Good morning, ladies and gentlemen, and thank you for holding. Welcome to MTG's Q2 2015 Earnings Call. At this time, all participants are in a listen only mode. After the presentation, participants will have an opportunity to ask questions. May I also remind you that you can find the I would now like to hand the conference over to your host, MTG President and CEO, Madsen Lindemann, who is joined on today's call by our acting CFO, Maria Reddin.
Please go ahead.
Thank you, operator, and good morning, everyone. We had record futures sales again this year as our broadcasting revenue grew by 4%. We increased our audience shares in 5 out of 8 markets and our advertising market shares in 6 out of 8 markets, while also continuing to grow our Nordic and international subscriber bases. And our overall digital revenues were up more than 30%. We have reported lower sales for NICE Entertainment, and this was due to the high number of corporate events that NICE produced in Q2 last year.
Operating profits before nonrecurring items were stable when excluding the M and A transaction cost of SEK20 1,000,000 and we actually have been up approximately SEK70 1,000,000 or 15% when excluding the negative currency effects that we have talked about before. So all in all, a healthy underlying performance in the quarter. Our Nordic Broadcasting business continued to deliver higher sales and profits as increased advertising prices and the growth in our online businesses more than offset the declines in linear TV viewing and our satellite subscriber base. This again demonstrates that the Nordic transformation is working well even when including the FX headwinds. We have talked many times now about the fact that linear TV is declining but that the total video consumption is continuing to rise to record new levels.
Video is simply being consumed in different ways, and we have for some time now seen higher levels of online video viewing amongst the ones leaving TV, in particular, in the younger carrier groups. This is precisely why we have invested in the last few weeks in ESL, It is also why we are now rolling out our new programmatic automated ad buying platform across our markets, which is the first of its kind in Scandinavia. Fireplay is clearly one of the Nordic subscription via on demand market leaders, and we will also we now also would be a global leader in esports with a combination of Turtle and Biogen. Splay is the undisputed number 1 MCN in Scandinavia and is now expanding internationally, including most recently to Germany. We have the leading digital business in Bulgaria with NetInfo, which has just set up 7Talent, the first FCN in Bulgaria and has its own video platform, VBOX 7.
And we have the leading advertising video on demand for TV sites in 8 territories. The latest addition to our digital portfolio, Zoom In, which is the largest MCN in Europe and number 5 in the world with over 2,000,000,000 monthly views on YouTube and its own publisher network. There are so many synergies between these businesses and the rest of our portfolio. Gaming, video or e sport is the most obvious one and the clear red threat in these acquisitions. This is a $3,800,000,000 market opportunity according to recent reports, and we will now own the biggest esports operator as well as one of the leading distributors of gaming video content.
The addition of these new companies to our existing digital businesses creates a combination of global red talent and content, massive reach among millennials and proven monetization capabilities. We will now operate right across the digital video entertainment spectrum, just as we have done so successfully with our TV content production studios, channel brands and distribution platforms. Our ambition is clear to be a leading player in the global online video entertainment space. We have also taken a number of other important steps along our path of strategic transformation. We announced a series of management changes to facilitate the move from a product to a country based organization in order to accelerate our decision making and bring us even closer to our customers.
We are also working to optimize our structure in order to capitalize on the fast moving changes in consumer behavior and offset the ongoing adverse currency effects. In this context, we continue to review our portfolio of products and businesses to make sure that we are as relevant and competitive as possible and to focus our resources on products and businesses that offer the greatest potential, which is also why we have exited the likes of ZEPRA and SITUZ and FreeTV Hungary and the Russian DTH platform, Raduka. We have also taken the decision to reclassify our interest in CDC Media as a discontinued operation, and this follows the non binding offer of US200 $1,000,000 that CDC Media received for the purchase of 75 percent of its business operations. The reclassification indicates that our shareholding in CDC Media has fulfilled, and we have indicated our support for CDC taking to the better before returning to their Board and shareholder with a recommendation. Separately, we continue to explore a range of options regarding our own Russian operations in order to best protect shareholder value while complying with the changes in the media law by the end of the year.
