Storytel Touts Q4 Results in a ‘Truly Remarkable Year’

From Publishing Perspectives:

Even as the level of competition increases for the publicly traded Storytel in many markets, its year-ending 2022 report is resoundingly upbeat, the company’s CEO, Johannes Larcher, calling it “a truly remarkable year for Storytel.”

Nevertheless, as Katy Hershberger has pointed out at Publishers Lunch, the company has tempered shareholder enthusiasm, it seems, by suspending its usual pattern of offering guidance for future performance. When Larcher tells  investors, “We will not be guiding specifically for 2023,” it sounds to some investors like another shoe falling.

Among the fourth-quarter highlights Storytel offers in its report:

  • For the year, net sales rose 22 percent, to 3.2 billion Swedish kronor (US$303 million)
  • Quarter over quarter, streaming revenue was up 23 percent from Q4 2021, to 742 million Swedish kronor over 605 million kronor last year
  • This streaming percentage jump rises to 27 percent when the phase-out of Russian operations (begun in Q1) is excluded from the calculations
  • Group net sales increased by 17 percent from Q4 2021 to 867 million Swedish kronor over 2021’s 741 million kronor
  • A gross profit level of 322 million Swedish Kronor (over 282 million kronor), equaling a 37.2-percent margin as compared to 38.1 percent in 2021
  • EBITDA of 39 million Swedish kronor equaling a 4.4- percent margin
  • EBITDA excluding items affecting comparability of 53 million Swedish kronor equaling a 6.1-percent margin

It’s interesting that Larcher talks of the company being “increasingly focused on content as one of the core pillars of our strategy.” As Publishing Perspectives know, Storytel has been proactive for many years in generating new audiobook content in markets it opened with relatively thin audio catalogues. “With a dedicated global content team in charge,” Larcher writes quite early in his statement, “we aim to bring more and widely appealing content to our audiences, and we are expanding our activities in the areas of original and exclusive content.”

He goes on, “In 2022, Storytel Books and our leading world-class audiobook and ebook publisher StorySide released more than 10,000 titles, with more than 80 percent of these being StorySide releases including 150+ Storytel Original audiobooks. Crime, fiction, romance and thrillers remain the most coveted genres among our customers, with romance, thrillers and nonfiction showing the strongest growth.

“We were also happy to see the 2022 Nobel Prize in Literature winner, Annie Ernaux, capture the hearts and minds of Storytel customers, delivering strong sales for our publishers in Sweden and Finland, where Storytel Books holds exclusive rights to her works.”

The “largest driver of our overall cost of doing business,” Larcher says, is “the overall cost of content.”

And while no one in publishing is going to faint at the news that romance leads the way, it’s gratifying to hear some references to content and categories in the context of this report. One of the more interesting high-level discussions about audiobooks in general and subscription services in particular is about generational forces. Young consumers may well be in many areas more readily wooed by subscription models and are, of course, frequently the leading core of buyers in these most populist genres.

Link to the rest at Publishing Perspectives