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Ubisoft Entertainment SAand Subsidiaries Consolidated Income Statements For the Years Ended March 31, (In thousands of euros) Actual 2019 Sales 1,845,522 Cost of sales (328,972)

Ubisoft Entertainment SAand Subsidiaries

Consolidated Income Statements

For the Years Ended March 31,

(In thousands of euros) Actual

2019

Sales 1,845,522

Cost of sales (328,972)

Gross profit 1,516,550

Cost and Expenses

R&D expenses (740,969)

Marketing expenses (410,070)

Administrative and IT expenses (157,295)

Operating income from continuing operations 208,216

Other non-current operating income and expenses (49,231)

Operating income 158,985

Interest on borrowings (20,920)

Income from cash 2,780

Net borrowing cost (18,140)

Result from foreign-exchange operations (5,311)

Other financial expenses (23,941)

Other financial income 36,515

Net financial income (10,877)

Income pre-tax 148,108

Share in profit of associates 294

Total income tax (48,417)

Income for the period 99,985

Ubisoft Entertainment SAand Subsidiaries

Consolidated Balance Sheets

March 31,

(In thousands of euros)

2019

ASSETS

Goodwill 290,721

Other intangible assets 882,925

Property, plant and equipment 159,958

Investments in associates 7

Non-current financial assets 8,660

Deferred tax assets 168,443

Non-current assets 1,510,714

Inventory 31,880

Trade receivables 476,641

Other receivables 179,982

Current financial assets 184

Current tax assets 39,555

Cash and cash equivalents 1,049,803

Current assets 1,778,045

Total assets 3,288,759

LIABILITIES AND EQUITY

Share capital 8,650

Premiums 335,759

Consolidated reserves 475,624

Consolidated earnings 99,985

Total equity 920,018

Provisions 2,469

Employee benefits 14,382

Non-current financial liabilities 890,366

Deferred tax liabilities 127,902

Non-current liabilities 1,035,119

Current financial liabilities 453,299

Trade payables 188,787

Other liabilities 664,618

Current tax liabilities 26,918

Current liabilities 1,333,622

Total liabilities and equity 3,288,759

0

Ubisoft Entertainment SAand Subsidiaries

Consolidated Cash Flow Statements

For the Years Ended March 31,

(In thousands of euros)

2019

Cash flows from operating activities

Consolidated earnings 99,985

Share in profit of associates (294)

Net amortization and depreciation on PP&E 584,259

Net provisions 22,039

Cost of stock-based-compensation 54,686

Gains/losses on disposals 261

Other income and expenses calculated (5,403)

Tax expense 48,418

Cash flows from operating activities 803,951

Inventory (31,326)

Customers (trade receivables) (18,031)

Other assets (excluding deferred tax assets) 28,408

Suppliers (trade payables) 3,181

Other liabilities (excluding deferred tax liabilities) 6,389

Deferred income and prepaid expenses 248,384

Change in WCR linked to operating activities 237,005

Current tax (68,582)

Total cash flow generated by (used in) operting activities 972,374

Cash flows from investment activities

Payments for internal and external developments (587,699)

Payments for other intangible assets and PP&E (74,402)

Proceeds from the disposal of intangible assets and PP&E 25

Payments for the acquisition of financial assets (43,816)

Proceeds from Gameloft disposals 0

Security deposit CACIB 100,000

Refund of loans and other financial assets 42,057

Changes in scope (84,327)

Cash generated by (used in) investing activities (648,162)

Cash flow from financing activities

New finance leases contracted 20

New borrowings 604,985

Accrued interest (1,324)

Repayment of finance leases (1,300)

Repayment of borrowings (572,177)

Funds received from shareholders in capital increases 131,910

Sales/purchases of own shares (201,899)

Associated current accounts 0

Cash generated by (used in) financing activities (39,785)

Net change in cash and cash equivalents 284,427

Cash and cash equivalents at the beginning of the period 583,354

Foreign exchange losses/gains 10,831

Cash and cash equivalents at the end of the period 878,612

Operating Ratios

Accounts Receivable Turnover (Days)

Average A/R, Net * 365 166,479,055

Sales 1,845,522

A/R Turnover 90

Inventory Turnover (Days)

Average Inventory * 365 9,516,280

Cost of Goods Sold 328,972

Inventory Turnover 29

Gross Operating Cycle (Days)

Accounts Receivable Turnover + Inventory Turnover

Gross Operating Cycle 119.13

Accounts Payable Turnover

Average A/P * 365 66,685,500

Purchases (=End Inv+Product Cost-Beg Inv) 340,588

A/P Turnover 196

Deferred Revenue Turnover

Average Deferred Revenues * 365 180,045,923

Revenues 1,845,522

Deferred Revenue Turnover 98

Net Operating Cycle

Gross Operating Cycle - A/P Turnover - Deferred Revenue Turnover

Net Operating Cycle (174.2)

Trend Analysis 2019

Sales Growth Rate 2017-2024

(1.05)

Profit Margin

Net Income + (Interest * (1 - Tax Rate)) + Minority Interest 114,211

Sales 1,845,522

2017: 7.95% 6.19%

2018: 8.74%

Asset Turnover

Sales 1,845,522

Average Total Assets 3,406,194

2017: 0.6343 0.5418

2018: 0.6430

Return on Assets 54.18%

Asset Turnover * Profit Margin 3.35%

2017: 5.04%

2018: 5.62%

Net Operating Cycle (174)

Gross Operating Cycle - A/P Turnover - Deferred Rev Turnover

2017: -174.4

2018: -162.4

Total Debt to Equity

Total Debt 1,333,622

Equity 920,018

1.45

Free Cash Flow

CF from Operating

PPE

Prior Year PPE

Amortization Depreciation on PPE

Add back Interest

FCF

Terminal Value 119,832

WACC 50.91%

Growth Rate 11.30%

Estimate of the per-share value of the common stock to Ubisoft's based on 2019 numbers

Is your estimate higher or lower than the market price? What factors are likely contributing to the difference?

If you were an equity analyst, would you recommend a Buy, Hold or Sell on Ubisoft stock and why?

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