Atari: Results of the first half of 2019-2020
Results of the first half of
2019-2020 Press Release - Paris, France – January 8, 2020
at 23h00
Profitable operations and strengthening
of the organization ahead of the launches in the second half of
2019-2020Confirmation of annual objectives for the
financial year 2019-2020
The first half of the financial year 2019-2020
ended on September 30, 2019 and the provisional results have been
reviewed by the Board of Directors on January 8, 2020. The
audit review of the consolidated financial statements is being
finalized. The Auditors’ report will be issued after verification
of the notes to the financial statements and of the information set
forth in the semi-annual financial report.
Highlights of the first half ended
September 30, 2019 :
- Good performance of RollerCoaster Tycoon Touch
- Weaker seasonality of the licensing activities in the first
half of 2019-2020
- June 2019 : Distribution agreements for the Atari VCS with
Walmart and GameStop
- September 2019 : Distribution agreements for the TV shows
Codebreaker and Player Up
- September 2019 : Partnership with Antstream Arcade, a
streaming platform for retro games, for the Atari VCS
Operational projects for the second half
of 2019-2020 :
- Atari Games : Release of mobile games Mob
Empire (ex-Krysha) and RCT Stories
- Atari VCS : Finalizing content offering
and launch
- Atari Casino : Tests
ongoing (winter 2019-2020) for direct operations in several African
countries
- Atari Partners : Atari Token :
Renegotiation with Infinity Networks Limited (INL) ongoing due to
the delays experienced by INL - Pong Token : Platform
available and test phase in Q1 2020 for this crypto-currency for
real-money games
Other highlights :
- April 2019 : Secondary listing on the Nasdaq First North
Premier Growth Market in Stockholm
- September 2019 : Atari Interactive has concluded an
agreement with Legalist, where the latter has agreed to pay 0.9 M€
to Atari Interactive in exchange for a share of future profits to
be received by Atari in its ongoing copyright infringement
lawsuits. This amount, which has been recognized as a financial
debt, will be deducted from any potential proceeds of the lawsuits.
Should the lawsuits be unsuccessful, the amount will not be
recoverable from the Group under the terms of the agreement.
- The application of IFRS 16 (restatement of leases) gives rise
to the recognition of a right-of-use of 2.5 M€ (long term asset)
and of a future long term liability of 2.6 M€.
In light of the seasonality expected for
the financial year 2019-2020, with a stronger activity in the
second half, the Group reiterates its annual
objective.
“We are continuing to invest for the long term,
with a strategy of profitable growth supported by our new games and
the Atari VCS console”, said Frédéric Chesnais, CEO of
Atari. “Our objectives of growth and cash-flow generation
remain our priority, with the ultimate objective of increasing the
value of the Atari brand.”
Results of the
first half 2019-2020
IFRS, in M€ |
2019/2020 (April – Sept.) |
2018/2019 (April – Sept.) |
Variation % |
Revenue
in millions of euros |
10.7 |
10.8 |
-0.42% |
Cost of
sales |
(1.3) |
(2.7) |
|
GROSS PROFIT MARGIN |
9.4 |
8.1 |
+16.49% |
% of turnover |
87.7% |
75.0% |
|
Research
and development costs |
(4.6) |
(3.1) |
|
Marketing
and commercial expenses |
(2.0) |
(1.5) |
|
General
and administrative expenses |
(2.1) |
(1.7) |
|
Other income and operating expenses |
- |
0.5 |
|
CURRENT OPERATING INCOME |
0.7 |
2.2 |
-68.03% |
Other operating income and expenses |
(0.0) |
(0.2) |
|
OPERATING INCOME |
0.7 |
2.0 |
-64.67% |
Cost of
financial debt |
(0.0) |
(0.0) |
|
Other
financial income and expenses |
(0.5) |
0.0 |
|
Income
tax |
(0.0) |
(0.2) |
|
NET RESULT OF THE CONSOLIDATED ENTITIES |
0.1 |
1.8 |
|
Share
attributable to the Group |
0.1 |
1.8 |
|
Share attributable to minority interests |
(0.0) |
(0.0) |
|
The strategy aims at the development of the game
catalogue with a strong specialization on mobile platforms and
simulation / strategy games (“Atari Games”) and on
real-money games (“Atari Casino”), the development
of the Atari VCS (“Atari VCS”) and of projects
notably in the blockchain space (“Atari
Partners”). The implementation of this strategy during the
first half of the financial year has been coupled with the
strengthening of the operational teams, with 22 employees at the
end of the period, compared to 20 on September 30, 2018.
For the first half ended September 30, 2019, the
Atari Group recorded revenues of 10.7 M€, compared to
10.8 M€ for the same half of the previous financial year. The
evolution of the business activity mainly reflects a stronger
seasonality of licensing revenues in the second half, allowing the
Group in particular to favor content dedicated for the Atari VCS
(launch in the last quarter of 2019-2020). The evolution also
reflects more game releases in the second half than in the first
half of the current financial year.
The gross margin level, at 87.7% of turnover
during the period compared to 75.0% for the previous period,
reflects the evolution of the product mix, with the previous period
having been marked by one-time sales of physical products.
The main expense items are in line with the
expectations of the Group and reflect the efforts made to
accelerate the Group’s growth relying on its 4 business
lines. The R&D expenses cover investments in the Atari
and RollerCoaster Tycoon franchises, with a strong specialization
on mobile platforms and simulation / strategy games. Marketing and
selling expenses amounted to 2.0 million euros for the first half
of the 2019-2020 financial year, reflecting an effort for all Group
activities. General and administrative expenses increased by 0.4
million euros as of September 30, 2019, reflecting the development
of the activity and the strengthening of the teams.
Other operating income and expenses have not
seen any movement as of September 30, 2019. As of September
30, 2018, the net amount of other operating income was +0,5 million
euros and corresponded to the sale of 2 non-core franchises (Alone
in the Dark and Act of War) to THQ Nordic.
In this context, the Atari Group Atari generated
a current operating profit of 0.7 M€ during the first half of
2019-2020, compared to 2.2 M€ in the first half of 2018-2019. Atari
is counting on a stronger seasonality of its licensing activities
and the launch of the Atari VCS in the second half to reach its
objective of annual growth in profitability.
Other financial income and expenses are
non-recurring and mainly related to the secondary listing on
NASDAQ First North in Stockholm.
The Atari Group is utilizing its tax loss carry
forwards and has not recorded a tax expense during the
semester.
Balance Sheet
as of September 30, 2019
ASSETS (in millions of euros) |
30.09.2019 |
31.03.2019 |
Intangible assets |
16.1 |
13,5 |
Property, plant and equipment |
2.5 |
0.0 |
Non-current financial assets |
8.7 |
5.4 |
Deferred tax assets |
2.0 |
2.0 |
NON-CURRENT ASSETS |
29.3 |
20.9 |
Inventories |
0.1 |
0.2 |
Trade receivables |
5.7 |
3.0 |
Current tax assets |
0.0 |
0.0 |
Other current assets |
0.5 |
0.7 |
Cash and cash equivalents |
3.4 |
8.5 |
Assets held for sale |
- |
- |
CURRENT ASSETS |
9.8 |
12.4 |
TOTAL ASSETS |
39.1 |
33.3 |
EQUITY & LIABILITIES (in millions of
euros) |
30.09.2019 |
31.03.2019 |
Capital |
2.6 |
2.6 |
Share premium |
8.0 |
8.0 |
Consolidated reserves |
12.7 |
9.0 |
Net income Group share |
0.1 |
2.7 |
SHAREHOLDERS’ EQUITY GROUP SHARE |
23.4 |
22.3 |
Minority interests |
(0.0) |
(0.0) |
SHAREHOLDERS’ EQUITY OF CONSOLIDATED
ENTITIES |
23.3 |
22.2 |
Provisions for non-current contingencies and losses |
0.7 |
0.7 |
Non-current financial liabilities |
3.2 |
0.6 |
Deferred tax liabilities |
- |
- |
Other non-current liabilities |
0.1 |
0.2 |
NON-CURRENT LIABILITIES |
3.9 |
1.4 |
Provisions for current contingencies and losses |
0.1 |
0.1 |
Current financial liabilities |
1.0 |
0.1 |
Trade payables |
6.7 |
5.3 |
Current tax liabilities |
- |
- |
Other current liabilities |
4.1 |
4.3 |
CURRENT LIABILITIES |
11.9 |
9.7 |
TOTAL EQUITY & LIABILITIES |
39.1 |
33.3 |
The consolidated
financial statements incorporate the cumulative impact of IFRS 16
as of April 1, 2019. Property, plant and equipment includes the
right-of-use related to lease contracts for a net amount of
2.5 M€. The lease liabilities linked to the application of IFRS 16
are included in the items “Non-current financial liabilities” and
“Current financial liabilities” of the consolidated balance sheet
respectively for amounts of 2.3 M€ and 0.3 M€.
Non-current financial
assets include 4.9 M€ of trade receivables with a maturity of more
than one year, compared to 2.8 M€ as of March 31, 2019.
Other current
liabilities notably include 2.5 M€ of deferred revenue for the
pre-orders of the Atari VCS.
Outlook for
2019/2020
In light of the expected seasonality and the
launches in the second half of the financial year 2019-2020, the
Group reiterates its objectives of increased profitability with the
priority of increasing the value of the Atari brand and of the
portfolio of games.
