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FY19 EARNINGS - ubistatic19-a.akamaihd.net · ecommerce ecosystem pursue the development of...
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FY19 EARNINGS May 15, 2019
This slideshow may contain estimated financial data, information on future projects and
transactions and future financial results/performance. Such forward-looking data are provided for
target 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 were
approved by the Board of Directors on May 15, 2019 and have not been audited by the Statutory
Auditors. (Additional information is specified in the most recent Ubisoft Registration Document filed
on June 6, 2018 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
Frédérick Duguet, Chief Financial Officer
DISCLAIMER
2
3
STRONG EXECUTION OVER THE PAST 3 YEARS
NET BOOKINGS UP 46%
NON-IFRS OPERATING INCOME UP 164%
PROFITABILITY UP 10 PTS
RELEASE OF HIGH QUALITY EXPERIENCES
FAST DIGITAL TRANSFORMATION
SIGNIFICANTLY STRONGER RECURRING REVENUES
OVER THE PAST 3 YEARS
AGENDA
4
U P C O M I N G M A J O R I N D U S T R Y T R A N S F O R M AT I O N
F Y 1 9 P E R F O R M A N C E
B U I L D I N G A S U S TA I N A B L E O R G A N I S AT I O N
F Y 2 0 TA R G E T S
5
5 PILLARS OF LONG-TERM STRATEGY
FULL IP OWNERSHIP&
DIVERSE PORTFOLIO
DEEP RELATION WITHOUR COMMUNITIES
WIDE NETWORK OF STUDIOS
STRONG PRODUCTION CAPACITY
STRONG INTERNAL CULTURE
DEPENDABLE ONLINE SERVICES
& DISTRIBUTION PLATFORM
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LONG-TERM VISIBILITY: FULL IP OWNERSHIP
Yes
Yes
Yes
Yes
Yes
IP OWNERSHIP : UBISOFT & PEERS’ TOP FRANCHISES
Assassin’s Creed
Far Cry
Rainbow Six
Watch Dogs
The Division
Yes
Yes
Yes
Yes
Call of Duty
World of Warcraft
Overwatch
HearthStone
Share profits with
dev.
No
Developed externally
Yes
Grand Theft Auto
Red Dead Redemption
NBA2K
Borderlands
Mafia
No
Yes
No
No
Yes
FIFA
Battlefield
Star Wars Battlefront
Madden
Apex Legends
Share profits with
dev.
Ghost Recon
For Honor
The Crew
Yes
Yes
Yes
YesDiablo
YesCandy Crush YesCivilization YesThe Sims
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SIGNIFICANT SHAREHOLDERS VALUE CREATION
TOTAL SHAREHOLDER RETURN
Since IPO* 5-year 2-year 1-year
UBISOFT +4 272% +498% +82% -3%
Activision Blizzard +4 517% +137% -10% -31%
Take-Two +2 495%** +375% +55% -8%
Electronic Arts +1 233% +176% -2% -24%
NASDAQ +731% +112% +36% +13%
CAC40 Net Return +418% +45% +7% +1,6%
Euro Stoxx Media Supersector Return +160% +46% +8,4% +8%
Source: Bloomberg as of May 5, 2019
*Ubisoft IPO as of July 1, 1996
** Since IPO on April 15, 1997
AGENDA
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U P C O M I N G M A J O R I N D U S T R Y T R A N S F O R M AT I O N
F Y 1 9 P E R F O R M A N C E
B U I L D I N G A S U S TA I N A B L E O R G A N I S AT I O N
F Y 2 0 TA R G E T S
FY18
NET BOOKINGS
1 397 M€, + 39% yoy, 69% of total rev (vs 58% last year)
1 147 M€, + 39% yoy, 57% of total rev (vs 48% last year)
12-MONTHS
2 029 M€, + 17% yoy, (vs target of 2 050 M€)
BACK-CATALOG
DIGITAL REVENUES
PLAYER RECURRING INVESTMENT
644 M€, + 33% yoy, 32% of total rev (vs 28% last year))
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FY19 : RECORD PERFORMANCE IN LINE WITH TARGETS
10
RECORD ENGAGEMENT & PRI
Q4 SELL TROUGH UNITS UP YOY
>1BN € CUMULATED REV LTD
45M PLAYERS, +40%
ESPORTS HOURS WATCHED : +31%
OUSTANDING PLAYER RECEPTIONEXCELLENT NPS
RECORD HIGHS FOR ENGAGEMENT PER PLAYER & SEASON PASS
UPLAY SALES x 10
FY19: >100 MILLION UNIQUE ACTIVE CONSOLE & PC PLAYERS
BEST UNITS SELLING UBISOFT GAME ON CURRENT GEN
STRONG GROWTH
OF THE FRANCHISE
MAUs UP 16% FOR CONSOLES & PC GAMES
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MORE RECURRING, MORE VISIBILITY, LESS HIT-DRIVEN
NET BOOKINGS (M€)
AND BACK-CATALOG (IN % OF NET BOOKINGS)
FROM 12% IN FY10 TO 57% IN FY19
