Filed by Vivendi
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: The Seagram Company Ltd.
Commission File No. 1-2275
and
Subject Company: Canal Plus S.A.
Commission File No. 82-2270
November 15, 2000
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Jean Marie Messier
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Goldman Sachs Conference
November 14, 2000
London
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VIVENDI UNIVERSAL
Jean Marie Messier
Chairman and Chief Executive Officer
Table of Contents
- Mission statement
- The Global Media Industry
- Vivendi Universal, a growth story
- Focus on three divisions:
- Music
- Films
- Vizzavi
- Synergies: examples and financial impact
- A unique opportunity
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IMPORTANT LEGAL DISCLAIMER
- These documents contain forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on management's current expectations or
beliefs and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. The forward-looking statements contained in these
documents address the following subjects: expected date of closing the
merger; future financial and operating results; and timing and benefits of
the merger.
- The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk
that the Vivendi, Canal+'s and Seagram's businesses will not be integrated
successfully; costs related to the merger; failure of the Vivendi, Canal+ or
Seagram's stockholders to approve the merger; inability to further identify,
develop and achieve success for new products, services and technologies;
increased competition and its effect on pricing, spending, third-party
relationships and revenues; inability to establish and maintain relationships
with commerce, advertising, marketing, technology, and content providers.
- Investors and security holders are urged to read the joint proxy
statement/prospectus regarding the business combination transaction
referenced in the foregoing information because it contains important
information. The joint proxy statement/prospectus was filed with the
Securities and Exchange Commission by Vivendi, Canal+ and Seagram. Investors
and security holders may obtain a free copy of the joint proxy
statement/prospectus and other documents filed by Vivendi, Canal+ and Seagram
with the Commission at the Commission's web site at www.sec.gov. The joint
proxy statement/prospectus and these other documents may also be obtained for
free from Vivendi, Canal+ and Seagram. Information regarding the participants
in the proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, is contained in the joint press
release relating to the transaction filed with the Commission by each of
Vivendi and Seagram, on June 20, 2000.
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VIVENDI UNIVERSAL
Mission statement
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MISSION STATEMENT
Vivendi Universal is a consumer-focused,
performance-driven, values-based global
media and communications company.
Our Vision is to be the world's preferred creator
and provider of personalised information, entertainment
and services to consumers anywhere, at anytime,
and across all distribution platforms and devices.
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VIVENDI UNIVERSAL
The Global Media Industry
A vision
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THE GLOBAL MEDIA INDUSTRY
THE ERA OF DIGITAL CONVERGENCE
- The convergence is consumer-driven.
- Rich and personalized content - personalization must be easy
- Multi-accessibility - localized services
- The move is technology-enabled
- Broadband access channels to multiply
- Devices are mutating to match consumers' needs (portability,storage,...)
- Premium content is essential
- Practical information for day-to-day life
- Entertainment content (music, film, games)
- Education
- Content producers at an advantage
- Built-in customisation at early development stages
- Knowledge of customer
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THE GLOBAL MEDIA INDUSTRY
THE BENEFITS OF DIGITAL CONVERGENCE
- Vertical integration is essential to maximize shareholder value:
- New businesses will be introduced to the market faster
- Ability to keep most of the margin of the value-chain within the group
- Vertical integration does not mean exclusivity:
- Content does not maximize its value if distribution channels are limited
and vice versa
- Premium content to contribute to differentiation through windowing
policies and early cooperation
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THE GLOBAL MEDIA INDUSTRY
NOW IS THE TIME
- Technology is locking up the market:
- Limited number of Mobile and i-TV operators
- Investment beyond the start-up financing power
- New markets are being constantly created (e.g. new devices)
- Market shares crystallise rapidly: time to market is essential to implement
new business models
- Control of margins along the value-production chain between content producers,
aggregators, in-house and external distributors
- No time wasted in profit-sharing and co-branding discussions: one P&L, one
Global Brand
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VIVENDI UNIVERSAL
A growth story
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VIVENDI UNIVERSAL
A GROWTH STORY
- Vivendi Universal will have all the key drivers for value creation in
the global media world
