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Vivendi — CANAL+ Group — Investor Presentation (June 2006)
22 slides from Vivendi's investor presentation, June 2006
Slide 1: Geared Up for Growth
GEARED UP FOR GROWTH Investor Presentation JUNE 2006 IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT DISCLAIMER AT THE END OF THIS PRESENTATION.
Slide 2: The French Pay-TV Market Holds Significant Growth Potential
THE FRENCH PAY-TV MARKET HOLDS SIGNIFICANT GROWTH POTENTIAL Yesterday Today 8 Ailing CANAL+ image and financials 9 Turnaround of CANAL+ GROUP 8 No premium multi-channel offer 9 Launch of CANAL+ LE BOUQUET 8 Inability to reach 100% of households 9 Broadened pay-TV distribution 8 Fragmented cable sect
Slide 3: France's TV Industry Shaper
FRANCE’S TV INDUSTRY SHAPER A pioneer in digital and pay-TV • Launched pay-TV concept in France in 1984 • Pioneered digital TV in Europe in 1996 • Launched France’s only multi-channel premium offer in 2005 #1 TV operator in France 2005 revenues (€ bn) 2005 subscriptions (m) 2005 programming investme
Slide 4: A Leader on Core Businesses
A LEADER ON CORE BUSINESSES PAY-TV CHANNEL PRODUCTION DISTRIBUTION France’s leading premium A leader on all domestic multi-channel package distribution platforms 17 leading theme channels 22-year experience in customer (free to air) relationship management A leading international satellite operator
Slide 5: A Well-Established Brand
A WELL-ESTABLISHED BRAND 22-year experience in developing unique TV formats 100% brand awareness A brand associated with quality content for 83% of customers High and rising subscriber satisfaction (85%) 83% of customers would recommend CANAL+ to others 5
Slide 6: Three Levers to Capture Market Growth: Content, Distribution and Technology
THREE LEVERS TO CAPTURE MARKET GROWTH: CONTENT, DISTRIBUTION AND TECHNOLOGY Offer the best content with the best brand Leadership on premium • Invest in exclusive premium content content • Leverage CANAL+ brand and content via multi-channel offer CANAL+ LE BOUQUET and appropriate publishing Increase
Slide 7: Offering the Best, Exclusive Content
OFFERING THE BEST, EXCLUSIVE CONTENT New 5-year deal with the French cinema industry Renewal of output deals with major US studios • Fox, Universal, Sony/Columbia, DreamWorks, Spyglass Exclusive rights for the 2005-2008 French soccer league Champions League pay-TV rights until 2009 The best of US an
Slide 8: Exclusive Agreements with Top Hollywood Studios
EXCLUSIVE AGREEMENTS WITH 8 TOP HOLLYWOOD STUDIOS Rank STUDIOS Market share First Window 2005* 1 Warner Bros 15.8% TPS 2 20th Century Fox 15.5% CANAL+ 3 Sony Columbia 10.3% CANAL+ 4 Universal 10.3% CANAL+ 5 Paramount 10.0% TPS 6 Disney/Buena Vista (animation/hors anim.) 8.8% CANALSAT/TPS 7 DreamWork
Slide 9: Unrivaled Expertise in Enhancing Content Value
UNRIVALED EXPERTISE IN ENHANCING CONTENT VALUE Launch of France’s only premium multi-channel offer: CANAL+ LE BOUQUET • Segmented Movies and Sports offers Setting the industry standard in soccer coverage • CANAL+ is the channel for soccer for 9 out of 10 people in France • Perceived consumer value o
Slide 10: Re-instate Innovation at the Core of the Value Proposition
RE-INSTATE INNOVATION AT THE CORE OF THE VALUE PROPOSITION Encourage "ubiquity" in content access • CANALSAT package over SFR and Bouygues Telecom • Recorder on multimedia player: agreement with ARCHOS • CANAL+ & CANALSAT package over DVB-H Bring TV experience closer to Cinema • High definition tech
Slide 11: Impact of New Strategic Initiatives
IMPACT OF NEW STRATEGIC INITIATIVES ARPU Price increase ; Reduction in free months & promotions ; Develop new ways of watching TV ; Penetration Increased number of platforms ; New TV habits (mobile) ; Re-packaged CANALSAT offer ; 11
