Sanoma's Financial Statement Release 2011: Year of solid performance and structural changes in volatile markets

2/7/2012, 7:31 AM (Source: GlobeNewswire)

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Financial Statement Release 7/2/2012  8:30

Fourth quarter

- Net sales in the fourth quarter amounted to EUR 725.4 million (2010: EUR
717.3 million). Adjusted for changes in the Group structure, Sanoma's net sales
decreased by 1.8%.
- Operating profit excluding non-recurring items was EUR 60.6 million (2010: EUR
34.5 million).
- Non-recurring items in the fourth quarter amounted to EUR -8.7 million (2010:
EUR -7.2 million) and consisted mainly of sales gains, restructuring expenses,
including pension and exit packages, and write-downs of ICT assets.
- Earnings per share were EUR 0.11 (2010: EUR -0.01). EPS excluding non-
recurring items was EUR 0.18 (2010: EUR 0.04).

2011

- Annual net sales amounted to EUR 2,746.2 million (2010: EUR 2,761.2 million).
Adjusted for changes in the Group structure, Sanoma's net sales increased by
0.3%.
- Operating profit excluding non-recurring items totalled EUR 239.1 million
(2010: EUR 245.4 million).
- Cash flow from operations was EUR 273.8 million (2010: EUR 273.8 million).
- Earnings per share were EUR 0.52 (2010: EUR 1.85). EPS excluding non-recurring
items was EUR 0.87 (2010: EUR 0.94).
- The Board of Directors proposes a dividend of EUR 0.60 per share.
- In 2012, Sanoma expects its net sales to grow slightly, mostly due to the
acquired SBS operations in the Netherlands and Belgium. Operating profit margin,
excluding non-recurring items, is estimated to be around 10% of net sales.
Earnings per share excluding non-recurring items are estimated to grow.

KEY INDICATORS 10-12/ 10-12/ Change 1-12/ 1-12/ Change

EUR million 2011 2010 % 2011 2010 %



Net sales 725.4 717.3 1.1 2,746.2 2,761.2 -0.5

Operating profit excluding non- 60.6 34.5 75.6 239.1 245.4 -2.6
recurring items

  % of net sales 8.4 4.8   8.7 8.9

Operating profit 51.9 27.4 89.9 182.9 392.7 -53.4

Result for the period 24.4 -1.0   86.0 297.3 -71.1



Capital expenditure *       85.5 85.7 -0.2

  % of net sales       3.1 3.1



Return on investment (ROI), %     6.8 16.2

Equity ratio, %       37.0 45.7

Net gearing, %       105.7 63.8



Number of employees at the end of the period (FTE) 13,646 15,405 -11.4

Average number of employees (FTE)   14,471 16,016 -9.6



Earnings/share, EUR 0.11 -0.01   0.52 1.85 -72.0

Cash flow from operations/share, EUR 0.86 0.62 40.4 1.68 1.69 -0.6



Equity/share, EUR       7.70 8.42 -8.6

Dividend/share, EUR **       0.60 1.10 -45.5

Dividend/result, % **       115.6 59.4

Market capitalisation       1,443.3 2,628.0 -45.1




* Including finance leases
** Year 2011 proposal of the Board of Directors

Harri-Pekka Kaukonen, President and CEO

"The year 2011 was one of solid performance and strong portfolio management. Our
strategy to focus on consumer media and learning was demonstrated by these
changes in the portfolio. I am especially pleased with being able to enhance our
positions in consumer media in the Netherlands and Belgium through the
acquisition of SBS.

In the fourth quarter, despite increased economic uncertainty, we were able to
report a solid set of numbers. This clearly demonstrates our ability to adapt
quickly to changes in the environment. The significant increase in our operating
profit and cash flows was achieved as a combination of continued streamlining of
our operations and structural changes, in accordance with our set priorities.

Sanoma is transforming and we will further deepen our understanding of customer
behaviour, accelerate the speed of digital development through strengthening our
multi-channel approach, foster innovation and improve the efficiency of our
operations.

For the next three years, we have set the following priorities: ensure financial
flexibility by streamlining operating expenses and continuing to dispose of non-
core assets; develop our print businesses to ensure competitiveness and
successful digitisation; ensure profitable organic growth of our TV and learning
businesses; and to create growth from new digital services."

Outlook for 2012

In 2012, Sanoma expects its net sales to grow slightly, mostly due to the
acquired SBS operations in the Netherlands and Belgium. Operating profit margin,
excluding non-recurring items, is estimated to be around 10% of net sales.
Earnings per share excluding non-recurring items are estimated to grow.

Sanoma's net sales and result are affected by the underlying environment,
particularly by the development of advertising markets in the Group's countries
of operation. The 2012 outlook is based on the assumption that the advertising
markets in the Group's main operating countries will vary from stable to
slightly decreasing, as the economic uncertainty continues.

Net sales

Fourth quarter

In the fourth quarter of 2011, Sanoma's net sales increased by 1.1% and amounted
to EUR 725.4 million (2010: EUR 717.3 million). The growth came mainly from the
acquired TV and print operations in the Netherlands and Belgium. Currency
translations did not have a material effect on fourth quarter sales. When
adjusted for changes in the Group structure, net sales decreased by 1.8%.

Print circulation sales grew by 0.8%. Subscription sales increased by 6.7%, but
single copy sales decreased by 6.7%.

Advertising sales increased by 43.6%, mostly due to acquired TV operations in
the Netherlands and Belgium as well as the good performance of Nelonen Media
broadcasting operations in Finland. Online advertising sales increased by 8.7%.
In total, advertising sales accounted for 36.6% (2010: 25.8%) of the Group's net
sales.

The TV acquisitions also impacted on Sanoma's digital sales, which grew by
105.4% in the fourth quarter and accounted for 24.5% (2010: 12.1%) of the
Group's net sales. Broadband access and cable TV services in Finland, which were
divested in June 2010, are not included in the digital sales of the comparable
period.

2011

In January-December, Sanoma's net sales were stable and amounted to EUR 2,746.2
million (2010: 2,761.2) as the acquired operations compensated for the effects
of the divestments made in 2011 and 2010. The growth in Media came mainly from
the acquired TV operations in the Netherlands and increased sales of Nelonen
Media in Finland, more than offsetting in June 2010 divested Finnish broadband
access and cable TV services. The decrease in Trade's net sales was related to
the divestment of operations. Net sales were at the comparable year's level in
News, whereas in Learning they decreased slightly as a result of divestment and
lower sales from non-core operations. Currency translations did not have a
material effect on the 2011 net sales. Adjusted for structural changes, net
sales increased by 0.3%.

Advertising sales grew strongly during the first half of 2011, whereas the
development during second part of year was adversely affected by the increasing
economic uncertainty. Annual advertising sales grew by 23.3%.

In 2011, online sales grew by 13.8% to EUR 156.1 million. Total digital sales,
including also TV and e-learning, grew by 52.6%, and amounted to 15.9% (2010:
10.5%) of the Group's net sales.

The Group's circulation sales were at the comparable year's level, as the slight
increase in subscription sales offset the decrease in single copy sales.

By country, Finland accounted for 47% (2010: 51%) of the cumulative net sales
and the Netherlands 28% (2010: 23%). Net sales from other EU countries totalled
21% (2010: 23%) and non-EU countries accounted for 3% (2010: 3%).

Result

Fourth quarter

Sanoma's operating profit excluding non-recurring items in October-December
increased by 75.6% and totalled EUR 60.6 million (2010: EUR 34.5 million).
Structural changes explain the main part of the increase. Operating profit also
includes EUR 11.1 million of transaction costs and order backlog amortisations
related to the SBS acquisition, which are not categorised as non-recurring.
Operating profit excluding non-recurring items amounted to 8.4% (2010: 4.8%) of
net sales. Currency translations did not have a material effect on the fourth
quarter result.

In the fourth quarter, the Group's total expenses, excluding non-recurring
items, decreased by 8.5% due to structural changes and efficiency measures.
Paper costs increased by 3.7% and employee benefit expenses decreased by 2.8%.
The Group had 1,760 fewer employees than at the end of 2010, corresponding to a
decrease of 11.4%. The decrease in the number of personnel is mostly
attributable to the divestment of operations and the closing down of kiosks,
partly offset by the acquisition of the SBS operations in the Netherlands and
Belgium.

In October-December, the operating profit included EUR -8.7 million (2010: EUR
-7.2 million) of non-recurring items consisting mainly of sales gains,
restructuring expenses, including voluntary pension and exit packages, and
write-downs related to ICT. In the comparable period, non-recurring items
consisted of capital gains and non-recurring costs.

As a part of streamlining operations and ensuring competitive cost levels,
pension and severance packages have been offered to employees mainly in News,
Media Finland, Media Belgium, and Learning during the autumn, and as a result
33 employees have left the company during 2011 and further 225 employees will
leave the company during 2012. Related to this, EUR 21.4 million of non-
recurring restructuring expenses have been recorded, of which EUR 19.0 million
during the fourth quarter.

