Slide 1: FY17 Earnings & Sales
FY17 EARNINGS & SALES May 16, 2017
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 A MORE RECURRING & PROFITABLE MODEL FY17 • Record Digital at 50% • Record Back-Catalog • Record non-IFRS Income • 3rd consecutive year-on-year rise in non-IFRS operating margin FY18 - FURTHER EARNINGS GROWTH • Stronger Line-up • Stronger PRI FY19 - MORE VISIBILITY & MORE PROFITABILITY
Slide 4: Agenda
AGENDA PA S T T H R E E Y E A R S M A J O R A C H I E V E M E N T S FY17 PERFORMANCE PERSPECTIVES ON FY18 F Y 1 9 TA R G E T S U P D AT E 4
Slide 5: Delivering New IPs & Franchise Reboots
DELIVERING NEW IPs & FRANCHISE REBOOTS NEW IPs CREATION FRANCHISES REBOOT WITH REMARKABLE SUCCESS 5
Slide 6: Winning the Battle for Time: Acquisition
WINNING THE BATTLE FOR TIME MULTIPLAYER COMPETITIVE A MAJOR IMPACT ON CO-OP ACQUISITION OPEN WORLDS LIVE OPERATIONS ~ 44 MILLION UNIQUE PLAYERS UP ~ 150% IN < 18 MONTHS 6
Slide 7: Winning the Battle for Time: Engagement
WINNING THE BATTLE FOR TIME MULTIPLAYER COMPETITIVE A MAJOR IMPACT ON CO-OP ENGAGEMENT OPEN WORLDS LIVE OPERATIONS Players’ playtime & Time spent Total MAUs Session days* in multi-player up 27% up 100% X4 over the past 2 years vs Watch_Dogs New Record high Total hours watched Peak concurrent players
Slide 8: Winning the Battle for Time: Digital Revenues
WINNING THE BATTLE FOR TIME MULTIPLAYER COMPETITIVE A MAJOR IMPACT ON CO-OP OPEN WORLDS DIGITAL REVENUES LIVE OPERATIONS DIGITAL AT 50% OF TOTAL REVENUES PLAYERS RECURRING INVESTMENT UP 131% 8
Slide 9: Our Financial Profile
WINNING THE BATTLE FOR TIME MULTIPLAYER COMPETITIVE A MAJOR IMPACT ON CO-OP OPEN WORLDS OUR FINANCIAL PROFILE LIVE OPERATIONS RECORD RECURRING REV. AT 44% OF TOTAL REV. RECORD PROFITABILITY AT 16% 9
Slide 10: Remarkable Achievements
REMARKABLE ACHIEVEMENTS TOTAL SHAREHOLDER RETURN Since IPO 5-year 2-year 1-year UBISOFT +2,410% +816% +186% +72% NASDAQ* +411% +122% +26% +31% CAC40 Net Return +319% +95% +14% +29% Euro Stoxx Media Supersector Return +107% +114% (0%) +9% Source: FactSet as of May 12, 2017 IPO as of July 1, 1996 *Exc
Slide 11: Agenda
AGENDA PA S T T H R E E Y E A R S M A J O R A C H I E V E M E N T S FY17 PERFORMANCE PERSPECTIVES ON FY18 F Y 1 9 TA R G E T S U P D AT E 11
Slide 12: FY17 Performance
FY17 PERFORMANCE SALES: 1 460 M€, + 5% yoy Successful releases of: FY17 1st & 2nd industry best sellers Ghost Recon community: up ~ 60% Source: Physical & digital sales of games, Jan-March 2017 – consoles/PC EMEA/US/Japan/Australia (GfK/NPD/Famitsu/in-house estimates) 12
Slide 13: FY17 Performance: Total Revenue Split
FY17 PERFORMANCE TOTAL REVENUE SPLIT FY15 FY16 FY17 DIGITAL 26% DIGITAL 32% DIGITAL 50% 18% 23% 29% 8% 74% 74% 68% 9% 50% 21% 729 M€ DIGITAL SPLIT 304 Physical Digital Distribution 447 M€ 383 M€ Player 132 Recurring 113 Investment* 315 425 * Includes ingame items, DLCs/season pass, 269 subscription
Slide 14: FY17 Performance: Back Catalog
FY17 PERFORMANCE FY17 BACK CATALOG: 44% of total Rev. (26% last year) Digital & Back-Catalog driving Ubisoft transformation towards a less hit-driven and a more recurring and dependable business 14
Slide 15: FY17 Performance: Non-IFRS Operating Income
FY17 PERFORMANCE NON-IFRS OPERATING INCOME: 238 M€ FY17 RECORD NON-IFRS OPERATING MARGIN: 16%, + 4 pts FREE CASH FLOW: 86 M€ 15
Slide 16: FY17: Non-IFRS P&L
