Ubisoft Entertainment · EURONEXT:UBI
Ubisoft Entertainment — Investor Day (February 2016)
81 slides from Ubisoft Entertainment's investor day presentation, Feb 18, 2016
Slide 1: Investor Day
INVESTOR DAY February 18th 2016
Slide 2: Disclaimer
DISCLAIMER This statement may contain estimated financial data, information on future projects and transactions and future business results/ performance. Such forward-looking data are provided for estimation purposes only. They are subject to market risks and uncertainties and may vary significantly
Slide 3: Agenda
A INTRODUCTORY REMARKS G YVES GUILLEMOT PRESIDENT & CEO E HOW WE CAN REACH A WIDER AUDIENCE JOHN PARKES N MANAGING DIRECTOR FRANCE D DRIVING ENGAGEMENT WITH LIVE & CONTENT ACTIVITIES ANNE BLONDEL A VP LIVE OPERATIONS MEDIUM TERM PLAN ALAIN MARTINEZ CHIEF FINANCIAL OFFICER 3
Slide 4: Introductory Remarks
INTRODUCTORY REMARKS Yves Guillemot, PRESIDENT & CEO 4
Slide 5: The creation of original IPs at the heart of our success
THE CREATION OF ORIGINAL IPS AT THE HEART OF OUR SUCCESS 5
Slide 6: Significant topline & profit growth ahead
SIGNIFICANT TOPLINE & PROFIT GROWTH AHEAD REVENUES: 2.2BN€, +60% NON-IFRS OPERATING INCOME MARGIN: 20% FY19 X~3 in absolute value FREE CASH FLOW: ~300M€ 6
Slide 7: A transforming industry: more dependable
A TRANSFORMING INDUSTRY: MORE DEPENDABLE BEFORE NOW HIT DRIVEN & CYCLICAL MORE RECURRING & DEPENDABLE FIRE & FORGET YEAR ROUND & MULTI-YEAR SERVICE LOW ENGAGEMENT HIGH ENGAGEMENT GAMES’ SHORT LIFE CYCLE GAMES’ LONG LIFE CYCLE NO DIRECT RELATION TO CONSTANT & DIRECT RELATION WITH GAMERS PLAYERS LOW B
Slide 8: A transforming industry: more recurring & profitable
A TRANSFORMING INDUSTRY: MORE RECURRING & PROFITABLE RECIPE FOR 30% PROFITABILITY? BIGGER HITS & DIGITAL REVENUES WE ARE EMBRACING THAT PATH 8
Slide 9: Strong execution on building the best stable of franchises
BIGGER HITS = A WIDER AUDIENCE STRONG EXECUTION ON BUILDING THE BEST STABLE OF FRANCHISES MULTI CENTRIC THANKS TO SUPER EFFICIENT & PRODUCTIVE STUDIOS 9
Slide 10: Digital revenues = growing engagement: more strong multiplayer titles
DIGITAL REVENUES = GROWING ENGAGEMENT KEY DRIVER TO GREAT ENGAGEMENT 1. MORE STRONG MULTIPLAYER TITLES MULTI CENTRIC FY17 NEW AAA IP 10
Slide 11: Year round, multi-year live content & services
DIGITAL REVENUES = GROWING ENGAGEMENT KEY DRIVER TO GREAT ENGAGEMENT 2. YEAR ROUND, MULTI-YEAR LIVE CONTENT & SERVICES 11
Slide 12: Raise the awareness of our franchises
RAISE THE AWARENESS OF OUR FRANCHISES ATTRACT MILLIONS OF NEW PLAYERS AT LOW COSTS PER ACQUISITION MOVIES TV SERIES THEME CONSUMER PARKS PRODUCTS 12
Slide 13: An agile & long-term approach
AN AGILE & LONG-TERM APPROACH 13
Slide 14: An unbiased approach
AN UNBIASED APPROACH XXX ASSASSIN’S CREED TOM CLANCY’S GHOST RECON RABBIDS THE MOVIE RABBIDS TV SHOW TOM CLANCY’S SPLINTER CELL WATCH DOGS SELECTING THE BEST PARTNERS TO MAXIMIZE OUR FRANCHISES’ POTENTIAL 14
Slide 15: What is at stake?
