2017-11-23 08:00:00 CET
2017-11-23 08:00:22 CET
REGULATED INFORMATION
Rovio Entertainment Oyj - Interim report (Q1 and Q3)
Rovio Entertainment Corp.: Interim Report for January-September 2017
Rovio Entertainment Corporation Interim report November
23, 2017 at 9:00
Rovio Interim Report for January-September 2017
ROVIO'S REVENUE GREW BY 41%, THE COMPANY SIGNIFICANTLY INCREASED ITS USER
ACQUISITION INVESTMENTS
July-September 2017 highlights
* Rovio's revenue increased by 41% to EUR 70.7 million (50.0)
* Adjusted EBITDA was EUR 8.6 million (8.5).
* EBITDA was EUR 6.1 million (8.5).
* Operating profit was EUR 1.6 million (5.2).
* Profit before taxes was EUR -0.5 million (4.6)
* Earnings per share were EUR -0.01 (0.05)
* Diluted earnings per share were EUR -0.01 (0.05)
* Net cash flows from operating activities increased to EUR 18.0 million
(11.8)
* Games global quarterly ARPDAU increased to EUR 7 cents (3). TOP 5 games
quarterly ARPDAU increased to EUR 12 cents (6).
* User acquisition investments totaled EUR 22.2 million (5.4), or 35% of the
Games segment's revenue (11.9%)
* The Games segment launched the Angry Birds Match game in August
January-September 2017 highlights
* Rovio's revenue increased by 74% to EUR 223.2 million (128.5)
* Adjusted EBITDA increased to EUR 50.4 million (19.5)
* EBITDA increased to EUR 46.0 million (19.5)
* Operating profit increased to EUR 20.9 million (12.0)
* Profit before taxes increased to EUR 16.7 million (10.2)
* Earnings per share were EUR 0.17 (0.10)
* Diluted earnings per share were EUR 0.16 (0.10)
* Net cash flows from operating activities increased to EUR 53.7 million
(14.5)
* User acquisition investments totaled EUR 53.7 million (10.6), or 30% of the
Games segment's revenue (9.4%)
Unless otherwise stated, the comparison figures in brackets refer to the
corresponding period in the previous year (reference period). The figures in
this report are unaudited.
Outlook for 2017 (unchanged):
Rovio maintains the outlook published in its half-year financial report
(offering circular dated September 18, 2017), according to which the Company's
annual revenue and EBITDA are expected to increase significantly in the
financial year ending December 31, 2017, compared to the financial year ended
December 31, 2016.
Key figures
EUR million 7-9/ 2017 7-9/ 2016 Change, 1-9/ 2017 1-9/ 2016 Change, 2016
(%) (%)
-------------------------------------------------------------------------------
Revenue 70.7 50.0 41.2% 223.2 128.5 73.7% 191.7
EBITDA 6.1 8.5 -28.6% 46.0 19.5 135.7% 35.4
EBITDA margin 8.6% 17.1% 20.6% 15.2% 18.5%
Adjusted 8.6 8.5 0.5% 50.4 19.5 158.5% 35.4
EBITDA
Adjusted 12.1% 17.1% 22.6% 15.2% 18.5%
EBITDA
margin, %
Operating 1.6 5.2 -70.0% 20.9 12.0 75.1% 16.9
profit
Operating 2.2% 10.3% 9.4% 9.3% 8.8%
profit
margin, %
Profit before -0.5 4.6 16.7 10.2 63.1% 15.4
tax
Capital 1.5 3.5 -56.3% 7.4 18.4 -60.0% 23.3
expenditure
User 22.2 5.4 308.7% 53.7 10.6 408.2% 18.2
acquisition
cost
Return on 20.8% - 20.8% - 19.1%
equity (ROE),
%
Net gearing -62.8% -6.3% -62.8% -6.3% -11.5%
ratio, %
Equity ratio, 72.9% 60.6% 72.9% 60.6% 64.1%
%
Earnings per -0.01 0.05 0.17 0.10 67.2% 0.14
share, EUR
Earnings per -0.01 0.05 0.16 0.10 65.0% 0.14
share,
diluted EUR
Net cash 18.0 11.8 52.0% 53.7 14.5 270.7% 22.8
flows from
operating
activities
Employees 400 474 -15.6% 422 478 -11.7% 476
(average for
the period)
Calculations and definitions are presented in the Performance Measures section
below.
Kati Levoranta, CEO:
In the third quarter of 2017, we continued to execute our Games First growth
strategy. Revenue increased by 41% year-on-year and amounted to approximately
EUR 71 million. In line with our growth strategy, we significantly increased our
investments in user acquisition, which predictably led to a decline in
profitability. Rovio's successful listing on the Helsinki stock exchange at the
end of September was evidence of the strong interest in our growth strategy,
also in the capital markets.
Rovio's Games business achieved strong growth in the third quarter. The Games
business unit's revenue increased by 40% year-on-year, boosted by the improved
monetization of top games. We significantly increased our investments in user
acquisition, and at the same time in future revenues, for our top-performing
games: investments increased to EUR 22 million in the third quarter, which, as
expected, reduced the profitability of the Games business unit for the third
quarter. We expect the payback time for these investments to be 8 to 10 months.
In August, Rovio launched a new game, Angry Birds Match, which has promising
performance indicators and the potential to become one of Rovio's best
performing games.
The revenue of the Brand Licensing business saw substantial growth in the third
quarter, as expected, rising to EUR 6.7 million mainly on the strength of income
related to the Angry Birds Movie. In September, Rovio established a marketing
partnership with the English Premier League club Everton to strengthen the local
and global visibility of the Angry Birds brand. Movie-related revenue helped the
Brand Licensing business achieve a significant year-on-year improvement in
profitability.
Rovio continues to improve the monetization of its top games by optimizing user
acquisition investments in accordance with a carefully managed process and also
by continuously introducing new features to its games. As part of its growth
strategy, Rovio is also continuously developing new games, with only those games
that pass strict internal assessments being approved for market launch.
Rovio's Initial Public Offering in September 2017 saw the Company acquire more
than 11,000 new shareholders and accumulate gross proceeds of EUR 30 million.
Rovio plans to use the funds to support its growth strategy. Listing on the
stock exchange also enables Rovio to make more transparent use of shares as the
foundation of the long-term incentive scheme for personnel.
More information:
Rauno Heinonen, SVP, Corporate Communications and Investor Relations, tel.
+358 40 861 9345
Briefing and webcast:
Rovio will organize a Finnish-language briefing for media, analysts, and
institutional investors on November 23, 2017 from 11:30 to 12:30 EET at the
Rovio office located at Keilaranta 7, Espoo. Registration for attendance should
be made in advance by e-mail to comms@rovio.com.
The Company will also organize an English-language webcast starting at 15:30
EET. The information about how to participate in the webcast can be found on
Rovio's website http://www.rovio.com/investors/investor-relations. The
presentation materials will be available after the briefing and webcast on the
Rovio website at www.rovio.com/investors.
ROVIO ENTERTAINMENT CORPORATION
Board of Directors
Distribution: Nasdaq Helsinki, principal media, www.rovio.com
Rovio in brief
Rovio is a games-first entertainment company that creates, develops and
publishes mobile games and acts as a brand licensor in various entertainment and
consumer product categories. The Company is best known for the global Angry
Birds brand, which started from a popular mobile game in 2009. Today, the
Company offers multiple mobile games, has produced The Angry Birds Movie, which
opened number one in theatres in 50 countries, and licenses the Angry Birds
brand to consumer products and other entertainment content. Rovio's operations
are divided into two business units, Games and Brand Licensing. Rovio is
headquartered in Finland and has offices in Sweden, the United Kingdom, China
and the United States.
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