Ubisoft have revealed their financial performance for the first half of 2011, and the French publisher has managed to beat their initial targets by an impressive 30%.
Sales for the first half of 2011-12 came to €249 million, down 4.6% when compared with the €261 million recorded for first-half 2010-11. The company’s second quarter seems to have been their strongest, with the publisher singling the period out for having sales of €146 million, up 47.5% over the €99 million made in the same period of 2010-11. This strong quarter is partly attributed to a “better-than-expected performance” by the Online segment, which rose 132% to €29 million due to The Smurfs on Facebook, From Dust and the launch of Trackmania 2 Canyon, among other games. Overall, online revenues were up 85% in the first half, to €30 million, making up 12% of total sales – twice as much as the 6% in the same period of 2010-11.
Yves Guillemot, Chief Executive Officer, said about the half-year:
First-half sales have come in around 30% higher than our initial targets. This performance reflects: a 85% growth in our Online segment; a solid showing by our back catalog, driven by Just Dance, Michael Jackson The Experience and Assassin’s Creed Brotherhood, which confirms players’ enthusiasm for these flagship brands; and better-than-expected sales for Driver San Francisco, boosted by very good reviews. Our strong sales figure drove another sharp increase in gross profit and enhanced our earnings performance.
While sales were lower than the year before, gross profit rose by €12.2 million. One of the reasons for this was an €11.7 million reduction in R&D expenses, which came to €86.7 million, instead of €98.4 million the year before. This was due to the fact that fewer High Definition games were released during the period. Current operating loss rests at €49 million so, despite the reduction in costs, the company still made a loss.
Guillemot also reflected on the year ahead:
Our line-up for the second half of the fiscal year includes established franchises for both hardcore and casual gamers. Our games will target the High-Definition platforms – which are seeing continued progress – as well as the high-growth Online segment and the high-potential categories in the Casual segment. Thanks to the potential of those titles, combined with our significantly enhanced quality levels and solid first-half performance, we are confident that we will be able to achieve our targets for full-year 2011-12.
Concluding:
We are now starting to reap the benefits from the work we have undertaken to ensure more frequent releases of our High Definition franchises with very high quality levels, as well as from the immense opportunities offered by the Casual segment and our continued strong growth in the Online segment. All of these factors will be key to Ubisoft’s expected financial performance improvement and return to positive cash flow generation in full-year 2012-13.
The company expects third-quarter 2011-12 sales to amount to between €580 million and €620 million, compared with the third-quarter 2010-11 sales figure of €600 million.
