Good morning and good afternoon, ladies and gentlemen, and thank you for holding. Welcome to MTG's Q2 20 14 Earnings Call. May I also remind you that you can find presentation slides for this call atmtg.se. I will now hand the call over to MTG President and CEO, Juergen Madsen Lindemann, who is joined on today's call by MTG CFO, Matthias Hermansen.
Thank you, operator, and good morning and good afternoon, everyone. It has been a busy quarter, but also one that again has demonstrated the benefit of the investments that we have been making in our businesses. This is our highest ever quarterly sales number and we have at the same time also grown our operating profits. The sales growth reflected both the content and digital acquisitions that we have made and the organic growth in our Viaplay and emerging market mini pay channel businesses. We have also just completed the acquisition of TRACE, which has further expanded our footprint from 38 to 131 countries across 6 continents with now 131,000,000 MiniPay subscriptions.
This reflects our focus on investing in businesses with relevant content, digital presence and geographical expansion potential. These results also demonstrate the benefit of our uniquely integrated and balanced combination of our online and offline advertising subscription and content production This enabled us to monetize the changes in consumer behavior such as the rising video consumption levels across our markets. We've been capitalizing on the shift from linear to on demand during for some years now with our bioplay catch up free TV and broader digital businesses and accelerating this development through our M2GX team. And this can be seen clearly in the performance of our combined Nordic and Free and Paid businesses, in particular, which delivered 3% combined organic sales growth and 6% profit growth, even when all 3 TV advertising markets were down and traditional premium subscribers volumes also fell. Our key objective is to be the leading digital entertainment business in each of our scale markets, and we are making progress towards this goal each quarter.
We have also maintained our discipline and continued to adjust our cost basis to the market development and to maximize the earnings potential in our traditional businesses, so that we can prioritize investments in future growth. So now as usual, let's briefly review the performance of our businesses and start with the Scandinavian 3 gs operations where sales were down in declining TV ad markets. The MediaHouse target audience share was up in Denmark to a record level since 2,001, but down in Sweden and Norway. There's been quite some commentary recently about the decline in commercial parts level, people using television. So I wanted to take the opportunity to discuss this with you as for us, it has been going on since 2010 and is happening across Western Europe and the U.
S. It accelerates in some months and then decelerates in others as was the case in the first half of the year when the Olympics boosted commercial pot in Sweden, for instance, and it then fell later in the period. It is important to remember that TV remains the impact media of choice for advertisers, reaching 80% of households each week with attractive demographics, large primetime audiences and offering cost efficient returns for advertisers. CPTs or prices have risen as pot has declined, which of course reflects both the supply and demand equation and the strength of TV as an advertising media. We of course discussed all of these consumer trends and shift in behaviors with our customers, the media agencies and research bureaus and it is clear that TV and online video are said to be the big winners of advertising market share moving forward.
This is why we have been at the forefront of developing online ad sales through our well established catch up and other services, which NPG X has further accelerated. The most recent development here is our new NPG TV Reach advertising product in Sweden, which sells a unique combined reach of 70,000,000 monthly video views through our play services, our play multi channel network and partnerships with some of the biggest YouTubers, our cooperation with Viacom and our local cooperation with U. S. TV networks and publishing groups. This structure, of course, also provides for greater segmentation and targeting, creating bundling and programmatic solutions, which are being driven by our new group wide data intelligence unit called put some numbers on all of this, our Scandinavian online advertising sales were up 87% in Q2, with I'm forecasting full year 2014 growth of 53% in Sweden and 40% in Norway and continued high growth next year.
Furthermore, SMS is now measuring the online audience shares in Sweden, and we can see that our online share has increased and is higher than our offline linear share. So all in all, we are investing in products that embrace the consumer trends we have just described and will drive them moving forward. This is what will enable us to shape the future of entertainment and we are happy that we are capturing and driving the growth in total online video consumption with both our AVOD and SVOD services. This shows the strength and opportunity in our integrated model, which has enabled the 3% sales growth and 6% profit growth for our combined Nordic business and that was inspired by 40 advertising markets and premium subscription. On the cost side of our free TV Scandinavian operations, we continue to balance our investments against the mild conditions and performance of our ratings.
