Ubisoft Entertainment · EURONEXT:UBI
Ubisoft Entertainment — H1 FY12 Earnings Presentation
36 slides from Ubisoft Entertainment's earnings presentation, Nov 8, 2011
Slide 1: H1 FY12 Earnings Presentation
H1 FY12 Earnings Presentation November 08, 2011
Slide 2: Disclaimer
Yves Guillemot, President and Chief Executive Officer Alain Martinez, Chief Financial Officer Jean-Benoît Roquette, Head of Investor Relations Disclaimer This statement may contain estimated financial data, information on future projects and transactions and future business results/performance. Such
Slide 3: Summary
Summary H1 : Better than expected topline and operating income performance with strong growth margin improvement H1 : Across the board performance : Online − Casual − High Definition H2 : High potential H2 line-up for casual and passionate players, targeting Thriving HD, online platforms and casual
Slide 4: Agenda
Agenda H1 FY12 performance H2 FY12 line-up and guidance 4
Slide 5: H1 FY12 Sales
H1 FY12 : Sales Q2 Sales higher than guidance (146 M€ vs 99 M€) Across the board performance : Online − Casual − HD Benefits from stronger focus on top franchises H1 + 29 M€ from Online − Back-catalog − Driver FY12 + 18 M€ from early release of Just Dance 3 H1 Sales slightly up at constant exchange
Slide 6: H1 FY12 Financial summary
H1 FY12 : Financial summary Gross margin up 8 percentage points Thanks to better online and back-catalog H1 Improvement in Current operating loss : (49.3) M€ FY12 Lower R&D, higher marketing expenses, controlled structure costs Cash flows from operating activities* : down 19 M€ Working Capital* : im
Slide 7: Online momentum keeps growing
H1 FY12 : Online momentum keeps growing Online momentum keeps growing H1 Online sales : 30 M€, up 85% The Settlers Online From Dust, Clash of Heroes, Outland (XBLA/PSN) Trackmania 2 Canyon The Smurfs (Facebook) Full game downloads 7
Slide 8: With The Smurfs, Ubisoft entered Facebook top 15
H1 FY12 : With The Smurfs, Ubisoft entered Facebook top 15 Top Games on Facebook by MAU as on 19/09/11 Name MAU Publisher 1 CityVille 74,605,848 Zynga 2 The Sims Social 48,524,129 Electronic Arts 3 Empires & Allies 38,098,761 Zynga 4 FarmVille 36,420,878 Zynga 5 Texas HoldEm Poker 35,710,052 Zynga 6
Slide 9: Top High-Definition and Casual franchises continue to deliver
H1 FY12 : Top High-Definition and Casual franchises continue to deliver Top High-Definition and Casual franchises continue to deliver H1 Back-catalog sales : 107 M€, up 38% Assassin's Creed, Just Dance, Michael Jackson 9
Slide 10: Assassin's Creed Brotherhood as good as AC 2
H1 FY12 : Assassin's Creed Brotherhood as good as AC 2 Brotherhood's sell thru in line with AC II (value & units, ltd) Back-catalog benefits from sell-in prudence end of FY11 31 million units sold-in since the release of the first AC in FY08 10
Slide 11: Just Dance the second biggest franchise in the US
H1 FY12 : Just Dance the second biggest franchise in the US From Jan 10 to Sept 11 Rank Title Publisher (sell thru - units) 1 Black Ops Activision Blizzard 14,983,459 2 Just Dance 2 Ubisoft 5,245,480 3 Madden NFL 11 EA 5,195,251 JD2 4 Halo: Reach Microsoft 4,746,560 is the 5 New Super Mario Wii Nint
Slide 12: Driver, a high quality game
H1 FY12 : Driver, a high quality game Sales : better than planned Solid reviews (80% metacritic), excellent critics "Easily the most surprising game I've played this year" GameInformer "It looks great, it’s got a lot of personality, it tells an entertaining story and it’s great fun to play" IGN "Dri
Slide 13: Profitability up
H1 FY12 : Profitability up H1 2011-12 H1 2010-11 € million % % Sales 248,5 260,5 Gross profit 158,4 63,7 146,2 56,1 R&D expenses ( 86,7) 34,9 ( 98,4) 37,8 Selling expenses ( 87.7) 35,3 ( 81,9) 31,4 G & A expenses ( 33,2) 13,4 ( 30,8) 11,8 SG & A expenses ( 121,0) 48,7 ( 112,7) 43,2 Current operating
Slide 14: Capitalized investments slightly down
H1 FY12 : Capitalized investments slightly down € million H1 2011-12 H1 2010-11 Depreciation of in-house games 45,2 69.2 Depreciation of external games and licences 11,1 14.9 Royalties 14,4 5.6 Non Capitalized R&D & others 16,0 8.7 Total Current R&D depreciation and royalties 86,7 98.4 Total Non Cur
Slide 15: Net Income up
H1 FY12 : Net Income up € million H1 2011-12 H1 2010-11 Current operating income* ( 49,3) ( 64,9) Fair Value Variation 0,0 ( 1,4) Stock-based compensation ( 5,5) ( 5,4) Other revenues (expenses) ( 0,0) ( 62,1) Operating income/(loss) ( 54,8) ( 133,8) Net financial income/(expense) ( 1,7) ( 1,7) Shar
Slide 16: Net income before non recurring elements and stock-based compensation
H1 FY12 : Net income before non recurring elements and stock-based compensation H1 2011-12 H1 2010-11 In million of euros, Before non recurring Before non recurring except for per share data As reported Adjustment elements and stock As reported Adjustment elements and stock based based compensation
Slide 17: Cash flows comparisons impacted by one-time events
H1 FY12 : Cash flows comparisons impacted by one-time events € million HY 2011-2012 HY 2010-11 Opening cash position 99,2 41,3 Cash flows from operations ( 142,7) ( 99,2) Change in WCR ( 35,4) ( 30,6) Tax impact 0,0 0,0 Cash flows from operating activities (178,1) ( 129,8) Net investment in capital
Slide 18: Cash flows comparisons impacted by one-time events
H1 FY12 : Cash flows comparisons impacted by one-time events € million HY 2011-2012 HY 2010-11 Cash flows from operations ( 142,7) ( 99,2) Year on year difference (43,5) Tax credit related to H1 FY11 non current R&D charges (21,0) Net profit on Gameloft shares sold in H1 FY11 (3,0) Excluding one tim
Slide 19: Agenda
Agenda H1 FY12 performance H2 FY12 line-up and guidance 19
Slide 20: H2 FY12: A high-quality franchises-based line-up
H2 FY12 : A high-quality franchises-based line-up targeting the strongest segments Industry strong franchises on multi-platforms For passionate and casual audiences Targeting strong high-definition and growing online platforms and thriving casual genres Very high quality and innovative offering 20
Slide 21: H2 FY12: +2% to +7% growth expected
H2 FY12 : +2% to +7% growth expected +2% ~ +7% H2 FY11 H2 FY12 Assassin's Creed Assassin's Creed Ghost Recon High- Shaun White Rayman Origins Definition Raving Rabbids Raving Rabbids Tintin + Just Dance 3 stronger Just Dance 2 Black Eyed Peas digital distribution Casual Michael Jackson Abba & Your S
Slide 22: High-Definition: Assassin's Creed Revelations (Q3)
High-Definition : Assassin's Creed Revelations (Q3) The lead/associate studios organisation is delivering Execution prowess "I'm consistently impressed by Ubisoft's apparent ability to crank out complete Assassin's Creed games each year" Kotaku A great game "A few hours with ACR barely scratched the
Slide 23: High-Definition: Rayman Origins (Q3)
High-Definition : Rayman Origins (Q3) Major expectations from gaming press "Michel Ancel triumphantly returns to his beloved franchise with Rayman Origins" IGN "Dynamic, funny and absolutely beautiful, it gets all the assets of a marvel capable of satisfying the old hardened fans as the newcomers" j
Slide 24: High-Definition: Ghost Recon Future Soldier (Q4)
