Ubisoft Full-Year 2011-12 Results

Key insights

7 takeaways

01
Ubisoft achieved a significant financial turnaround in fiscal 2011-12, moving from an €80.4 million operating loss in the previous year to an operating income of €45.6 million.See it on page 3
02
Annual sales reached €1,061 million, a 2.1% increase, while current operating income grew by 90% to €56.0 million, meeting the upper end of management's guidance.See it on page 2
03
Digital and online revenue surged by 110.8% to €80 million, contributing to an expansion in gross profit margin from 64.8% to 67.7%.See it on page 2
04
Operational efficiency improved as R&D expenses decreased to 32.8% of sales, driven by a strategic reduction in the volume of high-definition game releases.See it on page 3
05
The company maintained its position as the third-largest independent publisher in both North America and Europe.See it on page 5
06
For fiscal 2012-13, Ubisoft projects sales between €1,160 million and €1,200 million, with a target of 25% to 61% growth in current operating income.See it on page 1
07
Future growth strategy focuses on expanding the free-to-play segment across PC and mobile platforms and preparing for the transition to next-generation console hardware.See it on page 4

Summary

Ubisoft’s fiscal year 2011-12 results demonstrate a significant recovery in profitability and operational efficiency. The company reported annual sales of €1,061 million, a 2.1% increase over the previous year, with current operating income rising by 90% to €56.0 million. This performance, which reached the upper end of management’s guidance, was driven by a strong portfolio of core and casual titles, including Assassin’s Creed Revelations and Just Dance, alongside a 110.8% surge in online and digital revenue to €80 million.

The financial improvement is underscored by a shift in the company’s cost structure and margin profile. Gross profit as a percentage of sales expanded to 67.7%, up from 64.8% in the prior year, bolstered by high-margin digital sales and a more efficient back-catalog strategy. Furthermore, research and development expenses decreased to 32.8% of sales, reflecting a strategic reduction in the number of high-definition game releases. The company successfully transitioned from an operating loss of €80.4 million in 2010-11—which was heavily impacted by non-recurring reorganization charges—to an operating income of €45.6 million for the 2011-12 period.

Geographically, Ubisoft maintained a strong market position, ranking as the third-largest independent publisher in both North America and Europe. Looking ahead to fiscal 2012-13, the company has set ambitious targets, projecting sales between €1,160 million and €1,200 million and a further increase in current operating income of 25% to 61%. Management intends to capitalize on the growth of the free-to-play segment across PC and mobile platforms, as well as the anticipated transition to next-generation console hardware, to drive long-term profitability and expand its global user base.