Stock Exchange Release
October 27, 2023 at 9:00 a.m. EEST
Rovio Entertainment Corp.: Q3 2023 interim report: SEGA acquired 97.7% of Rovio – the redemption procedure of the remaining shares started
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 to EUR 5.8 million and consisted of advisory costs related to the acquisition by SEGA of EUR 10.4 million, one-time long-term incentive and bonus scheme settlements of EUR 1.9 million, and changes in the contingent liability of the Ruby Games acquisition of EUR -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 to EUR 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, the New 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 to EUR 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%