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Vivendi — Investor Presentation (September 2011)
53 slides from Vivendi's investor presentation, September 2011
Slide 1: Investor Presentation
Investor Presentation September 2011 IMPORTANT NOTICE: Financial results for the fiscal year ended December 31, 2010 Financial statements audited and prepared under IFRS Investors are strongly urged to read the important disclaimers at the end of this presentation
Slide 2: First half 2011 highlights
First half 2011 highlights Group simplification completed at attractive conditions through disposal of 20% stake in NBC Universal and acquisition of 44% stake in SFR Sales and pprofit upp in a challenging g g business environment Adjusted Net Income increased 20%, mainly driven by outstanding operat
Slide 3: Major milestone for Vivendi
Major milestone for Vivendi $5.8 billion disposal of 20% minority stake in NBC Universal completed in January 2011 ¾ At a multiple of ~12x EBITDA €7.75 billion acquisition of Vodafone’s 44% stake in SFR completed in June 2011 ¾ At a multiple of 6.2x 2010 EBITDA ¾ High accretion on both Adjusted Net
Slide 4: Adjusted Net Income increases 20% in H1 2011
Adjusted Net Income increases 20% in H1 2011 Strong H1 2011 operating performance ¾ Revenues: R € 14,253 14 253 m + 1.9% 1 9% ¾ EBITA: € 3,363 m + 3.7% ¾ CFFO,, excl NBC Universal contribution* and SFR spectrum p acquisition**: q € 1,777 , m - 2.4% Activision Blizzard and GVT H1 results above expect
Slide 5: Strong product pipeline to fuel profit expansion
Strong product pipeline to fuel profit expansion Exceeded H1 2011 guidance in non-GAAP and US GAAP accounting EBITA contribution t ib ti up 34% tto €833m €833 Strong pipeline of new games and services supporting short term performance and long term continued growth outlook ¾ New Call of Duty and Eli
Slide 6: Acceleration of deployment bears fruit
Acceleration of deployment bears fruit Expansion p in 5 new cities in H1 2011,, GVT covers 102 cities* Lines in service: 1m net additions in H1; Revenues up 54%; and EBITDA margin close to 42% i GVT unique ff i to offering t be b maintained i t i d with ith ffurther th upgrade d off bbroadband db d
Slide 7: Three new key partnerships
Three new key partnerships Revenues up 2.7% excl. impact from regulatory decisions*, despite tougher competition Mobile data sales up 30% with 34% of SFR customers** equipped with smartphones Three major partnerships contracted in Q2 2011 (to benefit as of 2012): ¾ Agreement with Virgin Mobile to us
Slide 8: Solid fundamentals
Solid fundamentals In Morocco, significant mobile price cut (-24%) and strong increase in outbound usage (+22%), i an iintense in t competitive titi environment i t Increase of customer bases (+17% yoy) both in Morocco (+6%) and sub-Saharan Africa (+47%) EBITA margin maintained at high level (~40%);
Slide 9: Early signs of rebound
Early signs of rebound U.S. market is up year-to-date although music market remains soft globally Growth in Q2 revenues (+0.6%*) and EBITA (+7.7%*) Reorganization on track for €100m of annual run rate cost savings by end 2011 Î We W confirm fi 2011 outlook tl k * at constant currency and excluding r
Slide 10: Steady growth pace
Steady growth pace Increased subscriptions and ARPU growth drive 2.8% revenue growth High value and exclusive content secured: first choice French Soccer TV rights, French Rugby Championship TV rights, Polish league Soccer TV rights Pro-active set top boxes upgrade program to accelerate connected TV
Slide 11: 2011 guidance confirmed
2011 guidance confirmed We upgrade our outlook for Activision Blizzard and GVT We confirm our 2011 full year outlook in a troubled economic and financial environment ¾ Vivendi’s Adjusted Net Income above €3 billion, reflecting the SFR 44% stake acquisition ¾ Slight increase in Vivendi’s Adjusted Net
Slide 12: Conclusion
