Sanoma Oyj

OMXH:SANOMA

Earnings Call Transcript 2024-Q3

[Kaisa Uurasmaa, executive]

Good morning, everyone, and welcome to Sanoma's Third Quarter 2024 Results Presentation. My name is Kaisa Uurasmaa. I'm heading Investor Relations and Sustainability at Sanoma.

Third quarter is always important for us, especially in the Learning business. And we had a solid quarter and delivered improved operational EBIT also for the first 9 months.

Today, we have President and CEO, Rob Kolkman; and CFO, Alex Green, presenting the results. After the presentation, we will have a Q&A session. We will first take questions from the audience here at Sanoma House. Please use the microphone. Then we will hand over to the telephone line. And finally, you can also use the chat function in the webcast platform. The full event will be recorded, and the recording will be available on our website shortly after the event.

So with this introduction, I would like to invite Rob on stage, please.

[R. B. Kolkman, executive]

Thank you very much, Kaisa, and good morning, everyone. It's my pleasure to present to you the quarter 3 results today. And as Kaisa was saying, it's a solid quarter, important quarter for us and we delivered overall for the first 9 months the improved operational EBIT. So let me, as usual, zoom in on a couple of the key elements and then go into both businesses a little bit more specifically.

First and foremost, on the sales side. There, we saw pretty much the indications that we gave earlier. They also happened in both businesses, which means in Learning, the expected lower sales in Spain as a result of the end of the curriculum is now very much reflected in the quarter 3 numbers. And the same is true for the planned discontinuation of the low-value distribution contracts in the Netherlands and Belgium.

And also as expected, that was partly offset by continued good growth in other learning content markets. And of course, I will zoom in on that a little bit more in a minute. Media Finland decreased, if you look at it for the 9 months, mainly due to the divestments. And again, I will zoom in on the specific elements of that.

Our improved operational EBIT for the first 9 months was driven largely by Media Finland and Learning with the solid results in quarter 3 was stable.

We're very pleased to see that the free cash flow continues to improve and has improved for the first 9 months, actually significantly, partly driven by Solar. And Solar really helps us to continue to be on track to reach the long-term profitability target of 23% in 2026 for Learning.

We're also pleased with the continued deleveraging of the balance sheet, in line with what we were expecting, and that leverage has now improved to 2.4, well below our long-term target of 3.0.

As a result of the solid quarter and the first 9 months, we're now in a position to narrow the group's outlook, which, as you can see here, means that our reported net sales is expected to be between EUR 1.32 billion and EUR 1.34 billion. And our operational EBIT, excluding PPA, is expected to be EUR 170 million to EUR 180 million. And both of them are at the higher end of our original outlook that we gave back in February.

Let me now zoom in on Learning first. So the lower net sales in the quarter, very much in line with our earlier indications and the key trends being there as expected. So the net sales decline in Spain of EUR 21 million was actually sort of on the better side of what we expected. And for the full 9 months, that's an EUR 18 million because we saw, of course, still a little bit of an uptick in the first 6 months, and very much driven by the ending of the LOMLOE curriculum renewal, so the cycle we talked about. That was offset by growth in other learning content markets, in particular, Poland and the Netherlands.

And across the board, we saw the second year now of above-average price increases also supporting our numbers. And on that point of the above-average price increases, we've now seen 2 years of that happening, as we intended. That also means we have compensated now for the very high inflation impact we saw a few years ago. And going forward, we expect our price increases, therefore, to be more at normal levels.

With regard to the planned discontinuation of our low-value distribution contracts in the Netherlands and Belgium, that had an impact of EUR 28 million, if you look at the first 9 months for Learning. That remains a tough part of our market, nothing new as such there. But of course, we have done a lot of work to see what's the best way forward there. And that means that we continue to work with the market on finding the right business models for going forward. But in the short-term, next year as well, we expect a further decline of these low distribution sales contracts as well. We expect that to continue to go down.

And as a result of that updated outlook, and Alex will talk about that later, we have also booked an impairment of EUR 27 million in quarter 3.

And as always, as a reminder, the divestment of Stark had a EUR 9 million impact on the top line. For the full year, that will be EUR 14 million.

Regarding the operational EBIT, for the 9 months, that is stable on the back of a, as we described it, solid quarter for Learning. Same trends here, as you've seen before. The net sales decrease in Spain, of course, on the profitability, having the bigger negative impact. And we continue to see that we are supported by lower paper cost and the price increases that I mentioned in the other learning content markets also support the earnings.

