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Vivendi — Vivendi Universal — Q1 2006 Earnings Presentation
36 slides from Vivendi's earnings presentation, May 19, 2006
Slide 1: First Quarter 2006 Earnings & 2006-2011 Outlook
First Quarter 2006 Earnings & 2006 - 2011 Outlook Jacques ESPINASSE Member of the Management Board & Chief Financial Officer IMPORTANT NOTICE: This presentation contains consolidated unaudited earnings established under IFRS. INVESTORS ARE STRONGLY ADVISED TO READ THE IMPORTANT LEGAL DISCLAIMER AT T
Slide 2: First Quarter Results Confirm Strong Progress
On a comparable basis * First Quarter Results Confirm Strong Progress In euro million - IFRS Q1 2006 % growth on a comparable basis Revenues 4,766 + 6.5% Earnings from operations 990 + 10.9% Adjusted net income (as published) 592 + 11.7% * See definitions at the end of this document
Slide 3: Operating Highlights
Operating Highlights Strong operating performance in Q1 2006: Revenues up 6.5% to €4,766 million in Q1 2006: Strong UMG performance despite a high comparable in Q1 2005 (+8.4%) Acceleration in the first quarter at CANAL+ Group (+7.7%) and Vivendi Games (+18.6%) Strong growth again at Maroc Telecom (
Slide 4: Adjusted Net Income Growth
First Quarter 2006 Adjusted Net Income Growth €62 million increase (+11.7%) in adjusted net income compared to Q1 2005 derives from: + €69m: improvement in earnings from operations + € 6m: increase in income from equity affiliates + € 2m: decrease in provision for income taxes - - € 5m: increase in
Slide 5: Consolidated Statement of Earnings
Consolidated First Quarter 2006 Statement of Earnings Including: Gain on Sogecable shares: €66m Gain on sale of YPSO: €56m Other: €(25)m * na: not applicable
Slide 6: Revenues up €292 million, +6.5% on a comparable basis
In euro million - IFRS Revenues up €292 million, +6.5% on a comparable basis First Quarter 2006 Revenues on a Comparable Basis 2005 2006 4474 4766 4,474 4,766 Universal Music Group V Games Canal+ Group SFR Maroc Telecom Other Q1 2005 1038 113 835 2075 423 -10 Q1 2006 1125 134 899 2135 483 -10 UMG Vi
Slide 7: Earnings from operations up €97 million, +10.9%
In euro million - IFRS Earnings from operations up €97 million, +10.9% on a comparable basis First Quarter 2006 Earnings from operations on a Comparable Basis 2005 2006 893 989.5 893 990 Universal Music Group V Games Canal+ Group SFR Maroc Telecom Holding & Corp. Other Q1 2005 37.9 10.8 102.7 599.9
Slide 8: Income from Equity Affiliates
Q1 2006 Q1 2005 Income from equity affiliates 68 62 including: NBC Universal neufCegetel / Cegetel SAS Elektrim Telekomunikacja (Telco) Other 71 (5) - 2 72 (11) - - 1 Income from Equity Affiliates In euro million - IFRS
Slide 9: Net Available Cash Flow
Net Available Cash Flow for the First Quarter 2006 In euro million - IFRS Q1 2006 Actual Q1 2005 Actual Consolidated cash flow from operations excluding capital expenditures 1,599 1,348 Capital expenditures (561) (207) Proceeds from sale of tangible and intangible assets 3 18 Consolidated cash flow
Slide 10: Financial Net Debt Evolution at end-March 2006
Dec. 31, 2004 Acquisitions Puts and FMV of pus CFFO Financing expenses & Taxes Dividends paid to minorities Debt Adjustment Sept. 30, 2005 Est. Dec. 31, 2005 Est -3.8 -4.7 -4.7 -4.7 -5.1 -5.1 -3.8 -0.9 -1 -1 -0.4 -0.1 -0.1 -5.1 -6.3 -2 Financial Net Debt Evolution at end-March 2006 Dec. 31, 2005 Cas
Slide 11: Business Performance & 2006 Guidance
Business Performance & 2006 Guidance Financial information presented in the forthcoming pages is in euro million on a comparable basis, unless otherwise mentioned
Slide 12: Vivendi Operates First Class Assets in Media & Telecom