High-Definition : Ghost Recon Future Soldier (Q4) March 2012 Major communication plan starts in December Back in the Shooter War ! Industry best visuals, great single player, 4 players coop, huge multiplayer campaign 18 million units sold-in since brand creation 24
Slide 25: High-Definition: Ghost Recon Future Soldier (Q4)
High-Definition : Ghost Recon Future Soldier (Q4) Engage gamers with an integrated multiplatforms experience Free to Play Facebook 25 Consoles iOS 25
Slide 26: Casual: Capitalize on 5 years of successful experience (Q3)
Casual : Capitalize on 5 years of successful experience (Q3) Successful franchises Just Dance 3, Black Eyed Peas, Abba … Leverage new platforms Kinect, Move Just Dance 3, BEP & Michael Jackson on Kinect YourShape, MotionSports Adrenaline … New experiences Rocksmith, James Noir's Hollywood Crimes … 2
Slide 27: Casual: Just Dance 3 launch update (Q3)
Casual : Just Dance 3 launch update (Q3) Highly rated by players on Amazon.com First 3 weeks significantly up versus JD2 JD3 Wii up (double digit growth) versus JD2 Wii + JD3 Kinect + JD Japan 27
Slide 28: Online: Continue to build our expertise and grow topline and profitability
Online : Continue to build our expertise and grow topline and profitability (H2) H2 FY12 Free to Play Settlers Online – Ghost Recon Online The Smurfs – Imagine Town Howrse Trackmania 2 Canyon/ManiaPlanet XBLA/PSN Trials Evolution – Shoot many robots Bable Rising – I am Alive iOs Monster Burner – AC
Slide 29: Online: Expand expertise and brands
Online : Expand expertise and brands Expert in Free to Play ecosystems Total registered users : 25 million – Howrse MAUs : 2.4 million Topline growth of 70% last year and profitability > 20% Expand Howrse & strengthen our own online operations Expert in digital multiplatforms Trials HD : XBLA bestse
Slide 30: Online: Uplay, Ubisoft's online service platform
Online : Uplay, Ubisoft’s online service platform The online hub that puts players at the core of the experience Unique account for all brands and platforms − Integrated multiplatforms experience 17 million members Uplay services available : Win/Share/Help/Shop 600 million units won − 10 million vir
Slide 31: FY12: Guidance
FY12 : Guidance Q3 sales : 580 M€ to 620 M€ FY 12 Sales : 1 040 M€ to 1 080 M€ FY12 Gross Margin : up 2 percentage points Better Back-Catalog margins and increased online revenues Current operating income : 40 M€ to 60 M€ 31
Slide 32: Summary
Summary H1 : Better than expected topline and operating income performance with strong growth margin improvement H1 : Across the board performance : Online − Casual − High Definition H2 : High potential H2 line-up for casual and passionate players, targeting Thriving HD, online platforms and casual
Slide 33: Agenda: Appendices
Agenda Appendices 33
Slide 34: Online: Ghost Recon Online, a Free-To-Play for the cult gamer franchise
Online : Ghost Recon Online, a Free-To-Play for the cult gamer franchise "It’s surprisingly good. I say ‘surprisingly’ because free-to-play can sometimes mean cheap. Ubisoft have been working on GRO for 2 years, and it feels like a proper shooter – in fact it’s remarkably slick." PC Gamer Online "Fo
Slide 35: Online: TrackMania / ManiaPlanet, powered by players
Online : TrackMania / ManiaPlanet, powered by players Geography of Online Gamers powered by players TrackMania 2 Canyon released on September 14th 35
Slide 36: Online: Engage players with Uplay
Online : Engage players with Uplay Content Console manufacturers Ubisoft Player & Retailers Additional Content Ubisoft Player Services Direct contact to 17 million registered users Uplay users play more, are more committed to our games : stronger brand loyalty Grows our franchises revenue potential
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