Sanoma Capital Markets Day: Learning as a source of growth

Translation: Original published in Finnish on 11/26/2025 at 8:00 am EET.

Sanoma held a Capital Markets Day (CMD) on Tuesday. In the presentations, the company provided more detailed background on its updated financial targets and presented a cross-section of its businesses. A recording of the CMD can be viewed here. Our key observations from the Capital Markets Day are:

The Learning market is expected to grow from next year onwards

At the Group level, the engine of organic growth is, quite expectedly, Learning. The segment's growth is supported by curriculum reforms in the company's key markets, particularly in Poland and Spain (especially in 2026–2027). Overall, the Learning materials market is also expected to be on a growth trajectory until the end of this decade (see graphic quoted from the CMD material below). In addition, the segment seeks growth by, among other things, shaping the development of primary and secondary education towards differentiated, more individualized learning, also utilizing artificial intelligence. Naturally, different geographical markets are expected to grow at different times due to curriculum reforms, but we also estimate that the development stage of different markets (e.g. the share of digital services) affects the growth rate of different services in different markets (cf. the K12 learning material market sizes presented by the company: Spain 700 MEUR, Netherlands 450 MEUR, Poland 180 MEUR). Regarding Learning's growth, the toolbox also includes strategic acquisitions, as before.

Source: Sanoma CMD 2025

The opening of the Finnish gambling market is expected to increase the advertising market from 2027 onwards

The company expects the size of the Media Finland market to grow from 2027 onwards due to the opening of the Finnish gambling market and the related increase in advertising. The company estimates this will generate an advertising market of approximately 150 MEUR in the first years, as operators invest in growing their market position. Sanoma estimates that around one-half of this market will be directed domestically. In the long term, the company estimates that the total advertising market related to this will stabilize at around 80-100 MEUR per year. In the initial phase, the company expected the opening of the Finnish gambling market to increase Media Finland's advertising sales by over 20 MEUR per year. Instead, Media Finland's growth is expected to be stable in other respects due to the structural change in media (i.e. digital media replacing print media).

The company aims for high single-digit organic earnings growth

The company also updated its financial targets ahead of the CMD, which we commented on recently here. Sanoma expects the accelerated growth prospects of both Learning and Media Finland to lead to high single-digit organic adjusted EBIT growth for the Group between 2026 and 2030. Correspondingly, the updated segment-level targets, where growth is measured annually by a three-year compound annual growth rate (CAGR), are:

• Learning growth: mid-single-digit comparable revenue growth (previously 2-5%).
• Learning earnings growth: high single-digit adjusted EBIT growth (previously over 23% operational EBIT margin excluding PPA amortizations).
• In Media Finland, stable comparable revenue development (previously +/-2%).
• In Media Finland, low single-digit adjusted EBIT growth (previously 12-14% operational EBIT margin excluding PPA amortization).

Regarding the targets, it should be noted that the company changed the wording of certain key figures (see the company's release for more details) and, for example, adjusted EBIT will replace operating EBIT before amortization of acquisition costs (definition unchanged). In addition to the financial targets, the company also highlighted that it still expects  Learning's Dutch distribution sales to be approximately 40 MEUR lower in 2026, which will raise the segment's adjusted EBIT margin well above 23% in 2026, along with the full benefits of the Solar efficiency program. As stated above, the company estimates that Media Finland's revenue (over 20 MEUR) and earnings will grow significantly with the opening of the gambling market starting in 2027.

However, regarding Media Finland's targets, it is worth noting that based on the message received from the CMD, the impact of the opening of the gambling market is not included in Media Finland's targets. Thus, Media Finland's targets should practically be interpreted as targets without the impact of the opening of the gambling market. In our view, the impact of the gambling market is, however, reflected in the high single-digit target for the Group's organic adjusted EBIT. Reflecting this, we find the target setting to be somewhat inconsistent. However, according to the company, the updated targets better reflect how it sees growth. For Learning, this is reflected in the company seeing opportunities to increase its margins, partly due to AI enhancing processes. In addition, this reflects how the company views the impact of acquisitions (organic targets) and what measures it can take for acquired targets (i.e, not just the margin level of the acquired target). In turn, for Media Finland, this more transparently reflects, according to the company, the underlying digital transformation and the effects of the gambling market.

The main message regarding the targets, in our opinion, was that Learning's organic growth and earnings growth prospects are quite good until the end of the decade. Correspondingly, for Media Finland, the stabilization and slight growth of the Finnish advertising market, together with operational efficiency improvements (e.g. AI), are expected to drive moderate growth in operating profit, while gambling marketing is predicted to have a significantly more robust impact on the segment's earnings growth prospects in the medium term.

In our current forecasts, we had expected the Group's adjusted EBIT to grow by approximately 7% annually from 2025 to 2028, which is quite well in line with the company's target level. However, we will review our forecasts and their underlying assumptions (incl. updated reporting) in the near future.

Capital allocation guidelines unchanged

In connection with the updates to its financial targets, the company also commented that its capital allocation priorities will remain unchanged, so that a growing dividend, solid headroom for acquisitions, and continuous strengthening of the balance sheet are in balance. Regarding M&A, the company commented that the Learning market is still fragmented and Sanoma is interested in consolidating the market, through which growth and profit could be accelerated. The company currently estimates the size of the Learning market in Europe to be around 5 BEUR, with Sanoma's market share being roughly 17% depending on the calculation method, which could also be increased through acquisitions. In the short term, the company commented that its M&A capacity is a good 300 MEUR, but also that it is not in a hurry to make inorganic moves. The company commented that the main focus of acquisitions is still the European K12 market, but it did not comment on possible more specific geographical expansion.

In connection with updating its financial targets, the company also lowered its target for the net debt to adjusted EBITDA ratio to below 2.5x from the previous below 3.0x, which in our view somewhat limits M&A capacity. However, the company commented that the target level may be temporarily exceeded in connection with potential acquisitions. Naturally, as the company's free cash flow strengthens, the conditions for acquisitions and their scale improve each year.

The dividend policy remained unchanged as expected, and the company aims for a growing dividend of 40-60% of free cash flow. However, Sanoma updated its definition of free cash flow starting in 2026 to include lease liability payments (current level approximately 30 MEUR/year). However, the change is largely technical and does not affect the proposal itself, but is reflected in a higher dividend payout ratio.