First quarter of 2008
-- Revenues: EUR 5.3 billion, an increase of 5.2% and of 6.9% at
constant currency when compared to the first quarter of 2007.
-- Very good operating achievements were offset by non recurring
or calendar impacts: the first quarter of 2007 included
notably the successful launch of the first expansion set World
of Warcraft: The Burning Crusade (the second expansion set is
anticipated to be released in the second half of 2008) and the
favorable settlement of a tax litigation.
-- Adjusted earnings before interest and income taxes (EBITA):
EUR 1.2 billion, slightly down (-5.6% and -3.9% at constant
currency) when compared to the first quarter of 2007.
-- Adjusted net income: EUR 697 million, down 9.6% when compared
to the first quarter of 2007.
-- 2008 Outlook confirmed: Vivendi expects to deliver a profit
growth similar to 2007, at constant perimeter.
PARIS--(Business Wire)--
Regulatory News:
Vivendi (Paris:VIV):
Note: This press release contains unaudited consolidated earnings
established under IFRS.
Operating highlights of the first quarter of 2008
-- Strong improvement in UMG results: integration of BMG Music
Publishing and Sanctuary, and continued increase in digital
revenues.
-- Canal+ Group's strong performance: driven by subscriptions,
lower subscriber acquisition and programming costs.
-- SFR's mobile activity return to growth: increase in subscriber
base, mobile internet popularity. Pending acquisition of Neuf
Cegetel to create the alternative telecommunications operator
leader in France.
-- Maroc Telecom's development: continued increase in mobile
subscriber base while controlling acquisition costs.
-- Vivendi Games maintains strong momentum: adding 2 million
incremental World of Warcraft subscribers compared to March
2007, including more than 700,000 new players added in the
first quarter of 2008. Pending acquisition of Activision to
create Activision Blizzard, global leader of video games
independent publishers.
Universal Music Group
-- Universal Music Group's (UMG's) revenues of EUR 1,033 million
grew 0.6% compared to the same period last year. At constant
currency, revenues grew 6.8% reflecting growth in music
publishing and merchandising following the acquisition in 2007
of BMG Music Publishing and Sanctuary and a 33.0% increase in
digital sales.
Best sellers in the period were releases from Jack Johnson, Janet
Jackson and new Welsh artist Duffy. Amy Winehouse's 2006 album Back to
Black sold over this quarter an additional 2.2 million copies, taking
total sales over the 8 million mark.
-- UMG's EBITA of EUR 111 million was 94.7% above the same period
last year (an increase of 111.1% at constant currency). This
increase reflects the higher recorded music margins due to the
sales mix shifting to owned (rather than distributed) product;
the increase in digital sales, the inclusion of BMG Music
Publishing and Sanctuary in the results, as well as credits
from the downward valuation of compensation schemes linked to
equity value. However, EBITA was impacted by restructuring
costs of EUR 12 million.
Canal+ Group
-- Canal+ Group's revenues were EUR 1,115 million, up 4.5%.
Revenues from pay-TV operations in France increased to EUR 971
million (+5%), mainly driven by Canal+ and CanalSat portfolio growth,
up 180,000 subscriptions compared to the same period last year, and
higher advertising revenues. Subscription growth included a negative
adjustment of 64,000 subscriptions resulting from a portfolio change
of scope to include viable contracts only.
As of March 31, 2008, nearly half of TPS subscribers had already
been transferred to the CanalSat platform.
Revenues from CanalOverseas grew 13% compared to last year and
also contributed to the good performance of pay-TV operations in
France.
Revenues from Canal+ Group's other operations amounted to EUR 144
million, in line with last year's results. While StudioCanal posted
lower revenues mainly due to calendar effects, revenues from i>Télé
and Canal+ in Poland grew sharply.
-- Canal+ Group reported EBITA, excluding transition costs linked
to the TPS merger, of EUR 197 million, versus EUR 169 million
for the first quarter of 2007, up 16.6%. Including transition
costs, EBITA was EUR 170 million, versus EUR 164 million for
the same period in 2007.
These transition costs mainly resulted from technical migration of
TPS subscribers to CanalSat.
EBITA growth was mainly driven by strong performance of pay-TV
operations in France. In addition to higher revenues thanks to
portfolio growth, EBITA benefited from lower subscriber acquisition
and programming costs. Results were, however, negatively impacted
(-EUR 32 million) by an unfavorable but temporary Ligue 1 broadcasting
schedule (two extra match days compared to the first quarter of 2007).
