Cegetel performance buoys Vivendi results

10 Feb 2003

Vivendi Universal [NYSE:V] has reported sales of EUR8.05 billion for the fourth quarter of 2002, a 1% decline from the year earlier period excluding income from asset disposals. The media conglomerate’s main subsidiaries, Universal Music Group and Universal Entertainment, returned sales of EUR2.08 billion and EUR1.85 billion respectively for the three-month period, representing declines of 2% and 7% on the corresponding period of 2001. These shortfalls were offset by a 7% rise in fourth quarter revenues to EUR1.8 billion at Vivendi’s French telecoms subsidiary Cegetel. Late last month Vivendi upped its stake in Cegetel from 44% to 70% after fighting off interest from the world’s largest mobile operator Vodafone. The prize asset in Cegetel’s portfolio is France’s second largest cellco SFR, which had 13.5 million subscribers at the end of 2002, a market share of around 35%. SFR reported average monthly revenue per pre-paid user of EUR22.2 in 2002, a rise of 13% over 2001, with the figure for post-paid subscribers rising slightly to EUR58.3.

Vivendi claims that its returns in 2002 were considerably affected by a 20% devaluation of the dollar against the euro during the year, and that sales actually rose 3% year-on-year when excluding currency fluctuations. Vivendi came close to total collapse last year after a prolonged acquisition spree by former CEO Jean-Marie Messier. In July 2002 Messier was replaced by Jean-Rene Fourtou who has since been selling off big parts of the business to cut debts; so far Fourtou has raised more than EUR8 billion through asset sales in a bid to appease disgruntled shareholders and lower the group’s crippling debt pile. Vivendi’s shares have lost around 70% of their value since the start of 2002 and rumours are beginning to circulate that the company is considering selling or floating its US entertainment business later in 2003.

France