Q2 highlights
· Sales of
· Viaplay paying subscribers up 206k QoQ and 605k YoY to 2,716k following high intake and low churn levels. FY20 intake target recently raised to 600k
· Viaplay sales down 4% due to proactive and temporary reduction in sports package prices
· Operating income of
· Associated company income of
· Operating income before IAC of
· Adjusted net income for continuing operations of
· Studios operations that are for sale are reported as discontinued operations, with historical periods restated accordingly
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Financial overview
(SEKm) Q2 Q2 H1 H1 Full year 2019
2020 2019 2020 2019
Continuing
operations
Net sales 2,624 3,566 5,994 6,996 14,204
Organic growth -13.2% 5.8% -7.3% 5.9% 6.4%
Operating income 156 432 375 716 1,441
before associated
companies and IAC
Associated 54 2 54 2 5
companies income
Operating income 210 434 429 718 1,445
before IAC
Items affecting 2,383 - 2,383 -56 -755
comparability
(IAC)[1)]
Operating income 2,594 434 2,813 662 690
Net income, 2,517 331 2,673 504 538
continuing
operations
Net income, -3 17 -2 11 52
discontinued
operations[2)]
Net income, total 2,515 348 2,671 515 590
operations
Basic earnings per 37.34 5.17 39.67 7.66 8.77
share (SEK)
Adjusted net income 148 333 305 551 1,145
from continuing
operations[3)]
Adjusted earnings 2.20 4.94 4.53 8.20 17.02
per share from
continuing
operations (SEK)
[3)]
President & CEO's comments
Q2 was an unprecedented quarter in many ways. Not only have we been dealing with the effects of the COVID-19 pandemic but we have also closed the merger between Viasat Consumer and Canal Digital, launched Viaplay in
Our organic sales were down 13% due to the various impacts of COVID-19 on our subscription and advertising revenues. Viaplay's exceptional subscriber intake continued into Q2 with 206k paying subscribers added (QoQ). Viaplay revenues were down 4% due to the temporary price reductions that we proactively implemented at an early stage of the crisis for our sports customers. Now that the majority of sports have resumed, prices are back to normal and Viaplay is performing very well.
We ended the quarter with over 2.7m Viaplay subscribers, up 605k or 29% YoY. Streamed minutes, excluding sports, were up 42% YoY in Q2, while streamed minutes of sport were up 10% in June and 116% so far in July. We recently raised our FY20 Viaplay subscriber intake target from 400k to 600k to reflect this very positive momentum.
Other subscription revenues were down 34% due to the deconsolidation of Viasat Consumer, as well as the temporary sports package price reductions by third party distribution partners.
Advertising sales were down 30% as expected, but we have seen a substantial improvement in July. While still early days, we expect our advertising sales to be down substantially less in Q3 than in Q2.
The sales process for the non-core part of our Studios business is proceeding according to plan. Revenues for the continuing studios businesses, which will primarily provide content for Viaplay, were down 57% as all large-scale productions were postponed to H2 or early 2021. We still expect to premiere approximately 30 Viaplay originals in 2020, and up to 40 in 2021, if the gradual return to full production capacity continues.
Our EBIT before associated company income and IAC was down significantly, due to the lower advertising and sports subscription revenues, as well as the deconsolidation of Viasat Consumer. We have taken the remaining costs for the current football seasons that have restarted, while costs for other sports events that had not restarted in Q2 will be taken from Q3. The savings from the 2019 transformation and 2020 COVID-19 initiatives amounted to
The merger to create Allente gave rise to a number of effects in our results, including a substantial capital gain and our share of Allente's net result after restructuring charges. On an underlying basis, the business continued to perform as expected, and is focused on delivering the
Our overall performance in Q2 has demonstrated the resilience of both our products and people, as well as the relevance of our streaming strategy. While the impact of the pandemic is far from over, our priority is to deliver the best possible customer experience and this is reflected in our content being more popular than ever. Our technology platform has again proven its agility through this volatile period and, following the successful launch in
President & CEO
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Notes to editors
https://news.cision.com/nordic-entertainment-group/r/interim-report-january-june,c3158065
https://mb.cision.com/Main/16563/3158065/1282318.pdf
https://mb.cision.com/Public/16563/3158065/99fdeb192539ba31.pdf
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