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Vivendi Universal Flexes Strong First-Half Results

25 Sep, 2001 By: Hive News

Incorporating financial information not available at the time Vivendi Universal issued its second-quarter results on July 23, 2001, Vivendi Universal announced Tuesday that for the first half of 2001 ended June 30, EBITDA grew 42% to nearly 4 billion euros, operating income increased 65% to 1.9 billion euros, and revenues increased 11% to 26.4 billion euros versus pro forma1 results for the first half of the prior year.

Compared to actual first half 2000 results, EBITDA grew 54%, operating income increased 64%, and revenues increased 36% in first half 2001.

According to a company press release, the strong results across all of the company's businesses were driven by a focus on day-to-day management and strong performance in every operation.

A key highlight of first half 2001 was the strong performance of media and communications, despite the economic slowdown. During the first half of 2001, Vivendi Universal achieved three-quarters of its full year target of incremental EBITDA. First half revenues reached 12.4 billion euros, up 15% (11% excluding Maroc Telecom), and first half EBITDA reached 2.2 billion euros, up 77% (62% excluding Maroc Telecom.) Operating income increased 184%, nearly tripling, to 946 million euros(up 145% excluding Maroc Telecom.). The media and communications sector also delivered very strong operating margins: EBITDA margin increased from 11% to 18%, and operating income margin jumped from 3% to 8%.

Said Jean-Marie Messier, chairman and c.e.o. of Vivendi Universal, in a prepared statement: "Looking ahead to the second half of 2001, we will continue to focus on executing the strategies of the merger;driving revenue synergies; implementing necessary reorganizations and restructurings; and increasing our distribution reach through partnerships and alliances.

"We have the opportunity to drive revenue synergies through the integration of Houghton Mifflin, for example, and the recently launched Universal Mobile Music. We will focus on the reorganization and restructuring of Canal+. And we will focus our resources toward online musicinitiatives -- including pressplay -- with the goal of making our music more accessible through additional distribution agreements.

Continued Messier, "Despite the current environment, we will reach all our previously stated revenue/EBITDA objectives for the 2001 year. I continue to express my confidence in achieving our more than 10% revenue growth targets for 2001 and our more than 35% EBITDA growth (versus the company's October 2000 guidance) at a constant asset base. This, combined with some extensions in the company's asset base (i.e., Maroc Telecom and Houghton Mifflin), should result in full-year media and communications EBITDA slightly north of 5 billion euros.

"In the current environment, giving a 2002 target would not be meaningful, and we have yet to complete our 2002budget and plan process. Before the recent tragedy, market consensus for 2002 EBITDA was not far from 6billion euros. Despite the events, looking at the trends of our businesses and our defensive qualities, we arecurrently very comfortable with this expectation," Messier said.

Second half highlights include the launch of pressplay, the new on-demand music online subscription service, and, in the games business, a new version of Crash Bandicoot will be released by year-end. The company also has a strong video release schedule planned for the fourth quarter, including Dr. Seuss' How The Grinch Stole Christmas, Jurassic Park III and The Mummy Returns.

For 2002, the introduction of anti-piracy CD software and the development of pressplay will begin to cultivate the path of future revenue streams in the music category. In publishing, games should exhibit strong growth coming from new releases.

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