A MODERN TV GROUP. A leading free to air channel. The leading thematic channels. Valuable assets in Pay TV. A profitable diversification

Transcription

1 Analyst meeting February 24, 2004 A MODERN TV GROUP A leading free to air channel The leading thematic channels Valuable assets in Pay TV A profitable diversification

2 : the leading channel A strength unique in France and Europe An audience share in 2003 of 31.5% on Ind. aged 4 and above 34.7% on Women < 50 years A regular and resistant leadership : Top 100 Best audiences A power to the favour of advertisers 7 ad breaks per day reaching more than 5 M viewers (whole competitors only deliver 1 per day in total) Source : Médiamétrie a panel of thematic channels 19 thematic channels controled by TF1 : 8 via TF1 12 via TPS 6 Group s channels ranked in the Top 10 in audience * The first 3 channels in advertising revenue ** *Source : Médiacabsat dec 02 / june 03 **Source : Sécodip 2003

3 on all distribution platforms Image quality 480 lines Digital Satellite Coverage 100% Cable Couverture ~ 50% ADSL Coverage ~ 50% Analogue 480 lines Terrestrial Coverage 100% Cable Coverage ~ 50% Time ahead of competition Image quality Analogue Digital HDTV 720 to 1080 lines 480 lines 480 lines Terrestrial Coverage 100% Cable High Definition TV A sound and an image Of an exceptional quality Coverage ~ 50% Satellite Coverage 100% Cable Coverage ~ 50% ADSL Coverage ~ 50% DTT Coverage ~ 80% HD End of the analogue signal? Time

4 TF1 Advertising revenue Broadcasting Strong fundamentals : a powerful advertising offer All programs viewing time Women < 50 Advertising viewing time Women < 50 08: = Advertising viewing time per channel in 2003 Women < 50 02:03 01:23 00:15 00:20 04:12 Source : Médiamétrie average viewing time per day

5 TF1: exclusivity of powerful adbreaks % of adbreaks split by audiences 57% 63% 77% 95% 99% % 25% 0 to 2 GRP 2 to 5 GRP 5 to 7 GRP 7 to 9 GRP 9 to 12 GRP 12 to 15 GRP + 15 GRP Source : Médiamétrie 2003 Women < 50 The first 300 adbreaks delivered by TF1 Top adbreak Day of broadcast Programme Audience 1 st Su 05/01/2003 «Apollo 13» 24.6% 323 rd Su 28/09/2003 «E.R.» 16.3% 670 th Mo 05/05/2003 «Indiana Jones and» 14.2% 1,343 rd Tu 07/01/2003 «L'odyssée de l'espèce» 11.8% Source : Médiamétrie women < 50 adbreaks audience

6 TF1, more than half of TV advertising market in 2003 Advertising market share per channel 2003 vs % -0.5 point +0.7 point 22.4% 11.7% 8.1% 2.2% 0.9% -0.2 point -0.3 point +0.2 point +0.1 point Source : TNS Sécodip 2003 vs 2002 The thematic channels reflex A complementary market 75% of national TV advertisers also invest on thematic channels (vs 72% in 2002) Thematic channels: ad market share = 8% of TV market(~ 400 M) TF1 Publicité Coverage ratio*: 63% of advertisers (vs 56% in 2002) 60% of recurrent advertisers (2003/2002) A number of advertisers increasing by 8% (+42 advertisers) Source : TNS Sécodip 2003 vs 2002 * Percentage of advertisers investing on at least one of the thematic channels in agency at TF1 Publicité

7 2004 Prospects French TV advertising market A positive economic trend Focus on leading medias : +3.3% in 2004 for TV (vs +1.8% in plurimedia) according to ZenithOptimedia Access to TV for new sectors Press on terrestrial channels & thematic channels Retail, and Book Publishing on thematic channels only 2004 TF1 ad revenue forecasts: +3% / +5% New sectors on TV Focus : Press on TF1 6.6 M invested in January 2004: 3.1% of gross revenue A market share of 65.8% for TF1 10 advertisers and 13 newspapers or magazines on TF1 TV and TF1, an immediate impact on sales Source : TNS Secodip

8 TF1 Advertising revenue Broadcasting Television : the most popular media French people prefer TV and A growing daily viewing time per individual : 202 minutes Television more and more watched : nearly 90% audience share for terrestrial channels 85% of French people watch TV every day 73% watch every day leader 9 evenings out of 10 Source : Médiamétrie / Individuals aged 4 and above / Year 2003

