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: SE0018538068

Anlass der Studie: Research Note
Empfehlung: BUY
Kursziel: 5.40 EUR
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker

FY 2022 closed with positive operating performance; Strong new customer acquisition enabled high growth; Positioning as a fully integrated ad tech platform should ensure further dynamic growth; Price target slightly lowered; Buy rating confirmed
 
Turnover and earnings development 2022
 
On 28 February 2023, Media and Games Invest SE published its preliminary business figures for the past financial year 2022. According to these figures, the technology group with its advertising software platform (so-called Ad-Tech platform) continued its dynamic growth course in the past financial year with an increase in turnover of 28.7% to € 324.44 million (previous year: € 252.17 million). Despite difficult general conditions and the market situation (budget cuts, declining CPM, etc.), the company succeeded in maintaining its growth rate and gaining market share. The significant increase in turnover was based on both organic and inorganic turnover effects (18.0% organic growth & 11.0% inorganic growth).  
The significant increase in Group revenues was primarily driven by the continued growth in digital advertising revenues (ad software revenues) of the Group. In the past financial year, ad software revenues increased significantly by 49.2% to € 259.55 million (previous year: € 174.00 million) and thus accounted for around 80.0% of Group revenues.  
The strong acquisition of new customers proved to be a significant growth driver of this digital advertising business. In the past financial year, 133 new software customers were added to the customer portfolio, which currently consists of 551 customers (end of 2021: 418). In addition, the ad tech business also benefited from the clearly positive effects of M&A measures (e.g. AxesInMotion, DataSeat, etc.).  
Parallel to the positive development of turnover, significant increases were also achieved at the operating result level. Compared to the previous year, EBITDA increased significantly by 30.3% to € 84.75 million (previous year: € 65.04 million). EBITDA, adjusted for one-off effects (e.g. special and restructuring costs from M&A transactions), also increased significantly by 31.1% to € 93.20 million (previous year: € 71.10 million).  
As a result, the adjusted EBITDA margin increased slightly to 28.7% (previous year: 28.2%). At the net level, a negative consolidated result of € -20.41 million (previous year: € 16.06 million) had to be accepted due to a one-time depreciation effect (one-time PPA depreciation on intangible assets) and higher tax and interest charges. This one-off depreciation effect resulted from an adjustment of the corporate strategy and a related withdrawal from business activities with small MMO games. Adjusted for the non-recurring and regular PPA amortisation of € 41.49 million, the adjusted group result was € 21.09 million.
 
The most recent corporate guidance issued by MGI management was thus achieved at the upper end of the target range. Our turnover estimate (turnover: € 307.22 million) and adjusted EBITDA forecast (adjusted EBITDA: € 91.72 million) were exceeded. However, due to the PPA amortisation, which we did not anticipate in this amount, the net result was significantly below our expectations.
 
Forecasts and evaluation
 
With the publication of the preliminary figures, MGI has confirmed the previously published medium-term guidance (revenue CAGR: 25.0% - 30.0%; Adj. EBITDA margin: 25.0% - 30.0%). In addition, the technology company plans to announce a concrete company forecast for the current financial year 2023 with the publication of the Q1 business figures or hereafter.  
Based on the current company performance, we have slightly reduced our revenue and EBITDA estimates for the current 2023 financial year from a conservative perspective and now expect revenue of € 340.12 million (previously: € 345.11 million) and EBITDA of € 89.44 million (previously: € 96.05 million). For the coming financial year 2024, we are leaving our previous operating estimates unchanged. In addition, we have included the 2025 financial year in our detailed estimates for the first time.  
Against the background that we expect significantly higher interest and tax expenses in the future than was previously the case, we have significantly lowered our net forecasts for the 2023 and 2024 financial years.  
Overall, we continue to see MGI well-positioned to further expand its market position with its leading ad tech platform with proprietary games content, innovative contextual customer solutions and multi-channel platform approach. Even in a difficult advertising market, this technology group should succeed in continuing its successful course with its promising focus on digital programmatic advertising. In doing so, the company should be able to benefit in particular from the increased customer demand for efficient (digital) advertising solutions.  
Within the framework of our DCF valuation model, we have slightly reduced our target price to € 5.40 (previously: € 5.75 per share) due to our adjusted estimates and the increased cost of capital. The resulting lowering of the target price was offset by the first-time inclusion of FY 2025 in our detailed estimation period and the associated higher starting point for the subsequent estimation periods. In view of the current price level, we continue to give the share a 'Buy' rating and see signi-ficant upside potential.
 
 
 
 

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/26523.pdf

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research@gbc-ag.de
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Date (time) of completion: 07/03/2023 (10:57) Date (time) of first distribution: 08/03/2023 (10:30)

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