Good evening ladies and gentlemen and thank you for joining Vivendi's Full Year 2018 Results Conference Call. This call is webcast on vivendi.com. Today's call is hosted by Mr. Arnaud de Puyfontaine, Chairman of the Management Board and Chief Executive Officer; and Mr. Hervé Philippe, a member of the Management Board and the Chief Financial Officer. As a reminder, this call is being recorded. I would now like to turn the call over to Mr. Arnaud de Puyfontaine. Please go ahead sir. Your line is open.

Thank you very much and welcome. Thank you for joining us today for Vivendi's 2018 earnings presentation. As always it's a pleasure to start the year by sharing with you the group's achievements in 2018 and perspectives for 2019. Firstly, I am happy to say that Vivendi delivered a strong performance in 2018 with a revenue growth of 11.3% and an EBITA increase of 33%. These results reflect the strong operating performances of our main businesses Universal Music Group, Canal+ Group, and Havas which have been fully consolidated in 2018. For Universal Music Group, 2018 was a historic year to quote solution range. For the second year in a row, UMG's revenues increased by 10%. Universal Music Group is pursuing its dynamic growth, largely driven by the streaming boom. In the last few years, streaming has been transformed from a niche market to mass market. The number of paid music streaming subscribers worldwide jumped from 41 million in 2014 to 176 million in 2018 and this is just the start. To take advantage of this opportunity, UMG is continuously investing in artists and repertoire. It possesses a unique know-how in discovering and managing artists. On Spotify, for 2018, every one of the top five tracks, the top four artists and the top three albums were all Universal Music Group. Let me also take the opportunity to congratulate all the Universal Music Group artists and team recently rewarded at the Grammys and the French Victoires de la Musique Lady Gaga, Ariana Grande, and Angel to name a few. Now move on to Canal+ Group which continues its recovery. Its global subscriber portfolio stood at 16.2 million at the end of 2018 versus 15.6 million at the end of December 2017. In France the StudioCanal movies performed well in 2018 with more than 10 million theater tickets sold last year including 4.3 million tickets for Sink or Swim so-called Le Grand Bain. The coming months are promising as Canal+ has won the English Premier League in France and Poland for the next three seasons. Last but not least, Havas pursued its commercial momentum in 2018 while adapting its organization to the new communication and advertising environment. It performed particularly well in the fourth quarter. At the same time, Havas acquired six new agencies in 2018 and reaching its expertise and extending its global footprint. 18 months after joining forces the integration of Havas into Vivendi has proven very successful. It has resulted in many joint projects with the group's other businesses. Let me give you an example. In 2018 the Top 14 rugby final in France was broadcast on Canal. The show just after the game was performed by a Universal artist Mika, and the event was powered by Havas. Coming back to Vivendi results. You have probably noticed that earnings attributable to Vivendi SA shareholders amounted to a profit of €127 million. There are two reasons for this; one, we included the write-down of our investment in Telecom Italia for nearly €1.1 billion; point two, we did not include the capital gain of €1.2 billion on the sale of our interest in Ubisoft and this is due to new accounting standards. The last 12 months have enabled Vivendi to increase its financial resources and to strengthen its balance sheet position. At the end of 2017, our net debt amounted to €2.3 billion. On -- one year later at the end of 2018, the group is net cash positive with €176 million. This net cash position results from the strong cash flow generated by our three main businesses €1.1 billion in total and the proceeds received from the sale of our interest in Ubisoft, Fnac Darty and Telefonica. These operations represent an amount of €2.3 billion in total. The past few months I’ve also confirmed that the process from opening UMG's share capital is right on track. Since we announced it last July, we've been working on creating the conditions for an efficient sales process. That is to say, completion for the corporate structure reorganization, launch of a vendor due diligence, and upcoming selection of the banks to assist us in finding the best partner or partners for Universal Music Group. Our objective remains to offer up to 50% of UMG's share capital to one of several strategic partners in order to extract the most important value. Universal Music Group's 2018 annual results will serve as a basis for the discussions with potential partners. In addition, I'm glad to announce the closing of the acquisition of Editis, the second largest French publishing group. This acquisition is fully aligned with our strategic vision. The Vivendi entities and Editis are driven by the same commitment to talented people and creativity. With publishing we are adding a new break in the construction of a major world-class European group centered on content, media and communications. 2019 will be an exciting year for Editis. In literatures, many bestsellers such as Marc Lévy, Michel Bussi or Raphaëlle Giordano will have new books coming out. In education, the French school reform scheduled in 2019 and 2020 will significantly boost the sales of textbooks. Let me now conclude by saying a few words on our shareholders' meeting, which will take place in two months on April the 15th. Our shareholders will be asked to vote on two resolution related to share repurchases. The first one focuses on the renewal of the authorization to repurchase Vivendi shares within the limit of 10% of the share capital. The second one concerns, the authorization to purchase shares by way of a public share buyback offer within the limit of 25% of Vivendi shares capital at the maximum purchase price of €25 per share. Both resolutions demonstrate that we are committed to creating more value to our shareholders, while respecting financial disciplines. Furthermore, shareholders will be asked to approve a resolution regarding the conversion of Vivendi into a European company. This conversion will enable Vivendi to align its legal form with its European footprint and strategic plan. Shareholders will also be asked to appoint Cyrille Bolloré to the Supervisory Board to replace Vincent Bolloré. Having known Cyrille for years his proposed appointment to the board is a strong sign of the long-term commitment of our main shareholder. As a result, Vivendi proposes to distribute an ordinary dividend of €0.50 per share representing an increase of 11.1% compared to the dividend distributed for 2017 and a return of approximately 2.3%. 