Vivendi Se · EURONEXT:VIV
Vivendi — H1 2013 Earnings Presentation
42 slides from Vivendi's earnings presentation, Aug 29, 2013
Slide 1: First Half 2013 Results
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 Aug 29, 2013 JEAN-FRANCOIS DUBOS Chairman of the Management Board Chief Executive Officer PHILIPPE CAPRON Member of the Management Board Chief Financial Officer FIRST HALF 2013 RESULTS IMPORTANT NOTICE: Financial statements unaudited and prepared
Slide 2: Jean-Francois Dubos
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 JEAN-FRANCOIS DUBOS Chairman of the Management Board Chief Executive Officer
Slide 3: First Half 2013 Highlights
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 FIRST HALF 2013 HIGHLIGHTS Challenging economic environment across the board Resilience of media activities in this context and first positive impact of acquisitions and growth drivers ► Completion of the disposal of EMI assets required by re
Slide 4: Strategic Update
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 STRATEGIC UPDATE Activision Blizzard: Agreement to sell over 85% of Vivendi’s stake* for $8.2bn ► Exit at a premium to historical average prices without any material tax impact, crystallizing value creation in video games for Vivendi ► Closing
Slide 5: Conclusion
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 CONCLUSION Significant progress achieved in the strategic transformation Key priorities for 2013 : Close announced deals Focus on cash flow generation Accelerate adaptation of SFR to challenging market conditions Pursue integration of
Slide 6: Philippe Capron
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 PHILIPPE CAPRON Member of the Management Board Chief Financial Officer
Slide 7: Changes in Perimeter
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 CHANGES IN PERIMETER Continuing operations Discontinued operations 100%* 100% 61.1%** #1 in pay TV #1 worldwide #1 worldwide in in France in music video games 100% 100% 53.1%** #1 alternative #1 alternative telecoms broadband operator #1 in telec
Slide 8: First Half 2013 Highlights
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 FIRST HALF 2013 HIGHLIGHTS Challenging economic environment EBITA of €1,391m, down 27% : UMG and Canal+ Group EBITA down 10%, impacted notably by higher restructuring and transition costs (€42m yoy), the tough music market in Japan, Canal+
Slide 9: Key Financial Metrics as of June 30, 2013
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 KEY FINANCIAL METRICS AS OF JUNE 30, 2013 Revenues: € 10,842 m – 1.5% EBITDA: € 2,546 m – 13.7% EBITA: € 1,391 m – 27.0% Adjusted Net Income: € 845 m – 25.0% Cash Flow From Operations: € 159 m (vs. negative in H1 2012) Financial net d
Slide 10: EBITDA
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 EBITDA Constant In euro millions - IFRS H1 2012 H1 2013 Change Incl. higher investment in currency content Canal+ Group 597 567 - 5.0% - 5.1% Universal Music Group 219 237 + 8.2% + 11.3% GVT 346 354 + 2.3% + 13.3% +14.1% in Q2 SFR 1,848 1,470 - 2
Slide 11: EBITA
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 EBITA Incl. €19m transition costs Constant In euro millions - IFRS H1 2012 H1 2013 Change for D8/D17 and nc+ in H1 currency 2013 vs. €2m in H1 2012 Canal+ Group 483 430 - 11.0% - 11.0% Incl. restructuring and Universal Music Group 156 143 - 8.3%
Slide 12: Adjusted Net Income
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 ADJUSTED NET INCOME In euro millions - IFRS H1 2012 H1 2013 Change % Revenues 11,008 10,842 - 166 - 1.5% EBITA 1,906 1,391 - 515 - 27.0% Interest rate on borrowings of 3.30% in Income from equity affiliates (13) (8) +5 H1 2013 vs. 3.60% in H1 Inc
Slide 13: CFFO Impacted by Working Capital Requirements
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 CFFO IMPACTED BY WORKING CAPITAL REQUIREMENTS CFFO before capex, net CFFO H1 2012 H1 2013 Change In euro millions - IFRS H1 2012 H1 2013 Change 417 418 + 0.2% Canal+ Group 312 318 + 1.9% 126 82 - 34.9% Universal Music Group 102 76 - 25.5% 271 299
Slide 14: Net Debt Evolution
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 NET DEBT EVOLUTION Net Debt Net Debt Net Debt December 31, CFFO Capex, net Interest & tax Dividends to Reclassification of Net Debt* June 30, Announced June 30, 2012 before paid and Vivendi 2013 Disposals 2013, Capex, net other shareholders Maroc
