Ubisoft Updates Its Financial Targets and Games Release Schedule for 2013-14

Key insights

6 takeaways

01
Ubisoft has delayed the release of 'Watch Dogs' and 'The Crew' to the 2014-15 fiscal year to prioritize quality and align with the new console cycle.See it on page 1
02
The company downgraded its 2013-14 sales guidance from a range of €1,420–€1,450 million to a new estimate of €995–€1,045 million.See it on page 1
03
Financial projections for 2013-14 shifted from expected positive operating income to a projected non-IFRS operating loss of €40–€70 million.See it on page 1
04
Management projects a financial rebound with non-IFRS operating income of at least €150 million in 2014-15 and at least €200 million in 2015-16.See it on page 1
05
Second-quarter sales for the 2013-14 fiscal year are expected to exceed €210 million.See it on page 1
06
Ubisoft maintains global operations across 29 countries with distribution in over 55 nations.See it on page 2

Summary

Ubisoft has revised its financial targets and release schedule for the 2013-14 fiscal year, primarily driven by the decision to delay the launch of two major titles, Watch Dogs and The Crew, until the 2014-15 fiscal year. This strategic shift aims to ensure these games meet high quality standards and capitalize on the emerging market momentum surrounding the PlayStation 4 and Xbox One consoles. While these delays negatively impact short-term performance, the company maintains that the move is essential for long-term value creation and the establishment of sustainable, high-performing franchises.

The financial outlook for 2013-14 has been adjusted downward to reflect these changes. Sales projections are now estimated between €995 million and €1,045 million, with a projected non-IFRS operating loss ranging from €40 million to €70 million. This marks a significant departure from previous guidance, which had anticipated sales between €1,420 million and €1,450 million and positive operating income. Despite these immediate losses, the company remains optimistic about future growth, projecting non-IFRS operating income of at least €150 million for 2014-15 and at least €200 million for 2015-16.

Operating globally across 29 countries with sales in over 55 nations, Ubisoft continues to position itself for a rebound in the console market. Management emphasizes that the additional development time will allow for the delivery of superior gaming experiences, ultimately driving record operating income in subsequent fiscal years. The company expects second-quarter sales for 2013-14 to exceed €210 million, with comprehensive first-half earnings results scheduled for release in mid-November 2013.