Post on 02-Jun-2020
transcript
Shaping the future of entertainment
Rolling 12 month performance
8% organic sales growth & 29% profit
growth
6% Nordic Ent. organic sales growth & 11% profit growth
25% total shareholder return
37% MTGx organic sales growth &
EBITDA profitable
2
Net sales(SEK million)
Operating income(SEK million)
14,999
17,537
2016 2017
1,060
1,264
2016 2017Operating income before items affecting
comparability (IAC)
Digital revenues (+68%)
22%31%
Net sales from continuing operations
Transformation is part of our DNA
1987 2018
Refers to acquisitions and divestments from 2015 onwards * Bulgaria expected to close in H2 2018
AcquisitionsEV = SEK 5.9 bnESL ESEA
Kongregate
Zoomin.TV
EngageDigital
Partners
Splay
InnoGames
DreamHack
DivestmentsEV = SEK 8.6 bnRussia Africa
Baltics
Sappa
Hungary
Ukraine
Czech Rep.
Trace &Bulgaria*
Digital transformation & portfolio management
• A pure play in digital entertainment
• Comprising esports (ESL & DreamHack), online gaming
(InnoGames & Kongregate), digital video content (Zoomin.TV
& Engage Digital Partners), other investments
• President & CEO: Jørgen Madsen Lindemann
• CFO: Maria Redin
• Shares will remain listed on Nasdaq Stockholm
• The leading entertainment provider in the Nordic region
• Comprising Nordic Entertainment, MTG Studios and
Splay Networks
• President & CEO: Anders Jensen
• CFO: Gabriel Catrina
• Shares will be distributed to MTG shareholders and listed
on Nasdaq Stockholm
Plan to split MTG into two listed companies
• Two publicly listed companies that are shaping the future of their respective industries with leading brands
• Two businesses with improved focus and agility to capitalise on growth opportunities and drive shareholder value
• Two distinct investment cases with clear financial profiles and capital structures
• The time is right – decision taken from a position of strength. Robust financial performance, strong leadership teams and an
inspired workforce
• Distinct investment cases & equity stories• Facilitates separate funding models & capital allocation• Enables fair valuation of both businesses
Financial
• Greater focus & clarity• Serving different target markets• Adapting faster to market dynamics
Strategic
• Aligned accountability & incentivisation• Simpler decision making • Attracting highly skilled talent
Operational
1
2
3
Compelling rationale – the natural next step
Pay TV SVOD
Free TV AVOD
Radio
Pay TV SVOD
Free TV AVOD
Pay TV SVOD
Free TV AVOD
Radio
Pay TV SVOD
AVOD
A fully integrated media powerhouseNorway
Denmark
MTG Studios (17 countries)
Finland
Splay Networks
Sweden
• Leading entertainment provider with a uniquely integrated structure
• Nordic Entertainment: Pay- & Free-TV + leading pay and free streaming services
• MTG Studios: Nordic region’s leading content production company
• Splay: Nordic’s leading digital video network
• Undisputed content leadership: sports, acquired content & top quality original productions from MTG Studios and Splay
• Leading digital positions through Viaplay, Viafree, Viareal, I Like Radio & Splay
• Digital revenues increased by 31% in 2017 to account for 19% of total sales
Note: USD transaction headwind on EBIT amounted to SEK 187m, 184m and 78m for 2015, 2016 and 2017 respectively
13,684
-2631,986
5,094
6,867
12,876
-1591,897
4,866
6,272
12,219
-781,810
4,656
5,831
EliminationsMTG Studios & SplayFree-TVPay-TV
1,771
1,5571,530
Net Sales (SEKm)
EBITDA before Group central costs (SEKm)
2015 2016 2017 2015 2016 2017
CAGR +6%
CAGR +8%
Nordic Entertainment Group in brief
CAGR+18%
Multiple digital growth drivers
2015 2016 2017 2015 2016 2017 2015 2016 2017
Started streams Started streams BTV subs
CAGR+49%
CAGR+43%
Pay TVplatform
Pay TVchannels
Free TV channels SVOD AVOD TVOD Pan-Nordic
Competitively positioned to win
An unmatched portfolio of sports rights…
NationalSoccer
Leagues
20262021 2021 2022 2021 2024 20222021 2022 2018 2021 20182024
20212021 2021 2022 2021 20242021 2022 2018 2021 20182024
20222021 2021 2022 2021 20242021 2022 2018 2021 20182024
20182021 2021 2022 2021 2024 20222018 2022 2018 2021 20182024
2018
2018
2021 2025
2021
2021
2021 2025
2025
2025
2018 2019
2018
2018
