Vivendi Se · EURONEXT:VIV
Vivendi — SFR — Non-Deal Roadshow (January 2006)
38 slides from Vivendi's roadshow presentation, January 2006
Slide 1: Introduction to SFR
Introduction to SFR January 2006 Frank Esser - Chairman and CEO - Member of Vivendi Universal Management Board Pierre Trotot - Senior Executive Vice President - Finance & Administration IMPORTANT NOTICE: INVESTORS ARE STRONGLY ADVISED TO READ THE IMPORTANT LEGAL DISCLAIMER AT THE END OF THIS PRESENT
Slide 2: FY 2005 update
FY 2005 update Mobile centric strategy after neuf cegetel merger Best year ever for SFR in terms of customer additions Successful 3G strategy: capacity, speed and new services • 60% coverage at end-2005 • 1M customers at end-2005 • Focus on voice usage, music and video calls • Best handset ran
Slide 3: Agenda
Agenda Executive summary Group overview Business and Strategy z Mobile : SFR z Fixed telephony : neuf Cegetel merger Financial performance 2
Slide 4: Executive summary
Executive summary SFR : N.2 operator with strong momentum in a growing French mobile telecommunications market A growing French mobile market A focused strategy A strong commercial momentum A winning partnership with the world-wide leader Vodafone Two strong and committed shareholders A
Slide 5: Agenda
Agenda Executive summary Group overview Business and Strategy z Mobile : SFR z Fixed telephony: neuf Cegetel merger Financial performance 4
Slide 6: SFR group structure
SFR group structure Before neuf cegetel merger: After neuf Cegetel closing : (22nd August 2005) 56% 44% 56% 44% 65% 35% 28% Governance : 10 SFR board members of which 6 VU and 4 Vodafone Other (1) 44% 28% investors (1) CSFB, Suez, Artemis, Belgacom,Telecom Italia, Phoenix, Goldman Sachs, Fonds Alpha
Slide 7: SFR: a profitable growth model
SFR : a profitable growth model Reported French Gaap Mobile revenues evolution Mobile Ebitda and Ebitda margin evolution 2001/2004 2001/2004 7 183 M€ 6 748 M€ 6 162 M€ 5 606 M€ 2 727 M€ 3 084 M€ 2 341 M€ 1 769 M€ 40% 43% 38% 32% 2001 2002 2003 2004 2001 2002 2003 2004 EBITDA EBITDA margin 4 years of
Slide 8: SFR key strengths
SFR key strengths Number 2 French mobile operator with 35.8% market share at end September 2005 (Orange: 47.0%, ByT: 17.0%)* €6.5 bn in mobile revenues at end Sept-05 (+20% vs. LY, + 8% on a comparative basis) Leader in net adds for the first nine months of 2005 (42.9% market share) 16.5 M c
Slide 9: YTD Sept-05 performance: SFR revenues up 8% to 6,475 M€
YTD Sept-05 performance: SFR revenues up 8% to 6,475 M€ Revenues EFO IFRS +20% +8% +10% 6 475 M€ 2 032 M€ 6 019 M€ 5 801 M€ 1 844 M€ 5 377 M€ Sept-04 Sept-05 Sept-04 Sept-05 Mobile termination Excl. mobile termination 8
Slide 10: Agenda
Agenda Executive summary Group overview Business and Strategy z Mobile : SFR z Fixed telephony : neuf Cegetel merger Financial performance 9
Slide 11: Mobile activities: significant growth levers
Mobile activities: significant growth levers 3 main drivers for SFR revenue growth Grow customer base • Lower penetration in France than in other EU countries • Mobile Virtual Network Operator (MVNO) strategy Increase voice usage • UMTS strategy : increased voice capacity at lower cost... • …wil
Slide 12: Grow customer base: still room for customer growth
Grow customer base: still room for customer growth Penetration rate in major European countries Expected penetration per segment Dec-2004 2004-2008 Average = 94% 111% 106% 105% 103% 97% 87% 74% +20pts +20 pts 65% 60% 45% 40% 2004 Sweden Italy Portugal UK Spain Germany France 2008 10-14 year-old > 60
Slide 13: Grow customer base: MVNO strategy
Grow customer base: MVNO strategy SFR welcomes new players creating value for the market and bringing diversity and complementarity to existing offers: • 6 VNO agreements signed to date targeting different customer segments: Debitel in June-04, Futur Telecom and NRJ in February-05, neuf Telecom an
