Modern Times Group Q1 2019 Interim Report

Modern Times Group successfully transitioned into a pure-play digital entertainment and gaming entity during the first quarter of 2019, following the formal demerger of Nordic Entertainment Group. This strategic realignment positions the company to focus exclusively on its esports and gaming verticals, supported by a robust capital base bolstered by the spin-off and the divestment of its stake in Nova Broadcasting Group. These corporate actions generated significant capital gains, providing the necessary liquidity to pursue further investments in global digital entertainment.

The company’s operational performance reflects a period of stabilization and targeted growth. Net sales reached 967 million SEK, with the gaming division contributing 604 million SEK. While the gaming segment experienced a slight organic decline, a 13% increase in mobile revenue successfully offset weaknesses in browser-based titles. Management has responded by concentrating resources on high-performing titles to improve user metrics and EBITDA margins. Simultaneously, the esports division achieved 9.6% organic growth, demonstrating resilience despite a seasonally light event schedule and ongoing reliance on partnerships with game publishers.

Financial reporting for this period incorporates the adoption of IFRS 16 accounting standards, which introduced new lease liabilities and asset valuations to the balance sheet. Despite an EBIT loss of 126 million SEK, the organization maintains a positive outlook, targeting mid-teens organic sales growth for the full year. Success remains contingent upon the company’s ability to consistently deliver hit titles within its gaming portfolio and maintain strong collaborative relationships within the competitive esports ecosystem. This transition marks a definitive shift toward a leaner, digitally focused business model aimed at long-term expansion in the global gaming market.