Viaplay Group AB (publ) (VPLAYB) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Thank you for holding. [Operator Instructions] I will now hand the call over to your host, Matthew Hooper, NENT Group Chief Corporate Affairs Officer. Please go ahead, sir.

Thank you very much, operator, and welcome, everybody, to our Q4 and full year 2020 results conference call. We hope you're all well and managing your way through these challenging times in which we are living. I'm joined here on the call today by our President and CEO, Anders Jensen; our CFO, Gabriel Catrina; and Joel Gedin from our Investor Relations team. Presentation materials are available on our website as usual, and a Q&A session will follow our comments. I will now hand the call over to Anders.

Thank you very much, Matthew, and good morning, everyone. Thanks for dialing in today. We finished what was a very challenging 2020 strongly with 6% organic growth and a 22% underlying increase in profits; 33% Viaplay subscriber growth to hit our year-end target; and we've also set a very clear path for our expansion and development over the next 5 years. Despite the impact of the coronavirus pandemic on our live sports coverage, studio production schedules and advertising sales, our full year organic sales were slightly up, and our underlying full year profits, when excluding the contribution from the now deconsolidated Viasat Consumer business, we're down less than 13%, following the cost-saving programs that we put in place quickly when the crisis hit early 2020. This shows just how relevant, resilient and flexible our business is and how important our strategic focus on the fast-growing Viaplay business is. The pandemic has impacted our business in people -- and people in many ways in 2020. Now we have always maintained a very clear focus on protecting the health and well-being of our people, while also using our services to inform and entertain our customers and building a company that is better prepared than ever for the future. The pandemic remains a constant in all of our lives for now, and we are working to ensure that the positive elements of our new ways of working will improve our lives, society and hopefully, the environment, for the long term. This is why we have signed up to the Science Based Targets initiative, and are carefully considering what the new normal will look like for NENT now that we've proven the effectiveness of our remote working solutions. I'm also personally very proud of the progress that we have made to become an even more equal, diverse, inclusive and values-based organization. This approach and culture enables us to make better decisions, be more creative, engage more widely and provides our people with an even greater motivation, sense of belonging and purpose, all of which is essential if we are to achieve our goal of becoming the European streaming champion. Our direction of travel as a business has never been clearer. More than 30% of our sales in Q4 and for the full year came from subscription-based streaming, and this is where our future lies. I talked at our last results about just how important it is that we seize the opportunity, not only to grow the streaming market and our share in the Nordics, but also to expand Viaplay internationally and seek new horizons. We presented our plans at our Capital Markets Day, and we have met with over 70 shareholders or potential investors before the end of the year to discuss those plans. The EGM approval 2 weeks ago will now avail -- enable us to raise the money to finance the expansion and maintain an attractive leverage profile. Now let me turn to what we're seeing across our operations, and I will start with Viaplay, where we've added 207,000 new subscribers in Q4 and just under 750,000 in the year, to end December just above our target of 3 million, up 33% year-on-year. The growth in the quarter was primarily driven by the B2B sales channels and the TM package and our deal with Allente, in particular. Allente and other B2B providers ran very successful pre-Christmas campaigns that boosted our subscriber base towards the end of the quarter. Churn remained at an all-time low and industry competitive levels. Stream minutes on Viaplay were up, slightly above 30% overall, with viewing of our award-winning originals up an amazing 90%. We also maintained a very high level of service accessibility with an uptime on the platform of 99.97% and 56 billion minutes streamed on Viaplay in 2020. The subscriber growth levels that we have seen in 2020 were exceptional and have probably advanced our business development by a couple of years. And as I've said before, the market shares of tomorrow are being handed out today, which is why we have been so determined to seize this opportunity. The partnerships that we have forged with the likes of Allente and Elisa are driving today's subscriber growth and will deliver the revenue growth of tomorrow as subscribers move beyond the initial campaign periods. As before, our Viaplay revenue growth is lower than our subscriber growth, which reflects the higher B2B and TM mix. And