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Vivendi — Investor Presentation (October 2006)
35 slides from Vivendi's investor presentation, October 2006
Slide 1: Investors Presentation October 2006
Investors Presentation October 2006 October 2006
Slide 2: Our Strategy: Innovation & Leadership
Our Strategy: Innovation & Leadership › Strengthen our leadership positions in superior content and distribution businesses › Pursue new digital services revenue streams that take advantage of the rise of mobility and broadband October, 2006 2
Slide 3: Ahead of the curve
Ahead of the curve #1 French pay-TV #1 Polish pay-TV #1 Worldwide in Music #2 French Mobile operator #1 French 3G provider #1 in Morocco’s Fixed, Mobile & Internet Leading alternative fixed and Leader in worldwide #1 Worldwide in Online Games DSL operator entertainment Superior content and distrib
Slide 4: Main Recent Events
Main Recent Events › Authorization of the combination of Canal+ and TPS ›Acquisition of BMG Music Publishing (€1,630 million in Enterprise Value) ›Buy out of Matsushita’s minority interest to own 100% of Universal Music Group and 20% of NBC Universal ($1,154 million › SFR increased its stake in Neuf
Slide 5: CANAL+ and TPS Combination: Creation of CANAL+ France
CANAL+ and TPS Combination: Creation of CANAL+ France 100% 20% 65% 9.9% 5.1% 100% CANAL+ France (1) Total pro forma 2005 subscriptions: 9.9m (1)* Pro forma 2005 revenues: €3.4bn (1) Comprehensive array of content (1) Scope: French Pay-TV = 100% CANALSAT, TPS, CANAL+, MultiThématiques, MediaOve
Slide 6: Focus on the CANAL+ / TPS Combination
Focus on the CANAL+ / TPS Combination › The French government awarded its authorization on August 31, 2006 within the initial time frame › Consumers will soon be able to access a unique enriched offer through a single commercial operator › Vivendi’s commitments do not put into question the industria
Slide 7: Announced Acquisition of BMG Music Publishing
Announced Acquisition of BMG Music Publishing* Consideration: €1,630 million in Enterprise value › Why Music Publishing? • Attractive low risk, high margin business • Creates the world’s largest music publishing company • Scarcity value of sizeable pure-play music publishing assets › Why BMG Music P
Slide 8: UMG to Purchase BMG Music Publishing: A Unique Opportunity
UMG to Purchase BMG Music Publishing: A Unique Opportunity … BMG Music Publishing enhances the strategic position and value of Universal Music Group as the world’s leading recorded music company AND music publishing company UMG Today UMG + BMG MP Publishing Publishing 8% 14% BMG MP €370m revenues Re
Slide 9: First Half Results: Confirm Strong Progress
First Half Results : Confirm Strong Progress In euro million - IFRS First Half % growth Reminder on a 2006 comparable FY2005 Actual basis › Revenues (on a comparable basis) 9,572 + 5.8% 19,484 + 11.1% 3,985 › EBITA (on a comparable basis) 2,348 › Adjusted net income, group share + 10.9% 2,218 1,378
Slide 10: Operating Highlights
Operating Highlights On a comparable basis Strong operating performance in H1 2006: › Revenues up +5.8% to €9,572m in H1 2006: • Strong acceleration of CANAL+ Group (+10.7%) and Vivendi Games (+24.4%); • Good performance from UMG, driven by strong growth in digital sales (+5.3%); • SFR continues to
Slide 11: Our 2006 Financial Objectives
Our 2006 Financial Objectives • Adjusted net income: ≥ +16%, i.e. approx. €2.6bn • Earnings per share: ≥ +16%, i.e. approx. €2.26 per share • Dividend: Pay-out ratio of a minimum 50%, i.e. a minimum of €1.13€ per share October, 2006 11
Slide 12: Growth Drivers Are In Place
Growth Drivers Are In Place › Digital generates in H1 2006 a growing portion of the Group’s activities: • 10% of Universal Music Group’s revenues • 73% of CANAL+ Group’s subscriptions in France • 70% of Vivendi Games revenues are derived from online games › The pending combination between Canal+ and
Slide 13: 2011 Outlook Confirmed
2011 Outlook Confirmed › 2006-2011 EBITA average growth: Between 8% and 10% per annum › 2011 Adjusted Net Income: Between €3.5 billion and €4.0 billion * * Including the assumption that all deferred tax assets will have been utilized by end of 2010. October, 2006 13
Slide 14: Appendices
Appendices October 2006 14
Slide 15: Strong Corporate Governance
Strong Corporate Governance A dual corporate governance structure: Supervisory Board: Jean-René Fourtou, Chairman 11 members, 9 are independent and 4 are non-French Committees of the Supervisory Board: Strategy Committee Audit Committee Human Ressources Committee Corporate Governance Committee Man
Slide 16: Vivendi, a top 10 Stock
Vivendi, a top 10 Stock Market capitalisation: € 32 bn* 7th in CAC 40 (based on CAC 40 weighting)* Stock Indices: CAC 40, DJ Euro Stoxx 50, DJ Stoxx Media FTSE4Good Global Over the last 6 months, Vivendi has been the 8th most traded stock on the Paris Stock Exchange by Euro volume and the 14th by sh
Slide 17: Business Profile and Outlook
Business Profile and Outlook October 2006 17
Slide 18: Universal Music Group
Universal Music Group: Revenues +5.3%** No.1 worldwide in physical sales of recorded music with an estimated global market share of 25.6% 2,202 2,092 No. 3 worldwide in music publishing, before the acquisition of BMG Publishing Operating in 75 countries H1 2005 H1 2006 Largest artist catalog
