Sanoma acquires Santillana Spain, a leading Spanish provider of K-12 learning materials - Seite 2

About Santillana Spain

Santillana Spain is part of Santillana Group, which is the learning business division of Grupo Prisa, the world’s leading Spanish and Portuguese-language media group in the creation and distribution of media and learning content. Santillana Spain is a leading provider of learning materials, primarily textbooks, for primary and secondary education in Spain. It offers schools, students and parents recognised and reputable high-quality learning content under well-known brands, such as Santillana, Loqueleo and Richmond, which Sanoma will have the right to use through exclusive license agreements. In total, K-12 represents approx. 90% and primary education approx. 65% of Santillana Spain’s net sales, offering the business high resilience over-the-cycle.

Adjusted key figures of the acquired business (pro forma, preliminarily adjusted for IFRS, unaudited)

EUR million	FY 2019	FY 2018	Annual average 2016–2019
Net sales	128	110	122
Operational EBITDA	50	43	48
Operational EBIT excl. PPA	43	33	37
Cash flow from operations	27	23	27

In 2019, net sales and earnings of Santillana Spain grew significantly as demand for the current curriculum K-12 learning materials peaked. In 2020–21, a typical cyclical decline in market demand for K-12 learning materials is expected ahead of the introduction of the new curriculum. This is expected to result in lower net sales and earnings of Santillana Spain compared to 2019. The introduction of a new curriculum is expected to accelerate demand in 2022–23 as part of the enactment of a new educational law in Spain, the LOMLOE, which is currently going through the parliamentary approval process.

The value of the acquired net assets on the seller’s balance sheet was EUR 147 million at the end of June 2020 (2019: 144), of which intangible assets represented EUR 15 million (2019: 13). As of the end of June 2020, the acquired business had 570 employees (31 Dec 2019: 568 FTE). They will become employees of Sanoma Learning after the closing of the acquisition.

Sanoma estimates that the acquisition will create run-rate net annual synergies of approx. EUR 4 million. The synergies are expected to be realised in full by 2023 and mainly relate to procurement, technology as well as shared operations and support functions.