AN N U AL R EP O R T 2018 ANNUAL REPORT

ANNUAL REPORT 2018

ANNUAL REPORT

–— VIVENDI –— ANNUAL REPORT 2018 –—

The Annual Report in English is a translation of the French Document de référence

provided for information purposes.

This translation is qualiﬁed in its entirety by reference to the Document de référence.

The Annual Report is available on the Company’s website www.vivendi.com

–— VIVENDI –— ANNUAL REPORT 2018 –—

QUESTIONS FOR YANNICK BOLLORÉ AND ARNAUD DE PUYFONTAINE 02

PROFILE OF THE GROUP — STRATEGY AND VALUE CREATION — BUSINESSES,

FINANCIAL COMMUNICATION, TAX POLICY AND REGULATORY

ENVIRONMENT — NON-FINANCIAL PERFORMANCE 04

1. Profile of the Group 06

2. Strategy and Value Creation 12

3. Businesses – Financial Communication – Tax Policy and Regulatory Environment 24

4. Non-financial Performance 48

RISK FACTORS — INTERNAL CONTROL AND RISK MANAGEMENT —

COMPLIANCE POLICY 96

1. Risk Factors 98

2. Internal Control and Risk Management 102

3. Compliance Policy 108

CORPORATE GOVERNANCE OF VIVENDI — COMPENSATION

OF CORPORATE OFFICERS OF VIVENDI — GENERAL INFORMATION

ABOUT THE COMPANY 112

1. Corporate Governance of Vivendi 114

2. Compensation of Corporate Officers of Vivendi 150

3. General Information about the Company 184

FINANCIAL REPORT — STATUTORY AUDITORS’ REPORT

ON THE CONSOLIDATED FINANCIAL STATEMENTS — CONSOLIDATED

FINANCIAL STATEMENTS — STATUTORY AUDITORS’ REPORT

ON THE FINANCIAL STATEMENTS — STATUTORY FINANCIAL STATEMENTS 196

Key Consolidated Financial Data for the last five years 198

I – 2018 Financial Report 199

II – Appendix to the Financial Report 222

III – Audited Consolidated Financial Statements for the year ended December 31, 2018 223

IV – 2018 Statutory Financial Statements 319

RECENT EVENTS — OUTLOOK 358

1. Recent Events 360

2. Outlook 361

RESPONSIBILITY FOR AUDITING THE FINANCIAL STATEMENTS 362

1. Responsibility for Auditing

the Financial Statements 364

Content

–— VIVENDI –— ANNUAL REPORT 2018 –—

Questions for Yannick Bolloré

and Arnaud de Puyfontaine

How did Vivendi perform in 2018?

Yannick Bolloré: Vivendi posted strong results in 2018. Universal Music

Group (UMG), the world’s leading recorded music company, had an

excellent year, led by the quality of its management teams and artists

and the rise of streaming services. Income from recorded music

through subscriptions and streaming rose by 36% in 2018 to represent

54% of total sales. UMG’s roster of talent features some of the most

popular and award-winning artists in the world.

As well as improving its performance in France,

Canal+ Group gained nearly 0.9million subscribers

in other countries. In addition to Africa, it made

inroads in the Asian market, with the launch of a

pay-TV offer in Myanmar. In France, the group

renewed its agreement with the French ﬁlm indus-

try (Canal+ is the industry’s partner of choice) and

signed new regulations reducing the window

between the time when a movie is released in

theaters and when it can be aired on its channels.

It also secured the broadcasting rights to numerous

sports events, including the next three seasons of

the English Premier League.

Havas enjoyed stronger proﬁtability in 2018, particu-

larly in the second half, due to account wins in crea-

tive advertising and media. The Palau Pledge campaign

is a shining example of Havas’s creativity and commit-

ment. As well as winning a whole host of festival awards,

the company also received the “Champion for Humanity”

award from the United Nations.

Our other businesses –Gameloft, Vivendi Village and

Dailymotion– also delivered solid performances, each contributing to

the value chain of the integrated group that Vivendi is today. The group

pressed ahead with new joint initiatives between its subsidiaries in

2018, with Havas and Capitol Music Group founding Annex Tower

Creative, an agency whose aim is to foster greater collaboration

between artists and brands, and Canal+ and Universal Music France

joining forces to give television viewers the chance to tune in to one of

the most exciting Top14 ﬁnals. Olympia Production was able to capitalize

on Canal+ and L’Olympia’s expertise and assets, while the CanalOlympia

venues in Africa beneﬁted from the establishment of Canal+ Group on

the continent and from Studiocanal films. And these are just a few

examples of the successful strategy that drives our integrated group.

Why did Vivendi acquire Editis?

Arnaud de Puyfontaine: The acquisition of Editis marked an important

milestone in the implementation of Vivendi’s business plan. It adds

another brick to our development of a world-class content, media and

communications group based in Europe. Editis has a large portfolio of

internationally acclaimed authors, including Marc Lévy, Michel Bussi,

“Our strategy is aimed at

launching joint initiatives

between our different

businesses. These synergies

developed by our subsidiaries

will help promote growth

for Vivendi.”

YANNICK BOLLORÉ

Chairman of the Supervisory Board

–— VIVENDI –— ANNUAL REPORT 2018 –—

Raphaëlle Giordano, Haruki Murakami and Ken Follett. The group

brings together close to 50prestigious houses (e.g., Nathan, Robert

Laffont, Julliard, Plon, LeRobert, Presses de la Cité, Pocket and Solar)

that publish general interest, children’s and young adult literature,

how-to books, illustrated titles, textbooks and reference works.

While Editis will allow Vivendi to expand its creative capacity, Vivendi will

enable Editis to broaden its appeal to authors, explore new markets and

experiment with innovative formats. The combination

of our two groups creates opportunities for developing

joint projects. We have already started working

together and we will strengthen our efforts in this

direction.

What future do you see

for Universal Music Group?

Arnaud de Puyfontaine: The music market is under-

going total transformation. Today, there are more

than 175million music streaming subscribers

worldwide. This dynamic, along with the talent and

expertise of UMG’s artists and teams, is driving the

expansion of the world’s top recorded music com-

pany. Sir Lucian Grainge called 2018 a “historic

year”. We have initiated a process to open up UMG’s

share capital to one or several partners to leverage the

value of this unique asset and support its development.

What are your ambitions for the group?

Yannick Bolloré: Vivendi’s ambitions, which were outlined ﬁve

years ago, are clear. They are focused on building a global content,

media and communications group with European roots. Demand for

entertainment content is strong on every continent in the world. Innovation

and digital technology are opening up new markets. Our strategy is aimed

at launching joint initiatives between our different businesses. These

synergies developed by our subsidiaries will help promote growth for

Vivendi, as I mentioned at the beginning of this interview.

In 2018, we said we were ready to enter a new phase of growth. This has

now been accomplished with the acquisition of Editis and our return to

publishing. A new era has begun for Vivendi.

Our goal is to provide overall support for the creation of new value in all

our businesses, wherever we are, and to offer quality content to as many

people as possible. Through the impact of its content, our group plays a

prominent role in society. Our inﬂuence bears a special responsibility.

In addition, Vivendi’s ambitions should also be viewed from a long-term

perspective. Our extremely sound balance sheet and having a core

shareholder –the Bolloré Group– leave us free from short-term pressure

and means that we can implement our strategy in calmness and

conﬁdence. That is a real strength. •

“Editis adds another

brick to our development

of a world-class content,

media and communications

group based in Europe.”

ARNAUD DE PUYFONTAINE

Chief Executive Ofﬁcer

–— VIVENDI –— ANNUAL REPORT 2018 –—

UNIVERSAL MUSIC GROUP

–— VIVENDI –— ANNUAL REPORT 2018 –—

Proﬁle of the Group, Strategy and Value Creation,

Businesses – Financial Communication –

Tax Policy and Regulatory Environment,

Non-ﬁnancial Performance

Bigﬂo & Oli

Gregory Porter

PROFILE OF THE GROUP 06

1.1. Simpliﬁed Organization Chart of the Group 06

1.2. Key Figures 08

1.3. 2018 Highlights 10

STRATEGY AND VALUE CREATION

2.1. Strategy 12

2.2. Business model 14

2.3. Value creation 16

BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

3.1. Businesses 24

3.2. Holdings 43

3.3. Operations Sold 44

3.4. Financial communication, tax policy

and regulatory environment 44

3.5. Tax Policy 45

3.6. Insurance 46

3.7. Investments/Divestitures 46

3.8. Seasonality of Group Businesses 47

3.9. Raw Materials 47

NON-FINANCIAL PERFORMANCE

4.1. Vivendi’s Societal Project 48

4.2. Governance centered on non-ﬁnancial performance 48

4.3. Main non-ﬁnancial risks 52

4.4. Our key commitments 53

4.5. Indicator tables 82

4.6. Correspondance table 89

4.7. Veriﬁcation of non-ﬁnancial data 90

–— VIVENDI –— ANNUAL REPORT 2018 –—

PROFILE OF THE GROUP

Recorded

Music

UMG

Music

Publishing

UMPG

Merchandising

Bravado

Canal+

(France)

Canal+

International

(International)

Studiocanal

(Motion Pictures)

Havas

Creative Group

Havas

Media Group

Havas

Health & You

SECTION 1. PROFILE OF THE GROUP

1.1. Simplified Organization Chart of the Group

UNIVERSAL

MUSIC GROUP

CANAL+

GROUP

HAVAS

100% 100% 100%

1.1. Simpliﬁed Organization Chart of the Group

(1) Since January 31, 2019.

(2) Percentage of controlling interest as of December 31, 2018.

(3) Listed Company.

(4) Based on the aggregate number of ordinary shares with voting rights.

(5) On April 9, 2018, in compliance with the undertakings given to

the AGCOM, Vivendi transferred the portion of its shareholding in excess

of 10% of Mediaset’s voting rights to an independent Italian trustee.

(6) Of the share capital (% interest).

–— VIVENDI –— ANNUAL REPORT 2018 –—

PROFILE OF THE GROUP

Performances

Venues

23.94%

Telecom

Italia

(3) (4)

Gameloft SE

(France)

Fiction

Educational

& Reference

books

Selling

& Distribution

Dailymotion Inc.

Gameloft Inc.

(United States)

Flab Prod

Gameloft Inc.

Divertissement

(Canada)

Gameloft

Software

Beijing Ltd.

(China)

Ticketing

GVA Group

Vivendi Africa

Talents

Live

EDITIS

(1)

GAMELOFT VIVENDI

VILLAGE

NEW

INITIATIVES

HOLDINGS

(2)

100% 100% 100% 100%

1.1. Simplified Organization Chart of the Group

28.80%

Mediaset

(3) (5) (6)

31.4%

Banijay Group

Holding

–— VIVENDI –— ANNUAL REPORT 2018 –—

PROFILE OF THE GROUP

1.2. Key Figures

HEADCOUNT BY GEOGRAPHIC ZONE

(*)

7,729

NORTH

AMERICA

3,500

SOUTH AND

CENTRAL AMERICA

7,074

ASIA-PACIFIC

23,807

EUROPE

(including France)

2,032

AFRICA

HEADCOUNT BY BUSINESS SEGMENT(*)REVENUES BY BUSINESS SEGMENT

Year ended December 31 – in millions of euros

2018 2017

Universal Music Group 6,023 5,673

Canal+ Group

5,166 5,198

Havas

(1) 2,319 1,211

Gameloft 293 320

Vivendi Village 123 109

New Initiatives

66 51

3 Elimination of intersegment transactions

(58) (44)

TOTAL 13,932 12,518

(1) Consolidated since July 3, 2017.

1.2. Key Figures

44,142

8,319 Universal

Music Group

7,739 Canal+

Group

19,622 Havas

Gameloft

4,456

Editis

2,542

Vivendi

Village

640

New

Initiatives

567

Corporate

257

TOTAL

44,142

TOTAL REVENUES 2018

€13,932M

€7,562M

EUROPE

(including France)

€4,395M

THE AMERICAS

€1,373M

ASIA & OCEANIA

€602M

AFRICA

(*) Includes Editis, which was acquired on January 31, 2019.

–— VIVENDI –— ANNUAL REPORT 2018 –—

PROFILE OF THE GROUP

1.2. Key Figures

In 2018, Vivendi applied two new accounting standards:

3 IFRS 15 – Revenues from Contracts with Customers: in accordance with IFRS 15, Vivendi applied this change of accounting standard to 2017 revenues, thereby ensuring

comparability of the data relative to each period of 2018 and 2017 contained in this report; and

3 IFRS 9 – Financial Instruments: in accordance with IFRS 9, Vivendi applied this change of accounting standard to the 2018 Statement of Earnings and Statement

of Comprehensive Income and restated its opening balance sheet as of January 1, 2018; therefore, the data relative to 2017 contained in this report is not

comparable.

For a detailed description, please refer to Notes 1 and 28 to the Consolidated Financial Statements for the year ended December 31, 2018, in Chapter 4.

3 The non-GAAP measures of Income from operations, EBITA, Adjusted net income and Net Cash Position (or Financial Net Debt) should be considered in addition

to, and not as a substitute for, other GAAP measures of operating and ﬁnancial performance. Vivendi considers these to be relevant indicators of the group’s

operating and ﬁnancial performance. Vivendi Management uses these indicators for reporting, management and planning purposes because they exclude most

non-recurring and non-operating items from the measurement of the business segments’ performances. In addition, it should be noted that other companies may

have deﬁnitions and calculations for these indicators that differ from those used by Vivendi, thereby affecting comparability. Each of these indicators is deﬁned in

Section 1 of the Financial Report, in Chapter 4, or in Note 1 to the Consolidated Financial Statements for the year ended December 31, 2018, in Chapter 4.

NET CASH POSITION/

(FINANCIAL NET DEBT)

As of December 31 – in millions of euros

EARNINGS ATTRIBUTABLE TO VIVENDI SA

SHAREOWNERS AND ADJUSTED NET INCOME

Year ended December 31 – in millions of euros

■■ Earnings attributable to Vivendi SA shareowners

■■ Adjusted net income

ADJUSTED NET INCOME

PER SHARE (BASIC)

Year ended December 31 – in euros

(1) Submitted to the approval of the

Annual General Shareholders’ Meeting

of April 15, 2019.

DIVIDEND

With respect to fiscal year – in euros

INCOME FROM OPERATIONS BY BUSINESS SEGMENT

Year ended December 31 – in millions of euros

2018 2017

Universal Music Group 946 798

Canal+ Group

429 349

Havas

(1) 258 135

Gameloft

4 10

Vivendi Village (9) (6)

New Initiatives (79) (87)

Corporate

(110) (101)

TOTAL 1,439 1,098

EBITA BY BUSINESS SEGMENT

Year ended December 31 – in millions of euros

2018 2017

Universal Music Group 902 761

Canal+ Group 400 300

Havas

(1) 215 111

Gameloft

2 4

Vivendi Village

(9) (18)

New Initiatives (99) (92)

Corporate

(123) (97)

TOTAL 1,288 969

2018

127

2018

(2,340)

2018

0.92

2018

2018 (1)

1,157

0.50

2017

1,216

2017

1.04

2017

1,300

0.45

176

(1) Consolidated since July 3, 2017.

–— VIVENDI –— ANNUAL REPORT 2018 –—

PROFILE OF THE GROUP

JANUARY

• Canal+ announces the

prepurchase of the My Brilliant

Friend series, based on Elena

Ferrante’s bestselling novel.

• Vivendi Sports organizes

the ﬁrst Le Tour de l’Espoir

cycle race in Cameroon for

cyclists under 23, registered

on the International Cycling Union

calendar.

• The Modern Combat Versus

game is selected for the Android

Excellence 2018 program for

high-quality mobile apps.

FEBRUARY

• BETC is ranked among the

top ten agencies in the world by

the Gunn Report.

• The launch of Polar+ is the

most successful launch of any

specialist-interest channel in

ten years.

• Canal+ Group launches

in Myanmar.

• The Vivendi Create Joy

solidarity program celebrates

its 10

anniversary.

MARCH

• Havas announces the launch

of Havas China Desk, a new

service across all of the group’s

agencies to support clients wanting

to strengthen their presence in

China and to partner with Chinese

brands looking to expand

internationally.

• Group Vivendi Africa launches

its CanalBox service in Lomé, Togo.

APRIL

• See Tickets acquires

the Dutch company Paylogic and

builds a ticketing network covering

Europe and the United States.

• Canal+ Group and UMG

launch Deutsche Grammophon+,

a TV channel dedicated to classical

music.

• CanalOlympia and Orange

team up to help make cinema more

accessible in Africa.

1.3. 2018 Highlights

1.3. 2018 highlights

MAY

• UMG artists Kendrick

Lamar, Luis Fonsi, Daddy

Yankee, Justin Bieber,

Taylor Swift, Chris Stapleton,

Imagine Dragons and U2 are

the big winners at the 2018

Billboard Music Awards.

• Gameloft launches Dungeon

Hunter Champions, the latest

opus in the Dungeon Hunter series,

which achieved 100 million

downloads.

• Havas launches

an innovation lab devoted

to artiﬁcial intelligence

and developing the group’s

expertise in new technologies.

JUNE

• Canal+ Group joins forces

with Apple to adapt the

short-format audio series Calls

for English-speaking audiences.

• Dailymotion creates

a new advertising ecosystem

with its own programmatic

platform and content

monetization system.

• Mika’s performance at

the French Top 14 rugby ﬁnal

is produced and broadcast

by UMG, Havas, Canal+

and Dailymotion.

• Havas wins 47 Lion awards

at the International Festival

of Creativity in Cannes.

JULY

• Gameloft launches

Asphalt 9: Legends, the latest

installment in the mobile video

racing game series with the most

downloads worldwide.

• The Rolling Stones sign a

global deal with UMG covering

the band’s recorded music and

audiovisual catalog and brand

management.

• Vivendi announces its plan

to sell up to 50% of UMG’s

share capital to one or more

strategic partners.

–— VIVENDI –— ANNUAL REPORT 2018 –—

PROFILE OF THE GROUP

1.3. 2018 highlights

OCTOBER

• Olympia Production

announces the acquisition

of Garorock, located in

Marmande, one of France’s

leading music festivals.

• Vivendi Sports organizes

Jab & Vibes, the Super-

lightweight Boxing World

Championship in Dakar.

NOVEMBER

• Canal+ renews its agreement

with the French cinema

industry to continue to support

movie production until

year-end 2022.

• UMG signs a multi-year

global contract with pop star

Taylor Swift, who joins

the Republic Records label.

• Canal+ releases its latest

Créations Originales series,

Hippocrate, a unique insight

into the world of medicine.

DECEMBER

• Canal+ signs a new media

scheduling agreement and will

now be able to broadcast

movies six months after their

theater release.

• CanalOlympia opens

its 11

cinema and live

performance venue in Africa,

located in Port-Gentil, Gabon.

• With 4.3 million tickets sold,

Sink or Swim (Le Grand Bain)

becomes Studiocanal’s most

successful release in France.

• Gameloft signs an

agreement with LEGO

to create a new game in 2019.

• Queen’s Bohemian

Rhapsody ofﬁcially ranks

as the most-streamed song

from the 20

century.

• Gameloft acquires

FreshPlanet, creator of music

trivia game SongPop.

JULY

• Havas announces the

acquisition of Catchi, specialized

in CRO (conversion rate optimization)

in Australia and New Zealand.

• Vivendi begins exclusive

negotiations with Grupo Planeta

to acquire 100% of the share

capital of Editis, the second-largest

French-language publishing group.

AUGUST

• Dailymotion is partner

for more than 300 leading

content publishers, including

the Financial Times, TF1, GQ

and AC Milan.

• Canal+ Afrique launches

Canal+ Comédie, Canal+ Action

and its ﬁfth channel, Canal+ Sport.

SEPTEMBER

• Havas took a participation

in Republica, the number 1

independent multicultural marketing

agency in the USA, based

in Miami (Florida).

• Canal+ announces the acquisition

of exclusive distribution rights

for several seasons of MotoGP™,

Moto2 and Moto3, starting in 2019.

• Invisibles, the series co-produced

by Canal+ Afrique, wins Best

Foreign Francophone Story

at the La Rochelle International TV

Drama Festival.

• UMG and Elton John enter

into a global partnership

spanning recorded music, music

publishing and copyright

protection.

OCTOBER

• Canal+ acquires exclusive

rights for the 2019-2020,

2020-2021 and 2021-2022 seasons

of the English Premier League.

• Puma selects Havas Media

as its new global agency partner

for media buying and planning.

2.1.Strategy

STRATEGY AND VALUE CREATION

2.1.Strategy

2.1.1. ACCELERATION OF VIVENDI’S

STRATEGICROADMAP

2018 once again demonstrated the value of the strategic roadmap that has

guided Vivendi’s activities since 2014. With a Chairman of the Supervisory

Board, Yannick Bolloré, who benefits from a wide-ranging vision for the

group’s business lines (content, media and communications) and the

experience of integrating a global industrial group, Vivendi is on track to

become a world class European champion in the creative industries.

The group’s strategy of investing in its cultural entertainment business lines

is bearing fruit, as its 2018 results conﬁrm. Revenues reached €13.9billion,

a 4.9% increase compared to 2017 (at constant currency and perimeter),

driven by strong results from the group’s main business lines.

Universal Music Group had a historic year both creatively and commercially.

With year-on-year growth of 10% in revenues (at constant currency and

perimeter), UMG was able to consolidate its global leadership position due

to its unique expertise in supporting talent and its ability to successfully

exploit the full potential of streaming. Partner to more than 400streaming

platforms, GAFAM and major players in Asia, UMG saw its income from

subscriptions and streaming soar by 36% in 2018.

UMG artists’ Drake, Ariana Grande, Post Malone and Taylor Swift all

released chart-toppers during the year. In Spotify’s global ranking, the ﬁve

most-streamed songs of 2018 were all performed by UMG artists: God’s

Plan and In My Feelings by Drake, rockstar and Psycho by Post Malone, and

SAD! from XXXTentacion. The most popular albums worldwide during the

year included records by Post Malone, The Beatles and XXXTentacion, along

with the A Star is Born soundtrack featuring Lady Gaga.

A numberof major artists, including Taylor Swift, The Rolling Stones and

Elton John, signed or renewed a contract with UMG or entered into

innovative partnerships during the year. As an example, Taylor Swift signed

a multi-year global recording contract with UMG in November2018. The

music company will now be Taylor’s exclusive recorded music partner

worldwide and Republic Records, a subsidiary of UMG, will serve as her

label in the United States. The partnership draws on the considerable

success that the singer has had with Big Machine Records, the label that

brought her into the UMG family.

In audiovisual content, Canal+ Group pursued its turnaround in France and

continued to win over new subscribers internationally. In all, the group’s

portfolio totaled 16.2million subscribers, a year-on-year increase of

654,000.

Canal+ Group also continued to expand in international markets, with

subscribers in Africa, Asia, Poland and French overseas territories reaching

7.8million. Growth in the subscriberbase was particularly strong in Africa,

now standing at more than 4million.

In France, as a result of the transformation plan implemented in 2015,

Canal+ Group reported stable figures. The group added to its line-up by

expanding its three editorial verticals: sports, series and cinema.

Its sports offering was enhanced in 2018 through the acquisition of all

rights to broadcast the next three seasons of the English Premier League –

the most popular premier football championship in the world – in France

and Poland. The group also diversiﬁed its sports content further during the

year, following on from its investments in boxing and women’s football in

2017. It will now feature more motor sports due to its ﬁrst-time acquisition

of the rights to the MotoGP

World Championship. The Créations

Originales (original programming), central to Canal+ Group’s editorial line,

shone particularly in 2018. The fourth season of espionage drama The

Bureau des Légendes and new series Hippocrate and Nox were very well

received by subscribers and critics alike.

Canal+, a long-standing partner of the cinema industry, renewed its

agreement with the French cinema industry until 2023 in a partnership

spanning over 30 years. The agreement resulted in the signing of a new

planned media release in late December2018. Canal+ Group will now be

able to broadcast ﬁlms to its subscribers just six months after their theater

release. Studiocanal enjoyed a buoyant 2018 due to a numberof highly

successful releases, including Gilles Lellouche’s Sink or Swim, which

attracted 4.3million moviegoers, Mia and the White Lion (1.2million

viewers) and the touching Pupille, with 0.8million tickets sold.

In communications, Havas had a very successful year, driven by an excellent

performance in the fourth quarter. The group pursued its acquisition policy,

with ﬁve new agencies from a variety of geographies and markets joining

the Havas family in 2018. A numberof its agencies, from BETC to Rosapark

and Havas Host, were recognized for their creativity at major international

festivals during the year, most notably at the Cannes Lions Festival, where

Havas won three Grand Prix awards and 47 Lions.

Eighteen months on from joining Vivendi, Havas has made a name for itself

within the group through several joint projects run with other entities.

Havas Sport & Entertainment, Universal Music & Brands and Canal+ all

joined forces to turn the rugby Top 14 final at the Stade de France last

Juneinto a multi-faceted viewing experience.

Lastly, Gameloft had a great success with the latest launch of its mobile

racing game, Asphalt 9: Legends. Released on July26, 2018, the game has

been downloaded more than 35million times. Over the year, Gameloft has

1.8million games played per day and 98million monthly players.

In addition to the franchises it develops in its own right, Gameloft is

associated with many rights holders through partnerships to create games

in connection with universes and famous people. After having collaborated

with Disney

, Universal, Illumination Entertainment, Hasbro

, and Fox

Digital Entertainment, Gameloft and the LEGO group announced the release

in 2019 of a new LEGO

game that will bring the famous miniatures and

their world to mobile.

At year-end 2018, Gameloft acquired the FreshPlanet studio, the creator of

the hit SongPop music quiz games, which have won several awards and

have been downloaded more than 100million times. This acquisition marks

a new step in Gameloft’s strategy, reinforcing its leading position in the

mobile gaming industry.

Vivendi is now a well-balanced group, with its complementary business

lines (from music to ticketing and series) working together to promote the

group’s primary resource: content. Strengthened with the addition of Havas’

communications business, Vivendi represents an alternative to major

players from the United States and Asia operating on the global cultural

entertainment market. With its European background, Vivendi is able to

offer its customers and partners a competitive line-up with unique origins

and sensibilities.

SECTION 2. STRATEGY AND VALUE CREATION

12 –— VIVENDI –— ANNUAL REPORT 2018 –—

—

VIVENDI

—

ANNUAL REPORT 2018

—

2.1.Strategy

STRATEGY AND VALUE CREATION

As well as its main businesses, Vivendi is also strengthening its presence in

markets that will act as growth drivers in the coming years. In 2018, Vivendi

consolidated its value chain while ensuring that content and intellectual

property remained at the heart of its model. The announcement of its acqui-

sition of Editis, new developments in live performances and the group’s work

on connected devices are an integral part of Vivendi’s strategic vision. In

2018, the group focused in particular on:

3 Optimizing Vivendi franchises

Due to its diverse expertise, Vivendi is able to lead cross-business

projects and create specialized offerings with original formats, such

as the Le Crxssing festival, which was held for the second time in

London at the end of September2018. From the concept to ticketing,

each step was supported by group entities, similarly to the various

initiatives recently undertaken in relation to the Paddington

franchise. This synergy model will be used for future acquisitions

and new franchises, particularly for Gameloft’s and Editis’s content.

3 Developing live activities

Vivendi considerably expanded its portfolio of festivals in 2018.

Garorock Festival is the latest addition to the 14 festivals all over

the world now wholly or partially owned by Vivendi through its

Olympia Production and ULive businesses. At the intersection of the

group’s business lines, the festival industry appeals to an ever-

increasing audience. France counted more than 7million festival

goers in 2018. To meet this growing demand, See Tickets acquired

Dutch ticketing company Paylogic in April 2018, building a global

network covering Europe and the United States.

3 Winning over new markets

In a two-year span, Vivendi has successfully established itself on

the African market. The continent’s young, connected population

and growing demand for cultural content make it ideal for Vivendi’s

creative businesses. The group launched CanalOlympia, which has

become the leading network of movie theaters and performance

venues, now with 11 locations in eight countries in West Africa. It

also created Vivendi Sport, which designs and organizes sporting

events in the continent. Vivendi Sports held its ﬁrst two competi-

tions in 2018, both recognized by international federations: Le Tour

de L’Espoir, a cycle race in Cameroon, and the Jab & Vibes

Super-lightweight Boxing World Championship in Senegal.

Vivendi is also stepping up its presence in other markets and is

gradually establishing itself in Asia, particularly China and India,

where it has set up ad hoc committees and entered into partner-

ships with major industry players.

3 Distributing content online

Creating content would mean nothing without being able to distribute

it. A year on from its strategic repositioning, Dailymotion has made a

turnaround and is now retaining its audience with premium content.

This editorial shift was also reﬂected in the forming of more than 300

partnerships in 2018 with world leaders in content creation, including

the Financial Times, Variety, GQ and Brut. Dozens of partnerships were

signed in regions where Dailymotion’s presence was minimal (South

Korea, Vietnam and India), resulting in a surge in viewing figures.

Dailymotion has come into its own as the group’s digital showcase.

2.1.2. VIVENDI’S COMMITMENT TO ITS INDUSTRY,

CULTURE AND SOCIETY

Vivendi has high hopes for 2019 and a clear objective: to continue on its

way to becoming a world-class European champion in content, media and

communication, with two main focus areas on its roadmap for the year:

3 On January31, 2019, the group ﬁnalized the acquisition of Editis,

thereby securing a foothold in publishing, a new creative industry for

Vivendi that supplements its other content businesses. The Editis

acquisition marks Vivendi’s entry into France’s biggest cultural market

and is an exceptional asset for the group. Publishing is central to the

ﬁeld of intellectual property, with two thirds of movies and series

based on original literary works; and

3 Vivendi has decided to offer one or several strategic partners the

opportunity to purchase up to 50% of UMG’s share capital with a

view to accelerating UMG’s development while still retaining the

music company, a precious asset, in its portfolio. A reserve price will

be set.

Vivendi forms a unique ensemble with high-potential assets and talent,

from Lady Gaga to the heroes of the Engrenages drama, the little dragons

from its Dragon Mania Legends game and, since January2019, Editis

authors such as Michel Bussi and Ken Follett. With its diverse business

lines, Vivendi is able to harness the creative potential of major players in

the entertainment industry alongside smaller structures working to promote

a talent, work or brand. This diversity in content, business lines and talent is

central to the group’s foundation and DNA, allowing it to stand out in an

increasingly globalized content market alongside GAFAM and BAT in Asia

(Baidu, Alibaba and Tencent).

By supporting content creation in all the regions where it operates, Vivendi

upholds a commitment to its stakeholders to promote multiculturalism,

open up access to entertainment and empower young people in their use of

digital media. In 2018, €2.7billion has been invested in content production.

Vivendi and its business lines, with their diverse and broad content, are

aligned on a shared corporate social responsibility policy. Their commitment

goes well beyond the group’s cultural content, leading initiatives that beneﬁt

society and establish Vivendi as a driver of change, including “Create Joy”, a

solidarity program to support disadvantaged young people, its “Femmes

Forward” initiative to promote women in businesses, “Solidarité Climat”,

which funds community projects to protect the climate, and Paddington,

Unicef’s champion for children.

These undertakings above will create value and enable Vivendi to launch

new projects, attract and develop talent, and pursue further growth.

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2.2.Business model

STRATEGY AND VALUE CREATION

2.2.Business model

EBITDA

1,740

VALUE SHARING

Vivendi, Living Together

MUSIC VIDEO GAMESAUDIOVISUAL LIVECOMMUNICATION PLATFORM

Sales

and Fees

Subscription

and Advertising

Fees Sales and

Advertising

Advertising Sales

and Fees

Figures in millions of euros.

REVENUES

13,932

GOVERNMENT

917

SHAREHOLDERS

615

SUPPLIERS

9,250

EMPLOYEES

2,538

INVESTMENTS

IN CONTENT

UMG CANAL+ GROUP

974 1,751

INVESTMENTS/

DISINVESTMENTS

(1,609)

CAPEX

341

CLIENTS

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STRATEGY AND VALUE CREATION

Vivendi is a worldwide leader in media, content and communications.

In 2018, its revenues were €13,932million, a 11.3% increase from 2017, as

reported and a 4.9% increase at constant currency and perimeter, while

EBITA was €1,288million, a 33% increase from 2017, as reported and a

24.7% increase at constant currency and perimeter.

Vivendi operates in 78 countries and has 44,142 employees (including

Editis). Approximately 54.5% of its revenues originates from Europe, 31.5%

from the Americas, 10% from the Asia-Paciﬁc region and 4% from Africa.

Being a worldwide leader in media, content and communications means

operating in a variety of sectors. Vivendi is active in the music industry

(Universal Music Group), television and movies (Canal+ Group), communica-

tions (Havas), video games (Gameloft), digital distribution (Dailymotion) and

live entertainment and ticket sales (Vivendi Village).

In 2018, music, television, movies and communications accounted for

almost 97% of group revenues (details on the business models for these

operations are provided below). The value created is shared primarily

between employees and suppliers, with government and shareholders also

receiving a portion. Cash flow is then directed toward investments in

content, capital expenditures and ﬁnancial investments (see diagram on the

opposite page).

Vivendi’s balance sheet position is sound. The group had a net cash position

of €0.2billion (as of December31, 2018) and €3.7billion in available bank

facilities (as of February11, 2019).

Accounting for 43.2% of Vivendi’s revenues over the year, in 2018, UMG

posted revenues of €6,023million for an EBITA of €902million, and

employed 8,319 members of staff. UMG operates in more than 60countries.

With more than 50 labels (including Capitol Records, Republic Records,

Interscope Geffen A&M Records, Island Records, Decca Records, Deutsche

Grammophon, Blue Note Records and Verve Records) representing all

musical styles, UMG supports some of the biggest local and international

artists, from The Rolling Stones, U2, Taylor Swift, Lady Gaga, Drake and

Post Malone to Helene Fischer, Florent Pagny and Eddy de Pretto.

UMG has three main businesses: recorded music, music publishing and

merchandising. Accounting for more than 80% of revenues, its recorded music

business is devoted to the discovery and development of artists and the

marketing, promotion and distribution of their music. It also includes live

performances, sponsorship and the production of ﬁlm and television programs.

Recorded music distribution has undergone radical change. The industry has

shifted from the sale of physical media such as vinyl records, tapes (1963)

and CDs (1983) to digital downloads (1999), followed by music streaming

platforms (2007) that consumers can either pay for via subscription or use for

free. After a decade and a half of decline linked to digital transformation, the

sector began to recover in 2015 due to the success of streaming platforms

such as Spotify, Deezer, Apple Music, Amazon Music, YouTube Music, Qobuz

and Tidal. Although these platforms are available worldwide, different

countries have reached different stages in their digital transformation.

According to Nielsen’s 2018 mid-year report, in the United States, which is

the world’s biggest music market, streaming represented 66% of business

volumes. According to the Recording Industry Association of Japan report

published in September2018, however, despite Japan being the second-

largest global market, CDs and vinyl still account for approximately 70% of

sales. There is therefore still considerable growth potential for streaming.

UMG has signed licensing agreements with more than 400 digital services

around the globe. In 2018, subscriptions and streaming generated 54% of

total recorded music revenues.

Licensed streaming platforms earn recurring revenue, which is based on

consumption (i.e., how often a song is played). They also provide statistical

data, unlike the point-of-sale model, that stops generating revenue and data

after the initial sale. The streaming model has accentuated the importance of

catalog ownership. This is an advantage for UMG, which owns the biggest

recorded music catalog in the world (more than 3million titles).

Its music publishing entity, Universal Music Publishing Group (UMPG),

licenses titles for use in sound recordings, ﬁlms, television, advertising,

video games, and live and public performances. It also licenses

compositions for use in printed sheet music and song portfolios. Generally,

UMPG licenses titles after acquiring a direct interest in their copyrights by

entering into agreements with the artists. UMPG owns and controls a vast

catalog of original music and arrangements.

Bravado, UMG’s merchandising business, connects new and established

artists with brands. It offers full-service brand campaigns including product

creation, partnerships and promotion. The resulting products are sold

through global in-store and online retailers, specialty stores and concert

tours, and in limited-edition retail initiatives. Bravado also grants licenses to

an extensive worldwide network of third-party companies.

Accounting for 37.1% of Vivendi’s revenues over the year, in 2018, Canal+

Group posted revenues of €5,166million for an EBITA of €400million, and

employed 7,739 members of staff. It operates in approximately 30 countries.

Canal+ Group has three main businesses: pay-TV, free-to-air TV and cinema.

Pay-TV in France represents the biggest share of the group’s revenues. It has

16.2million individual and collective subscribers in France and worldwide.

