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Vivendi — H1 2007 Earnings Presentation
42 slides from Vivendi's earnings presentation, September 2007
Slide 1: Investor Presentation First Half 2007 Earnings
Investor Presentation First Half 2007 Earnings September, 2007 IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT DISCLAIMER AT THE END OF THIS PRESENTATION
Slide 2: Our assets
Our assets 100% 100% / 65% 56% #1 in pay-TV in # 2 among mobile operators #1 Worldwide in music France and Poland #1 in 3G services in France 40% of neuf cegetel 51% 100% 20% # 1 in fixed-line, mobile and internet World leader in in Morocco # 1 Worldwide in online entertainment gaming We innovate to
Slide 3: Steady performance in all our businesses
Steady performance in all our businesses Double digit growth in profits First Half 2007 Revenues: €10.2bn, up +6.4% EBITA: €2.6bn, up +10.6% Adjusted Net Income: €1.5bn, up +10.7% EPS: €1.32, up +10.0% CFFO: €2.1bn, up +12.7% 3
Slide 4: Recent highlights
Recent highlights UMG: Acquisition of BMGP Acquisition of Sanctuary Group: expands music entertainment Canal + Group: Integration of Canal+ and TPS creates a new dynamic SFR: Launch of Happy Zone and the DSL offer Acquisition of the fixed and DSL activities of Télé2 France Maroc Telecom: After the a
Slide 5: Vivendi: a clear strategy, generating consistent results
Vivendi: a clear strategy, generating consistent results Capitalize on consumer demand for mobility and broadband that drives new services and new revenue streams in the world of entertainment Further strengthen our leadership position in superior content and distribution businesses Non cyclical sub
Slide 6: First Half 2007 Adjusted Statement of Earnings
First Half 2007 Adjusted Statement of Earnings In euro millions – IFRS H1 2007 H1 2006 Change in m€ % 1 Revenues 10,223 9,610 +613 +6.4% 2 EBITA 2,596 2,348 +248 +10.6% 3 Income from equity affiliates 172 155 +17 +11.0% 4 Interest (64) (115) +51 +44.3% 5 Income from investments 4 46 -42 -91.3% 6 Pro
Slide 7: First Half 2007 Net Income
First Half 2007 Net Income Net income at €1,526m compared to €1,862m in the first half of 2006 Decrease mainly due to the positive impact of the settlement of the DuPont tax litigation in 2006 In euro millions - IFRS H1 2007 H1 2006 Adjusted net income 1,526 1,378 +10.7% Impact of the settlement of
Slide 8: First Half 2007 Revenues
First Half 2007 Revenues 2,095 -4.9% UMG* 2,202 -0.3% at constant currency 2,154 Canal+ Group** +17.5% First Half 2007 revenues: 1,833 €10,223m SFR 4,336 +6.4% compared to +0.8% first half 2006 4,301 +8.0% at constant currency Maroc Telecom*** 1,165 +17.3% 993 +19.6% at constant currency 500 +68.9%
Slide 9: First Half 2007 EBITA
First Half 2007 EBITA -25.4% UMG* 220 295 -6.9% at constant currency excluding TVT TVT: €50m 302 +58.9% First Half 2007 EBITA: Canal+ Group** 190 €2,596m +10.6% compared to SFR 1,364 -1.8% first half 2006 1,389 +11.9% at constant currency 538 +31.2% Maroc Telecom*** 410 +33.9% at constant currency 1
Slide 10: UMG: Recent events
UMG: Recent events Close the Bertelsman Music Publishing Group (BMGP) acquisition following the European Commission’s approval Acquires Sanctuary Group: artists services, merchandising Continues the testing of sales of digital tracks and albums without Digital Rights Management (DRM) Acquisition of
Slide 11: First Half 2007: UMG
In euro millions- IFRS First Half 2007: UMG Revenues -4.9% -0.3%* Down 2.5% at constant currency excluding BMGP (€49m) Continued strength in the UK and better than market performance Digital Sales: 2,202 2,095 in most of the key markets +51%* Digital sales of €315m account for 15% of total revenues
Slide 12: Acquisition of BMGP
Acquisition of BMGP BMGP enhances the strategic position and value of Universal Music Group as the world’s leading recorded music company and music publishing company. €1,639 million paid in December 2006 Unique, irreplaceable catalog in an attractive low risk, high margin business Accretive to Vive
Slide 13: Canal+ Group: Recent events
Canal+ Group: Recent events CanalSat/TPS integration process on track: Legal entities merged on June 30, 2007 Voluntary redundancy plan finalized Exclusive content renegotiated and secured: Acquisition of top sports events: TOP 14 Rugby championship, English Premier League, Wimbledon… Contracts rene
Slide 14: First Half 2007: Canal+ Group
In euro millions- IFRS First Half 2007: Canal+ Group Revenues Canal+ France: +24% +17.5% Acquisition of TPS (H1 2006 revenues of €294m) 2,154 Subscription portfolio growth 10.3 million Increase of digital subscriptions to Canal+ (67% of the portfolio) Subscriptions 1,833 Other operations: Overall re
Slide 15: SFR: Recent events
SFR: Recent events Fixed to mobile substitution: Launch of Happy Zone nationwide Pre-launch of a complementary ADSL option for SFR customers Mobile Internet: Launch of a 3G+ broadband USB modem: internet on mobility available on all laptops Partnerships with eBay, Google, Microsoft, MySpace, YouTube
Slide 16: First Half 2007: SFR
In euro millions- IFRS First Half 2007: SFR Revenues Service revenues up +0.2%, up +3.8% excluding the impact of +0.8% regulated tariff cuts* 4,301 4,336 Registered SFR customer base up + 3.2% with a better mix 18.0 million (postpaid clients up + 6%) SFR clients +563K new MVNO customers on SFR netwo
Slide 17: Maroc Telecom: Recent events
Maroc Telecom: Recent events Integration of the recent acquisitions in Burkina Faso and Gabon to create growth and profitability Launch of Mobisud, MVNO in France and Belgium Launch of innovative services: new abundance offers, mobile e-mail, broadband services, 3G Internet mobile 17
Slide 18: First Half 2007: Maroc Telecom
In euro millions- IFRS First Half 2007: Maroc Telecom Revenues +17.3% Mobile up + 19.0% at constant currency and constant perimeter Strong growth of the customer base despite the arrival of a 3rd operator 1,165 in a dynamic market 11.7 million Limited decline in ARPU (-8.5%) Mobile clients* 993 Fixe
Slide 19: Vivendi Games: Recent events
Vivendi Games: Recent events Successful launch of World of Warcraft: The Burning Crusade, Blizzard Entertainment’s first expansion Announcement and preview of the second World of Warcraft expansion, Wrath of the Lich King Blizzard Entertainment announced Starcraft II, sequel to the world’s most famo
Slide 20: First Half 2007: Vivendi Games World of Warcraft
In euro millions- IFRS First Half 2007: Vivendi Games Revenues +68.9% Phenomenal success of World of Warcraft: The Burning +80.4%* Crusade launched in January: ~ 3.5 m copies sold in one month More than 9 million in North America and Europe subscribers 296 500 Continued momentum of World of Warcraft
Slide 21: Net debt evolution in first half 2007
In billion euros - IFRS Net debt evolution in first half 2007 Dividends Dividends CFFO Interest, tax paid to paid to Other January 01, 2007 Acquisitions Divestitures after Capex & other shareholders minorities adjustments June 30, 2007 0 -1 -2 -3 -1.0 -4 -4.3 +2.1 -5 +0.2 -1.4 -0.2 Including (in mil
Slide 22: Cash flow from operations
Cash flow from operations CFFO before Capex, net up +9.8% to €3,060m compared to €2,787m in first half 2006 Capex, net up +3.6% to €926m +12.7% increase of CFFO to €2,134m in 2007 compared to €1,893m in first half 2006 In euro millions CFFO Change In euro millions Capex net Capex net IFRS 2007 VS 20
Slide 23: €1.7bn financial investments currently committed in 2007
€1.7bn financial investments currently committed in 2007 (In euro millions) Commitment to buy back TF1 / M6 minority interests 1,007 51 % of Gabon Télécom (51% equity + 100% debt) 103 51 % of Onatel (100% debt) * 58 Other 68 Total H1 financial investments and commitments 1,236 Télé 2 France (Enterpr
Slide 24: Summary
Summary The increase in earnings in the first half reflects the solid performance of our businesses, But also some non-recurring or calendar impacts: Canal+ Group: Transition costs limited to €38m in the first half Vivendi Games: Sales of the expansion pack The Burning Crusade in the first quarter H
Slide 25: We confirm our 2007 goals
We confirm our 2007 goals 2007 outlook Adjusted net income: Above €2.7 billion (1) Dividend: Distribution rate of at least 50% of Adjusted net income (1) After transition costs related to the Canal+ / TPS merger 25
Slide 26: Appendices
Appendices 2006 Results 2007 First Half Metrics
Slide 27: 2006 Results
2006 Results Adjusted net income: €2.6bn, up 17.9% EBITA: €4.4bn, up 9.6% on a comparable basis Cash Flow From Operations: €4.5bn, up 7.4% Dividend: €1.20 per share, up 20% with a distribution rate of 53% of the Adjusted net income per share of €2.27 27
Slide 28: Universal Music Group: Key Metrics
Universal Music Group: First Half 2007 Key Metrics Top-selling artists Million Million 1st Half 2007 Units* 1st Half 2006 Units* Nelly Furtado 2.6 Andrea Bocelli 2.8 Amy Winehouse 2.2 Jack Johnson and Friends 1.9 Maroon 5 2.2 Ne-Yo 1.9 Mika 2.1 Now 21 1.8 Akon 1.9 Mary J. Blige 1.7 Top -15 Artists 2
