Rovio Entertainment Corporation Stock Exchange Release
July–September 2023 highlights
- SEGA gained control of 97.7% of Rovio’s issued and outstanding shares and commenced redemption proceedings to obtain ownership of the remaining issued and outstanding shares.
- Rovio’s group revenue declined by 5.6% to
EUR 73.1 million (77.4). On a comparable (*) basis, revenue declined by 0.3%. The decline was mainly driven by Angry Birds 2 and Angry Birds Journey. - There were no new game launches during the quarter. Moomin: Puzzle & Design, Wizard Hero and Hunter Assassin 2 continued in soft launch.
- Group EBITDA decreased to
EUR 10.0 million (12.2), and the EBITDA margin decreased to 13.7% (15.7). - Group adjusted EBITDA increased to
EUR 15.8 million (15.7), and the adjusted EBITDA margin increased to 21.7% (20.2). - Group operating profit decreased to
EUR 6.7 million (8.6), and the operating profit margin decreased to 9.1% (11.1). - Group adjusted operating profit increased to
EUR 12.5 million (12.1), and the adjusted operating profit margin increased to 17.1% (15.6). Adjustments in the reporting period amounted toEUR 5.8 million and consisted of advisory costs related to the acquisition by SEGA ofEUR 10.4 million , one-time long-term incentive and bonus scheme settlements ofEUR 1.9 million and changes in the contingent liability of the Ruby Games acquisition ofEUR -6.4 million . - Games’ gross bookings declined by 4.7% to
EUR 67.5 million (70.8). Comparable (*) gross bookings increased by 0.7%. - User acquisition investments decreased to
EUR 21.1 million (21.3), representing 29.6% of games’ revenue (28.7). - Operating cash flow decreased to
EUR -0.9 million (8.6). The negative cash flow was due to costs related to the acquisition by SEGA. - Earnings per share increased to
EUR 0.12 (0.10). Adjusted earnings per share increased toEUR 0.18 (0.14).
January–September 2023 highlights
- Rovio’s group revenue declined by 7.9% to
EUR 221.8 million (240.8). On a comparable (*) basis, revenue declined by 7.0%. The decline was due to the high spike of Angry Birds Journey launch in Q1’22 and lower revenue from Angry Birds 2. - Group EBITDA decreased to
EUR 32.0 million (37.6), and the EBITDA margin decreased to 14.4% (15.6). - Group adjusted EBITDA decreased to
EUR 38.7 million (44.3), and the adjusted EBITDA margin decreased to 17.4% (18.4). - Group operating profit decreased to
EUR 22.4 million (26.6), and the operating profit margin decreased to 10.1% (11.0). - Group adjusted operating profit decreased to
EUR 29.1 million (33.3), and the adjusted operating profit margin decreased to 13.1% (13.8). - Games’ gross bookings declined by 7.0% to
EUR 208.3 million (224.1). Comparable (*) gross bookings declined by 6.1%. - User acquisition investments decreased to
EUR 66.3 million (73.2), representing 30.7% of games’ revenue (31.5). - Operating cash flow decreased to
EUR -1.2 million (37.9) due to changes in working capital, theNew Mexico lawsuit settlement payment in January and costs related to the acquisition by SEGA. - Earnings per share were stable at
EUR 0.30 (0.30). Adjusted earnings per share declined toEUR 0.37 (0.38).
*) Comparable growth is calculated at constant USD/EUR exchange rates.
