GAMELOFT Results for the First Half of 2012 Record Sales of €95.2M

PARIS, September 4, 2012 /PRNewswire/ --

Results for the First Half of 2012
Record Sales of €95.2M
Current Operating Result of €6.7M and Net Result of €4.6M
Record Net Cash of €43.7M
Full-Year Sales Guidance Increased to €205M in 2012

Gameloft's financial statements for the first half-year ending June 30, 2012, break down as follows:

    In millions of EUR                     H1 2012       H1 2011

    Sales                                    95.2          76.8
    Cost of sales                           -13.7          -8.9
 
    Gross profit                             81.5          67.9
 
    R&D                                     -49.9         -37.0
 
    Sales & Marketing                       -17.4         -14.4
 
    Administration                           -8.5          -7.1
 
    Other operating income and expenses       0.9          -0.5
 
    Current operating income                  6.7           8.9
 
    Stock-based compensation
                                             -1.2          -1.0
    Other income and expenses
                                             -1.0           0.0
    Operating income                          4.4           7.9
 
                                              0.4          -1.3
    Net financial income
 
    Tax                                      -0.2
                                                           -1.3
    Net profit/loss (group share)             4.6           5.3
    Net profit per basic share               0.06          0.07
    Net profit per diluted share             0.05          0.07

Over the first half of 2012, Gameloft achieved consolidated sales of €95.2 million, up 24% year on year. North America represented 32% of first-half sales; EMEA, 26%; APAC, 22%; and LATAM, 21%. Sales were driven by the massive success of Gameloft games on the fast-growing smartphone and tablet segment. Gameloft's second-quarter sales on smartphones and tablets grew by 119% year on year and represented, for the first time, more than 50% of total sales. The strong growth enjoyed by Gameloft's smartphone activity is also related to the success of the freemium and paymium models put in place in 2011. Gameloft's number of monthly active users currently stands at 57 million and more than 60% of Gameloft's smartphone revenue is now derived from in-app purchases and advertising revenues.

Gross profit reached €81.5M, up 20% year on year. The gross margin was 86%, compared with 88% in the first half of 2011. This decrease is mostly due to the success of the company's third-party licensed games launched during the first six months of 2012 such as IceAgeVillage.

The current operating income stood at €6.7 million in the first half of 2012. The amount of R&D costs expensed on the P&L increased in the first half following the replacement of console and PC development projects (that are capitalized on the balance sheet) by mobile and tablet developments (that are expensed directly on the P&L). This had a non-cash impact of €3.9 million on the 2012 first-half results compared with the same period in 2011. The current operating income before R&D capitalization was therefore actually up 26% and reached €8.2 million in the first half of 2012 compared with €6.5 million in the first half of 2011. This solid growth is logically reflected in the self-financing capacity of the company which was up 41% year-on-year and stood at €8.6 million in the first half of 2012. Sales and Marketing, and Administration costs were kept well under control and were both down in terms of percentage of total sales.

The cost of stock-based compensation was €1.2 million. A non-recurring charge of €1.0 million was booked following the restructuring of Gameloft's Chinese development studios. The company has decided to focus its Chinese R&D on high value-added activities and closed down its Shanghai studio as well as its QA and porting departments in Beijing and Cheng Du in the first half of 2012.

Net financial income amounted to €0.4 million and is essentially comprised of interest earned on cash. The company recorded a tax charge of only €0.2 million mostly due to the recognition of tax loss carry-forwards. The amount of unrecognized consolidated tax loss carry-forwards at the end of June 2012 was €13.7 million.

The net profit for the first half of 2012 stands at €4.6 million, down 13% year on year. However, before R&D capitalization, the net result was actually up 115% compared with the first half of 2011. Earnings per share and fully diluted earnings per share stand at €0.06 and €0.05 respectively.

Solid Cash Flows and a Healthy Financial Position

Cash generation was strong in the first half of 2012. Operating cash flow reached €5.7 million, up 118% year on year and Gameloft's net cash increased by €6.7 million in the first six months of 2012. Gameloft's financial position is very solid. The company has all the financial means necessary to continue to grow rapidly; Gameloft's equity stood at €114.9 million and its net cash position reached an all-time high of €43.7 million at the end of June 2012.

An Ambitious Strategy for the Future

The momentum of the smartphone and tablet market should continue to sustain Gameloft's growth in the upcoming quarters. Gameloft invests heavily in this segment and these investments should continue to bear fruit. The company intends to launch around twenty new games targeting all audiences in the second half of 2012 including the highly anticipated Wild Blood, Gameloft's first Unreal game, Modern Combat 4, Playmobil Pirates, My Littlest Petshop, Zombiewood and Heroes of Order & Chaos. As a comparison, the company launched eleven new smartphone and tablet games in the first half of 2012.

In addition, the landmark and enduring success enjoyed by recently launched games such as IceAgeVillage, Kingdoms & Lords, The Amazing Spider Man, Asphalt 7: Heat and The Dark Knight Rises, should allow for solid top-line growth in the second half of the year.

Therefore, the company is now targeting €205 million in sales for the full year of 2012, up 25% year on year. Gameloft previously targeted €200 million in sales for 2012.

Sales for the third quarter of 2012 will be published on November 5, 2012 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®, Real Football®, Modern Combat, and N.O.V.A.: Near Orbit Vanguard Alliance®, and also partners with major rights holders including 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 the Paris Stock Exchange (ISIN: FR0000079600, Bloomberg: GFT FP, Reuters: GLFT.PA). Gameloft's sponsored Level 1 ADR (ticker: GLOFY) is traded OTC in the US.

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

    P&L (EURK)                                   H1 2012         H1 2011

    Revenue                                       95,191          76,803
    Cost of sales                                -13,734          -8,885
    Gross margin                                  81,457          67,919
    R&D                                          -49,903         -37,010
    Sales and Marketing                          -17,369         -14,414
    Administration                                -8,456          -7,064
    Net Provisions                                   -48             -62
    Other operating income and expenses              989            -458
    Current operating income                       6,670           8,910
    Stock-based compensation                      -1,246            -965
    Other income and expenses                       -983               0
    Operating income                               4,441           7,945
    Cost of net financial indebtedness               529              32
    Interest income                                3,077           1,679
    Interest expenses                             -3,218          -3,038
    Net financial income                             388          -1,326
    Employee profit-sharing                         -102            -108
    Tax expense                                     -170          -1,261
    Net profit/loss (group share)                  4,558           5,250
    Earnings per share                              0.06            0.07
    Fully diluted earnings per share                0.05            0.07

    BALANCE SHEET (EURK)                                30/06/12      31/12/11
    ASSETS
    Net intangible fixed assets                           11,371        11,856
    Net tangible fixed assets                              8,754         7,509
    Non-current financial assets                           2,547         2,211
    Assets from deferred assets                           17,665        14,863
    Total non-current assets                              40,337        36,439
    Inventory                                                  0             0
    Client receivables                                    54,952        50,609
    Cash and cash equivalents                             44,055        38,034
    Other current assets                                  17,571        13,417
    Total current assets                                 116,577       102,060
    TOTAL                                                156,914       138,499
 
    LIABILITIES
    Capital                                                3,976         3,855
    Reserves                                             106,391        80,834
    Result                                                 4,558        18,225
    Shareholders' equity                                 114,925       102,914
    Non-current liabilities                                3,306         3,086
    Current liabilities                                   38,683        32,499
    TOTAL                                                156,914       138,499
 
                   Cash flow statement (EURK)            H1 2012       H1 2011
                   Operating transactions
                   Net profit                              4,558         5,250
                   Depreciation and provisions             2,379         2,114
                   Net capitalized R&D expenses            1,496        -2,431
                   Net license acquisitions                1,121           157
                   Result from stocks options and
                   assimilated                             1,246           965
                   Deferred tax                           -2,249           -23
                   Sales of assets                            65            68
                   Self-financing capacity                 8,616         6,101
 
                   Change in inventories                       0             0
                   Change in trade receivables            -8,357        -6,934
                   Change in operating
                   liabilities                             5,454         3,455
                   Change in the working capital
                   requirement                            -2,903        -3,479
 
                   Operating cash flow                     5,713         2,622
 
                   CAPEX
                   Acquisitions of intangible
                   fixed assets                             -472          -499
                   Acquisitions of tangible fixed
                   assets                                 -3,086        -3,209
                   Acquisition of other fixed
                   financial assets                         -380          -568
                   Sales of assets                            16            11
                   Repayment of loans and other
                   financial assets                           83           415
                   Total transactions linked to
                   investments                            -3,839        -3,850
 
                   Capital increase and other
                   financing flows                         5,919         3,359
 
                   Change in cash                          7,793         2,131
 
                   Net cash at the beginning of
                   the year                               36,948        25,133
                   Effect of exchange rate
                   changes                                -1,050        -1,142
                   Net cash at the end of the
                   year                                   43,690        26,122
 

For further information:
Jessica W. Lewinstein - PR Manager
Tel: +1-415-615-0520
Email: [email protected]

SOURCE Gameloft