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 EUR 324.44

million (previous year: EUR 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 EUR 259.55 million (previous year: EUR 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 EUR 84.75 million (previous

year: EUR 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 EUR 93.20 million (previous year: EUR 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

EUR -20.41 million (previous year: EUR 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 EUR 41.49 million, the adjusted

group result was EUR 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: EUR 307.22 million) and adjusted EBITDA forecast (adjusted EBITDA:

EUR 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 EUR 340.12 million

(previously: EUR 345.11 million) and EBITDA of EUR 89.44 million (previously: EUR

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 EUR 5.40 (previously: EUR 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

Kontakt für Rückfragen

GBC AG

Halderstrasse 27

86150 Augsburg

0821 / 241133 0

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)

-übermittelt durch die EQS Group AG.-

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Quelle: dpa-AFX