So we actually managed to reduce our OpEx despite the launch of TV 6 in Norway. Based on the current market situation and forecast, we expect full year OpEx at constant exchange rates to be up low to mid single digit percentage points when including the Olympics. This compared with our previous expectation for our midsingledigited percentage point increase in OpEx excluding the Olympics. Now let's move on to the Nordic Pay TV business where revenue were up 5% at constant exchange rates due to the growth in the buyer based subscriber base and the higher price points. Our satellite subscriber base continued to decline and was partly offset by the growth in our 3rd party IPTV base.
However, previous satellite ARPU was up again following the price increases introduced over the past year, and this trend is continuing with another 5% increase in our Norwegian premium price last month. OpEx was up 4% at constant exchange rates and primarily due to the Viaplay growth, so profits were up for the 2nd consecutive quarter and our EBIT margin increased for the first time in over 2 years. We retained our previous outlook for continued growth and full year margin expansion this year for the segment. If we move on to the 3 TV merger market business where sales were down 4% at constant exchange rate, this was due to the 17% decline in the Czech Republic that reflected the tough comps and price competition. As we said before, this should be seen in the context of the 47% growth in Q2 last year.
So our sales in Q2 this year are actually still up 22% compared to Q2 2012. Q3 sales would be down again, but we do expect the competitive situation to reset and settle this year so that 2015 can be a year of growth. The good news is that Baltics and Bulgarian delivered double digit constant exchange rate sales growth of 12% 26%, respectively, and Japan borging audience share at a new record Q2 level of 48.7%. OpEx was stable in Q2 despite the investments that we have made in Tanzania and the consolidation of net info in Bulgaria. Moving forward, advertising markets remain volatile, but we do expect advertising market share gains in almost all of our markets for the full year.
The key point here as before is operational gearing to recovery when it comes as the market is still below 2,008 levels, but we have considerably higher audience and market shares today. And now move on to our pay TV operations in the emerging markets where sales were up 8% at constant exchange rates, driven by higher mini pay subscription volumes. The wholesale mini pay channel business has added over 4,000,000 subscriptions in the last year and we have now also launched our T1000 Russian Kino movie channel in Israel. Volumes were down in the quarter due to the termination of 2 contracts in Slovakia and the impact of the geopolitical situation in Ukraine, the local economy and consumer spending. The satellite page TV subscriber base was also down due to both the situation in Ukraine and the ongoing uncertainty regarding Raducar's lightning status in Russia.
OpEx was up significantly in the quarter, which partly reflected the one off and timing effects that we talked about last year, which boosted EBIT by DKK25 1,000,000. Segment profits were therefore down and also reflected the Russian and Ukraine currency headwind that reduced EBIT by approximately DKK10 1,000,000. Trade will now be consolidated from the beginning of Q3 and add to our sales and profits. The Russian government is in the process of approving recently proposed legislation that would ban advertising on pay TV channels in Russia from the beginning of next year. And right now, we're analyzing precisely how much such legislation would impact us and what actions we can take to mitigate the effect.
Our Russian advertising sales totaled to DKK103 1,000,000 in 2013 on our media pay channels, which was less than 10% of segment revenue. And based on where we stand today and please remember that things can change, we estimate that the negative impact in 2015 will be approximately half of the sales. Also remember that such a change would also likely CDC Media in terms of the shift in advertising money. And finally then to the live entertainment, MGS and Ragers segment where sales more than doubled at constant exchange rates following the 2013 acquisition of NICE, DAG and November Film and sales were up 24% on an organic basis and reflected the growth in both our content and our radio businesses. This including a number of scale production for Strix Trauma, in particular including Ergonblo or in English Blue Eyes for SVT in Sweden.
MTGH continues to develop according to plan and facilitate our digital development across our territories. And we have just launched our advertising funded esports streaming service that provides live and on demand gaming content to the global audience. Our DreamHack Hearthstone tournament in our own esports studio in Stockholm on June 14th to 16th attracted almost 900,000 started streams and attracted most viewers from U. S. And then Germany, Sweden, Russia and U.
