Press release                                                                                                                                         29 May 2012  07:00

Year-end results 2011/12

 

      -         Result from operations above target at € 19.6m

      -         Favourable outlook in 2012/13 with a target of € 450m sales and a € 30m result from operations

BIGBEN INTERACTIVE (ISIN FR0000074072) today releases its audited consolidated results for the financial year closing on 31 March 2012 as approved by its Board of directors on 24 May 2012.

Consolidated financial highlights in €m IFRS standards	03/11	03/12 (1)	Change
Sales	101.3	344.1	+ 239.6 %
Result from operations - Bonus shares - Amortisation of ModeLabs customer base	15.8 0.3 0,0	19.6 0.6 0.7	+ 24.3 %
Operating result In  % of sales	15.4 15.2%	18.3 5.3%	+ 18.4 %
Financing cost	(0,2)	(1.3)	NS
Currency impact	(1.8)	(0.5)	NS
Earnings before tax In % of sales	13.4 13.2%	16.5 4.8%	+ 22.9 %
Tax (2)	(3.5)	(6.3)	-NS
Net profit In % of sales	9.9 9.8%	10.2 3.0%	+ 3.6 %

            (1)       Including 7 months of ModeLabs
            (2)       Including  0,3 €m to be actually paid due to Group tax credits
            (3)       Year-end results have  been audited without any reservation

 

A strategic acquisition which raises Bigben Interactive sales to € 344.1 m

During financial year 2011/12 (closing on March 31), Bigben Interactive achieved sales of € 344.1 m  up by 47.5% like for like  and 239.6 % on a reported basis.

In a video game market environment which seems to have reached its lowest point, this achievement is supported by the 7 month business contribution of ModeLabs, the French leader for the Design and Distribution of mobile phone accessories acquired in August 2011. This strategic acquisition enabled Bigben Interactive to offset the drop of first party (Designing/publishing) businesses at € 113.2 m (-13%) by the rise of the third party (Distribution) business to € 230.9 m (+ 123.7 %).

Operations in France were boosted by the phone and audio businesses while entities abroad focussing until now on video game products experienced varied evolutions. Benelux enjoyed a strong software distribution activity and Hong Kong benefited from export sales to new countries while Germany suffered from a market cooling down after booming sales in previous financial year.

 

Consolidated results by territory as at 31 March 2012

In €m	France	Benelux	Germany	Hong Kong	TOTAL
Sales	316.1	11.2	10.6	6.1	344.1
Result from operations	17.0	0.6	0.1	1.9	19.6
Financial result	(1.8)	0.0	(0.1)	0.0	(1.9)
Earnings before tax	14.0	0.6	0.0	1.9	16.5
Tax *	(5.8)	(0.2)	0.0	(0.3)	(6.3)
Net result	8.2	0.4	0.0	1.6	10.2

In addition to the rationalisation of the procurement process, the new Group implemented the first synergies for Accessories over the last quarter of 2011/12 FY, with the development of a joint product (audio headset) and the first listings of ModeLabs phone accessories in Germany and Spain through the Bigben Interactive commercial network.

Operating  result in excess of target

The integration of the ModeLabs businesses modifies the profit structure of Bigben Interactive which must take into account the very strong albeit temporary growth of a mobile distribution business less profitable than first party businesses.

In FY 2011/12, Bigben Interactive achieved a result from operations ⁽¹⁾ of € 19.6 m against € 15.8 m in previous financial year. Its level was at 5 .7 % of consolidated sales versus 15.6 % in 2010/11. The operating result reached € 18.3 m i.e. a growth of 18.4 % when compared to FY 2010/11.

The 2011/2012 negative financial result of € 1.9 m reflected the rise of the financing cost resulting from the €40 m banking facility raised for the acquisition of ModeLabs.

Tax expenditure amounted to € 6.3 m of which only € 0.3m will be actually paid due to Group tax credits.

Net profit for FY 2011/12 amounted to € 10.2 m against € 9.9 m in FY 2010/11.

⁽¹⁾ excluding the impact of bonus shares and of the amortisation of ModeLabs customer base.

Financial structure

The structure of the Group balance sheet as at 31 March 2012 does not represent a usual course of business due to an exceptionally high level of inventories resulting from procurement opportunities for the smartphone distribution business at the end of FY 2011/12, financed by short term banking facilities.

Ratios in €m	2010/11	2011/12	Change
Net financial debt  / (Net cash)	(1.5)	73.7	+ 75.2
Working capital requirements	34.4	83.8	+ 49.4
Inventories	26.5	77.2	+ 50.7
Working capital	35.9	10.2	+ 25.7
Shareholders' funds	50.2	98.9	+ 48.7

The new group has shareholders' funds amounting to € 98.9 m and € 10.3 m tax credits.

Favourable outlook : developing innovating products  and further synergies

The video game market is on the verge of renewed growth with the launch of new generation hardware formats, the success of which relies on the release of blockbusters. Moreover the emergence of « SmartTV » hardware in the Digital home process represents a new growth segment which will broaden the scope of video gaming and of related accessories. The market for smartphones and digital tablets should maintain strong growth while Audio products should continue the progression achieved over a period of 4 years.

In this more promising environment, Bigben Interactive should experience in 2012/2013 a new overall dynamic with the development of its product range and introduction of new design and distribution synergies with ModeLabs.
            -         In the video game market segment, the Group will enhance its Publishing catalogue with blockbusters (Handball Challenge, Koh-Lanta, Creatures IV, Bella Sara) and its  Accessory ranges with creative and innovating products (driving seat for racing cars or  Frame Seat, gamepads, game travellers.). This strategy should enable the Group to gain additional market shares
            -         In order to rapidly penetrate the new thriving Digital home market, Bigben Interactive develops gamepads for Set-top boxes and Digital tablets to be distributed by ModeLabs.
            -         In the market segment of Accessories for Smartphones, ModeLabs will increase its offer of Coloblock products (travelling soundboxes, plugs, .), launch new licensed products and distribute new brands (Mini, Guess.). The mobile Distribution business should return to normal growth rates after two booming quarters.

In view of the above developments, Bigben Interactive Group targets annual sales of € 450m and a result from operations of € 30m for FY ending on 31 March 2013.

« 2012/13 will see Bigben Interactive achieve a new dimension relying on additional expertise from ModeLabs and on the development of further innovative products enabling it to target annual sales of € 450 m. This level of activity immediately places us as a key player on the European market for multimedia accessories. » commented Alain Falc, Chairman and CEO of Bigben Interactive.

Market leader for both video gaming accessories and mobile phone accessories, the new BIGBEN INTERACTIVE Group now implements a strategy of complementary know-how and product offers in order to meet the evolution of the multimedia world. Its ambition is to become a leader in converging multimedia accessories and a key player on the European multimedia market, relying on its size, its development capabilities and its commercial network.