the premium reviewthe premium review sociétégénérale conference paris, december 2, 2005 2...
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TheThe Premium Premium ReviewReviewSociSociééttéé GGéénnéérale rale conferenceconference
Paris, Paris, DecemberDecember 2, 20052, 2005
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DisclaimerForward-looking statements
� This presentation contains certain forward-looking statements, with respect with the Group’s financial condition, results of operations and business, and management’s strategy, plans and objectives for the Group. These statements include, without limitation, those thatexpress forecasts, expectations ans projections with regard to the potential of growth of e-commerce market and customers, broadband subscribers, revenues and profitability growth, and multi-channel development.
� These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks, uncertainties and otherfactors, some of which are beyond the Group’s control, are difficult to predict and couldcause actual results to differ materially from those expressed or implied or forecast in theforward-looking statements.
� All forward-looking statements in this document are based on information known to theGroup on the date hereof. The Group undertakes no obligation publicly to update or reviseany forward-looking statement, whether as a result of new information, future events or otherwise.
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FreeFreeFreeFree----totototo----AirAirAirAirTelevisionTelevisionTelevisionTelevision
M6 group overview
DiversificationDiversificationDiversificationDiversificationPayPayPayPay TV TV TV TV andandandand
thematicthematicthematicthematic channelschannelschannelschannels
ProgrammingProgrammingProgrammingProgramming
Audiences Audiences Audiences Audiences andandandandratingsratingsratingsratings
AdvertisingAdvertisingAdvertisingAdvertising trendstrendstrendstrendsandandandand changeschangeschangeschanges
Key
Key
Key
Key facts
facts
facts
facts
StrengthStrengthStrengthStrength ofofofof thethethethe brandbrandbrandbrand
New sources New sources New sources New sources ofofofof growthgrowthgrowthgrowth
New sources New sources New sources New sources ofofofof profitsprofitsprofitsprofits
RollRollRollRoll----outoutoutout ofofofof DTTDTTDTTDTT
Change in Change in Change in Change in competitivecompetitivecompetitivecompetitiveenvironmentenvironmentenvironmentenvironment
Change in Change in Change in Change in technologytechnologytechnologytechnology
Free-to-Air
5
M6 FTA strategy
Short Short Short Short –––– termtermtermterm environmentenvironmentenvironmentenvironment Long Long Long Long –––– termtermtermterm outlookoutlookoutlookoutlook andandandand opportunitiesopportunitiesopportunitiesopportunities
� Bearish economic environment andweakness of consumer spending
� Regulatory changes for FMCG & Foodsector advertisers (Bercy agreements, Galland law, anti-obesity law)
� Opening of TV advertising to retail from 1st january 2007
� Modification of European Directive « Television without Frontier » : deregulation of advertising limitations
� Continuous increase of TV consumption
� French TV ad. Expenditures still beloweuropean average
M6 M6 M6 M6 strategystrategystrategystrategy : : : : thethethethe virtuousvirtuousvirtuousvirtuous circlecirclecirclecircle ofofofof powerpowerpowerpower
� Programming to reinforce M6 as a generalist channel and propose more powerful ad. breaks
� Attract new advertisers and increase the brand coverage
� Discount / GRP as a competitive edge
� Positive price effect allowing growth even when volumes don’t sustain the market
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M6 programming strategytowards a generalist channel
