Good morning, all, and welcome to Sanoma's full year result 2023 presentation. My name is Kaisa Uurasmaa. I'm heading Investor Relations and Sustainability at Sanoma, and it's my pleasure to welcome you all here. In 2023, our net sales grew, and operational EBIT was driven by strong performance in learning. Today, we have the President and CEO, Rob Kolkman, and CFO, Alex Green, who will tell you more about this. After their presentation, we will have a Q&A session, and we will first take questions from the audience here at Sanoma House. Please use the microphone. After that, we will hand over to the telephone line, and as a third option, you can also use the chat function in the webcast platform. The whole event, including the Q&A, is recorded, and the recording will be available on our website shortly after this event.
With this, warmly welcome, and I will invite Rob to start the presentation. Please.
Thank you very much, Kaisa, and good morning, everyone. Thank you for joining today in person as well. Great to see you all. What I would like to do today is give you, for the first time, and that's my pleasure, the overall results of Sanoma for 2023. As Kaisa already highlighted, I think this is really driven by the net sales growth that we have seen in learning, the really strong performance there. Let me just pick a couple of the core items of it. We ended the year at EUR 1.39 billion in revenue. That was that, as expected, about 2% organic growth, and we ended the operational EBIT for the year at the higher end of our updated guidance at about EUR 175 million.
Also, particularly pleased to see how the cash flow developed for us for the full year, ending up at EUR 105 million, taking us also for our Net Debt over Adjusted EBITDA to 2.8, which is below our long-term target of 3. If you look at overall the picture for the year, then the growth was really driven by learning. The 17% growth that you see here. Organically, the 6%, but also, of course, the Italian acquisition now being included for the full year. The Operational EBIT was driven by learning, but was more than offset by the impact of the lower advertising sales that we saw in Media Finland and also the cost inflation.
There's no change there compared to what we already indicated in the capital markets there in quarter three, but that's very much the trend we've seen for the full year. I think it's good to mention on the cash flow that 2022 had that one-off positive impact of the Italian acquisition to do with the working capital. So if you compare really like for like, we've seen a strong improvement in the cash flow overall for the business. And as I mentioned, the leverage improved to the 2.8. A core element going forward is around Program Solar, and in learning, we are firmly on track to reach the targets there and to also achieve the 23% in 2026.
I'll talk a little bit more about that, also to show you how we are reporting on that and updating you on that on a quarterly basis. Everything considered, and also firmly taking into consideration the dividend policy, the board proposes a dividend of EUR 0.37 per share, which is unchanged over last year and corresponds to about 58% of our underlying free cash flow, which is within that 40%-60% that we indicate in our dividend policy. I will come back to the outlook in more detail, but the core elements are that we expect our revenue to be between EUR 1.29 billion and EUR 1.34 billion, and also the group's operational EBIT, excluding PPA, in the range of EUR 160-EUR 180.
Let me first zoom in on learning a bit, and it is very much building on what you've heard us say throughout the year and also in the Capital Markets Day. So overall, that strong net sales growth of 17%, if you break that down further, we actually saw the 6% organic growth, and within that, 8%, 8% growth on the learning content side. So that's really the core driving factor here. Spain very much continues to be the driving force there with 18% growth. That was really the final phase of the new curriculum, the LOMLOE. But also we saw good growth in Poland for the year, driven by so minor curriculum changes, but also, some good, digital sales that we saw there throughout, quarter four.
The Netherlands continues to be the story of two different parts, which is continued strong growth in the learning content sales, but that is more than offset by the changes we are making on the distribution side in that business. And that's very much the discontinuation of those low-value distribution contracts we talked about as well, before. That very much continued in 2023, and I will touch on it later for 2024 as well. The other thing I'm pleased to report is that the implementation of the price increases, the above average price increases, we can now, with the full year behind us, say that that was a successful implementation across our markets.