9 2004 : a promising start TF1 audience share up in January 2004 (vs vs January 03) on Individuals aged 4 and + and on Women < (-0.2pt) 12.7 (+0.3pt) (-1.4pt) 32.8 (+0.9pt) 19.7 (-0.4pt) 9.2 (-0.8pt) 19.2 (+1.6pt) (-1.7pt) 35.9 (+0.7pt) 16.2 (-0.3pt) TF1 France 2 France 3 Canal+ France 5 ARTE M6 Other TV Source : Médiamétrie TF1 : 95 out of the 100 best audiences Best ratings / category M viewers TV dramas News Entertainments 12.2 M 12.1 M 11.0 M L affaire Dominici 1 st part Monday 13 th, October 8 pm news bulletin Sunday 5 th, January La foire aux Enfoirés Friday 21 st, February 17 Movies 10.6 M La vérité si je mens II Tuesday 7 th, October 6 Sports 9.5 M Formula 1 Brazil GP 2 nd part Sunday 6 th, April, prime time Source : Médiamétrie / Individuals aged 4 and above / Year 2003

10 New TV dramas New shows on TF1 in 2003 Le dirlo New magazines Diane femme flic Péril Imminent New entertainments and games New TV dramas Events in 2004 Le Proc Blockbusters Zodiaque (summer) Julie de Maupin New entertainments Affaires Réservées and a real-tv show in spring News events and sport events Local and European elections The D-Day landings anniversary Formula 1 GP

11 Diversified activities TPS Eurosport Thematic channels Publishing - Distribution TF1 Video Other activities Production - Cinema Financial figures for diversified activities are contributions to TF1 consolidated accounts TPS: situation at end ,527,000 subscribers to TPS incl. 1,239,000 DTH subscribers Rev* : M (+22%) Net pft* : (6.4) M (-70%) incl. 288,000 subscribers to TPS Cinema on cable and satellite Platinium: 20,500 subscribers Market share on new subscribers in 2003: 36% An improving ARPU: Churn**: 10.6% 37.3 / month (+ 15% in 5 years) Figures at 100% 1 st year of positive EBIT 3 M vs (23) M in 2002 *Contribution to TF1 Group consolidated figures ; TPS was consolidated at 50% in H1 2002, and at 66% in H ** Excl. cards only

12 EUROSPORT Rev : M (- 3%) Net pft : 8.0 M (+ 129%) A widening coverage, increase of paying households 54 countries in 18 languages 97.9 M households, incl. 49% paying (+ 2.2 M vs December 2002) Evolving programming line-up, a bigger audience A renewed programming line-up thanks to new sports rights growth of the average audience by 12% A widened development in Europe Launch in Italia of a free-to-air sport channel: Sportitalia Organization of an international sport event (FIA European Touring Car Championship) A growing profitability EBIT margin up 1.8 pt at 10.6% An increasing net profit : 8.0 M vs 3.5 M in 2002 Thematic channels 20 thematic channels controlled by TF1 : 8 directly, 12 via TPS Number of subscribers Revenue M Net profit M 50 % 40,5 % 50 % 97.9 M M 33.9 (9.5) 2.4 M 5.9 (0.2) 4.0 M 4.2 (2.7) 2.1 M Source: Médiamétrie Audience share of thematic channels in 2003: Advertising market share of thematic channels in 2003: Source : Sécodip 10.9% ~ 8% 1.8 M 3.1 (0.4) 1.2 M 0.4 (0.6) * Sécodip gross figures