Slide 15: Active Refinancing Thanks to Market Support
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 ACTIVE REFINANCING THANKS TO MARKET SUPPORT In H1 2013, low interest expense thanks to a €5 billion commercial paper program (backed with credit lines) at ~0.2% cost In March 2013, early refinancing of a €1.5 billion bank credit line maturing
Slide 16: Canal+ Group: Challenging Market Conditions
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 CHALLENGING MARKET CONDITIONS Constant In euro millions - IFRS H1 2012 H1 2013 Change currency 2013 GUIDANCE ADJUSTED Revenues 2,470 2,600 + 5.3% + 5.2% EBITA before transition costs 485 449 - 7.4% - 7.5% EBITA around €650m EBITA 483 430 - 11.0%
Slide 17: Universal Music Group: Revenue Growth Improving
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 REVENUE GROWTH IMPROVING In euro millions - IFRS H1 2012 H1 2013 Change Constant 2013 GUIDANCE currency Revenues 1,922 2,236 + 16.3% + 19.0% Increase in EBITA with positive EBITA 156 143 - 8.3% - 5.5% contribution from EMI Recorded Music, o/w res
Slide 18: GVT: High Top Line Growth with High Profitability
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 HIGH TOP LINE GROWTH WITH HIGH PROFITABILITY SUSTAINED IN A TOUGH ENVIRONMENT Constant In euro millions - IFRS H1 2012 H1 2013 Change Currency 2013 GUIDANCE ADJUSTED Revenues 853 884 + 3.6% + 14.7% Revenue growth: Mid “teens” at constant currency
Slide 19: SFR: Improving Trends in Q2
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 IMPROVING TRENDS IN Q2 In euro millions - IFRS H1 2012 H1 2013 Change Revenues 5,761 5,108 - 11.3% 2013 GUIDANCE ADJUSTED Mobile 3,881 3,204 - 17.4% for “Copé tax” Broadband Internet & Fixed 1,981 1,966 - 0.8% Intercos (101) (62) EBITDA around €2
Slide 20: Conclusion
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 CONCLUSION Key priorities for 2013: Close announced deals Focus on cash flow generation Accelerate adaptation of SFR to challenging market conditions Pursue integration of 2012 acquisitions and deliver announced synergies 20
Slide 21: Appendices
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 APPENDICES
Slide 22: Appendices: Details of Business Operations
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 APPENDICES Details of Business Operations
Slide 23: Canal+ Group Subscriber Portfolio
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 In '000 June 30, 2012 June 30, 2013 Change Portfolio Canal+ Group 12,979 13,988 + 1,009 ow Canal+ France* 11,218 11,260 + 42 ow Poland** & Vietnam 1,761 2,728 + 967 In Mainland France June 30, 2012 June 30, 2013 Change Churn per digital subscribe
Slide 24: Universal Music Group Recorded Music
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 Recorded music : Best Sellers* Recorded Music Revenues H1 2012 H1 2013 In euro millions H1 2012 H1 2013 Europe 39% 38% Justin Bieber Rihanna North America 38% 41% Madonna Les Miserables Asia 16% 13% Nicki Minaj Imagine Dragons Rest of the world 7
Slide 25: GVT Operating Metrics
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 In '000 June 30, 2012 June 30, 2013 Change In BRL millions - IFRS H1 2012 H1 2013 Change Total Homes passed 8,376 9,617 + 14.8% Total Revenues 2,052 2,353 + 14.7% Total Lines in Services (LIS) 7,617 9,684 + 27.1% Voice 1,263 1,313 + 4.0% Retail a
Slide 26: SFR Revenues
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 H1 2012 H1 2013 Change Change excl. In euro millions - IFRS Regulatory Impacts* Service revenues 3,663 2,968 - 19.0% - 13.8% Equipment sales, net 218 236 + 8.3% Mobile revenues 3,881 3,204 - 17.4% - 12.5% Broadband Internet and fixed revenues 1,9
Slide 27: SFR Mobile, Broadband Internet and Fixed
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 H1 2012 H1 2013 Change MOBILE Customers (in '000)* 20,790 21,049 + 1.2% Postpaid customers (in '000)* 16,414 17,372 + 5.8% Proportion of postpaid clients* 79.0% 82.5% + 3.5 pts Smartphone penetration ** 46% 55% + 9 pts Market share on customer ba
Slide 28: Appendices: Details for Discontinued Operations
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 APPENDICES Details for Discontinued Operations
