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Vivendi — Vivendi Universal — Investor Presentation (September 2002)
28 slides from Vivendi's investor presentation, Sep 25, 2002
Slide 1: Vivendi Universal Investor and Analyst Update
Vivendi Universal Investor and Analyst Update Jean-Rene Fourtou, Chairman & CEO Jean-Bernard Levy, Chief Operating Officer Jacques Espinasse, SEVP & CFO September 25, 2002
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance or business strategy. Actual results may differ materially from the forwa
Slide 3: Company Update - Jean-Rene Fourtou
Company Update Jean-Rene Fourtou Chairman and Chief Executive Officer
Slide 4: The Liquidity Crisis is Nearly Solved
The Liquidity Crisis is Nearly Solved Early July, the company was confronted by a very serious situation: Ratings slashed by rating agencies Liquidity crisis Excessive levels of debt End of September, the liquidity crisis is nearly solved Medium-term credit line for Euro 3 billion is being implement
Slide 5: A Firmly Engaged Disposal Plan
A Firmly Engaged Disposal Plan Our priority is to reduce the excessive level of debt Plan to dispose Euro 12 billion of assets within 18 months Euro 1.1 billion finalized Majority of non-core assets in process of being disposed Main assets in the disposal plan*: Canal+ activities outside France (Ita
Slide 6: Other Important Issues Have Been Addressed
Other Important Issues Have Been Addressed Reduce main cash drains Build a new management team Inform employees and labor unions Overhaul our cash management system Develop a new strategy
Slide 7: Vivendi Universal Landscape in July 2002
* Illustrative and non-exhaustive list. Universal Pictures USA Networks Theme Parks Canal+ Studio Canal Cegetel Energy Services Transportation Water Kenya Music Games US publishing References French press magazines Telepiu Thematic channels Nordic countries Benelux Spain Poland Hungary European chan
Slide 8: The New Vivendi Universal
Universal Pictures USA Networks Theme parks Studio Canal Cegetel Energy Services Transportation Water Music Games Waste Management New Canal+ The New Vivendi Universal* * Non-exhaustive list, subject to the necessary consultations.
Slide 9: The New Vivendi Universal
The New Vivendi Universal HOLDING Universal Music Group Vivendi Universal Entertainment ENTERTAINMENT Cegetel Group New Canal+ Vivendi Universal Games UNIVERSAL Publishing International Canal+ assets International Telecoms assets Internet Property and Miscellaneous assets Vivendi Environnement Asset
Slide 10: A Balance Between Europe and North America
TOTAL ENTERTAINMENT Games Canal+ VUE Music Geographic Distribution 2002 Revenue * 45% 62% 2% 70% 42% North America 44% 27% 93% 21% 41% Europe 11% 11% 5% 9% 17% Rest of the World 100% 4% 22% 37% 37% % of Total Revenue * Forecast geographic distribution of 2002 revenue assuming the disposal of VUP, Te
Slide 11: Our Core Business: Entertainment (Including Content Creation)
Our Core Business: Entertainment (Including Content Creation) One of the world's leaders in entertainment and communication, number one in Europe Good prospects for growth and increased value Assets that are leaders in their businesses and have strong potential synergies High quality managers Outsta
Slide 12: Our Goal
Our Goal To partner on both sides of the Atlantic with the managers and talented employees that are the key to these businesses, through financial agreements and management methods
Slide 13: Conclusion
Conclusion Vivendi Universal's primary overall objective is to create value for its shareholders The liquidity crisis is almost behind us The main sources of cash drain have been reduced, closed, sold or about to be A plan to dispose of assets worth Euro 12 billion within the next 18 months is being
Slide 14: Main Reasons For Treasury Crisis
Main Reasons For Treasury Crisis Investments undertaken without long term financing Treasury share acquisitions cash losses of Euro 4.5 billion puts cost of Euro 0.8 billion Euro 2 billion debt issuance planned for Q1 02 cancelled Euro 1.0 billion dividend payment in May 2002 Poor net cash flows Rep
Slide 15: Resolution of Treasury Crisis
Resolution of Treasury Crisis Cash available to VU of Euro 1.1bn Euro 4.6bn bank lines Euro 3.0 bn Euro 1.6bn VUE loan Waiver status Euro 3.0 billion facility Euro 850 million facility Other debt (bilaterals) Strong cash management systems now in place Daily cash update meetings RESOLUTION OF THE TR
Slide 16: Overview of Euro 3 Billion Facility
Overview of Euro 3 Billion Facility Vivendi Communications North America Inc. (holding VUP US) Vivendi Universal Holding I Corp (holding VU US) Borrowers Guarantors Borrowers, VU, other intermediate US Holding companies Tranche A - Euro 2 bn Term Loan - November 2003 maturity Tranche B - Euro 500 mn
Slide 17: Requested Waivers and Consents
Requested Waivers and Consents 1 - Consent to all borrowing if more than 30% of debt is located at subsidiary level 2 - Consent to all publicised core and non-core disposals to be sought, by way of confirmation that no restriction Consents Required Maturity Borrowing Consent Negative Pledge Waiver D
Slide 18: Benefits for the Affected Lenders
Benefits for the Affected Lenders Security Key Mandatory Payments Pricing Additional Liquidity at VU The Affected Lenders will be offered the following package in return for approving the requests: Financial Covenants Euro 3.0 billion Facility Euro 850 million Facility Existing Margin 47.5 bps p.a.