the fact that a significant proportion of the subscribers were brought in late in the quarter with Christmas campaigns, lower Viaplay store sales, due to the substantially lower number of new movie releases as a consequence of the pandemic, and the 3 percentage points of currency translation effect due to the weakness of the Danish and Norwegian krone. The organic revenue growth was 14% in the quarter and 11% for the year. We premiered 12 new Viaplay Originals in the quarter. We have more than 70 full series originals on the platforms. And the total viewing of our Viaplay Originals was, as I mentioned, up a very strong 90%. Four of the top 10 scripted series on Viaplay in Q4 were Viaplay Originals. Locally relevant originals are a key differentiator for us. We have seen clearly now how the success of second seasons, like the -- of shows like Love Me, can create renewed interest in the first seasons. Lyckoviken, by Camilla Läckberg, was one of the most successful launches in Q4, and we have already launched a second season in January. While Josephine Bornebusch's social distancing movie, Orca, shows how quickly we can get relevant content on screen, even during a pandemic. We premiered a total of 30 originals in 2020 and expect a further 40, including documentaries, in 2021. We have announced a large number of upcoming originals, including the third season of Lars von Trier's hugely popular drama, THE KINGDOM. On the Sports side, we have added and extended a number of attractive new rights for both our existing and new markets, including a 5-year extension of the NHL and the addition of the 2023 women's football World Cup for the Nordics. The Bundesliga for Poland, the Champions League for Iceland and the Baltics, and in a groundbreaking new agreement the rights to the men's national football team, UEFA tournament qualifiers in Iceland. This is a first of its kind deal for UEFA with a pure-play OTT service. Looking forward into this year, we expect to add a further 400,000 paying subscribers in the Nordics and 250,000 new subscribers in our new international markets. Iceland has continued to perform very well. And we will now launch in the Baltics next month, on March 9 as planned; in Poland in August; and in the U.S. at the end of the year. Given how well our content and platform are performing in the Nordics, the volume of exciting new functions and content we're adding, including the FIS Ski, UEFA rights, 40 new originals and fully integration of StarzPlay, we will raise prices for the TM package initially, with Sports to follow in due course. Timing is not confirmed yet, but bear in mind that we have not raised our TM package prices since 2017, and they are currently lower than some of our competitors who offer far less content and features. More broadly, and given the substantial steps that we have taken, we see no reason why we should not be the price leader rather than a follower. This is all part of the existing plan and targets that we have laid out at our Capital Markets Day in November, and part of the reason why we expect our Viaplay sales to grow faster in 2021 than our Viaplay subscriber base. We will separately disclose subs, sales and EBIT for the international Viaplay operations in the future. Turning now to our other subscriptions business. Organic sales were up 12% in the quarter, and 7% for the year when excluding the SEK 724 million of sales contributed in Q4 2019 by the Viasat Consumer business, which was deconsolidated from the beginning of May. Allente was the main contributor to growth in Q4. Moving forward into 2021, we expect healthy double-digit growth to be driven by relevant and needed price increases. All of our channels will be basic or premium paid channels in the future, with the expectation that no channels will be free-to-air. This means a change for TV6 in Sweden, which is all part of our strategy and reflect the quality of the content that we invest in. Moving on to our advertising business where the level of revenue decline due to the pandemic continued to improve, and organic sales were only down 1.3% in Q4. Reported sales were down 5.4% due to the strengthening of the Swedish krona. We estimate that we took market share in the quarter in each market, and especially in Sweden and Norway. The Swedish TV and radio ad markets are estimated to have been down, with the Danish TV ad market also down, while the Norwegian TV and radio markets are both estimated to have grown. Betting and gambling and travel ad spending continued to decline in Q4 with consumer goods, health care and telecoms increasing as a percentage of our total ad revenues. Sold out ratios were high as we handled the postponed campaigns from earlier in the year, and we saw higher year-on-year prices in the Swedish radio markets and the Danish TV market. Moving into 2021, we are working very closely with the agencies with whom we have a very good and long-term relationship on the annual agreements. Rate card prices are out with low single-digit price increases expected in Sweden, mid-single digits in Norway and mid to high single digit