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Vivendi — CA Cheuvreux Spring European and Middle East Large Cap Conference 2008
36 slides from Vivendi's conference presentation, May 19, 2008
Slide 1: CA Cheuvreux Spring European and Middle East Large Cap Conference
May 19, 2008 CA Cheuvreux Spring European and Middle East Large Cap Conference Philippe Capron Member of the Management Board & Chief Financial Officer IMPORTANT NOTICE: Financial results for the fiscal year ended 31st December 2007 Financial statements audited and prepared under IFRS Investors are
Slide 2: Vivendi: A new dimension
Vivendi: A new dimension 2007-2008: 2007 Adjusted Net Income up 8.3% and proposed dividend up 8.3% Above initial target Closed or announced several strategic transactions to strengthen our businesses Increasing revenues from €20Bn in 2006 to approximately €30Bn in 2009 In 2008, focus on execution to
Slide 3: Vivendi: A leader in digital entertainment and a leader in all its businesses
Vivendi: A leader in digital entertainment and a leader in all its businesses 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 ~78% of neuf cegetel 53% 100% 20% # 1 in fixed-line, mobile and internet World leader in in
Slide 4: Vivendi confirms digital entertainment strategy
Vivendi confirms digital entertainment strategy Capitalize on consumer demand for mobility and broadband to drive new services and new revenue streams in the world of digital entertainment Further strengthen our leadership in superior content creation and distribution businesses to enhance growth an
Slide 5: A strategic transaction in each of our businesses
A strategic transaction in each of our businesses Over the last 12 months, the following transactions were finalized: UMG: Acquisition of Bertelsmann Music Publishing Acquisition of Sanctuary Canal + Group: Acquisition of TPS and creation of Canal + France Maroc Telecom: Acquisition of 51% of Onatel
Slide 6: Vivendi Games and Activision to create Activision Blizzard: a worldwide leader
Vivendi Games and Activision to create Activision Blizzard: a worldwide leader Strategic rationale Investment in a high growth sector with excellent margins Leading and complementary businesses Unique portfolio of franchises on Consoles, PC, subscription-based online games World class management tea
Slide 7: Activision Blizzard Earnings Power
Activision Blizzard Earnings Power Calendar 2009* Operating Margin : 25%+ Revenue : $4.3 Billion Operating Income : $1.1 Billion EPS : $1.20+ Activision Blizzard business growth of 14% with 3-4 points of Improve Sierra’s operating margin expansion performance by $160 million, over 2 years delivering
Slide 8: SFR / Neuf Cegetel: A leading Internet player
SFR / Neuf Cegetel: A leading Internet player Strategic rationale Create a real competitor to France Telecom in all market segments Offer a complete service to meet customers’ changing needs (incl. enterprise) Change in scale justifies fiber optic network investment Accelerate convergence opportunit
Slide 9: 2007: Strong year for Vivendi
2007: Strong year for Vivendi Revenues: €21,657m ; + 8.0% EBITA: €4,721m ; + 8.0% Adjusted Net Income: €2,832m ; + 8.3% Cash Flow From Operations: €4,881m ; + 9.3% Dividend proposal: €1.30 per share, up 8.3% 53.5% distribution rate of the adjusted net income, €2.44 per share 9
Slide 10: Our 2008 priorities
Our 2008 priorities Successful outcome of bidding process for football rights by Canal+, 9 23% below previous contract Close the merger to create Activision Blizzard Close the acquisition of Neuf Cegetel by SFR Focus on efficient execution of previously announced transactions Deliver strong results
Slide 11: Highlights of first quarter 2008
