Q3 2024 Modern Times Group MTG AB Earnings Call Transcript
Key Points
- Modern Times Group MTG AB (STU:MRTA) launched a new strategy and character collection game, Heroes of History, in September, contributing to operational momentum.
- The company reported strong traction for user acquisition in Q3, setting the stage for organic growth in Q4 and into 2025.
- Warhammer 40,000: Tacticus delivered record sales and player numbers, contributing significantly to the strategy and simulation franchise's 21% year-over-year growth.
- The company achieved a strong free cash flow of SEK334 million in Q3, with a cash conversion rate of 70%, exceeding the long-term outlook of 50% to 60%.
- Modern Times Group MTG AB (STU:MRTA) maintained a robust operating margin of 27% in Q3, demonstrating the health and quality of its business operations.
- Sales in Q3 were down 2% year over year, reflecting challenges in the overall market environment and tough comparisons from the previous year.
- Adjusted EBITDA decreased by 13% year over year, impacted by strong events in the previous year and delayed third-party revenue bookings.
- The company's racing franchise experienced a 4% decline in revenues year over year and sequentially, with new games underperforming expectations.
- In-app advertising revenues as a proportion of total revenues have decreased, influenced by Google's shift to real-time bidding.
- The departure of a key management team member, Nils, was noted, with the company currently searching for a replacement.
And thank you for joining the live stream for our third-quarter results. My name is Anton Gourman and I'm the VP of Investor Relations at MTG. With me and hosting this call is our President and CEO, Maria Redin.
(Event Instructions) And with that, I now hand over to our CEO, Maria. Please go ahead.
Thank you, Anton, and hello, everyone, and thank you for joining us. We had an active Q3 with good momentum and increasing marketing spend. And that's thanks to business schedule of live ops and new game initiatives.
I'm also excited that we launched our new strategy and character collection game, Heroes of History, in September. And also going into Q4, we continue to build on the operational attraction. And we are confident in our full-year guidance for both sales and operating margin.
We reported sales of SEK1.4 billion in Q3, which in constant currency was up 1% increase
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