Rovio Entertainment Corp.: 2022 First Half Financial Report:


Rovio Entertainment Corporation Stock Exchange Release August 11, 2022 at 9am EEST

Robio Entertainment: 2022 first half financial report: Strong results in a market that faced headwinds in the second quarter

April-June 2022 Highlights

  • The Rovio Group’s revenue increased by 14.0% to €78.4m (68.8€). On a comparative basis, revenue (at constant exchange rates, excluding Ruby Games) decreased -1.1%.
  • Group Adjusted EBITDA increased to €15 million (8.7) and the Adjusted EBITDA margin increased to 19.1% (12.7).
  • Group adjusted operating profit was €11.3 million (6.2), with an adjusted operating margin of 14.3% (8.9).
  • Gross bookings for games increased by 8.8% to €72.4 million (€66.6). Comparable total bookings (at constant exchange rates, excluding Ruby Games) were down 6.5% for him.
  • Rovio’s biggest game, Angry Birds 2, had gross bookings of €28.4 million, up 6.9% year-on-year.
  • Angry Birds Friends grew 10.0% year-on-year, reaching €9.1 million in gross bookings.
  • Rovio’s latest game, Angry Birds Journey, launched on January 20, 2022, generated €7.3 million in gross bookings.
  • User acquisition investment was €20.9 million (21.3), representing 27.5% (32.0%) of the game’s revenue.
  • Operating cash flow was €15.3 million (€7.6).
  • Earnings per share were €0.13 (0.07).

January-June 2022 Highlights

  • The Rovio Group’s revenues increased by 20.2% to 163.4 million euros (135.9 euros). The comparable growth rate (at constant currency, excluding Ruby Games) was 5.3%.
  • Group Adjusted EBITDA increased to €28.6 million (21.0) and the Adjusted EBITDA margin increased to 17.5% (15.5).
  • Group adjusted operating profit was €21.2 million (16.2) and adjusted operating margin increased to 13.0% (12.0).
  • Gross bookings for games increased by 17.2% to €153.2 million (130.8 €). Total comparable bookings growth (at constant currency, excluding Ruby Games) was 1.9%.
  • Investment in user acquisition was €52 million (38.5), representing 32.9% (29.4%) of the game’s revenue.
  • Operating cash flow was €29.3 million (€10.1).
  • Earnings per share were €0.20 (0.17).

key figure

4–6/ 4–6/ Change, 1–6/ 1–6/ Change, 1–12/
million euros 2022 2021 % 2022 2021 % 2021
Earnings 78.4 68.8 14.0% 163.4 135.9 20.2% 286.2
EBITDA 14.3 8.7 63.7% 25.4 20.5 24.1% 50.8
EBITDA margin 18.2% 12.7% 15.5% 15.1% 17.7%
Adjusted EBITDA 15.0 8.7 72.2% 28.6 21.0 36.4% 54.8
Adjusted EBITDA Margin, % 19.1% 12.7% 17.5% 15.5% 19.1%
Operating income 10.5 6.2 70.7% 18.0 15.7 14.7% 37.7
Operating Margin, % 13.4% 8.9% 11.0% 11.5% 13.2%
Adjusted operating profit 11.3 6.2 82.8% 21.2 16.2 30.7% 43.7
Adjusted operating margin, % 14.3% 8.9% 13.0% 12.0% 15.3%
Pre-tax profit 12.5 6.1 106.4% 20.1 16.5 22.4% 40.3
capital investment 1.1 0.8 34.2% 3.2 1.8 84.4% 4.0
user acquisition 20.9 21.3 -1.9% 52.0 38.5 34.8% 77.2
Return on Equity (ROE), % 22.5% 18.5% 22.5% 18.5% 22.2%
Net gearing ratio, % -82.4% -72.5% -82.4% -72.5% -77.4%
Capital adequacy ratio,% 71.0% 84.9% 71.0% 84.9% 70.8%
Earnings per share, euro 0.13 0.07 94.3% 0.20 0.17 21.5% 0.41
Earnings per share, diluted euro 0.13 0.07 92.2% 0.20 0.17 20.8% 0.41
Net cash flow from operating activities 15.3 7.6 101.9% 29.3 10.1 191.2% 44.0
Number of employees (average during the period) 503 481 4.7% 499 484 4.4% 490

Comparative figures in brackets refer to the corresponding period of the previous year, unless otherwise stated. Calculations and definitions are given in the performance measurement section.

Changes in comparable currencies are calculated by translating the reporting period figures at the average USD/EUR exchange rate for the comparable periods. U.S. in-app purchases and global ad network sales are dominated by the U.S. dollar.

Alex Peltier-Normand, CEO
We are proud of our strong performance in the second quarter in a challenging environment. We are clearly outperforming the market and would like to thank all Rovians for their dedication and hard work during this period. Second quarter reported earnings showed healthy growth thanks to the release of Angry Birds Journey, Ruby Games integration and favorable FX. Comparable revenues were broadly flat year-on-year, while earnings clearly increased.