EBITA from other operations were slightly down due to lower
royalties paid to StudioCanal under the Working Title deal and despite
higher revenues from i>Télé and Canal+ in Poland.
SFR
-- SFR's revenues increased by 9.8% to EUR 2,302 million compared
to the same period in 2007 (+4% on a comparable basis(1)).
Mobile revenues increased by 4.1% to EUR 2,176 million compared to
the same period in 2007. Mobile service revenues(2) increased by 2.8%
to EUR 2,077 million.
The favorable effects of an increase in the customer base along
with growth in "voice" and "data" usage and the Enterprise segment
dynamism were offset by cuts on mobile voice termination rates (13%)
as of January 1, 2008. Excluding the impacts of regulated tariff cuts,
SFR mobile service revenues would have increased by 4.8%.
In the first quarter of 2008, SFR added 57,000 net new customers,
taking its registered customer base to 18.823 million(3), a 5.1%
increase versus March 2007. The contract customer base grew by 6.2%
year-on-year to 12.434 million, leading to an improved customer mix of
0.7 percentage point in one year.
Net data revenues improved by 21.7% mainly due to interpersonal
services (SMS and MMS), content (music, TV-Videos and games) and the
development of mobile Internet and corporate segment operations. Net
data revenues represented 16.2% of service revenues at the end of
March 2008, compared to 13.7% at the end of March 2007. The number of
text messages (SMS) sent by SFR customers grew by 55% on a
year-on-year basis to 2.7 billion and revenues from data services,
excluding SMS and MMS, increased by 32.7%.
Fixed and ADSL revenues reached EUR 126 million, increasing by
4.5% versus the same period in 2007, on a comparable basis. In total,
SFR had 438,000 ADSL customers and 1.852 million fixed voice customers
at the end of March 2008.
-- SFR's mobile EBITDA increased by EUR 10 million to EUR 873
million. This increase was achieved due to a 2.8% increase in
mobile service revenues and the strong control of other costs.
They were partly offset by a 1.2 percentage point increase in
customer acquisition and retention costs to 12.8% of mobile
service revenues.
SFR's fixed and ADSL EBITDA was -EUR 17 million, and EBITA was
-EUR 28 million, reflecting the launch of SFR ADSL and the integration
of Tele2 France operations(4).
SFR's EBITDA was EUR 856 million and EBITA was EUR 624 million,
decreases of 0.5% and 3%, respectively compared to the first quarter
of 2007.
Maroc Telecom
-- Maroc Telecom group's revenues increased by 11.6% to EUR 614
million compared to the same period last year (+8.3% at
constant currency and at constant perimeter(5)).
Group mobile revenues grew by 15.5% to EUR 432 million compared to
the same period last year (+13.6% at constant currency and at constant
perimeter).
Regarding Maroc Telecom SA, despite increased competition, the
mobile customer base(6) experienced strong growth and reached 13.697
million customers, a 20.4% increase compared to the end of March 2007
(a net increase of 370,000 customers during the first quarter of
2008), driving the sharp evolution of mobile revenue. The blended
ARPU(7) reached EUR 8.7, an 8.1% decrease at constant currency
compared to the same period last year.
Regarding Maroc Telecom's subsidiaries, the mobile customer base
reached 2.200 million customers, a 41.2% increase compared to March
2007 (a net increase of 185,000 customers during the first quarter of
2008).
Group fixed and Internet revenues grew by 3% to EUR 242 million
compared to the same period last year (-2% at constant currency and at
constant perimeter).
Regarding Maroc Telecom SA, the fixed customer base(8) reached
1.335 million lines, stable during the first quarter of 2008. Voice
average monthly invoice decreased by 5.5% (at constant currency)
compared to the same period last year, in particular the
"Teleboutique" business segment. The ADSL customer base still
experienced growth and reached almost 482,000 lines, representing a
net increase of approximately 12,000lines during the first quarter and
increasing by 15.3% compared to the end of March 2007.
Regarding Maroc Telecom's subsidiaries, the fixed customer base
reached 191,000 lines, representing a net increase of more than 9,000
lines during the first quarter of 2008.
-- Maroc Telecom group's EBITA increased by 4.7% to EUR 268
million compared to the first quarter of 2007 (+8.7% at
constant currency and at constant perimeter(9)). This
performance resulted from the combined effect of revenue
growth, the control of acquisition costs in the context of
steady growth in the mobile customer base and the control of
operational expenses. It also reflects the investments in
Gabon Telecom and in Mobisud.
Vivendi Games
-- Vivendi Games continues to make strong headway with Blizzard
Entertainment, inc and World of Warcraft (R), adding 2 million
incremental subscribers compared to end of March 2007; After
reaching the 10-million-subscriber milestone at the end of
2007, World of Warcraft's subscriber base grew to more than
10.7 million by the end of the first quarter of 2008.
A comparison of the first quarters of 2007 and 2008 performances
is not representative because the first quarter of 2007 included the
hugely successful release of World of Warcraft: The Burning Crusade.
Blizzard Entertainment's second expansion, World of Warcraft: Wrath of
the Lich King, is scheduled to be released in the second half of 2008.
Consequently, Vivendi Games' revenues for the first quarter of 2008
are 24.1% lower (-18.2% on a constant currency basis) when compared to
the same period last year. Vivendi Games' revenues was EUR 221
million.
Blizzard Entertainment's revenues was EUR 192 million. Sierra
Entertainment, Sierra Online and Vivendi Games Mobile revenues were
slightly higher than their performance for the same period last year;
in the face of unfavorable currency exchange movements on all business
segments.
-- Vivendi Games' EBITA amounted to EUR 50 million. Excluding the
allocation of Group overheads, Blizzard Entertainment's EBITA
was EUR 99 million.
Sierra Entertainment's EBITA of -EUR 34 million (excluding the
allocation of Group overheads) was effected by higher costs related to
increased investment in Sierra product development and accelerated
royalties expense for released products. Vivendi Games' EBITA also
includes continued start up expenses for the Sierra Online and Vivendi
Games Mobile divisions.
Comments on Vivendi's First Quarter 2008 Financial Indicators
Revenues amounted to EUR 5,280 million compared to EUR 5,020
million for the first quarter of 2007, an increase of EUR 260 million
(+5.2%, representing +6.9% at constant currency).
EBITA totaled EUR 1,203 million compared to EUR 1,274 million in
the first quarter of 2007, a decrease of
EUR 71 million (-5.6% or -3.9% at constant currency) which was
mainly driven by the favorable settlement of a tax litigation (+EUR 73
million) in the first quarter of 2007 and Vivendi Games (-EUR 57
million), with the impact of the exceptionally successful release of
the first expansion pack, World of Warcraft: The Burning Crusade, also
in the first quarter of 2007. In addition, in the first quarter of
2008, EBITA included a net reduction in the provision for stock
options and other share-based compensation plans (+EUR 38 million) and
Canal+'s two extra Ligue 1 soccer match days compared to the first
quarter of 2007 (-EUR 32 million).
Income from equity affiliates totaled EUR 85 million compared to
EUR 82 million for the first quarter of 2007. Our share of income from
NBC Universal represented EUR 53 million for the first quarter of 2008
compared to EUR 65 million for the first quarter of 2007, a decrease
driven by the decline of the U.S. dollar and NBC Universal's
performance. SFR's share of income from Neuf Cegetel represented EUR
33 million compared to EUR 18 million for the first quarter of 2007
Adjusted net income amounted to EUR 697 million with EUR 0.60 per
share, compared to EUR 771 million with EUR 0.67 per share for the
first quarter of 2007, a decrease of EUR 74 million (-9.6%).
Earnings attributable to equity holders of the parent amounted to
EUR 555 million with EUR 0.48 per share, compared to EUR 932 million
with EUR 0.81 per share for the first quarter of 2007, a decrease of
EUR 377 million
(-40.5%), which was primarily due to the dilution profit on the
sale of a 10.18% equity interest in Canal+ France to Lagardère (+EUR
239 million) in the first quarter of 2007.
Important disclaimer
This press release contains forward-looking statements with
respect to the financial condition, results of operations, business,
strategy and plans of Vivendi. 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 successful completion of
the Activision Blizzard transaction mentioned above, the risk that
Vivendi will not be able to obtain the necessary approvals for certain
transactions as well as the risks described in the documents Vivendi
filed with the Autorité des Marchés Financiers (French securities
regulator) and which are also available in English on our web site
(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. The
present forward-looking statements are made as of the date of the
present press release and 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.
ANALYST CONFERENCE
Speakers:
Philippe Capron
Member of the Management Board and Chief Financial Officer
Sandrine Dufour
Deputy Chief Financial Officer
Date: Wednesday, May 14, 2008
6:00 PM Paris time - 5:00 PM London time - 12:00 PM New York time
Media invited on a listen-only basis
Numbers to dial:
Number in France: +33 (0)1 70 99 43 03; Access code: 353 54 41
Number in UK: +44 (0)20 7806 1957; Access code: 639 90 74
Number in US: +1 718 354 1388 or + 1 888 935 4577 (toll-free);
Access code: 639 90 74
Replay details (replay available for 14 days)
France: +33 (0)1 71 23 02 48
UK: +44 (0)20 7806 1970
US: +1 718 354 1112 or +1866 883 448
Access code: 35 35 441# in french
63 99 074# in English
Internet: The conference can be followed on the Internet at
http://www.vivendi.com/ir
The slides for the presentation will also be available online.
-0-
*T
APPENDIX I
VIVENDI
ADJUSTED STATEMENT OF EARNINGS
(IFRS, unaudited)
1st 1st
Quarter Quarter
2008 2007 %
Change
Revenues 5,280 5,020 5.20%
Cost of revenues -2,494 -2,273 -9.70%
Margin from operations 2,786 2,747 1.40%
Selling, general and
administrative expenses excluding
amortization of intangible assets
acquired through business
combinations -1,564 -1,551
Restructuring charges and other
operating charges and income -19 78
EBITA (i) 1,203 1,274 -5.60%
Income from equity affiliates 85 82
Interest -37 -24
Income from investments 2 2
-
Adjusted earnings from continuing
operations before provision for
income taxes 1,253 1,334 -6.10%
Provision for income taxes -236 -246
Adjusted net income before
minority interests 1,017 1,088 -6.50%
Minority interests -320 -317
Adjusted net income (ii) 697 771 -9.60%
Adjusted net income per share -
basic 0.6 0.67 -10.40%
Adjusted net income per share -
diluted 0.6 0.66 -9.10%
In millions of euros, per share amounts in euros.
For additional information, please refer to "Financial Report and
Unaudited Condensed Financial Statements for the first quarter ended
March 31, 2008" which will be on line later on.
(i) EBITA corresponds to EBIT excluding amortization and impairment
losses of intangible assets acquired through business combinations.
(ii) A reconciliation of earnings, attributable to equity holders of
the parent to adjusted net income is presented in the Appendix IV.
APPENDIX II
VIVENDI
CONSOLIDATED STATEMENT OF EARNINGS
(IFRS, unaudited)
1st 1st
Quarter Quarter
2008 2007 %
Change
Revenues 5,280 5,020 5.20%
Cost of revenues -2,494 -2,273 -9.70%
Margin from operations 2,786 2,747 1.40%
Selling, general and
administrative expenses excluding
amortization of intangible assets
acquired through business
combinations -1,564 -1,551
Restructuring charges and other
operating charges and income -19 78
Amortization of intangible assets
acquired through business
combinations -85 -60
Impairment losses of intangible
assets acquired through business
combinations - -
EBIT 1,118 1,214 -7.90%
Income from equity affiliates 85 82
Interest -37 -24
Income from investments 2 2
Other financial charges and income -22 197
Earnings from continuing
operations before provision for
income taxes 1,146 1,471 -22.10%
Provision for income taxes -276 -224
Earnings from continuing
operations 870 1,247 -30.20%
Earnings from discontinued
operations - -
Earnings 870 1,247 -30.20%
Minority interests -315 -315
- -
Earnings, attributable to equity
holders of the parent 555 932 -40.50%
Earnings, attributable to equity
holders of the parent per share -
basic 0.48 0.81 -40.70%
Earnings, attributable to equity
holders of the parent per share -
diluted 0.47 0.8 -41.30%
Vivendi
PAR ACTIVITÉ
(Normes comptables IFRS, NON AUDITE)
In millions of euros, per share amounts in euros.
