Laurent Mairot - EVP, Head of Corporate Development and Investor Relations Arnaud de Puyfontaine - Chairman & Chief Executive Officer Hervé Philippe - Chief Financial Officer

Charles Bedouelle - Exane Julien Roch - Barclays Thomas Singlehurst - Citi Louis Citroen - Arete Research Lisa Yang - Goldman Sachs Sophie Bell - Credit Suisse Charles Bedouelle - Exane Laurie Davison - Deutsche Bank Conor O'Shea - Kepler Cheuvreux

Good day. And welcome to the Vivendi’s Third Quarter 2017 Revenues and Earnings Presentation Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Laurent Mairot, Executive Vice President, Head of Corporate Development and Investor Relations. Please go ahead, sir.

Good evening, ladies and gentlemen. Welcome, and thank you for joining us for Vivendi's first nine months 2017 earnings. Your hosts for today's call are Arnaud de Puyfontaine, Chairman of the Management Board and Chief Executive Officer and Hervé 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 found at the end of this presentation on Page 38. The first nine months 2017 financial report will be available on our Web site after the end of the call. On our Web site, you will 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. And now, I have the pleasure of introducing the Chairman of our Management Board and Chief Executive Officer, Arnaud de Puyfontaine.

Thank you, Laurent. Welcome, everyone and thank you for joining us today. I am very happy to say that Vivendi has delivered strong results, both for the third quarter and over the first nine months of 2017. This fine performance has been fueled by all our businesses. I would also like to point out here the immediate accretive contribution from Havas to our results. This add had a positive impact of €34 million on Vivendi's EBITDA in Q3. Within this environment, we can confirm that Vivendi will achieve its 2017 forecast. Excluding Havas revenues are expected to increase by more than 5% and EBITDA by around 25%. In music, Universal Music Group has confirmed its dynamic growth over the last nine months, largely driven by the significant increase in subscription and streaming revenues and continuous investment in talent. We feel comfortable to announce today that UMG revenues should go by around 10% and EBITDA by close 20% into 2017. In TV, the Canal+ transformation plan in France has positively impacted the operating Q3 results. Our French pay-TV activities are gradually recovering. And as announced, we are seeing sequential improvements quarter-after-quarter. For the first time since early 2015, the retail subscriber base increased in Q3 with both higher recruitments and lower cancellations. The quality and flexibility of the new offers is definitely paying off. As a result, we confirm Canal+ Group's previously announced EBITDA target of some €350 million for 2017. As we already know, the results for October, we are confident for Q4. The end of the year offers promising perspectives with several successful releases. Studio Canal has registered with Paddington 2, its biggest opening weekend at the UK Box Office, and looks sets to do the same across the globe. In music, the new Taylor Swift and Sam Smith releases are already huge hits. After more than two years laying the foundations, we can certainly say that 2017 will definitely have been a year of growth for Vivendi. As you know, we have a long term approach, that's why we are investing in value creating projects and in businesses of the future, notably through our African Cinema and entertainment venues CanalOlympia, the live and festival businesses with Olympia Production, our platform Dailymotion, Vivendi content and Group Vivendi Africa. This is also true of our long-term investment in Telecom Italia. I am happy to say that things are definitely falling into place there, both in terms of developments and structure. We are very confident that our investment in Italy and Telecom Italia will reap rewards. Last but not least, I would like to say a few words on video games. With the current and realized capital gain of more than €1 billion on Ubisoft shareholding, our investments in video games are creating significant value. Gaming is today one of the most attractive segments in the entertainment industry, which perfectly fits our strategy. We are delighted with our investment in Gameloft, and we confirm our intension to continue our development in this sector. Vivendi, however, does not intend to launch the public tender offer on Ubisoft nor to acquire the control of the Company in the coming six months. Furthermore, it is not seeking representation on Ubisoft’s Board of Director. That’s all from me. To sum up, we, on the Vivendi Management Board, are happy with our progress. Thank you. And I will now hand over to Hervé Philippe. Thank you. Hervé Philippe: Thank you, Arnaud. And good evening to all of you. It’s my pleasure today to present to you our results for the first nine months of the year, which are in line with our previously issued guidance for the full year. Let me start with slide five, which is a scope of consolidation on main currencies. Before going through the results, I'd like to remind you the changes in the scope of consolidation and the main currencies of the Group. In terms of the scope of consolidation, the main differences compared to last year are, the consolidation of Gameloft since the end of June 2016 and Havas, early July this year. Details on Havas acquisition are available in note two of the financial statements, which will be available on our Web site following this call. With respect to Telecom Italia accounted for as an equity affiliate, details are available in notes two and seven of the financial statements. In Q3, the trends in currency exchange rates, mainly the U.S. dollar and the Japanese yen, completely reversed compared to those observed in H1. The euro realized against the U.S. dollar, the GBP and the Japanese yen by 5.5%, 7% and 13.4% respectively. The negative impacts from changes in currency values are expected to continue in the fourth quarter if the rates remain at their current levels. Note that the impact of these currency fluctuations are mostly just conversion related, mainly at the level of revenues. Come to slide six, we have a summary of the key financial metrics for the third quarter of 2017. As we have been announcing over the year, the Group is now poised for growth. In Q3, revenues grew 2.7% organically year-on-year, reaching €3,184 million. As expected with the significant improvement at Canal+, EBITDA was down by only 5.2% organically compared to a decline of 11% over the first half of the year. In IFRS, EBIT amounted to €310 million, up 4.8% compared to Q3 2016. At €273 million, adjusted net income was down 19.6% due mainly to lower tax rate in Q3 2016 in U.S. Finally, following the acquisition of Havas, the financial debt net rose to €3.2 billion at the end of September 2017. On slide seven, you can see the trends in terms of profitability, which have been slightly different from one quarter to the other. We are seeing significant sequential improvement between H1 and Q3 for UMG and Canal+. Our Canal+ trends are very encouraging, especially in terms of profitability. Canal+ results improved quarter-after-quarter. In Q3, Canal+ revenues were flat organically and EBITDA improved 11%, mainly as a consequence of the recovery of the pay-TV activity in France. As regard to UMG, Q3 results were strong again but were negatively impacted by a tough comparable basis. As you can see on this slide number eight, in the UMG we guided a solid growth in Q3. Streaming and subscription revenues continued to grow at fast pace over the quarter. In Q3, streaming and subscription revenues represented close to 50% of Universal Music's recorded revenue on more than three quarters of its digital revenues. It is worth highlighting that Universal Music face a tough comparable quarter as Q3, 2016 revenues up 11.2%, which were by far the strongest growth recorded for many years. Q3 2016 benefitted also from the recognition of two positive one-time items. Excluding these one-time items, recorded revenue grew 9.5% organically in Q3 2017, EBITDA increased by 6.2% and margins were nearly flat. Looking forward to the fourth quarter, even the transition to streaming can change the seasonality. We are excited about the strong release schedule, including in particular, new albums from Taylor Swift released on November 10th with already more than 1 million copies, which is number one in 111 countries and on iTunes. We'll have also Sam Smith, which was number one in the U.S. and UK when released, and we will have also later YouTube. At part of Arnaud mentioned earlier, we expect Universal Music revenues to grow by around 10% and EBITDA by close to 20% for the full year. On slide nine, a few comments on the nine months cumulated results for Universal Music Group. The first nine months showed impressive transition in the music industry coupled with the strong release schedule. Overall, Universal Music's revenues were up 10.9% organically. Solid releases, mainly during the first half of the year and the continued growth in streaming and subscription revenues, led to organic growth in recorded music of 12.8%, excluding the one-time items recognized in 2016, and despite a decline in physical sales and downloads. During the first nine months of 2017, Universal Music benefited from the strong performances of releases from Drake, Kendrick Lamar, The Beatles and The Weekend. Over the nine months, streaming and subscription revenues were growing fast, plus 41%, while download revenues declined by 18% and physical sales by just 6%. Music publishing revenues were up 9.6% and benefited from the positive momentum of music consumption, thanks to subscription and streaming. Merchandising and other revenues, which make up a small portion of the Universal Music's total revenues, declined by 2.8% due to lower touring activities than in 2016. Income from operation was up 20.9% organically, mainly benefitting from the revenues growth and EBITDA grew by 25.5%. Moving to Canal+ Group on slide 10. As already mentioned earlier this year, we have been seeing sequential improvement in Canal+ results since the beginning of the year, mainly from -- to the transformation plan initiative last year for the pay-TV activity in France, as well as the continued growth, good performance of the international activities. The two charts on the slide 10 illustrate very well the recovery of Canal+ Group. After posting year-over-year revenue declines of 3.5% and 1.3% in Q1 and Q2 respectively, in Q3 revenues turned flat organically. The recovery of EBITDA is even more significant with a sharp increase of 11% year-over-year in the third quarter of 2017. The objective of approximately €350 million EBITDA for the year 2017 should be mainly achieved, thanks to a strong improvement of the French Pay-TV activities as a consequence of the contribution of the wholesale deals on the cost optimization plan, as well as increasing contribution of international activities and StudioCanal. In addition to those good financial trends, we can draw attention to the early recovery of the pay-TV activity in France. We commented over the past quarter that we were confident that this recovery was in progress, and which now is clearly visible. For the first time since the Q4 2014, the retail subscriber base increased in Q3 with a net gain of 1,000 subscribers. These achievements are due to good commercial performances and improving rate additions. On slide 11, let me first start saying that these caveats, which are on the slide 11, are only presented for illustrative purposes, and will not be disclosed necessarily each quarter in the future. But in order to illustrate the good commercial trend and the improvement in retention, we have presented in this slide the gross-adds on the cancellations by quarter. As regard to the growth, as you can see the upper left hand side of the slide. The commercial performance was strong in the first nine months of the year, especially in Q3, which concentrated into a 43% increase in recruitments of individual retail subscribers with commitment as highlighted during the H1 earning presentation call. The Q2 lower performance year-over-year was only related to a tough comparable basis as in Q2 2016 there was Euro Championship. On retention, in the upper right hand side of the slide, the sequential improvement quarter-over-quarter is even clearer. Following stabilization in Q2 the number of cancellations dropped by 13% in Q3. We should see further improvement in the coming quarters, given that most of the new subscribers subscribe now for 24 months. At the bottom of the page, you can see that Canal+ France has now more than 8 million clients, thanks to positive response on its retail subscriber base and the strong contribution from wholesale product. Turning to slide number 12, on the Canal+ Group’s nine months results. Over the first nine months of 2017, total revenues were down 1.6% organically with a decline at pay-TV in France, partially offset by the continued growth, good performance of international operation, mainly in Africa. The decline of pay-TV mainly in France is slowing down as we have seen and revenues dropped by only 2% during the third quarter against 5.3% during the first half. International pay-TV revenues increased by 5.9% with almost 20% growth in Africa. The robust growth delivered in Africa derived from our strategy of providing the best content to our subscribers to write off our offer. For example, in July, Canal+ launched A+ Sport, the new channel dedicated to African and international sports. At the end of September, the number of subscriber in Africa stood at 2.8 million, representing a year-over-year increase of around 550,000. Revenues from the free-to-air channels were down 8.9% compared to the first nine months of 2016 due to restructuring at CNEWS, as well as the impact on revenues of the sanctions imposed by, on C8, by the French Broadcasting Authority. StudioCanal's revenue declined by 4.3% compared to the first nine months of 2016 due to weak line up. It should benefit from a stronger one in Q4, particularly with highly anticipated Paddington 2, which was released last Friday in the UK, and was very well received from audience and critics. In the UK, the movie generated more than £8 million during the opening weekend, representing the biggest opening weekend at the box office for StudioCanal movie. In addition, in France, three of StudioCanal's latest movies released are performing very well. It was one [indiscernible] recognition here have crossed to 1 million tickets sold [indiscernible] [Zailus] recorded a strong start for its first week. Regarding income from operations, the recovery is well underway after a very low Q1, Q3 was slightly up and Q3 showed strong increase of 21% year-over-year. Finally, in nine months 2017, restructuring charges amounted to €35 million compared to €16 million in the first nine months of 2016. As already emphasized, we are experiencing a sequential improvement in Canal+ Group’s financial performance, which should continue for the rest of the year and we expect to achieve an EBITDA of approximately €350 million. Now, turning to slide 13, and to Havas. Vivendi has fully consolidated Havas since July 3rd, so its results are included in Vivendi's accounts for the third quarter only. With respect to operating performance, Havas returned to growth in Q3. Revenues were up slightly, plus 0.1% organically, during the third quarter, reaching €525 million. Looking at the performances by geographic region, it is worth mentioning that the French agencies are performing very well in creation and media, with revenue growing organically by 2.6%. Havas also grew quite stronger in North America, plus 2.9% and in Asia-Pacific and Africa, plus 8.4%. However, performances in Europe, outside of France and mainly in the UK, were in decline in the Q3. The amount of Havas income from operation included in Vivendi's accounts was €44 million for its first quarter of consolidation. On slide 14, you can see that looking at Havas cumulative performance against its peers, Havas really outperformed its European competitors even was still beyond the U.S. groups, which in fact benefited of the growth under which of the American markets. Now turning to slide 15 and to Gameloft. As a reminder, Vivendi has fully consolidated Gameloft since June 29, 2016 and the nine months of 2016 figures only included three months of activity. Gameloft is still performing well with revenues increasing by 3% at constant currency year-over-year, primarily driven by the strong performance of the back catalogue and the substantial improvement in advertising revenues. For the first nine months of 2017, advertising revenues were up 129% year-over-year, reaching 14% of total revenues; and revenues generating through the Apple, Google and Microsoft stores, increased by 8% year-over-year. In October, Gameloft released the Paddington Run, the official game of the second Paddington movie. This project developed around Paddington license validates the compatibility and team work amongst SudioCanal, Gameloft and the copyright group and demonstrates Vivendi’s willingness to continue to increase the number of collaboration between its companies. Slide 16 is for Vivendi Village on new initiatives and you will see that Vivendi Village performed well in terms of revenues, which grew organically by 8.7%, mainly sums to ticketing and MyBestPro. In addition, as mentioned by Arnaud earlier, Vivendi Village is investing to develop new activities, primarily festival from live events, such as CanalOlympia avenues in Africa. Over the first nine months of 2017, Vivendi Village EBITDA was down by $10 million, reflecting $9 million of write-off over the remaining Watchever assets during the third quarter of 2017. Assets are now merged into Dailymotion. As the new initiative approaching segments, revenues were down 32% organically. The new Dailymotion was launched in July, and is already showing good signs of recovery with some encouraging KPIs. The consumption of premium content increased by 60% and the number of videos watched per session grew by 25% since the launch of the new platform. They should translate into financial performance in the future, mainly in 2018. High ARPU and initiatives amounted to a loss of $58 million for the first nine months, reflected the continued investments in the new Dailymotion and in content at Studio+, for example. All those investments will lead to new businesses and profit in the coming years is through such developments that Vivendi’s prepared future growth and profits. Slide 17 is on Corporate, and you see that Corporate incurred IR legal fees, which are mostly related to Italy. Come to slide 18 and the presentation of the full consolidated P&L of the Group. As a result of operational profit of business with this EBITDA stood at $645 million for the first nine months. EBIT under the pure IFRS definition was down $152 million, mainly because of the €240 million one-time item related to the reversal of the reserve related to the Liberty Media litigation, which have been recorded in the first quarter of 2016. EBIT included Vivendi’s shares of Telecom Italia earnings, representing an income from €91 million, which is stable year-on-year. Below EBIT, the first nine months of 2016 were also positively impacted by the capital gain of the sale of our remaining stake in Activision Blizzard for €576 million before taxes, which together with the Liberty Media settlements, largely explain why earnings attributable to Vivendi shareowners was higher in 2016 than in 2017. Adjusted net income, which reflects the operating performance and excludes exceptional amounted to profit of €593 million, representing a 5.2% decrease compared to the same period of last year. Slide 19 is on the consolidated balance sheet. In fact, the most notable changes compared to the end of December of 2016 were related to the initial consolidation of havas. First, the increase in goodwill is mainly due to the consolidation of goodwill related to the acquisition whereas by Havas in the past. Note that in accordance with IFRS, Vivendi did not account for any goodwill related to its own acquisition of Havas, given that the acquisition of Havas by Vivendi is considered as a combination of business under common control. The difference between the acquisition price paid by Vivendi and the value of Havas net assets as of July 03, 2017 was recorded as the deduction from Vivendi’s shareowners’ equity for around €2 billion. The increase in the financial investment is mainly due to the revaluation of our interest, which mainly includes the stakes in Ubisoft [indiscernible] Telefonica on media sales. The increase in working capital was primarily attributable to the consolidation of Havas for around €400 million. And finally, the net debt stood at €3.2 billion at the end of September 2017 against the net cash position at the end of 2016 of €1.1 billion. It front of this financial net debt, it is worth highlighting the market value of our stakes in listed companies amounted to €6.4 billion at the end of September, mainly comprised of Telecom Italia for €2.9 billion, Ubisoft for €1.5 billion, media sales for €1.2 billion, Telefónica for €0.4 billion and [indiscernible] €02 million. The good transition to the evolution of the net cash on page 20. Over the first nine months of 2017, Vivendi’s financial position decreased by €4.3 billion, mainly due to the acquisition of 95% of Havas for €3.9 billion, including the net debt required of €200 million. Also the payment of the dividend to Vivendi’s shareowners for €500 million, as well as the acquisition of approximately €12 million of Vivendi’s shares at the beginning of the year for €200 million. But we haven’t recorded a positive cash flow after interest and taxes of €500, which contributed …after interest and taxes of 500 million which notably benefited from the reimbursement from the French tax authorities of €346 million as settlement of litigation. So thank you for your attention. We now open the floor to your questions.

