Good afternoon, everyone, and welcome to Rovio's full year and fourth 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 full year and fourth quarter 2022 financial results and some strategy updates. 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 into the conference call number shown on the screen. Your question will be placed in the queue and asked in order of arrival. This week, on Monday, February 6th, Rovio announced the commencement of a strategic review and preliminary non-binding discussions with certain parties in relation to a potential tender offer for Rovio's shares. As part of its strategic review, the board has decided to enter into preliminary non-binding discussions with certain parties, including Playtika, which on January 19, 2023, announced a non-binding indicative proposal to acquire all issued and outstanding shares of Rovio at a proposed price of EUR 9.05 per share. Pursuant to its fiduciary duties, the board of Rovio continues to explore all strategic alternatives in order to reach the best possible outcome for Rovio and its shareholders. There can be no assurance that the strategic review and the preliminary non-binding discussion will result in any cash or other tender offer, or any other transaction, or the pricing of any such possible transaction. Today, in this call, we will not comment further on this matter or provide anything new compared to the release of February 6. The rest of this call, including Q&A, will focus on the Q4 2022 results. We will release further information at an appropriate time. Let's kick off now. Alex, please continue. All right. Thank you everyone for joining us today again, welcome to our full year 2022 and Q4 earnings call. Let's start by reviewing the highlights of the fourth quarter as well as the full year 2022. The mobile gaming market stabilized somewhat during Q4 after five consecutive quarters of decline. The market grew 2% sequentially in the U.S., Rovio's gross bookings increased by 5.4% in comparable currency. This quarter-on-quarter progression is a good sign, our fourth quarter remained softer than in 2021 and declined by 7.9% year-on-year in comparable currencies. This can be attributed to the decline of hyper-casual revenues and our catalog of older games. If we look at 2022 as a whole, the market declined by 10% compared to 2021. It was the first year we saw a market decline. During that time, Rovio's gross bookings increased by 9.8% in reporting currencies and declined by 2.8% in comparable revenues, clearly outperforming the market. This comforts us in our choices and shows that Rovio's strategy focusing on casual and wide appeal games, coupled with the Angry Birds brand, brought stability in the market facing structural marketing changes and in inflationary headwinds. Throughout the year, we saw opportunities to invest in user acquisition, always following a one-year payback target. We increased our investment for the launch of Angry Birds Journey at the beginning of the year, and also for Angry Birds Dream Blast, which performed well. As a result, our adjusted EBITDA reached EUR 53.9 million, a 1.6% decline compared to 2021. Speaking of Angry Birds Dream Blast, the game reached a new quarterly record in Q4, reaching EUR 21.6 million. All of our top three game reached record high annual revenues in 2022. This illustrates that there are opportunities for us to continue to grow our portfolio of live games. We plan on shifting part of our resources to focus further on those titles showing growth potential during the year. Finally, we ended the quarter with a total of nine games in our development pipeline. If we now look at the performance of our portfolio of games, the first thing that we can see from this is that globally our games gross bookings increased by 10% year-on-year 2022. This was driven by the growth of our top live games, Angry Birds 2, Angry Birds Dream Blast, and Angry Birds Friends, by the launch of Angry Birds Journey at the beginning of the year, and the addition of hyper-casual revenues from Ruby Games. Another point to note is the quarter-on-quarter development in Q4. As noted earlier, we saw signs of recovery during the quarter as the U.S. market increased by 2% and our comparable gross bookings increased sequentially by 5.4%. Q4 was also the third consecutive quarter of growth for Angry Birds Dream Blast, reaching an annual run rate of over EUR 85 million at the end of Q4. It was the best quarter of the game set since launch in 2019, and the cumulative gross booking reached EUR 250 million at the end of the year. We will come back to this performance in the next slide. Angry Birds Friends also grew 4.7% quarter-on-quarter, recovering from the technical issues encountered in Q3. Angry Birds 2 remained stable in comparison to Q3 and declined 3.2% year-on-year, resulting from a slower holiday season compared to 2021. The team is now implementing a plan inspired by Angry Birds Dream Blast with the objective of growing further. The game recently passed the bar of EUR 700 million in lifetime gross bookings. In this slide, we see a monthly breakdown of Angry Birds Dream Blast revenues. The graphic shows a steady scale starting in June of 2022, going from EUR 4.5 million in monthly revenues and reaching EUR 7.7 million in December. Improvements touch every part of the game. The team has been working on new events and new gameplay mechanics, the goal being to keep the game fresh and exciting each time a player launches it. Competitive event types were also added to appeal to an even wider audience. All this positive activity in the game favored partnerships and featuring increasing downloads and DAUs further. The user acquisition efficiency for the game was also greatly improved. We went from using three networks at the beginning of the year and reaching in December 22. The team improved their ability to produce quality creatives, reaching new audiences. All of this led to better returns on our marketing investments, which in turn resulted in a higher scale. This is a great story, and