INVESTOR DAY February 18th 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 INTRODUCTORY REMARKS G YVES GUILLEMOT PRESIDENT & CEO E HOW WE CAN REACH A WIDER AUDIENCE JOHN PARKES N MANAGING DIRECTOR FRANCE
D DRIVING ENGAGEMENT WITH LIVE & CONTENT ACTIVITIES ANNE BLONDEL A 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%
NON-IFRS OPERATING INCOME MARGIN: % FY19 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 YEAR ROUND & MULTI-YEAR SERVICE
LOW ENGAGEMENT HIGH ENGAGEMENT
GAMES’ SHORT LIFE CYCLE GAMES’ LONG LIFE CYCLE
NO DIRECT RELATION TO CONSTANT & DIRECT RELATION WITH GAMERS PLAYERS
LOW BARRIERS TO ENTRY VERY HIGH BARRIERS TO ENTRY
FRAGMENTED MARKET 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 CONSUMER PARKS PRODUCTS
12 AN AGILE & LONG-TERM APPROACH
13 AN UNBIASED APPROACH
XXX ASSASSIN’S CREED TOM CLANCY’S GHOST RECON RABBIDS THE MOVIE RABBIDS TV SHOW TOM CLANCY’S SPLINTER CELL WATCH DOGS
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 REACHING A WIDER AUDIENCE
30 YEARS CONTINUOUS EXPERIENCE TALENT & PASSION 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 SINGLE PLAYER + OPEN WORLD SEAMLESS MP/COOP 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
STRONG DIGITAL HUGE REACH LIVE SERVICES
A MEANINGFUL CONTRIBUTOR TO OUR LONG TERM 25 FOR HONOR: A GREAT LIVE SERVICES NEW CREATION
SOLO & LONG TAIL HEAVY PLAYER MULTIPLAYER 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 ]
Players Players
of Number number
FarCry Far Cry Far FAR CRY 2 FAR CRY 3 FAR CRY 4
28 BRINGING RAINBOW 6 TO A WIDER AUDIENCE
ON TRACK STRONG MP FOR RECORD
REPUTATION 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 3 YEARS AGO NOW & TOMORROW SEGMENTS* RAINBOW SIX FOR HONOR MULTIPLAYER CENTRIC GHOST RECON THE CREW THE DIVISION… ASSASSIN’S CREED WATCH DOGS ASSASSIN’S CREED THE DIVISION OPEN WORLDS FAR CRY GHOST RECON THE CREW
ASSASSIN’S CREED ASSASSIN’S CREED ACTION ADVENTURE WATCH DOGS
SOUTH PARK RPG THE DIVISION FAR CRY SHOOTER FAR CRY GHOST RECON RAINBOW SIX *excluding Sports 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 BROADENING THROUGH WIDER ENTERTAINMENT
MOVIE & TV
ASSASSIN’S CREED TOM CLANCY’S RABBIDS THE MOVIE RABBIDS TV SHOW TOM CLANCY’S SPLINTER CELL GHOST RECON WATCH DOGS
CONSUMER PRODUCTS
THEME PARKS
38 BROADENING THROUGH WIDER ENTERTAINMENT
DEC 21, 2016
65M UNIQUE VIEWERS*
39 * Have seen at least 1 episode 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 FROM1. …TO A TRADITIONAL THE LIVE DIMENSION APPROACH
L EVENTS TOOLS EXPANSIONS CORE GAME Daily, Weekly, Monthly for the community I
UPDATES CONTINUOUS V on the fly IMPROVEMENTS … E
LONG-LASTING OUTSTANDING ENTERTAINMENT EXPERIENCES
44 1. THE VIRTUOUS CYCLE OF LIVE
LIVE CONTENT ACTIVITIES ENGAGEMENT VALUE
LC ROI DAU
VALUE ARPU E A
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
INFRASTRUCTURE & ONLINE SERVICES EDITORIAL ENGAGEMENT MARKETING COMMUNITY, TEAMS
SALES
ONE ORGANIC & AGILE LIVE TEAM 48 2. ORGANIZATION AND A DEDICATED LIVE OPS TEAM
COLLABORATING WITH DEVELOPMENT WEEKLY MONITORING OF KPIS TO TEAMS TO INTEGRATE A LIVE DIMENSION PILOT AND ADJUST LIVE OPERATIONS, INTO THE GAME DNA AND THE BRAND USING BEST PRACTICES FROM ALL OUR PILLARS EXPERIENCES
PRE LAUNCH LAUNCH POST LAUNCH
INCREASING ENGAGEMENT THROUGH ENSURING G A M E R S ’ LIVE EVENTS, ESPORTS ETC. SATISFACTION WITH AN ROI-BASED MINDSET
49 3. ACHIEVEMENTS LONGER TAIL 2014 2015 2016 NON LIVE AAA GAMES
50 3. ACHIEVEMENTS LONGER TAIL 2014 2015 2016 NON LIVE AAA GAMES
51 3. ACHIEVEMENTS LONGER TAIL 2014 2015 2016 NON LIVE AAA GAMES
52 3. ACHIEVEMENTS YEAR-ROUND CONTENT 4 SEASON DLCs
53 3. ACHIEVEMENTS YEAR-ROUND
+ FRIEND REFERRAL + COME BACK FOR MORE CONTENTYear 1 roadmap
SEASON ONE SEASON TWO SEASON THREE SEASON FOUR OPERATION BLACK ICE TO BE REVEALED TO BE REVEALED 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 CASUAL PLAYER PLAYER
STREAMER / EVENT BROADCASTER ORGANIZER
59 3. REINFORCING GAMERS’ GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS $2B 35,610 188M $MARKET BROADCASTERS UNIQUE VIEWERS 20 1 8 Nov 15 20 1 5
60 3. REINFORCING GAMERS’ GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS SINCE 2003 2015WC 150K 950K LIVE STREAM SESSIONS TRACKS SHARED >100K LIVE SPECTATORS 18 M PLAYERS >1 M PEOPLE REACHED ONLINE
61 3. REINFORCING GAMERS’ GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS SINCE 2003 2015WC 150K 950K LIVE STREAM SESSIONS TRACKS SHARED >100K LIVE SPECTATORS 18 M PLAYERS >1 M PEOPLE REACHED ONLINE
62 3. REINFORCING GAMERS’ GLOBAL EXPERIENCE ENTERTAINING ALL TYPES OF GAMERS
$100k prize pool
GRASSROOTS PRO TOURNAMENTS ESPORT-AINEMENT 63 4. CONCLUSION THIS IS JUST THE BEGINNING
STRATEGY COLLABORATION EXPERTISE PORTFOLIO
64 MEDIUM TERM PLAN Alain Martinez, CFO
65 SIGNIFICANT TOPLINE & PROFIT GROWTH AHEAD
REVENUES: 2.2BN€, +60%
NON-IFRS OPERATING INCOME MARGIN: % FY19 20 X~3 in absolute value
FREE CASH FLOW: ~300M€
66 FY19 TOP LINE ASSUMPTIONS
HOW MANY GAMES? 5 AAAs BASED ON ESTABLISHED FRANCHISES
67 GREAT FOCUS DRIVING STRONG EXECUTION
STRONG CONCENTRATION 56
37 34 TOTAL NUMBER OF GAMES 21 15 14 12
FY10 FY11 FY12 FY13 FY14 FY15 FY16
*excluding F2P titles 68 BUILDING ON BLOCKBUSTER BRANDS
69 FY19 TOP LINE ASSUMPTIONS
ARE UNIT ASSUMPTIONS AGRESSIVE? 40 MILLION UNITS
70 FY19 TOP LINE ASSUMPTIONS
NEW MARKETS
71 FY19 TOP LINE ASSUMPTIONS
IMPACT FROM RECURRING PLAYERS INVESTMENT? 17% OF TOTAL REVENUES
72 FY19 TOP LINE ASSUMPTIONS
FY15 FY16FY16 FY17FY17 FY18FY18 FY19 FY19
4 to 5 5 BIG TITLES BIG TITLES RELEASES NEW AAA LIVE
NEW AAA
LIVE = RECURRING REVENUES 73 FY19 TOP LINE ASSUMPTIONS
FY16 FY19 DIGITAL 30% DIGITAL 45% OF TOTAL REVENUES OF TOTAL REVENUES
21% 28% 70% 9% 55% 74 17% %
Physical Digital Distribution XXX Player recurring investment* * Includes ingame items, DLCs/season pass, subscription & advertising 74 PROFITABILITY ASSUMPTIONS
GROSS MARGIN EXPANSION? YES, >80%
OPERATING LEVERAGE? YES
75 CASH FLOW ASSUMPTIONS
INVESTMENT GROWTH & NEW RECRUITMENTS? YES
CASH USE? RETURN TO SHAREHOLDERS & INVEST FOR THE FUTURE
76 A DIFFERENT POSITIONING, A DIFFERENT ORGANIZATION
We create our own Brands (IPs) internally MAJOR BENEFITS BETTER LONG-TERM VISIBILITY ON PIPELINE NO NEED FOR EXPENSIVE M&A OR EXTERNAL TEAMS
MEANINGFUL TEAMS FOR THE LONG-TERM BENEFIT OFXXX OUR SHAREHOLDERS
77 M&A ACTIVITY OF MAIN INDUSTRY PLAYERS OVER THE LAST 10 YEARS BIG M&A IS EXPENSIVE
($bn)
15,0 Cumulated M&A expenditure 12,0 9,0 CUMULATED M&A (3) 6,0
> $13BN 3,0 (2) n.a. n.a. n.a. n.a. n.a. - (1) (1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
($bn) 3,0 Cumulated M&A expenditure 2,5 2,0 1,5 CUMULATED M&A 1,0 $2.5BN 0,5 0,0 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15
Acquisi on of subsidiaries (net of cash acquired)
Sources: Company reports, press releases Notes: (1) Ac vision standalone figures (excluding Vivendi Games acquisi ons); (2) High Moon was acquired by Vivendi Games; (3) Closing s ll 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
AC UNITY FAR CRY 4 FY15 DRAGON AGE DESTINY WATCH_DOGS THE CREW
AC SYNDICATE METAL THE BATMAN FY16 FAR CRY PRIMAL GEAR WITCHER MAD MAX THE DIVISION
= 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