Media and Games Invest: Strong Q2’22 with 37% Overall and 18% Organic Revenue Growth. Confirmation of Guidance 2022. Focusing on Organic Growth, Increasing Profitability as well as Deleveraging

Rhea-AI Summary

Media and Games Invest SE reported a 37% increase in Q2 2022 net revenues to 78.1 mEUR, with 18% from organic growth. Adjusted EBITDA rose by 38% to 21.1 mEUR. The company confirmed its full-year guidance of 295-315 mEUR in revenues and 83-93 mEUR in adjusted EBITDA despite challenging macroeconomic conditions. Strong performance in both Demand and Supply Side segments contributed to the results. The focus remains on organic growth and cost synergies to enhance profitability and reduce debt.

Positive

• Net revenues increased by 37% to 78.1 mEUR in Q2 2022.
• Adjusted EBITDA rose by 38% to 21.1 mEUR in Q2 2022.
• Confirmation of 2022 guidance for revenues of 295-315 mEUR and adjusted EBITDA of 83-93 mEUR.
• Focus on organic revenue growth and cost synergies to enhance profitability.

Negative

• Net interest-bearing debt increased to 298.8 mEUR, up from 198.6 mEUR due to acquisitions.
• Leverage ratio increased to 3.7x from 2.8x, indicating higher debt relative to EBITDA.

• Net Revenues amounted to 78.1 mEUR in Q2'22 (Q2'21: 57.1 mEUR), which is an increase of 37%, whereof 18% were driven by Organic Revenue Growth ¹ .
• Adj. EBITDA ² amounted to 21.1 mEUR in Q2'22 (Q2'21: 15.3 mEUR), which is an increase of 38%.
• Confirmation of 2022 Guidance with revenues of 295-315 mEUR and adj. EBITDA of 83-93 mEUR despite challenging macroeconomic conditions
• Focus in upcoming periods will be on organic revenue growth in combination with realization of cost and revenue synergies to further increase profitability and deleverage

VALLETTA, MALTA / ACCESSWIRE / August 31, 2022 / Media and Games Invest SE ("MGI" or the "Company", ISIN: MT0000580101; ticker M8G; Nasdaq First North Premier Growth Market and Scale Segment Frankfurt Stock Exchange; OTCQX ticker: MDGIF) today announced it closed the second quarter 2022 with 78.1 mEUR in Net Revenues, corresponding to an increase of 37% compared to Q2'21. 18% of the Net Revenue growth was contributed by Organic Revenue Growth. The adj. EBITDA for the second quarter 2022 increased by 38% to EUR 21.1 million compared to Q2 2021. Both Segments showed a very strong performance. The still smaller Demand Side Segment showed strong YoY revenue growth in Q2'22 of 104% whereof 76% were contributed by Organic Revenue Growth as a result of scaling Software Clients ¹³ with innovative advertising products such as ATOM and Moments.AI. The Supply Side Segment also showed strong YoY revenue growth of 32% in Q2'22, whereof 14% have been contributed by Organic Revenue Growth driven by more than 25 additional Publishers/Software Clients ¹³ as well as content updates in the Games Portfolio. The strong additional M&A growth of the Supply Side Segment was driven by Smaato and AxesInMotion.

HIGHLIGHTS Q2 2022

• Net Revenues amounted to 78.1 mEUR (Q2'21: 57.1 mEUR), an increase of 37% compared to Q2'21, whereof 18% were contributed by Organic Revenue Growth.
• Adj. EBITDA ² amounted to 21.1 mEUR (Q2'21: 15.3 mEUR), an increase of 38%.
• Adj. EBIT ³ amounted to 16.4 mEUR (Q2'21: 11.1 mEUR), an increase of 47%.
• Adj. Net Result ⁴ amounted to 6.4 mEUR (Q2'21: 5.9 mEUR), an increase of 7%.

HIGHLIGHTS H1 2022

• Net Revenues amounted to 143.9 mEUR (H1'21: 109.0 mEUR), an increase of 32% compared to H1 2021.
• Adj. EBITDA amounted to 38.6 mEUR (H1'21: 28.7 mEUR), an increase of 34%.
• Adj. EBIT amounted to 29.9 mEUR (H1'21: 20.4 mEUR), which is an increase of 46%.
• Adj. Net Result amounted to 12.0 mEUR (H1'21: 10.8 mEUR), an increase of 11%.
• Net Interest-Bearing Debt ⁵ as of June 30, 2022, amounted to 298.8 mEUR (December 31, 2021: 198.6 mEUR). The increase is primarily due to the cash-out of the last fixed consideration and last earn-out payments related to the KingsIsle acquisition as well as the initial purchase price payment for AxesInMotion.
• Leverage Ratio ⁶ amounted to 3.7x as of June 30, 2022 (2.8x as per December 31, 2021). At the end of Q2 2022, this ratio includes ten months of Smaato as well as two months of AxesInMotion EBITDA and is therefore overstated. Mid-term, the Company intends to de-lever to below 3.0x again.
• Cash and Cash Equivalents amounted to 125.4 mEUR as of June 30, 2022 (December 31, 2021: 180.2 mEUR) and decreased due to the final earn-out and deferred purchase price payments related to the KingsIsle acquisition as well as the initial purchase price for the AxesInMotion acquisition.
• Earnings Per Share (EPS) undiluted / diluted amounted to EUR 0.04 for the first half year 2022 (H1'21: undiluted / diluted EUR 0.04). EPS undiluted / diluted adjusted for PPA-amortization ⁷ amounted to EUR 0.08 (H1'21: undiluted / diluted EUR 0.08).

SELECTED KEY PERFORMANCE INDICATORS, MGI GROUP

In mEUR	Q2 2022	Q2 2021	H1 2022	H1 2021	FY 2021
Net Revenues	78.1	57.1	143.9	109.0	252.2
YoY Growth in Revenues	37%	90%	32%	93%	80%
EBITDA8	20.0	14.5	36.9	26.6	65.0
EBITDA Margins9	26%	25%	26%	24%	26%
Adj. EBITDA	21.1	15.3	38.6	28.7	71.1
Adj. EBITDA Margins10	27%	27%	27%	26%	28%
Adj. EBIT	16.4	11.1	29.9	20.4	54.8
Adj. EBIT Margins11	21%	19%	21%	19%	22%
Adj. Net Result	6.4	5.9	12.0	10.8	28.0
Adj. Net Result Margins	8%	10%	8%	10%	11%

The Q2 2022 interim report is available on MGI's corporate website at https://mgi-se.com/investor-relations/financial-reports-and-presentations/ in the Investor Relations section. All financials are consolidated group figures and reviewed but not audited.

A Word from Remco Westermann, CEO

"MGI continued its strong growth trajectory in the second quarter of 2022. Revenues increased 37% year-over-year and adj. EBITDA increased by 38% year-over-year. Overall, the Company's organic growth amounted to 18% year-over-year. While the challenging global macroeconomic conditions led to some softness in revenue growth due to lower total industry ad spend, MGI's business model with its integrated Ad Tech software platform and first-party games content has enabled us to generate solid financial performance in Q2 2022. We are in a market environment characterized by recession fears, inflationary pressures, rising interest rates and ongoing supply chain disruptions, which have already impacted corporate advertising spend as a result. In this environment, our key focus will now be on organic revenue growth, further increasing our profitability while also engaging in cost saving measures. We also plan for the realization of cost synergies concurrent with a deleveraging strategy. Even though our outside environment has changed, we herewith confirm our forecast for the full-year 2022 and expect revenues of EUR 295-315 million with adj. EBITDA of EUR 83-93 million.," commented Remco Westermann, CEO & Chairman of MGI Group.