Next to come in 2006
A family orientatedprogramming
ExclusivityTop series
Innovation Coaching, humour
EventsBlockbusters,
sports
PowerInformation, entertainment
Gathering anenlarged audience
Reinforcing the status of a generalist channnel
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20.6
15.2
11.1
3.0
31.9
12.4
3.8
11.9
3.1
12.7
3.6
14.6
19.8
32.4
0
5
10
15
20
25
30
35
402004 2005
-0.8 +0.8
+0.1
-0.6 +0.3+0.5
-0.2
Source : Mediamat – Mediamétrie /Weeks 1 to 46 in 2005 / Weeks 1 to 47 in 2004
M6 ratings keep improving
35.5
17.2
11.3
3.62.7
9.7
18.6
36.1
16.3
10.2
3.3
19.3
3.0
10.5
0
5
10
15
20
25
30
35
40
2004 2005
-0.9 -1.1
-0.3 +0.7 +0.3
+0.8+0.6
M6 gains M6 gains M6 gains M6 gains 0.3 pt on + 4 0.3 pt on + 4 0.3 pt on + 4 0.3 pt on + 4 yyyy----oooo individualsindividualsindividualsindividuals
M6 gains 0.7 pt M6 gains 0.7 pt M6 gains 0.7 pt M6 gains 0.7 pt on on on on HousewivesHousewivesHousewivesHousewives < 50 < 50 < 50 < 50 yyyy----oooo, , , , postingpostingpostingposting thethethethe bestbestbestbest increaseincreaseincreaseincrease
ofofofof allallallall networksnetworksnetworksnetworks
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More powerful eveningsMore powerful advertising breaks
NumberNumberNumberNumber ofofofof Prime Times Prime Times Prime Times Prime Times overoveroverover 5.0 million 5.0 million 5.0 million 5.0 million viewersviewersviewersviewers
14141414
24242424
17171717
YTD 2004YTD 2004YTD 2004YTD 2004 YTD 2005YTD 2005YTD 2005YTD 2005 Tota l 2004Tota l 2004Tota l 2004Tota l 2004
1 prime time out of 4 gathers more than 4 million viewers
NumberNumberNumberNumber ofofofof Prime Times Prime Times Prime Times Prime Times overoveroverover 4.0 million 4.0 million 4.0 million 4.0 million viewersviewersviewersviewers
56565656
81818181
66666666
YTD 2004YTD 2004YTD 2004YTD 2004 YTD 2005YTD 2005YTD 2005YTD 2005 Tota l 2004Tota l 2004Tota l 2004Tota l 2004
2222
22222222
Number of slots > 14 GRP on Housewives < 50 y-o
M6 has proposed 22 advertising slots over14 GRP on Housewives < 50 y-o in 2005
(weeks 1 to 46)
2004 2005
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M6’s advertising environment
+1.7%
Source: M6, TNS MI
M6 gross advertising revenues changeH1 2005 versus H1 2004
+6.2%
Rate effect
Volume effect
-4.2%
Increased average ad rates for
Increased ad market share for
22.1% 23.1%
January – November 2004 January – November 2005
+ 1 pt+ 1 pt+ 1 pt+ 1 pt
Diversification
Distance Selling : an innovative « e & t –commerce » combination
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French e-Commerce a fast-growing market
1.42.3
3.65.5
10
12.9 15.6
24.7
20.4
15.8
10.2
7.35.3
4.2
10.5
0.61.6
3.5
6.58.3
9.5
2001 2002 2003 2004 2005e 2006e 2007e
Customers of e-Commerce
(in million)
BtoC e-Commerce market
(in billion €)
Broadband subscribers
(In million)
Source : Acsel, FEVAD, ARCEP, M6 estimates
� e-Commerce is a fast-growing market, driven by
� Increasing number of broadband subscribers,
� Change in buying habits, increased confidence in e-commerce transactions
� In France, 1 web user out of 2, i.e 12 million people, has alreday made a purchase on Internet (H1 2005)
� Market size of BtoC should increase from 5.5 bn € in 2004 to 10 bn € in 2005
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Mistergooddeal.coma Top 10 e-Commerce player
Key facts on Mistergooddeal.com
� BtoC website, leader in discount on best name-brands from excess inventory
� More than 6000 references in electronic household appliances, electronics, computers, telephones, gardening,…
� 100 000 to 150 000 daily unique audience
� Launched in 2000, profitable since 2003
� Know-how and professionalism in purchase, logistics, customer service
