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Ubisoft Financial Results Beat Expectation, Recruiting 900 for New Studios

by Rainier on April 24, 2008 @ 2:03 p.m. PDT

Ubisoft reported sales figures for the Q4 of its fiscal year 2007/2008, with sales up 10%, full year sales up 36 % to $1.32 billion, mainly driven by strong performances from Tom Clancy’s Rainbow Six Vegas 2, The Games For Everyone Brands and Assassin's Creed. Ubisoft also announced it will be recruiting for 900 positions in the next 12 months for its various studios.

Sales for the fourth quarter of 2007-08 came to €217 million ($307.70 million), up 10.0 percent, or 20.3 percent at constant exchange rates, compared with the €197 million ($279.34 million) recorded for the same period of 2006-07.

Full-year sales for fiscal 2007-08 totaled €928 million ($1.32 billion), versus €680 million ($964.21 million) for fiscal 2006-07, representing an increase of 36.4 percent, or 42.9 percent at constant exchange rates.

Fourth-quarter sales outstripped the initial guidance of approximately €165 million ($233.96 million) issued on January 23, 2008. This strong showing was driven by better-than-expected performances from the following games:

  • Tom Clancy’s Rainbow Six Vegas 2, which reached almost two million sell-in units and ranked second in all-format sales for March in the United States and United Kingdom according to NPD and Chart-Track.
  • The Games For Everyone (G4E) brands, which topped €230 million ($326.13 million) in sales for the year.
  • Assassin's Creed, which continued its robust performance, achieving more than six million sell-in units since its launch.

During the first three months of the 2008 calendar year, Ubisoft continued to grow faster than the market[1] based on sell-through data:

  • In the United States, Ubisoft posted growth of 38 percent (compared to 28 percent for the United States market as a whole), with market share of 7.2 percent versus 6.7 percent in the first quarter of 2007.
  • In Europe, Ubisoft’s growth was 43 percent (compared to 26 percent for the European market as a whole), with market share of 9.5 percent versus 8.4 percent in the first quarter of 2007.

Yves Guillemot, Chief Executive Officer of Ubisoft, stated: "2007-08 was a remarkable year for Ubisoft, underpinned by three strategic achievements:

  1. Continued strengthening of existing franchises such as Rainbow Six, Rayman, The Settlers and Ghost Recon which recorded excellent sales levels.
  2. The sharp ramp-up of the "Games For Everyone" casual range, whose sales figures tripled over the year.
  3. A steady output of new releases with Assassin's Creed and Imagine that have performed exceptionally well.

These strategic focuses will once again be the key to our success in 2008 which is set to be another record year for the industry with growth expected to reach at least 15 percent. Ubisoft’s games line-up is particularly strong, with no fewer than seven existing franchises, five new releases and new brands in the casual segment."

Targets for full-year 2007-08 current operating income maintained

Ubisoft maintains its target, revised upwards on March 31, 2008, for current operating income before stock options to represent around 14 percent of sales.

First-quarter 2008-09 sales

This period will see the following releases:

  • Haze ™ for the PlayStation┬«3 computer entertainment system;
  • Assassin's Creed™ and Tom Clancy's Rainbow Six┬« Vegas 2 for PC;
  • New casual games for the Nintendo DS™ and Nintendo Wii™.

Ubisoft expects sales for the first quarter of 2008-09 to come in at around €154 million ($218.37 million), representing a 15 percent increase compared to the first quarter of 2007-08.

Ubisoft maintains its €1 billion ($1.42 billion) sales target for 2008-09 that was announced on January 23, 2008. Ubisoft is also raising its guidance for current operating income before stock options to at least 12 percent of sales, versus the previous estimate of at least 11 percent. This revision takes into account savings on royalties resulting from the acquisition of the Tom Clancy name for video games and ancillary products as well as the Group’s stronger back-catalog following better-than-expected performances in the fourth quarter of 2007-08.

Market share:

  • During the first three months of 2008 Ubisoft was ranked the number 3 independent publisher in the United States with 7.2 percent market share (compared with number 3 and 6.7 percent one year earlier)
  • Number 2 in Europe with 9.5 percent market share (compared with number 2 and 8.4 percent)
  • Number 2 in France with 9.1 percent market share (compared with number 2 and 8.5 percent)
  • Number 3 in the United Kingdom with 10.5 percent market share (compared with number 2 and 10.3 percent)
  • Number 2 in Germany with 8.0 percent market share (compared with number 3 and 7.2 percent)

Ubisoft acquires the Tom Clancy name for video games and ancillary products. This acquisition transfers to Ubisoft all intellectual property rights to the Tom Clancy name on a perpetual basis, free of all related future royalty payments for use in video games and ancillary products including related books, movies and merchandising.

Ubisoft acquires its first development studio in India, based in Pune. Established in late 2006 by Gameloft, this studio has a team of 120 developers and testers who will initially focus on porting titles to handheld consoles and will reinforce Ubisoft’s testing teams. The goal is to become 200-people strong in 12 months' time and to reach a team of 500 in the coming years.

Ubisoft opens a new development studio in Singapore. The decision to establish this new studio validates part of Ubisoft's strategy to strengthen the Group's presence in Asia and follows closely behind the opening of a testing and development studio in Chengdu (China) in September 2007. The objective is for teams to reach about 300 people over the next few years.

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