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Regulatory press release

Year-End Report January – December 2017 Storytel AB (Publ)

Click here to see an interview with CEO Jonas Tellander and CFO Sofie Zettergren

Summary of Q4, 2017

Highlights from the past quarter (compared to Q4, 2016)

? Increased subscription base from 503,900 to 533,400 subscribers (360,200)

? Increased Streaming-revenue from 197.9 MSEK to 209.2 MSEK (147.4 MSEK)

? Increased share of international Streaming-revenue from 42.5% to 43.6% (37.9%)

? Launched Storytel in two new markets, Spain and India; launching on Iceland after end of quarter.

? Ended a strong year for Print Publishing. Norstedts Förlagsgrupp AB showed a positive operating profit for the third year in a row of ca. 32 MSEK (28 MSEK)

Key figures for the Streaming division and Print Publishing

currency: thousand SEK    Q4 2016    Q1 2017    Q2 2017    Q3 2017    Q4 2017    Q1 2018
Total: Streaming Forecast 1
Revenue 147 399 155 660 167 008 197 881 209 225 220 000
 Contribution Profit 2 32 684 32 133 27 847 27 784 30 277
 Contribution Margin 22,2% 20,6% 16,7% 14,0% 14,5%
Paying subscribers 360,2 381,2 423,2 503,9 533,4 572,0
Subscriber-base change 18,7 21,0 42,0 80,7 29,5 38,6
Streaming, Sweden
Revenue 91 557 96 177 101 365 113 709 118 038 122 000
Contribution Profit 27 073 32 678 31 257 32 872 38 501
Contribution Margin 29,6% 34,0% 30,8% 28,9% 32,6%
Paying subscribers 230,8 241,4 255,8 282,3 292,7 303,0
Subscriber-base change 10,9 10,6 14,4 26,5 10,4 10,3
Streaming, other markets 3
Revenue 55 842 59 483 65 643 84 172 91 187 98 000
Contribution Profit 5 611 -545 -3 410 -5 088 ?8 224
Contribution Margin 10,0% -0,9% -5,2% -6,0% ?9,0%
Paying subscribers 129,4 139,8 167,4 221,6 240,7 269,0
Subscriber-base change 7,8 10,4 27,6 54,2 19,1 28,3
Print Publishing 4
Revenue 189 258 104 137 111 969 132 619 173 832
Contribution Profit5 74 367 37 543 37 840 47 905 66 854
Contribution Margin 39,3% 36,1% 33,8% 36,1% 38,5%

1 Forecast is an approximation based on information available at time of reporting

2 Contribution Profit is defined as streaming revenue minus costs for content and marketing

3 Storytel Norway included in figures @ 100%. In the consolidated group accounts Norway is reported according to the principle of proportional consolidation.

4  Print Publishing refers to physical books. People’s Press is included in the group from Q2, 2017 –– in this table it is included in each quarter, in an attempt to show comparisons. In Group Accounts all acquisitions are included from the acquisition date. Internal transactions have been redacted. Barnens bokklubb not included in table.

5 Contribution Profit is defined as revenue minus cost per sold unit, distribution costs, and sales and marketing cost

Comments from the CEO

Storytel’s fourth quarter was a strong finish to a strong year in 2017. During the year, our global streaming revenues increased 48% to 730 MSEK. Our global subscriber base also increased 48%, in comparison with the same period in 2016, to an average total of 533,400 subscribers in Q4 2017. All told, our global listeners enjoyed 136 million hours of audiobooks during 2017, of which 37 million hours were produced in-house, up from 28 million hours in 2016.

During the past few years, a number of audiobook streaming services have entered the Swedish market. Nonetheless Storytel has continued growing in Sweden with just over 60,000 subscribers a year, and we forecast the same absolute growth in Sweden during 2018, which is equivalent to a 20% growth rate in a relatively mature market –– which demonstrates the potential of the audiobook. The Swedish book market (including physical books) has during recent years been showing healthy growth thanks to Storytel and other streaming services, and grew during 2017 by 4.2 %. The Streaming segment in Sweden grew by 50% during 2017 to 509 MSEK, of which Storytel accounted for 429 MSEK (84% market share). Total turnover for these digital subscription services increased dugin 2017 by about 170 MSEK, of which Storytel accounted for 106 MSEK.