Slide 12: A High Performing Platform: Satellite
A HIGH PERFORMING PLATFORM: SATELLITE By far the largest digital platform in France • 4.5M subscribers vs. ~>2M for cable and ~300k for DSL CANALSAT: 10-year experience in satellite TV • A clear leader with 2/3 of the satellite market • A pioneer in new technologies designed to increase penetration
Slide 13: Capitalize on DTT Opportunities
CAPITALIZE ON DTT OPPORTUNITIES A convenient plug-and-play digital technology The only premium package available on terrestrial TV CANAL+ GROUP: #1 DTT operator A mini package with 4 leading theme channels The only 24-hour news channel available free-to-air A satellite-ready DTT set-top box to upgra
Slide 14: France's First Pay-TV Offer over DTT
FRANCE’S FIRST PAY-TV OFFER OVER DTT + + Sagem MPEG-4 box or Subscription fee : 31,90€ / month Offer Thomson MPEG-4 box + + Warranty deposit : 75 € One-off access fee : 40€ Set-top-box rental : 8€ / month Subscription fee : 7€ / month 2-step roll out plan: End-November 2005: delivery of set-top-bo
Slide 15: French Pay TV Market Overview
FRENCH PAY TV MARKET OVERVIEW Premium Theme VOD Satellite Cable TVoDSL Mobile TV Channels Channels Platforms Platforms Platforms Platforms Platforms Analog, satellite, Satellite, 3G mobile DSL Satellite, DSL Cable DSL cable, DSL, DTT cable, DSL, DTT (DVB-H) Channels Distribution platforms 15
Slide 16: New Population & New Usage to Broaden the Pay-TV Market
NEW POPULATION & NEW USAGE TO BROADEN THE PAY-TV MARKET TV over DSL • Complementary to satellite in the heart of cities • CANAL+ GROUP to capture 80% of the market • Cannibalization <20% TV over mobile phones • Access to new demographics through a new offer • Content customization, better knowledge
Slide 17: Increase Leadership on All Platforms
INCREASE LEADERSHIP ON ALL PLATFORMS Satellite, cable, DSL, DTT and mobile TV create new opportunities to grow subscriber base and increase ARPU Pay-TV subscribers 12 Millions Total (excluding mobile) 10 8 6 Satellite Ò 4 Cable ¼ 2 DTT Ò ADSL Ò Analogue Ô 97 98 00 99 02 03 01 04 05 06 07 08 09 11 10
Slide 18: Results Are Proving Conclusive with Accelerating Sales
RESULTS ARE PROVING CONCLUSIVE WITH ACCELERATING SALES CANAL+ monthly recruitments CANALSAT monthly recruitments (year on year growth) (year on year growth) +18% +7% Thousands 90 Thousands 80 70 60 50 40 30 20 10 0 Feb. Mar. Jul. Jan. Apr. Aug. May June Sept. Dec. Nov. Oct. . . n. . Se . b. . ne . .
Slide 19: Key First Quarter 2006 Metrics
KEY FIRST QUARTER 2006 METRICS CANAL+ Group net portfolio* (in thousands) +285 8,213 7,928 3,012 3,204 CANALSAT CANAL+ 4,916 5,009 March 2005 March 2006 CANAL+ ARPU €28.2 €29.7 +€1.5, i.e. +5.3% CANALSAT ARPU €34.4 €35.8 +€1.4, i.e. +4.1% * Individual and collective subscriptions to CANAL+ and CANAL
Slide 20: Our Vision: Deliver the Best Content Anywhere, Anytime
OUR VISION: DELIVER THE BEST CONTENT ANYWHERE, ANYTIME Subscription Purchasing act At home Outside home In mobility DVB-H 3G Subscribers Mobility Collective subs. extension Multi- equipment Programmed Collective subs. Subscribers DVB-H subs. 3G subs. content SVOD subscribers Purchasing acts On deman
Slide 21: Our Objective: Profitable Growth
OUR OBJECTIVE: PROFITABLE GROWTH 2002 – 2005 Achievements 2008 Ambition 2010 Ambition Turn-around the Capture the bulk Triple profitability group’s performance of market’s growth Subscriptions* (M) 8.3 10** EFO margin (%) 5.2% 15%** * Including collective subscriptions ** Excluding the impact of the
Slide 22: Important Legal Disclaimer
IMPORTANT LEGAL DISCLAIMER CANAL+ Group is a subsidiary of Vivendi S.A., which 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 a