Sanoma Oyj (SANOMA) Earnings Call Transcript & Summary

[Interpreted] Dear shareholders, a warm welcome to Sanoma's 2022 Annual General Meeting. In order to prevent the spread of the coronavirus, also this year, the Annual General Meeting will be held without the presence of shareholders and their representatives at the venue. I thank all the shareholders for their understanding for voting in advance and following this meeting online. To allow interaction during the meeting, it is possible to put questions to the CEO regarding her presentation through the chat function. Shareholders have also had the opportunity to ask questions in advance. I will open the meeting officially by introducing Sanoma's Board of Directors. Since the 2021 Annual General Meeting, Nils Ittonen has acted as Vice Chairman; and Julian Drinkall; Rolf Grisebach; Anna Herlin; Mika Ihamuotila; Denise Koopmans; Sebastian Langenskiöld and Rafaela Seppälä has acted as members of the Board. My name is Pekka Ala-Pietila, and I am the Chairman of the Board. According to the Articles of Association, the Board of Directors is elected for 1 year at the time. For 2022, no changes are proposed to the composition of the Board. Shareholders representing more than 10% of all the shares of the company have proposed to the Annual General Meeting to establish a Shareholders' Nomination Committee for the company. According to the proposal, the main duty of the Shareholders Nomination Committee is to prepare proposals to the Annual General Meeting for the number, composition and remuneration of the members of the Board of Directors. Distinguished shareholders, the war in Ukraine affects us all. In the news, we read about the devastation, the casualties, the suffering, and the ever-increasing flow of refugees. We also read about the unity of people and nations and their desire to help. Extensive sanctions have been imposed on Russia. For its part, Sanoma has joined these sanctions and suspended purchases from Russia. We also seek to support the victims of the war in many ways. Among other things, we have donated to the Red Cross, made it possible for our employees to participate in voluntary work and made all use in Helsingin Sanomat about Ukraine available for everyone free of charge. This desire to help is pervasive throughout the staff. 2021 was another successful year for Sanoma. Despite the fact that the coronavirus pandemic continued to have its impact on society and the economy. Under challenging conditions, we continue to focus on our customers and help them face and overcome their challenges in these difficult times. The prerequisite for succeeding in unpredictable circumstances is to understand the magnitude and speed of change as well as to respond with agility and innovative solutions. Sanoma's Learning and media businesses play a -- fundamental roles in society and have a positive impact on the lives of millions of people every day. This positive impact has been further underlined during the ongoing pandemic. Our Learning products and services help teachers to develop every child's talents so they can reach their full potential. With our digital and printed Learning materials and services, we support more than 20 million students around Europe. And as a result of the pandemic, the use of digital materials and platforms, in particular, has grown rapidly. The independent and trusted media is essential for an open and democratic society. Our contribution to the freedom of speech through independent Finnish journalism has lasted for more than 140 years. In parallel, engaging entertainment creates common experiences for people to share. Today, Sanoma consists of 2 focused and leading businesses in their field. We are a leading player in the Learning business for primary and secondary education in Europe and in the media business in Finland. In society, both the Learning and media business have an important role to play and thus, Sanoma, as a company, has a significant responsibility for its impact. To guide our own operations, we have set ambitious sustainability targets related to people, environment, data and ethical business practices. Through these targets as well as our business, we are also committed to advancing the global United Nations Sustainable Development Goals. Our strategic intent is to grow particularly our Learning business through acquisitions for which we have a solid balance sheet. Our goal is to create increasing value for both our customers and shareholders through profitable growth. While exploring new growth opportunities, we are committed to paying an increasing dividend to our shareholders. Accordingly, the Board of Directors proposes to the Annual General Meeting a dividend of EUR 0.54 per share for 2021, slightly higher than in the previous year. We look to the future with confidence. I would like to thank Sanoma's employees across all operations and countries, the executive management team and the President and CEO, Susan Duinhoven for their dedication and work in making 2021 a success for both our customers and shareholders. The good result for 2021 is also reflected in the remuneration of the President and CEO and the members of the executive management team. The key aspects of remuneration are explained to the shareholders by the Chairman of the Human Resources Committee, Julian Drinkall, on a video and in the related presentation material published in advance on the company's website. Dear shareholders, thank you for your support and trust over the past year. I wish everyone an interesting Annual General Meeting in this exceptional form. Next, we will elect the chairperson of the meeting. I propose Attorney at Law, Riikka Rannikko for this position.

