Gameloft: Results for the First Half of 2013

PARIS, September 10, 2013 /PRNewswire/ --


Sales of €109.4M, up 15%

Current operating income of €11.2M, up 71%

Operating income of €8.4M, up 93%

Net profit of €1.8M, down 60%

Record net cash of €60.6M

 

Gameloft's financial statements for the first half-year ending June 30, 2013; breakdown as follows:

    In millions of EUR             H1 2013  % of sales  H1 2012  % of sales
    Sales                           109.4                95.2
    Cost of sales                   -19.1      -17%      -13.7      -14%
    Gross profit                    90.3       83%       81.5       86%
    R&D                             -51.6      -47%      -50.0      -53%
    Sales and marketing             -17.8      -16%      -17.4      -18%
    Administration                  -9.2       -8%       -8.5       -9%
    Other operating income and
    expenses                        -0.4        0%        0.9        1%
    Current operating income        11.2       10%        6.6        7%
    Stock-based compensation        -1.7       -2%       -1.2       -1%
    Other income and expenses       -1.1       -1%       -1.0       -1%
    Operating income                 8.4        8%        4.3        5%
    Financial income                -2.7       -2%        0.4        0%
    Net income before tax            5.7        5%        4.7        5%
    Tax expense                     -3.9       -4%       -0.2        0%
    Net income                       1.8        2%        4.6        5%


Over the first half of 2013, Gameloft achieved consolidated sales of €109.4 million, up 15% year on year. On a constant-exchange-rate basis, growth for the first half was 17%. EMEA represented 32% of first half sales; North America, 25%; LATAM, 23%; and APAC, 20%. Sales continue to be driven by the worldwide success of Gameloft games on smartphones and tablets. Gameloft's first-half sales on smartphones and tablets grew by 45% year on year. They represented 61% of total Group sales compared with 48% in the first half of 2012. Gameloft's rapid growth is also driven by the success of virtual goods and advertising which currently account for 80% of the company's smartphone revenues. This business model increases the longevity of the company's products. Games dating from 2011 and 2012 such as Ice Age Village, Modern Combat 4: Zero Hour, World at Arms, MY LITTLE PONY, Order & Chaos Online, and Six-Guns have contributed to the solid performance of the company in the first six months of 2013.

The first-half gross profit reached €90.3 million, up 11%. The gross margin for the period reached 83%, down from 86% in H1 2012 but stable compared with the gross margin achieved in H2 2012.

The solid growth in sales, stable headcount and efficient cost control in the company's three departments - R&D, Sales and Marketing and Administration - have allowed Gameloft to increase significantly its current operating income which stood at €11.2 million, up 71%. R&D, Sales and Marketing and Administration costs all decreased as a percentage of sales during the first half of 2013. R&D costs for instance represented 47% of first-half sales in 2013, significantly lower than the rate of 53% achieved in the same period in 2012. The first-half current operating margin therefore reached 10.3% compared with 6.9% in the first half of 2012.

Compensation costs related to bonus shares awarded to employees stood at €1.7 million in the first half of 2013 from €1.2 million in the same period in 2012. Stock-based compensation costs do not impact negatively the company's equity and cash level. Other income and expenses of €1.1 million are linked essentially to the restructuring of Gameloft's development studios in India and the Philippines. This restructuring reflects the major market changes of the last two years and in particular the technological evolution of feature phones and smartphones. The operating income for the first half of 2013 therefore reached €8.4 million, up 93% year on year, and the operating margin stood at 7.7%.

Net financial income for the first half of 2013 amounted to -€2.7 million and is essentially comprised of latent foreign exchange losses on intragroup receivables related to the fall of several foreign currencies against the Euro during the period (Brazilian Real, Argentine Peso, Canadian Dollar and Japanese Yen). The net income before tax therefore stood at €5.7 million, up 20% year on year.

The net income for the first half of 2013 stood at €1.8 million, down 60% year on year. The net income for the first half of 2012 was, however, positively impacted by the recognition of tax loss carry-forwards in France amounting to €2.0 million. This non-cash item renders a basic comparison of first-half 2013 and 2012 net income figures difficult.

The amount of unrecognized consolidated tax loss carry-forwards at the end of June 2013 was €11.7 million.

Healthy financial position

The company's equity stood at €130.6 million and net cash reached an all-time high of €60.6 million at the end of June 2013. Cash generation was strong during the first six months of 2013: Gameloft's operating cash flow stood at €12.9 million, up 52% year on year, and net cash increased by €5.0 million in six months. Therefore, the company has the financial resources necessary to continue to grow and increase its market shares around the world.

Given its healthy net cash position, Gameloft launched a share buy-back plan on April 16, 2013. At the end of June 2013 the company had bought 724,491 Gameloft shares on the market at an average price of €5.2 per share for a total amount of €3.8 million.

Outlook for 2013 and 2014

Gameloft has the development capacity to release annually between twenty and thirty high-quality games on feature phones, smartphones and tablets. These games are launched worldwide in thirteen different languages on 3,000 smartphone models and 350 feature phone models. There is, to our knowledge, no equivalent to Gameloft's development and distribution capacity in the mobile gaming industry.

To this day, 800 million freemium and paymium Gameloft games have been installed on iOS and Android. During the last thirty days 150 million people have played a Gameloft game. The huge success of the company's last two releases: Despicable Me: Minion Rush and Asphalt 8 Airborne highlights as well the ability of the company to release worldwide hits in a very competitive environment.

In 2012, 700 million smartphones were sold compared with 490 million in 2011[1]. Gameloft expects strong smartphone and tablet sales in 2013. In particular, the company expects, starting in 2013, a flood of low-end smartphones and tablets priced between €50 and €100 across the world. Games on these low-end smartphones and tablets will be radically different from the games that have been developed until now on smartphones and tablets, and Gameloft should be able to leverage its ten-year experience on feature phones in this new segment and take significant market shares. The momentum of the smartphone and tablet market should therefore continue to sustain Gameloft's growth in the upcoming quarters.

The company therefore confirms its target to reach between €235 million and €240 million in sales for the full year of 2013, as well as an increase of profitability and net cash. Sales for the third quarter of 2013 will be published on November 4, 2013, after the market closes.

About Gameloft:

A leading global publisher of digital and social games, Gameloft® has established itself as one of the top innovators in its field since 2000. Gameloft creates games for all digital platforms, including mobile phones, smartphones and tablets (including Apple® iOS and Android® devices), set-top boxes and connected TVs. Gameloft operates its own established franchises such as Asphalt®, Order & Chaos, Modern Combat or Dungeon Hunter and also partners with major rights holders including Universal®, Illumination Entertainment®, Disney®, Marvel®, Hasbro®, FOX®, Mattel® and Ferrari®. Gameloft is present on all continents, distributes its games in over 100 countries and employs over 5,000 developers.

Gameloft is listed on NYSE Euronext Paris (Euronext: GFT.PA, Bloomberg: GFT FP, Reuters: GLFT.PA). Gameloft is traded OTC in the US (sponsored Level 1 ADR ticker: GLOFY).

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1. Strategy Analytics

 

    PROFIT & LOSS ACCOUNT (KEUR)                  H1 2013           H1 2012
    Revenue                                       109 374            95 191
    Cost of sales                                 -19 118           -13 734
    Gross margin                                   90 256            81 457
    R&D                                           -51 586           -50 005
    Sales and Marketing                           -17 827           -17 369
    Administration                                 -9 210            -8 456
    Other operating income and expenses              -418               941
    Current operating income                       11 215             6 569
    Stock-based compensation                       -1 708            -1 246
    Other income and expenses                      -1 134              -983
    Operating income                                8 373             4 339
    Cost of net financial indebtedness                963               529
    Exchange rate gains                             1 988             3 077
    Exchange rate losses                           -5 630            -3 218
    Net financial income                           -2 679               388
    Net income before tax                           5 694             4 728
    Tax expense                                    -3 868              -170
    Net profit (group share)                        1 826             4 558
    Earnings per share                               0,02              0,06
    Fully diluted earnings per share                 0,02              0,05


 

    BALANCE SHEET (KEUR)                            30/06/13        31/12/2012
    ASSETS
    Net intangible fixed assets                        9 634            10 482
    Net tangible fixed assets                         10 597             9 098
    Non-current financial assets                       2 558             2 397
    Tax assets                                        17 814            17 149
    Total non-current assets                          40 603            39 126
    Client receivables                                61 652            59 658
    Other receivables                                 22 958            20 520
    Cash and cash equivalents                         60 951            55 654
    Total current assets                             145 562           135 832
    TOTAL                                            186 164           174 958
    LIABILITIES
    Capital                                            4 148             4 091
    Issue premium                                     89 134            85 669
    Reserves                                          35 508            28 937
    Net income                                         1 826             9 280
    Shareholder equity                               130 616           127 977
    Non-current liabilities                            5 403             4 400
    Current liabilities                               50 145            42 582
    TOTAL                                            186 164           174 958
    CASH-FLOW STATEMENT (KEUR)                       H1 2013           H1 2012
    Net income                                         1 826             4 558
    Amortization and provisions                        7 298             8 022
    Stock-based compensation                           1 708             1 246
    Capitalized R&D                                     -489              -996
    Asset sales                                           91                65
    Other non-cash items                                  97                 0
    Deferred tax                                          14            -2 249
    Self-financing capacity                           10 545            10 646

    Change in trade receivables                       -6 042            -7 596
    Change in operating liabilities                    8 431             5 454
    Change in working capital                          2 389            -2 142

    Operating cash-flow                               12 934             8 504

    License acquisitions                              -3 202            -2 030
    Acquisitions of intangible fixed
    assets                                              -486              -472
    Acquisitions of tangible fixed assets             -4 587            -3 086
    Acquisition of other fixed financial
    assets                                              -359              -380
    Repayment of loans and other financial
    assets                                               146                83
    Asset sales                                           45                16
    Total cash flows linked to investments            -8 443            -5 870

    Free Cash-Flow                                     4 491             2 634

    Capital increase related to stock
    options and bonus shares                           3 330             5 158
    Share buy-back                                    -3 763                 0
    Total cash flows from financing
    activities                                          -434             5 158

    Effect of exchange rate changes                      949            -1 050

    Change in cash                                     5 006             6 743

    Net cash at the beginning of the
    period                                            55 606            36 948
    Net cash at the end of the period                 60 612            43 690


For further information:
Heather Cosby
+1(646)203-8643
Email: Heather.Cosby@gameloft.com

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

SOURCE Gameloft



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