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H1 FY17 EARNINGS November 3, 2016 Yves Guillemot, President and - PowerPoint PPT Presentation

H1 FY17 EARNINGS November 3, 2016 Yves Guillemot, President and Chief Executive Officer Alain Martinez, Chief Financial Officer Jean-Benot Roquette, SVP Investor Relations D I S C L A I M E R This statement may contain estimated financial


  1. H1 FY17 EARNINGS November 3, 2016

  2. 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 July 22, 2016 with the French Financial Markets Authority ( l’Autorité des marchés financiers)).

  3. KEY TAKEAWAYS BUILDING AN INCREASINGLY RECURRING DEPENDABLE BUSINESS Expanding & strengthening portfolio of owned franchises Growing digital revenues that boost profitability STRONG ENGAGEMENT & PLAYER RECURRING INVESTMENT METRICS BETTER PROFITABILITY PROFILE 3

  4. AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N DA B L E B U S I N E S S A N N UA L G E N E R A L M E E T I N G H 1 F Y 1 7 P E R F O R M A N C E P E R S P E C T I V E S O N Q 3 A N D F Y 1 7 F Y 1 9 4

  5. INTERNALLY CREATED OWNED BRANDS STRONG VISIBILITY ON THE FUTURE OF OUR FRANCHISES * * * * 5 *co-created or externally created

  6. MULTI-STUDIOS ORGANIZATION UNRIVALLED CAPACITY TO RELEASE OPEN-WORLD GAMES ON A REGULAR BASIS *FY15 for ATVI & Warner 6 6

  7. LIVE EXPERIENCES ENGAGING THE PLAYER OVER THE LONGTERM 7 7

  8. LIVE EXPERIENCES >10 MILLION UNIQUE REGISTERED USERS EACH UBISOFT TOTAL MAUs UP 44% YOY 8

  9. LIVE EXPERIENCES PRO LEAGUE SEASON 3 RAINBOW SIX SIEGE: UNIQUE VIEWERS UP 130% VS PRIOR SEASON 9

  10. DISCIPLINED & WELL TARGETED ACQUISITIONS ADDING TO THE GROUP BRICKS OF RECURRING REVENUES EXPERTISE 10

  11. H1 REFLECTS THIS STRATEGY’S BENEFITS UPDATES DRIVE ENGAGEMENT HIGHER 100% 80% 60% 40% 20% 0% 11

  12. H1 REFLECTS THIS STRATEGY’S BENEFITS TOM CLANCY’S RAINBOW SIX SIEGE PRAISED BY ITS FANS AND BY THE PRESS 12

  13. H1 REFLECTS THIS STRATEGY’S BENEFITS ENGAGEMENT UP 51% WITH 1.4 UPDATE 13

  14. AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N DA B L E B U S I N E S S A N N UA L G E N E R A L M E E T I N G H 1 F Y 1 7 P E R F O R M A N C E H 1 F Y 1 7 P E R F O R M A N C E P E R S P E C T I V E S O N Q 3 A N D F Y 1 7 F Y 1 9 14

  15. ANNUAL GENERAL MEETING - SEPTEMBER 29, 2016 MASSIVE SUPPORT FROM OUR SHAREHOLDERS 15

  16. AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N DA B L E B U S I N E S S A N N UA L G E N E R A L M E E T I N G H 1 F Y 1 7 P E R F O R M A N C E P E R S P E C T I V E S O N Q 3 A N D F Y 1 7 F Y 1 9 16

  17. H1 FY17 PERFORMANCE A MORE RECURRING PROFILE H 1 S A L E S : 281 M € , up 36% yoy Q2 Sales : 142 M € , beating target of 100 M € D I G I TA L M O M E N T U M C O N T I N U E S : H1 FY17 202 M € , + 102%, 72% of total revenues Recurring Player Investment up 132%, at 95 M € V E RY S O L I D B A C K - C ATA LO G : 256 M € , + 46% 17

  18. H1 FY17 PERFORMANCE A MORE PROFITABLE PROFILE 74 M € increase in Topline :  4 6 M € N O N - I F R S O P E R AT I N G I N C O M E I N C R E A S E 6 points gross margin improvement H1 FY17 Solid costs control N E T C A S H : 38 M € vs (156) M € in H1 FY16 18

  19. H1 FY17: NON-IFRS P&L € million, except for per share data H1 2016-17 H1 2015-16 % % 281,4 207,3 Sales 226,4 80,5 154,3 74,4 Gross profit (123,8) (44,0) (99,5) (48,0) Non-IFRS R&D expenses (113,4) (40,3) (111,1) (53,6) Non-IFRS Selling expenses (51,0) (18,1) (51,5) (24,9) Non-IFRS G & A expenses Non-IFRS SG & A expenses (164,4) (58,4) (162,6) (78,4) (61,8) (22,0) (107,8) (52,0) Non IFRS Current operating income (1,6) (5,9) Net Financial Income 27,4 48,1 Income Tax (35,9) (65,6) Non IFRS Net Income (0,30) (0,57) Non IFRS Diluted earnings per share 118 724 115 898 Nbr of shares fully diluted  Gross margin up 72 M € , up 6 percentage point to 80%  Positive Digital impact  R&D up 24 M € : releases of The Division & Far Cry Primal end of FY16 and development of Live operations  SG&A slightly up 2 M € despite 74 M € topline growth : good costs control  variable marketing expenses stable at 72 M € (72 M € in H1 FY16)  fixed structure costs slightly up to 93 M € (90 M € in H1 FY16) 19