[Interpreted] Good afternoon, participants to the Annual General Meeting of Sanoma. My name is Riikka Rannikko and I will act here as the chair as well as record minutes of this meeting. And I do hope that next year we can meet in person. In accordance with the temporary legislation and to prevent the spread of the COVID-19 pandemic, this Annual General Meeting is organized so that shareholders and their representatives cannot arrive at the meeting venue. It has only been possible to participate in the Annual General Meeting by voting in advance and presenting counter proposals and questions in advance. The company has not received counter proposals to be put under voting in the given time. The company has published the answers to the shareholder's questions on the company website. The meeting will be streamed live on Sanoma's website, but the shareholders attending will not be recorded as participants in the meeting, nor can they take the floor in the event. Under Item 6, the President and CEO of Sanoma, Susan Duinhoven, will present the CEO's review, and this review will contain the presentation of the financial statements and will be made in English. I would like to remind you already at this point that with regard to the CEO's review, we have a chat function available online, and you can already put questions there to the President and CEO. I would also like to apologize for you for viewing my mobile phone because I will get those questions to -- via my mobile phone so that's why I need to take a look at that. The chat function will end in connection with President and CEO's review. So I will let you know when the questions will no longer be discussed here. These questions are not official questions as intended in the Annual General Meeting normally. The CEO's review available on Sanoma's website after the meeting. And the videos will also have Finnish subtitles after the presentation. Since only advanced voting has been possible, a voting has been carried out on the items on the agenda. Based on the advanced voting, we are aware of the results, and I will let you know these results, and they will also be recorded in the minutes under each item. The formalities related to the meeting are included in the notice to the meeting. They shall be recorded in the minutes accordingly. And now we are ready to move on to Item 3, election of persons to scrutinize the minutes and to supervise the counting of votes. As presented in the notice to the meeting, Attorney at Law Anniina Järvinen, next to me, will scrutinize the minutes and supervise the counting of the votes. Under Item 4, we will report the legality and quorum of the meeting. So according to the Temporary Law and the Articles of Association, this meeting was convened by press release on -- and was published on Helsingin Sanomat on Saturday, the 19th of February 2022. Registration to the Annual General Meeting and the advanced voting started on Friday, the 11th of March, and the last day for registration and advanced voting was Friday, the 1st of April. And it shall be noted that the meeting is legally convened and quarried. Item 5, recording the attendance at the meeting and adoption of the list of votes. This is based on the advanced votes present at the meeting, in addition to myself, is Pekka Ala-Pietila, Chairman of the Board; President and CEO, Susan Duinhoven; auditor in charge, Samuli Perala as well as assisting Sanoma personnel and technical staff and attorney at law, [ Mari Carp ]. Shareholders who have voted in advance within the advanced voting period and who are entitled to participate in the general meeting, we have a list of these participants submitted by Innovatix. We hear that 262 shareholders participated, representing 120,324,988 shares and votes corresponding to 73.56% of company's all shares and votes. And since these votes have been given under each item, you will now see a summary of all the votes cast, and we can, therefore, say that we have a sufficient majority for all these items and decision points. I will not read aloud the number of shares. You will have them available for you, and we will record them in the minutes. But thus, we will have the list of votes adopted, and we will an exit to the minutes of the meeting. And next, Item 6, presentation of the financial statements, the Board of Directors' report and the auditor's report for the year 2020. These documents have been available on the company website as of the 1st of March 2022. And next, the President and CEO, will present the review of financial statements. I'll give the floor to the President and CEO, Susan Duinhoven. This will be presented in English. And I remind shareholders about the chat function, which is available, and you can put questions through to the CEO after her review.

Thank you very much. Dear shareholders, also from my end, a warm welcome to this Annual General Meeting. I would like to give you an overview of the 2021 results, which were, again, showing a good year for Sanoma, a year of strong growth, both in revenues and the profitability and a much improved sustainability performance. If we look at the key things that we accomplished in the last year, we showed, again, strong operational resilience. It was, of course, for us and for the rest of the world, the second year of the pandemic. And even though it has some smaller impacts on, for example, our events business in Finland, overall, the business came through this pandemic in very good shape. And this is where I want to thank all our teams across the countries very much for their energy and their resilience in making this happen. And we saw luckily as well that resilience also showed in our engagement survey and that the people, even though impacted, of course, by the pandemic having to change their working practices, were still engaged with the company and with the work that they were doing. The year was also very much about integrating the businesses that we had recently acquired, most particularly, of course, Santillana in Spain, where we had bought the business at the last year of 2020 -- last day of 2020 and then spent 2021 on integrating that business into Sanoma. But also the regional news business in Finland. We accomplished the completion of that integration in 2021. Digitalization, which is a key strategic driver for us continued to support our business transformation. We saw that both in Learning where the increased digitalization positively impacts the business both in the Netherlands. But for example, also, it's Learning in its rollout in Germany, but also the media business in Finland continues to digitalize both in its subscription base and also in its advertising. But definitely 2021 was a year of the sustainability within Sanoma. Our ESG performance improved quite strongly with the launch of the sustainability strategy, and I'll come back to that in a bit more detail later. If we then summarize the year in the financial figures. There you see a strong growth in sales, 18% overall, of which 7% was comparable sales growth. And that's the part that we're particularly proud of. And that was both in the Media business and in the Learning business alike. The operational EBIT then followed that improvement and sales increased with 26% to close to EUR 200 million. Operational EBIT margin, excluding PPA, then increased to 15.8%, and the free cash flow followed that good profitability improvement to EUR 140 million last year. And with that, our net debt over EBITDA, our leverage improved by declining to 2.4 from 2.6 the year before. And that also means that it is well below our long-term target of being below 3. So meaning we have a solid balance sheet also for further acquisitions. But let me then go into a bit of detail on the Learning. There, the organic growth, 7% together with the Santillana acquisition, adding almost EUR 100 million in revenues made that the net sales grew with 28% to well above EUR 600 million. The materials business, so the content business in Learning grew across all markets, but the strongest in Poland and in the Netherlands. In Poland, we had, of course, a bit of help from the rapid expansion of the market. due to the last curriculum change. But that also means that in the Polish market, 2021 was the last year of that curriculum change. 2022 will show a little bit of shrinkage in that market. But in the Netherlands, we see that the shift to the subscription model that is happening there is leading to continuous growth. And that was helped by the government putting extra funds in order to make sure that the education of the children would not create a backlog due to the pandemic. So those 2 trends together with both in Poland and the Netherlands, a market share growth made that the content part of the Learning business grew quite significantly, but also the digital Learning platform business grew. And that most particularly due to adding new customers that had, in the corona pandemic period, experienced the benefits of digital education. And specifically, it's -- Learning in Germany grew very significantly due to the increased market demand, but I must also say due to the clever innovations of our sales team there that were completely customer-focused and helped customers through this difficult pandemic period. And with that strong growth, then came also a strong profitability improvement, 40% growth to EUR 134 million in 2021. And the majority, of course, came from adding Santillana to our results for the full year, but also the organic growth of 7% added quite strongly to that profitability improvement. And the margin improved then by 1.8 percentage point to 21%. But I think the graph also shows very clearly what has been happening in that Learning business in the last 5 years. You see a very strong top line growth, both autonomous growth added with the M&A. But then if you compare, for example, to 2018 when we had EUR 61 million EBIT, excluding PPA, to last year EUR 134 million. So we clearly see a growing importance of the Learning business within Sanoma as a whole. But let's then deep dive a bit on Santillana because that was, of course, an important acquisition at the end of 2020. We added 500 new colleagues to Sanoma. And the integration is going very well according to plan. It's the first year, and we have focused, therefore, on achieving the actual synergies and integrating the business into all our back-office systems, our procurement and our technology. The synergies that were estimated to be EUR 4 million around the time of the acquisition are also coming in play. So that is now confirmed and we have that clearly in view. We will fully see those financials in the 2023 results because with synergies on procurement and technology, you actually need to start using those new contracts in order to see the financial benefits of it so that's why it takes a bit longer. But where the integration was important for the Santillana team, of course, also the preparation for the curriculum reform was very important. That is -- that curriculum reform is now taking place in 2022, all the preparation having to be done in 2020 and 2021. The exact phasing of that curriculum reform is still a bit uncertain. That might still happen in 2022 and 2023, depending on the states as the local authorities in Spain take those decisions state by state or province by province, and some of those decisions have not yet taken. So we'll see how much of it is happening there, but the Santillana team being fully prepared. But then I would like to show you one of the products that the Santillana team well before the acquisition developed that we formed in and that we see quite nice opportunities to potentially also roll out internationally, and that is the ECOS product. [Presentation]

