Sanoma Oyj (SANOMA) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Sanoma's Capital Markets Day 2020. My name is Kaisa Uurasmaa. I'm heading Investor Relations at Sanoma, and it is my pleasure to welcome you all to this virtual event. It has been an amazing year for us at Sanoma around the circumstances of the corona pandemic. We have made significant acquisitions and divestments that have transformed us into a growing European learning company even more and strengthened the cross-media positions we have in Finland. Today, we have all the members of Sanoma's executive management team here presenting you what this means in more detail to our business. After each of the presentations, we will have a Q&A session. [Operator Instructions] And the presentations are estimated to end approximately quarter past 4 EET. And after that, we will also host an informal Teams roundtable discussion, together with Rob Kolkman and Pia Kalsta, and that is a bit to replace the face-to-face meeting opportunity that you would otherwise have in the Capital Markets Day. And link to that Teams meeting will be shared in the webcast platform later today. This webcast will be recorded, and the recording will be available on our website after the event. And all the presentations are also available there already. And with this short introduction, I would like to welcome you all again and hand over to Susan Duinhoven, President and CEO of Sanoma, to speak of the presentation. Susan, please.

Thank you, Kaisa, for this introduction and a warm welcome also from my end to all of you. And yes, it has been quite a year. And not exactly the year we would have thought last year when we were together. But we are quite pleased in the end with how this year went for us because in most of our markets, we were able to still grow our business, gain some market share, while at the same time also continuing our transformational path. And we have now become the leading K-12 educational player in the European market. And that business with its stability, the technical platform, the scale that we have there and the ambition to grow that business even further. Now in the media business, of course, stronger -- impacted by corona, the team has done a marvelous job to mitigate those impacts and also continue its path towards a more focused leading cross-media player in the Finnish market. So all in all, you now look at Sanoma as 2 focused leading players, each in their own field, poised for further growth. If you look at Sanoma as an investment, what do you see? You see a learning business that is already the leading player in K-12 in the European market. And you see a Finnish media business, leading cross-media with a uniquely successful digital transformation ongoing. We have EUR 300 million to EUR 400 million financial headroom that we will want to use to further grow our learning business. We pay a solid dividend. And Sanoma is truly sustainable investment. The core of our business, our learning and our media business, we have a positive impact on the society at large. So with that, let's now go and take a look at that transformation that has been ongoing. If you look at last year around this time, we had done 4 acquisitions and all in K-12 learning. And those 4 acquisitions, the largest one of which was Iddink. We have now this year spent considerable time in integrating these wonderful assets into our European learning business. And at the same time, we have prepared and investigated the acquisition of Santillana Spain, the leading K-12 provider of educational materials in the Spanish market. And we have signed that deal and communicated it in October, and we then indicated that it might take a while before we could actually close that deal, but that we now think will happen early in 2021. At the same time, we divested -- in April of this year, we divested the media business in the Netherlands. And in our Finnish media business, we focused that business even further by acquiring regional news business from Alma and divesting Oikotie, the classified digital business to Schibsted. So with that, you now see 2 focused leading businesses in their own field with solid profitability and increasing cash flow. And that transformation, of course, also changes our profile as a company. From a revenue perspective, a 50-50 split between media and learning and when you then look into media, you see there the transformation also ongoing with increasing share of consumer income to B2C, where more than half of the business is already coming from consumers. But most prominent change you see on the earnings side. The total of the group's earnings is now for -- close to 70% coming out of learning. And the importance of that is, of course, that learning is extremely stable and predictable income stream, to 70% of the group's earnings already coming out of learning. And then if we go a bit more into that learning business. And I'll give you a bit of a summary and Rob will, of course, in the next presentation, go into quite a bit more detail. But we have continued to grow that learning business with a strong focus on K-12. And let me just remind you, K-12 means primary, secondary and vocational education. And the reason why we are so enthusiastic, specifically about K-12 within that learning industry is that it is a very localized business. So in every European country, it is different and in the larger countries, even by province, it is different. And that highly localized nature gives high barriers to entry. We see 3 growth levers in our learning business. The one is market share gains and that comes from the digitalization, where we have experience in highly digitalized countries, and therefore, have a competitive advantage, but also an expansion of services within K-12 and M&A can contribute to growth. And that growth is then -- and the M&A and becoming a European player with a European footprint is specifically interesting because we can then utilize our best-in-class digital platforms across all these markets. And with that increasing digitalization, we also increasingly transform into a subscription business, and Rob will go into a bit more detail on that. We feel very comfortable with our learning business. And we have upgraded our long-term profitability target. Our operational EBIT, excluding PPA, will be above 23% over time. And that is then, of course, including the positive impact of the acquisition of Santillana Spain. Our comparable net sales growth will be 2% to 5%, and that is an unchanged target, but now, again, includes sizable Santillana business. And in this business, we are now already a leading player in the European market. And if you look at that K-12 market, then you see that the total size is roughly EUR 4 billion to EUR 5 billion, and it serves, in Europe, about 75 million students. So therefore, with our around EUR 600 million, slightly above, maybe, revenues that represents a market share of about 13%. But you already see that -- when you look at the number of students that we service, over 20 million, that in that market share, we are already significantly larger. But the overall conclusion, therefore, is that European market is very fragmented. We are the leading player, and we still have quite a bit of opportunity for growth. Increasing market share in the markets in which we're already at and expanding into new markets. And that is, of course, our M&A strategy, and we aim to continue growing through M&A in our learning business. And for that, we have a well-developed pipeline, with very good momentum, both in the market and internally. So we see growth through acquisitions as something that we want to establish clearly in the coming years and continue doing so. We have increased our leverage target to below. Previously, it was below 2.5, and the key reason for that is that now that 70% of our earnings come from a stable and predictable learning business, we think we can utilize our balance sheet for this M&A strategy. And our M&A headroom is, therefore, EUR 300 million to EUR 400 million by 2022, and that will allow us to participate further in the consolidation in the K-12 European market. But then let me go to media business in Finland because they have had a good year even with all the complexities and have been able to continue on their successful digital transformation. We have now focused the media business even further with the divestment of Oikotie and the acquisition of the regional news business, we're now fully focused on news and feature, entertainment and B2B marketing solutions. And we see some further opportunities for smaller, highly synergetic bolt-on acquisitions. And that could, therefore, be part of our future path. But what is critical and key to the success of Media Finland is its increasing share of income coming from consumers and coming from subscriptions. And that is partially due to the successful digital transformation. You see that, not only in news, but also in entertainment subscription base increases. Helsinki Sanomat, the subscription newspaper, for the fourth year in a row growing its number of subscribers, now over 400,000. But also in entertainment, Ruutu+, our video-on-demand platform with over 300,000 subscribers. So that consumer income and digital transformation go hand-in-hand towards success. And therefore, we see a solid performance that makes us very comfortable with the long-term financial targets that we stated also last year, stable comparable net sales growth, plus or minus 2% and increasing operational EBIT margin excluding PPA, in the range of 12% to 14%. But 2020 was an exceptional year. That was specifically, I think, true for our media business, and we think that our teams have done an excellent job in that. And the business has shown its resilience throughout the year. You see that the corona pandemic impacted both the advertising and the events business quite significantly. Advertising business declined 13% in the first 9 months of the year. But in the peak months of the corona impact in April and May, the decrease was over 30%, but we have seen now strong recovery since September. And I think the good thing is that our teams continue to be focused on serving their customers and have gained, throughout this difficult period, 2% to 3% market share. Now 2020, there were no life events, no festivals took place. But even without revenues, the business contributed slightly due to the insurance compensation that we were lucky enough to have for this event. But the real mitigation of the financial impact of the corona pandemic came from the subscription business with a heavy news here that grew significantly, but also effective cost mitigations that the team has done throughout the business, and that amounted to EUR 15 million to EUR 20 million of lower cost than we would otherwise have had. For 2021, we expect a continuing recovery, but with that recovery will also come a slight return in that cost level to -- back to more normal levels. So we need to take in that the cost will come back, and not all of these savings are continuing. We also will be faced with low visibility and predictability on the advertising demand. And in life events, we have the benefit now of foresight and therefore, have been able to flexibilize our cost structure significantly. So all in all, a good year, even everything considering still for Media Finland showing its resilience. And with all the M&A going on, we see it as still very important to make sure that our shareholders get a solid dividend out of Sanoma. And therefore, our dividend policy is unchanged. Sanoma aims to pay an increasing dividend equal to 40% to 60% of the annual free cash flow. And that amounted, by the end of November, to a yield of around 4%. And if we look at Sanoma, you see a sustainable business. Our learning and media business have, by themselves, in the core of their business, a positive impact on society. But we have maybe under-communicated the work that has been going on in that business for already a long, long time. And we have now formulated a clear sustainability program with 5 key focus areas. In order to make sure that we communicate more clearly the work we're doing there. We feel strongly about this. Because this is not, for us, something to decide. This is something that is core to our business. Of course, with the fundament of responsible and ethical business practices, not only for us but also for our partners with whom we work. So all in all, if we look, you now see 2 focused and leading businesses, poised for further growth. We have EUR 300 million to EUR 400 million headroom that we aim to use to grow our learning business even further. We pay a solid dividend. And if you look at Sanoma as an investment, you see sustainability being core to our business. Our learning and media business having a positive impact on society at large. With that, I would like to conclude my part of the presentation. And open up for some Q&A. Some of it -- of the Q&A might also go to Rob's and Pia's, Markus' presentation, but ask away.

Yes. Thank you, Susan. And a reminder to the audience, you can still post questions for Susan, at least during the coming 5 minutes or so. We have a question about the M&A and the target market actually on that. So would you consider K-12 acquisitions also outside Europe? Or why would Europe be the focus area?

Yes. Yes. We definitely -- our key focus is K-12. And if it is then Europe or outside Europe, that will very much depend on the market and the target itself. So if that is an attractive target, with, for example, high barriers to entry and a good stable environment, then we will definitely also consider companies outside Europe. But Europe is still, as I have shown, sizable enough market to have a lot of opportunity. But outside Europe, definitely possible as long as it's K-12.

Okay. And then I will continue with the learning. As we are the leading K-12 learning services provider in Europe, could you please discuss the competitive landscape and name a bit of the key peer companies or competitors?

