Original-Research: Media And Games Invest SE (Von GBC AG)


(MENAFN- EQS Group) Original-Research: Media and Games Invest SE - from GBC AGClassification of GBC AG to Media and Games Invest SECompany Name: Media and Games Invest SEISIN: SE0018538068Reason for the research: Research study (Anno)Recommendation: BUYTarget price: 4.50 EURLast rating change: Analyst: Marcel Goldmann, Cosmin FilkerFinancial year 2023 with solid operating performance finalised; Return toorganic growth is expected for the 2024 financial
year; Expansion of thedigital advertising platform
business should enable significantlyprofitable growth in future; Target price: € 4.50 (previously: € 4.50);Rating: BUY According to its published business figures, the MGI Group achieved a solidsales performance in the past financial
year 2023 despite a difficultenvironment and market
situation, generating sales of € 321.98 million (PY:€ 324.44 million). On a comparable basis, organic sales even increased by5.0% compared to the previous year. A particularly high organic salesgrowth rate of 16.0% was achieved in the final quarter, which istraditionally the strongest quarter in terms of sales. The maincontributors to this growth were the 18.9% increase in the softwarecustomer base to 2,276 customers at the end of the financial
year (end of2022: 1,915) and the 19.1% increase in the volume of digital advertisingdelivered to 206 billion (advertising ads at the end of FY 2022: 173.0billion). The renewed improvement in MGI's market
position in the mobilesector is also reflected in the market
-leading positions on iOS and Androidwith a US market
share of 12.0% on both platform
s according to the industryexperts at Pixalate. This means that the previously adjusted companyguidance (sales of € 303.0 million) and our sales estimate (GBCe: € 303.21million) were exceeded. MGI achieved growth at all earnings
levels, primarily due to therevaluation of the AxesInMotion earn-out payment liability (positiveone-off effect of € 62.76 million). Accordingly, EBITDA increaseddynamically by 51.6% to € 128.46 million (PY: € 84.75 million) compared tothe previous year. Adjusted for special effects (e.g. M&A and restructuringcosts or revaluations of balancesheet
items), adjusted EBITDA (Adj) totalled € 95.20 million, which was slightly above the previousyear's level (PY: € 93.20 million). The adjusted EBITDA margin (Adj. EBITDAmargin) also increased to 29.6% (PY: 28.7%). This increase in profitabilityreflected the first positive effects of the cost-cutting programmeinitiated last year, which should enable annual cost savings of around €10.0 million once successfully implemented. Accordingly, the adjusted earnings
guidance (adjusted EBITDA: € 93.0 million) and our earnings
estimate (adjusted EBITDA: € 93.07 million) were exceeded. In view of a strong fourth quarter (organic growth Q4 2023: 16.0%) and aneven stronger performance in the first quarter (organic growth Q1 2024:21.0%), MGI's management is positive about the current financial
year 2024and expects double-digit growth and an improvement in the earnings
situation. Based on the recent concretisation of the guidance with thepublication of the Q1 business figures, MGI now expects sales revenues in arange of € 350.0 million to € 370.0 million and an adjusted EBITDA (Adj) of between € 100.0 million and € 110.0 million. As part of the publication of our research study on the preliminary annualresults for 2023, we adjusted our previous sales and earnings
forecastsupwards due to the positive outlook, the increased (organic) growthmomentum and the expected recovery of the advertising market
. In view oftheir strong Q1 performance, their sustained high growth momentum and theconfirmation of the positive outlook, we are confirming our previous salesand earnings
estimates for the current financial
year and subsequent years, we continue to expect sales of € 352.18 million and EBITDA of€ 100.08 million for the current financial
year 2024. For the subsequent financial
years 2025 and 2026, we expect sales (EBITDA) of € 389.51 million(€ 113.35 million) and € 437.03 million (€ 130.67 million) respectively. MGI recently announced its intention to change the company name to Verve media
business is already operating under this name. The name changemarks the successful completion of MGI's transformation into a leadingdigital media
company. At the same time, plans were announced to expand theBoard by one person and to appoint two new Board members with proven media
expertise. Greg Coleman (USA) was President and Board Member at theHuffington Post, BuzzFeed and Criteo, among others, and Peter Huijboom(Netherlands) was CEO Global Media and CEO Global Clients at theadvertising agency Dentsu. Both announcements reflect the clear focus onthe further expansion of the advertising business, but are still subject tothe approval of the Annual General Meeting. Overall, the MGI Group should be able to significantly increase the pace ofgrowth compared to the previous year thanks to its good market
positioning(especially in the US market
) and the expected recovery of the advertising market
. Its innovative customer solutions (AI targeting solutions, etc.) inparticular should make a significant contribution to boosting its customerbase and ad tech platform
revenue in the future. Based on our unchanged forecasts for the current financial
year 2024 andthe following years, we have maintained our previous price target of € 4.50(previously: € 4.50). In view of the current share price level, wetherefore continue to assign a 'BUY' rating and see significant upsidepotential in the MGI share. The results of our peer group analysis (see p.20) also support our assessment of the attractiveness and upside potentialof MGI shares. You can download the research here:Contact for questionsGBC AGHalderstrasse 2786150 Augsburg0821 / 241133 0...++++++++++++++++Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: +++++++++++++++Date (time) of completion: 16/05/2024 (8:20 am)Date (time) of first distribution: 16/05/2024 (11:00 am)-------------------transmitted by EQS Group AG.-------------------The issuer is solely responsible for the content of this research result of this research does not constitute investment
adviceor an invitation to conclude certain stock exchange transactions.

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