Key figures
7–9/ | 7–9/ | Change, | 1–9/ | 1–9/ | Change, | 1–12/ | |
EUR million | 2023 | 2022 | % | 2023 | 2022 | % | 2022 |
Revenue | 73.1 | 77.4 | -5.6% | 221.8 | 240.8 | -7.9% | 317.7 |
EBITDA | 10.0 | 12.2 | -17.9% | 32.0 | 37.6 | -14.9% | 43.3 |
EBITDA margin | 13.7% | 15.7% | 14.4% | 15.6% | 13.6% | ||
Adjusted EBITDA | 15.8 | 15.7 | 1.0% | 38.7 | 44.3 | -12.8% | 53.9 |
Adjusted EBITDA margin, % | 21.7% | 20.2% | 17.4% | 18.4% | 17.0% | ||
Operating profit | 6.7 | 8.6 | -22.0% | 22.4 | 26.6 | -15.8% | 28.6 |
Operating profit margin, % | 9.1% | 11.1% | 10.1% | 11.0% | 9.0% | ||
Adjusted operating profit | 12.5 | 12.1 | 3.8% | 29.1 | 33.3 | -12.8% | 39.2 |
Adjusted operating profit margin, % | 17.1% | 15.6% | 13.1% | 13.8% | 12.3% | ||
Profit before tax | 9.3 | 10.2 | -8.9% | 26.5 | 30.4 | -12.9% | 30.6 |
Adjusted profit for the period | 13.6 | 10.4 | 30.8% | 28.4 | 28.2 | 0.8% | 31.4 |
Capital expenditure | 1.8 | 1.3 | 34.5% | 6.3 | 4.6 | 38.7% | 7.0 |
User acquisition | 21.1 | 21.3 | -0.9% | 66.3 | 73.2 | -9.5% | 96.5 |
Return on equity (ROE), % | 11.5% | 19.0% | 11.5% | 19.0% | 14.4% | ||
Net gearing ratio, % | -62.6% | -81.3% | -62.6% | -81.3% | -72.7% | ||
Equity ratio, % | 86.0% | 72.3% | 86.0% | 72.3% | 79.3% | ||
Earnings per share, EUR | 0.12 | 0.10 | 16.5% | 0.30 | 0.30 | -0.4% | 0.30 |
Earnings per share, diluted EUR | 0.12 | 0.10 | 17.1% | 0.30 | 0.30 | -0.5% | 0.30 |
Adjusted earnings per share, EUR | 0.18 | 0.14 | 29.7% | 0.37 | 0.38 | -0.8% | 0.42 |
Net cash flows from operating activities | -0.9 | 8.6 | -110.9% | -1.2 | 37.9 | -103.3% | 49.9 |
Employees (average for the period) | 558 | 522 | 6.9% | 560 | 506 | 10.7% | 513 |
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 denominated in-app-purchases in
In the third quarter of 2023, Rovio moved on to a new phase, as SEGA gained control of 97.7% of Rovio’s issued and outstanding shares. While the market dynamics continued to be weaker than last year, we remained disciplined in our own operations and focused on finding out synergies that our life with SEGA may entail to bring out the best in Rovio.
The global mobile gaming market declined in the third quarter by 0.7% compared to the same period in the previous year but remained stable sequentially. At Rovio, our comparable gross bookings increased by 0.7% and 3.8%, respectively. As in the previous quarters, the growth was primarily driven by Angry Birds Dream Blast.
We have high ambitions in terms of developing our top live games further and launching new ones. We strengthened the team in
Our brand licensing business has continued to showcase new content, with Angry Birds Slingshot Stories, one of the IP’s most beloved short format series, just returning with a new season in October for the fans to dig into. The previous seasons have boasted over 120 million views on the Angry Birds YouTube channel alone, which demonstrates the enduring popularity of this entertaining franchise.
SEGA’s acquisition of Rovio has progressed to the point that they have commenced redemption proceedings in respect of Rovio’s minority shares in order to obtain ownership of all the issued and outstanding shares. At the same time, the synergy and integration work that we conduct in good cooperation with SEGA is progressing at full speed. We look forward to reaping the benefits and are beyond excited about the future opportunities that the vibrant IPs and talents we have together will bring.
2023 outlook (specified)
We expect our comparable revenue to be lower than last year and adjusted operating profit to be at last year’s level.
Additional information on user acquisition investments in Q4 2023
User acquisition investments in Q4 2023 are expected to be 25–30% of games’ revenues.
2023 outlook (previous)
We expect our comparable revenue and adjusted operating profit to be at last year’s level.
More information
Rovio in brief
Attachment
- Rovio Q3-2023_interim report
© OMX, source