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Vivendi — Investor Presentation (July 2010)
33 slides from Vivendi's investor presentation, July 2010
Slide 1: A world leader in communications and entertainment
A world leader in communications and entertainment Investor Presentation July 2010 IMPORTANT NOTICE: Financial statements unaudited and prepared under IFRS Investors are strongly urged to read the important disclaimer at the end of this presentation
Slide 2: Vivendi: Group profile
Vivendi: Group profile A world leader in communications and entertainment, ideally positioned to capture growing demand from consumers for mobility, broadband and digital content 73 million subscriptions representing 75% of sales in 2009 49,000 employees, premium content and best-in-class networks
Slide 3: Vivendi today: Fully controlled leadership positions
Vivendi today: Fully controlled leadership positions 100% 100% / 80% 56% #1 in pay-TV #1 alternative telecom #1 worldwide in France in France in music 53%* 59%* 100% #1 in telecom #1 worldwide in #1 alternative telecom in Morocco video games in Brazil * Based on shares outstanding Investor Presentat
Slide 4: Vivendi is ideally positioned to capture growing demand from consumers
Vivendi is ideally positioned to capture growing demand from consumers for mobility, broadband and digital content New technologies enable consumers, wherever they are, to access a multitude of interactive services and the Internet Vivendi is a major player in this new digital era: Creating conten
Slide 5: Another year of record results in 2009, record dividend
Another year of record results in 2009, leading to a record dividend distribution of €1.7bn in cash (€1.40 per share) EBITA CFFO 5,237 +9% p.a. CAGR 5,390 +4% p.a. CAGR 5,055 4,881 4,953 4,721 4,466 4,354 4,370 4,157 3,985 EUR millions , IFRS EUR millions , IFRS 3,504 2004 2005 2006 2007 2008 2009 2
Slide 6: Vivendi enjoys a strong financial position
Vivendi enjoys a strong financial position €5.7bn of undrawn credit lines at Vivendi SA at end March 2010 No significant debt reimbursement before 2012 Committed to BBB rating*, and remaining unchanged after FY2009 earnings release including €550m class action provision Controlled financing costs *
Slide 7: Vivendi will continue to allocate capital to maximize shareholder returns
Vivendi will continue to allocate capital to maximize shareholder returns Continued investments in content and networks to leverage Vivendi’s leading communications and entertainment assets Deliver dividends to shareholders with a distribution rate of at least 50% of Adjusted Net Income Buy out mino
Slide 8: Vivendi's innovations has driven commercial performance
Vivendi’s innovations has driven commercial performance Major initiatives in 2009… Launch of iPhone to SFR customers, accelerating mobile internet penetration Launch by SFR of convergent offers to SME Launch by UMG of VEVO, a premium music video service, achieving immediately #1 position in the US E
Slide 9: 2010 is off to a good start
2010 is off to a good start Very strong first quarter earnings in line with full year 2010 guidance 14% EBITA increase in Q1 2010 in challenging economic environment thanks to: Activision Blizzard: Outstanding growth benefiting from tremendous product success SFR: Growth in postpaid mobile and b
Slide 10: U.S. Supreme Court's decision provides breakthrough for class action
U.S. Supreme Court’s recent decision provides huge breakthrough for favorable outcome to Class action lawsuit On January 29, 2010, a jury decided against Vivendi, but cleared its former executives. Vivendi was found to have acted recklessly between October 2000 and August 2002. Based on ad-hoc exper
Slide 11: Class action: A long process
Class action: A long process Next steps: Entry of verdict by the judge, to be challenged by Vivendi Appointment of an agent to run claims and damages process The amount of the potential damages is uncertain and will not be known for at least 12 to 18 months Full judgment entered by the judge
Slide 12: Our objectives for 2010
Our objectives for 2010 We have planned 2010 with a reasonably conservative stance, due in part to the continued uncertainties relating to the broader macroeconomic environment and consumer demand, as well as growing regulatory pressure In 2010, we remain committed to building growth for the future
Slide 13: Outlook for 2010
Outlook for 2010 Confirmed 2010 guidance*: Slight increase in EBITA and high dividend maintained EBITA above €620m (vs above €600m) Slightly upgraded Double digit EBITA margin Confirmed Mobile: Slight decrease in EBITDA Confirmed Broadband & Fixed: Increase in EBITDA (vs slight increase) Sli
Slide 14: A world leader in communications and entertainment
A world leader in communications and entertainment #1 Video Games Worldwide #1 Music Worldwide #1 Alternative Telecoms France #1 Telecoms Morocco #1 Alternative Telecoms Brazil #1 Pay-TV France Investor Presentation – July 2010 14
Slide 15: Management compensation is aligned with shareholders' interests
Management compensation is aligned with shareholders’ interests Incentive for Management based on financial and share price performances Variable compensation based on financial targets (Adjusted net income, Cash flow from operations, ROCE) and achievement of strategic priority objectives defined
Slide 16: Subscriptions model offers resilience in Europe, non-Euro exposure
Vivendi’s subscriptions model offers resilience in Europe (73% of sales), combined with non-Euro exposure for 48% of valuation 2009 revenues* Sum-of-the-part valuation** Breakdown by currencies Breakdown by currencies MAD MAD BRL USD 8% Other 18% 2% Other 11% 6% BRL 2% 8% GBP 5% USD 19% GBP 1% EUR 5
Slide 17: USD/EUR exchange rate evolution favorable to Vivendi
USD/EUR exchange rate current evolution is favorable to Vivendi given its US exposure 1.60 1.55 1.50 1.45 1.40 1.35 1.30 1.25 1.20 1.15 01-Jan-04 01-Jul-04 01-Jan-05 01-Jul-05 01-Jan-06 01-Jul-06 01-Jan-07 01-Jul-07 01-Jan-08 01-Jul-08 01-Jan-09 01-Jul-09 01-Jan-10 USD/EUR exchange rate has evolved
Slide 18: Greece does not jeopardize economic recovery in Europe
Greece (2% of European GDP) does not jeopardize economic recovery in Europe and unemployment is stabilizing slightly above long term average: France confirms its resilience among European countries Real GDP * Unemployment rate * France (red) and Europe-27 (blue) France (red) and Europe-27 (blue) Gap
Slide 19: Q1 2010 earnings
vivendi Q1 2010 earnings
Slide 20: Very strong Q1 2010 results
Very strong Q1 2010 results Revenues: € 6,924 m + 6.0 % EBITA: € 1,590 m + 14.1 % Adjusted Net Income: € 736 m + 13.4 % Net Income group share: € 598 m + 21.3 % Net debt*: € 9.5 bn as of March 31, 2010 * As reported, including commitment to purchase the outstanding 13% of GVT not yet owned by Vivend
Slide 21: Significant EBITA increase
Significant EBITA increase In euro millions - IFRS Change at Q1 2010 Q1 2009 Change constant currency Activision Blizzard 377 178 x 2.1 x 2.2 Universal Music Group 68 110 - 38.2% - 37.7% SFR 634 610 + 3.9% + 3.9% Maroc Telecom Group 284 286 - 0.7% + 0.6% GVT 43 - Canal+ Group 230 254 - 9.4% - 9.9% H
Slide 22: Adjusted Net Income
Adjusted Net Income In euro millions - IFRS Q1 2010 Q1 2009 Change % Revenues 6,924 6,530 + 394 + 6.0% Impact of Olympic Games at NBC Universal EBITA 1,590 1,393 + 197 + 14.1% Income from equity affiliates 15 26 - 11 Impact of GVT acquisition Interest (118) (108) - 10 Incl. reduced benefit from util
Slide 23: Financial net debt evolution
In euro billions- IFRS Financial net debt evolution* Dividends paid Net financial December 31, CFFO Interest & tax to SFR minority investments March 31, 2009 after Capex* paid and other shareholder and other 2010 (0.2) (0.4) (9.6) + 0.8 (0.1) (9.5) Including: Including: Dividends from NBC Universal:
Slide 24: Activision Blizzard: Revenues €945m, EBITA €377m
IFRS Revenues: €945m, +33.4% at constant currency In euro millions Constant Q1 2010 Q1 2009 Change Better than expected results due to strong global demand for Call of IFRS currency Duty and World of Warcraft Revenues 945 731 + 29.3% + 33.4% Call of Duty #1 third-party franchise in the quarter and C
Slide 25: Universal Music Group: Revenues €889m
Revenues: €889m, -12.6% at constant currency In euro millions - IFRS Constant Q1 2010 Q1 2009 Change Recorded music declined, particularly in Europe and Asia currency Fewer major releases (U2 in 2009) Revenues 889 1,026 - 13.4% - 12.6% Reduced demand for physical product EBITA 68 110 - 38.2% - 3
Slide 26: SFR: Mobile services revenues +4.3% excl. regulatory impacts
Mobile services revenues: +4.3% excl. regulatory impacts* Continued growth in customer base: #1** in postpaid net adds In euro millions - IFRS in Q1 with 225k new mobile subscribers Q1 2010 Q1 2009 Change Data revenues (+19.5%) representing 26.5% (+4.6pts) of service Revenues 3,085 3,028 + 1.9% Mobi
Slide 27: Maroc Telecom: Revenues €660m
Revenues: €660m, +4.4% at constant currency In euro millions - IFRS Constant Continued growth in mobile in Morocco Q1 2010 Q1 2009 Change currency Increased customer base with significant decrease in prepaid Revenues 660 640 + 3.1% + 4.4% Mobile 491 456 + 7.7% + 9.0% churn rate due to loyalty prog
Slide 28: GVT: Net Revenues BRL513m
Net Revenues: BRL513m*, +36.5% (+70% in EUR) In BRL millions* 301k net adds in lines in services (LIS), +59.9% yoy Q1 2010 Q1 2009 Change Broadband subscribers reached 747k, 45% with speed of Net revenues 513 376 + 36.5% 10 Mbps and higher, compared with 9% in Q1 2009 Gross income 344 250 + 37.9% Br
Slide 29: Canal+ Group: Revenues €1,145m
Revenues: €1,145m, +2.3% In euro millions - IFRS Constant Portfolio growth at Canal+ France: +315k net adds year-on-year Q1 2010 Q1 2009 Change currency Increase in gross adds and lower churn in Metropolitan France Revenues 1,145 1,119 + 2.3% + 1.7% Excellent commercial performance of CanalOvers
Slide 30: 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 com
Slide 31: Activision Blizzard – stand alone - definitions
Activision Blizzard – stand alone - definitions US Non-GAAP Financial Measures Activision Blizzard provides net revenues, net income (loss), earnings (loss) per share and operating margin data and guidance both including (in accordance with GAAP) and excluding (non-GAAP): the impact of the change in
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
Slide 33: Important legal disclaimer
Important legal disclaimer This presentation contains forward-looking statements with respect to Vivendi’s financial condition, results of operations, business, strategy, plans, expectations regarding the payment of dividends as well as Vivendi's strategy and plans regarding its current securities c