[Operator Instructions] We will take our first question from Charles Bedouelle with Exane.

So a couple of questions maybe to start on Music, probably the guidance for the full year. Can you tell us if this guidance includes a large amount of restructuring or other elements because you should have a good view now mid November? And also can you detail may be what the performances of downloads was in Q3 just for a month? The second question is on Canal. Can you tell us how the months of November, October may be have been going and there’s been a recent comment in the press and you should kind of stick to that or could upside or downside to this? And may be the third question is on Havas. I understand Havas did not report quarterly results before, but surely you must have a sense of what the profits were last year? And can you may be give us just a rough idea of how the margins have evolved versus last year and where did you see them on the full year basis, that would be very helpful? Thank you very much.

Well first to for the Music. We can say that probably the restructuring will be I would say lower than 2016 as we have seen in the first nine months, we are already with level which is lower than 2016. For download in Q3 I think that it is in the same trends and beginning of the year so it is minus 18% I believe for the Q3 for the decrease in downloads. For Canal+ results in October and November, we have no -- to disclose the figures but we can say that we confirm the trend that we are seeing in the past months. So that’s why we are confident in the recovery of Canal+ especially in France. And for Havas, we can say that obviously Havas didn’t release profitability quarter-by-quarter in the past and but probably we can see that with better growth in the third quarter. See a tough comparison basis in terms of revenue for the fourth quarter that’s for sure, but we expect profitability to be better in the second part of the year than in the first part.

And maybe just a quick follow-up on Italy, I mean there’s been a lot of news flow and very little from your side and media side. So may be can you tell us what do you think is the best outcome of the Italian situation? I mean in a given scenario where would you want to land, what do you want to do, if you can give us just any explanations of where do you think you’re going, that would be very helpful? Thank you very much.

As I said, it's Arnaud de Puyfontaine speaking. We are happy with the progress which is currently happening at Telecom Italia. I'm not going to comment on an extensive news flows, which is something that is getting kind of blurred environment. What I know and what we do see in the progress within Telecom Italia, the appointment of new Chief Executive, the announcement of the joint venture between Canal+ and Telecom Italia. And global we are in environment that from the political environment and the regulatory environment is making progress. So I'm not going to give you any details as regard to what the success look like. But we say that that we had a plan and that Italy was part of our strategy. We're happy about the progress which is currently happening and we are cautiously optimistically as regard to the point that we will be able to deliver good results and the story that it going to match our strategy. And as regard media set because you're mentioning the things as I said that we said in the past, we are currently in mediation which is currently happening. So I'm not going to comment on that.

Our next question comes from Julien Roch with Barclays.

First question is on Canal+ guidance. You gave us revenue growth for Q4 5%, so we can calculate Q4 revenue, thank you. We know that Q4 EBITDA should be 24, so using the difference we can calculate Q4 operating cost, which should be down 10% or €150 million. So your best quarterly performance in regular cost cutting in Q3 has been only 2% down or €22 million. So it's much, much, much better in Q4. Can you give us some color on how you will achieve those Q4 cost savings? Is there some one-offs in there? That's my first question. The second question is there is nothing on the cash in the press release. I know it probably will be in the report, but looking at the two wonderful charts on net debt, it looks like you didn't generate a lot of cash flow in Q3. So if you could comment on that? And my last question is on tax, the headline tax rate was 18.5 in Q3 which was much lower than expected. What happened and can you give us some guidance for Q4 the full year tax?

Well, first we answer question on Canal+ in the Q4. You have to bear in mind that generally in the Q4 so profitability is impacted by the cost of acquiring new subscribers and also the cost of programming which is a very often important and we have in the past very often fourth quarter with lower profitability and the rest of the quarter at Canal+. So there is also possibility to do savings and to increase savings, and are very well in line with what we expect. And this is through that we have a lot to do at Canal+ on the fourth quarter. But we are confident to achieving the target we have given around €350 million globally for all the year. For the -- of cash flow we can say that in first nine months we have good generation of cash flow but we have spoken of the cash flow -- investment types. Because we have some specificity and we have some increase due to tax settlement of litigation. So, we have in terms of CFFO in the appendix of the financial report. Hervé Philippe: In the financial report.

In the financial report, we have also details on the CFFO for the nine months, which are in page 20, 2.3 of the financial report that will be available on the website after this call. You will see also the first concerning of CFAIT which for the first nine months amounted to close to €300 million and that goes to €500 million. For the tax, it’s obviously always complicated to comment taxes on the quarterly basis. We have low tax in the third quarter of 2016 mainly due to litigation of north into U.S. the effective tax rate in the third quarter for 2017 is much more in line with the usual tax.

Our next question comes from Thomas Singlehurst with Citi.

Thank you very much. It’s Tom there from Citigroup. Yes, so a couple of questions, actually one just following up on Julien question there about the fourth quarter cost profile. Given your quite confident that some growth is improving and I’m presuming subscriber acquisition cost in marketing must be sort of up. So, I was just to pin down exactly where those cost savings are coming from. Is that straight programming cost savings that are coming through? And as you said I mean given every quarter for as long as I can remember the fourth quarter has tended to show losses, I presume that the combination of high programming and high cover addition cost et cetera. Are we -- is the Canal+ business becoming structurally profitable in that fourth quarter from here on there? That was the first question. Second one, very briefly on Music obviously is very, very solid performance year-to-date. The implication of the 10% revenue guidance of the full year is you’re going to do I suppose accelerated the growth profile 4Q and 3Q? Just wanted know what the components of that were, is that an acceleration streaming component of growth? Or do you anticipate a better rate of decline in either downloads or physical? I presume the fourth quarter is more weighted to as I say outright sales. So, I guess something has to be changing give you that confidence. Hervé Philippe: Okay. We’ll pass the second question to Arnaud, but to answer the first one on the cost at Canal+ is, the savings are many due to the cost optimization program which have been launched last year and which is doing very well, it’s also due to that practice of the new fair under chain which will decline in the coming months as I have explained earlier. We have no specific plans to decrease as a programming in the fourth quarter as you can imagine. So, it’s mainly due to the management of cost from -- cost optimization which has been launched last year where we’ll show a better comprise on the basis that would say in comparison to last year in terms of cost indeed. So, on now what was the question on Universal Music? The main factor is clearly linked to the release schedule and we got a very rich line up coming from the YouTube, Symphonies we got the impact of Taylor Swift and others. So we expect really this program for Q4 to be main driver of what we expect to be a very solid Q4 and that’s the result as we always said in the past to get in the music this kind of quarter-by-quarter analysis, and even if the streaming environment and so and so forth is flattening the evolution, but nevertheless we are exposed to the quality of what we do. And the fantastic job laid by the team at Universal Music Group under the leadership of Lucian Grainge is proving to be exceptional. So we expect what the space to get the free coming mounts with it that I am looking for word for you to discovering and to hearing it. Thank you.

The one very quick follow-up. In the past I presume -- well, in the past, you talked about seasonality effect in fourth quarter. Have you broken that seasonality? Is it no longer sort of seasonal business in terms of what we think?

There is skill seasonality even if when we compare the trend. We see the new channel of distribution flattening more and more this seasonality, but as another fact it starts by the quality of what you make available and so you got the combination of nevertheless heat driven type of industry, but channel of distribution which is making a kind of a trend getting more and more like-for-like in terms of the analysis but still some effect to be occurring.

[Operator Instructions] We will take our next question from Louis Citroen with Arete Research.

I had a couple. I think the first one is on in your prepared remarks, you mentioned you talked about how net debt was at 3.2 and then how if you could the stakes you had in variety of business it was you had roughly I think more than 6 billion in those stakes. I am curious in the way you presented this. Is that a shift and how you see those stakes as potential by power or something else in the longer run or are there still strategic investments or maybe it’s a case-by-case kind of things? And then the second question would be on Universal, I am wondering if you could share any insight on how profitability evolve in recorded music versus music publishing in the quarter but also in the recent past more generally?

I'll first to answer the question, it’s just question of presentation we have no behind this presentation that those investments on that strategy just to show that we -- now we are company with the net debt which rather the case before the acquisition of Havas. So you see at the end of 2016, we had 1.1 billion of net cash now we have a 3.2 billion of net debt. So it’s just a way to highlight that we have a debt for sure, but we have also stakes in listed company which could be, if necessary it could be way to have more liquidity. This is not way to show that we have no more strategy just liquid, this is a question being that. On the profitability you have to see that the profitability increase comes largely from the increase in revenue, we cannot from ups and downs in the profitability from one quarter to the other due to the different mix of products but we are increasing revenue of roughly 10% for this year and increasing the profitability of the EBITDA of 20% which shows that we have leverage which comes directly from the growth of the top-line.

We will go next to Lisa Yang with Goldman Sachs.

I have a few questions. So firstly on the Universal, I think the numbers on streaming implies a 3% decline quarter-on-quarter. At the same time I think Sony music streaming was up almost at 40% quarter-on-quarter. So I am just wondering, firstly why would you go down quarter-on-quarter? And why you see such a big discrepancy between the various stream players because I would have thought only growth would converge? Secondly still on Universal, could you just confirm that your guidance for the year implies roughly 7% organic growth in Q4 and roughly 150 basis points of margin expansion? Thirdly, on Canal+ could you just confirm how much cost savings was done at the end of the nine months? I think it was about 119 at the end of the first half and how much you expect for Q4? And the last question is on your JV with TI, I mean how do you think this JV is going to work even you don’t really have any premium cards in Italy. So do you plan to inject new cash and do you plan to beat for this year, right? Thanks.

Some comments on the growth in the third quarter. You know we had a lower growth in the third quarter and in the beginning of the year, that’s for sure. But it depends on the single quarter. It also depends if we have some releases which are postponed to the following quarter it can have some impact, let’s just take the example of some countries like in Japan where we had some ways which have been postponed to the fourth quarter which can lead to some decrease in the speed of the growth but the trend is clearly, clearly very good. It’s true that we have a very tough comparison basis in the third quarter. Remember that last year it was a best quarter for many, many years. We have recorded something like more than 11% of growth in the third quarter. So it shows. And we have already said, remember what we have said in the -- from our call for the full year that we could have some ups and downs in the speed of the growth for streaming for one quarter to the other. We are very confident in the growth and in the trend for the coming year at Universal Music and especially thanks to the development of streaming and subscription both in developed countries and also in developing countries as you can see. For the calculation of the margin, we have given a very precise guidance on the whole year. So it’s quite easy to do the math and to make the calculation. And we don’t remember that for the full year we have growth of 2017 which is that 10% this is what guidance we have given. We are very confident for that. In 2016 the growth and all the year for 2016 was only 4%. So you'll see that we'll have an acceleration of the growth at Canal+ and at Universal Music this year. Hervé Philippe: As regard to your last question which is about the joint venture. I will remind you that this is a joint venture that is going to be under the management of Telecom Italia team. The cash consideration as regard to the financing of the joint venture is marginal. And as regard to the point in terms of the reasoning behind this joint venture as you know, and we said that in the past, we need in our production content. We need to get the scale. And as regard to the possibility to have common project in different countries as we have pointed since the Young Pope which has been produced between Canal+, HBO and Sky Italia. We've got the opportunity there to be able to get leverage in terms of common project on the one hand, but obviously also as you know, Canal+ got some catalog Studiocanal. We owned huge catalog, and some of the IPs that we have the rights are from Italian films for instance. So there is both the kind of the relevance around this project as regard to the point of the scale that we want to achieve to be able to have common project pan-European, which are making sense the point number one. And point number two, as regard to the Vivendi being the number one shareholder of Telecom Italia, this is a long term strategic investment with an industrial approach to that ownership. And this joint venture is the first sign of this reasoning behind this Italian project. Thank you.

Thanks. What about the cost savings in Q2 and Q3? Hervé Philippe: Well, we are very confident on the cost savings and cost optimization at Canal+. We announced in August 2016 that the cost optimization plans was for €300 million in 2018. And we recently said that we will probably exceed that target towards the end of the September, the Canal+ has already saved approximately €240 million and we cannot commit for the fourth quarter with the precise objective. But it has been a really loaded in terms of cost. And savings could be higher than into Q3.

Our next question comes from Sophie Bell with Credit Suisse.

Just one. I was wondering if you're not going to speak board representation on Ubisoft and why you'll be making off in the next six months. Could you explain how you're planning to develop the video game sector and if you're planning to reduce your stake in Ubisoft?

Well thank you. And we are still keen to be able to strong operation in the game sector. We've got many options at our disposal which we are working through. And time will tell what they're going to be. Thank you.

Our next question comes from Charles Bedouelle with Exane.

It’s a tiny follow up. Can you just tell us, sorry. Just remind us...

You’re not allowed, Charles I’m sorry. You’re not allowed but that unexceptional.

Okay. Can you just tell us what the level of cost cutting was achieved at the end of Q2, as a reminder, not Q3, Q2. Just to see the progress in Q3? Thanks.

90 million.

[Operator Instructions] We’ll take our next question from Laurie Davison with Deutsche Bank.

