Ubisoft Entertainment · EURONEXT:UBI
Ubisoft Entertainment — H1 FY17 Earnings Presentation
34 slides from Ubisoft Entertainment's earnings presentation, Nov 3, 2016
Slide 1: H1 FY17 Earnings
H1 FY17 EARNINGS November 3, 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 BUILDING AN INCREASINGLY RECURRING DEPENDABLE BUSINESS Expanding & strengthening portfolio of owned franchises Growing digital revenues that boost profitability STRONG ENGAGEMENT & PLAYER RECURRING INVESTMENT METRICS BETTER PROFITABILITY PROFILE 3
Slide 4: Agenda
AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N D A B L E B U S I N E S S ANNUAL GENERAL MEETING H1 FY17 PERFORMANCE PERSPECTIVES ON Q3 AND FY17 FY19 4
Slide 5: Internally Created Owned Brands
INTERNALLY CREATED OWNED BRANDS STRONG VISIBILITY ON THE FUTURE OF OUR FRANCHISES * * * * *co-created or externally created 5
Slide 6: Multi-Studios Organization
MULTI-STUDIOS ORGANIZATION UNRIVALLED CAPACITY TO RELEASE OPEN-WORLD GAMES ON A REGULAR BASIS *FY15 for ATVI & Warner 6
Slide 7: Live Experiences
LIVE EXPERIENCES ENGAGING THE PLAYER OVER THE LONGTERM 7 7
Slide 8: >10 Million MAUs Up 44% YoY
LIVE EXPERIENCES >10 MILLION UNIQUE REGISTERED USERS EACH MAUs UBISOFT TOTAL UP 44% YOY 8
Slide 9: Rainbow Six Siege Unique Viewers Up 130%
LIVE EXPERIENCES PRO LEAGUE SEASON 3 RAINBOW SIX SIEGE: UNIQUE VIEWERS UP 130% VS PRIOR SEASON 9
Slide 10: Disciplined & Well Targeted Acquisitions
DISCIPLINED & WELL TARGETED ACQUISITIONS ADDING TO THE GROUP BRICKS OF RECURRING REVENUES EXPERTISE 10
Slide 11: Updates Drive Engagement Higher
H1 REFLECTS THIS STRATEGY’S BENEFITS UPDATES DRIVE ENGAGEMENT HIGHER 100% 80% 60% 40% 20% 0% 11
Slide 12: Rainbow Six Siege Praised by Its Fans
H1 REFLECTS THIS STRATEGY’S BENEFITS TOM CLANCY’S RAINBOW SIX SIEGE PRAISED BY ITS FANS AND BY THE PRESS 12
Slide 13: Engagement Up 51% with 1.4 Update
H1 REFLECTS THIS STRATEGY’S BENEFITS ENGAGEMENT UP 51% WITH 1.4 UPDATE 13
Slide 14: Agenda
AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N D A B L E B U S I N E S S ANNUAL GENERAL MEETING H H 11 FF YY 11 77 P P EE R R FF O ORRM MAAN NCC EE PERSPECTIVES ON Q3 AND FY17 FY19 14
Slide 15: Annual General Meeting - September 29, 2016
ANNUAL GENERAL MEETING - SEPTEMBER 29, 2016 MASSIVE SUPPORT FROM OUR SHAREHOLDERS 15
Slide 16: Agenda
AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N D A B L E B U S I N E S S ANNUAL GENERAL MEETING H1 FY17 PERFORMANCE PERSPECTIVES ON Q3 AND FY17 FY19 16
Slide 17: H1 FY17 Performance: A More Recurring Profile
H1 FY17 PERFORMANCE A MORE RECURRING PROFILE H1 SALES: 281 M€, up 36% yoy Q2 Sales : 142 M€, beating target of 100 M€ D I G I TA L M O M E N T U M C O N T I N U E S : H1 FY17 202 M€, + 102%, 72% of total revenues Recurring Player Investment up 132%, at 95 M€ V E R Y S O L I D B A C K - C ATA L O G :
Slide 18: H1 FY17 Performance: A More Profitable Profile
H1 FY17 PERFORMANCE A MORE PROFITABLE PROFILE 74 M€ increase in Topline : 4 6 M € N O N - I F R S O P E R AT I N G I N C O M E I N C R E A S E 6 points gross margin improvement H1 FY17 Solid costs control N E T C A S H : 38 M€ vs (156) M€ in H1 FY16 18
Slide 19: H1 FY17: Non-IFRS P&L
H1 FY17: NON-IFRS P&L € million, except for per share data H1 2016-17 H1 2015-16 % % Sales 281,4 207,3 Gross profit 226,4 80,5 154,3 74,4 Non-IFRS R&D expenses (123,8) (44,0) (99,5) (48,0) Non-IFRS Selling expenses (113,4) (40,3) (111,1) (53,6) Non-IFRS G & A expenses (51,0) (18,1) (51,5) (24,9) Non
Slide 20: H1 FY17: R&D
