Vivendi released its revenues for the third quarter of 2019. The revenues as of 30th September 2019, amounted to €3,970 million. This was an increase of 16.7% as compared to the same period in 2018, with organic growth of 7.2%.
The report suggested that this resulted from the growth of Universal Music Group (UMG) as well as the consolidation of Editis since February 1, 2019. The revenues that increased by 7.2% as compared to the third quarter of 2018, was primarily driven by the growth of UMG (+15.7%).
Vivendi’s revenues amounted to €11,323 million (past nine months), which was an increase of 14.6%, compared to the same period in 2018. This also resulted notably from the growth of UMG as well as the consolidation of Eiditis since 1st February 2019.
At constant currency and perimeter, revenues increased by 6.9% compared to the first nine months of 2018, primarily driven by the growth of UMG (+17.5%).
Universal Music Group Revenues
For the past nine months, Universal Music Group’s (UMG) revenues amounted to €5,058 million, up 17.5% at constant currency and perimeter compared to the same duration of 2018 (+22.7% on an actual basis).
For the same duration of 2019, a 15.6% increase was noticed in the recorded music revenues at constant currency and perimeter. The growth in subscription and streaming and physical sales showed a mixed bag. While the subscription and streaming revenues (+23.4%) and strong physical sales (+14.9%), which more than offset the continued decline in download sales (-20.4%).
There were some chart-topping albums during the past nine months such as new releases from Billie Eilish, Ariana Grande, Taylor Swift, Post Malone and the Japanese band King & Prince, as well as continued sales of the soundtrack from A Star Is Born and multiple albums from Queen.
UMG has had the five biggest United States debut sales weeks for albums this year with Taylor Swift, Post Malone, Jonas Brothers’ Happiness Begins, Ariana Grande’s Thank U, Next and Billie Eilish’s When We All Fall Asleep Where Do We Go?
Therefore, the music publishing revenues also grew by 9.7% at constant currency and perimeter compared to the first nine months of 2018. This was also driven by increased subscription and streaming revenues. Merchandising along with other revenues increased by 82.4% at constant currency and perimeter compared to the first nine months of 2018. This was due to an increase in touring activities and growth in retail portals and D2C (direct-to-consumer) revenues.
UMG Share Capital
On August 6, 2019, Vivendi announced that it has entered into preliminary negotiations with Tencent Holdings Limited (Tencent) for a strategic investment totalling 10% of the share capital of UMG at an equity valuation of €30 billion for 100% of UMG on a fully-diluted basis.
Between August 7, 2019, and October 16, 2019, Vivendi repurchased approximately 17.4 million of its own shares (1.3% of the share capital).
As of October 16, 2019, Vivendi directly held 25.3 million of its own shares, representing 1.9% of the share capital, including 18.2 million to be cancelled and 7.1 million to cover performance share plans.
Also, Vivendi’s shares were up 2.7% in early trading, investors in addition to China’s Tencent Holdings (0700.HK) have shown interest in buying a minority stake in Universal. That said, the company is furthering a negotiating with Tencent for a sale of up to 20% of Universal which is equivalent to USD 33.4 billion.
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