(endast på Engelska)
From the Interim Report Q2 2024
Dear shareholders,
“Disciplined strategy execution delivering the best financial performance to date”
I am pleased to report a solid second quarter for the Storytel Group, with financial results that continue to track well relative to our guidance. This quarter demonstrates that we have taken another leap in the disciplined execution of our profitable growth strategy by delivering the best financial performance in the history of the company, with an adjusted EBITDA of 128 MSEK and an operating profit of 47 MSEK.
We also reached a milestone with over 2.3 million paid subscribers on Storytel, including Mofibo and Audiobooks.com. Our paid subscriber base has grown by nearly 15% since early 2023.
Moreover, it is healthy thanks to continued high engagement, lower churn, high Customer Lifetime Value (CLV) to Subscriber Acquisition Cost (SAC) ratio, and strong Average Revenue Per User (ARPU).
This quarter, we made significant changes to our financial reporting structure and have gone from three business segments to two. We now report segment financials based on our two main business areas ‘Streaming’ and ‘Publishing’ which align with Storytel’s hybrid business strategy and organizational framework, and better reflect how we make business decisions day-to-day.
To enhance transparency for both segments, Storytel provides income statements on operating profit level, excluding items affecting comparability, completed with a bridge to adjusted EBITDA. Furthermore, for the ‘Streaming’ segment, we expand the regional reporting of our key performance indicators.
Delivering bottom line profitability
It’s very encouraging that the group’s adjusted EBITDA increased by 178 percent year-over-year to 128 MSEK in the second quarter, reaching the highest level in Storytel’s history, equal to a margin of 13.8 percent. The Group’s operational cash flow was 87 MSEK, representing 9.4 percent of revenues.
Overall, total group revenue increased 9 percent to 924 MSEK with streaming revenue growing 8 percent and publishing revenue growing 16 percent. Concurrently, cost of sales increased only marginally while operating expenses decreased by 5 percent.
The continued revenue growth coupled with a higher internal share of content, and a significantly improved cost structure due to the measures implemented late last year and early this year, has made us firmly profitable and we are proud to deliver bottom line profitability this quarter.
On the streaming side, revenue growth was supported by both Nordics, which grew 5 percent on the back of a solid subscriber growth of 7 percent, as well as Non-Nordic Core, which grew faster in relative terms with a 20 percent revenue growth rate and a 21 percent growth in subscribers. Our markets in the Rest of World region (former expansion markets), decreased revenues with 2 percent and subscribers with 3 percent.
Our Publishing segment demonstrated a strong second quarter, marked by a notable rise in digital sales, both externally and internally.
Revenue increased by 16 percent, with digital sales showing growth of more than 20 percent. External sales grew by 13 percent.
Continued product and pricing innovation
This spring, we introduced several innovative and customer-focused initiatives in the Nordics, designed to accelerate subscriber growth and enhance user satisfaction.
Our new subscription plans, the ‘Flex Plan’ and ‘Student Forever’, along with the limited ‘Premium for Life’ campaign in Finland, are tailored to better meet our users’ needs and to enable them to stay engaged in our world of stories for even longer. Our users are both highly engaged and loyal, and we aim to reward their commitment with these new packages while also strengthening our offer and attractiveness towards new subscribers.
With the Flex Plan, subscribers can enjoy 20 hours of audiobooks per month, with any unused hours automatically rolling over to the next month. Our new Student Forever plan offers students in Sweden, Denmark, and Finland the Premium subscription at half the price – for as long as they maintain their uninterrupted subscription with us. Similarly, our seasonal ‘Premium for Life’ campaign in Finland offered all new subscribers the Premium subscription at half the price. While it’s still early days, and we anticipate to innovate further on product and pricing, we are confident these initiatives will drive higher subscriber acquisition, long-term engagement and retention on our platform.
Additionally, we launched approximately 6,000 popular podcasts in Sweden, without requiring a Storytel subscription or consuming hours from time-based subscriptions, providing users access to a wide range of short formats along with our long formats. Making these podcasts available outside the paywall will help us attract new subscribers while also enhancing the experience for existing ones, encouraging them to spend more of their total listening time on Storytel. The early consumer response to this additional content has been very promising.
Publishing excellence driving engagement and low churn
We continue to please our users and differentiate our platform with exclusive original content available only on Storytel. The Danish true crime title My Brother in 75 Parts was the single largest driver of new signups in Denmark during the quarter. Moreover, Denise Rudberg’s first Storytel Original, Her Last Step, quickly became the most listened-to title on Storytel in Sweden for May.
This follows last year’s announcement of Norstedts’ extensive publishing agreement with Rudberg, covering both her frontlist and backlist.
During the second quarter, our publishing houses released several titles that topped bestseller lists in both bookstores and on Storytel. Sweden saw notable success with Denise Rudberg’s Femte kollusionen, the ninth Handbok för superhjältar installment by Elias & Agnes Våhlund, and the continuation of Moa Herngren’s Syskonfejden series. In May, Gummerus published their first audio drama, Sivuraide (“Siding”), by prominent Finnish author Juha Itkonen. Voiced by three top actors, this audio drama set a new benchmark in the region.
Reflecting the relevant content and intuitive listening experience we offer our subscribers, engagement and retention in our Streaming segment continue to develop positively. During the first half of 2024, the number of subscribers consuming more than 10 hours per month exceeded 1 million, and global paid churn reached a new all-time low.
Grateful and optimistic about the future
As my time as CEO of Storytel Group will come to a close on September 30, I want to take this opportunity to express my deepest gratitude to our loyal customers, our exceptional team, our shareholders and board of directors, our authors and partners. Your support and collaboration during my tenure have been instrumental in the company’s success.
Together, we have achieved remarkable milestones on Storytel’s transformation journey and have meaningfully progressed our mission to Move the World Through Story. I am incredibly proud of what we have built together and confident that Storytel is in good hands for the future with the recent appointment of Bodil Ericsson Torp as the new CEO.
July 30, 2024
Johannes Larcher
CEO, Storytel