INVESTOR DAY February 18 th 2016
DISCLAIMER 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 2, 2015 with the French Financial Markets Authority (l Autorité des marchés financiers)).
A G E N D A INTRODUCTORY REMARKS YVES GUILLEMOT PRESIDENT & CEO HOW WE CAN REACH A WIDER AUDIENCE JOHN PARKES MANAGING DIRECTOR FRANCE DRIVING ENGAGEMENT WITH LIVE & CONTENT ACTIVITIES ANNE BLONDEL VP LIVE OPERATIONS MEDIUM TERM PLAN ALAIN MARTINEZ CHIEF FINANCIAL OFFICER 3
INTRODUCTORY REMARKS Yves Guillemot, PRESIDENT & CEO 4
THE CREATION OF ORIGINAL IPS AT THE HEART OF OUR SUCCESS 5
SIGNIFICANT TOPLINE & PROFIT GROWTH AHEAD REVENUES: 2.2BN, +60% FY19 NON-IFRS OPERATING INCOME MARGIN: 20% X~3 in absolute value FREE CASH FLOW: ~300M 6
A TRANSFORMING INDUSTRY: MORE DEPENDABLE BEFORE NOW HIT DRIVEN & CYCLICAL MORE RECURRING & DEPENDABLE FIRE & FORGET LOW ENGAGEMENT GAMES SHORT LIFE CYCLE NO DIRECT RELATION TO GAMERS LOW BARRIERS TO ENTRY FRAGMENTED MARKET YEAR ROUND & MULTI-YEAR SERVICE HIGH ENGAGEMENT GAMES LONG LIFE CYCLE CONSTANT & DIRECT RELATION WITH PLAYERS VERY HIGH BARRIERS TO ENTRY FEW BIG COMPETITORS 7
A TRANSFORMING INDUSTRY: MORE RECURRING & PROFITABLE RECIPE FOR 30% PROFITABILITY? BIGGER HITS & DIGITAL REVENUES WE ARE EMBRACING THAT PATH 8
BIGGER HITS = A WIDER AUDIENCE STRONG EXECUTION ON BUILDING THE BEST STABLE OF FRANCHISES MULTI CENTRIC THANKS TO SUPER EFFICIENT & PRODUCTIVE STUDIOS 9
DIGITAL REVENUES = GROWING ENGAGEMENT KEY DRIVER TO GREAT ENGAGEMENT 1. MORE STRONG MULTIPLAYER TITLES MULTI CENTRIC FY17 NEW AAA IP 10
DIGITAL REVENUES = GROWING ENGAGEMENT KEY DRIVER TO GREAT ENGAGEMENT 2. YEAR ROUND, MULTI-YEAR LIVE CONTENT & SERVICES 11
RAISE THE AWARENESS OF OUR FRANCHISES ATTRACT MILLIONS OF NEW PLAYERS AT LOW COSTS PER ACQUISITION MOVIES TV SERIES THEME PARKS CONSUMER PRODUCTS 12
AN AGILE & LONG-TERM APPROACH 13
AN UNBIASED APPROACH XXX ASSASSIN S CREED TOM CLANCY S SPLINTER CELL TOM CLANCY S GHOST RECON RABBIDS THE MOVIE WATCH DOGS RABBIDS TV SHOW SELECTING THE BEST PARTNERS TO MAXIMIZE OUR FRANCHISES POTENTIAL 14
WHAT IS AT STAKE? OUR CAPACITY TO MANAGE UBISOFT IN AN AGILE, LONG-TERM & UNBIASED WAY TO GENERATE THE BEST RETURN FOR OUR SHAREHOLDERS 15
H O W W E C A N R E A C H A W I D E R A U D I E N C E John Parkes, MANAGING DIRECTOR FRANCE 16
REACHING A WIDER AUDIENCE 17
30 YEARS EXPERIENCE REACHING A WIDER AUDIENCE TALENT & PASSION CONTINUOUS INNOVATION GREAT EXECUTION LONG-TERM APPROACH 18
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 19
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 20
CREATING BLOCKBUSTER NEW IPS IS IN OUR DNA BIGGEST NEW IP LAUNCHES EVER 1 2 3 Source: NPD, GFK Chart Track 21
THE DIVISION: A MAJOR CREATION RPG SHOOTER S I N G L E P L AY E R + SEAMLESS MP/COOP OPEN WORLD 22