K. So this is already a truly international product. It's a very exciting new venture and a perfect example on what we want to do in the digital space. These are products that can travel globally that helps us reach a younger audience group than before, but still is within our core video business. So in summary, Q2 has again demonstrated that we have the right model to capture new opportunities and the prevailing consumer trends.
We can see that we are doing the right things to monetize rising video consumption levels by creating and delivering content and experience that consumers love. We have invested to make sure that we are best positioned to capitalize on the changes in behavior and spending patterns, while at the same time our cash conversion levels have remained high and gearing low despite the paying out of a record dividend during the quarter. So that concludes our comments on the result, and we will now be happy to answer your questions. Again, we have a lot of people on this call today, and we want to answer each of your questions. So to allow time, please limit yourself to no more than 2 short questions each.
Operator, can we have the first question please?
Thank you, sir. Ladies and gentlemen, we are now ready to register
This is Martin here. My first question is on the free TV business. How much more is there to do on costs here? And what costs are you stripping out? And could you please update us with your target for cost growth for the full year excluding the Olympics?
Thanks.
Yes. Jurgen here. I think what we are doing, of course, is that we are understanding the different performance of the shows, the market development and also, and I think very important, what is needed in our online business as well. But as you know, Woz, our content is traveling not only on the offline world, but also on the online world. So the content that we show on TV3 in Sweden or Denmark, whatever, also goes on via Play.
You have the sport going on via Play as well. You have a lot of AVOD services. So it is a balance for us to make sure that we invest exactly what is needed get more audience, of course, and to also to make the right size in connection to the market.
Okay. And can you comment on the cost for the full year if you still target mid single digit cost growth for Scandi ex Olympics?
Actually the outlook we have right now is mid low to mid single digit including the Olympics.
Okay. Thanks. Okay. Thanks. And also on this trend with decline of linear television.
Apart from this catch up service and the play service, what can you explain a bit more on the initiatives that you are taking? And are there any news coming out when I mean, for instance, if including the linear channels on your online platform?
Yes. I think what you should look at when you talk about the consumer shift that some consumers go as you have seen now in Q2, but has also been there for many years now, that some day they are moving from linear TV and then they move to online world or somewhere else and then they come back because as I said as well, these pot levels, they go up and down. You can see Norway, it is up 4% in Q2 and 12% for the first half. The pot label was up in Sweden, of course, in Q1. So we have I think since 2010 or 'nine and 'ten, we have invested now in this consumer trends to make sure that we were that we had products going forward when we saw these trends happening.
It's not only in Sweden. It happens all around Europe. And therefore, our AVOD service we have invested in, as you know, the via play services we have invested in as well, the whole display services and also the sports service. So we have actually had some products quite a while now. And that is quite that's why it is important to see that the combined business in Nordic now, right?
So when you see that advertising goes down, you see that premium subs are also going down in spite the fact we are growing our sales combined free and paid by 6% and profit by 3% and profit by 6%. So it is a thing which is very important for us to make sure that we have content where the consumers are. And also combined online viewing and free TV viewing is up. So you have more online viewing in, for instance, the Q2 in Sweden. Look at the money, as I said as well, you look, we increased our sales with 80% on the AWOD services versus last year, which is quite strong increase.
And of course, it also increased the more unique customers there. So we are happy that we are getting more traction to the online products. So combined, the model that we see is that we when people are leaving, for instance, TV, we would like to make sure that they come our way. And hopefully, when they go back to TVs, it will also be to our content.
Okay. Thanks. And just one final I
mean for me as a consumer it would make sense to have just one big paid platform or play platform in Sweden, for example, with you and your competitors on the same platform. Is that something that you see for the future to drive the bigger volumes?
Of course, we would love to host such a product goes without saying.
Okay. Thanks.
Our next question comes from Stefan Nelson of SEB. Please go ahead.
Thank you. Hi, Jurgen Mathias. Following up on Martin's question first, just could you give us maybe your best guess or assessment on how the over time the linear view and decline will evolve in percentage points? And how much do you think that you can catch up on the online side of that? And how much will be kind of taken by other competitors?
And topping up that with how much do you think that the market can stand of price hikes over time for linear advertising?
Yes. Hi, this is Jurgen. I think it isn't we don't know. And the reason why I say we don't know is because you have a market declining in Sweden in the second quarter when it comes to pot level. You have a market in Norway going up.
