M6 Group Merrill Lynch TMT Conference 7 June 2006 1
Overview 2005 Reminder Jan May 2006 Audiences Q1 2006 Revenues and advertising trends DTT New growth drivers Conclusion 2
2005 key Group financial results M +6.4% 1274,7 1197,6 194.8 185.4 1079,9 1012,2 +6.0% +6.7% 786,5 737,0 2004 2005 +16.3% +21.3% 248,6 +3.9% 258,4 184,8 552,2 186,1 600,4 +8.4% 212,0 229,8 8.7 0.6 211,4 221,1 208,4 0.6 207,8 242,3 8.7 233,6 128,8-2.1 130,9 156,2 5.1 151,1 Turnover Programming costs Other operating expenses Chiffres d'affaires Coût de grille Autres charges opérationnelles EBITA EBIT EBITA EBIT Résultat net part du Net Profit Group groupe share 3
2005 financial year highlights Record audiences 19.1% < 50 y.o housewives audience share 12.6% 4 + y.o. individuals audience share M6 progresses in its commercial targets Advertising performance in a stable market at + 0.3 % (gross data) + 4.0 % Advertising revenues growth 23.2% Market share (gross data) + 0.5 pt < 50 y.o housewives Controlled programming costs + 0.1 pt 4 + y.o. individuals + 0.9 pt 15-34 y.o individuals Thematic channels M6 market share gain + 1.1 basis points M 258.4 Progression limited to + 3.9% with record audience increases Launch of new channels Pay TV TPS Canal+ Group agreement Net cost of DTT (excl TPS) 13.0 M in 2005 (incl. W9 result) vs. 1.3 M in 2004 2006 e costs : 16 M Launch Commercial success with 300,000 subscribers (at 21 February 2006) EBITA 2005 + M 1.8 Acquisitions Mistergooddeal Internet destocking site Citato Free monthly aimed at 15-25 y.o SNC Films catalogue 4
Overview 2005 Reminder Jan - May 2006 Audiences Q1 2006 Revenues and advertising trends DTT New growth drivers Conclusion 5
M6 : Housewives<50 audience share still at a very high level after 2005 records WeekS 1 to 21 Hwives <50 years old audience share in % 35.9 35.4 34.3-1.1 2004 2005 2006 16.6 15.6 15.8 +0.2 19.4 20.1 19.9-0.2 12.6 11.0 10.2 10.4 10.7-0.2-0.2 9.3 +0.2 3.8 +1.9 3.5 3.3 2.6 3.0 2.8 Other TVs 6
2006 : New records for M6 Prime Time attracting more than 5 million viewers (+4 y-o) Prime Time attracting more than 4 million viewers (+ 4 y-o) 51 13 31 5 2004 2006 2004 2006 Powerful Prime Time (more than 4 million viewers) are more and more frequent 2004 2005 2006 1 night out of 5 1 night out of 4 1 night out of 3 Source: Médiamétrie Weeks 1 to 21 7
Large audience successes on all targets 34.3 Average audience of the time slot (2004-05 ) Season 1 Season 2 Season 3 Season 4 21.3 25.4 28.8 30.3 DESPERATE HOUSEWIVES (first 2 weeks) 32.7 40.6 16.4 17.3 18.8 4.8 M 20.9 21.5 21.9 4.2M 13.8 5.2 M 3.9M 3.1M + 4 y-o H<50 y-o Nouvelle Star Season 4 tops new records + 1.7 million viewers vs. Season 1 + 1.1 million viewers vs. Season 2 + 600 thd viewers vs. Season 3 + 4 y-o H < 50 y-o 4-34 y-o Desperate Housewives The event (first FTA broadcast) 5.2 million viewers (average audience) M6 first channel on the 4 34 y-o target 8
US series : an audience driver for more powerful nights Season 2004-2005 average NUMB3RS (PRIME TIME) 24.9 Season 2004-2005 average MEDIUM (PRIME TIME) 27.5 20.4 21.2 13.7 15.2 14.5 16 3.4 M 3.1 M + 4 y-o H<50 +4 y-o H<50 Season 2004-2005 average Season 2004-2005 average NIP / TUCK (2d half of evening) 22.6 19.8 14.5 30.9 Season 2004-2005 average SMALLVILLE (PRIME TIME) 13.9 14.8 22.7 24.7 NCIS ENQUÊTES SPECIALES (PRIME TIME) 29.6 25.1 18.3 16.8 1.4 M 3.1 M 4.3 M + 4 y -o H<50 +4 y - o H<50 +4 y-o H<50 9
