Annual Report 2008

sanoma corporation

Sanoma Corporation President and CEO Hannu Syrjänen Ludviginkatu 6–8 P.O. Box 1229, 00101 Helsinki, Finland Tel. +358 105 1999, fax +358 105 19 5068 Sanoma.com

Group Strategic Development, CSO Sven Heistermann annual Group Finance and Administration, CFO Kim Ignatius Group Treasury, Real Estate and Risk Management, Senior Vice President Nils Ittonen report Group Legal Aﬀ airs, CLO Merja Karhapää Group Human Resources, CHRO Ben Tiesnitch 2008 Group Communications Tel. +358 105 19 5062, fax +358 105 19 5068 [email protected] a Sanoma company

office of the chairman Chairman Jaakko Rauramo Erottajankatu 11 A P.O. Box 1229, 00101 Helsinki, Finland Tel. +358 105 1999, fax +358 105 19 5508

Sanoma Magazines B.V. President and CEO Eija Ailasmaa Jachthavenweg 124, 1081 KJ Amsterdam

2008 a Sanoma company P.O. Box 90484, 1006 BL Amsterdam The Netherlands Tel. +31 20 851 2100, fax +31 20 851 2149 report Sanomamagazines.com Sanoma Learning and Literature B.V. CEO Jacques Eijkens Sanoma News Ltd Statenlaan 1 annual President Mikael Pentikäinen P.O. Box 99, 5201 AB ‘s-Hertogenbosch TAUKOAUAUKUKOOPELITP T Töölönlahdenkatu 2 The Netherlands PL 95, 00089 Sanoma, Finland Tel. +31 73 628 7528 Tel. +358 9 1221, fax +358 9 122 4809 Sanoma-ll.com Sanomanews.com Rautakirja Ltd (Sanoma Trade) Sanoma Entertainment Ltd President and CEO Timo Mänty President Anu Nissinen Koivuvaarankuja 2

Ludviginkatu 6–8 P.O. Box 1, 01641 Vantaa, Finland corporation P.O. Box 1019, 00101 Helsinki, Finland Tel. +358 9 852 81, fax +358 9 853 3281 Tel. +358 10 707 1111, fax +358 10 707 7008 Rautakirja.ﬁ

Sanomaentertainment.com Sanomatrade.com sanoma sanoma corporation, p.o. box 1229, 00101 helsinki, finland. tel. +358 105 1999, sanoma.com Annual report 2008

I20900519_Sanoma KANNET.indd 3 3.3.2009 09:34:01 Divisions’ management groups (as of 31 january 2009) contents 4 Key ﬁ gures and organisation

6 Management review

8 Market development

10 Mission, vision, values and objectives

12 Sanoma’s change Sanoma Magazines Sanoma Entertainment Management Board 14 Key events and operating countries Anu Nissinen (Chairman), born 1963 Eija Ailasmaa (Chairman), President 16 Divisions born 1950 Johan Flykt, born 1965 Sanoma Magazines, p. 18 President and CEO President, Welho Sanoma News, p. 22 Koos Guis, born 1947 Hans Edin, born 1959 Sanoma Entertainment, p. 26 CEO, Sanoma Magazines International President, Nelonen Media Dick Molman, born 1954 Pia Huhdanmäki, born 1969 Sanoma Learning & Literature, p. 30 CEO, Sanoma Uitgevers Senior Vice President, Administration Sanoma Trade, p. 34 Raili Mäkinen, born 1944 Ari Kurenmaa, born 1967 CEO, Sanoma Magazines Finland Senior Vice President, Finance 38 Corporate responsibility Walter van der Schaaff, born 1958 Jyri Ratia, born 1972 Personnel, p. 40 CFO Senior Vice President, Environment, p. 44 Aimé Van Hecke, born 1960 Business Development CEO, Sanoma Magazines Belgium 46 Board of Directors Sanoma Learning & Literature 48 Executive Management Group Sanoma News Jacques Eijkens (Chairman), born 1956 50 Other management Mikael Pentikäinen (Chairman), CEO born 1964 Jyri Ahti, born 1962 President CSO Titta Halme, born 1968 Veli-Pekka Elonen, born 1965 President, Sanoma Kaupunkilehdet COO, Publishing Pekka Harju, born 1962 Barend de Graaff, born 1956 President, Ilta-Sanomat CFO Jarmo Koskinen, born 1961 Mark Marseille, born 1963 President, Sanoma Lehtimedia CHRO Liisa Kotilainen, born 1961 Tuomo Räsänen, born 1969 President, Sanoma Digital COO, Language Services Pekka Laakeristo, born 1955 President, Sanoma Data Eija Rinta, born 1955 Sanoma Trade CFO Pekka Soini, born 1957 Timo Mänty (Chairman), born 1960 President, Helsingin Sanomat President and CEO Marja-Leena Tuomola, born 1962 Senior Vice President, Movie Operations Senior Vice President, Business and Hellevi Kekäläinen, born 1953 digital operations development Senior Vice President, CFO sanoma corporation annual report 2008, production: sanoma magazines finland, custom publishing, Ismo Vuoksio, born 1963 Raimo Kurri, born 1953 design: koillinenkaakko/antti kangassalo, printed by: lönnberg print & promo, texts: michael larkin, President, Sanomapaino Senior Vice President, Press Distribution gregory moore, risto pennanen, matti remes, marianna salin, tuija sievänen, tiina tuomainen, anna tuominen, financials Jukka Nikkinen, born 1962 pictures: lk/antti aimo-koivisto, erik buis, györgy gaál, nils van houts, antti kangassalo, susanna kekkonen, 3 key indicators, 4 net sales by business, 5 operating profit by division, 5 income statement by quarter, Senior Vice President, enrico meeuwsen, lk/pekka sakki, sulev sepp, tomasz szwejer, patrick verbeeck 6 board of directors’ report 14 consolidated financial statements, 18 notes to the consolidated financial Business Development statements, 56 definitions of key indicators, 57 shares and shareholders, 64 parent company Jarmo Oksaharju, born 1961 the board of directors’ report, detailed financial statements and associated material financial statements, 70 corporate governance, 74 risk management, 77 investing in sanoma, Senior Vice President, Bookstores are published separately. annual report is available at sanoma.com in pdf format and 78 releases 2008, 79 brokerage houses providing analyses of sanoma Markku Pelkonen, born 1962 the printed version can be ordered from group communications via email Senior Vice President, Kiosk Operations [email protected] or by phone +358 105 19 5062. contents 2

II20900519_Sanoma20900519_Sanoma KANNET.inddKANNET.indd 4 33.3.2009.3.2009 09:34:3409:34:34 Sanoma is a strong European media company. In 2008,

the Group net sales amounted to EUR 3,030 million. Sanoma

offers a challenging and interesting working environment for

over 21,000 people in 20 countries throughout Europe. 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 customers. sanoma in brief 3 Key figures and organisation

Key indicators, EUR million 2008 2007 Change, % Net sales 3 030.1 2 926.3 3.5 Operating profit excluding non-recurring items 295.7 305.2 -3.1 % of net sales 9.8 10.4 Operating profit 236.3 343.8 -31.2 % of net sales 7.8 11.7 Result for the period 120.8 246.1 -50.9 Balance sheet total 3 278.7 3 192.3 2.7 Capital expenditure 109.9 90.5 21.4 Return on equity (ROE), % 9.1 18.6 Return on investment (ROI), % 10.7 15.9 Interest-bearing liabilities 971.6 793.3 22.5 Equity ratio, % 40.0 45.4 Net gearing, % 78.5 58.2 Dividend payout ratio, % * 125.1 67.9 Effective dividend yield, % * 9.8 5.1 P/E ratio 12.8 13.3 -3.9 Market capitalisation, EUR million 1 479.7 3 196.2 -53.7 Average number of employees 21 329 19 587 8.9 Average number of employees (full-time equivalents) 18 168 16 701 8.8

* year 2008 ProPosal of the board of direCtors

sanoma grouP

Chairman jaakko rauramo President and Ceo hannu syrjänen

sanoma sanoma sanoma sanoma sanoma magazines news entertainment learning & literature trade

President and Ceo President President Ceo President and Ceo eija ailasmaa mikael Pentikäinen anu nissinen jaCques eijkens timo mänty

Magazines, online Newspapers, online TV, radio, broadband Learning, language Kiosk operations, press operations operations, printing internet, online services services, literature distribution, bookstores, movie operations ey figures and organisation k ey figures and organisation 4 net salesdistribution earnings/share, eur 2 000 3 000 0.50 2 500 3 500 net sales,eurmillion 0.25 0.75 1 000 1.00 1 500 1.50 1.25 500 0 0 14% 1999, fas 1999, fas retail digital media material andbooks Printed eduCational newsP magazines

37% 2000, fas 2000, fas

11% 2001, fas 2001, fas aPers 2002, fas 2002, fas 2003, fas 2003, fas 2004

11% 2004

27% 2005 2005 2006 2006 2007 2007 2008 0.72 2008 3 030 dividend/share, eur 200 300 0.50 250 350 reCurring items,eurmillion oPerating ProfitexCludingnon- 0.25 0.75 100 1.00 150 1.50 1.25 50 0 0 15%

retail andother eduCational Publishing(inCl.books) distribution sales single CoPysales subsCriPtion sales advertising sales 1999, fas

25% 1999, fas

13% 2000, fas 2000, fas 2001, fas 2001, fas 2002, fas 2002, fas 2003, fas 8% 2003, fas 27% 2004 2004

13% 2005 2005 2006 2006 2007 2007 2008 * 0.90 2008 296 ring items non-reCur- inCluding 1999–2003 direCtors the board of Proosal of * year2008 5 key figures and organisation “All in all, we had a good year in 2008,” Strength equals success says Jaakko Rauramo. The numbers support this view: the Sanoma Group’s operating profit excluding non-recur- Leading market position and competitive ring items nearly matched the level achieved in 2007, a record-breaking products are Sanoma’s greatest assets. year in the Group’s history. According to Chairman of the Board Jaakko Rauramo and President and CEO In 2008, the Sanoma Group acquired the Polish Nowa Era and Swedish Hannu Syrjänen, future growth is key to Interverbum, expanding its educational continued success. publishing business and language services, respectively. In its magazine business the Group continued to actively develop and adjust its product portfolio. Digital products and services made strong progress around Europe.

The global recession hit the media business in the second half of 2008. According to Hannu Syrjänen, predict- ing the near future has never been as difficult as it is now.

