Vivendi Se Unsp/Adr

Good evening, everyone, and welcome to the Vivendi Full Year 2024 Earnings Presentation. This conference will be hosted by Mr. Arnaud de Puyfontaine, Chairman of the Management Board and CEO, and Mr. François Laroze, 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, during the Q&A session, analysts will have the opportunity to ask a question and this can be done by pressing star one on your telephone keypad to register your vote or your question. In order to allow as many analysts as possible to ask questions, can you please limit yourselves to one question and no follow-up questions? If at any point you require assistance, please press star zero and you will be connected to an operator. And I'd like to hand the call over to your host this evening, Mr. Arnaud Dupuy-Fontaine. Please go ahead, sir. Your line is open.

Thank you very much and good evening to everybody. As you're aware, 2024 was an exceptionally busy year for Vivendi, marked by the spin-off project and the respective listings of Group Canal Plus, AVAS and Louis Hachette Group. This operation was completed on a tight schedule running from December 2023 until the approval of the spin-off by 97.5% at the extraordinary general meeting on December 9th, 2024. Following this intense period, the Vivendi Group is now composed of a portfolio of listed investment managed dynamically, including among others, Universal Music Group, Telecom Italia, Bani J, and Media for Europe, and an operational asset with Gameloft, which we continue to support in its transformation into a multiplatform game publisher. The value of these assets as of December 31, 2024 amounts to over 7.1 billion, including 6.9 billion in listed securities. For 2024, the re-evaluated net assets, which reflects the debt adjusted estimate of the value of all listed and unlisted assets of the groups, stands at 4.8 billion, after accounting for €2.1 billion in debt and €0.3 billion in liabilities. The 2024 accounts are thus impacted by €5.7 billion due to the fair value adjustment of the span of assets, a purely accounting effect. As mentioned earlier, Vivendi is committed to a major transformation project aimed at creating value for all stakeholders. We are now a few weeks past the first day of trading, which was December 16. As you can see on the screen, Vivendi has risen by 15% since the beginning of the year and is outperforming the SBF 120 index, to which it is now linked. François will shortly discuss the details of our performance over the past year. If you will allow me, a few informative words about the newly listed entities to highlight. The exceptional performance of Avas, which closed a historic year, the very strong results of Louis Hachette Groupe, which combines Lagardère and Prisma Media, and Groupe Canalpuis' achievements of key milestones in becoming one of the leading players in the industry. And it's fair to say that if the activities resulting from the spin-off have not yet reached to date the expected level of value creation, we remain very confident that the anticipated valuations will be achieved. Thank you very much, and I will now hand over to Francois.

Thank you very much, Arnaud. I will walk you through the figures of the group for 2024. First of all, our key figures with this portfolio of €7.1 billion. As Arnaud mentioned, the net asset value of €4.8 billion, which is €4.69 per share. In terms of P&L, it's a revenue of €297 EBITDA minus one adjusted net income €111 and the net earnings group shares taking into account the impact of the split of negative by 6 billion. If we look at our investment portfolio, you know all the stakes of the Vivendi Group, starting by Universal Music with 9.94%. We remind you about Tim, MFE, BaniJ, Telefonica and Priza with no major evolution on these stakes. Just a few words on Lagardère. We're after the spin-off. We have invested in Lagardère for representing now 473% at the end of the year. We went up to 5% very recently. We disclosed this threshold last week. And this is mainly due to the exercise of the write-off session in the end of some shareholders of Lagardère. If we look at the valuation of this portfolio, it's for the listed company, it represents 6.9 billion at the end of the year 2024. 4.4 coming, 4.5 let's say, coming from UMG, the rest with Telecom Italia 0.9, Banijay 0.7, the remaining coming from MFE, Telefonica, Lagardère and Prisa. If we spend a few Se Unsp, which is our operating business unit. The revenue went down from 2023 to 2024 from 311 to 293. It's a 5.7 decrease. Nevertheless, due to a very positive and talented cost management, the Gameloft team management has been able to increase the EBITDA from 5 million to 8 million between 2023 and 2024. And if we were to compare the before restructuring charge, it's an increase from 10 to 14 million, confirming the very good performance of Gameloft. We have reminded the geographical speed of our revenues with North America being the first region at 45% of the revenues, and then Europe, 37, Asia, and Latin America. If we have a look at the net asset value for which we gave you the figures $4.8 billion, we start with the portfolio valuation we have already described of $7.1 billion. And then we deduct the net debt, which is $2.72 billion. And we also deduct some liabilities for $311 million. So at the end, we have this net asset value of $4.8 billion, which EUR 0.69 per share, knowing that we have 1 billion 0.29 shares in our capital. The financial debt evolution, we started the year with a 2.8 billion debt, which was the one disclosed at the previous year. Let me rapidly highlight some major events on this financial net debt evolution with the impact of the investment of our ticketing business early in the second half of 2024 for an amount of 300 million. We also have acquired 389 million of Lagardère shares, some of which have been part of the split and some others have been kept after the split. We have made share buyback for 343 million mainly exclusively on the first half of the year. and we have paid dividend to our shareholder for a little bit more than 250 million euro. If we look at the loan to value, we refer to this net debt of 2 billion and 72 million euro. This net debt comes mainly from the margin loan we have set up during the fourth quarter 2024 with five banks, five international banks. To this margin loan, we add the commercial paper from which we have 450 million at the end of the previous year, and our bank loans and other debt for 197 million. So at the end, we have this adjusted net debt of 2 billion 72 million euros. And if we compare it with the market value of our investments, it's a 30% loan to value ratio. If we look at our income statement, let's focus on the revenues and EBITDA tell you that our revenue is mainly coming from Gameloft and reminding you that the figures of 2023 are the one which has been restated in accordance with the IFS 5 rule. So the 2023 figures as the one restated on the current perimeter excluding all the impact of the spin calls, which have led the group. So the revenue went down, as I explained, due to Gameloft by 4.9%, and the EBITDA, which was 33 million negative last year, is slightly negative at 1 million, including the Gameloft performance, 8 million, the corporate cost for 126 million, and the Vivendi share of UMG earnings that we account for in the EBITDA for 120 million compared with 94 last year. If we go to the full P&L, starting from this EBITDA of minus one, we have the impact of the amortization and depreciation of intangible, mainly the goodwill impairment that we did for Gameloft for an amount of 140 million euros. We also have accounted the settlement of the agreement with institutional investors during the first half 2024 for 96 million, negative 96. So our earnings from continuing operation is a loss of 183 after the positive interest and the income for investment coming from the dividend of MFE, BaniJ or Telefonica. And then we had the impact of the earning from continuing operation with, as Arnaud mentioned, the impact of the fair value adjustments of the distributed assets based on the opening share price on December the 16th for 5.7 billion. That's the reason why the net income group share is a loss of 6 billion and 4 million euro Nevertheless, our adjusted net income, which represents the recurring result of the group, is positive by €100 million. As a conclusion, I will remind that these figures have been strongly impacted by the spin-off of the group into four entities. Let you know that we will release our 2025 Q1 revenues on April 28th. and that we will propose an ordinary dividend to the shareholder meeting of April 2028 of 4 cents per share, representing a yield of 1.5%, roughly 40 million euros, and that the dividend should be paid on the 2nd of May, if confirmed by the shareholders during the shareholder meeting. So that's where we are for 2024, and with Arnaud, we are at your full disposal to answer any of your questions.

