Amsterdam, 11 February 2010 - Despite net sales and operating profit decreases, Sanoma Magazines (part of media group Sanoma - listed on the NASDAQ OMX Helsinki, SAA1V) has outperformed market developments in its key markets in 2009. Fourth quarter EBIT excluding non-recurring items was even 6.4% above the comparable period's level, notwithstanding the strong impact of decreasing advertising sales on the full-year result.

Net Sales Development

Sanoma Magazines’ net sales in 2009 amounted to €1,111.2 (1,246.8) million, 10.9% less than in the comparable year. The general economic situation affected sales in all operating countries with Sanoma Magazines International’s net sales being impacted the most. The Division’s net sales adjusted for changes in the Group structure were down by 11.3%, with advertising sales in the Netherlands, Belgium and Finland showing slight improvement during the last months of the year.

The Division’s advertising sales decreased by 23% in 2009 and represented 29% (33%) of net sales. The economic downturn hit advertising revenues in all markets, in particular Sanoma Magazines International’s advertising sales. The Division’s online advertising sales were at the comparable year’s level. Sanoma Magazines’ circulation sales decreased by 3% and represented 60% (55%) of the Division’s net sales. Subscription sales increased slightly in 2009 due to good development in the Netherlands, Belgium and Finland. Single copy sales declined, mostly in the CEE countries.

Sanoma Magazines Netherlands’ net sales amounted to €493.2 (515.7) million, due to weaker print advertising sales than in 2008. With its strong brands Sanoma Magazines Netherlands was able to outperform the market development both in print and online advertising and increase its market share. New assets contributed to Sanoma Magazines Netherlands’ online advertising growth of 6%. Sanoma Magazines Netherlands also improved its market position in the readers’ market. Its circulation revenues were at the comparable period’s level, even though some titles were discontinued during the year. Subscription sales in particular developed positively with increased sales of core brands offsetting the changes in the portfolio. During the year, Sanoma Magazines Netherlands closed down or sold 11 magazines, and launched two magazines as well as nine online services.

Net sales at Sanoma Magazines Belgium totalled €212.3 (223.2) million. In the readers’ market, Sanoma Magazines Belgium outperformed the market development. Its circulation sales grew slightly due to increased subscription sales. In line with the market development, advertising sales were below the comparable period. During the year, Sanoma Magazines Belgium renewed its strategy and started to redesign its organisation to better use the opportunities of the changing media environment.

Sanoma Magazines International’s net sales were EUR 211.3 (306.7) million. The economic downturn affected sales strongly in all countries. The reported net sales were also substantially impacted by negative translation effects, especially of the Russian rouble and Hungarian forint. Advertising sales decreased especially in Russia, Hungary and Ukraine. Sanoma Magazines International reacted quickly to changing market conditions at the beginning of the year and discontinued 21 unprofitable magazine titles, which also lowered advertising sales, in particular in the Czech Republic. Circulation sales were clearly below the comparable period. This is also partly attributable to the reduced number of magazines published and, in some cases, the number of issues. The publication frequency of various titles has been adjusted in order to save costs. Sanoma Magazines International launched one magazine in 2009 and strengthened its leading position in the Hungarian online market through the acquisition of the comparison site Olcsobbat.hu. Sanoma Magazines International also improved its market share in Romania and is now the leading magazine publisher in the country.

Sanoma Magazines Finland’s net sales amounted to €198.8 (205.6) million. Circulation sales in Finland held up well but advertising sales were down from the comparable period. Sanoma Magazines Finland outperformed the market development both in advertising and the readers’ market and has increased its market shares. In particular the key titles, such as the women’s weekly Me Naiset and the glossy Gloria together with its brand extensions increased their readership.

Investments

Sanoma Magazines’ investments in tangible and intangible assets totalled €24.4 (26.8) million and consisted mainly of ICT investments. The most significant acquisition in 2009 was that of Hungarian SELKO kft, which operates the comparison site Olcsobbat.hu. In the comparable year, the major acquisitions were the majority shareholding in magazine publisher Mood for Magazines and the acquisitions of Netinfo and European Autotrader.

Operating Profit

Sanoma Magazines’ operating profit excluding non-recurring items in 2009 was €113.4 (138.9) million, a decrease of 18.4% from the comparable year. Decreasing advertising sales affected results in all businesses, in particular in Sanoma Magazines International and also in Sanoma Magazines Netherlands. Operating profit improved slightly in Finland. Non-recurring items totalled €-17.1 (-53.2) million and were related to restructuring in Sanoma Magazines Belgium and the direct marketing organisation in the Netherlands. In the comparable year, the non-recurring items consisted of a recognition of impairment and write-offs totalling €83.7 million and capital gains of €30.5 million related to the divestments of R.C.V. Entertainment and some online assets. Operating profit in 2009 amounted to €96.3 (85.7) million. The Division initiated several programmes to improve the profitability of its business units and in October - December, Sanoma Magazines improved its operating profit excluding non-recurring items by 6.4% to EUR 38.4 (36.1) million.

Outlook

Sanoma Magazines continues to develop its magazine portfolio with a special focus on its key titles in each operating country. Sanoma Magazines is investing in strengthening its market positions, and wants to become stronger in digital media. The growth in digital operations can be done by leveraging existing assets and will be speeded up by organisational changes made in 2009. At the same time Sanoma Magazines continues to strongly focus on improving efficiency and saving costs. In 2010, Sanoma Magazines’ net sales are expected to grow slightly and it is estimated that operating profit excluding non-recurring items will be at the previous year’s level.