The second half will be marked by
several important projects, in particular:
ATARI GAMES
- Pursuit of the development of the mobile game
Citytopia with a progressive release in multiple countries,
allowing the focus on territories displaying the best player
retention and monetization rates ;
- Pursuit of the development of the mobile game Days of
Doom : one of the first survival games on mobile platforms. It
is being progressively released, country by country, with the same
retention and monetization objectives;
- Launch of the mobile game Mob Empire (ex-Krysha) : this
simulation game using the engine of RCT Touch is set in a Las Vegas
type of environment. The tone of the game combines humor and a
"cartoon" type approach;
- Launch of RollerCoaster Tycoon Touch (RCT) Story, a new title
presenting a different gameplay mode.
ATARI CASINO
- Launch of the first real-money games in Kenya.
ATARI VCS
- Preparations for the commercial launch and negotiation of
content partnership agreements with first shipments expected in
March 2020 in the United States;
- Revenues for the Atari VCS will contribute from the time of the
first shipments.
ATARI PARTNERS
- Renegotiation to come with INL due to the delays experienced by
INL in its fundraising and development of the Atari Token
project;
- Tests in an operating environment for the Pong Token, a
crypto-currency for real-money gaming; the Atari Group as sole
responsible for this second project has successfully implemented
the technical platform on the blockchain allowing the issuance and
management of this crypto-currency.
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.
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.netRedeye AB (Certified
Adviser) – Catharina Prämhall 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 January 8, 2020 at 11:00 pm
CET.
APPENDICES
Net cash
position as of September 30, 2019
Net cash position (in millions of euros) |
30.09.2019 |
31.03.2019 |
OCEANEs
2003 - 2020 |
- |
(0.6) |
Lease
liabilities (IFRS 16) |
(2.3) |
- |
Non-current |
0.7 |
(0.6) |
OCEANEs
2003 - 2020 |
(0.6) |
- |
Lease
liabilities (IFRS 16) |
(0.3) |
- |
Commitments on financial instruments |
(0.0) |
(0.1) |
Current |
(1.0) |
(0.1) |
|
|
|
Gross financial debt |
(3.2) |
(0.7) |
|
|
|
Cash and cash equivalents |
3.4 |
8.5 |
|
|
|
NET CASH POSITION |
0.2 |
7.8 |
Consolidated
Cash Flows Statement
Consolidated Cash Flows (in millions of
euros) |
30.09.2019 |
31.03.2019 |
Net income for the period |
0.1 |
2.7 |
Non-cash expenses and revenue |
|
|
Charges to (reversals of) depreciation, amortization &
provisions for non-current assets |
2.9 |
4.1 |
Cost of (revenue from) stock options and related benefits |
0.5 |
0.8 |
Losses (gains) on disposals |
- |
0.2 |
Others |
(1.2) |
(1.1) |
Cost of debt |
- |
- |
Income taxes (current and deferred) |
0.0 |
(1.3) |
CASH FLOW BEFORE WORKING CAPITAL AND TAXES |
2.4 |
5.4 |
Income taxes paid |
(0.0) |
(0.1) |
Changes in working capital : |
|
|
Inventories |
0.0 |
0.0 |
Trade receivables |
(1.8) |
0.6 |
Trade payables |
1.4 |
(0.4) |
Other current assets and liabilities |
(2.2) |
(0.9) |
CASH FLOW FROM OPERATING ACTIVITIES |
(0.2) |
4.6 |
Purchase of / additions to : |
|
|
Intangible assets |
(4.8) |
(7.1) |
Property, plant & equipment |
(0.6) |
- |
Non-current financial assets |
(0.0) |
(0.3) |
Disposals / repayments of : |
|
|
Intangible assets |
- |
- |
Property. plant & equipment |
- |
- |
Non-current financial assets |
0.0 |
0.2 |
NET CASH USED IN INVESTING ACTIVITIES |
(5.4) |
(7.2) |
Net funds raised from : |
|
|
Share issues |
- |
7.7 |
Debt issues |
- |
- |
Changes in treasury shares |
- |
0.4 |
Net funds disbursed for : |
|
|
Interest and other financial charges |
- |
- |
Debt repayment |
- |
- |
Changes in treasury shares |
(0.1) |
- |
Changes in loans or other financial items |
- |
0.0 |
Other cash flows from financing activities |
0.3 |
(0.2) |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
0.2 |
8.2 |
Impact of changes in exchange rates |
0.3 |
0.1 |
NET CHANGE IN CASH AND CASH EQUIVALENTS |
(5.1) |
5.4 |
|
|
|
Net opening cash balance |
8.5 |
3.1 |
Net closing cash balance |
3.4 |
8.5 |
NET CHANGE IN CASH AND CASH EQUIVALENTS |
(5.1) |
5.4 |
Net closing cash balance |
|
|
Cash and cash equivalents |
3.4 |
8,5 |
Bank overdrafts (including current financial debts) |
- |
- |
- CP 2020 01 08 Resultats semestriels VEN DEF