Viaplay Group

Quarterly Report • Oct 25, 2022

Third quarter highlights

• Viaplay paying subscribers up 78% YoY to 6,428k (3,608) with 879k subscribers added QoQ

• 25% organic sales growth with reported sales of SEK 3,972m (3,054)

• Operating income before associated company income (ACI) and items affecting comparability (IAC) of SEK -171m (80) including SEK -419m (-200) impact of Viaplay International expansion

• Total reported operating income of SEK -100m (114) including ACI of SEK 71m (34)

• Net income from total operations of SEK -86m (55) and EPS of SEK -1.10 (0.71)

• Completion of Premier Sports acquisition in October and Viaplay to be launched in the UK on 1 November

• Reduction in full year 2022 guidance to organic group revenue growth of approximately 20%; organic Nordic revenue growth of approximately 10%; and Nordic EBIT margin of approximately 7%. Long-term guidance also adjusted – please see page 7

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Continuing operations
Net sales	3,972	3,054	11,021	9,108	12,661
Organic growth	25.4%	9.9%	18.0%	18.4%	16.7%
Operating income before ACI and IAC	-171	80	-88	487	607
Associated company income (ACI)	71	34	200	91	40
Operating income before IAC	-100	114	112	578	647
Items affecting comparability (IAC)1)	-	-	595	-74	-74
Operating income	-100	114	707	503	573
Net income from continuing operations	-86	91	573	333	365
Net income from discontinued operations2)	-	-36	-	-40	-40
Net income from total operations	-86	55	573	293	325
Basic earnings per share (SEK)	-1.10	0.71	7.33	3.84	4.23
Adjusted net income from continuing operations	-49	179	204	675	864
Adjusted earnings per share from continuing operations (SEK)	-0.63	2.30	2.61	8.85	11.26

Financial overview

• 1. Including the impact of the divestment of the NENT Studios UK content distribution business and impairment charges related to the studio assets in 2021, and the proceeds of the settlement of court cases with TV 2 Denmark in Q1 2022. Please see page 17 for details
• 1. Discontinued operations comprised Viaplay Group's non-scripted, branded entertainment and events businesses, which were divested in 2021. Please see note 4 for details. This report refers to Viaplay Group's continuing operations unless otherwise indicated.

Alternative performance measures used in this report are explained and reconciled on pages 16-20.

We have delivered another quarter of high subscriber and revenue growth, which demonstrate the attraction and resilience of our well-differentiated offerings. Our content line-up has never been stronger, and we added key new original and sports content during the quarter. The international operations are performing ahead of plan, and we reached the important milestone of more than 1 million subscribers in both the Dutch and Polish markets. However, this international performance was offset by the rate of direct-to-consumer subscription and ARPU growth in the Nordics, which was lower than anticipated.

Our 25% YoY group organic revenue growth was driven by Viaplay revenues (47% of sales), which were up 64% on an organic basis. The total Viaplay subscriber base grew by 78%, and we ended the quarter with 6,428k subscribers.

The 28% YoY growth in the Viaplay subscriber base in the Nordics was driven by our third party B2B distribution partnerships in particular, as well as lower churn levels. The number of premium subscribers in Norway is building following the inclusion of English Premier League coverage in August, but at a slower pace than anticipated. Sales for Viaplay in the Nordics were up 27% on an organic basis.

The international Viaplay operations added 685k subscribers in the quarter, which was more than double the number of subscribers added in the previous quarter. The addition of the English Premier League rights in Poland and the Netherlands contributed to the growth, together with the new distribution agreement in Poland. Revenues grew accordingly and also reflected the higher price point in the Netherlands.

Linear subscription and other revenues (32% of sales) were up 9% YoY on an organic basis. The growth in linear channel subscription sales followed the upward price adjustments to reflect the addition of new content, as well as the extension of almost all distribution agreements in Norway to include the English Premier League football coverage.

Advertising revenues (21% of sales) were down 3% YoY on an organic basis, and reflected the weaker development in the linear TV advertising market conditions, which was offset to an extent by the continued growth in the radio advertising markets.

Now that we have completed the acquisition of Premier Sports in the UK, we are raising our year end international subscriber target from approximately 2.5m to approximately 2.7m. Viaplay will be launched in the UK on 1 November. At the same time, we are reducing our year end Nordic target from 4.8m to 4.6m. Our group target is therefore unchanged at 7.3m.

As a result of the immediate effects of the general economic slowdown on advertising and subscription sales, the lower than anticipated premium subscription sales in Norway, and the strategic decision to discontinue an unfavourable distribution agreement, we are reducing our full year Nordic organic revenue growth target to approximately 10%. Conversely, international sales are expected to exceed our previous expectations, and we now expect full year total Group organic revenue growth of approximately 20%.

The Q3 profitability level in the Nordics reflected our content investments, including the new and extended sports rights that will drive subscriber and revenue growth. The lower than anticipated Q4 sales growth in the Nordics cannot be fully offset by corrective measures and cost savings in the short term, so we now expect a full year margin for the Nordic operations of approximately 7%. The international losses were at their peak level in Q3 as we added new content. We maintain our full year outlook for international losses, which was improved last quarter and will provide a better starting point for 2023.

These adjustments to our short-term targets, and the addition of Premier Sports, also affect our long-term targets, as does the significant forward currency headwind due to the strength of the US dollar. Our international operations are now expected to be profitable on an annual basis in 2024 – one year ahead of schedule. This is due to a combination of higher sales growth than originally projected, and the prioritisation of investments into Poland, the Netherlands and the UK. Our Nordic operations are now expected to grow their revenues at a slower rate moving forward. We will embark on a substantial cost saving programme in 2023, in order to deliver these targets by offsetting some of the operating and currency headwinds that we face. We expect to deliver a full year 2025 Group EBIT margin of approximately 13%, with margins to then increase over time. It is clear that the international expansion is spreading and reducing our risk as a group. Please see the updated guidance on page 7 of this report, and we will provide further updates and details at our Capital Markets Day on 9 November.

