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Rovio Entertainment Corp.: Half-Year 2021 financial report:


Games revenue grew 6% in comparable currencies in the second quarter

April–June 2021 highlights

  • Rovio group revenue was EUR 68.8 million (69.2) and decreased by 0.6% year-on-year.
  • Group adjusted operating profit was EUR 6.2 million (13.8) and adjusted operating profit margin 8.9% (20.0)
  • Group adjusted EBITDA was EUR 8.7 million (15.9) and adjusted EBITDA margin 12.7% (22.9)
  • Games revenue decreased 0.7% year-on-year to EUR 66.4 million (66.9). In comparable currencies, Games revenue grew by 6%. The Games gross bookings were EUR 66.6 million (67.7) and decreased by 1.7% year-on-year. In comparable currencies, the gross bookings grew by 5%.
  • Rovio entered into a long-term partnership with Moomin Characters and Gutsy Animation with the rights to develop and publish Moomin IP based games for any platform, with exclusive rights for all mobile platforms. Rovio became a minority shareholder in Gutsy Animations, the creator of the Moominvalley 3D animation series through an equity investment of 2.5 million euros and a convertible loan of 2.5 million euros.
  • Small Town Murders continued to grow and reached a gross booking of EUR 4.7 million
  • Angry Birds Friends continued its strong performance and grew its gross bookings to EUR 8.3 million
  • In April, Rovio’s released Darkfire Heroes game which reached gross bookings of EUR 1.1 million during the quarter.
  • User acquisition investments were EUR 21.3 million (14.0) and 32.0% of the Games segment’s revenue (20.9%)
  • Operating cash flow was EUR 7.6 million (18.7)
  • Earnings per share were EUR 0.07 (0.15)

January–June 2021 highlights

  • Rovio group revenue was EUR 135.9 million (135.8) and increased by 0.1% year-on-year
  • Group adjusted operating profit was EUR 16.2 million (26.9) and adjusted operating profit margin 12.0% (19.8)
  • Group adjusted EBITDA was EUR 21.0 million (32.0) and adjusted EBITDA margin 15.5% (23.6)
  • Games revenue increased 1.3% year-on-year to EUR 131.3 million (129.6). In comparable currencies, Games revenue grew by 8%. The Games gross bookings were EUR 130.7 million (129.8) and increased by 0.7% year-on-year. In comparable currencies, the gross bookings grew by 7%.
  • User acquisition investments were EUR 38.5 million (27.5) and 29.4% of the Games segment’s revenue (21.2%)
  • Brand Licensing revenue was EUR 4.6 million (6.2) and declined 24.9% year-on-year.
  • Operating cash flow was EUR 10.1 million (30.2)
  • Earnings per share were EUR 0.17 (0.26)

Key figures

  4-6/ 4-6/ Change, 1-6/ 1-6/ Change, 1-12/
EUR million 2021 2020 % 2021 2020 % 2020
Revenue 68.8 69.2 -0.6% 135.9 135.8 0.1% 272.3
EBITDA 8.7 16.1 -45.7% 20.5 31.9 -35.9% 60.0
EBITDA margin 12.7% 23.2%   15.1% 23.5%   22.0%
Adjusted EBITDA 8.7 15.9 -45.0% 21.0 32.0 -34.4% 60.1
Adjusted EBITDA margin, % 12.7% 22.9%   15.5% 23.6%   22.1%
Operating profit 6.2 14.1 -56.2% 15.7 26.8 -41.4% 42.5
Operating profit margin, % 8.9% 20.3%   11.5% 19.7%   15.6%
Adjusted operating profit 6.2 13.8 -55.5% 16.2 26.9 -39.6% 47.2
Adjusted operating profit margin, % 8.9% 20.0%   12.0% 19.8%   17.3%
Profit before tax 6.1 14.8 -59.0% 16.5 26.3 -37.4% 40.7
Capital expenditure 0.8 1.1 -21.3% 1.8 1.8 -4.0% 3.9
User acquisition 21.3 14.0 51.8% 38.5 27.5 40.4% 58.7
Return on equity (ROE), % 18.5% 19.7%   18.5% 19.7%   24.4%
Net gearing ratio, % -72.5% -68.1%   -72.5% -68.1%   -77.6%
Equity ratio, % 84.9% 83.1%   84.9% 83.1%   82.3%
Earnings per share, EUR 0.07 0.15 -54.4% 0.17 0.26 -35.4% 0.43
Earnings per share, diluted EUR 0.07 0.15 -54.5% 0.17 0.26 -35.7% 0.43
Net cash flows from operating activities 7.6 18.7 -59.4% 10.1 30.2 -66.7% 63.6
Employees (average for the period) 481 460 4.4% 484 463 4.4% 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:

The first six months as Rovio’s CEO have been rewarding. Not only have we been growing y-o-y in comparable currencies, against Q2-2020, a quarter that largely benefited from the beginning of the shelter-at-home situation, but we also made strides in the execution of our Angry Birds brand and our M&A strategy. The organization stays active and motivated; we are eager to continue executing at a fast pace and believe that our market positioning improves with each step we take.