WHAT IS AT STAKE? OUR CAPACITY TO MANAGE UBISOFT IN AN AGILE, LONG-TERM & UNBIASED WAY TO GENERATE THE BEST RETURN FOR OUR SHAREHOLDERS 15
Slide 16: How we can reach a wider audience
HOW WE CAN REACH A WIDER AUDIENCE John Parkes, MANAGING DIRECTOR FRANCE 16
Slide 17: Reaching a wider audience
REACHING A WIDER AUDIENCE CREED RANEOWS),|SieGE ASSASSINS FARCRY WATGHDOGS Aromcvancy’s Aromcvancy’s - OK GHOSTRECON “DIVISION JHE LTEW 25 ONOR Fro, JUSTOANCE PEMcaN]
Slide 18: Reaching a wider audience: 30 years experience
REACHING A WIDER AUDIENCE 30 YEARS TALENT & PASSION CONTINUOUS EXPERIENCE INNOVATION GREAT EXECUTION LONG-TERM APPROACH 18
Slide 19: Reaching a wider audience
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 19
Slide 20: Reaching a wider audience
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 20
Slide 21: Creating blockbuster new IPs is in our DNA
CREATING BLOCKBUSTER NEW IPS IS IN OUR DNA BIGGEST NEW IP LAUNCHES EVER 1 2 3 Source: NPD, GFK Chart Track 21
Slide 22: The Division: a major creation
THE DIVISION: A MAJOR CREATION RPG SHOOTER S I N G L E P L AY E R + OPEN WORLD SEAMLESS MP/COOP 22
Slide 23: The Division: a major creation
THE DIVISION: A MAJOR CREATION 66 AWARDS 225M VIDEO VIEWS Every bit as engaging as I had hoped We see The Division as the biggest release for us in the first half of the year, and quite possibly for the whole 12 months. If it’s updated regularly I don’t see why it won’t become one of our evergreen f
Slide 24: The Division: a major creation
THE DIVISION: A MAJOR CREATION 24
Slide 25: The Division: a major creation
THE DIVISION: A MAJOR CREATION STRONG DIGITAL HUGE REACH LIVE SERVICES A MEANINGFUL CONTRIBUTOR TO OUR LONG TERM 25
Slide 26: For Honor: a great live services new creation
FOR HONOR: A GREAT LIVE SERVICES NEW CREATION SOLO & LONG TAIL H E AV Y P L AY E R M U LT I P L AY E R ENGAGEMENT COMPETITIVE 26
Slide 27: Reaching a wider audience
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 27
Slide 28: A proven track record of widening the audience
A PROVEN TRACK RECORD OF WIDENING THE AUDIENCE # [PLAYERS X3 ] Cry number FarCry Far Players NumberofPlayers FAR CRY 2 FAR CRY 3 FAR CRY 4 28
Slide 29: Bringing Rainbow 6 to a wider audience
BRINGING RAINBOW 6 TO A WIDER AUDIENCE ON TRACK STRONG MP FOR RECORD R E P U TAT I O N F R A N C H I S E AU D I E N C E 29
Slide 30: Bringing Rainbow 6 to a wider audience
BRINGING RAINBOW 6 TO A WIDER AUDIENCE # DAILY STREAMS POST LAUNCH 30
Slide 31: Bringing Rainbow 6 to a wider audience
BRINGING RAINBOW 6 TO A WIDER AUDIENCE 31
