Area residents who need help making home repairs should contact the U.S. Department of Agriculture as soon as possible regarding available loans and grants, said Amy Johnson, a rural development specialist for the USDA’s Rural Development office in Oregon.
“It really is a great program for people who otherwise couldn’t afford to make renovations,” Johnson said. “And people who are at risk of losing their home because of a health and safety issue, this can help with that, too.”
The USDA’s Rural Development program for Northwest Illinois offers financial assistance for home repairs in the form of loans and grants. A repair loan must be used to improve or modernize homes, make them safer and more sanitary, or to remove health and safety hazards, states a USDA news release. Eligible repairs include roofing, siding, windows, foundation repairs, kitchen cabinets, septic system, and furnace/air-conditioning.
The maximum loan amount is $20,000, and loans can be made for a term of 20 years at 1 percent interest, the release states. To qualify, an applicant needs to own and occupy the home, have acceptable credit, be able to repay the loan, and meet “very low” income guidelines, the release states. To help illustrate these guidelines, a family of four in Stephenson County can earn up to $29,950 and still qualify, the release states.
The home repair grants are only awarded for projects that address health, safety, or accessibility issues for a home. Unlike the loans, the grants do not have to be repaid. Grants are often made in conjunction with small loans, and there’s a $7,500 lifetime limit on repair grant funds.
A limited number of these grants are available, the release states. Applicants must meet very low income guidelines, be 62 years of age or older, and demonstrate an inability to make loan payments, the release states.
Johnson said homeowners who think they might qualify for a loan or grant should call the USDA office in Oregon. Department officials will ask callers several preliminary questions to get a sense of whether they qualify. Then, an application will be sent to the homeowner if they wish, Johnson said. For disabled residents, USDA officials can also visit the individual’s home to deliver the application and help them with the process, she said.
“It runs all year long every year,” Johnson said of the Rural Development program.
The USDA’s Rural Development office in Oregon serves seven counties in Northwest Illinois, including Stephenson, Jo Daviess, Carroll, Boone, Winnebago, Ogle, and Lee.http://tourism9.com/ http://vkins.com/
2012年2月28日星期二
2012年2月26日星期日
Banks to grab share of ECB’s €500bn loans
The European Central Bank is set to flood banking markets with €500bn (£424bn) of cheap loans this week, taking its financial support of the European Union to €1trn in just three months.
On Wednesday, the ECB will hold its second allotment of three-year loans to private banks and other institutions, known as the longer-term refinancing operations (LTRO). Analysts are expecting banks to apply for between €200bn and €750bn in total, with most forecasts around the €500bn mark.
In December, 523 banks borrowed €489bn from the first LTRO. The loans carried an interest rate of around 1 per cent a year. The new loans will be just as cheap, but the collateral requirements have been loosened. Banks will be able to pledge corporate and consumer loans, rather than just government bonds, in return for the borrowing.
The new LTRO will be conducted through national central banks, not the ECB, so governments will take the losses should their banks be unable to repay the loans.
The first unprecedented provision of liquidity has been credited by the ECB president, Mario Draghi, with helping Europe to avoid a banking crisis this year. Some banks had found it increasingly difficult to borrow in the second half of last year. These institutions used the ECB’s cheap funds to meet their liabilities.
The liquidity injection also seems to have helped bring down the borrowing costs of some distressed eurozone states, as banks, particularly in Spain and Italy, have used the money to invest in bonds issued by their governments. Italian 10-year yields have come down from above 7 per cent to 5.5 per cent. Spanish 10-year yields have fallen from 5.7 to 5 per cent.
Sony Kapoor of the Re-Define think tank said: “The bigger the LTRO next week, the more the short-term relief for the banking sector, but at the cost of making a sustainable exit from life-support even harder.”
Jens Larsen of RBC Capital Markets, argued that the LTRO would be beneficial as long as banks restructure. “If the euro banks spend the time wisely by reducing their balance sheets and raising the necessary capital that’s not so bad,” he said. “But if they’re not doing that, it’s dangerous.”
http://tourism9.com/ http://vkins.com/
In December, 523 banks borrowed €489bn from the first LTRO. The loans carried an interest rate of around 1 per cent a year. The new loans will be just as cheap, but the collateral requirements have been loosened. Banks will be able to pledge corporate and consumer loans, rather than just government bonds, in return for the borrowing.
The new LTRO will be conducted through national central banks, not the ECB, so governments will take the losses should their banks be unable to repay the loans.
The first unprecedented provision of liquidity has been credited by the ECB president, Mario Draghi, with helping Europe to avoid a banking crisis this year. Some banks had found it increasingly difficult to borrow in the second half of last year. These institutions used the ECB’s cheap funds to meet their liabilities.
The liquidity injection also seems to have helped bring down the borrowing costs of some distressed eurozone states, as banks, particularly in Spain and Italy, have used the money to invest in bonds issued by their governments. Italian 10-year yields have come down from above 7 per cent to 5.5 per cent. Spanish 10-year yields have fallen from 5.7 to 5 per cent.
Sony Kapoor of the Re-Define think tank said: “The bigger the LTRO next week, the more the short-term relief for the banking sector, but at the cost of making a sustainable exit from life-support even harder.”
Jens Larsen of RBC Capital Markets, argued that the LTRO would be beneficial as long as banks restructure. “If the euro banks spend the time wisely by reducing their balance sheets and raising the necessary capital that’s not so bad,” he said. “But if they’re not doing that, it’s dangerous.”
2012年2月25日星期六
The burden of student debt
At the height of the Occupy protests last fall, young people held signs announcing how much they owed in student loans. While the pundits were asking each other what, exactly, the protesters wanted, a big part of the answer was on those signs: Students are leaving colleges and universities with a staggering financial burden and bleak job prospects.
“When you get out of college at 21 with a 30-year loan, it’s soul crushing,” says Scot Ross, executive director of One Wisconsin Now, a progressive organization that is launching an advocacy campaign on the issue. Ross is on leave to serve as communications director for gubernatorial candidate Kathleen Falk.
The student loan landscape has shifted dramatically since the parents of current students and recent graduates left college. In 2006, the U.S. Education Department’s National Center for Education Statistics reported that most borrowers who finished college in the early 1990s were able to manage their student loan burden. Most paid the loans back in 10 years. Today, many students face 20 to 25 years of making payments. In the early ’90s, about half of students borrowed; in 2006, two-thirds had to borrow. And their loans are much bigger.
Federal and state policy and budgetary decisions in recent years have contributed to the student debt burden. Public funding for public universities has fallen steeply at the same time that tuition has skyrocketed. Congress slashed funding for Pell Grants that helped the most needy students and put provisions in place to protect private lenders.
Federally funded student loans are no longer available from Sallie Mae, and its private loans have much higher interest rates than do home or car loans.
Last year, students borrowed more than $100 billion dollars — a new record. The College Board, an advocacy group that works to ensure that every student has the opportunity to prepare for, enroll in and graduate from college, reports that students are borrowing twice as much as in 2001. The total amount owed on all outstanding student loans is expected to reach $1 trillion next year. A full-time undergraduate student borrowed an average of almost $5,000 in 2010, 63% more than a decade earlier after adjusting for inflation, according to the College Board.
These young debtors are not just those who opted to attend prestigious private universities. Tuition at public universities has soared as those institutions struggle to offset cuts in public funding. University of Wisconsin-Madison’s in-state tuition jumped from $5,866 in 2005 to $9,672 in 2011. The estimated total cost for a year at UW-Madison was $15,256 in 2005. Now it’s $25,421.
About half of 2010-2011 bachelor’s degree recipients at UW-Madison will have borrowed an average total of $24,493, says Susan Fischer, director of the office of Student Financial Aid. For those who go on to graduate school, the debts increase sharply. About three-quarters of law school graduates will have loans and owe an average $99,723. Almost 90% of medical school graduates will have borrowed, and their average debt will be $151,383.
To make matters worse, student loans differ from all other kinds of debt in two significant ways. They are excluded from bankruptcy protection, and it is not possible to refinance or restructure loans to take advantage of falling interest rates.
“It is easier to be a deadbeat dad than it is to lose your student loan debt,” Ross says of the lack of bankruptcy protection. “What does that say about us as a nation?”
People on disability who can’t afford to pay their student loans can even have their payments garnisheed, Ross notes. The only recourse, he adds, is “loan rehabilitation, which means you have to agree to make extended payments and take a new loan, with added fees. You end up with even more debt.”
Ross admits he has a dog in this fight. He borrowed about $30,000 in 11 different loans to pay for his bachelor’s and master’s degrees. He laughs, a little ruefully, when he admits that, at 42, he is in “year 12 of a 30-year student debt,” and says he’s fortunate to have a job and be able to keep up with the payments.
Ben Manski, founder of the Liberty Tree Foundation, is another advocate for reforms to the student loan system. He contends that the huge increases in student debt are the inevitable result of cuts to higher education in state budgets.
“Generation X was the first generation to experience the impact of debt and a restructured job market,” says Manski, 37, who was recently appointed campaign director for Green Party presidential candidate Jill Stein. “We are overemployed and overworked. We do not have job security. Retirement is not even a consideration. The Millennials have it even worse, because of high unemployment. When you have this kind of debt, you lose freedoms — the freedom to engage in public service, for example, or pursue the career you are most fitted for as opposed to one that will make ends meet.”
Despite the heart-stopping debt statistics, the UW’s Fisher thinks it’s still possible to get at least an undergraduate degree without going very deeply into debt.
“Sometimes, students accrue big debt because they change majors and take longer to graduate. Or they choose a private or out-of-state public school that the family really cannot afford. My advice to incoming students is to work while they are in school and live frugally. And get in and get out. If they do that, I think they can finish with a minimal amount of debt.”
But starting working life owing tens of thousands of dollars during a period of high unemployment has many students wondering how they will be able to afford to marry, have children or buy a house. Paying off even a relatively small loan in a sagging economy is proving very difficult for many people. Here are some of their stories.
‘You can’t live your life without worrying’
Christina Spector left UW-Madison with an undergraduate degree in elementary education and psychology (2002), a graduate degree in educational leadership and policy analysis (2008) and a law degree (also 2008).
“It was a conscious decision to go to UW-Madison for the in-state tuition. I had scholarships, a little help from my parents, and I always had jobs while I was in school,” she says. But it wasn’t enough.
“The first time I signed a promissory note, I had such a hard time of it. I cried for two days about entering that system, but I had no other choice.”
A school administration consultant for the State Department of Instruction, Spector will pay $550 a month for a total of 25 years before her loans are paid off. Her husband, who has a master’s degree and is employed by the American Federation of Teachers, makes student loan payments of $200 a month.
That $750 monthly expense means they must live very frugally.
“We are on a really strict budget,” she says. “We don’t make large purchases unless we absolutely have to. We bought much less house than we qualified for, and we drive an inexpensive car. We are thoughtful about little things like buying coffee. We take our lunch to work. We can’t travel, so we use our vacations to visit family.”
One place where the family does not cut corners is on daycare for their 2-year-old child.
“Daycare costs more than our mortgage, but that’s one thing you’re not going to scrimp on.”
The debt drives all the family’s decisions — having another child, making a career change, moving.
“It’s difficult sometimes, because you can’t live your life without worrying about it,” she says. “I am much less inclined to take any kind of risk because of it.”
Spector knows she could ease the financial burden by abandoning a job she loves in the public sector and joining a private law firm.
“I never went to law school wanting that. I always wanted to work in the public sector. I have friends from law school who have made that decision so they could pay off their loans. To me, it seems like selling your soul. I just couldn’t do it. That would be a true prison on top of the bondage of the loans.”
‘We have given up many things’
A Madison West high school graduate, Ben Manski has an undergraduate degree in sociology and a law degree from UW-Madison. His higher education left him with $70,000 in student loan debt. His wife, Sarah, also has debt for her student loans.
“I am paying about $500 a month. For both my wife and me, it’s about $800 a month. It’s a major part of our budget, almost as much as we pay for housing,” he says.
Although Manski could be earning big bucks in a private law firm, he has stayed true to his commitment to use his education to work for social change. Founder of the Liberty Tree Foundation, he ran for the state Legislature as a Green Party candidate in 2010. He also practices a little law and teaches sociology at Madison College.
“I had other choices I could have made,” Manski says. “I was offered a lobbying job for an insurance company when I was 22 years old that would have paid $80,000 a year. I turned it down.”
Manski and his wife have had to make difficult choices because of their student loans.
“It is very difficult to save, and we have given up many things. We are not in a position where we can help others financially. And, certainly, we are not having a family until we have the ability to afford kids,” he says. He and his wife recently started a new website, posipair.com, designed to put environmentally responsible businesses in touch with each other and with customers, in an effort to generate some independent income.
Manski, who comes from a family of teachers, has a passion for education and would like to teach full time.
“I think there’s no higher calling than teaching and no more important institution than education,” he says.
Sometimes, he says, his students ask him if their schooling is worth the money and if they will be able to get jobs when they finish. “I used to be able to say it is definitely worth it,” he says. “But now that question is more difficult to answer.”
‘We can’t take vacations’
When Kathy Wallace learned that her Kenosha employer, Powerbrace Corp., might be moving its operations to Mexico, she decided to follow her dream of becoming a math teacher.
With a bachelor’s degree in math already in her pocket she would need only to complete the requirements for a teaching license. She enrolled at Carthage College, where she took night classes for four years on top of working 40 hours processing accounts payable. In 2006, she had to quit her job to student teach. She landed a job as a substitute teacher at Bullen Middle School in Kenosha and continued to work toward a master’s degree through an online Walden University program. She completed the master’s degree 20 months later, and now has a full-time teaching position.
Dream achieved.
But Wallace’s career change left her with a total of $60,000 in student loans and the prospect of supporting her family of four on a teacher’s salary and the modest disability payments her husband receives. Her loan payments are $700 a month.
“I’ve been paying the first one [for the undergraduate degree] since 2007, and I still owe about $19,000 on that one. I finished the master’s program in August and owe $30,000 for that. It will probably take at least 12 years to pay it all off.” Wallace will be 54 years old by then.
She says her husband’s disability payments cover their mortgage, but the family has to get by on her income for everything else.
“We don’t go out to eat. We can’t take vacations. Our kids don’t get to do things the other kids get to do. It’s really hard knowing you can’t do things for your own kids.”
Those children, now 11 and 16 years old, both want to go to college.
“I’ve told them I’d chip in as much as I could. I’ve encouraged them to go for scholarships. The rest will have to be student loans,” Wallace says. “My kids seeing me get more education showed them this is what you need to do to survive. Without college, there’s not much out there for you.”
Wallace hopes she may be able to take advantage of a loan forgiveness option for her federal Stafford and Perkins loans after five years of teaching. She qualifies on two counts — she teaches mathematics and she teaches in a Title 1 school. But she worries that she might not make the five-year requirement.
“If I can get [those loans forgiven] it takes a lot of pressure off me. But we are facing layoffs again in our district.”
‘The interest is very high’
Tanya Oemig finished paying off her own student loans in her early 30s, but now, at 46, she faces paying back $15,000 she borrowed to send her children to college.
“They couldn’t borrow enough themselves,” she explains, adding that, as a single parent, she was unable to save for her children’s higher education.
Until recently, Oemig was a communicable disease surveillance specialist with the Wisconsin Division of Public Health. Her salary there was not enough to pay the bills after taking on the new debt, and she had to add a second job. She finally decided she was on overload and quit both jobs to work for a software development company at a higher salary.
“I loved the work at Public Health, but I just couldn’t afford to keep doing it. I was lucky to find a good place to work, and it pays enough that I’m able to make the payments on one salary now. There are people struggling a lot more than I am.”
Still, Oemig worries about her children’s prospects. Both still live with her. One graduated from Madison Media Institute in May with an associate degree and now works at a gas station while he looks for a job related to his skills and education. The other one is still at Madison College, working toward a two-year degree in information systems administration. He has a part-time help desk job, but his hours were cut recently.
“I worry about their job prospects all the time. Currently they don’t make enough to support themselves. They can make their loan payments, but they can’t pay for car insurance or cell phones. And I worry they won’t find a job before their education is obsolete. They are both very discouraged.”
Oemig thinks the time allowed before graduates have to start repaying student loans is unrealistic, given the dismal job market.
“Even if they had a job right out of school, they would have a lot of expenses getting started. They need more than six months so they can save enough to afford an apartment and maybe a car — to get their feet on the ground.”
And she wonders why interest on student loans is so high when loans for other purposes are cheap these days. One of her sons has a Sallie Mae loan with an interest rate of 10%.
“I had good credit so I could get federal loans, but those who don’t have to go to private loans where the interest is very high.”
‘Sometimes I wonder why I’m doing this’
There was never any question in Dustin Bradley’s family that the Beloit Memorial graduate would go on to college.
“My grandparents didn’t go to college, and my father [a third grade teacher in Wauwatosa] was the first and only one to get a degree. My family always encouraged me and expected me to get more education,” he says. However, he admits that he drifted during his first couple of years at UW-Madison, struggling with the math required for the business program where he first enrolled, and finally finding his academic passion in sociology.
“I did the victory lap,” he explains of his extra fifth year as an undergraduate. He will receive his bachelor’s degree in May.
But Bradley’s accumulation of student debt is not over. He plans to enroll in a paralegal certificate program next fall. It’s a high-demand skill, and he’s sure he’ll find work. Then, after a few years of gaining experience, he wants to enroll in law school.
So far, Bradley’s debt load is only about $12,500, lower than average, because his family was able to kick in for his first few years and because he worked an average of 32 hours a week while in school. But from here on out, he’s on his own.
He’s looking at paralegal programs at technical colleges in Madison and Milwaukee and at several online programs. The private web-based programs are convenient, especially for someone who has a job, he says, but they are more expensive. Programs at the tech schools cost about $4,000 for the one-year course. The costs for online courses that have accreditation range from $7,500 to more than $10,000. Bradley expects he will have to borrow that money on the far more expensive private student loan market, but hopes he can pay most it off before he starts law school.
That is where the really big debt will start to build. According to UW-Madison statistics, the average law school graduate in 2012 will owe almost $100,000. That number includes accumulated undergraduate debt, but law school alone leaves the average borrower some $80,000 in debt.
Still, Bradley is confident that incurring the debt will be a good investment. “I think I’ll be making enough to make [the payments] manageable. But it’s hard when I look at some of my friends who got jobs right out of high school at Chrysler or GM. They have high-paying jobs but don’t have this debt. So sometimes I wonder why I’m doing this.”
Cause for hope
Many college graduates face a sobering reality: turning 50 and still not being free of student loan payments. But there are efforts under way to ease the burden. The progressive organization One Wisconsin Now is launching an advocacy campaign that proposes the following for state residents:
“This is an issue that is just starting to bubble up to the surface,” says One Wisconsin Now’s deputy director, Mike Browne. “We’re in relatively early days, legislatively.”
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“When you get out of college at 21 with a 30-year loan, it’s soul crushing,” says Scot Ross, executive director of One Wisconsin Now, a progressive organization that is launching an advocacy campaign on the issue. Ross is on leave to serve as communications director for gubernatorial candidate Kathleen Falk.
The student loan landscape has shifted dramatically since the parents of current students and recent graduates left college. In 2006, the U.S. Education Department’s National Center for Education Statistics reported that most borrowers who finished college in the early 1990s were able to manage their student loan burden. Most paid the loans back in 10 years. Today, many students face 20 to 25 years of making payments. In the early ’90s, about half of students borrowed; in 2006, two-thirds had to borrow. And their loans are much bigger.
Federal and state policy and budgetary decisions in recent years have contributed to the student debt burden. Public funding for public universities has fallen steeply at the same time that tuition has skyrocketed. Congress slashed funding for Pell Grants that helped the most needy students and put provisions in place to protect private lenders.
Federally funded student loans are no longer available from Sallie Mae, and its private loans have much higher interest rates than do home or car loans.
Last year, students borrowed more than $100 billion dollars — a new record. The College Board, an advocacy group that works to ensure that every student has the opportunity to prepare for, enroll in and graduate from college, reports that students are borrowing twice as much as in 2001. The total amount owed on all outstanding student loans is expected to reach $1 trillion next year. A full-time undergraduate student borrowed an average of almost $5,000 in 2010, 63% more than a decade earlier after adjusting for inflation, according to the College Board.
These young debtors are not just those who opted to attend prestigious private universities. Tuition at public universities has soared as those institutions struggle to offset cuts in public funding. University of Wisconsin-Madison’s in-state tuition jumped from $5,866 in 2005 to $9,672 in 2011. The estimated total cost for a year at UW-Madison was $15,256 in 2005. Now it’s $25,421.
About half of 2010-2011 bachelor’s degree recipients at UW-Madison will have borrowed an average total of $24,493, says Susan Fischer, director of the office of Student Financial Aid. For those who go on to graduate school, the debts increase sharply. About three-quarters of law school graduates will have loans and owe an average $99,723. Almost 90% of medical school graduates will have borrowed, and their average debt will be $151,383.
To make matters worse, student loans differ from all other kinds of debt in two significant ways. They are excluded from bankruptcy protection, and it is not possible to refinance or restructure loans to take advantage of falling interest rates.
“It is easier to be a deadbeat dad than it is to lose your student loan debt,” Ross says of the lack of bankruptcy protection. “What does that say about us as a nation?”
People on disability who can’t afford to pay their student loans can even have their payments garnisheed, Ross notes. The only recourse, he adds, is “loan rehabilitation, which means you have to agree to make extended payments and take a new loan, with added fees. You end up with even more debt.”
Ross admits he has a dog in this fight. He borrowed about $30,000 in 11 different loans to pay for his bachelor’s and master’s degrees. He laughs, a little ruefully, when he admits that, at 42, he is in “year 12 of a 30-year student debt,” and says he’s fortunate to have a job and be able to keep up with the payments.
Ben Manski, founder of the Liberty Tree Foundation, is another advocate for reforms to the student loan system. He contends that the huge increases in student debt are the inevitable result of cuts to higher education in state budgets.
“Generation X was the first generation to experience the impact of debt and a restructured job market,” says Manski, 37, who was recently appointed campaign director for Green Party presidential candidate Jill Stein. “We are overemployed and overworked. We do not have job security. Retirement is not even a consideration. The Millennials have it even worse, because of high unemployment. When you have this kind of debt, you lose freedoms — the freedom to engage in public service, for example, or pursue the career you are most fitted for as opposed to one that will make ends meet.”
Despite the heart-stopping debt statistics, the UW’s Fisher thinks it’s still possible to get at least an undergraduate degree without going very deeply into debt.
“Sometimes, students accrue big debt because they change majors and take longer to graduate. Or they choose a private or out-of-state public school that the family really cannot afford. My advice to incoming students is to work while they are in school and live frugally. And get in and get out. If they do that, I think they can finish with a minimal amount of debt.”
But starting working life owing tens of thousands of dollars during a period of high unemployment has many students wondering how they will be able to afford to marry, have children or buy a house. Paying off even a relatively small loan in a sagging economy is proving very difficult for many people. Here are some of their stories.
‘You can’t live your life without worrying’
Christina Spector left UW-Madison with an undergraduate degree in elementary education and psychology (2002), a graduate degree in educational leadership and policy analysis (2008) and a law degree (also 2008).
“It was a conscious decision to go to UW-Madison for the in-state tuition. I had scholarships, a little help from my parents, and I always had jobs while I was in school,” she says. But it wasn’t enough.
“The first time I signed a promissory note, I had such a hard time of it. I cried for two days about entering that system, but I had no other choice.”
A school administration consultant for the State Department of Instruction, Spector will pay $550 a month for a total of 25 years before her loans are paid off. Her husband, who has a master’s degree and is employed by the American Federation of Teachers, makes student loan payments of $200 a month.
That $750 monthly expense means they must live very frugally.
“We are on a really strict budget,” she says. “We don’t make large purchases unless we absolutely have to. We bought much less house than we qualified for, and we drive an inexpensive car. We are thoughtful about little things like buying coffee. We take our lunch to work. We can’t travel, so we use our vacations to visit family.”
One place where the family does not cut corners is on daycare for their 2-year-old child.
“Daycare costs more than our mortgage, but that’s one thing you’re not going to scrimp on.”
The debt drives all the family’s decisions — having another child, making a career change, moving.
“It’s difficult sometimes, because you can’t live your life without worrying about it,” she says. “I am much less inclined to take any kind of risk because of it.”
Spector knows she could ease the financial burden by abandoning a job she loves in the public sector and joining a private law firm.
“I never went to law school wanting that. I always wanted to work in the public sector. I have friends from law school who have made that decision so they could pay off their loans. To me, it seems like selling your soul. I just couldn’t do it. That would be a true prison on top of the bondage of the loans.”
‘We have given up many things’
A Madison West high school graduate, Ben Manski has an undergraduate degree in sociology and a law degree from UW-Madison. His higher education left him with $70,000 in student loan debt. His wife, Sarah, also has debt for her student loans.
