Rovio’s Pre-IPO Health Check

The 20,000 Foot View: Rovio, the publisher of Angry Birds, announced it would go public in October 2017 via NASDAQ Helsinki. The company is beyond its user growth peak, but is midway through a company turn around in terms of revenues and profitability. The company has IPOed as a profitable and revenue (rather than user growth) – oriented enterprise, willing to pay dividends from the get go. However, Rovio’s success still depends largely on the Angry Birds brand and the ability of its adjacent entertainment propositions to promote sales of old and new Angry Birds games titles. Beyond Angry Birds, Rovio faces a race against time to create another runaway success that can sustain its revenue aspirations once the Angry Birds machine inevitably begins to lose steam once again.

Key Findings

• Rovio swung            to profit in the year            The Angry Birds Movie release,            a three-year downward EBIT trend

• Declines in            revenue and EBIT were caused            by falling merchandise sales, which            for            of Rovio’s total revenue            2013

• Despite volatile            Rovio’s games revenue never stopped            tripling in value between 2011            2016

• Rovio’s monthly            users declined from            million in            to            million in 2017

• Rovio’s games            grew from            in 2011 to            2016, while non-games ARPU had            flatter trajectory from            to           

• Only six            of Rovio’s            games do not            Angry Birds in the title

• USA and            are Rovio’s key markets to            in terms of how movies            boost games revenue

• Beside monetization            Angry Birds games, the performance            Battle Bay and The Angry            movie sequel will be the            most important things to monitor            Rovio’s long-term potential

Companies mentioned: Angry Birds, Angry Birds            Battle Bay, Nasdaq, Rovio