Vivendi Operates First Class Assets in Media & Telecom Mobile / Fixed line Pay-TV Music Video Games 100% 100% 20% 100% 100% 56% 51% Film TV / Film TV / Film Mobile / Fixed line Global Content Local Distribution Platforms 35%
Slide 13: All Vivendi's Business Units are Growing and Profitable
All Vivendi's Business Units are Growing and Profitable Strong operating performance in the first quarter 2006: Revenues: + 6.5% to € 4,766 million EFO: + 10.9% to € 990 million Adjusted Net Income: + 11.7% to € 592 million On a comparable basis Revenues EFO Universal Music Group: €1,125m + 8.4% € 9
Slide 14: Universal Music Group
UMG had six of the top ten best sellers in the U.S. according to SoundScan, including the number 1 and number 2 UMG successfully appealed the 2003 TVT decision resulting in a recovery of a €50m cash deposit Agreements with MySpace.com for on-demand streaming of music videos and a joint venture recor
Slide 15: Universal Music Group: Key Metrics
Ventes de produits Licences Edition Numerique Autres 2005 Rev. 74 6 8 10 2 Universal Music Group: Key First Quarter 2006 Metrics Top selling artists in the quarter Top selling artists in the quarter Top selling artists in the quarter Top selling artists in the quarter Q1 2006 Million units Q1 2005 M
Slide 16: Vivendi Games: Achievements
Vivendi Games: First Quarter 2006 Achievements * New definition as from February 2006: In order to be consistent with industry definition, gamers in Internet Game Rooms (IGRs) in Korea include those who played in the last 30 days vs. the last 7 days under previous definition; ** +9.7% at constant cu
Slide 17: Vivendi Games: Key Metrics
Vivendi Games: Key First Quarter 2006 Metrics Paying customers of World of Warcraft at end-March 2006 Paying customers of World of Warcraft at end-March 2006 Region % North America & Europe 42% Asia 58% Worldwide 100% >6.4m Titles Platform World of Warcraft Online Ice Age 2 PC / Consoles Crash Racin
Slide 18: CANAL+ Group: Achievements
CANAL+ Group: First Quarter 2006 Achievements Revenues EFO 4,893 +285k Portfolio 4,893 +7.7% Q1 2005 Q1 2006 2005 2006 Est 835 899 835 899 2005 2006 Est 7.9 8.2 Q1 2005 Q1 2006 7.9m 8.2 m 2005 2006 Est 103 33 Q1 2005 Q1 2006 103 33 STUDIOCANAL acquired the independent movie distributor Optimum in th
Slide 19: CANAL+ Group: Key Metrics
March 05 March 06 CANAL+ 4916 5009 CanalSat 3012 3204 CANAL+ Group: Key First Quarter 2006 Metrics CANAL+ CANALSAT CANAL+ Group net portfolio* (in thousands) 7,928 +285 * Individual and collective subscriptions to CANAL+ and CANALSAT in mainland France and overseas territories. March 2005 March 2006
Slide 20: SFR: Achievements
SFR: First Quarter 2006 Achievements * Excluding MVNOs Revenues EFO 4,893 +1.32m (+8.3%) Customers * 4,893 +2.9% Q1 2005 Q1 2006 2005 2006 Est 2075 2135 2,075 2,135 2005 2006 Est 16006 17328 Q1 2005 Q1 2006 16.0 m 17.3 m 2005 2006 Est 599.9 666.1 Q1 2005 Q1 2006 600 666 Increase in shareholding in n
Slide 21: SFR: Key Metrics
SFR: Key First Quarter 2006 Metrics (as of end-March including SRR) 2006 2005 Growth Customers (in '000) * 17,328 16,006 +8.3% Proportion of postpaid customers * 63.7% 61.2% +2.5 points Vodafone live! customers (in '000) * 5,268 2,692 +95.7% 3G customers (in '000) * 1,352 50 na Market share on custo
Slide 22: Maroc Telecom: Achievements
Maroc Telecom: First Quarter 2006 Achievements Revenues EFO 4,893 +27.8% Mobile Customers 4,893 +14.2% Q1 2005 Q1 2006 2005 2006 Est 423 483 423 483 2005 2006 Est 6709 8576 Q1 2005 Q1 2006 6,709 k 8,576 k 2005 2006 Est 180 207 Q1 2005 Q1 2006 180 207 Recent ADSL price cuts Launch of a call for tende
Slide 23: Maroc Telecom: Key Metrics
