FY15 Earnings presentation
May 12th, 2015
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 compared with the actual results that will be published.
The estimated financial data have been presented to the Board of Directors and have not been audited by the
Statutory Auditors. (Additional information is specified in the most recent Ubisoft Registration Document filed on
June 26, 2014 with the French Financial Markets Authority (l’Autorité des marchés financiers)).
D I S C L A I M E R
Yves Guillemot, President and Chief Executive Officer
Alain Martinez, Chief Financial Officer
Jean-Benoît Roquette, SVP Investor Relations
3
SUMMARY
FY16: Record operating income target
Videogames increasingly the dominant form of Entertainment
Teams’ strong execution on all strategic priorities
- Strong portfolio of entertainment brands
- Systemic open worlds
- Growing communities & engagement
- Digital
Beyond: Financial performance driven by
Ever more engaged communities / High potential live services / Market growth
2 years 100 M€ share buyback program
AGENDA
FY15 performance
FY16 targets
OPEN WORLDS TAKE A BIGGER SHARE
Physical retail sales : NPD, GFK
5
BEST SELLERS
2014 (value)
1
COD : Advanced Warfare
2
FIFA 15
3
GTA V
4
Destiny
5
Watch Dogs
6
AC Unity + Rogue
7
Far Cry 4
8
Super Smash Bros.
9
Madden NFL 15
10
FIFA 14
OPEN WORLDS SHARE
OF TOTAL MARKET
2008
2014
16%
30%
UBISOFT’S STRATEGY HAS DELIVERED HANDSOMELY
Physical retail sales : NPD, GFK
6
BEST SELLERS
2014 (value)
1
COD : Advanced Warfare
2
FIFA 15
3
GTA V
4
Destiny
5
Watch Dogs
6
AC Unity + Rogue
7
Far Cry 4
8
Super Smash Bros.
9
Madden NFL 15
10
FIFA 14
GROWING COMMUNITY
& ENGAGEMENT
Community + 54%
Rewards collection +100%
XBOX ONE & PS4
52% of FY15 revenues
Early move on newgen
+ growing communities
+ growing digital capabilities
+ massive systemic open worlds
FY15
Sales : 1,464 M€ (+42% at cstt FX)
Outstanding new releases :
Assassin’s Creed (U+R) - Watch Dogs - Far Cry 4 - the Crew
> 30 M units collectively
Just Dance
BIGGEST MUSIC VIDEOGAME BRAND EVER
Back-catalog :
233 M€ (flat yoy), 16% total revenues
Assassin’s Creed - Far Cry - Rocksmith - Rayman -
South Park: The Stick of Truth
FY15 PERFORMANCE
FY15
Digital strong momentum :
26% of total rev (vs 19%)
FY14
FY15
FY15 PERFORMANCE
383 M€
195 M€
Full game Digital distribution
Other Digital revenues *
+97%
87
108
269
113
+31%
+149%
*
mostly extra contents for console, PC & mobileFY15 : FINANCIAL SUMMARY
FY15
Record gross margin at 77%
top franchises momentum + digital revenues impact
Record non-IFRS Operating profit : 171 M€
(target of 165 M€)
Record Free Cash flow: 176 M€
Net cash situation: 211 M€
Gross margin up 405 M€, at record 77% level (+5 points yoy)
Strong line-up performance + favorable mix (PS4, XboxOne)
Growing digital footprint
R&D up 148 M€, down 3 points
SG&A up 21 M€, down 10 percentage points
variable marketing expenses marginally up to 206 M€ & down to 14% of sales (204 M€ and 20% in FY14). Positive impacts
from marketing efficiencies + Watchdogs marketing expenses in FY14
fixed structure costs up to 176 M€ and down to 12% of sales (157 M€ and 16% in FY14)
Non-IFRS Income tax rate at 32%.
FY15 : NON-IFRS P&L
10
TO BE UPDATED
€ million, except for per share data
2014-2015
2013-2014
%
%
Sales 1 463,8 1 007,1 Gross profit 1 126,7 77,0 721,8 71,7 R&D expenses (573,5) (39,2) (426,1) (42,3) Selling expenses (284,1) (19,4) (279,3) (27,7) G & A expenses (98,4) (6,7) (82,0) (8,1) SG & A expenses (382,5) (26,1) (361,3) (35,9)Non IFRS Current operating income 170,7 11,7 (65,6) (6,5)
Net Financial Income (4,5) (5,8)
Income Tax (53,5) 22,1
Non IFRS Net Income 112,7 (49,3) Non IFRS Diluted earnings per share 1,00 (0,46)
101 M€ total depreciation increase :
mostly more games
45 M€ increase in Non Capitalized R&D & others
: highlights growing post launch operations & bonuses
11 M€ Capitalized R&D increase :
less than 3% increase
11
FY15 : R&D
€ million
2014-15
2013-14
Depreciation of in-house software-related production 423,8 313,0 Depreciation of external software-related production and licenses 34,1 44,4
Royalties 23,0 21,4
Non Capitalized R&D & others 92,6 47,3
Total R&D depreciation and royalties 573,5 426,1
