Gameloft: Results for the First Half of 2014, Sales of €111.3M
PARIS, September 10, 2014 /PRNewswire/ --
Current operating income of €1.6M
Net loss of €0.1M
Net cash of €58.5M
Gameloft's financial statements for the first half-year ending June 30, 2014; breakdown as follows:
In millions of EUR H1 2014 % of sales H1 2013 % of sales
Sales 111.3 100% 109.4 100%
Cost of sales -19.7 -18% -19.1 -17%
Gross profit 91.6 82% 90.3 83%
R&D -56.1 -50% -51.6 -47%
Sales and marketing -20.2 -18% -17.8 -16%
Administration -13.2 -12% -9.2 -8%
Other operating income and
expenses -0.5 0% -0.4 0%
Current operating income 1.6 1% 11.2 10%
Stock-based compensation -2.0 -2% -1.7 -2%
Other income and expenses -0.2 0% -1.1 -1%
Operating income -0.6 -1% 8.4 8%
Financial income 2.9 3% -2.7 -2%
Net income before tax 2.3 2% 5.7 5%
Tax expense -2.4 -2% -3.9 -4%
Net income -0.1 0% 1.8 2%
Over the first half of 2014, Gameloft achieved consolidated sales of €111.3 million, up 10% year on year on a constant-exchange-rate basis, and up 2% on a current-exchange-rate basis. EMEA represented 33% of first-half sales; North America, 30%; APAC, 19%; and LATAM, 18%. Gameloft's organic growth remained strong during the first half in the absence of major project launches. Of the twelve to fifteen new games currently expected to be released in 2014 by the company, only four were launched during the first half. More than 95% of first-half sales were therefore generated from the back catalogue titles, whose lifespan is progressively increasing thanks to the groundwork completed on game updates.
The gross profit reached €91.6 million, up 1%. The gross margin for the period remained relatively stable at 82% compared with the gross margin of 83% achieved in the first half of 2013.
The low number of new game releases in the first-half combined with maintaining R&D investments at an ambitious level did not allow the company to benefit from a leverage effect on sales. R&D, Sales and Marketing, and Administration expenses represented 50%, 18%, and 12% respectively of first-half sales in 2014. The current operating margin of the first half stood at 1.4%, compared to 10.3% for the first half of 2013. The coming months should witness improved synchronization between the frequency of new game releases and the company's investments.
Stock-based compensation reached €2.0 million in the first half of 2014, compared to €1.7 million for the same period in 2013. Stock-based compensation costs do not negatively impact the company's equity and cash level. The operating income was -€0.6 million, representing an operating margin of -0.5% compared to 7.7% from the first half of 2013.
Gameloft's financial income reached €2.9 million, a strong increase compared to the first half of 2013, and was driven mostly by interest income earned on cash and currency exchange gains. Net income before tax stood at €2.3 million and net loss at €0.1 million.
The amount of unrecognized consolidated tax loss carry-forwards reached €15.1 million on June 30, 2014.
Sound financial situation
On June 30, 2014, the company's equity capital reached €139.4 million and net cash was €58.5 million. Operational cash flow generation was relatively solid during the first six months of the year, which allowed the company to continue to invest in IT infrastructure. Operational cash flow stood at €8.6 million, of which close to €8.0 million was re-invested in purchasing IT equipment and software. These investments allow Gameloft to manage the build-up in the number of users for its smartphone and tablet games. The company currently supports an average of over 20 million players per day on its game servers.
Outlook for 2014 and 2015
Gameloft was ranked the second largest publisher in the world in July 2014 in terms of game downloads on smartphones and tablets, according to the App Annie index. With over 20 million daily users and 1.7 billion Gameloft games downloaded to date, the company is a key and leading player in the mobile game market.
Gameloft has the in-house development teams necessary to launch over fifteen games on smartphones and tablets per year and to maintain services for over 25 games. These games are marketed in 15 different languages and on over 4,500 smartphone models. To our knowledge there are no other companies in the mobile game sector that have production and distribution capacities that rival Gameloft.
