Vivendi Se · EURONEXT:VIV
Vivendi — Investor Presentation (December 2011)
43 slides from Vivendi's investor presentation, December 2011
Slide 1: Investor Presentation November-December 2011
Investor Presentation November-December 2011 IMPORTANT NOTICE: Financial statements unaudited and prepared under IFRS Investors are strongly urged to read the important disclaimer at the end of this presentation
Slide 2: Q3 YTD 2011 results: Executive summary
Q3 YTD 2011 results: Executive summary Strong performance at end September 2011, above H1 trends and our own expectations Solid earnings at end September, benefits from cost management discipline and no impact of the economic slowdown, lead us to significantly raise 2011 Adjusted Net Income guidance
Slide 3: Strong results at end September 2011
Strong results at end September 2011 Revenues: € 21,030 m + 0.8% EBITA: € 4,866 m + 4.2% Adjusted Net Income: € 2,519 m + 13.8% Net Debt: € 13.3 bn as of Sept. 30, 2011 3 Investor Presentation – November-December 2011
Slide 4: Impact of new tax environment in France
Impact of new tax environment in France Recent changes in French tax law Change in the Consolidated Global Profit Tax System (“BMC”) Deduction for tax losses carried forward capped at 60% of taxable income Announced “temporary” increase in income tax rate by 5% to 35.0% vs. 33.33% No change in
Slide 5: Solid increase in EBITA
Solid increase in EBITA Constant Incl. higher restructuring In euro millions - IFRS 9M 2011 9M 2010 Change currency charges (€18m). EBITA up 36% in Q3 2011 at Activision Blizzard 951 686 + 38.6% + 45.7% constant currency Universal Music Group 244 244 - + 1.6% -6.1% excl. non-recurring positive SFR 1
Slide 6: Renewed efforts to cut costs and control operational expenses
In a troubled economic environment, we are making renewed efforts to cut costs and control operational expenses Activision Blizzard: Successful concentration around a reduced number of studios; Restructuring costs of €18m to reduce exposure to low margin and low-potential business = → Positive effec
Slide 7: Adjusted Net Income increases 14% in 9M 2011
Adjusted Net Income increases 14% in 9M 2011 In euro millions - IFRS 9M 2011 9M 2010 Change % Revenues 21,030 20,869 + 161 + 0.8% Incl. disposal of NBC Universal EBITA 4,866 4,670 + 196 + 4.2% for €(145)m Income from equity affiliates (19) 139 - 158 Incl. contractual dividends received from GE at cl
Slide 8: Financial net debt evolution
In euro billions- IFRS Financial net debt evolution Dividends Dividends Net financial December 31, CFFO Interest & tax paid to paid to investments and Buyout of 44% September 30, 2010 after Capex paid and other minorities shareholders other SFR stake 2011 (1.3) (1.1) (8.1) + 3.0 (1.7) + 3.7 (7.8) (1
Slide 9: 2011 outlook further improved for Activision Blizzard
2011 outlook further improved for Activision Blizzard Guidance vs. September 2011 Further improvement in EBITA margin Upgraded EBITA above €850m (vs. EBITA above €800m ) Double digit EBITA margin, despite restructuring charges Confirmed Mobile: Decrease in EBITDA in a tough competitive, tax and
Slide 10: We upgrade FY2011 Adjusted Net Income guidance by €200 million
We upgrade FY2011 Adjusted Net Income guidance by €200 million We now expect ANI > €2,850m > €3,000m > €2,850m > €2,548m* -€350m +€200m Guidance March 2011 Guidance May 2011 Impact of recent changes Better Guidance Nov. 2011 in French tax law performance Before SFR deal ** After SFR deal ** We
Slide 11: UMG agrees to purchase EMI Recorded Music for £1.2 billion