In recent years, the French pay-TV market has been transformed by the

arrival of new entrants from inside and outside France and by new television

viewing habits (increased in-car consumption, catch-up TV and TV on

demand). Faced with these changes, Canal+ restructured its offers to make

them more modular (two basic bundles and two additional sports or movie/

TV bundles) and flexible (with or without a 12- or 24-month minimum

subscription period). Canal+ has also signed partnership agreements with

Internet service providers (Free, Orange and Bouygues) that include some

Canal+ channels in their subscription packages.In addition, the group has

developed myCanal, an app that allows live or catch-up viewing of programs

on all of the group’s French channels. myCanal is the French market’s top

online media/television/video platform, with 1.6million unique visitors per

day and more than 50million hours of video consumed each month.

Canal+ Group has also signiﬁcantly expanded its international operations. It

is active in Poland, Asia (Vietnam and Myanmar) and more than 25 African

countries. It currently has 7.8million individual subscribers outside France.

In France, Canal+ produces a general-interest channel (Canal+), showing

movies, sports, drama, documentaries, entertainment programs and ﬁve

specialized channels (Cinéma, Sport, Family, Décalé and Séries). The Canal+

channel is offered in Canal packages, which include the group’s proprietary

themed channels (around 20 in all) and 130 French and international third-

party channels. Canal+ notably broadcasts series under the Créations

Originales label. In 2007, it began producing Créations Originales series and

dramas such as Engrenages, Le Bureau des Légendes, Hippocrate and

Versailles. These critically acclaimed programs draw large viewerships in

France and have also achieved international success. For example,

Le Bureau des Légendes has been sold in more than 90 countries.

Canal+ earns most of its revenues from monthly subscriptions. Its offerings

are a clear success: more than 95% of subscribers sign up for a 24-month

period, and subscription cancellations fell to 13.6% at year-end 2018, a

decrease of 2.2 points compared to year-end 2017. Subscriptions are sold

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STRATEGY AND VALUE CREATION

directly on all distribution networks (Internet, satellite and DTT). Canal+

Group also has partnerships with telecom operators that offer some of its

channels to their customers (3.1million customers at year-end 2018).

Canal+ Group operates in the free-to-air TV market with three national

channels (C8, CNews and CStar). Its advertising division sells air time on

the group’s channels as well as on more than a dozen themed channels.

Canal+ Group also produces and distributes feature films and TV series

through its subsidiary Studiocanal. In 2018, its biggest hit, Sink or Swim

(LeGrand Bain), sold more than 4.3million tickets in France. Studiocanal

also manages one of the world’s largest audiovisual catalogs, with 5,500

titles from more than 60 countries.

Accounting for 16.6% of Vivendi’s revenues, in 2018, Havas had revenues of

€2,319million and an EBITA of €215million, and employed 19,622 members

of staff.

Havas has three business units specializing in advertising, creative and

consulting services (Havas Creative), health and wellbeing communications

consultancy (Havas Health & You) and media expertise and advertising

space sales (Havas Media).

To better meet client needs, Havas has implemented a client-centric “Together”

strategy organized by region. At the same time, it brings together the most

talented people from across all communications disciplines under one roof, the

Havas Village. Havas Group has 58 villages worldwide. In June2018, Havas

launched the “Together” strategy’s second phase by expanding its operations in

specialized areas such as performance marketing, public relations, blockchain

communications and social media.

Together, Havas Creative and Havas Health & You represent approximately

63% of Havas Group’s net income.They employ nearly 11,400 experts in

75countries and have agreements with groups, government organizations

and associations that generally run for one, two or three years. Contracts

for one-time projects may be as short as a few months.

Havas Media accounts for 37% of Havas’s net income. Online advertising

continues to grow. Aside from its extensive experience in media strategy

and advertising, Havas Media has developed specialized expertise in pro-

grammatic services, social media, mobile and geolocalized communications,

online performance marketing and data analysis. Havas Media earns its

revenue as a percentage of advertising space sales.

2.3.Value creation

A priority for Vivendi in 2018 was deﬁning a business model that promotes

value creation through its businesses over the medium and long term, and

expressing that model through a series of key indicators that reflect its

overall and non-ﬁnancial performance.

The approach draws first and foremost on the analyses provided by the

group’s subsidiaries at each stage of the value chain, from content creation

to talent discovery, publishing, production and distribution, as well as on

input from its external stakeholders.

It is used alongside components from the group’s strategy (Section 2.1),

business model (Section 2.2) and corporate social responsibility commit-

ments (Section 4.4), which together form a comprehensive overview of how

value is created and shared at group level.

Through this approach, Vivendi is able to show how its value model ﬁts in

with and complements the models applied by its subsidiaries, as well as

show the compatibility of ﬁnancial value creation and a positive societal

impact. Vivendi is consistent with the current trend of companies redeﬁning

their role in society, such as the draft PACTE law in France.

2.3.1. VALUE CREATION APPROACH

Vivendi’s value creation approach is overseen by a steering committee and

coordinated by the Corporate Social Responsibility (CSR) and Compliance

Department. It is being rolled out gradually and has currently been

implemented in three group subsidiaries: Universal Music Group (UMG),

Canal+ Group and Gameloft. The Havas Group, Editis and Live activities at

Vivendi Village will adopt the same approach in 2019.

To identify aspects of value creation at the very heart of Vivendi’s business,

the value and financial performance of the group’s activities have been

thoroughly analyzed through interviews with representatives from each

subsidiary, establishing key ﬁnancial value drivers and strategic business

priorities. The contribution that each subsidiary makes to society was also

analyzed in terms of value created.

In addition to this internal review, an external analysis based on market

studies and input from the group’s stakeholders was carried out. Each

subsidiary’s speciﬁc business and societal issues were then incorporated

into a materiality matrix, which emphasized the convergence between the

business and its societal impact and helped prioritize the key issues to be

addressed.

An infographic was drawn up to illustrate the drivers of value creation in

each subsidiary, including the components of each business, the associated

expertise, those who benefit from value sharing and the contribution to

society.

The analysis of financial and non-financial indicators helped establish

baseline indicators for each subsidiary. The review’s ﬁndings and outcomes

were compared against the CSR commitments, so as to improve the way in

which the selected indicators are presented.

In 2019, the CSR and Finance Departments will work to take the same

approach one step further by implementing better integrated ﬁnancial and

non-ﬁnancial reporting. The group will also consider how best to align its

development goals with the value creation drivers identiﬁed. Once this work

has been carried out, a strategic report will summarize all the information

related to value creation for the Vivendi group.

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2.3.Value creation

STRATEGY AND VALUE CREATION

2.3.2. VALUE CREATION DRIVERS FOR VIVENDI

Vivendi’s value creation drivers have been identiﬁed from the ﬁnancial value

models and societal contribution models used by the subsidiaries taking

part in the approach in 2018. The ﬁnancial value models show Vivendi’s

presence along the entire value chain. The seamless integration of UMG’s

recorded music and music publishing activities, Canal+ Group’s combination

of audiovisual content production and distribution, and Gameloft’s in-house

video games design and development capabilities illustrate this positioning.

The societal contribution models reﬂect the close alignment of Vivendi’s

business and CSR commitments.

Talent

discovery

Global talent

development

Promotion of catalog and

intellectual property

An attractive

editorial line

Talent discovery

Being able to identify talented people who will enhance the originality and

quality of the group’s content and services and suit its customers’ cultural

sensibilities is a key source of value for Vivendi. Teams with recognized

expertise in their business sectors are tasked with discovering unique, creative

personalities for music, audiovisual content, movies and video games.

Their ability to analyze artistic and technological trends and forge partner-

ships with innovative players to stay one step ahead in creative projects is

also essential for detecting the talent of tomorrow. Added to this is the

capacity to design new formats or value-creating business models that will

increase the group’s potential for attracting new talent. Lastly, the resources

at the group’s disposal to offer opportunities for promotion and development

also add to its attractiveness for new talent.

Global talent development

Experienced artists and talented newcomers alike receive artistic and

media support from specialized teams, as well as having access to the

group’s infrastructure to bring their projects to life. They enjoy exposure to a

wide audience due to the group’s recording studios, venues for live

performances and capacity to promote artists and broadcast their work on

an international scale.

Collaboration between the group’s talent and “client brands”, where musicians

join forces with advertisers or video game producers, helps boost their renown,

and the group’s expert understanding of shifts in trends and consumer

expectations in the market segments helps cement the artist’s success.

Promotion of catalog and intellectual property

Maintaining the wealth, quality and diversity of the group’s music, ﬁlm and

video game catalogs is crucial to meet user expectations for local content

that matches their sensibilities. The group’s extensive distribution

capabilities, drawing on distribution networks and partnerships with digital

players, help ensure that its multi-genre catalogs reach audiences all

around the world.

To use its content in a way that best meets user expectations, the group

invests in innovative recommendation programs to steer users to its catalog

of ﬁlms and series or match them with a speciﬁc style of music.

Marketing artists’ catalogs and digitizing older works to make them acces-

sible to new generations is a way of supporting the continued development

of established artists, encouraging funding and risk-taking for more newly

discovered artists and broadening access to the work of artists whose

repertoire has a more limited audience.

The group promotes the work for which it holds the intellectual property (IP)

rights with a view to developing brands that are guaranteed to be a success

and building a robust brand portfolio. To this end, Vivendi has set up an IP

Committee which meets regularly, bringing together representatives from

its executive management and subsidiaries to discuss the promotion of

brands for which the group holds the IP rights, either by capitalizing on

opportunities to boost the visibility of its existing brands (e.g., Paddington

and L’Olympia, festivals) or by acquiring established brands in line with its

business. The subsidiaries contribute to promoting brands within their own

business lines (e.g., turning a series into a film) or in collaboration with

other subsidiaries (e.g., a video game inspired by a movie). Designing

value-creating cultural events that can be rolled out on an international

level, such as the Crxssing festival, will also be the focus of discussions in

2019. In addition, the arrival of Editis in the group opens up new prospects

for promoting IP on literary works.

An attractive editorial line

Vivendi’s editorial line is underpinned by the production of an ambitious and

highly diverse range of content that adds to the originality of the group’s

catalogs, as well as by the introduction of new forms of entertainment. This

editorial approach means that the group is able to showcase a varied,

high-quality and competitive offering on the market.

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STRATEGY AND VALUE CREATION

2.3.2.1. Value creation for UMG

Discovering and supporting future musical talent is one of

the key characteristics of UMG’s value creation model. Its

labels and A&R teams are essential assets for identifying stand-

out personalities in all musical genres who match popular music trends. They

leverage their expertise to shepherd new musical projects in UMG’s catalog

to success. Their presence all over the world means they can identify local

artists that suit the sensibilities of a multicultural audience. It was with this

in mind that UMG created two new units in Africa in 2018 to support young

artists on the African music scene.

At UMG, being able to adapt to the different needs of individual artists to

attract and retain talent means adopting a ﬂexible approach. Artists have

the option of signing with a label for comprehensive support, signing a

music services deal (e.g., digital marketing and distribution), or retaining

their independence through the digital distribution platform, Spinnup.

UMG’s teams are also always on the look-out for talent that is in tune with

the latest developments in technology to remain at the forefront of inno-

vation and offer fans cutting-edge listening experiences. It works closely

with music tech startups through incubator programs such as Abbey Road

Red and the Accelerator Engagement Network (see Section 4.4.1.4), which

specialize in virtual and augmented reality technologies.

The group’s wide range of expertise means it can provide

artists with artistic and media management from track and

album releases to live events, merchandising, music publishing,

audiovisual and film rights management, and brand partnerships. This

diversified, comprehensive support is what makes UMG’s services so

unique, and positions the group’s labels among the most dynamic and

innovative offerings on an international scale.

Fan bases are essential stakeholders in the value creation chain. The

momentum they generate is key to promoting artists and their music. UMG

places particular importance on developing more interaction between fans

and artists and increasing the numberof innovative experiences to make

this connection even stronger. Its merchandising activity also builds on

these relationships with innovative products tailored to each artist and their

brand.

Data analysis is a key asset for UMG. Its “artists insight, consumers insight,

brands insight” approach means it has a better understanding of its artists,

is able to meet audience expectations more effectively and is better

equipped to identify potential collaboration between artists and brands that

will create value for both sides.

Creating value for artists also means gaining maximum exposure for their

work, which is why UMG has forged strategic partnerships with major digital

streaming platforms (e.g., Apple, Spotify, Amazon, Pandora and Google) and

has music video licensing agreements with social media networks.

UMG’s deep catalog of titles is also highly diverse, due in

particular to the group’s investments in local artists. UMG

optimizes the reach of its music assets by developing different

ways for users to access content.

To maximize the potential of its catalog, UMG has invested in a data

analysis program that is based on musical descriptions. By making searches

more ﬂuid using criteria such as genre, mood, tempo and instrumentation,

the system makes discovering new music a much more user-friendly

experience when using streaming services and voice activated devices (see

Section 4.4.1.3).

Mindful of the value of its catalog, UMG conserves and digitizes analog

tapes from its archives, produces documentaries on the lives and works of

iconic artists such as Pavarotti and The Beatles, and partners with museums

for exhibitions on the theme of music.

As part of its strategy to optimize its catalog, UMG also protects the

accompanying rights from infringements that undermine its value. To limit

access to unlicensed music content and prevent music being copied from

streaming sites, UMG has put measures in place in consultation with

various music and digital industry players.

IP rights on original works and covers have a signiﬁcant ﬁnancial value. In

particular, the group beneﬁts from its IP rights when music is used in ﬁlms,

adverts, television programs and content on new media.

UMG’s editorial line gives listeners access to a diverse

range of genres, allows them to share the artists’ emotions

through music and provides audiences with entirely new musical

experiences. It also plays an important role in showcasing the group’s

wealth of content and artists.

Supporting talent takes signiﬁcant investment. In the group’s top ﬁve markets (United States, United Kingdom, France, Germany and Japan), 34.9% of UMG’s

marketing and recording investment is dedicated to artists releasing their ﬁrst album.

UMG’s catalog reﬂects audience desire for content that is highly diverse both musically and culturally, with content by local artists in their own country

accounting for nearly 60% of sales, contributing to total revenues of €6,023million in 2018. UMG’s music publishing business has more than

184,000 agreements with songwriters presently in effect which contributes to the richness of the catalog.

UMG takes a multi-pronged approach to supporting and promoting its artists, as demonstrated by its €3,4billion in investments for artistic development,

192merchandising deals and international campaigns partnering artists with brands in more than 70countries to date. UMG’s ability to adapt to new ways

of listening to music and goal to continue increasing the reach of its content are reﬂected in the group’s more than 400partnerships with digital platforms and

the fact that digital sales account for 63.7% of its recorded music sales.

Finally, the digitization of 85,000 audio master recordings from analog tapes in its archives and its music videos makes the group’s back catalog even more

valuable.

Performance indicators

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2.3.Value creation

STRATEGY AND VALUE CREATION

A unique culture of labels

helping develop

and strengthen

an artist’s career

An integrated and

comprehensive value

creation process

VALUE

CREATION

Early investment

Investing in artists at the beginning of their careers,

including production, creative development and tour

support

Content creation

Combining the strength of our labels and publishing

business to bring together recording music artists,

songwriters and producers to work together on music

creation

Marketing and promotion

Using the expertise of our labels to help artists stand

out in a sea of crowded content platforms and connect

with fans around the world

Long-term career development

Developing and nurturing artists over the course

of their entire career in our various labels

Protecting artists’ rights

Protecting IP, making artists’ voices heard, lobbying

for fair compensation, fighting piracy, supporting

trade organizations

Helping local artist reach a global audience

Operating in more than 60 countries with more

than 400 distribution partners around the world

Supporting all aspects of an artist’s career

Providing artists with world-class resources beyond

recorded music and music publishing (merchandising,

licensing, audiovisual, artist management, touring,

brand management, events and sponsorship…)

Technological excellence

With the greatest access to industry data

and dedicated teams in analytics and insights,

UMG offers a wide-ranging approach to integrating

data into an artist’s creative and business decisions,

helping create partnerships between artists,

media and brands

ARTISTS

Fulﬁlling music demand for all types

of consumers and audiences

Offering our music through digital radio, ad-supported

or subscription streaming, CDs, downloads and vinyl

to provide fans the music they love in whichever way

they choose to consume it

Promoting music from all genres

Giving audiences great music of all genres, promoting

languages and values, self-expression, feelings

and ideas and bringing people together with music

Protecting a priceless heritage

Preserving decades of cultural heritage and artistic

expression for generations to come – and fostering

tomorrow’s cultural treasures

Connecting artists and fans

UMG brings fans closer to the artists they love,

through social media, meet-and-greet events,

pop-up stores, promotions and brand partnerships

Preserving culture

Music is an important part of local cultures

and UMG invests in local content development

around the world

Supporting charitable efforts

Music has the unique ability to inspire and unify.

Our companies and artists use music to do good

around the world

FANS & AUDIENCE

Wide variety of distribution partners

400+ digital partners around the world including Apple,

Spotify, Amazon, YouTube, Facebook and local partners

such as Tencent and Anghami; physical distribution from

large chains to small, independent physical retailers

Partnering with independent labels

Partnership with independent labels to help support

their artists through both distribution and other more

comprehensive partnerships

Anticipating and fueling technological transitions

By working with a wide range of technology partners,

we anticipate and help make possible the many ways

music will be enjoyed in the future

Early-stage venture partnerships

Helping develop and grow new music-based businesses

Licensing music for use in other forms of content

Partnerships that extend well-beyond the music

industry, including film and TV, video games, and sports

Emerging music markets

Working with partners in emerging music markets to

establish legitimate business models for selling music

where piracy was previously dominant

BUSINESS PARTNERS

UMG: music with and for the world

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2.3.Value creation

STRATEGY AND VALUE CREATION

2.3.2.2. Value creation for Canal+ Group

At Canal+ Group, talent-spotting teams tasked with disco-

vering and supporting artists also draw on the organization’s

analyses of entertainment trends. This expertise is vital for

bringing presenters, columnists and comedians to the group’s channels on

the small screen, where they contribute to its signature style. Canal+

Group’s pool of scriptwriters, short features unit, digital creation hub and

Création Décalée label actively work to create original and innovative

audiovisual content.

The group’s support for young talent in the ﬁlm industry is another part of its

value model. Investments by Canal+ and Studiocanal in debut and second

ﬁlms foster diversity and fresh ideas in the channels’ catalogs. The group

boosts its attractiveness to future talent by setting up tailored financial

partnerships (payment of overheads or minority stakes in exchange for ﬁrst

refusal rights), providing support to talent incubator programs and developing

training courses to unlock the potential of young screenwriters and authors.

The group applies a similar approach outside of France: Canal+ International,

which has teams in Africa, Vietnam, Poland and Myanmar, focuses in

particular on writers of TV dramas and series and producers of documen-

taries and ﬁlms in those countries and promotes locally created content

with an editorial line that takes cultural sensibilities into account (see

Section 4.4.1.2).

Newfound and established artists alike are supported in

their careers. They also beneﬁt from a wealth of opportunities

for development, such as collaborative projects with professio-

nals from the group, the possibility of using event venues such as theaters

and concert halls, and the option to capitalize on the group’s various

platforms to develop new content (e.g., light entertainment TV shows,

movies and series). Through these initiatives, artists are able to share the

content they create and win the loyalty of audiences.

The group also offers a numberof pathways to talented creatives with a

view to (i) increasing their exposure, (ii) promoting their work via partnerships

with new artists to acquire distribution rights for their shows and enhance

the group’s lineup, (iii) participation in the production of an event and/or (iv)

funding for a feature ﬁlm by an established ﬁgure.

Through Studiocanal, Canal+ Group has a catalog of more

than 5,500 titles and manages the local rights to several

thousand ﬁlms, predominantly in Germany, France and the United

Kingdom. Due to its policy of investing in local content, Canal+ International

has built up a catalog of works representative of its subscribers’ cultural

sensibilities.

It promotes its content through high-performing distribution systems for an

innovative, surprising and inviting user experience, tailored to audiences who

view content in a variety of different ways. For example, myCanal and Canalplay

take these viewer expectations into account in their digital packages.

On an international level, the group’s content in Africa is also broadcast in line

with new viewing habits, using the myCanal platform along with a mobile-only

video-on-demand service in partnership with Iroko, a major African

entertainment company. Roll-out of a ﬁbernetwork in African countries where

the group operates will allow for ultra-high-speed distribution and facilitate

access to Canal+ International’s content. In addition, Canal+ Group has

strengthened its stake in Thema, a company that distributes general-interest,

special-interest and local channels to cable, satellite and IPTV operators in

France and abroad, as part of its aim to optimize the reach of its diverse

offering.

Showcasing works produced under its own brand and maximizing the

potential of franchises it has acquired is another part of Canal+ Group’s

strategy to promote its content. With this in mind, the Paddington franchise

has inspired a movie soundtrack, video game, theme park ride and TV

series, which illustrates the multitude of ways to position a brand to a wide

audience and generate ﬁnancial value from the associated IP rights.

This strategy is complemented by measures to protect audiovisual content

and ﬁlms from piracy, which can greatly undermine their value. The group

now favors a commercial approach rather than digital watermarking for

tackling piracy. In particular, it offers attractive tariffs to young audiences,

runs campaigns to raise awareness about the consequences of piracy and

puts in place measures to limit ﬁnancing from advertising for illegal sites.

The editorial line of Canal+ Group helps boost the attrac-

tiveness of the group’s content by prioritizing original, quality

audiovisual and ﬁlm creations, reﬂecting the cultural diversity of

its audiences, meeting viewer expectations with entertaining or meaningful

programs and adapting to new consumer habits.

The emergence of new talent in the motion picture and audiovisual industry is part of Canal+ Group’s value creation approach. In 2018, this was reﬂected in its

pre-purchasing policy, providing support to 15 debut and 25 second ﬁlms by young directors. Alongside the close to 600 original works that the group

co-ﬁnanced or pre-purchased, these ﬁlms together form a wide array of content to offer subscribers. The group’s policy of investing in original, diverse content

is supported by programs funding totaling €3 billion, with more than 50% for local content.

Canal+ Group leverages digital innovation and adapts to new viewing habits to promote its content and catalog of movies. With its platform MyCanal,

Canal+ Group is a pioneer of digital technology in Europe.

As a result of its policy of innovation and the diversity of its content, the group has won 16.2million subscribers, close to 50% of whom are outside of France.

This reflects the international development of the group’s activities, with coverage across 70% of the world. Canal+ Group’s international expansion

is strengthened by the 45 nationalities. Support is also given to international professionals who work with the group from time to time. In 2018, they received

more than 1,500 hours of training to build on their expertise in the audiovisual ﬁeld.

Canal+ Group also has a policy to conserve and promote its movie assets by restoring and digitizing works in its catalog. In 2018, 162 ﬁlms beneﬁted from these

measures.

Performance indicators

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2.3.Value creation

STRATEGY AND VALUE CREATION

Canal+ Group: unique creativity that transcends borders

Actors, singers, comedians, sportspeople, authors,

journalists, presenters, developers and producers

Discovery, incubation and financing

Original content expertise

Editorial concepts, strong brand image in the production of films

and documentaries and processing of information

Canal talent factory

Support, exposure in television and film, continual development

over the production’s entire life cycle

Development of regions

Introduction of new technologies, development of infrastructure,

engagement with local communities and detection of local talent

Support for the movie and audiovisual industry

Financial contribution to the audiovisual industry, training of talents,

support for the CNC in France, audiovisual production in France and

abroad

Sports broadcasts

Access to the best international championships all over the world

and exposure to more niche sports

Fight against piracy

Internal watchdog, dismantling of piracy networks, team awareness,

support for public initiatives and digital fingerprinting solutions

OUR TALENT

Create, trade and curate

Attractiveness, engagement, passion, an ability to create and

produce quality drama, documentaries and sports programs, and

to purchase and broadcast the right content for the right regions

Sustainable operations

Exploration, innovation, catalog, IP format and audiovisual

heritage

Distribution specialists

Expertise, analytical marketing and distribution network

management

Technology and data

Satellite, DTT, multi-platform, bundling, promotion, protection,

customer recommendations, in-home and on-the-go services,

OTT, reception quality, diversified range of technology and fiber

offerings in Africa

IT partnerships and development

Directly operated versus operation via Internet service providers

Demand for entertainment

High consumption of television, entertainment, movies, series,

sports, culture, games and music

Individual and collective use

Pay-TV and free-to-air TV, video on demand, replay and multi-device

Something for everyone: content that follows

but also sets trends

Family, young people, independent content, trust, appropriate

content and protective technology

Celebration of different cultures, collective imagination

Cultural significance, history and heritage and sensibilities

Adaptable commercial approach

Premium or not, prepaid or not, integrated offer (TV + Internet)

adapted to local demand, ticket prices adapted to local

purchasing power

OUR BUSINESS

OUR AUDIENCES AND SUBSCRIBERS

OUR CONTRIBUTIONS

VALUE

CREATION

Technological

infrastructure

and adaptable

business model

Broad access

to culture and original,

high-quality content in

France and abroad

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2.3.Value creation

STRATEGY AND VALUE CREATION

2.3.2.3. Value creation for Gameloft

Discovering and training talent are key to building teams

with the necessary expertise to create video games. While the

group’s other business lines have value models largely based on

collaboration with external talent, Gameloft’s approach relies essentially on

internal resources. Emphasis is placed on identifying artists and technical

proﬁles who have the skills needed to create an innovative, high-quality

user experience. These people are based in Gameloft’s 19 development

studios in both North and South America, Europe and Asia. The teams’

international mix is essential for producing games inspired by scenarios that

are in line with their players’ cultural backgrounds.

In particular, the talent scouting process draws on collaborations with schools

and universities that offer courses in video games or in the kind of skills

necessary to develop and create games, as well as meetings held at student

forums and challenges with schools. Outside France, talent is identified

through opportunities linked to local ecosystems. In Brazil, Gameloft has

opened a video game studio in collaboration with an association of young tech

aficionados. In Vietnam, its development studio joined forces with a video

game association to share in their experiences.

Supporting internal talent to keep artistic and technical skills at their very

best is key, since the young demographic of Gameloft’s employees and

competition between content creators necessarily foster job mobility.

Gameloft pays particular attention to adapting existing skills through

partnerships with major digital players to help its teams master new gaming

environments.

The expertise of Gameloft’s teams goes beyond simply

developing games. Since transforming its business model,

Gameloft now sells advertising space in mobile apps, from

conventional formats such as banners to more innovative solutions, like

mini-games and interactive videos. It is also developing a mobile e-sport

offering with the aim of attracting a wider audience to this type of

entertainment. The technology draws on the skills of internal talent, who

have to meet gameplay criteria speciﬁc to these kind of games, which have

traditionally been developed for PCs.

Recognition from Apple, which used the Asphalt 9: Legends game to

present its latest product, and Google, which chose Modern Combat Versus

to appear in the list of recommendations in its app store, is a fitting

illustration of the quality of Gameloft’s expertise.

In the studios, employees come up with new and innovative ideas and the

most creative concepts for games are then selected for development to

enhance Gameloft’s line-up.

Gameloft has a broad catalog of mobile games developed

by its internal teams or through agreements with partners that

hold international franchises. This diversity means that it covers

an extensive range of genres to meet the expectations and sensibilities of a

wide audience. Gameloft’s studios have created a distinctive identity to help

make the company’s games instantly recognizable, strengthening the

catalog’s position as a benchmark in innovative, quality content in the

gaming, digital and entertainment industries.

Gameloft continues to market its back catalog and update successful games

to make the most of this resource over the long term. In the same way, the

multi-channel approach (app stores and telecom operators) Gameloft uses

to distribute its content contributes significantly to profitability, since it

gives players multiple ways to access its games.

Its data research and development program is essential for analyzing user

behavior and making recommendations on how to retain players and best

use the data it collects to improve its gaming experience. It also helps

target advertising to make it more effective.

Keen to protect the value of its catalog, Gameloft has put in place measures

to ensure it reacts quickly to remove any copies of its games that appear on

illegal sites. At the same time, it has a surveillance system to analyze and

put a stop to fraudulent behavior from certain players.

Game franchises designed and developed in-house represent attractive IP.

This IP is optimized through partnerships which use the brands and help build

their reputation. Collaborations come in all manner of forms. In games

involving car racing, for example, automobile manufacturers may promote

their brands within the game to attract players to their iconic models.

Similarly, the company works with other content creators to include their

characters in its franchises, such as the ﬁgures from The King of Fighters,

produced by SNK which appeared in Gameloft’s Dungeon Hunter Champions.

Gameloft also leverages cross-sector opportunities within the Vivendi group

to market its IP. The acquisition of the Paddington franchise resulted in the

Paddington film produced by Studiocanal, whose theater release was

accompanied by the Paddington Run video game. Additionally, a talent

signed by UMG contributed to the music used in the latest version of

Asphalt 8, providing a unique entertainment experience for players.

The editorial line offers a catalog of multi-genre games

accessible to everyone, forming a unique, immersive world for

gamers.

Accessibility is the key to Gameloft’s editorial line and its catalog features content

for all different types of mobile devices; content that covers an exhaustive range

of genres from different worlds and prestigious partners with the emphasis

always on offering a quality experience.

Gameloft has an extensive games catalog covering a variety of genres. Games with IP rights held by Gameloft represent 63% of its catalog, with the rest made

up of games associated with brands from major development studios. Development of the portfolio and game quality is underpinned by investment, with

production expenses accounting for 63% of total costs. High-success games are a real asset in the catalog, with 15 games attracting more than 200,000 active

daily players.

Gameloft’s success outside of France is partly due to internal talent who are able to adapt the content of games to local player expectations. The presence of

67 nationalities, where 95% of employees are of a nationality other than French, means Gameloft is able to develop games in line with its players’ cultural

sensibilities. With more than 40% of new employees hired in 2018 under the age of 26, Gameloft has the internal expertise needed to best understand gamer

proﬁles and can adapt its games accordingly.

Advertising sales accounted for 10% of Gameloft’s revenues, which totaled €293million. Revenues are structured by the distribution model, with 72%

generated through OTT distributors (app stores) and 19% through telecom operators.

Performance indicators

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2.3.Value creation

STRATEGY AND VALUE CREATION

A pool of creative talent

Discovery and incubation of talent, training,

and cultural diversity in the studios

Diversity in inspiration: Gameloft

at the heart of the trend

Innovation process, trend awareness,

catalog, IP/games under license

Regions and ecosystem

Attractiveness of gaming, dynamic

development of different regions

and local engagement

Technical and technological expertise

Training, development of expertise,

programming, analytical marketing

and quality developers

Technology and data

Collection and application of data,

user protection, and optimization

of video games

Distribution partnerships

App stores, operators, manufacturers

and integrated games

Celebration of different cultures

and collective imagination

Cultural context and significance, history

and heritage, awareness and licenses

A content offering

with something for everyone

Family, young people, social skills,

underlying values, appropriate content

and protective technology

High expectations for entertainment

Free time, video games, music and

audiovisual content, leisure society, e-sport

and video games accessible on all devices

Multiple uses

Digital, interactive, multi-player networks,

mobile games and devices

Infrastructure and devices

Collection and application of data, user

protection and optimization of video games

Freemium offerings

App stores, operators, manufacturers

and integrated games

Technological

excellence

and an innovative

business model

Gameloft: gaming for everyone

BUSINESS

PLAYERS AND AUDIENCES

VALUE

CREATION

Original content, adapted

for different cultures

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3.1. Businesses

1 2

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BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

3.1. Businesses

3.1.1. MUSIC

Music is Vivendi’s most signiﬁcant asset by revenue. Its ﬂagship subsi-

diary, Universal Music Group (UMG), is a driving force in the global music

market, which achieved its fourth consecutive year of growth in 2018.

UMG is a dynamic company that continually discovers talent and con-

stantly adapts to new forms of music consumption.

Across all musical genres, UMG is home to the greatest local and interna-

tional artists of all time, including The Beatles, Rolling Stones, U2,

Andrea Bocelli, Lady Gaga, Helene Fischer and more, as well as many of

the biggest artists of the year, such as Drake, Post Malone, Kendrick

Lamar, Imagine Dragons and Ariana Grande.

UMG has three main operating businesses: recorded music, music pub-

lishing and merchandising.

The recorded music business discovers and develops recording artists,

marketing and promoting their music across a wide array of formats and

platforms. Its activities also extend to other areas, such as live events,

sponsorship, ﬁlm and television.

The music publishing business discovers and develops songwriters and

owns and administers the copyright for musical compositions used in

recordings, public performances and related uses, such as films and

advertisements.

The merchandising business produces and sells artist-branded and other

branded products through multiple sales channels, including fashion

retail, concert touring and the Internet. Its activities also extend to other

areas, such as brand rights management.

3.1.1.1. Recorded Music

Discovering and developing talent

UMG’s recorded music business’ primary focus is the discovery and

development of artists, and the marketing, distribution, sales and licen-

sing of audio and visual content. With a diverse range of labels and a

global presence in more than 60countries, UMG is the world’s largest

international recorded music company and the leader in many of the

world’s major music markets, including the United States, the United

Kingdom, France and Germany.

1. Imany

2. Dadju

3. Louane

SECTION 3. BUSINESSES – FINANCIAL COMMUNICATION – TAX POLICY AND REGULATORY ENVIRONMENT

3.1. Businesses

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BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

UMG has partnered with both local and global streaming platforms to

help establish legal music markets in countries that have not traditionally

been major markets for recorded music sales, such as the BRIC countries

(Brazil, Russia, India and China), Latin America, Africa, the Middle East

and EasternEurope. These partnerships have led to greater investment

in developing local talent and have helped make music more accessible

to fans.

UMG’s diverse range of labels helps the business consistently cater to

changing consumer trends. Its major recording labels and label groups

include Capitol Music Group, Interscope Geffen A&M, Republic Records,

Island Records, Def Jam Recordings, Universal Music Group Nashville,

Universal Music Latin Entertainment and Polydor, and its classical and

jazz labels include Blue Note Records, Decca, Deutsche Grammophon

and Verve.

In 2018, UMG’s best-selling artists ranged from global superstars including

Drake, Post Malone and The Beatles, to national stars like Dadju, Kendji

Girac and Damso in France; Helene Fischer, Herbert Grönemeyer and

Bonez MC in Germany; King & Prince in Japan; and Luis Fonsi and

J Balvin in Latin America. Soundtracks also contributed to UMG’s success

in 2018, including those from Black Panther, A Star is Born and Bohemian

Rhapsody.

For the year:

3 On Apple Music, UMG artists held the top five positions –and

14 of the top20– on the Top100 Global Songs chart. Drake was

No.1 on both the Top Global Albums chart and the Top Global

Songs chart.

3 On Spotify, UMG had every one of the Top 5 global tracks, the top

four artists and the top three albums. Drake was the most-

streamed artist, had the most-streamed track (God’s Plan) and the

most-streamed album (Scorpion). Ariana Grande was the most-

streamed female artist and J Balvin was the most-streamed Latin

artist.

3 According to Nielsen, in the US, Drake’s God’s Plan was the no.1

song and Taylor Swift’s Reputation the no.1 album on Billboard’s

year end charts. In addition, UMG had the top three albums, six of

the Top 10 songs and six of the Top10 albums.

3 According to GfK Entertainment, in Germany, UMG had all three of

the best-selling albums of the year with Helene Fischer’s self-titled

album, originally released in 2017, at No.1 for the second consecu-

tive year, Bonez MC & RAF Camora at No.2 and Gzuz at No.3.

3 Universal Music France had the most-streamed artist (Damso) and

most-streamed track (Vald’s Désaccordé) on Spotify France, as

well as the most-streamed album of the year (Dadju’s Gentleman 2.0)

on Deezer France and Apple Music France.

3 UMG had four of the Top5 most-streamed artists in the UK,

according to the Ofﬁcial Charts Company, with Drake, Eminem,

Post Malone and Ariana Grande, and had six of the Top10 albums.

Sales from prior releases reinforce UMG’s recorded music revenues each

year, and UMG has the most comprehensive catalog of recorded music in

the world. This wide array of timeless performers includes ABBA, Louis

Armstrong, Charles Aznavour, Daniel Balavoine, The Beatles, The Beach

Boys, The Bee Gees, Andrea Bocelli, Neil Diamond, Guns N’ Roses, Elton

John, Bob Marley, Nirvana, Queen, The Rolling Stones, André Rieu, Frank

Sinatra and Amy Winehouse.

Supporting new trends

With fans around the world increasingly connected on mobile devices,

recorded music consumption is reaching new highs. While UMG’s products

continue to be sold in physical form, and physical sales are still very sig-

niﬁcant in certain markets, the majority of consumption has now shifted

from an ownership model (e.g., consumer purchases of vinyl, Compact

Discs or downloads) to an access model (subscription and ad-supported

streaming formats), with streaming revolutionizing the listening expe-

rience for music lovers and transforming the global recording industry.

The strong growth behind subscription and ad-supported streaming in

2018 stems from a competitive and healthy market. UMG plays a very

active role in promoting the continued development of new digital ser-

vices and consumer offerings, and licenses more than 400digital services

around the globe. The emergence of streaming services has opened up

legitimate music markets in areas once dominated by piracy.

In 2018, UMG signiﬁcantly expanded its operations within Africa with the

launch of two strategic new divisions in Côte d’Ivoire and Nigeria.

Streaming has also led to the globalization of local repertoire. As a result,

UMG continues to grow its investment in content around the world. For

example, in 2018, UMG signed Kris Wu, one of Asia’s biggest stars and

an artist whose creative success spans music, ﬁlm and television, to an

exclusive international recording agreement, excluding Japan and Korea.

UMG also signed the South Korean quartet Blackpink outside of Asia,

currently the highest-charting female K-pop act in Billboard Hot100 history.

UMG is also extremely active in developing new sources of revenue,

including through advertising and sponsorship agreements, as well as

through the production and exploitation of audio-visual content.

3.1. Businesses

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BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

Universal Music Group &Brands (UMGB) continues to increase revenue

streams across a diverse set of partners in more than 70countries and

across a variety of industries, including the consumer goods, airline,

automotive, banking, hotel, luxury goods and telecommunications indus-

tries. It specializes in insight consultancy, strategic partnerships, branded

content, events and experiences, social networks and media support.

Offering a single entry point to the complex world of entertainment,

UMGB helps its clients deﬁne strategies to improve their voice in music

and culture, increase audience reach and build brand awareness and

differentiation to drive long-lasting engagement with customers and fans.

In the audio-visual segment, UMG is focusing on improving the exploita-

tion of existing content and rights, capturing live events and creating new

content formats. From long-form content (including music documentaries,

feature ﬁlms, live event musicals, music-themed television series and

reality shows) to short-form content (including live event streaming, viral

content and other “behind the scenes” footage, as well as ofﬁcial music

video clips), UMG is accelerating the monetization of video assets.

3.1.1.2. Music Publishing

Universal Music Publishing Group (UMPG) is one of the world’s largest

music publishing companies, acquiring the rights to musical compositions

(as opposed to recordings) and licensing those compositions for use in a

variety of formats.

UMPG licenses musical compositions for use in sound recordings, ﬁlms,

television, advertisements, video games, as well as live and other public

performances, such as broadcasting and film performances. It also

licenses compositions for use in printed sheet music and song portfolios.

Generally, UMPG licenses compositions after acquiring a direct interest in

their copyrights by entering into agreements with composers and authors.

The company also administers musical compositions on behalf of third

parties, which can include other music publishers or authors.

UMPG owns and controls a vast catalog of original music and arrange-

ments and works closely with studios and production companies to make

music available for use in ﬁlms, television, advertising and new media

industries, as an alternative way of utilizing their licenses.

The company’s global publishing catalog contains more than three million

owned and administered titles, including some of the world’s most popu-

lar songs. Major songwriters and artists whose works are represented

include Adele, André Rieu, Ariana Grande, The Beach Boys, the Bee Gees,

Billie Eilish, Billy Joel, Britney Spears, Bruce Springsteen, Carly Simon,

Charles Aznavour, Coldplay, Demi Lovato, Diane Warren, Dua Lipa, Elton

John, Eminem, Florence + the Machine, Halsey, Harry Styles, H.E.R.,

Imagine Dragons, Irving Berlin, Jack White, Jacques Brel, J Balvin,

Justin Bieber, Justin Timberlake, Kane Brown, Keith Urban, Mumford &

Sons, Mariah Carey, Maroon 5, Metro Boomin, Nick Jonas, Nicki Minaj,

Paul Simon, Pearl Jam, Post Malone, Prince, Quavo, Red Hot Chili

Peppers, R.E.M., Romeo Santos, Sam Hunt, Selena Gomez, Shawn

Mendes, SZA, U2 and Zedd, among many others.

Throughout 2018, UMPG signed and expanded partnerships with a spec-

trum of talent ranging from legends including Elton John, Paul Simon and

Billy Joel, to today’s superstars including Post Malone and Halsey, to rising

phenomenons Billie Eilish and Tierra Whack, and many others. UMPG also

reinforced its position as the global publisher of choice for film and TV

studios. In 2018, UMPG secured landmark deals with Lionsgate, Paramount

Pictures, Disney Europe and Legendary Pictures. This builds upon UMPG’s

existing relationships including Warner Bros. Entertainment Studios,

Universal Pictures, HBO, DreamWorks Animation, NBC Universal TV,

Amazon and Sesame Workshop, among others.

3.1.1.3. Merchandising

Bravado is UMG’s wholly-owned, global, full-service merchandise and

brand-management company. It works closely with new and established

artists as well as both longstanding and more recent entertainment clients

to create comprehensive campaigns that include innovative products,

partnerships and promotion. Merchandise is sold through global in-store

and online retailers, specialty stores and concert tours, along with limited-

edition retail experiences.

Bravado also licenses rights to an extensive network of third-party

licensees around the world. With ofﬁces in more than 40 cities, Bravado

leverages UMG’s global network to provide services including sales,

1. Lady Gaga, A Star Is Born

2. Ariana Grande

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licensing, branding, marketing, e-commerce and creative resources to

develop culturally relevant experiences for fans around the world. Its

broad client roster includes artists such as Ariana Grande, Bob Marley,

Elton John, Justin Bieber, Kanye West, Lady Gaga, Prince, Queen, Selena

Gomez, the Sex Pistols, The Beatles, The Rolling Stones, The Weeknd,

The Who, and Travis Scott, among many others.

3.1.1.4. Regulatory Environment

UMG’s businesses are subject to the laws and regulations of the coun-

tries in which the group operates.

In 2018, in the United States, the Music Modernization Act (MMA) was

enacted into law –the most signiﬁcant update to US music licensing law

in a generation. The law will:

3 update the rate standards used to set certain royalty rates for

authors and performers;

3 ensure that performing artists who recorded before 1972 have federal

rights and royalty payments for digital radio performances;

3 provide songwriters –for the ﬁrst time ever– involvement in digital

mechanical licensing;

3 create a more modern and efﬁcient system of collection and pay-

ment of mechanical royalties for songwriters; and

3 establish a mechanism to ensure sound recording producers and

engineers may receive a royalty stream for the digital radio perfor-

mance of recordings they helped to create.

The MMA also memorialized the private agreement between labels and

performers to ensure digital radio performance royalties will continue

to be shared on an equal basis, even if the agreement with a service is

privately negotiated. It also provided songwriters provisions assuring they

will share any “unmatched” mechanical royalties equally with their pub-

lisher partners.

In the European Union, after years of consideration, the Commission,

Council and Parliament each approved differing versions of the proposed

crafting a compromise proposal. All three versions addressed the copy-

right safe harbor’s so-called “value gap”, the growing disparity between

consumption and renumeration on user-upload services, but there are key

differences among them. The Trilogue will continue discussions in early

2019 and if any provisional agreement is reached, it will require approval

from the European Council and European Parliament.

3.1.1.5. Piracy

Piracy materially harms the music industry and impedes the development

of new business models. Based on data from the IFPI’s “Music Consumer

Insight Report 2018”, copyright infringement remains a signiﬁcant prob-

lem, with 38% of consumers obtaining music through illegal means. The

most popular form of copyright infringement is stream-ripping (practiced

by 32% of all consumers), followed by downloads through cyberlockers or

peer-to-peer services (23%) and via search engines (17%). Working in

conjunction with the rest of the music industry and other entertainment

sectors (including the movie and video games industries), UMG takes a

multi-pronged approach to combating piracy, which includes:

3 supporting the development and launch of innovative services

across a number of platforms, as well as the continued growth of

existing services such as those from Apple Music, Spotify, Pandora,

Amazon, Deezer, Tencent and Vevo. The group works with partners

to ensure music can be accessed legally, whatever the media (in-car

and in-home, on platforms such as mobile phones, tablet computers

and game consoles), to offer consumers the best all-round digital

music experience; and

3 working with governments and intermediaries (such as credit card

companies, advertisers, search engines, proxy services and ISPs) to

reduce potential profits from piracy and ensure the adequate

enforcement of preventative measures.

3.1.1.6. Competition

The proﬁtability of any record company depends on its ability to attract,

develop and promote recording artists, the public’s acceptance of those

artists and the success of its recordings. UMG competes with other major

record companies for creative talent that include new artists as well as

established acts. It also faces competition from independent labels, and

to a lesser extent, from certain distribution platforms.

The music industry also competes with apps, video games and ﬁlms for

consumer leisure spending. In addition, the recorded music business con-

tinues to be adversely affected by piracy, particularly in the form of illegal

downloading and stream ripping from the Internet (see Section3.1.1.5

“Piracy” above).

3.1.1.7. Research and Development

As the industry continues to evolve, UMG works to maximize opportuni-

ties for digital distribution by partnering with both established and

emerging digital businesses. It also actively works to protect its copyright

and those of its artists against unauthorized digital or physical distribu-

tion. In addition, the company continues to pursue new ways to capitalize

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on the digital transformation of the industry, including using data that

was previously unavailable in the physical business. One example is

UMG’s investment in technology that provides in-depth, real-time analyses

of artist sales, streaming, and the impact of television and live appea-

rances, social media traction and radio airplay, among other metrics.

3.1.2. TELEVISION AND MOTION PICTURES

Canal+ Group is a major player in television and cinema in France and

abroad. It is a leader in the production, bundling and distribution of ﬁrst-

run movie channels and thematic channels in France, Africa, Poland,

Vietnam and, since February2018, Myanmar. Through its Studiocanal

subsidiary, Canal+ Group is also a key player in the production and distri-

bution of feature ﬁlms and TV series.

Canal+ Group is committed to offering subscribers the best content and

services in terms of ﬁrst-run exclusivity, quality, mobility, consumer choice

and customization.

It has a total of 16.2million individual and collective subscribers world-

wide, including 3.1million customers through partnerships with telecom

operators in France.

3.1.2.1. Pay-TV in France

3.1.2.1.1. Programming Activities

Canal+ channels

Canal+ Group produces six channels offering exclusive, original and

innovative programming:

3 a general-interest channel (Canal+) showing movies, sports, drama,

documentaries, entertainment programs, as well as children’s and

discovery programs; and

3 five high value-added channels (Canal+ Cinéma, Canal+ Sport,

Canal+ Family, Canal+ Décalé and Canal+ Séries) featuring their

own programs.

In 2018, Canal+ Group strengthened the pillars of its editorial line: sports,

drama and movies.

Canal+ Group is recognized for the quality of its drama series. Acclaimed

by critics and subscribers alike, the Créations Originales (original pro-

gramming) are particularly emblematic of the quality of content offered on

the group’s channels, while their unique scripts are helping to refresh the

genre in France. They form part of Canal+’s DNA.

In 2018, the Créations Originales continued to be a success and remained

central to Canal+ Group’s editorial line. For its season2, the Baron Noir

series on French politics offered viewers another insightful behind-the-

scenes look at the often blurred lines of power and the complex maneu-

vering associated with it. After three seasons of excellent ratings with

subscribers and international audiences, Éric Rochant’s espionage drama

LeBureau des Légendes was back with a fourth series addressing issues

that very closely mirrored the news headlines. Taking a whole new plunge

into the medical genre, Thomas Lilti’s series Hippocrate offered audiences

an original and unique perspective on the world of medicine in France.

Thrillers were also part of the program, including Nox, a captivating new

crime mini-series.

In 2018, Canal+ Group signed a partnership with TwentiethCentury Fox

Television Distribution to acquire a new and exclusive portfolio of FX (Fox

Extended Network) series giving subscribers access to the eagerly

awaited Trust and the secrets of the Getty family, Better Things, a witty

and incisive “dramedy” led by Pamela Adlon, the series’ author and lead

actor, and TheAssassination of Gianni Versace, the second installment in

the cult American Crime Story franchise.

My Brilliant Friend, an ambitious adaptation of Elena Ferrante’s bestseller,

and Killing Eve, a comedy from rising British star Phoebe Waller-Bridge

and sensation at the 2018 CanneSeries festival, were other highlights.

Canal+ Group has an exclusive licensing and branding agreement with

Showtime

for France, which covers at least ten current or upcoming

series. It also holds the exclusive rights to hundreds of hours of

award-winning series including Dexter, Nurse Jackie, Ray Donovan, The

Affair and Californication.

Renowned for its coverage of high-proﬁle sports events, Canal+ is note-

worthy for its exclusive programs, crisp play-by-play commentary, expert

color commentary and innovative technical capabilities.

2018 provided a further opportunity for Canal+ channels to cover a wide

array of French and international sports.

Football took center stage, with the top three Ligue1 matches on each

day of the championship, the Ligue2 Monday night drawcard, all of the

Coupe de la Ligue and a new addition –the women’sD1. All of these

events were broadcast exclusively and in full.

Canal+ set the standard for rugby coverage once again, with exclusive

broadcasts of all Top14 matches, the best ProD2 game every Thursday,

all major Southern Hemisphere ﬁxtures (Rugby Championship and Super

Rugby), the French national team’s summer tour and the world circuits for

men’s and women’s rugby sevens. The same went for motor sport, with

coverage of all competitions, including Grand Prix Formula1, the

Formula2 and Formula3 championships, the 2018 Indy Car series and the

French Rally Championship.

In basketball, subscribers were treated to the international FIBA and

Basketball Champions League matches. International golf events were

also aired, including the four majors on the US and European circuits:

the PGA Tour, the European Tour, the Ryder Cup –played for the ﬁrst time

in France– and the Ladies European Tour Evian Championship.

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1. Le Stade Français – Montpellier

2. 21 cm, program hosted

by Augustin Trapenard

Millions of viewers also tuned into weekly sports programs, including

Canal Football Club, the general news show for Ligue1 football, which

celebrated its 10

anniversary in 2018, Canal Rugby Club, and the most

recent addition to the family, Canal Sports Club, which covers all sports

news. Other iconic shows continued to be a hit with subscribers, from

Jour de Foot to Jour de Rugby, which celebrated its 20

th

anniversary, J+1,

the Late Football Club and the Late Rugby Club. Not forgetting of course

major report and documentary programs such as Intérieur Sport, Sport

Reporter, Invisible and Olivier Dacourt’s Ma Part d’Ombre.

Football will remain ﬁrmly in the spotlight in 2019, with the return of the

Premier League on the group’s channels and the full coverage of the

Women’s World Cup. In motor sports, the offer will be enriched with the

arrival of the MotoGP

World Championship and the World Rally

Championship.

Alongside sport, cinema again enjoyed pride of place on the Canal+

channels, with 393ﬁlms broadcast on Canal+ and 588on the other chan-

nels. Alibi.Com, Wonder Woman, Au Revoir Là-haut, Guardians of the

Galaxy Vol.2, Le Brio, Pirates of the Caribbean, D-Day and Papa ou

Maman2 notched up the best audiences.

The renegotiation of its agreements with cinema professionals and new

media scheduling regulations mean that Canal+ Group can now broadcast

ﬁlms six months after their release (rather than ten months). Agreements

with several US studios including Disney, Warner, Fox and Paramount

were also renewed or continued.

Themed channels

Alongside the premium channels, Canal+ Group produces about 20 pay-TV

themed channels covering the main television genres, such as movies

with the Ciné+ channels, discovery with Planète+, sports with Infosport+,

and children’s programming with Piwi+ and Télétoon.

In 2017, Canal+ Group launched Polar+, a police drama channel offering

the best selection of movies, and classic and original series in the genre

from around the world. In 2018, in cooperation with Universal Music

Group, it created Deutsche Grammophon+, a channel based on the presti-

gious catalog of the classical music label, with high-resolution sound

recordings and, for the ﬁrst time, Dolby Atmos surround sound. The group

also launched CliqueTV, a new-generation general-interest channel

offering music, talk, reporting, video games and comedy shows.

3.1.2.1.2. Distribution

Canal+ Group is a leader in the bundling and distribution of pay-TV offerings.

The group’s bundles are marketed in France under the Canal brand, which

includes Canal+ channels and all the channels of the former Canalsat

(which is no longer available), with or without a minimum subscription

period. Subscribers build their bundles around Canal+, which serves as

the gateway for the entire Canal range. Depending on their preferences,

subscribers can add themed packs, with movie or series channels and/or

sports channels.

In 2018, Canal+ launched an innovative offer for people under the age of

26, priced at under €10 a month. The fully digital offer via the myCanal

app gives access to all Canal+ programs, live or on demand, on mobiles,

PCs and tablets.The latest addition to complete the new Canal range,

it directly targets 6million 18-25year-olds with services that are tailored

to their expectations.

Via myCanal, the channels and content of the Canal services can be

accessed live or on replay, making Canal the richest platform for content

streaming or downloading.

Canal+ distributes its packages through speciﬁc subscriptions delivered

via satellite, ADSL, DTT, cable, ﬁber, mobile devices and the Internet.

They are marketed directly by the group and through a physical network

of nearly 2,000sales outlets operated with retail partners (big-box stores,

specialty stores and telecom operator agencies).

Canal+ also markets some of its bundles and themed channels via ISPs,

which include them in their own pay-TV or triple-play packages. The

group has distribution agreements with Free, Orange, SFR and Bouygues.

In early 2018, Canal+ released a new satellite/Internet set-top box with

eight tuners for ultra-high-speed browsing and unparalleled viewing

quality, featuring 4K Ultra HD image and Dolby Atmos sound technology.

Designed with a new seamless and intuitive interface, the new box brings

Canal throughout the home using a small set-top box that automatically

connects to Wi-Fi. The device offers an all-new user experience based on

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the myCanal model, the leading media app for daily active users, whose

interface now features on all Canal screens. myCanal is also now the

sole point of access for all the group’s online services (pay-per-view, VoD

and SVoD).

With 7.8million individual subscribers in mainland France as of December31,

2018, Canal+ Group boasts the largest portfolio of pay-TV customers in

France including 3.1million customers from partnerships with telecom

operators. In total, Canal+ packages serve more than 8.3million individual

and collective customers in mainland France.

3.1.2.1.3. Digital Services

Canal+ Group is a pioneer of digital technology and new television ser-

vices in Europe, led by its myCanal platform and its multi-screen delivery.

myCanal

myCanal gives subscribers access to content from all Canal offers, live or

on replay, together with the full package of related services through a

single point of entry on any device.myCanal is an access portal to live TV,

with six Canal+ channels in HD plus 150themed channels.On demand, it

allows users to view thousands of programs at any time in French or the

original language. myCanal is accessible on PC, Mac, all smartphones and

tablets (iOS, Android, Windows), as well as Apple TV and Android TV. It

allows users to watch content on several screens in the same house at

the same time, with a single subscription.

Innovation-driven, this Over-the-Top (OTT) service offers new features

together with unmatched image and sound quality. The viewer experience

is augmented through a range of features such as “Start Over”, which lets

them go back up to eight hours before the broadcast, and “Multi-Live,”

which lets them watch up to four shows at the same time and on the

same screen. “Airplay” and “Chromecast” lets viewers watch a show on

a TV screen, while the “Téléchargement” function allows them to down-

load a program to watch ofﬂine. The user interface can now be custom-

ized with playlists, recommendations matching subscribers’ tastes and

myCanal Kids for younger viewers. Ultra-HD is available on the platform,

and Dolby5.1 is available on an increasingly large portion of the catalog.

Today, myCanal ranks as the leading online TV/video media platform in

the French market, with an average of 1.6million unique visitors each day

and more than 50million video hours consumed every month. It is also the

top-rated TV app on the iOS and Android stores (scoring an average of 4.4

out of5).

On top of existing subscriptions, Canal+ Group plans to launch a new

affordable series package in 2019, which will be accessible via myCanal

without a minimum subscription period. It will be available for subscrip-

tion and on pay-per-view.

3.1.2.2. Free-to-air TV in France

3.1.2.2.1. Free Channel Division

Canal+ Group owns and directly operates three free-to-air channels: C8,

CNews andCStar.

The leader in DTT for the ﬁfth consecutive year, with audience share of

3.6% among viewers aged 25 to 49, C8 is a general-interest channel. It is

a major contender that appeals to every generation and all types of

viewers.

CNews is a 24/7 news channel. It reports the news as is breaks, while

capitalizing on the group’s strengths, particularly in cultural programming,

to stand out in a market where competition intensiﬁed further this year.

Lastly, CStar, France’s leading music channel for today’s generation, is a

showcase for musical artists, where they can fully express their talent.

These three channels, delivered via DTT, are available throughout France

and reach the entire French population. They are also included in the TV

packages of satellite, ADSL, cable and other television operators. All of

their revenue is derived from advertising.

3.1.2.2.2. Advertising Sales Agency

Canal+ Régie is Canal+ Group’s exclusive advertising sales agency and a

wholly-owned subsidiary. It sells advertising time on the Canal+ channels,

C8, CNews, CStar and 16themed channels. It also markets time on their

mobile and tablet applications (mainly myCanal), their Dailymotion and

YouTube offerings and their replay TV services. It is also the exclusive

advertising sales agency in UGC movie theaters.

1. Mia and the White Lion

2. Invisibles

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In 2018, Canal+ Régie adopted a new three point strategy:

3 a richer offering of TV and digital content;

3 creative know-how around the Canal Brand Factory, an entity dedi-

cated to content creation for brands, which has won nine awards

and produced more than 300adverts since its launch in 2017; and

3 the leveraging of Canal+ Group’s data potential to offer brands new

targeting solutions.

3.1.2.3. International Pay-TV

Group Canal+ has developed international pay-TV activities through its

subsidiary Canal+ International. It has 7.8million subscribers in Africa,

Poland, Asia, the Caribbean, the Indian Ocean and the South Paciﬁc.

Africa

Canal+ Group has operated in Africa for over twenty-ﬁve years. It broad-

casts in more than 25countries, through 13subsidiaries and more than

30partners and distributors. With its Canal+ bundles offering more than

200channels, radio stations and services, the group is the leading satel-

lite pay-TV operator in French-speaking Africa, with more than 4million

subscribers at year-end 2018.

Canal+ delivers 17premium channels in Africa (region speciﬁc versions of

the Canal+ entertainment channels, together with movie, sports, series

and family channels) and finances programs made specially for the

African continent (e.g., the launch of the ﬁrst Invisibles series in 2018, and

shows like Le Parlement du Rire, Réussite and Talents d’Afrique). Canal+

also produces channels speciﬁc to Africa such as A+, the African series

channel and Nollywood TV.

Canal+ Group is also rolling out a DTT offer under the Easy TV brand name

in several African countries, and has partnered with Iroko to develop

Iroko+, a mobile SVo app. The new app offers Nollywood content, tele-

novelas and A+ programs.

Last but not least, Canal+ Group distributes Canalbox, an ultra-high-speed

fiber Internet offer in partnership with Group Vivendi Africa (GVA), in

Gabon and Togo, and has acquired new business assets in Togo.GVA

applies Vivendi’s expertise and experience to bring ﬁber-optic Internet

connections to households and businesses on a large scale in the African

countries where the group operates.

Poland

Poland is Canal+ Group’s third-largest market. As of December31, 2018,

nc+ had 2.2million subscribers.

With its ten premium Canal+ channels and seven themed channels, nc+

offers the richest premium television experience in Poland.

It is a particularly big name in sports and produces or distributes the big-

gest competitions, including the Polish Football Championship, the

English Premier League, the LIGA, the Bundesliga, the Champions League

and the Europa League, together with some of the most popular sports in

Poland, such as speedway, the volleyball Champions League, handball

and basketball. It also has exclusive broadcast rights for NBA matches.

Movies are another core component, with more than 300ﬁrst-run ﬁlms

exclusively shown on Canal+ and at its multiplex cinemas, including

exclusive releases from major studios like Fox and Universal. Canal+ is

also involved in local production, with original creations including the hit

series Belfer, The Raven and Illegals.

As well as TV programming, nc+ has offered Internet and VoIP services

through a partnership with a mobile virtual network operator since 2016.

nc+ is a trailblazer in terms of innovation. It markets multiplatform offers

such as Player+ (an OTT offer in partnership with TVN), as well as Internet

and telephony offers (in partnership with Orange), particularly on ﬁber. It

is the only platform in Poland to broadcast live sports and 4K/HDR movies

and series via satellite and on connected services.

Overseas

The leading pay-TV group in France’s overseas departments and territo-

ries, Canal+ International subsidiaries operate in the Caribbean (French

West Indies, French Guyana and Haiti), the Indian Ocean (Réunion,

Mayotte and Mauritius), and the Paciﬁc (New Caledonia, French Polynesia

and Australia). The Canal+ packages comprise the Canal+ channels and

more than 200themed channels, radio stations and services. Through its

Canal+ Telecom subsidiary, Canal+ International also markets CanalBox,

a double-play Internet and VoIP telephone service.

Asia

Canal+ International operates in Vietnam through K+, a satellite package

of local and international channels jointly owned with the Vietnamese

public television. It has operational control of K+, in which it holds a 49%

interest.

The K+ package offers four premium K+ channels (K+1, K+NS, K+PM and

K+PC) produced by the group. It is available via an OTT app offered free of

charge to DTH subscribers (myK+) and sold to potential subscribers (myK+

NOW).

The K+ packages are supported by a vast retail network comprising more

than 2,300outlets and 45proprietary K+ Stores. As of December31,

2018, K+ had 884,000subscribers.

In 2018, Canal+ Group set up in Myanmar (Burma), in partnership with

Forever, a major player in the country’s TV industry. Canal+ Myanmar

offers nearly 80 channels covering all themes, including eight Canal+

channels produced in Burmese and showcasing local content. It has

opened its own Canal+ Stores and works with an extensive network of

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local distributors. Speciﬁc mobile payment solutions have been developed

to facilitate subscriptions by adapting to the country’s traditions.

Canal+ Group’s arrival in Myanmar is part of its strategy of expanding into

markets offering substantial growth potential.

3.1.2.4. Motion Pictures

Canal+ Group’s Studiocanal subsidiary is the European market leader in

the production, distribution and international sales of ﬁlms and TV series.

It directly manages theater, video, digital and TV releases in the three

largest European markets (France, the United Kingdom and Germany), as

well as in Australia and New Zealand. With 5,500titles from more than

60countries, Studiocanal manages one of the world’s largest movie cata-

logs, featuring some of the greatest masterpieces of international and

local cinema.

Committed to producing and distributing ﬁlms and series combining a pro-

foundly European identity and a capacity to resonate worldwide,

Studiocanal works with the industry’s biggest talents (e.g., David Heyman,

Benedict Cumberbatch and Idris Elba) and foremost production companies

(e.g., Working Title, Aardman, Blueprint Pictures and The Picture Company).

In 2018, Studiocanal ranked as France’s second-biggest independent

distributor (excluding major US companies), with more than 10million

theater tickets sold for the second year in a row, a ﬁrst since 2008-2009.

The studio is also the second-largest independent distributor in the

United Kingdom and the largest in Germany.

In France, Gilles Lellouche’s star-studded comedy Le Grand Bain attracted

4.3million moviegoers, allowing Studiocanal to beat its previous box-

ofﬁce record, held by Prête-moi Ta Main. Le Grand Bain ﬁnished the year

ranked ﬁfth at the French box ofﬁce, and third among French ﬁlms. It also

ranks among the 200biggest French box ofﬁce successes in the history of

motion pictures. After a great reception at the Cannes Film Festival, the

ﬁlm attracted a large number of international distributors. It has been

released in more than 60countries.

In 2018, seven Studiocanal ﬁlms logged more than 500,000admissions:

Brillantissime, The Passenger, Early Man (the seventh-best result for an

animated ﬁlm), Le Retour Du Héros, Le Grand Bain, Pupille and Mia and

the White Lion. Released at the end of the year, Mia and the White Lion

had already topped 1.4million admissions by mid-February 2019.

2019 will reﬂect Studiocanal’s eclectic editorial line, combining family

entertainment, action films, prestigious movies and blockbusters.

Upcoming releases include Shaun the Sheep2, the new stop-motion fea-

ture from Aardman Studios; Cold Pursuit, a thriller with Liam Neeson;

King of Thieves, a comedy by James Marsh; Radioactive, Marjane

Satrapi’s ﬁlm about Marie Curie starring Rosamund Pike; and The Secret

Garden, produced by David Heyman and starring Colin Firth.

In France, noteworthy films include Deux Moi, the new film by Cédric

Klapisch; Mon Chien Stupide, reuniting Yvan Attal and Charlotte

Gainsbourg; Venise n’est pas en Italie, a comedy by Ivan Calbérac featuring

Benoît Poolvoorde; Chanson Douce, an adaptation of Leila Slimani’s Prix

Goncourt-winning novel starring Karin Viard and Leïla Bekhti; and Petit

Vampire, an animated feature ﬁlm by Joann Sfar.

Catalog

In 2018, Studiocanal acquired the 12ﬁlms in the Quad catalog, including

the hits Intouchables, Samba, Nos Jours Heureux and Eyjafjallajökull.

Intouchables holds the international box office record for a French-

language ﬁlm. This acquisition consolidates Studiocanal’s international

ﬁlm distribution business and builds up its catalog, which is one of the

largest in the world, with 5,500titles spanning 100years of motion

picture history. The Quad catalog ﬁlms have joined a unique collection of

Seventh Art masterpieces, including the unmissable Terminator 2, Rambo,

Total Recall, The Deer Hunter, the classics Mulholland Drive, The Pianist

and À bout de soufﬂe, and some of the biggest French comedies, includ-

ing LesBronzés, Le Corniaud and LaGrande Vadrouille.

Studiocanal also has an ambitious restoration program. Each year, it

devotes several million euros to bringing classic ﬁlms back to life at major

international festivals, in highly publicized re-releases and debut releases

in new markets.

Great works given 4K restorations in 2019 include Basic Instinct,

Apocalypse Now (for the 40

anniversary of Francis Ford Coppola’s mas-

terpiece), Camille Claudel, Le Sang d’un Poète and Le Testament d’Orphée

(to mark the 130

anniversary of Jean Cocteau’s birth), and Don’t Look

Now (in tribute to British director Nicolas Roeg, who died in 2018).

1. Early Man

2. Le Grand Bain

3.1. Businesses

–— VIVENDI –— ANNUAL REPORT 2018 –—

BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

TV Production

Studiocanal produces and distributes television series. It unites eight

production labels in Europe and is the majority shareholder of Germany’s

Tandem Productions, the European leader in the production and sales of

international TV series, and the UK’s Red Production Company, which

specializes in high-quality English-language TV series.

Studiocanal has also partnered with Scandinavian company Sam

Productions (founded by Søren Sveistrup and Adam Price, screenwriter of

the series In the Name of the Father), British companies SunnyMarch TV

(founded by Benedict Cumberbatch), Guilty Party Pictures and Urban Myth

Films, as well as Spanish company Bambu Producciones.

In 2018, Studiocanal launched a TV production business in France. The

new entity will beneﬁt from synergies with Canal+’s Créations Originales

and its world-renowned know-how. It will round out and strengthen the

existing production network in the United Kingdom, Germany, Spain and

Denmark. Studiocanal is providing support for these companies’ global

expansion, bringing them the expertise of a leading studio in co-produc-

tion, ﬁnancing and sales.

3.1.2.5. Regulatory environment

Pursuant to article40 of law no.86-1067 of September30, 1986 on free-

dom of communication, no more than 20% of the share capital of a com-

pany holding a license for a French-language television service can be

held, either directly or indirectly, by non-French/non-EU entities.

Canal+ Group, the wholly-owned Vivendi subsidiary that holds 100% of

Société d’Édition de Canal Plus (SECP), is authorized to broadcast the

Canal+ channel. No more than 20% of the share capital of the company

holding this broadcasting license can be directly or indirectly held by a

non-French, non-EU shareholder or by several foreign non-EU sharehol-

ders where their combined shareholding exceeds this threshold.

Consequently, if non-French/non-EU entities, by combining their interests,

were to hold more than 20% of the share capital or voting rights in

Vivendi, which indirectly holds the broadcasting license, this could consti-

tute a breach of the provisions of the aforementioned article40.

A single company may, either directly or indirectly, hold seven licenses for

national terrestrial digital television broadcasting services. Canal+ Group

has four licenses for pay-TV channels (Canal+ HD, Canal+ Cinéma, Canal+

Sport and Planète+) and three for free-to-air channels (iTélé, D8 and D17,

since renamed CNews, C8 and CStar, respectively).

Under its license to broadcast in France, Canal+ Group must comply with

specific requirements relating to the broadcasting of programs and

investments made in audiovisual and ﬁlm production. 60% of the audiovi-

sual works and ﬁlms broadcast by the group’s channels that are subject to

these obligations must be of European origin, and 40% must originally be

broadcast in French.

With respect to the obligations governing investments in audiovisual produc-

tion, the Canal+ channel must dedicate at least 3.6% of its total net revenue

for the previous year to “heritage works” (drama, animation, creative docu-

mentaries, music videos and actual footage or reenactments of live perfor-

mances). A portion of this investment (representing at least 3.1% of net

revenue) is allocated to the development of independent production.

In the case of motion pictures, the Canal+ channel must dedicate 12.5%

of its annual revenue to acquiring European films, including 9.5% for

works in French.

The C8 channel must invest 15% of its net annual revenue from the pre-

vious year in the production of European audiovisual works or works

originally broadcast in French, of which at least 8.5% must be invested in

the production of “heritage works”.

Under its obligations to invest in motion pictures, C8 must allocate at

least 3.2% of its revenue from the previous year to European works and

2.5% to original French works.

Canalplay (pay-per-view video-on-demand and subscription video-on-

demand) is also subject to regulations governing audiovisual on-demand

media services. A November2010 decree deﬁnes speciﬁc requirements

relating to investments in the production of audiovisual and ﬁlm works,

broadcasting those works, and advertising rules. Among these require-

ments is also a decision of the French broadcasting regulator, the CSA,

dated December2011 on the protection of young people and the ethics

and accessibility of programming.

Pursuant to the regulations introduced in June2009, the media scheduling

rules requiring ﬁlms to be broadcast within a certain time period after

their release were adjusted. Canal+ Group implemented the agreement

signed on July6, 2009, which was extended by an order of July9, 2009,

pursuant to which the requirements below shall apply with respect to the

timeframe for broadcasting ﬁlms after their theater release:

3 for ﬁlms available via pay-per-view, video-on-demand (primarily the

Canalplay VoD service) and on DVD: four months minimum after

theater release and three months for ﬁlms which sold fewer than

200tickets in their fourth week in theaters;

3 for movie channels: the ﬁrst period for pay-TV release is ten months

for an original broadcast if an agreement is entered into with ﬁlm

organizations (otherwise twelve months), and the second period for

pay-TV release is twenty-two months if agreed with the ﬁlm organi-

zations (otherwise 24 months);

3 on unscrambled television channels and on other pay television

channels: twenty-two months if the channel contributes at least

3.2% of its revenue to ﬁlm production (otherwise thirty months); and

3 for video-on-demand by subscription films (Canalplay): thirty-six

months.

3.1. Businesses

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BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

At the end of 2018, Canal+ Group announced the renewal of its agree-

ment with the French motion picture industry until December31, 2022.

This agreement was a precondition to Canal+’s signature of the new

media scheduling, whose entry into force at the beginning of 2019

enables the Group to offer its subscribers premiere screenings as early as

six months after their theatrical release.

3.1.2.6. Piracy

Canal+ Group actively combats audiovisual piracy. It gives priority to innova-

tion and technological monitoring as well as prosecuting the perpetrators of

piracy to protect its commercial interests and those of its licensees.

3.1.2.7. Competition

Canalsatellite Merger

On July23, 2012, the French Competition Authority issued a new ruling in

which it approved the merger between Canalsat and TPS (having with-

drawn its approval on September20, 2011), subject to compliance with

33injunctions. These injunctions were applicable for ﬁve years and are

renewable once.

After reviewing these injunctions, in a decision dated June22, 2017, the

Authority decided to extend or lift certain injunctions and revise others.

Since June22, 2017, Canal+ Group has implemented injunctions mainly

related to:

The acquisition of movie rights:

3 by prohibiting entering into framework agreements for French ﬁlms,

unless a pay-TV provider enters into a framework agreement with

one of the ﬁve main French producers/co-producers; and

3 by Canal+ Group divesting its interest in Orange Cinéma Séries –

OCS SNC and/or by adopting measures limiting its inﬂuence over

Orange Cinéma Séries– OCS SNC.

The distribution of pay-TV special-interest channels:

3 by the distribution of a minimum number of independent channels,

the distribution of any channel holding premium, potentially exclu-

sive, rights, and by drafting a model distribution deal relating to

independent channels included in the Canalsat offer that integrates

the calculation principle and method applied to determine minimum

payment for these independent channels.

Video-on-Demand (VoD) and Subscription Video-on-Demand (SVoD):

3 by prohibiting the acquisition of exclusive distribution rights for ﬁlms

originally broadcast in French and held by French rights holders for

VoD and SVoD, and the combining of these rights with rights pur-

chased for linear distribution on pay-TV;

3 by limiting the transfer of exclusive VoD and SVoD rights to French

catalog ﬁlms from the Studiocanal catalog to the Canal+ Group; and

3 by prohibiting exclusive distribution deals for the beneﬁt of Canal+

Group’s VoD and SVoD services on ISP platforms.

These injunctions are imposed until December31, 2019. If the market

conditions change significantly, Canal+Group may request that these

injunctions be lifted or partially or totally revised. An independent trustee,

proposed by Canal+ Group and approved by the French Competition

Authority, will be responsible for monitoring the implementation of the

injunctions.

Acquisition of the Direct 8 and Direct Star Channels

On July23, 2012, as part of the French Competition Authority’s approval

of the acquisition of the Direct8 and Direct Star channels (renamed C8

and CStar, respectively), and second approval by its decision of April2,

2014, Vivendi and Canal+ Group gave certain commitments for a period of

ﬁve years, renewable once.

In its decision dated June22, 2017, the French Competition Authority

decided to extend or lift certain commitments and revise others.

These existing commitments provide for (i)restrictions on the acquisition

of rights for American movies and television series from certain American

studios (Canal+ Group can now sign framework agreements combining

free-to-air and pay-TV broadcasting rights from two American studios) and

for French movies (a prohibition on the joint acquisition of free-to-air and

pay-TV broadcasting rights for more than 20ﬁlms originally broadcast in

French per year), (ii)the separate negotiation of rights for certain recent

pay-TV and free-to-air movies and television series and (iii) limitations on

the acquisition by C8 and CStar of French catalog movies from Studiocanal

(a 50% limit on the total number and total value of French catalog movies

acquired per year by these channels).

1. Réussite, Robert Brazza

2. Les Terriens du samedi,

Thierry Ardisson

3.1. Businesses

–— VIVENDI –— ANNUAL REPORT 2018 –—

BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

These commitments apply until December31, 2019. If market conditions

change signiﬁcantly, Canal+ Group will be able to request that they be

lifted or partially or totally revised. An independent trustee, proposed by

Canal+ Group and approved by the French Competition Authority, will be

responsible for monitoring the implementation of the commitments.

Competitive environment in France

The French pay-TV market is changing rapidly due to:

3 the arrival of new market entrants offering premium content. These

include Orange, which has positioned itself in the upstream market

for the acquisition of audiovisual rights and in the intermediate

market for the production and distribution of movie and drama

channels (“OCS” channels), and Al Jazeera, which has leveraged

its substantial ﬁnancial resources to launch the beIN Sports chan-

nels and to offer extensive premium sports content (e.g., Ligue 1

Conforama, the LIGA and Bundesliga). Lastly, the Altice Group has

assets that include the SFR Sport channels that will broadcast

English Premier League football until the summer of 2019, the

UEFA Champions League, French track and ﬁeld competitions and

part of the England Rugby Union Team matches, and its Altice

Studio movie channel. A new player, Mediapro, is also poised to

enter the French market after acquiring a large share of Ligue1

football rights for the 2020-2024 seasons;

3 the proliferation of distribution platforms and technologies, such as

connected TVs;

3 the development and enrichment of ISP bundled television pack-

ages, which have become attractive products that create competi-

tive differentiation;

3 the surging growth in non-linear content.The arrival on the audio-

visual markets of global players from the digital sector, such as

Netflix, Amazon, Google, Facebook and Apple, has completely

upended the competitive playing ﬁeld with, among other things,

the development of innovative media and distribution systems,

such as Internet-delivered OTT content. With their global sub-

scriber bases, these companies can in turn invest heavily in exclu-

sive content that competitively differentiates their offerings;

3 the profound shift in the behavior of audiovisual content consum-

ers, who prefer the immediate reward of non-linear delivery.

Faced with this change in viewing patterns, major players in

content, such as the group resulting from the Fox-Disney merger,

plan to launch global streaming services. Moreover, the illegal

consumption of content continues to generate a major shortfall

for the entire sector;

3 competitive pressure from the new amalgamation created by the

merger of SFR and cable operator Numericable, with expertise in

both the development of ﬁber-optic networks and pay-TV. It has

embarked on a strategy of acquiring and delivering exclusive

content, for example the signing in late 2016 of agreements with

Discovery and NBC Universal; and

3 the undeniable success of DTT in France. Following the launch of six

new free-to-air DTT channels in December2012 and the arrival of LCI

on free-access DTT in April2016 and news channel Franceinfo on

September1, 2016, French viewers now have 27free-access chan-

nels offering the same technologies and related services as pay-TV

channels (e.g., HD and replay).

3.1.2.8. Research and Development

Canal+ Group’s Research and Development (R&D) policy primarily focuses

on innovation in new services, new uses and new technologies.

The advancement of an idea or concept from the monitoring phase into the

prototyping phase, and then to its ultimate implementation, is controlled

by a cross-disciplinary committee composed of the operations directors

(Distribution, Programming, Technology and Information Systems).

Some of the projects implemented within this framework receive research

tax credits.

3.1.3. COMMUNICATION AND ADVERTISING

Havas is one of the world’s largest communication groups, using creati-

vity, media expertise and innovation to create meaningful connections

between brands and people. Founded in Paris in 1835 by Charles Louis

Havas, it has approximately 20,000employees in over 100countries.

Today, Havas is considered to be the most integrated group in its industry.

With a client-centric organization and regional structure, it puts its clients

at the center of its operations, enabling it to better serve their current and

future needs.

The group’s overriding objective is to effectively meet its clients’ changing

needs –while achieving efﬁciency gains– by delivering an agile, seam-

less and fully integrated service. To this end, Havas brings together the

most talented people from across all communications disciplines –cre-

ative, media, digital, events, public relations, data, and more– under one

roof, the Havas Villages, where the different business teams work

together in project “collaboration with no borders” mode.

Havas Group has 55Villages worldwide. Each Havas Village is unique,

but they all share the same philosophy and the same creative energy

driven by collaboration.

3.1. Businesses

–— VIVENDI –— ANNUAL REPORT 2018 –—

BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

3.1.3.1. Business Units

Havas Group has three main business units covering all communication

disciplines.

Havas Creative brings together experts from the creative, media and data

sectors to deliver integrated solutions to brands. It incorporates the Havas

Worldwide global network, the Arnold Worldwide international micronet-

work, and some of the most creative agencies in the industry, such as

BETC, Rosapark and Host.

Havas Media specializes in media and buying advertising space and

incorporates two main media brands, Havas Media and Arena Media.

These networks draw on the expertise of pure player agencies.

Havas Health & You, a global leader in health-and-wellness communica-

tions, brings together the group’s consumer and professional health

agencies in one entity, with four brands: Havas Life, Health4Brands (H4B),

Havas Lynx and Havas Life PR.

3.1.3.2. New developments

In 2018, Havas continued to expand worldwide, winning many new clients

both on a local and global level.

Havas Creative signed new local contracts with ADP, Barnes &Noble and

Carl’s Junior in the United States, Citroën in Italy and Australia, Kraft-

Heinz and Starbucks in the United Kingdom, Accor Hotels in Brazil,

Société Générale in France and Lidl and BMW in Germany.

Havas Media secured global contracts with Puma, Bristol-Myers Squibb,

Blizzard Entertainment and DeBeers, as well as multi-market contracts

with Gulf International Bank for the Middle East, Moda Operandi for the

Asia-Pacific region, the Middle East and Europe, and Carrefour for six

European markets. Locally, it had contract wins with Cherry Jaguar Land

Rover, China Telecom and JDE in China, Tinder, Enedis and Avril in France,

the Health Promotion Board in Singapore, BKT in Italy, Danone in South

Africa, Emirates in Chile, and Pernod Ricard in Mexico.

Havas Health & You also had many global and local contract wins during

the year, such as with Novartis (Global), Merck (Global), Intercept (Global),

Roche Genentech (Global), Transmedics (Global), Sanofi (China and

Canada), AstraZeneca (USA), Gilead (Local), and Pﬁzer (Local).

Acquisitions

2018 saw Havas pursue its policy of targeted acquisitions and integrate

ﬁve new agencies:

3 Catchi, a major player in the Internet and mobile apps CRO(conver-

sion rate optimization) in Australia and New Zealand;

3 Deekeling Arndt Advisors (DAA), Germany’s leading communications

consultancy, specialized in PR support for stock market transactions,

reputation management and crisis communications;

3 Étoile Rouge, a French communications agency dedicated to players

in the luxury and lifestyle industries;

3 M&C Consultancy, a UK agency specialized in healthcare market

access; and

3 Republica, the US number one independent multicultural marketing

agency, based in Miami, Florida.

On December14, 2018, Havas entered into an agreement to acquire a

51% interest in the largest communications group in the Baltic region that

was formed following the merger between Idea in Estonia and Publicum

in Lithuania. The new group resulting from the merger will be named

Havas Baltics and will represent the Havas Group’s interests in Estonia,

Lithuania and Latvia.

New entities

In 2018, the group launched new offers and consolidated its existing ones

with a view to consistently and effectively meeting its clients’ current and

future needs. The new entities created during the year include:

Plead

A Paris-based consultancy entirely dedicated to strategic communication

and advocacy.

China Desk

This structure was created to support clients willing to strengthen their

presence in China and to partner Chinese brands looking to expand

internationally.

Havas Blockchain

Havas Blockchain is the first fully integrated communications offering

designed to support blockchain tech businesses and entrepreneurs. The

offering is in partnership with Blockchain Partner, the top French block-

chain transformation consultancy, and backed up by AMO, Havas Group’s

leading global partnership of corporate and financial communications

consultancies.

Havas Health Plus (HH+)

This creative agency –which is a subsidiary of Havas Health &You– taps

into the deep insights offered by emotional technology in order to

advance healthcare communications.

AMO

During the year, Havas announced an ambitious plan to invest €100mil-

lion over the next ﬁve years to consolidate the leading position of AMO,

the group’s international network of strategic, financial and corporate

communications consultancies.

3.1. Businesses

–— VIVENDI –— ANNUAL REPORT 2018 –—

BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

Havas Edge

The group has created a worldwide powerhouse for Performance

Marketing –the Havas Edge Performance Network. This new network

will provide an international resource for clients who are seeking an

integrated performance marketing approach on a global level. Led by

performance marketing giants Edge, All Response Media and Revenue

Frontier, the network is expanding in North America and Europe, with

eight new ofﬁces located in Los Angeles, NewYork, SanDiego, Boston,

London, Leeds, Amsterdam and Paris.

Havas Events

Havas has brought together its event agencies in Paris, Milan, Shanghai

and NewYork to create the Havas Events international network. As pure

players, the agencies have already made their mark on their respective

markets, designing and staging events for prestigious international

clients.

Havas Helia

Havas Helia is an international network of customer engagement agen-

cies, providing CRM strategy and implementation, as well as consulting

services for loyalty programs and marketing technology. This new network

has offices in Baltimore, Chicago, London, Cirencester, NewYork and

Richmond, as well as an ofﬁce in Paris, which opened in early June2018.

The Annex

In 2018, the group continued to expand TheAnnex, by opening a new

ofﬁce in Atlanta –the hometown of its client, Coca-Cola. The Annex is a

network of advertising agencies dedicated to culture and entertainment

and focused on Millennials and Centennials (13 to 21 year-olds).

Topics

Havas acquired a 25% stake in the business transformation strategy

consultancy, Topics. The other shareholders in this new venture are Siaci

Saint Honoré and Bruno Mettling (a former senior corporate executive and

the author of a report for the French Labor Ministry entitled “Digital

transformation and working life”). Topics’s aim is to partner companies

who firmly believe that sustainable financial performance cannot be

achieved without HR performance, and conversely, that sustainable HR

performance cannot be achieved without ﬁnancial performance.

Merger between HumanSeven and Havas Paris

The group has brought the HumanSeven agency under the Havas Paris

banner. As a consequence of this move, HumanSeven will be able to

access all of Havas Paris’ resources and expertise. Havas Paris also ben-

eﬁts from the combination, which increases its advertising, digital and

creative clout, led by the Havas Paris Seven brand.

Havas Blockchain/ekino

Havas Blockchain has teamed up with ekino to launch a new strategic and

tech support offering in response to growing market demand, particularly

at an international level (France, United Kingdom, United States, Vietnam,

India and Singapore). Since its launch in March2018, Havas Blockchain

has been offering global and international communications support for

companies operating in the blockchain ecosystem or launching ICOs.

Havas Blockchain won the international “2018 Blockchain Innovation

Marketing Award” in November for its ﬁrst communications and market-

ing campaigns, notably for Talao and Chain Accelerator.

New Villages

In 2018, Havas Group forged ahead in implementing its “Together” strategy,

opening eight new Villages worldwide. The idea behind this expansion is

to provide best-in-class client service locally, while at the same time

consolidating the group’s international weight.

3.1.3.3. Awards and Honors

In 2018, Havas’s agencies won numerous awards at various festivals and

ceremonies across the world. A prime example is the Cannes Lions festival

where the group’s agencies took home a record-breaking 47Lions.

Rosapark was voted International Agency of the Year by AdWeek

magazine.

Havas Media North America was named Agency of the Year by Mediapost.

Host/Havas Australia came second in the 2018 Campaign Brief Hot List

and won the title of “Agency of the Year” at the AWARD Awards (notching

up a total of 20awards, including eight Golds).

1. Havas in London

2. Dissolving Posters,

Associacao Internacional

Habitat Para a Humanidade

campaign

3.1. Businesses

–— VIVENDI –— ANNUAL REPORT 2018 –—

BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

BETC was ranked among the best agencies in the world by the Gunn

Report.

Havas Lynx was named Healthcare Agency of the Year at the Cannes Lions

festival and won three Lions in total. Havas Health &You took second prize

in the “Healthcare Network of the Year” category.

In the United Kingdom, Havas Media Group achieved certiﬁcation in the

areas of “Brand Safety” and “Anti Ad Fraud” by JICWEBS (Joint Industry

Committee for Web Standards), an independent organization that esta-

blishes standards and best practices for online advertising and trading.

Campaigns with the most awards in 2018 include:

The Palau Pledge campaign, created by the group’s Host/Havas Australian

agency for the Palau Legacy Project, which won nine Lions at the Cannes

Lions Festival, including three Grand Prix (the only campaign to win three

Grand Prix). It also claimed one of only two Black Pencil awards reserved

for truly groundbreaking work, as well as seven other prizes at the D&AD

Awards.

BETC Paris was the most awarded French agency at the Cannes Lions,

winning 15Lions for various campaigns, including Timeless and Save Our

Species for Lacoste. Earlier in the year, the Timeless and Like My

Addiction campaigns each won a Grand Prix at the Mobius Awards.

Lastly, several of the group’s agencies were winners at the Epica Awards,

claiming a total of 23prizes (six Gold, eight Silver and nine Bronze).

3.1.3.4. Regulatory environment

Havas operates in countries that each have different regulations relating

to the advertising, communication, advertising-space sales and media

consulting service industries.

The services that Havas entities provide to their clients must meet the

local and/or sector regulations that govern the advertising and communi-

cations industry. New regulations and self-regulation rules are regularly

introduced to ban or restrict advertising on certain products or services, or

limit the type, content or form of media used. For example, advertising for

alcohol, cigarettes and healthcare products is subject to speciﬁc regula-

tions in different countries. In some markets, especially the United States

and the European Union, Havas’s clients and businesses run signiﬁcant

professional liability risks. They may be sued by consumers or consumer

organizations, government or regulatory authorities, or by competitors for

engaging in misleading business practices or unfair competition, violating

rules that restrict access to advertising in some sectors, rules on the col-

lection or use of personal data, rules of professional ethics, breaching

intangible rights (e.g., intellectual property rights or personality rights), or

infringing on the freedom of the press. Havas businesses are generally

responsible to their clients for complying with these regulations. To limit

these risks, Havas has introduced veriﬁcation procedures on work done

for its main markets to ensure that the group’s creative works comply with

applicable rules and regulations before said works are released. For

instance, legal departments in France, whether internal or centralized,

guide teams throughout the creative process. Training programs may also

be implemented locally.

In the course of their business activities, Havas entities may deliver creative

products involving works by third parties (e.g., illustrators, graphic designers,

photographers, directors, models, artists and composers) to their clients.

Their contribution to the end creation may attribute intellectual property

rights (e.g., copyrights, royalties and trademarks) and/or personality rights

to them.

Havas entities are responsible for ensuring that their creative works do

not infringe on these third-party rights and that they have the required

transfers of rights and/or authorizations for the planned use of these

works by their clients. Agreements signed with clients generally guarantee

that no legal action can be taken against them relating to these matters.

Most group businesses that deal with this risk have teams specializing in

managing, acquiring and checking these rights. These teams work with the

group’s legal departments or external consulting ﬁrms. Training programs

may also be implemented locally.

Havas is a strong advocate of personal data protection, whether it

involves its own data or the data managed on behalf of its clients.

With this in mind, Havas takes appropriate technical and organizational

measures to ensure that the processing of personal data meets the

requirements of the EU’s General Data Protection Regulation.

1. Asphalt 8: Airborne

2. Dragon Mania Legends

3.1. Businesses

–— VIVENDI –— ANNUAL REPORT 2018 –—

BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

3.1.3.5. Piracy

Havas firmly believes in protecting its clients’ data. Communication

strategies, content and advertising campaign metrics may be subject to

piracy attacks and theft. Havas has implemented systems to prevent data

leaks and targeted attacks.

3.1.3.6. Competition

The advertising and communication services industry is highly competi-

tive. The group’s main competitors range from major international ﬁrms to

smaller agencies that only operate in a limited number of local markets,

regions or countries.

Competition is also emerging from new types of operators such as:

3 tech companies: systems integrators, database companies, model-

ing companies and telemarketing companies offering technological

responses to clients’ marketing and communications needs;

3 GAFA (Google, Apple, Facebook, Amazon): these companies are

primarily group suppliers but could become competitors as they

have the capacity to address clients directly, especially to sell them

media space; and

3 consulting companies: these firms compete with Havas only in

developing communications and media strategy.

3.1.3.7. Research and Development

Havas is not dependent on any particular patents or licenses to carry out

its business activities.

3.1.4. MOBILE VIDEO GAMES

Considered the leading French mobile video game publisher, Gameloft enjoys

world-renowned expertise, with 189 smartphone games developed in its

19design studios, and an average of 98million players a month in 2018.

Two of its blockbusters –Minion Rush and Asphalt 8: Airborne– were

among the top ten most downloaded games from the App store world-

wide in 2018 (based on App Annie data).

3.1.4.1. Mobile Game Development and Production

Gameloft’s performance has been shaped by the boom in smartphone

sales, which has radically transformed the mobile gaming market.

Smartphones, with their touchscreens, powerful processor and motion

recognition capability, offer a wide variety of gaming options and sub-

stantially improve player immersion and gameplay.

At year-end 2018, more than 2,500Gameloft employees were working on

developing downloadable games. This unique creative force in the gaming

industry has driven the company to create a vast catalog of games span-

ning all genres: general, action, sports, strategy, adventure, and more. Its

development business covers new game design, regular catalog updates

to extend the life cycle of games, and deployment to adapt new games to

all existing platforms and smartphone models. Game quality is of utmost

importance to Gameloft and, as such, is carefully managed throughout the

creative process. The 19internal development studios based in the United

States, Europe and Asia help consolidate its leadership by localizing the

games for each market, in a combination of global vision and local delivery.

Gameloft has a broad portfolio of proprietary brands, with franchises such

as Asphalt (racing), Dungeon Hunter (adventure), Dragon Mania Legends

(simulation), Modern Combat, Order & Chaos, Gangstar and World at

Arms (action). These franchises cover every gaming genre and are aimed

at a wide audience.

At the same time, Gameloft is also developing a wide variety of games

through partnership agreements with major rights holders. In particular, it

is working with DisneyPixar, Mattel

, Hasbro

, Fox

, Universal, Lego

and Sega to associate some of its games with the world’s most popular

brands, such as Disney Magic Kingdoms, Minion Rush, MyLittle Pony,

Cars and Ice Age.

Inspired by pop culture heroes, these franchises lead to the creation of

mobile games with a universe and characters that are familiar to players.

For example, Minion Rush has been a huge success for Gameloft, with

nearly a billion downloads since 2013.

In 2018, over 1.8million Gameloft games were downloaded every day

worldwide.

3.1.4.2. Mobile Game Marketing

Offering free-to-play games represents a major shift in Gameloft’s busi-

ness model, in that the fully functional games are downloadable for free,

which significantly increases download volumes. These free-to-play

games generate revenue both through the sale of in-game virtual goods

that enable the player to make faster progress, and through advertising.

Gameloft has set up an internal digital advertising sales agency, Gameloft

Advertising Solutions, which sells advertising in its mobile apps. In 2018,

these advertising sales accounted for 9% of Gameloft’s revenue, supple-

menting the proceeds from in-game sales. Total mobile advertising

spending rose to $114billion in 2018, from $50billion in 2015. In 2018,

Gameloft tallied a daily average of 11million players.

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In addition to conventional advertising (banners, interstitials and videos),

Gameloft Advertising Solutions offers innovative formats such as mini-

games and interactive videos that can be used to measure audience

engagement. Proprietary ad servers enable Gameloft to offer advertisers

a brand-safe environment ensuring that their brand will always be dis-

played in the right context.

3.1.4.3. Mobile Game Distribution

Gameloft distributes its mobile games through a very wide range of

channels. Firstly, they are delivered through smartphone and tablet App

Stores, such as the Apple App Store, Google Play, the Windows Store and

Amazon Appstore. Accessible from mobile phones, tablets and compu-

ters, these stores account for a growing share of mobile app sales world-

wide. Since 2012, Gameloft has also distributed its games via several

Android platforms in China. All of these online stores act as OTT distribu-

tors of Gameloft games, with the resulting revenues shared between the

store and Gameloft. In all, these OTT services accounted for 72% of

Gameloft’s revenue in 2018.

Secondly, Gameloft games are distributed by over 175telecom operators

in 122countries around the world. This far exceeds the distribution net-

work of any of Gameloft’s competitors. Telco customers can buy and

download Gameloft games either from their phone’s home screen when

preloaded by the phone manufacturer (Gameloft works with Nokia,

Samsung, LG, ZTE, Motorola, RIM and Huawei, among others) or from the

telco’s online store. Invoicing is generally managed by the telco, with the

cost of the game charged to the customer’s telephone bill or invoiced via

text. In this case, the telcos act as distributors of Gameloft games and the

revenues are shared between the telco and the company. These agree-

ments with telecom operators and phone manufacturers accounted for

19% of Gameloft’s revenue in 2018.

3.1.4.4. Regulatory Environment

Like any video game publisher, Gameloft must comply with a large num-

ber of national regulations covering such areas as game content, con-

sumer protection (particularly for minors) and the protection of personal

data and privacy.

The company has introduced appropriate procedures to comply with local

consumer rights legislation and regulations, with a focus on informing con-

sumers about game content and rules of use, by referring to age ratings and

alerting players on launch that the game may offer in-app purchases. For age

ratings, the apps and games distributed on mobile platforms (Apple Store

and Google Play) show the appropriate age range for the app concerned

(with classiﬁcations that can vary from one region to another).

Gameloft is also a firm advocate for protecting individual privacy and

complying with applicable legislation on personal data protection.

Consequently, it ensures that it complies with data protection laws, in

particular Regulation (EU) 2016/679 of the European Parliament and

Council of April27, 2016 on the protection of natural persons with regard

to the processing of personal data (the General Data Protection Regulation

or GDPR, which came into effect on May25, 2018). The company also pays

particular attention to the protection of minors in its privacy policies.

Gameloft children’s games, for example, comply with the Children’s Online

Privacy Protection Act (COPPA) guidelines covering the collection, use or

disclosure of personal information from children under 13living in the

United States, the principles speciﬁed by the Ofﬁce of Fair Trading (OFT) in

the United Kingdom, and more generally the recommendations issued in

Europe following studies conducted by the European Commission.

3.1.4.5. Piracy

Piracy is still a very harmful practice for the mobile video game industry. It

can have a dramatic impact on sales, given that video games are tradi-

tionally one of the biggest revenue-generators in the Apple, Google, and

Microsoft app stores. The freemium business model remains the most

successful defense against piracy. To prevent pirating, Gameloft has

deployed a permanent surveillance system enabling it to respond quickly

as soon as illegal copies are uploaded.

3.1.4.6. Competition

The video game market for smartphones and tablets has experienced an

unprecedented development in the past decade, largely driven by Asian

countries: in January2018, seven of the top ten companies in the market

in terms of revenue on the Apple and Google stores were Asian compa-

nies (source: App Annie, January2018). The level of competition in the

mobile gaming industry has increased sharply in recent years along with

an increase in ﬁnancing rounds, IPOs and mergers that take place in this

business sector. There are hundreds of new games submitted to Apple

and uploaded to the App Store every day.

In 2019, mobile games will represent a share of 60% in the video game

market, driven by hard-core and hyper-casual games (source: App Annie).

Therefore, the overall level of competition in the mobile video game mar-

ket has intensiﬁed again, in the same way as in the years 2000-2006. As

a consequence, Gameloft’s ability to consolidate its current position as a

market leader will drive the growth of its business.

3.1.4.7. Research and Development

Gameloft allocates all of the human resources and infrastructure needed

to develop its games. To this end, development teams are provided with

telephony hardware to interact with the production teams in its subsidia-

ries more quickly.

The costs of developing mobile phone games are recognized as an

incurred expense. Every year, the company develops and uploads to telco

sites several thousand versions of its games to cover the 300different

mobile phone models and 15,000smartphone models currently on the

market, all in 17languages.

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This extreme fragmentation and the aggregate-style nature of telco sales

data mean that Gameloft cannot accurately measure its mobile game

development costs and the future economic beneﬁts of each version, from

either a technical or commercial point of view. On this basis, given that

these costs do not meet all the criteria for being recognized as an intangi-

ble asset as deﬁned in IAS38, they are recognized as expenses.

3.1.5. INTELLECTUAL PROPERTY,

LIVE AND TICKETING

The group explores new business models in the ﬁeld of live entertain-

ment, franchise promotion and ticketing. Grouped under Vivendi Village,

these businesses are at the group’s fore-front. At the cross-roads of

Vivendi’s organization, these various business units work together to

create original projects.

3.1.5.1. Intellectual Property and Live

Franchise acquisition and development

Vivendi’s objective is to produce more content through its own catalog of

artists and its own brands. Following on from the success of Paddington,

the group plans to develop other franchises and showcase them world-

wide via its various businesses.

In 2016, Vivendi became the owner of the Paddington brand and all

related intellectual property rights (other than traditional publishing

rights). Paddington is the core focus of a cross-business strategy spanning

the group’s entire value chain.

In 2017, the brand became a global franchise due to the release of the

Paddington2 movie (Studiocanal’s biggest hit to date, with worldwide box

office takings of over $500million for Paddington1 and Paddington2

combined). Other initiatives were launched based on the Paddington

brand, including the Paddington Run mobile game developed by Gameloft,

and new partnerships, including with Marks &Spencer, which won the

“Best Licensed Retail Execution” prize at the UKLicensing Awards.

2018 was Paddington’s sixtieth anniversary year and to mark the occasion

a partnership was entered into with the UK’s Royal Mint, putting the

famous little bear onto 50pence pieces. Paddington has also now

branched out into live performance, with the launch of “Paddington in

concert” by Studiocanal, which entails a screening of Paddington1, with

music played by a live symphony orchestra. Meanwhile, the Copyrights

Group created a fun and interactive digital treasure hunt, with the help of

other Vivendi entities (Havas Digital Factory, Gameloft, Studiocanal and

Dailymotion) and key Paddington partners, which attracted over

700,000participants.

Lastly, also in 2018, Paddington became a champion for children’s rights

under a partnership with Unicef, with his image used to support two

Unicef events that generated over £120,000. The first of these was a

connected run, with the distances recorded on their sport app or smart-

watch by more than 10,000participants in France and the United

Kingdom, which was converted into donations to Unicef by Vivendi. The

second event was an online giving campaign organized in the United

Kingdom, whereby families could send packages to children in need.

Paddington also took part in Unicef’s global #GoBlue campaign on

Universal Children’s Day on November20.

Organization of sporting events

Vivendi Sports’ objective is to devise and organize sporting events, and

take advantage of the group’s expertise in the world of sport.

Since its creation in 2017, Vivendi Sports has focused on Africa, where

the group sets the benchmark for sporting events, particularly due to

Canal+. The sporting events organized by Vivendi Sports offer many syner-

gies between the group’s various businesses. For example, competitions

can draw on the CanalOlympia network for concert venues as well as on

Canal+ television channels to broadcast the events in Africa and France.

The vast majority of the competitions organized by Vivendi Sports are

recognized by international federations and their results are included in

ofﬁcial performance rankings.

In 2018, Vivendi Sports organized its ﬁrst cycling race, the Tour de L’Espoir.

Under the auspices of the International Cycling Union and the Cameroon

Cycling Federation, the competition brought together 15 teams in Cameroon.

The major stages of the race were celebrated with concerts held at

CanalOlympia venues in Douala and Yaoundé. The second Tour de L’Espoir –

1. Le Tour de l’Espoir

2. CanalOlympia

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which took place from February4 through February9, 2019– saw teams

from across the world (including Japan, Argentina, Portugal and Ecuador)

competing alongside the African teams.

Another sport that Vivendi Sports showcases in Africa is boxing, through

its organization of Jab &Vibes, the IBO Super-lightweight Boxing World

Championship. This exceptional event –which took place in Dakar,

Senegal on October20, 2018– marked the grand return of international

boxing in West Africa.

3.1.5.2. Live

Olympia Production

Olympia Production is a key player in France’s cultural ecosystem, sup-

porting the careers of some 30 experienced and up-and-coming musicians

and comedians. The number of artists in its portfolio has more than tripled

since it was ﬁrst formed in 2016. Olympia Production produced or co-pro-

duced over 1,100shows in 2018, 50% more than in 2017.

The music tours of four Olympia Production artists particularly stood out

in 2018: Dadju (one of the leading artists in the French new urban R&B

generation), Arcadian (semi-finalists in The Voice France in 2016) and

Eddy de Pretto and Niska (Universal Musique France artists). As for

comedians, Roman Freyssinet played to a full house at the Théâtre de

l’Œuvre in Paris in early 2019 and the careers of Marina Rollman and

Guillermo Guiz are going from strength to strength.

Olympia Production also provides France with a diverse offering of festi-

vals, helping each festival to develop while fully respecting their indivi-

dual identities and regional roots.

It now owns Garorock –one of France’s largest festivals– as well as Les

Déférlantes, Live au Campo and the Brive Festival (through Festival

Production, a joint venture set up by Vivendi and the Centre France group).

Due to Olympia Production’s expertise, the latter three festivals, which

were held in the summer of 2018, saw their audience numbers increase

by 17%, 15% and 30%, respectively, compared with 2017.

Since 2018, Olympia Production has also been in charge of programming

for the Moroccan festival, Mawazine, one of the world’s largest musical

festivals, which attracts around 2.5million people.

CanalOlympia

CanalOlympia is the leading cinema and performance venue network in

Africa. These multi-use venues, which can serve as movie theaters or

concert and show halls, are aimed at an audience with a constantly

growing demand for content and entertainment.

Within two years, 11CanalOlympia venues have been opened in

Cameroon, Guinea, Niger, Burkina Faso, Senegal, Togo, Benin and Gabon.

Four new venues are under construction, and the group is currently in

negotiations to buy land for several future venues. CanalOlympia plans to

have a network of some 20 venues by year-end 2019.

The CanalOlympia movie theaters offer 19screenings over six days a

week, with most titles released at the same time as in the rest of the

world. Four screenings are reserved each week for children’s ﬁlms.

Several Vivendi group companies work with and support CanalOlympia.

Canal+ Group –which has extensive operations in Africa– and

Studiocanal –Europe’s leader in the production and distribution of movies

and television series– contribute to programming at the venues.

In 2018, CanalOlympia entered into a major partnership with Orange to equip

its movie theaters with ultra-fast broadband to improve the secure digital

distribution of movies. As part of this partnership, Orange’s “Cinédays” pro-

gram will be introduced (a 2-for-1cinema ticket offer on Tuesdays and

Wednesdays for Orange’s customers) and moviegoers will gradually be able

to buy tickets using the Orange Money mobile payment service.

CanalOlympia is also positioned as a catalyst for the development of tal-

ent across Africa. Its complexes offer performance venues for many local

and international artists, with the support of a large-scale tour organiza-

tion network operating throughout the continent. The CanalOlympia ven-

ues will help to scout, mentor and showcase talented musicians, singers

and actors.

In 2018, over half a million tickets were sold for CanalOlympia venues,

which hosted more than 260events: concerts by major artists such as

Dadju and Damso, stand-up shows, press conferences and international

competitions organized by Vivendi Sports such as the Tour de L’Espoir

under-23s cycling event held in Cameroon, and the Jabs & Vibes boxing

gala in Senegal.

L’Olympia

As one of Paris’s most famous concert halls, L’Olympia is a favorite venue

for both French and international artists. In 2018, L’Olympia hosted over

280public and private events.

L’Olympia is pursuing a policy of appealing to a wide variety of audiences,

without compromising the venue’s DNA. Performance highlights from 2018

included artists currently lighting up the urban music scene and drawing

younger concert-goers, such as French rappers Lomepal and Eddy de

Pretto, as well as headliners like Joan Baez and Ringo Starr. L’Olympia

hosted France Inter radio station’s event for the Fête de la Musique,

France’s annual music celebration, and the fourth Nuit du Rugby. Canal+

chose L’Olympia for its third Canal Tour subscriber roadshow, and the Sport

dans La Ville association held its 20

anniversary celebrations there.

Théâtre de l’Œuvre

A little gem tucked away near Place de Clichy in Paris, the Théâtre de

l’Œuvre, with its 336seats, offers an intimate setting that is highly

appreciated by artists and actors.

In 2018, the one-man play performed at the Théâtre de l’Œuvre by

Raphaël Personnaz, Vous n’aurez pas ma haine won the “Seul en scène”

prize at France’s Molière theater awards. During the year the venue was

also chosen by Jean-Louis Aubert (from the French rock groups Téléphone

and Les Insus) and Louis CK for several exceptional evenings, with tickets

selling out in record time.

The Théâtre de l’Œuvre is also part of a comprehensive private event

service that includes L’Olympia and Le Petit Olympia.

Abbey Road

Made famous by the Beatles, the most iconic studio in London has

belonged to UMG since 2011. This legendary music venue remains the

recording studio of choice for artists all over the world. Abbey Road

Studios can also be hired out for corporate and private events.

3.1.5.3. Ticketing

As a result of the April2018 acquisition of the Dutch company, Paylogic,

Vivendi Village has a ticketing network with a well-established presence in

six countries in continental Europe as well as the United Kingdom and the

United States. The group’s ticketing activities are operated under the same

brand –See– and are marketed through See Tickets, Digitick and Paylogic.

In 2018, the network distributed a total of more than 20million tickets.

See Tickets has several thousand clients with very diverse profiles,

including prestigious venues like Versailles Palace, Le Grand Palais and

L’Olympia in Paris; the Houses of Parliament in London; major music festivals

such as Glastonbury (which sold 135,000tickets in a record 36minutes

3.2. Holdings

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in 2018), Tomorrowland and Garorock; sports clubs like L’Olympique

Lyonnais football club; and famous events such as the Royal Horticultural

Society’s Chelsea Flower Show; as well as tickets for cruises on the

Queen Mary ocean liner docked in the Port of Los Angeles.

In addition to its online ticketing business, See Tickets –which has

developed dedicated state-of-the-art technological platforms– also offers

a range of technical solutions for third-party ticketing management.

In parallel, See Tickets is actively involved in the legal resale of tickets

between private individuals, with zePass, France’s pioneer in this sector,

and the Fan-to-Fan marketplace in the United Kingdom. In France, the

group also manages Infoconcert.com, the country’s benchmark for dates

and detailed information about concerts and other cultural events.

3.1.6. VIDEO CONTENT

3.1.6.1. Content Bundling

Dailymotion is a benchmark digital player, capable of hosting and broad-

casting video content throughout the world.

In 2017, Dailymotion launched a new version of its video platform, offering

users quality content. Unlike other video-sharing platforms, Dailymotion

has changed its editorial positioning in order to focus on:

3 the 18 to 49age range, which is not a strategic target for other

online video services;

3 relevant and reliable content from leading publishers based on four

major themes – news, entertainment, music and sport; and

3 a completely redesigned user experience and a state-of-the-art

video player.

This new strategy led to an increase in the viewing of quality content,

which now represents almost 50% of the platform’s global audience

(compared to approximately 35% in 2017). Dailymotion has some 2.2billion

views per month.

The growth in Dailymotion’s audience has been fueled by numerous part-

nerships forged with top-grade content creators, with more than 300

signed in 2018, including 100in the United States and involving presti-

gious names such as the Financial Times, A+E Networks, Axel Springer,

TF1, the NBAG League and AC Milan. Dailymotion extended the reach of

its partnerships to new countries in 2018 (South Korea, Vietnam and

India) where its audiences are rising rapidly.

Dailymotion’s audience growth has also been propelled by constant

enhancements to its user experience. In late 2018, it released a new ver-

sion of its app, featuring a new home page with a “latest videos” section

that launches automatically.

Also during the year, Dailymotion unveiled its ﬁrst monetization solution,

which means it now has an operating presence across the entire online

video value chain (hosting, distribution and monetization).

Dailymotion has hosting provider status, as deﬁned in Directive 2000/31/EC

of the European Parliament and Council of June8, 2000 on certain legal

aspects of information society services, in particular electronic commerce

(Directive on electronic commerce), as conﬁrmed by the French Supreme

Court (Cour de Cassation, first civil chamber decision of February17,

2011).

Protection of content rights holders is an absolute priority for Dailymotion

and its platform was cleared of all pirated and explicit content in 2017. It

has teams available 24hours a day who, on notiﬁcation, promptly remove

any suspected illegal content. And going beyond its legal obligations as a

hosting provider, since 2017, it has put in place several digital ﬁngerprin-

ting solutions to effectively protect rights holders. Dailymotion also works

tirelessly to combat non-human trafﬁc, by constantly ﬁne-tuning its sys-

tems and processes.

3.2. Holdings

3.2.1. TELECOM ITALIA

On June24, 2015, Vivendi became the core shareholder of Telecom Italia,

the leading landline and mobile operator in Italy.

As of December31, 2018, Vivendi held 23.94% of Telecom Italia based on

the total number of ordinary shares, with voting rights representing

17.15% of the share capital.

3.2.2. MEDIASET

On April8, 2016, Vivendi announced that it had entered into a strategic and

industrial partnership with Mediaset to acquire a 3.5% interest in Mediaset

and 100% of the share capital of Mediaset Premium in exchange for 3.5% of

Vivendi’s share capital. This agreement is the subject of litigation.

As of December31, 2017, Vivendi held 340,246thousand Mediaset

shares, representing 29.94% of its voting rights. On April9, 2018, in

accordance with the commitments given to the Italian communications

regulator, AGCOM, Vivendi transferred the portion of its Mediaset voting

rights in excess of 10% to an independent Italian trust company (1).

On December31, 2018, Vivendi held 28.80% of Mediaset’s share capital

and 9.99% of the voting rights.

3.2.3. BANIJAY GROUP HOLDING

As of December31, 2018, Vivendi held a 31.4% interest in Banijay Group

Holding.

3.2.4. EDITIS

On July30, 2018, Vivendi announced the acquisition of Editis, France’s

second-largest book publisher.

The purchase of the entire capital of Editis was completed on January31, 2019.

3.2.5. PAYLOGIC

In April2018, See Tickets acquired Paylogic, a Dutch ticketing company.

As of December31, 2018, Vivendi held the entire share capital of Paylogic.

(1) See Note23 to the Consolidated Financial Statements for the year ended December31, 2018 in Chapter4.

3.3. Operations sold

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3.3. Operations Sold

3.3.1. UBISOFT

On March20, 2018, Vivendi announced having entered into agreements

for the sale of its interest in Ubisoft, representing 30,489thousand shares

and 27.27% of the share capital. The remaining portion of its interest in

Ubisoft (5.87% of the share capital) was sold on March5, 2019.

In total, the sale of Vivendi’s interest in Ubisoft represented an amount of

€2billion, for a capital gain of €1.2billion.

3.3.2. FNAC DARTY

On July10, 2018, Vivendi opted to settle in shares the transaction

entered into in January2018 regarding its 11% interest in Fnac Darty.

Vivendi will receive a cash payment of €267million corresponding to the

hedge price of €90.61 per share, after making an initial investment of

€159million, representing €54 per share, in May2016.

3.3.3. TELEFONICA

At the end of December2018, Vivendi sold its remaining interest (0.95%)

in Telefonica for a total consideration of €373million.

3.3.4. MYBESTPRO

On December21, 2018, Vivendi sold MyBestPro to its management.

For further details on the group’s equity investments, see Notes2, 11

and 12to the Consolidated Financial Statements for the year ended

December31, 2018, in Chapter4.

3.4. Financial communication, tax policy

and regulatory environment

3.4.1. FINANCIAL COMMUNICATION

3.4.1.1. Investment policy

Vivendi’s value creation policy draws on both organic and external growth

transactions. With this in mind, the group selects its investment projects

according to several criteria:

3 the expected growth resulting from the investment, as well as its

impact on the growth of adjusted net income per share and on

cash ﬂow;

3 the proﬁtability of the investment against the assessed ﬁnancial

risk; and

3 an in-depth assessment of non-ﬁnancial risks (e.g., geopolitical and

CSR-related).

All of these projects are reviewed by the Investment Committee, which

comprises members of the Management Board, key managers at head-

quarters and the Chief Operating Ofﬁcers and Chief Financial Ofﬁcers of

the business units. This committee meets twice a month.

All signiﬁcant investment projects are subject to approval by the Supervisory

Board.

For major transactions, a post-acquisition audit is performed to compare

actual operational and ﬁnancial results with the assumptions made during

the investment decision process. The conclusions drawn from auditing these

transactions can then be used to promote best practices within the group.

3.4.2. FINANCIAL COMMUNICATION POLICY

3.4.2.1. Objectives of Vivendi’s ﬁnancial

communication

Vivendi’s ﬁnancial communication is based on the core principle of provi-

ding fair and accurate information on the group’s position to all sharehol-

ders, analysts and investors. The group ensures that it complies with all

laws, standards and procedures applicable in France, including the French

Financial Security Act, the French Monetary and Financial Code, the

International Financial Reporting Standards (IFRS), the benchmarks set

out in the report published by the Committee of Sponsoring Organizations

of the Treadway Commission (COSO), and the recommendations of the

French securities regulator, the AMF.

Vivendi’s Investor Relations Department maintains a close and ongoing

dialog with the analysts of brokerage ﬁrms and investment funds, and

provides a continuous stream of information and updates on the

Investors/Analysts section of the www.vivendi.com website, which is

aimed primarily at institutional investors.

Vivendi also provides financial information to institutional investors

through meetings organized in the main global financial markets and

through the participation of group executives and the heads of its busi-

nesses at investor conferences.

The Financing and Treasury department is also in regular contact with the

agencies that rate the group’s debt.

3.5. Tax policy

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In 2018, a total of 404events (e.g., roadshows, investor conferences, and

analyst and investor meetings at Vivendi’s headquarters or at the ofﬁces

of its subsidiaries) were organized in Europe and the United States, pro-

viding an opportunity for the group and subsidiary management teams to

meet with representatives from 299 ﬁnancial institutions to present the

group’s results and outlook.

Lastly, Vivendi also organizes communication opportunities for analysts

and investors who specialize in socially responsible investments.

3.4.2.2. Communication with Individual

Shareholders

Vivendi has a speciﬁc team dedicated to individual shareholder communi-

cations that manages the Shareholders’ Club, the Shareholders’

Committee, the Individual Shareholders’ section on the group’s website,

the Twitter account and the dedicated toll-free number for shareholders.

The group’s 220,000individual shareholders can contact the team by tele-

phone on 0805050050 for any questions they may have or suggestions

they have to offer. It can be reached during normal business hours Monday

to Friday. The department can also be contacted by e-mail (actionnaires@

vivendi.com) or by mail (Vivendi –Individual Shareholders’ Information

department –42,avenue de Friedland –75380Paris Cedex08 –France).

The Shareholders’ Club was founded in 2010 and organizes events and

meetings for shareholders to keep them informed of Vivendi’s activities,

strategy and ﬁnancial results. A program of the different events being

held is sent to the members of the Shareholders’ Club twice a year (and

can also be downloaded from the www.vivendi.com website).

In 2018, the Club organized 11meetings (Jeudi, c’est Vivendi and Mardi

de la musique training sessions, e-meetings with the École de la Bourse

and ﬁnancial meetings) and more than 30 entertainment-related events

(from premiere screenings for ﬁlms produced or distributed by Studiocanal

to opera broadcasts and shows by partner organizations of Vivendi’s

Solidarity program, Create Joy), shows and concerts by Olympia

Production artists. It also organized visits to L’Olympia, Studios Canal

Factory, Opéra Garnier, Opéra Bastille, and the Paris philharmonic, as well

as to the Chris Marker exhibition and the Sergio Leone exhibition at the

Cinémathèque Française, among others.

The Shareholders’ Club is committed to offering all of its shareholders

access to meetings and shows, regardless of where they live. In 2018,

shareholders in Avignon, Colmar, Bordeaux, Cannes, Dijon, Lille,

Marseille, Montpellier, Toulouse and Tours were all able to take part in

events. Twice a year, the group also holds a digital meeting, broadcast

live from the Vivendi website and accessible to all shareholders, regard-

less of their location.

In 2009, the group set up a Shareholders’ Committee made up of

10members. The committee meets three times a year and at the General

Shareholders’ Meeting, and acts as a bridge between Vivendi’s individual

shareholders and its management. It focuses, in particular, on communi-

cation with shareholders.

The Individual Shareholders’ department has also strengthened its digital

communication. In addition to the “Individual Shareholders” section of the

group’s website and e-meetings, it manages a Twitter account. The

“Individual Shareholders” section provides information on the General

Shareholders’ Meeting, the Shareholders’ Club and the Shareholders’

Committee, as well as access to Vivendi’s press releases, a Shareholders’

Booklet, a video archive, audio clips, and the department’s contact details.

The Twitter account keeps shareholders informed of the latest news on

the group and the ﬁnancial markets, as well as of the events held by the

Shareholders’ Club.

3.5. Tax Policy

The group’s tax policy aims to ensure that:

3 the group’s attitude towards tax is clearly understood at all levels;

3 appropriate structures are identiﬁed and implemented so that taxes

are properly calculated and paid in the relevant territories within the

prescribed time frames;

3 appropriate accounting policies (including transfer pricing policies)

are identiﬁed and followed so that taxes are properly calculated and

paid in the relevant territories;

3 tax reliefs which are rightfully available to the group are identiﬁed

and claimed when appropriate;

3 external advisers engaged by the group have the requisite qualiﬁca-

tions and reputation;

3 open and constructive relationships with local tax authorities are

developed and maintained wherever possible and permitted by

local law; and

3 in the event that any company or part of the group is subjected to a

tax audit, the appropriate staff and/or external advisers are

assigned to the matter so as to ensure the proper conduct of the

audit process and its conclusion as quickly as possible.

The policy applies to all types of taxes at every jurisdiction level (local,

regional and national).

The group has very low tolerance to tax risk and notably does not:

3 shelter proﬁts in tax havens or low tax countries where the group

does not have a legitimate commercial presence;

3 use licensing arrangements or any other scheme to transfer artiﬁcial

proﬁts to low tax countries; and

3 subscribe to or participate in corporate schemes that provide no

commercial beneﬁt to the group, or where tax beneﬁt is a signiﬁcant

contributing factor.

The group justiﬁably mitigates its tax liabilities and compliance costs by

making reasonable and appropriate use of the legislative framework and

the available options in each territory within which it operates. As such,

the group engages in legitimate tax planning to make the most efﬁcient

use of permitted tax reliefs and other incentives as well as access tax

losses from prior periods. Where possible, the use of such arrangements

will be presented to and agreed with the appropriate tax authority.

Where this is not possible, the group seeks expert advice to conﬁrm that

if there were to be challenges to its position these would more likely than

not be settled in its favor.

3.6. Insurance

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BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

The Tax department employs tax specialists based in Paris, NewYork,

London and Berlin. The Head of the Tax department reports to the Group

General Counsel.

The group is committed to establishing and maintaining a constructive

and transparent relationship with the tax authorities in all countries in

which it operates, and where such relationships are permitted under local

legislation and customs. The group considers that such arrangements

provide long-term benefits for both the group and the local tax

authorities.

3.6. Insurance

Vivendi holds centralized insurance coverage for its own risks and the

risks of its subsidiaries. Its policies are established by the group’s

Insurance department with major French and international insurers. They

are subject to regular competitive bidding to allow the group to beneﬁt

from optimal technical and financial terms. Certain risks incurred by

Universal Music Group are covered by contracts subscribed for by the

subsidiary in the United States.

Vivendi’s insurance plans go hand-in-hand with the group’s risk management

policy. With respect to the Property Damage/Business Interruption plan,

regular inspections of the group’s main facilities, in France and abroad, are

performed by the insurers, allowing them to better assess the risks covered,

and enabling Vivendi to optimize the terms on which it negotiates the corre-

sponding insurance policies. This risk management policy also includes plans

for resuming operations or ‘rescue’ plans in the event of accidents having an

effect on an essential component of a particular business. There are also

environmental protection measures in place.

The main insurance policies contracted by Vivendi include, among others,

those covering property damage and business interruption, civil liability

and workplace accidents.

3.6.1. PROPERTY DAMAGE AND BUSINESS INTERRUPTION

General insurance programs for the entire group have been contracted for a

total coverage of up to €400million per loss. These programs cover risks of

ﬁre, water damage, natural disaster and terrorism (depending on the legal

restrictions in each relevant country or state), as well as any business inter-

ruption resulting from these events. In general, the applicable deductible per

claim is €250,000 for the group’s different manufacturing facilities.

3.6.2. CIVIL LIABILITY

Insurance policies to cover civil liability in the course of business opera-

tions, as well as product liability for the entire group, have been secured

for €200million per year in total aggregate coverage.

3.6.3. WORKPLACE ACCIDENTS

Certain insurance plans are speciﬁc to operations in the United States,

particularly those covering occupational illness and workplace accidents,

where the employer is responsible for the insurance. Workers’ compensa-

tion programs have been established to comply with obligations required

by the laws of various states.

3.7. Investments/Divestitures

The main investments and divestitures carried out by Vivendi include:

3 investments in content described in Note10 to the Consolidated

Financial Statements, such as they appear in Chapter4 (the impact

of investments in content on Vivendi’s ﬁnancial position is described

in Section2.2 of the Financial Report in Chapter4);

3 acquisitions or disposals of financial investments described in

Note2 to the Consolidated Financial Statements such as they

appear in Chapter4 (the impact of acquisitions or disposals of

ﬁnancial investments on Vivendi’s ﬁnancial position is described in

Section2.3 of the Financial Report in Chapter4); and

3 investments in capital expenditure described in Note3 to the

Consolidated Financial Statements such as they appear in Chapter4

(the impact of investments in capital expenditure on Vivendi’s

ﬁnancial position is described in Section2.2 of the Financial Report

in Chapter4).

Moreover, the contractual commitments made by Vivendi in respect of the

acquisitions of ﬁnancial investments, as well as investments in capital

expenditure, are described in Note22 to the Consolidated Financial

Statements in Chapter4.

3.9. Raw materials

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BUSINESSES – FINANCIAL COMMUNICATION –

TAX POLICY AND REGULATORY ENVIRONMENT

3.8. Seasonality of Group Businesses

The activities of Vivendi’s subsidiaries are relatively seasonal in nature.

Sales volumes are higher during the last quarter, which is when UMG

achieves almost one third of its sales. However, by developing streaming

and subscriptions, as well as entertainment events, the group has been

able to spread sales over the year more effectively.

As regards pay-TV, the revenues of Canal+ Group are more consistent

since they depend on subscriptions. There are nonetheless more subscrip-

tions at the beginning of the school year in September and over Christmas

and the New Year.

Seasonal variations are not really noticeable in the case of business

activities linked to the customer experience or the business units involved

in Events Management events.

3.9. Raw Materials

The main raw materials used by Vivendi’s subsidiaries are:

3 paper, for product packaging at UMG and Canal+ Group; and

3 polycarbonates, for producing CDs and DVDs at UMG and Canal+

Group.

Paper and polycarbonates are not subject to price variations that could

have a significant impact on Canal+ Group’s activities, and UMG has

signed various contracts with its suppliers protecting it against ﬂuctua-

tions in raw materials prices.

In general, the activities of Vivendi’s subsidiaries are not dependent on

suppliers of raw materials.

4.1.Vivendi’s Societal Project

NON-FINANCIAL PERFORMANCE

4.1.Vivendi’s Societal Project

Achieving Vivendi’s industrial plan to transform itself from a French pan-

European group into a global player in entertainment, content and media

would be impossible without a clear vision of what it contributes to society.

Conveying ideas and images that captivate even the youngest of audiences,

the group offers more than mere consumer products; its content and

entertainment offering makes a genuine contribution to the fabric of society.

Culture promotes personal fulﬁllment, opens minds and creates bonds, and

Vivendi’s aim is to offer varied and high-quality content for its audience to

discover, sparking curiosity and shared emotion.

To achieve this goal, the group must be at the forefront of all cultures, able

to support creative talent wherever and whatever it is, helping it ﬂourish

and shine with a wide audience. Through the stories it tells and the

messages it conveys, it must also reﬂect the contemporary world, offering

challenging and inspiring content that engages audiences.

For Vivendi, 2018 was a year of refocusing its societal roadmap on priorities

that reflect its interpretation of the role of business in society. It was

launched in conjunction with work on the non-ﬁnancial performance state-

ment (see Section4.3 of this chapter) and conducted in line with the value

creation approach (see Section2.3 of this chapter). The group will continue

to work on this in 2019.

The roadmap is broken down into the following six commitments, the ﬁrst

three of which relate more directly to the group’s activities:

3 support creativity and foster a diversity of cultures;

3 promote diversity and inclusion in our businesses;

3 offer high-quality and meaningful content;

3 make people the company’s driving force;

3 take environmental action; and

3 contribute to local development.

These six commitments, described in Section4.4 of this chapter, make up

the framework of Vivendi’s non-ﬁnancial performance.

4.2.Governance centered on non-ﬁnancial performance

4.2.1. CROSS-MOBILIZATION

“The new non-ﬁnancial performance statement

asks businesses to report on their ability to

anticipate and manage their risks, and to

highlight opportunities to create lasting value.

This process is carefully followed by the Audit

Committee and paints a fuller picture of the

group’s performance.”

Cathia Lawson-Hall

Chairwoman of the Audit Committee

“The CSR Committee is dedicated to establishing

regular dialog with employee representatives

and raising awareness among employees of

the group on topics related to the company’s

social impact. These topics are especially

important to us because 60% of the committee’s

members are Vivendi employees.”

Paulo Cardoso

Chairman of the CSR Committee

SECTION 4. NON-FINANCIAL PERFORMANCE

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NON-FINANCIAL PERFORMANCE

The CSR (corporate social responsibility) and Compliance department

reports to the General Counsel, a memberof Vivendi’s Management Board.

It deﬁnes the strategic focus of the social responsibility policy and carries

out cross-functional assignments geared towards giving non-financial

performance an ever-greater place in the group’s decisions and business

lines, as a means of shaping overall performance:

3 leading the value creation project in collaboration with a steering

committee comprising members of the group’s Management Board

and its functional and operational departments (Finance, Legal,

Mergers & Acquisitions and HR);

3 rolling out the “Compliance Program”, currently being reworked, as

well as the anti-corruption program, and as such participating in the

Risk Committee led by the Internal Audit and Risk department and in

the Compliance Committee (see Chapter 2, Section3);

3 maintaining regular dialog within the group with the functional

departments of the head office and subsidiaries (CSR, Legal,

Finance, HR and Purchasing) to implement the CSR policy;

3 ensuring good relations between the group and its external

stakeholders, including citizens, NGOs and investors; and

3 participating as needed, together with the Investor Relations

department, in presentations devoted to the group’s approach to

corporate responsibility.

The Supervisory Board contributes directly to the governance of the group’s

non-ﬁnancial performance. In accordance with its internal rules, it regularly

monitors progress on the group’s social responsibility policy. The

Management Board informs the Board about the policy’s roll-out through a

quarterly activity report.

Created in 2017, the CSR Committee prepares the Board’s decisions, makes

recommendations and issues opinions on the group’s social and

environmental challenges, social dialog, employee engagement and

societal projects. It also sets out areas of improvement for the group on

social responsibility issues. In 2018, its work focused on diversity and equal

opportunities.

The Audit Committee reviews the group’s societal responsibility policy and

compliance policy twice a year. In 2018, its work focused on the progress of

the implementation of the anti-corruption policy and on reviewing the non-

financial reporting findings and work conducted by the designated

independent third party.

Since 2010, the Supervisory Board has used CSR criteria associated with

the three strategic commitments shared by all subsidiaries (which are

directly linked to their area of business) to determine part of the variable

compensation of senior executives. They are assessed on work that

promotes cultural diversity, protects and empowers young people, and

fosters knowledge sharing. Reconciling the valuation and protection of

personal data was added to these three initial commitments in 2015. The

Supervisory Board requires that the criteria established for each business

be based on its expertise and positioning.

The Corporate Governance, Nominations and Remuneration Committee,

within the Supervisory Board, assesses performance in CSR areas, and

determines the variable portion of compensation accordingly. For 2019, the

criteria take into account the extent of the group’s corporate social

responsibility and its corresponding initiatives and commitments.

4.2.2. NON-FINANCIAL REPORTING

ASAMANAGEMENTTOOL

Vivendi has developed a non-financial reporting process that gives its

stakeholders a clear view of the group’s positioning, opportunities and non-

ﬁnancial risks. The incorporation of indicators tied to strategic commitments

is an innovative approach in the media sector.

To meet the requirements of the European directive on non-financial

reporting, in 2018, Vivendi updated its environmental, social and societal

data reporting protocol to better address the responsibilities it faces, and

fine-tune its evaluation of actions taken. The group also finalized the

inclusion of Havas Group entities in the non-financial reporting scope,

bringing indicators speciﬁc to the communication and advertising sector into

the reporting protocol.

Updating the protocol provides an opportunity for Vivendi to have

discussions with its subsidiaries to ensure that non-ﬁnancial data providers

properly understand the indicators, and to adapt to changes in the group’s

activities. The CSR and Compliance department works with a network of

correspondents appointed to promote best practices and coordinate non-

financial reporting in each of the subsidiaries. Data is collected by

approximately 350 providers using a group-wide reporting system.

4.2.3. DIALOG WITH GROUP STAKEHOLDERS

“According to a survey conducted by Havas

Paris and CSA for the Observatoire des marques

dans la Cité, 80% of French people believe that

companies that do business ethically and

responsibly will achieve the greatest economic

success in the future. These ﬁndings conﬁrm

our belief that consumer/brand relationships are

transforming, and that the future belongs to

companies with a real social purpose.”

Julien Carette

Chief Executive Ofﬁcer of Havas Paris

To continuously improve its performance, Vivendi incorporates stakeholder

expectations into its strategy. The group maintains a dialog with academics

and NGOs, liaises with the ﬁnancial and non-ﬁnancial communities, and

meets with individual shareholders. Social responsibility policy has been

integrated into the annual training program for social partners (relations

with employees and employee representatives are described in

Section4.4.4.6 of this chapter).

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4.2.Governance centered on non-ﬁnancial performance

NON-FINANCIAL PERFORMANCE

Employees are key agents of change in the company. In 2018, the CSR and

Compliance department held an international seminar devoted to

“enhanced CSR”, now included in the business strategy. It was attended by

the extended CSR community, including CSR managers in the subsidiaries,

representatives of head office departments (Audit and Risk, HR,

Communication, Legal, Business Development) and representatives of the

operational functions of the subsidiaries that apply or are affected by the

group’s social responsibility policy. Dedicated to the question “Linking

business and social purpose: a competitive advantage for Vivendi?”, the

seminar sought to foster discussion on Vivendi’s commitments to deﬁne the

group’s key areas of contribution to society and adapt the CSR roadmap

accordingly. The seminar opened in a museum with a discussion on

creativity and social commitments. It was also a chance to hear the point of

view of experts, who shared their analyses of emerging consumer demand

for societal commitments and transparency from companies.

Vivendi has ongoing dialog with several non-ﬁnancial rating agencies with

a view to determining its positioning in the sector and making a more

informed assessment of its areas for improvement. In 2018, Vivendi was

once again listed in the following indices: FTSE4Good Developed and

FTSE4Good Europe (FTSE), the Global and Europe Ethibel Excellence

investment register (Ethibel), the Euronext Vigeo France 20, World 120,

Eurozone 120 and Europe 120, as well as several Stoxx indices. Vivendi

ranks among the top 1% best-performing listed companies worldwide

according to a November2018 study on corporate conduct for human rights

carried out by Vigeo Eiris. The group also takes part in the annual

assessment conducted by CDP.

Vivendi is involved in multi-partner initiatives to strengthen the analysis of

its impacts on society. It continues to contribute to the European

Commission’s Alliance to Better Protect Minors Online, an initiative that

brings together media and telecom companies and NGOs to protect children

(see Section4.4.3.2 of this chapter). The group works with the French

Association of Private Enterprises (AFEP) on the duty of vigilance and is a

memberof Global Compact France’s Human Rights Club, a forum for

information, dialog and sharing best practices with other companies and

NGOs.

The group’s emphasis on dialog is also reﬂected in forging links through

partnerships with key stakeholders, working together to develop solutions

and projects that support its societal commitments. These include:

3 the LINCC (Les Industries Numériques Culturelles et Créatives)

innovation platform, led by Paris&Co, the Paris’ agency for econo-

mic development and innovation. A hub for dialog within the media

innovation ecosystem (startups, public entities and leading compa-

nies in the industry), LINCC provides a forum for Vivendi to share its

commitments with stakeholders and support innovative new compa-

nies, with a special focus on projects that promote cultural diversity

and encourage more women into digital entrepreneurship;

3 Les Entreprises pour la Cité network, a group of companies

committed to social innovation. Vivendi provides speciﬁc support for

the Innov’Avenir program, designed to raise awareness among

young people about entrepreneurship and career paths in digital

technology (see Section4.4.2.3 of this chapter), as well as the

Diversity Charter, which Vivendi signed soon after its launch in

2004. In 2018, the group renewed its commitment to the charter, in

its new form which blends diversity and performance;

3 Sciences Po and Fondation Dauphine, renowned partners from

academia that Vivendi supports in rolling out programs for equal

opportunity and access to culture (see Section4.4.6.2 of this chap-

ter). Vivendi also works with the École du Management et de l’Inno-

vation at Sciences Po on its master’s program in communications,

media and creative industries. This partnership has resulted in the

creation of the Prize for Creativity and Diversity, awarded in 2018 to

non-European students who came up with the most original res-

ponses to the question: “What is your deﬁnition of creativity and

how does diversity contribute to creative momentum?”

3 Europeans Without Borders, with which Vivendi has partnered to

support a video campaign encouraging young citizens to vote in the

May2019 European elections; and

3 LADAPT, an association for the social and professional inte-

gration of people with disabilities, as part of the organization

ofthe 22

European Disability Employment Week from November

19 to 25, 2018.

This dialog-based approach establishes a general framework that each of

the group’s subsidiaries can draw on and adapt for use with its own

stakeholders. The examples below show this dialog in action and the

resources in place to enhance relations at subsidiary level.

Universal Music Group

UMG communicates regularly with a wide range of outside stakeholders,

including but not limited to national and European authorities, artists and

their managers, songwriters, retailers and digital music services, copyright

collectives, trade associations, organizations promoting copyright protection

and adhoc working groups or coalitions such as the US Alliance for Music.

Dialog is often conducted through or along with global and national industry

associations, such as the IFPI and its national afﬁliates, of which UMG is an

active member.

UMG regularly communicates with artists and their managers. In 2018,

UMG’s British subsidiary hosted a series of managers’ meetings creating

opportunity to share the latest insight and examine the fundamental shifts

in the music market. More than 150 artist managers attended one of the 11

meetings held over ﬁve days. In addition to the managers’ meetings, UMG

hosted an artist wellbeing and mental health workshop at Abbey Road in

conjunction with the Music Managers Forum and Music Support. This was

attended by managers and every memberof the A&R teams.

In several countries, UMG operates a web portal for artists and songwriters

that allows them to evaluate their promotional campaigns and provides

them with up-to-date ﬁnancial and marketing data relating to their releases.

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4.2.Governance centered on non-ﬁnancial performance

NON-FINANCIAL PERFORMANCE

Canal+ Group

Subscribers are key stakeholders for Canal+ Group, which held a meeting

with consumer associations in France in 2018 attended by the Head of

Distribution, Technical and IT department, the Head of Customer Relations

and the Customer Dialog Manager. The group sought to establish dialog

with consumer associations, including encouraging frequent informal

contact and feedback from them. The meeting was an opportunity to assess

the types of complaints submitted to Canal+ Group by consumer groups.

Canal+ Group also works with the Federation of E-Commerce and Distance

Selling (Fevad), which it has belonged to for many years and which acts as

a mediator within the sector.

Canal+ Group regularly conducts customer satisfaction surveys designed to

measure subscribers’ perception of its offers and content. The group has

developed an innovative service by upgrading its customer service center in

Rennes (France) to an experimental customer service laboratory, Canal Le

Lab. Among other things, Canal Le Lab is a platform for obtaining opinions

and building communities of test customers to collect feedback from the

earliest stages of designing products and offers.

Dialog with stakeholders of Canal+ Group’s international entities again

largely focused on piracy in 2018 (see also Section2.3.2.2 of this chapter). It

was set largely within the framework of associations, such as Convergence,

active in several African countries, and Content Alliance in Vietnam, which

bring together content creators and other leaders from the cultural

industries. In Vietnam, Canal+ Group’s subsidiary also conducted a survey of

400 students in an event dedicated to creative industries and copyright

protection, to gain a better understanding of the reasons for consuming

pirated content and to test the appetite of young audiences for non-linear

audiovisual content viewing.

Havas

The Havas Group’s agencies belong to numerous professional associations

and bodies providing a forum for consultations with industry stakeholders

including peers, customers, suppliers, regulators and consumers.

Many of them are rolling out consumer consultation tools in the form of

studies or polls to survey public opinion and provide brands with a 360°

understanding of their customers’ expectations. Examples include the BETC

Teens Communiteens program designed to study the mechanisms of

creating communities among adolescents, or the YouGov Galaxy Artiﬁcial

Intelligence study commissioned by Red Agency to assess Australians’

attitudes to artificial intelligence technologies. Surveys focusing on the

societal expectations placed on brands also include the “Observatoire des

Marques dans la Cité”, launched by Havas Paris in 2018, and the global

Meaningful Brands study led by Havas Media Group.

Some of the group’s agencies are developing ways of working upstream of

campaign design to involve more of the client company’s stakeholders,

especially when the campaign is devoted to sustainable development

issues. In 2018, for instance, 46 campaigns were conducted following

consultations with the client company’s stakeholders (primarily NGOs).

Gameloft

Gameloft has identified its major external stakeholders, which include

gaming communities, brands, media agencies and public and non-profit

organizations. The approach is based on the findings of a 2017 internal

survey conducted to measure managers’ understanding of CSR, and to draw

up an inventory of local stakeholders and initiatives underway in the group’s

studios.

Among other things, the process has resulted in a more effective structuring

of relationships with NGOs. In 2018, for example, Gameloft joined Women

in Games, a global professional body advocating gender diversity in the

video game industry.

Dailymotion

In its commitment to the quality charter of the SRI, the Internet advertising

trade body, Dailymotion and other SRI members guarantee the implementa-

tion of strict and clear measures on service quality, transparency and

business ethics to protect the integrity of advertising brands.

Dailymotion is committed to controlling its users’ exposure to advertising in

compliance with applicable regulations on the protection of personal data.

In line with regulations, Dailymotion also provides online users with an

easily visible and accessible alert system to notify the platform of any

illegal content (see Section4.4.3.2 of this chapter).

Vivendi Village

At Vivendi Village, dialog with industry professionals takes place through

the professional associations to which the entities belong (such as Fevad

for Digitick, or Prodiss, the French union of producers and concert venues,

for L’Olympia). See Tickets is a memberof the Society of Ticket Agents and

Retailers (STAR) and adheres to its code of conduct, which lays down

standards in terms of ethics, transparency and payment systems security

that operators must guarantee in their relationships with consumers, and

establishes a procedure for reporting complaints.

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4.3.Main non-ﬁnancial risks

NON-FINANCIAL PERFORMANCE

4.3.Main non-ﬁnancial risks

Pursuant to Executive Order No.2017-1180 of July 19, 2017 amending the

legislative framework on the publication of non-financial information,

Vivendi established a risk map of the main non-ﬁnancial risks related to its

activities in 2018.

Risks already included in Vivendi’s overall risk mapping were not relisted.

In addition, corruption risks and areas for vigilance in the supply chain were

analyzed separately as part of the group’s compliance policy.

Between April and August2018, Vivendi’s CSR and Compliance department

carried out interviews with representatives from a range of different

departments (e.g., CSR, HR, Legal, Public Affairs, Audit, Finance, Operations

and Marketing) at group subsidiaries to identify the main non-ﬁnancial risks–

environmental, social and human rights – in Vivendi’s business model.

Twenty-ﬁve contributors representing various departments in ﬁve of the

group’s subsidiaries (UMG, Canal+ Group, Havas, Gameloft and Dailymotion)

analyzed a list of risks that could have a material effect on their business.

This list was drawn up using industry references and benchmarks.

All parameters likely to have an impact on the group were analyzed and

weighted, taking into account potential effects on the group’s reputation,

customers or operations, ﬁnancial consequences, likelihood and processes

already in place at subsidiaries to minimize such risks.

This risk mapping process led to a list of seven risks (some applicable to all

subsidiaries and some only applicable to certain subsidiaries) being

identiﬁed as material, along with corruption risks and areas for vigilance in

the supply chain. The list lays out the “gross” risks inherent to the group’s

businesses, without taking into account mitigation measures that could

reduce their impact or likelihood. It was presented to the CSR Committee

and approved by the Supervisory Board’s Audit Committee.

The list of potential risks is presented below. The risks are the subject of

action plans and controls described in the group’s commitments, and some

of them (security and data protection risks, corruption risks and areas for

vigilance in the supply chain) are addressed in the compliance policy (see

Chapter 2 of this Annual Report).

The risk map will be regularly updated to ensure that the analysis of non-

ﬁnancial risks is in line with changes in the group’s businesses.

Non-ﬁnancial risks Action plans

Risks associated with attracting and retaining external talent

Loss of income (from customers and advertisers) and a decrease in audience numbers in the event of the departure of external

creative talent from the group – e.g., artists, authors, songwriters, actors, presenters, directors and producers that participate

in creating the music, ﬁlms, audiovisual content and entertainment programs that Vivendi offers its customers.

See Section4.4.1.1 of this chapter,

“Scouting and supporting talent”

Risks associated with attracting and retaining internal talent

Loss of income (from customers and advertisers) and a decrease in audience numbers in the event of the departure of internal

talent employed by the group (particularly people in top management positions or with key business skills).

See Section4.4.4 of this chapter,

“Makingpeople the company’s driving

force”

Risks associated with responsible content

Loss or gains in audience and income (from customers and advertisers) depending on how responsible the group’s content

is(particularly with regard to protecting young audiences), on ethical controversies and on the extent to which content

canbe monitored in an environment where information spreads quickly.

Additional costs arising from penalties or disputes with supervisory bodies or with governments in general.

See Section4.4.3.2 of this chapter,

“Supporting mechanisms to ensure

responsible content”

Risks associated with social dialog

Risks of additional operating costs in the event of a decrease in employee engagement, strikes or employee disputes

(management, compensation) at a time of market consolidation and technological transition in media and entertainment.

See Section4.4.4.6 of this chapter,

“Attention to people”

Risks associated with human rights and fundamental freedoms in business

Reputation risks or risk of penalties in the event of a direct infringement of the human rights or fundamental freedoms of group

employees or for a failure to implement measures to protect human rights in the business, particularly in cases of harassment

(excluding supply chain).

See Section4.4.4.6 of this chapter,

“Attention to people”

Risks associated with the businesses’ carbon intensity

Reputation risks linked to the increasing responsibilities of media companies, particularly in terms of Green IT (i.e., sustainable

data communication and storage) for user terminals (use of products), data centers and Internet and mobile networks.

See Section4.4.5 of this chapter,

“Takingenvironmental action”

Risks associated with data security and protection

Risks of losses or additional costs due to shortcomings in the security of infrastructure, information systems and service

platforms, to disputes or penalties in the event of non-compliance with applicable regulations and to customer data access

constraints. Reputation risks in the event of a failure to meet conﬁdentiality or personal data protection standards or a failure

tomaintain the privacy of employees, advertisers, and people in the public eye.

See Chapter 2, Section3,

“Compliancepolicy”

Risks associated with corruption

Risks related to acts of corruption and inﬂuence peddling.

See Chapter 2, Section3,

“Compliancepolicy”

Areas for vigilance in the supply chain

Areas for vigilance related to the activities of suppliers and subcontractors with which the group has an established business

relationship.

