Modern Times Group Q3 2018 Interim Report

Modern Times Group achieved record financial performance in the third quarter of 2018, reporting net sales of SEK 4,683 million and a 3.2 percent organic growth rate. This period was characterized by a 28 percent increase in operating income before items affecting comparability, totaling SEK 340 million. The company maintained a stable financial foundation with a net debt of SEK 3,085 million and a trailing 12-month net debt to EBITDA ratio of 1.6, while sustaining a consistent return on capital employed of 17 percent throughout the first nine months of the year.

Growth was primarily propelled by the Nordic Entertainment segment and the MTGx division, the latter of which recorded its fifth consecutive quarter of EBITDA profitability. MTGx specifically saw 12.1 percent organic growth, largely attributed to the strong performance of InnoGames, which helped the segment transition from a loss in the previous year to an operating income of SEK 11 million. These gains were partially offset by strategic financial adjustments, including significant asset write-downs and impairment charges related to Zoomin.TV.

The primary objective during this period remained the successful execution of the corporate split and the subsequent separate listing of the Nordic Entertainment Group, which was scheduled for the first quarter of 2019. By focusing on operational efficiency and strategic divestments, the organization positioned itself to finalize this structural transition. These results reflect a broader effort to streamline the business model and optimize the portfolio across its diverse media and digital entertainment segments during a pivotal transition year.