CPG revs hit $6.7 billion

MADRID

French media conglom Vivendi unveiled its 2012 earnings on Tuesday, revealing that the Canal Plus Group, one of Europe’s biggest buyers of Hollywood content, is holding up despite recession in France, while Universal Music Group and gaming arm Activision contributed gains.

CPG’s 2012 revenues hit €5 billion ($6.7 billion), up 3.2% on 2011, on operational earnings down 5% to $876.5 million.

But, in an indication of how business is playing out for many European companies, the giant paybox’s major upside came from abroad: from Africa, Vietnam and Poland and from international biz at film and TV studio Studiocanal.

Sales at Studiocanal were close to $661 million, 20% up on 2011, with an improvement in EBITA that allowed it to maintain “very healthy double-digit profitability,” said Studiocanal chairman-CEO Olivier Courson.

Biz outside France accounted for more than 66% of Studiocanal’s revs.

Though Universal Music Group formally acquired the recorded music assets of EMI in fall of 2012, EMI’s earnings were not included in Vivendi’s tallies. UMG’s yearly EBITA stood at $686.7 million, up 3.6% on 2011, with Vivendi projecting greater growth for the coming quarters as EMI’s assets are incorporated into the fold.

Videogame giant Activision logged impressive numbers on the strength of its year-leading “Call of Duty: Black Ops II” game, with its $1.5 billion EBITA, up 13.6% on the previous year.

As for CPG, drivers included a strong performance at German TV series producer Tandem, led by its “World Without End.”

Studiocanal’s wide-ranging digital revenues worldwide doubled to rep about 10% of revs.

Studiocanal also saw robust home entertainment returns in Germany, fired by the DVD issue of “Hunger Games,”

“Our increase in digital revenues far compensated the decline in physical video sales,” Courson said.

Canal Plus Overseas subs reached 1.7 million by year-end 2012, 227,000 up on 2011. North and Western Africa drove the uptick, with Canal Plus being offered to about 20 countries at a cut-price rate. Average return per subscriber in Africa is about half the $63 earned in France, said a CPG spokesperson.

Revenues for Canal Plus France in Gaul were slightly up last year. Subscriptions edged down about 80,000 to 9.7 million.

France’s biggest feevee operator has budgeted a potential one-off write-down of $879.1 million against a pending sales tax rise from 7% to 10%, in 2014.

This could cost Canal Plus $105.8 million extra a year, Vivendi CEO Jean-Francois Dubos and CFO Philippe Capron told analysts Tuesday.

The 2011 sales tax rise from 5.5% to 7% is currently costing Canal Plus about $53 million a year.

“In relative terms, it is tough in France. The economy is not doing so well, and there is more competition for sports rights,” said Francois Godard, at Enders Analysis.

Canal Plus has output deals with Universal, Fox, Warner Bros., Paramount and Disney and there is no indication that its appetite for Hollywood fare is waning. In October it inked an exclusive output deal with Warner Bros. for its pay TV channels and multiple platforms.

Going forward, another growth driver could be soccer star David Beckham. His debut game Sunday for Paris Saint Germain soccer club averaged 41.6% of subs, peaking at 3.2 million eyeballs, the best ratings of all time for a Ligue 1 game on Canal Plus.

(Andrew Barker contributed to this report).

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