Gameloft: Results for the First Half of 2009

    PARIS, August 31 /PRNewswire-FirstCall/ --
    - Revenues up by 20%
    - Current Operating Income of EUR4.5M, up 65%
    - Net Cash of EUR16.9M, up 57%
    2009 Half-Year Results
    Gameloft's financial statements for the first half-year ending June 30,
2009 break down as follows:

    In EUR millions                          H1 2009       H1 2008

    Sales                                       60.1          50.3

    Other income                                 0.1           0.2

    Cost of goods sold                          -7.7          -4.1

    R&D                                        -29.2         -26.6

    Sales & Marketing                          -13.8         -13.8

    Administration                              -4.3          -4.5

    Other income and expenses                   -0.6           1.3

    Current operating income*                    4.5           2.8

    Stock-based compensation                    -1.3          -1.3

    Other operational revenues and expenses      0.0          -0.1

    Operating income                             3.2           1.4

    Financial result                             0.3          -1.3

    Tax expense                                 -1.2          -0.9

    Group Share of Net Income                    2.2          -0.8

    *Before stock-based compensation

Gameloft achieved consolidated sales of EUR60.1 million for the first half of 2009, up by 20% from the first half of the previous year. Mobile games activity accounts for 95% of the company's half-year sales. The remaining 5% are related to console games.

The solid growth in sales and the stabilization of the company's headcount resulted in a significant increase in operating income and net income. Current operating income for the first six months of 2009 stands at EUR4.5M, up 65% compared to the first half of 2008. The operating margin stands at 7.6%, compared to 5.5% in the first half of 2008.

Stock-based compensation reached EUR1.3M. This expense does not have any negative impact on the company's equity and cash level. Interest income amounted to EUR0.3M and is comprised of exchange gains and interest on the company's cash.

The net half-year profit therefore stands at EUR2.2M, a clear improvement over the first half of 2008.

Healthy Financial Position

Gameloft's financial position remains very strong as of June 30, 2009. The company's equity stands at EUR52.1M, net cash was EUR16.9M and financial indebtedness remained at zero. Cash generation was particularly healthy with over EUR6M in additional cash generated over the first six months of the year. Gameloft therefore has the financial resources necessary to continue its fast growth and take market shares around the world.

Outlook for 2009

Gameloft continues to reap the fruit of its investments in its development and distribution abilities. These investments that enabled Gameloft to grow quickly and to position itself as one of the industry leaders in the past few years are now also resulting in increased profitability for the company.

    - Gameloft is probably the player that benefits most from the innovations
      introduced by the traditional telephone manufacturers such as Nokia and
      Samsung and from the arrival of new dynamic players in the market such
      as Apple and RIM. As such, Gameloft has become one of the top game
      publishers on Apple's AppStore with 35 games released so far, of which
      18 are or were ranked in the Top 10 Best-Selling Games.

    - Gameloft continues to win over substantial market shares in Smartphones
      and traditional Java and Brew phones.

    - Gameloft is one of the very rare players in the market that has the
      resources and know-how that allows it to be present with downloadable
      content for the launch of all the new consoles (PlayStation Network,
      Nintendo DSiWare, Nintendo WiiWare, etc.).

Gameloft is therefore renewing its growth target for sales as well as for profitability over the full year of 2009.

Sales for the third quarter of 2009 will be published on October 28, 2009.

About Gameloft

Gameloft develops and publishes video games for mobile telephones and consoles worldwide. Gameloft was founded in 1999 and is now positioned as one of the most innovating companies in its field. Gameloft designs games for telephones incorporating the Java, Brew and Symbian technologies, for which the number of units should exceed four billion in 2012. Gameloft games are also available on WiiWare, DS, Microsoft Xbox LIVE Arcade, iPod and PCs.

Partnership agreements with major rights holders such as Ubisoft Entertainment, Universal Pictures, ABC, Touchtone Television, Dreamworks Animations SKG, Endemol, 20th Century Fox, Viacom, Sony Pictures, Warner Bros., FIFPro, Ferrari, Roland-Garros, Gus Hansen, Kobe Bryant, Derek Jeter, Robinho, Reggie Bush, Chuck Norris, Patrick Vieira, Christophe Dominici and Jonny Wilkinson allow Gameloft to associate its games with very strong international brands. In addition to these brands, Gameloft has its own brands, such as Block Breaker Deluxe, Asphalt: Urban GT and New York Nights.

