Vivendi Se · EURONEXT:VIV
Vivendi — Vivendi Universal — Q3 2005 Earnings Presentation
34 slides from Vivendi's earnings presentation, Nov 18, 2005
Slide 1: Third Quarter & Nine Months 2005 Earnings
Third Quarter & Nine Months 2005 Earnings Jacques ESPINASSE Member of the Management Board & Chief Financial Officer IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT LEGAL DISCLAIMER AT THE END OF THIS PRESENTATION
Slide 2: Operating Highlights
Operating Highlights Strong operating performance in Q3 2005: Revenues up 8% to €4,874 million in Q3 and up 8% in the 9 months: Acceleration in the third quarter at CANAL+ Group (+10% in Q3 and +3% in 9 months), VU Games (+151% and +88%) and Maroc Telecom (+18% and +14%); SFR continues to show solid
Slide 3: Third Quarter Results Confirm Strong Progress
On a comparable basis Third Quarter Results Confirm Strong Progress
Slide 4: Results Highlights
Results Highlights Adjusted net income: Up 73% in the 9 months to €1,687 million; The Q3 2004 adjusted net income included 9 months of Worldwide Tax System impact instead of 3 months this year. Hence, the year-on-year comparison for Q3 is not appropriate. This extra 6 months impact in Q3 2004 is €24
Slide 5: Adjusted Net Income Growth
Third Quarter 2005 Adjusted Net Income Growth Excluding the €241 million extra 6-month impact from the Worldwide Tax System recorded in Q3 2004, the €136 million increase (+35%) in adjusted net income compared to Q3 2004 comes from: +€121m: +14% improvement in earnings from operations; + €12m: -15%
Slide 6: Consolidated Statement of Earnings
Consolidated Third Quarter 2005 Statement of Earnings Impact of Worldwide Tax System: +€141m in 2005 +€750m in 2004
Slide 7: Revenues up €374 million, +8% on a comparable basis
In € million - IFRS Revenues up €374 million, +8% on a comparable basis Third Quarter 2005 Revenues on a Comparable Basis 2004 2005 4500 4874 4,500 4,874 Q3 2004 Q3 2005 Universal Music Group VU Games Canal+ Group SFR Maroc Telecom Other Q3 2004 1132 63 787 2097 427 -6 Q3 2005 1119 158 863 2236 503
Slide 8: Earnings from operations up €114 million, +13%
Earnings from operations up €114 million, +13% on a comparable basis Third Quarter 2005 Earnings from operations on a Comparable Basis 2004 2005 891 1005 891 1,005 Q3 2004 Q3 2005 Universal Music Group VU Games Canal+ Group SFR Maroc Telecom Holding & Corporate Other Q3 2004 43.3 -32.8 93.8 646.9 19
Slide 9: Income Tax Analysis
Q3 2005 Q3 2004 9 months 2005 9 months 2004 (152) 434 Provision for income taxes (537) (121) (167) 37 Included in Adjusted net income (559) (527) 140 362 Worldwide Tax System (for Year "n") 386 362 (307) (325) Tax charge (945) (889) 15 397 Not included in Adjusted net income 22 406 1 388 Worldwide T
Slide 10: Income from Equity Affiliates Analysis
Q3 2005 Q3 2004 9 months 2005 9 months 2004 Income from equity affiliates 53 55 225 218 including: NBC Universal neufCegetel VUE Elektrim Telekomunikacja (Telco) Other 67 (14) - - 0 25 (9) - 28 11 255 (34) - - 4 65 (10) 30 107 26 Income from Equity Affiliates Analysis In € million - IFRS
Slide 11: Net Available Cash Flow for the 9 Months 2005
Net Available Cash Flow for the 9 Months 2005 In € million - IFRS 9 months 2005 Actual 9 months 2004 Actual Cash Flow from Operations excluding NBCU dividend 3,100 3,131 Dividend received from NBC Universal 346 302 Consolidated Cash Flow from Operations 3,446 3,433 - Cash income taxes paid (1,105) (
Slide 12: Financial Net Debt Evolution at end-September 2005
Dec. 31, 2004 Acquisitions Puts cancellation CFFO Financing expenses & Taxes Dividends paid to minorities VU Dividens Debt Adjustment Sept. 30, 2005 Est. Dec. 31, 2005 Est -4.7 -5 -1.5 -1.5 -3.2 -4 -4.5 -4.7 -1.7 -1.4 -3.5 -1.7 -0.800000000131482 -0.7 -0.2 -4.5 -4.3 -2 Financial Net Debt Evolution a
Slide 13: Reimbursement of the 8.25% Notes mandatorily redeemable into VU shares