You might recall that in the quarter three, we highlighted that, with regard to particularly countries like Italy and Spain, you always have in quarter four, some more returns still to come. And those returns ended up in line with or actually even slightly better than what we forecasted at the time. Also contributing to that good growth. And as a reminder, the Italian business contributes now EUR 105 million in sales, obviously now for the full year, compared to the EUR 31 million in 2022. So all that links directly to what you see here on the earnings growth, which I would qualify as a solid earnings improvement. So clearly, the growth in the revenue, particularly in Spain and Poland, drives the improvement in the profitability.
But overall as well, we have seen strong organic growth on the back of that successful implementation of the price increases as well. And as a reminder, the Italian business had now that solid contribution, be it at a lower profitability level than the other learning content businesses, because it's more focused on secondary education. And maybe as a reminder, if you look at the margins, we are now back to a proper full year comparison compared to 2022. And the reason was that in 2022, we saw a lot of sales being phased, delayed, effectively, from quarter three to quarter four, to do with Spain, and also to do with the distribution in the Netherlands being somewhat delayed. That is now no longer the case. It's more normalized pattern that you see in 2023, and we also expect that to continue going forward.
So that's with regard to the results. If you then look at Solar, and we, of course, spend a lot of time in the capital markets today, going through the core components, and as a reminder, I've put them on the left-hand side here, the four key areas: the organizational optimization on the back of the post-curriculum renewal, optimizations in Spain and Poland, but also across the other businesses, the publishing process improvements, and very much also the harmonizing of our digital platforms, and particularly that move to Poland and Spain of our of our development capacity, and then quite a lot of other optimizations as well. So what we've tried to do on the right-hand side is to give feel for where we are when you think about our run rate of savings.
So the decisions we have taken to get to the EUR 55 million operational EBIT improvement in 2026. As you can see here, that line is not a smooth line because it really is a lot of it happening in 2024 over a certain period of time. So decisions taken in quarter one, quarter two, and of course, also very much in quarter three. So we'll keep you updated on that throughout the year. For now, the core message there is that we have a solid, good start on Program Solar, and we are about at that 30% of run rate savings if you were to see what the impact is in 2026. So that's with regard to learning. Let's now go to the media side.
There, the trends that we've seen throughout the year have really continued, which is the advertising sales declining by about 7%, mainly due to newsprint and TV, which was in line with the declines we saw there in the market. And we also saw that the digital advertising sales continued to grow. If you look at, logically speaking, then the share of the print advertising also decreased to 8%. If you look at the subscriptions, they grew slightly overall, which is partly to do with successful implementation of price increases, and also, we saw a small increase in the subscription base overall.
And if you look at the digital subscriptions, as it highlights here, the overall digital subscriptions went up with 16% year-on-year, specifically also driven by Ruutu+, which was a strong performer there. And the other sales, as it highlights here, were overall stable, and of course, particularly on the events and festival business, that already happened much earlier in the year. All this, of course, had the impact on the lower earnings that we have been highlighting throughout the year. So that, for us, ended in line with the expectations, and the majority of that was to do with the lower advertising sales. And we also saw the personnel cost increase in line with expectations due to the salary inflation and also the bonus provisions being normalized.
All that partly mitigated by the ongoing cost containment actions and also slightly lower paper printing and the distribution cost. So with all that considered, the board proposes a dividend of EUR 0.37 per share, as I mentioned, unchanged, and very much in line with the payout between 40% and 60% of our free cash flow. You can see here how that is split over the three payments, which is again the same as we did in this year. Let me then move to 2024, and first of all, paint a bit the picture on how we look at 2024 and the key factors influencing that, which you can see here, split again in Learning and Media Finland.
So on the Learning side, we expect the comparable net sales to be impacted by two key things, which is the lower cycle in Spain, very much in line with what we show you on the sort of expectation chart around curriculum changes. This will now go from that height to a significantly lower point, but that will be mostly mitigated and compensated by the continuing good growth in the other Learning content businesses. And we will continue at the same time with stopping the low-value distribution contracts in the Netherlands. So that process of trying to really make the necessary changes in that market on the distribution side, we will continue to do. And also good to mention on Learning, the smaller divestment of the German exam preparation business that we announced in January is now factored in to these...
