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MTG Q2 2018 Financial Results

Key insights

7 takeaways

01
MTG achieved 9% organic sales growth and a 12% profit increase in Q2 2018, marking the eighth consecutive quarter of at least 5% organic growth.See it on page 3
02
Digital sales surged 76% during the quarter and now account for 36% of total group revenue.See it on page 11
03
The MTGx segment drove significant expansion with a 44% increase in esports revenue, fueled by strong performances from ESL and DreamHack.See it on page 8
04
The company is undergoing a structural split into two entities: MTG (esports and online gaming) and Nordic Entertainment Group (traditional media and studios), though the timeline has been delayed by shareholder Kinnevik’s decision to distribute its shares.See it on page 2
05
Nordic Entertainment maintained consistent growth across free-to-air and pay-TV platforms, while MTG Studios saw a sales decline due to production and event scheduling.See it on page 5
06
The International Entertainment segment is actively optimizing its portfolio through the divestment of assets like Trace and the pending sale of Bulgaria’s Nova.See it on page 7
07
MTG absorbed SEK 32 million in transaction costs related to its corporate restructuring while maintaining a stable leverage position.See it on page 11

Summary

MTG’s second quarter 2018 financial results demonstrate sustained momentum, characterized by 9% organic sales growth and a 12% increase in profit. This performance marks the eighth consecutive quarter of at least 5% organic growth, driven largely by a 76% surge in digital sales, which now constitute 36% of total group revenue. Despite incurring SEK 32 million in transaction costs related to a planned corporate restructuring, the company maintained a strong financial trajectory.

The group’s operational segments exhibited varied performance. Nordic Entertainment delivered consistent growth across both free-to-air and pay-TV platforms, bolstered by sports content and the Viaplay service. Conversely, MTG Studios experienced a decline in sales due to production scheduling and event timing, though it continues to focus on scripted drama and branded entertainment. The MTGx segment saw significant expansion, with esports revenue rising 44% behind strong performances from ESL and DreamHack, while the International Entertainment segment focused on portfolio optimization through the divestment of assets like Trace and the pending sale of Nova in Bulgaria.

Strategic efforts remain centered on splitting the organization into two distinct listed entities: MTG, which will house esports and online gaming assets, and Nordic Entertainment Group, which will focus on traditional media and studio investments. While the company remains committed to this separation, the timeline has faced delays following a decision by major shareholder Kinnevik to distribute its MTG shares. Overall, the company maintains a stable leverage position as it navigates this transition, balancing ongoing investment in digital growth with the structural reorganization of its diverse entertainment portfolio.