Conclusion We are determined to accelerate growth and enhance shareholder value creation Our capital allocation policy remains ROCE focused Our ppriorities are: ¾ Maintaining significant investments in content, platforms, and networks ¾ Leveraging g g our assets,, exploiting p g digital g and new bu
Slide 13: Investor Presentation – September 2011
Investor Presentation – September 2011
Slide 14: Guidance per business unit
vivendi Guidance per business unit
Slide 15: 2011 outlook improved for Activision Blizzard and GVT, revised for Maroc Telecom Group
2011 outlook improved for Activision Blizzard and GVT, revised for Maroc Telecom Group Guidance vs. May 2011 Further improvement in EBITA margin Ò Upgraded EBITA above €800m (vs. close to 2010 EBITA of € 692m) Double digit EBITA margin, despite restructuring charges 9 Confirmed Mobile: Decrease in E
Slide 16: Recent events
Recent events: ¾ 2012-2014 outlook for Activision Blizzard ¾ Strategic St t i partnership t hi with ith Bollore
Slide 17: 2012–2014 Financial Objectives
2012 – 2014 Financial Objectives* Revenue Growth Mid Single Digit + CAGR Revenue Growth EPS Growth Double Digit + CAGR EPS Growth Continued Operating Margin Expansion driven by Digital * As of Activision Blizzard’s September 1,2011 Investor Presentation Investor Presentation – September 2011 17
Slide 18: Strategic partnership with Bolloré Group
Strategic partnership with Bolloré Group Canal+ Group to acquire 60% controlling stake in two free-to-air channels in France; Bolloré Group to acquire ~1% stake in Vivendi Transaction strategic rationale: ¾ Diversify our revenues beyond subscription and capture advertising sales from audience increa
Slide 19: Exciting value creation for Canal+ Group
Exciting value creation for Canal+ Group Transaction price of 60% of the equity: €279m paid at the closing through the issue of 16.2m Vivendi shares at €17.27 (valuation based on the last four months average) ¾ Limited dilution to 1.3% of the share capital ¾ Share issued with a premium of 7.3%* ¾ Bo
Slide 20: Financials H1 2011
vivendi Financials # 1 2011
Slide 21: Strong results for the first half 2011
Strong results for the first half 2011 R Revenues: €14 253 €14,253m 1 9% + 1.9% EBITA: €3,363m + 3.7% Adjusted Net Income: €1,834m + 20.2% CFFO excl NBC Universal contribution CFFO, contribution* and SFR spectrum acquisition**: acquisition : €1 777m €1,777m 2 4% - 2.4% Net Debt: €14.0bn as of June 3
Slide 22: Solid increase in EBITA
Solid increase in EBITA Balance of deferred EBITA was €378m as of June 30, 2011 vs. €318m as of June 30, Constant 2010 In euro millions - IFRS H1 2011 H1 2010 Change currency I l hi Incl. higher h restructuring charges Activision Blizzard 833 620 + 34.4% + 40.1% (€15m). EBITA up 7.7% in Q2 Universal
Slide 23: Adjusted Net Income grows 20%
Adjusted Net Income grows 20% In euro millions - IFRS H1 2011 H1 2010 Change % Incl. disposal p of NBC Universal Revenues 14 253 14,253 13 982 13,982 + 271 + 1.9% 1 9% EBITA 3,363 3,243 + 120 + 3.7% Incl. contractual dividends received from GE at closing Income from equity affiliates (13) 75 - 88 of
Slide 24: Reconciliation of Adjusted Net Income to Net Income, group share
Reconciliation of Adjusted Net Income to Net Income, group share In euro millions - IFRS H1 2011 H1 2010 Adjusted Net Income 1,834 1,526 Amortization and impairment losses of intangible assets acquired through (241) (280) business combinations Settlement of the litigation regarding PTC shares 1 255
Slide 25: Resilient Cash Flow generation
Resilient Cash Flow generation CFFO before capex CFFO H1 2011 H1 2010 Change In euro millions - IFRS H1 2011 H1 2010 Change 240 217 + 10.6% Activision Blizzard 222 186 + 19.4% 80 14 x 5.7 Universal Music Group 58 1 x 58.0 Incl. purchase 1,781 2,020 - 11.8% SFR 949 824 + 15.2% of 3G spectrum 680 822
Slide 26: 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% June 30, 2010 after Capex paid and other minorities shareholders other SFR stake 2011 (0.7) (8.1) + 1.8 (1.1) (1.7) + 3.6 (7.8) (14.0)
Slide 27: Review of Business Operations
Review of Business Operations
