FY15 Earnings presentation May 12th, 2015 Yves Guillemot, President - PowerPoint PPT Presentation

FY15 Earnings presentation May 12th, 2015

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. 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)). 2

SUMMARY Players at the heart of our games and brands success Teams’ strong execution on all strategic priorities - Strong portfolio of entertainment brands - Systemic open worlds - Growing communities & engagement - Digital FY16: Record operating income target Beyond: Financial performance driven by Ever more engaged communities / High potential live services / Market growth 2 years 100 M € share buyback program Videogames increasingly the dominant form of Entertainment 3

AGENDA FY15 performance FY16 targets 4

OPEN WORLDS TAKE A BIGGER SHARE BEST SELLERS 2014 (value) 1 COD : Advanced Warfare 2 FIFA 15 3 GTA V OPEN WORLDS SHARE 4 Destiny OF TOTAL MARKET 5 Watch Dogs 2008 2014 6 AC Unity + Rogue 16% 30% 7 Far Cry 4 8 Super Smash Bros. 9 Madden NFL 15 10 FIFA 14 Players ’ growing appetite for Freedom 5 Physical retail sales : NPD, GFK

UBISOFT’S STRATEGY HAS DELIVERED HANDSOMELY BEST SELLERS 2014 (value) 1 COD : Advanced Warfare GROWING COMMUNITY 2 FIFA 15 & ENGAGEMENT 3 GTA V 4 Destiny Community + 54% 5 Watch Dogs Rewards collection +100% 6 AC Unity + Rogue 7 Far Cry 4 8 Super Smash Bros. XBOX ONE & PS4 9 Madden NFL 15 52% of FY15 revenues 10 FIFA 14 Physical retail sales : NPD, GFK Early move on newgen + growing communities + growing digital capabilities + massive systemic open worlds 6

FY15 PERFORMANCE 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 FY15 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 7

FY15 PERFORMANCE Digital strong momentum : 26% of total rev (vs 19%) +97% 383 M € 113 +31% Other Digital revenues * Full game Digital distribution FY15 195 M € 87 269 +149% 108 FY14 FY15 * mostly extra contents for console, PC & mobile 8

FY15 : FINANCIAL SUMMARY Record gross margin at 77% top franchises momentum + digital revenues impact FY15 Record non-IFRS Operating profit : 171 M € (target of 165 M € ) Record Free Cash flow: 176 M € Net cash situation: 211 M € 9

FY15 : NON-IFRS P&L € 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) TO BE UPDATED 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) 22,1 112,7 (49,3) Non IFRS Net Income 1,00 (0,46) Non IFRS Diluted earnings per share Nbr of shares fully diluted 113,3 107,3  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) 10  Non-IFRS Income tax rate at 32%.

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 Total development investment 537,3 479,7  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 : IFRS / NON-IFRS RECONCILIATION 2014-15 2013-14 € million, except for per share data IFRS Adjustment Non-IFRS IFRS Adjustment Non-IFRS Sales 1 463,8 1 463,8 1 007,1 1 007,1 (1 324,4) 31,3 (1 293,1) (1 105,0) 32,3 (1 072,7) Total Operating expenses Stock-based compensation (9,6) 9,6 0,0 (9,7) 9,7 0,0 Non current operating income (21,7) 21,7 0,0 (22,6) 22,6 0,0 and expenses 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) 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 : CASH FLOWS & CLOSING CASH POSITION € 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)  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 13

AGENDA FY15 performance FY16 targets 14

FY16 : TARGETS CONFIRMED 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 FY16 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 15

UBISOFT FINANCIAL PERFORMANCE Industry Soft. Sales Sales ( € million) 1 464 excl. Digital ( € billion) 15.7 14.5 1 256 1 007 12.2 1 061 1 039 10.8 9.5 378 193 148 78 38 FY11 FY12 FY13 FY14 FY15 FY16e 2010 2011 2012 2013 2014 2015e Digital 200e Non-IFRS Op. Gross Margin 171 Income ( € million) 77% 72.7% 71.7% 67.7% 64.8% 100 56 29 FY11 FY12 FY13 FY14 FY15 FY16e -66 FY11 FY12 FY13 FY14 FY15e FY16e 16

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 Release: October 23 rd (Xbox One & PS4) / Fall 2015 (PC) 17

FY16 : RAINBOW 6 SIEGE Community’s positive reception to the Closed Alpha Deep replayability potential procedural destruction + asymmetrical assault gameplay Best E3 PC game “Rainbow Six + operators class system was our favorite game at E3” PC Gamer, May 14 Game of the show 18 Release : FY Q3 (Xbox One, PS4 & PC)

FY16 : THE DIVISION Highly anticipated open-world MMO RPG The Snowdrop engine: amazing graphics Most anticipated titles Release : FY Q4 (Xbox One, PS4 & PC) 19

FY16 : DIGITAL LIVE SERVICES LIVE SERVICES CONSOLE / PC MOBILE FY15 New for FY16 more to be announced 20

APPENDICES