13 TF1 VIDEO * Rev : M (+ 12%) Net pft : 12,4 M (+20%) 2003 : the year of records Units sold : 15.1 M (+ 12.0%) DVD : 80% of the activity 2003 success : The Lord of the Rings II : 1.9 M units JM Bigard : 510,000 units Non-movie and kiosk businesses : great growth drivers Non-movie : 23% of activity (+ 92% vs 2002) Kiosk : TF1 Video, leader on the French market Ushuaïa boxes : 184,000 units A growing profitability 2004 s line up: Kill Bill Good Bye Lenin! 7 ans de mariage JY Lafesse. * Including CIC and RCV Publishing-Distribution and Interactive department Téléshopping Rev : 73.0 M (+5%) Net pft : 3.2 M (+88%) Good commercial performances in 2003 Growth of the Internet activity: + 52% TF1 Entreprises Development of press, merchandising and licence promotion activities Breakeven reached for TF1 Games Success for TF1 Musique : Star Academy and Chihuahua Interactive department * Rev : 56.2 M (+3%) Net pft : 7.3 M (+7%) Rev : 26.0 M (ns) Net pft : (1.1) M (ns) Unique visitors per month: 1.7 M Strong growth of revenue (contents, paying services and advertising) Success of Star Academy 3 Strong development of mobile multimedia (i-mode) * Consolidation of TF1 Interactive & e-tf1 from July 1 st, 2003

14 Production - Cinema Creation of TF1 Production - development of in-house production entities - new synergies under one umbrella TF1 Production : a powerful and efficient tool for TF1 core channel. Cinema : in theaters in 2004 TF1 Films Production TFM Distribution Téléma and many others Strategy & Prospects

15 A new TV project for Italia Shareholding structure 49% 51% PRIMA TV 100% EUROPA TV EUROPA TV 49% 51% - National TV broadcasting licence for an analogue terrestrial network, covering 81% of the Italian population : 46.7 M people - Broadcasting : SI - SportItalia HOLLAND COORDINATOR AND SERVICES PRIMA TV - National TV broadcasting authorisation for a DTT network, covering 73% of the Italian population : 42 M people in June Broadcasting : digital terrestrial multiplex D-Free : Sportitalia TF1 investment: 37.2 M (49% of Europa TV) 46.7 M inhabitants (81% of the population) National TV licence 6 th national terrestrial analogue network in terms of coverage, out of 11 existing networks Format : Free-to-air nationwide sports channel 2005 objectives : Audience share from 0.5% to 1% EBIT Breakeven

16 : digital multiplex TF1 investment : 12.7 M (49% of Prima TV) 42 M inhabitants in June 2004 (73% of the population) National authorization : 1 st digital multiplex in terms of coverage out of the 4 authorized national multiplex D-Free offer : Italia 1 + interactivity Canale 5 + interactivity Sportitalia + interactivity in 2005 LCI Other channels Objective : EBIT breakeven in 2004 TPS L : Plug and Watch! «A convenient offer of movies and TV on demand in digital quality through the phone line» December 18 th, 2003: TPS launched with France Télécom the TV through the phone line. Available in Lyon for 360,000 households Paris area in spring 2004 Other large cities coming soon MaLigne TV = 16/month: Access to TPS L & VOD Set top box TPS L PRESTIGE = 21/month: TPS Star, 6 TPS cinema channels, a channels offer for the whole family, all terrestrial channels Investment : 60 M in 4 years (incl. Capex) Recruitment objectives : 300,000 to 500,000 subscribers in 5 years

17 TPS L : Launch in Paris area Launch in Spring 2004 Paris area market: 2.65 M households for a potential of 1.83 M A customized media planning (billboard, press and radio) HDTV : a project for TF1 The High Definition Television is Very high sound and image quality (16/9, from 720 to lines) A new quality for a new audience The entire industry is working on this new technology A project for TF1 TF1 leader in digital technologies After TPS and TPSL, the digital high definition Calendar 2004 : Experimental step (manufacturers, producers, ) 2005 (T3-T4) : Commercial step : launch of a new service 2006: World Cup broadcast in HDTV HDTV and TNT Only the HDTV justifies the DTT launch DTT + HDTV = a added value TV

18 TF1 Group s stake Consolidate our leading position on free-to to-air TV Development in Pay TV Improve the content Diversify the distribution Improve diversified activities profitability TF1 : a profitable leading Group 2003 Accounts

19 Consolidated P/L: operational breakdown (1/2) M / 02 % Net advertising revenue 1, , % Agency fees Authors French Cinema Council (CNC) Transmission costs Net revenue from broadcasting Programming costs (82.4) (58.1) (76.5) (57.2) 1,269.5 (852.0) (83.1) (58.2) (74.7) (56.0) 1,235.3 (881.6) % % % % % % Gross margin % Consolidated P/L: operational breakdown (2/2) M 2003 * 2002 ** / 02 % Gross margin % Diversification & other revenue 1, ,143.5 Other operating expenses (1,141.4) (1,069.4) Depreciation and amortisation (161.6) (134.3) EBIT Financial profit (14.4) (29.7) Exceptional items (8.1) (4.4) Goodwill amortisation (12.0) (8.9) Tax (107.9) (94.1) Share of investments 0.0 (1.2) % % % % % ns % % ns Net profit (attributable to the group) % *TPS is consolidated at 66% in 2003 **TPS is consolidated at 50% in H and at 66% in H2 2002

