6) protection and restoration of biodiversity and
ecosystems.
For 2023, the eligibility of all six environmental objectives,
with three KPIs – turnover, capex and opex – is reported
following the Taxonomy accounting policy. In addition,
alignment is reported for climate change mitigation and
adaptation.
The Taxonomy currently focuses on the most carbon-
intensive industries, green energy and innovations.
Sanoma’s environmental footprint is not significant, and as
a learning and media company, only a few of its businesses
are defined as Taxonomy-eligible activities, while none
are Taxonomy-aligned. Sanoma’s Taxonomy disclosure
is based on the third annual assessment of Taxonomy-
eligibility and second annual assessment of Taxonomy-
alignment. The assessment was conducted in internal
workshops with representatives from the businesses,
sustainability and finance operations.
According to Sanoma’s assessment, the following
economic activities are identified as eligible under objective
2) climate change adaptation: 8.2 Computer programming,
consultancy and related activities (digital learning
businesses) and 8.3 Programming and broadcasting
activities (TV and radio broadcasting business in Finland).
Economic activities 13.1 Creative, arts and entertainment
activities (live events business in Finland) and 13.3 Motion
picture, video and television programme production,
sound recording and music publishing activities (music
publishing business in Finland) were also found to be
potentially eligible for Sanoma, but to avoid double
counting, Sanoma reports all eligible turnover, capex and
opex related to Nelonen Media and these activities under
economic activity 8.3. According to Sanoma’s assessment,
the Taxonomy’s economic activity 11 Education, only refers
to the organising of public and private education, and thus
does not cover Learning’s business. The Taxonomy’s list
of potentially eligible activities does not include any news
media related economic activities and therefore Sanoma’s
news media business is not considered as an eligible
economic activity.
Sanoma’s eligible activities only include potential
substantial contribution to objective 2) climate change
adaptation. None of Sanoma’s eligible activities were
identified to substantially contribute to 2) climate change
adaptation and therefore none of Sanoma’s activities are
Taxonomy-aligned. None of Sanoma’s eligible activities
include any DNSH criteria. Sanoma has reviewed the
Minimum Safeguards criteria related to the Taxonomy
and complies with respect to human rights, bribery and
corruption, taxation and fair competition.
The Taxonomy regulation and reporting requirements
will evolve in the coming years and Sanoma will continue
annually updating its Taxonomy assessment according to
the requirements.
SANOMA ANNUAL REPORT 2023
∙
18
Taxonomy accounting policy
In Sanoma’s reporting, Taxonomy-eligible and Taxonomy-
aligned turnover, capex and opex are only accounted once,
although some taxonomy-eligible businesses would be
eligible under several economic activities.
Taxonomy-eligible and aligned turnover: Turnover
of Taxonomy-eligible economic activities is reported in
relation to the Group’s total net sales (Note 2.2), which
means the turnover of products and services associated
with Taxonomy-eligible economic activities is divided
with the Group’s consolidated net sales. The Taxonomy-
eligible turnover includes net sales of activity 8.3. Net sales
of economic activity 8.2. is not included in the Taxonomy-
eligible net sales, because this activity is not an enabling
activity. Enabling economic activities are a sub-category of
environmentally sustainable economic activities under the
Taxonomy Regulation, which do not substantially contribute
to climate change mitigation through their own performance.
Taxonomy-aligned turnover would be calculated following
the same formula as eligible activities, if the activity-specific
substantial contribution criteria would be met.
Taxonomy-eligible and aligned capital expenditure:
Capex of Taxonomy-eligible activities is reported in relation
to the Group’s total capex. Total capex includes additions
in the Group’s tangible and intangible assets during the
year. The Taxonomy-eligible capex includes additions
in the tangible and intangible assets of all Taxonomy-
eligible activities. According to the Taxonomy regulation,
the total acquisition value of TV programming rights is
considered as Taxonomy-eligible capex under the activity
8.3 forming a major part of Sanoma’s taxonomy-eligible
capex. In Sanoma’s financial reporting, the acquisition of TV
programming rights is excluded from the cash-based capex.
Taxonomy-aligned capex would be calculated following the
same formula as eligible activities, if the activity-specific
substantial contribution criteria would be met.
Taxonomy-eligible and aligned operating expenses:
Opex of Taxonomy-eligible activities is reported in relation
to net opex. Net opex deviates from the Group’s operating
expenditure and includes direct non-capitalised costs
related to the use of Sanoma’s taxonomy-eligible economic
activities’ assets. The direct non-capitalised costs are
related to TV broadcasting, digital production, purchased
digital traffic, research and development (incl. related
employee benefit expenses), ICT development and short-
term leasing payments. Opex of Taxonomy-eligible activity
8.2 includes non-capitalised R&D costs (incl. employee
benefit expenses). Opex of Taxonomy-eligible activity
8.3 includes distribution expenses and direct employee
expenses of broadcasting activities. Taxonomy-aligned
opex would be calculated following the same formula
as eligible activities, if the activity specific substantial
contribution criteria would be met.
SANOMA ANNUAL REPORT 2023
∙
19
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering the year 2023
Financial year 2023 2023 Substantial contribution criteria
DNSH criteria
(Does Not Significantly Harm)(h)
Economic activities (1)
Code
(a) (2)
Turnover
(3)
Proportion
of Turnover,
2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion
of Taxonomy
aligned (A.1.)
or eligible
(A.2.)
turnover,
2022 (18)
Category
enabling
activity (19)
Category
transitional
activity (20)
MEUR %
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c) Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Activity 8.2 Computer
programming, consultancy
and related activities CCA 8.2 0 0% N/EL N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0%
Activity 8.3 Programming
and broadcasting activities CCA 8.3 0 0% N/EL N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0% E
Turnover of
environmentally
sustainable activities
(Taxonomy-aligned) (A.1) 0 0% % 0% % % % % Y Y Y Y Y Y Y 0%
Of which Enabling 0 0% % 0% % % % % Y Y Y Y Y Y Y 0% E
Of which Transitional 0 0% % Y Y Y Y Y Y Y 0% T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
Activity 8.3 Programming
and broadcasting activities CCA 8.3 179 13% N/EL EL N/EL N/EL N/EL N/EL 14%
Turnover of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2) 179 13% % 13% % % % % 14%
A. Turnover of Taxonomy eligible
activities (A.1+A.2) 0 0% % 0% % % % % 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-
non-eligible activities 1,214 87%
TOTAL 1,393 100%
SANOMA ANNUAL REPORT 2023
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20
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering the year 2023
Financial year 2023 2023 Substantial contribution criteria
DNSH criteria
(Does Not Significantly Harm)(h)
Economic activities (1)
Code
(a) (2)
CapEx
(3)
Proportion
of CapEx,
2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion
of Taxonomy
aligned (A.1.)
or eligible
(A.2.)CapEx,
2022(18)
Category
enabling
activity (19)
Category
transitional
activity (20)
MEUR %
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c) Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Activity 8.2 Computer
programming, consultancy
and related activities CCA 8.2 0 0% N/EL N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0%
Activity 8.3 Programming
and broadcasting activities CCA 8.3 0 0% N/EL N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0% E
CapEx of environmentally
sustainable activities
(Taxonomy-aligned) (A.1) 0 0% % 0% % % % % Y Y Y Y Y Y Y 0%
Of which Enabling 0 0% % 0% % % % % Y Y Y Y Y Y Y 0% E
Of which Transitional 0 0% % Y Y Y Y Y Y Y 0% T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
Activity 8.2 Computer
programming, consultancy
and related activities CCA 8.2 7 4% N/EL EL N/EL N/EL N/EL N/EL 3%
Activity 8.3 Programming
and broadcasting activities CCA 8.3 65 33% N/EL EL N/EL N/EL N/EL N/EL 18%
CapEx of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2) 72 37% % 37% % % % % 21%
A. CapEx of Taxonomy eligible
activities (A.1+A.2) 0 0% % 0% % % % % 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-
non-eligible activities 125 63%
TOTAL 197 100%
SANOMA ANNUAL REPORT 2023
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21
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering the year 2023
Financial year 2023 2023 Substantial contribution criteria
DNSH criteria
(Does Not Significantly Harm)(h)
Economic activities (1)
Code
(a) (2)
OpEx
(3)
Proportion
of OpEx,
2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion
of Taxonomy
aligned (A.1.)
or eligible
(A.2.)OpEx,
2022(18)
Category
enabling
activity (19)
Category
transitional
activity (20)
MEUR %
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c) Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Activity 8.2 Computer
programming, consultancy
and related activities CCA 8.2 0 0% N/EL N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0%
Activity 8.3 Programming
and broadcasting activities CCA 8.3 0 0% N/EL N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0% E
OpEx of environmentally
sustainable activities
(Taxonomy-aligned) (A.1) 0 0% % 0% % % % % Y Y Y Y Y Y Y 0%
Of which Enabling 0 0% % 0% % % % % Y Y Y Y Y Y Y 0% E
Of which Transitional 0 0% % Y Y Y Y Y Y Y 0% T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
EL; N/
EL (f)
Activity 8.2 Computer
programming, consultancy
and related activities CCA 8.2 13 31% N/EL EL N/EL N/EL N/EL N/EL 30%
Activity 8.3 Programming
and broadcasting activities CCA 8.3 11 25% N/EL EL N/EL N/EL N/EL N/EL 21%
OpEx of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2) 24 56% % 56% % % % % 51%
A. OpEx of Taxonomy eligible
activities (A.1+A.2) 0 0% % 0% % % % % 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-
eligible activities 19 44%
TOTAL 43 100%
SANOMA ANNUAL REPORT 2023
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Risks and risk management
Sanoma is exposed to numerous risks and opportunities,
which may arise from its own operations or the changing
operating environment in the short-term or long-term.
Sanoma divides its key risks into four main categories:
strategic, operational, non-financial and financial risks.
The most significant risks that could have a negative
impact on Sanoma’s business, performance or financial
status are described below. Under the different categories,
the most material risks are presented first. In addition to
the risks presented in this review, currently unknown or
immaterial risks may arise or become material in the future.
Significant near-term risks and uncertainties are reported
on a continuous basis in each Interim Report.
Sanoma’s Enterprise Risk Management Policy defines
the Group-wide risk management principles, objectives,
roles, responsibilities and procedures also covering
sustainability and climate-related risks. The President
and CEO, supported by the Executive Management Team,
is responsible for defining risk management strategies,
procedures and setting risk management priorities. SBUs
are responsible for identifying, measuring, reporting and
managing risks. The updated risk assessment results, with
related ongoing or planned mitigation actions, are reported
to the Audit Committee and, further to the Board of Directors
twice a year. Risk management and internal control
policies, processes, roles and responsibilities are presented
in more detail in the Corporate Governance Statement and
in the Sustainability Report.
Strategic risks
Mergers & Acquisitions (M&A)
Sanoma’s strategic aim is to grow through acquisitions
primarily in Learning, but to a lesser extent also in Media
Finland. In Learning, Sanoma is looking for growth
opportunities in K12 learning services with the current
focus on synergistic in-market acquisition opportunities
i.e. expanding its K12 offering in the current operating
countries. In Media Finland, Sanoma is interested in
synergistic acquisitions in the chosen strategic focus areas
of news and feature, entertainment or B2B marketing
solutions. However, Sanoma may not be able to identify
suitable M&A opportunities or suitable targets may not
be available at the right valuation. Even if suitable M&A
opportunities were identified and feasible, there are several
risks related to M&A transactions. M&A risks may relate
to unidentified liabilities of the target companies or their
assets, changes in the market conditions, the inability
to ensure the right valuation and effective integration of
acquisitions or that the anticipated economies of scale
or synergies do not materialise. Future M&A transactions
may also be financed with debt, increasing Sanoma’s
overall indebtedness, which may, in turn, adversely affect
the availability, costs or other terms of future financing.
Regulation of M&A activity by competition authorities may,
among other things, also restrict or delay the Group’s ability
to engage in M&A transactions.
In 2023, the Group announced a few small transactions,
including e.g. the acquisition of Marva Media’s regional
news media business in Southwest Finland. The success of
the recent acquisitions largely depends on the timely and
efficient integration of the business operations, processes
and ways of working. The process of integrating the
acquired businesses into Sanoma’s existing businesses
involves uncertainties, and there can be no assurance that
Sanoma will be able to integrate the businesses in the
manner or within the timeframe anticipated and achieve
the anticipated benefits of the acquisitions.
To focus its business on areas where it has clear
competitive advantages and leading market positions,
the Group has divested its non-core businesses in recent
years. For example, in 2023 the Group completed the
divestments of the Supla audiobooks business in Finland
and the early morning newspaper delivery business in the
Southern Finland region, Early Bird. At the very beginning
of 2024, Sanoma divested its small exam preparation
business in Germany, Stark, which had become part of the
Group in connection to the acquisition of Pearson’s local
K12 learning content business in Italy in August 2022, as
well as its majority holding in Netwheels Oy. Sanoma may
divest additional businesses in order to further focus its
operations, or for other reasons. Any future divestments
may be affected by many factors, such as the availability
of bank financing to potential buyers, interest rates and
competitors’ capacity, all of which are beyond the Group’s
control, and may also lead to exposure to indemnity claims.
There can be no assurance that the Group will succeed
profitably in the divestment of certain assets or that such
divestments will be possible on acceptable terms, or at
all. Such divestments may also require attention from the
Group’s management, taking its attention away from the
management of ongoing business.
Sanoma is mitigating these risks by actively maintaining its
industrial networks, proactively seeking potential targets,
working with well-known parties in transaction processes
and following its internal policies and procedures in the
decision-making, organisation and follow-up concerning
M&A transactions. Despite this, there can be no assurance
that the acquisitions will be successful and that Sanoma
will achieve its strategic aim of acquisition-based growth.
SANOMA ANNUAL REPORT 2023
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Changes in customer preferences,
technology and industry trends
In learning, digital and blended (print and digital) learning
materials, methods and platforms have gradually been
gaining ground. Blended learning materials are seen to
optimally support learning outcomes, although the usage
of digital learning tools has continued to increase across
most markets. In the learning material distribution services,
the shift towards digital is being paralleled by a move from
renting and selling books towards subscription-based
commercial models, most notably in the Dutch market.
Both of these trends and/or their acceleration or slow-
down may have an effect on the operational performance,
financial performance and/or financial position of Learning.
In addition, Learning is, by nature, subject to seasonal
fluctuation, with most of the sales and earnings accrued
during the second and third quarters when the new school
year starts, which further increases the pressure to be able
to respond to changes in a timely manner.
On top of the key trends and market fluctuations over the
last years, generative AI has been introduced to the market,
providing Learning both opportunities and uncertainties.
Applications of generative AI may bring efficiency gains
in core processes related to, for example, method creation
and software development. In learning content, generative
AI provides opportunities for personalisation, underpinning
the value of curated, high-quality content published and
owned by Sanoma, albeit potentially adding competitive
pressure. As the speed in which new technologies develop
and penetrate the market is uncertain, there can be no
assurance that Learning’s development work would keep it
ahead or aligned with market trends.
With the continued development of alternative forms
of media, particularly digital media, the Group’s media
businesses and the strength of its media brands depend on
its continued ability to identify and respond to constantly
shifting consumer preferences and industry trends, as
well as its ability to develop new and appealing products
and services in a timely manner. Ongoing digitalisation is
currently the driving force behind many of these changes,
and the increasing use of mobile devices is changing
the way people consume media. Print news media
consumption is transforming to digital channels and
viewing time of free-to-air television is decreasing while
online video-on-demand (VOD) consumption is increasing.
The demand for advertising derived from printed media
has also been in decline in recent years as advertisers
shift to digital channels, and this trend is expected to
continue. However, even the digital advertising ecosystem
is changing. For example, advertisers’ preference for
performance-based advertising or the deprecation of third-
party cookies may result in changes in business models
related to the sales of digital advertising.
In Media Finland, generative AI provides significant
opportunities for productivity improvements and
possibilities to accelerate technology development.
Generative AI also supports journalism in creating new
content and formats to reach more audiences and
enhances customer communication and services. Risks
with generative AI include misuse of the Group’s data and
content. AI advancements also pose risks to media brand
trust by creating seemingly credible content or increasing
the volume of AI-generated content that starts to compete
with curated content.