If you look at the full year '24, we expect the margin to be relatively stable versus '23. So similar message as we gave at the half year results. And again, the main impact there is the lower curriculum cycle in Spain.

And if I give a little bit more color on that for quarter 4, what is still there in the Learning business, that's particularly in some of our markets, most notably Spain and Italy, the returns that happened. Of course, we have provided for that with the latest information we have, but that's always still a little bit of the uncertainty in those markets.

Let's zoom in on Program Solar. That remains firmly on track, as you can see here as well, with all streams continuing to perform well and deliver what we want to do. Most notably, we have -- are doing a very tough second reorganization round in Spain that we announced also in quarter 3.

And I would like to highlight that, in the financial numbers that Alex will talk about, you therefore see the IAC booked for that in this percentage that is not included yet. That will happen in quarter 4 because the discussions and negotiations with, for example, work council and unions are still ongoing. So that's a little bit of how you interpret these numbers.

For the full year, we expect to continue to be on track and therefore, materially have made all the key decisions for Program Solar, that then will support initially, as I've mentioned before, the cash flow, but then after that, of course, also our operational result.

Let me now zoom in on Media Finland. So if you look at the quarter 3, there were two things there, the element of the divestments, that I highlighted already for the first 9 months. But between quarter 2 and quarter 3, you might recall there was also an element around the events, so more events in quarter 2 than in quarter 3, if you compare it with the previous year.

The trends very much continue to be the same, which is good development on the subscription sales, particularly the digital subscriptions, Ruutu+, but also digital news and features, and those are solid performances on the top line. The advertising sales, the trends there no surprises, the growth in digital being offset by the decline in newsprint and TV.

Events, I already touched on, with a bit of the phasing effect. Overall, the events year has been, of course, a relatively small part of our business, but has performed in line with our expectations. And also here, good to realize impact of portfolio changes in the quarter, EUR 3 million. For the first 9 months, it was EUR 8 million and it will be EUR 10 million for the full year.

If you look at the earnings, we saw a slight improvement compared to last year. Same drivers there that you can see here. Continued growth in digital subscription sales, that's more than offsetting actually the decline in print. So that's an encouraging sign. The growth in digital advertising sales is offsetting the decline in print. And if anything, we see both of those elements actually being more pronounced, i.e. the growth in digital advertising is slightly higher than we may be expected, but the decline in print also remains at quite a high level. And as I mentioned before, we see customers -- And we work with customers as well to actively make that switch to digital and that is also a long-term in our benefit.

Good to mention here as well that the lower paper costs have, of course, two aspects, the price and the volumes. There's still a bit of both there. But increasingly going forward, it's mainly volumes because the prices have now come down and that already happened also in similar period last year. So you now see the pricing being more stable, but the volumes, of course, continue to come down based on the move to digital.

And we reconfirm that for the fourth quarter, and therefore, more or less for the second half of the year, we see earnings to be -- expected to be similar to quarter 4 2023.

Few words additional on the outlook. You see the numbers here. Again, the EUR 1.32 billion to EUR 1.34 billion with regard to sales, the EUR 170 million to EUR 180 million for operational EBIT, in both cases, the higher end of our original guidance. The two key things remain the same as well, which is we continue to see the advertising market in Finland to decline slightly for the full year and the other economies to be relatively stable.

On the Learning side, I also mentioned that what is happening in quarter 4 is mainly around some of the returns in markets, especially like Italy and Spain.

When you look at Finland specifically with the advertising market, then we don't -- still don't see many signs that the market is improving. So despite interest rates coming down, we do not see that reflected in a more positive situation in the advertising market, and that's also why we are continuing to highlight the full year decline expectation.

So with that said, I would like to hand over to Alex, who can talk you through a bit more of the financials.

[Alex Green, executive]

Thank you, Rob. Good to be with you here today. With the financials, let's start off with the operational earnings for Q3. Now as you heard, on a Learning -- for Learning on a year-to-date basis, the operational EBIT was relatively stable. But it's here in Q3 we see where the impact of Spain really hits, with the highly profitable sales being a lot lower this year versus last year. This is slightly offset by growth in other markets, particularly in Netherlands and Poland, and also the lower paper cost, which had about a EUR 4 million positive impact Learning in Q3 specifically.

Media Finland, the operational EBIT, as you saw, is relatively stable. Again, lower paper costs adding about EUR 2 million to EBIT, although a lot of that being volume rather than price. And then here the growth in digital subscriptions and advertising slightly more than offsetting the decrease in print. The other [ and ] elimination line, there is a slight change here year-on-year. But overall, that is timing, and in a full year basis, the 2024 costs expected to be similar than 2023.

