Slide 1: 2005 Earnings and 2006 Outlook
2005 Earnings and 2006 Outlook IMPORTANT NOTICE: INVESTORS ARE STRONGLY ADVISED TO READ THE IMPORTANT LEGAL DISCLAIMER AT THE END OF THIS PRESENTATION
Slide 2: Our Successes in 2005
Our Successes in 2005 Targets exceeded > Group's Adjusted net income of €2,078 million is well above target (>€1,800m) > Business units' operating profit targets have been exceeded > Dividend proposed: €1 / share Achieved Results > Increased market share in every business > Successful launch of inno
Slide 3: Our Goals for 2006
Our Goals for 2006 Financial Goals > Adjusted Net Income & EPS: "+11% to +13%" > Dividend Pay-out: "Minimum 50%" Priorities > Further leverage our leadership positions > Capitalize on our subscriber-centric business model to launch innovative services which will benefit from the digital evolution >
Slide 4: Execution, Growth, Tangible Results
Execution, Growth, Tangible Results > Our strategy is to: > further strengthen our leadership positions in superior content and distribution businesses > and pursue new digital services revenue streams that take advantage of the rise of mobility and broadband
Slide 5: Global Portfolio: Ahead of the Curve
Global Portfolio: Ahead of the Curve Superior content and distribution businesses delivering tangible results, Ideally positioned to benefit from the rise of mobility, broadband and global transition to digital, Attractive to younger demographics who are leading the global digital transformation, Su
Slide 6: Management & Financial Resources: Charting the Course
Management & Financial Resources: Charting the Course United Management Focus on Innovation Financial Discipline Smart Capital Allocation Strong Balance Sheet High Quality Partners > Superior Assets
Slide 7: United Management Board: Focused on Value Creation
United Management Board: Focused on Value Creation Jean-Bernard Levy Chief Executive Officer Bertrand Meheut Chairman of the Management Board - CANAL+ Group Rene Penisson Chairman - VU Games; Group's Head of HR Abdeslam Ahizoune Chairman of the Management Board - - Maroc Telecom Jacques Espinasse Ch
Slide 8: Connecting with the Customer: Innovative Subscription Services
Connecting with the Customer: Innovative Subscription Services Music Download services & ringtones Thematic channels Online Game World of Warcraft ADSL Broadband Internet access Pay-TV DSL, DTT & mobile TV offers Video-On-Demand New Services on 3G MMS/SMS Mobile TV, Music downloads Mobile Videophone
Slide 9: Mobility is at the Core of our Businesses
Mobility is at the Core of our Businesses Innovation in Mobile > > > > > > > > > > > > > Subscribers News Music Messages Video & TV Corporate Services Internet Access Payment Games Visio (tm) (tm) (tm) (tm) (tm)
Slide 10: Universal Music Group: Strategic Priorities
Universal Music Group: Strategic Priorities > Strengthen both global and local market leadership > Accelerate transformation into a music entertainment company by leveraging content and brands through innovation and creative new revenue streams > Expand music publishing revenues > Grow digital reven
Slide 11: VU Games: Strategic Priorities
VU Games: Strategic Priorities > Pursue development of the online gaming business and strengthen leadership position with World of Warcraft > Capitalize on strong PC franchises with the launch of new innovative versions > Strengthen our position on console games by leveraging the creation capacity o
Slide 12: CANAL+ Group: Strategic Priorities
CANAL+ Group: Strategic Priorities > Close the CANAL+ / TPS combination and initiate integration process > Continue to leverage leadership on existing and emerging digital platforms > Continue to grow the content portfolio and increase subscriptions > Accelerate digital migration through penetration
Slide 13: SFR: Strategic Priorities
SFR: Strategic Priorities > Continue to grow customer base with a strong migration to 3G > Keep leadership in innovation and customer satisfaction > Focus on 3G / UMTS to increase voice capacity, enable fixed-mobile substitution and deliver multimedia services > Extend the mobile offer with new serv
