Financial · May 30, 2022

2021‑22 Annual Sales in Line with Expectations

Published by Nacon

Summary

Nacon’s audited consolidated results for the 2021-22 fiscal year, ending March 31, 2022, characterize the period as a transition year defined by strategic investments and a shifting product mix. Annual sales reached 155.9 million euros, a 12.3% decrease from the previous year. This decline was primarily driven by the Games business segment, which saw a 21.1% drop in revenue to 54.4 million euros following the decision to postpone several major titles. The Accessories segment remained more resilient, contributing 96.6 million euros despite global console shortages. Profitability metrics reflected these transitional pressures, with current operating income falling 41.6% to 19.0 million euros and net profit landing at 10.0 million euros. The gross margin rate decreased slightly to 49.9%, influenced by a higher proportion of accessory sales. However, the company successfully mitigated rising shipping and raw material costs through price increases. To fund its aggressive expansion, Nacon invested over 100 million euros in game development and studio acquisitions over a two-year period, increasing its pipeline from 33 to 46 games in development. Looking ahead to the 2022-23 fiscal year, the company anticipates a significant growth acceleration fueled by a robust publishing schedule, including titles such as The Lord of the Rings Gollum and Steelrising. Management projects annual sales to exceed 250 million euros with a current operating margin surpassing 50 million euros. While some delays persist, such as the postponement of Test Drive Unlimited Solar Crown to optimize quality, the company maintains a strong balance sheet with 228.4 million euros in equity and plans to continue its external growth strategy through further studio acquisitions.

From the report

Press release Lesquin,30 May 2022, 18: 00hrs 2021-22 ANNUAL SALES IN LINE WITH EXPECTATIONS • 155. 9 M€ SALES • 19. 0 M€ CURRENT OPERATING INCOME STRONG GROWTH MOMENTUM EXPECTED IN 2022 -23 : • SALES OVER 250 M€ • CURRENT OPERATING MARGIN EXCEEDING 50 M€ NACON (ISIN FR0013482791) today releases its audited consolidated results for FY 2021/22 (from April 1, 2021 to March 31, 2022) as approved by its Board of directors on 30 May 2022. Consolidated in M€ IFRS 2021-20 22 2020 -2021 Change Sales 155. 9 177. 8 -12 .3 % Gross Margin 77. 8 93. 5 -16 .7 % In % of sales 49. 9% 52. 6% EBITDA 44. 6 60. 3 -26 .0 % In % of sales 28. 6% 33. 9% Current Operating Income 19. 0 32. 5 -41 .6 % In % of sales 12. 2% 18. 3% Non recurrent items (5. 7) (5. 1) Operating Income 13. 3 27. 5 -51 .4 % In % of sales 8.6 % 15. 4% Financial Result 0.1 (1. 5)

7) (5. 1) Operating Income 13. 3 27. 5 -51 .4 % In % of sales 8.6 % 15. 4% Financial Result 0.1 (1. 5) Earnings before tax 13. 4 26. 0 -48 .4 % In % of sales 8.6 % 14. 6% Income tax (3. 4) (7. 7) Net result for the period 10. 0 18. 2 -45 .3 % In % of sales 6.4 % 10. 3% 2021-22, a transition year For FY 2021-22, Nacon recorded 155.9 M€ sales. The Games business segment, due to the decision to postpone the release of several games to FY 2022-23, came in at 54.4 M€ (-21.1%). The Accessories business segment held up well against a backdrop of console shortages, ending the year at 96.6 M€ (-6.3%). Other activities accounted for 4.9 M€. The gross margin was 77.8 M€, or 49.9% of sales (52.6% in previous year). This change is due to a different product mix to last year, with a higher proportion of Accessories (62% of total sales compared to 58% in previous year). The increase in sales prices made it possible to offset the rise in shipping and raw material costs and thus to maintain the margin rate of the accessories activity.

a different product mix to last year, with a higher proportion of Accessories (62% of total sales compared to 58% in previous year). The increase in sales prices made it possible to offset the rise in shipping and raw material costs and thus to maintain the margin rate of the accessories activity. Thanks to stable overheads, current operating profit for the year came to 19.0 M€ and represented 12.2% of sales. Net profit came to 10.0 M€ or 6.4% of sales.

A balance sheet reflecting the significant investments made by Nacon to accelerate its growth At the end of March 2022, shareholders' equity amounted to 22 8.4 M€, up 1 7.9 M€ compared to the end of March 2021. Cash and cash equivalents amounted to 82.1 M€ compared to 96.7M€ in the previous year. During the period, Nacon took out new bank loans for 52.5 M€ (5 year maturity – interest rate below 1%). Net debt remains at a low level of 10.4 M€. The increase in inventories undertaken to secure supplies, had an unfavourable impact on working capital requirements which increased by 8.7 M€. Operating cash flow for the year was 32.4 M€. Intangible CAPEX for the period amounted to 57.4 M€. Over the last two years, Nacon will have invested more than 100 M€ in game developments and acquired 9 studios. To date, 46 games are in development, compared to 33 games at 31 March 2021. The first returns on investment are expected in the current financial year with the release of numerous games. In accordance with its policy of reinvesting its cash flows in the development of its activities, the Board of Directors decided at its meeting on 30 May 2022 not to propose a dividend distribution for the 2021-22 financial year at the next General Meeting.

with the release of numerous games. In accordance with its policy of reinvesting its cash flows in the development of its activities, the Board of Directors decided at its meeting on 30 May 2022 not to propose a dividend distribution for the 2021-22 financial year at the next General Meeting. 2022-23: Strong acceleration in business and earnings growth After a year of transition marked by an unprecedented global economic context, Nacon will benefit in FY 2022- 23 from the significant investments made in recent years. Due to the strong publishing activity expected throughout the year (Vampire: The Masquerade®- Swansong, The Lord of the Rings Gollum, Steelrising, Session Skate Sim, etc.), sales will be up sharply with a significant increase in the first quarter. Nacon has decided to postpone Test Drive Unlimited Solar Crown to the next fiscal year in order to perfect the quality while aiming for a release only on PC, PlayStation®5 and Xbox® Series X|S formats. This delay does not affect the annual targets and should ensure continued growth in FY 2023-24. The Accessories business is still affected by the worldwide component shortage but will see the release of several new products in Q3 2022-23. In this context, Nacon expects to achieve sales in excess of €250 million in FY 2022-23 with a current operating margin in excess of 50 M€. Following the acquisitions of Midgar Studio and Daedalic Entertainment, Nacon will continue to pursue its external growth strategy in order to strengthen its ability to develop new quality games internally.

excess of €250 million in FY 2022-23 with a current operating margin in excess of 50 M€. Following the acquisitions of Midgar Studio and Daedalic Entertainment, Nacon will continue to pursue its external growth strategy in order to strengthen its ability to develop new quality games internally. Upcoming events : Annual General Meeting: Friday 22 July 2022 Q1 2022-23 sales: Monday 25 July 2022, Press release after close of the Euronext Paris stock exchange ABOUT NACON 2021-22ANNUAL SALES NACON is a company of the BIGBEN Group founded in 2019 to optimize its know-how through strong 156.08 M€ synergies in the video game market. By bringing together its 14 development studios, the publishing of AA video games, the design and distribution of premium gaming devices, NACON focuses 30 years of HEADCOUNT expertise at the service of players. This new unified business unit strengthens NACON's position in the Over 700 employees market, enables it to innovate by creating new unique competitive advantages. Company listed on Euronext Paris, compartment B ISIN : FR0013482791 ; Reuters : NACON.PA ; Bloomberg : NACON:FP INTERNATIONAL 20 subsidiaries and adistribution network PRESS CONTACT across 100 countries Cap Value–Gilles [email protected]+33 1 80 81 50 01 https://corporate.nacongaming.com/

Pages: 2
Words: 1,232
Format: PDF
Type: Financial

Topics

View this document on Game Industry Library.

Related Documents

Financial

2022/23 Full-Year Results

NACON’s financial results for the 2022/23 fiscal year, ending March 31, 2023, reveal a period of strategic transition characterized by stable revenue and improved profitability despite a challenging macroeconomic environment. Total sales remained flat at €156.0 million, but the company achieved a significant 29.8% increase in operating income to €17.3 million. This growth in profitability was primarily driven by a shift in the product mix toward software; gaming sales surged by 66.3% to €90.5 million, while the accessories segment declined by 36.6% to €61.2 million due to global console shortages. The company’s gross margin improved substantially, rising from 49.9% to 59.1% of sales. This financial performance was supported by a growing back catalogue and the integration of new acquisitions, most notably Daedalic Entertainment. While operating expenses rose due to intensive development work and the full-year impact of recent acquisitions, EBITDA increased by 25.5% to €48.9 million. NACON maintained a solid balance sheet with €242.6 million in equity, though net debt rose to €67.3 million following €34.9 million in investment activities and the securing of new medium-term bank loans. Looking ahead to the 2023/24 period, the company anticipates strong growth driven by an aggressive release schedule of approximately 20 games, compared to 13 in the previous year. Key titles include The Lord of the Rings: Gollum and several major sports franchises. The accessories division is also expected to recover as console supply stabilizes and new products enter the market. Management remains committed to a growth-oriented strategy, electing to reinvest cash flow into development rather than issuing a dividend. The company currently manages 16 development studios and has 53 games in its production pipeline.

investment market-analysis france

NaconMay 2023

Financial

Strong Increase in FY 2020/21 Annual Results

Nacon reports a significant increase in financial performance for the fiscal year 2020/21, ending March 31, 2021. Sales reached 177.8 million euros, representing a 37.4% increase over the previous year. This growth was primarily driven by the successful expansion into the United States market, strong demand for premium gaming accessories, and a tripling of back-catalogue software sales. Current operating income rose by 43.8% to 32.5 million euros, yielding an operating margin of 18.3%. Net profit for the period grew by 19.6% to 18.2 million euros, despite non-recurrent expenses related to bonus share plans and increased tax obligations. The financial position remains robust with operating cash flow rising 146% to 55.7 million euros, which effectively funded 56.4 million euros in capital expenditures. While cash and cash equivalents decreased slightly to 96.7 million euros following bank loan repayments and heavy investment in game development, the company maintains a high level of liquidity. To support continued growth and studio acquisitions, the Board of Directors elected to reinvest all cash flows into the business rather than issuing a dividend for the fiscal year. Looking forward, the outlook is highly optimistic due to the transition to new console generations and a strong pipeline of upcoming titles such as Blood Bowl 3 and WRC 10. Consequently, management has accelerated its long-term financial goals. The sales target for FY 2021/22 has been raised to a range of 180 to 200 million euros with a 20% operating margin. Furthermore, the FY 2022/23 sales guidance was revised upward to between 230 and 260 million euros, supported by the anticipated release of major intellectual properties including The Lord of the Rings: Gollum and Test Drive Unlimited Solar Crown.

investment france game-publishing+1

NaconMay 2021

Financial

HY 2021/22 Audited Consolidated Results

Nacon’s financial results for the first half of the 2021/22 fiscal year, covering April 1 to September 30, 2021, reflect a significant downturn compared to the previous year’s exceptional performance. Sales fell by 15.7% to 73.0 million euros, while current operating income dropped 46.3% to 8.4 million euros. This decline is attributed to an unfavorable basis of comparison, as the prior year benefited from a surge in demand for video games and accessories during global lockdowns. Additionally, the accessories segment faced logistical challenges in the United States and rising costs for raw materials and transport, though gross margins remained relatively stable at 52.1%. The video game division saw a 16.9% decrease in revenue due to lower editorial activity, though the back catalogue remained resilient, accounting for nearly 60% of game sales. To optimize long-term quality and commercial performance, several major titles, including Vampire: The Masquerade – Swansong and Blood Bowl 3, were postponed to the following fiscal year. Consequently, the company adjusted its 2021/22 full-year targets downward, now projecting sales between 150 and 180 million euros and current operating income of approximately 20 million euros. Despite the immediate slowdown, the long-term outlook has been revised upward. For the 2022/23 fiscal year, Nacon expects sales to reach between 250 and 300 million euros with an operating margin exceeding 20%. This optimism is driven by a robust pipeline of over 15 game releases and the continued expansion of its development capabilities, highlighted by the recent acquisition of Ishtar Games. The company maintains a solid balance sheet with 219.0 million euros in equity, supported by increased investments in its games catalogue and studio infrastructure.

market-analysis investment france

NaconNov 2021

Financial

First Half Year 2021/22 Sales

Nacon reported consolidated sales of 72.8 million euros for the first half of the 2021/22 fiscal year, representing a 15.9% decline compared to the same period in the previous year. This performance was primarily attributed to a high basis of comparison from the prior year, which had been significantly bolstered by pandemic-related lockdowns, and substantial logistical disruptions. Global supply chain issues, particularly affecting sea and land transport between Asia and North America, led to the postponement of several accessory deliveries originally scheduled for the second quarter. The games segment generated 27.1 million euros in the first half, down 17.5% year-over-year, despite positive critical and commercial receptions for titles such as WRC 10 and Rogue Lords. The back catalogue remained resilient, contributing stable revenue even as editorial activity fluctuated. The accessories division saw a 15.1% decline to 43.7 million euros, with strong inventory management in Europe partially offsetting the logistical delays experienced in the American market. Despite the first-half contraction, the outlook remains positive for the remainder of the fiscal year. Growth is expected to accelerate in the second half driven by a robust release schedule including Blood Bowl 3 and Vampire: The Masquerade – Swansong, alongside new hardware launches like the Revolution X Pro controller for Xbox. Consequently, the company confirmed its full-year targets of 180 to 200 million euros in sales with a 20% current operating margin. Looking further ahead to the 2022/23 fiscal year, the company anticipates sales between 230 and 260 million euros, supported by major upcoming releases and a continued strategy of studio acquisitions to expand its intellectual property portfolio.

market-analysis france europe+1

NaconOct 2021