French conglom Vivendi said the coronavirus had only a “limited impact” on revenue last quarter as its generally upbeat earning kicked off reporting season in Europe and came ahead of a blitz of numbers from the U.S. entertainment sector starting tomorrow with Netflix.
A downturn last month was pretty much contained to its advertising division Havas and publishing unit Editis. Those businesses “experienced variable performance in March … due to the crisis,” Vivendi said, announcing total revenue up nearly 12% to €3.9 billion ($4.23 biillion at today’s exchange rate).
“Each of Vivendi’s businesses is closely monitoring the current and potential effects of this outbreak. At this
point, it is impossible to determine with certainty how long it will last and how it will impact Vivendi’s
revenues and annual results,” the company said.
But Universal Music Group, the biggest contributor, boosted revenue nearly 13% on a constant-currency basis as recorded music and music publishing sales grew, respectively, by 13% and nearly 18%, thanks to a 16.5% growth in subscription and streaming revenues. Only merchandising (and other) revenues was down, about 5%, on lower touring activity.
At its Canal+, France’s leading pay-TV group, revenue rose 9.6% year-over-year as subscribers hit 20.1 million from 16.7 million the year before – including M7, the Luxembourg-based group it acquired last year that operates a series of independent pay-TV platforms across the Benelux and Central Europe.
Havas’ revenue was flat. Organic growth declined 3.3% reflecting the initial impact of the current global crisis. “This impact varies significantly depending on the regions, the businesses and the sectors in which its clients operate. At this stage of the crisis, it is still difficult to identify any clear trends. While performances remained globally aligned with budget through the end of February, those of March were in decline,” Vivendi said. North American business was still holding up well while results were down sharply in most European countries except the U.K. Asia-Pacific and Latin America were also down. India was a major contributor.
“The second quarter will undoubtedly be affected by the current health crisis. Even so, it is essential for brands to continue communicating over this period. Havas Group is mobilizing all its resources to monitor the rapid shift in consumer behavior, to better anticipate its clients’ communication needs” and working to cut costs, Vivendi said.
Publisher Editis’ revenues fell 14% – with the entire revenue decline can be attributed to March when the pandemic lockdown started, closing most points of sale.
Vivendi, as all media companies, is looking to reassure investors it has available funds to ride out the crisis. It noted a gross cash position of €4.8 billion euros ($5.2 billion) including proceeds of the sale last month of 10% of Universal Music to Tencent. The Chinese company has the right to acquire another 10% next March. Vivendi also has €3.9 billion ($4.2 billion) in confirmed credit facilities.