But let me then turn to Media Finland because also our media business had a very good year. Solid net sales growth, overall, 9%, of which organic growth was 7%, brought revenues to EUR 615 million, and that growth was both in subscription sales and in advertising. The subscription sales has grown strongly in the last couple of years. And also 2021 was no exception. The number of HS subscriptions grew with 1% and the -- and by now, more than 70% of those subscriptions have a digital paid-for component. But also the entertainment business, Ruutu+, those subscriptions grew with 15% year-on-year to around 320,000. The advertising sales grew with 7% year-on-year. And that was, of course, part of a recovery from the more heavy corona year of 2020. And all in all, it was still 5% below the 2019, so below the pre-corona level. But what was particularly interesting is that the digital advertising grew with 21% last year. And by now, it -- that growth outweighs the decline in print advertising. So at the end of 2021, for example, digital advertising in our news and feature business is already larger than the print advertising. Now the one area of the business that was impacted by corona also still last year was the events business. So the net sales was EUR 14 million, which was significantly above, of course, the year before, but it represents less than half of our normal event type of year. And there was no profit contribution from that because this is a fixed cost business when the events are less visited and there is no opportunity to make a profit there. So all in all, that was actually the one area of our business that still had impact from corona. But all in all, that net sales growth translated still nicely in earnings improvement, 10% increase to EUR 74 million last year, with a stable margin at 11.9%. And that earning improvement was, of course, driven by that rebound in advertising and the increase in subscription sales. But with the diminishing effect of corona, also some of the pre-corona cost came back to a more normal level. And that was particularly in the personnel cost, both the bonus provisions and the pension payments came back to more regular levels. But if you look here at the graph of the 5-year performance, I think you also see a very solid business. Stable revenues now the last year with the addition of the regional news business, a significant growth in revenues, but then very stable profitability margins and a nice increase in absolute profit. So all in all, the media business showing its resilience after 2 years of corona impact continuing to show good cash flow and very solid margins. And also in Media Finland, the year was characterized by integration work. And this was the integration of the regional news media business. We finalized that. We acquired that business in April 2020, and we added Aamulehti, Satakunnan Kansa and 13 smaller newspapers to the total portfolio. 350 new employees joined Sanoma through this acquisition with a very good cultural fit. And we announced at the moment that we did the acquisition, we announced a very significant amount of synergies of EUR 13 million per year. And those synergies were coming, on the one hand, from operational efficiencies, procurement, IT, and on the other hand, from shared operations and support functions of functions that we had not taken over, and we could put them into our Media Finland house of operations. We have now seen those full synergies coming to play. We will see the full results of that in 2022, but we have rounded off all the projects and can confirm that we have performed slightly over that EUR 13 million. But even more important, the strategic objective of this acquisition was to grow the digital subscriber base. And that we have done. The team has managed to grow with 20% the digital subscriptions within those regional newspapers. While the editorial teams have been able to continue to work completely independently and focused on their markets, on their readers. They share content but that is done at the direction of the editors in chief of each of the titles individually. But who better to tell you about that then Jussi Tuulensuu the editor in chief of Aamulehti himself. [Presentation]

