Full year report January-December 2020

Viaplay hits target of 3m subscribers with 33% YoY growth and 207k new subscribers in Q4

• Viaplay paying subscribers up 207k QoQ and up 33% (749k) YoY to 3,020k to meet year-end 3m target. Expected addition of 650k new paying subscribers in 2021
• 6% organic sales growth and reported sales of SEK 3,182m (3,825m including SEK 724m contribution from subsequently deconsolidated Viasat Consumer business)
• 22% increase in operating income before associated company income (ACI) and items affecting comparability (IAC) when excluding Q4 2019 SEK 111m contribution from Viasat Consumer business. Reported operating income before ACI and IAC of SEK 426m (460)
• Net income from continuing operations of SEK -4m (-170) including SEK -275m IAC primarily related to Studios non-cash impairment charges
• Adjusted net income from continuing operations of SEK 432m (389) with adjusted EPS of SEK 6.41 (5.78)
• Net income from total operations of SEK -633m (-159) including SEK -895m IAC primarily related to Studios non-cash impairment charges, with EPS of SEK -9.40 (-2.36)
• Announcement and presentation of new financial targets and Viaplay expansion plan at Capital Markets Day on 10 November 2020
• EGM approval on 25 January 2021 for equity issue to raise more than SEK 3.5 billion to fund Viaplay expansion, in light of which Board to propose to 2021 AGM that no dividend be paid for 2020

President & CEO’s comments

“The global Coronavirus pandemic made 2020 a challenging year and is continuing to impact lives in 2021. We have all embraced new ways of working, some of which will improve our lives, society and, hopefully, the environment for the long term. It has been great to see that Viaplay and our other products have been able to entertain millions of people at home, and we are now looking forward to bringing Viaplay to 5 new international markets this year. We accelerated our development in many areas in 2020, with our Viaplay subscriber base growing by 33% and hitting our 3m year-end target, and I’m also very proud of the progress that we have made to become an even more equal and diverse company.”

Viaplay revenues (31% of sales) were up 14% on an organic basis after 33% YoY subscriber growth, as we met our target and ended the year with over 3m paying Viaplay subscribers. Total streamed minutes on Viaplay were up 30% YoY and reflected the continued and increased popularity of our originals, unique sports offering and acquired content, with new viewing records set in each category. 

Following this very positive momentum in 2020, we now expect our paying subscriber base in the Nordics to grow by a further 400k, and for our new international markets to add 250k new subscribers, in 2021. During the year, we will continue to increase our content investments, which will include 40 Viaplay original premieres, a slate of additional acquired content and a range of exciting new sports rights this year. As a result, we are planning to introduce price adjustments during this year.     

Other subscription revenues were up 12% when excluding the contribution from the Viasat Consumer business, which was deconsolidated in May, and reflected the growing wholesale subscriber base.

The rate of decline in advertising sales improved quarter on quarter and organic sales were down 1% YoY. Advertising demand levels are expected to improve gradually, with prices expected to be up in 2021.

Revenues for the continuing studios businesses were down 21% on an organic basis and reflected the postponement of productions due to the pandemic, which led to the previously announced impairment charges. We are refocusing our studios primarily on the production of high quality original scripted content for Viaplay, and the process to sell the other companies, which was delayed by the pandemic, is now proceeding to plan and expected to be completed in H1 this year.

Our EBIT before ACI and IAC was up 22% when excluding the contribution from the now deconsolidated Viasat Consumer business, with our growth and the savings that we have made more than offsetting our Viaplay content investments and FX headwinds.

Our associated company income from Allente was burdened in the fourth quarter by the previously flagged non-cash amortisation and ongoing restructuring charges. Allente has strong and stable cashflows and we received a SEK 1.2bn extraordinary dividend this quarter. Allente is on track to deliver the SEK 650m of cost synergies and up-selling Viaplay to the rest of its subscriber base.

Viaplay Iceland has continued to perform well and we now preparing to launch Viaplay in the Baltics in March, Poland in August and the US at the end of the year, in line with the plans that we set out at the Capital Markets Day. We have also moved our streaming registrations and TV broadcasting licenses to Sweden to provide a long term regulatory foundation from which to  embark on this international expansion.

We held an EGM 25 January, at which the Board was authorised to decide on a new share issue to finance our expansion. We are now preparing the offering. In light of the equity raise and expansion plans, the Board is not proposing the payment of a dividend this year. 

The Coronavirus remains a constant in all of our lives and our first priority remains the safety of our employees. However, in 2020 we have shown that, despite the circumstances, we are able to deliver to our customers and adapt the business to counteract the negative impacts of the pandemic. In 2021, we will continue to build a company that is better prepared than ever for the future.

Anders Jensen
President & CEO

Shareholder information

2021 Annual General Meeting

The 2021 Annual General Meeting of NENT shareholders will be held on Wednesday 19 May 2021 in Stockholm. Shareholders wishing to have matters considered at the meeting should submit their proposals in writing to agm@nentgroup.com or to the Company Secretary, Nordic Entertainment Group AB, BOX 17104, 104 62 Stockholm, Sweden, at least seven weeks before the meeting in order that such proposals may be included in the notices to the meeting. Further details of when and how to register will be published in advance of the meeting. In light of the recent EGM’s authorisation of the issuing of shares in order to raise funding for the Group’s planned expansion, the Board of Directors of NENT Group will propose to the Annual General Meeting of shareholders that the Group’s retained earnings for the year ended 31 December 2020 be carried forward into the 2021 accounts, and that no ordinary cash dividend be paid for 2020. The Group’s annual ordinary cash dividend policy has therefore been suspended for the duration of the upcoming expansion phase, but the Board will continue to consider means of distributing surplus funds to shareholders from time to time and as circumstances allow.

Conference call and video message from the CEO

NENT Group will host a conference call today at 09.00 Stockholm local time, 08.00 London local time and 03.00 New York local time. To participate in the conference call, please dial:

The access pin code for the call is 7970315.

To listen to the conference call online and for further information, please visit www.nentgroup.com

Click here to see the video message from the CEO

Contact us:
press@nentgroup.com (or Roberta Alenius: +46 70 270 72 17)
investors@nentgroup.com (or Matthew Hooper: +44 7768 440 414)

Notes to editors
Nordic Entertainment Group AB (publ) (NENT Group) is the Nordic region’s leading streaming company and our vision is to become the European streaming champion. entertainment provider. Our Viaplay streaming service is available in every Nordic country and will launch in Estonia, Latvia, Lithuania, Poland and the US in 2021., followed by five additional markets by 2023 We operate streaming services, TV channels, radio stations and production companies, and our purpose is to tell stories, touch lives and expand worlds. Headquartered in Stockholm with a global outlook, NENT Group is listed on Nasdaq Stockholm (‘NENT A’ and ‘NENT B’). This information is information that Nordic Entertainment Group AB (publ) (NENT Group) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on 9 February 2021.

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