Good morning, ladies and gentlemen, and thank you for holding. Welcome to the MPG's Second Quarter Earnings Call. At this time, all participants are in a listen only mode. After the presentation, participants will have the opportunity to ask questions, at which time instructions for the question and answer session will be given. Presentation slides to accompany the call are available via the link on the homepage of mtgs.com.
I will now hand the call over to your host, President and CEO, Mr. Jorgen Mattson Lindeman, who is joined on today's call by CFO, Maria Reddin.
Thank you, operator, and good morning, everyone. Just before we get into the numbers, let's take the usual step back and look at the MGD strategy. So please take through click through to Slide 2. As you can see, we are transforming MGG from a traditional national broadcaster into a global digital entertainer while aiming to deliver long term sales and profit growth and return cash to shareholders at the same time. If I can ask you to turn to Slide 3, you can see that the strong momentum we have seen for some time now continued into Q2.
Sales were up 5% on an organic basis with growth in all four of our business segments. The rolling 12 months organic growth rate has now accelerated to 8%, and I'm particularly pleased that the momentum is so called based and driven by the strategic investments that we have been making in both our Nordic and global businesses. Profits were up 9% at the same time as we have continued to invest in e sport, original drama content and additional sport rights. Our markets are among the fastest moving in the industry, and our products are better positioned than ever to shape the future of entertainment and benefit from the ongoing changes in consumer behavior. We have now secured virtually all of the major football rights for the years to come, including the Champions League and the English FA Cup.
We have also won back a shared deal in Sweden for the Ice Hockey World Championship and locked in the Finnish rights for the national team football qualifiers. We're also creating our own IP with a pipeline of up to 50 original drama productions and have now launched the World Boxing Super Series. We are a founding shareholder in this first of its kind knockout boxing tournament. We have 16 fighters, 2 weight classes, and we can present 9 undefeated fighters, 7 belts, 5 world champions and 3 former champions all competing for the Muhammed Ali trophy. I hope you also saw this morning that via play will be showing the most talked about fighting years taking place next month as boxing meets MMA in the form of the showdown between the World Champions Floyd Mayweather and Conor McGregor in Las Vegas.
We have also continued to realign our portfolio. We have completed the sales of our Chegg operations, stepped up our investment in InnoGames and announced the acquisition of online games publisher and developer, Pancrogate. The announced sale of the Borrtec and Tanzanian operation is just pending regulatory approval. Moving to Slide 4. You can see that the group reported sales were up 14% with higher sales in all segments and the contribution from the consolidation of Innogames from the beginning of May.
Our increased profitability was again driven by the performance of the Nordic Entertainment business with healthy sales growth and positive effects from our cost transformation program. The transactional impact from the U. S. Dollar has continued to reduce and amounted to approximately SEK 15,000,000 in the quarter, most of which impacted the Nordic Entertainment. If you go to Slide 5, in our Nordic Entertainment sales, you can see that it was up 8% on an organic basis.
This was the 4th consecutive quarter of robust organic growth for our Nordic operations, and the rolling 12 month organic growth rate has now accelerated to 10%. Our free TV and radio operations again grew in all three countries in Q2. Linear viewing continues to fall in all markets, but this is more than offset by higher advertising prices, increased carriage fees, growing sales of iofri and the benefit of extended agreements with the likes of Fox. We have talked about this many times now, but TV continues to offer superior reach and return on investment. This creates the high demand levels that continue to push up prices.
We also continue to invest in Biofree and are entering more safe and content partnerships agreement with the likes of Discovery and Viacom and Fox. The Nordic Pay TV sales were again up double digit percentage points, and Viacom and Fox, they continue to be the key driver of this growth, which is a function of both volume and value growth. We have continued to see subscriber erosion in our traditional platforms, but the revenue effect was offset by the distribution agreement for our new premium sports channels in Sweden and the price increases put through last year. Buyer Play's customer satisfaction remains a prime driver of our growth, and we have implemented many technical and product improvements and premiered new bioplay original such as Bilibiliiviti and BabyPal, which together resulted in a new all time low churn rate for our TV and movie package in Q2. The organic growth flowed through to the bottom line and combined with cost transformation savings to get a 15 percent higher profit for the segment.