“I am paying about $500 a month. For both my wife and me, it’s about $800 a month. It’s a major part of our budget, almost as much as we pay for housing,” he says.
Although Manski could be earning big bucks in a private law firm, he has stayed true to his commitment to use his education to work for social change. Founder of the Liberty Tree Foundation, he ran for the state Legislature as a Green Party candidate in 2010. He also practices a little law and teaches sociology at Madison College.
“I had other choices I could have made,” Manski says. “I was offered a lobbying job for an insurance company when I was 22 years old that would have paid $80,000 a year. I turned it down.”
Manski and his wife have had to make difficult choices because of their student loans.
“It is very difficult to save, and we have given up many things. We are not in a position where we can help others financially. And, certainly, we are not having a family until we have the ability to afford kids,” he says. He and his wife recently started a new website, posipair.com, designed to put environmentally responsible businesses in touch with each other and with customers, in an effort to generate some independent income.
Manski, who comes from a family of teachers, has a passion for education and would like to teach full time.
“I think there’s no higher calling than teaching and no more important institution than education,” he says.
Sometimes, he says, his students ask him if their schooling is worth the money and if they will be able to get jobs when they finish. “I used to be able to say it is definitely worth it,” he says. “But now that question is more difficult to answer.”
‘We can’t take vacations’
When Kathy Wallace learned that her Kenosha employer, Powerbrace Corp., might be moving its operations to Mexico, she decided to follow her dream of becoming a math teacher.
With a bachelor’s degree in math already in her pocket she would need only to complete the requirements for a teaching license. She enrolled at Carthage College, where she took night classes for four years on top of working 40 hours processing accounts payable. In 2006, she had to quit her job to student teach. She landed a job as a substitute teacher at Bullen Middle School in Kenosha and continued to work toward a master’s degree through an online Walden University program. She completed the master’s degree 20 months later, and now has a full-time teaching position.
Dream achieved.
But Wallace’s career change left her with a total of $60,000 in student loans and the prospect of supporting her family of four on a teacher’s salary and the modest disability payments her husband receives. Her loan payments are $700 a month.
“I’ve been paying the first one [for the undergraduate degree] since 2007, and I still owe about $19,000 on that one. I finished the master’s program in August and owe $30,000 for that. It will probably take at least 12 years to pay it all off.” Wallace will be 54 years old by then.
She says her husband’s disability payments cover their mortgage, but the family has to get by on her income for everything else.
“We don’t go out to eat. We can’t take vacations. Our kids don’t get to do things the other kids get to do. It’s really hard knowing you can’t do things for your own kids.”
Those children, now 11 and 16 years old, both want to go to college.
“I’ve told them I’d chip in as much as I could. I’ve encouraged them to go for scholarships. The rest will have to be student loans,” Wallace says. “My kids seeing me get more education showed them this is what you need to do to survive. Without college, there’s not much out there for you.”
Wallace hopes she may be able to take advantage of a loan forgiveness option for her federal Stafford and Perkins loans after five years of teaching. She qualifies on two counts — she teaches mathematics and she teaches in a Title 1 school. But she worries that she might not make the five-year requirement.
“If I can get [those loans forgiven] it takes a lot of pressure off me. But we are facing layoffs again in our district.”
‘The interest is very high’
Tanya Oemig finished paying off her own student loans in her early 30s, but now, at 46, she faces paying back $15,000 she borrowed to send her children to college.
“They couldn’t borrow enough themselves,” she explains, adding that, as a single parent, she was unable to save for her children’s higher education.
Until recently, Oemig was a communicable disease surveillance specialist with the Wisconsin Division of Public Health. Her salary there was not enough to pay the bills after taking on the new debt, and she had to add a second job. She finally decided she was on overload and quit both jobs to work for a software development company at a higher salary.
“I loved the work at Public Health, but I just couldn’t afford to keep doing it. I was lucky to find a good place to work, and it pays enough that I’m able to make the payments on one salary now. There are people struggling a lot more than I am.”
Still, Oemig worries about her children’s prospects. Both still live with her. One graduated from Madison Media Institute in May with an associate degree and now works at a gas station while he looks for a job related to his skills and education. The other one is still at Madison College, working toward a two-year degree in information systems administration. He has a part-time help desk job, but his hours were cut recently.
“I worry about their job prospects all the time. Currently they don’t make enough to support themselves. They can make their loan payments, but they can’t pay for car insurance or cell phones. And I worry they won’t find a job before their education is obsolete. They are both very discouraged.”
Oemig thinks the time allowed before graduates have to start repaying student loans is unrealistic, given the dismal job market.
“Even if they had a job right out of school, they would have a lot of expenses getting started. They need more than six months so they can save enough to afford an apartment and maybe a car — to get their feet on the ground.”
And she wonders why interest on student loans is so high when loans for other purposes are cheap these days. One of her sons has a Sallie Mae loan with an interest rate of 10%.
“I had good credit so I could get federal loans, but those who don’t have to go to private loans where the interest is very high.”
‘Sometimes I wonder why I’m doing this’
There was never any question in Dustin Bradley’s family that the Beloit Memorial graduate would go on to college.
“My grandparents didn’t go to college, and my father [a third grade teacher in Wauwatosa] was the first and only one to get a degree. My family always encouraged me and expected me to get more education,” he says. However, he admits that he drifted during his first couple of years at UW-Madison, struggling with the math required for the business program where he first enrolled, and finally finding his academic passion in sociology.
“I did the victory lap,” he explains of his extra fifth year as an undergraduate. He will receive his bachelor’s degree in May.
But Bradley’s accumulation of student debt is not over. He plans to enroll in a paralegal certificate program next fall. It’s a high-demand skill, and he’s sure he’ll find work. Then, after a few years of gaining experience, he wants to enroll in law school.
So far, Bradley’s debt load is only about $12,500, lower than average, because his family was able to kick in for his first few years and because he worked an average of 32 hours a week while in school. But from here on out, he’s on his own.
He’s looking at paralegal programs at technical colleges in Madison and Milwaukee and at several online programs. The private web-based programs are convenient, especially for someone who has a job, he says, but they are more expensive. Programs at the tech schools cost about $4,000 for the one-year course. The costs for online courses that have accreditation range from $7,500 to more than $10,000. Bradley expects he will have to borrow that money on the far more expensive private student loan market, but hopes he can pay most it off before he starts law school.
That is where the really big debt will start to build. According to UW-Madison statistics, the average law school graduate in 2012 will owe almost $100,000. That number includes accumulated undergraduate debt, but law school alone leaves the average borrower some $80,000 in debt.
Still, Bradley is confident that incurring the debt will be a good investment. “I think I’ll be making enough to make [the payments] manageable. But it’s hard when I look at some of my friends who got jobs right out of high school at Chrysler or GM. They have high-paying jobs but don’t have this debt. So sometimes I wonder why I’m doing this.”
Cause for hope
Many college graduates face a sobering reality: turning 50 and still not being free of student loan payments. But there are efforts under way to ease the burden. The progressive organization One Wisconsin Now is launching an advocacy campaign that proposes the following for state residents:
- A “truth in lending” provision, similar to what’s required for a mortgage, so students understand when they take out a loan how much they will be paying back and for how long.
- Bankruptcy protection.
- The opportunity to refinance or consolidate student loans.
- Provisions for forgiving student debt.
“This is an issue that is just starting to bubble up to the surface,” says One Wisconsin Now’s deputy director, Mike Browne. “We’re in relatively early days, legislatively.”
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2012年2月24日星期五
A lesson on student loans
A lesson on student loans
Student Financial Education Services presents students with advice for dealing with loans.
Student Financial Education Services presents students with advice for dealing with loans.
by STUDENT FINANCIAL EDUCATION SERVICES
This article originally appeared in The Tiger on February 24, 2012 | PRINT
Understanding Your Student Loans
The majority of college students have them: student loans. Student loans have increased in popularity in recent years, mostly due to the increasing tuition rates seen across the country. As you near the end of your tenure here at Clemson, there are a few things to keep in mind that will better prepare you to deal with your student loans.
Where do I find my loans?
If you are like many students, you remember receiving the many pieces of mail over the past four years detailing your loans, but now you cannot seem to find the information. You most likely know your loans by the types of loans they are, like Stafford Loan, Perkins Loan and others. These loans are not all made by one company, but are sold off and serviced by a wide variety.
There is an easy-to-use resource to help locate all of your student loans and who they are owned or serviced by. The website to help you locate your student loans is http://www.nslds.ed.gov/nslds_SA/.
If you have private loans, such as those often made by banks or financial companies such as Discover, Citi, Bank of America or others, you may need to contact that financial institution directly, as their information is sometimes not located in the online database.
How do I pay my loans?
Once you graduate, you should be proactive about finding out when you need to start paying your student loans back.
Graduating from college can be a hectic time, and with all the address changes that you may be going through, it’s easy for mail to get misplaced or sent to the wrong address. It is the responsibility of the borrower, which would be you, to make contact with the owner or servicer of your loan(s) in order to find out when payments begin.
The owner or servicer of your loan will most likely offer you several options for repaying your loans, although not all companies offer these options, and some companies may offer more options. Here are a few basic options:
Standard Repayment: Think of this payment option as a standard loan, you make fixed payments that do not change from month to month for the standard repayment period (which is typically 10 years).
Extended Repayment: This payment option is similar to the standard payment option, except the payment period (which is the time it takes to pay back the loan) will be longer than the standard period. This type of repayment plan may be beneficial to those who have extremely large amounts of student loans and cannot afford the monthly payment under the standard repayment plan.
Graduated Repayment: A graduated repayment plan offers the advantage of allowing you to make lower monthly payments right when you get out of school with the monthly payment increasing every set period of time (such as every two or three years). This type of repayment plan is based on the ideal that your income will increase over time.
Income Dependent Repayment: This payment plan is available in certain government loan situations and allows the borrower to pay a certain percentage of their income toward the loan until the loan is paid off or until a time limit of 25 years is reached. If the time limit of 25 years is reached, the government will forgive the remaining balance on the debt, although tax implications may apply.
Although these are just a few of the standard payment options, it is important to keep your current situation in mind when determining which payment plan is right for you. It is also important to think of the payment plan in terms of which will cost you the most in interest, as opposed to those repayment plans that will accrue the least amount of interest. Students are responsible for verifying the information in this article prior to making financial decisions.
If you would like additional information on student loan payment plans or help understanding your student loan situation, please visit the Student Financial Education Office located in The Union, Office 805. You can set up an appointment by emailing us at sfes1@clemson.edu or calling us at (864) 656-7337.
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The majority of college students have them: student loans. Student loans have increased in popularity in recent years, mostly due to the increasing tuition rates seen across the country. As you near the end of your tenure here at Clemson, there are a few things to keep in mind that will better prepare you to deal with your student loans.
Where do I find my loans?
If you are like many students, you remember receiving the many pieces of mail over the past four years detailing your loans, but now you cannot seem to find the information. You most likely know your loans by the types of loans they are, like Stafford Loan, Perkins Loan and others. These loans are not all made by one company, but are sold off and serviced by a wide variety.
There is an easy-to-use resource to help locate all of your student loans and who they are owned or serviced by. The website to help you locate your student loans is http://www.nslds.ed.gov/nslds_SA/.
If you have private loans, such as those often made by banks or financial companies such as Discover, Citi, Bank of America or others, you may need to contact that financial institution directly, as their information is sometimes not located in the online database.
How do I pay my loans?
Once you graduate, you should be proactive about finding out when you need to start paying your student loans back.
Graduating from college can be a hectic time, and with all the address changes that you may be going through, it’s easy for mail to get misplaced or sent to the wrong address. It is the responsibility of the borrower, which would be you, to make contact with the owner or servicer of your loan(s) in order to find out when payments begin.
The owner or servicer of your loan will most likely offer you several options for repaying your loans, although not all companies offer these options, and some companies may offer more options. Here are a few basic options:
Standard Repayment: Think of this payment option as a standard loan, you make fixed payments that do not change from month to month for the standard repayment period (which is typically 10 years).
Extended Repayment: This payment option is similar to the standard payment option, except the payment period (which is the time it takes to pay back the loan) will be longer than the standard period. This type of repayment plan may be beneficial to those who have extremely large amounts of student loans and cannot afford the monthly payment under the standard repayment plan.
Graduated Repayment: A graduated repayment plan offers the advantage of allowing you to make lower monthly payments right when you get out of school with the monthly payment increasing every set period of time (such as every two or three years). This type of repayment plan is based on the ideal that your income will increase over time.
Income Dependent Repayment: This payment plan is available in certain government loan situations and allows the borrower to pay a certain percentage of their income toward the loan until the loan is paid off or until a time limit of 25 years is reached. If the time limit of 25 years is reached, the government will forgive the remaining balance on the debt, although tax implications may apply.
Although these are just a few of the standard payment options, it is important to keep your current situation in mind when determining which payment plan is right for you. It is also important to think of the payment plan in terms of which will cost you the most in interest, as opposed to those repayment plans that will accrue the least amount of interest. Students are responsible for verifying the information in this article prior to making financial decisions.
If you would like additional information on student loan payment plans or help understanding your student loan situation, please visit the Student Financial Education Office located in The Union, Office 805. You can set up an appointment by emailing us at sfes1@clemson.edu or calling us at (864) 656-7337.
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View the discussion thread.
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2012年2月23日星期四
Financial aid office provides guidance for students paying off loans
If a person had $20,000 to spend, they could buy about 5,000 Javalanches, a Mini Cooper or feed 220 children in Africa for a year. If that person is a Northwest student, though, he or she would probably use it to pay off his or her loans. The average student debt of a Northwest graduate is between $19,825 and $22,555. The time to begin paying off loans is quickly approaching for seniors getting ready to graduate this spring.
“Our students have done a great job over the years (paying off loans),” Del Morley, director of financial assistance at Northwest, said. “The government keeps track of what they call a cohort default rate (percentage of students who default on federal loans) and our cohort default rate is always under the federal average.”
About 70 percent of Northwest students, each year, take out loans. Subsidized loans are need based and interest begins six months after graduation. Interest on unsubsidized loans begins immediately and payments must begin six months after a student is no longer enrolled in school. The Northwest Office of Financial Assistance provides students in need of loans with entrance and exit counseling and gives them tools to help with loan consolidations and payment plans.
“There are a lot of changes in the works coming up,” Morley said. “We’re going to try to get them all made before July 1, 2012.”
With any loans made after July 1, interest will begin to accumulate on subsidized loans as soon as a student graduates, and subsidized loans will no longer be available for graduate students. There is also a possibility that interest rates on student loans will increase.
“Unless (Congress) passes new legislation, it will be 6.8 percent next year,” Morley said.
Kearsten Smith, a senior who has taken out loans since her freshman year, said she is confident that her education at Northwest will help her find a job that will help to pay off her loans. If that fails, her next plan is to find someone very rich to marry.
“If you don’t have to take (loans) out, don’t, but at the same time, student loans are the best loans you can take out,” Smith said. “If you’re going to go to college, don’t be deterred because you have to take out loans to do it because they have the lowest interest rates (and) the best payback policy. Literally, they are the best loans you could ever take out.”
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“Our students have done a great job over the years (paying off loans),” Del Morley, director of financial assistance at Northwest, said. “The government keeps track of what they call a cohort default rate (percentage of students who default on federal loans) and our cohort default rate is always under the federal average.”
About 70 percent of Northwest students, each year, take out loans. Subsidized loans are need based and interest begins six months after graduation. Interest on unsubsidized loans begins immediately and payments must begin six months after a student is no longer enrolled in school. The Northwest Office of Financial Assistance provides students in need of loans with entrance and exit counseling and gives them tools to help with loan consolidations and payment plans.
“There are a lot of changes in the works coming up,” Morley said. “We’re going to try to get them all made before July 1, 2012.”
With any loans made after July 1, interest will begin to accumulate on subsidized loans as soon as a student graduates, and subsidized loans will no longer be available for graduate students. There is also a possibility that interest rates on student loans will increase.
“Unless (Congress) passes new legislation, it will be 6.8 percent next year,” Morley said.
Kearsten Smith, a senior who has taken out loans since her freshman year, said she is confident that her education at Northwest will help her find a job that will help to pay off her loans. If that fails, her next plan is to find someone very rich to marry.
“If you don’t have to take (loans) out, don’t, but at the same time, student loans are the best loans you can take out,” Smith said. “If you’re going to go to college, don’t be deterred because you have to take out loans to do it because they have the lowest interest rates (and) the best payback policy. Literally, they are the best loans you could ever take out.”
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2012年2月20日星期一
Home, study loans become cheaper
For a loan of Rs 400,000, the interest rate has been reduced by 25 bps to 11.75 per cent, while for loans between Rs 4 lakh and 750,000, the rate reduction is 100 bps to 12.50 per cent.
And, for the loans of above Rs 750,000, rates have been cut 25 bps to 12.25 per cent.
SBI also offers a concession of 50 bps on interest rates for loans given to female students.
Education loans, which constitute about seven per cent of SBI’s Rs 1.75-lakh-crore (Rs 1.75 trillion) retail portfolio, saw a growth of 14.17 per cent as of December-end.
Another state-run lender, Central Bank of India, has announced a reduction of 25-50 bps on home loan rates to boost credit demand, which has seen a slow growth in the current financial year.
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And, for the loans of above Rs 750,000, rates have been cut 25 bps to 12.25 per cent.
SBI also offers a concession of 50 bps on interest rates for loans given to female students.
Education loans, which constitute about seven per cent of SBI’s Rs 1.75-lakh-crore (Rs 1.75 trillion) retail portfolio, saw a growth of 14.17 per cent as of December-end.
Another state-run lender, Central Bank of India, has announced a reduction of 25-50 bps on home loan rates to boost credit demand, which has seen a slow growth in the current financial year.
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Icelandic Anger Brings Debt Forgiveness in Best Recovery Story
February 20, 2012, 2:31 AM EST
By Omar R. Valdimarsson
Feb. 20 (Bloomberg) — Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.
Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.
“You could safely say that Iceland holds the world record in household debt relief,” said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. “Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”
The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders don’t want to join the European Union, where the debt crisis is in its third year.
The island’s households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.
Crisis Lessons
“The lesson to be learned from Iceland’s crisis is that if other countries think it’s necessary to write down debts, they should look at how successful the 110 percent agreement was here,” said Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, in an interview. “It’s the broadest agreement that’s been undertaken.”
Without the relief, homeowners would have buckled under the weight of their loans after the ratio of debt to incomes surged to 240 percent in 2008, Matthiasson said.
Iceland’s $13 billion economy, which shrank 6.7 percent in 2009, grew 2.9 percent last year and will expand 2.4 percent this year and next, the Paris-based OECD estimates. The euro area will grow 0.2 percent this year and the OECD area will expand 1.6 percent, according to November estimates.
Housing, measured as a subcomponent in the consumer price index, is now only about 3 percent below values in September 2008, just before the collapse. Fitch Ratings last week raised Iceland to investment grade, with a stable outlook, and said the island’s “unorthodox crisis policy response has succeeded.”
People Vs Markets
Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.
Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.
Activists say the banks should go even further in their debt relief. Andrea J. Olafsdottir, chairman of the Icelandic Homes Coalition, said she doubts the numbers provided by the banks are reliable.
“There are indications that some of the financial institutions in question haven’t lost a penny with the measures that they’ve undertaken,” she said.
Fresh Demands
According to Kristjan Kristjansson, a spokesman for Landsbankinn hf, the amount written off by the banks is probably larger than the 196.4 billion kronur ($1.6 billion) that the Financial Services Association estimates, since that figure only includes debt relief required by the courts or the government.
“There are still a lot of people facing difficulties; at the same time there are a lot of people doing fine,” Kristjansson said. “It’s nearly impossible to say when enough is enough; alongside every measure that is taken, there are fresh demands for further action.”
As a precursor to the global Occupy Wall Street movement and austerity protests across Europe, Icelanders took to the streets after the economic collapse in 2008. Protests escalated in early 2009, forcing police to use teargas to disperse crowds throwing rocks at parliament and the offices of then Prime Minister Geir Haarde. Parliament is still deciding whether to press ahead with an indictment that was brought against him in September 2009 for his role in the crisis.
A new coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir, was voted into office in early 2009. The authorities are now investigating most of the main protagonists of the banking meltdown.
Legal Aftermath
Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.
Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.
That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.
The U.S. subprime crisis sent home prices plunging 33 percent from a 2006 peak. While households there don’t face the same degree of debt relief as that pushed through in Iceland, President Barack Obama this month proposed plans to expand loan modifications, including some principal reductions.
According to Christensen at Danske Bank, “the bottom line is that if households are insolvent, then the banks just have to go along with it, regardless of the interests of the banks.”
–Editors: Jonas Bergman, Tasneem Brogger.
To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.
To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.nethttp://tourism9.com/ http://vkins.com/
By Omar R. Valdimarsson
Feb. 20 (Bloomberg) — Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.
Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.
“You could safely say that Iceland holds the world record in household debt relief,” said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. “Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”
The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders don’t want to join the European Union, where the debt crisis is in its third year.
The island’s households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.
Crisis Lessons
“The lesson to be learned from Iceland’s crisis is that if other countries think it’s necessary to write down debts, they should look at how successful the 110 percent agreement was here,” said Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, in an interview. “It’s the broadest agreement that’s been undertaken.”
Without the relief, homeowners would have buckled under the weight of their loans after the ratio of debt to incomes surged to 240 percent in 2008, Matthiasson said.
Iceland’s $13 billion economy, which shrank 6.7 percent in 2009, grew 2.9 percent last year and will expand 2.4 percent this year and next, the Paris-based OECD estimates. The euro area will grow 0.2 percent this year and the OECD area will expand 1.6 percent, according to November estimates.
Housing, measured as a subcomponent in the consumer price index, is now only about 3 percent below values in September 2008, just before the collapse. Fitch Ratings last week raised Iceland to investment grade, with a stable outlook, and said the island’s “unorthodox crisis policy response has succeeded.”
People Vs Markets
Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.
Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.
Activists say the banks should go even further in their debt relief. Andrea J. Olafsdottir, chairman of the Icelandic Homes Coalition, said she doubts the numbers provided by the banks are reliable.
“There are indications that some of the financial institutions in question haven’t lost a penny with the measures that they’ve undertaken,” she said.
Fresh Demands
According to Kristjan Kristjansson, a spokesman for Landsbankinn hf, the amount written off by the banks is probably larger than the 196.4 billion kronur ($1.6 billion) that the Financial Services Association estimates, since that figure only includes debt relief required by the courts or the government.
“There are still a lot of people facing difficulties; at the same time there are a lot of people doing fine,” Kristjansson said. “It’s nearly impossible to say when enough is enough; alongside every measure that is taken, there are fresh demands for further action.”
As a precursor to the global Occupy Wall Street movement and austerity protests across Europe, Icelanders took to the streets after the economic collapse in 2008. Protests escalated in early 2009, forcing police to use teargas to disperse crowds throwing rocks at parliament and the offices of then Prime Minister Geir Haarde. Parliament is still deciding whether to press ahead with an indictment that was brought against him in September 2009 for his role in the crisis.
A new coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir, was voted into office in early 2009. The authorities are now investigating most of the main protagonists of the banking meltdown.
Legal Aftermath
Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.
Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.
That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.
The U.S. subprime crisis sent home prices plunging 33 percent from a 2006 peak. While households there don’t face the same degree of debt relief as that pushed through in Iceland, President Barack Obama this month proposed plans to expand loan modifications, including some principal reductions.
According to Christensen at Danske Bank, “the bottom line is that if households are insolvent, then the banks just have to go along with it, regardless of the interests of the banks.”
–Editors: Jonas Bergman, Tasneem Brogger.
To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.
To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.nethttp://tourism9.com/ http://vkins.com/
2012年2月17日星期五
i-ASEAN News Network – Loans Out for Flood-hit Businesses Next Month
The central bank is set to roll out 300 billion baht in soft loans as financial assistance for SMEs and individual business operators hit by the recent flooding in early March.
Commercial banks will be slapped with a higher interest rate if their loan issuances are not in compliance with the regulations.
The Bank of Thailand is set to issue 300 billion baht in soft loans to provide financial assistance for victims of the recent floods in accordance with an executive loan decree. The period of the loan program is five years.
Of the total amount, 210 billion baht is being funded by the central bank, while the rest will come from financial institutions’ contributions.
Bank of Thailand Assistant Governor for the Financial Markets Operations Group, Pongpen Ruengvirayudh expects the list of provinces designated as flood disaster zones to be announced by the Finance Ministry today. Financial institutions have been advised to notify the central bank of the loan amount they will require within two weeks of the announcement.
She said the funds will be transferred to the banks within three days of the central bank’s receiving of their requests and that they can begin offering the loans to individual clients in early March.