We remain fully funded for our expansion and have full visibility over our forward content costs. The broader macroeconomic outlook and geopolitical backdrop are of course less certain. This is why we have adjusted our growth outlook, and already made plans to adjust our cost base and exposure, where relevant and as we have done in the past. We are also taking steps to accelerate our growth where momentum is strong.

Anders Jensen

P R E S I D E N T & C E O

Group

Organic net sales were up 25% when excluding changes in FX rates and divested operations, and primarily reflected the growth of Viaplay in the Nordic and international markets. Reported sales amounted to SEK 3,972m (3,054). Please see page 16 for a reconciliation of organic and reported sales growth.

Organic sales growth

Viaplay subscribers

Sales by category

				Nine	Nine		Full
	Q3	Q3		months	months		year
(SEKm)	2022	2021	Change %	2022	2021	Change %	2021
Viaplay	1,870	1,100	69.9%	4,742	3,188	48.7%	4,386
Linear subscription & other1)	1,257	1,118	12.5%	3,552	3,283	8.2%	4,498
Advertising	845	837	1.0%	2,727	2,636	3.5%	3,777
Total	3,972	3,054	30.0%	11,021	9,108	21.0%	12,661

1) Previous reported 'Other subscription' and 'Studios & other' have been combined into 'Linear subscription & other'.

Viaplay was the largest quarterly revenue contributor and accounted for 47% of Group sales. Viaplay sales were up 64% on an organic basis and included SEK 433m of international sales in the quarter and SEK 806m for the year to date. The total Viaplay paying subscriber base grew by 78% YoY to 6,428 subscribers. Viaplay added 879k paying subscribers QoQ, with 194k added in the Nordics and 685k in the international markets. The Nordic subscriber growth continued to be driven by the B2B partnerships in particular. The subscriber growth in the international markets accelerated, with both the Dutch and Polish subscriber bases growing to over 1m each at the end of the period.

Linear subscription and other sales, which include both linear channel subscription sales and Viaplay Studios' external sales, accounted for 32% of Group sales and were up 9% on an organic basis. Linear channel subscription sales continued to accelerate, and reflected the price increases for the enhanced content offering and new sports rights in particular.

Advertising sales accounted for 21% of Group sales and were down 3% on an organic basis, which reflected weaker TV advertising markets and stable to growing radio advertising markets. Viaplay Group's TV audience share was up in Norway and down in Sweden and Denmark, with the TV advertising markets estimated to have declined in all three markets. Viaplay Group's radio audience share was up in both Norway and Sweden, with the radio advertising markets estimated to have grown in Sweden and been stable in Norway.

Operating expenses increased by 41% to SEK 4,206m (2,987) and reflected the ongoing international expansion and investments in sports rights and original productions.

Operating income before ACI and IAC amounted to SEK -171m (80) and included the SEK -419m (-200) of net losses from the international expansion in the quarter, and SEK -963m (-286) for the year to date. When excluding the impact of the international expansion, operating profits were down 11% to SEK 248m (280) in the quarter and up 13% to SEK 875m (773) for the year to date. Operating income before IAC amounted to SEK -100m (114) and included SEK 71m (34) of associated company income, which primarily comprised the Group's 50% share in the earnings of Allente. Please see note 3 regarding Allente's financial performance and position. Total operating income amounted to SEK -100m (114).

Net financial items totalled SEK -28m (-8). Net interest amounted to SEK -16m (-15), of which SEK -3m (-3) related to interest on net lease liabilities. Other financial items amounted to SEK -12m (7) and mainly comprised financing arrangement fees and the impact of currency exchange rates on the revaluation of financial items.

Tax charges amounted to SEK 42m (-15), and net income from continuing operations totalled SEK -86m (91). Discontinued operations contributed SEK 0m (-36) of net income in the quarter. Total net income amounted to SEK -86m (55), with total basic earnings per share of SEK -1.10 (0.71).

Cash flow from operating activities

Cash flow from operating activities totalled SEK -167m (265) and included the receipt of a SEK 100m (125) dividend from Allente. Changes in working capital amounted to SEK -1,915m (-986) and primarily reflected payments for extended and new sports rights. Net operating cash flow amounted to SEK -2,082m (-721).

Cash flow from investing activities

Total cash flow related to investing activities amounted to SEK 12m (353), and included capital expenditure on tangible and intangible assets of SEK -45m (-55) and other investing activities of SEK 57m (-4). The 2021 result included a positive net cashflow effect of SEK 412m from the divestment of the studio operations.

Cash flow from financing activities

Cash flow from financing activities amounted to SEK -117m (-36). The net change in cash and cash equivalents amounted to SEK -2,187m (-405).

Financial position

The Group's net debt position at the end of the quarter was SEK 546m (-1,392) and the financial net debt position was SEK 215m (-1,754). Cash and cash equivalents and short-term investments totalled SEK 3,165m (5,014), while the Group's total borrowings amounted to SEK 3,400m (3,300), and lease liabilities net of sublease receivables amounted to SEK 331m (362).

Viaplay Group AB is the Group's parent company and is responsible for Group-wide management, administration and financing.

Net sales for the Parent Company amounted to SEK 10m (13). Income before tax and appropriations amounted to SEK -16m (-20), and net income for the period amounted to SEK -13m (-15). The income statement and balance sheet for the Parent Company are presented on page 12.

A key component of Viaplay Group's five-year sustainability strategy is to work with sustainable productions, in order to encourage climate conscious content production practices across the industry. The Group has collaborated with Nordic producers' associations to offer trainings and raise awareness of environmental and climate-friendly production practices. The Group reviews its content portfolios and productions on an ongoing basis, and also conducts third-party sustainability audits of selected productions, in order to ensure responsible production practices. Three productions were audited in the year to date, with one more audit to follow in Q4. Action plans have been established following the audits and learnings are followed up on a regular basis. Viaplay continues to drive diversity and inclusion in its operations and productions, including by investing in storytelling that raises awareness of important societal topics. Recently launched and premiered Viaplay Originals such as 'Sex Dreams Love', 'My Fault', 'The Dreamer - Becoming Karen Blixen', and the third season of 'Honour' have highlighted civil rights, women's rights, inclusion, and religious freedom.

