15% sales growth
Current operating margin of 12%
Operating income of €7.9M, up 68%
Net cash of €26.1M
2011 Half-Year Results
Gameloft’s financial statements for the first half-year ending June 30, 2011, breaks down as follows:
Gameloft achieved consolidated sales of €76.8 million in the first half of 2011, up by 15% from the previous year. The company’s growth accelerated significantly during the first half of 2011. Growth on a constant exchange rate basis reached 17% compared to 10% during the first half of 2010. This growth was driven by sales in emerging countries and by the massive success of Gameloft games on smartphones and tablets around the world.
The solid growth in sales and efficient cost control has resulted in a substantial increase in Gameloft's operating income in the first half of 2011. The gross margin reached 88% compared with 86% in the first half of 2010. The current operating income for the first six months of 2011 stands at €8.9 million, up 53% year on year. Therefore, the current operating margin for the period is 11.6%, compared with 8.8% during the first half of 2010.
The half-year impact from expensing stock options is €1.0 million. This charge does not have an impact on the company's equity and cash level. The operating income reached €7.9 million, up 68% compared with the first half of 2010.
Interest income amounted to -€1.3 million and is essentially comprised of exchange losses due to the strength of the Euro. The net half-year profit stands at €5.3 million, flat compared with the first half of 2010. The Group's net margin reached 6.8%. Earnings per share and fully diluted earnings per share both stand at €0.07.
Healthy Financial Position
Gameloft’s financial position was very solid on June 30, 2011. The company’s equity stood at €85.7 million, up 10% in six months. The company's self-financing capacity reached €6.1 million during the first half of 2011. Net cash and cash equivalents totaled €26.1 million on June 30, 2010. Therefore, the company has the financial resources necessary to continue to grow around the world.
Outlook for 2011-2012
· 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.
· The dynamism of the smartphone and tablet market should continue sustaining Gameloft's growth in the upcoming quarters. Gameloft’s first-half sales on smartphones and tablets grew by 55% year on year and represented 30% of total sales.
· The release of new gaming platforms, such as social networks, smart TVs and next-generation set-top boxes should provide the company with strong growth opportunities in the coming years.
Therefore, Gameloft is renewing its growth target for sales and profitability over the full year of 2011. In the long term, the company appears to be in an ideal position to benefit from the rapid emergence of digital distribution of video games on mobile phones, tablets, social networks, TVs and consoles.
Sales for the third quarter will be published on November 2, 2011, after the market closes.
