Gameloft's 2007 Full Year Results
Gameloft has officially disclosed it's full year results over 2007. The company generated a 40% growth in sales and the operating income is 15% up to € 2.9 million.
Gameloft’s revenues increased by 40% over the 2007 fiscal year. On a comparable consolidation and exchange rate basis, full-year growth would have reached 46%, the same growth as in 2006.
Over the full year of 2007, operating income before stock-based compensation reached €2.9M, up 15% compared to 2006. The operating margin stands at 3.0% for 2007, slightly down compared to 2006. This small decrease in the operating margin is mostly due to the company's significant investments dedicated to R&D in 2007. Moreover, the company has booked nearly €2M in exceptional and non recurring items which have negatively impacted the operating margin for 2007.
The annual impact from expensing stock options is €3.0M. This charge will have no impact on the company's equity and cash level.
Interest income amounted to €-1.5M and is mainly comprised of exchange rate losses, due to the drop in the American dollar. More than half of these losses are linked to intergroup accounting transactions and do not have any impact on the group's cash level.
Net profit before stock based compensation expenses stands at €-1.1M, significantly lower than in 2006 which had benefitted from an exceptional net capital gain of €20.4M following the sale of the jeuxvidéo.com web site.
Healthy financial position
Gameloft's financial position remains very solid. The company's equity increased by 7%, reaching €47M at December 31, 2007 and net cash was €14M. Gameloft, therefore, has the financial resources necessary for its international growth strategy.
Operating cash flow improved sharply in 2007 standing at €-1.7M compared to €-6.4M in 2006. The company, therefore, is in a position to self-finance its strong growth and aims at generating an operating cash flow close to breakeven or even positive during 2008.
Outlook for 2008
Additional investments made in 2007 have allowed the company to grow faster than all of its major competitors and reach the number one worldwide position in the industry. These strategic investments have also prepared the future growth of the company, especially in the “rich games” segment which was initially forecasted to launch in 2007, but has been postponed to 2008 by handset manufacturers. Gameloft currently benefits from:
- the industry’s largest development capacity, well beyond that of its competitors with nearly 3,400 developers in its studios. This allows Gameloft to release around 80 new games each year and its catalogue now has over 200 games covering 1,200 handset models;
- a unique know-how demonstrated by its ability to diversify on platforms such as iPod, Nintendo DS, Xbox Live Arcade, etc. and with games that innovate as well as caters to a mass market audience;
- strong licenses with many of its own brands that are among the bestselling mobile games worldwide (Asphalt: Urban GT, Block Breaker Deluxe, Miami Nights, Real Football, etc.) and thanks to recent partnerships with world-renown brands (Ferrari, CSI, Grey’s Anatomy, Wimbledon, etc.);
- the world's most complete distribution network with over 180 operators and 150 affiliates that distribute our games in more than 80 countries throughout the world.
Gameloft is in a position to confirm its financial sales growth objective for 2008 comprised between 25% and 30%, and operational margin before stock base compensation between 10% and 15% in 2008. This very significant increase in the operating margin will be achieved by stabilizing the staff and by benefiting from the first returns of strategic investments in 2007, especially on new patforms such as the Nokia N-Gage, the Apple iPhone or the Microsoft Xbox Live Arcade.
In the long term, Gameloft is in an ideal position to remain the number one mobile gaming company. With its successful investments, in a market that is predicted to reach nearly 4 billion potential consumers in 20101, the company expects to continue its steadfast growth and impact.
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