If you turn to Slide 6, we can see that sales for the continued international entertainment business were up 5% and driven by another quarter of very healthy growth for our Bulgarian business. However, this was offset to some extent by trade performance, which was impacted by the termination of some distribution and events agreements. Products for the segment were down 7%, which reflected the double digit percentage point profit growth in Bulgaria being more than offset by the increased investment and bad debt write off at TRACE. The investment include the launch of TRACE PLAY, which is a new global subscription based video and radio streaming service that we are gradually rolling out and is dedicated to urban entertainment. If we move on to Slide 7, you can see NGG Studios sales were up 1% on an organic basis, and the demand for scripted drama and brand entertainment continues to be high, but has been offset by lower demand for non scripted productions.
Our storytelling remains very strong, and the upcoming premieres of high end drama series like Haendel and the cinema release of the pseudo suite and our Formula 1 driver, Ronnie Peterson's Life, are both creating huge interest. On our Q1 call, we announced our drama series Midnight Sun Nobel had been both nominated to the Golden Nymph Award, and Nobel actually won this prestigious award, which is a great contributor to the quality and relevance of the content experience that we are creating. Large sales profitability was exceptionally strong on the back of previously announced license sale of several strict formats. This year's EBIT was therefore down but still significantly higher than in Q2 'fifteen, so the underlying performance is still heading in the right direction. If you then turn to Slide number 8 and looking at the NTT sales, which was up 70%, and this primarily reflected the consolidation of InnoGames sales from 1st May when we increased our shareholding to 51%.
InnoGames total sales for Q2 were up 32% compared to the 30% in Q1 and 25% last year. EBIT increase is almost 50% to €9,000,000 with a margin of 23%. Easter is a seasonally very strong period with a lot of promotional activities as gaming activity increases during holidays.
And as
a result, roughly half of Innogame's Q2 EBIT came in April, meaning that we only partly benefited from the strong Q2 performance as we started to consolidate the company from May. Also remember that our consolidated EBIT for InnoGames is impacted by NGG amortization charges of €1,300,000 following our purchase price allocation. So we are now looking forward to a very strong second half when it comes to our e sport business with organic revenue growth of at least 40%, and that is due to more events taking place now in Q3 and Q4 than we had last year. So FDG's ex organic growth in Q2 reflected a different event calendar this year. So you can and as you can see from the events scheduled in the presentation on Slide 9 and 10, some major events which took place in Q2 'sixteen has now moved to Q3.
This combined with the new deal signed with Intel and Facebook and Twitter and Twitch and YouTube and yesterday's announcement of the partnership between ESL and Disney on 2 original series in a new daily summer programming block dedicated to the world of gaming on Disney HD will ensure that our second half growth is much higher and more than 40% on an organic basis. This compares with 60% growth in the first half of the year. The Intel deal, in particular, has been extended to not just cover the extreme markets, but also a global technology partnership, the branding of our studios in Europe and U. S. And the creation of the new Intel Grand Slam with a $1,000,000 prize for the winner.
As in Q1, we no longer include price money for 3rd party events in our reported figures. Q2 'sixteen sales and cost would have been 25,000,000 dollars lower if presented on this basis. Our combined organic NPN sales were up slightly, following a combination of very healthy growth at Spley, but lower sales in Tsumebin due to the lower online advertising prices and industry wide impact of advertising focus on brand safety. We do expect the zoom in performance to gradually improve in second half as the market comes back and we focus more and more on branded entertainment sales. We reported a total operating loss of 20 GX of $53,000,000 in Q2, up from $48,000,000 a year ago but down from the $88,000,000 in Q1.
