Modern Times Group Q3 2021 Financial Results

Key insights

5 takeaways

01
Modern Times Group achieved 16% organic pro forma net sales growth in Q3 2021, supported by a 21% adjusted EBITDA margin.See it on page 9
02
The gaming division reported a 63% increase in net sales at constant currencies, driven by the acquisitions of PlaySimple, Ninja Kiwi, and Hutch.See it on page 3
03
Mobile platforms now account for 73% of gaming revenue, with the company implementing a new central organizational structure to drive synergies in user acquisition and data analytics.See it on page 5
04
The esports division saw a 55% rise in net sales due to a full event schedule and improved partner sentiment, with plans to return to live audience events in 2022.See it on page 7
05
Despite significant cash outflows for the PlaySimple acquisition and incentive program settlements, the company maintains a stable financial position while focusing on portfolio diversification.See it on page 10

Summary

Modern Times Group achieved record financial results in the third quarter of 2021, characterized by a 16% organic pro forma net sales growth. This performance was driven by a successful buy-and-build strategy, which significantly expanded the company’s gaming portfolio through acquisitions such as PlaySimple, Ninja Kiwi, and Hutch. The gaming vertical reported a 63% increase in net sales at constant currencies, while the esports division saw a 55% rise in net sales, bolstered by a full event schedule and improved partner sentiment.

The gaming segment has successfully transitioned toward a more diversified revenue profile, reducing dependency on individual titles. Currently, 73% of gaming revenue is generated by mobile platforms, with a geographic footprint heavily concentrated in Europe and North America. To capitalize on this scale, the company has implemented a new central organizational structure, appointing dedicated leadership to oversee financial and marketing synergies across its various gaming subsidiaries. This integration aims to leverage shared capabilities in user acquisition, data analytics, and cross-promotion to accelerate growth.

Esports operations demonstrated solid performance during the quarter, with adjusted EBITDA margins showing improvement. The company is actively preparing for a return to live audience events in 2022, maintaining strategic investments in competitive mobile gaming and key tournament circuits. Despite significant cash outflows related to the acquisition of PlaySimple and the settlement of long-term incentive programs, the group maintains a stable adjusted EBITDA margin of 21%. Looking ahead, the company remains committed to its growth strategy, focusing on further portfolio diversification and the normalization of live esports operations.