THE DIVISION: A MAJOR CREATION 66 AWARDS 225M VIDEO VIEWS Every bit as engaging as I had hoped We see The Division as the biggest release for us in the first half of the year, and quite possibly for the whole 12 months. If it s updated regularly I don t see why it won t become one of our evergreen franchises (like GTA Online or Destiny.) Redefining what a typical RPG looks like 23
THE DIVISION: A MAJOR CREATION 24
THE DIVISION: A MAJOR CREATION HUGE REACH STRONG DIGITAL LIVE SERVICES A MEANINGFUL CONTRIBUTOR TO OUR LONG TERM 25
FOR HONOR: A GREAT LIVE SERVICES NEW CREATION SOLO & MULTIPLAYER LONG TAIL HEAVY PLAYER ENGAGEMENT COMPETITIVE 26
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 27
A PROVEN TRACK RECORD OF WIDENING THE AUDIENCE # [PLAYERS X3 ] FarCry number Number of Players Players FAR CRY 2 FAR CRY 3 FAR CRY 4 28
BRINGING RAINBOW 6 TO A WIDER AUDIENCE STRONG MP REPUTATION ON TRACK FOR RECORD FRANCHISE AUDIENCE 29
BRINGING RAINBOW 6 TO A WIDER AUDIENCE # DAILY STREAMS POST LAUNCH 30
BRINGING RAINBOW 6 TO A WIDER AUDIENCE 31
BRINGING GHOST RECON TO A WIDER AUDIENCE MILITARY SHOOTER 4 PLAYER CO-OP / SOLO MASSIVE OPEN WORLD 32
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 33
EXPANDING SUCCESSFUL FRANCHISES THE BIGGEST SEGMENTS* MULTIPLAYER CENTRIC OPEN WORLDS 3 YEARS AGO NOW & TOMORROW ASSASSIN S CREED FAR CRY RAINBOW SIX FOR HONOR GHOST RECON THE CREW THE DIVISION ASSASSIN S CREED WATCH DOGS THE DIVISION GHOST RECON THE CREW ACTION ADVENTURE RPG SHOOTER *excluding Sports ASSASSIN S CREED FAR CRY ASSASSIN S CREED WATCH DOGS SOUTH PARK THE DIVISION FAR CRY GHOST RECON RAINBOW SIX 34
AC KEEPS ENTERTAINEMENT BLOCKBUSTER STATUS IN 2015 ACTIVE PLAYERS: 28M AC UNIQUE PLAYERS IN 2015 +7% VS 2014 VIDEOS: 738M VIDEO VIEWS WORLDWIDE ON THE BRAND (+ 5% VS 2014) 35
REACHING A WIDER AUDIENCE CONTINUOUS INNOVATION UNIVERSAL APPEAL IMMEDIATE FUN MEANINGFUL EXPERIENCES YEAR-ROUND ENGAGEMENT 36
REACHING A WIDER AUDIENCE 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 37
MOVIE & TV BROADENING THROUGH WIDER ENTERTAINMENT ASSASSIN S CREED TOM CLANCY S SPLINTER CELL TOM CLANCY S GHOST RECON RABBIDS THE MOVIE WATCH DOGS RABBIDS TV SHOW CONSUMER PRODUCTS THEME PARKS 38
BROADENING THROUGH WIDER ENTERTAINMENT DEC 21, 2016 65M UNIQUE VIEWERS* * Have seen at least 1 episode 39
H O W W E C A N R E A C H A W I D E R A U D I E N C E 1. CREATING NEW FRANCHISES IN NEW SEGMENTS 2. WIDENING RAINBOW SIX & GHOST RECON REACH 3. EXPANDING SUCCESSFUL FRANCHISES 4. BROADENING THROUGH WIDER ENTERTAINMENT 40
DRIVING ENGAGEMENT WITH LIVE CONTENT & ACTIVITIES Anne Blondel-Jouin, VP LIVE OPERATIONS 41
DRIVING ENGAGEMENT WITH LIVE CONTENT & ACTIVITIES THE SUMMARY 1. FROM A TRADITIONAL APPROACH TO A LIVE DIMENSION 2. FOCUSING THE COMPANY ON LIVE! 3. WHAT WE HAVE ACHIEVED SO FAR 4. IT S ONLY THE BEGINNING 42
1. FROM A TRADITIONAL APPROACH MOVING FROM ONE TITLE TO ANOTHER Hit 1 Hit 2 Hit 3 Hit 4 43