These numbers and these guidance. So that overall results in the lower reported net sales expectation and a relatively stable margin, which you might have seen in the full year results, is slightly higher for 2023 than we indicated at the Capital Markets Day. If you then look at Media Finland, there we expect the comparable net sales to be relatively stable, which for us is in line with how we now currently look at the Finnish economy, also expecting it to perform relatively stable. This is, of course, one of the key, let's say, uncertainties that we see when you look at 2024, is the, the view, particularly on the advertising sales, for the second half of 2024 is the, is a bigger unknown there.
We expect the subscriptions to continue to grow, modestly, driven by digital, so very much the continuation of the trends we have seen, driven again, also by the digital of Ruutu+. On the advertising sales, there you see a slightly lower advertising sales expectation for us and a smaller portfolio on the live events. And of course, all that will continue with efficiency improvement measures that we are taking all the time, across the media business. Also in media, we announced one divestment in January, Netwheels, and again, that has been factored into our guidance for 2024. And overall, for media, that results in our view of a slightly lower reported net sales and a modest earnings and margin improvement that we see there. And for both businesses, the long-term targets remain very much unchanged.
If you look at that, of course, that's very important around the Learning, getting to the operational EBIT margin of over 23% from 2026 onwards. So all those considerations are factored into what you see here for the outlook for 2024, the EUR 1.29 billion-EUR 1.34 billion, and the group's operational EBIT between EUR 160-EUR 180. If you summarize how we then look at the markets and the economies in that, then you see that we expect the advertising market in Finland to decline slightly, a bit less percentage-wise than in 2023, but still decline, and the overall development in all the other markets and overall performance in Finland to be relatively stable. That's with regard to outlook for 2024.
I would like to finish my part with reconfirming two key points that we've made in the Capital Markets Day, which is the first one, if you look at our midterm focus, the three key elements are firmly in place. The focus is around increasing the profitability of Learning and Media Finland, with all the elements that we've talked about, including, of course, very important project, program Solar. The growing organically, all kind of different measures there, and in the midterm, that focus on the smaller in-market acquisitions. On point three, deleveraging the balance sheet and finding the right balance between doing that and also really being an important part of our story being the dividend payout as well. That's the combination there. Very much in line with what we said before.
If you look further ahead, 2030, then the growth ambition and long-term financial targets are very much unchanged, which you see repeated here around to get to the over EUR 2 billion overall in net sales, and mainly, of course, driven by the Learning business. So that's the longer part, and all the steps we are taking now in the midterm will also enable us to do it. At the same time, if something were to come up now, that is really adding value for us, also, if it's bigger, we would, of course, also seriously look at that. And then the long-term targets remain unchanged on the financial side. So with that said, I would like to hand over to Alex to give more background on the financials.
Thank you, Rob, and great to be here with you today again for this full-year results presentation. Let's start with the Q4 operational EBIT, which for Q4 2023 was at EUR -27 versus EUR -2 last year. But starting with Learning, and as Rob pointed out earlier, there is a big phasing story here with last year, a lot of value and a lot of deliveries in Spain and the Netherlands delayed to Q4, whereas this year it's a much more normalized profile of the sort of quarters in terms of the Learning, the Learning sales. So that's what is the vast majority of that different. There is also some sales mix impacts in Poland with their very good late sales this year.
If I look at Media Finland, this is again consistent with the full year, the story of the lower advertising revenues flowing through to margin, together with higher personnel costs due to the salary inflation. Here in Q4, particularly, also the more normalized bonus provisions, and also the higher TV program costs driven by the recent Elisa deal that we had. And at the year-end, we also go through a lot of our TV broadcasting rights to make sure we've got the right valuations on the balance sheet, which led to some adjustments there as well. This offsetting the lower paper costs that we see coming through and also the continuous cost containment activities in that business.
In the other area, and then across the units, the more normalized bonus provisions has had an impact overall here. If I move on to free cash flow, as you saw, EUR 105 million, so a solid free cash flow generation for 2023. 2022 reported 112, had the one-off impact of the Pearson acquisition, and so the underlying free cash flow was 65. So you see a significant increase here. A lot of it driven by this active working capital management, the focus we have, and particularly at year-end, on earlier billing, better collections, but also on lower inventory levels.
