Vivendi Reports Solid Q2; Nothing New On Breakup

Rating: Baa2

• Equity notably weaker yesterday on the sell-off on Universal Music in which Vivendi still hold a ~10% stake. Results look broadly strong at group level and across the relevant segments. Leverage slightly higher. Quick glance at the transcript didn’t reveal any significant new info on the break-up.
  
  
• Q2 group revenue +6.1% YoY organically (+5.2% vs. the higher of two BBG estimates) with Canal+ +3.7%, Lagardère +11.1%, Havas -2.3%. Lagardère revenue was +9.6% vs. the single BBG estimate where the other two were broadly in line.
• H1 EBITA was +13.5% cFX with the increase mainly due to Lagardère (+10.1% L4L) as well as Havas (+6%) but weighed upon by Canal+ (-1.9% cFX).
• H1 CFO of EUR 160mn down from EUR 228mn in H123, mostly due to EUR 47mn higher outflow at Havas - on the call this was attributed to M&A at the unit.
• Group EBITDA leverage looks to have risen from 2.2x at FY23 to 2.4x. Net debt increased to EUR 3.9bn from EUR 2.8bn at FY23 increase mostly came to the Vivendi portion on EUR 0.8bn investments by Canal+ and buybacks of EUR 155mn, offset by the EUR 284mn ticketing sale.