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Vivendi — SFR — Non-Deal Roadshow (September 2011)
30 slides from Vivendi's roadshow presentation, September 2011
Slide 1: SFR Investor Presentation September 2011
SFR Investor Presentation September 2011 1
Slide 2: Global player scale with local strength
GLOBAL PLAYER SCALE WITH LOCAL STRENGTH WE HAVE THE CRITICAL SIZE… … AND LEVERAGE OUR KEY ASSETS Largest alternative operator in Europe by Strong market positions with 26m revenues: €12.6bn turnover (2010) customers and a well-established and powerful brand (32% market share in #1 alternative integr
Slide 3: Agenda
AGENDA 1. Preserving our value in a fast-evolving market 2. Capturing new growth opportunities 3. H1 2011 highlights and FY 2011 Guidance 3
Slide 4: Preserving our value in a fast-evolving market
PRESERVING OUR VALUE IN A FAST-EVOLVING MARKET INCREASED SEGMENTATION OF CUSTOMER NEEDS 1 Strenghtening our key assets Data usage Distribution & customer care channels Handset Multi-equipment Anticipating consumer needs to maintain INTENSE COMPETITION ON 2 our premium value proposition and enhance c
Slide 5: Strengthening our key assets: broadband network
1. STRENGHTENING OUR KEY ASSETS: BROADBAND NETWORK 3G NETWORK COVERAGE… …AND QUALITY 97% population coverage in September 2011 HSDPA 21 Mbps in top 12 French cities Objective 98% pop. by end 2011 (43% of French population) Objective >99% pop. by end 2013 Fixed/mobile broadband network synergies: Nea
Slide 6: Strengthening our key assets: customer care and distribution
1. STRENGHTENING OUR KEY ASSETS: CUSTOMER CARE AND DISTRIBUTION MULTI-CHANNEL CUSTOMER CARE EXCLUSIVE PARTNERSHIP AND DISTRIBUTION WITH FNAC SIGNED IN 2011 Partnership signed with Fnac, leading entertainment and high tech retailer in France 820 shops 15% of sales online Exclusive SFR « Shop in shop
Slide 7: Success of SIM-only and convergent offers
2. ANTICIPATING CONSUMER NEEDS: SUCCESS OF SIM-ONLY AND CONVERGENT OFFERS SIM-ONLY OFFER CONVERGENT OFFER Eco Avantage Multi-Packs Launched in June 2010 Launched in August 2010 Customers free to pay only for the service when Increasing cross-selling and customer loyalty they want to keep their hands
Slide 8: Launching new postpaid range Formules Carrées
2. ANTICIPATING CONSUMER NEEDS: LAUNCHING NEW POSTPAID RANGE « FORMULES CARRÉES » LEADING ON VOICE/DATA REBALANCING WITH NEW LOYALTY MODEL SEGMENTATION BY DATA USAGE Daily mobile Mobile Internet Intense More simple, transparent, flexible tariffs without constraint Internet mobile Internet available
Slide 9: Launching a new web-only tariff
2. ANTICIPATING CONSUMER NEEDS: LAUNCHING A NEW WEB-ONLY TARIFF Postpaid offer targeting customers who wish to do everything online Online subscription Online selfcare Competitive pricing, simple proposition No handset subsidies, no commitment Launch mid-October 9
Slide 10: Success of the neufbox EVOLUTION
2. ANTICIPATING CONSUMER NEEDS: SUCCESS OF THE NEUFBOX EVOLUTION SFR NEUFBOX EVOLUTION SFR broadband internet offer range Premium offer with high-quality TV experience and unlimited calls to mobile neufbox Enhanced customer experience with new Broadband Internet € 31.90 fluid 3D user interface, mult
Slide 11: Gaining market share in the wholesale market
3. GAINING MARKET SHARE IN THE WHOLESALE MARKET SUCCESSFUL LAUNCH OF NEW MAJOR VNO DEALS SIGNED LA POSTE MOBILE Joint Venture SFR/La Poste (49%/51%) Agreement signed in June 2011 with 150k customers acquired in 3 months (as #1 MVNO Virgin Mobile to use SFR’s fixed of end-August 2011) and a customer
Slide 12: Gaining market share in the enterprise market
3. GAINING MARKET SHARE IN THE ENTERPRISE MARKET DYNAMIC SEGMENT GROWTH Number of customer lines (June 2011 vs. June 2010) Voice & smartphone +5% SFR Business Team, a dedicated entity for the Mobile broadband (PC) +19% Enterprise market Machine-to-Machine +42% 150k enterprise customers, including 90
Slide 13: Financial discipline: focus on growth capex
4. FINANCIAL DISCIPLINE: FOCUS ON GROWTH CAPEX CAPEX EVOLUTION 2009-2010 2011 TRENDS Stable CAPEX year-on-year efficiently managing ~€1.6bn ~€1.6bn coverage and traffic growth Non variable Non variable Fixed and broadband Capex: Capex Capex ~€830m ~€720m Variable Capex linked to the commercial (29%)
Slide 14: Financial discipline: strong control of opex
4. FINANCIAL DISCIPLINE: STRONG CONTROL OF OPEX OPEX EVOLUTION 2009-2010 2011 TRENDS 100% YoY growth Strong control of commercial costs due 29% 30% +5.1% to the success of SIM-only offers and Commercial costs availability of low-end / mid-end smartphones, driving down subsidized handset Revenue-rela
