Slide 1: Investor Presentation June 2011
Investor Presentation June 2011 IMPORTANT NOTICE: Financial results for the fiscal year ended December 31, 2010 Financial statements audited and prepared under IFRS Investors are strongly urged to read the important disclaimers at the end of this presentation
Slide 2: Investment highlights
vivendi Investment highlights
Slide 3: Vivendi delivers consistent earnings growth in a challenging environment
Vivendi delivers consistent earnings growth in a challenging environment EBITA CFFO 5 726 5,726 +6% 6% CAGR 512* 55,512 +8% CAGR 5,390 5,237 4,953 5,055 4,881 4,721 4,370 4,466 RS RS EUR millions , IFR EUR millions , IFR 4,157 3,985 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 Total d
Slide 4: Vivendi completed its restructuring and is poised for more profitable growth
Vivendi completed its restructuring and is poised for more profitable growth We have strengthened the financial structure and re-leveraged our balance sheet ¾ €13.5bn net debt expected at year-end 2011*, offering up to €2bn financial headroom ¾ Debt D bt structure t t optimized: ti i d average matur
Slide 5: Vivendi has full control of its assets
Vivendi has full control of its assets Vivendi is at the heart of the worlds of content, content platforms and interactive networks 62%* 100% 100%** #1 worldwide in #1 worldwide in music #1 alternative lt ti ttelecoms l video games in France 53% 53%* 100% 100%/80% #1 in telecoms #1 alternative #1 in
Slide 6: Our focus: enhance shareholder value creation
Our focus: enhance shareholder value creation Stringent capital allocation policy based on ROCE Consistency in profit fueled by investment in content, platforms and networks (€5.7bn in 2010) ¾ EBITDA to Capex ratio close to 2.5 times €1.4 dividend per share, representing 7%* dividend yield and 64% o
Slide 7: Our roadmap for Vivendi: what to expect in the next 3 years
Our roadmap for Vivendi: what to expect in the next 3 years We remain committed to increase shareholder return with a regular g dividend approach: pp ¾ We will grow the dividend in 2012 9 The SFR minority buyout will provide substantial accretion on earnings (+20% in 2012 and 2013, including +€350m
Slide 8: Exploit digital and emerging opportunities
Exploit digital and emerging opportunities Leverage our mature markets businesses (networks, content, platforms) and drive growth from smartphone p and tablet ppenetration as well as faster broadband access ¾ e.g.: La Poste MVNO, M2M connected devices, video on demand , cloud computing Extend the bo
Slide 9: Innovation to accelerate organic growth
Innovation to accelerate organic growth In order to accelerate our drive for innovation, we aim to : Launch new, ambitious growth projects Foster cooperation between the businesses and increase the number of inter-business unit projects Increase visibility and accelerate the success of innovative in
Slide 10: Conclusion and guidance
Conclusion and guidance Vivendi has first-class first class assets with high and predictable cash generation Vivendi’s organic development in fast-growing economies as well as its focus on innovation will enhance the long-term g pperformance of its businesses Vivendi is determined to build future gr
Slide 11: Investor Presentation – June 2011
Investor Presentation – June 2011
Slide 12: Guidance per business unit
vivendi Guidance per business unit
Slide 13: Outlook for 2011
Outlook for 2011 Further improvement in EBITA margin; 2011 EBITA close to 2010 Double digit EBITA margin, despite restructuring charges Mobile: Decrease in EBITDA in a tough, competitive tax and regulatory environment Broadband & Fixed: Increase in EBITDA, excl. 2010 favorable non-recurring items Sl
Slide 14: Recent events
Recent events: ¾ SFR minority buyout ¾ New loan facility ¾ Q1 2011 results
Slide 15: Acquisition of Vodafone's 44% stake in SFR
Acquisition of Vodafone Vodafone’ss 44% stake in SFR The acquisition is in line with our strategy to own 100% of our France-based operations transaction* values 44% of SFR at €7,950 The transaction €7 950 million ¾ €7,750 million, corresponding to a 6.2 multiple of SFR’s 2010 EBITDA ¾ a lump sum of
Slide 16: The positives of this acquisition
The positives of this acquisition Highly accretive on earnings Enabling a dividend increase as early as 2012 educt o in co Reduction g o e ate ddiscount conglomerate scou t Better financial flexibility within BBB rating New opportunities in running Vivendi and SFR operations Confidence in the long t
Slide 17: A highly accretive acquisition
A highly accretive acquisition The transaction will have a +15% to +18% impact on Vivendi’s Adjusted Net Income in 2011, 2011 assuming assuming… ¾ 6 months of incremental operating contribution… ¾ … and 12 months of accelerated use of net operating losses We forecast incremental contribution to Adju
Slide 18: Funding of the group is secured
Funding of the group is secured Vivendi has finalized and signed a new bank loan with 17 banks for a total amount of €5 billion. billion This loan facility, announced on April 18, 2011 will enable the company to optimize the management of its debt at the time of the 44% stake acquisition in SFR. SFR
Slide 19: First quarter 2011 results are in line with expectations
First quarter 2011 results are in line with expectations Q1 2011 operating results are in line with expectations: ¾ Revenues: €7,184m + 3.8% ¾ EBITA: €1,705m + 7.2% Adjusted Net Income is up 29% to €950m due to EBITA growth and includes the following items: ¾ Q1 2011 impact of full year SFR integrat
Slide 20: Appendices
vivendi Appendices
Slide 21: Vivendi is strengthened by a solid financial foundation
Vivendi is strengthened by a solid financial foundation €2bn of undrawn credit lines at Vivendi SA followingg the acquisition q of the 44% stake in SFR No significant debt reimbursement before 2013 Committed to keepp a qqualityy BBB rating* g Controlled financing costs Available bank credit lines**
Slide 22: Management compensation aligned with shareholders' interests
Management compensation aligned with shareholders shareholders’ interests Incentive for Management based on financial and share price performances ¾ Variable compensation based on financial targets (Adjusted net income, Cash flow from operations, ROCE) andd achievement hi t off strategic t t i prior
Slide 23: GVT Strategy and Outlook
vivendi GVT Strategy and Outlook
Slide 24: Market overview and strategy: Telecom segment
Market overview and strategy: Telecom segment GVT is a provider of fixed Communications & Entertainment for upscale Brazilian Households and Businesses in key markets1 Telecoms segment overview Fixed broadband market expected to reach 34m subscribers in 5 years from 13m currently2, CAGR 21% Fixed te
Slide 25: Market overview and strategy: Pay TV segment
Market overview and strategy: Pay TV segment Pay TV segment overview Pa TV market is eexpected Pay pected to nearl nearly do double ble its size si e in the next ne t 5 years, ears reaching 18 million subscribers s bscribers1 Pay TV penetration2 in Brazil is 13%, growing to 29% in the next 5 years (
Slide 26: Economic and market environment
Economic and market environment Stable macroeconomic environment Brazil’s GDP expected to be the world’s 5th largest in 5 years1. Per capita GDP in 2010 expected at ~USD10k from USD6k in 20062 In the next 5 years, ABC social classes households’ share of total number of households expected to increas
Slide 27: GVT mid-term and 2011 guidance
GVT mid-term mid term and 2011 guidance Mid-term financial outlook for Telecoms* Fixed & broadband: 2014 revenues expected to exceed 2.5x 2010 revenues reaching more than BRL6bn, with above 40% EBITDA margin Free cash flow (EBITDA – CapEx) expected to break even in 2012 and be positive in 2013 Mid-t
Slide 28: 2010 Results
vivendi 2010 Results
Slide 29: Growing 2010 results in a challenging environment
G i 2010 results Growing lt iin a challenging h ll i environment i t Revenues: € 28,878m + 6.4 % EBITA: € 5,726m + 6.2 % Adjusted Net Income: € 2,698m + 4.4 % CFFO before capex: € 8,569m + 9.9 % CFFO excl.l 3G spectrum t acquisition i iti byb SFR* SFR*: € 5,512m 5 512 + 5.3 53% Net debt: 8 1bn at en
Slide 30: In 2010 and early 2011, we addressed issues from the past
In 2010 and early earl 2011, 2011 wee addressed iss issues es from the past End of the dispute regarding PTC shares: Vivendi received €1,254m in January 2011 ¾ Follo Following ing agreement entered into in December 2010 with ith Deutsche De tsche Telekom, Telekom Mr. Mr Solorz-Zak Solor Zak (the con
Slide 31: Solid increase in EBITA
Solid increase in EBITA In euro millions - IFRS Constant 2010 2009 Change currency Activision Blizzard 692 484 + 43.0% + 40.7% Universal Music Group 471 580 - 18.8% - 23.6% SFR 2,472 2,530 - 2.3% - 2.3% Maroc T M Telecom l G Group 11,284 284 11,244 244 + 3.2% 3 2% + 2.4% 2 4% GVT 277 20 Canal+ Group
Slide 32: Adjusted Net Income
Adjusted Net Income In euro millions - IFRS 2010 2009 Change % Revenues 28 878 28,878 27 132 27,132 + 11,746 746 + 6.4% 6 4% Impact of GVT acquisition partially offset by cost of debt EBITA 5,726 5,390 + 336 + 6.2% decrease Income from equity affiliates 195 171 + 24 Interest (492) (458) - 34 Income
Slide 33: Class Action: Reduction of the reserve from €550m to €100m
