• Strong growth in streaming and subscriptions for
UMG
• The difficult situation for Canal+ channels1
in France offset by Canal+ Group’s other operations, in
particular in international markets
Regulatory News:
Vivendi (Paris:VIV):
Note: This press release contains unaudited consolidated
earnings established under IFRS, which were approved by Vivendi’s
Management Board on May 9, 2016, reviewed by the Vivendi Audit
Committee on May 10, 2016, and by Vivendi’s Supervisory Board on
May 11, 2016.
2016 first quarter key
figures2
Changeyear-on-year
Change at constantcurrency andperimeter3
year-on-year
€2,491 M
NS
-1.4%
IFRS measures
- EBIT4
- Earnings attributable to Vivendi SA shareowners4
€968 M
€862 M
x8.3
x25.9
Adjusted measures5
€228 M +4.5% +9.9%
€213 M -2.5% +3.6%
€99 M -27.3%
Excluding the unfavorable tax impact of
€41M related to the reversal of reserve followingsettlement of the
Liberty Media litigation, adjusted net income4 was
€140 M (+3.1%)
Cash
+€4.8bn vs. +€6.4bn as of December 31,
2015
Vivendi's Supervisory Board met today under the chairmanship of
Vincent Bolloré and reviewed the Group’s Condensed Financial
Statements for the first quarter ended March 31, 2016, which were
approved by the Management Board on May 9, 2016.
Revenues remained stable at €2.491 billion (-1.4% at
constant currency and perimeter compared to the first quarter of
2015). At constant currency and perimeter, income from
operations was up 9.9% and EBITA up 3.6% due to
restructuring charges. Universal Music Group’s growth resulted from
the significant increase in streaming and subscriptions, tempered
by the significant decrease in download revenues. The good
performance of Canal+ Group’s international pay-TV operations was
offset by increased losses suffered by Canal+ channels in
France.
These channels are negatively impacted by a difficult economic
environment, increased competition from national and international
players, and the skyrocketing prices for certain broadcasting
rights. A major transformation plan has been implemented over the
past months to restore value to the offer and to tailor it for each
customer segment. Efficiency and cost control measures have also
been put into place. Furthermore, Canal+ Group and beIN Sports
entered into an exclusive distribution agreement. This agreement,
which requires the approval of the French Competition Authority,
would be beneficial to beIN Sports, which would benefit from
Canal+’s distribution strength, as well as to the customers of both
companies who would have access to a comprehensive offering.
Adjusted net income was a profit of €99 million, down
27.3%. Adjusted net income would have amounted to €140 million, up
3.1% excluding the negative non-recurring tax impact of €41 million
due to the reversal of reserve following settlement of the Liberty
Media litigation (settlement agreement entered into in February
2016). Adjusted net income per share was €0.08, compared to €0.10
for the same period in 2015.
Earnings attributable to Vivendi SA shareowners amounted
to €862 million, compared to €33 million for the first quarter of
2015, thanks to the €576 million capital gain before taxes related
to the sale of the remaining interest in Activision Blizzard in
January 2016 and the reversal of reserve for €240 million following
settlement of the Liberty Media litigation. Earnings per share
attributable to Vivendi SA shareowners amounted to €0.66, compared
to €0.02 for the same period in 2015.
The Group's net cash position as of March 31, 2016
amounted to €4.8 billion, compared to €6.4 billion as of December
31, 2015. This change resulted in particular from the payment in
February of an interim dividend of €1 per share, representing an
aggregate payment of approximately €1.32 billion.
A world leader in media and content with a
strong presence in Southern Europe
In recent months, Vivendi consolidated its positions in the
production and distribution of content by making acquisitions
through Studiocanal of interests in several TV production companies
in Spain and in the United Kingdom (33% of Bambu Producciones, 20%
of Urban Myth Films and 20% of SunnyMarchTV). In February 2016, the
Group completed its acquisition of a 26.2% interest in Banijay
Group, one of the world's largest producers and distributors of
television programs.
