UBISOFT REPORTS FISCAL YEAR 2006-2007 RESULTS
Today Ubisoft reported its results for the 2006-2007 fiscal year ended March
> 31, 2007.
> Sales were up 24 percent, the current operating income recently revised
> upwards to 38.3 million ($51.63 U.S.), net income reaches record level of
> 40.5 million ($54.60 U.S), cash flows from operating activities up to 53.2
> million ($71.72), positive net cash position up 120.3 million ($162.18), and
> the outlook for 2007 2008 confirmed.
> For more information, please see today's press release below. Euro to Dollar
> conversions have been made in the text of the document. Please assume the
> exchange rate of 1.34 Dollars = 1 Euro.
> UBISOFT REPORTS FISCAL YEAR 2006 2007 RESULTS
> Sales up 24 percent, Current operating income recently revised upwards to
> 38.3 million ($51.63 U.S.), Net income reaches record level of 40.5 million
> ($54.60 U.S), Cash flows from operating activities up to 53.2 million
> ($71.72), Positive net cash position up 120.3 million ($162.18), Outlook for
> 2007 2008 confirmed
> Paris, May 29, 2007 Today Ubisoft, one of the world's largest video games
> publishers, reported its results for the 2006-2007 fiscal year ended March
> 31, 2007.
> Yves Guillemot, Chief Executive Officer of Ubisoft stated "The sharp
> improvement in our operating profitability in fiscal 2006-07 reflects the
> diversity and strong performance of our games portfolio as well as tight
> control over SG&A fixed costs and marketing expenses. Thanks to our solid
> results and the effective containment of working capital requirements during
> the year, we were able to generate 53 million ($71.45) in cash flows from
> operating activities while at the same time continuing to implement our
> growth strategy, with R&D investments up 22%. With the best games line-up in
> its history, Ubisoft has laid the foundation for starting 2007-2008 in
> excellent conditions and is well-positioned to continue to gain market share
> and further increase its profitability in a high-growth sector."
> Main income statement items:
> Gross profit up 92 million ($124.03) (66.5% of sales):
> Sales for full-year 2006-07 came to 680.3 million ($917.14), up 24.4%, or
> 27.2% at constant exchange rates.
> Gross profit advanced 91.7 million ($123.62) to 452.4 million ($609.90),
> representing 66.5% of sales, versus 65.9% in 2005-2006. This rise was fueled
> by sales of new generation games (74% gross margin), which accounted for 60%
> of the total sales figure. The contribution of these games offset the
> expected decreasing margins of old generation games (56% margin), as well as
> the impact from growing distribution activities and back-catalog sales, which
> traditionally generate lower margins.
> SG&A expenses down 6.1 million ($8.22) (26.6% of sales), R&D expenses up
> 62,6 M (34.2% of sales):
> Current operating income before stock options surged to 38.3 million
> ($51.63) from 3.1 million ($4.18) in 2005-2006, representing 5.6% of sales
> versus 0.6%. This increase was primarily attributable to a combination of the
> following factors:
> The 91.7 million ($123.62) rise in gross profit.
> A decrease in SG&A expenses to 181.1 million ($244.15) (26.6% of sales)
> from 187.2 million ($252.37) the previous year (34.2% of sales), achieved
> due to a reduction in marketing expenditure and logistic costs to 87.3
> million ($117.69) from 95.5 ($128.75) million, as well as tight control
> over fixed costs which only edged up to 93.8 million ($126.45) from 91.7
> million ($123.62) the previous year.
> Partially offset by the expected increase in R&D expenses to 233.0
> million ($314.12) (34.2% of sales) from 170.4 million ($229.72) (31.1% of
> sales) in 2005-06.
> Net financial income of 18.0 million ($24.27), due to a 27.1 ($36.53)
> million gain arising from the Equity Swap :
> Net financial income came to 18.0 million ($24.27) (compared with a net
> financial charge of 9.1 million ($12.27) reported in 2005-06), breaking down
> as follows:
> 7.0 million ($9.44) in financial charges (10.3 million ($13.89) in
> 2005-06), including 1 million ($1.35) related to compound financial
> instruments, recorded in accordance with IFRS. This reduction reflects the
> year-on-year decrease in the Group's debt.
