Ubisoft 2012 Annual Report Download - page 39

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Management Report
2012
34
Whether in the organization of its teams or ongoing research into improving development processes,
Ubisoft relies on the efficiency of its commercial expertise and synergies between its studios in order
to anticipate these risks and alert the management teams as necessary.
1.7.1.4 RISKS ASSOCIATED WITH RECRUITING AND RETAINING TALENTED STAFF
The Group’s success largely depends on the talent and skills of its production and marketing teams in
a highly competitive international market. If the Group were no longer able to attract and retain new
talents, or were no longer capable of retaining or motivating its key employees, the Company’s growth
prospects and financial position could be affected.
The Company follows an active policy of recruitment, training and retention through the following
initiatives in particular:
Company/university collaboration: Strong relationships with the main universities in the various
countries where the Group operates,
The addition of tools and forums to encourage skills sharing,
Implementation of various high-level training programs for core production activities.
All of the programs established by Human Resources at a local and international level are first and
foremost designed to attract, train, retain and motivate employees with strong technical and/or
managerial skills: Development opportunities, share purchase plans, stock option plans, personal
development plans etc.
1.7.1.5 RISKS ASSOCIATED WITH THE ACQUISITION AND INTEGRATION OF NEW
ENTITIES
The Company has an international expansion policy, regularly reflected in the opening and acquisition
of production studios in new territories. The integration of these studios is critical for the Company’s
success in order to meet future growth targets.
In order to ensure that these new entities are integrated successfully, the Company has put in place a
number of solutions to support the teams. Similarly, the Company continues to develop the skills of its
administrative teams in order to limit financial, tax or legal risks.
A sound financial structure for the target Company (net financial surplus and the available equity) is
expected to minimize these risks.
Nevertheless, the following risks could arise:
Dilution of the current shareholder structure as a result of an acquisition paid in shares,
Creation of significant long-term debt,
Potential losses that could have a negative impact on profitability,
Provisioning for goodwill or other intangible assets.
The potential loss of key employees at the target Company could have a negative impact on financial
performance. However, to date, Ubisoft has always proven capable of integrating acquired companies
into the Group.
1.7.2 LEGAL RISKS
1.7.2.1 LAWSUITS – LEGAL PROCEEDINGS AND ARBITRATION
There are no government, legal or arbitration proceedings pending that are likely to have or that, over
the past 12 months, have had a material impact on the financial position or profitability of the Company
and/or the Group.