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
|
Key | New Scale & Global Brands Bundling Vertical
driver | revenue Scope footprint integration
| streams
-----------------------------------------------------------------------------------------------------
|
Seagram | X-XX XX-X X XX 0 0
|
Vivendi | X-XX XX-X X X XX XX
|
Canal+ | XX XX-X X XX X 0
|
--------------------------------------------------------------------------------------------------------
Vivendi |
Universal | XX XX XX XX XX XX
|
</TABLE>
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| 0 = no or low X = average XX = good |
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- ...and growth capacities
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VIVENDI UNIVERSAL
A GROWTH STORY
- Vivendi Universal on same footing as main competitors:
- in a position to negotiate with third parties of equivalent size:
- to share distribution channels;
- to secure access to additional content;
- Unique leading prominent position in Europe - gateway for US-centric
partner:
- Europe is not developing into a PC-centric world;
- Mobile telephony and interactive TV are key to European landscape;
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VIVENDI UNIVERSAL
A GROWTH STORY
- Content : consistent growth + strong cash flow generation
- Access : rapid growth + fixed costs = strong EBITDA leverage
- Aggregation : new business models and revenue streams based on Europe's
#1 multi-access distribution platform and leading content supplier
+
Synergies : costs and revenues
=
A uniquely positioned company with extraordinary growth
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VIVENDI UNIVERSAL
A GROWTH STORY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Figures in billion euros Revenues 2000e EBITDA 2000e Revenues CAGR EBITDA CAGR
Objective Objective
2000-2002e 2000-2002e
---------------- ---------------- --------------- ----------------
Publishing 3.5 0.5 6% >=10%
Music 6.6 1.1 6% 12%
Telecom 5.8 1.3 18% >=35%
Internet 0.03 (0.1) nm nm
Pay-TV 4.0 0.4 10% >35%
Filmed Ent. Recreation 4.6 0.3 7% >10%
Holding 0.0 (0.3) nm nm
Revenues Synergies +1,000M[Euro](1) +220M[Euro](1)
Costs Synergies - +440M[Euro](1)
---------------- ---------------- --------------- ----------------
Total VU excluding VE 24.6 3.2 10% 35%
and non-core
Vivendi Entertainment(2) 25.6 3.5 8% 11-13%
</TABLE>
(1) In 2002, on a proportional basis
(2) Vivendi owns 250.6m of VE shares (72%)
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VIVENDI UNIVERSAL
A GROWTH STORY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Revenues CAGR EBITDA CAGR
Figures Revenues EBITDA Objective Objective
in billion euros 2000e 2000e 2000-2002e 2000-2002e
-------------- ------------ ---------------- ------------------
Access 9.8 1.8 >15% >35%
Content 14.7 1.9 6 - 7% 12%
Aggregation 0.03 (0.1) >100% nm
Holding 0.0 (0.3) nm nm
Synergies +1,000M[Euro](1) +660M[Euro](1)
-------------- ------------ ---------------- ------------------
Total VU excl. VE 24.6 3.2 10% 35%
and non-core
</TABLE>
Assuming constant perimeter and constant number of shares,
growth of EBITDA per share for the communication division in line: +35% p.a.
EPS before goodwill to be impacted by exceptional items (inc. disposals)
(1) In 2002, on a proportional basis
(2) Vivendi owns 250.6m of VE shares (72%)
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VIVENDI UNIVERSAl
Focus on three key divisions
Music, Films and Vizzavi
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VIVENDI UNIVERSAL: THE MUSIC DIVISION
A GLOBAL LEADER
- Global #1: 21.8% Market Share
- vs. Sony (17.3%), EMI (13.5%), Warner (11.7%), BMG (11.7%) and others
(aggregate 24.0%)
- Sales [Euro]6.9bn (US 40%, Europe 39%)
- Domestic leadership in most major countries:
- US: #1 with 29% market share
- France: #1 with 33%; UK: 24%; Brazil: 26%...
- Very profitable with huge cash-flow generation:
- EBITDA margin of 16%
- Cash from operations(*) approx. 72% of EBITDA
*: before e-business development and acquisition costs
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VIVENDI UNIVERSAL: THE MUSIC DIVISION
WHY MUSIC IS A GOOD BUSINESS
- Attractive "risk profile"
- Well-diversified portfolio/large number of bets
- Long term contracts
- Strengths of catalogue
- Label functions to remain essential
- Discovering artists (a filter, financing artist acquisition)
- Promoting and distributing (Global and local reach, Knowledge of
circuits)
- Indies: market share down from 30% in 1988 to 24% in 1999
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VIVENDI UNIVERSAL: THE MUSIC DIVISION
DIGITAL OPPORTUNITIES
- Marketing leadership being established, beyond legal and technological
steps...
- Already in place:
- Digital downloads
- Subscription services
- Getting ready for:
- Locked content
- TV Set-top boxes
- Wireless
- Streaming: Per per play
- Kiosks
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VIVENDI UNIVERSAL: THE FILM DIVISION
UNIVERSAL STUDIOS GROUP
- A balanced portfolio of film-related businesses
- Filmed entertainment: Universal Pictures
- Production and distribution of films
- Recreation
- Theme parks in Hollywood, Orlando, Beijing, Spain, soon in
Japan
- Television and Networks
- Production of TV programmes and distribution through international
branded channels: 13th Street, SciFi, StudioUniversal...
