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Vivendi — FY2008 Earnings Presentation
49 slides from Vivendi's earnings presentation, March 2009
Slide 1: Investor Presentation
Investor Presentation March 2009 IMPORTANT NOTICE: Financial results for the fiscal year ended December 31, 2008 Financial statements audited and prepared under IFRS Investors are strongly urged to read the important disclaimer at the end of this presentation
Slide 2: A world leader in communications and entertainment
A world leader in communications and entertainment #1 Video Games Worldwide #1 Music Worldwide #2 Telecoms France #1 Telecoms Morocco #1 Pay-TV France IR- March 2009 2
Slide 3: 2008: Guidance achieved, growth in dividend
2008: Guidance achieved, growth in dividend Vivendi maintained and achieved its initial guidance: 2008 result increased 8.4% at constant perimeter, i.e. excluding the impact of Neuf Cegetel and Activision Blizzard Vivendi is proposing a dividend of €1.40 per share to its shareholders, up 7.7% Vivend
Slide 4: 2008 results
2008 results Including Neuf Cegetel and Activision Blizzard Revenues: €25.4 bn +17.2% EBITA: €5.0 bn +4.9% Adjusted Net Income: €2.7 bn -3.4% CFFO: €5.1 bn +3.6% Net Debt: €8.3 bn; At constant perimeter, excluding the impact of Neuf Cegetel and Activision Blizzard EBITA: +9.6% Adjusted Net Income: +
Slide 5: Total projected distribution in May 2009: €1.6bn
Total projected distribution in May 2009: €1.6bn Dividend per share €1.40 €1.30 €1.20 €1.00 €0.60 03 04 05 06 07 08 20 20 20 20 20 20 IR- March 2009 5
Slide 6: All 2008 priorities achieved
All 2008 priorities achieved Successful outcome of bidding process for 9 €135m annual savings football rights new contract by Canal+ Close the merger to create Activision Blizzard 9 July 9, 2008 Close the acquisition of Neuf Cegetel by SFR 9 At 100% since June 24, 2008 Focus on efficient execution o
Slide 7: Vivendi enjoys a strong financial position
Vivendi enjoys a strong financial position €5.2bn of undrawn facilities at the end of 2008 at Vivendi SA Issuance of new bonds for €1.4bn in January 2009 No significant debt reimbursement before 2012 Strong free cash generation by each business A quality rating: BBB stable / Baa2 stable (1) Controll
Slide 8: 2009: Strong growth expected in Vivendi EBITA…
2009: Strong growth expected in Vivendi EBITA… Activision Blizzard: Benefit of synergies, strong slate, and larger World of Warcraft subscriber base UMG: Strong slate, growth of digital sales and new business models SFR ADSL & Fixed: Benefit of synergies, higher ADSL net adds market share Maroc Tele
Slide 9: … despite regulatory and global economic issues
… despite regulatory and global economic issues Activision Blizzard: Accounting impact of deferred revenues UMG: Still fighting piracy and declining physical sales SFR Mobile: New taxes, sharp reduction in mobile termination rates IR- March 2009 9
Slide 10: 2009 Business Outlook
2009 Business Outlook EBITA: Maintain EBITA at 2008 level at constant currency Revenues: Slight growth at constant currency EBITA: Around 10% increase Mobile: Pressure from regulators and new taxes Service Revenues: slight growth EBITDA: slight decrease despite stable opex*, in a continuing competit
Slide 11: Vivendi can rely on unique assets
In context of uncertainty about consumer spending, Vivendi can rely on unique assets Resilience due to subscription model and world-leading quality content and services Leadership position in each of its businesses, enhanced by major strategic initiatives with excellent execution Very strong operati