> 1.7 million ($2.29) in foreign exchange losses (6.3 million ($8.49) in
> A 27.1 million ($36.53) positive impact attributable to the Equity Swap
> (7.5 million ($10.11) in 2005-06).
> The contribution of equity accounted companies (Gameloft) amounted to 3.1
> million ($4.18), compared with 19.1 million ($25.75) in 2005-2006.
> Diluted earnings per share: 0.91 ($1.23):
> Ubisoft ended the fiscal year with net income of 40.5 million ($54.60),
> versus 11.9 million ($16.06) one year earlier. Diluted earnings per share
> amounted to 0.91 ($1.23).
> Main cash flow statement and balance sheet items:
> Cash flows from operating activities jumped from a negative 32.3 million
> ($43.54) in 2005-2006 to a positive 53.2 million ($71.72) in 2006-2007,
> reflecting the impact of the robust increase in operating income, coupled
> with the 7.4 million ($9.98) decrease of working capital requirement.
> On March 31, 2007, Ubisoft had a net cash position of 55.0 million ($74.15)
> compared with a net debt position of 65.3 million ($88.03) at March 31,
> 2006. This 120.3 million ($162.18) improvement was driven by the rise in
> cash flows from operating activities as well as:
> Capital increases totaling 107.2 million ($144.52).
> 2.9 million ($3.91) in translation adjustments.
> Investments of 43 million ($57.97), including 25 million ($33.70) for
> the acquisition of the Far Cry® and Driver® brands.
> Outlook for 2007-08 confirmed
> In 2007-08, Ubisoft will have the best line-up in its history with the new
> titles launched for seven of its successful franchises (including Brothers in
> Arms®, Tom Clancy's Splinter Cell® and Rayman®), 6 new brands (including
> Assassin's CreedTM, Tom Clancy's EndWarTM and HazeTM) and 4 licensed games
> (Surf's Up(TM), LostTM, NarutoTM, BeowulfTM). Ubisoft also expects to see a
> considerable ramp-up of games for the WiiTM and Nintendo DSTM systems thanks
> to a highly pro-active strategy in the casual gaming segment.
> As a result, Ubisoft is maintaining its previously announced targets:
> First-quarter sales of approximately 120 million ($161.78).
> Full-year 2007-2008 sales of around 800 million ($1,078.51 billion) and
> current operating income before stock options representing at least 8% of
> total sales.
> Financial calendar
> Release/event Date
> Annual General Meeting July 4, 2007
> First-quarter 2007-08 sales July 24, 2007
> These dates are subject to change and will be confirmed at a later stage.
> This statement may contain estimated financial data, information on future
> projects and transactions and future business results/performance. Such
> forward-looking data are provided for estimation purposes only. They are
> subject to market risks and uncertainties and may vary significantly compared
> with the actual results that will be published. The estimated financial data
> have been presented to the Board of Directors and have not been audited by
> the Statutory Auditors. (Additional information is specified in the most
> recent Ubisoft Registration Document filed on September 20, 2006 with the
> French Financial Markets Authority (l'Autorité des marchés financiers).
> About Ubisoft
> Ubisoft is a leading producer, publisher and distributor of interactive
> entertainment products worldwide and has grown considerably through a strong
> and diversified line-up of products and partnerships. Ubisoft has offices in
> 21 countries and sales in more than 50 countries around the globe. It is
> committed to delivering high-quality, cutting-edge video game titles to
> consumers. Ubisoft generated sales of 680.3 million for the 2006-07 fiscal
> year. To learn more, please visit www.ubisoftgroup.com.
> Key financial data
> In millions 2006/07 % 2005/06 %
> Sales 680.3 547.1
> Gross profit 452.4 66.5% 360.7 65.9%
> R&D expenses 233.0 34.2% 170.4 31.1%
> Sales, marketing, G & A expenses 181.1 26.6% 187.2 34.2%
> Current operating income before stock options 38.3 5.6% 3.1 0.6%
> Current operating income/(loss) 34.6 5.1% (1.4) -0.3%
> Net income 40.5 6.0% 11.9 2.2%
> Basic earnings per share (in ) 0.95 0.32*
> Diluted earnings per share (in ) 0.91 0.35*
> Cash flows from R&D investments 226.0 185
> Net cash/(debt) 55.0 (65.3)
> * after stock split by 2.
> Significant events of the 2006-07 fiscal year
> May 2006
> - 24 million equity increase following the conversion of warrants issued in
> - Ubisoft emerges victorious from the 2006 E3, with Assassin's Creed(TM)
> winning the Best Action/Adventure Game as part of the Game Critics Awards:
> Best of E3 2006; Brothers in Arms Hell's Highway(TM) recognized as Best First
> Person Shooter for Xbox 360(TM); and Tom Clancy's Rainbow Six® Vegas picking
> up the title of Overall Best First Person Shooter awarded by IGN.
> June 2006
> - Ubisoft opens a production studio in Sofia, Bulgaria.
> July 2006
> - Ubisoft acquires the Driver® franchise for 19 million, giving the Group a
> direct point of entry into the key driving games segment. This prestigious
> brand has already sold more than 14 million units throughout the world.
> - Marc Fiorentino is appointed to the board of Directors.
> August 2006
> - Ubisoft announces 7seven titles for the launch of Nintendo Wii(TM)
> including Red Steel(TM) and Rayman Raving Rabbids(TM).
> - Tom Clancy's Ghost Recon Advanced Warfighter® is ranked number one for solo
> and multiplayer games on the on-line games service Xbox Live®.
> October 2006
> - A new commercial subsidiary opens its doors in Mexico.
> November 2006
> - 24.2 million equity increase following the conversion of a portion of the
> Group's 2006 OCEANE bonds.
> December 2006
> - A two-for-one stock split is carried out on December 11, 2006.
> - GameInformer, the world's number one computer and video game magazine with
> a circulation of more than two million, ranks Ubisoft as the second leading
> international publisher and names Ubisoft Montreal as the fourth leading
> development studio for 2006.
> January 2007
> - Ubisoft reports third-quarter 2006-07 sales
> -Ubisoft ranked no. 1 independent publisher for Wii(TM) in Europe and the
> U.S. with market shares of 29.2% and 18% respectively. Rayman® and Red
> Steel(TM) positioned number two and three in terms of sales.
> -Ubisoft ranked no. 2 independent publisher for the Xbox 360(TM) system in
> Europe and the U.S., with market shares of 14.6% and 13.4% respectively. Tom
> Clancy's Rainbow Six® Vegas was the third best-seller in December in the
> United States and Tom Clancy's Splinter Cell Double Agent® was the leading
> seller in October. In addition, Tom Clancy's Ghost Recon Advanced War
> Fighter® was the third best-seller in the United States for the full calendar
> year 2006.
> February 2007
> - Ubisoft is honored at the 10th Academy of Interactive Arts & Sciences
> Achievement Awards (AIAS), winning the award for the First-Person Shooter of
> the Year for Tom Clancy's Rainbow Six® Vegas.
> - Ubisoft announces its new expansion plan in Quebec with the objective of
> creating 1,000 additional jobs by 2013 and opening a studio specialized in
> the creation of digital cinema content.
> - 50 million capital increase following the conversion into shares of 92% of
> Ubisoft's 2008 warrants (BSAR).
> April 2007
> - Further market share gains in the fourth quarter of the fiscal year.
> -Second independent publisher in Europe, with sales growth of 31% (compared
> with market growth of 15%), and market share of 8.6% versus 7.6% the previous
> year. Ubisoft was ranked number one independent publisher for Wii(TM),
> Nintendo DS(TM) and Xbox 360(TM).
> -Third independent publisher in the United States, with sales growth of 41%
> (compared with market growth of 28%) and market share of 6.7% versus 6.1% the
> previous year. Ubisoft was ranked number one independent publisher for
> Wii(TM) and number two for the Nintendo DS(TM) and Xbox 360(TM).
> - Ubisoft acquires Anno®. With 5 million units sold to date, Anno® is one of
> the most successful strategy games and a best-seller in the German market.
> This acquisition will strengthen Ubisoft's leading position for strategy
> games, Germany's most important segment, and will consolidate its number 2
> position in the country.
> - Announcement of Tom Clancy's EndWar(TM), a new brand in the Tom Clancy
> series of video games. Led by strategy veteran and Ubisoft creative director
> Michael de Plater, Tom Clancy's EndWar(TM) is being developed by a
> world-class team at Ubisoft's Shanghai studio whose members have experience
> developing Ubisoft's hit franchises including Tom Clancy's Ghost Recon®, Tom
> Clancy's Rainbow Six® and Tom Clancy's Splinter Cell®.
> May 2007
> - Ubisoft will develop "Beowulf", the video game based on Paramount Pictures'
> and Shangri-La Entertainment's movie, from Academy Award®-winning director
> Robert Zemeckis, with Angelina Jolie, Anthony Hopkins and John Malkovich.
> © 2006 Ubisoft Entertainment SA and Free Radical Design Limited. All Rights
> Reserved. Haze is a trademark of Ubisoft Entertainment and Free Radical
> Design. Free Radical Design and its associated logo are trademarks of Free
> Radical Design Limited. Developed by Free Radical Design Limited.
> © 2007 Ubisoft Entertainment. All Rights Reserved. Anno, Driver, Red Steel,
> Splinter Cell, Splinter Cell Double Agent, Assassin's Creed, Endwar, Rayman,
> Rayman Raving Rabbids, Ghost Recon, Ghost Recon Advanced Warfighter, Far
> Cry, Ubisoft, Ubi.com, and the Ubisoft logo are trademarks of Ubisoft
> Entertainment in the U.S. and/or other countries. Rainbow Six, Red Storm and
> the Red Storm logo are trademarks of Red Storm Entertainment in the U.S.
> and/or other countries. Red Storm Entertainment, Inc. is a Ubisoft
> Entertainment company.
> Surf's Up: TM & © 2007 Sony Pictures Animation Inc. All rights reserved. Game
> software excluding Sony elements: © 2007 Ubisoft Entertainment. All rights
> © 2006 Gearbox Software, L.L.C. All rights reserved. Published and
> distributed by Ubisoft Entertainment under license from Gearbox Software,
> L.L.C. Brothers in Arms Hell's Highway is a trademark of Gearbox Software and
> is used under license.
> © 2007 Ubisoft Entertainment. All Rights Reserved. Ubisoft and the Ubisoft
> logo are trademarks of Ubisoft Entertainment in the US and/or other
> countries. Under license by © Touchstone Television. All Rights Reserved.
> Beowulf: TM & © 2007 Paramount Pictures. All Rights Reserved. Game software:
> © 2007 Ubisoft Entertainment. All Rights Reserved.
> Naruto Rise of a Ninja © 2007 Ubisoft Entertainment. All Rights Reserved. ©
> 2002 MASASHI KISHIMOTO. This product is manufactured, distributed and sold
> under license from TV TOKYO CORPORATION & SHUEISHA INC and from VIZ Media,
> LLC. All Rights Reserved.
> Microsoft, Xbox, Xbox 360, Xbox Live, and the Xbox, Xbox 360, and Xbox Live
> logos are either registered trademarks or trademarks of Microsoft Corporation
> in the U.S. and/or other countries.
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> LOGO, Wii AND THE SEAL OF QUALITY ICON ARE TRADEMARKS OF NINTENDO.
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