Yes. Yes, we are relatively unique. We're present in 11 European countries. There are not many that have that. So most of our competitors are local or are present in 2 or 3 countries at the most. It is hard to make a direct comparison. There are not many that are closely focused on K-12. But K-12 is, of course, in portfolios. If you look at a company like Lagardere in France, which is, by the way, also a media and learning company. If you look at [indiscernible 0:21:02.3] though differently focused and maybe less K-12 in Europe, maybe in 1 or 2 markets only. But those are type of competitors that have, by themselves, also a sizable scale. But then, of course, in each of our localities, we are competing with 1 or 2 local players that have their strength in that market, but do not have the scale from a technology platform perspective, for example.

Thank you. And then further on to learning. Could you please describe the benefits of the K-12 market in comparison to other parts of the educational market?

Yes, the K-12 is particularly local. If you remember, K-12 stands for primary, secondary and vocational. But take a primary school, those are smaller schools, very local. So what you need for this K-12 segment, you need both the local publishing skills to know the curriculum, to be able to work with teachers and cocreate, but also you need a very extensive commercial footprint in-country. And that is quite different when you, for example, compare to higher education or when you compare to infrastructure providers for schools, which is not as local and therefore, lower barriers to entry. So that is part of why we like the K-12 that much that is specifically the defendability of these markets. And with that coming, the stability and the predictability.

And could you please elaborate a bit, at what type of net sales or EBITDA can you acquire with that EUR 300 million to EUR 400 million in this space?

Yes. That depends a bit. We look -- when we look within K-12, we are both interested in content, but also in digital platforms. And both have different multiples, so to say. So if you look at content businesses, they typically have an 8x to 12x multiple. While, digital platforms start basically at 12 and can go higher up. So that depends on which targets we will be looking at and which deals we'll be able to complete, what exactly the contribution will be generated with that EUR 300 million to EUR 400 million headroom.

Thank you. And then actually, we have in the chat, we have a few more detailed questions on the learning and also Media Finland financials, but I will postpone them a bit to the later parts of this event. But nobody is actually asking it from the audience, but maybe I place the evident question that we know that has been circulating around during the past year, so about splitting the company.

Yes. That is a question very frequently asked. And I can say clearly, no, we are not thinking of splitting the company. I have indicated many times before that there is not a massive amount of synergy between learning and media. But there is synergy. There is synergy in technical infrastructure. There is synergy in financial services that we provide to both of the businesses. So those synergies are valuable and therefore, as long as there is not very much a value-creating opportunity to split the company, we will definitely not do so, and we will continue to benefit from these synergies.

Thank you, Susan. This will now conclude your Q&A part.

Okay. Thank you, Kaisa. Then, I will now hand over to Rob Kolkman, CEO of Sanoma Learning, to give his presentation on the learning business in more detail. Rob, over to you.

Thank you, Susan, and good afternoon, everyone. Let's now turn indeed to the exciting and also changing landscape of the K-12 learning market. And I'm sure many of you have experienced, firsthand, the enormous impact the coronavirus has had on the day-to-day education of our kids. Pretty much overnight, the teachers and also the students had to really move away from the classroom environment to, literally, learning at the kitchen table. And we have been trying to support that to the best of our ability, and that's pretty much with teachers across Europe, and as Susan already highlighted, also approximately 20 million students across all the different countries. And yes, we have also seen a very significant increase in the usage of our platforms. and I will get back to that later on as well. What I would like to do now is talk you through sort of the exciting opportunities we see, both for the organic growth as well as for further M&A. But let's first look at sort of key elements of where we are as a market leader in this European K-12 market. So Susan already highlighted that as a result of the Santillana acquisition, we've upgraded our long-term profitability target to over 23%. and we're aiming to continue on our successful execution of the M&A strategy. And within the businesses that we own, we really do see that conversion happening from single product sales, which is effectively selling the book or the workbook to a subscription model. And I will share more details with you in this presentation. But you can only do that transition if you have the best-in-class materials and if you also continue to invest in those blended methods and those common platforms and technology. And all that, of course, is ultimately also trying, besides the financial results, to have a real positive impact on society, really help students -- all students to reach their potential. Let me just highlight again what Susan mentioned around the focus on the K-12 market. That's effectively what you see here. So when we talk about K-12, we mean learning products and services. So that is you're learning content, the blended methods, the material, that is the material distribution and that is also the digital platforms. And all that within the primary, secondary and vocational market. So that is very much the focus, both for M&A as well as for our ongoing investments in the business. And if you then look at where we currently stand, and this is including the acquisition of Santillana, then we've really made a transition, over the last few years, from a publisher of learning materials to read that integrated provider of all these different elements. So on the 1 hand, of course, 60% of our business is very much the blended learning content. And we have key platforms supporting that in primary education that is Bingel and in secondary education that is also Kampus. And that is really focused on helping the teachers, really, supporting the students. And the second part is on material distribution. Obviously, we had a real big step there with the acquisition of Iddink last year. But we also have quite a significant distribution business in the Polish market. And that is all, of course, really aimed at supporting the administrators, the schools to make that process so efficiently as possible. And then there are another -- a couple of components there on the platforms. So if you think about the platforms, they are the ones supporting the content. And the second one is around teaching and the third one is around administration. So within the teaching, we are really supporting the teachers, helping the students with personalized learning with exercises with all those kinds of elements. And in the Netherlands, we have Magister for that, and we also have, across many European countries, we have itslearning. And that is then, of course, supporting both teachers as well as the administrators. And then we also have the digital platform for administration. That is really deep into the work process of the school. So following the student's attendance, their grades all those kinds of elements. And again, if you look at what we do there, we have that with Magister in the Netherlands, but we also have that in Poland with VULCAN. And then last but not least, we also have the testing and analytics. And that is very much in our more advanced markets, the Netherlands. And you see here, with that sort of split of our business and revenue that really integrated provider element taking shape. I mentioned at the start that we've seen a real increase in the number of users and the uses of our core platforms. That's what you see here on this slide. So I just picked a few of the sort of key elements of our platforms and the usage that we track, and you see massive increases over the period, both in the first corona crisis lockdown and also in the second one. And there's a few things I would like to highlight here. First of all, all of our platforms have performed really well to deal with that increased usage. And that was very good to see because as I mentioned, that was pretty much overnight, a massive increase. Secondly, you see a difference, which is also understandable, of course, between the more advanced digital countries and the less advanced. So in the more advanced, like the Netherlands, we did see an increase, but it was a lot less than we saw in less digitalized markets like Poland. So with that in mind, it is also really good to see that all those platforms were effectively already within the schools. It wasn't like we were, all of a sudden, having to give them access. They already had it. It was all about scaling up with that usage. And with that, there was one other element that was really important to see and that is the need to integrate our platforms very well with the likes of Microsoft Teams and also Google for education. And we see very much, these players, as partners for us to make the life of students and teachers as efficiently as possible. Let me now zoom in a bit on those 20 million students and our -- the market that we play in. So what you can see is in the market that we're in, we very much have either a #1 or #2 position. And as Susan already highlighted, if you look at the overall market size of EUR 4 billion to EUR 5 billion, that, of course, also means there is still a lot of consolidation to do if we have that market share of about 13%, in which we are the leader in that market. And following up on one of the questions just now, we do see, when we look at competition, that there is a real difference here. We operate in over 10 countries, and most of our competitors are either only in the one or in a couple of the countries. So that very much is the focus there. The other thing to realize is that depending on the country we're in, we either already have the full sort of scale of solutions, which you can see in the Netherlands, which we will now also have in Spain. And we have a lot of that as well in the Polish market. So those are the ones that are the most complete in that offering. And of course, our aim is to achieve that in all of our markets. Let me now zoom in on Santillana Spain and give you a little bit more of the background there. As Susan mentioned, very much a leading provider of the learning materials, particularly primary, secondary education. You can see that on the right-hand side there, roughly 90% of the K-12 market -- 90% of the revenue is from the K-12 market. And actually, within that, the primary part of it is 64%. So a very, very strong part of the business is really in the core of where we want to play. And when we look at the net sales and the margin of the business, as you know, we try to look at that across the cycle. So -- and that is about EUR 122 million and about a margin of 30%. And it's good to realize, and I'll show that in a minute in a bit more detail that we are expecting that market to have another educational reform in '22, '23, 24. So that's where we will see the higher end, but it also means that for '21, we're expecting the revenue to be at the lower end of that cycle for those logical reasons of how that goes through the cycle. And the other thing that is good to realize is that this market, the Spanish market is very much at the early start of the digitalization. So within Santillana Spain, it's about 2%, and that's actually a little bit ahead of the market. So very, very early in that transition, which we see, of course, as a real opportunity to roll out some of our solutions. And in the next slide, I will talk a bit more about the specifics of the Spanish market because it is actually 17 autonomous regions. But when you look at the people within the business, it is really good to see that 40% of them are really in that commercial side, deeply connected to the schools on a day-to-day basis across all of those regions. And 30% is also really on the content development, both on a central level, but also very much to localize it in those different regions. And lastly, on this, we are very pleased with the strong and experienced management team that is there, very, very committed to the business and with a long, long standing. Let me talk a little bit more about that regional approach here. So we do really see this market having high barriers to entry. And that is because of this very unique value proposition. First of all, there are 17 autonomous regions. And as you can see on this slide, we pretty much have the #1 and #2 position in the core primary, secondary markets there. So really strongly embedded in the schools across Spain. And there you also have that central and regional content development teams to really support a rollout like the one that's coming up for the new educational reform, not only on the central level, but also localizing when needed in the different regions. And the market name, the brand name there of Santillana is really, really important, and it's the one that people in Spain also have really grown up with. And as I mentioned, it's very much a market that is still at the start of the digitalization. So rolling out a product like Bingel in primary education is of real importance to us, and we see real opportunities there. So, so far, I've zoomed in a bit more on the M&A part of our strategy, but there are 2 other levers of our strategy that are, of course, more focused on the 2% to 5% organic growth of our business. And the first one is the growing of market share. So really continue to win in those local markets. And the second one is around increasing the value per student. And that's through extended offerings, that's through Classroom-as-a-Service as a concept. But it's really about where can we add value for the teacher, for the school and for the student. And that's around themes like personalized learning or assessment or exercises, all those elements play an important role. And these 2 components of the strategy are important because if you look at the demographics of our markets, it's pretty much stable number of students or even slightly declining. So these steps to take are really at the core of that 2% to 5% organic growth. So let's zoom in on the markets themselves. And for those of you who have been at Capital Markets Days before, you probably recognize this picture, obviously, in updated form now. And the big sort of thicker blue line is the overall market. If you add up all the markets that we're active in with regard to the publishing side. So you see modest growth there. You see also a couple of bumps. And let me explain that a little bit further. So the first bump you see there is Poland. And that has really been a big growth that we have seen and experienced in that market and also in our business as a result of the educational reform in the Polish market. And that is now sort of at its peak, there's still a bit to go in '21, and then you see that going more towards the lower end of the cycle. And the second bump is actually new, and that is the Spanish situation. And there you see that we are expecting that new educational reform to really start to happen in '22, particularly '23 and then also a bit in '24. So that's also why you see the overall market size for our business showing that uptick in that same period because, of course, the Spanish market is really significant in size. The other thing I would like to highlight here is the quite different pattern you see on the Dutch market. So the Dutch market has really gone a long way already towards digitalization and also towards subscription, which I'll touch on in a minute. And the result of that is that you see less of these extreme changes in curriculum and more an ongoing increase of value per student. And that's also why you see much more of a straight line there, slightly going up over time. And then specifically on the Finnish market, there, we see an upper sector reform in 2021, which is helping with that rebound in that market specifically. So let's now move on to the component of how do we see our business model changing over time. And that is really that transition towards a subscription model. And you can do that because we are more and more having that integrated offering that I touched upon at the beginning of the presentation. Obviously, that starts with print-only, if you look at that journey. And the print-only side is simply paying for your textbook, paying for your workbook. And what we see that tends to happen throughout the markets is then the next phase is obviously where you still have to print as your main source of income, which is you're paying for the book -- textbook, workbook. And then on top of that, there is free digital. So that could be a PDF version of the book available online, for example. And then the third part of it, and this is where the blended really starts to kick in, happens when we see that, actually, the value that we're able to offer on the online side is of such nature that you can also charge for that separately. So in that case, you have still, students, teachers paying for the print, which is your book -- your workbook, but also for, for example, exercises online or maybe some personalized learning. So those kinds of elements. And then the last phase, which is where it really goes towards the subscription, is still very much blended, but then the leading factor there is around your online component. So that is really where most of the studying, most of the learning is happening. And that it can still be print, and that print will, for example, be specific exercises or elements like that. And then you see, of course, the advantages that we see for all parts of the market. So for the students, it's very much about more up-to-date materials. If there are still books or if there is still print, they can retain that. It's no longer a model of having to sell that, only specifically for them. For schools, it's much more about stable and predictable cost of the learning materials because you go away from this paying for a book every now and then to ongoing price per students per year. And for the distributors, you really see the element there of lower cost due to no return flows effectively anymore. And then from our point of view, there was really the reduction in the secondhand market and there is also that element of much more spread out and even cost of content creation. And to explain that a little bit further, if you see those big bumps that we see in the Polish market -- Spanish market, there you have the element of peaks also from a content development point of view, meaning more free meaning more freelance cost, meaning more content development costs. As well in a market like the Netherlands, we are starting to see much more ongoing investments to improve that material in a more even way over time and with less of these peak moments. And then from a revenue point of view, it's, of course, more stable, but we still sell once a year. The revenues are, of course, much more spread out over the period. But this is the trajectory we see all the countries go on. At the same time, countries are at a different phase, and it's also not a race to the ride. So what we've tried to do here is share with you sort of the core elements of where we think the markets currently stand and what the key characteristics are. So if you look at the Netherlands, furthest advanced in this whole trajectory towards subscription, and has got all these benefits that we mentioned more and more. And we actually see the Dutch market, mainly also -- partly also as a result of corona, even go faster towards the subscription side. If you look at countries like Finland, rest of the Nordics, Denmark, might even be a little bit further ahead of that, Belgium, U.K., there, you do really see that we are making progress in that way. But still more on the print plus paid digital. And Finland, with the new reform, will also start to see some elements of subscription happening there. And then there are markets, particularly for us, of course, Poland and Spain, where we're much more at the beginning of the transition. And that's also why you see those bigger bumps still happening on the content development, educational reform. But we have a lot of experience to support those markets in the digital transition and also to really lead the way. And maybe a couple of words on Germany. Obviously, we don't have the content there, but we do sell our digital solutions there with itslearning, and we have seen that market trying to really pick up its pace of digitalization, and that has also resulted in us winning some business there with regard to helping the Bundes lender and helping some of the big cities to get that content, really, towards online. So that's very much what we see on the -- on that whole transition towards subscription. And then the question always comes up, okay, but what has been the percentage that you see over time in subscription revenue? And I hope with this picture, you see that there are really big differences here. And the market situation also needs to be right for that transition. But if we look at where we currently stand, and this includes Santillana Spain, then we are about at 25% of our net sales is currently subscription. But there are big differences there, as you can see here as well. So you see the Netherlands at a much higher level, and you see a country like Spain, like I just explained, being really at the start of that. But our ambition, supported by various initiatives that we do, is to: a, lead the way in the market. At the right time, introduce the right kind of next steps there and also to raise that level to over 50% by the end of our planning period 2025. And then you see the same kind of benefits, of course, that we mentioned, but it will be different per country of when we will be at that phase. But the customer benefits or for the teacher or for the student of continuously having access to the most up-to-date material is of real importance there. So that is with regard to the 2 strategic levers for the 2% to 5% growth. Let me now come back to the M&A side of the business. Here you see, of course, the updated slide on everything that we have done over the years with Santillana being the last one. Iddink and itslearning, important acquisitions in 2019. Those integrations are progressing well, and it's also important in that whole integrated offering of our -- in the markets. And what you do see, for example, in the Netherlands, in particular, you actually do see an increased pace of the digitalization, which gives us some short-term challenges, but really longer-term is, of course, really the way we do want to go. So that is with regard to the acquisitions as we stand now. And as Susan already mentioned, we really do want to continue on that M&A path, but in a very focused way. One of the questions was already around this. But if you see what our focus is, then we really do say, K-12 is the market we do want to play in. And we can either increase that then with M&A with new geographies, enter into new geographies, or expanding our offering in markets we're already in, especially also when that could speed up our position in the digitalization or speed up the digitalization of the market overall. And that, of course, then leads to that increase in market-leading position and further build on that. So with that very focused approach on M&A, and also that transition that we see from single product to subscription model really underpinned with the best-in-class materials and blended methods and our common platforms and technology, all that together, we are very confident that, that will lead to a further increase of our market-leading position and also helps us to make that difference in the broader society with supporting the learning outcomes and really helping teachers and, therefore, students and all students to reach their full potential. Thank you.

