Gameloft: 2010 Annual Results

Mar 23, 2011, 13:57 ET from Gameloft

    PARIS, March 23, 2011 /PRNewswire-FirstCall/ --
    - 16% Sales Growth
    - Record Current Operating Income of EUR17.1M, up 64%
    - Net Profit of EUR13.6M, up 127%
    - Earnings per Share Reach 0.18EUR
    2010 Annual Results
    Gameloft's financial statement for the year ending 31 December 2010
breaks down as follows:

    In EUR millions                      2010  2009

    Sales                               141.0 122.0
    Other income                          0.1   0.3
    Cost of sales                       -19.4 -15.5
    Gross margin                        121.7 106.8
    R&D                                 -65.7 -57.4
    Sales & Marketing                   -26.5 -28.1
    Administration                      -11.3  -9.2
    Other operating income and expenses  -1.1  -1.6
    Current operating income             17.1  10.4
    Stock-based compensation             -2.3  -2.7
    Other income and expenses            -0.2   0.0
    Operating income                     14.6   7.7
    Net financial income                  1.3   0.4
    Tax expense                          -2.3  -2.2
    Net profit/loss (group share)        13.6   6.0
    Net profit per basic share           0.18  0.08
    Net profit per diluted share         0.17  0.08

In 2010, Gameloft consolidated sales reached EUR141 million, up by 16% year on year. This solid growth was driven by sales in emerging countries and by the massive success of Gameloft games on Smartphone devices around the world. Gameloft has successfully positioned itself as a leading game publisher on Apple's App Store since launch and has seen its sales on iPhone and iPad grow by 63% in 2010.

The robust growth in sales and efficient cost control in the company's three departments, R&D, Sales & Marketing and Administration, have allowed Gameloft to grow its current operating income by 64% in 2010. Therefore the current operating income of fiscal year 2010 stands at EUR17.1 million compared with EUR10.4 million in 2009.

Gameloft continues to benefit from investments in its development and distribution abilities. These investments enabled the company to grow quickly and to position itself as one of the top industry leaders. It has also led to a steady increase of its profitability in the past couple of years: Gameloft's 2010 operating margin stands at 12.1%, compared with 8.6% in 2009 and with 3.0% in 2008.

The annual impact from expensing stock options is EUR2.3 million. Net financial income amounted to EUR1.3 million and is comprised of exchange gains and interest on the company's net cash.

The full year net profit stands at EUR13.6 million, up 127% compared with 2009. The Group's net margin reached 9.6% compared with 4.9% in 2009. Earnings per share and fully diluted earnings per share stand at 0.18EUR and 0.17EUR respectively.

Healthy Financial Position

Gameloft's financial position was very solid on December 31, 2010. The company's equity stood at EUR77.8 million and net cash and cash equivalents totaled EUR25.1 million. Cash generation was strong during 2010: Gameloft's self-financing capacity reached EUR17.2 million compared with EUR10.7 million in 2009 and net cash increased by EUR5.4 million. Therefore, the company has the financial resources necessary to continue its fast growth and take market share around the world.

Outlook for 2011

- Gameloft should continue to win over market share in Java and Brew phones, as a result of the progressive withdrawal of a large number of competitors. Emerging countries should continue to help drive growth as well.

- The recent and future releases of high-performance Smartphones from Apple, Samsung, Nokia, LG, Sony Ericsson, HTC and Google should continue sustaining Gameloft's growth in the upcoming quarters.

- The release of new gaming devices such as tablets, Smart TVs and the next generation of set top boxes should allow Gameloft to continue its diversification on additional platforms.

- The emergence of social gaming on networks such as Facebook could provide the company with interesting growth opportunities. Gameloft aims at becoming one of the major players in social gaming within the next 3 to 5 years. After launching Green Farm, the company's first social game which is present on six different social networks around the world and already profitable, Gameloft plans to release a new slate of social games covering all genres. The games will also be available on mobile phones. The company's knowledge of the mobile industry coupled with its development and deployment capacity, enable Gameloft to be well positioned to make rapid progress in the space.

Therefore, the company is expecting further growth in 2011 in terms of sales, profitability and net cash. In the long term, the company appears to be in an ideal position to benefit from the rapid emergence of the digital distribution of video games on smartphones, tablets, TVs, consoles and social networks.

