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Vivendi — Vivendi Universal — Investor Presentation (July 2004)
34 slides from Vivendi's investor presentation, Jul 21, 2004
Slide 1: Introduction to SFR Cegetel
Introduction to SFR Cegetel Frank Esser - Chairman & CEO Pierre Trotot - Senior Executive Vice President - Finance & Administration IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT DISCLAIMER AT THE END OF THIS PRESENTATION.
Slide 2: SFR Cegetel group structure
SFR Cegetel group structure 55.8% 43.9% Minority shareholders 0.3% 35% 65%
Slide 3: SFR Cegetel performances in 2003
Cegetel (excl. TD) SFR Cegetel performances in 2003 SFR 7 067 M 7 574 M Turnover in M - - 9 % + 7% + 9 % 1 432 M 1 964 M Ebit in M + 37% + 29 % reported reported reported reported
Slide 4: SFR Cegetel performances in Q1-2004
SFR Cegetel performances in Q1-2004 Cegetel SFR + 9 % + 14% + 15 % 1 807 M 2 058 M Turnover in M Ebit in M 471 M 552 M + 17% + 18 % Pro-forma (1) Pro-forma (1) (1) : Pro-forma assumes consolidation of Telecom Developement as if the merger had occurred on 01-01-2003
Slide 5: Key SFR Cegetel Group figures at end 2003
Key SFR Cegetel Group figures at end 2003 Pro forma 2002 2003 2003 vs 2002 2004 guidance 2003 Turnover M3 7 067 7 574 7 734 +7% Grow more > 7% o.w. mobile 6 163 6 748 6 630 +9% (excluding mobile to mobile) o.w. fixed 905 826 1 104 -9% EBITDA M3 2 314 2 741 2 907 +18% o.w. mobile 2 340 2 727 2 727 +1
Slide 6: Significant growth levers for mobile activities
Significant growth levers for mobile activities Grow customer base Increase voice usage Develop non-voice revenues 3 main drivers for SFR revenue growth
Slide 7: Grow customer base: penetration in France well under European average
Grow customer base: penetration in France is well under European average Penetration in France is 15 pts below European average The young and senior people are the main levers for customer base growth in the coming years Penetration rate in major European countries March-2004 Penetration evolution p
Slide 8: SFR hosts the first VNO in France
SFR hosts the first VNO in France SFR and Debitel signed the first VNO agreement in France in June 2004 Debitel, the largest mobile distributor in Europe: 10 M customers in Europe, 210 M Euros in turnover in 2003 in France and 80 retail shops under the Videlec brand SFR welcomes new players that cre
Slide 9: SFR, leader in net additions in 2003 for the first time
Grow customer base: SFR, leader in net additions in 2003 for the first time Source: ART Net adds FY-03 57% 62% 43% 38% SFR Rest of the market Total net adds Contract net adds Source: ART SFR has captured the largest share of the 2003 total market growth : 38% market share of net new customers in 200
Slide 10: SFR, a favourable customer mix evolution
Contract Prepaid 12 555 13 546 14 724 57,7% 53,1% 50,5% 49,5% 46,9% 42,3% Dec-01 Dec-02 Dec-03 Source: ART 000 customers Grow customer base: SFR, a favourable customer mix evolution The SFR customer base grows faster than the market, and is focusing on high value customers 58,5% contract customers a
Slide 11: Increase voice usage: SFR, a positive trend in voice usage
+ 7% Increase voice usage: SFR, a positive trend in voice usage Voice traffic keeps growing thanks to new offers: the average minutes of usage increased 7% over last year SFR voice usage is among the highest in Europe Average Usage per User (AUPU) Average Usage per User (AUPU) 256 mns + 7% 240 mns M
Slide 12: Increase voice usage: SFR ARPU still growing
662 3 635 3 631 3 423 3 431 3 435 3 165 3 176 3 178 3 March-03 Dec-03 March-04 March-03 Dec-03 March-04 March-03 Dec-03 March-04 SFR keeps a high level of ARPU in each segment Note: SFR ARPU = turnover net of promotions, excluding equipment sales, roaming-in and mobile interconnection divided by SFR
Slide 13: Non-voice service: a new potential for growth
B&W browsing Light personalization MMS Multimedia personalization Content downloads MMS video TV Video downloads Messaging WAP B&W Multimedia Video time Quality and value-added services 1. 2. 3. 4. Non-voice service: a new potential for growth GSM - GPRS 3G SMS Color and Photo handsets Mobile Intern
Slide 14: SFR, the reference operator for SMS in France
Non-voice service: SFR, the reference operator for SMS in France SFR is the market leader for SMS in Q4-2003 (44% market share) As of March 2004, 27% of SFR customers use a color screen terminal, 7% use a camera phone 20 27% March 2003 16 March 2004 3 328 k 2 362 k 7% 5% 0% FY-02 FY-03 Color screens
Slide 15: A SFR - Vodafone partnership for value creation
Non-voice service : a SFR - Vodafone partnership for value creation Vodafone Live! is the leading mobile portal in Europe Vodafone Live! is used in 16 countries with more than 7.5 million customers at the end of March 2004 (excl. Japan) Exclusive terminals and handsets, unique user experience 584,00
Slide 16: Vodafone Live!, a significant impact on usage
+ 49% * 12 month rolling data ARPU per MMS sent X 6 average customer 433 Game download X 3 403 Ringtones download X 3 29 3 Number of GPRS session X 4 ARPU increase > 10% Q1-03 Dec-03 Q1-04 Vodafone Live! customer ARPU should increase by more than 10% Non-voice service usage takes off : 6 M of MMS se
Slide 17: SFR commitment in 3G
Non-voice service : SFR commitment in 3G Pre-launch of VMCC 2.5/3G in 3 cities (Paris - Lille - Lyon) May 2004 Commercial launch of 3G VMCC in 5 conurbations Roaming agreement with 5 countries, 12 at year-end June 2004 November 2004 Commercial launch of Vodafone live! 3G for the residential market R
Slide 18: SFR target: retain the best customers
25% 21% 5% 6% 13% 9% 8% FY-02 FY-03 2001 2002 2003 Acquisition and retention costs as % of network revenues Acquisition costs Retention costs Contract churn rate evolution SFR target: retain the best customers As the market matures, a larger share of costs is allocated to customers' retention This f
Slide 19: SFR invests in the most profitable customers
Market share prepaid base Market share contract base Prepaid acquisition costs in per gross new add Contract acquisition costs in per gross new add SFR invests in the most profitable customers Total acquisition costs have been reduced by 10% over year This does not prevent SFR to gain market shares
Slide 20: SFR Cegetel: Fixed activities
SFR Cegetel > Fixed activities
Slide 21: Cegetel, the largest alternative fixed player in France (1)
Cegetel, the largest alternative fixed player in France (1) Source: Oddo, Cegetel Fixed operators Revenues (2003) Fixed operators Ebitda (2003) 2002 A 2003 A 18 703 17 643 7 837 7 447 1 370 1 354 992 600 485 580 107 180 18 101 30 75 France Telecom Cegetel TD LD Com Tele 2 France Telecom Cegetel TD L
Slide 22: Cegetel, the largest alternative fixed player in France (2)
Cegetel, the largest alternative fixed player in France (2) Wholesale market : #1 with more than 50% market share Corporate market : co-leader with approx. 19% market share Residential market : #2 with approx. 23% market share Cegetel represents 28% of the value of the alternative fixed market in 20
Slide 23: Cegetel revenue and profitability growth
1998 1999 2000 2001 2002 2003 215 539 941 1290 1441 1354 Cegetel revenue and profitability growth Cegetel revenue growth 1998-2003 (M) Cegetel Ebitda growth 1998-2003 (M) 1998 1999 2000 2001 2002 2003 EBITDA -289 -114 30 4 107 168 CAGR 98-02 : +59% M NB: pro forma incl. TD
Slide 24: Significant growth levers for fixed activities
Significant growth levers for fixed activities Strengthen the leading alternative network in France Grow customer base Focus on broadband Internet 3 main drivers for Cegetel revenue and profitability growth
Slide 25: Strengthen the largest alternative network in France (1)
Strengthen the largest alternative network in France (1) 100% digital network for voice, data and Internet 20,000 km of optical fiber cable 40 Bn min on the Cegetel network, more than 15% of total commuted traffic in France 20 local-loops in optical fibers in major French business centers - 800 conn
Slide 26: Strengthen the largest alternative network in France (2)
Total traffic on the Cegetel network Cegetel total commuted traffic increased by 18% over last year 2001-2003 CAGR Cegetel traffic reached 23% compared to 6% for the French market CAGR 98-02 : 1370 1354 +59% 1290 941 539 215 1998 1999 2000 2001 2002 2003 NB: pro forma incl. TD 2001 2002 2003 Market
Slide 27: Grow customer base (1)
Grow customer base (1) Corporate Consumer/Soho Wholesale 0.28 0.27 0.45 Cegetel 2003 revenues 1,354 M Backbone network 20,000 business customers Voice VPN Data Internet services Corporate 3.7 M client lines Voice Internet services (yc. broadband) Residential Wholesale Corporate Wholesale 28% 45% Res
Slide 28: Grow customer base (2)
Grow customer base (2) + 54% 72% of the CAC 40 companies are Cegetel customers for voice and/or data services + 10% Voice client lines in 000 Installed data sites 3 767 3 431 21 581 2 758 14 015 9 487 March-02 March-03 March-04 March-02 March-03 March-04 Cegetel, a growing activity on the residentia
Slide 29: Grow customer base (3)
Grow customer base (3) Voice Data Call centers - 800 numbers More than 20 000 business customers
Slide 30: Focus on broadband Internet (1)
Focus on brodband Internet (1) Accelerate the unbundling process in 2004 Roll-out of ADSL: 150 M Capex o.w. 100 M in 2003-2005 600 DSLAM at the end of June 2004 Gain ADSL market shares: 275,000 unbundled ADSL customer lines (retail and wholesale) at end of March 2004 40% increase in Cegetel Internet
Slide 31: Focus on broadband Internet (2)
Focus on broadband Internet (2) Nov-2003 Jan-2004 Q2-2004 Launch of first unbundled offer for business and wholesale customers Launch of first ADSL offers for the mass market (512 Kb/s - 1024 Kb/s - 2048 Kb/s) Launch of the 4 Mb/s offer for the mass market Launch of voice / ADSL bundles Launch of AD
Slide 32: The strengths of Cegetel on broadband Internet
The strengths of Cegetel on broadband Internet Alcatel infrastructure equipment of the last generation and supporting all new services VoIP, TVoADSL The willingness to cut the link between customers and France Telecom Commercial agreement with FT to provide single bill as from Q4-2004 Total unbundli
Slide 33: Telecom is and will remain a growth sector in France
Telecom is and will remain a growth sector in France SFR Cegetel Group, through SFR and Cegetel is a robust and growing operator SFR and Cegetel are best positioned to gain leadership positions, especially in emerging markets (ADSL, UMTS)
Slide 34: Legal Disclaimer
LEGAL DISCLAIMER This presentation contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements
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