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
Paris (France), September 4, 2012 - Gameloft’s financial statements for the first half-year ending June 30, 2012, break down as follows:
|
In millions of € |
H1 2012 |
H1 2011 |
|
Sales |
95.2 |
76.8 |
|
Costof sales |
-13.7 |
-8.9 |
|
Gross profit
R&D
Sales & Marketing
Administration
Other operating income and expenses
|
81.5
-49.9
-17.4
-8.5
0.9
|
67.9
-37.0
-14.4
-7.1
-0.5
|
|
Current operating income |
6.7 |
8.9 |
|
Stock-based compensation
Other income and expenses
|
-1.2
-1.0 |
-1.0 0.0 |
|
Operating income |
4.4 |
7.9 |
|
Net financial income |
0.4
|
-1.3
|
|
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 Ice Age Village.
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, Playmobil Pirates,Littlest Petshop 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 Ice Age Village, 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.