In the Group, generative AI risks are mitigated by having
up-to-date AI principles and employee instructions, the
right technology in place upfront, and by closely following
market developments. Sanoma has several ongoing
projects within productivity, content production and
customer communication that enable it to capture potential
upsides and mitigate potential risks of generative AI.
To mitigate these risks, Sanoma is continuously developing
digital and hybrid learning and media products and
services. In addition, Sanoma maintains close and long-
term relationships with schools, teachers and governing
bodies and typically sells digital solutions and printed
materials together. The wide cross-media offering provides
Sanoma with a solid foundation to constantly develop its
diverse offering to advertisers. However, there can be no
assurance that Sanoma will be able to adjust to and meet
the changes in consumer preferences, industry trends
and technological developments in the future. Failure to
respond to market changes by developing and/or adopting
new products and services, through both established and
new platforms, on a competitive and profitable basis may
result in the Group losing market share in its established
businesses to competitors.
SANOMA ANNUAL REPORT 2023
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24
Competitive environment
and threat of new entrants
The learning and media markets in which the Group
operates are highly competitive and include many
regional, national and international companies. In media,
competition is affected by the level of consolidation within
the Group’s markets as well as by the development of
alternative distribution channels, especially for digital
products and services offered by the Group. Competition
may arise from large international media companies
entering new geographic markets or expanding the
distribution of their products and services to new
distribution channels. Risks may arise if competitors are
faster than the Group to adopt new technologies, such as
generative AI and alternative forms of media or digital
destinations, catering to both consumer and advertiser
needs. Additionally, consolidation within relevant markets
may increase existing competition or give rise to new
entrants in the market. In Learning, there is a similar risk
stemming from large international media companies,
digital entrants, educational technology companies, open
educational resources, user-generated content or digital
tools. Furthermore, Learning is exposed to competition also
from traditional publishers in different countries.
To mitigate these risks, the Group’s ability to compete
effectively will require continuous efforts by the Group in,
among other things, sales and marketing, cost innovation
and investment in technology to respond to changes in the
markets. Although the Group currently holds strong positions
in its key markets, there can be no assurance that it will be
able to maintain these positions or that these positions will
enable the Group to compete effectively in the future.
Changes in applicable laws,
regulations or the political environment
The Group’s operations are subject to various laws and
regulations in the countries in which the Group operates
and changes in such laws and regulations could have a
material effect on Sanoma’s ability to conduct its business
effectively. For example, changes in education or digital
platforms-related regulation could have a material effect
on Sanoma’s commercial propositions, technology or
content investment needs, or financial performance.
Although legislation related to learning is typically country-
specific, which limits the magnitude of said risk at the Group
level, Sanoma faces an increased legislative risk in Poland
and Spain, both of which are large markets and where
broad or abrupt education-related legislative changes
could have a material effect on Learning. The introduction
or delay, pace, scope and timing of changes in education-
related legislation, or their reflections in public educational
spending, in the markets in which Sanoma operates –
most notably in Poland or Spain, but potentially also other
markets – may also influence the performance of Learning
as a whole. In media, any adverse developments affecting
the freedom of the press or source protection could have an
adverse effect on the performance of Media Finland.
Changes in taxation as well as in the interpretation of tax
laws and practices may have an effect on the operations of
the Group or on its financial performance (e.g. value-added
tax (VAT) applicable to Sanoma’s printed, digital and hybrid
products).
Tightening of consumer protection-related laws may
necessitate the amendment of some consumer media
sales business models. Furthermore, the deterioration
of publishers’ and broadcasters’ copyright protection
or increase in legal obligations (such as reporting or
monetary obligations) towards original authors of
copyright protected works affects the Group’s ability to
provide its customers with new products and services and
may increase costs or impact the valuation of balance
sheet items related to acquiring and managing copyrights.
Data is an increasingly essential part of Sanoma’s
business, putting privacy and consumer trust at the core
of the Group’s daily operations. Regulatory changes and
new guidance by authorities or regulatory enforcement
actions regarding the use of consumer or cookie data for
commercial purposes could, therefore, have an adverse
effect on Sanoma’s ability to utilise data in its business.
For example, the proposed regulation of the European
Parliament and of the Council concerning the respect for
private life and the protection of personal data in electronic
communications and repealing Directive 2002/58/EC
(Regulation on Privacy and Electronic Communication) may
require consent for telesales for subscriptions and may also
have a negative impact on cookie-related usage and thus
demand for digital advertising. This would have an effect
on business-to-consumer media sales and business-to-
business advertising in both the news and VOD-businesses.
The Group may also be faced with the risk of overregulation
on the European or national levels, or different, potentially
tighter national interpretations of the EU-level regulation in
its operating countries. In particular, this risk is seen to relate
to sustainability, compliance, intellectual property rights,
data protection, digital transformation, consumer protection,
accessibility and artificial intelligence (AI). Regarding AI, the
EU has reached a political agreement on the proposed AI Act,
expected to come into effect in 2026 and potentially having
some impacts on certain products of Learning.
To mitigate these risks, Sanoma aims to anticipate any
changes by closely monitoring the regulatory developments
and adapting its business models accordingly. However,
SANOMA ANNUAL REPORT 2023
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25
implementing changes to its business models in order to
adapt to new regulations is likely to impose additional costs
and may take time. Violations of any applicable laws or
regulations could also result in penalties and fines.
General economic and market conditions
The general economic and political conditions in Sanoma’s
operating countries and overall industry trends could
influence Sanoma’s business activities and operational
performance. In addition to the increasing global risks,
including geopolitical unrest, the fluctuating costs and
supply of global commodities, such as energy, and overall
inflation, general economic conditions may be affected
by various additional events that are beyond Sanoma’s
control, such as natural disasters or pandemics. Although
Sanoma’s diversified and well-balanced business portfolio
to a certain extent mitigates this type of risk, it may cause
disruption to Sanoma, its employees, markets, suppliers
and customers, which could have a material adverse effect
on Sanoma’s business, operating model, financial condition
and/or results of operations.
In general, long- and mid-term cyclicality associated with the
performance of Learning relate to the development of public
and private education spending especially during curriculum
renewals, and may affect the demand of Learning content
year-on-year. Moreover, changes in the overall economic
environment can affect Learning’s cost base, particularly
the cost and availability of paper and printing, as well as
of personnel. Such changes could also affect demand in
segments, where the parents or students themselves (rather
than the government or schools) pay for learning materials.
e.g. by increasing the demand for second-hand books. Such
segments constitute a minority of Learning’s business.
In Media Finland, risks associated with business and
financial performance typically relate to advertising
demand and consumer spending. A significant proportion
of the Group’s sales is derived from advertising sales in
magazines, newspapers, television, radio and digital
media as well as circulation sales of printed media. Both
of these sources of income are sensitive to changes in the
general economic environment and consumer confidence,
with advertising sales being historically somewhat more
sensitive to economic downturns than circulation sales,
particularly in subscription sales. Moreover, changes in the
overall economic environment can affect Media Finland’s
cost base, particularly the cost and availability of paper
and printing, as well as of personnel and distribution costs.
In addition to increasing Media Finland’s direct operating
costs, higher cost inflation may have an adverse indirect
impact on the demand for its products and services.
Changes in the geopolitical situation, particularly in
Finland, could have an indirect impact on the business
operations and financial performance of Sanoma’s
businesses in Finland.
Sanoma’s diverse business portfolio and actions to manage
the risks and costs related to prevailing and expected
economic conditions, partially mitigate these risks. In
2023, approx. 57% (2022: 52%) of Sanoma’s net sales was
derived from learning, approx. 20% (2022: 22%) from single
copy or subscription sales, approx. 3% (2022: 4%) from
print advertising, approx. 12% (2022: 14%) from non-print
advertising and approx. 7% (2022: 7%) from other sales.
Operational risks
Changes in the economic conditions
Changes in the general economic conditions may
be reflected in Sanoma’s operational and financial
performance. Cost inflation may continue to have some
impact on Sanoma’s operating costs. The availability of
newsprint paper, the paper quality most used by Sanoma,
has recently remained at a good level. Weakened confidence
among Finnish consumers, impacted by the war in Ukraine
as well as inflation and high interest rates, may have an
adverse impact on the demand for Media Finland’s products
and services. In addition, the weakening of the euro against
main currencies, including the U.S. dollar, may increase the
cost of the goods and services Sanoma buys in currencies
other than euro (e.g. hosting and TV content) and poses a
risk to Sanoma’s financial performance, albeit part of the
currency transaction risk is hedged with forward contracts.
Sanoma can partly mitigate these impacts on its financial
performance through, for example, costs management
actions. These include Program Solar in Learning, which is
expected to bring an annual EUR 55 million benefits from
2026 onwards. Failure in implementing the cost savings
actions related to Program Solar may have an impact on
Sanoma’s financial performance in the coming years.
SANOMA ANNUAL REPORT 2023
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Data and privacy risks
Data is an increasingly essential part of Sanoma’s
products and services in both Learning and Media
Finland. The Group holds large volumes of personal data,
including that of employees, customers and, in its digital
learning businesses, students and teachers. Sanoma is
subject to the General Data Protection Regulation ((EU)
2016/679, “the GDPR”), which sets strict requirements for
implementing data subject rights, and for companies to
demonstrate their accountability for complying with the
regulation. Non-compliance with the GDPR in Sanoma’s
business and operations, or potential inadequacy of
the data protection processes and practices may cause
problems, difficulties or additional costs to Sanoma. Any
infringement of the GDPR could adversely affect Sanoma’s
reputation. Furthermore, under the GDPR, a national data
protection authority is vested with the power to impose
corrective actions, such as temporary or definitive bans
on processing, and to impose administrative fines for
breaches of the GDPR up to EUR 20 million or 4% of the
total worldwide annual turnover of a company. The
Directive on privacy and electronic communications
2002/58/EC also imposes requirements for online data
collection and use. There have been various authority
enforcement actions across the EU since 2021 regarding
consent practices for the use of cookies and similar
identifiers. While these, along with the expected ePrivacy
Regulation, are benefiting the media and advertising
industry in the long-term by creating a level playing field
for small media players, in the short-term they could also
have a negative impact on media through additional
costs. Although Sanoma runs a privacy programme
that monitors development and enforcement of privacy
regulations, there can be no assurance that such
measures will be successful in ensuring compliance with
privacy laws, which could lead to penalties, significant
remediation costs and reputational damage to Sanoma.
In addition, Sanoma is exposed to potential data breaches
resulting from unauthorised or accidental loss of or access
to personal data managed by Sanoma or by third parties
processing data on Sanoma’s behalf. For example, Sanoma’s
or its third-party suppliers’ systems could be vulnerable to
unauthorised access, misuse, breaches due to employee
error or malfeasance, computer viruses, attacks by hackers
or other similar threats. Data is key in the development
of Sanoma’s products and services, as it enables content
and learning services to be better tailored to the needs of
customers, such as by providing individualised learning
paths and even more compelling media content. Continuing
the use of data in the future is dependent on maintaining
the trust of customers, and potential data breaches could
significantly undermine this trust.
To mitigate these risks, Sanoma’s key privacy
implementation processes include conducting privacy
impact assessments, data lifecycle management,
negotiating data processing agreements with third parties,
information security measures to protect data, data breach
management procedures and the implementation of data
subject rights. However, there can be no assurance that data
breaches will not occur despite these efforts to prevent such
breaches or, in the event that breaches occur, that Sanoma
will be able to mitigate the effects of such a breach. This
could lead to reputational damage which could ultimately
lead to Sanoma’s inability to effectively compete for future
business and to potential cancellations of existing contracts.
Information and Communications
Technology (ICT)
Functioning and reliable information and communications
technology systems are integral to the Group’s businesses
and operations. The systems include online services, digital
learning platforms, video-on-demand platforms, newspaper
and magazine subscriptions, advertising and delivery
systems, as well as various internal systems for production
control, customer relations management and supporting
functions. Information and communications technology
security risks may relate to confidentiality, integrity and/or
the availability of information, as well as to reliability and
compliance of data processing. The risks can be divided
into physical risks, such as fire, sabotage and equipment
breakdown, and logical risks, such as information security
risks, including increased threat of malware and cyber-
attacks, hacking of personal data or other sensitive data
assets, and employee or software failure. Additionally, the
fragmentation of the data landscape and legacy systems
or failure in meeting customer needs or local requirements
when developing or harmonising the digital offering could
cause a delay or hinder the Group’s digitalisation.
To mitigate these risks, Sanoma has continuity and disaster
recovery plans in place for its critical systems and clear
responsibilities regarding information and communications
technology security. Information security controls include the
use of threat intelligence capabilities, cyber security incident
detection capabilities, identity and access management
solutions, log management capabilities and the use of
external information security audits. Sanoma’s insurance
programme provides partial coverage for insurable
information security risk. Although Sanoma has several
information security control measures in place, there can
be no assurances that such measures will be adequate
to prevent failures of one or more of the Group’s essential
information and communications technology systems, which
could cause disruptions to its business and reputational
damage resulting from possible data breaches.
SANOMA ANNUAL REPORT 2023
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Risks related to third parties
A broad network of third parties in a wide variety of countries
plays an integral role in Sanoma’s daily operations. Third-
party suppliers in Sanoma’s value chain include, among
others, technology solution and service providers, paper,
print and logistics suppliers as well as content providers
for both Learning and Media Finland. Therefore, risks
relating to the availability, price, quality, security and
delivery schedules of third-party suppliers are material for
Sanoma’s operations. These include, during recent years,
the increased use of external cloud-based services, the
functioning of which is strongly dependent on the usability
and accessibility of global internet connections.
The expanding global supply chain risks that are a
combination of, for example, geopolitics, the post-
pandemic situation, the economic environment, high
inflation and production factors may result in much tighter
supply market conditions and availability concerns.
The current global geopolitical and economic situation
may also cause delivery delays and cost overruns. To
mitigate the risks inherent in its supply chain, Sanoma
has diversified its supplier base with a targeted
selection of regional and local suppliers and developed
response strategies should disruption materialise. Close
cooperation with the suppliers helps Sanoma to assess and
understand which suppliers are most at risk under different
circumstances.
Sanoma utilises freelancers to support its own editorial
staff in content creation. The status of freelancers and
related copyright legislation development may vary by
authority and country, but no individual case is estimated
to become material unless it escalates to concern a large
group of freelancers working for Sanoma. The development
in the status of freelancers or the related regulation may,
however, also increase the related costs.
In addition, certain advertising and marketing efforts are
executed with the help of third parties. The advertising
technology ecosystem consists of players, such as
Google and Facebook, that have dominant market power,
which may lead to an imbalance in their agreements
with Sanoma. Sanoma participates in a class action by
European publishers against Google regarding abuse of
Google's dominant position in the advertising technology
ecosystem.
Sanoma’s daily business is dependent on its ability to
identify sources of supply that meet Sanoma’s standards
and identified business, technology and sustainability
requirements, although Sanoma is not dependent on any
individual suppliers. To mitigate third-party-related risks,
Sanoma follows the guiding principles of supplier risk
management set out in the Group’s Procurement Policy,
Supplier Code of Conduct and legal framework. Most
significant suppliers are selected through competitive
bidding and qualification processes. Suppliers and other
third parties are subject to a Know Your Counterparty
(KYC) process to identify any risks related to anti-bribery,
sanctions regulations and other issues.
With suppliers most relevant to Sanoma’s business
continuity, Sanoma has set up steering practices and
supplier engagement to jointly mitigate identified risks.
These include, for example, increasing the paper inventory
and agreeing on steps to avoid problems with newspaper
delivery. If any of the key suppliers had to be replaced
abruptly, it could cause temporary business interruptions
and/or increase costs.
Despite the processes and risk mitigation activities
that Sanoma has in place, Sanoma may not be able to
ensure that its suppliers or other third parties comply
with all relevant regulations and its internal policies
and standards, which could, for example, lead to legal
processes and/or reputational damage. In addition,
cooperation with third parties may expose Sanoma to
certain data-related risks.
Intellectual Property Rights (IPRs)
The Group’s products and services largely consist of
intellectual property delivered through a variety of media.