APPENDIX III
VIVENDI
REVENUES AND EBITA BY BUSINESS SEGMENT
(IFRS, unaudited)
(In millions of euros) 1st 1st % Change
Quarter Quarter at
2008 2007 constant
% rate
Change
Revenues (i)
Universal Music Group 1,033 1,027 0.60% 6.80%
Canal+ Group 1,115 1,067 4.50% 4.20%
SFR 2,302 2,096 9.80% 9.80%
Maroc Telecom Group 614 550 11.60% 13.80%
Vivendi Games 221 291 -24.10% -18.20%
Non core operations and others,
and elimination of inter segment
transactions -5 -11 54.50% 54.50%
Total Vivendi 5,280 5,020 5.20% 6.90%
EBITA
Universal Music Group 111 57 94.70% 111.10%
Canal+ Group 170 164 3.70% 2.90%
SFR 624 643 -3.00% -3.00%
Maroc Telecom Group 268 256 4.70% 7.20%
Vivendi Games 50 107 -53.30% -50.70%
Holding & Corporate -11 46 na na
Non core operations and others -9 1 na na
Total Vivendi 1,203 1,274 -5.60% -3.90%
na: not applicable.
(i) As will be published in BALO
APPENDIX IV
VIVENDI
RECONCILIATION OF EARNINGS ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT TO ADJUSTED NET INCOME
(IFRS, unaudited)
Vivendi considers adjusted net income, a non-GAAP measure, as a
relevant indicator of the Group's operating and financial
performance. Vivendi Management uses adjusted net income, because it
provides a better illustration of the performance from continuing
operations by excluding most non-recurring and non-operating items.
(In millions 1st 1st Quarter
of euros) Quarter 2007
2008
Earnings,
attributable
to equity
holders of
the parent
(i) 555 932
Adjustments
Amortization
of
intangible
assets
acquired
through
business
combinations 85 60
Impairment
losses of
intangible
assets
acquired
through
business
combinations
(i) - -
Other
financial
charges and
income (i) 22 -197
Change in
deferred tax
asset
related to
the
Consolidated
Global
Profit Tax
System 69 2
Non recurring
items
related to
provision
for income
taxes 4 -
Provision for
income taxes
on
adjustments -33 -24
Minority
interests on
adjustments -5 -2
Adjusted net
income 697 771
(i) As reported in the Consolidated Statement of Earnings.
*T
(1) Comparable basis mainly illustrates the full consolidation of
Tele2 France as if this acquisition had taken place on January 1,
2007. For reference, Tele2 France's revenues for the first quarter of
2007 amounted to EUR 111 million.
(2) Mobile service revenues correspond to mobile revenues
excluding revenues from net equipment sales.
(3) SFR excluding wholesale customer total base. Wholesale
customer base was estimated at 1.302 million at the end of March 2008
(excluding pre-activations).
(4) For reference, Tele2 France's EBITA for the first quarter of
2007 amounted to - EUR 7 million.
(5) Constant perimeter illustrates the full consolidation of Gabon
Telecom as if this transaction had occurred on January 1, 2007. For
reference, Gabon Telecom's revenue for the first quarter of 2007
amounted to EUR 28 million.
(6) The customer base includes prepaid customers making or
receiving a voice call during the last 3 months and not resiliated
postpaid customers.
(7) ARPU (Average Revenue Per User) is defined as revenues from
incoming and outgoing calls and data services, net of promotions and
excluding roaming in and equipment sales, divided by average prepaid
and postpaid customer base over the period.
(8) Maroc Telecom SA's fixed customer base is now displayed in
numbers of equivalent lines. It was previously displayed in number of
access.
(9) For reference, Gabon Telecom's EBITA for the first quarter of
2007 amounted to - EUR 4 million.
Vivendi
Media
Paris
Antoine Lefort
+33 (0) 1 71 71 11 80
or
Agnès Vétillart
+33 (0) 1 71 71 30 82
or
Solange Maulini
+33 (0) 1 71 71 11 73
or
New York
Flavie Lemarchand-Wood
+(1) 212.572.1118
or
Investor Relations
Paris
Daniel Scolan
+33 (0) 1 71 71 14 70
or
Aurelia Cheval
+33 (0) 1 71 71 12 33
or
Agnès de Leersnyder
+33 (0) 1 71 71 30 45
or
New York
Eileen McLaughlin
+(1) 212.572.8961
Copyright Business Wire 2008