Slide 14: Maroc Telecom: Strategic Priorities
Maroc Telecom: Strategic Priorities > Continue to lead in the rapidly growing wireless market through innovative offers, while pursuing profitable growth > Strengthen momentum in fixed line and Internet sales > Leverage VU Group's expertise (new mobile services, broadband Internet, TV offer, ...) >
Slide 15: Focus on Acquisitions / Capital Allocation
> Acquisition of a further 16% in Maroc Telecom ? > Purchase of game development studios ? (Radical Entertainment, Swordfish Studios, Swingin' Ape, High Moon Studios) > Unwinding of IAC's stake in VUE ? > Acquisition of minority interest from Matsushita to move to 100% of UMG and 20% of NBCU ? > Com
Slide 16: Full Year 2005 Earnings
—— Full Year 2005 Earnings VIORIVERSAL J
Slide 17: 2005 Actual Figures: Well Above Guidance
2005 Actual Figures: Well Above Guidance Figures as published 2005 Guidance Announced on March 10, 2005 Updated on November 17, 2005 2005 As published > Adjusted Net Income "Above 1.8 billion" €2,078m > Adjusted net income per share "Above €1.57" €1.81 > Dividend pay-out "At least 50% of Adjusted ne
Slide 18: 2005 Key Figures
2005 Key Figures In Euro millions Figures as published, except when specified 2005 % Growth > Revenues (comparable basis) 19,439 +7% > Earnings from operations (comparable basis) 3,719 +14% > EFO / Revenues margin (%) 19.2% +1.1 point > Adjusted Net Income 2,078 +55% > Adjusted net income per share
Slide 19: 2002-2005 Key Figures
2002-2005 Key Figures IFRS IFRS French GAAP French GAAP French GAAP In Euro millions Figures as published 2005 2004 2004 2003 2002 > Revenues 19,484 17,883 21,428 25,482 58,150 > Earnings from operations 3,746 3,233 3,476 3,309 3,788 > EFO / Revenues margin (%) 19.2% 18.1% 16.2% 13.0% 6.5% > Adjuste
Slide 20: 2005 Consolidated Statement of Earnings
2005 Consolidated Statement of Earnings
Slide 21: Reconciliation of Earnings to Adjusted Net Income
Reconciliation of Earnings to Adjusted net income 2005 2004 Earnings attributable to equity holders of the parent 3,154 3,767 Adjustments to Earnings: + Other charges from ordinary activities - Capital gain on Veolia Environnement shares - Capital gain on Sogecable shares - Capital gain on unwinding
Slide 22: 2005 Adjusted Net Income Growth
2005 Adjusted Net Income Growth > 2005 Adjusted net income of €2,078m vs. €1,338m in 2004, i.e. a +55% growth > The +€740m year-on-year improvement comes from: + €513m: +16% improvement in earnings from operations + €188m: - 46% reduction in interest + €105m: +48% increase in income from equity affi
Slide 23: 2005 Revenues by Business: +7%
2005 Revenues by Business: +7% UMG VUG CANAL+ SFR Maroc Tel. 2004 4819 475 3277 8117 1611 2005 4893 641 3407 8687 1860 In euro millions - IFRS On a comparable basis UMG VUG CANAL+ Group SFR Maroc Telecom 2005 guidance: "Generally perform in line with the industry" "Above €500m" "Approx. €3.3bn" "+3%
Slide 24: Earnings from Operations by Business: +14%
UMG VUG CANAL+ SFR Maroc Tel. 2004 399 -203 187 2338 671 2005 480 41 176 2422 762 2005 Earnings from operations by Business: +14% In euro millions - IFRS On a comparable basis UMG VUG CANAL+ Group SFR Maroc Telecom 2005 guidance: "Margin growth to [7% to 9%]" "€30m to €50m" "Approx. 4.5% margin" "+6
Slide 25: 2005 Income from Equity Affiliates Analysis
2005 Income from equity affiliates Analysis Q4 2005 Q4 2004 2005 2004 Income from equity affiliates 101 3 326 221 > NBC Universal > VUE > neufCegetel / Cegetel SAS > Elektrim Telekomunikacja (Telco) > Other 106 - - (16) - - 11 110 - - (12) (107) 12 361 - - (50) - - 15 175* 30 (22) - - 38 In euro mil
Slide 26: Financial Net Debt Evolution in 2005
Financial Net Debt Evolution in 2005 Dec. 31, 2004 Acquisitions Puts cancellation CFFO Financing expenses & Taxes Dividends paid to minorities VU Dividens Debt Adjustment March 31, 2005 Est -4.7 -4.8 -0.6 -0.6 -2.7 -3.7 -3.8 -4.7 -1.5 -1.4 -4.2 -2.1 -1 -0.7 -0.6 -3.8 -2 Dec. 31, 2004 Dec. 31, 2005 I
Slide 27: 2005 Net Cash Flow Available at VU S.A.
