26.09.2019 Media and Games Invest PLC  MT0000580101

Original-Research: Media and Games Invest PLC (von GBC AG):


Original-Research: Media and Games Invest PLC - von GBC AG

Einstufung von GBC AG zu Media and Games Invest PLC

Unternehmen: Media and Games Invest PLC ISIN: MT0000580101

Anlass der Studie: Managementinterview
Letzte Ratingänderung:
Analyst: Dario Maugeri, Cosmin Filker

“I would be proud if we can build a Europe based Unicorn”

Media and Games Invest plc (formerly blockescence plc) is a holding company focused on the synergetic gaming and media sectors. In the fiscal year 2018, the company significantly changed its corporate strategy with the complete acquisition of the shares of Samarion SE. At that time, Samarion SE held 38.7 % stake in the online game publisher gamigo AG, which has thus advanced to become Media and Games' most important operative investment. All previous (real estate) assets of the holding were sold, making Media and Games Invest (with by now 53% of the gamigo shares) a pure play tech-company in the games and media sector. GBC analyst Dario Maugeri spoke with Remco Westermann, CEO of Media and Games:

GBC AG: Mr. Westermann, following the acquisition of Samarion SE and thus gamigo AG, the business model of Media and Games has changed significantly. Can you briefly outline this?

Remco Westermann: Media and Games Invest’s strategy is based on, and wants to strengthen and further build on, the successful strategy of gamigo AG; building critical mass in the digital gaming and media markets via a combination of bolt-on acquisitions and organic growth. Our 53% subsidiary gamigo has been implementing this strategy now for over six years, continuously showing steady, profitable growth, with an average 32% revenue and 65% Ebitda growth per year in the last 4½ years.

The digital markets for gaming and media/advertising are both very substantial with approx. 150 billion USD in digital gaming and approx. 300 Billion USD in digital advertising worldwide, each growing with over 10% year on year. The two sectors have strong synergies; own advertising inventory on the gaming side enables a clear USP on the media side, whereas, the broad media expertise and scale advantage in media buying build a user acquisition USP for the gaming side.

Both sectors demonstrate a strong technological edge. Many players lack critical mass, therefore creating a great space for us as a market consolidator. With Media and Games Invest as a holding company, having access to capital markets, we can speed-up the growth of gamigo in the gaming segment, while also increasing our stake in gamigo by buying out non-strategic minority shareholders. In parallel MGI is also driving forward our growth in the online media/advertising segment via focus on organic growth as well as via further acquisitions.

GBC AG: An important growth factor for gamigo AG in recent financial years has been the acquisition of gaming companies or the expansion of gaming licenses. Most recently, two American companies were acquired. Should inorganic growth continue to be the focus and how is your company financially positioned in this respect?

Remco Westermann: gamigo has performed well over 20 acquisitions in the past six years, acquiring gaming assets as well as complete companies. The most recent additions are Trion Worlds, a well-known publisher massively multiplayer games for online and console, in Redwood City and Austin (USA), acquired in October 2018, and WildTangent, a leading casual games publisher and platform, based in Seattle, acquired in April 2019.

In both cases, significant assets of the companies were acquired, leading to immediate contribution of earnings and profits of the group. With its positive operating cashflow and a substantial amount of cash from its bond (listed on the regulated market in Sweden at Nasdaq Stockholm) in combination with many available targets, gamigo will, supported by the listed MGI, further drive the acquisitive growth. On top of acquisitive growth, gamigo and the MGI group also focus on organic growth via a.o. licensed game launches, game sequels, internationalization and user acquisition. As such, organic growth is an important pillar of the overall growth strategy.

GBC AG: How is the integration progressing and what synergy effects can be demonstrated for example by the recently acquired American companies from gamigo AG?

Remco Westermann: Post-acquisition there is a strong focus on realizing synergies, e.g. by merging back-end platforms and migrating the services into the cloud, which creates substantial cost savings. One example are the data platforms: Trion Worlds operated several datacenters with much spare capacity to enable further growth of the games. Now, based on the setup of gamigo, the games are moved into the cloud. This lead to only paying for capacity that is used, while still having the option to scale-up fast, and results in much lower total costs, thanks to economies of scale of the group. Also there are no further capex investments required and a much better performance with fewer downtimes is guaranteed. The WildTangent platform also poses many synergies on the cost side as well as on the revenue side, with additional revenue possibilities for the distribution of other game titles by the group.

GBC AG: What measures can be taken to promote organic growth, i.e. the expansion of games developed in-house or the acquisition of active players?

Remco Westermann: For clarification; we do not take any new game development risks. With our current size, developing new games is too risky; developing a MMO (massive multiplayer online game) costs e.g. between 2 and 50 million USD, takes 3 up to 5 years and has statistically a below 10% chance of success. We do however license new games for certain territories that were developed by independent studios or foreign, mostly Asian game publishers. In licensing we are highly selective and do thorough testing beforehand.

Apart from entirely new games, we like to launch game sequels and extensive updates for games where we already have a strong userbase. This reduces the risk of game launches substantially and poses a massive opportunity. We are concentrating on games with sustainable revenues; MMO’s which generally have live times of over 10 years and long-term customer relations as well as subscriptions for the usage of mostly casual games. Also, internationalization and user acquisition for our current games are important for growth.

GBC AG: In addition to being a publisher of online games, Media and Games is also active in the media sector, i.e. in the B2B segment. What products are offered here and what is your growth strategy in this segment?