“The effects of the slowdown are the same throughout the media business. In Finland, the economic decline ini- tially slowed sales in job and real estate ”The economic downturn also advertising. Generally, newspapers and offers plenty of opportunities. television are quicker to react to economic fluctuations than magazines,” We will see considerable changes Syrjänen explains. in market shares.” Rauramo points out that the wide range of Sanoma’s product offerings softens the blow. Revenue from advertising constitutes only one fourth of the Group’s net sales. anagement review m anagement 6 hannu syrjänen jaakko rauramo

“Most of our revenue comes directly “I doubt that advertising will change “The new name is a strength in inves- from consumers, and this spending is dramatically at the annual level. Busi- tor and customer relations. It also helps not nearly as cyclical as advertising. We nesses simply need to communicate our employees see the Group as one differ from many other media corpo- their products and services in order to and feel that they belong. The impor- rations in that they are clearly more survive.” tance of community spirit can never be dependent on advertising income.” stressed enough.” Of course, strong corporations are not One of Sanoma’s strategic objec- totally immune to economic fluctua- Rauramo believes that a strong brand is tives is to be the market leader in tions. an asset in recruiting new talent. After chosen businesses and markets. This all, the media is a people’s business. is a core strength in both good times “We always adjust our operations to and bad. current business conditions and the “Focusing on media’s growth areas is a foreseeable future. The old adage about primary objective in our strategy, and “Clients seek a safe haven during cutting your coat according to your talent differentiates us from the com- economic declines. They are unwilling cloth still applies. Our long-term goals petition. We need more experts with to try new options and instead seek remain unchanged, but we need to multiple skills in producing content market leaders with proven channels focus more on cost management and for print and online media as well as and techniques. This favours strong structural arrangements,” Rauramo television. We also need to know how to corporations over smaller companies adds. market this content, and both the tech- and inevitably reduces the competi- nical platforms and distribution chan- tion,” Rauramo says. Sustainable growth is one of the nels naturally need to work perfectly. Sanoma Group’s long-term goals. Even In addition, we need leaders to manage “Recession wipes out the more mar- though the Group has decided to refrain the multitude,” says Rauramo. ginal ventures also in digital media. from new big investments and acquisi- These include online services based on tions for the time being, it will monitor “Sanoma has over 21,000 employees. wishful thinking rather than a sustain- market developments closely. To achieve our goals, we need all types able business model. For this reason, of competence, both stars and team I believe that digitalisation will come “The economic downturn also offers players,” Syrjänen adds. through evolution, not revolution. Our plenty of opportunities. We will see business models in traditional media considerable changes in market shares. He emphasises that collaboration and are tried and true.” Opportunities will present themselves. a feeling of community, a sense of We must keep cool and wait for the togetherness, are the best guarantees Advertising tends to overreact to right moment,” Syrjänen predicts. of success, especially in difficult times. changes in gross domestic product. The Group changed its name to “I can certainly see this happening Sanoma in October 2008. At the same again,” says Syrjänen. “At first, compa- time, the different divisions adopted nies will defer their campaigns to save more consistent names. A more concise costs. They will soon realise, however, and expressive name conveys a clearer that less advertising also means less picture of the Group as a whole. income.” review m anagement 7 Technological advances, population ageing and many other megatrends shape media companies’ strategies. These trends present new challenges as well as new opportunities. Sanoma is ready for both.

Media companies face historic tur- Business changes moil and change as technology leaps forward, consumer behaviour changes, with major trends and new competition emerges continuously. All these changes affect one another.

Leaps in technology, for example, engender novel services and new competition. At the same time, consumer behavior changes: consumers expect free services on the internet, and this demand generates more and more sponsored products. The competition for attention intensifies, and consumer habits fragment into ever smaller segments.

Current megatrends include not only the evolution of the internet, but also population ageing, decreasing family media markets in euroPe, usd million size, stronger social media, increasing mobility, growing entertainment consumption and converging tech- 400 000 nologies. Different combinations of 350 000 these engender a myriad of changes great and small, all of which require a 300 000 response from the companies involved – preferably in advance. 250 000 Consumer and eduCational books 200 000 radio advertising

150 000 newsPaPers Consumer magazines 100 000 tv advertising tv subsCriPtions and liCense fees 50 000 internet advertising internet aCCess 0 1999 2001 2007 2003 2002 2005 2008 2006 2004 2000 m arket develo P ment 8 megatrends: mobile broadband growth, converging media technologies, increasing mobility, fragmentation of client groups, population ageing, decreasing family size, strengthening social networks, increasing amount of free services, stronger ad-sponsored services, growing consumption of entertainment, increasing global competition…

Media companies should take Megatrends’ impacts are immense, but The development is continu- charge of megatrends. It would not sudden. Companies need not make ous. The changes generated by be rash to claim that these changes turnabouts; they can adjust to changes major trends are unstoppable, and do not present considerable chal- and develop one step at a time – even if many of them are even likely to gain lenges for media companies. It would that step is a long one. added momentum from the economic be even rasher to maintain, however, slowdown; free internet services, for that changes do not create incredible The steps and leaps Sanoma has taken example, will undoubtedly become opportunities. are already evident as substantial more popular. changes in its business portfolio. In a Some of the more traditional products few years, Sanoma has grown from a Sanoma keeps an eye on the new offered by media companies are in a traditional Finnish newspaper company trends and develops new businesses challenging situation; this is particu- into a European multimedia conglomer- continuously. It will not brake and larly true, for example, in the printed ate. Digital business constitutes more become moss-grown. The Group is con- newspapers. than 11% of the Group’s net sales, and stantly shaping a new vision of what online operations generate the fastest- the company will be like in a few years. The changing competition makes it growing stream of income within the It needs an even better understanding essential for companies to constantly Group. of changes in consumer demand: What develop new products and services, type of services will interest tomorrow’s which in turn requires a great deal of New technology constantly gives rise youth? How will lifelong learning affect new competence and a fresh mindset. to new models of operation. In Sanoma, the media and its business opportuni- Sanoma has secured these by acquir- these range from online price and prod- ties? What type of services will the ing companies, implementing extensive uct comparison services to live broad- baby boomers need when they retire? employee training programmes, and casts from the New York’s Metropolitan partnering with global players. Opera, as shown in Finnkino movie Great changes raise great questions theatres in Finland. that leave no business unaffected. How At the same time the role of the media will a business newspaper create new companies changes. They become Megatrends are apparent even in the services on the internet? Will textbooks more than content providers. This hap- Group’s kiosk chain. New technology only be published online? Who will be pens especially in the online world, but has brought new electronic services our future competition? also the printed media offers new crea- to the product range, and decreasing tive services for readers and advertis- family sizes also present new oppor- Many of these questions have no easy ers. A huge amount of new advertising tunities, such as selling fast food. answers. Finding the right answers is networks, sponsored links and adver- Globalisation has facilitated the chain’s important, but it is equally important tising funded models develops. expansion to Russia, among other to build an organisation that is ready countries. In other words, not only does for unforeseen changes. Organisational In spite of these changes media com- Sanoma exploit existing trends, it also models need to be flexible and the panies have their traditional mission to creates new ones. people need to have a genuine inter- create content and combine their audi- est in new models of operation. This ence and advertisers. requires a great deal. From everyone. m arket develo P ment 9 A leading European media company

Values Creativity Reliability Dynamism

Creative work is Creativity and reliability Our success is based the essence of form the basis of all on creative, reliable communications. our actions. and dynamic people.

Strategy

Our goal is to be one of the leading media companies in Europe, with a focus on sustainable growth and profitability.

our strategic objectives are:

To be the market leader in chosen Magazines: We will continue to grow in print and digital media. businesses and markets. Newspapers: We will actively develop To maintain a balanced our business to maintain our profitability and to ensure controlled migration business portfolio of B2C and from print to digital. B2B products and services.

focus areas Learning and Language services: We will grow via further internationali- To investigate opportunities to sation and entering new segments.

internationalise our TV operations. Online: We will strongly develop and expand our online assets. To maximise our strategic position in retail. and obje C tives m ission, vision, values 10 Mission Vision

To be the market leader in satisfying To be the media company people’s needs for information and of opportunities and education, and for an easier and operational excellence. happier life.

long-term financial targets target level

EBIT margin, % 12 (in 2008: 9.8, excluding non-recurring items)

Net debt/EBITDA < 3.5 (2.1)

Equity ratio, % 35–45 (40)

Gearing, % < 100 (78.5)

Investments/year, EUR million < 100 (109.9)

Net sales growth, % Faster than GDP growth in main operating countries (3.5)

Digital business, % of net sales To increase digital business significantly (11.4)

Dividend policy, % Over half of Group result after taxes distributed in dividends (125.1) and obje C tives m ission, vision, values 11 1999 2001 2003

Sanoma and WSOY Magazine business Rautakirja merged merged – the Group internationalised to the Group was formed

Strong roots foster international growth In 1999, the first of May was not only the beginning of spring. It also marked the first chapter in one of the greatest success stories in European The first ten years media: Sanoma, WSOY, Helsinki Media and Devarda merged to become the of Sanoma’s European SanomaWSOY Group, by far the largest media corporation in Finland. This success story new conglomerate focused its growth on educational publishing, new online business opportunities, and internationalisation, particularly in magazine publishing.

In a decade, the Group has grown rapidly beyond national borders. Its roots, however, run deep in its operating countries and their media cultures.

In Finland, Sanoma has fostered creativity and freedom of speech ever since Sanoma inspires, Päivälehti, the predecessor to daily newspaper Helsingin Sanomat, was informs and connects. established in 1889. s anoma’s C hange 12 2004 2005 2008

Educational publishing Magazine business The Group’s expanded to the expanded to Russia name changed Netherlands and Belgium to Sanoma

Elsewhere in Europe, Sanoma’s prod- acquisition of the Dutch publisher ment model that creates more syn- ucts and brands are market leaders Malmberg. The expansion has con- ergies, facilitates effective business with strong local traditions. Educational tinued, and the Group now produces decisions and reduces overlapping publishers Malmberg and Van In were educational materials in five European operations. established in the Netherlands and Bel- countries. gium in the middle of nineteenth cen- In October 2008, SanomaWSOY tury. Kvety, the Group’s oldest maga- The acquisition of Independent Media, changed its name to Sanoma, which zine still in circulation, was launched in Russia’s largest consumer magazine reflects the feeling of greater unity. The 1834 in what is now the Czech Republic. publisher, in 2005 marked an impor- new name is complemented by a new tant step for Sanoma in terms of new brand design. The different divisions Internationalisation gained added markets. Today, the Group’s publishing continue their expert work in their momentum in 2001, when the Group business in Russia is complemented by respective fields, but the emphasis is acquired the consumer magazine busi- press distribution and kiosk operations. now more on the common good, the big ness of the Dutch media group VNU. picture. This made Sanoma Magazines a nota- Online business is one of the focus ble European magazine publisher that areas for growth, as the evolving The future is here. Sanoma’s goal currently operates in 13 countries. electronic channels present interest- is to be one of the leading European ing business opportunities. Sanoma media companies, with sustainable The retail specialist Rautakirja merged has already secured a strong position growth and profitability. A feeling into the Group in 2003. Press distribu- in online business in the Netherlands, of community within a more united tion has expanded strongly over the Finland, Hungary and Bulgaria. Sanoma helps us to reach our goal. years, and the Group now runs distribution operations in seven countries. Closer collaboration between the different divisions is key to continued International growth in educational success. To serve this purpose, the publishing began in 2004 with the Group adopted in 2007 a new manage- s anoma’s C hange 13 Investments in focus areas continue

Sanoma developed its operations in all operating countries in 2008. The Group got a new name and visual identity in the autumn. In the future the Sanoma brand will also be more visible in the hundreds of millions of yearly customer encounters.

