Ubisoft 2002 Annual Report Download - page 33

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2003
33
FINANCIAL
REPORT
General presentation
1.3.7 Change in Income Statement
Ubisoft achieved all the objectives it had set during the fiscal
year: sales (17% to 22% growth at constant exchange rates),
operating income (35 to 40 million euros according to French
accounting standards and 29 to 34 million euros according to
US GAAP pro forma) and net indebtedness (170 million euros).
Sales increased by 30% at constant exchange rates (and by
23% at current exchange rates) thanks to the success of the
blockbusters launched during the year.
Gross margin increased by 28%, from 217.1 to 277.3 million.
This represents 61% of sales (vs. 59% for fiscal year 2001/02)
and resulted from a higher percentage of sales on 128-bit
consoles (62% in 2002/03 compared with 19% in 2001/02) and
a sharp increase in the average per-game sales volume.
Recent improvement in operating income
Based on French accounting standards, operating income
before goodwill amortization and depreciation of business
assets was up 20% to 37.1 million. This reflects in particular
the expected rise in depreciation expenses for in-house
development projects (66.1 million compared with 54.7
million the previous year).
According to the US GAAP pro forma standard, operating
income before goodwill amortization and depreciation of
business assets was multiplied by 3.6, totaling 31.2 million
versus 8.7 million the previous year. These results were
made possible not only by increasing the gross margin but
also by reducing in-house development expenses, which
decreased by 6.5% to 72.1 million, thanks to Ubisoft's focus
on high-potential titles.
The net financial results break down as follows:
11.4 million in financial expenses, an 18.7% increase over
2001/02 resulting from higher activity in the second half
of FY 2002/03;
1.2 million in foreign exchange losses due to increased
activity in North America at the end of the fiscal year, at a
time when the dollar was at its lowest level in relation to the
euro.
Net non-recurring income and expenditure of – 6.8 million
was primarily the result of:
a provision of 22.9 million on Ubisoft shares directly held
by the company (1,169,733 securities accounted for at 10.64
per share as of 03/31/2003);
a profit on the buy-back of convertible bonds (OCEANE
2006) totaling 20.7 million (1,200,699 securities redeemed
during the 2002/03 fiscal year);
exceptional amortization of development expenses for
discontinued products totaling 5.4 million according
to French accounting standards and 3.9 million euros
according to the US GAAP pro forma standard (including
3.5 million related to acquisitions);
gains from lawsuits totaling 2.4 million related to acquisitions.
Corporate tax includes a 0.6 million charge related to the
cancellation of a tax credit on the subsidiary Ubi Studio Ltd.
Apart from this exceptional item, the tax rate amounted to
37.5% according to French accounting standards and 39.0%
according to the US GAAP pro forma standard.
Before amortization of goodwill and depreciation of business
assets (5.5 million),net income was 10.4 million according
to French accounting standards (vs. 13.4 million euros in
2001/02) and 7.5 million according to US GAAP pro forma
(vs.a loss of 0.7 million in 2001/02).
Subsidiarie
Consolidated Sales
Net Income
Consolidated Sales
Net Income
Consolidated Sales
Net Income
(thousand euros) 03/31/2003 03/31/2003 03/31/2002 03/31/2002 03/31/2001 03/31/2001
Ubi Soft Inc. (United States) 167,182 10,991 135,441 8,721 62,385 -6,994
Ubi Soft Entertainment GmbH (Germany) 45,342 -1,974 43,891 1,419 28,655 2,038
Ubi Soft Entertainment Ltd (United Kingdom)
57,387 2,470 40,935 -425 33,077 404
1.3.6 Sales and Earnings of Main Subsidiaries