The first question is just over the telco contribution, telco wholesale contribution to the revenues at Canal+ here. Your guidance for flat revenue year-on-year. Can you just give us an idea of exactly what contribution you’re getting out to the telco’s for that? And in terms of the UMG guidance as well with the currency impact, can you just give us the imply headline revenues with your expected FX impact? And then lastly and I supposed is reported be putting up its PayTV service in Africa for sales, this is the most choice operations that South African profile fits is pretty complementary to yours in Africa. Is this something that you would be prepared to pursue? Thank you.

The first question, I’m sorry to answer this, this is not disclosed. Obviously our guidance on the music for the fourth quarter is organic, so we compare that would say we cannot anticipate what would be the variations since the currency in the -- up to the end of this year. So, we not be able to answer precisely to our question, we have said that 10% of revenues which is comprising an organic to figure and comparison to last year to the answer the question on PayTV in Africa. Hervé Philippe: I think as we say that Africa is a Continent where we want to invest because we see growth in the picture. As you know we’ve got a solid position in Africa in terms of PayTV operations which rich ARPU and we’re maintaining our development to be able to keep the momentum alongside the growth of middle class in those territories, but it’s mainly in French speaking territories. And as we got -- we got good relationship, but as you know improve its business for multi choice is based mainly in Anglo segment territories. So we’ve got common approach in terms of broadcasting and so on and so forth, but as we speak the relationship is a common sure relationship between the two companies.

Okay. Just a one follow-up, just in terms of debt level what you’re comfortable with. Assuming you don’t sell down any of the existing portfolio. Is the current level of debt at level, which you’re comfortable with in terms of leverage or do you want to be del-ever from that point? Thanks.

No, no, we are very satisfied with such label of that. We have some room of maneuver of increased the portfolio of activities is just solid. And as you probably seen, we have also very good maturity of our debt because there was a gross debt as a maturity of more than four years now. We issued in September €850 million of new bonds with the maturity of seven years at rate of less than 1,000. So we are satisfied with the label that you have in the appendix on Page 34, you have the profile of the maturity of our debt and the label also, so that we are analyzing of liquidity on capital resources on page 33 of the presentation. Thank you.

We will take our next question from Conor O'Shea with Kepler Cheuvreux. Conor O'Shea: The first question just on Universal maybe I understand that quarterly profitability can be volatile, but your EBITDA number was down 20 million year-on-year and restriction costs were down 7 million year-on-year as well. So on the line down about 30 million was weaker revenue growth but also a weaker release schedule to lower costs around that release schedule. So just would you give us a little bit of color with the changes in mix or something that can help us think about Q4 whether step up and release schedule presumably some cost associated around that is as well or with some of those costs anticipated in the third quarter? Already second question, just on Canal+, obviously churn rate canal right fractionally in the third quarter to I think about 10 basis points versus Q2. Do you expect that to come down much more in Q4 with the two year contracts and so on as they phrases through? And third question is on interest cost with Havas fully in the consolidated parameter around. What level of interest cost would you expect for the fourth quarter? Hervé Philippe: Well for the first question, the margin from Universal Music that we can have some partition of profitability from one quarter to the other, but let’s say that the trend in profitability is good. And what you have seen in the third quarter is directly linked to the one-time item, which has been recorded last year. And we have said very clearly on the page 8 of our presentation that the EBITDA margin remained nearly flat year-on-year in comparison to last year excluding the one-time item. Conor O'Shea: Okay. Just one question quickly on the one-time item last year was 12 million for the settlement? Hervé Philippe: No, no. Yes, it was more than that because we have some -- it was a cash and assuming revenue and we disclosed that last year about 20 million probably 30 million I think. Conor O'Shea: Okay.

Last year, you had two one item those of them were mentioned, only was the amount was disclosed that time we mentioned the two. Conor O'Shea: Okay. So just a one question on the churn, you have the information regarding the distribution of the churn at risk in the side of the third quarter. Clearly, one of the good explanations of the decrease of the churn is a fact that new subscribers commit themselves for 24 months of commitment, so this will obviously continue in the coming months and quarters. And we expect the churn to continue to decrease in comparison to the former month of 2016 or beginning of 2017. For the interest cost, in fact we have an interest cost for order book which is at 1.6% which is expected to be reflect in the coming quarters and especially into Q4.

At this time, I will turn the conference back to today’s speakers for any additional or closing remarks.

So thank you for attending. Have a good evening. And see you, no I mean, talk to you in February next year. Bye-bye.

This concludes today’s conference. Thank you for your participation. You may now disconnect.