This is a translation of the Shareholders’ Letter issued by Vivendi in French on March 11, 2020. It is provided solely for informational purposes to English- speaking readers. In case of any discrepancy the French version prevails.
LETTER TO OUR SHAREHOLDERS TOGETHER MARCH 2020 RESULTS P. 3 NEWS P. 4 DIARY P. 8 — 2019 annual results — Vivendi signs a UMG — Shareholders’ diary agreement with Tencent Vivendi and you 2 — LETTER TO OUR SHAREHOLDERS TO 2 — LETTER 2 Thank you for your trust. your for you Thank 2019. for share per €0.60 of dividend proposed the on vote will Meeting Shareholders’ General next in 2018. The adividend) of form (in the €568 million to compared 2020, April 2019 of mid-March end and the between adividend) and buybacks share of €3.8 billion form (in over the of shareholders to returns generated we you, with success our share Keen to support. your without possible been have would achievements these of none course, Of projects. training vocational and education cultural through in difficulty, people helping young been has now, program this years twelve For program. solidarity Joy Create Vivendi our and diversity, in cultural investments our environment, the to commitment our through uphold ardently we which responsibility, social amajor has leader, Vivendi industry an As commitments. societal and social environmental, our of strengthening the by 2019 marked was year The its international presence. expand further and expertise its enrich to enabling it acquisitions, strategic also made has It clients. major new of confidence the won Group Havas communication, meaningful and engagement built around positioning anew and organization anew to Thanks market. communications in the majorchanges of face in the model business its of solidity the proven has Group Havas Disney. and Netflix as such players, leading world’s the with agreements distribution major also signed has Group globally. Canal+ subscribers 20 million achieve to it enabling Europe, Central and countries Benelux in the present operator an M7, of acquisition the with presence international its strengthened has it Group, Canal+ for As subsidiaries. group’s the other involving joint projects including Editis, for plans ambitious We have in France. industry cultural leading Publishing is the segment. anew into expansion the with line-up content our out rounding thus in France, company publishing largest second the Editis, of integration the completed 2019,In also successfully we growth. robust experiencing is music market the in where China, particularly in Asia, develop further to music group the for opportunities Tencent will provide with partnership The potential. growth strong and leadership UMG’s industry both underscores valuation This €30 billion. of value enterprise an on based shareolders, Dear Strong earnings in growth 2019 Tencent to acquire 10% of the share capital of Universal Music Group (UMG), (UMG), Group Music Universal of capital share 10% the of acquire Tencent to allowing Tencent, by led aconsortium with agreement an into Vivendi entered advances. strategic significant with coupled were results outstanding These fruit. is bearing communication, and media entertainment, of crossroads the at in culture, leader aworld creating of €1.526 billion, of 2015. strategy EBITA Our since level highest its and 5.6% of growth revenue organic recorded It Vivendi. for year 019 astrong was and Arnaud dePuyfontaine, Yannick Bolloré, Chairman oftheSupervisoryboard,
Chairman oftheManagementBoard
Photos DR
MARCH 2020 MARCH RESULTS 2019 ANNUALS RESULTS
Vivendi recorded very strong earnings (−€82 million) which was negatively REVENUES growth in 2019. Its revenues and EBITA impacted by restructuring charges BY BUSINESS SEGMENT experienced organic growth of 5.6% (€92 million). and 10.8%, respectively, marking their UNIVERSAL MUSIC GROUP CANAL+ GROUP highest levels since 2015. Adjusted net income was a profit €7,159 M €5,268 M of €1,741 million, up 50.5% compared Consolidated revenues were to 2018. This change reflects mainly €15,898 million, an increase of 14.1% the increase in EBITA and a current tax compared to 2018, mainly due to income of €473 million. the growth of UMG and Canal+ Group and the consolidation of Editis since In 2019, returns to shareholders February 1, 2019. At constant currency amounted to €3.3 billion (share and perimeter, revenues increased repurchases of €2.66 billion and the ELIMINATION HAVAS GROUP by 5.6% compared to 2018. dividend paid in April 2019 amounting OF INTERSEGMENT €2,378 M to €636 million). TRANSACTIONS €65 M EDITIS EBITA was €1,526 million, up 18.5% NEW INITIATIVES €687 M compared to 2018. At constant currency The Shareholders’ Meeting of April 20, €71 M and perimeter, this reflects an increase 2020 will vote on a dividend of €0.60 VIVENDI VILLAGE GAMELOFT of 10.8%, due mainly to the growth per share with respect to fiscal year 2019 €141 M €259 M of UMG (+€205 million), partially offset (up 20% compared to the dividend by the decline of Canal+ Group distributed with respect to fiscal year 2018).
