Vivendi Se · EURONEXT:VIV
Vivendi — H1 2012 Earnings Presentation
51 slides from Vivendi's earnings presentation, Aug 30, 2012
Slide 1: First Half 2012 Results
Aug 30, 2012 JEAN-FRANCOIS DUBOS Chairman of the Management Board Chief Executive Officer STEPHANE ROUSSEL Chairman and CEO of SFR PHILIPPE CAPRON Member of the Management Board Chief Financial Officer FIRST HALF 2012 RESULTS IMPORTANT NOTICE: Financial statements unaudited and prepared under IFRS I
Slide 2: Jean-Francois Dubos
JEAN-FRANCOIS DUBOS Chairman of the Management Board Chief Executive Officer
Slide 3: Executive Summary
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 EXECUTIVE SUMMARY H1 2012 highlights ► Earnings in line with expectations, confirming 2012 guidance of Adjusted Net Income above €2.5bn*, and Net Debt below €14bn** at end 2012 ► Key focus: – Commercial stabilization and adaptation plan at SFR
Slide 4: H1 2012 Earnings
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 H1 2012 EARNINGS Revenues: € 14,084 m EBITA: € 2,937 m Adjusted Net Income: € 1,529 m CFFO before capex, net: € 3,294 m 4
Slide 5: Progress on Acquisitions Announced in 2011
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 PROGRESS ON ACQUISITIONS ANNOUNCED IN 2011 US Anti-trust decision ACQUISITION OF EMI RECORDED MUSIC expected Q3 2012 Europe BY VIVENDI AND UMG Japan Approval from French Competition Authority ACQUISITION OF DIRECT8 / DIRECT STAR (“Autorité de l
Slide 6: Litigations: Vivendi Actively Protecting Shareholders' Interests
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 LITIGATIONS: VIVENDI ACTIVELY PROTECTING SHAREHOLDERS’ INTERESTS CanalSat / TPS merger Vivendi and Canal+ Group are currently challenging the French Competition Authority’s decisions dated September 20, 2011 and July 23, 2012 to the French Admini
Slide 7: Conclusion
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 CONCLUSION H1 earnings in line with expectations confirming 2012 guidance Top priorities: ► Shareholder value creation and Adjusted EPS growth ► BBB / Baa2 rating as a key commitment Strategy and portfolio of assets under review ► No furthe
Slide 8: Stephane Roussel
STEPHANE ROUSSEL Chairman and CEO of SFR
Slide 9: Focus on Priorities
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 FOCUS ON 3 PRIORITIES 1. Strengthen commercial momentum with competitive offers tailored to each segment 2. Implement adaptation plan for cost reduction and simplification 3. Re-engineer multi-channel customer experience 9
Slide 10: Significant Improvement in Commercial Results in Q2 Compared to Q1
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 SIGNIFICANT IMPROVEMENT IN COMMERCIAL RESULTS IN Q2 COMPARED TO Q1 +122k Mobile subscribers in Q2, after -274k in Q1: Growing smartphone penetration: 46% at end June 2012, up 12pts yoy Mobile subscriber base at 16,414k at end June, +2.3% yo
Slide 11: Adaptation Plan: Target of ~€500m Operating Cost Reduction by End 2014
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 ADAPTATION PLAN: TARGET OF ~€500M OPERATING COST REDUCTION, BY END 2014 SFR COST STRUCTURE 2011 ACTUAL DRIVERS 1. Interconnection costs ~€3.0bn - Customer base and traffic volumes - Regulatory decisions (level and asymmetry of termination tariff,
Slide 12: SFR Adaptation Plan Aims To
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 SFR ADAPTATION PLAN AIMS TO: Significant reduction of operating costs by ~€500m (-25%) per annum by end 2014 An exhaustive process throughout SFR organization: ~60 vertical and ~20 horizontal workshops Preservation of advertising spending a
Slide 13: Philippe Capron
PHILIPPE CAPRON Member of the Management Board Chief Financial Officer
Slide 14: In Line H1 2012 Earnings Confirming 2012 Guidance
