MGI - Media and Games Invest SE: Solid Q1 2023, 4% Revenue Growth Driven by +8% from Advertising and -6% from Games, adj. EBITDA +9% Outgrowing Revenues due to Cost Reductions, Growth Guidance 2023

MGI - Media and Games Invest SE: Solid Q1 2023, 4% Revenue Growth Driven by +8% from Advertising and -6% from Games, adj. EBITDA +9% Outgrowing Revenues due to Cost Reductions, Growth Guidance 2023

• Revenues of 68.8 mEUR in Q1 2023 (Q1 2022: 65.9 mEUR)
  • 4% overall increase, 1% from FX adjusted Organic Revenue Growth1.
  • 8% overall growth from programmatic advertising partly offset by a decline in in-game-item-sales revenues of -6% following the divestments of non-strategic games in Q4’22.
  • +16% year-on-year increase in total large Software Clients2 from 479 to 557 drives growth in the programmatic advertising revenues and builds a strong base for further growth in a soft advertising market.
  • Gaining market share, MGI via Verve achieves 12% Market Share in North America on Android In-App-Advertising and 6% on iOS In-App-Advertising in accordance with Pixalates Market Share Report.

• Adj. EBITDA3 of 19.1 mEUR in Q1 2023 (Q1 2022: 17.6 mEUR)
  • 9% overall adj. EBIDTA increase with an improved adj. EBITDA margin4 of 28% (Q1 2022: 27%).
  • Adj. EBITDA increases faster than the revenues due to efficiency gains with reduced tech costs after the integration of several acquired tech platforms.
  • In addition, a streamlined games division leads to further cost reductions in Q1’23 and the following quarters.

• Financial Growth Guidance for the Fiscal Year 2023
  • Revenue with a range of 335 – 345 mEUR (FY 2022: 324 mEUR), which reflects an increase of 3-7%.
  • Revenue Guidance 2023 would be 350 – 360 mEUR if we would assume a stable fx rate compared to 2022 as well as adding back the games divestments. This reflects a pro-forma revenue increase of 8-12%.
  • Adj. EBITDA with a range from 95 – 105 mEUR (FY 2022: 93 mEUR), which reflects an increase of 2-13%.

May 31, 2023 (08:00 CEST) - Media and Games Invest SE ("MGI" or the "Company", ISIN: SE0018538068; ticker M8G; Nasdaq First North Premier Growth Market and Scale Segment Frankfurt Stock Exchange) publishes its Interim Report Q1 2023 and its Financial Guidance for Fiscal Year 2023.

A Word from THE CEO Remco Westermann

“I am pleased to report that in the first quarter 2023 we were able to further grow our company despite the overall continuing soft global advertising market. Despite persistent tough market conditions, we achieved a year-over-year revenue growth of 4% driven by 8% year-over-year growth from our programmatic advertising activities which were offset by a decline in games revenues of 6% year-over-year following the divestment of smaller and non-strategic games in Q4 2022. The fx adjusted organic growth amounted to 1%. Based on revenue growth in combination with our focus on cost optimization, our adjusted EBITDA increased to 19.1 million euros and our adjusted EBIT increased to 15.2 million euros, resulting in adjusted EBITDA and adjusted EBIT margins of 28% and 22%, respectively. Our results reflect a very solid financial performance, especially when we consider that Q1 2022 is most likely the toughest period to compare against in 2022, given that this quarter was still unaffected by games divestment as well as delays and declines in advertising budgets.” says Remco Westermann, CEO of MGI Group.

HIGHLIGHTS Q1 2023

• Net Revenues amounted to 68.8 mEUR (Q1 2022: 65.9 mEUR), an increase of 4% compared to Q1 2022. 1 percentage point was contributed by FX adjusted organic revenue growth.
• Adj. EBITDA amounted to 19.1 mEUR (Q1 2022: 17.6 mEUR), an increase of 9%.
• Adj. EBIT5 amounted to 15.2 mEUR (Q1 2022: 13.6 mEUR), an increase of 12%.
• Adj. Net Result6 amounted to 3.1 mEUR (Q1 2022: 5.7 mEUR), a decrease of -46%, driven by higher interest expenses.
• Cash and Cash Equivalents amounted to 130.0 mEUR (December 31, 2022: 150.0 mEUR) and remained strong despite a reduced use of the securitization program and seasonal cash outflows for the payment of Verve publishers following a seasonal strong fourth quarter. 
• Net Interest-Bearing Debt7 as of March 31, 2023 amounted to 288.3 mEUR (December 31, 2022: 273.9 mEUR).
• Leverage Ratio8 amounted to 3.0x as of March 31, 2023 (2.9x as of December 31, 2022) and remained stable.
• Earnings Per Share (EPS) amounted to EUR 0.00 undiluted / diluted (Q1 2022: EUR 0.02 undiluted / diluted). EPS adjusted for PPA-amortization amounted to EUR 0.02 undiluted / diluted (Q1 2022: EUR 0.04 undiluted / diluted).

