MTG Q1 2023 Interim Report

Modern Times Group navigated a complex fiscal landscape during the first quarter of 2023, characterized by a 4% year-on-year decline in net sales to SEK 1,306 million. This contraction reflects the impact of difficult comparative figures and persistent headwinds within the mid-core mobile gaming sector. Despite these challenges, the company demonstrated operational resilience through strong underlying growth from its PlaySimple and Ninja Kiwi subsidiaries, alongside an encouraging late-quarter recovery at InnoGames. The organization maintains a cautious but stable outlook, projecting full-year sales growth between -3% and +2% on a constant currency basis, supported by an adjusted EBITDA margin target of 23-25%.

Financial performance metrics reveal a notable shift in profitability and user engagement dynamics. While consolidated EBIT rose to SEK 121 million from SEK 85 million in the previous year, total active user metrics faced pressure, with daily active users declining by 8% and monthly active users by 17%. This contraction in the user base was partially offset by an 8% increase in average revenue per daily active user, bolstered by the continued dominance of the Word Games franchise as the primary revenue driver. Furthermore, the company achieved a significant bottom-line recovery, reporting a net income of SEK 24 million compared to the substantial loss recorded in the same period of 2022.

The company retains a robust liquidity position, holding SEK 4,019 million in cash even after accounting for significant earnout obligations and share repurchase programs. Strategic priorities remain centered on the consolidation of the mobile gaming market and the expansion of the existing portfolio. As the firm prepares for its 2023 Annual General Meeting, it continues to balance these growth initiatives against the inherent volatility of the global mobile gaming industry, ensuring that its capital allocation strategy remains aligned with long-term value creation.