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Vivendi — Investor Presentation (May 2007)
42 slides from Vivendi's investor presentation, May 2007
Slide 1: Investor Presentation May 2007
Investor Presentation May 2007
Slide 2: Our assets
Our assets 100% 100% / 65% 56% #1 in pay-TV in # 2 among mobile operators #1 Worldwide in music France and Poland #1 in 3G services in France 40.5% of neuf cegetel 51% 100% 20% # 1 in fixed-line, mobile and internet World leader in in Morocco # 1 Worldwide in online entertainment gaming We innovate
Slide 3: The business units' complementary nature
The business units’ complementary nature Staying ahead to better serve consumers: Anticipating and mastering new technologies Creating content, discovering and managing talent, developing and acquiring IP Understanding the market Innovating and reacting Our businesses work together on numerous new p
Slide 4: The advantages of size
The advantages of size Ability to initiate large-scale internal investments (for example: French League 1 football, video games, etc.) A wealth of experience in having a global presence and a motivated team Risk management The ability to seize opportunities 4
Slide 5: Our strategy
Our strategy To strengthen our position in entertainment: music, television, cinema, mobile, internet and games To capitalize on consumer demand for mobility and broadband To take advantage of the global transition to digital media to launch innovative services To enhance our economic model focusing
Slide 6: Our capital allocation strategy
Our capital allocation strategy To provide the business units with superior resources, than they could have on a stand alone basis, to facilitate: Investments in organic growth Investments in external growth on a selective and rigorous basis Impact on earnings per share Cash generation Return on cap
Slide 7: Our achievements in 2006
Our achievements in 2006 Economic performance higher than the forecasts Tangible progress in all the business units €6 billion invested to drive growth Two structural acquisitions: Canal+/TPS and BMG Music Publishing Name change, new corporate identity and advertising campaign 7
Slide 8: 2006 Results
2006 Results Adjusted net income: €2.6bn, up 17.9% EBITA: €4.4bn, up 9.6% on a comparable basis Cash Flow From Operations: €4.5bn, up 7.4% Dividend: €1.20 per share, up 20% with a distribution rate of 53% of the Adjusted net income per share of €2.27 8
Slide 9: Continuous improvement in the Group's performance
Continuous improvement in the Group’s performance In euro millions - IFRS 2006 2005 2004 Revenues 20,044 19,484 17,883 EBITA 4,370 3,985 3,504 EBITA margin (EBITA / Revenues) 21.8% 20.5% 19.6% Adjusted net income 2,614 2,218 1,498 ANI / Revenues 13.0% 11.4% 8.4% Cash Flow From Operations before cape
Slide 10: 2006 Revenues
2006 Revenues 4,955 UMG +1.3% 4,893 3,593 Consolidated Canal+ Group +7.7% revenues 2006 3,336 As published: €20,044m SFR 8,678 -0.2% 8,693 On a comparable basis: €20,007m +3.3% compared to 2005 2,053 Maroc Telecom +10.4% 1,860 Vivendi Games 804 +25.4% 641 FY 2006 on a comparable basis FY 2005 on a c
Slide 11: 2006 EBITA
2006 EBITA UMG 744 +9.3% 681 EBITA 2006 74 251 -64.1% Up 21.8% to €251m before the Canal + Canal+ Group Group and TPS combination costs of €177m As published: 206 €4,370m On a comparable basis: 2,583 +6.6% €4,369m SFR +9.6% compared to 2005 2,422 +14.0% before the Canal+ Group Maroc Telecom 912 +16.