Moving to the key items from the income statement. The overall EPS for Q1 to Q3 is increasing. There are two notable items here to talk about in the IAC line, as mentioned earlier. So firstly, we have a EUR 27 million impairment linked to the distribution business in the Netherlands. Now this is the time of year when we do our annual impairment review for the full amount of goodwill and intangible assets on the balance sheet.

So with the high season over in learning and with us updating our long-term strategic plan, we have the optimum amount of information to look at those impairments. And so, out of that came this EUR 27 million impairment. This is connected to the discontinuation of the low-value contracts, which drops the revenue in this quarter by EUR 28 million year-on-year, and we expect that drop to continue in '25 and '26.

So the calculation we do looks at the revenue profile and the value coming for that over the years in the future, and that led to an impairment of the value on the balance sheet to the tune of EUR 27 million.

In addition, here, we see the restructuring costs related to the second phase of the restructuring in Spain. This was announced in Q3. And the conditions of the announcement were sufficient to trigger the need for a provision in the books of EUR 12 million. This is being worked on, negotiated through Q4, which is why, as Rob said, you don't see it in our Solar chart, taking us up to the 80%. That will happen in Q4. So this will be completed in Q4, but the provision is done at this point at the end of Q3.

Looking at net financial items, relatively stable in Q3. Overall year-to-date, it is higher with the net -- the average interest rate rather being around 5% this year in Q1 to Q3 versus 3.6% last year. So a reduction in debt, as you'll see, but still the interest rates are higher.

Looking at the free cash flow, we have strong improvement year-on-year in free cash flow going up to EUR 77 million. Higher operational results coming through, particularly in Media Finland being accompanied by the active working capital management that we've improved over the last couple of years, leading to faster collections, earlier invoicing in a lot of cases and also lower inventories across the units with the higher cost of capital.

We're also having lower investments year-to-date, both in [ pre-pub ] costs in the Learning business and partly driven by Solar with the changes we've made there, but also in Media Finland with lower investments in TV programming rights. And this is countered by the net of the higher financing costs with slightly lower taxes.

So these levers are generating a strong position year-to-date. Some of them are timing and will reverse a little bit. But these levers will still lead us to have a stronger cash flow this year rather than last year.

The second installment of the dividend was paid in September, and we will now pay the third installment of EUR 0.11 a share on the 12th of November.

Looking at the net debt chart and our leverage, so good progress in deleveraging on the balance sheet, as we talked about at the Capital Markets Day about 1 year ago. So net debt significantly lower at EUR 616 million, versus both, the June point where it tends to be at its highest in the year and also versus last year where it was EUR 691 million. This leads our leverage to improve to 2.4, our net debt over adjusted EBITDA leverage 2.4, so well below the long-term target of 3. And our equity ratio is close to 41%, which is in the middle of our long-term target range of 35% to 45%.

And finally, a chart to show our -- maturity profile of our external debt, where we've made some changes this year and improved that maturity profile. So first of all, within Q3 on the 5th of September, we issued EUR 150 million social bond, which was the first social bond in the Finnish market. We're very pleased with how that went with the oversubscription enabling us to get a very competitive rate. The social bond aspect of it, this is the fact that we are going to use the money to finance or refinance expenditures related to education, related to learning, improving access to essential education services.

The refinancing part, we used some of the funds to repay the Santillana loan as well. That's one thing. We also extended the maturity of the EUR 300 million revolving credit facility to November 2027 with the second and final extension option. And we also extended the maturity of our EUR 100 million term loan that [ we ] see on the right there, which is now extended to 2027.

So a much improved maturity profile of the external debt. And our focus on ESG is also leading us to get improvements in a number of our ratings and taking us up to industry-leading levels. So the ISS going up to prime B-, earlier C+ and the S&P Global to 51, which is also an increase following a lot of the hard work and the passion that we see in the company around ESG and the increased reporting that we're doing as well.

With that, I'll invite my colleagues back to the stage so that we can go through the Q&A process.

[Kaisa Uurasmaa, executive]

Thank you, Alex. Thank you, Rob. And we are now happy to take your questions. So first here at Sanoma House, please, Pia from Carnegie.

[Pia Rosqvist-Heinsalmi, analyst]

Regarding the distribution contract, so just to clarify, was it EUR 28 million impact for Q3 or for the whole year?

