Slide 1: FY14 Earnings presentation
FY14 Earnings presentation May 15, 2014
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: Agenda
AGENDA Past 9 years key success factors FY14 performance FY15 targets 3
Slide 4: Past years key success factors: quality and regular releases
PAST 9 YEARS KEY SUCCESS FACTORS : Quality and regular releases Cumulated Retail Sales (Value) (Xbox360, PS3, Wii, WiiU, Xbox One, PS4 + PC) Publishers KEY LEARNINGS 2005 - 2013 (9 years) 1 CALL OF DUTY ACTIVISION BLIZZARD F 2 MARIO NINTENDO F FRANCHISES 3 FIFA SOCCER EA F = 4 ASSASSIN'S CREED UBISO
Slide 5: A major opportunity for Ubisoft
A MAJOR OPPORTUNITY FOR UBISOFT Open Worlds will take a bigger share of the market New cycle’s early years = great timing for new IPs Fast growing digital footprint = better players’ engagement Ubisoft to benefit disproportionaly from the market’s growth 5
Slide 6: Agenda
AGENDA Past 9 years key success factors FY14 performance FY15 targets 6
Slide 7: FY14: Sales
FY14 : Sales Sales : 1 007 M€, -20% (-17% at cstt exch. rates) Core revenues : 758 M€, -18% AC4 great performance > 11 million units 2 big titles vs 3 in FY13 Casual revenues : 249 M€, -24% FY14 Just Dance 2014 > 6 million units Digital : 195 M€, +32% 19% of total sales Driven by digital distributio
Slide 8: FY14: Ubisoft constantly stood out for the quality of its titles
FY14 : Ubisoft constantly stood out for the quality of its titles Last 25 consoles titles Average Metacritic Developers 1 2 GTA 5 Dark Souls II 97 92 TTWO Namco Bandai Games 4 in the top 10 3 4 Rayman Legends Diablo III 90 87 Ubisoft Activision best rated titles 5 Rocksmith 87 Ubisoft 6 FIFA 14 86 E
Slide 9: FY14 Q4: Solid performance from South Park
FY14 Q4 : Solid performance from South Park 9
Slide 10: FY14: Financial summary
FY14 : Financial summary Gross margin down 1 point, at high level 71,7% Positive impact of stronger than expected South Park digital distribution Non-IFRS Operating Loss : (66) M€ FY14 Delay of Watch Dogs & write-offs on F2P titles Cash flows from operating activities : (120) M€ Better than expected
Slide 11: FY14: Non-IFRS P&L
FY14 : Non-IFRS P&L € million, except for per share data 2013-14 2012-13 % % Sales 1 007,1 1 256,2 Gross profit 721,8 71,7 913,5 72,7 R&D expenses (426,1) (42,3) (428,2) (34,1) Selling expenses (279,3) (27,7) (304,0) (24,2) G & A expenses (82,0) (8,1) (81,0) (6,4) SG & A expenses (361,3) (35,9) (385
Slide 12: FY14: R&D
FY14 : R&D € million 2013-14 2012-13 Depreciation of in-house software-related production 313,0 315,1 Depreciation of external software-related production and licenses 44,4 28,7 Royalties 21,4 33,7 Non Capitalized R&D & others 47,3 50,8 Total R&D depreciation and royalties 426,1 428,2 Capitalized in
Slide 13: FY14: IFRS / non-IFRS reconciliation
FY14 : IFRS / non-IFRS reconciliation 2013-14 2012-13 € million, except for per share data IFRS Adjustment Non-IFRS IFRS Adjustment Non-IFRS Sales 1 007,1 1 007,1 1 256,2 1 256,2 Total Operating expenses (1 105,0) 32,3 (1 072,7) (1 168,3) 12,4 (1 155,9) Stock-based compensation (9,7) 9,7 0,0 (8,1) 8
Slide 14: FY14: Cash flows and closing cash position
FY14 : Cash flows and closing cash position € million 2013-14 2012-13 Opening cash position 104,5 84,6 Cash flows from operations (79,3) 58,8 Change in WCR (40,8) (30,4) Cash flows from operating activities (120,1) 28,4 Net investment in capital assets (42,9) (25,0) Net free cash flow (163,0) 3,4 Ne
Slide 15: Agenda
AGENDA Past 9 years key success factors FY14 performance FY15 15
Slide 16: FY15: Driven by core and digital segments strong growth
FY15 : Driven by core and digital segments strong growth Objectives FY Sales : minimum 1 400 M€, up 39% Q1 Sales : Around 310 M€, up > 300% Gross margins : up 3 to 4 points Marketing expenses down in % : < 18% Non-IFRS Operating Income : minimum 150 M€ FY15 Positive Free Cash Flows Key drivers Conso
Slide 17: FY15: Back to financial performance improvement
FY15 : Back to financial performance improvement Industry Soft. Sales Sales (€ million) 1 400e (€ billion) 15.9 1 256 1 007 15.7 14.5 1 061 1 039 12.2 871 10.8 20 38 78 148 193 FY10 FY11 FY12 FY13 FY14 FY15e 2009 2010 2011 2012 2013 2014 Digital Non-IFRS Op. 150e Gross Margin Income (€ million) 100