Sanoma Magazines is also country’s largest online opera- Sanoma News Sanoma Magazines developed its tor. Netinfo’s portfolio consists, e.g., of Sanoma News developed its news- position as the leading publisher in the Bulgaria’s most popular news site and papers markedly. As was the tabloid Netherlands even further, and was able the largest email service. Ilta-Sanomat, the weekend supplement to gain market share through success- Ilta-Sanomat Plus, the weekly supple- ful launches of new print brands and The core of Sanoma Magazines’ opera- ment of Helsingin Sanomat NYT like acquisitions in digital media. An impor- tions is the locally-known magazines. the free sheet Metro renewed. Sanoma tant step was the acquisition of Euro- The 10th edition of Sanoma Magazines’ News has strongly invested in digital pean Auto Trader. Autotrader.nl is one title Story was launched in Slovenia. services alongside with the printed of the largest Dutch websites focused Story is also published in Belgium, products and its online services reach on used cars. Altogether the Division’s Bulgaria, Croatia, the Czech Republic, more than 73% of Finns over 10 years over 80 print brands reach 71% and 200 Hungary, the Netherlands, Romania of age. In 2008, Sanoma News acquired websites 65% of the Dutch population. and Ukraine. Rakentaja.fi and its sister sites to complement its offering in online services. Sanoma Magazines is also Bulgaria’s In Russia Sanoma Magazines expanded leading magazine publisher. After the its portfolio with launches and acquisi- Netinfo acquisition, Sanoma Magazines tions. Sanoma Entertainment Sanoma Entertainment grew strongly thanks to good pay TV and broadband sales of Welho, and new TV channels. net sales by geograPhiC area, eur million Pay TV operations were developed by investing especially in offering the high definition channels. Of new TV channels Jim was the most successful.

1999 1 212 109 Sanoma Learning & Literature Sanoma Learning & Literature expanded its learning operations in Poland when the acquisition of Nowa finland other Countries Era was completed in March. The country’s second largest publisher offers a wide selection of educational materials. The Division’s Young Digital Planet, also operating in Poland, concentrates on 2008 1 460 1 571 e-learning materials.

The acquisition of Swedish Interver- bum clearly strengthened Sanoma Learning & Literature’s language C ountries k ey events and o P erating 14 finland

norway

sweden estonia russia

latvia

the united lithuania kingdom

the netherlands Poland belgium ukraine the CzeCh rePubliC slovakia

slovenia hungary

romania

Croatia serbia

bulgaria

service operations. The aim is to expand Sanoma Trade There were already 16 kiosks the Group’s language services into a Sanoma Trade took a significant step in at the end of the year. leading service provider for Northern Russia when it acquired KP Roznitsa’s and Eastern Europe supporting the 89 kiosks in the Rostov region in South- Sanoma Trade also opened a state-of- customers’ ability to work in a multi- ern Russia in March. In July, Sanoma the-art movie centre in Finland. The lingual and multi-cultural business Trade’s kiosk operations expanded to new multiplex brings also 3D movies to environment. Romania, while the first R-kiosks were the repertoire. opened in the country’s largest cities. In Finland Sanoma Learning & Litera- ture launched an edutainment product series, Oppi & Ilo, for children under 12 years. C ountries k ey events and o P erating 15 16 divisions 17 divisions Sanoma Magazines is a leading publisher of magazines and strong in digital media in 13 European countries. The company actively reaches out to an audience of 290 million consumers at every life stage, and aims to strengthen the market leading positions in all of its markets.

Building brands, carving cornerstones

“We have made significant investments market share increased, advertis- to grow, embrace new opportunities, in the competitive strength of our ing sales in print magazines took an and open-mindedly develop with the brands, and this has reaped rewards,” upward turn, and online business grew times. In the Netherlands, for example, says Eija Ailasmaa, President and faster than the market. Sanoma Maga- the newcomer Flow surprised its read- CEO of Sanoma Magazines. “When the zines Finland’s performance was excel- ers with refreshingly unconventional economic climate becomes challenging, lent, clearly outperforming the market. content and varied paper choices. Flow the strength of our brands becomes “Romania, Bulgaria, Ukraine and Russia seeks to balance the bustle of everyday especially important.” also showed high growth rates. But the life with content that fosters peace of economic climate in Russia is now very mind and also gives readers a taste Ailasmaa counts some twenty maga- challenging,” says Ailasmaa. of different lifestyles. “A new trend is zines as the main brands of Sanoma always an opportunity to adjust estab- Magazines. They are market leaders Each country requires products that lished brands and to create new ones,” in their respective areas, and many correspond to its culture. However, Ailasmaa says. have already attracted a fourth or fifth through careful localisation, a success- generation of readers. These long-time ful product can be launched in multiple New magazines need not necessarily favourites include, for example, the countries. The weekly Story is a prime start from scratch. The Belgian maga- women’s magazine Libelle in the Neth- example: it recently launched its 10th zine Goedele is a concept built around erlands and Donald Duck in Finland. version in Slovenia. Altogether, Sanoma a psychologist who hosts a television According to Ailasmaa, continuous Magazines launched or acquired over show and has authored several books development as well as exciting innova- 30 magazines in 2008. At the same and who originally became a household tions are the key to their success. time the company also closed or sold name after winning a beauty contest. some titles, demonstrating active Long-term investments in the portfolio management that is in balance Goedele was loosely modelled on Linda, product and service range produced with changing consumer values. a Dutch magazine centred on a televi- results in 2008. Ailasmaa is particu- sion personality. Linda was launched larly pleased with Sanoma Magazines’ The main brands ensure a solid five years ago and has since developed all-round success in the Netherlands, foundation for Sanoma Magazines’ into one of the most popular maga- its largest market, where the Division’s new and over 300 existing magazines zines in Sanoma Magazines’ portfolio. sanoma magazines 18 net sales, eur million oPerating Profit exCluding non- reCurring items, eur million 1 247 1 200 150 139

1 000 125

800 100

600 75

400 50

200 25

0 0 2007 2007 2005 2005 2008 2008 2006 2006 2004 2004 1999, fas 1999, fas 2001, fas 2001, fas 2003, fas 2003, fas 2002, fas 2002, fas 2000, fas 2000, fas

1999–2003 inCluding non-reCurring items

Formerly a minority shareholder, the “We are developing our digital business models and their technical and com- company acquired Linda in 2008. “We vigorously in all markets. Our leading mercial solutions. are very happy that Linda is an integral position in the Netherlands and Hun- part of Sanoma Magazines. Now we can gary will provide increasing benefits to Ailasmaa is convinced that enhanced develop the magazine further as one of other markets in the future,” Ailasmaa co-operation reduces risks. “Increased our main brands,” Ailasmaa explains. says. “We have reached an entirely new sharing means faster learning.” level in sharing knowledge and skills The acquisition of European Auto Trader Sanoma Magazines in the Benelux countries strengthened actively supports person- the leading position Sanoma Uitgevers “A new trend is always nel training by creating has in the car and motor media market. opportunities for learning European Auto Trader manages an opportunity to adjust and sharing. Lectures Autotrader.nl, one of the largest auto- delivered by outside motive websites in the Netherlands established, well-known experts bring fresh ideas, focused on used cars. and international staff brands and to create new meetings facilitate the In addition to magazine brands, sharing of competence Sanoma Magazines has several hun- success stories.” and best practices. dred online brands. Over the years, the company has both created and Collaboration leads acquired online services. In 2008, within the Division. We continually seek to breakthroughs and consistent Sanoma Magazines acquired a majority new benefits and opportunities to learn success at its best, and it also increases in the leading Bulgarian internet com- how to work together more closely.” effectiveness. Some of the projects pany Netinfo, to name but one. launched recently at Sanoma Maga- In 2008, this resulted in systematic col- zines seek to reduce costs. “We have Online business is strongly based on laboration between thirteen operating implemented major initiatives, and independent business models, such countries in digital media. The goal is their significance will continue to grow,” as online marketplaces and search to develop and apply common business says Ailasmaa. engines. sanoma magazines 19 net sales by business, eur million Personnel 6 280 6 000 sanoma magazines finland sanoma magazines belgium 5 000 206 223 307 516 sanoma magazines international 4 000 sanoma magazines netherlands 3 000 16% 18% 25% 41% 2 000

1 000

0 1999 2001 2007 2003 2002 2005 2008 2006 2004 2000

sanoma magazines

sanoma uitgevers sanoma magazines sanoma magazines sanoma magazines (the nethterlands) belgium finland international

ilse media Groep EPN International Suomen Rakennuslehti Cluster Central Europe (online operations) Jervi Egmont Kustannus Sanoma Budapest Jonge Gezinnen SBPP Hansaprint (printing) Sanoma Magazines Praha Mood for Magazines Sanoma Magazines Slovakia Sanoma Men’s Magazines Cluster South East Europe Woonbeurs Amsterdam Netinfo (online operations) (consumer fair) Sanoma Bliasak Bulgaria Sanoma Hearst Romania Sanoma Magazines Ukraine Cluster Russia and CIS Independent Media Sanoma Magazines Cluster Adriatic Region Adria Media Ljubljana Adria Media Serbia Adria Media Zagreb

She expects great benefits from Popular events, television programmes Ailasmaa expects Sanoma Magazines information technology projects, in and websites further expand the maga- to evolve from a leading European particular the renewal of the current zine brands and deepen the contact magazine company to a leading Euro- subscription system in Finland. “We’ll between advertisers and consumers. pean consumer media company – with be moving to a new environment, one Several of Sanoma Magazines’ events strong magazine brands. that is already used in the Netherlands. for instance attracted record numbers This way we can use our extensive of visitors. The annual Margriet Win- “The print magazine is a strong and experience in the Netherlands whilst terfair, for example, attracted close to lasting media product.” at the same time make sure that the 100,000 visitors, a new record in 2008. system in Finland fits with our company’s specific needs.” In 2008, Sanoma Magazines continued to divide its clientele into smaller Ailasmaa believes that efficient prac- groups defined by various factors, such tices and strong brands offer protection as current life situations. “Every life against the fluctuations of an uncertain change – move, childbirth, retirement economy. “Our position in relation to – offers us an opportunity for a new others is likely to grow stronger, as approach.” Anticipating and respond- uncertainty creates opportunities. We ing to customers’ needs is ever more can even adjust the content of our mag- important; this also applies to adver- azines to better respond to new trends tising clients. To serve this purpose, and values.” She stresses, however, the company established a dedicated that success requires a more active department in the Netherlands to lead relationship with advertisers. the way in interactive marketing. sanoma magazines 20 Major magazines and online services are thriving. This is apparent in Sanoma Magazines’ strong market position.

