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
Anlass der Studie: Research study (Anno)
Kursziel: 6.92 EUR
Analyst: Marcel Goldmann, Cosmin Filker
Record financial year 2020 concluded with strong profitable growth in turnover; Another significant increase in turnover and earnings expected for the current financial year 2021; The growth course we have embarked upon should lead to a disproportionately high increase in earnings as a result of economies of scale; Target price: EUR 6.92; Rating: BUY
Media and Games Invest SE closed the 2020 financial year with significant increases in turnover and earnings compared to the previous year. With a 67.1% increase in revenue to EUR 140.22 million (PY: EUR 83.89 million), the company continued its dynamic growth course. The high growth rate was primarily due to a fast-growing fourth quarter (revenue Q4 2019: EUR 28.17 million vs. revenue Q4 2020: EUR 48.69 million), which was the strongest in terms of revenue and earnings in the company's history to date, but was again exceeded in Q1 2021.
The significant increase in group revenue was primarily driven by the games business segment. In this segment, the company achieved a jump in turnover of 74.5% to EUR 75.20 million (PY: EUR 43.10 million). In addition to positive effects from the 'Corona stay-at-home policy', game updates and expansions as well as M&A measures also contributed to this positive development.
In addition, the Media segment also made a significant contribution to the increase in Group turnover with a significant increase in turnover of 59.3% to EUR 65.0 million (PY: EUR 40.80 million). In addition to revenue increases stemming from organic growth, this business segment also benefited from positive effects from completed M&A measures (e.g. acquisition of the main assets of Verve Wireless). In our opinion, the organic growth of this business unit was particularly boosted by the fact that the customer focus was very much on customers from the high-growth games and e-commerce sector.
On an EBITDA basis, an increase of around 71.0% to EUR 26.55 million (PY: EUR 15.54 million) was achieved in the past financial year. EBITDA adjusted for one-off effects (e.g. special and restructuring costs from M&A transactions) increased by 60.8% to EUR 29.10 million (PY: EUR 18.10 million) compared to the previous year. A dynamic increase of more than 100.0% to EUR 2.71 million (PY: EUR 1.25 million) was also recorded at the net level.
In our last research study, we already included the figures for the first quarter of 2021 and adjusted our previous revenue and earnings forecasts upwards accordingly. The background to our forecast increase was the good performance at the start of the year (Q1 revenue 2021: EUR 51.93 million vs. Q1 revenue 2020: EUR 26.55 million), the company's particularly extensive growth pipeline and the expected strong recovery of the advertising market.
For the current financial year 2021, we expect consolidated revenues of EUR 202.30 million and an EBITDA of EUR 52.81 million. The majority of these revenues should be generated in the games segment (GBCe: EUR 109.72 million). In addition, the business development of this segment should be significantly boosted by the acquisition of KingsIsle at the beginning of the year.
With regard to the media segment, we are calculating turnover of EUR 92.58 million for the current business year. This segment has been significantly expanded in the past and strengthened by several M&A transactions (most recently with the acquisition of the essential assets of Beemray Oy). As a result of the fact that this business segment has been brought into a good market position through various strategic measures of the MGI Group, it should also be possible to significantly increase the sales revenues in this segment in the current financial year. In addition, the Media segment should also be able to profit from the expected recovery of the advertising market.
We also expect the company's successful growth strategy to continue in the coming years and accordingly anticipate significant revenue and earnings growth in both the Games and Media divisions. Accordingly, we expect revenues of EUR 255.10 million and EBITDA of EUR 69.90 million for the coming financial year 2022. In the following year 2023, revenue and EBITDA should increase again to EUR 319.39 million and EUR 92.94 million, respectively. On a net level, we also expect significant earnings growth in the current and coming financial years. For the current financial period, we expect a net result (after minorities) of EUR 12.27 million. In the following years 2022 and 2023, this should increase further to EUR 23.65 million and EUR 39.99 million respectively.
Overall, we are convinced that the MGI Group will be able to continue its dynamic growth course in the future due to its strong market position in both high-growth business segments (games and digital media). Due to the company's platform-based business model and the associated high scalability of the business, group profitability should also increase disproportionately in the coming years. The company's high cash position (end of March 2021: EUR 51.70 million) opens up additional growth and earnings potential through targeted M&A transactions. MGI has a very strong track record in this area and can look back on very many successful transactions.
Within the framework of our DCF valuation model, we have determined a target price of EUR 6.92 per share on the basis of the estimates we previously raised in our Q1 research report. As we have not made any changes to our previous study (as of May 11, 2021), we hereby confirm our previous price target and rating. In view of the current share price level, we thus continue to assign a Buy rating and see significant share price potential. The results of our peer group analysis (see p. 20) also support our assessment of the attractiveness and price potential of the share.
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Date (time) of completion: 15/06/2021 (8:27 am)
Date (time) of first distribution: 15/06/2021 (10:00 am)
übermittelt durch die EQS Group AG.
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