Slide 18: FY15: Far Cry 4, a new step towards the revolution of the shooter genre
FY15 : FAR CRY 4, a new step towards the revolution of the shooter genre Builds on the success of Far Cry 3 Goal : among the top 10 best selling games of the year Release date : November 18th (PS4, Xbox One, PC, 360, PS3) Lead/Associate studios : Montreal – Red Storm – Toronto – Shangai – Kiev 18
Slide 19: FY15: Assassin's Creed Unity, great new setting and innovations
FY15 : ASSASSIN’S CREED UNITY, great new setting and innovations French Revolution setting as strong as American Revolution Amazing Next Gen graphics “Qu’ils mangent de la brioche!*” Marie-Antoinette, 1789 Release date : Fall 2014 (PS4, Xbox One, PC) Lead/Associate studios : Montreal – Toronto – Sin
Slide 20: FY15: The Crew, designed to be the World of Warcraft of driving games
FY15 : THE CREW, designed to be the “World of Warcraft” of driving games A seamless single, coop and multiplayer experience Arcade style in a massive open world Release date : Fall 2014 (PS4, Xbox One, PC) Lead/Associate studios : Ivory Tower – Reflection – Shanghai 20
Slide 21: FY15: Watch Dogs set for best ever new IP launch
FY15 : WATCH DOGS set for best ever new IP launch “From the great opening mission to the insane spider robots, Watch Dogs continues to impress us.” IGN, April 2014 Most anticipated game* *January 2014 survey among Gamespot readers The most pre-ordered new IP in the industry’s history Builds on Ubiso
Slide 22: FY15: Digital revenues significant growth expected
FY15 : DIGITAL REVENUES significant growth expected DIGITAL DISTRIBUTION PC FREE-TO-PLAY MOBILE FREE-TO-PLAY … CONSOLES & PC DLC/ITEMS CONSOLES & PC DIGITAL 22
Slide 23: Appendices
APPENDICES UBISOFT
Slide 24: FY14: Topline split
FY14 : Topline split In million € Core Brands Casual Brands Total sales FY13 928 328 1 256 FY14 758 249 1 007 -18% -24% -20% Core & Casual In million € Digital Revenues FY13 148 FY14 195 +32% 24
Slide 25: CEO statement on production capacity and studios
"We believe that our major All that, combined with the Open-World production capacity, strong of a and Online expertise/know-how that network of 26 international studios and we have been growing steadily over 8 000 developers, now optimized internally make us believe that we will with our lead and a
Slide 26: Online & social breakthroughs
ONLINE & SOCIAL 5 BREAKTHROUGHS 1 SYSTEMIC GAMEPLAY 2 COOP & SOCIAL 3 LOW BARRIERS TO ENTRY 4 USER GENERATED CONTENT 5 ANALYTICS = PERSONALIZED EXPERIENCE 26
Slide 27: Online & social: systemic gameplay
ONLINE & SOCIAL 1 SYSTEMIC GAMEPLAY The BEST and MOST LUCRATIVE online games are built on SOLID SYSTEMIC FOUNDATIONS COMMON RESOURCES for INFINITE entertainment combinations Huge world LOWER Retention development COST LONG GAMING HOURS per hour played 27
Slide 28: Online & social: coop & social
ONLINE & SOCIAL COOP 2 & SOCIAL PROGRESS and interact WITH FRIENDS Requires Updates in real time (things 360 & PS3 could not do) Players Players spend LOWER COME BACK REGULARLY MORE TIME the COST Per to the world playing Acquisition (CPA) 28
Slide 29: Online & social: low barriers to entry
ONLINE & SOCIAL LOW BARRIERS 3 TO ENTRY ULTRA-ACCESSIBLE : TRY for FREE and KEEP INSTANT-ON platforms ASYNCHRONOUS, your PROGRESS MOBILE interfaces WHENEVER with when you start to PAY SMALL SESSIONS that add to A LOT OF TIME your FRIENDS CROSS PLATFORM Asynchronous, Seamless ACCESSIBLE COOL
Slide 30: Online & social: user generated content
ONLINE & SOCIAL MORE CONTENT ENHANCED 4 FROM UGC MODING & UGC due to cross platform SHARING & to ALWAYS ON UGC CREATORS become INCREASES LIFESPAN SUPER AMBASSADORS of gaming experience (Lower Cost Per Acquisition) 30
Slide 31: Online & social: analytics
ONLINE & SOCIAL 5 ANALYTICS KNOW PLAYERS (profile, what they play, what interests them most), track their sessions = Offer CONTENT that MEETS their NEEDS a PERSONNALIZED STRONGER TARGETED RELATIONSHIP experience increases MARKETING with gamers ENGAGEMENT and RETENTION 31