Rovio: Very strong set of Q1 numbers - Nordea

Rovio reported an extremely strong set of Q1 numbers with 6% beat on the top-line and an adjusted EBIT of EUR 10.0m versus Infront consensus of EUR 3.5m and our estimate of EUR 3.1m. Group organic growth stood at 12%, compared to 6% in Q4 and our estimate of 10%. Relative to our estimates, the top-line beat is encouragingly driven by recently launched AB Journey and the Ruby Games studio that was acquired in August 2021, highlighting success in recent key growth initiatives. UA spend was slightly lower than we anticipated at 38% of Games revenue (our estimate: 40%), which explains EUR 1.2m of the EUR 6.9m EBIT beat relative to our estimates, while the remainder of the positive surprise seems to be a result of operating leverage. Rovio reiterated its guidance for strong top-line growth (consensus +14%) and lower adjusted EBIT (consensus -19%) for 2022. UA costs for Q2 were guided at 25-30% of Games revenue, whereas we have estimated 33%. At first take, we believe the strong Q1 should trigger ~15% earnings upgrades by the consensus for 2022E-23E.