increases in Denmark. Commercial PUT levels are expected to continue to fall. So overall, and as it stands right now, a more positive outlook for 2021, especially in terms of the comparison for Q2. The pandemic has particularly affected our Studios business where sales for our continuing operations were down 21% on an organic basis and reflected the lower demand from external clients and linear TV operators. The postponement of productions, events and distribution deals due to the pandemic was the reason why we took the decision to impair the value of the nonscripted-branded entertainment, distribution and event businesses that we are selling. The sales process was slightly delayed by the pandemic, but is now on track and expected to be completed by the end of June. We are refocusing our remaining scripted content studios on the production of high-quality originals for Viaplay, and therefore, expect these studios to generate limited external sales moving forward, especially as we will increasingly keep the international rights to our formats for own expansion. The studios operations are now part of our content operations, and the Studio CEO is reporting to our Group Chief Content Officer in order to ensure that we get the very best of our in-house production capacities, which will primarily comprise Paprika in Budapest and Warsaw. We continue to work closely with FilmNation U.K., an LA-based picture start in which we own equity stake. Both of these companies have been heavily impacted by the pandemic and result in delays in production. Moving forward, we are considering no longer reporting Studios as a separate revenue line, but rather, integrating them into our other reporting. The final piece to discuss is our 50% participation in the Allente joint venture. After successfully raising SEK 2.5 billion in debt financing, Allente paid out their SEK 2.4 billion extraordinary dividend in Q4, of which we received SEK 1.2 billion. Our 50% share of Allente's net loss of SEK 67 million in Q4, is reported as associated company income. The loss reflected the previously flagged inclusion of a SEK 299 million PPA amortization charge and SEK 125 million of restructuring costs that Gabriel will walk you through later. The business continues to perform well, and the team is on track to deliver the annual cost synergies of approximately SEK 650 million as well as substantial sales synergies from the upselling of Viaplay and our V-channels to the Canal Digital subscriber base. Given the ongoing restructuring and noncash PPA amortization charges, we do not expect Allente to contribute much associated company income in 2021. But, and more importantly, Allente does plan to pay out quarterly dividends. Looking forward, we have announced and laid out our expansion plan, consulted with our major shareholders, and we secured 97% EGM approval for our proposed equity raise. Due to our investment plans and the equity raise, the Board has decided to propose the -- not to propose the payment of a dividend for 2020. We are now finalizing the Baltics launch, and we're preparing for Poland and the U.S. We will announce the other 5 international markets to be launched in 2022 and '23 in due course, and have indicated that our overall target is 15-plus markets in the next 5-plus years, with new launches to be announced on a regular basis. It is clearer by the day that the time is right for us to expand further and faster. The pandemic has just accelerated the consumer behavior trends that we have seen. Our highly competitive customer offering, unique content mix and high-quality user experience are well set to travel. And we have more and more inbound interest from current and potential suppliers and partners. We have provided 5-year targets and continue to expect our 2021 Nordic organic revenue growth to be within the projected CAGR range within Viaplay Nordic's revenue growth, including price increase and outstripping the 400,000 net subscriber growth. Nordic costs, will also rise, given the content investments we're making, but we do expect the underlying margin, excluding the Viasat Consumer contribution in 2020, to go up in 2021. On the international front, we expect 250,000 new subscribers, which does not include any substantial distribution deals, and losses of approximately SEK 400 million for the international segment in 2021. We expect rapid market penetration and a 3- to 4-year period to break even for our international operations, with strong operating leverage and high long-term margins -- higher long-term margins than in the Nordics. The models will vary market to market, depending on the opportunities that we see and we will continue to be very disciplined when it comes to managing our costs and exposure levels. Finally, we have moved our broadcast and streaming licenses from the U.K. to Sweden in order to provide a stable and consistent EU regulatory environment for our services, and we have seen little change as a result. That's it for my initial comments, so I will now hand the call over to Gabriel for his comments on our financial performance and position.

Thank you, Anders, and good morning, everyone. We reported 6.1% organic growth in Q4. The growth in Viaplay and our other subscription revenues more than offset the decline in our advertising and studio revenues. We ended the year strongly, and our sales were actually slightly up for the whole year on an organic basis. Currency translation effects again, played a large part this quarter with our reported sales up 2.6%, when excluding the contribution in Q4 2019 from the now deconsolidated Viasat Consumer business. Our operating profit, before associated company income and items affecting comparability, were up 22.1% to SEK 426 million from the equivalent SEK 349 million last year when excluding the SEK 111 million contribution from the now deconsolidated Viasat Consumer business. Our profits for the full year were only down 13% on the same basis. The SEK 250 million of cost savings from the programs that we introduced in October 2019 and when the crisis hit in March last year, have offset the ongoing content investments that we have made in 2020. Our operating income, including the previously announced noncash impairment charges of SEK 275 million, which relate to the studios operations that are now in the process of being sold. The total noncash impairment charges in the quarter amounted to SEK 895 million and included the SEK 620 million related to the discontinued studio operations. The total savings from the 2019 and 2020 programs amounted to SEK 900 million, as anticipated. The benefits from the government actions such as the furloughing of staff and lower social expenses amounted to SEK 7 million in the quarter and SEK 49 million for the full year, of which SEK 4 million and SEK 25 million, respectively, were related to discontinued operations. A few words now on Allente, which has continued to perform very well. Allente reported revenues of SEK 1.72 billion in Q4, with the subscriber base down 20,000 compared to Q3, ending at 1,133,000 subscribers. Allente's EBITDA, before items affecting comparability, amounted to SEK 348 million, with a margin of 20%. Allente's operating income of minus SEK 86 million, including SEK 125 million of integration costs that were reported as items affecting comparability as well as the SEK 289 million amortization of the now finalized purchase price allocation for the period from May to December. Moving forward, the full year amortization charge is expected to be approximately SEK 330 million each year until 2027. The majority of these charges are adjusted for deferred tax in the reporting, so have less impact on the Allente's net income which amounted to minus SEK 76 million in Q4. Our 50% share of minus SEK 38 million is reported as associated company income. Allente is on track to deliver the SEK 650 million of cost synergies and the continued upselling of Viaplay to the Canal Digital subscriber base. The migration of supply customers have started and is being scaled up after being delayed by the coronavirus crisis. The company is now entering the second phase of integration, and it's also preparing to launch a new packaging structure with Viaplay as a key component. The cost synergies, which will have a full effect in 2022 amounted to SEK 96 million in Q4 and SEK 150 million for the year, which was slightly higher than previously anticipated. We continue to expect approximately SEK 400 million of cost synergies this year. The integration and restructuring costs are still expected to total approximately SEK 900 million in 2020 and 2021, combined. But these were less than expected at SEK 202 million in 2020 due to the delays in the supply migration, and they totaled SEK 125 million in Q4. That leaves approximately SEK 700 million of IAC costs for this year. And with the costs and the PPA amortization, we do not expect a substantial amount of associated income in 2021. But the cash flow and the ability to pay dividends is the key factor for us. After securing SEK 2.5 billion of bank funding in July, and then they paid out an extraordinary dividend of SEK 2.4 billion in Q4, of which we received SEK 1.2 billion, and Allente plans to pay out a quarterly dividend moving forward of at least SEK 200 million, of which we will get 50% and had net debt of SEK 1.3 billion at the end of the year. Following this dividend, our cash flow from operations amounted to SEK 1.63 billion in Q4, and our net operating cash flow was also up to SEK 910 million, even with a negative SEK 720 million change in working capital in the quarter. The negative change in working capital for the year was SEK 674 million and therefore, lower than the SEK 800 million we guided for earlier. The reason for this is that various sports prepayments have been scheduled to be paid this year, and we also took the opportunity to pay all of the SEK 530 million of tax and social fees deferred during 2020 as part of the government support measures due to the impact of the coronavirus pandemic. This shift slightly changes our negative working capital expectation for 2021 from approximately SEK 800 million going up to approximately SEK 850 million, and reflects the investments that we're making in our future growth, including prepayments for new and prolonged sports rights as well as the slate of Viaplay Originals. We have absorbed approximately SEK 185 million of FX transaction headwinds in 2020, which is less than we expected when presenting our Q3 results, and this was due to the weakening of the U.S. dollar in Q4. Our transactional currency exposure is hedged on an average 16-month forward basis. And the strengthening of the Swedish krona against the U.S. dollar will, over time, benefit us, as we have approximately $350 million of content purchased annually in U.S. dollars. Based on the current market situation and currency levels and our exposure levels, we expect limited transactional currency effects in 2021. Our underlying effective tax rate in 2020 was 21.5%, and we expect the effective tax rate to be approximately 21% this year. We ended the year with net debt, including discontinued operations of SEK 3.03 billion, comprising financial net debt of SEK 2.52 billion, including cash and cash equivalents of SEK 2.04 billion, net lease liabilities and sublease receivables of SEK 505 million. Our net debt to trailing 12 months adjusted EBITDA ratio was 2.2x at the end of the year. We now have a new and even more balanced funding structure in place after a number of changes in 2020. We have SEK 3.3 billion of outstanding corporate bonds, with the first due date in May 2022. We also had SEK 1.26 billion of short-term commercial paper at the end of the year, and a newly arranged SEK 4 billion revolving credit facility that expires in December 2025, which complements our existing SEK 4 billion backup facility that expires in August 2023. Both were undrawn at the end of the year. And we also had the equivalent of SEK 280 million of undrawn overdraft facilities. The new equity raise will enable us to reduce our leverage, while we ramp up our investments in the expansion of the group and launch of Viaplay in new international markets. In this context, it is natural that we have suspended our annual dividend policy and payments for the time being. This, in order to focus our resources where we see the greatest potential value creation and returns on investment of the shareholders' money. In summary, we have continued to see sequential improvements in the market environment and our operating performance. We had a clear strategy of significant value creation opportunities in the Nordics and internationally, and we have continued to streamline our operations with a disciplined capital allocation approach. Our proactive group transformation and cost savings programs have positioned us well to manage the impacts of the corona crisis as well as to continue to invest in the future growth of our streaming operations. That is it for my comments. So now back to you, Anders.

Thank you very much, Gabriel. 2020 was indeed an extraordinary year for us all, and we are certainly not out of the woods yet. But we have seen a clear sequential improvement, and we ended the year strongly by meeting our subscriber target and delivering 6% organic sales growth and a 22% increase in underlying profit. We expect further healthy growth in 2021, and we raised the bar further by providing new 2021 subscriber targets and setting a series of 5-year financial targets. The swift and decisive actions that we took early in 2020 to adjust our consumer offerings and cost base in the face of the crisis have definitely paid off and enabled us to absorb the significant market impact. As a result, organic sales were up in 2020 and operating profits, excluding the now deconsolidated Viasat Consumer business, down less than 13%. And as I said before, this shows just how relevant, resilient and flexible our business is and the importance of our strategic focus on the fast-growing Viaplay business becoming the European streaming champion. We will maintain our clear focus on protecting the health and well-being of our people, while also using our services to inform and entertain our customers and building a company that is better prepared for the future and more sustainable than ever. We will continue to invest in the core drivers of our growth, our people, our platforms and our content and to strike innovative new partnerships so that we can capture the streaming opportunity that we see in front of us. Next up is the international expansion of Viaplay, and I look forward to keeping you updated with that. The credit for all that goes to our teams who have worked very effectively, despite the challenging circumstances, and to you all, for your continued belief in and support of our strategy and story. For that, thank you very, very much. That concludes our commentary on the results, and we will now be more than happy to take your questions. So over to you, operator.