- A recent turnaround
- Sales [Euro]4.6bn in 2000, consolidated EBITDA [Euro]0.3bn
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VIVENDI UNIVERSAL: THE FILM DIVISION
UNIVERSAL PICTURES' TURNAROUND STORY
- Business fundamentals changed radically under new management
- Slate management
- Slate managed within a corporate mandated production cap
- Diversification of genre/style: 14-16 films a year
- Process accountability
- Risk protection
- Franchises and sequels
- Risk sharing and capping (insurances, studio joint-ventures,
opportunistic right sales)
- Leveraging opportunities through divisions
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VIVENDI UNIVERSAL: VIZZAVI
PIONEERING EUROPEAN MULTI-ACCESS
- Mobile and i-TV are key to European landscape
- Revenue forecasts to reflect new consumer behaviours: e.g. typical
household to buy more through i-TV than PC
- Our share of the investments
- [Euro] 600 to 800 million over next 2 years (*)
- Break-even target in 2003
*: depending on cash-burn and IPO timing
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VIVENDI UNIVERSAL: VIZZAVI
KEY DIFFERENTIATORS
- First-mover advantage
- Multi-accessibility
- Common default portal across range of devices
- Unified messaging centre (voice- and e-mails)
- Close cooperation with access providers
- Localised services
- Direct and detailed billing through access companies
- Integrated post-sale services and customer care
- Joint marketing approach to new devices (e.g. PDAs with mobile phone
access)
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VIVENDI UNIVERSAL
Synergies
Examples and financial impact
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VIVENDI UNIVERSAL: SYNERGIES
EXAMPLES AROUND THE MUSIC DIVISION
- Mobile phone and music
- Music-based services on mobile devices (e.g. lottery service, mailbox
personalization, ring tone services)
- Provide new distribution channels for UMG music content
- Music and Vizzavi
- Vizzavi will offer specific vertical channels such as Games, Music,
Entertainment
- UMG has several e-music ventures + downloading programs
- Vizzavi can leverage UMG content to increase Vizzavi Music Channel
popularity (Increase loyalty and lower acquisition costs for
Vizzavi) offering choices not exclusivities to the consumer
- UMG CD to increase Vizzavi traffic
- UMG powerful distribution (200 M CDs sold in Europe last year). Using
CDs, the consumer will access Vizzavi portal customized with special
artist features (e.g. latest news on the artists, exclusive tracks
included)
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VIVENDI UNIVERSAL: SYNERGIES
EXAMPLES AROUND THE FILM DIVISION
- Studio Production synergies
- Pursue co-production opportunities
- Combine international acquisition efforts
- Mine libraries for product remakes including film, direct-to-video,
and TV animation
- Leverage Universal production assets
- Distribution synergies
- Utilize common theatrical, video and TV distribution
- Assuming distribution of Studio Canal product on video
- Establish direct distribution operations in territories currently covered
by third parties
- Long term, leverage product across array of emerging platforms capitalizing on
Vivendi Universals footprint in wireless technology
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VIVENDI UNIVERSAL: SYNERGIES
TARGET REVENUE SYNERGIES IN MILLIONS [EURO]
- Total identified synergies only
2002
----
Cross - Content Combinations 25
Music Cegetel Mobile Services 30
Other Music Projects 45
Loyalty Programs 15
Cross - Promotions 15
Canal+ / USG 25
Games Synergies 15
All other 50
----
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| TOTAL EBITDA 220 |----> >= 400
------------------------------------------------- in 2003
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VIVENDI UNIVERSAL: SYNERGIES
TARGET COST SYNERGIES IN MILLIONS [EURO]
Addressable Target Savings
costs 2002
-------
Functional overheads
Vivendi / Seagram )
Canal+ / USG )-> 2,000 160
Delayering )
Logistics 1,100 60
Purchasing / Procurement 3,500 80
IT Operating expenses 550 60
Other external charges 30
------------------------------------------------------------------
+ Spirits' divestiture savings / non absorbed Seagram's costs(30)
+ Non recurring items at Vivendi 60
------------------------------------------------------------------
Total EBITDA impact 420
Non EBITDA recurring 50
Investment savings 80
Total Cash Flow impact 550
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VIVENDI UNIVERSAL
A unique opportunity
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VIVENDI UNIVERSAL
A UNIQUE OPPORTUNITY
- Markets
- Growth markets: content/access/aggregation
- Multi-access is key; mobility is now a consumer need.
- Vertical integration to keep margins within the group and for speed
- Management
- Integrated organization
- Strong value creation track record in the media industry
- Focused on growth and profitability targets
- Committed to implementation of synergies and innovation
- Financial strength
- Steady growth prospect:
top line = + 10% pa; EBITDA = +35% pa
- Strong cash flow generation
- Deleveraged balanced sheet
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