Sanoma Oyj (SANOMA.HE) Earnings Call Transcript & Summary

Sanoma hosted their 2025 Capital Markets Day today. And now I have the pleasure to interview the company's CEO, Rob Kolkman. Hello, Rob.

Hello.

So let's start. What is the main takeaway for investors from the CMD?

Yes. The main takeaway today was really about growth. We are entering a period of strong growth for our business overall, both learning and also media.

Okay. And AI is a hot topic, also for Sanoma like everywhere else, and it's playing an almost crucial role in your future. But do you see any risks or concerns with AI going forward?

Yes. What we try to position today is really -- yes, we are excited about AI in both of our businesses, particularly if you think about learning, the potential this has for personalized learning options in all the markets that we're active in. And we try to bring that to life today with examples and teachers, and you saw it, right? At the same time, of course, you need to be realistic. And the main thing with AI for us is, of course, around the human oversight. Whatever we do, and there's a lot of opportunities here, it is always with human expert oversight. And I think that's also the key thing. People need to trust what we do there, like they trust us now with our content across the markets.

Yes. I think the keyword there is the human oversight because otherwise, it might be quite risky. In learning, the European market is quite fragmented, but we have seen signs of some, call it, consolidation. What kind of role does Sanoma play in this particular consolidation?

Yes. So we have been, of course, acquiring over the years and creating that position in learning across Europe. And what I shared today with the team is that we're very much excited to continue that. So we will continue to -- on top of the financial targets we have set, we will continue to focus on M&A as well because, as you say, it's still a very fragmented market, both Europe, but also within some of the markets that we're active in. So highlighted the key elements around, we can either step into new geographies within Europe or we can also, of course, create further scale in the markets we're already in. So benefiting effectively from our position there.

Yes. And touching on the possible new geographical markets, what might be you looking at? And how -- what are the first steps to even enter a new market?

Yes. So for us, it's very important, of course, that it is with a clear focus, right? So if we step into a new market like we did in Spain a few years ago, in Italy, it's with K-12 focus. It is also around a defendable and leading position. And it's, of course, really also seeing the growth going forward. So those are elements that we look at, but always from a K-12 perspective first.

And you also -- in the presentation, there was also a mention of adjacent offerings in learning. What could be some examples of this then? What are we talking about?

Yes. I think it really nicely links to the personalized learning element. So in markets where we already have a good and strong position, there could be products, solutions, those kind of things that we could add to what we do to also further personalize and strengthen our market, that's just as one example, and we could go in all kind of directions. We're always focused on helping the teachers and students in the markets we're active in.

Right. And touching on helping the teachers, we have seen that there are lack of teachers in certain European countries at least, luckily not in Finland, at least not yet. But how can Sanoma help here?

Yes. I think the core element there is the more efficient we can make the teacher with his or her day-to-day work, the more time the teacher has to really focus on the students and help them as we then call it, to reach their potential, right? So that's around doing all the admin work they need to do, the lesson planning, the preparation, increasingly, of course, personalizing of the lesson material, right? The diversification in the classroom is, of course, increasingly big in all the markets we are active in. So whatever we can do to support in those ways means more time for the teacher to spend with the kids.

Yes. So the goal is to give the teacher more time. [indiscernible] Yes, that makes sense. Then if we move on to media and talk a bit about Media Finland, the focus is purely on Finland. Have there been or are there any plans -- are you looking anywhere else? Or it just...

No. I think for media, we're very happy with the position we have here in Finland. Our growth story is learning and also international in Europe, but media is really -- the Finnish market is our focus. And there, of course, you see us with a very strong position, pretty much reaching all Finns on a weekly basis, right?

Yes. And now with the gambling market opening, that's a big thing for me or has potential for media. But do you see any concerns on that front? Or is it just potential that you see there?

Well, what we've highlighted is, of course, that it is a big opportunity if you think about it also from what will happen to the advertising market. If you also look at what happened in other markets that already have opened up, right? So -- but we emphasize today as well that we want to do this in a well thought through and responsible way. So that's not just following the rules and regulations coming from the law, but also how -- what does the experience look like for our users if you think about online, et cetera. So we will do that in a, as I say, a responsible way, but the opportunity is big. And that's what we highlighted as well on top of our sort of core financial target of this digital transformation, yes, that is EUR 20 million plus as we see it when we think about the opening of the gambling market on revenue, but that's, of course, high-margin revenue.

Yes. That will be interesting to see then in '27.

Yes. It will be.

Probably happens. Then I mean, a lot of your media content is [ foreseen ] in Finnish language as well, and it is a strength. But then have you seen or is there any concern that younger generations might not look to Finnish content as much? Do you see there might be a risk that it's not as valuable going forward for the consumer? Or do you believe that even younger generations enjoy this content in their own language?

Yes. So we had an interesting point today. I think Jenni mentioned that like it depends on what you define as younger, right? So she highlighted the fact that if you look at it from the under 45s there, we, of course, see more and more the willingness to pay. If you -- of course, if you are late teens, early 20s, but that has always been the case. The willingness and also the ability to pay is, of course, a lot less. What we are trying to do is make sure that, that appreciation is there of the high-quality content and then over time, also being willing to pay for it. What has changed over the last few years is, of course, this understanding that also for good quality online content, you need to pay. So subscription models also when you think about entertainment, of course, have really been introduced. I think that helps us with the understanding that there is a reason to pay for high-quality content.

Yes. And I guess some high-quality TV productions have and can be also sold to other countries. So it's not just -- even if it's produced in Finland and in Finnish, it can still be...

It can still be in that [indiscernible] as well, yes.

Then media's role has declined. Learning has -- is generating more earnings, but you do see media as an integral part of the company and it does support the business. But is there any indication or even chance that at some point, the 2 businesses might be completely separated into fully independent companies or that you would sort of exit the media side?

I mean I can never look very far ahead. But what we highlighted today is we are very focused on both businesses. It's exciting. Also on the media side, it's really good to see that digital transformation with that continuous improvement also on the margins. But on top of that, the gambling, of course, is a real step-up as well. So I think we are very focused with the team on executing on those exciting strategies in both learning and Media.

Yes. So going forward, at least for now with both segments...

We are very focused on that.

Yes. It's kind of independent...

It's kind of a plan at the moment.

And then the final question, if you look a few years down the line or ahead, what factors do you think will affect some of competitive advantage in maybe, say, 3, 5 years after maybe this growth period now?

Well, I think, of course, we're doing everything we can to set ourselves up for continuous growth, right? And today, we highlighted the great opportunities we see on the personalized learning side and the products that we want to bring to market there in a variety of ways, right? So I think we do everything we can to build further on that strong position we have, and that, therefore, doesn't stop in 2030. Hopefully, we will be in an even better position by then because of all the things that we highlighted today.

Thank you so much for your time and the answers. And this was just a scratch on the surface. You can find the entire CMD presentations, both at Sanoma's website and [indiscernible].