Slide 32: Bringing Ghost Recon to a wider audience
BRINGING GHOST RECON TO A WIDER AUDIENCE MILITARY SHOOTER 4 P L AY E R CO-OP / SOLO MASSIVE OPEN WORLD 32
Slide 33: Reaching a wider audience
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 33
Slide 34: Expanding successful franchises
EXPANDING SUCCESSFUL FRANCHISES THE BIGGEST 3 YEARS AGO NOW & TOMORROW SEGMENTS* RAINBOW SIX FOR HONOR MULTIPLAYER CENTRIC GHOST RECON THE CREW THE DIVISION… ASSASSIN’S CREED WATCH DOGS ASSASSIN’S CREED OPEN WORLDS THE DIVISION FAR CRY GHOST RECON THE CREW ASSASSIN’S CREED ACTION ADVENTURE ASSASSIN’
Slide 35: AC keeps entertainment blockbuster status in 2015
AC KEEPS ENTERTAINEMENT BLOCKBUSTER STATUS IN 2015 ACTIVE PLAYERS: 28M AC UNIQUE PLAYERS IN 2015 +7% VS 2014 VIDEOS: 738M VIDEO VIEWS WORLDWIDE ON THE BRAND (+ 5% VS 2014) 35
Slide 36: Reaching a wider audience
REACHING A WIDER AUDIENCE CONTINUOUS INNOVATION UNIVERSAL APPEAL IMMEDIATE FUN MEANINGFUL EXPERIENCES YEAR-ROUND ENGAGEMENT 36
Slide 37: Reaching a wider audience
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 37
Slide 38: Broadening through wider entertainment
BROADENING THROUGH WIDER ENTERTAINMENT MOVIE & TV ASSASSIN’S CREED TOM CLANCY’S RABBIDS THE MOVIE RABBIDS TV SHOW TOM CLANCY’S SPLINTER CELL GHOST RECON WATCH DOGS CONSUMER PRODUCTS THEME PARKS 38
Slide 39: Broadening through wider entertainment
BROADENING THROUGH WIDER ENTERTAINMENT DEC 21, 2016 65M UNIQUE VIEWERS* 39 * Have seen at least 1 episode
Slide 40: How we can reach a wider audience
HOW WE CAN REACH A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 40
Slide 41: Driving engagement with live content & activities
DRIVING ENGAGEMENT WITH LIVE CONTENT & ACTIVITIES Anne Blondel-Jouin, VP LIVE OPERATIONS 41
Slide 42: The summary
DRIVING ENGAGEMENT WITH LIVE CONTENT & ACTIVITIES THE SUMMARY 1. FROM A TRADITIONAL APPROACH TO A LIVE DIMENSION 2. FOCUSING THE COMPANY ON LIVE! 3. WHAT WE HAVE ACHIEVED SO FAR 4. IT’S ONLY THE BEGINNING 42
Slide 43: From a traditional approach
1. FROM A TRADITIONAL APPROACH … MOVING FROM ONE TITLE TO ANOTHER Hit 1 Hit 2 Hit 3 Hit 4 43
Slide 44: From a traditional approach to the live dimension
FROM A TRADITIONAL APPROACH 1. …TO THE LIVE DIMENSION L EVENTS TOOLS EXPANSIONS CORE GAME Daily, Weekly, Monthly for the community I V UPDATES on the fly CONTINUOUS IMPROVEMENTS … E LONG-LASTING OUTSTANDING ENTERTAINMENT EXPERIENCES 44
Slide 45: The virtuous cycle of live
1. THE VIRTUOUS CYCLE OF LIVE LIVE CONTENT ACTIVITIES ENGAGEMENT VALUE LC ROI DAU VALUE ARPU E A Time spent 45
Slide 46: Focusing the company on live!