This result included a $36,000,000 positive contribution from Innogames as an associate in April and then fully consolidated in May June as well as the €10,000,000 of M and A costs mainly related to the Kongregate acquisition. The consolidation of Pinogames, together with the more positive sales development in the second half of for Esports, in particular, as well as the measures that we are taking to optimize Turtle make us confident that we will deliver significant lower losses in the second half and a profit for the whole of FPGX already in Q4. And just to be clear, this is there's no change to our overall outlook. We do expect that the full year losses for GTX will be lower than last year when excluding InnoGames and Complegate. This, of course, implies a significant improvement in the second half sorry, the second half year on year.
We expect to close the acquisition of Complogate soon, which we expect will generate at least $50,000,000 of revenue and around 10% EBITDA margin for the full year 2017. Kongregate is a strategic fit for us because it brings multiplatform publishing business and an emerging games developer, all based in the U. S. To complement InnoGames' Europe based business. This, therefore, gives us the ability to screen other investors' opportunities in a very efficient way and to build up further value through the acquisition of smaller games developers and their studio IP.
So that concludes my comments. So I will now hand the call over to you, Maria, for your comments.
Thank you, Jorgen, and good morning, everyone. If you please turn to Slide 11. Reported sales were up 14%. This included 5% organic growth and a positive 3% current impact driven by the appreciation of the euro, Norwegian and Danish kroner. The impact from acquisitions and divestments amounted to 6% and was primarily driven by the consolidation of Inogames.
Operating income was up 9% compared to last year. Nordic Entertainment and Inogames were the key profit drivers, which only partly was offset by the weaker performance in trade, NTT Studios and our esports businesses. The transactional headwind from the U. S. Dollars amounted to $50,000,000 in the quarter, which was offset by translation gains.
We continue to expect a negative transaction impact of approximately 75,000,000
dollars from the U. S. Dollar for 2017,
which means that the second half impact will be slightly lower than the first impact in 2017. Items affecting comparability amounted to $23,000,000 and it's comprised of a non cash charge mainly relating to the accounting previously capitalized transaction costs when Inogenes became fully consolidated.
If you
then could turn to Slide 12. Our cost transformation is on track, and we generated incremental savings of $30,000,000 in the second quarter, taking that run rate to 555,000,000 We continue to expect annualized savings of approximately $600,000,000 for the program. The cash flow impact from restructuring was approximately $10,000,000 in the quarter, taking the total so far to $480,000,000 Looking forward, there is around $40,000,000 of cash to be paid out, which would take the total cash cost to approximately $520,000,000 That is slightly lower than our initial forecast of $550,000,000 dollars If you then turn to Slide 13, cash flow from operations was up in the quarter. As normal in Q2, net cash flow was positively impacted by working capital development. However, the net positive effect was impacted by an inventory buildup, which primarily reflects our content investments.
Cash flow from investing activities included a step up investments in Innogame and the disposal of our Czech operations. The Baltic and Santander disposals are still awaiting approval and we have now also announced the acquisition of Contribute for an enterprise value of $55,000,000 Our short term borrowings increased by nearly $1,500,000,000 in Q2 and we ended the quarter with a higher than normal cash balance of $2,200,000,000 which will be used to fund the content payments due in July as well as the expected payments for the Kongregate acquisition. We paid off the highest ever cash dividend of $800,000,000 in Q2 and we ended the quarter with a net debt of $2,300,000,000 equivalent to 1.7 times trailing 12 month EBITDA before items affecting comparability. So that is it for my comments. And back to you, Jorgen.
Thank you, Maria. And now please go to Slide 13. So in summary, we have again delivered a quarter with healthy organic growth, which clearly demonstrates that we have more relevant and popular products than ever. Products were up 9% despite content and digital investments, and the Nordic business, in particular, has performed very well. Aerogames has added sales and profit, and we now expect MTH to report its 1st quarterly profit already in Q4 of this year.
We have continued our portfolio realignment through the closing of divestment of our Czech operation, the step up investment in InnoGames and the announcement of the acquisition of Kongregate, while at the same time paying off our highest ever cash dividend. So that concludes our comment on the results. So over to you now, then operator, start the Q and A session, please.
Thank you, sir. Ladies and gentlemen, we are now ready to register And the first question comes from Adrien de Saint Hilaire from Morgan Stanley. Please go ahead. Your line is now open.
