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"Our 2001 results give us confidence that we can achieve our growth targets again in 2002."
——Jean-Marie Messier
VU'S REVENUES RISE
Movies Fuel Results; Music Essentially Flat
Vivendi Universal, the French media group, on Monday reported a rise of 9% in revenues from its media business, as blockbuster films offset stagnant growth at its music division.

The company, which maintained its revenue growth forecast of more than 10% for 2002, responded to critics with stronger than expected 2001 revenues on Monday, sending its shares up 3% after a weeks-long battle to prop up confidence.

Shares in Vivendi Universal closed at $42.91, up 3.65%, though the stock price is still down nearly 40% over the past 12 months.

The company said music revenue was essentially flat in 2001, representing strong performance in a down market. Strength in Europe (up 3%) and music publishing (up 11%) was offset by market declines in Latin America (down over 20%).

Meanwhile, revenue in North America was essentially flat. UMG increased its worldwide marketshare in 2001, representing more than one out of every five albums sold worldwide, one out of every four albums sold in the U.S., and one out of every three albums sold in France. Top-selling albums in 2001 were by Shaggy, the O Brother soundtrack, Enrique Iglesias, Blink-182 and Limp Bizkit.

Jean-Marie Messier, VU's Chief Executive, said last year's performance represented "the highest level of growth in our industry. Our 2001 results give us confidence that we can achieve our growth targets again in 2002."

The world's second-largest media group posted total sales of 57.4 billion euros ($50.39 billion) for the first full year following its merger with Seagram and Canal Plus—about a billion euros higher than forecast.

But the complexity of Vivendi's post-merger figures and the timing of the release, for which investors were unprepared, only underscored market nerves about the difficulties of keeping tabs on Vivendi's rapid overhaul, analysts told Reuters.

Vivendi's sales contrast with actual 2000 revenues of 41.58 billion euros, but on a pro forma basis sales came in at 58.19 billion euros compared with 53.051 billion, the group said.

Pro forma media and communications revenues grew 9% to 28.9 billion euros, Vivendi said, adding that once its purchase of Universal Film was stripped out the growth was 10%, matching management estimates given 12 months ago.

"The numbers outperformed our estimates by 2%, which is obviously positive," JP Morgan media analyst Mark Harrington told the news wire service. "Vivendi is one of the few companies in the global media sector which has not issued a revenue or EBITDA warning, so it demonstrates the structural growth of the company relative to its global media peers."

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