Vivendi Third-Quarter Earnings Fall

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Robin Thicke is among the recorded music bestsellers for Universal Music Group year-to-date.

The entertainment and telecom conglomerate, which continues to evaluate a split next year, posted improved results for Universal Music Group.

Entertainment and telecom conglomerate Vivendi on Thursday reported lower third-quarter earnings as weaker profits in its French telecom and pay TV units more than offset a big improvement at Universal Music Group.

But the company reiterated its full-year guidance.

Vivendi also said it continues to evaluate a planned split of its media and telecom assets.

Vivendi wants to mostly focus on its content business, including Universal Music Group, and French pay TV arm Canal Plus. Earlier this year, the company agreed to sell a controlling stake in video games giant Activision Blizzard, followed by a recent agreement to sell its stake in Maroc Telecom. The company also recently agreed to take full control of Canal Plus.

A possible split into a media and a telecom business is expected to be finalized next year.

"The planned demerger would create significant value to shareholders as they would have the opportunity to invest in two clearly differentiated vehicles evaluated according to the specifics of their respective sectors," the conglomerate said when it announced the plan to separate its assets into two entities.

Vivendi's adjusted third-quarter earnings of $506 million (376 million euros) were down 23.7 percent from the same period a year earlier. Revenue was up 0.2 percent, or 3.4 percent assuming constant currencies, to $7.19 billion (5.34 billion euros).
 
Earnings before interest, taxes and amortization dropped 20.1 percent to $983 million (730 million euros).

Universal Music Group posted a gain of 36.6 percent, or 46.8 percent assuming constant currencies, to earnings before interest, taxes and amortization of $151 million (112 million euros). The company cited higher revenue and "strict cost management."

For the first nine months of 2013, music EBITA was up 12.5 percent. Recorded music best-sellers for the first nine months of 2013 included Imagine Dragons, Rihanna, Robin Thicke, Drake, Taylor Swift and France’s Stromae and Vanessa Paradis.

Canal Plus reported a decline of slightly more than 9 percent in the third quarter and slightly more than 10 percent for the first nine months of the year.

Canal Plus earnings for the first three quarters of the year also declined. Vivendi cited "an increase in programming costs, due to sustained investments in content and one additional calendar day in the French Ligue 1 soccer competition, as well as a slowdown in the economic environment, which had a negative impact on the advertising market."

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai

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