Vivendi Reports Very Good First Quarter 2007 Earnings, 2007 Outlook Affirmed

Vivendi Reports Very Good First Quarter 2007 Earnings, 2007 Outlook Affirmed

Vivendi (Paris: VIV):
Revenues: €5 billion, an increase of 5.3% (7.0% at constant currency) when compared to the first quarter of 2006
Adjusted earnings before interest and income taxes (EBITA): €1.3 billion, an increase of 21.7% (23.4% at constant currency) when compared to the first quarter of 2006
Adjusted net income: €771 million, a 22.8% increase when compared to the first quarter of 2006
Earnings, attributable to equity holders of the parent: €932 million, an increase of 31.8% when compared to the first quarter of 2006
2007 Outlook affirmed: adjusted net income is expected to be at least €2.7 billion

Comments on Vivendi’s First Quarter 2007 Financial Indicators

Revenues increase to €5,020 million compared to €4,766 million for the first quarter of 2006, up 5.3% (and 7.0% at constant currency).

EBITA totals €1,274 million compared to €1,047 million for the first quarter of 2006, an increase of 21.7% (23.4% at constant currency). EBITA’s strong increase reflects Vivendi’s business units’ good performances, particularly Canal+ Group, Maroc Telecom and Vivendi Games. EBITA also includes the positive impact (€73 million) of the settlement of a tax litigation and favorable calendar events such as the exceptionally successful launch of the World of Warcraft: The Burning Crusade expansion pack and three fewer days of the French football Ligue 1 when compared to the same period last year. The first positive effects of the Canal+ and TPS combination are appearing while transition costs are limited, this quarter, to €5 million.

Income from equity affiliates totals €82 million compared to €68 million for the first quarter of 2006, representing an increase of €14 million. The fall in net income from NBC Universal, solely due to the decline of the US dollar (€65 million compared to €71 million for the first quarter of 2006), is more than offset by the increase in income from Neuf Cegetel.

Adjusted net income amounts to €771 million (representing adjusted earnings per share of €0.67), compared to €628 million for the first quarter of 2006 (representing adjusted earnings per share of €0.55), an increase of 22.8%.

Earnings, attributable to equity holders of the parent, amount to €932 million (representing earnings per share of €0.81), compared to €707 million for the first quarter of 2006 (representing earnings per share of €0.61), an increase of 31.8%.

The difference between earnings, attributable to equity holders of the parent, and adjusted net income mainly includes the dilution gain of €239 million resulting from the sale of 10.18% of Canal+ France to Lagardère.

Vivendi’s Business Units: Comments on First Quarter 2007 Revenues and EBITA Universal Music Group

Revenues

Universal Music Group’s (UMG’s) revenues of €1,027 million declined 8.7% versus the same period last year and 4.2% on a constant currency basis. Very strong sales in the UK were offset by declines in the US, Japan and France reflecting the timing of international and domestic releases and difficult recorded music market conditions.

Digital sales of €161 million were up 54% versus last year in constant currency, representing 15.7% of total revenues versus 9.9% last year, with strong growth across both the online and mobile sectors.

Best sellers included releases from Fall Out Boy, Nelly Furtado and Akon. Other best sellers were titles from the UK’s Amy Winehouse and Kaiser Chiefs and the debut release from Mika. UMG dominated the UK market in the first quarter with nine of the top ten best selling albums in the period according to The Official Chart Company.

UMG intends to release albums by Andrea Bocelli, 50 Cent, Maroon 5, Diana Krall, Bon Jovi, Black Eyed Peas, Eminem, Florent Pagny, Mariah Carey and Jack Johnson by the end of the year.