Hello everyone, thank you for joining Rovio Earnings Audio Cast. My name is Veli-Pekka Puolakanaho, I am the Head of Investor Relations at Rovio. Today we will go through Rovio's interim report for Q1 2021. With me are Alexandre Pelletier-Normand, Rovio CEO, René Lindell, Rovio CFO. We will have a Q&A session after the presentation. To ask your questions, please dial in the conference call numbers shown on the screen and use the pin. Alex, the floor is yours. Thank you very much, Veli, welcome to this call everyone. Thanks for joining us today. Let me start as per usual to go through our highlights for the Q1 2021 quarter. The first month of the year unfolded broadly as anticipated, and to resume this, they were punctuated by three main themes. Our portfolio of live games performed well. We prepared during the quarter for the global release of a new game, which was launched earlier this month as expected. That's Darkfire Heroes, and we have quite an exciting pipeline of emerging titles with actually two new games in soft launch. Let's jump right into the details. Our games revenue grew 3% year-over-year, and game gross booking by 10% in comparable currency. This was driven by a strong performance of our live games, namely Angry Birds 2, Angry Birds Friends, and Small Town Murders. The profitability was healthy during the quarter. Our adjusted EBIT margins was 15%. This represent an EBIT margin decline year-over-year, and it's attributed to, well, first of all, an increase in our operating expenses. We have two additional studios with Montreal and Copenhagen now, also an increase in marketing expenses. The reason for this UA increase were mainly twofolds. First of all, opportunities created by the improvement in the performance of our games, for instance, Small Town Murders, also we ramped up our marketing activities for the global launch of Darkfire Heroes. Speaking of Darkfire Heroes, it did hit global launch on April 15th, and this release is meaningful for us because it marks our entry into a new segment of the market, real-time RPG, and this enlarges our market footprint. It is also the first time that we have a release from an acquired studio, so this one from Copenhagen, which became part of Rovio last summer. We're very happy, as reported last time, with the collaboration between this studio and Rovio. We also released two new games in soft launch, so Angry Birds Journey in January, and then earlier this month as well, our puzzle studio released a game called Supernatural City in soft launch, but I will talk more in details about those in a few slides. The main point to realize in this slide is that we continue to see strong and reliable performance across our live games. Angry Birds 2 has continued to show great stability and grew slightly year-over-year. It's also a great example of longevity of our live games. In fact, the game crossed last Friday the half a billion euro mark in cumulative gross bookings since its launch in 2015, and it's still going strong. It was downloaded more than 400 million times for launch, and also to show how engaged players are, there's actually about 80,000 people that downloaded the game on the first month of availability six years ago, and they're still playing today. That's why the team is really focusing on bringing new content and progression vector, especially for those deeply engaged players. Angry Birds Dream Blast has also been stable in improving its monetization profile following a large update that happened at the beginning of the quarter. We keep on improving it, especially the retention of the game. We're keeping it fresh with new offers and special events. Angry Birds Friends continues its impressive growth. In Q1, the game grew 44% year-over-year, was the best quarter of the game since Q3 2018, over two years ago. The game continues to scale completely organically. There's no UA, and we're not out of ideas on how to improve it further. We're working right now on early retention. We actually have about 70,000 new players downloading the game every day, and we want to make sure that we keep them in the game. To show the very deep engagement of this game, it's interesting to note that about 30% of players of these games actually joined over two years ago. Small Town Murders also continues to grow. It generated, as you see in the slide, EUR 3.9 million in the quarter in gross booking, and today the run rate is approaching EUR 5 million. It finished the quarter with a record week in revenue, and it was also the seventh consecutive week of growth for the game. Since the beginning of Q2, we actually continued to see growth in the game. This performance increase can be attributed to the new end game loop. This is something we do for the most engaged players. Those players actually played close to 3,000 levels. This is also linked to the AI-powered dynamic tuner, which basically adapts the difficulty level to the profile and the actions of the players. This is a feature that we deploy in Small Town Murders, but also in other of our puzzle games. This is work in progress. We continue improving it as things go. The rest of the catalog has declined year-over-year but remains stable quarter-over-quarter. As a conclusion of this slide, we see that the level of quality of our games create deep engagement with players, many of them joining for years. As a result, the performance of our live game is strong and reliable. Now let's go over the emerging titles. There's been a lot of activity recently. Angry Birds Journey continued its progression since the soft launch that started in January. As a reminder, this is a more casual take on our classic slingshot design. We're going after a broad audience with this game, and it's proceeding as planned. Currently, we're in the retention phase of soft launch, and it's the third of four major phases of soft launch. We also started the soft launch of Supernatural City in April, and this is a good example of the game fitting into a genre mastery strategy because it's the second iteration for a narrative puzzle game, and