Financial Statement Bulletin 2018

15.2.2019

Record gross bookings for Games in Q4, Angry Birds 2 grew 77% year-on-year

Kati Levoranta, CEO:
Rovio's Q4 2018 ended with record gross bookings of EUR 66.7 million for Games in the last quarter as well as record gross bookings for Angry Birds 2 with an impressive 77% year-on-year growth. The year 2018 was characterised by continuously improving our live games and optimizing user acquisition. Our games monetization improved during the full year and both the average revenue per daily active user (ARPDAU) and monthly average revenue per paying user (MARPPU) reached a new high.

In the full year 2018, Games grew 1% year-on-year on the back of the existing game portfolio and 4% in comparable currencies. We also invested a record amount in user acquisition during the year thanks to the strong performance of Angry Birds 2.

In 2018, the Brand Licensing business focused on building the licensing program for the Angry Birds Movie sequel in 2019. The revenues of brand licensing fell as expected from the previous year due to the large revenue peak from the first Angry Birds Movie in 2017.

Although there were no new game launches in 2018 and we increased user acquisition investments, Rovio achieved a healthy operating profit margin of 11.1%. Rovio's cash flow continued to be strong and cash flow from operations was EUR 42.6 million for the full year.

I want to thank all Rovians for their continuous effort in improving our business performance in highly competitive markets.

In November 2018, Rovio acquired the Finnish mobile strategy game developer PlayRaven. Strategy games is one of the largest genres in mobile games and by joining forces with PlayRaven's talented and skilled personnel Rovio strengthens its know-how and can accelerate its expansion into strategy games.

The year 2019 marks the 10th anniversary of Angry Birds and we are this year aiming to launch at least two new games. One game, our new casual puzzle game Angry Birds Dream Blast was already launched on January 24th, 2019. The game has had a good initial performance, comparable to Angry Birds Match, although we are still ramping up user acquisition.

Our next game launch is likely to take place in the second half of the year. We have strengthened our new games pipeline which consists of 13 new games in development for 2019-2021, of which one is in soft launch. We are naturally also excited for the premier of the Angry Birds Movie sequel in August and expect the movie and surrounding marketing to boost our licensing business as well as drive users to our Angry Birds games towards the end of 2019.

To accelerate its growth, Hatch Entertainment, Rovio's 80% owned subsidiary developing a game streaming service, is seeking external funding and further strategic partnerships. Hence, Rovio is prepared to reduce its ownership in Hatch Entertainment below 50%.

In February 2019, Hatch announced a strategic partnership with Japanese mobile teleoperator NTT DoCoMo. The collaboration aims to bring the 5G cloud gaming to Japan, the third largest mobile gaming market. As part of the strategic partnership, NTT DoCoMo Ventures made an investment into Hatch in the form of a convertible note where the conversion is dependent on the total external funding round.

Full report can be viewed here (published Feb 14th)

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