Viaplay raises subs forecast after strong Q3 but Nordic sales stall
Details
Editor
| 26 October 2022
After a heady number of months where it made strategic acquisitions and hit the accelerator for growth, leading Nordic media business Viaplay Group has revealed third quarter 2022 results showing better than expected subscriber acquisitions but with overall profits taking a hit and core markets showing signs of softness.
VIaplay 30JUne2022
Among the highlights in the quarter ended 30 September 2022 were that Viaplay paying subscribers soared 78% year-on-year to 6.428 million, with 879,000 subscribers added quarter-on-quarter. Organic sales growth was 25% with reported sales of SEK 3.972 billion driven by revenues from the Viaplay streaming business which accounted for 47% of sales and which were up 64% on an organic basis compared with the year before.

A 28% YoY growth in the core Viaplay subscriber base in the Nordics region was driven by third party B2B distribution partnerships in particular, as well as lower churn levels. The number of premium subscribers in Norway rose following the inclusion of English Premier League football coverage in August, but at a slower pace than anticipated. Sales for Viaplay in the Nordics were up 27% on an organic basis.

Non-Nordic Viaplay operations added 685,000 subscribers in the quarter, more than double the number of subscribers added in the previous quarter. The addition of the English Premier League rights in Poland and the Netherlands contributed to growth in the quarter, together with the new distribution agreement in Poland. Revenues grew accordingly and also reflected the higher price point in the Netherlands.

Q3 linear subscription and other revenues (32% of sales) increased 9% YoY on an organic basis. The company noted that growth in linear channel subscription sales followed the upward price adjustments to reflect the addition of new content, as well as the extension of almost all distribution agreements in Norway to include the English Premier League football coverage.

However, advertising revenues (21% of sales) were down 3% YoY on an organic basis, said to reflect weaker development in the linear TV advertising market conditions.
In addition, operating income before associated company income (ACI) and items affecting comparability (IAC) of resulted in a loss of SEK 171 million in Q3 2022, compared with an SEK 80 million profit a year earlier. The saw a SEK 419 million impact due to Viaplay international expansion. Total reported operating income saw a loss of SEK 100 million, compared with SEK 114 million a year ago while net income from total operations of was a loss of SEK 86 million, down from the SEK 55 million in Q3 2021.


Looking forward, Viaplay Group said that now that it had completed the acquisition of Premier Sports in the UK, it was raising its year end international subscriber target from approximately 2.5 million to approximately 2.7 million. Viaplay will be launched in the UK on 1 November. But at the same time, it was reducing its year-end Nordic targets from 4.8 million to 4.6 million.

“We have delivered another quarter of high subscriber and revenue growth, which demonstrate the attraction and resilience of our well-differentiated offerings. Our content line-up has never been stronger, and we added key new original and sports content during the quarter,” said Viaplay president and CEO Anders Jensen commenting on the third quarter results.

“We remain fully funded for our expansion and have full visibility over our forward content costs. The broader macro-economic outlook and geopolitical backdrop are of course less certain. This is why we have adjusted our growth outlook, and already made plans to adjust our cost base and exposure, where relevant and as we have done in the past. We are also taking steps to accelerate our growth where momentum is strong.