Producti on Da te: 21 September 2022, h. 6:30 pm Publ i ca ti on Da te: 22 September 2022, h.

7:00 a m

MONDO TV Italy Euronext Star Milan Media & Entertainment

Rating: BUY (unch.) Target Price: € 2,95 (prev € 3,10) Update Risk: Medium

Stock performance 1M 3M 6M 1Y Stocks performance vs FTSE Italia Growth

absolute -12,91% -22,56% -49,30% -56,97%
to FTSE Italia Growth -8,74% -20,46% -37,45% -38,80%
to Euronext STAR Milan -3,12% -15,92% -27,12% -24,85%
to FTSE All-Share -11,57% -21,65% -39,31% -41,48%
to EUROSTOXX -8,37% -22,50% -39,26% -41,11%
to MSCI World Index -6,26% -22,98% -34,15% -40,05%

Stock Data
Price € 0,58
Target price € 2,95
Upside/(Downside) potential 408,3% 1H22A Results
Bloomberg Code MTV IM EQUITY Revenues amounted to € 16.67 million, an increase of 13.2% compared to the half-

Market Cap (€m) € 27,98 yearly results of the previous year (€ 14.73 million). EBITDA recorded a value of €
12.56 million, 4.2% up compared to 1H21A, when the item amounted to € 12.05
EV (€m) € 36,49
million. As can be seen from the lower growth in EBITDA compared to revenues, EBITDA
Free Float 70,15%
margin stood at 75.3%, down compared to 81.8% in the first six months of the previous
Share Outstanding 48.240.182
fiscal year. EBIT on 30 June 2022 amounted to € 4.23 million (€ 4.17 million in 1H21A)
52-week high € 1,45
after amortization and depreciation of € 8.33 million. Net income amounted to € 4.27
52-week low € 0,57 million, 35.1% up compared to the same half-year of the previous period. Finally, the
Average Daily Volumes (3m) 167.700 NFP worsened from € 8.51 million in 1H21A to € 12.54 million in 1H22A.

Key Financials (€m ) FY21A FY22E FY23E FY24E Estimates Update

Revenues 29,2 36,0 38,0 40,0 In light of the results published in the half-yearly report for 1H22A, we confirm almost

VoP 35,6 41,5 44,0 46,0 entirely our estimates for both the current year and the coming years. In particular, we
EBITDA 24,4 29,2 33,1 35,3
estimate 2022E revenues of € 36.00 million and EBITDA of € 29.20 million,
EBIT 6,7 7,7 14,1 17,3
corresponding to a marginality of 70.4%. For subsequent years, we expect the revenues
Net Profit 5,4 6,6 10,0 12,1
to increase up to € 40.00 million (CAGR 21A-24E: 11.0%) in 2024E, with EBITDA of €
EBITDA margin 68,5% 70,4% 75,1% 76,6%
EBIT margin 18,9% 18,6% 31,9% 37,5% 35.30 million (corresponding to an EBITDA margin of 76.6%), up from € 24.36 million

Net Profit margin 15,3% 15,9% 22,6% 26,2% in 2021A (corresponding to an EBITDA margin of 68.5%).

Main Ratios FY21A FY22E FY23E FY24E Valuation Update

EV/EBITDA (x) 1,5 1,2 1,1 1,0 We have conducted the valuation of Mondo Tv’s equity value based on the DCF

EV/EBIT (x) 5,4 4,7 2,6 2,1 methodology and market multiples of a comparable companies sample. The DCF

P/E (x) 5,2 4,2 2,8 2,3 method (which in the calculation of the WACC includes for prudential purposes also a
specific risk of 2.5%) provides an equity value of € 147.3 million. The equity value of
Mondo Tv using market multiples is equal to € 137.1 million (including a discount of
Mattia Petracca mattia.petracca@integraesim.it 25%). The result is an average equity value of approx. € 142.2 million. The target price
Alessandro Colombo alessandro.colombo@integraesim.it is € 2.95, rating BUY and MEDIUM risk.
 1. Economics & Financials
Table 1 – Economics & Financials