2018 was a hugely eventful year. 2019 will no doubt be the same. We have done a lot, but we still have a long way to go. With the support of our main shareholder the Bolloré Group and of the Supervisory Board, we are going to keep working hard on the construction of Vivendi. I am confident for the year to come. We are on the right track to building a unique group for content media and communication in the entertainment industry. Thank you for your attention, and I will now hand over to my friend Hervé. Hervé Philippe: Thank you very much, Arnaud. Good evening to all of you. It's my pleasure today to present to you our results for 2018. Let's begin on slide 11, with the main changes in the scope of consolidation and currencies. The main change in the scope of consolidation was obviously the consolidation of Havas since early July 2017. Also since April 2018, we have been consolidating Paylogic which had less of an impact. The second table of this slide shows the impact of the ForEx and payment of changes on our growth rates. As you can see, these impacts were not material in Q4 and H2. However, the impacts were more significant for the full year, primarily reflecting the contribution of Havas and currency fluctuations. As for our stake in Telecom Italia, as a consequence of the change in governance in 2018 we reclassified it as a non-operating equity affiliate. Therefore, income from Telecom Italia is now accounted for below. Additional information about our interest in Telecom Italia is provided in Note 11.2 to the financial statements for the year ended December 31, 2018 which will be posted online later. Before going through the results, let me remind you that we applied IFRS 15 and IFRS 9 in 2018. Regarding IFRS 15, which relates to revenues – the change had no material impact on Vivendi's financial statements. The group's 2017 revenues were restated. These restatements are essentially gross-up adjustments with no impact on net margin and concern Gameloft certain Canal+ Group contracts and Havas. You will find some details of the restatements in the appendix at the end of the slides. The application of IFRS 15 had no material impact on UMG because its revenue recognition was already compliant with the new standard. As regards IFRS 9, which relates to financial instruments, the new standard had a material impact on Vivendi's net earnings because the revaluation of our equity portfolio as of December 31, 2017 was reclassified as retained earning as of January 1, 2018 in accordance with this rule. Under IAS 39, which was applicable before it would have been accounted for in P&L, as of the date of the disposal. Under IAS 39, the entire capital gain of €1,213 million on the sale of the Ubisoft stake in 2018 would have been reported to 2018 P&L. On slide 14, you have summary of the key financial metrics for 2018. As you can see, Vivendi's performance was strong. During 2018, revenues grew 11.3% year-on-year, reaching €13,932 million, notably as a result of the consolidation of Havas. Organically, revenues were up 4.9%. As we will see later, with the significant improvement in all our main businesses, EBITA grew by 33%. At constant currency in perimeter, EBITA grew by 24.7% compared to 2017. In IFRS, EBIT reached €1,182 million, up 16.1% compared to 2017. In 2018, adjusted net income amounted to a profit of €1,157 million compared to €1,300 million in 2017. Excluding two non-recurring favorable tax impacts for a total amount of €434 million, adjusted net income was up 33.6%, reflecting the good performances of our businesses and the contribution of Havas. Please remember that out of the €1,213 million capital gain on the sale of Ubisoft stake only €53 million were recognized in P&L. Finally, Vivendi's net cash position amounted to €176 million at the end of December 2018. That's a jump of nearly €2.5 billion, mainly due to the strong cash flow generated by the businesses and the cash received from the sale of the Ubisoft Telefonica and Fnac Darty. In slide 15, as already mentioned by Arnaud and as you can see on the slide 15, the profitability of all our main businesses increased significantly during the year, leading to organic EBITA growth of 24.7%. UMG's EBITA increased by 22.1% organically to reach more than €900 million. As for Canal+, EBITA before restructuring amounted to €428 million and grew by 21.8% year-over-year benefiting from continuous cost optimization efforts. Finally, Havas saw its EBITA before restructuring increase to €245 million that is a 1.9% organic increase on a pro forma basis. On this slide 16 as Arnaud already mentioned, Vivendi generated €2.5 billion in net cash in 2018 and Vivendi's net cash position was €176 million at the end of December 2018. This improvement was mainly due to the strong cash flow generated by the businesses for a total amount of €1.1 billion and to the cash received from the sale of the stake in Ubisoft for €1.6 billion Telefonica for €0.4 billion and Fnac Darty for €0.3 billion. These cash inflows were partially offset by the payment of the dividend for approximately €0.6 billion, and the payment of tax and interest for €0.3 billion. It is worth mentioning that in the first quarter of 2019 along with the cash expected to be generated by the businesses in March Vivendi will receive the remaining €400 million of the Ubisoft sale. In terms of cash outflows, Vivendi notably completed the acquisition of Editis at the end of January 2019 on the basis of an enterprise value of €900 million. In addition the payment of the dividends submitted to shareholder approval at the General Shareholders Meeting of April 15, 2019 would be paid from April 18 resulting in an outflow of a total of approximately €0.6 billion. Before going through the performance of the different businesses in detail, let's move to slide 18 with the consolidated P&L. As commented earlier, the operating performances were strong during the year, with revenues growing by 11.3% and EBITA by 33% and almost 25% organically. EBIT was up €164 million benefiting from the good performance of the businesses and the Havas consolidation. It is also worth mentioning that 2017 benefited from a reversal of reserve related to the settlement of the security class action in the U.S. for 27 million as well as the contribution of Telecom Italia for 144 million, which contribution was accounted for below EBIT in 2018 as already mentioned. Below EBIT there was a minor change in interest and income from investments compared to 2017. And income from Telecom Italia amounted to €122 million in 2018. As regard financial income and charges 2018 included the write-down of the investment in Telecom Italia for €1,066 million, notably to take into account the uncertainty affecting Telecom Italia's governance, partially offset by the net revaluation of the equity portfolio for an aggregate amount of €365 million. Regarding provisions for income tax, we had in 2017 two non-recurring profitable tax impacts of €409 million income following the favorable settlement of a litigation relating to the consolidated global profit tax system of 2011 and €243 million tax income concerning to the refund to Vivendi of the amounts paid under the 3% tax and dividend distribution. Excluding these two impacts, income tax would have been a net charge of €297 million in 2017, compared to a net charge of €357 million in 2018. That is an increase of roughly €60 million, mainly reflecting the improvement in Universal Music Group and Canal+ Group performances. So, in 2018, earnings attributable to Vivendi SA shareowners amounted to a profit of €127 million. Adjusted net income, which reflects the group's operating performance amounted to €1,157 million compared to €1,300 million in 2017, mainly resulting from the growth of the EBITA, partially offset by the higher provision from tax -- for income tax. Excluding the two non-recurring favorable tax impacts in terms of the -- in 2017, the adjusted net income would have grown organically by 33.6%. Going to slide 19 on revenues by