Good afternoon, everyone, and welcome to Rovio's first half and second quarter 2022 earnings audio cast. My name is Timo Rahkonen. I'm Vice President of Investor Relations and Corporate Strategy at Rovio, and I will be your host for today. In today's audio cast, we will go through Rovio's first half and second quarter 2022 financial results. With me here in the studio are Rovio CEO Alex Pelletier-Normand and CFO René Lindell. After the presentation, we will host a Q&A session. In order to ask your question, please dial in to the conference call number shown on the screen. Your question will then be placed in the queue and asked in order of arrival. Let's kick off now. Alex, please continue. Thank you, Timo. Good afternoon, everyone, and welcome to this Q2 earnings call. Thank you for joining us this afternoon. As per usual, let's start with the quarterly highlights. I'm proud to report that we executed well in a challenging environment in the second quarter and managed to significantly outperform the market. Overall, Rovio had a good performance and our group revenue increased double-digit year-on-year. In comparable, meaning without FX change and Ruby Games, group revenues were virtually flat. This is an encouraging performance given that the U.S. mobile gaming market is estimated to have declined 18.8% year-on-year according to data.ai. Games gross booking increased 8.8% in reporting currencies, but declined 6.5% in comparable currencies as we benefited from a strong U.S. euro FX. We're now seeing in Q3 improved momentum in gross bookings for our largest games, especially Dream Blast, but also Angry Birds 2. We believe the reasons for the headwinds in the market in Q2 to be similar to those we highlighted in the Q1 call, namely the normalization of playing and spending habits after the exceptional growth created by the lockdowns in 2021, and then Apple's privacy policy changes reducing the ability to target users precisely. This quarter, a third macroeconomic factor had an impact on the market's dynamics. The rising inflation affected both consumers and companies alike. Players' willingness to pay for content was somewhat reduced, but also advertisers on mobile lowered their budgets. This had a negative impact on advertising revenues, but the lower demand for inventory also created opportunities in user acquisition. Our profitability was good in Q2. Our group adjusted operating profit reached EUR 11.3 million, which is significantly higher than Q2 2021 and is the result of higher revenues and relatively lower UA investments. We also saw good performance of our top games with Angry Birds 2 and Angry Birds Friends growing year-over-year by respectively 7% and 10%. Ruby Games gross bookings increased 23% pro forma, but it was a slower quarter than Q1 for them. As hyper-casual games largely monetized from advertising, they were more affected by market conditions. On the brand development side, we had an exciting partnership with Minecraft, releasing an Angry Birds DLC in May, and the second season of Angry Birds: Summer Madness started streaming on Netflix during the quarter. We held in May our Capital Markets Day where we updated our long-term financial targets and we presented our growth strategy, including our plan, our plans for the Angry Birds brand and our internal growth platform called Beacon. We will review some of the highlights at the end of the presentation. Finally, we followed our pledge to reach carbon neutrality, and I've now compensated all of our emissions for the year 2021. We will now start planning the next steps in our climate efforts to go beyond carbon neutral. Let's now cover Summer Madness. The second season of the show started streaming on Netflix in June. This is very exciting for us because it's yet another narrative arc in what we call the Angryverse, which is like the world in which all of the different version of our characters exist. Adding a new take on the brand help us appeal to different audiences and make the brand even more accessible and inclusive. The new characters and stories are helping us surprise and delight fans, old and new alike. Having the second seasons reflect the fact that the first one has been appreciated by the fans. While we don't have the detailed numbers from Netflix, we know that the first season hit the top 10 in the kids category on Netflix in 55 territories in the opening week. Season 1 and 2 are currently streaming worldwide on Netflix. During the quarter, we appointed Andy Muesse as Head of Studios. Andy joined us in 2020 and was leading the Stockholm studio in charge of our biggest game, Angry Birds 2. They're currently also working on the much-anticipated game, Bad Piggies 2. The studio performed well under his leadership, and we believe that his deep understanding of games and the market will elevate the portfolio strategy across the company. Our game studios will now report to Andy, and we open the position of Stockholm studio head to replace him in his former role. Andy is now also part