Slide 1: 2004 Earnings & 2005 Guidance
2004 Earnings & 2005 Guidance Important notice: Investors are strongly urged to read the important legal disclaimer on the last page prior to reading this presentation
Slide 2: Jean-Rene Fourtou, Chairman & Chief Executive Officer
Jean-Rene Fourtou Chairman & Chief Executive Officer
Slide 3: 2004: Strong growth in results
2004: Strong growth in results 2004 Adjusted net income increased 4 times: 1,380 million euros vs. 349 million in 2003; Operating income: 3,117 million euros on a comparable basis vs. 2,216 million in 2003, 41% growth; Cash flow from operations: 4,023 million euros on a comparable basis vs. 2,976 mi
Slide 4: 2004 Major events
2004 Major events At the group level: Creation of NBC Universal (Vivendi Universal controls 20%); Agreement with the Kingdom of Morocco to increase our stake in Maroc Telecom to 51%; Divestiture of 15% of Veolia Environnement; Agreement on future governance; Admission to the Consolidated Global Prof
Slide 5: 2004: Significant improvements in each business
2004: Significant improvements in each business Telecom's operating income increased by +15%; Turnaround in Media's operating income; Successful creation of NBC Universal.
Slide 6: 2004: Reinstatement of a dividend
2004: Reinstatement of a dividend Given the improved financial situation, the 2004 earnings and the 2005 outlook, Vivendi Universal is in a position to: propose at the Shareholders' Meeting on April 28, 2005 the distribution of a dividend of €0.60 / share, (i.e., a distribution of €643 million *), p
Slide 7: A new era
A new era In 2004, the group achieved its plan to refocus and turnaround our businesses. The objective now is to develop our Media and Telecommunications activities.
Slide 8: A new era: new governance structure
A new era Subject to approval at the April 28, 2005 Shareholders' Meeting, the Group will be managed by : A Supervisory Board, chaired by Jean-Rene Fourtou; A Management Board, chaired by Jean-Bernard Levy, comprising managers from Headquarters and from each of the Business Units; The management tea
Slide 9: 2005 Guidance
2005 Guidance In 2005, Vivendi Universal's Adjusted net income is expected to grow by a minimum of 20%.
Slide 10: Full Year 2004 Earnings
Full Year 2004 Earnings Jacques Espinasse Senior Executive Vice President & Chief Financial Officer
Slide 11: Evolution in the group's perimeter in 2004
Evolution in the group's perimeter in 2004 Divestiture of 80% of VUE and purchase of 20% of NBC: deconsolidation of VUE since May 11, 2004*; Refocusing CANAL+ Group (divestitures of Telepiu (in 2003), Canal+ Nordic (in 2003), Expand Group companies, Canal+ Benelux, ...); Refocusing Telecom assets (d
Slide 12: All 2004 Guidance exceeded
All 2004 Guidance exceeded 2004 Guidance Announced on March 17, 2004 and updated on Nov. 17, 2004 2004 As Published 2003 As Published Operating Income "Strong growth on a pro forma basis, close to 2003 actual basis, despite VUE deconsolidation" €3,476m €3,309m Cash flow from operations "Growth on a
Slide 13: 2004 Key financial achievements
2004 Key financial achievements In millions of euros 2003 2004 Growth (%) Operating Income (comparable basis) 2,216 3,117 +41% Net Income (Loss) (1,143) 754 Adjusted Net Income 349 1,380 Cash flow from operations (comparable basis) 2,976 4,023 +35% Proportionate cash flow from operations (comparable
Slide 14: 2004: Important investments
2004: Important investments In billions of euros 2002 with VE equity accounted * 2003 2004 Growth (%) Investments 3.7 6.0 6.9 +13% Capital expenditures Financial 1.7 2.0 1.6 4.4 1.5 5.3 (0.4 + 4.9 NBC) * With Veolia Environnement accounted for using the equity method from January 1, 2002 instead of
Slide 15: 2001-2004 Consolidated Income Statement
2001-2004 Consolidated Income Statement
Slide 16: Reconciliation of 2004 Adjusted Net Income to Net Income
Reconciliation of 2004 Adjusted Net Income to Net Income Adjusted Net Income: 1,380 Foreign currency translation adjustments for VUE (no cash effect): - 2,105 Impact from disposal of Veolia shares: + 1,325 Post-tax capital gain on VUE divestiture: + 312 Exceptional High Yield Notes redemption costs:
