Q1 2023 interim report January-March

Viaplay subscribers up 60% and Group sales up 30%

 

First quarter highlights

>         Viaplay paying subscribers up 60% YoY to 7,643k (4,783) with 325k subscribers added QoQ

>         Viaplay revenues up 68% on organic basis to represent 52% share of total revenues

>         30% group organic sales growth with reported sales of SEK 4,537m (3,324) 

>         Operating income before associated company income (ACI) and items affecting comparability (IAC) of SEK -291m (-49), of which SEK 163m (256) for the Nordics and SEK -454m (-305) for the International markets

>         Total reported operating income of SEK -325m (602), including ACI of SEK 10m (55) and IAC of SEK -44m (595)

>         Net income of SEK -288m (483) and EPS of SEK -3.68 (6.20)

 

Financial summary

					Full
			Q1	Q1	year
(SEKm)			2023	2022	2022
Net sales			4,537	3,324	15,691
Organic growth			30.3%	9.9%	19.7%
Operating income before ACI and IAC			-291	-49	-372
Associated company income (ACI)			10	55	275
Items affecting comparability (IAC)1)			-44	595	510
Operating income			-325	602	413
Net income for the period			-288	483	323
Basic earnings per share (SEK)			-3.68	6.20	4.13

President & CEO’s comments

We have continued to deliver on our growth targets despite the broader economic uncertainty and increased market volatility. Our Viaplay subscriber base grew by 60% YoY to 7.64 million, and Group sales were up 30% YoY on an organic basis. The recent direct-to-consumer launches of Viaplay in the US and Canada, and our new Viaplay Select partnerships in Canada, Austria, and Germany, have taken our footprint to 33 markets, further reinforcing our position as a leading international entertainment provider and exporter of premium international storytelling. Our original content has never been more attractive for consumers and partners, with over 130 productions set to premiere this year in what is a highly competitive environment. In combination with our mix of premium live sports rights, constant tech innovation and talented team, we are well positioned to deliver on Viaplay’s considerable potential, and to reach our short- and long-term goals. Our guidance for the full year remains un-changed, reflecting our ambition to strike the right balance between maintaining the strong momentum in the business and managing the continued uncertainty in the market.

We have started the year in line with our guidance, with 30% Group and 17% Nordic YoY organic sales growth in the first quarter. Our investments in content and technology are paying off, and Viaplay continues to be the primary growth driver for the Group, accounting for 52% of Group sales and generating organic revenue growth of 68% YoY.

 

Our Viaplay subscriber base grew by 60% compared with the same period last year. Our combined international markets now have more than 2.9 million Viaplay subscribers, 140% more than a year ago. We are growing in line with our expectations to reach the target of 4 million subscribers by end of the year. We also added 113k Viaplay subscribers in the Nordics in Q1, which is line with our ambition to add 400k new subscribers in 2023 and reach our year-end target of 5 million subscribers.

 

We have adjusted our Viaplay price points upwards in almost all markets, to reflect our unique and enhanced content offerings, as well as the prevailing inflation levels. Churn levels remain fairly stable and demonstrate the importance of high quality and flexible entertainment packages in these economically challenging times. Locally relevant content and live sports coverage remain our key differentiation points, and we have seen the positive impact of our coverage of the new Formula 1 season in 10 of our European markets, including Poland for the first time.

 

Viaplay Nordic revenues (37% of Group revenues) were up 36% YoY on an organic basis, while international revenues were up sevenfold and accounted for 15% of Group revenues, compared with 3% in Q1 last year.

 

Our linear subscription and other revenues (29% of Group sales) grew 11% YoY on an organic basis. The growth in wholesale subscription revenues reflected price increases, while sublicensing and studio sales were also moderately up YoY.

 

Advertising revenues (19% of Group sales) were down 2% YoY on an organic basis, which was better than expected in weak markets. TV advertising prices were again raised in the annual upfront contract negotiations, and radio advertising sales have continued to be resilient. We expect the overall Scandinavian advertising market to remain soft for the rest of the year, with the outlook for H2 currently particularly uncertain. TV and radio remain high impact media, which offer high returns on investment for advertisers, and our audience shares were up in almost all markets in Q1.

 

Our Nordic operating profit margin of 4.2% was higher than expected and reflected the healthy subscriber growth, rising prices and lower than anticipated advertising sales decline.  The YoY effect of the content investments that we made in H2 last year will result in a low H1 margin, as expected, before rising ARPU levels and lower cost inflation drive up our profitability margin for H2. We remain focused on delivering our target full year operating profit of SEK 1.2-1.35 Bn for our Nordic operations.

 

The combined operating losses for our international business reflected our investment in the Polish Formula 1 rights, the launch of Viaplay in the US and Canada, the scaling-up of our UK operations and the Polish and Dutch ARPU mix. These losses are expected to progressively fall during the year as the subscriber base continues to grow and ARPU levels rise. This is expected to result in the lower YoY losses for the full year of SEK 1.0-1.1 Bn, before we reach a combined full year profit for our international business in 2024.

 

Sustainability is as always at the top of our agenda. We have a very clear strategy, and we are making good progress towards our goals. This progress was reflected in Sustainalytics’ recognition of our leading sustainability performance for the second year running, and their ranking of us in 8th position out of 294 global media businesses.

 

As a company and most importantly, as a team, we are more focused and united than ever. Our new organisational set-up is fully implemented and enabling us to achieve our goals together more efficiently, despite the ongoing impact of the global geo-political and macro-economic pressures.

 

Anders Jensen

President & CEO
 

Shareholder information

Financial calendar 2023 

Publication of Q1 interim report	25 April 2023
Annual General Meeting	16 May 2023
Publication of Q2 interim report	20 July 2023
Publication of Q3 interim report	24 October 2023

 

Conference call and video webcast and CEO video message

A conference call and video webcast will take place today at 09.00 Stockholm local time, 08.00 London local time and 03.00 New York local time.

The video webcast will be streamed at https://edge.media-server.com/mmc/p/2n5athhr

Please register for the conference call at https://register.vevent.com/register/BI83837a52e3284ec2ba578d7369ab38c8

   

Click here for the full report and the CEO video

 

 

Contact

[email protected] or +46 73 699 17 00
[email protected] or +44 7768 440 414

 

Viaplay Group AB (publ) is the international entertainment provider. Our Viaplay streaming service is available direct-to-consumer in every Nordic and Baltic country, Poland, the Netherlands, the UK, the US and Canada. Every day, millions of customers enjoy our unique entertainment offering, including acclaimed Viaplay Series, Films and more, and an unrivalled line-up of premium live sports. In addition, our innovative Viaplay Select branded content concept makes Viaplay’s compelling storytelling available to partners around the world. 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’).The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on 25 April 2023.

 

This interim report contains statements concerning, among other things, Viaplay Group's financial condition and results of operations that are forward-looking in nature. Such statements are not historical facts but, rather, represent Viaplay Group's future expectations. Viaplay Group believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions; however, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. Such important factors include but may not be limited to Viaplay Group's market position; growth in the streaming industry; and the effects of competition and other economic, business, competitive and/or regulatory factors affecting the business of Viaplay Group, its group companies and the streaming industry in general. Forward-looking statements apply only as of the date they were made and, other than as required by applicable law, Viaplay Group undertakes no obligation to update any of them in the light of new information or future events.