Vivendi Posts $1B Loss For 2022 On Telecom Italia Deconsolidation But Expresses Confidence As Revenues Grow

Vivendi on Wednesday posted a full-year loss of $1.07B (1.01B Euros) for 2022, linked to the deconsolidation of its Telecom Italia stake, but painted a positive picture in terms of its overall health and revenue. The loss compared with a record profit of $25.9B (24.6B euros) in 2021, which was driven by its spin-off of a […]

Vivendi Posts $1B Loss For 2022 On Telecom Italia Deconsolidation But Expresses Confidence As Revenues Grow

Vivendi Posts $1B Loss For 2022 On Telecom Italia Deconsolidation But Expresses Confidence As Revenues Grow

Vivendi on Wednesday posted a full-year loss of $1.07B (1.01B Euros) for 2022, linked to the deconsolidation of its Telecom Italia stake, but painted a positive picture in terms of its overall health and revenue.

The loss compared with a record profit of $25.9B (24.6B euros) in 2021, which was driven by its spin-off of a 60% stake of Universal Music Group.

Full-year revenues for the Paris-based global media and entertainment conglomerate rose 10.1% to $10.1B (9.6B Euros) year-on-year. EBITA grew 35.6% to $915M (868M Euros). Adjusted net income excluding Telecom Italia increased by 19.4% to $713M (677M Euros).

The group said the rise in revenues had been driven by the performance of its two biggest entities, communications outfit Havas and pay-TV giant the Canal+ Group, as well as video games specialist Gameloft.

“I would like to highlight the solidity of our group with another year of double-digit growth,” CEO Arnaud de Puyfontaine said in a results call.

“The chapter we wanted to open following the redistribution of UMG group capital is off to a great start. 2022 was a turning point for Vivendi.”

Key to Canal+ Group’s positive performance was growth in its subscriber portfolio which reached 25.5m units worldwide by the end of December 2022, compared to 23.7M at the end of 2021.

Within this, the group saw a net increase in subscribers of 457,000 in France over the course of 2022, reaching 9.5M in total.

The number of subscribers outside mainland France stood at 16M at the end of December 2022, with 6.3M in Europe, 7.6M in Africa, 1.2M in Asia-Pacific and another 800,000 in French Overseas territories.

Canal+ Group revenues came in at $6.1B (5.8B Euros), representing an increase of 1.7% on 2021. Profitability improved compared to 2021, with EBITA rising 7.3% to €515 million.

Its revenues from international operations increased by 3.5% due to the growth in the number of subscribers (+1.3 million year-on-year).

Revenues for the Canal+ Group’s film and TV production and distribution arm Studiocanal fell by 22.8%.

Vivendi said the drop was explained by an exceptional year for TV series in 2021 as well as the postponement of the release of international films to 2023 to optimize their box-office performance.

It added that the fall in revenue had not impacted the unit’s EBITA, which increased compared to 2021.

Studiocanal also came out as France’s leading French film distributor in 2022 with 8.9 million admissions (representing a gross of roughly $63M), thanks to strong performances by local productions November, Rise, Superwho?, Goliath and Waiting for Bojangles.

Vivendi said significant developments for the Canal+ Group had been the strengthening of its offering late last year with the arrival of Paramount+, within the Canal+ offer.

Canal+ is the only platform in France that can include Paramount+ in its commercial offers and is the exclusive distributor of Paramount+ in French-speaking Switzerland. Other streaming services available via bundles on Canal+ include Netflix, Disney+, beIN and OCS.

Other recent game-changing developments for the Canal+ Group included its agreed acquisition of telecom group Orange’s OCS pay-TV package and film and series co-production subsidiary Orange Studio. A memorandum of understanding for the operation was signed at the beginning of the year.

Another significant operation was Canal+ Group’s expansion of its stake to 30.27% in the MultiChoice Group, the leading pay-TV operator in English and Portuguese-speaking Africa in more than 50 countries.

Vivendi said the move demonstrated its confidence in the pay-TV outfit and the African continent.

Elsewhere in the Vivendi group, the communications arm Havas, saw revenues rise 18.1% year-on-year to $2.9B (€.7B Euros).

Vivendi noted the company had pursued a robust international acquisitions strategy over the past year acquiring companies in the UK, Australia, China and Spain.

Vivendi also praised the performance of video game specialist Gameloft.

It noted that for the fourth quarter of 2022, Gameloft’s revenues were $111M (106M Euros), up 30.7% compared to the same period of 2021, and crossing for the first time the symbolic threshold of 100M Euros ($105M) for a quarter.

Overall 2022 revenues also reached an all-time high of $338M (321M Euros), up 21.2% compared to 2021. EBITA was €12 million, up 46.3% year-on-year.

Vivendi said the growth was the fruit of a strategic shift towards Console-PC-Mobile multi-platform games and the success of Disney Dreamlight Valley, which was developed and published by Gameloft in September 2022.

Key aims for Vivendi over the coming year will be the completion of its planned takeover of rival French media group Lagardère.

The deal, begun in 2022, is currently caught in the crosshairs of the European Union’s antitrust authorities over concerns about the implications of a merger between Lagardère’s publishing house Hachette and Vivendi’s publishing subsidiary Editis.

Vivendi has signalled its willingness to sell Editis in order to clear the way for its acquisition of the far larger media group Lagardère.

De Puyfontaine said he was confident a solution could be found by early summer. He said Vivendi was planning to respond to a statement of objections from the EU by mid-March and propose “remedies” shortly after.

“The decision of the European Commission is expected by the end of May and the end of the process in June is based on the agreement on the future controlling shareholder of Editis,” he said.

“We have a guideline and an objective and obviously we’re working on a different possible alternative, bearing in mind our ultimate goal is to get the agreement to complete this operation with Groupe Largardère.”

Vivendi is also hoping to arrive at a resolution for the future of Telecom Italia, in which it is the largest single shareholder.

Negotiations between the Italian government and the indebted telco’s different stakeholders are currently underway, with the potential sale of its landline grid on the table.

“We were working on finding a solution,” said de Puyfontaine.

“As you know, in January Vivendi representatives resigned from their role on the board of directors. This is why we stopped the process of consolidation of Telecom Italia. This will give Vivendi greater freedom to defend its position outside of governance bodies. We remain determined to ensure that this company’s real value and unique network are properly recognized.”

He said Vivendi’s position with regard to Telecom Italia was to be “a very active shareholder”. He said there were multiple scenarios that could play out.

In terms of further mergers and acquisitions, one analyst asked whether Vivendi still had designs on a minority stake in Lionsgate’s pay-TV and streaming platform Starz.

De Puyfontaine said a recent change in tack by Lionsgate to spin off its studio division meant he could not comment at this time.

“You have seen that Lionsgate has announced it wants to sell its studio business. We are not in a position to comment further until the new structures are set up,” he said.

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