Profitable, yet growing business in Sweden and Denmark

Our Swedish and Danish operations (including Print Publishing) increased their sales 11% to approximately 1 070 MSEK in 2017, with an EBITDA margin of around 9%. Our goal for Sweden and Denmark is to continue growing, and increase operating margins towards around 15%. During current applied accounting standards, K3, all costs related to production of audiobooks are expensed as they occur, hence not capitalized in the balance sheet.

We’ve been clear about our strategy of leading each market we establish our service in, and we currently hold this position in Sweden, Denmark, Norway and The Netherlands. We’re in second place in Finland and Poland, but aim to lead these markets within a few years. Our new markets Spain, Russia, India and Iceland will together contribute a significant number of new subscribers in 2018. During 2018 we plan to launch our service in six new markets, with the intention of being the initiator in the fast-growth sector.

The accuracy of our economic forecasts in these reports shows we understand each country’s markets, as well as how to increase our subscriber base while forging customer loyalty. This knowledge helps us gauge the need to invest in advertising, according to the maturity stage of each market. In the past we’ve chosen to start new markets more cautiously, but for 2018 we’ve chosen a more aggressive strategy for winning new-market subscribers. This is possible due to the comprehensive data Storytel now have collected of which we have gained an understanding of how to scale our business with low or limited risk.

Our goal for streaming is to have 800,000 subscribers in fifteen markets by the end of 2018, as opposed to 550,000 subscribers in nine markets at the end of 2017, an increase of 250,000 subscribers, equivalent to 45% subscriber growth. Our global streaming revenues from 2017 totalled 730 MSEK and our goal for 2018 is 40% growth within this area.

2017 was another fantastic year for Norstedts Förlagsgrupp publishers, with success stories such as Elena Ferrante’s highly popular Naples Quartet as well as the release of the fifth book about Lisbeth Salander, written by David Lagercrantz. In December Norstedts author Johannes Anyuru won the Swedish Augustpriset literary award for his book De kommer att drunkna i sina mödrars tårar (They Will Drown in their Mothers’ Tears), which contributed to strong holiday sales. Children’s and young-adult publisher Rabén & Sjögren had an excellent year, and contributed positively to the total operating profit of Norstedts Förlagsgrupp AB, approximately 32 MSEK for the publishing group. Digital sales also made an important contribution to profits, where the audiobook is the dominant driver and currently accounts for 12% of the publisher’s revenue. Our 2018 goal for Print Publishing (Norstedts Förlagsgrupp publishers and People’s Press) is stable revenues of about 500 MSEK, with an operating margin of 6-8%.

During Q4 we developed a plan for Streaming consisting of about twenty prioritized items which are now being implemented in their respective areas. Operations will be made more efficient through improved focus and a clearer division of responsibilities between local teams and our newly formed global units. Our goal is clear, to be the world’s leading trademark for storytelling. To reach our goal, we will work in innovative ways while creating value for listeners, as well as Storytel and its shareholders.

With these comments, I’ve attempted to detail the profitable business we’ve built up in our home market Sweden, with its stable publishing operations and a streaming service that –– thanks to our strong brand and our attractive subscription offer continues to grow despite competition. This proves we are doing things right. Our positive cash-flow from Sweden is re-invested in content and marketing, which benefits publishers, authors, listeners, and our shareholders.

Please continue joining us as an investor (ticker: STORY) and subscriber. Storytel’s own story has many chapters left to be written.

Financial information

Accounting principles

Storytel Group and its parent company comply with the Swedish law regarding yearly statements of accounts, as well as BFNAR 2012:1 (Swedish Accounting Standards Board standard 2012:1) concerning annual statements of accounts and group accounts at the K3 tier.

The registered parent company is Storytel AB (publicly traded). Storytel A.S. (Norway) is 50% owned by Cappelen Damm and is reported here according to the principle of proportional consolidation. Wholly owned subsidiaries are included in the yearly statement of accounts from their time of registration or acquisition.

This report has not been audited by the company’s accountants.

