Translation: Original published in Finnish on 10/30/2025 at 09:20 am EET

Source: Inderes & Modular Finance (consensus, 7 estimates)

Sanoma published its Q3 earnings report this morning, which was operationally slightly better than expected due to Media Finland's very good margin development. Sanoma also, quite as expected, specified its guidance ranges for this year and raised the lower end of the range exactly in line with our expectations. Overall, the initial impression of the report is quite positive, so we expect the stock to outperform the general market today. You can follow the company's earnings call starting at noon EET  here.

Revenue decreased as expected in both businesses

Sanoma’s revenue fell by 4% in Q3 to 516 MEUR, which was below our and consensus estimates. Also at the segment level, revenue development was precisely in line with our estimates. Learning’s revenue decreased by 5% year-on-year, which quite expectedly reflected the termination of unprofitable distribution agreements in the Netherlands and the timing of curriculum reforms in Poland. At the same time, Media Finland's revenue decreased by 4%, which was particularly due to a significant decrease in advertising sales (-10%). This is due to the termination of certain advertising resale agreements, although newspaper advertising has also presumably declined in line with market developments. Of other income sources, subscription income continued to grow surprisingly strongly (+4%)

Media Finland improved its profitability

Sanoma's operational EBIT (excluding PPA amortizations) in Q3 was 172 MEUR, which exceeded our and consensus estimates by a small margin. Our estimate was exceeded due to Media Finland, which, contrary to our expectations, succeeded in significantly improving its margin. According to Sanoma, in addition to the sales mix, this was affected by lower print media costs and TV programming costs, which were partly due to timing. Learning also improved its margin from the comparison period as expected, which was due to the contraction of low-margin sales and lower paper and printing costs.

Despite good operational earnings development, the reported bottom line was clearly below our estimates, which was due to 74 MEUR in impairments. These were caused by the decision not to participate in distribution tenders in Learning and the planned closure of the Tampere printing plant. However, operational earnings per share settled at EUR 0.73, in line with our estimate.

The lower end of the earnings guidance range was raised as expected

In the Q3 report, Sanoma specified its guidance, and now it expects reported revenue to be 1.29-1.31 BNEUR (2024: 1.34) and operational EBT excluding PPA amortization to be 180-190 MEUR (2024: 180 MEUR). The previous revenue range was 1.28–1.33 BNEUR and the operational EBIT (excl. acquisition cost amortizations) range was 170-190 MEUR. The underlying assumptions for the outlook of stable demand for learning materials and relatively stable development of the Finnish advertising market were also reiterated.

Prior to the Q3 report, the consensus expected revenue of 1,314 MEUR and adjusted EBIT of 186 MEUR before acquisition-related amortization for the current year. Our corresponding revenue estimate was 1,315 MEUR, while our EBIT estimate was 186 MEUR. Thus, at the revenue level, the refined guidance may cause some downward pressure, but the refined earnings guidance was exactly in line with our expectations. According to our preliminary assessment, there is very slight upward pressure on our earnings estimate.

Confidence in Learning's profitability target

The company also commented in the earnings release that the decision not to participate in multi-year distribution tenders in the Netherlands will improve Learning's EBIT margin excluding PPA amortizations to clearly over 23% in 2026. Over 23% has been the company's target for 2026, which was supposed to be achieved especially through the operational efficiency brought by the Solar program, as the company gains growth in a better market. Our profitability estimates for next year and the coming years have been slightly below the targeted level in Learning, so these profitability estimates are also subject to revision pressure based on our preliminary assessment. It should, however, be noted that the termination of distribution agreements also impacts the revenue line negatively.