Vivendi Se · EURONEXT:VIV
Vivendi — Vivendi Universal — Non-Deal Roadshow (November 2004)
54 slides from Vivendi's roadshow presentation, Nov 18, 2004
Slide 1: Investor Presentation November 2004 US Roadshow
Investor Presentation November 2004 US Roadshow Jean-Bernard Levy Chief Operating Officer IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT LEGAL DISCLAIMER AT THE END OF THIS PRESENTATION
Slide 2: Vivendi Universal Today
Vivendi Universal Today Group's restructuring is now largely completed. Significant improvement in the performance of operations, due to VU's focus on managing its activities.
Slide 3: Group's Restructuring Largely Completed
Group's Restructuring Largely Completed We have achieved the various restructuring efforts of the group with the aim of: creating value for shareholders, reviving VU through a solid balance sheet and strong profitable businesses, through: a € 4 billion investment in SFR Cegetel, the creation of NBC
Slide 4: Focus on the Management of Our Activities
Focus on the Management of Our Actvities VU is now focused on the management of its activities: Canal+ Group and Universal Music Group: turnarounds are on the right track, VU Games: new team appointed to reshape the company, NBC Universal: good cooperation, SFR Cegetel and Maroc Telecom: operating r
Slide 5: A Media & Telecom Company
A Media & Telecom Company Telecom Media Mobile / Fixed line Mobile / Fixed line Networks / Cable / Film / Parks Pay-TV / Film Music Video Games Games Games 100% 92% 99% 20% * 56% 35% Fully Consolidated Fully Consolidated Fully Consolidated Equity Accounted Fully Consolidated Fully Consolidated * 20%
Slide 6: Two Major Strategic Goals Achieved in 2004
Two Major Strategic Goals Have Been Achieved in 2004 Completion of the NBC Universal transaction. Award of the Global Consolidated Profits tax system.
Slide 7: NBC Universal
NBC Universal NBC Universal Creation of NBC Universal completed on May 12, 2004: VUE valued at $14.2 billion, in line with VU's expectations NBC Universal looks excellent : Solid Post-Merger Performance Entertainment cable strength Outstanding Olympics; ratings, financials and production success TV.
Slide 8: Consolidated Global Profits Tax System
Consolidated Global Profits Tax System A change of tax regime to accelerate the use of net losses, Reinforcing the group's media and telecom businesses. Annual cash and P&L impact of approximately €500 million until the total consumption of €3.8 billion of deferred tax.
Slide 9: Strong progress in operating results in first nine months of 2004
Strong progress in operating results in the first nine months of 2004 .... ... allows the group to raise its Adjusted Net Income 2004 guidance to €1.2 billion.
Slide 10: 9 Months 2004: Operating Results Show Strong Progress
9 Months 2004: Operating Results Show Strong Progress Operating income: €2.7 billion as published; up 26% on a comparable basis.* Adjusted Net income** of €1,053 million, vs. a €192 million in the first nine months of 2003, i.e. an improvement of €861 million. Net loss of €1,082 million, vs. a €501
Slide 11: Why Is There Still a Net Loss?
Why Is There Still a Net Loss? Net loss of €1,082 million compared to a loss of €501 million at September 2003: Included in September 30, 2004 : - €2,105 million of foreign currency translation adjustment on the NBC-Universal transaction (no cash impact and no impact on shareholders' equity); - €303
Slide 12: 9 Months 2004 Revenues on a Comparable Basis
Details by business (comparable basis* at actual exchange rates): 9 Months 2004 Revenues on a Comparable Basis* Note: The % of economic interest is provided for information purposes only. The reported numbers are 100% consolidated. * As defined on slide 10. ** Vivendi Telecom International (excludin
Slide 13: 9 Months 2004 Operating Income on a Comparable Basis
Details by business (comparable basis* at actual exchange rates): 9 Months 2004 Operating Income on a Comparable Basis* Note: The % of economic interest is provided for information purposes only. The reported numbers are 100% consolidated. * As defined on slide 10. ** Vivendi Telecom International (
Slide 14: Vivendi Universal Raised its Guidance Twice for Full Year 2004
Vivendi Universal Raised its Guidance Twice for the Full Year 2004 Adjusted Net Income: above €1.2 billion Operating Income: Strong growth on a pro forma basis*, Close to 2003 actual basis, in spite of VUE's deconsolidation. Cash Flow from Operations: Growth on a pro forma basis*, Slight decline on
Slide 15: Vivendi Universal's Strategy
Vivendi Universal's Strategy Vivendi Universal's strategy is to strengthen its position among the European leaders in Media and Telecommunications: To continue organic development in our fields: Pay-TV, Music, Games and Telecommunication Our priority is to improve our activities' operating results b
Slide 16: Appendices
eee VIVENDI UNIVERSAL Appendices
Slide 17: 9 Months 2004 Earnings
————= VIVENDI UNIVERSAL 9 Months 2004 Earnings
Slide 18: Major Changes in Vivendi Universal's Scope in 2004
Major Changes in Vivendi Universal's Scope in 2004 Divestiture of 80% of Vivendi Universal Entertainment: Fully consolidated for until May 11, 2004; Equity accounted for from May 12, 2004. Investment in a 20% stake in NBC on May 11, 2004. Divestiture of Kencell (60% stake) on May 25, 2004. Divestitu
Slide 19: Consolidated 9 Months 2004 Income Statement
Consolidated 9 Months 2004 Income Statement
Slide 20: Details by business: Operating Income
Details by business (comparable basis* at actual exchange rates): In € million, French GAAP Note: The % of economic interest is provided for information purposes only. The reported numbers are 100% consolidated. * As defined on slide 10. ** Vivendi Telecom International (excluding Vivendi Telecom Hu
Slide 21: Cash flow from operations up 32% on a comparable basis
In € million, French GAAP Cash flow from operations up 32% on a comparable basis at actual exchange rates 2003 Comp. 2004 Conso. 698 1117 Proportionate 791 725 2,405 3,179 * 9 months 2003 9 months 2004 9 Months 2004 Cash Flow from Operations on a Comparable Basis * Note: The % of economic interest i
Slide 22: 9 Months Financial Net Debt Evolution
9 Months Financial Net Debt Evolution Dec. 31, 2002 Transaction NBC Universal autres cessions Acquisitions CFFO Financing expenses & Taxes Dividends paid to minorities Debt Adjustment Dec. 31, 2003 Est -6.3 -5.6 -5.6 -2.1 -2.1 -3.2 -4.8 0 -11.6 -5.3 -0.7 -0.4 -3.9 -1.1 -1.6 -0.7 -5.5 -2 Dec. 31, 200
Slide 23: First Half 2004 Financial Income Analysis
First Half 2004 Financial Income Analysis First Half 2004 First Half 2003 Financing expense (389) (531) Average interest rate on gross debt 5.05% 4.69% Average gross debt (in euro billion) 9.9 17.2 Other financial expenses, net of provisions (426) (339) out of which: Foreign exchange income (expense
Slide 24: Impact of the Consolidated Global Profits Tax System
The impact of the tax relief is taken into account in the third quarter of 2004 for the first 9 months period, applying the effective annual tax rate for the interim periods. Full Year 2004 impact (Forecast): + €482m Included in Adjusted Net Income (tax savings on the current period: full year 2004)
Slide 25: 9 Months 2004 Adjusted Net Income (non GAAP)
9 Months 2004, Adjusted Net Income (non GAAP) Nine Months ended September 30, Nine Months ended September 30, Nine Months ended September 30, Nine Months ended September 30, Nine Months ended September 30, Nine Months ended September 30, Nine Months ended September 30, French GAAP - In millions of e
Slide 26: 9 Months 2004 Adjusted Net Income Growth
9 Months 2004 Adjusted Net Income Growth The €861 million improvement of adjusted net income for the first 9 months comes from: + €385m: operating improvements: operating income improvement at UMG, Canal+, Telecoms and Holding & Corporate and Other, partly offset by VUE deconsolidation as of May 200
Slide 27: Financial Flexibility
Financial Flexibility Actions taken in 2004: Tender offer to repurchase €2.0 billion High Yield Notes out of €2.4 billion in June 2004 and cancellation of covenants, Issue of €700 million of floating-rate notes in July 2004 with a 60 basis points yield over 3-month Euribor, Reduction of the €2.7 bil
Slide 28: Nine Months 2004 Business Performance & Updated 2004 Guidance
Nine Months 2004 Business Performance & Updated 2004 Guidance
Slide 29: CANAL+ Group: Growth Drivers
CANAL+ Group: Growth Drivers Grow the subscription portfolio: Distribution of the Premium channel via all platforms: analog & digital terrestrial, satellite, cable, DSL; The Premium digital offer has been made more attractive; Target stabilization of the Premium portfolio at end-2004 vs. end-2003. R
Slide 30: Canal+ Group: 3rd quarter 2004 Performance
Canal+ Group: 3rd quarter 2004 Performance Revenues flat: Pay TV France up 1%: Premium channel portfolio up for 4 consecutive months (June to Sept.) compared to last year; Good performance of CanalSatellite. StudioCanal down 7%: Timing difference in movie releases in 2004 compared to 2003. Operating
Slide 31: CANAL+ Group: 2004 Guidance
CANAL+ Group: 2004 Guidance Revenue: Between €3.45 billion and €3.55 billion EBITDA margin: Approximately 10% Operating income: Above €150 million Cash flow from operations: Above €200 million, excluding real estate divestitures
Slide 32: Universal Music Group: Growth Drivers
Universal Music Group: Growth Drivers Rebound of the US & UK music markets: September YTD US retail unit market up 5.8% per SoundScan*. Q3 2004 YTD UK retail unit market up 2.1% per the CIN. September YTD worldwide market decline slowing per UMG estimates. Digitized music: Anti piracy: IFPI launched
Slide 33: Music: 3rd quarter 2004 Performance
Music: 3rd quarter 2004 Performance Revenues up 8% at constant currency: Strong sales growth in North America and U.K.. US SoundScan album unit * market share increased to 31%. Digital music: 2% of total revenues. Major sellers in the 3rd quarter: Ashlee Simpson, Young Buck and Jo Jo, Now 16, Nelly,
Slide 34: Universal Music Group: 2004 Guidance
Universal Music Group: 2004 Guidance Revenue: Decline slightly EBITDA margin: Above 11% Operating income margin: Above 5% Cash flow from operations: Below 2003 levels (largely due to working capital and restructuring charges)
Slide 35: Vivendi Universal Games: Growth Drivers
Vivendi Universal Games: Growth Drivers Games industry expected to grow 11% yearly average over next 5 years* Expand into the Online Massive Multi-Player (OLMMP) space Online market expected to grow approximately 37% CAGR from 2003 to 2008. World of WarCraft: aiming for November 2004 launch in the U
Slide 36: Vivendi Universal Games: 9 Months 2004 Performance
Vivendi Universal Games: 9 Months 2004 Performance Revenue down 14% at constant currency Best Sellers: Crash Twinsanity, continuation of Simpsons:Hit and Run, Riddick, Crash Nitro Kart and Spyro IV. Compared to Q3 2003's stronger release schedule including: Simpsons: Hit and Run and Warcraft III Exp
Slide 37: Vivendi Universal Games: 2004 Guidance
Vivendi Universal Games: 2004 Guidance Transition year focused on stabilizing the operations and enhancing the portfolio Revenue: Decline, due to transition year Operating income: No major improvement with prior year (restructuring charges and one-time items) Cash flow from operations: Substantial i
Slide 38: NBC Universal
NBC Universal NBC Universal Creation of NBC Universal completed on May 12, 2004: NBC Universal looks excellent : Solid Post-Merger Performance Entertainment cable strength Outstanding Olympics; ratings, financials and production success TV...the most profitable network & station group despite prime
Slide 39: SFR Cegetel: Growth Drivers
SFR Cegetel: Growth Drivers SFR Cegetel: Growth Drivers Mobile - SFR Grow customer base Penetration in France (71% in September 2004) is approximately 15% below European average. Young & senior segments, and multiple equipment are the main levers for future growth. Increase voice usage Voice traffic
Slide 40: SFR Cegetel: 9 Months 2004 Performance
SFR Cegetel: 9 Months 2004 Performance ** On a comparable basis Revenue up 10%: SFR, up 11% to €1.9bn: Higher customer base with a favorable customer mix (60.4% postpaid) Annual rolling ARPU up 2% at €437; Data ARPU up 35% 1.44 million Vodafone Live customers. Cegetel up 5% to €282 million: Higher d
Slide 41: SFR Cegetel: 2004 Guidance
SFR Cegetel: 2004 Guidance SFR Cegetel: 2004 Guidance Revenue: More than 7% growth, on a comparable basis (€7,734 million in 2003) Operating income: More than 13% growth, on a comparable basis (€1,966 million in 2003) Cash flow from operations: About 7% growth, on a comparable basis (€2,151 million
Slide 42: Maroc Telecom: Growth Drivers
Maroc Telecom: Growth Drivers Maroc Telecom: Growth Drivers Healthy economy (2005 GDP growth expected to be +3%-4%) and favorable demographics (+1.6% per annum) Increased international traffic (ex.: visitors to Morocco +19% by end-July 2004 over 2003) Mobile Grow customer base: 26% penetration on to
Slide 43: Maroc Telecom: 3rd Quarter 2004 Performance
Maroc Telecom: 3rd Quarter 2004 Performance Maroc Telecom: 3rd Quarter 2004 Performance Revenues up 12% : Mobile up 19%: Consolidation of Mauritel as of July 1st 2004; Customer base up 9%; Maroc Telecom prepaid ARPU up 1% YTD at 97MAD. Fixed activities down 2%, +4% before leased lines tariff reducti
Slide 44: Maroc Telecom: 2004 Guidance
Maroc Telecom: 2004 Guidance Maroc Telecom: 2004 Guidance Revenue: High single digit growth in constant currency Operating income: High single digit growth in constant currency Cash flow from operations: Approximately flat
Slide 45: The Group Raises its 2004 Guidance
The Group Raises its 2004 Guidance Pro forma: - Excludes VUE, Telepiu and VUP assets sold in 2003 - Excludes dividends received from NBC Universal (2) Includes VUE consolidated cash flow (in 2003 and 2004) and NBC Universal dividends (in 2004) Vivendi Universal raises its adjusted net income guidanc
Slide 46: Consolidated Global Profits Tax System
Consolidated Global Profits Tax System General mechanism Implemented in 1965 by the French Tax Administration; several CAC40 groups already benefit from this tax scheme. Allows consolidation of taxable results of all companies owned at least 50% pro rata the economic interest. In case of a global lo
Slide 47: Net Available Cash Flow
Net Available Cash Flow In € million - French GAAP 9 Months 2004 Actual 9 Months 2003 Actual Cash Flow from Operations excluding VUE 3,148 2,431 VUE's Cash Flow from Operations (Jan. 1 - May 11, 2004) 406 896 Dividend received from NBC Universal 302 - Consolidated Cash Flow from Operations 3,856 3,3
Slide 48: Impact of NBC Universal Closing on P&L and Shareholders' Equity
* Foreign currency translation adjustment is calculated based on an exchange rate of 1euro = US$ 1,1877 Impact of NBC Universal Closing on the P&L and Shareholders' Equity Impact on VU's P&L In US$ billion Pre-tax profit 0.7 Tax (essentially all non-cash) (0.3) After-tax profit 0.4 In € billion Afte
Slide 49: Impact of NBCU Closing on Net Debt
Impact of NBCU Closing on Net Debt * Does not include the payment of $275m for Barry Diller's 1.5% in VUE ** Reclassified into other long-term liability
Slide 50: Divestitures
80% of Vivendi Universal Entertainment 5309 SportFive 274 Kencell 190 Monaco Telecom 169 Atica & Scipione At Other divestitures -66 Viva Media 47 Canal Nethertands 7 Canal+ headquarter building 410 Other divestitures 3 UCI and affiliates 158 VIVENDI Investor Presentation — Novernber 2004 50
Slide 51: Debt Structure at End-September 2004
Debt Structure at End-September 2004 In € million End Dec. 2003 End Sept. 2004 Secured debt Bank facilities VUE $920 million loan Securitization Promissory note to NBCU (related to Pref. A) Capital Leases Others 3,725 1,992 739 602 - - 196 196 1,567 - - - - 472 637 458 * - - Unsecured subsidiary deb
Slide 52: Percentage of Ownership of Main Subsidiaries
Percentage of Ownership of Main Subsidiaries Capital intensity in % 31/12/01 31/12/02 31/12/03 30/06/04 Canal+ Group 100% 100% 100% 100% Universal Music Group 92% 92% 92% 92% Vivendi Universal Games 99% 99% 99% 99% Universal Studios Group 92% - - - InterActiveCorp, Inc. 40% - - - Vivendi Universal E
Slide 53: IR Team
IR Team Eileen McLaughlin IR Director eileen.mclaughlin@groupvu.com Laurence Daniel IR Director laurence.daniel@groupvu.com Edouard Lassalle Associate Director edouard.lassalle@groupvu.com Daniel SCOLAN Executive Vice President Investor Relations +33.1.71.71.12.33 daniel.scolan@groupvu.com For any f
Slide 54: Forward-looking statements 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. Actual results may differ materially from the forward-looking statements as a result of a
Vivendi Universal — Non-Deal Roadshow (November 2004) on 6ix