Enlargement of M6 s audience Evolution of channels audience profile jan-apr 2006 and point evolution (jan-apr 2006 vs jan-apr 2001) 21.4-4.3 47.5 +0.4 46 +0.7 +4.4 62.1 61.2 +1.8 40.6 +10.7 Source: Téléreport/Médiamétrie janv-apr 2006 vs janv-apr 2001 50.4 +5.5 36.2 +1.4 38.1 +1.5 +2.4 45-3.4 29.3-1.6 26.6-1.0 16-2.2 28.1-1.1 16-3.4 8.5-3.6 12.3-1.5 15-5.8 All TVs 4-24 y-o 25-49 y-o >50 y-o 10
Coming next in June FIFA World Cup 2006 31 matchs live on M6 featuring : 3 prime-times (including Brazil-Croatia) 4 second round games 2 quarter finals The summer drama «Laura» M6 first step in a popular programme style A complementary strategy to be more federative 11
Overview 2005 Reminder Jan - May 2006 Audiences Q1 2006 Revenues and advertising trends DTT : First audiences New growth drivers Conclusion 12
Q1 2006 sales : a strong growth +15.7% in M 307.5 M + 15.7 % 355.9 M +8.1% on a constant scope 47.3 Discontinuing activities (TPS) 46.8 + 1.1 % Diversification and audiovisual rights 94.4 + 50.2 % + 24.5 % on a constant scope 139.9 Digital channels 14.5 + 13.8 % 16.5 Advertising revenues 151.8 + 0.2 % 152.2 Q1 2005 Q1 2006 13
Breakdown of revenues by segment Digital channels 4.7% Discontinuing activities 15.2% Free-to-air 50.2% Digital cha nnels 4.6% Discontinuing activities 13.3% Free-to-air 43.3% Diversification and audiovisual rights 29.9% Diversification and audiovisual rights 38.8% Q1 2005 Q1 2006 The beginning of 2006 highlights : the dynamism of existing activities (digital channels, audiovisual rights) and the strong growth of new activities in diversification (M6 Mobile by Orange, Distance Selling) 14
M6 outperforms the TV market Gross figures : 1 January 28 May 2006 vs 1 January - 28 May 2005 The FTA advertising market is up by : +6.5% 1 Jan - 28 May 2006 vs 1 Jan -28 May 2005 TV ad market share and changes 1 Jan 28 May 2006 vs 1 Jan 28 May 2005 Gross TV ad spends 1 Jan -28 May 2006 Change 1 Jan - 28 May 06 vs 1 Jan -28 May 05 1 226 M +6.6% 23,5% (unch.) 456 M 47.7 M +6.0% +4.4% 2,1% (-0.1 pt) 54,3% (+0.1 pt) 532.2 M +6.8% 20,3% (-0.1 pt) Source : TNS Media Intelligence Gross data 15
Average strength of advertising screens 1 January 21 May 2006 vs 1 January 21 May 2005 M6 s advertising breaks average audience increases by +3% on housewives under 50 y-o Average GRP Housewives < 50 y-o full day stable +3% 6,3 6,3 stable +13.3% 3,3 3,4 2,2 2,2 1,5 1,7 2005 2006 2005 2006 2005 2006 2005 2006 Source : PopCorn France 2 and France 3 include CINEP 16
Sectors : M6 performance in line on Food & Health Beauty, underperforms on Household products Changes in expenditures and market shares (Jan April 2006 vs Jan April 2005) 1-Food 412.8 M invested on all TV 2-Health & Beauty 228.2 M invested on all TV 7-Household products 83.9 M invested on all TV TTV -4.7% -5.5% -10.6% -10.8% Change in expenditures Jan April 06 vs Jan - April 05-18% -31.9% Change in market shares Jan April 06 vs Jan - April 05 0 pt -0.3 pt -4.6 pts Market share Jan April 2006 MS 20.7% MS 26.6% MS 22.1% Source : Micromarché TNS Media Intelligence gross data Jan to April 2006 vs Jan April 2005 17
Sectors : M6 outperforms on Telco, Beverages and in line on Services Changes in expenditures and market shares (Jan April 2006 vs Jan April 2005) TTV Change in expenditures Jan April 06 vs Jan - April 05 3-Telco 185.3 M invested on all TV +103.6% +83.1% 10-Beverages 41.1 M invested on all TV +43.0% +22.8% 6-Services 157.3 M invested on all TV +33.1%+32.9% Change in market shares Jan April 06 vs Jan - April 05 +3.3 pts +3.6 pt +0 pt Market share Jan April 2006 MS 32.1% MS 25.3% MS 17.3% Source : Micromarché TNS Media Intelligence gross data Jan to April 2006 vs Jan April 2005 18
Overview 2005 Reminder Jan May 2006 Audiences Q1 2006 Revenues and advertising trends DTT New growth drivers Conclusion 19
M6 audience share on Housewives <50 y.o increases in spite of fragmentation 40 35 36 35.4 35.3 34.1 35.9 35.4 34.3-1.7 pt 30 25 20 18.7 19.8 19.3 18.3 19.3 20.1 19.9 +1.2 pt 15 10 18.8 12.2 6.3 18.1 17.9 17.2 13 12.9 12.6 9.9 7.1 7.9 16.7 11 9.3 15.8 15.6 12.6 10.7 10.2 10.4 Other TVs - 3 pt +6.3 pt - 1.8 pt 5 0 5.1 4 3.5 3.9 3.8 3.5 3.3 2000 2001 2002 2003 2004 2005 2006 Mediametrie Weeks 1 to 21 Hwives <50 years old audience share in % - 1.8 pt 20
An effective strategy from 7 pm to midnight Breakdown of advertising expenditure by time slots (TTV 2005 data) Breakdown of M6 programme expenditure by time slots 7.3% 13.3 % 9.1 % 5.9 % 18.7% 45.5 % 10.0 % 50.4 % 12 midnight to 12 noon 12 noon to 2: pm 2pm to 5pm 5pm to 7pm 7 pm to 8:30 pm 8:30 pm to 12 midnight 6:30 pm to 8:30 pm 8:30 pm to 12 midnight 64.2% of advertising expenditure are concentrated on Access, Prime Time and the 2 nd half of the evening 60.4% of M6 programme expenditure are concentrated on Access, Prime Time and the 2 nd half of the evening 21
enabling M6 to offer the best opposition in this time slot M6 offers the best opposition to the DTT offer among all the major French TV terrestrial networks in prime time and audience share gains in the 2 nd half of the night - 3 % + 3 % - 7 % - 9 % Prime Time - 10 % - 16 % 2 nd nd half of the evening - 22% - 27% 31.7 M6 posts the 3 rd best prime time audience level for individuals 4+ y.o. equipped with DTT M6 posts the 2 nd best 2 nd half of night audience level for individuals 4+ y.o. equipped with DTT 31.3 16.8 13.3 12.7 6.6 2.8 1.9 1.8 1.0 16.0 14.1 9.6 5.9 4.2 2.5 2.0 1.2 Individuals 4+ y.o. audience share equipped with DTT / Monday to Sunday, January 2006 Source: Médiamétrie, subscribed channels uniquely surveyed 22
Audience shares on +4 y-o equipped with free DTT Relevant performance of W9 with an audience share of 3.1% on +4 y-o equipped with free DTT (vs 2.7% in January 2006) W9 is one of the few channels in progress. 6,1 4,3 4,1 January 2006 January - March 2006 Audience share - +4 ans y-o equipped with free DTT 2,7 3,2 3,1 3,1 Average score from mondays to sundays 03h / 27h In % -1.8 +0.4-0.1 1,2 +0.2 1,4 1,2 0,7 0,5 0,5 Period: 1st quarter 2006 Source : Médiamétrie 23
Cumulated audience on +4 y-o equipped with free DTT W9 is the most attractive and popular channel among the new DTT channels. 40,0% 37,4% 37,1% 38,1% 38,0% 37,3% January 2006 January March 2006 34,5% 32,4% 31,3% 28,2% 27,8% 27,4% 25,7% Period: 1st quarter 2006 Source : Médiamétrie / Equipped households threshold 1 second 24
Overview 2005 Reminder Jan - May 2006 Audiences Q1 2006 Revenues and advertising trends DTT New growth drivers Conclusion 25
Diversification and audiovisual rights : an increased contribution to sales and EBIT FY 2004 FY 2005 % change Q1 2006 Revenues 352.2 380.3 + 8.0 % + 50.2 % EBITA EBITA margin 9.8 25.6 2.8 % 6.7 % 2005 highlights EBIT : 38.1 M (13.3 M gain on RTL Shop disposal) Except M6 Interactions, the contribution of all activities increased M6 Mobile and Mistergooddeal.com first contribution is positive > 300% + 24.5% on a constant scope 2006 Mistergooddeal.com, M6 Mobile by Orange and growth of other existing activities should generate sales replacing at least 2/3 of TPS sales contribution 26
HSS Mistergooddeal: a fast-growing Distance Selling player Turnover ( M) 32.6 58 Incl. MGD : M 23.3 Strong growth in the e-commerce market Average number of online buyers in 2005 Q3 Average number of online buyers in 2005 Q4 Average number of online buyers in 2006 Q1 + 77.9 % + 6.4 % on a constant scope Q1 2005 Q1 2006 12 million 13.4 million +26% vs.q4 2004 15.1 million +31% vs.q1 2005 Q1 2006 sales up 77.9 % (+6.4% on constant scope) HSS revenues +6.7% Pursuit of infomercials growth Mistergooddeal.com registers a sustained growth (+56% vs +37% for the market) e-commerce growth driver Creation of multi-channel player with a critical mass 27
M6 Web revenues more than doubled Turnover ( M) 13.6 Turnover up 102.9% 6.7 + 102.9 % Growth driven by: the success of the Group s websites and interactivity business Q1 2005 Q1 2006 M6 Mobile by Orange dynamism M6 Mobile by Orange 420 000 subscribers announced on the 7th of June 2006 1 million subscribers goal within 3 years Launch of a new offer coming soon 28
Overview 2005 Reminder Jan - May 2006 Audiences Q1 2006 Revenues and advertising trends DTT New growth drivers Conclusion 29
M6, combining innovation with a generalist status Channels perception by general public Innovation Relaxation, Show Knowledge, sobriety Source: Ipsos qualitative survey December 2005 Tradition 30
M6 Group strategic view Free to Air A generalist channel, with a new asset on free DTT Increased investments in sports, fictions, news Digital channels A complementary offer Ensure the best distribution and exposure Diversification and audiovisual rights Capitalising on a strong brand to develop complementary activities (targets, audiences, customers,..) Organic growth and acquisitions Secure content sourcing DELIVERING MASS AUDIENCES DELIVERING TARGETED AUDIENCES DELIVERING MULTIMEDIA AUDIENCES Control of powerful and federative contents available on both traditional and new supports Monetisation of audience share Increased advertising market share for incremental revenues and profits 31
The accelerating pace of new technologies and business models to access audiovisual contents Since 2000, more technologies to access audiovisual contents have been created than in the whole last century DVB-H 3G SVOD PODCAST VOD PVR/DVR XXIst century TV on ADSL WEB XXth century DVD DIGITAL CABLE ANALOG SATELLITE DIGITAL SATELLITE ANALOG CABLE TELEVISION CINEMA VHS 1950 1960 1970 1980 1990 2000 2010 32
Focus on digital broadcasting Broadcasting mode Analog DTT (DVB-T) Satellite (DVB-S) Cable (DVB-C) Receptor TV Set-top box + TV Broadcasting licences (CSA) M6 licences DTT licences (M6, W9, Paris Première, TF6) DSL (DVB-P) Mobile Digital Television (DVB-H) Mobile device Authorization being defined (2006 law) 33