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Rovio Entertainment Corporation Stock Exchange Published October 28, 2022 9:00AM EST
Show strength in live competition
Highlights from July to September 2022
- Rovio Group revenue rose 8.4 percent to €77.4 million (71.4).in a comparable
- On this basis, revenue fell 4.6%.
- Group Adjusted EBITDA fell to EUR 15.6 million (17.2) and the adjusted EBITDA margin fell to 20.2% (24.1).
- The Group’s adjusted operating profit fell to 12.1 million euros (14.3) and the adjusted operating profit margin fell to 15.6% (20.0).
- Total game bookings increased by 6.2% to EUR 70.8 million (66.7).comparable
- Total bookings fell 7.2%.
- Gross bookings for Rovio’s second-largest game, Angry Birds Dream Blast, rose 17.5% year-on-year to €17.6 million. Dream Blast’s run rate has grown steadily throughout the quarter, approaching €20 million per quarter, the best level since its launch in 2019.
- Gross bookings for Rovio’s biggest game, Angry Birds 2, were 28.7 million euros, up 7.8 percent year-on-year.
- User acquisition investment was €21.3 million (18.1), or 28.7% (26.4%) of game revenue.
- Operating cash flow was EUR 8.6 million (16.7).
Earnings per share were EUR 0.10 (0.16).
- Outlook 2022 has been updated.
- Highlights from January to September 2022
- Rovio Group revenue rose 16.1% to 240.8 million euros (207.3).comparable
- Revenue rose 2.1%.
- Group Adjusted EBITDA rose to EUR 44.3 million (38.2), with an adjusted EBITDA margin of 18.4% (18.4).
- The Group’s adjusted operating profit increased to 33.3 million euros (30.5), while the adjusted operating profit margin fell to 13.8 percent (14.7).
- Total game bookings increased by 13.5% to EUR 224.1 million (197.5).comparable
Total bookings fell 1.0%.
User acquisition investment increased to €73.2 million (56.6), representing 31.5% (28.3) of game revenue.
| Operating cash flow was EUR 37.9 million (26.7). | Earnings per share were EUR 0.30 (0.32). | *) Comparable growth in constant USD/EUR, including September only for Ruby Games. | key figure | 7–9/ | 7–9/ | Change, | |
| 1–9/ | 1–9/ | Change, | 1-12/ | million euros | 2022 | 2021 | % |
| 2022 | 2021 | % | 2021 | income | 77.4 | 71.4 | 8.4% |
| 240.8 | 207.3 | 16.1% | 286.2 | EBITDA | 12.2 | 16.9 | -28.1% |
| 37.6 | 37.4 | 0.5% | 50.8 | EBITDA margin | 15.7% | 23.7% | |
| 15.6% | 18.0% | 17.7% | Adjusted EBITDA | 15.7 | 17.2 | -9.0% | |
| 44.3 | 38.2 | 16.0% | 54.8 | Adjusted EBITDA margin, % | 20.2% | 24.1% | |
| 18.4% | 18.4% | 19.1% | operating profit | 8.6 | 14.0 | -38.8% | |
| 26.6 | 29.7 | -10.5% | 37.7 | Operating profit margin, % | 11.1% | 19.6% | |
| 11.0% | 14.3% | 13.2% | Adjusted operating profit | 12.1 | 14.3 | -15.6% | |
| 33.3 | 30.5 | 9.1% | 43.7 | Adjusted operating margin, % | 15.6% | 20.0% | |
| 13.8% | 14.7% | 15.3% | profit before tax | 10.2 | 14.6 | -30.0% | |
| 30.4 | 31.1 | -2.3% | 40.3 | Capital expenditures | 1.3 | 0.9 | 41.6% |
| 4.6 | 2.7 | 69.7% | 4.0 | user acquisition | 21.3 | 18.1 | 17.7% |
| 73.2 | 56.6 | 29.3% | 77.2 | Return on Equity (ROE), % | 19.0% | 19.2% | |
| 19.0% | 19.2% | 22.2% | Net debt ratio, % | -81.3% | -72.6% | ||
| -81.3% | -72.6% | -77.4% | Equity ratio, % | 72.3% | 73.5% | ||
| 72.3% | 73.5% | 70.8% | Earnings per share, EUR | 0.10 | 0.16 | -35.3% | |
| 0.30 | 0.32 | -6.0% | 0.41 | Earnings per share, diluted in euros | 0.10 | 0.16 | -35.8% |
| 0.30 | 0.32 | -6.6% | 0.41 | Net cash flow from operating activities | 8.6 | 16.7 | -48.6% |
| 37.9 | 26.7 | 41.8% | 44.0 | Employees (period average) | 522 | 490 | 6.6% |
506
486
4.3%
490
Unless otherwise stated, comparative data in parentheses refer to the same period last year. Calculations and definitions are provided in the Performance Measurement section.
Changes in comparable currencies are derived by converting the data from the reporting period to the average USD/EUR exchange rate for US in-app purchases and global ad network sales in US dollars during the comparison period.
Alex Pelletier-Nomand, CEO
I am pleased to see that we continue to perform well in a challenging market in the third quarter. Our reported revenue was up 8.4% and our comparable revenue was down 4.6%, with the U.S. market down more than 15% year over year over the period. The performance of our live games, especially the integration of Angry Birds Dream Blast, Ruby Games, and favorable effects support these results.
The same market headwinds as in the previous quarter continued. Interestingly, however, the U.S. declined only 1% sequentially in the third quarter, a positive development after five consecutive quarters of declines. We still believe that the long-term growth opportunities in the mobile gaming market look attractive.
