Vivendi (VIVDY.PK)

H1 2012 Earnings Call

August 30, 2012 3:00 am ET

Executives

Jean-Michel Bonamy - Executive Vice President of Investor Relations

Jean-François Dubos - Chairman of the Management Board and Chief Executive Officer

Stéphane Roussel - Chairman of SFR and Chief Executive Officer of SFR

Philippe G. H. Capron - Chief Financial Officer and Member of the Management Board

Julien Verley - Chief Financial Officer

Philippe G. H. Capron - Chief Financial Officer and Member of Management Board

Laurent Mairot

Analysts

Conor O'Shea - Kepler Capital Markets, Research Division

Filippo Pietro Lo Franco - JP Morgan Chase & Co, Research Division

Omar Sheikh - Crédit Suisse AG, Research Division

Jean-Michel Koster - CM-CIC Securities, Research Division

Claudio Aspesi - Sanford C. Bernstein & Co., LLC., Research Division

Matthew Walker - Nomura Securities Co. Ltd., Research Division

Julien Roch - Barclays Capital, Research Division

Polo Tang - UBS Investment Bank, Research Division

Charles Bedouelle - Exane BNP Paribas, Research Division

Presentation

Jean-Michel Bonamy

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Good morning, ladies and gentlemen. Welcome, and thank you for joining us today for Vivendi's First Half 2012 Earnings Meeting. With me today are Jean-François Dubos, Chairman of the Management Board and CEO; Stéphane Roussel, Chairman and CEO of SFR; and Philippe Capron, Member of the Management Board and CFO.

This presentation will be in English with a simultaneous translation, and it is webcast on vivendi.com where the slides are available for download. You will be able to access a replay of this call for 15 days, also on our website.

I invite you to read the important legal disclaimer at the end of this presentation on Page 50. The first half 2012 financial report and consolidated financial statements will be available on our website later this afternoon. And as usual, this presentation will be followed by a Q&A session.

And now, I would like to introduce our CEO, Jean-François Dubos. Thank you.

Jean-François Dubos

Good morning, ladies and gentlemen. Welcome to the Vivendi half year results. It's a pleasure for me to be up here in front of you and present along with Philippe Capron, our numbers for the first half 2012. We will also have a presentation from Stéphane Roussel, Chairman and CEO of SFR, of their plans for that business, as well as representatives from our other business units to answer your questions after our presentations.

I'm sure you have many questions on our strategy or on what the company will look like in a few months or years. However, I'm probably doing -- going to disappoint you by saying that the aim of today is just to focus on results and give you some idea of how we see the end of the year, nothing else. Sorry for that.

The strategic review is underway, and we are working hard. But these matters take time, and there will be no overnight solution to -- or quick fix. There is no reason for that. We are not in 2002. The board will review our recommendations on a regular basis at predefined dates. For instance, 3 usual meetings are programmed between now and the next year annual results. So we will go at our own neat speed, and we will announce, of course, any movement when appropriate.

Today, earnings. Our earnings for H1 can be described as solid, confirming guidance on adjusted net income and net debt. As you can see on the slide coming, we are work -- we have worked hard on stabilizing SFR and managing the ongoing regulatory processes, which are numerous and heavy this year. Our focus are both management and supervisory board -- at both management and supervisory board level is shareholder value creation and growth in earnings per share, and we are totally committed to maintaining a quality credit rating.

Here are the numbers as released this morning. I suppose you know them already. We are happy to be able to confirm our 2012 year -- full year guidance.

I mentioned earlier the different regulatory processes. This slide illustrates clearly where we are on each projects. For the EMI acquisition, we are confident and expect approval within a few weeks. Concerning the DirecTV channels, we already have the antitrust approval, as you know probably. We're already -- and we again expect CSA approval in September. And last but not least, the Polish merger should also fall in the last quarter.

On litigations. Canal+ and Vivendi are currently challenging the French Competition Authority's decision from 2011 and 2012, as you can read on this slide. In addition, last June, in New York, a jury ordered Vivendi to pay EUR 665 million (sic) [EUR 765 million] to Liberty Media. This is an old case dating back from 2002, 10 years. At this stage, no reserve has been set up in the accounts. In both cases, we will continue to defend Vivendi's interest vigorously.

To sum up, I want to repeat what I said earlier. Earnings are in line, they are solid, and we are confirming full year guidance. We have 2 priorities: Shareholder value creation and adjusted EPS growth, maintaining a quality credit rating. The benefits of both our recent planned acquisitions and the SFR adaptation plan will come in longer term.

Ladies and gentlemen, thank you for your attention. And now, I will hand over to Stéphane Roussel.

Stéphane Roussel

Thank you, Jean-François. Good morning, ladies and gentlemen. I'm very pleased to comment on SFR results and plans today. It will give me the opportunity to show you that SFR is strongly motivated, tackled the challenge in front of us. SFR has rapidly reacted deep on fast-moving developments in the French telecoms market, evolving market segmentation with growth of low-cost offer in addition to full-service offer, decreased in market value due to strong pressure on prices and digitalization of the customer relationship.

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