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Gameloft: Current Operating Income of EUR3.3M, up 15% and in Line With Expectations

Posted on: Thursday, 19 March 2009, 13:11 CDT

PARIS, March 19 /PRNewswire-FirstCall/ -- 2008 Annual Results

Gameloft's financial statements for the year ending 31 December 2008 break down as follows: In EURM 2008 2007 Turnover 110.3 96.1 Other Income 0.3 0.0 Cost of goods sold (11.1) (9.0) R&D (57.6) (51.8) Sales & Marketing (30.1) (23.9) Administration (9.2) (7.6) Other income and expenses 0.7 (0.8) Current operating income* 3.3 2.9 Stock-based compensation (2.7) (3.0) Other operational revenues and expenses (0.3) (0.2) Operating income 0.4 (0.3) Financial result (1.2) (1.5) Tax expense (0.9) (2.3) Group Share Net Income (1.8) (4.1) *before stock-based compensation

Gameloft achieved consolidated revenues of EUR110.3 million for 2008, up by 15% from the previous year. Mobile games accounted for 93% of the company's annual sales, while the console game business covered the remaining 7%.

The current operating income for 2008 reached EUR3.3 million, up 15% with 2007. The current operation margin stands at 3.0% and is in line with expectations.

The annual impact from expensing stock options is EUR2.7 million. This charge has no impact on the company's equity and cash level.

Interest income amounted to EUR(1.2) million and is mainly comprised of exchange rate losses, due to the high volatility of the American dollar and the Pound Sterling in 2008. Annual net income stands at EUR(1.8) million.

Healthy financial position

Gameloft's financial position is very solid at 31 December 2008. The company's equity stood at EUR49.4 million and net cash was EUR10.7M. Self-financing capacity is largely positive and reached EUR2.4 million over the full year. Gameloft therefore has the financial resources necessary for its international growth strategy.

Main events of 2008 - For the 4th year in a row, Gameloft has reached top rating for the best mobile game publishers. - Gameloft now has a catalogue of 27 games for Apple iPhone and iPod touch. Of these 27 games, 16 are or have made it to the top 10 paid games, and some games are still in these lists 6 months after their release. - Gameloft has sold over two million games on the App Store in just eight months. - Gameloft has launched 14 games for Google's Android - Gameloft's games are the best referenced and the most widely sold on the Smartphones (the next generation Internet phones) released in 2008 - Gameloft has had a stable staff base since 2007, with 4,000 employees at the end of 2008, including 3,300 creators. - New licenses have been added successfully to Gameloft's catalogue, such as Spiderman, Terminator Salvation, Ferrari, NBA, The Oregon Trail. - The brands created by Gameloft generated 61% of the company's downloads in 2008 - Gameloft further consolidated its distribution network in 2008, and now has over 180 operators and over 150 affiliates distribute our games in more than 80 countries throughout the world.

Outlook for 2009

With activity up by 15% in 2008 and especially by 31% in the last quarter, Gameloft seems to be weathering the worldwide economic slowdown quite well:

- Gameloft is probably the player that has benefitted most from the innovations introduced by historical phone manufacturers such as Nokia and Samsung and from the arrival of new dynamic players in the market such as Apple and Google - Gameloft continues to win over substantial market shares in Smartphones along with traditional Java and Brew phones - Gameloft is one of the very rare players in the market that has the resources and know-how allowing it to be present systematically at the launch of all the new consoles with downloading platforms (PlayStation Network, PSP Store, Nintendo WiiWare, etc).

Gameloft is expecting growth in 2009 in terms of sales as well as in terms of profitability.

Sales for the first quarter of 2009 will be published on April 28, 2009 after the close.

Disclaimer

This press release may contain estimated financial data, information on future operations and projects, and on future economic performance. These projected items are provided on the basis of a forecast. They are subject to market risks and uncertainties and can vary substantially with the actual results that will be published. Estimated financial data was presented at the Board of Directors and has not been reviewed by the Auditors. (Additional information is provided in Gameloft's latest Reference Document, filed on June 6, 2008 with the Autorite des marches financiers [French Financial Services Authority]).

About Gameloft

Gameloft designs video games for the iPhone, iPod touch, all smart phones and mobile phones, Nintendo Wii Ware and Nintendo DSi, Microsoft's Xbox LIVE Arcade, Sony PSP Store and Sony PlayStation Network.

Fully designed and developed internally, Gameloft's games enjoy scores awarded by specialized media exceeding 79%, year after year. As such, Gameloft is recognized as the best developer in the industry.

All of the games are available through digital distribution. Thanks to agreements with all of the main telecom operators, phone manufacturers and specialized distributors, as well as its http://www.gameloft.com shop, Gameloft's games are available in 80 countries.

