"We want to make the most of our resources and capital – which means we need to prioritise and choose those assets with the best strength and potential," says Kim Ignatius, Chief Financial Officer at Sanoma.   

Sanoma is taking firm steps towards the mid-term financial targets that were defined in 2013. These are organic growth, improved profitability and lowered leverage.

"Our strategy focuses on internal organic growth projects rather than acquisitions, with smaller acquisitions made to support our strategic roadmap. This approach, together with significant cash flow from the sale of real estate and non-core assets, has clearly improved Sanoma’s capital structure. Working towards improved profitability and leaving restructuring-related one-time costs behind us will clearly improve the cash flow from 2016 onwards. With all these efforts, our balance sheet is strong enough to support the execution of our strategy," says Kim Ignatius.

Investments

Investments are needed to support the organic growth in new products and services, in media, as well as in learning. "Still, we are to some extent relying on the operational cash flows from more traditional, and in many cases, declining categories. What is required is a continuing effort to redesign our ways of operating. We must look for opportunities to improve efficiency and re-allocate our operational spending to areas of growth."

In early spring 2015, Sanoma will reach the EUR100 million annual run rate target set for its Group-wide savings programme – achieved close to a year earlier than originally planned.  "These savings off-set lost margins in declining traditional media categories. They also help us make the necessary investments in migrating our brands and services to meet changing customer requirements.  Sanoma New Media sales grew in 2014 by 5,7%  to EUR 536 million, representing 42% of media sales in the Netherlands and Finland, our core markets. We are on the right track."