Ubisoft Entertainment SA Strategic update Transcript

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

Question: Edward Young - Morgan Stanley - Analyst : Good evening and Thank you for taking my questions. The first is on the various transformational strategic and capitalistic options. It's a bit of a vague phrase, if you don't mind me saying. Could you perhaps elaborate on the kind of things you're talking about and perhaps particularly there were press reports of detailed discussions with Tencent that was reported on in December. Should we sort of read that there is now some sort of proposal, which the independent Board members are going to review against other options? Or is that not what you mean by that? Second, the EUR1.9 billion of net bookings includes, as you said, some offset from new partnership opportunities and franchises. I wonder if you can elaborate again what those are a little bit? And particularly, could you quantify the benefits within that number for the year? And then finally, what are the lessons from XDefiant as you think about the development of future free-to-play titles? Thank you.

Question: Edward Young - Morgan Stanley - Analyst : Thank you. I appreciate you don't want to say what the different options are in the first, I can understand that. But could you perhaps say whether there are any concrete courses of action or scenarios that are being considered? Or is this sort of more of an exploratory kind of process? There's obviously been already statements previously about reviewing strategic options in various ways. You updated that in October with the rumors that came out. So what's different about today? It's the appointment of advisers, but are there concrete things they're looking at? Or is it they're looking at several possible thematic options, if you like?

Question: Edward Young - Morgan Stanley - Analyst : Okay, thank you.

Question: Nick Dempsey - Barclays Bank - Analyst : Yeah, good evening. So first of all, just on the reduction in fixed cost base by FY '26, you're now saying you're going to exceed EUR200 million. I think you said that you would do -- that you were already on a run rate to do about EUR210 million when you spoke to us at the second quarter, and that included some benefit from FX. So does this still include the benefit from FX? And if so, should we assume that, that EUR210 million is definitely more? Otherwise, it kind of looks like you're saying the same thing as you did at that point. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 09, 2025 / 5:15PM, UBIP.PA - Ubisoft Entertainment SA Strategic update Just a follow-up on one of your answers on the partnership deals. So I think you said that they were the same order of magnitude as the Q4 number from last year, not the full year number from last year, but you said Q4, I just wanted to check that. And the third one, so we've seen this week that Tencent has been put on the US Department of Defense's Section 1260H list. I want to get that right. Are there any ramifications from that for whether you think Tencent will be allowed to be the majority owner of Ubisoft?

Question: Nick Dempsey - Barclays Bank - Analyst : Okay, thank you.

Question: David Lustberg - BMO Capital Markets - Analyst : Thanks. Two questions, if I can. Maybe to start off on the delay of Assassin's Creed by another month. You talked about incorporating some player feedback. Maybe can you dive in and give some specifics, if possible, what some of that player feedback was? And then secondarily, on the implied guide down for Q3 from, I believe, it was EUR380 million to now EUR300 million. You did call out Star Wars Outlaws and XDefiant. I was curious maybe if you could provide a little bit more color into that EUR80 million driver between those two. Specifically, we obviously saw the XDefiant refunds you guys gave and obviously discontinued the game. So any incremental color there would be super helpful. Thank you guys.

Question: David Lustberg - BMO Capital Markets - Analyst : Got it. Thank you, guys.

Question: Ali Naqvi - HSBC - Analyst : Hi. Thank you for taking the question. Three, if I may. Could you just remind us of your current sort of cash reserves and when the next major debt payment or refinancing is going to be due? And then secondly, in terms of how you get to breakeven free cash flow, given the delay in AC Shadows, is there more that is coming from partnership revenues or some other source? Or how do you get to that given the change in guidance? And then thirdly, just on the advisers, what stage are they at exactly? When do they sort of start work? And when are you expecting to get any sort of initial findings from them to be?

Question: Ali Naqvi - HSBC - Analyst : Got it. And just a quick follow-up. There was that big streaming debtor from last year that still has to come through. Is any of that accelerated? Or is the pace of the payment for that still the same?

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

Question: Benjamin Shelley - UBS Investment Bank - Analyst : Hi, thank you. I've just got two questions. One is, do you expect the business to be free cash flow profitable in the next financial year? And the second is, can you remind us of the upcoming debt obligations Ubisoft has and how you plan to manage the balance sheet in the coming year?

Question: Benjamin Shelley - UBS Investment Bank - Analyst : Thank you.

Question: Nick Dempsey - Barclays Bank - Analyst : I just want to squeeze in another one. When we're thinking about the year to end March '26, can you give us any indication of the number of AAA games that you plan to launch just to give us some reassurance on how we start modeling that year?

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