Page 12 - 2012 Annual Report

VIVENDI l 2012 l Annual Report 12
GROUP PROFILE – BUSINESSES – LITIGATION – RISK FACTORS 1
1
SECTION 1 - GROUP PROFILE
FINANCIAL COMMUNICATION POLICY AND VALUE CREATION
GVT
In Brazil, GVT’s revenues continue to rise sharply, due to increasingly
extensive network coverage and the successful launch of an innovative
Pay-TV service. As of the beginning of 2013, GVT operates in 139
municipalities. The company has more than 400,000 Pay-TV customers,
one year after the service was launched. The launch of Pay-TV was an
important step for GVT: it enabled it to consolidate its position with
attractive triple-play offers capable of rivaling those of cable and further
differentiating the company from historical operators.
This project and its roll-out have required heavy investment, facilitated
by financial support from Vivendi. Nevertheless, GVT’s ability to generate
cash flow continues to increase and the telecoms business now benefits
from a balanced EBITDA - CAPEX flow.
In 2013, after receiving approval in 2012, GVT began rolling out its network
in São Paulo, while continuing to expand throughout the state. The
strategy to roll out services in this area, which is considerably wealthier
and more sensitive to service quality than the rest of the country, was
designed to complement GVT’s national presence and should consolidate
its growth at a very high level.
1.4. FINANCIAL COMMUNICATION POLICY AND VALUE CREATION
To continue creating value, the Group needs to increase the profitability of
its operations. This requires investment and innovation. With this in mind,
Vivendi bases its investment decisions on several criteria:
✱ expected growth resulting from investment, as well as its impact on
the growth of adjusted net income per share and on cash flow;
✱ the profitability of the investment against the assessed financial
risk; and
✱ in-depth assessment of non-financial risks (geopolitical or currency
risks, for example).
All investment projects are reviewed first by the Investment Committee
and then by Vivendi’s Management Board. The most significant
investments are reviewed by the Supervisory Board’s Strategy Committee
and are then subject to approval by the Supervisory Board itself.
For major transactions, a systematic post-acquisition audit is performed
to compare actual operational and financial results with the assumptions
made during the investment decision process. The conclusions drawn from
this audit are used to promote best practices within the Group.
1.4.2. Financial Communication Policy
1.4.2.1. GOALS AND MEANS OF VIVENDI’S FINANCIAL
COMMUNICATIONS
Vivendi’s financial communications have a clear goal: to provide all
shareholders, analysts and investors with fair, accurate and transparent
information on the Group’s position, while ensuring that these
communications comply with laws, standards and procedures applicable
in France, including the French Financial Security Act, IFRS (International
Financial Reporting Standards) and benchmarks set out in the Committee
of Sponsoring Organisation of the Treadway Commission (“COSO”) report.
Vivendi’s Investor Relations department, based in both Paris and
New York, maintains close, permanent relationships with analysts at
brokerage firms and investment funds. The department provides them
with information about the Group on a regular basis so that the financial
markets can anticipate events and have a better understanding of their
impact on the Group’s current and future performance. At the same time,
the Investor Relations department continually feeds and updates the
Investors/Analysts pages atwww.vivendi.com, which are aimed primarily
at institutional investors.
Vivendi also provides financial information to institutional investors
through meetings organized in the main global financial markets and
participation of executives from head office and Group businesses in
investor conferences.
A total of 443 “events” (e.g., road shows,(1) investor conferences,(2) and
meetings at Vivendi’s head office or at the offices of subsidiaries) were
organized in 2012 in Europe, the United States and Asia. These were
an opportunity for executives from Vivendi and its subsidiaries to meet
representatives from 470 financial institutions and present the Group’s
results and outlook.
Lastly, Vivendi is developing ad hoc communications for analysts and
investors who specialize in socially responsible investment.
(1) In some 30 countries in 2012.
(2) Vivendi and its subsidiaries participated in 12 investor conferences in 2012.
1.4.1 Investment Policy