Thanks to agreements with all of the main telecom operators, telephone manufacturers and specialized distributors, as well as its http://www.gameloft.com boutique, Gameloft's games are distributed in 80 countries.

Gameloft has locations in New York, San Francisco, Seattle, Montreal, Mexico, Buenos Aires, Paris, London, Koln, Copenhagen, Milan, Madrid, Lisbon, Vienna, Warsaw, Helsinki, Bucharest, New Delhi, Kuala Lumpur, Peking, Tokyo, Hong Kong, Seoul, Singapore and Sydney. Gameloft is listed in Compartment B of the Paris Stock Exchange (ISIN: FR0000079600, Bloomberg: GFT FP, Reuters: GLFT.PA).

    P&L (in thousands of euros)                  H1 2009         H1 2008
    Sales                                         60,102          50,288
    Other revenue from the activity                  137             180
    Cost of sales                                 -7,720          -4,054
    R&D                                          -29,234         -26,630
    Sales and Marketing                          -13,847         -13,843
    Administration                                -4,310          -4,521
    Other income and operating expenses             -587           1,334
    Current operating income                       4,541           2,754
    Stock-based compensation                      -1,261          -1,262
    Other operating revenue and expenses             -44             -69
    Operating income                               3,237           1,423
    Cost of net financial indebtedness                58             108
    Interest income                                1,965           1,693
    Interest expense                              -1,739          -3,103
    Financial result                                 284          -1,301
    Employee profit-sharing                          -78               0
    Tax expense                                   -1,248            -888
    Net income                                     2,194            -766
    . Group's share                                2,198            -766
    . minority interests                              -3               0



    BALANCE SHEET (in thousands of euros)      30/06/2009      31/12/2008
    ASSETS
    Net intangible fixed assets                    12,598          11,228
    Net tangible fixed assets                       4,574           5,083
    Non-current financial assets                    2,254           2,674
    Assets from deferred assets                     1,713           1,950
    Total non-current assets                       21,139          20,935
    Inventory                                         810           2,428
    Client receivables                             28,503          35,143
    Investment securities                           6,017           2,507
    Liquid assets                                  10,935           8,967
    Other current assets                            5,858           7,001
    Total current assets                           52,123          56,046
    TOTAL                                          73,263          76,981

    LIABILITIES
    Capital                                         3,682           3,680
    Issue premium                                  63,881          63,790
    Reserves                                      -17,699         -16,225
    Result                                          2,194          -1,809
    Shareholders' equity                           52,058          49,436
    Non-current liabilities                         1,100           1,298
    Current liabilities                            20,105          26,247
    TOTAL                                          73,263          76,981


    Cash flow statement (in thousands of               H1 2009        H1 2008
    euros)
    Operating transactions
    Net income                                           2,194           -766
    Depreciation of tangible and intangible
    fixed assets                                         5,492          4,579
    Result from stocks options and assimilated           1,261          1,262
    Taxes paid                                            -190            176
    Sales of assets                                         79            270
    Capitalized R&D expense                             -1,784         -3,082
    License acquisition                                 -3,144         -1,881
    Other                                                  -12            -73
    Self-financing capacity                              3,897            484

    Change in inventories                                1,619             39
    Change in operating receivables                      7,086            781
    Change in operating debts                           -5,154         -1,024
    Change in the working capital requirement            3,551           -204

    Operating cash flow                                  7,447            280

    Transactions linked to investments
    Acquisitions of intangible fixed assets               -300           -213
    Acquisitions of tangible fixed assets                 -960         -1,324
    Acquisition of other fixed financial
    assets                                                 -63           -155
    Acquisition of controlling interests                    35             -6
    Repayment of loans and other capital
    assets                                                 123            346
    Change in scope                                         45             85
    Other transactions                                       2             57
    Total transactions linked to investments            -1,119         -1,210

    Total flows from financing transactions                 52            133

    Change in cash flow                                  6,380           -797

    Net cash flow at the beginning of the year          10,748         13,938
    Impact of conversion differentials                    -227           -491
    Net cash flow at the end of the year                16,900         12,649


    Contact:

    Aude Fouquier

    PR Manager
    Tel.: +33-(0)1-58-16-21-55
    Email: aude.fouquier@gameloft.com

    For more information, consult http://www.gameloft.com

SOURCE Gameloft