Ubisoft Entertainment : February 6, 2020 - Ubisoft reports third-quarter 2019-20 sales 196.46 KB

UBISOFT® REPORTS

THIRD-QUARTER2019-20 SALES

Solid performance from several back-catalog titles

• Net bookings at €455.5 million for third-quarter2019-20,up on the Group's target of around €410.0 million
• Net bookings for first 9 months 2019-20

	In €m	Reported	% of total net bookings
	9 months	change
	9 months	9 months
	2019-20	vs. 2018-19
	2019-20	2018-19
IFRS 15 sales	1,113.7	-16.2%	N/A	N/A
Net bookings	1,116.6	-17.4%	N/A	N/A
Digital net bookings	888.8	-1.0%	79.6%	66.4%
PRI1 net bookings	474.0	+7.4%	42.5%	32.6%
Back-catalog net bookings	764.7	-9.3%	68.5%	62.3%

• Robust activity on both PC and consoles:
• • 4.5 billion hours played in calendar 2019 vs. 2.0 billion in 2016
  • Stable high levels of active players, MAUs2 and PRI1 in the third fiscal quarter compared with the same period of 2018-19
• Tom Clancy's Rainbow Six® Siege:
• • Over 55 million registered players
  • Record-highMAUs² for a month of December
  • Acceleration of PRI1 growth in the third fiscal quarter
  • • New peak in DARPU²
  • Ranked 7th most impactful PC game by The Esports Observer (calendar Q3 2019)
• Assassin's Creed® Odyssey: steep rises in the first nine months of 2019-20 for sell- through, daily engagement and PRI1, up by some 50%, 60% and 140% respectively compared with Assassin's Creed® Origins
• Just Dance® 2020: sell-through up sharply compared with Just Dance® 2019
• Very strong growth for Uplay: revenue up 73% in the first nine months of 2019-20
• Full-yeartargets for 2019-20 and 2020-21 confirmed

1. Player Recurring Investment (sales of digital items, DLC, season passes, subscriptions and advertising).
2. Monthly Active Users. Daily Average Revenue Per User.

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Paris, February 6, 2020 - Today, Ubisoft released its sales figures for the third quarter of fiscal 2019-20, i.e. the three months ended December 31, 2019.

Yves Guillemot, Co-Founder and Chief Executive Officer, said "Although the current fiscal year is well below our initial expectations, the third fiscal quarter saw excellent performances from several titles in our back catalog - particularly Rainbow Six Siege, Assassin's Creed Odyssey, The Crew 2 and Mario + Rabbids Kingdom Battle - and from the release of Just Dance 2020, which is back on the growth track. The fact that our number of active players, MAUs and PRI on consoles and PC have remained stable year on year at high levels clearly demonstrates the depth of our game's portfolio and the firmer resilience of our business model.

We have evolved our organizational structure in recent months in order to strengthen our focus on high-potential titles, and we are very excited about the idea of releasing five new AAA games in 2020-21. Although the competitive environment is looking especially tough, production of these games is progressing well and each of them comes with great features that set them apart. We also will be releasing other very innovative titles that have a particular focus on social interaction, such as Roller Champions.

Over the past ten years, the Group has radically transformed itself and delivered significant return on its investment. We achieved this by overhauling our portfolio, with a strong presence now in multiplayer games, esports and RPGs. By undertaking a deep-seated digital transformation, with an explosion in player engagement and PRI. By developing our expertise and infrastructure so as to offer best-in-class live experiences. By ramping up Uplay, which is now our fourth-leading digital platform in terms of sales. By releasing five profitable new brands and owning all of our franchises. And by delivering a powerful comeback for Assassin's Creed, sustained growth for Far Cry and incredible success for Rainbow Six Siege - a best seller and one of the greatest esports games of the past five years. As a result, the number of hours played on our PC and console games increased from 2 billion in 2016 to 4.5 billion in 2019.

These outstanding achievements - the vast majority of which were internally driven thanks, notably, to our strong corporate culture - prove that we have got our strategy right and have enabled us to create major value for our players, employees and shareholders. The adjustments that we are currently implementing will allow us to pursue this strategy going forward by continuing to create high-quality experiences and develop direct relationships with our player communities as well as seizing the numerous growth opportunities the industry has to offer."

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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 are appended to this press release.

Sales and net bookings

		Q3	9 months
In € millions
2019-20	2018-19	2019-20	2018-19
IFRS 15 sales	416.2		562.0	1,113.7	1,329.0
Deferred revenues related to IFRS 15	39.3		43.8	2.9	22.9
Net bookings	455.5		605.8	1,116.6	1,351.9
Digital net bookings	351.0		376.2	888.8	897.8
PRI1 net bookings	163.6		178.3	474.0	441.4
Back-catalog net bookings	252.2		275.4	764.7	842.9

IFRS 15 sales for the third quarter of 2019-20 came to €416.2 million, down 25.9% (27.1% at constant exchange rates2) on the €562.0 million generated in third-quarter2018-19.

For the first nine months of 2019-20, IFRS 15 sales amounted to €1,113.7 million, 16.2% lower (17.9% at constant exchange rates) than the €1,329.0 million figure for the first nine months of 2018-19.

Net bookings for third-quarter2019-20 totaled €455.5 million, exceeding the target of around €410.0 million, and representing a decrease of 24.8% (26.0% at constant exchange rates) compared with the €605.8 million recorded for the third quarter of 2018-19.

For the first nine months of 2019-20 net bookings stood at €1,116.6 million, down 17.4% (19.0% at constant exchange rates) on the €1,351.9 million generated in the first nine months of 2018-19.

Outlook

Fourth-quarter2019-20

Net bookings for the fourth quarter of 2019-20 are expected to come in at around €333 million, down approximately 50% on fourth-quarter2018-19.

Full-year2019-20

The Company is standing by the following targets for 2019-20:

• Net bookings of approximately €1,450 million
• Non-IFRSoperating income of between €20 million and €50 million

Full-year2020-21

Ubisoft confirms its targets for 2020-21, namely:

• Net bookings of approximately €2,600 million
• Non-IFRSoperating income of approximately €600 million

1. Player Recurring Investment (sales of digital items, DLC, season passes, subscriptions and advertising).
2. 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 year.

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Recent significant events

Acquisition of a 75% stake in Kolibri Games (February 3, 2020), one of the premier developers of mobile free-to-playgames and one of the leaders of the "idle" games' genre. Kolibri Games developed and publishes Idle Miner Tycoon, a game which has been downloaded by over 104 million players worldwide and has been updated with additional content more than 160 times since its release in 2016. The studio is based in Berlin, Germany, and has a team of around 100 talented individuals.

Conference call

Ubisoft will hold a conference call today, Thursday February 6, 2020, at 6:15 p.m. Paris time/5:15 p.m. London time/12:15 p.m. New York time.

The conference call will take place in English and can be accessed live and via replay by clicking on the following link: https://edge.media-server.com/mmc/p/vhnda37m

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
[e-mail]	[e-mail]

Julien Brosillon

Senior Investor Relations Manager

• 33 1 73 30 11 [e-mail]

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 have not been audited 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.

© 2020 Ubisoft Entertainment. All Rights Reserved. Ubisoft and the Ubisoft logo are registered trademarks in the US and/or other countries.

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APPENDICES

Definition of non-IFRS financial indicators

Net bookingscorresponds to the "Sales" indicator used prior to fiscal 2018-19 (i.e. sales excluding the impacts of applying IFRS 15).

Non-IFRSoperating income calculated based on net bookingscorresponds to operating income less the following items:

• Stock-basedcompensation expense arising on free share plans, group savings plans and/or stock options.
• Depreciation of acquired intangible assets with indefinite useful lives.
• Non-operatingincome and expenses resulting from restructuring operations within the Group.

Non-IFRSoperating margincorresponds to non-IFRS operating income expressed as a percentage of net bookings. This ratio is an indicator of the Group's financial performance.

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Breakdown of net bookings by geographic region

	Q3	Q3	9 months	9 months
	2019-20	2018-19	2019-20	2018-19
Europe	38%	39%	34%	36%
North America	47%	41%	48%	44%
Rest of world	15%	20%	18%	20%
TOTAL	100%	100%	100%	100%

Breakdown of net bookings by platform

	Q3	Q3	9 months	9 months
	2019-202018-19	2019-20	2018-19
PLAYSTATION®4	26%	31%	31%	36%
XBOX One™	15%	18%	17%	20%
PC	27%	24%	27%	22%
NINTENDO SWITCH™	15%	11%	9%	7%
MOBILE	7%	8%	9%	8%
Others*	10%	8%	7%	7%
TOTAL	100%	100%	100%	100%

*Ancillaries, etc.

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Title release schedule

4th quarter (January - March 2020)

PACKAGED & DIGITAL

	PLAYSTATION®4, Xbox One,
WHEEL OF FORTUNE®	NINTENDO SWITCHTM
	(UK & Australia only)
	PLAYSTATION®4, Xbox One,
JEOPARDY!®	NINTENDO SWITCHTM
	(UK & Australia only)

DIGITAL ONLY

FOR HONOR® YEAR 4 - YEAR OF RECKONING	PC, PLAYSTATION®4, Xbox One
TOM CLANCY'S THE DIVISION® 2 EPISODE 3	PC, PLAYSTATION®4, Xbox One
TOM CLANCY'S RAINBOW SIX® SIEGE YEAR 5 SEASON 1	PC, PLAYSTATION®4, Xbox One
TOM CLANCY'S GHOST RECON® BREAKPOINT ADVENTURE 1: DEEP STATE	PC, PLAYSTATION®4, Xbox One
TOM CLANCY'S THE DIVISION® 2	STADIA
THE CREW® 2	STADIA
MIGHT & MAGIC® CHESS ROYALE	IOS, ANDROID, PC
UNO FLIP™ (DLC)	PLAYSTATION®4, Xbox One,
NINTENDO SWITCHTM

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