Gameloft Announces Strong Growth in Sales and Net Profit; Net Profit Reaches 16.3M Euros.Operating Margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 11.4% Over the Second Half-Year PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. -- 2006 Annual Results Gameloft's financial statements for the year ending December 31, 2006 is as follows: In M[euro] > > 2006 IFRS 2005 IFRS Revenues > > 68.4 46.8 Other Income > > 0.6 0.1 Cost of revenues > > (5.0) (4.3) R&D > > (39.4) (24.9) Sales & Marketing > > (16.5) (11.7) Administration > > (5.6) (4.0) Other income and expenses > > 0.1 0.3 Current operating income* > > 2.5 2.3 Stock-based compensation > > (3.0) (2.5) Other operational revenues and expenses > > 19.7 1.4 Operating income > > 19.2 1.2 Financial income / (loss) > > (1.6) 0.8 Tax expense > > (1.3) (0.5) Group Share of Net Income > > 16.3 1.4 *before stock-based compensation > > Gameloft's total sales increased 46% over fiscal year 2006. The growth of download revenues stands at 78%. This is the company's core business, representing 91% of annual sales. As announced, the Group's current operating margin recorded a very sharp rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective during the last six months of 2006, reaching 11.4% over the second half-year of the period compared to -5.9% over the first half-year. As forecasted, this substantial improvement in operating profitability during the second half of the year is tied to the strong slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the number of employee growth and to the leverage effect on sales. Over the entire period for 2006, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (before stock-based compensation) reached [euro]2.5M, up slightly compared to 2005. The annual impact from expensing stock options is 3.0M[euro]. This charge will have no impact on the company's equity and cash level. The sale of its interest in Internet site jeuxvideo.com enabled Gameloft to make a net capital gain of 20.4M[euro]. Therefore, operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for fiscal 2006 reached [euro]19.2M compared to 1.2M[euro] in 2005. Financial income amounted to -1.6M[euro] and is mainly comprised of exchange rate losses, due to the decline in the American dollar. 2006 net profit stands at 16.3M[euro], a strong increase compared to 2005. Healthy financial position For the fourth year in a row, Gameloft's financial position improved significantly. The company's shareholder's equity doubled in one year and stands at 44.2M[euro]. On December 31, 2006, the cash level was 18.7M[euro] and financial indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. was reduced to zero. Gameloft therefore has the financial resources necessary for its international growth strategy. In the second half of 2006, cash flows from operating activities came close to the break even point. This illustrates that the company is in a position to continue to self-finance its strong growth and aim for operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. that is close to the break even point or even positive during fiscal 2007. Outlook 2007 Investments made since 2002 have put Gameloft in an ideal position for the upcoming fiscal years. The company currently has: - with over 2,300 developers, the industry's top development capacity, far ahead of all its competitors. That ability allows Gameloft to launch more then 50 games with worldwide potential on the market every year; - a unique know-how demonstrated by the numerous awards that our mobile games have won worldwide; - a catalogue of more than 120 games which generates recurrent revenue and which covers above 800 handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. models. No single game represents more than 10% of the company's sales; - strong licenses in addition to many of its own brands, which are part of the top selling mobile games (Block Breaker breaker: see wave, in oceanography. Deluxe de·luxe also de luxe adj. Particularly elegant and luxurious; sumptuous: deluxe accommodations; a de luxe automobile. adv. , Asphalt asphalt (ăs`fôlt, –fălt), brownish-black substance used commonly in road making, roofing, and waterproofing. Chemically, it is a natural mixture of hydrocarbons. : Urban GT, Miami Nights, Real Soccer, etc.) and with new world-renown brands (Driver, Lost, Desperate Housewives Desperate Housewives is an American television comedy-drama series, created by Marc Cherry, who also serves as show runner, and produced by ABC Studios - The Walt Disney Company's main television studio - and Cherry Productions. , Dear Or No Deal, etc.); - the world's most complete distribution network with over 160 operators and over 150 affiliates distribute our games in more than 70 countries throughout the world. Gameloft can therefore confirm its 2007 sales forecast Sales forecast A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors. , between [euro]90M and [euro]100M. After the sharp improvement in its operating margin over the second half of 2006, Gameloft is confident in renewing its goal for operating profitability exceeding 10% (excluding employee stock based compensation) for 2007. On the longer term, the company aims to become the leader in a market of 4 billion potential consumers in 20101, a position for which it has invested successfully since 2002. Sales for the first quarter of 2007 will be published on April 30, 2007. [TABLE OMITTED] [TABLE OMITTED] |
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