The Group has further strengthened its whistleblowing procedures by introducing an independent reporting system managed by a third-party. This set-up is aligned with new EU Whistleblowing Directive. In addition, Viaplay has continued to lobby at EU and country level for supportive policy frameworks to enable local European companies to compete with global technology giants and continue to invest in the local content industries.

The Group has continued to take actions in response to the war in Ukraine, including excluding Russian content from its platforms; screening new contracts and counterparties to ensure that any agreements do not involve payments to entities in Russia; complying with international sanctions; and providing a fast-track recruitment programme for Ukrainian applicants.

Significant events during and after the quarter

• 5 July Viaplay becomes home of Hoofdklasse field hockey in the Netherlands

• 15 July Viaplay Group and CANAL+ Polska agree major Polish distribution partnership

• 21 July Viaplay Group acquires Premier Sports and accelerates entry into UK

• 12 August Erling Haaland and Viaplay enter multi-market partnership

• 29 September Max Verstappen and Viaplay expand long-term partnership

• 12 October Viaplay Select to launch on CINDIE in nine Latin American countries

• 13 October Viaplay Group and Telenor agree long-term Swedish and Norwegian distribution partnership

• 17 October Viaplay to launch in the UK on 1 November

• 19 October Viaplay adds Austrian events to secure all FIS winter sports in Sweden

A full list of announcements and reports can be found at www.viaplaygroup.com

Risks & uncertainties

Significant risks and uncertainties exist for the Group and the parent company. These factors include the prevailing economic and business environments in each of the Group's markets; commercial risks related to expansion into new territories; political and legislative risks related to changes in rules and regulations in the various territories in which the Group operates; exposure to foreign exchange rate movements; changes in the ability to access capital markets; and the competition for subscribers, content, and talent. The increasing shift towards online entertainment consumption and the Group's expansion also make the Group a potential target for cyber-attacks, intrusions, disruptions or denials of service. The macro-economic development globally, with increased inflation and interest rates, puts pressure on both companies and consumers. In addition, the currency exchange rate volatility adds further uncertainty. Viaplay Group is monitoring the situation closely and acting accordingly.

Long-term targets

Viaplay Group provided a series of updated long-term operational and financial targets at its Capital Markets Day on 22 September 2021. These targets are listed below, with the second table including the updated and current goals.

Previous long-term targets

Group organic sales growth 1)	~18-20% compound annual growth rate (CAGR) 2020-2025
Nordic organic sales growth1)	~13-15% CAGR 2020-2025
Viaplay Nordics organic sales growth	~23-25% CAGR 2020-2025
Viaplay subscribers	~12m by end of 2025 (~6m Nordics & ~6m international)
Nordic EBIT (excluding ACI & IAC)	~15% margin for 2025 and ~20% long-term margin
International EBIT	Positive for 2025, ~15% margin for 2026 and ~25% long-term margin
Leverage policy2)	<2.5x Net Debt/LTM EBITDA including leases

1) based on 2020 Group revenues excluding contribution from subsequently deconsolidated Viasat Consumer business 2) based on trailing twelve month adjusted EBITDA including leases. Viaplay Group's leverage may exceed these levels temporarily from time to time

Updated long-term targets

Group sales growth 1)	~16-19% CAGR 2020-2025
Nordic sales growth1)	~10-12% CAGR 2020-2025
Viaplay subscribers	~12m by end of 2025
	~13% margin for 2025 with positive result for International operations already
Group EBIT (excluding ACI & IAC)	in 2024, ~20% long-term margin for Nordic operations, and ~25% long term
	margin for International operations
Leverage policy2)	<2.5x Net Debt/LTM EBITDA including leases

1) based on 2020 Group revenues excluding the contribution from the deconsolidated Viasat Consumer business and the subsequently divested Studio operations , and including the contribution from the consolidation of Premier Sports business from Q4 2022

2) based on trailing twelve month adjusted EBITDA including leases. Viaplay Group's leverage may exceed these levels temporarily from time to time

Short-term outlook

Viaplay Group also provided a series of short-term operational and financial targets at its Capital Markets Day on 22 September 2021. These targets have been subsequently updated and the current outlook is included below.

2022 Group organic sales growth	~ 20% (compared to 'at least 28%' previously)
2022 Nordic organic sales growth	~10% (compared to '~20%' previously)
Viaplay subscribers at end of 2022	~7.3m (~4.6m Nordic & ~2.7m International; compared to '~4.8m Nordic & ~2.5m International' previously)
2022 Nordic EBIT (excluding ACI & IAC)	Margin of ~7% (compared to 'Rising profits with stable to slightly lower margin vs 2021' previously)
2022 International EBIT	Loss of ~ SEK 1.35bn (unchanged)
2022 Change in working capital	Negative ~ SEK 3.2bn (unchanged)

Stockholm, 25 October 2022

Anders Jensen President & CEO

Viaplay Group AB

Corp. id. 559124-6847

Introduction

We have reviewed the condensed interim financial information (interim report) of Viaplay Group AB as of September 30, 2022 and the nine-month period then ended. The Board of Directors and the Chief Executive Officer are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, October 25, 2022