Remco Westermann: While building critical mass for efficiency reasons, gamigo also concluded that for organic growth it needs more capabilities and know-how in the field of online marketing and user acquisition. As such, media companies and assets were acquired; e.g. Adspree (formerly SevenGames Network, acquired from ProsiebenSat.1), a performance-based online user acquisition company also operating portals such as browsergames.de, and Mediakraft, an innovator in influencer marketing. This gives the group in-house media and advertising capabilities, that are leveraged by selling their services to competitors and into other sectors, leading to efficiency and substantial earnings. Thanks to this, the gaming group has a strong USP in the field of user acquisition. As part of the MGI Strategy further media companies have been acquired in 2019: ReachHero (a Saas Influencer platform), AppLift (a mobile performance agency) and PubNative (a SaaS supply side platform for mobile apps advertising). With these acquisitions, the MGI group now is generating substantial revenues next to the gamigo group.

GBC AG: With rising sales, gamigo AG achieved significantly improved profitability figures in the first half of 2019. What kind of growth can be achieved and how can you actively manage this?

Remco Westermann: The gamigo business model strongly profits from synergies of the acquired entities in combination with more volume via organic growth, leading to revenue growth but even stronger EBITDA and EBIT growth. Over the last 4 ½ years, gamigo had an average annual 32% revenue and 65% EBITDA growth.
Only since two years we have put focus on organic growth, as the years before the company concentrated on M&A and the integration of these M&A cases only. Organic growth is nowaccounting for a more significant part of growth every year. With three game launches coming up in H2-2019, each of them being within an already existing customer base, we expect to boost our organic growth even further in 2019 as well as in the following years. In the coming years, gamigo expects to also continue to grow, with an average of 25 - 30% per year. M&A targets are widely available, and we have a strong line-up for organic growth.

On the EBITDA side gamigo expects further 25-30% EBITDA, which results in a positive cash-flow from operations, further enabling strong growth. Just for clarification; gamigo’s financials are only part of the overall growth of MGI, next to the participation in gamigo, which we further expect to increase, MGI also holds several participations in the media sector that will start contributing to revenue and EBITDA growth of MGI from H2 2019 onwards.

GBC AG: Finally, a question for investors with a long-term investment horizon. Where do you see the Media and Games in five years?

Remco Westermann: We are already one of the leading game companies in Europe and certainly one of the fastest-growing ones. We choose public market access with listed stock to be more flexible in doing acquisitions in shares next to with cash. Looking back I think we already achieved quite a bit and showed that our business model makes sense and works. Looking forward, we have the chance to build a listed European gaming and media powerhouse. I would be proud if we can build a Europe based Unicorn together with our team, our partners and our investors.

GBC: Mr. Westermann, thank you for the interview.

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/19067.pdf

Kontakt für Rückfragen
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung.htm +++++++++++++++

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Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw. Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

Die wichtigsten Finanzdaten auf einen Blick
  2013 2014 2015 2016 2017 2018 2019 2020e
Umsatzerlöse1 0,00 0,00 0,00 0,62 0,79 32,62 83,89 121,00
EBITDA1,2 0,00 0,00 0,00 -0,87 -4,49 8,65 15,54 22,30
EBITDA-Marge3 0,00 0,00 0,00 -140,32 -568,35 26,52 18,52 18,43
EBIT1,4 0,00 0,00 0,00 -0,91 -4,86 2,33 5,00 7,80
EBIT-Marge5 0,00 0,00 0,00 -146,77 -615,19 7,14 5,96 6,45
Jahresüberschuss1 0,00 0,00 0,00 2,38 -6,20 1,58 1,25 2,70
Netto-Marge6 0,00 0,00 0,00 383,87 -784,81 4,84 1,49 2,23
Cashflow1,7 0,00 0,00 0,00 -28,63 -7,51 4,93 16,20 18,00
Ergebnis je Aktie8 0,00 0,00 0.00 0,09 -0,14 0,09 -0,01 0,04
Dividende8 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00
Quelle: boersengefluester.de und Firmenangaben

  Geschäftsbericht 2019 - Kostenfrei herunterladen.  
1 in Mio. Euro; 2 EBITDA = Ergebnis vor Zinsen, Steuern und Abschreibungen; 3 EBITDA in Relation zum Umsatz; 4 EBIT = Ergebnis vor Zinsen und Steuern; 5 EBIT in Relation zum Umsatz; 6 Jahresüberschuss (-fehlbetrag) in Relation zum Umsatz; 7 Cashflow aus der gewöhnlichen Geschäftstätigkeit; 8 in Euro; Quelle: boersengefluester.de

Wirtschaftsprüfer: RSM

Media and Games Invest
WKN Kurs in € Einschätzung Börsenwert in Mio. €
A1JGT0 1,300 Kaufen 91,03
KGV 2021e KGV 10Y-Ø BGFL-Ratio Shiller-KGV
21,67 20,46 1,059 65,00
0,93 5,62 1,09 9,483
Dividende '19 in € Dividende '20e in € Div.-Rendite '19e
in %
0,00 0,00 0,00 30.07.2020
Q1-Zahlen Q2-Zahlen Q3-Zahlen Bilanz-PK
12.08.2020 30.06.2020
Abstand 60Tage-Linie Abstand 200Tage-Linie Performance YtD Performance 52 Wochen
-1,96% 8,24% 16,07% 4,42%
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