[R. B. Kolkman, executive]

That was the -- EUR 28 million was the Q3 impact. But that -- because most of that business comes in, in Q3, it's similar to the full year, basically.

[Pia Rosqvist-Heinsalmi, analyst]

And then for the remainder, you alluded to '25 and '26 as well. So how much of a decline should we expect then for the next years?

[Alex Green, executive]

Yes. If you look at that, we continue to expect that some of the low-value contracts will stop, right? So we think towards '25. It's always difficult to predict exactly, but a similar amount could happen in '25 as well that we now see maybe slightly lower. But very much [ firmly ] keeping in mind, of course, these are very low-value contracts. In some cases they're at more around the breakeven. So it's all about the top line. That's not an impact on the bottom line.

[Pia Rosqvist-Heinsalmi, analyst]

Then to clarify the impairment of EUR 27 million, I think -- how much is still left -- how much value is still left on the balance sheet?

[Alex Green, executive]

Well, I mean, overall, as a company level, we have over EUR 1.5 billion left on the balance sheet relating to goodwill and intangible assets. And as I said, we do a full review of that at least annually, which we've just done. And the only significant impairment coming out of that is the EUR 27 million one. And so, no other risks or no risk changed outside of the -- outside of what we're showing there.

[Pia Rosqvist-Heinsalmi, analyst]

Okay. But the EUR 27 million, just I try to understand, so is it related to -- is it goodwill? Or is it the other intangibles you are writing down?

[R. B. Kolkman, executive]

The EUR 27 million is related to [ an other ] intangible asset. I mean, the goodwill is part of the whole goodwill of the Learning business. This is related to another intangible asset related specifically to the Iddink business that was booked there on the acquisition at a time when the revenue levels were expected to be higher.

[Pia Rosqvist-Heinsalmi, analyst]

But can I find this in your statement? I mean, how much of these other intangibles are still left to be possibly under [ review ]?

[Kaisa Uurasmaa, executive]

I can come back to you on how the total EUR 1.5 billion is split between.

[Pia Rosqvist-Heinsalmi, analyst]

Okay. Then I would still like to understand more about sales in Netherlands and Poland. They have been surprisingly strong this year. So is it really -- is it price increases that mostly is driving that? Or is there also a volume increase?

[R. B. Kolkman, executive]

There is a small volume impact as well and there is pricing. And I think if you look at the two markets, they're quite separate with its dynamics. So the Netherlands on the Content Learning, you see really continuous good, solid growth, reflecting also that we have a strong position in that market and continue to build on that. So there's also a small volume aspect there, meaning, we still win schools there with our products as well.

In Poland, there's also a bit of an element of a curriculum phase, much smaller, but that is year-on-year noticeable as well. So Poland, as you might recall, still has much more of those fluctuations. This was a little bit of an up there, but the majority is around the Netherlands.

[Pia Rosqvist-Heinsalmi, analyst]

And then, Spain seems to be doing slightly better than expected. As you noted, what's the driver behind this? Is it also pricing?

[R. B. Kolkman, executive]

I think in Spain, it's good to realize that it's very difficult to predict exactly when you're at the end of a curriculum, what will happen in quarter 3 in this case. So you're correct, if -- I mean, still a significant decrease, of course, that's very noticeable. But it is, let's say, at a slightly better end than what we saw.

At the same time, I would like to highlight, if you look at any of the quarter 4 uncertainties left, then of course, the returns in Spain is one of them, right? I mentioned that. And we do always our best to calculate that appropriately, but that remains then the one uncertainty in that market. But overall, we're happy to see that, of course, our strong position that we created as a result of the curriculum change is still very much there, but of course, on a much lower level at the end of the curriculum.

[Kaisa Uurasmaa, executive]

Further questions from Sanoma House? Yes, Sami from Danske, please.

[Sami Sarkamies, analyst]

I will continue on the [ heating ] topic. The first one would be that, you're doing the EUR 27 million impairment now in the third quarter. Okay, it's based on voluntary discontinuation of a business that has been loss-making. So why are you doing the impairment now and not like 1 to 2 years ago when you realized that this is not going to be a profitable business?

[R. B. Kolkman, executive]

Maybe first on the voluntary part or not, right? So what happens in this business is that contracts come up for tender. And at that point, we still tender because we have been in the Dutch market for a very long time. We continue to play an important role in that market, and that means we also take these tenders very seriously.

However, we do think that the market structurally needs to change its pricing level in that. So it's not like just voluntary stepping out of it. It's also a result of a tender process where the way we bid, we currently are not winning those tenders. That is because we really believe that market needs to change.

