Acquisitions vitalize Vivendi, offset Q4 loss

Games division driving profits despite economic slump

PARIS -- Vivendi was one of the few media firms to buck 2008's steep economic downturn, claiming a 17.2% jump in annual revenue and an improvement in its most widely followed profitability measure, even though the media and telecom giant posted a fourth-quarter loss on the back of a big writedown in the value of its NBC Universal stake.

Vivendi posted a loss of $1.73 billion for the final quarter of 2008 as it wrote down its 20% stake in NBC Uni by $1.9 billion. GE owns the other 80%. Adjusted for special items, quarterly profit rose 12% to 656 million euros ($826 million). In the year-ago period, Vivendi had recorded a profit of 521 million euros, or 585 million euros on an adjusted basis. Revenue for the quarter rose 26.6%.

For the year though, Vivendi saw a 4.9% rise in earnings before interest, taxes and amortization (EBITA), reaching $6.23 billion, and a 7.7% increase in its 2008 dividend to $1.76 per share. Revenue jumped to 25.4 billion euros ($32 billion) helped by acquisitions.

Vivendi's strong 2008 performance was fueled by the group's acquisition of Gallic telecom Neuf Cegetel and video games company Activision.

CEO Jean-Bernard Levy expects his company's strong video games division, now dubbed Activision Blizzard, to help 2009 EBITA surpass 2008 levels. Lower restructuring costs all around will also be a factor. Activision Blizzard boasts four of the 10 best-selling games across the globe, including "Guitar Hero" and "World of Warcraft."

EBITA at Universal Music Group fell 6.6% in the fourth quarter and up 11% for the year, assuming constant currency rates.

On the same basis, pay TV group Canal Plus saw a 53.6% increase in the quarter and a 41.3% gain for the year. The growth was driven by increased subscriptions and ad revenue despite a very unstable economic climate that has seen rival terrestrial networks such as TF1 and M6 struggle.

Income from Vivendi's equity affiliates, however, fell from 373 million euros in 2007 to just 260 million euros ($327.3 million) in 2008. The group's share of income earned by NBC Universal fell $58 million to $321 million due to both the drop in NBC Universal's performance and the continuing decline of the U.S. dollar.
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