Q2 2022 interim report January-June

69% growth to 5.5m Viaplay subscribers with further upgrade to subscriber target

Second quarter highlights

>        Viaplay paying subscribers up 69% YoY to 5,549k (3,287) with 766k subscribers added QoQ

>        18% organic sales growth with reported sales of SEK 3,725m (3,072) 

>        Operating income before associated company income (ACI) and items affecting comparability (IAC) of SEK 132m (244) including SEK -239m (-50) impact of Viaplay International expansion

>        Total reported operating income of SEK 205m (179) including ACI of SEK 73m (9) and IAC of SEK 0m (-74)

>        Net income from total operations of SEK 175m (92) and EPS of SEK 2.25 (1.18)

>        Adjusted net income from continuing operations of SEK 212m (266) and adjusted EPS of SEK 2.71 (3.41)

>        Year end Viaplay subscriber target raised from 7m to 7.3m to reflect higher expected international subscriber intake. Full year expected international EBIT loss reduced from approximately SEK 1.5bn to approximately SEK 1.35bn  

 
 
President & CEO’s comments

“We have delivered another quarter that is well in line with our strategy and goals. The strong performance of Viaplay in the Nordics was complemented by further growth in the international operations. As a result of this and our new B2B partnership in Poland, we are upgrading our year-end Viaplay subscriber target from 7m to 7.3m. The Nordic subscriber target remains unchanged after the upgrade last quarter, while the international subscriber target has now been raised from 2.2m to 2.5m. We now expect Group revenues to grow by at least 28% this year, and for higher growth in sales for the international operations to be reflected in lower losses for the international operations of approximately SEK 1.35bn. There is no change to our full year sales growth and profit growth expectations for the Nordic operations. Full year total operating profits for the Group, including ACI and IAC, are expected to be considerably higher than last year, with substantial operating leverage to come in 2023 and beyond.”

Our 18% YoY group organic revenue growth was driven by Viaplay (42% of sales). Viaplay sales were up 42% on an organic basis with the Viaplay subscriber base growing by 69%. We added 766k Viaplay subscribers in the quarter and 2,262k YoY, to end the quarter with 5,549k subscribers.

The accelerated 24% YoY growth in the Viaplay subscriber base in the Nordics was driven by our B2B partnerships and the new agreement with Tele2 in Sweden in particular. Sales for Viaplay in the Nordics were up 17% on an organic basis. The rate of subscriber and sales growth will now accelerate in H2, with rising ARPU levels, as we take on the exclusive and hugely popular Premier League rights in Norway, for which prices have already been adjusted.

The international Viaplay operations added 307k subscribers in the quarter, with revenues growing accordingly. We will add the Premier League rights in the Netherlands, Poland and the Baltics next month, and then launch Viaplay in the UK in the Autumn. The B2B partnerships are working well, and the addition of the new agreement with Canal+ in Poland will also drive accelerated subscriber intake and sales growth in H2 compared to H1.

We have also today announced the acquisition of Premier Sports, an established and growing sports streaming and TV channel subscription business in the UK. This will accelerate our development and secures a growing subscriber base, a complementary portfolio of sports rights, and a number of long-term distribution contracts at an attractive price point. This is not included in our upgraded guidance, as the closing of the acquisition is subject to regulatory approval.

Linear subscription and other revenues (31% of sales) were up 7% YoY on an organic basis. The growth rate is expected to accelerate in H2 as pay-TV prices rise in line with the enhanced content offerings. We have now also secured a number of extended distribution agreements in Norway to reflect the addition of the Premier League to our offering.

Advertising revenues (27% of sales) were up 5% YoY on an organic basis, and reflected market share gains due to our exclusive coverage of the Ice Hockey World Championships, as well as good growth in the radio advertising markets in particular. We are delivering on the annual agreements that were concluded at higher prices, and the level of demand has remained high to date.

The 27% YoY increase in our Nordic profits reflects the operating leverage in the business. The strong subscriber intake and sales growth for the international operations resulted in lower losses for the international expansion, which is why we have upgraded our full year outlook.

Allente is benefitting from the full run-rate cost synergies arising from the completed integration programme, and is contributing to our profits as planned. The anticipated dividend payments will be received in H2.

We are fully funded for our expansion and have full visibility over our forward content costs, which are locked in for years to come. The broader macro-economic outlook and geopolitical backdrop are of course less certain, and we are ready to make adjustments as and when required, as we have done in the past.

Viaplay Group is a values-based and purpose-led organisation that seeks to create sustainable value for all of our stakeholders. This is why we are continuing with our expansion strategy and growth plan, which walk hand in hand with our climate and diversity-related objectives. The second half of this year includes a number of important milestones for us, which we are fully focused on reaching.

Anders Jensen

President & CEO
 

Shareholder information

2022 Annual General Meeting

The Annual General Meeting (AGM) resolved to re-elect Board members Pernille Erenbjerg, Anders Borg, Simon Duffy, Kristina Schauman, Natalie Tydeman and Andrew House. The AGM also re-elected Pernille Erenbjerg as Chair of the Board.

Based on the Group’s strategy and planned investment into the ongoing international expansion, the Board did not propose the payment of an annual ordinary dividend for 2021.

The AGM resolved to implement a long-term incentive plan for 2022. The AGM resolved to re-elect KPMG as auditor until the end of the 2023 AGM. The AGM approved the remuneration to the Board and auditor, in accordance with the Nomination Committee’s proposal. The AGM resolved to authorise the Board to resolve on repurchases of no more than 10%, at any time, of all shares issued by the company, and to amend the company’s Articles of Association to change the company’s business name from Nordic Entertainment Group AB (publ) to Viaplay Group AB (publ).

Financial calendar

Webcast and video message from the CEO

A teleconference and webcast will be held at 09.00 Stockholm local time, 08.00 London local time and 03.00 New York local time. The webcast will be streamed via the following link: https://edge.media-server.com/mmc/p/bho79sne

To participate in the conference call, please dial:

Sweden: +46 (0) 8 505 100 30

UK: + 44 (0) 1 212 818 004

US: + 1 718 705 87 96

Confirmation code: ask the operator for "Viaplay".

Click here for the full report and the CEO video 

Contact

press@viaplaygroup.com (or Roberta Alenius, Head of Corporate Communications: +46 70 270 72 17)
investors@viaplaygroup.com (or Matthew Hooper, Chief Corporate Affairs Officer: +44 7768 440 414)

Notes to editors

Viaplay Group AB (publ) is the international streaming challenger. Our Viaplay streaming service is available in every Nordic and Baltic country, Poland, the US and the Netherlands, and we are expanding rapidly by launching in the UK in 2022, followed by Canada, Germany, Austria and Switzerland in 2023. Viaplay will have a market presence in at least 21 countries by the end of 2023, including at least five partner markets for the Viaplay Select branded content concept. Every day, millions of customers enjoy our unique entertainment offering, including acclaimed Viaplay Originals and an unrivalled line-up of premium live sports. From streaming to TV channels, radio stations and production companies, our purpose is to tell stories, touch lives and expand worlds. Viaplay Group is listed on Nasdaq Stockholm (‘VPLAY B’). This information is information that Viaplay Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on 21 July 2022.

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