We have just published our quarterly results, and for the first time in years our story isn’t about growth. In the first three months of 2009, our net sales have decreased by 8.3%.

This number hides a lot of diversity across our countries. In Finland and the Netherlands sales have decreased only marginally. In Belgium especially our ad sales are suffering. And in most Central and Eastern European countries we have been severely hit by extremely challenging market circumstances. This situation is worsened a lot by unfavourable currency exchange rates. The net sales of Sanoma Magazines International decreased by as much as 27.4%.

A main contributing factor in the decrease of our net sales is of course the general economic environment. Advertisers are very hesitant to continue doing business as usual, and we have to deal with the consequences. This also means that our operating profit is decreasing even stronger than our sales, because advertising has a higher return on investment than circulation revenue. Our operating profit excluding non-recurring items went down by as much as 37.1%.

Of course we do not sit by idly, waiting until the economic storm has passed us by. Sanoma Magazines has initiated several cost saving programmes. I am sure you are aware of this, because these measures have affected us all. We have closed more than thirty loss-making titles, because they showed no short term turn-around potential. And we will continue to scrutinise our expenses and look for structural cost savings. Sanoma Magazines needs to become a more efficient company to remain as healthy as we are now.

Unfortunately there is no quick fix to this recession, and anyone looking to our headquarters to wait for marching orders is waiting in vain. The world’s economies need to enter calmer waters, trust between actors needs to be re-established, and we need to continue to build our company towards greater prosperity. Following our current strategy for both Magazines+ and Digital Media. By developing innovative, creative media that inform and inspire consumers, and connect consumers with each other and advertisers.

One thing is sure; we will continue to make Sanoma Magazines an even more successful company. But from a different starting-point. The net sales we are losing during the crisis period will only be recouped very gradually. It probably takes years until we are back at the level of 2008. We will have to see if the economies in Central and Eastern Europe can return to being growth engines again. We had planned on a prosperous future – we now have to face facts and realise that it was in part based on a hot air balloon created by unsustainable general economic circumstances.

Is there no good news? Luckily there is. Because we should never forget that Sanoma Magazines is a great company. With great brands that are in an excellent shape, with leading market positions in almost all our markets, with a wonderful, creative and very entrepreneurial staff who go for opportunities.

The state of Sanoma Magazines at the end of the crisis is determined by how we act and what we do with our great assets during the crisis. There is no doubt in my mind that we will not only overcome this difficult period, but that in the end we will be one of the winners.

Just look at the performance of many of our major women’s weeklies for instance. In Finland we have gained ground by growing in newsstand sales whereas the competition has declined. In the Netherlands advertisers are turning to our major weeklies, because they rely on the quality of our magazines to reach consumers. And our online advertising income continues to grow, even in this difficult period.

Together we can make sure that Sanoma Magazines will be amongst the winning companies at the end of these turbulent times. I trust that you will work with me to ensure that our company will remain in the best possible shape.

Eija Ailasmaa