TV4 Group sales rose, but earnings fell in 2011. Net sales* rose to SEK 5,555 million (compared with SEK 5,265 million the previous year), representing an increase of just over 5 per cent. Operating profit ** totalled SEK 529 million (SEK 826 million), representing an operating margin of 10 per cent (16 per cent). TV4 Group operating profit not including C More/Canal+ totalled SEK 654 million (SEK 666 million).
"Thanks to strong sales, earnings for the TV4 Group, not including Canal+, were on a par with 2010. However, our operating margin fell as a consequence of sharply higher programme investments during the year, investments that are necessary to meet the increasingly intense competition in the Swedish TV market," says TV4 Group CEO Casten Almqvist.
Growth in the Swedish TV advertising market continued in 2011. According to IRM (the Institute for Advertising and Media Statistics), TV advertising increased by 10.5 per cent. Spending on advertising on TV4 Group channels rose by 13.1 per cent, whereas average growth for traditional media as a whole (daily press, popular press, trade press, TV, radio, outdoor, cinema advertising, addressed and unaddressed direct advertising) was 3.3 per cent. The TV4 Group's share of advertising and sponsorship revenues totalled 55.2 per cent (54.0 per cent). Thus, the TV4 Group gained market share and strengthened its position in the Swedish TV advertising market.
2011 was the TV4 Group's best year in the ratings since MMS began monitoring in 1994. Viewing of the Group's channels rose to 31.4 per cent (29.9 per cent in 2010) among the main 12 - 59-year-old target group, making the TV4 Group easily the most-watched TV operator. The TV4 channel alone, with an audience share of 19.2 per cent (18.7), remained easily the most-watched channel among the main target group, with a sharp increase in viewing, both among its own and other channels' target groups, and among the population as a whole. Whilst SVT1, SVT2, TV3 and Kanal 5 saw their audience share decline among all these target groups, viewing figures for Sjuan and TV11 rose sharply.
TV4 Sverige, responsible for the TV4 Group's local TV operations, continued to grow and improved its profitability in 2011. Sales were 20 per cent up on the previous year, representing a larger share of the local advertising market. Local breakdown of Sjuan was also launched during the year. This met with a very favourable reception, and sales exceeded expectations.
TV4 Digital Media's earnings were up on the previous year. Advertising sales rose by 59 per cent and consumer revenues by 100 per cent. The year saw the successful launch of the TV4 Play Premium pay service, together with a TV4 Play app for iPad. Traffic on TV4 Play and the network as a whole continued to grow.
"We can look back on a year of fantastic audience figures, inspired by successes such as our advertising sales, TV4 Sverige and TV4 Play. Yet the intense competition we face means that we must do even better. We remain committed to programmes, channels and services that reflect our media philosophy: variety, diversity and quality. We intend to enhance all our technical platforms and will therefore be increasing our investment in digital moving images", says Mr Almqvist.
The Premium TV operations of C More/Canal+ made a loss in 2011, mainly because of a lower initial balance of subscribers than the year before, and also due to substantial investments in programme content. However, in the second half of the year Canal+ reversed the decline in subscriber numbers that had begun when Premier League rights were not renewed in autumn 2010, and subscriber growth in late 2011 exceeded expectations. During the year Canal+ bolstered its rights portfolio by acquisitions including Norwegian top division football (Tippeligan), of great importance in the Norwegian market. The year also saw the launch of the new channel Canal+ Family, and Canal9 in Norway.
* Income and expenses are reported net, i.e. after deduction of C More's distribution fees.
** Operating profit before affiliates, structural costs and other items affecting comparability.
The full annual report is available through this link.
The TV4 Group has delivered engaging news, major entertainment shows of great variety and quality, live sport and top-class drama to Swedish viewers for two decades. In addition to the main TV4 channel, the TV4 Group comprises more than 40 TV channels throughout the Nordic region - in the free-TV, basic cable and premium segments, with Canal+ as the leading pay-TV operator in the Nordic region. The TV4 Group also has 25 local TV stations and a wide range of other internet, mobile and on-demand services, including TV4 Play, offering online access to clips and full programmes from the Group's various channels. For more information, visit tv4group.se.