Slide 17: Adjusted net income of €1,380 m vs. €349 m in 2003
Adjusted net income of €1,380 m vs. €349 m in 2003, a + €1,031 m improvement, ... .... generating an adjusted EPS of € 1.29 vs. €0.33 in 2003, due to: + €167 m: Growth in operating income of €761 m, before including - €594 m for VUE, which was deconsolidated in May 2004; + €243 m: Reduction in finan
Slide 18: 2004 Revenue growth
2003 2004 Publie 17972 18893 Base comparable 7510 2535 2004 Revenue growth Canal+ Group UMG VU Games SFR Cegetel Maroc Telecom Non core 2003 3339 4974 571 7537 1523 28 2004 3470 4993 475 8317 1658 -20 Details by business on a comparable basis 100% 92% 99% 56% 35% 100% In 2004: Revenue on a comparabl
Slide 19: 2004 Operating income growth
2003 2004 Publie 2215.6 3116.6 Base comparable 1093.4 359 2004 Operating income growth Groupe Canal+ UMG VU Games SFR Cegetel Maroc Telecom Holding & Corporate Actifs non strategiques 2003 95 70.1 -200.8 1971.2 642.2 -329.8 -31 2004 184 337.6 -183 2257.2 682 -220.4 59 100% 92% 99% 56% 35% 100% In 20
Slide 20: 2004 Consolidated cash flow from operations growth
2003 2004 Publie 2976 4023 Base comparable 1395 724 2004 Consolidated Cash flow from operations growth Groupe Canal+ UMG VU Games SFR Cegetel Maroc Telecom Holding & Corporate Actifs non strategiques 2003 134.4 463.1 -200.3 2153.4 685.7 -241.8 -18 2004 676.2 754.7 -17.8 2240.6 722.6 -386.9 33 100% 9
Slide 21: 2004 Proportionate cash flow from operations growth
2003 2004 Publie 1514.1 2451 Base comparable 1251.4 648.9 2004 Proportionate Cash flow from operations growth Groupe Canal+ UMG VU Games SFR Cegetel Maroc Telecom Holding & Corporate Actifs non strategiques 2003 106.4 427.4 -198.3 1198.9 240 -241.8 -18 2004 615.5 696.6 -17.6 1254.7 252.9 -385.2 33 1
Slide 22: Net available cash flow at VU S.A. level in 2004
Net available cash flow at VU S.A. level in 2004 In millions of euros 2004 2003 Consolidated cash flow from operations 4 747 4 371 - Cash income tax (580) (1 242) - Cash financial expenses (430) (621) Other (266) 194 Net consolidated cash flow 3 471 2 702 - SFR Cegetel's and Maroc Telecom's net cash
Slide 23: Financial net debt evolution in 2004
Financial net debt evolution in 2004 12/31/2003 CFFO Interest & Taxes Dividends to minorities Acquisitions Divestitures Others 12/31/2004 Est -6.9 -6.9 -8.2 -10.1 -2.7 -2.7 0 -11.6 -4.7 -1.3 -1.9 -0.4 -7.8 -0.4 -3.1 -4.9 -4.9 December 31, 2003 Cash interests, tax & other Dividends paid to minorities
Slide 24: Vivendi Universal rating
Vivendi Universal rating Vivendi Universal rating
Slide 25: 2004 Financing and other expenses, net
2004 Financing and other expenses, net 2004 2003 Financing expense (455) (698) Financial interest on financial net debt (excluding swap) Average cost of gross financial debt (%) Average gross financial debt (in billions of euros) Interest rate swap Cost of the notes mandatorily redeemable for VU sha
Slide 26: Impact of the Consolidated Global Profits Tax System in 2004
Impact of the Consolidated Global Profits Tax System in 2004 : +956 M€ In millions of euros - French GAAP 2004 2003 Income tax expense €(400) €408 Included in Adjusted Net Income €(803) €(704) of which 2004 Consolidated Global Profits Tax System €464 - of which tax savings linked to the rationalizat
Slide 27: 2004 Equity earnings analysis
2004 Equity earnings analysis 2004 2003 Income from equity affiliates and sold subsidiaries 219 72 including: NBC Universal SFD (SFR Cegetel distribution company) Elektrim Telekomunikacja 172 2 - - - - 98 - - In millions of euros
Slide 28: IFRS transition
IFRS transition In compliance with AMF's recommendation, Vivendi Universal will communicate on the specific impact of IFRS when we have audited financials. April 14, 2005: IFRS Workshop explaining the impacts on our financial statements; The IFRS opening balance sheet as of January 1st 2004 and the
