Vivendi: Results for the First Nine Months of 2013

Regulatory News:

Vivendi (Paris:VIV):

Comments on Business Highlights

Canal+ Group

Canal+ Group revenues were €3,857 million, up 5.8% compared to the first nine months of 2012. This increase was primarily due to the integration of new activities in free-to-air television (D8 and D17) in France and to the "n” platform in Poland.

At the end of September 2013, Canal+ Group’s total portfolio reached nearly 14 million subscriptions, compared to 13 million one year ago. This strong growth is due to the integration of the "n” subscribers as well as the good performances recorded in Africa and Vietnam.

The success of the free-to-air channel D8 is confirmed. Its audience share reached 3.2% in September (+1.1 point year-on-year), ranking D8 first among the French digital terrestrial television channels for the first time ever.

Canal+ Group’s EBITA was €675 million, excluding €28 million in transition costs related to the integration of new businesses. The year-on-year change mainly resulted from an increase in programming costs, due to sustained investments in content and one additional calendar day in the French Ligue 1 soccer competition, as well as a slowdown in the economic environment which had a negative impact on the advertising market.

In addition, on November 5^th, Vivendi acquired the 20% minority stake in Canal + France previously owned by Lagardère for €1.020 billion, ending all pending litigations between the two groups.

Universal Music Group

Universal Music Group (UMG) revenues for the first nine month of 2013 were €3,398 million, up 21.9% at constant currency (+17.1% at actual currency) compared to the first nine months of 2012. At constant currency and constant perimeter (i.e., excluding revenues from EMI Recorded Music, acquired at the end of September 2012), revenues increased 0.9% year-on-year for the first nine months of 2013 and 6.7% in the third quarter alone compared to the same quarter of the previous year. Digital sales represented 53.9% of recorded music sales for the first nine months of 2013, compared to 47.6% a year earlier.

Recorded music best sellers for the first nine months of 2013 included artists and bands such as Imagine Dragons, Rihanna, Robin Thicke, Drake, Taylor Swift and France’s Stromae and Vanessa Paradis.

UMG’s EBITA of €255 million was up 12.5% at constant currency (+7.1% at actual currency) compared to the first nine months of 2012. Excluding restructuring and integration costs, EBITA was up 19.9%. In the third quarter alone at constant currency, EBITA increased by 46.8% due to higher sales and strict cost management.

The synergies related to the EMI Recorded Music acquisition are on track and should reach the target of more than £100 million by the end of 2014.

GVT

GVT revenues increased by 14.4% at constant currency (+1.2% at actual currency) compared to the first nine months of 2012, reaching €1,297 million. This performance was achieved despite the slowdown in the Brazilian economy and the social protests that took place in most of the country’s large cities in June.

By the end of September 2013, GVT was operating in 149 cities, compared to 137 cities at the same time last year, and launched operations in the city of São Paulo.

The average broadband speed provided to GVT´s subscriber base is now 13.2 Mbps, remaining the fastest one in the country according to Akamai Institute. As a result, GVT customers enjoy speeds equivalent to those provided in countries with the fastest broadband speed in the world.

GVT’s pay-TV service continues to perform well and generated revenues of €125 million during the first nine months of 2013. The number of subscribers reached about 567,000 as of September 30, 2013 (+81.7% year-on-year), representing a 22.6% penetration rate among GVT’s broadband customer base.

GVT’s EBITDA reached €531 million, a 14.0% increase at constant currency (+0.6% at actual currency) compared to the first nine months of 2012, and its EBITDA margin remained strong at 40.9%.

GVT’s EBITA was €298 million, a 1.1% decrease at constant currency (-12.6% at actual currency) compared to the first nine months of 2012, due to increased depreciation expenses related to the development in pay-TV.

On October 1^st, Vivendi and Echostar announced the start of negotiations to create a pay-TV joint-venture in Brazil. The future entity intends to fully benefit from the country’s fast-growing pay-TV market which would also benefit from the expected higher demand driven by two key global events to be held in the country: the Fifa World Cup in 2014 and the Olympic Games in 2016.

SFR

SFR revenues were €7,616 million, a 10.5% decrease compared to the first nine months of 2012 due to the impact of price cuts in response to the competitive environment and to tariff cuts imposed by the regulators⁴. Excluding the impact of the tariff cuts imposed by the regulators, revenues decreased by 7.5%.

Mobile revenues⁵ amounted to €4,758 million, down 16.5%. Excluding the impact of regulated price cuts, mobile revenues decreased by 12.2%.

During the first nine months of 2013, SFR’s postpaid mobile customer base increased by 1,169,000 net additions. At the end of September, SFR’s postpaid mobile customer base reached 17.732 million, a 7.8% increase year-on-year. In the Mass Market Postpaid Voice customer market, in the third quarter, SFR recorded its best sales performance since the fourth quarter of 2011. The customer mix (the percentage of the number of postpaid customers in the total customer base) amounted to 83.5%, a 4.7 percentage point increase year-on-year. SFR’s total mobile customer base reached 21.237 million. Mobile Internet usage continued to progress, with 56% of SFR customers equipped with a smartphone (47% at the end of September 2012).

Broadband Internet and fixed revenues⁵ amounted to €2,953 million, a 0.2% decrease. Excluding the impact of regulated price cuts, broadband Internet and fixed revenues increased by 0.9%.

At the end of September 2013, the broadband Internet residential customer base reached 5.209 million, with 134,000 net additions since December 31, 2012 and an acceleration of fiber recruitments. The "Multi-Packs de SFR” offer reached 2.248 million subscribers at the end of September 2013, representing 43% of the broadband Internet customer base, a rate growing over time.

SFR’s EBITDA amounted to €2,201 million, a 19.5% decrease compared to the first nine months of 2012. Excluding non-recurring positive items⁶, EBITDA decreased by 18.0%. The pace of the decrease has slowed down: EBITDA for the 2013 third quarter was €731 million, down 12.6% compared to the third quarter of 2012, excluding non-recurring items.

In Mobile, SFR has been accelerating the roll-out of its very high speed network and 4G was present in 415 cities by November 1^st. SFR expects to cover at least 40% of the population (i.e., a presence in 1,200 cities) with 4G, and 70% of the population with Dual Carrier⁷, by the end of 2013.

On September 24, 2013, SFR launched its new 4G "Formules Carrées” mobile subscriptions with access to high value content (iCoyote, Napster, Canalplay, Gameloft, and SFR Presse).

In addition, SFR and Bouygues Telecom entered into exclusive negotiations in July to reach an agreement for sharing a part of their mobile networks.

In Fixed, SFR successfully launched its 1 Gbps fiber pilot in June, and as of now offers this download speed to its eligible fiber customers at no additional charge.

SFR continues to implement its adaptation plan. Since year-end 2011, operating expenditures both fixed and variable decreased by about €900 million excluding non-recurring items⁶.

Comments on Key Financial Consolidated Indicators

Revenues were €16,190 million, compared to €16,347 million for the first nine months of 2012 (-1.0%, or +1.0% at constant currency).

EBITA was €2,121 million, compared to €2,854 million for the first nine months of 2012 (-25.7%, or -23.8% at constant currency). This change mainly reflected the decline in the performances of SFR (-€610 million), Canal+ Group (-€75 million, including the increase in transition costs related to D8/D17 and "n” for -€24 million), and GVT (-€43 million, primarily due to the decline in value of the Brazilian Real; stable at constant currency), offset by the performance of Universal Music Group (+€17 million, despite the increase in restructuring charges for -€31 million and integration costs related to EMI Recorded Music for -€9 million).

Interest was an expense of €413 million, compared to €406 million for the first nine months of 2012. For the first nine months of 2013, interest expense on borrowings was stable at €429 million, compared to €428 million for the first nine months of 2012. This change was attributable to the increase in average outstanding borrowings to €17.2 billion (compared to €16.2 billion for the first nine months of 2012), notably reflecting the impact of the financing of the acquisition of EMI Recorded Music on September 28, 2012 (€1.4 billion), net of the proceeds from the sale of Parlophone Label Group on July 1, 2013 (€0.6 billion), offset by the decrease in the average interest rate on borrowings to 3.32% for the first nine months of 2013 (compared to 3.52% for the first nine months of 2012).

Income taxes reported to adjusted net income was a net charge of €353 million, compared to a net charge of €712 million for the first nine months of 2012. This change mainly reflected the impact of the decline in the group’s business segments’ taxable income (+€261 million), primarily due to SFR, as well as the favorable impact of certain non-recurring items (+€92 million), which reflected the change, during the period, in assessment of risks related to previous years’ income taxes, partially offset by the decrease in the current tax savings related to Vivendi SA’s tax group System (-€35 million). The effective tax rate reported to adjusted net income was 20.4%. Excluding the favorable impact of certain non-recurring items, the effective tax rate reported to adjusted net income was 25.8% for the first nine months of 2013 (compared to 29.0% for the first nine months of 2012).

Earnings from discontinued operations (before non-controlling interests) amounted to €1,299 million, compared to €1,063 million for the first nine months of 2012.

It included Activision Blizzard’s earnings (€692 million for the first nine months of 2013, compared to €608 million for the first nine months of 2012) and Maroc Telecom group’s earnings (€607 million for the first nine months of 2013, compared to €455 million for the first nine months of 2012). The €236 million increase in earnings from discontinued operations was notably related to the end of the amortization of tangible and intangible assets of these two businesses, in accordance with accounting standards (+€147 million for the first nine months of 2013).

Earnings attributable to non-controlling interests amounted to €716 million, compared to €597 million for the first nine months of 2012. The increase was mainly attributable to the impact of Activision Blizzard (+€34 million) and Maroc Telecom group (+€92 million).

Adjusted net income attributable to non-controlling interests amounted to €119 million, compared to €123 million for the first nine months of 2012, and primarily included Canal+ Group’s non-controlling interests.

Adjusted net income was €1,248 million (or €0.94 per share) compared to €1,600 million (or €1.24 per share) in 2012, a 22.0 % decrease.

Earnings attributable to Vivendi SA shareowners amounted to €1,411 million (or €1.06 per share), compared to €1,658 million (or €1.28 per share) for the first nine months of 2012, a €247 million decrease (-14.9%).

The reconciliation of earnings attributable to Vivendi SA shareowners to adjusted net income primarily included earnings from discontinued operations (€696 million, after non-controlling interests), partially offset by other financial charges and income (-€189 million), as well as the amortization and impairment losses on intangible assets acquired through business combinations (-€241 million, after taxes). For the first nine months of 2012, this reconciliation primarily included earnings from discontinued operations (€586 million, after non-controlling interests), partially offset by other financial charges and income (-€112 million), as well as the amortization and impairment losses on intangible assets acquired through business combinations (-€301 million, after taxes).

The financial net debt of €16.4 billion in IFRS, would amount to €7.2 billion when adjusted for the sale of the 88% stake in Activision Blizzard, the acquisition of 20% in Canal+ France, and the anticipated closing of the sale of the 53% stake in Maroc Telecom.

The quarterly financial information document, containing the financial report and the unaudited condensed financial statements for the first nine months of the 2013 fiscal year, will be available on the Vivendi website, at www.vivendi.com.

About Vivendi

Vivendi groups together leaders in content, media and telecommunications. Canal+ Group is the French leader in pay-TV, also operating in French-speaking Africa, Poland and Vietnam; its subsidiary Studiocanal is a leading European player in production, acquisition, distribution and international film sales. Universal Music Group is the world leader in music; it recently strengthened and diversified its position with the acquisition of EMI Recorded Music. GVT is a telecoms and media group in Brazil. In addition, Vivendi owns SFR, a French leader in alternative telecoms.

www.vivendi.com

Important Disclaimers

Cautionary Note Regarding Forward Looking Statements. This press release contains forward-looking statements with respect to the financial condition, results of operations, business, strategy, plans and outlook of Vivendi, including the impact of certain transactions. Although Vivendi believes that such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to the risks related to antitrust and other regulatory approvals as well as any other approvals which may be required in connection with certain transactions and the risks described in the documents Vivendi filed with the Autorité des Marchés Financiers (French securities regulator), which are also available in English on Vivendi's website (www.vivendi.com). Investors and security holders may obtain a free copy of documents filed by Vivendi with the Autorité des Marchés Financiers at www.amf-france.org, or directly from Vivendi. Accordingly, we caution you against relying on forward looking statements. These forward-looking statements are made as of the date of this press release and Vivendi disclaims any intention or obligation to provide, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Unsponsored ADRs. Vivendi does not sponsor an American Depositary Receipt (ADR) facility in respect of its shares. Any ADR facility currently in existence is "unsponsored” and has no ties whatsoever to Vivendi. Vivendi disclaims any liability in respect of any such facility.

¹ As from the second quarter of 2013, in compliance with IFRS 5, Activision Blizzard and Maroc Telecom group have been reported in Vivendi’s Consolidated Statement of Earnings as discontinued operations. In practice, income and charges from these two businesses have been reported as follows:

- Their contribution to each line of Vivendi’s Consolidated Statement of Earnings (before non-controlling interests) has been grouped under the line "Earnings from discontinued operations”.
- In accordance with IFRS 5, these adjustments have been applied to all periods presented to ensure consistency of information.
- Their share of net income has been excluded from Vivendi’s adjusted net income.

² For more information about EBITA, see Appendix IV.
³ For the reconciliation of earnings attributable to Vivendi SA shareowners to adjusted net income, see appendix IV.
⁴ Tariff cuts imposed by regulatory decision:

i) 33% decrease in mobile voice termination regulated price on July 1, 2012, and a further 20% decrease on January 1, 2013;
ii) 33% decrease in SMS termination regulated price on July 1, 2012;
iii) Roaming tariff cuts on July 1, 2012, and on July 1, 2013;
iv) 50% decrease in fixed voice termination regulated price on July 1, 2012, and a further 47% decrease on January 1, 2013.

⁵ Mobile revenues and broadband Internet and fixed revenues are determined as revenues before elimination of intersegment operations within SFR.
⁶ +€51 million in the third quarter 2012.
⁷ Up to 42 Mbps/s through a systematic dual connection to the network.

ANALYST AND INVESTOR CONFERENCE

Speaker

Philippe Capron
Member of the Management Board and Chief Financial Officer

Date

Thursday, November 14, 2013
6:00 PM Paris– 5:00 PM London– 12:00 PM New York
Media invited on a listen-only basis.

Numbers to dial

Number in France: +33 (0) 1 76 77 22 29
Number in UK: +44 (0) 203 427 19 13
Number in the United States: +1 646 254 33 63
Access Code for english version: 637 37 63
Access Code for French version (simultaneous translation): 985 09 38

Replay details (replay available for 14 days (available 14 days)

Number in France: +33 (0)1 74 20 28 00
Number in UK: +44 (0)203 427 05 98
Number in the United States: +1 347 366 95 65
Access Code for the English version: 637 37 63
Access Code for the French version (simultaneous translation): 985 09 38

Internet: The conference can be followed on the Internet at http://www.vivendi.com/ir.

The slides for the presentation will also be available online.

In millions of euros, per share amounts in euros.