Pallid will provide you an update on the current situation in a minute as I briefly reviewed the performance of each of our business areas. So as usual, let's start with the Scandinavian 3 gs operations where sales were stable at constant currency and profits were up as the negative impact of the strong dollar was more than offset by cost optimization. Our sales were up in Norway and in Denmark, but down in Sweden. The Danish and Norwegian TV ad market are estimated to have grown in the quarter, and the Swedish market is estimated to have declined. The commercial product or linear viewing in our target groups was down 6% in Sweden and 2% in Norway, but up 2% in Denmark.
As expected, the rate of decline has now substantially slowed as the comps ease. We still have much to do, of course, but there are many things to be proud of in this quarter. Segment sales have stabilized following the annual agreement price increases introduced in each country. Our Danish audience share is the highest level since 1999. Our Norwegian audience share has continued to improve, and we have seen continued healthy advertising video on demand growth.
We have also launched a programmatic and trading platform in Sweden and Norway, which is first of its kind, and as I said before, profits are up despite the negative currency effects. If we then move on to the Nordic pay TV business, where revenues were up 3% at constant exchange rate, we have more subscribers than ever and profits were stable despite the significant currency headwind. ViaPlay continues to be the growth driver. The partnership with Kromkart and Eltekattan and the Swedish telco operator Tele2 have worked well so far, and we have now also signed agreement with broadband operator Gentel in Norway and Telco 3 in Sweden. We have also made via Play available on Apple TV, which means that we are now available on every major platform and device.
The positive viewing trends that we have seen with Bioplay continued in Q2, with the numbers of started streams up 77% compared to last year. The main category drivers were again kids content, which was up almost 300% compared to last year, and TV series were up 122%. We know that some of our OTT competitors is putting up prices across the Nordic markets for a second time since launch. We are, of course, looking at this and considering if we should raise our prices by how much and when. As we have said all along, price is not the point here, but growth, and we are seeing high growth with our unique product mix.
So let's wait and see. Moving now from buyer play to ViaSat. The IPTV subscriber base continued to grow, while the cable and satellite bases declined. We have launched a new TV Everywhere product across Scandinavia during Q2, which enables Viasat subscribers to access a range of their favorite linear channels. We have secured key content rights such as the NHL and World Cup in I30 and signed agreement with CMO and TV4 to include their channel in our package offering in Norway and Sweden, respectively.
Shifting the focus now from the North to the international operations, where our free2b Emerging Markets business lies, sales were up 5% at constant exchange rates with higher profits. We had healthy sales growth in all but one market, and I am happy that our operations in Czech again reported positive sales growth. Our AVOD sales for the region continued to be very healthy. The care and TV ad markets are both estimated to have grown, while the Board is estimated to have declined. It is still early days when it comes to the introduction of carriage fees in these markets, but we are pleased with the development so far, and we have introduced mini pay carriage fee structures in all of our 3 Baltic countries, in Czech and in Bulgaria.
Our online business in the region continued to perform strongly, and we have, during the quarter, acquired a 30 4% stake in LUPO, which runs the largest video sharing site in Czech. And we then move on to our Pay TV operations in the emerging markets where sales was up 17% at constant exchange rate and driven by the consolidation of TRACE from July last year. Sales were up 1% on an organic basis as healthy growth in our channel business offset the foreign subscriber revenues in Ukraine and the advertising ban on our Russian Pay TV channels. Profits were up compared to last year despite the negative currency effects and the add back, and this reflected a good underlying performance and good ongoing cost optimization. Moving forward, our sales and profits will continue to be negatively impacted by the advance and the depreciation of the ruble, but we do expect to report a profit for the full year compared to our previous ambition for a breakeven result.
