BERNSTEIN9June2025SOCIETECENERALEGROUPAleksanderPeterc+33157294525EuropeanTechnology/Softwaressanderpeterc@bernsteinsg.comUbisoftRatingMarket-PerformPriceTargetUBI.FPUbisoft:Aweak FY26 ahead; Tencent deal easesrefinancingconcernsUbisoft reported a somewhat below-consensus FY25 and provided a weak outlook for 1Q26CloseDate9Jun2025and FY26(see ourresults comment). Broadlyaligning with companyguidance, we cut ourFY26200PriceTarget(EUR)9.30ar term, given Ubisoft's weak new release pipeline over the next 12 months.Upside/(Downside)(4)% We cut our valuation of Ubisot by only 79%6 to e9.3/share, as our substantial estimate 52-WekRang23.38/7.76downgadesaepatyoffetyaloveros of apia ACintEow1,442.84flecting Ubisoft's strongly improved balance sheet metrics afterthe C1.16bn cash injectionacuistonof.2596 in anew ntyecompasingDivYieldNAsasins Creed, Rainbow Sik and Far Cr,isketCap(EUR)(M)1,268EV(EUR)(M)2446board the material decrease in Ubisoft bond yields to currently around 5%(vs7919.83.614.5(68.8)value of the remaining100%Ubisoft assets(ex-M)at a negatw quality and their high level of chronic cash burnvestmentImplicationsWe rateUbisoftsharesMarketPerform,withaDCF-based fairvalueat 69.3F26EF25AF26EF25AF27E(0.55)(0.40)0.08AdjustedP/E掌(17.4)(24.1)119.9(0.06)0.25(11.0)FirstPublished: 09 Jun 2025 18:20 UTC Completion Date: 09 Jun 202518:20UTC
NlelsanderPetec+33157294525abesandepeterogbetdlegco9June2025VALUATIONCOMPSTABLEEXHIBIT1:Ubisoft:valuation vs peers and recent share price performanceMuliolesofstockswithFYnotendinginDecerberwerecalendarisedforcomparability purposeUbisgt vspes:lostdos,P/Eand23-26eCAGRAsat06/06/2025Mkt.Cap.CY23-26eCAGREBITEPS(139.2%)Peergroup:SquareEnixJPY779218.0%4.7%ElectronicArtsUSD149.57,29777132SEK119.0018KRU319Take-TwoUSDPeer group median8.3%7.2%UbisoftvsmedianUbisoftvspeers:EV mutiplesAsat06/06/2025EV/EBITDACY250CY27eCY26eCY25eCY26eCY27eUbisof1.2x3.3v24.3xquare Enixlic ArtsRoblox155Peergroupmedian12Ubisoftvsmedian(73.1%Averagepremium/discount（18.7%）Ubisoftvspeers:recentshare priceperformance(allrebased to()Asat06/06/2025Ytd1m12m3m1Y high1Ylov124.4%)(10.8%)(26.8%)(25.2%)(57.3%)(57.5%)45.0%5.4%25.7%106.39ectronic Arts1.5%(11.2%4%29(20.5%
AleksanderPeterc+33157294525aleksanderpeteragbernstelinsg.com9June2025EXHIBIT2:Current Ubisoft multiples vs 10V average 12m-forward multipleFY25eFY26eFY27eFY28eFY29eEV/sales57.5%55.4%-59.1%-61.8%-63.9%49.6%EV/EBITDA42.5%-52.2%-57.5%EV/EBIT140.P/E(adiusted|59.1%-2.5%-50.0%-52.5%55.6%-20.1%4.7%Source: Bloomberghistorical data basedon consensus;Bernstein analysils andestimateoverthe past10yeaUbisoftEentertainment SA:12mfwd EV);sale3.015.020.0Ubisoft Entertainment SA:12m fwd EV/EBITDOAUbisoftEntehtSA:12m fwdEV/EBn11.09.BERNSTEINSOCIETECANERALECROUP
NlelsanderPetec+33157294525abesandepeterogbetdlegco9June2025DETAILSIINVCTOMONEIANDDEIFVANTRECENTRESEARCH15May2025-Ubisoft An underwhelming 10& FY26 quidance,atriskofftutherdowngrades duetoaweak line-upof newreleases27Mar2025-UbisoftTencentbuys a 25%stake in acarve-out ofthreemain franchisesfore1.16bn13Feb 2025-Uhisoft:30 salesin line with reduced auidance cost- cutting plan tracking ahead of schedl121kn...
