Media and Games Invest: Accelerated organic growth
Research Note
2024-03-20
08:48
Redeye comments on MGI’s record sales figures for February, representing an organic growth of 25%, up from 18% in January.
Anton Hoof
Yesterday, MGI released organic growth numbers for February, amounting to 25%. This follows a gradual increase from Q3 2023, where organic growth amounted to 1%, followed by 16% in Q4 and 18% in January. MGI states that the growth uptick stems from new customer onboardings, increased spending from existing customers, and rising demand for ID-less solutions, which are becoming more important in an ID-less future following Google’s cookie deprecation. The organic growth of 18% in January and 25% in February can be compared with our growth estimate of 12% in Q1 2024e. As such, on the back of the solid organic growth figures, we increase our estimate for Q1 from EUR77m to EUR81m, representing a y/y growth of 18% for the full quarter. We leave our valuation unchanged as of now.
| Estimate Revisions | |||||||||||
| New estimates | Old estimates | Diff (%) | |||||||||
| EURm | 2024e | 2025e | 2026e | 2024e | 2025e | 2026e | 2024e | 2025e | 2026e | ||
| Net Sales | 359 | 413 | 436 | 355 | 409 | 432 | 1% | 1% | 1% | ||
| Total Costs | -257 | -286 | -306 | -255 | -283 | -304 | 1% | 1% | 1% | ||
| Adj EBITDA | 105 | 128 | 130 | 103 | 126 | 128 | 2% | 2% | 2% | ||
| EBITDA | 102 | 128 | 130 | 100 | 126 | 128 | 2% | 2% | 2% | ||
| D&A | -31 | -34 | -35 | -31 | -34 | -34 | 0% | 1% | 1% | ||
| D&A less PPA | -20 | -23 | -24 | -20 | -23 | -23 | 0% | 1% | 1% | ||
| Adj EBIT | 84 | 105 | 106 | 83 | 103 | 104 | 2% | 2% | 2% | ||
| Amortization (PPA) | -11 | -11 | -11 | -11 | -11 | -11 | 0% | 0% | 0% | ||
| EBIT | 71 | 94 | 95 | 69 | 92 | 93 | 3% | 2% | 2% | ||
| Net financials | -50 | -35 | -31 | -50 | -35 | -31 | 0% | 0% | 0% | ||
| EBT | 20 | 59 | 64 | 19 | 57 | 62 | 11% | 3% | 3% | ||
| Net Profit | 15 | 44 | 48 | 14 | 42 | 46 | 11% | 3% | 3% | ||
| Adj Net Profit | 29 | 55 | 59 | 27 | 53 | 57 | 5% | 3% | 3% | ||
| Adj EPS | 0.2 | 0.3 | 0.4 | 0.2 | 0.3 | 0.4 | 5% | 3% | 3% | ||
| Source: MGI (Historical data), Redeye Research (Forecasts) |
| Financial estimates | |||||||||
| EURm | 2022 | 2023 | Q1'24e | Q2'24e | Q3'24e | Q4'24e | 2024e | 2025e | 2026e |
| Net Sales | 324 | 322 | 81 | 86 | 87 | 105 | 359 | 413 | 436 |
| Total Costs | -240 | -194 | -59 | -62 | -62 | -74 | -257 | -286 | -306 |
| Adj EBITDA | 95 | 95 | 23 | 24 | 26 | 32 | 105 | 128 | 130 |
| EBITDA | 85 | 128 | 22 | 24 | 25 | 31 | 102 | 128 | 130 |
| D&A | -58 | -29 | -8 | -8 | -8 | -8 | -31 | -34 | -35 |
| D&A less PPA | -17 | -18 | -5 | -5 | -5 | -5 | -20 | -23 | -24 |
| Adj EBIT | 77 | 77 | 18 | 19 | 21 | 27 | 84 | 105 | 106 |
| o/w PPA | -41 | -11 | -3 | -3 | -3 | -3 | -11 | -11 | -11 |
| EBIT | 27 | 99 | 14 | 16 | 17 | 23 | 71 | 94 | 95 |
| Net financials | -38 | -50 | -13 | -12 | -8 | -17 | -50 | -35 | -31 |
| EBT | -11 | 49 | 1 | 4 | 9 | 6 | 20 | 59 | 64 |
| Net Profit | -20 | 46 | 1 | 3 | 7 | 5 | 15 | 44 | 48 |
| Adj Net Profit | 21 | 57 | 4 | 6 | 10 | 8 | 29 | 55 | 59 |
| Adj EPS | 0.13 | 0.36 | 0.03 | 0.04 | 0.07 | 0.05 | 0.18 | 0.34 | 0.37 |
| Segments | |||||||||
| Net Sales DSP | 32 | 32 | 7 | 9 | 10 | 6 | 33 | 39 | 43 |
| Net Sales SSP | 292 | 292 | 74 | 76 | 76 | 99 | 326 | 375 | 393 |
| Margins | |||||||||
| Adj EBITDA margin % | 29.3% | 29.5% | 28.0% | 28.4% | 29.7% | 30.5% | 29.2% | 30.9% | 29.8% |
| Adj EBIT margin % | 23.6% | 23.9% | 21.8% | 22.6% | 23.8% | 25.5% | 23.6% | 25.4% | 24.4% |
| Net margin % | -6.3% | 14.3% | 1.2% | 3.5% | 8.1% | 4.3% | 4.2% | 10.6% | 10.9% |
| Adj Net margin % | 6.5% | 17.8% | 5.4% | 7.5% | 12.1% | 7.5% | 8.0% | 13.3% | 13.5% |
| Source: MGI (Historical data), Redeye Research (Forecasts) |
Disclosures and disclaimers