Ubisoft Entertainment · EURONEXT:UBI
Ubisoft Entertainment — FY2013 Earnings Presentation
33 slides from Ubisoft Entertainment's earnings presentation, May 15, 2013
Slide 1: FY13 Earnings Presentation
FY13 Earnings Presentation May 15, 2013
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 FY13 : An outstanding performance in a challenging environment Sales up 18% − EBIT up 79% − Slightly positive FCF A broader sales base than 12 months ago Assassin’s Creed − Just Dance − Far Cry − Online Digital − Watch_Dogs(e) Continued investment in long term development Excluding Free-to-P
Slide 4: Agenda
Agenda 2005-2012 : Current Gen key learnings FY13 performance FY14 & Next Gen Strategy 4
Slide 5: Current Gen key success factors: Quality & Regular Releases
Current Gen key success factors : Quality & Regular Releases Cumulated WW sales (value) Xbox360 / PS3 / Wii / PC Publisher 2005-2012 (8 years) 1 CALL OF DUTY ACTIVISION BLIZZARD F Key learnings 2 MARIO NINTENDO F 3 FIFA SOCCER EA F Franchises 1 brand 4 WII FIT* NINTENDO NB in the top 5 ! = 5 ASSASSI
Slide 6: Agenda
Agenda 2005-2012 : Current Gen key learnings FY13 performance FY14 & Next Gen Strategy 6
Slide 7: Ubisoft now presents non-IFRS information in its earnings releases
FY13 Ubisoft now presents non-IFRS information in its earnings releases as Group Management considers that “Non-IFRS operating income” and “Non-IFRS net income” – which are measures that are not prepared strictly in accordance with IFRS – are relevant indicators of the Group’s operating and financia
Slide 8: FY13: An outstanding performance from core and online segments
FY13 : An outstanding performance from core and online segments Sales : 1 256 M€, +18% Blockbusters* Core revenues : 928 M€, +60% AC titles : 18 M units AC3 − FC3 − Ghost Recon FS JD titles : 11 M units Online revenues : 148M€, +86% FC titles : 7 M units Digital distribution − Free to Play − DLCs FY
Slide 9: FY13: Driven by core games and online/digital
FY13 : Driven by core games and online/digital In million € Core Brands Casual Brands Total sales FY12 578 483 1 061 FY13 928 328 1 256 +60% -32% +18% Core & Casual In million € Online/Digital FY12 80 FY13 148 +86% 9
Slide 10: FY13 Core Games: Major share gains from significantly stronger offer on HD consoles
FY13 Core Games : Major shares gains from significantly stronger offer on HD consoles Confirmation of the significant progression opportunity Ubisoft Core Games Sales HD consoles market software sales PS2 + Xbox + Xbox360 + PS3 Xbox360 + PS3 (sell-thru retail $ million) ($ million, retail) 1 200 14
Slide 11: FY13: Financial summary
FY13 : Financial summary Gross margin up 5 percentage points 3rd year of improvement Better ASPs for core titles (AC3, FC3, Ghost Recon FS) and Just Dance 4 + growing online sales FY13 Non-IFRS Operating Income : 100 M€, + 79% > guidance provided 12 months ago (70-90 M€) Solid net cash situation : 1
Slide 12: FY13: Non-IFRS P&L
FY13 : Non-IFRS P&L 2012-13 2011-12 € million % % Sales 1 256,2 1 061,3 Gross profit 913,5 72,7 718,1 67,7 R&D expenses (428,2) 34,1 (348,4) 32,8 Selling expenses (304,0) 24,2 (238,4) 22,5 G & A expenses (81,0) 6,4 (75,3) 7,1 SG & A expenses (385,0) 30,6 (313,7) 29,6 Non-IFRS operating income 100,3
Slide 13: FY13: R&D
FY13 : R&D € million 2012-13 2011-12 Depreciation of in-house games 315,1 206,1 Depreciation of external games and licences 28,7 64,4 Royalties 33,7 51,2 Non Capitalized R&D & others 50,8 26,7 Total R&D depreciation and royalties 428,2 348,4 Capitalized software-related production 337,8 301,8 Invest
Slide 14: FY13: IFRS / non-IFRS reconciliation
FY13 : IFRS / non-IFRS reconciliation 2012-13 2011-12 In million of euros, except for per share data IFRS Adjustment Non-IFRS IFRS Adjustment Non-IFRS Sales 1 256,2 1 256,2 1 061,3 1 061,3 Total Operating expenses (1 168,3) 12,4 (1 155,9) (1 015,7) 10,4 (1 005,3) Stock-based compensation (8,1) 8,1 0
Slide 15: FY13: Cash flows and closing cash position
FY13 : Cash flows and closing cash position € million 2012-13 2011-12 Opening cash position 84,6 99,2 Cash flows from operations 58,9 (27,0) Change in WCR (30,5) 35,2 Cash flows from operating activities 28,4 8,2 Net investment in capital assets (25,0) (25,5) Net free cash flow 3,4 (17,3) Net acquis
Slide 16: Agenda
Agenda 2005-2012 : Current Gen key learnings FY13 performance FY14 & Next Gen Strategy 16
Slide 17: Next Gen: will lead to record sales for the industry
Next Gen : will lead to record sales for the industry A major graphical and animation leap Unprecedented sense of immersion : graphics, AI, immersion, emotion Very social, multi-screens Share your experience, eSport like, streaming, instant-on demos “We live in a world of self-expression. Data drive
