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Vivendi — Investor Presentation (October 2008)
37 slides from Vivendi's investor presentation, October 2008
Slide 1: Investor Presentation
Investor Presentation October 2008 IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT DISCLAIMER AT THE END OF THIS PRESENTATION
Slide 2: A global leader in communications and entertainment
A global leader in communications and entertainment #1 Music Worldwide #1 Video Games Worldwide #2 Telecoms France #1 Telecoms Morocco #1 Pay-TV France VIV IR PRES October 22, 2008 2
Slide 3: Vivendi Key figures
Vivendi Key figures €22bn Revenues in 2007 €2.8bn Adjusted Net Income in 2007 2007 dividend of 53% of the Adjusted Net Income, at €1.5bn (€1.3 per share) ~70% of 2007 Revenues based on subscriptions Present in 77 countries, 42,000 Employees €24bn Market Capitalization (10/23/2008) # 8th company of t
Slide 4: Vivendi Businesses
Vivendi Businesses 100% 100%/65% 56% #1 worldwide in music #1 in pay-TV in France #2 Telco in France 53% 54%* 20%* #1 Telco in Morocco #1 worldwide in A worldwide leader in video games entertainment * Based on shares outstanding VIV IR PRES October 22, 2008 4
Slide 5: Our commitments
Our commitments Offer consumers the best mobile and broadband products and services Further strengthen leadership in superior content and distribution businesses to enhance growth and value Pursue innovation to develop new revenues Deliver strong returns and focus on ROCE with other indicators to tr
Slide 6: Each year, our results and our dividend increase
Each year, our results and our dividend increase Adjusted net income Dividend Pay-out ratio >50%, above the average 3000 €2,832m 1.4 €2,614m for CAC 40 companies €1.30 2500 €2,218m 1.2 €1.20 2000 €1.00 €1,498m 1 1500 0.8 1000 0.6 €0.60 500 €349m 0.4 0 -€514m - 500 0.2 - 1000 2002 2003 2004 2005 2006
Slide 7: Growing profitability of our businesses
Growing profitability of our businesses Revenues 2007* UMG In € millions 22% +21% Canal+ Group 25,000 20% 21,657 Vivendi Games 5% Maroc 20,000 Telecom 17,883 11% SFR 15,000 42% 10,000 +35% EBITA 2007* 4,721 Canal+ 5,000 3,504 Group 8% Maroc UMG Telecom 13% 23% - Vivendi Games Revenues EBITA 4% 2004
Slide 8: Vivendi: a new dimension
Vivendi: a new dimension Organic growth and major acquisitions drive value creation 2007/2008 Major acquisitions: UMG: Acquisition of Bertelsmann Music Publishing to become # 1 in music publishing Acquisition of Sanctuary to expand into new music revenue streams as merchandising and artist services
Slide 9: Universal Music Group
Universal Music Group #1 worldwide in the production of albums: 1/4 of all albums sold in the world, 28.8% market share* #1 worldwide in music publishing: more than two million titles in its catalog, 22.2% market share* #1 worldwide in music Leading the way in digital distribution #1 in the sale of
Slide 10: Universal Music Group
Universal Music Group 2007 performance 2008 outlook Constant Revenues: in euro millions - IFRS 2007 Growth currency Slight increase at constant currency Revenues 4 870 -1,7% 3,0% EBITA: Restructuring costs (67) Slight increase at constant currency EBITA 624 -16,1% -12,9% Margin % 12,8% CFFO 559 -22,
Slide 11: Canal+ Group
Canal+ Group CanalSat: 5.2 million subscriptions Canal+: 5.3 million subscriptions 300 channels and services 6 premium channels offering new, exclusive and original programs A selection of the best channels, of which close to 60 are exclusive #1 in pay-TV in France 450 films each year and unequalled
Slide 12: Canal+ Group
Canal+ Group 2007 Performance in euro millions - IFRS 2007 Growth Revenues 4 363 20,2% Canal+ France 3 747 24,9% 2008 outlook EBITA excluding transition costs 490 94,4% Revenues: 3% to 4%growth Transition costs (90) EBITA 400 x5.3 EBITA: > €600m before transition costs of around €80m EBITA margin ex
Slide 13: SFR