And finally, then to Night Entertainment, MTGX and MDG Radio Group, where sales were down 18% on a constant currency basis with operating loss of DKK29 million largely accounted for by the M and A transaction cost of DKK20 million. As I mentioned earlier, the sales decline is primarily due to the high comps for the events business within NICE, which reported a more than $100,000,000 negative swing in sales compared to last year. The event production is a low margin business, so had less impact on segment profitability, but sales in our TV production business was stable with good growth in drama where we have a strong position. And the acquisition of 74% of Turtle Entertainment is a fantastic opportunity for us. Turtle ESL is the world's largest e sport company and e sport is one of the fastest growing online video categories.
We're already active in this field with our own buyer game. Esports is now as big as I thought in terms of fan base, but a fraction in terms of revenue per fan. We have a long and successful track record of building and monetizing broadcasting sports brands, so there is a lot to play for here. We have also announced an increase in our shareholding display from 49% to 81%. Splay is the number 1 multichannel network in the Nordics and one of NTG's most successful digital investments to date.
It has grown from being a niche Swedish YouTube channel aggregator to an international digital content powerhouse with 120,000,000 monthly views and 12,000,000 subscribers. It not only supports Twitter and YouTube, but has also developed its own influencer marketing educations. And we have just announced the acquisition of 51% of Zoom In, which is the leading MCN in Europe and the 5th largest in the world. And Zoom In attracts more than 2,000,000,000 monthly video views and 100,000,000 subscribers worldwide on YouTube. Zoomin also runs the leading on line production arm with daily production of more than 400 premium short video clips in 18 languages.
The Xumil acquisition will give rise to further M and A cuts in Q3, and we are also in the process of buying out minorities in one of our content production businesses. Moving forward, Blade and Zoom In will be consolidated within FTX from the respective closing date, and closing of the is still subject to regulatory approval. We expect that the operating segment will be loss making for the full year as we continue to invest in the expansion of these exciting digital businesses. So in summary for the group, our broadcasting business delivered 4% sales growth and 4% operating profit growth. Recurring profits would have been up 15% if excluding the M and A transaction costs and adverse currency effects.
And this, of course, demonstrates that the underlying business continues to perform well and the benefit of the actions that we have taken to offset the currency headwinds. We have taken a number of significant steps along our transformation path over the last few months and are set to become a leading digital video entertainment company in a number of key categories. We're also ensuring that we invest where the growth is by balanced cost optimization and portfolio management with organic M and A driven expansion in key content and online businesses. So that concludes my comments on the results. But before we answer your questions, I will now hand the call over to Maria for her comments.
So over to you, Maria.
Thank you, and good morning, everyone. I would now like to give you a quick update on the current impact in the quarter and also the outlook going forward. If we turn to Q2 impact, for the quarter, the negative profit impact from the U. S. Dollar was approximately SEK50 1,000,000 and largely equally split between the 2 Nordic segments and almost smaller parts in the emerging markets.
The negative impact from a weak Russian ruble was approximately SEK 12,000,000 Other net translation and transaction effects further also impacted the profits, which resulted in total currency impact year on year of approximately negative SEK70 1,000,000 in Q2. In this slide, the underlying operating performance continued to be very healthy. So if we then look what the currency see for the remainder of this year and also for 2016, This is obviously moving targets and the purpose is to help you to understand the magnitude of the swings rather than to give you a formal outlook as we know that Epic market continued to be volatile. Based on current spot rates and net of forward currency hedges and the fact that we did see a small improvement of the SEK versus the U. S.
Dollar within the last quarter, we do have a slightly improved outlook for the dollar for the rest of the year, while the ruble outlook remains intact. Going forward then, the impact of the more expensive dollar cost would increase from SEK50 1,000,000 in Q2 to approximately SEK55 1,000,000 in Q3 and we expect the full year impact to be approximately SEK200 1,000,000. The negative ruble impact on profit is expected to be approximately SEK50 1,000,000 for Q3 and SEK75 1,000,000 for the full year. Other net translation and transaction effects are expected to be limited, but negative. When we then look further down the road into 2016, the strengthening of the U.