Eligible borrowers must be SME companies or individual business operators that were affected by the recent flooding. An SME borrower will be entitled to a maximum 30 million baht loan, while loans for individuals are limited to one million baht.
The Bank of Thailand will charge an annual interest rate of 0.01 percent from financial institutions, while the financial institutions are allowed to charge borrowers an interest rate of no more than three percent.
Commercial banks will be liable to paying an interest rate of ten percent as a penalty should they be found to be issuing loans that are not in compliance with the central bank’s regulations. They will also be solely responsible for any risks or liabilities involved in issuing such loans.
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Commercial banks will be slapped with a higher interest rate if their loan issuances are not in compliance with the regulations.
The Bank of Thailand is set to issue 300 billion baht in soft loans to provide financial assistance for victims of the recent floods in accordance with an executive loan decree. The period of the loan program is five years.
Of the total amount, 210 billion baht is being funded by the central bank, while the rest will come from financial institutions’ contributions.
Bank of Thailand Assistant Governor for the Financial Markets Operations Group, Pongpen Ruengvirayudh expects the list of provinces designated as flood disaster zones to be announced by the Finance Ministry today. Financial institutions have been advised to notify the central bank of the loan amount they will require within two weeks of the announcement.
She said the funds will be transferred to the banks within three days of the central bank’s receiving of their requests and that they can begin offering the loans to individual clients in early March.
Eligible borrowers must be SME companies or individual business operators that were affected by the recent flooding. An SME borrower will be entitled to a maximum 30 million baht loan, while loans for individuals are limited to one million baht.
The Bank of Thailand will charge an annual interest rate of 0.01 percent from financial institutions, while the financial institutions are allowed to charge borrowers an interest rate of no more than three percent.
Commercial banks will be liable to paying an interest rate of ten percent as a penalty should they be found to be issuing loans that are not in compliance with the central bank’s regulations. They will also be solely responsible for any risks or liabilities involved in issuing such loans.
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2012年2月13日星期一
Student loans always are due, no matter how long overdue
By Kathy Lynn Gray
The Columbus Dispatch Monday February 13, 2012 5:24 AM
If you think the student loan you took out years ago but never repaid won’t come back to haunt you, think again.The Columbus Dispatch Monday February 13, 2012 5:24 AM
The debt could land you in federal court, pleading your case before a U.S. district judge.
“There’s no statute of limitations on student loans,” warned Assistant U.S. Attorney Deborah F. Sanders. “That debt is growing, and you still owe it.”
Sanders handles the student-loan default cases that come through the U.S. attorney’s office for the southern half of Ohio. Her office is pursuing about 400 cases.
“We get them because the (federal) Education Department has not been able to collect after many, many attempts,” Sanders said. “If it comes to our office, borrowers have had a lot of chances to pay.”
Defendants fall into two camps: those who don’t pay, and those who can’t, she said.
Usually the loans are years overdue, sometimes as long as 20 years. By that time, a large chunk of the money owed is interest that has accrued and compounded over the years.
In one case filed last year, the defendant owed $160,000, including nearly $25,000 in accrued interest on the 10-year-old loan. On another 10-year-old loan, nearly $40,000 of the $101,000 owed was interest.
If federal lawyers obtain a judgment against a debtor, the government can collect the money in a variety of ways. Wages and savings and checking accounts can be garnisheed, and tax refunds can be diverted, Sanders said. “We have a pretty good rate of collection.”
The court also can set up payment plans once a judgment has been made.
Unlike many other types of debt, student loans cannot be dismissed through bankruptcy except in rare situations, said Stephanie Dailey, a Columbus lawyer who specializes in bankruptcies.
“It’s almost impossible to get out of student-loan debt,” Dailey said. A debtor has to have a dire hardship, such as being completely disabled, she said.
About half the people who come to her with financial difficulties have student-loan debt, Dailey said. She advises them to approach the lender and try to get on a payment plan so that interest doesn’t continue to pile up.
“A lot of people will just stick their head in the sand and hope it’ll go away,” she said. “ Instead, they should let the creditor know they’re having trouble paying and ask for help.”
Dailey herself has nearly $100,000 in student-loan debt from law school. She has deferred her loans — postponed paying them with the blessing of the lender — when paychecks were lean. Interest continues to accrue during a deferral, but the lender won’t turn the loan over to collectors.
The number of student-loan defaults that went to federal court rose significantly in the late 1990s as the Justice Department pushed for collection. Nationwide, 1,142 default cases were filed in 1995; that number surged to 24,404 by 2000. But the number has fallen back since then as the Education Department has set up other ways to collect the debts, Sanders said.
At the same time, students are taking on more debt to attend college. In 2010, the average was $25,250, up 5 percent from the previous year, according to a study by the Project on Student Debt. The average in Ohio was $27,713. An estimated $1 trillion in total student loans is outstanding nationwide.
The default rate in 2009, the most-recent data available, was 8.8 percent. That includes borrowers with loan repayments due between Oct. 1, 2008, and Sept. 30, 2009. An estimate of the total amount of loan money in default is not available.
A survey released last week by the National Association of Consumer Bankruptcy Attorneys found that 81 percent of bankruptcy lawyers said the number of potential clients with student-loan debt has increased “significantly” or “somewhat” in the past three or four years.
The association thinks that student-loan debt could create an economic threat to the country as serious as the home-mortgage crisis did in the late 2000s.
kgray@dispatch.com
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College Goal Sunday
http://tourism9.cm/ http://vkins.com/
Updated: Sunday, 12 Feb 2012, 10:13 PM EST
Published : Sunday, 12 Feb 2012, 10:13 PM EST
Updated: Sunday, 12 Feb 2012, 10:13 PM EST
Published : Sunday, 12 Feb 2012, 10:13 PM EST
Fort Wayne, Ind. (WANE) – The government gives out billions of dollars for students to go to college. That even includes student loans.
Dian Suarez and his mother came to College Goal Sunday. This program is to help families fill out their Free Application for Federal Student Aid form, or FAFSA form online. Suarez is a freshman at I.P.F.W. He found out he didn’t have to take out any loans.
“I got lucky and I was able to get enough to pay for what I needed,” he said.
Many students need and rely on student loans to pay for their education. Suarez said if he’s faced with taking out a loan, he hopes to have a job waiting on him before he graduates.
“I’ll have to make sure I have a job and be able to pay it back eventually,” Suarez said.
Martin Murphy with I.P.F.W. said in this economy, finding a job isn’t so easy, which makes it harder on graduates to pay back loans.
“They’re graduating here out of college and they’re looking six to 12 months looking for a job and see, those students loans start kicking in,” Murphy said.
That’s why he stresses students should use their loans responsibly, such as on tuition and room and board, instead on a new car or new furniture for an apartment.
Murphy said it usually takes graduates between 10 to 15 years to completely pay back their loans, that’s if there’s no stop in payment. Usually, if you can’t find a job within the six month grace period or don’t make enough money to pay back your student loans, for federal loans, you can postpone payment. Sometimes, without penalty.
The deadline for completing the FAFSA form is March 10th. The deadline to make any changes to your FAFSA is May 15th.
Dian Suarez and his mother came to College Goal Sunday. This program is to help families fill out their Free Application for Federal Student Aid form, or FAFSA form online. Suarez is a freshman at I.P.F.W. He found out he didn’t have to take out any loans.
“I got lucky and I was able to get enough to pay for what I needed,” he said.
Many students need and rely on student loans to pay for their education. Suarez said if he’s faced with taking out a loan, he hopes to have a job waiting on him before he graduates.
“I’ll have to make sure I have a job and be able to pay it back eventually,” Suarez said.
Martin Murphy with I.P.F.W. said in this economy, finding a job isn’t so easy, which makes it harder on graduates to pay back loans.
“They’re graduating here out of college and they’re looking six to 12 months looking for a job and see, those students loans start kicking in,” Murphy said.
That’s why he stresses students should use their loans responsibly, such as on tuition and room and board, instead on a new car or new furniture for an apartment.
Murphy said it usually takes graduates between 10 to 15 years to completely pay back their loans, that’s if there’s no stop in payment. Usually, if you can’t find a job within the six month grace period or don’t make enough money to pay back your student loans, for federal loans, you can postpone payment. Sometimes, without penalty.
The deadline for completing the FAFSA form is March 10th. The deadline to make any changes to your FAFSA is May 15th.
Interest rates for common student loan could double this summer
Break’s over.
For the last five years, Congress has cut students a break on the interest rate for unsubsidized student loans, the most popular kind used at Ball State. Starting in July, if the low rate of 3.4 percent isn’t reinstated, it could go back to 6.8 percent, which represents an average $2,000 increase over the course of paying back the loan.
In 2007, the College Cost Reduction and Access Act was passed, which reduced the rate to 3.4 percent for undergraduate students. It was meant to help make college more affordable during poor economic times. Now the plan is about to expire.
“They only had a five-year plan,” said John McPherson, director of Ball State’s Scholarships and Financial Aid. “And now the only way to keep the cost low is to come up with more money to pay for it.”
Rep. Joe Courtney (R-Calif.) recently introduced a bill to keep the rate at 3.4 percent, and President Barack Obama has said he wants to keep it for at least a year.
“A college education is key to success in today’s economy,” said Courtney in a press release on his website. “But for many students, the spiraling costs of higher education are creating an immense barrier.”
For the average student using a subsidized Stafford Loan, it could means about a $2,000 increase over 10 years, according to information from the National Association of Student Financial Aid Administrators.
“If you look at averages, obviously a college degree provides opportunities you can never get anywhere else,” McPherson said. “Over the life of a person, it’s not going to be huge.”
Sophomore Joseph Dimaggio uses loans and grants to pay for college, and since he decided to add a second major, he anticipates being in college an extra two and a half years. He said he’s afraid that he’ll have to spend several years paying back his loans before he can start to settle down.
“There are a lot of things I’d rather do with $2,000,” he said.
He said he wants to become an actuarial scientist, and he said it’s important to know what jobs are in demand.
“We hit such a low,” he said. “And I have a lot of friends that are older and overqualified for the job they have, especially in teaching.”
Last academic year, about 10,400 Ball State students used subsidized Stafford loans. Altogether, they borrowed $44 million.
Even if the interest rate is brought back to 6.8 percent, McPherson said this is the best deal for most students, especially if this is their first time taking out a loan. Private lenders might deny them, or give them a higher interest rate, McPherson said.
Perkins loans have a fixed 5 percent interest. But they are for extremely needy students, and not many people qualify, he said.
With a subsidized loan, the federal government absorbs the interest while a student is in college and six months afterward. If the CCRAA program is abolished, students would be responsible for the interest accumulated during the six months after they graduate.
With unsubsidized loans, students pay the interest that is built up during college and during the six-month grace period after graduation. The government uses a formula to determine a student’s need and how much money they will receive with each type of loan. The formula includes factors like income, family size, number of people already in college and the family’s assets.
Every year, two thirds of Ball State students borrow some kind of loan, McPherson said. In 2010-2011, undergrads were leaving college with an average debt of $24,121.
Rob Tyler, an adjunct professor of personal finance and the founder of Tyler Wealth Management, offered examples of how this would impact students. His estimate: not very much.
To repay the average student loan over 10 years with an interest rate of 3.4 percent, the monthly payment is about $237.59. At a rate of 6.8 percent, the monthly payment jumps to $277.79, an increase of just $40.20.
Tyler crunched a few numbers based on loan information from the Ball State Credit Union.
The interest rate for a loan from the credit union on a new car, for example, is 2.99 percent. In order to offset the extra $40.20 a student is paying back on student loans, and with the interest rate for a new car taken into consideration, they would need to buy a car that costs $2,237 less than what they had previously budgeted.
On a loan for a new house, Tyler used a 4.5 percent fixed interest rate on a 30-year mortgage for his example. In that case, to accommodate the extra $40.20 a month in student loans, he or she would want to buy a house that’s about $8,000 less than they budgeted — not a huge amount relative to a $200,000 home.
“You have to think, what’s my sacrifice?” Tyler said. “Your college education is going to last you a lifetime.”
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For the last five years, Congress has cut students a break on the interest rate for unsubsidized student loans, the most popular kind used at Ball State. Starting in July, if the low rate of 3.4 percent isn’t reinstated, it could go back to 6.8 percent, which represents an average $2,000 increase over the course of paying back the loan.
In 2007, the College Cost Reduction and Access Act was passed, which reduced the rate to 3.4 percent for undergraduate students. It was meant to help make college more affordable during poor economic times. Now the plan is about to expire.
“They only had a five-year plan,” said John McPherson, director of Ball State’s Scholarships and Financial Aid. “And now the only way to keep the cost low is to come up with more money to pay for it.”
Rep. Joe Courtney (R-Calif.) recently introduced a bill to keep the rate at 3.4 percent, and President Barack Obama has said he wants to keep it for at least a year.
“A college education is key to success in today’s economy,” said Courtney in a press release on his website. “But for many students, the spiraling costs of higher education are creating an immense barrier.”
For the average student using a subsidized Stafford Loan, it could means about a $2,000 increase over 10 years, according to information from the National Association of Student Financial Aid Administrators.
“If you look at averages, obviously a college degree provides opportunities you can never get anywhere else,” McPherson said. “Over the life of a person, it’s not going to be huge.”
Sophomore Joseph Dimaggio uses loans and grants to pay for college, and since he decided to add a second major, he anticipates being in college an extra two and a half years. He said he’s afraid that he’ll have to spend several years paying back his loans before he can start to settle down.
“There are a lot of things I’d rather do with $2,000,” he said.
He said he wants to become an actuarial scientist, and he said it’s important to know what jobs are in demand.
“We hit such a low,” he said. “And I have a lot of friends that are older and overqualified for the job they have, especially in teaching.”
Last academic year, about 10,400 Ball State students used subsidized Stafford loans. Altogether, they borrowed $44 million.
Even if the interest rate is brought back to 6.8 percent, McPherson said this is the best deal for most students, especially if this is their first time taking out a loan. Private lenders might deny them, or give them a higher interest rate, McPherson said.
Perkins loans have a fixed 5 percent interest. But they are for extremely needy students, and not many people qualify, he said.
With a subsidized loan, the federal government absorbs the interest while a student is in college and six months afterward. If the CCRAA program is abolished, students would be responsible for the interest accumulated during the six months after they graduate.
With unsubsidized loans, students pay the interest that is built up during college and during the six-month grace period after graduation. The government uses a formula to determine a student’s need and how much money they will receive with each type of loan. The formula includes factors like income, family size, number of people already in college and the family’s assets.
Every year, two thirds of Ball State students borrow some kind of loan, McPherson said. In 2010-2011, undergrads were leaving college with an average debt of $24,121.
Rob Tyler, an adjunct professor of personal finance and the founder of Tyler Wealth Management, offered examples of how this would impact students. His estimate: not very much.
To repay the average student loan over 10 years with an interest rate of 3.4 percent, the monthly payment is about $237.59. At a rate of 6.8 percent, the monthly payment jumps to $277.79, an increase of just $40.20.
Tyler crunched a few numbers based on loan information from the Ball State Credit Union.
The interest rate for a loan from the credit union on a new car, for example, is 2.99 percent. In order to offset the extra $40.20 a student is paying back on student loans, and with the interest rate for a new car taken into consideration, they would need to buy a car that costs $2,237 less than what they had previously budgeted.
On a loan for a new house, Tyler used a 4.5 percent fixed interest rate on a 30-year mortgage for his example. In that case, to accommodate the extra $40.20 a month in student loans, he or she would want to buy a house that’s about $8,000 less than they budgeted — not a huge amount relative to a $200,000 home.
“You have to think, what’s my sacrifice?” Tyler said. “Your college education is going to last you a lifetime.”
http://tourism9.cm/ http://vkins.com/
2012年2月10日星期五
Draghi Slams Bankers’ Shunning ECB Three-Year Loans
February 10, 2012, 4:47 AM EST
By Aaron Kirchfeld and Liam Vaughan
(Corrects statement on internal discussions on loans to show it was made by ING CEO, not UBS, in fourth paragraph.)
Feb. 10 (Bloomberg) — European Central Bank President Mario Draghi lashed out at bankers who said tapping the ECB’s three-year-loan program carries a stigma, after executives including Deutsche Bank AG’s Josef Ackermann said they shunned the loans.
“There is no stigma whatsoever on these facilities,” Draghi said at a press conference in Frankfurt yesterday. “Some have made some sort of statements that I would call statements of virility, namely it would be undignified for a bank, a serious bank, to access these facilities. Now let me say that the very same banks that made these statements access facilities of different kinds — but still government facilities.”
The statements by Draghi, who didn’t identify any banks by name, came a week after Deutsche Bank Chief Executive Officer Ackermann said Germany’s biggest lender didn’t tap the ECB in December because it could damage its reputation with customers. The ECB awarded 489 billion euros ($650 billion) in loans to 523 banks on Dec. 21 to keep credit flowing to the economy as Europe’s debt crisis drove up banks’ borrowing costs. The ECB will offer a second batch of the loans this month.
ING Groep NV CEO Jan Hommen told reporters on a conference call yesterday that the biggest Dutch financial-services company didn’t take the loans in December, partly because of reputational risk. It’s discussing internally whether to take loans in the second program, he said.
Credit Suisse Group AG, Switzerland’s second-biggest bank, didn’t access the ECB’s lending program in December and won’t in the future, CEO Brady Dougan said yesterday in a Bloomberg Television interview.
‘Careless at Best’
Sergio Ermotti, the CEO of UBS AG, told analysts and journalists on Feb. 7 that the largest Swiss bank didn’t borrow from the ECB because its funding and financial position didn’t make it necessary.
Some analysts said avoiding the loans is self-defeating.
The last offering “has removed any stigma, making managements who do not exploit the value on offer arguably careless at best,” Credit Suisse analysts led by William Porter wrote in a Jan. 16 report to clients.
Banks in peripheral European countries such as Greece, Spain and Italy have been harder hit by the sovereign-debt crisis, driving up their funding costs in lockstep with the countries’, while lenders in Germany and Switzerland have been less affected.
‘Virtuous’ Governments
The banking and funding crisis “originates from a sovereign crisis, and so the banks that happen to be located in governments that have no fiscal crisis, that have always done the right reforms, should give more credit to their governments really for having been virtuous all along,” Draghi said.
Intesa Sanpaolo SpA, Italy’s second-biggest bank, took 12 billion euros from the ECB in December and expects to participate in the February auction, CEO Enrico Tommaso Cucchiani told reporters in Milan on Feb. 7. The loans were “essential for some banks” and “useful for other banks, including Intesa,” Cucchiani said. In Spain, Banco Bilbao Vizcaya Argentaria SA, the country’s second-biggest lender, announced it borrowed 11 billion euros from the ECB in December.
In the U.K., Royal Bank of Scotland Group Plc borrowed 5 billion pounds ($7.9 billion) in the December auction, a person familiar with the matter said, while HSBC Holdings Plc took an undisclosed sum, said a person at the bank. Spokesmen at the companies declined to comment.
Societe Generale SA, BNP Paribas SA and Credit Agricole SA, France’s three largest banks, also participated for an undisclosed amount, according to a Morgan Stanley note published Jan. 18 based on conversations with the lenders. Spokesmen at the banks declined to comment.
Lesson Learned
Ackermann told analysts on Feb. 2 that Frankfurt-based Deutsche Bank may consider participating in the next round of ECB loans if it is “very attractive from an economic point of view.” The German lender has impressed customers by not requiring direct government aid during the financial crisis, Ackermann said.
“The fact that we have never taken any money from the government has made us from a reputational point of view so attractive to so many clients in the world that we would be very reluctant to give that up,” said Ackermann, 64.
Deutsche Bank’s decision to avoid the loans follows the disclosure of its borrowings from the U.S. Federal Reserve’s emergency-loan program during the credit crunch in 2008.
“We learned our lesson during the Fed activity, where we were encouraged to borrow money from the Fed on a confidential level and later on the list was disclosed, and we heard that we had to accept help from the government,” Ackermann said. “We just don’t want to do that, and that’s why we have not participated.”
–Editor: Frank Connelly, James Hertling
To contact the reporters on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net; To contact the reporters on this story: Liam Vaughan in London at lvaughan6@bloomberg.net
To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net
http://tourism9.com/ http://vkins.com/
By Aaron Kirchfeld and Liam Vaughan
(Corrects statement on internal discussions on loans to show it was made by ING CEO, not UBS, in fourth paragraph.)
Feb. 10 (Bloomberg) — European Central Bank President Mario Draghi lashed out at bankers who said tapping the ECB’s three-year-loan program carries a stigma, after executives including Deutsche Bank AG’s Josef Ackermann said they shunned the loans.
“There is no stigma whatsoever on these facilities,” Draghi said at a press conference in Frankfurt yesterday. “Some have made some sort of statements that I would call statements of virility, namely it would be undignified for a bank, a serious bank, to access these facilities. Now let me say that the very same banks that made these statements access facilities of different kinds — but still government facilities.”
The statements by Draghi, who didn’t identify any banks by name, came a week after Deutsche Bank Chief Executive Officer Ackermann said Germany’s biggest lender didn’t tap the ECB in December because it could damage its reputation with customers. The ECB awarded 489 billion euros ($650 billion) in loans to 523 banks on Dec. 21 to keep credit flowing to the economy as Europe’s debt crisis drove up banks’ borrowing costs. The ECB will offer a second batch of the loans this month.
ING Groep NV CEO Jan Hommen told reporters on a conference call yesterday that the biggest Dutch financial-services company didn’t take the loans in December, partly because of reputational risk. It’s discussing internally whether to take loans in the second program, he said.
Credit Suisse Group AG, Switzerland’s second-biggest bank, didn’t access the ECB’s lending program in December and won’t in the future, CEO Brady Dougan said yesterday in a Bloomberg Television interview.
‘Careless at Best’
Sergio Ermotti, the CEO of UBS AG, told analysts and journalists on Feb. 7 that the largest Swiss bank didn’t borrow from the ECB because its funding and financial position didn’t make it necessary.
Some analysts said avoiding the loans is self-defeating.
The last offering “has removed any stigma, making managements who do not exploit the value on offer arguably careless at best,” Credit Suisse analysts led by William Porter wrote in a Jan. 16 report to clients.
Banks in peripheral European countries such as Greece, Spain and Italy have been harder hit by the sovereign-debt crisis, driving up their funding costs in lockstep with the countries’, while lenders in Germany and Switzerland have been less affected.
‘Virtuous’ Governments
The banking and funding crisis “originates from a sovereign crisis, and so the banks that happen to be located in governments that have no fiscal crisis, that have always done the right reforms, should give more credit to their governments really for having been virtuous all along,” Draghi said.
Intesa Sanpaolo SpA, Italy’s second-biggest bank, took 12 billion euros from the ECB in December and expects to participate in the February auction, CEO Enrico Tommaso Cucchiani told reporters in Milan on Feb. 7. The loans were “essential for some banks” and “useful for other banks, including Intesa,” Cucchiani said. In Spain, Banco Bilbao Vizcaya Argentaria SA, the country’s second-biggest lender, announced it borrowed 11 billion euros from the ECB in December.
In the U.K., Royal Bank of Scotland Group Plc borrowed 5 billion pounds ($7.9 billion) in the December auction, a person familiar with the matter said, while HSBC Holdings Plc took an undisclosed sum, said a person at the bank. Spokesmen at the companies declined to comment.
Societe Generale SA, BNP Paribas SA and Credit Agricole SA, France’s three largest banks, also participated for an undisclosed amount, according to a Morgan Stanley note published Jan. 18 based on conversations with the lenders. Spokesmen at the banks declined to comment.
Lesson Learned
Ackermann told analysts on Feb. 2 that Frankfurt-based Deutsche Bank may consider participating in the next round of ECB loans if it is “very attractive from an economic point of view.” The German lender has impressed customers by not requiring direct government aid during the financial crisis, Ackermann said.
“The fact that we have never taken any money from the government has made us from a reputational point of view so attractive to so many clients in the world that we would be very reluctant to give that up,” said Ackermann, 64.
Deutsche Bank’s decision to avoid the loans follows the disclosure of its borrowings from the U.S. Federal Reserve’s emergency-loan program during the credit crunch in 2008.
“We learned our lesson during the Fed activity, where we were encouraged to borrow money from the Fed on a confidential level and later on the list was disclosed, and we heard that we had to accept help from the government,” Ackermann said. “We just don’t want to do that, and that’s why we have not participated.”
–Editor: Frank Connelly, James Hertling
To contact the reporters on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net; To contact the reporters on this story: Liam Vaughan in London at lvaughan6@bloomberg.net
To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net
http://tourism9.com/ http://vkins.com/
2012年2月7日星期二
Sanoma's Financial Statement Release 2011: Year of solid performance and structural changes in volatile markets
Financial Statement Release 7/2/2012 8:30
Fourth quarter
- Net sales in the fourth quarter amounted to EUR 725.4 million (2010: EUR 717.3 million). Adjusted for changes in the Group structure, Sanoma`s net sales decreased by 1.8%.
- Operating profit excluding non-recurring items was EUR 60.6 million (2010: EUR 34.5 million).
- Non-recurring items in the fourth quarter amounted to EUR -8.7 million (2010: EUR -7.2 million) and consisted mainly of sales gains, restructuring expenses, including pension and exit packages, and write-downs of ICT assets.
- Earnings per share were EUR 0.11 (2010: EUR -0.01). EPS excluding non-recurring items was EUR 0.18 (2010: EUR 0.04).
2011
- Annual net sales amounted to EUR 2,746.2 million (2010: EUR 2,761.2 million). Adjusted for changes in the Group structure, Sanoma`s net sales increased by 0.3%.
- Operating profit excluding non-recurring items totalled EUR 239.1 million (2010: EUR 245.4 million).
- Cash flow from operations was EUR 273.8 million (2010: EUR 273.8 million).
- Earnings per share were EUR 0.52 (2010: EUR 1.85). EPS excluding non-recurring items was EUR 0.87 (2010: EUR 0.94).
- The Board of Directors proposes a dividend of EUR 0.60 per share.
- In 2012, Sanoma expects its net sales to grow slightly, mostly due to the acquired SBS operations in the Netherlands and Belgium. Operating profit margin, excluding non-recurring items, is estimated to be around 10% of net sales. Earnings per share excluding non-recurring items are estimated to grow.
* Including finance leases
** Year 2011 proposal of the Board of Directors
Harri-Pekka Kaukonen, President and CEO
“The year 2011 was one of solid performance and strong portfolio management. Our strategy to focus on consumer media and learning was demonstrated by these changes in the portfolio. I am especially pleased with being able to enhance our positions in consumer media in the Netherlands and Belgium through the acquisition of SBS.
In the fourth quarter, despite increased economic uncertainty, we were able to report a solid set of numbers. This clearly demonstrates our ability to adapt quickly to changes in the environment. The significant increase in our operating profit and cash flows was achieved as a combination of continued streamlining of our operations and structural changes, in accordance with our set priorities.
Sanoma is transforming and we will further deepen our understanding of customer behaviour, accelerate the speed of digital development through strengthening our multi-channel approach, foster innovation and improve the efficiency of our operations.
For the next three years, we have set the following priorities: ensure financial flexibility by streamlining operating expenses and continuing to dispose of non-core assets; develop our print businesses to ensure competitiveness and successful digitisation; ensure profitable organic growth of our TV and learning businesses; and to create growth from new digital services.”
Outlook for 2012
In 2012, Sanoma expects its net sales to grow slightly, mostly due to the acquired SBS operations in the Netherlands and Belgium. Operating profit margin, excluding non-recurring items, is estimated to be around 10% of net sales. Earnings per share excluding non-recurring items are estimated to grow.
Sanoma`s net sales and result are affected by the underlying environment, particularly by the development of advertising markets in the Group`s countries of operation. The 2012 outlook is based on the assumption that the advertising markets in the Group`s main operating countries will vary from stable to slightly decreasing, as the economic uncertainty continues.
Net sales
Fourth quarter
In the fourth quarter of 2011, Sanoma`s net sales increased by 1.1% and amounted to EUR 725.4 million (2010: EUR 717.3 million). The growth came mainly from the acquired TV and print operations in the Netherlands and Belgium. Currency translations did not have a material effect on fourth quarter sales. When adjusted for changes in the Group structure, net sales decreased by 1.8%.
Print circulation sales grew by 0.8%. Subscription sales increased by 6.7%, but single copy sales decreased by 6.7%.
Advertising sales increased by 43.6%, mostly due to acquired TV operations in the Netherlands and Belgium as well as the good performance of Nelonen Media broadcasting operations in Finland. Online advertising sales increased by 8.7%. In total, advertising sales accounted for 36.6% (2010: 25.8%) of the Group`s net sales.
The TV acquisitions also impacted on Sanoma`s digital sales, which grew by 105.4% in the fourth quarter and accounted for 24.5% (2010: 12.1%) of the Group`s net sales. Broadband access and cable TV services in Finland, which were divested in June 2010, are not included in the digital sales of the comparable period.
2011
In January-December, Sanoma`s net sales were stable and amounted to EUR 2,746.2 million (2010: 2,761.2) as the acquired operations compensated for the effects of the divestments made in 2011 and 2010. The growth in Media came mainly from the acquired TV operations in the Netherlands and increased sales of Nelonen Media in Finland, more than offsetting in June 2010 divested Finnish broadband access and cable TV services. The decrease in Trade`s net sales was related to the divestment of operations. Net sales were at the comparable year`s level in News, whereas in Learning they decreased slightly as a result of divestment and lower sales from non-core operations. Currency translations did not have a material effect on the 2011 net sales. Adjusted for structural changes, net sales increased by 0.3%.
Advertising sales grew strongly during the first half of 2011, whereas the development during second part of year was adversely affected by the increasing economic uncertainty. Annual advertising sales grew by 23.3%.
In 2011, online sales grew by 13.8% to EUR 156.1 million. Total digital sales, including also TV and e-learning, grew by 52.6%, and amounted to 15.9% (2010: 10.5%) of the Group`s net sales.
The Group`s circulation sales were at the comparable year`s level, as the slight increase in subscription sales offset the decrease in single copy sales.
By country, Finland accounted for 47% (2010: 51%) of the cumulative net sales and the Netherlands 28% (2010: 23%). Net sales from other EU countries totalled 21% (2010: 23%) and non-EU countries accounted for 3% (2010: 3%).
Result
Fourth quarter
Sanoma`s operating profit excluding non-recurring items in October-December increased by 75.6% and totalled EUR 60.6 million (2010: EUR 34.5 million). Structural changes explain the main part of the increase. Operating profit also includes EUR 11.1 million of transaction costs and order backlog amortisations related to the SBS acquisition, which are not categorised as non-recurring. Operating profit excluding non-recurring items amounted to 8.4% (2010: 4.8%) of net sales. Currency translations did not have a material effect on the fourth quarter result.
In the fourth quarter, the Group`s total expenses, excluding non-recurring items, decreased by 8.5% due to structural changes and efficiency measures. Paper costs increased by 3.7% and employee benefit expenses decreased by 2.8%. The Group had 1,760 fewer employees than at the end of 2010, corresponding to a decrease of 11.4%. The decrease in the number of personnel is mostly attributable to the divestment of operations and the closing down of kiosks, partly offset by the acquisition of the SBS operations in the Netherlands and Belgium.
In October-December, the operating profit included EUR -8.7 million (2010: EUR -7.2 million) of non-recurring items consisting mainly of sales gains, restructuring expenses, including voluntary pension and exit packages, and write-downs related to ICT. In the comparable period, non-recurring items consisted of capital gains and non-recurring costs.
As a part of streamlining operations and ensuring competitive cost levels, pension and severance packages have been offered to employees mainly in News, Media Finland, Media Belgium, and Learning during the autumn, and as a result 33 employees have left the company during 2011 and further 225 employees will leave the company during 2012. Related to this, EUR 21.4 million of non-recurring restructuring expenses have been recorded, of which EUR 19.0 million during the fourth quarter.
Sanoma`s fourth quarter result included EUR -2.2 million (2010: EUR -24.0 million) of loss from associated companies. The most important associated companies included in this line are DNA, Hansaprint, Stratosfèra and Helsinki Halli (former Jokerit HC). The comparable quarter was affected by the EUR -22.1 million non-recurring impairment of Hansaprint.
2011
In 2011, Sanoma`s operating profit excluding non-recurring items decreased by -2.6% and totalled EUR 239.1 million (2010: EUR 245.4 million). The operating profit improved in Media and News. The weak development of general literature, divested in October 2011, and Hungarian learning operations lowered the result in Learning. Despite the divestments, Trade`s result was almost at the comparable year`s level. Costs increased significantly in the Group functions due to development projects. In addition, the result includes EUR 34.4 million of transaction costs and order backlog amortisations, which are not categorised as non-recurring, related to the acquisition of the SBS TV and print operations. Currency translations did not have a material effect on the 2011 results.
The non-recurring items included in the operating profit amounted to EUR -56.2 million (2010: EUR 147.3 million) and included impairments of goodwill and intangible assets, restructuring expenses and gain on the sale of assets. A net total amount of some EUR -21 million of non-recurring items were non-taxable. In 2010, non-recurring items related to capital gains from divestments, impairment write-downs as well as restructuring costs, and some EUR 135 million of the net amount of total capital gains and write-downs was non-taxable.
Sanoma`s net financial items totalled EUR -35.2 million (2010: EUR -12.8 million). Financial income amounted to EUR 13.9 million (2010: EUR 11.1 million), of which EUR 9.4 million were exchange rate gains (2010: EUR 7.0 million). Financial expenses amounted to EUR 49.1 million (2010: EUR 23.8 million), of which EUR 16.3 million were exchange rate losses (2010: EUR 8.0 million). Following the increased debt, interest expenses amounted to EUR 28.8 million (2010: EUR 13.3 million).
Profit before taxes amounted to EUR 144.1 million (2010: EUR 356.0 million). The effective tax rate was 40.3% (2010: 16.5%). Earnings per share were EUR 0.52 (2010: EUR 1.85). The effective tax rate and earnings per share were affected mainly by the impairments of goodwill and non-taxable sales gains and losses. The comparable figures were affected by the tax-free non-recurring gain on the sale of the broadband access and cable TV services in Finland.
Sanoma`s 2011 result included EUR -3.7 million (2010: EUR -23.9 million) of profits from associated companies. The most important associated companies included in this line are DNA, Hansaprint, Stratosfèra and Helsinki Halli.
Balance sheet and financial position
At the end of 2011, Sanoma`s consolidated balance sheet totalled EUR 4,328.3 million (2010: EUR 3,203.0 million). In 2011, the Group`s cash flow from operations was EUR 273.8 million (2010: EUR 273.8 million). Cash flow from operations per share was EUR 1.68 (2010: EUR 1.69).
Sanoma`s equity ratio was 37.0% (2010: 45.7%) at the end of 2011. The return on equity (ROE) was 5.9% (2010: 23.0%) and the return of investment (ROI) was 6.8% (2010: 16.2%). In 2010, the divestment of the broadband access and cable TV services in Finland positively affected these ratios. Equity totalled EUR 1,524.2 million (2010: EUR 1,376.0 million). Following the closing of the acquisition of SBS operations in the Netherlands and Belgium, interest-bearing liabilities increased and totalled EUR 1,727.2 million (2010: EUR 941.9 million). Interest-bearing net debt was EUR 1,611.2 million (2010: EUR 877.9 million).
In order to finance the SBS acquisition, Sanoma entered into the following financing facilities: EUR 522 million syndicated term loan for five years, EUR 250 million short term bridge-to-bond facility and EUR 132 million syndicated term loan and revolving credit facility for five years. The latter facility is for the SBS Broadcasting B.V., owned by Sanoma and Dutch Talpa Media as a minority shareholder. The transaction did not affect the financing terms of Sanoma`s previous credit facilities.
Investments, acquisitions and divestments in 2011
In 2011, investments in tangible and intangible assets, including finance leases, amounted to EUR 85.5 million (2010: EUR 85.7 million). Investments were mainly related to ICT systems as well as replacements and renovations. Sanoma`s business acquisitions totalled EUR 1,415.2 million (2010: EUR 37.1 million).
In March, Sanoma sold its movie operations in Finland and the Baltic countries. In 2010, net sales of movie operations were EUR 88.6 million and operating profit stood at EUR 8.4 million. The enterprise value of the transaction was EUR 116.0 million, and the transaction was finalised at the end of April.
In April, Sanoma sold its press distribution and kiosk operations in Romania. In 2010, net sales of these operations amounted to some EUR 23 million. The remaining kiosk operations in Russia were also divested at the beginning of April.
In April, Sanoma agreed to acquire the SBS free-to-air TV assets in the Netherlands and Belgium together with Talpa Media in the Netherlands and Corelio and Wouter Vandenhaute & Eric Watté in Belgium. The enterprise value of the transaction was EUR 1,225 million. The net sales of the acquired companies totalled EUR 404 million in 2010 and their operating profit was some EUR 110 million (pro forma, unaudited). The acquisition in Belgium was finalised on 8 June and the Dutch acquisition on 29 July after the necessary approvals were received from the competition authorities.
In April, Sanoma announced that it will acquire the Finnish educational publisher Tammi Learning and the Swedish educational publisher Bonnier Utbildning, both from the Swedish media company Bonnier. At the same time, Sanoma will divest its Finnish general literature publisher WSOY to Bonnier. The transaction was completed on 3 October.
In August, Sanoma announced the divestment of its bookstore operations in Finland. In 2010, net sales of Sanoma`s Finnish bookstores were EUR 109 million and operating profit EUR 2 million. The divestment was completed on 30 September.
In October, Sanoma announced the divestment of its ownership, 50% of the shares, in the Latvian kiosk and press distribution company Narvesen Baltija. In 2010, the net sales of the company were some EUR 59 million.
In November, Sanoma announced the sale of some 40,000 m2 of residential building rights in Finland. The total value of the transaction is EUR 12.9 million, which will be paid in three installments during 2011-2013.
MEDIA
The Media segment includes magazine, TV and digital businesses in 12 European countries and comprises four strategic business units: Sanoma Media Netherlands, Sanoma Media Finland, Sanoma Media Belgium and Sanoma Media Russia & CEE.
- The SBS acquisition is now completed and the figures are consolidated with the Dutch and Belgian operations.
- Extra effort is put to restore viewing and advertising shares in the Dutch TV market.
* In 2011, the non-recurring items included in the second quarter a EUR 9.1 million gain on sale of Humo and Desert Fishes, in the third quarter a EUR 3.4 million impairment of intangible assets in the Netherlands and a EUR 53.4 million impairment of goodwill and intangible assets in Russia & CEE, and in the fourth quarter EUR 9.8 million restructuring expenses and a EUR 1.6 million write-down of Jok Foe Group. In 2010, the non-recurring items included in the second quarter a EUR 2.6 million gain from selling 49% of the Humo magazine and a EUR 179.0 million gain on the sale of the cable TV operator Welho, in the third quarter a EUR 28.9 million impairment of goodwill in the Dutch press distribution and a EUR 6.3 million impairment of intangible assets in the Dutch media business and in the fourth quarter EUR 3.3 million restructuring expenses in the Netherlands and a EUR 1.0 million impairment of intangible assets in the CEE countries.
* Including joint ventures
Fourth quarter
Net sales in Media grew by 27.1% in October-December following the consolidation of acquired SBS TV and print operations. Adjusted for structural changes, net sales declined by 4.4%.
Advertising sales grew by 66.4% and represented 47.0% (2010: 35.9%) of the fourth quarter net sales. Online advertising sales increased by 8.4%.
Print circulation sales increased by 1.2% and represented 37.5% (2010: 47.1%) of the fourth quarter net sales. An increase in subscription sales, mainly as a result of the consolidated Dutch print operations, more than offset the decrease in single copy sales.
The consolidation of TV operations and growing online advertising sales increased the segment`s digital sales. In total, these sales grew by 154.1% in the fourth quarter and represented 33.5% (2010: 17.0%) of the segment`s total net sales.
In the Netherlands, net sales grew by 70.5%. Most of this growth came from new TV and print operations, part of Sanoma Media Netherlands since 1 August 2011. Magazine operations` sales were at the comparable quarter`s level. In total, circulation sales grew clearly due to acquired operations. Single copy sales were slightly below the comparable period`s level, but subscription sales increased significantly. Circulation sales represented 36.4% (2010: 56.0%) of the Dutch net sales. The declining trends in the readers market continued but Sanoma Media Netherlands` market share remained stable. The Dutch market for consumer magazine advertising, excluding TV guides, decreased by 2.0% in October-December, while Sanoma Media Netherlands` print advertising sales declined slightly in the fourth quarter. Online advertising sales continued to grow clearly, but at a slower pace than in the previous quarters. In total, advertising sales grew significantly following the consolidation of the TV operations, and represented 52.1% (2010: 31.9%) of the Dutch net sales. The TV advertising market in the Netherlands decreased by around 3% in October-December. Sanoma`s TV operations continued to developed in line with the previous quarter.
In Finland, net sales declined by 1.4%, as the clear increase in Nelonen Media, which includes free-to-air TV, pay TV, radio and online, did not fully offset the somewhat declining sales in magazine publishing. During the fourth quarter, the TV advertising market in Finland decreased by 1.7%. Nelonen Media advertising sales outperformed the market. The magazine advertising market decreased by 0.9% in the fourth quarter. Sanoma Media Finland`s advertising sales grew somewhat, driven by increased sales in Nelonen Media. In total, advertising sales of the Finnish operations represented 42.0% (2010: 39.3%) of net sales. Circulation sales were slightly below the comparable quarter`s level, due to declining volumes, and represented 41.9% (2010: 43.6%) of the Finnish net sales.
Net sales in Belgium increased by 15.1%, due to acquired operations. Magazine operations` sales decreased somewhat, when both advertising and circulation sales declined, partly due to structural changes but also related to a decline in consumer confidence and advertising spending. Sanoma Media Belgium retained its market position in a slightly decreasing readers market. The TV advertising market in Belgium declined by 1.7% in the fourth quarter. Sanoma`s TV operations continued to grow and its advertising market share improved to 24.3%. In total, advertising sales represented 34.6% (2010: 27.3%) and circulation sales 45.6% (2010: 56.1%) of the net sales in Belgium, respectively.
There have been a number of structural changes in Sanoma Media Belgium. The reported figures include 51% of the weekly magazine Humo from May 2010 to May 2011. In connection with SBS acquisition, the remaining holding in Humo was transferred to De Vijver, after which 33% of the net result of De Vijver was included in the Belgium figures. Since the Belgium competition authorities approved a joint control structure of De Vijver on 1 September, Sanoma`s 33% share in De Vijver Media (which includes 100% of Humo, the acquired TV operations as well as the TV productions operations of Woestijnvis) is proportionally consolidated line-by-line as of this approval.
In Russia and the CEE countries, net sales decreased by 6.9%, of which more than half explained by negative currency translation effects. The advertising market has been adversely affected by the Euroland economic uncertainty in all markets, especially in Russia and Hungary. Advertising sales in the Russia and CEE business unit decreased somewhat. In total, advertising sales represented 54.5% (2010: 54.9%) of net sales in the Russia and CEE strategic business unit. Following the declining market trends and the regional pressure on consumer purchasing power, single copy sales came down in most countries. Circulation sales decreased therefore clearly, and represented 32.0% (2010: 33.6%) of the strategic business unit`s net sales. The magazine portfolio, internet services and local organisations are continuously optimised according to the market situation.
Operating profit excluding non-recurring items in the Media segment in October-December increased by 77.9%, due to acquired operations. The result includes EUR 11.1 million of transaction costs and order backlog amortisations, which are not categorised as non-recurring, related to the SBS TV and print operations. In the Netherlands, the results improved due to the acquired operations. Adjusted for structural changes, profit in the Netherlands increased somewhat. In Finland, the result decreased, mainly due to a significant drop in the result of magazine operations. In Belgium, the result improved significantly, also when adjusted for structural changes. In Russia and CEE countries, the operational result was at the comparable quarter`s level, as a result of strict cost control. The non-recurring items in the fourth quarter result totalled EUR -11.4 million (2010: EUR -4.8 million) and were mainly related to restructuring expenses.
2011
In January-December, Media`s net sales grew by 8.9%. Growth came from the consolidation of the acquired SBS TV and print operations in the Netherlands and Belgium as well as increased sales of Nelonen Media in Finland, more than offsetting the divestments made in 2010. Adjusted for structural changes, net sales decreased by 0.4%.
Operating profit excluding non-recurring items increased by 3.6%, as increased results in online operations and Finnish TV as well as the consolidation of the acquired operations offset lower results in magazine operations in all business units and effects of divestments in 2010. In addition, the result includes EUR 34.4 million of SBS transaction costs and order backlog amortisations, which are not categorised as non-recurring. Non-recurring items included in the operating profit totalled EUR -59.1 (2010: EUR 142.1 million) and included impairments of goodwill and intangible assets, restructuring expenses and gains on the sale of assets. In the comparable year, non-recurring items were related to gains on the sales of assets, impairments of intangible assets and goodwill as well as restructuring of operations.
Media`s investments in tangible and intangible assets totalled EUR 22.7 million (2010: EUR 25.2 million) and consisted mainly of ICT investments. The most material acquisition in 2011 was the acquisition of the SBS TV and print operations in the Netherlands and Belgium. In 2010, the most significant acquisition was a 21% share in the Finnish telecommunication group DNA in connection with the Welho transaction.
NEWS
The News segment includes the Sanoma News strategic business unit, Finland`s leading player in newspaper publishing and digital media.
- Advertising sales improved clearly in the tabloid Ilta-Sanomat and in free sheets in particular. The Sanoma Kaupunkilehdet business unit improved its market share of the free sheet media market.
- All main brands now also have online and mobile applications and the use of the products in tablet and smart phone devices as well as e-commerce shows significant growth.
* In 2011, the non-recurring items included in the fourth quarter EUR 9.2 million restructuring expenses. In 2010, the non-recurring items included in the first quarter a EUR 6.0 million gain on the sale of Lehtikuva and in the fourth quarter a EUR 2.9 million gain on the sale of Sanoma Lehtimedia`s local papers.
Fourth quarter
In October-December, net sales in News decreased by 2.5%. Adjusted for structural changes, sales decreased by 2.0%.
Print circulation sales decreased by 0.9% in the fourth quarter. Subscription sales decreased by 1.2% but single copy sales were at the comparable quarter`s level. Circulation sales accounted for 41.5% (2010: 40.8%) of the segment`s net sales.
Advertising sales decreased by 4.9%. The 10.3% growth in online advertising sales did not offset somewhat decreasing sales of print advertising. This was in line with the Finnish advertising market development. The market growth, which began in the second half of 2010, is clearly slowing down and according to TNS Gallup Adex, newspaper advertising in the Finnish market decreased by 3.9% in the fourth quarter. Online advertising included in the statistics continued to grow and was up by 18.6%. Advertising sales represented 50.7% (2010: 52.1%) of the net sales in News in the fourth quarter.
Total digital sales increased by 15.4%, boosted by the growth of online advertising and good pick-up in e-commerce. Digital sales consisting mostly of online advertising, but also to larger extent content, represented 13.1% (2010: 11.1%) of the segment`s net sales.
The net sales of the Helsingin Sanomat business unit decreased by 5.1%. The underlying macro-economic uncertainty clearly affected advertising sales. Accordingly, advertising sales decreased and represented 54.6% (2010: 57.2%) of the business unit`s net sales. Subscription sales were stable despite the decreasing trend in the circulation volume. The multichannel use of Helsingin Sanomat continued to grow in the fourth quarter.
The Ilta-Sanomat business unit`s net sales were at the comparable quarter`s level, supported by favourable development in online advertising sales. Advertising sales represented 30.2% (2010: 30.3%) of the business unit`s net sales. Circulation sales were stable. The total volume of the Finnish tabloid market has decreased by 5% in the last 12 months. Ilta-Sanomat`s market share increased to 58.3% (2010: 58.1%) of the tabloid newsstand market.
Net sales from other publishing operations increased by 1.7%, as the good development in Sanoma Digital Finland and free sheets offset the slight decrease in regional papers. Free sheets continued to improve their market positions.
In October-December, News` operating profit excluding non-recurring items increased by 8.6% as a result of strict cost control in all business units. News` operating result in the fourth quarter included EUR -9.2 million (2010: EUR 0.0 million) of non-recurring items, related to voluntary pension and exit packages.
2011
In January-December, News` sales decreased by 0.4%. Adverting sales grew slightly. Digital revenues, consisting mostly of online advertising, but also to larger extent content, continued to develop positively and amounted to 12.1% (2010: 11.6%) of News` total sales. The underlying macro-economic uncertainty during the latter half of the year clearly affected advertising sales adversely and visibility worsened. Circulation sales were at comparable year`s level. Adjusted for structural changes, net sales increased by 1.9%.
Operating profit excluding non-recurring items increased by 4.6% in 2011, mainly as a result of strict cost control in all business units. Non-recurring items included in the operating profit totalled EUR -9.2 million (2010: EUR 8.9 million) and were related to voluntary pension and exit packages.
News` investments in tangible and intangible assets totalled EUR 16.9 million (2010: EUR 14.0 million), and consisted mainly of investments in digital business, ICT and replacement investment in printing. There were no material acquisitions in 2011 or the comparable year. In September 2010, business information and media monitoring service provider Esmerk was transferred from News to language services business unit in Learning.
LEARNING
The Learning segment includes Sanoma`s learning as well as language service and business information operations. Sanoma Learning is a leading European provider of learning materials and solutions in print and digital format.
- The transaction with Bonnier was completed in October and the acquired operations are consolidated in the fourth quarter figures for learning business unit. At the same time, Sanoma divested its Finnish general literature publisher.
* In 2011, the non-recurring items included in the first quarter a EUR 0.9 million non-recurring income related to sale of LDC, in the second quarter EUR 1.7 million restructuring expenses and in the third quarter EUR 1.0 million restructuring expenses and a EUR 24.1 million impairment of goodwill. In the fourth quarter, the non-recurring items included EUR 2.9 million write-down of intangible assets. In 2010, the non-recurring items included in the first quarter a EUR 1.1 million loss on the sale of Bertmark Norge and in the second quarter EUR 1.3 million, in the third quarter EUR 0.2 million and in the fourth quarter EUR 0.8 million restructuring expenses and in the fourth quarter a EUR 2.1 million impairment of a Dutch non-core entity.
Fourth quarter
Net sales in the Learning segment decreased by 19.1% in October-December, mainly related to the divested operations. Adjusted for structural changes, net sales decreased by 4.6%.
The learning business has, by nature, an annual cycle and strong seasonality. It accrues most of its net sales and results during the second and third quarters. Changes between quarters can be significant and often explain most of the changes from the comparable period.
Net sales in learning business increased by 2.8%, mainly related to structural changes. In Hungary, the net sales continued to decrease significantly for the second consecutive quarter as a result of the cuts in the governmental budget and the difficult political situation. In other countries, market conditions remain stable.
Net sales in language services business decreased by 5.6%, due to the disappointing development of translation and localisation services.
Net sales in literature and other businesses decreased by 58.0%, mainly related to the divestment of the Finnish general literature operations as of October 2011.
Operating result excluding non-recurring items in the Learning segment decreased by 37.4%, due to the structural changes. The learning business has strong seasonality within the year, the first and fourth quarter being typically loss-making. For general literature, on the other hand, the fourth quarter is typically the strongest one. Due to this seasonality, the transaction lowered the Learning segment`s fourth quarter result. In Learning, most of the results were accrued already during the second and third quarters. In the comparable quarter, the result was positively affected by a EUR 3 million release in pension provisions. In the fourth quarter 2011, the result included EUR -3.0 million (2010: EUR 2.8 million) of non-recurring items.
2011
In January-December, Learning`s net sales decreased by 2.0%. Adjusted for structural changes, net sales decreased by 1.0%.
Operating profit excluding non-recurring items decreased by 13.4%, mainly related to structural changes. Non-recurring items included in the operating profit totalled EUR -28.9 million (2010: EUR -5.5 million) and consisted mainly of impairment of goodwill in language services, restructuring expenses and write-downs related to ICT. In 2010, the result was positively affected by a EUR 3 million release in pension provisions.
Learning`s investments in tangible and intangible assets totalled EUR 11.5 million (2010: EUR 14.9 million). They comprised mainly investment in ICT. In October, Sanoma completed the acquisition of the Finnish educational publisher Tammi Learning, which is now fully integrated into the Finnish operations and the Swedish educational publisher Bonnier Utbildning (now Sanoma Utbildning) from the Swedish media company Bonnier as well as the divestment of its Finnish general literature publisher WSOY to Bonnier. The most significant transaction in the comparable year was the acquisition of the remaining shares of the e-learning provider YDP in Poland.
TRADE
The Trade segment includes Sanoma`s kiosk operations and trade services in Finland, Estonia and Lithuania.
- Customer volumes and sales of Finnish kiosks showed positive development for the second consecutive quarter and the operational result improved significantly.
- The Finnish press distribution unit Lehtipiste has managed to keep the sales of single copies of magazines at the comparable year`s level contrary to the trend in many other countries.
- Despite the continued challenging economic conditions in the Baltic countries, Trade`s Estonian and Lithuanian businesses improved their performance significantly.
- Bookstore operations in Finland were divested at the end of September and the kiosk and press distribution operations in Latvia in October. The sold operations were deconsolidated as of 1 October.
* In 2011, the non-recurring items included in the second quarter a EUR 0.8 million loss on sale of Russian operations, a EUR 8.0 million loss on sale of Romanian operations, a 51.4 million gain on sale of movie operations and EUR 2.4 restructuring expenses. In the third quarter the non-recurring items included a EUR 10.8 million loss on sale of Suomalainen Kirjakauppa, a EUR 3.1 million write-down of real estates, a EUR 0.8 million impairment in bookstores and EUR 0.4 million restructuring expenses. In the fourth quarter, the non-recurring items included a EUR 5.3 million gain on sale of Narvesen. In 2010, the non-recurring items included in the third quarter EUR 1.0 million restructuring expenses and in the fourth quarter a EUR 2.6 million loss on sale of Russian operations.
Fourth quarter
In October-December, Trade`s net sales decreased by 37.9%, due to the divestment of operations. Net sales adjusted for structural changes increased by 3.2%.
Net sales from kiosk operations were down by 8.2% in the fourth quarter due to the divestment of the Latvian, Russian and Romanian operations. The growth both in net sales and in the number of customers in the comparable part of the kiosk chain in Finland continued, mainly as the result of a major optimisation of the kiosk network and continued performance uplift measures during the past three quarters. Net sales grew in Lithuania and were at the comparable quarter`s level in Estonia.
Trade services` net sales decreased by 16.9% due to the divestment of the Latvian, Russian and Romanian operations. Net sales increased in Finland and Estonia.
Bookstore operations in Finland, divested at the end of September, were no longer included in Trade`s figures in the fourth quarter.
Movie operations, divested at the end of April, were no longer included in Trade`s figures in the second half of 2011.
Trade`s operating profit excluding non-recurring items decreased by 18.7% in October-December due to the divestment of bookstores, where Christmas sales are important. The operational result in kiosk operations improved significantly as a result of increased customer volumes, several efficiency measures and divestments of loss-making operations. The average margin per customer increased, improving the result in Finnish kiosk operations. The result improved also in trade services. Trade`s operating profit in the fourth quarter included EUR 5.3 million (2010: EUR -2.6 million) of non-recurring items, related to the sales gain of the divested operations in Latvia.
2011
In January-December, Trade`s net sales decreased by 17.8% due to the divestments of the Finnish and Baltic movie operations in April, the Romanian kiosk and press distribution operations in April, the remaining Russian kiosk operations in April, the Finnish bookstore operations in September and the Latvian kiosk and press distribution operations in October. Net sales adjusted for structural changes increased by 0.1%.
In 2011, Trade`s operating profit excluding non-recurring items decreased by 1.4%. The positive effects of divesting loss-making operations as well as the improved performance of kiosk operations and trade services compensated almost fully for the loss of result from the divested movie and bookstore operations. The non-recurring items included in Trade`s operating profit totalled EUR 30.4 million (2010: EUR -3.6 million) and consisted mainly of sales gains and losses related to divestments.
Trade`s investments in tangible and intangible assets totalled EUR 32.4 million (2010: EUR 29.7 million), and focused mainly on concept development in kiosks, ICT projects and the renewal of Finnkino`s long-term rental agreements, which alone accounted for close to one half of the investments. There were no material acquisitions in 2011.
THE GROUP
Personnel
In 2011, the average number of persons employed by the Sanoma Group was 17,618 (2010: 19,462). In full-time equivalents, the number of Group employees at the end of the year was 13,646 (2010: 15,405). Divestments and restructuring decreased the number of personnel in 2011. In addition, some of the restructuring measures initiated in 2011 will affect the number of employees also in 2012. In full-time equivalents, Media had 5,844 (2010: 5,419) employees at the end of 2011, News 2,025 (2010: 2,016), Learning 2,489 (2010: 2,656), Trade 3,110 (2010: 5,149) and Group functions 178 (2010: 165).
The total employee benefits to Sanoma employees in 2011, including the expense recognition of options granted, amounted to EUR 549.7 million (2010: 545.9 million).
Dividend
On 31 December 2011, Sanoma Corporation`s distributable funds were EUR 539.8 million, of which profit for the year made up EUR 77.6 million.
The Board of Directors proposes to the Annual General Meeting that:
- A dividend of EUR 0.60 per share, or in total an estimated EUR 97.7 million, shall be paid.
- A sum of EUR 0.55 million shall be transferred to the donation reserve and used at the Board`s discretion.
- The amount left in equity shall be EUR 441.6 million.
In accordance with the Annual General Meeting`s decision, Sanoma paid out a per-share dividend of EUR 1.10 for 2010. Sanoma conducts an active dividend policy and primarily distributes over half of the Group result for the period in dividends.
AGM, Financial Statements and Annual Report
Sanoma Corporation`s AGM will be held on 3 April 2012 at 2 pm at the Congress Wing of the Helsinki Exhibition & Convention Centre, Finland. The agenda for the meeting will be later available on the Group`s website at Sanoma.com.
Sanoma`s annual review, Financial Statements, Board of Directors` Report and Corporate Governance Statement for 2011 will be published in digital format in the Materials section of the Group website during week 10 (the week beginning 5 March). A printed copy of the Annual Report will be available during week 11 (the week beginning 12 March) and can be ordered from the Group website.
Shares and holdings
In 2011, 89,486,428 (2010: 63,477,720) Sanoma shares were traded on the NASDAQ OMX Helsinki. Traded shares accounted for 55% (2010: 39%) of the average number of shares. Sanoma`s total stock exchange turnover was EUR 1,096.9 million (2010: EUR 987.9 million).
The volume-weighted average price of a Sanoma share was EUR 12.30, with a low of EUR 7.83 and a high of EUR 17.79. At the end of the year, Sanoma`s market capitalisation was EUR 1.4 billion (2010: EUR 2.6 billion), with Sanoma`s share closing at EUR 8.87 (2010: EUR 16.22).
The Company had 28,302 shareholders at the end of the year, with foreign holdings accounting for 9.8% (2010: 9.8%) of all shares and votes. There were no major changes in share ownership during the fourth quarter and Sanoma did not issue any flagging announcements.
At the end of 2011, Sanoma`s registered share capital was EUR 71,258,986.82 and the number of shares was 162,812,093 including the 1,500 interim shares registered on 3 January 2012.
Board of Directors, auditors and management
The AGM held on 5 April 2011 confirmed the number of Sanoma`s Board members as 10. Board members Jane Erkko and Rafaela Seppälä were re-elected, and Nancy McKinstry and Kai Öistämö were elected as new members to the Board. The Board of Directors of Sanoma consists of Jaakko Rauramo (Chairman), Sakari Tamminen (Vice Chairman), and Annet Aris, Jane Erkko, Antti Herlin, Sirkka Hämäläinen-Lindfors, Seppo Kievari, Nancy McKinstry, Rafaela Seppälä and Kai Öistämö as members.
The AGM appointed chartered accountants KPMG Oy Ab as the auditor of the Company, with Pekka Pajamo, Authorised Public Accountant, as Auditor in Charge.
Sanoma`s new organisational model was announced on 5 August 2011. As of 1 September, the Executive Management Group (EMG) comprises: Harri-Pekka Kaukonen (President and CEO of the Sanoma Group, chairman of the EMG), Jacqueline Cuthbert (CHRO), Jacques Eijkens (CEO, Sanoma Learning), Koos Guis (CEO, Sanoma Media Russia & CEE; acting member), Kim Ignatius (CFO), John Martin (Chief Digital Officer, CDO), Dick Molman (CEO, Sanoma Media Netherlands), Anu Nissinen (CEO, Sanoma Media Finland), Pekka Soini (CEO, Sanoma News), Aimé Van Hecke (CEO, Sanoma Media Belgium), and Customer Market Officer, CMO, which will be appointed later. On 9 December, it was announced that Heike Rosener will succeed retiring Koos Guis as of 1 February 2012.
Board authorisations
The AGM held on 5 April 2011 authorised the Board to decide on the repurchase of a maximum of 16,000,000 of the Company`s own shares, accounting for 9.8% of total voting rights that the maximum number of own shares covered by the authorisation would provide entitlement to. This authorisation is effective until 30 June 2012 and terminates the corresponding authorisation granted by the AGM on 8 April 2010. The Board of Directors did not exercise its right under this authorisation during the fourth quarter.
The Board also has a valid authorisation from the AGM held on 8 April 2010 to decide on an issuance of a maximum of 82,000,000 new shares and a transfer of a maximum of 5,000,000 treasury shares, together accounting for 35.5% of total voting rights that the maximum number of own shares covered by the authorisation would provide entitlement to. The authorisation will be valid until 30 June 2013. Under this authorisation, the Board decided on 20 December 2011 on the issuance of Stock Option Scheme 2011 and on 22 December 2010 on the issuance of Stock Option Scheme 2010.
Seasonal fluctuation
The net sales and results of media businesses are particularly affected by the development of advertising. Advertising sales are influenced, for example, by the number of newspaper and magazine issues published each quarter, which varies annually. Television advertising in the Netherlands, Finland and Belgium is usually strongest in the second and fourth quarters.
Learning accrues most of its net sales and results during the second and third quarters.
Seasonal business fluctuations influence the Group`s net sales and operating profit, with the first quarter traditionally being clearly the smallest one for both.
Significant risks and uncertainty factors
The most significant risks and uncertainty factors Sanoma currently faces are described in the Financial Statements and on the Group`s website at Sanoma.com, together with the Group`s main principles of risk management. Many of the identified risks relate to changes in customer preferences. The driving force behind these changes is the ongoing digitisation. Sanoma has identified action plans in all its strategic business units on how to respond to this challenge.
With regard to changing customer preferences and digitisation, new entrants might be able to better utilise these changes and therefore gain market share from Sanoma`s established businesses.
Normal business risks associated with the industry relate to developments in media advertising and consumer spending. Media advertising is sensitive to economic fluctuations. Therefore, the general economic conditions of the countries in which the Group operates and the economic trends of the industry influence Sanoma`s business activities and operational performance.
Sanoma`s financial risks include interest rate and currency risks, liquidity risk and credit risk. Other risks include risks related to equity, impairment and availability of capital. At a Group level, the most significant risks relate to liquidity risk and changes in exchange rates and interest rates.
As a result of the SBS acquisition, Sanoma`s consolidated balance sheet includes about EUR 3.0 billion in goodwill, publishing rights and other intangible assets. Most of this is related to magazine and TV operations. In accordance with IFRS, instead of goodwill being amortised regularly, it is tested for impairment on an annual basis, or whenever there is any indication of impairment. Major changes in business fundamentals could lead to impairment.
GROUP FINANCIAL STATEMENTS (FULL-YEAR FIGURES AUDITED)
Accounting policies
The Sanoma Group has prepared its Interim Report in accordance with IAS 34 `Interim Financial Reporting` while adhering to related IFRS standards and interpretations applicable within the EU on 31 December 2011. The accounting policies of the Interim Report and the definitions of key indicators are presented on the Sanoma website at Sanoma.com. All figures have been rounded and consequently the sum of individual figures can deviate from the presented sum figure. Key figures have been calculated using exact figures.
Cash and cash equivalents in cash flow statement include cash and cash equivalents less bank overdrafts.
SEGMENT INFORMATION
Sanoma Group has four reportable segments: Media, News, Learning and Trade. The segmentation is based on business model and product differences. Media, operating in 12 countries, is responsible for magazines and TV operations. Sanoma News is responsible for newspapers in Finland. Both segments also have a great variety of online and mobile services. Learning`s business is mainly B2B business. Trade, on the other hand, operates on a retail business model. In addition to the Group eliminations column unallocated/eliminations includes Group functions and real estate companies as well as items not allocated to segments.
Segment assets do not include cash and cash equivalents, interest-bearing receivables and tax receivables. Transactions between segments are based on market prices.
The Group had no commitments for acquisition of tangible assets at the end of the reporting period (2010: EUR 4.0 million).
Press Conference
Press and analyst meeting will be held in English by President and CEO Harri-Pekka Kaukonen and CFO Kim Ignatius at 11 am Finnish time at Nelonen studio, Pursimiehenkatu 26 C (third floor), Helsinki. Webcast of the event can be viewed at Sanoma.com either live or later on as on demand. If you want to ask questions during the webcast, please join the conference call by dialling +44 (0)20 7162 0025 (Europe) or +1 334 323 6201 (US) and quote the conference code 911215.
Sanoma`s 1Q12 Interim Report will be published on Thursday, 3 May, at approximately 11 am Finnish time (CET -1)
Sanoma Corporation
Kim Ignatius
Chief Financial Officer
Additional information: Sanoma`s Investor Relations, Martti Yrjö-Koskinen, tel. +358 105 19 5064 or ir@sanoma.com
Sanoma.com
Sanoma inspires, informs and connects. As a diversified media group, 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 readers, viewers and listeners. We offer a challenging and interesting working environment for nearly 15,000 people in over 20 countries throughout Europe. In 2011, the Group`s net sales totalled EUR 2.7 billion.
Sanoma Financial Statement Release 2011
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
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Source: Sanoma Oyj via Thomson Reuters ONE
http://tourism9.com/ http://vkins.com/
Fourth quarter
- Net sales in the fourth quarter amounted to EUR 725.4 million (2010: EUR 717.3 million). Adjusted for changes in the Group structure, Sanoma`s net sales decreased by 1.8%.
- Operating profit excluding non-recurring items was EUR 60.6 million (2010: EUR 34.5 million).
- Non-recurring items in the fourth quarter amounted to EUR -8.7 million (2010: EUR -7.2 million) and consisted mainly of sales gains, restructuring expenses, including pension and exit packages, and write-downs of ICT assets.
- Earnings per share were EUR 0.11 (2010: EUR -0.01). EPS excluding non-recurring items was EUR 0.18 (2010: EUR 0.04).
2011
- Annual net sales amounted to EUR 2,746.2 million (2010: EUR 2,761.2 million). Adjusted for changes in the Group structure, Sanoma`s net sales increased by 0.3%.
- Operating profit excluding non-recurring items totalled EUR 239.1 million (2010: EUR 245.4 million).
- Cash flow from operations was EUR 273.8 million (2010: EUR 273.8 million).
- Earnings per share were EUR 0.52 (2010: EUR 1.85). EPS excluding non-recurring items was EUR 0.87 (2010: EUR 0.94).
- The Board of Directors proposes a dividend of EUR 0.60 per share.
- In 2012, Sanoma expects its net sales to grow slightly, mostly due to the acquired SBS operations in the Netherlands and Belgium. Operating profit margin, excluding non-recurring items, is estimated to be around 10% of net sales. Earnings per share excluding non-recurring items are estimated to grow.
| KEY INDICATORS | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| EUR million | 2011 | 2010 | % | 2011 | 2010 | % |
| Net sales | 725.4 | 717.3 | 1.1 | 2,746.2 | 2,761.2 | -0.5 |
| Operating profit excluding non-recurring items | 60.6 | 34.5 | 75.6 | 239.1 | 245.4 | -2.6 |
| % of net sales | 8.4 | 4.8 | 8.7 | 8.9 | ||
| Operating profit | 51.9 | 27.4 | 89.9 | 182.9 | 392.7 | -53.4 |
| Result for the period | 24.4 | -1.0 | 86.0 | 297.3 | -71.1 | |
| Capital expenditure * | 85.5 | 85.7 | -0.2 | |||
| % of net sales | 3.1 | 3.1 | ||||
| Return on investment (ROI), % | 6.8 | 16.2 | ||||
| Equity ratio, % | 37.0 | 45.7 | ||||
| Net gearing, % | 105.7 | 63.8 | ||||
| Number of employees at the end of the period (FTE) | 13,646 | 15,405 | -11.4 | |||
| Average number of employees (FTE) | 14,471 | 16,016 | -9.6 | |||
| Earnings/share, EUR | 0.11 | -0.01 | 0.52 | 1.85 | -72.0 | |
| Cash flow from operations/share, EUR | 0.86 | 0.62 | 40.4 | 1.68 | 1.69 | -0.6 |
| Equity/share, EUR | 7.70 | 8.42 | -8.6 | |||
| Dividend/share, EUR ** | 0.60 | 1.10 | -45.5 | |||
| Dividend/result, % ** | 115.6 | 59.4 | ||||
| Market capitalisation | 1,443.3 | 2,628.0 | -45.1 | |||
* Including finance leases
** Year 2011 proposal of the Board of Directors
Harri-Pekka Kaukonen, President and CEO
“The year 2011 was one of solid performance and strong portfolio management. Our strategy to focus on consumer media and learning was demonstrated by these changes in the portfolio. I am especially pleased with being able to enhance our positions in consumer media in the Netherlands and Belgium through the acquisition of SBS.
In the fourth quarter, despite increased economic uncertainty, we were able to report a solid set of numbers. This clearly demonstrates our ability to adapt quickly to changes in the environment. The significant increase in our operating profit and cash flows was achieved as a combination of continued streamlining of our operations and structural changes, in accordance with our set priorities.
Sanoma is transforming and we will further deepen our understanding of customer behaviour, accelerate the speed of digital development through strengthening our multi-channel approach, foster innovation and improve the efficiency of our operations.
For the next three years, we have set the following priorities: ensure financial flexibility by streamlining operating expenses and continuing to dispose of non-core assets; develop our print businesses to ensure competitiveness and successful digitisation; ensure profitable organic growth of our TV and learning businesses; and to create growth from new digital services.”
Outlook for 2012
In 2012, Sanoma expects its net sales to grow slightly, mostly due to the acquired SBS operations in the Netherlands and Belgium. Operating profit margin, excluding non-recurring items, is estimated to be around 10% of net sales. Earnings per share excluding non-recurring items are estimated to grow.
Sanoma`s net sales and result are affected by the underlying environment, particularly by the development of advertising markets in the Group`s countries of operation. The 2012 outlook is based on the assumption that the advertising markets in the Group`s main operating countries will vary from stable to slightly decreasing, as the economic uncertainty continues.
Net sales
Fourth quarter
In the fourth quarter of 2011, Sanoma`s net sales increased by 1.1% and amounted to EUR 725.4 million (2010: EUR 717.3 million). The growth came mainly from the acquired TV and print operations in the Netherlands and Belgium. Currency translations did not have a material effect on fourth quarter sales. When adjusted for changes in the Group structure, net sales decreased by 1.8%.
Print circulation sales grew by 0.8%. Subscription sales increased by 6.7%, but single copy sales decreased by 6.7%.
Advertising sales increased by 43.6%, mostly due to acquired TV operations in the Netherlands and Belgium as well as the good performance of Nelonen Media broadcasting operations in Finland. Online advertising sales increased by 8.7%. In total, advertising sales accounted for 36.6% (2010: 25.8%) of the Group`s net sales.
The TV acquisitions also impacted on Sanoma`s digital sales, which grew by 105.4% in the fourth quarter and accounted for 24.5% (2010: 12.1%) of the Group`s net sales. Broadband access and cable TV services in Finland, which were divested in June 2010, are not included in the digital sales of the comparable period.
2011
In January-December, Sanoma`s net sales were stable and amounted to EUR 2,746.2 million (2010: 2,761.2) as the acquired operations compensated for the effects of the divestments made in 2011 and 2010. The growth in Media came mainly from the acquired TV operations in the Netherlands and increased sales of Nelonen Media in Finland, more than offsetting in June 2010 divested Finnish broadband access and cable TV services. The decrease in Trade`s net sales was related to the divestment of operations. Net sales were at the comparable year`s level in News, whereas in Learning they decreased slightly as a result of divestment and lower sales from non-core operations. Currency translations did not have a material effect on the 2011 net sales. Adjusted for structural changes, net sales increased by 0.3%.
Advertising sales grew strongly during the first half of 2011, whereas the development during second part of year was adversely affected by the increasing economic uncertainty. Annual advertising sales grew by 23.3%.
In 2011, online sales grew by 13.8% to EUR 156.1 million. Total digital sales, including also TV and e-learning, grew by 52.6%, and amounted to 15.9% (2010: 10.5%) of the Group`s net sales.
The Group`s circulation sales were at the comparable year`s level, as the slight increase in subscription sales offset the decrease in single copy sales.
By country, Finland accounted for 47% (2010: 51%) of the cumulative net sales and the Netherlands 28% (2010: 23%). Net sales from other EU countries totalled 21% (2010: 23%) and non-EU countries accounted for 3% (2010: 3%).
Result
Fourth quarter
Sanoma`s operating profit excluding non-recurring items in October-December increased by 75.6% and totalled EUR 60.6 million (2010: EUR 34.5 million). Structural changes explain the main part of the increase. Operating profit also includes EUR 11.1 million of transaction costs and order backlog amortisations related to the SBS acquisition, which are not categorised as non-recurring. Operating profit excluding non-recurring items amounted to 8.4% (2010: 4.8%) of net sales. Currency translations did not have a material effect on the fourth quarter result.