REVENUES EBITA ADJUSTED DIVIDEND WITH RESPECT NET INCOME TO FISCAL YEAR €15,898 M €13,932 M
€1,741 M €1,526 M €1,288 M €1,157 M
€0.50 €0.60(1)
2018 2019 2018 2019 2018 2019 2018 2019
(1) Submitted to the approval of the Annual Shareholders’ Meeting of April 20, 2020. You can find a visual presentation of the group’s 2019 earnings at: https://www.vivendi.com/individualshareholders
MARCH 2020 LETTER TO OUR SHAREHOLDERS — 3 BTS, official artist photo / DR Girls Generation – The Boys / DR Vivendi signs a UMG agreement with Tencent It is anticipated that a consortium led by China’s Tencent will purchase a minority interest in UMG’s share capital.
ivendi ended 2019 on a high! The operation is expected to be completed On December 31, Vivendi signed an by the end of the first half of 2020. agreement with a Tencent-led consortium Vivendi is delighted to welcome Tencent and its for an equity investment in UMG. co‑investors into UMG’s capital, which will allow Tencent is a Chinese group that “uses UMG to develop its business in the Asian market Vtechnology to enrich the lives of Internet users”. further. Together, the companies will work Founded in 1998 in Shenzhen, China, it has been to increase opportunities for artists and enrich listed in Hong Kong since 2004. Above the experiences of music fans. all a platform company, Tencent invests heavily In addition, Vivendi’s Supervisory Board has been in talent and technological innovation, actively informed of ongoing negotiations regarding promoting the development of the Internet. the possible sale of additional minority interests, The agreement signed between Vivendi and the based on a minimum valuation of €30 billion. Tencent-led consortium, including its subsidiary Eight banks have been mandated by Vivendi Tencent Music Entertainment and international to assist it in this respect. An IPO is planned financial investors, provides for the acquisition for early 2023 at the latest. by the consortium of 10% of UMG’s share capital The proceeds from these various sales based on a total enterprise value of €30 billion. transactions could be used for substantial share On this same basis, the consortium has the buyback operations as well as acquisitions. option to acquire up to an additional 10% of UMG’s share capital until January 15, 2021. A second agreement, allowing Tencent Music Entertainment to acquire a minority interest in the share capital of UMG’s Chinese subsidiary, is also planned. NEWS
4 — LETTER TO OUR SHAREHOLDERS MARCH 2020 JANUARY 7, 2020 Since January 7, 2020, Vivendi Numerous SE has been Havas Group registered in its new form as a European partnerships company. strengthens its Based in France and present in 22 European for Canal+ countries, presence in India Vivendi generates In recent months, Canal+ has signed several nearly 60% of In 2019, Havas Group acquired three companies its revenues strategic distribution partnerships enabling in Europe and in India, intending to benefit even more from it to raise its status as a leading player in the employs almost the growth in this country. distribution of audiovisual content in France. 55% of its employees there. The transition s a publisher, Canal+ was awarded to this new in November 2019 exclusive rights from status helps UEFA to broadcast the two Champions align Vivendi’s League premium packages for three corporate form with its European seasons starting in 2021, as well as the roots. Abest game each day during the Europa League. In January 2020, it extended its agreement with FEBRUARY 25, 2020 Formula One Management to retain the entire 2021 On February 25, 2020, Vivendi and 2022 Formula 1 seasons. These crucial rights organized an round out an already rich sports line-up. e-meeting about
In terms of content creation and production, its 2019 results DR / Signed Shobis Canal+ has benefited from a unique French for its individual shareholders know-how, through its Création Originale label with Hervé (Le Bureau des légendes, The New Pope, Philippe, Chief romises are made to be kept. And, as Havas Group Baron noir, etc.) and Studiocanal, one of the Financial Officer Chairman and CEO Yannick Bolloré announced in early leaders in the production and distribution of films and member of 2019, the communications group tripled its presence the Management and TV series. Board. in India last year. India is the sixth-largest country In its role as a content aggregator, Canal+ has in the world and a priority for Havas Group, on account consolidated its position as a benchmark player APRIL 20, 2020 Pof its dynamic economy and buoyant digital sector. with the signing of three major agreements. Vivendi’s General In May 2019, Havas Group acquired Think Design, a digital It began by adding Netflix to its line-up in Shareholders’ design and user experience consulting agency. Founded in Meeting will be the fourth quarter of 2019. A few weeks later, held this year on 2004, it now has five studios in India and the United States, it strengthened its long-standing partnership Monday, April 20, and counts 125 specialists helping brands with their user with The Walt Disney Company with an at 3:30 p.m. experience strategy. agreement allowing it to distribute its channels In September 2019, Havas Group also acquired Langoor, and services, have the first broadcast window for a digital agency specializing in creativity and technology. Disney films, and become the exclusive Langoor has offices in India, the Middle East and Australia, distributor of the Disney+ platform in France. and employs 170 experts. It does work for multinationals Finally, Canal+ entered into an exclusive as well as local companies and start-ups in all disciplines distribution agreement for beIN Sports channels of digital communication (online marketing, websites, data from June 1, 2020. This key agreement also analysis, marketing automation, e-commerce and SEO). provides for the exclusive sub-licensing of the Finally, in December 2019, Havas Group acquired the League 1 rights for the 2020-2024 seasons held experiential marketing agency Shobiz. Founded in 1982, by its partner. Shobiz employs over 300 experts. It has five sites in India In an audiovisual market marked by an and specializes in strategic planning, communication, increasingly fragmented line-up, the agreements content creation, creative, graphic and architectural design, secured by Canal+ in recent months are fully and audience acquisition. aligned with its objective of aggregating the best These acquisitions have strengthened the integrated content on a single platform. offering and expertise of Havas Group in India. Havas Group also put a new management team in place in the country to better realize its ambitions.
MARCH 2020 LETTER TO OUR SHAREHOLDERS — 5 A dynamic start to the year for Gameloft The video game publisher has significantly increased its game releases in recent months. A number of major companies have chosen Gameloft to manage their video Montage of textbook cover/DR game franchises. Editis strengthens its positions For Editis, 2019 was marked by a sharp increase in business, driven in particular by the reform of high school curricula in France and by several external
growth transactions. Game Unboxed Hereos Lego Legacy
ditis, the second largest national publisher, acquired The last few months have proved particularly by Vivendi at the end of January 2019, has strengthened exciting for Gameloft. On January 30, 2020, its position in recent months. Its Education and Reference the publisher released Disney Getaway Blast!, business (publishers Nathan, Bordas, Le Robert, etc.) has followed by Overdrive City on February 13. been particularly active, with 2019 revenues for eleven It had already launched Disney Princess Puzzle Emonths (Vivendi consolidated Editis on February 1, 2019) rising Royal on October 9, 2019. 65% of the publisher’s 16.8% at constant currency and perimeter compared to the same OCTOBER 11, 2019 revenues come from its own gaming franchises, period in 2018. Its financial year benefited from the French high Vivendi commits with the remaining 35% coming from those to skills patronage. school curricula reform. Publishers Nathan, Bordas and Le Robert On October 11, 2019, of the major international companies that have had some 120 printed textbooks published, 114 of which were the Vivendi Create placed their trust in it. In addition to Disney and in digital and interactive form. Joy solidarity Universal Pictures, Gameloft is also partnered Its Literature business rose by 2.0% pro forma over eleven program organized with LEGO, for which it created LEGO Legacy: a Commitment months. Editis has effectively confirmed its position Day in France, Heroes Unboxed, released in late February. as a leader in this segment, with six of its authors ranking during which In an effort to expand its presence on all gaming in the top 10 best-selling writers in France in 2019. employees had the platforms, Gameloft also released two games Revenues from broadcasting and distribution activities opportunity to share for the Nintendo Switch™ console: Modern increased by 4.2% pro forma over eleven months compared their skills with in February 2019 and six associations Combat Blackout Asphalt 9: to the same period in 2018, driven in particular supported by Legends in October 2019. by the distribution of the Prix Goncourt. Vivendi Create The recent subscription-based game distribution In terms of external growth, Editis acquired l’Archipel, Joy. Vivendi has model is another new source of growth for a literature and essay specialist (publishers l’Archipel, also launched a Gameloft. For example, it launched a cloud platform for building Archipoche, Presses du Châtelet), in July 2019. bridges between gaming service in partnership with Blacknut, In August 2019, it entered the buoyant graphic novel and associations which offers operators and manufacturers comic book segment by joining forces with Jungle Editions and its French a catalogue of multi-platform games streamed (a subsidiary of the Steinkis group) as part of a three-tier employees. from the cloud. Last but not least, it developed The group will be partnership involving the creation of a comic book company offering them one Ballistic Baseball for Apple Arcade, Apple’s new within Editis, the acquisition of a 30% interest in Jungle Commitment Day game subscription service, and is currently and the distribution of almost all Steinkis books. a year. working on other projects for this platform.
