Vivendi Se · EURONEXT:VIV
Vivendi — FY2010 Earnings Presentation
56 slides from Vivendi's earnings presentation, Mar 1, 2011
Slide 1: 2010 Results and 2011 Outlook
March 1, 2011 2010 Results and 2011 Outlook Jean Bernard Lévy Jean-Bernard Chairman of the Management Board & Chief Executive Officer A Amos G i h Genish GVT Chief Executive Officer Philippe Capron IMPORTANT NOTICE: Financial results for the fiscal year ended December 31, 2010 Member of the Manageme
Slide 2: Jean-Bernard Lévy
Jean-Bernard Lévy Ch i Chairman off th the M Managementt BBoardd & Chief Executive Officer
Slide 3: 2010 results: Growing in a challenging environment
G i 2010 results Growing lt iin a challenging h ll i environment i t R Revenues: € 28,878m 28 878 + 6.4 64% EBITA: € 5,726m + 6.2 % Adjusted Net Income: € 2,698m 2 698m + 4.4 44% CFFO before capex: € 8,569m + 9.9 % CFFO excl. 3G spectrum p acquisition q byy SFR*: € 5,512m , + 5.3 % Net debt: € 8.1bn
Slide 4: Proposed 2010 dividend
P Proposed d 2010 dividend di id d We will propose at the AGM a €1.40 €1 40 dividend per share payable in cash on May 10, 2011 FY 2010 Results – March 1, 2011 4
Slide 5: 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 Following agreement entered in December 2010 with Deutsche Telekom, Mr. Solorz-Zak (the controlling shareholder of Elektrim) and the credito
Slide 6: 2010 business drivers: Commercial success in France
2010 business drivers: Commercial success in France Excellent market share and revenue achievements for businesses in France Canal+ France subscriptions p ARPU pper subscriber Mobile data revenues Broadband B db d Internet I t t in Mainland France 11,058 k mass market revenues + 335 k €46.3 + 16% €2
Slide 7: 2010 business drivers: More emerging markets
2010 business drivers: More emerging markets Vivendi has increased its exposure to fast-growing economies 2009 Revenues in emerging markets 2010 Revenues in emerging markets 14% 18% + 35% Accelerated growth of GVT in Brazil: Revenues up 71% in euros* Activision Blizzard, Maroc Telecom Group, UMG
Slide 8: 2010 business drivers: More digital
2010 business b siness dri drivers: ers More digital O r content operations contin Our continuee to benefit from new digital business models 2009 digital revenues* 2010 digital revenues* Digital recorded music revenues up 14% 27% 32% Î Digital sales in excess of €1bn in 2010, totaling 29% of recor
Slide 9: Vivendi is focused on organic growth and return to shareholders
Vi di is Vivendi i focused f d on organic i growth th andd return t to t shareholders h h ld Our ambition: Enhance the growth potential and profitability of our subscription-based model by innovating and investing in attractive content, platforms and networks We promote internal innovation initiativ
Slide 10: Innovation to accelerate organic growth
Innovation to accelerate organic growth Innovation is at the In order to strengthen the innovation dynamics, heart of our we aim to: development strategy Launch new, ambitious, growth projects The launch of innovative Foster cooperation between the group’s group s businesses products and services, ¾
Slide 11: Platforms at the heart of our innovations (1/3)
Platforms at the heart of our innovations (1/3) Premium music video and entertainment service # 1 music online destination in the US Nearly 60m unique visitors in the USA and Canada Apps on mobile devices and connected TV First music web TV channel launched by a music company Launched fi
Slide 12: Platforms at the heart of our innovations (2/3)
Platforms at the heart of our innovations (2/3) Enhanced customer experience with new fluid 3D user interface and multi-screen Eco-conceived box with significantly reduced electric consumption Scalable box with upcoming femtocell support and "content in the cloud" Successful launch with 200k
Slide 13: Platforms at the heart of our innovations (3/3)
Platforms at the heart of our innovations (3/3) Innovative content distribution platform Instant multi-device content delivery Content optimized for 3000+ devices 16 patents pending 1m+ clients signed signed-up up in France and Germany since launch A breakthrough new play experience Le
Slide 14: Conclusion and guidance
