UBISOFT Reports 3rd Quarter 2017-2018 Sales

UBISOFT Reports 3rd Quarter 2017-2018 Sales

Company records very solid performance for the quarter, with great execution across the board                           

Q3 2017-18: STRONG RISE IN SALES, OUTSTRIPPING TARGETS

  • €725.0 million in third-quarter sales, up 36.8% year on year, outstripping Ubisoft’s revised target of around €700.0 million and its original target of €630.0 million.
  • Great execution across the board[1]
    • Assassin’s Creed® Origins:
      • Industry’s third best-seller in EMEA in 2017
      • Average playtime per player expected to almost double[2]
    • Tom Clancy communities: almost 60 million unique players
    • Tom Clancy’s Ghost Recon® Wildlands: Industry’s seventh best-seller in EMEA and tenth in NCSA in 2017
    • Tom Clancy’s Rainbow Six® Siege eSports: World-famous teams – Evil Geniuses, Team Liquid, FaZe Clan and Counter Logic Gaming – joined the Pro League
    • Tom Clancy’s The Division®: Player engagement more than doubling with the 1.8 update
    • Nintendo SwitchTM: Ubisoft is the console’s leading third-party publisher, with Mario + Rabbids®: Kingdom Battle ranking top-seller for Switch’s third-party games
    • For Honor®: Fifth most viewed new game on Twitch in 2017
    • Mobile: 75.6% growth and partnership signed between Ketchapp and Tencent in China
  • Very significant advance for digital transformation (nine-month period
    • Sharp 75.0% rise in digital revenue to €670.3 million (representing 56.3% of total sales compared with 47.2% one year earlier)

PRI[3] surges 87.4% to €318.5 million (representing 26.7% of total sales compared with 20.9% one year earlier)

  • Confirmation of the strongly recurring profile of the Group’s business (nine-month period)
    • Back-catalogue sales up 31.5% to €608.8 million

TARGETS[4] FOR FULL-YEAR 2017-18 AND 2018-19 CONFIRMED

PARIS – February 12, 2018 – Today, Ubisoft released its sales figures for the third fiscal quarter of 2017-18, ending on December 31, 2017.

Yves Guillemot, Co-Founder and Chief Executive Officer, stated: 

“Our very strong third-quarter performance highlights two areas in which we have made major strides. First, our games’ live operations are making steady progress. This has fueled momentum for digital and back catalogue, which both hit record highs this quarter. Second, the increasingly recurring profile of our business has had a very positive impact on our new releases. By taking additional time to develop our games, we have been able to deliver three top-quality titles since August, including the grand return of Assassin’s Creed.”

“These successes demonstrate that our differentiating strategy of combining long-term investment in our talented teams and our multi-studios collaboration model is paying off. This strategy enables us to deliver high-quality blockbusters while keeping our communities engaged through regular major updates. As a result, Ubisoft is perfectly positioned to reach its targets for fiscal 2017-18 and 2018-19.”

Sales

Sales for the third quarter of fiscal 2017-18 amounted to €725.0 million, outstripping the target of around €700.0 million that was recently revised upwards from an original target of around €630.0 million, and up 36.8% (41.0% at constant exchange rates) compared with €529.9 million for third-quarter 2016-17. For the first nine months of fiscal 2017-18, sales totaled €1,191.2 million, up 46.8% (50.1% at constant exchange rates) on the €811.3 million recorded in the corresponding prior-year period.

Outlook

Full-year 2017-18

Ubisoft is standing by its targets[5] for full-year 2017-18, namely sales of around €1,640.0 million and non-IFRS operating income of approximately €270.0 million.

Sales for the fourth quarter of 2017-18

Ubisoft expects fourth-quarter 2017-18 sales to come in at approximately €449.0 million, compared with €648.6 million for the same period of 2016-17 (which saw the releases of Ghost Recon Wildlands and For HonorTM). Fourth-quarter 2017 will see the following main releases:

  • Far Cry® 5 for PC, Playstation®4 and Xbox One™
  • Assassin’s Creed Origins – Discovery Tour, for PC, Playstation®4 and Xbox One™
  • DLC for Assassin’s Creed Origins: The Hidden Ones and The Curse of the Pharaohs, for PC, Playstation®4 and Xbox One™
  • DLC for Rainbow Six Siege: Operation Chimera, for PC, Playstation®4 and Xbox One™
  • For Honor Season 5: Age of Wolves,  for PC, Playstation®4 and Xbox One™
  • DLC for South ParkTM: The Fractured But Whole – From Dusk till Casa Bonita, for PC, Playstation®4 and Xbox One™

Targets[6] for 2018-19

Ubisoft is standing by its targets for fiscal 2018-19, namely sales of around €2,100.0 million, non-IFRS operating income of around €440.0 million and free cash flow of approximately €300.0 million. As announced on December 7, 2017 when Ubisoft updated its targets for fiscal 2017-18, the company is updating today the assumptions underlying its revenue target for fiscal 2018-19:

  • 23 million units expected for 4 AAA releases (versus 28 million units as previously announced) to factor in the arrival of The Crew® 2 and the postponement of an unannounced franchise to beyond the fiscal year, as well as a lower exposure to new releases thanks to a strong increase of the back-catalogue, expected to represent more than 45% of total sales.
  • Digital revenue expected to account for around 60% of total sales (compared with the previous target of over 55%) and PRI still expected at above 25% of total sales.

Recent significant events

Partnership between Tencent and Ketchapp: Ubisoft and Tencent have announced a strategic partnership to bring a selection of Ketchapp games to Tencent’s newly-launched mobile Weixin mini-game application. Weixin is WeChat’s mirror application for Mainland China users, with 980 million active user accounts (MAU).

€500 million bond issue: Ubisoft has successfully placed €500 million worth of five-year bonds maturing in January 2023 and carrying an annual coupon of 1.289%. The order book reached over €2.2 billion and was more than 4.4 times oversubscribed. The net proceeds from the issue will be used for general corporate purposes, including to refinance certain existing debt. The bond offering has enabled Ubisoft to extend its debt maturity profile at a more attractive cost compared with existing financial instruments, and to further diversify its debt investor base.

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