MTG Q1 2021 Financial Results

Key insights

6 takeaways

01
Modern Times Group reported total net sales of 1,064 million SEK in Q1 2021, a 9% increase when adjusted for foreign exchange.See it on page 8
02
The gaming division drove performance with a 32% increase in net sales and a 55% rise in adjusted EBITDA, supported by the integration of Hutch.See it on page 8
03
MTG acquired New Zealand-based developer Ninja Kiwi for 1,217 million SEK to secure the Bloons intellectual property and expand its tower defense portfolio.See it on page 4
04
The esports segment experienced an 18% organic decline in net sales due to pandemic-related event cancellations and reduced brand sponsorships.See it on page 6
05
The company is actively developing new gaming titles, including Rise of Cultures and Puzzle Heist, to diversify its portfolio across various lifecycle stages.See it on page 5
06
MTG maintains a cautious outlook for the remainder of 2021, expecting continued pandemic-related volatility in the esports sector while pursuing further inorganic growth.See it on page 10

Summary

Modern Times Group’s financial performance for the first quarter of 2021 reflects a bifurcated operational landscape, characterized by robust growth in the gaming segment contrasted with ongoing pandemic-related headwinds in the esports vertical. Total group net sales reached 1,064 million SEK, representing a 9% increase when adjusted for foreign exchange impacts. The gaming division served as the primary growth engine, achieving a 32% increase in net sales and a 55% rise in adjusted EBITDA. This performance was bolstered by the successful integration of Hutch and strong in-game monetization across the existing portfolio.

Strategic expansion remained a priority during the quarter, highlighted by the acquisition of the New Zealand-based developer Ninja Kiwi for an upfront consideration of 1,217 million SEK. This move strengthens the company’s position in the tower defense genre and adds the established Bloons intellectual property to its assets. Furthermore, the gaming pipeline remains active, with several titles currently in soft-launch or production phases, including Rise of Cultures and Puzzle Heist. These investments align with a broader strategy to diversify the gaming portfolio across various lifecycle stages, from new product introduction to established, high-margin titles.

Conversely, the esports segment faced continued volatility due to the global pandemic, which necessitated the cancellation or transition of major events to online-only formats. Net sales in this vertical declined by 18% on an organic basis as publisher activations and brand sponsorships remained constrained. Despite these short-term challenges, the company is actively investing in the broader esports ecosystem, including digital traditional sports and mobile-focused initiatives. The group maintains a cautious outlook for the remainder of 2021, anticipating that pandemic-related disruptions will persist while continuing to pursue both organic development and inorganic growth opportunities to capitalize on emerging industry trends.