Thank you, Rob. And we will now move to the questions. First, about the platforms. What is your capability to leverage your existing tech and IT assets to introduce services in new countries?

Yes. I think we have, of course, grown a lot via acquisitions over the last few years. What we are now in the process of doing is really making sure that the underlying technology that we have is really based on sort of a modular approach. And that's also why you hear me say that when we then look at the rollout in Spain, we really do think we can use that technology to roll out the right version of Bingel ready for that market at the same time as the educational reform. And we're doing similar things in other countries like Poland, et cetera, as well.

Okay. And then linking the platforms and M&A, what would we gain if we would do further M&A in the platform side?

As to give you a very specific example on that. If you think about the 3 platforms sort of that there are, right, so for the content, for the teacher, but also for the admin side. Obviously, with Magister in the Netherlands, we really are at the heart of the day-to-day work at the schools. So if there are platforms and companies that would give us that similar position in other markets, that would be really a gain that we would have. We would really become even more into the day-to-day work processes of those schools and teachers and students. So that's an example of where we do really see the gain. It's not so much about the pure technology. I think that part, we have got a lot of that available. It is about, can it help us in that market situation and market strength if we were to acquire that.

Okay. Thank you. And then I will continue with the M&A from a bit different angle. In which European countries, do you find the most interesting deal flow and, therefore, opportunities for bolt-on M&A?

Yes. Well, I hope you understand I won't go into any specifics on the M&A side in the way of what we are looking at. But we are looking at it from a point of view, where are the characteristics of those markets more similar to the ones that we're already in, but maybe at a much earlier stage also of the digitalization. So those elements we do really look at. And as Susan already mentioned, it is, therefore, also very important for us to really look at what would that business really add for us. Is that a geographical expansion? Or would that really be around further getting in-depth in our existing markets?

Thank you, Rob. And then we have a few questions about the subscription model. First of all, will there be a dilution in unit economics as you transition to subscription learning? This has been the case in other educational segments. Do you agree with this? Or how do you see it?

Yes. I mean, it's always a bit difficult to -- just exactly what we talk with unit economics. But do see, of course, a change when you move to subscription. And I already mentioned that is, of course, longer-term positive for us. When we looked at it overall, that transition is factored in to our 2% to 5% market growth that we foresee. And if you look at it from a profitability point of view, that transition, which is a slow one because it's not going fast in the markets that we are in, is also factored in to the 23%. So the market, the situation can be different. But overall, we see it as helping, ultimately, to reach those targets.

Thank you. And I think that with this, actually, also the second question on the subscription model and how it impacts our financials is already now answered. And finally, a question about the organic growth Is it fair to say that as you say that in the K-12 market, overall, is growing about 1% on an annual basis, so that in order for you to reach your 2% to 5% organic growth target, that requires considerable success in market share gains and market expansion?

Yes, there's a few elements there. Absolutely, there is that element of market share, like I highlighted. There is also that added value per student. And you saw as well, if you look at the next 3, 4 years, of course, with the markets that are less digitalized yet, we do, of course, also then benefit from those bumps that are happening with the educational reform. But absolutely true. If you look at it longer term, is about making that move towards subscription, and it is about adding value for the student, particularly also around the elements of online learning, personalized learning and those kind of things.

Thank you. And a new question about the subscription model. Do the local competitors also have a subscription offering? And could this -- if they don't, would it accelerate our market share gain?