So in a high cost of capital market, having those inventories only what you need is much more sensible from making use of our cash, and so we've brought down the inventory levels considerably there. That, together with lower tax payments and lower capital expenditure, is offsetting the higher financing costs, which you'll see later due to the higher interest rates, the different level of Media Finland earnings, as well. So a good result for us, and a little bit better than we'd expected, in terms of the success of those programs to get to the EUR 105 million. Looking forward to 2024, we expect to maintain that level of cash flow generation with a number of factors offsetting each other.
And so the lower content creation investments, because we have no major curriculum renewals in learning, offsetting the, sorry, and also maintaining that high good level of working capital management, offsetting the higher further increase in financing costs as we are refinancing the EUR 200 million euro bond, which matures in March, which, coming from a few years ago, had a very advantageous cost interest rate. Obviously, we will have a very competitive rate going forward, but it won't be at that levels. And then also offsetting the Solar IACs that we talked about at the capital markets then before, which will be in 2024, which partly mitigated by the beginning of the benefits of that program.
And if you remember Rob's slide about getting 80% of the actions done to hit the 2026 margin, you see a lot of that's coming in the second part of this year, 2024, and that will start impacting the cash as well directly. Leading to increases further, if I move towards 2025, past the Solar IACs, and then 2026 with the higher margins, as we talked about in the Capital Markets Day, helping the going on that path of deleveraging. So moving to the leverage, we end 2023 at 2.8, so below our target of 3, with net debt being coming down to EUR 640, lower than last year and also lower than Q3, in line with the seasonality of the business.
Equity ratio, 42.5, so well within our, our target. Here you see net financial items, full year at EUR 31 million versus EUR 13 million last year, with interest rates average, 3.6 versus the 1.5. And then as always, the Hybrid Bond is, is booked as equity, so not in these net debt or, financial items numbers as its debt, and also the interest rate is booked to equity as well. And finally, a word on our refinancing. So as I've mentioned, we have the EUR 200 million euro senior bond maturing in March, which we will, refinance, with the new EUR 100 million euro term loan that was signed in October, and then also, with our existing funding facilities following the, strong cash generations.
In addition, we also extended the EUR 300 million revolving credit facility by a year to November 2026. We also have another option this year to extend it further. And as you see on the graph, we have a further EUR 100 million maturing at the very end of this year in term loan, and we will be working through this year on refinancing that with a more extended, longer-term finance as well. So with that, I will welcome my colleagues back to the stage to go into the Q&A session. Good.
Thank you, Alex. Thank you, Rob. And we are now ready to take questions. We will start here from Sanoma House, so please use the microphone. If we start with Nikko Ruokangas from SEB, please.
Yes, great. Thank you, Nico Ruokangas from SEB. I have a couple of questions. First of all, looking at your sales guidance, so how much of a price impact do you include in this guidance? How much do you expect prices to move in 2024?
Yeah, if I first comment on learning, we do expect to continue above-average price increases, which, for the coming year, we expect to be about 4%-5% on the bits that are relevant there, which is mainly, of course, the learning content side. On the media side, it's not a specific percentage, but of course, we continue to look at optimizing the price levels there. But it's not, as such, a specific percentage because it differs really per product.
All right. Understand. Then moving on to cash flow this year, so could you comment your expectations for Free Cash Flow developments this year compared to 2023? So, we expect to be at the same levels as I walk through the different positive impacts and the negative impacts. So we will see the IACs for Solar, the larger part of the. We announced EUR 45 million overall, and a large part is still to come. And the increased financing costs with the interest rates and the new bond sort of hitting into it. But maintaining the higher, the better working capital practices and slightly lower investments will keep us at roughly the same level.
Then once we get past the Solar IACs into next year with the higher margins, this will increase the cash flow in the outer years and helping our deleveraging.
Understand. Then last one from me. So you indicated that you expect the advertising market to decline slightly this year still. So, could you open your expectations? How do you see that coming now? Do you expect any kind of recovery or stabilizing in H2, and how good visibility do you have currently on the market?