Conclusion and guidance Vivendi is poised for more profitable growth, despite a challenging environment Vivendi has full control of its assets and remains focused on ggainingg full ownership of its French entities at a reasonable price Vivendi’s organic development in fast-growing economies as well
Slide 15: Amos Genish
Amos Genish GVT Chief Executive Officer
Slide 16: 2010 overview
2010 overview Net Revenues: BRL2,429m*, +43% (+71% in EUR)*** In BR GAAP, in BRL millions Revenue growth in 2010 was driven primarily by territorial and coverage 2010 2009 Change expansion, new products launching, high volume of bundle packages with Net revenues 22,429 429 11,699 699 + 43.0% hi h AR
Slide 17: Market overview and strategy: Telecom segment
Market overview and strategy: Telecom segment GVT is a provider of fixed Communications & Entertainment for Brazilian high-end Households and Businesses in key markets1 Telecoms segment overview Fixed broadband market expected to reach 34 million subscribers in 5 years from 13 million currently2, CA
Slide 18: 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 19: 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 increase
Slide 20: 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 breakeven in 2012 and be positive in 2013 Mid-te
Slide 21: Philippe Capron
Philippe Capron Member of the Management Board & Chief Financial Officer
Slide 22: 2010: Excellent financial performance
2010: Excellent financial performance 2010: Robust EBITA growth and high level of investments to fuel future growth ¾ Positive earnings momentum fueled by growth at Activision Blizzard EBITA : +6% 6% and GVT ¾ Very strong cash flow performance: CFFO before capex up 10% CFFO: €5.2bn ¾ Increasing grow
Slide 23: 2010 guidance achieved
2010 guidance achieved Guidance G id announced d Actual A t l on March 1, 2010 2010 EBITA above €600m ; €692m Double digit EBITA margin ; 10.6% Mobile: Slight decrease in EBITDA ; -33.3% 3% +8.6% excluding non Broadband & Fixed: Slight increase in EBITDA ; recurring profit of €58m Moderate growth in
Slide 24: 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 25: 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 26: 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 27: 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 28: 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 29: Financial net debt evolution
Fi Financial i l nett debt d 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 oth
Slide 30: 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 31: 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 32: 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 33: 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 34: 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 35: Outlook for 2011
O tl k ffor 2011 Outlook Vivendi: Slight increase in ANI excluding NBCU NBCU* High cash dividend maintained 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 env
Slide 36: The best emotions, digitally
The best emotions, digitally #1 Video Games Worldwide #1 Music Worldwide #1 Alternative Telecoms France #1 Telecoms Morocco #1 Alternative Broadband Brazil y #1 Pay-TV France FY 2010 Results – March 1, 2011
Slide 37: Appendices
vivendi Appendices
Slide 38: Vivendi's #1 positions and ownership by business
100% 100%/80% 56% #1 worldwide in music #1 in pay-TV in France #1 alternative telecoms in France 53%* 61%* 100% #1 in telecoms #1 worldwide in #1 alternative in Morocco video games broadband operator in Brazil * As of December 31, 2010 based on shares outstanding FY 2010 Results – March 1, 2011 38
Slide 39: Activision Blizzard IFRS and US non-GAAP results, 2011 outlook
US non-GAAP* IFRS Constant C t t In dollar millions 2010 2009 Change 2010 currency In euro millions vs. 2009 Activision 2,769 3,156 -12.3% Activision 2,002 + 5.5% Blizzard 1 656 1,656 1 196 1,196 + 38.5% 38 5% Blizzard 1,046 + 7.1% Distribution 378 423 -10.6% Distribution 282 - 10.8% Net revenues 4,
Slide 40: Activision Blizzard – Reconciliation to IFRS Revenues
A ti i i Bli Activision Blizzardd – Reconciliation R ili ti tto IFRS R Revenues 2010 In millions Non-GAAP Net Revenues $4,803 Changes in deferred net revenues (a) $(356) Net Revenues in US GAAP as published by Activision Blizzard $4,447 Reconciling differences between US GAAP and IFRS - Net Revenues
Slide 41: Activision Blizzard – Reconciliation to IFRS EBITA
