SEK 4bn equity offerings fully underwritten
Rights issue subscription open from 19 January - 2 February
Trading updated indicates Q4 results in line with targets
2024 targets updated to reflect FX rate changes and disposal of production studio
Publication of Q4 results rescheduled to 22 February
The Swedish Financial Supervisory Authority has today approved Viaplay Group AB's (publ) ("Viaplay Group" or the "Company") prospectus regarding its SEK 0.9 billion rights issue (the "Rights Issue") and the admission to trading on Nasdaq Stockholm of the shares issued through the Rights Issue and the two directed issues of class B shares (the "Directed Issue" and the "Debt-to-Equity Issue", respectively), which were approved by the extraordinary general meeting of shareholders on 10 January 2024. The prospectus includes a trading update for 2023 and updated targets for 2024. Viaplay Group has obtained subscription undertakings and underwriting commitments corresponding to 100 per cent of both the Rights Issue and the Directed Issue, comprising a total equity capital injection of SEK 4 billion, which is a condition for the completion of the Company's recapitalisation announced on 1 December 2023.
The prospectus is available from Viaplay Group's website (https://www.viaplaygroup.com/recapitalisation-and-rights-issue-2023_2024) and will also be available from the Swedish Financial Supervisory Authority's website (www.fi.se) and Carnegie's website (www.carnegie.se) . The prospectus contains more information about the offer to subscribe for shares in the Rights Issue and the admission to trading on Nasdaq Stockholm of the shares issued through the Rights Issue, the Directed Issue and the Debt-to-Equity Issue. The record date for owning shares with the right to receive subscription rights in the Rights Issue is tomorrow, 17 January, and the last day of trading in Viaplay Group's shares including the right to receive subscription rights was yesterday, 15 January. The subscription period commences on 19 January and ends on 2 February. Directly registered shareholders may obtain application forms for subscription with or without subscription rights from Carnegie's website (www.carnegie.se) or Viaplay Group's website (https://www.viaplaygroup.com/recapitalisation-and-rights-issue-2023_2024), and shareholders whose holdings are nominee-registered may apply for subscription in accordance with instructions from their nominee.
The Company has rescheduled its Q4 and full year 2023 results announcement to Thursday 22 February 2024, in order to enable Company employees to exercise their rights as shareholders in the rights issue prior to the black-out period ahead of the results.
The prospectus includes an approximate and preliminary indication of the Company's results for the period January-December 2023.
+-------------------+----------------------------------------------------------+
|Group net sales    |Approximately SEK 18.56 billion                           |
+-------------------+----------------------------------------------------------+
|Nordic net sales   |Approximately SEK 15.59 billion                           |
+-------------------+----------------------------------------------------------+
|International net  |Approximately SEK 2.97 billion                            |
|sales              |                                                          |
+-------------------+----------------------------------------------------------+
|Viaplay subscribers|Approximately 6.502 million                               |
+-------------------+----------------------------------------------------------+
|Group Operating    |Loss of approximately SEK 1.11 billion for the group, with|
|income before ACI &|a profit of approximately SEK 0.55 billion for the Nordic |
|IAC                |operations and loss of approximately SEK 1.66 billion for |
|                   |the International operations                              |
+-------------------+----------------------------------------------------------+
|Group free cash    |Negative approximately SEK 3.50 billion                   |
|flow *             |                                                          |
+-------------------+----------------------------------------------------------+
|*Cash flow from                                                               |
|operating                                                                     |
|activities plus                                                               |
|cash flow from                                                                |
|investing                                                                     |
|activities                                                                    |
|excluding                                                                     |
|acquisitions or                                                               |
|disposals of                                                                  |
|operations.                                                                   |
+-------------------+----------------------------------------------------------+
Full year group net sales are expected to be within the previously provided target range, with the Nordic operations expected to have performed above the top end of the previously provided range, and the International operations to have performed below the previously provided range. The total year end Viaplay subscriber base is expected to have been slightly below the previously provided target range, with approximately 4.106 million Nordic subscribers and approximately 2.396 million International subscribers. The change was primarily due to a decline in the Finland subscriber base in the fourth quarter, and higher churn levels and general uncertainty in the international markets that Viaplay Group plans to exit. The higher than anticipated Nordic net sales growth is expected to have reflected a lower year on year decline in advertising sales in the fourth quarter and higher content sublicensing sales in particular, with year on year stable Viaplay sales in the fourth quarter and continued growth in linear subscription and other sales. The lower than anticipated International net sales are expected to have reflected a doubling of sales year on year in the fourth quarter.
Viaplay Group's overall and segment profits are expected to be within the previously provided target ranges, while Viaplay Group's estimated free cash flow for the year is expected to have improved, when compared with the previous targets, due to actions taken to improve Viaplay Group's working capital.
Viaplay Group expects to book provisions or make write downs in the accounts for the fourth quarter 2023 for various items totalling approximately SEK 2.4-2.6 billion, which will be reported as items affecting comparability in the Q4 report. These items primarily relate to the non-core international markets that Viaplay Group is exiting (the Baltics, Poland, North America and the United Kingdom). The cash impact is expected to be approximately SEK 2.2 billion. Viaplay Group has previously indicated that the negative free cashflow impact of exiting the non-core international markets will be approximately SEK 2.2 billion between 2024 and 2028. Management is working to reduce this number by implementing a range of cost saving initiatives.
More broadly, Viaplay Group expects the measures that it is taking will enable its core operations to deliver long-term annual sales growth in the low to mid-single digit percentage range; to deliver double-digit operating profit margins in approximately five years; and to generate positive free cashflow in 2025. The whole group, including the international non-core operations, is expected to be free cashflow positive in 2027.
The prospectus also includes updated targets for the full year 2024, and the previously announced targets for 2024 are therefore no longer valid.
+------------------------------------------+------------------------------+
|Net sales for core Nordic, Netherlands and|SEK 17.2-17.8 billion         |
|Viaplay Select operations                 |                              |
+------------------------------------------+------------------------------+
|Operating income before ACI & IAC for core|Between a loss of SEK 250     |
|Nordic, Netherlands and Viaplay Select    |million and a profit of SEK   |
|operations                                |50million                     |
+------------------------------------------+------------------------------+
|Group free cash flow *                    |Negative SEK 1.7-2.2 billion, |
|                                          |including negative SEK 0.6-0.8|
|                                          |billion for the non-core      |
|                                          |international operations      |
+------------------------------------------+------------------------------+
|*Cash flow from operating activities plus cash                           |
|flow from investing activities excluding                                 |
|acquisitions or disposals of operations.                                 |
+------------------------------------------+------------------------------+
The net sales range for the core operations has been updated since the publication of the previous targets on 1 December 2023, in order to reflect the sale of the Paprika content production businesses and changes in currency exchange rates. The sale of the Paprika content production businesses was approved by the recent EGM and is expected to be closed in Q1 2024. The exchange rate between Viaplay Group's SEK reporting currency and its EUR, DKK and NOK operating currencies has changed significantly since November, and is expected to result in currency translation effects that will reduce Viaplay Group's reported net sales in 2024, when compared with the previous targets. The 2024 profit target has also been adjusted for the limited effect of the abovementioned changes, as the currency effects will also reduce the reported costs, and the Paprika business did not contribute significantly to group profits. The Group free cashflow targets for all operations (both core and non-core operations) are unchanged.  Results for the non-core operations in the Baltics, Poland, North America and the United Kingdom (until completion of the previously announced disposal of the business, which is subject to regulatory approval and expected to close in the first quarter of 2024) will be included in Viaplay Group's results in 2024, and the anticipated impact on the Group's income statement will be provided no later than in conjunction with the publication of the Group's Q4 and full year results.
Jørgen Madsen Lindemann, Viaplay Group President and CEO: "This is another important step forward in the recapitalisation plan, which is intended to secure the future of Viaplay Group and provide the opportunity to rebuild stakeholder value. The preliminary indication of our Q4 results is in line with our previous targets, and we have adjusted our 2024 targets for changes in currency rates and the previously announced disposal of the majority of our remaining content production businesses. We continue to take a broad range of operating and financial measures to improve our growth trajectory, profitability and liquidity. The clear objective is for our core operations to return to delivering long-term low to mid-single digit percentage sales growth, double-digit operating profit margins and positive free cashflow. We have much to do, and many changes still to make, but our core customer proposition is strong, and we are taking steps every day to further enhance our entertainment products and content mix."    
****
NOTES TO EDITORS
Viaplay Group AB (publ) is the international entertainment provider. Our Viaplay streaming service is available direct-to-consumer in every Nordic and Baltic country, Poland, the Netherlands, the UK, the US and Canada. Every day, millions of customers enjoy our unique entertainment offering, including acclaimed Viaplay Series, Films and more, and an unrivalled line-up of premium live sports. In addition, our innovative Viaplay Select branded content concept makes Viaplay's compelling storytelling available to partners around the world. From streaming to TV channels, radio stations and production companies, our purpose is to tell stories, touch lives and expand worlds. Viaplay Group is listed on Nasdaq Stockholm (`VPLAY B').
This information is information that Viaplay Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication by the contact person below on 16 January 2024 at 16:30 CET.
Contact us:
press@viaplaygroup.com(or: +46 73 699 1700)
investors@viaplaygroup.com(or: +44 7768 440 414)
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Important information
None of the securities referred to herein have been or will be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction in the United States, and may not be offered, pledged, sold, delivered or otherwise transferred, directly or indirectly, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable other securities laws. There will not be any public offering of any of the securities in the United States.
In the United Kingdom, this press release is directed only at, and communicated only to, persons who are qualified investors within the meaning of article 2(e) of the Prospectus Regulation (2017/1129) of the European Parliament and of the Council of 14 June 2017 as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 who are (i) persons who fall within the definition of "investment professional" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) persons who fall within article 49(2)(a) to (d) of the Order, or (iii) persons to whom it may otherwise be lawfully communicated (all such persons referred to in (i), (ii) and (iii) above together being referred to as "Relevant Persons"). This press release must not be acted on or relied on by persons in the UK who are not Relevant Persons.
This press release and the information herein is not for release, distribution or publication, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand, South Africa, Switzerland or any other state or jurisdiction in which such release, distribution or publication would be unlawful or require registration or any other measures in accordance with applicable law.
The press release is for informational purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy or acquire, or subscribe for, any of the securities mentioned herein (collectively, the "Securities") or any other financial instruments in the Company. Any offer in respect of any of the Securities will only be made through the prospectus that the Company expects to publish in due course. Offers will not be made to, and application forms will not be approved from, subscribers (including shareholders), or persons acting on behalf of subscribers, in any jurisdiction where applications for such subscription would contravene applicable laws or regulations, or would require additional prospectuses, filings, or other measures in addition to those required under Swedish law. Measures in violation of the restrictions may constitute a breach of relevant securities laws.
This press release contains forward-looking statements that reflect the Company's current view of future events as well as financial and operational development. Words such as "intend", "assess", "expect", "may", "plan", "estimate" and other expressions involving indications or predictions regarding future development or trends, not based on historical facts, identify forward-looking statements and reflect the Company's beliefs and expectations and involve a number of risks, uncertainties and assumptions which could cause actual events and performance to differ materially from any expected future events or performance expressed or implied by the forward-looking statement. The information contained in this press release is subject to change without notice and, except as required by applicable law, the Company does not assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained in it and nor does it intend to. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release. As a result of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements as a prediction of actual future events or otherwise.
This announcement does not constitute an investment recommendation. The price and value of securities and any income from them can go down as well as up and you could lose your entire investment. Past performance is not a guide to future performance. Information in this announcement cannot be relied upon as a guide to future performance.
The securities mentioned in this press release have not been registered and will not be registered under any applicable securities law in Australia, Canada, Japan, New Zealand, South Africa or Switzerland and may, with certain exceptions, not be offered or sold within, or on behalf of a person or for the benefit of a person who is registered in, these countries. The Company has not made an offer to the public to subscribe for or acquire the securities mentioned in this press release other than in Sweden.
In any Member State of the European Economic Area ("EEA"), other than Sweden or any EEA Member State to which the prospectus is passported under the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the "Prospectus Regulation"), this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors"), and no person outside of Sweden or any EEA Member State to which the prospectus is passported under the Prospectus Regulation, that is not a relevant person or a Qualified Investor may act or rely on these materials or any of its contents.