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Bank: Viaplay Netherlands exceeding expectations

April 14, 2022

Nordic Entertainment Group (NENT) has received a positive view from analysts at Berenberg Bank, which says that there’s been a positive newsflow in the company’s favour.

“Viaplay was launched in the Netherlands, and we believe the platform has achieved subscriber numbers well ahead of expectations,” says Berenberg.

“An agreement has been struck with Tele2 to hard bundle a Viaplay subscription into Tele2’s pay-TV offering. Following the settlement of a damages claim from 2006, TV 2 Danmark will pay NENT SEK600m which will be recorded as a one-off in the P&L. After much speculation about a name change, management has confirmed that NENT Group will become Viaplay Group to reflect the company’s strategic focus on Viaplay,” the bank’s note adds.

“Early Netherlands subscriber data well ahead of expectations: According to Sensor Tower data, downloads of the Viaplay app in the Netherlands in the first 27 days following the launch were more than 300 per cent higher than downloads in the 27 days post-launch in Poland in August 2021. We have accordingly increased our subscriber forecasts by 500k to 700k for Q1/2022, although we assume that much of this is brought-forward adoption from consumers that would have subscribed later in the year; our FY/2022 estimates therefore only increase by c230k to c2m. However, we believe that our FY/2022 estimate is now on the conservative side,” suggests the bank.

“While the distribution agreement with Tele2 appears to be a positive piece of news, we note that the terms of the deal are not entirely clear at this point and that there are many unknown factors that need to be taken into consideration when integrating the deal into forecasts,” says Berenberg. “Thus, while we provide an outline of what we think the deal could mean for the Nordic Viaplay segment, we have not yet changed our forecasts as a result; we will do so after Q1 results. That said, we expect the domestic subscriber outlook to be increased for FY 2022.”

“The only area in which we differ materially from consensus in the near term is our higher Viaplay subscriber forecasts both for the Nordic and international platforms,” says the bank. “However, in the medium and long term, we are materially ahead of consensus. We reiterate our ‘Buy’ rating and increase our price target to SEK535.00 from SEK525.00, based on updated DCF and SOTP methodologies.”

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