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Vivendi — Vivendi Universal — Sanford Bernstein's Strategic Decisions Conference 2004
27 slides from Vivendi's conference presentation, Jun 2, 2004
Slide 1: Sanford Bernstein's Strategic Decisions Conference
Jean-Bernard LEVY Chief Operating Officer Sanford Bernstein's Strategic Decisions Conference June 3, 2004 IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT DISCLAIMER AT THE END OF THIS PRESENTATION.
Slide 2: Crisis is Behind Us
Crisis is Behind Us 2003 2004 Basis points ~90 1,400 VU's 5-year Credit Default Swaps Reduced net debt from € 35B to about € 7B in 2 years € 16B by deconsolidating Veolia Environnement € 15B of divestitures S&P upgraded VU to investment grade (BBB-) on June 1st 2002
Slide 3: A Media & Telecom Company
A Media & Telecom Company Telecom Media Mobile / Fixed line Mobile / Fixed line Networks / Cable / Film / Parks Pay-TV / Film Music Video Games Games Games
Slide 4: Recent Highlights
Recent Highlights Increased investment in SFR Cegetel to 56%* Vivendi Universal and Vodafone have access to cash flow through quarterly dividends Combined VUE with NBC to form NBC Universal Substantial component of € 16 billion divestiture program, which we will exceed Creates an exceptional media c
Slide 5: 2003 Performance
2003 Performance Net profit excluding exceptional items and goodwill Positive adjusted net income* of € 349 million Improved by € 863 million compared with 2002 Operating results on a pro forma** basis Operating income of € 3.3 billion, up 61% compared with 2002 Consolidated cash flow from operation
Slide 6: 2004 Outlook
2004 Outlook Continuation of improved profitability Reducing net debt to be below 5 billion euros by year end Focus on: Enhancing SFR by increasing investment in UMTS Strengthening Canal+ Group's programming, distribution and cost cuts Improving Universal Music Group and Vivendi Universal Games oper
Slide 7: NBC Universal Overview
NBC Universal Overview VIVENDI June 3, 2004 7 UNIVERSAL
Slide 8: NBC Universal - Valuation
NBC Universal - Valuation VUE valued at $14.2 billion * VU received 18.5% of NBC Universal (GE 80%, MEI 1.5%) $5.9 billion reduction in net debt $3.4 billion net cash proceeds NBC Universal estimated value of $43 billion pre- synergies * Includes assets contributed to NBC Universal that are held out
Slide 9: NBC Universal - A Compelling Strategic Combination
NBC Universal - A Compelling Strategic Combination NBC Universal - A Compelling Strategic Combination One of the world's most profitable and fastest-growing media companies, offering consumers and advertisers broad reach, compelling brands and superior operational expertise compelling brands and sup
Slide 10: NBC Universal Profile
NBC Universal Profile 2003 Pro forma Financials Revenues $13 billion EBITDA $3.3 billion Operating Margins > 20% Debt $1.7 billion Targeted synergies of $400-$500 million per year Broad balance of revenue sources including: Advertising ~ 50% Subscriber Fees/Other Revenues ~ 50% Highest operating mar
Slide 11: NBC Universal Competitive Position
NBC Universal Competitive Position Source: MSDW Research and General Electric 2003E ($ Billion) $13B $16B $12B $18B $17B Profitable ... Diversified ... Growing Cable Ad Sales Cable Fees Broadcast Film & TV Total Sales $13B $27B $42B $17B $27B Op. Profit % >20% 19% 14% 12% 11%
Slide 12: NBC Universal - Flexible, Guaranteed Exit
NBC Universal - Flexible, Guaranteed Exit Exit windows selected by Vivendi Universal Vivendi Universal can choose to sell during selected windows each year from 2006 to 2010 Detailed mechanism to provide Vivendi Universal with liquidity Once Vivendi Universal decides to exit, GE must either agree to
Slide 13: Business Units
Business Units VIVENDI June 3, 2004 jg. UNIVERSAL
Slide 14: Canal+ Group - French Pay-TV Leader
