===== SIDA 1 ===== Q3 2023 Modern Times Group MTG AB 1 We are well on track to deliver on our full-year revenue outlook. Q3 revenues were up 6% year over year to SEK 1,494 million. Sales were up 1% year over year and up 2% from Q2 in constant currencies . Total user acquisition (UA) spend amounted to 37% of revenues in Q3. The group delivered record-breaking quarterly adjusted EBITDA of SEK 449 million in Q3, with a strong margin of 30%. We are increasing the outlook for our full-year adjusted EBITDA margin on the back of this strong performance and now expect the margin to be between 25% and 27% for the year. We are also very excited about our acquisition of a majority stake in Snowprint Studios after the end of the quarter. Net sales increased by 6% year over year to SEK 1,494 (1,412) million. Sales were up by 1% year over year in constant currencies, and up 2% quarter over quarter UA spend of SEK 554 (499) million corresponding to 37% (35%) of revenues Adjusted EBITDA of SEK 449 (374) million with an adjusted EBITDA margin of 30% (27%) Reported EBITDA of SEK 429 (325) million and EBIT of SEK 283 (193) million Net financial items amounted to SEK 10 (304) million of which net interest amounted to SEK 44 (21) million and other financial items amounted to SEK -33 (283) million including discounted interest on earnouts of SEK -52 million, gain and loss from financial assets and liabilities of SEK -24 million, unrealized and realized exchange rate differences of SEK 45 million and other items totaling SEK -2 million Total net income of SEK 194 (336) million and total basic earnings per share of SEK 1.55 (2.75) Cash flow from operations in the quarter of SEK 444 (291) million including a realized currency exchange gain amounting to SEK 91 million and cash conversion of 69% in Q3 and 52% for the last 12 months (October 2022 to September 2023) Cash and cash equivalents at the end of the period amounted to SEK 3,989 (4,695) million. In addition, the group has SEK 123 million in long-term bank deposits Maintained full year revenue outlook. We continue to expect sales within the range of -3% to +2%, adjusted for currency effects. We upgrade our adjusted EBITDA margin target for the year to a range of 25% to 27% (2023 outlook excludes contribution from Snowprint Studios) Acquired 70% majority stake in Snowprint Studios after the end of the quarter ===== SIDA 2 ===== Q3 2023 Modern Times Group MTG AB 2 We are very happy to report a strong Q3. Our sales and profitability were driven by a mix of the positive operational momentum we have been building throughout the year, combined with strong operational execution. I am also proud that we have grown sequentially in each of the quarters of the year, despite the normally seasonally weaker Q3. I am also excited to have closed our first major deal since 2021 – the acquisition of Snowprint Studios after the end of the quarter. This enables us to add the fast-scaling mid- core hit Warhammer 40,000: Tacticus to our portfolio and lets us welcome a great team of game industry veterans to our Gaming Village. Our continuously improving performance and strong operational dynamics mean that we are well on track to delivering on our full year revenue goals, while also enabling us to upgrade our full year margin outlook. This upgrade is driven by the strength and ongoing scaling of our casual portfolio, another quarter of highly successful monetization of established users in Forge of Empires and strong growth from Bloons TD6. We reported record revenues of SEK 1 ,494 in Q3, which represented 6% year-over-year growth, supported by positive currency effects. We returned to organic growth in the quarter, with revenues up 1% year-over-year and 2% sequentially in constant currencies. The year-over-year growth was driven by PlaySimple and Ninja Kiwi, while nearly all our studios grew their sales on a sequential basis. It’s also worth keeping in mind that PlaySimple received the last of its platform incentive payments in Q3 last year, which means that our underlying growth is even more encouraging. PlaySimple is the largest studio in our portfolio and is now beginning to benefit from the scale they have been building over the last two years. The strong year-over-year growth reflected the much larger user base for our word games, as well as the strong performance of Word Search and Crossword Jam in the quarter. PlaySimple’s revenues were up slightly on a sequential basis , despite the seasonally weaker third quarter. The studio continued to work actively on optimization and live -ops in the quarter and is making good progress on several new games. InnoGames continued to stabilize its performance in the quarter. Revenues from our largest title, Forge of Empires, were up both year on year and quarter on quarter, thanks to another period of strong execution on live-ops and key events, as well as growing b rowser revenues . The performance in the period further cement s Forge of Empires as one of our most important evergreen titles and we continued to see high engagement and