Yes. So that differs, again, per country. But if you look at the more advanced digitalized country like the Netherlands, where, in the K-12 market, we have actually introduced that model. We, of course, saw the competitors now, and we're pleased about that, also follow that sort of same pattern. We've been leading the way, but we do see the competition, of course, doing similar things. In other markets, it's much more early days. And we also believe, again, that if we have that leading position, we will also benefit on a market share point of view. And maybe to that point, what you do see, of course, is that our markets are, by and large, rather fragmented, and we alluded to that on the Spanish market. It will be more difficult for smaller players to really do this kind of transition successfully. And therefore, we think that scale will also really help us with that

Okay. Thank you. [Break]

And apologies for a slight delay in getting the live webcast back on track. And with this, I would like to hand over to Pia Kalsta in Helsinki to tell you more about Media Finland. It has been an interesting year definitely for the media business. Pia, please go ahead.

Thank you, Kaisa, and good afternoon. Like Rob described his year with learning, this year has been a busy, eventful and also a successful year with Sanoma Media also. We have made successful portfolio changes. We have acquired Alma's regional business. We have divested Oikotie Digital Classifieds business. We have rigorously mitigated our cost base to reflect low advertising sales and canceled events. We have put the safety of our employees first, and we have focused on serving our customers. And this focus has helped us to grow subs base this year and also take share in the advertising market, even in this exceptional year. And I could not be more proud about the work -- the great work our teams have done. Sanoma Media is the leading media company in Finland. We have strengthened our position in our core areas, news and features, entertainment and B2B marketing solutions. I'm especially enthusiastic about the growth of digital subscriptions. This positive development supports us reaching our long-term financials target -- financial targets, stable net sales and improving profitability, EBIT of 12% to 14%. Reaching these targets is further supported by the growing importance of our purpose. This year has highlighted the need for independent journalism. It has also highlighted the need for culture and entertainment. Entertainment does not only makes us feel better, it also makes us feel more connected with each other. These figures for the past 12 months show how resilient we have been this year, despite sharp decrease in advertising and cancellation of events. We have managed to keep our profitability at a good level, thanks to rigorous cost mitigation activities and sharp customer focus. When looking at the share of consumer revenue, over 50%, you can see that also there, we are moving into the right direction with the help of growing digital subscriptions. It is also good to remind ourselves of the special position Sanoma has in Finland. We've reached practically every Fin every week. And this means that we can effectively sell our own products to consumers, but also offer our B2B customers powerful and -- powerful marketing solutions with high reach. During the pandemic, the development of advertising revenue has been the key concern for the industry. Advertising was hard hit in Q2, but the recovery has been faster than expected. We have outperformed the market and taken share, especially in online, TV, radio and magazines. The so the chosen approach has been the right one. We did not lay off our salespeople, quite the contrary. We made sure that they could focus on serving the customers that were hit by corona. All advertisers had to stop and review their plans and change them, even those advertisers who were not directly hit by corona, they had to review their messaging. So what they need was a flexible and professional partner who could help them. How is then this faster-than-expected recovery reflected in budget '21. The recovery towards the end of the year does not directly predict how the next year will go. I know that the advertisers are now spending the rest of the annual budgets. Some marketeers have even gotten injections into their marketing budgets from other parts of the company where the corona-related savings have been faster than expected. So there is uncertainty concerning next year's advertising market since advertisers themselves do not yet know what approach they will take. They work on a number of scenarios currently. We have continued our transformation also this year, and I couldn't be more satisfied with the results. Helsingin Sanomat, the leading national subscription newspaper in Finland, has now grown 4 years in a row and subscription base now exceeds 400,000 subscribers. Ruutu+, our video on-demand service, has also continued to grow strongly and subscription base now exceeds 300,000. Ilta-Sanomat, the leading tabloid new service in Finland, has grown its weekly visits by 17%. And the weekly visits are of an amazing size of 43 million visits a week, which translates into almost 8 visits a week by every Fin. So we have grown our digital footprint, but at the same time, we have simplified our structure and built ground for future growth. We have internally consolidated our journalistic business into a new organization, News & Feature, that includes now Helsingin Sanomat, Ilta-Sanomat and selected magazines. And we can already now see strategic benefits of close operation between the brands. And the timing was right for this change because now we have been able to integrate the acquired regional business into this unit. We are also very successfully divested our online classifieds business, Oikotie, which was not as integrated part of Sanoma Media Finland as our other units. Let's take a look forward. The transformation of digital media continues. And as you can see in this graph, the digitalization has only speed up the pace of digitalization. I have picked a few key trends driving our business going forward. Consumer willingness to pay for digital content is increasing, which is fully in line with our strategy. We also see increasing interest in lifestyle and feature content if placed on our news platforms. For example, HS subscription growth has been partly driven by this demand. Transformation from linear TV to on-demand continues, and that growth is driven by increased penetration and stacking behavior. We can -- we are still lagging behind in international comparison. Advertising spend is shifting towards digital and customer data is prerequisite for selling digital advertising. FDA advertising might be more resilient than many think going forward. A number of marketing efficiency studies show how well TV advertising and digital work together in powerful marketing solutions. So we have #1 positions in our chosen 3 core areas: news and feature, entertainment and B2B marketing solutions. Let's take, first, a closer look at news and feature. News and feature is our largest unit, consisting of 2 leading news media, Helsingin Sanomat and Ilta-Sanomat and magazines with digital demand. The newly acquired regional media with titles like Aamulehti and Satakunnan Kansa are being integrated into this unit. And the focus of this unit is crystal clear. Here, we focus on growing digitally active subscription base and growing daily national reach. And this clear focus has also delivered results. Let's remind ourselves why we acquired Alma's regional titles. This was a highly [indiscernible 0:24:52.3] bolt-on acquisition that is strengthening news and feature business by increasing number of subscribers. And it also brings efficiencies in shared operations. So this acquisition supports us reaching our long-term targets. Integration is going well, and synergy realization is on track to achieve full run rate synergies of EUR 30 million by '22. We made an assumption when we prepared the acquisition that there is room for digital subscription growth in regional business. And this assumption has already proven to be true. Digital subscriptions have grown 46% year-on-year. Then how is HS doing? So 4 years of growth, subscription base exceeding 400,000, 70% of subscriptions already having a digital component. We know that the successful digital transformation requires further digital scale, and we are investing in that. And to drive that growth forward, we asked always 2 key questions. What is converting a reader into a subscriber? And how to make a -- what makes a subscriber a loyal one? And we have a number of growth initiatives ongoing, and just to highlight a couple of them. We have found 2 content areas to support the growth. This year, we have launched kids' news very successfully in August and that launch will be then followed by HS business news. We will strengthen our Helsingin Sanomat business reporting and the consumer launch will take place in March '21. So why is digital scale so important for us? You might even remember this picture from the previous CMD. In the subscription news, net sales per additional subscription reduces, but the profit contribution increases by incremental subscriber because of a lower cost of sale. However, it does not make sense to actively and rapidly convert a large number of subscribers from print to digital-only. We need to respect consumer preferences and let them decide how they want to consume Helsingin Sanomat content. Of course, our job is to make the digital offering very attractive. A rapid forced transition from print to digital-only would not create additional contribution either due to the stranded cost of printing and distribution. So my message here is that the transformation will take time, and consumers will set the pace. We can manage the digital era. And the goal is clear, we will build profitable digital scale. And let's take a look at Ilta-Sanomat. Ilta-Sanomat is the largest Finnish news media by reach and by digital visits, and digitalization has increased the reach significantly. Ilta-Sanomat reaches the whole of Finland, often also audiences who don't currently subscribe to paid news. Ilta-Sanomat provides easy and free access to curated content from professional journalists. And in the case of Ilta-Sanomat, the digitalization works in a different way. In this case, it's from consumer-funded single-copy sales with print advertising to free to consume digital advertising funded model. And like you can see in this graph, increasing digital B2B sales have been compensated lower single-copy sales. Also here, we want to grow going forward and that growth requires both increasing consumption of Ilta-Sanomat content as well as improved monetization of digital audiences. And a couple of examples of our growth initiatives. We are working with personalization of Ilta-Sanomat service. And we really need the personalization to serve our users optimally. It's a quite small screen that we have a huge amount of content. And it wouldn't actually make sense to have a such a broad content offering without a good personalization capabilities. As part of news and feature organizational change, we have integrated Me Naiset, a weekly, well-known women's magazine, into Ilta-Sanomat. And this fall, we changed Ilta-Sanomat digital content from Me Naiset platform to Ilta-Sanomat platform. And we could immediately see over 100% growth in Me Naiset digital content consumption. And that was, of course, highly energizing for the journalist teams producing the content, but also our B2B teams were happy because digital female audiences are in high demand. Then let's look at the entertainment. We have leading positions in our selected areas, TV and video, radio and audio and live events. We have experienced team and synergies across the portfolio. For example, music specialists who work primarily for radio, excel at anticipating who will be popular in live events and TVs in the coming seasons. And we can also promote those artists with the help of our extensive portfolio. Entertainment business was also hit by corona. How does it look now? We have already seen in H2, TV and radio advertising bouncing back. And we plan to have live events back next year. But we focus on minimizing the risks. So we work on a number of scenarios with accompanied action plans. There is no insurance that would compensate for corona-related risks next summer. When taking a longer look. In TV business, we focus on growing our on-demand Ruutu+ subscriptions. It's also good to remember that there is potential for FDA price increases given that given the very low level of advertising pricing in Finland, but that requires that the supply and demand become more balanced like in other western countries. Radio market is highly consolidated in Finland. There are practically 2 players. We have a strong national position, but we have traditionally been quite -- our position has been weak in regional markets. We have now acquired regional frequencies and, this year, established a regional sales force. So we are in a growth market with potential. We have also, this year, launched a subscription-based audio service, Supla+, in a fast-growing audio subscription market. As to the live events, I strongly believe in growth -- in this market growing. We have spent our year wisely. So we are well prepared to grow in this market once the market opens again. Let's take a closer look at our on-demand service, Ruutu. The number of subscriptions has exceeded 300,000, faster than we had expected. What is driving the growth in this very competitive market? Ruutu+ does not compete head-to-head against the international giants. It focuses on local, must-see entertainment, national and regional sports with an affordable consumer pricing. And it's quite interesting, actually. We can see Finland finally moving to a direction where people are paying for TV content. In many other western markets, this has been a case for a long time. Broadcasters have received a consumer revenue via cable operators. And in those markets, now the growth of on-demand is actually transformation from cable revenue to on-demand revenue. Whereas in Finland, that's the new money to this -- to broadcasters because we -- the mini pay market has not existed in Finland. So overall, in entertainment, we are in a growing market with a number of growth initiatives, but the base of growth is partly dependent on the rebounds after the corona. And then finally, let's take a look at our B2B marketing solutions, where we help companies to grow in Finland. We have been historically focused on large advertisers, and that's where our share is also the largest. There, we have a multimedia offering, professional sales teams, and we expect our market share also to grow going forward. But this market, as such, is -- will -- is not expected to grow. When we look at the SME market, the situation is actually the opposite. We expect that market to grow. Our market share is relatively small even though we have grown there strongly for the past years and even this year. We will also invest in the growth by improving our offering. So we have now acquired regional radio frequencies. Acquisition of Alma regional business will improve our offering here. And also the digital growth on all our platform improve our digital offering that can be then targeted also regionally, locally, and we can -- there, we can have even very small target groups that can serve SME segment. We have a professional sales organization in place. We bought Ruutu, a company focused at SME segment -- digital sales for SME segment. And now over time, Ruutu has taken over all Sanoma media advertising sales towards SME. So I'm really enthusiastic about the potential that we have in this segment. The future success of digital transformation is not based only on attractive content and strong brands. It's increasingly driven by unique combination of success factors that are developed centrally and shared between the units. We have so far looked at SMDF as business areas or brands, but the digitalization has actually integrated the company and synergies across units have become more visible. Just to take a couple of examples. We collect customer data centrally and we develop in identification and targeting capabilities centrally. Subscription management and subscription sales is in the core of our strategy and, say, marketing automation, digital sales funnels, all that we develop centrally. So all these areas benefit from growing digital scale. Having the needed scale enables us also to develop needed capabilities further and to attract the best talent. To summarize, Sanoma Media Finland is the leading company in Finland. We have 3 core focus areas where we have strengthened our position. Our strong brands and engaging content combined with shared digital capabilities enable us to succeed in the digital transformation and to reach our long-term financial targets. Reaching these goals is further supported by important role we play in the society by offering independent journalism, local entertainment and by helping Finnish companies to grow. Our purpose is highly attractive and energizing for our people. With that, I would like to conclude my presentation and open the Q&A session.

Thank you, Pia, obviously for a very interesting presentation because we have a flow of questions. And I already prewarn the audience that you may need to continue in the Teams meeting then. But I will start with Helsingin Sanomat and the subscription sales. And do you have an ambition level that how many subscriptions should Helsingin Sanomat have in 5 years time?

We have an ambition level, but that is something that we keep internally. And we learn also all the time about the business. But what we have learned so far, we have moved towards the ambition level faster than we had anticipated.

Okay. And then about the pricing power or the pricing level we made [ in ] Helsingin Sanomat, do you think that with the new content areas that you now put effort on, you can have more pricing power in Helsingin Sanomat? Or how do you see the pricing situation overall for HS in the midterm?

We investigate all the time the pricing and potential for price increases. And we also have different products in different price categories. So we also then work with those. I don't believe in major price increases, but I think that there is still value to be taken at the -- while we are also developing the product offering.

Thank you. And then continuing on the news business about Ilta-Sanomat, one question about the future monetization of that. Do you see that a subscription model would be doable for a digital Ilta-Sanomat as well? Or does that continue [ to be ] B2B funded?

[indiscernible] is in the core of that business. But of course, we all the time test and follow what is happening in the other parts of the world. We can see in other Nordic markets digital models being tested, but we have not seen any major changes on those markets yet.

Yes. Thank you. There was actually a reference on this question also to Norway and Germany, for example. I will then move forward to the acquired regional media business. And a few questions on that. First of all, the synergies, have you -- are any of the synergies already visible in this year?

We start to see some of the synergies towards the end of the year, but it's really then the year '21 when the synergies start to be visible.

And then related to the regional news media business still, how successful have you been in cross-selling subscriptions of the national titles, say, for example, Helsingin Sanomat, to the acquired subscribers of regional.

This year, we have concentrated on integrating the business. And next year, it will be then a year of development, and that it will be then the year of testing and learning how the regional markets work and how we then should work with those customers.

Thank you. And then a question about the digital development and digital business going forward. What kind of structural investments do you need to drive growth in digital? And can you finance that with your own business?

We invest all the time in digital development, but that is mainly seen our OpEx. So that's part of our ongoing business. When we look at the next year, there will be some growth investments because this year, we have focused so much on the integration that then we'll have next year, some catching up to do. But usually, the digital investments are part of our -- running the operation.

Thank you, Pia. I will now move forward to the advertising side. And you have, this year, significantly outperformed the Finnish advertising market. Why is that? What is the secret that you have? And do you see that the outperformance is permanent?

I think that our chosen approach has been the right one. So once the pandemic hit us, we made sure that we were there helping our customers, really helping them to find ways to mitigate the changed environment. And at the same time, of course, we have been helped by increasing the digital reach, how we can then manage our kind of -- the total offering with this portfolio. So I expect it's partly how we have handled this year and partly because of the competitiveness of the portfolio and our sales teams.

Yes. And then a more detailed question about the programmatic digital advertising in specific. Do you see advertising improvement from the increased use of the programmatic digital advertising?

[indiscernible] question. So I'm sure I got the first one right. Just the end of the question.

Yes. So do you see advertising sales to grow from increasing usage of programmatic digital advertising?

The programmatic segment of the market grows faster than guaranteed part of the market, and that has been the trend on this market for quite some time. So -- and we expect that to continue.

And still related to the programmatic, are there any barriers of adoption of the programmatic in the market? And how penetrated is it overall?

I don't see any major barriers. It is -- the share is growing, and it's really then up to the media agencies and advertisers then how they want to plan the advertising campaigns and how they want to use the combination of programmatic and guaranteed. But like I said, I expect that segment to continue its strong growth.

Okay. And then thinking about the advertising customer as a whole, how does the churn profile change when they convert from print digital [ advertising? ]

So B2B customers, if they are as loyal to us when they use print instead of digital -- first of all, I think it's a gradual change. It's not kind of black and white that you stop using print and go to digital, but it's a change where the marketing mix gradually changes. And it -- and by doing that, also the roles of different media changes. So quite often then, there is a specific role for each media. So quite often, you still have a number of media in the portfolio, but then with different weights.

Thank you. And moving on to the pricing of advertising. Do you think that digital advertising prices will rise with growing digital subscription numbers?

I think the reach usually impacts pricing. So with increasing reach, that also then improves the impact of the advertising. So with that logic, you could expect also advertise -- the digital rises to go out. But it's really segment or very target group-based also, the pricing. So it's up to the price and demand as well, supply and demand.

And then the final question, about the free-to-air TV advertising prices in Finland. As we know, they have been the lowest in Europe for quite some time. Are there any catalysts or signs that we could look at that would indicate that the prices might be in increase? And how do you see that market to develop going forward?

The catalyst for the changing price level is that there is a balance between supply and demand. Finland -- in Finland, we have supplied -- the supply of TRPs have been excessive in -- when compared with the demand. So I think that's the key trend to follow, what are the field rates within the TV.

Yes. Thank you, Pia. Thanks for the presentation, and thank you for the lively questions in Q&A. And we will continue with Pia also in the Teams meeting afterwards. Now I would like to hand over to our CFO and COO, Markus Holm, who will tell you how all this implies in our financials. Markus, please go ahead.

Thank you, Kaisa. Well, what an extraordinary year 2020 has been for us. Two big divestments, the divestment of Media Netherlands and then the divestment of the classifieds business Oikotie in Finland. Then the acquisition of the regional media in Finland and its integration and so forth. We also now, with the latest, as you saw, the acquisition of Santillana. We have a good and strong platform going forward. And I think this shows the strength of our team and our capability of growing this business further. Let me then start with a few highlights of this presentation. Both Learning and Media Finland are performing well towards their long-term targets. After a year impacted by corona to some extent and the one-offs or items affecting comparability related to integrations, for instance, those have had some negative impacts on this year, but we see going forward into 2021 that we will deliver an improving cash flow. With the adjusted leverage target, we have a EUR 300 million to EUR 400 million headroom for M&A by 2022. We've undergone a quite significant transformation in these past few years. And as a result of this, we have now a balanced portfolio, 2 businesses, leading businesses in their field, Media Finland and Learning, both with an equal size roughly in terms of net sales and Learning with the earnings of almost 70% now of the total. With the acquisition of Santillana Spain, we feel now comfortable that we can increase the operational EBIT margin target to above 23%. That is a consequence of the relatively high profitability of this business. In Media Finland, the target remains unchanged despite the minus 1 percentage point impact -- negative impact related to the divestment of Oikotie. Let's then look a bit at 2020. Learning's net sales and the profitability is heading steadily towards the EUR 500 million and 20% EBIT margin. In Learning, we have not seen any major impacts due to the coronavirus. Media Finland, again, has proven its resilience despite the significant impacts of corona. The advertising sales declined by 13% in January and September 2020, and the recovery has continued throughout Q4 -- Q3, Q4. The net sales of the live events business were close to 0, but there, we have seen a positive earnings contribution due to the insurance compensation. And I'm really pleased that the Finnish media team have done an excellent work in integrating the regional media business. And we are now at the final steps of that integration. Looking at the costs. We have this year -- in Media Finland have significant temporary cost savings. And those, as you can see, is of a magnitude of EUR 15 million to EUR 20 million. They come from lower operating and content costs to mitigate the corona impact. We have also had lower paper and printing costs as a result of lower prices and volumes and then also the insurance compensation related to canceled events. How does this then look like ahead of 2021? Well, these are early days, of course, and we have the first views on this. But what we see currently is that there will be an impact, of course, of the structural changes that are somewhat positive. So there is the acquired regional news media business and the related synergies, of which next year, we expect to have some 70% roughly of those synergies in and then as a negative, the divested online classifieds business then offsetting that. This, as a net, we expect currently with the knowledge we have today to be a magnitude of EUR 5 million to EUR 10 million. Then we have the impacts of the organic developments that we expect to roughly offset each other. And so we see definitely a rebound in the advertising and the events business. But with the events business, it's good to remember that this year, we didn't have any sales there. Next year, we then expect then the sales to rebound mainly and not so much the profitability of the events business. So as we had the insurance compensation, the change in profitability year-on-year will not be that big. Then with the rebound of the advertising sales, one should also expect some rebound of the costs. We see an increase in personnel, content marketing, for instance, and as a positive, then the paper prices, paper costs that are going down. We also continue our growth initiatives in digital news media as you heard earlier. Learning's net sales and profitability are expected to grow in 2021. We expect a strong organic growth driven by curriculum renewals, especially in Poland and Netherlands. We see also improving profitability, driven by organic growth, which is further supported by the Santillana Spain acquisition. The closing preparations of Santillana Spain acquisition are proceeding ahead of the original plan. So currently, it looks like we could be closing this transaction as early as in January next year. And at the bottom of the page here, you can see the related items affecting comparability and CapExs related to this transaction, also the synergies that we expect then from 2022 onwards. We will deliver improving cash flow in 2021. We are quite confident about that. 2020 has been burdened by, in the first half, the divestment of Media Netherlands, which had a negative impact of EUR 22 million there, then, of course, the corona impact on the advertising and the -- business in Finland. We have also had relatively high transaction integration costs in total. And then there's a small impact also on the Oikotie divestment in 2020. In 2021, what one could expect is, of course, that there is some rebound of the advertising business and the positive effect of that on the EBITDA. Also, through the organic growth in the learning business, there should be some positive on the EBITDA. And then we have, of course, the acquisition of Santillana Spain that is improving the cash flow as well. And we also expect then transaction and integration costs to be lower than in 2020. The CapExs will grow with the new business, so somewhat higher than this year. And also, financial expenses and taxes, one could expect that the taxes and financial expenses will be a bit higher with the new business and the higher profitability. The group's strong financial position and improving cash flow allow us pay a solid dividend. We aim to pay an increasing dividend equal to 40% to 60% of the annual free cash flow. And I want to remind again that the EUR 22 million negative operating cash flow of the divested Media Netherlands business, we will exclude from the full year 2020 free cash flow for dividend calculation purposes. With the increasing share of growing and more predictable learning business, we are now comfortable to increase the leverage target to below 3 from the below 2.5 earlier. It's worth noting also that the IFRS 16 increased our leverage by 0.6 in the beginning of 2019. But at that point, we decided not to adjust the target. Santillana Spain acquisition will increase the leverage close to the new target in 2021, especially in the first half. We have solid financials, solid balance sheet, strong partnership banks. And we have good funding sources available. Currently, we have a bridge financing facility of EUR 480 million in place that we raised at the same time as we did the Santillana Spain acquisition. The maximum maturity of that is 12 plus 6 months. And part of that bridge funding, we converted now into 3 plus 1 year syndicated term loan of EUR 200 million. And now after this, we see currently an average interest rate with the syndicated debt that is a bit below 1%. We aim to further diversify our funding sources when converting the rest of the bridge financing into long-term financing. And with the well-developed pipeline and the good momentum that we have, we will continue to grow our learning business. We will focus on the European K-12 learning services, both learning content and digital platform businesses. And as we've seen also earlier, it could mean entering new geographies or expanding our offering in current markets. We have the headroom of EUR 300 million to EUR 400 million now. Roughly EUR 200 million of that comes through the increased leverage target, and the rest of it builds up with the free cash flow generated in 2021, '22. Finally, I want to, as a summary, say that as 2020, also 2021, we see that we have a good platform to have yet another successful year for Sanoma. Both Learning and Media Finland are performing well towards their long-term targets. And in Learning, even we see that we can now increase the target to above 23%. We are delivering an improving cash flow. And with the cash flow and the EUR 300 million to EUR 400 million headroom, we can continue to grow this business going forward and, last but not least, also pay a solid dividend to our shareholders. Thank you.

Thank you, Markus. And we have several questions for you. We have postponed them a bit into the end of this session. And I will start with Media Finland, which is, of course, interesting after the volatility that we have seen this year. And you mentioned that some of the costs will come back in 2020. One, while there are uncertainties around recovery related to advertising, media market and events, do you anticipate margin improvement at Media Finland in 2021 under all circumstances?

Well, that, of course -- one can't say that under all circumstances -- I think it's good to know that we have set a target of 12% to 14% for the Finnish media business that we think is realistic with this business as we have it today. And that remains our target. Then it is difficult, of course, to speculate on what the impact will be exactly with the corona still next year and the impacts on the advertising business then and the events business.

And for the Media Finland profitability to -- or the margin to improve into the target -- long-term target range, does that require a significant recovery in advertising market? Or can that be reached even though the advertising demand would be suffering.

Well, I can only repeat what I said. We see that what -- with the now change of the structure in the business with the regional media business and the divestment of Oikotie, there, we see a roughly EUR 5 million to EUR 10 million impact as a balance of that. Then related to the advertising and the events business related to advertising and so forth, the costs go a bit hand in hand with that. So that is a part that is more difficult to foresee.

Thank you, Markus. And I will move on to the Learning side and about the digital platforms and investments needed for them. How much do you invest in the IT and platform development annually in Learning?

The investment as such, the CapEx is roughly, what I can recall, EUR 40 million, EUR 45 million. So that's the CapEx part of the -- that goes into the development. But of course, we have also personnel running the platforms and to the development to some extent. So there's some more in our OpExs, but the CapEx part, the investment is that EUR 40 million, EUR 45 million.

Okay. Thank you. And then a question about Learnings, a new profitability target above 33% margin. Is the target valid irrespective of future M&A? Or could a sizable acquisition in Learning dilute the target?

The targets, we typically set with the knowledge we have at hand. And this target, we now set with the existing businesses, the acquisition we have now and know, and that's how we should see it.

Thank you. And...

I would add to that, if you take the publishing business on average in Europe, they have a relatively -- so the learning publishing business in general in Europe have a relatively good profitability.

Thank you. And 2 final questions on the more overall group perspective. First goes with a bit of human capital. Susan mentioned in her presentation that -- or in the Q&A, actually, that on the group level, we share, for example, technology and finance management synergies between Learning and Media Finland. Is human capital something that we also share?

Definitely. I mean that is something that we also want to see more of. Well, we have the example of my colleague, Rob, who has moved from Media Netherlands to the learning business now. And in the functions, I see that could also be possible to have also some move between businesses, but nothing significant, but something I at least want to encourage.

Thank you. And then the final question is about the funding structure. Would you consider a bond issuance to convert part of the bridge finance to long-term funding?

We're pleased we have that EUR 200 million syndicated facility now in place. And then we have the remaining part that we need to fund that. Currently, we are looking into various alternatives. A bond is one of the alternatives among those.

And a further question on that, are the funding decisions made on the group level or locally?

The funding, as such, we make on a group level for the said funding of Sanoma overall.

Thank you, Markus. That concludes the Q&A for your part. And with that, we are approaching the end of this CMD. I would like to thank you for participation and invite you into the Teams roundtable discussion, a bit informal chatting with Rob Kolkman and Pika Kalsta. We will start in 10 minutes, which is 10 past 4, EET and 10 past 3 CET. So a bit ahead of the original schedule. And you will find the link to the Teams meeting in the chat of the webcast. I will now hand over to Susan Duinhoven once more for closing remarks. I would like to thank all participants from my behalf. And please be in touch with us at Investor Relations also after the event. Thank you.

Thank you, Kaisa. I want to thank you all for your attendance and your insightful questions. I hope after this presentation, you share with us the enthusiasm for the business. And you've seen our transformation continuing. You've seen a solid financial performance, increasing cash flows, growing dividends. But I think the real thing that makes us stick and that makes us so enthusiastic about this business is what you also see in a year like this. In a year of turbulence and disruption, you see the importance of our business to the society at large: independent news, to give everyone trustworthy information; advertising, in order to help businesses grow their business again out of this crisis situation; and in learning, to provide the platforms and the materials for students to be able to learn and reach their potential even under difficult circumstances of home schooling. That is what makes Sanoma unique, strong financial performance, together with our role in society. I hope we have been able, even in this virtual event, to transmit that enthusiasm for the business. I want to thank you all and looking forward to seeing you again.

Okay. Welcome, Rob. Welcome, Pia. And thank you for your presentations during the webcast. We already had quite many questions for both of you, actually, over there. But now it would be even nicer to discuss maybe a bit -- even face to face. So this roundtable discussion will last at most 1 hour. We will start with questions to Pia about maybe Finland and then maybe after 30 minutes, maybe we will move on to Rob about learning. [Operator Instructions]

And with this, I will kickoff the meeting and hand over to Pia to tell a few words at how do you see now the Media Finland business and what would you like to envision.

Yes. Earlier I shared with you how we are doing in our 3 core areas: News feature, Entertainment and [indiscernible] how we did during the pandemic and also there was kin of structural changes we have done within Sanoma Media Finland and also shared her a bit of insight into the strategies that have taken place this year. And the floor is yours. Please ask any questions, and I was quite happy also hearing -- getting a lot of questions after the presentation.

Yes. I think we have the first question from Pia Rosqvist-Heinsalmi at Carnegie.

For the one you shown, the distribution news and feature, entertainment and B2B marketing services, can you give us some indication of the split of sales and profitability of these 3 areas?

The news and feature is our most used. But then otherwise, we look at the portfolio at SMS level. Like in the last thesis of my presentation, I shared with you actually how much part of Finland is news services. So those capabilities that enable us to make the digital transformation, the B2B, B2C, all those capabilities are shared. So that's the reason why it makes sense to actually look at the profitability at SMS level.

Okay. And then we have Pete-Veikko Kujala from SCB.

Pete-Veikko from SCB. Let's -- I have a couple of questions that scale from the TV side. You mentioned this slide [Audio Gap] are increased, at least what in the Finnish market. But is there like any realistic scenario when this type of rebalancing in the market would take place? Or is this like an opportunity that will continue to be an opportunity forever?

Let's say that way that we have not taken that into any -- into our budgets. But we know that because the supply and demand has not balanced in Finland and the price level is low in Finland. And we know that the TV is actually a very effective advertising medium. So in all other markets, the price has risen after the demand has exceeded supply. So I don't want to make any estimations when that will happen. But when you look at the other countries, that has taken place.

Yes. Understood. And continuing on that, is it still a fair assumption? Well, you are basically sharing the commercial-free to air market with MTV here in Finland. And MTV is not profitable, but [ Audio Gap]

Businesses, but it's not -- the profitability is lower than the SMS profitability in average for our TV business.

All right. And if we move on to the news side, you recently acquired the Alameda regional papers. Can you mention any of your thoughts on possibilities to share content between the papers? And would it make sense to basically do some distribution of some, for example, international news, the Helsingin Sanomat publication to then feed them to the regional names.

Yes. Actually really, really good questions. We -- this year has been really a year of integration. So we have now the regional business runs on our systems. And next year, we'll be then the year of development. And we are -- we try to be patient enough not to draw any too fast conclusions about how the regional business work but really make hypothesis, test them, learn about the market. And we have a number of hypothesis, how we could share content and how we could improve the regional offering. But we really need to be kind of respect the local audiences and learn all the time. So I think after the next year, next time when we have the CMD, then I have fact-based learnings, what we can do with the content. But I believe that working together, we and can improve the content. But when we look at the regional business, it's really important that we take care of the regional core, and that is serving the regional, the audience with the news from that region. And that is something that we need to take care of also in the future. And then at your next -- your question about could we share also international content via HS. And maybe you have already seen that we have started a Co-racial report with Wall Street Journal. And this is a cooperation where we are testing how we could, let's say, a bit even broader the service of HS content to our consumers. And it's been, at least, I think we are in the beginning, but the results so far have been good.

All right. One last from me. Some time ago, you moved a part of your magazine portfolio together with Helsingin Sanomat and Ilta-Sanomat. What should we think about the remaining magazines that were not moved for HS and IS and what size is this part of the business in terms of sales?

Yes. We did a split -- so split our magazine portfolio into 2 parts, into those magazines where we saw digital demand for that content area. And part of those magazines then we integrated with HS, and those were kind of where we see subscription demand for the content. And there, we see [ PD ] Science magazine, cooking, finance, and there are some weakness with the magazines than with IS. And there, we start to see the example. Like I mentioned for mini was an energizing one. We have already seen how it works with [ PD ] and Helsingin Sanoma. And now we have just launched the new HS family magazine. So it works well on that side. But interestingly enough, it really works for magazines who are in the unit where we concentrate, where we focus only on printed magazine. Because before, we were a bit in the gray area, and it was also a bit frustrating for the teams because it was kind of business transforming. This not -- or that what we are doing. And now we know that for those themes, the clear focus is to make it really good, printed paper, that is worth the money and make sure that it's so good that the readers continue to subscribe to that paper. And after that split, that business has been doing better. People are more happy with the products as well as people are more -- journalists are more happy to work with the product. So I think the split was a successful one even though, of course, it's been only about a year. So we are just in the early phases to see what can come out, especially from the combining news media and magazine.

Okay. I will hand back over to Pia from Carnegie. If you have any further questions, at least the hand is up.

Yes. I raised it again. A lot of interesting is ongoing on the audio and broadcast channels globally. So we see the next story, which is storytell, we see a lot of podcast platforms and all the add to the subscription-based sales, you are also increasing. Can you talk about your ambitions in Supla in specific?

Yes. Supla is really, I would say, super interesting project for us. It's a freemium model. So in that sense, it's a bit different from other audio book services because we have there also free content. So we can use a kind of -- also a digital sales funnel for that because we have radio podcasts and radio there and then if I convert it, then we can add to the subscribing base. So this area, of course, where we are quite new to when it comes to subscription audio. We have been with Supla already years, and we have learned how the podcast market is developing. But I must say, adding a subscription element to audio is very interesting because until now, we have a bit struggled with what will be the monetization model going forward and seems like also this business is turning to subscriptions.

Okay. Another question from me. With regards to content generated overall in your channel. Can you make any kind of -- is there an estimate to give on how much of the content you have in Sanoma Media Finland in all your channel? How much channels? How much is self-generated? And how much is something you acquire from third-party content creators?

You specified the question. Do you mean in TV or overall in Sanoma content?

Yes. Yes. Overall, in Sanoma, but maybe specifically in TV.

Because in TV, when we started Nelonen, we had a very modern model at that time since we didn't have any own production or whatsoever. At that time, all the TV companies have their own production and heavy personnel costs, and we have disrupted the market. And we have not changed that since. So we purchase all our content from independent production companies and U.S. studios, but it's really the domestic content that is important for us.

Okay. Thank you for questions to Pia. And now -- I mean Pia from Carnegie now. And I will move forward. I will give -- turn to Sami Sarkamies from Nordea.

I'd like to start by going back to the earlier discussion on free-to-air price levels. Just love to check if you have seen any progress during this year related to the balance between supply and demand or whether this is something you expect to happen in the longer term. And I expect that to happen in the longer term.

We expect that to happen in the long return. We have in this fall, actually, seen weeks when the market has been practically sold out. For the market level to change, it requires actually the whole seasons to be more or less sold out. So it's really the fill rates to be followed. And once that starts to happen, then you can expect also the prices to go up.

S Okay. But is that like a new phenomenon that you have seen even these weeks when the market was a bit sold out. But...

It's not fully new. It has taken 2, 3 years ago, we had time, but had 3 weeks. But then, actually, to be honest, we were expecting this year to be the year when the demand would exceed supply because we could see that the year have starts and demands towards heavy advertising being at a high level. But of course, now we are advertisers pulling back because of corona. And then next year, it's still, like I said, a bit hard to estimate given that advertisers do not yet know their approach.

Okay. And has this factor played a role when we look at the recent strong performance by Media Finland? I mean looking at the months of September and October, you have clearly overperformed the overall market.

Yes. It's -- what we've seen on the market, there has been still -- it's just that we have been able to sell larger products in the inventory and with a good contract base. So it's not because of the higher price level overall.

Okay. And then my second question would be on '21 outlook for Media Finland. There was this slide in the presentation by Markus where he was summarizing puts and takes. Can you just briefly recap the conclusions. From your perspective, how does '21 look in comparison to this year?

Yes. The portfolio changes have a somewhat positive effect on our profitability. And then the underlying operational performance is expected to be more or less at the same level as this year. We estimate the B2B market and B2B sales to bounce back and also the events revenue to come back. But like Markus already elaborated, it's only practically the B2B phase that will bring then additional margins to our business. But this year's then rigorous cost mitigations are temporary. So what we see next year is that the STIs will be back at the normal level. This year, we and other companies, we got lower pension payments. Next year, they will be at the same -- at the normal level. So there are a lot of costs that will return. But of course, then, like always, we have also cost mitigation actions so that it will be not a full recovery. So part of the kind of the balancing, the increase of the B2B sales, we are also investing in continuous digital growth. Like the HS Business News is one of those initiatives, but just one.

Okay. That's very helpful. And then my final question would be on the B2B revenues. What's your expectation regarding the rate of recovery next year? And then, I mean, how dependent are your margins on B2B revenues? I mean, for example, thinking of the current 12% to 14% margin range.

I would say, what event I can comment next year is that we don't expect next year as a market to fully cover to the '19 levels. We expect a bounce back, but not fully. And of course then when markets bounces fully back, it will be easier for us to reach also our long-term target. But for next year, we have not estimated that fast bounce back.

Thank you, Sami, for questions. Any further questions to Pia from the audience about the media business? I can't see any hands up now. If I may, Pia, the final question to you.

I thought that I was off the hook already.

Not yet. Not yet. But this is not a difficult one. But this has been a very, very exceptional year for you and the whole team. What do you see are the biggest successes that you have reached during 2020?

I think kind of when looking at long term, it has been that we have continued our digital transformation also this year. So despite all the turbulence, we have had clear focus where we are heading, and we have proceeded with our plans. And I showed you the kind of the growth figures for our subscription business. Of course, then the great performance of our advertising sales teams. And I must say that it has been an exceptional experience to integrate fully in a virtual environment. And it has really worked well. We have enjoyed working with our new colleagues from Sanoma. And maybe there has been even some democratizing effect that we have all been working remotely. So they have -- so there hasn't been a Helsingin [indiscernible] We have all participated equally in the integrations. So I would say the digital transformation continuing B2B share growth and then the successful integration. And I think this year has also kind of integrated Sanoma Media Finland as a team. In crisis, you learn to know people better. And what we have found from each other has been really good findings.

Excellent. Thank you, Pia. And we will now hand over to Rob Kolkman about the Learning business. And Rob, maybe you would like to start with a few words that how do you see the business? You have now been running it for almost 1 year.

Yes. Yes, almost 1 year indeed. Yes, first of all, I'm enjoying it very much. It's a really exciting business and a lot going on. And I think, of course, the corona situation has really sped up certain things there as well. But what I tried to show in my presentation was, of course, that we are really focused on those 3 areas, right? So very important in the local markets that we continue to win business there, that we continue to focus on the market share. And then secondly, of course, run the business with regard to really focusing on adding value for students and offering new services and things like that. And then thirdly, obviously, another busy year this year with the M&A in Santillana. And we're very keen to continue that. So yes, I think it's an exciting market. A lot is going on. And at the same time, we are very clear, I think, on where we want to focus the business.

Very good. Thank you, Rob. And I see no hands from the audience. So okay now we start to have hands. Very good. Thank you for activating. I will hand over to Petri Gostowski from Inderes.

It's Petri. Thanks for the insightful presentations. I'm looking at the share of subscription and net sales by country. You gave a good example of where Spain is and where Netherlands is currently. Could you just give some comments on what kind of time frame will you expect the Spain share to increase? And I'd like to go back how many years we'd be talking about, 2 weeks, towards the ambition, for example?

Yes. Good point. I mean, if you look at the Spanish market, you saw in my presentation that we see that sort of new reform coming into play in '22, '23, '24. And what we've seen so far in markets, but those are moments where you can really, of course, put new offering in the market as well. So we are very focused on making that first step also with the that in the Spanish market. How long it will take ultimately will definitely be over more cycle. It won't be in one, and it will also depend on some elements that we can control less, right? So there is, of course, the government funding. There is the Internet capability in school. But you can see that, that, over time, of course, is moving in that direction. So will definitely take its time. But we are very focused on making sure we do the right things depending on where the market is. And for Spain, initially, that is getting some of those core products introduced.

Sure. That's very helpful. Another question. You commented that some other market areas outside Europe may be lucrative for M&A. Could you just give some ideas what they may be?

We won't go into specifics, of course, with regard to them. But I can -- sort of, what Susan also, I think, mentioned on one of the questions was our focus is very much on K-12. And we -- and that is the primary, secondary vocation, right? So that is predominantly our first and foremost focus. And we think that within the European market, there is still a lot to be done there, also given the -- yes, we are leading the market there, but it is still a very fragmented market, right? But if the right kind of opportunity would come along from outside of Europe and it would really fit, let's say, on our primary, secondary or vocational market, we will seriously look at that. Because ultimately, that K-12 focus is, of course, the key element. But we also think in Europe, there is still a lot to do.

Thank you, Petri. And then I will hand over to Pete-Veikko Kujala from SEB.

Let's start with a question relating to the profitability levels of the different countries. And this is not really specific for your subsidiaries. But overall, what is driving the different profitabilities in the different countries? For example, if Belgium versus Poland, for example, what causes profitability differences in these markets?

Yes. I don't think we are announcing sort of profitabilities per math. But I can talk a little bit more, hopefully, that will help a little bit more about key elements, right? So one element is, of course, scale, and that's also what you see us focus on across different countries when we talk about the common platforms and technology. And that's also where I think we have a real advantage compared to some of our more local competitors, the ability to develop those platforms like Bingel, Encompass and a couple of other things. So I think it's that scale element. And obviously, you see that in markets that are bigger. That's also why we are excited about Spain because it's a big market. It is still very fragmented. And it's at the start of that digitalization. So it has all those kind of elements in favor of it. And similarly, of course, you see us doing that in a big market like Poland as well. So hopefully that helps a bit without, of course, going too specific on the country.

Yes. I understand the answers. Then moving on to the subscription part of the business. You showed that the Dutch market is ahead of the rest of the markets there. Can you give some -- your like initial experiences on what has been the effect to sales? And then, on the other hand, the profitability of these clients that have moved from this more traditional business model to then on-boarded on the subscription side of the business.

Yes. I think there's a few interesting sort of things we see in that mark. First of all, this is not all of a sudden happening, right? This is happening over time. And what you then see starting to happen is that we have more sort of stable increases based on the increased value per student. And you do start to see then less of that secondhand market that we talked about and all the sort of core advantages. But it is something that takes time. And it is also clear that the situation needs to be right with regard to infrastructure and also the teachers. So there is also a big element that what we do is helping the teachers get comfortable with our platforms, with our technology. And those are learnings that we, of course, also take to the markets where -- which you saw like Poland and Spain and others where we're much more at the beginning of that transition. So elements like that are key. And yes, you see over time that we then really start more and more seeing those blended methods but with the online leading the way. But this is -- yes, it's effectively still an annual sales cycle, right? So this is schools making a choice on a year-by-year basis, and that then moves gradually more towards subscription. But we have seen an increase now in usage, as I'll try to show, and also very much in that move to subscription. So we do think corona does speed up in some areas this transition.

Yes. And then continuing on this, and please let me know if my thinking here is somehow incorrect. But as you move to the subscription business, that, of course, increases like the stickiness of the business. But wouldn't it then also make it harder for you to do market share gains? Because my guess is that your competitors will also be moving to the subscription side.

Yes. So this is a very interesting point. So definitely, in some markets, we do, of course, see competitors move in that direction. But I think there is the element of scale here that is important. And you saw both on a European level, but also within countries, sometimes you have a very fragmented market still. And I think it will be more challenging for the smaller players to make this transition and to really invest in what is needed to move to that blended methods and also subscription model. So I do think there is that market share to be gained and possibly also M&A to really be able to do that. I don't think all players will -- if they're too small, will struggle to make that transition. But it will depend on the market and what speed that will go. But I see opportunities there for further market share growth as a result of that.

Thank you, Pete-Veikko. And I will now hand over to Sami Sarkamies from Nordea.

I have one question. Just looking for a clarification. When I look at the CFO presentation, it did sort of outline that next year, learning will benefit from strong organic growth due to Poland and Netherlands driving that. But then when I look at your presentation and the 1 slide with the cargo renewals and kind of the market growth, when I look at Poland, it's down next year, and the aggregate market is flat in comparison with this year. So please bridge the gap between these 2 metrics.

Yes. So it's a very good point. So let me start with Poland. So there's a couple of things to realize. So we see within the Polish market, of course, the last year of the curriculum kicking in next year. So that's why we talk about there is still a bit of curriculum to go. There are really topics still that need to come to market, be it less topics than we saw before. That's why you saw it go over that bump. But within that, of course, we are continuing to gain market share. So that's why if you look at it from our perspective and the growth, we still see some more growth there than purely market. So there's a bit of that difference going on. With regard to the Dutch market, and you can come back to follow-up questions, Sami. But with regard to the Dutch market, there you see there are underlying still some of the smaller curriculum changes, and Markus referred to it. But the core thing there is that more stable kind of increase value of the student. That was that line that you saw going slightly up in market value. So the dynamics in the Dutch market are different, but there are still some underlying curriculum changes there too. Hope that helps.

So the growth is mostly driven by market share gains?

Yes. From our perspective, within those markets, you then also see continuing of the market share gains or the increased value per student, which is pretty much what is happening in the Dutch market.

Okay. Thank you, Sami. Any further questions from the audience? I can't see any hands at the moment. Okay. We have further questions from Pete-Veikko Kujala from SEB.

This is basically an open question for you to give your thoughts that, any like innovative competitors or smaller operators in the learning space that you have kind of kept an eye on? And what are they doing? What are they -- what can you basically copy and do better than them?

Yes. Good question. I mean, first of all, this is one of the key things that we're trying to monitor is what is going on in the wider learning environment. And without going into specific 1 or 2 of the players but, of course, there are elements around personalized learning, online learning, where we really look at. A lot of these players at the moment are what I would call still in the sort of nice-to-have content area. So they have extra exercises, extra things you can do really, really good. And what we are trying to establish is can we use elements of that in a more curriculum-based blended method. So it is really looking at features, functionalities that we think are also applicable more in the -- in our type of educational focus. So that is really where we're looking at. And it is not an easy one to appreciate, an easy one to look at because there's an awful lot of players going on, very early stages, a lot of cases of the business model. So it's not so much about the way they earn the money. It's more about the sort of technological features and the way they deal with personalized learning that I'm very, very interested to follow. And then there is a wide range of players doing that. And we're trying to follow that to the best of our ability and trying to make it specific for a more curriculum-based content and solutions.

All right. And on M&A, if we push it forward a couple of years and you are now on the lookout again in the learning business for deals. If we look at the larger markets such as France or Germany, do you -- would you find it more interesting to acquire a business that has a small niche in one of the markets, like, for example, operating in just a few states, in the German market or operating in the French market in some key subjects or categories? Or would you be interested in kind of becoming an owner of a very large business, for example, in France or in businesses in the German market, which are operating in the entire German market?

Yes. Well, let's put it a bit more broadly without going too specific. But if you look at why I'm so enthusiastic about the Santillana business, it is because it does tick a few of the boxes that you mentioned. So it is really across the whole of the country. So it got a strong #1 or #2 position, and it has that element of still a long way to go on the digitalization. And those kind of elements are, of course, also important for us when we look at other acquisition targets. But it also always, of course, takes two to tango, right? So also the situation needs to be right for us to be able to move in certain markets. But those characteristics and, I would say, of course, to have a #1 or #2 position in the local market is when you look at the more content-driven acquisitions is definitely important because you need to have that scale again to be successful. The other one is more around the digitalization. And that is not more often to support our already existing presence in some of the markets to speed up the digital process or get a stronger position in that -- in some of our core markets. Hopefully, that gives a bit of a feel on how we look at that overall.

Yes. And a more specific question on Sweden. Do you think it would be possible for you to do M&A in the publishing space in Sweden? Or would the competitive authorities be saying, no, no?

I think Sweden is still a very fragmented market. So it's definitely one that we keep an eye on, but it has to be actionable. But yes, from the point of view of fragmentation, we think there is still things possible there.

All right. Thank you, Pete-Veikko. Any further questions? Please raise your hand if you would like to ask something from Rob still. This is a unique opportunity. If not, then I would like to conclude with 2 things, I guess. First of all, during this year, remote teaching and learning have certainly become familiar to everyone who has anything to do with education, either through children or being at teacher or whatever. So what has been your key takeaways when you have spoken with teachers during this year that -- and how are you going to take those with you so that we can benefit the teachers and they work even more going forward?

Yes. Well, first and foremost, I mean the passion that the teachers have shown across all of the countries that we operate in have been phenomenal. I've been truly, truly impressed with how teaches. And therefore, also the teams that we have in organizations are trying to make this situation work, right? So from that point of view, yes, truly impressed, and that is a key takeaway is how -- what people can do into these circumstances phenomenon. There are things, and I mentioned a couple with regard to some of our technical solutions, where we really saw the need. And also clearly, what was needed to help the teachers become more efficient. And I think that is where we've learned a lot, again, because this was also learning the hard way, right, what was really needed now for our products to be fully integrated with, let's say, Microsoft teams or Google for Education. So -- and that is a long list that we will continue to action on. But I think that was really good to see. But that passion for education and the willingness to make it work, didn't matter in which country you were, that was really truly impressive to see.

And then the final one is the same one, as I asked Pia. What are the key successes of this year that you would like to highlight?

Well, I think we have continued to really grow the business during this very exceptional year and growing it both, of course, organically. And you saw the strong growth that we highlighted for Poland. They're really capturing on that curriculum change and also via M&A. So continuing on our strategic priorities in a year like this where Teams also in our organization have been working from home pretty much since March, I think, is something I -- on behalf of the team, I'm very, very proud of. I really do think that's an exceptional performance. And with that, I'd like to think we have made a little bit of a difference as well to those 20 million students and the teachers to really help them continue to learn because, of course, that is very, very important. So in this case, like focus on your own strategy came really nicely together with that helping society and, in this case, both teachers and students. So yes, it was really good to see our teams stepping up like that.

Okay. Thank you, Rob. And if no further questions, I would like to thank for -- Rob and Pia once again to participating to this Teams meeting. And thank you for all questions also to the audience. And then I hope that you found the Teams meeting as well as the webcast -- the CMD webcast useful and insightful. And please be in touch to us at Investor Relations afterwards with any further questions.

Thank you.

With this, we conclude the Teams meeting and wish you a very good evening. Thank you.

Thank you. Bye-bye.

Bye-bye.