Laurent Mairot - EVP, Head of Corporate Development and IR Arnaud de Puyfontaine - Chief Executive Officer Herve Philippe - Chief Financial Officer

Charles Bedouelle - Exane BNP Paribas Lisa Yang - Goldman Sachs Adrien de Saint Hilaire - Morgan Stanley Julien Roch - Barclays Capital Laurie Davison - Deutsche Bank Tom Singlehurst - Citigroup Conor O'Shea - Kepler Cheuvreux Ian Whittaker - Liberum Capital Giasone Salati - Macquarie Louis Citroen - Arete Research Stephane Beyazian - Raymond James

Good evening, ladies and gentlemen. Welcome, and thank you for joining us for Vivendi's first-quarter 2016 earnings. Your hosts for today's call are Arnaud de Puyfontaine, Chairman of the Management Board, and Herve Philippe, Member of the Management Board and Chief Financial Officer. This presentation will be in English. This call is webcast on vivendi.com, where presentation slides are available for download. I encourage you to read the important legal disclaimer at the end of this presentation on Page 25. The Q1 2016 financial report will be available on our website after the end of the call. On our website, you'll also find a replay of this call that will remain available for 15 days. As usual, we will leave time for a Q&A session at the end of the presentation. As the Gameloft offer is not being made to shareholders in certain jurisdiction, we will not be able to accept any questions related to Gameloft during this Q&A session. And now I have the pleasure to introduce our Chairman of the Management Board and Chief Executive Officer, Arnaud de Puyfontaine.

Thank you, Laurent, and welcome, and thank you for joining us today. As Herve Philippe will show in a few moments, Vivendi delivered results in line with forecast during the first quarter of 2016. Indeed, our Q1 revenues were stable at €2.491 billion, whereas our income from operations was up 9.9% and EBITA up 3.6% at constant currency and perimeter. At end of March 2016, the Group's balance sheet remained solid, with a net cash position of €4.8 billion. Those results reflected the satisfying operating performances of our main businesses. Universal Music Group's growth was fueled by the significant increase in streaming and subscriptions, though tempered by a major revenue drop in downloads. And the increased losses suffered by Canal+ channel pay TV in France were offset by the good performance of Canal+ Group international pay TV operations. In addition, recent months have been marked by new developments for Vivendi in content creation and distribution. In January we sold our 5.7% remaining stake in Activision Blizzard for net proceeds of around €1 billion. In February we announced a public tender offer on Gameloft; one of the leading global publishers of mobile games, after crossing the 30% threshold. In April we announced a strategic and industrial partnership with Mediaset, a leader in free to air and pay TV in Italy and Spain. Through this transaction, which remains subject to the approval of the relevant regulatory authorities, Vivendi would own 100% of Mediaset Premium and a 3.5% stake in Mediaset. Over the past few months we also confirmed our desire to develop our own original content by taking stakes in several TV production companies, Banijay Group, Bambu Producciones in Spain, Urban Myth Films and Sunnymarch TV in the UK, as well in iROKO in Africa, which is SVOD platform. As part of the strategic partnership to bolster cooperation with Groupe Fnac, the leading distributor of cultural goods in France, with an international footprint and some digital distribution initiatives, we will acquire a minority interest of 15%. We've agreed to subscribe to a reserve capital increase for a total amount of €159 million, the completion of which remains subject to the approval of the Groupe Fnac shareholders at their shareholders' meetings on May 24, 2016. Last but not least, we recently announced the upcoming fall launch of Studio+, the first offer of premium series specifically designed for mobile devices, a first example of close cooperations between Vivendi and telco companies. As announced, Vivendi has provided a significant return to shareholders since the beginning of the year. Two dividends of €1 per share were paid in February and April for a total amount of €2.6 billion. As mentioned during the last shareholders' meeting, Vivendi gives itself the means to achieve its ambition, becoming a European based world leader in media and content. Thank you for listening, and I will now hand over to my friend and colleague, Herve Philippe. Herve, over to you.

