Vivendi Se Unsp/Adr

Good evening, everyone, and welcome to the Vivendi Full Year 2022 Earnings Presentation. This conference call will be hosted by Mr. Arnaud Dupuy-Fontaine, Chairman of the Management Board and CEO, and Mr. François Larose, Member of the Management Board and CFO. As a reminder, this call is being recorded. During the call, you'll be in listen-only mode. However, later on in the call during the Q&A session, Analyst will have the opportunity to ask three questions without any follow-up questions. This can be done by pressing star 1 on your telephone keypad to register your question at any time. If at any point you require assistance, please press star 0 and you will be connected to an operator. I'd like to turn the call over to Mr. Arnaud, the P410. Please wait, sir. Your line is open.

Thank you. Hello, everyone, and welcome, and thank you for joining us today. In a few minutes, I will hand things over to Francois Larose for a detailed review of our annual results. Before that, I would like to highlight the solidity of our group with another year of double-digit growth. Revenues increased by 10.1% compared to 2021, driven by our two main businesses, Avas and Canal+. And Group EBITDA increased by 35.6% or 10% for our controlled businesses, proving their resilience. Adjusted net income, excluding Telecom Italia, increased by 19.4%. Net earnings amounted to a loss of 1 billion, which is the result of Telecom Italia's deconsolidation, François will come back to this. I want to warmly thank all our colleagues around the globe for this very solid performance. The new chapter we wanted to open following the distribution of UMG Group's share capital is off to a great start. 2022 was a turning point for Vivendi, not only because, as I just mentioned, it was the first full year without Universal Music Group. But, more importantly, we took a major step forward in our strategic project, building on the three main pillars you are familiar with by now. First, transformation. All our entities have continued their transformation. Let me give you just three examples. Gameloft made an important strategic shift by launching its very first multiplatform game, Dreamlight Valley, which is a phenomenal success. Gameloft revenues reached their highest level ever. Moreover, embracing console should make it possible to double our target market. Prisma Media is my second example. Digital now represents 35% of its revenues compared to 31 in 2021. The group is the leader in digital and video audiences. Every month, it reaches 8 out of 10 French people thanks to digital. Third example, Editis. The leader in education in France, the group accelerated its transformation thanks to the acquisition and integration of EduClever, the leader in e-learning with 5 million learners. We also moved forward on our second pillar, internationalization. The Canal Plus group continued its dynamic development and, in particular, increased its stake in Multiture's Group, now owning 30% of its capital. 63% of Canal Plus subscribers are outside France. As for AVAS, a record of eight new agencies came on board last year to strengthen our range of expertise in the UK, Spain, Australia, and China. At group level, 43% of Vivendi's employees are based outside Europe. Our ambition remains global. Third and last pillar, integration. As I talked about during our half-year results conference call, in 2022 we put in place a new management board and a newly created executive committee. All our businesses are now represented. This will facilitate more and more joint projects for more value creation. We created a winning positioning by being at the crossroads of media, communications, and entertainment. For example, it allowed AVAS to win a project with EDF in cooperation with other group entities, including Canal, Gameloft, and Prisma to support the efforts of French people in their approach to energy sobriety. Across all pillars, 2022 was full of achievements. These successes position our group as one of the world leaders in media, entertainment, culture and communication. In parallel, we continue to shift towards a more sustainable business model. With a burning planet and a fragmented world, there is no need to remind you of the urgency for companies to have a positive impact. As a content group, We are particularly focused on delivering meaningful, inclusive content and content that contributes to raising awareness on climate change, such as the Studio Canal production, Goliath. As I did last year, I would like to point out some of our main ESG developments. You will find more details on the slides and on the appendices. On the environment, our CO2 emissions, scopes one and two, have been reduced by 10% compared to 2021. On social, We increased the percentage of women within our management bodies. They now represent 38%. As you know, we also welcome two women to Vivendi Management Board, Claire Leost and Céline Mert-Béral, out of six members. Looking ahead, we are extremely confident and ambitious for the future for five main reasons. The first is the unstoppable worldwide consumer appetite for culture, media, and entertainment. According to a report from PWC, the global entertainment and media industry is expected to grow at a CAGR of 4.6% through 2026. And in this dynamic industry, we strongly believe in our ability to make the difference. Because, and this is the second reason for our confidence, we are investing in quality content and building IPs. Having the most extensive and appealing offer possible is key to attracting consumers. Canal Plus has, for example, the largest film library in Europe. Across all forms of content, the brand has devoted €3.5 billion to financing programs in 2022. Third reason, strong and appealing brands that have stood the test of time. Havas is nearing its two-century anniversary. Canal Plus has been around for almost 40 years. Prisma Media, 45 years. They have proven that their capacity to adapt and transform to stay the course. With this, we come to the fourth and fifth reasons, agility and time. In increasingly uncertain environments, agility has become as important as scale. Each of our businesses is agile enough to seize opportunities, innovate, and yes, even surprise. look at the exciting and expected launch by Prisma of Harper Bazaar in France. And time, thanks to our principal shareholder, the Poloré Group. We provide a long-term vision and give the necessary resources to our business to succeed, as we did for Gameloft, enabling it to transform itself from solely mobile to cross-platform. This long-term vision is what allows us to create value for all stakeholders, As you can see on the chart, if you held one Vivendi share in June 2014, the value in December 2022 was multiplied by 2.3 with dividends reinvested. Over the same period, the CAC 40 with dividends reinvested posted a performance of 1.8. These coming months will enable us to reach new steps. We are working on finding a solution regarding Telecom Italia. As you know, in January, Vivendi representatives resigned from their role as members of its board of directors. This is why we stopped the consolidation of Telecom Italia share. This will give Vivendi greater freedom to defend its position outside governance bodies as a shareholder over the long term. We remain determined to ensure that this company's real value and unique network are properly recognized The words of appreciation extended by the Italian government towards Vivendi last week are an important signal and give us hope in the possibility of opening a new chapter. We are also fully mobilized on the Editis-Lagardère matter. We are engaged into a constructive dialogue with the European Commission with a view to obtaining approval for our proposed transaction with Lagardère. We are also pursuing discussion with buyers who have expressed interest in acquiring a controlling interest in Editis, we received three solid offers and have conducted confirmatory due diligence. The combination of our two groups, when approved by the European Commission, will offer exciting perspectives. I will now hand things off to Francois. Thank you for your attention.