business unit. In 2018 Vivendi's revenues amounted to €13,932 million compared to €12,518 million in 2017. This increase of €1,414 million is notably the result of the consolidation of Havas, which was €1.1 billion. At constant currency and perimeter, Vivendi's revenues increased by 4.9% compared to 2017. For the second year in a row, Universal Music Group revenues increased by 10% and Canal+ Group's revenues were stable. Revenues from the other businesses amounted to €424 million. They include Gameloft, Vivendi Village, New Initiative as well as intercompany remuneration. Combined revenues for these businesses grew 4.3% organically. Going to slide 20, on the six-months trend in organic growth. As you can see in this slide, organic growth at UMG accelerated in H2 with 12.8% increase, following the 6.8% rise in H1 and Havas returned to growth with 2.7% organic increase in net revenues in H2, following decrease of 2.9% pro forma in H1. As a result, the group's total organic growth accelerated by 5.7% in H2 after increasing 3.9% in H1. On slide 21, as seen before, Vivendi's profitability significantly improved in 2018. EBITA amounted to € 1,288 million compared to €969 million in 2017, an increase of €319 million, notably resulting from the consolidation of Havas for €104 million. At constant currency and perimeter, EBITA increased by €240 million, almost plus 25% driven by the growth of Universal Music Group plus 22.1% and Canal+ Group plus 32.8% which continues its recovery in France. Now going to slide 22 on the cash flow from operation. In 2018 the CFFO was €1.126 billion compared with €989 million in 2017. This improvement essentially resulted from the strong operating performance by Universal Music, mainly driven by the growth in subscription and streaming services, as well as an increase of €21 million at Canal+ as a result of a better operating performance. The contribution from Universal Music and Canal were partially offset by Havas' negative contribution of €61 million which is linked to the consolidation of Havas at the beginning of the second half of 2017. This trend is completely normal given the unfavorable change in working capital in the first part of the year due to the seasonality of cash generation which is typical in the advertising industry. In reality Havas cash flow generation increased by €25 million from €308 million in H2 2017 to €333 million in H2 2018. Moving to the balance sheet on page 23. The most notable changes compared to the opening balance sheet as of January 1, 2018 were the changes in financial investment and in the net debt position. Financial investments were down €3 billion mainly as a result of the disposal of the stakes in Ubisoft Fnac Darty and Telefonica and the write-down of the Telecom Italia investment offset by the revaluation of the remaining equity portfolio. Finally as seen previously Vivendi had €0.2 billion net cash position at the end of December 2018 as opposed to a net debt position of €2.3 billion at the end of 2017. This is a transition to the liquidity and capital resources on slide 24. At the end of December the gross cash position stood at most €4.4 billion and the gross debt at €4.3 billion. It's also worth mentioning that in January 2019 Vivendi raised its credit line to €2.2 billion maturing 2024 and signed new beta to our credit lines for €1.2 billion with a 5-year maturity. Now let's turn to the business unit performances starting with Universal Music in slide 27. This slide illustrates the continued growth in Universal Music revenues on EBITA fueled by the industry's rapid shift to streaming which has accelerated since 2015 when Apple Music was launched. On the left-hand side of the slide you can see that Universal Music revenues grew by €1.5 billion in 2018 from its low point in 2014 resulting in a plus 7.2% CAGR and 10% in the two last years. This growth was driven by streaming services which significantly boosted the recording music and publishing revenues. In 2018 Universal Music EBITA was above €900 million compared to €565 million in 2014 resulting in a plus 12.4% CAGR, demonstrating the operating leverage experienced during these years. As a result, the EBITA margin grew from 10.5% in 2013 to 15% in 2018. Going to recorded music on slide 28. You see that in streaming and subscription revenues represented 54% of recorded music compared to 43% in 2014. In 2018, streaming and subscription increased 37.3% year-on-year after a 35.4% increase in 2017. This strong growth is driven by the increase in subscribers and the stronger market share throughout the year. Meanwhile, physical sales, which still represent 20% of recorded music revenues, continued to decline sharply in 2018. While they were relatively stable in 2017, physical sales are expected to continue their downward trend, but may experience ups and downs from one quarter to the next. On the next slide 29, you can see the impressive acceleration of growth throughout the year quarter-after-quarter for streaming and subscription revenues with plus 31.5% in the first quarter, plus 37% in the second quarter, plus 38.6% in the third one and plus 41.7% in the fourth quarter. Keep in mind that those 41.7% growth in streaming and subscription in Q4 2018 does not include any one-time favorable item. In the other segment, we have several positive non-recurring item. As previously disclosed, in Q4 2017 we included the receipt of proceeds from a €30 million digital royalty claim recorded in recorded music other digital revenues. In Q4 2018, included the receipt of proceeds from a licensing settlement for €14 million. And in Q4 2018 also, included receipt of proceeds from a publishing settlement for €19 million. On slide 30, UMG key financial figure for the year. As already mentioned, total revenues were up 10% organically, with strong growth in recorded music. And in music publishing, plus 14.5%, while merchandising and other revenues were down 1.5%. On recorded music revenues, as seen earlier, this sound growth which accelerated in H2 was driven by continued growth in subscription and streaming, coupled with the strong performance of Universal Music artists. In 2018, the bestsellers were led by Drake, Post Malone, The Beatles, XXXTentacion, as well as soundtrack release from A Star Is Born. Music publishing revenues grew by 14.5% organically, also driven by increased subscription and streaming revenues. Merchandising and other revenues were down 1.5% due to lower touring activities. EBITA improved 22.1% and the EBITA margin improved to 15% from 13.4% last year. Moving to Canal+ and with the overall subscriber base on Slide 32. As shown in this chart, total subscribers to Canal+ offers grew by 654,000 over the last 12 months reaching almost 16.3 million at the end of 2018, benefiting as we will see after from the strong momentum of international operation from the stabilization of the subscriber base in France. Over the last two years, Canal+ Group gained more than 1.2 million subscribers. The cost optimization plan paid off enabling Canal+ Group to increase its EBITA before restructuring by €147 million over a period of two years from €281 million in 2016 to €428 million in 2018. Let's look in more detail at the evolution of the international subscriber base on Slide 33. In 2018, the international subscriber base grew by 883,000 new subscriber’s year-on-year. In Africa, 652,000 subscribers were gained in 2018 with a strong Q2 and Q4. In Poland, the growth of the subscriber base initiated in 2017 has continued with 23,000 new subscribers in 2018 in a very competitive market. There was also good growth in the overseas territories plus 53,000 in 2018 notably driven by the export territories like IT. In Asia the growth amounted to 155,000 subscribers thanks to the Myanmar launch in Q1 2018 60,000 at the end of 2018 and the recovery in Vietnam plus 95,000 in 2018. Moving to Canal+ subscriber base in mainland France on Slide 34. First, let me highlighted on the right-hand side of the slide the improvement of the churn rate by 2.2 points over the year reaching 13.6% at the end of 2018. This improvement is due to a better subscriber retention rate, thanks to a more flexible commercial offer. More than 95% of new subscribers signed a 24 months commitment contract. The subscriber decline was due mainly to the drop in Canal+ subscriber base, the termination of the CanalSat offer in favor of the new Canal offer on subscription via wholesale partnership with telecom operators. It is very important to note that the success of the Canal+ channel offer. The subscriber base for the Canal+ channel recorded net growth of 251,000 subscribers over the last 12 months. This figure demonstrates the attractiveness of the Canal+ channel and the new offers. Including collective subscriptions, the total subscriber portfolio in France reached 8.3 million. Turning to Canal+ Group results on Slide 35. Revenues reached €5,166 million, almost stable in organic terms compared to 2017. International TV delivered a strong organic increase in revenues of plus 6.8%, thanks to the robust organic growth of the subscriber base. Regarding TV operation in France, revenues were down 3.4% due to the decrease in its subscriber base as we saw before despite a positive change in the churn rate. StudioCanal's revenue amounted to €462 million, down slightly year-on-year, due to an unfavorable comparable basis in 2017, particularly with the worldwide success of Paddington two and despite significant growth in TV operation and increased catalog revenues. EBITA before restructuring charges amounted to €428 million, up nearly €80 million year-on-year. EBITA after restructuring charges amounted to €400 million compared to €300 million in 2017 plus €100 million and plus 32.8% at constant currency and perimeter. This strong growth in EBITA was notably driven by the cost savings plan initiatives in 2016, the marked improvement in mainland France and the sustained international growth. Going to slide 37, as expected, Havas achieved significant improvement in its organic net revenue growth during the second half of the year compared to the first one. Organic growth in Q4 was excellent and reached 4.8% and plus 6.7% if we exclude Arnold. In H2, organic net revenue growth was plus 2.7% compared to minus 2.9% in H1. For the full year 2018, organic net revenue growth was plus 0.1% and plus 1.9% if we exclude Arnold. So Q4 confirmed the trend recorded in Q3 on the return back to positive organic growth. This resumption of organic growth is explained by the recovery of the media business notably in the United States. Solid growth of the Havas creative networks, thanks to notably BETC, Ekino and Havas Edge. And Havas Health & You, the division specialized in health and wellness, Havas leading business line, which delivered an excellent performance. Havas Health & You is now ranking amongst the leaders in health and wellness communications. Moving to the slide 38, on the sequential improvement in organic growth and profitability, along with the improvement in organic net revenue growth Havas also improved its profitability in 2018 both in the first half and the second half of the year. So EBITA margin before restructuring charges increased by 0.8 points in 2018 with a jump of 10.7% in the first half, as opposed to 9.9% in H1 2017 and 11.6% in the second half opposed to 10.9% in H2 2017. This improved profitability is a result of the cost optimization plan implemented since the H2 2017. In slide 39, we can see the organic net revenue growth by region for the full year 2018. The North American agencies performed very well, thanks to Havas Media, Havas Health & You, Havas Edge and Havas Amenity. Business in Europe continued to show progress at the end of the year, supported once again by robust performances in France and United Kingdom. In France, BETC Havas Paris Ekino/FullSIX were the major contributors. The United Kingdom confirmed its recovery driven by the excellent performance from the media businesses, and the continued dynamism of the health care communication business at Havas Lynx and the creative business at Havas London. Italy continued to show steady growth, while performances from the other European countries remain mixed. Latin America confirmed its recovery driven by the media businesses. Asia Pacific returned slightly negative performance penalized by Australia, while China and India reported sustained growth. Turning to slide 40 and Havas key figures. Havas has been fully consolidated since July 3 2017 and 2018 marked its first full year contribution to the Vivendi Group's full year results. So figures for 2017 year are in pro forma. In 2018, Havas net revenues reached €2,195 million representing plus 0.1% organic growth and minus 2.8% reported growth and included a negative ForEx impact of 4% and a positive spot effect of plus 1.1%. EBITA before restructuring charges amounted to €245 million an increase of almost €9 million compared to 2017, the EBITA margin before restructuring charges increased by 0.8 points. In 2018 restructuring charges increased to €30 million compared to €24 million in 2017. This increase was due to redundancy plan implemented at the end of the year notably in Spain and in North Korea. After restructuring charges EBITA amounted to €215 million compared to €212 million in 2017. Finally, turning to slide 42 on the key figures for the other businesses. The revenues from the other businesses including Gameloft, Vivendi Village and New Initiative grew by 4.3% organically sustained by Vivendi Village live activities and Dailymotion which is part of New Initiatives. In 2018, Gameloft revenues amounted to €293 million down 5.1% organically. Gameloft's OTT revenues which are the sales of games and platforms such as Apple, Google, Microsoft or Amazon which represents 72% of Gameloft's total revenues were up 2.1% at constant currency. This increase partially offset the decline in activity related to telecom operator, which is structurally in decline due to the gradual replacement of traditional mobile phones and by smartphones and a decrease in advertising sales. In 2018, the EBITA of the other businesses amounted to €229 million compared to minus €203 million in 2017, a €26 million decrease notably due to non-recurring corporate cost. To conclude on slide 44. Vivendi achieved a strong financial performance in 2018 with significant improvement in the profitability of the main businesses. Vivendi is so confident in the evolution of its main businesses in 2019. As regard, Canal+ Group after a strong improvement in its profitability in 2018, it will continue its improvement effort. And in 2019 profitability is expected to be even better than it was in 2018. Distribution of an ordinary dividend of €0.50 per share will be proposed to the General Shareholders' Meeting of April 15, 2019. Thank you very much for your attention and we are now ready to answer your question.

Thank you. [Operator Instructions] We will now take our first question from Adrien de Saint Hilaire of Bank of America Merrill Lynch. Please go ahead.

Good evening, everyone. So I've got a few questions please. So first of all, around UMG and the disposal process. Do you have any sense as to when we should expect the first deal to be announced? And do you now have a better idea on potential bidders? The second question that I have is, what are your expectations for upcoming renegotiation with the different music streaming platforms? And are these prerequisites for any deal to be made? And lastly, you highlighted very strong organic sales growth in 2017, 2018, 10% in both years. Do you expect 2019 to see some normalization, given you've nicely outperformed the market? Many thank indeed.

As regard to the process in which we are with the Universal Music Group strategic partner process, we are absolutely in line with our timing. We don't have to say the final objective as regard to the outcome. The board as we said has preselected as we speak 15 banks, just to select the best partner or partners. We expect to announce the list of the appointed financial advisors shortly. But we are internally making sure in the preparation of the process on the one hand and the preparation of Vivendi due diligence that we do all efforts to be able to have a positive outcome as regard to this process. So my message is no fixed deadline. We are absolutely in line with the plan. And we are preparing the process to be sure that we will be able to get the best possible outcome. As regard to the negotiation with the platform, the business and the operations and all the team led by Sir Lucian Grainge are working just to be able to maintain the leadership position. It's part of the business to negotiate with the platforms, but we don't communicate anything as regard to the negotiation. Those negotiations have no impact in the process we're in. Hervé Philippe: And to answer the last question on the future and the growth in 2019, we are confident obviously in the growth. And you have seen the acceleration of the growth quarter-after-quarter, especially on the streaming and subscription segment, which is directly linked to the increased number of subscribers on those offers of the platform. So you have an add-on each month -- month after month of the number of subscriber, which explain this growth. At the same time we have very good, I would say releases of songs in 2018, so we have seen Universal Music in a very good position in the market in 2018. We expect this will continue obviously in 2018, but we have not given specific guidance in the level of growth for 2019 in this business.