1. FOCUSING THE COMPANY ON LIVE! G A M E R & C O M M U N I T Y S AT I S FA C T I O N 46
Slide 47: Organization
2. ORGANIZATION A L L T E A M S I N V O LV E D ROAD TO DEVELOPMENT EDITORIAL ENGAGEMENT MARKETING SALES 47
Slide 48: Organization: one organic & agile live team
2. ORGANIZATION A L L T E A M S I N V O LV E D ROAD TO DEVELOPMENT INFRASTRUCTURE & ONLINE SERVICES EDITORIAL ENGAGEMENT , MARKETING COMMUNITY TEAMS SALES ONE ORGANIC & AGILE LIVE TEAM 48
Slide 49: Organization: a dedicated live ops team
2. ORGANIZATION A N D A D E D I C AT E D L I V E O P S T E A M COLLABORATING WITH DEVELOPMENT WEEKLY MONITORING OF KPIS TO TEAMS TO INTEGRATE A LIVE DIMENSION PILOT AND ADJUST LIVE OPERATIONS, INTO THE GAME DNA AND THE BRAND USING BEST PRACTICES FROM ALL OUR PILLARS EXPERIENCES PRE LAUNCH LAUNCH POS
Slide 50: Achievements: non live AAA
3. ACHIEVEMENTS L O N G E R TA I L 2014 NON 2015 2016 LIVE AAA GAMES 50
Slide 51: Achievements: non live AAA
3. ACHIEVEMENTS L O N G E R TA I L 2014 NON 2015 2016 LIVE AAA GAMES 51
Slide 52: Achievements: non live AAA
3. ACHIEVEMENTS L O N G E R TA I L 2014 NON 2015 2016 LIVE AAA GAMES 52
Slide 53: Achievements: year-round content
3. ACHIEVEMENTS YEAR-ROUND CONTENT 4 SEASON DLCs 53
Slide 54: Year-round content roadmap
3. ACHIEVEMENTS YEAR-ROUND CONTENT Year 1 roadmap + FRIEND REFERRAL + COME BACK FOR MORE SEASON ONE SEASON TWO SEASON THREE SEASON FOUR OPERATION BLACK ICE TO BE REVEALED TO BE REVEALED TO BE REVEALED Q1 2016 Q2 2016 Q3 2016 Q4 2016 54
Slide 55: Achievements: DAU after 2 months
3. ACHIEVEMENTS DAU AFTER 2 MONTHS NON LIVE *at scale 55
Slide 56: Achievements: closed beta median daily playtime
3. ACHIEVEMENTS CLOSED BETA MEDIAN DAILY PLAYTIME
Slide 57: Achievements: The Division closed beta
3. ACHIEVEMENTS T H E D I V I S I O N C L O S E D B E TA
Slide 58: Entertaining all types of gamers thanks to esports
3. REINFORCING GAMERS’ GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS THANKS TO ESPORTS 58
Slide 59: Entertaining all types of gamers
3. REINFORCING GAMERS’ GLOBAL EXPERIENCE E N T E R TA I N I N G A L L T Y P E S O F G A M E R S PRO CASUAL PLAYER PLAYER STREAMER / EVENT BROADCASTER ORGANIZER 59
Slide 60: Esports market, broadcasters and unique viewers
3. REINFORCING GAMERS’ GLOBAL EXPERIENCE E N T E R TA I N I N G A L L T Y P E S O F G A M E R S $2B 35,610 188M $ MARKET BROADCASTERS UNIQUE VIEWERS 2018 Nov15 2015 60
Slide 61: Reinforcing gamers' global experience
3. REINFORCING GAMERS’ GLOBAL EXPERIENCE E N T E R TA I N I N G A L L T Y P E S O F G A M E R S SINCE 2003 2015WC 150K LIVE STREAM SESSIONS 950K TRACKS SHARED >100K LIVE SPECTATORS 18 M >1 M PLAYERS PEOPLE REACHED ONLINE 61
Slide 62: Reinforcing gamers' global experience
3. REINFORCING GAMERS’ GLOBAL EXPERIENCE E N T E R TA I N I N G A L L T Y P E S O F G A M E R S SINCE 2003 2015WC 150K LIVE STREAM SESSIONS 950K TRACKS SHARED >100K LIVE SPECTATORS 18 M >1 M PLAYERS PEOPLE REACHED ONLINE 62
Slide 63: Esport-ainement
3. REINFORCING GAMERS’ GLOBAL EXPERIENCE E N T E R TA I N I N G A L L T Y P E S O F G A M E R S $100k prize pool GRASSROOTS PRO TOURNAMENTS ESPORT-AINEMENT 63
Slide 64: Conclusion
4. CONCLUSION THIS IS JUST THE BEGINNING STRATEGY COLLABORATION EXPERTISE PORTFOLIO 64
Slide 65: Medium Term Plan
MEDIUM TERM PLAN Alain Martinez, CFO 65
Slide 66: Significant topline & profit growth ahead
SIGNIFICANT TOPLINE & PROFIT GROWTH AHEAD REVENUES: 2.2BN€, +60% NON-IFRS OPERATING INCOME MARGIN: 20% FY19 X~3 in absolute value FREE CASH FLOW: ~300M€ 66
Slide 67: FY19 top line assumptions: how many games?