Sales for the first quarter of 2011 will be published on 27 April 2011.

About Gameloft

A leading developer and publisher of digitally distributed games, Gameloft(R) 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(R) iOS and Android(R) devices), set top box, connected TVs and consoles. Gameloft partners with leading international brands such as UNO(R), Spider-Man(R), James Cameron's Avatar(TM), Ferrari(R) and Sonic Unleashed(R). Gameloft also operates its own established franchises, such as Real Football, Asphalt(TM), Modern Combat 2 : Black Pegasus and N.O.V.A Near Orbit Vanguard Alliance(R). Gameloft is present in all continents, distributes its games in 100 countries and employs over 4,000 developers.

Gameloft is listed on the Paris Stock Exchange (ISIN: FR0000079600, Bloomberg: GFT FP, Reuters: GLFT.PA).

    P&L (EURK)                             2010    2009
    Revenue                             140 958 121 972
    Other revenue from the activity         149     334
    Cost of sales                       -19 434 -15 528
    Gross margin                        121 673 106 778
    R&D                                 -65 687 -57 421
    Sales and Marketing                 -26 469 -28 124
    Administration                      -11 324  -9 164
    Other operating income and expenses  -1 122  -1 629
    Current operating income             17 072  10 439
    Stock-based compensation             -2 283  -2 686
    Other income and expenses              -222     -41
    Operating income                     14 567   7 712
    Cost of net financial indebtedness      123      88
    Interest income                       6 625   2 669
    Interest expense                     -5 437  -2 312
    Net financial income                  1 312     445
    Employee profit-sharing                -117    -146
    Tax expense                          -2 197  -2 040
    Net profit/loss (group share)        13 566   5 972
    Earnings per share                     0.18    0.08
    Fully diluted earnings per share       0.17    0.08



    BALANCE SHEET (EURK)                           31/12/2010 31/12/2009
    ASSETS
    Net intangible fixed assets                        14 564     12 602
    Net tangible fixed assets                           5 964      4 579
    Non-current financial assets                        2 337      1 948
    Assets from deferred assets                         4 066      2 762
    Total non-current assets                           26 932     21 892
    Inventory                                               0        457
    Clients receivables                                42 100     32 626
    Cash and cash equivalents                          27 038     19 804
    Other current assets                               10 826      8 674
    Total current assets                               79 965     61 562
    TOTAL                                             106 896     83 454

    LIABILITIES
    Capital                                             3 754      3 740
    Issue premium                                      67 452     66 593
    Reserves                                           -6 990    -16 368
    Result                                             13 566      5 972
    Shareholders' equity                               77 783     59 936
    Non-current liabilities                             2 307      1 639
    Current liabilities                                26 807     21 878
    TOTAL                                             106 896     83 454

    Cash flow statement (EURK)                           2010       2009
    Operating transactions
    Net profit/loss                                    13 566      5 972
    Depreciation of tangible and intangible assets     15 055     12 483
    Result from stocks options and assimilated          2 283      2 686
    Tax paid                                               95       -165
    Sales of assets                                       186         83
    Capitalized R&D expense                            -8 546     -4 601
    License acquisition                                -5 455     -5 782
    Self-financing capacity                            17 184     10 675

    Change in inventories                                 457      1 971
    Change in trade receivables                       -11 474         61
    Change in operating liabilities                     2 767     -3 690
    Change in the working capital requirement          -8 250     -1 657

    Operating cash flow                                 8 935      9 018

    Investment-related cash flow
    Acquisitions of intangible fixed assets              -684       -718
    Acquisitions of tangible fixed assets              -4 016     -2 362
    Acquisition of other fixed financial assets        -1 184       -723
    Asset sales                                            65        110
    Repayment of loans and other financial assets         138        870
    Change in scope                                        79         80
    Other                                                   0        -11
    Total transactions linked to investments           -5 603     -2 754

    Total flows from financing activities                 814      2 839
    Impact of conversion differentials                  1 237       -102
    Change in cash                                      5 384      9 002

    Net cash at the beginning of the year              19 749     10 748
    Net cash at the end of the year                    25 133     19 749


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

SOURCE Gameloft