Chirpy Angry Birds maker eyes IPO golden egg

HELSINKI Mon May 7, 2012 5:37pm IST

Rovio Chief Executive Mikael Hed stands in front of an Angry Birds poster at his company's offices in Helsinki August 16, 2010. REUTERS/Georgina Prodhan/files

Rovio Chief Executive Mikael Hed stands in front of an Angry Birds poster at his company's offices in Helsinki August 16, 2010.

Credit: Reuters/Georgina Prodhan/files

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HELSINKI (Reuters) - Angry Birds maker Rovio Entertainment said sales jumped tenfold to $100 million last year as gamers flocked to download its titles, adding business was now strong enough for a stock market listing.

The Finnish startup making Angry Birds games -- in which players use a slingshot to attack pigs who steal the birds' eggs -- has been valued by analysts at up to $9 billion, just short of that of struggling world No.2 phonemaker Nokia.

Rovio said on Monday its finances were good enough for a listing after revealing a highly profitable 2011 in its first public disclosure of business results and forecast a bumper year ahead.

Rovio, originally founded in 2003, became a global phenomenon after it launched Angry Birds for Apple's (AAPL.O) iPhone in late 2009.

Since then it has remained at top of the gaming charts with more than 800 million downloads and it had 200 million monthly users at the end of 2011, just short of U.S.-based Zynga's (ZNGA.O) 240 million.

"Rovio has fended off all rivals so far," said analyst Tero Kuittinen from Finnish mobile firm Alekstra. "Rovio is still the king of the mountain, despite stiff recent challenges by OMGPOP and Disney's 'Where's My Water?'"

Rovio plans to launch several more titles in 2012, which include a non-Angry Birds title, Chief Executive Mikael Hed told Reuters in an interview.

Rovio predicted further growth driven by growing cellphone sales and its significant investments in product development, branding, brand protection and corporate infrastructure.

"2012 looks fantastic," Hed said. "We have had some very strong download numbers over four months."

Its Angry Birds Space game was downloaded more than 50 million times in 35 days since its launch in March.

Rovio is also expanding its brand to toys and playgrounds, and is taking the birds to the big screen. The first full-motion animated movie featuring the characters is in the works and the short animations are a YouTube hit.

Consumer products, which includes merchandising and licensing, generated around 30 percent of revenues last year, with the share higher in the fourth quarter, Hed said.


At the shareholders meeting on Monday listing plans were not on the agenda, but Rovio has earlier said the company would likely be ready for an initial public offering next year, either in New York or Hong Kong.

"This company is preparing itself and getting ready," said Anders Lindeberg, Rovio's head of investor relations, adding the firm was working on meeting corporate governance requirements.

Rovio reported 2011 profit before tax of 48 million on sales of 75.4 million euros, for a margin of 64 percent. The company did not provide historic data, but has said 2010 revenues were around $10 million.

Last year Rovio raised $42 million from venture capital firms including Accel Partners, which previously backed Facebook and Baidu, and Skype founder Niklas Zennstroem's venture capital firm Atomico Ventures.

Rovio was founded after three students including Niklas Hed -- CEO Mikael Hed's cousin and now Rovio's COO -- won a game-development competition sponsored by Finnish mobile phone maker Nokia and Hewlett-Packard CO (HPQ.N).

Shares in Nokia, whose headquarters are just a few buildings away from Rovio, were 1.4 percent lower on Monday, valuing the firm at 8.84 billion euros.

(Reporting By Tarmo Virki; Editing by Jon Loades-Carter)


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