Capitalized in-house software-related production 389,7 373,8 Capitalized external software-related production and licenses
32,0 37,2
(excluding future commitments)
Royalties 23,0 21,4
Non Capitalized R&D & others 92,6 47,3
IFRS Non-Current expenses and income : (21,7) M€
•
Goodwill and brands depreciation
IFRS Net financial income : 0,7 M€
•
Includes :
5,2 M€ (non-cash) from adjustment of earn-out liabilities
12
FY15 : IFRS / NON-IFRS RECONCILIATION
€ million,
except for per share data
2014-15
2013-14
IFRS Adjustment Non-IFRS IFRS Adjustment Non-IFRS
Sales 1 463,8 1 463,8 1 007,1 1 007,1 Total Operating expenses (1 324,4) 31,3 (1 293,1) (1 105,0) 32,3 (1 072,7)
Stock-based compensation (9,6) 9,6 0,0 (9,7) 9,7 0,0 Non current operating income
and expenses (21,7) 21,7 0,0 (22,6) 22,6 0,0
Operating Income 139,4 31,3 170,7 (97,9) 32,3 (65,6)
Net Financial income 0,7 (5,2) (4,5) 10,3 (16,1) (5,8)
Income tax (53,1) (0,4) (53,5) 22,1 0,0 22,1
Net Income 87,0 25,7 112,7 (65,5) 16,2 (49,3) Diluted earnings per share 0,77 0,23 1,00 (0,61) 0,15 (0,46)
13
Sharp improvement of Cash flows from Operations : +253 M€
Reflection of the strong top and bottom lines performance
Sharp WCR improvement : + 100 M€
No big titles released since early December vs South Park in Q4 FY14
€ million
2014-2015
2013-2014
Opening cash position (12,7) 104,5
Cash flows from operations 173,6 (79,3)
Change in WCR 58,8 (40,8)
Cash flows from operating activities 232,4 (120,1)
Net investment in capital assets (56,1) (42,9)
Net free cash flow 176,3 (163,0)
Net acquisitions/disposals (3,5) (9,7)
Proceeds from issue of capital and other financial flows 18,4 65,7
Disposal of Gameloft Shares 0,0 6,0
Effect of exchange rate fluctuations 32,9 (16,3)
Decrease/(increase) in net debt 224,0 (117,3) Closing cash position 211,3 (12,7)
AGENDA
FY15 performance
FY16 targets
FY16
TARGETS
Sales:
Stable
Non-IFRS Operating Income
: minimum 200 M€
KEY DRIVERS
New releases down yoy
AC Syndicate - R6 Siege – Just Dance - The Division + 1 AAA title
Digital (~30% of total rev) & back catalogue growth
Favorable FX
Higher GM and lower R&D as a % of sales
Negative FCF
Positive gap between cash R&D and P&L R&D
WCR impact from The Division + AAA title in Q4
Assassin’s Creed movie investment
FY16 : TARGETS CONFIRMED
FY11
FY12
FY13
FY14
FY15
FY16e
29
56
100
171
Gross Margin
FY11
FY12
FY13
FY14
FY15e
FY16e
64.8%
67.7%
72.7%
Non-IFRS Op.
Income
(€ million)
2010
2011
2012
2013
2014
2015e
14.5
12.2
15.7
Industry Soft. Sales
excl. Digital (€ billion)
FY11
FY12
FY13
FY14
FY15
FY16e
1 039
1 061
1 256
38
78
148
193
Digital
Sales
(€ million)
1 464
-66
10.8
71.7%
1 007
16
9.5
77%
200e
378
17
FY16 : ASSASSIN’S CREED SYNDICATE
New setting:
Birth of organized crime in London
at the height of the Industrial Revolution
Play Evie and Jacob Frye
Single player only
FY16 : RAINBOW 6 SIEGE
“Rainbow Six
was our favorite game at E3”
PC Gamer, May 14
Community’s positive reception to the Closed Alpha
Deep replayability potential
procedural destruction
+ asymmetrical assault gameplay
+ operators class system
Release
: FY Q3 (Xbox One, PS4 & PC)
Best E3 PC game
Game of the show
Highly anticipated open-world MMO RPG
The Snowdrop engine:
amazing graphics
Release :
FY Q4 (Xbox One, PS4 & PC)
FY16 : THE DIVISION
Most anticipated titles
New
for
FY16
FY15
20
FY16 : DIGITAL LIVE SERVICES
more to be announced
CONSOLE / PC
LIVE SERVICES
Physical retail sales : NPD, GFK
AC THE 5TH
BIGGEST BRAND !
2 OF THE 4
BIGGEST NEW IPS !
*includes hardware
Far Cry – Watch Dogs – The Division – Rainbow 6
strong contenders for Next-Gen top 20
F: Franchise NB: New Brands
Cumulated Retail Sales (Value)
(Xbox360, PS3, Wii, WiiU, Xbox One, PS4 + PC)
2005 - 2014 (10 years)
1 CALL OF DUTY ACTIVISION BLIZZARD F
2 MARIO NINTENDO F
3 FIFA SOCCER EA F
4
GTA
TAKE-TWO
F
5 ASSASSIN'S CREED UBISOFT NB
6 WII FIT* NINTENDO NB
7 MADDEN NFL EA F
8
THE SIMS
EA F9 GUITAR HERO* ACTIVISION NB
10 BATTLEFIELD EA F
11 HALO MICROSOFT F
12 NEED FOR SPEED EA F
13 JUST DANCE UBISOFT NB
14 LEGO WARNER NB
15 NBA 2K TAKE-TWO F
16
Warcraft
ACTIVISION BLIZZARD
F
17 SONIC SEGA F
18 ROCK BAND* EA NB
19
ELDER SCROLL
BETHESDA
F
20 SKYLANDERS ACTIVISION BLIZZARD NB
