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Vivendi — Vivendi Universal — Merger or Acquisition (December 2002)
28 slides from Vivendi's merger presentation, Dec 4, 2002
Slide 1: The Cegetel Choice December 2002
The Cegetel Choice December 2002
Slide 2: Important Legal Disclaimer
Important Legal Disclaimer These presentation materials contain '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 forwar
Slide 3: Vivendi Universal has decided to pre-empt BT's 26% stake in Cegetel Groupe
Vivendi Universal has decided to pre-empt BT's 26% stake in Cegetel Groupe... ... in order to own 70% of the leading private telecommunication operator in France, instead of a 44% stake
Slide 4: Vivendi Universal Landscape in July 2002
Vivendi Universal Landscape in July 2002* *Illustrative and non exhaustive list Sports clubs Sport Five Universal Pictures USA Networks Theme parks Canal+ StudioCanal Cegetel / SFR Energy services Transportation Water Kenya Music Games Publishing US Reference works Magazines France Telepiu Theme cha
Slide 5: The New Perimeter of Vivendi Universal
Universal Pictures USA Networks Theme parks Studio Canal Cegetel / SFR Music Games New Canal+ The New Perimeter of Vivendi Universal* *Non exhaustive list, subject to necessary consultations Entertainment Telecoms
Slide 6: Vivendi Universal on September
Vivendi Universal on September 25 HOLDING Universal Music Group Vivendi Universal Entertainment ENTERTAINMENT Groupe Cegetel New Canal+ Vivendi Universal Games UNIVERSAL Publishing Canal+ international assets Telecoms international assets Internet Real estate and various assets Vivendi Environnement
Slide 7: VU today
VU today HOLDING Universal Music Group Vivendi Universal Entertainment ENTERTAINMENT New Canal+ Vivendi Universal Games UNIVERSAL TELECOMS SFR Cegetel (Fixed) CEGETEL GROUP ASSET DISPOSALS IN PROGRESS Environment Publishing C+ Int'l Assets Telecom Int'l Assets Internet Real Estate & various assets
Slide 8: Cegetel and SFR: Exceptional Assets
Cegetel and SFR: Exceptionnal Assets Jean-Bernard Levy Chief Operating Officer Vivendi Universal
Slide 9: SFR Performance
SFR Performance Strong position as Number 2 player in the French Market 35% market share at end of September 2002 Sustained revenue growth: 01-04E CAGR > 10% Driven by higher ARPU Additional growth drivers from data services in the business segment Additional potential for growth in the consumer seg
Slide 10: SFR and the French Mobile Market Dynamics
63 66 78 80 89 0 20 40 60 80 100 France Germany Spain UK Italy (%) SFR and the French Mobile Market Dynamics Attractive market share ** .... and the highest 1H02 EBITDA margin** Low penetration* * ART and Global Mobile as at June 30, 2002 ** Cegetel, Orange and Bouygues company data for 6 months end
Slide 11: Cegetel Strength as a Fixed-Line Operator
Cegetel Strength as a Fixed-Line Operator *Not consolidating Telecom Developpement Strong performance: 15% 01-04E Revenue CAGR EBITDA break-even in 2003* 3.1 million residential customers, as of end-September 2002 70% of CAC 40 companies are Cegetel customers Favorable competitive dynamics Local cal
Slide 12: Strong and Growing Profitability
&128; Million 2001 Actual 2002E vs. 2001 Expected Growth 2001 -2004E Est. CAGR Revenues 6 384 o.w. Mobile 5 606 o.w. Fixed 756 EBITDA 1 706 o.w. Mobile 1 777 o.w. Fixed (100) EBIT 914 o.w. Mobile 1 099 o.w. Fixed (181) + 9% > + 30% > + 50% > + 10% > + 20% > + 30% Strong and Growing Profitability
Slide 13: Strong Cash-Flow and Low Net Debt
&128; Million 2001 Actual 2002E vs. 2001 Expected growth 2001 -2004E Est. CAGR EBITDA 1 706 CAPEX (568) o.w. Mobile (476) o.w. Fixed (69) WORKING CAPITAL 108 FINANCING NET COSTS (105) - OPERATING FREE CASH FLOW 1 141 o.w. Mobile 1 318 o.w. Fixed (177) NET GLOBAL DEBT 1 769 > + 30% > + 20% Divided by
Slide 14: Accessing Cegetel Cash-Flow
Accessing Cegetel Cash-Flow The shareholder agreement (art. 3.7.2) provides that Cegetel shall distribute the maximum amount of profits available for distribution via dividends First dividends expected in Q1 2003 &128; 0.6bn expected dividends on 70% stake (dividends on 26% acquired stake will servi
Slide 15: Financing the Ownership Increase to 70% in Cegetel Groupe
Jacques Espinasse S.E.V.P. & Chief Financial Officer Vivendi Universal Financing the Ownership Increase to 70% in Cegetel Groupe
Slide 16: New Cegetel Shareholding Structure
New Cegetel Shareholding Structure * 70% 80% Cegetel (fixed) SFR Transtel 30% 15% 20% 50% * Simplified structure Groupe Cegetel 35% VU will control 70% of Cegetel Groupe and 56% of SFR 80% 80%
Slide 17: Financing Arrangements
Financing Arrangements VU management acted promptly after Vodafone's offer on October 16: VE shares ( &128; 4bn): disposal of 20.4% to be cashed- in on Dec. 24, 2002; granting of option calls (one for one) to be exercised at anytime until Dec. 23, 2004 for an additional amount of &128; 2.1bn Cashing
Slide 18: Financing of 26% in Cegetel
Financing of 26% in Cegetel BT's 26% in Cegetel &128; 4.0bn (January - February 2003) Total &128; 4.0bn Assets Liabilities This financing is now made possible by the disposal of VE shares and the disposal of other assets before Dec. 31, 2002 Equity &128; 2.7bn Bank Debt &128; 1.3bn Total &128; 4.0bn
Slide 19: VU's Objectives Maintained
VU's Objectives Maintained Pre-empting BT's stake in Cegetel will therefore: jeopardize neither VU's liquidity situation nor the asset disposal program and financial ratios ... .... while enabling it to consolidate its control over a fast-growing and strong cash-generative subsidiary
Slide 20: Reduction of French GAAP Net Debt
Debt of Cos > 50% Owned BT Impact Net Debt/EBITDA Net Debt/EBITDA (proportional) Q2 2002 18.8 Q3 2002 18.6 Q4 2002 13.9 Q1 2003 12.3 3.8 3.1 3.8 Q2 2003 8.8 3.8 2.4 3 Q3 2003 7.1 3.8 2.3 3 Q4 2003 7.2 3.7 2.3 3 Q1 2004 6.7 3.7 2.1 2.8 Q2 2004 6.2 3.7 1.9 2.6 Q3 2004 6 3.7 1.8 2.5 Q4 2004 4.1 3.5 1.4
Slide 21: Liquidity Update
Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Cash (in &128; billion) 1.3 0.9 4.6 1.4 4.4 4.2 4 1.2 1.4 1.1 3.7 Liquidity Update ( &128; billion) VE 1st Tranche + &128; 1.9bn VUP + &128; 1.1bn * Houghton Mifflin + &128; 1.1bn * VE Exchangeable ( &128; 1.8bn)
Slide 22: Outlook
Jean-Rene Fourtou Outlook
Slide 23: Prospects
Prospects Key areas of management focus: Developing Cegetel Groupe Mobile and fixed Technological challenges Building the New Canal+ Creation of new group Investments for the future / sports rights Developing "Universal" assets Organization of management and structure Optimize budget controls Improv
Slide 24: Appendices
Appendices
Slide 25: An Arbitrage in the Interest of Our Shareholders
An Arbitrage in the Interest of Our Shareholders Between: A minority stake in Vivendi Environnement, a capital intensive business with a low cash-flow profile in the short-term And: The opportunity to take full control at an attractive price of Cegetel Groupe, an excellent telecommunication asset, s
Slide 26: Value Creation Opportunity: An Attractive Acquisition Price
Proportionate Enterprise Value/ 2004E EBITDA (x)1 TIM 6.3 2.6 8.9 TEM 6.3 2 8.4 VOD 6.3 1.3 7.2 Acquisition price for VU2 (Implicit multiple for SFR) Trading multiple The pre-emption right is exercised under attractive financial conditions Over 3 years, estimated Annual Return on Investment at more
Slide 27: Attractive French Mobile Market
Attractive French Mobile Market * Figures as of September 30, 2002, out of 16 European countries ** Figures as of September 30, 2002, out of 10 European leading mobile operators ** Source: Mobile Communications Penetration rate still lower than the European Average 63% vs. EU average of 76%* Strong
Slide 28: Structure of Cegetel Groupe
Structure of Cegetel Groupe Before pre-emption After pre-emption Transtel SPV Cegetel Groupe SFR Cegetel (fixed) TD SNCF 70% 26% 50% 80% 80% 50% 20% 30% 50% 9% 15% 20% 100% Transtel BT Cegetel Groupe SFR Cegetel (fixed) TD SNCF 70% 26% 50% 80% 80% 50% 20% 30% 50% 9% 20% SBC 15%
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