healthy spending levels from our established players in the quarter. This once again highlights how InnoGames has managed to energize and refocus its team following the reorganization in April. The studio’s revenues were down year over year, mainly due to lower marketing investments in some titles while the team continues to work on the long- term performance of their new games. Ninja Kiwi’s revenues were up significantly year over year and up slightly on a sequential basis in constant currencies. The growth was driven by Bloons TD 6, which continues to showcase the strength of Ninja Kiwi’s content combined with highly successful platform and distribution deals. The game also benefited from strong initial sales on Xbox. After the end of the quarter Ninja Kiwi launched a milestone update for Bloons TD 6, which included the brand-new Map Editor feature. Early data has shown very strong engagement for the Map Editor from both new and established players. The update has generated significant buzz in the Bloons community and was a strong driver of engagement out of the gate , prompting players to spend money in the app for the first time . At the end of September, Ninja Kiwi also revealed that their next game will be called Bloons Card Storm, a digital collectable card game set in the Bloons universe which will be launched in 2024. Hutch’s revenues were down year over year and compared to the second quarter, with both F1 Clash and Top Drives performing below our expectations. The game teams are committed to return these titles to growth and are exploring a range of options going forward. Hutch successfully test-launched its new title Forza Customs in four markets, with encouraging KPIs across the board . The game is now available globally and Hutch is now preparing for a full commercial launch of the game. Hutch also announced that they have partnered with NASCAR to develop a new standalone mobile game in 2024. Kongregate’s sales were down year over year , but up slightly sequentially. The studio continued to focus on Web 3.0 gaming, with multiple updates for Bit Heroes Quest launched in the quarter . Kongregate also launched Bit Heroes Runner on Android and IOS during the quarter and added 29 new games to the Kongregate.com platform. We invested a total of SEK 554 million in user acquisition in Q3, which was equivalent to 37% of our total revenues in the period. Our total UA spend was up year over year in constant currencies. This increase primarily reflected the strong growth and increased marketing spend in our casual segment, while it has continued to be challenging to bring in new players to our mid-core games. We reported adjusted EBITDA of SEK 449 million in the quarter, corresponding to a margin of 30%. This was a significant increase compared to SEK 374 million and a margin of 27% in Q3 last year , when our results were boosted by the platform incentive payments in PlaySimple. ===== SIDA 3 ===== Q3 2023 Modern Times Group MTG AB 3 Our current profitability levels reflect our underlying revenue growth in our Word Games and Tower Defense franchises and higher monetization levels from established players in Forge of Empires. We delivered a cash conversion of 69% in Q3 and 52% for the 12 -month period ending 3 0 September 2023. This performance reflected the strong cash generation levels in our high margin studios , somewhat lower CAPEX and slightly positive working capital in the quarter. On 5 October we announced that MTG had acquired a 70% majority stake in the fast-growing Swedish mobile games’ developer Snowprint Studios, the team behind the new and rapidly growing hit Warhammer 40,000: Tacticus. The game was launched in August 2022 and is in the very early stages of its growth journey. We are convinced that we can help Snowprint accelerate their growth by providing them with access to the business intelligence and user acquisition toolkit available through the Flow Platform, which will help unlock new potential, and sharing our expertise in expanding games to new platforms. Snowprint has a small and highly experienced team in Stockholm and Berlin. The studio is led by three industry veterans, each with over 15 years of experience in mobile gaming. The acquisition is closely aligned with our overall business strategy and Snowprint proved to be a strong match with our highly selective M&A framework. The acquisition enables us to increase our relevant scale in the crucially important mid-core segment. It is also closely aligned with our belief in successful games based on powerhouse global IP’s. I am excited about the additional strength in our portfolio and the opportunities for growth and cross - promotion we see from this in the future. At the same time, we are continuing to buy back shares , on the back of the SEK 300 million repurchase program we launched on 1 September. This program runs until the end of the year, and our Board of Directors will evaluate our next steps when the time comes. We expect the North American and European in-app purchase market to have been up by mid -single digits in Q3, which suggests that our markets continue to recover at a healthy rate. Given these positive dynamics, we now expect our overall market to be slightly up year over year in 2023, driven by the casual segment, while the mid-core market remains challenging. I’m excited be heading into the rest of Q4 in a great position to deliver on our maintained revenue outlook and increased margin expectations. The acquisition of Snowprint adds another great studio to our Gaming Village and improves our potential to drive long -term synergies within the group. We have a clear growth strategy, with transparent long - term growth and profitability targets. Our growth will come from our strong portfolio of established games and a very exciting pipeline of new titles that will be launched in next 12 to 24 months. This will be supported by the Flow Platform, and we continue to elevate the tools, experience, and experts we have in our studios. I am excited about our future and look forward to sharing more news with you when the time comes. Thank you, Maria Redin Group President & CEO, Modern Times Group MTG AB ===== SIDA 4 ===== Q3 2023 Modern Times Group MTG AB 4 MTG reiterates its revenue outlook for the full year 2023 but raises its margin expectations. We continue to expect our full-year sales to be within the range of -3% to +2% after adjusting for currency effects. We now expect our adjusted EBITDA margin for the year to be 25% to 27%, slightly above our long-term outlook of 23% to 25%. The outlook for 2023 excludes the contribution from Snowprint Studios, which was acquired on 5 October 2023. March 28 – MTG increased its ownership in PlaySimple to approximately 93%, with the remaining shares held by PlaySimple founders. The group has consolidated 100% of PlaySimple since 1 August 2021 and has a contractual path to full ownership in place. April 13 – MTG’s German gaming studio, InnoGames, announced a strategic organizational realignment of its business. June 12 – MTG announced the appointment of Nils Mösko as its new CFO. Nils has extensive experience in strategy and financial management and most recently served as Chief Strategy Officer and Head of Business Development at the electric vehicle company Polestar. June 15 – MTG’s racing-focused studio, Hutch, teamed up with Turn 10 Studios, a well -known first -party video game developer and the creators of the Forza franchise, to release an exciting new mobile game targeting a broad audience. September 1 – MTG launched a SEK 300 million share repurchase program, starting on 4 September and running until 31 December 2023. The Board of Directors’ view is that the program will increase the value created for MTG shareholders. September 15 – MTG’s wholly owned studio, Ninja Kiwi, successfully launched the tower defense hit Bloons TD6 on Xbox. Ninja Kiwi will continue evolving the game over time with additional features and content. September 21 – Hutch announced a new partnership with the recognized motorsport organization, NASCAR. The partnership will see Hutch developing a standalone title for mobile. September 22 – Ninja Kiwi announced Bloons Card Storm, a competitive digital collectible card game set within the Bloons universe. The game will be launched on mobile and PC during 2024. October 5 – MTG acquire d a 70% majority stake in Snowprint Studios, the studio behind Warhammer 40,000: Tacticus. Snowprint Studios specializes in turn -based tactics games, with Warhammer 40,000: Tacticus having won several industry awards. The goal is to accelerate Snowprint’s growth through the Flow Platform by offering market-leading business intelligence and user acquisition capabilities. Further information about the group’s significant events can be found on MTG’s homepage on www.mtg.com ===== SIDA 5 ===== Q3 2023 Modern Times Group MTG AB 5 Group net sales were up 6% to SEK 1,494 million in Q3, supported by a 5% positive contribution from currency effects. Sales were up 1% year over year and 2% quarter on quarter in constant currencies in Q3 , demonstrating the continued positive momentum for the business as a whole. PlaySimple and Ninja Kiwi were the drivers of the group’s year-over-year growth in Q3, while all the group’s studios besides Hutch increased their revenues quarter on quarter. PlaySimple’s strong growth reflected the scaling of the user base in the last 12 months following investments in user acquisition and ad tech . Year-over-year growth was also affected by Q3 2022 comparison figures, which included the final platform incentive payment received by the studio. Ninja Kiwi reported another quarter of strong year-on-year gr owth and grew sequentially thanks to the continued strong performance of Bloons TD 6. InnoGames ’ sales were down year over year, but the positive momentum the studio has built throughout the year continued in Q3 and the studio’s sales were up sequentially. The strong performance came from its key title Forge of Empires, with revenues up both year over year and sequentially. The growth was driven by strong live-ops and