Modern Times Group Annual Report 2015

Key insights

6 takeaways

01
MTG executed a strategic pivot in 2015 to become a digital entertainment entity, highlighted by the acquisitions of esports leaders Turtle Entertainment and DreamHack.See it on page 3
02
Net income dropped significantly to SEK 251 million in 2015, down from SEK 1,172 million in 2014, due to restructuring costs, currency headwinds, and losses from discontinued operations.See it on page 33
03
Annual net sales reached SEK 16,218 million, marking a 3% increase compared to the previous year.See it on page 7
04
The company divested non-core international assets, including its stake in CTC Media, to streamline operations and reallocate capital toward digital verticals like Splay and Zoomin.See it on page 84
05
MTG managed long-term financial commitments of SEK 14,314 million in future program rights payments while operating with a workforce of nearly 4,000 employees.See it on page 18
06
Despite the decline in net income, the board proposed an increased annual dividend of SEK 11.50 per share, signaling confidence in the long-term digital strategy.See it on page 68

Summary

Modern Times Group (MTG) underwent a fundamental strategic pivot in 2015, transitioning from a traditional broadcaster into a diversified digital entertainment entity. This transformation was characterized by a deliberate reallocation of capital toward high-growth online verticals, most notably through the acquisition of esports leaders Turtle Entertainment and DreamHack, as well as investments in multi-channel networks like Splay and Zoomin. These moves were designed to secure category leadership in the digital space while the company simultaneously divested non-core international assets, including its stake in CTC Media, to streamline operations.

Financially, the company reported net sales of SEK 16,218 million, representing a 3% increase over the previous year. However, bottom-line performance faced significant pressure, with net income falling to SEK 251 million from SEK 1,172 million in 2014. This decline was primarily driven by substantial restructuring costs, currency headwinds, and losses associated with discontinued operations. Despite these challenges, the company maintained a robust financial position, supported by a syndicated bank facility and a disciplined risk management framework. The board demonstrated confidence in the long-term strategy by proposing an increased annual dividend of SEK 11.50 per share.

Operating across Europe with a workforce of nearly 4,000 employees, the company’s governance remained anchored in the Swedish Code of Corporate Governance. Management focused on integrating digital acquisitions, optimizing the asset portfolio, and managing long-term commitments, which included SEK 14,314 million in future program rights payments. While the company successfully navigated complex regulatory environments and geopolitical instability in 2015, the year served as a foundational period for its ongoing shift toward programmatic advertising, streaming services, and digital content, setting the stage for future growth in the evolving global media landscape.