Vivendi : Shareholders newsletter – September 2020

TOGETHER	LETTER TO OUR
SHAREHOLDERS
SEPTEMBER 2020
EARNINGS P. 3	NEWS P. 4	DIARY P. 8
	- 2020 half-year	- Universal Music Group	- Shareholders' diary
	results	expands its global footprint	Vivendi and you

VALIDÉ, CRÉATION ORIGINALE OF CANAL+

© Fifou/Mandarin Télévision/Canal+

Photos/DR

GOOD

HALF-YEAR RESULTS

Yannick Bolloré,Chairman of the Supervisory board,

andArnaud de Puyfontaine,Chairman of the Management Board

VDear Shareholders,

ivendi has demonstrated its resilience over the past few unprecedented months by staying the strategic course set in 2014: to build a world leader in culture, at the crossroads of the entertainment, media and communications industries. Our group's business model is both coherent and diversified, which is a significant asset. Vivendi operates in a number of different sectors and countries, and can therefore offset the difficulties encountered in one market with a strong performance in another. In addition, the group's digital activities have been fully

developed, which proved advantageous during the lockdowns. Finally, the revenues generated from its two main businesses, music and audiovisual content, are directly or indirectly linked to subscriptions, a business model with recurring revenues.

In a very difficult environment, Vivendi generated an adjusted net income of €583 million in the first half of 2020, up 5.4%. For the second half, we are carefully analyzing the consequences of the crisis. Today, it is difficult to determine how it will impact the annual results. Nevertheless, Vivendi remains confident in the resilience of its main businesses, music and audiovisual content. Those tied to advertising and live performance may be affected for a more extended period than the others. More generally, the crisis has highlighted the essential role of entertainment in our society, as demonstrated, for example, by the increased consumption of video games over the past few months and the strong post-lockdown rebound of the publishing business.

In the first half, we also successfully finalized the sale of 10% of Universal Music Group's share capital to a Tencent-led consortium. Vivendi is pursuing its plan to sell additional minority interests in UMG, and the music giant is expected to go public in early 2023 at the latest.

Vivendi's balance sheet is particularly healthy. During the first half of 2020, its net financial debt fell by more than €1 billion to close to €3.1 billion as of June 30, representing a gearing rate of 17.5%. The group has significant financing capacity: at the end of the first half, its available credit lines stood at €3.7 billion. This financial strength allows Vivendi to face the future with confidence. We thank you for your loyalty and hope you enjoy this newsletter.

2 - LETTER TO OUR SHAREHOLDERS
	SEPTEMBER 2020

RESULTS

FIRST HALF OF 2020

Vivendi demonstrated resilience during the first half of 2020, which was impacted by public health restrictions related to the Covid-19 pandemic.

Its two main businesses, Universal Music Group (UMG) and Groupe Canal+, whose activities are mostly subscription-related, drove the group's performance.

Vivendi's consolidated adjusted net income totaled €583 million, a 5.4% increase compared to the first half of 2019, with revenues of €7,576 million, up 3.0% (- 2.0% at constant currency and perimeter). Adjusted net income does not include

the €2.4 billion capital gain realized on the sale of 10% of UMG's share capital and recognized in equity.

The group's balance sheet is particularly healthy. As of June 30, 2020, the gearing rate was 17.5%.

Vivendi is carefully analyzing the current and potential consequences of the crisis. It is difficult to determine how the crisis will impact its annual results. Businesses related to advertising and live performance are likely to be affected over a longer term than the others. Nevertheless, the group remains confident in the resilience of its core businesses. It continues to make every effort to ensure the continuity of its activities and to best serve and entertain its customers and audiences while complying with the authorities' guidelines in each country where it operates.

A review of the value of assets with an indefinite life was performed. Taking into account the performance of its businesses in the first half, Vivendi did not identify any indications of a decrease in the recoverable amount compared to December 31, 2019.

REVENUES

BY BUSINESS SEGMENT(1)

UNIVERSAL MUSIC GROUP	GROUPE CANAL+
€3,459 M	€2,674 M

ELIMINATION OF		HAVAS GROUP
INTERSEGMENT		€1,019 M
TRANSACTIONS		EDITIS
€(22) M
NEW INITIATIVES		€262 M
€28 M
VIVENDI VILLAGE	GAMELOFT
€26 M	€130 M

REVENUES(1)	EBITA(1)	ADJUSTED	EARNING ATTRIBUTABLE TO
		NET INCOME(1)	VIVENDI SE SHAREOWNERS(1)

€7,353 M	€7,576 M						€757 M
		€735 M
		€718 M
				€554 M	€583 M
						€520 M
2019	2020	2019	2020	2019	2020	2019	2020

As of June 30, 2020, in the context of the Covid-19 pandemic, Vivendi has not changed the definition of these indicators, which are therefore comparable to those for the fiscal year of 2019.

(1) Earnings as of June 30.

		LETTER TO OUR SHAREHOLDERS - 3
SEPTEMBER 2020

UMG expands its global footprint

In recent months, Universal Music Group (UMG) has stepped up its initiatives in Africa, Asia and Europe, including entering into key partnerships. These partnerships will allow UMG to discover and develop new local talent and help them to reach global audiences.

	n May, UMG launched Def Jam Africa. Based in	who has more than 18 million followers on the social
	South Africa and Nigeria, the label identify and	media platform Weibo. UMGC has always been
	sign talent from across the entire continent.	committed to finding talented local artists and
	Just two months later, Def Jam Africa announced	helping them reach global audiences. In July,
	its expansion into three new markets in French-	Universal Music India (UMI) announced an exclusive
Ispeaking Africa: Côte d'Ivoire, Senegal and Cameroon.	multi-year, global distribution deal with leading Indian
Also in May in Africa, Universal Music France launched	music company Desi Melodies - Desi Melodies has
a global strategic partnership with The Aristokrat	led the contemporary wave of global Punjabi music
group, a prominent African entertainment company	success - and Universal Music Philippines (UMP)
with more than a decade of experience developing	launched Island Records Philippines, the first division
young African talent.	within Asia for the label which was founded
In June, in Europe, UMG entered into a global	60 years ago in Jamaica.
partnership with leading Italian music company Sugar
Music. This agreement extends a twenty-five-year
relationship between the two groups, having forged a
successful working partnership across numerous
groundbreaking projects including the Andrea Bocelli
record-breaking, Easter performance in Milan. In the
same month, UMG also announced a significant
expansion in the Middle East and North Africa, with the
opening of new offices in Morocco and Israel, adding
to its existing presence in more than 60 countries.
In June in Asia, Universal Music Greater China (UMGC)		UMG/DR
of China's most popular girl group Rocket Girls 101,
signed the Thai pop star Sunnee, a former member

NEWS

Vivendi, Lagardère's largest shareholder of

Vivendi, following the sale of 10% of the share capital of Universal Music Group, decided to use part of the cash from this sale to acquire shares of Lagardère SCA (Lagardère). As of

August 11, 2020, the group held 23.5% of Lagardère's share capital. This acquisition demonstrates Vivendi's confidence in the outlook for Lagardère's main businesses. Lagardère Publishing, with Hachette Livre, is the world's third-largest private publisher for the general

public and educational markets. Lagardère Travel Retail, present in 39 countries and territories, is a global leader in the travel retail industry. The group also owns Lagardère News (Paris Match, Europe 1, Le Journal du Dimanche, etc.) and Lagardère Live Entertainment.

On August 11, 2020, after the very poor results announced by Lagardère and despite their divergent views, Vivendi and Amber Capital, respectively, the first and second-largest shareholders of Lagardère, announced that they signed a pact. The two groups are seeking minority representation on Lagardère's Supervisory Board, three members for Amber Capital and one member for Vivendi.

They also entered into a five-year reciprocal right of first offer and preemption rights agreement. After Lagardère's Supervisory Board and Managing Partners rejected the respective proposals of Amber Capital and Vivendi,

the two companies filed a request with the Paris Commercial Court seeking the convening of a Shareholders' Meeting.

4 - LETTER TO OUR SHAREHOLDERS
	SEPTEMBER 2020