Reimbursement of the 8.25% Notes mandatorily redeemable into VU shares Maturity: November 25, 2005 Principal amount: €1 billion, €768 million after coupon prepayment Coupon: 8.25% per annum, prepaid upfront Number of notes outstanding: 78,670,500 notes Dilutive impact: New VU shares are already acco
Slide 14: VU will exceed its 2005 Adjusted Net Income growth target
Vivendi Universal will exceed its 2005 Adjusted Net Income growth target In IFRS In € million 2004 2005 Est 1330 1900 EPS from €1.16 ... .... to above €1.57 DPS of €0.60 ... .... at least 50% payout Vivendi Universal's 2005 Guidance, updated as of September 13, 2005 €1,330 m * > €1,800 m * 2004 Adju
Slide 15: Growth Drivers for 2006-2008 are Already In Place
Growth Drivers for 2006 — 2008 are Already In Place » Digital distribution and new sources of music revenues: + Digital distribution already accounts for 6% of total UMG sales » Exclusive premium content and launch of Pay-DTT: + Launch of Pay-DTT in November in France » Development of World of Warcr
Slide 16: VU Operates Leading Media & Telecom Assets
VU Operates Leading Media & Telecom Assets Mobile / Fixed line Pay-TV Music Video Games 92% 99% 20%* 100% 100% 56% 51% * 20% controlling interest and a 18.5% ownership interest Film TV / Film TV / Film Global Content Local Distribution Platforms neufCegetel 28% Mobile / Fixed line
Slide 17: All VU Business Units are Profitable and Growing
All VU Business Units are Profitable and Growing Strong operating performance in the 9 months 2005: Revenues: + 8% to € 13,960 million; EFO: + 24% to € 2,971 million; Adjusted Net Income: + 73% to € 1,687 million. On a comparable basis 9m 2005 9m 2005 9m 2004 Universal Music Group: €3,211m +3% €213m
Slide 18: Universal Music Group: Performance
Universal Music Group: Third Quarter 2005 Performance Revenues down 1% on a comparable basis : Lower physical sales compared to 2004 partly due to strong prior year release schedule; Growth in digital activity to 6% of total revenues; Growth in music publishing. Earnings from operations up 65% on a
Slide 19: Universal Music Group: Key Metrics
Universal Music Group: Key Third Quarter 2005 Metrics Top-5 selling artists in the quarter Top-5 selling artists in the quarter Top-5 selling artists in the quarter Top-5 selling artists in the quarter Q3 2005 Million units Q3 2004 Million units Kanye West 3.1 Nelly 4.0 Bon Jovi 2.0 Ashlee Simpson 3
Slide 20: Vivendi Universal Games: Performance
Vivendi Universal Games: Third Quarter 2005 Performance Revenues up 151% on a comparable basis: Primarily driven by the tremendous success of World of Warcraft with 4.5m paying customers at end-Sept. 2005; Promising launch of Hulk II on consoles; Strong distribution revenues in North America with De
Slide 21: Vivendi Universal Games: Key Metrics
Vivendi Universal Games: Key Third Quarter 2005 Metrics Paying customers of World of Warcraft at end-September 2005 Paying customers of World of Warcraft at end-September 2005 Region M units North America 1.1 Europe 0.9 Korea 0.3 China 2.1 Worldwide ~4.5 Titles Platform World of Warcraft Online Hulk
Slide 22: CANAL+ Group: Performance
CANAL+ Group: Third Quarter 2005 Performance Revenues up 10% on a comparable basis: Pay-TV France: CANAL+ recruitments up 50% reaching 150,000; CANALSAT recruitments up 35% reaching 100,000. StudioCanal: Higher Working Title revenues; Box office success of Les Poupees Russes. TKP/Cyfra+ in Poland on
Slide 23: CANAL+ Group: Key Metrics
CANAL+ Group: Key Third Quarter 2005 Metrics Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Est 42025 18306 19169 20841 15869 19484 14744 16643 26689 Ouest 37851 23700 24604 26512 17508 19585 20361 28377 30317 Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Est 56968 21241 28838 23807 25629 24685 17721 2
Slide 24: CANAL+ Group: Key Metrics
Sept. 2004 Sept. 2005 CANAL+ 4880 4945 CanalSat 2860 3085 CANAL+ Group: Key Third Quarter 2005 Metrics CANAL+ CANALSAT CANAL+ Group net portfolio* (in thousands) 7,740 +290 * Individual and collective subscriptions to CANAL+ and CANALSAT in mainland France and overseas territories. Sept. 2004 Sept.
Slide 25: SFR: Performance
SFR: Third Quarter 2005 Performance Revenues up 6.7% on a comparable basis: 9% growth in customers to 16.455 million*; 1% increase in ARPU to €433**; 8% growth in average voice usage to 285mn per customer; 22% increase in net data ARPU to €58. Earnings from operations up 7.0% on a comparable basis:
Slide 26: SFR: Key Metrics
SFR: Key Third Quarter 2005 Metrics (as of end-September including SRR) 2005 2004 Growth Customers (in '000) * 16,455 15,139 +9% Net additions (in '000) * 247 197 +25% YTD market share on net additions (%) 43.1% 33.43% +9.7 points Market share on customer base (%) 35.8% 35.3% +0.5 point 12-month rol
Slide 27: Maroc Telecom: Performance
Maroc Telecom: Third Quarter 2005 Performance Maroc Telecom: Third Quarter 2005 Performance Recent events Fixed-line business liberalized: one license granted to Meditel and one license granted to Maroc Connect; Fixed tariffs rebalancing and launch of a new unlimited rate plan as of September 1, 200
Slide 28: Maroc Telecom: Key Metrics
Maroc Telecom: Key Third Quarter 2005 Metrics Maroc Telecom: Key Third Quarter 2005 Metrics (as of end-September, excluding Mauritel) 2005 2004 Growth Number of fixed lines (in '000) 1,345 1,299 +3.5% Total Internet accesses (in '000) 196 92 x2.1 Including ADSL accesses (in '000) 179 42 x4.3 Number
Slide 29: NBC Universal: Performance
NBC Universal: Third Quarter 2005 Performance Revenues down 26%, excluding 2004 Olympics broadcasts down 4%: Network prime time in tough cycle however fall line up making progress 3Q scatter market improved versus 2005 Entertainment cable strength continues; Sci Fi Channel delivered biggest third qu
Slide 30: Details on Accounts
Details on Third Quarter 2005 Accounts
Slide 31: Other Financial Charges
9 Months 2005 Other Financial Charges 9 months 2005 9 months 2004 Interest (167) (351) Interest expense on gross debt (excluding swap) Average borrowing cost (%) Average amount of borrowings (in € billion) Interest swap Interest income on cash & cash equivalent (194) 3.84% 6.6 1 26 (321) 5.08% 9.9 (
Slide 32: Glossary
Glossary Adjusted Net Income: includes earnings from operations, other income from ordinary affiliates, income 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 impairment lo
Slide 33: IR Team
IR Team Eileen McLaughlin IR Director eileen.mclaughlin@groupvu.com Laurence Daniel IR Director laurence.daniel@groupvu.com Edouard Lassalle IR Analyst edouard.lassalle@groupvu.com Daniel SCOLAN Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@groupvu.com For any financial
Slide 34: Important Legal Disclaimer
Important 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