Maroc Telecom: Key First Quarter 2006 Metrics (as of end-March, excluding Mauritel) 2006 2005 Growth Number of fixed lines (in '000) 1,336 1,335 +0.1% Total Internet accesses (in '000) 306 122 x2.5 Including ADSL accesses (in '000) 296 91 x3.3 Number of mobile clients (in '000) 8,576 6,709 +27.8% Pr
Slide 24: 2006 Guidance
2006 Guidance 2006 Adjusted net income growth: Revised upwards to +16%, approx. € 2.4bn 2006 dividend pay out: At least 50% of Adjusted net income
Slide 25: 2006-2011 Outlook
2006 - 2011 Outlook Jean-Bernard LEVY Chairman of the Management Board
Slide 26: Our Strategy: Innovation & Leadership
Our Strategy: Innovation & Leadership > Create and market to our subscribers new broadband and mobile services > Strengthen our leadership positions in our complementary content and distribution businesses in order to
Slide 27: Our Strategy: Advantages of Scale
Our Strategy: Advantages of Scale > Better anticipation of new technologies > Ability to initiate large-scale internal investments (examples: French League 1 soccer, video games, etc.) > Shared experience and full involvement of operating teams on a global scale > Risk sharing > Ability to seize opp
Slide 28: Our Strategy: Already Ahead of Our Competitors
Our Strategy: Already Ahead of Our Competitors > Our competitors in telecommunications invest in the media sector: content platforms, acquisition of exclusive rights, etc. > Our competitors in content creation want to control (at least partially) their distribution: purchase of network infrastructur
Slide 29: 2011 Outlook
2011 Outlook 2006-2011 EFO average growth: Between 8% to 10% per year 2011 Adjusted Net Income: Between €3.5 billion to €4 billion * * Including the assumption that all deferred tax assets will have been utilized by end of 2010.
Slide 30: Details on Accounts
Details on First Quarter 2006 Accounts
Slide 31: Interest & Other Financial Charges & Income
First Quarter 2006 Interest & Other Financial Charges & Income Q1 2006 Q1 2005 Interest (49) (44) Interest expense on gross debt (excluding swap) Average borrowing cost (%) Average amount of borrowings (in euro billion) Interest swap Interest income on cash & cash equivalent (72) 4.34% 6.5 1 22 (56)
Slide 32: Income Tax Analysis
Q1 2006 Q1 2005 Provision for income taxes (141) (163) Included in Adjusted net income (158) (160) Worldwide Tax System (for Year "n") 145 123 Underlying tax charge (303) (283) Not included in Adjusted net income 17 (3) Worldwide Tax System (deferred tax n+1/n) 3 2 Other taxes 14 (5) Cash income tax
Slide 33: SFR: Key Metrics
SFR: Key First Quarter 2006 Metrics (as of end-March including SRR) 2006 2005 Growth Customers (in '000) * 17,328 16,006 +8.3% Vodafone live! customers (in '000) * 5,268 2,692 +95.7% 3G customers (in '000) * 1,352 50 na Market share on customer base (%) * 35.7% 35.6% +0.1 point 12-month rolling blen
Slide 34: Glossary
Glossary Adjusted Net Income: includes earnings from operations, other income from ordinary affiliates, income (loss) from equity affiliates, interest, and tax and minority interest relating to these items. As a consequence, it excludes other charges from ordinary activities (corresponding to impair
Slide 35: Investor Relations contacts
Laurence Daniel IR Director laurence.daniel@vivendi.com Edouard Lassalle IR Analyst edouard.lassalle@vivendi.com IR Team Eileen McLaughlin IR Director eileen.mclaughlin@vivendi.com Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@vivendi.com For any financial
Slide 36: Important Legal Disclaimer
Important Legal Disclaimer Vivendi is quoted on the NYSE and on Euronext Paris SA. This presentation contains "forward-looking statements" as that term is defined in the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of the company's future pe