Good morning, everyone. Thanks for taking the questions. And I've got 3 of them, please, if that's okay. First of all, we've heard comments from Com Hem saying they're looking to reduce the number of linear TV channels that they carry. So can you talk a bit about the outlook for your own carriage fees and distribution revenues and touch on the upcoming schedule for renewal for your channels in the Nordic?
That's the first question. Second question sticking to Com Hem. Kinnevik, of course, took a stake in the quarter. Just curious about what you think it means for MCG? And lastly, Jorgen, perhaps can you give us an update on the 2018 target for MCGX, which was, I think, the business to be breakeven ex games and congregates.
So I don't know if you want to touch on this guidance or give us an updated guidance inclusive of InnoGames and Free Gates? Thank you very much.
Yes. When it comes to the linear channels and our linear channels, I think it is always that what we have done, of course, is that we have invested in the products, and we have got more and more content on board. And that hopefully should make our products very relevant to the consumers. And obviously, we have got more and more content on board. Some other companies might have lost content.
So I don't know. That might be the companies that he's referring to. We are very happy with the partnerships that we have with Com Hem and the other distributors. We have long lasting distribution deals with, yes, with basically everybody right now until 'eighteen, 'nineteen, 'twenty and so forth. So I think it's quite important that if you are relevant storyteller, you have relevant products, which the consumers that they are dying to get, obviously, then you have a relevance in Con Hem network as well.
And that's, of course, what we are aiming to continue to have. When it comes to Kinnevik and Com Hem, I have probably for sure the wrong person to ask since I don't owe any of them. So you need probably to ask Kinnevik or Com Hem what the idea is, and I cannot answer there. 2018 for FTGX, yes, we said that FTGX would be breakeven in 2018, and we said there would be that without InnoGames, and that still counts, of course. That is still the ambition.
And obviously, now with the InnoGames performance, it should look fairly strong as well in 2018, correct.
Okay. Thank you very much.
Thank you. And now we'll take our next question from Lisa Yang from Goldman Sachs. Please go ahead. Your line is now open.
Good morning. I have a couple of questions, please. Firstly, in the Pay TV segment, in light of Netflix results, which reported like very, very strong beat internationally, I'm just wondering if that has affected Via Play in particular. If you can comment on your market share, that would be really helpful. And related to that, I mean, I noticed you lost about 14,000 customers in your for your 3rd party network.
So just wondering what has driven that? Secondly, it's related to MTG X. I mean, you're guiding for the first time to over 40% growth in esports for the second half. Is it possible to have an expectation for the overall MTG X growth in the second half? And finally, could you also maybe clarify what your intentions are regarding the international assets, TRACE and Bulgaria?
Yes. When it comes to Viaplay, then as I said as well in my comments, we have seen a very strong quarter again for ViaPlay, and we have seen more customers coming in, and we have seen a lower churn. So that is, of course, good news, and that is always on the back of the investments that we have made in particularly also in the original programming. And so the development of bioplayer, we are happy. I think now the Nordic OC players are releasing their figures.
So we don't know the performance of Netflix and HBO and others in the Nordics. But we know that we are very happy. And with Fireplay, as you can see as well that despite the 14,000 third party network you are talking about, we still managed to grow the business 11% in the quarter, the Pay TV business. So it was a very strong quarter. And some of the losses that we had in 3rd party networks, again, it is minor, 14,000.
But that, of course, could probably be something that we have a sports low sports season coming out as well, and those might come back later. But that could be one of the reasons. I don't know specifically why we have lost the $14,000 Last year, we lost $24,000 and this year combined, and this year, we lost 24,000,000. So that is the same pattern actually. When it looks when talking about MTG growth ex the second half year, but what we have said is particularly around the e sports business that we have teed it up now to be very strong, the segment.
We see strong growth in the InnoGames as well. We are not giving any outlook when it comes to the percentage growth of the whole business. What we have said is that we do see now and we have the ambition now to make it profitable in Q4. I think that was your question.
