Modern Times Group Q3 2024 Investor Presentation

Key insights

7 takeaways

01
Modern Times Group (MTG) reported Q3 2024 net sales of 1,438 SEKm, down 4% year-over-year, with an adjusted EBITDA of 390 SEKm representing a 27% margin.
02
The company maintains its full-year 2024 outlook, targeting 1–5% currency-adjusted sales growth and an adjusted EBITDA margin of 26–29%.
03
User acquisition (UA) spend increased by 17% in constant currencies compared to Q2 2024, with UA investment accounting for 38% of Q3 revenues.
04
Free cash flow for Q3 reached 334 SEKm, contributing to a 70% cash conversion rate over the last twelve months.
05
New games, including 'Heroes of History' and the upcoming 'Bloons Card Storm', now represent 16% of group revenues.
06
MTG is executing a 400 million SEK share buyback program that is scheduled to run until April 2025.
07
Revenue in the word games segment grew 4% year-over-year to 524 SEKm, supported by the localization of successful titles.

Summary

Modern Times Group’s third-quarter 2024 investor presentation outlines a transitional period characterized by strategic investments in user acquisition and a robust pipeline of new gaming titles. The company reports net sales of 1,438 million SEK, representing a 4% year-over-year decline, though revenue increased 1% sequentially in constant currencies. Despite a 13% year-over-year decrease in adjusted EBITDA, the company maintained a strong 27% adjusted EBITDA margin and a 70% cash conversion rate over the last twelve months, underscoring a stable financial foundation.

The core strategy focuses on scaling profitable user acquisition, which saw a 17% increase in constant currencies compared to the second quarter. This investment is intended to drive future growth, supported by the localization of successful word games and the upcoming launch of new titles such as Heroes of History and Bloons Card Storm. New projects currently account for 16% of group revenues, reflecting a shift toward diversifying the portfolio beyond established franchises.

Geographically and operationally, the company remains focused on the gaming sector, maintaining a disciplined approach to return on ad spend. Management reiterated its full-year outlook, projecting 1–5% organic sales growth and an adjusted EBITDA margin between 26% and 29%. The company’s balance sheet remains healthy, supported by a 400 million SEK share buyback program scheduled to run through April 2025. By balancing current operational expenditures with long-term development, the organization aims to leverage its improved portfolio momentum to secure organic growth in the final quarter of the year.