this allow us to improve on the learning that we had mostly from Small Town Murders. It also allow us to develop much faster. In this game, you're playing Ellie. It's a young woman with supernatural powers searching for her missing father. Supernatural City is targeting a wide casual audience. It is a little bit different than the one of Small Town Murders. This is helping us improve our footprint on the genre. Finally, as stated earlier, Darkfire Heroes reached global launch mid-April. It is too early to talk about the scale that we're going to be able to reach with the game. Already there are some interesting data points. The game has been received with great reviews since its launch. We've seen very engaged players. We have 10,000 players that joined our official community Discord. Basically, they're talking about the game in the game and outside the game. There's about 40 minutes of gameplay on average, four sessions per day. This is actually growing on a daily basis. The UA strategy for this one will be to scale gradually, given the fact that this is a new genre for us. We're going to learn along the way on how to market and operate this type of game, and this is totally normal. This is part of the process. Far, it performs according to plans. Of course, I'll be able to report more on this on the next call. This is our usual slide showing in a glance our list of studio and the status of project they work on. What does not change in this slide is our commitment to genre mastery. Everyone there, as you see, focuses on what they know best. This is an important part of our strategy. With that being said, what is changing is the evolution of a pipeline. We now have eight games that are being maintained in either growth or earn phase, and just a year ago, we had six. Right? Adding their games provide a more stable footprint on the market. We also have eight games in different stages of development. Three of them are in soft launch, Hardhead Squad, Angry Birds Journey, and Supernatural City, which means that five others are in earlier phases of development. We have five studios across the world, and we are looking to add more through M&A, as we did last year with Copenhagen. All right. In the last call, I spent quite a lot of time to go over the strategy. We still feel that it is very valid and relevant today and adapted to the market. Today in this call, I want to talk more about the progression in the execution of that strategy, and I'm happy to report that things have been going according to plans. There's three data points that I want to talk about to illustrate this. The first one is that we spoke previously about using M&As to enlarge our market footprint with new IPs and genre. Well, today we released Darkfire Heroes. It's a new IP within the RPG genre, which is also the first game we released from an acquired studio. We also talked about building on what we know, what we call the genre mastery. This remains a cornerstone of our strategy, and today we released Supernatural City in soft launch, and this is our second narrative puzzle games. This is not new to us, and we're progressing fast thanks to this. Three, we highlighted the importance of the Angry Birds brand in a world where paid UA is growing. Today we have a new game with Angry Birds Journey in soft launch that will benefit from using the brand. Also our Stockholm studio is working in taking advantage of the Angry Birds IP as part of their advanced casual strategy. Finally, we also talked about in the past of Apple's ATT requirements. This started being enforced on April 26th, and we were ready. We now have an even larger number of games that are stable or growing and that are accessible to wide audiences. This sets us in a good position to take advantage of this paradigm shift in advertising. In conclusion, we're happy about how fast our team's progressed during the quarter. We certainly feel the momentum, and it remains our firm ambition to keep on executing on the strategy like we did and accelerate even further if we find new growth vector. René? Thanks, Alex, and good afternoon to everyone on the call. Let's take a deeper look now into the Q1 financials. As Alex stated, the year has started with good momentum. While our reported revenues in the first quarter increased by 0.7% and our games reported revenue grew by 3.4%, both the games revenue and gross bookings in comparable currencies saw a strong growth of 10% year-over-year. The growth in the quarter was driven by the continued good performance of Angry Birds Friends, as mentioned, grew an amazing 44% year-over-year, and the addition of Small Town Murders in June 2020 as a new growth avenue in our portfolio, and we have continued to scale up the game since the launch during the quarter and also during the last few weeks. The continued good performance of our largest live games, Angry Birds 2 and Angry Birds Dream Blast, are the cornerstones of the portfolio. The year-on-year decline of brand licensing revenues is due to both consumer products and content licensing. The revenues of the movies, which are reported in the content licensing business, are expected to decline over time, and the trend in Q1 follows quite closely to our expectations. Consumer products is somewhat impacted by COVID-19 pandemic. We see this in sales across most of the categories, but especially in location-based entertainment where the physical restrictions do have an impact on the business, as many activity parks around the world are unable to open according to their previous plans. The profitability in Q1 was at a good level at 15% adjusted EBIT margin. This was expectedly a bit lower than last year as we've gradually increased UA in each of the past four quarters as we gradually scale up Small Town Murders. Specifically in Q1, started to ramp up UA in preparation for the launch of Darkfire Heroes in April. It's good to note that the weak US dollar versus euro, compared to last year, naturally also impacted reported EBIT and EBIT margin in this quarter. Our operating expenses were somewhat higher