Slide 14: Grow customer base: leader in net adds for first nine months of 2005
Grow customer base: SFR, leader in net adds for the first nine months of 2005 + 9% 16 455 000 customers 15 139 excl. VNOs 14 189 63,1% 56,9% 60,4% Contract Prepaid 43,1% 39,6% 36,9% Source: Arcep Sept-03 Sept-04 Sept-05 • Focusing on top line growth, SFR is leader in net adds for the first nine mont
Slide 15: Increase voice usage: UMTS strategy
Increase voice usage : UMTS strategy First operator to launch UMTS services in France in Nov. 2004 Nation-wide coverage: 60% of population coverage at end-05, 70% at end 2006 Fixed Mobile substitution for Voice: additional capacity and more efficiency to develop voice usage at lower cost Hig
Slide 16: Increase voice usage: Fixed Mobile substitution
Increase voice usage: Fixed Mobile substitution Average Usage per User (AUPU) 285 mns +8% 263 mns AUPU = 12 month rolling 250 mns +5% total mns (in+out) per average customer (excl. Roaming in) per month Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 June-05 Sept-05 SFR , first operator for “mobi
Slide 17: Increase voice usage: ARPU still growing
Increase voice usage: ARPU still growing In € per year - 12 month rolling excluding mobile termination Contract ARPU Blended ARPU Prepaid ARPU -3% +1% 608€ 587€ +5% 430€ 433€ 178€ 186€ Sept-04 Sept-05 Sept-04 Sept-05 Sept-04 Sept-05 Slight increase of blended ARPU despite lower ARPU from new custo
Slide 18: Develop non-voice revenues: leadership in text messaging (SMS)
Develop non-voice revenues: leadership in text messaging (SMS) SMS sent by SFR customers 28 Average number of SMS / client / month Net data ARPU evolution* 26 + 22% 24 22 20 * 12 month net rolling 58€ data ARPU per 47€ 18 average customer Source: Arcep SFR Orange ByT 16 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05
Slide 19: Develop non-voice revenues: partnership with Vodafone
Develop non-voice revenues: a successful partnership with Vodafone, the N°1 operator world-wide Vodafone Live! is the leading mobile portal in Europe z Available in 22 countries with more than 31 million controlled customers at the end of June 2005 z Broadest footprint for 2G/3G services in Europe
Slide 20: Develop non-voice revenues: existing and future services
Develop non-voice revenues: existing and future services Messages Visio Music News Video & TV Games Corporate Services Payment Internet Access 19
Slide 21: Develop non-voice revenues: mobile music at heart of 3G strategy
Develop non-voice revenues: mobile music at the heart of SFR 3G strategy First operator in France to launch Full Track Music Download service with 500k songs available Strategic agreements signed with all Majors SFR is in the top 5 legal music download sites in France with 340k Full Track down
Slide 22: Develop non-voice revenues: TV and video
Develop non-voice revenues: : TV and video SFR objective : increase usage and build a sustainable business model • 51 live TV channels available to date • Since June 29, 20 channels of CanalSat “bouquet” are available for 7€/month (20,000 customers at end Dec-05) • Video on Demand: SFR offers « star
Slide 23: SFR mission: to grow revenue and strictly control costs
SFR mission : to grow revenue and strictly control costs Acquisition and retention costs as % of Contract churn rate evolution network revenues (excl. mobile termination) 10.9% 11.2% 30% 25% 25% 21% 4,5% 5,2% 20% 13% 15% 13% 10% 6,4% 6,0% 5% 0% Sept- 04 Sept- 05 1 2 3 4 2001 2002 2003 2004 Acquisiti
Slide 24: Strong focus on operational efficiency
Strong focus on operational efficiency EBIT evolution Evolution H1-03 / H1-2005 French Gaap M€ 41,8% 42,9% Base 100 = H1 03 4000 32,5% 30,5% 125 Productivity 3 084 120 gains 3000 2 728 751 115 734 2000 110 105 2333 1000 1993 100 95 0 H1 03 H2 03 H1 04 H2 04 H1 05 2003 pf 2004 pf Cust. Base EBITDA pr
