Rovio Entertainment Corp.: Financial Statement Bulletin


Rovio Entertainment Corporation         Stock Exchange Release                         11 February 2022 at 9.00 a.m. EET

Games revenue grew 18.8% and 9.0% on comparable basis in Q4

October-December 2021 highlights

  • Rovio group revenue increased 15.2% to EUR 78.9 million (68.5). Organic growth (excluding Ruby Games) was 9.0%.
  • Group adjusted EBITDA was EUR 16.5 million (12.2) and adjusted EBITDA margin 21.0% (17.8)
  • Group adjusted operating profit was EUR 13.1 million (7.5) and adjusted operating profit margin 16.6% (10.9)
  • Games revenue increased 18.8% to EUR 76.5 million (64.4). Organic games revenue (excluding Ruby Games) growth was 12.2%. In comparable currencies, Games revenue grew by 15.3% and organic growth in comparable currencies (i.e., comparable basis) was 9.0%. The Games gross bookings were EUR 74.0 million (64.9) and increased by 14.1% year-on-year. In comparable currencies, the gross bookings grew by 10.7% and organic growth in comparable currencies (i.e., comparable basis) was 4.7%.
  • Top 3 games Angry Birds 2, Angry Birds Dream Blast and Angry Birds Friends all grew year-on-year
  • Rovio greenlit Angry Birds Journey for global launch end of January ’22 (launched 20th of Jan) and the game had scaled up to EUR 25 million yearly gross bookings run-rate before the launch (after the launch the game has grown to over EUR 40 million yearly run-rate).
  • User acquisition investments were EUR 20.6 million (16.0) and 26.9% of the Games segment’s revenue (24.9%)
  • Operating cash flow was EUR 17.3 million (17.6)
  • Earnings per share was EUR 0.08 (0.04)

January–December 2021 highlights

  • Rovio group revenue increased 5.1% to EUR 286.2 million (272.3) and organic growth (excluding Ruby Games) was 3.2%.
  • Group adjusted EBITDA was EUR 54.8 million (60.1) and adjusted EBITDA margin 19.1% (22.1)
  • Group adjusted operating profit was EUR 43.7 million (47.2) and adjusted operating profit margin 15.3% (17.3)
  • Games revenue increased 7.0% to EUR 276.4 million (258.2). Organic growth (excluding Ruby Games) was 5.0%. In comparable currencies, Games revenue grew by 9.6% and organic growth in comparable currencies (i.e., comparable basis) was 7.6%. The Games gross bookings were EUR 271.4 million (259.2) and increased by 4.7% year-on-year. In comparable currencies, the gross bookings grew by 7.2% and organic growth in comparable currencies (i.e., comparable basis) was 5.3%.
  • User acquisition investments were EUR 77.2 million (58.7) and 27.9% of the Games segment’s revenue (22.7%)
  • Operating cash flow was EUR 44.0 million (63.6)
  • Earnings per share was EUR 0.41 (0.43)

Key figures

  10-12/ 10-12/ Change,
1-12/ 1-12/ Change,
EUR million 2021 2020 % 2021 2020 %
Revenue 78.9 68.5 15.2% 286.2 272.3 5.1%
EBITDA 13.4 12.2 9.7% 50.8 60.0 -15.4%
EBITDA margin 17.0% 17.8%   17.7% 22.0%  
Adjusted EBITDA 16.5 12.2 35.4% 54.8 60.1 -8.9%
Adjusted EBITDA margin, % 21.0% 17.8%   19.1% 22.1%  
Operating profit 8.1 2.9 174.1% 37.7 42.5 -11.3%
Operating profit margin, % 10.2% 4.3%   13.2% 15.6%  
Adjusted operating profit 13.1 7.5 75.0% 43.7 47.2 -7.5%
Adjusted operating profit margin, % 16.6% 10.9%   15.3% 17.3%  
Profit before tax 9.2 2.3 295.4% 40.3 40.7 -1.1%
Capital expenditure 1.3 1.1 15.6% 4.0 3.9 2.1%
User acquisition 20.6 16.0 28.7% 77.2 58.7 31.5%
Return on equity (ROE), % 22.2% 24.4%   22.2% 24.4%  
Net gearing ratio, % -77.4% -77.6%   -77.4% -77.6%  
Equity ratio, % 70.8% 82.3%   70.8% 82.3%  
Earnings per share, EUR 0.08 0.04 106.7% 0.41 0.43 -4.6%
Earnings per share, diluted EUR 0.08 0.04 106.6% 0.41 0.43 -4.8%
Net cash flows from operating activities 17.3 17.6 -1.6% 44.0 63.6 -30.8%
Employees (average for the period) 501  479 4.7% 490  470 4.2%

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.

