Viaplay Group AB (publ)

So good morning everyone and welcome to today's Q3 2024 results conference call. My name is Matthew Hooper and I'll be your host today. Joining me today on the call is our CEO, Jürgen Madsen Lindemann, and making his debut today is CFO Joanne Joanson, who joined us at the beginning of August. Welcome gentlemen. As usual, our presentation will be followed by a Q&A session and you can find our results materials, including a presentation deck on the investor relations section of our website. We will not follow the slides, but they do provide the usual and relevant information for you. Please be advised that today's conference is being recorded. If you want to ask questions and you are following the webcast, please post your questions on the message board at any time and I will read them out. If you prefer to ask your questions directly, you are of course, welcome to do so using your phone keypad, but more about that later when we get to the Q&A session. I'll now hand the call over to Jürgen to walk you through the Q3 highlights. So over to you Jürgen.

Thank you Matthew and good morning everyone. And of course a special welcome to you Joanne. It's great to have you back on board. Our Q3 results are in line with our plan and expectations and our outlook for the rest of the year remains the same. So we have made no changes to our forward looking guidance. We are fully focused on making all the performance improvements that are necessary to achieve our plans and return to profitable growth and free cash flow generation. We have made progress or still much to do in making our products more relevant and competitive, our partnerships more commercial and sustainable and ensuring cost control in all areas. Deal with value leaking partnerships so that we honor those partners and sponsors who have invested in the future of ViyaPlay and not invested in historical deals which were completely out of sync with the reality in our markets. Our corporations generated 6% organic sales growth this quarter driven by growth in our linear subscription revenues and the sub licensing of sports and non-sports content to third parties. Our combined linear and ViyaPlay subscription revenue grew by 1% on an organic basis and this was driven by price increases and new agreements with key partners. We look at these two businesses on a combined basis and then focus on B2C and B2B lines as well as the development of the different subscription tiers on ViyaPlay. Turning to ViyaPlay which accounts for nearly half of our core revenue sales were down 1% year and year on an organic basis. Our D2C ARPU was up year and year in all our core markets after the price adjustments that we have made since last year and most recently in Finland last month while our D2C subscriber base was down in almost all markets. Our D2C subscriber base did grow sequentially in almost all markets when it compared to Q2 which reflect the successful introduction of our H-Watts here in Denmark, Sweden and Norway and the initial impact of our efforts to limit account sharing. It is still early days for this competitively priced tier which includes advertising and complements our existing offering has so far attracted new customer segments and encourage reactivation by former subscribers. The sequential ARPU development also reflected the usual churn and return patterns during the summer month when we also have the break between sport seasons. We continue to prioritize value over volume and our pricing reflects the investments that we have made in our highly competitive content offering as well as our determination to provide fantastic value for money. Tackling account sharing and piracy remain a critical focus point for us as they represent a significant value leakage for us and our industry. Usage of our service without paying for them ultimately affect everyone including the sport franchises and content producers. We have now rolled out measures in all core markets while it is still early days the results are encouraging with most former account shares choosing to remain subscribers. We are also collaborating with industry peers to lobby policymakers to police piracy much more effectively. Moving on to our linear channel subscription sales which accounted for approximately 28 percent of our core revenues in Q3. Sales were up 3 percent on an organic basis driven by price increases and new agreements with key partners to better monetize our content. We also launched our new premium sports news channel in Denmark in August which is available to premium subscribers on ViyaPlay and through those key distribution partners who have signed new agreements with us. The channel also carries advertising. Advertising revenue accounted for 18 percent of our core revenues and were down 1 percent on an organic basis. The growth in our radio and digital advertising revenues did not fully offset the decline in our linear advertising revenues. Our digital ad inventory our page impressions grew by 36 percent and was boosted by the rollout of our H-watch services. We are focused on accelerating the growth in our digital ad sales moving forward. The coverage of high profile sports events like the Olympics and other summer sports events on rival channels did impact our audience shares during the quarter and led to lower linear advertising market share for our channels. The concentration of media spending around such events both falling in one quarter would of course put some pressure on budgets in Q4. The Norwegian TV and radio advertising market is estimated to have grown in Q3 together with the Swedish radio ad market while the Danish and Swedish TV ad market are estimated to have declined. Looking forward into Q4, IIM expects both radio ad markets to continue to grow and our three Nordic TV ad markets to be down. Sub-licensing and other sales accounted for 9 percent of core revenues in Q3 and grew by 165 percent -on-year on an organic basis. This was driven by ongoing sales of our scripted content as well as the strategic sub-licensing of part of our sports portfolio in selective markets. We continue to work with our current and new distribution partners to build long term neutral beneficial relationship centered around our premium content and launching of new products. We have extended and expanded some agreements, brought on new partners and ended others that are not long term and commercially viable. This applies to both our content suppliers and distribution partners and we have much more to do in this area. Cost control remains a top priority for us. As I said before, our Nordic content costs have been growing at nearly twice the rate of our subscription sales, which clearly isn't sustainable. We continue to take a more disciplined approach, ensuring that our spending is aligned with revenue growth and return on investment. This is essential to ensure the long term stability and profitability of our business. Core sales growth along with our cost reduction initiatives enable us to reduce our EBIT losses -on-year and sequentially. This improvement would have been bigger if it were not for our ongoing and substantial currency challenges due to the weak SEC. Our result for last year also includes positive contribution from the content production business that we have now closed or sold. The losses for our non-corporations were low and we are working towards exiting the rest as effectively as possible while minimizing the negative cash impact. Looking ahead, we have a good content slate for Q4. The Champions League has returned in Sweden as the Danish Superliga and the Premier League with our new exciting studio setup. The ViyaPlay Sport News Channel is up running, as is the new NHL season. And we can look forward to exciting remaining races in the Formula One Championship while gearing up for a busy winter sports season. Also coverage of the Junior High Soccer World Championship and the Women's European Handball will feature on our products. On the non-sport side, our new strategy is paying off with more focus on non-scripted formats that generate healthy viewing and ROI levels. Reality formats, Paradise Hotel, Robinson, Charter Fever, all performed well in Q3 and we have now new seasons of popular format like Efterluge, Lüge Spelland, Come Dine With Me, along with new releases such as Summer in Magaluf and Swedish Drama, The Street Where I Live. These shows reflect our commitment to delivering commercial, relevant and engaging content that resonate with both audiences across our markets. Our objectives remain clear, deliver profitable growth, generate positive cash flow and creating shareholder value. There's much to be done in all areas, but we are making progress and are totally focused on improving our content offering, ensuring it is relevant, competitively priced and fairly monetized. That concludes my initial remarks. So now over to you, Johan, to comment on our financial performance and position.

Thank you, Jørgen, and good morning, everyone. Great to join my first earnings call and I'm looking forward to meeting and getting to know all of you who I haven't already met in the coming days and weeks. I worked at MTG for 10 years previously, so I'm familiar with the business, the products, the people and the very potential of the company. And that is the main reason that I want to come back and take this opportunity. There is a lot of work to be done to get us back to the healthy position the company used to be in with positive earnings and cash flows. So the pace has been high since I joined and we are doing the outmost to accelerate that as a team. We are making a lot of changes to enable our re-transformation, just as Jørgen mentioned. This touch all parts of the organization, as well as the partnerships with our suppliers, distributors and customers. At the core of what we are doing is a committed, strong local management teams that are focused and accountable to drive the changes needed. Alongside my role as CFO, I've also joined the opposition for the Swedish business together with Christian Albeck. And we are very committed to work closely together to drive the required improvements for our Swedish operations. I'm looking forward to taking your questions, but a few key points first. Let's start with our year on year organic sales growth, which was higher than our reporter growth due to the divestment of the remaining studios operations earlier this year, as well as the continued interplay of our currency mixed this quarter. FX had a negative impact on our sales for our core operations and deflated our core costs so that core EBIT, excluding IC and associate company income, was therefore negatively impacted in the quarter. The 63 million or 56 percent year on year reduction our core operating losses would therefore have been better if you consider FX headwinds and the studios disposals. Based on our current FX rates and our more limited ability to hedge currencies, we expect a negative FX impact on a full year EBIT at the lower end of the three to four hundred million range. The Q3 to date impact was approximately two hundred and thirty million. OPEC for our core operations was up year on year on an organic basis. As we now allocate all central overhead costs to the core segment, and we also have increased costs related to the sub-license of content. Core OPEC was down on the reported basis as we still had the cost for the studios business last year. Content costs make up 80 percent of our core OPEC and approximately 80 percent of these content costs related sports content. Content costs were largely stable year on year in Q3 and we expect them to be down in Q4 with lower costs related to content sub-licensing. Our core SG&A costs were up again in Q3. As I mentioned, this is due to the allocation of all central overhead costs to the core segment, which will continue to impact the year on year comparisons in Q4. This is in line with our previous comments that the increase in SG&A will be higher in the second half, as the comps for last year already include the majority of the headcount savings that we made last year. For the non-core markets, we have made small loss this quarter. This line is now basically the Polish SG&A, given that we have exited other markets since last year. We had a 5 million positive IEC this quarter, which primarily comprised unrealized and non-cash foreign exchange translation effects related to the previous content provisions that we have made. Our associated company income of 52 million mainly comprised our share of valentice earnings and was above the previous run rate. We now expect our full year associated company income to be closer to the upper end of the 100 to 150 million range. As expected, there were no further dividends from LNTA in Q3 and the decision yet to be taken regarding payments in Q4. There is no change to our expectations for annual dividends of approximately 200 million moving forward. We received a dividend of 100 million in Q1 this year. Moving on to cash flow, our total free cash flow of negative 1.5 to 3 billion comprised our core EBIT loss of 49 million, negative 103 million from the combination of capex interest, taxes, investments and adding back to depreciation amortization. A negative working capital exchange of 1.409 billion for the core segment and a 38 million positive free cash flow for the non-core operations. The working capital exchange is as expected and marked a return to the usual seasonal patterns when it comes to timing of content payments and sports rights payments in particular. We drew down 1.5 billion of the 3.4 billion RCF at the end of Q2 to fund the sports rights payments that fell due in July. We subsequently paid back the majority of the RCF with the 0.6 billion gone at the end of the quarter. We have not made any further drawdown since the end of the quarter. Our financial net debt when excluding the 263 million of net lease liabilities amounted to 1.202 billion at the end of the quarter with a cash and cash equivalents of 1.046 billion. Total borrowings of 2.478 billion and 230 million of pre-fledged borrowing expenses. We have a very clear focus on cash flow in order to make, in order to ensure that we manage our liquidity and optimize ROI as much as possible. This business has many moving parts and there are both risks and opportunities that we are balancing. It will take time for the actions that we are taking to have the full effect and for the impact you will see in our results. There are of course things we can fix short term, but we also have large and long term content purchasing and partnering commitments in our core and non-core markets that must be adjusted and leveled up to make the right return on those commitments. So that's it from me on the financial performance and positional aspects so back to you Matthew.

Thank you Johan and thank you Jürgen. And we are now ready to take your questions. Just going back again, if you would like to ask a question and you have joined the conference call via the web link, you can post questions on the message board by clicking on the ask a question tab at the top right hand corner of the window and I'll read them out for you. Please don't forget to write your name and your company name. Or if you would rather ask the question yourself, please press star one and then one again on your telephone keyboard and you will enter the queue. To cancel your question simply press star one and one again. Okay so moving to the message board first. We have a question from Aaron Bura, private investor. Has there been any significant progress on the B2B negotiations with regards to price increases? So one for you Jürgen.

Yeah we have obviously have discussions with our B2B partners and with some of the key partners. We have extended the partnerships, we have introduced new products like the sports champs and other things. So definitely we see good progress with the partners who we consider you can say as key partners. So others have been more difficult meaning that obviously they have enjoyed a very lucrative ride since it looks like that the company has paid for the content and they haven't paid as we said earlier that our content cost has grown much faster than our revenue. So of course those who are not interested in discussing the value of the content we are not going to continue with obviously as partners. So we are making a segmentation right now about key partners and also introducing new partners to the region as well. So that is an ongoing process.

Okay and then we have another question I think for you Jürgen from Emil at MediaWatch. How crucial is the expansion of digital video ad capacity for maintaining the sustainability of your advertising revenues?

I think it is important that we continue to explore that opportunity and we have said earlier that we would like to mitigate the downwards trend in our analog advertising to mitigate that or hopefully increase that with digital advertising. And that is why we have invested in H4 as well for our service and also looking at other opportunities to increase that offering to our customers. So that is important but it is also an ambition we are having to make sure that we make that transformation happen.

Okay and now one for you Yuan related to the cash flow moving into the fourth quarter. And this is really regarding the year to date free cash flows. The question from Christopher at Kepler is your year to date free cash flow is minus 2.5 billion SAC. What are the building blocks that make you confident in meeting your full year guidance? Which to remind everyone is negative 1.7 to negative 2.2 billion.

Yeah I mean there are many moving parts of the business not at least when it comes to ad market and currencies so we are expecting that we are keeping the guidance as is.

And I think just to remind everyone Q3 is typically our heaviest working capital outflow quarter. So therefore the implication on the free cash flow guidance is a very positive Q4 which is evident from the numbers we provided. I think then we will go to our first call from the telephone line. So operator if you could let Michael Lassen from Carnegie into the conference call please. Hi Michael.

Yes good morning hi. I have a few questions and the first one is about the revenue dynamics for the streaming subscription segment. If you can explain the mixed changes and the additional age fraud and how the Chaplas League impacted the developments in the quarter. So I mean trying to understand the ARPU and the subscriber dynamics in this quarter.

Yeah I think if you look at the ARPU obviously with the price adjustments that we have made then the ARPU is up in all our markets. So that is one very important mix of course and that has a consequence as well as you have seen that we have fewer customers from Q3 last year to this year but at the same time though we have grown from Q2 into Q3 with the new prices that we have put to the market. So the ARPU component is an important part and then of course when it comes to the age fraud service which still is early days but what we see as we said as well is that it is actually it looks like can be an attractive product for new customers as well in the market. That is of course ARPU wise lower price cheaper at the same time of course then the advertising is making up or hopefully making it more attractive for us versus just a normal subscription. So there is a lot of moving parts I think what we are of course happy about is to see the growth from Q2 to Q3 and also to see that our price adjustments has come through successfully then.

And the other thing Michael is just to say we did see the usual turn and return pattern that Juergen talked about during his speech so just remember that the subs numbers that we register at the end of the quarter may well be a lot of people coming back later in the quarters though before we do not get the full quarters worth of revenue contribution even though the subscriber numbers change from the end of Q2 but you are aware of that and seeing that before usual happens.

Okay yeah and then another question here regarding the HFOD launch and how we should think about that contribution and maybe if you can explain the reach that you have in HFOD compared to LinearTV I mean to get an understanding of the magnitude from this launch.

We have not specified the reach and to be fair it is early days what we are doing of course is that we have the advertising part on our product in our own service in the DTC service and then obviously we are also engaging with the key partners distribution partners that we're having to make sure that we can broaden that offering as well to the benefit from them as well getting a new product in the market and also for us of course to get a new product in the market to customers who also eventually a little bit more price sensitive but we have not revealed you can argue the incremental reach but of course we are going our digital ad sales and the HFOD is a component of that today and it will be for sure going forward as well.

Okay yeah fair enough and another thing maybe I don't know if it's too early but if you can maybe help us understand the ambition for 2025 to reach positive cash flow for the core operations compared to where you are today the key building blocks to reach that ambition.

Yeah but that is exactly what we are what we are doing right now is of course to make sure that we are having the right content making sure that we have the right content with the right ROI they offer to customers it is of course the partnerships that we are enhancing as well so that is you can argue part of this whole transformation this doesn't end in Q3 or Q4 in all fairness that is something where you continue to refine your business it has been wrongly skewed where it has been volume over value so the discussions we are having with partners and also the way that we operate our business ourselves offering new premium products and so forth that of course will help long term of the attractiveness of the product and therefore also should render more customers to our products as well but the content investment for sure is important in all fairness that we that we were able to make it possible adjust the spending to make sure that it is it is a proper ROI that we that we are delivering so that that is there's no no who's poor was easy wins here it is grinding and making sure you just are smarter on the way you do your business.

Okay got it one final if I may regarding the B2B side and if we can talk to us about any key renegotiations that we need to be aware of in the coming couple of quarters or so.

Yeah we have existing with the key partners we have prolonged many of those in all fairness we are about to prolong another one key partner one of the countries right now and then as I said some partners we might not you know we might not end end up prolonging and we have given notice to to one partner that it is that is difficult you know the the view on the business and the value of the content that we are having and so that we are not prolonging so so that is an ongoing yeah ongoing effort as well to make sure that our offering to our partners is as attractive as possible so so yeah we all have mutual beneficial agreements and that is not the case right now where we have a lot of the contract or some of the country which are are based on a lot of volume but not value and we don't want a lot of customers we want valuable customers so that is a discussion that we're having but those contracts comes up on a regular basis some partners have been smart and have been proactively prolonging the contract with us and that of course shows the strong partnership that we have with those so that is what we're focusing on.

Okay thank you.

Okay thank you Michael. Now going back to the message boards this question here from Philip Sissner could you please remind us of your official financial guidance going forward at what time do you expect it to be on the RCF and are there any covenants links to the RCF and your access to usage of it? I think Philip the the guidance and the financial targets are reiterated on page seven of the release they're in the deck as well and there's no change for those they relate to net sales for the core operations implication for the non-core and operating income and free cash flow for the two elements as well so they're all as was before. I think in terms of drawdowns on the RCF maybe for you Joanne I mean you mentioned it in your speech but maybe if you could take that one.

Yeah as I mentioned we we we drew down in in Q2 which has been paid back and then we have not drawn anything more at the the end of Q3 so it was a 0.6 billion at the end of the quarter.

Great just keeping going on the message boards here. Joanne one very specific Danish one. The Danish government is planning to regulate betting commercials by either limiting them on TV during sports broadcasts or outright banning them. What risks does a potential ban on betting commercials present for fireplace advertising revenue?

Yeah I you know let's see how that in the end will look like in all fairness before we start speculating so I would like to see a little bit more before that I start to make a firm conclusion on the impact that that will have for us so I can't be specific on that

more. Yeah maybe just for reference here remember that advertising is less than 20 percent of our revenues and betting is less than 20 percent of the advertising revenues so when you look at this segment prices are relatively low exposure on a group basis. Then still with the message boards question from from Martin Arnell. What will be the Martin Arnell at DMV markets? What will be the most important driver in Q4 to be able to deliver on the full year 2024 financial targets? Same vein as before in the questioning but just to make sure you

know. But that is of course going to be the same answer there is a range of initiatives which we have talked about the value or volume, the return of investment on the content and so forth so that is the same drivers that we're looking at in Q4 as I just mentioned for 2025.

And then we have a follow-up from Aaron or a private investor. Can you see any sign that restricting account sharing is creating new subscribers? And I mean obviously this comes on the back of Netflix's results and what they said around this. Maybe we could one for you Juergen.

Yeah no we have actually seen that it's just important as well that it is still early days but we have we have rolled account sharing out in or prevention in our markets now and I think what we for sure was a little bit you know puzzled about was of course the reaction for customers who used to share their accounts and the good news is there that they're still staying with us which we also hoped of course that they still liked the product despite the fact that they couldn't share their accounts. And some of those who then share got the account from others have actually signed up as well we can see so we can see the people are coming in as well. So it is so far so good you can argue now I think there's gonna be a it's not gonna be a sprint it's gonna be a little bit longer before people you know the ones who used to to share account before they become subscribers but we are seeing we are seeing positive trends there as well but again still still early days.

