Together Letter to Our Shareholders
Total Page:16
File Type:pdf, Size:1020Kb
LETTER TO OUR SHAREHOLDERS TOGETHER MARCH 2021 RESULTS P. 3 NEWS P. 4 DIARY P. 8 — 2020 annual results — Universal Music Group — Shareholders’ diary opens its share capital Vivendi and you © P. Aventurier/Abacq/Icon Sport Photos / DR VIVENDI, as dynamic as ever Yannick Bolloré, Chairman of the Supervisory Board, and Arnaud de Puyfontaine, Chairman of the Management Board Dear Shareholders, 020 was a year rich in initiatives for Vivendi. The group successfully opened up the share capital of Universal Music Group (UMG). A consortium led by Tencent acquired 10% of the music major’s share capital in March 2020, and an additional 10% in December 2020, based on an enterprise value of €30 billion (for 100% of UMG). We want to thank the Vivendi teams who achieved these transactions amid the health crisis and those at Tencent for their confidence and this partnership. Building on this success, the Management Board is currently working on a plan to distribute 60% 2of UMG’s capital to the group’s shareholders. The listing of UMG’s shares on the Amsterdam Stock Exchange by the end of the year is also being considered. This transaction should allow us to reduce the discount that has affected Vivendi’s share price for many years. Vivendi will also be able to accelerate its ambition of creating a leader in content, media and communications. The last few months have provided the opportunity to pursue several initiatives in the media sector in France and Spain. In December 2020, Vivendi signed a put option agreement to acquire 100% of Prisma Media from Gruner + Jahr – Bertelsmann. With its 20 flagship brands, Prisma Media is the French leader in magazine press, both printed and digital. One month later, in January 2021, Vivendi acquired 9.9% of Prisa, the leading media and education group in the Spanish-speaking world. In parallel with these major transactions, the group has taken time to reflect, defining its raison d’être and redefining its corporate social responsibility (CSR) approach. Itsraison d’être, Creation Unlimited, reflects the group’s desire to unleash creativity by revealing all talents, valuing all ideas and all cultures, and sharing them with as many people as possible. Vivendi’s new CSR program, Creation for the Future, directly ties in with this raison d’être, putting the group’s social, societal and environmental impacts into perspective and setting a first milestone for 2025, especially in terms of carbon neutrality. We hope you enjoy reading this letter and thank you for your continued support. 2 — LETTER TO OUR SHAREHOLDERS MARCH 2021 RESULTS 2020 ANNUAL RESULTS In 2020, Vivendi demonstrated resilience Earnings attributable to Vivendi SE REVENUES and agility in the face of the health crisis. shareowners amounted to €1.44 billion, BY ACTIVITY Revenues remained almost stable compared with €1.58 billion in 2019. Excluding compared to 2019 (–0.6% at constant the current tax income of €473 million relating currency and perimeter (1)), amounting to the utilization of foreign tax receivables to €16.09 billion. After strong growth in respect of the group’s exit from the in the first quarter (+4.4% at constant consolidated global profit tax system UNIVERSAL MUSIC GROUP CANAL+ GROUP currency and perimeter (1)) and a decline recorded in 2019, net income, group share €7,432 M €5,498 M in the second (–7.9%), revenue growth would have increased by 29.7%. recovered in the third and fourth quarters As for 2021, Vivendi is continually analyzing (both +0.7%). the current and potential consequences EBITA was €1.63 billion, up 6.6% of the health crisis. It is difficult at this time to compared to 2019, driven by growth at determine how it will impact Vivendi’s results Universal Music Group and Canal+ Group, this year. Businesses related to advertising and moderated by downturns that and live performance are likely to be more ELIMINATION HAVAS GROUP primarily impacted Havas Group and affected than the others. Nevertheless, OF INTERSEGMENT €2,137 M Vivendi Village. the group remains confident in the resilience TRANSACTIONS Earnings before provision for of its core businesses. €(60) M EDITIS NEW INITIATIVES €725 M income taxes and minority interest, It continues to make every effort to ensure the €65 M the metric that is most comparable to the continuity of its activities and to best serve VIVENDI VILLAGE GAMELOFT performance recorded in 2019, increased and entertain its customers and audiences €40 M €253 M by 47.7% compared to 2019, amounting while complying with the authorities’ to € 2.18 billion. guidelines in each country where it operates. (1) Constant perimeter particularly reflects the impacts of the acquisition of M7 by Canal+ Group (September 12, 2019), the acquisition of the remaining interest in Ingrooves Music Group, which was consolidated by Universal Music Group (March 15, 2019) and the acquisition of Editis (January 31, 2019). REVENUES EBITA EARNINGS BEFORE PROVISION PROPOSED DIVIDEND FOR INCOME TAXES AND FOR THE FISCAL YEAR €16,090 M MINORITY INTEREST €15,898 M €2,182 M €1,627 M €1,526 M €1,477 M € 0.60 € 0.60(2) 2019 2020 2019 2020 2019 2020 2019 2020 (2) Subject to approval at the Annual General Shareholders’ Meeting on June 22, 2021. MARCH 2021 LETTER TO OUR SHAREHOLDERS — 3 UMG opens its share capital Vivendi has opened the share capital accelerate its ambition to create a global leader in of Universal Music Group (UMG), the world content, media and communications. The sale of 20% leader in recorded music. After the sale of of the share capital to the Tencent-led consortium has 20% of UMG’s capital, Vivendi contemplates allowed us to crystalize the fair value given that other the distribution of 60% of the music major’s investors have expressed interest in investing share capital to its shareholders. at potentially higher prices. A Vivendi Extraordinary Shareholders’ Meeting has been convened for March 29, 2021, to modify the company’s by-laws he opening of UMG’s capital, announced and make this distribution possible. several months ago, is being carried out in Subject to a positive shareholder vote, another several stages. First, a consortium led by shareholders’ meeting will be convened before Tencent bought 10% (transaction finalized the end of 2021 to vote on the distribution. on March 31, 2020) and an additional 10% This distribution, exclusively in kind, would take T(transaction finalized in January 2021) of UMG’s the form of an exceptional distribution (“special capital. The acquisitions were made based on an dividend”). The exchange ratio between UMG enterprise value of €30 billion for 100% of UMG. and Vivendi shares is currently under review. The presence of Tencent and its co-investors in UMG’s The listing of UMG’s shares would be applied for on share capital will allow UMG to accelerate its the market of Euronext NV in Amsterdam, in a development in Asia. On its side, Vivendi announced country that has been one of UMG’s historical homes. that it would use the cash from these two transactions to buy back its own shares, reduce its financial debt and finance acquisitions. Vivendi is now considering the distribution of 60% of UMG’s share capital to Vivendi shareholders. Vivendi’s / DRUMG institutional shareholders have been pressing for a number of years for a split or the distribution of UMG to reduce Vivendi’s discount. Prior to considering Lights Blinding a favorable response to this request, the Management Board wished to obtain a fair value for UMG to better serve the interests of its shareholders and therefore The Weeknd – will also provide Prisma Media with some interesting collaborative opportunities with the Vivendi invests group’s entities. The proposed acquisition remains subject to the information and consultation process with Prisma in media Media’s employee representative bodies, the authorization from the competition authorities and finalization of the legal documentation. ince 2014, Vivendi has had the ambition In addition to Prisma Media, Vivendi acquired 9.9% of creating a world-class leader in content, of Prisa in January 2021. Prisa is the leading media media and communications. At the end and education group in the Spanish-speaking of last year, the group, whose media world and owns El País, Santillana, Cadena SER, activities have up to now mainly involved Radio Caracol, AS and Los 40 Principales. Stelevision, decided to invest in the magazine press. The acquisition of a stake in Prisa will enable Thus, in December 2020, it signed a put option Vivendi to strengthen its position as a global agreement to acquire 100% of Prisma Media from media group and to expand its access Gruner + Jahr – Bertelsmann. The latter is the to Spanish-speaking markets in Europe, leading French press group in the sector, with Latin America and the United States. Vivendi 20 flagship brands (Femme actuelle, GEO, Capital, already has a strong presence in these areas. Gala, Télé-Loisirs, etc.). In Spain, it owns in particular the television More than 42 million French people connect with a production company Bambú Producciones, Prisma Media brand every month. This acquisition, a large video game creation studio, as well NEWS which is perfectly in line with Vivendi’s strategy, as advertising and communication activities. 4 — LETTER TO OUR SHAREHOLDERS MARCH 2021 C anal+ Havas Group provides complete continues its strategy coverage of Ligue 1 of targeted acquisitions In recent months, Havas Group has strengthened its Uber Eats 2020-2021 presence in the United States, Israel and Singapore, consolidating its presence in growth markets. Ligue 1 Uber Eats matches will join the major sports competitions that Canal+ already offers to its subscribers.