FY19 TOP LINE ASSUMPTIONS HOW MANY GAMES? 5 AAAs BASED ON ESTABLISHED FRANCHISES 67
Slide 68: Great focus driving strong execution
GREAT FOCUS DRIVING STRONG EXECUTION STRONG CONCENTRATION 56 37 34 TOTAL NUMBER OF GAMES 21 15 14 12 FY10 FY11 FY12 FY13 FY14 FY15 FY16 *excluding F2P titles 68
Slide 69: Building on blockbuster brands
BUILDING ON BLOCKBUSTER BRANDS 69
Slide 70: FY19 top line assumptions: unit assumptions
FY19 TOP LINE ASSUMPTIONS ARE UNIT ASSUMPTIONS AGRESSIVE? 40 MILLION UNITS 70
Slide 71: FY19 top line assumptions: new markets
FY19 TOP LINE ASSUMPTIONS NEW MARKETS 71
Slide 72: Impact from recurring players investment
FY19 TOP LINE ASSUMPTIONS IMPACT FROM RECURRING PLAYERS INVESTMENT? 17% OF TOTAL REVENUES 72
Slide 73: FY19 top line assumptions: releases
FY19 TOP LINE ASSUMPTIONS FY15 FY16FY16 FY17FY17 FY18FY18 FY19 FY19 RELEASES 4 to 5 5 BIG TITLES BIG TITLES NEW AAA LIVE NEW AAA LIVE = RECURRING REVENUES 73
Slide 74: Digital share of total revenues FY16 to FY19
FY19 TOP LINE ASSUMPTIONS FY16 FY19 DIGITAL 30% DIGITAL 45% OF TOTAL REVENUES OF TOTAL REVENUES 21% 28% 70% 9% 55% 74 17% % Physical Digital Distribution XXX Player recurring investment* * Includes ingame items, DLCs/season pass, subscription & advertising 74
Slide 75: Profitability assumptions
PROFITABILITY ASSUMPTIONS GROSS MARGIN EXPANSION? YES, >80% OPERATING LEVERAGE? YES 75
Slide 76: Cash flow assumptions
CASH FLOW ASSUMPTIONS INVESTMENT GROWTH & NEW RECRUITMENTS? YES CASH USE? RETURN TO SHAREHOLDERS & INVEST FOR THE FUTURE 76
Slide 77: A different positioning, a different organization
A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION We create our own Brands (IPs) internally MAJOR BENEFITS BETTER LONG-TERM VISIBILITY ON PIPELINE NO NEED FOR EXPENSIVE M&A OR EXTERNAL TEAMS MEANINGFUL TEAMS FOR THE XXX LONG-TERM BENEFIT OF OUR SHAREHOLDERS 77
Slide 78: Big M&A is expensive
M&A ACTIVITY OF MAIN INDUSTRY PLAYERS OVER THE LAST 10 YEARS BIG M&A IS EXPENSIVE ($bn) 15,0 Cumulated M&A expenditure 12,0 9,0 CUMULATED M&A (3) 6,0 > $13BN 3,0 (2) n.a. n.a. n.a. n.a. n.a. - (1) (1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ($bn) 3,0 Cumulated M&A expenditure 2,5 2,0 1,5 C
Slide 79: Open worlds, a major growth driver
A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION OPEN WORLDS, A MAJOR GROWTH DRIVER OPEN WORLDS SHARE OF TOTAL MARKET* FY08 FY15 7% 33% *NPD, GFK, value, physical sales 79
Slide 80: Only Ubisoft can regularly deliver open worlds
A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION ONLY UBISOFT CAN REGULARLY DELIVER OPEN WORLDS UBISOFT EA ATVI TTWO KONAMI CD PROJECT WARNER FY14 AC 4 GTA V BATMAN AC UNITY FAR CRY 4 FY15 DRAGON AGE DESTINY WATCH_DOGS THE CREW AC SYNDICATE METAL THE BATMAN FY16 FAR CRY PRIMAL GEAR WITCHER MAD MAX
Slide 81: Why 9000 studio employees?
A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION WHY 9000 STUDIO EMPLOYEES? To create G R E AT N E W I P S To take advantage of O P E N W O R L D G R O W T H To have better L O N G - T E R M V I S I B I L I T Y O N O U R P I P E L I N E To come back S T R O N G O N T H E M U LT I P L AY E R F R O N