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, at which time instructions for a question and answer session will be given. If any participant has difficulty hearing the presentation, please press the star followed by the zero for operator assistance. May I also remind you that you can find the presentation slides for this call at mtg.com. I would now like to hand the conference over to your host, MTG President and CEO, Jørgen Madsen Lindemann, who is joined on today's call by our acting CFO, Maria Redin. Please go ahead.
Thank you, operator, and good morning, everyone. We had record Q2 sales again this year as our broadcasting revenue grew by 4%. We increased our audience shares in five out of eight markets and our advertising market shares in six out of eight markets, while also continuing to grow our Nordic and international subscriber bases. Our overall digital revenues were up more than 30%. We have reported lower sales for Nice Entertainment, This was due to the high number of corporate events that Nice produced in Q2 last year. Our operating profits before non-recurring items were stable when excluding the M&A transaction cost of SEK 20 million, and we actually have been up approximately SEK 17 million or 15% when excluding the negative currency effects that we have talked about before. 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 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, and particularly in the younger target groups. This is precisely why we have invested in the last few weeks in ESL, Splay and Zoomin to take majority positions in these exciting businesses.
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. Viaplay is clearly one of the Nordic subscription video-on-demand market leaders, and we now also will be a global leader in esports with a combination of Turtle and Viagame. Splay is the undisputed number one 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 7Talents, the first MCN in Bulgaria, and has its own video platform, Vbox7. We have the leading advertising video on-demand TV site in eight territories.
The latest addition to our digital portfolio is Zoomin, which is the largest MCN in Europe and number 5 in the world, with over 2 billion 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 esports is the most obvious one and the clear red thread in these acquisitions. This is a SEK 3.8 billion 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 vision 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 Zappa, Zitius, FreeTV Hungary, and the Russian DTH platform, Raduga. We have also taken the decision to reclassify our interest in CTC Media as a discontinued operation, and this follows the non-binding offer of SEK 200 million that CTC Media received for the purchase of 75% of its business operations. The reclassification indicates that our shareholding in CTC Media is for sale, and we have indicated our support for CTC Media taking to the bidder before returning to their board and shareholder with a recommendation.
Secondly, 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. Maria will provide you an update on the currency situation in a minute after I've briefly reviewed the performance of each of our business areas. As usual, let's start with the Scandinavian free TV 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 markets are estimated to have grown in the quarter, and the Swedish market is estimated to have declined.
The commercial part of 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 rates, 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 Chromecast and [3SS] and the Swedish telco operator Tele2 have worked well so far, and we have now also signed agreement with broadband operator NextGenTel in Norway and Tele2 in Sweden. We have also made Viaplay 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 Viaplay 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 Viaplay to Viasat. The IPTV subscriber base continued to grow, while the cable and satellite base is 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 ice hockey and signed agreement with C More and TV4 to include their channels in our package offerings in Norway and Sweden respectively. Shifting the focus now from the Nordic to the international operations, where our free TV emerging market 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 Czech and Bulgarian TV ad markets are both estimated to have grown, while the Baltics 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. We have introduced mini-pay carriage fee structures in all of our three Baltic countries, in Czech and in Bulgaria. Our online business in the region continued to perform strongly. We have during the quarter acquired a 34% stake in Mall.cz, which runs the largest video sharing site in Czech. If we then move on to our pay TV operations in the emerging markets, where sales was up 17% at constant exchange rates 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 falling 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 ad ban. 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 ad ban 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 break-even result. Finally then to Nice Entertainment, MTGx, and MTG Radio, where sales were down 18% on a constant currency basis with operating loss of SEK 29 million, largely accounted for by the M&A transaction cost of SEK 20 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 SEK 100 million negative swing in sales compared to last year.
The event production is a low margin business, had less impact on segment profitability, but sales in our TV production business were stable, with good growth in drama where we have a strong position. The acquisition of 74% of Turtle Entertainment is a fantastic opportunity for us. Turtle ESL is the world's largest esports company, and esports is one of the fastest-growing online video categories. We are already active in this field with our own Viagame. Esports is now as big as ice hockey 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 in Splay from 49% to 81%.
Splay is the number one multi-channel network in the Nordics and one of MTG'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 million monthly views and 12 million subscribers. It not only supports talents across Facebook and Instagram, Twitter, and YouTube, but has also developed its own influencer marketing applications. We have just announced the acquisition of 51% of Zoomin, which is the leading MCN in Europe and the fifth largest in the world. Zoomin attracts more than 2 billion monthly video views and 100 million subscribers worldwide on YouTube. Zoomin also runs a leading online production arm with daily production of more than 400 premium short video clips in 18 languages.
The Zoomin acquisition will give rise to further M&A costs in Q3, and we are also in the process of buying out minorities in one of our content production businesses. Moving forward, Splay and Zoomin will be consolidated within MTGx from the respective closing date, and closing of the Turtle transaction 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. In summary for the group, our broadcasting business delivered 4% sales growth and 4% operating profit growth. Recurrent profits would have been up 15% if excluding the M&A transaction costs and adverse currency effects. 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 are also ensuring that we invest where the growth is by balanced cost optimization and portfolio management with organic M&A-driven expansion in key content and online businesses. 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. Over to you, Maria.
Thank you, Jørgen, and good morning, everyone. I would now like to give you a quick update on the currency impact in the quarter and also the outlook going forward. If we sum the Q2 impacts, for the quarter, the negative profit impact from the US dollar was approximately SEK 50 million and largely equally split between the two Nordic segments and only a smaller part in the emerging markets. The negative impact on a weak Russian ruble was approximately SEK 12 million. Other net translation and transaction effects further also impacted the profits, which resulted in a total currency impact year-on-year of approximately negative SEK 70 million in Q2. In this light, the underlying operating performance continued to be very healthy. If we then look what the currency sees for the remainder of this year and also for 2016, this is obviously a moving target.
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 FX markets continue 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 US 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, the impact of the more expensive dollar cost would increase from SEK 50 million in Q2 to approximately SEK 55 million in Q3, and we expect the full-year impact to be approximately SEK 200 million. The negative ruble impact on profits is expected to be approximately SEK 50 million for Q3 and SEK 75 million for the full year.
Other net translation and transaction effects are expected to be limited but negative. When we look further down the road into 2016, the strengthening of the US dollar is expected to have a further negative impact of SEK 250 million, which can be compared to the SEK 300 million that we talked about in the Q1 results. Finally, 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, we are therefore continuing to review our activities and efficiency levels, and these substantial currency impacts only serve to accelerate this process. That's for my comments, thank you, and back to you, Jørgen.
Thank you, Maria. Now we are ready to take everyone's questions. As usual, we have a lot of people on the call today, we want to answer each of your questions. Please limit yourself to no more than two questions each. Operator, can we have the first question, please?
Thank you. If you'd like to ask a question, please press star one on your telephone keypad. Please ensure the mute button on your telephone is switched off to allow your signal to reach our equipment. If you find your question has been answered, you may remove yourself from the queue by pressing star two. Again, please press star one to ask a question. We'll take the first question from Lisa Yang from Goldman Sachs. Please go ahead.
Good morning. I have a few questions, please. Firstly, 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, is that replicable for the rest of the year? Especially in Pay TV Nordic, how much of the margin improvement is due to also weaker subscriber additions? My second question was on Pay TV emerging markets. I think last quarter you reduced the negative FX impact from SEK 100 to SEK 75, I don't think you changed your EBIT guidance for the year, which is about breakeven. Just wondering, given the good performance we saw in Q2, what kind of guidance you can give us for the full year? 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? Thank you.
Yeah. Thank you. Jørgen 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. That is what you see right now. You see some of the markets being strong and with some of the markets not as strong. The fact that we can come out with growth, safe, and also improved profit is, of course, that we are balancing the investments according to the market. That is a discipline which we have exercised throughout the courses now.
To your last question then, Maria will then take the currency issue, 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. That event business makes big events for companies. That event business had a fantastic quarter last year, Q2, with two big events, particularly in Norway, which didn't come through this year. That is the reason for the decline in that segment. I can't tell you, unfortunately, if it will come back next year. Of course, we hope that, but at least the second quarter 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, roughly SEK 75 million for the full year. However, we have upward revised outlook for the segment to make a profit for the full year.
Okay.
We'll now take the next question from Adrien de Saint Hilaire from Morgan Stanley.
Yes. Good morning, everyone. Thanks for taking the questions. First of all, Jørgen, 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 can you see a different evolution given different comps? 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 use of proceeds from CTC, actually?
Yeah, Adrien, when it comes to the forecast of the market for second half, I think your insight is as good as ours, meaning that we have the forecast for IRM, how they see the market, particularly in Sweden and Norway, going forward. There they forecast the Swedish market to decline and the Norwegian market to grow somewhat flat, you can say. That is what we have. Of course, it also boils down to the underlying performance of our businesses. That makes it a bit difficult for us to give you any forecast for the second half. Of course, as you can see now, if you look at the ratings in our Norway countries, in all three countries so far, Q3 has had a strong start.
That, of course, hopefully should cater for something good, depending on the market and the POP 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. The eventual outcome of CTC and the eventual proceeds, I don't know, it's going to be the board who's going to decide how they want to treat that eventual proceeds coming out of that acquisition. Our ambition, of course, is to continue to grow our business independent on what is happening with CTC, and that we can do as well as you have seen.
All right. Thank you very much.
The next question comes from Sami Sarkamies from Nordea.
Hi. I have a couple of questions. Firstly, on Pay TV Nordic, there has 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? A second question. What are your thoughts on the Swedish free TV operation? You continue to lose market share, and sales were down despite large price increases. What is the plan for Sweden? Thanks.
Yeah. 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 content money in the TV3 is not performing as we want it to be. 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. This is what you can do. It is a marathon, it is not a sprint here. We need to win the slots back, and we have had stronger performance in some of the slots. Also we have worked a lot with some of the smaller channels that we are having.
Then, of course, with a channel like TV10, I think it grew like 70% in the quarter. Overall, as you said correctly, we want to add more customers to our product. We are not happy, of course, about that we are declining. It is, though, marginal this quarter. As I said, Q3, at least they have started well in Sweden, which of course I'm very happy about. It is an exercise about getting 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 a boost last year due to the Olympics as well in Q1. That, of course, helped as well.
Overall, what we see is that despite the fact that we have decline in highly profitable and revenue-generating DTH 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. This is a transformation that we are seeing as well, that we get more Viaplay customers in, and they of course come in at a lower price than we see the DTH customers, which are priced higher. 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 of course are focusing on doing right now. We are actually fairly happy with what we have right now.
Of course, our IPTV 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. 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? On this topic also, how do you think this will affect your dividend, that you're acquiring for more than you will probably get in process for CTC?
Yeah. If you look at the acquisitions, first of all, I think we're super happy with them. I think if you take a step back, you see that more video is consumed online if you have the right stories. If you look at esports, it is a massive growing business, and has an enormous fan base. Yeah, as big as ice hockey, as I mentioned already now. Of course we would like to make sure that these businesses continue to be strong and expand these businesses. There are 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. The statement, 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 sale, we know subscription. 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 broadcasting business. Luckily now with the acquisitions we have made with Turtle and also Zoomin.TV and Splay, of course, as well, is that we have also very strong management and strong people who can help us to be 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. 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, to decide on dividend. From our point of view, what we are focusing on right now is to make sure the business continues to stay relevant, these acquisitions should not prevent us from paying dividend.
Great. Could I ask one more just to final also. On content cost, 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. 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?
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 it on free TV, on pay TV, on the AVOD, on the SVOD, on the satellite, on our platforms, our packages, and so forth. We are trying to make sure that we have revenue streams which can facilitate 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 more revenue streams coming in, we are growing the business, and we just acquired the NHL, which is a fantastic right for us, and the World Cup ice hockey as well, which is a super important event. That is something that we will continue to do.
Okay. Fair enough. Thanks.
The next question comes from Mikael Laséen from Carnegie.
Yes. Hi. You 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.
Yeah. We went away from, you can call a product structure to a country structure. The countries in Nordic actually are very different. What we wanted to make sure is that the product that we're having, the free TV or paid TV or the OTT product is set right in each of the countries. Also, as I just mentioned, the way we buy content enable us to utilize the content in different ways. When we have acquired a football match, we can decide to broadcast it on whatever free TV, then if that makes sense, and pay TV in Norway, if that makes sense, and Viaplay in Sweden, if that makes sense.
We want to make sure that we come closer to the customers, with the organization that we have a strong set of very strong people who actually can make sure that our products are fit for purpose and they are relevant in the different markets. That should be the end game with this change. 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, Viaplay and so forth. There are different opportunities in a country with a country organization. Hopefully this in the end then should result in more customers and a better profitable business. That should be the aim with it.
Okay. You changed the management side, but what about the rest?
Yeah, we changed the structure, the way that we set up as well. Also we changed different people at the same time. It is a way to make sure that we have the right competencies needed, in the organization, which the executives they're looking at. It's not a management thing. It is that you combine the businesses in a different way. When you had a marketing meeting in the old days, it was probably a free TV marketing meeting Nordic. Now it is a Sweden marketing meeting. How do we get the most out of this content? The business areas as such 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. Again, just to be clear, it's not about cost 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, then hopefully become stronger, get more customers.
Okay. Thanks. Another question regarding other operations, MTGx and Viasat 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 2016 in terms of EBIT and what we should expect there?
Yeah, I think I mentioned in my long speech here that the segment is going to be loss-making for the year. 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 sold last year. We didn't sell this year. The segment as such is going to be loss-making for the full year.
All right. Thanks.
As a reminder, ladies and gentlemen, to ask a question today, please press star one. 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-air margins. I noticed that the margin on new sales was maybe a bit lower than I would expect, was there anything that impacted the margin negatively in free TV margins?
I think what we have tried to do, of course, is to strike back in some of the areas. Content cost has gone up in some of the areas. I think that's the main thing. I think good news with the business is, of course, that we took advertising market shares in the three Baltic countries and also in Bulgaria. As it looks right now, we lost the market shares in Czech. Look at the ratings as well. We increased in Estonia and Latvia, and we increased in Bulgaria. The money that we have spent to a large extent paid off, actually. That we're happy with.
Okay. You talk a lot about cost optimization today that you have improved there, and it's clearly visible in the underlying figures. 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 effects?
I think what you can expect, of course, as we said as well, we want to make sure that we are set the right way, and that is why we are making different optimization projects 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. It is an ongoing focus area for management, of course, and the whole aim is, of course, to make sure that we are able to continue to invest in the business that we are having and continue to stay competitive in the businesses. 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 are doing constantly to make sure that we are set up for the right purpose.
That is why we have changed the organization. That is why we continue to make sure that we invest money the right way and we are set the right way, in all our territories, actually. This is ongoing challenge. 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 forecasting business growing, both in the Nordic and combined, despite these currency headwinds. That is a journey which we'll continue to explore.
Okay, thanks.
The next question comes from Rasmus Engberg from Handelsbanken.
Yes. Hi. I was wondering about if you could give us some financial data on Zoomin.TV and Splay. What's the approximate revenue for last year and are they currently profitable?
