Vivendi Se Unsp/Adr

Ladies and gentlemen, welcome to the Vivendi conference call regarding its 2025 annual results. The call will be structured in two parts. First, a presentation by the Vivendi Group management team, represented by Mr. Arnaud de Puyfontaine, CEO, and Francois Leraz, CFO. Afterwards, there will be a Q&A session. During this session, you may ask questions by dialing pound key 5 on your telephone keypad to enter the queue. I will now hand over to the management team. Gentlemen, please go ahead.

Hello, good evening and thank you for being with us this evening. We will, with François, comment on the full year 2025 annual results. So I will start by the key highlights and to get straight to the point. 2025 marks Vivendi's first fiscal year in its new structure following the spin-off in December 2024. The group has refocused over the past 12 months its business portfolio on content, media and entertainment, following the divestment of its telecom asset in Italy and Spain. Gameloft continued its strong momentum, driven by its successful transformation despite a challenging environment for the video game industry. and the group pursued its strategy of reducing corporate operating costs at headquarters. And now I'm going to hand over to François.

Thank you Arnaud. Good evening everyone. So I will walk you through the main figures of this year 2025 starting by the key figures of the P&L with these revenues of 307 million. EBITDA of 45 million compared with minus one last year and net income group share of 20 million for the year 2025. On the portfolios listed financial assets, we are at 5.5 billion compared with 6.8 at the end of previous year and we'll come back on it. In terms of financial net debt, our net debt is at 1.5 billion. before the loan to Lagardère, this 1.5 are to be compared with 2.5 one year before. If we now move to our portfolio of a listed company, no major move since our previous communication, but the stake in MFE, Media for Europe, which went down from 1980 to 1592% due to the dilution after the deal of MFE with ProSieben in Germany. For the other stakes, we are at the level we were during our last communication, i.e. almost 10% for Universal, 19% for Banijay, 11% for Prisa, and 13% for Lagardère. In terms of valuation of our portfolio, the listed financial portfolio is at 5.532 billion, mainly coming from UMG, 4 billion. Benny J is almost 700 million. Lagarde, 350 million. And MFE, 400 million. In terms of dividend received from these financial assets, it has represented 158 million for the year 2025. Now let's have a look at the evolution of our portfolio between the end of the year 2024 and the year 2025. It went down from 7.2 billion to 5.8 billion. This is the overall portfolio, the one I described as listed company, to which we have the Gameloft stake and the treasury shares. So we move from 7.2 to 5.9, let's say. Partly the evolution comes from acquisition and sale of the period. We have disposed mainly Telecom Italia and Telefonica representing a divestment of 1.4 billion during the period. and in the same time we have acquired new shares of Lagardère for 296 million, which was the end of the tender offer with Droits de Session, which had been exercised during the first half of 2025. So it's a net disbursement of 1 billion, 1 billion 053, And in the same time, we have had evolution of our existing portfolio. The main evolution is about UMG, which went down by 453 million. It's the evolution of the stock price between the end of the year 2025, roughly 24 euro per share, to the end of the year 2025, roughly 22 euro per share. There has been a positive evolution of TIM before the disposal, which is 206 million. and that explains the total change of portfolio of 294 million. A few words now on Gameloft. Gameloft which has done a very positive year. The revenue is up by 4.2% in organic and the EBITDA almost doubled from 8 million to 15 million. and you see the evolution by a region with a very sound performance of North America. Let's say on Gameloft that Gameloft has worked hard on its cost basis and now take advantage of this reduction of cost with a good performance of main games including Disney's Remake Valley which is the game number one in the Gameloft portfolio. In terms of financial net debt evolution, from 2,573,000,000 at the end of the previous year to 1,500,000,000 at the end of this year, mainly coming, as you can imagine, from the disaster I just described, 1.5 billion, Telecom Italia, Telefonica mainly, and the acquisition of the Lagardère share for 296. The CFFO has been very solid. The cash flow from operation at 68 million. We have paid dividend for 40 million. Interest in tax for 42 million. And we have the impact of the discontinued operation mainly coming from the end of the split operation, we have generated 82 million of discontinued operation, which leads us to this 1.5 billion net debt at the end of the year 2025. This 1.5 billion on the next chart, you will see where it's coming from. We have still our margin loan with five banks for 1.3 and 50 billion euro. In addition, we have some short-term marketable securities for 352 million, mainly in UCP. So we have this 1.7 billion financial net debt and 200 of gross cash position, which leads to the 1.5 net debt position at the end of the year 2025. If we now move to our P&L, the revenues, I said, 307 million, up by 4.3% in organic, mainly coming from Gameloft, which reflects the good performance I've already described. And by business unit, EBITDA, you see the positive evolution of Gameloft I have already described. and the very positive evolution also of the corporate costs, which are coming from 126 million to 99 million, which is the route we are on to reduce our issue cost for the coming months. To finish, I will describe the net income group share, which is a profit of 20 million compared with the huge loss of last year due to the split operation. Starting from the EBITDA I have just described at 45 million then you have a few things to say but the level of the interest at 73 million and mitigated by the income of from operation which are the dividend coming from Lagardère, MFE and Banijet. So the net financial cost is at zero with the interest being at the interest plus the other financial So that's where we are in a nutshell. And what we can tell you is that the Q1 revenues will be released on April 21st. Day of the next shareholder meeting and that during this shareholder meeting will be proposed a dividend of 4 cents per share which is a yield of almost 2% at the current stock price in line with the guidance we gave during the time of the split. This dividend will be paid on April 24th. So that's where we are for this year 2025. And with Arnaud, we are now at your disposal to answer any question. Please.