A ti i i Bli Activision Blizzardd – Reconciliation R ili ti tto IFRS EBITA 2010 In millions Non-GAAP Operating Income/(Loss) $1,371 Changes in deferred net revenues and related cost of sales (a) $(319) Equity-based compensation expense (b) $(131) Restructuring charges $(3) Impairment of intangible a
Slide 42: Recorded music: Top-selling artists
Recorded music: Top-selling Top selling artists artists* Million Million 2010 Units* 2009 Units* Eminem 6.0 Black Eyed Peas 5.4 Lady Gaga - The Fame Monster 48 4.8 Taylor Swift 47 4.7 Taylor Swift 4.3 Lady Gaga -The Fame 4.6 Rihanna 3.0 U2 4.3 Justin Bieber - My World 2.0 3.0 Andrea Bocelli 3.7 Top
Slide 43: SFR mobile, broadband and fixed KPIs
2010 2009 Change g MOBILE Customers (in '000)* 21,303 20,395 + 4.5% Proportion of postpaid clients clients* 75 6% 75.6% 72 6% 72.6% + 3.0 3 0 pts 3G customers (in '000)* 9,663 8,386 + 15.2% Market share on customer base (%)* 33.1% 33,1% - Network market share (%) 35.0% 34,8% + 0.2 pt 12-month rollin
Slide 44: SFR – Detailed revenues
SFR – Detailed D t il d revenues IFRS - in euro millions 2010 2009 Change Service revenues 8,420 8,510 - 1.1% of which data revenues from mobile services 2,335 2,021 + 15.5% Equipment sales, net 510 473 + 7.8% Mobile revenues 8,930 8,983 - 0.6% Broadband Internet and fixed revenues 3,944 3,775 + 4.5
Slide 45: Maroc Telecom SA and African subsidiaries KPIs
Maroc Telecom SA In '000 000 (except where noted) 2010 2009 African subsidiaries Number of mobile customers 16,890 15,272 % Prepaid customers 95.2% 95.5% In '000 ARPU (€/month) 8.3 8.7 D 31, Dec. 31 2010 D 31, Dec. 31 2009 Ch Change Number of fixed lines 1,231 1,234 Mauritania Internet customers 497
Slide 46: GVT operating and revenue KPIs
In '000 000 Dec. 31, 2010 Dec. 31, 2009 Change In BRL millions millions* 2010 2009 Change Total Homes passed 5,065 3,380 + 49.9% Voice 1,553 1,159 + 34.0% Next Generation Services 876 0 540 + 62.2% Total Lines in Services (LIS) 4,232 2,816 + 50.3% Corporate data 207 0 156 + 32.7% Broadband 622 0 345
Slide 47: Canal+ Group portfolio and KPIs
(in ‘000) Dec. 31, 2010 Dec. 31, 2009 Change Portfolio Canal+ Group 12,709 12,365 + 344 ow Canal+ France* 11,058 10,723*** + 335 ow International** 1,651 1,642 +9 M i l dF Mainland France D 31, Dec. 31 2010 D 31, Dec. 31 2009 Ch Change Churn per digital subscriber 11.0% 12.3% - 1.3 pt ARPU per subsc
Slide 48: Q4 EBITA
Q4 EBITA Constant In euro millions - IFRS Q4 2010 Q4 2009 Change currency Activision Blizzard 6 78 -92.3% -92.6% Universal Music Group 227 311 -27.0% -31.3% SFR 490 544 -9.9% 9.9% -9.9% 9.9% Maroc Telecom Group 342 339 0.9% -0.6% Impact as of January 1, GVT 108 20 2010 of increasing Canal+ Group (70
Slide 49: Revenues
Revenues Constant In euro millions - IFRS 2010 2009 Change currency Activision Blizzard 3,330 3,038 + 9.6% + 4.4% Universal Music Group 4,449 4,363 + 2.0% - 3.6% SFR 12,577 12,425 + 1.2% + 1.2% Maroc Telecom Group 2,835 2,694 + 5.2% + 4.5% GVT 1,029 104 Canal+ Group 4,712 4,553 + 3.5% + 2.9% N core
Slide 50: Income from equity affiliates
I Income f from equity it affiliates ffili t In euro millions - IFRS (except where noted) 2010 2009 Change I Income ffrom equity it affiliates ffili t 195 171 + 14.0% 14 0% o/w NBC Universal in € 201 178 + 12.9% NBC Universal in $ $267 $249 + 7.2% FY 2010 Results – March 1, 2011 50
Slide 51: Interest
I t Interest t In euro millions – IFRS (except where noted) 2010 2009 Interest (492) (458) Interest expense p on borrowings g ( ) (521) ( ) (486) Average interest rate on borrowings (%) 4.09% 4.75% Average outstanding borrowings (in euro billions) 12.7 10.2 Interet income from cash and cash equivale
Slide 52: Income tax
I Income tax t In euro millions – IFRS 2010 2009 Adjusted Net Adjusted Net net income income net income income Consolidated Global Profit Tax System 577 574 181 473 Current tax: savings for current year 577 577 181 181 Deferred tax: variation in expected savings (year n+1 / year n) - (3) - 292 Tax c
Slide 53: 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 54: 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 55: 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 56: 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 the financial condition condition, results of operations, business, strategy, plans and outlook of Vivendi, including expectations regarding the payment of di