Key intellectual property rights (“IPRs”) related to Sanoma’s
products and services are copyrights including rights to
make the copyright protected works available to the public,
trademarks, business names, domains and know-how
owned and licensed by the Group. In addition, the Group
conducts business in certain countries where the extent
of effective legal protection and enforcement of IPRs may
differ and, therefore, cause uncertainty. Moreover, despite
trademark and copyright protection, third parties may copy,
commercially exploit, infringe on or otherwise profit from
the Group’s proprietary rights without authorisation. These
unauthorised activities may be more easily facilitated by
the Internet and generative AI tools. The scarcity of Internet
and generative AI-specific legislation relating to trademark
and copyright protection or enforcement of rights, as well
as effective and concrete means to intervene with online
IPR infringements, create an additional challenge for the
Group in protecting its proprietary rights relating to its
online business processes and other digital rights, and
failure to protect its proprietary rights or IPRs could result
in the loss or diminution in value of these rights. Sanoma
also uses a high volume of third-party IPRs in its operations,
which exposes it to possible infringement claims from third
parties. Such claims could result in burdensome litigations
and additional costs as well as adversely affect Sanoma’s
reputation, which could, in turn, have a negative impact on
Sanoma’s operations.
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To mitigate these risks, the Group relies on copyright,
trademark and other intellectual property laws as well as
its Group-wide IPR Policy and procedures to establish and
protect its proprietary rights in these products. However,
there can be no assurance that the Group’s proprietary
rights will not be challenged, invalidated or circumvented.
Business interruption, health and
safety and hazard climate-related risks
Operational disruption to the Group’s business may be
caused by a major disaster and/or external threats that
could restrict its ability to supply products and services
to its customers, including potential disruption such
as internet or energy availability in the Group’s main
operating countries. The Group is exposed to various
health and safety and environmental risks, such as natural
disasters and hazards following climate change, that are
beyond Sanoma’s control and that could cause business
interruption and result in significant costs. External threats
including, but not limited to pandemics, terrorist attacks,
strikes and weather conditions, could affect the Group’s
businesses and employees, disrupting daily business
activities. Also, any failure to maintain high levels of safety
management could result in physical injury, sickness or
liability to Sanoma’s employees, which could, in turn, result
in the impairment of Sanoma’s reputation or inability to
attract and retain skilled employees.
Despite Sanoma’s operational policies, efficient and
accurate process management and contingency planning,
there can be no assurance that these will be sufficient in
preventing any of the above-mentioned risks, or recovering
from such risks. To mitigate potential hazard physical risks,
Sanoma has continuity and disaster recovery plans in
place for its critical systems and operations, but there can
be, however, no assurance that these will be sufficient in
preventing such risks from impacting Sanoma negatively.
Sanoma’s insurance programme provides coverage for
insurable hazard risks, subject to insurance terms and
conditions, but there can be no assurances that Sanoma’s
insurance coverage would adequately cover all or any of
such costs, if such an incident were to occur, which could
result in significant costs.
Non-financial risks
Talent attraction and retention
The Group’s success depends on having competent,
skilled and engaged management and employees, and
on their competencies and skills in developing appealing
products and services in accordance with customer
needs in a changing environment. Recruiting and
retaining skilled and motivated personnel may become
increasingly difficult as a result of various factors, including
a shortage of skills in the labour market and intensifying
competition for talent. In addition, Sanoma’s involvement
in M&A transactions generally exposes it to the risk of
employees, including senior management and other key
employees, leaving before such projects are completed
or the acquired businesses are integrated to Sanoma’s
existing business. Also, cultural differences, resistance to
change or uncertainty around the successful adaptation of
new (hybrid and remote) working models may hinder the
Group’s performance or transformation. Should the Group
fail to attract, retain, develop, train and motivate qualified,
engaged and diverse employees at all levels, it could have
an adverse effect on the Group’s profitability and value
creation, competitiveness and development of its business
operations in the long-term.
To mitigate these risks, Sanoma aims to enhance a
corporate culture that supports learning, innovation,
creativity, diversity, managing continuous change, as
well as ethical and efficient ways of working, for which
the framework is set in Sanoma’s Code of Conduct and
Diversity Policy. Sanoma measures employee engagement
on an annual basis, and the results are also linked to
executive and senior management remuneration.
Climate change-related risks
Sanoma’s most significant environmental impacts derive
from greenhouse gas emissions caused by the energy
and materials used in Sanoma’s value chain, although
Sanoma’s business is not highly carbon intensive. Due to
the nature of Sanoma’s business, no material climate risks
are expected to arise in the short-term. The availability and
price of certified forest commodities and renewable energy
pose some risk for Sanoma and changes in them may
potentially have an adverse impact on the Group’s business
and financial performance. In the long-term, Sanoma has
identified low to medium impact risks related to carbon
pricing mechanisms, brand and changing customer
behaviour as well as increased severity and frequency of
extreme weather events such as cyclones or floods. The
effects of climate change are wide-ranging and may bring,
for example, considerable social uncertainty, which may in
turn cause risks that are currently unidentified.
Sanoma mitigates climate-related risks through
its ambitious climate strategy and by developing
sustainability together with its stakeholders and working
alongside its suppliers to improve their sustainability
performance by monitoring and collecting relevant data
and using this to compare suppliers. To identify and
control environmental and climate-related risks and
opportunities, Sanoma evaluates them as part of its annual
risk-assessment process. In addition, Sanoma analyses its
climate-related risks and opportunities by using the Task
Force on Climate-related Financial Disclosures (TCFD)
framework, which is available in the Sustainability Report.
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Risks related to human rights,
anti-corruption and bribery
Sanoma operates in twelve European countries and both
of its business segments use a wide network and variety of
business partners that provide products and services. The
business partners range from individual third-party content
providers to international paper and print producers and
cloud-service providers (more information on risk related
to third-parties is available above under Operational risks).
Sanoma is committed to conducting business in a legal and
ethical manner in compliance with local and international
laws and regulations applicable to its business as well
as its Code of Conduct. Nevertheless, there is a risk that
Sanoma’s employees or business partners may act in a way
that violates human rights or anti-corruption and bribery
laws and regulations or they may act unethically.
To mitigate these risks, all Sanoma employees, for example,
must comply with Sanoma’s Code of Conduct, which
supports the international standards on human rights
and labour conditions and clearly prohibits all corruption
and bribery. The requirements of the Code of Conduct
are extended to Sanoma’s suppliers through the Supplier
Code of Conduct. Sanoma aims to ensure compliance with
measures such as a mandatory e-learning course on the
Code of Conduct for all employees; however, there can be
no assurance that Sanoma’s internal control measures will
detect and prevent misbehaviour by individual employees
or third-party suppliers. Breaches of applicable laws and
regulations or corporate policies by Sanoma’s employees
or business partners may lead to legal processes, sanctions
and fines, as well as reputational damage affecting
Sanoma’s operations, which could have a material adverse
effect on Sanoma’s business, financial condition or results
of operations.
Financial risks
Funding and liquidity risks
Under all circumstances, the Group seeks to maintain
adequate liquidity, which depends on a number of factors.
The Group’s liquidity risk relates to servicing debt, financing
investments and retaining adequate working capital.
Sanoma aims to minimise its liquidity risks by ensuring
sufficient revenues, maintaining adequate committed
credit limits, using several financing institutions and forms
of financing, and spreading loan repayment programmes
over a number of calendar years. The Group’s Treasury
Policy sets minimum requirements for liquidity reserves.
There can be no assurance that the Group will be able to
maintain a sufficient level of liquidity or that the Group will
be able to obtain, on a timely basis or at all, sufficient funds
on acceptable terms to provide adequate liquidity in the
event that cash flows from operations, unused committed
credit line and cash reserves prove to be insufficient.
Negative changes in the economic environment could affect
the Group’s profitability and cash flow in a manner that
could adversely impact the Group’s ability to comply with
financial covenants in loan agreements. Failure to comply
with the financial covenants could lead to mandatory
prepayment of loans. Failure to generate additional funds,
whether from operations or additional debt or equity
financings, may, for example, require the Group to delay
or abandon some or all of its strategy initiatives, including
its strategic aim of acquisition-based growth, which could
have a material adverse effect on the Group’s business,
financial condition or results of operations. In addition, any
future adverse developments, such as a deterioration in the
financial markets and a worsening of general economic
conditions, may adversely affect Sanoma’s ability to borrow
additional funds as well as the cost and other terms of
the funding. For example, global financial markets have
experienced, and may continue to experience, significant
volatility and liquidity disruption, for example, due to
high inflation, the impacts of the war in Ukraine or other
geopolitical unrest, which may adversely affect Sanoma’s
funding costs and access to funding and ultimately affect
Sanoma’s ability to finance its operations.
A more detailed description of the funding and liquidity
risks and their management is available in the Financial
Statements, Note 5.2.
Interest rate risks
The Group’s interest rate risk is mainly related to changes
in the reference rates and loan margins of floating rate
loans in the Group’s loan portfolio. The Group manages its
exposure to interest rate risk by ensuring that the interest
duration of the gross debt of the Group is within a certain
time range approved by the Board of Directors as part of
the Group’s Treasury Policy. The Group may also manage its
exposure to interest rate risk by using a mix of fixed rate and
floating rate loans or by utilising interest rate derivatives.
As a result of the floating rate loans, a significant rise in
interest rates would lead to an increase in financial expenses
limiting for example the Group’s ability to pay dividends.
For example, one percentage point increase in interest
rates would cause a EUR 3 million (2022: 4) increase in net
financing costs. A failure to manage interest rate risk may
have an adverse effect on the Group’s financial condition.
A more detailed description of the interest rate risks and
their management is available in the Financial Statements,
Note 5.2.
Currency risks
The majority of the Group’s cash flow from operations is
denominated in euros. However, the Group is exposed to
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some transaction risk resulting from cash flows generated
from sales and expenses denominated in other currencies.
Group companies are responsible for monitoring and
hedging material transaction risks related to their business
operations in accordance with the Group’s Treasury
Policy. The majority of the Group’s transaction risk in 2023
was related to the procurement of IT services and TV
programming rights, both denominated in U.S. dollars, the
strengthening of which could significantly increase the
Group’s operating costs. The Group has selectively entered
into forward contracts as a means of hedging against
significant transaction risks. Internal funding transactions
within the Group are mainly carried out in the functional
currency of the subsidiary. Group Treasury is responsible for
monitoring and hedging the currency risks related to intra-
group loans. Derivative instruments are used to hedge
future cash flows, hence changes in their value will offset
changes in the value of cash flows at the time they are paid
or received. The materialisation of any of these risks could
have a materially adverse effect on the Group’s earnings
and cash flow directly, and there can be no assurance that
the hedging of these risks is sufficient.
The Group is also exposed to translation risk resulting from
converting the income statement and balance sheet items
of foreign subsidiaries into euros. A significant change in
exchange rates may also have an effect on the value of the
businesses in Poland, Norway and Sweden. The Group did
not hedge against translation risk in 2023, in accordance
with the Group’s Treasury Policy approved by the Board of
Directors.
A more detailed description of the currency risks and their
management is available in the Financial Statements,
Note 5.2.
Credit risks
The Group’s credit risks are related to its business
operations, that is, the risk of the Group not being able
to collect the payments for its receivables. The possible
weakening of the economy, for example due to high
inflation, the impacts of the war in Ukraine or other
geopolitical unrest, may increase the Group’s credit risk,
although potential concentrations of credit risk are offset
by the Group’s diversified operations and the fact that no
individual customer or group of customers is material to the
Group. As part of the quarterly reporting, Sanoma reviews
the potential changes on the expected credit losses and
adjusts provisions accordingly if needed. In Learning, credit
risk of certain customers with a high-risk profile is partially
covered by credit insurance. The Group’s operational units
are responsible for managing credit risks related to their
businesses.
Agreements that Sanoma has entered into with financial
institutions contain an element of risk of the counterparties
being unable to meet their obligations, which could have
a material adverse effect on Sanoma’s business and
financial condition. The Group’s Treasury Policy specifies
that financing, deposits and derivative transactions are
carried out with counterparties of good credit standing
and divided between a sufficient number of counterparties
in order to protect financial assets. The Group has spread
its credit risks efficiently by dealing with several financing
institutions. Sanoma’s ability to manage its financial
counterparty-related risks depends on a number of
factors, including market conditions affecting its financial
counterparties, and there can be no assurance that
Sanoma’s measures will be successful in preventing the
realisation of financial counterparty-related risks, which
could have a material adverse effect on Sanoma’s business
and financial condition.
A more detailed description of the credit risks and their
management is available in the Financial Statements,
Note 5.2.
Risk of impairment of goodwill, immaterial rights
and other intangible assets
As of 31 December 2023, the Group’s consolidated balance
sheet included EUR 1,533 million (2022: 1,551) in goodwill,
immaterial rights and other intangible assets compared
to consolidated equity of EUR 799 million (2022: 702),
respectively. The majority of the balance of goodwill,
immaterial rights and other intangible assets are related
to Learning. In accordance with the International Financial
Reporting Standards (IFRS), instead of goodwill being
amortised regularly, it is tested for impairment on an
annual basis or more frequently if there is any indication of
impairment. The impairment losses on goodwill, immaterial
rights and other intangible assets for the year ended 31
December 2023 totalled EUR 11 million (2022: 8). Changes
in business fundamentals could lead to further impairment,
thus negatively impacting Sanoma’s equity and equity-
related ratios. Furthermore, as Sanoma’s strategic aim
is to grow through acquisitions, material amounts of
goodwill, immaterial rights and other intangible assets
might be recorded on Sanoma’s balance sheet and may be
impaired in the future in connection with the completions of
acquisitions.
The Group is exposed to seasonal fluctuation
The Group’s businesses are exposed to seasonal
fluctuation. For example, the Group’s learning business
has, by its nature, an annual cycle with strong seasonality.
Most net sales and earnings are accrued during the second
and third quarters, while the first and fourth quarters are
typically loss-making. The acquisitions in Italy and Spain,
completed in 2020–2022, have further increased the overall
seasonality and the importance of the third quarter, when
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the new school year starts, for the business. Shifts of single
orders between quarters may have a material impact when
comparing quarterly net sales and earnings on a year-on-
year basis, and thus year-to-date figures typically provide
a more comprehensive picture of Learning’s business
performance and development.
In the media business, net sales and earnings are
particularly affected by the development of advertising.
Advertising sales are influenced, for example, by the
number of newspaper and magazine issues published
each quarter, which varies annually. TV advertising in
Finland is usually strongest in the second and fourth
quarters. The events business in Finland is typically focused
on the second and third quarters.
Such seasonal fluctuations influence the Group’s net sales,
EBIT and free cash flow and, thus, could have a material
adverse effect on Sanoma’s business, financial condition or
results of operations and impact the comparability of the
quarterly financial information of the Group.
Risks related to changes to tax laws or their
application or as a result of a tax audit
Sanoma’s tax burden depends on tax laws and regulations
and their application and interpretation. Changes in tax
laws and regulations or their interpretation and application
may increase Sanoma’s tax costs to a significant degree,
which could have an adverse effect on Sanoma’s financial
condition and/or results of operations. In addition,
Sanoma may, at times, be subject to tax audits conducted
by national tax authorities. Tax audits or other auditing
measures carried out by tax or other authorities could result
in an imposition of additional taxes (such as income taxes,
value added taxes (VAT) and withholding taxes), which
could lead to an increase in Sanoma’s tax liability.