  20. H1 FY17: R&D € million H1 2016-17 H1 2015-16 72,1 55,3 Depreciation of in-house software-related production 7,2 8,9 Depreciation of external software-related production and licenses 2,8 6,4 Royalties 41,7 29,0 Non Capitalized R&D & others 123,8 99,5 Total R&D depreciation and royalties 231,0 222,2 Capitalized in-house software-related production Capitalized external software-related production and licenses 11,2 13,1 (excluding future commitments) 2,8 6,4 Royalties 41,7 29,0 Non Capitalized R&D & others 286,7 270,6 Total development investment  15 M € total depreciation increase : releases of The Division & Far Cry Primal end of FY16  13 M € increase in Non Capitalized R&D & others : development of Live operations  7 M € Capitalized R&D increase 20

  21. H1 FY17: IFRS / NON-IFRS RECONCILIATION H1 2016-17 H1 2015-16 € million, except for per share data IFRS Adjustment Non IFRS IFRS Adjustment Non IFRS 281,4 281,4 207,3 207,3 Sales (371,7) 28,5 (343,2) (324,7) 9,5 (315,2) Total Operating expenses (24,9) 24,9 0,0 (6,0) 6,0 0,0 Stock-based compensation Non-current operating income (3,6) 3,6 0,0 (3,5) 3,5 0,0 and expenses (90,3) 28,5 (61,8) (117,4) 9,5 (107,8) Operating Income (3,9) 2,3 (1,6) (5,9) 0,0 (5,9) Net Financial income 28,1 ( 0,7) 27,4 48,1 0,0 48,1 Income tax (66,1) 30,2 (35,9) (75,2) 9,5 (65,6) Net Income (0,56) 0,25 (0,30) (0,65) 0,08 (0,57) Diluted earnings per share  Stock-based compensation : increase mostly related to recent employee plan  Non-current operating expenses : 3.5 M € related to brand depreciation  Net Financial income : 2.3 M € related to earn-out payments 21

  22. H1 FY17: CASH FLOWS & CLOSING CASH POSITION € million H1 2016-17 H1 2015-16 Opening cash position (41,7) 211,3 Non-IFRS Cash flows from operations (180,2) (208,8) Non-IFRS Change in WCR 189,4 (125,9) Cash flows from Non-IFRS operating activities 9,2 (334,7) Net investment in capital assets (27,0) ( 24,2) Net free cash flow (17,7) (358,9) Net acquisitions/disposals 0,0 (0,0) Proceeds from issue of capital and other financial flows 5,2 16,8 Net acquisitions/disposals of own shares 54,1 (18,5) Equity component 39,6 - Effect of exchange rate fluctuations (1,8) (6,1) 79,4 Decrease/(increase) in net debt (366,8) Closing cash position 37,7 (155,5)  29 M € increase in CF from Operation  315 M € improvement in WCR : Releases of FarCry Primal and The Division in FY16 Q4  54 M € net proceeds from employee shares plan  40 M € OCEANE : the IFRS equity element that will be expensed over 5 years as financial charge 22

  23. AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N DA B L E B U S I N E S S A N N UA L G E N E R A L M E E T I N G H 1 F Y 1 7 P E R F O R M A N C E P E R S P E C T I V E S O N Q 3 A N D F Y 1 7 F Y 1 9 23

  24. FY17 TARGETS ADJUSTED: IMPROVED PROFITABILTY S A L E S : between 1 610 and 1 670 M € versus 1700 M € prev . Digital: ~ 40% of total revenues Back Catalog: ~ 35% FY17 N O N - I F R S O P E R AT I N G I N C O M E : between 230 and 250 M € versus 230M € prev. N O N - I F R S O P E R AT I N G M A R G I N : between 14,3% and 15% versus 13,5% prev. Q3 S A L E S : 560 M € , stable yoy 24

  25. H2 FY17: LINE-UP • EXPANSIONS 25

  26. H2 FY17: LINE-UP FY16 FY17 WATCH DOGS 2 ASSASSIN’S CREED SYNDICATE STEEP RAINBOW SIX SIEGE JUST DANCE 2017 JUST DANCE 2016 Q3 + Expansion The Crew Wild Run + Assassin’s Creed Movie + Expansions The Division Survival Rainbow 6 Siege Operation Red Crow The Crew Calling all Units FAR CRY PRIMAL FOR HONOR SOUTH PARK THE FRACTURED BUT WHOLE THE DIVISION Q4 GHOST RECON WILDLANDS + Expansion The Division Last Stand 26

  27. AGENDA A N I N C R E A S I N G LY R E C U R R I N G A N D D E P E N DA B L E B U S I N E S S A N N UA L G E N E R A L M E E T I N G H 1 F Y 1 7 P E R F O R M A N C E P E R S P E C T I V E S O N Q 3 A N D F Y 1 7 F Y 1 9 27

  28. 3 YEARS PLAN: ON TRACK R E V E N U E S : 2.2BN € N O N - I F R S O P E R AT I N G I N C O M E : 20% FY19 F R E E C A S H F LOW : ~ 300M € 28

  29. APPENDICES

  30. 20 YEARS OF STRONG VALUE CREATION TOTAL SHAREHOLDER RETURN SINCE IPO (rebased to 100) Since IPO 5-year 3-year 2-year 1-year UBISOFT +1,527% +610% +227% +115% +14% NASDAQ* +333% * +106% +37% +15% +4% CAC40 Net Return +246% +58% +13% +12% (5%) Euro Stoxx Media Supersector Return +87% +86% +19% +12% (9%) Source: FactSet as of May 9, 2016 IPO as of July 1, 1996 Source: FactSet as of October 31, 2016 IPO as of July 1, 1996 * Excludes dividends 30

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