[Operator Instructions] We will now take our first question. Please go ahead, announcing your name and company. Omar Sheikh, please ask your question.

Yes, I didn't realize it was me. I've got a couple of questions, if I could, please. First of all, Anders, on the Viaplay guidance for '21, could you perhaps explain a couple of things? What are your assumptions for B2B sales, including Allente during '21? And how much are you assuming for, I guess, direct-to-consumer within the numbers that you've announced? And then taking a step back on looking at the '21 guidance for Viaplay versus the '25 guidance, I think the average run rate for Nordics would be the 3 million you want to add for the whole 5 years. The annual run rate is roughly 600,000 per year. So I wonder whether you can maybe, on the Nordics, explain why you expect your full year -- your '25 guidance, rather, to be back-end loaded effectively, given what you said about '21. So that's the first question on Viaplay. And then secondly, I want to just touch on the launches later on in the year. So if you look at Poland and the U.S. and we've got quite a bit of color on what the product will look like in the Baltics, which is obviously just coming up. But on Poland, it'd be useful at this stage, perhaps to get a little bit more color on what additional content, outside of sports, you're anticipating going into that market with? And then on the U.S., are there -- is there any update on potential wholesale agreements that you might sign to get into that market?

Thanks, Omar. So we'll start with the first question regarding Viaplay Nordics and the B2B share for this year. B2B will play an important part, especially since we get an increased effect of the Allente agreements. So the majority of the growth will come from B2B. If we look at direct-to-consumer, we expect that to be in line with or slightly better than the organic direct-to-consumer market growth in the Nordics. And linking that to your question on the 600,000 run rate in the 5-year plan, you are correct to assume that there is a little bit of a delay effect in the sense that we get more incremental growth in 2022, given new sports rights, especially in Norway and Finland. So there is a ramp-up in that. And we're also taking a reasonably prudent approach for 2021, given that we are planning to do some price adjustments. So it follows exactly the plan that we have. And as always, we are mindful about not over promising, and we are also mindful about the fact that there could be upsides to this. Coming on to the international markets and your question regarding Poland and the content offering. What you will see in Baltics in exactly a month's time, it's a very sort of good indicator on what you will see also in Poland. So there is more to be said on sports before we launch in August. There is more to be said on the breadth of the content offering on entertainment, and we will very likely also announce some original content for Poland to come already this year and increase from next year and onwards. So the Baltic proposition, which will soon be going to -- going live and start to be marketed, is a very good indicator on what Poland can expect. U.S. is early days. We are in some very interesting dialogues with distributors and other streaming companies. So -- but it's a bit early to say. U.S. will be around Christmastime this year. So impact on this year will be quite insignificant, but a lot of interest. I hope that answers your questions.

Yes, it does. And just one very quick follow-up, if I may, on Viaplay, the guidance for this year on the revenue side. Could you give us a sense of what sort of price increases you're thinking about for Viaplay, both Nordics -- well just in the Nordics? That would be great.

Yes. Well, we would like to, respectfully -- but we would like to inform our customers first what the price increases are. And of course we don't want to talk about it too early. So it will happen in the first half of the year, most likely. But we are yet to decide exact timing and exact amounts. We're not talking about drastic price increases for TV series and movies in this year. But I think it is important that we start to adjust gradually so we can create a sustainable future for this -- for the growth opportunities as we see. But I'll have to come back to you on the price and timing.

We will now take our next question, and it comes from the line of Martin Arnell of DNB Markets.

Yes, sorry. Here I am. My first question is on the Viaplay sub intake in the quarter. If you could say -- or share some light on the split, stand-alone versus bundle B2B?

Yes. It was very much driven by -- as I also alluded to when it comes to this year, driven by the Allente agreement ramping up and further campaign -- but not just Allente, but further campaign driven with our distributors. There is a meaningful share of direct-to-consumer also in the 207,000, but the majority came through distribution agreements, as anticipated.

Is that going to be the same in the start of 2021, you think? Or anything is changing there?

No. We see a good momentum on direct-to-consumer, also starting the new year. So there is a steady beat, if you will, in the sign-up direct-to-consumer. But there is a bigger ramp up again coming in from the agreements. And part of -- the beauty of the joint venture in Allente was, of course, all the synergies that we can share with Telenor, but also the significant upside in upselling Viaplay and our V-channels to Allente. And that is playing a big part for the full year and already early in the year.

Okay. And on the 400,000 new Nordic paying subs that you target for 2021, did you mention your expectations on the split there between stand-alone and distributions? Is that mostly stand-alone? Or...

No. It's -- majority is distribution partners, and that is the next phase that we're seeing in the market now, that there will be a slowdown in direct-to-consumer as a consequence of many households, many individuals have made sort of their first call into streaming services. And then the distributors are picking up on streaming as the new way of creating opportunities with traditional TV channels who are less in demand. That will even out over time. So basically, we started our journey, we're seeing almost only direct-to-consumer driven. Now we are harvesting the opportunities in distribution through partners, and then that will even out over time. So 2021 will be -- the majority -- the Nordic growth will be driven by distributors.

Okay. Perfect. And then on the pricing, you're guiding for a price hike, and I guess it makes sense. It was quite a while since you did it. And I understand you don't want to comment on what kind of price. But is it -- should we see it as a normal level compared to historic raises? Is that fair? Or...

