- Time to `build growth again,' CEO Arnaud de Puyfontaine says
- Vivendi has $10 billion cash pile after selling telecom assets
Vivendi SA, the French media company with a $10-billion cash pile for acquisitions, said it will invest heavily to expand its businesses after earnings declined in the third quarter at both its music and television units. The shares fell as much as 11 percent in Paris.
Third-quarter net income declined about 9 percent to 172 million euros ($184 million) excluding some items, on revenue of 2.52 billion euros, the company said Tuesday. Analysts had predicted adjusted net income of 186 million euros, the average of seven estimates, and sales of 2.57 billion euros.
The stock declined 9.8 percent at 9:03 a.m. Wednesday in the French capital, giving Vivendi a market value of 26.7 billion euros.
“Its time for us to be able to build growth again,” Chief Executive Officer Arnaud de Puyfontaine said on a conference call. Vivendi said that the next two years will potentially be a period of “heavy investments,” to create an international media and content group and that it will focus on keeping costs down during the period. It’s too early to forecast a specific spending plan, Puyfontaine said.
The company is sitting on cash accumulated from selling telecommunications assets and a stake in game maker Activision Blizzard Inc. Run by Chairman Vincent Bollore, a billionaire with an activist investor past, Vivendi recently bought shares in Telecom Italia SpA and French game studios Ubisoft Entertainment SA and Gameloft SE, revisiting investments in industries it recently exited.
Vivendi described the markets of Universal Music Group and Canal Plus as “competitive” and “volatile” and vowed to push forward with the restructuring it has begun at the French pay-TV service. Vivendi confirmed its full-year targets.
The music market has been coping with changing its business model as consumers turn to streaming on platforms like Apple Music and Spotify. French pay-TV faces increased competition as new rivals like Netflix Inc. launch innovative offers.