Half Year 2025 Ubisoft Entertainment SA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nicolas Langlet - BNP Paribas Exane - Analyst : Hey, everyone. Good afternoon. So I've got 3 questions. First one on the Q4 guidance that you just mentioned. So you do not expect material licensing partnership deals contribution. Can you confirm that? And you said it's going to be lower than last year. I think last year, it was like EUR400 million. Are we talking about half of that or potentially lower? So any color on that would be great. And if you can share any details regarding the type of partner you are dealing with? And yes, that would be helpful. Secondly, on the IP rights for Activision Blizzard Games. So Xbox announced a plan to expand the streaming services Cloud to a lot of new games, including Activision Blizzard Games. So since you own the IP of the Activision Blizzard Game and streaming platform, should we assume you will book revenue as soon as players start to access the Activision games through Cloud or not? And lastly, the Executive Committee review, when do you expect to get the result of that review? Is it 3, 6, 12 months? Any color would be helpful. Thank you.

Question: Nicolas Langlet - BNP Paribas Exane - Analyst : Thank you, Frederick.

Question: Thomas Singlehurst - Citigroup Inc - Analyst : Yes. Thank you. It's Tom here from Citi. Thanks for the presentation. Thanks for the questions. First one, you don't mention XDefiant an awful lot in the release. I apologize if I missed some of the early comments on the call. But the -- I mean how should we think about that? It's obviously tailed off. Is this just another example or another case of there's just not working, the games as a service sort of free-to-play wherein I know Rainbow Six is obviously incredibly successful. But should we chalk XDefiant up as another miss, first question. Secondly, I mean, you're very clear on the review of strategic options. I'm just wondering whether there's -- within that, there is a sort of broader reappraisal of the sort of vertically integrated approach? I mean, we look at, for example, the reductions in staff count, I can see they're real, but your full-time employee base is still whatever it is, 5,000 people, 6,000 people bigger than an EA or Take-Two? I know there are some structural reasons for that. But I'm just interested within that review whether there is a broader reappraisal of the strategy. Or is it just a reappraisal of the execution? And then final question on leverage. I think you were very clear about the covenants and it does look like you're within covenants as far as I can tell. But I suppose there's not a huge amount of headroom. I'm just wondering what the sort of fallback is if for example, Assassin's Creed is delayed or if there are other sort of mishaps across the third and fourth quarters that mean that you don't necessarily reach your billings targets because it feels like it's getting tight, and I guess that's what the equity and credit markets are telling us. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 5:15PM, UBIP.PA - Half Year 2025 Ubisoft Entertainment SA Earnings Call

Question: Thomas Singlehurst - Citigroup Inc - Analyst : Very clear. Thank you very much.

Question: Nick Dempsey - Barclays plc - Analyst : Yeah. Good evening, guys. I've got three questions. So first of all, you mentioned in the release that you might look to sell non-core businesses. Would it be practically possible to sell, for example, one of your smaller AAA franchises? Or would the multi-studio development approach that Ubisoft has always taken make that difficult to kind of sell the whole thing? Second question, just going back to the partnership deals that Nicolas asked about. How much visibility do you have on when those will land? I mean, in this industry, we've seen before that if a potential partner knows that you need their revenue to get over the line on guidance. then they might be able to exploit that situation. So do you have perfect visibility on the timing of when you can assign those deals? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 5:15PM, UBIP.PA - Half Year 2025 Ubisoft Entertainment SA Earnings Call And the third question for FY26. I don't know whether you can give us any indication at all on approximately how many AAA games you might be able to release during that year to help us model?

Question: Nick Dempsey - Barclays plc - Analyst : Thank you.

Question: Ali Naqvi - HSBC - Analyst : Hi. Thank you so much for taking the questions. Just on your comments, Yves, on putting a little bit more time into AC shadows. Is there a risk of that title being delayed or missing its February 14 release date? I mean there's obviously a lot of reports on SAF walkouts and competition of other games coming out at that time. So any comment there would be appreciated. And then just on debt and leverage, what is the next instrument that is due to be refinanced or has to be paid? And does that sort of create any going concern issues from yourselves over the next 12 months? And finally, could you just talk about in terms of working capital, how much more we should expect in the second half of the year to come from that large year-end creditor from last year and into getting to your free cash flow breakeven, please? Thank you.

Question: Ali Naqvi - HSBC - Analyst : Thank you. And maybe just to point out on Shadows. So there's no risk of it being delayed from the mid-February?

Question: Ali Naqvi - HSBC - Analyst : Thank you.