Looking at our live games, the good momentum we saw in the first quarter continued in Q2. Games revenue grew 6% in comparable currencies. The main revenue drivers were Small Town Murders (globally launched in June 2020) and Angry Birds Friends. We are proud of our Angry Birds Friends team for this continuous performance of the oldest game in our live portfolio. Also positive was the scaling of Small Town Murders during the quarter, which was the third consecutive quarter of growth for the game.

Regarding our new games, we launched Darkfire Heroes in April, from our Copenhagen studio acquired in 2020. As of today, we have not yet been able to reach a scale fitting our ambition level. The team is expanding the game with additional events and content, and we search ways to improve our marketing efficiency within this mid-core category, which is new to us. We also made the decision to cancel our 4x strategy game Hardhead Squad which was in soft launch. We did not see enough potential for a global release, and we believe it is important to focus our resources where they can make the biggest impact. I want to thank our team for their hard work throughout the development of the project.

We have two other games, Supernatural City and Angry Birds Journey, in soft launch, and their development is progressing as expected. Finally, during the quarter we released the Apple Arcade title Angry Birds Reloaded, which quickly reached the #1 position of the chart. The Angry Birds fans were delighted, to the extent that we saw a positive impact also on Angry Birds 2, which reached a 12-months download peak soon after the release of Angry Birds Reloaded.
In June, we were thrilled to announce a long-term partnership with Moomin Characters and Gutsy Animations, granting us the exclusive rights to develop Moomin based mobile games; the first one being scheduled to reach soft launch this year. This is in line with our brand strategy: in an industry increasingly dominated by paid advertising, leveraging strong brands through high-quality game experiences is an efficient way to drive organic downloads and decrease acquisition costs. Having now two established and beloved brands as platforms to develop games in the years to come is placing us in a good position. With that in mind, we continued to develop our Angry Birds strategy: we worked on an ambitious product roadmap, and we engaged in a closer and more genuine relationship with our fans. I am happy to see that this strategy bears fruit already. The community is excited and eager to engage with our games in development.

Today, we announced the acquisition of Ruby Games, a hyper-casual studio with an impressive track record, located in Izmir, Turkey. Our investment in this market segment is beneficial for both companies as we create a larger network of users that can navigate a more diverse portfolio of titles. The modifications concerning user privacy policies operated by distribution platforms and policy makers make precise user targeting harder, thus building a wide and efficient ecosystem that keeps players engaged longer is a true strategic advantage. In addition, hyper-casual remains a growing segment, and the acquisition will help us better balance our revenues, increasing the share of our advertising business. We are very excited to have Ruby Games joining the flock.

During the last 17 months of remote work, we witnessed how Rovians are resilient, agile, and driven. They find innovative solutions to get the job done in difficult circumstances, while remaining supportive of each other. We are also mindful that in order to excel at creative and collaborative work, being able to brainstorm face to face with colleagues is valuable. With this in mind, we are moving as soon as possible to a flexible hybrid model, respectful of the individual situations of rovians, and adapted to each project’s needs. We believe that the best people to make decisions on their project policy are the teams themselves; and we will empower them to do so.

2021 outlook (unchanged)
The mobile gaming market continues to grow with casual gaming being a major growth driver. The ongoing changes in consumer behavior and underlying market trends are accelerated by the COVID pandemic and plays an important role in both current games’ operation and new game development. This combined with industry changes like Apple’s privacy policy fuels the near-term uncertainty in the market environment.

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 conference call on the first half year 2021 financial results, including a Q&A session for analysts, media and institutional investors at
14:00-15:00 EEST on August 12, 2021. The audiocast can be viewed live at: https://investors.rovio.com/en , and later on the same day as a recording.

Conference call details:
PIN: 26539023#

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 4.5 billion times so far. 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 and consumer products in brand licensing. Today, Rovio offers multiple mobile games, animations and produced The Angry Birds Movie in 2016. Its sequel, The Angry Birds Movie 2, was released in 2019. Rovio is headquartered in Finland and the company’s shares are listed on the main list of NASDAQ Helsinki stock exchange with the trading code ROVIO. (www.rovio.com)

Rovio Entertainment Corporatio



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