If you’re like me, and you like to keep a track of how well your favourite game developers and publishers are doing, because it is there numbers and sales figures that ultimately dictate whether or not they can keep the doors open and continue bringing us the titles that they own. Earlier today Ubisoft reached out to there contacts ensuring us all that everything is going well and that they are still indeed a very stable financial and commercial platform. And I just have to say, that things are looking good for them. Over the past few years we have all noticed a sharp decline in the amount of new developers coming onto the scene as well as a marked increase in the amount of studios being closed due to poor sales, the most glaring example in my eyes being the closure of 38 STUDIOS who made the incredibly underrated title, Kingdoms of Amalur reckoning. But I can very happily tell you that this is not the case with anything related to the main Ubisoft franchises at the minute who have their heads well above the water. They came in at a staggering 279 Million Euros above their target estimates, and if that isn’t a win, I don’t know what is. I hope you understand the terminology regarding sales, otherwise you might struggle with this part.
SALES AND EARNINGS FIGURES
First-half sales outstrip targets, coming in at €279 million
Current operating loss : €58 million
Net loss excluding non-recurring items : €38 million
Revision of targets for full-year 2012-13
Paris, November 6, 2012 – Today, Ubisoft released its sales and earnings figures for the six months ended September 30, 2012.
In € millions   H1 2012-13    %        H1 2011-12    %
Sales   279.2  100%  248.5  100%
Gross profit    192.7  69.0% 158.4  63.7%
R&D expenses (96.8)Â Â -34.7% (86.7)Â Â -34.9%
Selling expenses(116.8)Â Â Â Â Â Â Â Â Â Â -41.8% (87.7)Â Â -35.3%
General and administrative expenses (37.2)Â Â Â -13.3% (33.2)Â Â -13.4%
Total SG&A expenses (154.0) -55.2% (121.0) -48.7%
Current operating income/(loss)1(58.1)Â Â Â Â Â Â Â Â Â Â -20.8% (49.3)Â Â -19.9%
Operating income/(loss)Â Â Â Â Â Â Â Â Â Â (60.2)Â Â -21.6% (54.8)Â Â -22.1%
Profit/(loss) for the period (32.3)Â Â Â Â Â Â Â Â -11.6% (37.1)Â Â -14.9%
Diluted earnings/(loss) per share (in €)           (0.34)  (0.39)
Diluted earnings/(loss) per share before non-recurring items1 (in €)(0.40)     (0.33)
Cash flows from operating activities   (244.9) (178.1)
R & D investment expenditure*Â Â Â Â Â Â Â Â Â 218.5Â Â 205.0
Net cash/(debt)Â Â Â Â Â Â Â Â Â Â Â (152.5) (101.4)
Key financial data
Yves Guillemot, Chief Executive Officer, has said “First-half sales were buoyed by the performance of Ghost Recon Future Soldier and the digital segment, as well as by the initial sell-in of Just Dance 4. This fed a strong increase in gross profit, which was up for the third year in a row. As expected, our marketing spend on major titles scheduled for release in the third fiscal quarter significantly pushed up selling expenses and led to a higher current operating loss. However, those large-scale marketing campaigns for Assassin’s Creed 3 and Far Cry 3 should pave the way for an exceptional year-end, with a significant increase in both sales and profitability.”
Sales
Sales for the first half of 2012-13 came to €279 million, up 12.1% (4.4% at constant exchange rates) compared with the €249 million recorded for the first half of 2011-12.
Second-quarter sales totalled €148 million versus €146 million in the same period of 2011-12, representing an increase of 1.4% (or a 4.8% decrease at constant exchange rates).
Sales in the second quarter of 2012-13 were higher than the guidance of around €110 million issued when Ubisoft released its sales figures for the first quarter of the fiscal year. Of this increase:
Around half was attributable to the performance of Tom Clancy’s Ghost Recon Future Soldier(TM) and back-catalogue sales as well as our online revenues, with the online segment reporting a 59% jump to €28 million. Around half derived from the initial sell-in of Just Dance® 4.
Back-catalogue sales contracted 9% to €97.5 million for the first half of 2012-13 overall, representing a marked improvement on the 41% decline experienced in the first quarter.
Main income statement items
Gross profit totalled €192.7 million (representing 69.0% of sales), up significantly on the €158.4 million gross profit figure (63.7% of sales) recorded for the first half of 2011-12. This increase – which gave a further boost to the steady rise in gross profit reported since fiscal 2010-11 – was fuelled by the high average selling price for Tom Clancy’s Ghost Recon Future Soldier , as well as the sharp rise in online sales, which have very high margins, and the growth of initial sell-in of Just Dance 4.
Now if you didn’t quite understand that, it simply means, that even though Ubisoft have met, and in some cases surpassed their estimations in relation to their sales, that there still may be some room for improvement. the sharp rise in online sales is of course thanks to their willingness to publish their content online and have it available as downloadable titles. If they can keep up this trend and make there up coming triple A* titles they should be able to see a huge increase in their already high online sales. Especially with the likes of Splinter Cell Blacklist due for release next year. So long story short, all is going well over at Ubisoft, so we can all enjoy their upcoming titles, safe in the knowledge that they are going nowhere.
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