Original-Research: Media and Games Invest SE - von GBC AG

Einstufung von GBC AG zu Media and Games Invest SE

Unternehmen: Media and Games Invest SE
ISIN: MT0000580101

Anlass der Studie: Research Note
Empfehlung: BUY
Kursziel: 9.20 EUR
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker

FY 2021 closed with jump in revenues and earnings; Strong dovetailing of media and games business ensure high growth rate; Due to transformation into a fully integrated ad tech company with own gaming activities, we expect dynamic growth; Forecasts and price target raised; Buy rating

Turnover and earnings development 2021

On 28 February 2022, Media and Games Invest SE (MGI) announced its preliminary business figures for the past financial year 2021. According to these figures, the MGI Group was able to continue its dynamic growth course in the past financial period with a jump in turnover of 80.0% to EUR 252.20 million (previous year: EUR 140.20 million). The high growth rate was particularly due to the strong fourth quarter (revenue Q4 2021: EUR 80.2 million vs. revenue Q4 2020: EUR 48.70 million), which was also the quarter with the highest revenue and earnings in the company's history to date. The rapid increase in revenue was based on both organic and inorganic revenue effects (38.0% organic growth and 42.0% inorganic growth).

The significant increase in Group turnover was mainly driven by the Media segment. In this business segment, the company achieved a jump in turnover by 147.7% to EUR 139.60 million (previous year: EUR 65.0 million). In addition to significant revenue growth from organic growth factors, such as expanded advertising partnerships, this business unit also benefited from significant positive effects from completed M&A measures (e.g. Smaato takeover).

In addition, the gaming segment also made a significant contribution to the increase in group revenues with a significant increase in revenues of 49.7% to EUR 112.60 million (previous year: EUR 75.20 million). This dynamic increase in revenue resulted primarily from several content updates, game launches and the KingsIsle acquisition.

Even more significant increases were achieved at the earnings level. Compared to the previous year, EBITDA increased highly dynamically by 131.0% to EUR 65.00 million (previous year: EUR 26.50 million). EBITDA, adjusted for one-off effects (e.g. special and restructuring costs from M&A transactions), increased by 144.3% to EUR 71.10 million (previous year: EUR 29.10 million). The adjusted EBITDA margin also increased significantly to 28.0% (previous year: 21.0%). In our opinion, the very good company performance is primarily the result of the economies of scale and synergy effects achieved within the 'strongly interlinked' business fields of media and games.

The corporate guidance issued by MGI management was thus exceeded. Our revenue estimate (revenue: EUR 234.15 million) and earnings forecasts (EBITDA: EUR 61.21 million, adjusted EBITDA: EUR 65.71 million) were also exceeded, and our net forecast (net result: EUR 16.93 million) was almost achieved.

Forecasts and evaluation

With the publication of the preliminary figures, MGI has announced its corporate guidance for the current business year. According to this guidance, the company expects revenues in a range of EUR 290.0 million to EUR 310.0 million and adjusted EBITDA in a range of EUR 80.0 million to EUR 90.0 million.

Based on this positive outlook and the currently highly convincing company performance, we are significantly raising our previous revenue and earnings forecasts for the financial years 2022 and 2023. For the current financial year, we now expect revenues of EUR 302.22 million (previously: EUR 289.88 million) and an adjusted EBITDA of EUR 88.72 million (previously: EUR 86.53 million). For the following financial year 2023, we expect revenues of EUR 382.16 million (previously: EUR 362.41 million) and an adjusted EBITDA of EUR 116.04 million (previously: EUR 111.83 million). In the following financial year 2024, revenue and adjusted EBITDA should increase further to EUR 478.26 million and EUR 145.78 million respectively. Against the background that we expect higher interest expenses in the future than was previously the case, we have only slightly increased our previous net forecast for the financial year 2022 and slightly lowered our net forecast for the financial year 2023.

In the past few years, the MGI Group has built up to a good starting point to continue to grow very dynamically and highly profitably as an ad tech company with its own gaming activities (access to 'first party data' and advertising space of gaming assets). The combination of the synergetic media and games business activities should continue to significantly boost the profitable growth to date. In addition, the high level of cash on hand (cash and cash equivalents at the end of 2021: approx. EUR 180.0 million) offers the company the opportunity to further strengthen the group through planned M&A transactions and thus to further increase the earning power and the pace of growth.

Within the framework of our DCF valuation model, we have raised our previous price target to EUR 9.20 (previously: EUR 8.50 per share) due to our increased estimates for the financial years 2022 and 2023. In view of the current share price level, we thus continue to assign a BUY rating and see significant share price potential. The valuation results of our peer group analysis (see below) also support our assessment of the attractiveness and price potential of the MGI share.

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/23565.pdf

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Date (time) of completion: 08/03/2022 (18:43 pm) Date (time) of first distribution: 09/03/2022 (10:30 am)

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