Rovio: Firing on half the cylinders - Nordea

We expect a sequential decline in Rovio's Games revenue for Q3 in the midst of mobile gaming market headwinds (reopening, inflation, Apple's ATT policy). Game-specific growth has been a mixed bag in Q3, with the two largest games AB2 and ABDB performing well, but AB Journey and AB Friends falling short of Q2 levels. We expect Rovio to reiterate its 2022 guidance for strong top-line growth (our estimate: 10%) and declining adjusted EBIT (our estimate: -13%). The UA guidance for Q4 will receive attention as we believe that a sequential uptick in UA could imply the launch of the much-awaited Hunter Assassin 2 in Q4. Rovio currently trades at 2023E EV/EBIT of 6x versus peers at 9x and Rovio's average NTM multiple of 10x since the IPO. We appreciate the recently launched share repurchasing programme (1.0% of total shares), which provides firepower for future M&A, and do not rule out further buybacks after the second tranche of the Ruby Games acquisition has been paid in October 2022. Marketing material commissioned by Rovio.