Highlights of first quarter 2008 UMG strongly improved results: integration of BMGP and Sanctuary, and continued increase in digital revenues Canal + Group’s strong performance driven by subscription base, lower subscriber acquisition and programming costs SFR’s mobile activity return to growth: inc
Slide 12: Q1 2008: Quality results delivered by each business, offset by timing and non-recurring items
Q1 2008: Quality results delivered by each business, offset by timing and non-recurring items Revenues: €5.3bn, up 5.2% (+6.9% at constant currency) EBITA: €1.2bn, down 5.6% (-3.9% at constant currency) Adjusted Net Income: €697m, down 9.6% 12
Slide 13: First quarter 2008 revenues
First quarter 2008 revenues Consolidation of % Change at BMGP since constant May 2007 and In euro millions - IFRS Q1 2008 Q1 2007 % Change currency Sanctuary since August 2007 Universal Music Group 1,033 1,027 + 0.6% + 6.8% Canal+ Group 1,115 1,067 + 4.5% + 4.2% SFR 2,302 2,096 + 9.8% + 9.8% o/w Mob
Slide 14: First quarter 2008 EBITA
First quarter 2008 EBITA Two extra days of Ligue1 In euro millions - IFRS Q1 2008 Q1 2007 % Change matches vs Q1 07: -€32m Transition costs of Universal Music Group 111 57 + 94.7% -€27m in Q1 08 vs. -€5m in Q1 07 Canal+ Group 170 164 + 3.7% SFR 624 643 - 3.0% Launch of World of o/w Mobile 652 647 +
Slide 15: 2008 goals confirmed
2008 goals confirmed Strong performance of all businesses allows Vivendi to confirm 2008 goals: We will deliver a strong operating performance in constant perimeter (excluding Neuf Cegetel and Activision), with a 2008 profit growth expected to be similar to 2007: Driven by Canal+ Group, Maroc Teleco
Slide 16: Vivendi: Exceptionally well positioned
Vivendi: Exceptionally well positioned Growth dynamics: Strong customer demand for content distributed through fixed and mobile broadband networks Creative talents and innovation drive market share gains Investment in fastest growing segments: videogames, on-line content, 3G, fixed broadband… Penetr
Slide 17: Appendices
vivendi Appendices
Slide 18: Vivendi: 2007 Adjusted Statement of Earnings
Vivendi: 2007 Adjusted Statement of Earnings 2007 2006 Change In euro millions – IFRS in m€ % 1 Revenues 21,657 20,044 1,613 + 8.0% 2 EBITA 4,721 4,370 351 + 8.0% 3 Income from equity affiliates 373 337 36 + 10.7% 4 Interest (166) (203) 37 + 18.2% 5 Income from investments 6 54 (48) - 88.9% 6 Provis
Slide 19: UMG: Revenues evolution
UMG: Revenues evolution Constant €4,955m in euro millions - IFRS 2007 2006 Growth currency €4,870m +€229m -€283m -€235m Revenues 4,870 4,955 -1.7% 3.0% -€81m +€285m Digital Physical Restructuring costs (67) (15) Sales Other BMGP FX Sanctuary EBITA 624 744 -16.1% -12.9% Margin % 12.8% 15.0% CFFO 559
Slide 20: UMG: digital revenues increased by 51% to €676m in 2007
UMG: digital revenues increased by 51%* to €676m in 2007 Digital revenues account for 14% of total revenues and 22% of North America recorded music revenues Achieved 6 out of the top 10 digital albums, including the top 4 and 8 out of the top 10 digital tracks including the top 6 in the U.S. ** Digi
Slide 21: Universal Music Group strengthens its global leadership Integration of BMGP on track
Universal Music Group strengthens its global leadership Integration of BMGP on track The acquisition of 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, irre
Slide 22: 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% 22
Slide 23: Two complementary offers
Two complementary offers “Expect more from TV” “The experts of all your passions” 5 general-interest premium channels 300 channels covering all themes with a pick-of-the-best content A selection of the best channels, including Recent and exclusive programs 58 exclusive ones A unique model A wide-spr
Slide 24: Canal+ Group: 2007 revenues
Canal+ Group: Canal+ Group 2007 revenues: +20.2% in euro millions - IFRS 2007 2006 Growth Canal+ France revenues: +24.9% Revenues 4,363 3,630 20.2% Integration of TPS Canal+ France 3,747 3,001 24.9% 4% organic growth*: 3% subscription base, EBITA excluding transition costs 490 252 94.4% 1% ARPU Tran
Slide 25: Focus on the TPS integration
Focus on the TPS integration: €150m synergies already achieved in 2007 2010 Realized To be done In euro millions Target in 2007 2008-2010 Distribution 50-75 50 0-25 Content 200-250 80 120-170 Technology, broadcasting & structure 50-75 20 30-35 ≥350 150 ≥200 The successful outcome of the French “Ligu
Slide 26: Canal+ Group: 2010 objectives are confirmed
Canal+ Group: 2010 objectives are confirmed Robust growth in projected revenues: > €5 billion in annual income 11.5 million subscriptions to CANAL+ France 2010 EBITA > €1 billion Significant cost synergies projected: > €350 million euros 26
Slide 27: SFR: #1 in net adds in metropolitan France in 2007
SFR: SFR: #1 in net adds in metropolitan France in 2007 in euro millions - IFRS 2007 2006 Growth Return to growth in mobile revenues: Revenues 9,018 8,678 3.9% EBITDA 3,431 3,449 -0.5% Mobile revenues: +1.6% Mobile EBITDA 3,476 3,462 0.4% EBITA 2,517 2,583 -2.6% Mobile service revenues +0.9%, Mobile
Slide 28: SFR: Confirmed leader in mobile broadband
SFR: Confirmed leader in mobile broadband SFR leader in 3G/3G+ Successful mobile Internet access offers: 250,000 “Illimythics” customers to date 40,000 3G+ USB modems for laptops since July 2007 More than 350,000 mobile TV subscribers at the end of 2007 SFR: #1 music platform in France for downloads
Slide 29: SFR: Operational excellence
SFR: Operational excellence SFR: leader in Margins 2007 Mobile EBITDA margin SFR Orange Bouygues 39.6% 38.6% 27.8% SFR: leader in value per client 2007 Mobile EBITDA share - 3 operators SFR Orange Bouygues EBITDA 40.1% 44.5% 15.4% Revenues 37.3% 42.4% 20.3% Clients 35.9% 46.4% 17.7% 2007 Mobile EBIT
Slide 30: SFR: First quarter 2008 key metrics
SFR: First quarter 2008 key metrics (including SRR) Q1 2008 Q1 2007 Change Customers (in ‘000) * 18,823 17,910 +5.1% Proportion of postpaid clients * 66.1% 65.4% +0.7pt 3G customers (in ‘000) * 4,428 3,133 +41.3% Market share on customer base (%) * 33.8% 34.4% -0.6pt Network market share (%) 36.1% 3
Slide 31: Neuf Cegetel 2007 key figures
Neuf Cegetel 2007 key figures Neuf Cegetel key figures in millions of euros, IFRS 2006 2007 07 vs 06 Net adds ADSL customers, FY 1,000 1,052 +5.2% Net adds ADSL customers, Q4 170k * 101k -41% Revenues 2,897 3,348 +16% COGC (1,737) (1,967) +13% Gross Margin 1,160 1,381 +19% Selling costs (440) (503)
Slide 32: Maroc Telecom: Mobile customer base up 30%, to 15.3m
Mobile customer base up 30%, to 15.3m Maroc Telecom: Maroc Telecom: Constant 13.3m customers: +24.5% vs. 2006 in euro millions - IFRS 2007 2006 Growth currency Mauritel: Revenues 2,456 2,053 19.6% 21.8% 905k customers: + 50% vs.2006 EBITDA 1,397 1,194 17.0% 19.2% Onatel: 564k customers: x2.3 vs.2006
Slide 33: Vivendi Games
Vivendi Games: Outstanding performance driven by Blizzard Entertainment: Constant Over €1 Bn in revenues in 2007, for the first time in euro millions - IFRS 2007 2006 Growth currency +26.6% revenue growth (+33.5% at constant currency) Revenues 1,018 804 26.6% 33.5% EBITA 181 115 57.4% 59.7% Excludin
Slide 34: World of Warcraft
World of Warcraft: Exceptional increase in both box sales and subscribers Successful launch of World of Warcraftt:The Burning Crusade, Blizzard Entertainment’s first expansion pack Announcement of the second expansion pack: World of Warcraft, Wrath of the Lich King World of Warcraft subscribers +2 m
Slide 35: 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 Phone: +33.1.71.71.32.80 800 Third Avenue New York, NY Fax: +33.1.71.71.14.16 10022 / USA Phone: +1.212.5
Slide 36: 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
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