Thank you very much, Arnaud, and good evening, everybody. As Arnaud just mentioned, we have been very busy the first quarter of this year. Let me begin the result by scope and consolidation of main currencies in slide 3. In fact, we see the major item to highlight in this slide is probably the accounting for Telecom Italia as an equity affiliate starting on December 15, 2015, when we were appointed as Board Members; but with a lag of one quarter, since Telecom Italia reports its financial results after ours. As a consequence of that, in Q1 2016 we recorded for the first time our pro rata share of Telecom Italia's earnings based on our economic interest in Telecom Italia of about 15%, which happened to be a loss for fourth quarter of 2015 of around €11 million. On the currency front, you can see also that our financial result again benefited from changes in the euro dollar exchange, though to a lesser extent than last year, with the latest forecast appearing less favorable for the rest of this year. Next slide is slide number 4 for the key financial metrics for Q1 2016. Revenues are flat in euros, though slight decreased in organic total revenues in Q1. As I will explain, this slight decline is due to the Canal+ pay TV operations in France. Under IFRS figures, both EBIT and net income, group share grew significantly, mainly due to nonrecurring and non-operating items, mostly the capital gained on the sale of our remaining stake in Activision Blizzard as well as the €240 million reversal of reserve resulting from the settlement of the Liberty Media litigation during the quarter. In terms of operating performance in the non-GAAP measures, it was an adjusted figure. Q1 was a good quarter, with an increase of almost 10% in income from operation of nearly 4% in EBITA at constant currency and constant perimeter. I will give you some details later. Adjusted net income for the first quarter was €99 million compared to €136 million last year. In fact, in Q1 we booked the total tax impact of €41 million relative to €240 million reserve reversal just mentioned. In 2012, when the reserve for the Liberty Media litigation was recalled, the reserve was considered as tax deductible and the tax impact was included in adjusted net income, while the reserve itself was not. As a consequence, in 2016 the tax expense is included in the adjusted net income, while the reversal of reserve is not. Excluding this impact, adjusted net income would have been up by 3.1%. At the end of March we can see that the cash position stood at €4.8 billion compared to €6.4 billion at the end of 2015. We'll give you more detail on the change in the net cash later, but this decrease in net cash is mostly attributable to the payment of €1.3 billion interim dividend at the beginning of February. Let's now get into the detail of the financial performance of the different business units, starting with Universal Music on slide 5. You can see that for the first quarter revenues are up 0.6% organically and revenues from recorded music up by 0.5%. This growth may appear to be modest, but achieved because of very significant evolution both on industry level and at the UMG level. On the industry front, the overall music business benefited from the strong momentum from streaming and subscription platforms, fueled by the launch of Apple Music at the beginning of the second part of 2015. But at the UMG level, the very strong growth in streaming and subscription revenues, of 60% compared to last year. We had at the same time an increased decline in download sales, minus 32%, and a continued decline in physical sales, minus 17%. The steeper declines in physical and download revenues reflect in part the lighter release schedule in the quarter versus the same quarter of last year, as well as continuous change in consumption formats. Streaming and subscription not only accounted for 61% of digital revenues during the quarter, but was also the largest source of revenues accounting for 34% of total recorded music revenues. Music publishing were up 0.3% year on year, and merchandising were down 7% on lower retail revenues in the US due to less artist touring activities. Income from operation was up 18.6% organically, due to lower operating expenses over the quarter, mostly because of the lighter release schedule. And with €13 million more in restructuring charges, EBITA was flat organically. Slide 6 focuses on the different drivers of UMG's revenues and the strong growth in streaming and subscription revenues. Thanks to this growth of 60%, total digital revenues grew 8%. Total digital revenues accounted for 56% of UMG's recorded revenues, and streaming and subscription alone accounted for 34% compared to 22% in the same quarter of last year. Moving to Canal+ on Slide 7, you can see that total revenues were down 2.8% organically. The decrease in revenues is mostly due to a 4.6% decline in revenue from the pay-TV operations in France, who has a continuous decline of the committed subscriber base. While we are working on new initiatives to reinforce the pay-TV offer in France, no significant initiative has been implemented so far this year. This will take place mostly during the second half of the year, which is traditionally the busiest period in terms of recruitment. Total committed subscription decreased by approximately 400,000 over the last 12 months and 180,000 in the last quarter alone. Studiocanal revenues were also down for the quarter due to fewer theatrical releases. These two negative impacts were not fully offset by the solid growth in the international pay-TV operation, mostly in Africa, where revenues grew 13% thanks to the strong evolution of the subscriber base amounting to almost 2 million in Africa. This quarter was also very good one for the free-to-air in France where revenue increase of 11.5% due to strong audience, mainly at D8. Income from operation and EBITA were up 7% and 3% respectively. This solid performance is driven by international activities and by Studiocanal, while profitability of the pay-TV operation in France is still an issue. On Slide 8, you'll see a focus on Canal+ pay-TV operations in France. As highlighted in this slide, even with the benefit of some positive timing effect related to film programming costs during this quarter, the trends are very challenging. The rest of the year will be -- will likely remain tough, as you can see on the right hand side of the slide, notably with the escalating costs of sport rights and the impact of subscriber base erosion, and several unfavorable timing issues. In Slide 9, for the other businesses, the most important thing to highlight here is that we are working on many new initiative, for example, CanalOlympia, the new network in Africa, Vivendi Talents, Studio+, and the integration of Dailymotion. Initially the investments translate in some losses at the income from operation level. Going to Slide 10 and adjusted net P&L, while you can see that EBITA is down by 2.5% and up 3.6% organically, as we have seen. Adjusted net income is down by 27.3%, which is due to a decrease in income from equity affiliates, primarily due to the recording minus 11 million in Telecom Italia for this quarter. We are also negative 8 million change in income from investment as in 2015. We've benefited from Activision Blizzard dividends. We have some increased interest expenses because in 2015 we benefited from the interested received of the financing granted to GVT. And we have, obviously, higher taxes in Q1 2016 because the tax charge includes 41 million related to the 240 million reversal of the Liberty Media litigation excluding this 41 million, adjusted net income would have been about 3.1%. On the next slide, we have the consolidated P&L under IFRS rules. You can see that in 2016 first quarter, both EBIT and earnings attributable to Vivendi shareholders were significantly positively impacted by two major items, which are gathered in the line, other income and charges, and were 576 million capital gain relating to Activision Blizzard, and €214 million for reversal of reserve of the Liberty Media litigation, which are included in this line, and which explains the increased results on the consolidated P&L. Slide 12, we have the balance sheet on this slide, and the major changes over this quarter were, as you can see, the decrease in financial investments, mostly related to the sale of the remaining stake in Activision Blizzard as well as the settlement of the Liberty Media litigations, and €972 [indiscernible] million deposit was returned to Vivendi. And the total of €5.9 billion of financial investment is mostly comprised of 3.7 million for Telecom Italia, 0.5 million Telefonica, 0.5 billion for Ubisoft, 0.2 billion for Gameloft, and 0.3 billion for Banijay Group. The decrease that you see in the net cash position, mainly related to the payment of €1 per share interim dividend at the beginning of February. With respect to equity and liabilities, we can highlight three main items, the acquisition of treasury shares which have deducted, which are deducted from the consolidated equity; second is the payment of the interim dividend, which was accrued as a liability in the working capital, and the impact of the settlement of the Liberty Media litigation and provision. In slide 13, on the evolution of the net cash, the main movements were the sale, as you see, of the remaining stake in Activision Blizzard, as well as the settlement of the Liberty Media litigation; the payment of the interim dividend of €1.3 billion in February; acquisitions of Vivendi shares for €1.1 billion over the quarter; and cash outflows for investments with the increase of our stake in Telecom Italia, the acquisition of 26% in Banijay Group, as well as the subscription of €190 million in bonds for Banijay Group, and the slight increase in our Ubisoft stage. Since the end of Q1, the major change in our net cash position was in the from the payment of €1 per share dividend on April 28. So, thank you for your listening. We are now answering your question. I have to say that we will not accept any question regarding Gameloft.

[Operator Instructions] And we take the first question from Charles Bedouelle of Exane. Please go ahead.

Thank you for taking the question. A few questions. The first one is, you provided a very helpful kind of waterfall chart of the costs to come at Canal France. Can you tell us a little bit, what do you think this will mean for the, I would say, Canal Group kind of profits, going into the end of the year? And also, where do you think your customer trends will end up by the end of the year, pre any new initiative beIN, et cetera? That's the first question. The second question is on music. You talked about the issue around the release schedule. Can you tell us a little bit how you see Q2 and maybe the rest of the year, and what to expect here? And also on music, the margins are not necessarily very easy to predict for outsiders, so can you give us a little bit of a, I don't know, some drivers, and how to think about how the margin will progress for the rest of the year, and how this relates to maybe the revenue trends? Thanks.

Well, to answer your question on Canal+, obviously we have given some details on what could be increase in costs for Canal+ channels in France for the rest of the year, and this will impact the global results for, of Canal+ Group, obviously. But, as we also have written this slide, it's before any positive or other impacts of that possible agreement on beIN Sports, and for that agreement we are awaiting the decision of the competition authority. And also, on the other hand, we have begin to work and to launch some savings at Canal+, and this will probably lead to some positive impact in the rest of the year. But we wanted to show that the €59 million of losses at the level of the channels of Canal+ in France were quite positive, I would say, in the first quarter, in comparison to what is expected of the whole year if nothing is done to change this trend in the coming quarters. As you, for the music, and to answer your second question, you have some information in the appendix of the presentation which are especially the good upcoming releases which are expected in the second part of the year quarter, and this next quarter and the second quarter of the year, with mainly Drake, Beach Boys, Emile Sande, Florent Pagny. We have several releases which are expecting [indiscernible]. We had timing issues in terms of releases in the first quarter, and we are still quite confident for the rest of the year. To answer on the question on margin on business, we continue to see a positive momentum of this business, clearly driven by the growth in streaming and subscriptions; but nobody knows really what is the speed of the decline in downloads. We have seen the first quarter a big increase in this decrease of 32%. So, this will this is an important figure to look to the final growth for the whole year.

And maybe just, a very quick follow-up, if I may. Did I understand well that you said beIN impact could have a positive impact on the profits -- on the margin this year? And the follow-up question was, can you give us just a little bit of color on what to expect in terms of impact from Mediaset if it were to close? I understand it's not done yet, but just to give us a -- just an idea of what this will mean for your business, maybe in '16, and more importantly in '17.

No, no. I have said the positive or other, which mean positive or negative. And it's not -- it was not relative to beIN Sports, but globally to beIN Sport and other [indiscernible] programs that we could launch at Canal+. So, I have not said that beIN Sport would be -- would have a positive impact in 2016 and 2017.

Okay.

With regard to the situation on Mediaset, as you fairly mention its work in progress. Strategically, it fits all what we've said in the past. We are currently working and getting all the process in terms of due diligence, and more to come in due time. So, too early to be able to give you some indication. Not to add to my answer, to point that we don't yet know what's going to be the date for a potential closing, because it's all dependent on the process of the competition authority in Italy.

Thank you. We'll take the next question from Lisa Yang of Goldman Sachs. Please go ahead.

My first question is on Universal. I mean, you managed to grow your streaming revenue by 60% even with very light schedule. I understand that streaming is maybe a bit less dependent on the hits compared to download and physical. So, just wondering, is that the kind of trend we should expect as well for the rest of the year -- about kind of 60% growth in streaming? Secondly, can you elaborate a bit more on the cost efficiency measures that you just mentioned, that you also mention in the press release, that you have already put in place? Was there already any impact in Q1? And what kind of level of magnitude should we expect for the full year, I guess independently of what happens with beIN Sports? Can you also talk about the other, I would say, measures you could take within the Canal+ Group in terms of maybe selling some loss making assets? I know that the press has mentioned things like Itele. And the last question is on your…

Hold on-hold on, we're going to spend the night together. Okay, sorry. Okay, go on.

Sorry. This is the last one, is, what are your thoughts on, I would say, future ordinary dividends? I know that in '17 you're still hesitating whether you're going to pay the 1.3 billion as dividend or buyback, but what are your thoughts on the ongoing ordinary dividend beyond that?

So, I'll take the first question as regard to the momentum on the music. Yes, this is an industry which is hit-driven. And when you see the evolution, that's the point I made over the past quarters, as regard to the forecasting of our business. It's impossible to measure both in terms of absolute terms and relative to our competitors, because we've got some external impact which have on a quarterly basis an impact on our sales, revenues and margins. So, I mean, we are number one in the world. Our job is to be able to scout the right talent and to create the kind of a big blockbuster. It's been quite not as bullish as we would expect during the first quarter, but we've got a compelling plan for the remaining part of the year. And I was in L.A. last week with some of my colleagues and we worked with our great team at Universal Music Group, and I must tell you that what's in the pipeline is very compelling. So, expect good news. But in the momentum in the business, it's important to see that we are benefiting from two main things as regard to the streaming, which is not only the growth of number of clients using a streaming service, on the one hand, but it also the split between ad-funded and subscription based clients. And as you know, the latter is very much more added value in terms of money we're making, compared to the former. And what we see is that we see a momentum in moving in terms of proportion from the ad-funded more and more to the subscription type of model. Which is good both in terms of the numbers, we're making and also in terms of margin. So, we've got this trend of streaming, managing the decline of downloading. Some markets still solid as regard to the proportion of physical distribution. And as regard to the hit-driven profile of that part of the business, I'm expecting that you're going to get a very compelling summer, because things in the pipe are very very very good.

Well, to answer your other question on Canal+ and the cost efficiency program [indiscernible] we are working on several initiative in that area and we will probably be able to announce some new programs or, new programs for the end of this year in the coming weeks. This had come from some different programs and some programs that you, we are used to see, that we will not see [indiscernible] differently in the future. For, and we have made some savings on the Cannes Festival, for example, that you probably have heard. But we are sending less people to Cannes at, it was in the past, and we have some, done some savings at that level, which are quite limited in total amount for Canal+ Group, but which show the trend of our work in terms of cost at Canal+. You are referring us to the separation and possible sales of assets making losses, and probably you are referring to Italy, because there are some rumors of possible sale of Italy. In fact, we have absolutely no process of sale of Italy now, and this is only [indiscernible]. Your last question was referring the dividend of 2017, and we have not taken any decision regarding that today. We are committed to return 1.3 billion to shareholders, and we'll see in the coming months. I would say if it will be through a dividend or through additional buyback.

