Company Overview - Ubisoft is recognized as one of the leading game developers globally, known for successful franchises such as Assassin's Creed, Far Cry, Tom Clancy, Anno, and Just Dance [1] Investment Focus - The investment strategy highlighted focuses on acquiring companies with a significant margin of safety, specifically those trading below their intrinsic value [1]

Ubisoft Strategic Update Call Summary Company Overview - **Company**: Ubisoft - **Industry**: Video Game Development Key Points Organizational and Operational Reset - Ubisoft announced a major organizational, operational, and portfolio reset aimed at reclaiming creative leadership and restoring sustainable growth and cash generation [2][5] - The reset is structured around three core pillars: 1. A new operating model with five specialized creative houses 2. A refocused portfolio with a revised three-year roadmap 3. Accelerated cost reduction initiatives to improve structural efficiency [2][4] New Operating Model - The new model will consist of five creative houses, each responsible for specific game genres and brands, enhancing accountability and decision-making speed [6][8] - Each creative house will have full financial ownership and accountability for its economic performance, focusing on long-term value creation [10][8] - The first creative house, Vantage Studios, aims to scale established franchises like Assassin's Creed and Far Cry into annual billion-dollar brands [9] - Other creative houses will focus on competitive shooters, live experiences, immersive fantasy worlds, and casual games [9] Portfolio Refocus - Ubisoft will discontinue six games that do not meet new quality expectations, including the Prince of Persia: The Sands of Time Remake and four unannounced titles [15] - Additional development time will be allocated to seven games to ensure quality benchmarks are met, delaying one unannounced title from fiscal year 2026 to 2027 [15] Cost Reduction Initiatives - The current cost reduction program aims for at least €100 million in fixed cost savings by March 2026, with a new target to reduce fixed costs by an additional €200 million over the next two years [17] - Total fixed cost reductions are expected to reach around €500 million by fiscal year 2023, bringing fixed costs to approximately €1.25 billion by March 2028 [17] Financial Guidance - Net bookings for fiscal year 2026 are expected to be around €1.5 billion, reflecting a €330 million gross margin reduction due to changes in the release pipeline [18] - Non-IFRS EBIT is projected at around €1 billion, influenced by transformation-related decisions leading to a one-off accelerated depreciation of approximately €650 million [18] - Free cash flow is anticipated to be between €400 million and €500 million, with non-IFRS net debt expected to be between €150 million and €250 million by year-end fiscal year 2026 [19] Market Position and Future Outlook - The reset is expected to have significant short-term financial impacts, particularly in fiscal years 2026 and 2027, but aims to position Ubisoft for sustainable growth and robust cash generation in the long term [20][21] - The company is committed to returning to positive free cash flow within the next three years, with a focus on exceptional content quality [27][24] Additional Insights - The competitive landscape in the AAA gaming market is becoming increasingly selective, with rising development costs and challenges in creating new brands [2][4] - Ubisoft's strategy includes a focus on partnerships, with no fundamental changes in approach, but rather a realignment with the new organizational structure [31] This summary encapsulates the key points from Ubisoft's strategic update call, highlighting the company's efforts to adapt to market challenges and position itself for future growth.

MAJOR ORGANIZATIONAL, OPERATIONAL AND PORTFOLIO RESET TO RECLAIM CREATIVE LEADERSHIP AND RESTORE SUSTAINABLE GROWTH JANUARY 21, 2026 DISCLAIMER Yves Guillemot, Chairman and Chief Executive Officer In this context Ubisoft announces a major reset to reclaim its creative leadership, regain agility, drive a sharp rebound, and renew with sustainable growth and robust cash generation. This will be delivered through three main pillars: 3 → A new operating model; → A refocused portfolio with a meaningfully revised ...

UBISOFT ANNOUNCES A MAJOR ORGANIZATIONAL, OPERATIONAL AND PORTFOLIO RESET TO RECLAIM CREATIVE LEADERSHIP AND RESTORE SUSTAINABLE GROWTH New Operating Model centered around 5 specialized Creative Houses to support Ubisoft’s strategic focusRefocused portfolio with a meaningfully reworked roadmap leading to significantly revised FY26 financialsAcceleration of cost reduction initiatives to rightsize the new organization and improve structural efficiency Paris, January 21, 2026 – Today, Ubisoft announces a major ...

