“Moving forward, our company will be different.”

That was the vow of Viaplay Group President and CEO Jørgen Madsen Lindemann to shareholders in the troubled European streamer’s latest annual report, which released this morning in Europe and showed huge 2023 losses despite revenue growth. Viaplay faced extinction last year after struggling to build subs in territories such as the U.S., the Baltics and the UK, and being hit badly by the tough global economy.

However, it has been restructuring under Madsen Lindemann, who was parachuted in midway through the year to set a new course achieved through staff cuts, asset sales and a heavy recap program that reduced shareholder value to almost nothing.

Today, he said the recovery was underway, albeit that the “complexity of exiting” its non-core international markets was holding up several commercial and led to higher than expected losses. “We are dedicated to building businesses in our core markets that are resilient, disciplined and high­ performing,” he added. “We have delivered all this before, and we aim to do so once again.”

Despite its challenges, Viaplay actually posted 2023 net sales up in the Nordics and across the group. Nordic revenues organically grew 7% to SEK15.6B ($1.5B), with international sales of SEK3B, meaning a 13.2% rise overall. This was the result of “rising ARPU levels, a much-improved content mix and increased content sales to third-party platforms,” according to Madsen Lindemann. Viaplay streaming revenues accounted for a majority of the growth, up 36.4% year-on-year to SEK9.9B.

The tough TV ad market saw advertising sales fall 8%, with AVOD digital growth failing to offset linear TV and radio falls. Advertising accounts for about 30% of Viaplay’s business, with linear subscriptions and other smaller segments making up another 19%. The Viaplay streaming service accounts for 51%, with the core markets being the Nordics and The Netherlands.

Despite the positive sales numbers, Viaplay took an operating loss before associated company income (ACI) and items affecting comparability (IAC) of SEK1.1B, significantly up from the SEK372M lost the year before. When ACI and IAC were factored in, the loss ballooned to SEK10.3B.

Viaplay had 6.5 million subscribers at year-end 2023, down on the previous year when it was operating in more territories (plus the company reset its subs base to exclude ‘campaign subscribers’). About 4.1 million subs come from the Nordics, though about 519,000 subs were lost there, with another 298,000 lost internationally. This was due to “the termination on unprofitable marketing campaigns combined with churn and general uncertainty in the international markets Viaplay Group has announced its exit from.”

In 2024, Viaplay is targeting net sales for its core Nordic, Dutch and Viaplay Select operations of between SEK17.2B-17.8B. It is estimated operating incoming will fall somewhere between a loss of SEK250M and profit of SEK50M, significantly better than in 2023. Non-core sales will make up to SEK1B as they are divested.

“Looking ahead, we are aiming for our core operations to deliver long-term annual sales growth in the low to mid-single-digit percentage range, double-digit operating profit margins in approximately five years and aim to deliver positive free cashflow in 2025,” said Madsen Lindemann. “We expect the whole Group, including the international non-core operations, to be free cashflow positive in 2027.”

The five-year double-digit target was first unveiled in January

Viaplay has already sold its CEE production division Paprika Studios, while the sale of UK-based Premier Sports is close to completing. North American streaming operations discontinued recently, while a live sports portfolio in the Baltics has been sublicensed, with subs being transferred this month. An exit from Poland will follow in summer 2025.

“Too many of the past investments made by the group did not materialise as planned, as several of the business cases on which they were based proved to be too optimistic,” said Viaplay Interim Chairman Simon Duffy. “Significant adjustments were therefore required to the group’s strategy, structure and operating model.”

Viaplay cut 25% of its staff last year as it fought to survive, and then set about a new recapitalization plan that completed this year. It was a tough pill to swallow for many shareholders, who saw the value of their investments reduced to almost nothing. “I must emphasise that the package was absolutely necessary to secure the survival of the business and was built on considerable concessions by all our stakeholders,” said Duffy.

Around the same time, France’s Canal+ and Czech investment firm PPF both swooped to acquired 29% stakes in the business. “The fact that new strategic owners chose to invest in Viaplay Group during the second half of 2023 reflects the potential of the business and our market positions,” said Duffy.

“Equally importantly, it marked a new beginning for Viaplay Group. We now have a path to reinforce our position as the Nordic region’s leading entertainment provider. This is a position we have held for decades. Under new and strength­ ened leadership, and with stakeholder support, we can build a prosperous future for Viaplay Group.”