Vivendi Earnings: Solid Revenue Growth as Lagardere and TIM Remain on the Horizon

Vivendi VIV continues to generate modest revenue growth as it moves ahead with major strategic transactions. We’re maintaining our EUR 12 fair value estimate. Third-quarter revenue increased 2.5% year over year to EUR 2.4 billion. Excluding currency movements and acquisitions, revenue would have increased 3.1%, in line with the first half of the year. Vivendi reports only revenue results for the first and third quarters.

Canal+ revenue grew nearly 6%, its best result in over a year, thanks to another solid performance at StudioCanal. Strong demand for Alibi.com 2 and All Your Faces in France and several films, including John Wick 4, internationally drove studio revenue higher. The French pay television also posted solid results, with revenue up nearly 7% on continued customer growth and lapping the loss of sublicensing revenue related to the English Premier League.

Havas delivered 4.5% organic net revenue growth during the quarter, placing it in line with rivals that have reported earnings thus far. Publicis has consistently outperformed the industry recently, delivering 5.3% organic growth this quarter, while Omnicom has lagged modestly at 3.3%. Revenue grew at a low-single-digit rate in all regions except Latin America, where net revenue increased by more than 50% off a small base.

Vivendi received several questions regarding its capital allocation plans. Over the near term, the firm appears focused on closing the Lagardere deal and ensuring its voice is heard as Telecom Italia, in which Vivendi holds 23% voting control, negotiates a network sale to private investors. The firm will make a decision regarding share repurchases once these major events are resolved.