year-on-year as we now have two additional game studios and we have added more talent to new game development. At the same time, the other segment costs have come down year-to-year due to renewed focus and restructuring of Hatch Entertainment. Moving on to user acquisition. In Q1, the UA investments were EUR 17.3 million and amounted to 26.7% of game revenues, thus continuing the incremental increase that we've done on the past few quarters. The steady increase is a consequence of both improving game and UA performance and gradually scaling up Small Town Murders. As mentioned in Q1, the increment is specifically related to preparing for launch of Darkfire Heroes in April. In our UA investments, we continue to target 12 months payback. Looking ahead at the second quarter of this year, we see that our UA investment is likely to grow close to 30% level of games revenues as we've just released Darkfire Heroes, and we are scaling up this game as planned, and naturally, this increases the UA investments for that game. On the overall UA level, we see an increase if we can keep everything else performing at the current level. If you look at how user acquisition was used across our portfolio, no big difference there from the previous quarter. About 73% invested in our four growth category of games, mostly for Angry Birds Dream Blast and Small Town Murders, and 27% in earn games, of which majority for our largest game, Angry Birds 2. Looking at the cash flow for the quarter, the Q1 operating cash flow was EUR 2.5 million, which was a bit lower than would be expected given the good profit level. The reason for this is a normal variance in the change in working capital related to receivables from the major app stores. This outstanding receivable or gap in the cash flow is then collected in the month of April. The total cash balance grew to EUR 141.2 million. Finally, our stated outlook for 2021 remains unchanged. I want to highlight a few pointers in the outlook. We still see a lot of changes, growth, and opportunities in the market. In our core operations, we continue improving on our live games and we launch new innovative products, as we've just recently done with Darkfire Heroes. While the UA landscape is changing due to the ATT, we are both ready for this change and are prepared to move on any opportunities that open up while we continue to show diligence in our UA spending. We also emphasize that when we launch a new game, it's natural to scale up the game through user acquisition while the revenues are built up over time, and this may have implications on the short-term profitability. Thank you, Alex and René. If you want to ask questions and have not already dialed in to the conference call, please do so now. To ask your questions, dial in the conference call numbers shown on the screen and use the pin. Please, operator, we are now ready for questions. Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero one on your telephone keypads. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes from the line of Pete Kujala of SEB. Please go ahead. Hi. Pete Kujala calling from SEB. Can you hear me all right? Yes. Excellent. Starting on the broader market environment in Q1, would you say that the behavior of players was quite normal? Was there something, for example, related to COVID that we should take into consideration when we are looking at the quarters ahead? If I understood the question well, you're asking about the behavior of players during the quarter one, generally speaking, not necessarily to one game, right? Yeah. Yeah. Not really. When we look at what happened, for instance, in Q2 of last year when the beginning of the shelter at home situation, the behavior of players went back to normal during the year afterwards. What we see during Q1 was what we would consider normal behavior. Yeah. All right. That's good. Understood. René mentioned about a 30% UA level, but I'm just going to ask, maybe I missed it, but was this for Q2 or for the rest of the year as a whole, the 30% kind of level? Yeah. This was specifically for the upcoming quarter, Q2, when we are ramping up Darkfire Heroes specifically. For the rest of year, of course, it's a dynamic environment, and we'll strive to find avenues of growth through UA across our live games. Yes. Very clear. Thanks. On Q1 user acquisition usage, in the grow category, what's the main driver? Was Darkfire Heroes, or in other words, did you increase UA spending for Angry Birds Dream Blast in Q1? In Q1, the biggest incremental increase was definitely Darkfire Heroes, which entered where we started to ramp up already during the soft launch phase to prepare for the scale-up. Other than that, for the other live games, there were no major shifts. Yeah. Thanks. Then last one from me. Can you remind us or me how long was Sugar Blast in soft launch? I'm just trying to figure out, you have a couple of games in the soft launch pipeline where I think the timing for the soft launch might be quite small. Angry Birds Journey and then Supernatural City. Is it possible that these games are actually going to come out already this year? Yeah, to answer your question directly, for Sugar Blast, it was about three months. When we release a game on the market, there's different steps, as I kind of hinted towards during the presentation. The reality is that we don't know exactly when it's going to come out, right? It really depends on how the games are performing in those different steps. Hard to tell how long it takes. Usually when it's a game that falls into a category that we know well, it can go faster. When it's a new genre for us, it can take a longer period of time. Yeah, there's no fixed amount of time. Understood. Many thanks for this. That's all from me. Thank you. Just to remind everyone, if you would like to ask a question, please press zero one on your telephone keypads. We have no further questions at this time. Please go ahead, speakers. Thank you for the call and the questions. We will be back in the next earnings call on August the 12th. That's all for now. Thank you.