Viaplay Group AB (publ)

Good morning, everyone, and welcome to today's Q1 2026 Results Conference Call. At this time, all participants are in a listener-only mode. My name is Matthew Hooper, and I will be your host today. Joining me here on the call are our CEO, Juergen Lindemann, and our CFO, Johan Johansson. Welcome, gentlemen. Our presentation will be followed by a Q&A session on the telephone dial-in line. and you can find our results materials including the presentation deck and detailed fact sheet on the investor relations section of our website. Please be advised that today's conference is being recorded. I will now hand the call over to Juergen to walk you through the Q1 results. Over to you Juergen.

Thank you Matthew and good morning everyone. So this is our first set of results to include a full quarter contribution from a lender group, which we consolidated 100% in November last year by buying the remaining 50% of the company that we know so well as long-term owner, partner, and operator. The combination of Viaplay Group and the lender group has created a much larger group with more customer contact points and even stronger offerings for our partners, more content monetization potential, and more cash flow generating capacity to deliver our strategic transformation and goals. To put this in context, the sales for our corporations are almost 1.1 billion or more than 25% higher in Q1 this year than last year. Our EBITDA before ACI and IACs has swung from a loss of 175 million to a profit of just over 100 million. And our group-free cash flow has swung by over 700 million from negative 671 million to positive 37 million, even when including the 48 million negative cash flow from the non-core operations. There have been considerable currency impact on these results, but the direction of travel is clear. The integration of a lender group is running according to plan, and we continue to expect the resulting cash cost synergies to amount to between 300 to 400 million on a full-year run rate basis from the start of next year. There will also be sales synergies from putting our customer bases, our products and content offerings, our tech stacks, CIM and marketing activities together, and we are carefully exploring all of these opportunities. More broadly, we are making progress with our strategic transformation. On the sales side, we saw 7.9% organic growth in our streaming subscription sales. The year-on-year growth was driven by growth in our D2C subscriber base, as well as higher ARPU levels for both D2C and B2B offerings. The ARPU increase were not so much an effect of pricing, although we have raised prices for certain packages in certain countries, but more the fact that we have higher proportion of D2C and B2B customers taking our premium sports offering and a lower proportion of low ARPU B2B customers now that we have new prolonged agreement in place. Our B2B subscriber base was down year-on-year, which reflected our focus on value over volume when it comes to extending our distribution agreements. As you know, we have been gradually prolonging these multi-year deals on commercial terms that benefit both parties, and where that is not possible, we find alternative options. Our B2B subscriber base has grown since the end of last year following changes in agreements that take effect this year. This value over volume strategy is an important part of our transformation strategy. More D2C and B2B customers are choosing our sports offering because we have such a high quality wide range and year-round offering of the very best sports content. And we have more coverage of major sports this year than ever before. This quarter featured English Premier League and Championship football, the best Nordic and Alpine skiing, live dance action, the new Formula One season, the European Handball Championship, and the qualifiers for this year's Football World Cup. Our streaming revenue now comprises the Atlanta DTH business. Our non-streaming revenue now comprises the Atlanta DTH business, as well as our own linear pay-to-be channel sales to third-party networks. The number of linear platforms and channel subscribers is, in general, gradually declining as they move over to streaming services like Viaplay. The vast majority of Alinda subscribers already have Viaplay bundled with their subscriptions. The Alinda DTH subscriber base continues to decline in Q1, but less than in Q1 last year. Alinda has also added new content, such as Apple TV this quarter, and has therefore also been able to strengthen the consumer offer and raise prices to partially offset volume declines. In total then, our non-streaming subscription sales were down 4.6% on an organic basis. Our total advertising sales were down 1.3% on an organic basis, which again reflected the combination of strong digital sales through our AVOD and HVOD offerings and healthy radio advertising sales, which were offset by the ongoing decline in linear TV advertising markets. We have a clear focus and ambition to capitalize on accelerating shifts to digital advertising. The combination of local storytelling, international formats, and the best acquired content and sports are what drives sustained audience and subscriber engagement on Viaplay and our linear channels. Our local productions continue to perform well in Q1, with local versions of Paradise Hotel in Sweden, Denmark, and Norway, alongside returning lifestyle category favorite Luxury Trap and The Factual Show also remained as key strength. With season two of St. Jørgen's Hospital, supported by a successful launch of Swedish Farmers, as well as the consistency of Crime, such as wanted and Swedish cases. We have also expanded our local scripted offering with new additions, including Veronica and End of Summer, both classic Nordic noir, alongside topical drama Kamena, Harald and Sonja about the Norwegian royal family. This slate is complemented by a solid lineup of series and movies from leading global studios. Finally, the other sales line comprises of our sports advertising business, where we have subsidized our sports rights to third-party broadcasters and streamers in our core markets and our scripted content sales business where we sell our portfolio of original scripted content to broadcasters and streamers around the world. Both categories were down in the quarter and jointly reported a 17% organic sales decline as repeat and new sales were not at the same level as last year. Overall, our corporation's sales were stable year-on-year on an organic basis in Q1 which is in line with our guidance for the current year and moving forward. When excluding the positive currency effects, our corporate rating costs were up 2% or 132 million on a performer basis. The primary operating cost driver is content, which accounts for three quarters of our total cost base. The largest part of this is sports content, where our costs have continued to rise due to inflation built into our multi-year agreements. As we prolong these agreements on market terms or find alternatives, the inflation will be less in the second half of the year when they tap further next year. We made further savings in SG&A as we continue to become more fit for purpose. The ongoing negotiation and key extension of key content and distribution partner agreements on current and commercial competitive terms or the securing or alternative option is a major driver of our longer term ambition to deliver a double-digit EVDA margin in 2028 compared to the 5.3% that we delivered last year on a performance basis. Our Q1 EVDA was up year-on-year when compared to the performer number, including a lent-to-group result last year, and this included a significant 140 million SEK currency tailwind due to the strengthening of the Swedish corner reporting currency. Our EVDA has It would have been down year and year when excluding these currency effects as a consequence of the content inflation that we have been facing. We are totally focused on relevance and resilience with commercial partnerships and competitive products so that we build on our position and fulfill our potential. There's still a lot for us to do to deliver our short and long-term goals, and we are focused on making the transformation happen. That is for my comments for now, and I will now hand the call over to Johan for his comments on our financial performance and position before we take your questions. Go to you, Johan.

Thank you, Jörgen, and good morning, everyone. We have further simplified and shortened our quarterly report materials this quarter to reflect the integration of Valente into our numbers. This is to focus on the key business drivers and to provide relevant historical backup information in the fact sheet which you will find on our website. We have provided the performing information for prior periods in 2025 to include Alente Group as if it had been consolidated from the beginning of last year. This so you can see the organic development The FX effects are shown as usual in the ATMs in the back of the report. We've also focused our commentary on the key sales and EBITDA numbers for our core operations as we discontinued the loss of our non-core operations last summer. And we have given you group numbers for cash flow. as we still have a cash drag from legacy agreements that are yet to expire in these markets that we have already exited. The year-on-year currency movements had a big impact this quarter as the strength in our Swedish krona reported currency had a negative impact of 125 million on the translation of our core operations sales from other currencies. Reported core operation costs, however, benefited from a net positive approximately 270 million SX tailwind due to the relative strength of the Swedish krona against the Norwegian krona, the euro, and the dollar, in which we have the vast majority of our costs. The result was 140 million SX positive year-on-year SX effect in our core operation EBITDA in Q1. For the full year, and based on where we are today, we would expect a positive FX tailwind of around 300 million. This compares with the more than 100 million estimate that we provided at the Q4 results two months ago. But we still have an exposure on NOC and Euro, so these numbers can still move materially in either direction over the year. DNA amounted to 151 million for the quarter and included approximately 100 million of PPA emulsification charges, which we flagged previously and are the result of the consolidation of Alente Group. The 184 million sec of items affecting comparability in Q1 primarily compromised the 161 million sec of redundancy and restructuring costs relating to the integration of Alente Group. as well as 3 million of transaction and advisory costs, and 20 million SEK of currency translation effects. We have previously guided for a total cash integration cost of 270 to 330 million, with the vast majority being taken as ISD in the first half of this year. So the Q1 result was well in line with this. We have almost no associated company income or dividends now, that we have consolidated Alente Group. We're looking at our interest cost. Please remember that the cost for the 646 million euro off balance sheet bank guarantee facility that we canceled in November last year were included in other financial items, not net interest. So although the net interest costs were up this quarter, other financial items were also significantly down. Moving on to the group cash flow, we reported the positive working capital development this quarter, which partly reflected underlying improvements, but also some changes in timing of payments to later in the year. This translated into positive free cash flow of 37 million, even when including the 48 million cash strike from the non-corporations and 112 million of cash interest costs. There is no change in the anticipated level of non-core cash dragon moving forward, where we estimate this year to land at 500 million, next year at 400 million, and 2028 at 200 million. When looking at the remaining quarters of this year, we continue to expect the intra-quarter core operations working capital swings to be less volatile than in the past, This is due to improved terms for our commercial agreements. The positive change in working capital in Q1 reflected both these new terms and changes in timing of payments. This will reverse during the rest of the year, but we're constantly working to improve the working capital profile. And please remember that the non-core cash drag does flow through the working capital line as well. CapEx will be at or around about the same level for the combined group, which was approximately $150 million for 2025 on a pro forma basis. Cash tax payments will benefit from the carry forward tax losses that we have. And our annual cash interest costs are now running at approximately $450 million. Our long-term indebtedness excluding The RCF is now 5.9 billion compared to 6 billion at the end of last year. And you can see the usual debt maturity profile chart in the slide pack. We have scheduled repayments of 420 million both in 2026 and 2027, and all the rest of our debt facilities mature in 2028. Our financial net debt when excluding leases amounted to just under 5.2 billion at the end of the quarter and compromised 6.6 billion of borrowings and 1.3 billion of cash. 750 million of our 2.8 billion RCEF was drawn at the end of the quarter. The effective doubling or EBITDA margin between 2025 and 2028 requires a lot of work. and collaboration with suppliers and partners to agree on commercial and market terms or find alternatives, as Jørgen said. The strengthening of the profitability profile together with the ending of the cash drag for non-corporations in 2020 will enable us to gradually deliver the balance sheets. Execution and efficiency remain our key focus areas. We have clear objectives, so we must continue to deliver on the sales growth and cost reduction initiatives, constantly improve our working capital efficiency and allocate capital with discipline and clear return requirements. We have made a lot of progress and there is still much to do. That concludes my remarks for now. So back to you, Matthew.