In the fourth quarter, the Group`s total expenses, excluding non-recurring items, decreased by 8.5% due to structural changes and efficiency measures. Paper costs increased by 3.7% and employee benefit expenses decreased by 2.8%. The Group had 1,760 fewer employees than at the end of 2010, corresponding to a decrease of 11.4%. The decrease in the number of personnel is mostly attributable to the divestment of operations and the closing down of kiosks, partly offset by the acquisition of the SBS operations in the Netherlands and Belgium.
In October-December, the operating profit included EUR -8.7 million (2010: EUR -7.2 million) of non-recurring items consisting mainly of sales gains, restructuring expenses, including voluntary pension and exit packages, and write-downs related to ICT. In the comparable period, non-recurring items consisted of capital gains and non-recurring costs.
As a part of streamlining operations and ensuring competitive cost levels, pension and severance packages have been offered to employees mainly in News, Media Finland, Media Belgium, and Learning during the autumn, and as a result 33 employees have left the company during 2011 and further 225 employees will leave the company during 2012. Related to this, EUR 21.4 million of non-recurring restructuring expenses have been recorded, of which EUR 19.0 million during the fourth quarter.
| NON-RECURRING ITEMS | 10-12/ | 10-12/ | 1-12/ | 1-12/ |
| EUR million | 2011 | 2010 | 2011 | 2010 |
| Media | ||||
| Gain on sale (Humo and Desert Fishes) | 9.1 | 2.6 | ||
| Impairment of goodwill and intangible assets (Russia & CEE) | -1.0 | -53.4 | -1.0 | |
| Write down of Jok Foe Group (Belgium) | -1.6 | -1.6 | ||
| Restructuring expenses | -9.8 | -3.3 | -9.8 | -3.3 |
| Impairment of intangible assets (The Netherlands) | -3.4 | -6.3 | ||
| Gain on sale (Welho) | -0.4 | 179.0 | ||
| Impairment of goodwill (Dutch press distribution) | -28.9 | |||
| News | ||||
| Gain on sale (Lehtikuva) | 6.0 | |||
| Gain on sale (Sanoma Lehtimedia`s local papers) | 2.9 | 2.9 | ||
| Restructuring expenses | -9.2 | -9.2 | ||
| Learning | ||||
| Impairment of goodwill (Language services) | -24.1 | |||
| Sale of LDC | 0.9 | |||
| Write-down of intangible assets | -2.9 | -2.9 | ||
| Loss on sale (Bertmark Norge) | 0.1 | -1.1 | ||
| Restructuring expenses | -0.1 | -0.8 | -2.8 | -2.3 |
| Impairment (Dutch non-core entity) | -2.1 | -2.1 | ||
| Trade | ||||
| Loss on sale (Suomalainen Kirjakauppa) | -10.8 | |||
| Write-down of real estates | -3.1 | |||
| Impairment (Bookstores) | -0.8 | |||
| Gain on sale (movie operations) | 51.4 | |||
| Loss on sale (Romanian operations) | -8.0 | |||
| Loss on sale of Russian operations | -2.6 | -0.8 | -2.6 | |
| Gain on sale (Narvesen) | 5.3 | 5.3 | ||
| Restructuring expenses | -2.8 | -1.0 | ||
| Other companies | ||||
| Gains on sales (real estates) | 11.1 | 12.1 | 5.4 | |
| Restructuring expenses | -1.5 | -1.5 | ||
| NON-RECURRING ITEMS IN OPERATING PROFIT | -8.7 | -7.2 | -56.2 | 147.3 |
| Impairment of share in associated company Hansaprint | -22.1 | -4.0 | -22.1 | |
| NON-RECURRING ITEMS IN RESULTS | -22.1 | -4.0 | -22.1 | |
| IN ASSOCIATED COMPANIES | ||||
Sanoma`s fourth quarter result included EUR -2.2 million (2010: EUR -24.0 million) of loss from associated companies. The most important associated companies included in this line are DNA, Hansaprint, Stratosfèra and Helsinki Halli (former Jokerit HC). The comparable quarter was affected by the EUR -22.1 million non-recurring impairment of Hansaprint.
2011
In 2011, Sanoma`s operating profit excluding non-recurring items decreased by -2.6% and totalled EUR 239.1 million (2010: EUR 245.4 million). The operating profit improved in Media and News. The weak development of general literature, divested in October 2011, and Hungarian learning operations lowered the result in Learning. Despite the divestments, Trade`s result was almost at the comparable year`s level. Costs increased significantly in the Group functions due to development projects. In addition, the result includes EUR 34.4 million of transaction costs and order backlog amortisations, which are not categorised as non-recurring, related to the acquisition of the SBS TV and print operations. Currency translations did not have a material effect on the 2011 results.
The non-recurring items included in the operating profit amounted to EUR -56.2 million (2010: EUR 147.3 million) and included impairments of goodwill and intangible assets, restructuring expenses and gain on the sale of assets. A net total amount of some EUR -21 million of non-recurring items were non-taxable. In 2010, non-recurring items related to capital gains from divestments, impairment write-downs as well as restructuring costs, and some EUR 135 million of the net amount of total capital gains and write-downs was non-taxable.
Sanoma`s net financial items totalled EUR -35.2 million (2010: EUR -12.8 million). Financial income amounted to EUR 13.9 million (2010: EUR 11.1 million), of which EUR 9.4 million were exchange rate gains (2010: EUR 7.0 million). Financial expenses amounted to EUR 49.1 million (2010: EUR 23.8 million), of which EUR 16.3 million were exchange rate losses (2010: EUR 8.0 million). Following the increased debt, interest expenses amounted to EUR 28.8 million (2010: EUR 13.3 million).
Profit before taxes amounted to EUR 144.1 million (2010: EUR 356.0 million). The effective tax rate was 40.3% (2010: 16.5%). Earnings per share were EUR 0.52 (2010: EUR 1.85). The effective tax rate and earnings per share were affected mainly by the impairments of goodwill and non-taxable sales gains and losses. The comparable figures were affected by the tax-free non-recurring gain on the sale of the broadband access and cable TV services in Finland.
Sanoma`s 2011 result included EUR -3.7 million (2010: EUR -23.9 million) of profits from associated companies. The most important associated companies included in this line are DNA, Hansaprint, Stratosfèra and Helsinki Halli.
Balance sheet and financial position
At the end of 2011, Sanoma`s consolidated balance sheet totalled EUR 4,328.3 million (2010: EUR 3,203.0 million). In 2011, the Group`s cash flow from operations was EUR 273.8 million (2010: EUR 273.8 million). Cash flow from operations per share was EUR 1.68 (2010: EUR 1.69).
Sanoma`s equity ratio was 37.0% (2010: 45.7%) at the end of 2011. The return on equity (ROE) was 5.9% (2010: 23.0%) and the return of investment (ROI) was 6.8% (2010: 16.2%). In 2010, the divestment of the broadband access and cable TV services in Finland positively affected these ratios. Equity totalled EUR 1,524.2 million (2010: EUR 1,376.0 million). Following the closing of the acquisition of SBS operations in the Netherlands and Belgium, interest-bearing liabilities increased and totalled EUR 1,727.2 million (2010: EUR 941.9 million). Interest-bearing net debt was EUR 1,611.2 million (2010: EUR 877.9 million).
In order to finance the SBS acquisition, Sanoma entered into the following financing facilities: EUR 522 million syndicated term loan for five years, EUR 250 million short term bridge-to-bond facility and EUR 132 million syndicated term loan and revolving credit facility for five years. The latter facility is for the SBS Broadcasting B.V., owned by Sanoma and Dutch Talpa Media as a minority shareholder. The transaction did not affect the financing terms of Sanoma`s previous credit facilities.
Investments, acquisitions and divestments in 2011
In 2011, investments in tangible and intangible assets, including finance leases, amounted to EUR 85.5 million (2010: EUR 85.7 million). Investments were mainly related to ICT systems as well as replacements and renovations. Sanoma`s business acquisitions totalled EUR 1,415.2 million (2010: EUR 37.1 million).
In March, Sanoma sold its movie operations in Finland and the Baltic countries. In 2010, net sales of movie operations were EUR 88.6 million and operating profit stood at EUR 8.4 million. The enterprise value of the transaction was EUR 116.0 million, and the transaction was finalised at the end of April.
In April, Sanoma sold its press distribution and kiosk operations in Romania. In 2010, net sales of these operations amounted to some EUR 23 million. The remaining kiosk operations in Russia were also divested at the beginning of April.
In April, Sanoma agreed to acquire the SBS free-to-air TV assets in the Netherlands and Belgium together with Talpa Media in the Netherlands and Corelio and Wouter Vandenhaute & Eric Watté in Belgium. The enterprise value of the transaction was EUR 1,225 million. The net sales of the acquired companies totalled EUR 404 million in 2010 and their operating profit was some EUR 110 million (pro forma, unaudited). The acquisition in Belgium was finalised on 8 June and the Dutch acquisition on 29 July after the necessary approvals were received from the competition authorities.
In April, Sanoma announced that it will acquire the Finnish educational publisher Tammi Learning and the Swedish educational publisher Bonnier Utbildning, both from the Swedish media company Bonnier. At the same time, Sanoma will divest its Finnish general literature publisher WSOY to Bonnier. The transaction was completed on 3 October.
In August, Sanoma announced the divestment of its bookstore operations in Finland. In 2010, net sales of Sanoma`s Finnish bookstores were EUR 109 million and operating profit EUR 2 million. The divestment was completed on 30 September.
In October, Sanoma announced the divestment of its ownership, 50% of the shares, in the Latvian kiosk and press distribution company Narvesen Baltija. In 2010, the net sales of the company were some EUR 59 million.
In November, Sanoma announced the sale of some 40,000 m2 of residential building rights in Finland. The total value of the transaction is EUR 12.9 million, which will be paid in three installments during 2011-2013.
MEDIA
The Media segment includes magazine, TV and digital businesses in 12 European countries and comprises four strategic business units: Sanoma Media Netherlands, Sanoma Media Finland, Sanoma Media Belgium and Sanoma Media Russia & CEE.
- The SBS acquisition is now completed and the figures are consolidated with the Dutch and Belgian operations.
- Extra effort is put to restore viewing and advertising shares in the Dutch TV market.
| Key indicators | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| EUR million | 2011 | 2010 | % | 2011 | 2010 | % |
| Net sales | 445.6 | 350.6 | 27.1 | 1,415.8 | 1,299.6 | 8.9 |
| The Netherlands | 232.2 | 136.1 | 70.5 | 642.0 | 490.4 | 30.9 |
| Finland | 86.2 | 87.4 | -1.4 | 309.7 | 339.3 | -8.7 |
| Russia & CEE | 56.7 | 60.9 | -6.9 | 213.1 | 214.9 | -0.8 |
| Belgium | 61.9 | 53.8 | 15.1 | 209.1 | 208.3 | 0.4 |
| Other businesses and eliminations | 8.6 | 12.4 | -30.2 | 41.8 | 46.7 | -10.5 |
| Operating profit excluding non-recurring items * | 64.6 | 36.3 | 77.9 | 151.1 | 145.8 | 3.6 |
| % of net sales | 14.5 | 10.4 | 10.7 | 11.2 | ||
| Operating profit | 53.2 | 31.6 | 68.2 | 92.0 | 287.9 | -68.1 |
| Capital expenditure | 22.7 | 25.2 | -9.8 | |||
| Return on investment (ROI), % | 4.6 | 16.6 | ||||
| Number of employees at the end of the period (FTE) | 5,844 | 5,419 | 7.8 | |||
| Average number of employees (FTE) | 5,624 | 5,602 | 0.4 | |||
* In 2011, the non-recurring items included in the second quarter a EUR 9.1 million gain on sale of Humo and Desert Fishes, in the third quarter a EUR 3.4 million impairment of intangible assets in the Netherlands and a EUR 53.4 million impairment of goodwill and intangible assets in Russia & CEE, and in the fourth quarter EUR 9.8 million restructuring expenses and a EUR 1.6 million write-down of Jok Foe Group. In 2010, the non-recurring items included in the second quarter a EUR 2.6 million gain from selling 49% of the Humo magazine and a EUR 179.0 million gain on the sale of the cable TV operator Welho, in the third quarter a EUR 28.9 million impairment of goodwill in the Dutch press distribution and a EUR 6.3 million impairment of intangible assets in the Dutch media business and in the fourth quarter EUR 3.3 million restructuring expenses in the Netherlands and a EUR 1.0 million impairment of intangible assets in the CEE countries.
| Operational indicators * | 1-12/ | 1-12/ |
| Magazines | 2011 | 2010 |
| Number of magazines published | 280 | 279 |
| Magazine copies sold, thousands | 324,974 | 342,316 |
| Advertising pages sold | 48,559 | 50,549 |
| Finnish TV operations | ||
| TV channels` share of TV advertising | 32.8% | 32.8% |
| TV channels` national commercial viewing share (10-44 years) | 34.5% | 35.5% |
| TV channels` national viewing share | 15.0% | 15.1% |
| Dutch TV operations | ||
| TV channels` share of TV advertising | 30.1% | 31.3% |
| TV channels` national viewing share (20-49 years) | 22.9% | 24.0% |
* Including joint ventures
Fourth quarter
Net sales in Media grew by 27.1% in October-December following the consolidation of acquired SBS TV and print operations. Adjusted for structural changes, net sales declined by 4.4%.
Advertising sales grew by 66.4% and represented 47.0% (2010: 35.9%) of the fourth quarter net sales. Online advertising sales increased by 8.4%.
Print circulation sales increased by 1.2% and represented 37.5% (2010: 47.1%) of the fourth quarter net sales. An increase in subscription sales, mainly as a result of the consolidated Dutch print operations, more than offset the decrease in single copy sales.
The consolidation of TV operations and growing online advertising sales increased the segment`s digital sales. In total, these sales grew by 154.1% in the fourth quarter and represented 33.5% (2010: 17.0%) of the segment`s total net sales.
In the Netherlands, net sales grew by 70.5%. Most of this growth came from new TV and print operations, part of Sanoma Media Netherlands since 1 August 2011. Magazine operations` sales were at the comparable quarter`s level. In total, circulation sales grew clearly due to acquired operations. Single copy sales were slightly below the comparable period`s level, but subscription sales increased significantly. Circulation sales represented 36.4% (2010: 56.0%) of the Dutch net sales. The declining trends in the readers market continued but Sanoma Media Netherlands` market share remained stable. The Dutch market for consumer magazine advertising, excluding TV guides, decreased by 2.0% in October-December, while Sanoma Media Netherlands` print advertising sales declined slightly in the fourth quarter. Online advertising sales continued to grow clearly, but at a slower pace than in the previous quarters. In total, advertising sales grew significantly following the consolidation of the TV operations, and represented 52.1% (2010: 31.9%) of the Dutch net sales. The TV advertising market in the Netherlands decreased by around 3% in October-December. Sanoma`s TV operations continued to developed in line with the previous quarter.
In Finland, net sales declined by 1.4%, as the clear increase in Nelonen Media, which includes free-to-air TV, pay TV, radio and online, did not fully offset the somewhat declining sales in magazine publishing. During the fourth quarter, the TV advertising market in Finland decreased by 1.7%. Nelonen Media advertising sales outperformed the market. The magazine advertising market decreased by 0.9% in the fourth quarter. Sanoma Media Finland`s advertising sales grew somewhat, driven by increased sales in Nelonen Media. In total, advertising sales of the Finnish operations represented 42.0% (2010: 39.3%) of net sales. Circulation sales were slightly below the comparable quarter`s level, due to declining volumes, and represented 41.9% (2010: 43.6%) of the Finnish net sales.
Net sales in Belgium increased by 15.1%, due to acquired operations. Magazine operations` sales decreased somewhat, when both advertising and circulation sales declined, partly due to structural changes but also related to a decline in consumer confidence and advertising spending. Sanoma Media Belgium retained its market position in a slightly decreasing readers market. The TV advertising market in Belgium declined by 1.7% in the fourth quarter. Sanoma`s TV operations continued to grow and its advertising market share improved to 24.3%. In total, advertising sales represented 34.6% (2010: 27.3%) and circulation sales 45.6% (2010: 56.1%) of the net sales in Belgium, respectively.
There have been a number of structural changes in Sanoma Media Belgium. The reported figures include 51% of the weekly magazine Humo from May 2010 to May 2011. In connection with SBS acquisition, the remaining holding in Humo was transferred to De Vijver, after which 33% of the net result of De Vijver was included in the Belgium figures. Since the Belgium competition authorities approved a joint control structure of De Vijver on 1 September, Sanoma`s 33% share in De Vijver Media (which includes 100% of Humo, the acquired TV operations as well as the TV productions operations of Woestijnvis) is proportionally consolidated line-by-line as of this approval.
In Russia and the CEE countries, net sales decreased by 6.9%, of which more than half explained by negative currency translation effects. The advertising market has been adversely affected by the Euroland economic uncertainty in all markets, especially in Russia and Hungary. Advertising sales in the Russia and CEE business unit decreased somewhat. In total, advertising sales represented 54.5% (2010: 54.9%) of net sales in the Russia and CEE strategic business unit. Following the declining market trends and the regional pressure on consumer purchasing power, single copy sales came down in most countries. Circulation sales decreased therefore clearly, and represented 32.0% (2010: 33.6%) of the strategic business unit`s net sales. The magazine portfolio, internet services and local organisations are continuously optimised according to the market situation.
Operating profit excluding non-recurring items in the Media segment in October-December increased by 77.9%, due to acquired operations. The result includes EUR 11.1 million of transaction costs and order backlog amortisations, which are not categorised as non-recurring, related to the SBS TV and print operations. In the Netherlands, the results improved due to the acquired operations. Adjusted for structural changes, profit in the Netherlands increased somewhat. In Finland, the result decreased, mainly due to a significant drop in the result of magazine operations. In Belgium, the result improved significantly, also when adjusted for structural changes. In Russia and CEE countries, the operational result was at the comparable quarter`s level, as a result of strict cost control. The non-recurring items in the fourth quarter result totalled EUR -11.4 million (2010: EUR -4.8 million) and were mainly related to restructuring expenses.
2011
In January-December, Media`s net sales grew by 8.9%. Growth came from the consolidation of the acquired SBS TV and print operations in the Netherlands and Belgium as well as increased sales of Nelonen Media in Finland, more than offsetting the divestments made in 2010. Adjusted for structural changes, net sales decreased by 0.4%.
Operating profit excluding non-recurring items increased by 3.6%, as increased results in online operations and Finnish TV as well as the consolidation of the acquired operations offset lower results in magazine operations in all business units and effects of divestments in 2010. In addition, the result includes EUR 34.4 million of SBS transaction costs and order backlog amortisations, which are not categorised as non-recurring. Non-recurring items included in the operating profit totalled EUR -59.1 (2010: EUR 142.1 million) and included impairments of goodwill and intangible assets, restructuring expenses and gains on the sale of assets. In the comparable year, non-recurring items were related to gains on the sales of assets, impairments of intangible assets and goodwill as well as restructuring of operations.
Media`s investments in tangible and intangible assets totalled EUR 22.7 million (2010: EUR 25.2 million) and consisted mainly of ICT investments. The most material acquisition in 2011 was the acquisition of the SBS TV and print operations in the Netherlands and Belgium. In 2010, the most significant acquisition was a 21% share in the Finnish telecommunication group DNA in connection with the Welho transaction.
NEWS
The News segment includes the Sanoma News strategic business unit, Finland`s leading player in newspaper publishing and digital media.
- Advertising sales improved clearly in the tabloid Ilta-Sanomat and in free sheets in particular. The Sanoma Kaupunkilehdet business unit improved its market share of the free sheet media market.
- All main brands now also have online and mobile applications and the use of the products in tablet and smart phone devices as well as e-commerce shows significant growth.
| Key indicators | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| EUR million | 2011 | 2010 | % | 2011 | 2010 | % |
| Net sales | 112.0 | 114.9 | -2.5 | 435.8 | 437.6 | -0.4 |
| Helsingin Sanomat | 60.8 | 64.1 | -5.1 | 238.5 | 235.4 | 1.3 |
| Ilta-Sanomat | 21.6 | 21.6 | -0.1 | 84.4 | 83.3 | 1.4 |
| Other publishing | 25.4 | 25.0 | 1.7 | 97.0 | 99.5 | -2.5 |
| Other businesses and eliminations | 4.2 | 4.2 | -0.1 | 15.9 | 19.4 | -18.0 |
| Operating profit excluding non-recurring items * | 14.1 | 13.0 | 8.6 | 49.4 | 47.2 | 4.6 |
| % of net sales | 12.6 | 11.3 | 11.3 | 10.8 | ||
| Operating profit | 4.9 | 15.9 | -69.0 | 40.2 | 56.1 | -28.4 |
| Capital expenditure | 16.9 | 14.0 | 20.4 | |||
| Return on investment (ROI), % | 16.7 | 22.0 | ||||
| Number of employees at the end of the period (FTE) | 2,025 | 2,016 | 0.4 | |||
| Average number of employees (FTE) | 2,061 | 2,176 | -5.3 | |||
* In 2011, the non-recurring items included in the fourth quarter EUR 9.2 million restructuring expenses. In 2010, the non-recurring items included in the first quarter a EUR 6.0 million gain on the sale of Lehtikuva and in the fourth quarter a EUR 2.9 million gain on the sale of Sanoma Lehtimedia`s local papers.
| Operational indicators | 10-12/ | 10-12/ | |||
| Online services, unique visitors, weekly | 2011 | 2010 | |||
| Iltasanomat.fi | 2,219,968 | 1,691,631 | |||
| HS.fi | 1,413,050 | 1,183,489 | |||
| Huuto.net | 458,174 | 452,538 | |||
| Oikotie.fi | 461,842 | 361,566 | |||
| Taloussanomat.fi | 664,339 | 604,821 | |||
| 1-12/ | 1-12/ | ||||
| Circulation | 2011 | 2010 | |||
| Helsingin Sanomat | 366,973 | 383,361 | |||
| Ilta-Sanomat | 143,117 | 150,351 | |||
Fourth quarter
In October-December, net sales in News decreased by 2.5%. Adjusted for structural changes, sales decreased by 2.0%.
Print circulation sales decreased by 0.9% in the fourth quarter. Subscription sales decreased by 1.2% but single copy sales were at the comparable quarter`s level. Circulation sales accounted for 41.5% (2010: 40.8%) of the segment`s net sales.
Advertising sales decreased by 4.9%. The 10.3% growth in online advertising sales did not offset somewhat decreasing sales of print advertising. This was in line with the Finnish advertising market development. The market growth, which began in the second half of 2010, is clearly slowing down and according to TNS Gallup Adex, newspaper advertising in the Finnish market decreased by 3.9% in the fourth quarter. Online advertising included in the statistics continued to grow and was up by 18.6%. Advertising sales represented 50.7% (2010: 52.1%) of the net sales in News in the fourth quarter.
Total digital sales increased by 15.4%, boosted by the growth of online advertising and good pick-up in e-commerce. Digital sales consisting mostly of online advertising, but also to larger extent content, represented 13.1% (2010: 11.1%) of the segment`s net sales.
The net sales of the Helsingin Sanomat business unit decreased by 5.1%. The underlying macro-economic uncertainty clearly affected advertising sales. Accordingly, advertising sales decreased and represented 54.6% (2010: 57.2%) of the business unit`s net sales. Subscription sales were stable despite the decreasing trend in the circulation volume. The multichannel use of Helsingin Sanomat continued to grow in the fourth quarter.
The Ilta-Sanomat business unit`s net sales were at the comparable quarter`s level, supported by favourable development in online advertising sales. Advertising sales represented 30.2% (2010: 30.3%) of the business unit`s net sales. Circulation sales were stable. The total volume of the Finnish tabloid market has decreased by 5% in the last 12 months. Ilta-Sanomat`s market share increased to 58.3% (2010: 58.1%) of the tabloid newsstand market.
Net sales from other publishing operations increased by 1.7%, as the good development in Sanoma Digital Finland and free sheets offset the slight decrease in regional papers. Free sheets continued to improve their market positions.
In October-December, News` operating profit excluding non-recurring items increased by 8.6% as a result of strict cost control in all business units. News` operating result in the fourth quarter included EUR -9.2 million (2010: EUR 0.0 million) of non-recurring items, related to voluntary pension and exit packages.
2011
In January-December, News` sales decreased by 0.4%. Adverting sales grew slightly. Digital revenues, consisting mostly of online advertising, but also to larger extent content, continued to develop positively and amounted to 12.1% (2010: 11.6%) of News` total sales. The underlying macro-economic uncertainty during the latter half of the year clearly affected advertising sales adversely and visibility worsened. Circulation sales were at comparable year`s level. Adjusted for structural changes, net sales increased by 1.9%.