Slide 12: Since the beginning of 2006, we have invested more than €6 billion
Since the beginning of 2006, we have invested more than €6 billion to drive growth We have maintained a high level of capex in our business units: more than €1.6 billion UMG : Acquisition of BMG Music Publishing(2) Canal+ : Acquisition of TPS SFR : Increased investment in NeufCegetel, acquisition of
Slide 13: Very good results for the first quarter 2007
Very good results for the first quarter 2007 In euro millions Q1 2007 Growth IFRS standards - unaudited Revenues 5,020 +5.3% EBITA 1,274 +21.7% Adjusted net income (ANI) 771 +22.8% 13
Slide 14: First quarter 2007 and recent main events
First quarter 2007 and recent main events Successful launch of World of Warcraft: The Burning Crusade, Blizzard Entertainment’s first expansion pack Canal+ / TPS merger finalized on January 4, 2007 TPS is included in the results of Canal+ Group Launch of the new CanalSat offer Acquisition by Maroc T
Slide 15: First quarter 2007 revenues
First quarter 2007 revenues Revenues: €5,020m UMG 1,027 -8.7% -4.2% at constant currency +5.3% compared to 2006 1,125 +7.0% at constant currency Canal+* 1,067 +18.7% Group 899 2,096 SFR -1.8% 2,135 1st quarter 2007 Maroc Telecom** 550 +13.9% 1st quarter 2006 483 +16.1% at constant currency rate In e
Slide 16: First quarter 2007 EBITA
First quarter 2007 EBITA EBITA: €1,274m 57 -59.6% UMG 141 -55.8% at constant currency +21.7% compared to 2006 +23.4% at constant currency Canal+ 164 X 5 Group* 33 SFR 643 -3.5% 666 256 +20.2% Maroc Telecom** 213 +22.6% at constant currency rate 1st quarter 2007 107 X 4.7 1st quarter 2006 Vivendi Gam
Slide 17: First Quarter 2007
First Quarter 2007 The strong increase in results reflects the good performance of our businesses: Excellent performance of Vivendi Games and the success of the World of Warcraft: The Burning Crusade expansion pack Continuous growth at Maroc Telecom Initial benefits from the Canal+ / TPS merger But
Slide 18: Vivendi confirms its growth prospects
Vivendi confirms its growth prospects 2007 outlook: Adjusted net income, at least €2.7 billion; Dividend: distribution rate of at least 50% Simplified organization and a healthy financial situation Debt under control at around €5 billion in early 2007 Defined strategy in digital entertainment Financ
Slide 19: Appendices
vivendi Appendices
Slide 20: UMG: initiatives for growth
UMG: initiatives for growth New revenue streams Strong digital sales growth: +84% Numerous initiatives, on the Internet and on mobile phones, to multiply the distribution of our artists’ repertoire IMF, Amp’d, Agreements with YouTube, Microsoft, Qtrax… Investments, enrichment of content BMG Music Pu
Slide 21: Universal Music Group: 2006 Key Metrics
Universal Music Group: 2006 Key Metrics Top-selling artists 2006 Sales License 9% Publishing 7% Million FY 2006 Units* Digital 10% U2 3.7 Other 2% Andrea Bocelli 3.4 Video 9% Catalog 26% Singles 2% Snow Patrol 3.4 Product sales The Pussycat Dolls 3.3 72% Nelly Furtado 3.2 New releases 63% * Physical
Slide 22: Groupe Canal+: initiatives for growth
Groupe Canal+: initiatives for growth Investments in external growth Acquisition of TPS and creation of Canal+ France StudioCanal acquires Optimum Releasing, a U.K. based film distributor Investments in content About €2bn of investments in programs Investment in recruitments 1.15 million gross recru
Slide 23: Canal+ Group: 2006 Key Metrics
Canal+ Group: 2006 Key Metrics CANAL+ France net portfolio * (in thousands) ARPU** 2006 3,560 5,236 8,796 2006 €35.7 €29.9 +348 2005 3,288 5,160 8,448 2005 €34.6 €28.9 Higher proportion of digital subscriptions: at the end of December 2006, CANALSAT subscriptions to Canal+ Le Bouquet represented 61%
Slide 24: Canal+ Group: Overview
Canal+ Group: Overview 100% 65% 5.1% 9.9% 20% 65% 100% Pay TV in France (CANAL+ France) Other activities 49% Multi-thématiques 75% 24
Slide 25: Content: Two complementary offers covering expectations of all audiences
Content: Two complementary offers covering expectations of all audiences 1. CONTENT: TWO COMPLEMENTARY OFFERS COVERING EXPECTATIONS OF ALL AUDIENCES “Expect more from TV” “The experts of all your passions” 5 general-interest premium channels 300 channels covering all themes with a pick-of-the-be
Slide 26: Distribution: a leader on all platforms
Distribution: a leader on all platforms 2. DISTRIBUTION: A LEADER ON ALL PLATFORMS 2006 figures Satellite DSL Terrestrial Cable • Quality and highest • Triple play, return path • Plug & Play • Triple play, return path broadcasting capacity on 100% of the country • Growing the market in • First-choic
Slide 27: Distribution: Market trend by platform
Distribution: Market trend by platform 2. DISTRIBUTION: MARKET TREND BY PLATFORM satellite Satellite, the leading platform, is boosted by the merger DTT is an attractive substitute DTT for analogue services Cable Further growth in DSL against a DSL backdrop of fierce competition with cable TV
Slide 28: Strong Financials: steady revenues and margins growth
Strong Financials: steady revenues a margins growth 5. STRONG FINANCIALS: STEADY REVENUES AND MARGINS GROWTH Pro forma with TPS 2005 2006 2006 Total subscriptions* ‘000 subscribers 8,450 8,800 10,250 Canal+ Group revenue €m 3,460 3,630 4,226 EBITA CANAL+ Group ** €m 202 251 294 % EBITA margin/Revenu
Slide 29: Margin improvement of Pay TV in France
Margin improvement of Pay TV in France MARGIN IMPROVEMENT OF PAY TV IN FRANCE 2006-2010 CANAL+ France + 1.3m Portfolio Growth in ARPU > 5% Revenue revenue > €5 billion StudioCanal, > €230m Cyfra+, I>télé in growth 2010 EBITA > €1 billion Distribution €50–75m Technology, broadcasting €50–75m Savings
Slide 30: Impact on EBITA of transition costs
Impact on EBITA of transaction costs IMPACT ON EBITA OF TRANSITION COSTS EBITA, € millions Distribution: technical and commercial migration of TPS subscribers 2006 2007 2008 TOTA L Broadcasting and overheads: L -177 ~ -145 ~ -30 ~ -350 termination of contracts/voluntary redundancy scheme Publi
Slide 31: SFR: initiatives for growth
SFR: initiatives for growth Continued growth of the subscriber base: + 685,000 customers Growth of 18% in carried traffic SFR 3G: 65% of the population covered by our 3G+/HSDPA network (higher speed) Development of services and success of applications for Enterprises including the BlackBerry® Develo
Slide 32: SFR: 2006 Key Metrics
SFR: 2006 Key Metrics (As of end of December, including SRR) FY 2006 FY 2005 Growth Customers (in ‘000) * 17,883 17,198 +4.0% Vodafone live! customers (in ‘000) * 6,497 4,785 +35.8% 3G customers (in ‘000) * 2,686 1,003 +167.8% Market share on customer base (%) * 34.6% 35.8% -1.2pt 12-month rolling b
Slide 33: Mobile voice revenues per minute in Europe
Mobile voice revenues per minute in Europe Voice revenues per minute on mobile Q4 06 (Euros per minute) Switzerland 0.25 Germany 0.19 Belgium 0.18 Netherlands 0.18 Spain 0.17 Italy 0.17 Greece 0.16 Norway 0.16 Portugal 0.16 UK 0.16 Austria 0.15 Ireland 0.15 Denmark 0.14 France 0.13 Sweden 0.12 Finla
Slide 34: Maroc Telecom: initiatives for growth
Maroc Telecom: initiatives for growth Increased mobile market share despite competition: +2.5 million mobile clients in 2006 (+30%) Stabilization of the fixed line activities with an unlimited offer Rapid penetration of DSL: A base of almost 390,000 fixed lines in 2006 (+59%) and launch of a TV-DSL
Slide 35: Maroc Telecom: 2006 Key Metrics
Maroc Telecom: 2006 Key Metrics (Excluding Mauritel) FY 2006 FY 2005 Growth Number of fixed lines (in ‘000) 1,266 1,341 -5.6% Total Internet access (in ‘000) 391 252 +55.2% Including DSL access (in ‘000) 384 242 +58.7% Number of mobile customers (in ‘000) 10,707 8,237 +30.0% Prepaid customers (in ‘0
Slide 36: Vivendi Games: initiatives for growth
Vivendi Games: initiatives for growth Exceptional and lasting success of World of Warcraft: From 5 million paying clients in 2005 to 8 million in 2006 Over 8.5 million in March 2007 Real success with the launch of the expansion pack: The Burning Crusade 2.4 million copies sold in one day 3.5 million
Slide 37: Vivendi Games: 2006 Key Metrics
Vivendi Games: 2006 Key Metrics 2006 Best-selling games Title Platform 1. World of Warcraft Online 2. Scarface PC / Consoles 3. Ice Age 2 PC / Consoles 4. Eragon PC / Consoles More than 8 million 5. The Legend of Spyro Consoles paying customers 6. F.E.A.R PC / Consoles worldwide 7. 50 Cent: Bulletpr
Slide 38: 2007 Business Outlook
2007 Business Outlook Business Units Revenues EBITA UMG Remain stable or slight growth in A slight decline from 2006 which constant currency despite a difficult benefited from several non-recurring market. Strong release schedule and items digital sales growth are expected. Above €350m before the tr
Slide 39: NBC Universal
‘06/’07 season prime ratings NBC Universal (thru 1/7) Basic Cable Nets Network average A18-49 rating* (2006 Prime impressions) 3.6 3.6 #1 A18-49 3.6 & A25-54 A25-54 Prime Total day 3.0 upscale (000) VPY% VPY% #1 USA 1,193 9% 8% #7 SCI FI 619 (10)% (12)% Bravo 306 17% 17% A&E 584 11% 15% History 515
Slide 40: Glossary
Glossary › Adjusted earnings before interest and income taxes (EBITA): EBIT (defined as the difference between charges and income that do not result from financial activities, equity affiliates, discontinued operations and tax) before the amortization of intangible assets acquired through business c
Slide 41: Important Legal Disclaimer
Important Legal Disclaimer This presentation contains forward-looking statements with respect to the financial condition, results of operations, business, strategy and plans of Vivendi. Although Vivendi believes that such forward-looking statements are based on reasonable assumptions, such statement
Slide 42: Investor Relations Team
Investor Relations Team Daniel Scolan Executive Vice President +33.1.71.71.14.70 daniel.scolan@vivendi.com Paris 42, Avenue de Friedland 75380 Paris cedex 08 / France New York Phone: +33.1.71.71.32.80 800 Third Avenue Fax: +33.1.71.71.14.16 New York, NY 10022 / USA Phone: +1.212.572.1334 Laurence Da