Let me, if you will allow me, to add something as regard to the disposal and the situation, like the situation of Italy. As you know, and we said that last November, and reiterated our point as regard to our February 2015 results communication, we are not there to plan and to manage long-term losses. We entered into a reorganization and restructuration of the Canal+ pay-TV operations and we are doing that with determination and absolutely commitment to get back, in any shape or form, to a positive result. I would say that, as regard to Italy, and because we are transforming the business it is triggering many rumors, or mainly speculation, around some part of the business, Italy being one among the others. But as regard to Italy, for sure there is no proactive momentum for us to dispose of that asset. But at the same time, believe me, we are not in a position to maintain long term loss making operation on that asset. So, this is part of what we're currently thinking and preparing for getting a Company plan for recovery of this asset.

Thank you. We will now move to Adrien de Saint Hilaire from Morgan Stanley.Please go ahead.

I'll try and limit myself to a couple of questions. So, first of all, on Canal+, I think you mentioned during the AGM that the losses would worsen to €400 million if nothing is done. Given the Q1 developments, can you tell us exactly where we should look for? The second question is about UMG. You seem to have lost a bit of market share in 2015 and in Q1 you seem to be underperforming the other players in the markets. Why is that, and would you expect that to reverse? And the last question is about your deal in Italy. Is the end game for you to compete head to head with Sky, or could you consider consolidating the markets one way or the other, in Italy?

To answer shortly your question for Canal+, clearly, look, you can see in the slide number 9, number 8, sorry, you can see that we have done €59 million of losses for the Canal+ channel in France in the first quarter. And as a waterfall that you have below that, explaining what could be the additional impact in the full year, which leads in fact to €400 million of losses in Canal+ channel in France if nothing specifically is done in terms of cost savings. For UMG, it's mainly due to the timing of releases and the market share in the first quarter of 2016, I would say. For Sky in Italy, would you answer?

With, con piacere. Grazie mille. Allora, our position on Mediaset is really, as we said, when we got into the our market through our position within Telecom Italia, it's really to seize the opportunity that may arise, and then provide us with the opportunity to build this Latin group. Bearing in mind that this alliance with Mediaset is an alliance which is both in Italy but also the knock on impact as regard to Spain. And as regard to Mediaset Premium, I mean, we are there to build a media position in southern Europe for all the reasons that we described in the past. So, our ambition is to be able to create the story of a successful and profit making operation through Mediaset Premium. And we've got some plan as regard to that. But the plan, just to get through a merger for the time being, is a plan that would not be aligned with our initial ambition. So, currently, what we're doing is to work with our new partner and, to make the right decision to create the opportunity which will provide us, as soon as the transaction is completed, to be able to hit the ground and run, and to be able to deliver on that story. Then, as we know, in our environments there are many, many changes, and cycles are very short. And we'll keep all the options open. But the first and foremost objective is to make Vivendi, the new Vivendi a very solid player in the south European environment, with kind of the Latin profile that we want to create as being part of the USP of Vivendi in our competitive environment.

Okay. Many thanks, Arnaud. If I can just ask one follow up on Canal+.

Yes. I owe you one.

Thank you, Arnaud. About sort of free-to-air window, you touched on that. What is your view on the free-to-air window of Canal+? Could you consider completely shut it down and make Canal+ fully a paid channel? Because right now it's the only, I think, pay TV channel in the world which has a free to air window which is that big.

Thank you very much to mention that, Adrien. And you're absolutely right, and this is something that we have in our mind. As you can imagine, we are working on different plan, and more to come soon. But that's true to say, that currently Canal+ has improved kind of a unique worldwide position. And if you pay peanuts, you get monkeys; but when you pay, it's, I mean, let's take the L'Oreal type of copy strategy, which is based on this headline, which, because I'm worth it. So, if you want people to pay for, you've got to deliver a product that is going to be aligned with the money you pay. So, it is the profile of the offer; it is the content of the offer; it is the unique user experience that you provide. But it's fair to say that this balance between free to air and pay TV and let's, as you know, remember that Groupe Canal, it is pay TV in France, but we've got also a free-to-air operation with very great momentum at D8 and D17. So strategically thinking, the challenge we're faced with, the need to reinvent the new Canal and to prepare for a Canal with a growing and, profit profile, is, provide us with a kind of exercise that we are on. And this is a subject we are tackling with. What is going to be the outcome? Too early to say; but watch this space. More to come before summer.

Thank you. We’ll take the next question from Julien Roch of Barclays. Please go ahead.

First question is follow up on a couple of previous question on Canal+. At the moment it's very hard to forecast. You were helpful in giving us the waterfall on page 8. But if you don't give us an idea of the potential cost efficiency, then it's impossible. So, are we talking about, €10 million of cost savings this year? €50 million? €100 million? That's my first question. The second is on the restructuring at Canal+. This seemed to have gone down in Q1, which is a bit weird as you are restructuring. So, can we have an idea of the restructuring cost for 2016? That's my second question. The third question, a quick one, can we get CanalPlay subs at the end of Q1? And in the fourth one, any exceptional in Universal Music, either revenue or operating profit? Usually you have some. Warner had about 10 million from Pandora and Sirius in Q1. You have a higher market share, you should have more than that. So, if you could give us the exceptional in UMG, that would be great. Merci.