2005 Net Cash Flow Available at VU S.A. 2005 2004 Consolidated cash flow from operations before net capex 5,648 5,480 Capital expenditures (capex) (1,580) (1,322) Proceeds from sale of tangible & intangible assets 89 196 Consolidated cash flow from operations 4,157 4,354 - Cash income taxes paid (1,
Slide 28: Strong Balance Sheet and Financial Flexibility
Strong Balance Sheet and Financial Flexibility > Strong balance sheet and cash flows support financial flexibility > Disciplined acquisition strategy focused on business offering the most potential for strong cash flow and EPS growth > Under no pressure to make acquisitions due to superior asset bas
Slide 29: Business 2005 Performance & 2006 Outlook
Business 2005 Performance & 2006 Outlook Financial information presented in the forthcoming pages is in euro millions on a comparable basis, unless otherwise mentioned
Slide 30: Universal Music Group: 2005 Achievements
Universal Music Group: 2005 Achievements Revenues: North America: up +4.5%; Europe: nearly flat; Asia: down UMG's SoundScan 2005 US market share: +2 points to 31.7% Digital sales of €259m at 5.3% of total revenues 2005 best sellers: Mariah Carey, 50 Cent, Black Eyed Peas, Eminem, Gwen Stefani EFO: u
Slide 31: Universal Music Group: 2006 Outlook
Universal Music Group: 2006 Outlook 2006 Financial Targets > Revenues: "Slight growth as digital sales more than offset the decline in physical sales" > EFO margin: "Same margin rate or slightly above 2005"
Slide 32: VU Games: 2005 Achievements
VU Games: 2005 Achievements > World of Warcraft surpassed 6 million paying clients worldwide** > Acquisition of 4 console games development studios: Radical Entertainment, Swordfish Studios, Swingin' Ape and High Moon Studios > Release of 50 Cent: Bulletproof, the exciting convergence of gaming and
Slide 33: VU Games: 2006 Outlook
VU Games: 2006 Outlook 2006 Financial Targets > Revenues: "+12% to +15% growth" > EFO margin rate: "Grow from 6% to between 8% and 10%"
Slide 34: CANAL+ Group: 2005 Achievements
2004 2005 Revenues 4,893 - -6% 176 187 EFO 4,893 +310k (+4%) 8.3m 7.9m French Pay-TV Portfolio 2004 2005 4,893 +4% 3,407 3,277 2004 2005 CANAL+ Group: 2005 Achievements Revenue growth driven by growing ARPU and increased portfolio +310,000 subscriptions to pay-TV in France to a total 8.25m subscript
Slide 35: CANAL+ Group: 2006 Outlook
CANAL+ Group: 2006 Outlook 2006 Financial Targets > Revenues: "+4% to +6% growth" > EFO: "Stable at constant perimeter"
Slide 36: SFR: 2005 Achievements
SFR: 2005 Achievements +7.0% revenue growth driven by growing customer base and stable ARPU, despite a -16.3% cut on fixed incoming termination rate on Jan. 1, 2005 +1.38m customers to 17.198m at end-2005, including 63.3% postpaid clients +10.5% increase in AUPU to 296mn per month Net data ARPU up +
Slide 37: SFR: 2006 Outlook
SFR: 2006 Outlook 2006 Financial Targets > Revenues: "Stable to slight growth: growth in outgoing revenues largely offset by termination cuts" > EFO: "+8% to +10% growth" > EFO margin rate: "Grow to between 29.5% and 30.5% compared with 27.9% in 2005"
Slide 38: Maroc Telecom: 2005 Achievements