Slide 12: We have started 2009 with confidence and vigilance
We have started 2009 with confidence and vigilance We are confident in our resilience and expect: Strong EBITA growth Solid earnings leading to another strong dividend, with a distribution rate of at least 50% of Adjusted Net Income We remain vigilant in an unstable environment and committed to: Enh
Slide 13: 2008 Results and 2009 Outlook
2008 Results and 2009 Outlook
Slide 14: Highlights
Highlights Achievements in 2008 Met early 2008 guidance We are proposing an increased dividend of €1.40 (cash or stock, shareholder’s choice) Outlook for 2009 Strong growth of EBITA Solid earnings leading to another high level dividend IR- March 2009 14
Slide 15: We have achieved our constant perimeter 2008 guidance…
We have achieved our constant perimeter 2008 guidance… In euro millions - IFRS 2008 2007 Change Universal Music Group 686 624 +62 Canal+ Group 568 400 +168 SFR Mobile 2,574 2,581 -7 Maroc Telecom Group 1,224 1,091 +133 Blizzard 450 345 +105 Holding / Others (101) (91) -10 EBITA variation at constant
Slide 16: … thanks to strong performances in Q4
… thanks to strong performances in Q4 EBITA In euro millions - IFRS Q4 2008* Q4 2007 Change Universal Music Group 278 289 - 3.8% Canal+ Group (53) (109) + 51.4% SFR 576 451 + 27.7% Maroc Telecom Group 311 240 + 29.6% Activision Blizzard 1 21 - 95.2% Holding / Others (8) (102) + 92.2% Total Vivendi 1
Slide 17: 2008 EBITA
2008 EBITA In euro millions - IFRS Change at constant 2008 * 2007 Change currency Universal Music Group 686 624 + 9.9% + 11.6% Restructuring costs Canal+ Group 568 400 + 42.0% + 41.3% €(123)m SFR 2,542 2,517 + 1.0% + 1.0% Maroc Telecom Group 1,224 1,091 + 12.2% + 13.5% Activision Blizzard 34 181 - 8
Slide 18: Adjusted Net Income
Adjusted Net Income In euro millions - IFRS Change 2008 2007 % 1 Revenues 25,392 21,657 + 3,735 + 17.2% 2 EBITA 4,953 4,721 + 232 + 4.9% Full consolidation of Neuf Cegetel since April 15, 2008 3 Income from equity affiliates 260 373 - 113 - 30.3% 4 Interest (354) (166) - 188 - 113.3% 5 Income from i
Slide 19: Financial net debt evolution
Financial net debt evolution In euro billions - IFRS Dividends Dividends Net financial December 31, CFFO Interest & tax paid to paid to investments December 31, 2007 after Capex paid and other minorities shareholders and other 2008 -1.3 -0.6 -1.5 -5.2 +5.1 Including: SFR: €(237)m Maroc Telecom: €(33
Slide 20: Solid Cash Flow generation
Solid Cash Flow generation CFFO before capex net CFFO 2008 2007 Change In euro millions - IFRS 2008 2007 Change 555 597 - 7.0% Universal Music Group 521 559 - 6.8% 592 460 + 28.7% Canal+ Group 383 317 + 20.8% 4,057 3,571 + 13.6% SFR 2,752 2,551 + 7.9% 1,455 1,364 + 6.7% Maroc Telecom Group 1,037 1,0
Slide 21: Universal Music Group: 2008 revenues and EBITA
2008 Revenues: -0.2%* at €4,650m Increased revenues in publishing and artist services Successful rebalancing of sales: and merchandising offset by a 5% decline in recorded music Full benefit of the integration of BMGP Digital sales up 31% * Integration of Sanctuary and expansion of Bravado Increase
Slide 22: UMG
UMG Top-selling artists Million 2008 Units* Mamma Mia! OST 5.1 Duffy 4.6 Amy Winehouse 4.1 Lil’ Wayne 3.4 % Change at constant Rihanna 3.4 In euro millions 2008 currency Top - 5 Artists 20.6 Physical 2,589 -14.2% Digital 842 35.4% 13% License and Other 448 -3.2% Recorded music 3,879 -4.8% 2009 Relea
Slide 23: Canal+ Group: 2008 revenues and EBITA
2008 Revenues: +4.4% to €4,554m Canal+ France portfolio growth: 173k net adds before an adjustment of 126k* Success of the TPS integration: Other activities, excluding Canal+ France : +14% at €701m €300m synergies over 2007-2008 With ½ season of French Ligue 1 in 2009, the target Growth of advertisi