The enthusiasm that Jussi is showing and talking about is critical for our operations. And that is more true in general. Passionate and dedicated people are key to our success. We employ overall more than 5,000 people across 11 countries, and their enthusiasm, their creativity is what shows in our product. The coronavirus pandemic has, of course, had impact on our way of working. Initially, the focus in 2020 was very much on the physical health and safety. And in 2021, it turned more into mental health and enthusiasm and engagement while providing the best tools and options for hybrid way of working, meaning both working remote at home and working in the office. But we are very happy to see that our annual employee survey that brings us these insights and checks how people's well-being is in the company that we had a high response rate, again, of 90%, but also that it showed that the overall score, even though it was a little bit lower than 2020, was 7.3%, is still well above the European benchmark and also showing a good dedication still to the company. Our long-term target, however, is to improve on this parameter and to improve to 7.5% or above. And we want to get that improvement by focusing on our people strategy, and that has a couple of elements. The first is we want to be a great place to work, inspiring and sustainable company culture promoting each other's well-being, training and safety, but also creating an equal and inclusive workspace, and we need to do that together. And the reason for specifically also focusing on that equal diverse and inspiring workplace is that we know when people feel better, their results will also be better. Our 2021 survey asked a very specific question on that. And that was on equal opportunities, and we scored already 7.3. But there, we have put ourselves a target to be scoring 7.6 or higher. We will take, therefore, quite a number of actions to improve the awareness to enhance diversity, equality and inclusion from 2022 and onwards. And one of these elements is gender balance. Gender balance is overall in our employee base with 56% women, already close to 50-50 so that we consider already close to target. But if we then look at the managerial staff, there we see that at directors and senior management level, the women represent only close to 40% of the total population. So there, we have put ourselves a very clear target to say, by 2030, we want to have 50% of women also in managerial roles. Now in the executive management team, we're already 50-50. And when we look at the team at this moment, we see a couple of familiar phases, Rob Kolkman, Pia Kalsta, but we see also Alex Green as a new CFO, who started on the 1st of March, and we announced that already in December. Alex will be responsible for the group's finance functions, be a member of the Sanoma's Executive Management Team and be directly reporting to me. Alex joins Sanoma from eBay, where he has worked as a CFO for the eBay Classified Group since 2013. This is also a good moment for me to thank Markus Holm, our previous CFO and COO, very dearly for his contribution in the last 5 years to the results of Sanoma. And we wish him a nice period with a bit of rest, but then also a lot of success in his future endeavors. Now 2021 was also a year of sustainability, as I already indicated before. And who better to tell you about that importance than our own staff. [Presentation]

In 2021, we have set ourselves ambitious ESG targets, and we have improved our performance. And we've done that by clarifying our sustainability strategy that is clearly of importance for, not only our employees, but also for all our stakeholders and shareholders. But it is important to realize that at the center of Sanoma's sustainability is the fact that our inclusive learning and sustainable media businesses have a positive impact on society every day. So from that core, we have then defined 4 supporting elements to a sustainable business. And the one key important area proved in a survey with stakeholders in 2020 to be trustworthy data. Data are becoming increasingly important element of our product, not only in media, but also in Learning. And we have, therefore, set ourselves the target to continuously train all our staff on privacy and security to make sure that they build the products with privacy and security in mind. And we're happy to say that in 2021, we did not have any major data breaches. But we also realize that we're under constant attack, especially in this day and age. The second part we already talked about, valued people, an essential part of our asset for Sanoma, and we target an employee engagement index of above 7.5, where last year, we were at 7.3. Vital environment, often associated, of course, with sustainability, for us as a company with a smaller climate footprint, maybe not as important, but still one of the key drivers. And there, we have put a challenging target to be carbon neutral by 2030. And last year, we already decreased our own greenhouse gas emissions by over 50%. But there, it's important to realize that our own operations represent only 10% of our total emissions. 90% of our emissions are associated with the suppliers that we use. So the 50% is only on our own. And in the coming years, till 2030, we will work to decrease to carbon neutrality also in our supplier base. And then, as a Nordic listed company, maybe more common part of our regular operations, responsible business practices. And there, we target that all employees annually participate in a conduct training. And last year, 97% of all our employees participated in the code of conduct e-training. So this summarizes our overall sustainability strategy, but let us highlight one element that stakeholders rightfully concluded was the key element, trustworthy data in this video. [Presentation]

