Rovio Entertainment Corporation Stock Exchange Release 28 October, 2021 9.00 EEST
Games – strong growth and high profitability
July-September 2021 highlights
January–September 2021 highlights
|Adjusted EBITDA margin, %||24.1%||23.4%||18.4%||23.5%||22.1%|
|Operating profit margin, %||19.6%||18.9%||14.3%||19.4%||15.6%|
|Adjusted operating profit||14.3||12.8||11.6%||30.5||39.7||-23.1%||47.2|
|Adjusted operating profit margin, %||20.0%||18.9%||14.7%||19.5%||17.3%|
|Profit before tax||14.6||12.1||20.7%||31.1||38.4||-19.0%||40.7|
|Return on equity (ROE), %||19.2%||22.6%||19.2%||22.6%||24.4%|
|Net gearing ratio, %||-72.6%||-69.7%||-72.6%||-69.7%||-77.6%|
|Equity ratio, %||73.5%||81.0%||73.5%||81.0%||82.3%|
|Earnings per share, EUR||0.16||0.12||25.1%||0.32||0.38||-15.7%||0.43|
|Earnings per share, diluted EUR||0.16||0.12||25.3%||0.32||0.38||-15.9%||0.43|
|Net cash flows from operating activities||16.7||15.8||5.6%||26.7||46.0||-41.9%||63.6|
|Employees (average for the period)||490||475||3.2%||486||467||4.1%||470|
Unless otherwise stated, the comparison figures in brackets refer to the corresponding period in the previous year. Calculations and definitions are presented in the Performance Measures section.
The changes in comparable currencies have been calculated by translating the reporting period figures with the average USD/EUR exchange rates of the comparison period for the US dollar dominated in-app-purchases in United States and global ad network sales.
Alex Pelletier-Normand, CEO:
Yet another eventful quarter behind us! Q3 was marked by more face-to-face interactions, record Games revenues and notable strategic evolvement. The profitability was at a high level, mainly due to higher revenue, incremental income from Angry Birds Reloaded on Apple Arcade and somewhat lower user acquisition investments.
In September, we made meaningful changes that are also new building blocks for our future. Firstly, we announced that Heini Kaihu will transition from Head of HR to take on the new role of Rovio’s Chief Sustainability Officer. The creation of this position highlights the increasing importance of sustainability as part of our vision and our commitment to lead the charge within the industry. Our aim remains to create long-term value for employees and shareholders in a responsible way, and this role strengthens our commitment to have sustainability rooted in our strategy, operations, products and practices. Secondly, we announced the opening of a new free-to-play casual mobile game studio in Toronto, Canada, headed by the experienced studio manager Julie Beaugrand. We are very happy to see Julie join us and build a team which will add a new foothold for Rovio in the casual space.
Launching this studio is also in line with an adjustment we made to our portfolio strategy. In order to maximise our chances of achieving our goals, we will focus further on more casual and wide appeal games. This has multiple benefits, namely building on our proven expertise, maximising the value of our network of users, and moving away from mid-core, a category increasingly characterised by expensive development costs and dependence on high-CPIs market niches.
Our key live games continued to perform strongly in Q3. Angry Birds Friends kept on growing and had its best quarter since Q2-2017. Our largest two games Angry Birds 2 and Angry Birds Dream Blast were relatively stable year-on-year and quarter-on-quarter. As mentioned in our last quarterly report, we reduced marketing spend for Small Town Murders and Darkfire Heroes and consequently this had a negative impact on these games revenues in the third quarter. Small Town Murders’s team continues to work on improving the game with the target to scale up the game further in the future. For Darkfire Heroes, given the limited size of the game and the aforementioned focus on casual, we decided to assign the team to more promising and wide-appeal projects while moving the game to lean maintenance.
In September, we finalised the first part of the Ruby Games acquisition. The team continued to show their mastery in hyper-casual by launching Forensic Master in September which reached the no. 1 position in US download charts. They also soft launched Hunter Assassin 2, the awaited sequel to the hit game Hunter Assassin.
Our new product pipeline is healthy with Angry Birds Journey and Supernatural City continuing their soft launch and our first Moomin game preparing to join them later this year. In addition, we will see our Angry Birds brand strategy unfold in different formats and platforms. We will announce different initiatives in the coming months for what we’re dubbing "Angry New Year"!
We are excited to enter the last quarter of the year which is typically a busy season with elevated fan engagement and seasonal events across our key games. After 19 months of Rovians showing great agility and resilience while working from home, it is energising to be able to see and engage with our colleagues face-to-face at the office in a hybrid environment. I am very grateful for their continuous commitment and dedication.
2021 outlook (unchanged)
We will focus on improving the performance of our key live games and on launching new innovative products. We continue to show diligence in our UA spend. Depending on market conditions, the performance of our investments, and the launch of new games, we aim to increase our UA investments to build growth for the coming years. This may have implications on short-term profitability.
We will continue investing in our Future of Gaming initiatives, taking advantage of the trends we see in consumer behavior and building our positioning in the rapidly evolving market.
In addition, we seek growth through synergistic acquisitions that can deliver long-term value growth.
Audiocast and conference call:
Rovio will host an English language audiocast and phone conference on the Q3 2021 financial results, including a Q&A session, for analysts, media and institutional investors at 14:00-15:00 EEST on October 28, 2021. The audiocast can be viewed live at: https://investors.rovio.com/en , and as a recording later the same day.
Conference call details:
Finland: +358 981710310
Sweden: +46 856642651
United Kingdom: +44 3333000804
United States: +1 6319131422
Alex Pelletier-Normand, CEO, tel. +358 40 485 8985 (media phone)
René Lindell, CFO, tel. +358 40 485 8985 (media phone)
Distribution: Nasdaq Helsinki, key media, https://investors.rovio.com/en
Rovio in brief:
Rovio Entertainment Corporation is a global mobile-first games company that creates, develops and publishes mobile games, which have been downloaded over 4.5 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 various entertainment, animations and consumer products in brand licensing. Rovio has produced The Angry Birds Movie (2016), and it’s sequel, The Angry Birds Movie 2 was released in 2019. The company offers multiple mobile games and has seven game studios – two in Espoo (Finland), one in Stockholm (Sweden), Copenhagen (Denmark), Montreal and Toronto (Canada), as well as a subsidiary in Izmir (Turkey) called Ruby Games, which was acquired in 2021. Rovio also has locations in China and the United States. Most of the employees are based in Finland where Rovio is headquartered. The company’s shares are listed on the main list of NASDAQ Helsinki stock exchange with the trading code ROVIO. (www.rovio.com )
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