VIVENDI TO MOVE
FORWARD ON UMG IPO

In the wake of Vivendi's Supervisory Board approving a proposal to explore preliminary legal operations required for a sale of Universal Music Group assets, UMG (Vivendi's "jewel," per French boss Vincent Bolloré) posted 4.5% growth in revenue for Q1.

UMG brought in $1.5b at constant currency for the quarter. Recorded music revenues were up 5.9% at constant currency thanks growth in subscription and streaming revenues (+31.5%) that offset the decline in sales of physical (-26.2%) and downloads (-25.6%).

Streaming and subscriptions now represent 57% of UMG’s total revenue.

Music publishing revenues grew by 3.9% at constant currency and perimeter, also driven by increased subscription and streaming revenues, as well as better performance revenues.

The company has also had an especially strong April, which led UMG to announce that YTD revenue through the first four months is 7.2%, acceleration to growth of about 15% last month April.

After delivering prepared remarks in a conference call, investors grilled Vivendi CEO Arnaud de Puyfontaine on the potential for an UMG IPO and its position on Spotify; it’s the only major to not have sold any if its stake in the Daniel Ek-led company.

Noting that UMG and Spotify “have a common interest in a new era of the music business,” he said, “as a strategic partner, it is very important to walk the talk. We have no intention at this stage other than to remain a Spotify shareholder.”

De Puyfontaine said Vivendi is “agnostic” regarding a divestiture plan for UMG. “We will have a very open mind as regards the different available options,” he said. "There is no crystal ball."

For those of you who were unable to listen to the conference call, we can confirm that hearing "Post Malone" uttered in a thick French accent is magnifique.

A report will be made on determining whether to launch an IPO, bring in a new partner or sell off portions of the company and given to the advisory board. There is no timetable.

Vivendi stock is currently trading at €23.20, down about half a percent.