In addition, Vivendi has entered into a strategic and industrial
agreement with Mediaset, a leader in free-to-air and pay TV in
Italy and Spain. Under this agreement6, Vivendi will swap a 3.5%
interest in Vivendi in exchange for a 3.5% interest in Mediaset and
100% of the share capital of the pay-TV company Mediaset Premium.
Vivendi and Mediaset intend to form an international partnership to
produce and distribute audiovisual programs and develop an
"over-the-top" (OTT) Internet TV platform.
In France, Vivendi will acquire a minority interest of 15% in
Groupe Fnac7 in the context of a cooperation project dedicated to
cultural activities.
Vivendi has confirmed its intention to be a long-term
shareholder of Telecom Italia in which it currently holds 24.7% of
the ordinary shares. As an industrial investor, it intends to
support the development of this transalpine operator by providing
its expertise and accelerating its content distribution activities.
The Group also holds 0.95% of Telefonica, which will allow it to
expand its content distribution network, particularly in Latin
America.
A major producer of mobile content
The Group intends to increase its original content creation
activities, including for mobile devices as the consumption of
short formats on mobile devices explodes.
Through its subsidiary Vivendi Content, the Group launched
Studio+, the first global offering of premium series for mobile
devices. Studio+ will produce exclusive premium series created
specifically for smartphones and tablets as well as a dedicated
App. Immediately upon its launch, Studio+ will offer 25 complete
original series. Among other parts of the world, Studio+ will be
available in Latin America in a few months thanks to a cooperation
with Telefonica.
Video games, a growing content
sector
Vivendi filed a public tender offer for the shares of Gameloft
(after crossing the 30% legal threshold in the share capital on
February 18, 2016) and has invested in Ubisoft (holding a 17.7%
interest as of April 27, 2016), two leading video game companies.
These investments are part of a strategic vision of operational
convergence between Vivendi’s content and platforms and the games
produced by these two companies.
Comments on Business Highlights
Universal Music Group
Universal Music Group’s (UMG) revenues were €1,119 million, up
0.6% at constant currency compared to the first quarter of 2015
(+1.9% on an actual basis).
Recorded music revenues grew 0.5% at constant currency thanks to
growth in subscription and streaming revenues (+59.7%) despite the
accelerated decline in download sales and the continued decrease in
physical sales.
Music publishing revenues grew 0.3% at constant currency, while
merchandising and other revenues declined by 6.9% at constant
currency due to lower touring activity.
Recorded music best sellers for the first quarter of 2016
included carryover sales from Justin Bieber and The Weeknd, as well
as new releases from Rihanna and the Japanese artist Tsuyoshi
Nagabuchi.
UMG’s income from operations was €102 million, up 18.6% at
constant currency compared to the first quarter of 2015 (+15.8% on
an actual basis) after adjusting for restructuring charges, as a
result of lower operating expenses, due to a softer release
schedule compared to the first quarter of 2015.
UMG’s EBITA was €79 million, marginally down 0.2% at constant
currency compared to the first quarter of 2015 (-4.0% on an actual
basis) as the benefits of higher revenues and cost savings were
offset by increased restructuring charges.
Canal+ Group
Canal+ Group’s revenues amounted to €1,328 million, down 3.1%
compared to the first quarter of 2015 (-2.8% at constant currency).
Canal+ Group had a total of 15.4 million subscriptions, a
year-on-year increase of 170,000, driven by the very strong
performance of pay-TV operations in Africa. In France,
subscriptions (with commitment) continued to decline to 8.276
million as of March 31, 2016, representing a decrease of 183,000
over the quarter.
Revenues from pay-TV operations in mainland France were notably
impacted by fewer subscriptions, despite a slight increase in ARPU.
International pay-TV revenues increased, thanks to growth in the
individual subscriber base, notably in Africa where Canal+ Group
had 500,000 more subscribers compared to the end of March 2015. In
February, Canal+ and Iroko launched in Africa Iroko+, a video on
demand service dedicated to mobile phones offering subscribers over
1,500 hours of videos in French.
Advertising revenues from free-to-air channels, up 11.5%
compared to the first quarter of 2015, benefited from the strong
audiences of D8 and D17. At the end of March 2016, D8 was once
again the leading DTT channel in France holding a 5% share of its
primary target audience of 25-49 year olds.
Studiocanal’s revenues were down compared to the first quarter
of 2015, which period notably benefited from the successful
theatrical release of Shaun the Sheep in Germany and the video
releases of Paddington and The Imitation Game in the United
Kingdom.
Canal+ Group’s income from operations increased by 6.4% to
€164 million, compared to €154 million for the first
quarter of 2015, and EBITA rose year-on-year to €169 million,
compared to €165 million for the first quarter of 2015. This
slight increase was driven by the strong development of
international pay-TV operations, as well as the favorable, but
temporary, impact of the phasing of costs. Canal+ channels in
France suffered an operating loss of €59 million, compared to
€50 million for the first quarter of 2015.
Vivendi Village
Vivendi Village’s revenues amounted to €25 million, up 2.4%
compared to the first quarter of 2015 (-6.9% at constant currency
and perimeter). Several new entities joined Vivendi Village last
year, including Le Théâtre de l‘Oeuvre in Paris and Radionomy.
MyBestPro recorded a particularly good performance during the
quarter.
Over the same period, Vivendi Village’s income from operation
was a loss of €4 million, related to new projects’ development
costs. Vivendi Village aims to serve as a laboratory for ideas and
a place for experimentation for the entire Vivendi Group thanks to
the flexibility of its small organizational structures.
In the coming months, Vivendi Village will launch CanalOlympia,
a network of cinema and performance venues in Central and Western
Africa. The opening of the first of these venues will take place on
June 14, 2016 in Yaoundé, Cameroon.
A number of initiatives have also been taken at L’Olympia to
expand target audiences at the iconic Paris music hall, including
hosting the "Olympia by Night" concerts in late evenings and
organizing a photo exhibition "The Olympia, yesterday, today and
tomorrow" during the day.
For its part, Watchever, a video-on-demand subscriptions service
in Germany, continues to diversify and expand its offer and
services. It is developing a mobile application which will enable
it to distribute the Studio+ premium series in the coming
months.
For additional information, please refer to the “Financial
Report and Unaudited Condensed Financial Statements for the first
quarter ended March 31, 2016” which will be released later online
on Vivendi’s website (www.vivendi.com).
About Vivendi
Vivendi is an integrated media and content group. The company
operates businesses throughout the media value chain, from talent
discovery to the creation, production and distribution of content.
The main subsidiaries of Vivendi comprise Canal+ Group and
Universal Music Group. Canal+ Group is the leading pay-TV operator
in France, and also serves markets in Africa, Poland and Vietnam.
Canal+ Group’s operations include Studiocanal, a leading European
player in production, sales and distribution of film and TV series.
Universal Music Group is the world leader in recorded music, music
publishing and merchandising, with more than 50 labels covering all
genres. A separate division, Vivendi Village, brings together
Vivendi Ticketing (ticketing in the UK, the U.S and France),
MyBestPro (experts counseling), Watchever (subscription
video-on-demand), Radionomy (digital radio), the Paris-based
concert venue L’Olympia, the future CanalOlympia venues in Africa
and the Theatre de l‘Oeuvre in Paris. With 3.5 billion videos
viewed each month, Dailymotion is one of the biggest video content
aggregation and distribution platforms in the world.
www.vivendi.com, www.cultureswithvivendi.com
Important Disclaimers
Cautionary Note Regarding Forward-Looking Statements. This press
release contains forward-looking statements with respect to the
financial condition, results of operations, business, strategy,
plans and outlook of Vivendi, including the impact of certain
transactions and the payment of dividends and distributions as well
as share repurchases. Although Vivendi believes that such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance. Actual
results may differ materially from the forward-looking statements
as a result of a number of risks and uncertainties, many of which
are outside our control, including, but not limited to, the risks
related to antitrust and other regulatory approvals as well as any
other approvals which may be required in connection with certain
transactions and the risks described in the documents of the Group
filed by Vivendi with the Autorité des Marchés Financiers (the
French securities regulator), which are also available in English
on Vivendi's website (www.vivendi.com). Investors and security
holders may obtain a free copy of documents filed by Vivendi with
the Autorité des Marchés Financiers at www.amf-france.org, or
directly from Vivendi. Accordingly, we caution readers against
relying on such forward looking statements. These forward-looking
statements are made as of the date of this press release. Vivendi
disclaims any intention or obligation to provide, update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Unsponsored ADRs. Vivendi does not sponsor an American
Depositary Receipt (ADR) facility in respect of its shares. Any ADR
facility currently in existence is “unsponsored” and has no ties
whatsoever to Vivendi. Vivendi disclaims any liability in respect
of any such facility.
ANALYST CONFERENCE CALL
Speakers:Arnaud de PuyfontaineChief Executive
OfficerHervé PhilippeMember of the Management Board and
Chief Financial Officer
Date: Wednesday, May 11, 20166:00pm Paris time – 5:00pm
London time – 12:00pm New York time
Media invited on a listen-only basis.
Internet: The conference can be followed on the Internet
at: www.vivendi.com (audiocast)The conference will be held in
English.
Numbers to dial:UK + 44 (0) 203 427 19 08US +
1 646 254 33 88France + 33 (0) 170 99 42 77Access Code:
8516142
Numbers for replay :UK + 44 (0) 203 427
0598US + 1 347 366 9565France: + 33 (0) 174 20
28 00Access code: 8516142
On our website www.vivendi.com will be available dial-in
numbers for the conference call and for replay (14 days), an audio
webcast and the slides of the presentation.
APPENDIX I
VIVENDI
CONSOLIDATED STATEMENT OF
EARNINGS
(IFRS, unaudited)
Three months ended March 31,
%Change
2016 2015
Revenues 2,491 2,492 -
Cost of revenues (1,510) (1,510) Selling, general and
administrative expenses excluding amortization of intangible assets
acquired through business combinations (747) (757) Restructuring
charges (21) (7) Amortization of intangible assets acquired through
business combinations (55) (98) Reversal of reserve related to the
Liberty Media litigation in the United States 240 - Other income
580 1 Other charges (10) (4)
EBIT 968 117 x
8.3 Income from equity affiliates (13) (6) Interest (8) (5)
Income from investments 1 9 Other financial income 6 12 Other
financial charges (13) (18)
Earnings from continuing operations
before provision for income taxes 941 109 x
8.7 Provision for income taxes (65) (76)
Earnings from
continuing operations 876 33 x 27.0
Earnings from discontinued operations (1) 17
Earnings
875 50 x 17.7 Non-controlling interests (13)
(17)
Earnings attributable to Vivendi SA shareowners
862 33 x 25.9 of which earnings from
continuing operations attributable to Vivendi SA shareowners
863 16 x 52.9 Earnings attributable to Vivendi
SA shareowners per share - basic 0.66 0.02 Earnings attributable to
Vivendi SA shareowners per share - diluted 0.66 0.02
In millions of euros, per share amounts in euros.
Nota:
As a reminder, GVT (sold in 2015) has been reported as a
discontinued operation in compliance with IFRS 5. In practice,
income and charges from these businesses have been reported as
follows:
- GVT’s contribution, until its effective
divestiture on May 28, 2015, to each line of Vivendi’s Consolidated
Statement of Earnings as well as any capital gain recognized has
been reported on the line “Earnings from discontinued operations”;
and
- the share of net income and the capital
gain recognized as a result of the completed divestiture have been
excluded from Vivendi’s adjusted net income.
For any additional information, please refer to the “Financial
Report and Unaudited Condensed Financial Statements for the first
quarter ended March 31, 2016“», which will be released online later
on Vivendi’s website (www.vivendi.com).
APPENDIX II
VIVENDI
ADJUSTED STATEMENT OF EARNINGS
(IFRS, unaudited)
Three months ended March 31,
%Change
2016 2015
Revenues 2,491 2,492 -
Income from operations 228 218 + 4.5%
EBITA 213 218 - 2.5% Income from equity
affiliates (13) (6) Interest (8) (5) Income from investments 1 9
Adjusted earnings from continuing operations before provision for
income taxes 193 216 - 10.7% Provision for income taxes (78) (61)
Adjusted net income before non-controlling interests 115 155 -
25.8% Non-controlling interests (16) (19)
Adjusted net
income 99 136 - 27.3% Adjusted net
income per share - basic 0.08 0.10 Adjusted net income per share -
diluted 0.08 0.10
In millions of euros, per share amounts in euros.
The reconciliation of EBIT to EBITA and to income from
operations, as well as of earnings attributable to Vivendi SA
shareowners to adjusted net income is presented in the Appendix
IV.
APPENDIX III
VIVENDI
REVENUES, INCOME FROM OPERATIONS AND
EBITA
BY BUSINESS SEGMENT
(IFRS, unaudited)
Three months ended March
31, (in millions of euros) 2016 2015 % Change
% Change atconstantcurrency
% Change atconstantcurrency andperimeter
(a)
Revenues Universal Music Group 1,119 1,097 +1.9% +0.6% +0.6%
Canal+ Group 1,328 1,370 -3.1% -2.8% -2.8% Vivendi Village 25 25
+2.4% +2.8% -6.9% New Initiatives 30 - Elimination of intersegment
transactions (11) -
Total Vivendi
2,491 2,492 - -0.5% -1.4%
Income from operations Universal Music Group 102 88 +15.8%
+18.6% +18.6% Canal+ Group 164 154 +6.4% +7.0% +7.0% Vivendi
Village (4) 4 na na na New Initiatives (9) - Corporate (25) (28)
Total Vivendi 228 218
+4.5% +6.2% +9.9% EBITA
Universal Music Group 79 82 -4.0% -0.2% -0.2% Canal+ Group 169 165
+2.7% +3.3% +3.3% Vivendi Village - 4 na na na New Initiatives (10)
- Corporate (25) (33)
Total Vivendi
213 218 -2.5% -0.6% +3.6%
na: not applicable.
- Constant perimeter reflects the impacts
of the acquisitions of Dailymotion on June 30, 2015 within New
Initiatives and of Radionomy on December 17, 2015 within Vivendi
Village.
The reconciliation of EBIT to EBITA and to income from
operations is presented in the Appendix IV.
APPENDIX IV VIVENDI RECONCILIATION OF NON-GAAP
MEASURES
IN STATEMENT OF EARNINGS
(IFRS, unaudited)
Income from operations, adjusted earnings before interest and
income taxes (EBITA), and adjusted net income, non-GAAP measures,
should be considered in addition to, and not as a substitute for,
other GAAP measures of operating and financial performance. Vivendi
considers these to be relevant indicators of the group’s operating
and financial performance. Vivendi Management uses income from
operations, EBITA and adjusted net income for reporting, management
and planning purposes because they provide a better illustration of
the underlying performance of continuing operations by excluding
most non-recurring and non-operating items.
Three months ended March 31, (in millions of euros)
2016 2015
EBIT (a) 968 117 Adjustments
Amortization of intangible assets acquired through business
combinations 55 98 Impairment losses on intangible assets acquired
through business combinations (a) - - Reversal of reserve related
to the Liberty Media litigation in the United States (a) (240) -
Other income (a) (580) (1) Other charges (a) 10 4
EBITA
213 218 Adjustments Restructuring charges (a) 21 7
Charges related to equity-settled share-based compensation plans 2
2 Other non-current operating charges and income (8) (9)
Income
from operations 228 218
Three months ended March 31, (in millions of euros) 2016 2015
Earnings attributable to Vivendi SA shareowners (a)
862 33 Adjustments Amortization of intangible assets
acquired through business combinations 55 98 Reversal of reserve
related to the Liberty Media litigation in the United States (a)
(240) - Other income (a) (580) (1) Other charges (a) 10 4 Other
financial income (a) (6) (12) Other financial charges (a) 13 18
Earnings from discontinued operations (a) 1 (17) Change in deferred
tax asset related to Vivendi SA's French Tax Group and to the
Consolidated Global Profit Tax Systems 1 44 Non-recurring items
related to provision for income taxes 2 2 Provision for income
taxes on adjustments (16) (31) Non-controlling interests on
adjustments (3) (2)
Adjusted net income 99 136
a. As reported in the Consolidated Statement of Earnings.
APPENDIX V
VIVENDI
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
(IFRS, unaudited)
(in millions of euros)
March 31, 2016(unaudited)
December 31,2015
ASSETS Goodwill 10,004 10,177 Non-current content assets
2,201 2,286 Other intangible assets 213 224 Property, plant and
equipment 711 737 Investments in equity affiliates 3,934 3,435
Non-current financial assets 1,953 4,132 Deferred tax assets 671
622
Non-current assets 19,687 21,613
Inventories 118 117 Current tax receivables 428 653 Current content
assets 950 1,088 Trade accounts receivable and other 1,899 2,139
Current financial assets 944 1,111 Cash and cash equivalents 6,372
8,225
Current assets 10,711 13,333
TOTAL ASSETS 30,398 34,946
EQUITY AND LIABILITIES Share capital 7,526 7,526 Additional
paid-in capital 5,342 5,343 Treasury shares (1,859) (702) Retained
earnings and other 8,701 8,687
Vivendi SA shareowners'
equity 19,710 20,854 Non-controlling interests
244 232
Total equity 19,954 21,086
Non-current provisions 1,686 2,679 Long-term borrowings and other
financial liabilities 796 1,555 Deferred tax liabilities 658 705
Other non-current liabilities 72 105
Non-current liabilities
3,212 5,044 Current provisions 330 363
Short-term borrowings and other financial liabilities 1,703 1,383
Trade accounts payable and other 5,097 6,737 Current tax payables
102 333
Current liabilities 7,232 8,816
Total liabilities 10,444 13,860
TOTAL EQUITY AND LIABILITIES 30,398 34,946
1 Canal+, Canal+ Cinéma, Canal+ Sport, Canal+ Séries, Canal+
Family and Canal+ Décalé.
2 In compliance with IFRS 5, GVT (sold on May 28, 2015), has
been reported as a discontinued operation. In practice, income and
charges from this business have been reported as follows:
- GVT’s contribution until its effective
divestiture, to each line of Vivendi’s Consolidated Statement of
Earnings has been reported on the line “Earnings from discontinued
operations”; and
- the share of net income and the capital
gain recognized as a result of the divestiture have been excluded
from Vivendi’s adjusted net income.
3 Constant perimeter allows for the restatement of the impacts
of the acquisitions of Dailymotion on June 30, 2015 and Radionomy
on December 17, 2015.
4 A reconciliation of EBIT to EBITA and to income from
operations, as well as a reconciliation of earnings attributable to
Vivendi SA shareowners to adjusted net income, are presented in
Appendix IV.
5 Non GAAP measures.
6 This transaction is subject to approval by the relevant
regulatory authorities.
7 Agreement submitted to the vote of Groupe Fnac’s General
Shareholders’ Meeting.
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