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Canal+ sees signs of turnaround as Vivendi unveils plan for Universal Music

Vivendi-owned pay TV operator Canal+ has reported a modest turnaround in the first half of this year, with a reduction in its rate of cancellations in France and growth internationally delivering increased revenues.

The operator posted revenues of €2.575 billion for the six months to June, up 1.3% at constant currency.

Canal+ had 16 million customers at the end of June, up from 14.6 million at the end of June last year. In mainland France, the company reported a 19% decrease in cancellations compared with the first half of 2017. The overall individual subscribers base, including wholesale customers and the now discontinued SVOD service CanalPlay, declined by 62,000. However, excluding CanalPlay, the decline was only 4,000. The premium Canal+ channel recorded a year-on-year increase in subscribers of 271,000.

The improved figures came in ahead of the loss of Ligue 1 rights to Spain’s Mediapro, which could have a severe impact on the pay TV outfit’s numbers in years to come without a deal to give subscribers access to France’s top-tier football league.

Internationally, Canal+ saw revenues grow by 7.2% driven by an increase of 1.5 million subscribers year-on-year, including 1.1 million new customers in Africa, boosted by its coverage of the FIFA World Cup from Russia.

Production arm StudioCanal’s revenues grew by 17.9% in constant currency terms, driven in part by strong sales of Paddington 2.

Canal+ Group’s income from operations was €241 million, up 28.4% at constant currency, while EBITA before restructuring charges was up 28.5% to €249 million.

Separately, Vivendi said it had ruled out an IPO for its best-performing unit, Universal Music, and was instead planning the sale of a 50% stake to one or more strategic partners to deliver value.

The company said the transaction would likely be launched in the autumn and could be completed within 18 months.

Vivendi has also entered into exclusive negotiations with Grupo Planeta to acquire French publishing group Editis for €900 million. The company said it would explore new opportunities in publishing with Planeta.

Vivendi overall posted revenues of €6.463 billion for the first half, up 4% at constant currency, with EBITA of €542 million, up 31.6%.