UMG agrees to purchase EMI Recorded Music for £1.2 billion at a likely inflexion point in the music industry cycle Acquire a tremendous catalogue and superstar acts, complementary to UMG in genres and geographies Attractive valuation with significant synergy potential EBITDA multiple of 7x and bel
Slide 12: Transaction Price
Transaction Price Enterprise value of £1.2 billion 7x EBITDA*, and less than 5x EBITDA* post full synergies of over £100 million per annum Valuation is DCF-based with a 9.5% WACC, a 0% perpetual growth rate, and applying a 35% tax rate Multiple is below assumed price paid for Warner Music Group’
Slide 13: Vivendi delivers consistent earnings growth in a challenging environment
Vivendi delivers consistent earnings growth in a challenging environment EBITA CFFO 5,726 +6% CAGR 5,512* +8% CAGR 5,390 5,237 4,953 5,055 4,881 4,721 4,370 4,466 EUR millions , IFRS EUR millions , IFRS 4,157 3,985 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 * Excluding 3G spectrum a
Slide 14: Conclusion
Conclusion Vivendi has first-class assets with high and predictable cash generation Vivendi’s organic development in fast-growing economies as well as its focus on innovation will enhance the long-term performance of its businesses Vivendi is determined to build future growth and increase shareholde
Slide 15: Investor Presentation – November-December 2011
Investor Presentation – November-December 2011
Slide 16: Appendices
vivendi Appendices
Slide 17: #1 worldwide in video games #1 in telecoms
63%* 100% 100% #1 worldwide in video games #1 worldwide in music #1 alternative telecoms in France 53%* 100% 100%/80% #1 in telecoms #1 alternative broadband operator #1 in pay-TV in France in Morocco in Brazil * Based on shares outstanding, as of September 30, 2011 17 Investor Presentation – Novemb
Slide 18: Q3 2011 Highlights
Q3 2011 Highlights Excellent Q3 EBITA up 6.9%* driven by double digit growth at Activision Blizzard, UMG and GVT Adjusted Net Income flat in Q3 at €685m due to : EBITA growth of €76m, and 100% ownership of SFR with a positive €164m impact on minority interests partly offset by higher interest ex
Slide 19: Activision Blizzard revenues and EBITA
Revenues: €2,390m, +11% at constant currency Constant Record results driven by strength of digital sales In euro millions - IFRS 9M 2011 9M 2010 Change currency Non-GAAP revenues from digital channels* grew 16% and account for 60% of total revenues Revenues 2,390 2,280 + 4.8% + 10.9% Strong perf
Slide 20: Activision Blizzard Non-GAAP and IFRS; 2011 Outlook
Non-GAAP* IFRS Constant In dollar millions 9M 2011 9M 2010 Change In euro millions 9M 2011 currency Activision 898 983 -8.6% Activision 1,376 + 2.6% Blizzard 968 1,086 - 10.9% Blizzard 861 + 26.3% Distribution 214 185 + 15.7% Distribution 153 + 16.3% Net revenues 2,080 2,254 -7.7% Revenues 2,390 + 1
Slide 21: Activision Blizzard – Reconciliation to IFRS Revenues
Activision Blizzard – Reconciliation to IFRS Revenues In millions 9M 2011 Non-GAAP Net Revenues 2,080 $ Changes in deferred net revenues (a) 1,268 $ Net Revenues in US GAAP as published by Activision Blizzard 3,348 $ Reconciling differences between US GAAP and IFRS - Revenues in IFRS (in millions of
Slide 22: Activision Blizzard – Reconciliation to IFRS EBITA
Activision Blizzard – Reconciliation to IFRS EBITA In millions 9M 2011 Non-GAAP Operating Income/(Loss) $468 Changes in deferred net revenues and related cost of sales (a) $943 Equity-based compensation expense (b) $(61) Restructuring charges $(24) Amortization of intangibles acquired through busine
Slide 23: Universal Music Group revenues and EBITA
Revenues: €2,842m, -1.1% at constant currency, Constant +0.7%* in Q3 In euro millions - IFRS 9M 2011 9M 2010 Change currency Recorded music down 2.0%*, but up 2.4%* in Q3 Revenues 2,842 2,927 - 2.9% - 1.1% Digital sales up 13.9%*, offsetting continued physical sales decline EBITA 244 244 - + 1.6% o/
Slide 24: Top-selling artists and upcoming releases
Top-selling artists Million Million 9M 2011 units* 9M 2010 units* Lady Gaga 5.6 Eminem 5.0 Rihanna 2.2 Lady Gaga - The Fame Monster 4.1 Lil Wayne 2.1 Justin Bieber - My World 2.0 2.4 Kanye West & Jay Z 1.5 Black Eyed Peas 2.3 Justin Bieber - Never Say Never 1.4 Drake 1.4 Top 5 Artists ~12.8 Top 5 Ar
Slide 25: SFR mobile and broadband revenues and EBITA
Mobile service revenues: €5,969m +1.2% excl. VAT and regulatory impact* +381k postpaid customers in 9M despite VAT turbulence in Q1 In euro millions - IFRS 9M 2011 9M 2010 Change Data revenues: +23% to €2,083m due to growing smartphone Revenues 9,137 9,379 - 2.6% penetration (37% of SFR customers**
Slide 26: SFR mobile and broadband KPIs
9M 2011 9M 2010 Change MOBILE Customers (in '000)* 21,158 20,815 + 1.6% Proportion of postpaid clients* 76.6% 75.2% + 1.4 pt 3G customers (in '000)* 10,982 9,189 + 19.5% Market share on customer base (%)* 31.6% 33.3% - 1.7 pt MVNO Clients (in '000)** 2,120 1,112 + 90.6% Network market share (%) 34.7
Slide 27: SFR revenue breakdown
In euro millions - IFRS 9M 2011 9M 2010 Change Service revenues 5,969 6,321 - 5.6% of which data revenues from mobile services 2,083 1,695 + 22.9% Equipment sales, net 384 343 + 12.0% Mobile revenues 6,353 6,664 - 4.7% Broadband Internet and fixed revenues 2,994 2,944 + 1.7% Intercos (210) (229) Tot
Slide 28: Maroc Telecom Group revenues and EBITA
Revenues: €2,059 m, -2.0% at constant currency Constant In euro millions - IFRS 9M 2011 9M 2010 Change currency Mobile in Morocco Growing customer base (+1.4% yoy), o/w +28% for the high- Revenues 2,059 2,126 - 3.2% - 2.0% added-value postpaid segment, despite huge competition Maroc Telecom SA 1,6
Slide 29: Maroc Telecom SA and African subsidiaries
Maroc Telecom SA African subsidiaries 9M 2011 9M 2010 In '000 Sept. 30, 2011 Sept. 30, 2010 Mobile customers (in '000) 16,969 16,740 Postpaid mobile customers (in '000) 959 751 Mauritania ARPU (MAD/customer/month) 88 95 Number of mobile customers 1,772 1,578 Number of fixed lines (in '000) 1,233 1,2
Slide 30: GVT revenues and EBITDA
Revenues: €1,077m, +47% (+42% at constant currency) Growth fueled by coverage expansion and excellent value proposition Constant Broadband service revenues up 75% and Voice revenues In euro millions - IFRS 9M 2011 9M 2010 Change Currency up 37% (+70% and +32% at constant currency, respectively) Reve
Slide 31: GVT homes passed, lines in service and revenues
In '000 Sept. 30, 2011 Sept. 30, 2010 Change In BRL millions - IFRS 9M 2011 9M 2010 Change Total Homes passed 6,665 4,445 + 49.9% Total Revenues 2,457 1,726 + 42.4% Total Lines in Services (LIS) 5,773 3,846 + 50.1% Voice 1,502 1,134 + 32.5% Retail and SME* 4,065 2,806 + 44.9% Next Generation Service
Slide 32: Canal+ Group revenues and EBITA
Revenues: €3,563m, +2.9% Canal+ France revenue growth sustained by: Constant Portfolio growth at Canal+ France: 211k net adds year-on- In euro millions - IFRS 9M 2011 9M 2010 Change currency year, driven mainly by mainland France (DSL distribution Revenues 3,563 3,464 + 2.9% + 2.9% dynamics), over
Slide 33: Canal+ subscriber portfolio
In '000 Sept. 30, 2011 Sept. 30, 2010 Change Portfolio Canal+ Group 12,646 12,336 + 310 ow Canal+ France* 10,999 10,788 *** + 211 ow International** 1,647 1,548 + 99 * Individual and collective subscriptions at Canal+, CanalSat in mainland France, overseas territories and Africa. ** Poland, Vietnam
Slide 34: Revenues
Revenues Constant Constant Q3 2011 Q3 2010 Change in euro millions - IFRS 9M 2011 9M 2010 Change currency currency 533 577 - 7.6% + 1.2% Activision Blizzard 2,390 2,280 + 4.8% + 10.9% 979 1,027 - 4.7% + 0.7% Universal Music Group 2,842 2,927 - 2.9% - 1.1% 3,017 3,131 - 3.6% - 3.6% SFR 9,137 9,379 -
Slide 35: EBITDA
EBITDA Constant Constant Q3 2011 Q3 2010 Change in euro millions - IFRS 9M 2011 9M 2010 Change currency currency 140 114 + 22.8% + 35.0% Activision Blizzard 1,066 832 + 28.1% + 34.5% 136 105 + 29.5% + 35.1% Universal Music Group 329 305 + 7.9% + 9.9% 1,026 993 + 3.3% + 3.3% SFR 2,971 3,107 - 4.4% -
Slide 36: Q3 EBITA
Q3 EBITA Constant In euro millions - IFRS Q3 2011 Q3 2010 Change currency -5.3% excl. non- Activision Blizzard 118 66 + 78.8% + 98.8% recurring Universal Music Group 112 85 + 31.8% + 36.3% positive items SFR 644 614 + 4.9% + 4.9% +38% on a like- Maroc Telecom Group 302 346 - 12.7% - 11.2% for-like b
Slide 37: Interest
Interest In euro millions (except where noted) – IFRS 9M 2011 9M 2010 Interest (351) (375) Interest expense on borrowings (388) (396) Average interest rate on borrowings (%) 3.94% 4.06% Average outstanding borrowings (in euro billions) 13.1 13.0 Interet income from cash and cash equivalents 37 21 Av
Slide 38: Income tax
Income tax 9M 2011 9M 2010 Adjusted Adjusted net Net net Net In euro millions – IFRS income income income income Utilization of Vivendi SA’s tax losses carried forward 361 333 382 442 Tax charge (1,465) (1,330) (1,358) (1,290) Provision for income taxes (1,104) (997) (976) (848) Taxes (paid) / colle
Slide 39: Reconciliation of Adjusted Net Income to Net Income, group share
Reconciliation of Adjusted Net Income to Net Income, group share In euro millions - IFRS 9M 2011 9M 2010 Adjusted Net Income 2,519 2,214 Amortization and impairment losses of intangible assets acquired through (363) (429) business combinations Settlement of the litigation regarding PTC shares 1,255
Slide 40: Glossary
Glossary Adjusted earnings before interest and income taxes (EBITA): As defined by Vivendi, EBITA corresponds to EBIT (defined as the difference between income and charges that do not result from financial activities, equity affiliates, discontinued operations and tax) before the amortization of int
Slide 41: Activision Blizzard – stand alone definition & disclaimer
Activision Blizzard – stand alone definition & disclaimer Non-GAAP Financial Measures Activision Blizzard provides net revenues, net income (loss), earnings (loss) per share and operating margin data and guidance both including (in accordance with GAAP) and excluding (non-GAAP) the following items:
Slide 42: Investor Relations team
Investor Relations team Jean-Michel Bonamy Executive Vice President Investor Relations +33.1.71.71.12.04 jean-michel.bonamy@vivendi.com Paris 42, Avenue de Friedland New York 75380 Paris cedex 08 / France 800 Third Avenue Phone: +33.1.71.71.32.80 New York, NY 10022 / USA Fax: +33.1.71.71.14.16 Phone
Slide 43: Important disclaimers
Important disclaimers Forward Looking Statements This presentation contains forward-looking statements with respect to the financial condition, results of operations, business, strategy, plans and outlook of Vivendi, including expectations regarding the payment of dividends as well as the impact of