Q3 2021 interim report January-September

Expansion on track, 10% organic sales growth and 28% Viaplay subscriber growth

Third quarter highlights

• Viaplay paying subscribers up 28% YoY to 3,608k (2,813) with 322k subscribers added QoQ, of which 36k were Nordic subscribers and 286k were international subscribers
• 9.9% organic sales growth with reported sales of SEK 3,054m (2,828)
• Operating income before associated company income (ACI) and items affecting comparability (IAC) of SEK 80m (176) including SEK -200m impact of Viaplay International expansion
• Total reported operating income of SEK 114m (256) including ACI of SEK 34m (80)
• Net income from continuing operations of SEK 91m (199)
• Adjusted net income from continuing operations of SEK 179m (219) and adjusted EPS of SEK 2.30 (3.25)
• Net income from total operations of SEK 55m (188), and EPS of SEK 0.71 (2.79)
• Announcement at recent Capital Markets Day of higher Viaplay subscriber targets, 5 new expansion markets and raised financial targets
   

President & CEO’s comments

“Q3 was another important step on the path towards our 5 year goals as the international streaming challenger. We reached a number of new milestones including the important launch of Viaplay in Poland, our ninth and largest market so far. The launch was a success and we have established strong local distribution partnerships, contributing to a total of 313k paying international Viaplay subscribers by the end of Q3. This combined with our growth in the Nordics and Baltics, resulted in 28% YoY growth to over 3.6m subscribers. We updated our strategic targets at the recent Capital Markets Day and announced that Viaplay will launch in 5 new markets by the end of 2023, taking the total to 16, and with the aim of having 12m total subscribers by the end of 2025. We are well on track to our year-end target of adding at least 400k Nordic subscribers and 500k international subscribers in 2021. Our 10% group organic revenue growth was primarily driven by Viaplay, which is now established as our largest revenue generating unit, as well as the continuing recovery in advertising spending.”

Viaplay revenues (36% of sales) were up 15% YoY on an organic basis after 28% YoY subscriber growth. We added 36k Nordic subscribers and 286k international subscribers in the quarter to end the first nine months of the year with a total of 3,608k paying subscribers. The revenue growth also reflected the price adjustments made in the Nordic markets in the Spring.

Total streamed minutes of Viaplay viewing of our original content was up 38% YoY, while our coverage of the Bundesliga, English Premier League, UEFA competitions and Formula One all boosted the sports viewing levels. We have increased our Viaplay Originals ambition to at least 50 productions for this year and more than 60 for next year, and secured several major new sports rights for years to come.

Next up are the launches in the US in December, with a focused Nordic content offering through partner platforms to begin with, and then the Netherlands in Q1 next year, which will feature our broadest and strongest expansion market content line-up to date.

Other subscription revenues (34% of sales) were up 1% YoY on an organic basis and reflected the growth in revenues from Allente in particular.     

Advertising revenues (27% of sales) were up 10% YoY on an organic basis, as advertising spending continued to recover and sold out ratios were high as we focused on key industry segments such as travel, leisure and entertainment.

Revenues for the continuing studios businesses (3% of sales) were up 118% YoY on an organic basis, when excluding the NENT Studios UK business that was sold in Q2. This reflects the higher external order and production volumes for our continuing businesses, which have been rebranded as Viaplay Studios and are primarily focused on creating content for Viaplay. We completed the sale of all of the remaining discontinued studios businesses at the end of the quarter.

Our Nordic profits were up 60% and the total EBIT result included the increasing investments that we are making in the international expansion of Viaplay, which will drive our long term growth, profits and margins.

Our joint venture Allente is on track to deliver the SEK 650m of full run-rate cost synergies next year and is also working to upsell Viaplay to the rest of its subscriber base. We received the anticipated SEK 125m quarterly dividend from Allente in Q3, and expect a further SEK 125m in Q4.

Overall, our adjusted net income levels indicate the health of the business, and our ability to generate rising profits in the Nordics while investing into the international expansion.

Our business and sustainability strategies are closely aligned and long term, in order to ensure that we create substantial and sustainable value. We will launch our new 5-year sustainability strategy next year, and are already committing to a number of initiatives to ensure that we produce and deliver content sustainably, increase transparency levels and work to reduce adverse environmental impacts.

There are many lessons to be learned from the pandemic. We have introduced hybrid and flexible new ways of working as we have gradually re-opened our facilities, and there is certainly more to learn as we continue to develop our values-based culture and agile organisation. The pandemic has clearly accelerated the adoption of streaming services and increased the demand for high quality content, indifferent of language. These trends are all here to stay and we remain committed to continuing to deliver the best possible experiences for all of our stakeholders.

Anders Jensen
President & CEO

Shareholder information

Financial calendar

Publication of Full year report      8 February 2022

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/2ufnxsd6

To participate in the conference call, please dial:

Sweden: +46 (0) 8 50 69 21 80

UK:  +44 (0) 2071 928000

US:  +1 63 15 10 74 95

The access code for the call is 3256716.

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)'s Viaplay streaming service is available in Sweden, Denmark, Norway, Finland, Iceland, Estonia, Latvia, Lithuania and Poland. Viaplay will launch in the US in 2021 and the Netherlands and the UK in 2022, followed by Canada, Germany, Austria and Switzerland 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 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 26 October 2021.

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