H1 FY15 Earnings presentation October 30th, 2014 Yves Guillemot, - PowerPoint PPT Presentation

H1 FY15 Earnings presentation October 30th, 2014

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 H1: Ubisoft’s strategy delivers - Stronger sales than expected = Watch Dogs (9Mu), Digital and Back Catalog - Record gross margin, better than expected operating income & cash flows Q3: Great momentum with 4 major releases FY15 & FY16: Targets confirmed - FY15: sales ≥ 1 400 M € & non-IFRS operating income ≥ 150M € - FY16: non-IFRS operating income ≥ 200 M € - 200 M € of FCF over the 2 years (or net cash situation ~ 200 M € by March 16) Short-Medium-Long Term: Ubisoft ready to generate significant value for its shareholders 3

AGENDA H1 Q3 & FY15 FY16 4

H1 FY15 : SALES OUTPERFORMANCE H1 Sales : 484 M € , +68% at cstt exchange rates Q2 sales: 124 M € , beating target of 85 M € Watch Dogs continued success: > 9 Mu > 10 Mu expected in FY15 H1 Digital strong momentum : 135 M € , +90% 28% of total sales FY15 Driven by digital distribution, mobile, sale of items & DLCs Mobile up 6x, already 45% higher than full FY14 Back-catalog : 114 M € , +1% AC 4, South Park, Far Cry 3 & Rayman Legends 5

H1 FY15 : WATCH DOGS creation of a major franchise 9 Mu already sold in. On track to >10 Mu in FY15 Builds on Ubisoft’s strengths : IP creation - open world - massive production values Xbox One, PS4, PS3, Xbox 360, PC, Wii U 6

H1 FY15 : EARNINGS OUTPERFORMANCE Record gross margin at 78% (up 9 pts) Supported by Watch Dogs success, favorable mix (PS4/Xbox One/PC) + growing digital revenues H1 Non-IFRS Operating profit : 24 M € vs loss expected FY15 Positive impact from rev, gross margin & lower than anticipated expenses A 122 M € improvement yoy Free Cash flow: (47,6) M € A 229 M € improvement yoy H1 outperfomance demonstrates Ubisoft is now ready to generate significant value for its shareholders 7

H1 FY15 : NON-IFRS P&L € million, except for per share data H1 2014-2015 H1 2013-2014 % % Sales 484,2 293,3 Gross profit 378,1 78,1 202,2 68,9 R&D expenses (181,2) (37,4) (138,9) (47,4) Selling expenses (127,2) (26,3) (123,5) (42,1) G & A expenses (45,6) (9,4) (37,8) (12,9) SG & A expenses (172,8) (35,7) (161,3) (55,0) Non-IFRS operating income 24,2 5,0 (98,0) (33,4) Net Financial Income (2,5) (2,4) Income Tax (4,6) 38,2 Non-IFRS Net Income 17,1 (62,1) Non-IFRS Diluted EPS 0,15 (0,59) Nbr of shares fully diluted (000) 112 931 104 508  Gross margin up 176 M € , at record 78% level (+9 points yoy)  Strong performance of Watch Dogs + favorable mix (PS4, XboxOne, PC)  Growing digital footprint  R&D up 42 M € but down 10 percentage points  SG&A up 12 M € , down 19 percentage points  variable marketing expenses marginally up at 92 M € or 19% of sales (88 M € and 30% in H1 FY14). Some Watch Dogs expenses incurred in FY14 fixed structure costs up at 81 M € or 17% of sales (73 M € and 25% in H1 FY14)  8  Non-IFRS Income tax rate at 21%. 32% rate expected for the full year

H1 FY15 : R&D € million H1 2014-15 H1 2013-14 138,8 107,8 Depreciation of in-house software-related production 2,5 6,2 Depreciation of external software-related production and licenses Royalties 6,8 9,7 Non Capitalized R&D & others 33,1 15,2 Total R&D depreciation and royalties 181,2 138,9 Capitalized in-house software-related production 195,2 189,8 Capitalized external software-related production and licenses 14,9 18,7 (excluding future commitments) Royalties 6,8 9,7 Non Capitalized R&D & others 33,1 15,2 Total development investment 250,0 233,3  27 M € total depreciation increase : release of Watch Dogs  18 M € increase in Non Capitalized R&D & others : live operations of FTP PC & mobile, post launch, higher bonuses, accounting of in-between projects  1% increase in capitalized R&D 9

H1 FY15 : IFRS / NON-IFRS RECONCILIATION H1 2014-15 H1 2013-14 € million, except for per share data IFRS Adjustment Non-IFRS IFRS Adjustment Non-IFRS Sales 484,2 484,2 293,3 293,3 -470,6 10,6 -460,0 -407,3 16,0 -391,3 Total Operating expenses Stock-based compensation -5,0 5,0 0,0 -4,3 4,3 0,0 Non-current expenses and -5,7 5,7 0,0 -11,7 11,7 0,0 income Other operating income and 0,0 0,0 0,0 0,0 0,0 expenses Operating Income 13,5 10,6 24,2 -114,0 16,0 -98,0 Net Financial income 2,7 -5,3 -3,0 13,4 -15,8 -2,4 Income tax -4,6 0,0 4,6 38,2 0,0 38,2 Net Income 11,7 5,4 17,1 -62,3 0,2 -62,1 Diluted earnings per share 0,10 0,05 0,15 -0,60 0,00 -0,59 IFRS Non-Current expenses and income : (5.7) M € • Goodwill depreciation IFRS Net financial income : 2.7 M € • Includes : 5,3 M € (non-cash) from adjustment of earn-out liabilities 10

H1 FY15 : CASH FLOWS & CLOSING CASH POSITION € million H1 2014-15 H1 2013-14 Opening cash position (12,7) 104,5 Cash flows from operations (37,5) (144,8) Change in WCR 17,9 (115,9) Cash flows from operating activities (19,5) (260,7) Net investment in capital assets (28,1) ( 16,3) Net free cash flow (47,6) (276,9) Net acquisitions/disposals (2,3) (3,0) Proceeds from issue of capital and other financial flows 7,5 36,3 Disposal of Gameloft Shares 0,0 6,0 Effect of exchange rate fluctuations 14,9 (8,7) Decrease/(increase) in net debt (27,6) (246,3) Closing cash position (40,3) (141,8)  Sharp improvement of Cash flows from Operations :  Reflection of the strong top and bottom lines performance  Sharp WCR improvement : More favorable starting basis for Account Receivables, plus early launch of Watch Dogs, versus late launch of JD 2014, Splinter Cell and Rayman Legends last year 11

AGENDA H1 Q3 & FY15 FY16 12

FY15 : DRIVEN BY CORE & DIGITAL STRONG GROWTH FY Sales : minimum 1 400 M € , up 39% Gross margin : up 3 to 4 points Marketing expenses down in % : < 18% of total sales FY15 Non-IFRS Operating Income : minimum 150 M € Positive Free Cash Flows Q3 Sales : 730 M € , up 40% 13

Q3 : ASSASSIN’S CREED UNITY & ROGUE two strong offerings for new and last gen PS4 PS3 Xbox One Xbox 360 PC PC (early 2015) The most beautiful game ever created by Ubisoft Great story telling - Play as a Templar New state of the art engine: fully new gen Return of the acclaimed naval gameplay New innovations, co-op, customization abilities Release : November 11 Release : November 11 14 14

Q3 : FAR CRY 4 the return of the Anecdote Factory FC4’s systemic open world rated * significantly > FC3’s Best of E3 Doubled FC3’s search & website traffic & Youtube views Release : November 18 (PS4, Xbox One, PC, 360, PS3) Best E3 Shooter 15 * Ubisoft internal playtests

Q3 : THE CREW designed to be the “World of Warcraft” of driving games A seamless single, coop and multiplayer experience A major step forward for the racing genre Best E3 Racing game Release : December 2 (PS4, Xbox One, PC, Xbox 360) 16

Q3 : JUST DANCE 2015 & JUST DANCE NOW constant flow of innovation Downloaded ~ 6 million times: Brazil & the Philippines among top 5 countries Best songs of the years (downloads) Smartphones as a controller, no need for Kinect Local adaptation: or PS move “ India Waale ” from Bollywood blockbuster of the year 17

FY15 : DIGITAL REVENUES significant growth expected DIGITAL DISTRIBUTION PC FREE-TO-PLAY … MOBILE FREE-TO-PLAY CONSOLES & PC DLC/ITEMS CONSOLES & PC DIGITAL 18

AGENDA H1 Q3 & FY15 FY16 19

FY16 : TARGETS CONFIRMED TARGETS Non-IFRS Operating Income : minimum 200 M € Positive Free Cash Flows KEY DRIVERS Built on a mix of topline, gross margins and operating margins strengths FY16 Resurgent growth of the market in calendar 2015 Very strong line-up Another improvement in gross margin Significant growth of high margins back-catalog revenues Further improvement of the profitability of FTP business Positive effects of improved efficiency in marketing spending 20

FY16 : THE DIVISION buzz and players’ anticipation at high levels “ It was a pretty outstanding demo ” A persistent online open-world RPG shooter IGN, June 2014 The Snowdrop engine : amazing graphics “The Division vs Destiny” Release : 2015 (Xbox One, PS4 & PC) Gamespot, October 2014 21

FY16 : RAINBOW 6 SIEGE a cult franchise is back ! Very strong reaction from die-hard shooters fans Solo campaign to broaden the audience Best E3 PC game “Rainbow Six was our favorite game at E3” Release : 2015 (Xbox One, PS4 & PC) PC Gamer, May 14 Game of the show 22

APPENDICES