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    VIV   FR0000127771

VIVENDI SE

(VIV)
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Vivendi : PR210728 H1 2021 Vivendi earnings

07/28/2021 | 12:24pm EDT
Vivendi: Very good results for the first half of 2021

Paris, July 28, 2021

  • Revenues of €8.2 billion, up 11.9% at constant currency and perimeter compared to the first half of 2020
  • EBITA up 49.3% at constant perimeter and currency. All businesses are growing:
    • Universal Music Group (UMG): +38%
    • Canal+ Group: +10%
    • Havas Group: +92%
    • Editis: +€10M v. -€21M
  • Adjusted net income of €724 million, up 24.1% compared to the first half of 2020
  • Net debt decreased to €2.9 billion as of June 30, 2021, compared to €4.95 billion as of December 31, 2020. Over the same time period, the gearing decreased to 14.9% as of June 30, 2021, compared to 30.1% as of December 30, 2020, boosted by the sale of 10% of UMG's share capital at the beginning of the year
  • Pursuit of the planned distribution of 60% of UMG's share capital to Vivendi shareholders and UMG's listing on Euronext Amsterdam on September 21, 2021

% change

FIRST HALF 2021 KEY FIGURES

% change

year-on-year

at constant

(In millions of euros)

year-on-year

currency and

perimeter1

Revenues

€8,221 M

+ 8.5 %

+11.9 %

EBITA2,3

€1,066 M

+ 45.0 %

+49.3 %

EBIT3

€973 M

+ 47.3 %

Adjusted Net Income2

€724 M

+24.1 %

Net debt

€2,878 M

€4,953 M

as of Dec 31, 2020

  1. Constant perimeter notably reflects the impact of the acquisition of Prisma Media, consolidated since May 31, 2021.
  2. Non-GAPPmeasures.
  3. A reconciliation of EBIT to EBITA are presented in Appendix I.

1

This press release contains un-audited consolidated financial figures established under IFRS, which were approved by Vivendi's Management Board on July 26, 2021, reviewed by Vivendi's Audit Committee on July 26, 2021, and by Vivendi's Supervisory Board on July 28, 2021 under the chairmanship of Yannick Bolloré.

For the first half of 2021, Vivendi's revenues were €8,221 million, compared to €7,576 million for the same period in 2020. This 8.5% increase is mainly due to the growth of Universal Music Group (UMG), Canal+ Group, Havas Group and Editis. It also included the impact of the consolidation of Prisma Media as from June 1, 2021 (+€29 million).

At constant currency and perimeter1, Vivendi's revenues grew by 11.9% compared to the first half of 2020. This increase was mainly due to the growth of UMG (+17.3%), Canal+ Group (+4.7%), Havas Group (+7.1%) and the strong recovery of Editis (+42.0%), which had been particularly affected by the health crisis during the first half of 2020.

For the second quarter of 2021, Vivendi's revenues were €4,320 million, an increase of 16.6%, compared to +0.8% for the first quarter of 2021. This increase was mainly due to the growth of UMG, Canal+ Group, Havas Group and Editis. It also included the impact of the consolidation of Prisma Media as from June 1, 2021.

At constant currency and perimeter1, Vivendi's revenues grew by 18.9% compared to the second quarter of 2020 (compared to +5.0% for the first quarter of 2021). This increase was mainly due to the growth of UMG (+25.5%), Canal+ Group (+9.8%), Havas Group (+13.6%) and the strong recovery of Editis (+43.4%).

EBITA was €1,066 million, an increase of 45.0% compared to the first half of 2020. At constant currency and perimeter1, EBITA increased by +49.3%, primarily driven by the growth of UMG, Canal+ Group, Havas Group and Editis.

EBIT was €973 million, an increase by 47.3% compared to the first half of 2020.

Income from investments was €117 million, compared to €15 million for the first half of 2020. For the first half of 2021, it notably included the dividend received from Mediaset (€102 million, i.e. €0.30 per share).

Other financial charges and income were a net charge of €157 million, compared to a net income of €417 million for the first half of 2020. This change mainly reflected the decrease in the value of the investments in Spotify and Tencent Music Entertainment, i.e., a charge of €170 million for the first half of 2021, compared to a revaluation income of €449 million for the same period in 2020.

In addition, on January 29, 2021, the sale of an additional 10% of UMG's share capital to a Tencent-led consortium was recorded, in accordance with IFRS standards, as a sale of non-controlling interests and therefore did not impact the Consolidated Financial Statement of Earnings for the first half of 2021. As a result, in accordance with IFRS 10, this capital gain on the sale of an additional 10% of UMG's share capital was directly recorded as an increase in equity attributable to Vivendi SE shareowners for €2,357 million.

Provision for income taxes reported to net income was a net charge of €277 million, compared to a net charge of €299 million for the same period in 2020. This decrease notably reflected the change in deferred tax liabilities relating to the revaluation of the investments in Spotify and Tencent Music Entertainment (deferred tax income of €30 million, compared to a deferred tax charge of €110 million for the first half of 2020), partially offset by the increase of €100 million in provision for income taxes reported to adjusted net income.

2

Earnings attributable to non-controllinginterests were €109 million, compared to €84 million for the first half of 2020. This increase notably reflected the additional 10% held by the Tencent-led consortium's share of UMG's net earnings since January 29, 2021.

Earnings attributable to Vivendi SE shareowners amounted to a profit of €448 million (or €0.45 per share - basic), compared to €757 million for the first half of 2020 (or €0.66 per share - basic), a decrease of 35.5%. This decrease mainly reflected the unfavorable change in other charges and financial income (-€574 million) primarily relating to the decrease in the value of the investments in Spotify and Tencent Music Entertainment, partially offset by the growth in EBITA (+€331 million).

Adjusted net income was a profit of €724 million (or €0.67 per share - basic), compared to €583 million for the first half of 2020 (or €0.51 per share - basic), an increase of 24.1%.

As of June 30, 2021, Vivendi's Financial Net Debt amounted to €2,878 million, compared to a Financial Net Debt of €4,953 million as of December 31, 2020. The gearing ratio decreased to 14.9% as of June 30, 2021, compared to 30.1% as of December 31, 2020 boosted by the sale of a 10% stake in UMG at the beginning of the year.

After the repayment by UMG of its net debt (€2. Billion) to Vivendi on July 7, 2021, and the expected sale of an additional 10% of UMG's share capital, Vivendi's adjusted cash position should amount to more than €2.4 billion.

After these transactions, Vivendi will have financial flexibility of about €10 billion, including cash, liquid equity securities and significant financing resources.

Vivendi expects to use its cash to finance acquisitions, make returns to shareholders, notably through share buybacks, and reduce its debt.

Planned distribution of 60% of UMG's share capital to Vivendi's shareowners

The Extraordinary General Shareholders' Meeting of March 29, 2021, voted in favor of amending Vivendi's bylaws to introduce the principle of distributions in kind, which would allow for the distribution of 60% of UMG's share capital to Vivendi's shareholders. The Combined General Shareholders' Meeting of June 22, 2021 approved this proposed distribution with a record affirmative vote of 99.9%, demonstrating the shareholders' full support for the strategy proposed to them and the methods chosen by the Management Board to carry out this transaction.

As a reminder, the consortium led by Tencent holds 20% of UMG's share capital. Vivendi will retain 10% following the distribution.

In addition, the Group has accepted the request of Pershing Square Tontine Holdings Ltd. (PSTH) to have investment funds in which Mr. William Ackman holds a significant economic interest or exercises management authority become substitute purchasers for the acquisition of 10% of the share capital of UMG announced on June 20, 2021. The percentage of UMG's share capital that will ultimately be acquired will be between 5% and 10%. Should this percentage be lower than 10%, Vivendi intends to sell the shortfall to other investors before

3

the distribution of 60% of UMG's capital to Vivendi's shareholders. UMG's listing and the detachment of the distribution are scheduled for September 21, 2021.

Regarding the proposed listing of UMG shares on the regulated market of Euronext Amsterdam, UMG BV will hold a Capital Market Day by videoconference on August 25, 2021.

Prisma Media

On May 31, 2021, Vivendi completed the acquisition of 100% of Prisma Media (the Group had signed a put option agreement with Gruner+Jahr/Bertelsmann on December 23, 2020). The transaction is in line with the Group's media development strategy, as it gains a foothold in an industry that is highly complementary to its existing activities.

Prisma Media is the number one magazine publisher in France, in print and digital, with some 20 leading brands and 1,200 employees.

Paris Commercial Court rulings in favor of Vivendi

On July 7, 2021, the Paris Commercial Court issued several decisions in favor of Vivendi. The court dismissed the entirety of the claims of several institutional investors who were excluded from a U.S. class-action lawsuit. They had sought financial damages for losses resulting from the disclosure of allegedly false financial information by Vivendi's former management between 2000 and 2002. These decisions are consistent with those already handed down in France on this issue and on facts dating back some twenty years.

Agreement between Vivendi, Fininvest and Mediaset

On July 22, 2021, the global agreement between Vivendi, Fininvest and Mediaset was finalized. The agreement put an end to their disputes, mutually waiving all pending lawsuits and complaints.

In particular, Fininvest acquired 5.0% of the share capital of Mediaset held directly by Vivendi, at a price of €2.70 per share (taking into account the ex-dividend date and the dividend payment, which took place on July 19 and July 21, 2021, respectively).

As part of their agreements, Vivendi has undertaken to progressively sell on the market the entire 19.19% stake in Mediaset held by Simon Fiduciaria over a period of five years. Fininvest will have the right to purchase any unsold shares in each 12-month period at the established annual price.

Returns to shareholders

Following detachment on June 23, 2021, payment of the dividend of €0.60 per share, i.e., a total amount of €653 million, in respect of 2020, was made as from June 25, 2021. In addition, in the first quarter of 2021, share buybacks totaled €189 million.

4

On June 18, 2021, the Management Board decided to cancel 37.8 million treasury shares (3.18% of the share capital). On July 26, 2021, the Management Board decided to cancel an additional 40.9 million shares (3.56% of the share capital), i.e., a total of 78.7 million shares.

Vivendi currently directly holds 20.7 million of its own shares, representing 1.87% of its share capital.

Comments on the Businesses Key Financials

Universal Music Group

For the first half of 2021, Universal Music Group's (UMG) revenues amounted to €3,831 million, up 17.3% at constant currency and perimeter compared to the first half of 2020 (+10.7% on an actual basis).

Recorded music revenues grew by 20.0% at constant currency and perimeter. While the first quarter of 2020 benefited from the receipt of a digital royalty claim, revenues in the second quarter of 2020, particularly physical and ad-funded streaming revenues, were impacted by initial lockdown restrictions in response to the COVID-19 pandemic. In addition, the second quarter of 2021 benefited from a catch-up payment from a digital service provider.

Subscription and streaming revenues grew by 24.7%, and physical sales were up 40.1% compared to the first half of 2020.

Recorded music best sellers for the first half year of 2021 included a 'Best Of' release from BTS, new releases from Justin Bieber and Olivia Rodrigo and continued sales from The Weeknd, Pop Smoke and Ariana Grande.

In the United States, UMG had eight of the Top 10 albums for the first half of the year based on MRC data, including all of the Top 5. In the United Kingdom, UMG had seven of the Top 10 artists for the first half of the year, including Taylor Swift at No. 1.

On the Spotify global chart, UMG had the No. 1 song for 20 of the 26 weeks in the first half of 2021, with Olivia Rodrigo's "driver's license" and "Good 4 U", and Justin Bieber's "Peaches".

Music publishing revenues grew by 3.9% at constant currency and perimeter compared to the first half of 2020, driven by increased subscription and streaming revenues. The second quarter of 2020 benefited from the receipt of a digital royalty claim, separate from the one mentioned in respect of recorded music.

Merchandising and other revenues were up 22.2% at constant currency and perimeter compared to the first half of 2020, due to growth in retail and D2C (direct-to-consumer) activity, and despite the continued impact of the COVID-19 pandemic on touring activity.

UMG continues to lead the industry in creatively partnering with digital platforms to expand monetization opportunities for artists, and that has particularly been the case this year in social media and fitness. During the first half of 2021, UMG entered into a number of new agreements in the social media space, including with TikTok, Triller and Snap Inc., among others. UMG also announced a deal to serve as the first music partner to Liteboxer, a home-fitness boxing company. This follows a series of deals UMG has closed recently in the fitness and wellness space with companies including Calm and Equinox+.

5

Disclaimer

Vivendi SA published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 16:23:05 UTC.


© Publicnow 2021
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Sales 2021 17 252 M 20 231 M 20 231 M
Net income 2021 1 253 M 1 469 M 1 469 M
Net Debt 2021 1 949 M 2 285 M 2 285 M
P/E ratio 2021 9,83x
Yield 2021 5,96%
Capitalization 11 229 M 13 181 M 13 168 M
EV / Sales 2021 0,76x
EV / Sales 2022 0,68x
Nbr of Employees 42 800
Free-Float 62,1%
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Last Close Price 10,73 €
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Managers and Directors
Arnaud Roy de Puyfontaine Chairman-Management Board & CEO
Hervé Philippe Chief Financial Officer & Member-Management Board
Yannick Bolloré Chairman-Supervisory Board
Stéphane Roussel Chief Operating Officer & Member-Management Board
Caroline Le Masne de Chermont Senior VP-Legal Affairs, CSR & Compliance
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