�High growth trends : +45 % in sales for 2005e
Top 10 of BtoC e-commerce websitesSource : FEVAD – Mediametrie//Netratings – August
2005
Rank BrandUnique audience
(000)
Penetration rate
(%)
Unique audience growth
vs. August 2004 (%)
1 eBay 4,949 26.58 30.1%
2 Fnac 3,896 20.92 54.4%
3 Cdiscount.com 3,511 18.85 12.3%
4 Alapage 2,923 15.7 73.7%
5 La Redoute 2,790 14.98 124.8%
6 Amazon 2,766 14.86 55.2%
7 PriceMinister 2,442 13.12 62.4%
8 Rue du Commerce 1,521 8.17 18.6%
9 Camif 1,491 8.01 n.d
10 Mistergooddeal 1,474 7.92 123.3%
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HSS and Mistergooddeal.com
88.988.988.988.9 92.592.592.592.5111.4111.4111.4111.4
2002200220022002 2003200320032003 2004200420042004 2005200520052005eeee
on FY on FY on FY on FY consolidation basis consolidation basis consolidation basis consolidation basis
(pro forma)(pro forma)(pro forma)(pro forma)
2006e2006e2006e2006e
13.413.413.413.4
26.126.126.126.1
45.045.045.045.0
102.3 M102.3 M102.3 M102.3 M€
118.6 M118.6 M118.6 M118.6 M€
156.3 M156.3 M156.3 M156.3 M€
~178 M~178 M~178 M~178 M€> 200 M> 200 M> 200 M> 200 M€
CAGR 2002CAGR 2002CAGR 2002CAGR 2002----2004 : 2004 : 2004 : 2004 :
+ 5.8 %+ 5.8 %+ 5.8 %+ 5.8 %(on a constant (on a constant (on a constant (on a constant
scope)scope)scope)scope)
CAGR 2002CAGR 2002CAGR 2002CAGR 2002----2004 : 2004 : 2004 : 2004 :
+ 83.1 %+ 83.1 %+ 83.1 %+ 83.1 %
~+ 14 %~+ 14 %~+ 14 %~+ 14 %
> + 12 %> + 12 %> + 12 %> + 12 %
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Consumer products
ProductsProductsProductsProducts offerofferofferoffer
Business ModelBusiness ModelBusiness ModelBusiness Model B to C
Distribution Distribution Distribution Distribution channelschannelschannelschannels
TargetsTargetsTargetsTargets
4Discounted products
4Name-Brand products
4Innovative products
4Mainly no brands
Same business, complementary products, distribution channels and targets
4Television
4Catalogues
4Internet and Mobile
420 - 40 years old4Housewives under 50 y-o
4Internet
A A A A realrealrealreal multi multi multi multi channelchannelchannelchanneldistribution distribution distribution distribution playerplayerplayerplayer
ComplementaryComplementaryComplementaryComplementaryproductsproductsproductsproducts
ComplementaryComplementaryComplementaryComplementarytargetstargetstargetstargets
KnowKnowKnowKnow----how & how & how & how & experienceexperienceexperienceexperience
M6 Mobile
17
0
200e
142
june-05 july-05 aug-05 sept.-05 oct.-05 nov.-05 dec.-05
M6 Mobile : Initial targets achieved, a commercial success
Trend of M6 Mobile sales (in ‘000 units)
Sales Sales Sales Sales achievedachievedachievedachieved
Initial Initial Initial Initial targettargettargettarget
100100100100
Launch of a new offer
As As As As ofofofof 22 22 22 22 ofofofof NovNovNovNov’’’’
Subscribers target for 2005 :Initial target: 100 000 subs by the end of DecemberNew target : 200 000 subs
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M6 Mobile : a dedicated product offer
M6 Mobile by Orange : reinforcement of the product offer
�First offer� Launched on the 11 of June 2005
� New offer launched on the 15th of November� Creation of a line-up of contracts
� Increased content (unlimited access to M6 Music Hits)
� A wide choice of handsets with video access
� New channels of distribution
19,90 € / month
Up to 45 minutesor
200 sms
24/7
Up to 1H30
or
290 sms
24/7
Unlimited calls from 8:45 to 00:00 pm
to all Orange et M6 mobile subs’
28,90 € / month
Digital and Pay TV
Focus on DTT
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DTT penetration & coverage
Source: GFK, 800 sales point
7.0
185.0
333.5
402.5440.9
478.0515.1
582.8
753.2
827.0
1000.0
fev. mar. avr. mai juin juil. août sept. oct. nov. dec.
Launch of Free DTT 31st of March 2005
Total sales of Mpeg-2 set-top boxes (in thd)
As of 13 of Nov’
1st sept 2005
50%
65%
Coverage area
June 2006
Next Step
� LaunchLaunchLaunchLaunch ofofofof freefreefreefree DTT : 31st DTT : 31st DTT : 31st DTT : 31st ofofofof March, 2005March, 2005March, 2005March, 2005
� TheTheTheThe goal goal goal goal ofofofof 1 million 1 million 1 million 1 million setsetsetset----toptoptoptop boxes boxes boxes boxes isisisis likelylikelylikelylikely to to to to bebebebereachedreachedreachedreached atatatat thethethethe endendendend ofofofof 2005200520052005
� LaunchLaunchLaunchLaunch ofofofof new new new new freefreefreefree channelschannelschannelschannels fromfromfromfrom SeptSeptSeptSept’’’’2005200520052005
� LaunchLaunchLaunchLaunch ofofofof PayPayPayPay DTT DTT DTT DTT endendendend ofofofof 2005 2005 2005 2005 ---- beginningbeginningbeginningbeginning ofofofof2006200620062006
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� Cable and DTH channels
� Pay channels to beproposed�21 Nov: launch of Canal+ offer
�January 2006 : launch ofTPS offer
Landscape of DTT channel as of Nov’2005
�Existing national analogue channels
�Former cable or DTH channels
� New free channels
�14 October: � Former cable & DTH
channel
�17 October:� New channel
�18 November: � New channel
�28 November : � New channel
Channels launched on DTT on March 2005
Free channels launchedafter September 2005
Pay channels to be launched
ex
23
0
4 000
8 000
12 000
16 000
20 000
2 004 2 005 2 006 2 007 2 008 2 009 2 010
Free terrestrial
Pay terrestrial
Free DSL
Pay DSL
Cable
DTH
Thd subs
16%
6%
17%
10%
29%
22%
100 channels
~30-40 channels
~20 channels
~10-15 channels
Changes in french multi-channels environmentOutlook 2004-2010
� A multi-channel market driven by DSL and DTT
� A growth mainly sustained by free offers
� End of 2010, W9 will be initialised on 17 million of households
Outlook Outlook Outlook Outlook ofofofof DSL DSL DSL DSL andandandand DTT DTT DTT DTT withinwithinwithinwithin thethethethe TV TV TV TV landscapelandscapelandscapelandscape
Appendix
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H1 2005Simplified IFRS Consolidated Income Statement
M€
90.3NET PROFIT, French Accounting Standards
Consolidated Income Statement H1 2004 H1 2005 % Change
Sales 632.5 643.6 +1.8%
Other operating revenues 23.6 27.1 +14.8%
M6 programming costs (125.0) (127.3) +1.8%
Other external supplies and services (23.8) (23.3) -2.1%
Other personnel costs (74.2) (75.9) +2.3%
All other operating costs (295.5) (308.9) +4.5%
EBITA (Gross operating profit) 138.4 136.2 -1.6%
EBIT (Operating profit) 137.6 135.3 -1.6%
Net financial income 0.8 2.0 n/a
Income tax (52.6) (49.5) -5.9%
Share of associates' results (0.5) (0.3) n/a
Minority interest (0.4) (0.3) n/a
NET PROFIT (GROUP SHARE) 84.9 87.2 +2.6%
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9-month 2005 revenues
in M€ 2004 2005 % change
M6 advertising 327.4 333.4 +1.8%
Other activities 305.0 310.2 +1.7%
H1 consolidated revenues 632.5 643.7 +1.8%
M6 advertising 115.8 117.9 +1.8%
Other activities 134.8 150.9 +11.9%
Q3 consolidated revenues 250.6 268.8 +7.3%
M6 advertising 443.2 451.3 +1.8%
Other activities 439.9 461.2 +4.8%
9 month consolidated revenues 883.1 912.5 +3.3%