Ubisoft Full-Year 2010-11 Results

Key insights

7 takeaways

01
Ubisoft achieved annual sales of €1,039 million in fiscal 2010-11, representing a 19.3% increase over the previous year.See it on page 1
02
The company returned to profitability at the operating level with €29.4 million in current operating income, a significant improvement from the prior year's €59.6 million loss.See it on page 8
03
A net loss of €52.1 million was recorded, but this was primarily driven by €95.9 million in non-recurring reorganization charges; excluding these, the company would have posted a net profit of €21.4 million.See it on page 3
04
Gross profit margins reached 64.8%, exceeding initial guidance due to strong fourth-quarter sell-through pricing.See it on page 2
05
The cash position more than doubled to €99.2 million from €41.3 million, bolstered by positive operating cash flows and the sale of Gameloft shares.See it on page 3
06
Growth was driven by the casual gaming segment, including dance titles and Nintendo 3DS software, alongside the high-definition Assassin’s Creed franchise.See it on page 2
07
For fiscal 2011-12, management projects sales between €1,040 million and €1,080 million, with a strategic focus on casual gaming, HD console titles, and free-to-play online services.See it on page 5

Summary

Ubisoft’s fiscal year 2010-11 results demonstrate a significant financial turnaround characterized by strong revenue growth and improved operational efficiency. The company reported annual sales of €1,039 million, a 19.3% increase over the previous fiscal year. This growth was driven by the successful performance of the casual gaming segment, particularly dance titles and Nintendo 3DS software, alongside continued momentum in the high-definition segment led by the Assassin’s Creed franchise.

Financial performance metrics showed marked improvement, with current operating income reaching €29.4 million, compared to a loss of €59.6 million in the prior year. Gross profit margins expanded to 64.8%, exceeding initial guidance due to higher-than-expected sell-through prices in the fourth quarter. While the company recorded a net loss of €52.1 million, this figure was heavily impacted by €95.9 million in non-recurring reorganization charges related to studio restructuring and project terminations. Excluding these non-recurring items and stock-based compensation, the company would have achieved a net profit of €21.4 million.

The company’s cash position strengthened significantly, ending the year at €99.2 million compared to €41.3 million in 2010. This improvement was supported by positive cash flows from operating activities and strategic asset management, including the sale of Gameloft shares and tax credit liquidations. Operating expenses were managed through strict cost control, with selling, general, and administrative expenses decreasing as a percentage of total sales.

Looking ahead to fiscal 2011-12, the company maintains a growth-oriented strategy focused on three pillars: casual gaming, high-definition console titles, and the expansion of online services. Management projects sales between €1,040 million and €1,080 million, with recurring operating income expected to reach between €40 million and €60 million. The outlook emphasizes the continued development of established franchises and the integration of new business models, such as free-to-play, to drive recurring revenue.