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UBISOFT Annual Report Flipbook PDF
Annual Report redesign for Typography II
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2018
Registration Document
and Annual Report
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CONTENTS
MESSAGE FROM THE CHAIRMAN KEY FIGURES 1. Quarterly and annual consolidated sales 2. Sales by platform 3. Sales by Geographic Region
GROUP PRESENTATION 1. Financial Year Highlights 2. History 3. Simplified Organization Chart
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MESSAGE FROM THE CHAIRMAN Dear Shareholders and Partners, U
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bisoft performed extremely well across the board during the previous financial year. Following the comeback of Assassin’s Creed® Origins, the success of Mario + Rabbids® Kingdom Battle and the continued excellent performance of multiplayer games Rainbow Six® Siege, The Division® and Ghost Recon® Wildlands, our last release of the year, Far Cry® 5, became the second most successful launch in the Company’s entire history. Players, who are the key to our strategy, have hailed of the quality of our games and our ever-growing engagement with the communities. These results reflect the determination of the Ubisoft teams to continuously improve player experience post-release.
of Assassin’s Creed® Origins and Far Cry 5. This performance is the result of our long term strategy based on the creation and ownership of our brands and on continued investment in our teams and their skills. We have established an organization for our production on which we can rely to deliver both high quality games and solid online services. We are building a Group that is increasingly adaptable and responsive, relying on the sustained and acknowledged commitment of player communities, which are real partners for our teams. These differentiating factors will be major assets for Ubisoft in the years to come, enabling it to seize all opportunities created by future changes in the industry.
Accordingly, we exceeded our objectives regarding sales, up by 19% at €1,732 million, and non-IFRS operating profit, which reached a record level of €300 million. The Group’s digital transformation continues to grow at a pace exceeding our expectations and now represents 58% of our total sales. This success has resulted in much greater visibility than in the past, reduced our dependence on new releases and has had a very positive impact on our profitability. Our games now benefit from longer development periods, which have had a positive impact on their quality and financial contribution, as demonstrated by the success
The short and medium terms are indeed exciting both in terms of growth potential and the increase in our profi tability. Opportunities abound: from our growth capacity in the digital realm to our potential in the promising PC and mobile segments, particularly in China, without forgetting our progress in esports. In the longer term, new types of games, particularly those involving streaming, should signifi cantly increase our addressable market and permit our flagship brands to become playable on all media and, potentially, accessible to half of the world’s population. Through our investments in Ubisoft Club, our online services
platform, and in artificial intelligence, which is undergoing exponential growth, we will be able to adapt game experiences according to player profiles, with the objective of providing ever richer experiences. To develop our expertise in these areas of excellence, we are opening new studios in regions that offer both special access to universities on the cutting edge of these fields and to a dynamic talent pool. This strategy is possible thanks to our multi-studio organization, which facilitates a collaboration among our different teams that is unparalleled in the industry, with particular attention paid to the sharing of knowledge, expertise and technologies. I would also like to once again note the change in our stock ownership over the past year. It has specifi cally resulted in two new long term shareholders who are true experts in the video game industry and the world of technology. This positive change was made possible by the excellent execution of our strategy and the decisive support of our talent pool, our players and our shareholders. I would like to extend my warmest thanks to each of you.
Yves Guillemot
Chairman and Chief Executive Officer
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KEY FIGURES QUARTERLY AND ANNUAL CONSOLIDATED SALES SALES BY PLATFORM
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SALES BY GEOGRAPHIC REGION
QUARTERLY AND ANNUAL CONSOLIDATED SALES
2017/2018
SALES (in € millions)
2017/2018 2016/2017
1st quarter
202
139
2nd quarter
264
142
3rd quarter
725
530
4th quarter
541
649
FINANCIAL YEAR TOTAL
1,732
1,460
2016/2017
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SALES BY PLATFORM
2017/2018
PlayStation®4
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XBOX One™
2016/2017
PC
NINTENDO SWITCH™
XBOX 360/PS®3/Wii™/Wii U™
Others*
SALES BY GEOGRAPHIC REGION
Europe (in € millions) 2017/2018
635
2016/2017
559
TOTAL
1,194
World (in € millions)
2017/2018
2017/2018
1,732
2016/2017
1,460
TOTAL
3,124
2016/2017
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GROUP PRESENTATION FINANCIAL YEAR HIGHLIGHTS HISTORY
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SIMPLIFIED ORGANIZATION CHART
FINANCIAL YEAR HIGHLIGHTS 2017 Ubisoft partners with Tencent and Playcrab to develop and publish a new mobile game Ubisoft announced a partnership with Tencent to develop and publish a new mobile game in China. Tencent, the internet services leader in China, published Might and Magic® Heroes/ Era of Chaos®, a new mobile game license developed exclusively for China and operating a traditional Ubisoft franchise. Developed by Playcrab, an Ourpalm subsidiary specializing in action and strategy games, this new mobile game, available in China in iOS and Android stores since June 2017, has already generated more than €100 million in gross income in China.