Collaboration reaps rewards

The renewal of Sanoma The new system will first be put to throughout the entire system. This will use in Sanoma Magazines Finland’s improve customer service, because call Magazines Finland’s customer service department, which centre representatives will have more subscription and financial answers as many as four thousand detailed client history at their disposal. management systems calls a day. The leading Finnish maga- Streamlined operations will also facili- zine publisher and its thirty-five maga- tate more efficient decision-making. transfers the company’s zines have 1.6 million subscribers. customer data to the This development project, initiated in “It is not just about having a new data the autumn of 2008, is not limited to SAP system managed by system, but especially how we organ- information technology. Developing the Dutch sister Sanoma ise our operations in the future. This business operations with future needs Uitgevers, and it also is a huge advantage, that we have the in mind is an equally important goal. expertise on using the system within “Subscription sales constitute a sig- changes employees’ work our own Division. The joint project nificant part of the magazine publish- processes and develops between Finland and the Netherlands ing market in both countries. We have has already been tested, when our already found common ground and future working methods. media sales system was replaced,” have learned a great deal from each says Chief Financial Officer Markku other. This project is a great example Kiiskinen. of sharing best practices across borders,” says Päivi Piiponniemi, Director, As soon as the subscription and finan- Business Processes. cial management systems are compat- ible, the data is available for all users sanoma magazines 21 net sales, eur million

500 475

The leading newspaper publisher in Finland is 400

taking news into a new era. In addition to its 300 print products, Sanoma News is also investing 200 strongly in digital business. 100

0 2007 2005 2008 2006 2004 1999, fas 2001, fas 2003, fas 2002, fas 2000, fas

oPerating Profit exCluding non- reCurring items, eur million 80 70

60 57 50 40 30 20 10 0 2007 2005 2008 2006 2004 1999, fas 2001, fas 2003, fas 2002, fas 2000, fas

1999–2003 inCluding non-reCurring items

“The printed word will remain strong their desired target groups by interest Print and in Finland, if boldly developed and through Sanoma Digital Online Ad Sales enhanced,” says Mikael Pentikäinen, at the dozens of online services offered online go President of Sanoma News. “The print by Sanoma News, Sanoma Magazines media is complemented by a growing Finland and Sanoma Entertainment. together well multitude of digital services.” “Collaboration between the different The daily newspaper Helsingin Sano- Sanoma divisions has lots of potential. mat leads the way with continued suc- I believe that the co-operation will con- cess in 2008. Its circulation remained tinue to increase,” Pentikäinen says. stable, and an increasing number of readers check the online or mobile edi- In the spring of 2008, Sanoma News tion for the latest news during the day, adopted a new management model, after reading the print edition in the which facilitates effective collaboration morning. within the Division. Sales and digital services are undergoing development Digital business grew at a record across business borders. “We seek rate, about 50%, which is faster than to improve our customer service, our the overall market. Pentikäinen lists agility and flexibility, and our ability bold business development, increased to prioritise. Telemarketing teams, for amount of services, and improved example, were combined into a single, internal collaboration as the reasons flexible unit.” behind the successful year of digital operations. Advertisers can now find sanoma news 22 23 sanoma news sanoma news

helsingin ilta- sanoma sanoma sanoma esmerk sanomat sanomat lehtimedia kauPunkilehdet digital (business (free sheets) information)

Helsingin Sanomat Ilta-Sanomat Regional papers Metro Marketplaces (daily newspaper) (tabloid) Etelä-Saimaa Vartti Online advertising sales lehtikuva Radio Helsinki IS Veikkaaja Kouvolan Sanomat Taloussanomat (PiCture agenCy) (local radio station) (sports and Kymen Sanomat (financial information) betting weekly) Local papers New digital services Suorakanava sanoma data (it oPerations)

Personnel sanomaPaino (5 Printing Plants)

5 000

4 000 net sales by business, eur million

3 000 2 808

ilta-sanomat 2 000 helsingin sanomat 91 280 92 153 1 000 other Publishing other businesses 0 15% 45% 15% 25% 1999 2001 2007 2003 2002 2005 2008 2006 2004 2000

Sanoma News revamped several indicative of the direction free sheets hold on the entire value chain. Sanoma of its newspapers in 2008, beginning are increasingly taking. Uutislehti 100 News already offers planning services with basic editorial routines. The news merged with Metro, which became the for advertisers and application process- desk at Ilta-Sanomat, the editorial core fourth largest print news medium in ing tools for job advertisers, to name now known as the superdesk, was the Finland in terms of readership. but a few examples. first result of this thorough rejuvena- tion. The revamped quality tabloid and Reader-generated content was more The uncertain economy was most its weekend supplement were intro- than ever an integral part of newspa- apparent in job and real estate advertis- duced toward the end of the year, with pers and online services in 2008. Read- ing. However, the economic decline did refreshed and reorganised content, and ers elaborate on printed news in online not diminish development and collabo- a new design. discussions, and reader photographs ration projects at Sanoma News. and opinions increasingly reach the These improvements seem to printed edition through the online serv- Synergies are a significant asset in cost strengthen the quality tabloid’s position ices. “Interaction between the print and competition, even though the main in the market. “The market has never online media makes both more attrac- purpose of enhanced co-operation is been as challenging as now, but Ilta- tive,” says Pentikäinen, adding that the to serve customers better. “Crises are Sanomat is now better and more com- year also marked a breakthrough for opportunities to grow stronger. We petitive than ever,” Pentikäinen says. mobile services. must have the courage to invest in the future,” Pentikäinen says. Helsingin Sanomat is preparing for a Altogether, Sanoma News now reaches renewal, which will be completed in more customers than ever and more This belief in the future is evident, for time for the newspaper’s 120th anni- frequently than ever. As many as 80% example, in the continuous training versary in November 2009. Regional of Finnish internet users access its and business coaching Sanoma News newspapers, which recorded excellent online publications and services each provides for its personnel. The Group’s results, are also undergoing revamp week. “The high visitor count is an indi- first media sales trainee programme projects. cation of trust, which is a tremendous ended in 2008, strengthening the resource for us.” ranks of new sales professionals also at Vartti is a free sheet with a companion Sanoma News. “Renewal is a process of the local news website, Vartti.fi, Nonetheless, Pentikäinen does not rely that combines the will of the individual which became the sixth largest online solely on advertising sales and visitor with the opportunities the employer news medium in Finland. This is numbers. He strives for a stronger offers,” Pentikäinen summarises. sanoma news 24 Constantly evolving newspapers and increased collaboration create new sales opportunities for Sanoma News. The previous name of the Division, Sanoma, is now the brand for the whole Group.

News in a heartbeat

After a renewal completed in “The superdesk is the beating heart This direct visual and auditory contact of the editorial offices. The biggest allows for a faster response to breaking November 2008, the quality change to the traditional news desk is news. tabloid Ilta-Sanomat is now the improvement of information flow better equipped than ever and internal communication. The print “Our work is more dynamic now. edition and online content are compiled Thanks to the superdesk, we can mobi- for the tough competition side-by-side, which changes our entire lise our people immediately and divide for news scoops. The work culture,” says Tapio Sadeoja, resources accordingly between the Senior Editor-in-Chief of Ilta-Sanomat. online service and the print edition,” superdesk at the heart of Sadeoja summarises. the editorial offices serves Success in the news race requires fast as a link between different reactions. Ilta-Sanomat first publishes The new practices call for a new the news online, and then monitors the approach, a new mind-set. operations, producing the events closely for additional informa- content for both the print tion. The print edition elaborates on the “The division between print and online news the following day, offering new becomes meaningless. This new way and online editions. angles. of working requires an open mind and willingness to change. Everything is “Overlapping content was a problem more open and straightforward now.” earlier, but because of the improved working arrangements, everyone Sadeoja thanks his employees warmly knows exactly what was already pub- for their co-operation. lished online.” “We all know that the competition is The renewal also affected seating tough. Everyone has more responsibil- arrangements. An oval group of work- ity now, but also more power to make stations is now located at the centre of independent decisions.” the editorial offices. From there, news chiefs and news co-ordinators can see and hear everything that happens. sanoma news 25 Sanoma Entertainment offers the best and most exciting electronic entertainment services on TV, radio, mobile and online in Finland. sanoma entertainment 26 net sales, eur million oPerating Profit exCluding non- reCurring items, eur million 157 150 25

125 20 17 100 15 75 10 50

25 5 1999, fas 2000, fas 2001, fas 2002, fas 0 0 2007 2007 2005 2005 2008 2008 2006 2006 2004 - 5 2004 1999, fas 2001, fas 2003, fas 2003, fas 2002, fas 2000, fas - 10

- 15 1999–2003 - 20 inCluding non-

- 25 reCurring items

Let us entertain you

Anu Nissinen, President, is pleased Welho was the first European cable with the Division’s name change from operator to introduce a 110M broad- SWelcom to Sanoma Entertainment, band subscription. Moreover, for the as it truly captures the essence of third year in a row, the EPSI Rating Sanoma’s electronic communications customer satisfaction survey ranked services. “We are all about entertain- Welho as the best cable operator in ment,” she emphasises. A perfect Finland. “I see this as an indication of example of this dedication is the customer oriented thinking throughout breakthrough of online casual games in our company. The technology must be 2008, the second year of operation for reliable and the products easy to use. Sanoma Entertainment’s game produc- Everything from invoicing to cus- tion business. tomer service needs to run smoothly,” explains Nissinen. Advances in entertainment services presuppose an ambitious Welho’s strides in technology facilitated approach to technology. Welho’s suc- opportunities for other operations as cess as a provider of pay television and Nelonen became the first commercial broadband services reflects this drive television channel in Finland to be and determination. broadcast in high definition, in Welho’s sanoma entertainment 27 sanoma entertainment

tv and radio Cable tv and oPerations broadband internet online serviCes

Nelonen Media Welho Nelonen Media online services Nelonen Pelikone.fi Jim Alypaa.com KinoTV Liv Urheilukanava Urheilu+kanava Radio Aalto Radio Rock

Personnel net sales by business, eur million 526 500 tv and radio other businesses 400 89 69

300

200 56% 44%

100

0 1999 2001 2007 2003 2002 2005 2008 2006 2004 2000

cable network. “High definition is Nelonen Media’s television program- Keeping abreast of the times is crucial. clearly a growth area,” Nissinen says. ming is increasingly available on the To serve this purpose, Nelonen Media internet. The WebTV service features launched the Safari project, in which The Finnish switchover to digital seventy hours of Nelonen Media’s new every employee meets with both television was completed in February programmes each week, and opens viewers and advertisers to tune into 2008. Finland was the first country new opportunities for advertisers to intriguing trends and other current in the world to digitise all distribution effectively reach their desired target phenomena. networks. “Increased television viewing groups. was one of the positive outcomes,” Nis- “Their observations engender ideas, sinen observes. Television programmes are usually discussion and collaboration beyond available for free online viewing for conventional borders. This epitomises Nelonen Media focused on further a week after the original broadcast. our goal for Sanoma Entertainment as developing the radio and television Nissinen envisions a future where pro- a whole.” channels established in 2007. The gramming is no longer tied to a time, commercial viewing share for Nelo- place, or type of terminal device. View- nen Media’s TV channels increased in ers will decide when, where and how 2008, largely because of a successful they watch the content of their choice. multi-channel strategy. Radio channels reaped favourable results as well, The business environment is together reaching a million Finns each changing ever more rapidly. However, week. broadcast licences and major investments in technology require long-term Nelonen Media also laid the ground- planning. work for Liv, the first lifestyle channel in Finland. The channel was launched in February 2009. sanoma entertainment 28 Sanoma Entertainment breaks new ground in entertaining Finns, matching the advances in content and technology with dedication, enthusiasm, and a passion for quality.