of Rovio's leadership team. If we look now at the performance, game by game, I am encouraged by the reliance of the portfolio in such an economic environment. Angry Birds 2 had a solid quarter, growing 7% year-on-year, and it also grew 8% in comparable currencies in the U.S. The game team and the fans celebrated the seventh-year anniversary of the game this summer. It was marked by the release of two fan favorite features, one of them called Pick Your Flock, and the other one called Extra Birds Hat. Going forward, you can use any birds you want in the levels and collect hats for them. I think it's truly remarkable and humbling to see the fans' engagement and the collaboration we have with them in driving the game forward. More highly anticipated surprises for the game are being worked on for the rest of the year. Angry Birds Dream Blast declined 6% year-on-year. That being said, we see positive momentum in Q3 so far. The game is very rich in content, and we have now passed the bar of 10,000 unique and crafted levels for players to enjoy, and the team will celebrate this milestone together with the community with a game event running at the end of August. Angry Birds Friends continue its progression, growing 10% year-on-year. The team added more fun levels mechanics over the summer that were well-received by the players. They also see positive momentum in Q3 in their daily challenge feature, adding more competitive element to our fans. The team continued to improve the early game to serve the new players better and ease their way to the competition part of the game, which is the most fun part of Angry Birds Friends. Angry Birds Journey revenues were lower in this quarter from the launch peak of the first quarter. The user acquisition level was significantly lower in Q2 after the launch, and the team is now seeking new growth paths with a better, more dynamic action phase and a deeper meta game to improve players' engagement. Overall, we see good resilience in the portfolio and growth opportunities in our top games. Few words now about the emerging titles, starting with Moomin: Puzzle & Design. We made a marketing test in Japan in June for a limited time and with limited content to measure the early retention of the game and the price to acquire users. It's good to remember that Japan is the main market we're targeting with this game. The result of the tests were promising, and the game is now removed from the stores. The team is adding content for the next phase, looking at the longer-term retention, which will be coming soon. Some news as well about Hunter Assassin 2 from Ruby Games. As you might know, the game was tested in soft launch with good early retention numbers. Longer term retention was not good enough, and the game became repetitive after a while. To fix this, the team added a competitive multiplayer mode, which I played and is very fun, and we believe it will increase engagement. They are also adding a deep meta game with RPG element, and we expect those new modes to be tested on the market by the end of Q3. Last May, we gathered with some of you in Stockholm for our Capital Markets Day. It was great to get to chat with participants in person after such a long period doing everything remotely. We updated on our long-term financial targets as follow. We aim to grow our revenues faster than the market. Our adjusted EBITDA will grow in line with long-term revenue growth. The dividend payout will be approximately 30% of adjusted net profit. We also used the opportunity to update on our strategy, which we believe is well- adapted to the market we're in right now. We continue to focus on brands, Angry Birds and others. We also want to focus on teams on projects that we think can have a big impact. Our attempts at releasing new games are ambitious, both in terms of innovation level and financial targets. Also, all of our studios are now working on widely accessible casual games. Finally, we continue to invest in our Beacon Growth platform to scale our internal gains, and this is also an advantage when speaking with potential M&A targets. Concretely, what this means right now to enable growth is that we're doubling down on our top live games. We're increasing the investment on Angry Birds 2, Angry Birds Dream Blast, and Angry Birds Friends, for which we believe the best is yet to come. We continue to invest in new games, of course, and finally, we're also taking advantage of the market shifts in talent acquisition and M&A. The ongoing changes in the industry has already given us opportunity to strengthen our Rovio flock with amazing new talent. The full material for our CMD can be found on our website in the investors section. Now to the financial review section, René. Thank you, Alex, and good afternoon to everyone on the call. In the second quarter of the year, we saw a 14% growth in our reported revenues. This growth was driven by the consolidation of Ruby Games, launch of Angry Birds Journey in the beginning of the year, and a favorable U.S. dollar to euro exchange rate, as well as the good relative performance of our top live games in a tough market condition. On a comparable basis, excluding Ruby Games and at constant currency, the top line saw a slight decline of 1%. During the quarter, our hyper-casual studio, Ruby Games, grew 23% on a pro forma basis. The Q2 adjusted operating profit was EUR 11.3 million, and the adjusted operating profit margin was 14.3%, which was significantly higher than one year ago. The higher profit was due to our higher top line versus one year ago, while the user acquisition absolute level was similar in the two time periods. EBITDA improved in the quarter, and it reached EUR 15 million and 19.1% EBITDA margin following the EBIT trajectory. Looking at the year- to- date, the first half year revenues, we are 20.2% ahead of last year on reported revenues. The cumulative growth this year is due to the same factors as mentioned for Q1. Especially in Q1, we had a very successful launch of Angry Birds Journey that accumulated strong top line for the full year. We had a favorable currency overall and strong performance across our portfolio. On a comparable basis, the growth was 5.3%. The first half year adjusted operating profit is also ahead of last year's numbers with EUR 21.2 million and 13% margin. Similarly, our EBITDA improved to EUR 28.6 million and 17.5% margin during the first half of the year. Looking at user acquisition, our investment in the second quarter amounted to EUR 20.9 million, which represented 27.5% of Games revenues, which was in the midpoint of our guidance range of 25%-30%, which we gave during our last earnings call in April. The UA was thus at absolute level similar to last year, but lower than in Q1 this year, as we had anticipated when we informed that we are lowering the UA for Angry Birds Journey after the very active launch months. It was a challenging quarter for user acquisition overall. However, towards the end of the quarter, and now in the beginning of Q3, we are seeing somewhat improved performance. For example, Angry Birds Dream Blast is running a UA at a level which we have not seen since its launch year in 2019. The operating cash flow in the second quarter continued strong at EUR 15.3 million, reflecting the high level of EBITDA in the quarter. The cash balance grew to EUR 184.3 million. On April 20th, a dividend of 0.12 EUR per share and total amount of EUR 8.9 million was paid to our shareholders. Next, a few points on our audience network and our group level player statistics. The daily active users declined to 6.7 million from the last quarter's high of 7.3 million. However, this is still about 60% higher versus one year ago. Largest decline in users was naturally for Angry Birds Journey, as expected from its lower level of UA. Unique payers declined during the quarter as well, which also reflected the challenges in the UA during the quarter and the level of UA and the market situations Alex mentioned earlier. The monthly unique payers declined across all of the top games, but relatively more in Angry Birds Journey, as could be expected from its UA level. Moving on to monetization metrics. We saw a quite stable average revenue per daily active user, while the monthly average revenue per unique payer grew to a record level of EUR 45.5. This reflects also the fact how well the existing players are engaging with our games and monetizing. Finally, our 2022 outlook remains unchanged. As earlier this year, we are giving additional information regarding our expected level of UA during the ongoing quarter. During Q3 in this year, we expect the UA investments to be in the same range as in Q2, meaning 25%-30% of Games revenues. When we look at how the quarter started, we are trending at close to the midpoint of that range. Okay. Thank you, Alex and René. We are now ready to move on to the question. To ask your question, please dial into the conference call number shown on the screen if not done so already. Operator, we are now ready for questions. Thank you. To ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name is announced, you can ask your question. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel. Our first question comes from the line of Veikko Silvasti of Danske Bank. Please go ahead. Your line is open. Hello, everyone. It's Veikko Silvasti from Danske Bank. First question regarding the KPIs of your player network. What is driving the weakness, especially in monthly unique payers? Volatility seems awfully high. It's normally not that high, and now we are seeing this monthly unique payers of top five games back at the levels of 2020. What's driving this given that the key games have been so resilient and strong recently? Yeah. I think, as said, one of the biggest, of course, deltas there is Journey, which went very high in Q1 and then came back in Q2. I think in the other games, kind of the softness in UA market, especially in Q2, is visible and the fact that more reliant on the current existing players, that they keep on engaging. A bit of challenges, I think, to reach new payers in the quarter, which does seem to have been now improving a bit at the end of the quarter and early in Q3 as well. I think it does reflect kind of the revenue when you look at the comparable numbers in dollars versus one year ago. I think it's the MUP in that perspective and is in line with kind of what you would expect from a top-line perspective. Mm-hmm. Okay. Now that you're saying that the UA market is looking better, especially for Dream Blast, we maybe can expect that also the monthly unique payers and the KPI should be improving from Q2 levels? Yeah, naturally we are always interested in the top line performance and how we perform from that perspective, and that Dream Blast is looking promising. It has been growing its UA basically week- by- week for some months now. As said, it's running in a very good level and let's see where the quarter ends up. And if the MUPs follow that also in the quarter. I kind of would expect that to happen, l et's see. Q3 we are only halfway there, so there's a bit of a way to go still. Exactly. Moving on or continuing basically on the UA. First of all on this the U.S.-wide TV campaign you did in Q2, did it reach your expectations, and can you describe what kind of effects did you see from the new kind of user acquisition method? Yeah. I think post-IDFA it was important for us to be able to try and do campaigns like this, top of the funnel. It's obviously very different than what we do normally in digital advertising. Also because those campaigns are quite static, right? In a way you have to decide way in advance what it's gonna be like, and you cannot really adjust it in real- time. You need to have certain commitments. It's way less kind of iterative. For us it's kind of a new. It's something that is new that we have to learn how to do. It's true that for this campaign, we would have expected to have a better reach, to reach more players, and for the followers of the celebrities that we were working with to engage more with the game. There's a lot of learnings that have been done there. But yeah, I would say that it's fair to say that it didn't reach the exact expectations that we had. Okay. Interesting. Probably we should not expect to see similar kind of campaigns in the near future? Well, we're not closing the door, but for now there's no plans at this moment. Clear. On the UA market, the normal UA that you're doing digital advertising and so forth. Have you seen any trends there, let's say, are the CPIs declining or increasing at the moment? Yeah. We need to be very flexible with UA nowadays, having many channels and you know testing our hypothesis on a weekly basis and adjust, right? But we do see potential for more UA right now than we did during the quarter. We especially see it, for instance, in Angry Birds Dream Blast and Angry Birds 2. Yes, there seems to be opportunities in the market for certain networks that we're using. Great. A quick question about the M&A market and how it does look. Have the private market multiples maybe come down or kept on deflating from the elevated levels of 2021? Yeah, I think overall, I think the private market probably works a bit slower than the public market. Of course, there is still a scarcity of you know, high quality targets. I think they will you know, mostly be valued at basically at the future potential regardless of current turbulence. At least from our perspective, we really look at you know, what's the potential of the company and that really what dictates in the value. Naturally, there's more discussions around that for sure in these kind of situations. There are also multiple different things happening. There are more asset sales, there are more restructurings ongoing. These kind of things also you know, open up opportunities. Not every opportunity is an acquisition. It's also, you know, hiring more talent in this kind of situation. Great. Talking about the talent hiring, could you describe how it has gone in the North American studios or, you know, your other studios? You still have two games in soft launch. First of all, have you been successful in recruiting the key talent to your new studios? Secondly, are we going to expect some soft launches from the new studios in Copenhagen and North America anytime soon? It's a very good question because we did see some really good opportunities right now in the market to be able to recruit very talented people. This is linked to what's going on in the market right now. There's a lot of shifts happening, so we were able to take advantage of this. This is true, I mean, not only for the studio in Canada, but also even here in Finland. The recruitment for the Canadian studio specifically are going according to plan. I mean, I guess it's worth noting at this point that we somewhat crystallize or precise a little bit the vision for the Montreal studio. They are really working on expanding the free-to-play expertise into multi-platform approach with PC