Slide 1: FY12 Earnings Presentation
FY12 Earnings Presentation May 15, 2012
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 FY12 : Performance driven by strong performance from Just Dance, Assassin’s Creed and online/digital FY12 : Operating income up 90%, at the top end of initial guidance FY12 : Solid financial situation of 85 M€ with positive operating cash flows FY12 : Continued investments in online opportun
Slide 4: Agenda
Agenda FY12 performance FY13, a turning point Longer term 4
Slide 5: FY12: Sales driven by Just Dance, Assassin's Creed and Online/Digital
FY12 : Sales driven by Just Dance, Assassin’s Creed and Online/Digital Sales : 1 061 M€, +4% at constant exchange rate Total Core sales : 578 M€ Strong performance : Assassin’s Creed − Settlers Online Critical success : Driver San-Francisco − Rayman Origins FY12 Total Casual sales : 483 M€ Strong pe
Slide 6: FY12: Sales
FY12 : Sales In million € Core Brands Casual Brands Total sales FY11 600 438 1 038 FY12 578 483 1 061 FY12 vs FY11 -4% +10% +2% Core & Casual In million € Core Retail Casual Retail Total sales Online/Digital FY11 565 435 38 1 038 FY12 511 470 80 1 061 FY12 vs FY11 -10% +8% +111% +2% 6
Slide 7: FY12: Margins continue to improve
FY12 : Margins continue to improve Gross margin up almost 3 percentage points Thanks to better online and back-catalog Current operating income : 56 M€, +90% FY12 Top end of guidance provided 12 months ago (40 M€ − 60 M€) Solid Net cash position : 85 M€ Better than anticipated Operating Cash flows w
Slide 8: FY12: Profitability up
FY12 : Profitability up 2011-12 2010-11 € million % €m % Sales 1 061,3 1 038,8 Gross profit 718,1 67,7 673,6 64,8 R&D expenses (348,4) 32,8 (363,5) 35,0 Selling expenses (238,4) 22,5 (212,9) 20,5 G&A expenses (75,3) 7,1 (67,9) 6,5 SG&A expenses (313,7) 29,6 (280,8) 27,0 Current operating income 56,0
Slide 9: FY12: Capitalized investments slightly up
FY12 : Capitalized investments slightly up € million 2011-12 2010-11 Depreciation of in-house games 206,1 240,9 Depreciation of external games and licences 64,4 61,2 Royalties 51,2 45,1 Non Capitalized R&D & others 26,7 16,4 Total Current R&D depreciation and royalties 348,4 363,5 Total Non Current
Slide 10: FY12: Net Income up
FY12 : Net Income up € million 2011-12 2010-11 Current operating income 56,0 29,4 Fair Value Variation 0,0 (1,4) Stock-based compensation (10,4) (11,1) Other revenues (expenses) 0,0 (97,4) Operating income/(loss) 45,6 (80,5) Net financial income/(expense) 2,5 ( 3,7) Share of profit of associates 0,0
Slide 11: FY12: Net income before non recurring elements and stock-based compensation
FY12 : Net income before non recurring elements and stock-based compensation 2011-12 2010-11 In million €, Before non recurring Before non recurring except for per share data As reported Adjustment elements and stock As reported Adjustment elements and stock based based compensation compensation Sal
Slide 12: FY12: Closing cash position better than anticipated
FY12 : Closing cash position better than anticipated € million 2011-12 2010-11 Opening cash position 99,2 41,3 Cash flows from operations (27,0) 28,3 Change in WCR 35,2 25,9 Cash flows from operating activities 8,2 54,2 Net investment in capital assets (25,5) ( 22,0) Net free cash flow (17,3) 32,2 N
Slide 13: FY12: Cash flows comparisons impacted by one-time events
FY12 : Cash flows comparisons impacted by one-time events € million 2011-2012 2010-11 Cash flows from operations (27,0) 28,3 Year on year difference (55,3) Tax credit related to FY11 non current R&D charges (32,5) Excluding one time events, Cash flows from operations year on year difference is (22.8
Slide 14: Agenda
Agenda FY12 performance FY13, a turning point Longer term 14
Slide 15: FY13: A turning point
FY13 : A turning point Expectations Sales : 1 160 M€ – 1 200 M€, up +9% to +13% Gross margin : up 2 to 3 percentage points Current Operating Income : 70 M€ – 90 M€, up +25% to +61% Positive Operating Cash Flows Key drivers FY13 Investments in versatile teams and online Bigger focus on huge AAA title
Slide 16: 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 Material decrease FY13 Significant growth conservatively 1 160 – 1 200 budgeted Core & Casual In million € Online/Digital FY12 80 FY13 +80 / +100% growth 16
Slide 17: Core Games: Significantly stronger offer on HD consoles
FY13 Core Games : Significantly stronger offer on HD consoles A significant progression opportunity lies in front of Ubisoft Ubisoft Core Games Sales HD consoles market software sales PS2 + Xbox + Xbox360 + PS3 Xbox360 + PS3 (sell-thru $ million) ($ million) 1 200 14 000 1 000 12 000 10 000 800 8 00
Slide 18: Core Games: Assassin's Creed 3, the biggest launch in Ubisoft's history
FY13 Core Games : Assassin's Creed 3, the biggest launch in Ubisoft’s history "See, here's the thing about Assassin's Creed III: what we've seen looks terrific." Gamespot, March 2012 A new setting : The American Revolution (1753-1783) A new hero with a tomahawk : Connor “Ratohnhaké:ton”, born of a w
