Annual Report – Universal Registration Document
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Annual Report – Universal Registration Document 2019 The Annual Report – Universal Registration Document in English is a translation of the French Document d’enregistrement universel provided for information purposes. This translation is qualified in its entirety by reference to the Document d’enregistrement universel. The Annual Report – Universal Registration Document is available on the company’s website www.vivendi.com. Table of Contents Profile of the Group, Strategy and Value Creation Businesses – Financial Communication – Tax Policy and Regulatory Environment, Non-Financial Performance 04 1 Profile of the Group 06 2 Strategy and Value Creation 12 3 Businesses – Financial Communication – Tax Policy and Regulatory Environment 22 Risk Factors, Internal Control 4 Non-Financial Performance 49 and Risk Management, Compliance Policy 86 1 Risk Factors 88 2 Internal Control and Risk Management 93 3 Compliance Policy 99 Corporate Governance of Vivendi, Compensation of Vivendi's Corporate Officers, General Information about the Company 102 1 Corporate Governance of Vivendi 104 2 Compensation of Vivendi’s Corporate Officers 140 3 General Information about the Company 173 Financial Report, Statutory Auditors’ Report on the Consolidated Financial Statements, Audited Consolidated Financial Statements, Statutory Auditors’ Report on the Financial Statements, Vivendi SE Statutory Financial Statements 188 Key Consolidated Financial Data for the Last Five Years 190 I • 2019 Financial Report 192 II • Appendix to the Financial Report 218 III • Audited Consolidated Financial Statements Recent Events, for the Year Ended December 31, 2019 219 Outlook 354 IV • 2019 Statutory Financial Statements 316 1 Recent Events 356 2 Outlook 357 Responsibility for Auditing the Financial Statements, Statutory Auditors, Alternate Statutory Auditors 358 1 Responsibility for Auditing the Financial Statements 360 The Annual Report – Universal Registration Document in English is a translation of the French Document d’enregistrement universel provided for information purposes. This translation is qualified in its entirety by reference to the Document d’enregistrement universel. The Annual Report – Universal Registration Document is available on the company’s website www.vivendi.com. –— VIVENDI –— ANNUAL REPORT – UNIVERSAL REGISTRATION DOCUMENT 2019 –— 01 Questions for Yannick Bolloré and Arnaud de Puyfontaine What was Vivendi’s strategic vision in 2019? Yannick Bolloré: Vivendi’s goal is to be a world leader in culture, at the crossroads of the entertainment, media and communication industries. We’re already number one in Europe, and we’re growing every year. There are three main components to our strategic vision as a group. The first is cultural. At a time when globalization can sometimes rhyme with homogenization, Vivendi is taking a firm stand in favor of diversity – in terms of content, source and forms of expression. We support local artists in all the countries where we have a presence, invest in original productions, and continue to expand internationally to deliver content to the widest possible audiences. We promote diversity as an asset, particularly for today’s younger generations. For the industrial component of our strategic vision, integration is the key. Our group’s biggest strength is our ability to build bridges between our different businesses. When Universal Music Group (UMG) supplies the music for a book published by Editis, or Havas provides communication support to Canal+, it means that our businesses are growing together. Numerous cross-business projects like these were carried out in 2019, and we intend to develop that trend in the future. Last but not least, society also plays a part in Vivendi’s strategic vision. As a Yannick Bolloré responsible corporate citizen, we are determined to act in the interests of all CHAIRMAN OF THE SUPERVISORY BOARD our stakeholders – our employees, shareholders and partners, as well as the broader communities to which we belong. How did this strategy play out during the year in practical terms? Arnaud de Puyfontaine: In 2019, Vivendi once again achieved strong results, with like-for-like organic revenue growth of 5.6%, and made further progress toward realizing its strategic vision. This is clearly demonstrated by the year’s highlights. 2019 was another Vivendi’s goal is to be exceptional year for music industry spearhead UMG, which recorded even a world leader in culture, higher double-digit revenue growth and saw its artists topping the charts of the world’s main music platforms. At the end of the year, we signed an at the crossroads agreement with a consortium led by Tencent, enabling it to acquire a 10% share of UMG’s capital. The transaction values UMG at €30 billion and of the entertainment, media underscores both its strengths and significant growth potential. The deal will enable UMG to speed up its development in Asia, and more particularly in and communication industries. China, where the music market grew by 80% last year. 2019 was also a crucial year for Canal+ Group, which continued its transition from a pay-TV channel to a content platform, signing major distribution agreements with beIN Sports, Netflix and Disney. During the year, we also expanded into seven new European countries thanks to the acquisition of M7 and strengthened our presence in Africa by expanding our operations there beyond French-speaking countries. Havas Group continued its successful transformation, in the face of major changes in the communication market. Following its reorganization, the group announced its new positioning – where engagement and meaningful communications are key – and won a number of large accounts. It also continued its expansion during the year thanks to seven acquisitions, 02 –— VIVENDI –— ANNUAL REPORT – UNIVERSAL REGISTRATION DOCUMENT 2019 –— In 2019, Vivendi once again achieved strong results and made further progress toward realizing its strategic vision. Worldwide, demand for books is as strong as ever. With six authors in the Top 10 of the 2019 best-sellers list, 50 respected publishing houses and 4,000 new books released each year, Editis has everything it needs to become the number one publisher in its home market, France. It will then Arnaud de Puyfontaine benefit from the same international development strategy as our other sub- CHIEF EXECUTIVE OFFICER sidiaries. We have big plans for this rising star. including three in India – which tripled its size in this fast-growing market – and several creative gems like Buzzman in France and Battery in the You talked earlier about Vivendi’s commitments United States. to society. What role does Vivendi intend to play Lastly, we stepped up cross-business initiatives in 2019 to create an even in this regard? more integrated group. One example is the launch of Harlan Coben’s latest Yannick Bolloré: The very nature of our businesses means that we have a novel at L’Olympia, which involved teams not only from Editis but also huge responsibility. Culture is both a cornerstone of community life and a Canal+, UMG, Havas and Olympia Production. Collaborative projects like lever for individual emancipation. That’s why Vivendi’s strategic position is to this one will become increasingly common. They allow us to showcase the defend cultural diversity, versus isolation and uniformity. It’s a choice and a work of our artists in a unique way and offer our audiences an enhanced strong commitment. user experience, setting us apart from our competitors. As a company, we also have responsibilities toward all our stakeholders. This includes a responsibility to the environment, of course. The cultural and creative industries are obviously not the worst polluters, but we still have a duty to make every effort to ensure that our impact on the environment is not just neutral but positive. After stabilizing our greenhouse gas emissions in Could you tell us more about Editis? 2019, this year we will draw up an ambitious roadmap for reducing Arnaud de Puyfontaine: 2019 was a year of integration for Editis. And it pro- emissions. ved extremely successful. It’s no real surprise – publishing is an industry Our responsibility to society also means that we have a duty to set an based on artistic creation and talent, and the challenges are similar to those example within our organization. Gender parity in leadership and equal pay faced by the music, audiovisual and gaming industries, where Vivendi is are top priorities for all of our subsidiaries. The index we’re publishing for the already present. first time this year provides a clear and transparent diagnosis that will enable In addition, Editis shares many of the characteristics of our other businesses, us to identify pinch points for improvement and take appropriate action. including an intrapreneurial culture, the ability to attract top talent and the Vivendi is also committed to taking action outside the organization, particu- capacity to constantly reinvent itself to adapt to changes in the industry. It larly for the benefit of young people. Through the Vivendi Create Joy solidar- has therefore been able to create a multitude of connections with our other ity program, we support associations that help disadvantaged young subsidiaries, simply and rapidly. With two-thirds of movies and series based people,thanks to cultural education projects and vocational training initia- on literary works, Editis represents an invaluable reservoir of stories and tives in fields that relate to Vivendi’s businesses. franchises! –— VIVENDI –— ANNUAL REPORT – UNIVERSAL REGISTRATION DOCUMENT 2019 –— 03 Universal Music Group ◀ Billie Eilish ◀ Gregory Porter Profile of the Group, Strategy and Value Creation, Businesses – Financial Communication – Tax Policy and Regulatory Environment, Non-Financial Performance PROFILE OF THE GROUP 06 NON-FINANCIAL PERFORMANCE 49 1.1. Simplified Organization Chart of the Group 06 4.1. Non-financial performance is a cornerstone of governance 49 1.2. Key Figures 08 4.2. Main non-financial risks 51 1.3. 2019 Highlights 10 4.3. Our key commitments 53 STRATEGY AND VALUE CREATION 12 4.4. Indicator tables 72 2.1. Strategy 12 4.5. Tables 79 2.2.