SFR #1 alternative telecommunications operator in France, leading innovation 19 million mobile customers, 34% market share + 3.8 million fixed-ADSL customers, 24% market share #2 Telco 800 stores in close proximity to customers #1 for 3G services in France Fixed/mobile integration leads to cost and
Slide 14: SFR
SFR 2007 performance 2008 outlook in euro millions - IFRS 2007 Growth 9 018 3,9% Revenue for Mobile: Slight growth Revenues Mobile Revenue 8 785 1,6% EBITDA 3 431 -0,5% EBITDA for Mobile: Slight growth Mobile EBITDA 3 476 0,4% EBITA 2 517 -2,6% CFFO for Mobile: Up due to decreased capex Mobile EBITA
Slide 15: Maroc Telecom
Maroc Telecom # 1 Moroccan telecommunications operator 14 million mobile customers, up 24% in 2007 66% market share 1.3 million fixed lines #1 Telco in Morocco # 1 supplier of Internet access in Morocco, 84% market share International expansion: Mauritania: # 1 fixed and mobile operator Gabon: the o
Slide 16: Maroc Telecom
Maroc Telecom 2007 Performance 2008 revised outlook Revenues: in euro millions - IFRS 2007 Growth Above 8% growth in Dirhams Revenues 2 456 19,6% EBITA: EBITDA 1 397 17,0% Above 11% growth in Dirhams EBITA 1 091 19,6% CFFO 1 001 6,2% Growth strategy Retain Maroc Telecom’s leadership in all its marke
Slide 17: Activision Blizzard
Activision Blizzard ›The world’s largest and most profitable video game publisher Fastest growing major publisher of Leading online and PC franchises: Console/Handheld games in N.A./ Europe World of Warcraft: # 1 #1 console gaming brand Guitar Hero MMORPG worldwide Highly rated blockbuster Call of D
Slide 18: Activision Blizzard: Growth Strategy
Activision Blizzard: Growth Strategy Drive annual growth & profit of proven franchise Selectively add new properties Drive scale through international expansion Monetize emerging markets Operating Margin Objectives* Market opportunities Calendar 24-25% Portfolio expansion Near-Term 27-28% Operationa
Slide 19: Vivendi: optimizing the balance sheet
Vivendi: optimizing the balance sheet Vivendi distributed €1.5bn in dividends to its shareholders in May 2008 Vivendi’s estimated net debt slightly above €8bn at the end of 2008, compared to €5.2bn at year end 2007 Vivendi remains committed to: maintaining its BBB rating maintaining financial flexib
Slide 20: Vivendi has a solid financial safety margin
Vivendi has a solid financial safety margin Financial net debt (IFRS): 9 ~ 8 (1) (2) 8 7 ~ 6 (1) (3) 6 5.2 (1) in euro billions 5 4 3 2 1 0 December 31, 2007 December 31, 2008 December 31, 2009 (estimated) (estimated) (1) Including the put option granted to TF1/M6 on 15% of Canal+ France, exercisabl
Slide 21: Important credit lines up to 2011
Important credit lines up to 2011 No significant debt reimbursement before 2012-2013 Amount of bank credit lines 8 7.5 Vivendi 7 SFR At 2008 year end, the economic average term of the group’s 6.0 6.0 consolidated debt should be 4.4 years 6 5.0 5 in euro billions 4 3.5 3.5 Maturity of bonds 3.3 3 2.7
Slide 22: Vivendi: exceptionally well positioned
Vivendi: exceptionally well positioned Growth dynamics Strong customer demand for content distributed through fixed and mobile broadband network Creative talents and innovation drive market share gains Investment in fastest growing segments: video games, on line content, 3G, Fixed Broadband… Penetra
Slide 23: In the current environment, we confirm our 2008 goals
In the current environment, we confirm our 2008 goals Total group outlook confirmed with 2008 profit growth expected to be similar to 2007 (at constant perimeter, i.e. excluding Neuf Cegetel and Activision) 2008 reported Adjusted Net Income will be impacted by the implementation and restructuring co
Slide 24: Appendices
vivendi Appendices
Slide 25: Significant increase in H1 08 revenues
