Annual report 2014

Section 2 - Earnings analysis

Financial Report

| Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated

Financial Statements | Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements

with respect to GVT, net earnings of €304 million in 2014,

compared to €89 million in 2013. GVT’s net earnings comprised the

discontinuation of the amortization of tangible and intangible assets

since September 1, 2014, in compliance with IFRS 5 (impact of

+€116 million for the period);

with respect to Maroc Telecom group, the capital gain on its sale

on May 14, 2014 (€786 million) as well as net earnings until the

effective divestiture date (€407 million, before non-controlling

interests), which comprised the discontinuation of amortization of

tangible and intangible assets since July 1, 2013, in compliance with

IFRS 5 (impact of +€181 million for 2014, compared to +€245 million

for 2013). In 2013, Maroc Telecom group’s net earnings were

€782 million, before non-controlling interests and before deferred

taxes related to its expected sale (-€86 million); and

with respect to Activision Blizzard, the capital gain on the

divestiture of 41.5 million Activision Blizzard shares on May 22,

2014 (€84 million). In 2013, it notably included the capital gain on

the sale of 88% of the interest in Activision Blizzard on October 11,

2013 (€2,915 million) and Activision Blizzard’s net earnings until the

effective date of divestiture (€692 million, before non-controlling

interests).

Please refer to Note 3 to the Consolidated Financial Statements for the

year ended December 31, 2014.

Earnings attributable to non-controlling interests

amounted to

€281 million, compared to €812 million in 2013, a €531 million decrease

(-65.4%). This change was primarily attributable to the sale of Activision

Blizzard on October 11, 2013 (-€269 million) and the sale of Maroc

Telecom group on May 14, 2014 (-€222 million). This change also included

a favorable impact for Canal+ Group related to the acquisition of non-

controlling interests on November 5, 2013 (-€75 million) partially offset

by the increase in earnings of nc+ in Poland (+€27 million).

Adjusted net income attributable to non-controlling interests

amounted to €62 million, compared to €110 million in 2013, a €48 million

decrease resulting from the changes in Canal+ Group’s non-controlling

interest.

The reconciliation of earnings attributable to Vivendi SA

shareowners to adjusted net income

is further described in

Appendix 1 to this Financial Report. In 2014, this reconciliation primarily

included earnings from discontinued operations (+€5,034 million, after

non-controlling interests). The reconciliation also included the premium

paid and other costs related to the early redemptions of the bonds

(-€698 million), the capital gain on the sale of Beats (+€179 million) as

well as the amortization and impairment of intangible assets acquired

through business combinations (-€327 million, after taxes). In 2013, this

reconciliation primarily included earnings from discontinued operations

(+€1,924 million, after non-controlling interests) offset by the amortization

and impairment of intangible assets acquired through business

combinations (-€246 million, after taxes), as well as the premium paid

and other costs related to the early redemptions of bonds (-€202 million).

2.3. Outlook for 2015

Preliminary commentS

The outlook presented below regarding revenues, income from operations, income from operations margin rates, adjusted net income as well as

distributions and share repurchases is based on data, assumptions, and estimates considered as reasonable by Vivendi Management. They are

subject to change or modification due to uncertainties related in particular to the economic, financial, competitive and/or regulatory environment

as well as the impact of certain transactions, if any. In addition, the materialization of certain risks described in Section 6 of this report could

have an impact on the group’s operations and its ability to achieve its outlook. Finally, Vivendi considers that the non-GAAP measures, income

from operations, income from operations margin rates, and adjusted net income are relevant indicators of the group’s operating and financial

performance.

Vivendi expects a slight increase in revenues thanks to the growth

of UMG’s streaming and subscription activities and Canal+ Group’s

international operations. 2015 income from operations margin should

be close to 2014 level. Vivendi also expects an increase in its adjusted

net income of approximately 10%, mainly thanks to lower restructuring

charges and decrease in interest expenses.

In addition, it will be proposed to the Annual Shareholders’ Meeting to

be held on April 17, 2015 that an ordinary dividend of €1 be paid with

respect to 2014

(1)

, comprising €0.20 relative to the Group’s business

performance and a €0.80 return to shareholders as a result of the

disposals of assets.

The objective is to maintain this distribution level for the fiscal years 2015

and 2016, representing an additional return to shareholders of €2 billion.

In addition to this distribution, a share repurchase program is planned

to be launched, within the legal limit of 10% of the share capital, for

approximately €2.7 billion in accordance with the market regulations on

share repurchases. The program will run over a period of 18 months.

In total, the return to shareholders could reach approximately €5.7 billion

by mid-2017 in addition to the €1.3 billion paid in 2014.

(1)

With an ex-distribution date of April 21, 2015 and a payment date of April 23, 2015.

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Annual Report 2014