Well, you phrased that well. The visibility is, of course, the key element here. So the second part of the year is, of course, the very difficult one to predict. Overall, our working assumption is that the overall market in Finland, the economy is more stable, but we still expect a slight decrease in the advertising. Clearly, the second half of the year plays a very important role in that. That's where the visibility is less.
All right, understand. That's all for me.
Thank you, Nikko. Next, we will have Pia Rosqvist from Carnegie.
Yes, hello. Thank you for taking my question or questions. The distribution sales in 2023 and now your plans for 2024, can you quantify the amount you are expected to exit?
Yes. So, you know, referring to the Dutch distribution, where we are coming out of low-value contracts, I think in 2024, this is going to be, I'd say, roughly in the sort of EUR 30 million, around that sort of level, in terms of what that comes down. So it has a, you know, impact on the sales, but as, you know, a relatively neutral impact on the EBIT side.
As you know, we started it about a year ago, and in 2023, the impact was actually relatively small. So, it was around EUR 5 million only, so it will accelerate clearly going forward.
Yeah.
Good. Thank you. And related to the distribution business, who's taking over these contracts? What is happening in the market when you have decided to exit these contracts?
Yeah, it's a good point. So we're working very closely with the schools on that. So there are a couple of other players in the market where it could go to. But it's also that fundamental shift in model, and in some cases, the schools would do more direct of their own delivery, and sometimes they find other solutions there. For us, the key thing is we want to change the business model of that market. We think that's important, going more towards a fee model, and any school that goes into that direction, we are of course, very much also working with them.
Thank you. Then, two other things. You mentioned a smaller portfolio in live events. What is happening there? I'm sorry if I missed something in Media Finland.
It's mainly to do with the Rockfest festival. That's why.
Yeah, Rockfest doesn't take place in 2024.
Twenty twenty-four.
It's one of the largest festivals that we have had.
Yeah.
Oh, and, is... Why is this?
I mean, that's also to look at. My understanding of it is that is to do with how good could we perform for that festival with the lineup. And the team decided that that would take another year to really properly do that. So that's why it's not happening.
Okay, thank you. Then, to your midterm targets, you, I think the second one is growing organically. We've more seen now the, I mean, events in the other direction. You have divested businesses or are divesting businesses. What are your plans to grow organically? Do we see, will we see this in 2024? Then, your upper end of your guidance range, does this include any assumptions of small bolt-ons, or are they on top?
They are on top, to be very clear on that point. So the acquisitions are not factored in in any, any way. If they happen, they happen, and we'll update accordingly. So to the point of divestment versus growth, I think we're very much focused on the growth side, the changes we have made, and we always will continue to look at our portfolio. But overall, we're very happy with our portfolio, and the focus is on that growth in all these areas that we could go into, whether it's the digital transformation in the media side or when you also look at the curriculum growth that we see, of course, across the learning business.
Thank you.
Thank you, Pia. And then we have, Petri Gostowski from Inderes, please.
Thank you for taking my questions. I have two. I recall you did a lot of work on working capital this year. Are these changes based on your current contracts in learning, so we can expect this working capital to be stronger in the future as well?
Yes. Most of the changes we made to working capital, our operations are able to be repeated, whether it's to do with prepayments in certain markets, earlier invoicing. Those things are structural, and we will continue to do that. We also, you know, work harder at collections and just getting our cash in and reducing our inventory levels, and so those practices will not just continue but, you know, get better as we go forward. So yes, the intent is, as built into the forecast, that we maintain that good level of working capital management.
The next one is on Solar. Am I reading this correctly? If I read it, that it's the run rate of the savings in mid-2024 should be around 50%, so that's what you should expect to have in 2025.
So that particular chart, just to be very specific on what that means, is we're focused on the full margins, the savings that hit us, the 23% margin in 2026, and what is the progress towards that. So that chart indicates that by the end of 2024, 80% of the actions that lead to that margin improvement will be done, and therefore, they're kind of in the bag, if you like. And that's, so that's that progress thing, and we particularly wanted to focus on that, given that a lot of our actions have that delayed impact on the P&L. You know, earlier impact on cash, but because they were about... A lot of it's around content creation, which would be capitalized and then amortized.
And so really wanted to make the point of the actions being done in 2024.
Thank you.
Thank you, Petri. Then we have Sanna Perälä from Nordea, please.
Hi, thank you. I have a couple questions. First, could you elaborate what are the external printing sales you mentioned in the report?
That's to do with our printing facilities that we have, and that also have some third-party printing there. So that's that line.
A follow-up: What is the share of those, for example, in Media Finland?
Ooh, um-
I think we need to come back to you exactly-
We'll come back to that, yes.
but it's, you know, I guess the other sales in Media Finland.
Yeah
they mainly include the events, sales-
Yeah
The printing side.
And then there's the printing side, so.
It's not insignificant, but it's not massive, but we can come back with the exact... It's not top of mind.
Yeah.
Right. Thank you. And then, in Learning, in Q4, the sales in Italy declined year-over-year, and, then again, in Belgium, for example, they increased. Could you elaborate a little bit more of those events?
Yeah. So it's always a bit difficult in quarter, between the quarters, because there is quite a bit of movement, normally between quarter three and quarter four. Overall, that trend that I highlighted was one where we now see a more normalized version of that. So that's also what you, what you see there. It's not easy to say it's exactly pinpointed by this or this. In Italy and Spain, I mentioned, then you can pinpoint it to the returns and what happens to that, but that's less the case in, in those two.
Thanks. And then my last question would be, you launched, an Ilta-Sanomat Extra service-
Yes
was it yesterday?
Yes.
What are your expectations for this service in the future?
Well, I think it's very important that our teams really come up with new ideas to see how we can really help the customer in what they would like to read or what they would like to experience, and I very firmly see this as a great example of it. We are not expecting that to be massive in pure revenue terms, but we do see it's very important from an engagement point of view.
Okay. Thank you. That's all from me.
Thank you, Sanna. And then we have Sami Sarkamies from Danske Bank. Please.
Okay. Hi, thanks. I have four questions, starting from Learning. Can you still help us to understand why you're not expecting a margin improvement this year, even though there will be, you know, tailwinds from the Solar program, and you're also reducing low-margin activities and raising prices?
Yeah, maybe a comment from me, and then Alex, maybe a bit on the numbers. So the core element there is around also what happens in the Spanish market, which is a highly profitable market, and that will come down, partly or mostly offset by the other learning businesses, but the margins are somewhat different there. The other point to mention is, if you look in learning, we also see, of course, the divestment I mentioned of stock. But overall, that's the key, I think. You are correct, that if you look at the distribution side, there's always a bit of margin there, but that's, of course, a relatively smaller part. Maybe Alex?
No, I think you hit the main points-
Mm-hmm
... would take the divestment out, the impact of Spain versus being replaced by sales, which aren't quite at the same high level margin of a large curriculum sale. We also have slightly high, you know, this salary inflation coming in for part of the year as well. But net-net, they are the main points.
Would you be able to quantify that salary inflation in any way, that raw material?
We haven't put a number to that. I think last year we had it at 10% for the full year, full year number. I think it's gonna come in in the first part of this year, 'cause obviously a lot of that came in in the second half of this year, but we haven't put a number on that.
I think what you see there overall, of course, that inflation levels are significantly coming down. You see that reflected in the next phase of the salary change as well.
Okay. Continuing with Learning, can you provide some color on how you expect sales to develop in some of the key operating countries this year?
I don't think we comment on that too specifically, but if you look at the trends that I also shared in the capital markets day, they very firmly are still there. So the biggest one, of course, I've mentioned a couple of times on Spain, and you see continued good growth on the learning content side in the Netherlands, and then you see more stable to smaller increases in the other markets, partly still driven by above average price increases as well.
Okay. And then on Media Finland, you're expecting slightly better margins and result this year, even though advertising sales should still be down. Can you explain how you're able to achieve this? You haven't announced any new cost measures.
No, but the cost measures are, of course, an ongoing part of what we do in media, so I think that's partly reflected in what we are saying here. And also, of course, the growth that you do see on the digital subscription sides contributes to this as well.
Okay, and then finally, on the guidance, I guess we can now assume that you're targeting midpoints, but could you maybe run us through some of the key variables that could take us towards the lower end of or higher end of the guidance ranges?
Yeah, let me comment on that, and then obviously to Alex for maybe some more on the financials. But I think overall, the lower end is very much that uncertainty around the key drivers, right, particularly on the advertising sales, and to a lesser extent, what I mentioned on Spain. Of course, in Learning as well, you see quarter three being very, very important from a seasonal point of view, right? So I think that's that part. And if you look at our performance this year in 2023, then you, of course, also need to take into account the two divestments that we've mentioned before.
Okay, thanks.
Thank you. And then Maria Wikström from SEB, please.
Yes, thank you. Just two, probably quick questions. But first of all, there is some transactions, I guess, I mean, going on in the Nordic media scene. I mean, with Telia divesting the TV operations. So, do you think, I mean, you will be any way involved in these kind of asset transactions or swaps, or how would you call it?
We follow it with great interest, but no specific comments on that.
And then I would like to ask you, Rob, how would you describe yourself as a leader compared to your predecessor?
I think everybody is different, so I'm not going to compare to Susan. I think she'd done a great job over her eight years at the company. I think going forward, the focus from my end is very much also on making sure that the great teams we have in the organization can now really also deliver on these core elements. So really making sure that they have the opportunity to focus on that organic growth that we mentioned, to do the talent development that we need, and also to make sure that we that we really can deliver on the key sort of focus points there. So from that point of view, we also work very closely with Pia and her team on the media side, and the same on the learning side.
So that making sure that the local teams can do the right things is a core element of, for me, enabling great performance.
Thank you.
Thank you, Maria. Any further questions from Sanoma House? If not, and I assume there are no questions on the telephone line, at least at the moment either, so we take a few from the chat.
Sure.
They are a bit continuing on the themes that we have already discussed. So, maybe I start with the one that is continuing on the media industry developments. So, could you comment on the change that you've seen in the Finnish TV and media landscape in the context of rationalizing kind of the content investments in TV?
Yes. I think our position on that has been pretty clear, which is we do look at investment levels needing to be sustainable also from a business model point of view. We have made deliberate choices there to also not over-invest in that market, and I think that's very much also what we will continue to do. What other players do in the market is, of course, up to them.
If that becomes healthier overall, does it have an impact on our financials?
Well, it would, in theory, have a positive impact at that point, yes. But I think the market is still very much, as was indicated earlier, very much in transition still.
Yes. Okay, thank you. Then on the Free Cash Flow topic, still a bit. The cash flow elaborations were already given on 2024 and 2025, but then, specifically, how do we see the content creation investments change in absolute terms versus 2023?
So as part of the Solar Program to get the higher margins in 2026, a part of that is looking at how we create content, and particularly after the last curriculum changes, how we create the right size team and the right size investment going forward across the markets and looking at it as a one learning business. And so, as we've talked about, a lot of the savings that we'll see in 2026 from a margin perspective will come from lower investment and then depreciation through that channel, obviously hitting cash earlier. We haven't put a specific—we haven't, in any of the particular parts of the Solar Program, put specific numbers on it.
But being more efficient in this area, working across markets, is kind of helps to lead to that margin improvement, which is then sustained.
Maybe one other comment on this. If you look at it, from the perspective of, the method creation, we really look at our publishing program increasingly across the whole company. Which also means if you then see over time, for example, new curriculum happening in one market, we will make sure that that doesn't immediately impact the overall investments we do, that it's more a consistent investment, and we are positioning where we invest, depending on what we see in the market. That was not possible, before we had the scale we now have.
Thank you. I think those were the questions from the chat, so if no questions from the telephone line, I think that we will be wrapping up. And, as a reminder, we will publish our annual report in a few weeks' time. The AGM will take place on the 17th April, and then the Q1 results will come out 8th of May. So we are looking forward to seeing you in connection to those events again. And, now warm thanks from our side for participating in this event. And we are, of course, available also afterwards at Investor Relations for any further questions. So thank you, and have a good day.
Thank you.