And then I'll leave over to Alex how the process works for the year.

[Alex Green, executive]

Yes. And in terms of the impairment, this is related to an other tangible asset that is depreciated over a long period of time. And in reviewing that every single year, we look at the future values of the revenue streams and the value coming from that and create a calculation to see if that value in the balance sheet and the sort of cadence of depreciation of it, or amortization, is actually supported by the future revenues.

And having -- and so it's a point when you update your strategic plan and do it in detail and get the results out. That gives you the right information to make an accurate assessment. We do that every year. And as the discontinuation has sort of accelerated into this year, that's given updated information that's led to this calculation. So we did the same review last year and didn't have the same result.

[Sami Sarkamies, analyst]

Okay. And the second question on the [indiscernible] would be that, how much of this distribution revenue is left? You acquired the business in 2018. It was with EUR 140 million of revenue. So how much of that revenue was distribution? And what is the level today?

[R. B. Kolkman, executive]

No. I think if you look at that business, then that has come down already a long way. So from a derisking point of view, I think a few years ago, it was more this particular part around the EUR 90 million level. We're now more in the EUR 50 million to EUR 60 million range. And as I indicated earlier, we expect that to come down in the next couple of years more towards the EUR 30 million to EUR 40 million range. So, it really shows you that kind of derisking of that part of the business.

Longer term, let's be very clear, we think there is a real service to be given to these -- to the schools. So the change in business model we still see happening in the [ outer ] years, let's say, from '26 onwards. But that, of course, is hard work together with the schools and to see how we can make that work.

[Sami Sarkamies, analyst]

So was the EUR 90 million just the starting level? Or was that the situation a couple of years ago?

[Kaisa Uurasmaa, executive]

A couple of years ago, yes, exactly.

[Sami Sarkamies, analyst]

Starting level?

[Kaisa Uurasmaa, executive]

Of the EUR 140 million, that, of course, includes the net sales of the digital platforms as well. So it was not fully distribution business.

[R. B. Kolkman, executive]

That was a bit higher than that but...

[Sami Sarkamies, analyst]

EUR 120 million?

[R. B. Kolkman, executive]

[ A bit ] less.

[Kaisa Uurasmaa, executive]

Less. Yes.

[Sami Sarkamies, analyst]

And also curious to find out how much book value there is left for the remainder of Iddink distribution business? But maybe a question, do you think there will be future write-downs that, if you lower the business next year, will that also be triggering write-downs?

[Alex Green, executive]

So, as I said, the calculation is done by looking right now at our strategic plan over that period, which is up to 2029. And so, as Rob has indicated, we kind of have a drop and then we're in a position to win tenders and build that up again. So we have a profile that equates to this right impairment, and therefore, the balance sheet value. Sticking to that plan and there's no reason why we wouldn't, then that stays the same, right?

If there is external factors or something changes, that means that next year, the world is different in that business, then we will need to relook and adjust. But that's the strategic plan and that's what we intend to stick to.

[R. B. Kolkman, executive]

And maybe from a business point of view, just to give a little bit more color. As I mentioned in my presentation, we do see this being a tough market also for next year and the year after. So we have very low expectations of winning contracts in the short-term.

[Sami Sarkamies, analyst]

Okay. Then moving on, but still within learning, when do you think you would be in a position to make additional bolt-on acquisitions?

[R. B. Kolkman, executive]

We're constantly looking for those. I think we have -- We are confident that if the right acquisition comes along, we also will find the right way of financing it. In the short-term, of course, we have indicated we have the room to do acquisitions to a certain level. And we're particularly focused also on the in-market consolidations in some of our markets. But also, if the right bigger acquisition were to come along in a new market for us, we will, at that point, really make sure that we're in a position to make that happen as well.

[Sami Sarkamies, analyst]

Okay. So for example, if we think about the Solar Program, it wouldn't prevent you from doing larger deals?

[R. B. Kolkman, executive]

No. It does not prevent us.

[Sami Sarkamies, analyst]

And then finally, on the Media business. If you look at the Finnish macro, it's not great at the moment. Is there a risk that the advertising media market could still get worse before it gets better someday?

[R. B. Kolkman, executive]

Well, good question and not an easy one to answer. I think at the moment, I see -- what I said earlier as well. I don't see many indications that things are getting better, although at a very high level you would start to think, okay, that could happen, but it's not visible yet, certainly not in the -- what we see in the advertising there.

