Ubisoft - comment

All but the short dated bonds should give up some of their recent gains. Not because the news was so much worse than expected - results were worse, but because bonds had gotten ahead of themselves. H226/Q426 Revenue disappointed even us yesterday, as the company goes through a period of heavily culled projects, and EBITDA was some €50m below expectations, although engagement statistics continued strong (we are wondering about a mix effect here). As expected, the outlook for 2027 remains cash burning, but according to Yves Guillemot, 2028 may already turn cash flow neutral, and 2029 is when it all (must) come together. Ubisoft remains a technical bet on the large cash pile and ability to raise debt ahead of the bonds on the Vantage Studios assets to pay down the ‘27s, a process that is progressing at management’s pace, not the market’s wish.