Slide 24: Canal+ France net portfolio and 2008 highlights
Canal+ France net portfolio (in thousands)* 2008 Highlights StudioCanal ended 2008 with 7 movies exceeding 1 million theatrical admissions in France (out of 18 2008 2007 releases) +173 net additions Subscriptions 10,591 10,544 + 47 before adjustment Premium rights secured: o/w Canal+ 5,265 5,320 of
Slide 25: SFR Mobile and Broadband Internet & Fixed
Mobile: 2008 EBITDA margin of 38.9% in a very competitive market Service Revenues at €8,576m +4.1% before impact of regulated tariffs 2009 outlook: Assuming no further deterioration of economic environment 13.6m of postpaid customers* (+10.5%), at 69.1% of customer base (+3.6pts) Mobile: Pressure fr
Slide 26: Creation of the new SFR
Creation of the new SFR: a strong player in all market segments 2008 Very fast execution of the Neuf Cegetel acquisition leading to 100% ownership, and enabling full benefit of synergies Single brand Reinforced management team An action plan: Focus on operating efficiency, opex control and Different
Slide 27: Mobile
Mobile Market share in postpaid net adds for SFR*: +3 pts 31.6% 31.3% 28.6% Fourth Quarter 2008 : 26.0% 25.3% • Good performance in net adds, 22.3% 23.7% 2007 2008 excellent on postpaid customers... 20.1% • … combined with an increase in EBITDA Q1 Q2 Q3 Q4 SFR ranked first in the quality of mobile t
Slide 28: SFR - Broadband Internet
SFR - Broadband Internet 149,000 net adds in Q4 2008, the highest level ever recorded, 27% market share Very strong increase in broadband net adds since the launch of the neufbox in October Broadband net adds: SFR vs Iliad 149k 137k 141k 100k SFR 92k 93k Iliad 36k 18k Q1 Q2 Q3 Q4 Market share: 13% 2
Slide 29: Maroc Telecom Group: 2008 revenues and EBITA
2008 Revenues: €2,601m Continued increase in customer base: +6.2% at constant currency and constant perimeter* due to the continued growth in the mobile revenues Mobile customers: 17.2m +12.0% Mobile revenues: +8.9% at constant currency and Fixed customers: 1.5m +0.5% constant perimeter Internet cus
Slide 30: Activision Blizzard: 2008 revenues
2008 Revenues: +26% to $5bn on a US non-GAAP comparable basis and €2,091m in IFRS Strong start for Activision Blizzard: Strong performances by the 3 leading owned franchises: The largest and most profitable third-party publisher 2008 results exceeded financial goals for 2009, Guitar Hero and Call of
Slide 31: 2009 Releases and segment performance
US Non-GAAP comparable basis segment performance* In dollars millions 2008 % Change Activision 3,279 32.6% Blizzard 1,343 21.3% IFRS Actual Distribution 410 0.5% Net revenues of core operations 5,032 26.2% % Change at constant Activision 469 14.1% In euro millions 2008 currency Blizzard 704 23.9% Ac
Slide 32: Appendices
vivendi Appendices
Slide 33: Vivendi Businesses
Vivendi Businesses 100% 100%/65% 56% #1 in pay-TV in France #2 Telco in France #1 Worldwide in music 53% 54%* 20%* #1 Telco in Morocco #1 worldwide in A worldwide leader in video games entertainment * Based on shares outstanding IR- March 2009 33
Slide 34: No significant debt reimbursement before 2012
Important credit lines up to 2011 No significant debt reimbursement before 2012 Amount of bank credit lines Vivendi 7.5 At 2008 year end, the economic average term of the group’s SFR consolidated debt was 4.1 years 6.0 6.0 5.0 After issuance of €1.4bn bonds in January 2009, 57% of outstanding gross
Slide 35: SFR. Et le monde est à vous.