The trends that I highlighted are still there. I mean, of course, over time, you would also expect that with the macroeconomics and the lowering of the interest rate, that would, at some point, have an impact on the Finnish advertising market as well. At the moment, there are very little signs to show that.

[Kaisa Uurasmaa, executive]

Please, Sanna from Nordea.

[Sanna Perälä, analyst]

Yes. Maybe one brief question regarding the rationale behind your guidance, if you could elaborate that further? Given that the new guidance was now narrowed and -- for example, if we take the midpoint at EUR 175 million, that would indicate actually that the Q4 in terms of operational EBIT is going to be even lower than Q4 and it's going to be stable at best if we assume it's going to be EUR 180 million. So if you could elaborate more that, what are you expecting to see in Q4? Is it more like seasonality issues or something else?

[R. B. Kolkman, executive]

No, I think the core element there is around the advertising market in Finland. And you are absolutely correct. That is a very difficult one to predict. If you ask me what has the biggest potential for swing, it is that one. And if you purely look at how things are going as per today, you could say that, like logic would dictate, as you say, the EUR 175 million to EUR 180 million. However, we see those kinds of uncertainties what makes us really clearly say the outlook is the EUR 170 million to EUR 180 million. The EUR 175 million to EUR 180 million is when you expect things to continue to be more or less the same.

[Kaisa Uurasmaa, executive]

And at the moment, we don't have any further questions from the Sanoma House. So do we have people on the telephone line? Yes.

[Operator]

[Operator Instructions]

[Kaisa Uurasmaa, executive]

There should be someone on the...

[Operator]

There are no questions at this time. So I hand the conference back to the speakers.

[Kaisa Uurasmaa, executive]

Okay. Thank you. We do have questions on the chat. So let's go there. I continue from Poland, which was discussed already. So you said that now there is a small uptick still in the curriculum cycle this year. How do you expect that to develop going forward?

[R. B. Kolkman, executive]

Yes. The Polish line is more or less in line with what we presented also in the Capital Markets Day. So I think the up in Poland is more in '26-'27, not in '25.

[Kaisa Uurasmaa, executive]

Yes. And then, continuing on the free cash flow, and what are the expectations regarding full year free cash flow? Should we expect the year-to-date improvement rate to apply for the full year as well?

[Alex Green, executive]

So, as you say, we had a strong -- as I said, we had a strong year-to-date free cash flow result coming from results, lower investments and part of which coming through from the Solar Program. So those levers will leave us higher at the year-end, but some of it is timing.

So we -- although we expect to be higher, it won't all flow through from this particular point. And I will also add that in the last quarter, we still have EUR 220 million roughly of receivables to come in. So it's quite hard to know exactly where that will land and the timing of that can influence that number. So we're not giving an accurate forecast on that point. But we know that those levers will lead us to have a higher cash flow in '24 than in '23.

[Kaisa Uurasmaa, executive]

And a bit related question, because one of the reasons for higher cash flow now was lowered investments in TV program rights, so how sustainable is the lower investment level there?

[Alex Green, executive]

I think that -- I mean, that's one of those items which is heavily dependent on timing. So there will be things that switch between Q3, Q4. So that statement year-to-date does not necessarily follow, [ that ] will there the full year.

[Kaisa Uurasmaa, executive]

And then one question that is reflecting a bit back to the Capital Markets Day that was held 1 year ago. At the Capital Markets Day, you shared an expectation of stable EBIT margins in Learning in '24-'25. Would you agree that, that looks conservative today?

[R. B. Kolkman, executive]

I think, if I look overall at what we presented at the Capital Markets Day, then, there's a few things to note. Of course, some things have changed. I mean we talked about the Iddink Learning Materials expectation there. We also have done a few divestments. So there's a few things that have changed on that top line.

We compared to the Capital Markets Day, ended actually the year then also slightly better on the margin, particularly in Learning, and we now see that stability to continue. I think if I were to look forward, the real change is '26. So I would not expect that to have a bigger impact on '25.

Clearly, with the core elements being, if the media would improve on the advertising side, that would really be a different situation than what we currently see. But on the Learning side, I think the trends there on the curriculum changes really having an impact in '26. And then we fully benefit from Solar, that remains firmly the case.

[Kaisa Uurasmaa, executive]

Thank you. I don't think we have any further questions on the chat that would have not been already discussed. So with this, I would like to remind you of our next results publication, which will be for the full year results '24 on 11th February next year.

And with this, we conclude the presentation and the Q&A. Thank you, all, for participating. And if you continue to have questions afterwards, please be in touch with us at IR. Thank you, all.