events driving the successful reactivation of established players, leading to improved monetization levels . Hutch reported lower sales both year over year and quarter on quarter as key games continued to underperform. Kongregate’s sales were down year over year but up slightly from the second quarter of this year. MTG reported a 20% year-over-year increase in adjusted EBITDA to SEK 449 (374) million . The adjusted EBITDA margin increased to 30% from 27% in Q3 last year. The improved profitability reflected the higher proportion of revenues from PlaySimple and Ninja Kiwi, with margins also benefiting from the higher proportion of browser revenues and reactivation and better monetization of established players in Forge of Empires . The group’s margin was also slightly positively affected by smaller non-recurring effects in the quarter. This was somewhat offset by higher user acquisition costs from our casual games as this part of the portfolio continues to scale. Total acquisition costs in the quarter represented 37% of total revenues, compared to 35% last year. Total acquisition costs were down from 39% in the second quarter in the seasonally weaker Q3. It is worth noting that the margin in Q3 2022 was also positively affected by the platform incentive bonus received by PlaySimple. The group’s adjustments to reported EBITDA amounted to SEK 20 (49) million in the quarter. This included an adjustment for non-recurring bonus structures of SEK 6 (29) million and an adjustment for M&A transaction costs of SEK 14 (3) million. The group therefore reported EBITDA of SEK 429 (325) million and a margin of 29% (23) in the quarter. The adjustments for the year to date included SEK 40 million relating to the restructuring program in InnoGames in Q2 2023. ===== SIDA 6 ===== Q3 2023 Modern Times Group MTG AB 6 Depreciation and amortization amounted to SEK 146 (132) million and included amortization of purchase price allocations (PPA) of SEK 92 (90) million. Excluding PPA, depreciation and amortization amounted to SEK 54 (42) million. Consolidated EBIT was SEK 283 (193) million in the quarter, which corresponded to an EBIT margin of 19% (14). Operating costs before depreciation and amortization decreased by 2% year over year to SEK 1,065 (1,087) million. The group’s total DAU (daily active users) declined by 2% while MAU (monthly active users) were up 1% on a sequential basis. This performance reflected the fact that Q3 is normally a seasonally weaker quarter, combined with the ongoing challenges to onboard new players to our mid-core games. DAU levels were flat and MAU levels were down slightly year over year, which reflected the previously mentioned challenges in mid-core user acquisition offset somewhat by higher year over year MAU and DAU levels in our Word Games and Tower Defense franchises. Average Revenue per Daily Active User (ARPDAU) was up by 12% year over year and up 3% on a sequential basis, reflecting the healthy levels of revenue generation from our established users in Forge of Empires in particular. Similar to the first two quarters of the year , improved monetization was somewhat offset by a higher proportion of casual players in the group’s overall player mix. Forge of Empires, Word Trip, and Word Jam continued to be the group’s top three performing titles. The top three games represented 46% of the group’s revenues in the third quarter, compared to 47% in the second quarter. Mobile represented 75% (73%) of total revenues in the third quarter. The year over year increase in browser revenues primarily reflected the strong browser performance in Forge of Empires. ===== SIDA 7 ===== Q3 2023 Modern Times Group MTG AB 7 Word Games franchise revenues were up 15% year over year and up 1% sequentially in constant currencies. The two new games in the franchise continued to perform strongly in the quarter, with Word Search growing nearly 50% on a sequential basis. Key franchise developments in the quarter included the launch of Club Championship for Word Trip, a key foundational feature which is expected to significantly contribute to the game’s success going forward. PlaySimple also launched new features to drive engagement for Crossword Jam as well as improved content for non-US geographies. PlaySimple continued to optimize Crossword Explorer for early cohor ts and launched a weekly quest event for the game. Strategy & Simulation franchise revenues were down by 5% year over year in constant currencies but up 3% from Q2. The sequential growth was once again driven by the strong execution of live-ops and events in Forge of Empires. This drove engagement from older players , leading to higher monetization and an increase in browser revenues in the game, which grew both year over year and sequentially. Key events for Forge of Empires included the Fellowship event that began in June, as well as the Soccer event and the Fall event which began in September. The team continued to work on accelerating the performance of Sunrise Village and tested several features to drive onboarding and early retention in the quarter. InnoGames also soft -launched the browser version of Sunrise Village in August, with encouraging early performance indicators. The Strategy & Simulation franchise continued to face challenges with new user acquisition in the quarter, with lower UA spending as a result. As previously mentioned, MTG signed an agreement in October to acquire a majority stake in Snowprint Studios , the team behind Warhammer 40,000: Tacticus. The game’s results, as well as Snowprint’s two other titles Legend of Solgard and Rivengard will be reported as part of the Strategy & Simulation franchise from the fourth quarter of 2023. Tower Defense franchise revenues were up 24% year over year and up 6% from Q2 this year, thanks to the continued strong performance of the franchise hero title Bloons TD 6. The strong performance in the quarter reflected growing distribution revenues, including from Apple Arcade and Netflix, as well as the first Bloons TD 6 sales on Xbox . Revenues in the quarter were also positively impacted by a payment from a third party, who is exploring the possibility of developing a future version of Bloons TD 6 for the Chinese market. Ninja Kiwi has continued to deliver regular updates to the Bloons TD 6 . This included one content update in July, followed by another, major, update in October. The October update included the long -awaited Map Editor feature, which has been received very positively by the community. Early data Indicates that the Map Editor is driving high levels of player engagement, which is driving in-game spending from players who have not paid for in- app purchases before. Ninja Kiwi continues to work on Battles 2 and introduced a major update to the game with a range of important new gameplay features. In September Ninja Kiwi announced that their next game, due in 2024, is called Bloons Card Storm, a digital collectable card game set in the Bloons universe. Racing franchise revenues were down 22% year over year and were flat quarter on quarter as a result of weak performance from both F1 Clash and Top Drives in the quarter. The game teams have continued to work actively on improving the performance of both games. F1 Clash received a several updates during the quarter. Hutch also partnered with Nexus, a platform for live services games that helps game content creators connect with their audiences and earn money from their content, based on a revenue share model. Top Drives received several updates during the quarter, and Hutch also launched the web store for the game. 0 200 400 600 800 1,000 1,200 1,400 1,600 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Word Games Strategy & Simulation Racing Tower Defense Other smaller franchises ===== SIDA 8 ===== Q3 2023 Modern Times Group MTG AB 8 Hutch has made significant progress on their new games in the quarter. Forza Customs, which Hutch developed in partnership with Turn 10 was successfully test-launched in four international markets. Following a successful test launch, Hutch is now preparing for a full commercial launch of the game. In September Hutch also announced that the studio has partnered up with NASCAR to develop a new standalone mobile game. Kongregate’s revenues were down year over year but up slightly on a sequential basis in Q3. The studio continued to invest in its growing Web 3.0 portfolio and also added 29 new games to the Kongregate.com platform in the quarter. Bit Heroes Runner was launched on Android in July and iOS in August , while Bit Heroes Quest received 5 events during the quarter. Net financial items amounted to SEK 10 (304) million in the quarter, of which net interest amounted to SEK 44 (21) million and other financial items to SEK -33 (283) million. Other financial items consist of unrealized and realized exchange rate differences (SEK 45 million), gain and losses from financial assets and liabilities (SEK -24 million), discounted interest on earnouts (SEK -52 million) and other items (SEK -2 million). Unrealized and realized exchange rate differences amounted to SEK 45 million, net , of which realized exchange rate differences amounted to SEK 91 million and unrealized exchange rate differences amounted to SEK -46 million. Gains and losses from financial assets and liabilities amounted to SEK -24 million, of which: • SEK -58 million related to the revaluation of the earnout liability • SEK 32 million related to the valuation of a financial liability pertaining to the acquisition of the remaining outstanding 7.2% shares of Play - Simple, (since the liability follows the value of a fixed number of shares) • SEK 2 million related to other changes. The group’s tax amounted to SEK -99 (-112) million. Net income for the quarter therefore amounted to SEK 194 (385) million. MTG divested ESL Gaming to Savvy Gaming Group in April 2022. As a result, the group’s esports vertical and operations have been reclassified as discontinued operations since Q1 2022 (including in this report). Further information can be found in the 2022 Annual Report , as well as in the 2022 quarterly reports. To