20 Contributions 2003* M Revenue EBIT Net profit Net profit 2002 TF1 Channel 1, TPS Publishing - distribution Eurosport Production TV 1 Theme channels Audiovisual rights (11.5) (17.1) 1.2 (6.4) (8.9) (10.6) (5.0) (21.2) (9.3) (9.5) Internet 26.0 (1.2) (1.1) (9.1) Others 13.7 (0.2) Total 2, * Contributions after restatements intra-group 1 TF1 Films Production, Groupe Glem, Téléma, Alma, TAP, Quai Sud 2 TF1 International, TF1 International Pictures, Ariane, Ciby DA, Cabale, TCM, Films du Jour, TF1 Catalogue Consolidated balance sheet: net assets M Intangible fixed assets Goodwill Tangible fixed assets Financial fixed assets Fixed assets Stocks Debtors* Marketable securities & cash , , , , Current assets 1, ,905.5 Total assets 3, ,136.5 * Including adjustments accounts

21 Consolidated balance sheet: liabilities M Share capital Minority interest Provisions for liabilities and charges Deferred taxation Financial loans and debt Other creditors* Total liabilities (0.1) , , , ,136.5 * Including adjustments accounts Consolidated cash flow statement M Cash at the beginning of period Cash flow Change in working capital need Net cash inflow from operating activities Net cash outflow from investing activities Net cash outflow/inflow from financing activities (7.3) (153.1) (12.0) (318.6) 8.5 Total increase in cash & cash equivalents Cash at the end of period

22 Programming costs * M / 02 % Entertainment % TV dramas & series Sport News Movies % % % % Children programmes % Total programming costs % * Including expired and retired broadcasting rights Shareholding structure - 31 st Dec BOUYGUES Capital 41.1% Voting rights 41.4% Société Générale Core shareholders Others France (1) Including employees Europe (excl. France) 1.4% 42.6% 29.5% 3.6% 20.2% 1.4% 42.8% 29.7% 3.6% Treasury shares 0.6% % Others (excl. Europe) Total 7.1% 100% 7.2% 100% (1) Including unidentified shareholders Source : Euroclear statement as at 31 st December 2003

23 Employees TF1 SA 1,436 1,383 Subsidiaries Total 31 dec dec ,246 2,097 3,682 3,480 / TF1 share TF1 share price evolution since January 1 st 2003: % * TF1 share in Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb TF1 100 days moving average Rebased CAC 40 * On February 23 rd, 2004

24 Appendix TF1 confirms its leadership in spite of the increase of other TVs on Women < % of audience share vs % 12.2% 18.5% 10.0% 3.9% 2.7% -1.3 pt -0.5 pt -0.5 pt -0.6 pt pt pt 1.4% pt pt Other TV In % -3.6% -2.9% -3.9% -3.1% +15% +23% +8% +24% Source : Médiamétrie / 2003

25 31.5 TF1 confirms its top ranking in spite of the increase of other TVs On individuals aged 4 and above of audience share vs pt -0.3 pt -0.3 pt -0.6 pt pt pt pt pt Other TV In % -3.7% -1.4% -1.8% -4.5% +6% +21% +13% +15% Source : Médiamétrie / Year 2003 Most sectors up in vs 2002 TF1 Market share Evol. FOOD M +13.7% 58.3% ++ COSMETICS M +12.8% 55.6% - PUBLISHING AUTOMOTIVE HOUSE CLEANING TELECOMMUNICATION M -3.2% M -5.6% M -5.1% M +19.9% 54.6% 53.0% 59.6% 54.2% SERVICES M +6.5% 45.7% ++ CULTURE & LEISURE M +10.9% 54.2% - DRINKS 87.1 M +10.2% 53.6% -- NEWS - MEDIA 63.1 M +17.4% 47.6% --- Source : TNS Secodip 2003 vs 2002

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28 Analyst meeting February 24, 2004