"This is a great company, with a great heritage and a great future"
Three years into its transformation process, Sanoma has reinvented itself as a digitally savvy company. With the organisation’s structure, strategy and culture firmly defined, Sanoma is making confident strides towards organic growth in 2016. CEO Harri-Pekka Kaukonen explains why Sanoma’s credibility was restored in 2014 and why growth and culture will be the core themes of 2015.
A few years ago, Sanoma was in dire straits. The advertising market was hit hard by Europe’s economic woes and the print industry was being pummelled by the rise of digital media. Sanoma, with a portfolio that emphasised print, lacked a decisive response. Growth was negative and people felt frustrated. It was then that Sanoma embarked on an ambitious multi-year transformation programme to radically alter the structure, strategy and culture of the organisation.
Pockets of growth
2014 was intense and tough, but Kaukonen is pleased that everybody’s hard work paid off. "We reduced negative revenue growth from -6.6% to -3.7%, and we’re already seeing pockets of growth. Sanoma Learning is a leading player with fantastic opportunities for international expansion. The media business in the Netherlands is doing better. In week 52, we had the largest inflow of new magazine subscriptions in three years. Finland has shown strong developments across all businesses, TV, radio, news and lifestyle."
There were obstacles, too. Print revenues continued to decline. The Finnish advertising market declined for the third year in a row. Digital growth in Finland and Netherlands was unable to fully compensate for the on-going deterioration in print. Dutch TV advertising slumped in the second half of the year after the FIFA World Cup football, and Poland’s learning market was affected when the government decided to pay for educational materials instead of parents, and introduced a cap on the total market.
And while Sanoma’s overall performance in advertising has been remarkably strong, it has proven hard to find new content and services that consumers are willing to pay for. Kaukonen, says this is why Sanoma took such big steps in 2014 to build its big data capabilities, which will help to tap into the value still hidden in the advertising and consumer markets.
After several years of major structural and strategic changes, Kaukonen has high hopes that 2015 will not bring any major unforeseen changes. "2015 is about making it happen, about getting traction on all the things we’re doing." Kaukonen is confident that Sanoma can return to organic growth by 2016, which means it needs to take big steps already in 2015. To achieve this, the organisation will focus on two areas: growth and culture.
When it comes to growth, each of the three Strategic Business Units will accelerate their individual growth programmes, for example in order to monetise the explosive growth in mobile traffic and video, continue expanding Learning into the digital realm, and enter new markets. The front office needs to improve, too. "The next level of efficiency will come from managing customers, sales and content. This is where we invest most of our time and people, and where we can differentiate ourselves. Quality must go up and costs must come down."
In addition to growth, Sanoma will focus on the organisation’s culture in 2015, particularly collaboration. "Collaboration is crucial to achieving our goals. Our branded content, commercial and technology areas have begun to find each other, but we need to simplify decision-making and work on the pain points of our new structure. Some aspects of our culture also prevent us from cooperating more. We get bogged down in internal debates around whose mandate or turf something is. Or simply, we don’t look hard enough to remove unnecessary activities that do not add value for our customers. This is what I call silly stuff and another priority for 2015 is to get rid of it."
Kaukonen is optimistic despite the challenges that remain. Asked how he sees the market developing in 2015, Kaukonen says that Finland is likely to remain tough, the Netherlands is better but still uncertain and Learning has repositioned its portfolio to more areas of intrinsic growth. "Sanoma should not expect any relief from the markets. But you know, we don’t need relief because matters are in our own hands. That is what we gained from 2014. Sanoma today is a great company, with a great heritage and a great future."
Arthur Hoffman: speed, agility and quickly changing course when needed
It has been an important and eventful first year for Sanoma Digital. The newly formed business unit is part of a matrix organisation, together with Sanoma Media Netherlands and Sanoma Media Finland, which oversees the pure-play digital businesses and their development, spearheading the digital transformation of Sanoma. “The other roles for Sanoma Digital are to work closely with the country organisations on cross-media opportunities and in key areas such as mobile, video, and Big Data,” says CEO Arthur Hoffman. “Additionally, the Sanoma Lab and our venture arm are part of Sanoma Digital, and both of these are very important company-wide innovation initiatives.”
Increased confidence and a renewed sense of purpose were the dominant sentiments across Sanoma in 2014. "We have our mojo back."
Increased confidence and a renewed sense of purpose were the dominant sentiments across Sanoma in 2014. Chief Human Resources Officer Jackie Cuthbert says that Sanoma will now continue to focus on culture and skills in 2015 in order to return to growth in 2016.