NON-RECURRING ITEMS 10-12/ 10-12/ 1-12/ 1-12/

EUR million 2011 2010 2011 2010



Media

Gain on sale (Humo and Desert Fishes)     9.1 2.6

Impairment of goodwill and intangible assets (Russia & CEE) -1.0 -53.4 -1.0

Write down of Jok Foe Group (Belgium) -1.6   -1.6

Restructuring expenses -9.8 -3.3 -9.8 -3.3

Impairment of intangible assets (The Netherlands) -3.4 -6.3

Gain on sale (Welho)   -0.4   179.0

Impairment of goodwill (Dutch press distribution) -28.9

News

Gain on sale (Lehtikuva)       6.0

Gain on sale (Sanoma Lehtimedia's local papers) 2.9   2.9

Restructuring expenses -9.2   -9.2

Learning

Impairment of goodwill (Language services)     -24.1

Sale of LDC     0.9

Write-down of intangible assets -2.9   -2.9

Loss on sale (Bertmark Norge)   0.1   -1.1

Restructuring expenses -0.1 -0.8 -2.8 -2.3

Impairment (Dutch non-core entity)   -2.1   -2.1

Trade

Loss on sale (Suomalainen Kirjakauppa)     -10.8

Write-down of real estates     -3.1

Impairment (Bookstores)     -0.8

Gain on sale (movie operations)     51.4

Loss on sale (Romanian operations)     -8.0

Loss on sale of Russian operations   -2.6 -0.8 -2.6

Gain on sale (Narvesen) 5.3   5.3

Restructuring expenses     -2.8 -1.0

Other companies

Gains on sales (real estates) 11.1   12.1 5.4

Restructuring expenses -1.5   -1.5

NON-RECURRING ITEMS IN OPERATING PROFIT -8.7 -7.2 -56.2 147.3



Impairment of share in associated company Hansaprint -22.1 -4.0 -22.1

NON-RECURRING ITEMS IN RESULTS   -22.1 -4.0 -22.1

IN ASSOCIATED COMPANIES



Sanoma's fourth quarter result included EUR -2.2 million (2010: EUR -24.0
million) of loss from associated companies. The most important associated
companies included in this line are DNA, Hansaprint, Stratosfèra and Helsinki
Halli (former Jokerit HC). The comparable quarter was affected by the EUR -22.1
million non-recurring impairment of Hansaprint.

2011

In 2011, Sanoma's operating profit excluding non-recurring items decreased by
-2.6% and totalled EUR 239.1 million (2010: EUR 245.4 million). The operating
profit improved in Media and News. The weak development of general literature,
divested in October 2011, and Hungarian learning operations lowered the result
in Learning. Despite the divestments, Trade's result was almost at the
comparable year's level. Costs increased significantly in the Group functions
due to development projects. In addition, the result includes EUR 34.4 million
of transaction costs and order backlog amortisations, which are not categorised
as non-recurring, related to the acquisition of the SBS TV and print operations.
Currency translations did not have a material effect on the 2011 results.

The non-recurring items included in the operating profit amounted to EUR -56.2
million (2010: EUR 147.3 million) and included impairments of goodwill and
intangible assets, restructuring expenses and gain on the sale of assets. A net
total amount of some EUR -21 million of non-recurring items were non-taxable. In
2010, non-recurring items related to capital gains from divestments, impairment
write-downs as well as restructuring costs, and some EUR 135 million of the net
amount of total capital gains and write-downs was non-taxable.

Sanoma's net financial items totalled EUR -35.2 million (2010: EUR -12.8
million). Financial income amounted to EUR 13.9 million (2010: EUR 11.1
million), of which EUR 9.4 million were exchange rate gains (2010: EUR 7.0
million). Financial expenses amounted to EUR 49.1 million (2010: EUR 23.8
million), of which EUR 16.3 million were exchange rate losses (2010: EUR 8.0
million). Following the increased debt, interest expenses amounted to EUR 28.8
million (2010: EUR 13.3 million).

Profit before taxes amounted to EUR 144.1 million (2010: EUR 356.0 million).
The effective tax rate was 40.3% (2010: 16.5%). Earnings per share were EUR
0.52 (2010: EUR 1.85). The effective tax rate and earnings per share were
affected mainly by the impairments of goodwill and non-taxable sales gains and
losses. The comparable figures were affected by the tax-free non-recurring gain
on the sale of the broadband access and cable TV services in Finland.

Sanoma's 2011 result included EUR -3.7 million (2010: EUR -23.9 million) of
profits from associated companies. The most important associated companies
included in this line are DNA, Hansaprint, Stratosfèra and Helsinki Halli.

Balance sheet and financial position

At the end of 2011, Sanoma's consolidated balance sheet totalled EUR 4,328.3
million (2010: EUR 3,203.0 million). In 2011, the Group's cash flow from
operations was EUR 273.8 million (2010: EUR 273.8 million). Cash flow from
operations per share was EUR 1.68 (2010: EUR 1.69).

Sanoma's equity ratio was 37.0% (2010: 45.7%) at the end of 2011. The return on
equity (ROE) was 5.9% (2010: 23.0%) and the return of investment (ROI) was 6.8%
(2010: 16.2%). In 2010, the divestment of the broadband access and cable TV
services in Finland positively affected these ratios. Equity totalled EUR
1,524.2 million (2010: EUR 1,376.0 million). Following the closing of the
acquisition of SBS operations in the Netherlands and Belgium, interest-bearing
liabilities increased and totalled EUR 1,727.2 million (2010: EUR 941.9
million). Interest-bearing net debt was EUR 1,611.2 million (2010: EUR 877.9
million).

In order to finance the SBS acquisition, Sanoma entered into the following
financing facilities: EUR 522 million syndicated term loan for five years, EUR
250 million short term bridge-to-bond facility and EUR 132 million syndicated
term loan and revolving credit facility for five years. The latter facility is
for the SBS Broadcasting B.V., owned by Sanoma and Dutch Talpa Media as a
minority shareholder. The transaction did not affect the financing terms of
Sanoma's previous credit facilities.

Investments, acquisitions and divestments in 2011

In 2011, investments in tangible and intangible assets, including finance
leases, amounted to EUR 85.5 million (2010: EUR 85.7 million). Investments were
mainly related to ICT systems as well as replacements and renovations. Sanoma's
business acquisitions totalled EUR 1,415.2 million (2010: EUR 37.1 million).

In March, Sanoma sold its movie operations in Finland and the Baltic countries.
In 2010, net sales of movie operations were EUR 88.6 million and operating
profit stood at EUR 8.4 million. The enterprise value of the transaction was EUR
116.0 million, and the transaction was finalised at the end of April.

In April, Sanoma sold its press distribution and kiosk operations in Romania. In
2010, net sales of these operations amounted to some EUR 23 million. The
remaining kiosk operations in Russia were also divested at the beginning of
April.

In April, Sanoma agreed to acquire the SBS free-to-air TV assets in the
Netherlands and Belgium together with Talpa Media in the Netherlands and Corelio
and Wouter Vandenhaute & Eric Watté in Belgium. The enterprise value of the
transaction was EUR 1,225 million. The net sales of the acquired companies
totalled EUR 404 million in 2010 and their operating profit was some EUR 110
million (pro forma, unaudited). The acquisition in Belgium was finalised on 8
June and the Dutch acquisition on 29 July after the necessary approvals were
received from the competition authorities.

In April, Sanoma announced that it will acquire the Finnish educational
publisher Tammi Learning and the Swedish educational publisher Bonnier
Utbildning, both from the Swedish media company Bonnier. At the same time,
Sanoma will divest its Finnish general literature publisher WSOY to Bonnier. The
transaction was completed on 3 October.

In August, Sanoma announced the divestment of its bookstore operations in
Finland. In 2010, net sales of Sanoma's Finnish bookstores were EUR 109 million
and operating profit EUR 2 million. The divestment was completed on 30
September.

In October, Sanoma announced the divestment of its ownership, 50% of the shares,
in the Latvian kiosk and press distribution company Narvesen Baltija. In 2010,
the net sales of the company were some EUR 59 million.

In November, Sanoma announced the sale of some 40,000 m2 of residential building
rights in Finland. The total value of the transaction is EUR 12.9 million, which
will be paid in three installments during 2011-2013.

MEDIA

The Media segment includes magazine, TV and digital businesses in 12 European
countries and comprises four strategic business units: Sanoma Media Netherlands,
Sanoma Media Finland, Sanoma Media Belgium and Sanoma Media Russia & CEE.

- The SBS acquisition is now completed and the figures are consolidated with the
Dutch and Belgian operations.

- Extra effort is put to restore viewing and advertising shares in the Dutch TV
market.

Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change

EUR million 2011 2010  % 2011 2010 %

Net sales 445.6 350.6 27.1 1,415.8 1,299.6 8.9

The Netherlands 232.2 136.1 70.5 642.0 490.4 30.9

Finland 86.2 87.4 -1.4 309.7 339.3 -8.7

Russia & CEE 56.7 60.9 -6.9 213.1 214.9 -0.8

Belgium 61.9 53.8 15.1 209.1 208.3 0.4

Other businesses and eliminations 8.6 12.4 -30.2 41.8 46.7 -10.5

Operating profit excluding non- 64.6 36.3 77.9 151.1 145.8 3.6
recurring items *

  % of net sales 14.5 10.4   10.7 11.2

Operating profit 53.2 31.6 68.2 92.0 287.9 -68.1

Capital expenditure       22.7 25.2 -9.8

Return on investment (ROI), %     4.6 16.6

Number of employees at the end of the period (FTE) 5,844 5,419 7.8

Average number of employees (FTE)   5,624 5,602 0.4



* In 2011, the non-recurring items included in the second quarter a EUR 9.1
million gain on sale of Humo and Desert Fishes, in the third quarter a EUR 3.4
million impairment of intangible assets in the Netherlands and a EUR 53.4
million impairment of goodwill and intangible assets in Russia & CEE, and in the
fourth quarter EUR 9.8 million restructuring expenses and a EUR 1.6 million
write-down of Jok Foe Group. In 2010, the non-recurring items included in the
second quarter a EUR 2.6 million gain from selling 49% of the Humo magazine and
a EUR 179.0 million gain on the sale of the cable TV operator Welho, in the
third quarter a EUR 28.9 million impairment of goodwill in the Dutch press
distribution and a EUR 6.3 million impairment of intangible assets in the Dutch
media business and in the fourth quarter EUR 3.3 million restructuring expenses
in the Netherlands and a EUR 1.0 million impairment of intangible assets in the
CEE countries.

Operational indicators * 1-12/ 1-12/

Magazines 2011 2010

Number of magazines published 280 279

Magazine copies sold, thousands 324,974 342,316

Advertising pages sold 48,559 50,549



Finnish TV operations

TV channels' share of TV advertising 32.8% 32.8%

TV channels' national commercial viewing share (10-44 years) 34.5% 35.5%

TV channels' national viewing share 15.0% 15.1%



Dutch TV operations

TV channels' share of TV advertising 30.1% 31.3%

TV channels' national viewing share (20-49 years) 22.9% 24.0%



* Including joint ventures

Fourth quarter

Net sales in Media grew by 27.1% in October-December following the consolidation
of acquired SBS TV and print operations. Adjusted for structural changes, net
sales declined by 4.4%.

Advertising sales grew by 66.4% and represented 47.0% (2010: 35.9%) of the
fourth quarter net sales. Online advertising sales increased by 8.4%.

Print circulation sales increased by 1.2% and represented 37.5% (2010: 47.1%) of
the fourth quarter net sales. An increase in subscription sales, mainly as a
result of the consolidated Dutch print operations, more than offset the decrease
in single copy sales.

The consolidation of TV operations and growing online advertising sales
increased the segment's digital sales. In total, these sales grew by 154.1% in
the fourth quarter and represented 33.5% (2010: 17.0%) of the segment's total
net sales.

In the Netherlands, net sales grew by 70.5%. Most of this growth came from new
TV and print operations, part of Sanoma Media Netherlands since 1 August 2011.
Magazine operations' sales were at the comparable quarter's level. In total,
circulation sales grew clearly due to acquired operations. Single copy sales
were slightly below the comparable period's level, but subscription sales
increased significantly. Circulation sales represented 36.4% (2010: 56.0%) of
the Dutch net sales. The declining trends in the readers market continued but
Sanoma Media Netherlands' market share remained stable. The Dutch market for
consumer magazine advertising, excluding TV guides, decreased by 2.0% in
October-December, while Sanoma Media Netherlands' print advertising sales
declined slightly in the fourth quarter. Online advertising sales continued to
grow clearly, but at a slower pace than in the previous quarters. In total,
advertising sales grew significantly following the consolidation of the TV
operations, and represented 52.1% (2010: 31.9%) of the Dutch net sales. The TV
advertising market in the Netherlands decreased by around 3% in October-
December. Sanoma's TV operations continued to developed in line with the
previous quarter.

In Finland, net sales declined by 1.4%, as the clear increase in Nelonen Media,
which includes free-to-air TV, pay TV, radio and online, did not fully offset
the somewhat declining sales in magazine publishing. During the fourth quarter,
the TV advertising market in Finland decreased by 1.7%. Nelonen Media
advertising sales outperformed the market. The magazine advertising market
decreased by 0.9% in the fourth quarter. Sanoma Media Finland's advertising
sales grew somewhat, driven by increased sales in Nelonen Media. In total,
advertising sales of the Finnish operations represented 42.0% (2010: 39.3%) of
net sales. Circulation sales were slightly below the comparable quarter's level,
due to declining volumes, and represented 41.9% (2010: 43.6%) of the Finnish net
sales.

Net sales in Belgium increased by 15.1%, due to acquired operations. Magazine
operations' sales decreased somewhat, when both advertising and circulation
sales declined, partly due to structural changes but also related to a decline
in consumer confidence and advertising spending. Sanoma Media Belgium retained
its market position in a slightly decreasing readers market. The TV advertising
market in Belgium declined by 1.7% in the fourth quarter. Sanoma's TV operations
continued to grow and its advertising market share improved to 24.3%. In total,
advertising sales represented 34.6% (2010: 27.3%) and circulation sales 45.6%
(2010: 56.1%) of the net sales in Belgium, respectively.

There have been a number of structural changes in Sanoma Media Belgium. The
reported figures include 51% of the weekly magazine Humo from May 2010 to May
2011. In connection with SBS acquisition, the remaining holding in Humo was
transferred to De Vijver, after which 33% of the net result of De Vijver was
included in the Belgium figures. Since the Belgium competition authorities
approved a joint control structure of De Vijver on 1 September, Sanoma's 33%
share in De Vijver Media (which includes 100% of Humo, the acquired TV
operations as well as the TV productions operations of Woestijnvis) is
proportionally consolidated line-by-line as of this approval.

In Russia and the CEE countries, net sales decreased by 6.9%, of which more than
half explained by negative currency translation effects. The advertising market
has been adversely affected by the Euroland economic uncertainty in all markets,
especially in Russia and Hungary. Advertising sales in the Russia and CEE
business unit decreased somewhat. In total, advertising sales represented 54.5%
(2010: 54.9%) of net sales in the Russia and CEE strategic business unit.
Following the declining market trends and the regional pressure on consumer
purchasing power, single copy sales came down in most countries. Circulation
sales decreased therefore clearly, and represented 32.0% (2010: 33.6%) of the
strategic business unit's net sales. The magazine portfolio, internet services
and local organisations are continuously optimised according to the market
situation.

Operating profit excluding non-recurring items in the Media segment in October-
December increased by 77.9%, due to acquired operations. The result includes EUR
11.1 million of transaction costs and order backlog amortisations, which are not
categorised as non-recurring, related to the SBS TV and print operations. In the
Netherlands, the results improved due to the acquired operations. Adjusted for
structural changes, profit in the Netherlands increased somewhat. In Finland,
the result decreased, mainly due to a significant drop in the result of magazine
operations. In Belgium, the result improved significantly, also when adjusted
for structural changes. In Russia and CEE countries, the operational result was
at the comparable quarter's level, as a result of strict cost control. The non-
recurring items in the fourth quarter result totalled EUR -11.4 million (2010:
EUR -4.8 million) and were mainly related to restructuring expenses.

2011

In January-December, Media's net sales grew by 8.9%. Growth came from the
consolidation of the acquired SBS TV and print operations in the Netherlands and
Belgium as well as increased sales of Nelonen Media in Finland, more than
offsetting the divestments made in 2010. Adjusted for structural changes, net
sales decreased by 0.4%.

Operating profit excluding non-recurring items increased by 3.6%, as increased
results in online operations and Finnish TV as well as the consolidation of the
acquired operations offset lower results in magazine operations in all business
units and effects of divestments in 2010. In addition, the result includes EUR
34.4 million of SBS transaction costs and order backlog amortisations, which are
not categorised as non-recurring. Non-recurring items included in the operating
profit totalled EUR -59.1 (2010: EUR 142.1 million) and included impairments of
goodwill and intangible assets, restructuring expenses and gains on the sale of
assets. In the comparable year, non-recurring items were related to gains on the
sales of assets, impairments of intangible assets and goodwill as well as
restructuring of operations.

Media's investments in tangible and intangible assets totalled EUR 22.7 million
(2010: EUR 25.2 million) and consisted mainly of ICT investments. The most
material acquisition in 2011 was the acquisition of the SBS TV and print
operations in the Netherlands and Belgium. In 2010, the most significant
acquisition was a 21% share in the Finnish telecommunication group DNA in
connection with the Welho transaction.

NEWS

The News segment includes the Sanoma News strategic business unit, Finland's
leading player in newspaper publishing and digital media.

- Advertising sales improved clearly in the tabloid Ilta-Sanomat and in free
sheets in particular. The Sanoma Kaupunkilehdet business unit improved its
market share of the free sheet media market.
- All main brands now also have online and mobile applications and the use of
the products in tablet and smart phone devices as well as e-commerce shows
significant growth.

Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change

EUR million 2011 2010  % 2011 2010 %

Net sales 112.0 114.9 -2.5 435.8 437.6 -0.4

Helsingin Sanomat 60.8 64.1 -5.1 238.5 235.4 1.3

Ilta-Sanomat 21.6 21.6 -0.1 84.4 83.3 1.4

Other publishing 25.4 25.0 1.7 97.0 99.5 -2.5

Other businesses and eliminations 4.2 4.2 -0.1 15.9 19.4 -18.0

Operating profit excluding non-recurring 14.1 13.0 8.6 49.4 47.2 4.6
items *

  % of net sales 12.6 11.3   11.3 10.8

Operating profit 4.9 15.9 -69.0 40.2 56.1 -28.4

Capital expenditure       16.9 14.0 20.4

Return on investment (ROI), %     16.7 22.0

Number of employees at the end of the period (FTE) 2,025 2,016 0.4

Average number of employees (FTE)   2,061 2,176 -5.3



* In 2011, the non-recurring items included in the fourth quarter EUR 9.2
million restructuring expenses. In 2010, the non-recurring items included in the
first quarter a EUR 6.0 million gain on the sale of Lehtikuva and in the fourth
quarter a EUR 2.9 million gain on the sale of Sanoma Lehtimedia's local papers.

Operational indicators 10-12/ 10-12/

Online services, unique visitors, weekly 2011 2010

Iltasanomat.fi       2,219,968 1,691,631

HS.fi       1,413,050 1,183,489

Huuto.net       458,174 452,538

Oikotie.fi       461,842 361,566

Taloussanomat.fi       664,339 604,821



        1-12/ 1-12/

Circulation       2011 2010

Helsingin Sanomat       366,973 383,361

Ilta-Sanomat       143,117 150,351



Fourth quarter

In October-December, net sales in News decreased by 2.5%. Adjusted for
structural changes, sales decreased by 2.0%.

Print circulation sales decreased by 0.9% in the fourth quarter. Subscription
sales decreased by 1.2% but single copy sales were at the comparable quarter's
level. Circulation sales accounted for 41.5% (2010: 40.8%) of the segment's
net sales.

Advertising sales decreased by 4.9%. The 10.3% growth in online advertising
sales did not offset somewhat decreasing sales of print advertising. This was in
line with the Finnish advertising market development. The market growth, which
began in the second half of 2010, is clearly slowing down and according to TNS
Gallup Adex, newspaper advertising in the Finnish market decreased by 3.9% in
the fourth quarter. Online advertising included in the statistics continued to
grow and was up by 18.6%. Advertising sales represented 50.7% (2010: 52.1%) of
the net sales in News in the fourth quarter.

Total digital sales increased by 15.4%, boosted by the growth of online
advertising and good pick-up in e-commerce. Digital sales consisting mostly of
online advertising, but also to larger extent content, represented 13.1% (2010:
11.1%) of the segment's net sales.

The net sales of the Helsingin Sanomat business unit decreased by 5.1%. The
underlying macro-economic uncertainty clearly affected advertising sales.
Accordingly, advertising sales decreased and represented 54.6% (2010: 57.2%) of
the business unit's net sales. Subscription sales were stable despite the
decreasing trend in the circulation volume. The multichannel use of Helsingin
Sanomat continued to grow in the fourth quarter.

The Ilta-Sanomat business unit's net sales were at the comparable quarter's
level, supported by favourable development in online advertising sales.
Advertising sales represented 30.2% (2010: 30.3%) of the business unit's net
sales. Circulation sales were stable. The total volume of the Finnish tabloid
market has decreased by 5% in the last 12 months. Ilta-Sanomat's market share
increased to 58.3% (2010: 58.1%) of the tabloid newsstand market.

Net sales from other publishing operations increased by 1.7%, as the good
development in Sanoma Digital Finland and free sheets offset the slight decrease
in regional papers. Free sheets continued to improve their market positions.

In October-December, News' operating profit excluding non-recurring items
increased by 8.6% as a result of strict cost control in all business units.
News' operating result in the fourth quarter included EUR -9.2 million (2010:
EUR 0.0 million) of non-recurring items, related to voluntary pension and exit
packages.

2011

In January-December, News' sales decreased by 0.4%. Adverting sales grew
slightly. Digital revenues, consisting mostly of online advertising, but also to
larger extent content, continued to develop positively and amounted to 12.1%
(2010: 11.6%) of News' total sales. The underlying macro-economic uncertainty
during the latter half of the year clearly affected advertising sales adversely
and visibility worsened. Circulation sales were at comparable year's level.
Adjusted for structural changes, net sales increased by 1.9%.

Operating profit excluding non-recurring items increased by 4.6% in 2011, mainly
as a result of strict cost control in all business units. Non-recurring items
included in the operating profit totalled EUR -9.2 million (2010: EUR 8.9
million) and were related to voluntary pension and exit packages.

News' investments in tangible and intangible assets totalled EUR 16.9 million
(2010: EUR 14.0 million), and consisted mainly of investments in digital
business, ICT and replacement investment in printing. There were no material
acquisitions in 2011 or the comparable year. In September 2010, business
information and media monitoring service provider Esmerk was transferred from
News to language services business unit in Learning.

LEARNING

The Learning segment includes Sanoma's learning as well as language service and
business information operations. Sanoma Learning is a leading European provider
of learning materials and solutions in print and digital format.

- The transaction with Bonnier was completed in October and the acquired
operations are consolidated in the fourth quarter figures for learning business
unit. At the same time, Sanoma divested its Finnish general literature
publisher.

Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change

EUR million 2011 2010  % 2011 2010 %

Net sales 52.7 65.1 -19.1 343.1 350.1 -2.0

Learning 34.7 33.7 2.8 256.6 249.3 3.0

Language services 8.4 8.9 -5.6 32.4 27.1 19.4

Literature and other businesses 10.4 24.8 -58.0 59.5 83.6 -28.9

Eliminations -0.8 -2.2 64.8 -5.4 -9.9 45.7

Operating profit excluding non-recurring -19.7 -14.4 -37.4 45.5 52.6 -13.4
items *

  % of net sales -37.5 -22.0   13.3 15.0

Operating profit -22.7 -17.2 -32.5 16.6 47.1 -64.7

Capital expenditure       11.5 14.9 -22.4

Return on investment (ROI), % 3.6 8.9

Number of employees at the end of the period (FTE) 2,489 2,656 -6.3

Average number of employees (FTE) 2,583 2,629 -1.7



* In 2011, the non-recurring items included in the first quarter a EUR 0.9
million non-recurring income related to sale of LDC, in the second quarter EUR
1.7 million restructuring expenses and in the third quarter EUR 1.0 million
restructuring expenses and a EUR 24.1 million impairment of goodwill. In the
fourth quarter, the non-recurring items included EUR 2.9 million write-down of
intangible assets. In 2010, the non-recurring items included in the first
quarter a EUR 1.1 million loss on the sale of Bertmark Norge and in the second
quarter EUR 1.3 million, in the third quarter EUR 0.2 million and in the fourth
quarter EUR 0.8 million restructuring expenses and in the fourth quarter a EUR
2.1 million impairment of a Dutch non-core entity.

Fourth quarter

Net sales in the Learning segment decreased by 19.1% in October-December, mainly
related to the divested operations. Adjusted for structural changes, net sales
decreased by 4.6%.

The learning business has, by nature, an annual cycle and strong seasonality. It
accrues most of its net sales and results during the second and third quarters.
Changes between quarters can be significant and often explain most of the
changes from the comparable period.

Net sales in learning business increased by 2.8%, mainly related to structural
changes. In Hungary, the net sales continued to decrease significantly for the
second consecutive quarter as a result of the cuts in the governmental budget
and the difficult political situation. In other countries, market conditions
remain stable.

Net sales in language services business decreased by 5.6%, due to the
disappointing development of translation and localisation services.

Net sales in literature and other businesses decreased by 58.0%, mainly related
to the divestment of the Finnish general literature operations as of October
2011.

Operating result excluding non-recurring items in the Learning segment decreased
by 37.4%, due to the structural changes. The learning business has strong
seasonality within the year, the first and fourth quarter being typically loss-
making. For general literature, on the other hand, the fourth quarter is
typically the strongest one. Due to this seasonality, the transaction lowered
the Learning segment's fourth quarter result. In Learning, most of the results
were accrued already during the second and third quarters. In the comparable
quarter, the result was positively affected by a EUR 3 million release in
pension provisions. In the fourth quarter 2011, the result included EUR -3.0
million (2010: EUR 2.8 million) of non-recurring items.

2011

In January-December, Learning's net sales decreased by 2.0%. Adjusted for
structural changes, net sales decreased by 1.0%.

Operating profit excluding non-recurring items decreased by 13.4%, mainly
related to structural changes. Non-recurring items included in the operating
profit totalled EUR -28.9 million (2010: EUR -5.5 million) and consisted mainly
of impairment of goodwill in language services, restructuring expenses and
write-downs related to ICT. In 2010, the result was positively affected by a EUR
3 million release in pension provisions.

Learning's investments in tangible and intangible assets totalled EUR 11.5
million (2010: EUR 14.9 million). They comprised mainly investment in ICT. In
October, Sanoma completed the acquisition of the Finnish educational publisher
Tammi Learning, which is now fully integrated into the Finnish operations and
the Swedish educational publisher Bonnier Utbildning (now Sanoma Utbildning)
from the Swedish media company Bonnier as well as the divestment of its Finnish
general literature publisher WSOY to Bonnier. The most significant transaction
in the comparable year was the acquisition of the remaining shares of the e-
learning provider YDP in Poland.