Okay. And can I also follow-up on the eSport? I mean, what do you think of the growth trajectory in 2018 beyond? I mean, especially on the back of things, you have publishers like Activision, Riot Games recently all setting up e sports leagues. Just curious about your outlook beyond 2018.
No, but the outlook is very positive. That goes without saying, since we have the brands and products that we're having, and that is what you see as well in all the deals that we're announcing. And I think yesterday, we recently announced a deal now with Disney, where we will deliver original programming to the Disney XD channel. So it is very strong brand. And obviously, the area is very interesting.
So you will see more and more companies coming in, and you will see new e sport products coming in as well. Hopefully, we will also be able to present a range of new products going forward. So we think that is a very interesting area to be in. And obviously, we see that the consumption of e sport continue to increase, came from Katowice and also now the last event we had in Cologne, which was not even a master event, which still had very, very strong traction, you see the partner deals that we have lined up, the global partner deals as well. So that is, as we see, the very prosperous future for e sport.
And the further we get down the path with e sport, the better we are able to articulate as well sponsorship proposition and advertising proposition. And you saw also the bigger deal that we now made with Intel, which is not just a regular sponsorship deal, but it's actually much more than that because that the advertisers, they also now to see proof of the pudding that the segments in esports are very interesting. So the agencies will start to reallocate money, hopefully, from other places and then into e sports. So we do see a very prosperous future for our e sports assets. Thank
you. Thank
you. And now we take our next question from Rasmus Enberg from SHB. Please go ahead. Your line is now open.
Yes. Hi. I was wondering, since you don't state anything about the Q3 in MTGX that, that will still be a loss, I suppose. Is that correct?
Yes. That is you could assume that, yes.
Yes. And if I take the profit that you see in Q4 relative to the loss in Q3, does that mean that the second half overall is profitable, I. E, it's a significant profit in Q4? Is that how we should read it?
Yes. It was also fair to assume that the second half there will be second X will be profitable in the second half, yes.
Okay. And then the second question, the dollar has come off quite a bit now. What is the timing effect of that? When would you see a benefit from that with your current hedging?
Given that we hedge on a rolling 16 months projection, it will be during 2018. And if you look at now, as I said, you have SEK 75,000,000 this year. And with the current rates, you should see rather zero impact next year. And it will continue to sort of go down, then you're starting probably a small positive effect in second half of twenty eighteen.
Okay. Thank you.
Thank you. And now we'll take our next question from Martin Arnold from DNB Markets. Please go ahead. Your line is now open.
Good morning. My first question is on the these new agreements in esports. Could you just elaborate a little bit on those agreements and how it works from sort of an incremental cost perspective? How much sort of does it take on the cost side when you enter these agreements?
Yes. Yes, I can. Obviously, it is very much depending on what agreement it is, and that is not to give you a political answer. But obviously, if it is content we are selling, which we already have produced and we are selling that globally, that could be a tournament, that could be news clips or whatever, then obviously, there's a scale effect here as well. And the more countries we sell to, the more money we'll make on the content.
So that is, of course, one thing. The sponsorship is also depending on what kind of sponsorship is it. With Telefonica in Spain, we are also doing leagues. We are doing tournaments. We are doing studios.
So there, you have a different component to it. I think secret is, of course, or the idea is, of course, that you have a margin of independent of what product it is. And then obviously, you are which we have done and you have seen, you are in the beginning investing a lot, which we have done in order to document, in order to prove that the products that we have here, the storytelling in e sport, is very relevant for many consumers. And that is what we see right now, and that is the investment we have made. I think the fact that we have managed to do all these deals and now lately with Disney or lately with as well with the OSG platform in Canada, we have now as well the content in Emirates, flights and whatever is all over, of course, shows that the relevance is there.
And therefore, we going forward, of course, we'll see movements where we can capitalize better on the content, and you will see advertisers coming in. So it is very difficult to give you a general answer on the question on the cost associated with the revenue streams. So advertisement is a different board game. Concentration is, of course, a different board game. And also our horizon for Payback for that content, if it's specific for market, if it is a global product and so forth.
