Ubisoft Entertainment · EURONEXT:UBI
Ubisoft Entertainment — H1 FY18 Earnings Presentation
27 slides from Ubisoft Entertainment's earnings presentation, Nov 7, 2017
Slide 1: H1 FY18 Earnings
H1 FY18 EARNINGS November 7, 2017 1
Slide 2: Disclaimer
Yves Guillemot, President and Chief Executive Officer Alain Martinez, Chief Financial Officer 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. Such forward-looking data are provided for e
Slide 3: Key Takeaways
KEY TAKEAWAYS OUTPERFORMANCE DRIVEN BY HIGH QUALITY OFFERINGS & LONG TERM SUPPORT OF OUR GAMES A LOT MORE TO COME WELL BEYOND FY19 3
Slide 4: Agenda
AGENDA O U T S TA N D I N G G A M E S X P + L O N G T E R M S U P P O R T DRIVE FINANCIAL OUTPERFORMANCE H1 FY18 PERFORMANCE F Y 1 8 & F Y 1 9 TA R G E T S 4
Slide 5: Major New Releases
MAJOR NEW RELEASES … * * 83 85 * * 81 *Weighted average reviews for PS4, Xbox One, PC as of 11/06/17 5
Slide 6: Great Content Update, Supporting Our Games for the Long Term
… + GREAT CONTENT UPDATE … SUPPORTING OUR GAMES FOR THE LONG TERM 6
Slide 7: And More to Come
.. AND MORE TO COME ... FOOD LION? han
Slide 8: Are Driving Performance: Strong & Higher-Than-Expected H1 Performance
… ARE DRIVING PERFORMANCE DIGITAL TRANSFORMATION PROFITABILITY & RECURRENCE ADDITIONAL MEANS FOR CREATION QUALITY, STRENGTH & REGULARITY OF CONTENT + PROVEN MULTISTUDIOS ORGANIZATION + LONG TERM INVESTMENT IN OUR TEAMS CAPABILITIES STRONG & HIGHER-THAN-EXPECTED H1 PERFORMANCE 8
Slide 9: Strong Value Creation for the Years to Come: Total Shareholder Return
STRONG VALUE CREATION FOR THE YEARS TO COME TOTAL SHAREHOLDER RETURN Since IPO 5-year 2-year 1-year UBISOFT +3,337% +814% +140% +111% NASDAQ +462% +140% +36% +31% CAC40 Net Return +332% +81% +18% +25% Euro Stoxx Media Supersector Return +101% +81% (1%) +8% Source: FactSet as of October 31, 2017 IPO
Slide 10: Agenda
AGENDA O U T S TA N D I N G G A M E S X P + L O N G T E R M S U P P O R T DRIVE FINANCIAL OUTPERFORMANCE H1 FY18 PERFORMANCE F Y 1 8 & F Y 1 9 TA R G E T S 10
Slide 11: H1 FY18 Performance
H1 FY18 PERFORMANCE H1 SALES: 466 M€, + 66 % yoy Q2 Sales: 264 M€ (target of 190 M€) OUTPERFORMANCE FROM H1 FY18 & FROM MOBILE 11
Slide 12: Long Term Support of Our Games & Communities
LONG TERM SUPPORT OF OUR GAMES & COMMUNITIES 12
Slide 13: Acquisition & Engagement Continue to Grow
ACQUISITION & ENGAGEMENT CONTINUE TO GROW Viewership + 525% yoy Total MAUs Top 7 up 29 % most watched (excl. Mobile) on Youtube ~ 300 M weekly Ubisoft Club challenges played over the ~ 25 million players past 22 months by R6 players Free Weekend Mobile DAUs Free weekend + up 234 % = Ghost War Solid
Slide 14: H1 FY18 Performance - Digital
H1 FY18 PERFORMANCE - DIGITAL DIGITAL SPLIT 343 M€ + 69% yoy Player Recurring Investment* 175 + 83% yoy 202 M€ 95 100 M€ Digital 41 168 Distribution 107 + 57% yoy 59 H1 FY16 H1 FY17 H1 FY18 * Includes ingame items, DLCs/season pass, subscription & advertising 14
Slide 15: H1 FY18 Performance: Back-Catalog
H1 FY18 PERFORMANCE VERY SOLID BACK-CATALOG: H1 379 M€, + 48% FY18 > FY16 full year back-catalog INCREASING RECURRENCE OF OUR MODEL 15
Slide 16: H1 FY18 Performance: Operating Income, Cash Flow, Net Debt
H1 FY18 PERFORMANCE NON-IFRS OPERATING INCOME: 3 M€, up 65M€ yoy H1 CASH FLOW FROM OPERATION: - 84 M€, up 97M€ yoy FY18 NET DEBT: 186 M€ Working capital impact 16
Slide 17: H1 FY18: Non-IFRS P&L
H1 FY18: NON-IFRS P&L € million, except for per share data H1 2017-18 H1 2016-17 % % Sales 466,2 281,4 Gross profit 390,1 83,7 226,4 80,5 Non-IFRS R&D expenses (186,5) (40,0) (123,8) (44,0) Non-IFRS Selling expenses (138,6) (29,7) (113,4) (40,3) Non-IFRS G & A expenses (61,9) (13,3) (51,0) (18,1) No
Slide 18: H1 FY18: R&D
H1 FY18: R&D € million H1 2017-18 H1 2016-17 Depreciation of in-house software-related production 107,4 72,1 Depreciation of external software-related production and licenses 3,2 7,2 Royalties 4,9 2,8 Non Capitalized R&D & others* 70,9 41,7 Total R&D P&L 186,5 123,8 Capitalized in-house software-rel
Slide 19: H1 FY18: IFRS / Non-IFRS Reconciliation
H1 FY18: IFRS / NON-IFRS RECONCILIATION H1 2017-18 H1 2016-17 € million, except for per share data IFRS Adjustment Non IFRS IFRS Adjustment Non IFRS Sales 466,2 466,2 281,4 281,4 Total Operating expenses (500,6) 37,5 (463,1) (371,7) 28,5 (343,2) Stock-based compensation (27,8) 27,8 0,0 (24,9) 24,9 0
Slide 20: H1 FY18: Cash Flows & Closing Cash Position
H1 FY18: CASH FLOWS & CLOSING CASH POSITION € million H1 2017-18 H1 2016-17 Opening cash position (80,4) (41,7) Cash flows from operations (83,6) (180,2) Change in WCR 2,3 189,5 Cash flows from operating activities (81,3) 9,2 Net investment in capital assets (28,3) (27,0) Net free cash flow (109,7)
Slide 21: Agenda
AGENDA O U T S TA N D I N G G A M E S X P + L O N G T E R M S U P P O R T DRIVE FINANCIAL OUTPERFORMANCE H1 FY18 PERFORMANCE F Y 1 8 & F Y 1 9 TA R G E T S 21
Slide 22: FY18: Further Earnings Growth
FY18: FURTHER EARNINGS GROWTH REVENUES: 1 700 M€, +16% Q3: 630 M€ NON-IFRS OPERATING INCOME: 270 M€ Growth driven by: FY18 Stronger new releases Stronger Player Recurring Investment 6 Live games operated Full Year (vs. 3) Digital: > 50% of total rev. Back-Catalog: > 40% of total rev. . 22
Slide 23: FY18: The Assassin's Creed Franchise Is Officially Back
FY18: THE ASSASSIN’S CREED FRANCHISE IS OFFICIALLY BACK FIRST 10 DAYS UNIT SALES X2 VS SYNDICATE* DIGITAL DISTRIBUTION UP 20 POINTS PRI TRENDING VERY NICELY BIGGEST POST LAUNCH CONTENT EVER 23 *sources : Sell-Through, comparable basis, internal estimates based on 10 days of sales
Slide 24: FY18: H2 Line-Up
FY18: H2 LINE-UP Q3 Q4 EXPANSIONS Q3 24
Slide 25: FY19: Strong Year Confirmed
FY19: STRONG YEAR CONFIRMED REVENUES: ~ 2.1BN€ NON-IFRS OPERATING INCOME: ~ 440 M€ FY19 21% MARGIN FREE CASH FLOW: ~ 300M€ 25
Slide 26: Beyond FY19
BEYOND FY19 We are delighted that the 3-year plan we presented to you back in February 2016 is going so well thanks to the strong outperformance from our teams and the humbling support of our growing player communities. We continue to do what we do best. That is building Ubisoft step by step, with a
Slide 27: Thank You
THANK THANKYOU YOU 27
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