CONSOLIDATED INCOME STATEMENT (€/mln) FY20A FY21A FY22E FY23E FY24E

Revenues 24,70 29,22 36,00 38,00 40,00
Work in Progress 5,02 4,33 4,50 5,00 5,00
Other Revenues 0,64 2,02 1,00 1,00 1,00
Value of Production 30,36 35,56 41,50 44,00 46,00
COGS 0,06 0,04 0,05 0,05 0,05
Employees 4,86 5,02 5,25 5,00 4,90
Other Operating Expenses 6,64 6,14 7,00 5,90 5,80
EBITDA 18,81 24,36 29,20 33,05 35,25
EBITDA Margin 62,0% 68,5% 70,4% 75,1% 76,6%
D&A 10,49 17,64 21,50 19,00 18,00
EBIT 8,32 6,73 7,70 14,05 17,25
EBIT Margin 27,4% 18,9% 18,6% 31,9% 37,5%
Financial Management (2,35) 0,98 2,00 0,50 0,50
EBT 5,97 7,71 9,70 14,55 17,75
Taxes 2,04 2,28 3,10 4,60 5,70
Net Income 3,93 5,43 6,60 9,95 12,05
Minorities (0,44) (0,05) (0,05) (0,10) (0,15)
Consolidated Net Income 4,37 5,48 6,65 10,05 12,20

CONSOLIDATED BALANCE SHEET (€/mln) FY20A FY21A FY22E FY23E FY24E

Fixed Assets 59,09 73,45 88,00 85,00 83,00
Account receivable 30,69 25,39 25,00 26,80 28,00
Account payable 14,69 6,75 8,10 8,50 9,00
Operating Working Capital 16,01 18,64 16,90 18,30 19,00
Other receivable 2,79 0,95 1,10 1,15 1,20
Other payable 3,74 2,85 3,40 3,50 3,60
Net Working Capital 15,06 16,74 14,60 15,95 16,60
Severance Indemnities & Other Provisions 0,75 0,60 0,60 0,60 0,60
NET INVESTED CAPITAL 73,40 89,59 102,00 100,35 99,00
Share Capital 19,96 22,57 24,50 24,50 24,50
Reserves 44,32 52,49 57,97 64,62 74,67
Net Income 4,37 5,48 6,65 10,05 12,20
Equity 68,64 80,54 89,12 99,17 111,37
Minorities Equity 0,70 0,54 0,59 0,69 0,84
Cash & Cash Equivalent 9,91 6,09 4,21 13,51 25,21
M/L Term Debt to Bank 8,79 7,71 8,00 7,00 6,00
Short Term Debt to Bank 5,17 6,89 8,50 7,00 6,00
Net Financial Position 4,06 8,51 12,29 0,49 (13,21)
SOURCES 73,40 89,59 102,00 100,35 99,00

CONSOLIDATED CASH FLOW (€/mln) FY21A FY22E FY23E FY24E

EBIT 6,73 7,70 14,05 17,25
Taxes 2,28 3,10 4,60 5,70
NOPAT 4,45 4,60 9,45 11,55
D&A 17,64 21,50 19,00 18,00
Change in receivable 5,31 0,39 (1,80) (1,20)
Change in payable -7,93 1,35 0,40 0,50
Change in others 0,95 0,41 0,05 0,05
Change in NWC -1,68 2,14 -1,35 -0,65
Change in provisions -0,15 0,00 0,00 0,00
OPERATING CASH FLOW 20,26 28,24 27,10 28,90
Capex (32,00) (36,1) (16,0) (16,0)
FREE CASH FLOW (11,74) (7,81) 11,10 12,90
Financial Management 0,98 2,00 0,50 0,50
Change in Debt to Bank 0,64 1,90 (2,50) (2,00)
Change in Equity 6,31 2,03 0,20 0,30
FREE CASH FLOW TO EQUITY (3,82) (1,88) 9,30 11,70
Source: Mondo TV and Integrae SIM estimates

UPDATE 2
 1.1 1H22A Results

Table 2 - 1H22A vs 1H21A

€/mln Revenues EBITDA EBITDA % EBIT Net Income NFP
1H22A 16,67 12,56 75,3% 4,23 4,27 12,54
1H21A 14,73 12,05 81,8% 4,17 3,16 8,51*
Change 13,2% 4,2% -7,9% 1,5% 35,1% N.A