Class Action: Reduction of the reserve from €550m to €100m On June 24, 2010, the United States Supreme Court ruled that shareholders have no recourse under American securities law against foreign companies for any stock transactions that occurred outside the United States On February 17, 2011, the U
Slide 34: Reconciliation of Adjusted Net Income to Net Income, group share
Reconciliation of Adj Adjusted sted Net Income to Net Income, Income gro groupp share In euro millions - IFRS 2010 2009 Incl. Activision Blizzard Adjusted Net Income 2,698 2,585 franchises and licenses Amortization of intangible assets acquired through business €(217)m (603) (634) combinations Impai
Slide 35: Solid Cash Flow generation
S lid C Solid Cashh Flow Fl generation ti CFFO before capex CFFO 2010 2009 Change In euro millions - IFRS 2010 2009 Change 1,248 1,043 + 19.7% Activision Blizzard 1,173 995 + 17.9% 508 329 + 54.4% Universal Music Group 470 309 + 52.1% +0.7% 3,952 3,966 - 0.4% SFR 1,978 2,263 - 12.6% excluding ppurch
Slide 36: Financial net debt evolution
Fi Financial i l nett ddebt bt evolution l ti In euro billions- IFRS Dividends Dividends Net financial Adjusted December D b 31, 31 CFFO IInterest t t & ttax paid id to t paid id to t investments and December D b 31, 31 December D b 31, 31 2009 after Capex paid and other minorities shareholders othe
Slide 37: Activision Blizzard: Revenues €3,330m, EBITA €692m
Revenues: €3,330m, +9.6% In euro millions 2010 2009 Change Constant IFRS currency Achieved record revenues driven by success of key franchises: ¾ #1 publisher overall in North America and Europe* Revenues 3,330 3,038 + 9.6% + 4.4% ¾ World of Warcraft: Cataclysm launched on December 7, 2010 EBITA 692
Slide 38: Universal Music Group: Revenues €4,449m, EBITA €471m
Revenues: €4,449m, +2.0% Recorded music sales up 1.1% ¾ Major releases: Eminem, Taylor Swift and Japan’s In euro millions - IFRS Constant 2010 2009 Change Masaharu Fukuyama currency ¾ Digital sales up 14%: strong download online growth and FX Revenues 4,449 4,363 + 2.0% - 3.6% benefit partially offs
Slide 39: SFR: mobile service revenues and EBITDA
Mobile service revenues: +4.8% excl. regulatory impacts* 21.3m customers, o/w 76% of postpaid customers at 16.1m (+8.7% yoy) 1,288k net new postpaid customers in 2010 I euro millions In illi - IFRS Data revenues: +16% to €2.3bn due to growing smartphone 2010 2009 Change penetration (28% of SFR custo
Slide 40: Maroc Telecom Group: Revenues €2,835m, EBITA €1,284m
Revenues: €2,835m, +5.2% Robust performance of mobile in Morocco In euro millions - IFRS Constant ¾ Growing customer base (+11%) due to innovative offers leading 2010 2009 Change currency to significant decrease in churn Revenues 2,835 2,694 + 5.2% + 4.5% Maroc Telecom SA 2,345 2,288 + 2.5% + 1.7% ¾
Slide 41: GVT: Net Revenues BRL2,429m, Adjusted EBITDA BRL1,003m
Net Revenues: BRL2,429m*, +43% (+71% in EUR)*** In BR GAAP, in BRL millions Revenue growth in 2010: territorial and coverage expansion, new 2010 2009 Change launching high volume of bundle d packages with higher ARPU Net revenues products launching, 22,429 429 11,699 699 + 43.0% and higher customer
Slide 42: Canal+ Group: Revenues €4,712m, EBITA €690m
Revenues: €4,712m, +3.5% Strong portfolio growth at Canal+ France: +335k net adds yoy exceeding 11m subscriptions for the first time ever In euro millions - IFRS Constant 2010 2009 Change ¾ +151k net increase in subscription base in Mainland France currency ¾ Lower churn rate per digital subscriber
Slide 43: Glossary
Glossary Gl 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
Slide 44: Activision Blizzard stand alone definitions
A ti i i Bli Activision Blizzardd – stand t d alone l - definitions d fi iti US Non-GAAP Financial Measures Activision Blizzard provides net revenues, net income (loss), earnings (loss) per share and operating margin data and guidance both including (in accordance with GAAP) and excluding (non-GAAP)
Slide 45: Investor Relations team
I Investor R l i Relations team Jean Michel Bonamy Jean-Michel Executive Vice President Investor Relations +33.1.71.71.12.04 jean-michel.bonamy@vivendi.com Paris 42, Avenue de Friedland New York 75380 Paris cedex 08 / France 800 Third Avenue Phone: +33.1.71.71.32.80 New York, NY 10022 / USA Fax: +33
Slide 46: Important legal disclaimers
I Important t t legal l l disclaimers di l i Forward Looking Statements This presentation contains forward-looking statements with respect to Vivendi`s Vivendi s financial condition, condition results of operations, business, strategy, plans and outlook of Vivendi, including expectations regarding t