Ubisoft Annual Report 2011

Key insights

7 takeaways

01
Ubisoft reported a net loss of €152.1 million for the financial year ended March 31, 2011.See it on page 40
02
The company's business model is highly seasonal, with the third quarter accounting for an average of 54% of annual sales over the previous three years.See it on page 31
03
Development delays for major titles like 'Tom Clancy Ghost Recon' and 'Driver' in 2010/2011, combined with underperforming sales for 'Prince of Persia The Forgotten Sands', were identified as key risks to financial results.See it on page 31
04
The workforce in France is highly specialized, with 71.34% of employees holding executive positions and 80.2% employed on permanent open-ended contracts.See it on page 18
05
Ubisoft maintains a strong internal talent pipeline, with 35% of junior employees recruited in France during the 2010/2011 period having previously completed internships at the company.See it on page 18
06
To manage liquidity, the company secured €70 million in new lines of credit in May 2010 and maintains a conservative investment policy, holding only cash UCITS with under three months' maturity.See it on page 105
07
Corporate governance changes included the closure of the internal audit department in 2010, shifting responsibility for internal control processes to regional managers.See it on page 155

Summary

The Ubisoft 2011 Annual Report details a fiscal year defined by strategic restructuring and a pivot toward high-quality internal production. Despite achieving a 19% increase in sales to €1.04 billion, driven by the success of the Assassin’s Creed franchise and casual titles like Just Dance, the company recorded a net loss of €52.1 million. This deficit was primarily attributed to €95.9 million in non-recurring restructuring costs as the organization streamlined its global studio network and shifted its focus toward digital growth and high-definition intellectual property.

Financially, the company maintained a resilient position with a net cash surplus of approximately €99 million and a gross profit margin of 64.8%. To support its long-term strategy, Ubisoft increased capital expenditure in production by 11% to €287 million and acquired Quazal Technologies to enhance its online infrastructure. The report highlights a commitment to operational efficiency, evidenced by the standardization of global accounting systems and the implementation of centralized treasury policies to manage foreign exchange and interest-rate risks.

Corporate governance remained under the significant influence of the Guillemot family, who held approximately 11.2% of share capital and nearly 20% of voting rights. The Board of Directors, led by Yves Guillemot, utilized various financial authorizations to manage capital, including share buyback programs and equity-based incentive plans for employees. Beyond financial performance, the company emphasized corporate social responsibility, investing in technical training for its 6,331 employees and adopting environmental initiatives such as digitizing game manuals and promoting sustainability across its global subsidiaries. Looking forward, the company prioritized navigating a challenging console market through brand development and the expansion of its online gaming capabilities.