Thank you, Arnaud. Good evening, everyone. So I will walk you through the result of the group, starting by the nutshell, reminding that for year 2022, we have achieved a revenue of $9.6 billion. It's an increase by 10%. EBITDA of control business of $646 million increased by 10%. If we add to this control business, the EBITDA coming from the equity affiliates, it goes up to $860 million. It's an increase by 36%. Let's remind that in its revenues and EBITDA are excluding EDTs, which is now considered as business for sale. The adjusted net income, excluding the Telecom Italia impact on which we'll come back, is $677 million. It's an increase by 19%. Let's remind that we have almost 36,000 employees increased by 7% compared with our increased by 10% of revenue confirming the productivity of our main businesses. The financial situation of the group Vivendi is very solid. The net debt is 860 million compared with our shareholders' equity of 17 billion. The cash flow generated by our businesses is 594 million and we still have available credit facilities for 2.8 billion. Let's move to the bridge from our adjusted net income to the net result group share. As we said, we have an adjusted net income of 677 million, but as Arnaud mentioned, we have been in a position to take the impact of the deconsolidation of Telecom Italia, taking the stock price at the end of the year 2022, with an impact of 1.3 billion euro, from 0.6 roughly to 0.21 euro per share. To this impact, we had the income from equity affiliate for Telecom Italia, which was a loss of 393. Then we have the contribution of Banijay to FLE, which was during the first half, 515. And another discontinued operation impact which is this year a negative impact, taking into consideration that we have taken a provision of 300 million for ADTs in our account.