If you wish to ask a question, you may do so by dialing pound key 5 on your telephone keypad to enter the queue. In order to allow as many analysts as possible to ask questions, can you please limit yourselves to three questions and no follow-up questions? If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Laura Metier from Morgan Stanley. Please go ahead.

Hi, thank you for taking my question. I just have one question, please. Do you have an update on the cash and portfolio allocation strategy, please? Thank you.

Could you repeat, because the song is quite bad, and we, I don't know, I think Laura was about... Sorry, is that better?

Yes, it is better.

Okay, sorry about this. Do you have any updates on the cash and portfolio allocation strategy, please?

Thank you Laura for your question. As you have seen during 2025 we exited our position in Telecom Italia and Telefonica. And as regards to the future and based on our current portfolio, we are monitoring the situation of the different assets. and preparing for the right timing as regard to an exit when the time is there and the value that we can expect from our different stake is going to be there and as regard to the proceeds the proceeds are going to be used on three different objectives Number one is going to be dividend paid to our shareholders, second is going to be the decrease of our level of debt and the remaining being allocated to situation and companies that are going to be part of our next equity story. So we are currently preparing different options available to us in the future and that's work in progress.

Do you want to add something, François? No, I think you've been extensive, thank you.

That's very helpful. Thank you.

Merci.

The next question comes from Eric Reveri from CICCIB. Please go ahead.

Yes, good evening. A couple of questions, if I may. First one is on your corporate cost, so you announced restructuring at the headquarters. What is the level of corporate cost that you are targeting after this restructuring plan implementation? Second question is on your portfolio. Is there any change in your holdings since the beginning of the year? And also a question on Universal Music. Could you make a comment on whether or not market valuation of UMG and also the decision by the management team to postpone the dual listing in the U.S. And final question is on treasury shares. So you just canceled 7 million of treasury shares. Out of the remaining 27.9, how much have to be canceled before your end days?

Okay, thank you Eric. Starting by the corporate cost, as I said, we are on the route to reduce this corporate cost. We have done positive evolution in 2025. We aim to keep on reducing and the target is roughly to be at, let's say, between 2025 and 2027, once the plan would be achieved, to be a reduction of, let's say, around 20% of our existing costs. We are still negotiating the plan, so we can't give you any precise figures, but we could give you some more flavor in, I would say, one or two months' time, once the plan has been fully negotiated and implemented. On the portfolio, Rick, could you tell me about your question precisely? Yes, since the beginning of the year. Unfortunately, the main evolution is about UMG as the other state has been quite stable. And UMG, you know the story, what 22 million, 22 euro per share at the end of the year 2025 when we close the accounts. And we are roughly today at 18 euros, sometimes below. It's 4 euro, we have 181 million of shares, so it's 720 million of reduction of our portfolio.

So that's the main evolution of the shares. And we have not sell any shares.

We have kept the portfolio as it was during these first two months. I will hand over to Arnaud on the UMG questions. On the treasury shares, we still have 27,000 shares to cancel. Most of them will be canceled during the month of July. and I think it's 17 in July and the rest between now and July. So at the end of the month of July, we'll have canceled all our shares, the one we had in our portfolio early this year. So now I give the floor to Arnaud.

