Annual Financial Results 2019/2020 : Atari delivers another
financial year of profitable growth
ANNUAL FINANCIAL RESULTS
2019/2020Press release - Paris, France - August 13, 2020 –
8:00 am
Atari delivers another financial year of
profitable growth
- Revenue:
+16.5% to €24.0m
- Operating Income:
+15.2% to €2.9m
- Net Income (Group share):
€2.3m
Launch of the Atari VCS and Atari Token
in FY 2020/2021
During
its meeting on August 11, 2020, Atari SA’s Board of Directors
reviewed the financial information for the year ended March 31,
2020 and authorized its disclosure. The audit procedures on the
consolidated accounts have been completed. The certification report
will be issued once the management report and notes have been
verified and all the necessary diligence measures required for the
annual financial report have been finalized, which will be
published by September 29, 2020 at the latest.
- Revenue growth (+16.5%) despite launch
delays at the end of the period (games, Atari VCS) due to the
global health emergency
- FY 2019-20 operational developments:
- Atari Games: RCT Touch has crossed 30 million
downloads as of March 31, 2020. This sustained performance is
combined with good resilience for the licensing business. The hotel
licenses ($600K received in January 2020) are spread over three
years and contributed only $50K for the year.
- Atari VCS: Finalization and production launch
of the Atari VCS for a commercial launch moved to the end of 2020
(Covid-19 impact on the production).
- Atari Casino: New crypto-casino license for
$7.5m over the current period, demonstrating the recurring
attractiveness of this space and of the Atari brand.
- Atari Partners: New licensing agreement with
Animoca Brands to develop blockchain applications in Atari games
(December 2019). The Group owns Animoca Brands shares valued at
over $2.0m. Launch of the Atari Token crypto-currency, which will
contribute to results for FY 2020/21, as Atari is entitled to 35%
of all token sale proceeds.
- Other key developments:
- April 2019: Secondary listing on the Nasdaq
First North Premier Growth Market segment in Stockholm.
- September 2019: Agreement signed with
Legalist, with €0.9m paid to Atari Interactive in exchange for part
of the future income to be received by Atari in connection with six
trademark infringement proceedings.
- New IFRS 16 accounting standard (restatement of lease
liabilities): Recognition of a right of use for €2.5m
(long-term asset) and a financial liability for €2.6m.
- March 2020: €3.3m capital increase to
accelerate the development of new games, in cooperation with
development studios, and to support the launch of the Atari
VCS.
- The Atari Group is targeting continued profitable
growth for FY 2020/21.
|
Frédéric Chesnais, Atari Group CEO and
one of its leading shareholders: “The year ended March 31,
2020 was of course affected by Covid-19, with business progressing
in line with expectations, but licensing agreement renewals and
extensions deferred to subsequent periods. Our four business lines
(Games, VCS, Casino, Partners) each have specific assets enabling
them to develop in an environment that is continuing to be
significantly marked by the considerable uncertainty surrounding
the economic situation. In this context, our organization, with its
low level of fixed costs, ensures that we are highly flexible and
able to react quickly, which is expected to be a key factor to
achieve our target of profitable growth”.
HISTORICAL
FINANCIAL RESULTS – LONG-TERM STRATEGY
The table below summarizes the key figures of
the Atari Group over the previous years (FY ended March 31):
|
(€m) |
2012-13 |
2013-14 |
2014-15 |
2015-16 |
2016-17 |
2017-18 |
2018-19 |
2019-20 |
|
|
|
|
|
|
|
|
|
|
Revenue |
1.2 |
3.3 |
7.6 |
11.9 |
15.4 |
18.0 |
20.6 |
24.0 |
|
Current Operating Income |
0.6 |
0.9 |
0.2 |
1.4 |
1.9 |
2.3 |
3.1 |
2.9 |
|
Operating Income |
-2.0 |
1.3 |
1.5 |
0.0 |
8.5 |
2.5 |
2.5 |
2.9 |
|
Net Income Group Share |
-35.8 |
-2.5 |
1.2 |
-0.1 |
7.7 |
2.3 |
2.7 |
2.3 |
|
Shareholders’ Equity Group Share |
-34.9 |
-31.3 |
-13.1 |
-10.6 |
7.4 |
13.8 |
22.3 |
28.5 |
|
Net Cash (Net Debt) (1) |
-31.4 |
-24.8 |
-11.0 |
-13.3 |
-0.9 |
2.5 |
7.8 |
1.1 |
|
(1) Net cash excluding (i) the
impact of the first application of IFRS 16 in the accounts for FY
2019-2020, and (ii) Legalist.