KPMG AB

Tomas Gerhardsson Authorized Public Accountant

Condensed consolidated income statement

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Continuing operations
Net sales	3,972	3,054	11,021	9,108	12,661
Cost of sales	-3,442	-2,325	-8,846	-6,744	-9,462
Gross income	530	729	2,175	2,364	3,199
Selling and marketing expenses	-335	-260	-933	-723	-1,030
General and administrative expenses	-429	-402	-1,390	-1,206	-1,632
Other operating income and expenses	63	13	655	-23	-4
Share of earnings in associated companies and joint ventures	71	34	200	91	40
Operating income	-100	114	707	503	573
Net financial items	-28	-8	-66	-75	-97
Income before tax	-128	106	641	428	476
Tax expenses	42	-15	-68	-95	-111
Net income for the period, continuing operations	-86	91	573	333	365
Net income for the period, discontinued operations	-	-36	-	-40	-40
Net income for the period	-86	55	573	293	325
Items that are or may be reclassified to profit or loss net of tax
Currency translation differences	19	20	76	111	140
Cash flow hedges	88	62	275	240	289
Other comprehensive income for the period	107	82	351	351	429
Total comprehensive income for the period	21	137	924	644	754
Net income for the period attributable to:
Equity holders of the parent company	-86	55	573	293	325
Total comprehensive income for the period attributable to:
Equity holders of the parent company	21	137	924	644	754
Earnings per share
Basic earnings per share (SEK), continuing operations	-1.10	1.17	7.33	4.37	4.76
Diluted earnings per share (SEK), continuing operations	-1.10	1.17	7.32	4.35	4.74
Basic earnings per share (SEK)	-1.10	0.71	7.33	3.84	4.23
Diluted earnings per share (SEK)	-1.10	0.71	7.32	3.83	4.21
Number of shares
Shares outstanding at the end of the period	78,225,962	77,947,526	78,225,962	77,947,526	77,970,071
Basic average number of shares outstanding	78,225,962	77,947,526	78,107,558	76,316,757	76,731,753
Diluted average number of shares outstanding	78,225,962	78,251,262	78,224,687	76,620,493	77,031,536

Condensed consolidated balance sheet

	30 Sep	30 Sep	31 Dec
(SEKm)	2022	2021	2021
Non-current assets
Intangible assets	1,972	1,992	1,981
Machinery, equipment and installations	163	148	163
Right-of-use assets	290	335	321
Shares and participations	1,474	1,495	1,328
Long-term sublease receivables	117	140	127
Other long-term receivables	150	135	144
Total non-current assets	4,166	4,246	4,064
Current assets
Inventories	4,629	3,252	3,543
Accounts receivable	1,023	1,089	847
Short-term sublease receivables	31	32	31
Prepaid expenses and accrued income	6,979	4,196	4,990
Other current receivables	843	281	350
Short-term investments	100	-	-
Cash and cash equivalents	3,065	5,014	5,702
Total current assets	16,670	13,864	15,463
Total assets	20,836	18,109	19,527
Equity
Equity	9,273	8,204	8,323
Non-controlling interest	-	-	-
Total equity	9,273	8,204	8,323
Non-current liabilities
Long-term borrowings	3,250	2,500	2,500
Long-term lease liabilities	373	429	416
Long-term provisions	169	141	157
Other non-current liabilities	238	213	238
Total non-current liabilities	4,030	3,283	3,311
Current liabilities
Short-term borrowings	150	800	800
Short-term lease liabilities	106	105	106
Short-term provisions	70	219	215
Other current liabilities	7,207	5,498	6,772
Total current liabilities	7,533	6,621	7,893
Total liabilities	11,563	9,904	11,204
Total shareholders' equity and liabilities	20,836	18,109	19,527

Condensed consolidated statement of cash flow

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Operating activities
Net income for the period, continuing operations	-86	91	573	333	365
Net income for the period, discontinued operations	-	-36	-	-40	-40
Dividends from associated companies	100	125	100	375	500
Depreciation, amortisation and write-down	67	77	196	230	326
Other adjustments for non-cash items	-248	8	-463	76	143
Cash flow from operations, excluding changes in working capital	-167	265	406	975	1,294
Changes in working capital	-1,915	-986	-2,960	-1,208	-817
Cash flow from operations	-2,082	-721	-2,554	-233	477
Investing activities
Divestments of operations	-	412	-	443	443
Capital expenditures in tangible and intangible assets	-45	-55	-128	-164	-216
Other cash flow from investing activities	57	-4	66	1	16
Cash flow from investing activities	12	353	-62	280	243
Financing activities
New borrowings	-	-	900	-	-
Amortisation of borrowings	-	-	-800	-1,260	-1,260
Net change in leases	-19	-27	-53	-69	-83
Share issue, net of transaction costs	-	-	-	4,292	4,292
Other cash flow from financing activities	-98	-9	-89	-57	-39
Cash flow from financing activities	-117	-36	-42	2,906	2,910
Change in cash and cash equivalents for the period	-2,187	-405	-2,658	2,954	3,630
Cash and cash equivalents at the beginning of the period	5,254	5,420	5,702	2,040	2,040
Translation differences in cash and cash equivalents	-2	-1	21	21	32
Cash and cash equivalents at end of the period	3,065	5,014	3,065	5,014	5,702

Condensed consolidated statement of changes in equity

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Opening balance	9,245	8,059	8,323	3,236	3,236
Net income for the period	-86	55	573	293	325
Other comprehensive income for the period	107	82	351	351	429
Total comprehensive income for the period	21	137	924	644	754
Share issue	-	-	-	4,346	4,346
Share issue transaction costs, net of tax	-	-	-	-43	-43
Effect of share based programmes	7	9	26	21	30
Closing balance	9,273	8,204	9,273	8,204	8,323

Parent company condensed income statement

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Net sales	10	13	30	40	86
General and administrative expenses	-65	-54	-216	-169	-228
Other operating income and expenses	-	1	1	1	1
Operating income	-54	-40	-185	-128	-141
Net financial items	38	20	70	40	58
Income before tax and appropriations	-16	-20	-115	-88	-83
Group contribution	-	-	-	-	186
Income before tax	-16	-20	-115	-88	103
Tax expenses	3	5	25	18	-
Net income for the period	-13	-15	-90	-70	103
Other comprehensive income	-	-	-	-	-
Total comprehensive income for the period	-13	-15	-90	-70	103