date, the MTG VC fund has invested a total of SEK 411 (USD 38.7) million in a total of 25 companies. VC investments complement MTG’s majority stake investment in Kongregate, InnoGames, Hutch, Ninja Kiwi, PlaySimple and Snowprint. The portfolio assets range from start-up game developers across several game genres and game creation platforms in the US and Europe to pure esports-focused companies. VC investments related to esports remained in MTG after the divestment of ESL Gaming. ===== SIDA 9 ===== Q3 2023 Modern Times Group MTG AB 9 Cash flow from operations before changes in working capital and taxes paid amounted to SEK 535 (540) million. This included a realized currency exchange gain amounting to SEK 91 million in the quarter. Depreciation and amortization amounted to SEK -146 (-132) million, of which SEK -92 (-90) million pertained to amortization of PPA. Paid taxes amounted to SEK -130 (-119) million. The group reported a SEK 39 (-129) million change in working capital in the quarter. Net cash flow from operations therefore amounted to SEK 444 (291) million. Total cash flow relating to investing activities amounted to SEK -160 (-625) million in the quarter and mainly consisted of an earnout payment of SEK -112 million to Hutch and Ninja Kiwi. Capital expenditure on tangible and intangible assets, mainly consisting of capitalized development costs for games and platforms that have not yet been released, amounted to SEK -43 (-63) million in the quarter. Total cash flow relating to financing activities amounted to SEK -75 (-2,898) million, of which SEK -54 million related to the group’s repurchase of shares. The cash flow in Q2 2022 included the extraordinary cash value transfer to MTG’s shareholders through a share redemption plan, which entitled holders to a redemption of SEK 25.00 per share and which was approved by the 2022 AGM. The net change in cash and cash equivalents amounted to SEK 210 (-3,232) million. The group had cash and cash equivalents of SEK 3,989 (4,695) million at the end of the period. Net debt refers to the sum of interest-bearing liabilities less cash and cash equivalents. Interest -bearing liabilities such as additional purchase considerations or lease liabilities are not included. Net debt as of September 30, 202 3, amounted to SEK 3,989 (4,695) million. The net debt calculation includes external financing of SEK 0 (0) million less SEK 3,989 (4,695) million in cash and cash equivalents. ===== SIDA 10 ===== Q3 2023 Modern Times Group MTG AB 10 Modern Times Group MTG AB is the group's parent company and is responsible for group-wide management, administration, and financing. Net interest and other financial items for the quarter amounted to SEK -100 (373) million. Net interest amounted to SEK -8 (16) million. Unrealized and realized exchange rate differences amounted to SEK 2 (360) million and other financial items to SEK -94 (-3) million. The parent company had cash and cash equivalents of SEK 2,753 (4,085) million at the end of the period. The total number of shares outstanding at the end of the period was 124,055,202 (125,251,164), excluding the 1,289,182 Class B shares and the 6,324,343 Class C shares held by MTG as treasury shares. In August, MTG cancelled 6,520,000 B-shares previously repurchased by MTG under its share repurchase programs. ===== SIDA 11 ===== Q3 2023 Modern Times Group MTG AB 11 This interim report has been prepared according to ‘IAS 34 Interim Financial Reporting’ and the Swedish Annual Accounts Act’. The interim report for the parent company has been prepared according to the Swedish Annual Accounts Act – Chapter 9 ‘Interim Report’. The group's consolidated accounts and the parent company’s accounts have been prepared according to the same accounting policies and calculation methods as were applied in the preparation of the 2022 Annual Report. Disclosures in accordance with IAS.34 16A appear in the financial statements and the accompanying notes as well as in other parts of the interim report. No transactions between MTG and related parties that have materially affected the Group’s position and earnings took place during the period. Significant risks and uncertainties exist for the group and the parent company. These factors include the prevailing economic and business environments; commercial risks related to expansion into new territories; other political and legislative risks related to changes in rules and regulations in the various territories in which the group operates; exposure to foreign exchange rate movements, and the US dollar and euro -linked currencies in particular; the emergence of new technologies and competitors; and cyber-attacks. The group’s game development businesses depend on their ability to continue releasing successful titles that attract paying customers, conditions that are not under the group’s full control. Risks and uncertainties are also described in more detail in the 202 2 Annual Report, which is available at www.mtg.com. Stockholm, October 25, 2023 Maria Redin Group President & CEO, Modern Times Group