Vivendi Reports 2007
PARIS -- Regulatory News:
- Revenues: €21,657 million, an increase of 8.0% (+9.7% at constant currency)
- Adjusted earnings before interest and income taxes1 (EBITA): €4,721 million, an increase of 8.0% (+9.1% at constant currency)
- Adjusted net income2: €2,832 million, an increase of 8.3%, creating a net income per share of €2.44
- Proposed dividend of €1.30 per share, up 8.3%, with a distribution rate of 53.5% of adjusted net income
Comments by Jean-Bernard Levy, CEO of Vivendi
"2007 was a year of excellent performances for Vivendi, and we also accelerated on delivery of our strategy. With an adjusted net income of more than €2.8 billion, we significantly exceeded objectives set in early 2007. This achievement is due to the outstanding performances of all our businesses.
In 2007, we also significantly strengthened each of our activities with transforming acquisitions: TPS for Canal+, BMG Publishing and Sanctuary for Universal Music Group, and Onatel and Gabon Telecom for Maroc Telecom. Last December, we also signed two important agreements. The first will allow Vivendi to create Activision Blizzard, the global leader in the video game industry while the second, the planned acquisition of Neuf Cegetel by SFR, will enable us to provide the best telecommunications services to our French customers for the long term.
Our shareholders will benefit from these excellent 2007 results: at the Shareholders’ Meeting, we will propose to increase the dividend to €1.30, representing a distribution rate of 53.5% of adjusted net income.
2008 should see new growth in our subscriber portfolios and, in its current perimeter, Vivendi expects to deliver a profit growth similar to 2007. In addition, the completion of both the Activision Blizzard and SFR-Neuf Cegetel transactions will further position Vivendi as a global leader in digital entertainment."
Vivendi's Business Units: Comments on 2007 EBITA
Universal Music Group
Universal Music Group (UMG) posted an operating margin of 12.8% in 2007 and EBITA amounted to €624 million.
2007 EBITA declined by 16.1% (12.9 at constant currency) compared to 2006. This is because 2006 included notably the recovery of a cash deposit in the TVT matter (€50 million) and certain legal settlements, whereas 2007 includes restructuring costs higher by €52 million, due mainly to the acquisitions of BMGP and Sanctuary. Underlying 2007 EBITA performance is thus comparable to 2006.
In 2007, digital sales increased by 51% (at constant currency). Within a challenging recorded-music market and despite unfavorable currency movements, UMG significantly outperformed its competitors.
Canal+ Group’s full year EBITA, excluding transition costs linked to the TPS merger, was €490 million (+94% compared to 2006). Including transition costs (€90 million in 2007), EBITA was €400 million versus €75 million in 2006.
Pay-TV operations performance in France strongly improved with an EBITA, excluding transition costs, increasing by €245 million (€155 million in 2006 and €400 million in 2007). These strong results, achieved during the TPS integration process, were mainly due to increased revenues, subscription portfolio growth and the benefits of merger-related synergies. During 2007, the financial benefit of synergies linked to the TPS merger exceeded company targets by reaching €150 million and covered all activities: channel production, distribution, technical and structural costs.
In 2007, Canal+ increased investment in content, including the launch of Canal+ Family, the continued drive to further develop original programming and the launch of new theme channels on CanalSat.
EBITA from other operations (excluding pay-TV in France) was €89 million, compared to €97 million in 2006.
Canal+ Group confirms its 2010 €1 billion EBITA target, with forecast profitability in line with Europe’s top broadcasters.
SFR’s mobile EBITDA increased by €14 million to €3,476 million. This increase was achieved due to a 0.9% increase in mobile service revenues and the strong control of other costs. It was, however, offset by a 2.1 percentage point increase in customer acquisition and retention costs to 12.8% of mobile service revenues3 (due to higher volumes of post-paid recruitments and retention initiatives and to the penetration of 3G devices among SFR’s customers). Mobile depreciation costs increased by €31 million following years of investment at very high levels, in particular in the deployment of 2G and 3G/3G+ networks.
SFR’s fixed and ADSL EBITDA was -€45 million, and EBITA was -€64 million, reflecting the launch of SFR ADSL and the integration of Télé2 France operations.
SFR’s EBITDA amounted to €3,431 million and EBITA amounted to €2,517 million, decreases of 0.5% and 2.6% respectively compared to 2006. SFR’s mobile capital expenditure net decreased by 15%, therefore cash flow from operations increased by 5%.
Maroc Telecom’s EBITA4 increased by 19.6% to €1,091 million compared to 2006 (+23.3% at constant currency and at constant perimeter5).
This performance resulted from the combined effect of revenue growth (+10.5% at constant currency and constant perimeter), the control of acquisition costs in the context of steady growth in the mobile customer base6 and the control of operational expenses. Excluding exceptional provisions recorded in 2006 that were partially reversed in 2007, Maroc Telecom’s EBITA increased by 17.4% at constant currency and at constant perimeter.
Mobile EBITA increased by 29.9% to €853 million compared to 2006 (+31.0% at constant currency and constant perimeter). Mobile activity evolution was driven by strong revenue growth (+21.4% at constant currency and constant perimeter) and by controlling costs in the context of sustainable mobile customer base growth. Fixed and Internet EBITA decreased by 6.5% to €239 million compared to 2006 (+2.1% at constant currency and constant perimeter).