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 IN LINE H1 2012 EARNINGS CONFIRMING 2012 GUIDANCE EBITA of €2,937m, down 13% due to: Unfavorable calendar impact at Activision Blizzard and lower SFR contribution Restructuring charges at Maroc Telecom (€72m) More than offsetting increase
Slide 15: EBITA Down 3.7% Excluding Activision Blizzard and Maroc Telecom Restructuring
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 EBITA DOWN 3.7%, EXCLUDING ACTIVISION BLIZZARD AND RESTRUCTURING CHARGES AT MAROC TELECOM In euro millions - IFRS H1 2012 H1 2011 Change Constant currency Activision Blizzard 572 833 - 31.3% - 35.6% Partly due to timing of game releases Universal
Slide 16: Adjusted Net Income Impacted by Lower EBITA and Higher Interest and Taxes
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 ADJUSTED NET INCOME IMPACTED BY LOWER EBITA AND HIGHER INTEREST AND TAXES In euro millions - IFRS H1 2012 H1 2011 Change % Revenues 14,084 14,253 - 169 - 1.2% EBITA 2,937 3,363 - 426 - 12.7% Incl. contractual dividends received from GE at closing
Slide 17: High Cash Flows of €3.3 Billion Allowing Significant Growth Investments
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 HIGH CASH FLOWS OF €3.3 BILLION ALLOWING SIGNIFICANT GROWTH INVESTMENTS: 4G SPECTRUM, GVT CFFO before capex, net CFFO H1 2012 H1 2011 Change In euro millions - IFRS H1 2012 H1 2011 Change 245 240 + 2.1% Activision Blizzard 225 222 + 1.4% 126 80 +
Slide 18: Net Debt at End June in Line with Guidance
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 NET DEBT AT END JUNE IN LINE WITH GUIDANCE OF NET DEBT BELOW €14 BILLION AT END 2012* Net Debt Net Debt December 31, CFFO Capex, net Interest & tax Dividends paid Dividends paid Others June 30, 2011 before Capex, net paid and other to shareholder
Slide 19: Financing Actively Managed Thanks to Market Support
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 FINANCING ACTIVELY MANAGED THANKS TO MARKET SUPPORT Several refinancing operations since the beginning of 2012… Setting up of two 5-year bank credit facilities for a cumulated amount of €2.6bn* Issuance of €1.55bn in bonds with €1.25bn at 5
Slide 20: Activision Blizzard: Results Exceed Forecast, Guidance Upgrade
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 RESULTS EXCEED FORECAST, GUIDANCE UPGRADE IFRS - H1 2012 H1 2011 Change Constant In euro millions currency 2012 GUIDANCE UPGRADED Revenues 1,731 1,857 - 6.8% - 13.6% Activision 1,199 1,154 + 3.9% - 3.6% EBITA around €800m (vs. above €750m) Blizza
Slide 21: Universal Music Group: Improved Results Driven by Digital Growth
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 IMPROVED RESULTS DRIVEN BY DIGITAL GROWTH In euro millions - IFRS H1 2012 H1 2011 Change Constant currency 2012 GUIDANCE CONFIRMED Revenues 1,922 1,863 + 3.2% - 1.0% Double digit EBITA margin EBITA 156 132 + 18.2% + 15.3% at constant perimeter* o
Slide 22: SFR: Improved Commercial Results in Q2
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 IMPROVED COMMERCIAL RESULTS IN Q2 In euro millions - IFRS H1 2012 H1 2011 Change 2012 GUIDANCE CONFIRMED Revenues 5,761 6,120 - 5.9% Mobile 3,881 4,257 - 8.8% 12% to 15% decrease in EBITDA* Broadband Internet & Fixed 1,981 2,001 - 1.0% CFFO close
Slide 23: Maroc Telecom Group: Results in Line with Targets
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 RESULTS IN LINE WITH TARGETS In euro millions - IFRS H1 2012 H1 2011 Change Constant currency 2012 GUIDANCE CONFIRMED* Revenues 1,363 1,361 + 0.1% - 0.8% Morocco 1,067 1,115 - 4.3% - 5.3% EBITA margin around 38% International 313 256 + 22.3% + 21
Slide 24: GVT: Continued Growth and Improved Telecom Margin