Slide 29: 2001-2004 Evolution of Adjusted Earnings per share
2001- 2004 Evolution of Adjusted Earnings per share 2001 2002 2003 2004 Est -0.1 -0.47 0.33 1.29 2001 2002 2003 2004 In euros per share - - 0.10€ - - 0.47€ 0.33€ 1.29€ Weighted average common shares outstanding (in millions) 1,004.8 1,087.4 1,071.7 1,072.1
Slide 30: 2004 Business Performance & 2005 Outlook
2004 Business Performance & 2005 Outlook Jean-Bernard Levy Chief Operating Officer
Slide 31: CANAL+ Group: 2004 Performance
CANAL+ Group: 2004 Performance Revenues up 4% on a comparable basis: Premium portfolio back to growth: +48k (churn down to 11.0% vs. 12.9%); Continued increase in CanalSatellite subscriptions: +238k (churn down to 8.6% vs. 9.1%); StudioCanal: strong theatrical releases in 2004 (Podium, Bridget Jones
Slide 32: CANAL+ Group: 2005 Outlook
CANAL+ Group: 2005 Outlook Projections: Revenues: approximately €3.3 billion, due to the reduction in scope Operating income margin: approximately 4.5% Cash flow from operations: lower than 2004, due to non-recurring items in 2004 Priorities: Strengthen CANAL+'s leadership on super premium content b
Slide 33: UMG: 2004 Performance
UMG: 2004 Performance Recent Events UMG continues to outperform the US market in 2005 per SoundScan** including having the #1 selling album, The Game's The Documentary UMG's family of labels earned 28 GRAMMY(r) Awards across a broad range of categories including Album of the Year, Best Pop Vocal Alb
Slide 34: UMG: 2005 Outlook
UMG: 2005 Outlook Projections*: Revenues: generally perform in line with the industry Operating income margin: grow to 7% to 9% Cash flow from operations: slight decline, largely due to an exceptionally high conversion of EBITDA in 2004 Priorities: Maintain market leadership; Fight piracy, counterfe
Slide 35: Vivendi Universal Games: 2004 Performance
Vivendi Universal Games: 2004 Performance Recent Events Launched World of Warcraft (WoW), a subscription-based massively multiplayer online role-playing game: WoW is the market leading MMO in North America and Europe; in Korea, it achieved the most successful launch ever for a MMO in its first 100 d
Slide 36: Vivendi Universal Games: 2005 Outlook
Vivendi Universal Games: 2005 Outlook Projections* : Revenues: above €500 million Operating income: back to profit Cash flow from operations: positive Priorities: Strengthen the Massively Multiplayer Online business, as there is a huge potential; Retain and grow subscriber base of Blizzard's World o
Slide 37: SFR Cegetel: 2004 Performance
SFR Cegetel: 2004 Performance Revenues up 10% on a comparable basis: SFR revenues up 10%: Market leader in net additions for the second year with a 38.2%* market share; 2% increase in blended ARPU to €432 due to higher voice usage and a higher contribution from data revenues. Cegetel up 12%: mostly
Slide 38: SFR Cegetel: 2005 Outlook
SFR Cegetel: 2005 Outlook Projections: Revenues: +3% to +5% growth, excluding mobile-to-mobile billing Operating income: +3% to +5% growth, including higher operating losses in the fixed-line business Cash flow from operations: flat at a high level, due to a 10% increase in capex Priorities: Mobile:
Slide 39: Maroc Telecom: 2004 Performance
Maroc Telecom: 2004 Performance Revenues up 11% at constant currency: Mobile revenues up 19%: +22% growth in the subscriber base to 6.4 million; +2% higher prepaid ARPU at MAD95 (€8.6). Fixed & Internet revenue down 1%: +3% growth excluding leased lines rates cuts as from January 1, 2004. Operating
Slide 40: Maroc Telecom: 2005 Outlook
Maroc Telecom: 2005 Outlook Projections (in dirham): Revenues: +5% to +7% growth Operating income: +5% to +7% growth Cash flow from operations: +5% to +7% growth Priorities: Mobile: Grow revenue through higher penetration; Increase subscribers' loyalty by intensifying promotions for prepaid clients
Slide 41: NBC Universal: 2004 Performance
NBC Universal: 2004 Performance Portfolio performing ... record '04 Diverse earnings and revenues streams Integration substantially complete Synergies ahead of target Cultures meshing nicely High quality earnings Strong cash performance ... CFOA 1.3x net income Cable Entertainment revenues up ~15% i
