Modern Times Group Q2 2017 Interim Report

Modern Times Group demonstrated strong financial momentum during the second quarter of 2017, characterized by a 5% organic sales growth and a 9% increase in operating profit for continuing operations. This performance reflects a successful strategic pivot toward digital entertainment, underscored by the full consolidation of InnoGames and the acquisition of Kongregate. These investments, alongside a commitment to expanding streaming services and esports, serve as the primary engines for the company’s ongoing digital transformation.

The MTGx segment experienced a substantial 70% year-over-year sales increase, largely attributed to the integration of InnoGames. While this segment’s operating income remained negative due to heavy investment cycles and a seasonal dip in esports event volume, the broader group maintained a solid financial foundation. Total operating income reached SEK 369 million, and the company concluded the quarter with a robust liquidity position of SEK 2,167 million in cash and cash equivalents. A stable leverage ratio of 1.7x net debt-to-EBITDA further supports the company’s capacity for continued expansion.

Corporate activity during this period included the divestment of non-core assets in the Czech Republic and the Baltics to streamline operations. While capital employed rose to SEK 7,463 million, the Return on Capital Employed adjusted to 19%, reflecting the impact of recent large-scale acquisitions. Governance updates from the 2017 Annual General Meeting confirmed a dividend payout of SEK 12.00 per share and the introduction of a new share-related incentive plan, signaling management’s focus on balancing aggressive growth with shareholder returns. These developments collectively position the organization to navigate the evolving global digital media landscape through a diversified portfolio of gaming and streaming assets.