MTG AB ===== SIDA 12 ===== Q3 2023 Modern Times Group MTG AB 12 We have reviewed the condensed interim financial information (interim report) of Modern Times Group MTG AB (publ) as of 30 September 2023 and the nine -month period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and oth er review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices and consequently does not enable us to obtain assurance that we wou ld become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordanc e with the Annual Accounts Act. Stockholm 25 October 2023 KPMG AB Helena Nilsson Authorized Public Accountant ===== SIDA 13 ===== Q3 2023 Modern Times Group MTG AB 13 ===== SIDA 14 ===== Q3 2023 Modern Times Group MTG AB 14 ===== SIDA 15 ===== Q3 2023 Modern Times Group MTG AB 15 ===== SIDA 16 ===== Q3 2023 Modern Times Group MTG AB 16 Net income for the period is in line with total comprehensive income for the parent company. ===== SIDA 17 ===== Q3 2023 Modern Times Group MTG AB 17 The carrying amounts are considered to be reasonable approximations of fair value for all financial assets and liabilities, except shares and participations in other companies and contingent considerations for which the valuation technique is described below. Shares and participations in other companies – acquisition cost is initially considered to be a representative estimate of fair value. Subsequently, values are remeasured at fair value and gains/losses recognized when there is subsequent financing through participation by a third -party investor, in which case the price per share in that financing is used, when there is a realized exit or when there are indications that cost is not representative of fair value and sufficient, more recent information is available to measure fair value. Listed holdings are valued at the current share price. Contingent consideration – expected future values are discounted to present value. The discount rate is risk-adjusted. The most critical parameters are estimated future revenue growth and future operating margin. ===== SIDA 18 ===== Q3 2023 Modern Times Group MTG AB 18 The purpose of alternative performance measures (APMs) is to facilitate the analysis of business performance and industry trends that cannot be directly derived from financial statements. MTG uses the following APMs: Adjusted EBITDA Change in net sales from organic growth Adjusted EBITDA is used to assess MTG’s underlying profitability. Adjusted EBITDA is defined as EBITDA adjusted for the effects of items affecting comparability, non-recurring bonus structures, acquisition-related transaction costs and impairment of capitalized internal work. Items affecting comparability refer to material items and events related to changes in the group’s structure or lines of business, which are relevant for understanding the group’s development on a like -for-like basis. During the second quarter of 2022 the group changed its definition of adjusted EBITDA. The new definition of adjusted EBITDA does not include the group’s various operational incentive programs and only includes non-recurring bonus structures. Since the group generates the majority of its sales in currencies other than the reporting currency (i.e., SEK, Swedish krona) and currency rates have proven to be rather volatile, the group’s sales trends and performance are analyzed as changes in organic sales growth. This presents the increase or decrease in the overall SEK net sales on a comparable basis, allowing for separate discussions of the impact of exchange rates, acquisitions, and divestments. The following table presents changes in organic sales growth as reconciled to the change in total reported net sales. After the end of the period, MTG has acquired a 70% majority stake in Swedish mobile game development studio Snowprint Studios, the purchase price is estimated to be USD 45 million. Snowprint is the studio behind the success of Warhammer 40,000: Tacticus and the deal is made on a cash and debt free basis, for a cash consideration which will reflect a 1.8x multiple of 2023 revenues for Warhammer 40,000: Tacticus. The acquisition of Snowprint is closely aligned with the M&A -driven element of MTG’s growth strategy and enables MTG to add a critically acclaimed game with high affinity to our existing titles in our portfolio. The transaction is closed and MTG will consolidate Snowprint Studios from October. There were no other events after the end of the reporting period. ===== SIDA 19 ===== Q3 2023 Modern Times Group MTG AB 19 EBITDA, adjusted for the effects of items affecting comparability, long -term incentive programs, acquisition -related transaction costs and impairment of own work capitalized, which are referred to as adjustments. Average revenue per daily active user. Capital expenditures. Operating cash flow in relation to adjusted EBITDA. Daily active users. Earnings per share is expressed as net income attributable to equity holders of the parent divided by the average number of shares. Net income for the period from continuing operations before other