12% 15% 20% 16% 23% 16%25%
45%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
48%
871
1,039 1,061
1,256
1,007
1,4641,394
1,460
1,732
2,029
57%
FY14 FY15 FY16 FY17 FY18 FY19 Physical
Digital Distribution
Player RecurringInvestment**
** Includes ingame items, DLCs/season pass,subscription & advertising
383(26%)*
269
447(47%)*
315
132
729(50%)*
DIGITAL SPLIT(in M€)
425
304
TOTAL NET BOOKINGS SPLIT DIGITAL 69%
31% 37%
32%
522
483
1 397(69%)*
FY19: REMARKABLE DIGITAL TRANSFORMATION
113
12
1 005(58%)* 644
752
10886
195(19%)*
*Digital as % of total net bookings
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FY19: STRONG EXPANSION IN HIGH-POTENTIAL SEGMENTS
* On PC & consoles in FY18
PC UP 79%REPRESENTS 27% OF TOTAL REV
VS 18% LAST YEAR
UPLAY UP 150%
MOBILE UP 73%REACHED 153 M€ 8% OF TOTAL REV
ASIA UP 62%
STRONG APPETITE FOR UBISOFT PREMIUM & FTP GAMES
FY19: DELIVERING ON THE 3-YEAR PLAN
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RECORD NON-IFRS OPERATING INCOME: 446 M€, up 49% vs target of around 440 M€
RECORD NON-IFRS OPERATING MARGIN OF 22%, up 4.7 pts
RECORD FREE CASH FLOW: 310 M€ vs target of around 300 M€
FY19
Gross margin up 265 M€ & 0.9 point: strong net bookings and digital partly compensated by Starlink
R&D up 39 M€ & down 3.7 points
SG&A up 79 M€ & down 0.1 point:
variable marketing expenses: 296 M€ or 14.6% of net bookings (233 M€ & 13.5% in FY18)
fixed structure costs: 257 M€ or 12.7% of net bookings (241 M€ & 13.9% in FY18)
Net Financial income: includes 13 M€ non-cash/non-taxable gain related to the 200 m€ total return swap contract
FY19: NON-IFRS P&L
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€ million, except for per share data 2018-19 2017-18
% %
Sales 1 845,5 NA
Deferred services / other differences between the 2 standards 183,1 NA
Net bookings 2 028,6 1 731,9
Gross profit 1 699,7 83,8 1 435,1 82,9
Non-IFRS R&D expenses (700,4) (34,5) (661,1) (38,2)
Non-IFRS Selling expenses (405,0) (20,0) (335,9) (19,4)
Non-IFRS G & A expenses (148,3) (7,3) (138,0) (8,0)
Non-IFRS SG & A expenses (553,3) (27,3) (473,9) (27,4)
Non IFRS operating income 446,0 22,0 300,1 17,3
Net Financial Income (2,4) (5,7)
Share in profit of associates 0,3 (0,2)
Income Tax (110,4) (73,6)
Non IFRS Net Income 333,5 220,6
Non IFRS Diluted earnings per share 2,80 1,80
Number of shares fully diluted 119 330 122 444
6% increase in total R&D P&L: notably impacted by good costs control on post-launch content
13% increase in capitalized R&D: building significant long term growth opportunities
101 M€ gap between total R&D P&L and total R&D Cash: +42M€ yoy
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FY19: R&D
€ million 2018-19 2017-18
Depreciation of in-house software-related production 466,7 438,1
Depreciation of external software-related production and licenses 20,0 24,1
Royalties 16,2 15,5
Non Capitalized R&D & others* 197,4 183,4
Total R&D P&L 700,4 661,1
Capitalized in-house software-related production 573,9 498,5
Capitalized external software-related production and licenses13,8 22,7
(excluding future commitments)
Royalties 16,2 15,5
Non Capitalized R&D & others* 197,4 183,4
Total R&D Cash 801,3 720,2
*mostly Post-Launch content
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FY19: IFRS / NON-IFRS RECONCILIATION
Stock-based compensation: 55 M€
Non-current operating expenses: 49 M€ related to brand and goodwill depreciation
Net Financial income: 8 M€ non-cash charge related to the 400 M€ convertible loan
Tax rate: 25%, higher than expected due to impact from US tax reform
€ million,
except for per share data
2018-19 2017-18
IFRS Adjustment Non IFRS IFRS Adjustment Non IFRS
Sales 1 845,5 1 845,5 1 731,9 1 731,9
Deferred services / other differences
between the 2 standards183,1 NA
Net bookings 2 028,6 1 731,9 1 731,9
Total Operating expenses (1 686,5) 103,9 (1 582,6) (1 509,6) 77,8 (1 431,8)