Parent company condensed balance sheet

	30 Sep	30 Sep	31 Dec
(SEKm)	2022	2021	2021
Non-current assets
Shares and participations in Group companies	217	196	202
Long-term receivables from Group companies	9,440	7,022	5,931
Deferred tax asset	3	-	-
Total non-current assets	9,660	7,218	6,133
Current assets
Receivables from Group companies	456	1,396	943
Other current receivables	717	90	131
Short-term investments	100	-	-
Cash and bank	2,846	4,901	5,590
Total current assets	4,119	6,387	6,664
Total assets	13,779	13,606	12,797
Equity
Restricted equity	157	157	157
Non-restricted equity	6,377	6,264	6,447
Total equity	6,534	6,421	6,604
Non-current liabilities
Long-term borrowings	3,250	2,500	2,500
Other non-current liabilities	7	-	-
Total non-current liabilities	3,257	2,500	2,500
Current liabilities
Short-term borrowings	150	800	800
Liabilities to Group companies	3,059	3,709	2,643
Other current liabilities	779	176	250
Total current liabilities	3,988	4,686	3,693
Total equity and liabilities	13,779	13,606	12,797

Note 1 - Accounting policies

This Interim report has been prepared according to 'IAS 34 Interim Financial Reporting' and 'The Annual Accounts Act'. The interim report for the parent company has been prepared according to the Annual Accounts Act - Chapter 9 'Interim Report'.

The Group's financial accounts and the parent company accounts have been prepared according to the same accounting policies and calculation methods as were applied in the preparation of the 2021 Annual & Sustainability Report. Disclosures in accordance with IAS 34.16A are presented in the financial statements and their accompanying notes, as well as in other parts of the interim report.

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Revenue streams
Subscription	2,847	1,979	7,671	5,787	7,932
Advertising	853	837	2,735	2,636	3,777
Licenses, royalities and other	159	152	408	516	694
Production	113	86	207	169	258
Total	3,972	3,054	11,021	9,108	12,661
Revenue recognition
at a point in time	159	152	408	516	694
over time	3,813	2,902	10,613	8,592	11,967
Total	3,972	3,054	11,021	9,108	12,661

Note 2 – Revenue recognition

Note 3 – Income from associated company Allente

Allente's subscribers and revenues declined in the quarter, and the Company's operating income included SEK 5m (138) of integration costs that were reported as items affecting comparability. Amortisation and depreciation charges for the period included SEK 86 m (83) of PPA-related charges. Viaplay Group's 50% share of Allente's net income of SEK 143m amounted to SEK 71m.

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Net sales	1,688	1,702	5,073	5,134	6,817
EBITDA before IAC	312	348	902	1,024	1,328
Depreciation and amortisation	-108	-107	-324	-325	-433
Operating income before IAC	205	241	578	699	895
Items affecting comparability (IAC)	-5	-138	-20	-423	-736
Operating income	200	103	558	276	159
Financial items	-15	-18	-36	-42	-55
Tax	-42	-18	-114	-49	-22
Net income	143	67	408	186	82
Viaplay Group 50% share of net income	71	33	204	93	41
Net debt	1,797	1,648	1,797	1,648	2,156
Total subscribers (thousand)	1,017	1,068	1,017	1,068	1,064

Note 4 – Discontinued and divested operations

The discontinued operations in 2021 comprised the non-scripted production, branded entertainment and events businesses that were divested during 2021. These businesses were part of the former Studios segment and reported as assets held for sale and discontinued operations since Q2 2020. The net income, assets and liabilities of the operations were reported in a separate line in the consolidated income statement and balance sheet. Splay One was divested on 6 April 2021 and the remaining discontinued studios businesses were divested on 30 September 2021. The total capital loss including transaction costs amounted in total to SEK -45m and was reported within discontinued operations. The NENT Studios UK content distribution business was sold to All3Media on 11 June 2021 and the divestment resulted in a capital loss (including transaction costs) amounting to SEK -74m which was reported within continuing operations.

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
External sales	-	148	-	614	615
Internal sales	-	7	-	60	60
Cost of sales	-	-127	-	-546	-548
Selling, Technology and administration expenses	-	-25	-	-123	-123
Other income and expenses	-	-40	-	-42	-42
Operating income	-	-37	-	-37	-38
Financial net & Tax	-	1	-	-3	-3
Net income, discontinued operations	-	-36	-	-40	-40

Note 5 – Number of shares

Viaplay Group AB has in total issued 78,442,244 number of shares.

Parent company	Class A Shares	Class B Shares	Class C Shares	Total
Number of shares as at 31 December 2021	532,572	77,439,153	470,519	78,442,244
Reclassification of Class A shares	-1,036	1,036	-	-
Share awards vested (LTI 2019)	-	255,891	-255,891	-
Reclassification of Class C shares	-	5,128	-5,128	-
Number of shares at 30 September 2022	531,536	77,701,208	209,500	78,442,244
Of which treasury shares	-	-6,782	-209,500	-216,282
Number of shares excl treasury shares as at 30 September 2022	531,536	77,694,426	-	78,225,962

The Annual General Meeting in May 2022 approved a share-based long-term incentive plan (LTIP 2022). The plan is performance-based and directed to around 115 participants across Viaplay Group. LTIP 2022 will vest in 2025 and is dependent on the achievement of two 3-year targets regarding Total Shareholder Return and Viaplay subscribers. The maximum number of B shares to be vested is 365,013. The LTIP 2019 programme expired in Q2 and 244,872 Class B shares were delivered to participants. The LTIP 2019 and LTIP 2021 programmes are described in more detail in Note 7 in the 2021 Annual & Sustainability Report.

Note 6 – Related party transactions

The Group has related party relationships between its subsidiaries, associated companies and joint ventures. All related party transactions are based on market terms and negotiated on an arm's length basis.

