January 10, 2025 08:17 GMT
TECHNOLOGY: Ubisoft Appoints Strategic Advisors; Lowers Q3 Guidance
TECHNOLOGY
UBIFP Unrated
Reuters reported in early December that the Guillemot family been in talks with Tencent and other investors about funding a management-led buyout though Tencent were reportedly undecided. Ubisoft 27s feature a CoC put at par though this excludes the ‘existing concert’ (i.e. the Guillemot Brothers). No colour provided here on what type of deals are being explored.
- “Ubisoft announced today that it has appointed leading advisors to review and pursue various transformational strategic and capitalistic options to extract the best value for stakeholders.”
- “We are convinced that there are several potential paths to generate value from Ubisoft’s assets and franchises”
- “Ubisoft will inform the market in accordance with applicable regulations if and once a transaction materializes.”
- Assassin’s Creed Shadows development extended by a month (new release 20 March).
- Q3 net bookings seen at EUR 300mn (prior view EUR 380mn, BBG consensus EUR 380mn) on weak sales of Star Wars Outlaws. FY bookings seen marginally lower at EUR 1.9bn in line with BBG cons (prior view EUR 1.95bn). Break-even op income and FCF view re-iterated.
- Aiming for EUR 200mn in fixed cost reductions by FY26 vs. FY23. Note H124 YoY savings were EUR 200mn on an annualised basis and management had implied a run rate of EUR ~210mn.
- Management noted cash of EUR 800mn, down from EUR 933mn in Sept “driven by the reimbursement of debt” with EUR 260mn debt repayments by the end of this calendar year.
- When asked about returning to FCF generation in the next financial year they responded that they “expect to come back to cash generation in the coming years.”
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