Source: Integrae SIM

*NFP as of 31/12/2021

At the end of the first half of 2022, revenues amounted to € 16.67 million, an increase of
13.2% compared to the half-year results of the previous year (€ 14.73 million). This growth in
turnover was made possible thanks to the completion of the Disco Dragon animated series
by Mondo TV France, the growth in revenues of Mondo TV Studios, and the advancement of
the production of the parent company.
EBITDA recorded a value of € 12.56 million, 4.2% up compared to 1H21A when the item
amounted to € 12.05 million. As can be seen from the lower growth in EBITDA compared to
revenues, the EBITDA margin stood at 75.3%, down compared to 81.8% in the first six months
of the previous fiscal year. Responsible for this change are, on the one hand, the lower
capitalizations of animated series made internally (€ 1.68 million in 1H22A against € 2.55
million in 1H21A) that impact on the total value of production and, on the other, the increase
in production costs and purchase costs of rights on the series sold in relation to the greater
volume of trading of rights.
EBIT on 30 June 2022 amounted to € 4.23 million (€ 4.17 million in 1H21A) after amortization
and depreciation of € 8.33 million. The slight percentage growth, equal to 1.5%, is explained
by the increase in amortization resulting from investments made in the Group's library and
the delivery of the last episodes of the animated series Disco Dragon by the subsidiary Mondo
TV France. The increase in amortization, therefore, impacted the EBIT margin, which was
equal to 22.2%, down compared to 23.8% in the previous period.
Net profit amounted to € 4.27 million and recorded a growth of 35.1% compared to the same
year-half of the previous period (€ 3.16 million), thanks also to the increase in financial income
(€ 2.14 million on 30 June 2022 against € 1.15 million on 30 June 2021) and the reduction in
financial charges (from € 0.82 million to € 0.41 million), mainly deriving from the positive
trend in euro/dollar exchange rates.
Finally, the NFP worsened from € 8.51 million in 1H21A to € 12.54 million in 1H22A, due to
significant investments in the production of the new series.

Chart 1- Revenues Breakdown by geographical area 1H22A

9,5% 0,7%

12,6%

77,2%

Asia Europe Italy America

Source: Integrae SIM

UPDATE 3
 The main market of Mondo TV is Asia, which in the first half of 2022 accounted for 77.2% of
the Group's revenues. This is followed by the European market, the Italian market, and the
Americas market with respectively 12.6%, 9.5%, and 0.7% of turnover.

Chart 2 – Revenues Breakdown by geographical area 1H22A vs 1H21A

14,00 12,87

12,00
10,15
10,00

8,00

6,00
3,70
4,00
2,10
1,59
2,00 0,88
0,00 0,12
0,00
Asia Europe Italy America

1H21A 1H22A

Source: Integrae SIM

As previously indicated, revenues in the first half of 2022 are growing strongly compared to
1H21A. In particular, it can be noted that all markets register an increase in turnover, except
for the European market, which goes from € 3.70 million in 1H21A to € 2.10 million in 1H22A.
In particular, Italy grew by € 0.71 million, Asia by € 2.72 million, and the Americas market was
added, generating € 0.12 million in turnover.

UPDATE 4
 1.2 FY22A – FY24E Estimates

Table 3 – Estimates Updates FY22A-24E

€/mln FY22E FY23E FY24E
Revenues
New 36,0 38,0 40,0
Old 36,0 38,0 40,0
Change 0,0% 0,0% 0,0%
EBITDA
New 29,2 33,1 35,3
Old 30,2 33,1 35,3
Change -3,3% 0,0% 0,0%
EBITDA %
New 70,4% 75,1% 76,6%
Old 72,8% 75,1% 76,6%
Change -2,4% 0,0% 0,0%
EBIT
New 7,7 14,1 17,3
Old 9,7 14,1 17,3
Change -20,6% 0,0% 0,0%
Net Income
New 6,6 10,0 12,1
Old 6,7 10,0 12,1
Change -1,5% 0,0% 0,0%
NFP
New 12,3 0,5 (13,2)
Old 13,3 2,8 (9,1)
Change N/A N/A N/A

Source: Integrae SIM

In light of the results published in the half-yearly report for 1H22A, we confirm almost entirely
our estimates for both the current year and the coming years.