	Q4	FY	Q1	Q2	Q3	Q4	FY	Q1	Q2	Q3
(SEKm)	2020	2020	2021	2021	2021	2021	2021	2022	2022	2022
Nordic sales	3,182	12,003	2,982	3,070	3,049	3,505	12,606	3,233	3,442	3,539
International sales	-	-	-	2	5	48	55	91	282	433
Total net sales	3,182	12,003	2,982	3,072	3,054	3,553	12,661	3,324	3,725	3,972
- of which Viaplay	983	3,625	1,012	1,076	1,100	1,198	4,386	1,302	1,570	1,870
- of which Linear subscription & other	1,102	4,946	1,111	1,056	1,118	1,214	4,498	1,146	1,149	1,257
- of which Advertising	1,097	3,433	859	941	837	1,140	3,777	876	1,006	845
Operating income before ACI and IAC	426	978	163	244	80	121	607	-49	132	-171
Associated company income (ACI)	-35	100	47	9	34	-51	40	55	73	71
Operating income before IAC	392	1,077	210	253	114	69	647	6	205	-100
Items affecting comparability (IAC)	-275	2,109	-	-74	-	-	-74	595	-	-
Operating income	117	3,186	210	179	114	69	573	602	205	-100
Net income	-633	2,226	145	92	55	32	325	483	175	-86
Basic earnings per share (SEK)	-9.40	33.06	1.99	1.18	0.71	0.41	4.23	6.20	2.25	-1.10
Adjusted net income from continuing operations	432	957	231	266	179	189	864	39	212	-49
Adjusted earnings per share from continuing operations (SEK)	6.41	14.21	3.16	3.41	2.30	2.43	11.26	0.50	2.71	-0.63
Sales growth	-16.8%	-15.5%	-11.5%	17.1%	8.0%	11.7%	5.5%	11,5%	21.3%	30.0%
Organic growth	6.1%	0.1%	15.9%	31.3%	9.9%	12.4%	16.7%	9,9%	18,4%	25.4%
Operating margin before ACI and IAC	13.4%	8.1%	5.5%	7.9%	2.6%	3.4%	4.8%	-1.5%	3.5%	-4.3%
Operating margin	3.7%	26.5%	7.1%	5.8%	3.7%	2.0%	4.5%	18.1%	5.5%	-2.5%
Net debt	3,026	3,026	-777	-1,697	-1,392	-2,059	-2,059	-1,107	-1,636	546
Net debt/EBITDA 12 months trailing	2.2	2.2	-0.6	-1.2	-1.1	-2.1	-2.1	-1.4	-2.3	1.2
ROCE	15.5%	15.5%	14.5%	15.3%	14.0%	9.9%	9.9%	6.6%	5.7%	2.4%
Viaplay subscriber base ('000s)	3,020	-	3,147	3,287	3,608	4,005	-	4,783	5,549	6,428
- of which Nordic subscribers ('000s)	3,020	-	3,147	3,260	3,296	3,458	-	3,576	4,034	4,229
- of which International subscribers ('000s)				27	313	547	-	1,208	1,515	2,200
CSOV Sweden (25-59) %	21.6	22.5	22.5	21.3	20.4	22.0	21.7	21.3	22.2	20.1
CSOV Norway (25-59) %	16.9	15.8	15.3	15.3	17.0	20.2	17.2	16.6	19.9	17.6
CSOV Denmark (25-59) %	20.3	20.2	17.8	22.7	19.1	18.4	19.3	19.0	19.8	18.5
CSOL Sweden (12-79) %	39.4	40.7	39.0	39.2	40.1	40.1	39.6	43.5	44.7	43.7
CSOL Norway (10+) %1)	66.5	66.4	67.0	67.4	65.6	67.3	66.7	69.7	68.1	67.5

1) Previous definition of CSOL Norway 12+ should be CSOL Norway 10+

The purpose of Alternative Performance Measures (APMs) is to facilitate the analysis of business performance and industry trends that cannot be directly derived from financial statements. Viaplay Group is using the following Alternative Performance Measures:

• Change in net sales from Organic growth, Acquisitions/divestments and Changes in FX rates

• Operating income before associated company income (ACI) and items affecting comparability (IAC)

• Operating income before IAC

• Net debt and Net debt/EBITDA

• Capital Employed and Return on Capital Employed (ROCE)

• Adjusted net income and earnings per share

Reconciliation of sales growth

Since the Group generates the majority of its sales in currencies other than in the reporting currency (i.e. SEK, Swedish Krona) and currency rates have proven to be rather volatile, and due to the fact that the Group has historically made several acquisitions and divestments, the Company's sales trends and performance are analysed as changes in organic sales growth. This presents the increase or decrease in the overall SEK net sales on a comparable basis, allowing separate discussion of the impact of acquisitions/divestments and exchange rates.

Organic growth, i.e. sales growth adjusted for acquisitions/divestments and changes in FX rates, amounted to 25.4% in Q3 2022.

		Acquisitions/	Net sales adjusted for acquisitions/	Changes in	Net Sales adjusted for acquisitions/ divestments and changes in FX
Q3 (SEKm)	Reported Net sales	divestments	divestments	FX rates	rates
2022	3,972	-	3,972	-142	3,830
2021	3,054	-	3,054	-	3,054
Growth	918		918		776
Growth %	30.0%		30.0%		25.4%
					Net Sales
Nine months (SEKm)	Reported Net sales	Acquisitions/ divestments	Net sales adjusted for acquisitions/ divestments	Changes in FX rates	adjusted for acquisitions/ divestments and changes in FX rates
2022	11,021	-	11,021	-329	10,692
2021	9,108	-48	9,060	-	9,060
Growth	1,913		1,961		1,632
Growth %	21.0%		21.6%		18.0%

Reconciliation of operating income before associated company income (ACI) and items affecting comparability (IAC)

Operating income before associated company income (ACI) and items affecting comparability (IAC) refers to operating income after the reversal of material items and events related to changes in the Group's structure or lines of business, which are relevant for understanding the Group's development on a like-for-like basis. This measure is used by management to follow and analyse the underlying profits and to offer more comparable figures between periods.

Operating income before IAC and associated company income

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Operating income	-100	114	707	503	573
Items affecting comparability (IAC)	-	-	595	-74	-74
Operating income before IAC	-100	114	112	578	647
Associated company income (ACI)	71	34	200	91	40
Operating income before ACI and IAC	-171	80	-88	487	607

Items affecting comparability

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Capital loss from divestment of NENT Studio UK and write down Studio assets	-	-	-	-74	-74
Settlement of court cases	-	-	595	-	-
Total	-	-	595	-74	-74

Items affecting comparability classified by function

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Cost of sales	-	-	-	-	-
Administrative expenses	-	-	-	-	-
Other operating income and expenses	-	-	595	-74	-74
Total	-	-	595	-74	-74

Reconciliation of net debt/EBITDA ratio

Net debt refers to the sum of interest-bearing liabilities less total cash and interest-bearing assets. Net debt also includes lease liabilities net of sublease receivables and dividends payable. Net debt is used by Group management to track the indebtedness of the Group and to analyse the leverage and refinancing needs of the Group. The net debt to EBITDA ratio provides a KPI for net debt in relation to cash profits generated by the business, i.e. an indication of a business' ability to pay its debts. This measure is commonly used by financial institutions to rate creditworthiness. A negative figure indicates that the Group has a net cash position (cash in excess of interest-bearing liabilities).

Net debt

	31 Dec	31 Mar	30 Jun	30 Sep	31 Dec	31 Mar	30 Jun	30 Sep
(SEKm)	2020	2021	2021	2021	2021	2022	2022	2022
Short-term borrowings	1,260	50	800	800	800	800	150	150
Long-term borrowings	3,300	3,300	2,500	2,500	2,500	3,400	3,250	3,250
Total financial borrowings	4,560	3,350	3,300	3,300	3,300	4,200	3,400	3,400
Interest bearing receivables	-	-	40	40	20	20	20	20
Dividend receivable - Allente	-	-	-	-	-	-	100	-
Short-term investments	-	-	-	-	-	-	-	100
Cash and cash equivalents	2,036	4,604	5,415	5,014	5,702	5,642	5,254	3,065
Cash and cash equivalents included in assets held for sale	4	26	5	-	-	-	-	-
Financial net debt	2,520	-1,280	-2,160	-1,754	-2,422	-1,462	-1,974	215
Lease liabilities	566	569	539	534	522	508	487	479
Lease liabilities included in liabilities related to assets held for sale	120	122	102	-	-	-	-	-
Sublease receivables	181	188	178	172	158	153	149	148
Total lease liabilities net	505	504	463	362	364	355	338	331
Net debt	3,026	-777	-1,697	-1,392	-2,059	-1,107	-1,636	546

Net debt/EBITDA before IAC

	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
(SEKm)	2020	2021	2021	2021	2021	2022	2022	2022
Operating income before IAC, continuing operations	1,077	1,069	1,111	969	647	443	395	181
Operating income before IAC, discontinued operations	-12	-20	-10	2	8	16	3	0
Depreciation, amortisation and write-downs, continuing operations1)	267	264	264	267	296	294	292	292
Depreciation, amortisation and write-downs, discontinued operations1)	48	47	44	42	30	19	10	0
EBITDA 12 months trailing	1,379	1,359	1,409	1,280	980	772	700	473
Net debt	3,026	-777	-1,697	-1,392	-2,059	-1,107	-1,636	546
Total net debt / EBITDA 12 months trailing	2.2	-0.6	-1.2	-1.1	-2.1	-1.4	-2.3	1.2

1) Refers to non-current assets only

Reconciliation of Return on Capital Employed (ROCE)

Return on capital employed is a performance measure for operating income before items affecting comparability in relation to the capital employed within the operations. Operating income before items affecting comparability is the main profit metric that operations are responsible for, and is measured before interest and taxes. Capital employed is the sum of current and non-current assets less current and non-current liabilities, provisions and liabilities at fair value. All items are non-interest-bearing. Capital employed equals the sum of equity and net debt.

Return on Capital Employed (ROCE)

	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
(SEKm)	2020	2021	2021	2021	2021	2022	2022	2022
Inventories	2,614	2,900	3,009	3,252	3,543	3,869	4,181	4,629
Accounts receivable	789	947	899	1,089	847	924	1,117	1,023
Prepaid expense and accrued income	3,998	4,076	4,238	4,196	4,990	4,888	6,682	6,979
Other current assets	682	290	406	261	350	373	676	843
Other current liabilities	-6,124	-5,155	-6,245	-5,498	-6,772	-5,733	-8,485	-7,207
Total working capital	1,959	3,057	2,307	3,300	2,958	4,321	4,171	6,267
Intangible assets	1,998	2,031	1,998	1,992	1,981	2,001	1,984	1,972
Machinery, equipment and installations	96	120	131	148	163	168	162	163
Right-of-use assets	360	350	330	335	321	313	295	290
Shares and participations	1,720	1,599	1,577	1,495	1,328	1,445	1,382	1,474
Other long-term receivables	176	133	127	115	124	127	155	130
Capital employed held for sale	635	614	498	-	-	-	-	-
Provisions	-322	-339	-351	-360	-372	-255	-270	-239
Other non-current liabilities	-360	-280	-256	-213	-238	-262	-270	-238
Other items included in the capital employed	4,304	4,227	4,054	3,512	3,306	3,538	3,438	3,552
Capital employed	6,263	7,284	6,361	6,812	6,264	7,858	7,609	9,819
Operating income before IAC 12 months trailing, continuing operations	1,077	1,069	1,111	969	647	443	395	181
Operating income before IAC 12 months trailing, discontinued operations	-12	-20	-10	2	8	16	3	0
Operating income before IAC 12 months
trailing, total	1,065	1,049	1,101	971	655	459	398	181
Average Capital Employed (5 quarters)	6,864	7,205	7,199	6,933	6,597	6,916	6,981	7,673
ROCE %	15.5%	14.5%	15.3%	14.0%	9.9%	6.6%	5.7%	2.4%
Assets held for sale	1,299	1,352	846	-	-	-	-	-
Cash and cash equivalents included in assets held for sale	-4	-26	-5	-	-	-	-	-
Liabilities related to assets held for sale	-781	-834	-446	-	-	-	-	-
Lease liability, included in liabilities
related to assets held for sale	120	122	102	-	-	-	-	-
Capital employed held for sale	635	614	498	-	-	-	-	-

Adjusted net income from continuing operations

Adjusted net income and earnings per share are the Group's net income and EPS from continuing operations when excluding items affecting comparability and the amortisation of acquisition-related intangible assets, net of tax, for both Viaplay Group and its 50% share in the earnings of Allente. These performance measures provide a relevant metric to better understand the Group's underlying results and development. Please see note 3 for more information on Allente's performance and page 17 regarding Viaplay Group's items affecting comparability.

			Nine	Nine	Full
	Q3	Q3	months	months	year
(SEKm)	2022	2021	2022	2021	2021
Net income, continuing operations	-86	91	573	333	365
Adjustment items	37	88	-369	342	499
Adjusted net income from continuing operations	-49	179	204	675	864
Basic average number of shares outstanding	78,225,962	77,947,526	78,107,558	76,316,757	76,731,753
Adjusted earnings per share from continuing operations (SEK)	-0.63	2.30	2.61	8.85	11.26
Adjustment items
Viaplay Group
IAC	-	-	595	-74	-74
Tax effect on IAC	-	-	-113	-	-
Amortisations of surplus value (PPA)	-1	-2	-4	-6	-8
Tax effect on amortisations of surplus value (PPA)	0	0	1	1	2
Allente
IAC	-2	-69	-10	-212	-368
Tax effect on IAC	-	15	2	46	80
Amortisations of surplus value (PPA)	-43	-42	-129	-125	-167
Tax effect on amortisations of surplus value (PPA)	9	9	27	27	36
Adjustment items	-37	-88	369	-342	-499

Associated company income (ACI)

Associated companies are companies in which the Group holds voting rights of at least 20% and no more than 50%. Associated company income is the Group's share of the associated company's net income.

Capital employed

Capital employed is the sum of current and non-current assets less current and non-current liabilities, provisions and liabilities at fair value. All items are non-interest-bearing.

Commercial Share of Listening (CSOL)

CSOL comprises Viaplay Group's estimated share of commercial radio listening amongst 10+ year olds in Norway and 12-79 year olds in Sweden.

Commercial Share of Viewing (CSOV)

CSOV comprises Viaplay Group's estimated share of commercial TV viewing amongst 25-59 year olds.

Earnings per share

Earnings per share is expressed as net income attributable to equity holders of the parent divided by the average number of shares outstanding.

EBITDA

EBITDA is Earnings Before Interest, Taxes, Depreciation and Amortisation.

Items Affecting Comparability (IAC)

Items Affecting Comparability refer to material items and events related to changes in the Group's structure or lines of business, which are relevant for understanding the Group's development on a likefor-like basis.

Net debt

Net debt is the sum of short and long-term interest-bearing liabilities less total cash and interestbearing assets. Net debt also includes lease liabilities net of sublease receivables and dividends payable. A negative figure indicates that the Group has a net cash position (cash in excess of interest-bearing liabilities).

Operating expenses

Operating expenses comprise Cost of sales, Selling and marketing expenses, and Administrative expenses, and exclude Items Affecting comparability.

Operating income

Operating income comprises results before interest and taxes, otherwise known as EBIT (Earnings Before Interest and Taxes).

Organic growth

Organic growth is the change in net sales compared to the same period of the previous year excluding acquisitions and divestments and adjusted for currency translation and transaction effects.

Return On Capital Employed (ROCE) %

Return on capital employed is calculated as operating income as a percentage of average capital employed.

Viaplay subscribers

A Viaplay subscriber is defined as a customer who has access to Viaplay and for whom a method of payment has been provided. Viaplay Group only reports paid-for subscriptions where a payment has been received directly from the end-customer or from a partner organisation.

Financial calendar

Capital Markets Day 9 November 2022 Publication of Q4 Full year report 14 February 2023

Contact

press@viaplaygroup.com (or Roberta Alenius, Head of Corporate Communications: +46 70 270 72 17) investors@viaplaygroup.com (or Matthew Hooper, Chief Corporate Affairs Officer: +44 7768 440 414)

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Viaplay Group Ringvägen 52, PO Box 17104 104 62 Stockholm, Sweden viaplaygroup.com @viaplaygroup

Viaplay Group AB (publ) is the international streaming challenger. Our Viaplay streaming service is available direct-toconsumer in every Nordic and Baltic country, Poland and the Netherlands, and we are expanding rapidly by launching in the UK in 2022, followed by the US, Canada, Germany, Austria and Switzerland in 2023. Viaplay will have a market presence in at least 21 countries by the end of 2023, including at least five partner markets for the Viaplay Select branded content concept. Every day, millions of customers enjoy our unique entertainment offering, including acclaimed Viaplay Originals and an unrivalled line-up of premium live sports. 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 and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on 25 October 2022.

This interim report contains statements concerning, among other things, Viaplay Group's financial condition and results of operations that are forward-looking in nature. Such statements are not historical facts but, rather, represent Viaplay Group's future expectations. Viaplay Group believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions; however, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. Such important factors include but may not be limited to Viaplay Group's market position; growth in the streaming industry; and the effects of competition and other economic, business, competitive and/or regulatory factors affecting the business of Viaplay Group, its group companies and the streaming industry in general. Forward-looking statements apply only as of the date they were made and, other than as required by applicable law, Viaplay Group undertakes no obligation to update any of them in the light of new information or future events.

Viaplay Group UK www.viaplaygroup.com @viaplaygroup +44 (0)20 8742 5100 Company no: 2228654