Nota: As from the second quarter of 2013, in compliance with IFRS 5, Activision Blizzard and Maroc Telecom group have been reported in Vivendi’s Consolidated Statement of Earnings as discontinued operations. In practice, income and charges from these two businesses have been reported as follows:

• their contribution to each line of Vivendi’s Consolidated Statement of Earnings (before non-controlling interests) has been grouped under the line "Earnings from discontinued operations”;
• in accordance with IFRS 5, these adjustments have been applied to all periods presented to ensure consistency of information; and
• their share of net income has been excluded from Vivendi’s adjusted net income.

Moreover, data published with respect to fiscal year 2012 has been adjusted following the application of amended IAS 19.

(*) The reconciliation of EBIT to EBITA (adjusted earnings before interest and income taxes) and of earnings, attributable to Vivendi SA shareowners to adjusted net income is presented in the Appendix IV.

For any additional information, please refer to "Financial Report and Unaudited Condensed Financial Statements for the nine months ended September 30, 2013”, which will be released online later on Vivendi’s website (www.vivendi.com).

In millions of euros, per share amounts in euros.

Nota: As from the second quarter of 2013, in compliance with IFRS 5, Activision Blizzard and Maroc Telecom group have been reported in Vivendi’s Consolidated Statement of Earnings as discontinued operations. In practice, income and charges from these two businesses have been reported as follows:

• their contribution to each line of Vivendi’s Consolidated Statement of Earnings (before non-controlling interests) has been grouped under the line "Earnings from discontinued operations”; and
• in accordance with IFRS 5, these adjustments have been applied to all periods presented to ensure consistency of information.

Moreover, data published with respect to fiscal year 2012 has been adjusted following the application of amended IAS 19.

Please refer to the "Financial Report and Unaudited Condensed Financial Statements for the nine months ended September 30, 2013”.

na: not applicable.

Nota: Data presented supra takes into account the following changes in the consolidation of the following entities at the indicated dates:

• at Canal+ Group: D8 and D17 (September 27, 2012), as well as "n” (November 30, 2012); and
• at Universal Music Group: EMI Recorded Music (September 28, 2012).

(*) The reconciliation of EBIT to EBITA (adjusted earnings before interest and income taxes) is presented in the Appendix IV.

Vivendi considers EBITA (adjusted earnings before interest and income taxes) and adjusted net income, non-GAAP measures, to be relevant indicators to assess the group’s operating and financial performance. Vivendi Management uses EBITA and adjusted net income to manage the group because they better illustrate the underlying performance of continuing operations by excluding most non-recurring and non-operating items.

Nota: As from the second quarter of 2013, in compliance with IFRS 5, Activision Blizzard and Maroc Telecom group have been reported in Vivendi’s Consolidated Statement of Earnings as discontinued operations. In practice, income and charges from these two businesses have been reported as follows:

• their contribution to each line of Vivendi’s Consolidated Statement of Earnings (before non-controlling interests) has been grouped under the line "Earnings from discontinued operations”;
• in accordance with IFRS 5, these adjustments have been applied to all periods presented to ensure consistency of information; and
• their share of net income has been excluded from Vivendi’s adjusted net income.

Moreover, data published with respect to fiscal year 2012 has been adjusted following the application of amended IAS 19.

(*) As reported in the Consolidated Statement of Earnings.

As from the second quarter of 2013, in compliance with IFRS 5, Activision Blizzard and Maroc Telecom group have been reported in Vivendi’s Consolidated Statement of Earnings as discontinued operations. In practice, income and charges from these two businesses have been reported as follows:

• their contribution to each line of Vivendi’s Consolidated Statement of Earnings (before non-controlling interests) has been grouped under the line "Earnings from discontinued operations”;
• in accordance with IFRS 5, these adjustments have been applied to all periods presented to ensure consistency of information; and
• their share of net income has been excluded from Vivendi’s adjusted net income.

Moreover, data published with respect to fiscal year 2012 has been adjusted following the application of amended IAS 19.

As a result, the Consolidated Statement of Earnings and the Adjusted Statement of Earnings with respect to the fiscal year 2012 have been adjusted as presented below: