Slide 1: FY16 Earnings presentation
FY16 Earnings presentation May 12, 2016
Slide 2: Disclaimer
Yves Guillemot, President and Chief Executive Officer Alain Martinez, Chief Financial Officer Jean-Benoît Roquette, SVP Investor Relations D I S C L A I M E R This statement may contain estimated financial data, information on future projects and transactions and future business results/performance.
Slide 3: Key Takeaways
KEY TAKEAWAYS EXECUTING ON THE STRATEGY EXPANDING & STRENGTHENING PORTFOLIO OF OWNED FRANCHISES DELIVERING STRONG MULTIPLAYER GAMES THAT DRIVE ENGAGEMENT HIGHER GROWING DIGITAL REVENUES THAT BOOTS PROFITABILITY IMPRESSIVE ENGAGEMENT & PLAYER RECURRING INVESTMENT METRICS STRONG SHAREHOLDER VALUE CREA
Slide 4: Agenda
AGENDA EXECUTING ON THE STRATEGY FY16 PERFORMANCE FY17 TARGETS 4
Slide 5: 20 Years of Strong Value Creation
20 YEARS OF STRONG VALUE CREATION TOTAL SHAREHOLDER RETURN SINCE IPO (rebased to 100) 20-year 5-year 3-year 2-year 1-year Ubisoft 1,287% 302% 209% 86% 55% NASDAQ 297% 67% 39% 17% (5%) CAC40 104% 8% 10% (3%) (15%) Euro Stoxx Media 18% 43% 31% 12% (11%) Source: FactSet as of May 9, 2016 IPO as of July
Slide 6: Key Success Factor: A True Industrial Organization
KEY SUCCESS FACTOR: A TRUE INDUSTRIAL ORGANIZATION WE DIFFERENTIATE THROUGH: INTERNALIZATION OF PRODUCTION OWNERSHIP OF BRANDS & CREATION OF SUCCESSFUL NEW IP COST-CONSCIOUS PRODUCTION ORGANISATION 2/3 OF TEAMS IN COMPETITIVE COSTS COUNTRIES LESS RELIANCE ON BIG M&A 6
Slide 7: Key Success Factor: A Unique Collaboration Model
KEY SUCCESS FACTOR: A UNIQUE COLLABORATION MODEL AN INCREASINGLY MULTI-STUDIO ORGANISATION RESOURCE INTENSIVE IS KEY TO SUCCEED INDUSTRY OPEN WORLDS’ SHARE DEVELOP BIG MULTI PROJECTS OF TOTAL MARKET* SIMULTANOUSLY + FY08 FY15 IMPROVE PRODUCTIVITY 7% 33% *NPD, GFK, value, physical sales KNOWLEDGE, EX
Slide 8: Key Success Factor: A Unique Collaboration Model
KEY SUCCESS FACTOR: A UNIQUE COLLABORATION MODEL ONLY UBISOFT CAN REGULARLY DELIVER OPEN WORLDS WE LEARNED TO MASTER THIS COMPLEX MODEL SIGNIFICANT EDGE 8
Slide 9: A Strategy That Delivers
A STRATEGY THAT DELIVERS 1/ STRENGTHEN PORTFOLIO OF OWNED FRANCHISES x 3 audience of x 2 audience of Sources: NPD, GFK Chart Track, Internal estimates 9
Slide 10: A Strategy That Delivers
A STRATEGY THAT DELIVERS 2/ STRONG EXECUTION IN BRINGING PERFORMING MULTIPLAYER TITLES 3/ SIGNIFICANTLY HIGHER ENGAGEMENT METRICS MUCH STRONGER DIGITAL RECURRING REVENUE PROFITABILITY BOOSTER 10
Slide 11: Years Plan: Well Positioned
3 YEARS PLAN: WELL POSITIONED REVENUES: 2.2BN€, +60% FY19 NON-IFRS OPERATING INCOME MARGIN: 20% FREE CASH FLOW: ~300M€ 11
Slide 12: Agenda
AGENDA EXECUTING ON THE STRATEGY FY16 PERFORMANCE FY17 TARGETS 12
Slide 13: FY16 Performance: Sales
FY16 PERFORMANCE: SALES FY16 SALES: 1 394 M€ (- 11% at cstt FX), excludes 34 M€ of digital deferred revenues Higher than revised target of 1 360 M€ AMONG TOP 5 BEST SELLERS OF CALENDAR Q1 2016 : THE DIVISION: BIGGEST LAUNCH OF NEW IP FY16 Record engagement: 9.5 M registered users 3h currently pl
Slide 14: FY16 Performance: Digital
FY16 PERFORMANCE: DIGITAL + 34 Deferred revenues 447 M€ + 47% 383 M€ Recurring Player investment* 132 + 16% 113 FY16 269 315 + 17% Full game Digital distribution FY15 FY16 *includes in-game items, DLCs/season pass, subscription and advertising 14
Slide 15: FY16 Performance: Digital
FY16 PERFORMANCE: DIGITAL Physical Digital FY15 FY16 Distribution Player DIGITAL 26% DIGITAL 32% recurring investment* OF TOTAL REVENUES OF TOTAL REVENUES * Includes ingame items, DLCs/season pass, subscription & advertising 18% 23% 8% 9% 12% with 74% 68% FY16 deferred revenues 74% RECORD THE DIVI
Slide 16: FY16 Performance: Backcatalog
FY16 PERFORMANCE: BACKCATALOG STRONG PERFORMANCE OF BACKCATALOG AT 355 M€ FY16 25% OF TOTAL REVENUES A MORE RECURRING MODEL 16
Slide 17: FY16 Performance: Earnings
FY16 PERFORMANCE: EARNINGS GROSS MARGIN: 78% Positive digital impact & strength of franchises NON-IFRS OPERATING INCOME: 169 M€ FY16 Higher than revised target of 150 M€ NET DEBT: (42) M€ POSITIVE FREE CASH FLOW BEFORE WCR: 62 M€ 17
Slide 18: FY16: Non-IFRS P&L
FY16: NON-IFRS P&L € million, except for per share data 2015-16 2014-15 restated* % % Sales 1 394,0 1 463,8 Gross profit 1 088,9 78,1 1 126,7 77,0 R&D expenses (500,3) (35,9) (573,5) (39,2) Selling expenses (304,5) (21,8) (284,1) (19,4) G & A expenses (115,1) (8,3) (98,6) (6,7) SG & A expenses Non I
Slide 19: FY16: R&D
FY16: R&D € million 2015-16 2014-15 restated Depreciation of in-house software-related production 374,2 423,8 Depreciation of external software-related production and licenses 28,8 34,1 Royalties 15,6 23,0 Non Capitalized R&D & others 81,7 92,6 Total R&D depreciation and royalties 500,3 573,5 Capita
Slide 20: FY16: IFRS / Non-IFRS Reconciliation
FY16: IFRS / NON-IFRS RECONCILIATION 2015-16 2014-15 restated* € million, except for per share data IFRS Adjustment Non IFRS IFRS Adjustment Non IFRS Sales 1 394,0 1 394,0 1 463,8 1 463,8 Total Operating expenses (1 257,2) 32,3 (1 225,0) (1 324,6) 31,3 (1 293,3) Stock-based compensation (12,9) 12,9
Slide 21: FY16: Cash Flows & Closing Cash Position
FY16: CASH FLOWS & CLOSING CASH POSITION € million 2015-16 2014-15 restated* Opening cash position 211,3 (12,7) Cash flows from operations 104,5 173,5 Change in WCR (253,3) 58,9 Cash flows from operating activities (148,8) 232,4 Net investment in capital assets (42,7) (56,5) Net free cash flow (191,
Slide 22: Agenda
AGENDA EXECUTING ON THE STRATEGY FY16 PERFORMANCE FY17 TARGETS 22
Slide 23: FY17 Targets
FY17 TARGETS SALES: ~1 700 M€ NON IFRS OPERATING INCOME: ~230 M€ STRONG FREE CASH FLOWS NEW RELEASES GROWTH WITH 5 BIG GAMES VS 4 IN FY16: + NEW AAA IP FY17 STRONG INCREASE IN BACK CATALOG: ~ 30% OF TOTAL REVENUES SIGNIFICANT GROWTH OF EXTRA CONTENT REVENUES DIGITAL REVENUE > 35% Q1 REVENUE TARGET:
Slide 24: Assassin's Creed Movie Goals
ASSASSIN’S CREED MOVIE GOALS BEST EVER VIDEO GAME FRANCHISE MOVIE ADAPTATION SIGNIFICANT FAN ACQUISITION AROUND THE BRAND 24
Slide 25: Appendices
APPENDICES
Slide 26: A More Dependable and Profitable Industry
A MORE DEPENDABLE AND PROFITABLE INDUSTRY Xbox One/PS4 transition Xbox 360/PS3 transition RISING BARRIERS DIGITALIZATION TO ENTRY X IMPACT 26