TRADE

The Trade segment includes Sanoma's kiosk operations and trade services in
Finland, Estonia and Lithuania.

- Customer volumes and sales of Finnish kiosks showed positive development for
the second consecutive quarter and the operational result improved
significantly.
- The Finnish press distribution unit Lehtipiste has managed to keep the sales
of single copies of magazines at the comparable year's level contrary to the
trend in many other countries.
- Despite the continued challenging economic conditions in the Baltic countries,
Trade's Estonian and Lithuanian businesses improved their performance
significantly.
- Bookstore operations in Finland were divested at the end of September and the
kiosk and press distribution operations in Latvia in October. The sold
operations were deconsolidated as of 1 October.

Key indicators 10-12/ 10-12/ Change 1-12/ 1-12/ Change

EUR million 2011 2010  % 2011 2010 %

Net sales 124.5 200.5 -37.9 597.0 726.3 -17.8

Kiosk operations 94.0 102.4 -8.2 379.2 398.4 -4.8

Trade services 28.6 34.5 -16.9 121.7 131.3 -7.3

Bookstores 3.7 43.2 -91.5 77.0 120.6 -36.2

Movie operations 0.0 23.9 -100.0 28.4 90.0 -68.4

Eliminations -1.8 -3.5 47.2 -9.2 -14.0 33.8

Operating profit excluding non-recurring 4.6 5.6 -18.7 18.8 19.1 -1.4
items *

  % of net sales 3.7 2.8   3.1 2.6

Operating profit 9.9 3.0 228.1 49.2 15.5 218.2

Capital expenditure       32.4 29.7 9.0

Return on investment (ROI), %     22.4 5.7

Number of employees at the end of the period (FTE) 3,110 5,149 -39.6

Average number of employees (FTE)   4,023 5,486 -26.7



* In 2011, the non-recurring items included in the second quarter a EUR 0.8
million loss on sale of Russian operations, a EUR 8.0 million loss on sale of
Romanian operations, a 51.4 million gain on sale of movie operations and EUR
2.4 restructuring expenses. In the third quarter the non-recurring items
included a EUR 10.8 million loss on sale of Suomalainen Kirjakauppa, a EUR 3.1
million write-down of real estates, a EUR 0.8 million impairment in bookstores
and EUR 0.4 million restructuring expenses. In the fourth quarter, the non-
recurring items included a EUR 5.3 million gain on sale of Narvesen. In 2010,
the non-recurring items included in the third quarter EUR 1.0 million
restructuring expenses and in the fourth quarter a EUR 2.6 million loss on sale
of Russian operations.

Operational indicators 1-12/ 1-12/

  2011 2010

Number of kiosk outlets 1 051 1 350

Customer volume in kiosk operations, thousands 166 214 181 328

Customer volume in bookstores, thousands 4 992 7 214

Number of copies sold (press distribution), thousands 186 848 258 793



Fourth quarter

In October-December, Trade's net sales decreased by 37.9%, due to the divestment
of operations. Net sales adjusted for structural changes increased by 3.2%.

Net sales from kiosk operations were down by 8.2% in the fourth quarter due to
the divestment of the Latvian, Russian and Romanian operations. The growth both
in net sales and in the number of customers in the comparable part of the kiosk
chain in Finland continued, mainly as the result of a major optimisation of the
kiosk network and continued performance uplift measures during the past three
quarters. Net sales grew in Lithuania and were at the comparable quarter's level
in Estonia.

Trade services' net sales decreased by 16.9% due to the divestment of the
Latvian, Russian and Romanian operations. Net sales increased in Finland and
Estonia.

Bookstore operations in Finland, divested at the end of September, were no
longer included in Trade's figures in the fourth quarter.

Movie operations, divested at the end of April, were no longer included in
Trade's figures in the second half of 2011.

Trade's operating profit excluding non-recurring items decreased by 18.7% in
October-December due to the divestment of bookstores, where Christmas sales are
important. The operational result in kiosk operations improved significantly as
a result of increased customer volumes, several efficiency measures and
divestments of loss-making operations. The average margin per customer
increased, improving the result in Finnish kiosk operations. The result improved
also in trade services. Trade's operating profit in the fourth quarter included
EUR 5.3 million (2010: EUR -2.6 million) of non-recurring items, related to the
sales gain of the divested operations in Latvia.

2011

In January-December, Trade's net sales decreased by 17.8% due to the divestments
of the Finnish and Baltic movie operations in April, the Romanian kiosk and
press distribution operations in April, the remaining Russian kiosk operations
in April, the Finnish bookstore operations in September and the Latvian kiosk
and press distribution operations in October. Net sales adjusted for structural
changes increased by 0.1%.

In 2011, Trade's operating profit excluding non-recurring items decreased by
1.4%. The positive effects of divesting loss-making operations as well as the
improved performance of kiosk operations and trade services compensated almost
fully for the loss of result from the divested movie and bookstore operations.
The non-recurring items included in Trade's operating profit totalled EUR 30.4
million (2010: EUR -3.6 million) and consisted mainly of sales gains and losses
related to divestments.

Trade's investments in tangible and intangible assets totalled EUR 32.4 million
(2010: EUR 29.7 million), and focused mainly on concept development in kiosks,
ICT projects and the renewal of Finnkino's long-term rental agreements, which
alone accounted for close to one half of the investments. There were no material
acquisitions in 2011.

THE GROUP

Personnel

In 2011, the average number of persons employed by the Sanoma Group was 17,618
(2010: 19,462). In full-time equivalents, the number of Group employees at the
end of the year was 13,646 (2010: 15,405). Divestments and restructuring
decreased the number of personnel in 2011. In addition, some of the
restructuring measures initiated in 2011 will affect the number of employees
also in 2012. In full-time equivalents, Media had 5,844 (2010: 5,419) employees
at the end of 2011,  News 2,025 (2010: 2,016), Learning 2,489 (2010: 2,656),
Trade 3,110 (2010: 5,149) and Group functions 178 (2010: 165).

The total employee benefits to Sanoma employees in 2011, including the expense
recognition of options granted, amounted to EUR 549.7 million (2010: 545.9
million).

Dividend

On 31 December 2011, Sanoma Corporation's distributable funds were EUR 539.8
million, of which profit for the year made up EUR 77.6 million.

The Board of Directors proposes to the Annual General Meeting that:
- A dividend of EUR 0.60 per share, or in total an estimated EUR 97.7 million,
shall be paid.

- A sum of EUR 0.55 million shall be transferred to the donation reserve and
used at the Board's discretion.
- The amount left in equity shall be EUR 441.6 million.

In accordance with the Annual General Meeting's decision, Sanoma paid out a per-
share dividend of EUR 1.10 for 2010. Sanoma conducts an active dividend policy
and primarily distributes over half of the Group result for the period in
dividends.

AGM, Financial Statements and Annual Report

Sanoma Corporation's AGM will be held on 3 April 2012 at 2 pm at the Congress
Wing of the Helsinki Exhibition & Convention Centre, Finland. The agenda for the
meeting will be later available on the Group's website at Sanoma.com.

Sanoma's annual review, Financial Statements, Board of Directors' Report and
Corporate Governance Statement for 2011 will be published in digital format in
the Materials section of the Group website during week 10 (the week beginning 5
March). A printed copy of the Annual Report will be available during week 11
(the week beginning 12 March) and can be ordered from the Group website.

Shares and holdings

In 2011, 89,486,428 (2010: 63,477,720) Sanoma shares were traded on the NASDAQ
OMX Helsinki. Traded shares accounted for 55% (2010: 39%) of the average number
of shares. Sanoma's total stock exchange turnover was EUR 1,096.9 million (2010:
EUR 987.9 million).

The volume-weighted average price of a Sanoma share was EUR 12.30, with a low of
EUR 7.83 and a high of EUR 17.79. At the end of the year, Sanoma's market
capitalisation was EUR 1.4 billion (2010: EUR 2.6 billion), with Sanoma's share
closing at EUR 8.87 (2010: EUR 16.22).

The Company had 28,302 shareholders at the end of the year, with foreign
holdings accounting for 9.8% (2010: 9.8%) of all shares and votes. There were no
major changes in share ownership during the fourth quarter and Sanoma did not
issue any flagging announcements.

At the end of 2011, Sanoma's registered share capital was EUR 71,258,986.82 and
the number of shares was 162,812,093 including the 1,500 interim shares
registered on 3 January 2012.

Board of Directors, auditors and management

The AGM held on 5 April 2011 confirmed the number of Sanoma's Board members as
10. Board members Jane Erkko and Rafaela Seppälä were re-elected, and Nancy
McKinstry and Kai Öistämö were elected as new members to the Board. The Board of
Directors of Sanoma consists of Jaakko Rauramo (Chairman), Sakari Tamminen (Vice
Chairman), and Annet Aris, Jane Erkko, Antti Herlin, Sirkka Hämäläinen-Lindfors,
Seppo Kievari, Nancy McKinstry, Rafaela Seppälä and Kai Öistämö as members.