Well, for to answer the first question, the cost efficiency program in Canal+, it's too early to give you figures on that, and we will do it later this year. We're working on that. So, the magnitude of the cost savings is difficult to predict precisely today. For the restructuring cost, I did not understand the question.

How much at Canal+ this year? An indication of the restructuring costs this year.

You know it's classed as restructuring that cost efficiency and also we had some and we booked some restructuring costs last year.

In Q4.

In Q3 and Q4. Which was mostly related to some, well, some manager of the Company, leaving the Company. But it's not a restructuring plan. It's a transformation plan, with some cost efficiency.

Okay. And Canal+ and exceptional at UMG?

On UMG, with regard to one-time item, there were, we had no one time item last year in Q1. So, you refer to two.

Q1 this year. Because Warner had about 10 million from Pandora and Sirius, so I'd think you have at least 15 million -- being bigger.

No. Don't forget that we booked last year in Q2 and Q4, and this was highlighted in our financials last year, and also maybe there are some timing difference in term of accruing the impact on this litigation. But the first one was accrued in our revenue in Q2 last year and the second one in Q4 last year. And for the total, that was a total amount of €56 million of revenue in 2015.

And CanalPlay?

Can you repeat your question? Sorry.

The number of subscribers at CanalPlay at the end of Q1.

You have it in the appendix.

Sorry. Yes.

Thank you. Will take the next question from Laurie Davison of Deutsche Bank. Please go ahead.

You'll be welcome to hear it's only one question. As you mentioned that programming phasing benefited you or, you had a positive timing effect on programming at Canal+ in first quarter. Can you quantify that impact? Thanks.

I think it's 20 million in the rest of the year, but this quarter in fact, many programming in films. So we have to light first quarter, I would say in films [Indiscernible] so the impact is 20 million.

Sorry. Was that 20 million benefit that you had in the first quarter?

Yes.

Thank you. Will now move to Tom Singlehurst of Citi. Please go ahead.

Thank you for the question. I'm probably at risk of just coming across as being a bit dim, because I still am a little bit confused about both the Canal+ channels loss number and how it's calculated. The €59 million of loss implies that the rest of the business is making a profit of €220 million, and I just it sort of suggests that something's making a lot of money, and I can't work out exactly what it is. So, is there any way you could just give us exactly how it's calculated; or, even better, the revenues for the Canal+ channels? Or is it a sort of theoretical number that doesn't that's sort of just based on the direct revenue from the channel, and the direct cost? Any color you can give on that would be very useful. Thank you very much.

Okay. The well, obviously the Canal+ channel in France are linked to the direct costs, which are for this part of our business, and probably and as you probably know, the sports right, mainly. It means also that we have other activities at Canal+ Group which are making profits, and we are very satisfied with the profitability of both the international activities, especially in Africa, the activities this facility in free-to-air and Studiocanal, and also in CanalSat, which are not included in the figures of Canal+ channels in France.

Perfect. And just to be clear, that I presume there is content that's being shown on the Canal+ channels that are then leveraged in the international operations, and indeed potentially even on the CanalSat platform, that you're exploiting, and making a very high margin.

No, not really. Because in the Canal+ channel we have sports rights which are important part of the cost. We have film costs also, which are an also important part of the cost, and in the other parts of Canal+ we are distributing other channels, I would say.

Perfect. And I have one very quick follow up on the music side. Music publishing flat, or broadly flat. Can you just talk about the different trends within on the music publishing side? Is that a function of the decline in mechanical royalties on the back of the negative performance in physical and download to own?

We had in fact growth in the U.S. in this quarter, which has been offset by some declines which are more timing related declines in Europe, is what we can say. So, we are satisfied with the publishing and for the forecast [indiscernible].

Thank you. Will take the next question from Conor O'Shea of Kepler Cheuvreux. Please go ahead. Conor O'Shea: Just to follow up on Canal+ again apologies but in terms of the activities within the Canal+ Group, you've obviously highlighted, very helpfully the expected movement in Canal+ France to profitability. But I'm just wondering, are there any other activities within the Canal+ Group in CanalSat, for example, where profitability is also likely to decline year-on-year to any significant extent in 2016 because of loss of subscribers or other factors? And second question, in terms of your international pay-TV business in Africa, I think from the appendices you suggest subscribers are up by I think its one-third year on year, yet revenue growth is only about 13%. Are there currency factors explaining that, or is it in fact the ARPU declining? Have you had to reduce prices a little bit in Africa to bring forth more demand? And then the last question, just on Universal Music, 20 million restructuring costs in the first quarter, three times more than Q1 '15. At this stage, would you expect restructuring costs for the full year to be above those of 2015?

