Q1 2021 interim report January-March

5 year strategy on track – 16% organic sales growth and 25% Viaplay subscriber growth

• Viaplay paying subscribers up 25% YoY to 3,147k (2,510) with at least 650k paying subscribers to be added in 2021

• 16% organic sales growth with reported sales of SEK 2,982m (3,370m including SEK 723m contribution from subsequently deconsolidated Viasat Consumer business) 

• 33% growth in operating income before associated company income (ACI) and items affecting comparability (IAC) when excluding SEK 96m contribution in Q1 2020 from subsequently deconsolidated Viasat Consumer business

• Total reported operating income of SEK 210m (219) including SEK -36m impact of Viaplay international expansion and SEK 47m (0) of ACI

• Net income from continuing operations of SEK 155m (156)

• Adjusted net income from continuing operations of SEK 231m (158) with adjusted EPS of SEK 3.16 (2.35)

• Net income from total operations of SEK 145m (157), with EPS of SEK 1.99 (2.33)

• Successful completion of share issue to raise SEK 4.35 billion for Viaplay expansion and enhanced financial flexibility 
   

President & CEO’s comments

“Q1 was another busy quarter in which we demonstrated that we are well on track towards our five year strategic targets. We have achieved a lot despite the ongoing challenges of the Coronavirus pandemic. Our new ways of working are working well, and we are developing flexible new set-ups that will be sustainable and inspiring once we are able to reopen our offices fully. Viaplay continues to drive our growth and entertain millions of people with more and more relevant and high quality content. 16% group organic sales growth and 33% underlying profit growth in the quarter illustrate the strength and progress of the business. The successful raising of SEK 4.35 billion from our new share issue will provide the funds for our international expansion, which has started according to plan with the launch in the three Baltic countries. We are on track with our plans, we are making great progress and we are reinventing our ways of working to make the learnings from the pandemic a positive force in the future.”

Viaplay revenues (34% of sales) were up 17% on an organic basis after 25% YoY subscriber growth, as we closed Q1 with 3.147m paying Viaplay subscribers, adding 127k in the quarter. Total streamed minutes on Viaplay were up 16% YoY and reflected the continued and increasing popularity of our originals and unique live sports offering in particular. We continue to expect our paying subscriber base in the Nordics to grow by at least 400k this year.

The successful raising of SEK 4.35bn from existing and new owners in February has enabled us to proceed with the international expansion of Viaplay. The first launch in the three Baltic countries last month has gone well and we have quickly achieved high awareness and strong sign-up levels, as well as signing two new partnership deals with leading local telcos to make Viaplay as broadly available as possible. Next up are Poland in August and the US at the end of the year. We will have more than 250k international subscribers by the end of 2021 and will provide updates in due course.

We are continuing to increase our content investments in the Nordic and international markets. These include more than 40 Viaplay original premieres this year, as well as a range of long-term and high-profile sports rights agreements. We have rolled out price adjustments and are establishing new and extended partnerships with distributors to support the increased investments.     

Other subscription revenues (35% of sales) were up 21% YoY when excluding the contribution from the Viasat Consumer business prior to deconsolidation last year. This performance reflected the growth in revenues from Allente in particular.

Advertising revenues (29% of sales) returned to growth and were up 6% YoY on an organic basis. Prices are up in the annual agreements, and we have taken market shares in almost all areas as demand levels gradually return.

Revenues for the continuing studios businesses (3% of sales) were up 66% YoY on an organic basis as delayed productions recommenced. We are proceeding as planned with the divestment process, in order to focus our studios primarily on the production of original scripted content for Viaplay. We continue to expect the process to complete in H1.

Our EBIT before ACI and IAC was up 33% when excluding the contribution from the Viasat Consumer business last year, and including our initial investment in the international expansion of Viaplay.

Our joint venture Allente is on track to deliver the SEK 650m of cost synergies, as well as the up-selling of Viaplay to the rest of its subscriber base. The company continues to restructure and integrate as planned, and we received a further SEK 250m dividend this quarter.

We are now heading into a period with softer year on year comparisons, due to the major impact of the Coronavirus in Q2 last year in particular. While conscious that the full effect of the pandemic is far from over and certainly not predictable, we are stepping up our investments in the growth of the business, and the opportunity to entertain the ever- increasing number of people who are choosing to stream. We look forward to announcing our next five expansion markets later this year.    

We are on track with our growth and expansion plans. We are streamlining the business and investing in the growth of Viaplay. We have a proven and scalable platform that is constantly learning, and we are totally focused on delivering the best possible customer experience. And we are seeking to do all of this in a sustainable way that takes care of our many and varied stakeholders, as well as the societies and environment in which we operate. Our aim is to be the European streaming champion, and one of the most inclusive and diverse entertainment companies in the world.

Anders Jensen
President & CEO

Shareholder information

2021 Annual General Meeting
The 2021 Annual General Meeting of Nordic Entertainment Group AB (publ) will be held on Wednesday 19 May 2021 by postal voting. As previously communicated, the NENT Group Board of Directors will propose that the Company’s retained earnings for the year ended 31 December 2020 be carried forward into the 2021 accounts, and that no dividend be paid for 2020. The AGM resolutions will be published after the meeting and as soon as the outcome of the postal voting has been established. The AGM notices and related materials are available at www.nentgroup.com.

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:

Sweden: +46 (0) 8 566 184 67
UK: +44 (0) 8 444 819 752
US: +1 6 467 413 167

The access pin code for the call is 9297033.

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, Head of Corporate Communications: +46 70 270 72 17)
investors@nentgroup.com (or Matthew Hooper, Chief Corporate Affairs Officer: +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. Our Viaplay streaming service is available in every Nordic country and in Estonia, Latvia and Lithuania. Viaplay will launch in Poland and the US in 2021, followed by five additional markets by the end of 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 perspective, 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 22 April 2021.

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