Vivendi Se · EURONEXT:VIV
Vivendi — FY2016 Earnings Presentation
43 slides from Vivendi's earnings presentation, Feb 23, 2017
Slide 1: Full Year 2016 Results
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 Feb. 23, 2017 FULL YEAR 2016 RESULTS IMPORTANT NOTICE: Financial results for the fiscal year ended December 31, 2016 Financial statements audited and prepared under IFRS Investors are strongly urged to read the important disclaimer at the end
Slide 2: Strategic Update
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 ARNAUD DE PUYFONTAINE Chairman of the Management Board Chief Executive Officer STRATEGIC UPDATE
Slide 3: Vivendi is building a global content and media group
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 STRATEGY Vivendi is building a global content and media group The media industry is one of the most attractive industries of the 3rd millennium ■ More consumers World’s middle class: +2bn people by 2025 in Africa, Asia and Latin America, who
Slide 4: Vivendi already owns very powerful assets in this industry
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 STRATEGY Vivendi already owns very powerful assets in this industry, which are now being brought together and reinforced to collectively generate more value. 4
Slide 5: Strategy: Group assets and leading positions
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 STRATEGY The Group's assets include the four main categories of content consumed worldwide: Music Video games Films/series Streaming/live programs The Group enjoys and is building leading positions in the three most dynamic segmen
Slide 6: Vivendi's Growth Engines: Creation
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 VIVENDI’S GROWTH ENGINES 1 CREATION Vivendi is developing all together strong assets in three of the most dynamic segments of the creative industry Games Audiovisual Music 6
Slide 7: Vivendi's Growth Engines: Distribution
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 VIVENDI’S GROWTH ENGINES 2 DISTRIBUTION Expanding distribution is key to reaching scale in order to invest in and maximize the value of content ■ In-house distribution Canal+ Digital platform: Dailymotion ■ Partnerships to build scale W
Slide 8: Lead shareholder gives long-term stability
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 STRATEGY Vivendi is able to pursue this ambitious strategy thanks to its lead shareholder, the Bolloré family Group (29% of voting rights in April 2017), which gives it the necessary long-term stability. 8
Slide 9: Music: Fast Changing Industry
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 MUSIC: FAST CHANGING INDUSTRY Music business model is quickly shifting to streaming Consumers are now willing to pay for music Number of subscribers to paid music services is increasing rapidly 106 68 41 28 20 2012 2013 2014 2015 2016 P
Slide 10: Music: Fast Changing Industry - UMG leading the transition
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 MUSIC: FAST CHANGING INDUSTRY UMG is leading the transition Wide distribution of UMG content Agreements with 400+ platforms Continuous investment in artists Investing in emerging markets Investment in local artists Partnering with
Slide 11: Games
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 GAMES Vivendi is committed to the Games industry, which is fully in line with its strategy Games industry: already a $100bn* industry Mobile gaming: a fast-growing worldwide industry benefiting from an increasing use of smartphones and gr
Slide 12: Audiovisual
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 AUDIOVISUAL One of the leading audiovisual companies in Europe with Studiocanal Vivendi and its subsidiaries are investing in all forms of audiovisual content Films Series Unscripted Short formats Vivendi’s productions are well
Slide 13: TV Distribution
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 TV DISTRIBUTION Canal’s international development is bearing fruit Africa Fast growing territory for Canal with almost 2.8m individual subscribers at end-2016 Poland Stabilization of the subscriber base in 2016 for the first time sinc
Slide 14: TV Distribution in France: Transformation Plan Implemented
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 TV DISTRIBUTION IN FRANCE: TRANSFORMATION PLAN IMPLEMENTED New offers 1) Basic package ESSENTIEL: ESSENTIEL FAMILLE: OR + More than 50 channels 2) Thematic options LES CHAÎNES CINE SERIES: LES CHAÎNES SPORT: LES CHAÎNES CANAL: + 2nd screen
Slide 15: Strong and Long-Term Partnerships in Distribution
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 TO BUILD SCALE, STRONG AND LONG-TERM PARTNERSHIPS IN DISTRIBUTION ■ Solid partnerships with Telcos, to be strong locally ■ Shareholding in Telecom Italia ■ Strategic partnerships with Free and Orange for the wholesale distribution of Canal pa
Slide 16: Achievements
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 ACHIEVEMENTS ■ Journey started in June 2014: we have set the foundations for achieving our ambition Strengthening our foundations: UMG: leading the transition of the music industry Canal+ group: transforming its activities in France, buil
Slide 17: Outlook
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 OUTLOOK ■ In 2017, revenues should increase by more than 5% and, thanks to the measures taken in 2016, EBITA should increase by around 25%. 17
Slide 18: Financials
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 HERVE PHILIPPE Member of the Management Board Chief Financial Officer FINANCIALS
Slide 19: Scope of Consolidation and Main Currencies
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 SCOPE OF CONSOLIDATION AND MAIN CURRENCIES In compliance with IFRS 5, GVT qualifies as a discontinued operation from Q3 2014, hence its earnings are reported as “Earnings from discontinued operations”. This classification retrospectively appl
Slide 20: FY 2016 Key Financial Metrics
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 FY 2016 KEY FINANCIAL METRICS % Underlying change* % Change YoY YoY Revenues: € 10,819 m + 0.5 % - 0.2 % IFRS EBIT: € 1,194 m - 2.9 % Net Income**: € 1,256 m - 35,0 % Net Income from continuing operations**: € 1,236 m + 77.0 % Non-GAA
Slide 21: Highlights: UMG
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 Constant In euro millions - IFRS 2015 2016 Change perimeter and HIGHLIGHTS currency * Revenues 5,108 5,267 + 3.1% + 4.4% ■ Recorded music revenues were up 3.3%* in 2016, Recorded music 4,113 4,188 + 1.8% + 2.9% excluding the OTIs**, driven by
Slide 22: Highlights: Canal+ Group
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 Constant In euro millions - IFRS 2015 2016 Change perimeter and HIGHLIGHTS currency * Revenues 5,513 5,253 - 4.7% - 4.2% ■ Revenues down 4.2%*: Pay-TV Mainland France 3,383 3,178 - 6.1% - 6.1% ■ Pay-TV revenues decreased in mainland France du
Slide 23: Highlights: Gameloft
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 Constant In euro millions - IFRS 2015 2016 * Change perimeter and HIGHLIGHTS currency ** Revenues - 132 ■ Gameloft consolidated since June 29, 2016. o/w Advertising revenues - 11 ■ In 2016, Gameloft released 4 new games: Disney Magic Kingdoms
Slide 24: Highlights: Vivendi Village, New Initiatives, Corporate
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 VIVENDI VILLAGE Constant HIGHLIGHTS In euro millions - IFRS 2015 2016 Change perimeter and currency * Vivendi Village Revenues 100 111 + 10.9% + 3.8% . ■ Revenues were up 3.8%*, mainly due to the good Income from operations 10 (7) performance
Slide 25: Consolidated P&L
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 CONSOLIDATED P&L In euro millions - IFRS 2015 2016 % Revenues 10,762 10,819 + 0.5% Cost of revenues (6,555) (6,829) Selling, general and administrative expenses excluding amortization (3,163) (3,172) of intangible assets acquired through busi
Slide 26: Adjusted P&L
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 ADJUSTED P&L Constant perimeter In euro millions - IFRS 2015 2016 Change % and constant currency* Revenues 10,762 10,819 + 57 + 0.5% - 0.2% Income from operations 1,061 853 - 208 - 19.6% - 18.5% Income from operations margin 9.9% 7.9% - 2.0pt
Slide 27: Consolidated Balance Sheet
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 CONSOLIDATED BALANCE SHEET In euro millions December 31, December 31, December 31, December 31, Assets Equity and Liabilities 2015 2016 2015 2016 Goodwill 10,177 10,987 Consolidated equity * 21,086 19,612 Intangible and tangible assets 4,335
Slide 28: Cash Flow from Operations (CFFO)
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 CASH FLOW FROM OPERATIONS (CFFO) CFFO before capex, net CFFO 2015 2016 Change In euro millions 2015 2016 Change 620 712 + 15.0% Universal Music Group 567 663 + 17.0% 653 394 - 39.8% Canal+ Group 472 244 - 48.3% - 18 na Gameloft - 14 na (3) (1
Slide 29: Net Cash at End-December 2016
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 NET CASH AT END-DECEMBER 2016 In euro billions Disposals and Net Cash Dividends to Vivendi Interest, taxes paid decreases in financial Acquisitions and Net Cash Dec. 31, 2015 SA shareholders Share buybacks CFFO and other assets investments De
Slide 30: Outlook
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 OUTLOOK ■ In 2017, revenues should increase by more than 5% and, thanks to the measures taken in 2016, EBITA should increase by around 25%. 30
Slide 31: Appendices
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 APPENDICES Details of Business Operations: slides 32-34 Detailed Vivendi Financial Results: slides 36-40 Glossary and Disclaimers: slides 42-43
Slide 32: UMG
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 UMG Constant Recorded Music Revenues 2015 2016 perimeter and In euro millions - IFRS 2016 Europe 38% 35% constant North America 42% 43% currency * Asia 11% 13% Recorded music 4,188 + 2.9% Latin America 3% 3% Physical sales 1,225 - 14.9% Rest
Slide 33: Canal+ Group
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 CANAL+ GROUP December 31, December 31, Constant In '000 Change 2015 2016 Revenues perimeter 2015 2016 Individual subscribers 11,241 14,429 + 3,188 In euro millions - IFRS and Mainland France 5,746 8,182 + 2,436 currency * Retail subscribers 5
Slide 34: Gameloft
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 GAMELOFT Revenue by geographies 2015*** 2016*** UPCOMING RELEASES* EMEA 30% 33% North America 25% 25% Gangstar New Orleans™ Asia Pacific 30% 29% Genre: Open world action Latin America 15% 13% game Release: Q1 2017 Average active users on 2015
Slide 35: Appendices: Detailed Vivendi Financial Results
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 APPENDICES Detailed Vivendi Financial Results
Slide 36: Revenues / EBITDA / EBITA
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 REVENUES / EBITDA / EBITA Constant Constant Constant Revenues Constant Q4 2015 Q4 2016 Change perimeter and 2015 2016 Change perimeter and currency In euro millions - IFRS currency currency * currency * 1,616 1,644 + 1.7% + 3.4% + 3.4% Univer
Slide 37: Revenues / Income from Operations / EBITA
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 REVENUES / INCOME FROM OPERATIONS / EBITA Constant Constant Constant Revenues Constant Q4 2015 Q4 2016 Change perimeter and 2015 2016 Change perimeter and currency In euro millions - IFRS currency currency * currency * 1,616 1,644 + 1.7% + 3.
Slide 38: Interest & Income Tax
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 INTEREST & INCOME TAX In euro millions (except where noted) – IFRS 2015 2016 Interest (30) (40) Interest expense on borrowings (65) (63) Average interest rate on borrowings (%) 2.91% 2.12% Average outstanding borrowings (in euro billions) 2.2
Slide 39: Reconciliation of Earnings to Adjusted Net Income
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 RECONCILIATION OF EARNINGS ATTRIBUTABLE TO VIVENDI SA SHAREOWNERS TO ADJUSTED NET INCOME In euro millions - IFRS 2015 2016 Earnings attributable to Vivendi SA shareowners (*) 1,932 1,256 Amortization and depreciation of intangible assets acqu
Slide 40: Reconciliation of EBIT to Income from Operations
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 RECONCILIATION OF EBIT TO INCOME FROM OPERATIONS In euro millions - IFRS 2015 2016 EBIT 1,231 1,194 Amortization and depreciation of intangible assets acquired through business 411 246 combinations Other income & charges (700) (716) EBITA 942
Slide 41: Appendices: Glossary & Disclaimer
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 APPENDICES Glossary & Disclaimer
Slide 42: Glossary
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 GLOSSARY The non-GAAP measures defined below should be considered in addition to, and not as a substitute for, other GAAP measures of operating and financial performance and Vivendi considers this to be relevant indicators of the group’s oper
Slide 43: Important Legal Disclaimer / Contacts
F Y 2 0 1 6 R e s u l t s – F e b r u a r y 2 3 , 2 0 1 7 IMPORTANT LEGAL DISCLAIMER / CONTACTS Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements with respect to Vivendi's financial condition, results of operations, business, strategy, plans,