2018 2019
2019
2019
1st Pay window 2nd Pay window
…and the best acquired content
14Titles
premiered
18Titles in
production
22Titles in
development
Over 50 original productions
2016 2017 2018 20202019 2021
Rig 45RIG 45
Telcos & Pay TV operators
Local players
Local players
Local players
Local players
Local players
Cinema EST TVOD SVOD SVOD Sports TVE
Viaplay – a unique product offering
Nordic Entertainment Group – key priorities
• Capitalise on content and digital leadership positions
• Cost control & continue to shift investments to content & online
• Build a strong international IP, production and distribution house
• Expand product offering in each market
• Look for structural opportunities to drive convergence
The new MTG
Digital Video
Content
Online Gaming
Other holdingsEsports
MTG – a pure play in digital entertainment
193 206
1 2341 012
1 370
2016 2017 2017 PF
1,206
2,810
Net Sales (SEK m)
EBITDA*(SEK m)
3,550
-170
36
202
2016 2017 2017 PF1 1
New MTG – a digital hyper-growth story
• A pure-play global digital entertainment company
• eSports: The world’s leading esports company with category brand leaders that are shaping the future of the industry
• Online gaming: 2 proven concepts with multi-platform development & publishing capabilities
• Digital video content: Helps influencers, brands & creators to succeed on digital & social platforms
• Successful M&A record of investing in globally attractive digital entertainment verticals with portfolio synergies
• VC funds to provide access to future M&A targets Online Gaming
Digital Video Content excl. Splay
eSport
*EBITDA before Group central costs
1) 2017 pro forma as if acquisitions had been consolidated since Jan 1
• 74% owned
• The world’s leading esports company
and the category brand leader
• League operator, stadium events
organiser and content producer
• 100% owned
• Grass-roots LAN parties & festivals
• Focus on interaction & gaming
• Building high engagement levels
Our esports brands are shaping the industry
Source: NewZoo – 2018 Global Esports Market Report
Game publisher fees
Media rights
Advertising
Merchandise & tickets
Sponsorships
26%CAGR
2017655 USDm
14%
13%
21%36%
16%
20211,651 USDm
24%
9%
14%
46%
7%
Esports – a hyper-growth industry
LEGENDARYThe world’s best
PROEsports champions
AMATEURProve your skill
CASUALGood luck and have fun
VIE
WIN
GPA
RTIC
IPA
TIO
N
All games All platformsAll levels Global presence
From Amateur to Pro across relevant games
ParticipationMoneyProduct Content
Games Developers & Publishers
Brand Partners & Advertisers
Players/Teams League Operators/Content Producers
AudienceDistributors
The evolving esports ecosystem
Global gaming market (USD billion)
25 24
32 36
44
69
2016
101
2020E
129
12%
3%
0%
Mobile & Browser
Console
PC
6% CAGR
Online gaming –a huge global market
Source: Newzoo; OC&C Analysis
More paying players
More players
Higher spend per player
• 100% owned
• Proprietary publishing platform with more than 100,000 live games
• Expanding into 1st party games development withseveral bolt-on acquisitions of smaller studios
• Provides valuable network access and abilities to screenthe game developer landscape
• 2017 pro forma (as if consolidated from Jan 2017) sales up 43% to SEK 428m with ~10% EBITDA margin
• 51% owned
• Cross-platform games developer with six successful titles in mid-core strategy segment
• InnoGames has combined healthy top-line growth with high & stable margins
• 2017 pro forma (as if consolidated from Jan 2017) sales up 25% to SEK 1,547m with ~25% EBITDA margin
Two proven online gaming investments
The new MTG –key priorities
• Become Europe’s preferred partner for digital entertainment companies around the world
• Maintain position as the world’s #1 esports company
• Further develop our positions in online gaming
• Selective M&A to expand position in existing verticals and exploit opportunities in new verticals
• Look for strategic partnerships to drive further value creation
facebook.com/MTGAB Modern Times Group MTG AB @mtgab MTGModernTimesGroup moderntimesgroup
Find out more @mtg.com and @nentgroup.com
facebook.com/nentgroup Nordic Entertainment Group Nordic Entertainment Group nentgroup