Viaplay reduced its debt and will focus on operational improvements

The company reported its first quarter results and announced its recapitalisation process has been completed, showing operational improvements.

23 APR 2024

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Viaplay Group announced its first quarter results. Among them, the company explained that its comprehensive recapitalisation programme was completed in February 2024, with net cash proceeds of SEK 3.6bn and financial net debt reduced by SEK 5.6bn.

Jørgen Madsen Lindemann, Viaplay Group President and CEO, said: “The completion of the recapitalisation programme was an important step in setting the foundation for our retransformation into a profitably growing and cash generative business. We are now fully focused on the many operational improvements that need to be made across the Group. Our Q1 results are in line with expectations, and we have reiterated our outlook for the year.”

Viaplay streaming subscription sales were down 4% year-on-year on an organic basis but stable quarter-on-quarter and accounted for 44% of segment net sales. The year-on-year development reflected the lower subscriber volumes due to the termination of unprofitable marketing campaigns announced in connection with the Q2 2023 report, as well as declining D2C subscribers, which were partly offset by growth in the number of B2B subscribers and price increases. The quarter-on-quarter development reflected a small growth in the subscriber base as higher subscriber volumes in the Netherlands with the return of the Formula One season were offset by lower volumes in the Nordics.

Linear channel subscription sales, which comprise fees received from distributors for including the Group’s linear channels in their TV packages, grew by 3% on an organic basis and accounted for 27% of segment net sales. The growth reflected the extension of existing agreements with somewhat improved terms.

“We have adjusted our product prices in recent months, in order to ensure that we can continue to invest in our content offering,” mentioned Madsen Lindemann. “This led to temporarily increased churn levels, and research shows that our linear and streaming products continue to be highly relevant, resonate well and provide very good value for money for our partners and customers, when benchmarked with competitor offerings.”

The Nordic advertising markets improved sequentially but the company explained it is still down overall. Group advertising sales were down 4% on an organic basis as the continued strong growth in digital sales was offset by lower TV advertising sales. The Group’s digital advertising inventory increased by 67%. The Group's TV target audience share was up in Norway but down in Sweden and Denmark, and the TV advertising markets are estimated to have declined in all three markets. The Group’s radio target audience share was down in both Norway and Sweden, with the radio advertising market estimated to have grown in Sweden and declined in Norway. Advertising revenues accounted for 19% of segment net sales.

Madsen Lindemann concluded: “As flagged previously, we have adjusted our financial reporting structure this quarter, in order to reflect our strategic focus on our core Nordic, Netherlands and Viaplay Select operations, and to provide a breakdown of our linear channel and sublicensing sales. The core operations are therefore now reported separately from the non-core international markets that we are exiting. We have completed the sale of our UK operations and the Paprika content business and exited the Baltics by transferring the subscriber base and sublicensing the sports portfolio. Poland will be our only non-core business until we exit that market in mid-2025. We will continue to have cash costs for these businesses and have therefore provided free cash flow numbers for both the core and non-core operations.”