Slide 28: #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 June 30, 2011 Investor Presentation – September 2011
Slide 29: Activision Blizzard revenues €1,857m, +14% at constant currency
R Revenues: €1 857 +14% att constant €1,857m, t t currency Record results driven by strength of digital sales ¾ Non-GAAP revenues from digital channels* grew more than 20% and account for almost 60% of total revenues Constant ¾ Strong performance from Call of Duty franchise; continued In euro millio
Slide 30: Activision Blizzard Non-GAAP vs IFRS
Non-GAAP* Non-GAAP IFRS Constant In dollar millions H1 2011 H1 2010 Change In euro millions H1 2011 currency Activision 646 670 -3.6% Activision 1,154 + 4.9% Bli Blizzard d 671 605 + 10.9% 10 9% Bli Blizzard d 604 + 37.8% 37 8% Distribution 137 122 + 12.3% Distribution 99 + 12.6% Net revenues 1,454
Slide 31: Activision Blizzard – Reconciliation to IFRS Revenues
Activision Blizzard – Reconciliation to IFRS Revenues In millions H1 2011 Non-GAAP Net Revenues 1,454 $ Changes in deferred net revenues (a) 1,141 $ Net Revenues in US GAAP as published by Activision Blizzard 2,595 $ Reconciling differences between US GAAP and IFRS - Revenues in IFRS (in millions of
Slide 32: Activision Blizzard – Reconciliation to IFRS EBITA
Activision Blizzard – Reconciliation to IFRS EBITA In millions H1 2011 Non-GAAP Operating Income/(Loss) $384 Changes in deferred net revenues and related cost of sales (a) $838 Equity-based compensation expense (b) $(43) Restructuring charges $(22) Amortization of intangibles acquired through busine
Slide 33: Universal Music Group revenues €1,863m
Revenues: €1,863m, -2.0% at constant currency, +0 6% at constant currency in Q2 +0.6% Constant In euro millions - IFRS H1 2011 H1 2010 Change currency Recorded music down 2.8%*, up 1.0%* in Q2 ¾ Digital sales up 13.5%* Revenues 1,863 1,900 - 1.9% - 2.0% ¾ Continued pphysical y sales decline EBITA 13
Slide 34: Top-selling artists and upcoming releases
Top-selling artists Million Million H1 2011 units* H1 2010 units* Lady Gaga - Born This Way 5.7 Lady Gaga - The Fame Monster 3.4 Rihanna 1.7 Eminem 2.1 Justin Bieber - Never Say Never 1.4 Justin Bieber - My World 2.0 2.0 p Jennifer Lopez 0.9 Black Eyed y Peas 1.9 Jessie J 0.9 Drake 1.1 Top 5 Artists
Slide 35: SFR mobile service revenues
Mobile M bil service i revenues: €4,008m, €4 008 +1.5% +1 5% excl. VAT and regulatory impact* +220k postpaid customers in H1 despite VAT turbulence in Q1 Data revenues: +30% to €1,439m €1 439m due to growing smartphone In euro millions - IFRS H1 2011 H1 2010 Change penetration (34% of SFR customers*
Slide 36: SFR mobile and broadband KPIs
H1 2011 H1 2010 Change MOBILE Customers (in '000)* 000) 21,059 20,562 + 2.4% Proportion of postpaid clients* 76.2% 74.6% + 1.6 pt 3G customers (in '000)* 10,681 8,782 + 21.6% Market share on customer base (%)* 31.9% 33.1% - 1.2 pt Network market share (%) 34 7% 34.7% 34 8% 34.8% - 0.1 0 1 pt 12-mont
Slide 37: SFR revenues breakdown
In euro millions - IFRS H1 2011 H1 2010 Change Service revenues 4,008 4,222 - 5.1% of which data revenues from mobile services 1,439 1,109 + 29.8% Equipment sales, net 249 208 + 19.7% Mobile revenues 4,257 4,430 - 3.9% Broadband Internet and fixed revenues 2,001 1,975 + 1.3% Intercos (138) (157) Tot
Slide 38: Maroc Telecom Group revenues €1,361m
Revenues: €1,361m, -0.7% at constant currency Mobile in Morocco Constant ¾ Growing customer base (+6.9% yoy), o/w +28% for the high- In euro millions - IFRS H1 2011 H1 2010 Change currency added-value postpaid segment Revenues 1,361 1,382 - 1.5% - 0.7% ¾ Further improvement in churn rate Maroc Telec
Slide 39: Maroc Telecom SA and African subsidiaries KPIs
Maroc Telecom SA African subsidiaries H1 2011 H1 2010 In '000 June 30, 2011 June 30, 2010 Mobile customers (in '000) 16,994 15,904 Postpaid mobile customers (in '000) 934 731 Mauritania ARPU (MAD/customer/month) 86 94 Number of mobile customers 1,827 1,547 Number of fixed lines ((in '000)) 1,234 , 1
Slide 40: GVT revenues €682m, +54%