To answer your last question, no, we do not expect that. The restructuring in the first quarter are mainly due to some specific restructuring charges that have been accounted and decided in the first quarter. For Africa and for the subscriber base in Africa, it can have some movement from one quarter to the other. It depends also of, for example, sports events in Africa. Last year we had the CAN, the African championship. So, we connected -- some people could at that time subscribe and then for this specific event, and unsubscribe in the following months. So in the [indiscernible] as we are working Canal+ in Africa in the French speaking Sub-Saharan Africa, the currency which is used is the [indiscernible] [franc], which is linked to the euro. To answer your first question on the [indiscernible] of other activities, I would say that probably we can have some good impact in some businesses, some more negative ones in others. But we wanted to highlight, I would say, the question of the [indiscernible] of Canal+ channels in France. But as you see, in the globality of the Group, we are making good profit for the rest of the Group. Conor O'Shea: So, for the rest of the activities, at this stage you would not expect a material change overall, year on year, for '16 versus '15. So that, at this stage, the main movement would be in Canal+ France.

Sure.

We'll take the next question from Ian Whittaker of Liberum. Please go ahead.

Just three questions. Just looking at the sort of appendices and Canal+, it looks as though your churn's gone up, but also your ARPU has gone up, which is I guess a little bit of an unusual situation, sort of, from a pay-TV side. Sort of, is there a deliberate policy there of churning off lower-paid customers, or, sort of, is there any other reason for the explanation why the ARPU has gone up, given the sort of issues you're facing at Canal+ France? The second thing is just, coming back to music, there's a lot of -- there's quite a few articles in the trade press, talking that you and the other music majors are about to enter into talks with YouTube. Now, obviously, you want more money from them. But, sort of, could you share with us your ideas of how exactly you expect to get that money? Because unless YouTube goes to a predominantly subscription model, the assumption would be -- is that you'd want a greater cut of their advertising revenues. So, just wondering if you could share some of the thoughts you have on that. And the third one is just helping us really in terms of TI, and how we should account for it as an associate moving forward. Obviously, many of us are media analysts, not telco analysts. And TI is quite a substantial business. So, when we're trying to calculate the influence of TI on the income from associates line, sort of, what are the sort of numbers that we should be thinking about in terms of which slide to take -- to make the calculation from?

Do you want to answer music?

So, in the music, as you can imagine it's a quite sensitive issue. So I can't be more precise as regard to what is going to be the approach as regard to the YouTube situation. We all are aware of the launch of YouTube Red. And as regard to asking more money, I guess that from the content on the site, there is an objective, which is to make money with YouTube. So, at the end of the day, I think that when you're thinking about the supply chain, I guess that there are some thoughts in the different companies, and I don't know what the state is as regard to some of our competitors and colleagues. But as a matter of fact, thinking the kind of -- and finding the right flying speed as regard to YouTube is something that is quite important in the strategic thinking process, as regard to how we interact with our distribution partner. I'm afraid I can't dwell any more on that subject, but probably more things to come in the foreseeable future.

To answer your other question, the ARPU at Canal+ is not especially new in this quarter to have some increase in ARPU. We can say that probably it's linked to more cross-subscribers and also to less commercial made this quarter in as a trend. To answer your question on Telecom Italia, in fact that we counted as the net result Group share of Telecom Italia, and we take our economic interest. And in fact our economic interest, our shared capital considered as both ordinary shares and selling shares. So, it's something like 15% for Q4 2015, and it will be a little bit higher in Q2. It will be 17% of economic interest in Telecom Italia in Q2 this year. And we'll take the net result Group share of Telecom Italia of the first quarter in the second quarter of Vivendi.

Can I just ask a quick follow up, just on regards to the first question, just on YouTube? I understand it's sensitive, so you can't say much. Just in terms of timing, I mean, is this a deal that you will expect to complete in or a new agreement, rather that you would expect to sign in 2016 or you think it could drag on into 2017?

I can't be more precise on that subject, Ian. I'm sorry.

Thank you. We'll take next question from Giasone Salati of Macquarie. Please go ahead.

First question is on music, please. Do you expect Vivendi to maintain a 2015 market share in 2016 overall, including the summer hits you mentioned? The second question is on Spain. You mentioned a number of times Spain and possibly Telefonica. Should we expect Canal+ to expand pay-TV directly in Spain, maybe taking assets from Telefonica? And related to that smaller sale of TI shares, I guess they're just adjusting, it's nothing to be read through. And lastly if you have any more clarity to add on Ubisoft, please?

