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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  Ubisoft Entertainment    UBI   FR0000054470

UBISOFT ENTERTAINMENT

(UBI)
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October 30, 2019: Ubisoft reports first-half 2019-20 sales and earnings figures 340.03 KB

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10/30/2019 | 12:57pm EST

UBISOFT® REPORTS FIRST-HALF2019-20 SALES AND EARNINGS FIGURES

Performance led by a solid back catalog

FIRST-HALF2019-20: NET BOOKINGS ABOVE TARGET

Reported

% of total net bookings

In €m

change (%)

vs. H1 2018-19

H1 2019-20

H1 2018-19

IFRS 15 sales

697.5

-9.1%

N/A

N/A

Net bookings

661.1

-11.4%

N/A

N/A

Digital net bookings

537.1

+3.5%

81.2%

69.6%

PRI1 net bookings

310.0

+18.3%

46.9%

35.1%

Back-catalog net bookings

511.6

-8.8%

77.4%

75.2%

IFRS operating income

9.3

-90.1%

N/A

N/A

Non-IFRS operating income

6.9

-93.8%

1.0%

14.8%

  • Assassin's Creed® Odyssey: the second quarter saw a further acceleration of the already very sharp increase delivered in the first quarter in terms of daily player engagement, PRI1 and sell-through compared with Assassin's Creed® Origins last year
  • Rainbow Six® Siege:
    • Record-highMAUs2 and higher PRI1 in Q2 versus Q2 2018-19
    • Over 50 million registered players
    • Esports: 27% increase in number of hours viewed for the Six Major Raleigh3
  • Strong growth for PC, led notably by Uplay
  • Operating income affected by impairment charges recorded for Ghost Recon®
    Breakpoint
  1. Player Recurring Investment includes sales of digital items, DLC, season passes, subscriptions and advertising.
  2. Monthly Active Users.
  3. Total hours of content viewed live and via VOD on the official YouTube and Twitch channels, compared with the Six Major Paris event held in the same period of 2018.

1

Paris, October 30, 2019 - Today, Ubisoft released its sales and earnings figures for the first half of fiscal 2019-20, i.e. the six months ended September 30, 2019.

Yves Guillemot, Co-Founder and Chief Executive Officer, said "Our second-quarterperformance demonstrates the solidity of our back catalog, which was fueled by the strong momentum of many of our titles. Having already seen very sharp growth in the first quarter, Assassin's Creed Odyssey delivered a further acceleration in performance compared with the previous opus in terms of sell-through,player engagement and PRI. MAUs for Rainbow Six Siege reached a record high during the quarter and its PRI continued to increase. This game is making its mark in a highly competitive environment, particularly in the esports arena.

As illustrated by our announcement last week, we are continuing to take decisions in the interests of Ubisoft's long-term future. It is as a result of this approach that we've been able to significantly and successfully transform our business model in recent years and create major shareholder value.

Ubisoft's prospects are particularly promising. Our numerous growth vectors going forward include the arrival of the next generation of consoles, the opening up of the Asian market and our partnership with Tencent for launching our franchises on mobile. All of these are strong value creation drivers for the medium term. Thanks to a very robust balance sheet, an unrivaled production capacity, development teams that are among the best in the industry, and a widely recognized ability to adapt and grow, we are looking forward to the future with confidence."

2

Note

The Group presents indicators which are not prepared strictly in accordance with IFRS as it considers that they are the best reflection of its operating and financial performance. The definitions of the non-IFRS indicators as well as a reconciliation table between the IFRS consolidated income statement and the non-IFRS consolidated income statement are provided in an appendix to this press release.

The Group applied the new lease-accounting standard, IFRS 16, for the first time in its financial statements for the six months ended September 30, 2019. As the Group elected to use the modified retrospective approach on adopting IFRS 16, the comparative figures for first-half2018-19 have not been restated.