The AGM appointed chartered accountants KPMG Oy Ab as the auditor of the
Company, with Pekka Pajamo, Authorised Public Accountant, as Auditor in Charge.

Sanoma's new organisational model was announced on 5 August 2011. As of 1
September, the Executive Management Group (EMG) comprises: Harri-Pekka Kaukonen
(President and CEO of the Sanoma Group, chairman of the EMG), Jacqueline
Cuthbert (CHRO), Jacques Eijkens (CEO, Sanoma Learning), Koos Guis (CEO, Sanoma
Media Russia & CEE; acting member), Kim Ignatius (CFO), John Martin (Chief
Digital Officer, CDO), Dick Molman (CEO, Sanoma Media Netherlands), Anu Nissinen
(CEO, Sanoma Media Finland), Pekka Soini (CEO, Sanoma News), Aimé Van Hecke
(CEO, Sanoma Media Belgium), and Customer Market Officer, CMO, which will be
appointed later. On 9 December, it was announced that Heike Rosener will succeed
retiring Koos Guis as of 1 February 2012.

Board authorisations

The AGM held on 5 April 2011 authorised the Board to decide on the repurchase of
a maximum of 16,000,000 of the Company's own shares, accounting for 9.8% of
total voting rights that the maximum number of own shares covered by the
authorisation would provide entitlement to. This authorisation is effective
until 30 June 2012 and terminates the corresponding authorisation granted by the
AGM on 8 April 2010. The Board of Directors did not exercise its right under
this authorisation during the fourth quarter.

The Board also has a valid authorisation from the AGM held on 8 April 2010 to
decide on an issuance of a maximum of 82,000,000 new shares and a transfer of a
maximum of 5,000,000 treasury shares, together accounting for 35.5% of total
voting rights that the maximum number of own shares covered by the authorisation
would provide entitlement to. The authorisation will be valid until 30 June
2013. Under this authorisation, the Board decided on 20 December 2011 on the
issuance of Stock Option Scheme 2011 and on 22 December 2010 on the issuance of
Stock Option Scheme 2010.

Seasonal fluctuation

The net sales and results of media businesses are particularly affected by the
development of advertising. Advertising sales are influenced, for example, by
the number of newspaper and magazine issues published each quarter, which varies
annually. Television advertising in the Netherlands, Finland and Belgium is
usually strongest in the second and fourth quarters.

Learning accrues most of its net sales and results during the second and third
quarters.

Seasonal business fluctuations influence the Group's net sales and operating
profit, with the first quarter traditionally being clearly the smallest one for
both.

Significant risks and uncertainty factors

The most significant risks and uncertainty factors Sanoma currently faces are
described in the Financial Statements and on the Group's website at Sanoma.com,
together with the Group's main principles of risk management. Many of the
identified risks relate to changes in customer preferences. The driving force
behind these changes is the ongoing digitisation. Sanoma has identified action
plans in all its strategic business units on how to respond to this challenge.

With regard to changing customer preferences and digitisation, new entrants
might be able to better utilise these changes and therefore gain market share
from Sanoma's established businesses.

Normal business risks associated with the industry relate to developments in
media advertising and consumer spending. Media advertising is sensitive to
economic fluctuations. Therefore, the general economic conditions of the
countries in which the Group operates and the economic trends of the industry
influence Sanoma's business activities and operational performance.

Sanoma's financial risks include interest rate and currency risks, liquidity
risk and credit risk. Other risks include risks related to equity, impairment
and availability of capital. At a Group level, the most significant risks relate
to liquidity risk and changes in exchange rates and interest rates.

As a result of the SBS acquisition, Sanoma's consolidated balance sheet includes
about EUR 3.0 billion in goodwill, publishing rights and other intangible
assets. Most of this is related to magazine and TV operations. In accordance
with IFRS, instead of goodwill being amortised regularly, it is tested for
impairment on an annual basis, or whenever there is any indication of
impairment. Major changes in business fundamentals could lead to impairment.

GROUP FINANCIAL STATEMENTS (FULL-YEAR FIGURES AUDITED)

Accounting policies

The Sanoma Group has prepared its Interim Report in accordance with IAS 34
'Interim Financial Reporting' while adhering to related IFRS standards and
interpretations applicable within the EU on 31 December 2011. The accounting
policies of the Interim Report and the definitions of key indicators are
presented on the Sanoma website at Sanoma.com. All figures have been rounded and
consequently the sum of individual figures can deviate from the presented sum
figure. Key figures have been calculated using exact figures.

CONSOLIDATED INCOME STATEMENT

EUR million 10-12/ 10-12/ 1-12/ 1-12/

  2011 2010 2011 2010



NET SALES 725.4 717.3 2,746.2 2,761.2

Other operating income   37.4 20.3 144.3 258.8

Materials and services   277.9 320.4 1,123.9 1,207.4

Employee benefit expenses 185.6 175.3 676.5 668.6

Other operating expenses   157.3 168.7 586.2 554.2

Share of results in associated companies -1.2

Depreciation, amortisation and impairment losses 90.1 45.9 319.7 197.1

OPERATING PROFIT 51.9 27.4 182.9 392.7

Share of results in associated companies -2.2 -24.0 -3.7 -23.9

Financial income 9.3 2.4 13.9 11.1

Financial expenses 24.6 6.6 49.1 23.8

RESULT BEFORE TAXES 34.4 -0.8 144.1 356.0

Income taxes -10.0 -0.2 -58.1 -58.6

RESULT FOR THE PERIOD 24.4 -1.0 86.0 297.3



Result attributable to:

Equity holders of the Parent Company 18.1 -0.9 84.5 299.6

Non-controlling interests 6.2 -0.1 1.5 -2.3



Earnings per share for result attributable

to the equity holders of the Parent company:

Earnings per share, EUR 0.11 -0.01 0.52 1.85

Diluted earnings per share, EUR 0.11 -0.01 0.52 1.85





STATEMENT OF COMPREHENSIVE INCOME

EUR million 10-12/ 10-12/ 1-12/ 1-12/

  2011 2010 2011 2010



Result for the period 24.4 -1.0 86.0 297.3

Other comprehensive income:

Change in translation differences -2.2 1.2 -25.6 9.8

Cash flow hedges -4.8 0.2 -11.7 0.2

Income tax related to cash flow hedges 1.1 -0.1 2.9 -0.1

Other comprehensive income for the period, net of -5.9 1.3 -34.4 10.0
tax

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 18.5 0.3 51.6 307.3



Total comprehensive income attributable to:

Equity holders of the Parent Company 12.3 0.4 50.1 309.6

Non-controlling interests 6.2 -0.1 1.5 -2.3




CONSOLIDATED BALANCE SHEET

EUR million 31.12.2011 31.12.2010



ASSETS



NON-CURRENT ASSETS

Tangible assets 343.6 429.3

Investment property 5.8 8.7

Goodwill 2,316.2 1,447.5

Other intangible assets 709.8 403.2

Interests in associated companies 219.3 248.7

Available-for-sale financial assets 15.4 15.8

Deferred tax receivables 29.9 34.8

Trade and other receivables 44.3 28.3

NON-CURRENT ASSETS, TOTAL 3,684.3 2,616.3



CURRENT ASSETS

Inventories   96.8 122.8

Income tax receivables 12.5 8.6

Trade and other receivables 418.4 391.0

Available-for-sale financial assets 0.3 0.3

Cash and cash equivalents 116.0 64.0

CURRENT ASSETS, TOTAL 644.0 586.8



ASSETS, TOTAL 4,328.3 3,203.0



EQUITY AND LIABILITIES



EQUITY

Equity attributable to the equity holders of the Parent Company

Share capital 71.3 71.3

Fund for invested unrestricted equity 203.3 203.3

Other reserves -8.7 0.2

Other equity 988.0 1,096.5

  1,253.9 1,371.2

Non-controlling interests 270.3 4.8

EQUITY, TOTAL 1,524.2 1,376.0



NON-CURRENT LIABILITIES

Deferred tax liabilities 146.1 94.2

Pension obligations 17.2 26.7

Provisions 6.3 7.3

Interest-bearing liabilities 1,101.2 472.5

Trade and other payables 38.9 19.9

NON-CURRENT LIABILITIES, TOTAL 1,309.7 620.5



CURRENT LIABILITIES

Provisions 15.3 15.6

Interest-bearing liabilities 626.0 469.4

Income tax liabilities 27.4 22.1

Trade and other payables 825.8 699.4

CURRENT LIABILITIES, TOTAL 1,494.5 1,206.5



LIABILITIES, TOTAL 2,804.1 1,827.0



EQUITY AND LIABILITIES, TOTAL 4,328.3 3,203.0




CHANGES IN CONSOLIDATED EQUITY

EUR million

  Equity attributable to the equity holders of the Parent
Company



    Fund

    for       Non-

    inves-       cont-

    ted       rol-

  Share unres- Other     ling Equi-

  capi- tricted Re- Other   inte- ty,

  tal equity serves equity Total rests total



Equity at

1 Jan 2010 71.3 188.8   931.1 1,191.2 15.4 1,206.6

Share subscription

with options   14.5     14.5   14.5

Expense

recognition of

options granted       3.6 3.6   3.6

Dividends paid       -129.5 -129.5 -1.9 -131.3

Change in non-

controlling

interests       -17.8 -17.8 -6.5 -24.3

Donations       -0.5 -0.5   -0.5

Comprehensive

income for the period   0.2 309.4 309.6 -2.3 307.3

Equity at

31 Dec 2010 71.3 203.3 0.2 1096.5 1371.2 4.8 1,376.0



Equity at

1 Jan 2011 71.3 203.3 0.2 1,096.5 1,371.2 4.8 1,376.0

Share subscription

with options   0.0     0.0   0.0

Expense

recognition of

options granted       3.5 3.5   3.5

Dividends paid       -179.1 -179.1 -0.6 -179.7

Change in non-

controlling

interests       8.2 8.2 264.6 272.8

Comprehensive

income for the period     -8.8 58.9 50.1 1.5 51.6

Equity at

31 Dec 2011 71.3 203.3 -8.7 988.0 1,253.9 270.3 1,524.2




INCOME STATEMENT BY QUARTER

EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/

  2011 2011 2011 2011 2010 2010 2010 2010



NET SALES 610.2 689.7 720.9 725.4 637.9 715.4 690.6 717.3

Other operating income   12.8 77.0 17.0 37.4 20.4 197.3 20.9 20.3

Materials and services   263.5 287.7 294.8 277.9 279.0 307.3 300.7 320.4

Employee benefit expenses 164.0 168.5 158.3 185.6 169.1 172.3 151.9 175.3

Other operating expenses   128.4 147.2 153.4 157.3 128.9 132.4 124.2 168.7

Share of results in associated -0.1 -1.1
companies

Depreciation, amortisation and 39.8 41.9 147.9 90.1 40.8 39.6 70.7 45.9
impairment losses

OPERATING PROFIT 27.3 121.3 -17.6 51.9 40.4 261.0 63.9 27.4

Share of results in associated 1.9 -0.1 -3.2 -2.2 -2.4 1.7 0.8 -24.0
companies

Financial income 2.2 1.3 1.0 9.3 2.2 2.5 4.0 2.4

Financial expenses 4.7 6.6 13.1 24.6 6.0 6.2 5.0 6.6

RESULT BEFORE TAXES 26.7 115.8 -32.9 34.4 34.1 259.0 63.7 -0.8

Income taxes -8.2 -18.3 -21.5 -10.0 -10.0 -23.8 -24.6 -0.2

RESULT FOR THE PERIOD 18.5 97.5 -54.4 24.4 24.1 235.1 39.1 -1.0



Result attributable to:

Equity holders of the Parent 18.5 97.5 -49.7 18.1 25.9 235.4 39.2 -0.9
Company

Non-controlling interests 0.0 -0.1 -4.6 6.2 -1.8 -0.2 -0.1 -0.1



Earnings per share for result attributable

to the equity holders of the Parent company:

Earnings per share, EUR 0.11 0.60 -0.31 0.11 0.16 1.45 0.24 -0.01

Diluted earnings per share, 0.11 0.60 -0.31 0.11 0.16 1.45 0.24 -0.01
EUR


INCOME STATEMENT BY QUARTER

EUR million 1-12/ 1-12/

              2011 2010



NET SALES 2,746.2 2,761.2

Other operating income   144.3 258.8

Materials and services   1,123.9 1,207.4

Employee benefit expenses 676.5 668.6

Other operating expenses   586.2 554.2

Share of results in associated companies -1.2

Depreciation, amortisation and impairment losses 319.7 197.1

OPERATING PROFIT 182.9 392.7

Share of results in associated companies -3.7 -23.9

Financial income 13.9 11.1

Financial expenses 49.1 23.8

RESULT BEFORE TAXES 144.1 356.0

Income taxes -58.1 -58.6

RESULT FOR THE PERIOD 86.0 297.3



Result attributable to:

Equity holders of the Parent Company 84.5 299.6

Non-controlling interests 1.5 -2.3



Earnings per share for result attributable

to the equity holders of the Parent company:

Earnings per share, EUR 0.52 1.85

Diluted earnings per share, EUR 0.52 1.85




CONSOLIDATED CASH FLOW STATEMENT 1-12/ 1-12/

EUR million 2011 2010

OPERATIONS

Result for the period 86.0 297.3

Adjustments

  Income taxes 58.1 58.6

  Financial expenses 49.1 23.8

  Financial income -13.9 -11.1

  Share of results in associated companies 4.9 23.9

  Depreciation, amortisation and impairment losses 319.7 197.1

  Gains/losses on sales of non-current assets -56.8 -195.2

  Other adjustments -116.9 -55.1

Change in working capital

  Change in trade and other receivables 0.8 -41.1

  Change in inventories 0.4 9.5

  Change in trade and other payables, and provisions 49.0 36.8

Interest paid -23.6 -13.7

Other financial items -17.4 -3.2

Taxes paid -65.5 -53.9

CASH FLOW FROM OPERATIONS 273.8 273.8



INVESTMENTS

Acquisition of tangible and intangible assets -70.8 -81.8

Operations acquired -1,350.2 -49.5

Sales of tangible and intangible assets 14.0 17.8

Operations sold 74.0 30.8

Loans granted -8.7 -0.8

Repayments of loan receivables 246.3 3.5

Sales of short-term investments 0.0 0.2

Interest received 3.2 2.7

Dividends received 14.9 3.9

CASH FLOW FROM INVESTMENTS -1,077.4 -73.1



CASH FLOW BEFORE FINANCING -803.6 200.8



FINANCING

Proceeds from share subscriptions 0.0 14.5

Minority capital investment/repayment of equity 264.0 1.6

Change in loans with short maturity -183.5 4.2

Drawings of other loans 1,042.7 287.7

Repayments of other loans -84.5 -355.8

Payment of finance lease liabilities -2.0 -3.7

Dividends paid -179.7 -131.3

Donations/other profit sharing 0.0 -0.5

CASH FLOW FROM FINANCING 857.1 -183.3



CHANGE IN CASH AND CASH EQUIVALENTS

ACCORDING TO CASH FLOW STATEMENT 53.6 17.5

Effect of exchange rate differences on cash and cash equivalents -1.1 2.1

NET CHANGE IN CASH AND CASH EQUIVALENTS 52.4 19.5



Cash and cash equivalents at the beginning of the period 41.1 21.6

Cash and cash equivalents at the end of the period 93.5 41.1




Cash and cash equivalents in cash flow statement include cash and cash
equivalents less bank overdrafts.