Our strong sustainability performance then also reflected in the improved ESG ratings. And here, you see a couple of them, the MSCI rating, for example, improved to AA. Sustainalytics risk rating went down to 9.8, and the CDP score became a B. So all in all, that improved clarity and transparency increased also our ESG ratings. If I then turn to the outlook for 2022. There, we have indicated, when we presented the full year results, that in 2022, we expect the year to be, again, a good year for Sanoma. And we expect net sales to be between EUR 1.25 billion and EUR 1.3 billion and the group's operational EBIT margin, excluding PPA, to be between 15% and 16%. Regarding our operating environment, we expect that the continuing corona pandemic will not have a significant impact on our business and that the advertising market in Finland will be roughly stable. So that was in February. And then on February 24, the war in the Ukraine started, and we are shocked and appalled by the Russian Invasion, and the war and the ongoing atrocities in the Ukraine, and we stand with the Ukrainian people. And as our Chairman has indicated, we have contributed and made donations to the Red Cross to support the humanitarian aid to the Ukraine. But we also have businesses in countries close to the Ukraine. And specifically in Poland, our teams are doing all they can to support the refugees coming out of the Ukraine. Themselves, by the volunteer work, we have allowed, on their request, everyone in the Polish company to do 1 day a week of paid volunteer work. And -- but also in our own business, in our Learning business there, we deliver support. And we deliver support through communication and explanation to teachers, students and schools on how to handle this influx of refugees, of which the majority of them are children in the school-going age. Its Learning has translated its platform to Ukrainian and Russian in order to accommodate the posting of Learning content and the access to that by the refugees. But also in Finland, digital news about the war in the Ukraine is free for all readers. And Helsingin Sanomat, together with Dagens Nyheter in Sweden and Politiken in Denmark is publishing online news in Russian in order to provide independent and quality news to as many Russians as possible. If we talk in the business, the war has limited impact. We have no businesses in Ukraine or Russia. We have, of course, discontinued all sourcing from Russia, both in paper and in small technology providers. But we can expect, at some point, smaller indirect impact due to increasing operating costs and changes in customer demand. But at this moment, we do not see that in our business yet. If we then look towards the longer-term strategy. There, we want to grow through M&A, specifically in our Learning business, while paying an increasing dividend. And later on the agenda, you'll see that the Board proposes a dividend of EUR 0.54 compared to EUR 0.52 the year before to be paid in 2021. And that represents about a total of EUR 88 million, and a yield of 4% if we take the stock price at year-end 2021. The dividend will be paid in 2 parts, EUR 0.27 on April 20 with a record date of April 11 and EUR 0.27 in November. And this split is in order to accommodate the normal cash flow pattern in the business, which is heavily leaning towards the second half of the year. Our dividend policy is unchanged. Sanoma aims to pay an increasing dividend equal to 40% to 60% of the annual free cash flow. And when we then talk about M&A, we see an attractive, healthy pipeline in front of us, focused on K-12 learning. And we aim to grow specifically in learning content businesses by both increasing and strengthening our positions in the countries in which we already operate, but then also in new geographies. where the spending on education is stable and solid. That also means that while we are currently active within Europe, that over time, we might also expand outside Europe as long as those countries then fit within that same profile of stable, solid spending on education. When we look at the businesses that we select to be part of that pipeline, we focus on K-12 learning content businesses, and we look at leading businesses that are in the #1, 2 or 3 position in their market and that operate in markets with high barriers to entry because that is part of the attraction of the K-12 learning business for us. They need to be growing, profitable, cash generative and provide us opportunities for synergies, either immediate or in the future through our digital platforms. And as I said, our M&A pipeline is healthy. The market consolidation in K-12 is happening basically also due to the accelerating digitalization. The market players that are currently owned by foundations or family or private equity, they are faced -- specifically in markets that are not yet that digitalized, they are faced with an upcoming investment and typically reconsider, at that moment, if it is worthwhile for them to do those investments only in one market or in a limited number of subjects. And this is where our opportunity lies to help in that consolidation, given the fact that we are active in 11 European countries and coming out of countries with a high digitalization. And that makes us almost a little bit specialized by now in more complex separations and integrations. So a good position to be in to benefit us, Sanoma, from that ongoing consolidation in the K-12 learning market. So let me then summarize. We're a leading Learning company, capturing the growth opportunity in an attractive K-12 market. We're one of the global leaders in K-12, serving already over 20 million students. And we're in Finland, the leading cross-media company that is on its path to a very successful digital transformation. We aim to grow our Learning business further through M&A, while paying an increasing dividend. And through our Learning and media business, we have a positive impact on the lives of millions of people every day. Shareholders, I want to thank you very much for your support in the last year and look forward to 2022.

[Interpreted] Thank you very much. And now I believe it's time to have a look at what's in the chart. And again, most -- I would like to remind all the shareholders watching this. It's still possible to ask questions through the chat function. I would like to apologize for looking at my mobile phone. [Audio Gap] The pandemic and related distant Learning, increased sales of your digital Learning materials, [Foreign Language].

Yes, it's good to realize that in Learning most of our methods and content that we sell is sold both as a print and a digital solution in combination. And that means that even though the usage has increased very significantly, in the last year of the digital applications. It has not necessarily led to more sales because we're already selling it as one package. But where we do see some increase in sales is specifically in the digital learning platform. Take, for example, itslearning has increased very significantly in Germany because there, the pandemic made clear that schools were not digitalized enough to be able to teach remote. And itslearning, being a SaaS platform offered them a very good opportunity to roll out very quickly. So together with very good sales team in the German market, who focused immediately on this. We're able to roll out and expand very significantly. But in the majority of our business, we're already fully digitalized and offer teachers and schools already a full digital solution without them having to buy additional materials.

Thank you very much. Then the second question, why did Sanoma make a complaint on Yle Areena to the EU Commission? [Foreign Language].

Yes. YLE is a large player and a very established and valued player in the Finnish market, also by Sanoma. But we are competing in markets where a lot of movement is going on. And if we look very specifically at the VOD market, that is a very competitive market where YLE, given its sizable budget of over EUR 500 million, has 1.5x the budget than all the competitive players together. And that is state funded. And that is an -- that has an impact on all the commercial players. And what we have done is we have asked a question. And unfortunately, asking the question in these type of processes has to go through a complaint. And because it is a question about state funding, it is a question that needs to be put to the EU commission. So what we have done is we have asked the question to the EU Commission to review and see if the specific purposes of the state funding, if that is well-defined, and if that is of the correct size. And that's the question that we have asked and that we hope to get an answer to. We have not taken any position in that, but we think that as a commercial player having to play in -- with a significantly smaller budget in that same market, we need to know the answer in order to define our strategy going forward.