Income statement and key financial data

In € millions

H1 2019-20

%

H1 2018-19

%

IFRS 15 sales

697.5

767.0

Deferred revenues related to IFRS 15

(36.4)

(21.0)

Net bookings

661.1

746.1

Gross margin based on net bookings

564.3

85.4%

635.0

85.1%

Non-IFRS R&D expenses

(284.9)

-43.1%

(272.0)

-36.5%

Non-IFRS selling expenses

(186.9)

-28.3%

(182.8)

-24.5%

Non-IFRS G&A expenses

(85.7)

-13.0%

(69.9)

-9.4%

Total non-IFRS SG&A expenses

(272.5)

-41.2%

(252.8)

-33.9%

Non-IFRS operating income(1)

6.9

1.0%

110.2

14.8%

IFRS operating income(1)

9.3

94.3

Non-IFRS diluted EPS (in €)(1)

0.11

1.32

IFRS diluted EPS (in €)(1)

0.01

1.19

Non-IFRS cash flows from operating

activities(2)

(20.6)

22.0

R&D investment expenditure(3)

(431.5)

(385.6)

Non-IFRS net cash/(debt) position

(217.8)

(337.5)

  1. H1 2019-20 and H1 2018-19 are not comparable as the IFRS figures for H1 2019-20 include the impact of applying the new lease accounting standard, IFRS 16. It has an impact of € (1.2) million on IFRS and non-IFRS operating incomes and € (1.5) million on IFRS and non-IFRS attributable net incomes.
  2. Based on the consolidated cash flow statement for comparison with other industry players (not reviewed by the Statutory Auditors).
  3. Including royalties but excluding future commitments.

Sales and net bookings

IFRS 15 sales for the second quarter of 2019-20 came to €334.1 million (€327.7 million at constant exchange rates4), down 9.0% on the €367.1 million generated in second-quarter2018-19.

For the first half of 2019-20, IFRS 15 sales amounted to €697.5 million (€681.7 million at constant exchange rates), down 9.1% on the first-half2018-19 figure of €767.0 million.

Net bookings for second-quarter2019-20 totaled €346.9 million, exceeding the target of approximately €310 million, and representing a decrease of 4.9% (6.7% at constant exchange rates) compared with the €364.6 million recorded for the second quarter of 2018-19.

First-half2019-20 net bookings stood at €661.1 million, down 11.4% (13.4% at constant exchange rates) on the €746.1 million generated in the first half of 2018-19.

4 Sales at constant exchange rates are calculated by applying to the data for the period under review the average exchange rates used for the same period of the previous fiscal year.

3

Main income statement items5

Non-IFRS operating income came in at €6.9 million in first-half2019-20, compared with the €110.2 million recorded for the first half of 2018-19.

Non-IFRS attributable net income amounted to €12.8 million, representing non-IFRS diluted earnings per share (EPS) of €0.11, compared with €159.0 million and €1.32 respectively for first-half2018-19.

IFRS attributable net income totaled €0.9 million, representing IFRS diluted EPS of €0.01 (€140.7 million and €1.19 respectively in first-half2018-19).

The Group's first-time application of IFRS 16 had impacts of € (1.2) million on IFRS and non- IFRS operating incomes and € (1.5) million on IFRS and non-IFRS attributable net incomes.

Main cash flow statement6 items

Non-IFRS cash flows from operating activities represented a net outflow of €20.6 million (against a net inflow of €22.0 million in first-half2018-19). This swing reflects a negative €104.1 million in non-IFRS cash flow from operations (versus a positive €88.4 million in first- half 2018-19) and an €83.5 million decrease in non-IFRS working capital requirement (compared with a €66.4 million increase in the first six months of 2018-19).

Outlook

Third-quarter2019-20

Net bookings for the third quarter of 2019-20 are expected to come in at around €410 million, down approximately 32% compared with third-quarter2018-19.

Full-year2019-20

As announced on October 24, 2019, the Company is now expecting net bookings of approximately €1,450 million for full-year2019-20 and non-IFRS operating income of between €20 million and €50 million.

Fiscal 2020-21

Ubisoft is targeting net bookings of approximately €2,600 million and non-IFRS operating income of approximately €600 million in 2020-21.

  1. See the presentation published on Ubisoft's website for further information on movements in the income statement and cash flow statement.
  2. Based on the consolidated cash flow statement for comparison with other industry players (not reviewed by the Statutory Auditors).

4

Recent significant events

Acquisition of a 70% stake in Green Panda Games, a leading publisher of free-to-playmobile games, specialized in hyper-casualgames (July 31, 2019). Founded in 2013 and based in Paris, Green Panda Games develops and publishes games in the idle genre. Boasting a highly-talented30-person team, Green Panda Games has launched more than 55 games since its creation, downloaded by some 85 million players worldwide.