Announcement of the opening of two new studios in Berlin and Bordeaux Ubisoft increased its creative capacity in Europe with the opening of studios in Berlin and Bordeaux, which will take part in the development of AAA games on some of the largest Ubisoft franchises.
Extension of the partnership with the government of Quebec until 2027 and Announcement of the opening of a creation of the studio in Saguenay studio in Stockholm
In addition to the announcement of Ubisoft’s expansion in Quebec, which calls for an additional investment of CAD 780 million and the creation of 1,000 new jobs by 2027, the Group has announced the opening of a new studio dedicated to online development in Saguenay.
Support of Ubisoft’s strategy and management by its shareholders The shareholders expressed overwhelming support for Ubisoft’s strategy and management, voting in favor of all of the resolutions on the agenda at the Ordinary General Meeting. The shareholders also approved the resolutions of the Extraordinary General Meeting, particularly the possibility, for employees, based on the decision of the Board of Directors, to participate in capital increases. Due to the automatic abstention of Vivendi, as in 2016, resolution 31 regarding the compensation of the talent pool was not approved.
Ubisoft opened a studio in Stockholm, Sweden, which will collaborate with the Massive studio on the development of AAA games.
On the strength of the success of the releases and the back catalog, Ubisoft decided to increase the development time of three games In a particularly favorable context for Ubisoft, based on the continued outstanding momentum of its back catalog in November and new releases, Ubisoft announced that three games would receive additional development time. In order to take into account the adjustment in its lineup and the confi rmation of these positive trends, Ubisoft updated its 2017/2018 financial objectives, particularly through an increase in profitability.
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FINANCIAL YEAR HIGHLIGHTS 2018 Partnership between Tencent and Ketchapp Ubisoft and Tencent established a strategic partnership in order to provide a selection of Ketchapp’s games on Weixin minigames, a mobile application launched by Tencent. Weixin is the equivalent of WeChat for Continental China’s population, with 980 million monthly active users (MAUs).
€500 million bond issue Ubisoft successfully completed a bond issue totaling €500 million with a five-year maturity (January 2023) and an annual coupon of 1.289%. The order book exceeded €2.2 billion, i.e. an oversubscription of more than 4.4x
Specializing in Free-to-Play mobile games Ubisoft acquired “1492 Studio”, a game development studio specializing in the creation of Free-to-Play episodic and interactive stories on mobiles.
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Acquisition of Studio Blue Mammoth Games, specializing in multiplayer Free-to-Play games for PCs and PS4 With this acquisition, Ubisoft added Brawlhalla® to its portfolio, the combat game that is currently the most played on Steam, and expanded its digital expertise.
Signature of a strategic partnership with Tencent and disposal of Vivendi’s investment in Ubisoft Ubisoft signed a strategic partnership agreement with Tencent, which will help its brands to grow on the Chinese market and to reach millions of new players on mobiles and PCs. This partnership was signed at the time of the disposal of the entirety of Vivendi’s investment in Ubisoft, thereby permitting equity investments by Tencent and Ontario Teachers’ Pension Plan (“Ontario Teachers’”) as long-term shareholders.
HISTORY 1986: Creation of Ubisoft by the five Guillemot brothers.
1989-1995: International expansion Ubisoft opens its first sales and marketing subsidiaries in the United States, Germany and the United Kingdom and its first internal development studios in France and Romania. Launch in 1995 of Rayman®, Ubisoft’s first major franchise
1996-2001: Organic growth and strategic acquisitions Flotation on the Paris stock exchange in 1996 Opening of new studios including Shanghai in 1996 and Montreal in 1997. Acquisition in 2000 of Red Storm Entertainment (Tom Clancy games) and acquisition in 2001 of Blue Byte Software (The Settlers®). This strategy powered Ubisoft into the world’s top 10 independent publishers in 2001.
2002-2006: A development strategy for owned franchises Launch of Tom Clancy’s Ghost Recon, Prince of Persia® and Tom Clancy’s Splinter Cell®, acquisition of Driver® and Far Cry franchises.