Significant increase in H1 08 revenues % Change at In euro millions - IFRS H1 2008 H1 2007 % Change constant currency Universal Music Group 2,044 2,095 - 2.4% + 4.9% Canal+ Group 2,254 2,154 + 4.6% + 4.2% Launch of World of SFR 5,289 4,336 + 22.0% + 22.0% Warcraft 's first Maroc Telecom Group 1,254
Slide 26: H1 08 EBITA driven by growth at UMG, Canal+ Group and Maroc Telecom
H1 08 EBITA driven by growth at UMG, Canal+ Group and Maroc Telecom % Change at In euro millions - IFRS H1 2008 H1 2007 % Change constant currency Launch of World of Warcraft' s Universal Music Group 259 220 + 17.7% + 24.4% first expansion pack in Q1 07; Canal+ Group 351 302 + 16.2% + 15.4% second e
Slide 27: H1 08 Adjusted Net Income
H1 08 Adjusted Net Income H1 2008 H1 2007 Change In euro millions – IFRS % 1 Revenues 11,268 10,223 1,045 + 10.2% 2 EBITA 2,567 2,596 (29) - 1.1% Positive impact of the Impact of the acquisition of 60% of Neuf Cegetel capitalization of interest 3 Income from equity affiliates 135 172 (37) - 21.5% re
Slide 28: H1 08 Cash Flow From Operations before capex over €3bn
H1 08 Cash Flow From Operations before capex over €3bn CFFO before capex, net: €3,065m vs €3,060m in H1 2007 Capex net: €999m; up 7.9% CFFO: €2,066m; down 3.2% Impact of Astra CFFO before capex, net CFFO prepayments (€68m vs. H1 2008 H1 2007 % Change In euro millions - IFRS H1 2008 H1 2007 % Change
Slide 29: H1 08 Net debt evolution
H1 08 Net debt evolution In euro billions - IFRS Net financial CFFO Interest, tax Dividends Dividends Other June 30, 2008 December 31, 2007 Investments after Capex & other paid to shareholders paid to minorities -3 -4 -5 -5.4 -6 -5.2 -7 -8 +2.1 -1.0 -9 -1.5 -10 -0.6 -11 Including: +0.2 Acquisition o
Slide 30: H1 08 Net cash flow available
H1 08 Net cash flow available In euro millions – IFRS H1 2008 H1 2007 Consolidated cash flow from operations before capex, net 3,065 3,060 - Capital expenditures, net (capex, net) (999) (926) Consolidated cash flow from operations (CFFO) 2,066 2,134 - Cash income taxes paid (744) (899) - Cash net in
Slide 31: H1 08 Capex, net
H1 08 Capex, net In euro millions - IFRS H1 2008 H1 2007 % Change Universal Music Group 12 15 -20.0% Canal+ Group 123 69 78.3% SFR* 660 642 2.8% Maroc Telecom Group 189 167 13.2% Vivendi Games 14 31 -54.8% Holding / Non Core 1 2 -50.0% Total Vivendi 999 926 7.9% *Including Neuf Cegetel since April 1
Slide 32: Ratings
Ratings Rating Agency Type of debt Rating* Standard & Poor’s Long-Term Corporate Credit Rating BBB Short-Term Corporate Credit Rating A-2 Senior Unsecured Debt BBB Commercial Paper A-2 Moody’s Long-Term Senior Unsecured Debt Baa2 Senior Implied Rating Baa2 Fitch Ratings Long-Term Senior Unsecured De
Slide 33: Appendix: Governance
Appendix: Governance A dual and collegial corporate governance structure The Supervisory Board chaired by Jean-René Fourtou ■ 13 members (as of April 25, 2008): 11 independent; 12 European citizens (2 Belgian, 8 French, 1 Polish, 1 Spanish); 1 American ■ 4 Committees of the Supervisory Board: Strate
Slide 34: 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 35: Activision Blizzard – standalone - definitions
Activision Blizzard – standalone - definitions Non-GAAP The non-GAAP measures exclude the impact of the change in deferred net revenues and cost of sales related to certain online-enabled games, equity-based compensation, the operating loss results from the historical Vivendi Games businesses that t
Slide 36: Investor Relations team
Investor Relations team Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@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: +1.212.5
Slide 37: Important legal disclaimer
Important legal disclaimer This presentation contains forward-looking statements with respect to the financial condition, results of operations, business, strategy and plans of Vivendi. Although Vivendi believes that such forward-looking statements are based on reasonable assumptions, such statement