Q1 2019 Interim report January−March
Q1 2019 highlights
- Sales of SEK 3,727m (3,452) with 5.9% organic growth
- Operating income for the combined business segments of SEK 317m (286)
- Operating income before items affecting comparability (IAC) of SEK 274m (271)
- Operating income of SEK 218m (271) including IAC of SEK -56m (-)
- Net income of SEK 167m (216) and basic earnings per share of SEK 2.48 (3.24)
- Viaplay subscribers up 99k compared to Q4’18 to 1,357k and represented 59% of total subscriber base
- Total net debt of SEK 4,189m including net obligation for leases of SEK 657m and equivalent to 2.2x 12 month trailing EBITDA before IAC
|(SEKm)||Q1 2019||Q1 2018||Full year
|Operating income - Business segments||317||286||1,706|
|Operating income before IAC||274||271||1,544|
|Items affecting comparability (IAC)||-56||-||-40|
|Operating margin before IAC||7.4%||7.8%||10.6%|
|Basic earnings per share (SEK)||2.48||3.24||19.24|
 2018 figures included in the calculation of 12 month trailing EBITDA before IAC has been adjusted for the estimated effect as if IFRS 16 had been applied for the full period.
 See page 17 for a reconciliation of business segments operating income.
Alternative performance measures used in this report are explained and reconciled on pages 20-22.
President & CEO’s comments
“Our first quarterly report as a listed company is a clear indication of the strength and relevance of our strategy. We have reported continued profitable revenue growth and healthy Viaplay subscriber intake.”
Q1 was a historic quarter for NENT. We set our purpose and values, published our prospectus, held our first capital markets day, met a wide range of investors, and listed our shares on Nasdaq Stockholm. This was all achieved while at the same time growing our sales, profits and subscriber base.
This is possible because of the efforts of the greatest asset we have - our world class team. We are continuing to build a company that is very well positioned to benefit from technological innovation and the changes in consumer behaviour. We are well on our way to be the leading streamed entertainment provider in the Nordics, and a Nordic storyteller appealing to global audiences.
NENT is a unique play on the Nordic streaming market. Scaling Viaplay is the best way to drive long-term shareholder value, and we intend to do so while continuing to deliver profitable growth.
Our debut quarterly report as a separately listed company saw organic sales up 6%, segmental operating income up 11% and the addition of 99k Viaplay paying subscribers. Operating income before IAC was up marginally as we now have the higher central operating costs of being a standalone and listed company, which will impact fully in Q2.
Our Broadcasting & Streaming operations delivered 7% top and bottom line growth. Subscription & Other sales, which accounted for 63% of group sales, were up 9% due to high Viaplay subscriber growth as well as the sale of selective content rights to third parties. Advertising sales, which accounted for 26% of group sales, were up 2% with healthy sales growth in both Viafree and Swedish Radio offset by softer ad markets in Norway.
We have recently announced a number of important pan-Nordic content agreements such as the exclusive coverage of Alpine and Cross Country skiing from 2021, IndyCar racing until 2021, the Open golf championship until 2024, as well as movies and series from MGM and NBCU. We have also announced 9, and premiered 3, new Viaplay Originals and will premiere at least 20 this year. We have also signed a series of large scale and long-term strategic distribution partnerships in Denmark.
NENT Studios sales were up 28%, which accounted for 11% of group sales, following the higher scripted production volumes and the operating loss was significantly reduced in what is a seasonally weak quarter.
NENT Group remains very well positioned to drive and benefit from the shift to on-demand and online viewing. Our content offering is unrivaled and is getting even stronger. It is monetised across multiple platforms and windows, and makes NENT a formidable local Nordic leader and challenger to global competition.
President & CEO
2019 Annual General Meeting
The 2019 Annual General Meeting will be held on Wednesday 22 May 2019 in Stockholm.
The Board proposes a dividend of SEK 6.50 per share to be paid out to the shareholders in two equal instalments of SEK 3.25 each. The total proposed cash dividend amounts to approximately SEK 438m. The Board of Directors intends to further propose that the remainder of the Group’s retained earnings for the year 2018 be carried forward into the 2019 accounts. The proposal is in line with the dividend policy for NENT Group that was communicated previously.
|Financial calendar 2019|
|2019 Annual General Meeting
|Q2 interim report||18 July|
|Q3 interim report||24 October|
The company 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:
||+46 (0) 8 506 921 80|
|UK:||+44 (0) 8 445 718 892
|US:||+1 631 510 74 95|
The access pin code for the call is 7370699. To listen to the conference call online and for further information, please visit www.nentgroup.com
Nordic Entertainment Group AB (publ) (NENT Group) is the Nordic region’s leading entertainment provider. We entertain millions of people every day with our streaming services, TV channels and radio stations, and our production companies create content that is experienced around the world. We make life more entertaining by telling stories, touching lives and expanding worlds – from live sports, movies and series to music and original shows. Headquartered in Stockholm, 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 7 May 2019.