Think target group!

Nelonen Media’s Jim is “Viewing habits have changed con- The latest addition to Nelonen Media’s siderably. Television viewers are more commercial programming is Liv, a life- a prime example of a interested in new channels than they style channel that Werner-Autio thinks television channel focusing were before, but they also use other will particularly appeal to women. The on a specific target group. media more than they did previously,” newcomer was launched in February says Ville Toivonen, Channel Manager 2009. Targeted channels attract of Jim. increasing audiences: over Jim has exceeded all expectations in Attracting and keeping viewers requires advertising sales. Advertisers seek a million Finns on average ever more careful planning in the frag- cost-effective options, especially watch Jim each day. Every mented media market. Infotainment during economic decline, and targeted week, the channel reaches and documentaries top the list of the television channels constitute a perfect most popular programmes on Jim. match. a respectable 60% of its primary target group “Customer oriented thinking is criti- “Collaboration within the Nelonen cal in television as well. Instead of the Media channel family offers versatile of men between 22 production process, we need to focus and effective solutions. For advertis- and 44 years of age. on getting to know the viewers better ers targeting men, for example, we can and better,” says Kristiina Werner- provide a package that includes air time Autio, Senior Vice President, Free-TV. not only on Jim, but also on Nelonen, “The high number of potential choices the Urheilukanava sports channel and presents challenges. What consumers Radio Rock,” Werner-Autio points out. want, what they say they want, and what they actually do – these may be three very different things.”

sanoma entertainment 29 30

sanoma learning & literature Sanoma Learning & Literature is a leading European educational publisher offering learning materials in print and digital format. With operations in nine countries, the Division is also the leading general literature publisher in Finland and has growing international language service operations.

“The outcome of a series of positive “Our ambition is to become a genuine Delivering events in 2008 validated our long- market-oriented publisher. Attracting term strategy of profitable growth talented authors and publishing good Continuity through acquisitions and the continued books is increasingly customer-driven,” renewal of our existing businesses,” Eijkens emphasises. “In the future, the says Jacques Eijkens, CEO of Sanoma customer will be more self-conscious. Learning & Literature (previously The impact of this trend led us through SanomaWSOY Education and Books). a restructuring phase in the multi-vol- ume and yearbook operations, and also In March 2008, the Division finalised its organisationally at the general litera- acquisition of Polish educational pub- ture publisher WSOY. We are already lisher Nowa Era, announced in 2007. seeing positive results.”

“It was not our first acquisition in A clear example has been the per- Poland, but it was an important one,” formance of WSOY-published novels. explains Eijkens. “It established us as WSOY’s books received a number of the leading educational publisher in a nominations at the annual Finlandia large, dynamic market.” Prize competition, and, as an encore, the winning fiction novel, Puhdistus Another notable expansion announced (Purge) by Sofi Oksanen, is published during 2008 was the purchase of the by WSOY. Also, the Finlandia Prize for Nordic language service company non-fiction was awarded to WSOY’s Interverbum. author Marjo Nurminen for her book Tiedon tyttäret (Daughters of Knowl- “We entered into the language serv- edge). ice business in 2006 by acquiring a major stake in AAC Global. Our strategic During 2008, the Division also sought intention is to increase our presence ways to exploit its synergies amongst in this market through further acquisi- its business units. tions, as evidenced by the acquisition of Interverbum, which gives us a leading “We recognised that within our Division position in language services in the there are hidden synergies waiting to Nordic area.” be discovered, to be unlocked. During 2008, we made a conscious effort to The Division also turned its atten- uncover and employ them.” tion to restructuring initiatives aimed at realigning its resources and invigorat- “For instance, we launched a consumer ing customer interest, particularly in product targeted at children, creating a general literature. new category in Finland, called Oppi & sanoma learning & literature 31 sanoma learning & literature

net sales by business, eur million language learning serviCes literature

Malmberg AAC Global WSOY General Literature 104 259 50 the netherlands finland, sweden finland Nowa Era Bertmark Poland norway, sweden NTK/Perfekt WS Bookwell hungary (2 printing plants) 25% 63% 12% WSOY Oppimateriaalit finland finland Kirjakeskus Van In (book logistics unit) Publishing belgium finland eduCational Publishing Young Digital Planet other businesses Poland

net sales, eur million oPerating Profit exCluding non- Personnel

reCurring items, eur million 3 221

400 390 60 1999–2003 3 000 inCluding non- 53 50 300 reCurring items 40 2 000

200 30

20 1 000 100 10

0 0 0 1999 2001 2007 2007 2007 2003 2002 2005 2005 2005 2008 2008 2008 2006 2004 2006 2006 2000 2004 2004 1999, fas 1999, fas 2001, fas 2001, fas 2003, fas 2003, fas 2002, fas 2002, fas 2000, fas 2000, fas

Ilo (Learning & Fun). It’s a hybrid con- develop their careers, Eijkens mentions general literature we do not expect any cept that overlaps into the educational a programme that encourages internal significant impact from the current and entertainment domains, making mobility to other units of the Division. economic downturn. However, we are it an edutainment product. Oppi & Ilo “It’s another way to leverage our inter- more cautious in our language service was launched in the autumn of 2008 national presence for the benefit of the business as companies may be inclined and was inspired by the collaboration companies.” to cut costs.” among our business units in other markets where similar initiatives have Despite an encouraging 2008, Eijkens “In 2009 we will, of course, continue worked,” explains Eijkens. points to challenges that remain. to pay close attention to costs, but our real objective will be about growth and Another example in which common The year saw stagnation in the Dutch innovation in our portfolio, to consider synergies were found is in the sharing market due to funding rollbacks by further acquisitions, and to continue of digital assets that educational pub- the government in the procurement of forward with our long-term strategy,” lishers across international boundaries secondary educational materials. Addi- Eijkens concludes. can utilise. “We launched a common tionally, concerns have surfaced over asset bank where these expensive the impact of the slowdown in global assets can now be easily found and economic activity heading into 2009. reused in other markets, which naturally saves time and costs, and also However, Eijkens sees the Sanoma encourages cross border co-operation,” Learning & Literature division is avoid- Eijkens adds. ing much of the negative impact.

And in an effort to reach out to “Apart from the situation in the Neth- employees who value intra-company erlands, funding for schools and pupils transfers as a means to enrich and is largely remaining in place, and in sanoma learning & literature 32 Sanoma Learning & Literature continues expansion through renewals, acquisitions and leverage.

Partners in internationalisation

AAC Global is a partner of “Effective communication is a key collaboration and, if needed, expands challenge for Metso and other global it to cover all countries in which Metso the engineering company organisations, both with clients and has operations. Metso in the language, personnel. We need to learn how to communication and make the most of our competence “Our collaboration is based on a and information resources in different common view of goals and how training services required cultural environments,” says Reijo to reach them. AAC Global’s core in international markets. Heinämäki, Manager of the Metso strengths include an extensive network Competence Team. of language partners, excellent refer- In recent years, Metso has ences and the ability to tailor content to grown into a multinational Services provided by AAC Global client needs. AAC Global is part of the supplier of sustainable include language and communication Sanoma Group, which also presents skills training, management training, many advantages,” Heinämäki says. technologies and services, organisational development, documen- employing some 28,000 tation and digital learning solutions. Metso has evolved from a product- AAC Global also offers terminology based company to a service organisa- experts in over 50 countries. management in a number of foreign tion, which further emphasises the languages as well as translation and significance of education and com- localisation services that help adapt munication. The focus has increasingly business operations to different cul- shifted to developing markets, such tures. as China, India, Brazil and Russia. This adds rich and distinct cultural flavours AAC Global and Metso share a long his- to everyday business. tory of co-operation in Finland. The current strategic partnership deepens this sanoma learning & literature 33 net sales, eur million

900 867 800 Retail specialist Sanoma Trade serves its 700 customers in over 200 million annual sales 600 500 contacts at kiosks, bookstores or movie theatres. 400 Operating in seven countries, press distribution 300 200 is a strong link between publishers and retailers. 100 0 2007 2005 2008 2006 2004 1999, fas 2001, fas 2003, fas 2002, fas 2000, fas

oPerating Profit exCluding non- reCurring items, eur million 60

50 45

0 2007 2005 2008 2006 2004 1999, fas 2001, fas 2003, fas 2002, fas 2000, fas

1999–2003 inCluding Selection adds strength non-reCurring items

Sanoma Trade (the Division known The future of Sanoma Trade does Finnkino introduced live performances previously as Rautakirja) does business not depend on a single product group in from the Metropolitan Opera in New with half a million customers each day. any operation – be it press distribution, York, shown on big screens in movie Most of them make impulse purchases. bookstores, or movie theatres. theatres. “The popularity of these broadcasts exceeded all our expecta- “We have to be extremely active. Press distribution developed its logis- tions. Digitalisation enables us to offer Dynamic selections and concepts are tics services, and the point-of-sale many types of new content in our thea- crucial,” says Timo Mänty, President marketing specialist Printcenter intro- tres in the future, from sports events to and CEO. The advanced point-of-sale duced a new impulse purchase concept concerts,” Mänty promises. system enabled Finnish R-kiosks to for kiosks and service stations. In complement their offering with new Finland, also the magazine distribution Moreover, Finnkino started the era of printable and downloadable products, contracts were remodelled to achieve 3D movies in Finland, at its new theatre such as recreational fishing licences greater flexibility. at the Flamingo recreational centre in and Matkahuolto bus tickets. R-kiosks Vantaa. in Latvia and Estonia adopted the new “We continually develop new services system in 2008. in collaboration with publishers and In addition to product ranges, retailers,” Mänty says. Sanoma Trade expanded its markets. A customer loyalty campaign boosted The acquisition of a kiosk chain in kiosk sales in Finland. “It permanently The Suomalainen Kirjakauppa book- Rostov and collaboration with Auchan, increased our market share of Veikkaus store chain actively sought new product an international retail group, strength- gaming products, which was large to groups and revamped its online store ened Sanoma Trade’s market position begin with.” together with the WSOY publishing in Russia. company. The aim is to further improve Suomalainen.com to be Finland’s lead- The majority of the 135 R-kiosks in ing online bookstore. Russia are located in the Moscow and s anoma trade 34 35 sanoma trade sanoma trade

kiosk oPerations Press distribution bookstores movie oPerations

R-kioski Lehtipiste Suomalainen Kirjakauppa Finnkino finland finland finland finland R Kiosk Eesti Lehepunkt Yliopistokirjakauppa Forum Cinemas estonia estonia finland estonia Narvesen Baltija Preses Serviss Lukiolaisten Kirjakauppa Forum Cinemas latvia latvia finland latvia Lietuvos Spauda Impress Teva Reader’s Forum Cinemas lithuania lithuania finland lithuania R-Kiosk Aldipress Suomalainen.com Forum Cinemas russia the netherlands finland Home Entertainment R-Kiosk TK Pressexpo Apollo Raamatud estonia, latvia, lithuania, ukraine romania russia estonia Press Point International russia Hiparion Distribution Personnel romania Printcenter 8 396 finland 8 000 7 000 6 000 net sales by business, eur million 5 000 4 000 movie oPerations 3 000 bookstores 94 139 242 409 2 000 Press distribution 1 000 kiosk oPerations 0 1999 2001