Stock-based compensation (54,7) 54,7 0,0 (39,6) 39,6 0
Non-current operating income
and expenses(49,2) 49,2 (0,0) (38,2) 38,2 0
Operating Income 159,0 287,0 446,0 222,3 77,8 300,1
Net Financial income (10,9) 8,4 (2,4) (13,4) 7,7 (5,7)
Share in profit of associates 0,3 0,3 (0,2) (0,2)
Income tax (48,4) (61,9) (110,4) (69,2) (4,4) (73,6)
Net Income 100,0 233,6 333,5 139,5 81,1 220,6
Diluted earnings per share 0,89 1,91 2,80 1,18 0,62 1,80
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85 M€ increase in CF from operations: Non-IFRS Net Income 113 M€ growth compensated by 42 M€ increase
of R&D P&L/Cash gap
85 M€ decrease in WCR
87 M€ of acquisitions and earn-out payment
230 M€ proceeds from issue of capital: 130 M€ related to employee share plan + modified accounting
treatment on 100 M€ deposit invested on total return swap contract (as disclosed in H1)
202 M€ net share acquisition: 3m shares buy-back on November 9
FY19: CASH FLOWS & CLOSING CASH POSITION
€ million 2018-19 2017-18
Opening cash position (548,1) (80,4)
Cash flows from operations 300,0 214,9
Change in WCR 84,7 (45,0)
Cash flows from operating activities 384,7 169,9
Net investment in capital assets (74,4) (59,3)
Net free cash flow 310,3 110,5
Net acquisitions/disposals (86,5) (77,6)
Proceeds from issue of capital and other financial flows 230,2 (52,8)
Net acquisitions/disposals of own shares (201,9) (411,5)
Effect of exchange rate fluctuations 10,8 (27,9)
Equity component (8,6) (8,4)
Decrease/(increase) in net debt 254,3 (467,6)
Closing cash position (293,8) (548,1)
AGENDA
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U P C O M I N G M A J O R I N D U S T R Y T R A N S F O R M AT I O N
F Y 1 9 P E R F O R M A N C E
B U I L D I N G A S U S TA I N A B L E O R G A N I S AT I O N
F Y 2 0 TA R G E T
UPCOMING INDUSTRY MAJOR TRANSFORMATION
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TOTAL ADDRESSABLE MARKET:5 BILLION GAMERS IN THE NEXT 10 YEARS
SILOS BETWEEN PLATFORMS ARE FALLING
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CLOUD GAMING
DEVELOPERS WILL ACCESS
UNLIMITED MACHINE POWER IN THE CLOUD
TO CREATE UNIQUE EXPERIENCES
STREAMING
HIGH QUALITY BIG SCREEN EXPERIENCES
AT LOWER ENTRY COST TO A BROADER POPULATION
SEAMLESS MULTISCREEN GAMING TO LEVERAGE
MOBILE GLOBAL REACH
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ASIA
HUGE GROWING MARKET
UBISOFT GAMES & LIVE SERVICES HAVE BEEN REACHING A WIDER AUDIENCE
(CHINA, JAPAN, KOREA…)
STRONGER PC OFFERING + UPCOMING ADAPTATION OF UBISOFT FRANCHISES ON MOBILE
SILOS BETWEEN GEOGRAPHIES ARE FALLING
ACCELERATION OF OUR INVESTMENTS TO SEIZE MAJOR OPPORTUNITIES
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RAMP UP OUR CAPABILITIES FOR THEUPCOMING GENERATION OF CONSOLES
ENTER INTO NEW GAMING GENRES,SEGMENTS & BUSINESS MODELS,
CREATE NEW IPs & NEW EXPERIENCES
BRING OUR ESTABLISHED PC & CONSOLES FRANCHISES TO MOBILE &
TO A MUCH WIDER AUDIENCE
CAPTURE THE STREAMING &
CLOUD GAMING OPPORTUNITIES
PURSUE THE DEVELOPMENT OF OUR UPLAY PLATFORM
& ECOMMERCE ECOSYSTEM
PURSUE THE DEVELOPMENT OFARTIFICIAL INTELLIGENCE SOLUTIONS
DRIVE AUDIENCE & ENGAGEMENT THROUGH BIGGER GAMES & POST LAUNCH CONTENT
AGENDA
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U P C O M I N G M A J O R T R A N S F O R M AT I O N I N T H E I N D U S T R Y
F Y 1 9 P E R F O R M A N C E
B U I L D I N G A S U S TA I N A B L E O R G A N I S AT I O N
F Y 2 0 TA R G E T
DIGITAL: >70% of net bookings
PRI: in absolute value → solid increase
as a % of net bookings > FY19
BACK-CATALOG: ~50% of net bookings
NET BOOKINGS: ~2 185 M€ / Q1 NET BOOKINGS: ~270 M€
NON-IFRS OPERATING INCOME: ~480 M€
FY20 : 8% NET BOOKINGS & OPERATING INCOME GROWTH
.
.
NEW RELEASES: strong growth with 4 new AAA titles
+ 3 unannounced titles (fiscal Q4)
FY20
25
(October 4th)
THANK YOU !