Slide 29: Canal+ Group: Overview
Canal + Group: Overview 100% 65% 5.1% 9.9% 20% 65% 100% Pay TV in France (CANAL+ France) Other activities 49% Multi-thématiques 75% 29
Slide 30: Canal+ Group: Key Metrics
Canal+ Group: First Half 2007 Key Metrics Canal+ France net portfolio * (in thousands) CanalSat Canal+ TPS H1 2007 5,109 5,197 10,306 +416 H1 2006 4,795 5,095 9,890 Increase in the number of digital subscribers: at the end of June 2007, Canal+ Le Bouquet represented 67% of the total portfolio of Can
Slide 31: SFR: Key Metrics
SFR: First Half 2007 Key Metrics (including SRR) H1 2007 H1 2006 Growth Custom ers (in ‘000) * 17,980 17,415 +3.2% Proportion of postpaid clients * 65.8% 64.1% +1.7pt 3G custom ers (in ‘000) * 3,447 1,574 +118.9% M arket share on custom er base (%) * 34.2% 35.5% -1.3pt Network m arket share (%) 35.8
Slide 32: Maroc Telecom: Key Metrics
Maroc Telecom: First Half 2007 Key Metrics (Maroc Telecom clients only) (in thousand) 2007 2006 Change Number of fixed lines 1,280 1,311 -2.3% Total Internet access 444 332 +33.7% Number of mobile customers 11,713 8,924 +31.3% Prepaid customers 11,250 8,553 +31.5% Postpaid customers 401 339 +18.3% 3
Slide 33: Vivendi Games: Key Metrics
Vivendi Games: First Half 2007 Key Metrics First Half 2007 Best-selling games More than 9 million subscribers Titles Platform worldwide: 1. World of Warcraft Online 2. WoW Expansion Online more than 2m in North America 3. F.E.A.R PC / Consoles more than 1.5m in Europe 4. Scarface PC / Consoles
Slide 34: NBC Universal: First Half 2007
In US$ millions NBC Universal: First Half 2007 Revenues -15% -7%* Decline due to tough competition in Film and the Olympics in 2006 8,340 1H 2006 includes the DVD sales of King Kong 7,109 1H 2006 includes $684m in revenues from the Olympics H1 2006 H1 2007 * Excluding the Olympics in 2006 Segment Pr
Slide 35: Income from Equity Affiliates Analysis
First Half 2007 Income from Equity Affiliates Analysis In euro millions – IFRS 2007 2006 Income from equity affiliates 172 155 NBCU 143 157 Neuf Cegetel (40% in June 2007 / 35% in June 2006) 31 (2) Other (2) 0 35
Slide 36: First Half 2007: Interest
First Half 2007: Interest In euro millions – IFRS standards 2007 2006 Interest (64) (115) Interest expense on borrowings (including swaps) (156) (147) Financing rate (%) 4.00% 4.42% Average outstanding borrowings (in euro billions) 7.8 6.6 Capitalization of interest related to the acquisition of BMG
Slide 37: Other Financial Charges and Income
First Half 2007 Other Financial Charges and Income In euro millions - IFRS 2007 2006 Other financial charges and income (not included in Adjusted net income) 77 (519) Capital gain or loss on divestitures or investments 162 (490) o/w disposal of 10.18% of Canal+ France to Lagardère 239 - o/w write of
Slide 38: Income Tax Analysis
First Half 2007 Income Tax Analysis In euro millions - IFRS standards 2007 2006 Provision for income taxes - P&L (476) 651 Included in Adjusted net income (532) (463) Worldwide Tax System (year n) 269 291 Tax charge (801) (754) Not included in Adjusted net income 56 1,114 Worldwide Tax System (varia
Slide 39: Net Cash Flow Available
First Half 2007 Net Cash Flow Available In euro millions - IFRS 2007 2006 1. Consolidated cash flow from operations before capex,net 3,060 2,787 2. - Capital expenditures, net (capex, net) (926) (894) 3. Consolidated cash flow from operations (CFFO) 2,134 1,893 4. - Cash income taxes paid (899) (1,2
Slide 40: Glossary
Glossary › Adjusted earnings before interest and income taxes (EBITA): EBIT (defined as the difference between charges and income that do not result from financial activities, equity affiliates, discontinued operations and tax) before the amortization of intangible assets acquired through business c
Slide 41: Investor Relations Team
Investor Relations Team Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@vivendi.com Paris 42, Avenue de Friedland 75380 Paris cedex 08 / France New York 800 Third Avenue New York, Phone: +33.1.71.71.32.80 NY 10022 / USA Fax: +33.1.71.71.14.16 Phone: +1.212.5
Slide 42: Important Legal Disclaimer
Important Legal Disclaimer This presentation contains forward-looking statements with respect to the financial condition, results of operations, business, strategy and plans of Vivendi. Although Vivendi believes that such forward-looking statements are based on reasonable assumptions, such statement