No. I think Martin, the way you have seen it historically is that there has been sporadic -- from us and others, sporadic price increases when you sort of help it to do a price increase. And that is quite common in growth industries, trying to sort of find their feet in what the right price is. What we would want to do now is to not stare ourselves blind and what the others in the markets are doing, but actually carve out a price position we think is the relevant one for Viaplay, given the investments we're making, given the proposition that we have in the market. And then gradually, we'll work with price increases on moderate levels going forward, and not wait 5 years every time. So you could argue that we're now sort of resetting our approach to price increases by doing a moderate one this year, and then they will follow annually or biannually in the future, and that's a stable way of managing through inflation and investments.

Perfect. And finally, on the skiing rights here that you're adding later in the year, but you're exiting the Champions League contract. How should we look at that mix for Sweden? And is it possible for you to actually have a separate package where you include the skiing rights? Or is it only going to be included in the TMS?

Now that's a good question, and we are contemplating various ways of packaging our content. And I think there will be a proliferation of packages over time. But I am a bit mindful about not sort of complicating the customer proposition too much, too soon. Two price points in the market is basically where we want to be for the time being, and then that may change over time. But we are -- you're right in -- to assume that we are adding a slightly different kind of portfolio also going forward. You have the skiing this year, we have the Swedish men's national team football team next year, we have the handball already, we have the ice hockey already. They are different in character compared to the Premier Leagues of the world. So that may lead to some packaging changes in the future, but a little bit too early to say.

And our next question comes from the line of Jamie Bass of Berenberg.

I've got 3 questions, if I may. The first one on the ARPU in the quarter. So you sort of alluded to the impact of B2B distribution. But also, I was wondering if you could sort of quantify the impact of Disney+ coming out and the loss of that content in terms of the transactional side. Second question is just whether you could give some color on any expectations for further sports content rights in Poland? And finally, on the U.S., so you mentioned that you sort of see markets as being 3 to 4 years before breakeven. Can we expect that number to be in the same range or slightly shorter for the U.S. given the sort of different entry strategy you have there?

Yes. Jamie, thanks for your questions. The first one on ARPU on Viaplay. The impact on -- in the store of Disney gradually, not fully yet, but gradually pulling over their content to Disney+ has been not significant enough to really move the needle on the overall ARPU. The main drivers for the ARPU that we're seeing in Q4 is the share of B2B, the number of campaigns that we are running and the fairly backloaded nature of the quarter. And then on top of that, some currency headwind from the strengthening of the Swedish krona. So that is more impacting the ARPU mix that you see in the quarter rather than the specific example of sort of loss of Disney content in the Viaplay store. The store is down, more so because of the lack of new content being added because Hollywood is on more or less, on standstill. So that will, of course, bounce back gradually in the future. But the ARPU is where we expected it to be, slightly better, actually, when it comes to the impact of campaigns. And as I alluded to earlier, that will then now gradually change in 2021. So both the nature of the campaigns, the price increases that we are planning and the growth in general in the market, we will see revenues grow ahead of subs this year. That's the ambition for 2021. We do have -- when it comes to your question on Poland and sports rights, it's a bit early to announce anything. But if I put it like this, we're not done yet with carving out the proposition for Poland. And as I also alluded to earlier to Omar's question, when you see Baltics coming in March and the breadth of the service that we've developed there, the ambition for Poland is similar. So that will be a good indicator for what's coming in Poland. But too early to shed any lights on exactly what that is. We will do more original production in Poland that we will most likely, at least in the early days in the Baltics, and hopefully be able to announce something significant fairly soon on that. On the U.S., yes, you are fair to assume that the potential in harvesting sort of margins could be slightly shorter in terms of a journey in the U.S. than the other markets, and that's not just the U.S. That is probably when you look at the specialized markets where we don't go broad with the sports offering, we are more in control of exactly what kind of cost base we have from the get-go. So we can then tailor what kind of margins we want at what time. But we don't want to leave the growth opportunity too soon. So we will able to continue to add content in the markets like the U.S. represents, but the journey to breakeven and healthy margins could be slightly shorter, yes.

And our next question comes from the line of Tom Singlehurst of Citi.