S. Dollar is expected to have further negative impact of SEK 250.96, which can be compared to the SEK300 1,000,000 that we talked about in the Q1 results. Finally, and as we highlighted over the last quarter, the business is performing well with healthy underlying profit growth when you exclude these material impacts. However, we are where we are and we have therefore continued to review our activities and efficiency levels and these substantially currently impact only start to accelerate this process. So that's all my comments, and thank you.
And back to you, Jorgen.
Thank you, Maria. So now we are ready to take everyone's questions. As usual, we have a lot of people on the call today, and we want to answer each of your questions. So please limit yourself to no more than 2 questions each. Operator, can we have the first question, please?
Thank you. We'll take the first question from Lisa Yang from Goldman Sachs. Please go ahead.
Good morning. I have a few questions please. I mean, firstly was on the margins in Free TV, Scandi and Pay TV Nordic, which held up very well despite negative FX impact. Was that all due to cost cutting? And is that replicable for the rest of the year?
And especially in PayTV Nordic, how much of the margin improvement is due to also weaker subscriber additions? My second question was on Pay TV Emerging Markets. I mean, I think last quarter you reduced the FX negative FX impact from 100 to 75. But I don't think you changed your EBIT guidance for the year, which is about breakeven. So just wondering given the good performance we saw in Q2, what's your kind of guidance you can give us for the full year?
And last one is on the other segment. The content sales has dropped significantly. I'm just wondering how much of that is a one off? And is that going to come back for the rest of the year?
Yes. Thank you. Jurgen here. When you look at the margins and the business performance, I think what we have seen for the quarters or what we have at least exercised is that we want to have a balanced approach to the investments that we are making, so we also follow the market development. And that is what you see right now.
You see some of the markets being strong and with some of the markets not as strong. So the fact that we can come out with the growth, sales and also improved profit is, of course, that we are balancing the investments according to the market. And that is a discipline which we have exercised throughout the quarters now. And to your last question then, Maria will then take the currency issue. But when it comes to the production business, as you know, NICE is split into a production business and also have a so called events business.
And that event business takes makes big events for companies. And that event business has a fantastic quarter last year, too, with 2 big events, particularly Norway, which didn't come through this year. So that is the reason for the decline in that segment. And I can't tell you unfortunately if we will come back next year. Of course, we hope that.
But at least the Q2 here, they didn't manage to make up for the shortfall of clients, which they had this quarter versus last year. Maria, if you can take the currency part?
Yes. As you said, the ruble outlook for the rest of the year remains intact, so roughly €75,000,000 for the full year. However, we have upper revised assets for the segment to make a profit for the
full year. Okay.
We'll now take the next question from Adrien Descent Heilier from Morgan Stanley.
Yes. Good morning, everyone. Thanks for taking the questions. First of all, you talked about Q2 constant currency growth being flat in free TV, Scandi. That's with the new price increases.
What's your outlook for the second half of the year? Do you believe that you can sustain this percentage? Or I mean, can you see a a different evolution given different comps? And the second question, it might be early days, but apparently, you're going to be able to extract some value from CTC. You've been making a couple of acquisitions lately.
How should we think about the proceeds of a potential well, the use of proceeds from CDC actually?
Yes. Ivan, when it comes to the forecast of the margin for second half, I think your insight is as good as ours, meaning that we have the forecast for IIM, how they see the market, particularly in Sweden and Norway going forward. And they forecast the Swedish market to decline and the Norwegian market to grow somewhat flat, you can say. So that is what we have. So of course, it is also boils down to the underlying performance of our businesses.
So that is, of course, that makes it a bit difficult for us to give you any forecast for the second half. But of course, as you can see now, if you look at the ratings in our Nordic countries, in all three countries, so far in Q3 has had a strong start. So that of course hopefully should cater for something good, depending on market and the pot level, of course, as always. When it comes to CTC, I think the acquisition that we have made is part of the strategic transformation that we do for the group, and that is independent of CTC. And the eventual outcome of is, yes, and the eventual proceeds, I don't know, it's going to be the Board is going to decide how they want what they wanted to treat that eventual proceeds coming out of that acquisition.
But our ambition, of course, is to continue to grow our business independent on what is, I think, DTC and that we can do as well as you have seen.
All right. Thank you very much.
The next question comes from Sami Sarkomis from Nordea.
Hi. I have a couple of Nordics. There's been a slowdown in growth during the last three quarters, down to 3% now in Q2. Do you think you will be able to reverse this trend going forward? And then second question, what are your thoughts on the Swedish free TV operation?
I mean, you continue to lose market share and sales were down despite large price increases. So what is the plan for Sweden?
Yes. If we look at the Swedish operation or Sweden as such, and as you know, this is something we have discussed at several calls here. That is, of course, an issue for us as such that the business we invest a lot of own produced spend money in, the CV3, is not performing as we want it to be. And therefore, we have taken certain actions. We have changed the team and also we have made a new setup now as well, and we have a very strong executive now leading the Swedish operation.
And this is what you can do. It is a marathon. It's not a sprint here. We need to win the slots back, and we have had stronger performance in some of the slots. And also, we have worked a lot with some of the smaller channels that we're having.
And then, of course, the TAM like TV10, I think it grew like 70% in the quarter. But overall, as you say correctly, we want to have more customers to our products. So we are not happy, of course, about that we are declining. It is though marginal this quarter. And as I said, Q3, they at least have started well in Sweden, which of course I'm very happy about.
But is an exercise about getting more out of the more ratings out of the money that we invest in programs. That is the whole trick for us actually right now. When it comes to the pay TV Nordic business, we had as well, we had a boost last year due to the Olympics as well in Q1. That, of course, helped as well. But overall, what we see is that in spite of the fact that we have decline in highly profitable revenue generating G and A business, then we still manage to grow revenue in the business and we also manage to grow profit in the business in spite also that we invested quite a lot in the digital area.
And this is a transformation that we are seeing as well that we get more and more bioplait customers in. And they, of course, come in at a lower price than we see the DTH customers, which are priced higher. So it is a game as well about getting as many customers in as possible to continue to grow revenue and also to make sure that we make this transformation profitably, which we are, of course, are focusing on doing right now. So we are actually fairly happy with what we have right now. And then of course, our EIPTV is growing as well as you probably noted.
The next question comes from Stefan Nelson from SEB. Please go ahead.
Thank you. First regarding the acquisitions you made recently. I mean are these the areas that you thought you wanted to expand to? Or do you see other kind of digital areas that you still need to or still want to expand into? And on this topic also, how do you think this will affect your dividend that you're kind of acquiring for more than you will probably get in process for CTC?
Yes. If you look at the acquisitions, first of all, I think we are super happy with them. I think if you take a step back and you see that more and more video is consumed online if you have the right stories. And if you look at e sport, it is a massive growing business and has an enormous fan base. And yes, as big as I saw, I guess, I mentioned already now.
So of course, we would like to make sure that these businesses continue to be strong and expand these businesses. There's still a lot of things to be done with the businesses, and that is, of course, something we would like to support management in doing. And the segment, what we have said is that online entertainment or online video are the areas which we know well. We know distribution, we know content creation, content aggregation, we know advertising, say, we know subscription. And that is, of course, something we can put into the online world as well and replicate what we have done so successfully with our traditional forecasting business.
And luckily now with the acquisitions we have made with Turtle and also Sumerian and Splay, of course, as well is that we have also very strong management and strong people who can help us to be more and more relevant in this digital world. Because if you see the consumption of video, it is increasing in Sweden also despite the fact that you see pop level on TVs continues to go down. So yes, this is the area, online video and video entertainment is something that we will continue to invest in and also to put more money into these businesses in order to make sure that they continue to stay relevant and increase their positions. When it comes to dividend, this is independent. What we're doing here is independent of dividend.
It is again up to the Board, of course, but to decide on dividend. But this is from our point of view, what we are focusing on right now is to make sure the business continues to stay relevant and then these acquisitions should not prevent us from paying dividend.
Great. Could I ask one more just final also on content cost? I mean, we're seeing a lot of things happening. The Olympic rights were acquired by one of your competitors. You have a new OTT service coming out this fall probably.
You have the Premier League rights coming up again. I mean what are the trends in costs? Are you seeing another kind of content war unfolding here? Or what are the things you're seeing out there?
Yes. No, not to the extent that we have seen historically, to be honest. I think what we have done as well is trying to make sure that the content we are buying, we can capitalize on it in many different ways, also different ways than our competitors normally can do because when we buy content, we can capitalize on free TV, on pay TV, on the AVOD, on the SVOD, on the satellite, on our platforms, our packages and so forth. So we are trying to make sure that we have revenue streams which can facilitate and continue so we can continue to acquire the right content. There will always be fights for the right content.
But I think that we are in a position where we have more customers today, we have for the World Cup I saw as well, which is a super important event. So that is something that we will continue to do.
The next question comes from Mikhail Lassine from Carnegie.
Yes. Hi. You've changed the organization in the Nordic region in Q2. And my question is regarding this really, what this means operationally and from a cost perspective, what you can gain from this and what we should expect going forward in terms of further changes to the group structure in the Nordic region, I mean?
Yes. We went away from a, you can call a product structure to a country structure. I think there is the countries in Nordic actually are very different. And what we wanted to make sure is that the product that we're having, the free TV or pay TV or the OTT product is set right in each of the countries. And also, as I just mentioned, the way we buy content enable us to utilize the content in different ways.
So when we have acquired a football match, we can decide to broadcast it on whatever, free TV, Denmark, if that makes sense and pay TV in Norway, if that makes sense, and via Play in Sweden, if that makes sense. So we want to make sure that we come closer to the customers with the organization that we have a strong set up with very strong people who actually can make sure that our products are fit for purpose and they are relevant in the different markets. So that is that should be the end game with this change. And of course, hopefully as well, we should optimize the way we spend our money to make sure that advertising campaigns and different other initiatives could be done combined, free pay, via play and so forth. So there are different opportunities in a country with a country organization.
And hopefully, this in the end then should result in more customers and a better profitable business. So that should be the aim with it.
Okay. So you changed the management side, but what about the rest?
Yes. We changed the structure the way that we set up as well. And also, we changed different people at the same time. So it is a way to make sure that we have the right competencies needed in the organization, which the executives, they are looking at. So it's not a management thing.
It is that you combine the businesses in a different way. You have when you had a marketing meeting in the old days, it was probably a free to be marketing meeting in the morning. Now it is a Sweden marketing meeting, how do we get the most out of this content. So it is the business areas as such are working should be able to work closer together in the country than they did before. That, of course, is something that we want to get out of it as well.
And again, just to be clear, it is not about cash as such, it is to make sure that we have a strong organization that we are more competitive and more relevant and that we can take decisions faster on the relevant products in the market. That is the aim. And then hopefully, become stronger, get more customers.
Okay. And another question regarding other operations, MTD X and Radium and so on. The acquisitions that you made on the event side development in Q2, given that, can you say something about the second half in twenty sixteen in terms of and what we should expect there? Yes.
I think I mentioned in my long speech here that we are going to the thing is going to be loss making for the year. And then, of course, when you talk about the event business, as I said, this was a one off, meaning there was a Q2 event, which we saw last year. We didn't sell this year. So it but the segment as such is going to be loss making for the full
year. All right.
We'll take the next question from Martin Arnell from DNB. Please go ahead.
Yes. Hi, guys. I'd like
to start off with a question on free to be merging. I noticed that the margin on new sales was maybe a bit lower than I would expect. But was there anything that impacted the margin negatively in free to e margin?
Yes. I think what we have tried to do, of course, is to strike back in some of the areas. So constant currency has gone up in some of the areas. So I think that is the main thing. I think good news with the business is, of course, that we took market shares advertising market shares the 3 Baltic countries and also in Bulgaria.
And as we look right now, we lost the market shares in Czech. Look at the ratings as well, then we increased in Estonia and Latvia, and we increased in Bulgaria. So the money that we have spent to a large extent paid off actually. So that we're happy with.
Okay. And you talk a lot about cost optimization today. You have improved there and it's clearly visible in the underlying figures. But is this sort of a new level from now on? Do you expect this to continue in the second half of the year if you exclude FX?
Yes. I think what you can expect, of course, as we said as well, we want to make sure that we are we have said the right way, and that is why we are making different optimization projects that and efficiency projects as well. It's not just about saving money. It's also to get more out of the money that we are spending. So it is an ongoing focus area for management, of course.
And the whole aim is, of course, to make sure that we are able continue to invest in the business that we're having and continue to stay competitive in the businesses. And then it is always healthy that you sometimes review the way that you're set up as an organization and business. And that is what we're doing constantly to make sure that we are set up for the right purpose. And that is why we have changed the organization. That is why we continue to make sure that we invest more in the right way and we have said the right way in all our territories actually.
So this is ongoing it's an ongoing challenge. And of course, we understand that we have currency headwinds against us. And of course, we would like to mitigate as much of that as possible. As you have seen, we have done in the results Q2, we have forecasted the business growing, both in an order and combined despite these currency headwinds. So that is a journey which we'll continue to explore.
Okay. Thanks.
The next question comes from Rasmus Engeberg from SHB.
Yes, hi. I was wondering about if you could give us some financial data on Zoom in and Splay, what's the approximate revenue for last year and are they currently profitable?
Yes. I think what we can say at this stage because we have not disclosed everything for these businesses, but if you look at them and if you combine these three businesses, then we're looking at and you take 100%. Then we're looking at enterprise valuation of around SEK 2.1 billion. And we have combined sales in these businesses of around SEK750 million and a combined net loss of around whatever, yes, flat SEK10 1,000,000 or something like that or SEK5 1,000,000, something like that. And if you look at the split between the revenue, then you will see that the esports business is generating around twothree of the revenue and the FGN business is generating around onethree of the revenue.
1st of the revenue. And that is what we can give you at this stage. But of course, it underlines as well that the investments we have made are very strong, and the businesses are already now strong performing and basically not loss making is very minor. So that is a great opportunity for us.
The next question comes from Markus Debelle from JPMorgan.
Yes. Just got one question left on the Scandinavian Free to Air. Could you just share with us the linear viewing trends maybe across the different markets, Sweden, Denmark and Norway. So what are the current rates? You're talking about an improvement in the rate of decline.
So if you can just share with us the developments in each of these three markets. And also then more specifically on Norway, could you maybe share with us how much of an improvement is actually related to the new cross platform measurement system that obviously you implemented? Thank you.
Hello? I think there was a miss here in the technique. Should I take it again? Could did you hear anything? Or can you should I repeat what I said?
Sorry. Hi, there. It's Markus. I didn't hear any answer so far. Sorry.
Okay. That was took a long time. Sorry for that. I'll try again then. What I tried to tell you is that we've seen an improvement in the pot level.
That was one of the microphones here was on mute. I'm sorry for that. So what we have seen right now is in Sweden, as I said, we are down 6% in the quarter versus 20% in Q1. So that has been an improvement. And Sweden, particularly in the previous quarters, has been quite hit by a partly decline.
Norway has improved actually from minus 15% in the Q1 to minus 2% this quarter and Denmark came from minus 2% in Q1 to plus 2 this quarter. So we are seeing some leveling out of these negative trends. And then again, it is different in the different target groups. Of course, in the older target groups, the pot lag declines less. And in the younger target groups, of course, you will see higher decline.
But I think important for us, of course, when we see this is the combined video journey is increasing. And that is also why we haven't made all these investments in the digital areas is to make sure that we capture these consumer shifts or these consumer trends because obviously, since video is increasing, video viewing, they go somewhere else. And unfortunately, we are probably not capturing everybody who's leaving television. But at least we have a lot of products in the market like via Play, like our Play service, now with Zoom in, now with Turtle, now is Play and so forth. We hopefully should capture some of these trends.
And that you see we do to some extent as well because we have managed to grow the Nordic combined business despite these trends. So despite the product level is declining and the changes declining, we still manage to grow revenue and grow profit exactly because we have the dividend products. When it comes to measurement, I think the last question, if it has changed in Norway, yes, they have changed the measurement system in Norway. So now also is your second TV screen is also measured now, the second TV set in your cabin or whatever. And that, of course, has helped as well when you measure on the part levels.
Perfect. Very clear. Thank you very much.
We'll now take a follow-up question from Sami Sarkhanis from Nordea.
Thanks. One more question still regarding the online investments you've been making during the summer. Are you happy with the current exposure? Or are you still planning to make further investments like Splay and Turtle Entertainment?
Thanks. Yes. I think these investments we have right now, of course, is they're big, and they are something, of course, where we have a lot of opportunities still to work with these investments. But it is important for us in this fast moving environment that you are nimble and you are fast in order to make sure that if opportunities arise, of course, you should be able to capture these. So of course, we have created now the ecosystem.
We have scale now in the businesses. And that is something that we that, of course, something we want to build on. But we are happy right now, particularly around the business that we have acquired, but we need to stay, very active as well if suddenly we see opportunities arising. So that is that would be an ongoing focus area for us.
We'll take the next question from Hugh MacDiarmid from Susquehanna International Group.
Hello. Can you hear me?
Yes, I can.
Perfect. I just had a follow-up question on the dividend and from CTC. So obviously, CTC contributed quite a bit to your net recurring profit, which I think the dividend is paid off at least 30%. And I know that's already quite high. It's quite high.
It's about 60 odd percent from last year. And given that CTC's dividend obviously is going to be paid and that's not going to be a part of net recurring profit anymore, is there any comments you can make on the dividend like if it's kind of the current level is sustainable? Or might you drop it and use any of the difference in proceeds to reinvest in new businesses and kind of do a bit more M and A?
Yes. No, I cannot give you any further guidance there. I think as I said, the businesses that we have acquired does not prevent us from paying out dividend. I think that is quite important to understand as well. And then in the end, it is it is up to the Board to define on if how they look at the capital allocation, what they want to do.
But the mandate that we have, of course, is to make sure that this business continues to stay relevant and also make sure that we are continue to be a very share whole of healthy company. So probably the Board in the end will make that decision on dividend.
Okay. And there's no overbend on the say the 30% minimum. There's no upper band on what you might pay. So even if it touches on 100% -plus of net recurring, that's still hard?
Yes. It is as I said, it is up to the Board to decide that. With net policy, as you correctly pointed out, that's a 30% recurring 30% of net recurring profit. But it is up to the Board to decide how they want to do dividend. And as I said, the acquisition that we have made so far does not prevent us to think of it.
Okay. Thank you very much.
That concludes the question and answer session. I would now like to hand the call back to Jurgen Madsen Lindeman for his closing remarks.
Thank you all for your time today. We will announce our Q3 results on October 22nd, and we hope to meet with as many of you as possible before then. So thank you for your continued interest in MGG, and I wish you all a great summer. Thank you.
Thank you. That concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.