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Vivendi — SFR — Non-Deal Roadshow (September 2009)

33 slides from Vivendi's roadshow presentation, September 2009

  1. Slide 1: SFR

    SFR Frank Esser SFR Chairman & CEO Pierre Trotot CFO September 2009

  2. Slide 2: Key messages

    Key messages 1. The acquisition of Neuf Cegetel is a success. 2. The New SFR has strong assets to capture growth opportunities. 3. Strict control of Opex and Capex is enforced. September 2009 – 2

  3. Slide 3: The acquisition of Neuf Cegetel is a success

    The acquisition of Neuf Cegetel is a success  The New SFR has delivered results on the top priorities for the merger in 12 months*:  Successful voluntary departure  Execute the integration plan plan, closed in June Completion of the ADSL migration plan (1m customers migrated)  Execute the synerg

  4. Slide 4: The New SFR is well positioned to create value

    The New SFR is well positioned to create value Telecoms markets are mature on SFR is an integrated fixed /mobile traditional voice offers and need to operator with strong assets and embrace the Internet opportunities of value creation Revenue growth of French YoY telecoms markets 1 Generating scale

  5. Slide 5: 1st leading alternative integrated operator in Europe

    1 1st leading alternative integrated operator in Europe 12 Over 12 billion € revenues 10 2008 revenues (€ bn) 8 6 4 2 * in ) ly ) e) ly U K K) y) i n n y e ) ly K K in U K y l y FR a a nc I ta U a n a a c ta U U a a n ta S (S p (It ra G 3G s ( rm Sp rm ra n d I ge ne Sp O 2 rm e I eb 3 H s e e e F i

  6. Slide 6: Strongly positioned on all segments of the telecoms market

    1 Strongly positionned on all segments of the telecoms market SFR covers all segments of the Consumer Enterprise Wholesale telecoms market  20,2m mobile customers,  140 k enterprise with 70% postpaid customers Addressing 25m customers  4,1m broadband Internet  200 operators and (as of mid 2009)

  7. Slide 7: SFR, a well-established and powerful brand

    2 SFR, a well-established and powerful brand  From a mobile-specialist brand to a global operator brand of spontaneous  SFR brand extended with success to the fixed awareness of the SFR brand as an ISP ISP market  Launch of “SFR Business Team” for Enterprises Sept. 2008 June 2009  A powerful and

  8. Slide 8: Leveraging SFR customer bases: Consumer market

    3 Leveraging SFR customer bases: Consumer market SFR households  Opportunity to increase the Fixed number of customers that are voice both fixed and mobile clients  Leverage mobile market shares to grow ADSL market shares Mobile above 30% clients ~13m SFR  Revenue growth households  Churn decrea

  9. Slide 9: Leveraging SFR customer bases: Enterprise market

    3 Leveraging SFR customer bases: Enterprise market  Strong opportunity to grow in Fixed enterprise Mobile enterprise fixed enterprise services by market share market share targeting mobile customers ~12% ~35%  Targeted cross-selling action Common fixed / mobile SFR enterprise customers (% of the t

  10. Slide 10: A strong multi-channel distribution and customer support

    A strong multi-channel distribution and customer support 4  A strong distribution network providing enhanced proximity and quality of service for our customers  800 “espace SFR” distributing both mobile and fixed offers Evolution of “espace SFR” stores 765 800 800 730 665 590 2004 2005 2006 2007 2

  11. Slide 11: The online channel provides cost benefits and flexibility

    The online channel provides costs benefits to SFR and 4 more flexibility to customers  SFR’s online shop Share of online distribution  Optimisation of SARC vs. physical 20% distribution 15%  Large choice of devices & 24/7 availability 10% X3  Multi-channel shopping combining online (sfr.fr) and

  12. Slide 12: The 1st alternative broadband infrastructure in France

    The 1st alternative broadband infrastructure in France 5  Leading mobile broadband network  ~75% population coverage in 3G/3G+  N°1 mobile network for the 5th year in a row (2008 Arcep quality audit)  The 1st alternative full-IP fixed broadband infrastructure  70% unbundled ADSL lines  Strong

  13. Slide 13: Optimising network synergies

    Optimising network synergies 5  Optimising networks by moving to an all-IP network infrastructure  Single IP core for all access networks (fixed & mobile) and services (voice & data)  Simplification of networks and  Evolution towards IP in the 2G/3G mobile infrastructure mutualisation leading ac

  14. Slide 14: SFR Revolution transformation plan for 2009-2012

    “SFR Revolution” transformation plan for 2009-2012 Due to fast evolutions … SFR is adapting by implementing a of the environment... transformation plan with two key focuses 1. Cut costs in order to control OPEX Examples  Achieve the cost synergy Voluntary departure plan  Internet is spreading plan

  15. Slide 15: Growth opportunity (I): Take-up of mobile Internet

    Growth opportunity (I): Take-up of mobile Internet Growing share of customers subscribing Strong mobile data revenue growth to unlimited bundles (voice & data) “Illimythics” offers customer base Mobile data revenues 3 934 m€ 2.1m 2 +34% 694 m€ 2 1 1 0 7 8 8 8 8 8 8 9 9 9 9 H1 2008 H1 2009 v -0 n-0 r

  16. Slide 16: Growth opportunity (I): SFR's applications for smartphones

    Growth opportunity (I): SFR’s applications for smartphones • SFR TV: Unlimited TV on 3G  290k downloads (launched on April 8th) • SFR WiFi: Unlimited access to SFR’s ~2m hotspots  191k downloads (launched on April 8th) • SFR Music: SFR Music radio stations  54k downloads (launched on June 12th) •