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 CONTINUED GROWTH & IMPROVED TELECOM MARGIN In euro millions - IFRS H1 2012 H1 2011 Change Constant Currency 2012GUIDANCE GUIDANCE2012 REVISED Revenues 853 682 + 25.1% + 31.4% Telecoms 829 682 + 21.6% + 27.6% Revenue growth above 30% (vs. mid-30’s
Slide 25: Canal+ Group: Solid Portfolio and Revenue Growth
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 SOLID PORTFOLIO AND REVENUE GROWTH In euro millions - IFRS H1 2012 H1 2011 Change Constant currency 2012 GUIDANCE CONFIRMED Revenues 2,470 2,392 + 3.3% + 3.7% o/w Canal+ France 2,064 2,018 + 2.3% + 2.3% Slight increase in EBITA at constant perime
Slide 26: 2012 Outlook for the Group: Confirmed
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 2012 OUTLOOK FOR THE GROUP: CONFIRMED Confirmed 2012 guidance, before restructuring charges in telecom operations ► Adjusted Net Income above €2.5bn, before impact of transactions announced in H2 2011 Financial Net Debt to be below €14.0bn* a
Slide 27: Vivendi
vivendi ACTIVISION BIA on Eten) GWT, GROUP UNIVERSAL MUSIC GROUP
Slide 28: Appendices
vivendi APPENDICES
Slide 29: Vivendi Business Leadership Positions
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 62%* 100% 100% #1 worldwide in #1 worldwide #1 alternative telecoms video games in music in France 53%* 100% 100%** #1 alternative #1 in telecoms broadband operator #1 in pay TV in Morocco in Brazil in France 29 * Based on shares outstanding, as
Slide 30: Appendices: Details of Business Operations
APPENDICES Details of Business Operations
Slide 31: Activision Blizzard Non-GAAP Net Revenues
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 Non-GAAP* - H1 2012 H1 2011 Change Non-GAAP* Net revenues by distribution H1 2012 H1 2011 Change In dollar millions channel - In dollar millions Activision 645 646 0% Retail channels 733 453 62% Blizzard 884 671 32% Digital online channels ** 796
Slide 32: Reconciliation to IFRS
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 RECONCILIATION TO IFRS In millions H1 2012 In millions H1 2012 Non-GAAP Net Revenues $1,641 Non-GAAP Operating Income/(Loss) $390 Changes in deferred net revenues (a) $606 Changes in deferred net revenues and related cost of sales (a) $407 Net Re
Slide 33: Universal Music Group Recorded Music and Revenues
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 Recorded music : Top-selling artists* Million units H1 2012 H1 2011 Madonna 2.2 Lady Gaga 5.7 Recorded Music Revenues H1 2012 H1 2011 Justin Bieber 2.1 Rihanna 1.7 Lana Del Rey 1.9 Justin Bieber 1.4 Europe 39% 40% Lionel Richie 1.5 Jennifer Lopez
Slide 34: SFR Revenues
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 H1 2012 H1 2011 Change Change excl. In euro millions - IFRS Regulatory Impacts* Service revenues 3,663 4,008 - 8.6% - 2.0% of which data revenues from mobile services 1,402 1,363 + 2.9% Equipment sales, net 218 249 - 12.4% Mobile revenues 3,881 4
Slide 35: SFR Mobile, Broadband Internet and Fixed KPIs
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 H1 2012 H1 2011 Change MOBILE Customers (in '000)* 20,790 21,059 - 1.3% Postpaid customers (in '000)* 16,414 16,041 + 2.3% Proportion of postpaid clients* 79.0% 76.2% + 2.8 pts Smartphone penetration ** 46% 34% + 12 pts Market share on customer b
Slide 36: Maroc Telecom Morocco and International KPIs
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 MOROCCO H1 2012 H1 2011 In '000 June 30, 2012 June 30, 2011 Mobile customers (in '000) 17,385 16,994 Mauritania Postpaid mobile customers (in '000) 1,130 934 Mobile customers 1,956 1,827 Mobile ARPU (MAD/customer/month) 81 86 Fixed lines 41 41 Nu
Slide 37: GVT Operating Data and Revenues
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 In '000 June 30, 2012 June 30, 2011 Change In BRL millions - IFRS H1 2012 H1 2011 Change Total Homes passed 8,376 6,247 + 34.1% Total Revenues 2,052 1,563 + 31.3% Total Lines in Services (LIS) 7,617 5,253 + 45.0% Voice 1,263 953 + 32.5% Retail an
Slide 38: Canal+ Group Portfolio, Churn and ARPU
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 In '000 June 30, 2012 June 30, 2011 Change Portfolio Canal+ Group 12,979 12,502 + 477 ow Canal+ France* 11,218 10,869 + 349 ow Poland & Vietnam 1,761 1,633 + 128 In Mainland France June 30, 2012 June 30, 2011 Change Churn per digital subscriber 1
Slide 39: Appendices: Detailed Vivendi Financial Results
APPENDICES Detailed Vivendi Financial Results
Slide 40: Revenues
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 REVENUES Constant Constant Q2 2012 Q2 2011 Change In euro millions - IFRS H1 2012 H1 2011 Change currency currency 837 796 + 5.2% - 6.2% Activision Blizzard 1,731 1,857 - 6.8% - 13.6% 961 982 - 2.1% - 7.9% Universal Music Group 1,922 1,863 + 3.2%
Slide 41: EBITDA
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 EBITDA Constant Constant Q2 2012 Q2 2011 Change In euro millions - IFRS H1 2012 H1 2011 Change currency currency 227 367 - 38.1% - 44.7% Activision Blizzard 656 926 - 29.2% - 33.6% 118 114 + 3.5% - 0.8% Universal Music Group 219 193 + 13.5% + 10.
Slide 42: EBITA
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 EBITA In euro millions - IFRS Q2 2012 Q2 2011 Change Constant currency Activision Blizzard 177 331 - 46.5% - 52.3% Universal Music Group 88 86 + 2.3% - 0.1% SFR 552 675 - 18.2% - 18.2% Maroc Telecom Group 190 265 - 28.3% - 29.8% GVT 107 97 + 10.3
Slide 43: Interest
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 INTEREST In euro millions (except where noted) – IFRS H1 2012 H1 2011 Interest (286) (207) Interest expense on borrowings (299) (234) Average interest rate on borrowings (%) 3.63% 3.97% Average outstanding borrowings (in euro billions) 16.5 11.8
Slide 44: Income Taxes
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 INCOME TAXES H1 2012 H1 2011 In euro millions – IFRS Adjusted Net income Adjusted Net income net income net income Utilization of Vivendi SA’s tax losses carried forward 209 198 424 536 Tax charge (920) (841) (1,036) (973) Provision for income ta
Slide 45: Reconciliation of Adjusted Net Income to Net Income, Group Share
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 RECONCILIATION OF ADJUSTED NET INCOME TO NET INCOME, GROUP SHARE In euro millions - IFRS H1 2012 H1 2011 Adjusted Net Income 1,529 1,834 Amortization and impairment losses of intangible assets acquired (314) (241) through business combinations Se
Slide 46: Capex, Net
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 CAPEX, NET In euro millions - IFRS H1 2012 H1 2011 Change Activision Blizzard 20 18 + 11.1% +4.3% excl. 4G spectrum Universal Music Group 24 22 + 9.1% acquisition for €1,071m SFR 1,939 832 x2.3 Maroc Telecom Group 271 260 + 4.2% GVT 528 336 + 57.
Slide 47: Appendices: Glossary & Disclaimers
APPENDICES Glossary & Disclaimers
Slide 48: Glossary
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 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 49: Activision Blizzard Standalone Definition & Disclaimer
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 ACTIVISION BLIZZARD STANDALONE DEFINITION & DISCLAIMER NON-GAAP financial measures Activision Blizzard provides net revenues, net income (loss), earnings (loss) per share and operating margin data and guidance both including (in accordance with G
Slide 50: Important Legal Disclaimer
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 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 51: Investor Relations Team
H 1 2 0 1 2 R e s u l t s – A u g u s t 3 0 , 2 0 1 2 INVESTOR RELATIONS TEAM Jean-Michel Bonamy Executive Vice President Head of Investor Relations +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 100