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Vivendi — Vivendi Universal — Morgan Stanley 11th Annual Media & Communications Conference (May 2006)
37 slides from Vivendi's conference presentation, May 25, 2006
Slide 1: Morgan Stanley 11th Annual Media & Communications Conference
Morgan Stanley 11th Annual Media & Communications Conference Jacques ESPINASSE Member of the Management Board & Chief Financial Officer IMPORTANT NOTICE: INVESTORS ARE STRONGLY ADVISED TO READ THE IMPORTANT LEGAL DISCLAIMER AT THE END OF THIS PRESENTATION May 24, 2006
Slide 2: Overview of Vivendi
Overview of Vivendi A Media and Telecom group with global content and local distribution platforms: > 34,000 employees > €19.5 billion revenues in 2005 > €2.1 bn Adjusted Net income and €1.9 bn net available cash flow in 2005 > Market capitalization of approximately €32 billion
Slide 3: Vivendi Share Price
€8.6 €27.8* 40 30 20 Vivendi Share Price Market capitalization : approx 32 billion euros Among CAC 40 : 12th rank Among Euronext : 18th rank In euro per share Volume in 2006: 3rd of the CAC 40 11th of Euronext 9 million shares / day 2002 2003 2004 2005 2006 * As of May 18, 2006
Slide 4: Vivendi Operates First Class Media & Telecom Assets
Vivendi Operates First Class Media & Telecom Assets Mobile / Fixed line Pay-TV Music Video Games 100% 100% 20% 100% 100% 56% 51% Film TV / Film TV / Film Mobile / Fixed line Global Content Local Distribution Platforms 35%
Slide 5: First class assets and leading brands
First class assets and leading brands France's leading pay-TV operator €3.4bn Revenues, €0.2bn Earnings from operations 8.3m subscriptions in France World's leading music company €4.9bn Revenues, €0.5bn Earnings from operations 25.6% worldwide market share World's leading online games company €0.7bn
Slide 6: Our Strategy: Innovation & Leadership
Our Strategy: Innovation & Leadership > Create and market to our subscribers new broadband and mobile services > Strengthen our leadership positions in our complementary content and distribution businesses in order to
Slide 7: Management & Financial Resources: Charting the Course
Management & Financial Resources: Charting the Course United Management Focus on Innovation Financial Discipline Smart Capital Allocation Strong Balance Sheet High Quality Partners > Superior Assets
Slide 8: A United Management Board: Focused on Value Creation
A United Management Board: Focused on Value Creation Jean-Bernard Levy C.E.O Frank Esser Chairman & C.E.O. - SFR Doug Morris Chairman & C.E.O. - UMG Rene Penisson Chairman - Vivendi Games Bertrand Meheut C.E.O - CANAL+ Group Jacques Espinasse Chief Financial Officer Abdeslam Ahizoune C.E.O. - Maroc
Slide 9: Our Strategy: Complementary Businesses
Our Strategy: Complementary Businesses > Staying ahead to better serve consumers: Embracing technology Creating content, identifying and managing talent, acquisition of rights Tighter market focus More innovative and responsive > Numerous new projects concretely link our businesses together, providi
Slide 10: Our Strength: Subscribers
Our Strength: Subscribers > Our subscribers: SFR: 17 million CANAL+ Group: 8 million Maroc Telecom: 10 million (fixed-line and mobile) World of Warcraft: 6 million > Subscription business model: Recurring revenues Mostly fixed cost base Marketing of add-on services due to digital technology Easier a
Slide 11: Connecting with the Customer: Innovative Subscription Services
Connecting with the Customer: Innovative Subscription Services Music Download services & ring tones Thematic channels Online Game World of Warcraft ADSL Broadband Internet access Pay-TV DSL, DTT & mobile TV offers Video-On-Demand New Services on 3G MMS/SMS Mobile TV, Music downloads Mobile Videophon
Slide 12: Mobility is at the Core of our Businesses
Mobility is at the Core of our Businesses Innovation in Mobile > > > > > > > > > > > > > Subscribers News Music Messages Video & TV Corporate Services Internet Access Payment Games Visio (tm) (tm) (tm) (tm) (tm)
Slide 13: Our Strategy: Advantages of Scale
Our Strategy: Advantages of Scale > Better anticipation of new technologies > Ability to initiate large-scale internal investments (examples: French League 1 soccer, video games, etc.) > Shared experience and full involvement of operating teams on a global scale > Risk sharing > Ability to seize opp
Slide 14: Our Strategy: Already Ahead of Our Competitors
Our Strategy: Already Ahead of Our Competitors > Our competitors in telecommunications invest in the media sector: content platforms, acquisition of exclusive rights, etc. > Our competitors in content creation want to control (at least partially) their distribution: purchase of network infrastructur
Slide 15: Global Portfolio: Ahead of the Curve
Global Portfolio: Ahead of the Curve Superior content and distribution businesses delivering tangible results, Ideally positioned to benefit from the rise of mobility, broadband and global transition to digital, Attractive to younger demographics who are leading the global digital transformation, Su
Slide 16: Overview of 2002-2005 Key Figures
Overview of 2002-2005 Key Figures French GAAP French GAAP French GAAP IFRS IFRS IFRS In euro billions Figures as published 2002 2003 2004 2004 2005 2004-2005 Growth (%) > A. Revenues 58.2 25.5 21.4 17.9 19.5 +9% > B. Earnings from operations 3.8 3.3 3.5 3.2 3.8 +16% B / A (%) 6.5% 13.0% 16.2% 18.1%
Slide 17: Our Successes in 2005
Our Successes in 2005 2005 Highlights: > Increased market share in every business > Successful launch of innovative products & services across the group > Further simplification of the group's structure > Investments in our businesses are paying off > Development strategy: preparing for future succe
Slide 18: In 2005, all of Vivendi's objectives have been met
In 2005, all of Vivendi's objectives have been met and even largely exceeded
Slide 19: 2005 Key Figures
2005 Key Figures In euro millions Figures as published, except when specified 2005 % Growth > Revenues (comparable basis) 19,439 + 7% > Earnings from operations (comparable basis) 3,719 + 14% > Earnings from operations / Revenues (%) 19.2% + 1.1 point > Adjusted Net Income 2,078 + 55% > Adjusted Net
Slide 20: 2005 Key Figures by Business Unit
2005 Key Figures by Business Unit On a comparable basis In euros millions - IFRS Revenues EFO Universal Music Group: €4,893m + 1.5% € 480m + 20.4% Vivendi Games: € 641m +34.9% € 41m + €244m Canal + Group: €3,407m + 4.0% € 176m - 5.9% SFR €8,687m + 7.0% €2,422m + 3.6*% Maroc Telecom €1,860m +15.5% €
Slide 21: First Quarter 2006 Key Figures
First Quarter 2006 Key Figures Strong operating performance in the first quarter 2006: Revenues: + 6.5% to € 4,766 million EFO: + 10.9% to € 990 million Adjusted Net Income: + 11.7% to € 592 million On a comparable basis Revenues EFO Universal Music Group: €1,125m + 8.4% € 90m +136.8% Vivendi Games:
Slide 22: Universal Music Group: Strategic Priorities
Universal Music Group: Strategic Priorities > Strengthen both global and local market leadership > Accelerate transformation into a music entertainment company by leveraging content and brands through innovation and creative new revenue streams > Expand music publishing revenues > Grow digital reven
Slide 23: Universal Music Group: 2006 Outlook
Universal Music Group: 2006 Outlook 2006 Financial Targets > Revenues: "Slight growth as digital sales more than offset the decline in physical sales" > EFO margin: "Same margin rate or slightly above 2005"
Slide 24: Vivendi Games: Strategic Priorities
Vivendi Games: Strategic Priorities > Pursue development of the online gaming business and strengthen leadership position with World of Warcraft > Capitalize on strong PC franchises with the launch of new innovative versions > Strengthen our position on console games by leveraging the creative capac
Slide 25: Vivendi Games: 2006 Outlook
Vivendi Games: 2006 Outlook 2006 Financial Targets > Revenues: "+12% to +15% growth" > EFO margin rate: "Grow from 6% to between 8% and 10%"
Slide 26: CANAL+ Group: Strategic Priorities
CANAL+ Group: Strategic Priorities > Close the CANAL+ / TPS combination and initiate integration process > Continue to leverage leadership on existing and emerging digital platforms > Continue to grow the content portfolio and increase subscriptions > Accelerate digital migration through penetration
Slide 27: CANAL+ Group: 2006 Outlook
CANAL+ Group: 2006 Outlook 2006 Financial Targets > Revenues: "+4% to +6% growth" > EFO: "Stable at constant perimeter"
Slide 28: NBC Universal: Strategic Priorities
NBC Universal: Strategic Priorities > Develop, produce and market best content > Continue to make progress with primetime ratings > Maintain strength of leading entertainment cable portfolio > Continue global expansion > Sell content effectively in digital distribution model
Slide 29: NBC Universal: 2006 Outlook
NBC Universal: 2006 Outlook 2006 Financial Targets > Revenues: "~$16 billion, +10%" > Segment Profit : "~$3.0 billion (100% equates to ~$3.4 billion)"
Slide 30: SFR: Strategic Priorities
SFR: Strategic Priorities > Continue to grow customer base with a strong migration to 3G > Keep leadership in innovation and customer satisfaction > Focus on 3G / UMTS to increase voice capacity, enable fixed-mobile substitution and deliver multimedia services > Extend the mobile offer with new serv
Slide 31: SFR: 2006 Outlook
SFR: 2006 Outlook 2006 Financial Targets > Revenues: "Stable to slight growth: growth in outgoing revenues largely offset by termination cuts" > EFO: "+8% to +10% growth" > EFO margin rate: "Grow to between 29.5% and 30.5% compared with 27.9% in 2005"
Slide 32: Maroc Telecom: Strategic Priorities
Maroc Telecom: Strategic Priorities > Continue to lead in the rapidly growing wireless market through innovative offers, while pursuing profitable growth > Strengthen momentum in fixed line and Internet sales > Leverage Vivendi's expertise (new mobile services, broadband Internet, TV offer, ...) > S
Slide 33: Maroc Telecom: 2006 Outlook
Maroc Telecom: 2006 Outlook 2006 Financial Targets > Revenues: "+6% to +8% growth" > EFO : "+12% to +14% growth"
Slide 34: Vivendi 2006 Guidance
Vivendi 2006 Guidance 2006 Adjusted net income growth: Revised upwards to +16%, approx. € 2.4bn 2006 dividend pay out: At least 50% of Adjusted net income
Slide 35: Vivendi 2011 Outlook
Vivendi 2011 Outlook 2006-2011 EFO average growth: Between 8% to 10% per year 2011 Adjusted Net Income: Between €3.5 billion to €4 billion * * Including the assumption that all deferred tax assets will have been utilized by end of 2010.
Slide 36: Investor Relations contacts
Laurence Daniel IR Director laurence.daniel@vivendi.com Edouard Lassalle IR Analyst edouard.lassalle@vivendi.com IR Team Eileen McLaughlin IR Director eileen.mclaughlin@vivendi.com Daniel SCOLAN Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@vivendi.com For any financial
Slide 37: Important Legal Disclaimer
Important Legal Disclaimer Vivendi is quoted on the NYSE and on Euronext Paris SA. This presentation contains "forward-looking statements" as that term is defined in the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of the company's future pe
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