I don't know if that helps you, but I think that is as close as I can get.
No, that's good. And this sort of organic growth that you're talking about, more than 40% in the second half, sort of what you see now, you think that, that could continue into the first half of next year?
Yes. I think what we are anticipating, of course, is that we will continue to produce and do very strong and relevant shows. So we will do more shows. That is what we are believing. Also in the first half of second year, we should also see hopefully more and more content sold.
We should see more advertisers coming in and so forth. But we have not guided for 2018 at all. I think what we are doing now is that we can see the strong momentum that we have in the media deals that we have done, the advertising, the sponsorship, and we have more events coming up now in the second half. So I think that is as far as we can give you ideas on the performance right now. But obviously, as I said, all trends in terms of consumer behavior, parts of course in a direction that this product continues to become or to continue to be very, very relevant.
So we are not seeing the opposite.
Okay. And when it comes to your international entertainment business, it seems Bulgaria continues to do well. Do you expect the margin expansion in Bulgaria going forward? And what about the timing for turnaround in this trays business?
Yes. No, we are happy with the performance of Bulgaria, and they are doing very well. We have not talked about margin for the Bulgarian business, but obviously, it is a strong performing company right now on also a digitally very strong area. So we are not guiding on margin for the Bulgarian business, but we are very happy with the performance. When it comes to trade, yes, again, trade is a unique story.
It is a unique story about urban entertainment. It is a unique story which can travel globally. And that is what we're investing in right now when it comes to the play products that we have launched globally, soft launch. So we understand and we can see the traction and where to invest more and what content to invest in as well. So trade is a very interesting opportunity for us.
Obviously, Bulgaria now is, of course, a driver in the international sector.
Okay. And then just finally on the pay TV in the Nordics. Do you still see a potential to grow 3rd party subs this and next year for the full year? And also would you expect satellite ARPU growth to continue quarter over quarter in the second half?
It goes without saying. I think if you ask all our sales people, the ambition is, of course, to grow also a third party network, and that is what we're investing in, that we become more and more relevant there as well. So that is an ambition. Difficult to give you a forecast on that. The ARPU growth, yes, we do believe that we continue to grow ARPU.
We have very strong customer base. We are down 10,000 only, as you can see, in the Q2, but we are up quite a lot when it comes to the MiWay products. So it is a very strong combination that we're having right now. And just to help you a bit more on your question, sorry, on eSport. And I think if you want some industrial figures on how that the markets, they see the growth going forward.
They do have new show figures for 2018, which implies a growth of 35%. We have set the growth in 2019 to be 26% and the growth in 2020 to be 25%. So that is the Niushu figures where they are making a step on the growth in e sport. And hopefully, we at least will follow that now.
Thank you. And now we'll take our next question from Meakin Hasin from Kona. Please go ahead. Your line is now open.
Yes, thanks. Yes, I have a question regarding InnoGames. If you can talk about the growth drivers for this quarter and offered also a little bit about the outlook. And I'm thinking about games and the monthly active users, unique payers, acquisition costs and the pipeline that you have?
Yes. I think what we're seeing, of course, is that the InnoGames transformation from a browser based browser focused company to a mobile gaming company is helping a lot in all fairness. And also, the pipeline of products that they're having right now, some of them being soft launched, looks very interesting as well. I think that is what we can say, and that is what we have given. The 32% growth in Q2 is very strong, and it is above the growth that we saw in Q1 and also the 25% that we saw for the full year last year.
They are 50% up on profit Q2 versus last year. So it is a very strong performance. And we have not given any specific information, and we will not give any specific information when it comes to customer acquisition cost and so forth. But the traction that the company sees right now and the soft launches that they have with some of the games are looking very interesting. And it is a high margin business as well for us.
So it and they have a strong pipeline. So we are very excited about the future for that company.
Okay. Sounds good. But you're not thinking about using part of the strong results momentum, I mean, to boost acquisition costs further and I mean, hold back margins a bit, invest in the future growth?