NET SALES BY BUSINESS UNIT

EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/

  2011 2011 2011 2011 2010 2010 2010 2010



MEDIA

The Netherlands 105.3 130.6 174.0 232.2 107.4 128.0 118.8 136.1

Finland 74.2 79.4 70.0 86.2 92.6 91.7 67.5 87.4

Russia & CEE 51.4 54.3 50.8 56.7 48.7 54.3 51.0 60.9

Belgium 50.1 48.7 48.4 61.9 53.5 52.3 48.7 53.8

Other businesses and 10.2 10.7 12.3 8.6 9.9 13.0 11.5 12.4
eliminations

TOTAL 291.1 323.7 355.5 445.6 312.1 339.4 297.5 350.6



NEWS

Helsingin Sanomat 61.2 61.2 55.3 60.8 59.1 56.7 55.5 64.1

Ilta-Sanomat 19.1 22.2 21.6 21.6 19.9 20.7 21.1 21.6

Other publishing 23.7 25.0 22.9 25.4 25.3 25.6 23.5 25.0

Other businesses and 4.4 3.9 3.4 4.2 5.0 5.5 4.6 4.2
eliminations

TOTAL 108.4 112.2 103.2 112.0 109.4 108.5 104.8 114.9



LEARNING

Learning 34.3 87.4 100.2 34.7 29.9 85.0 100.6 33.7

Language services 8.7 8.1 7.2 8.4 6.9 6.2 5.2 8.9

Literature and other 20.1 15.1 13.9 10.4 23.6 17.2 18.0 24.8
businesses

Eliminations -2.4 -2.1 -0.1 -0.8 -2.3 -2.9 -2.5 -2.2

TOTAL 60.7 108.6 121.2 52.7 58.2 105.5 121.2 65.1



TRADE

Kiosk operations 85.3 102.3 97.6 94.0 91.9 104.9 99.2 102.4

Trade services 32.4 31.1 29.6 28.6 30.3 33.8 32.7 34.5

Bookstores 24.8 18.8 29.7 3.7 26.0 19.9 31.6 43.2

Movie operations 21.9 6.5 0.0 0.0 25.4 19.9 20.7 23.9

Eliminations -2.6 -2.4 -2.3 -1.8 -3.4 -4.0 -3.1 -3.5

TOTAL 161.8 156.3 154.5 124.5 170.2 174.4 181.1 200.5



Other companies and -11.7 -11.0 -13.5 -9.3 -12.0 -12.5 -14.1 -13.8
eliminations

TOTAL 610.2 689.7 720.9 725.4 637.9 715.4 690.6 717.3




NET SALES BY BUSINESS UNIT

EUR million 1-12/ 1-12/

              2011 2010



MEDIA

The Netherlands 642.0 490.4

Finland 309.7 339.3

Russia & CEE 213.1 214.9

Belgium 209.1 208.3

Other businesses and eliminations 41.8 46.7

TOTAL             1,415.8 1,299.6



NEWS

Helsingin Sanomat 238.5 235.4

Ilta-Sanomat 84.4 83.3

Other publishing 97.0 99.5

Other businesses and eliminations 15.9 19.4

TOTAL             435.8 437.6



LEARNING

Learning 256.6 249.3

Language services 32.4 27.1

Literature and other businesses 59.5 83.6

Eliminations -5.4 -9.9

TOTAL             343.1 350.1



TRADE

Kiosk operations 379.2 398.4

Trade services 121.7 131.3

Bookstores 77.0 120.6

Movie operations 28.4 90.0

Eliminations -9.2 -14.0

TOTAL             597.0 726.3



Other companies and eliminations -45.6 -52.4

TOTAL             2,746.2 2,761.2




OPERATING PROFIT BY SEGMENT

EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/

  2011 2011 2011 2011 2010 2010 2010 2010



Media 22.7 47.0 -31.0 53.2 31.2 229.3 -4.2 31.6

News 12.9 9.9 12.5 4.9 15.6 8.9 15.7 15.9

Learning -5.2 27.3 17.3 -22.7 -6.4 25.1 45.5 -17.2

Trade 3.3 44.4 -8.4 9.9 3.7 2.4 6.4 3.0

Other companies and eliminations -6.5 -7.4 -7.9 6.7 -3.7 -4.7 0.5 -6.1

TOTAL 27.3 121.3 -17.6 51.9 40.4 261.0 63.9 27.4



OPERATING PROFIT BY SEGMENT

EUR million             1-12/ 1-12/

              2011 2010



Media             92.0 287.9

News             40.2 56.1

Learning             16.6 47.1

Trade             49.2 15.5

Other companies and eliminations -15.1 -13.9

TOTAL             182.9 392.7



OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS BY SEGMENT

EUR million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/

  2011 2011 2011 2011 2010 2010 2010 2010



Media 22.7 37.9 25.8 64.6 31.2 47.3 31.0 36.3

News 12.9 9.9 12.5 14.1 9.6 8.9 15.7 13.0

Learning -6.1 29.0 42.4 -19.7 -5.2 26.4 45.7 -14.4

Trade 3.3 4.1 6.8 4.6 3.7 2.4 7.4 5.6

Other companies and eliminations -6.5 -8.4 -7.9 -2.9 -3.7 -4.7 -4.9 -6.1

TOTAL 26.4 72.6 79.5 60.6 35.6 80.3 94.9 34.5



OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS BY SEGMENT

EUR million 1-12/ 1-12/

              2011 2010



Media             151.1 145.8

News             49.4 47.2

Learning             45.5 52.6

Trade             18.8 19.1

Other companies and eliminations -25.7 -19.3

TOTAL             239.1 245.4



SEGMENT INFORMATION

Sanoma Group has four reportable segments: Media, News, Learning and Trade. The
segmentation is based on business model and product differences. Media,
operating in 12 countries, is responsible for magazines and TV operations.
Sanoma News is responsible for newspapers in Finland. Both segments also have a
great variety of online and mobile services. Learning's business is mainly B2B
business. Trade, on the other hand, operates on a retail business model. In
addition to the Group eliminations column unallocated/eliminations includes
Group functions and real estate companies as well as items not allocated to
segments.

Segment assets do not include cash and cash equivalents, interest-bearing
receivables and tax receivables. Transactions between segments are based on
market prices.

Sanoma segments 1.1-31.12.2011 Unallo-

          cated/ Con-

      Lear-   elimi- soli-

EUR million Media News ning Trade nations dated

External net sales 1,412.1 434.1 331.9 567.8 0.3 2,746.2

Internal net sales 3.7 1.7 11.2 29.3 -45.8

NET SALES, TOTAL 1,415.8 435.8 343.1 597.0 -45.6 2,746.2

OPERATING PROFIT 92.0 40.2 16.6 49.2 -15.1 182.9

Share of results in

associated companies -2.5 0.6 0.1 -1.9   -3.7

Financial income         13.9 13.9

Financial expenses       49.1 49.1

RESULT BEFORE TAXES         144.1



SEGMENT ASSETS 3,048.7 320.7 549.0 186.9 47.2 4,152.5



Sanoma segments 1.1-31.12.2010 Unallo-

          cated/ Con-

      Lear-   elimi- soli-

EUR million Media News ning Trade nations dated

External net sales 1,294.6 431.7 334.8 700.5 -0.5 2,761.2

Internal net sales 5.0 5.9 15.2 25.7 -51.9

NET SALES, TOTAL 1,299.6 437.6 350.1 726.3 -52.4 2,761.2

OPERATING PROFIT 287.9 56.1 47.1 15.5 -13.9 392.7

Share of results in

associated companies -24.5 0.3 0.0 0.3   -23.9

Financial income         11.1 11.1

Financial expenses       23.8 23.8

RESULT BEFORE TAXES         356.0



SEGMENT ASSETS 1,826.8 324.9 551.8 344.8 34.6 3,082.8



CHANGES IN PROPERTY, PLANT AND EQUIPMENT

EUR million 31.12.2011 31.12.2010



Carrying amount at the beginning of the period 429.3 484.2

Increases 52.9 50.7

Acquisition of operations 7.0 0.4

Decreases -2.2 -5.4

Disposal of operations -86.9 -31.8

Depreciation for the period -50.5 -61.8

Impairment losses for the period -3.9 -1.0

Exchange rate differences and other changes -2.1 -6.1

Carrying amount at the end of the period 343.6 429.3




The Group had no commitments for acquisition of tangible assets at the end of
the reporting period (2010: EUR 4.0 million).

EFFECT OF ACQUISITIONS ON THE CONSOLIDATED BALANCE SHEET

EUR million 1-12/ 1-12/

  2011 2010



Acquisition costs 1,415.2 37.1

Fair value of acquired net assets 433.2 14.5

Recognised in equity   -18.7

Recognised in income statement   -0.5

Goodwill 982.0 3.5







CONTINGENT LIABILITIES

EUR million 31.12.2011 31.12.2010

Contingencies for own commitments

Mortgages 9.7 20.6

Pledges 2.5 6.7

Other items 0.3 0.6

TOTAL 12.5 27.8



Contingencies incurred on behalf of associated companies

Guarantees   10.5

TOTAL   10.5



Contingencies incurred on behalf of other companies

Guarantees   0.0

TOTAL   0.0



Other contingencies

Operating lease liabilities 196.1 249.1

Royalties 19.8 23.5

Other items 51.3 26.9

TOTAL 267.2 299.5



TOTAL 279.7 337.8





DERIVATIVE INSTRUMENTS

EUR million



Fair values 31.12.2011 31.12.2010



Interest rate derivatives

Interest rate swaps -11.5 0.1



Currency derivatives

Forward contracts 0.6




KEY EXCHANGE RATES

  1-12/ 1-12/

Average rate 2011 2010

EUR/CZK (Czech Koruna) 24.64 25.36

EUR/HUF (Hungarian Forint) 280.46 276.04

EUR/PLN (Polish Zloty) 4.13 4.01

EUR/RUB (Russian Rouble) 41.02 40.45

EUR/SEK (Swedish Crown) 9.00 9.55



Closing rate 31.12.2011 31.12.2010

EUR/CZK (Czech Koruna) 25.79 25.06

EUR/HUF (Hungarian Forint) 314.58 277.95

EUR/PLN (Polish Zloty) 4.46 3.98

EUR/RUB (Russian Rouble) 41.77 40.82

EUR/SEK (Swedish Crown) 8.91 8.97



Press Conference

Press and analyst meeting will be held in English by President and CEO Harri-
Pekka Kaukonen and CFO Kim Ignatius at 11 am Finnish time at Nelonen studio,
Pursimiehenkatu 26 C (third floor), Helsinki. Webcast of the event can be viewed
at Sanoma.com either live or later on as on demand. If you want to ask questions
during the webcast, please join the conference call by dialling +44 (0)20
7162 0025 (Europe) or +1 334 323 6201 (US) and quote the conference code 911215.

Sanoma's 1Q12 Interim Report will be published on Thursday, 3 May, at
approximately 11 am Finnish time (CET -1)

Sanoma Corporation

Kim Ignatius
Chief Financial Officer

Additional information: Sanoma's Investor Relations, Martti Yrjö-Koskinen, tel.
+358 105 19 5064 or ir@sanoma.com

Sanoma.com

Sanoma inspires, informs and connects. As a diversified media group, we bring
information, experiences, education and entertainment to millions of people
every day. We make sure that quality content and interesting products and
services are easily available and meet the demands of our readers, viewers and
listeners. We offer a challenging and interesting working environment for nearly
15,000 people in over 20 countries throughout Europe. In 2011, the Group's net
sales totalled EUR 2.7 billion.




Sanoma Financial Statement Release 2011:
http://hugin.info/3123/R/1583172/494863.pdf




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Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: Sanoma Oyj via Thomson Reuters ONE

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