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Thursday 28 August, 2008

Gameloft

GAMELOFT Current Operating Income up 18% and Op...

PR Newswire/Les Echos/
 
                                                                               
                                                  Paris, August 28, 2008




Current Operating Income up 18% and
Operating Margin of 5.5% for the First Half of
2008
2008 Half-Year Results

Gameloft’s financial statements for the first half-year ending June 30, 2008 
break down as follows:


In € million                                                                 
    H1 2008                         H1 2007
Sales                                                                          
     50.3                            45.9
Other Income                                                                   
     0.2                              0.2
Cost of goods sold                                                             
     -4.1                            -3.8
R&D                                                                            
     -26.6                           -25.1
Sales & Marketing                                                              
     -13.8                           -10.5
Administration                                                                 
      -4.5                            -3.7
Other income and expenses                                                      
       1.3                            -0.7
Current operating income*                                                      
      2.8                             2.3
                                                                               
     -1.3                            -1.5
Stock-based compensation
Other operational revenues and expenses                                        
     -0.1                             0.0

Operating income                                                               
      1.4                             0.8

Financial result                                                               
     -1.3                            -0.1
Tax expenses                                                                   
     -0.9                            -0.6

Group Share of Net Income                                                      
     -0.8                             0.0
*before stock-based compensation

Gameloft achieved consolidated revenues of €50.3 million for the first half of
2008, up by 17% from the
previous year on a comparable exchange rate basis. Mobile games accounted for 
94% of first-half
revenues and the remaining 6% are related to Gameloft’s console game business
(Nintendo DS, Xbox
Live Arcade and Nintendo WiiWare).




  © 2008 Gameloft - All rights reserved - Gameloft and Gameloft logo are 
registered trademarks of Gameloft S.A. - All rights reserved.
The current operating income for first-half 2008 is in line with expectations, 
up 18% with H1 2007. The
operating margin stands at 5.5%, compared to 5.1% in the first half of 2007. 
This improvement in the
margin, despite a 29% increase in the average headcount over the period, 
highlights the leverage that
exists with the growth in revenues. The operational margin should therefore 
continue to improve over
the second half of the year and the company is confident in renewing its goal 
for operating profitability
over the full financial year 2008.

The half-year impact from expensing stock options is €1.3 million. This charge
will have no impact on
the company's equity and cash level.

Interest income amounted to €(1.3) million and is mainly comprised of exchange
rate losses, due to the
sharp rise in the Euro from January to June 2008. Net half-year profit stands 
therefore at €(0.8) million
but is expected to improve substantially over the full-year 2008 thanks to the 
anticipated operating
margin increase.

Healthy Financial Position

Gameloft's financial position has been very solid since June 30, 2008. The 
company's equity stood at
€47.3 million, net cash was €12.7 million and financial indebtedness 
remained at zero. The operating
cash flow reached €0.3 million in the first half of the year. The company 
therefore has the financial
resources necessary for its international growth strategy.

Outlook 2008

Gameloft continues to reap the fruit of its investments in its creative and 
distribution abilities. These
investments have allowed the company to grow faster than most of its major 
competitors and reach a
leading worldwide position in the industry. These strategic investments pave the
way for the future
growth of the company, especially in the “rich games” segment that was 
launched in 2008 on high-end
phones (iPhone, N-Gage, Instinct, etc.) and on downloading consoles (Wii, Xbox 
360 and PS3) which is
expected to fuel growth in the second half of 2008 and in following years.

Gameloft currently benefits from:
- the industry’s largest development capacity, well beyond that of its 
competitors with over 3,300
developers in its studios. This allows Gameloft to release around 80 new games 
each year. Its
catalogue comprises over 250 games covering 1,200 models of cell phones;
- a unique know-how demonstrated by its ability to diversify on platforms such 
as iPod, iPhone,
Nintendo DS and WiiWare and with games that innovate as well as cater to a mass
market audience.
Gameloft is currently positioned as one of the major suppliers of games for the
Apple iPhone and the
Nokia N-Gage. It managed to place between one to four games in the top ten best
selling iPhone
games in the US, Canada, the UK, France, Germany, Spain, Italy and Japan since 
the launch of the
AppStore in July 08;
- strong licenses with many of its own brands that are amongst the bestselling 
mobile games worldwide
(Asphalt: Urban GT, Brain Challenge, Midnight Pool, TV Show King, etc.) and new
partnerships with
world-renowned brands (Ferrari, NBA, Oregon Trail, The Mummy, etc.);
- the world's most complete distribution network with over 180 operators and 
over 150 affiliates that
distribute our games in more than 80 countries throughout the world.

Gameloft is therefore renewing its growth and profitability targets for 2008. In
the long term, the
company is in an ideal situation to occupy the top position in the industry with
its successful investments




  © 2008 Gameloft - All rights reserved - Gameloft and Gameloft logo are 
registered trademarks of Gameloft S.A. - All rights reserved.
in a market that is predicted to reach nearly 4 billion potential consumers in 
2010 1 . The company
expects to continue its steadfast growth and impact

Sales for the third quarter of 2008 will be published on Monday, November 3, 
2008.


    About Gameloft
    Gameloft develops and publishes video games for cell phones and consoles 
worldwide. Founded in 1999,
    Gameloft is now positioned as one of the most innovative companies in its 
field. Gameloft designs games for
    telephones incorporating Java, Brew and Symbian technologies, for which the
number of units should exceed
    four billion in 2012. Gameloft games are also available on WiiWare, DS, 
Microsoft Xbox LIVE Arcade, iPod and
    PCs.

    Partnership agreements with major rights holders such as Ubisoft 
Entertainment, Universal Pictures, ABC,
    Touchtone Television, Dreamworks Animations SKG, Endemol, 20th Century Fox,
Viacom, Sony Pictures,
    Warner Bros., FIFPro, Ferrari, Roland-Garros, Gus Hansen, Kobe Bryant, Derek
Jeter, Robinho, Reggie Bush,
    Chuck Norris, Patrick Vieira, Christophe Dominici and Jonny Wilkinson allow
Gameloft to associate its games
    with very strong international brands. In addition to these brands, Gameloft
has its own brands, such as Block
    Breaker Deluxe, Asphalt: Urban GT and New York Nights.

    Thanks to agreements with all of the main telecom operators, telephone 
manufacturers and specialized
    distributors, as well as its www.gameloft.com boutique, Gameloft's games are
distributed in 80 countries.

    Gameloft has locations in New York, San Francisco, Seattle, Montreal, 
Mexico, Buenos Aires, Paris, London,
    Koln, Copenhagen, Milan, Madrid, Lisbon, Vienna, Warsaw, Helsinki, 
Bucharest, New Delhi, Kuala Lumpur,
    Beijing, Tokyo, Hong Kong, Seoul, Singapore and Sydney. Gameloft is listed 
in Compartment B of the Paris
    Stock Exchange (ISIN: FR0000079600, Bloomberg: GFT FP, Reuters: GLFT.PA).



Contact:

Anne-Laure Desclèves
Head of Communications
Tel +33 (0)1 58 16 20 82
[email protected]

For more information, consult www.gameloft.com




    Source: Strategy Analytics
1




     © 2008 Gameloft - All rights reserved - Gameloft and Gameloft logo are 
registered trademarks of Gameloft S.A. - All rights reserved.
P&L (in thousands of Euros)                                                    
                           H1 2008                                H1 2007
Sales                                                                          
                             50 288                                45 858
Other revenues (including capitalized R&D)                                     
                                 180                                 211
Cost of sales                                                                  
                              -4 054                               -3 782
R&D                                                                            
                            -26 630                               -25 093
Sales and Marketing                                                            
                            -13 843                               -10 490
Administration                                                                 
                              -4 521                               -3 652
Other income and operating expenses                                            
                               1 334                                 -716
Current operating income                                                       
                               2 754                                2 336
Stock-based compensation                                                       
                              -1 262                               -1 535
Other operating revenue and expenses                                           
                                  -69                                 -44
Operating income                                                               
                               1 423                                 757
Cost of net financial indebtedness                                             
                                 108                                 251
Interest income                                                                
                               1 693                                 469
Interest expense                                                               
                              -3 103                                 -811
Financial result                                                               
                              -1 301                                  -91
Income Tax                                                                     
                                -888                                 -633
Net income                                                                     
                                -766                                  34
. Group's share                                                                
                                -766                                  34
Income per share                                                               
                               -0,01                                 0,00
Diluted income per share                                                       
                               -0,01                                 0,00

BALANCE SHEET (in thousands of Euros)                                          
                        30/06/2008                            31/12/2007
ASSETS
Net intangible fixed assets                                                    
                              9 816                                 7 154
Net tangible fixed assets                                                      
                              4 979                                 5 345
Non-current financial assets                                                   
                              1 883                                 2 288
Other non-current assets                                                       
                                754                                   627
Total non-current assets                                                       
                             17 432                                15 413
Inventories                                                                    
                                 31                                    70
Client receivables                                                             
                             30 832                                30 485
Investment securities                                                          
                              5 485                                 6 266
Cash                                                                           
                              7 255                                 7 794
Other current assets                                                           
                              4 729                                 5 929
Total current assets                                                           
                             48 332                                50 544
TOTAL ASSETS                                                                   
                             65 764                                65 957

LIABILITIES
Share Capital                                                                  
                              3 658                                 3 653
Additional paid-in capital                                                     
                             63 017                                62 860
Reserves                                                                       
                            -18 565                               -15 240
Net profit                                                                     
                               -766                                -4 080
Shareholders' equity                                                           
                             47 344                                47 194
Non-current liabilities                                                        
                                707                                 1 224
Current liabilities                                                            
                             17 713                                17 539
TOTAL LIABILITIES                                                              
                             65 764                                65 957




           © 2008 Gameloft - All rights reserved - Gameloft and Gameloft logo 
are registered trademarks of Gameloft S.A. - All rights reserved.
CASH FLOW STATEMENT (in thousands of Euros)                                    
                          H1 2008                                H1 2007
Operating Transactions
Net income                                                                     
                               -766                                   34
Depreciation of tangible and intangible fixed assets                           
                              4 579                                2 637
Variation of provisions                                                        
                                -73                                   63
Result from stocks options and assimilated                                     
                              1 262                                1 535
Tax expense                                                                    
                                176                                    5
Sales of assets                                                                
                                270                                   -2
Capitalized R&D                                                                
                             -3 082                                    0
License acquisition                                                            
                             -1 881                               -2 277
Operating cash flow before working capital                                     
                                484                                1 994

Change in stocks                                                               
                                 39                                   24
Change in operating receivables                                                
                                781                                 -445
Change in operating debts                                                      
                             -1 024                                  884
Change in working capital                                                      
                               -204                                  464

Operating cash flow                                                            
                                280                                2 458

Transactions linked to investments
Acquisitions of intangible fixed assets                                        
                               -213                                 -122
Acquisitions of tangible fixed assets                                          
                             -1 324                               -2 149
Acquisition of other fixed financial assets                                    
                               -155                               -1 495
Acquisition of controlling interests                                           
                                 -6                                  -27
Sale of fixed assets                                                           
                                                                      37
Repayment of loans and other financial assets                                  
                                346                                  232
Change in scope                                                                
                                 85                                  -52
Other                                                                          
                                 57                                  -55
Cash flows from investing activities                                           
                             -1 210                               -3 630

Transactions from financing
New long- and medium-term loans
Reimbursement of loans                                                         
                                -28                                  -26
Capital increase                                                               
                                  5                                   74
Increase in the issue premium                                                  
                                156                                2 708
Change in loans from shareholders                                              
                                                                     -47
Cash flows from financing activities                                           
                                133                                2 709

Net change in cash and cash equivalents                                        
                               -797                                1 538

Net cash flow at the beginning of the year                                     
                            13 938                                18 660
Impact of conversion differentials                                             
                              -491                                   201
Net cash flow at the end of the year                                           
                            12 649                                20 398




          © 2008 Gameloft - All rights reserved - Gameloft and Gameloft logo 
are registered trademarks of Gameloft S.A. - All rights reserved.

                         
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