we continue to see ways to improve further. Of course, the Dream Blast team is sharing their learnings with our other live game teams. As part of our strategy of doubling down on live games, we plan on releasing this year Red's Club. This initiative is a loyalty program, including a web shop that we call Red Shop, a common Red ID across games to save progress, and the ability to play certain games on the web. Our goal is to offer our fans a centralized way to interact with our different offers and have access to content they would not otherwise. For instance, special offers covering multiple games. We believe that this type of fidelity program bringing exclusive content to engaged players will also reflect positively on our overall network retention. Red's Club will have a phased rollout starting in Q2. The pipeline of new games remains similar to Q3, with nine games in development and four in soft launch. Our game Bad Piggies 2, being developed by our team in Stockholm, is approaching its soft launch window as well. We also expect the next soft launch phase for our Moomin game, looking at long-term retention in the Japanese market to start during the quarter. Sustainability remains at the heart of our operation. As we begin 2023, we want to highlight certain initiatives we're working on and that will continue to put Rovio at the forefront of the industry in this increasingly important topic. Our three areas of focus remain the same, as you can see on the left side of the slide. Regarding safe and responsible gaming, in order to attract the widest possible audiences in our games, we want to create inclusive experiences that celebrate diversity. In 2023, we will focus on supporting our new games in their character creation and help live games to create more inclusive events and campaigns. We will also publish the inclusive design Playbook internally and externally to help teams around the world to do the same. Regarding people and society, we appointed the head of diversity, equity, and inclusion to focus on driving diversity at Rovio. Their role is to ensure we take all necessary step to be an inclusive and equitable workplace where Rovians can be their best selves while making the best games. In 2023, we expect this to show a positive impact in representation number as well as in improving our employee sentiment. On climate and environment during 2022, we reached an important milestone of becoming fully carbon neutral. However, we're not stopping here. Our next step is to focus on reducing emissions, and we made that task public by sending our commitment letter to the Science Based Targets initiative, a leading framework to guide reduction targets to stop global warming. This last slide is a recap of our focus for the year. First, we want to continue to support the growth of our live games. We have ambitious objective for Angry Birds Dream Blast and want to apply all of the learnings of this great success to our other live games like Angry Birds 2 and Angry Birds Friends. To do so, we will shift part of our resources to those three titles. We are also planning on deploying our Red's Club. We are fortunate to have many fan favorite games on the market, and our goal is to maximize the portfolio effect of those games. We will continue to invest in new games but focus further on high potential and branded titles. We have nine games in our development pipeline and four in soft launch. Finally, our M&A approach will be towards established companies and companies owning promising IPs we can help grow, like we did with Angry Birds. Overall, we're going to be disciplined in all of our investments, prioritizing high-quality projects that are expected to drive long-term growth, such as our top live games and promising new titles. I'll give it now to René to dig deeper into the financials. Thanks, Alex. Good afternoon to everyone on the call. In the last Q4 of 2022, the group reported revenues declined by 2.5% and the comparable revenues by 10%. The end of the year was softer compared to last year, especially in the holiday season. While Angry Birds Dream Blast continued to steadily grow during the quarter and reach new records, Angry Birds 2 revenues were a bit lower compared to Q3, although quite steady, but lower versus last year's Q4. During last year, we saw an exceptionally strong organic traction on holiday season for Angry Birds 2. The absence of this during this quarter had an impact on the year-to-year comparison. As stated earlier, the relevant geos in Q4 did decline by 7% in total, while on the other hand, the FX rates were favorable and supported the reported revenues. In Q4, the adjusted operating profit was lower year-on-year, which was according to our expectations as well. The lower profit was due to a few main factors. Firstly, the advertising revenue in our games was significantly lower year-on-year. This had an impact on the gross margins negatively. Secondly, we continued to increase UA investments in Dream Blast all the way to the end of the year, which is quite exceptional, as typically, we have seen cost per installs go up at the end of the year. Thus, in previous years, we had often lowered the UA spend. For Dream Blast, we did not see this constraint during the end of the year. The softness of the ads business was clearly seen at the end of the year, and the absence of certain campaigns from non-gaming brands that typically are strong in this time of the season. Thirdly, our operating expenses were somewhat higher year-on-year as we continued to recruit during the year for our existing live games and also the new games pipeline. With regards to the EBITDA in Q4, it declined to EUR 9.6 million and the margin to 12.4%. The reasons for year-on-year decline are naturally the same as for the EBIT. Also good to note that last year's Q4, with the high level of organic traction, which were non-UA-driven, also drove the high EBITDA margins of 21%, which is a bit higher than average over the quarters. For the full year, the reported revenues increased by 11%, while the comparable revenue declined by 1.2%. Main things contributing to the reported revenue growth were inorganic growth through the Ruby Games acquisition, the launch of Angry Birds Journey, and the favorable FX rates. The mobile gaming market in the relevant geos declined by 10% during 2022. We clearly outperformed the market on an annual level. The full year adjusted EBIT landed at EUR 39.2 million and the margin at 12.3%, which was lower year-on-year, as expected, due to the higher user acquisition investment, especially for the launch of Angry Birds Journey, and higher operating expenses as we increased our investments in new games development. The full year EBITDA was slightly lower year-on-year and declined less than the adjusted EBIT, mainly due to a difference in adjusted items between the two periods. Considering the launch of a new game, the large scale-up of UA, this was a solid underlying base performance, which also shows the strength of the Angry Birds IP. During the fourth quarter, UA investments grew to EUR 23.3 million or 31.3% of games revenues, which was a bit above the midpoint of our guidance range of 28%-33% in our last earnings call. Main reason for the increase in Q4 was the good return on investment we kept on seeing in Angry Birds Dream Blast, and as said, we continued to increase the spending throughout the holiday season. The operating cash flow was lower year-on-year, mainly due to lower profit. However, it was still at a good level of EUR 12 million, and this was due to a lower working capital for the period. During the quarter, we also paid the second tranche of the Ruby Games acquisition, which had a cash component of just below $20 million, which resulted in the lower cash balance at EUR 170.7 million at the end of the year. The board of directors is proposing a dividend of EUR 0.13 per share for 2022. This is an increase of 8.3% from last year's EUR 0.12 per share. Based on the number of shares outstanding at the end of December, the total amount of dividends would be EUR 9.9 million, which is 31.5% of the adjusted profit for the year. For our 2023 outlook, we expect our comparable revenue and adjusted operating profit to be at last year's level. As also commented earlier today by Alex, the short-term market outlook still suffers from a lack of visibility. We believe Rovio is in a good position to continue performing well in this market, thanks to the strength of its live game portfolio and the Angry Birds brand. We have many games in different phases of development for which the time of global launch has not yet been set. We will continue to be disciplined in our user acquisition investments and invest in projects showing signs of growth, such as our top live games, while remaining disciplined with our investments in new titles. We focus our efforts on those projects that show clear signals of market traction and can contribute meaningfully to our growth and long-term cash flows. As customary, we also give additional information on our expected UA investments during the ongoing quarter. For Q1 2023, we expect the UA investments to be between 29% and 34% of games revenues. This slight increase of the range from the previous quarter is due to the continued good return on UA we see in Angry Birds Dream Blast. Thank you, Alex and René. We are now ready to move on to the questions. To ask your question, please dial into the conference call number shown on the screen if you've not done so already. Operator, we are now ready for questions. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. Please state your name and company. Please go ahead. Sebastian Patulea from Jefferies. Please go ahead. Sebastian Patulea from Jefferies. Please state your question. Hello. Can you hear me? Hello? Yes, we hear you. Okay. Thank you for taking my questions. I'm sorry it stopped for a bit. Sebastian from Jefferies. I have a question regarding your 2023 strategy to duplicate the success of Angry Birds Dream Blast and duplicate it across your other live games. May I please ask, do you see a risk of cannibalization of having multiple Angry Bird games with multiple live events at the same time? Do you believe that the cannibalization risk is limited because you actually see limited overlap between users on your games? Thank you very much. Yeah. Thank you for the question. I think that's a very pertinent question. When we look at the game profile for Angry Birds Dream Blast, for instance, and Angry Birds 2, those are quite different games, targeting different audiences. One of them is more casual, you know, puzzle type of game, whereas the other one is, you know, this, a slingshot game. Even though the two games happen, you know, in the same universe with Angry Birds characters, the overlap between those two games is quite limited. We haven't seen that in the past between those two games. Thank you. If I may follow up, please. Do you have some sort of an idea of what percentage of your users or active users play multiple, you know, more than two titles of your game at a single time? Or do you believe that the new platform, the Red's Club that you'll launch will actually provide you with this visibility? Yeah, I think we will have way more visibility on this with the Red's Club exactly. In a situation post the IDFA, right, after Apple's ATT's implementation, it's harder to have a very deep knowledge of this. But it's fairly limited between those two games, right? It really depends on the different type of games. That's why having different games in the same genre, so we have, for instance, many games that are in the puzzle genre could potentially result in increased what we call the, you know, the network LTV between those games, right? With having the Red's Club because we could incentivize players to play more than one game in the network. Thank you very, very much. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. Thank you everyone for your questions and joining us today. We wish you all a nice rest of the day.
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