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: 5.75 EUR
Letzte Ratingänderung: 
Analyst: Marcel Goldmann, Cosmin Filker

H1 2022: Continuation of dynamic revenue growth despite more challenging
market environment; solid financial performance through platform-based
business model; GBC estimates and target price maintained after
confirmation of corporate guidance
Business development in the HY1 2022
Media and Games (MGI) announced its half-year figures for the current
financial year on 31 August 2022. According to these figures, the ad-tech
platform group was able to continue its dynamic growth course in the first
six months of the current financial year despite challenging general
conditions that have led to a slowdown in the growth of the advertising
industry. Compared to the same period of the previous year, digital group
revenues increased significantly by 32.0% to EUR 143.93 million (HY1 2021:
EUR 109.05 million).
This was due to strong organic growth effects in both advertising segments
(Demand Side Platforms - DSP, Supply Side Platforms - SSP). In addition,
inorganic growth effects as a result of the M&As carried out (especially
AxesInMotion and Smaato) also contributed significantly to the positive
revenue trend. The growth achieved was also reflected in a significant
expansion of the software client base (so-called Total Software Clients
with an annual turnover of more than USD 100,000), which had risen to more
than 500 software clients by the end of the second quarter (31/12/2021: 400
software clients). In the second quarter alone, 34 new software clients
were acquired for the ad-tech platform.
In parallel to their positive revenue development, the consolidated
operating result (EBITDA) also increased significantly by 38.6% to EUR
36.91 million (HY1 2021: EUR 26.63 million) compared to the same period of
the previous year. Adjusted for special effects (e.g. M&A costs), adjusted
EBITDA (Adj. EBITDA) for the first half of 2022 amounted to EUR 38.60
million, which increased by around 34.5% compared to the same period of the
previous year (HY1 2021: EUR 28.70 million). In terms of profitability, the
adjusted EBITDA margin thus improved to 26.8% (HY1 2021: 26.3%).
At the net level, MGI confirmed the high level of the previous year in the
first six months of the current financial year with a net result (after
minorities) of EUR 5.59 million (HY1 2021: EUR 5.64 million). An even more
positive development of the result was offset by significantly higher
depreciation (especially PPA depreciation) and interest expenses from bonds
Business development in Q2 2022
The steady dynamic growth of the technology company is also particularly
evident in the quarterly view. After a pleasing first quarter, MGI
continued on its growth path with high growth momentum in the second
quarter of the current financial year, with a 36.7% increase in
consolidated sales to EUR 78.06 million (Q2 2021: EUR 57.12 million). About
half of the increase in turnover was the result of organic growth effects,
despite a weaker market environment that became apparent in the course of
the second quarter.
According to the company, both business segments contributed to the dynamic
increase in Group turnover with high revenue growth. For example, the
previously smaller Demand Side Segment (DSP), with a year-on-year revenue
increase of 104.0%, significantly drove the growth of the business segment.
Organic revenue growth accounted for 76.0% of this, driven by scaling
software clients with innovative advertising products such as ATOM and
Moments A. I. was achieved.
The Supply Side segment also achieved strong quarterly revenue growth with
a year-on-year increase of 32.0%. 14.0% of this growth was organic and
resulted from more than 25 additional publishers/software customers and
content updates in the games portfolio. The remaining growth effects were
based on inorganic growth as a result of the acquisitions of Smaato and
At the operating result level, significant increases were also achieved in
line with the positive development of turnover. Compared to the same
quarter of the previous year, EBITDA grew significantly by 37.8% to EUR
20.04 million (Q2 2021: EUR 14.54 million) and thus slightly stronger than
the development of turnover. In parallel, the EBITDA margin improved
slightly to 25.7% (Q2 2021: 25.5%). Group EBITDA adjusted for special
effects (e.g. M&A costs) also increased significantly by 37.9% to EUR 21.10
million (Q2 2021: EUR 15.30 million) compared to the same quarter of the
previous year. In the same step, the adjusted EBITDA margin increased to
27.0% (Q2 2021: 26.8%).
Against the background of the positive company performance and the good
positioning of the technology group, MGI's management has decided to
confirm the guidance previously raised with the AxesInMotion acquisition.
MGI therefore continues to expect consolidated revenues in a range of EUR
295.0 million to EUR 315.0 million and adjusted EBITDA (Adj. EBITDA) in a
range of EUR 83.0 million to EUR 93.0 million for the current financial
year 2022.
All in all, the development of turnover and results in the first half of
2022 was satisfactory. Despite the more difficult general conditions, the
company managed to keep up the pace of growth. A solid performance was
achieved in terms of earnings development.
Forecast and evaluation
In view of their convincing half-year development, the promising growth
strategy of the Group and the confirmed corporate guidance, we have also
maintained our previous forecasts for the current financial year and the
following years.
Overall, we continue to see the MGI Group well positioned to grow
dynamically with its ad-tech platform and its own first-party data from
games content. Here, the technology company should be able to benefit from
its strong positioning as a programmatic digital advertising platform with
a focus on the (stable) digital entertainment and games sector, especially
in a more difficult environment. In addition, the innovative advertising
products, such as ATOM and Moments A.I., and the Dataseat acquisition
should enable the company to take advantage of the opportunities arising
from changes in the advertising industry (disappearance of identifiers,
etc.) and thus further expand its market position. In addition, we expect
that the increased integration of the most recent M&As (Dataseat,
AxesInMotion) will generate significant synergy effects within the Group
and thus also boost future revenue and earnings development.
Against the background of our unchanged sales and earnings forecasts, we
hereby confirm our previous price target of EUR 5.75 per share. In view of
the current price level, we continue to give the share a 'buy' rating and
see significant upside potential.

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Date (time) of completion: 06/09/2022 (17:01)
Date (time) of first distribution: 07/09/2022 (10:00)

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