For example, the Finnish tax administration has performed
tax audits in Sanoma Media Finland Oy covering the years
2015–2021. In April 2021, the Finnish Tax Adjustment
Board accepted a claim based on tax audits at Media
Finland in years 2015–2018 about the treatment of VAT of
certain magazines that were printed in multiple locations
in Europe and distributed through a centralised logistics
centre in Norway. The decision was appealed to the
Administrative Court, which rejected Sanoma’s appeal
in June 2023. Sanoma considers the claims unjustified
and has applied for permission to appeal the 2015–2018
decision to the Supreme Administrative Court, where the
permission is pending. Sanoma paid the required VAT, the
related penalty and interests of EUR 25 million in 2021
in order to avoid further interest accumulation. The tax
authorities have made an ex officio decision on a corporate
income tax adjustment as a consequence of value-added
tax adjustment and refunded EUR 3 million of corporate
income tax to Sanoma in 2021. In December 2022, Sanoma
received a similar payment decision from the Finnish Tax
Administration regarding the tax audits at Sanoma Media
Finland Oy for the years 2019–2021, concerning the same
business model and a similar distribution arrangement as
described above. The decision was in line with the earlier
decision concerning the years 2015–2018 by the Finnish
Tax Adjustment Board. Sanoma has appealed the decision
to the Finnish Tax Adjustment Board, but paid EUR 11
million of VAT, penalties and interests in December 2022
based on the decision in order to avoid further interest
accumulation. The tax authorities have made an ex officio
decision on a corporate income tax adjustment as a
consequence of value-added tax adjustment and refunded
EUR 2 million of corporate income tax to Sanoma in March
2023. Based on the Administrative Court’s decision received
in June 2023, the VAT claims for years the 2015–2018 and
2019–2021 with a total net amount of approx. EUR 30
million, were booked as items affecting comparability (IAC)
in Media Finland’s Q2 2023 result. The court decision had
no impact on Sanoma’s free cash flow. The VAT regulations
have changed as of 1 July 2021 and thus further tax audits
related to the matter are not expected.
A more detailed description of the Group’s financial
risks and their management is available in the Financial
Statements, Note 5.2.
Outlook for 2024
In 2024, Sanoma expects that the Group’s reported net
sales will be EUR 1.29–1.34 billion (2023: 1.4). The Group’s
operational EBIT excl. PPA is expected to be EUR 160–180
million (2023: 175).
Regarding the operating environment, Sanoma
expects that:
■
the advertising market in Finland will decline slightly and
■
the development in the economies of the Group’s
operating countries is expected to be relatively stable.
SANOMA ANNUAL REPORT 2023
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Corporate Governance
Separate Corporate Governance Statement 2023
and Remuneration Report 2023 can be found in the
Governance section.
Decisions of the Annual
General Meeting 2023
Sanoma Corporation’s Annual General Meeting (AGM)
was held on 19 April 2023 in Helsinki. For the purposes of
expanding the opportunities for shareholders’ participation,
the opportunity was reserved for the shareholders to
exercise their rights by voting in advance.
The meeting adopted the Financial Statements, the
Board of Directors’ Report and the Auditor’s Report for
the year 2022, as well as discharged the members of
the Board of Directors and the President and CEO from
liability for the financial year 2022. In addition, the
meeting made an advisory decision on the adoption of the
Remuneration Policy and the Remuneration Report of the
governing bodies.
The second instalment of EUR 0.13 per share was paid to a
shareholder who was registered in the shareholder register
of the Company maintained by Euroclear Finland Ltd on
the dividend record date 15 September 2023. The payment
date for the instalment was 22 September 2023.
The third instalment of EUR 0.11 per share was paid to a
shareholder who was registered in the shareholder register
of the Company maintained by Euroclear Finland Ltd on the
dividend record date 27 October 2023. The payment date
for the instalment was 3 November 2023.
The AGM resolved that the number of the members of
the Board of Directors shall be set at nine. Pekka Ala-
Pietilä, Julian Drinkall, Rolf Grisebach, Anna Herlin, Mika
Ihamuotila, Nils Ittonen, Denise Koopmans and Sebastian
Langenskiöld were re-elected as members, and Eugenie
van Wiechen was elected as a new member of the Board
of Directors. Pekka AlaPietilä was elected as the Chair of
the Board and Nils Ittonen as the Vice Chair. The term of all
Board members ends at the end of the AGM 2024.
The AGM resolved that the remuneration payable to the
members of the Board of Directors remains unchanged. The
monthly remunerations are EUR 12,000 for the Chair of the
Board of Directors, EUR 7,000 for the Vice Chair of the Board
of Directors, and EUR 6,000 for the members of the Board of
Directors.
The meeting fees are:
■
for Board members who reside outside Finland: EUR
1,000 / Board meeting where the member was present,
■
for members of the Board of Directors who reside in
Finland: No separate fee is paid for attending Board
meetings,
■
for the Chairs of Board of Directors’ Committees: EUR
3,500 / Committee meeting participated,
■
for Committee members who reside outside Finland:
EUR 2,500 / Committee meeting where the member
was present and EUR 1,500 / Committee meeting
participated, and
■
for Committee members who reside in Finland: EUR
1,500 / Committee meeting participated.
The meeting fees of the Shareholders’ Nomination
Committee remain unchanged and are:
■
for the Chair of the Shareholders’ Nomination Committee:
EUR 3,500 / Committee meeting participated,
■
for members of the Shareholders’ Nomination Committee
who reside outside Finland: EUR 2,500 / Committee
meeting where the member was present and EUR 1,500
/ Committee meeting participated, and
■
for members of the Shareholders’ Nomination Committee
who reside in Finland: EUR 1,500 / Committee meeting
participated.
The AGM appointed audit firm PricewaterhouseCoopers
Oy as the auditor of the Company with Samuli Perälä,
Authorised Public Accountant, as the auditor with principal
responsibility. The Auditor shall be reimbursed against
invoice approved by the Company.
The AGM resolved that § 10 of the Company’s Articles
of Association is amended to enable holding a general
meeting of shareholders entirely without a meeting venue
as a so-called remote meeting and that the notice to the
meeting may be published only on the Company’s website.
Furthermore, §§ 11–12 will be abolished (as the substantive
contents is incorporated into the revised § 10).
Board authorisations
The AGM authorised the Board of Directors to decide on the
repurchase of a maximum of 16,000,000 of the Company’s
own shares (approx. 9.8% of all shares of the Company) in
one or several instalments. The shares shall be repurchased
with funds from the Company's unrestricted shareholders’
equity, and the repurchases shall reduce funds available
SANOMA ANNUAL REPORT 2023
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33
for distribution of profits. The authorisation will be valid
until 30 June 2024, and it terminates the corresponding
authorisation granted by the AGM 2022.
The AGM authorised the Board of Directors to decide on
issuance of new shares and the conveyance of the Company's
own shares held by the Company (treasury shares) and the
issuance of option rights and other special rights entitling
to shares as specified in Chapter 10, Section 1 of the Finnish
Companies Act. Option rights and other special rights
entitling to shares as specified in Chapter 10, Section 1 of the
Finnish Companies Act may not be granted as part of the
Company’s incentive programme. The Board will be entitled
to decide on the issuance of a maximum of 16,000,000 new
shares (approx. 9.8% of all shares of the Company) as well as
conveyance of a maximum of 21,000,000 treasury shares held
by the Company in one or several instalments. The issuance
of shares, the conveyance of treasury shares and the granting
of option rights and other special rights entitling to shares
may be done in deviation from the shareholders’ pre-emptive
right (directed issue). The authorisation will be valid until 30
June 2024 and it will replace the corresponding authorisation
granted by the AGM 2022.
Changes in the management
On 6 November, President and CEO Susan Duinhoven
informed Sanoma’s Board of Directors that she will step
down from the role of President and CEO during the first
half of 2024.
On 20 November, the Board of Directors appointed Rob
Kolkman President and CEO of Sanoma Corporation as of
1 January 2024. Rob succeeds Susan Duinhoven, who will
continue as executive advisor to the company until the end
of March 2024 to support a solid transition to the new CEO
and assist in strategic projects.
Executive Management Team
In 2023, Sanoma’s Executive Management Team consisted
of the following members: Susan Duinhoven (President and
CEO), Alex Green (CFO), Pia Kalsta (CEO of Media Finland)
and Rob Kolkman (CEO of Learning). As of 1 January 2024,
Sanoma’s Executive Management Team consists of the
following members: Rob Kolkman (President and CEO), Alex
Green (CFO) and Pia Kalsta (CEO of Media Finland).
Related party transactions
Sanoma has a Related Party Policy, under which members
of the Board of Directors, the Executive Management Team
and the SBU management teams are under obligation to
submit certain related party transactions, as defined in the
Policy, for a prior approval. In addition, the Board Charter
includes instructions for Board members’ conduct in related
party transactions and other conflict of interest situations.
Sanoma reports related party transactions in accordance
with IFRS. More information on transactions with related
parties is available in Financial Statements 2023, Note 6.1.
Annual General Meeting 2024
Sanoma’s Annual General Meeting 2024 will be held on
Wednesday, 17 April 2024 at 14:00 EET at Sanomatalo
(Töölönlahdenkatu 2, 00100 Helsinki). The shareholders
of the Company and their proxy representatives can also
exercise the shareholder’s rights by voting in advance
as well as by submitting counterproposals and asking
questions in advance in accordance with the instructions
set out in the Notice to the Annual General Meeting of the
Company published on 7 February 2024.
More information is available on the Company’s website
sanoma.com.
Dividend proposal
On 31 December 2023, Sanoma Corporation’s distributable
funds were EUR 399 million, of which profit for the year
made up EUR 1 million. Including the fund for non-restricted
equity of EUR 210 million, the distributable funds amounted
to EUR 608 million. The Board of Directors proposes to the
Annual General Meeting that:
■
A dividend of EUR 0.37 per share shall be paid for
the year 2023. The dividend shall be paid in three
instalments. The first instalment of EUR 0.13 per share
shall be paid to a shareholder who is registered in the
shareholders’ register of the company maintained by
Euroclear Finland Ltd on the dividend record date 19
April 2024. The payment date for this instalment is 26
April 2024. The record date for the second instalment
of EUR 0.13 per share will be decided by the Board of
Directors in September, and the second instalment shall
be paid in September 2024. The record date for the third
instalment of EUR 0.11 per share will be decided by the
Board of Directors in October, and the third instalment
shall be paid in November 2024.
■
The amount left in equity shall be EUR 548 million.
According to its Dividend Policy, Sanoma aims to pay an
increasing dividend, equal to 40–60% of the annual free
cash flow. When proposing a dividend to the AGM, the
Board of Directors looks at the general macro-economic
environment, Sanoma’s current and target capital
structure, Sanoma’s future business plans and investment
needs, as well as both previous year’s cash flows and
expected future cash flows affecting capital structure.
SANOMA ANNUAL REPORT 2023
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34
Shares and shareholders
Sanoma has one series of shares, with all shares producing
equal voting rights and other shareholder rights. The
shares have no redemption and consent clauses, nor any
other transfer restrictions. Sanoma share has no nominal
value or book value.
Share capital
At the end of December 2023, Sanoma’s registered share
capital was EUR 71 million (2022: 71), and the total number
of shares was 163,565,663 (2022: 163,565,663), including
298,045 (2022: 387,895) of its own shares. Own shares
represented 0.2% (2022: 0.2%) of all shares and votes. The
number of outstanding shares excluding Sanoma’s own
shares was 163,267,618 (2022: 163,177,768).
In March 2023, Sanoma delivered a total of 89,850 (2022:
291,719) of its own shares (without consideration and after
taxes) as part of its long-term share-based incentive plans.
Share trading and performance
At the end of December 2023, Sanoma’s market
capitalisation was EUR 1,135 million (2022: 1,602) with
Sanoma’s share closing at EUR 6.95 (2022: 9.82). In
January–December 2023, the volume-weighted average
price of Sanoma’s share on Nasdaq Helsinki Ltd. was EUR
7.58 (2022: 12.56), with a low of EUR 5.91 (2022: 9.48) and
a high of EUR 10.30 (2022: 14.78).
In January–December 2023, the cumulative value of
Sanoma’s share turnover on Nasdaq Helsinki Ltd. was EUR
166 million (2022: 156). The trading volume of 22 million
shares (2022: 12) equalled an average daily turnover of
87,000 shares (2022: 49,000). The traded shares accounted
for some 13% (2022: 8%) of the average number of shares.
Sanoma’s share turnover, including alternative trading
venues, CBOE DXE, Turquoise and Frankfurt, was 26 million
shares (2022: 15). Nasdaq Helsinki represented 83%
(2022: 83%) of the share turnover. (Source: Euroland)
Ownership structure and shareholders
The Board of Directors is not aware of any effective
agreements related to holdings in Sanoma shares and the
exercise of voting rights.
Sanoma had 24,756 (2022: 23,695) registered
shareholders at the end of December 2023.
On 31 December 2023, the combined holdings in the
Company’s shares of the members of the Board of Directors,
the President and CEO, and the bodies they control (as
referred to in Chapter 2, Section 4 of the Finnish Securities
Market Act) accounted for 0.9% (2022: 7.1%) of all shares
and votes. More information on management shareholding
and remuneration is available in the Financial Statements,
Note 6.3.
Flagging notification
On 8 May, Sanoma received an announcement from
Rafaela Seppälä, in accordance with the Finnish Securities
Market Act Chapter 9, Section 5. According to the
announcement, the total holding of Sanoma Corporation’s
shares and voting rights owned by Rafaela Seppälä fell
below the level of 5% of the share capital of Sanoma
Corporation as a result of share transactions concluded
on 4 May 2023. The total holding of Rafaela Seppälä fell
to 7,654,746 shares, corresponding to 4.68% of Sanoma’s
shares and voting rights.
SANOMA ANNUAL REPORT 2023
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35
MAJOR SHAREHOLDERS 31 DECEMBER 2023
Shareholders Shares % of shares
1 Jane and Aatos Erkko Foundation 39,820,286 24.35
2 Holding Manutas Oy 21,585,000 13.20
3 Langenskiöld Robin 12,273,371 7.50
4 Seppälä Rafaela 7,654,746 4.68
5 Varma Mutual Pension Insurance Company 5,538,352 3.39
6 Helsingin Sanomat Foundation 4,701,570 2.87
7 Ilmarinen Mutual Pension Insurance Company 4,007,300 2.45
8 Noyer Alex 3,213,277 1.96
9 Elo Mutual Pension Insurance Company 2,188,000 1.34
10 Bernardin-Aubouin Lorna 1,852,470 1.13
11 The State Pension Fund 1,760,000 1.08
12 Foundation for Actors’ Old-Age Home 1,700,000 1.04
13 Stiftelsen för Åbo Akademi 1,000,000 0.61
14 OP-Finland 828,308 0.51
15 Säästöpankki Kotimaa Mutual Fund 822,431 0.50
16 Evli Finnish Small Cap Fund 775,000 0.47
17 Samfundet Folkhälsan i Svenska Finland 764,389 0.47
18 OP-Finland Small Firms Fund 699,169 0.43
19 Langenskiöld Christoffer 645,996 0.39
20 Langenskiöld Sebastian 645,963 0.39
20 largest shareholders total 112,475,628 68.76
Nominee registered 15,105,793 9.24
Other shares 35,984,242 22.00
Total 163,565,663 100.00
SHAREHOLDERS BY NUMBER OF SHARES HELD 31 DECEMBER 2023
Number of shares
Number of
shareholders %
Number of
shares %
1–100 8,908 35.98 413,400 0.25
101–500 8,912 36.00 2,439,554 1.49
501–1,000 2,996 12.10 2,345,616 1.43
1,001–5,000 3,103 12.53 6,828,887 4.18
5,001–10,000 404 1.63 2,880,283 1.76
10,001–50,000 312 1.26 5,901,729 3.61
50,001– 100,000 51 0.21 3,640,026 2.23
100,001–500,000 43 0.17 9,355,706 5.72
500,001 + 27 0.11 129,681,013 79.28
Total 24,756 100.00 163,486,214 99.95
In the joint book-entry account 79,449 0.05
Number of shares issued 163,565,663 100.00
Holdings by sector
31 December 2023,
%
12.4%
31.8%
27.4%
8.5%
16.6%
Private companies
Financial and insurance institutions
Public sector organisations
Households
Non-profit organisations
Foreigners
3.3%
1
Holdings by sector
31 December 2023,
%
12.4%
31.8%
27.4%
8.5%
16.6%
Private companies
Financial and insurance institutions
Public sector organisations
Households
Non-profit organisations
Foreigners
3.3%
1
HOLDINGS BY SECTOR 31 DECEMBER 2023
SANOMA ANNUAL REPORT 2023
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36
Events after the reporting period
On 1 February 2024, the Shareholders’ Nomination
Committee proposed to the Annual General Meeting 2024
that the number of the members of the Board of Directors
is set at eight. The Nomination Committee also proposed
that Pekka Ala-Pietilä, Julian Drinkall, Rolf Grisebach,
Anna Herlin, Mika Ihamuotila, Sebastian Langenskiöld
and Eugenie van Wiechen are re-elected as members of
the Board of Directors. Nils Ittonen and Denise Koopmans
have informed that they do not stand for re-election to the
Board. Consequently, the Nomination Committee proposed
that Klaus Cawén shall be elected as a new member of
the Board. In addition, the Shareholders’ Nomination
Committee has proposed that Pekka Ala-Pietilä is elected
as the Chair and Klaus Cawén as the Vice Chair of the
Board of Directors. The proposed Board members have
all given their consent to being elected. The term of all the
Board members ends at the end of the Annual General
Meeting 2025. The Shareholders’ Nomination Committee
also proposed that the monthly remuneration payable
as well as the meeting fees of the members of the Board
of Directors remain unchanged. Essential biographical
information on all Board member candidates is available at
sanoma.com.