Slide 19: Liquidity Analysis
1 Liquidity Analysis * Before drawing of the Euro 3 bn facility but including the drawing of the Euro 1 bn facility 2,475 2,475 2,360 Cash-end of period 9 1,256 2,360 1,256 Cash beginning of period 8 1,219 116 1,104 Cash-flow before additional Drawing 7 3,867 - - 3,867 Drawings / renewal of existing
Slide 20: Management Targets
Cash-flow from operations post tax and interests Management Targets * Before drawing of the Euro 3 bn facility but including the drawing of the Euro 1 bn facility + 1,300 improvement 3,775 Cash-end of period 9 2,360 Cash beginning of period 8 1,415 Cash-flow before additional Drawing 7 - - Drawings
Slide 21: Debt in Companies > 50% Owned
Debt in Cos > 50% Owned Euro 1 bn - Liquidity Bridge Facility Euro 500 mn - Out of Syndicated Facility (Euro 3 bn) Euro 400 mn - Bilateral Facilities Drawings between 30th June 2002 and 31st August 2002 Repayments between 30th June 2002 and 31st August 2002 Euro 787 mn - Commercial Paper Euro 720 mn
Slide 22: Debt Repayment Schedule
Debt Repayment Schedule 216 394 1,622 1,117 1,906 145 1,784 198 222 1,700 1,291 152 11 4 0 500 1,000 1,500 2,000 2,500 Sep-02 Oct-02 Dec-02 Feb-03 Mar-03 Apr-03 Jul-03 Oct-03 Dec-03 Jan-04 Mar-04 Aug-04 Oct-04 Amount Euro mn Bank Bond CP Nov-03 Nov-02 A B C The above graph is as of 31 August 2002 an
Slide 23: Progressive De-Leveraging Targets
Progressive De-Leveraging Targets Debt of Cos > 50% Owned Debt/EBITDA Q2 2002 17.3 Q3 2002 16.6 Q4 2002 14.1 5.3 Q1 2003 11.9 4.4 Q2 2003 11.7 4.4 Q3 2003 10 4.1 Q4 2003 9.6 4.2 Q1 2004 6.6 2.8 Q2 2004 6.6 2.7 Q3 2004 6.4 2.6 Q4 2004 6.4 2.5 Investment Grade Territory Before asset disposal increase
Slide 24: Verify Reporting Integrity
Verify Reporting Integrity Internal Review Completed Pricewaterhouse Coopers Arthur Andersen / Ernst & Young Salustro Reydel CFOs Have Committed To Accuracy of Accounts Accounting Write-offs taken last quarter reflect true value No accounting improprieties identified Financial Disclosure No irregula
Slide 25: A Firmly Engaged Disposal Plan
A Firmly Engaged Disposal Plan Our priority is to reduce the excessive level of debt Plan to dispose Euro 12 billion of assets within 18 months Euro 1.1 billion finalized Majority of non-core assets in process of being disposed Main assets in the disposal plan*: Canal+ activities outside France (Ita
Slide 26: Question and Answer Session
Question and Answer Session
Slide 27: Other Information
Other Information
Slide 28: Illustration of US / French GAAP Reconciliation of Net Income - 1st half 2002
Illustration of US / French GAAP Reconciliation of Net Income - 1st half 2002 Net Income (loss) as reported in the Consolidated Statement of Income (12.3) Goodwill impairment charge (18.0) Reversal of provision related to puts / calls 1.0 US / French GAAP book value differences (0.2) Disposal of inv
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