Slide 42: NBC Universal: 2005 Outlook
NBC Universal: 2005 Outlook Projections: Revenues: grow +10% to +15% to approximately $14.8 billion Operating income: increase more than 25% (to approximately $3.3 billion) (GE reporting basis) Dividends: VU's share of dividends is expected to be approximately $400 million Priorities: Build on recen
Slide 43: Strategy & 2005 Guidance
Jean-Bernard Levy Chief Operating Officer Strategy & 2005 Guidance
Slide 44: Vivendi Universal is a cohesive media & telecom group
Vivendi Universal is a cohesive media & telecom group: Its business sectors, media and telecommunications, have been growing faster than the economy for the past thirty years; It benefits from important drivers of organic growth within each business; Each business is either N°1 or N°2 in its key mar
Slide 45: Vivendi Universal, value creator
Vivendi Universal, value creator Our objective is for each of our businesses to create value and for that value to be enhanced by being part of the Vivendi Universal group. This value creation relies upon the expertise and the cohesiveness of our management teams, sharing common professional experie
Slide 46: Our priorities for 2005
Our priorities for 2005 Strengthen the current turnaround at UMG, CANAL+ and VU Games; Anticipate technological innovations and regulatory risks, in order to strengthen our operations; Continue to invest and focus on organic growth; Grow earnings per share and pursue a policy of dividend growth.
Slide 47: 2005 Guidance
2005 Guidance 2005 Adjusted net income growth target: 2004 2005 Est 1380 1656 2005 2004 ^ +20% €1,380 m
Slide 48: Appendices
Appendices Financial Appendices Business Units Appendices
Slide 49: 2004 Adjusted net income
2004 Adjusted net income - - Foreign currency translation adjustment for VUE (no cash effect) : - €2,105m - - Impact from disposal of Veolia shares : + €1,325m - - Post-tax capital gain on VUE divestiture : + €312m - - Exceptional redemption costs of High Yield Notes : - €350m - - Impact of activati
Slide 50: Reconciliation of 2004-2003-2002 adjusted net income to net income
Reconciliation of 2004-2003-2002 adjusted net income to net income 2004 As Published 2003 As Published 2002 As Published Net Income 754 (1,143) (23,301) Adjustments Financial provisions and amortization of deferred financial expenses 18 (563) 2,895 Realized losses, net of financial provisions taken
Slide 51: Disposal of Veolia Environnement shares
Disposal of Veolia Environnement shares Financing and other expenses, net Gain (losses) on businesses sold, net of provisions Income taxes Total Cash proceeds 1,497 1,497 Carrying value of the divested shares and foreign currency translation adjustments (6) (6) Fees (15) (15) Gain on sale 1,476 1,47
Slide 52: Remaining Veolia shares
Remaining Veolia shares Vivendi Universal retains 5.3% of Veolia Environnement shares; Vivendi Universal will benefit at its own discretion from potential upside on an additional 5% until December 2007; Vivendi Universal therefore retains the upside on its Veolia Environnement shares (on 10.3% of VE
Slide 53: Consolidated Income Statement
Consolidated Income Statement
Slide 54: 2004 Revenues and Operating income
2004 Revenues and Operating income
Slide 55: Sensitivity to foreign exchange and interest rate variations
Sensitivity to foreign exchange currency variations: Impact of a $0.10 depreciation of US$ vs. €: Revenues: - €186 m Operating income: + €7 m Net income: - €12 m Consolidated cash flow from operations: - €29 m Proportionate cash flow from operations: - €27 m Sensitivity to interest rate variations:
Slide 56: Consolidated figures for the past financial years
Consolidated figures for the past 5 financial years 1 380 349 (514) Net Adjusted Income
Slide 57: IFRS - Disclaimer