Then the next question, there have been continuous issues with the delivery of Helsingin Sanomat, and the subscribers do not get their morning paper. Why is the delivery performance so poor? And what are you doing to improve it? [Foreign Language].

And this is where the only thing I can do is sincerely apologize to all subscribers who have had delivery issues. There are lots of reasons, and I will give them, but it does not step away from the fact that we make a wonderful product. As a subscriber, you have paid for that product, and we need to make sure that it gets delivered. There is no way of saying that in any different way. But if I then say why is it now that this is so difficult? This year, we were confronted with a number of things that were happening together. The corona pandemic made that much less people were able and willing to work the difficult and hard work of distributing newspapers very early in the morning. People were ill, had to go in isolation, were not able to come to work, and that is typically something that then only shows in the middle of the night when it's very difficult to get new -- replacement people still at the workplace. At the same time, in Finland, we've had an unusually strong winter. Now a couple of days of snow is, of course, logical, but the snow on snow on snow has made delivery of papers a much more lengthy and heavy work, specifically in some of the more outer regions. So those things coming together, made it for Posti, our supplier, very difficult to keep the delivery performance at the targeted rate. Now what we're doing is we're putting extra effort in recruiting, putting extra bonus for people distributing, making changes to routes, making sure that the routes are smaller, and therefore, more doable. So all sorts of operational elements have been done by Posti. We have been in very close contact with them on these measures, tracking this on a daily basis and constantly in sort of more room type fashion problem solving those specific areas. But as I say, those are explanations, but my apologies are irrespective from that we make a product, we -- I want to have this distributed, and we should be doing better on that. We see small improvements now with improving weather, with the corona pandemic decreasing in its heaviness that it had specifically in the January period. So we're hoping that this will now be solved quite quickly, but again, third time, my apologies.

Thank you. Then the next question relates to Ukraine. So thank you for the news that you fearlessly deliver related to Ukraine. How do you support the mental health of the journalists working there? [Foreign Language]

Yes, that is definitely an area that is in great attention within the editorial floor to support each other because the images and the stories that our journalists are getting by and seeing on a daily basis are, of course, extremely impactful. So that is -- on the editorial floor, there is support for that. We are, of course, trained journalists, so I would say, having had also previous experiences in this. But nevertheless, this is way beyond the normal day of work. So we're having special attention for that with the teams.

Then the next question, you talked about enhancing diversity and inclusion at Sanoma. What kind of concrete actions are you planning to take? [Foreign Language]

Yes. We were very, very happy to see that as soon as we brought this topic to the larger employee audience that there were immediately also people standing up and saying, "I would like to participate, I would like to help and think about how to improve." And that is what we're doing. We're increasing awareness. We're putting people together to see how we can increase equality, diversity, how to handle that and what steps to make. And those teams are now working. They will come up with plans. We survey on a regular basis to see if we're making the right moves. But that is what we see going forward. And I'm very certain that those teams and enthusiastic participants will come up with interesting ideas. Recruiting is, of course, always a first point that you go to, but this is broader than just from a recruiting perspective. This is really how we work together.

[Interpreted] Thank you very much. Now I believe that I have topped my list here. So I'm looking at Kaisa there, and she's nodding her head. So thank you, Susan Duinhoven, for the presentation. [Foreign Language]. Thank you, President and CEO for your review. And I'd also like to thank for questions and answers, we won't take any further questions. We'll close the chat now. So we'll still adhere to the agenda Item 6, the recorded Review of the President and CEO is available on the company website after the meeting. And next, the company auditor, APA, Samuli Perala from PricewaterhouseCoopers, will present the auditor's report. This is a videoed recording and the auditor is sitting at the same venue here.

[Foreign Language]

[Interpreted] Thank you, Mr. Perala. And now we have covered Item 6. So we have presented the auditor's report, and we are now ready to move on to Item 7, adoption of the financial statements that were presented. And as we had the auditors have recommended the adoption of the financial statements, and you can now see the votes. [ 100 ], and we shall now adopt the financial statements for 2021. We move on to Item 8, resolution of the use of the profit shown on the balance sheet and the payment of dividend. And the President and CEO said that we will have EUR 0.54 dividend per share and the first installment of the 2 installments will be EUR 0.27 and the record date is the 11th of April, the payment day, 23rd of April. And we would pay the second part in November '22. And there, we expect the Board to make its decision on the 26th of October and to confirm the record day and the payment day. But currently, we think that the payment date would be the 4th of November and the record day, 28th of October. The Board's proposal has been available for the shareholders still on the company website. And the Board has estimated the company's financial standing as required by the Finnish Companies Act. And you can here see the votes. We have sufficient votes for this proposal, too. So we will, as an Annual General Meeting, adopt the Board's proposal on the use of profit and the time for the payment of dividend. Under Item 9, resolution on the discharge of the members of the Board of Directors and the President and the CEO from liability, and this applies to the persons who have been in the Board for the full financial period, Pekka Ala-Pietila, Nils Ittonen, Julian Drinkall, Rolf Grisebach, Mika Ihamuotila, Denise Koopmans, Sebastian Langenskiöld, Rafaela Seppälä and Antti Herlin and Kaisa Uurasmaa until the 13th of April and Anna Herlin since the 30th of April 2021. The President and CEO for the full year was Susan Duinhoven. The auditors have recommended the granting of discharge from liability to the members of the Board and the President and CEO for this audited financial period, and we shall state that these persons have not been participating in the voting who this decision will apply to. And thus, we have decided to grant discharge from liability for the members of the Board and the President and the CEO. Next, we have 2 agenda items regarding the remuneration report of the governing bodies and the policy of the remuneration. Let us start with the adoption of the remuneration policy. In the Annual General Meeting of 2020, the remuneration policy was adopted and the remuneration report for 2021 will be handled in this Annual General Meeting and will be adopted in this general meeting, and it is an advisory decision. Next, the Chairman of the HR Committee, Julian Drinkall will give a video presentation on the key matters of the remuneration report and go through the changes as proposed under the next agenda item. We'll get back to that after this video.