Slide 29: Activision Blizzard Highlights
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 STRONG PRODUCTS AND FINANCIAL PERFORMANCE In euro millions - IFRS H1 2012 H1 2013 Change Revenues 1,731 1,807 + 4.4% EBITA 572 774 + 35.3% Activision Blizzard was the #1 third-party publisher in North America and Europe combined * Activision
Slide 30: Maroc Telecom Group Highlights
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 SOLID FUNDAMENTALS In euro millions - IFRS H1 2012 H1 2013 Change Revenues 1,363 1,300 - 4.6% EBITDA 751 755 + 0.5% EBITA 463 535 + 15.6% Strong growth in customer bases: +12.5%, to more than 35 million customers Rapid development of voice an
Slide 31: Appendices: Detailed Vivendi Financial Results
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 APPENDICES Detailed Vivendi Financial Results
Slide 32: Revenues
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 REVENUES Constant Constant Q2 2012 Q2 2013 Change In euro millions - IFRS H1 2012 H1 2013 Change currency currency 1,238 1,314 + 6.1% + 6.1% Canal+ Group 2,470 2,600 + 5.3% + 5.2% 961 1,145 + 19.1% + 22.5% Universal Music Group 1,922 2,236 + 16.3
Slide 33: EBITDA Q2
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 EBITDA Q2 In euro millions - IFRS Constant Q2 2012 Q2 2013 Change currency Canal+ Group 308 319 + 3.6% + 3.3% Universal Music Group 118 136 + 15.3% + 20.5% GVT 169 178 + 5.3% + 14.1% SFR 918 768 - 16.3% - 16.3% Holding & Corporate (35) (27) Other
Slide 34: EBITA Q2
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 EBITA Q2 Constant In euro millions - IFRS Q2 2012 Q2 2013 Change currency Canal+ Group 247 247 - - 0.3% Universal Music Group 88 88 - + 4.9% GVT 107 97 - 9.3% - 2.1% SFR 552 378 - 31.5% - 31.5% Holding & Corporate (41) (25) Others (2) (23) Total
Slide 35: Capex, Net
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 CAPEX, NET In euro millions - IFRS H1 2012 H1 2013 Change Canal+ Group 105 100 - 4.8% Universal Music Group 24 6 - 75.0% GVT 528 479 - 9.3% SFR 1,939 833 - 57.0% -4.7% excluding 4G Holding & Corporate - - spectrum acquisition Others 3 3 (€1,065m
Slide 36: Interest
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 INTEREST In euro millions (except where noted) – IFRS H1 2012 H1 2013 Interest (276) (276) Interest expense on borrowings (288) (285) Average interest rate on borrowings (%) 3.60% 3.30% Average outstanding borrowings (in euro billions) 16.0 17.3
Slide 37: Income Taxes
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 INCOME TAXES H1 2012 H1 2013 In euro millions – IFRS Adjusted Net income Adjusted Net income net income net income Tax savings related to the Vivendi SA's French Tax 209 198 158 127 Group and Consolidated Global Profit Tax Systems Tax charge (622
Slide 38: Reconciliation of Adjusted Net Income to Net Income, Group Share
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 RECONCILIATION OF ADJUSTED NET INCOME TO NET INCOME, GROUP SHARE In euro millions - IFRS H1 2012 H1 2013 Adjusted Net Income 1,127 845 Amortization and impairment losses of intangible assets acquired (297) (240) through business combinations Othe
Slide 39: Appendices: Glossary & Disclaimer
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 APPENDICES Glossary & Disclaimer
Slide 40: Glossary
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 GLOSSARY Adjusted earnings before interest and income taxes (EBITA): As defined by Vivendi, EBITA corresponds to EBIT (defined as the difference between income and charges that do not result from financial activities, equity affiliates, discontin
Slide 41: Important Legal Disclaimer
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 IMPORTANT LEGAL DISCLAIMER Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements with respect to Vivendi’s financial condition, results of operations, business, strategy, plans, and outlook of
Slide 42: Investor Relations Team
H 1 2 0 1 3 R e s u l t s – A u g u s t 2 9 , 2 0 1 3 INVESTOR RELATIONS TEAM Jean-Michel Bonamy Deputy CFO +33.1.71.71.12.04 jean-michel.bonamy@vivendi.com PARIS NEW YORK 42, avenue de Friedland 800 Third Avenue 75380 Paris cedex 08 / France New York, NY 10022 / USA Phone: +33.1.71.71.32.80 Phone: