NENT Group Annual and Sustainability Report 2020
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Nordic Entertainment Group | 2020 Annual & SustainabilityReport Telling stories Touching lives Expanding worlds 2020 Annual & Sustainability Report Contents This is NENT Group At a glance 1 2020 highlights 2 CEO’s statement 4 Who we are 8 A sustainable strategy 10 Our story 12 Our people 18 Sustainability 24 The NENT Group Share 41 Governance report 45 Governance and responsibility 46 Internal controls 50 Board of Directors 52 Group Executive Management 54 Risks and risk management 57 Remuneration report 61 Administration report 64 Financial statements 73 Notes to the accounts 82 Signatures 122 Auditor’s report 123 Historical overview 127 Alternative performance measures 128 Sustainability reporting 131 Other Definitions & Glossary 155 Financial calendar 155 Addresses 156 About this report The statutory Annual Report covers pages 64–122, 57–59. The Sustainability Report (including the statutory sustaina- bility report) covers pages 18–40, 49, 59, 132–153. NENT Group reports its sustainability work according to GRI Standards – Core option. The Annual & Sustainability Report is published in Swedish and English. The Swedish version is the original and shall apply in any instance where the two versions differ. CEO’s Our strategy Our people Sustainability The share Governance Remuneration Administration Financial Sustainability statement and story report report report statements reporting At a glance NENT Group is the Nordic region’s leading entertainment provider and streaming company, with the broadest Viaplay subscriber base 1) and most relevant content offering, excellent content Thousands 4,000 discovery and a stable and scalable technology platform. 3,000 3,000 Our ambition is to be the European streaming champion, 2,300 2,000 1,900 and Viaplay will be rolled out to 10 inter national markets 1,000 between the beginning of 2021 and the end of 2023. 0 2018 2019 2020 1) Paying subscribers (including subscribers that have access to Viaplay through traditional pay-TV packages) Net sales EBIT before Number of employees Nationalities (SEKbn) IAC (SEKm) at the end of 2020 in our team 12.0 1,077 1,708 45+ CEO’s Our strategy Our people Sustainability The share Governance Remuneration Administration Financial Sustainability statement and story report report report statements reporting Viaplay subscribers 3 million 2020 highlights Viaplay launched 2020 was an unprecedented year in many ways. Financial highlights in Iceland Not only did we manage our way through the • Net sales increased by 0.1% on an organic basis to on 1 April Coronavirus pandemic, but we also completed the SEK 12,003m. Viaplay revenues accounted for 30%, Other subscriptions for 39%, Advertising for 29% merger of Viasat Consumer and Canal Digital, and Studios for 2% of Group sales. Viaplay raised our Viaplay subscriber intake target three • Viaplay paying subscribers increased by 748k or subscriber growth times, launched Viaplay in Iceland, announced 33% to 3,020k following high intake and low churn the expansion of Viaplay internationally, secured levels. Viaplay sales increased by 11% on an organic 33% basis to SEK 3,625m despite the lowering of sports multiple long-term sports rights, premiered 30 prices for more than three months during the new Viaplay originals, signed multiple long-term Corona virus pandemic lockdown. Viaplay Originals • Operating income before associated companies premiered distribution partner ship deals, teamed up with and items affecting comparability amounted to Elisa in Finland, delivered on our cost-cutting 30 SEK 978m. This represents a 13% decline when programme, announced new five-year financial excluding the contribution of Viasat Consumer, targets and launched an updated reporting which was deconsolidated from the beginning of Minutes of May 2020. Operating income before items affecting viewing on Viaplay structure. We will come out of this crisis even compara bility amounted to SEK 1,077m. stronger and better positioned than before. 57 billion The credit for this goes to the fantastic dedication and focus of our teams during Growth in viewed these challenging times. minutes on Viaplay 30% 2 CEO’s Our strategy Our people Sustainability The share Governance Remuneration Administration Financial Sustainability statement and story report report report statements reporting Cryptid Strategic highlights Sustainability highlights • NENT Group implemented a SEK 700 million cost • NENT Group has worked to safeguard the health savings programme to offset the effects of the and wellbeing of our people during the Coronavirus Coronavirus pandemic, ensure that jobs were pandemic. This has been done by taking early and safeguarded, and enable continued investment in decisive action to