Our biggest game, Angry Birds 2, continues to grow each year and celebrated its 7th anniversary at the end of July with a special player community driven gaming event. We are truly humbled to see how active the game is and how fans are attending such events. Hyper-casual game studio Ruby Games grew 23% year over year pro forma decreased from the first quarter of this year. Hyper-casual games, which are primarily monetized through advertising, have been affected both by cutbacks in global advertising spending and by Apple’s ATT.

Angry Birds Journey revenue declined this quarter from its first quarter launch peak. User acquisition investments were cut in the second quarter after launch. The team is currently exploring new avenues of growth, such as dynamically adapting the game’s difficulty to players’ personal playstyles and incorporating deeper metagames to increase engagement.

In the new game pipeline, Moomin: Puzzle & Design has successfully completed market testing in Japan and the team is now continuing to add content for the next phase of its soft launch. The Ruby game Hunter Assassin 2 continues its evolution with its soft launch with the addition of a real-time multiplayer mode and a deeper meta-system.

We strongly believe that one of our growth vectors is live gaming. Angry Birds Friends showed a lot of potential for a fan-favorite title that is extremely content-rich and has a dedicated fanbase built over the years. We plan to increase our investment in top performing live games to help them reach their full potential. I’m sure it hasn’t come yet.

Our brand building initiative continued with the release of the second season of Angry Birds Summer Madness on Netflix in June. The series features a novel style that is very exciting for fans and can also expand its audience.The first season ranked in the top 10 of Netflix’s Kids category in 55 territories in its first week. I went in.

Looking at the market, the second quarter of the year was tough. Market intelligence provider data.ai estimates that in-app purchase revenue has fallen 19% year-over-year in the US. This is his fourth consecutive quarterly decline, which he attributed primarily to three factors.

The first is the normalization of consumption habits after lockdown. As more people return to normal, so will their playing patterns.

Second: Apple’s ATT policy limits a publisher’s ability to effectively target players. Today, marketing campaigns tend to get more customers, but the match between product and player is looser.

And third, macroeconomic factors such as rising inflation affect both consumers and businesses. Players are less willing to pay and advertisers are lowering their budgets. This negatively impacted advertising revenue, but could open up opportunities for user acquisition. Market fluctuations have also allowed us to strengthen our flock with amazing new talent.

As we enter the third quarter of this year, we’re seeing some improvement in our user acquisition momentum and performance. Although we expect market headwinds to continue in the short term, we are confident in the growth of the mobile gaming industry. It’s especially inspiring to see all the exciting game updates, new games, and brand projects the team is working on. Additionally, we are proud that Rovio is well positioned in this market due to the competitive advantage of the Angry Birds brand and the Beacon growth platform.

Outlook for 2022 (no change)
With the January launch of Angry Birds Journey and the full benefit of our acquisition of Ruby Games earlier in the year, we expect strong topline growth this year, building on the strong momentum of our top live games. Adjusted operating profit is expected to decline year-over-year, depending on the pace of growth and investment in user acquisition to drive that growth, especially for new games, and greater investment in new game development. increase.

Additional Information on User Acquisition Investments for Q3 2022
User acquisition investment in Q3 2022 is expected to be 25-30% of gaming revenue.

Audiocast and Conference Call
Rovio will host an English-language audiocast and conference call on its first half 2022 results, including a Q&A session, for analysts, media and institutional investors on August 11, 2022, from 14:00-15:00 EEST. The audiocast was watched live at https://investors.rovio.com/en and as a recording the same day.

Conference call details:
PIN: 19635962#

Finland: +358 981 710 310
Sweden: +46 856 642 651
UK: +44 3333 000 804
United States: +1 6319 131 422

For more information:
Alex Pelletier Normand, CEO, Phone. +358 40 485 8985 (Media Phone)
Rene Lindell, CFO, Phone. +358 40 485 8985 (Media Phone)

Distribution: Nasdaq Helsinki, Key Media, https://investors.rovio.com/en

Overview of Rovio
Rovio Entertainment Corporation is a global mobile-first gaming company that creates, develops and publishes mobile games that have been downloaded over 5 billion times. Rovio is best known for the global Angry Birds brand, which started as a popular mobile game in 2009 and has since evolved from games to a variety of entertainment, animation and consumer products under his brand license. I’ve been Rovio produced The Angry Birds Movie (2016) and its sequel, The Angry Birds Movie 2, was released in his 2019. The company offers multiple mobile games and has seven game studios, two in Espoo (Finland) and one in Stockholm (Sweden). , Copenhagen (Denmark), Montreal, Toronto (Canada) and Izmir (Turkey) called Ruby Games, which will be acquired in 2021. Most of the employees are based in Finland, where Rovio is headquartered. The company’s shares are listed on the NASDAQ Helsinki Stock Exchange Main List under the trading code ROVIO.

  • Rovio Q2-2022_interim report



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