  17. Slide 17: Growth opportunity (II): Fiber

    Growth opportunity (II): Fiber With fiber deployment, SFR has the … and makes good progress in opportunity to strenghten its positions deployments on the broadband Internet market…  Increase broadband Internet market  Availability of commercial fiber shares in the main cities “neufbox” and service

  18. Slide 18: Growth opportunity (II): Fiber

    Growth opportunity (II): Fiber FTTH investments will depend on the coverage areas density: Fiber ADSL 4m to 5m households 4m/5m to 10m households 10m to 26m households Paris and suburbs, main French Other large cities cities Small towns and rural areas Dense areas Non-dense areas Rural areas  Own i

  19. Slide 19: Growth opportunity (III): Enterprise solutions

    Growth opportunity (III): Enterprise solutions  Building convergent solutions to meet k M2M connections demand for fixed/mobile offerings 750  E.g. launch of SFR Business Sfere: convergent solution for collaborative 500 messaging X2 250  50% market share in M2M solutions 0  Base of 563 k M2M con

  20. Slide 20: On track to deliver the synergy objectives

    On track to deliver the synergy objectives  SFR + Neuf Cegetel, a value creating combination: ~€250/300m cash synergies per year from 2011 80% on costs ~€250/300 m Unique branding : SFR IT optimisation Co st syn erg ies Network optimisation Opex: 70% Procurement economies of scale ~€175/200 m 

  21. Slide 21: Reduction of costs despite growth of customer base and traffic

    Reduction of costs despite significant growth of customer base and network traffic Opex excl. variable fees, interconnection … while the number of customers and and commercial costs down 7% YoY… network traffic continue to increase -7% # Mobile customers +4.9% # ADSL customers +11.3% Mobile traffic

  22. Slide 22: Control of Opex

    Control of Opex OPEX trends  Strong commercial results and YoY growth iPhone launch in H1 2009 have 100% increased commercial costs Commercial costs +8%  Interconnection costs are growing due to the success of mobile Interconnection abundance offers costs 50% (voice, data, +7% content) & taxes  I

  23. Slide 23: Control of CAPEX

    Control of CAPEX CAPEX trends  CAPEX evolution kept under 547 m€ control: 8.9% of total revenues in 506 m€ Fiber H1 2009 (11%)  Decrease in mobile CAPEX due ADSL Fixed & Variable CAPEX to reduced need to invest in 2G/3G 235 m€ (26%) broadband (47%) infrastructure 362 m€ CAPEX ADSL  Increase in fi

  24. Slide 24: H1 2009 Results

    H1 2009 Results September 2009 – 24

  25. Slide 25: SFR #1 in mobile net adds

    SFR #1 in mobile net adds Postpaid net adds market share  Very good commercial results, in particular in postpaid, with 39% net adds market share 45% 39%  In H1 2009, net growth by +559k mobile customers, 40% 35% of which +466k postpaid customers 35% 32% 31% 30% 26%  Success of iPhone: 280k units

  26. Slide 26: Continuation of excellent broadband Internet results

    Continuation of excellent broadband Internet results  SFR leader in ADSL net adds in Q2 with 33% market share despite increased competition ADSL net adds market share  Continued success of the "neufbox by SFR" 32% 33% 35% launched in October 2008 29% 30%  In H1 2009, ADSL customers growth +263k 2

  27. Slide 27: Key financials

    Key financials  Mobile: strong commercial investments In euro millions - IFRS H1 2009 H1 2008 Change  Revenues of €4,442m, +0.6% due to data revenues Revenues 6,140 5,289 + 16.1% (+34%), despite adverse economic conditions Mobile 4,442 4,416 + 0.6% (decrease in roaming traffic and out of bundle us

  28. Slide 28: 2009 prospects

    2009 prospects H2 2009  Monitoring of variable commercial investments (Opex / Capex) in growth  31% decrease in Mobile Termination Rates from July 1, 2009  Strong control of non-variable Opex  Continued decrease in mobile capex to sales ratio Full year 2009 outlook Mobile:  Services revenues: S

  29. Slide 29: Appendices

    Appendices September 2009 – 29

  30. Slide 30: H1 2009 H1 2008 Change (KPIs)

    H1 2009 H1 2008 Change MOBILE Customers (in ‘000) * 20,211 19,275 + 4.9% Proportion of postpaid clients * 69.5% 67.7% + 1.8pt 3G customers (in ‘000) * 7,190 4,739 + 51.7% Market share on customer base (%) * 34.3% 34.4% - 0.1pt Network market share (%) 36.0% 36.1% - 0.1pt 12-month rolling blended ARP

  31. Slide 31: SFR: Detailed revenues

    SFR: Detailed revenues IFRS H1 2009 H1 2008 % H1 2008 % Change on a Comparable in euro millions Actual Actual Change Comparable Basis* Basis * Outgoing revenues net of promotions 3,430 81% 3,461 82% -0.9% 3,472 82% -1.2% Mobile incoming 507 12% 424 10% 19.6% 424 10% Fixed incoming revenues 181 4% 19

  32. Slide 32: Investor Relations team

    Investor Relations team Jean-Michel Bonamy 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: +33.1.71.71.14.16 Phone

  33. Slide 33: Important legal disclaimer

    Important legal disclaimer This presentation contains forward-looking statements with respect to the financial condition, results of operations, business, strategy, plans and outlook of Vivendi. Although Vivendi believes that such forward-looking statements are based on reasonable assumptions, such

SFR — Non-Deal Roadshow (September 2009) on 6ix