You have basically all our markets in Eastern Europe, the pot level increases. So I think what we are focusing on and our products, what they are designed to do is to capture both, to capture the linear world and to capture the online world. So as I said as well, we have our new Reach product as well, meaning that we have a broader product now to the advertisers, which we can combine, for instance, with our linear TV channels. So we see that as a combination, just not isolated free and online, but it is a combined product. And all the media agencies we are talking to, they do forecast that the offline the linear world and the online video world is set to have very strong growth.
And that is our focus. So I cannot give you any last year, I can tell you the pot level declined 1% in Sweden and then it grew again in Q1 and now it's down again in Q2. So it is very volatile. But it's as I said, things we have seen the last couple of years and that is why they invested so heavily in the online world.
Sure, sure. I understand. Just kind of trying to get the big picture. If you're kind of when you're all talking about balancing costs, if you're kind of planning for a free to air business that is growing in total or if now this combined operations has more of a flat development and planning your costs for that situation more. It doesn't sound like it when I hear you now that you're more seeing this as a growth area still.
No. Of course we do see our feature operation as a growth area. It goes without saying. The problem is right now that the markets are down. We see, of course, market growth in other territories as well.
And it was also forecasted to grow in Sweden, but it looks like right now that the market was down 2% in Q2, but it's still forecasted to grow for the full
year by
IIM. So and again, when I think it's important to look at the combined setup because if we only would have our free TV business, then we will not have a chance to capture all the new trends in consumers, meaning that when they go online, we'll not have a product. And that is exactly why we have invested. So when you look at our content, it travels on 3 TV, it travels on our AVOD services, on our SVOD services and so forth. And I think that for instance, the Olympics was a good demonstration of that where we had free TV content, pay TV content, we launched new channels, we had it online as well.
So it's not for us to save money on content. It is to make sure that we have the right content for the different platforms, and that is what we are looking at right now. That's also why we invested as well with Viacom. We bought Viacom content for our AVOS services in order to have a bigger product, bigger reach product. We have teamed up with a lot of international players as well to be able to make sure that we can sell on their platforms as well when people go on to them in Sweden and other territories.
So it is an area where we would like to do much more. And free TV will continue to do good, as I said. It is a reach media and it is 80% of the population is reached by Fiji as well. And it is not something which will stop all night.
Okay. Okay. Makes sense. Then my second question regarding the Russian ad ban that your assessment is that the sales impact could be somewhere €50,000,000 Is that also what you would see running through the P and L down to the EBIT line as well? Or is there some kind of margin to consider there?
Yes. What we said as well is that when we look at it right now, still it is early days and we need to understand the full say,
50
say, 50%, as we can see right now, is going to the EBIT line. But of course, something will happen in the market. I don't know if everybody will stay in the market, meaning that it might be so that we have the chance to sell more and so forth. And that is something we do not have under control yet. And again, it is next year.
So we still have 6 months or so to find out how we mitigate. Of course, it is irritating that it is happening. It goes without saying we were very proud of our advertising business. But then it will benefit CTC hopefully that there will be more advertising for FreeTV in Russia.
Okay. I know you said 2 questions. I just have to ask. Your DTH business that's declining, I mean what is preventing you and Telenor to take a step in this business which obviously has huge synergies on the cost side?
I don't know what that we sit together properly and find out how that should look. I think that has been discussed for many years now. And as I said, I think quite important for us is that we are focused on the business that we can control and business that we can do something about. And that is the businesses that we are progressing with right now and developing as you can see was the best sales quarter ever for us. So we are focusing on the stuff that we can control.
But you still expect that this to happen eventually or
I have always said it we have always said that it's we have there's no reason for having 2 DJ's platforms in the Nordic.
Our next question comes from Mikael Lasen of Carnegie. Please go ahead.
Yeah. Hi. Maybe I can continue on the first topic here with the onlineoffline. And if you can maybe comment on how we can monitor this ahead. We know that TV viewing is declining slightly, but also that the cost side is increasing.
But the top line is more difficult to monitor. Have you any comments on this?
Can you clarify? I'm not really sure I understand the question.