6 — LETTER TO OUR SHAREHOLDERS MARCH 2020 ndi is c Vive omm it te An expanded footprint d for See Tickets See Tickets, the Vivendi Village subsidiary specialized in ticketing services, has bought out the Swiss company Starticket and now sells nearly 30 million tickets per year.
ee Tickets, a Vivendi Village subsidiary and a major player in ticketing, CRM, and access control, has confirmed its development strategy with the acquisition of Swiss ticket Palau Pledge @Sen Izzard form the Pool Collective distributor Starticket. With more than 5 million tickets sold each year, Starticket is one of the country’s leading Sticket distributors. This acquisition will enable See Tickets to sell about 30 million Vivendi raises awareness tickets annually provided by nearly 10,000 promoters of shows and events. It will also benefit from Starticket’s extensive experience in the Swiss market. Thanks to See Tickets, on the climate emergency Starticket will now have access to the latest ticketing technologies, benefit from a network of powerful partners For Vivendi, the fight against climate change and and ultimately strengthen its competitiveness. the protection of the environment are vital challenges, See Tickets is currently present in nine countries in Europe as creativity and cultural expression can never be sustained in (France, Germany, Belgium, Denmark, Spain, the Netherlands, a degraded ecosystem: nature and the environment have always Portugal, the United Kingdom, and Switzerland) and the United been an endless source of inspiration for artists. Vivendi intends States. It has about 500 employees. Pooling the services to raise its customers’ awareness of the climate emergency and technologies of its various entities will bring numerous in particular. advantages. For example, thanks to a robust technical platform In terms of its audiovisual business, in France, Canal+ has developed in Great Britain, See Tickets was able to handle over broadcast several documentaries to raise environmental 100,000 simultaneous connections in France when the tickets awareness, including Energy Observer, The Messengers of our for Céline Dion’s concert at Les Vieilles Charrues went on sale Planet, and Terrains brûlants. The Keskispasse sur la planète in October 2019 (tickets sold out in the space of 9 minutes). section of the magazine program Toussa Toussa gives young Moreover, all of the group’s ticketing activities, including those people a voice. The miniseries L’Effondrement takes viewers in France, are now unified around the same See Tickets brand. into a world of shortages, with eight eco-responsibly produced The new visual identity was designed and developed by Havas episodes. The La Station-service episode won an award at Group’s W Agency. the Deauville Green Awards. And in Poland, on the Kuchnia+ channel, the Jagna Niedzielska’s zero-waste cooking program is working to prevent food waste. UMG has also taken up the fight, with Universal Music UK and Abbey Road Studios joining the Music Declares Emergency movement. In addition, several UMG artists, including Gauvain Sers and Tiken Jah Fakoly, are contributing through their songs addressing climate change. The soundtrack of the Our Planet series (Netflix) is produced by Decca Records (UMG label) and includes a previously unreleased track by Ellie Goulding (UMG artist). And for the first time, the CD version of the album has been released in environmentally-friendly (algae-based) packaging. As for Havas Group, it has been committed since 2017 to the Common Ground initiative and more specifically to the subject of climate change. In 2019, it created 13 campaigns
See Tickets / DR to raise awareness of climate disturbances. At Editis, the publisher Tana has created an eco-responsible label for its editorial line and the production of its books. Nathan Maternelle, the publisher educating future generations, is more specifically promoting sustainable development, with its game Mission forêt propre, Nature and Eco-citizen puzzles, and sorting workshops.