Maroc Telecom: 2005 Achievements Mobile Revenues up 29%* and EFO up 42%* Up respectively 24% and 27% excluding increase of incoming international interconnection tariff +2.4 million customers in 2005 ARPU stood at €10.8 vs. €11.2 in 2004 Fixed Revenues up 6%* EFO: down 13%*, up 6% excluding voluntar
Slide 39: Maroc Telecom: 2006 Outlook
Maroc Telecom: 2006 Outlook 2006 Financial Targets > Revenues: "+6% to +8% growth" > EFO : "+12% to +14% growth"
Slide 40: Conclusion
—— Conclusion
Slide 41: Our Commitments
Our Commitments Operating Focus on organic growth and leverage leadership positions while developing profitability Develop investments and new initiatives between our businesses Capitalize on consumer demand for mobility and broadband Corporate Governance Transparency Best in class internal controls
Slide 42: Appendices
—— Appendices
Slide 43: 2005 Income Tax Analysis
2005 Income Tax Analysis Q4 2005 Q4 2004 In euro million - IFRS 2005 2004 333 (171) Provision for income taxes (204) (292) (228) (197) > Included in Adjusted Net Income (787) (724) 121 102 Worldwide Tax System (for "Year n") 507 464 (349) (299) Tax charge (1 294) (1 188) 561 26 > Not included in Adj
Slide 44: 2005 Interest & Other Financial Charges and Income
2005 Interest & Other financial charges and income 2005 2004 Interest (218) (406) > Interest expense on gross debt (excluding swap) Average borrowing cost (%) Average amount of borrowings (in € billion) > Interest on swap on interest rates > Interest income on cash & cash equivalent (262) 3.92% 6.7
Slide 45: Universal Music Group: 2005 Key Metrics
Universal Music Group: 2005 Key Metrics Artist M Units Mariah Carey 7.7 50 Cent 7.5 Black Eyed Peas 6.8 Eminem 5.5 Gwen Stefani 4.2 Kanye West 3.9 Jack Johnson 3.6 The Game 3.2 Nickelback 2.8 NOW20 2.8 2005 2004 United States 31.7% 29.6% Europe 25.4% 26.8% Germany 26.6% 24.7% UK 25.9% 29.5% France 3
Slide 46: VU Games: 2005 Key Metrics
North America Europe Asia & Pacific 05 Rev. 53 33 14 2004 2005 Mid-Feb. N/A 600 1367.6 6100 Europe 1029.6 Korea 362.1 China 2404.5 Taiwan 306.7 VU Games: 2005 Key Metrics > World of Warcraft sales by region (paying customers, in '000) 2004 2005 600 5,471 Title Platform World of Warcraft Online 50 Ce
Slide 47: CANAL+ Group: 2005 Key Metrics
CANAL+ Group: 2005 Key Metrics > CANAL+ Group subscription portfolio > CANAL+ Group 2005 operating metrics ARPU (€/month) * 28.9 34.6 Churn rate (%) * 11.4% 9.9% Digital subscriptions (%) ** 52% * Individual subscriptions; ** Total subscriptions 2004 2005 Est 4955 5061 Ouest 2989 3192 4,955 5,061 2,
Slide 48: SFR: 2005 Key Metrics
SFR: 2005 Key Metrics As of end-December including SRR 2005 2004 Growth > Customers (in '000) * 17,198 15,820 +9% > Net additions (in '000) * 1,379 1,095 +26% > Market share on net additions (%) * 39.4% 38.2% +1.2 point > Market share on customer base (%) * 35.8% 35.5% +0.3 point > 12-month rolling
Slide 49: Maroc Telecom: 2005 Key Metrics
Maroc Telecom: 2005 Key Metrics As of end-December, excluding Mauritel 2005 2004 Growth > Mobile customers (in m) 8.8 6.4 +38% % of prepaid mobile customers 96% 96% Flat > Mobile net additions (in m) 2.4 1.2 x2 > Market share on mobile customer base (%) 66.7% 67.5% -0.8 point > Blended mobile ARPU (
Slide 50: NBC Universal: Key Strengths & Ambitions
