Vivendi: Very Good First Quarter; 2008 Outlook Confirmed

Business Wire, May 14, 2008

PARIS -- Regulatory News:

Note: This press release contains unaudited consolidated earnings established under IFRS.

First quarter of 2008

* Revenues: EU5.3 billion, an increase of 5.2% and of 6.9% at constant currency when compared to the first quarter of 2007.

* Very good operating achievements were offset by non recurring or calendar impacts: the first quarter of 2007 included notably the successful launch of the first expansion set World of Warcraft: The Burning Crusade (the second expansion set is anticipated to be released in the second half of 2008) and the favorable settlement of a tax litigation.

* Adjusted earnings before interest and income taxes (EBITA): EU1.2 billion, slightly down (-5.6% and -3.9% at constant currency) when compared to the first quarter of 2007.

* Adjusted net income: EU697 million, down 9.6% when compared to the first quarter of 2007.

* 2008 Outlook confirmed: Vivendi expects to deliver a profit growth similar to 2007, at constant perimeter.

Operating highlights of the first quarter of 2008

* Strong improvement in UMG results: integration of BMG Music Publishing and Sanctuary, and continued increase in digital revenues.

* Canal Group's strong performance: driven by subscriptions, lower subscriber acquisition and programming costs.

* SFR's mobile activity return to growth: increase in subscriber base, mobile internet popularity. Pending acquisition of Neuf Cegetel to create the alternative telecommunications operator leader in France.

* Maroc Telecom's development: continued increase in mobile subscriber base while controlling acquisition costs.

* Vivendi Games maintains strong momentum: adding 2 million incremental World of Warcraft subscribers compared to March 2007, including more than 700,000 new players added in the first quarter of 2008. Pending acquisition of Activision to create Activision Blizzard, global leader of video games independent publishers.

Universal Music Group

* Universal Music Group's (UMG's) revenues of EU1,033 million grew 0.6% compared to the same period last year. At constant currency, revenues grew 6.8% reflecting growth in music publishing and merchandising following the acquisition in 2007 of BMG Music Publishing and Sanctuary and a 33.0% increase in digital sales.

Best sellers in the period were releases from Jack Johnson, Janet Jackson and new Welsh artist Duffy. Amy Winehouse's 2006 album Back to Black sold over this quarter an additional 2.2 million copies, taking total sales over the 8 million mark.

* UMG's EBITA of EU111 million was 94.7% above the same period last year (an increase of 111.1% at constant currency). This increase reflects the higher recorded music margins due to the sales mix shifting to owned (rather than distributed) product; the increase in digital sales, the inclusion of BMG Music Publishing and Sanctuary in the results, as well as credits from the downward valuation of compensation schemes linked to equity value. However, EBITA was impacted by restructuring costs of EU12 million.

Canal Group

* Canal Group's revenues were EU1,115 million, up 4.5%.

Revenues from pay-TV operations in France increased to EU971 million ( 5%), mainly driven by Canal and CanalSat portfolio growth, up 180,000 subscriptions compared to the same period last year, and higher advertising revenues. Subscription growth included a negative adjustment of 64,000 subscriptions resulting from a portfolio change of scope to include viable contracts only.

As of March 31, 2008, nearly half of TPS subscribers had already been transferred to the CanalSat platform.

Revenues from CanalOverseas grew 13% compared to last year and also contributed to the good performance of pay-TV operations in France.

Revenues from Canal Group's other operations amounted to EU144 million, in line with last year's results. While StudioCanal posted lower revenues mainly due to calendar effects, revenues from iTele and Canal in Poland grew sharply.

* Canal Group reported EBITA, excluding transition costs linked to the TPS merger, of EU197 million, versus EU169 million for the first quarter of 2007, up 16.6%. Including transition costs, EBITA was EU170 million, versus EU164 million for the same period in 2007.

These transition costs mainly resulted from technical migration of TPS subscribers to CanalSat.

EBITA growth was mainly driven by strong performance of pay-TV operations in France. In addition to higher revenues thanks to portfolio growth, EBITA benefited from lower subscriber acquisition and programming costs. Results were, however, negatively impacted (-EU32 million) by an unfavorable but temporary Ligue 1 broadcasting schedule (two extra match days compared to the first quarter of 2007).

EBITA from other operations were slightly down due to lower royalties paid to StudioCanal under the Working Title deal and despite higher revenues from i>Tele and Canal in Poland.

SFR

* SFR's revenues increased by 9.8% to EU2,302 million compared to the same period in 2007 ( 4% on a comparable basis1).

Mobile revenues increased by 4.1% to EU2,176 million compared to the same period in 2007. Mobile service revenues2 increased by 2.8% to EU2,077 million.

The favorable effects of an increase in the customer base along with growth in "voice" and "data" usage and the Enterprise segment dynamism were offset by cuts on mobile voice termination rates (13%) as of January 1, 2008. Excluding the impacts of regulated tariff cuts, SFR mobile service revenues would have increased by 4.8%.