MARCH 2020 LETTER TO OUR SHAREHOLDERS — 7 shareholders consists of several tools: several of consists shareholders 200,000 individual Vivendi’s for up set system communication digital The in mid-December. The magazinepresentsitsBestShareholderRelationsAwards eachyear Vivendi theSilverTrophy fortheBestDigitalCommunicationofCAC 40. shareholder communications.OnDecember 12,2019,LeRevenuawarded For thethirdyear, Vivendihasbeenrecognizedforthequalityofitsindividual BY REWARDED SERVICES SHAREHOLDER INDIVIDUAL VIVENDI’S DIARY SHAREHOLDERS’ programs foritsshares.Anycurrently existingADRprogramis“unsponsored”andhasno connectionofanykindwithVivendi.Vivendidisclaimsallresponsibility forsuchprograms. no commitmenttosupplement, updateoraltertheseforward-lookingstatementsasaresult ofnewinformation,futureeventsoranyotherreason.Unsponsored ADRs.VivendidoesnotsponsorAmericanDepositaryReceipt (ADR) from the in the documents VivendihasfiledwiththeAutoritédesmarchésfinanciers.AlsoavailableinEnglishonourwebsite(www.vivendi.com). Investorsandsecuritiesholdersmayobtain freecopiesofthedocumentsfiledbyVivendi in particular risksrelatedtoobtaining theconsentofcompetitionauthoritiesandotherregulatoryauthorities,aswellallauthorizations thatmayberequiredinconjunctionwithcertaintransactionsandtherisksdescribed they do not constituteguaranteesoffutureperformancebythecompany. Actualresultsmaydiffermateriallyfromforward-lookingstatementsbecauseof anumberofrisksanduncertainties,manywhicharebeyondourcontrol, including issues regardingthe impactofcertaintransactionsandthepaymentdividendsdistributions,aswellsharerepurchases.Although Vivendibelievesthatsuchstatementsarebasedonreasonableassumptions, Important disclaimer:forward-lookingstatements. ThisLettertoShareholderscontainsforward-lookingstatementsconcerningVivendi’s financial condition,resultsoftransactions,businesses,strategyandprospects, and outside Paris, Club events, Shareholders’ Committee meetings, and more. and meetings, Committee Shareholders’ events, Club Paris, and outside in meetings newsletters, shareholders’ are there system, this to addition In Stock price/reinvesteddividends PRICE SHARE VIVENDI – e-meetings on the Internet open to all shareholders regardless of their their of regardless all to shareholders open Internet the on – e-meetings Shareholders’ the Vivendi, about updates live providing accounts Twitter – two comprising website, corporate Vivendi’s on pages Shareholders Individual – the 100 110 120 130 140 150 160 170 180 190 80 90 of the Management Board. of the Management amember and Officer Financial Chief Philippe, Hervé by led was and results 2019 Vivendi’s on focused meeting recent most The website. the company’s through replayed or live viewed be can which and location geographical and Club financial and the markets; us; Contact and Releases; Press Structure; Shareholding Dividend and Price, Share Newsletters; Shareholders’ Booklet; Shareholders’ Club; Shareholders’ Committee; Shareholders’ Meeting; Shareholders’ sections: eight 06-2014 Autorité desmarchésfinanciers(www.amf-france.org) ordirectlyfromVivendi.ThisLettertoourShareholders containsforward-lookingstatementsthatcanbeassessed onlyasofthedateitsdissemination.Vivendimakes 12-2014 06-2015 LE REVENU LE 12-2015 06-2016 12-2016 06-2017 12-2017
VIVENDI AND YOU AND 06-2018 Vivendi 12-2018
CAC40 06-2019
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This letter to shareholders is produced by Vivendi’s Corporate Department and .