Dividend proposal
The parent company’s distributable funds on December 31, 2021, amount to EUR 220,450,449.79, of which the profit for the period is EUR 39,913,244.68. Rovio’s Board of Directors proposes that the Annual General Meeting authorizes the Board to resolve on a dividend of EUR 0.12 per share be paid to shareholders in respect of financial year 2021. Based on the number of shares outstanding as of the balance sheet date, December 31, 2021, the total amount of the dividend is EUR 8,926,262.28.

Alex Pelletier-Normand, CEO:
I’m delighted to see that Rovio continued good progress in strategy execution throughout the year with a strong finish. In the fourth quarter, we saw strong growth and record high revenue in Games. This achievement was driven by the good performance of our key live games, especially Angry Birds 2 and Angry Birds Friends, and the acquisition of Ruby Games. Our full year and Q4 profitability and cash flow remained at a good level. Despite a second year of pandemic and changes in the marketing landscape driven by Apple’s new privacy framework, we performed well. This would not have been possible without the utmost dedication of all our employees, I would like to thank all Rovians for their contributions and commitment throughout the year.

We finished the year with a strong fourth quarter. All our top three games Angry Birds 2, Angry Birds Dream Blast and Angry Birds Friends grew year-on-year. Our teams crafted successful holiday campaigns, improving game KPIs and enabling higher UA investments. Rovio’s largest game, Angry Birds 2, recorded the highest gross bookings since Q1 2019 and grew double digit year-on-year. Angry Birds Dream Blast also grew year-on-year; the game has proven to be another stable pillar for Rovio, crossing the bar of 180M euros in revenue since its launch in 2019 and showing still growth potential. Further, it was remarkable to see our third biggest and oldest live game, Angry Birds Friends, record its fifth consecutive quarter of growth, thanks to seasonal content and special offers. We are celebrating this month the 10th anniversary of this fan-favorite title. Ruby Games had a solid quarter based on its hyper-casual game portfolio while their first hybrid-casual game, Hunter Assassin 2, reached soft launch.

Q4 was also a quarter of finalization for the launch of Angry Birds Journey, which was released globally in January 2022. The game’s KPIs are promising – the annual revenue run-rate is over EUR 40 million, which makes it Rovio’s third largest game. The team has done a tremendous job and we have exciting content coming to our players.

At the end of last year we said that we’ll be making announcements on different brand initiatives as part of the “Angry New Year”. We have been active, and the strategy unfolded as planned. Among other things, we partnered with the widely popular gaming platform Roblox, and Angry Birds: Summer Madness, the first Angry Birds long-form animated series, premiered on Netflix in January. Those events got our fans excited; further initiatives will surface later this year.

During the year the mobile gaming industry remained dynamic and major changes occurred in the marketing landscape driven by growing awareness on privacy matters, resulting in increased regulation and policies. We were ready! Our versatile tools, our collaborative ways of working and our wide-appeal portfolio – spearheaded by the strong Angry Birds brand – allowed us to maneuver this volatile environment successfully.

Those changes also encouraged us to refine our strategy further, and we made the decision to double-down on casual games, leveraging our core expertise and maximizing the value of our network of users. To support this, we strengthened our talent pool by acquiring the hyper-casual studio Ruby Games in Turkey, and by opening a new casual mobile gaming studio in Toronto, Canada. Finally, we formed a multi-year partnership for mobile gaming rights for the beloved Moomin IP. The first Moomin game, Moomin: Puzzle & Design, was soft launched in December.

Another key area where we advanced during the year was sustainability. We want to lead the industry in creating safe and joyful gaming experiences that are crafted in a diverse and inclusive work culture while respecting our planet. We appointed our first-ever Chief Sustainability Officer to lead the charge in our 3 focus areas: Safe & Responsible Gaming, People & Society, and Climate & Environment. One example of our engagement is our collaboration with UNICEF to support adolescent girls in Senegal and our three-year commitment to support their education program in Sierra Leone. We also offset our carbon emissions and pledged to reach carbon neutrality in 2022.

As we enter the new year, I am energized about the opportunities ahead. We start the year with positive momentum in our top live games, now including Angry Birds Journey. Our games pipeline beyond 2022 is healthy with new games in development in all of our seven studios, and we have exciting brand initiatives in this “Angry New Year”. We continue our M&A efforts, aiming to build new growth avenues within casual games, grow our audience network, and establish value through synergies across our game portfolio and studios. I believe that Rovio is well positioned to continue to drive long-term growth and deliver on our mission: craft joy with player-focused gaming experiences that last for decades.

2022 outlook
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.

The user acquisition investments for Q1-2022 is expected to be around 40% of games revenues.

Audiocast and conference call:
Rovio will host an English language audiocast and phone conference on the Q4 and full year 2021 financial results, including a Q&A session, for analysts, media and institutional investors at 14:00-15:00 EET on February 11, 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: 69986702#

Finland: +358 981710310
Sweden: +46 856642651
United Kingdom: +44 3333000804
United States: +1 6319131422

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.

 

Rovio Entertainment Corporatio



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