Slide 25: Your favorite numbers now unlimited
« Your 3 favorite numbers now unlimited » 24
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Slide 27: Agenda
Agenda Executive summary Group overview Business and Strategy z Mobile : SFR z Fixed telephony : neuf Cegetel merger Financial performance 26
Slide 28: neuf Cegetel merger: an ambitious plan
neuf Cegetel merger: an ambitious plan Closed on 22nd August of 2005 Mandatory in competitive context Unwavering focus on growth, innovation and quality of service Significant synergies The future reference for fixed-line telecommunications in France 27
Slide 29: Two founding shareholders to remain and support development of new Group
Two founding shareholders to remain and support development of new Group Current structure of the two entities Future structure of the new Group 39% 65% 28% 28% Other* 61% 35% Other* 44% 100% Cegetel investors investors Fibre Fibre Optique Optique Défense Défense Note: * including Suez, Crédit Suiss
Slide 30: The future reference for fixed-line telecommunications in France
The future reference for fixed-line telecommunications in France Basis: 2004 Sales Selected targeted All Segments Specialized Full-service Types of products and services offered Total market (including wholesale) Figurative representation: operators’ relative size not to scale 29
Slide 31: Long-term project with aggressive goals for the next two years
Long-term project with aggressive goals for the next two years Mid-2007: objectives for the new neuf Cegetel Group N°1 alternative provider in the consumer market, with over 4 million customers, including 2 million ADSL customers N°1 alternative provider in the corporate market, with more than 2
Slide 32: Revenue growth and adequate cost structure shall finance future development
Revenue growth and adequate cost structure shall finance future development €160M /year synergies identified by 2007 and €100 M Capex in 3 years would improve group’s financial position Key performance 2004 2004 actual actual neuf neuf telecom telecom ++ neuf neuf Cegetel Cegetel 33 year year indica
Slide 33: Agenda
Agenda Executive summary Group overview Business and Strategy z Mobile : SFR z Fixed telephony : neuf Cegetel merger Financial performance 32
Slide 34: Simplified P&L statement – SFR Cegetel Group
Simplified P&L statement – SFR Cegetel Group Reported French Gaap 2005 Guidance in millions of euros 2003 A 2003 pf* 2004 04 vs 03 pf Turnover 7 574 7 537 8 317 +10% +3% to +5% o.w. mobile 6 748 6 528 7 183 +10% (excl. mobile termination) EBITDA 2 741 2 912 3 185 +9% o.w. mobile 2 727 2 727 3 084 +1
Slide 35: Simplified Cash Flow statement – SFR Cegetel Group
Simplified Cash Flow statement – SFR Cegetel Group Reported French Gaap in millions of euros 2003 A 2003 pf* 2004 04 vs 03 pf 2005 Guidance EBITDA 2 741 2 912 3 185 +9% o.w. mobile 2 727 2 727 3 084 +13% CAPEX 868 962 1 034 +7% o.w. mobile 798 798 876 +10% +12% Change in working cap. 180 203 90 -56%
Slide 36: Main impacts of IFRS transition – SFR Cegetel Group
Main impacts of IFRS transition – SFR Cegetel Group in millions of euros 2004 Reported Pro forma Limited impact on revenues French Gaap IFRS EBITDA and current operating income Turnover * 8 317 8 219 almost unchanged o.w. mobile 7 183 7 085 EBITDA 3 185 3 193 Positive impact on net income : +1
Slide 37: Vivendi Universal IR Team
Vivendi Universal IR Team Daniel SCOLAN Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@groupvu.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
Slide 38: Important Legal Disclaimer
Important Legal Disclaimer SFR Cegetel Group is a subsidiary of Vivendi Universal, listed on the NYSE and on Euronext Paris SA and this presentation contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements