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Vivendi — Vivendi Universal — Investor Presentation (November 2003)
45 slides from Vivendi's investor presentation, Nov 20, 2003
Slide 1: Investor Presentation November 19, 2003
Investor Presentation November 19, 2003
Slide 2: Disclaimer
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
Slide 3: Vivendi Universal's Equity Story: A Media & Telecom Company
Vivendi Universal's Equity Story: A Media & Telecom Company
Slide 4: Vivendi Universal in July 2002: A Mixed Array of Assets
Vivendi Universal in July 2002: A Mixed Array of Assets* Approximately 6,000 consolidated companies and shareholdings with &128;35bn debt, significant losses and negative cashflow * Incomplete list of companies; provided solely for illustration purposes US publishing Reference works Consumer press,
Slide 5: Our Achievements Since July 2002
Our Achievements Since July 2002 Introduced new rules of Corporate Governance Disposed of non-core or unmanageable assets Ended or limited cash drains (Internet, Canal+ Group, Int'l telecoms, Others) and reduced overhead Strongly reduced and restructured debt Strengthened control and management of b
Slide 6: 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 Growth & Value creation businesses Turn-around businesses
Slide 7: Media Businesses Characteristics
Media Businesses Characteristics Partnership with GE Prime content on high quality platforms Highest operating margins in US TV & media sector Negotiated liquidity options Complementary assets with strong synergies Management with strong media expertise French Pay-TV & movie production ~8m subscript
Slide 8: Telecom Businesses Characteristics
Telecom Businesses Characteristics Opportunistic French market (3 players) # 2 mobile operator with ~35% market share Vodafone Group cost and revenue benefits New data services take off Very strong profitability and dividends Very strong cash flow Wireline: DSL perspectives Growing market # 1 mobile
Slide 9: 2004 Group Action Plan
> 2004 Group Action Plan
Slide 10: 2004 Group Action Plan
2004 Group Action Plan Drive the performance of the Media and Telecom assets Restructure the Media / Entertainment assets UMG: implement successful new business model and cost-cutting plans CANAL+ Group: pursue the on-going turn-around plan VUG: launch a significant turn-around plan Yield significan
Slide 11: Other 2004 Objectives
Other 2004 Objectives Finalize approximately &128; 4bn of remaining disposals (including Veolia shares) plus $ 2bn of IACI shares Endeavor to resolve S.E.C. and C.O.B. investigations, Class Actions lawsuits and other pending litigations Optimize the value created by the tax losses carry forward
Slide 12: Asset Disposals to Finalize
Asset Diposals to Finalize ~ &128; 4 billion of asset disposals: 20.4% of Veolia Environnement: up to &128; 2.2 billion Remaining dispersed non-core assets: up to &128; 2 billion (including Elektrim, Kenya Telecom, Monaco Telecom, Canal+ Poland, Canal+ Benelux, SportFive, NC Numericable and approx.
Slide 13: Endeavor To Resolve Pending Litigations
Endeavor To Resolve Pending Litigations C.O.B. investigation: Formal Report and Notice of Grievance were notified. VU has three months from Oct. 31, 2003 to review, analyse and respond to the C.O.B. and can defend itself through due process rights S.E.C. investigation: Continue to cooperate with the
Slide 14: Tax Situation
Tax Situation &128; 8.3bn deferred tax assets on tax losses at June 30, 2003: &128; 11bn operating losses at a 35% tax rate &128; 20bn capital losses at a 20% tax rate &128; 0.45bn value incurred from other losses, mainly in the U.S. VU intends to manage these tax assets in order to draw value from
Slide 15: Vivendi Universal at End of 2004
Vivendi Universal at End of 2004 A Media and Telecom company managed, profitable and with low debt Media and Telecom operating businesses either on growth or in turn-around progress Benefit from ~20% of NBC-Universal Net debt below &128;5 billion Investment grade profile A profitable company: Genera
Slide 16: Conclusion
Conclusion VIVENDI UNIVERSAL 16
Slide 17: Why Invest in VU? (1/2)
Why Invest in VU? (1/2) Focused on two dynamic markets: Media & Telecom Towards a much simpler and more transparent business structure Exclusive access to world class unlisted assets Media / Entertainment: recovery & value creation NBC-Universal: Strong value creation expected Canal+ Group: Quick an
Slide 18: Why Invest in VU? (2/2)
Why Invest in VU? (2/2) Management team credibility Delivered on its promises to VU shareholders Strong track-record in turning companies around Committed to profitability, cash flow and value creation Substantial deferred tax assets of ~ &128;8 billion Company on track to be profitable and de-lever
Slide 19: Appendices
> Appendices
Slide 20: Financial Overview
Financial Overview VIVENDI UNIVERSAL 20
Slide 21: Revenues Overview
Media / Entertainement: &128; 15bn 58% Non-Core: &128; 1,7bn 7% Telecoms &128; 9bn 35% Breakdown of 2003 Estimated Revenues: &128; 25.7bn (on a consolidated basis*) Revenues Overview *Cegetel 100% consolidated, 56% economic interest and Maroc Telecom 100% consolidated, 35% economic interest
Slide 22: Financial Growth Estimates
2001PF 2002PF 2003E Revenue 27.73 28.73 25.6 2001PF 2002PF 2003E Op. Income 2.1 2.038 3.149 2001PF 2002PF 2003E CF from Ops. 1.224 2.629 3.302 2001PF 2002PF 2003E % CF from Ops. 0.01 0.731 1.7 (In Euro) 27.7bn 28.7bn Revenue: reduction of perimeter Operating Income Cash Flow from Operations Proporti
Slide 23: FY 2003 Group Guidance
FY 2003 Group Guidance The Pro Forma information illustrates the effect of the acquisition of the acquisition of the entertainment asets of InterActiveCorp. in May 2002 and the disposition of Vivendi Universal Publishing assets sold in 2002 and 2003, as if these transactions had occured at the begin
Slide 24: Half Year 2003 Achievements
Half Year 2003 Achievements Operating income: up 20%* to &128; 1.68bn Adjusted net income (1) almost at break-even Net loss at &128; 0.6bn vs. &128; 12.3bn for the first half 2002 Consolidated cash flow from operations: up 24%* to &128; 2.2bn Proportional cash flow from operations: up 83%* to &128;
Slide 25: Liquidity & Financial Flexibility
Liquidity & Financial Flexibility Financing and Refinancing operations &128; 7.5 billion of debt refinanced through 6 transactions over 12 months Average maturity of debt extended from 4.4 to 6.0 years Better balance between public debt and bank debt Removal of significant contingent liabilities Eli
Slide 26: Overview of Net Debt Position
Overview of Net Debt Position June 30, 2002 Dec. 31, 2002 June 30, 2003 Dec. 31, 2003 June 30, 2004 Dec. 31, 2004 Est 18.8 12.3 7.4 2.8 Ouest 16.1 4 6.3 2.2 Veolia Environnement net debt 34.9 18.8 Net Debt Expected Evolution (in Euro billions) 16.3 12.3 13.7 5.0 Pro Forma for the acquisition of 26%
Slide 27: Description of Businesses & Strategic Positioning
Description of Businesses & Strategic Positioning
Slide 28: SFR / Cegetel Growth Drivers
SFR / Cegetel Growth Drivers Regulatory / Environment Benchmark vs. Competition Long-Term Partnership New financial structure of SFR-Cegetel *** Full benefit of synergies with Vodafone Purchasing power Development of new products and services International Global Accounts' management Mobile 2nd larg
Slide 29: SFR / Cegetel Value Creation Factors
SFR / Cegetel Value Creation Factors Unique attractiveness of the French mobile market: Lowest penetrated European mobile market: 66% at end-September 2003 3-player market structure Very strong proportion of post-paid subscribers Very strong fundamental performances at SFR: # 2 French mobile operato
Slide 30: Maroc Telecom Growth Drivers
Maroc Telecom Growth Drivers Regulatory / Environment Benchmark vs. Competition Long-Term Partnership Mobile Very low penetrated market (~22%)* Contract subscribers only represent ~5% Target business customers for prepaid services Wireline Monopoly situation: lines expected to be stable Introduction
Slide 31: Maroc Telecom Value Creation Factors
Maroc Telecom Value Creation Factors Unique positioning in fast-growing Moroccan market ~ +8% per annum Strong growth potential in post-paid mobile market Strong growth potential in new value-added services Benefits from synergies with SFR-Cegetel Strict cost-control positively impacts operating mar
Slide 32: Universal Music Group Growth Drivers
UMG Independents Sony Warner BMG EMI Est 25.9 25 14 11.9 11.1 12 Long-Term Partnership Universal Music Group Growth Drivers Regulatory Environment Benchmark vs. Competition With the artists ... Very large catalog .... with retailers and online distributors ... New business models .... with managemen
Slide 33: UMG Value Creation Factors
UMG Value Creation Factors Long-term partnership with artists Active development of new business models New pricing policy implemented in North America Online distribution agreements with various 3rd party platforms Pro-active promotion of all new technological formats Multi-approach action plan aga
Slide 34: NBC Universal Growth Drivers
NBC Universal Growth Drivers Regulatory / Environment Benchmark vs. Competition Long-Term Partnership Development of joint opportunities through a strategic committee 3 seats / 15 on NBC-Universal's Board Commercial agreements with VU's businesses Networks & Stations - Broadcast Licenses, competitio
Slide 35: NBC Universal Value Creation Factors
One of the world's most profitable & fastest-growing media companies Broad reach and compelling brands: strong promotion platforms for content businesses Strong pick-up expected in US advertising in 2004 (Olympics, Elections) Well positioned to benefit from new distribution technology Complementary
Slide 36: Canal+ Group Growth Drivers
Canal+ Group Growth Drivers Regulatory / Environment Benchmark vs. Competition Long-Term Partnership Co-shareholders in CanalSatellite, MultiThematiques and Lagardere Thematiques Operational / financial partnership Canal+ Premium Growth in subscriber recruitments Quality of exclusive programming Suc
Slide 37: Canal+ Group Value Creation Factors
Canal+ Group Value Creation Factors Low penetration of Pay-TV in France: strong potential for growth Strict turn-around and cost-saving plan: Approx. &128; 200 million in recurrent annual cost savings Renegotiation and better allocation of programming costs Overhead costs savings, headcount reductio
Slide 38: Vivendi Universal Games Growth Drivers
Vivendi Universal Games Growth Drivers Regulatory Environment Benchmark vs. Competition Long-Term Partnership Strategic partnerships with publishers Distribution of 3rd party releases Development of licensed properties Co-development of games With NBC-Universal Self-regulatory ratings systems VUG ad
Slide 39: VUG Value Creation Factors
VUG Value Creation Factors Strong popular franchises Large development synergies with VU's media content Development of online game Growing consumption trend Profitable business model Helps fight piracy New technology cycle expected in a near future Potential selective growth opportunities Long-term
Slide 40: NBC-Universal: Transaction Details
NBC-Universal: Transaction Details
Slide 41: Transaction Overview (1/2)
Transaction Overview (1/2) Transaction Structure Consideration Retained Assets & Liabilities Total Value Delivered Vivendi and GE to form NBC-Universal by contributing VUE and NBC respectively Initial ownership 29.55% VU / 70.45% GE At closing, GE will deliver $3.8 billion of cash to the VUE shareho
Slide 42: Transaction Overview (2/2)
Transaction Overview (2/2) Synergies Exit Provisions Revenue Synergies of $ 100 million Pre-eminent promotion engine Content drives new platforms Ad sales opportunity Combined TV production Cost savings of $ 350 million Advertising and promotion Sourcing Program development Overlapping structures Co
Slide 43: NBC Universal - The New Company
Networks & Stations Motion Pictures Production & Syndication Cable Networks Theme Parks East 44 31 8 13 4 NBC Universal - The New Company Company Overview 2003E Pro Forma Revenues $13bn 2003 Pro forma Projections Revenues - ~$13bn EBITDA - ~$3bn Operating Margins - ~ 20% Debt - $1.7bn NBC Universal
Slide 44: Next Steps
Next Steps Regulatory review Anti Trust Review US European Commission and Other FCC review Opportunities to hold discussions with InterActive Corporation (IACI) Potential for incremental benefits to all parties through a restructuring of IACI's investments in VUE Not a serious condition precedent to
Slide 45: IR Team
IR Team Eileen McLaughlin IR Director eileen.mclaughlin@groupvu.com Laurence Daniel IR Director laurence.daniel@groupvu.com Alexandra Fichelson Associate Director alexandra.fichelson@groupvu.com Edouard Lassalle Associate Director edouard.lassalle@groupvu.com Daniel SCOLAN Executive Vice President I
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