Storytel AB (publ)

Welcome to Storytel Q1 Report 2026. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the CEO, Bottle Erickson-Torp. Please go ahead.

Good morning everyone and welcome to sunny Stockholm and our earnings call for the first quarter this year. I'm Bodle Ericsson Torp, CEO of Storytel Group and together with me here today is our CFO Stefan Ward. We are glad to announce that we are off to a good start for this year 2026. with a strong subscriber growth, increased profitability and a strong cash flow generation driven by strong operational performance. So we are well on track to continue to deliver our guidance. So here comes some of our strong highlights. We have started off the year with a solid start with revenue growth of almost 8% in constant currency. And we continue margin expansion to an EBITDA margin of 17% compared with 14% Q1 last year. So we continue to strengthen our financial position and ended the period with a net cash position of 220 million SEK. And we also added 72,000 paying subscribers during this quarter. It's up 8% year-on-year, and we had 2.74 million paying subs at the end of the period. We actually had the strongest Q1 net intake of subs in the Nordics since the pandemic, and our new European segment crossed the 1 million mark for the first time, so we are happy for that. When it comes to publishing our external revenue growth was solid over 9% in constant currency and while our margin expanded to 28%. We are well on track for our transfer to main market on schedule during Q2. So over to our group financial highlights during the quarter. We have faced material currency headwinds in the quarter that continues. So reported net sales increased by 3% and 8% in constant currency. While stream revenues increased by 7% constant currency and publishing external revenue increased by 9% in constant currency. Our gross margin expanded to over 45% driven by improved margin in publishing. Q1 EBTA grew by 24% while our EBTA margin improved by 3 percentage points to 17%. Our net profit amounted to 86 million driven by strong operational performance and the positive impact of reported tax as Stefan will come back to. And our cash flow from operation before working capital was strong at 135 million. So looking into rolling 12, our annualized performance showed continued growth and margin expansion. At the end of Q1, our analyzed EBITDA was 780 million, up 25% year-on-year, with a margin above 19%. So let's look into our publishing business area. Our external sales in the publishing grew 9% in constant currency, driven by strong digital sales in publishing. So we have also had a strong gross margin expansion behind the EBITDA growth of 21% to 81 million with an EBITDA margin of 28%. And this was also with a positive effect from Botfabriken, which was consolidated for the first quarter this year. Full first quarter, I should correct. So now over to our streaming business unit and the new segment, Stefan. Stefan, please tell us more about why we are doing this with the new segments and how.

This is our first quarter with our new segment structure. We have two business areas that's unchanged. We have the streaming and the publishing. But within the streaming, we have changed the segmentation. And instead of our earlier composition of three segments, We now have four segments. Nordics remain unchanged, but we have added Europe as a separate segment. And we have included Americas for the first time as a separate segment. And then we have a fourth segment called APAC. Europe includes our European footprint, including Israel. These European markets include the core markets of Poland, Netherlands and Turkey and Bulgaria, but they also include Germany, Belgium, Italy, Spain. Americas consists of our subsidiary in North America, audiobooks.com, and our Latin footprint with Mexico, Colombia, Brazil, Argentina and Chile. And our fourth segment includes our Asian footprint and Middle East markets. We believe that this new segmentation better describes how we run the business, but it also helps improve transparency of our different assets in the group. And it should also help understanding our FX exposure and improve visibility of the profitability in various areas within the group. Perhaps most importantly, it will also help show where in the group we are delivering and focusing on generating growth going forward. Now let's take a look at the actual performance for the streaming segment on the next slide. We had a strong quarter in terms of net ads. Normally, Q1 is seasonally weak. In this quarter, we added 72,000 new subs for a total of 2.74, end of period. Nordics, as Bodil mentioned, had its strongest Q1 performance since the pandemic, adding 11,000 in the quarter. In our European segment, we added 44,000 new subscribers and crossed the 1 million mark for the first time, while we added 17,000 in America's division. Our Nordic business now have 1.35 million subs end of Q1. 47% of this base have been with us for a period of longer than five years. This is a very strong characteristic of our subscriber base and also help explain how we can continue to see a decline in churn rates, both for the group as a total, but also for the Nordics. ARPA declined 5.5% in the quarter, primarily or almost entirely due to FX headwind. We had a real headwind in our North American business due to the 16% decline in the dollar versus the SEC. And this is also explaining why our reported growth for the old sort of non-Nordic core segment was on the weaker side. Mix also plays some part, and this is an important dynamic. As you can see, we are driving growth in our European segment, and hopefully we will see increased growth in America as well. As both of these segments are below the Nordics in ARPU, we will continue to see pressure on group ARPU. That does not necessarily mean that we see a decline in ARPU levels in the local markets. Rather the contrary, we actually see stable ARPU development in most of our local markets. Okay, let's move to the next slide. So our subscriber growth enabled a solid 7.4% organic growth for the streaming segment in constant currencies. FX headwind played a part, so the reported growth was 2%. The Nordics delivered 4.5% organic growth in constant currencies, while Europe grew by 19% in unchanged currencies. Operating leverage enabled a solid 31% increase in our adjusted EBITDA, while our operating profit for the segment improved by 50%. Moving over to our group financial again. On the next slide, we can see our cash flow generation. We delivered a strong cash flow of 135 million from operations, both before and after working capital, as the impact of working capital was neutral in the quarter. compared with a headwind of 59 million in Q1 last year. The increase in cash flow from operation was close to 53% year on year. While our cash flow increase after change in working capital increased by 106 million or four times the level from last year. So a dramatic improvement there. CapEx went at a similar level as last year. Q1 2025, we made the acquisition of Bokfabriken, which had an impact on investment cash flows in that quarter. We repaid 50 million of our outstanding debt during Q1 this year and delivered a net cash flow for the period of 29 million versus an outflow of 73 million in the same period last year. Looking at our net cash position, it has actually turned into a net cash position of 220 million in Q1 compared with a net debt of 160 million a year ago. Moving on to the balance sheet. Next slide. We can see that we have increased our assets by roughly 350 million. Of those, 195 million comes from the activation of tax losses carried forward that we did in Q4. And the remaining part comes from positive results generation. The strengthening of the balance sheet over the past 12 months is material and exemplified by our improved equity to assets ratio, which is now at 57% of 10 percentage points from a year ago. So we can conclude that we are in a good position financially to combine our growth initiatives with continued shareholder returns and we'll aim to maximize shareholder returns over time. With that, I'll hand the presentation back to Buldil for our final remarks.