Vivendi Se · EURONEXT:VIV
Vivendi — FY2018 Earnings Presentation
72 slides from Vivendi's earnings presentation, Feb 14, 2019
Slide 1: Full Year 2018 Results
February 14, 2019 FULL YEAR 2018 RESULTS IMPORTANT NOTICE: Financial Pour insérer results lafornotice, the fiscal cliquez year ended sur le bouton December « Formes 31, 2018» puis double-cliquez sur la version EN ou FR Financial dans lestatements dossier 02. audited Mentionsand prepared & Tags under
Slide 2: Business Update
ARNAUD DE PUYFONTAINE Chairman of the Management Board Chief Executive Officer BUSINESS UPDATE
Slide 3: FY 2018 Results
Full Year 2018 Results - February 14, 2019 FY 2018 RESULTS ■ Strong operating performances delivered by our main businesses: UMG, Canal+ Group and Havas ▪ Revenues up 11.3% yoy, +4.9% organically ▪ EBITA up 33.0% yoy, +24.7% organically ▪ Significant improvement in the profitability of our main busi
Slide 4: Net Cash Position
Full Year 2018 Results - February 14, 2019 NET CASH POSITION ■ Strong cash flow generation by our main businesses ▪ Group CFFO: €1.1 Bn, a €137 M increase, +14.1%* ▪ UMG: €838 M, +30.2 %* ▪ Canal+ Group: €259 M, +8.7%* ▪ Havas: €230 M ■ Proceeds from the sale of financial assets amounting to €2.3 Bn
Slide 5: Opening of UMG's Share Capital
Full Year 2018 Results - February 14, 2019 OPENING OF UMG’S SHARE CAPITAL ■ Continuation of the sale process for up to 50% of Universal Music Group’s share capital to one or more strategic partners ■ Corporate structure reorganization was completed at year-end 2018 ■ Launch of Vendor Due Diligence a
Slide 6: Completion of the Acquisition of Editis
Full Year 2018 Results - February 14, 2019 COMPLETION OF THE ACQUISITION OF EDITIS ■ Acquisition of 100% of the share capital of Editis was completed on January 31, 2019 based on an enterprise value of €900 M. This transaction resulted in an outflow of €833 M. ■ A new major step in the building of a
Slide 7: Shareholders' Meeting on April 15, 2019
Full Year 2018 Results - February 14, 2019 SHAREHOLDERS’ MEETING ON APRIL 15, 2019 ■ Share repurchase program ▪ Renewal of the authorizations granted to the Management Board by the Shareholders meeting of April 19, 2018 ‐ To repurchase shares of the company within the limit of 10% of the share capit
Slide 8: Financials
HERVE PHILIPPE Member of the Management Board Chief Financial Officer FINANCIALS
Slide 9: Contents
Full Year 2018 Results - February 14, 2019 SOMMAIRE 1 Disclosures 2 2018 Key Highlights 3 Group Results 4 Business Unit Performances 5 Conclusion 6 Appendices 9
Slide 10: Disclosures
Disclosures vivendi 10
Slide 11: Currencies and Scope of Consolidation
Full Year 2018 Results - February 14, 2019 CURRENCIES AND SCOPE OF CONSOLIDATION Main Changes ▪ Currencies Average rate over the period Q4 2017 Q4 2018 2017 2018 USD: 1.176 1.154 1.125 1.187 EUR vs. GBP: 0.885 0.886 0.874 0.884 JPY: 133 130 126 131 ▪ Scope of consolidation ▪ Havas has been consolida
Slide 12: IFRS
Full Year 2018 Results - February 14, 2019 IFRS Main Changes 2 new standards applied in 2018: ▪ IFRS 15 ▪ No material impact on Vivendi’s consolidated revenues and operating results ▪ In accordance with IFRS 15, Vivendi has applied this change of accounting standard to fiscal years 2017 and 2018. Th
Slide 13: 2018 Key Highlights
2018 Key Highlights vivendi
Slide 14: Key Financial Metrics
Full Year 2018 Results - February 14, 2019 KEY FINANCIAL METRICS D organic 2017 2018 D (%) In euro millions (%)* Revenues 12,518 13,932 +11.3% +4.9% EBITA 969 1,288 +33.0% +24.7% EBIT** 1,018 1,182 +16.1% Adjusted Net Income 1,300 1,157 -11.1% + 33,6% *** Capital gain on Ubisoft (before tax) 1,213 o
Slide 15: Good Performance of Our Main Businesses
Full Year 2018 Results - February 14, 2019 GOOD PERFORMANCE OF OUR MAIN BUSINESSES Strong improvement in profitability of Vivendi’s three main businesses in 2018 EBITA of €902 M, up 22.1%* yoy EBITA before restructuring charges of €428 M, up 21.8%* yoy EBITA before restructuring charges of €245 M, u
Slide 16: Changes in Cash Position
Full Year 2018 Results - February 14, 2019 CHANGES IN CASH POSITION (in euro billions) -0.6 +2.3 -0.3 0.2 Corresponding to the sale of : - Ubisoft : + €1.6 Bn - Telefonica : +€ 0.4 Bn +1.1 - Fnac Darty : +€ 0.3 Bn (2.3) Net Debt as of CFFO Disposal of Dividends paid to Interest, taxes Net Cash as of
Slide 17: Group Results
Group Results vivendi 17
Slide 18: Consolidated P&L
Full Year 2018 Results - February 14, 2019 The capital gain on Ubisoft was recognized in: - Equity for €1,160 M - The P&L for €53 M CONSOLIDATED P&L in accordance with IFRS 9 2017 2018 D (%) in euro millions Revenues 12,518 13,932 + 11.3% Income from operations 1,098 1,439 + 31.0% EBITA 969 1,288 +
Slide 19: Revenues by Business Unit
Full Year 2018 Results - February 14, 2019 REVENUES BY BUSINESS UNIT D organic 2017 2018 D (%) in euro millions - IFRS (%)* Universal Music Group 5,673 6,023 +6.2% +10.0% Canal+ Group 5,198 5,166 -0.6% -0.3% Havas** 1,211 2,319 na na Other businesses*** and intercompany elimination 436 424 -2.6% +4.
Slide 20: Revenues by Business Unit
Full Year 2018 Results - February 14, 2019 REVENUES BY BUSINESS UNIT Six-month organic growth trend H1 2018 H2 2018 2018 Organic growth* (in %) Universal Music Group +6.8% +12.8% +10.0% Canal+ Group +1.3% -1.8% -0.3% Havas - Net Revenues ** -2.9% +2.7% +0.1% Other businesses*** and intercompany elim
Slide 21: EBITA by Business Unit
Full Year 2018 Results - February 14, 2019 EBITA BY BUSINESS UNIT EBITA D organic 2017 2018 D (%) in euro millions (%)* Universal Music Group 761 902 +18.4% +22.1% Canal+ Group 300 400 +33.6% +32.8% Canal+ Group - EBITA before restructuring charges 349 428 +22.6% +21.8% Havas 111 215 na na Other bus
Slide 22: CFFO by Business Unit
Full Year 2018 Results - February 14, 2019 CFFO BY BUSINESS UNIT 2017 2018 D (%) in euro millions Universal Music Group 646 838 +29.8% Canal+ Group 238 259 +8.7% Havas* 308 230 na Other businesses** (203) (201) -0.9% CFFO - Vivendi 989 1,126 +13.8% * Havas has been consolidated since July 3, 2017. N
Slide 23: Consolidated Balance Sheet
Full Year 2018 Results - February 14, 2019 CONSOLIDATED BALANCE SHEET Assets Equity and Liabilities January 1, December 31, January 1, December 31, in euro millions 2018* 2018 in euro millions 2018* 2018 Goodwill 12,084 12,438 Consolidated equity** 17,856 17,534 Intangible and tangible assets 4,617
Slide 24: Liquidity and Capital Resources
Full Year 2018 Results - February 14, 2019 LIQUIDITY AND CAPITAL RESOURCES December 31, December 31, in euro millions 2017 2018 Cash and cash equivalents 1,951 3,793 Cash management financial assets 75 599 Gross cash position 2,026 4,392 Bonds (4,150) (4,050) Other financial liabilities, net (216) (
Slide 25: Business Unit Performances
Business Unit Performances 25
Slide 26: Universal Music Group
Universal Music Group vivendi 26
Slide 27: Universal Music Group
Full Year 2018 Results - February 14, 2019 UNIVERSAL MUSIC GROUP ▪ Revenues and EBITA continued to climb supported by the sustained growth trajectory of streaming services Change in revenues and organic growth* Change in EBITA and margin +10.0% +10.0% 1,000 16.0% +4.4% 15.0% +2.7% 900 14.0% -3.8% 80
Slide 28: Universal Music Group
Full Year 2018 Results - February 14, 2019 UNIVERSAL MUSIC GROUP Recorded music revenues Breakdown of recorded music by format – 2018 vs. 2017 Change in revenues* by format Streaming and subscriptions +37.3% +35.4% 16% 2,596 17% 1,971 1,483 2018 43% 20% 54% 2017 25% 2016 2017 2018 Revenues (in €M) 1
Slide 29: Universal Music Group
Full Year 2018 Results - February 14, 2019 UNIVERSAL MUSIC GROUP Organic revenue growth by quarter Q1 2018 Q2 2018 Q3 2018 Q4 2018 in % Recorded music +5.9% +8.7% +16.2% +8.9% Streaming and subscriptions +31.5% +37.0% +38.6% +41.7% Other digital sales (mainly downloads) -12.0% -36.7% -21.4% -32.5% P
Slide 30: Universal Music Group Key Figures
Full Year 2018 Results - February 14, 2019 UNIVERSAL MUSIC GROUP Key Figures D organic 2017 2018 in euro millions (%)* Revenues 5,673 6,023 +10.0% Recorded music 4,559 4,828 +9.8% Streaming and subscriptions 1,971 2,596 +37.3% Other digital sales (mainly downloads) 685 479 -26.6% Physical sales 1,15
Slide 31: Canal+ Group
Canal+ Group vivendi 31
Slide 32: Canal+ Group
Full Year 2018 Results - February 14, 2019 CANAL+ GROUP ▪ Growth of the group’s subscriber base and improvement of EBITA supported by the cost optimization plan Subscriber base (in thousands) Improvement of EBITA before restructuring charges + 654 470 + 600 16,248 14,994 15,594 +21.8% 420 370 6,306
Slide 33: Canal+ Group
Full Year 2018 Results - February 14, 2019 CANAL+ GROUP Canal International – Sustained growth of the subscriber base* +883 +701 7,831 6,948 583 6,247 530 508 2,194 2,171 2,119 944 789 855 4,110 3,458 2,765 2016 2017 2018 Africa Asia Poland Overseas * In thousands, excluding collective contracts 33
Slide 34: Canal+ in Mainland France Subscriber Base
Full Year 2018 Results - February 14, 2019 CANAL+ GROUP Canal+ in Mainland France – Subscriber base evolution Evolution of the subscriber base in France* (in thousands) Continuous improvement in the churn rate** -241 -2.2 pts o/w +251 on the 15.8% 13.6% 8,067 Canal+ channel 7,826 December 31, 2017 D
Slide 35: Canal+ Group Key Figures
Full Year 2018 Results - February 14, 2019 CANAL+ GROUP Key figures D organic 2017 2018 in euro millions (%)* Revenues 5,198 5,166 -0.3% TV International 1,482 1,567 +6.8% TV mainland France 3,249 3,137 -3.4% Studiocanal 467 462 -0.6% Income from operations (IFO) 349 429 +22.4% IFO margin 6.7% 8.3%
Slide 36: Havas
vivendi 36
Slide 37: Havas
Full Year 2018 Results - February 14, 2019 HAVAS The business benefited from strong momentum in the second half of 2018 ■ As expected, Havas achieved a strong improvement in its H2 2018 organic Net Revenue growth ▪ Excellent 4th quarter: +4.8% (+6.7% excluding Arnold) ▪ Second Half: +2.7% vs. First
Slide 38: Havas
Full Year 2018 Results - February 14, 2019 HAVAS Sequential improvement in organic growth and profitability Sequential organic net revenue growth* EBITA before restructuring charges** 12,0% 200 11,6% 11,5% 150 10,9% 11,0% 10,7% 136 126 100 110 109 10,5% +2.7% 50 9,9% 10,0% - 9,5% H1 2017 H1 2018 H2
Slide 39: Havas Organic Growth Net Revenue FY 2018
Full Year 2018 Results - February 14, 2019 HAVAS Organic Growth Net Revenue* - FY 2018 +1.3%** -1.4% North 0.0% America Europe Asia- Pacific +0.1%** HAVAS +5.8% LATAM * At constant currency and perimeter. See details on page 11 ** Excluding Arnold, organic growth in North America was +7.2% and total
Slide 40: Havas Key Figures
Full Year 2018 Results - February 14, 2019 HAVAS Key Figures 2017 D organic 2018 D (%) in euro millions (pro forma)* (%)** Revenues 2,374 2,319 -2.3% +0.5% Net revenues 2,259 2,195 -2.8% +0.1% of which Net Revenues excluding Arnold 2,161 2,140 -1.0% + 1.9% Income from operations 254 258 +1.8% 0,0% I
Slide 41: Other Businesses
Other Businesses vivendi 41
Slide 42: Other Businesses
Full Year 2018 Results - February 14, 2019 OTHER BUSINESSES Revenues and EBITA D organic 2017 2018 D (%) in euro millions - IFRS (%)* Gameloft 320 293 -8.3% -5.1% Vivendi Village 109 123 +12.6% +11.5% New Initiatives 51 66 +30.5% +30.5% Intercompany Elimination (44) (58) Revenues - Other businesses
Slide 43: Conclusion
Conclusion vivendi 43
Slide 44: Conclusion
Full Year 2018 Results - February 14, 2019 CONCLUSION ▪ Strong financial performance achieved in 2018, with significant improvement in the profitability of the main businesses ▪ Vivendi is confident in the evolution of its main businesses in 2019 ▪ As regards Canal+ Group, after a strong improvement
Slide 45: Appendices
Appendices vivendi 45
Slide 46: Universal Music Group
Universal Music Group vivendi 46
Slide 47: Universal Music Group Key Performance Indicators
Full Year 2018 Results - February 14, 2019 UNIVERSAL MUSIC GROUP Key Performance Indicators D organic 2017 2018 in euro millions (%)* SELECTED 2019 RELEASES*** North America 2,090 2,224 +11.5% Europe 1,513 1,580 +5.5% Aladdin OST Hilltop Hoods Asia 563 618 +13.0% Alejandro Sanz JuiceWRLD Latin Ameri
Slide 48: Universal Music Group Q4 Revenues
Full Year 2018 Results - February 14, 2019 UNIVERSAL MUSIC GROUP Q4 Revenues D organic Q4 2017 Q4 2018 in euro millions - IFRS (%)* Recorded music 1,416 1,546 +8.9% Streaming and subscriptions 528 747 +41.7% Other digital sales (mainly downloads) 185 126 -32.5% Physical sales 456 386 -15.8% License
Slide 49: Canal+ Group
Canal+ Group vivendi 49
Slide 50: Canal+ Group Subscribers and KPIs
Full Year 2018 Results - February 14, 2019 CANAL+ GROUP December 31, December 31, 2017 2018 D in thousands Individual subscribers 15,015 15,657 +642 International 6,948 7,831 +883 Mainland France 4,950 4,733 -217 France wholesale customers 3,117 3,093 -24 Collective contracts 579 591 +12 Total 15,59
Slide 51: Havas
vivendi 5t
Slide 52: Havas Net Revenue Breakdown
Full Year 2018 Results - February 14, 2019 HAVAS Net Revenue Revenue breakdown by division – FY2018 Revenue breakdown by sector – FY2018 Havas Travel and Health & Automotive Leisure You TMT 6.4% 7.4% Consumer Goods 17% 11.1% 10.9% Media 37% Distribution 5.8% Finance 11.1% 11.7% Others 46% 7.9% Food
Slide 53: Havas Q4 2018 Net Revenue Organic Growth
Full Year 2018 Results - February 14, 2019 HAVAS Q4 2018 Net Revenue* Organic Growth +5.3%** +4.3% North America Europe -2.2% Asia- Pacific +4.8%** +21.6% HAVAS LATAM * At constant currency and perimeter. See details on page 11 ** Excluding Arnold, organic growth in North America was +11.3% and tota
Slide 54: Havas Key Figures by Half Year
Full Year 2018 Results - February 14, 2019 HAVAS Key Figures by Half Year in euro millions H1 2017 H1 2018 H2 2017 H2 2018 2017* 2018 Net Revenues 1,108 1,020 1,151 1,175 2,259 2,195 Income from operations (IFO) 119 115 135 143 254 258 Income from operations margin 10.7% 11.3% 11.7% 12.2% 11.2% 11.8
Slide 55: Other Businesses
Other businesses vivendi 55
Slide 56: Gameloft Key Performance Indicators
Full Year 2018 Results - February 14, 2019 GAMELOFT Key Performance Indicators Key figures Average active users D organic 2017 2018 2017 2018 in millions (%)* in euro millions Revenues 320 293 -5.1% Monthly Active Users (MAU) 128 98 Income from operations (IFO) 10 4 -56.4% Daily Active Users (DAU) 1
Slide 57: Vivendi Village, New Initiatives and Corporate
Full Year 2018 Results - February 14, 2019 VIVENDI VILLAGE, NEW INITIATIVES AND CORPORATE Key figures Vivendi Village New Initiatives D organic D organic 2017 2018 2017 2018 in euro millions (%)* in euro millions (%)* Revenues 109 123 +11.5% Revenues 51 66 +30.5% of which Vivendi Ticketing 52 58 -4.
Slide 58: Telecom Italia
Telecom Italia vivendi 58
Slide 59: Shareholding in Telecom Italia
Full Year 2018 Results - February 14, 2019 SHAREHOLDING IN TELECOM ITALIA ▪ Accounting for the TI investment ▪ Under equity method since December 15, 2015 ▪ Accounted with one-quarter lag in euro millions H1 2017 H1 2018 H2 2017 H2 2018 2017 2018 Vivendi's share of Telecom Italia's net income 88 52
Slide 60: Detailed Financial Results
Detailed financial results 60
Slide 61: Q4 Revenues
Full Year 2018 Results - February 14, 2019 Q4 REVENUES D organic Q4 2017 Q4 2018 D (%) in euro millions - IFRS (%)* Universal Music Group 1,688 1,900 +12.5% +12.3% Canal+ Group 1,391 1,344 -3.4% -3.2% Havas 659 693 +5.2% +6.5% Other businesses and intercompany elimination 104 118 +13.5% +11.2% Gamel
Slide 62: H2 ROC and EBITA
Full Year 2018 Results - February 14, 2019 H2 ROC AND EBITA Income from operations H2 2017 H2 2018 in euro millions Universal Music Group 487 591 Canal+ Group 163 188 Havas 135 143 Other businesses (88) (85) Gameloft 8 8 Vivendi Village 1 (2) New Initiatives (49) (37) Corporate (48) (54) Total Viven
Slide 63: FY2018 ROC and EBITDA
Full Year 2018 Results - February 14, 2019 FY2018 ROC AND EBITDA Income from operations (IFO) 2017 2018 in euro millions Universal Music Group 798 946 Canal+ Group 349 429 Havas 135 258 Other businesses (184) (194) Gameloft 10 4 Vivendi Village (6) (9) New Initiatives (87) (79) Corporate (101) (110)
Slide 64: Interest & Income Tax
Full Year 2018 Results - February 14, 2019 INTEREST & INCOME TAX 2017 2018 in euro millions (except where noted) – IFRS Interest expense on borrowings (68) (64) Average interest rate on borrowings (%) 1.60% 1.39% Average outstanding borrowings (in euro billions) 4.3 4.6 Interest income from cash and
Slide 65: Reconciliation of EBIT to Income from Operations
Full Year 2018 Results - February 14, 2019 RECONCILIATION OF EBIT TO INCOME FROM OPERATIONS 2017 2018 in euro millions EBIT 1,018 1,182 Amortization and depreciation on intangible assets acquired through business combinations 124 113 Reversal of reserve related to the Securities Class Action litigat
Slide 66: Reconciliation of Earnings to Adjusted Net Income
Full Year 2018 Results - February 14, 2019 RECONCILIATION OF EARNINGS ATTRIBUTABLE TO VIVENDI SA SHAREOWNERS TO ADJUSTED NET INCOME 2017 2018 in euro millions Earnings attributable to Vivendi SA shareowners 1,216 127 Amortization and depreciation of intangible assets acquired through business combin
Slide 67: Application of IFRS 15 (1/2)
Full Year 2018 Results - February 14, 2019 APPLICATION OF IFRS 15 (1/2) 2017 and 2018 Revenues Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017 in euro millions - IFRS Universal Music Group 1,284 1,382 1,319 1,688 5,673 Canal+ Group 1,272 1,283 1,252 1,391 5,198 Havas - - 552 659 1,211 Other businesses and inte
Slide 68: Application of IFRS 15 (2/2)
Full Year 2018 Results - February 14, 2019 APPLICATION OF IFRS 15 (2/2) Restatement of FY 2017 P&L FY 2017 IFRS 15 FY 2017 as published impacts restated in euro millions in 2017 Revenues 12,444 +74 12,518 Cost of revenues (7,210) -92 (7,302) Selling, general and administrative expense excluding amor
Slide 69: Application of IFRS 9 and IFRS 15
Full Year 2018 Results - February 14, 2019 APPLICATION OF IFRS 9 AND IFRS 15 Restatement of the Balance Sheet as of December 31, 2017 Assets Equity and Liabilities Dec. 31, 2017 Dec. 31, 2017 Jan. 1, 2018 Jan. 1, 2018 in euro millions (as published) in euro millions (as published) Goodwill 12,084 12
Slide 70: Glossary and Legal Disclaimer
Glossary and Legal Disclaimer 70
Slide 71: Glossary
Full Year 2018 Results - February 14, 2019 GLOSSARY The non-GAAP measures defined below should be considered in addition to, and not as a substitute for, other GAAP measures of operating and financial performance and Vivendi considers these to be relevant indicators of the group’s operating and fina
Slide 72: Important Legal Disclaimer / Contacts
Full Year 2018 Results - February 14, 2019 IMPORTANT LEGAL DISCLAIMER / CONTACTS Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements with respect to Vivendi's financial condition, results of operations, business, strategy, plans, and outlook of