Modern Times Group Q1 2017 Financial Results

Key insights

7 takeaways

01
Modern Times Group reported record Q1 2017 results with 8% organic sales growth to 4,228 million SEK and a 15% increase in profit.See it on page 8
02
Nordic Entertainment drove overall performance with an 11% organic sales increase and a 22% rise in EBIT, fueled by Viaplay subscriptions.See it on page 5
03
MTGx organic sales grew by 24%, though the division reported a higher EBIT loss due to accelerated investments in esports and digital expansion.See it on page 8
04
International Entertainment achieved an 82% increase in EBIT through disciplined cost control, despite a more modest 4% organic sales growth.See it on page 6
05
The company is executing a strategic portfolio shift, including the divestment of Czech and Baltic operations and increasing its stake in InnoGames to 51%.See it on page 12
06
Management remains on track to reach a 600 million SEK cost-savings target for the 2017 fiscal year, having already realized 25 million SEK in Q1.See it on page 10
07
MTG Studios saw a 5% decline in organic sales during the quarter, which the company attributed to the timing of production cycles.See it on page 7

Summary

Modern Times Group achieved record financial performance in the first quarter of 2017, characterized by 8% organic sales growth and a 15% increase in profit. Total sales reached 4,228 million SEK, up from 3,826 million SEK in the same period of the previous year. This growth was driven by a strategic transition toward becoming a digital video entertainment provider, supported by aggressive cost transformation initiatives that yielded an incremental 25 million SEK in savings during the quarter.

Performance across business segments was mixed but generally positive. Nordic Entertainment served as a primary growth engine, with organic sales rising 11% due to strong Viaplay subscription numbers and price adjustments, resulting in a 22% increase in EBIT. International Entertainment also saw significant gains, with organic sales up 4% and EBIT rising 82% through disciplined cost control. Conversely, MTG Studios experienced a 5% decline in organic sales due to production timing, while the MTGx division reported a 24% increase in organic sales alongside a higher EBIT loss, reflecting intentional, accelerated investments into esports and digital expansion.

The company’s broader strategic roadmap includes a shift in portfolio composition, highlighted by the announced divestment of Czech and Baltic operations and a move to increase its stake in InnoGames to 51%. Management remains on track to achieve approximately 600 million SEK in total cost savings for the 2017 fiscal year. With a focus on original content production and digital scaling, the organization maintains a stable leverage position while balancing heavy investment cycles with operational efficiency to drive long-term shareholder value.