financial items, net interest and tax. Profit for the period from continuing operations before other financial items, net interest, tax and depreciation and amortization. Items affecting comparability refers to material items and events related to changes in the group’s structure or lines of bus iness, which are relevant for understanding the group’s development on a like-for-like basis. Monthly active users. The change in net sales compared with the same period last year, excluding acquisitions and divestments and adjusted for currency effects. The change in net sales compared with the same period last year as if the company had fully consolidated its acquisitions and divestments as of the previous period and adjusted for currency effects. The pro forma figures have been prepared with advice from external expertise in order to restate a GAAP financial statement to IFRS and may include timing adjustments for both income and costs. Revenue presented as if the company had fully consolidated its acquisitions and divestments. The pro forma figures have been prepared with advice from external expertise in order to restate a GAAP financial statement to IFRS and may include timing adjustments for both income and costs. User acquisitions costs presented as if the company ha d fully consolidated its acquisitions and divestments as of the previous period. The pro forma UA spend figures are presented in local GAAP for the respective portfolio companies from the time periods prior to being consolidated by MTG. The effect that foreign exchange rate fluctuations can have on a completed transaction prior to settlement. This refers to the exchange rate, or currency risk associated specifically with the time delay between entering into a trade or contract and then settling it. Converting one currency to another, often in the context of the financial results of foreign subsidiaries into the parent com pany’s and/or the group’s functional currency. User acquisition. ===== SIDA 20 ===== Q3 2023 Modern Times Group MTG AB 20 The Annual General Meeting will be held on 16 May 2024 in Stockholm. Shareholders wishing to have matters considered at the Annual General Meeting should submit their proposals in writing either by post to the “Company Secretary”, Modern Times Group MTG AB (publ), Annual General Meeting, P.O. Box 2094, SE-103 13 Stockholm, Sweden or by email to agm@mtg.com at least seven weeks before the Annual General Meeting in order for the proposal to be included in the notice to the meeting. Further details on how and when to register will be published in advance of the meeting. Date 8 February 2024 24 April 2024 16 May 2024 18 July 2024 24 October 2024 Anton Gourman, VP Communications Direct: +46 73 661 8488, anton.gourman@mtg.com Follow us: mtg.com / Twitter / LinkedIn MTG will host a livestream and conference call at 3.00 p.m. CEST today, on 25 October 2023. The call will be held in English. How to join: • To participate via livestream, please use this link. • To join via phone, please register on this link . After you’ve registered, you’ll receive the dial -in number and conference ID to access the teleconference. • You can ask questions via phone during the teleconference or by using the livestream Q&A tool. ===== SIDA 21 ===== Q3 2023 Modern Times Group MTG AB 21 Modern Times Group MTG AB (publ.) – Reg no: 556309-9158 – Phone: +46 (0) 8-562 000 50 MTG (Modern Times Group MTG AB (publ.)) (www.mtg.com) is an international mobile gaming group that owns and operates gaming studios with popular global IPs across a wide range of casual and mid -core genres. The group is focused on accelerating portfolio company growth and supporting founders and entrepreneurs. MTG is an active driver of gaming industry consolidation and a strategic acquirer of gaming companies around the world. We are born in Sweden but have an international culture and global footprint. Our shares are listed on Nasdaq Stockholm (“MTGA” and “MTGB”). This information is information that Modern Times Group MTG AB (publ.) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 7:30 a.m. CEST on October 25, 2023. This interim report contains statements concerning, among other things, MTG’s financial condition and results of operations that are forward-looking in nature. Such statements are not historical facts but, rather, represent MTG’s future expectations. MTG believes that the expectations reflected in these forward -looking statements are based on reasonable assumptions; however, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. Such important factors include but may not be limited to MTG’s market position; growth in the gaming industry; and the effects of competition and other economic, business, competitive and/or regulatory factors affecting the business of MTG, its group companies and the gaming industry in general. Forward-looking statements apply only as of the date they were made, and, other than as required by applicable law, MTG undertakes no obligation to update any of them in the light of new information or future events.