Universal Music Drives Vivendi Revenue Growth, Virus Crisis "Affecting" Canal+

Vivendi CEO Arnaud de Puyfontaine
Courtesy of Getty Images

Vivendi CEO Arnaud de Puyfontaine

First-quarter revenue was "little affected by the consequences of the COVID-19 pandemic," but March trends were hit at ad unit Havas Group and book publisher Editis, among others.

French entertainment and telecom conglomerate Vivendi on Monday said its first-quarter revenue rose 11.9 percent, or 4.4 percent assuming constant currencies, to $4.20 billion (3.87 billion euros) on the strength of its music division.

It also provided an update on the business effects of the novel coronavirus pandemic, including the fact that it is "affecting all of Canal+ Group’s revenue sources."

Vivendi said that its first-quarter revenue was "little affected by the consequences of the COVID-19 pandemic, the impact of which varied according to the group’s businesses and the geographical regions in which it operates." The firm mentioned a revenue hit in March at such operations as advertising arm Havas Group, book publisher Editis and Vivendi Village, which includes Vivendi Ticketing and event venues, adding those operations' results continue to be affected in the second quarter.

"Each of Vivendi’s businesses is closely monitoring the current and potential effects of this outbreak," the company said. "At this point, it is impossible to determine with certainty how long it will last and how it will impact Vivendi’s revenues and annual results. However, the revenues of certain businesses, notably Havas Group, Editis and Vivendi Village, are expected to be affected in the second quarter of 2020."

Vivendi said overall its financial position was "solid" and it was "confident in the resilience of its main businesses," adding: "It makes every effort to ensure the continuity of its activities, as well as to best serve and entertain its customers and its audiences while respecting the instructions of the authorities in each country in which it operates."

Universal Music Group, home to the likes of Billie Eilish, Taylor Swift, Drake, Post Malone and Lady Gaga, saw its quarterly revenue climb 17.8 percent, or 12.7 percent assuming constant currencies, to $1.92 billion (1.77 billion euros). Recorded music best-sellers for the first quarter included new releases from King & Prince, Justin Bieber, Eminem and The Weeknd, as well as continued sales from Eilish and Malone, with growth in subscription and streaming revenues outweighing declines in downloads and physical sales. 

Vivendi on March 31 closed its sale of a 10 percent stake in Universal Music to a consortium led by Chinese online giant Tencent based on an enterprise value of 30 billion euros, or $33 billion. That valued the sold stake in the music major at $3.3 billion.

Vivendi back then also reiterated that it would "pursue the possible sale of additional minority interests in UMG" with the help of several banks. Plus, an initial public offering for UMG is still in focus for the company and currently planned for early 2023 at the latest, the firm reiterated on Monday.

During Vivendi's virtual annual shareholder meeting on Monday, which saw top executives speaking without investors in attendance, CEO Arnaud de Puyfontaine said the Tencent deal "offers tremendous growth opportunities in China, which is now one of the main recorded music markets in the world." 

Meanwhile, Vivendi said first-quarter revenue at pay TV giant Canal+ Group rose 9.6 percent, or 1.0 percent assuming constant currencies. "The current COVID-19 health crisis is affecting all of Canal+ Group’s revenue sources," Vivendi said. "Canal+ Group is taking action to ensure the continuity of most of its operations and to implement solidarity initiatives, while increasing its vigilance in reviewing expenditures and investments."

Vivendi's Gameloft division reported a first-quarter revenue drop of 10.4 percent to $66 million. It didn't detail the reasons for the decline but said "sales on OTT platforms (Apple, Google, Microsoft, etc.)" represented 73 percent of sales and Disney Magic Kingdoms, March of Empires, Asphalt 9: Legends, Dragon Mania Legends and Asphalt 8: Airborne were the best-selling titles of the quarter. 

Vivendi chairman Yannick Bollore said about the virus crisis during Monday's shareholder meeting: "The world will probably not be quite the same after the crisis ... But there is one constant we can count on: that is the crucial role of our Vivendi group and of our content."