We have used the past few months to launch meaningful initiatives aimed at strengthening our position for further growth as the market recovers.
Angry Birds Dream Blast leads the way
One of these initiatives is a stronger focus on our live gaming portfolio. We’ve added depth to the resource allocation and live operations of live games, and we can already see the benefits of these actions. For example, our second-largest game, Angry Birds Dream Blast, saw double-digit growth both year-over-year and quarter-over-quarter. This is an amazing achievement for the team, who have worked tirelessly to improve the quality and market value of the game since its release. By the end of September, the game’s run rate had grown to around 20 million euros per quarter.
Angry Birds 2 continued to perform well, growing both sequentially and year-over-year, driven by good field operations and solid UA performance. We have exciting new content coming later this year. For example, for the first time since the release of the second Angry Birds movie in 2019, we plan to introduce a new bird to the game.
Angry Birds Friends declined slightly from the previous quarter. The game is affected by an issue with our partner Meta, causing some players to temporarily lose access to their progress. This resulted in a brief gap in income. After fixing the issue, we saw the game’s DAU and revenue run rate recover.
Two new studios to support growth
To support the development of our top live games, we will open a new studio in Barcelona, ​​Spain. This move will expand our talent pool, especially in live operations and level design – an activity that is widely outsourced today. Recruitment is underway, and our goal is to hire 15 developers over the next 12 months who will support our Puzzle studio in Espoo.
In another exciting news, in Montreal, a group of industry veterans decided to unite to leave their former employers and join Rovio. They focus on very fast prototyping and market testing, aiming to make hybrid casual games. They’re called “Studio 6” internally, and we’re excited to have them on board.
A healthy pipeline of new titles
We’re also making good progress on new game development. Moomin: Puzzle & Design is in development as planned and will enter the next soft launch test at the beginning of the year. Our Puzzle Studio is also working on a new match 3 game based on Small Town Murders. The game looks promising and will have its first go-to-market and early retention tests in December. At the Montreal studio, we refocused the team on expanding Angry Birds beyond mobile with multiplayer cross-platform play for Gen Z. As of November 7, the studio will be led by Andréane Meunier, a console game veteran with over a decade of experience at Ubisoft. New games from Ruby Games, Toronto and Copenhagen are also well underway. Overall, our workflow is healthy, with 10 new games in development in our studio.
In brand news, Angry Birds Season 3 Summer Madness launched on Netflix in August as part of our content strategy outside of the Angry Birds game. The success of Angry Birds animation was highlighted in a recent consumer study commissioned by Rovio, in which Angry Birds was the third most viewed series on Netflix among 12- to 16-year-olds in the US.
We’re excited to go into the final quarter of the year, which is usually the best season in the game. We started the quarter with momentum from our top games and a series of seasonal events to drive fan engagement across the portfolio.
With our two new studios, strong focus on live games showing results, and good progress with new titles, we believe Rovio is well-positioned to capture growth opportunities in 2023 and beyond. I’m excited to continue leading these efforts, and I’m proud of Rovians’ resourcefulness in continually finding opportunities for growth.
2022 Update Outlook
We expect reported revenue to be significantly higher and comparable foreign exchange revenue to be slightly higher year-over-year. Adjusted operating profit is expected to decline year-over-year, depending on the pace of growth and user acquisition investments to drive growth, especially in the case of new games, and our greater investment in new game development.
More on User Acquisition Investments in Q4 2022
User acquisition investment in Q4 2022 is expected to account for 28-33% of game revenue. Outlook to 2022 Based on the positive momentum of our top live games, the launch of Angry Birds Journey in January and the full benefits of the acquisition of Ruby Games from the beginning of the year, we expect strong revenue growth this year. Adjusted operating profit is expected to decline year-over-year, depending on the pace of growth and user acquisition investments to drive growth, especially in the case of new games, and our greater investment in new game development.
Audio broadcasts and conference calls
Rovio will host an English-language audio broadcast and conference call, including a question-and-answer session, on third-quarter 2022 financial results for analysts, media and institutional investors on October 28, 2022, from 14:00-15:00 EST. The audio broadcast can be viewed live at:
https://investors.rovio.com/en
And as a recording later in the day.
Conference Call Details:
https://call.vsy.io/access-8620 More information:
Alex Pelletier-Nomand, CEO, tel. +358 40 485 8985 (media call)
René Lindell, Chief Financial Officer, tel. +358 40 485 8985 (media call)
Distribution: Nasdaq Helsinki, Major Media,
About Rovio Rovio Entertainment Corporation is a global mobile-first gaming company that creates, develops and publishes mobile games with more than 5 billion downloads. Rovio is best known as the global Angry Birds brand, which started out as a popular mobile game in 2009 and has evolved from gaming to a variety of entertainment, animation and consumer products licensed by the brand. Rovio produced The Angry Birds Movie (2016) and its sequel, The Angry Birds Movie 2, was released in 2019. The company offers a variety of mobile games and has nine game studios – two in Espoo (Finland), one in Stockholm (Sweden), one in Copenhagen (Denmark), one in Barcelona (Spain) and two in Montreal , one in Toronto (Canada). The studios also include a subsidiary in Izmir (Turkey) called Ruby Games, which was acquired in 2021. Most of the employees are based in Finland, where Rovio is headquartered. The company’s shares are listed on the main board of the Nasdaq Helsinki Stock Exchange under the symbol ROVIO. Rovio Q3-2022_interim report
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