Rovio Entertainment Corporation Stock Exchange Release April 29, 2022 at 9.00 a.m. EEST
Revenue grew 26.6% and 11.8% on comparable basis in Q1
January-March 2022 highlights
- Rovio group revenue increased 26.6% to EUR 85.0 million (67.1). Comparable growth (at constant fx and excluding Ruby Games) was 11.8%.
- Group adjusted EBITDA grew to EUR 13.6 million (12.3) and adjusted EBITDA margin was 16.0% (18.3).
- Group adjusted operating profit was EUR 10.0 million (10.1) and adjusted operating profit margin 11.8% (15.0).
- Games gross bookings increased by 25.8% to EUR 80.8 million (64.2). Comparable gross bookings growth (at constant fx and excluding Ruby Games) was 10.6%.
- Angry Birds 2, Rovio’s largest game, had gross bookings of EUR 30.3 million, an increase of 20.1% year-on-year which was its highest quarter since Q1 2019.
- Angry Birds Friends grew 15.2% year-on-year and recorded its highest quarterly gross bookings since Q4 2016 with total gross bookings of EUR 9.3 million.
- New game Angry Birds Journey was launched 20th January and it generated EUR 10.1 million gross bookings.
- User acquisition investments were EUR 31.1 million (17.3) and 37.8% of games’ revenue (26.7%). The high level of user acquisition was due to the Angry Birds Journey launch.
- Operating cash flow was EUR 14.0 million (2.5).
- Earnings per share was EUR 0.07 (0.10).
Key figures
| 1–3/ | 1–3/ | Change, | 1-12/ | |
| EUR million | 2022 | 2021 | % | 2021 |
| Revenue | 85.0 | 67.1 | 26.6% | 286.2 |
| EBITDA | 11.1 | 11.8 | -5.3% | 50.8 |
| EBITDA margin | 13.1% | 17.5% | 17.7% | |
| Adjusted EBITDA | 13.6 | 12.3 | 11.0% | 54.8 |
| Adjusted EBITDA margin, % | 16.0% | 18.3% | 19.1% | |
| Operating profit | 7.5 | 9.5 | -21.5% | 37.7 |
| Operating profit margin, % | 8.8% | 14.2% | 13.2% | |
| Adjusted operating profit | 10.0 | 10.1 | -1.0% | 43.7 |
| Adjusted operating profit margin, % | 11.8% | 15.0% | 15.3% | |
| Profit before tax | 7.6 | 10.4 | -26.5% | 40.3 |
| Capital expenditure | 2.1 | 0.9 | 129.0% | 4.0 |
| User acquisition | 31.1 | 17.3 | 79.8% | 77.2 |
| Return on equity (ROE), % | 19.8% | 23.3% | 22.2% | |
| Net gearing ratio, % | -80.2% | -75.1% | -77.4% | |
| Equity ratio, % | 70.3% | 83.4% | 70.8% | |
| Earnings per share, EUR | 0.07 | 0.10 | -27.1% | 0.41 |
| Earnings per share, diluted EUR | 0.07 | 0.10 | -27.1% | 0.41 |
| Net cash flows from operating activities | 14.0 | 2.5 | 465.0% | 44.0 |
| Employees (average for the period) | 494 | 487 | 1.5% | 490 |
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
The mobile free-to-play market has continued to face headwinds during the quarter, recording its third consecutive q-o-q decline according to data.ai. As was the case in Q4 2021, we have navigated those changes with a positive outcome during Q1, starting the year on a growth path and record game revenues. The growth was fueled by the launch of Angry Birds Journey in January, the good performance of Angry Birds 2 and Angry Birds Friends, and by Ruby Games’ nice progression. Despite substantial marketing investments during the launch weeks of Angry Birds Journey, the high level of revenues kept our profitability and cash flow at a solid level.
Rovio’s largest game, Angry Birds 2 continued its strong performance with the game’s gross bookings growing over 20% year-on-year, and achieving its highest quarterly revenue since Q1 2019. This was the result of successful live operations and opportunities identified by our teams to strengthen profitable user acquisition investments. Angry Birds Friends continued to grow double digits year-on-year and reached its highest quarterly gross bookings since Q4 2016. In February, we celebrated the 10th anniversary of the game. This is a great example of execution on our mission to craft joy with player-focused gaming experiences that last for decades. Our hyper-casual game studio Ruby Games also had a strong quarter with close to 45% pro forma y-o-y revenue growth driven by their new hyper-casual word game Wordus that was launched in January. With those results, the team continues to show its drive and resourcefulness.
Angry Birds Journey launched in January and quickly grew to become our third largest game. After a strong start we are now further developing the game and optimizing user acquisition, which will in the near-term be on a lower level than at launch. The next milestone for the game will be an exciting marketing influencer campaign in June, including TV advertising in the US to complement the good level of organic traffic we get on this title. I’m proud to admit that I am an avid player of that game!
We have continued to invest in new game development across our studios, focusing on casual games. The furthest games in production remains Moomin: Puzzle & Design and Ruby’s Hunter Assassin 2 which continue in soft launch. During the quarter we decided to cancel the soft launch of our narrative driven puzzle game Supernatural City. Going forward, the team will utilize their learnings in other puzzle game projects. I want to thank our team for their hard work throughout the development of the project.
At the end of the quarter, we launched a premium mobile game named Rovio Classic: Angry Birds. The game was the answer to the calls of our fans around the globe to re-experience the original Angry Birds game that was released twelve years ago. I’m delighted to see how excited the fans have been for this release. While we are not expecting significant revenues from this premium title, seeing it reach the top download positions is a great testament to the strength of the brand.
Our ‘Angry New Year’ series of product launches has put our fans and community front and center. At Rovio we’ve often looked to products like Minecraft as examples of incredibly engaged communities of creators and fans - just like our own - and so when the opportunity to partner with Microsoft for a premium Minecraft DLC (downloadable content) experience came up it was an immediate and obvious fit. This DLC launches very soon in the Minecraft Marketplace and caps off the 'angriest spring ever'. It celebrates 12 wonderful years of Angry Birds with an adventure filled with nostalgia, secrets and an experience ripe for user generated content and fandom in general. We cannot wait to see what sort of stories can be told by our fans with this partnership between two of modern gaming’s biggest names.
In April we also announced another major milestone: Rovio games surpassed 5 billion downloads. It is both deeply humbling and exhilarating to think about everyone that engages with our games in every corner of the world. From all of us at Rovio, thank you for your continuous support!
As we look at the rest of the year ahead, we expect the market to continue to go through challenging changes resulting from the normalization of spending habits post-covid and the significant impact of Apple’s ATT (app tracking transparency) on the marketing landscape. We are focused on executing our strategy, which we believe is adapted to those changes, and we are seeking further opportunities to grow. We are looking forward to elaborate further on our strategy at our Capital Markets Day on May 11th. Finally, I want to thank all Rovians for their hard work and delivering such a flying start of the year!
2022 outlook (unchanged)
Building on the positive momentum in our top live games, the launch of Angry Birds Journey in January and having the full benefit of the Ruby Games acquisition from the start of the year, we are expecting strong topline growth for the year. Depending on the speed of growth and the investments in user acquisition to fuel that growth, especially in the case of new games, and our larger investments in new games development, the adjusted operating profit is expected to be lower year-on-year.
Additional information on user acquisition investments in Q2 2022
The user acquisition investments for Q2 2022 are expected to be 25-30% of games revenues.
Audiocast and conference call
Rovio will host an English language audiocast and phone conference on the first quarter 2022 financial results, including a Q&A session, for analysts, media and institutional investors at 14:00-15:00 EEST on April 29, 2022. The audiocast can be viewed live at: https://investors.rovio.com/en, and as a recording later the same day.
Conference call details:
PIN: 35504272#
Finland: +358 981 710 310
Sweden: +46 856 642 651
United Kingdom: +44 3333 000 804
United States: +1 6319 131 422
More information:
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 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 its sequel, The Angry Birds Movie 2 was released in 2019. The company offers multiple mobile games and has seven games 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. 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.
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