Slide 19: Universal Music Group: Strategy and Growth Drivers to 2011
Universal Music Group: Strategy and Growth Drivers to 2011 2006-2011 outlook › Rapid growth of digital, online and mobile sales which compensates and beyond the erosion of physical CD’s.… › …Allowing to maintain worldwide market share at a high level › Take advantage of the world’s leading position
Slide 20: Vivendi Games: First Half 2006 Achievements
Vivendi Games: First Half 2006 Achievements Revenues Global developer, publisher and distributor of interactive games +24.4%** 4,893 296 Intellectual property library of over 700 titles 238 World leader in online games with close to 7m paying clients worldwide to one single game, World of Warc
Slide 21: Vivendi Games: Strategy and Growth Drivers to 2011
Vivendi Games : Strategy and Growth Drivers to 2011 2006-2011 outlook › Vivendi Games’ main growth drivers: development of Broadband Internet, growth in Asia, games on mobile › With a leading worldwide position and a steady improvement of its content and geographical development, World of Warcraft w
Slide 22: CANAL+ Group
CANAL+ Group Revenues +10,7% French leader in pay-TV production and distribution in France 1,795 Active presence across all digital distribution platforms 1,622 8.24m subscriptions in France: • 5.0m subscriptions to CANAL+ premium channel H1 2005 H1 2006 • 3.2m subscriptions to CANALSAT packag
Slide 23: CANAL+ Group: Strategy and Growth Drivers to 2011
CANAL+ Group: Strategy and Growth Drivers to 2011 2006-2011 outlook › Growth of pay-TV market with new distribution platforms (ADSL, DTT, mobile) and increased digitization (close to 100% digital subscribers in 2011) › Strengthening of Canal+ Le Bouquet premium offering and broadening of multi-chann
Slide 24: SFR
SFR Revenues 2nd largest mobile telecommunications operator in France +1.7% • 35.5% market share at the end of June 2006 4,301 • 17.4 million customers of which 64.1% are post-paid clients at end-June 2006 4,229 Leader in the 3G market with above 1.5 million customers exclusively registered for
Slide 25: SFR: Strategy and Growth Drivers to 2011
SFR : Strategy and Growth Drivers to 2011 2006-2011 outlook › Management of subscriber base • Low penetration of French market (81%) compared to the rest of Western Europe (98% in average) Benefit from increased penetration in France towards 100%, with a target market share very close to current l
Slide 26: SFR's mobile-centric strategy
SFR’s « mobile-centric » strategy The core of SFR’s offer Option SFR’s existing Happy Zone Internet access mobile offer GSM / 3 G ADSL 2G / 3G / WIFI / WIMAX Voice Internet October, 2006 26
Slide 27: Maroc Telecom: First Half 2006 Achievements
Maroc Telecom: First Half 2006 Achievements Revenues +13.2% 4,893 Morocco’s incumbent telecommunications operator with a leading position based on: 993 877 • A segmented and competitive offering tailored to customers’ needs • An extended distribution network • A modern network infrastructure H1 20
Slide 28: Maroc Telecom: Strategy and Growth Drivers to 2011
Maroc Telecom : Strategy and Growth Drivers to 2011 2006-2011 Outlook › Boost profitable growth on mobile market and consolidate leadership position • Strengthening of penetration and usage of mobile telecommunication services • Launch of innovative services • Roll-out of UMTS network › Intensify co
Slide 29: First Half 2006 Financial Performance
First Half 2006 Financial Performance October 2006 29
Slide 30: All Vivendi's Business Units are Growing and Profitable
All Vivendi’s Business Units are Growing and Profitable On a comparable basis – IFRS H1 2006 Revenues EBITA › Universal Music Group €2,202m + 5.3% €295m + 22.4% › Vivendi Games €296m +24.4% €62m +226.3% › Canal+ Group €1,795m +10.7% €190m - 0.5% › SFR €4,301m + 1.7% €1,389m + 3.7% › Maroc Telecom €9
Slide 31: Consolidated First Half 2006 Statement of Earnings
Consolidated First Half 2006 Statement of Earnings H1 H1 % Reminder In euro million – IFRS – Figures as published 2006 2005 Growth FY 2005 1 Revenues 9,610 9,131 +5.2% 19 484 2 EBITA 2,348 2,121 +10.7% 3 985 EBITA margin rate as a % of Revenues (%) 24.4% 23.2%+1.2 point 20.5% 3 Amortization of intan
Slide 32: Financial Net Debt Evolution at end-June 2006
In euro billion – IFRS Financial Net Debt Evolution at end-June 2006 Acquisitions, Dividends Dividends net of Put options on Cash flow Cash interest, paid to paid to June 30, Estimates Dec. 31, divestitures minority interests from operations tax & other minorities shareholders 2006 Dec. 31, 2006 200
Slide 33: 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 34: Investor Relations Team
Investor Relations Team Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@vivendi.com Paris New York 42, Avenue de Friedland 800 Third avenue 75380 Paris cedex 08 / France New York, NY 10022 / USA Phone: +33.1.71.71.32.80 Phone: +1.212.572.1334 Fax: +33.1.71.7
Slide 35: Important Legal Disclaimer
Important Legal Disclaimer Vivendi is quoted 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 future performance. Actua