GFT GFT Technologies SE

Full year revenues Gameloft posted consolidated sales of �25.8�million in the last quarter of 2007, up by 19% from the previous year. On a comparable exchange rate basis the fourth quarter growth would have reached 26%. Full year sales increased by 40% compared to 2006, reaching �96.1�M, in line with our guidance. On a comparable consolidation and exchange rate basis, full-year growth would have reached 46%, the same growth rate as in 2006. Sales in �M � 2007 � 2006 � Variation 1st quarter 22.7 14.8 +54% 2nd quarter 23.2 15.8 +47% 3rd quarter 24.4 16.1 + 51% 4th quarter 25.8 21.8 +19% Annual sales 96.1 68.4 + 40 % The sales of downloadable games, which are the company�s core business, reached �90.2 million during 2007, increasing by 45%. Europe represented 44% of sales for full-year 2007, North America 34% and the rest of the world 22%. The sharpest growth took place in the rest of the world, up 86%. In contrast, North America was the slowest growing region primarily due to the drop in the dollar and clear slowdown in growth of our market in the United States during the fourth-quarter. In 2006, Europe, North America and the rest of the world represented respectively 43%, 41% and 17% of Gameloft�s total sales. 2007 highlights In 2007, Gameloft's organic growth exceeded that of its main competitors, thus reinforcing its position as the leading mobile gaming company in Europe and the second largest player in the US. The market shares gained by the company in 2007 are due to the strong performance of Gameloft's back catalogue, which continued to account for more than 70% of the Company's downloads, and also investments in R&D made in 2007. These investments allowed us to release more games than our competitors on more handsets across more countries. To date, Gameloft's catalogue includes 200 mobile games adapted to over 1,200 different handsets and sold in over 80 countries via direct distribution agreements signed with more than 180 carriers. The surplus of investments made in our R&D capacities will nevertheless affect the operating margin for 2007 which will fall below 5% (excluding employee stock based compensation), contrary to our initial expectations for a margin over 10%. Outlook 2008 Gameloft had a staff of 4,000 at the end of 2007, up 50% over the end of 2006. With these employees, Gameloft can support the growing number of handsets selected by the carriers while releasing between 70 and 80 new games a year. The company's current staff will also allow it to capitalize on its investments in R&D and brands by adapting part of its game catalogue on new devices close to mobile phones such as the iPod, Nintendo DS, Xbox Live Arcade, etc. This unique production strength in the mobile gaming industry, combined with the quality of its creations and brands, should drive further sales increases and market share gains in 2008. Over the first half of 2008, Gameloft is planning to release many high-potential titles such as Grey�s Anatomy�,�Might & Magic Online, CSI: the mobile game, Block Breaker 2, etc. The sharp drop in the dollar and the slowdown in the growth of its market in the United States have led Gameloft to slightly revise downwards its forecasts for 2008. The Company is now planning growth in sales of 25% to 30% for 2008 (compared to over 30% previously) as well as an operating margin (excluding employee stock based compensation) expected between 10% and 15% (compared to around 15% previously). Expected growth in 2008 is still strong and the company is therefore more than ever in a position to become a leader in a market of 4 billion potential consumers in 20101, a position for which it has invested heavily since 2002. The Group�s results for 2008 will be published on 27�March 2008. 1 Source: Strategy Analytics