In particular, we estimate 2022E revenues of € 36.00 million and EBITDA of € 29.20 million,
corresponding to a marginality of 70.4%. For subsequent years, we expect the revenues to
increase up to € 40.00 million (CAGR 21A-24E: 11.0%) in 2024E, with EBITDA of € 35.30 million
(corresponding to an EBITDA margin of 76.6%), up from € 24.36 million in 2021A
(corresponding to an EBITDA margin of 68.5%).

As for the estimated investments, we expect Capex for 2022E equal to approximately
€ 36.05 million, which will be supported by the Group in order to conclude the pipeline
production cycle.

Finally, we estimate an NFP for 2024E cash positive and equal to € 13.21 million, mainly thanks
to the positive cash flows generated by the return on investments made in previous years.

UPDATE 5
 Chart 3 – VoP and EBITDA FY21A-24E

50,00
45,00
40,00
35,00
30,00
25,00
20,00
15,00
10,00
5,00
0,00
FY21A FY22E FY23E FY24E

Value of Production EBITDA

Source: Integrae SIM

Chart 4 – Margin FY21A-24E

90,0%
75,1% 76,6%
75,0% 68,5% 70,4%

60,0%

45,0%

30,0% 37,5%

31,9%
15,0%
18,9% 18,6%

0,0%
FY21A FY22E FY23E FY24E

EBITDA margin EBIT margin

Source: Integrae SIM

UPDATE 6
 Chart 5 – Capex FY21A-24E

45,00
40,00
40,00 38,00
36,00 36,05
35,00 32,00
29,22
30,00
25,00
20,00
16,00 16,00
15,00
10,00
5,00
0,00
FY21A FY22E FY23E FY24E

Revenues Capex

Source: Integrae SIM

Chart 6 – NFP FY21A-24E

15,00
12,29

10,00 8,51

5,00
0,49
0,00
FY21A FY22E FY23E FY24E

-5,00

-10,00
-13,21

-15,00

Source: Integrae SIM

UPDATE 7
 2. Valuation

We have conducted the valuation of Mondo TV’s equity value based on the DCF methodology
and market multiples of a comparable companies sample.

2.1 DCF Method

Table 4 – WACC
WACC 9,79%
Risk Free Rate 2,18% α (specific risk) 2,50%
Market Premium 9,08% Beta Adjusted 0,7
D/E (average) 11,11% Beta Relevered 0,7
Ke 10,72% Kd 2,00%
Source: Integrae SIM

For prudential purposes, we have included a specific risk of 2.5%. This results in a WACC of
9.79%.

Table 5 – DCF Valuation

DCF Equity Value 147,3
FCFO actualized 26,3 17%
TV actualized DCF 129,5 83%
Enterprise Value 155,9 100%
NFP (FY21A) 8,5
Source: Integrae SIM

With the above data and taking as a reference our estimates and assumptions, the result is
an equity value of € 147.3 million.

Table 6 – Equity Value – Sensitivity Analysis

€/mln WACC
147 8,3% 8,8% 9,3% 9,8% 10,3% 10,8% 11,3%
2,5% 224,4 204,9 188,3 174,0 161,5 150,5 140,8
2,0% 208,1 191,2 176,7 164,0 152,8 142,9 134,1
Growth 1,5% 194,2 179,4 166,5 155,1 145,1 136,2 128,1
Rate (g) 1,0% 182,2 169,1 157,5 147,3 138,2 130,1 122,7
0,5% 171,7 160,0 149,6 140,4 132,1 124,6 117,8
0,0% 162,5 151,9 142,5 134,1 126,5 119,6 113,3
-0,5% 154,3 144,7 136,2 128,5 121,5 115,1 109,2
Source: Integrae SIM

UPDATE 8
 2.2 Market multiples
Our panel is made up of companies operating in the same sector as Mondo TV. These
companies are the same ones used for the calculation of Beta for the DCF method. The Panel
is composed of:

Table 7 – Market Multiples

EV/EBIT (x) P/E (x)
Company Name
FY22E FY23E FY24E FY22E FY23E FY24E
Toei Animation Co., Ltd. 24,3 24,3 23,2 38,0 36,5 34,8
Xilam Animation SA 20,4 14,8 14,2 23,9 16,1 15,4
Technicolor SA 13,5 10,4 9,6 37,3 11,2 8,6
Toho Company Limited 17,7 16,1 14,9 24,7 23,7 22,0
TV Asahi Holdings Corp. 3,6 3,4 3,3 8,4 7,8 7,7
Peer median 17,7 14,8 14,2 24,7 16,1 15,4
Source: Infinancials

Table 8 – Market Multiples Valuation

€/mln FY22E FY23E FY24E
Enterprise Value (EV)
EV/EBIT 135,9 207,4 244,3
P/E 163,2 160,5 185,3
Equity Value
EV/EBIT 123,6 206,9 257,5
P/E 163,2 160,5 185,3
Equity Value post discount
EV/EBIT 92,7 155,2 193,1
P/E 122,4 120,4 139,0
Average 107,6 137,8 166,0
Source: Integrae SIM

The equity value of Mondo TV, using the market multiples EV/EBIT and P/E is equal to
€ 182.8 million. To this value, we have applied a 25% discount. Therefore, the result is an
equity value of € 137.1 million.

UPDATE 9
 2.3 Equity Value

Table 9 – Equity Value

Equity Value (€/mln) 142,2
Equity Value DCF (€/mln) 147,3
Equity Value multiples (€/mln) 137,1

Target Price (€) 2,95

Source: Integrae SIM

The result is an average equity value of € 142.2 million. The target price is, therefore, € 2.95
(prev. €3.10). We confirm BUY rating and MEDIUM risk.

Table 10 – Target Price Implied Valuation Multiples

Multiples FY21A FY22E FY23E FY24E
EV/EBIT 22,4x 19,6x 10,7x 8,7x
P/E 26,2x 21,6x 14,3x 11,8x
Source: Integrae SIM

Table 11 – Current Price Implied Valuation Multiples

Multiples FY21A FY22E FY23E FY24E
EV/EBIT 5,4x 4,7x 2,6x 2,1x
P/E 5,2x 4,2x 2,8x 2,3x
Source: Integrae SIM

UPDATE 10
Disclosure Pursuant to Delegated Regulation UE n. 2016/958

Analyst/s certification
The analyst(s) which has/have produced the following analyses hereby certifies/certify that the opinions expressed herein
reflect their own opinions, and that no direct and/or indirect remuneration has been, nor shall be received by the analyst(s)
as a result of the above opinions or shall be correlated to the success of investment banking operations. Neither the analysts
nor any of their relatives hold administration, management or advising roles for the Issuer. Mattia Petracca is Integrae SIM’s
current Head of Research. Giuseppe Riviello, Alessandro Colombo and Edoardo Luigi Pezzella are the current financial
analysts.

Disclaimer
This publication was produced by INTEGRAE SIM SpA. INTEGRAE SIM SpA is licensed to provide investment services
pursuant to Italian Legislative Decree n. 58/1998, released by Consob, with Resolution n. 17725 of March 29th 2011.
INTEGRAE SIM SpA performs the role of corporate broker for the financial instruments issued by the company covered in
this report.
INTEGRAE SIM SpA is distributing this report in Italian and in English, starting from the date indicated on the document,
to approximately 300 qualified institutional investors by post and/or via electronic media, and to non-qualified investors
through the Borsa Italiana website and through the leading press agencies.
Unless otherwise indicated, the prices of the financial instruments shown in this report are the prices referring to the day
prior to publication of the report. INTEGRAE SIM SpA will continue to cover this share on a continuing basis, according to
a schedule which depends on the circumstances considered important (corporate events, changes in recommendations, etc.),
or useful to its role as specialist.
The table below, shows INTEGRAE SIM’s recommendation, target price and risk issued during the last 12 months:

Date Price Recommendation Target Price Risk Comment

13/04/2022 1,01 Buy 3,10 Medium Initiation of Coverage
14/06/2022 0,75 Buy 3,10 Medium Flash Note
06/09/2022 0,60 Buy 3,10 Medium Flash Note
16/09/2022 0,58 Buy 3,10 Medium Flash Note

