LAA Vivendi GB 10-2012 JM2_Mise en page 1 26/10/12 17:16 Page1 OCTOBER LETTER 2012 TO OUR SHAREHOLDERS A BUSY LAST QUARTER FOR VIVENDI eptember was a busy month for Vivendi. Through these operations, Vivendi is strengthening The acquisition of EMI’s businesses was finally its leading position in media and content both in confirmed with the removal of the last regula- France and internationally, while preparing itself for Story obstacles in Brussels and Washington. the substantial digital evolution of these markets. The staff at Universal Music Group is now devoting all At the same time, we and the Supervisory Board are its energy to restoring this prestigious company to its continuing our strategic review of the Group’s assets. best and to develop its businesses, particularly in Japan JEAN-FRANÇOIS This analysis will take time, and no hasty decisions or DUBOS and Germany. announcements will be made, particularly since our CHAIRMAN OF Elsewhere, the takeover of the Bolloré channels by results are good. We will make an announcement about THE MANAGEMENT how the Group will move forward at the appropriate time. BOARD Canal+ Group, which represents a genuine opportunity for it to diversify and strengthen its free-to-air television On a day-to-day basis, our subsidiaries are concentrat- activities, was also given the last necessary green light. ing on improving their commercial performance and on This resulted in the launch of the D8 and D17 channels continuously making adjustments to their costs. This on October 7th. is particularly the case at SFR, which has just brought Last but not least, the Polish competition authorities out new, ever more innovative offers, and at Activision unconditionally approved the proposed partnership of Blizzard, which has successfully launched new video Canal+ in Poland, enabling the upcoming merger of its games. digital television platform with that of the TVN group, You can rest assured that we remain fully committed the country’s leading private free-to-air television to achieving a revaluation of our share price, increasing operator, and enabling it to become a major shareholder our adjusted net income per share and maintaining our of that company’s parent. quality credit rating. ■ RESULTS VIDEO GAMES ■ First half results confirm annual forecast ■ Exciting releases between now and year end page 2 page 6 MUSIC SUSTAINABLE DEVELOPMENT ■ EMI acquisition is now a reality ■ Culture(s) with Vivendi, a journey through cultural page 3 diversity TELEVISION page 7 ■ Canal+ Group develops its free-to-air television business page 4 SHAREHOLDERS’ PAGE ■ Four new members of the Shareholders’ Committee TELECOMS ■ Shareholder’s Booklet: Shareholders’ Club, Diary, ■ SFR confirms it leading position and breaks new ground Contact us page 5 page 8 CONTENTS LAA Vivendi GB 10-2012 JM2_Mise en page 1 26/10/12 17:16 Page2 2 GROUP APPOINTMENTS JEAN-YVES CHARLIER JOINS VIVENDI’S GENERAL MANAGEMENT Jean-Yves Charlier has been appointed as Senior Executive Vice President in charge of Vivendi’s Telecoms activities, and as such, will contribute to the Group’s strategic review. Bertrand Meheut, Chairman of Canal+ Group, has been asked at the same time to conduct a review of content and media. JEAN-FRANÇOIS DUBOS PHILIPPE CAPRON Jean-Yves Charlier, who has been a member of Vivendi’s Supervisory Board since April 2008, and who until now was Chairman of the Strategy Committee, took up his post as Senior Executive Vice President of the Telecoms business at the end of September. His perfect knowledge of the Group and his substantial experience in telecoms on an international scale (he has held the highest positions at Fidelity International, Colt Telecom Group, BT, Equant, Wang and Promethean) will be of enormous benefit to the company. A decision was made this summer to slim down Vivendi’s Management Board so that the managers of the various subsidiaries could devote themselves entirely to their entities. It now comprises Jean-François Dubos, its Chairman, and Philippe Capron, Chief Financial Officer. Bertrand Meheut conducts a review of content and media DR The Supervisory Board has asked Bertrand Meheut, Chairman of the Management Board of Canal+ Group, JEAN-YVES CHARLIER BERTRAND MEHEUT to conduct a review of content and media, areas in which Vivendi is currently one of the world’ leaders. FIRST HALF RESULTS CONFIRM ANNUAL FORECAST Vivendi’s results in the first half confirmed its prospects for the year. Its subsidiaries Activision Blizzard and GVT have raised their respective annual forecasts of EBITA and EBITDA margin. n line with expectations, launches under IFRS. For the rest Its target is to achieve annual In Brazil, GVT’s first half EBITA Vivendi’s adjusted net income of the year, Activision Blizzard is savings of operational costs of has increased by 19.3% (25.3% was €1.5 billion in the first very confident due to the launch about €500 million between now at constant exchange rates) to Ihalf of 2012, down 16.6% of new games. It has raised its and the end of 2014, together €223 million. The operator has compared to the first half of 2011. annual EBITA forecast to around with a significant reduction in its extended its coverage to 11 cities The Group confirmed its annual €800 million. variable costs. and has benefited from its pay-TV forecasts for 2012. Adjusted net The first half EBITA of the world’s offer. It now expects revenue income should exceed €2.5 billion number one music company, GVT RAISES ITS EBITDA growth above 30% in 2012 (at before the impact of the opera- Universal Music Group (UMG), FORECAST constant currency) and has raised tions announced in the second was €156 million, up 18.2% Maroc Telecom is facing stiffer its EBITDA margin forecast to half of 2011 (EMI, Direct 8, Direct thanks to the improvement of competition in the Kingdom of slightly above 40%. Star and ITI-TVN) and its telecoms its product mix and careful man- Morocco, but its international The first half EBITA of Canal+ restructuring costs. The total divi- agement of its costs. In the business is still very dynamic. A Group was €483 million, down dend to be paid in cash in 2013 second half, new albums are an- provision of €72 million associ- 2.4%. Canal+ France’s portfolio should be between 45% and 55% ticipated from No Doubt, The ated with a voluntary redundancy grew by 350,000 net subscrip- of the annual adjusted net income Rolling Stones, Florent Pagny, plan had a negative impact on its tions compared to the end of for 2012. and others. first half EBITA, which was down June 2011. Price reductions attributable to 12.8% at €463 million. Based on Elsewhere, in June, a jury awarded NEW LAUNCHES the competitive environment and recent developments in the mar- damages of €765 million against AT AB AND UMG to regulators’ decisions had a ket and provided that no further Vivendi in a case brought by Liberty Operational situations differ ac- negative impact on the first half major exceptional events disrupt Media. Vivendi is convinced that cording to the subsidiaries con- EBITA of the telephone operator the business, the Group main- there are numerous grounds for an cerned. The 31.3% downturn SFR, which amounted to €1,113 tains its 2012 forecasts, and ex- appeal and it will continue to use in first half EBITA for the video million, down 10.3%. In the sec- pects, excluding restructuring all avenues available to have the games publisher Activision ond quarter, SFR’s mobile tele- costs, to achieve an EBITA margin decision overturned and to reduce Blizzard (AB), to €572 million, can phone customer base returned to of about 38% and stable net op- the amount of damages. At this be explained by the unfavorable growth. The company is preparing erating cash flow in dirham com- stage, no provision has been made impact of the calendar for games a plan to adjust its cost structure. pared to 2011. in the accounts. ■ LAA Vivendi GB 10-2012 JM2_Mise en page 1 26/10/12 17:16 Page3 MUSIC 3 EMI ACQUISITION IS NOW A REALITY The acquisition of EMI’s Recorded Music businesses by Universal Music Group (UMG) and Vivendi was © Benoit Peverelli / EMI Music Netherlands BV completed at the end of September. Now that it has control of the prestigious English label, UMG intends to increase investments there. n September 21, Vivendi well as the catalogues of the and UMG received the Beatles, Beach Boys and Genesis last regulatory green will be joining UMG. The famous / © Williams&Hirakawa Nashville Records Capitol Olight required to buy Abbey Road studios will also EMI Recorded Music, from the become part of it. New talents, European Commission and the US artists and creators should be © Franck W.Okenfels © Franck Federal Trade Commission. attracted by the diversity of talents Dukoff © Lauren While the music industry is cur- at the new, combined UMG-EMI. rently at a watershed moment, par- Artists, consumers and the cultural ticularly in the United States, this industry as a whole will benefit transaction will enable UMG to from the merger between UMG safeguard its strategy – to invest in and EMI Recorded Music. talent, while ensuring its growth and offering consumers more AN ACQUISITION choice – and Vivendi to strengthen WITH A POSITIVE IMPACT its position in content significantly. ON VIVENDI’S RESULTS (1) Thanks to this transaction, UMG will The approval of the European investment funds, have already CHARLES AZNAVOUR, KATY PERRY, increase its positions in music. It Commission was conditional upon NORAH JONES AND LADY ANTEBELLUM declared an interest. UMG will re- will be the first company in the sec- some asset sales.