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Vivendi — Investor Presentation (June 2006)
31 slides from Vivendi's investor presentation, June 2006
Slide 1: Investors Presentation June 2006
Investors Presentation June 2006 IMPORTANT NOTICE: This presentation contains consolidated unaudited earnings established under IFRS. INVESTORS ARE STRONGLY ADVISED TO READ THE IMPORTANT LEGAL DISCLAIMER AT THE END OF THIS PRESENTATION 1
Slide 2: Innovation and Leadership
Innovation and Leadership > Create and market to our subscribers new digital content services for broadband and mobile applications To > Strengthen our leadership positions in our complementary content and distribution businesses And > Double our Adjusted Net Income over the 2006-2011 period, exclud
Slide 3: Leading Positions in Media and Telecom
Leading Positions in Media and Telecom Figures as of end-2005 Leading global music company > €4.9bn Revenues, €480m Earnings from operations > 25.6% estimated worldwide market share of physical sales of recorded music Leading global online games company > €641m Revenues, €41m Earnings from operation
Slide 4: Vivendi's Scale and Resources Benefit Our Businesses
Vivendi’s Scale and Resources Benefit Our Businesses > Improved time-to-market in roll-out of new technologies > SFR: 1st operator to launch UMTS and HSDPA offerings (4 to 5 months ahead of Orange) > Canal+ available on all platforms: DTH, Cable, DTT, DSL, Mobile, DVB-H > Vivendi Games: world leader
Slide 5: Driving Customer Penetration and Technological Lead
Driving Customer Penetration and Technological Lead Revenues Generated Number of MMOG Number of Pay-TV Through Digital Sales Subscribers (m) Subscriptions in France (m) (Last 12 months as of 31/03/2006) €325m 8.3 6.6 €193m €151m 3.0 2.1 2.2 1.3 UMG WMG EMI World of Lineage I Lineage II Canal+ Group
Slide 6: A Growing Stream of Cross-Marketing Initiatives
A Growing Stream of Cross-Marketing Initiatives Divisions Key Initiatives Divisions Involved > SFR was the 1st mobile operator to offer almost all of UMG’s music catalog > A selection of the IMF music channel programming is available over SFR > Several games tapping into UMG’s music catalog and rost
Slide 7: Ahead of Our Competitors
Ahead of Our Competitors Targeting at least €400m > Our competitors in telecommunications are in direct paid content revenues by 2008 investing in the media sector: Acquisition of football > Content platforms, acquisition of rights coverage exclusive content rights, etc. > Our competitors in content
Slide 8: A Shared Expertise: the Subscription-Based Model
A Shared Expertise: the Subscription-Based Model > Our subscribers*: SFR: 17 million CANAL+ Group: 8 million Maroc Telecom: 10 million (fixed line – mobile – Internet) World of Warcraft: 6 million > Benefits of the subscription-based model: Visibility of revenues and ability to generate re
Slide 9: Converting Innovation into Subscribers
Converting Innovation into Subscribers Innovation in mobile > > > > > > > > > > > > > > Subscribers Messages > 6.5 billion SMS* (in 2005) > 120 million MMS* (in 2005) Music Video call > 2 million > 1.5 million 3G subscribers (end of May 2006) downloads > 2 million videoconferences (in 2005) (since J
Slide 10: Corporate Governance in Line with Best-in-Class International Standards
Corporate Governance in Line with Best-in-Class International Standards > Two-tiered corporate governance structure: > Supervisory Board composed of 9 independent members out of 11 > Management Board of 7 individuals, associating all business units to decisions of the Group > Committees mostly inclu
Slide 11: Experienced Management Team
Experienced Management Team > Unified team with a common managerial culture that shares the same goals: > Adjusted Net Income > Cash flow generation > Decentralized management organization characterized by: > Profitability of each business unit on a stand-alone basis > Rigorous financial control mec
Slide 12: Experienced Management Team Sharing the Same Goals
Experienced Management Team Sharing the Same Goals Bertrand René Doug Jean-Bernard Frank Jacques Abdeslam Meheut Pénisson Morris Lévy Esser Espinasse Ahizoune C.E.O Chairman Chairman C.E.O Chairman & Chief Financial C.E.O & C.E.O C.E.O Officer Groupe Vivendi Games; UMG SFR Maroc Telecom CANAL+ Group
Slide 13: 2011 Outlook
2011 Outlook > Earnings from operations: > Annual average growth between 8% and 10% over 2006-2011 > Adjusted Net Income: > 2006 target: approximately €2.4bn > Between €3.5bn and €4.0bn by 2011, i.e. CAGR of approximately 16% excluding the impact of the Consolidated Global Profit Tax System > Divide
Slide 14: Strategic Plan in Line with the Results Momentum Initiated in 2002
Strategic Plan in Line with the Results Momentum Initiated in 2002 Adjusted Net Income (€m) 3,500 – 4,000 approx. 2,400 2,078 2006E-2011E CAGR 1,338 (excluding Consolidated Global Profit Tax System) : 349 approx. 16% (514) 2002A 2003A 2004A 2005A 2006E 2011E Net (0.9)% 1.4% 7.5% 10.7% approx. Margin
Slide 15: Key Assumptions of the Strategic Plan
Key Assumptions of the Strategic Plan > Background: 5-year plan announced at AGM and approved by the Supervisory Board on May, 15 2006 > Scope of analysis: group perimeter conservatively assumed to be stable > Merger between Canal+/TPS from 2007 > 35% stake in neuf cegetel in 2006 > Status quo in Po
Slide 16: An Attractive Dividend Policy
An Attractive Dividend Policy > Vivendi has committed to distribute at least 50% of its Adjusted Net Income > 2006E dividend yield in upper-half of peer group 8.0% Vivendi 7.0% Telecom 2006E Dividend Yield 6.0% Media 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Vivendi EMI France Telecom Time Warner Telecom Italia
Slide 17: Illustration of Potential Value Creation for Shareholders
Illustration of Potential Value Creation for Shareholders > For illustrative purposes, based on current P/E levels, implied impact on Vivendi’s share price of Adjusted Net Income growth assuming market conditions unchanged: A 2011 Adjusted Net Income(1) €3.5 bn €4.0 bn B 2011 P/E(2) 16.0 x 16.0 x C
Slide 18: Appendices
Appendices Financial information presented in the forthcoming pages is in euro million on a comparable basis, unless otherwise mentioned 18
Slide 19: Universal Music Group
Universal Music Group Revenues (€m) +1.5% 4,893 4,893 > No.1 worldwide in physical sales of recorded music with an 4,819 estimated global market share of 25.6% > No. 3 worldwide in music publishing 2004 2005 > Operating in 75 countries Digital sales (€m) > Largest artist catalog in the world, well b
Slide 20: Universal Music Group: Strategy and Growth Drivers to 2011
Universal Music Group: Strategy and Growth Drivers to 2011 2006-2011 outlook > Rapid growth of digital, online and mobile sales which could represent more than 25% of revenues in 2011 vs. 5% in 2005… > …Allowing to maintain worldwide market share at a high level > Speed up the evolution towards a mu
Slide 21: Vivendi Games
Vivendi Games 2005 Sales > Global developer, publisher and distributor of interactive Handheld Online PC 7% 49% 17% games > Intellectual property library of over 700 titles Console > World leader in online games with over 6.6m paying clients 27% Revenues (€m) worldwide to one single game, World of W
Slide 22: Vivendi Games: Strategy and Growth Drivers to 2011
Vivendi Games : Strategy and Growth Drivers to 2011 2006-2011 outlook > Vivendi Games’ main growth drivers: development of Broadband Internet, growth in Asia, games on mobile > With a leading worldwide position and a steady improvement of its content and geographical development, World of Warcraft w
Slide 23: CANAL+ Group
CANAL+ Group Revenues (€m) +4% 3,407 4,893 > French leader in pay-TV production and distribution in France > Active presence across all digital distribution platforms 3,277 > 8.3m subscriptions in France: 2004 2005 > 5.1m subscriptions to CANAL+ premium channel French Pay-TV Portfolio > 3.2m subscri
Slide 24: CANAL+ Group: Strategy and Growth Drivers to 2011
CANAL+ Group: Strategy and Growth Drivers to 2011 2006-2011 outlook > Growth of pay-TV market with new distribution platforms (ADSL, DTT, mobile) and increased digitalization (nearly 100% digital subscribers in 2011) > Strengthening of Canal+ Le Bouquet premium offering and broadening of multi- chan
Slide 25: SFR
SFR Revenues (€m) +7.0% > 2nd largest mobile telecommunications operator in France 8,687 4,893 > 35.8% market share at the end of 2005 8,117 > 17.3 million customers of which 63.7% are post-paid clients (March 2006) 2004 2005 > Leading position in terms of subscriber net adds for the third Customers
Slide 26: SFR: Strategy and Growth Drivers to 2011
SFR : Strategy and Growth Drivers to 2011 2006-2011 outlook > Management of subscriber base > Low penetration of French market (80%) compared to the rest of Western Europe (98% in average) > Benefit from increased penetration in France towards 100%, with a target market share very close to current l
Slide 27: Maroc Telecom: Growth opportunities
Maroc Telecom: Growth opportunities Revenues (€m) +16% > Morocco’s incumbent telecommunications operator with a leading position 1,860 4,893 based on: 1,611 > A segmented and competitive offering tailored to customers’ needs > An extended distribution network 2004 2005 > A modern network infrastruct
Slide 28: Maroc Telecom: Strategy and Growth Drivers to 2011
Maroc Telecom : Strategy and Growth Drivers to 2011 2006-2011 Outlook > Boost profitable growth on mobile market and consolidate leadership position > Strengthening of penetration and usage of mobile telecommunication services > Launch of innovative services > Roll-out of UMTS network in 2007 > Inte
Slide 29: Focus on the Consolidated Global Profit Tax System
Focus on the Consolidated Global Profit Tax System > Vivendi was admitted to the French Consolidated Global Profit Tax System on August 22, 2004 for a 5-year period. This period may be extended > Admission conditioned to the inclusion of SFR and Canal+ in Vivendi scope of consolidation > Tax savings
Slide 30: IR Team
IR Team Daniel SCOLAN Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@vivendi.com Paris New York 42, Avenue de Friedland 800 Third avenue 75380 Paris cedex 08 / France New York, NY 10022 / USA Phone: +33.1.71.71.12.33 Phone: +1.212.572.1334 Fax: +33.1.71.71.14.16 Fax: +1.
Slide 31: Important Legal Disclaimer
Important Legal Disclaimer Vivendi is quoted on the NYSE and on Euronext Paris SA. This presentation contains “forward-looking statements” as that term is defined in the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of the company’s future pe