FROM A TRADITIONAL APPROACH 1. TO THE LIVE DIMENSION L I CORE GAME EVENTS Daily, Weekly, Monthly TOOLS for the community EXPANSIONS V UPDATES on the fly CONTINUOUS IMPROVEMENTS E LONG-LASTING OUTSTANDING ENTERTAINMENT EXPERIENCES 44
1. THE VIRTUOUS CYCLE OF LIVE LIVE CONTENT ACTIVITIES ENGAGEMENT VALUE ROI E LC VALUE ARPU A DAU Time spent 45
1. FOCUSING THE COMPANY ON LIVE! GAMER & COMMUNITY SATISFACTION 46
2. ORGANIZATION ALL TEAMS INVOLVED ROAD TO DEVELOPMENT EDITORIAL ENGAGEMENT MARKETING SALES 47
2. ORGANIZATION ALL TEAMS INVOLVED ROAD TO DEVELOPMENT EDITORIAL INFRASTRUCTURE & ONLINE SERVICES ENGAGEMENT, COMMUNITY TEAMS MARKETING SALES ONE ORGANIC & AGILE LIVE TEAM 48
2. ORGANIZATION AND A DEDICATED LIVE OPS TEAM COLLABORATING WITH DEVELOPMENT TEAMS TO INTEGRATE A LIVE DIMENSION INTO THE GAME DNA AND THE BRAND PILLARS WEEKLY MONITORING OF KPIS TO PILOT AND ADJUST LIVE OPERATIONS, USING BEST PRACTICES FROM ALL OUR EXPERIENCES PRE LAUNCH LAUNCH POST LAUNCH INCREASING ENGAGEMENT THROUGH LIVE EVENTS, ESPORTS ETC. ENSURING G A M E R S SATISFACTION WITH AN ROI-BASED MINDSET 49
3. ACHIEVEMENTS LONGER TAIL 2014 NON LIVE AAA GAMES 2015 2016 50
3. ACHIEVEMENTS LONGER TAIL 2014 NON LIVE AAA GAMES 2015 2016 51
3. ACHIEVEMENTS LONGER TAIL 2014 NON LIVE AAA GAMES 2015 2016 52
3. ACHIEVEMENTS YEAR-ROUND CONTENT 4 SEASON DLCs 53
3. ACHIEVEMENTS YEAR-ROUND CONTENT Year 1 roadmap + FRIEND REFERRAL + COME BACK FOR MORE SEASON ONE OPERATION BLACK ICE SEASON TWO TO BE REVEALED SEASON THREE TO BE REVEALED SEASON FOUR TO BE REVEALED Q1 2016 Q2 2016 Q3 2016 Q4 2016 54
3. ACHIEVEMENTS DAU AFTER 2 MONTHS NON LIVE *at scale 55
3. ACHIEVEMENTS
3. ACHIEVEMENTS THE DIVISION CLOSED BETA
3. REINFORCING GAMERS GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS THANKS TO ESPORTS 58
3. REINFORCING GAMERS GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS PRO PLAYER CASUAL PLAYER STREAMER / BROADCASTER EVENT ORGANIZER 59
3. REINFORCING GAMERS GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS $2B MARKET 35,610 BROADCASTERS 188M UNIQUE VIEWERS $ 201 8 Nov 15 201 5 60
3. REINFORCING GAMERS GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS SINCE 2003 2015WC 950K TRACKS SHARED 18 M PLAYERS 150K LIVE STREAM SESSIONS >100K LIVE SPECTATORS >1 M PEOPLE REACHED ONLINE 61
3. REINFORCING GAMERS GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS SINCE 2003 2015WC 950K TRACKS SHARED 18 M PLAYERS 150K LIVE STREAM SESSIONS >100K LIVE SPECTATORS >1 M PEOPLE REACHED ONLINE 62
3. REINFORCING GAMERS GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS $100k prize pool GRASSROOTS PRO TOURNAMENTS ESPORT-AINEMENT 63
4. CONCLUSION THIS IS JUST THE BEGINNING STRATEGY COLLABORATION EXPERTISE PORTFOLIO 64
MEDIUM TERM PLAN Alain Martinez, CFO 65
SIGNIFICANT TOPLINE & PROFIT GROWTH AHEAD REVENUES: 2.2BN, +60% FY19 NON-IFRS OPERATING INCOME MARGIN: 20% X~3 in absolute value FREE CASH FLOW: ~300M 66
FY19 TOP LINE ASSUMPTIONS HOW MANY GAMES? 5 AAAs BASED ON ESTABLISHED FRANCHISES 67