H1 FY17: R&D € million H1 2016-17 H1 2015-16 Depreciation of in-house software-related production 72,1 55,3 Depreciation of external software-related production and licenses 7,2 8,9 Royalties 2,8 6,4 Non Capitalized R&D & others 41,7 29,0 Total R&D depreciation and royalties 123,8 99,5 Capitalized i
Slide 21: H1 FY17: IFRS / Non-IFRS Reconciliation
H1 FY17: IFRS / NON-IFRS RECONCILIATION H1 2016-17 H1 2015-16 € million, except for per share data IFRS Adjustment Non IFRS IFRS Adjustment Non IFRS Sales 281,4 281,4 207,3 207,3 Total Operating expenses (371,7) 28,5 (343,2) (324,7) 9,5 (315,2) Stock-based compensation (24,9) 24,9 0,0 (6,0) 6,0 0,0
Slide 22: H1 FY17: Cash Flows & Closing Cash Position
H1 FY17: CASH FLOWS & CLOSING CASH POSITION € million H1 2016-17 H1 2015-16 Opening cash position (41,7) 211,3 Non-IFRS Cash flows from operations (180,2) (208,8) Non-IFRS Change in WCR 189,4 (125,9) Cash flows from Non-IFRS operating activities 9,2 (334,7) Net investment in capital assets (27,0) (
Slide 23: Agenda
AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N D A B L E B U S I N E S S ANNUAL GENERAL MEETING H1 FY17 PERFORMANCE PERSPECTIVES ON Q3 AND FY17 FY19 23
Slide 24: FY17 Targets Adjusted: Improved Profitability
FY17 TARGETS ADJUSTED: IMPROVED PROFITABILTY SALES: between 1 610 and 1 670 M€ versus 1700 M€ prev. Digital: ~ 40% of total revenues Back Catalog: ~ 35% FY17 N O N - I F R S O P E R AT I N G I N C O M E : between 230 and 250 M€ versus 230M€ prev. N O N - I F R S O P E R AT I N G M A R G I N : betwee
Slide 25: H2 FY17: Line-Up
H2 FY17: LINE-UP • EXPANSIONS 25
Slide 26: H2 FY17: Line-Up
H2 FY17: LINE-UP FY16 FY17 ASSASSIN’S CREED SYNDICATE WATCH DOGS 2 RAINBOW SIX SIEGE STEEP JUST DANCE 2016 JUST DANCE 2017 Q3 + Expansion The Crew Wild Run + Assassin’s Creed Movie + Expansions The Division Survival Rainbow 6 Siege Operation Red Crow The Crew Calling all Units FAR CRY PRIMAL FOR HON
Slide 27: Agenda
AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N D A B L E B U S I N E S S ANNUAL GENERAL MEETING H1 FY17 PERFORMANCE PERSPECTIVES ON Q3 AND FY17 FY19 27
Slide 28: FY19 Plan: On Track
3 YEARS PLAN: ON TRACK R E V E N U E S : 2.2BN€ FY19 N O N - I F R S O P E R AT I N G I N C O M E : 20% FREE CASH FLOW: ~300M€ 28
Slide 29: Appendices
APPENDICES
Slide 30: 20 Years of Strong Value Creation
20 YEARS OF STRONG VALUE CREATION TOTAL SHAREHOLDER RETURN SINCE IPO (rebased to 100) Since IPO 5-year 3-year 2-year 1-year UBISOFT +1,527% +610% +227% +115% +14% NASDAQ* +333% * +106% +37% +15% +4% CAC40 Net Return +246% +58% +13% +12% (5%) Euro Stoxx Media Supersector Return +87% +86% +19% +12% So
Slide 31: Nintendo Switch: True Innovation
NINTENDO SWITCH T R U E I N N OVAT I O N AS THE LEADING 3RD PARTY PUBLISHER ON NINTENDO HOME CONSOLES FOR THE PAST 10 YEARS, UBISOFT WILL BENEFIT DISPROPORTIONATELY 31
Slide 32: A More Dependable and Profitable Industry
A MORE DEPENDABLE AND PROFITABLE INDUSTRY Xbox One/PS4 transition Xbox 360/PS3 transition RISING BARRIERS DIGITALIZATION X TO ENTRY IMPACT 32
Slide 33: FY19: Key Assumptions – Digital
FY19: KEY ASSUMPTIONS – DIGITAL MULTIPLAYER DRIVES ENGAGEMENT WHICH DRIVES MTX AVERAGE DAUS AVERAGE PRI* (AFTER 3 MONTHS) (AFTER 3 MONTHS) Solo Centric titles Multi Centric titles Solo Centric titles Multi Centric titles [at scale] * Player recurring investment 33
Slide 34: FY19: Key Assumptions – Digital
FY19: KEY ASSUMPTIONS – DIGITAL LIVE SERVICES BRING MORE PERSISTENT REVENUES (REVENUE BREAKDOWN PER FISCAL YEAR) 100 100 Solo Centric title 44 Live title* 11 * The Crew Year 1 Year 2 34
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