Ubisoft Entertainment: Rapport Financier Semestriel 2019-20

Key insights

7 takeaways

01
Net bookings for the first half of fiscal year 2019-20 fell 11.4% to €661.1 million, while non-IFRS operating income dropped significantly to €6.9 million from €110.2 million the previous year.See it on page 4
02
Underperformance of Ghost Recon Breakpoint and The Division 2, combined with weakening back-catalog sales, forced a downward revision of financial guidance and the delay of major titles to fiscal year 2020-21.See it on page 39
03
Operational costs increased due to a workforce expansion to 17,220 employees and higher research and development spending.See it on page 25
04
Ubisoft acquired a 70% stake in Green Panda Games for €36.7 million to accelerate strategic growth within the mobile gaming sector.See it on page 20
05
The company issued €500 million in OCEANE bonds to refinance existing debt and maintain liquidity.See it on page 35
06
Financial reporting was impacted by the mandatory adoption of IFRS 16, which required the recognition of new right-of-use assets and lease liabilities.See it on page 19
07
Established titles including Rainbow Six Siege and Assassin’s Creed Odyssey continued to maintain strong player engagement metrics despite broader financial headwinds.See it on page 3

Summary

Ubisoft experienced a challenging first half of the 2019-20 fiscal year, characterized by a notable decline in financial performance. Net bookings fell by 11.4% to €661.1 million, while non-IFRS operating income plummeted to €6.9 million from €110.2 million in the prior year. This downturn was primarily driven by the underperformance of key titles such as Ghost Recon Breakpoint and The Division 2, alongside a softening in back-catalog sales. Consequently, the company revised its financial guidance downward and opted to delay several major titles into the 2020-21 fiscal year to ensure higher quality and long-term engagement.

Operational costs rose during this period, fueled by a workforce expansion to 17,220 employees and increased investments in research and development. The company also pursued strategic growth in the mobile sector through the acquisition of a 70% stake in Green Panda Games for €36.7 million. Financial stability was maintained through active capital management, including the issuance of €500 million in OCEANE bonds to refinance existing debt. The balance sheet was further impacted by the mandatory adoption of the IFRS 16 accounting standard, which necessitated the recognition of new right-of-use assets and lease liabilities.

Despite these headwinds, the company maintained strong engagement metrics for established titles like Rainbow Six Siege and Assassin’s Creed Odyssey. Management remains focused on long-term value creation, supported by a stable liquidity position and compliance with all financial covenants. Independent auditors KPMG and Mazars confirmed that the consolidated financial statements provide a fair view of the group's position, noting that the results reflect both the current operational difficulties and the structural adjustments required by updated international accounting standards.