Thank you very much. And I know this is not a Bolloré Group conference call but a Vivendi one, but I just can't resist to ask why is Vincent Bolloré stepping down?

This is the decision made by Vincent Bolloré. There is a new generation which is coming, a new blood coming. But the most important thing is we've got the long-term commitment of our number one shareholder, controlling shareholder who has provided the management team and all the operations to be able to build the long-term industrial strategic plan from Vivendi. And when you see the track record over the past four years this is absolutely what did happen. Shall we say that Vincent Bolloré remain the Chairman of the main shareholder. So it's really to prepare for the future with the excitement as regard to be able to really write the story and the ambition we have for our company. Thank you.

We will now take our next question from Omar Sheikh of Morgan Stanley. Please go ahead.

Good evening everyone. A couple for me, if I could. First of all Arnaud, I'm just going to ask about the process on the UMG. And I guess, it's been seven months since you formally launched the process. I wondered whether you could just talk about in general, where you think the interest for buying a minority stake might come from. Just broadly whether you're expecting to see interest in strategics or financial buyers? That will be helpful. And then, I just want to ask about the tender offer. I'm slightly confused I suppose as to why you would set the price of a tender offer so far in advance of actually putting it into place. I understand you have to have a vote at a general meeting, but obviously if you don't close until the beginning of next year, we're talking about a 2020 tender offer and you'll set a sort of I guess a ceiling price in February of 2019. So just some sort of commentary around that will be very helpful. Thank you very much.

So as regard to the Universal Music Group process, we just build the momentum and do what has to be done to get as I said previously a positive outcome. We said from the very beginning that we would be in a kind of 12 to 18 months time frame, which is exactly what is currently occurring. And no need to say that the capacity to provide the potential interest with numbers which are going to help to form kind of the right value that we expect to be able to generate through that process is something that is helping the process. So we are not putting the cow before the chariot. We're just building momentum getting the kind of a positive quarter-after-quarter momentum and numbers are proving us right. And as regard to the process per se, we just want to make sure that again the outcome is going to be good. In terms of interest, we didn't talk to anybody outside. We are working in-vitro. We hear a lot of things. No need to say that this is kind of an industry which is attracting a lot of attention. And we're just preparing internally what needs to be prepared to be sure that we are going to be successful. So, again, as regard to other information to be provided as we speak there is no more information. Just to say that process on track. Good numbers for Universal Music Group, good performance in the market, and soon new news to be coming in due time. Hervé Philippe: And I will take the second question to answer on the tender offer on the Vivendi shares. In fact let me be very clear on that. This authorization as to the General Shareholders Meeting is not linked to the sale of stake in Universal Music. This is more linked to the policy in repurchase of shares by Vivendi. As you see at the end of 2018, we had roughly €4 billion of net cash which doesn't bring us a lot of interest in fact. We are sometimes depositing negative terms. So, it makes sense to increase or to come back to some repurchase of shares by Vivendi itself. That's why we have first asked for an authorization to come back on the classical, I would say, share repurchase program and to increase it which was formerly only for 5% of the capital up to 10% which is the maximum authorized by the law. And we have also increased the price which was €24 formerly and which is now as to be €25 per share. But going above that is difficult because you are limited by 10% under the law, so if you want to repurchase more shares, we have to go to a specific operation. And this could be a possibility to launch a takeover on Vivendi's shares which is just at this stage an authorization asked to the shareholders' meeting and the possibility to do it by the management Board. I hope this helps. Thank you.

We will now take our next question from Richard Eary of UBS. Please go ahead, your line is open.

Yes, evening. Can I just get some -- a couple of things on clarity? Just on your Canal statements that you expect a slight improvement. I've been seeing that we're now stepping away from the €500 million guidance that was out there previously. So, just to get some color on that. And also what the impacts of the APL cost will be on the business? The second thing is just on Havas, obviously, a better or a stronger performance in Q4. Can you just talk through in terms of expectations for that asset as we go into 2019? And lastly just to go back to the UMG sale process again and apologies for this. Just to confirm when you say a floor price will be set can you just give some little bit more color in terms of exactly what you mean with that? And how that will actually happen?

Well, as regard to the last question, we're not going to comment on that. We've got a vision about the value that we are expecting from the process and below which we will not complete the process. As regard to your questions on Canal+, we are happy about the progress of the company. Obviously, this is a fast-moving environment where we need to have the agility to be able to cope with both the opportunities and also our competitive environment. We may have some lags in front of this €500 million, due to the ups and downs of Studiocanal. But nonetheless, Canal+ Group will keep investing in France and in international territories in new programs as well as in commercial and technology initiatives, because there is a strong need to boost our revenue growth. And we will continue beside that trend to implement additional cost optimization measures to further improve EBITA margins before restructuring charges in 2019. I would like to add that Canal+ will roll out its digital offer abroad with the myCANAL app. So as we have done in the past, there is an ongoing type of vision about the capacity to deliver performance over a certain period of time, but without jeopardizing the capacity for investment within the operation to be able to provide long-term shareholder value creation. So this is what we have done. In the comments for the next year, as mentioned by Hervé in his presentation, you will notice that we gave kind of a known number, but we give the objective to continue the improvement of Canal+ Group efforts and 2019 profitability is expected to be even better than it was in 2018. This is where we do stand. Can you take Havas? Hervé Philippe: And maybe, the question regarding Havas. Obviously, the recovery of Havas growth in the second part of the year is very good news for business. And it's fueled by a better situation in different geographies and especially in the U.S. There were also many, many wins at Havas, especially in the media business and also in the creative. And we have a strong position in Havas, as I expressed in health care and wellness. So we'll see what will be the 2019 at. Just can say that obviously in the first half of 2019 we'll have a better comparison base, I would say, considering that H1 2018 was negative. So this is what we can comment on Havas today.