I think what we're looking at right now is, of course, to make sure that we do it in the way that the company is a very disciplined way the company has always done. And it is there, Stella, when it comes to marketing and understanding as well the returns on the marketing investment and when to beef up and not. And as we also said in the results around Easter and so forth, around the special holidays and so forth, we do see strong performance. And they have full control and know better than anybody else where to put more marketing effort in, when to launch new stories and so forth. So it is very industrialized in a very good way, I must say.
So they are driving the company in a very responsible and professional way. And the aim is, of course, to grow the company. It is not to milk or not to take more money out of the company. It is to grow in relevance and to make sure that we launch many new successful IP formats.
Yes. And my final question is about the overall game strategy that you have after the acquisition of Congregate, it would be interesting to hear. I mean thoughts about what you're targeting, where you want to be combining Congregation in the games and further acquisitions?
Yes. No, I think it serves different purposes, yes. So the InnoGames, they have already now established IPs and very strong performance already. And as you know, they're big in U. S, and they are looking at where else they should be big, these guys.
And I think as well, when it comes to Inter Games going forward and the financial performance, you should look at a 20% EBITDA margin as what that company should deliver independent more or less on the investment. But that is what we're looking at right now. Kongregate is a completely different animal where you have historically published a lot of games. And of course, you get so many games you bet every day. So you also understand the trends and you understand what games you want to invest more in.
And that is, of course, an opportunity for us now to go in and acquire IPs at a very early stage as well, which is a new model as well for Compligade. So that is another strategy. Then of course, you look at the different genres of gaming where you have casual gaming and you have the strategy games and so forth. And we want to broaden the genres as well and not only focus on 1 genre. So we are looking at a range of new companies, of course, which can help us get a very complementary and a very food based genre portfolio as well.
So we see a lot of opportunities. Luckily, as you know as well, 30% of the time spent on mobile today is related to mobile gaming every day. So it is a super relevant storytelling product. So we are very excited, and that is why we are investing in this area since it is a very strong entertainment area.
Thank you. And now we'll take our next question from Victor Hoglund from EAB. Please go ahead. Your line is now open.
Yes. Thank you. Victor Vergier on SVB. So I just most questions have been taken here, but I just wanted to the event schedule looks very promising for the second half. But could you maybe just elaborate here if you see that you have lost any larger events and or gained any larger events apart from the quantity in number of events, if you could sort of elaborate a bit on significance of the events, if you see that going up or down for you?
And then secondly, just a follow-up on the previous question on FX for next year. Could you just say what you've said? What is the change now compared to what you said before? Maria, you see your name there about 0 impact next year in the middle of the year. What was the previous comments on that?
Yes, I think I stopped there. Thank you.
Yes. When it comes to the Esports events, as I also said in my comments that we as one example, we are launching a new event with Intech, a Grand Slam event where you have the $1,000,000 prize money. What we are doing as well with DreamHack, as you also can see the history of DreamHack is, of course, to launch many more events with DreamHack in many more cities with DreamHack as well. And the same, of course, goes with DSL, which have launched in, as you know, Manila last year as well. We had the event we had in Auckland and so forth.
So it is we are the ambition is, of course, to launch more mega events, to launch for DreamHack more festivals and then, of course, to create more and more local leagues as well. And that is why we are entering into partnership in a range of countries with the local communities in order to be able to launch more and more local leagues as well. And then, of course, you will see as well that many more e sport area, I think. So many more products, not necessarily the traditional ones that we know already, will start to go into e sport. And that is, of course, what we're looking at as well.
So you should expect more events and more investment in events as well going forward.
Yes. And to take your currency question, I mean, it is a moving target. I believe when we had the Q1 results that the dollar was around NOK 9, which meant I think that the outlook for 2017 is unchanged NOK 75,000,000. But I think at that point in time we had roughly an incremental NOK 75,000,000 also in 2018, which based on the current FX rate and the hedges we've done, it's currently no incremental costs expected for 2018 versus 2017.
Okay, great. But Jorgen, back to your answer there. So to put it very, do you see that the events you have now as a whole, are they better or less good or about the same? Or how should we see that on a like for like basis, so to say?
