Vivendi’s 2016 Results: Core Operating Profits Drop Due to Canal Plus Losses, Universal Music Provides Bright Spot

PARIS — Vivendi, the media conglom helmed by French billionaire Vincent Bollore, had a tough year in 2016.

Due to losses at Canal Plus’ channels in France, Vivendi’s core operating profits fell to 724 million Euros ($766 million), a 23 percent year-on drop. Its revenues, meanwhile, remained stable at $11.4 billion.

A bright spot in Vivendi’s 2016 finances was Universal Music Group’s (UMG), which proves once again to be vector of growth for the company. Universal Music saw its revenues go up 4.4 percent to $5,5 billion, bolstered by a 57.9 percent spike in subscriptions and streaming revenues. Vivendi cited the success of new albums by Drake, Rihanna, Ariana Grande, and the Rolling Stones. Universal Music Group’s income from operations totaled $727 million, a 10.7 percent year-on increase.

As anticipated, Canal Plus Group, which includes Canal Plus’s pay TV outfit and Studiocanal, the film and TV production and distribution banner, dropped 4.7 percent to $5.5 billion in 2015.

Canal Plus’s pay-TV operations fell by 6.1% due to its plummeting subscriber base, which lost 492,000 subs in 2016 and totaled 5.2 million subscribers by year-end. Canal Plus Group’s income from operations fell to $320 million, compared to $573 million in 2015, while its core operating profit totaled $254 million, compared to $480 million in 2015.

Vivendi explained the market fall was “mainly due to the decline in the individual subscriber base in mainland France (excluding wholesale agreements) and content investments.”

The losses at Canal Plus’ channels in France mounted to $422 million, compared to $279 million in 2015.

Vivendi, however, signaled Canal Plus was on an upward trend thanks to the recent launch of six new packages and its carriage deals with Free and Orange. Signed in the last quarter of 2016, these deals have brought in an additional 2.9 million subscribers to Canal Plus, allowing the paybox’s premium channels to be included in the set-top boxes of Orange and Free.

Canal Plus Group’s free-to-air channels, particularly C8 (previously called D8), pulled a 6.9% increase in advertising revenues. Vivendi said “C8 was the most watched DTT channel in France and the fifth most watched channel overall at the end of 2016.”

Studiocanal’s revenues fell to $440 million, a 26.1 percent year-on drop. Vivendi pointed out 2015 had been particularly strong due to the success of several movies, including animated features “Paddington” and “Shaun the Sheep,” as well as high-profile English-language movies such as “Imitation Game,” “Legend,” and “Hunger Games.”

While it struggled in France, Canal Plus’s paybox continued to expand overseas, where it pulled 6.25 million subscribers, a 5.7 percent year-on increase. Africa proved the fastest-growing continent for Canal Plus, totaling 2.8 million subscribers, 20 percent more than in 2015.

Looking ahead, Vivendi predicts its recent strategic moves will allow the company to increase its revenues by more than 5% and core operating profit by 25 percent in 2017.

http://variety.com/2017/biz/global/vivendis-2016-results-canal-plus-universal-music-1201994854/