Operating profit excluding non-recurring items increased by 4.6% in 2011, mainly as a result of strict cost control in all business units. Non-recurring items included in the operating profit totalled EUR -9.2 million (2010: EUR 8.9 million) and were related to voluntary pension and exit packages.
News` investments in tangible and intangible assets totalled EUR 16.9 million (2010: EUR 14.0 million), and consisted mainly of investments in digital business, ICT and replacement investment in printing. There were no material acquisitions in 2011 or the comparable year. In September 2010, business information and media monitoring service provider Esmerk was transferred from News to language services business unit in Learning.
LEARNING
The Learning segment includes Sanoma`s learning as well as language service and business information operations. Sanoma Learning is a leading European provider of learning materials and solutions in print and digital format.
- The transaction with Bonnier was completed in October and the acquired operations are consolidated in the fourth quarter figures for learning business unit. At the same time, Sanoma divested its Finnish general literature publisher.
| Key indicators | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| EUR million | 2011 | 2010 | % | 2011 | 2010 | % |
| Net sales | 52.7 | 65.1 | -19.1 | 343.1 | 350.1 | -2.0 |
| Learning | 34.7 | 33.7 | 2.8 | 256.6 | 249.3 | 3.0 |
| Language services | 8.4 | 8.9 | -5.6 | 32.4 | 27.1 | 19.4 |
| Literature and other businesses | 10.4 | 24.8 | -58.0 | 59.5 | 83.6 | -28.9 |
| Eliminations | -0.8 | -2.2 | 64.8 | -5.4 | -9.9 | 45.7 |
| Operating profit excluding non-recurring items * | -19.7 | -14.4 | -37.4 | 45.5 | 52.6 | -13.4 |
| % of net sales | -37.5 | -22.0 | 13.3 | 15.0 | ||
| Operating profit | -22.7 | -17.2 | -32.5 | 16.6 | 47.1 | -64.7 |
| Capital expenditure | 11.5 | 14.9 | -22.4 | |||
| Return on investment (ROI), % | 3.6 | 8.9 | ||||
| Number of employees at the end of the period (FTE) | 2,489 | 2,656 | -6.3 | |||
| Average number of employees (FTE) | 2,583 | 2,629 | -1.7 | |||
* In 2011, the non-recurring items included in the first quarter a EUR 0.9 million non-recurring income related to sale of LDC, in the second quarter EUR 1.7 million restructuring expenses and in the third quarter EUR 1.0 million restructuring expenses and a EUR 24.1 million impairment of goodwill. In the fourth quarter, the non-recurring items included EUR 2.9 million write-down of intangible assets. In 2010, the non-recurring items included in the first quarter a EUR 1.1 million loss on the sale of Bertmark Norge and in the second quarter EUR 1.3 million, in the third quarter EUR 0.2 million and in the fourth quarter EUR 0.8 million restructuring expenses and in the fourth quarter a EUR 2.1 million impairment of a Dutch non-core entity.
Fourth quarter
Net sales in the Learning segment decreased by 19.1% in October-December, mainly related to the divested operations. Adjusted for structural changes, net sales decreased by 4.6%.
The learning business has, by nature, an annual cycle and strong seasonality. It accrues most of its net sales and results during the second and third quarters. Changes between quarters can be significant and often explain most of the changes from the comparable period.
Net sales in learning business increased by 2.8%, mainly related to structural changes. In Hungary, the net sales continued to decrease significantly for the second consecutive quarter as a result of the cuts in the governmental budget and the difficult political situation. In other countries, market conditions remain stable.
Net sales in language services business decreased by 5.6%, due to the disappointing development of translation and localisation services.
Net sales in literature and other businesses decreased by 58.0%, mainly related to the divestment of the Finnish general literature operations as of October 2011.
Operating result excluding non-recurring items in the Learning segment decreased by 37.4%, due to the structural changes. The learning business has strong seasonality within the year, the first and fourth quarter being typically loss-making. For general literature, on the other hand, the fourth quarter is typically the strongest one. Due to this seasonality, the transaction lowered the Learning segment`s fourth quarter result. In Learning, most of the results were accrued already during the second and third quarters. In the comparable quarter, the result was positively affected by a EUR 3 million release in pension provisions. In the fourth quarter 2011, the result included EUR -3.0 million (2010: EUR 2.8 million) of non-recurring items.
2011
In January-December, Learning`s net sales decreased by 2.0%. Adjusted for structural changes, net sales decreased by 1.0%.
Operating profit excluding non-recurring items decreased by 13.4%, mainly related to structural changes. Non-recurring items included in the operating profit totalled EUR -28.9 million (2010: EUR -5.5 million) and consisted mainly of impairment of goodwill in language services, restructuring expenses and write-downs related to ICT. In 2010, the result was positively affected by a EUR 3 million release in pension provisions.
Learning`s investments in tangible and intangible assets totalled EUR 11.5 million (2010: EUR 14.9 million). They comprised mainly investment in ICT. In October, Sanoma completed the acquisition of the Finnish educational publisher Tammi Learning, which is now fully integrated into the Finnish operations and the Swedish educational publisher Bonnier Utbildning (now Sanoma Utbildning) from the Swedish media company Bonnier as well as the divestment of its Finnish general literature publisher WSOY to Bonnier. The most significant transaction in the comparable year was the acquisition of the remaining shares of the e-learning provider YDP in Poland.
TRADE
The Trade segment includes Sanoma`s kiosk operations and trade services in Finland, Estonia and Lithuania.
- Customer volumes and sales of Finnish kiosks showed positive development for the second consecutive quarter and the operational result improved significantly.
- The Finnish press distribution unit Lehtipiste has managed to keep the sales of single copies of magazines at the comparable year`s level contrary to the trend in many other countries.
- Despite the continued challenging economic conditions in the Baltic countries, Trade`s Estonian and Lithuanian businesses improved their performance significantly.
- Bookstore operations in Finland were divested at the end of September and the kiosk and press distribution operations in Latvia in October. The sold operations were deconsolidated as of 1 October.
| Key indicators | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| EUR million | 2011 | 2010 | % | 2011 | 2010 | % |
| Net sales | 124.5 | 200.5 | -37.9 | 597.0 | 726.3 | -17.8 |
| Kiosk operations | 94.0 | 102.4 | -8.2 | 379.2 | 398.4 | -4.8 |
| Trade services | 28.6 | 34.5 | -16.9 | 121.7 | 131.3 | -7.3 |
| Bookstores | 3.7 | 43.2 | -91.5 | 77.0 | 120.6 | -36.2 |
| Movie operations | 0.0 | 23.9 | -100.0 | 28.4 | 90.0 | -68.4 |
| Eliminations | -1.8 | -3.5 | 47.2 | -9.2 | -14.0 | 33.8 |
| Operating profit excluding non-recurring items * | 4.6 | 5.6 | -18.7 | 18.8 | 19.1 | -1.4 |
| % of net sales | 3.7 | 2.8 | 3.1 | 2.6 | ||
| Operating profit | 9.9 | 3.0 | 228.1 | 49.2 | 15.5 | 218.2 |
| Capital expenditure | 32.4 | 29.7 | 9.0 | |||
| Return on investment (ROI), % | 22.4 | 5.7 | ||||
| Number of employees at the end of the period (FTE) | 3,110 | 5,149 | -39.6 | |||
| Average number of employees (FTE) | 4,023 | 5,486 | -26.7 | |||
* In 2011, the non-recurring items included in the second quarter a EUR 0.8 million loss on sale of Russian operations, a EUR 8.0 million loss on sale of Romanian operations, a 51.4 million gain on sale of movie operations and EUR 2.4 restructuring expenses. In the third quarter the non-recurring items included a EUR 10.8 million loss on sale of Suomalainen Kirjakauppa, a EUR 3.1 million write-down of real estates, a EUR 0.8 million impairment in bookstores and EUR 0.4 million restructuring expenses. In the fourth quarter, the non-recurring items included a EUR 5.3 million gain on sale of Narvesen. In 2010, the non-recurring items included in the third quarter EUR 1.0 million restructuring expenses and in the fourth quarter a EUR 2.6 million loss on sale of Russian operations.
| Operational indicators | 1-12/ | 1-12/ |
| 2011 | 2010 | |
| Number of kiosk outlets | 1 051 | 1 350 |
| Customer volume in kiosk operations, thousands | 166 214 | 181 328 |
| Customer volume in bookstores, thousands | 4 992 | 7 214 |
| Number of copies sold (press distribution), thousands | 186 848 | 258 793 |
Fourth quarter
In October-December, Trade`s net sales decreased by 37.9%, due to the divestment of operations. Net sales adjusted for structural changes increased by 3.2%.
Net sales from kiosk operations were down by 8.2% in the fourth quarter due to the divestment of the Latvian, Russian and Romanian operations. The growth both in net sales and in the number of customers in the comparable part of the kiosk chain in Finland continued, mainly as the result of a major optimisation of the kiosk network and continued performance uplift measures during the past three quarters. Net sales grew in Lithuania and were at the comparable quarter`s level in Estonia.
Trade services` net sales decreased by 16.9% due to the divestment of the Latvian, Russian and Romanian operations. Net sales increased in Finland and Estonia.
Bookstore operations in Finland, divested at the end of September, were no longer included in Trade`s figures in the fourth quarter.
Movie operations, divested at the end of April, were no longer included in Trade`s figures in the second half of 2011.
Trade`s operating profit excluding non-recurring items decreased by 18.7% in October-December due to the divestment of bookstores, where Christmas sales are important. The operational result in kiosk operations improved significantly as a result of increased customer volumes, several efficiency measures and divestments of loss-making operations. The average margin per customer increased, improving the result in Finnish kiosk operations. The result improved also in trade services. Trade`s operating profit in the fourth quarter included EUR 5.3 million (2010: EUR -2.6 million) of non-recurring items, related to the sales gain of the divested operations in Latvia.
2011
In January-December, Trade`s net sales decreased by 17.8% due to the divestments of the Finnish and Baltic movie operations in April, the Romanian kiosk and press distribution operations in April, the remaining Russian kiosk operations in April, the Finnish bookstore operations in September and the Latvian kiosk and press distribution operations in October. Net sales adjusted for structural changes increased by 0.1%.
In 2011, Trade`s operating profit excluding non-recurring items decreased by 1.4%. The positive effects of divesting loss-making operations as well as the improved performance of kiosk operations and trade services compensated almost fully for the loss of result from the divested movie and bookstore operations. The non-recurring items included in Trade`s operating profit totalled EUR 30.4 million (2010: EUR -3.6 million) and consisted mainly of sales gains and losses related to divestments.
Trade`s investments in tangible and intangible assets totalled EUR 32.4 million (2010: EUR 29.7 million), and focused mainly on concept development in kiosks, ICT projects and the renewal of Finnkino`s long-term rental agreements, which alone accounted for close to one half of the investments. There were no material acquisitions in 2011.
THE GROUP
Personnel
In 2011, the average number of persons employed by the Sanoma Group was 17,618 (2010: 19,462). In full-time equivalents, the number of Group employees at the end of the year was 13,646 (2010: 15,405). Divestments and restructuring decreased the number of personnel in 2011. In addition, some of the restructuring measures initiated in 2011 will affect the number of employees also in 2012. In full-time equivalents, Media had 5,844 (2010: 5,419) employees at the end of 2011, News 2,025 (2010: 2,016), Learning 2,489 (2010: 2,656), Trade 3,110 (2010: 5,149) and Group functions 178 (2010: 165).
The total employee benefits to Sanoma employees in 2011, including the expense recognition of options granted, amounted to EUR 549.7 million (2010: 545.9 million).
Dividend
On 31 December 2011, Sanoma Corporation`s distributable funds were EUR 539.8 million, of which profit for the year made up EUR 77.6 million.
The Board of Directors proposes to the Annual General Meeting that:
- A dividend of EUR 0.60 per share, or in total an estimated EUR 97.7 million, shall be paid.
- A sum of EUR 0.55 million shall be transferred to the donation reserve and used at the Board`s discretion.
- The amount left in equity shall be EUR 441.6 million.
In accordance with the Annual General Meeting`s decision, Sanoma paid out a per-share dividend of EUR 1.10 for 2010. Sanoma conducts an active dividend policy and primarily distributes over half of the Group result for the period in dividends.
AGM, Financial Statements and Annual Report
Sanoma Corporation`s AGM will be held on 3 April 2012 at 2 pm at the Congress Wing of the Helsinki Exhibition & Convention Centre, Finland. The agenda for the meeting will be later available on the Group`s website at Sanoma.com.
Sanoma`s annual review, Financial Statements, Board of Directors` Report and Corporate Governance Statement for 2011 will be published in digital format in the Materials section of the Group website during week 10 (the week beginning 5 March). A printed copy of the Annual Report will be available during week 11 (the week beginning 12 March) and can be ordered from the Group website.
Shares and holdings
In 2011, 89,486,428 (2010: 63,477,720) Sanoma shares were traded on the NASDAQ OMX Helsinki. Traded shares accounted for 55% (2010: 39%) of the average number of shares. Sanoma`s total stock exchange turnover was EUR 1,096.9 million (2010: EUR 987.9 million).
The volume-weighted average price of a Sanoma share was EUR 12.30, with a low of EUR 7.83 and a high of EUR 17.79. At the end of the year, Sanoma`s market capitalisation was EUR 1.4 billion (2010: EUR 2.6 billion), with Sanoma`s share closing at EUR 8.87 (2010: EUR 16.22).
The Company had 28,302 shareholders at the end of the year, with foreign holdings accounting for 9.8% (2010: 9.8%) of all shares and votes. There were no major changes in share ownership during the fourth quarter and Sanoma did not issue any flagging announcements.
At the end of 2011, Sanoma`s registered share capital was EUR 71,258,986.82 and the number of shares was 162,812,093 including the 1,500 interim shares registered on 3 January 2012.
Board of Directors, auditors and management
The AGM held on 5 April 2011 confirmed the number of Sanoma`s Board members as 10. Board members Jane Erkko and Rafaela Seppälä were re-elected, and Nancy McKinstry and Kai Öistämö were elected as new members to the Board. The Board of Directors of Sanoma consists of Jaakko Rauramo (Chairman), Sakari Tamminen (Vice Chairman), and Annet Aris, Jane Erkko, Antti Herlin, Sirkka Hämäläinen-Lindfors, Seppo Kievari, Nancy McKinstry, Rafaela Seppälä and Kai Öistämö as members.
The AGM appointed chartered accountants KPMG Oy Ab as the auditor of the Company, with Pekka Pajamo, Authorised Public Accountant, as Auditor in Charge.
Sanoma`s new organisational model was announced on 5 August 2011. As of 1 September, the Executive Management Group (EMG) comprises: Harri-Pekka Kaukonen (President and CEO of the Sanoma Group, chairman of the EMG), Jacqueline Cuthbert (CHRO), Jacques Eijkens (CEO, Sanoma Learning), Koos Guis (CEO, Sanoma Media Russia & CEE; acting member), Kim Ignatius (CFO), John Martin (Chief Digital Officer, CDO), Dick Molman (CEO, Sanoma Media Netherlands), Anu Nissinen (CEO, Sanoma Media Finland), Pekka Soini (CEO, Sanoma News), Aimé Van Hecke (CEO, Sanoma Media Belgium), and Customer Market Officer, CMO, which will be appointed later. On 9 December, it was announced that Heike Rosener will succeed retiring Koos Guis as of 1 February 2012.
Board authorisations
The AGM held on 5 April 2011 authorised the Board to decide on the repurchase of a maximum of 16,000,000 of the Company`s own shares, accounting for 9.8% of total voting rights that the maximum number of own shares covered by the authorisation would provide entitlement to. This authorisation is effective until 30 June 2012 and terminates the corresponding authorisation granted by the AGM on 8 April 2010. The Board of Directors did not exercise its right under this authorisation during the fourth quarter.
The Board also has a valid authorisation from the AGM held on 8 April 2010 to decide on an issuance of a maximum of 82,000,000 new shares and a transfer of a maximum of 5,000,000 treasury shares, together accounting for 35.5% of total voting rights that the maximum number of own shares covered by the authorisation would provide entitlement to. The authorisation will be valid until 30 June 2013. Under this authorisation, the Board decided on 20 December 2011 on the issuance of Stock Option Scheme 2011 and on 22 December 2010 on the issuance of Stock Option Scheme 2010.
Seasonal fluctuation
The net sales and results of media businesses are particularly affected by the development of advertising. Advertising sales are influenced, for example, by the number of newspaper and magazine issues published each quarter, which varies annually. Television advertising in the Netherlands, Finland and Belgium is usually strongest in the second and fourth quarters.
Learning accrues most of its net sales and results during the second and third quarters.
Seasonal business fluctuations influence the Group`s net sales and operating profit, with the first quarter traditionally being clearly the smallest one for both.
Significant risks and uncertainty factors
The most significant risks and uncertainty factors Sanoma currently faces are described in the Financial Statements and on the Group`s website at Sanoma.com, together with the Group`s main principles of risk management. Many of the identified risks relate to changes in customer preferences. The driving force behind these changes is the ongoing digitisation. Sanoma has identified action plans in all its strategic business units on how to respond to this challenge.
With regard to changing customer preferences and digitisation, new entrants might be able to better utilise these changes and therefore gain market share from Sanoma`s established businesses.
Normal business risks associated with the industry relate to developments in media advertising and consumer spending. Media advertising is sensitive to economic fluctuations. Therefore, the general economic conditions of the countries in which the Group operates and the economic trends of the industry influence Sanoma`s business activities and operational performance.
Sanoma`s financial risks include interest rate and currency risks, liquidity risk and credit risk. Other risks include risks related to equity, impairment and availability of capital. At a Group level, the most significant risks relate to liquidity risk and changes in exchange rates and interest rates.
As a result of the SBS acquisition, Sanoma`s consolidated balance sheet includes about EUR 3.0 billion in goodwill, publishing rights and other intangible assets. Most of this is related to magazine and TV operations. In accordance with IFRS, instead of goodwill being amortised regularly, it is tested for impairment on an annual basis, or whenever there is any indication of impairment. Major changes in business fundamentals could lead to impairment.
GROUP FINANCIAL STATEMENTS (FULL-YEAR FIGURES AUDITED)
Accounting policies
The Sanoma Group has prepared its Interim Report in accordance with IAS 34 `Interim Financial Reporting` while adhering to related IFRS standards and interpretations applicable within the EU on 31 December 2011. The accounting policies of the Interim Report and the definitions of key indicators are presented on the Sanoma website at Sanoma.com. All figures have been rounded and consequently the sum of individual figures can deviate from the presented sum figure. Key figures have been calculated using exact figures.
| CONSOLIDATED INCOME STATEMENT | ||||
| EUR million | 10-12/ | 10-12/ | 1-12/ | 1-12/ |
| 2011 | 2010 | 2011 | 2010 | |
| NET SALES | 725.4 | 717.3 | 2,746.2 | 2,761.2 |
| Other operating income | 37.4 | 20.3 | 144.3 | 258.8 |
| Materials and services | 277.9 | 320.4 | 1,123.9 | 1,207.4 |
| Employee benefit expenses | 185.6 | 175.3 | 676.5 | 668.6 |
| Other operating expenses | 157.3 | 168.7 | 586.2 | 554.2 |
| Share of results in associated companies | -1.2 | |||
| Depreciation, amortisation and impairment losses | 90.1 | 45.9 | 319.7 | 197.1 |
| OPERATING PROFIT | 51.9 | 27.4 | 182.9 | 392.7 |
| Share of results in associated companies | -2.2 | -24.0 | -3.7 | -23.9 |
| Financial income | 9.3 | 2.4 | 13.9 | 11.1 |
| Financial expenses | 24.6 | 6.6 | 49.1 | 23.8 |
| RESULT BEFORE TAXES | 34.4 | -0.8 | 144.1 | 356.0 |
| Income taxes | -10.0 | -0.2 | -58.1 | -58.6 |
| RESULT FOR THE PERIOD | 24.4 | -1.0 | 86.0 | 297.3 |
| Result attributable to: | ||||
| Equity holders of the Parent Company | 18.1 | -0.9 | 84.5 | 299.6 |
| Non-controlling interests | 6.2 | -0.1 | 1.5 | -2.3 |
| Earnings per share for result attributable | ||||
| to the equity holders of the Parent company: | ||||
| Earnings per share, EUR | 0.11 | -0.01 | 0.52 | 1.85 |
| Diluted earnings per share, EUR | 0.11 | -0.01 | 0.52 | 1.85 |
| STATEMENT OF COMPREHENSIVE INCOME | ||||
| EUR million | 10-12/ | 10-12/ | 1-12/ | 1-12/ |
| 2011 | 2010 | 2011 | 2010 | |
| Result for the period | 24.4 | -1.0 | 86.0 | 297.3 |
| Other comprehensive income: | ||||
| Change in translation differences | -2.2 | 1.2 | -25.6 | 9.8 |
| Cash flow hedges | -4.8 | 0.2 | -11.7 | 0.2 |
| Income tax related to cash flow hedges | 1.1 | -0.1 | 2.9 | -0.1 |
| Other comprehensive income for the period, net of tax | -5.9 | 1.3 | -34.4 | 10.0 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 18.5 | 0.3 | 51.6 | 307.3 |
| Total comprehensive income attributable to: | ||||
| Equity holders of the Parent Company | 12.3 | 0.4 | 50.1 | 309.6 |
| Non-controlling interests | 6.2 | -0.1 | 1.5 | -2.3 |
| CONSOLIDATED BALANCE SHEET | ||
| EUR million | 31.12.2011 | 31.12.2010 |
| ASSETS | ||
| NON-CURRENT ASSETS | ||
| Tangible assets | 343.6 | 429.3 |
| Investment property | 5.8 | 8.7 |
| Goodwill | 2,316.2 | 1,447.5 |
| Other intangible assets | 709.8 | 403.2 |
| Interests in associated companies | 219.3 | 248.7 |
| Available-for-sale financial assets | 15.4 | 15.8 |
| Deferred tax receivables | 29.9 | 34.8 |
| Trade and other receivables | 44.3 | 28.3 |
| NON-CURRENT ASSETS, TOTAL | 3,684.3 | 2,616.3 |
| CURRENT ASSETS | ||
| Inventories | 96.8 | 122.8 |
| Income tax receivables | 12.5 | 8.6 |
| Trade and other receivables | 418.4 | 391.0 |
| Available-for-sale financial assets | 0.3 | 0.3 |
| Cash and cash equivalents | 116.0 | 64.0 |
| CURRENT ASSETS, TOTAL | 644.0 | 586.8 |
| ASSETS, TOTAL | 4,328.3 | 3,203.0 |
| EQUITY AND LIABILITIES | ||
| EQUITY | ||
| Equity attributable to the equity holders of the Parent Company | ||
| Share capital | 71.3 | 71.3 |
| Fund for invested unrestricted equity | 203.3 | 203.3 |
| Other reserves | -8.7 | 0.2 |
| Other equity | 988.0 | 1,096.5 |
| 1,253.9 | 1,371.2 | |
| Non-controlling interests | 270.3 | 4.8 |
| EQUITY, TOTAL | 1,524.2 | 1,376.0 |
| NON-CURRENT LIABILITIES | ||
| Deferred tax liabilities | 146.1 | 94.2 |
| Pension obligations | 17.2 | 26.7 |
| Provisions | 6.3 | 7.3 |
| Interest-bearing liabilities | 1,101.2 | 472.5 |
| Trade and other payables | 38.9 | 19.9 |
| NON-CURRENT LIABILITIES, TOTAL | 1,309.7 | 620.5 |
| CURRENT LIABILITIES | ||
| Provisions | 15.3 | 15.6 |
| Interest-bearing liabilities | 626.0 | 469.4 |
| Income tax liabilities | 27.4 | 22.1 |
| Trade and other payables | 825.8 | 699.4 |
| CURRENT LIABILITIES, TOTAL | 1,494.5 | 1,206.5 |
| LIABILITIES, TOTAL | 2,804.1 | 1,827.0 |
| EQUITY AND LIABILITIES, TOTAL | 4,328.3 | 3,203.0 |
| CHANGES IN CONSOLIDATED EQUITY | |||||||
| EUR million | |||||||
| Equity attributable to the equity holders of the Parent Company | |||||||
| Fund | |||||||
| for | Non- | ||||||
| inves- | cont- | ||||||
| ted | rol- | ||||||
| Share | unres- | Other | ling | Equi- | |||
| capi- | tricted | Re- | Other | inte- | ty, | ||
| tal | equity | serves | equity | Total | rests | total | |
| Equity at | |||||||
| 1 Jan 2010 | 71.3 | 188.8 | 931.1 | 1,191.2 | 15.4 | 1,206.6 | |
| Share subscription | |||||||
| with options | 14.5 | 14.5 | 14.5 | ||||
| Expense | |||||||
| recognition of | |||||||
| options granted | 3.6 | 3.6 | 3.6 | ||||
| Dividends paid | -129.5 | -129.5 | -1.9 | -131.3 | |||
| Change in non- | |||||||
| controlling | |||||||
| interests | -17.8 | -17.8 | -6.5 | -24.3 | |||
| Donations | -0.5 | -0.5 | -0.5 | ||||
| Comprehensive | |||||||
| income for the period | 0.2 | 309.4 | 309.6 | -2.3 | 307.3 | ||
| Equity at | |||||||
| 31 Dec 2010 | 71.3 | 203.3 | 0.2 | 1096.5 | 1371.2 | 4.8 | 1,376.0 |
| Equity at | |||||||
| 1 Jan 2011 | 71.3 | 203.3 | 0.2 | 1,096.5 | 1,371.2 | 4.8 | 1,376.0 |
| Share subscription | |||||||
| with options | 0.0 | 0.0 | 0.0 | ||||
| Expense | |||||||
| recognition of | |||||||
| options granted | 3.5 | 3.5 | 3.5 | ||||
| Dividends paid | -179.1 | -179.1 | -0.6 | -179.7 | |||
| Change in non- | |||||||
| controlling | |||||||
| interests | 8.2 | 8.2 | 264.6 | 272.8 | |||
| Comprehensive | |||||||
| income for the period | -8.8 | 58.9 | 50.1 | 1.5 | 51.6 | ||
| Equity at | |||||||
| 31 Dec 2011 | 71.3 | 203.3 | -8.7 | 988.0 | 1,253.9 | 270.3 | 1,524.2 |
| INCOME STATEMENT BY QUARTER | ||||||||
| EUR million | 1-3/ | 4-6/ | 7-9/ | 10-12/ | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| 2011 | 2011 | 2011 | 2011 | 2010 | 2010 | 2010 | 2010 | |
| NET SALES | 610.2 | 689.7 | 720.9 | 725.4 | 637.9 | 715.4 | 690.6 | 717.3 |
| Other operating income | 12.8 | 77.0 | 17.0 | 37.4 | 20.4 | 197.3 | 20.9 | 20.3 |
| Materials and services | 263.5 | 287.7 | 294.8 | 277.9 | 279.0 | 307.3 | 300.7 | 320.4 |
| Employee benefit expenses | 164.0 | 168.5 | 158.3 | 185.6 | 169.1 | 172.3 | 151.9 | 175.3 |
| Other operating expenses | 128.4 | 147.2 | 153.4 | 157.3 | 128.9 | 132.4 | 124.2 | 168.7 |
| Share of results in associated companies | -0.1 | -1.1 | ||||||
| Depreciation, amortisation and impairment losses | 39.8 | 41.9 | 147.9 | 90.1 | 40.8 | 39.6 | 70.7 | 45.9 |
| OPERATING PROFIT | 27.3 | 121.3 | -17.6 | 51.9 | 40.4 | 261.0 | 63.9 | 27.4 |
| Share of results in associated companies | 1.9 | -0.1 | -3.2 | -2.2 | -2.4 | 1.7 | 0.8 | -24.0 |
| Financial income | 2.2 | 1.3 | 1.0 | 9.3 | 2.2 | 2.5 | 4.0 | 2.4 |
| Financial expenses | 4.7 | 6.6 | 13.1 | 24.6 | 6.0 | 6.2 | 5.0 | 6.6 |
| RESULT BEFORE TAXES | 26.7 | 115.8 | -32.9 | 34.4 | 34.1 | 259.0 | 63.7 | -0.8 |
| Income taxes | -8.2 | -18.3 | -21.5 | -10.0 | -10.0 | -23.8 | -24.6 | -0.2 |
| RESULT FOR THE PERIOD | 18.5 | 97.5 | -54.4 | 24.4 | 24.1 | 235.1 | 39.1 | -1.0 |
| Result attributable to: | ||||||||
| Equity holders of the Parent Company | 18.5 | 97.5 | -49.7 | 18.1 | 25.9 | 235.4 | 39.2 | -0.9 |
| Non-controlling interests | 0.0 | -0.1 | -4.6 | 6.2 | -1.8 | -0.2 | -0.1 | -0.1 |
| Earnings per share for result attributable | ||||||||
| to the equity holders of the Parent company: | ||||||||
| Earnings per share, EUR | 0.11 | 0.60 | -0.31 | 0.11 | 0.16 | 1.45 | 0.24 | -0.01 |
| Diluted earnings per share, EUR | 0.11 | 0.60 | -0.31 | 0.11 | 0.16 | 1.45 | 0.24 | -0.01 |
| INCOME STATEMENT BY QUARTER | ||||||||
| EUR million | 1-12/ | 1-12/ | ||||||
| 2011 | 2010 | |||||||
| NET SALES | 2,746.2 | 2,761.2 | ||||||
| Other operating income | 144.3 | 258.8 | ||||||
| Materials and services | 1,123.9 | 1,207.4 | ||||||
| Employee benefit expenses | 676.5 | 668.6 | ||||||
| Other operating expenses | 586.2 | 554.2 | ||||||
| Share of results in associated companies | -1.2 | |||||||
| Depreciation, amortisation and impairment losses | 319.7 | 197.1 | ||||||
| OPERATING PROFIT | 182.9 | 392.7 | ||||||
| Share of results in associated companies | -3.7 | -23.9 | ||||||
| Financial income | 13.9 | 11.1 | ||||||
| Financial expenses | 49.1 | 23.8 | ||||||
| RESULT BEFORE TAXES | 144.1 | 356.0 | ||||||
| Income taxes | -58.1 | -58.6 | ||||||
| RESULT FOR THE PERIOD | 86.0 | 297.3 | ||||||
| Result attributable to: | ||||||||
| Equity holders of the Parent Company | 84.5 | 299.6 | ||||||
| Non-controlling interests | 1.5 | -2.3 | ||||||
| Earnings per share for result attributable | ||||||||
| to the equity holders of the Parent company: | ||||||||
| Earnings per share, EUR | 0.52 | 1.85 | ||||||
| Diluted earnings per share, EUR | 0.52 | 1.85 | ||||||
| CONSOLIDATED CASH FLOW STATEMENT | 1-12/ | 1-12/ | |
| EUR million | 2011 | 2010 | |
| OPERATIONS | |||
| Result for the period | 86.0 | 297.3 | |
| Adjustments | |||
| Income taxes | 58.1 | 58.6 | |
| Financial expenses | 49.1 | 23.8 | |
| Financial income | -13.9 | -11.1 | |
| Share of results in associated companies | 4.9 | 23.9 | |
| Depreciation, amortisation and impairment losses | 319.7 | 197.1 | |
| Gains/losses on sales of non-current assets | -56.8 | -195.2 | |
| Other adjustments | -116.9 | -55.1 | |
| Change in working capital | |||
| Change in trade and other receivables | 0.8 | -41.1 | |
| Change in inventories | 0.4 | 9.5 | |
| Change in trade and other payables, and provisions | 49.0 | 36.8 | |
| Interest paid | -23.6 | -13.7 | |
| Other financial items | -17.4 | -3.2 | |
| Taxes paid | -65.5 | -53.9 | |
| CASH FLOW FROM OPERATIONS | 273.8 | 273.8 | |
| INVESTMENTS | |||
| Acquisition of tangible and intangible assets | -70.8 | -81.8 | |
| Operations acquired | -1,350.2 | -49.5 | |
| Sales of tangible and intangible assets | 14.0 | 17.8 | |
| Operations sold | 74.0 | 30.8 | |
| Loans granted | -8.7 | -0.8 | |
| Repayments of loan receivables | 246.3 | 3.5 | |
| Sales of short-term investments | 0.0 | 0.2 | |
| Interest received | 3.2 | 2.7 | |
| Dividends received | 14.9 | 3.9 | |
| CASH FLOW FROM INVESTMENTS | -1,077.4 | -73.1 | |
| CASH FLOW BEFORE FINANCING | -803.6 | 200.8 | |
| FINANCING | |||
| Proceeds from share subscriptions | 0.0 | 14.5 | |
| Minority capital investment/repayment of equity | 264.0 | 1.6 | |
| Change in loans with short maturity | -183.5 | 4.2 | |
| Drawings of other loans | 1,042.7 | 287.7 | |
| Repayments of other loans | -84.5 | -355.8 | |
| Payment of finance lease liabilities | -2.0 | -3.7 | |
| Dividends paid | -179.7 | -131.3 | |
| Donations/other profit sharing | 0.0 | -0.5 | |
| CASH FLOW FROM FINANCING | 857.1 | -183.3 | |
| CHANGE IN CASH AND CASH EQUIVALENTS | |||
| ACCORDING TO CASH FLOW STATEMENT | 53.6 | 17.5 | |
| Effect of exchange rate differences on cash and cash equivalents | -1.1 | 2.1 | |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 52.4 | 19.5 | |
| Cash and cash equivalents at the beginning of the period | 41.1 | 21.6 | |
| Cash and cash equivalents at the end of the period | 93.5 | 41.1 | |
Cash and cash equivalents in cash flow statement include cash and cash equivalents less bank overdrafts.
| NET SALES BY BUSINESS UNIT | ||||||||
| EUR million | 1-3/ | 4-6/ | 7-9/ | 10-12/ | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| 2011 | 2011 | 2011 | 2011 | 2010 | 2010 | 2010 | 2010 | |
| MEDIA | ||||||||
| The Netherlands | 105.3 | 130.6 | 174.0 | 232.2 | 107.4 | 128.0 | 118.8 | 136.1 |
| Finland | 74.2 | 79.4 | 70.0 | 86.2 | 92.6 | 91.7 | 67.5 | 87.4 |
| Russia & CEE | 51.4 | 54.3 | 50.8 | 56.7 | 48.7 | 54.3 | 51.0 | 60.9 |
| Belgium | 50.1 | 48.7 | 48.4 | 61.9 | 53.5 | 52.3 | 48.7 | 53.8 |
| Other businesses and eliminations | 10.2 | 10.7 | 12.3 | 8.6 | 9.9 | 13.0 | 11.5 | 12.4 |
| TOTAL | 291.1 | 323.7 | 355.5 | 445.6 | 312.1 | 339.4 | 297.5 | 350.6 |
| NEWS | ||||||||
| Helsingin Sanomat | 61.2 | 61.2 | 55.3 | 60.8 | 59.1 | 56.7 | 55.5 | 64.1 |
| Ilta-Sanomat | 19.1 | 22.2 | 21.6 | 21.6 | 19.9 | 20.7 | 21.1 | 21.6 |
| Other publishing | 23.7 | 25.0 | 22.9 | 25.4 | 25.3 | 25.6 | 23.5 | 25.0 |
| Other businesses and eliminations | 4.4 | 3.9 | 3.4 | 4.2 | 5.0 | 5.5 | 4.6 | 4.2 |
| TOTAL | 108.4 | 112.2 | 103.2 | 112.0 | 109.4 | 108.5 | 104.8 | 114.9 |
| LEARNING | ||||||||
| Learning | 34.3 | 87.4 | 100.2 | 34.7 | 29.9 | 85.0 | 100.6 | 33.7 |
| Language services | 8.7 | 8.1 | 7.2 | 8.4 | 6.9 | 6.2 | 5.2 | 8.9 |
| Literature and other businesses | 20.1 | 15.1 | 13.9 | 10.4 | 23.6 | 17.2 | 18.0 | 24.8 |
| Eliminations | -2.4 | -2.1 | -0.1 | -0.8 | -2.3 | -2.9 | -2.5 | -2.2 |
| TOTAL | 60.7 | 108.6 | 121.2 | 52.7 | 58.2 | 105.5 | 121.2 | 65.1 |
| TRADE | ||||||||
| Kiosk operations | 85.3 | 102.3 | 97.6 | 94.0 | 91.9 | 104.9 | 99.2 | 102.4 |
| Trade services | 32.4 | 31.1 | 29.6 | 28.6 | 30.3 | 33.8 | 32.7 | 34.5 |
| Bookstores | 24.8 | 18.8 | 29.7 | 3.7 | 26.0 | 19.9 | 31.6 | 43.2 |
| Movie operations | 21.9 | 6.5 | 0.0 | 0.0 | 25.4 | 19.9 | 20.7 | 23.9 |
| Eliminations | -2.6 | -2.4 | -2.3 | -1.8 | -3.4 | -4.0 | -3.1 | -3.5 |
| TOTAL | 161.8 | 156.3 | 154.5 | 124.5 | 170.2 | 174.4 | 181.1 | 200.5 |
| Other companies and eliminations | -11.7 | -11.0 | -13.5 | -9.3 | -12.0 | -12.5 | -14.1 | -13.8 |
| TOTAL | 610.2 | 689.7 | 720.9 | 725.4 | 637.9 | 715.4 | 690.6 | 717.3 |
| NET SALES BY BUSINESS UNIT | ||||||||
| EUR million | 1-12/ | 1-12/ | ||||||
| 2011 | 2010 | |||||||
| MEDIA | ||||||||
| The Netherlands | 642.0 | 490.4 | ||||||
| Finland | 309.7 | 339.3 | ||||||
| Russia & CEE | 213.1 | 214.9 | ||||||
| Belgium | 209.1 | 208.3 | ||||||
| Other businesses and eliminations | 41.8 | 46.7 | ||||||
| TOTAL | 1,415.8 | 1,299.6 | ||||||
| NEWS | ||||||||
| Helsingin Sanomat | 238.5 | 235.4 | ||||||
| Ilta-Sanomat | 84.4 | 83.3 | ||||||
| Other publishing | 97.0 | 99.5 | ||||||
| Other businesses and eliminations | 15.9 | 19.4 | ||||||
| TOTAL | 435.8 | 437.6 | ||||||
| LEARNING | ||||||||
| Learning | 256.6 | 249.3 | ||||||
| Language services | 32.4 | 27.1 | ||||||
| Literature and other businesses | 59.5 | 83.6 | ||||||
| Eliminations | -5.4 | -9.9 | ||||||
| TOTAL | 343.1 | 350.1 | ||||||
| TRADE | ||||||||
| Kiosk operations | 379.2 | 398.4 | ||||||
| Trade services | 121.7 | 131.3 | ||||||
| Bookstores | 77.0 | 120.6 | ||||||
| Movie operations | 28.4 | 90.0 | ||||||
| Eliminations | -9.2 | -14.0 | ||||||
| TOTAL | 597.0 | 726.3 | ||||||
| Other companies and eliminations | -45.6 | -52.4 | ||||||
| TOTAL | 2,746.2 | 2,761.2 | ||||||
| OPERATING PROFIT BY SEGMENT | ||||||||
| EUR million | 1-3/ | 4-6/ | 7-9/ | 10-12/ | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| 2011 | 2011 | 2011 | 2011 | 2010 | 2010 | 2010 | 2010 | |
| Media | 22.7 | 47.0 | -31.0 | 53.2 | 31.2 | 229.3 | -4.2 | 31.6 |
| News | 12.9 | 9.9 | 12.5 | 4.9 | 15.6 | 8.9 | 15.7 | 15.9 |
| Learning | -5.2 | 27.3 | 17.3 | -22.7 | -6.4 | 25.1 | 45.5 | -17.2 |
| Trade | 3.3 | 44.4 | -8.4 | 9.9 | 3.7 | 2.4 | 6.4 | 3.0 |
| Other companies and eliminations | -6.5 | -7.4 | -7.9 | 6.7 | -3.7 | -4.7 | 0.5 | -6.1 |
| TOTAL | 27.3 | 121.3 | -17.6 | 51.9 | 40.4 | 261.0 | 63.9 | 27.4 |
| OPERATING PROFIT BY SEGMENT | ||||||||
| EUR million | 1-12/ | 1-12/ | ||||||
| 2011 | 2010 | |||||||
| Media | 92.0 | 287.9 | ||||||
| News | 40.2 | 56.1 | ||||||
| Learning | 16.6 | 47.1 | ||||||
| Trade | 49.2 | 15.5 | ||||||
| Other companies and eliminations | -15.1 | -13.9 | ||||||
| TOTAL | 182.9 | 392.7 | ||||||
| OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS BY SEGMENT | ||||||||
| EUR million | 1-3/ | 4-6/ | 7-9/ | 10-12/ | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| 2011 | 2011 | 2011 | 2011 | 2010 | 2010 | 2010 | 2010 | |
| Media | 22.7 | 37.9 | 25.8 | 64.6 | 31.2 | 47.3 | 31.0 | 36.3 |
| News | 12.9 | 9.9 | 12.5 | 14.1 | 9.6 | 8.9 | 15.7 | 13.0 |
| Learning | -6.1 | 29.0 | 42.4 | -19.7 | -5.2 | 26.4 | 45.7 | -14.4 |
| Trade | 3.3 | 4.1 | 6.8 | 4.6 | 3.7 | 2.4 | 7.4 | 5.6 |
| Other companies and eliminations | -6.5 | -8.4 | -7.9 | -2.9 | -3.7 | -4.7 | -4.9 | -6.1 |
| TOTAL | 26.4 | 72.6 | 79.5 | 60.6 | 35.6 | 80.3 | 94.9 | 34.5 |
| OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS BY SEGMENT | ||||||||
| EUR million | 1-12/ | 1-12/ | ||||||
| 2011 | 2010 | |||||||
| Media | 151.1 | 145.8 | ||||||
| News | 49.4 | 47.2 | ||||||
| Learning | 45.5 | 52.6 | ||||||
| Trade | 18.8 | 19.1 | ||||||
| Other companies and eliminations | -25.7 | -19.3 | ||||||
| TOTAL | 239.1 | 245.4 | ||||||
SEGMENT INFORMATION
Sanoma Group has four reportable segments: Media, News, Learning and Trade. The segmentation is based on business model and product differences. Media, operating in 12 countries, is responsible for magazines and TV operations. Sanoma News is responsible for newspapers in Finland. Both segments also have a great variety of online and mobile services. Learning`s business is mainly B2B business. Trade, on the other hand, operates on a retail business model. In addition to the Group eliminations column unallocated/eliminations includes Group functions and real estate companies as well as items not allocated to segments.
Segment assets do not include cash and cash equivalents, interest-bearing receivables and tax receivables. Transactions between segments are based on market prices.
| Sanoma segments 1.1-31.12.2011 | Unallo- | |||||
| cated/ | Con- | |||||
| Lear- | elimi- | soli- | ||||
| EUR million | Media | News | ning | Trade | nations | dated |
| External net sales | 1,412.1 | 434.1 | 331.9 | 567.8 | 0.3 | 2,746.2 |
| Internal net sales | 3.7 | 1.7 | 11.2 | 29.3 | -45.8 | |
| NET SALES, TOTAL | 1,415.8 | 435.8 | 343.1 | 597.0 | -45.6 | 2,746.2 |
| OPERATING PROFIT | 92.0 | 40.2 | 16.6 | 49.2 | -15.1 | 182.9 |
| Share of results in | ||||||
| associated companies | -2.5 | 0.6 | 0.1 | -1.9 | -3.7 | |
| Financial income | 13.9 | 13.9 | ||||
| Financial expenses | 49.1 | 49.1 | ||||
| RESULT BEFORE TAXES | 144.1 | |||||
| SEGMENT ASSETS | 3,048.7 | 320.7 | 549.0 | 186.9 | 47.2 | 4,152.5 |
| Sanoma segments 1.1-31.12.2010 | Unallo- | |||||
| cated/ | Con- | |||||
| Lear- | elimi- | soli- | ||||
| EUR million | Media | News | ning | Trade | nations | dated |
| External net sales | 1,294.6 | 431.7 | 334.8 | 700.5 | -0.5 | 2,761.2 |
| Internal net sales | 5.0 | 5.9 | 15.2 | 25.7 | -51.9 | |
| NET SALES, TOTAL | 1,299.6 | 437.6 | 350.1 | 726.3 | -52.4 | 2,761.2 |
| OPERATING PROFIT | 287.9 | 56.1 | 47.1 | 15.5 | -13.9 | 392.7 |
| Share of results in | ||||||
| associated companies | -24.5 | 0.3 | 0.0 | 0.3 | -23.9 | |
| Financial income | 11.1 | 11.1 | ||||
| Financial expenses | 23.8 | 23.8 | ||||
| RESULT BEFORE TAXES | 356.0 | |||||
| SEGMENT ASSETS | 1,826.8 | 324.9 | 551.8 | 344.8 | 34.6 | 3,082.8 |
| CHANGES IN PROPERTY, PLANT AND EQUIPMENT | ||
| EUR million | 31.12.2011 | 31.12.2010 |
| Carrying amount at the beginning of the period | 429.3 | 484.2 |
| Increases | 52.9 | 50.7 |
| Acquisition of operations | 7.0 | 0.4 |
| Decreases | -2.2 | -5.4 |
| Disposal of operations | -86.9 | -31.8 |
| Depreciation for the period | -50.5 | -61.8 |
| Impairment losses for the period | -3.9 | -1.0 |
| Exchange rate differences and other changes | -2.1 | -6.1 |
| Carrying amount at the end of the period | 343.6 | 429.3 |
The Group had no commitments for acquisition of tangible assets at the end of the reporting period (2010: EUR 4.0 million).
| EFFECT OF ACQUISITIONS ON THE CONSOLIDATED BALANCE SHEET | ||
| EUR million | 1-12/ | 1-12/ |
| 2011 | 2010 | |
| Acquisition costs | 1,415.2 | 37.1 |
| Fair value of acquired net assets | 433.2 | 14.5 |
| Recognised in equity | -18.7 | |
| Recognised in income statement | -0.5 | |
| Goodwill | 982.0 | 3.5 |
| CONTINGENT LIABILITIES | ||
| EUR million | 31.12.2011 | 31.12.2010 |
| Contingencies for own commitments | ||
| Mortgages | 9.7 | 20.6 |
| Pledges | 2.5 | 6.7 |
| Other items | 0.3 | 0.6 |
| TOTAL | 12.5 | 27.8 |
| Contingencies incurred on behalf of associated companies | ||
| Guarantees | 10.5 | |
| TOTAL | 10.5 | |
| Contingencies incurred on behalf of other companies | ||
| Guarantees | 0.0 | |
| TOTAL | 0.0 | |
| Other contingencies | ||
| Operating lease liabilities | 196.1 | 249.1 |
| Royalties | 19.8 | 23.5 |
| Other items | 51.3 | 26.9 |
| TOTAL | 267.2 | 299.5 |
| TOTAL | 279.7 | 337.8 |
| DERIVATIVE INSTRUMENTS | ||
| EUR million | ||
| Fair values | 31.12.2011 | 31.12.2010 |
| Interest rate derivatives | ||
| Interest rate swaps | -11.5 | 0.1 |
| Currency derivatives | ||
| Forward contracts | 0.6 | |
| KEY EXCHANGE RATES | ||
| 1-12/ | 1-12/ | |
| Average rate | 2011 | 2010 |
| EUR/CZK (Czech Koruna) | 24.64 | 25.36 |
| EUR/HUF (Hungarian Forint) | 280.46 | 276.04 |
| EUR/PLN (Polish Zloty) | 4.13 | 4.01 |
| EUR/RUB (Russian Rouble) | 41.02 | 40.45 |
| EUR/SEK (Swedish Crown) | 9.00 | 9.55 |
| Closing rate | 31.12.2011 | 31.12.2010 |
| EUR/CZK (Czech Koruna) | 25.79 | 25.06 |
| EUR/HUF (Hungarian Forint) | 314.58 | 277.95 |
| EUR/PLN (Polish Zloty) | 4.46 | 3.98 |
| EUR/RUB (Russian Rouble) | 41.77 | 40.82 |
| EUR/SEK (Swedish Crown) | 8.91 | 8.97 |
Press Conference
Press and analyst meeting will be held in English by President and CEO Harri-Pekka Kaukonen and CFO Kim Ignatius at 11 am Finnish time at Nelonen studio, Pursimiehenkatu 26 C (third floor), Helsinki. Webcast of the event can be viewed at Sanoma.com either live or later on as on demand. If you want to ask questions during the webcast, please join the conference call by dialling +44 (0)20 7162 0025 (Europe) or +1 334 323 6201 (US) and quote the conference code 911215.
Sanoma`s 1Q12 Interim Report will be published on Thursday, 3 May, at approximately 11 am Finnish time (CET -1)
Sanoma Corporation
Kim Ignatius
Chief Financial Officer
Additional information: Sanoma`s Investor Relations, Martti Yrjö-Koskinen, tel. +358 105 19 5064 or ir@sanoma.com
Sanoma.com
Sanoma inspires, informs and connects. As a diversified media group, 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 readers, viewers and listeners. We offer a challenging and interesting working environment for nearly 15,000 people in over 20 countries throughout Europe. In 2011, the Group`s net sales totalled EUR 2.7 billion.
Sanoma Financial Statement Release 2011
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
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