Rovio: Key takeaways from CMD - Nordea

Rovio arranged a CMD yesterday (11 May) in Stockholm, providing an update on its strategy and financial targets as well as deep dives into the Angry Birds brand and technology platform Beacon. The company reiterated its strategy outlines with a sharp focus on wide-appeal casual mobile games, which coupled with the Angry Birds IP has made Rovio a relative winner in the midst of app tracking transparency (ATT) headwinds for the market, in our view.

The highlight of the day to us was the deep dive to Rovio’s technology platform Beacon, which appeared as a competitive advantage for Rovio due to its value-add to potential M&A targets and the data-driven decision-making tools for UA optimisation and game development that have also turned out valuable in changing market dynamics. In terms of financial targets, Rovio now aims to grow revenues and EBITDA faster than the western mobile gaming market growth, which admittedly points to limited operational leverage, but highlights the company’s focus on absolute profit and cash flow generation through games with larger scale.

Overall, the CMD echoed the company’s improved focus and execution, which is already bearing fruit as witnessed in recent successful growth initiatives (AB Journey, Ruby Games). This keeps us optimistic on a sustainably better growth trajectory for Rovio, even though the normalising mobile gaming market with post-pandemic reopening impacts might present near-term headwinds.

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