console focus. They have a good expertise to do this, and we're building on top of that, and they have good talent locally to be able to do this. We're really trying to get in priority the Angry Birds brand outside of only mobile and being cross-platform. That's what they're working on, and we're advancing on this plan right now. Still quite early to talk about the studio in Toronto. They're quite early in the development of their game, but it's advancing. Okay. Interesting. We're gonna see Angry Birds moving on to PC and console with casual title. That's what we're trying to work on. Okay, interesting. Final question for me. Angry Birds Journey, what kind of plans you have to improve the run rate? What kind of run rate it's running at the moment? Any commentary on this? Yeah. What the team is working on right now, it's really twofold. They're obviously trying to go back to growth with this game. As you saw, we had a kind of an explosive launch. It was really, really good. Initially we saw good traction in U.S. acquisition, and then we had to reduce the UA budget in the following quarter quite significantly. Now they obviously wanna go back to a growth path. There's many ways that they're trying to do this. One of the ways is just to improve the levels themselves, but more precisely on how those levels feel depending on the different users playing them, right? For instance, if for you the game is easy, then it's adapting to, you know, to give you a good challenge. They're also adding meta games to maximize engagement as well. Those are the two main factors that they're working on. We have yet to test those changes and see, you know, what they yield in terms of results on the market. We haven't seen a turn yet, but the team certainly focuses on that. Okay. Clear. Thank you. Thank you. We currently have one further question on the phone line. Just as a reminder to participants, if you do wish to ask a question, please dial zero one now. The next question comes from the line of Felix Henriksson of Nordea. Please go ahead. Your line is open. Hi, Alex, René, Timo. Felix from Nordea here. I have a few questions. I can go one by one. Firstly, on your Q3 user acquisition guidance, which seems to indicate stable UA as a percentage of revenue relative to the Q2 level. I'm just confirming that should we read this to be a reflection of the KPIs for Angry Birds Journey not improving and the launch of Hunter Assassin 2 likely not taking place during Q3? Or are you also sort of restraining from higher UA spend due to the market headwinds that you are currently witnessing? Yeah. Thanks, Felix. I can answer that. I think for Q3, we do expect kind of that the current live games are continuing as we have in the portfolio. There are some improvements, as we said, in especially our two top games, and we haven't factored in Hunter Assassin to launch in this quarter. For Journey, we haven't yet started kind of scaling it up again, so we hope to kind of stabilize that. We have reached basically now. We're reaching the profitability levels that we want to have in the UA, and we hope that we can then, you know, start to seeing those improvements later, but not yet factor into Q3. Got it. That's very helpful. Just a clarifying question on when you talk about the improved momentum for both Angry Birds 2 and Dream Blast, does this imply that the games so far in Q3 have grown revenues quarter-over-quarter? Yeah. That's basically what it implies that, you know, for AB Two we see a you know small incremental improvement versus Q2, and then for Dream Blast, it's significantly better than Q2, so looking closer to the Q4 levels last year. That's the positive things about our top two games at the moment. Got it. Thanks. That's very helpful. Last question from me. We saw recently that the Google Play Store announced sort of new policy updates, which is targeting these intrusive ads that are typical to boost monetization in the hyper-casual genre. I'm just curious to hear your thoughts about how you're expecting this to impact the growth outlook for Ruby Games, which has been already affected by Apple's ATT policy changes, as you mentioned. Yeah, I mean, that remains to be seen exactly when we play with a level playing field. I mean, they can be very resourceful and have great ideas, right? That remains to be seen. I would also say that we need to keep in mind that what they're trying to do as well right now, what they're working on, especially if we think of Hunter Assassin 2, is to go in a slightly different direction. You know, we can expect that the bulk revenue for a game like this not to necessarily come from advertising, right? That would be more in-app based. Yeah, there is those different factors playing. Got it. That's clear. That's all from me. Thank you, guys. Thank you. There are no further questions from the phones at this time, so I'll hand the floor back to our speakers. Okay. Thank you everyone for your questions and joining us today. We wish you all a nice rest of the day.