Slide 15: Agenda
AGENDA 1. Preserving our value in a fast-evolving market 2. Capturing new growth opportunities 3. H1 2011 highlights and FY 2011 Guidance 15
Slide 16: Strong growth of digital usage on the French market
STRONG GROWTH OF DIGITAL USAGE ON THE FRENCH MARKET Dongles & tablets Smartphones ~500MB Explosion in digital content Mobile phones ~300 MB 11m IPTV users and usage of services ~15 MB 6m iPhone sold €31bn Growth in exchanges via €25bn +24% Over 20% e-commerce of total sales made networks and Interne
Slide 17: Leveraging our distinctive assets for growth
LEVERAGING OUR DISTINCTIVE ASSETS FOR GROWTH STRENGHTENING OUR KEY ASSETS GROWTH OPPORTUNITIES PRIORITIES Next generation 1 Mobile data At the heart of broadband the digital ecosystem network 2 Cloud services Customer care SFR, a trusted partner in the and distribution digital world 3 New businesses
Slide 18: Growth opportunity #1: mobile data
GROWTH OPPORTUNITY #1: MOBILE DATA SFR SMARTPHONE PENETRATION MONETISATION OF MOBILE DATA €1,439 m 34% €1,109 m +30% +13pts 36% 21% +10pts 26% June 2010 June 2011 H1 2010 H1 2011 Mobile Data Revenues % Mobile Data in Mobile Service Revenues Penetration in Mainland France excl. M2M and dongles Increa
Slide 19: Growth opportunity #2: cloud services
GROWTH OPPORTUNITY #2: CLOUD SERVICES CONSUMER CLOUD SERVICES ENTERPRISE CLOUD SERVICES 3m households having access to an increasing range of services on TV through the neufbox VoD (10k titles) and Subscription-VoD Gaming on demand “Pack Business Entreprises” offer: one of the Applications on demand
Slide 20: Growth opportunity #3: new businesses
GROWTH OPPORTUNITY #3: NEW BUSINESSES Illustration 1: new connected devices OFFERING NEW SERVICES FOR Innovative communicating devices embedding SFR’s M2M solutions: CONSUMERS AND ENTERPRISE - FnacBook: 3G e-reader distributed by Fnac CUSTOMERS - In-car devices with TomTom and Coyote Secured transac
Slide 21: Agenda
AGENDA 1. Preserving our value in a fast-evolving market 2. Capturing new growth opportunities 3. H1 2011 highlights and FY 2011 guidance 21
Slide 22: Key operational achievements in H1 2011
KEY OPERATIONAL ACHIEVEMENTS IN H1 2011 1 Strong growth of smartphones user base at 34% (+13 pts YoY) and mobile data revenues (+30%) for both Consumers and Enterprises 2 Commercial momentum confirmed on converged offers “Multi-Packs” and “neufbox EVOLUTION”, SFR’s new ADSL / fiber box 3 Successful
Slide 23: Commercial performance
COMMERCIAL PERFORMANCE MOBILE FIXED AND BROADBAND +220k postpaid customers in H1 despite +96k broadband residential customers in H1 VAT turbulence in Q1 to 5.0m (+6.4% YoY) 21.1m mobile customers with improved Successful launch of the SFR neufbox postpaid/prepaid mix to 76% (+2 pts) EVOLUTION: >400k
Slide 24: Impacts from regulation
IMPACTS FROM REGULATION France has been front-runner in Europe Termination Rate cuts over 2010-2013 in Mobile Termination Rate cuts SMS Termination Rates ct€/min Mobile Termination Rates Evolution Feb., 1st • Orange/SFR: 3 to 2 ct€/SMS • Bouygues: 3.5 to 2.17 ct€/min 9 2010 Mobile Termination Rates
Slide 25: H1 2011 SFR financials
H1 2011 SFR FINANCIALS Mobile service revenues: €4,008m, +1.5% excl. VAT and regulatory impact* in € millions – IFRS H1 2011 H1 2010 YoY Data revenues: +30% to €1,439m Revenues 6,120 6,248 -2.0% 2.0% Mobile 4,257 4,430 -3.9% Broadband Internet & Fixed revenues: Broadband Internet & Fixed 2,001 1,975
Slide 26: We reiterate our 2011 guidance
WE REITERATE OUR 2011 GUIDANCE Mobile: Decrease in EBITDA in a tough competitive, tax and regulatory environment Broadband & Fixed: Increase in EBITDA, excl. 2010 favorable non-recurring items LONGER TERM, WE ARE CONFIDENT WE CAN PRESERVE OUR VALUE WITH PROGRESSIVELY LOWER REGULATORY IMPACT AND NEW
Slide 27: Appendices
Appendices 27
Slide 28: Mobile, broadband internet and fixed KPIs
H1 2011 H1 2010 Change MOBILE Customers (in '000)* 21,059 20,562 + 2.4% Proportion of postpaid clients* 76.2% 74.6% + 1.6 pt 3G customers (in '000)* 10,681 8,782 + 21.6% Market share on customer base (%)* 31.9% 33.1% - 1.2 pt Network market share (%) 34.7% 34.8% - 0.1 pt 12-month rolling blended ARP
Slide 29: Revenues breakdown H1 2011
In euro millions - IFRS H1 2011 H1 2010 Change Service revenues 4,008 4,222 - 5.1% of which data revenues from mobile services 1,439 1,109 + 29.8% Equipment sales, net 249 208 + 19.7% Mobile revenues 4,257 4,430 - 3.9% Broadband Internet and fixed revenues 2,001 1,975 + 1.3% Intercos (138) (157) Tot
Slide 30: 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