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Modern Times Group Q3 2022 Interim Report

Key insights

6 takeaways

01
Modern Times Group completed its transition to a pure-play mobile gaming company following the divestment of ESL Gaming, which generated SEK 8,281 million in net proceeds.See it on page 19
02
The company holds a net cash position of SEK 4,695 million and has initiated a SEK 400 million share repurchase program alongside other capital return efforts.See it on page 16
03
Q3 2022 financial performance included 6% pro forma growth and an adjusted EBITDA of SEK 374 million, representing a 27% margin.See it on page 1
04
Gaming subsidiaries PlaySimple, InnoGames, and Ninja Kiwi drove a 4% year-on-year increase in daily active users.See it on page 6
05
The full-year pro forma growth outlook has been adjusted to a range of 5–6% to reflect current market trends.See it on page 3
06
Future strategy focuses on scaling the mobile-first portfolio through increased user acquisition investment and disciplined M&A activity.See it on page 3

Summary

Modern Times Group underwent a significant strategic transformation during the third quarter of 2022, pivoting toward a pure-play mobile gaming model following the divestment of its esports business. This transition yielded a substantial net cash position of SEK 4,695 million, bolstered by total net proceeds of SEK 8,281 million from the sale of ESL Gaming. The company is actively leveraging this liquidity to enhance shareholder value through capital return programs, including share redemptions and a new SEK 400 million share repurchase initiative.

Financial performance for the quarter remained robust, characterized by 6% pro forma growth and an adjusted EBITDA of SEK 374 million, reflecting a healthy 27% margin. Key gaming subsidiaries, including PlaySimple, InnoGames, and Ninja Kiwi, served as the primary engines for this growth, contributing to a 4% year-on-year increase in daily active users. While the company adjusted its full-year pro forma growth outlook to a range of 5–6% to account for shifting market trends, the underlying profitability of the gaming portfolio remains a central pillar of the organization’s fiscal health.

Looking forward, the company is prioritizing the scaling of its mobile-first gaming portfolio and increasing investments in user acquisition throughout the final quarter of the year. By maintaining a disciplined approach to mergers and acquisitions, the group aims to solidify its competitive standing within the global gaming market. These efforts are supported by a rigorous focus on operational efficiency and the use of alternative performance measures to track the long-term sustainability of its consolidated studio assets.