As regards to the situation of Universal Music Group, well obviously we have seen the numbers which have been released and those numbers are pretty compelling. They were good results. And obviously the trend of the share price over the past few weeks has been pretty disappointing. So we do think that obviously question mark as regard to AI impact in the business model and so on and so forth is the big issue. I guess that markets and the street doesn't like uncertainty and I really think that at this level of price and compared to the target price of main analysts, we're far away from the true value of the business. We at Vivendi do trust the solution branch and the management team to be able to ride through that period and to prove that the business should have a much greater value as it is today. And I remain optimistic and positive as regard to the forecast. And as regard to the listing, Well, as a shareholder of the company, we do back every initiative as regard to value creation for the shareholder. I have not been in the details of this project of double listing in New York, so I can't comment and make any statement as regard to the situation. Again, as a proactive shareholder and with the willingness to support any initiative to create value, we'll do that. I don't know whether this US listing would reach this objective, so I can't comment anymore on that specific topic. Thank you, Eric.

Thank you very much.

Any more questions?

As a reminder, if you wish to ask a question, you may do so by dialing pound key 5 on your telephone keypad to enter the queue. In order to allow as many analysts as possible to ask questions, can you please limit yourselves to three questions and no follow-up questions? If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Sylvia Cuneo from Deutsche Bank. Please go ahead.

Thanks, good evening. I just wanted to ask about something from your press release about how you remain committed to the strategy of selling the businesses you control and of actively managing your portfolio of investments. So I wanted to ask if you see, for example, opportunities in gaming, so adjacencies for Gameloft or perhaps other sub-sectors And yes, if you could help us with the thinking of what areas could be most of interest for you. And then secondly, regarding your views around how AI could change the gaming space in the medium term and if there is any applications and implementations you are doing within Gameloft. Thank you.

Well, thank you, Sylvia. We, with Francois, are going to do our best to be comprehensive, but at least 50% of your questions were just blurred by electronic influence, so I'm not sure that we're going to be comprehensive, so if there are a few questions that we are not answering, please tell us. I understand that you wanted to have Vision as regard to which targets we could have in terms of M&A in the future and the place of Gameloft in that environment. So, Vivendi is going to remain an investor in media, entertainment, information and content operation. And as we speak, a team is working on different opportunities. Opportunities should be opportunities of growth and matching this wide range of opportunities. And we are currently working on a different scenario to be ready when the time comes. As we got to Gameloft, well, you have seen the numbers 2025 compared to 2024. And we are happy about the trend and we do think that in a market which has gone through many changes and a kind of a situation of decline, Gameloft has performed well. And for two main reasons. A, a really redefinition of the management organization and the cost base operation, focusing on the big hitters that could really make a difference, our blockbusters. and cancelling the kind of operations which were not as positive and while transforming the company from mobile game operation into Multi-Platform Operations. The level of quality of our studio, the level of quality of our publishing team create the right dynamic to be able to make a difference. And yes, we do think that the gaming environment with those solid foundation that Gameloft has established over the past few months and the numbers that have been delivered is opening for us perspective. And we are currently working on the different opportunities. That's for the gaming. And as we got to AI, I think that AI is two things. It's how can it improve our creativity and the capacity on the different line of business to focus our resources in Se Unsp-Adr And at corporate level, creating an environment where, here also, we're going to make sure that the resources available are going to be focused on what is going to create the true value for the shareholder. As we know, AI is moving on a day-to-day basis. It's a period of uncertainty on the kind of a size of the importance of of AI in the operation but we are in the creative business and in the creative business there was a famous sentence as regarded to can AI be creative and I think that this is a sentence equivalent to the one which could ask whether submarines know how to swim and we do think that it's it's a transformation factor obviously in our operations but i'm believing that in the creative world among others but we are in the creative business ai will be benefit to the operation and is opening for our different operations more opportunities than threats. And maybe Francois, you want to add something? Have I missed something, Sylvia, in your question? Thank you very much.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Well, I'm going to speak on behalf of François and I and our team. Thank you very much for your attendance. Thank you very much for your question. Thank you very much for your support. And have a good evening and speak to you all in the near future. Thank you very much. Good evening.