FY17: NON-IFRS P&L € million, except for per share data 2016-17 2015-16 % % Sales 1 459,9 1 394,0 Gross profit 1 189,0 81,4 1 088,9 78,1 Non-IFRS R&D expenses (521,7) (35,7) (500,3) (35,9) Non-IFRS Selling expenses (313,1) (21,4) (304,5) (21,8) Non-IFRS G & A expenses (116,4) (8,0) (115,1) (8,3) Non
Slide 17: FY17: R&D
FY17: R&D € million 2016-17 2015-16 Depreciation of in-house software-related production 388,1 374,2 Depreciation of external software-related production and licenses 19,7 28,8 Royalties 12,3 15,6 Non Capitalized R&D & others 101,6 81,7 Total R&D depreciation and royalties 521,7 500,3 Capitalized in
Slide 18: FY17: IFRS / Non-IFRS Reconciliation
FY17 : IFRS / NON-IFRS RECONCILIATION 2016-17 2015-16 € million, except for per share data IFRS Adjustment Non IFRS IFRS Adjustment Non IFRS Sales 1 459,9 1 459,9 1 394,0 1 394,0 Total Operating expenses (1 284,1) 61,9 (1 222,2) (1 257,2) 32,3 (1 225,0) Stock-based compensation (36,8) 36,8 0,0 (12,9
Slide 19: FY17: Cash Flows & Closing Cash Position
FY17 : CASH FLOWS & CLOSING CASH POSITION € million 2016-17 2015-16 Opening cash position (41,7) 211,3 Cash flows from operations 110,3 104,5 Change in WCR 38,8 (253,3) Cash flows from operating activities 149,1 (148,8) Net investment in capital assets (63,4) (42,7) Net free cash flow 85,7 (191,5) N
Slide 20: Agenda
AGENDA PA S T T H R E E Y E A R S M A J O R A C H I E V E M E N T S FY17 PERFORMANCE PERSPECTIVES ON FY18 F Y 1 9 TA R G E T S U P D AT E 20
Slide 21: FY18: Further Earnings Growth
FY18: FURTHER EARNINGS GROWTH REVENUES: 1 700 M€ Q1 SALES: 170 M€, UP 22% yoy NON-IFRS OPERATING INCOME: 270 M€ Growth driven by: Stronger new releases FY18 “Ubisoft leading 3rd party publisher on Nintendo’s consoles over the past 10 years” Stronger Player Recurring Investment 6 Live games operated
Slide 22: FY18: Mobile, a 3-Step Approach
FY18: MOBILE, A 3-STEP APPROACH 1/ Releases from our internal studios 2/ Smart & very disciplined M&A 3/ Collaboration with the Industry’s strongest partners Recent updates: 63 days in the top 3 most downloaded games on iOS in the US China 100 millions unique users in China Might & Magic® Heroes Era
Slide 23: Agenda
AGENDA PA S T T H R E E Y E A R S M A J O R A C H I E V E M E N T S FY17 PERFORMANCE PERSPECTIVES ON FY18 F Y 1 9 TA R G E T S U P D AT E 23
Slide 24: FY19 Update: Stronger Impact from Recurring & Digital Revenues
FY19 UPDATE: STRONGER IMPACT FROM RECURRING & DIGITAL REV REVENUES: ~ 2.1BN€ ( vs 2.2 B€) NON-IFRS OPERATING INCOME: ~ 440 M€ confirmed FY19 21% MARGIN (vs. 20%) FREE CASH FLOW: ~ 300M€ confirmed 24
Slide 25: FY19 Update: Stronger Impact from Recurring & Digital Revenues
FY19 UPDATE: STRONGER IMPACT FROM RECURRING & DIGITAL REV 4 AAA vs 5 prev. 3 established franchises + 1 new IP ~ 28 M units vs 40 M prev. FY19 DIGITAL: > 55% of total revenues, vs 45% prev. PRI: > 25% of total revenues, vs 17% prev. BACK-CATALOG: meaningful increase vs prior expectations 25
Slide 26: Sales, Non-IFRS Op. Income, Gross Margin
SALES 2 100 (€ MILLION) Digital 1 700 1 464 1 394 1 460 > 55% 1 007 > 50% 50% 26% 32% 19% FY14 FY15 FY16 FY17 FY18e FY19e FY18e & FY19e Digital not at scale 440 GROSS MARGIN NON-IFRS OP. INCOME (€ MILLION) 81% 78% 270 77% 238 171 169 72% -46 FY14 FY15 FY16 FY17 FY18e FY19e FY14 FY15 FY16 FY17 FY18e
Slide 27: Beyond FY19
BEYOND FY19 WITH PLAYER RECURRING INVESTMENT EXPECTED IN FY19 AT ROUGHLY HALF OF WHERE OUR PEERS ALREADY STAND TODAY, THE OPPORTUNITIES FOR FURTHER VALUE CREATION BEYOND FY19 REMAIN MASSIVE 27