Nordic Entertainment Group (NENT Group), the Nordic region's leading streaming company, has set a new goal to become the European streaming champion, the company announced today.
NENT Group's Viaplay streaming service will be rolled out in 10 international markets by the end of 2023, including Estonia
and the US in 2021. By the end of 2025, NENT Group aims to increase its subscriber base to approximately 10.5 million by more than doubling its Viaplay paying subscriber base in the Nordics to approximately 6 million and growing its international subscriber base to approximately 4.5 million.
This acceleration in the Group's development is expected to generate 18-20% compound annual organic sales growth for 2020-2025, with the Nordic operations generating 13-15% growth. The Nordic operations are expected to have a significantly higher EBIT margin of approximately 15% in 2025, with the 10 international markets being EBIT profitable on a combined basis in 2025. The Group is considering funding the expansion with an equity raise that would also be intended to increase the liquidity in the Group's shares.
Anders Jensen, NENT Group President & CEO: "Viaplay is a proven Nordic success story and we are now ready to expand internationally and become the European streaming champion. We have one of the world's most flexible and scalable technology platforms and aim to be the most diverse and inclusive storyteller with our amazing range of original, acquired, local and live content that offers something special for everyone. We have already signed up key content rights in our target markets and are in discussions with distributors about exciting new partnerships to ensure that Viaplay is available everywhere."
"This expansion requires funding and we will be discussing this with our shareholders. The growth and profitability targets that we are presenting today illustrate the unique and significant potential of our existing Nordic business and future international operations. The time is right to seize this major opportunity that we have in front of us, given the continued growth in streaming and ever-increasing demand for high-quality and locally relevant entertainment. We are ready. We have the platform, we have the operational model, we have the content and, most importantly, we have the team."
Viaplay will be launched in Estonia, Latvia and Lithuania, as previously announced, in March next year. This follows the successful launch of Viaplay in Iceland earlier this year. Viaplay will then be launched in Poland in August 2021 and offer Nordic, local and international content, as well as live sports such as Bundesliga football (2024-25 season). 25% of Poland's 13.8 million households currently have a streaming subscription, and this is expected to grow to well over 40% in 2025, with the current average of 1.5 subscriptions per household also expected to increase.
In late 2021, Viaplay will be launched in the US as a tailored service offering high-quality Nordic drama series. The US is the world's largest streaming market with 300 million subscriptions, 80% household penetration, and an average of three subscriptions per household, all of which are expected to grow further in the coming years.
Viaplay will be launched in an additional five European markets by the end of 2023 and is expected to attract approximately 4.5 million international subscribers by the end of 2025. NENT Group's international operations, which will be reported separately from Q1 2021, are expected to be EBIT profitable in 2025 with accumulated combined losses to breakeven of approximately SEK 2.5 billion.
In the Nordic region, NENT Group aims to double its Viaplay subscriber base to approximately 6 million by the end of 2025, by which time 80% of the region's 12.7 million households are expected to have an average of three streaming services, compared to 60% and two services today. This growth will be driven by NENT Group's unique offering of original and acquired content, as well as the anticipated high growth in the number of sports subscribers as Viaplay adds key rights such as Premier League football in Norway and Formula 1 in Finland in 2022. The 13-15% compound annual organic revenue growth for 2020-2025 for the Nordic operations will be driven by both subscriber growth and rising ARPU levels, with the Nordic EBIT margin expected to increase to 15% in 2025.
In order to fund these strategic initiatives, NENT Group will consult with its shareholders regarding a potential equity raise of more than SEK 3.5 billion, which would also be intended to attract new investors and research coverage, align the Group with its global streaming peers, raise the Group's international visibility and profile, and increase the trading liquidity in the Group's shares. In this context, NENT Group is also considering a potential secondary listing in the US, as well as the most appropriate capital structure and distribution policy moving forward.