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News 
Ubi Soft Meets with Fiscal Success
- Posted By Michael
Loewer, 06.26.2002
Ubi Soft Entertainment, one of the world's largest videogame publishers, today announced year-end results, with both sales and profit up significantly.
Significant Rise In Profitability
During fiscal year 2001/2002, Ubi Soft's sales, in line with its forecasts, were up 42% from the previous year (326 million dollars). Internal growth was 18%, twice that of the world video game market. The contribution of acquisitions in 2000/2001 was higher than the Group's target. It represented 108 million euros. In the United States, in particular, sales increased 112% and now represent 37% of Ubi Soft's business. Sales in Europe were up 21%, and account for 57% of consolidated sales.
Gross margin has grown 50% in value terms. Expressed as a percentage of sales, it has risen by 3 points over 2000/2001. Operating income is up 292%, due to continued gains in productivity and good control of operating expenses. Thus, sales per employee grew 38% to reach 194,000 euros, after an increase of 26% between 1999/2000 and 2000/2001. Control of operating expenses is confirmed by their slower increase (+34%) vs. sales growth (+42%).
The reduction in financial income is attributable mainly to greater indebtedness, following acquisitions made in 2000/2001, and to provisions for depreciation of minority interests (2 million euros). The exceptional income is essentially due to a gain of 3.8 million euros arising from litigation with the American company Take 2, and to a 1.8 million euro provision for bad debts written to account for the bankruptcy of the American distributor K Mart.
Before amortization of goodwill and other intangibles, net income comes to 13.4 million euros (11.8 million dollars) or +168% over fiscal year 2000/2001.
Outlook
Ubi Soft begins fiscal year 2002/2003 with several hits in its portfolio, such as:
-- Tom Clancy's Splinter Cell(TM), voted best action-adventure game at the E3 trade show last May; the game will benefit for its launch from an exclusive partnership with Microsoft;
-- Rayman(R)3 Hoodlum Havoc: the third sequel of the Rayman series, of which the first two episodes sold more than 11 million copies worldwide;
-- Tom Clancy's Rainbow Six(TM)Raven Shield: the third episode in the Rainbow Six series, which has already sold more than three million units. This is one of the first ever online multi-player console games;
-- XIII: this game, which will provide an original treatment of a comic strip in a video game, is the first episode taken from the famous series that sold more than 6.5 million copies;
-- The Sum of all Fears(TM): a game designed from the film adaptation of Tom Clancy's best-seller;
-- Tom Clancy's Ghost Recon(TM): voted "game of the year 2001" on PC by PC Gamer magazine, it will appear as an online multi-player console game in 2002.
These different games will be launched on all new-generation platforms. Ubi Soft plans to sell nearly 6 million units during the fiscal year, which will end on March 31, 2003.
Ubi Soft is enjoying the still-robust video-game market in the United States and in Europe. However, it is also faced with a gloomier economic situation in Europe, and must take into account the impact of the euro's rise against the dollar. In this context, the Group plans to continue growing while improving profitability. During fiscal year 2002/2003, the Group's activity level, excluding outside growth, should increase by 17% to 22%, giving sales between 430 and 450 million euros (380 and 398 million dollars). It should be noted that the release schedule of some games is likely to intensify the seasonal nature of results. As such, sales for the first half should reach about 100 million euros, including sales of about 36 million euros in the first quarter.
This performance validates the internal development and brand-building strategy favored by Ubi Soft. This strategy now positions the Group very favorably, not only for the year in progress, but also for 2003/2004, with many major titles in the pipeline. In the long term, and in addition to selective acquisitions, it will help Ubi Soft achieve its objective of being one of the world's top five publishers by 2005/2006.
Sales for the first quarter of 2002/2003 will be released on August 2, 2002.
--End Press Release
Editor-in-Chief Michael Loewer, out.
Source: Press Release
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