Partnership agreements with major licensors such as Ubisoft Entertainment, Universal Pictures, ABC, Touchtone Television, Dreamworks Animations SKG, Endemol, 20th Century Fox, Viacom, Sony Pictures, Warner Bros., FIFPro, Ferrari, Roland-Garros, Gus Hansen, Kobe Bryant, Derek Jeter, Robinho, Reggie Bush, Chuck Norris, Patrick Vieira, Christophe Dominici and Jonny Wilkinson allow Gameloft to associate its games with strong international brands. In addition to these brands, Gameloft has its own brands, such as Block Breaker Deluxe, Asphalt: Urban GT and New York Nights.

Gameloft has locations in New York, San Francisco, Seattle, Montreal, Mexico, Buenos Aires, Bogota, Caracas, Sao Paulo, Santiago, Paris, London, Dusseldorf, Copenhagen, Milan, Madrid, Lisbon, Vienna, Warsaw, Bucharest, New Delhi, Kuala Lumpur, Jakarta, Peking, Tokyo, Hong Kong, Seoul, Singapore and Sydney.

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

P&L (in thousands of euros) 2008 2007 Revenues 110 332 96 071 Other revenue from the activity (excluding capitalized R&D) 259 40 Cost of sales -11 129 -9 036 R&D (including capitalized R&D) -57 568 -51 809 Sales and Marketing -30 068 -23 898 Administration -9 196 -7 637 Other operating income and expenses 714 -834 Current operating income* 3 344 2 897 Stock-based compensation -2 696 -2 995 Other income and expenses -295 -168 Operating income 352 -267 Cost of net financial indebtedness 197 620 Interest income 5 033 3 078 Interest expense -6 458 -5 197 Financial result -1 228 -1 499 Income Tax -933 -2 315 Net income -1 809 -4 080 . Group's share -1 809 -4 080 Income per share -0,02 -0,06 Diluted income per share -0,02 -0,05 BALANCE SHEET (in thousands of euros) 31/12/2008 31/12/2007 ASSETS Net intangible fixed assets 11 228 7 154 Net tangible fixed assets 5 083 5 345 Non-current financial assets 2 674 2 288 Other non-current assets 1 950 627 Total non-current assets 20 935 15 413 Inventory 2 428 70 Client receivables 35 143 30 485 Investment securities 2 507 6 266 Cash 8 967 7 794 Other current assets 7 001 5 929 Total current assets 56 046 50 544 TOTAL ASSETS 76 981 65 957 LIABILITIES Capital 3 680 3 653 Issue premium 63 790 62 860 Reserves -16 225 -15 240 Result -1 809 -4 080 Shareholders' equity 49 436 47 194 Non-current liabilities 1 298 1 224 Current liabilities 26 247 17 539 TOTAL LIABILITIES 76 981 65 957 CASH FLOW STATEMENT (in thousands euros) 2008 2007 Operating transactions Net income -1 809 -4 080 Depreciation of tangible and intangible fixed assets 10 283 6 852 Variation of provisions 1 120 48 Result from stocks options and assimilated 2 696 2 995 Variations in deferred taxes and taxes paid -568 1 190 Sales of assets 384 345 Capitalized R&D expense -5 962 -3 537 License acquisition -3 751 -3 843 Self-financing capacity 2 393 -29 Change in stocks -2 359 41 Change in operating receivables -7 053 -4 782 Change in operating debts 5 811 3 265 Change in the working capital requirement -3 601 -1 476 Operating cash flow -1 208 -1 505 Transactions linked to investments Acquisitions of intangible fixed assets -662 -169 Acquisitions of tangible fixed assets -2 796 -4 539 Acquisition of other fixed financial assets -371 -1 822 Acquisition of controlling interests -352 -64 Repayment of loans and other capital 441 501 assets Change in scope 120 -113 Other transactions 74 1 Total transactions linked to investments -3 546 -6 206 Transactions from financing Reimbursement of loans -42 -136 Capital increase 27 115 Increase in the issue premium 930 4 268 Change in shareholders' current accounts 1 0 Total flows from financing transactions 916 4 248 Change in cash flow -3 838 -3 463 Net cash flow at the beginning of the year 13 938 18 660 Impact of conversion differentials 649 -1 259 Net cash flow at the end of the year 10 748 13 938 Contact: Anne-Laure Descleves Head of Communications Tel +33-1-5816-2082 anne-laure.descleves@gameloft.com For more information, go to http://www.gameloft.com Follow the Group's news on http://twitter.com/Gameloft Follow our financial information on http://twitter.com/Gameloft_IR Media, follow our press information on http://twitter.com/Gameloft_IR

SOURCE Gameloft

Source: PR Newswire

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