have most of our people work from the content and technology that will drive growth. home, by ensuring access to virtual meeting and • The 50/50 merger between Viasat Consumer and digital interaction tools, by ensuring a safe working Canal Digital was completed and created the environment for those who do need to come into the large scale player Allente that can compete on office, and by providing relevant support networks a Nordic level, generate substantial cost synergies, and regular information updates throughout the and enable the upselling of Viaplay to the Canal year. We have also used our platforms to raise Digital subscriber base. awareness about how to fight Covid-19 together. • NENT Group secured the exclusive Swedish, • NENT Group has continued to raise awareness of Norwegian, Danish and Finnish media rights to the benefits of equality, diversity and inclusion (EDI) the English Premier League, the world’s leading by launching and implementing an EDI strategy. Our national football league, in a ground breaking people have participated in Equality workshops and six year deal that runs from 2022 to 2028. EDI is being integrated into our content offering and • NENT Group and Elisa combined their streaming the work of attracting new viewers. services in Finland, to enhance their content offer- • NENT Group has accelerated its environmental work ings and deliver accelerated subscriber growth. during the year, which included committing to the NENT Group is responsible for the service’s tech- Science Based Targets Initiative in order to align its nology and analytics, while Elisa handles sales, greenhouse gas emissions targets with the objectives marketing and customer support. of the Paris Agreement. 3 CEO’s Our strategy Our people Sustainability The share Governance Remuneration Administration Financial Sustainability statement and story report report report statements reporting CEO’s statement 2020 was an extraordinary and challenging year in many ways, a year that will change many things forever, including how we work together, look after each other, society, and the environment. Our strategy, resilience, flexibility, and culture have all been put to the test, and it is great to see that NENT Group will emerge from this crisis stronger, more sustainable, better positioned and better prepared for the future. We have gone further by dramatically accelerating our transformation during 2020, and setting clear goals to become the European streaming champion and one of the most diverse and equal companies in the global entertainment industry. 4 CEO’s Our strategy Our people Sustainability The share Governance Remuneration Administration Financial Sustainability statement and story report report report statements reporting 2020 was a year in which we all faced new challenges and found new ways of working. The safety and wellbeing of our people has been our greatest priority, and we took early and decisive actions to protect the business and ensure that we would bounce back quickly once the environment improved. We have entertained millions of people at home during this period and accelerated our transformation towards our goal of being the European streaming champion. Our strategy is all about sustainable development and the creation of long-term value for all stakeholders. This is our second integrated financial and sustainability The impacts on our business have been very different. report as a listed company, and it is integrated because On the one hand, people staying at home led to a signifi- our financial planning and performance walk hand in hand cant acceleration in the growth of Viaplay, as we raised with our sustainability strategy and ESG performance. That our subscriber growth target three times and ended the is how we develop our strategy and run our business, in year by meeting our milestone of 3 million paying Viaplay order to generate long term sustainable value for our subscribers. This represented a growth of 33%, and the owners, employees, customers and all stakeholders. average number of minutes viewed over the year was 2020 proved just how relevant, resilient, and flexible also up more than 30%. Churn remained at low levels as NENT Group is. We acted early and decisively when the subscribers watched a wide range of new Viaplay con- Coronavirus impacted, in order to keep everyone safe and tent, including the premieres of 30 new Viaplay original healthy, to entertain our customers at home, to reduce productions. We had over 80 original productions on prices when certain content was not available, and to Viaplay by the end of the year and will definitely pass the reduce all non-essential costs so that we could safeguard 100 originals milestone in 2021 as we premiere a further all jobs. These actions included a 700 million cost saving 40 new titles.