Saturday, August 18, 2018
 
 
Company News: Page (1) of 1 - 05/17/18 Email this story to a friend. email article Print this page (Article printing at MyDmn.com).print page facebook
Rovio Entertainment Corp.: IMPROVED PROFITABILITY, STRONG GROWTH IN ANGRY BIRDS 2
By Globenewswire

ROVIO ENTERTAINMENT CORPORATION   STOCK EXCHANGE RELEASE   MAY 17, 2018 AT 08.45 am EET

IMPROVED PROFITABILITY, STRONG GROWTH IN ANGRY BIRDS 2

January-March 2018 highlights

  • Rovio's revenue decreased by 0.9% to EUR 65.7 million (66.3). Growth in comparable currencies was 12 - 14%
  • Games segment revenue grew 0.4% to 56.8 million euros (56.6). Growth in comparable currencies was 11 - 14%
  • Angry Birds 2 gross bookings grew 8.5% year-on-year; Growth in comparable currencies was 18 - 26%
  • Brand Licensing: revenue declined 8.8 percent to 8.9 million euros (9.7). Growth in comparable currencies was approximately 7%
  • Adjusted operating profit increased to EUR 9.6 million (5.3) and adjusted operating profit margin increased to 14.6 % (8.0 %)
  • Earnings per share increased to EUR 0.09 (0.05)
  • Net cash flows from operating activities increased to 10.5 million (5.2)
  • Games global quarterly ARPDAU increased to EUR 8 cents (6). TOP 5 games quarterly ARPDAU increased to EUR 14 cents (11)
  • User acquisition investments decreased to EUR 14.6 million (16.4), or 25.7% of the Games segment's revenue (29.0 %)

Key figures



  1-3/ 1-3/ Change, 1-12/
EUR million 2018 2017 (%) 2017
Revenue 65.7 66.3 -0.9% 297.2
EBITDA 14.3 10.2 39.8% 60.0
EBITDA margin 21.8% 15.4% - 20.2%
Adjusted EBITDA 14.6 10.2 42.9% 64.5
Adjusted EBITDA margin, % 22.2% 15.4%  - 21.7%
Operating profit 9.2 5.3 74.8% 31.4
Operating profit margin, % 14.1% 8.0%  - 10.6%
Adjusted operating profit 9.6 5.3 81.2% 35.9
Adjusted operating profit margin, % 14.6% 8.0% - 12.1%
Profit before tax 9.0 4.8 88.4% 26.6
Capital expenditure 0.3 3.7 -91.3% 8.5
User acquisition cost 14.6 16.4 -11.0% 69.6
Return on equity (ROE), % 25.7% 24.8% - 23.4%
Net gearing ratio, % -66.4% -12.6% - -62.9%
Equity ratio, % 81.5% 66.6%  - 77.9%
Earnings per share, EUR 0.09 0.05 90.7% 0.27
Earnings per share, diluted EUR 0.09 0.05 90.7% 0.27
Net cash flows from operating activities 10.5 5.2 102.9% 59.6
Employees (average for the period) 385 457 -15.8% 416

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 below. The quarter on quarter change percentages with comparable exchange rates have been calculated by translating the reporting period figures with the average USD/EUR exchange rates of the comparison period. The change is presented as a range, as some of the distributors USD-denominated payments to Rovio originate in end-customer transactions in various countries and local currencies.

Kati Levoranta, CEO:

Rovio's first quarter was in line with our expectations. Our top game Angry Birds 2 achieved record revenues and Angry Birds Friends continued its steady performance. Revenues from the Angry Birds movie grew somewhat year-on-year and although we got some headwind from the currency exchange rates, our profitability improved considerably year on year.
We continued to execute our Games As A Service strategy, which means that while we continuously acquire new users, we continue to deliver new updates, contents and game events to our existing users to retain them in our games longer and to improve conversion of in-game purchases that e.g. enable access to new virtual goods or faster progress.

Game development requires continuous innovation and passion: Our creative, multi-talented teams produce compelling gaming entertainment and I believe that Rovio has the talent, expertise and passion required to stay at the leading edge of games development. We have currently ten games in different development phases, one of which is in soft launch.
The cost for digital marketing in the industry continued to be high during the first quarter. We strive to grow our revenues and increasing investments in user acquisition through improving the performance of our key games and efficiency of our marketing. We are also pursuing revenue growth by extending the payback time range of user acquisition investments to 8-12 months from the previous 8-10 months, starting in Q2. This may have a negative profitability effect in the short term while our full year outlook remains unchanged.

The sequel of The Angry Birds Movie is planned to enter theatrical distribution in September 2019. The Angry Birds Movie 2 cast includes the familiar stars from the original movie as well as it introduces new talent from Hollywood films and TV series such as Black Panther, Crazy Ex-Girlfriend and Ocean's 8. The original Angry Birds Movie helped our Business Licensing Unit's partners to sell 260 million licensed products in 2016 and 150 million in 2017. We believe that the sequel will bring further opportunities to license our brand to both new and existing consumer products and content licensing partners.

One of the reasons we stated when going public was our aim to participate in the consolidation of the games industry. This is on our agenda continuously and we are actively scouting for targets having a good strategic fit.

Exploring and taking advantage of future gaming technologies and platforms is another essential part of our strategy: we have recently released an "Angry Birds for Messenger" game on Facebook's new Instant Games platform. Movies, musical and TV entertainment are increasingly being consumed over streaming services. Hatch Entertainment, an 80% owned subsidiary of Rovio, is developing an equivalent streaming service for mobile games and is currently available as a beta test version in 18 European countries and offers over 100 mobile games. The service is actively developed based on user feedback and the technical performance has been improving continuously. Adapting other technological development is high on Rovio's agenda and, for example, we have teamed up with Magic Leap as an early access partner developer regarding a new form of augmented reality (AR) applications. 

Outlook for 2018 (unchanged)

Rovio maintains its full year outlook as reported in the 1-12/2017 financial statement bulletin. Rovio Group revenue is expected to be 260-300 million euros in 2018 (297 million euros in 2017). Rovio's profitability as measured by earnings before interest and tax excluding items affecting comparability is expected to be 9 to 11 percent (adjusted operating profit margin was 12.1 percent in 2017)1.

Basis for outlook

In 2018, Rovio Games business will focus on continuing development of its live game portfolio according to the Games-as-a-Service strategy, profitable user acquisition and development of new games. The user acquisition investments are expected to be around 30 percent of Games revenues for the full year, however, the amount may vary depending on development of the games' monetization and the level of competition in the market. The cost per acquired user has risen significantly in the market.
Brand Licensing segment revenues are expected to decline by 40% in 2018. The decline is due to the declining profile of the Angry Birds movie. The consumer products revenues are expected to be at similar level as in 2017. The focus of Brand Licensing in 2018 is on preparing the license portfolio for 2019 and the Angry Birds movie sequel.
During 2018, Rovio estimates to invest 10-15 million euros in its subsidiary Hatch Entertainment Oy that develops cloud streaming based game service (5 million euros in 2017). Approximately half of the investment will impact Group profit, ie. an impact of 2-3 %-points to the expected EBIT margin, and half will be capitalized development costs and advance payments. Hatch represents one possible way to play mobile games in the future. By investing in the development of Hatch's streaming service Rovio diversifies its portfolio, aims to utilize the possibilities that new technologies offer for games business, and implements company's strategy to explore the future of gaming alongside the continuous free-to-play games development.

Briefing and webcast:

Rovio will organize a briefing on the first quarter 2018 financial results for media, analysts, and institutional investors on May 17th, 2018 at 15:00 - 16:00 EET at the Rovio headquarters: Keilaranta 7, Espoo. Registration for attendance is kindly requested in advance by e-mail to [email protected]. The briefing (held in English) can be viewed as a live webcast, and subsequently as a recording on the Company's website at www.rovio.com/investors

Further information:

Kati Levoranta, CEO tel. +358 207 888 300 (switchboard)
Rene Lindell, CFO, tel. +358 207 888 300 (switchboard)
Mikko Setälä, Executive Vice President, Investor Relations tel. +358 40 485 8985

ROVIO ENTERTAINMENT CORPORATION

Board of Directors

Distribution:
Nasdaq Helsinki Ltd
Main media
www.rovio.fi

About Rovio:

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.




1 In the Q4/2017 financial statement bulletin released on 2nd March, 2018, Rovio reported as the comparison figure the unadjusted earnings before interest and tax, which was 10.6 % of revenues in 2017.


Attachment


Page: 1


 





About Video Based Tutorials - Contact Us - Advertise With Us - Privacy Guidelines