GUIDANCE FOR THE FINANCIAL YEAR 2022

On February 28, 2022 Media and Games Invest SE published its initial guidance for the financial year 2022:

	FY 2021 (A)	Guidance 2022
Revenue (in €m)	252	290 - 31012
Growth	80%	15 - 23%
Adj. EBITDA (in €m)	71	80 - 90
Growth	143%	13 - 27%

On April 28, 2022 Media and Games Invest SE published its increased guidance for the financial year 2022 taking into consideration the acquisition of AxesInMotion:

	FY 2021 (A)	Guidance 2022 incl. AxesInMotion
Revenue (in €m)	252	295 - 31512
Growth	80%	17 - 25%
Adj. EBITDA (in €m)	71	83 - 93
Growth	143%	17 - 31%

Notes - All Notes are defined as in the Interim Q2 2022 Report 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 Group 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 month, and the decline from sales stemming from closures/divestment of whole businesses.}

_{Note (2) Adjusted EBITDA: Reported EBITDA excluding one-time costs. EBITDA adjustments amounted to 1.1 mEUR in Q2 2022 and were made largely for one-time costs and costs associated with the relocation, new governance procedures as well as the ESOP program.}

_{Note (3) Adjusted EBIT: Earnings before interest and taxes excluding one-time costs and PPA-amortization resulting from M&A related purchase price allocations. Adjustments consists of the EBITDA adjustments mentioned in Note 2 plus PPA amortization in the amount of 4.4 mEUR.}

_{Note (4) Adjusted Net Result: Net Income excluding PPA amortization}

_{Note (5) Net interest bearing debt: Interest bearing Financial Indebtedness excluding Shareholder and Related Party Loans minus Cash and Cash Equivalents.}

_{Note (6) Leverage ratio: Net Interest-Bearing Debt divided by adjusted EBITDA for the past 12 months.}

_{Note (7) PPA-amortization: amortization on M&A related purchase prices which are not tax deductible}

_{Note (8) EBITDA: Earnings before interest, taxes, depreciation, and amortization.}

_{Note (9) EBITDA margin: EBITDA as a percentage of net revenues.}

_{Note (10) Adjusted EBITDA margin: Adjusted EBITDA as a percentage of net revenues}

_{Note (11) Adjusted EBIT margin: Adjusted EBIT as a percentage of net revenues}

_{Note (12) Revenue: takes into account the discontinuance of MGI's affiliate and influencer marketing business with a negative revenue of c. 20 mEUR}

_{Note (13) Software Clients: Advertisers and Publishers using the advertising products which MGI offers including the Demand and Supply Side platform}

Invitation to MGI's Capital Markets Day

MGI invites investors to participate in the presentation of the Q2 2022 results at the MGI Capital Markets Day held today, Wednesday, August 31, 2022 at 10.30 am CEST. The presentation will be held in English and will also be available on-demand on the Company's website www.mgi-se.com.

Weblink
https://tv.streamfabriken.com/mgi-cmd-2022

Participant dial in number

SE: +46850558358

UK: +443333009274

US: +16467224956

DE: +4969222220377

Responsible parties

The information in this release has been made public through the agency of the responsible persons set out below for publication at the time stated by MGI's news distributor EQS Newswire at the publication of this release. The responsible persons below may be contacted for further information.

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 Media and Games Invest SE

Media and Games Invest SE ("MGI") is an advertising software platform with strong first party games content. MGI's main operational presence is in North America and Europe. The company combines organic growth with value-generating synergetic acquisitions, which has demonstrated continuous strong profitable growth with a revenue CAGR of 77% (2018 -2021). Next to strong organic growth, the MGI Group has successfully acquired more than 35 companies and assets in the past 6 years. The acquired assets and companies have been integrated and amongst others cloud technology is actively used to achieve efficiency gains and competitive advantages. MGI is registered as Societas Europaea in Malta (registration number SE 15) 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, +46-8-528 00 399.

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.

SOURCE: Media and Games Invest SE

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FAQ

What were the Q2 2022 net revenues for MDGIF?

The Q2 2022 net revenues for Media and Games Invest SE (MDGIF) were 78.1 mEUR.

What is the adjusted EBITDA for MDGIF in Q2 2022?

The adjusted EBITDA for MDGIF in Q2 2022 was 21.1 mEUR.

What is the guidance for Media and Games Invest SE for 2022?

MDGIF confirmed a full-year guidance for 2022 revenues of 295-315 mEUR and adjusted EBITDA of 83-93 mEUR.

How much organic revenue growth did MDGIF achieve in Q2 2022?

MDGIF achieved an 18% organic revenue growth in Q2 2022.

What is the current leverage ratio for MDGIF?

As of June 30, 2022, MDGIF's leverage ratio was 3.7x.