Yes. The problem is that we the cost for MTD X, for example, we know that quite well, but not the performance in terms of sales.
Okay. So I think the simplest way to monitor on an ongoing basis is the statistics and the market and so on. It's really a mess and IRM that you probably multiple already know. I think that and that's the only really thing that you can see in terms of movements in the market what trends are and so on. The started streams, share viewings and so on.
We don't break up our online revenues versus the linear revenues, because as Ergen also said, we start selling them in packages now as well. So it becomes more and more blurry over time to which one it was. Lost. The total that you're saying is looking okay.
All right.
And can you maybe also talk in more detail about how what the M2Dx is actually doing, what they have been doing this quarter?
Yes, I can do that. They have been doing a lot. And of course, when we see such a growth in the online world, of course, we need to make sure that products are state of the art. They recently made a big deal with an American company who can make sure that we can monetize and we can correctly on all these customers coming in and also to provide them with a good user experience. SGX has developed Bioplay as well.
We constantly develop the user experience on Viaplay. As you know, it's very important for us, not only the content is strong, but also the user experience. They have launched e sport. They have launched a new food vertical together with Splay and I can continue. So it is very exciting times right now.
And some things are doing extremely well and you will see that going forward, of course, and something we will try would probably not work that well and these things will close down. So it is very much supporting all the business that we have in all our territories and we have very good growth when it comes to the online business there. And then, of course, create some global products like the e sport product became overnight because it has bigger traction outside our normal markets than inside where we actually marketed it. So I don't know if you want more specific, but I hope they have a pipeline of interesting future product as well, which will surprise the consumers.
Okay. Thanks. And my last question, if I may. NICE, MTD X-ray, that side grew quite a lot this quarter. Can you explain the drivers ahead?
How we should look at the coming quarters? It's quite volatile.
It is quite volatile. I think it's a lot of seasonality in this business as we discussed before. I think the key driver right now has been a lot of drama. They've been extremely successful, as Jurgen I think mentioned as well on the drama side. And of course, that is driving a lot of revenue top line, but the margins are probably lower, although they, of course, bring in additional profits to the overall business.
Business. So I think that yes, we expect them to do a lot more strong content and they'll be able to sell that more to both our channels and other channels.
Okay.
Our next question comes from Bille Darr of Danske Bank. Please go ahead.
Thank you. I was just wondering on PayTV Nordics. I noticed that the underlying cost base has come off in terms of growth in Q2. Is that mainly driven by lower promotion cost? Or could you
just elaborate a bit on what we should expect going forward?
I think to some extent, what you see is a little bit of tactical if you take one step back, I think we increased cost last year, for example, to a higher level. Then we had the Olympics in Q1. So obviously, it's natural that it's coming down a little bit in Q2 now. I think but having said that, of course, there are some quarters you want to expand a little bit more marketing and sales and you hold back slightly a bit. So it's going a little bit up and down, but it's not it's coming down slightly from last year's levels and the Olympic effect.
Okay. And then and also could you remind us if there's any major sports rights that are up to be sort of up to be renewed or going
to mature over the coming 12 months that we should be aware of? Yes. There are constantly some in the markets. I think the latest one was Danish Football, was Danish League, which we managed to prolong for 6 years, which was quite an achievement. So it is an ongoing discussion about rights and when is it good for the rights holder to put them on the market and so forth.
But we have I think we have good models around the price that we're having. So we are confident when they come on the markets.
And then a final question. I might have missed that, but what was sort of the EBIT contribution, the EBIT loss through MTJAK in this quarter?
I think we discussed before around €150,000,000 €160,000,000 annually that we're investing in that and roughly equal across the 4 quarters. So I think that's I don't have the exact number, but that's still the value.
Okay. Thank you.
Our next question comes from Rasmus Engeberg of SHB. Please go ahead.
Yes, hi. I wanted to ask you first about this business, the NICE MTG XN Radio. I think you said in the previous call that you thought that could be around breakeven for the full year. Is that still doable, you think?
I think we what we said was that our ambition was that we will have it in breakeven and making money in this segment, which is still the ambition, I think. But we'll see what happens.