Okay and then a question from Martin at DMV again and this is for you Johan and this relates to the financial position of the company and the headroom at the year end versus bank governance. So the question is what is your view on the financial position of the company as you come in and the high debt in particular and in terms of the gearing where would you expect to be in terms of headroom at the end of 2024 versus bank governance? And just before I pass that over to you and just remember as you know our free cash flow guidance from where we start at the year on our net that gives you a very clear indication of where we'll end the year based on the guidance we provided but over to you.

Yeah I mean we prioritize cash flow management and debt reduction of the company I mean and as Jorgen said it is about sort of prioritizing to get the right return on the investment of the content pieces that we have and all the sort of the initiatives and things that we're doing in the business should generate sort of cash positive for us to sort of build that position over time and I think Matthew answered the second part of the question as well.

Okay and then one for you Jorgen from Tom Singlehurst at Citi. Is there anything you can do to accelerate the process of sub-licensing and thereby accelerate the rundown of the costs, cash costs and the non-core operations? So this is really about the exit markets and whether the more we can do that to sub-license content.

Yeah I think what we so we have exited all markets except Poland which we are exiting in an orderly manner for our partners and customers in summer 25 and of course where we see an opportunity and people can use the content in Poland before then of course we are happy to discuss that and are also sub-licensing already now some of the content prior us ending in summer 25. So it is important for us that we get out as I said in an orderly manner and that we are honoring the contract that we have with our different partners there as well. Some of them of course contain the content that we are having that they expect that to be delivered for them as well but yes open to if there's any body who sees great value in some of the things that we're having the last six months or nine months we are having to talk

about. Okay and then a question from John Blanco, private investor. And this relates to pricing of our subscriptions. So when it comes to the sports package I've heard from so many people the cost is so high to pay for content. Any thoughts to just have packages with only the sports you want? What about having packages just for the sports season only or for premier league so that people can view specific content?

Yeah so as a general note we are of sure that we have the most relevant and attractive pricing for our products and also that we have the right offerings as well. So that is an ongoing discussion and you will see like in Denmark we have made a new offering a premium package containing even more content more champions league our new channel and so forth. So that is an ongoing understanding on how to position our products best in the market. So nothing is static in that way. We are also looking at which we have successfully done as well having longer subscription period as well for some of our customers who sees benefit in that for a better price. So all that is something we're evaluating to make sure that we have the most competitive and relevant open the market.

Okay and then back to Aaron again. In the Q2 presentation it was mentioned that H2 would be better than H1 in terms of subscription volumes. Is that still the expectation and related to that going into Q4 2024 have you seen a pickup in premium sports subscriptions to the level going into Q4 23. So I suppose year on year.

I think we have not been specific on our guidance for the second half of this year but if it looks right now we will be better off the second half this year than we were in the second half last year when it comes to subscriber development meeting how many subscribers we would add or lose. So we look a bit better for the second half this year than last year. So that still stands.

Okay and a follow-up from Aaron. Is H4 attracting a new customer segment or mainly reactivating older customers?

It's actually both but it also does actually attract a new customer segment which is surprised us a little bit to be fair. It's always exciting when you launch these new products that you understand the dynamics of the customer. So it actually turned out that we have got more new customers in and also that the customers using H4 is actually also spending quite a long time on the product as well which of course benefits them the advertising that we have more viewing on among those subscribers as well. So that is a positive.

Okay and Martin had a question regarding financial targets for 2025 but I think those are typically things we address in the full year results rather than this stage in Q3. So I think if you will let us come back on that towards the end of the year or with the results that will be good. His specific question is it fair to assume a negative group free cash flow around 1 billion in 2025 including your target of positive free cash flow for the core? But I think again we would probably defer and come back with the full year results on that one. Okay. Still sticking with the message board we have a question from Canute Campania in Norway. The first Alpine Ski World Cup opening in Solvend starts this weekend and Viya Play have the rights to broadcast the Austrian winter sports events in Sweden but not in Norway. Why haven't you purchased the Austrian events for the fifth winter sports in Norway? The rights package still possible to acquire from the EVU? Very specific question.

So yeah you know in all fairness we never disclose or discuss our sports rights negotiation probably to be fair. So I have nothing to say about that. I can for sure say that we are happy with the products that we're having up there and it works very well for us. The skiing has a high traction to our customers. So that is good news at least but to comment specific on future rights is something we have not done. I will not

do it. Okay and Tom from Citi had a question regarding this sequential growth in the sub place and Tom yeah you're right it is the normal pattern that you see Q2 to Q3. If you look back to the same period last year you see more or less the same thing. So as we discussed earlier this turn and we have a moment during the summer of the year which is a combination of course of the summer months themselves but also the sports seasons being off cycles. So you're right it is the usual. There is a follow up from Philip Cissner. It seems like piracy watching the ViyaPlay content on IPTV is quite extensive in Norway but probably elsewhere as well. You mentioned the cooperation with the police but what specifically are you doing in order to shut down those servers?

So there is a broader initiatives on that of course and one thing is what we can do ourselves which we are doing. The other thing of course is what our partners the content distributors or content rights owners what they are doing and there obviously it affects them not only in our market but also in other markets. So they are very active in that space as well. The Premier League has a forum for trying to tackle piracy where we also then have companies of rights owners like the Premier League participating in that forum. So there is a range of initiatives but it's very clear that we need the politicians and the legislations to be much more aggressive in this space and which is a little bit possible for me that it isn't already because it is a little bit more difficult to create content if you don't get paid for it to be fair. Somebody obviously needs to pay fair enough if you don't want to buy it at least but don't stream it if you want to see it illegally. So we would like to see much stronger legislation and we would expect to be fair the politicians to be much more aggressive in this space which they aren't right now which is a little bit disappointing. So one thing is what we can do our partners what they are doing and then thirdly of course what the politician can do and that is what I talked about. We need more radical action from that part.

And Philip also had a further follow-up on the guidance. I think Philip just wants to answer your question. If you look at page 13 of the presentation deck you'll see the longer term ambitions that we talk about for our core business and there we said low to mid single digit percentage revenue growth in the coming years looking for a double digit operating profit margin in five years time. Positive free cash flow for the core next year and for the group in 2027 and then the obviously efforts to recapitalize deliver the plan and build a balance sheet which are all in motion. I think just a question from Media Watch. What will be the impact on revenue of your work with extending or ending partnerships in 2024? Have you taken losses in the short term in order to gain in the long term?

The answer is no that we have not taken losses short term and we will not be specific on

you

know on the revenue as such since we have not but of course the whole idea is of course that we have a mutual beneficial partnership with the partners and also in Denmark and that is of course what we are discussing with the partners how that should look like you know to make sure that we all can benefit from the entertainment that we are offering which is relevant strong entertainment we see that clearly. So that is the process that we have also in Denmark some of our key partners and having discussion with them also now how to produce even more products specific products which they can capitalize on even better than they do today. So that is a mutual beneficial discussion which we are having and not just one way which has been in the past.

Good I think that really concludes the questions we have in the message board a lot of them I mean forgive me if I haven't read out every single one there are a lot that are repeating so we try to deal with every subject. We have no more calls on the telephone line. So I think that really concludes the question and answer session so thank you very much to you and Antje and to all of you for your questions and for your time reading through the results and materials we appreciate it's a short time period between the publication and this call so please do come back if you have any follow-ups. We always appreciate your interest and always welcome your feedback on the formats and content of this session which we are constantly looking to evolve so please let us know if there is anything there you would like to change. We are also always available for follow-up meetings so please don't hesitate to reach out to my colleague Anna or me if you would like to schedule a meeting or have any further questions. So that is it for today so thank you again goodbye for now and see you soon.