11% 16% 27% 46% 2007 2003 2002 2005 2008 2006 2004 2000

Rostov areas, but increasingly also in the near future – on the contrary. At the in tabloid sales, whereas magazines other major metropolitan areas. “We same time, retail in Finland is preparing held their own in the competition. The seek to consolidate our position as the for the changes in the Opening Hours new enterprise resource management leading player in our field in Northern Act, which adds on the Sunday open- system and dispatch centre that are Europe and Russia.” ing of all stores. “It’s a challenge for being built in Finland will foster further everyone. On the other hand, the more development in press distribution, as Mänty is also interested in expanding people are on the move, the better.” will the new dispatch centre in Lithua- kiosk operations to countries in Central nia. Eastern Europe. The first R-kiosk in Mänty may be a realist, but not a pes- Romania was opened in July 2008, and simist: the year 2008 also gave good In the Netherlands, Aldipress competed at the end of 2008 the number had reasons to celebrate. Kiosk operations fiercely with another distributor. The increased to 16. “In developing markets, flourished in Finland and Lithuania in company focused on streamlining it is essential that magazine distribu- spite of the growing economic uncer- operations and modernising customer tion is supported by our own kiosk tainty. Movie theatres reached record service. According to Mänty, other chain.” numbers in ticket and concession sales. countries will benefit from these Mänty trusts that affordable entertain- improvements. In Ukraine, Sanoma Trade established a ment and enjoyment, such as books movie import business. Movie opera- and movies, will appeal to customers The future holds ever more effective tions also have room to grow in the even in a slowing economy. Major pur- collaboration between Sanoma Trade’s Baltic countries, where the theatre chases may be postponed, but not the different operations, beginning with network is more fragmented than in little joys of life. product cross-sales and consumer Finland. insight. Sanoma Trade made systematic invest- “We entered the Baltic market at ment in consumer insight a common “The possibilities are enormous. The exactly the right time in the late nine- goal for all operations, as they largely innovation is up to us.” ties. This has ensured us a strong share the same clientele. Other focus market position.” areas include good customer service timo mänty was aPPointed to President and personnel training. and Ceo of sanoma trade as of 1 january The year 2008 in retail was marked 2009. erkki järvinen served as Presi- by major changes. Cost pressures are Press distribution business in dent and Ceo of sanoma trade until escalating, and Mänty sees no relief in Finland was affected by the decline 31 deCember 2008. s anoma trade 36 Sanoma Trade expands its market, investing in more diverse and comprehensive product ranges. At the same time, it focuses on anticipating customer behaviour.

Leveraging knowhow

The Finnish press Allan Liima, Lehepunkt’s Managing of press products in the racks based Director, explains that facing the key on electronic tracking of sales under distribution company customers’ demands requires con- a data-sharing arrangement with the Lehtipiste has, over the stant innovation. But he is not afraid supermarket. Instead of stocking at years, built an efficient of challenges: his latest idea, auto- weekly intervals, we bring in small mated warehousing of magazines and quantities several times a week, as business model and newspapers, has broad international soon as the reserve in stores drops to processes for press implications. an agreed minimum level. This cuts the rate of return of unsold magazines to distribution, and In 2000, the single copy sales of below 20% – a huge improvement in a successfully exported this magazines and newspapers in Esto- business where return rates can run as knowhow to the Baltic nia were conducted largely through high as 50%. Our plan is now to extend kiosks. Building on Sanoma Trade’s this approach to all Estonian R-kiosks markets. In just ten years, own R Kiosk business, which provided and the largest retail chains during the Estonian Lehepunkt has well over half of Lehepunkt’s initial 500 2009.” points-of-sale, Liima began to push for become the market leader distribution points at supermarkets Although each of Sanoma Trade’s press in the press distribution and hypermarkets. distribution companies in Estonia, Latvia and Lithuania are independent, market. In a business which measures profit- the Baltic managers meet regularly to ability by the metre, Lehepunkt has come up with the best concepts. Liima changed the one-and-two-metre-long reports: “All of us work with the major displays to 20-metre racks in some chains in our respective countries, so hypermarkets. we can develop effective co-operation with retailers based on increased data “Realising the ineffectiveness of haul- exchange and incentives for higher ing unsold books and magazines back sales.” to the warehouse, we ran a trial of an automated storage concept in two hypermarkets at the end of 2008. The idea is to manage the replenishment s anoma trade 37 38 Sanoma’s business principles are firmly founded on the Group’s long traditions in social responsibility. The Sanoma Group is a good corporate citizen in all areas: financial responsibility, ethics, the environment and stakeholder relations.

Responsibility runs deep at Sanoma

The Sanoma Group strives to take good Reading and literacy constitute the Each year, Sanoma donates part care of its personnel. We also seek to foundation of civilisation and democ- of its earnings to charities, with the further improve managing the environ- racy. Sanoma acknowledges its role consent of the Annual General Meet- mental issues at Sanoma. and responsibility in providing quality ing. These funds have mainly been education and a diversity of creative channelled to foundations and projects Profitable growth and long-term content. Encouraging children and supporting free speech, culture, jour- commitment are the core principles of teenagers to become media-literate cit- nalism research and Finnish society Sanoma’s operations. We invest in both izens is important to Sanoma. In 2008, as a whole. In 2008, these donations new businesses and the development we also encouraged senior citizens to amounted to EUR 500,000. In addition, of our current products and services. take part in the information society: the the various divisions and businesses cable operator Welho offered free train- within the Group also channel direct Sanoma offers its shareholders a stable ing sessions in the use of the internet in support to projects they deem impor- dividend yield: the Group primarily Helsinki libraries. tant. pays out over half of its result after taxes in dividends each year. Reliability, Together with other publishers, In the Netherlands, the employees of accuracy and continuity are the guiding Sanoma organises an annual Magazine Sanoma Uitgevers dedicated an entire principles in our financial reporting. Day and an annual Newspaper Week day in June to moving people – both Group-wide guidelines for reporting, in Finland. During these theme events, physically and emotionally. Some 600 appropriate approval procedures and journalists visit schools and publishers employees participated in the Moving internal audits ensure the implemen- provide newspapers, magazines and People Day, which provided joy, caring tation of good practices in everyday other materials for educational use. and presents to children and old people operations. For more information on During the Newspaper Week, Helsingin in hospitals, homes and other institu- Sanoma’s corporate governance and Sanomat publishes special content for tions. This event met with positive risk management, please see pages 70 schoolchildren each day. The press feedback and will be organised again in to 74 of the Financial statements. distributor Lehtipiste contributes to 2009. Magazine Day by collecting magazines Sanoma fosters free speech and and transporting them to schools The Sanoma Group has supported the independence in its publishing opera- around Finland. international Pink Ribbon campaign tions. The Group is a member of the around Europe for several years. The European Publishers Council, which In the Netherlands, Sanoma contrib- campaign strives to increase awareness promotes journalistic and commercial uted to the Learn for Life! book project of breast cancer among women. freedom of expression and monitors that supported a school construction media legislation. programme in Ethiopia. orate res P onsibility Cor P orate 39 Sanoma contributes to public dis- In Belgium, the Humo and Télé Mous- Sanoma Trade has also invited its cussion on current and crucial issues tique magazines selected sustainable customers to join the campaign to through its different media outlets by development as one of their continuous prevent climate change. Recycling bins offering, for example, information and themes. In Finland, the leading news- in selected movie theatres encourage practical tips on how to prevent climate paper Helsingin Sanomat actively dis- waste sorting and remind moviegoers change and make a positive impact cussed sustainable development and of the importance of everyday choices. on the environment. In 2008, Nelonen environmental issues, dedicating an Media’s campaign Operation Earth entire issue of its HS Teema magazine Please visit sanoma.Com for more increased awareness of climate change to the state of the Baltic Sea. Helsingin information on CorPorate resPonsibil- through entertainment while collecting Sanomat also included a carbon foot- ity and Current ProjeCts. a substantial donation for the World print calculator on its website, helping Wildlife Fund. readers understand the effect of their choices on climate change.

In order to reach millions of customers Dynamic and innovative daily, we need – and we have – professional people with a versatile range of professionals skills. Producing and selling magazines, newspapers, books and online services The media industry is a people business and Sanoma with high-quality content is the core is a company of people. The Group’s success is built of our business. For this we employ creative, reliable and dynamic people to up by its employees’ ability to constantly develop function in all roles. skills and competencies. To achieve this success, Sanoma offers employment opportuni- Sanoma focuses on the recruitment, retention and ties for different phases of life, includ- development of its personnel. ing flexible working hours. During the Personnel 40 average number of emPloyees average number of emPloyees net sales Per emPloyee, eur 1 000 (full-time equivalents)

25 000 25 000 200 21 329

175 167 20 000 20 000 18 168 150

15 000 15 000 125 100 10 000 10 000 75 50 5000 5000 25 0 0 0 2007 2007 2007 2005 2005 2005 2008 2008 2008 2006 2006 2006 2004 2004 2004

high season, our retail operations hire Common goals are best achieved Opportunities Policy, Sanoma monitors seasonal workers in order to meet the in an inspiring work environment. the relative shares of the genders and customers’ needs. Sanoma promotes the well-being of different age categories of employees. its personnel by encouraging a posi- The Sanoma international way of tive work atmosphere. As an employer, In 2008, 70% of all employees were operating opens up interesting chal- Sanoma is committed to equal treat- female, while 30% were male. In top lenges for our personnel. New thinking ment and provides its personnel with management positions (the Executive and innovation is encouraged in all our a fair reward structure. To ensure this, Management Group, the Corporate activities, and we build up our work Sanoma has designed the Group Equal Centre Management Group and the environment based on the best charac- Opportunities Policy. Its principles are Management Groups of Sanoma’s divi- teristics of our units. In 2008, the Group further specified in the Equal Opportu- sions), the figures are 26% and 74% employed on average more than 21,000 nities Policy for each Sanoma division. respectively. people in 20 European countries. In accordance with the Group Equal Personnel 41 work exPerienCe at sanoma Personnel by age

6 000

4 705 6 937 3 919 3 071 1 468 927 5 000

4 000

3 000 under 1–4 5–9 10–19 20–29 over 30 1 year years years years years years 2 000

1 000 men women 0 aged 25–29 aged aged 30–39 aged aged 50–59 aged aged 40–49 aged aged over 60 aged aged under 25 aged