In 2014, 1.25 billion smartphones are expected to be sold, compared to 1 billion in 2013[1]. Sales growth of smartphones and tablets combined with the forthcoming releases of many new high-quality games are expected to drive Gameloft's growth in the coming quarters. Michel Guillemot, CEO of Gameloft, states, "After several quarters with a low number of releases, Gameloft will return to releasing new games at a regular and brisk pace starting from the fourth quarter of 2014, which should result in accelerated growth for the company."
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1. IDC, August 2014
The company targets 2014 sales and current operating expenses of close to €245 million and €230 million respectively. Sales for the third quarter of 2014 will be published on November 4, 2014, 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 feature phones, smartphones, tablets, set-top boxes and connected TVs. Gameloft operates its own established franchises such as Asphalt®, Real Football®, Modern Combat and Order & Chaos®, and also partners with major rights holders including Marvel®, Hasbro®, FOX®, Mattel® and Disney®. Gameloft is present on all continents, distributes its games in over 120 countries and employs over 5,200 developers.
Gameloft is listed on NYSE Euronext Paris (NYSE Euronext: GFT.PA, 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.
PROFIT & LOSS ACCOUNT (KEUR) H1 2014 H1 2013
Revenue 111,277 109,374
Cost of sales -19,705 -19,118
Gross margin 91,572 90,256
R&D -56,085 -51,586
Sales and Marketing -20,200 -17,827
Administration -13,177 -9,210
Other operating income and expenses -518 -418
Current operating income 1,593 11,215
Stock-based compensation -1,974 -1,708
Other income and expenses -206 -1,134
Operating income -587 8,373
Cost of net financial indebtedness 1,362 963
Exchange rate gains 2,680 1,988
Exchange rate losses -1,187 -5,630
Net financial income 2,855 -2,679
Net income before tax 2,268 5,694
Tax expense -2,410 -3,868
Net profit (group share) -142 1,826
Earnings per share -0.00 0.02
Fully diluted earnings per share -0.00 0.02
BALANCE SHEET (KEUR) 30/06/2014 31/12/2013
ASSETS
Net intangible fixed assets 8,268 8,146
Net tangible fixed assets 21,254 16,445
Non-current financial assets 6,145 6,749
Tax assets 13,986 11,163
Total non-current assets 49,653 42,503
Client receivables 58,345 62,802
Other receivables 23,750 20,572
Cash and cash equivalents 58,968 61,797
Total current assets 141,063 145,171
TOTAL 190,715 187, 675
LIABILITIES
Capital 4,255 4,201
Issue premium 92,076 88,553
Reserves 43,197 35,973
Net income -142 7,526
Shareholder equity 139,386 136,253
Non-current liabilities 6,691 4,286
Current liabilities 44,638 47,135
TOTAL 190,715 187,675
CASH FLOW STATEMENT (KEUR) H1 2014 H1 2013
Net income -142 1,826
Amortization and provisions 8,032 7,298
Stock-based compensation 1,974 1,708
Deferred tax -2,083 14
Asset sales 36 91
Other 56 97
Self-financing capacity 7,872 11,034
Change in trade receivables 1,062 -6,042
Change in operating liabilities -303 8,431
Change in working capital 759 2,389
Operating cash flow 8,631 13,424
License acquisitions -3,912 -3,202
Acquisitions of intangible fixed assets -1,090 -975
Acquisitions of tangible fixed assets -9,084 -4,587
Acquisitions of other fixed financial assets -723 -359
Repayment of loans and other financial
assets 567 146
Asset sales 34 45
Total cash flows linked to investments -14,208 -8,932
Free Cash-Flow -5,576 4,491
Medium and long term debt 1,414 0
Capital increase related to stock options
and bonus shares 2,920 3,330
Share buyback -522 -3,763
Total cash flows from financing activities 3,812 -434
Effect of exchange rate changes -23 949
Change in cash -1,787 5,006
Net cash at the beginning of the period 60,329 55,606
Net cash at the end of the period 58,542 60,612
SOURCE Gameloft
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