2008 2007 Change MOBILE Customers (in ‘000) * 19,652 18,766 + 4.7% SFR. Et le monde est à vous. Proportion of postpaid clients * 69.1% 65.5% +3.6pts 3G customers (in ‘000) * 5,934 4,082 + 45.4% Success of Illimythics offers: 1.4m customers Market share on customer base (%) * 33.8% 33.9% -0.1pt at th
Slide 36: SFR: Detailed revenues
SFR: Detailed revenues IFRS 2008 2007 % 2007 % Change on a Comparable in euro millions Actual Actual* Change Comparable Basis** Basis ** Outgoing revenues net of promotions 6,953 81% 6,771 81% 2.7% 6,803 81% 2.2% Mobile incoming 897 10% 844 10% 6.3% 844 10% Fixed incoming revenues 393 5% 426 5% -7.7
Slide 37: Maroc Telecom Group
Maroc Telecom Group Constant In ‘000 2008 2007 Change In euro millions - IFRS 2008 2007 Growth currency Revenues 2,601 2,456 + 5.9% + 7.0% MAROC TELECOM SA Mobile 1,864 1,721 + 8.3% + 9.5% Number of mobile customers 14,456 13,327 + 8.5% Fixed and Internet 1,000 989 + 1.1% + 2.2% % Prepaid customers
Slide 38: Revenues
Revenues Change at Change at constant In euro millions - IFRS constant 2008 2007 Change currency Q4 2008 Q4 2007 Change currency 4,650 4,870 - 4.5% - 0.2% Universal Music Group 1,508 1,605 - 6.0% - 7.8% 4,554 4,363 + 4.4% + 4.0% Canal+ Group 1,163 1,132 + 2.7% + 2.8% 11,553 9,018 + 28.1% + 28.1% SFR
Slide 39: Income from equity affiliates
Income from equity affiliates In euro millions (except where noted) IFRS 2008 2007 % Growth Income from equity affiliates 260 373 - 30.3% o/w NBC Universal in € 255 301 - 15.3% NBC Universal in $ $375 $410 - 8.5% o/w Neuf Cegetel* 18 78 - 76.9% * Neuf Cegetel has been fully consolidated since April
Slide 40: Interest
Interest In euro millions (except where noted) - IFRS 2008 2007 Interest (354) (166) Interest expense on borrowings (450) (301) Average interest rate on borrowings (%) 4.69% # 4.18% Average outstanding borrowings (in euro billions) 9.6 7.2 Capitalization of interest related to the acquisition of BMG
Slide 41: Income tax
Income tax In euro millions - IFRS 2008 2007 Adjusted Net Adjusted Net net income income net income income Consolidated Global Profit Tax System 438 60 * 552 605 Current tax: savings for current year 438 438 552 552 Deferred tax: variation in expected savings (year n+1/ year n) - (378) * - 53 Tax ch
Slide 42: Reconciliation of adjusted net income to net income
Reconciliation of adjusted net income to net income In euro millions - IFRS 2008 2007 Adjusted Net Income 2,735 2,832 Amortization and impairment losses of intangible assets acquired through (693) (335) business combinations Other financial charges and income 579 (83) - o/w consolidation gain follow
Slide 43: Active management of pension obligations
Active management of pension obligations Transfer of funded pension plans to insurance companies (mainly North America, United Kingdom) Very cautious policy to secure the pension plan assets, limiting exposure to financial markets In euro millions 2008 2007 2006 2005 2004 Benefit obligations 482 780
Slide 44: Activision Blizzard - Reconciliation to 2008 IFRS Revenues
Activision Blizzard - Reconciliation to 2008 IFRS Revenues In millions 2008 Comparable Basis Net Revenues of Core Operations (a) $5,032 Less: Activ ision operations prior to July 10, 2008 -$1,310 US GAAP Basis Non-GAAP Net Revenues of Core Operations $3,722 Less: Changes in deferred net rev enues (b
Slide 45: Activision Blizzard - Reconciliation to 2008 IFRS EBITA
Activision Blizzard - Reconciliation to 2008 IFRS EBITA In millions 2008 Comparable basis Operating Income/(Loss) of Core Operations (a) $1,200 Less: Activ ision - operating income generated prior to July 10, 2008 -$167 Non-GAAP Operating Income/(Loss) of Core Operations $1,033 US GAAP Basis Less: N
Slide 46: 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 com
Slide 47: Activision Blizzard – standalone - definitions
Activision Blizzard – standalone - definitions 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 US GAAP) and excluding (US Non-GAAP): the impact of the cha
Slide 48: Investor Relations team
Investor Relations team Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.14.70 [email protected] 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: +33.1.71.71.14.16 Phone: +1.212.5
Slide 49: Important legal disclaimer
Important legal disclaimer This presentation contains forward-looking statements with respect to the financial condition, results of operations, business, strategy and plans of Vivendi. Although Vivendi believes that such forward-looking statements are based on reasonable assumptions, such statement