The European Works Council, in tax). In addition, all teams nominated programmes tailored to the Group’s Sanoma called the International as Sanoma Award finalists get a EUR needs are an effective way to develop Co-operation Council (ICC), is continu- 3,000 citation. and improve professional skills. They ing its work. ICC was established in also play an important role in network- 2006 to improve communication and Future growth and success is ing people and sharing best practices co-operation between management taken into account in all organisa- within the Group. and employees. The council consists of tional issues. Sanoma’s position in representatives from different Sanoma the evolving European media market Constant learning is a key to operating countries. The ICC meets presents challenges to its organisa- Sanoma’s future success. In the spring annually to review and develop proc- tional dynamism and its personnel. As of 2007, the Group-wide internal train- esses. The 2008 meeting was held in an employer, the Group appreciates ing programmes were combined under Helsinki. professional expertise and supports the Sanoma Academy umbrella. The various training and competence devel- Academy brings the Group’s leadership The work environment is monitored opment programmes for its employees. and management training programmes through regular surveys. In Finland, all together, and co-ordinates the Trainee divisions conduct a bi-annual survey. To sustain success in a changing Programmes. Sanoma Academy also The results and development measures environment, successor planning and organises additional training based on are closely followed at the manage- career development processes are divisions’ needs. ment level. For example, in Sanoma constantly being developed and closely News, the survey offers a regular feed- monitored at the top management In addition to the Group-wide training, back channel, provides information to levels. Sanoma is continuously recruit- divisions and business units arrange the management and forms a basis for ing new personnel – both fresh gradu- extensive training aimed at support- the development of the personnel. ates beginning their careers as well ing business unit specific needs. In as highly experienced professionals. 2008, Sanoma Magazines, for example, In addition to country-specific basic Particular attention is paid to the age continued its Strategic Leadership salary structures, a variety of incentive structure of personnel in the operating Programme. This 6-day programme schemes (profit-sharing and per- countries where population is aging for key employees (Senior Manage- sonal short term incentive plans) are the fastest. Ensuring that experienced ment and Management Teams) has implemented and designed to reward employees pass their tacit knowledge been executed four times: one ses- performance in different parts of the on to less seasoned employees is sion in 2007 and three in 2008. For Group. Each year, the Group distributes becoming increasingly important. each programme, 20 participants were a Sanoma Award to three employees or selected to ensure a well-balanced mix teams that have substantially improved Group-wide training and develop- of nationalities. and developed the Group’s operations. ment is one way of transferring such Each prize totals EUR 12,000 (including tacit knowledge. Different training Personnel 42 Personnel by division tyPe of emPloyment

9 000 9 000 8 000 8 000 7 000 7 000 6 000 6 000 5 000 5 000 4 000 4 000 3 000 3 000 2 000 2 000 men temPorary 1 000 1 000 women Permanent 0 0 news news trade trade magazines magazines sanoma C or P sanoma C or P entertainment entertainment learning & literature learning & literature Personnel by Country, 31 deC. 2008

finland, 9 785 45.9%

Sanoma Academy offers training and cause and effect of one’s own persona development on a broad scale: leader- and feelings in a leadership position. ship and management development JUMP is an international programme the netherlands, 2 364 11.1 programmes with an emphasis on the targeted at future potential. The pro- strategic targets of the Group as well gramme is designed to offer partici- as other subjects, such as language pants new managerial and leadership russia, 2 003 9.4 and ICT training. The Academy also skills. A third group started the course co-ordinates two trainee programmes, in the autumn of 2008. The Sanoma the Media Trainee Programme and the Executive Programme is a top-man- lithuania, 1 187 5.6 Media Sales Trainee Programme, which agement training programme aimed are aimed at recruiting future experts. at developing strategic thinking and estonia, 1 114 5.2 management skills. The School of Journalism, the oldest Poland, 871 4.1 part of the Sanoma Academy, has Sanoma’s Media Trainee Programme trained 308 journalists since 1967. The has fostered business profession- latvia, 685 3.2 13th long course graduated in August als wanting to learn about the media 2008. In addition to comprehensive industry since 1999. The programme belgium, 670 3.1 journalistic courses, the School of Jour- will be developed further to incorpo- hungary, 617 2.9 nalism organises further studies for the rate international aspects of the media Group’s Finnish journalists. business. romania, 536 2.5

Sanoma’s leadership and management The Media Sales Trainee Programme, the CzeCh rePubliC, 499 2.3 training consists of six programmes: started in 2008, has been very suc- bulgaria, 189 0.9 START offers the basic skills needed cessful: both trainees and participat- in managerial work for new manage- ing businesses have found this type sweden, 182 0.9 rial staff, whereas JET develops the of training programme quite valuable. Croatia, 161 0.8 strategic skills further. STEP is a train- The programme teaches new media ukraine, 123 0.6 ing programme designed for special- sales professionals to become familiar serbia, 106 0.5 ists to equip them with the skills and with the Group’s product portfolio and slovakia, 61 0.3 competencies required in developing in its customer base and values. The the united kingdom, 60 0.3 non-managerial roles. programme continues in 2009. slovenia, 40 0.2 malaysia, 32 0.1 In 2008, Sanoma launched the Growth germany, 14 0.1 franCe, 13 0.1 Leader Programme for management. denmark, 12 0.1 The participants learned about the norway, 10 0.1 Personnel 43 Sanoma operates according to the principles of sustainable development by preventing environmental damage and using natural resources responsibly. The Group also strives to minimise the environmental effects of its operations by consistently reducing emissions and waste. Environmental concerns are an integral part of the business principles approved by the Board of Directors.

Responsible use of resources

Optimal use of paper and other materi- matter, a procedure that provides direct als, streamlined deliveries, effective benefits for the Group. recycling, efficient use of water and energy as well as the safe handling of In 2008, paper purchases constituted chemicals are the key environmental 5% of the Sanoma Group’s total annual issues at Sanoma. Office work does expenses. Optimising the paper usage not produce significant environmental is a key development area. In 2008, impacts, but the Group will pay increas- the Group used 264,200 tons of paper, ing attention to energy use in the which marks an increase of 5,700 tons, coming years. or more than 2%.

The single most important raw Print production is geared toward material of our operations, paper, is printed publications of the highest both renewable and recyclable. More quality. Sanoma’s printing plants than half of the paper we use is made constantly develop their products and from certified fibre, and we continually operations, seeking to reduce their seek to increase this proportion. We environmental impact by applying the also use secondary fibre from recycled best available technologies and efficient paper as often as possible. production processes.

Our production facilities are committed The Group operates eight printing to using raw materials, other materials plants, all located in Finland: five news- and energy as efficiently as possible. paper printing units (in Vantaa, Forssa, We also promote the reuse of printed Varkaus, Kouvola and Lappeenranta), 44 paigns. through formance are Sanoma’s expert materials waste increase tainers duction recycle The sourced In environmentally which to These sales Juva) two other both continually book five and marketing transport. allows printing help. and as our The waste. countries, printing newspaper various the printing a are in newspaper much clients printing optimal book

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plants has sized cam- intervals plants waste with and per- pro- also and out- close and con-

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45 environment from the left: hannu syrjänen, Paavo hohti, sari baldauf, sirkka hämäläinen-lindfors, robert Castrén, jane erkko, rafaela sePPälä, sePPo kievari, jaakko rauramo and sakari tamminen.

Jaakko Rauramo Sari Baldauf born 1941, m.sC. (teCh.), born 1955, m.sC. (business Board of d.sC. (teCh.) h.C. (helsinki administration), d.sC. (teCh.) h.C. university of teChnology) (helsinki university of teChnology), Directors Chairman of the Board since 2001 doCtor h.C. (eCon. & bus. adm.) (turku and member since 1999. sChool of eConomiCs and business Term ends in 2009. administration) Vice Chairman of the Board since 2005 Joined the Sanoma Group in 1966. and member since 2003. Term ends in Served as Chairman and CEO 2009. 2001–2005 and President and CEO of SanomaWSOY 1999–2001, President Served as Executive Vice President and of Sanoma Corporation 1984–1999 General Manager of Networks, Nokia and member of the Board 1979–1999, Corporation 1998–2005 and member Sanoma Corporation’s Executive Vice of the Nokia Group Executive Board President, General Manager of the 1994–2005. Newspaper division and General Man- board membershiPs, ComPanies ager at Sanomaprint, among others. CapMan Plc (Finland), Daimler AG board membershiPs, ComPanies (Germany) (Supervisory Board), East Office of Finnish Industries Oy F-Secure Corporation (Finland), (Finland) (Chairman), Metso Corporation Hewlett-Packard Company (USA), (Finland) (Vice Chairman) Savonlinna Opera Festival Ltd (Finland) (Chairman) tors of d ire C tors b oard 46 Robert Castrén Sirkka Hämäläinen-Lindfors Hannu Syrjänen born 1957, b.sC. (eCon.) born 1939, d.sC. (eCon.), doCtor h.C. born 1951, b.sC. (eCon.), Board member since 2001. (eCon. & bus. adm.) (turku sChool master of laws Term ends in 2011. of eConomiCs and business President and CEO. Board member administration) since 2001. Term ends in 2010. Sales Director at UPM-Kymmene Corpo- Board member since 2004. ration. Held various marketing positions Term ends in 2010. President and COO of SanomaWSOY at UPM-Kymmene Corporation and its 2001–2005. Served Rautakirja Corpora- predecessor, Kymmene Oy, since 1991. Served as member of the Executive tion 1989–2001 as President and CEO, Prior to that, he worked for Finnpap Board of the European Central Bank Vice President, and Executive Vice and Lamco Paper Sales, among others. 1998–2003 and as Governor and Chair- President and Deputy CEO. Previously Served Sanoma Corporation’s Board man of the Board of the Bank served as Vice President of the TS member 1994–1999 and Vice Chairman of Finland 1992–1998, among others. Group, Vice President of Wihuri Oy and 1999–2002. board membershiPs, ComPanies Managing Director of Finnish Lawyers’ Investor AB (Sweden), Kone Corporation Publishing Oy. (Finland) (Vice Chairman) board membershiPs, ComPanies Jane Erkko East Office of Finnish Industries Oy born 1936 (Finland), Ilmarinen Mutual Pension Board member since 1999. Seppo Kievari Insurance Company (Finland) (Chair- Term ends in 2011. born 1943 man), Orion Corporation (Finland) Board member since 2003. Served as member of Sanoma Corpo- Term ends in 2010. ration’s Board 1990–1999 and as Vice Sakari Tamminen Chairman of the Board of Helsinki Media Served Sanoma Corporation 1966– born 1953, m.sC. (eCon.) Company Oy 1995–1999. 2004 as President, as Publisher of Board member since 2003. board membershiPs, ComPanies Sanoma’s newspapers, as Executive Term ends in 2009. Oy Asipex Ab (Finland) Vice President and as Senior Editor- in-Chief of Helsingin Sanomat, among President of Rautaruukki Corporation others. since 2004. Served Metso Corporation Paavo Hohti board membershiPs, ComPanies 1999–2003 as Senior Vice President born 1944, Ph.d., Professor Hämeen Sanomat Oy (Finland) and CFO, Executive Vice President and Board member since 1999. CFO, and Deputy to the President and Term ends in 2011. CEO. Previously served as Executive Rafaela Seppälä Vice President and CFO, as well as Managing Director of the Council of born 1954, m.sC. (journalism) Senior Vice President and Chief Finan- Finnish Foundations since 2004. Board member since 1 April 2008. cial and Accounting Officer of Rauma Served in the Finnish Cultural Founda- Term ends in 2011. Oy, as Vice President, Finance of tion 1980–2004. Member of WSOY’s Rauma-Repola Oy’s Engineering Indus- Supervisory Board 1991–1994 and Vice Served as SanomaWSOY Board try, and as Financial Manager of Metal Chairman 1994–1999. member 1999–2003, President of Industry division of Oy W. Rosenlew Ab. Lehtikuva Oy 2001–2004, Project board membershiPs, ComPanies Manager at Helsinki Media Company Oy Confederation of Finnish Industries EK 1994–2000 and member of Sanoma (Finland) (Chairman), Lemminkäinen Corporation’s Board 1994–1999, Corporation (Finland), Varma Mutual among others. Pension Insurance Company (Finland)