Since 2013, Atari has delivered significant
growth in revenues and earnings, as illustrated in the table
above.
- Over this period, revenue has been multiplied by more than
20(x).
- The Group has also further strengthened its equity Group share
by +€63.4m, up from -€34.9m, leading to a positive position of
+€28.5m.
Atari is positioned around four complementary
business lines, aiming to ensure the long-term development of the
Group and the brand:
- Atari Games: video games are part of the
Group’s DNA and still represent its primary source of income;
- Atari Casino: online casino and lottery
games;
- Atari VCS: multimedia equipment;
- Atari Partners: partnerships and investments
in technology focused in priority on Atari brand licenses.
CONSOLIDATED
INCOME STATEMENT AS OF MARCH 31, 2020
The detailed financial results as of March 31,
2020 are presented below. Operating Income is up +15.2% to €2.9m
for FY 2019/20, from €2.5m for FY 2018/19.
KEY PROFIT AND
LOSS ITEMS
(€m) |
Mar 31, 2020 |
Mar
31, 2019 |
% |
|
|
|
|
Revenue |
24.0 |
20.6 |
+16.5% |
Cost of
goods sold |
(2.4) |
(3.9) |
|
GROSS
MARGIN |
21.6 |
16.7 |
+29.4% |
Research
and development expenses |
(9.8) |
(7.4) |
+32.1% |
Marketing and selling expenses |
(4.2) |
(3.7) |
+14.5% |
General
and administrative expenses |
(4.7) |
(3.9) |
+18.2% |
Other
operating income (expense) |
(0.1) |
1.4 |
|
CURRENT OPERATING INCOME |
2.9 |
3.1 |
-7.2% |
Other
income (expense) |
0.0 |
(0.6) |
|
OPERATING INCOME |
2.9 |
2.5 |
+15.2% |
Business overview and
Revenue
As of March 31, 2020, Atari is reporting
consolidated revenue of €24.0m, compared with €20.6m the previous
year, up 16.5% at current exchange rates and 10.2% at constant
exchange rates.
Atari Games continues to be the dominating
business line, with a very good performance by the games catalogue
and licensing business, which strongly contributed to the Group’s
revenue.
The Atari Games business continues to be
supported by the good performances of the mobile game RollerCoaster
Tycoon Touch, which is regularly updated with new content and
special events and has been installed more than 30 million times as
of March 31, 2020. During the year, Atari launched the mobile games
Citytopia and RollerCoaster Tycoon Story, targeting progressive and
profitable growth. The licensing business has been active, with the
Arcade 1 Up and Atari Flashback products.
Atari has also continued to develop its other
business lines to help drive the Group’s long-term expansion in the
world of video games, multimedia and technology. With regard to the
Atari Token, the Atari Group has taken back operational control of
this project and it will be launched in FY 2020/21.
Gross Margin
The gross margin reached 90.0% of revenue,
compared with 81.1% the previous year. The gross margin is still
dependent on changes in the product mix.
Research and Development
Expenses
Research and development expenses totaled €9.8m,
compared with €7.4m the previous year. This increase, net of the
amounts recorded under current intangible assets, reflects the
continued production of games.
Marketing and Selling
Expenses
Marketing and selling expenses were €4.2m for FY
2019/20, compared with €3.7m for FY 2018/19. This increase reflects
the development of the business and the new games launched.
General and Administrative
Expenses
General and Administrative expenses represent
€4.7m for the current year, compared with €3.9m the previous year.
This change primarily reflects the change in exchange rates and the
strengthening of the management teams.
Other Operating Income and Expenses
As of March 31, 2020, the amount of other
operating income and expenses is not significant. For the previous
year, other operating income and expenses included the sale of two
non-strategic franchises for Atari (Alone in the Dark and Act of
War), as well as the payment made to Atari concerning an Atari
trademark infringement dispute.
Current Operating Income
During the period, the Group achieved its
objective of profitable growth, recording €2.9m of current
operating income for the year ended March 31, 2020, compared with
€3.1m for the year ended March 31, 2019.
Other Income and Expenses
Other income and expenses are negligible. For
the previous year, other income and expenses totaled -€0.6m,
corresponding to expenses, net of compensation and legal fees, for
various litigations against Atari.
Operating Income
Operating Income for the year ended March 31,
2020 amounted to €2.9m, compared with €2.5m for the year ended
March 31, 2019, up 15.2%.
OTHER INCOME
STATEMENT ITEMS
(€m) |
Mar 31, 2020 |
Mar
31, 2019 |
% |
|
|
|
|
OPERATING INCOME |
2.9 |
2.5 |
+15.2% |
Cost of debt |
(0.0) |
(0.0) |
|
Other financial income
(expense) |
(0.8) |
(0.4) |
|
Income tax |
(0.1) |
0.6 |
|
NET INCOME FROM
CONTINUING OPERATIONS |
2.0 |
2.7 |
-28% |
Net income from discontinued
operations |
- |
- |
|
NET INCOME FOR THE
YEAR |
2.0 |
2.7 |
-28% |
Attributable to the Group |
2.3 |
2.7 |
-16.2% |
Attributable to minority
interests |
(0.3) |
0.0 |
|
|
|
|
|
The Group’s cost of debt is nil. Moreover, it
redeemed the final instalment of the 2003-2020 OCEANE bonds on
April 1, 2020.
Other financial income and expenses primarily
concern adjustments in the value of non-current financial
assets.
Consolidated net income (Group share) for the
year amounted to €2.3m, compared with €2.7m in the previous
year.
KEY BALANCE
SHEET AND CASH FLOW ITEMS
The detailed balance sheet, prepared in
accordance with IFRS, is included as an appendix.
Shareholders’ Equity
Consolidated shareholders’ equity is positive,
€28.1m at March 31, 2020, a significant improvement compared to the
€22.2m recorded as at March 31, 2019, resulting mainly from Net
Income and the capital increase of March 2020 of €3.2m, undertaken
to accelerate the development of new games with partner
studios.
The following table presents the changes in
shareholders’ equity during the year:
Shareholders’ Equity as at
March 31, 2019 (€m) |
22.2 |
IFRS 16 restatement |
(0.1) |
Shareholders’ Equity as
at March 31, 2019 restated under IFRS 16 (€m) |
22.2 |
Net income |
2.0 |
Capital increase |
3.2 |
Financial assets at fair value
through other comprehensive income |
(0.6) |
Movement in treasury shares |
(0.2) |
Stock option expenses |
1.0 |
Exchange rate variations |
0.6 |
Shareholders’ Equity as
at March 31, 2020 (€m) |
28.1 |
Gross financial debt comprises the lease
liability relating to the application of IFRS 16 and the 2003-2009
OCEANE bonds, fully redeemed at April 1, 2020.
As of March 31, 2020, the Group’s net cash
position was -€1.3m, and it was +€1.1m after restatement due to the
new IFRS 16 norm and the Legalist agreement. Atari is not obliged
to make any reimbursement to Legalist if the trademark infringement
proceedings prove unsuccessful.
(€m) |
Mar 31, 2020 |
Mar
31, 2019 |
|
|
|
|
|
|
2003-2020 OCEANE bonds |
- |
(0.6) |
IFRS 16: lease liability |
(2.1) |
- |
IFRS 9: Legalist |
(0.9) |
- |
Non-current |
(3.0) |
(0.6) |
|
|
|
Commitments on financial
instruments |
(0.0) |
(0.1) |
2003-2020 OCEANE bonds |
(0.6) |
- |
IFRS 16: lease liability |
(0.3) |
- |
Current |
(1.0) |
(0.1) |
|
|
|
Restatement of Legalist non-cash
liability (1) |
0.9 |
- |
Gross financial
debt |
(3.1) |
(0.7) |
|
|
|
Cash and cash equivalents |
1.8 |
8.5 |
|
|
|
Net cash (net
debt) |
(1.3) |
7.8 |
(1) Gross financial debt is restated for
the Legalist amount of €0.9m, which was recorded as a financial
liability under IFRS 9 but will be definitively retained by
the Group.
OUTLOOK FOR
2020-2021
The Atari Group has set the following
operational objectives for FY 2020-21:
- Launching new games: since April 1, 2020, the Group’s game
launches include Missile Command Recharged (mobile, PC and Nintendo
Switch), Pong Quest (PC and consoles) and Beat Legend Avicii
(mobile); the Group is preparing to launch several mobile games
over the coming months, including Mob Empire, Atari Combat: Tank
Fury and Days of Doom. Atari Combat: Tank Fury is already in a soft
launch phase in the UK and the Netherlands;
- Delivering the first Atari VCS units;
- Launching the Atari Token crypto-currency.
For 2020-21, as in previous years, the financial
objective remains the increase of profitability, looking in
priority to develop the value of the Atari brand and games
portfolio. Taking into account the pandemic, the licensing business
and profitability for the first half of the year will be lower than
the previous year, with efforts focused primarily on the online
gaming business and the Atari Token crypto currency.
2020 ANNUAL
MEETING
The Annual Shareholders’ Meeting will be
convened on November 2, 2020.
DISCLAIMER
The realization of the plans, and their
operational budget and financing plan remain inherently uncertain,
and the non-realization of these assumptions may impact their
value.
RISK FACTORS /
COVID-19
With regards to the Coronavirus (COVID-19), this
virus is creating important disruptions in the whole world,
especially in China where the Atari VCS is built. The Group is
exposed to the same risks as all the other actors and remains
extremely vigilant to these external events, which can have a
temporary impact on the profitability of the operations. These
disruptions may in fact have an impact, notably with regards to the
timetable, on the sourcing, production and shipment of the Atari
VCS and of other Atari licensed products commercialized by our
partners, as well as on the renewals of these licensing agreements,
generators of profits and royalties for the Group. The pursuit of
production and deliveries of the Atari VCS remains dependent on the
continuity of production activities and international transport
flows. Atari will continue to keep its clients and shareholders
informed as the situation evolves.
About Atari:
Atari, comprised of Atari SA and its
subsidiaries, is a global interactive entertainment and
multiplatform licensing group. The true innovator of the video
game, founded in 1972, Atari owns and/or manages a portfolio of
more than 200 games and franchises, including globally known brands
such as Asteroids®, Centipede®, Missile Command® and Pong®. From
this important portfolio of intellectual properties, Atari delivers
attractive online games for smartphones, tablets, and other
connected devices. Atari also develops and distributes interactive
entertainment for Microsoft, Sony and Nintendo game consoles. Atari
also leverages its brand and franchises with licensing agreements
through other media, derivative products and publishing. For more
information: www.atari.com and www.atari-investisseurs.fr/en/.
Atari shares are listed in France on Euronext Paris
(Compartment C, ISIN Code FR0010478248, Ticker ATA), in Sweden on
Nasdaq First North Growth Market as Swedish Depositary Receipts
(ISIN Code SE0012481232, Ticker ATA SDB) and are eligible for the
Nasdaq International program in the United States (OTC -
Ticker PONGF).
Contacts
Atari - Philippe Mularski,
CFO
Calyptus - Marie Calleux Tel +33 1 83 64 61 57 -
pm@atari-sa.com
Tel + 33 1 53 65 68 68 – atari@calyptus.net
Redeye AB (Certified Adviser)
Tel: +46 8 121 576 90 – certifiedadviser@redeye.se
This is information that Atari SA. is obliged to
make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the contact persons set out above, on August 13, 2020 at 8:00am
CET.
APPENDICES
APPENDIX I
Consolidated profit and loss
(€m) |
Mar 31, 2020 |
Mar
31, 2019 |
|
|
|
Revenue |
24.0 |
20.6 |
Cost of goods sold |
(2.4) |
(3.9) |
GROSS MARGIN |
21.6 |
16.7 |
Research and development
expenses |
(9.8) |
(7.4) |
Marketing and selling expenses |
(4.2) |
(3.7) |
General and administrative
expenses |
(4.7) |
(3.9) |
Other operating income
(expense) |
(0.1) |
1.4 |
CURRENT OPERATING
INCOME |
2.9 |
3.1 |
Other income (expense) |
- |
(0.6) |
OPERATING
INCOME |
2.9 |
2.5 |
Cost of debt |
(0.0) |
(0.0) |
Other financial income
(expense) |
(0.8) |
(0.4) |
Income tax |
(0.1) |
0.6 |
NET INCOME FROM CONTINUING
OPERATIONS |
2.0 |
2.7 |
Net income from discontinued
operations |
- |
- |
CONSOLIDATED NET
INCOME |
2.0 |
2.7 |
Group share |
2.3 |
2.7 |
Minority interests |