Kim Ignatius: back to organic growth in 2016
“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.
Peter de Mönnink: better value propositions across all media
In 2014, Sanoma Media Netherlands rationalised its portfolio, launched 17 projects to increase top and bottom line growth, invested heavily in TV and integrated the Sanoma and SBS offerings more closely.
Pia Kalsta: taking the multi-channel perspective in everything we do
Sanoma Media Finland’s CEO Pia Kalsta is pleased to report significant digital developments for numerous brands. For television and radio, 2014 was also a good year. Print remains an important element in the portfolio.
John Martin: co-creating solutions together with teachers
Sanoma Learning had a successful year. It delivered organic growth and strong profitability, achieved high growth in digital sales and extended its international reach. CEO John Martin says Sanoma Learning is poised to transform K12 education with digital solutions that improve learning outcomes for pupils, support teachers and increase engagement.
Key figures financial report 2014
Key figures financial report 2014
Chairman of the Board Antti Herlin: signs of growth
“The employees of Sanoma have shown their determination and diligence during tough times on the market. They have restructured the company and refocused their portfolio. They have invested in people and technology. And they have made swift progress towards creating innovative multi-channel offerings.
Chief Technology Officer Mikael Nurmi: ready for the digital future
Sanoma’s technology organisation worked hard during 2014 to build the structures and capabilities necessary for taking the Group further into the digital future.
Vice President Strategy and PMO Leila Kaleva: committed to change
”Sanoma's employees are very committed to transformation. Thanks to this mindset we are moving forward fast,” says Leila Kaleva, who has been leading the implementation and follow-up of Sanoma’s strategic change programme and strategy process since January 2014.
Young Digital Planet ready to teach the world
With high-end products and deals in multiple continents, Young Digital Planet is taking mobile curricula global.
bingel wants to be a favourite learning brand
Mobile, and with more adaptability and gamification, the new version of VAN IN's bingel is hot in Belgium and now in Sweden too. And it’s ready to take on more European countries.
VOoruit digital platform as a frontrunner
VOoruit is a platform started by Malmberg in 2013 to speed up the time to market of new digital learning products.
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Corporate Social Responsibility
Helsingin Sanomat, a mobile multimedia brand
In making the transition from a traditional newspaper to multimedia, and thus growing its digital media market share, Helsingin Sanomat is demonstrating that it can adapt and exploit the strength of its brand.
Fresh concepts strengthen Nelonen Media
In 2014 Nelonen Media successfully launched two new brands, a radio station called Loop and a TV channel called Hero. Both have added something unique.
New services at Sanoma recruitment
A strategy review in early 2014 convinced Mika Ruokonen, Director Recruitment Business Sanoma Digital Oikotie.fi, that it was time to make some changes.
Mun Treenari, lean is good!
A great example of Sanoma Lifestyle's successful application is a new app called ´Mun Treenari´. Developed by Sanoma Lifestyle’s health team, this app targets busy women who want to live a healthier lifestyle or change their living habits.
A trendsetter for 50 years, vtwonen goes multi-channel
In 2014 vtwonen celebrated its half century. What started as a simple magazine has since morphed into an all-round home decorating brand.
LINDA. spreads her wings
The people behind LINDA. brand professionalised the news website, launched a new book-publishing company, and even started up an advertising agency.
Sanoma Ventures, nothing ventured nothing gained
Sanoma Ventures was created to support independent start-ups that are responsible for some of today’s best innovation and the resulting new services and products.
KIJK: supply meets demand
KIJK is a house of content that sources movies, Dutch and US series (including earlier seasons), and extras such as exclusive interviews from Dutch TV channels SBS6, Net5, Veronica and SBS9.
Sanoma Digital leads the way
In 2014 Sanoma Digital's Performance Concepts team explored exciting new ways of making smarter use of Sanoma’s email database for advertisers.
Kymppi adds up to success in Finland
A product of the Maths and Science department of Sanoma Pro in Finland, Kymppi has already proved its worth with schools’ lower grades and will now build on that success.
Leading the way in personalised learning
By developing a new personalised and adaptive learning solution Malmberg, Sanoma Dutch Learning subsidiary, is proving to be a trailblazer in digital learning.
Sanoma Lifestyle, home-grown content producers
When Sanoma Lifestyle couldn’t find the right people to produce the kind of commercial content its clients were increasingly asking for, the company simply created its own training programme.
Exam preparation and performance tools
In 2014 Nowa Era, part of Sanoma Learning in Poland, launched the first edition of the Diagnoza Nowej Ery suite, which comprises final-exam testing and assessment services for teachers and students.