IFRS - Disclaimer In compliance with European regulation 1606/2002 as of July 19, 2002 on international standards, VU consolidated financial statements as from January 1, 2005 will be established according to IFRS standards in force as at December 31 2005, and as approved by the European Union. The
Slide 58: IFRS 1: Main options on FTA balance-sheet
IFRS 1: Main options on FTA balance-sheet IFRS 1 requires the first IFRS financial statements to include a retrospective application and interpretation of the IFRS standards in force from December 31 2005, except some optional exceptions. VU chose the following options: Cumulative currency translati
Slide 59: Main IFRS impacts for Vivendi Universal
Main IFRS impacts for Vivendi Universal No major change in terms of financial reporting due to: French GAAP convergence; US GAAP convergence; No change in the consolidation method of subsidiaries. On Balance Sheet: Reclassification of some items: Separate presentation of assets held for sale; Sport
Slide 60: CANAL+ Group: 2004 Key Metrics
CANAL+ Group: 2004 Key Metrics Pay-TV Subscriptions (In thousands) 31.12. 01 31.12. 02 31.12. 03 31.12.04 04 vs. 03 CANAL+ Premium 5,090 5,018 4,907 4,955 +48 CanalSatellite 2,228 2,520 2,751 2,989 +238 NC Numericable 395 407 423 436 +13 Total French Pay-TV Subscriptions 7,713 7,945 8,081 8,380 +299
Slide 61: UMG: 2004 Key Metrics
UMG: 2004 Key Metrics UMG's Top-Ten Selling Artists UMG's Top-Ten Selling Artists UMG's Top-Ten Selling Artists UMG's Top-Ten Selling Artists 2004 M Units 2003 M Units Eminem 9.0 50 Cent 9.2 U2 8.4 tATu 3.9 Shania Twain 5.4 Eminem 3.3 Guns N'Roses 4.9 Sheryl Crow 3.3 Black Eyed Peas 4.4 Toby Keith 3
Slide 62: Vivendi Universal Games: 2004 Key Metrics
North America Europe Asia & Pacific Est 56 34 10 PC Consoles OLMMP & Other Est 46 48 6 Vivendi Universal Games: 2004 Key Metrics 2004 Revenue Split by Platform (%) 2003 xx % PC Market Share * 2004 15.5 % United States PC Market Share * * Source - NPD data 2003 14% 2004 Revenue Split by Region (%) Wo
Slide 63: NBC Universal: 2004 Key Metrics
NBC Universal: 2004 Key Metrics 3.9 3.7 3.6 2.9 CBS NBC ABC Fox 04/05 season prime ratings w/ sports 4.0 3.7 3.9 3.9 TNT 1,227 USA 1,082 TBS 912 Life 751 Disc 658 SCI FI 656 ..... Bravo 283 2.0 1.9 1.6 NBC ABC CBS 04/05 season daytime ratings 2.1 1.6 1.2 0.7 Leno David Letterman Conan Late Late 04/0
Slide 64: SFR: 2004 Key Metrics
SFR : 2004 Key Metrics (as of end-December including SRR) 2004 2003 Comparable* % growth Customers (in '000) 15,820 14,724 +7% Net additions (in '000) 1,096 1,177 -7% Market share on net additions (%) 38.2% 38.0% + 0.2 point Market share on customer base (%) 35.5% 35.3% + 0.2 point 12-month rolling
Slide 65: Cegetel: 2004 Key Metrics
Cegetel : 2004 Key Metrics (as of end-December) 2004 2003 % growth Voice active customer base (in '000) 1,722 1,472 +17% Backbone-switched traffic (millions of minutes) 42,323 39,898 +6% Installed corporate data sites 27,358 20,345 +34% Number of DSLAM installed ~600+ Number of unbundled lines (in '
Slide 66: Maroc Telecom: 2004 Key Metrics
Maroc Telecom: 2004 Key Metrics 2004 2003 % growth Mobile customers (in millions) 6.4 5.2 +22% % of prepaid customers 96% 96% na Market share on mobile 68% 71% -3 points Prepaid ARPU (in MAD per month) 95 93 +2% Postpaid ARPU (in MAD per month) 790 824 -4% Prepaid churn rate (%) 11% 12% -1point Post
Slide 67: Glossary
Glossary Comparable basis: Comparable basis essentially illustrates the effect of the divestiture of Vivendi Universal Entertainment (VUE), of the divestitures at Canal+ Group (Telepiu, Canal+ Nordic, Canal+ Benelux etc.), of VUP (Comareg and Atica & Scipione) and of Vivendi Telecom Hungary, Kencell
Slide 68: Investor Relations Team
Investor Relations Team Eileen McLaughlin IR Director eileen.mclaughlin@groupvu.com Laurence Daniel IR Director laurence.daniel@groupvu.com Edouard Lassalle Associate Director edouard.lassalle@groupvu.com Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.12.33 daniel.scolan@group
Slide 69: Important Legal Disclaimer
Important Legal Disclaimer This Presentation contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking