LETTER TO OUR SHAREHOLDERS PHOTOS DR
VINCENT BOLLORÉ CHAIRMAN OF THE SUPERVISORY BOARD
ARNAUD DE PUYFONTAINE CHAIRMAN OF THE MANAGEMENT BOARD
2014 EARNINGS IN LINE WITH EXPECTATIONS NOW FULLY REFOCUSED ON MEDIA AND CONTENT ACTIVITIES SUBSTANTIAL RETURN TO SHAREHOLDERS
he new Vivendi reached many milestones in 2014. The Group completed the process of refocusing on its media and content activities. Vivendi thus accepted an offer from Numericable-SFR and Altice for the 20% interest it still held in NumericableSFR. The amount offered corresponded to what Vivendi had hoped for, enabling it to generate a premium of over 20% in three €5.7 million to be distributed between now months in an illiquid market. and mid-2017 following Furthermore, the Bolloré Group increased its shares in €1.3 billion in 2014 Vivendi to 8.15%, demonstrating its confidence in the Group’s capacity for growth. Due to the disposals achieved over the past two years, the Group has returned to comfortable financial flexibility and is going to proceed with a substantial return to shareholders. The Annual General Meeting on April 17, 2015 will propose the payment of an ordinary dividend of €1 for 2014, reflecting the Group’s business performance (20 cents) and the return to shareholders (80 cents). This distribu-
tion is expected to be maintained for 2015 and 2016. A share buyback program of about €2.7 billion is also planned. In total, about €5.7 billion will be returned to shareholders by mid2017, in addition to the €1.3 billion paid in 2014. Now an integrated industrial media and content group, Vivendi strengthened its position in these sectors in 2014 by acquiring interests in StudioBagel, a network of channels on YouTube, and Eagle Rock, which specializes in music programs. It also published good results due to the growth of the Canalplay, its unlimited video-on-demand service, the launch of A+, a new 100% African channel, or the record-breaking success of Sam Smith, a young British singer, Stromae and Indila. Discovering new talent is at the core of Vivendi’s strategy, as is establishing itself more firmly in high-growth markets and accelerating its digital transition. The pre-eminence of digital technology is eroding the boundaries between the Group’s different business lines: cooperation and common projects are now increasing. ■
© BERNARD SIDLER
2014 EARNINGS IN LINE WITH EXPECTATIONS
Hervé Philippe Financial Director
In a very competitive environment, Vivendi achieved almost-stable income from operations, last year. In 2015, the Board expects an income from operations margin close to that achieved in 2014 and an increase in its adjusted net income of 10%.
s in previous quarters, the 2014 annual results published on February 27 were in line with expectations. They reflect a strong resilience of the Group’s main activities confronted with an unpredictable economic and competitive climate. The Canal+ Group saw an increase in sales due to the growth of its international activities, which offset the downturn in business and the impact of the rise in VAT in France. For Universal Music Group
2014 ANNUAL EARNINGS* Change year-on-year
Change at constant perimeter and currency year-on-year
Income from operations €1,108M
Adjusted net income €626M
Earnings attributable to Vivendi shareholders 4 744 M€
Net cash +€4.6bn vs -€11.1bn net debt at year-end 2013 *The figures above take account of changes in the perimeter occurring or announced in 2013 and 2014 the accounting impact of which, particularly in compliance with IFRS 5, has been described in the 2014 Financial Report available on the www.vivendi.com website or on request to the Vivendi Shareholders’ Department.
(UMG), the year was characterised by the faster than expected transformation of music distribution modes with robust growth in streaming compared to digital downloads and physical sales. INCOME FROM OPERATIONS OVER €1.1 BILLION IN 2014 In this context, the Group’s income from operations, an aggregation of the subsidiaries’ “pure” business, resisted, rising to €1,108 million (+0.5%)*. The adjusted net income stood
at €626 million (+37.9%) while earnings attributable to Vivendi shareholders rose by a factor of 2.4 to €4.744 billion. It particularly benefited from the capital gains from the SFR and Maroc Telecom sales. Vivendi’s results and net situation were strongly impacted by these significant disposals. In addition to sizeable capital gains, the latter enabled Vivendi to buyback some of its bonds and substantially decrease its interest expense (mainly due to the 2013 bond redemptions that followed the
AN ANTICIPATED RETURN TO SHAREHOLDERS OF €5.7 BILLION The disposals completed over the past two years have enabled Vivendi to refocus on media and content and reduce its net debt, which had risen to a high of €17.4 billion on June 30, 2013. They have led, and will lead to, substantial returns to shareholders. Vivendi has already paid an ordinary distribution of €1.00 per share for the 2013 financial year, €0.50 of which economically corresponded to the Group’s perfomance in 2013 and €0.50 to a return to shareholders as a result of ongoing disposals of assets. Further to this, the Management Board will propose for approval at the Annual General Meeting on April 17, 2015, a payment of an ordinary dividend of €1.00 with respect to 2014, €0.20 of which corresponds to the Group’s business performance and €0.80 to a return to shareholders with respect to disposals. The objective is to maintain this distribution level for the fiscal years 2015 and 2016. In addition to these distributions, the plan is to proceed with a share buyback program of about €2.7 billion, up to the legal limit of 10% of capital in line with the market regulations. The program will run over 18 months. In total, the return to shareholders from mid-2015 to mid-2017 could reach approximately €5.7 billion in addition to the €1.3 billion paid in 2014.
SALE OF 20% VIVENDI’S INTEREST IN NUMERICABLE-SFR
sale of 88% the previA 10% expected billion of Activision ous year. increase Blizzard). In 2015, the The impact Group is anticiin 2015 adjusted of the bond pating a slight net income redemption growth in revmade in Decemenues fueled by ber 2014 following the Canal+ Group’s international sale of SFR will only be felt in activities and by the develop2015. ment of UMG streaming. The income from operations margin A POSITIVE NET CASH should be close to that of 2014. POSITION OF €4.6 BILLION Vivendi also expects an inOn December 31, 2014, Vivendi crease in its adjusted net inthus had a positive Net Cash come of 10% mainly thanks to Position of €4.6 billion, comlower restructuring charges pared to a Net Debt of €11.1 and interest expense. ■
Last February 17th, Numericable-SFR and Altice offered to purchase 20% Vivendi’s interest in the French telecoms operator. The Management Board followed by the Group’s Supervisory Board considered the proposal, after which the Supervisory Board endorsed it on February 27th. The proposed price was €40.00 per share versus a closing price of €33.315 on the day of the finalization of SFR’s transfer to Numericable and Altice, November 27, 2014. The premium realized by Vivendi therefore totalled 20% in just three months! And the low level of liquidity in the Numericable-SFR shares would have made a future exit under optimal conditions uncertain. The purchase was funded half by Numericable-SFR (as part of a share buyback program submitted to a General Meeting of its shareholders) via a payment in cash, and half by Altice France via a payment by the latest on April 7, 2016 at an annual interest rate of 3.8%. This disposal, which will cancel out any previous agreements and discussions, brought in an additional €3.9 billion for Vivendi and enabled it to collect a total of about €17 billion (after financing the acquisition of Virgin for €200 million) for the sale of SFR.
L’OLYMPIA HALL TO HOST VIVENDI’S GENERAL SHAREHOLDERS’ MEETING
Frédéric Crépin Senior Executive Vice President & Group General Counsel
Vivendi innovates. Having held its Annual General Meeting at the Carrousel du Louvre for 15 years, the Group has decided, under the guidance of Frédéric Crépin, the Group General Counsel, to hold it this year at L’Olympia.
n integrated industrial media and content group, Vivendi wished to use the iconic Olympia (28 Boulevard des Capucines, Paris 9th Arrondissement), which it owns, to hold its Annual Shareholders’ Meeting on April 17. Individual shareholders who are members of the Club have already had an opportunity to visit L’Olympia but this is, this year, the first time the General Shareholders’ Meeting will be held there. Nothing is impossible for L’Olympia, equipped with ultra-modern technology, it hosts concerts, oneman shows, film showings, ballets
and charity galas! If you are not in Paris, you can follow the General Shareholders’ Meeting live via an online broadcast (www.vivendi.com; Individual Share-
holders page then General Shareholders’ Meeting). The General Shareholders’ Meeti n g subsection w i l l also allow you to access a range of publications such as the Annual Report, the Shareholders’ Meeting Notice, the Management Board’s Report with the draft resolutions etc. Making a pioneering move, Vivendi made the Votaccess platform available to its shareholders in 2012, enabling them to vote before the meeting and via Internet for resolutions submitted to the meeting. Almost every bank is now connected to Votaccess. We recommend you consult your adviser if you wish to use this platform. ■
A meeting broadcast live on the Internet
© BERNARD SIDLER
FOUR PRIORITY PROJECTS FOR VIVENDI © JEAN CHISCANO
Stéphane Roussel Senior Executive Vice President, Development and Organization The Group has decided on four priority focus areas to boost its internal growth: content of the future, data and its monetization, Africa, and cooperation and common projects.
ivendi’s new Board is focusing on internal growth. Under the direction of Stéphane Roussel, a Member of the Management Board, Senior Executive Vice President, Development and Organization, the Group has defined four main priority issues which are the content of the future, data and its Establishment monetization, Africa, and of Vivendi cooperation and common Contents AN OFFICE IN LOS ANGELES FOR VIVENDI TICKETING projects. A new entity, Vivendi countries, also has growth projon social media etc. It has also Contents, has been established ects in Africa. entered into a partnership with to handle content of the future. Lastly, among the developments Havas named “Global Music Beginning with France, its misbetween subsidiaries, we can noData Alliance”. The UMG data sion is to design and drive new tice that UMG has created a radio will be cross-linked with Havas’ music and audiovisual content talent show, Island Africa Talent, ones to give a better understandformats. Various projects have specifically for A+. Vivendi Ticketing of the correlation between been kick started with respect to ing has opened an office in Los artists, music fans and brands. data (all data collected on the InAngeles, with the intention of In Africa, the Canal+ Group has ternet) and its monetization. benefiting from UMG’s popularity launched A+, a new channel for UMG has created Artist Portal, a in California. L’Olympia uses Digand by Africans (see article on database that enables real-time itick for its ticketing, and there are page 5). UMG, which derives analysis of artists’ sales, their many more examples. ■ 80% of its revenues from five streaming activity, their impact
VIVENDI VILLAGE, AN ENTREPRENEURIAL MINDSET © BERNARD SIDLER
Simon Gillham Senior Executive Vice President, Communications & New Business Vivendi Village comprises a group of innovative and dynamic companies: Vivendi Ticketing (Digitick and SeeTickets), Watchever, Wengo and L’Olympia.
ivendi Village comprises a group of innovative and dynamic companies: Vivendi Ticketing (Digitick and SeeTickets), Watchever, Wengo and L’Olympia. Vivendi Village brings together five human-sized entities that all share an entrepreneurial mindset. Responsive and agile, Digitick, SeeTickets, Watchever, Wengo or L’Olympia quickly develop and initiate innovative projects, particularly in the digital sector, and thus fuel the entire Group with their experience. Vivendi supports these entities in return by federating them under the same umbrella, thereby enabling them to achieve their ambitions. Vivendi
Apart from France, where it is Ticketing consists of Digitick and the leader, Wengo is present SeeTickets. Digitick is the French in Spain, Portugal, leader in electronic tickBrazil, Turkey eting (real-time ticketing and Italy. management, sale of virFive innovative O p e n tual tickets, zePass.com since platform and Infoconcert and dynamic 1893, database) and SeeTickets companies L’Olympia is a leader in the distribuis one of tion of tickets for shows and Paris’s iconic show events in the United Kingdom. venues. Established artists and Vivendi Ticketing has just opened young talent perform there pracan office in Los Angeles. tically every night. WENGO, PRESENT IN SIX Watchever has introduced an unCOUNTRIES limited SVOD (subscription video Through numerous websites, on demand) service in Germany, Wengo puts private individuals in providing its users with a large contact with professionals who catalogue of local and internaprovide advice (legal, teaching, tional content (films, series, carastrology etc.) by telephone. toons, music etc.). ■
A+ MOVES INTO AFRICA A presence in over 25 countries
Bertrand Meheut Chairmain of the Management Board of Canal+ Group As Vivendi wishes to strengthen its position in Africa, one of the Group’s four priority areas of growth (see article on page 4), Canal+ Group launched A+, a new 100% African channel for and by Africans, at the end of October 2014.
azine programs and reality and t the end of October 2014, game shows. A musical talent Canal+ Group, which has show, Island Africa Talent, has been marketing the Canalsat also been created with Univerpackage in Africa for the past sal Music Group. 20 years, decided to strengthen its position on the ACQUISITION OF THEMA continent by launching A+, a A+ is enriched with local pronew channel completely deductions that Canal+ Group invoted to Africa. A+ seeks to become the reference DEENYZ, OVERALL channel for FrenchWINNER speaking Africa, to reflect OF ISLAND AFRICA TALENT 2014 the identities and specific features of the continent and to be firmly turned towards the future. Canal+ Group now has eight subsidiaries operating in 25 countries. Two-thirds of the air time is devoted to African and African-American series, movies and TV movies. A+ also broadcasts mag-
PHOTO PATRICK DANINO
© OLIVIER ROLLER
tends to promote and develop. To do so, Canal+ Group has acquired Thema, a company specializing in the distribution of general, themed and ethnic TV channels. Thema publishes the African fiction channel, Nollywood TV, which is the leader in French-speaking Africa. All these initiatives made the Canal+ Group the leading pay satellite TV operator in Frenchspeaking Africa at the end of 2014, and it had over 1.5 million subscribers in the continent, with an average receipt per subscriber (Arpu) of about ■ €18.
UNIVERSAL MUSIC GROUP ARTISTS REWARDED WITH NUMEROUS AWARDS
Lucian Grainge Chairmain and CEO of UMG
This year again, Universal Music Group (UMG) artists won numerous awards. February is particularly important with the Grammy Awards being held in the United States, the Victoires de la Musique in France and the Brit Awards in the United Kingdom.
n United States, United Kingdom, and France, respectively first, fourth and fifth global music market, UMG artists were particularly awarded early this year. UMG scooped 22 Grammy Awards in Los Angeles on February 8, 2014: Sam Smith, the discovery of 2014, won four awards: Song of the Year (Stay with Me), Best Pop Vocal Album (In the Lonely Hour), Best New Artist and Record of the Year. Beck received Album of the Year and Best Rock Album for Morning Phase. In the 2014 Billboard Music Awards, where singles are rated according to sales in the United States, UMG had seven of the year’s Top 10.
Five days after the Grammy Awards, it was time for the Victoires de la Musique, which were held in Paris. Stromae, who had already won an award the previous year for his album, Racine Carrée, won the Best Concert Award. Calogero won Song of the Year for Un Jour au Mauvais Endroit, Cascadeur, Best Electronic Album for Ghost Surfer, Benjamin Clementine, Best Live Newcomer, Akhenaton, Best Rap Album with Je Suis en Vie, and Indila, Best New Album. This young artist had already been voted Best Artist at the 2014 Trace Urban Music Awards and Best European Artist at the 2014 MTV Eu-
33 Grammy awards
© NICK DOREY
ropean Music Awards. Lastly, on the evening of February 25, at the Brit Awards in London, Taylor Swift landed the International Female Solo Artist Award and Sam Smith once again proved to be a tremendous success, winning the British Breakthrough Act Award. ■
QUESTIONS BY SHAREHOLDERS SHAREHOLDERS’ DIARY
What were GVT’s results in 2014? GVT’s revenues were €1,765 million, a 12.8% increase at constant currency compared to 2013. This performance was driven by continuous growth of the retails and SME, which increased 14.1% at constant currency; including a 56.8% year-on-year increase in pay-TV. At the end of 2014, GVT was operating in 156 cities, establishing itself in six additional cities during the year. GVT’s EBITDA was €702 million, a 8.4% increase at constant currency compared to 2013. Simon WhoGillham are Tarak Ben Ammar and Dominique Delport, who are being proposed for the Supervisory Board? Born on June 12, 1949, Tarak Ben Ammar is internationally cultural entrepreneur in the audiovisual sector both in Europe and worldwilde. He began his career in 1974 by convincing a number of American film producers to shoot parts of their films in Tunisia: Star Wars (George Lucas) and Raiders of the Lost Ark (Steven Spielberg). He also was the producer or co-producer of La Traviata (Franco Zeffirelli), Pirates (Roman Polanski), Black Gold (Jean-Jacques Annaud), etc. In France, he participated through his company Quinta Communications and together with Caisse des Dépôts et Consignations (CDC), in the recovery and development of a leading post-production group by taking over Les Laboratoires Éclair. He also collaborated with Luc Besson to develop La Cité du Cinéma. Tarak Ben Ammar sits on the Board of several companies, has a degree from Georgetown University in Washington and received the Légion d’Honneur. Born on November 21, 1967, Dominique Delport joined Havas Media in 2006 as General Manager for France and was promoted to CEO of Havas Media Group France a year later. Since 2013, he had served as Global Managing Director of Havas Media Group. Dominique Delport started his career as a TV journalist. He spent eight years as Editor-in-Chief at M6 (RTL Group). He co-founded Streampower, a company recognized for its interactive work with the main TV operators in France. Dominique Delport has a degree from the Ecole de Management of Lyon (EM) and was a winner of a Master of Business Administration hosted by the University of Texas (United States).
■ PROGRAM FOR THE COMING MONTHS You will find a program of events organized by the Shareholders Club on our website: www.vivendi.com, (click on the “Individual shareholders” tab and then on “Shareholders’ Club”). A hard copy of this program is now also available from Vivendi every six months.
■ CONTACT US For further information on Vivendi, please contact our Shareholders Information Department (IAI) by mail: Vivendi, Individual Shareholders Information Department 42 Avenue de Friedland, 75008 Paris. by e-mail: [email protected]
or by telephone:
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or +33 (0)1 71 71 34 99 if you are calling from abroad. The department will respond Monday through Friday from 9.00 am to 6.00 pm (hours extended in the event of important news). You receive this “Letter to our Shareholders” under the terms of the French Data Protection Act of January 6, 1978, pursuant to which you may exercise your right to access, correct or contest personal data by sending an e-mail to [email protected]
or by writing us at Vivendi – Shareholders Information Department – 42 Avenue de Friedland – 75008 Paris, France.
Important Disclaimers:Forward-looking statements. This Letter to Shareholders contains forward-looking statements concerning Vivendi’s financial situation, the results of transactions, businesses, strategy and prospects as well as the impact of certain transactions. Although Vivendi believes that such statements are based on reasonable assumptions, they do not constitute guarantees of future performance by the company. Actual results may differ materially from forward-looking statements because of a number of risks and uncertainties, most of which are beyond our control, in particular the risks linked to obtaining the consent of competition authorities and other regulatory authorities for certain transactions, as well as the risks described in the documents Vivendi has filed with the Autorité des Marchés Financiers, also available in English on our website (www.vivendi.com). Investors and security holders may obtain free copies of the documents filed by Vivendi from the Autorité des Marchés Financiers (www.amf-france.org) or directly from Vivendi. This news release contains forward-looking statements that were made as of the date of its dissemination. Unsponsored ADRs. Vivendi does not sponsor American Depositary Receipt (ADR) programs for its shares. Any currently existing ADR program is “unsponsored” and has no connection of any kind with Vivendi. Vivendi disclaims all responsibility for such programs.