NBC Universal: Key Strengths & Ambitions > Diversified entertainment business model > Develop, produce and market best content > Monetize content on numerous platforms > Sell content effectively in digital distribution model
Slide 51: NBC Universal: 2005 Achievements
Reported basis Revenues up 14% Generated highest adults 18-49 rating this season for a tv sitcom with My Name is Earl USA highest rated entertainment cable network in 4Q'05 Achieved Sci Fi Channel's highest full-year ratings Film solid for total year, 4Q against tough comps (Fockers) Prime ratings o
Slide 52: NBC Universal: 2005 Key Metrics
NBC Universal : 2005 Key Metrics CBS ABC NBC FOX A18-49 3.9 3.6 3.1 2.7 VPY% (3)% - (16)% 8% 05/06 Season Prime Ratings* * Prime time ratings thru 1/8 excluding sports/live news. A28 - 49 rating TNT 1,240 1% 0% USA 1,090 1% 5% TBS 911 0% 0% SPIKE 807 24% 24% Lifetime 767 2% (2)% SCI FI 688 5% 7% Bra
Slide 53: NBC Universal: 2006 Outlook
NBC Universal : 2006 Outlook 2006 Financial Targets > Revenues: "~$16 billion, +10%" > Segment Profit : "~$3.0 billion (100% equates to ~$3.4 billion)" Strategic Priorities > Develop, produce and market best content > Continue to make progress with primetime ratings > Maintain strength of leading en
Slide 54: Innovation: Leading the Digital Evolution
Innovation: Leading the Digital Evolution > Embracing technology - leader in launching new digital content and distribution services > Exceptional link between our businesses and consumer demand/consumption trends in the global digital arena > Benefiting from the rise of mobility and rapid growth in
Slide 55: Proposed Pay-TV Combination
Vivendi Universal - Lagardere - TF1-M6: Proposed Pay-TV combination > CANAL+ Group and TPS are combining their know-how to provide consumers with a diversified, qualitative and competitive pay-television service in France > Uniting CANAL+ Group's and TPS's pay-television activities is the outcome of
Slide 56: Shareholding Structure
Shareholding Structure > TF1 & M6 will have a put option to VU, exercisable on the 3rd anniversary of the closing date, price based on fair market value with a floor value at €1.13bn, corresponding to €7.5bn at 100% > Lagardere will have a call option on an additional 14% stake in CANAL+ France in t
Slide 57: Definitions of Adjusted Net Income and Cash Flow Measures
Adjusted Net Income: includes earnings from operations, other income from ordinary affiliates, income from equity affiliates, interest, and tax and minority interest relating to these items. As a consequence, it excludes other charges from ordinary activities (corresponding to impairment losses, if
Slide 58: IR Team
IR Team Eileen McLaughlin IR Director eileen.mclaughlin@groupvu.com Laurence Daniel IR Director laurence.daniel@groupvu.com Edouard Lassalle IR Analyst edouard.lassalle@groupvu.com Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.32.80 daniel.scolan@groupvu.com For any financial
Slide 59: Important Legal Disclaimer
Important Legal Disclaimer Vivendi Universal is quoted on the NYSE and on Euronext Paris SA. This presentation contains "forward-looking statements" as that term is defined in the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of the company's