SELECTED KEY PERFORMANCE INDICATORS, MGI GROUP

GUIDANCE FOR FISCAL YEAR 2023

Our guidance for FY 2023 is based on the assumption that the softness in the advertising market based on the soft overall economic situation, will continue for the remainder of the year. Based on further product innovation in the data field but also several new platform features being launched as well as onboarding and scaling new customers we expect to further gain market share and to grow our net revenues. In combination with cost reductions initiated in 2022 we also expect to even stronger grow our profitability which should also support a reduction in the net leverage ratio.

Depending on the overall macroeconomic development, advertising spend might also develop more positively, which could have a positive impact of MGI’s financial outlook.

The Interim Report Q1 2023 is available on MGI’s corporate website at www.mgi-se.com in the Investor Relations section. The financials have not been subject to review by the Company’s auditor.   

Notes - All Notes are defined as in the Year End Report 2022 of MGI

Note (1) Organic Revenue Growth: Organic revenue growth does include growth calculated on a year-over-year basis from companies being within the Company for twelve months or more. What is excluded is the revenue growth from acquisitions that have not been part of the group in the last twelve months, and the decline from sales stemming from closures / divestment of whole businesses.

Note (2) Number of new software clients: software clients with gross revenues exceeding 100k USD

Note (3) Adjusted EBITDA: Reported EBITDA excluding one-time costs. EBITDA adjustments amounted to 1.6 mEUR and were made largely for one-time costs associated with the relocation of the headquarters to Sweden, M&A expenses, as well as the ESOP program.

Note (4) Adjusted EBITDA / EBIT margin: Adjusted EBITDA / EBIT as a percentage of net revenues.

Note (5) Adjusted EBIT: Earnings before interest and taxes excluding one-time costs and PPA-amortization resulting from M&A related purchase price allocations. For adjustments, please see footnote 3 above.

Note (6) Adjusted Net result: Net result excluding PPA amortization13

Note (7) Net interest bearing debt: Interest bearing financial indebtedness excluding shareholder and related party loans minus cash and cash equivalents.

Note (8) Leverage ratio: Net interest-bearing debt divided by adjusted EBITDA for the past 12 months excluding shareholder and related party loans.

Note (9) EBITDA: Earnings before interest, taxes, depreciation and amortization.

Note (10) EBITDA margin: EBITDA as a percentage of net revenues.

Note (11) Adjusted EBIT margin: Adjusted EBIT as a percentage of net revenues.

Note (12) Adjusted Net result margin: Adjusted Net result as a percentage of net revenues.

Note (13) PPA-amortization: IFRS Amortization on M&A-related purchase prices which are not tax deductible.

Invitation to investor presentation

MGI invites investors to participate in the presentation of the Q1 2023 results by Remco Westermann (CEO) and Paul Echt (CFO) on Wednesday, May 31, 2023 at 10am CEST. The presentation will be held in English and will also be available on-demand on the Company’s website www.mgi-se.com.

To participate via webcast, please visit:
​ https://ir.financialhearings.com/media-and-games-invest-q1-2023

To participate via phone, please call:
​SE: +46 8 505 163 86
UK: +44 20 319 84884
For other country participants please use (toll-free): +1 412 317 6300
Pin code: 7242537#

Responsible parties

This press release contains inside information that MGI - Media and Games Invest SE is required to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact persons set out below, at the time stated by MGI's news distributor EQS Newswire upon publication of this press release.

For further information, please contact:

Sören Barz
Head of Investor Relations
+49 170 376 9571
soeren.barz@mgi-se.com, investor@mgi-se.com
www.mgi-se.com

Jenny Rosberg, ROPA, IR contact Stockholm
+46707472741
Jenny.rosberg@ropa.se

Axel Mühlhaus / Dr. Sönke Knop, edicto GmbH, IR contact Frankfurt
+49 69 9055 05 51
mgi@edicto.de

About MGI - Media and Games Invest SE

MGI - Media and Games Invest SE (MGI) operates a fast-growing, profitable ad-software platform that matches global advertiser demand with publisher ad-supply while improving results through first party data from own games. MGI’s main operational presence is in North America and Europe. Through investments in organic growth and innovation, as well as targeted M&A, MGI has built a one-stop shop for programmatic advertising, enabling companies to buy and sell ad space across all digital devices (mobile apps, web, connected TV and digital out of home), with the mission to make advertising better. MGI is registered as Societas Europaea in Sweden (registration number 517100-0143) and its shares are listed on Nasdaq First North Premier Growth Market in Stockholm and in the Scale segment of the Frankfurt Stock Exchange. The Company has two secured bonds that are listed on Nasdaq Stockholm and on the Frankfurt Stock Exchange Open Market. The Company's certified advisor on Nasdaq First North Premier Growth Market is FNCA Sweden AB; info@fnca.se.

Forward-looking statements

This release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's and the group's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company and the group operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this release, including the pro-forma financial figures addressed therein, are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements and pro-forma financial numbers are reasonable it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this release (including the pro-forma financial figures) are free from errors and readers of this release should not place undue reliance on the forward-looking statements in this release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this release, unless it is so required by law or applicable stock exchange rules.