Slide 18: FY14: Continue to benefit from the strong momentum on online and core games
FY14 : Continue to benefit from the strong momentum on online and core games Objectives Sales : 1 420 M€ − 1 450 M€ Non-IFRS Operating Income : 110 M€ − 125 M€ Positive Free Cash Flows Key drivers Quality & scope boosted again by Lead/Associate organization & stronger focus FY14 Bigger AAA line-up N
Slide 19: FY14: Driven by core games and online/digital
FY14 : Driven by core games and online/digital In million € Core Brands Casual Brands Total sales FY13 928 328 1 256 Less than 20% FY14 Significant growth 1 420 − 1 450 of total sales Core & Casual In million € Online/Digital FY13 148 FY14 +50 / +70% growth 19
Slide 20: FY14 Core Games: Splinter Cell Blacklist
FY14 Core Games : Splinter Cell Blacklist, the perfect game for core and new fans “Blacklist features the most ambitious multiplayer Splinter Cell has ever seen, " IGN, May 2013 “Spies vs. Mercs is without a real rival in the multiplayer space today, " Joystiq, May 2013 Large scope, deep single / co
Slide 21: FY14 Core Games: Assassin's Creed Black Flag
FY14 Core Games : Assassin's Creed 4 Black Flag, another major entry in the franchise “An open-word naval adventure done by the kind of international mega-team that makes Assassin's Creed games? Sure. That's exciting enough.” Kotaku, March 2013 Yet another production prowess New hero (Edward Kenway)
Slide 22: FY14 Core Games: Watch_Dogs, a highly expected new creation
FY14 Core Games : Watch_Dogs, a highly expected new creation “Watch Dogs can end up being one of the biggest games on any system" IGN, May 2013 “From a visual perspective, the engine is stunning and fluid. The detailing on vehicles, houses, and pedestrians is impressive” GameInformer, May 2013 Build
Slide 23: FY14 Core Games: And also
FY14 Core Games : And also + 1 AAA franchise + 1 AAA new creation + + 23
Slide 24: FY14 Digital/Online: Broader distribution and stronger line-up
FY14 Digital/Online : Broader distribution and stronger line-up Digital distribution PC Free-to-Play, eSport Mobile & Console Digital … (Paymium & Free to Play) + DLCs from consoles & PC games … 24
Slide 25: FY14 Casual: Managing the transition
FY14 Casual : Managing the transition Casual < 20% total FY14 sales Great business : 7 very profitable years for Ubisoft Committed and adaptative approach Next generation to bring back casual gamers to living room 25
Slide 26: Financial performance: FY14, 4th year of regular progress
Financial performance : FY14, 4th year of regular progress Sales Non-IFRS Op. Income (€ million) 1 435* (€ million) 1 256 110-125 100 1 039 1 061 871 1 198* Packaged 56 1 108 1 001 983 29 852 148 237* Digital FY10 FY11 FY12 FY13 FY14e 20 38 78 FY10 FY11 FY12 FY13 FY14e *mid-point -60 Gross Margin 72
Slide 27: Agenda
Agenda 2005-2012 : Current Gen key learnings FY13 performance FY14 & Next Gen Strategy 27
Slide 28: Long term opportunities for our core and casual brands
Long term opportunities for our core and casual brands Ubisoft Core brands Ubisoft Casual Brands A highly committed, growing audience > 1 billion people On consoles On PC, mobile, tablet (Free to Play model) Social interactions Value added Multi-screens gaming for player Item based model Direct rela
Slide 29: Conclusion
Conclusion "We believe that our major production capacity, strong of a network of 26 international studios and over 7 000 developers, now optimized with our lead and associate organization, will allow us to come with an enhanced pipeline of increasingly high quality franchises and new IPs. We will b
Slide 30: Appendices
Agenda Appendices 30
Slide 31: Calendar 2012: Focus on bigger games is paying off
Calendar 2012 : Focus on bigger games is paying off 2012 best performers Publisher EMEA + North America (units) 1 CALL OF DUTY: BLACK OPS 2 ACTIVISION BLIZZARD 2 FIFA SOCCER 13 EA 3 ASSASSIN’S CREED III UBISOFT 4 HALO 4 MICROSOFT 2 titles in the top 5 4 titles in the top 17 5 JUST DANCE 4 UBISOFT 6
Slide 32: Calendar 2012: New market shares gains
Calendar 2012 : New market shares gains 2012 2011 Rank Publisher M.S. M.S. 1 Activision Blizzard 19,5% 15,7% 2 EA 18,4% 19,7% 3 Ubisoft 11,2% 8,8% 4 Nintendo 10,8% 12,4% 5 Take 2 6,4% 4,8% 6 Microsoft 5,0% 4,8% 7 Sony 3,5% 5,3% 8 THQ 3,3% 4,9% 9 WB 3,3% 3,7% 10 Capcom 2,4% 1,1% 32 NPD, GFK, Chart-Tr
Slide 33: FY14: Next Gen at last!
FY14 : Next Gen at last! Long term opportunities 8 years without a new console : Players even more connected Core gamers are starving! = Bring social benefits & online services Market software sales = (€ billion) A growing ARPU 16 + 14 12 +60% 10 New HD consoles cycle 8 = 6 Better graphics, more pow