Private placement of bonds convertible into new shares and/or exchangeable for existing shares ("OCEANEs") due 2024, and early redemption of the OCEANEs issued on September 27, 2016. On September 17, 2019, Ubisoft successfully completed an offering of bonds convertible into new shares and/or exchangeable for existing shares ("OCEANEs") by way of a private placement to institutional investors for a nominal amount of €499,999,897.17. Concurrently with the offering, Ubisoft announced that it was exercising its option to redeem its outstanding c. €400 million OCEANEs due 2021 issued on September 27, 2016 (ISIN: FR0013204286) in accordance with the terms and conditions of the existing bonds. The bondholders opted almost unanimously to convert their OCEANEs into Ubisoft shares. Consequently, 7,260,363 OCEANEs (representing 99.36% of the outstanding total) were converted into 6,265,677 new Ubisoft shares or exchanged for 994,686 existing Ubisoft shares held in treasury. On the completion of this redemption and conversion process, the number of Ubisoft shares in issue totaled 120,574,568 at October 21, 2019. As at October 21, 2019, the OCEANEs due 2024 had a 3.49% potential dilutive impact on the Company's capital.

Conference call

Ubisoft will hold a conference call today, Wednesday October 30, 2019, at 6:15 p.m. Paris time/1:15 p.m. New York time.

The conference call will be available online by accessing: https://edge.media-server.com/mmc/p/72ubndnw

Contacts

Investor Relations

Press Relations

Jean-Benoît Roquette

Michael Burk

SVP Investor Relations

Senior Director of Corporate Public Relations

+ 33 1 48 18 52 39

+ 33 1 48 18 24 03

Jean-benoit.roquette@ubisoft.com

Michael.burk@ubisoft.com

Julien Brosillon

Senior Investor Relations Manager

  • 33 1 73 30 11 97 Julien.brosillon@ubisoft.com

Disclaimer

This press release may contain estimated financial data, information on future projects and transactions and future financial results/performance. Such forward-looking data are provided for information 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 were presented to the Board of Directors on October 30, 2019 and have not been reviewed by the Statutory Auditors. (Additional information is provided in the most recent Ubisoft Registration Document filed on June 7, 2019 with the French Financial Markets Authority (l'Autorité des Marchés Financiers)).

About Ubisoft

Ubisoft is a leading creator, publisher and distributor of interactive entertainment and services, with a rich portfolio of world-renowned brands, including Assassin's Creed, Far Cry, For Honor, Just Dance, Watch_Dogs, Tom Clancy's video game series including Ghost Recon, Rainbow Six and The Division. The teams throughout Ubisoft's worldwide network of studios and business offices are committed to delivering original and memorable gaming experiences across all popular platforms, including consoles, mobile phones, tablets and PCs. For the 2018-19 fiscal year, Ubisoft generated net bookings of €2,029 million. To learn more, please visit www.ubisoftgroup.com.

© 2019 Ubisoft Entertainment. All Rights Reserved. Ubisoft and the Ubisoft logo are registered trademarks in the US and/or other countries.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Ubisoft Entertainment SA published this content on 30 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2019 17:56:21 UTC

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Financials (EUR)
Sales 2020 1 452 M
EBIT 2020 36,6 M
Net income 2020 -29,7 M
Debt 2020 406 M
Yield 2020 -
P/E ratio 2020 -335x
P/E ratio 2021 22,6x
EV / Sales2020 4,80x
EV / Sales2021 2,63x
Capitalization 6 571 M
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Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 67,41  €
Last Close Price 58,10  €
Spread / Highest target 46,3%
Spread / Average Target 16,0%
Spread / Lowest Target -17,4%
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Managers
NameTitle
Yves Marie Remy Guillemot Chairman & Chief Executive Officer
Claude Michel Marcel Guillemot Director & Executive Vice President-Operations
Frédérick Duguet Chief Financial Officer
Michel Jean Yves Guillemot Director, Executive VP-Strategy & Finance
Gérard Jean Louis Guillemot Director, Executive VP-Publishing & Marketing
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