Fiscal Earnings

Transcription

1 Fiscal Earnings

2 Yves Guillemot, President and Chief Executive Officer Alain Martinez, Chief Financial Officer Disclaimer This presentation 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 25, 2008 with the French Financial Markets Authority (l'autorité des Marchés Financiers). 2

3 Agenda Introduction financial highlights guidance and conclusion 3

4 Introduction (1) () Solid Fiscal performance in a challenging environment Sales up +18.4% at constant exchange rates. Operating margin at 12,2%, the second best performance of comparables. Net Income excluding non recurring items and stock based compensation at 84.7 M compared to 80.6 M last year. Cash flow from operating activities 27.8 M vs M last year. Closing cash position at M from M last year 4

5 Introduction (2) () Continued strengthening of existing franchises : - Farcry 2 (up 64%), POP (up 10%), Raving Rabbids (up 50%), Brothers in Arms (up 35%) Another strong year for the casual business, up 43% yoy - 3 strong franchises : Petz (5 million units), Imagine (9 million units), Coach (2 million units) - N 1 third party on the DS in Europe and the US in 2008 Successfully created 3 new long term franchises - Shaun White (2.8 million units), Tom Clancy s HAWX (1 million units) and Coach (2 million units) New steps implemented for future growth M in investments developers hired - 5 studios acquired, 4 created - GOALS : - Bigger brands Enter new genres Internalize more and more production Prepare the next cycle. 5

6 Introduction (3) : Increased investments lead to strongest ever line up in FY10 FY10 FY09 Franchises Licences New Brands 7 Assassin s Creed (Q3) Splinter Cell (Q3) Ghost Recon (Q4) Red Steel (Q3) Rabbids Go Home (Q3) Anno (Q1) Shaun White (Q3) 4 James Cameron s Avatar (Q3) Ninja Turtle (Q2) Arthur and the Revenge (Q3) Cloudy with a chance (Q2 & Q3) 4 FarCry Rayman Prince of Persia Brothers in arms 1 Naruto 3 4 I am Alive (Q4) Academy of Champions (Q3) R.U.S.E. (Q4) Shaun White Hawx EndWar Haze Casual Petz, Imagine, Playzone, MyCoach Petz, Imagine, Playzone, MyCoach, Planet Rescue, Jake Power 6

7 Agenda Introduction financial highlights guidance and conclusion 7

8 P&L by Function Presentation of a P&L by Function going forward. Main change is ability to differentiate between Selling and General and Administrative expenses while in the past only the difference between SG&A variable and fixed costs was available. In addition to the usual Depreciation and Royalties expenses, the Research and Development expenses now also include some R&D charges that are expensed directly without being capitalized. They are mostly related to Hybride. Finaly, Supply chain management costs have been moved up to the gross margin while they were included in the SG&A line in the past. 8

9 P&L (1) (): Profitability million m % m % Sales 1, Cost of sales (418.4) 4) 39.6 (315.6) 34.0 Gross profit Research and Development expenses (246.3) 23.3 (264.6) 28.5 Marketing & Sales expenses (204.2) 19.3 na G & A expenses (60.2) 5.7 na SG & A expenses (264.4) 25.0 (215.0) 23.2 Current operating income * Different product mix alter significantly P&L structure : Casual (31.9% of sales vs 25.4% in FY08) & Distribution ( 7.6% of sales vs 2.8% in FY08). SG&A : Variable Marketing expenses at M or 14.5% of sales, up 2.2 percentage points (114.1 M in FY08). SG&A : Fixed structure costs : M or 10.5% of sales, down 0.3 percentage points (100.9 M in FY08). * Before stock-based compensation 9

10 P&L (2) (): review of R&D expenses million % var Depreciation of in-house games % Depreciation of external games and licences % Royalties % Others na ns Total R&D depreciation and royalties % Capitalized software-related production % Investment in external production and licenses (excluding future commitments) % Royalties % Others 6.7 na ns Total development investment % Gap between investment and depreciation : 84.2 M, highlights strong investments for FY10 line up and beyond M from Internal investments M from External investments. (includes impact from I am Alive postponements to FY10). Others : relates to development charges that go directly into the P&L without being capitalised, mostly related to Hybride development costs. 10

11 P&L (3) () million Current operating income* Stock-based compensation (16.9) (8.5) Other revenues (expenses) Operating income/(loss) Net financial income/(expense) (4.8) 27.0 Minorityit interest t Net income tax (39.8) (49.2) Net income Diluted earnings/(loss) per share ( ) Nbr of shares fully diluted Financial income : Interest earning : gain of 0.3 M (charge of 1.9 M in FY08). Foreign exchange : loss of 5.3 M (loss of 13.7 M in FY08). Gain on Equity swap: 8.8 M gain from the sell of the remaining shares held by Calyon (gain of 28.0 M in FY08). Loss on Gameloft mark to market valuation : 8.7 M (gain of 14.6 M in FY08) Net income tax of 36.6%. Is 31.7% excluding stock-based compensation. * Before stock-based compensation 11

12 P&L (4) (): net income before non recurring elements and stock-based compensation million Net income Gameloft Equity Swap / Calyon Non recurring events Stock-based compensation Net income before non recurring elements and stock based compensation Diluted EPS before non recurring elements and stock based compensation

13 Cash flow statement million Opening cash position Cash flows from operations Change in WCR (10.3) 58.1 Cash flows from operating activities Net investment in capital assets (26.9) (14.9) Net free cash flow Net acquisitions/disposals (10.3) (26.2) Proceeds from issue of capital Effect of exchange rate fluctuations Decrease/(increase) in net debt Closing cash position Solid profitability did not translate into significant positive free cash flows Strong investment in R&D, 84.2 M higher than depreciation Higher Capex linked to creation and expansion of studios Increase of 10.3 M in working capital requirements 13

14 Change in working capital million Δ Inventories Δ Trade receivables Δ Other receivables Δ Trade payables Δ Other payables Change in WCR The increase in working capital requirements is explained by : Inventories increased by 23 M, mostly due to DS longer manufacturing lead times and slower than expected growth. Trade receivables decreased by 19.7 M due in part to lower sales in Q4. Other receivables decreased by 35.3 M due mostly to the sales of Ubisoft shares held in the equity swap. Trade payables decreased by 45.4 M, mostly due to business with Nintendo (52% of total Q4 sales compared to 36% a year ago) which we have to pay upfront as well as a 11.8 M decrease of future commitments on external games. 14

15 Agenda Introduction financial highlights guidance and conclusion 15

16 FY10 Guidance confirmed Sales 1.1 billion Gross margin 64% R&D (29%) Marketing & Sales (17-18%) G & A (6-7%) SG&A (24%) Current operating margin before stock options (11%) 16