We will now take our next question from Matthew Walker of Credit Suisse. Please go ahead.

Thanks a lot. Good evening, everybody. Just three questions, please. The first is, just going back to your comments around the authorization for the buyback. You mentioned in your remarks that you didn't see it as related to the sale process. So does that mean that in theory, the sale process could generate an additional buyback at a different -- potentially different price? That's the first question. The second one is, you set out your releases for UMG for 2019 also you had a fantastic year in 2018. I don't see Drake there. Does that mean, it's definitely the case that there won't be a Drake album? Or is it still possible depending on what he wants to do, that there will be? And the third question is, just on the minority stake. Do you think that you could enhance the value? Or will you likely to be enhancing the value through offering a minority stake initially, but with a path to control to basically get more interest on board? Thank you.

Well I would take that question as regard to the plan for 2019. What I can say at this moment is, we are excited about the first quarter release schedule with that key releases from Ariana Grande, Billie Eilish and Luis Fonsi among many others. So obviously this is an ongoing type of momentum. And we are positive about the capacity of the attractiveness of Universal Music Group on the one hand and the capacity really to be able to have an exciting schedule to be able to provide the operation with the possibility to maintain its position in the market and then to be able to deliver on its objective. Hervé Philippe: To the path to control we'll see the discussion with possible acquirers. Obviously each time somebody enters as a minority stakeholders, he wants to know what could be the possible exit. So we'll see that later. But to answer your question to the buyback as I said this authorization is in association to the shareholders meeting to give the possibility to make a tender offer on the -- in the current situation of Vivendi. I would say, we'll see later what could be the use of proceeds of the possibility of the sale of the stake in Universal Music.

Okay. Thanks a lot. Thank you.

[Operator Instructions] We will now take our next question from William Packer of Exane BNP Paribas. Please go ahead.

Hi, there. Thanks so much for taking my questions. Three please. Firstly, the mood music around Article 13 seems favorable. We just heard overnight the findings from the trial log which suggests that there will be a meaningful introduction as long as the European parliament passes it. Could you just discuss how you think about the potential positive impact on your business of the introduction of Article 13? Is it via better royalty rate? Is it by increased streaming penetration in Europe? That would be helpful. Secondly, you helpfully gave us some numbers around the one-off impact at UMG of a couple of different things have been published, shared elsewhere. Should we assume those revenues are very high margin and, therefore, when thinking about the margin base moving forward, we should be thinking more about on an IFO basis about 15.2% not 15.7%? And then, lastly, just one more conceptual point around the negotiations with the platforms. Data is clearly an increasingly valuable tool as we move forward in the music era. Could you just talk about how you view the ownership of that data? Do you think that you'll likely have to pay the likes of Spotify for that, or do you think it will be -- if you're right as part of the current relationship that you have? Just any comments there would be helpful. Thank you.

Well, I would take the first question as regard to the current status of the copyright directive and mainly Article 13 as regards to the music industry. Well, the trial log has come to a provisional agreement and I insist on the provisional agreement, has to be ratified by the European Council and European Parliament. But what we can say is that, it's too early to draw a final conclusion, devil is in the details. It's been an extensive discussion. Some progress has been made and we have the Commissioner Ansip leading the process in a way that was previously positive as regard to its outcome. But, again, I will not form a definitive statement about what we do think as regard to this agreement because we are currently working on its details. There are many of them, but I'm sure that we will get the opportunity to be able to provide an official statement in due time. Hervé Philippe: Thank you, Arnaud. So the question on the one-off in the music business in Q4, as you can see, we have not given the precise impact on EBITA of those one-off. In fact, those one-offs are quite limited and balanced in one sense one way and the other, I would say so. In fact, the impact is not very significant, I would say. There was a third question on the platforms and the current status of the negotiation. In fact, we cannot comment on those future possible negotiation and the details of the contract and the timing of the contract.

Thanks very much.

We will now take our next question from Julien Roch of Barclays. Please go ahead.

[Foreign Language] So my first question is, historically you said you didn't want to IPO UMG. If during the sales process some buyer want a liquidity close, which implies a potential IPO when the liquidity close can be triggered, would you be happy to grant such liquidity close? That's my first question. And then, the second question is, there's a couple of press articles today that was confirmed by the company, but you're about to buy 20% to 50% of the leading Indonesian pay-TV company. What control will you have on the investment? How many board member? How many operational input? That's my second question. And my third question is how much do you think UMG gained in terms of market share globally in 2018? In the U.S., you gained two points to 38.7% from 36.7%. Do you think you actually gained two points globally? That's my last question. Thank you.

So first question we're not going to comment on what's going to be the approach in terms of negotiation. So, we keep an open mind but no further comments. As regards to the rumor that we read, we don't comment on that information. And on question number three. Hervé Philippe: It's on the Universal Music market share. In fact only U.S. market share that are available today. And obviously, we've won market share in the U.S. But we have not completed the figures for other geographies today.