GREAT FOCUS DRIVING STRONG EXECUTION STRONG CONCENTRATION 56 37 34 TOTAL NUMBER OF GAMES 21 15 14 12 FY10 FY11 FY12 FY13 FY14 FY15 FY16 *excluding F2P titles 68
BUILDING ON BLOCKBUSTER BRANDS 69
FY19 TOP LINE ASSUMPTIONS ARE UNIT ASSUMPTIONS AGRESSIVE? 40 MILLION UNITS 70
FY19 TOP LINE ASSUMPTIONS NEW MARKETS 71
FY19 TOP LINE ASSUMPTIONS IMPACT FROM RECURRING PLAYERS INVESTMENT? 17% OF TOTAL REVENUES 72
FY19 TOP LINE ASSUMPTIONS FY15 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 RELEASES NEW AAA 4 to 5 BIG TITLES 5 BIG TITLES LIVE NEW AAA LIVE = RECURRING REVENUES 73
FY19 TOP LINE ASSUMPTIONS FY16 DIGITAL 30% OF TOTAL REVENUES FY19 DIGITAL 45% OF TOTAL REVENUES 21% 28% 70% 9% 55% 74 % 17% Physical Digital Distribution Player recurring investment* * Includes ingame items, DLCs/season pass, subscription & advertising XXX 74
PROFITABILITY ASSUMPTIONS GROSS MARGIN EXPANSION? YES, >80% OPERATING LEVERAGE? YES 75
INVESTMENT GROWTH & NEW RECRUITMENTS? YES CASH FLOW ASSUMPTIONS CASH USE? RETURN TO SHAREHOLDERS & INVEST FOR THE FUTURE 76
A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION We create our own Brands (IPs) internally MAJOR BENEFITS BETTER LONG-TERM VISIBILITY ON PIPELINE NO NEED FOR EXPENSIVE M&A OR EXTERNAL TEAMS MEANINGFUL TEAMS FOR THE XXX LONG-TERM BENEFIT OF OUR SHAREHOLDERS 77
M&A ACTIVITY OF MAIN INDUSTRY PLAYERS OVER THE LAST 10 YEARS ($bn) BIG M&A IS EXPENSIVE CUMULATED M&A > $13BN CUMULATED M&A $2.5BN 15,0 12,0 9,0 6,0 3,0 - ($bn) 3,0 2,5 2,0 1,5 1,0 0,5 0,0 (2) (1) (1) Cumulated M&A expenditure n.a. n.a. n.a. n.a. n.a. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cumulated M&A expenditure FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 AcquisiDon of subsidiaries (net of cash acquired) (3) Sources: Company reports, press releases Notes: (1) AcDvision standalone figures (excluding Vivendi Games acquisidons); (2) High Moon was acquired by Vivendi Games; (3) Closing sdll pending 78
A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION OPEN WORLDS, A MAJOR GROWTH DRIVER OPEN WORLDS SHARE OF TOTAL MARKET* FY08 FY15 7 % 33% *NPD, GFK, value, physical sales 79
A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION ONLY UBISOFT CAN REGULARLY DELIVER OPEN WORLDS UBISOFT EA ATVI TTWO KONAMI CD PROJECT WARNER FY14 AC 4 GTA V BATMAN FY15 AC UNITY FAR CRY 4 WATCH_DOGS THE CREW DRAGON AGE DESTINY FY16 AC SYNDICATE FAR CRY PRIMAL THE DIVISION METAL GEAR THE WITCHER BATMAN MAD MAX = GREAT VISIBILITY YEAR AFTER YEAR 80
A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION WHY 9000 STUDIO EMPLOYEES? To create GREAT NEW IPS To take advantage of OPEN WORLD GROWTH To have better LONG-TERM VISIBILITY ON OUR PIPELINE To come back STRONG ON THE MULTIPLAYER FRONT To bring GREAT DIGITAL SERVICES 2/3 OF PRODUCTION IN COMPETITIVE COST COUNTRIES and our costs are materially* lower than direct peers *Internal estimates 81