Vivendi Universal chief Jean-Marie Messier congratulated U for a stellar box office last year and rhapsodized about the Internet as he unveiled the conglom’s first financial results Friday at a Paris press conference.
Messier, in shirtsleeves, whizzed through a series of slides at headquarters a stone’s throw from the Arc de Triomphe.
He insisted the numbers, the first earnings figures reported following the December merger of Vivendi and Seagram, surpassed even management’s ambitious expectations.
But investors were unmoved –Vivendi shares ended NYSE trading at $65.85, nearly unchanged from the day before.
Profits, which include 23 days’ worth of Seagram numbers, jumped 60% in 2000 to $2.14 billion — although that figure appeared to be inflated by nearly $1.9 billion in one-time gains. Revenue rose 37% to $39 billion and operating income was up 40% to $2.4 billion.
On a pro forma basis, calculated as if the two companies had been merged from the start of 1999, revenue rose 19% to $49 billion, cash flow grew 48% to $6.7 billion and operating income surged 68% to $2.8 billion.
Vivendi broke its media and communications business into five units — music, publishing, TV and film, telecom and Internet — which together brought in $22.6 billion of pro forma revenue.
Anyone hoping for details about Canal Plus’ profits — after a newspaper reported the group will sink deeper into the red this year — was disappointed, however.
Messier called the story in Le Figaro “erroneous” but said Vivendi wouldn’t provide stand-alone figures for Canal anymore, only for the larger TV and film division. Big mergers generally result in less information and fewer details, and Vivendi Universal is no exception.
Total TV and film revenue rose a pro forma 20% to $8.2 billion. Cash flow grew to $718 million from $304 million. Operating losses narrowed to $84 million.
On an actual basis, TV and film operating losses widened to $103 million, due mostly to Canal Plus.
Vivendi reported its figures in euros only, despite Messier’s efforts to reach out to U.S. investors. Sony, for instance, puts out its earnings in both dollars and yen.
Yet Messier reaffirmed his commitment to becoming truly trans-Atlantic.
“We all believe that globalization is about the mixing of cultures,” he said, promising the company will be a “champion of cultural diversity.” Several high level Seagram/Universal execs have relocated to Paris to take top jobs at the conglom, and StudioCanal’s Vincent Grimond has moved to L.A. to help oversee Universal.
Messier was upbeat about U, where domestic box office revenue surpassed $1 billion for the first time last year. U also became the first studio with five consecutive films in first place at the box office. StudioCanal, the giant European producer of films and TV programming, had success Stateside with “Billy Elliot.”
At giant Universal Music, operating income rose 41% to $675 million. Cash flow was up 24% and revenue grew 16% on strong sales in North America and Europe and continued cost savings from the integration of Polygram.
U in tune
With 22.5% of the global market share last year, U Music continues to hold the No. 1 position in North American, Europe and Latin America and is a close second in Asia.
Messier swept aside skepticism about Vizzavi, Vivendi Universal’s much-hyped multi-access portal joint venture with Vodafone, which has so far failed to make much of an impact. It remains a showcase of Vivendi’s mission “to provide the global consumer with connectivity and competitively superior content and services –anywhere, any time and over any device or platform,” he said.
Losses at Vivendi’s Internet unit widened sharply in 2000 to $180 million.
“We believe in the Internet. When the market is high, we believe in the Internet, when the market is low, we believe in the Internet,” he said. He declined to comment on Vivendi’s interest in buying Yahoo!, the beleaguered U.S. portal that’s fallen on hard times.
Despite the company’s multimedia metamorphosis, Vivendi’s environmental services biz is still its biggest revenue generator, with sales of $24.6 billion. The operations were spun into a separate public company last year, but Vivendi U still owns a majority stake in the new group.