On 18 January 2024, Sanoma announced to divest its
majority holding in Netwheels Oy to Alma Media. Net sales
of the divested business were approx. EUR 8 million in 2023
and the company employed 29 people who will transfer to
the buyer at completion. The transaction was completed at
the end of January.
On 8 January 2024, Sanoma divested Stark, an exam
preparation business in Germany, which it acquired in
connection to the Italian K12 learning content business
from Pearson in August 2022. Net sales of the divested
business were approx. EUR 14 million in 2023 and the
company employed 56 people who transferred to the buyer
with the divestment.
Alternative performance measures
Sanoma presents certain financial performance measures
on a non-IFRS basis as alternative performance measures
(APMs). Sanoma considers that these alternative
performance measures provide useful and relevant
supplemental information to the management and
investors on Sanoma’s financial performance, financial
position or cash flows. Certain APMs exclude certain
non-operational or non-cash valuation items affecting
comparability (IACs) and are provided to reflect the
underlying business performance and to enhance
comparability between reporting periods. The APMs
should not be considered as a substitute for performance
measures in accordance with IFRS.
Definitions of key IFRS indicators and APMs are
available in chapter Key indicators and share indicators.
Reconciliations are available in chapter Reconciliation of
certain key figures.
SANOMA ANNUAL REPORT 2023
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37
Key indicators and share indicators
Key indicators
EUR million 2023 2022 2021 2020 2019
Net sales
1
1,392.9 1,298.3 1,251.6 1,061.7 912.6
Operational EBITDA
1
358.3 355.4 361.0 309.9 276.8
% of net sales
1
25.7 27.4 28.8 29.2 30.3
Operational EBIT excl. PPA
1
175.4 189.3 197.2 156.5 137.6
% of net sales
1
12.6 14.6 15.8 14.7 15.1
Items affecting comparability in EBIT
1
-82.3 -37.9 -15.8 135.9 -22.5
Purchase price allocation adjustments and amortisations (PPAs)
1
41.3 39.3 39.0 22.3 10.5
EBIT ¹ 51.7 112.0 142.4 270.1 104.5
% of net sales
1
3.7 8.6 11.4 25.4 11.5
Result before taxes
1
20.6 99.2 133.8 261.0 82.7
% of net sales
1
1.5 7.6 10.7 24.6 9.1
Result for the period from continuing operations
1
4.1 77.0 101.4 237.8 64.8
% of net sales
1
0.3 5.9 8.1 22.4 7.1
Result for the period 4.1 77.0 101.2 247.1 13.3
% of net sales 0.3 5.9 8.1 23.3 1.5
Balance sheet total 2,036.6 2,103.6 1,932.5 2,048.3 1,997.9
Capital expenditure 43.1 52.9 41.7 42.5 31.7
% of net sales 3.1 4.1 3.3 3.7 2.5
Free cash flow 105.1 111.7 139.7 94.8 131.3
Return on equity (ROE), % 0.5 11.2 14.7 40.7 2.2
Return on investment (ROI), % 3.5 7.7 10.2 24.0 5.4
Equity ratio, % 42.5 35.8 40.6 37.4 30.5
Net gearing, % 80.0 117.3 85.5 93.1 144.2
Interest-bearing liabilities 705.6 864.4 668.8 775.3 817.9
Non-interest-bearing liabilities 531.6 537.1 542.8 560.4 644.5
Net debt 639.7 823.4 616.4 660.7 794.7
Net debt / Adj. EBITDA 2.8 3.2 2.4 2.6 2.7
Average number of employees (FTE)
1
5,119 5,018 4,885 4,255 3,551
Number of employees at the end of the period (FTE)
1
5,017 5,079 4,822 4,806 3,937
¹ Figures contain only continuing operations.
SANOMA ANNUAL REPORT 2023
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38
Share indicators
EUR 2023 2022 2021 2020 2019
Earnings/share, continuing operations
1
-0.03
0.47 0.62 1.46 0.39
Earnings/share -0.03
0.47 0.61 1.51 0.07
Earnings/share, diluted, continuing operations
1
-0.03
0.47 0.61 1.45 0.39
Earnings/share, diluted -0.03
0.47 0.61 1.51 0.07
Operational earnings/share, continuing operations
1
0.39
0.65 0.69 0.58 0.50
Operational earnings/share 0.39
0.65 0.69 0.67 0.80
Free cash flow per share 0.64
0.68 0.86 0.58 0.81
Equity/share 4.88
4.26 4.38 4.23 3.25
Dividend/share
2
0.37
0.37 0.54 0.52 0.50
Dividend payout ratio, %
2
neg.
79.2 87.9 34.4 707.0
Operational dividend payout ratio, %
2
93.8
56.8 77.9 77.9 62.5
Market capitalisation, EUR million
3
1,134.7
1,602.4 2,218.5 2,240.1 1,539.7
Effective dividend yield, %
2
5.3
3.8 4.0 3.8 5.3
P/E ratio neg.
21.0 22.2 9.1 133.6
Adjusted number of shares at the end of the period
3
163,267,618
163,177,768 162,886,049 163,036,686 163,016,523
Adjusted average number of shares
3
163,253,094
163,130,613 163,165,194 163,041,596 162,933,737
Lowest share price 5.91
9.48 12.80 6.84 7.96
Highest share price 10.30
14.78 17.12 14.00 10.44
Average share price 7.58
12.56 14.54 10.15 9.03
Share price at the end of the period 6.95
9.82 13.62 13.74 9.45
Trading volumes, shares 21,898,627
12,404,976 16,289,472 29,310,738 19,098,115
% of shares 13.4
7.6 10.0 18.0 11.7
1
Figures contain only continuing operations.
2
Year 2023 proposal of the Board of Directors.
3
The number of shares does not include treasury shares.
SANOMA ANNUAL REPORT 2023
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39
Definitions of key indicators
KPI Definition Reason to use
Comparable net sales (growth) = Net sales (growth) adjusted for the impact of acquisitions and divestments
Complements reported net sales by reflecting the underlying
business performance and enhancing comparability between
reporting periods
Items affecting comparability
(IACs)
=
Gains/losses on sale, restructuring incl. transaction and integration costs of acquisitions or
efficiency programme expenses and impairments that exceed EUR 1 million.
Reflects the underlying business performance and enhances
comparability between reporting periods
Operational EBITDA = Operating profit + depreciation, amortisation and impairments - IACs
Measures the profitability before non-cash based depreciation and
amortisation, reflects the underlying business performance and
enhances comparability between reporting periods
Purchase price allocation
adjustments and amortisations
(PPAs)
=
Purchase price allocation amortisations and cost impact of the inventory fair
value adjustments
A component used in the calculation of KPI's
(incl Operational EBIT excl PPA)
Operational EBIT excl. PPA = EBIT - IACs - Purchase price allocation (PPA) adjustments and amortisations
Measures the profitability excl. acquisition-related PPA adjustments
and amortisations, reflects the underlying business performance
and enhances comparability between reporting periods
Equity ratio, % =
Equity total
x 100
One of Sanoma’s long-term financial targets, measures the relative
proportion of equity to total assets
Balance sheet total - advances received
Free cash flow = Cash flow from operations - capital expenditure Basis for Sanoma’s dividend policy
Free cash flow/share =
Free cash flow
Basis for Sanoma’s dividend policy
Weighted average number of shares on the market
Net debt =
Interest-bearing liabilities (short- or long-term liabilities which have separately determined
interest cost) - cash and cash equivalents
Measures Sanoma’s net debt position
Net debt/adj. EBITDA =
The adjusted EBITDA used in this ratio is the 12-month rolling operational EBITDA, where
acquired operations are included and divested operations excluded, and where programming
rights and prepublication rights have been raised above EBITDA on cash flow basis
One of Sanoma’s long-term financial targets, provides investors
information on Sanoma’s ability to service its debt
Net financial items = Financial income - Financial expenses Measures Sanoma's net financial items
Earnings/share (EPS) =
Result for the period attributable to the equity holders of the Parent Company –
tax adjusted interest on hybrid loan
Measures Sanoma’s result for the period per share
Weighted average number of shares on the market
SANOMA ANNUAL REPORT 2023
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40
KPI Definition Reason to use
Operational EPS =
Result for the period attributable to the equity holders of the Parent Company - tax adjusted
interest on hybrid loan - IACs -
tax effect of IACs - non-controlling interests' share of IACs
In addition to EPS, reflects the underlying business performance
and enhances comparability between reporting periods
Weighted average number of shares on the market
Net gearing, % =
Interest-bearing liabilities (short- or long-term liabilities which have separately determined
interest cost) - cash and cash equivalents
x 100
Measures how much debt in relation to equity Sanoma is using to
finance its assets
Equity total
Return on equity (ROE), % =
Result for the period
x 100
Measures the company’s relative profitability, ie. the profit received
for the equity employed
Equity total (average of monthly balances)
Return on investment (ROI), % =
Result before taxes + interest and other financial expenses
x 100
Measures the company’s relative profitability, ie. the profit and
interest received for net assets employed
Balance sheet total - non-interest-bearing liabilities (average of monthly balances)
Non-interest-bearing liabilities =
Non-interest-bearing liabilities include trade and other payables, contract liabilities, deferred
and income tax liabilities, provisions and pension liabilities
Equity/share =
Equity attributable to the equity holders of the Parent Company
Adjusted number of shares on the market at the balance sheet date
Dividend payout ratio, % =
Dividend/share
x 100
Result/share
Operational dividend payout ratio,
%
=
Dividend/share
x 100
Operational EPS
Effective dividend yield, % =
Dividend/share
x 100
Share price on the last trading day of the year
P/E ratio =
Share price on the last trading day of the year
x 100
Result/share
Market capitalisation =
Number of shares on the market at the balance sheet date x
share price on the last trading day of the year
Definitions of key indicators
SANOMA ANNUAL REPORT 2023
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41
Reconciliation of certain key figures
Reconciliation of operational EBIT excl. PPA
EUR million 2023 2022
EBIT 51.7 112.0
Items affecting comparability (IACs) and PPA adjustments and
amortisations¹
Learning
Impairments -10.1 -11.6
Capital gains/losses 0.5
Restructuring expenses -33.3 -21.1
PPA adjustments and amortisations -34.5 -32.5
Media Finland
Impairments -3.2
Capital gains/losses 1.6 0.4
Restructuring expenses -3.8 -5.0
VAT claims for years 2015-2018 and 2019-2021 -35.9
PPA adjustments and amortisations -6.8 -6.9
Other operations
Capital gains/losses 2.9
Restructuring expenses -0.6 -1.1
Items affecting comparability (IACs) and PPA adjustments and
amortisations total
-123.7 -77.2
Operational EBIT excl PPA 175.4 189.3
Depreciations of buildings and structures -27.9 -26.6
Depreciation of rental books -7.4 -11.5
Amortisation of film and TV broadcasting rights -58.9 -54.2
Amortisation of prepublication rights -42.5 -31.6
Other depreciations, amortisations and impairments -57.8 -53.2
Items affecting comparability in depreciation, amortisation and
impairments
11.6 11.1
Operational EBITDA 358.3 355.4
EUR million 2023 2022
Items affecting comparability (IACs) in results of associated
companies
Media Finland
Fair value remeasurement of previously held equity interest -1.0
Total -1.0
1
Items affecting comparability and PPA adjustments and amortisations are unaudited.