Canal + Premium Network Other Networks Network Distribution Movie Studio Movie Studio French Pay-TV leader: 8 million subscriptions Low penetration rate in France: strong potential for growth Penetration rates: Pay TV 37%, Cable 10%, satellite 14% Canal+ Group - French Pay-TV Leader Terrestrial Sate
Slide 15: Canal+ Group - Successful turnaround
Substantial improvement in margins and cash flow under new management € 200 million cost cutting achieved Re-focused on French pay-TV, with improved programming Growth drivers Subscription growth on existing and new platforms Terrestrial, satellite, cable, DTT, DSL Highly attractive, exclusive progr
Slide 16: Universal Music Group - Uniquely positioned
Universal Music Group - Uniquely positioned 1999 2000 2001 2002 2003 UMG 0.217 0.231 0.237 0.259 0.235 Sony 0.17 0.144 0.146 0.141 0.131 WMG 0.114 0.121 0.119 0.119 0.127 EMI 0.118 0.136 0.131 0.12 0.134 BMG 0.101 0.085 0.081 0.111 0.119 Source: IFPI World's largest recording company One of the worl
Slide 17: Universal Music Group - The industry is turning the corner
2000 2003 2007 Source: Understanding & Solutions Forecast 2002 2003 2004 2005 2006 2007 Optimistic 0.04 0.32 1.52 3.12 5.67 9.68 Most Likely 0.04 0.21 0.71 1.8 3.34 5.89 Pessimistic 0.04 0.08 0.39 0.71 1.46 2.12 Legitimate Online Music Industry Source: RHK Inc. Music Industry US$ Billions Universal
Slide 18: Universal Music Group - Piracy
US anti-piracy initiatives are having an impact Universal Music Group - Piracy Similar initiatives have been launched in 2004 outside of the US P2P monthly average of daily traffic (in millions) (FastTrack sites: Kazaa, Grokster, Imesh) source: MediaDefender Year-on-year % change in SoundScan albums
Slide 19: Universal Music Group - Ringtones / Realtones
Market will double in the next 3 years due to: Explosion of compliant handsets; only 60% of handsets are ringtone enabled Ease of customer use will improve Migration to master-use 'realtones' Japanese 'realtone' market already € 100 million in first year 'Realtones' service launched in the US with C
Slide 20: Vivendi Universal Games
Vivendi Universal Games Games industry offers growth through demographics and technology Strong popular franchises - World of Warcraft, Spyro, Crash, Half Life Strong intellectual property and alliances Recovery plan Stabilize the organization Significantly enhance the product portfolio Enhance deve
Slide 21: SFR / Cegetel - Lead operator challenging FT
SFR / Cegetel - Lead operator challenging FT SFR # 2 French mobile operator, 7th largest European operator in customers > 35%* market share (14.7 million customers at the end of 2003) Largest share of new customers of the French market in 2003 Cegetel France leading alternative fixed operator with 3
Slide 22: SFR Cegetel - SFR Mobile Phone
SFR Cegetel - SFR Mobile Phone French mobile market: a market of opportunities Lowest penetrated Western European mobile market: 69% at 3/31/04 Growing faster than the French economy: Mobile customers grew 8% in 2003 Stable 3-player market structure 60% of the French customers are contract customers
Slide 23: Maroc Telecom
Maroc Telecom #1 mobile player with ~ 70% market share in a fast-growing Moroccan mobile market ~ 8% per annum growth in mobile market Strong growth potential in post-paid mobile market and new value added services Only fixed line operator Internet provides opportunity for growth Benefits from syner
Slide 24: Vivendi Universal: A media and telecom company
Vivendi Universal A media and telecom company
Slide 25: Vivendi Universal - 2005 Outlook
Vivendi Universal - 2005 Outlook In 2005, Vivendi Universal will be a dynamic Media and Telecom group able to deliver a dividend Another year of strong profit growth Substantial available cash flow Growth generated from existing businesses Investment in select external opportunities, if the conditio
Slide 26: 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
Slide 27: Vivendi Universal
p VIVENDI UNIVERSAL June 3, 2004 VIVENP SAL
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