Yes. I think what we do now as well when you talk about the quality of the event is, of course, that you measure as well the NPS score of the events. And there you have seen a massive increase in the quality. So what we do every time is, of course, if you ask the audiences how they feel about the events and different criterias, the ones who buy a daypart, the ones who buy the weekend and so forth. And there you have seen a steep increase in the NPS score.
The quality event of the event will increase, of course, because the events are very relevant and the right teams will play our events. And that, of course, gives us comfort that we can do more events. I think, yes, I'm very excited about the DreamHack development as well where we are investing a lot because they used to be in June shipping or whatever. Now I think in 'sixteen, they were in LifeSig, they were in Austin, they were in Valencia, they were in Montreal, Bucharest. And now what you see as well is they go to Denver in Q4 2017.
So that is a new event for them as an example. So the quality of the event should be there. And we would, of course, like more, more events to be handled by us or it is our tournaments and our shows. So that is, of course, a focus area we have as well that we are together with the different partners, we are the publisher of the events as well. So it is the quality should increase, and we see that as well looking at the ESL brand.
It is super strong compared with Nike, compared with whatever. I think it was it came about Formula 1 in terms of sports brands last year when you make made the research. So that, of course, gives us the comfort to invest more and more into these shows and to make sure that they stay relevant. And that is what we have discussed all the time, that we need to continue to have these relevant tournaments. So we do believe in increased quality, more participants and, of course, more partners for our events.
Okay. Great. And if I may just add one more question on the share of commercial viewing. In that number, is that including partnerships and other things you do to sort of increase your inventory and so on? Or is this number just based on your own channels, let's say?
Yes. No, I think there are 2 things. 1st of all, the figures you read in the report is only our channels. But obviously, what we are doing, as you know, is that we the ambition is to create a very big reach product. And that is why we have teamed up with Fox and Viacom and others to make sure that we have much more to sell, much more inventory to sell and that we can reach more people faster.
So that is, of course, the ambition.
So basically, the trend that well, what you can sell is better really than the trend in, for example, Sweden?
Yes. No, that goes that the more we can add in terms of partnerships, again, as Fox or Wirecom, whatever, the more we can sell, that goes without saying.
Saying. And now we will take a follow-up question from Rasmus Engebrecht from SHB.
Just wanted to ask you about InnoGames, given that it's a new creature for us. What is the seasonality there? Is it like is the second half equal to the first half? And if so, how tilted is it to the 4th quarter?
I would say that in respect seasonality, you have the Q4 quarter, which is by far the least strong quarter. And then the rest of the quarter, you always have peak when you are marketing events and then you see peak otherwise in for the full year, Q4 is the strongest
quarter. And is it Q1, Q2, Q3, are they sort of kind of the same more or less?
Yes. I would say that Q3 is probably the weakest of the 3, but it's Q4 is the standout.
All right. Thank you.
Thank you. And we'll take another follow-up question from Edgien Dessan Hoehr from Morgan Stanley. Please go ahead. Your line is now open.
Yes. Thank you very much. Very quickly, you indicate higher sales and profits for Nordic in 2017. Just wondering if you could tell us what it should look like for second half of twenty seventeen?
If you look at the second half for the Nordic, I mean, of course, sales is going to be much tougher comps, so you should not expect the same high sales growth. And in Q3, of course, last year, you had the Olympics. So the costing is also different in the comps. But for the full year, I mean, that's what we focused on. The aim is to drive profitable growth.
Okay. Sorry. Sorry, Maria, just to confirm, you said the same level of high sales growth in the second half?
No, you should not expect that because you have much tougher comps here. Sorry for nothing here.
Okay. Thanks, Maria.
Thank you. And that concludes the question and answer session. I will now hand the call back to Jorgen Mattson for his concluding remarks.
Thank you all for your time today. We will announce our Q3 results on October 21 and hope to see many of you as possible before then. Thank you for your time today and your interest in our story. We look forward to keeping you up to date with our further progress. But goodbye for now, and have a great summer.