Ubisoft Entertainment · EURONEXT:UBI
Ubisoft Entertainment — FY2015 Earnings Presentation
23 slides from Ubisoft Entertainment's earnings presentation, May 12, 2015
Slide 1: FY15 Earnings presentation
FY15 Earnings presentation May 12th, 2015
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: Summary
SUMMARY Players at the heart of our games and brands success Teams’ strong execution on all strategic priorities - Strong portfolio of entertainment brands - Systemic open worlds - Growing communities & engagement - Digital FY16: Record operating income target Beyond: Financial performance driven by
Slide 4: Agenda
AGENDA FY15 performance FY16 targets 4
Slide 5: Open worlds take a bigger share
OPEN WORLDS TAKE A BIGGER SHARE BEST SELLERS 2014 (value) 1 COD : Advanced Warfare 2 FIFA 15 3 GTA V 4 Destiny OPEN WORLDS SHARE OF TOTAL MARKET 5 Watch Dogs 6 AC Unity + Rogue 2008 2014 7 Far Cry 4 16% 30% 8 Super Smash Bros. 9 Madden NFL 15 10 FIFA 14 Players’ growing appetite for Freedom 5 Physic
Slide 6: Ubisoft's strategy has delivered handsomely
UBISOFT’S STRATEGY HAS DELIVERED HANDSOMELY BEST SELLERS 2014 (value) 1 COD : Advanced Warfare 2 FIFA 15 GROWING COMMUNITY & ENGAGEMENT 3 GTA V 4 Destiny Community + 54% 5 Watch Dogs Rewards collection +100% 6 AC Unity + Rogue 7 Far Cry 4 8 Super Smash Bros. XBOX ONE & PS4 9 Madden NFL 15 10 FIFA 14
Slide 7: FY15 performance
FY15 PERFORMANCE Sales : 1,464 M€ (+42% at cstt FX) Outstanding new releases : Assassin’s Creed (U+R) - Watch Dogs - Far Cry 4 - the Crew > 30 M units collectively FY15 Just Dance BIGGEST MUSIC VIDEOGAME BRAND EVER Back-catalog : 233 M€ (flat yoy), 16% total revenues Assassin’s Creed - Far Cry - Roc
Slide 8: FY15 performance: digital strong momentum
FY15 PERFORMANCE Digital strong momentum : 26% of total rev (vs 19%) 383 M€ +97% 113 +31% Other Digital revenues * Full game Digital distribution FY15 195 M€ 87 269 +149% 108 FY14 FY15 *mostly extra contents for console, PC & mobile 8
Slide 9: FY15: Financial summary
FY15 : FINANCIAL SUMMARY Record gross margin at 77% top franchises momentum + digital revenues impact FY15 Record non-IFRS Operating profit : 171 M€ (target of 165 M€) Record Free Cash flow: 176 M€ Net cash situation: 211 M€ 9
Slide 10: FY15: Non-IFRS P&L
FY15 : NON-IFRS P&L € million, except for per share data 2014-2015 2013-2014 % % Sales 1 463,8 1 007,1 Gross profit 1 126,7 77,0 721,8 71,7 R&D expenses (573,5) (39,2) (426,1) (42,3) Selling expenses (284,1) (19,4) (279,3) (27,7) G & A expenses (98,4) (6,7) (82,0) (8,1) SG & A expenses Non IFRS Curr
Slide 11: FY15: R&D
FY15 : R&D € million 2014-15 2013-14 Depreciation of in-house software-related production 423,8 313,0 Depreciation of external software-related production and licenses 34,1 44,4 Royalties 23,0 21,4 Non Capitalized R&D & others 92,6 47,3 Total R&D depreciation and royalties 573,5 426,1 Capitalized in
Slide 12: FY15: IFRS / Non-IFRS reconciliation
FY15 : IFRS / NON-IFRS RECONCILIATION 2014-15 2013-14 € million, except for per share data IFRS Adjustment Non-IFRS IFRS Adjustment Non-IFRS Sales 1 463,8 1 463,8 1 007,1 1 007,1 Total Operating expenses (1 324,4) 31,3 (1 293,1) (1 105,0) 32,3 (1 072,7) Stock-based compensation (9,6) 9,6 0,0 (9,7) 9
Slide 13: FY15: Cash flows & closing cash position
FY15 : CASH FLOWS & CLOSING CASH POSITION € million 2014-2015 2013-2014 Opening cash position (12,7) 104,5 Cash flows from operations 173,6 (79,3) Change in WCR 58,8 (40,8) Cash flows from operating activities 232,4 (120,1) Net investment in capital assets (56,1) (42,9) Net free cash flow 176,3 (163
Slide 14: Agenda
AGENDA FY15 performance FY16 targets 14
Slide 15: FY16: Targets confirmed
FY16 : TARGETS CONFIRMED TARGETS Sales: Stable Non-IFRS Operating Income : minimum 200 M€ KEY DRIVERS New releases down yoy AC Syndicate - R6 Siege – Just Dance - The Division + 1 AAA title FY16 Digital (~30% of total rev) & back catalogue growth Favorable FX Higher GM and lower R&D as a % of sales
Slide 16: Ubisoft financial performance
UBISOFT FINANCIAL PERFORMANCE Industry Soft. Sales Sales (€ million) 1 464 excl. Digital (€ billion) 15.7 14.5 1 256 1 007 12.2 10.8 1 039 1 061 9.5 378 148 193 38 78 FY11 FY12 FY13 FY14 FY15 FY16e 2010 2011 2012 2013 2014 2015e Digital Non-IFRS Op. 200e Gross Margin 171 Income (€ million) 72.7% 71.
Slide 17: FY16: Assassin's Creed Syndicate
FY16 : ASSASSIN’S CREED SYNDICATE New setting: Birth of organized crime in London at the height of the Industrial Revolution Play Evie and Jacob Frye Single player only Release: October 23rd (Xbox One & PS4) / Fall 2015 (PC) 17
Slide 18: FY16: Rainbow 6 Siege
FY16 : RAINBOW 6 SIEGE Community’s positive reception to the Closed Alpha Deep replayability potential procedural destruction Best E3 PC game + asymmetrical assault gameplay “Rainbow Six was our favorite game at E3” + operators class system PC Game Gamer, of May 14 the show Release : FY Q3 (Xbox One
Slide 19: FY16: The Division
FY16 : THE DIVISION Highly anticipated open-world MMO RPG The Snowdrop engine: amazing graphics Most anticipated titles Release : FY Q4 (Xbox One, PS4 & PC) 19
Slide 20: FY16: Digital live services
FY16 : DIGITAL LIVE SERVICES LIVE SERVICES CONSOLE / PC MOBILE FY15 New for FY16 more to be announced 20
Slide 21: Appendices
APPENDICES UBISOFT
Slide 22: Past 10 years key success factors
PAST 10 YEARS KEY SUCCESS FACTORS Cumulated Retail Sales (Value) (Xbox360, PS3, Wii, WiiU, Xbox One, PS4 + PC) Publishers KEY LEARNINGS 2005 - 2014 (10 years) 1 CALL OF DUTY ACTIVISION BLIZZARD F 2 MARIO NINTENDO F 3 FIFA SOCCER EA F FRANCHISES 4 GTA TAKE-TWO F = AC THE 5TH 5 ASSASSIN'S CREED UBISOF
Slide 23: Ubisoft's stock much more liquid than it may appear
UBISOFT’S STOCK much more liquid than it may appear Volume Fragmentation As of May, 11th Euronext 35% of total liquidity Average volume over 1 year at 963 000 shares 23