Slide 19: Core Games: Ubisoft re-enters the shooter category
FY13 Core Games : Ubisoft re-enters the shooter category Ubisoft re-enters the biggest segment of the industry ShootMania Ghost Recon Online FarCry 3 Ghost Recon Future Soldier 20% Shooters 19% RPG 35% Shooters 40% Driving RPG 15% Others Sport 40% Action Adventure 15% 8% Others 8% The console opport
Slide 20: Core Games: Ghost Recon Future Soldier
FY13 Core Games : Ghost Recon Future Soldier "Great though many of its competitors may be, few shooters think about combat as intelligently as Ghost Recon.” IGN, April 2012 Back in the shooter race : >12 hours solo + great 4 players coop and multiplayer A fresh and highly impactful experience True t
Slide 21: Core Games: FarCry 3
FY13 Core Games : FarCry 3 “Seeing Far Cry 3 for the first time landed that game right near the top of my list of most anticipated games of 2012.” Gamespot, March 2012 A MONSTER game Huge single and multiplayer Deep social benefits integrated in the experience Beautiful graphics Big at E3 last year,
Slide 22: Online/Digital: a strong growth and profitability driver
FY13 Online/Digital : a strong growth and profitability driver Make a difference in the online world = quality + brands’ reputation Digital distribution growing momentum First material revenues from our pure online titles iOs/Android increased focus on free-to-play – Xbla/PSN … + Signicant improveme
Slide 23: Online/Digital: a strong growth and profitability driver
FY13 Online/Digital : a strong growth and profitability driver Ubisoft targets the fast growing Free to Play market PC online games & wireless games CAGR 2011-15 Worldwide revenues ($ million) +11% 45 000 40 000 +15% 35 000 30 000 25 000 Wireless games 20 000 PC Online games 15 000 10 000 5 000 - 20
Slide 24: Online/Digital: pure online/digital games key highlights
FY13 Online/Digital : pure online/digital games key highlights First Ubisoft organic success A great acquisition Ubisoft BlueByte (Germany) Ubisoft Owlient (France) PC Free to play PC Free to play Already profitable and growing Very profitable and growing Big eSport opportunity R
Slide 25: Online/Digital: pure online/digital games key highlights
FY13 Online/Digital : pure online/digital games key highlights Players compete online on PC and iPad A hardcore brand Might & Magic, a cult PC brand for a committed audience Ubisoft Quebec Ubisoft Bluebyte (Germany) PC & iPad Free to play PC Free to play Closed beta Closed beta H
Slide 26: Casual Games: Prudent expectations, but many opportunities in front of us
FY13 Casual Games : Prudent expectations, but many opportunities in front of us Our guidance conservatively forecasts a drop in new sales and back catalog sales for the JD franchise Our goal is to continue to grow the brand with geographical expansion, and new platforms like WiiU 26
Slide 27: Casual Games: Prudent expectations, but many opportunities in front of us
FY13 Casual Games : Prudent expectations, but many opportunities in front of us Material decrease conservatively forecasted WiiU could provide a major boost Marvel Avengers for WiiU and Kinect Rocksmith to be launched in EMEA Casual online revenues to grow 27
Slide 28: Agenda
Agenda FY12 performance FY13, a turning point Longer term 28
Slide 29: Long term opportunities for our core and casual brands
Long term opportunities for our core and casual brands Ubisoft Core brands Ubisoft Casual Brands For a highly committed For > 1 billion people and growing audience On PC, smartphones, tablets On consoles On consoles Free to Play model Analytics Social benefits Item based models Connect through Uplay
Slide 30: Core brands: Long term opportunities with the HD console market
Core brands : Long term opportunities with the HD console market Long term opportunities The HD consoles thrives Players even more connected = Market software sales Bring social benefits to them ($ billion) = 12 A growing ARPU! +40% 10 8 6 + 4 New HD consoles cycles 2 = Better graphics, more power 0
Slide 31: Core brands: Long term opportunities with the Free to Play model
Core brands : Long term opportunities with the Free to Play model Long term opportunities 1- Bring core brands to huge PC audiences previously unreachable 2- Expand core brands on mobile and tablet platforms The Free to Play model adapts to ≠ purchasing power and consumption patterns 31
Slide 32: Casual brands: Long term opportunities
Casual brands : Long term opportunities Long term opportunities A unique capacity Many drivers to reach a huge audience to create regularly casual blockbusters Over 80 million games sold! Over 1 billion players! Proven formula for success with casual brands + free to play models = Huge opportunities
Slide 33: Conclusion
Conclusion Make a difference Capture with Ubisoft's unique capacity the long term growth to create great experiences of the videogame markets for both core and casual audiences Long term progression 33