Annual report 2014

Group Profile

| Businesses | Litigation | Risk Factors

Strategy

1.3. Strategy

1.3.1.

Vivendi’s Transformation into an Integrated Industrial Group in Media and Content

2014 was marked by structural changes in the governance, strategy and

organization of Vivendi.

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Stronger Governance

Following the end of the Shareholders’ Meeting held on June 24, 2014,

Vivendi’s Supervisory Board made several significant changes in the

group’s governance:

it elected Vincent Bolloré as Chairman of the Supervisory Board,

replacing Jean-René Fourtou who became Honorary Chairman; and

it appointed three members to the Management Board: Arnaud de

Puyfontaine, as Chairman, replacing Jean-François Dubos, Hervé

Philippe, Chief Financial Officer, and Stéphane Roussel, Senior

Executive Vice President, Development and Organization.

Concomitantly, the Supervisory Board increased its size by the addition

of three new independent members: Philippe Bénacin (Interparfums),

Katie Stanton (Twitter), and Virginie Morgon (Eurazeo).

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Completion of our Repositioning in Media and Content

In 2014, the new executives completed the work that had started more

than two years prior to refocus the group on its media and content

operations. The implementation of the following three major transactions

have, and to the extent not completed, will upon completion, result in the

strategic repositioning of Vivendi:

in May 2014, Vivendi sold its 53% stake in Maroc Telecom to Etisalat

for a final consideration of €4,138 billion;

in November 2014, Vivendi finalized the merger between SFR and

Numericable for a cash consideration of €13,166 billion; and

in September 2014, Vivendi and Telefonica entered into a

definitive agreement for the sale of GVT, which provides for a cash

consideration of €4.66 billion before adjustments. This transaction is

expected to be finalized in the second quarter of 2015.

Vivendi has sharply reduced its telecom investment with these

three disposals, but it has retained its tactical interests as a minority

shareholder to facilitate the distribution of its content.

Vivendi’s exit from telecommunications was accompanied by expansion in

media and content, where the group already holds leadership positions.

In 2014, several transactions strengthened Vivendi’s presence in

television, film and music:

in March 2014, Canal+ Group acquired a majority stake in Studio

Bagel, the top comedy channel network on YouTube in France;

in April 2014, Universal Music Group (UMG) acquired the British

company Eagle Rock Entertainment, the largest producer and

distributor worldwide of music programming for DVD, Blu-Ray, and

digital TV and media; and

in October 2014, Canal+ Group launched A+, a new 100% African

channel, available in approximately 20 countries in West and Central

Africa through the Canalsat package.

After reducing its debt and refocusing on its core operations, Vivendi has

powerful resources at its disposal to take new steps towards growth in

media and content.

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The First Milestones toward an Integrated

Industrial Group

Following the end of the General Shareholders’ Meeting held

on June 24, 2014, the Supervisory Board resolved to transform Vivendi

from a holding company into an integrated industrial group, with a clear

objective: to reveal the hidden value of the group’s businesses and to

develop common projects.

This transition became necessary as a result of changes in the digital

environment, bringing about a convergence in the modes of use

and distribution of musical and audiovisual content. By blurring the

boundaries between the different media, the digital revolution is

revealing the common factors among Vivendi’s businesses and is offering

them new opportunities to collaborate together.

New methods for working along these lines have already been

established. Co-founder seminars attended by the group’s top executives

are held regularly and focus on four priority areas: future content, data

and monetization, Africa, and cooperation and projects.

More generally, Vivendi’s shift from a holding company to an integrated

industrial group is becoming a reality in three different ways:

simplified and seamless organization, better adapted to the new

realities of the group:

–– a strengthened executive team and a management aligned

towards common objectives,

–– increased cooperation and close partnerships among the business

units;

rigorous tracking of operational performance:

–– attention paid to cash generation,

–– regular, in-depth reporting;

rigorous investment criteria:

–– priority given to organic growth, and

–– investment discipline that takes account of financial balances and

is compatible with strategic investments that create value.

This strategic and organizational transformation will allow the new

Vivendi to act as a facilitator and accelerator of performance, capable of

creating long-term value.

Annual Report 2014