Revenues and profits for the period (compared to  Q4, 2016)

Net turnover for the group in Q4, 2017 totalled 365,055 (287,298) TSEK. Within the Streaming division, Sweden accounted for approximately 56.4% (62.1%) and foreign markets for approximately 43.6% (37.9%). Storytel A.S in Norway is a Joint Venture together with Cappelen Damm and is reported according to the principle of proportional consolidation. The table on page two includes all subscribers and revenue in Norway, listed under Streaming, other markets, which is why revenues listed in the table on page two are higher than for the group report, in order to provide a more accurate sense of revenue per subscriber.

Q4, 2017 unit-sale costs for the group totalled 212,366 (155,974) TSEK. Unit-sale costs include costs for producing audiobooks, the cost of goods sold of physical books, warehouse and distribution costs, as well as royalty payments to other publishers and rights owners. The contribution margin totalled app. 41.8% in Q4, 2017, compared to 40.9% during the entire year.

Other external costs for the group during Q4, 2017 totalled 103,414 (66,435) TSEK. The greatest cost under Other external costs consists of marketing costs. During Q4, 2017, Storytel had launched its service in nine markets (as compared to six markets during Q4, 2016) which required greater investments in marketing. Other significant costs included office leases, IT related services and costs, and consultants.

Staffing costs for the group in Q4, 2017 totalled 62,889 (52,889) TSEK. Staffing costs within the Publishing division are at a stable level, while Streaming has experienced increased costs in order to meet the needs of our pace of expansion.

Earnings before depreciation ni the group in Q4, 2017 totalled 1,486 (19,656) TSEK. This dip in profits compared with Q4, 2016 can primarily be linked to higher marketing costs incurred in connection with the nine countries Storytel now operates in, and the fact that marketing costs are normally higher the first few years. Compared to other quarters in 2017 the group has performed better, largely due to Print Publishing, which has contributed with strong profits. This is primarily a result of Norstedts Förlagsgrupp AB, which contributed with an operating profit of circa 32 MSEK in 2017.

Depreciation primarily includes depreciation attributable to goodwill and other extra value identified in connection with acquisitions. The largest asset items are connected to the acquisition of Norstedts and Mofibo, and People’s Press. Other depreciation primarily concern the purchasing and development of IT-systems.

Financial items includes both interest income and interest expenses, as well as realized and unrealized exchange differences. Interest costs from bank loans total app. 2 MSEK for Q4, 2017.

Earnings per share, after taxes, in Q4, 2017 totalled – 0.21 SEK, calculated as earnings for the period after taxes, divided by the average number of shares during the period. Earnings per share for the year as a whole totalled –1.46 SEK.

Group: Financial position and cash flow as of December  31st, 2017 (compared to Dec. 31st, 2016)

At the end of the period, the group had 250,974 (129,561) TSEK in liquid assets. Solvency was 36.2% (23.8%). Equity totaled 343,573 (172,472) TSEK. In September 2017, Storytel completed a targeted stock offering which added just over 200 MSEK in equity, before transactions fees.

Non-current liabilities to loaning institutions totaled 127,962 (155,161) TSEK. We started to amortize these loans during 2017; the portion that will be amortized during the next twelve months is considered short-term liabilities and totals app. 46 MSEK. Acquisition loans during 2017 totalled 20 MSEK, and were used to partially finance the purchase of People’s Press.

Number of shares and Share-Capital (as of December 31st, 2017)

There were 51,517,307 registered shares in issuance at the end of the period, divided between 635 A-shares and 51,516,672 B-shares. Share-capital totaled 25,758,653.5 SEK as of December 31st, 2017.

Post-period activity

On February 20th, 2018 Storytel went online in its tenth market, Iceland.

Date of next report

The interim report for January–March 2018 will be released on the 15th of May, 2018.


The annual meeting of shareholders will be on May 15th, 2018, in Stockholm, Sweden. The annual accounts, and annual group accounts, will be made available on April 15th, 2018.


The Board of Directors suggests no dividends be paid for the 2017 financial year.

For more information, please contact:

Jonas Tellander, CEO: +46 70 261 61 36

Sofie Zettergren, CFO: +46 70 509 98 08

This information is such information that Storytel AB (publ) is obliged to make public in accordance with EU:s market regulation (marknadsmissbruksförordning). The information was made public by above contact person on February 26th, 2018.

For a complete report in pdf, please find it on AktieTorget or on