Company Overview - UbiSoft Entertainment is a global video game developer and publisher, known for creating and distributing interactive entertainment across multiple platforms, including consoles, PCs, and mobile devices [2] - The company's portfolio includes flagship franchises such as Assassin's Creed, Far Cry, Tom Clancy's Rainbow Six, and Watch Dogs [2] - Founded in 1986 in Carentoir, France, UbiSoft has grown into one of the largest independent game publishers worldwide [3] Financial Performance - The company's 50-day moving average price is $1.50, while the 200-day moving average price is $1.89 [1] - UbiSoft has a debt-to-equity ratio of 1.10, a quick ratio of 1.17, and a current ratio of 1.18 [1] - Shares of UbiSoft Entertainment Inc. fell 3.7% during mid-day trading, with the stock trading as low as $1.46 and last trading at $1.46 [5] - The trading volume during mid-day was 1,861 shares, a decline of 99% from the average session volume of 247,258 shares [5] - The stock had previously closed at $1.5165 [5]

Company Overview - Ubisoft Entertainment shares surged to their highest in almost a year following a deal with Tencent Holdings to invest in Vantage Studios, the unit behind major franchises like Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six [3][4] - The €1.16 billion ($1.3 billion) cash investment will be utilized to reduce Ubisoft's debt and marks a significant milestone in the company's transformation [4] Investment Details - The investment values Vantage Studios at a pre-money enterprise value of €3.8 billion, with Tencent acquiring a 26.32% economic interest in the studio, which remains under Ubisoft's exclusive control [4][5] - Following the announcement, Ubisoft's shares on the Paris stock exchange increased by 9.04%, reaching EUR 7.67 [6]

Company Overview - Ubisoft Entertainment shares surged to their highest in almost a year following a deal with Tencent Holdings to invest in Vantage Studios, the unit behind major franchises like Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six [3][4] - The €1.16 billion ($1.3 billion) cash investment will be utilized to reduce Ubisoft's debt and marks a significant milestone in the company's transformation [4] Investment Details - The investment values Vantage Studios at a pre-money enterprise value of €3.8 billion, with Tencent acquiring a 26.32% economic interest in the studio, which remains under Ubisoft's exclusive control [4][5] - Following the investment, Ubisoft's shares on the Paris stock exchange increased by 9.04%, reaching EUR 7.67 [6]

Core Insights - Ubisoft has completed Tencent's investment in Vantage Studios, which is a new unit focused on major franchises like Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six [1] Company Developments - The establishment of Vantage Studios indicates Ubisoft's strategy to leverage its popular franchises for further growth and development in the gaming industry [1] - Tencent's investment reflects the increasing collaboration between major gaming companies and investors to enhance content creation and distribution [1]

Core Insights - Ubisoft has completed a strategic investment from Tencent, securing €1.16 billion for its subsidiary Vantage Studios, which is valued at a pre-money enterprise value of €3.8 billion, marking a significant milestone in Ubisoft's transformation [1][5]. Group Structure and Leadership - Vantage Studios, operational since October 1, 2025, is focused on autonomy, player centricity, and aims to accelerate the growth of Ubisoft's largest franchises, including Assassin's Creed, Far Cry, and Rainbow Six [2][5]. - The studio is led by co-CEOs Charlie Guillemot and Christophe Derennes, supported by a dedicated leadership team and an advisory committee [2]. Financial Implications - The investment will help deleverage Ubisoft's consolidated non-IFRS net debt and provide financial flexibility for strategic transformations and selected investments across the group [3][5]. - Tencent now holds a 26.32% economic interest in Vantage Studios, which remains under Ubisoft's control [4]. Shareholders' Agreement - The Shareholders' Agreement includes minority protection rights for Tencent, a five-year lock-up on Vantage Studios' securities, and stipulations ensuring Ubisoft maintains majority voting rights for at least two years [6]. - In the event of a change of control of Ubisoft, there are provisions for call and put options regarding Tencent's interest in Vantage Studios, with specific pricing mechanisms based on fair market value [7].

Core Insights - Ubisoft has completed Tencent's strategic investment in Vantage Studios, securing a €1.16 billion cash investment, which values Vantage Studios at a pre-money enterprise value of €3.8 billion, marking a significant milestone in Ubisoft's transformation [1][5][4] Group 1: Investment Details - The investment from Tencent will help deleverage Ubisoft's balance sheet and support selected investments across the Group, providing enhanced financial flexibility for strategic transformation [3][5] - Tencent now holds a 26.32% economic interest in Vantage Studios, which remains under Ubisoft's exclusive control [4][5] Group 2: Vantage Studios Operations - Vantage Studios became fully operational on October 1, 2025, focusing on accelerating the growth of Ubisoft's three largest franchises: Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six [2][5] - The studio operates under principles of autonomy, focus, and player centricity, with a dedicated leadership team [2][5] Group 3: Shareholders' Agreement - The Shareholders' Agreement includes minority protection rights for Tencent, a five-year lock-up on Vantage Studios' securities held by Tencent, and stipulations ensuring Ubisoft maintains majority control for at least two years [6][7] - In the event of a change of control of Ubisoft, there are call and put options related to Tencent's interest in Vantage Studios, with specific pricing mechanisms based on fair market value [7]