Ubisoft reports full-year 2010-11 results

Ubisoft® reports full-year 2010-11 results 

  • Full-year sales up 19% to €1,039 million 
  • Stronger financial performance: 
    • Current operating income1: €29 million
    • Net Income excluding non-recurring items1: €21 million
    • Net loss: €(52) million
  • Net cash position: €99 million
  • Initial targets for fiscal 2011-12

Paris, May 12, 2011 – Today, Ubisoft released its sales and earnings figures for the fiscal year ended March 31, 2011.  

Key financial data

In € millions2010-11%2009-10%
Sales1,038.8 871.0 
Gross profit673.664.8%512.858.9%
R&D expenses*(363.5)-35.0%(309.4)-35.5%
Selling expenses(212.9)-20.5%(196.1)-22.5%
General and Administrative expenses(67.9)-6.5%(66.9)-7.7%
Total SG&A expenses(280.7)-27.0%(263.0)-30.2%
Current operating income/(loss)129.42.8%(59.6)-6.8%
Non-recurring reorganization charges(95.9)  
Operating income/(loss)(80.4)-7.7%(72.1)-8.3%
Profit/(loss) for the period(52.1)-5.0%(43.7)-5.0%
Diluted earnings/(loss) per share (in €)(0.54) (0.45) 
Diluted earnings/(loss) per share before non-recurring items and stock-based compensation (in €)0.22 (0.33) 
Cash flows from operating activities64.6 (89.9) 
R&D investment expenditure*400.4 353.5 
Net cash position99.2 41.3 

* Including royalties but excluding future commitments.


Yves Guillemot, Chief Executive Officer, stated “Ubisoft saw a sharp upturn in revenue and current operating income1 in 2010-11 and strengthened its financial position. The Casual segment returned to significant levels thanks to our leadership positions in the dance game segment, on Kinect and on 3DS. At the same time, we continued to make progress in the Online segment, doubling revenue and above all improving the management of our online communities, our service offering, and their monetization. Lastly, in the High-Definition segment, we scored another success with Assassin’s Creed Brotherhood. This performance was achieved thanks to our continuing creativity and an innovative multiplayer mode which proved highly popular with the large community of players who are increasingly engaged with the franchise. Our objective now is to replicate this success for our other strong franchises”.


Sales for the fourth quarter of 2010-11 came to €178 million, down 15.2% (down 16.2% at constant exchange rates) on the €210 million recorded for the same period of 200910.

Full-year sales for fiscal 2010-11 totaled €1,039 million versus €871 million for fiscal 2009-10, representing an increase of 19.3% (+12.9% at constant exchange rates). 

Fourth-quarter sales were higher than the guidance of around €159 million issued when Ubisoft released its sales figures for the third quarter of 2010-11. This fourth-quarter performance reflects the following:

  • Continued solid sales for our dance titles.
  • Successful launches for our 3DS titles, with a leading position on the console since its launch. 

Main income statement items

Gross profit represented a significantly higher percentage of sales in 2010-11, coming in at 64.8% (€673.6 million) compared to 58.9% (€512.8 million) in 2009-10 and above the previously announced guidance of around 64%. This performance was due to the solid level of sell-through sales in the fourth quarter which enabled us to achieve higher than-expected average prices. 

Current operating income before stock-based compensation amounted to €29.4 million, representing a sharp increase on the €59.6 million loss reported in 2009-10. The 201011 figure reflects the combination of the following factors:

  • A €160.8 million increase in gross profit.
  • A €54.1 million increase in R&D costs to €363.5 million from €309.4 million in 2009-10. As a percentage of sales, however, these costs decreased slightly to 35.0% from 35.5%. They came in higher than the previously announced guidance of between €340 million and €350 million due to anticipated R&D depreciation recorded on a title scheduled for release in 2011-12.
  • A €17.7 million absolute-value increase in total SG&A expenses to €280.7 million from €263.0 million in 2009-10 but a reduction as a percentage of sales to 27.0% from 30.2%. Overall, total SG&A expenses came in below the previously announced guidance of between €285 million and €295 million as a result of tight cost control:  

− Variable marketing expenses represented 15.4% of sales (€160.4 million) compared with 16.5% (€143.6 million) in 2009-10.

− Structure costs represented 11.5% of sales (€120.3 million) compared with

13.7% (€119.4 million) in 2009-10.


Non-recurring reorganization charges

Ubisoft has taken measures to adapt its structure to major changes in the industry by reorganizing the roles and operations of its studios, which has resulted in the termination of certain projects. As a result of these terminations, as well as the decision to cease the sale of figurines in newsstands in Spain and Italy, which was made before the end of the fiscal year, the Company recognized €95.9 million in non-recurring reorganization charges, including €33.8 million in the second half of 2010-11. The total amount breaks down as €85.4 million for Research & Development and €10.5 million in other charges. These non-recurring charges had a limited impact on cash flow.

Taking into account the above-mentioned €95.9 million in non-recurring charges, Ubisoft ended the year with an operating loss of €80.5 million, compared with a €72.1 million operating loss in 2009-10. This figure includes stock-based compensation of €12.6 million for 2010-11 (€12.1 million in 2009-10).

Net financial expense came to €3.7 million (compared with net financial income of €4.7 million in 2009-10), primarily breaking down as follows:

  • €5.0 million in financial charges (€0.5 million in 2009-10). This figure included €3.6 million related to the sale of tax carry-back receivables. 
  • €4.3 million in foreign exchange losses, versus foreign exchange gains of €5.2 million in 2009-10.
  • A €5.7 million positive impact from the sale of 2.8 million Gameloft shares. Following this transaction, 6.3 million Gameloft shares are still recorded as part of the Equity Swap.

Ubisoft reported a net loss of €52.1 million for 2010-11, representing a diluted loss per share of €0.54, versus a net loss of €43.7 million and a diluted loss per share of €0.45 for 2009-10. 

Excluding non-recurring items and before stock-based compensation, the Group would have generated profit for the period amounting to €21.4 million, representing diluted earnings per share of €0.22, versus a €31.6 million net loss and a diluted loss per share of €0.33 in 2009-10. 

Main cash flow statement and balance sheet items (unaudited)

Cash flows from operating activities came to €64.6 million versus a negative €89.9 million in 2009-10, representing a significant year-on-year improvement. This reflects €34.2 million in cash flow from operations compared with a negative €56.7 million the previous year, as well as a €30.4 million reduction in working capital requirement against a €33.2 million increase in 2009-10.  

At March 31, 2011, Ubisoft had a net cash position of €99.2 million versus €41.3 million on March 31, 2010. The year-on-year rise primarily reflects: 

  • The above-mentioned €64.6 million in cash flows from operating activities, which includes €11.0 million from the sale of Gameloft shares and €31.0 million sales of Canadian tax credit.
  • €21.9 million from sales of tax carry-back receivables.  
  • €22.0 million in purchases of tangible and intangible assets. 



Full-year 2011-12

Yves Guillemot stated “In fiscal 2011-12 we intend to pursue our growth strategy founded on our three key pillars.

The Casual segment offers enormous potential and in the past five years we have demonstrated our ability to seize the numerous opportunities available. Going forward, we intend to consolidate our leadership position in dance games, particularly by launching several titles and releasing them also on Kinect and Move. We will also continue to offer new experiences to casual players through new platforms such as the 3DS, as well as through innovative titles such as Rocksmith. 

In the High Definition segment, the 2011-12 line-up will be particularly rich in established brands, offering a favorable comparison with 2010-11. It will notably include Assassin’s Creed Revelations, which further demonstrates the strength of our cross-studio collaboration model put in place for the franchise – a model that offers both creativity for gamers and a steady flow of releases. Our High Definition line-up will also include, among others, Driver San-Francisco, Ghost Recon Future Soldier, Rayman Origins, and an adaptation of the Tintin movie. The vast majority of these High Definition games will have robust multiplayer modes. In order to increase the revenue-generation potential for each of these titles, we also offer gamers additional online content and services, in particular through Uplay, as well as the possibility to continue and extend their experience, wherever they are and whatever platform they are using.

Lastly, we continue to grow our Online segment with the release of numerous gamer and casual titles. We intend to capitalize on the experience gained in the past year and on the strength of our franchises. For example, we plan to launch a free-to-play world based on our highly popular franchise for young girls, Imagine, which will be an addition to our recurring revenue from Settlers Online and Might & Magic Heroes Kingdoms. In the coming days, we will officially announce an ambitious project on PC based on one of our top gamer franchises that will illustrate our capacity to take advantage of new business models. In addition, Trackmania2 Canyon – the sequel to Trackmania, the industry’s most successful online racing game – will be available as a closed beta in the next few months.”

Yves Guillemot concluded by saying, “The efforts we have made over the past few years to achieve greater productivity in our High Definition segment combined with investments we have made in the high-potential Casual and Online segments, should enable us to post further growth in both sales and current operating income in 2011-12 and 2012-13.”

The Group expects 2011-12 sales to come in at between €1,040 million and €1,080 million and recurring operating income1 to amount to between €40 million and €60 million. This estimate is based on the following: 

  • A slight growth of the High Definition segment sales over the €565 million achieved in 2010-11.
  • A slight decrease of the Casual segment sales compared to the €435 million achieved in 2010-11.
  • A strong growth of the Online segment sales over the €38 million achieved in 2010-11.
  • A one or two percentage point increase in gross margin. 


Sales for the first quarter of 2011-12

The first three months of 2011-12 will see the following main releases:  

  • Michael Jackson The Experience for Kinect and Move
  • Child of Eden™ for Kinect
  • Might and Magic Clash of Heroes and Outland for XBLA, PSN

As the line-up for first-quarter 2011-12 is not as extensive as for the same period of 2010-11 – which saw the launch of Splinter Cell Conviction® and Prince of Persia The Forgotten Sands™ – first-quarter 2011-12 sales are expected to come in at around €90 million, approximately 44% lower than in first-quarter 2010-11.

Significant events 

Market share: In the first three months of calendar 2011, Ubisoft was the number 3 independent editor in the United States with 8.2% market share (compared with number 4 and 5.4% one year earlier) and number 3 in Europe with 8.5% market share (compared with number 3 and 8.7%).

Increased financing capacities: The signature of a new credit line of €25 million over 2 years, brings the total amount of available credit line to more than €300 million. 


Investor relations                                                               

Jean-Benoît Roquette

Head of Investor Relations

+ 33 1 48 18 52 39



This statement may contain estimated financial data, information on future projects and transactions, and future business results/performance. Such forward-looking data are provided for estimation purposes only. They are subject to market risks and uncertainties and may vary significantly compared with the actual results that will be published. The estimated financial data have been presented to the Board of Directors and have not been audited by the Statutory Auditors. (Additional information is specified in the most recent Ubisoft Registration Document filed on June 30, 2010 with the French Financial Markets Authority (l’Autorité des marchés financiers)).

About Ubisoft: 

Ubisoft is a leading producer, publisher, and distributor of interactive entertainment products worldwide and has grown considerably through a strong and diversified line-up of products and partnerships. Ubisoft has offices in 26 countries and has sales in more than 55 countries around the globe. It is committed to delivering high-quality, cutting-edge video game titles to consumers. For the 2010-11 fiscal year Ubisoft generated sales of €1,039 million. To learn more, please visit: www.ubisoftgroup.com.

© 2011 Ubisoft Entertainment. All Rights Reserved. Ubisoft and Ubisoft logo are trademarks of Ubisoft Entertainment in the U.S. and/or other countries.  © 2011 Triumph International, Inc.  All Rights Reserved.  The Michael Jackson name and associated logos are trademarks of Triumph International, Inc. in the U.S.

and/or other countries.

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