Ubisoft 2006 Annual Report Download - page 43

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THE GROUP'S ACTIVITY AND RESULTS FOR FISCAL YEAR 2006-2007
31
1
The group’s activity and
results for fiscal year
2006/2007
Introduction 32
1.1 Significant events of the 2006-07 fiscal year 32
1.2 Analysis of activity and comments on results
for fiscal year 2006/2007 33
1.2.1 Key figures 33
1.2.2 Quarterly and annual consolidated sales 35
1.2.3 Breakdown of sales by activity 35
1.2.4 Change in production volumes 36
1.2.5 Sales by platform 36
1.2.6 Sales by destination 36
1.2.7 Changes in the income statement 37
1.2.8 Change in working capital requirement (WCR) and debt 37
1.2.9 Asset financing policy 37
1.3 Cash assets and capital 37
1.3.1 Changes in equity 37
1.3.2 Cash flow 38
1.3.3 Borrowing terms and financing structure 38
1.4 Human resources 38
1.4.1 A motivating, friendly work environment 39
1.4.1.1 Direct communication involving each individual in the company’s day-to-day life 39
1.4.1.2 Teams with a wide range of profiles 39
1.4.1.3 Close contact and a friendly environment 39
1.4.2 Valuing performance and autonomy 39
1.4.2.1 Individual autonomy and initiative 39
1.4.2.2 International growth opportunities 40
1.4.2.3 Compensation that seeks to recognize performance and commitment 40
1.4.3 Skills development: a priority 40
1.4.3.1 Ubisoft has opted for in-house production 40
1.4.3.2 An innovative training program adapted to employees’ needs 40
1.4.3.3 Continuous emulation thanks to dialogue among the group’s experts 40
1.4.4 Employment at Ubisoft in France 41
1.4.4.1 Work environment and working conditions 41
1.4.4.2 Skills development 41
1.4.4.3 Employment and non-discrimination 41
1.4.4.4 Compensation 42
1.5 Social service activities 42
1.6 Environmental data 42
1.6.1 Recycling 42
1.6.2 Destruction of non-marketable products 43
1.6.3 Power consumption 43
1.6.4 Water consumption 43
1.6.5 Environmental risks 43
1.7 Subsidiaries and equity interests 44
1.7.1 Organizational structure at March 31, 2007 44
1.7.2 Equity interests during the fiscal year 45
1.7.3 Activities of subsidiaries 45
1.8 General information 46
1.8.1 Investment policy 46
1.8.2 Research and development policy 46
1.8.3 Real estate, plants and equipement 46
1.9 Risk factors 47
1.9.1 Risk related to product strategy and brand positioning and management 47
1.9.2 Risk related to market developments and the success of next-gen consoles 47
1.9.3 Risk related to a top game being delayed or getting off to a poor start 48
1.9.4 Risk related to recruitment and retention of talented employees 48
1.9.5 Risk related to the termination of a contract with a licensing partner 48
1.9.6 Risk related to intellectual property 48
1.9.7 Legal and arbitration proceedings 49
1.9.8 Risk related to dependence on suppliers and subcontractors 49
1.9.9 Risk related to customer dependence 49
1.9.10 Risk related to computer security 49
1.9.11 Financial risk 49
1.9.12 Risk related to future acquisitions and integration of acquired companies 51
1.10 Commitments 51
1.11 Insurance 51
1.12 Recent events, outlook and strategies 52
1.12.1 Recent developments 52
1.12.2 Market outlook 52
1