(0.3) |
0.0 |
|
|
|
Basic earnings per share (€) |
0.010 |
0.010 |
Diluted earnings per share (€) |
0.009 |
0.009 |
APPENDIX II
Consolidated balance sheet
ASSETS (€M) |
Mar 31, 2020 |
Mar
31, 2019 |
|
|
|
Intangible assets |
17.8 |
13.5 |
Property, plant and
equipment |
2.4 |
0.0 |
Non-current financial assets |
15.7 |
5.4 |
Deferred tax assets |
2.1 |
2.0 |
Non-current
assets |
38.0 |
20.9 |
Inventories |
0.6 |
0.2 |
Trade receivables |
2.8 |
3.0 |
Current tax assets |
0.0 |
0.0 |
Other current assets |
0.7 |
0.7 |
Cash and cash equivalents |
1.8 |
8.5 |
Assets held for sale |
- |
- |
Current
assets |
5.8 |
12.4 |
|
|
|
Total
assets |
43.8 |
33.3 |
|
|
|
|
|
|
LIABILITIES
(€M) |
Mar 31, 2020 |
Mar
31, 2019 |
|
|
|
Share capital |
2.7 |
2.6 |
Share premium |
11.0 |
8.0 |
Consolidated reserves |
12.5 |
9.0 |
Net income - Group share |
2.3 |
2.7 |
Shareholders’ equity
(Group share) |
28.5 |
22.3 |
Minority interests |
(0.4) |
(0.0) |
Total
equity |
28.1 |
22.2 |
Provisions for non-current
contingencies and losses |
0.0 |
0.7 |
Non-current financial
liabilities |
3.0 |
0.6 |
Deferred tax liabilities |
- |
- |
Other non-current
liabilities |
0.8 |
0.2 |
Non-current
liabilities |
3.7 |
1.4 |
Provisions for current
contingencies and losses |
0.1 |
0.1 |
Current financial
liabilities |
1.0 |
0.1 |
Trade payables |
5.7 |
5.3 |
Current tax liabilities |
0.0 |
- |
Other current liabilities |
5.2 |
4.3 |
Current
liabilities |
11.9 |
9.7 |
|
|
|
Total equity and
liabilities |
43.8 |
33.3 |
APPENDIX III
Consolidated Cash-Flow
Statement
(€m) |
Mar 31, 2020 |
Mar
31, 2019 |
Profit (loss) for the
period |
2.0 |
2.7 |
Non-cash expenses and
income |
|
|
Charges to (reversals of) depreciation, amortization &
provisions for non-current assets |
6.2 |
4.1 |
Cost of (income from) stock options and related benefits |
1.0 |
0.8 |
Losses (gains) on disposals |
- |
0.2 |
Others |
(2.2) |
(1.1) |
Cost of
debt |
- |
- |
Income taxes (current and
deferred) |
(0.0) |
(1.3) |
CASH FLOW FROM
OPERATIONS |
7.0 |
5.4 |
Income taxes
paid |
(0.0) |
(0.1) |
Changes in working
capital: |
|
|
Inventories |
(0.5) |
0.0 |
Trade receivables |
0.5 |
0.6 |
Trade payables |
2.7 |
(0.4) |
Other current and non-current assets and liabilities |
(8.5) |
(0.9) |
CASH FLOW FROM OPERATING
ACTIVITIES |
1.1 |
4.6 |
Purchase of / additions
to: |
|
|
Intangible assets |
(9.6) |
(7.1) |
Property, plant and equipment |
(0.0) |
- |
Non-current financial assets |
(0.1) |
(0.3) |
Disposals / repayment
of: |
|
|
Intangible assets |
- |
- |
Property, plant and equipment |
- |
- |
Non-current financial assets |
0.2 |
0.2 |
NET CASH USED IN
INVESTING ACTIVITIES |
(9.6) |
(7.2) |
Net funds raised
from: |
|
|
Share issues |
0.9 |
7.7 |
Debt issues |
0.9 |
- |
Changes in treasury shares |
|
0.4 |
Net funds disbursed
for: |
|
|
Interest and other financial charges |
- |
- |
Debt repayment |
(0.1) |
- |
Changes in treasury shares |
(0.1) |
|
Change in loans or other
financial items |
- |
0.0 |
Other cash flows from financing
activities |
- |
(0.2) |
NET CASH FLOW PROVIDED BY
FINANCING ACTIVITIES |
1.5 |
7.9 |
Impact of changes in
exchange rates |
0.2 |
0.1 |
NET CHANGE IN CASH AND
CASH EQUIVALENTS |
(6.7) |
5.4 |
|
|
|
(€m) |
Mar 31, 2020 |
Mar
31, 2019 |
Net opening cash
balance |
8.5 |
3.1 |
Net closing cash
balance |
1.8 |
8.5 |
NET CHANGE IN CASH AND
CASH EQUIVALENTS |
(6.7) |
5.4 |
Analysis of closing cash
balance |
|
|
Cash and cash equivalents |
1.8 |
8.5 |
Bank overdrafts included in current financial debt |
- |
- |
- CP 2020 08 13 Resultats FY 2020 VEN