We will now take our next question from Laurie Davison of Deutsche Bank. Please go ahead. Your line is open.

Hi, there. The first question is just on UMG margin. So you've done 160 basis points of expansion in 2018 from income from ops and you said the one-off was not a significant impact on that. So is this a good run rate of growth of margin expansion for the division over 2019? Second question is just confirmation to what you said on the cash return for UMG sale or the lack of link with the buyback. Does that apply to both the 10% and the 25% which you've outlined? And can you confirm that the proceeds from the UMG sale was still – a majority of those will still come back to shareholders? And just lastly, corporate costs for 2019 you said there's a big step-up in non-recurring. Can we have a corporate cost number for next year please?

Well, I will take the first question on the expansion in margins at Universal Music just to say that you have seen that there is a very good operating leverage in Universal Music. And as we have top line growth, we have an increase at the EBIT level and EBIT ratio which is very good. And frankly, this relies on the – on this pure leverage effect, so it's very difficult to be precise on that for 2019. And we don't want to comment on that, but there is no reason pretty much in that this leverage effect will not play also in 2019. While as regard to the proceeds of the process, as we said and we do confirm that is going to be reused largely in share buyback. And we may also consider depending on the timing, if some acquisition could be available to us, but again with a strict discipline that we are outlying in such circumstances. So it has not changed since our announcement when we triggered the process. Hervé Philippe: Okay. Your question on the corporate cost, I said that there is some non-recurring corporate cost which are linked I would say to some external fees regarding litigations obviously and also restructuring at certain point in the corporate cost. So that's why I've spoken of such non-recurring cost, which explain largely I would say the increase of corporate cost between 2017 and 2018.

Okay. So we should see the corporate costs return to the 2017 levels? Hervé Philippe: Yes.

Thank you.

We will now take our next question from Conor O'Shea of Kepler Cheuvreux. Please go ahead. Your line is open. Conor O’Shea: Yes, good evening. Thanks for taking my questions. A few questions. Firstly, maybe a question for Hervé on the restructuring charges for 2019. I think I'm right in saying that for Canal+ there were no restructuring costs in the fourth quarter. So does that mean the restructuring has ended at Canal+? And is your guidance on higher operating profits at Canal+ in 2019 after -- before or after restructuring? And also if you could just say for Havas, if the restructuring is now finished in the fourth quarter? Second question just on Editis. I think in the past you said that -- you gave numbers on 2017, but made the point that it was a non-favorable calendar year for the education book publishing business that would be better in 2018 and particularly 2019. I wonder if you can just say give us any numbers for at least -- for 2018 or if they were higher in terms of EBITDA than 2017. And then the last question just on Hervé you said about using -- potentially using €4 billion of gross cash that is generating next to nothing in terms of returns. Can you just remind us of your net debt maximum leverage ratio targets please? Thank you. Hervé Philippe: I can answer some of those questions. Maybe you can answer on Editis and I will take the question on restructuring at Canal+, Havas and on the net debt in it. Well, in fact there was maybe no restructuring cost in the fourth quarter for Canal+ but this doesn't mean that the restructuring are over. We have still some restructuring costs at Canal+ but very difficult to be precise on that today and that's why our main targets are given before restructuring at Canal+. We have also some -- probably some cost at Canal+ in 2019, which are development cost I would say. And that's why we have given this type of guidance and we will be probably more precise later in the year. At Havas, I would say there were some specific restructuring cost in 2018 in the last part of 2018 related to some specific situation in Spain and in Australia. So, I would say, logically in this business, in advertising you have always restructuring costs linked to some agencies, which seem to be restructured in case of some changes in the portfolio of clients. So this is logical. We had an increase in 2018 in comparison to 2017 I would say. So it's logical to imagine that in 2019 we'll have also restructuring cost, but difficult to be precise on that exactly. I can say that 2018 was specifically high from that perspective. For the net debt ratio, it's always a question of -- to be present enough in terms of net debt pressure and we don't want to have too much debt -- net debt obviously. We look also to the maturity of the debt, which is an important point. But we -- today we have no debt. So we are very satisfied with the net debt. I would say we are very satisfied with this situation. And we don't want to have a too big and too high level of net debt regarding EBITDA just like it was in the past in fact. Thank you. Maybe Arnaud?

As regard to Editis, just in terms of schedule what we said is that 2018 would be a challenging year which has been increased at the year-end by the social unrest in France. Not good for people going to shopping centers and libraries and so on and so forth. But hopefully in the last two weeks, we had the holiday seasons, which was better. But the numbers for 2018 have not been approved yet. What we nonetheless said is that it's 2019 and 2020 which are benefiting and will benefit from the educational new program which based on our education division led by the brand Nathan and also Bordas, we should benefit from the possibility of having this positive cycle. So, we expect it to be more explicit in our next release as regard to the Editis numbers. But we completed the transaction. We're happy from the very first step and are truly convinced of the potential of having Editis within Vivendi to be able to create shareholder value on the long-term. Conor O'Shea: Okay. Many thanks.

I think that we come to the end of this session. So, thank you for your presence. Thank you for your questions. And I will just confirm that our AGM is going to be held on the 15th of April. And that being said, have a great evening. Hervé Philippe: Bye, bye to everybody. Thank you.

Ladies and gentlemen, this completes today's conference call. Thank you for your participation. You may now disconnect.