Thank you very much, Mr. Lagos. Ladies and gentlemen, as a reminder, if you have any questions, please press star 1 on your telephone keypad, and just make sure that your line is not muted to allow your signal reach equipment.

So that is star 1 for questions. Ladies and gentlemen, I'd like to remind you once again, if you have any questions, please press star one on your telephone keypad at this time.

We do not appear to have any questions coming in at this time. I'd like to turn the call back over to you. One moment, please, sir. We just have a question popped in now and a couple of them. The first question is coming from Sami Kassab of BSB Paribas. Please go ahead. Your line is open.

Thank you very much and good evening, gentlemen. One question. Can you please remind me of the long-term strategy with the video games asset? Please. Thank you.

Well, thank you for your question. We are happy about the current performance of Gameloft, which has delivered numbers in a year without new launches, which has enabled the company to show that its foundations are ready for a bright future. So our strategy is to be able to generate organic growth while increasing margins in terms of operation. and to be in a position to seize a potential acquisition, Bolton acquisition, to grow the size of the company. We have read in the press some speculation about our willingness to, with Andy, to exit the game operation, which is an invalid information.

Thank you very much, sir. Our next question is coming from Eric Eravary of CEC. Please go ahead.

Yes, good evening. Thank you for taking my question. First one is on the corporate cost level, so it started to reduce last year. Are you planning to reduce it further in the coming years? And what could be the sort of normative corporate cost level for the new Vivendi? And second question on Telecom Italia, could we have an update on Thank you for your question.

We don't give you precise figures on the evolution of the corporate cost. Nevertheless, we can give you a trend. I reminded you that some people who have left the Vivendi Group following the the split and which have joined the different spin calls. It's more than 25 people who have left. So this will have a positive impact on the 2025 figures. And we also focus on reducing all type of OPEC. So we have an ambitious plan to keep on reducing, but we won't disclose precisely the ambition for 2025.

As we got to the question on Telecom Italia, we have made it very clear that our intention is to sell our stake in Telecom Italia. And this is the plan. So we have seen many speculation and rumors about the situation. but when we are in a position to be able to exit the company in good terms we'll do it. So it's a very pragmatic and active shareholder position as regarded to the sequence of events over the past 12 months and we want to be very dedicated in getting a solution as regards to the current situation.

Thank you. Thank you very much, sir. Ladies and gentlemen, as a reminder, if you have any questions, please press star 1 at this time. Thank you very much.

We have no further questions.

Well, thank you very much. Have a good evening and see you on the next occasion.

Thank you.

Thank you. Bye-bye.

Ladies and gentlemen, that concludes today's conference. Thank you very much for your participation. You may now disconnect. We wish you a very good day and goodbye.