My name is Julian Drinkall, and I am the Chairperson of Sanoma's HR Committee. In this role, I would like to present you with the Board's proposal on Sanoma's updated remuneration policy. In addition, I will open with the key points related to the remuneration of President and CEO, Susan Duinhoven, in 2021. Her remuneration is presented in detail in the remuneration report 2021. Both the updated remuneration policy and the remuneration report 2021, are proposed for adoption at the Annual General Meeting 2022, and they are available at the company's website, sanoma.com. The reason we propose an update to the remuneration policy is the lengthening of the performance period in Sanoma's long-term share-based incentives to 2 years from 1 year previously. This change is based on the significant transformation Sanoma has gone through in recent years. It has become a leading European K-12 learning company, with a leading and focused cross-media business in Finland. With this transformation, the stability of the group's business has increased. This is as a result of an increase in the share of the more stable Learning business and a decreased share of the traditionally declining print advertising business. This increased stability enables us to lengthen the performance period of the share-based LTIs from 1 to 2 years. The 2-year performance period will be followed by a 1-year vesting period. In the updated remuneration policy, Sanoma's remuneration principles remain unchanged. According to the principles, the remuneration should support the business strategy, be based on performance, be competitive, encourage share ownership and be fair, transparent and simple in design. In 2021, the CEO's remuneration was in line with all of these prices. 85% of the remuneration paid to the CEO, Susan Duinhoven was variable and based on performance. 90% of the variable remuneration was share-based and she held approximately 459,000 Sanoma shares at the end of December 2021. For 2021, Sanoma increased the weight of sustainability targets in the short-term incentives from 10% to 20%. Targets related to Sanoma's employee engagement have long been part of the executive and managerial level STIs, and they are now complemented with targets related to data and privacy, which is one of Sanoma's main sustainability themes. KPIs for the financial targets continue to be the same, namely operational EBIT, excluding PPA, and adjusted free cash flow. In 2021, the company's financial and sustainability performances were strong and that is also reflected in the earned remuneration of the CEO. The targets for the short-term incentives were achieved by 127% and the targets for the long-term incentives by 131%. Details of the performance outcomes are available in the report. For short-term incentives in 2022, the target structure continues to be the same as in 2021, with financial targets making up 80% and sustainability targets related to employee engagement and data and privacy 20% of the incentive at the target level. In 2022, we are looking for another successful year for Sanoma. On behalf of the HR Committee, I would like to thank you as our shareholders for your continued support. Thank you.

[Interpreted] So we are at the agenda Item 10. We heard the remuneration report and its essential content. And you can see the number of votes cast on the screen, and we have a sufficient majority of the votes, and therefore, the basis -- on the basis of these results, this has been resolved and is an advisory decision. Item 11, adoption of the remuneration policy of the governing bodies. The remuneration policy of the governing bodies was adopted for the first time in the Annual General Meeting of 2020. It shall be presented to the general meeting at least every 4 years. And always, when essential, changes are made to it, and we just heard the major updates. The proposal has been published and available as of the 11th of February 2022, and copy has been sent to a shareholder upon request. This is also an advisory resolution. And as a new topic, there are the proposed amendments that is the remuneration of the Shareholders' Nomination Committee, but this item will be handled under the agenda point 17 later, which is about the establishment of the Shareholders' Nomination Committee and adopting its charter. The majority of votes is in favor of the proposal. Therefore, we adopt this agenda item accordingly, and we'll get back to this item under the Item 17 of the agenda. On we go to the Item 12, resolution on the remuneration of the members of the Board of Directors, Board committees and the shareholders Nomination Committee. We have a proposal that the monthly remuneration be kept as before, unchanged, and we will get the proposal on the screen. And further, meeting fees be set as follows: slightly changed. And you can see the summary on the table. And we have a new element that is the meeting fees to the Shareholders' Nomination Committee also available in the table. Accordingly, and this proposal also is applicable to the meeting fees, but is conditional to the establishment of the Shareholders' Nomination Committee under the agenda Item 17 with its charter as well. We already saw the figures on the table. So we do have the majority needed in favor of the proposal. So we'll record this into the minutes, and we have resolved to adopt the proposal as is, and we'll get back to this under the agenda Item 17. Agenda Item 13, resolution on the number of members of the Board of Directors. According to the Articles of Association, the Board of Directors has no less than 5 and no more than 11 members. The current number is 9, and the members are elected for the term, which ends at the conclusion of the next Annual General Meeting following the election. The proposal is that there'd be 9 members, and we can see the results of voting, and we'll confirm the number of members to be 9. Then we elect the members. At the agenda point 14, we can see the proposal here on the screen. And we'll take the next slide, we can see also the members. This is for the full calendar year. Proposed Pekka Ala-Pietila, Julian Drinkall, Rolf Grisebach, Anna Herlin, Mika Ihamuotila, Nils Ittonen, Denise Koopmans, Sebastian Langenskiöld and Rafaela Seppälä as members. And further the shareholders have proposed that the Chairman of the Board be Pekka Ala-Pietila; and Vice Chair, Nils Ittonen. The essential biographical information of all members has been available on the company's website, and we have a clear majority in favor of the proposal, therefore, we have resolved to elect the Board Chairman, Vice Chair and members as proposed in the notice. Next, we move to the auditors. Item 15, resolution on the remuneration of the auditor. Here, we have the Board's Audit Committee, Denise Koopmans' video recording where she will present the Board's proposal for the remuneration and election of the auditor. We will look at the video.