How is the seasonality there? The Q3 in line with Q2? Or is it much worse or much better? There's so many different units in there. I think
it's a little bit like free TV where Q4 is stronger than Q3
in the second half. Okay. And then Q3 is weaker than Q2 or the same or? Yes. Okay.
Good. And then also with regards to the Czech Republic, do you think that comps are easing in the second half? It's kind of difficult to know whether one should look at just 1 year back or 2 year back in terms of that. And so what is your sort of take on the base comps or the rate of decline in the Czech Republic for compared to the first half?
I think the main comp that we should remember is that in the Q4, we had quite high spend, particularly in Czech. So there you will have an easier comps, I think. Otherwise, if you look at if you strip out 2013, which was a very, very strong year and you exclude the comps to 2013 and take versus 2012, because you still see that it's a valid it's valid to compare with 2012.
If I may, just there seems to have been some rather significant cost cutting in free TV emerging markets in this quarter compared to the Q1. Is this impacted by some one off because of the World Cup? Or have you set reset your cost base lower in this operation?
No. I think it's Jurgen, as I said before, including Scandinavia as well, we're obviously looking at what the markets are doing. We're trying to balance and looking at the efficiencies on the spend we have. We're investing, of course, in the digital space at the same time. So that's the only thing that it is.
It's nothing fundamental change of philosophy. I think.
I suppose that there were I mean my question really is, I suppose there would have been reasons to hold back something in the second quarter given the World Cup, which is a fairly tough comp?
Yes. But not there's not a major effect. I think that in Okay. All right. Thank you.
Mark,
We will take our next question from Adrien Dessan Hillaire of Exane. Please go ahead.
Hello, guys. Good afternoon, everyone. So a couple of questions. 1 is more focused on the short term and one is more on the long term actually 2 on the long term. So on the short term, Jorgen, I think you referred to the forecast for the full year in Swedish advertising and pointing to growth.
Do you have any indications that short term question. And the 2 long term questions. One is, can we get some explanation about why the number of MiniPay subscriptions went down in this quarter? I don't think it has happened many times. So maybe any change in market trends here?
And thirdly, and this is really more of a long, long term questions, many of your peers in Europe are investing in multichannel networks. I was just wondering what your thoughts around this kind of business were and if you see this as an interesting area of investment and development.
Yes. First on Q3, it is still early days. And we I have nothing else for Q3 than IRM. And just to remind you that IRM for Q3, they believe that the margin will go up with around 0.5%. That is what they have said for Q3.
When it comes to the contracts pay, it is lost contracts in Slovakia and Ukraine. I think still important is, of course, that we are up year on year, but we have lost 2 contracts in Slovakia and Ukraine. And when it comes to the multichannel networks, it's very interesting actually then. And luckily, we managed to team up with the biggest multichannel network in Sweden called Splay, where we managed to become an investor. And it is, of course, an area which we are looking at right now.
It goes without saying that it is very interesting to see what is happening in this area and also with the content that we are having. So I think that was your question. And just one last thing, if you look at the MiniPay business as well, I think interesting now as well is, of course, that we moved the position forward with the acquisition of Trades. So now we are we have gone as well from 38 countries to 131 countries where they have some kind of relationship with cable operators. And of course, we hope that we will be bringing our current content there as well to many of these territories.
There's an opportunity for us, of course. And now with trade as well, we are moving around 131,000,000 subscriptions. So that has actually moved our positions forward quite a
Sure. Well understood. And I think it's interesting that TRACE being a French company will be recorded in the emerging markets, but fair enough.
I think they have big also in France. So now we are now we have a lot of customers in France as well. There's a good reason for coming to Paris. That's nice.
Yes. Thanks, Jorgen.
Our next question comes from Bile Dhar of Danske Bank. Please go
Yes. I just wanted to sort of a reminder of since you consolidated the FreeTV emerging market a couple of I think it was 1 year ago or maybe even 2. Sort of the profitability development in Bulgaria and the line drivers in that unit as a whole?
I think both of them the way this segment works is that we're investing in some of our areas like Ghana and Tanzania and those kind of things. And then you have growing profit in Bulgaria and the Baltics, and in Czech as well, but now not probably the last last year we had lost some revenues of course. But longer term compared to 12, 11% and 10% of course Czech is going quite well as well.
And sort of Bulgaria, could you give us any sense for, so you said high single digits or low teens? How should we No,
I think we don't if you look at the profitability, the only thing I can say is that we're doing quite well in Bulgaria. And we are very we've built and our team there has been built a very, very strong product. And we think that online we are doing fairly well in the Nordic countries. In Bulgaria they are extremely strong on the online side and one of the largest online sales companies in the country. So they're doing well.
Okay. Thank you.
Our next question comes from Rasmus Enberg of SHB. Please go ahead.
Yes. Hi. I just wanted to ask you in retrospect, do you think that TV companies you included sold yourself far too cheaply in the upfront agreement, I mean, considering the development we have right now where spot prices appear to be very high, but there's nothing to buy? That's the first question. And the second question is just on the working capital situation we have in this quarter.
Is that going to reverse in the 3rd or 4th quarter? Or how should we look at that?
I think the hindsight is always easy to look back and of course then we all should have increased prices a bit more because there's this shortage of TRPs in the market. But if you look at it, no one expected that in that way. So it's very difficult for anyone to do it actually at that point in time probably. But I think but as we discussed before pricing power is
or should be very, very strong
for broadcasters in a supply demand imbalance. On the working capital, yes, with the seasonality going up and down in this quarter, I think compared to previous years, we had weaker working capital. And that was mainly due to the fact that we had some prepayments of programming rights and some sports rights as well. So that will swing back in the second half. But it's difficult to say whether Q3 or Q4.
But second half we expect a much stronger development of working capital than we've seen this quarter.
And just to come back to the first question, is it fair to assume that you and your competitors are going to be fairly aggressive in asking for price increases for next year? It seems to me like a fairly logical thing.
I think the which you may all remember as well that we're not market leaders. I mean we are not market price. We're not deciding price in the market to that extent. So that's the market leader normally doing that. But we would of course hope that they increase prices.
They didn't do that this year I think so. But it's not that to us entirely.
Thanks.
Our next question comes from Stefan Nelson of SEB. Please go ahead.
Thanks. I just maybe I missed this, but I just noted that you have raised prices in Norway on the diesel side again in June. What are the prospects of doing the new increase in Sweden especially because it's a year ago right there as well?
No. What we can say is, of course, that you constantly look at if you are priced right. That goes for our DJH product, that goes for whatever we do via plane and so forth. So it is an ongoing analysis to see how can we improve the products, what can we buy to make sure that there's stronger traction to the product, so they become more value to the consumer. So that this is this course constantly an ambition for us to make sure that we have so strong products, so we can continue to increase the prices on them.
You don't have any planned price hikes for Sweden or not that you want to talk about at least or?
No. As I said,
it is a constantly analysis when what kind of content do we get in, how does it look like, what does competition do and so forth. So there's many factors when we look at the prices. In general, of course, we are happy with the products that we're having. And of course, that's also why that we are increasing prices regularly.
Okay. Thanks.
Our next question comes from Martin Arnell of ABG Sundal Collier. Please go ahead.
Yes. Hi, again. I have a question on the balance sheet and your buyback mandate. Could you just tell us what would have to happen for you to start buying back your own share? And I'm just trying to get a feel for how you view the potential to use the balance sheet ahead.
I think nothing has changed from before. I think, and that's probably remember that we have used our mandates before. I think at this time, so I think as well it's good to be to have a strong balance sheet. It gives you opportunities. But in being more specific than that, I think it's not I don't want to get a specific view right now.
It's a Board discussion as you all know. And we have the mandate, so but we have not decided yet to use it. So we will see.
Okay. Thank you.
That concludes the question and answer session. I will now hand the call back to Madsen Lindman for his concluding remarks.
Thank you, operator, and thank you all for your time today. We will announce our Q3 results on October 23, and I look forward to keeping you up to date with our progress during the coming weeks months of course. We typically have a Capital Market Day at this time of the year. You have noticed that we have not had one this year. This is due to the change in our corporate calendar, but we will be hosting a Capital Market Day in the Q4, and we'll get back with the dates.
So thank you for your continued interest in Geely, and I wish you all a wonderful summer.