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NENT: Viaplay subs up 33% in 2020

February 9, 2021

Nordic Entertainment Group (NENT), the pan-Nordic media and entertainment company, has reported its full year results for 2020.

Streaming service Viaplay saw subscribers up 207,000 quarter-on-quarter and up 33 per cent (749,000) year-on-year to 3,020,000. The company expects an addition of 650,000 new Viaplay subscribers in 2021 as it prepares to launch in new international markets.

NENT reported a 22 per cent increase in operating income before associated company income (ACI) and items affecting comparability (IAC) when excluding Q4 2019 SEK 111 million (€10.9m) contribution from Viasat Consumer business. Reported operating income before ACI and IAC was SEK 426 million. NENT saw 6 per cent organic sales growth and reported sales of SEK 3,182 million (SEK 3,825 million including SEK 724 million contribution from subsequently deconsolidated Viasat Consumer business)

Anders Jensen, President & CEO at NENT, commented: “The global Coronavirus pandemic made 2020 a challenging year and is continuing to impact lives in 2021. We have all embraced new ways of working, some of which will improve our lives, society and, hopefully, the environment for the long term. It has been great to see that Viaplay and our other products have been able to entertain millions of people at home, and we are now looking forward to bringing Viaplay to 5 new international markets this year. We accelerated our development in many areas in 2020, with our Viaplay subscriber base growing by 33 per cent and hitting our 3 million year-end target, and I’m also very proud of the progress that we have made to become an even more equal and diverse company.

Viaplay revenues (31 per cent of sales) were up 14 per cent on an organic basis after 33 per cent YoY subscriber growth, as we met our target and ended the year with over 3m paying Viaplay subscribers. Total streamed minutes on Viaplay were up 30 per cent YoY and reflected the continued and increased popularity of our originals, unique sports offering and acquired content, with new viewing records set in each category.

Following this very positive momentum in 2020, we now expect our paying subscriber base in the Nordics to grow by a further 400,000, and for our new international markets to add 250,000 new subscribers, in 2021. During the year, we will continue to increase our content investments, which will include 40 Viaplay original premieres, a slate of additional acquired content and a range of exciting new sports rights this year. As a result, we are planning to introduce price adjustments during this year.

Other subscription revenues were up 12 per cent when excluding the contribution from the Viasat Consumer business, which was deconsolidated in May, and reflected the growing wholesale subscriber base.

The rate of decline in advertising sales improved quarter on quarter and organic sales were down 1 per cent YoY. Advertising demand levels are expected to improve gradually, with prices expected to be up in 2021.

Revenues for the continuing studios businesses were down 21 per cent on an organic basis and reflected the postponement of productions due to the pandemic, which led to the previously announced impairment charges. We are refocusing our studios primarily on the production of high quality original scripted content for Viaplay, and the process to sell the other companies, which was delayed by the pandemic, is now proceeding to plan and expected to be completed in H1 this year.

Our EBIT before ACI and IAC was up 22 per cent when excluding the contribution from the now deconsolidated Viasat Consumer business, with our growth and the savings that we have made more than offsetting our Viaplay content investments and FX headwinds.

Our associated company income from Allente was burdened in the fourth quarter by the previously flagged non-cash amortisation and ongoing restructuring charges. Allente has strong and stable cashflows and we received a SEK 1.2bn extraordinary dividend this quarter. Allente is on track to deliver the SEK 650 million of cost synergies and up-selling Viaplay to the rest of its subscriber base.

Viaplay Iceland has continued to perform well and we now preparing to launch Viaplay in the Baltics in March, Poland in August and the US at the end of the year, in line with the plans that we set out at the Capital Markets Day. We have also moved our streaming registrations and TV broadcasting licences to Sweden to provide a long term regulatory foundation from which to  embark on this international expansion.

We held an EGM on January 25th, at which the Board was authorised to decide on a new share issue to finance our expansion. We are now preparing the offering. In light of the equity raise and expansion plans, the Board is not proposing the payment of a dividend this year.

The Coronavirus remains a constant in all of our lives and our first priority remains the safety of our employees. However, in 2020 we have shown that, despite the circumstances, we are able to deliver to our customers and adapt the business to counteract the negative impacts of the pandemic. In 2021, we will continue to build a company that is better prepared than ever for the future.”

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