The list of all recommendations on any financial instrument or issuer produced by Integrae SIM Research Department and
distributed during the preceding 12-month period is available on the Integrae SIM website.
The information and opinions contained herein are based on sources considered reliable. INTEGRAE SIM SpA also declares
that it takes all reasonable steps to ensure the correctness of the sources considered reliable; however, INTEGRAE SIM SpA
shall not be directly and/or indirectly held liable for the correctness or completeness of said sources.
The most commonly used sources are the periodic publications of the company (financial statements and consolidated
financial statements, interim and quarterly reports, press releases and periodic presentations). INTEGRAE SIM SpA also
makes use of instruments provided by several service companies (Bloomberg, Reuters, JCF), daily newspapers and press in
general, both national and international. INTEGRAE SIM SpA generally submits a draft of the analysis to the Investor Relator
Department of the company being analyzed, exclusively for the purpose of verifying the correctness of the information
contained therein, not the correctness of the assessment. INTEGRAE SIM SpA has adopted internal procedures able to assure
the independence of its financial analysts and that establish appropriate rules of conduct for them. Integrae SIM S.p.A. has
formalized a set of principles and procedures for dealing with conflicts of interest. The Conflicts Management Policy is clearly
explained in the relevant section of Integrae SIM’s web site (www.integraesim.it). This document is provided for information
purposes only. Therefore, it does not constitute a contractual proposal, offer and/or solicitation to purchase and/or sell
financial instruments or, in general, solicitation of investment, nor does it constitute advice regarding financial instruments.
INTEGRAE SIM SpA does not provide any guarantee that any of the forecasts and/or estimates contained herein will be
reached. The information and/or opinions contained herein may change without any consequent obligation of INTEGRAE
SIM SpA to communicate such changes. Therefore, neither INTEGRAE SIM SpA, nor its directors, employees or contractors,

UPDATE 11
may be held liable (due to negligence or other causes) for damages deriving from the use of this document or the contents
thereof. Thus, Integrae SIM does not guarantee any specific result as regards the information contained in the present
publication, and accepts no responsibility or liability for the outcome of the transactions recommended therein or for the
results produced by such transactions. Each and every investment/divestiture decision is the sole responsibility of the party
receiving the advice and recommendations, who is free to decide whether or not to implement them. Therefore, Integrae
SIM and/or the author of the present publication cannot in any way be held liable for any losses, damage or lower earnings
that the party using the publication might suffer following execution of transactions on the basis of the information and/or
recommendations contained therein.
This document is intended for distribution only to professional clients and qualified counterparties as defined in Consob
Regulation no. 16190 of 29.10.2007, as subsequently amended and supplemented, either as a printed document and/or in
electronic form.

Rating system (long term horizon: 12 months)

The BUY, HOLD and SELL ratings are based on the expected total return (ETR – absolute performance in the 12 months
following the publication of the analysis, including the ordinary dividend paid by the company), and the risk associated to
the share analyzed. The degree of risk is based on the liquidity and volatility of the share, and on the rating provided by the
analyst and contained in the report. Due to daily fluctuations in share prices, the expected total return may temporarily fall
outside the proposed range

Equity Total Return (ETR) for different risk categories

Rating Low Risk Medium Risk High Risk
BUY ETR >= 7.5% ETR >= 10% ETR >= 15%
HOLD -5% < ETR < 7.5% -5% < ETR < 10% 0% < ETR < 15%
SELL ETR <= -5% ETR <= -5% ETR <= 0%

U.R. Rating e/o target price Under Review

N.R. Stock Not Rated

Valuation methodologies (long term horizon: 12 months)

The methods that INTEGRAE SIM SpA prefers to use for value the company under analysis are those which are generally
used, such as the market multiples method which compares average multiples (P/E, EV/EBITDA, and other) of similar shares
and/or sectors, and the traditional financial methods (RIM, DCF, DDM, EVA etc). For financial securities (banks and
insurance companies) Integrae SIM SpA tends to use methods based on comparison of the ROE and the cost of capital
(embedded value for insurance companies).
The estimates and opinions expressed in the publication may be subject to change without notice. Any copying and/or
redistribution, in full or in part, directly or directly, of this document are prohibited, unless expressly authorized.

Conflict of interest
In order to disclose its possible conflict of interest Integrae SIM states that:
• It plays, or has played in the last 12 months, role of specialist financial instruments issued by Mondo TV SpA;

UPDATE 12