Revenues: €682m, +54% (+45% at constant currency) Growth fueled by coverage expansion and excellent commercial Constant performance outside its original region of operation (representing In euro millions - IFRS H1 2011 H1 2010 Change Currency 35% of revenues) Revenues 682 444 + 53.6% + 45.0% Broadba
Slide 41: GVT homes passed, lines and revenues
In '000 June 30, 2011 June 30, 2010 Change In BRL millions - IFRS H1 2011 H1 2010 Change Total Homes passed 6,247 4,051 + 54.2% Total Revenues 1,563 1,080 + 44.7% Total Lines in Services (LIS) 5,253 3,463 + 51.7% Voice 953 717 + 32.9% Retail R t il and d SME 3 716 3,716 22,552 552 + 45.6% 45 6% Next
Slide 42: Canal+ Group revenues €2,392m, +2.8%
Revenues: €2,392m, +2.8% Canal+ France revenue growth sustained by: Constant In euro millions - IFRS H1 2011 H1 2010 Change currency ¾ Portfolio growth at Canal+ France: 96k net adds year-on- year thanks to strong dynamics in overseas territories and Revenues 2,392 2,327 + 2.8% + 2.7% in Africa o/w
Slide 43: Canal+ Group portfolio
In '000 June 30, 2011 June 30, 2010 Change Portfolio Canal+ Group 12,502 12,316 + 186 ow Canal+ France* 10,869 10,773 *** + 96 ow International** 1,633 1,543 + 90 In Mainland France June 30, 2011 June 30, 2010 Change Churn per digital subscriber 12.1% 11.6% + 0.5 pt ARPU per subscriber 47.3 € 46.3 €
Slide 44: Appendices
vivendi Appendices
Slide 45: Q2 EBITA
Q2 EBITA Constant +7.7% excl. In euro millions - IFRS Q2 2011 Q2 2010 Change currency restructuring charges h Activision Blizzard 331 243 + 36.2% + 53.8% Universal Music Group 86 91 - 5.5% - 3.5% -2.5% excl. 2010 non-recurring SFR 675 734 - 8.0% - 8.0% positive iti ititems Maroc Telecom Group 265 31
Slide 46: Revenues
Revenues Constant In euro millions - IFRS H1 2011 H1 2010 Change currency Activision Blizzard 1,857 1,703 + 9.0% + 14.2% Universal Music Group 1,863 1,900 - 1.9% - 2.0% SFR 6,120 6,248 - 2.0% - 2.0% Maroc Telecom Group 1,361 1,382 - 1.5% - 0.7% GVT 682 444 + 53.6% + 45.0% Canal+ Group 2,392 2,327 +
Slide 47: Interest
Interest In euro millions (except where noted) – IFRS H1 2011 H1 2010 Interest (207) (245) Interest expense on borrowings (234) (261) Average interest rate on borrowings (%) 3.97% 4.06% Average outstanding borrowings (in euro billions) 11.8 12.9 Interet income from cash and cash equivalents 27 16 Av
Slide 48: Funding of the group
Funding of the group Cumulated bank facilities Well balanced bond maturity schedule 90 9.0 8.2 Vivendi 7.2 6.6 SFR 5.4 4.5 4.2 Vivendi 3.2 SFR 3.0 2.7 in eurro billions 2.3 in euroo billions 1.7 1.7 1.7 2.0 1.9 1.5 0.5 08 0.8 08 0.8 End 2011 2012 2013 2014 2015 End 2011 2012 2013 2014 2015 2016 2017
Slide 49: Income tax
Income tax H1 2011 H1 2010 Adjusted Adjusted net Net net Net In euro millions – IFRS income income income income Consolidated Global Profit Tax System 392 504 250 290 Current tax: savings for current year 392 392 250 250 D f d tax: Deferred t variation i ti iin expected t d savings i ((year n+1 +1 /
Slide 50: 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, activities equity affiliates, affiliates discontinued operations and tax) before t
Slide 51: Activision Blizzard – stand alone definition & disclaimer
Activision Blizzard – stand alone definition & disclaimer Non-GAAP Financial Measures Activision Blizzard provides net revenues, revenues net income (loss) (loss), earnings (loss) per share and operating margin data and guidance both including (in accordance with GAAP) and excluding (non-GAAP) the f
Slide 52: Investor Relations team
Investor Relations team Jean Michel Bonamy Jean-Michel 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
Slide 53: Important legal disclaimers
Important legal disclaimers Forward Lookingg Statements This presentation contains forward-looking statements with respect to Vivendi’s financial condition, results of operations, business, strategy, plans and outlook of Vivendi, including expectations regarding the payment of dividends. Although Vi