SANOMA ANNUAL REPORT 2023
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42
Reconciliation of operational EPS
EUR million 2023 2022
Result for the period attributable to the equity holders of
the Parent Company
3.3 76.2
Current year interest on the hybrid bond net of tax -7.6
Items affecting comparability 83.3 37.9
Tax effect of items affecting comparability -14.6 -7.8
Operational result for the period attributable to the
equity holders of the Parent Company 64.4 106.3
Weighted average number of shares on the market 163,253,094 163,130,613
Operational EPS 0.39 0.65
Reconciliation of net debt
EUR million 31 Dec 2023 31 Dec 2022
Non-current financial liabilities 249.4 599.4
Current financial liabilities 301.4 100.1
Non-current lease liabilities 124.8 119.6
Current lease liabilities 30.0 45.3
Cash and cash equivalents -65.9 -41.0
Net debt 639.7 823.4
Reconciliation of adjusted EBITDA
EUR million 2023 2022
12-month rolling operational EBITDA 358.3 355.4
Impact of acquired and divested operations 0.1 17.2
Impact of programming rights -64.9 -54.3
Impact of prepublication rights -55.3 -55.4
Impact of rental books -8.7 -7.5
Adjusted EBITDA 229.5 255.4
Reconciliation of comparable net sales growth
EUR million 2023 2022
Group
Net sales 1,392.9 1,298.3
Impact of acquired and divested operations -82.7 -10.5
Comparable net sales 1,310.2 1,287.8
Learning
Net sales 795.2 681.0
Impact of acquired and divested operations -80.0 -6.0
Comparable net sales 715.2 675.0
Media Finland
Net sales 597.8 618.1
Impact of acquired and divested operations -2.7 -4.5
Comparable net sales 595.1 613.6
Reconciliation of return on equity (ROE), %
EUR million 2023 2022
Result for the period 4.1 77.0
Equity total (average of monthly balances) 766.1 688.0
Return on equity, % 0.5 11.2
Reconciliation of return on investment (ROI), %
EUR million 2023 2022
Result before taxes 20.6 99.2
Interest and other financial items 35.3 18.0
Result before taxes excl. interests and other financial items 55.9 117.2
Balance sheet total (average of monthly balances) 2,170.6 2,103.5
Non-interest-bearing liabilities (average of monthly balances) -591.2 -582.4
Balance sheet total - non-interest-bearing liabilities
(average of monthly balances)
1,579.4 1,521.1
Return on investment, % 3.5 7.7
SANOMA ANNUAL REPORT 2023
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43
Consolidated
Financial Statements
Consolidated income statement ...............................45
Statement of comprehensive income .....................45
Consolidated balance sheet ..........................................46
Changes in consolidated equity .................................. 47
Consolidated cash flow statement ...........................48
Notes to the Consolidated
Financial Statements
...........................................................49
1. Accounting policies for
Consolidated Financial Statements
.......................................50
2. Financial performance
...............................................................60
3. Acquisitions and
capital expenditure
......................................................................75
4. Working capital and other
balance sheet items
....................................................................86
5. Capital structure and
financial items
...............................................................................94
6. Other notes
..................................................................................105
SANOMA ANNUAL REPORT 2023
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44
Consolidated income statement
EUR million Note 2023 2022
NET SALES
2.1, 2.2
Other operating income
2.3
Materials and services
2.5
-487.0 -458.0
Employee benefit expenses
2.4, 6.2, 6.3
-405.4 -356.2
Other operating expenses
2.5
-239.0 -177.2
Share of results in joint ventures
4.7
Depreciation, amortisation and impairment losses
2.6, 3.2, 3.3, 4.6
-235.9 -216.5
EBIT 51.7 112.0
Share of results in associated companies
4.7
-0.6 -0.4
Financial income
2.7
Financial expenses
2.7
-39.1 -22.0
RESULT BEFORE TAXES 20.6 99.2
Income taxes
2.8
-16.5 -22.2
RESULT FOR THE PERIOD 4.1 77.0
Result attributable to:
Equity holders of the Parent Company 3.3 76.2
Non-controlling interests 0.8 0.7
Earnings per share for result attributable to the
equity holders of the Parent Company:
2.9
Earnings per share, EUR -0.03 0.47
Diluted earnings per share, EUR -0.03 0.47
Statement of comprehensive income
EUR million 2023 2022
Result for the period 4.1 77.0
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Change in translation differences 1.7 2.3
Items that will not be reclassified to profit or loss
Defined benefit plans 15.7 -6.9
Income tax related to defined benefit plans -3.2 1.3
Other comprehensive income for the period, net of tax 14.2 -3.3
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 18.3 73.6
Total comprehensive income attributable to:
Equity holders of the Parent Company 17.5 72.9
Non-controlling interests 0.8 0.7
SANOMA ANNUAL REPORT 2023
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45
Consolidated balance sheet
Assets
EUR million Note 31 Dec 2023 31 Dec 2022
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
2.3, 2.5, 3.3
Right-of-use assets
3.3
Investment property
2.3, 2.5, 4.6
Goodwill
3.2
Other intangible assets
3.2
Equity-accounted investees
4.7
Other investments
4.8
Deferred tax receivables
2.8
Non-current receivables
4.2, 4.9
NON-CURRENT ASSETS, TOTAL 1,763.4 1,801.3
CURRENT ASSETS
Inventories
4.1
Income tax receivables 13.9 10.4
Contract assets
2.2
Trade and other receivables
4.3
Cash and cash equivalents
5.3
CURRENT ASSETS, TOTAL 273.2 302.3
ASSETS, TOTAL 2,036.6 2,103.6
Equity and liabilities
EUR million Note 31 Dec 2023 31 Dec 2022
EQUITY AND LIABILITIES
EQUITY
5.4, 6.2
Share capital 71.3 71.3
Treasury shares -4.1 -5.2
Fund for invested unrestricted equity 209.8 209.8
Translation differences -15.7 -17.3
Retained earnings 386.5 436.5
Hybrid bond 149.1
Total equity attributable to the equity holders of the
Parent Company 796.8 695.1
Non-controlling interests 2.6 7.0
EQUITY, TOTAL 799.4 702.1
NON-CURRENT LIABILITIES
Deferred tax liabilities
2.8
Pension obligations
4.9
Provisions
4.4
Financial liabilities
5.1
Lease liabilities
5.1
Contract liabilities
2.2
Trade and other payables
4.5
NON-CURRENT LIABILITIES, TOTAL 498.9 850.0
CURRENT LIABILITIES
Provisions
4.4
Financial liabilities
5.1
Lease liabilities
5.1
Income tax liabilities 0.6 12.9
Contract liabilities
2.2
Trade and other payables
4.5
CURRENT LIABILITIES, TOTAL 738.3 551.5
LIABILITIES, TOTAL 1,237.2 1,401.5
EQUITY AND LIABILITIES, TOTAL 2,036.6 2,103.6
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46
Changes in consolidated equity
Equity attributable to the equity holders of the Parent Company
EUR million Note Share capital
Treasury
shares
Fund for
invested
unrestricted
equity
Translation
differences
Retained
earnings
Hybrid
bond Total
Non-
controlling
interests Total
Equity at 1 Jan 2022
5.4
Result for the period 76.2 76.2 0.7 77.0
Other comprehensive income 2.3 -5.6 -3.3 -3.3
Total comprehensive income 2.3 70.6 72.9 0.7 73.6
Share-based compensation
6.2
-0.4 -0.4 -0.4
Shares delivered
6.2
Dividends paid -88.1 -88.1 -1.0 -89.1
Reclassification of translation differences -3.2 -3.2 -3.2
Total transactions with owners of the company 2.3 -94.0 -91.7 -1.0 -92.6
Acquisitions and other changes in non-controlling interest 0.2 0.2 0.0 0.2
Total change in ownership interest 0.2 0.2 0.0 0.2
Equity at 31 Dec 2022 71.3 -5.2 209.8 -17.3 436.5 695.1 7.0 702.1
Equity at 1 Jan 2023
5.4
Result for the period 3.3 3.3 0.8 4.1
Other comprehensive income 1.7 12.5 14.2 14.2
Total comprehensive income 1.7 15.8 17.5 0.8 18.3
Share-based compensation
6.2
Shares delivered
6.2
Dividends paid -60.4 -60.4 -0.7 -61.1
Total transactions with owners of the company 1.1 -58.1 -57.0 -0.7 -57.7
Acquisitions and other changes in non-controlling interest 1.7 1.7 -4.5 -2.8
Total change in ownership interest 1.7 1.7 -4.5 -2.8
Issuance of hybrid bond (net of issuance costs) 149.1 149.1 149.1
Interest on hybrid bond -9.6 -9.6 -9.6
Equity at 31 Dec 2023 71.3 -4.1 209.8 -15.7 386.5 149.1 796.8 2.6 799.4
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Consolidated cash flow statement
EUR million Note 2023 2022
OPERATIONS
Result for the period 4.1 77.0
Adjustments
Income taxes
2.8
Financial expenses
2.7
Financial income
2.7
-8.6 -9.5
Share of results in equity-accounted investees
4.7
-0.1 -0.2
Depreciation, amortisation and impairment losses 235.9 216.5
Gains/losses on sales of non-current assets -6.0 -3.3
Other adjustments 7.3 2.1
Adjustments total 284.1 249.9
Change in working capital
Change in trade and other receivables 38.6 46.5
Change in inventories 14.0 -6.4
Change in trade and other payables, and provisions -4.2 -35.7
Acquisitions of broadcasting rights, prepublication costs and
rental books -128.9 -111.2
Dividends received 0.6 0.6
Interest paid -30.1 -11.9
Other financial items 3.7 -1.3
Taxes paid -33.6 -42.8
CASH FLOW FROM OPERATIONS 148.2 164.6
INVESTMENTS
Capital expenditure -43.1 -52.9
Operations acquired
3.1
-0.4 -204.9
Acquisition of other investments -0.1
EUR million Note 2023 2022
Proceeds from sale of tangible and intangible assets 9.3 1.4
Operations sold
3.1
Sales of other investments 0.0
Loans granted 0.0 -3.2
Repayments of loan receivables 0.4
Interest received 2.2 0.8
CASH FLOW FROM INVESTMENTS -28.5 -250.7
CASH FLOW BEFORE FINANCING 119.6 -86.2
FINANCING
Proceeds from issue of hybrid bond (net of issuance costs) 148.9
Change in loans with short maturity
5.1
-69.7 69.7
Drawings of other loans
5.1
Repayments of other loans
5.1
-76.2 -124.7
Payment of lease liabilities
5.1
-31.1 -30.5
Acquisitions of non-controlling interests
3.1
-7.1 -1.0
Dividends paid -61.1 -89.1
CASH FLOW FROM FINANCING -95.8 74.6
Change in cash and cash equivalents according to cash flow
statement 23.9 -11.6
Effect of exchange rate differences on cash and cash
equivalents 0.3 0.2
Net increase(+)/decrease(-) in cash and cash equivalents 24.1 -11.4
Cash and cash equivalents at 1 Jan 41.0 52.4
Cash and cash equivalents at 31 Dec
5.3
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48
1. Accounting policies for Consolidated
Financial Statements
......................................................50
2. Financial performance ..................................................60
3. Acquisitions and capital expenditure ................ 75
4. Working capital and other
balance sheet items
.........................................................86
5. Capital structure and financial items ................94
6. Other notes...........................................................................105
Notes to the Consolidated Financial Statements
SANOMA ANNUAL REPORT 2023
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SANOMA ANNUAL REPORT 2023
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50
1.1 Corporate information
segments which are its two strategic business units, Sanoma Learning and Sanoma
Media Finland. This is aligned with the way Sanoma manages the businesses. Sanoma
Learning is one of the global leaders in K12 education serving about 25 million students
in 12 countries. Its learning products and services enable teachers to develop the talents
of every child to reach their potential. Sanoma Learning offers printed and digital learning
materials as well as digital learning and teaching platforms for K12, i.e. primary, secondary
and vocational education, and it aims to grow the business. Sanoma Learning develops
its methodologies based on deep teacher and student insight and truly understanding
their individual needs. By combining educational technologies and pedagogical expertise,
Sanoma Learning creates learning products and services with the highest learning impact.
Sanoma Media Finland is the leading cross-media company in Finland, reaching 97% of all
Finns weekly. It provides information, experiences, inspiration and entertainment through
multiple media platforms: newspapers, TV, radio, events, magazines, online and mobile
channels. Sanoma Media Finland has leading brands and services, like Helsingin Sanomat,
Ilta-Sanomat, Aamulehti, Me Naiset, Aku Ankka, Nelonen, Ruutu, Supla and Radio Suomipop.
For advertisers, it is a trusted partner with insight, impact and reach.
is listed on the Nasdaq Helsinki. The Parent Company is domiciled in Helsinki , Finland and
its registered office is T öölönlahdenkatu 2, 00100 Helsinki , Finland .
On 6 February 2024, Sanoma’s Board of Directors approved these financial statements to
be disclosed.
Copies of the consolidated financial statements are available at sanoma.com or from the
Parent Company’s head office.
1.2 Basis of preparation of financial statements
1.3 Accounting policies
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52
SANOMA ANNUAL REPORT 2023
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53
SANOMA ANNUAL REPORT 2023
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54
SANOMA ANNUAL REPORT 2023
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55
SANOMA ANNUAL REPORT 2023
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56
SANOMA ANNUAL REPORT 2023
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57
SANOMA ANNUAL REPORT 2023
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58
1.4 Adoption of new and amended standards and interpretations
The Group has applied the same accounting policies as in the Financial Statements 2022,
except for the effect of changes required by the adoption of the following new standards,
interpretations and amendments to standards and interpretations as of 1 January 2023:
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2. Financial performance
2.1 Operating segments ........................................................61
2.2 Net sales .................................................................................65
2.3 Other operating income .................................................69
2.4 Employee benefit expenses .........................................69
2.5 Materials and services and other operating
expenses ................................................................................69
2.6 Depreciation, amortisation and
impairment losses ............................................................70
2.7 Financial items .................................................................... 71
2.8 Income taxes and deferred taxes ..............................71
2.9 Earnings per share ............................................................74
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60
2.1 Operating segments
SANOMA ANNUAL REPORT 2023
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61
SANOMA ANNUAL REPORT 2023
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62
SANOMA ANNUAL REPORT 2023
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63
SANOMA ANNUAL REPORT 2023
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64
2.2 Net sales
SANOMA ANNUAL REPORT 2023
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65
SANOMA ANNUAL REPORT 2023
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66
SANOMA ANNUAL REPORT 2023
∙
67
SANOMA ANNUAL REPORT 2023
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68
2.5 Materials and services and other operating expenses
2.4 Employee benefit expenses
2.3 Other operating income
SANOMA ANNUAL REPORT 2023
∙
69
2.6 Depreciation, amortisation and impairment losses
SANOMA ANNUAL REPORT 2023
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70
2.7 Financial items
2.8 Income taxes and deferred taxes
SANOMA ANNUAL REPORT 2023
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71
SANOMA ANNUAL REPORT 2023
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72
SANOMA ANNUAL REPORT 2023
∙
73
2.9 Earnings per share
SANOMA ANNUAL REPORT 2023
∙
74
3. Acquisitions and
capital expenditure
3.1 Acquisitions and divestments .....................................76
3.2 Intangible assets ................................................................79
3.3 Property, plant and equipment and
right-of-use assets ............................................................83
SANOMA ANNUAL REPORT 2023
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75
3.1 Acquisitions and divestments
SANOMA ANNUAL REPORT 2023
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76
SANOMA ANNUAL REPORT 2023
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77
SANOMA ANNUAL REPORT 2023
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78
3.2 Intangible assets
SANOMA ANNUAL REPORT 2023
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79
SANOMA ANNUAL REPORT 2023
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80
SANOMA ANNUAL REPORT 2023
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81
SANOMA ANNUAL REPORT 2023
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82
3.3 Property, plant and equipment and right-of-use assets
SANOMA ANNUAL REPORT 2023
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83
SANOMA ANNUAL REPORT 2023
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84
SANOMA ANNUAL REPORT 2023
∙
85
4. Working capital and other
balance sheet items
4.1 Inventories ............................................................................. 87
4.2 Other receivables, non-current .................................. 87
4.3 Trade and other receivables, current ......................87
4.4 Provisions ...............................................................................88
4.5 Trade and other payables .............................................88
4.6 Investment property .........................................................89
4.7 Equity-accounted investees .........................................89
4.8 Other investments ............................................................. 90
4.9 Post-employment benefits ...........................................90
SANOMA ANNUAL REPORT 2023
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86
4.1 Inventories
4.2 Other receivables, non-current
4.3 Trade and other receivables, current
SANOMA ANNUAL REPORT 2023
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87
4.4 Provisions
4.5 Trade and other payables
SANOMA ANNUAL REPORT 2023
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88
4.6 Investment property
4.7 Equity-accounted investees
SANOMA ANNUAL REPORT 2023
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89
4.8 Other investments
4.9 Post-employment benefits
SANOMA ANNUAL REPORT 2023
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90
SANOMA ANNUAL REPORT 2023
∙
91
SANOMA ANNUAL REPORT 2023
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92
SANOMA ANNUAL REPORT 2023
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93
5. Capital structure and
financial items
5.1 Financial liabilities and lease liabilities .................95
5.2 Financial risk management .........................................97
5.3 Cash and cash equivalents ....................................... 102
5.4 Equity .....................................................................................103
5.5 Contingent liabilities ..................................................... 104
SANOMA ANNUAL REPORT 2023
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94
5.1 Financial liabilities and lease liabilities
SANOMA ANNUAL REPORT 2023
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95
SANOMA ANNUAL REPORT 2023
∙
96
5.2 Financial risk management
SANOMA ANNUAL REPORT 2023
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97
SANOMA ANNUAL REPORT 2023
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98
SANOMA ANNUAL REPORT 2023
∙
99
SANOMA ANNUAL REPORT 2023
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100
SANOMA ANNUAL REPORT 2023
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101
SANOMA ANNUAL REPORT 2023
∙
102
5.4 Equity
SANOMA ANNUAL REPORT 2023
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103
5.5 Contingent liabilities
SANOMA ANNUAL REPORT 2023
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104
6. Other notes
6.1 Related party transactions ........................................ 106
6.2 Share-based payments ..............................................106
6.3 Management compensation, benefits and
ownership ........................................................................... 111
6.4 Subsidiaries, associated companies and
joint ventures ..................................................................... 114
6.5 Events after the balance sheet date ..................... 115
SANOMA ANNUAL REPORT 2023
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105
6.1 Related party transactions
6.2 Share-based payments
SANOMA ANNUAL REPORT 2023
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106
SANOMA ANNUAL REPORT 2023
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107
SANOMA ANNUAL REPORT 2023
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108
SANOMA ANNUAL REPORT 2023
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109
SANOMA ANNUAL REPORT 2023
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110
6.3 Management compensation, benefits and ownership
SANOMA ANNUAL REPORT 2023
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111
SANOMA ANNUAL REPORT 2023
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112
SANOMA ANNUAL REPORT 2023
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113
6.4 Subsidiaries, associated companies and joint ventures
SANOMA ANNUAL REPORT 2023
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114
SANOMA ANNUAL REPORT 2023
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115
Parent Company
Financial Statements
Parent Company income statement, FAS ........117
Parent Company balance sheet, FAS .................. 117
Parent Company cash flow statement, FAS .... 118
Notes to the Parent Company Financial
Statements
.................................................................................119
1. Parent Company’s accounting policies for Financial
Statements
...................................................................................119
2. Net sales
.......................................................................................119
3. Other operating income
.........................................................119
4. Personnel expenses
.................................................................120
5. Other operating expenses
.....................................................120
6. Financial income and expenses
..........................................120
7. Income taxes
...............................................................................120
8. Intangible assets
.......................................................................121
9. Tangible assets
..........................................................................122
10. Investments
.............................................................................. 123
11. Receivables
..............................................................................124
12. Shareholders' equity
.............................................................124
13. Appropriations
........................................................................125
14. Non-current liabilities
...........................................................125
15. Current liabilities
.....................................................................125
16. Contingent liabilities
..............................................................126
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Parent Company income statement, FAS
EUR million Note 2023 2022
Net sales
2
63.4 57.8
Other operating income
3
3.4 4.1
Personnel expenses
4
-19.2 -18.4
Depreciation, amortisation and impairment losses
8–10
-1.2 -0.6
Other operating expenses
5
-57.4 -54.1
OPERATING PROFIT (LOSS) -11.0 -11.2
Financial income and expenses
6
2.2 93.7
RESULT BEFORE APPROPRIATIONS AND TAXES -8.8 82.5
Appropriations
13
9.5 48.1
Income taxes
7
0.2 -7.6
RESULT FOR THE YEAR 0.9 123.0
Parent Company balance sheet, FAS
Assets
EUR million Note 31 Dec 2023 31 Dec 2022
NON-CURRENT ASSETS
Intangible assets
8
3.4 4.2
Tangible assets
9
4.7 7.1
Investments
10
1,438.9 1,513.4
Long-term receivables
11
1.8 2.4
NON-CURRENT ASSETS, TOTAL 1,448.8 1,527.1
CURRENT ASSETS
Short-term receivables
11
71.9 125.1
Cash and cash equivalents 44.5 19.2
CURRENT ASSETS, TOTAL 116.4 144.2
ASSETS, TOTAL 1,565.2 1,671.3
Equity and liabilities
EUR million Note 31 Dec 2023 31 Dec 2022
SHAREHOLDERS' EQUITY
12
Share capital 71.3 71.3
Treasury shares -4.1 -5.2
Fund for invested unrestricted equity 209.8 209.8
Retained earnings 401.9 337.8
Profit for the year 0.9 123.0
SHAREHOLDERS' EQUITY, TOTAL 679.7 736.7
APPROPRIATIONS
13
0.9 0.5
LIABILITIES
Non-current liabilities
14
399.7 599.2
Current liabilities
15
484.9 334.9
LIABILITIES, TOTAL 884.6 934.1
EQUITY AND LIABILITIES, TOTAL 1,565.2 1,671.3
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Parent Company cash flow statement, FAS
EUR million 2023 2022
OPERATIONS
Result for the period 0.9 123.0
Adjustments
Income taxes -0.2 7.6
Appropriations -9.5 -48.1
Financial income and expenses -2.2 -93.7
Depreciation, amortisation and impairment losses 1.2 0.6
Gains / losses on sale of non-current assets -3.0 -1.9
Other adjustments 3.2 3.3
Change in working capital
Change in trade and other receivables 24.0 4.7
Change in trade and other payables, and provisions -4.5 -4.3
Dividends received 1.9 63.0
Interest paid -28.6 -8.0
Other financial items 2.8 -0.7
Taxes paid 0.2 -8.2
CASH FLOW FROM OPERATIONS -13.7 37.3
EUR million 2023 2022
INVESTMENTS
Acquisition of tangible and intangible assets -0.7 -3.6
Sales of tangible and intangible assets 5.4 0.1
Group companies sold 1.8
Repayments of capital 10.9
Loans granted -9.7 -219.5
Repayments of loan receivables 79.4 12.5
Interest received 35.2 10.6
CASH FLOW FROM INVESTMENTS 109.6 -187.2
CASH FLOW BEFORE FINANCING 95.9 -149.8
FINANCING
Change in loans with short maturity -68.9 69.7
Drawings of other loans 189.3 344.5
Repayments of other loans -179.1 -235.7
Dividends paid -60.4 -88.1
Group contributions 48.6 46.0
CASH FLOW FROM FINANCING -70.5 136.4
Change in cash and cash equivalents according to cash flow
statement 25.4 -13.5
Net increase(+)/decrease(-) in cash and cash equivalents 25.4 -13.5
Cash and cash equivalents at 1 Jan 19.2 32.7
Cash and cash equivalents at 31 Dec 44.5 19.2
SANOMA ANNUAL REPORT 2023
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Notes to the Parent Company Financial Statements
1. Parent Company’s accounting policies for Financial Statements
Sanoma Corporation is a public limited-liability company, which is domiciled in Helsinki.
Sanoma Corporation was founded on 1 May 1999 as the result of a combination merger.
Sanoma Corporation’s financial statements have been prepared according to Finnish
Accounting Standards (FAS). Sanoma Corporation is the Parent Company of Sanoma
Group. Sanoma has prepared its consolidated financial statements in accordance with
most recent International Financial Reporting Standards (IFRS). The Finnish accounting
practices applied by Sanoma Corporation and accounting principles of IFRS standards are
mainly consistent thus the main accounting principles are available in accounting policies
of consolidated financial statements.
The most significant differences between the accounting policies of Parent company and
Sanoma Group are the following:
Pensions
Statutory pension cover of Sanoma Corporation’s employees is managed by pension
insurance companies. Supplementary pension benefits are managed by Sanoma Pension
Fund and by insurance companies. Pension settlements and pension costs are recognised
during the period in which they are incurred. The potential deficit of pension fund’s pension
liability has been recognised as an obligatory provision under the balance sheet of Sanoma
Corporation.
Interest in Group companies
Interest in Group companies is measured at cost less any impairment losses. Interest in
Group companies is tested for impairment annually. Impairment testing also includes net
receivables from subsidiaries.
The fair value of the subsidiary shares has been assessed based on income approach, in
which the fair value of investment is calculated based on the discounted cash flow model
(DCF) or the dividend discount model. Impairment need is assessed by comparing the fair
value of the subsidiary shares to the book value in the parent company’s balance sheet and
possible write-down is booked through profit or loss.
Real estate investments and housing property investments
In accordance with Finnish Accounting Act investments in real estates and housing property
are presented as investments of non-current assets.
2. Net sales
EUR million 2023 2022
Net sales by business
Management and service fees 63.4 57.8
Total 63.4 57.8
Net sales by market areas
Finland 28.1 28.9
Other EU-countries 32.2 25.6
Other countries 3.1 3.3
Total 63.4 57.8
3. Other operating income
EUR million 2023 2022
Rental income 0.1 0.1
Capital gains 3.0 1.9
Other 0.3 2.1
Total 3.4 4.1
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4. Personnel expenses
EUR million 2023 2022
Wages, salaries and fees -16.7 -16.2
Pension costs -1.6 -1.9
Other social expenses -0.9 -0.3
Total -19.2 -18.4
Average number of employees (full-time equivalents) 125 129
The remuneration to the President and CEO and Board of Directors is presented separately,
divided by persons, in Note 6.3 to the Financial Statements.
5. Other operating expenses
EUR million 2023 2022
Office and ICT expenses -45.8 -38.1
Professional fees -3.0 -9.4
Rents -1.0 -0.6
Other -7.6 -6.0
Total -57.4 -54.1
PRINCIPAL AUDIT FEES
EUR million 2023 2022
Statutory audit -0.3 -0.4
Total -0.3 -0.4
6. Financial income and expenses
EUR million 2023 2022
Dividend income
From Group companies 1.9 91.0
Total 1.9 91.0
Interest income from investments under non-current assets
From Group companies 37.9 12.8
Total 37.9 12.8
Other interest and financial income
From Group companies 2.5 0.6
From other companies 1.8 2.0
Exchange rate gains 5.1 3.3
Total 9.4 5.9
Interest and other financial expenses
To Group companies -5.1 -1.3
To other companies -37.7 -11.2
Exchange rate losses -4.3 -3.6
Total -47.1 -16.0
Total 2.2 93.7
7. Income taxes
EUR million 2023 2022
Income tax on operational income -0.1 -7.6
Income taxes from previous periods 0.4 0.0
Total 0.2 -7.6
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8. Intangible assets
INTANGIBLE ASSETS 2023
EUR million
Immaterial
rights
Other
intangible assets
Advance
payments Total
Acquisition cost at 1 Jan 0.0 10.2 1.0 11.2
Increases 0.4 0.4
Decreases -1.7 -0.1 -1.8
Reclassifications 0.9 -0.9
Acquisition cost at 31 Dec 0.0 9.8 0.0 9.8
Accumulated amortisation and impairment losses at 1 Jan -7.0 -7.0
Decreases 1.7 1.7
Amortisation for the period -1.0 -1.0
Accumulated amortisation and impairment losses at 31 Dec -6.4 -6.4
Book value at 31 Dec 2023 0.0 3.4 0.0 3.4
INTANGIBLE ASSETS 2022
EUR million
Immaterial
rights
Other
intangible assets
Advance
payments Total
Acquisition cost at 1 Jan 0.0 14.8 2.4 17.2
Increases 1.7 1.3 3.0
Decreases -7.5 -1.4 -8.9
Reclassifications 1.1 -1.3 -0.2
Acquisition cost at 31 Dec 0.0 10.2 1.0 11.2
Accumulated amortisation and impairment losses at 1 Jan 0.0 -10.5 -10.5
Decreases 3.9 3.9
Amortisation for the period -0.4 -0.4
Accumulated amortisation and impairment losses at 31 Dec 0.0 -7.0 -7.0
Book value at 31 Dec 2022 0.0 3.1 1.0 4.2
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9. Tangible assets
TANGIBLE ASSETS 2023
EUR million Land and water
Machinery and
equipment Other
Advance
payments Total
Acquisition cost at 1 Jan 6.4 0.9 0.3 7.6
Increases 0.1 0.0 0.1
Decreases -2.3 -0.2 -2.5
Acquisition cost at 31 Dec 4.2 0.7 0.3 5.2
Accumulated depreciation and impairment losses at 1 Jan -0.5 -0.5
Decreases 0.2 0.2
Depreciation for the period -0.2 -0.2
Accumulated depreciation and impairment losses at 31 Dec -0.5 -0.5
Book value at 31 Dec 2023 4.2 0.3 0.3 4.7
TANGIBLE ASSETS 2022
EUR million Land and water
Machinery and
equipment Other
Advance
payments Total
Acquisition cost at 1 Jan 6.4 1.3 0.3 0.2 8.2
Increases 0.2 0.2
Decreases -0.7 -0.7
Reclassifications -0.2 -0.2
Acquisition cost at 31 Dec 6.4 0.9 0.3 7.6
Accumulated depreciation and impairment losses at 1 Jan -0.8 -0.8
Decreases 0.6 0.6
Depreciation for the period -0.2 -0.2
Accumulated depreciation and impairment losses at 31 Dec -0.5 -0.5
Book value at 31 Dec 2022 6.4 0.4 0.3 7.1
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10. Investments
INVESTMENTS 2023
EUR million
Interest in Group
companies
Receivables from
Group companies
Interest in
associated
companies
Other shares
and holdings Total
Acquisition cost at 1 Jan 1,352.8 886.2 0.2 5.2 2,244.4
Increases 4.8 4.8
Decreases -717.3 -79.3 -796.6
Acquisition cost at 31 Dec 635.5 811.7 0.2 5.2 1,452.6
Accumulated impairment losses at 1 Jan -730.2 -0.8 -731.0
Decreases 717.3 717.3
Accumulated impairment losses at 31 Dec -12.9 -0.8 -13.7
Book value at 31 Dec 2023 622.6 811.7 0.2 4.4 1,438.9
INVESTMENTS 2022
EUR million
Interest in Group
companies
Receivables from
Group companies
Interest in
associated
companies
Other shares
and holdings Total
Acquisition cost at 1 Jan 1,362.7 687.4 0.2 5.2 2,055.6
Increases 0.1 198.7 198.8
Decreases
1
-10.0 -10.0
Acquisition cost at 31 Dec 1,352.8 886.2 0.2 5.2 2,244.4
Accumulated impairment losses at 1 Jan -730.2 -0.8 -731.0
Accumulated impairment losses at 31 Dec -730.2 -0.8 -731.0
Book value at 31 Dec 2022 622.6 886.2 0.2 4.4 1,513.4
1
In 2022, decreases in interests in Group companies include capital refunds of EUR 10.0 million.
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11. Receivables
LONG-TERM RECEIVABLES
EUR million 2023 2022
Accrued income
1
1.8 2.4
SHORT-TERM RECEIVABLES
EUR million 2023 2022
Trade receivables 2.0 1.2
Loan receivables 39.1 34.3
Accrued income
1
30.7 89.5
Total 71.9 125.1
Receivables from Group companies
Trade receivables 1.9 1.2
Loan receivables 39.1 34.3
Accrued income 22.9 82.8
Total 63.9 118.3
1
Most significant items under accrued items are the Group contributions and interest income accruals.
12. Shareholders' equity
EUR million 2023 2022
Restricted equity
Share capital at 1 Jan 71.3 71.3
Share capital at 31 Dec 71.3 71.3
Restricted equity 31 Dec 71.3 71.3
Unrestricted equity
Treasury shares at 1 Jan -5.2 -7.5
Shares delivered 1.1 2.3
Treasury shares at 31 Dec -4.1 -5.2
Fund for invested unrestricted equity at 1 Jan 209.8 209.8
Fund for invested unrestricted equity at 31 Dec 209.8 209.8
Retained earnings at 1 Jan 460.8 424.9
Dividends paid -60.4 -88.1
Share based payments 2.2 1.6
Shares delivered -0.7 -0.6
Retained earnings at 31 Dec 401.9 337.8
Result for the year 0.9 123.0
Unrestricted equity 31 Dec 608.5 665.4
Total 679.7 736.7
Further information on share capital is presented in Note 5.4 to the Financial Statements.
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DISTRIBUTABLE EARNINGS
EUR million 2023 2022
Treasury shares -4.1 -5.2
Fund for invested unrestricted equity 209.8 209.8
Retained earnings 401.9 337.8
Result for the year 0.9 123.0
Total 608.5 665.4
13. Appropriations
EUR million 2023 2022
Group contributions 9.8 48.6
Cumulative depreciation differences -0.3 -0.5
Total 9.5 48.1
14. Non-current liabilities
EUR million 2023 2022
Debentures 150.0 199.7
Loans from financial institutions 250.0 400.0
Accrued expenses -0.3 -0.5
Total 399.7 599.2
15. Current liabilities
EUR million 2023 2022
Debentures 199.9
Loans from financial institutions 100.8 25.0
Commercial papers 69.7
Trade payables 1.8 7.2
Accrued expenses
1
20.2 10.3
Advances received 0.3 0.0
Other liabilities 161.8 222.7
Total 484.8 334.9
Liabilities to Group companies
Trade payables 0.4 0.6
Accrued expenses 0.0
Other liabilities
2
161.4 222.5
Total 161.8 223.1
1
Most significant items under accrued items are related to expense accruals and accrued personnel
expenses. In 2023, accrued expenses include EUR 9.5 million accrued interest on hybrid bond.
2
Other liabilities to the Group companies include balances in IHC account.
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16. Contingent liabilities
EUR million 2023 2022
Contingencies for own commitments
Other contingent liability for own commitments 15.0 15.0
Total 15.0 15.0
Contingencies incurred on behalf of Group companies
Guarantees 118.4 151.5
Total 118.4 151.5
Other liabilities
1
54.6 64.0
Total 54.6 64.0
Total 188.0 230.5
1
Other liabilities include commitments of contracts. In 2022, a new significant contract was signed with
an external operator.
NOMINAL VALUES OF DERIVATIVES
EUR million 2023 2022
Currency derivatives
Forward exchange contracts, external 9.7 15.0
Forward exchange contracts, internal 0.0 0.0
Total 9.8 15.1
FAIR VALUES OF DERIVATIVES
EUR million 2023 2022
Currency derivatives
Forward exchange contracts, external 0.0 -0.1
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Board’s proposal for
distribution of profits
The retained earnings of the parent company Sanoma Corporation according to the
balance sheet as at 31 December 2023 were EUR 398,712,668.43 of which the profit for
the financial year 2023 was EUR 864,830.61. Including the fund for invested unrestricted
equity of EUR 209,767,212.33 the distributable funds amounted to EUR 608,479,880.76 at 31
December 2023.
The Board of Directors will propose to the Annual General Meeting that
No essential changes have taken place in the financial status of the Company after the
financial year. The Company’s liquidity is good and according to the Board of Directors the
proposed dividend will not compromise the Company’s liquidity.
*
The dividend will be paid in three instalments. The first instalment of EUR 0.13 per share shall be
paid to a shareholder who is registered in the shareholder register of the Company maintained by
Euroclear Finland Ltd on the dividend record date 19 April 2024. The payment date proposed by the
Board of Directors for this instalment is 26 April 2024.
The second instalment of EUR 0.13 per share shall be paid in September 2024. The second instalment
shall be paid to a shareholder who is registered in the shareholder register of the Company
maintained by Euroclear Finland Ltd on the dividend record date, which, together with the dividend
payment date, shall be decided by the Board of Directors in its meeting scheduled for 12 September
2024.
The third instalment of EUR 0.11 per share shall be paid in November 2024. The third instalment shall
be paid to a shareholder who is registered in the shareholder register of the Company maintained by
Euroclear Finland Ltd on the dividend record date, which, together with the dividend payment date,
shall be decided by the Board of Directors in its meeting scheduled for 30 October 2024.
Board’s proposal for
distribution of profits
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Signatures to the Financial Statements and the
Report of the Board of Directors
Signatures to the Financial Statements
and the Report of the Board of Directors
Helsinki, 6 February 2024
Pekka Ala-Pietilä Nils Ittonen Julian Drinkall
Chair Vice Chair
Rolf Grisebach Anna Herlin Mika Ihamuotila
Denise Koopmans Sebastian Langenskiöld Eugenie van Wiechen
Rob Kolkman
President and CEO
Auditor's note
A report on the audit performed has been issued today.
Helsinki, 1 March 2024
PricewaterhouseCoopers Oy
Authorised Public Accountants
Samuli Perälä
APA
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To the Annual General Meeting of Sanoma Corporation
Report on the Audit of the Financial Statements
Opinion
In our opinion
■
the consolidated financial statements give a true and fair view of the group’s financial
position and financial performance and cash flows in accordance with IFRS Accounting
Standards as adopted by the EU.
■
the financial statements give a true and fair view of the parent company’s financial
performance and financial position in accordance with the laws and regulations
governing the preparation of the financial statements in Finland and comply with
statutory requirements.
Our opinion is consistent with the additional report to the Audit Committee.
What we have audited
We have audited the financial statements of Sanoma Corporation (business identity code
1524361-1) for the year ended 31 December 2023. The financial statements comprise:
■
the consolidated balance sheet, consolidated income statement, statement of
comprehensive income, changes in consolidated equity, consolidated cash flow
statement and notes to the consolidated financial statements which include material
accounting policy information and other explanatory information
■
the parent company balance sheet, parent company income statement, parent company
cash flow statement and notes to the parent company financial statements.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our
responsibilities under good auditing practice are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We are independent of the parent company and of the group companies in accordance with
the ethical requirements that are applicable in Finland and are relevant to our audit, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, the non-audit services that we have provided to the
parent company and to the group companies are in accordance with the applicable law
and regulations in Finland and we have not provided non-audit services that are prohibited
under Article 5(1) of Regulation (EU) No 537/2014. The non-audit services that we have
provided are disclosed in note 2.5 to the consolidated financial statements.
Materiality
Audit Scope
Key Audit
Matters
Our Audit Approach
Overview
■
We have applied an overall group materiality of
9,300,000 euros.
■
The group audit scope encompassed the most
significant group companies and covers the vast
majority of group’s revenues, assets and liabilities.
■
Valuation of goodwill and other intangible assets
identified in business combinations
■
Valuation of prepublication rights included in intangible
assets
■
Revenue recognition
■
Valuation of interests in group companies and
receivables from group companies in the Parent
Company’s financial statements
Auditor’s Report
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Auditor’s Report (Translation of the Finnish Original)
SANOMA ANNUAL REPORT 2023
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As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we considered where management
made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently
uncertain.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed
to obtain reasonable assurance whether the financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material
if individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for
materiality, including the overall group materiality for the consolidated financial statements
as set out in the table below. These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements on the financial statements as a whole.
Overall group materiality 9,300,000 euros
How we determined it We used a combination of net sales and result before taxes
as benchmarks to determine overall group materiality.
Rationale for the materiality
benchmark applied
We determined that net sales and result before taxes as
a combination provide a suitable representation of the
volume of Sanoma’s operations and profitability.
How we tailored our group audit scope
At the end of 2023 Sanoma Group includes two reportable segments: Sanoma Learning
and Sanoma Media Finland. Sanoma Learning’s main markets are the Netherlands, Spain,
Poland, Italy, Belgium, and Finland. We have scoped our audit to obtain sufficient audit
coverage of Sanoma Group consolidated financial statements. The group audit scope
encompassed the most significant group companies and covers the vast majority of group’s
revenues, assets and liabilities.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
As in all of our audits, we also addressed the risk of management override of internal
controls, including among other matters consideration of whether there was evidence of
bias that represented a risk of material misstatement due to fraud.
Key audit matter in the audit of the group How our audit addressed the key audit matter
Valuation of goodwill and other intangible
assets identified in business combinations
Refer to Accounting policies for consolidated
financial statements and Note 3.2.
As of December 2023, Goodwill amounted to
EUR 812 million. Other intangible assets and
immaterial rights amounted to EUR 537 million
including other intangible assets identified in
business combinations.
Goodwill is not amortized but tested at least once
a year for possible impairment. Other intangible
assets are amortized using the straight-line
method over their useful lives. For the purpose of
impairment testing, goodwill has been allocated
to two cash flow generating units (CGU):
• Sanoma Learning, goodwill of EUR 701 million
• Sanoma Media Finland, goodwill of EUR 112
million.
The goodwill impairment testing is carried out
by determining the present value of future cash
flows of the CGUs. This assessment involves
considerable management judgment with respect
to assumptions used in the cash flow projections
specifically relating to the long-term growth rate,
profitability level and discount rate.
The valuation of goodwill and other intangible
assets identified in business combinations
are considered a key audit matter due to
their financial significance as well as due to
the management judgement involved in the
valuation.
Our audit procedures included, for example, the
following:
• We obtained an understanding of the
methodology used in the goodwill impairment
testing
• We tested the mathematical accuracy of the
calculations
• We assessed the reasonableness of the
estimated future profitability levels and their
consistency with the approved budgets and
forecasts
• We tested the reasonableness of the discount
rates, the long-term growth rates, and other
assumptions by e.g., comparing the inputs to
observable market data
• We tested management’s sensitivity
analysis to ascertain the extent of change in
key assumptions that either individually or
collectively could result in an impairment of
goodwill
• We evaluated the management’s estimate of
the amortization period used for intangible
assets, including those identified in business
combinations.
• We assessed the adequacy of the disclosures.
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Key audit matter in the audit of the group How our audit addressed the key audit matter
Valuation prepublication rights included in
intangible assets
Refer to Accounting policies for consolidated
financial statements and Note 3.2.
As of December 31, 2023, prepublication rights
amount to EUR 138 million.
The prepublication rights of learning materials
and solutions are mostly internally generated
intangible assets that are amortized using the
straight-line method over their useful lives.
The group reviews the carrying values of these
intangible assets to determine that they do not
exceed the estimated future economic benefits.
Valuation of these intangible assets is considered
a key audit matter due to management
judgement involved in determining the
amortization period and in assessing the
recoverability of these assets.
Our audit procedures included, for example, the
following:
• We obtained an understanding of the
accounting and valuation principles of the
prepublication rights
• We evaluated the management’s estimate
of the amortization period used for the
prepublication rights
• We evaluated management’s estimate of the
future economic benefits of these assets
• We tested, on a sample basis, additions to the
prepublication rights.
Revenue recognition
Refer to Note 2.2. in the consolidated financial
statements
The group’s net sales from continued operations
amount to EUR 1 393 million.
Revenue from the Learning segment is primarily
generated through sale of educational books and
granting access to online learning platforms as
well as physical distribution of learning materials.
The Media Finland segment principally generates
revenue through magazine and newspaper
publishing (circulation sales and advertising
sales), TV and Radio operations, online and
subscription video on demand services as well
as events. Revenue recognition principles vary
depending on the nature of the revenue stream.
Revenue recognition is considered a key audit
matter due to the significance of revenue to the
financial statements and due to management
judgement involved in selecting the appropriate
revenue recognition method for the different
revenue streams.
Our audit procedures included, for example, the
following:
• We obtained an understanding of the
company’s revenue recognition policies and
compared these to the respective standards on
revenue recognition
• We tested the internal controls that the
company uses to assess the completeness,
accuracy and timing of revenue recognized
• We tested revenue contracts and transactions
on a sample basis
• We tested, on a sample basis, revenue related
balances in the balance sheet, such as
provision for returns and advances received.
Key audit matter in the audit of the group How our audit addressed the key audit matter
Valuation of interests in group companies
and receivables from group companies in the
Parent Company’s financial statements
Refer to the Parent Company’s accounting
policies and Note 10
The investments in group companies’ shares
amounts to EUR 623 million. The Parent
Company’s investments also include EUR 812
million of loan receivables from group companies.
Interest in group companies is tested for
impairment annually using the income approach.
In applying this approach, the fair value of an
investment is calculated based on the discounted
cash flow model or the discounted dividend
model.
Valuation of interests in group companies and
receivables from group companies is considered
a key audit matter in the audit of the Parent
Company due to the significance of these
investments to the financial statements and
due to management judgement involved in the
income approach used to test the valuation of
these investments.
Our audit procedures included, for example, the
following:
• We assessed the reasonableness of
management assumptions relating to the
estimated future results by e.g., checking their
consistency with the approved budgets and
forecasts
• We assessed the inputs and methodology
in determining the discount rates, and in
evaluating the long-term growth rates by e.g.,
comparing the inputs to observable market
data
• We reviewed the Parent Company’s disclosures
in respect of the impairment testing.
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU)
No 537/2014 with respect to the consolidated financial statements or the parent company financial
statements.
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132
Responsibilities of the Board of Directors and the President and CEO for the
Financial Statements
The Board of Directors and the President and CEO are responsible for the preparation of
consolidated financial statements that give a true and fair view in accordance with IFRS
Accounting Standards as adopted by the EU, and of financial statements that give a true and
fair view in accordance with the laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements. The Board of Directors and
the President and CEO are also responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the President and CEO
are responsible for assessing the parent company’s and the group’s ability to continue as
a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting. The financial statements are prepared using the going
concern basis of accounting unless there is an intention to liquidate the parent company or
the group or to cease operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with good auditing
practice will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
■
●Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
■
●Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the parent company’s or the group’s
internal control.
■
●Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
■
●Conclude on the appropriateness of the Board of Directors’ and the President and
CEO’s use of the going concern basis of accounting and based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the parent company’s or the group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the parent company or the group to cease to continue as a going
concern.
■
●Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events so that the financial statements give a true and fair view.
■
●Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in
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133
extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Other Reporting Requirements
Appointment
We were first appointed as auditors by the annual general meeting on 21 March 2017.
Other Information
The Board of Directors and the President and CEO are responsible for the other information.
The other information comprises the report of the Board of Directors and the information
included in the Annual Report, but does not include the financial statements and our
auditor’s report thereon.
Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. With respect to the report of the Board of
Directors, our responsibility also includes considering whether the report of the Board of
Directors has been prepared in accordance with the applicable laws and regulations.
In our opinion
■
●the information in the report of the Board of Directors is consistent with the information in
the financial statements
■
●the report of the Board of Directors has been prepared in accordance with the applicable
laws and regulations.
If, based on the work we have performed, we conclude that there is a material misstatement
of the other information, we are required to report that fact. We have nothing to report in
this regard.
Other statements
We support the adoption of the financial statements. The proposal by the Board of Directors
regarding the treatment of distributable funds is in compliance with the Limited Liability
Companies Act. We support that the Board of Directors of the parent company and the
President and CEO be discharged from liability for the financial period audited by us.
Helsinki 1 March 2024
PricewaterhouseCoopers Oy
Authorised Public Accountants
Samuli Perälä
Authorised Public Accountant (KHT)
Independent Auditor’s Reasonable Assurance Report on
Sanoma Corporation's ESEF Financial Statements
(Translation)
Independent Auditor’s Reasonable Assurance Re-
port on Sanoma Corporation's ESEF Financial State-
ments (Translation)
To the Management of Sanoma Oyj
We have been engaged by the Management of Sanoma Oyj (business identity code 1524361-
1) (hereinafter also “the Company”) to perform a reasonable assurance engagement on
the Company’s consolidated IFRS financial statements for the financial year 1.1.2023-
31.12.2023 in European Single Electronic Format (“ESEF financial statements”) version
743700XJC24THUPK0S03-2023-12-31-fi.zip.
Management’s Responsibility for the ESEF Financial Statements
The Management of Sanoma Oyj is responsible for preparing the ESEF financial statements
so that they comply with the requirements as specified in the Commission Delegated
Regulation (EU) 2019/815 of 17 December 2018 (“ESEF requirements”). This responsibility
includes the design, implementation and maintenance of internal control relevant to the
preparation of ESEF financial statements that are free from material noncompliance with the
ESEF requirements, whether due to fraud or error.
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the International
Code of Ethics for Professional Accountants (including International Independence Standards)
issued by the International Ethics Standards Board for Accountants (IESBA Code), which is
founded on fundamental principles of integrity, objectivity, professional competence and due
care, confidentiality and professional behaviour.
Our firm applies International Standard on Quality Management 1, which requires the firm
to design, implement and operate a system of quality management including policies or
procedures regarding compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Our Responsibility
Our responsibility is to express an opinion on the ESEF financial statements based on the
procedures we have performed and the evidence we have obtained.
We conducted our reasonable assurance engagement in accordance with the International
Standard on Assurance Engagements (ISAE) 3000 (Revised) Assurance Engagements Other
than Audits or Reviews of Historical Financial Information. That standard requires that we
plan and perform this engagement to obtain reasonable assurance about whether the ESEF
financial statements are free from material noncompliance with the ESEF requirements.
A reasonable assurance engagement in accordance with ISAE 3000 (Revised) involves
performing procedures to obtain evidence about the ESEF financial statements compliance with
the ESEF requirements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material noncompliance of the ESEF financial statements with the ESEF
requirements, whether due to fraud or error. In making those risk assessments, we considered
internal control relevant to the Company’s preparation of the ESEF financial statements.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, Sanoma Oyj’s ESEF financial statements for the financial year ended
31.12.2023 comply, in all material respects, with the minimum requirements as set out in the
ESEF requirements.
Our reasonable assurance report has been prepared in accordance with the terms of our
engagement. We do not accept, or assume responsibility to anyone else, except for Sanoma
Oyj for our work, for this report, or for the opinion that we have formed.
Helsinki 1 March 2024
PricewaterhouseCoopers Oy
Authorised Public Accountants
Samuli Perälä
Authorised Public Accountant (KHT)
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134
Annual General Meeting 2024
The Annual General Meeting 2024 will be held on
Wednesday, 17 April 2024 at 14:00 EET. The registration
and advance voting will begin on 14 March 2024 at
10:00 EET.
More information can be found at sanoma.com/agm.
Dividend
The Board of Directors proposes to the Annual General
Meeting that a dividend of EUR 0.37 per share shall be paid
in three instalments.
First instalment of EUR 0.13 per share
■
Record date 19 April 2024
■
Payment date 26 April 2024
Second instalment of EUR 0.13 per share
■
The record date for the second instalment will be
decided by the Board of Directors in September, and the
payment date will be in September.
Third instalment of EUR 0.11 per share
■
The record date for the third instalment will be decided
by the Board of Directors in October, and the payment
date will be in November.
Financial reporting in 2024
Sanoma will publish the following financial reports
during 2024:
■
Interim Report 1 January–31 March 2024 Wednesday, 8
May 2024
■
Half-Year Report 1 January–30 June 2024 Wednesday,
24 July 2024
■
Interim Report 1 January–30 September 2024 Thursday,
31 October 2024
The reports are published in Finnish and English and can be
downloaded at sanoma.com.
Changes in contact information
Euroclear Finland Ltd maintains a list of the Company’s
shares and shareholders. Shareholders who wish to change
their personal or contact information are kindly asked to
directly contact their own securities account operator.
Sanoma’s Investor Relations
The main task of Sanoma Investor Relations is to ensure
that the capital markets have correct and sufficient
information in order to determine the value of Sanoma
share. Sanoma has a centralised Investor Relations function
that serves analysts and investors, and coordinates
investor meetings and activities.
Contact information
Kaisa Uurasmaa
Head of Investor Relations and Sustainability
Mobile: +358 40 560 5601
kaisa.uurasmaa@sanoma.com
Meeting requests and inquiries
ir@sanoma.com
sanoma.com/en/investors
Information for investors
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135
Information for investors
Sanoma is a sustainable investment
with a positive impact on society.
Learn more about reasons to invest
in Sanoma
LEARN MORE ►