Robin Langenskiöld born 1946, b.sC. (eCon.) Board member since 1999. Term ended on 1 April 2008.

the ComPlete list of all board membershiPs Can be found at sanoma.Com. the share ownershiP information as well as stoCk oPtions Can be found on the notes 31 of the finanCial statements and Changes in ownershiP at sanoma.Com. of d ire C tors b oard 47 Executive Management Group

Hannu Syrjänen President and CEO of Sanoma. Member of the Executive Manage- ment Group of Sanoma since 1999, Chairman since 2001. Chairman of the Corporate Centre Management Group since 2007. Sanoma Board member since 2001. Hannu Syrjänen Kim Ignatius

Eija Ailasmaa Kim Ignatius born 1950, m.Pol.sC. born 1956, b.sC. (eCon.) President and CEO of Sanoma Magazines. Chief Financial Officer (CFO) of Member of the Executive Management Group Sanoma. Member of the Executive of Sanoma since 2000. Management Group and Corporate Centre Management Group Joined the Sanoma Group in 1973. Served as of Sanoma since 1 August 2008. President of Sanoma Magazines Finland Oy 2001–2003 and Helsinki Media Oy 2000– Served TeliaSonera 2000–2008 2001, as well as Executive Vice President and as Executive Vice President and General Manager, Magazines of Helsinki Media CFO. Previously served as CFO and Company Oy 1998–2000. Previously served member of the Executive Board of as Vice President, Publishing of Sanoma Cor- Tamro Corporation. poration’s Sanomaprint and Helsinki Media Company Oy, as Editor-in-Chief of Kodin Kuvalehti and in various editorial positions at Ilta-Sanomat. board membershiPs, ComPanies Huhtamäki Corporation (Finland), Eija Ailasmaa Solidium Oy (Finland) (Vice Chairman)

the ComPlete list of all board Timo Mänty membershiPs of sanoma’s born 1960, m.sC. (eCon.) management Can be found President and CEO of Sanoma at sanoma.Com. the share Trade and member of the ownershiP information as well Executive Management Group of as stoCk oPtions Can be found Sanoma since 1 January 2009. on the notes 31 of the finanCial statements and Changes in Served Sanoma Trade as Senior ownershiP at sanoma.Com. Vice President of Movie operations and Managing Director of Finnkino Oy since 1998. Previously served as Executive Vice President of Suomalainen Kirjakauppa Oy, Vice President of Lehtipiste and in managerial capacity in Hartwall Oyj and Suomen Unilever Oy. anagement g rou P e xe C utive m anagement 48 Timo Mänty Jacques Eijkens born 1956, b.sC. (eCon.) CEO of Sanoma Learning & Literature. Member of the Executive Management Group of Sanoma since 2006.

Served as CEO of Malmberg Investments 2001−2004 and Educational Information Group (part of VNU) 1998−2001. Joined Malmberg B.V. in 1981 (part of Sanoma Learning & Literature since 2004) and served in various management and marketing functions.

Jacques Eijkens

Anu Nissinen Tapio Kallioja born 1963, m.sC. (eCon.) born 1948, m.sC. (teCh.) President of Sanoma Entertain- President of SWelcom and ment and member of the Executive member of the Executive Management Group of Sanoma since Management Group of 25 February 2008. SanomaWSOY until 24 February 2008. Served Sanoma Entertainment since 2001. Served as President of SW Served the Sanoma Group Television Oy (Welho) and as Market- 1984–2008 as President of ing Director of Helsinki Televisio Oy. Helsinki Media Company Oy, Previously served Oy Sinebrychoff Helsinki Television Ltd. and Ab as Marketing Director and Cultor Helsinki Telset Oy. Also served Group as Deputy Product Manager, as Vice President of Eurocable among others. Group and New Media Group.

Anu Nissinen

Mikael Pentikäinen Erkki Järvinen born 1964, m.sC. born 1960, m.sC. (eCon.) (agriCulture and forestry) President and CEO of Sanoma Trade President of Sanoma News. and member of the Executive Man- Member of the Executive agement Group of Sanoma until Management Group of Sanoma 31 December 2008. since 2004.

Served Rautakirja Ltd as President Served the Finnish News Agency and Senior Vice President, Kiosk as Editor-in-Chief and President Operations 1997–2008. Previously 1999–2004. Previously served served Cultor Group as Marketing as Editor-in-Chief of Etelä-Saimaa Manager and Head of Marketing 1996–1999 and as Editor in politi- at Vaasamills Ltd and as Manag- cal news of Helsingin Sanomat ing Director of Siljans Knäcke AB 1992–1996. in Sweden, and as Product and board membershiPs, ComPanies Marketing Manager of Oy Karl Fazer The Finnish News Agency (Fin- Ab’s Fazer Bakeries. land), Suomalainen Yhteiskoulu Corporation (Finland) Mikael Pentikäinen Corporate Centre Management Group

Hannu Syrjänen Nils Ittonen (see pages 47 and 48) born 1954, b.sC. (eCon.) Senior Vice President, Group Treasury, Real Estate and Risk Management of Sven Heistermann Sanoma. Member of the Corporate born 1972, m.sC. (teCh.) Centre Management Group since 2007. Chief Strategy Officer (CSO) of Sanoma. Member of the Corporate Centre Man- agement Group since 4 August 2008. Merja Karhapää born 1962, master of laws, Postgraduate iPr diPloma (bristol Kim Ignatius university) (see page 48) Chief Legal Officer (CLO, Group Legal Affairs) of Sanoma, member of the Corporate Centre Management Group Matti Salmi and Secretary of the Board of Sanoma born 1950, m.sC. (eCon.) (Company Secretary) since 1 August Senior Vice President, Group Financial 2008. Management of SanomaWSOY and member of the Corporate Centre Man- agement Group until 31 July 2008. Ben Tiesnitsch born 1952 Chief Human Resources Officer (CHRO) of Sanoma. Member of the Corporate Centre Management Group since 1 June 2008.

Kerstin Rinne born 1950, ll.b., master of laws (trained on the benCh) Senior Vice President, Group Strategic Development and Legal Affairs of SanomaWSOY, member of the Corporate Centre Management Group and Secretary of the Board of SanomaWSOY until 1 September 2008. ther management ther management o 50 Divisions’ management groups (as of 31 january 2009) contents 4 Key ﬁ gures and organisation

6 Management review

8 Market development

10 Mission, vision, values and objectives

II20900519_Sanoma20900519_Sanoma KANNET.inddKANNET.indd 4 33.3.2009.3.2009 09:34:3409:34:34 Divisions’ management groups (as of 31 january 2009) contents 4 Key ﬁ gures and organisation

6 Management review

8 Market development

10 Mission, vision, values and objectives

II20900519_Sanoma20900519_Sanoma KANNET.inddKANNET.indd 4 33.3.2009.3.2009 09:34:3409:34:34 sanoma corporation

Sanoma Corporation President and CEO Hannu Syrjänen Ludviginkatu 6–8 P.O. Box 1229, 00101 Helsinki, Finland Tel. +358 105 1999, fax +358 105 19 5068 Sanoma.com

Group Strategic Development, CSO Sven Heistermann annual report 2008 Group Finance and Administration, CFO Kim Ignatius Group Treasury, Real Estate and Risk Management, Senior Vice President Nils Ittonen Group Legal Aﬀ airs, CLO Merja Karhapää Group Human Resources, CHRO Ben Tiesnitch

Group Communications Tel. +358 105 19 5062, fax +358 105 19 5068 [email protected] a Sanoma company

office of the chairman Chairman Jaakko Rauramo Erottajankatu 11 A P.O. Box 1229, 00101 Helsinki, Finland Tel. +358 105 1999, fax +358 105 19 5508

Sanoma Magazines B.V. President and CEO Eija Ailasmaa Jachthavenweg 124, 1081 KJ Amsterdam a Sanoma company P.O. Box 90484, 1006 BL Amsterdam The Netherlands Tel. +31 20 851 2100, fax +31 20 851 2149 Sanomamagazines.com Sanoma Learning and Literature B.V. CEO Jacques Eijkens Sanoma News Ltd Statenlaan 1 2008 annual report President Mikael Pentikäinen P.O. Box 99, 5201 AB ‘s-Hertogenbosch TAUKOAUAUKUKOOPELITP T Töölönlahdenkatu 2 The Netherlands PL 95, 00089 Sanoma, Finland Tel. +31 73 628 7528 Tel. +358 9 1221, fax +358 9 122 4809 Sanoma-ll.com Sanomanews.com Rautakirja Ltd (Sanoma Trade) Sanoma Entertainment Ltd President and CEO Timo Mänty President Anu Nissinen Koivuvaarankuja 2 Ludviginkatu 6–8 P.O. Box 1, 01641 Vantaa, Finland P.O. Box 1019, 00101 Helsinki, Finland Tel. +358 9 852 81, fax +358 9 853 3281 Tel. +358 10 707 1111, fax +358 10 707 7008 Rautakirja.ﬁ

Sanomaentertainment.com Sanomatrade.com sanoma corporation sanoma corporation, p.o. box 1229, 00101 helsinki, finland. tel. +358 105 1999, sanoma.com Annual report 2008

I20900519_Sanoma KANNET.indd 3 3.3.2009 09:34:01 sanoma corporation

Sanoma Corporation President and CEO Hannu Syrjänen Ludviginkatu 6–8 P.O. Box 1229, 00101 Helsinki, Finland Tel. +358 105 1999, fax +358 105 19 5068 Sanoma.com

Group Communications Tel. +358 105 19 5062, fax +358 105 19 5068 [email protected] a Sanoma company

office of the chairman Chairman Jaakko Rauramo Erottajankatu 11 A P.O. Box 1229, 00101 Helsinki, Finland Tel. +358 105 1999, fax +358 105 19 5508

Sanomaentertainment.com Sanomatrade.com sanoma corporation sanoma corporation, p.o. box 1229, 00101 helsinki, finland. tel. +358 105 1999, sanoma.com Annual report 2008

I20900519_Sanoma KANNET.indd 3 3.3.2009 09:34:01