[Interpreted] Dear, Sanoma shareholders. My name is Denise Koopmans. I'm the Chair of Sanoma's Audit Committee since the AGM of 2020. I would like to introduce you the Board's proposal on the election of the company's auditor and their remuneration, which the Audit Committee has prepared. On the auditor remuneration, the Board proposes that, as also in previous years, the auditor will be paid according to an in-force approved by the company. In 2021, fees paid to the auditor for audit services were EUR 1.2 million, and fees paid for nonaudit services were EUR 100,000. Fees paid for audit services increased slightly, while fees paid for nonaudit services decreased. Regarding the selection of the auditor, the Board proposes that PricewaterhouseCoopers will continue as the company's auditor. According to PwC, Samuli Perala, the continuous auditor principal responsibility. PwC and Samuli Perala have acted as the group's auditor since the AGM of 2017. Thank you for your attention.

[Interpreted] And we will get back to this Item 15. So first of all, the remuneration of the auditor. We just heard the proposal, we have here the voting results, and thus, we will adopt the proposal for the remuneration of the auditor as proposed. Under Item 16, we have the proposal. You can see the votes here. So audit for PricewaterhouseCoopers, with Samuli Perala as the auditor with principal responsibility, are elected as the auditor here. And I will state that in the auditor's report for 2021, the auditors gave their opinion for the financial period also on adoption of the financial statements and the discharge from liability for the members of the Board and the President and CEO. So we shall adopt this item as proposed. Now we have a brand-new item at Sanoma's Annual General Meeting, Item 17, that I already referred to, establishment of the shareholders, Nomination Committee and adoption of the chart. Here, we shall first take a look at the votes. So we have a clear majority of votes for this proposal, and we will take the next slide, where we can see the essential content of this proposal. On the 11th of February, we have published a proposal of establishing a Shareholders' Nomination Committee and also to adopt a charter for it and the task of this committee would be to prepare proposals on the number, composition and remuneration of the members of the Board of Directors. And if needed, the extraordinary general meeting. The Shareholders' Nomination Committee is established until further notice until otherwise decided by the general meeting of the shareholders. And the Committee will consist of up to 4 members who represent the company's 4 largest shareholders who, on the crucial date, the 31st of May, is the -- preceding the next year's Annual General Meeting. So when we make that decision here, this year's 31st of May will be the first date for forming, establishing this nomination committee. And upon the Shareholder's Nomination Committee's decision, the Chairperson of the company's Board of Directors may be invited to serve as an expert in the Shareholders Nomination Committee without being a member or without having a vote or being counted in the quorum of the committee. The Shareholders Nomination Committee shall elect the Chairperson from among its members and the term of office of the members of the Shareholders' Nomination Committee expires annually upon the appointment of the next Shareholders' Nomination Committee to be appointed after the next Annual General Meeting following their appointment. The composition, tasks and activities of the Shareholders' Nomination Committee are defined in more detail in its charter, which has been available on the company's website. We had a clear majority of votes for this proposal, and thus, we shall adopt this proposal on establishing a Shareholders' Nomination Committee, and we will also adopt the previous proposals on the confirmation and remuneration for this particular committee. Next, we have the authorization issues for the Board of Directors. We have actually 2 proposals in line with previous years. First of all, the authorization for the Board of Directors to decide on the repurchase of the company's own shares. Based on this authorization, the Board of Directors could they decided on a repurchase of a maximum of 16 million of the company's own shares, corresponding to 9.8% of all shares of the company, the shares shall be repurchased with funds from the company's unrestricted shareholders' equity at the market, current pricing, public trading on NASDAQ Helsinki. And the repurchase would be meant to develop the company's capital structure to carry out or finance potential corporate acquisitions or other business arrangements to be used as part of the company's incentive program or to be otherwise conveyed further, retained as treasury shares or canceled. And this authorization would be valid until the 30th of June and terminate the corresponding authorization given to the Board of Directors by the Annual General Meeting on the 30th of April 2021. And we have the majority of votes here, and we shall thus adopt this proposal. The next authorization on Item 19, we will have the votes presented as there is a clear majority again. This has to do with authorizing the Board of Directors to decide on issuance of shares, option rights and other special rights entitling to shares. Once again, this is an identical authorization as what was granted a year ago, and it applies to a maximum of 16 million new shares, approximately [ 9.8 ] shares of all shares of the company as well as the conveyance of a maximum of 5 million treasury shares held by the company. And here is also possibility to do this in deviation from the shareholders' preemptive right. The authorization would be valid until the 30th of June 2023, and we'll replace the authorization to decide on issuance of shares that was given in the last Annual General Meeting. We had a clear majority for this proposal, and thus, we have adopted to this proposal for the Board to decide on and issuance of shares. We have now landed on Item -- the last Item. We have covered all the items. We will have the minutes of the meeting drafted of this meeting. They will be available for shareholders' view on the company website within a week. I think actually quicker than that. Since there's no other business, I will close this meeting at 15:26. And this -- thus I have closed this meeting. I wish you a nice Spring and Happy Easter. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]