EU TECHNOLOGY: Ubisoft Appoints Strategic Advisors; Lowers Q3 Guidance
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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Historical bullets
SILVER TECHS: Holding On To Its Recent Gains
- RES 4: $35.226 - 61.8% of the 2011 - 2020 major bear leg
- RES 3: $35.167 - 2.00 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 2: $33.125/34.903 - High Nov 1 / High Oct 23 and the bull trigger
- RES 1: $32.283 - High Dec 9
- PRICE: 31.693 @ 08:15 GMT Dec 11
- SUP 1: $29.642 - Low Nov 28
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
Silver is holding on to its recent gains. Despite a recovery in price, the bear cycle that started Oct 23 remains in play and gains are considered corrective - for now. Price has recently traded through a trendline drawn from the Aug 8 low. A resumption of the bear leg would open $28.446, a Fibonacci retracement. The 50-day EMA, at $31.209, has been pierced. A continuation higher would expose $33.125, the Nov 1 high.
BONDS: A Little Firmer On CNY Depreciation Risk
Core global FI markets have rallied a little after RTRS sources flagged the potential for a weaker CNY going forwards (see earlier bullet for greater details).
- Such a step would remove a little bit of inflationary worry from a macro perspective, promoting the initial market reaction.
- European paper leads the move given economic linkages with China.
- Meanwhile, Tsys lag. This is presumably with markets looking for tit-for-tat style tariffs between the U.S. & China and Trump’s preference for a move away from Chinese goods, watering down the feedthrough into U.S. inflation from any future CNY devaluation.
- 10-Year Tsys 1bp wider vs. German peers as a result, although moves are limited in the broader scheme of things (with bonds subsequently fading from initial reaction highs), given the prevailing inflationary risks presented by the potential for trade war 2.0.
USDCAD TECHS: Bulls Remain In The Driver's Seat
- RES 4: 1.4359 2.0% 10-dma envelope
- RES 3: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4196 1.764 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4195 High Dec 10
- PRICE: 1.4186 @ 08:07 GMT Dec 11
- SUP 1: 1.4041/3928 20-day EMA / Low Nov 25 and a key support
- SUP 2: 1.3902 50-day EMA
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend condition in USDCAD remains bullish and Tuesday’s gains have reinforced this theme. The pair has pierced resistance at 1.4178, the Nov 26 high, to highlight a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Sights are on 1.4196 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4041, the 20-day EMA.
