FinancialModern Times Group
Annual Report 2017: Shaping the Future of Entertainment
201796 pages~260 min full read
Key insights
6 takeaways · ~2 min read- 01Modern Times Group achieved record financial results in 2017 with net sales of SEK 17.5 billion, representing an 8% organic growth rate and a 19% increase in operating income before items affecting comparability to SEK 1.264 billion.
- 02The MTGx gaming division doubled its revenue to SEK 2.96 billion, achieving 37% organic growth driven by the strategic acquisitions of a 51% stake in InnoGames for SEK 801 million and 100% of Kongregate for SEK 463 million.
- 03Shareholders received a total return of 33% and a record cash dividend of SEK 12.50 per share, which accounted for approximately 95% of the company's net income.
- 04The Nordic Entertainment segment remained the primary revenue driver with SEK 11.96 billion in sales and a 13.2% operating margin, while the International Entertainment segment saw a 19% profit increase.
- 05The company's balance sheet strengthened following the divestment of Czech, Baltic, and African operations, resulting in a net-debt/EBITDA ratio of 1.1 times and an interest-coverage ratio of 19 times.
- 06Operating income after comparability items fell to SEK 923 million due to a SEK 688 million goodwill impairment charge primarily associated with Zoomin.TV, alongside a 16% decline in operating income for MTG Studios.
Summary
Modern Times Group delivered its strongest results to date in 2017, posting net sales of SEK 17.5 billion—a rise of 8 % on an organic basis and 16.9 % reported—while operating income before items affecting comparability increased 19 % to SEK 1.264 billion. The performance generated a total shareholder return of 33 % and a record cash dividend of SEK 12.50 per share, representing roughly 95 % of net income. Core earnings were driven by the Nordic Entertainment segment, which contributed SEK 11.96 billion in sales with a 13.2 % operating margin, and a 19 % profit jump in International Entertainment, largely from the Nova/Trace businesses. The MTGx gaming division doubled its revenue to SEK 2.96 billion, reflecting 37 % organic growth, whereas MTG Studios saw modest top‑line growth but a 16 % decline in operating income. A goodwill impairment of SEK 688 million, primarily linked to Zoomin.TV, reduced operating income after comparability items to SEK 923 million.
The balance sheet strengthened after divesting Czech, Baltic and African operations, with total assets rising to SEK 19.3 billion and equity to SEK 5.18 billion; non‑controlling interests increased to SEK 1.39 billion following reclassifications. Financial ratios improved markedly, with the interest‑coverage ratio climbing to 19 times and the net‑debt/EBITDA ratio falling to 1.1 times. Acquisitions in 2017—51 % of InnoGames for SEK 801 million and 100 % of Kongregate for SEK 463 million—added SEK 1.24 billion of
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