Activision Blizzard — Q4 2010 Earnings Presentation
14 slides from Activision Blizzard's earnings presentation, Feb 9, 2011
Slide 1: Fourth Quarter and CY 2010 Results
Fourth Quarter and CY 2010 Results February 09, 2011
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure The statements contained in this presentation that are not historical facts are forward-looking statements. The company generally uses words such “outlook,” “will,” “could,” “should,” “would,” “might,” “remains,” “to be,” “plans,” “believes,” “may,” “expects,” “intends,” "anti
Slide 3: Activision Blizzard 2010 highlights
Activision Blizzard 2010 highlights Great results, ahead of expectations and prior year1 – Grew revenues – 14.5% Non-GAAP EPS growth to new record level – Record operating cash flow of $1.4B #1 in digital & retail channels across North America & Europe2 – #1 in digital amongst independent intera
Slide 4: Changing industry dynamics
Changing industry dynamics We live in an online, connected world – Tremendous consumer engagement in digital and social media – Activision Blizzard franchises are at the forefront of digital demand More meaningful relationships between content and consumer – Move from impersonal to deeply person
Slide 5: Positioned for continued success
Positioned for continued success Leadership position in online hosted service delivery Digital Franchises with greater reach than blue-chip ‘Software as world a Service’ and ‘Content as a Service’ providers Deeper Focusing innovation on immediate, in-game value relationships Integrated deliv
Slide 6: Activision Blizzard 2010 Results
Activision Blizzard 2010 Results Original 2010 GAAP 2009 Actual Outlook* 2010 Actual Net Revenue $4,279M $4,180M $4,447M EPS $0.09 $0.47 $0.33 EPS, ex-Impairment $0.28 $0.47 $0.49 Original 2010 Non-GAAP** 2009 Actual 2010 Actual Outlook* Net Revenue $4,775M $4,400M $4,803M EPS $0.69 $0.70 $0.79 As o
Slide 7: Activision Blizzard 4Q 2010 Results
Activision Blizzard 4Q 2010 Results GAAP 4Q 2009 Prior Outlook1 4Q 2010 Net Revenue $1.56B $1.26B $1.43B EPS ($0.23) ($0.01) ($0.20) EPS, ex-Impairment ($0.04) ($0.01) ($0.04) Non-GAAP2 4Q 2009 Prior Outlook1 4Q 2010 Net Revenue $2.50B $2.20B $2.55B EPS $0.49 $0.47 $0.53 As of 12/31/09 As of 09/30/1
Slide 8: 2011 Building blocks & initiatives
2011 Building blocks & initiatives • Strong foundation for WoW with record Cataclysm launch Growth in our high margin • Growth in China from Blizzard digital business • More online content, larger community, and bigger installed base than ever before for Call of Duty Streamlining Activision • Positi
Slide 9: Activision Blizzard Financial Outlook
Activision Blizzard Financial Outlook GAAP Non-GAAP GAAP Non-GAAP Outlook 20111,2 20111,2 1Q 20111 1Q 20111 Net Revenue $3.95B $3.90B $1.28B $640M COGS (Prod/MMOG) 30% 29% 30% 31% Op Ex incl. Royalties 46% 40% 32% 50% EPS $0.56 $0.70 $0.28 $0.07 Share Count 1.2B 1.2B 1.2B 1.2B 1 1Q 2011 and FY 2011
Slide 10: NA/EUR Hardware Outlook
NA/EUR Hardware Outlook NA and Europe Installed Base Estimated Estimated Current Gen. 12/31/10 Estimated 12/31/11 Growth Platforms Installed Base CY2011 Increase Installed Base Y/Y +24% Wii 64M 9M 73M Handhelds 130M 17M 147M Total 268M 44M 312M +16% Source: Activision Blizzard internal estimates; NP
Slide 11: Software Outlook
Software Outlook NA & Europe 360/PS3 retail software sales expected to grow again Expect Digital to be up over 20% in the US and Europe Asian online games market expected to grow at 15%+ Note: Digital represents revenues from subscription and licensing royalties, value added services, download
Slide 12: Activision Publishing focus areas
Activision Publishing focus areas 1. Call of Duty: Massive franchise with our biggest ever resource allocation 2. Project Beachhead: Best in class online community and service suite for Call of Duty 3. Downloadable Content: Record setting start with “First Strike” 4. Call of Duty China: Free-to-play
Slide 13: Blizzard Entertainment Highlights
Blizzard Entertainment Highlights Celebrating 20 years of excellence – 2010 was the best year yet: 2 new releases, Battle.net re-launch – New world-wide subscriber milestone announced for World of Warcraft at 12M in October – Both revenue and profit up significantly Y/Y in Q4 and 2010 World of W
Slide 14: *The reconciliation tables are in the earnings release and on www.activisionblizzard.com along with the
*The reconciliation tables are in the earnings release and on www.activisionblizzard.com along with the replay webcast.