So as regard to Spain, we got really good relationship with Telefonica. We are starting collaboration in South America, and Spain is part of our plan for this kind of a Latin profile. So, as regard to what we may be doing, if our friends in Spain think that we could be of any added value in what they're currently doing post the acquisition of Sogecable and Digital Plus, we'd be very happy to see whether there are going to be some things to be done. But, if not, nevertheless, they're still on the ground with kind of collaboration between the two companies. We are currently preparing content for the different channel of distribution, and I guess that I'm expecting some greater momentum in the level of business and initiatives between Vivendi, slash, Canal+, slash, Universal Music Group and Telefonica. As regard to your question on Telecom Italia, it's based on the mechanical adjustment. That's it. And as regard to your…

You have a question regarding the market share for Universal Music. And in fact we had some very small decline in the market share in 2015. Listen, one point, globally speaking, we're confident in the possibility of UMG to preserve its market share for this industry, depending from one quarter to the other of the [indiscernible] which are done by the [indiscernible] and the others. For Ubisoft, we have nothing more to say or to add on that we have previously given to the market in our last public statement regarding the sort of 15%, and it's been quite clearly explained that we intend to launch an offer on Ubisoft in the next 6 months, after the regulation ask us that we were expecting some changes at the Board at Ubisoft's next shareholders meeting to reflect our position in the shareholding structure.

And just as a follow-up, when you speak about music market share, are you saying that 2016 should see the same lower market share of 2015, or are you saying that you are hoping to go back to 2014 level of market share globally? Like-for-like.

Well, in fact, if you look at figures from music [indiscernible], our market share in 2015 was almost flat compared to 2014, 33.5% compared with 34.1%, so that was a very small decline. And so that will happen exactly, of course, it depends on however [indiscernible] also depend on the release schedule of other music companies. And so we have some visibility but it's extremely difficult to predict.

Thank you. We'll now move to Louis Citroen of Arete Research. Please go ahead.

I have only one, and it's about music. We've seen an increase in the past few months of siloing of music release so, with artists choosing to release their new albums over one specific streaming platform or another. What's your position on this trend, and do you see a risk that it might hurt streaming growth at some point if you can't find all the music you expect to find on the platform you're subscribing to? Thank you very much.

Well I must say that Universal Music Group works closely with all our artists to develop new and innovative ways, in fact, to deliver music to fans. But, as a matter of fact, it's not unusual for certain albums to have specially designed the release strategies, that involve various digital services and retail partners. Some of those are designed to raise awareness of the album that will lead to sales overtime. However, it wouldn't be appropriate to discuss release strategy of any specific artist. There have been some special initiatives. Those are part of the kind of a new blend of approach to the markets. And to answer to your final question, no, we don't see that as being a threat as regard to the momentum we see in the streaming trend.

Okay. Thank you very much.

Thank you. And now over to Stephane.

Will take the last question from Stephane Beyazian of Raymond James. Please go ahead.

Question regarding Fnac. Can you put more color on the benefits that you could expect from your involvement in Fnac at the time of its Darty bid? And marginally speaking, you've been adding some equity in distribution channels, and if I dare to include telecoms in the as distribution channel. So, I would just understand what I should see these stakes just as opportunistic? They happen in a very specific context? Or, actually, if this is something that could be actually quite fundamental in your strategy going forward, and therefore that you could further expand. Thank you.

Well Stephane, thank you very much for this question, because it provides me with the opportunity just to reiterate the approach we're having. Vivendi is a content and media player, but we do think that in our competitive environment distribution is absolutely key to our success, and we need to build a strong scale of distribution and reach to a special end consumer to create the right environment for us to invest massively in quality of content, and then to be able to produce must have content in any shape or form. I mean, when you see our competitors, be it the streaming platforms, be it the Netflix of the world, be it the initiative of Amazon, be it some other more traditional competitors, this is the global environment we are competing against. And the rule of the games are changing. So, yes, we are building access to distribution. Yes, Fnac is part of this approach. So, it's not we're not investing we're not allocating capital for financial reasons. We are, first and foremost, allocating capital to be able to build distribution, access, and a unique approach to be able to reach the most the greater possible and customer base. And Fnac and you were referring to comparison to the telco moves we did is a path among others. So, we think this is a strategic investment, which is also triggered by a wide and potential we see as regards to the performance of the company on its own right. You may recall that we made this, again, announcement before the results of the bid process that Fnac was with Darty. And what we want is to be able to see the opportunity in terms of creating great collaborations and relationship, be it in the brick and mortar side of the business and the click and mortar, and some other initiative they have in downloading, streaming in music, in video, and also they've got some plan for international expansion. So, this operation is subject to a shareholder meeting that is going to be held end of May, and which is going to be the occasion to give more flesh on the bones as regards to collaborations and tangible elements as regard to these moves. Hope that I did cover your question.

You did. Thank you.

Well, ladies and gentlemen, I think that we have now finished this session. And very much look forward for the next one. And you have a very great evening. Thank you for attention.

Thank you very much, and good evening, everybody.

Thank you.