I think what we can say at this stage, because we have not disclosed everything for these businesses, but if you look at them, if you combine these three businesses, and you take 100%, then we're looking at enterprise valuation of around SEK 2.1 billion. We have combined sales in these businesses of around SEK 750 million and a combined net loss of around, whatever. flat SEK 10 million or something like that, or five, SEK 10 million, something like that. If you look at the split between the revenue, then you will see that the esports business is generating around two-thirds of the revenue and the MCN business is generating around one-third of the revenue. That is what we can give you at this stage.
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, it's very minor. That is a great opportunity for us.
All right. Thank you.
The next question comes from Marcus Diebel from J.P. Morgan.
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? What are the current rates? You're talking about an improvement in the rate of decline. 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? Did you hear anything or should I repeat what I said? Sorry.
Hi, it's Marcus. I didn't hear any answer so far. Sorry.
That took a long time. Sorry for that. I'll try again. What I tried to tell you is that we've seen an improvement in the PUT level. There was one of the microphones here was on mute. I'm sorry for that. What we are seeing right now is in Sweden, as I said, we're down 6% in the quarter versus 20% in Q1. That has been an improvement. Sweden, particularly in the previous quarters, has been quite hit by a PUT level decline. Norway has improved actually from minus 15 in the Q1 to minus two this quarter, and Denmark came from minus two in Q1 to plus two this quarter. We are seeing some leveling out of these negative trends. Again, it is different in the different target groups.
Of course, in the older target groups, the PUT level decline is less, and in the younger target groups, of course, you will see higher decline. I think important for us, of course, when we see this is the combined video viewing is increasing. That is also why we have 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. Unfortunately, we are probably not capturing everybody who's leaving television, but at least we have a lot of product in the market, like Viaplay, like our Splay service. Now with Zoomin.TV, now with Turtle, now with Splay and so forth. We hopefully should capture some of these trends.
That you see we do to some extent as well, because we have managed to grow the Nordic combined business despite these trends. Despite the product level is declining and DTH declining, we still manage to grow revenue and grow profit exactly because we have the digital 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. Now also, your second TV screen is also measured now, or the second TV set in your cabin or whatever. That, of course, has helped as well when you measure on the product levels.
Perfect. Very clear. Thank you very much.
We'll now take a follow-up question from Sami Sarkamies 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.
I think these investments we have right now, of course, they're big, and they are something, of course, where we have a lot of opportunities still to work with these investments. 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 arises, of course, you should be able to capture these. Of course, we have created now the ecosystem. We have scale now in the businesses, and that, of course, something we want to build on. 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. That would be an ongoing focus area for us.
We'll take the next question from Hugh McDermot from Susquehanna International Group.
Hello, can you hear me?
Yes, I can.
Yep, perfect. I just had a follow-up question on the dividend from CTC. Obviously, CTC contributed quite a bit to your net recurring profit, which I think the dividend is paid obviously at least 30%. I know that is already quite high. It is about 60-odd percent from last year. Given that CTC's dividend obviously is not going to be paid, and that is not going to be a part of net recurring profit anymore, is there any comment you can make on the dividend? If 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&A?
Yeah, no, I cannot give you any further guidance on that. I think, as I said, the businesses that we have acquired do not prevent us from paying out dividend. I think that is quite important to understand as well.
Oh, yeah.
In the end, it is up to the board to define how they look at the capital allocation, what they want to do. 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 continuing to be a very shareholder-friendly company. It is the board in the end who make that decision on dividend.
Okay. There's no upper bound on the, say, the 30%, obviously the minimum. There's no upper bound on what you might pay. Even if it touches on 100+% of net recurring, that's still possible.
Yeah. As I said, it is up to the board to decide that. We have the policy, as you correctly pointed out, that's the 30% of net recurring profit. It is up to the board to decide how they want to do dividend, as I said, the acquisition that we have made so far does not prevent us from paying dividends.
Okay. Thank you very much.
That concludes the question and answer session. I would now like to hand the call back to Jørgen Madsen Lindemann for his closing remarks.
Thank you all for your time today. We will announce our Q3 result on October 22nd. We hope to meet with as many of you as possible before then. Thank you for your continued interest in MTG. 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.