2007/2018: A real creator of franchises and acceleration of the digital business Ubisoft maintains its reputation as a key player. With Assassin’s Creed, Watch Dogs and Tom Clancy’s The Division, Ubisoft claims three of the four most successful new brand launches in the history of video gaming, including Tom Clancy’s The Division in the number one spot (1). Over this period, Ubisoft also developed the Just Dance music game series. The Group is part of a signifi cant movement towards multiplayer franchises with the successful comeback of Tom Clancy’s Ghost Recon and Tom Clancy’s Rainbow Six and creations of For Honor, Steep®, The Crew and Tom Clancy’s The Division. 2012 launch of Ubisoft Club (Uplay), an online (PC and consoles) and distribution (PC) services platform.
Between 2012 and 2018, the percentage of digital sales rose from 11.7% to 58%. Studios opened in Chengdu (China) in 2007, Singapore and Kiev in 2008 and Toronto in 2009. Launch in 2011 of the Motion Pictures business. Opening of studios in the Philippines and in Belgrade in 2016, in Bordeaux, Berlin, Saguenay and Stockholm in 2017, and in India and Ukraine in 2018.
Acquisitions ●●the Tom Clancy name for video games and ancillary products, the Massive Entertainment studio (Sweden) and Pune (India) in 2008. ●●Nadeo studio in 2009. ●●Owlient studio, specializing in Free-toPlay games, and RedLynx, specializing in downloadable games in 2011. ●●THQ Montreal and two specialists in Free-toPlay games: Digital Chocolate (Barcelona) and Future Games of London in 2013. ●●Ivory Tower studio (France) and the assets of Longtail Halifax (Canada) in 2015. ●●the publisher of the Free-to-Play Ketchapp mobile games and the assets of the Leamington studio in 2016. ●●Free-to-Play mobile game Growtopia® in 2017.
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SIMPLIFIED ORGANIZATION CHART VIDEO GAMES PRODUCTION Ubisoft Production Internationale SAS France Ubisoft Paris SAS France Nadéo SAS France Ubisoft Montpellier SAS France Ubisoft Annecy SAS France Ubisoft Création SAS France Ivory Tower SAS France Ivory Art & Design Sarl (1) France Ubisoft Bordeaux SAS France Blue Byte GmbH Germany Ubi Studios SL Spain
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Ubisoft Divertissements Inc. (2) Canada Ubisoft Reflections Ltd (1) United Kingdom Red Storm Entertainment Ltd (1) United Kingdom RedLynx Oy (1) Finland Ubisoft Entertainment Sweden AB Sweden Ubisoft EooD Bulgaria Ubisoft Srl Romania Ubisoft Ukraine LLC Ukraine Ubisoft Doo Beograd Serbia Shanghai Ubi Computer Software Co. Ltd China
Red Storm Entertainment Inc. (1) United States Blue Mammoth Games LLC (1) United States BMG Europe BV (1) Netherlands Ubisoft Singapore Pte Ltd Singapour Ubisoft Entertainment Philippines (4) Philippines Ubisoft Entertainment India Privale Ltd India Ubisoft Toronto Inc. (1) Canada Ubisoft Osaka KK Japan Ubisoft Studios Srl Italy Chengdu Ubi Computer Sofware Co. Ltd China
MOBILE PRODUCTION DISTRIBUTION Ubisoft France SAS France Ubisoft EMEA SAS France Ubi Games SA Switzerland Ubisoft Ltd United Kingdom Ubisoft CRC Ltd (1) United Kingdom Ubisoft Nordic A/S Denmark Ubisoft SA Spain Ubisoft SpA Italy Ubisoft BV Netherlands Ubisoft (4) Belgium Ubisoft Pty Ltd Australia
Ubisoft Ltd Hong Kong Ubisoft KK Japan Ubisoft Divertissements Inc. (2) Canada Ubisoft Editions Musique Inc. Canada Ubisoft Inc United States Ubisoft Entertainment Ltda Brazil Ubisoft GmbH Germany Ubisoft (4) Austria Ubisoft GmbH spółka z ograniczoną (4) Poland Ubisoft Entertainment (4) Korea Ubisoft Games LLC Russia
Ubisoft Paris – Mobile Sarl France 1492 Studio SAS (1) France Ubisoft Sarl Morocco Ubisoft Emirates FZ LLC United Arab Emirates Ubisoft Barcelona Mobile SL (1) Spain
FILM Ubisoft Motion Pictures Sarl France Script Movie Sarl (1) France Ubisoft Motion Pictures Rabbids SAS (1) France Hybride Technologies Inc. (1) Canada Ubisoft L.A. Inc. (1) United States
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REGISTERED OFFICE
Ubisoft Entertainment 107, avenue Henri Fréville 35207 Rennes Cedex 2
BUSINESS ADDRESS
Ubisoft Entertainment 28, rue Armand Carrel 93108 Montreuil-sous-Bois Cedex Tel.: 33 (0)1 48 18 50 00 Fax: 33 (0)1 48 57 07 41
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