Ubisoft First Half Fiscal 2009/10 Results

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The CliffNotes (TM probably) Version:

  • Sales €166 Million ($232.40)

  • Current Operating Loss of €78 Million ($109.20), in Line with Guidance

  • 2009-10 Targets Confirmed (Full-year sales of approximately €1,040 ($1456) million)

Now the longer version for those of you who like to pore over tons of numbers etc.

Key Financial Data






In € millions

H1 2009-10


H1 2008-09







Gross profit*





R&D expenses*





Selling expenses





General and administrative expenses





SG&A expenses*





Current operating income/(loss)2





Net income/(loss)





Diluted earnings/(loss) per share (in €)**





Diluted earnings/(loss) per share before non-recurring items and stock-based compensation (in €)**





Cash flows from R&D investments ***





Net cash/(debt)





* Supply chain costs that were previously included in SG&A expenses are now classified in gross profit. Costs related to Hybride that were previously included in SG&A expenses are now classified in R&D expenses.

** After the November 14, 2008 two-for-one stock split

*** Including royalties but excluding future commitments and stock-based compensation.

Yves Guillemot, chief executive officer of Ubisoft, stated: "First week sales of Assassin’s Creed II are up 32 percent with positive initial indications for the second week, combined with an overwhelmingly warm reception from gamers, validates our strategy of developing bigger franchises. Based on this initial data, Assassin’s Creed II looks well positioned to outstrip targets while our Wii games have been off to a more contrasted start in a less predictable market. Finally, sales of James Cameron’s Avatar: The Game should benefit from the launch of the movie which is expected to be the biggest blockbuster film of this holiday season."

Main Income Statement Items

Sales for the first six months of 2009-10 came to €166 ($232.40) million.

Due to the sharp drop in sales and the significant sales promotions on back-catalog games, gross profit was down sharply for the first half of 2008-09, both in absolute value terms, at €69.1 million ($96.74) versus €199.6 million ($279.44), and as a percentage of sales, representing 41.6 percent compared to 57.9 percent. Gross profit on games launched during the first six months of 2009-10 was higher than in the equivalent prior year period, whereas back catalog titles – which normally generate a gross profit – turned in a negative gross margin.

Ubisoft reported a €77.7 ($108.78) million current operating loss before stock-based compensation, in line with the previously announced guidance of €80 ($112) million, compared with current operating income of €33 ($46.2) million in the first half of 2008-09.

This current operating loss figure reflects the following combined factors:

  • A €130.5 ($182.7) million decrease in gross profit.

  • A €14.5 ($20.3) million reduction in R&D expenses due to a smaller number of games launches. Total R&D expenses came to €48.3 ($67.62) million, representing 29.1 percent of sales, versus €62.8 ($87.92) million (18.2 percent of sales) in the same period of 2008-09.

  • A €5.4 ($7.56) million contraction in SG&A expenses, which stood at €98.5 ($137.9) million (59.3 percent of sales) against €103.9 ($145.46) million (30.2 percent of sales) in first-half 2008-09.

  • Variable marketing expenses decreased in absolute value terms to €41.9 ($58.66) million (25.2 percent of sales) from €51.9 ($72.66) million (15.1 percent).

  • Structure costs rose to €56.6 ($79.24) million (34.1 percent of sales) from €52 ($72.8) million (15.1 percent), reflecting higher IT expenses and an increase in the number of sales and administrative staff.

Ubisoft recorded an operating loss of €83 ($116.2) million for the first six months of 2009-10 compared with operating income of €24.7 ($34.58) million one year prior. The first-half 2009-10 figure includes stock-based compensation amounting to €5.3 ($7.42) million (versus €8.1 ($11.34) million in the corresponding previous year).

Net financial income came to €6.6 ($9.24) million (versus €11.9 ($16.66) million in first-half 2008-09), breaking down as follows:

  • €0.0 ($0) million in financial income compared with €1.6 ($2.24) million in first-half 2008-09.

  • €6.6 ($9.24) million in foreign exchange gains against €1.7 ($2.38) million.

As a reminder, in first-half 2008-09, Ubisoft recorded an €8.5 ($11.9) million gain resulting from Calyon’s sale of its remaining Ubisoft shares.

Ubisoft ended the period with a €52 ($72.8) million net loss, representing a diluted loss per share of €0.54 ($0.76), compared with net income of €24 ($33.6) million (representing diluted earnings per share3 of €0.24) in the first six months of 2008-09.


Excluding non-recurring items (i.e. the Equity Swap) and before stock-based compensation, the net loss figure would have amounted to €46.5 ($65.1) million, representing a diluted loss per share3 of €0.48 ($0.67), versus net income of €26.3 ($36.82) million and earnings per share3 of €0.27 ($0.38) for first-half 2008-09.

Main Cash Flow Statement and Balance Sheet Items

Cash flows from operating activities came to a negative €212.9 ($298.06) million (versus a negative €68.9 ($96.46) million in first-half 2008-09), reflecting cash flow from operations* amounting to a negative €139.4 ($195.16) million (compared with a negative €52.6 ($73.64) million) and a €73.5 ($102.9) million increase in working capital requirement (against a €16.3 ($22.82) million increase in the first six months of 2008-09). As a reminder, in first-half 2008-09, the company’s working capital requirement was improved by the €59.3 ($83.02) million positive impact of the sale of Ubisoft shares held in connection with the Equity Swap.

At September 30, 2009, net debt stood at €67.3 ($94.22) million (compared with a net cash position of €72.2 ($101.08) million one year earlier). The change from the net cash position of €154.2 ($215.88) million at March 31, 2009 primarily reflects:

  • The above-mentioned €212.9 ($298.06) million net cash outflow from operating activities.

  • €9.5 ($13.3) million in purchases of tangible and intangible asset

  • Proceeds from the issue of capital amounting to €4.2 ($5.88) million following employee rights issues and the exercise of stock options.

  • A negative €2.9 ($4.06) million effect from exchange rate fluctuations. 

*Cash flows from operations includes future commitments on external development contracts and licenses which have no impact on cash flow generation and which decreased by €14.6 million. In the “Cash flow statement for comparison with other industry players”, “Costs of internal development and license development”, which amounted to €148.4 million, were reduced by this difference of €14.6 million. Before this adjustment, "Costs of internal development and license development” amounted to €163 million

2009-10 Targets Confirmed

Ubisoft confirms its previously announced targets for 2009-10, namely:

  • Third-quarter sales of around €540 ($756) million

  • Full-year sales of approximately €1,040 ($1456) million and current operating income before stock-based compensation representing at least 7 percent of sales.

 Sales figures for first-half 2009-10 were released on November 4, 2009.

 Before stock-based compensation.

 After the November 14, 2008 two-for-one stock split


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