See Chapter 2, Section3,

“Compliancepolicy”

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Particular attention was paid during the risk mapping process to the

importance of sharing value equitably between the group’s stakeholders.

For an even better understanding and a more comprehensive governance of

the issues at stake in “value sharing”, Vivendi will carry out a more in-depth

analysis as part of its value creation approach – the aim being to more

effectively assess the value the group creates and then shares with its

stakeholders. This will complement the analysis of the existing measures

that are part of the group’s societal commitments and are described in this

chapter (e.g., investments in content, purchases from local suppliers and

shared skills with local cultural industries in countries where the group is

present).

For a description of the group’s policies and measures to combat tax

evasion, see Section3.5, “Tax policy” of this chapter.

4.3.1. RISKS DEEMED IRRELEVANT

WITH REGARD TOTHEGROUP’S BUSINESSES

Given the nature of its businesses, the following topics were not deemed

relevant to Vivendi’s risk mapping process:

3 the ﬁght against food waste;

3 the ﬁght against food insecurity; and

3 respect for animal well-being and responsible, fair and sustainable

food.

4.4.Our key commitments

4.4.1. SUPPORTING CREATIVITY AND FOSTERING

ADIVERSITY OF CULTURES

With subsidiaries and operations all over the world, Vivendi is at the

forefront of all cultures and creativity. Discovering and nurturing talents,

supporting them, and helping them flourish and make a name for

themselves in their home country and internationally is both its core

business and its active contribution to the development of 21

century

society.

To attract and retain talent, the group draws on all of its subsidiaries, which

together form a powerful value chain dedicated to the creative industry. On

a local level, it is committed to promoting cultural heritage by supporting

artists and content creators, resulting in a diverse line-up that channels

innovative new styles. Vivendi strives to support creativity wherever it is

and nurture it in the places where it will inspire local audiences.

Since supporting content creation goes hand in hand with the emergence of

new forms of expression, the group, as a major player in the creative

industry, tirelessly innovates, produces and distributes original, quality

content. In 2018, it invested more than €2.7 billion in content creation.

4.4.1.1. Scouting and supporting talent

Talent is the beating heart of Vivendi’s activities, from musical, audiovisual

and motion picture content to live performances, comedy, communication

and video games. The group’s growth is driven by discovering, promoting

and retaining talent (see also Section4.4.4 on cultivating and keeping

creative talent in-house).

Discovering and investing in new talent is not only crucial to the group’s

business model, but is also essential to rejuvenating the cultural landscape

of the countries where it operates. Retaining artists is fostered by the

group’s ability to map out their career paths by widening the field of

possibilities for talent across the value chain, from music platforms to

recording an album, from talent shows to headlining at the Paris’s L’Olympia

venue, from online videos to TV talk shows, from shorts to feature-length

ﬁlms, stage shows or TV series.

Music

UMG takes a many-layered approach to scouting and supporting talent. This

includes working closely with local A&R teams who are close to creative

ecosystems and familiar with local cultural sensibilities, and whose own

networks put them in direct contact with artists, managers, songwriters and

producers. The expertise of these teams, who build trusting relationships

with artists and support their creative process, is a key asset that helps the

group forge lasting partnerships.

The strong brand recognition and creative depth of UMG’s labels, along

with the company’s timeless catalog, hold a powerful draw for artists. UMG

ensures that no door is closed and no route to market is shut to any act. An

artist can sign directly with a label, enter into a music services deal with

Caroline Records (caroline.com), or be self-sufﬁcient through Spinnup, an

app that distributes unsigned artists to digital partners globally.

The Universal Music Group & Brands team is a world leader in the creation

of entertainment content. UMGB tailors global campaigns that enable

artists to forge creative brand partnerships so they can reach new fans and

inﬂuencers. Universal Music Group & Brands works on diverse projects with

partners in more than 70 countries and contributions from more than

800artists each year. Two examples among many include the Vacheron

Constantin campaign featuring Benjamin Clementine and James Bay, and

BeautyRest and Philips’ sponsorship of the North American debut live

performance of Sleep, an eight-hour composition by Max Richter.

UMG’s expertise across a broad spectrum of businesses, from merchandis-

ing to live performances, audiovisual content, ﬁlms, theatrical releases,

data analyses, digital innovation and much more, means that artists are

supported in each aspect of their career (see Section2.3.2.1 of this

chapter).

Films, series and on-screen talent

To support actors, comedians, presenters and columnists in their

development, Canal+ Group has two cross-business committees in its

Publishing division, one that meets regularly and another specifically

dedicated to new season programming. Moreover, speciﬁc contracts allow

Canal+ Group to guarantee the exclusivity of key talents for its content,

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and/or enjoy rights of ﬁrst refusal on their future projects. At the end of

2018, the group established an Artistic Talent department, tasked with

creating and rolling out a cross-business talent scouting and management

system in France.

With its status as the leading audiovisual group in French-speaking Africa

and its growing investment in local content, Canal+ International opens up

new perspectives for artists, and more and more of them are keen to work

with a pan-African group producing quality content, thereby giving them

unmatched visibility and recognition in Africa and beyond. The group’s

expansion in the broadcasting sector – with the launch of no fewer than

three new channels in 2018 alone – allows it to regularly offer new projects

to talents. Further enticement comes through the prospect of synergies with

other Canal+ Group structures, which help increase its programs’ visibility

and proﬁtability. The quality and loyalty of presenters on Canal+ channels in

Africa is ample proof of the group’s immense appeal for audiovisual sector

talents. The Canal+ International Programs department is tasked with

managing dialog with market players, scouting talents and monitoring

relationships with them, and bringing their projects to fruition in a manner

consistent with the channels’ editorial lines.

Canal+ Group also puts great emphasis on discovering and supporting ﬁlm

and series talents through Studiocanal.

Groups of experts in ﬁlm and series production review proposals received by

Studiocanal (more than 400 ﬁlm and series scripts every year), examining

them from artistic, ﬁnancial and marketing angles. This gives rise to a ﬁrst

selection that is then presented to the operational sales teams. A shortlist

is subsequently presented to a Canal+ Group investment committee.

Team coordination, notably through regular artistic meetings and the

pooling of lists of creators identiﬁed by the various production teams allows

artists to grow their presence in ﬁlms as well as on TV. A prime example is

Timothée Hochet, who was ﬁrst spotted on YouTube. Now, having created

Calls for the Canal+ Création Décalée label, he is poised to adapt the format

for American audiences, produced by Studiocanal and Apple.

Studiocanal is true to a consistent editorial line that attracts talent by

offering quality ﬁlms for international audiences and the strength of one of

the world’s biggest catalogs. The relationships of trust between artists and

the Studiocanal teams are also key to effective collaboration.

Shorts and online content

Canal+ Group has a wide variety of structures in place to find talent, in

particular through short formats. The Bureau des Auteurs is a pool of young

scriptwriters who are given the opportunity to write short formats for the

channel. Canal+ has also set up a digital content division offering artists

assistance in producing short formats developed speciﬁcally for the web.

The Création Décalée label is a springboard for artists, giving them total

freedom to express themselves on TV in terms of style, content and format.

Throughout the year, Canal+ Group challenges artists in new roles in

response to specific programming needs or for the Canaltour shows, an

event for subscribers.

In 2018, to mark its 30

anniversary, the Planète+ channel launched an

unprecedented operation in the form of a call for projects to find a new

online news reporter. Planète+’s news explorer will be tasked with

embodying the channel’s values by providing an original and enlightened

view of the world through reports that will be shared on Planète+ social

networks. The winner will receive funding of up to €30,000 for their project.

Dailymotion has meanwhile tapped back into its DNA of discovery and

support for creativity by encouraging independent young creators to offer

quality content covering a wide range of issues on its platform.

From the stage to television

Maintaining strong links with live entertainment, particularly in comedy

(which is at the heart of Canal+’s business), allows the group to form

partnerships with new artists via the acquisition of broadcast rights to

one-person shows. Examples include François Xavier Demaison, Manu

Payet, Ahmed Sylla and Roman Frayssinet in France, or Valery Ndongo,

creator of the Africa Stand Up Festival, in Africa.

Olympia Production, Vivendi Village’s live show and concert production

entity, shares Vivendi’s commitment to supporting talented young musicians

and comedians, such as comedian Roman Frayssinet: signed up in 2018, he

now works with Canal+ as a regular guest on Mouloud Achour’s Clique

Dimanche, and performs on stage at the Théâtre de l’Œuvre.

Incubators, writing programs and talent hunts

Spotting talent often means identifying potential that has not yet found his

or her voice, and helping him or her mature. That is why Vivendi supports

young ﬁlmmakers, screenwriters and singer-songwriters in their creative

endeavors through a variety of residence-based writing workshops and

talent incubator programs.

Vivendi and Canal+, alongside the city of Cannes, the Université Côte d’Azur

and its foundation, have created the Cannes – Vivendi/Canal+ International

Chair. Its purpose is to discover talented screenwriters and creators of

tomorrow’s audiovisual works and feature films, and to help them grow

through advanced writing programs. These programs take the form of two

dedicated writing programs, one for motion pictures (the Storytelling

Institute) and another for series (the CannesSerie Institute). They feature

well-known professionals, including those from Canal+ teams (Studiocanal

and Créations Originales).

Since 2014, Canal+ Group’s youth division has been a partner of La Résidence

Jeune Public created by Folimage, a producer of animated works. Each year, La

Résidence Jeune Public helps a director make an animated short ﬁlm, pre-

purchased by Canal+ Family. In 2018, Mexican director Raùl “Robin” Morales

Reyes participated in the program with his short ﬁlm A Tiger With No Stripes.

Canal+ also has partnerships with screenwriting programs dedicated to

short and feature-length ﬁlms in a speciﬁc genre (musical comedy in 2018),

offered by the SoFilm movie magazine. The aim is to encourage innovative

writing methods by bringing together the key players in the filmmaking

process. Canal+’s film purchasing teams also sit on judging panels in

numerous competitions and ﬁlm prizes, which allows them to spot emerging

talents. Examples include the Sopadin Prize for screenplays, where the

winning ﬁlm of the 2017 edition, Un Divan à Tunis, was pre-purchased by

Canal+ in 2018.

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Canal+ Poland, in association with Polish director Andrzej Wajda’s film

school and the Polish Film Institute, is one of the main partners of the Script

Pro competition for young novice screenwriters, which offers them a real

chance to see their screenplay become a ﬁlm. The selected participants

develop their screenplays in workshops organized by the Wajda School,

with Canal+ financing the grand prize awarded to the best one. Also in

collaboration with the Wajda School, Canal+ Poland continued to support

the Canal+ Series Lab for the third year in a row in 2018. The Canal+ Series

Lab is a laboratory for screenwriters, directors and producers set up to

develop innovative, multi-season Polish series and dramas with strong local

roots. In 2018, four scripts were worked on and one was put into a develop-

ment stage.

In Africa, several writing workshops are organized during the ﬁlming of local

drama productions. Canal+ International also partners with festivals and

young talent development laboratories for film production, such as the

Ouaga Film Lab (Burkina Faso) and the Emergence Festival (Togo), and funds

training programs for video journalists (see Section4.4.6.1 of this chapter).

The aim here is not only to increase the numberof perspectives presented,

helping diversify the stories told on the small screen, but also to increase

the skills of the audiovisual sector in sub-Saharan Africa by promoting the

emergence of future content producers with the necessary technical skills

and qualiﬁcations to work with the group.

UMG supports new talent and emerging artists in the music industry by

sponsoring educational programs (see Section4.4.2.3 of this chapter). New

artists continue to be discovered on Spinnup, the UMG service that

distributes emerging artists to leading digital music partners. Spinnup

interacts closely with UMG’s label A&R executives. Since 2013 more than

40 artists (Nelick, Maes, Vigiland, Hornet la Frappe and more) have signed

to UMG, including eight in 2018 alone. Spinnup also regularly provides

artists with the opportunity to perform at major music events such as

LePrintemps de Bourges in France and the Raptags contest, organized

byurban music label Chapter One, in Germany. To date, more than

200,000artists are registered on Spinnup.

UMG continues to partner with TV franchise The Voice, signing local talent

from the various national adaptations of the show, which is broadcast in

over 180 countries. UMG also works with brands on various initiatives such

as the Project: Aloft Star talent search competition, developed in

partnership with the Marriott hotel group in the United States, Europe, Asia

and the Middle East.

Communication and visual arts

To foster new talent among photographers and illustrators, some Havas

agencies such as BETC and Havas Amsterdam organize “portfolio

meetings” with artists and their agents to create links between creative

teams and varied talent profiles. Furthermore, UMG France signed a

partnership with French Ecole de l’image Gobelins for future projects

combining music and artwork.

Havas agencies focus on promoting creativity in a range of forms. Magasins

Généraux, the creative hub formed by BETC, hosts several exhibitions

throughout the year, in addition to hosting the contemporary art center

CNEAI (Centre National Édition Art Image). One example was Artagon.IV –

Heading East!, promoted by the Artagon program designed to showcase

creative work by young Europeans, which presented the works of 32 young

artists selected from art schools in Paris and Moscow. Similarly, Arnold

Worldwide has a dedicated space known as the Good Gallery to promote

local creativity. In 2018, it hosted works by female visual artists in the

exhibition More Than a Riot, which focused on the position of women in

society. Lastly, since 2014, the Havas Gallery in Puteaux’s Havas Village

hasspecialized in exhibitions of still or moving images to introduce its

employees and visitors to the “image makers” of today.

4.4.1.2. Promoting local artists

The group serves as a cultural showcase that supports local artists

wherever it operates. UMG holds an extensive catalog offering a vast array

of musical genres stemming from the group’s commitment to investing in

local talent. The development of original Canal+ content marketed under the

Créations Originales label and in Studiocanal’s films is permeated with

French and European culture, while Canal+ International is a committed

stakeholder and major investor in local movie and TV production,

particularly in Africa.

UMG: investing in local talent

Supporting culture in all its diversity is integral to Universal Music Group’s

business, as evidenced by its extensive catalog covering every musical

genre. UMG’s growth stems from its ability to develop its roster of

international artists, but also to spot and promote local artists, from young

and emerging to best-selling acts. An established leader in its different

national markets, UMG recorded albums in 44languages and released in

120 countries in 2018.

Thanks to its unrivalled global marketing network, the group can take a

local superstar global. UMG labels in Europe and Africa have also joined

forces for the first time to sign and release African songwriters and

performers. UMG Nigeria, the group’s newly launched division in Western

Africa, co-signed Nigerian artist Tekno in conjunction with Island Records

UK as well as Tanzanian singer/songwriter Vanessa Mdee in conjunction

with AfroForce1 Records, Universal Music Central Europe and Universal

Music South Africa.

Canal+ and Studiocanal: rooted in European culture

Canal+ Group is positioned as a major European and French media

company, proud of its ability to create content with strong local roots and a

global resonance.

109 French-language ﬁlms

ﬁnanced by Canal+ in 2018

In 2018, Canal+ Group renewed its agreement with the French ﬁlm industry,

extending until 2023 a partnership dating back more than 30 years.The new

agreement, combined with new rules governing the media release

schedule, reinforces Canal+’s unique position in the financing and

distribution of French ﬁlms, where it remains the numberone partner. In

2018, Canal+ actively supported the industry by investing €101million for

the pre-purchase of a total of 109 French-language ﬁlms.

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Canal+ Group’s youth channels are also major players in the production of

animated series in France. They provided more than €7.7million in ﬁnancing

to support 17 French-initiative animated series and programs, which they

broadcast exclusively in 2018. French and European culture is also central to

the development of the youth channel’s programming and content. 2018

was a bumper year, with the launch of three new series adapted from

literature: Ella Oscar & Hoo, Non-non and Arthur et les Enfants de la Table

Ronde, not to mention the release of the second season of La Cabane à

Histoires, an original production of the Piwi+ channel, whose ﬁrst season

won a prize at the 2018 Emmy Kids Awards.

In 2018, Studiocanal once again demonstrated its European leadership in

the production, acquisition and distribution of movies and TV series. The

Canal+ Group’s motion picture subsidiary, which comprises the French unit

and the British and German subsidiaries, is also active in Australia and New

Zealand. In 2018, Studiocanal distributed 43 new feature-length ﬁlms from

seven different countries in the five territories in which it operates. It

produced or co-produced 21 of them, working with 20 directors of four

different nationalities.

Canal+ International: supporting local ﬁlm and audiovisual content

One of the leaders of cinematic expression in mainland France and its

overseas departments and territories, Canal+ Group also plays a signiﬁcant

role in Africa, Poland and Vietnam, where Canal+ International’s subsidia-

ries invest in local talent and give them international opportunities.

Dramas, series and documentaries created by Canal+ International are now

being developed under the Canal+ Original label – a variation of Créations

Originales, and a big part of Canal+ Group’s DNA. New programs adapted to

the speciﬁc nature of each region and involving local talent were launched

in 2018. In Africa, Canal+ brought out its first original series, Invisibles,

created and directed by Franco-Ivorian director Alex Ogou. Canal+ gave

considerable support to the creation of this blockbuster, which took nearly

two years of development, one year of production and ﬁve months of ﬁlming

in Côte d’Ivoire.In September2018, Invisibles became the first French-

language African series to receive a prize outside Africa, winning Best

Foreign Francophone Story at the La Rochelle International TV Drama

Festival. In Poland, two years after the success of Belfer, nc+’s multi-prize-

winning debut original drama, the group launched two new fully Polish

series, Raven and Illegals, the second adapted from the spy novel of the

same name by writer Vincent Severski.

In 2018, Canal+ International reaffirmed its commitment to promoting

African talent by participating in an increasing amount of local content. It

helped produce dramas and programs for immediate broadcast, like comedy

program Le Parlement du Rire, as well as Rendez-vous, a series looking at

African countries and their cultural heritage, with the aim of portraying the

continent in all its diversity. Canal+ International is also a committed player

in African ﬁlm industry, having co-produced or pre-ﬁnanced nearly 70motion

pictures since 2005. Each month, Canal+ broadcasts at least one African

film that is also made available in a non-linear format. In 2018, award-

winning ﬁlms such as Félicité (Senegal), Wallay (Burkina Faso), La Raison du

Plus Fort (Burkina Faso) and Makala (Democratic Republic of Congo) enjoyed

extensive exposure.

In addition, the group is continuing to support leading pan-African festivals

celebrating local ﬁlmmaking, such as Clap Ivoire in Côte d’Ivoire, Émergence

in Togo, and Écrans Noirs and Yarha in Cameroon. It also supported Série

Series Ouagadougou, the ﬁrst pan-African event entirely devoted to series,

which held its ﬁrst edition in 2018.

In overseas France, Canal+ is a major player in television, but is also a company

that has a close relationship with its customers. This aim of promoting local

heritage was behind the decision by Canal+ Antilles -Guyane, Canal+ Réunion

and Canal+ Calédonie to support regional feature and short film festivals:

Nouveaux Regards in Guadeloupe, Prix de Court in Martinique, and Même Pas

Peur in Réunion.

Canal+ channels in French overseas departments and territories have a

speciﬁc budget for producing ﬁlms and documentaries in collaboration with

local production companies. The issues addressed reﬂect local cultures, like

Jocelyn, Mi Tche Mwen, a documentary by Martinique director Maharaki,

which won an award at the Nouveaux Regards festival in 2018, Deye Mas

La, a documentary that shows all the facets – historical, identity and

social– of the carnival of Guadeloupe, and Métisse de Coeur, co-produced

by Canal+ Calédonie, which tells the stories of mixed couples in New

Caledonia. Canal Outre-mer’s French overseas department event channel,

with thematic programming of local productions from the West Indies and

French Guiana, Réunion and New Caledonia, gives these productions a

chance to shine. Canal Outre-mer also runs channels for overseas cultural

and sports events, such as the Grand Raid and the Sakifo festival in Réunion

and the Terre de Blues festival in Guadeloupe, allowing viewers from over-

seas France (and even from the mainland for the Grand Raid) to experience

these events as if they were there.

Another local event channel, Novegasy, was launched in Madagascar in

2018. Dedicated entirely to local dramas (in Malagasy, a ﬁrst for Canal+

Group), the channel mobilized exclusively Malagasy resources, from the

production of the content broadcast (25 feature ﬁlms and six series) to the

design of the channel and the trailers. The channel will continue broadcas-

ting in 2019.

Canal+ Group’s Vietnamese subsidiary is also involved in local productions,

funding some 15Vietnamese films in 2018. The goal is to enrich the

channel’s ﬁlm programming and create a regular tune-in time for ﬁlm fans,

with the premiere screening of a feature ﬁlm after its theatrical release on

the last Friday of every month. In Poland, with its nc+ subsidiary, the group

also continues to offer local programming on its channels and to support

local cinema: the ﬁlm Cold War, winner of the Best Director Award at the

2018 Cannes Film Festival, was co-produced by nc+, which had previously

supported director Pawel Pawlikowski for his ﬁlm Ida. Ale Kino+ is devoted

to European and Polish art house ﬁlms and series, as is Canal+ Film, which

has a programming window dedicated to local art house movies.

4.4.1.3. Preserving and promoting heritage works

Preserving and promoting their international musical and motion picture

assets is a core mission at UMG and Canal+ Group, which manage out-

standing catalogs representing both a rich cultural heritage for audiences

and a powerful source of value creation for the group.

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Promoting music catalog assets

For UMG, promoting its catalog assets is a global, cross-genre commitment,

backed by extensive investment by its subsidiaries around the world (see

Section2.3.2.1 of this chapter).

54% of UMG’s digital sales and 39% of its physical sales

aregenerated by the catalog (works marketed for more

than three years)

Deutsche Grammophon teamed up with Google Arts & Culture to launch an

ambitious project to restore and digitize remarkable recordings from the era

of 78 rpm discs which stopped being produced in 1948. The Shellac Project

opens online access to treasures from the label’s sound archives: highlights

include previously lost recordings from Piero Mascagni and Louis

Armstrong, and even readings by Leo Tolstoy.

2018 marked the 120

anniversary of Deutsche Grammophon, the world’s

oldest classical music label. The Yellow Label celebrated the milestone with

a gala concert at Beijing’s Forbidden City. Long Yu, the first Chinese

conductor to lead a performance in this iconic setting, and Russian pianist

Daniil Trifonov, a leading memberof Deutsche Grammophon’s younger

generation of artists, figured among the globally renowned performers

brought together for the concert. It reached a vast global following via

simultaneous live streams in YouTube’s 360-degree virtual reality and

regular formats.

Along with continued investment in digitizing its musical catalog, UMG has

established a centralized Creative Metadata Program powering music

discovery for Voice, Streaming, Playlisting and Sync. To support this work

technically, UMG enhanced the Pompidou Centre’s Institut de Recherche et

Coordination Acoustique/Musique’s (IRCAM) machine learning software to

output over 200 automated attributes for all of UMG commercially released

digital audio content. UMG built the Amplify platform, allowing repertoire

owners to tag their content and combine “human tags” with machine tags

to service data to the group’s accounts. UMG is also working together with

its key digital distribution partners to best use these advanced data to

power their search capabilities. By doing so, UMG continues to push the

industry forward and provide a richer experience for fans and carve out a

competitive edge for the group’s content.

In addition to its catalog, UMG has a legacy of legendary locations in the

history of music. In 2018, Abbey Road Studios, owned by UMG, was

certiﬁed as one of the top 10 historic places for music and literature in the

United Kingdom, alongside Shakespeare’s birthplace and Jane Austen’s

home. Notably, in 2018 Abbey Road Studios was named Studio of the Year

by the UK’s Music Producers Guild. The prestigious award honors the

studio’s ability to blend more than 80 years of history with cutting-edge

techniques, and to build new structures, including two new recording

studios, added to the fabled Studios One, Two and Three and improving

access for emerging artists.

Promoting movie catalog assets

Studiocanal continues to pursue an ambitious policy of promoting and

preserving cinematographic heritage. Its motion picture catalog is one of the

largest in the world, featuring 5,500 titles. In particular, it is continuing to

digitize these masterpieces, allowing a wider audience to access them and

thereby preserving them for the future (see Section2.3.2.2 of this chapter).

These movie assets are an integral part of national and world cultural

heritage. That is why Studiocanal regularly engages in events and partner-

ships that place ﬁlms in a multicultural dialog with other forms of art.

To mark the restoration of Jean Renoir’s ﬁlms and their release in a boxed

set, Studiocanal lent its support to the Musée d’Orsay to offer the public an

extraordinary exhibition where Auguste Renoir’s pictorial work and the

cinematographic work of his son Jean conversed with each other in a

unique exchange. The exhibition “Renoir Père et Fils, Peinture et Cinema”,

which ran from November6, 2018 to January27, 2019, gave Studiocanal

the chance to reafﬁrm its commitment to culture in general and the promo-

tion of European ﬁlm heritage in particular.

In 2018, Studiocanal also restored Alain Resnais’ masterwork L’Année

Dernière à Marienbad, directly inspired by Adolfo Bioy Casares’ novel

LaInvención de Morel, with a scenario by Alain Robbe-Grillet. During the

exhibition “L’Invention de Morel ou la Machine à Images” (March16 to

July21, 2018) at the Maison de l’Amérique Latine in Paris, Studiocanal

showed extracts, photograms and projections of the restored ﬁlm. In the

wake of the event, to celebrate the avant-garde spirit that permeates Alain

Resnais’ ﬁlm, Studiocanal also presented the ﬁlm to the public in all of its

territories, both in movie theaters and through a collectable video edition.

4.4.1.4. Innovating in entertainment content

anddevelopment

Supporting creation also means innovating to foster the emergence of new

forms of expression.

Havas, for instance, is committed to building relationships with startups

offering innovative solutions that enable brands to better interact with their

customers. This is the focus of the group’s acceleration program, housed in

the Station F campus in Paris and dedicated entirely to AdTech startups. In

the United Kingdom, Havas Media has launched Media Futures, a division

dedicated to fueling the debate on how emerging technologies can meet

the needs of customers and agency teams. Tirelessly seeking to push back

the boundaries to blend advertising, entertainment and media in new and

engaging content and experiences, the group and its subsidiaries are

involved in countless innovative initiatives. In France, BETC has devised a

new production model in the form of BETC Pop, a hybrid structure which

includes a content and events production agency, media and a music label

(licensed to Polydor Universal). BETC Pop works with customers that want

to put pop culture at the heart of their branding strategy.

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In North America, Havas joined forces with UMG record label Capitol Music

Group to launch Annex Tower Creative. Located in the iconic Capitol

Records Tower in Hollywood, Annex Tower Creative is a first-of-its-kind

alliance between a U.S. creative agency and an American record label.

Annex Tower Creative will allow for cross collaboration between brands

and artists across Capitol’s multiple record labels, as well as unique

partnerships within music, entertainment, art, fashion and brands to create

cutting-edge content and experiences.

In 2018 Capitol Music Group launched the Capitol Innovation Center (CIC) to

bring together leading thinkers from the music and technology industries, as

well as the student community, to help drive the future of innovation in

music.The CIC will provide space and conduct event programming designed

to foster innovative ideas, bridge the gap between content creators and the

tech community, and foster the next generation of leaders in music. The CIC

hosts a collaborative workspace and songwriting studio where students,

technologists, and content creators will work together under one roof.Other

initial participants in the CIC includeUMG Accelerator Engagement

Network andAbbey Road Red Incubator. In December2018, the CIC hosted

Capitol Royale, a 2-day creativity and innovation marathon. Capitol Royale

brought together more than 500 guests, 100 hackers, 15 partners, nearly 20

startups as well as producers and songwriters for a fully immersive

experience to re-imagine music consumption and discovery.

In 2018, UMG participated in 10 hackathons globally. Over 100 prototypes

were built during these events. UMG further demonstrated its commitment

to promoting the development of innovative music -based startups by

continuing to expand its Accelerator Engagement Network. At the end of

2018, UMG Global Accelerator Engagement Network has created

partnerships with the following 8 accelerator programs: APX by Axel

Springer and Porsche (Germany); Chinaccelerator (China); LeanSquare

(Belgium); LINCC (France); NYC Media Lab (United States); SparkLabs (Korea);

The Music Den (Canada); Melbourne Accelerator Program (Australia).

UMG continues to lead the music industry in the creation and support of

new music-related product categories and formats. The culmination of a

multi-year plan, in 2018 UMG launched a new product category called

“interactive tracks.” Unlike normal stereo ﬁles, these tracks allow music

fans to interact with the sub-elements of a song, such as the vocals,

backing vocals, guitar, bass, keyboard, and drums.

4.4.2. PROMOTING DIVERSITY AND INCLUSION

INOURBUSINESSES

Promoting diversity and supporting equal opportunities and inclusion is a

major area of development for Vivendi. Vivendi has built its diversity and

inclusion policy on three essential pillars: its content, its external and

internal talents, and its societal projects. The approach as a whole is

geared towards achieving better business performance and greater

inclusivity.

4.4.2.1. Promoting diversity in content

Vivendi and the group’s companies have a speciﬁc responsibility for the

content produced and distributed to a wide audience. The depiction of a

diverse and open society is a key requirement for the group’s businesses.

This diversity fosters greater creativity; giving it its full weight results in

products that faithfully reﬂect the group’s customers.

Establishing forums that guarantee diversity

Ahead of its time, Canal+ Group has consistently cast the inclusion of

diversities as a differentiating element in the creativity and editorial

statements of its channels. The broadcast and programming departments of

the group’s channels have always believed firmly in the importance of

allowing television to mirror society. This commitment, reiterated every

year, notably before the CSA (the French broadcast media regulator), was

behind Canal+ Group’s establishment of a Diversity Committee and the

creation of a Diversity Liaison Officer position. In 2018, Canal+ Group

appointed a new Diversity Liaison Ofﬁcer, who is also in charge of diversity

and inclusion issues for the Vivendi group. The organization of the Diversity

Committee has also been revisited to make its action more efﬁcient. The

Committee comprises the channel and broadcast directors bound by the

commitments made to the CSA (namely C8, CStar, CNews and Canal+), as

well as the Director of Créations Originales and the group’s Head of Documen-

taries, the Head of Regulatory Affairs and the Head of HR Development. The

Diversity Committee’s role is to ensure a balanced and non-stereotypical

representation of diversity in the channels’ broadcasts, to prepare the

annual commitments and reports submitted to the CSA, and to review

prospective programs from the standpoint of inclusion and equal opportuni-

ties. Its meetings are also a forum for discussing good practices within the

group.

Improving the representation of women on screen

On the air, as anchors, through reports or thematic programs, or via unifying

projects, the group’s channels are all committed to a better representation

of women.

The Planète+ documentary channel regularly puts women in the spotlight,

for example via its special focus on International Women’s Day. On

March8, 2018, it aired Planète Femmes, a special program featuring

14documentaries on women who inﬂuenced their times, and a prime-time

broadcast of the documentary Femmes du Rwanda. The viewers’ experience

was “mirrored” by that of the group’s employees, as a preview of the ﬁlm

was screened on the same day in the presence of its director, Sonia

Rolland, with the aim of raising awareness among teams in the group.

In March, during “Women’s Month”, Canal+ International also offered a

focus on women to audiences in Africa, with ﬁlms including Félicité, Jackie,

Miss Sloane and Ghost in the Shell, plus documentaries such as Mama

Colonelle. The group also reiterated the L’Afrique au Féminin training

program, selecting seven directors (both men and women) from seven

different countries who received post-production training after making a

ﬁlm in their country of origin on the theme of “Women in African Society”

(see Section4.4.6.1 of this chapter).

24/7 news channel CNews is working to improve the representation of

women in a numberof ways: by naming anchorwomen to lead the most

prominent shows, and by encouraging journalists to interview female

guests and experts. In 2018, the numberof women on air increased by 5%,

and the numberof female experts by 15%.

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More than 60 stories and reports on diversity, inclusion

and equal opportunity issues on CNews in 2018

To mark International Women’s Day, Havas and Universal Music & Brands

made a video of George Brassens’ song Les Passantes, directed by the young

and talented Charlotte Abramow. A poem in pictures, with a modern and

effective voice, it is a real ode to women, their freedom and their diversity.

Encouraging women to succeed

Canal+ Group’s constant efforts to improve the representation of women on

its channels undeniably contribute to encouraging women to succeed and

make their own choices (including professionally) freely and without self-

censorship. Créations Originales including Baron Noir, season two (with a

woman elected President of the French Republic) and the fourth season of

Le Bureau des Légendes (where Marie-Jeanne is promoted to head of

department) feature women in leading roles, showing that a positive

depiction of female roles, where stereotypes are rejected, can inspire

women, open doors and change mentalities.

It is with the same mindset that CNews has set itself the goal of increasing

the numberof women experts invited on its broadcasts.

Giving women room to thrive is also essential in other businesses such as

the music industry. That is why one of UMG’s stated priorities in 2018 was

to improve the process for selecting producers and sound engineers so that

more women are hired for projects. According to a study called “Inclusion in

the Recording Studio”, conducted by USC Annenberg as part of the

Annenberg Inclusion Initiative, of which UMG is a partner, today, fewer than

2% of producers in the music industry are women. By encouraging women

to consider this kind of career, UMG also hopes to expand its talent pool.

UMG also became one of the co-founding organizations behind She Is The

Music (SITM), a non-proﬁt created to drive equality and inclusion for women

in music, especially female creators. Along with developing the ﬁrst-ever

global industry database of female creators involved in music production,

She Is The Music will offer residencies, songwriting camps and a mentor-

ship program to support the next generation of women in music across

underserved communities. The Chairman and CEO of Universal Music

Publishing Group is a co-founder and serves on SITM’s Board of Directors.

Finally, as part of the Sounds Like London festival, UMG UK partnered with

the National Portrait Gallery for “Women in Music” – an exclusive insight

into the music business with Decca Records President Rebecca Allen and

Decca-signed singer-songwriter Imelda May, one of the biggest-selling UK

female artists of the year. In the year of the centenary of the women’s vote

in the United Kingdom, Sounds Like London highlighted the important

contribution made by women in the music industry.

Raising the proﬁle of people with disabilities

Disabled people are also increasingly represented and visible on the Canal+

Group channels. CNews, for instance, aired more than 30 reports about the

daily lives of disabled people.

On Canal+, one of the regular consultants on Canal Sport Club is Michael

Jérémiasz, an Olympic champion in wheelchair tennis, while Hab-Eddine

Sebiane, former captain of the French wheelchair football team, is a regular

guest on the 20 Heures Foot magazine on CNews.

Lastly, C8’s 7pm slots on Fridays welcome guests and columnists with

disabilities. In 2018, this was the case for 24 episodes of the shows Touche

Pas à Mon Poste and Ouvert à Tous, and seven episodes for C’est Que de la Télé.

Making content accessible

To ensure the inclusion of people with disabilities, the group must also

provide accessible content. In France, Canal+Group’s channels offer their

subscribers audio description for the blind and visually impaired, and

subtitling for the deaf and hearing impaired. Since December8, 2017,

subtitles for the deaf and hard of hearing(SDH) have also been available on

the canal-vod.com website, the ﬁrst VOD service to systematically provide

SDH. In addition, CNews broadcasts a news program accompanied by sign

language interpretation from Monday to Friday each week.

Among the Vivendi Village entities, See Tickets has a special phone line

that allows customers with disabilities to book a seat that meets their

needs. Whenever possible, priority is given to reserving a seat accessible

without steps or stairs, close to the stage, or which allows the use of a sign

language interpreter.

Since September2018, Havas Paris, which has automated the subtitling of

its own publications and audiovisual productions on its social networks, has

consistently recommended to its clients that they make their TV commer-

cials accessible.

Lastly, BETC offers teletext captioning to all advertisers to make their

advertising accessible to people who are deaf or hearing impaired. The

agency has also initiated audiodescription of advertisements in France (in

coordination with Adstream, IMD and Medialab), which it now offers to all

of its advertisers in addition to subtitling.

Conveying messages of inclusion

As creative entities – content, music, entertainment, and information – the

group’s various companies are all poised to play a key role in diversity and

inclusion.

UMG launched a special partnership with HBCUs (Historically Black

Colleges and Universities) in Atlanta in preparation for a UMG-led summit

in 2019. In addition, UMG US partnered with members of faculty and

administration at Spelman College, Morehouse College, and Clark Atlanta

University (all HBCU members) andUMG partner record label, Disturbing

Tha Peace, to organize an event called The Belonging Table in October2018.

This series of round tables on black culture and community, and their impact

on the music and entertainment industry, drew more than 150 participants.

The Canal+ Group channels are also well aware of the essential role they play

in inclusivity at all levels of society. In accordance with their commitments to

the CSA, Canal+, CNews, C8 and CStar are working to ensure that their

broadcasts are a true reﬂection of French society. Endeavors have paid off, in

terms of representation of people’s differing origins on television in France, as

highlighted in the latest CSA diversity barometer – 2018 wave (a rating of 17%

in 2018 compared with 14% in2014).

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Havas Group has made the issue of representing diversity central to its

commitments. In France, BETC, signatory of a charter initiated by the CSA

and the French Union of Advertisers (UDA) against sexist stereotypes in

advertising, is taking part in the Free the Bid initiative through which it

undertakes to put forward the name of at least one female director when

putting several directors in competition for a client. Lastly, the agency is

working with the French Association of Advertising Agencies (AACC) to

develop an action plan with all memberagencies in favor of a balanced and

non-stereotyped representation of diversity in content.

The Havas Village in London has appointed a Diversity and Inclusion

Manager to train the various teams on how to offer greater diversity in

client meetings to bring an additional wealth of ideas and thoughts. The

Diversity and Inclusion Manager is also responsible for ensuring greater

diversity in content and providing guidelines and advice in combating

stereotypes in the agency’s productions.

These commitments provide the creativity and boldness needed to launch

campaigns that focus on issues of inclusion and non-discrimination.

In 2018, Havas Melbourne devised The Real You Matters, a campaign for

Australian media group SBS, which wishes to promote a more inclusive

work environment. The ﬁlm, which features three individuals who conceal

an essential part of their identity to their colleagues and managers for fear

of being discriminated against, aims to promote the importance and

beneﬁts of an inclusive business, in an increasingly multicultural Australia.

BETC’s campaign La Parole aux Sourds won a prize at Cannes, as did Evita,

The Equality Bill, a Havas Buenos Aires campaign made for DDL&CO, a

restaurant operator in Argentina. The ﬁlm, which uses excerpts of speeches

by the iconic Eva Peron, focuses on wage gaps between women and men in

the country.

4.4.2.2. Workforce diversity as a performance driver

Talent diversity is a necessity, and an opportunity to improve the group’s

performance. Vivendi has employees in 78 countries, so diversity is an

integral part of the group’s identity, and a key factor in anchoring its

businesses territorially.

To create an environment that resonates with their culture and values, all

the group’s companies are committed to promoting diversity within their

organization. They pursue an active policy of equal opportunity and equality

of treatment between people by:

3 training employees and managers on diversity issues;

3 designing recruitment processes from a diversity perspective;

3 implementing action plans, programs and/or collective bargaining

agreements related to gender equality;

3 adopting action plans or agreements on the employment of disabled

workers; and

3 taking measures to promote parental leave, including for men, and

to facilitate the work-life balance (in 2018, 35% of parental leave

was taken by men).

Vivendi is also a longstanding signatory of the Diversity Charter launched in

France in 2004, as is Canal+ Group.

Moreover, in accordance with the International Labour Organization (ILO)

fundamental conventions and Vivendi’s Compliance Program, which is in the

process of being redrafted, the group’s subsidiaries are committed to equal

opportunity in recruitment, mobility, promotion, training and compensation,

without discrimination on the basis of gender, religion, origin, age, sexual

orientation, private life or disability.

At the US and UK subsidiaries, employees have access to a whistleblowing

hotline, in accordance with applicable rules and regulations, for reporting

any instances of discrimination or harassment.

UMG, in partnership with the University of Southern California, continues

its work with the Annenberg Inclusion Initiative, the world’s leading think

tank on increasing diversity in film and television, whose mission now

extends to the music industry. It builds on initiatives already undertaken by

UMG, such as its commitment to eliminating all forms of discrimination,

expressed in its Equal Opportunity policy.

The Havas Village in Chicago has created Havas Faces, a resource group for

employees focused on diversity and inclusion. Arnold employees have

created Let’s Talk About IT, a group focused on facilitating and pursuing

conversations about all aspects of diversity and inclusion. They are now

exploring the possibility of partnering with the Marcus Graham project,

which aims to increase diversity in the advertising industry. Havas came out

in favor of pay equality at this year’s 3% Movement conference, and it is a

major goal for the United States as a whole in 2019. Havas New York has

joined forces and partnered with Fast Forward Women. New York has

employee-led groups such as Havas Proud, a group formed to celebrate and

connect New York Village LGBTQ employees.

In the United Kingdom, Havas Village has drawn up a Diversity Charter to

promote diversity in all its forms within its workforce. It works with charities

and other organizations specializing in recruitment of a diverse workforce in

entry-level positions, apprenticeships, internships and work-study programs.

Gender equality

Vivendi’s commitment to diversity lends special importance to equal career

opportunities for men and women.

49% of group employees are women

and

46% of managers are women

The consolidation of Havas has helped increase the representation of

women in the group.

All the group’s businesses share the commitment on this issue and have

implemented action plans and social progress measures going beyond

existing provisions. Their aims are to:

3 promote gender equality in recruitment, especially in certain sec-

tors, and to respect equality in terms of access to employment;

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3 ensure equal opportunities in career development;

3 guarantee equal pay between men and women performing the same

jobs at the same skills level and with the same level of accountability

and results;

3 guarantee equality in terms of professional development and pay

increases in the event of a career interruption for parental, mater-

nity or adoption leave; and

3 strive for a better balance between personal and professional life,

taking parental issues into account.

Most of the group’s French companies have accordingly signed agreements

on gender equality, including:

3 agreements or action plans on gender equality at work, pursuant to

the French law of March23, 2006 on the implementation of compre-

hensive measures (recruitment, promotion, compensation and

maternity leave) and metrics to monitor the mechanisms put in place;

3 parenting agreements or charters advocating equal treatment of

fathers and mothers; and

3 agreements on working hours to facilitate work-life balance.

In the United States, UMG offers all its employees, regardless of their

gender, four weeks of parental leave on full pay during the child’s ﬁrst year.

More generally, Vivendi aims for gender parity in succession plans and

promotions. Agreements include measures to identify and correct pay gaps.

In the United States, Havas, as a founding memberof 3% Pledge for Pay

Equity, is committed to an active policy on equal pay for women and men.

Its 12-month action plan starts with a diagnosis before making the

necessary adjustments and implementing follow-up.

For example, Canal+ Group has eliminated periods of maternity leave from

the annual assessment, identiﬁed pay gaps for equivalent posts and taken

remedial action.

To develop gender parity in positions of responsibility, a factor in successful

group performance, the Supervisory Board has approved a top-level

mentoring and networking program. This is how Vivendi’s Andiamo

network, set up in March2012 and today comprising around 50 women

from all of the group’s French entities, aims to support women in their

professional development and help them break through the glass ceiling.

Similarly, to support and facilitate women’s career development in the

music industry, the Universal Music Women’s Network provides an outlet

for women to share experience and expertise, and unlock their potential.

For instance, UMG US has rolled out a new program known as umSHE

Leads, in a fresh example of commitment to equal opportunities for women.

In 2018, Havas launched the Femmes Forward program to promote women

in management positions. In its ﬁrst year, around 40 women took part in the

program, with training modules based on skills and experience, inspiration

from internal and external opinion leaders, group coaching, networking and

mentoring by experienced Havas leaders. Other initiatives such as Fast

Forward Woman and Havas Health and Her have also been launched in the

Havas Group. They reﬂect its desire to promote leadership among women.

Other programs promoting change in behavior and combating stereotypes

have been introduced in the group’s various entities including:

3 the development of female leadership and individualized support;

3 the participation of role models to share their experiences and

enable women employees to draw inspiration from female success

stories in predominantly male positions; and

3 regular meetings with senior executives to raise awareness of the

importance of gender diversity.

Six women (out of 12 members as of December31, 2018) sit on the Vivendi

Supervisory Board, representing 55% of the Board. In accordance with

applicable law (Law No.2011-103 of January27, 2011), the calculation

does not include the employee representative.

Women now represent 31% of the members of the Vivendi Executive

Committee.

The rate of women leaders is also increasing in the various businesses.

Two women have been members of the UMG Executive Committee since

2015, and eight have been appointed to Executive Vice President or Senior

Vice President positions; in 2016, UMG France appointed a woman to head

France’s leading record label.

The proportion of women in the Canal+ Group Executive Committee has

increased to 29%.

Women now represent 33% of Operational and Executive Committees at

Havas.

A woman is soon to be appointed to the Gameloft Executive Committee.

Employment and integration of workers with disabilities

Recognition of the status of “disabled worker” is based on the deﬁnition

provided in local law or, failing that, by Convention 159 of the ILO: “any

individual whose prospects of securing, retaining and advancing in suitable

employment are substantially reduced as a result of a duly recognized

physical, sensory, intellectual or mental impairment”.

Integrating people with disabilities and combating discrimination against

them are principles respected within the group, and the various entities

have made a commitment by implementing a responsible, consistent and

sustainable policy for the employment of people with disabilities.

Their commitment comes in different forms involving recruitment, job

retention, training, awareness and the implementation of various events

related to disability, resulting in a comprehensive approach taking into

account the speciﬁc nature of the business and local law.

For instance, the various entities regularly run disability awareness-raising

campaigns aimed at their employees and their managers in order to change

their perspective on disabilities.

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In 2018, Vivendi made a commitment to LADAPT, an association for the

social and professional integration of people with disabilities, as part of the

organization of the 22

European Disability Employment Week from

November19

to 25

. In addition to making a ﬁnancial contribution, Vivendi

was a memberof the task force for the organization of this disability

awareness week, and took part in the opening morning at Paris City Hall on

November19

Vivendi also organized a roundtable entitled “Another Perspective on

Disability” for employees at head office and its subsidiaries. Over 80

employees attended. The various guests at the round table discussed

disabilities in business.

Canal+ Group has had for several years a long-term policy of hiring

employees with disabilities, known as “Mission Handi+”. By implementing

a series of collective agreements on the hiring of workers with disabilities

and continuing an awareness program on this issue, employees are

reminded of the group’s commitment to hire, integrate and retain disabled

workers in jobs, as well as its participation in training disabled youth

through internships and work-study programs.

The current three-year collective agreement on the employment of workers

with disabilities was signed in 2017, strengthening and deepening the

commitments made in previous years. It includes:

3 a recruitment target of 20 workers with a disability between 2017

and 2019, and a “discovery” policy for attracting young graduates

with a disability through internships and work-study programs;

3 numerous communication initiatives carried out during National

Disabled Employment Week and the facilitation of a network of

disability liaison ofﬁcers among employees; and

3 participation in recruitment forums and maintenance of specific

partnerships such as Handicafé, Forum Adapt, Tremplin and the GESAT

fair (national network of workers with disabilities), and support and

retention of employees through various forms of assistance.

Havas also aims to welcome staff with disabilities and is seeking to make

this a collective commitment across the group by sharing its goal with as

many employees as possible.

To allow everyone to contribute in their own way, Havas offers several

solutions including partnerships with dedicated recruitment players (e.g.,

Adapt, Arpejeh and Tremplin), the development of services in the protected

and adapted sector, and the provision of tutors, liaison officers or

spokespeople to strengthen the link between people with disabilities and

the world of business. The liaison ofﬁcers have drawn up a charter stating

“that they are part of a community of sensitive people committed to the

issue of disability in the Havas Group”.

A committee made up of the various stakeholders within the Havas Group

meets quarterly. The complementary proﬁles of its members help facilitate

practical progress on disability-related issues. They include representatives

of HR, staff, paramedics, managers of employees with disabilities and

liaison ofﬁcers, and are all advocates for this important issue.

The employment rate of people with disabilities is constantly increasing at

Havas.

Digitick works closely with the association the ARPEJEH (a French

association working to help young and disabled students achieve their

goals), and is committed to attracting young trainees with disabilities.

4.4.2.3. Partnerships for inclusivity

andequalopportunities

Vivendi develops strong partnerships in the countries where it operates,

allowing access to its content and business by people who are the most

removed from it. Its constructive role in non-discrimination and the ﬁght

against inequality stems froma ﬁrm belief that a large group can perform

well while bringing meaning to its employees, partners, customers and,

more broadly, the society in which it operates.

Vivendi Create Joy, the group’s solidarity program

The Vivendi Create Joy solidarity program celebrated its tenth anniversary in

2018. Create Joy works to develop individual and collective talents through

projects in music, ﬁlm, content creation, video games, live performance (e.g.,

comedy and stand up) and journalism. It covers two types of projects: social

projects that reveal a personal talent, make people aware of their own value

and develop their self-esteem; and vocational training projects that allow

young adults lacking professional networks to ﬂourish in a profession and a

passion that the group shares, in Vivendi’s ﬁelds of activity.

Vivendi employees contribute to the success of these projects as Create Joy

Ambassadors, above all by volunteering skills. In 2018, the tenth anniver-

sary of Vivendi Create Joy was celebrated at the Théâtre de l’Œuvre. The

evening aimed to rekindle the program’s ambition and showcase the

associations taking part and the testimonies of the employees volunteering

with them.

Since 2008, the group’s solidarity program, rolled out in France, the United

Kingdom and Africa, has given support to over 70 associations involved in

initiation and the professional training of underprivileged, marginalized or

sick young people.

Empowering young people through Vivendi’s business lines

Many of the group’s partnerships are underpinned by a desire to help young

people ﬂourish by offering them entertainment and the means to develop

skills relating to Vivendi’s businesses, in line with the commitment

embodied by Create Joy. The appeal is twofold for young people: to

exercise their creativity and explore exciting worlds, but also to discover

businesses and jobs related to their passions.

Vivendi became a partner of the Innov’Avenir program to support the

transmission of digital culture to all young people. Promoted by the

Entreprises pour la Cité network, it aims to give young people in under-

privileged areas the keys to understanding the 21

century, to broaden their

professional horizons and to make them actors in digital society. In 2018,

Vivendi and Gameloft employees took part in Challenge Innov’Avenir, a

project aimed at giving young people a voice in their neighborhoods by

developing an innovative digital solution serving the public interest.

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UMG contributes to a series of initiatives designed to encourage the

development of young audiences through music, providing lasting support

for its various partner organizations.

In the United Kingdom, UMG has backed the OnTrack program run by

London’s The Roundhouse venue for more than ten years. OnTrack offers

music-related vocational training to marginalized kids (“not in education,

employment or training” or NEET). The results from 2018 are the best yet,

with 70% of the participants having progressed into education, employment

or training within three months, a figure that rises to 81% within six

months. UMG’s support of OnTrack won the Gold Corporate Engagement

Award for best Arts and Culture Programme at the Corporate Engagement

Awards 2018.

Aside from sponsoring the Universal Music UK Sound Foundation, which

promotes music education, the group also partners with East London Arts &

Music (ELAM), a free school for 16- to 19-year-olds. The school was rated

“outstanding” by Ofsted, the UK schools’ inspectorate. ELAM’s mission is to

increase access routes into the creative industries for its students. In 2018,

UMG welcomed 38 trainees from the school for two weeks of intensive

hands-on experience across all divisions of the company, including Abbey

Road and Universal Music Publishing. Employee participation in the

initiative included ten staff members acting as mentors to individual

trainees throughout the year, while closer links were forged between the

school and the A&R teams.

To provide a stepping stone to ELAM’s young artists, UMG furthered its

relationship with Urban Development, a charity supporting the growth of

urban music that is also sponsored by the Vivendi Create Joy fund.

Similarly, in France, UMG employees and the Create Joy fund put together

a writing and musical creation camp for young people from underprivileged

neighborhoods in Marseille. Participants produced a demo in studio with

advice from rapper YL. One of the participants later took a co-op position

with UMG digital teams.

For the fourth year in a row, UMG Australia partnered with the charity

Musicians Making a Difference (MMAD), which helps young people

through hard times. Each year, UMG Australia employees mentored a group

of ten young people from MMAD to help them build a high-impact campaign

that celebrates the power of music, featuring Australian and international

stars such as Troye Sivan, Alessia Cara and Gary Lightbody. The kids and

their mentors worked together to create tracks and an ofﬁcial video.

Finally, in India, UMG supports the Dharavi Project, a dance school set up in

South Asia’s largest slum. The school has 75 students, who learn rapping,

beat-boxing and street art, and also gives them the opportunity to attend

master classes given by experienced UMG staff members.

Canal+ Group also carries out initiatives enabling young people to learn

about the audiovisual professions. In Guadeloupe, the group puts young

trainees on the sets of local co-productions. In France, it organizes the

Grand Match Égalité des Chances, a journalism competition sponsored and

hosted by Kevin Razy in 2018, and reserved for young people between 18

and 25 supported by a panel of non-proﬁt organizations that promote equal

opportunity. The best stories were selected, followed by an audition, and

the winner beneﬁted from work experience with the group’s editorial teams.

In 2018, the initiatives undertaken by the group for underprivileged young

people were showcased on National Youth Day, with a debate and a

screening of Maïmouna Doucouré’s documentary C’est Pas Pour Nous, and

a talk by rapper Soﬁane, organized for the group employees and some high

school classes.

Since 2017, Havas Paris has run Creative Summer in partnership with

Secours Populaire. The idea is to work with a dozen young people aged

between 18 and 29, helping open them up to all forms of creativity and

inspiring them to complete a personal creative project. Volunteer employees

acting as mentors, in connection with the whole agency, introduce them to

the various formats of creation and communication, and help them translate

their ideas into reality. The agency then exhibits the resulting work inside its

ofﬁces. Similarly, Havas UK has joined forces with NGO Creative Mentor

Network to offer voluntary mentoring for students from diverse backgrounds

interested in careers in advertising.

To further its actions in diversity, inclusion and equal opportunities, and

knowing that this commitment is a source of unity for all the group’s

activities and all teams, Vivendi created an international group Diversity

Committee at the end of 2018.

4.4.3. OFFERING HIGH-QUALITY

AND MEANINGFUL CONTENT

Media, content and communication companies play a prominent role in

society because of the impact and inﬂuence of their output. This means that

Vivendi has a special responsibility for the quality of its content and the

impact of the representations it conveys. Moreover, in view of the impact of

its creations, the group aims to give them meaning through the stories they

tell and the messages they express, so that they reﬂect and accompany

changes in society.

4.4.3.1. Providing answers to society’s questions

Inspiring emotion and stimulating critical thinking as a means of surprising

and challenging the audiences, offering openness and shedding light on

current events, and putting its creative capacities to work for great causes

are some ways in which the group’s businesses can help shed fresh light on

the world through media content, advertising campaigns and partnerships.

Taking part in meaningful campaigns

Havas agencies are constantly changing and rethinking their positioning in

relation to advertisers in order to track – or even anticipate – major upheavals

in society.

Havas Group has defined six social responsibility commitments, one of

which is to be a leader in the creation and promotion of responsible

communications. This ambition is central to the group’s purpose, dubbed

Making Brands Meaningful. By helping its clients meet the expectations of

citizens and by accompanying change in all of their brands’ dimensions,

Havas contributes to building a new model for society and helps forge new

forms of engagement through communication.

In Common Ground, an initiative bringing together Havas Group and ﬁve

major global communication groups to promote the UN’s Sustainable

Development Goals, Havas is specifically addressing Goal 13, the fight

against climate change. To this end, the group is working with the world’s

leading brands to create campaigns dedicated to the climate (see

Section4.4.5.4 of this chapter).

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The Palau Pledge campaign is a perfect example of the creativity behind

this commitment. Created by the Host/Havas agency in Sydney, it raises

awareness among tourists about the dangers threatening the Palau

archipelago and the need to conserve its ecosystem by stamping an

ecological commitment charter on their passport and asking them to sign it

before the country issues their visa. Winner of three Grands Prix at the 2018

edition of the Cannes Lions International Festival of Creativity, including one

created in partnership with the United Nations in the Sustainable Develop-

ment Goals category, the campaign also received the Champion for

Humanity award at the UN’s Global Goals Week.

In London, Havas London and UMG subsidiary Mercury KX/Decca Publishing

have created a campaign for the Sharp’s Brewery brand, based in Northern

Cornwall, which wanted to make a commitment to the ﬁght against ocean

pollution. The result is an EP of four tracks composed by pianist Sebastian

Plano and performed by Keynvor, a ﬁctional recording artist named after the

Anglo-Cornish name for the Atlantic Ocean. The proﬁts generated by the

purchase or streaming of the ﬁrst single, Preservation, will be donated in

full to NGO Surfers Against Sewage, which works for the preservation of

the coast. Havas and Mercury KX/Decca Publishing were honored at the

2018 Music Week Sync Awards, in the Best Social Media/Online Partner-

ship category.

Another noteworthy campaign created on social issues in 2018 was

In Someone Else’s Shoes, designed for Santander by Arnold in Boston, in

partnership with NGO Heading Home. It features Jen, a woman who works

full-time and yet lives in her car, like 25% of the population. In an exercise

in virtual reality, the agency offered passers-by the chance to literally put

themselves “in her shoes”. Havas Germany’s Repicturing the Homeless

campaign, created for Getty Images in partnership with Fiftyﬁfty magazine,

also challenged stereotypes around homelessness, depicting homeless

people in a series of stock images illustrating some of the most searched-

for topics in Getty’s photo library (e.g., businesspeople, shopkeepers and

people traveling).

Pro bono campaigns are another large part of the shared approach taken by

the Havas agencies, which put their resources and creative energy at work

for free to support associations and general interest causes, making

advertising an accelerator of virtuous behavior.

143 pro bono campaigns carried out

by Havas Group agencies in 2018

Among the many pro bono campaigns carried out by the Havas Group

agencies in 2018, BETC’s Game Chaingers campaign for UNICEF was a mini

revolution in fundraising. Running from February2 to March 31, 2018, it was

aimed mainly at the 711million strong global gamer community and

e-sports fans, allowing them to use their graphics cards to generate

Ethereum, a cryptocurrency, to raise money for UNICEF.

For Imagyn, Havas Paris designed an awareness campaign to educate

women about gynecological cancers and encourage them to have a

gynecological exam once a year. For this campaign, Havas Paris provided

advice, content creation, press relations and negociating free ad space.

Released in May2018, the campaign generated more than 100 press

articlesand was broadcast on TV 450 times.

In South America, Havas Colombia partnered with the National University

of Colombia, which owns the country’s largest natural history collection, to

stage an exhibition-performance condemning the massive deforestation

seen in that country. Artists created skeletons of animals living in the

Colombian forest, which risk extinction because of deforestation.

Deforested Bones, which used art to raise environmental awareness,

involved all Havas teams based in Colombia.

Taking a fresh look at social issues

Planète+, Planète+ Crime et Investigation and Planète+ Aventure et

Expérience play a major role in Canal+ Group’s aims to offer content that

fulfils its social commitments. In 2018, Planète+ screened original

productions including L’Odyssée pour le Futur (see Section4.4.5.4 of this

chapter), Femmes du Rwanda (see Section4.4.2.1 of this chapter), and

SiLoin, Si Proches. Si Loin, Si Proches, a documentary directed by Alex

Badin and Delphine Cohen, features a Maasai chief and the mayor of a

small town in the north of France. Their dialog shows something of what we

all share as human beings – the tribulations of the two men not being so

very different – but also gives viewers an understanding of their respective

cultures.

On December9, 2018, Planète+ Crime et Investigation and Planète+ aired a

special evening featuring two documentaries directed by Marjolaine

Grappe, a director supported by the group since the start of her career. The

program included the premiere of La Couleur de la Justice, an original

Planète+ Crime et Investigation production, which looks at the place of

minorities in the American judicial and police system, followed by Corée du

Nord: les Hommes du Dictateur, for which the director won the 2018 Prix

Albert Londres in the audiovisual category.

Canal+’s Créations Documentaires also help raise public awareness of

contemporary issues, however diverse they may be.

In January2018, the channel aired Exodus: The Journey Continues, the

second part of a documentary that was remarkable in many ways. In its ﬁrst

part, Exodus, which won the International Emmy Award for Best

Documentary 2017, migrants themselves filmed their journey through

26 countries to their ﬁnal destination in Europe. Two years later, they tell

how– and indeed if – they have managed to start rebuilding their lives.

Just Kids, a documentary by Mathias Pardo, tells the story of three young

Africans who arrived on their own in France and the initiative of Maud

Angliviel, a young law student, who created a football team for them. FC

Melting Passes is a sporting and human story that reminds us that these

young people left to look after themselves are still “just kids”.

Canal+ also takes a fresh and offbeat look at the news, with a healthy dose

of impertinence, in some of the productions created under the Création

Décalée label. The documentary series Kings, Moi si j’étais un Homme, for

instance, shows female actors, models, singers and comedians who

disguise themselves as men and film themselves in streets and in bars.

Bygoing out and connecting with others, they reconnect above all with their

femininity, their virility and the clichés associated with them. Directed by

Katia Lewkowicz and featuring actress Mika Tard as a character in each

episode, Kings, Moi si j’étais un Homme takes an offbeat look at the social

construction of gender.

With the same goal of addressing contemporary issues, and with a hint of

quirkiness that gets you thinking, comedian Kevin Razy, ﬁrst discovered by the

Jamel Comedy Club, has created RDV avec Kevin, where he and a guest take

an original look at the world as socially aware citizens. Another example comes

from actor and author Marion Seclin who revisits the news from a feminist

angle in her weekly short-form series, Cette Semaine Madame.

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Canal+ International also provides audiences with content on general

interest issues in programs developed specifically for Africa. Enquête

d’Afrique deciphers social issues. In 2018, the monthly magazine raised

public awareness on major issues including ecological problems (the report

La Guerre des Sacs Plastiques) and the absence of citizenship for many

children in Africa (the report Sans État Civil).

Lastly, since 2018, the CNews 24/7 news channel has been producing, in

partnership with Vivendi’s Corporate Social Responsibility and Compliance

department, a monthly program entitled Envie d’Agir. Every month, Le

Carrefour de l’Info welcomes a socially committed citizen working in their

own way to make a difference, especially in terms of inclusion.

Contributing to the visibility of general interest causes

In 2018, Vivendi and its subsidiaries partnered with the international

organization Global Citizen, which works to combat extreme poverty, to

support and raise awareness of one of its major events, the Global Citizen

Festival: Mandela 100, held in Johannesburg on December2, 2018. Canal+

Africa broadcast the festival to itsmillions of viewers in 30 African

countries and CanalOlympia theaters offered free screenings. International

stars including Beyoncé, Jay-Z and Eddie Vedder headlined the festival,

held to mark the centenary of Nelson Mandela’s birth and to raise funds and

promote awareness about the fight against extreme poverty. UMG’s

Executive Vice President is a memberof the Board of Directors of Global

Citizen. She also chairs the Global Citizen Rewards program, an initiative in

which major artists donate concert tickets that are earned when users take

speciﬁed actions to end global poverty.

Vivendi was also a partner in the Paddington World Run for UNICEF

solidarity race, a free, connected race that mobilized more than 10,000

participants over two days. Since 2017, Paddington

has been a children’s

rights messenger for UNICEF: the partnership sees the little bear pursuing

the organization’s goal of promoting children’s education and health, and

helping to keep them safe, happy and fulﬁlled.

For the second year running, Gameloft partnered with War Child UK, an

NGO that helps children living in conflict zones. The group has made

dedicated bundles with non-aggressive content available in two of its

games, War Planet Online and March of Empires, donating all their proﬁts

to the organization. Gameloft also joined four other mobile game publishers

to produce Help: The Game, a bouquet of ﬁve games (each made specially

by one of the partners), whose proceeds go to funding projects run by War

Child UK and Children in Conﬂict to support child victims of war.

4.4.3.2. Supporting mechanisms to ensure

responsiblecontent

The inﬂuence of its content means that Vivendi has a special responsibility

to its stakeholders and audiences, especially the younger ones, to ensure

that the content produced and distributed by the group is not harmful to

them.

The European Alliance to Better Protect Minors Online

Vivendi operates in industries where stringent laws and regulations are in

place to protect young people, and the group ensures strict compliance with

these laws and regulations in all of the countries where it operates.

Since 2016, Vivendi has been a memberof the Alliance to Better Protect

Minors Online, a European Commission working group promoting links

between major media and digital players (e.g., operators, publishers,

platform operators and search engines), and child safety NGOs. In 2018,

two years since they came together, the signatories reviewed the measures

taken to improve the protection of minors in the use of audiovisual and

digital tools. Within the Vivendi group, practical initiatives have been

conducted by UMG, Canal+ (in particular in the Piwi+ and Télétoon+ youth

channels), Dailymotion and Gameloft. Described in the sections below, they

have been presented to the Alliance.

Policies in place within the group

Canal+ Group enjoys a prominent place in the media landscape. For this

reason, it has a responsibility to its audiences.

The corporate governance structure of Canal+ Group’s television service

providers ensures the independence of editorial functions through depart-

ments dedicated to the development of programs for each provider (C8,

CStar, CNews, Canal+ and dedicated departments for the group’s themed

channels). Internationally, where the group does not offer news coverage,

the units responsible for purchasing and producing dramas and program-

ming are assigned distinct responsibilities.

An Ethics Charter was created in 2008 to ensure compliance with the

principles of ethical information use.

Pursuant to French Law No.2016-1524 of November14, 2016 aimed at

strengthening media freedom, independence and pluralism (the Bloche

Law), Canal+ Group has adopted the following measures to address the

law’s two key focuses:

3 an Ethics Committee was set up at group level to ensure the honesty,

independence and pluralism of information and programs. Appointed

by the Canal+ Group Supervisory Board in September2017, the

Committee’s members are independent according to the independence

criteria defined by the legislation. The CSA (the French broadcast

media regulator) was notiﬁed of the Committee’s composition. Initially

made up of four members, the Committee was expanded to include a

ﬁfth member in November2018. One matter was referred to it in 2018.

Its annual report for the year was posted on the group’s website in

February2019; and

3 a professional ethics charter, jointly drafted and signed by manage-

ment and journalists’ representatives, sets out the ethical rules

necessary for the production of independent, reliable, credible and

thorough news coverage. Signed by management and the president

of the CNews association of editors in December2017, it was

adopted for the group’s other channels in 2018.

In France, two people in the group’s Editorial legal department keep a tally

of airtime given to politicians within programs and provide alerts to units

producing the relevant programs, allowing them to make any adjustments

required to achieve a fair balance in terms of political pluralism. In regular

meetings with the CSA, the Regulatory Affairs department ensures that the

group’s various channels meet their obligations, particularly on responsible

content, which are listed in the agreements entered into between the CSA

and the relevant channels.

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Protecting children and teenagers is also a principle enshrined in Canal+

Group’s Ethics Charter. A viewing committee within Canal+, composed of

four people for ﬁlms and four other people for other programming, ensures

the protection of young people in the broadcasting of programs on the

Canal+ television service, reporting to a programming ofﬁcer.

In 2018, Canal+ Group continued to roll out policies aimed at providing

parents with parental control tools and applying age range guidelines on its

content wherever they broadcast. Also in 2018, the group launched a new

online platform for children, myCanal Kids: free of advertising, the new

interface allows parents not only to limit programs to an age range and to

prepare playlists, but also to set a timer with a maximum viewing time.

The primary expectation of Havas stakeholders is that Havas supports

responsible communication that takes into account the impact of the

representations conveyed and ensures the truthfulness, clarity and fairness

of the information stated or implied in its messages.

Two documents govern the group’s policy: the Ethics Charter and the

Principles of Responsible Communication. The Ethics Charter imposes

compliance with the rules of conduct governing the sector, issued by

regulatory authorities, whether local, national or supranational, and

stresses the duty of excellence in the transparency and relevance of the

information provided. The Principles of Responsible Communication aim to

empower employees and give them a reference tool to guide them in

determining appropriate courses of action when creating advertising

campaigns.

The agencies of Havas Group apply these rules by integrating specific

aspects related to their activity, as well as particular features of local law.

They have internal control procedures to ensure that the advertising

campaigns produced comply with rules of good conduct, and that they are

not liable to be modiﬁed or, in extreme cases, prohibited by the regulatory

authorities. Most often, these procedures call on input from the legal teams

acting in connection with the sales representatives. The group also

cooperates closely with the various national professional self-regulatory

bodies, such as the Advertising Standards Authority (ASA) in the United

Kingdom or the French advertising self-regulatory organization (ARPP),

whose powers in some cases include mandatory control over advertising

messages upstream of their distribution. Agencies can request advice and

opinions from these bodies to ensure that ethical rules are taken into

account from the design stage. Havas Paris, for instance, proactively seeks

advice from the ARPP on publications in the press, which, unlike productions

intended for TV, are not subject to mandatory control.

At the same time, various initiatives are implemented within the agencies

to raise awareness and train teams on ethical rules. These initiatives help

employees to provide services that are aligned as closely as possible with

the expectations of the profession and consumers, and to anticipate new

challenges in terms of responsible communication. They include face-to-

face meetings, the provision of online resources and the opportunity to take

part in training provided by the regulatory authorities.

The ethical commitment of the Havas Media division is reflected in its

approach, which is aimed at ensuring that advertisements are broadcast in

an appropriate environment that does not present risks for the advertiser

(known as “brand safety”). Havas Media blacklists certain sites to ﬁght fraud

and to guarantee the integrity of its advertisers’ brands using standard

market solutions (in particular IAS, MOAT, Adledge and DoubleVerify). New

solutions are also implemented to ﬁne-tune campaign inventories. As such,

Meaningful Digital Matrix, a service made available to advertisers by the

Havas Group’s agencies, is used to evaluate the relevance of inventories. It

can also make recommendations for media plans that guarantee a brand’s

reputational integrity.

Ensuring responsible content for gamers, parents and partners is a key issue

for Gameloft. That is why the video game publisher has adopted detailed

rules to control each game from the creation and development phase and

throughout its lifetime, especially when updates are made.

The group’s Legal department, in accordance with the guidelines of digital

stores (e.g., Apple Store and Google Play) and local regulations (the most

demanding standard being applied), has established guidelines setting out

the rules applicable to games content, as well as those governing

advertising content and in-game purchases. These rules – some

comprehensive, others specific to each game – are rounded out by

Gameloft’s internal copyright protection policy.

Compliance with these guidelines is overseen by the Legal department

itself, which is involved at all stages, with a lawyer assigned to each game.

Internal teams of testers are dedicated to Quality Assurance and are tasked

with detecting all cases of non-compliance. On advertising content more

specifically, Gameloft has established whitelisting and blacklisting

procedures that take into account the rules given by licensors, whose

application is also subject to controls by Quality Assurance teams and

manual validation, whether direct deals or programmatic advertising.

Demonstrating the effectiveness of these systems, Gameloft is one of the

ﬁrst companies in the sector to receive Gold Standard certiﬁcation from the

Internet Advertising Bureau (IAB), which has three objectives: reduce

advertising fraud, improve the digital advertising experience and increase

brand security. Lastly, Gameloft ensures that its available licenses all ﬁnd

the audiences for which they were developed. Within all digital stores, the

games’ visuals and descriptions are presented with the greatest

transparency and visibly classiﬁed using an age rating system. The games

also have a system that prompts the player to validate their age to access

the content. On games not designed for audiences of any age, access is

blocked for users under 13.

Since its relaunch in 2017, Dailymotion has aimed to offer the highest

standards of any service in the market to protect its users, rights holders

and the brands of its advertisers. Several initiatives and commitments have

been made to protect Internet users and enhance the rights of third parties,

in the consistent aim of creating a safer Internet for users and better value

sharing between creators and content-sharing platforms.

To protect Internet users in general, and in particular, its own users,

Dailymotion has a team dedicated to support and moderation working 24/7.

It handles all reports received. On the issue of regulating illegal online

content, Dailymotion is committed to making its best efforts to remove all

terrorist and child pornography content within an hour of a report being

received. Other clearly illegal content is aimed to be removed in less than

two hours. To achieve these results and in accordance with regulations,

Dailymotion provides Internet users with an easily accessible tool for

reporting illegal content and works closely with France’s Central Ofﬁce for

Combating Information and Communication Technology Crime (OCLCTIC)

and its Pharos platform dedicated to the ﬁght against cybercrime.

In a continuous improvement approach, Dailymotion has progressively

strengthened its reporting system by adding new categories in line with

developments in its interface in 2017 and 2018. It has incorporated two new

occurrences, one to report any hate content (racial, anti-Semitism, anti-

LGBT+) and the second to signal fake news with a biased treatment of

information. Dailymotion is the first European video hosting platform to

have introduced a tool for reporting fake news.

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To address the growing concern of Internet users, in 2018, Dailymotion also

adhered to the European Code of Conduct on countering illegal online hate

speech for digital businesses. Its aim is to strengthen the implementation of

best practices in the ﬁght against hate speech on the Internet. Dailymotion

also remains very committed to protecting minors and young Internet users.

To this end, it has signed the European Safer Social Networking Principles

associated with the Safer Internet program and has rolled out a parental

ﬁlter, which is a default setting on its service.

At the same time, Dailymotion has been committed since its creation to the

protection and fair remuneration of authors and creators. In addition to the

content reporting procedure, with the terms and removal times described

above, Dailymotion offers its partners a content protection solution that

uses two technologies developed by INA and Audible Magic in tandem. The

solution is based on the use of “ﬁngerprints” that can block the fraudulent

uploading of any video or audio content protected upstream by the rights

holder. Dailymotion also offers partners wanting to manage their rights

closely an in-house solution that allows them to monetize content posted

without their consent.

UMG has measures to provide advance, cautionary information regarding

its content. The group voluntarily participates in the Parental Advisory Label

Program, which encourages the use of “Parental Advisory – Explicit

Content” stickers on releases whose language may be inappropriate for

younger audiences. UMG includes this information in music ﬁle metadata to

ensure that the label is uniformly displayed across the entire distribution

chain, including digital channels.

Various measures have been instituted at UMG that represent commitments

to responsible content. The ﬁrst measure is the Corporate Lyrics Review

Committee. If UMG label executives or the artist team have determined that

a work in question merits the application of the Parental Advisory Label, a

different set of reviewers at the corporate level makes another assessment

of the material in question. This corporate review may lead to another

dialogue with the artist – and at times the artist may decide to make certain

additional modiﬁcations.

Finally, wherever UMG operates, the company works with local industry

associations and regulators. In Japan, UMG is a memberof the Music

Production Ethics Committee of the Recording Industry Association of Japan

and applies both the committee’s standards and its own internal guidelines.

In the United Kingdom, UMG applies an age-rating system in coordination

with the British Board of Film Classiﬁcation, to which all videos intended for

online distribution that may also include inappropriate content are

submitted. In 2018, the 43 submitted videos were returned with a 12 or 15

rating and none were rated 18.

Within Vivendi Village, See Tickets informs its customers about the age

limit for concerts offered on its site. A clear and express notice about the

age required to attend an event appears at the time of the online payment.

4.4.4. MAKING PEOPLE THE COMPANY’S DRIVING FORCE

Vivendi is well aware that the group’s success is a direct outcome of the

engagement of the people who work for it and, as such, is committed to

career development and working conditions that protect their quality of life

in the long term. The human resources (HR) function has a decisive role to

play in the company’s development, organization and activities, matching

employee expectations with opportunities to develop and thrive within the

constantly changing environment of Vivendi’s different businesses.

Long-term success is dependent on the group’s ability to attract, support

and promote talent. This means the group must be able to offer all its

employees an environment conducive to their career expectations,

encouraging each business and each subsidiary to develop and implement

its own initiatives. The different business units strive to offer experiences,

career paths and development opportunities that are consistent with their

teams’ aspirations, fostering collaboration, agility and cross -functional

efﬁciency to allow creativity and originality to ﬂourish.

Furthermore, in today’s environment of digital transformation, more and

more companies are in need of technical experts, engineers, developers,

data scientists and web designers. Faced with this shift, the group’s

business units actively seek to make their projects more attractive to ensure

that their corporate culture and management practices satisfy employee

expectations.

With this in mind, the HR teams work with managers to make sure that

employees are listened to, particularly through surveys, feedback interviews

and other opportunities for discussion, whether structured or informal. They

also aim to give employees the best possible career development

opportunities, implementing dedicated programs where each individual can

build their own career plan by putting their skills and achievements to best

use and identifying their potential and what motivates them the most.

4.4.4.1. Attracting talent

All the group’s businesses strive constantly to develop their talent base and

to run a diversiﬁed recruitment policy closely adjusted to the needs of their

various activities and speciﬁc functional typologies.

The HR teams at Vivendi and its subsidiaries are tasked with identifying,

attracting, developing and retaining talent.

They form partnerships with the leading schools and universities in each

ﬁeld for the proﬁles or technical skills needed (e.g., engineers, developers

and technicians, digital specialists and data analysts) and foster dialog by

attending recruitment forums, holding classes given by managers or talks

from company employees, taking part in challenges for students and hiring

interns or candidates for work-study programs.

Several of the group’s entities have identiﬁed work-study programs as a

valuable HR development strategy, with 701 work-study contracts running

across the group in 2018.

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For example, Canal+ Group runs biannual Canal Talent Days events to offer

internships and work-study contracts. These events are announced on

social networks, in schools and on the company’s HR website. Applicants

are asked to submit a presentation video and successful applicants are then

invited to attend a series of induction sessions: presentation of the group,

case studies, speed meetings with managers and discussions.

Advertising agency BETC has established a masterclass program speciﬁcally

for interns, developed and taught by experts in the agency. The program

gives interns a more insightful understanding of the profession and led

BETC to being awarded the “Happy Trainees” label for the fourth year in a

row, a distinction that recognizes companies that pay careful attention to

how they host, support and manage interns.

In the United Kingdom, Havas has launched its HKX platform for internship

opportunities likely to lead to full-time jobs, speciﬁcally aimed at young

people from a diverse range of backgrounds.

Another example is Dailymotion, which has partnered with a digital

development education center to help people in difficulty find their way

back into the world of work.

A numberof Vivendi’s business units have taken measures to improve their

employer brand image by increasing their presence on professional social

networks as well as platforms like Welcome to the Jungle (Dailymotion,

Gameloft and Havas) to connect with talented people in a more direct,

innovative way due, in particular, to a video presenting the company and the

jobs on offer.

A Canal+ Group (France) and Canal+ International HR development com-

mittee meets twice a month to encourage a cross- functional approach and

to promote mobility.

Havas France’s HR team has set up a cross-functional recruitment division

that covers the Havas Group’s various agencies and positions itself as an

in-house headhunter, handling 60% of new hires directly.

Gameloft has rolled out a recruitment platform used by all its studios

worldwide and holds meetings with schools specializing in video games.

Careful management of the hiring experience is key to maintaining the

company’s reputation and attractiveness, as well as ensuring effective

recruitments. With this in mind, the business units solicit feedback on the

entire recruitment process, employee onboarding and their working life in

the company.

At Gameloft France, for example, a member of the HR team is responsible

for the employee experience and, in particular, has set up detailed exit

interviews to give speciﬁc feedback to managers.

In addition, all the business units develop and roll out special onboarding

programs to give new talent a better understanding of the group, its

businesses and corporate culture when they are hired or start in new roles.

They may also receive mentoring to learn the new skills or behavior

necessary for their job description.

Havas France runs an onboarding day centered around strategic talks from

senior managers at Havas Village, a game presenting the various agencies

and business cases to demonstrate how the different agencies complement

each other in a business sense. The day usually ends in a concert, which

boosts Havas’ appeal as an employer and contributes to the “Village”

atmosphere.

In the United Kingdom, Havas organizes three different types of onboarding

sessions as part of its integration process for all employees during their ﬁrst

three months in the company. The ﬁrst session introduces new arrivals to

how the Village works, along with a presentation of Havas Group and more

practical information on the working environment and human resources. A

breakfast with members of the group’s leadership is also organized every

six to eight weeks giving new hires an opportunity to personally meet the

management team, ask questions and learn more about Havas’ roadmap

and strategy. Lastly, breakfasts are held every Friday morning to give

employees an insight into the various agencies’ different businesses. At

each session, four agencies or teams are invited to give a 15-minute talk,

introducing themselves and illustrate the projects they are working on.

4.4.4.2. Developing talent

Mindful of how important detecting and overseeing talent is from a

strategic point of view, Vivendi’s HR teams apply a talent management and

development policy that calls for commitment from:

3 managers, who are responsible for identifying talent. The policy

places particular importance on managers since their close working

relationship with employees means they are well positioned to pick

up on particular skills; and

3 employees, around whom the policy is centered. They are encou-

raged to play an active role by using their career paths, experience

and skills to their best advantage and sharing their interests for

career development or mobility opportunities, ambitions and profes-

sional objectives.

With this in mind, Vivendi’s approach is centered around structured meetings

including annual appraisals as well as less formal dialog. Together, these

discussions help form a talent map which is then shared with others in the

company to best reconcile the needs of both the company and its employees.

Numerous programs and measures are in place in the group to develop and

retain talent identiﬁed in this way and match each employee’s skillset with

the needs of the group and its business lines.

These include:

3 Learning Expedition, a program developed by Vivendi for senior

managers to develop a fuller understanding of the group’s various

entities, forge cross-functional links and eventually nurture new

internal growth initiatives through cross-fertilization;

3 Havas Next Gen, a year-long program designed to give high-poten-

tial employees in Havas agencies the tools to develop their lea-

dership skills as future members of senior management;

3 Havas Loft, a comprehensive learning experience developed to give

employees an insight into how the Havas Group’s various agencies

around the world are organized and run. Each participant is paired

with a coach in a host agency, where they spend four weeks

immersed in its processes, tools and culture. At the end of their

placement, participants have new perspectives and ideas to share

with their teams back home; and

3 Be The Change, a program offered by Canal+ to develop leadership and

change management skills in an environment of new challenges.

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It is also important to establish an appropriate and motivating compensation

strategy based on employees’ skills and their personal contributions to the

company’s development. To this end, the group’s HR teams take part in

positioning surveys and regularly analyze its employees’ compensation to

ensure its relevancy for the company and to compare it to market rates so

as to retain talent and attract new people with potential.

Lastly, the group’s different business units strive to help their talented

employees progress in their careers to meet their expectations and keep its

teams motivated and well-equipped to handle changes in the businesses.

For this, it is vital to set up internal mobility opportunities and make these

accessible to employees so that they can gain new experiences and skills.

The role of HR is to facilitate the processes involved in mobility and career

development. A broad panel of HR procedures involving the HR teams and

management at all levels guarantee transparency within the process. At

group level, an Internal Mobility Charter has been in place for more than

15years, along with a tool that collects job offers from the group’s French

companies which are open to transfers. These tools also exist within major

subsidiaries.

Promotion of mobility is also the responsibility of the managers, who are

encouraged to mentor their employees in developing their careers.

International “co-founder” seminars bring together the group’s main

executives to encourage a group wide focus and thereby promote career

mobility.

4.4.4.3. Quality of life at work

Policies to ensure quality of life at work are aimed at enhancing the

company’s attractiveness, improving employees’ creativity, engagement and

motivation and retaining talent.

To adapt to technological, cultural and other changes in the business

environment, companies must develop new working practices to preserve

the necessary balance between employees’ work and home life. The shift in

work habits seen in new generations produces, in turn, new employee

expectations for work methods. With this in mind, each business and each

subsidiary must review the way it works in line with its operations and in

compliance with legal and contractual requirements.

Vivendi wishes to guide its employees toward new work habits that

facilitate cooperation, agility and cross-functional efficiency across the

company. Work environments are becoming more ﬂexible and in improving

people’s quality of life, they also improve company performance.

For such changes to proceed smoothly, a forward-looking, positive manage-

ment approach must be developed that calls upon employees’ individual

strengths and gives due acknowledgment to achievement. Many of the

group’s entities host regular events where employees are free to express

themselves to stimulate open discussion on various subjects. These might

take the form of meetings with management, project presentations,

hackathons (events at which, among others, developers and designers meet

up for a few days to bring a new project to life), and design-thinking

workshops harnessing cooperative intelligence across multidisciplinary

teams to stimulate innovation.

In a similar vein, more and more group companies are reorganizing their

working spaces to encourage communication between teams, creating

co-working areas and zones tailored to different needs, whether for

brainstorming, quiet work, informal meetings or relaxation. These areas are

designed to be conducive to employee creativity and well-being.

Further to this, Havas Group company BETC has instigated “short conversa-

tions”, regular discussions where employees receive feedback from their

managers. These are an opportunity for employees to discuss their latest

projects, consider what might be coming next, receive advice and make

suggestions on how to improve or adapt the organization of the agency or

its services.

A numberof group companies have opted for new collaborative working

methods and offer remote working arrangements to meet the expectations

of their employees, who are looking for work that feels meaningful and

promotes their well-being. New working methods have been developed due

to changes in the way companies are run, new management practices and

the skills of employees, who are now better equipped to balance their

working and personal lives.

3 UMG offers employees the opportunity to work remotely and adapt

their working hours; this policy is not necessarily deﬁned in signed

collective agreements but, given the diversity of regulations in the

47 countries where UMG has employees, tends to take the form of

speciﬁc action plans.

3 In 2015, Canal+ Group renewed its agreement on telecommuting

(originally signed in 2012) for a further three-year period, conside-

ring this an innovative form of work organization that affords greater

ﬂexibility and adaptability by allowing employees greater responsi-

bility and independence.

3 A numberof Havas Group agencies offer or practice working arran-

gements such as regular or occasional telecommuting and ﬂexible

hours.

3 Several Gameloft studios, along with several Vivendi Village and

New Initiatives entities, including Dailymotion, have also opted for

remote working arrangements and ﬂexible working hours.

In parallel, some companies have implemented right-to-disconnect policies,

although interpretations of this concept vary widely between countries,

cultures, company organizations and employees.

3 Gameloft: some studios in Canada, Spain and Eastern European

countries guarantee employees the right to not consult their emails

during vacation or at the weekend.

3 Canal+ International: a charter on the right-to-disconnect has been

distributed to all employees.

3 UMG France: the right-to-disconnect was included in the gender

equality collective agreement signed in 2015 as one of the mea-

sures to promote work/life balance.

3 Havas France: the Village’s internal rules include a charter on the

right-to-disconnect. In 2017, the agency W&Cie signed a charter

with its different structures on the right-to-disconnect.

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These new arrangements directly beneﬁt employees working on projects

that require adjustments to working times, such as game releases,

advertising campaign launches, the production of television programs or

shows, or in ticketing, where activities are explicitly linked to specific

events such as festivals, shows and sporting events.

Spotlight

In late 2017, UMG launched an engagement survey for all employees to

determine their main expectations on various topics, including development,

career prospects and management, and thereby define and implement

measures to best meet these expectations. A total of 5,785 employees took

part in the survey, representing a participation rate of 84%.

In 2019, Havas will launch its third engagement survey for all employees in

its scope.

4.4.4.4. Training

To sustain a rapid response capability and keep pace with changes affecting

the group’s businesses, talent must be maintained by effective training that

covers emerging jobs and challenges. The development, acquisition and

consolidation of professional skills are key to the success of all employees

and, consequently, to the company.

Employee motivation and investment relies ﬁrst and foremost on employees’

ability to achieve their professional development goals. This requires a

partnership in which the employee takes the leading role in his or her

professional development.To this end, employees are assisted by their

managers and the human resources (HR) teams. Each group business offers

a set of resources aimed at creating the most favorable conditions conducive

to development.

Training is offered in all countries in which group subsidiaries operate and

uses innovative digital formats adapted to existing practices. Training

policies are the central focus of the plan on human capital development,

which derive from the strategy of the group or the subsidiary in question.

The group’s priorities in training and development of skills include:

3 at an individual level: the three aspects of an employee’s “human

capital”, namely personal development, business skills and unders-

tanding of the company and its environment; and

3 at a collective level: main training areas determined by the subsi-

diary in line with its strategy and analysis of training needs.

68% of the group workforce attended

at least one training course in 2018

Each of the group’s major subsidiaries implements a vocational training

policy suited to the needs of its businesses and the rapid changes they

undergo, making skills development and managerial coaching a major

component of its training policy.

UMG’s 2018 employee survey revealed that employees would like to:

3 understand what the company expects of them and how their work

contributes to the company’s success;

3 be part of a team and work independently;

3 have managers who respect and listen to their teams; and

3 have a high level of trust in senior managers at their label or other

entity.

The survey allowed UMG to draw up a three-year training plan aimed in

particular at contributing to development in management and strengthening

leadership skills at every level. The SHARE Feedback program was set up in

2018 to give managers the tools needed to improve their communication

with employees.

UMG employees also have access to an online learning platform,

Backstage, where they can follow ﬁve- to ten-minute micro-modules on a

range of topics. Twenty-ﬁve customized micro-modules have already been

launched and more are upcoming.

Training methods are often individualized and employee-led, especially in

the United Kingdom. This results in far more flexibility for employees

because much of the training unfolds gradually or in work situations. This

means that some training operations are not recorded. Therefore, an

assessment of the numberof hours of training does not reﬂect the reality of

the training efforts actually undertaken by the music companies.

This is also the case for other companies, including some Havas Group

entities, which offer a numberof training sessions via DIY modules.

Havas Group has set up its own “Havas University” training, designed to

meet the increasingly specialized needs of advertisers. It is organized

around three major themes:

3 H Education: classroom sessions on topics speciﬁc to the group’s

business lines, as well as access to online training modules to learn

more about high-priority issues such as audience planning, the

GDPR, programmatics and data;

3 H Experience: training sessions specially designed to meet speciﬁc

needs, held in small groups in work situations. Participants beneﬁt

from hands-on experience with tools and techniques and learn how

to develop their own strategies; and

3 H Innovation: personalized workshops, team coaching and design

thinking sessions to center discussions and thought processes

around customers.

The platform, which has been available to Havas employees since 2016, is

now open to employees in all Vivendi group subsidiaries.

Canal+ Group gives priority to collective initiatives that best meet business

challenges.

In France, the training policy focuses on major points such as:

3 emerging digital technologies and their impact on business unit

transformation;

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3 the improvement of business unit expertise and rollout of design

thinking as a creativity tool;

3 the development of managerial culture through the Manager+ pro-

gram to help managers motivate individual employees on develo-

ping their skills (positioning, authority, feedback, communication,

and delegation); and

3 the rollout of the Talents programs addressing speciﬁc objectives:

the Be The Change program to develop leadership skills and disco-

ver the group’s other businesses; the Canal Business Makers pro-

gram to build employee business expertise; and the + Digital

program to provide insight and master social networking, or to

introduce employees to computer programming.

In other countries where Canal+ Group operates, training policies focus on

adapting and developing employees’ professional skills and employability.

The training plan is established each year based on identiﬁed needs.

In a similar vein, Dailymotion’s training plan takes into account the

company’s international development but also focuses on management

skills, particularly for junior managers, to help them better manage and

develop their teams in areas such as feedback techniques, leading difﬁcult

conversations and understanding themselves better so as to better help

others.

4.4.4.5. Proﬁt-sharing and employee shareholding

Vivendi places particular importance on the equitable distribution of the

products of its employees’ efforts. The group has therefore established a

proﬁt-sharing policy that strongly encourages the development of employee

savings plans, especially through employee shareholding.

Under its long-standing employee shareholding program (PEG), employees

are represented on the Vivendi Supervisory Board.

Employee savings plans in France

In 2018, the total net amount received by employees of the group’s French

companies under optional and statutory profit-sharing plans and the

employer’s contribution was €22.1million, which represents a total expense

of €29.4million for group companies.

The total amount of newly invested employee savings was €27.1million.

Of this amount, employees placed €24.5million in the various PEG funds of

Vivendi and Havas, in the company savings plan (PEE) of Canal+, as well as

in the various diversified funds of Canal+ International. An additional

€2.6million was also invested in pension savings plans (PERCO) for Havas,

Canal+, Canal+ International and UMG France.

For the most part, the savings were placed in employee shareholding funds:

€18.4million out of a total of €24.5million (75%), following completion of a

new share capital increase reserved for employees in July2018.

Employee shareholding in France and worldwide

On December18, 2017, Vivendi’s Management Board approved the launch

of a new share capital increase reserved for employees in 2018. The ﬁrst

part is a basic plan reserved for employees of the group’s French companies,

to which a reserve of 1.5million shares was attributed. The second part is a

leveraged plan, Opus 18, offered to employees in France and the main

countries in which the group operates (i.e., 13 countries, representing 60%

of the group’s total workforce), for which 7.25million shares were offered.

The total subscription was €100.2million, with 5,185,878 new shares

issued as part of the share capital increase of July19, 2018: 4,452,282 for

Opus 18 and 733,596 shares for the basic plan.

At July31, 2018, employees held 2.52% of Vivendi’s share capital.

6,875 employees subscribed to the capital increase,

whichrepresents an overall participation rate of 29%

4.4.4.6. Attention to people

Respect for human rights and fundamental freedoms

For Vivendi, respect for human rights means ﬁrst and foremost promoting a

responsible employer model that protects the fundamental rights of all

group employees in every country in which it operates. Going beyond legal

requirements, Vivendi advocates respect for individuals as a principle of

management and condemns all psychological and sexual harassment.

These values are clearly set out in UMG’s Code of Conduct, which was

updated in 2016. Virtually all employees have received training on the Code.

In addition, UMG has raised employee awareness about harassment for

several years using a speciﬁc training module.

4,232 UMG employees received training on harassment in 2018,

representing an overall participation rate of approximately 51%

Respect is another core value for Havas, which has launched a new

e-learning module for all employees to educate them in identifying and

preventing harassment and in business ethics.

11,543 members of staff at Havas received training in identifying

and preventing harassment and in business ethics in late 2017

andearly 2018, representing an overall participation rate

ofapproximately 45% (1)

As part of its policy to raise awareness among its employees, Havas will

relaunch this training in 2019.

Canal+ Group has incorporated a whistleblowing system in line with its

collective agreement on quality of life at work.

Gameloft has recently drawn up a Corporate Charter, to be issued to all new

employees, that sets out the principles and values to be respected.

In the United Kingdom, See Tickets has implemented a charter on equal

opportunities, which includes a section on harassment.

At Dailymotion, a mandatory online training course was introduced in

March 2018 to raise awareness among employees about harassment in the

workplace.

(1) This ﬁgure includes employees, interns and other service providers working for Havas Group’s various entities. The percentage is therefore expressed as a proportion of this group and not as a

proportion of employees.

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Continuous social dialog

In compliance with the ILO fundamental conventions, Vivendi promotes

social dialog and consultation at all levels. All employees based in France

and in its overseas departments and territories are covered by collective

bargaining agreements.

At group level, social dialog is organized around Vivendi’s Works Committee

and the European Social Dialog Committee (IDSE). The social partners of

these bodies are informed regularly of the group’s strategy, its financial

position, its social policies and the main events of the year. In 2017, Vivendi

signed an amendment to the IDSE agreement manifesting its commitment

to enhancing communications.

In addition to the annual plenary sessions of these corporate bodies, several

extraordinary sessions of the extended bodies were organized with the

Chairman of the Management Board, for providing improved and

accelerated information on Vivendi’s strategic plans.

Within the subsidiaries, dialog and social discussion are organized in line with

the employment laws and regulations for each country and in accordance with

human resources policy guidelines adopted by each business unit. This also

applies to the compensation policy, which is compliant with the principles of

gender equality and non-discrimination, and takes full account of the

speciﬁcities of each job function in each business line.

A total of 46 agreements or supplemental agreements were signed or

renewed in France in 2018. These include various agreements on

compensation policies and proﬁt sharing (optional and statutory), aimed at

involving employees in their company’s performance, or concerning

retirement savings plans.

In France, labor relations are a particular focus for Canal+. To maintain this

focus and to constantly adapt the priorities of its labor policy, Canal+’s HR

teams and unions followed a joint training course to reposition the methods

for effective, productive social dialog around a new approach to negotiation.

Canal+ also establishes committees to monitor all its agreements.

Occupational well-being, health and safety

Promoting health and well-being in the workplace complements the group’s

policy to retain talent.

Providing employees with space for quiet moments, time to attend to

personal matters and time to recover from any mental and physical stresses

has beneﬁts for employee morale and for general well-being.

In addition, group entities have increased local initiatives and operations to

promote employee health and well-being in the workplace.

These initiatives available to employees include services such as yoga,

meditation classes, a gym, a relaxation room and access to massage

therapists, dentists, doctors and lawyers. Various well-being events are

also held on a numberof different themes (e.g., sleep, nutrition, posture at

work, cardiac coherence and body clocks). There is also the opportunity to

organize charity events and to volunteer. In addition, group entities often

sponsor projects in the workplace that encourage all staff to get involved.

Some of the initiatives are described below:

3 UMG US: the Come Together Events program covers a series of

health and well-being activities such as twice-weekly yoga classes,

along with special get-together events including Turkey Bowl,

Halloween Costume Party and Battle of the Bands. At the Woodland

Hills site in California, employees have access to a meditation and

relaxation room during breaks.

3 UMG Norway: an awareness-raising campaign on the importance of

physical exercise has been implemented.

3 Canal+ Cameroon: the company organizes sports activities for

employees every third Saturday of the month, prompted by the rea-

lization that physical activity is an important factor in reducing the

risk of cardiovascular disease.

3 Gameloft: joint initiatives with a numberof other studios have been

organized, including yoga and sport classes, game rooms, break

rooms and the provision of fruit bowls.

3 Digitick: employees have access to the services of a masseur/phy-

siotherapist once a month.

3 Dailymotion: employees can attend yoga or meditation classes, and

have access to a room set aside for relaxation. The company is also

examining further possibilities for enhancing employee well-being

at the workplace.

3 Havas Village France offers entertainment programs, such as

concerts once or twice a year, photo exhibitions, a summer party

and breakfasts.

3 Fullsix ran an internal initiative, “Selfies de l’Avent”, to bring

employees together and encourage them to learn more about

co-workers. Each day, employees were given a clue about a mystery

co-worker and challenged to determine who it was and take a selﬁe

together.

3 In the United Kingdom, Havas offers its employees a multi-discipli-

nary program, Havas Equalize, to help maintain energy and perfor-

mance levels. It also provides coaching sessions and personal

development workshops for employees to develop self-awareness

and improve personal planning. Workshops such as art therapy and

team games are also available to promote culture, have fun and,

most of all, to re-energize employees during the working day.

3 In a numberof group companies, “short Fridays” have been imple-

mented. Depending on the company, this can be one Friday per month

or every Friday during the summer months.

Occupational health and safety concerns all business units, all of which

implement action plans and preventive measures.

Ad hoc committees (CHSCT for French entities), which maintain a dialog

between employees and Management, address these issues and prepare

related documents, such as the Single Document for the Assessment of

Occupational Risks, in the case of the French entities.

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The objectives of these Committees include:

3 managing and updating the document that details risks and preven-

tion plans;

3 participating in and overseeing the implementation of a plan for the

prevention of stressful situations arising from organizational

constraints or workload factors such as atypical working hours;

3 taking into account the need for all employees to balance their per-

sonal and professional lives;

3 monitoring the implementation of action plans required in the event

of serious incidents;

3 improving workstation ergonomics (mouse/keyboard use, eye

fatigue from screen work, postural problems), and diagnosing the

rare situations where there is pain or discomfort;

3 promoting best practices in business travel and identifying and

analyzing the causes of commuting accidents;

3 supervising the safety of premises and the prevention of illness,

particularly occupational illnesses; and

3 providing transportation for employees to their workplace if public

transportation is inadequate or unavailable.

Vivendi continues to apply preventive measures on stress and psychosocial

risks. Counseling teams are available for all employees. These programs are

specific to each entity and cover areas such as the training of local

managers, a free helpline for employees, and information given to elected

employee representatives by a specialist physician. The services are

independent of the company and are completely anonymous, conﬁdential

and free of charge.

4.4.5. TAKING ENVIRONMENTAL ACTION

Protecting the environment is a key part of Vivendi’s corporate social

responsibility policy. Even though the group’s negative externalities are low,

Vivendi is well aware of the need to manage and reduce its environmental

footprint in the various regions where its subsidiaries operate. For the

group, helping to protect the environment and maintaining the trust of its

stakeholders go hand in hand.

Two major themes in the group’s environmental policy are (i) to better

evaluate its environmental impact and (ii) to manage and reduce direct and

indirect energy consumption. The various strategies rolled out by its

subsidiaries are centered around these goals.

Vivendi’s business units develop their own environmental action plans that

are adapted to the speciﬁc work they do – particularly in terms of energy

assessment, certiﬁcations and training and information given to employees.

4.4.5.1. Expanding the scope of environmental

reporting and environmental certiﬁcations

Commitment from employees is essential to ensuring the success of the

group’s environmental policies, which are centered around environmental

reporting and certiﬁcations.

Reporting requirements

The Vivendi group has expanded its reporting scope to include Havas and

new entities of Canal+ International (Togo and Haiti), allowing for a more

complete environmental data set. This wider scope allows the group’s main

environmental impacts to be taken into consideration. In 2018, environmen-

tal data was reported by a network of nearly 200 contributors in more than

50 countries.

Since 2008, a selection of non-financial data has been verified by an

independent third party, which then issues a limited assurance report on

this data. The veriﬁcation work ensures the reliability of the data through

audits within the different subsidiaries.

Certiﬁcation process

Environmental certiﬁcation processes for the buildings and sites where the

subsidiaries operate help them better assess and reduce their impact on the

environment using recognized management systems. Obtaining certiﬁca-

tions with demanding criteria is a key part of the group’s policy. The group’s

subsidiaries in Europe and the United States have been committed to

applying this approach for several years now.

As greenhouse gas emissions from buildings account for over 6% of

emissions worldwide, the group focused on obtaining certification for

building energy efﬁciency and energy management.

Vivendi’s headquarters send a clear message about the group’s environmen-

tal policy. Its EMAS (Eco -Management and Audit Scheme) and ISO 50001

certiﬁcations were renewed in June 2018.

In France, numerous business unit headquarters and buildings have also

received certiﬁcations, such as the Arcs en Seine production studios for

Canal+ Group’s channels, which have a “Very Good” BREEAM (Building

Research Establishment Environmental Assessment Method) certiﬁcation

rating, and Dailymotion’s Paris headquarters, which has been awarded dual

HQE certification: “HQE

Tertiary sector buildings: Construction and

Renovation – design and construction phases” and “HQE

Tertiary sector

buildings in operation”.

BETC’s premises in the Magasins Généraux in Pantin have Efﬁnergie and

HQE renovation certiﬁcation, along with the BiodiverCity

label awarded by

the International Biodiversity and Property Council (IBPC), the first

international label that recognizes biodiversity in new build and renovation

property projects.

Outside France, several subsidiaries have also opted for more sustainable

buildings.

UMG’s Santa Monica site has Energy Star certification, awarded to

buildings that comply with the strict energy efﬁciency standards set by the

Environmental Protection Agency (EPA). These buildings consume less

energy, generate lower operating costs and emit fewer greenhouse gases

than conventional premises.

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Havas’ King’s Cross site (HKX), home to more than 20 Havas Group agencies

in London, holds ISO14001 certification, which recognizes continuous

improvement in an organization’s environmental performance through

management of impacts related to its business. HKX is committed both to

ensuring continuous improvement and to complying with regulations.

In London, UMG UK’s new headquarters has received BREEAM certiﬁcation,

the world’s leading sustainability assessment method for buildings. The

building combines a range of systems and approaches to make energy

savings, particularly due to its position, sun protection, thermal mass for

cooling, passive ventilation and the site’s district heating network.

Furthermore, the site was crowned best commercial project (post-

construction) at the BREEAM Awards 2018.

In Australia, the site hosting Havas Worldwide Australia and The Red

Agency has a five-star NABERS (National Australian Built Environment

Rating System) rating. NABERS is an initiative run by the Australian

government to measure and compare the environmental performance of

buildings and their occupants in Australia.

In addition, UMG’s new site in Nashville from February2019 has obtained

LEED (Leadership in Energy and Environmental Design) Silver certiﬁcation.

Developed by the U.S. Green Building Council, LEED is a green buildings

rating system that provides independent veriﬁcation.

Lastly, in Canada, Gameloft also obtained LEED certiﬁcation for its 7,000

square meter site in Montreal.

4.4.5.2. Managing and reducing environmentalimpacts

Obtaining and maintaining certification requires careful auditing and

monitoring of energy use, which provides invaluable information about

high-priority environmental targets. The group manages, and more

particularly reduces, its environmental impacts through a set of strategic

low-carbon measures, including, among others, management of energy

consumption at its sites (ofﬁces, agencies and logistics facilities), employee

awareness and use of low-carbon energy.

Employee training and awareness about environmental issues

The key to ensuring an environmental policy’s success is to make it part of

the company’s culture. This makes commitment from employees essential.

With this in mind, Vivendi’s business units take steps to train and/or raise

awareness among their employees, ﬁrstly to educate them on environmen-

tal issues and secondly to give them a better understanding of the environ-

mental impacts of the business and how they can mitigate these effects.

When it comes to implementing measures – mostly related to changing

habits – to save energy, reduce environmental impacts or raise awareness

in the workplace, nothing is more effective than teamwork.

Therefore, at Vivendi’s headquarters, decisions about these issues are made

by the Green Team, which has approximately ten members from different

departments (Administrative Services, IT Support, Human Resources,

Finance, Communication, CSR and Internal Audit) and the service provider

responsible for site maintenance.

In addition, UMG UK has formed its own Team Green to define and

coordinate an environmental policy for all its London sites. At the Creative

Green Awards, organized by the NGO Julie’s Bicycle in July2018, UMG UK

earned recognition in the Highest Achievement for Understanding category

for its commitment to protecting the environment. Julie’s Bicycle is a non-

profit that supports the creative industries as they transition to more

environmentally friendly practices to reduce greenhouse gas emissions.

Awareness campaigns on the right habits to reduce energy consumption

and/or waste have also been organized at several group subsidiaries. In

Vietnam, for example, Gameloft has raised awareness among its teams

about environmentally friendly behavior and put in place a numberof

measures, including programming the air conditioning to turn off auto-

matically at a certain time, setting the lights to switch off at lunchtime, and

designating employees to ensure that various environmental guidelines are

being followed. In Spain, Media Planning Group, Havas Worldwide Spain

and Gameloft in Barcelona have launched information email campaigns for

their employees to raise their awareness of best environmen tal practices in

the workplace.

Lastly, BETC has implemented environmental measures to improve waste

sorting through speciﬁc guidelines for the different categories available

(known as “tutotri”). In addition, on the first Tuesday of each month, it

organizes presentations of its CSR approach for new arrivals.

Managing and reducing energy consumption

Over the course of 2018, the group put in place a variety of initiatives to reduce

its energy consumption, particularly for its IT facilities, which can represent up

to 30% of a building’s energy bill. In late 2018, UMG began rolling out a

software designed to optimize its computers’ energy consumption. Covering

around 3,500 computers in the Americas – Canada, the United States, Costa

Rica, Mexico, Argentina and Brazil – the tool should reduce each device’s

energy use by around 74kg of CO

, representing potential annual savings of

nearly 285 tons of CO

. In Canal+’s three call centers in Poland, an automatic

system running the power supply of IT equipment has been rolled out to

efﬁciently manage when the equipment is turned on and off so as to avoid

consumption peaks.

Canal+ in Warsaw, UMG in Berlin and Tokyo and Havas in Düsseldorf have

each replaced their conventional lighting with LED bulbs, which use less

energy.

The Havas Village site in London has implemented a range of measures to

reduce its environmental imprint, including a sedum green roof (these act as

carbon sinks, storing carbon gases that are harmful to the planet’s climate

balance) and the use of rainwater for toilets. It has also installed a

centralized building management system to monitor and manage energy

use on site. Lastly, the building in Puteaux where a numberof Havas

agencies are located, including Havas Paris, HumanSeven and Fullsix, has

set up a free cooling system in its air handling unit to reduce its energy

consumption. Free cooling is an intensive building ventilation method that

uses free energy from outside air when the temperature outdoors is lower

than the temperature inside the building.

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Use of renewable energy

Increasing use of renewable energy is vital on a global scale. Supplied by

the sun, wind, the earth’s natural heat, waterfalls and tides, these energy

sources generate little or no waste products or pollution. Using power

produced in this way is a means for companies – and even more so for the

group – to make a considerable difference in ﬁghting the greenhouse effect

and CO

emissions in the atmosphere. To this end, several of the group’s

sites use renewable energy.

95% of UMG’s electricity consumption in the United Kingdom

(including the famous Abbey Road studios) comes

from renewable energy

In the United Kingdom, UMG has taken out a contract with a specialized

provider for energy that is entirely from renewable sources (photovoltaics

and wind power). In the same way, 80% of the electricity used by UMG

Germany comes from renewable energy sources.

Havas King’s Cross in London has its own photovoltaic network which in

2018 generated 13,172kWh of electricity from solar energy.

Entities at the Havas Villages in Madrid and Barcelona use an electricity

supply where 63% comes from renewable sources.

The Canal+ warehouse in Nouméa, New Caledonia, is equipped with a

solar power plant. All of the energy generated by the site is sold to the

power grid. The power plant produced over 39,000 kWh in 2018.

97% of electricity consumption at Gameloft sites in Canada is based on

renewable energy sources.

Group-wide, 14.38% of electricity consumption came from renewable

energy in 2018.

Optimization of raw materials consumption

(plastic, paper and cardboard)

Following a responsible environmental policy also involves ensuring better

management of the consumption of raw materials. The main types of raw

materials used at group subsidiaries are:

3 plastics, for UMG products (CDs and DVDs) and Canal+ International

products in Africa (set -top boxes sold to customers); and

3 paper, for advertising media and administrative operations.

Plastic consumption decreased by 18% compared with 2018 due to two

factors:

3 firstly, the ever-increasing popularity of music streaming, which

continued to affect sales and therefore production of physical discs;

and

3 secondly, Canal+’s new 4K set-top box (G9 model) which was

launched in 2018 is smaller and more lightweight, requiring less

plastic than the previous version. Since the boxes now take up less

space, CO

emissions from delivering them are also reduced as one

truck can hold more of them. In addition, they consume nearly 70%

less energy on standby.

Paper is still the most widely used consumable by Vivendi subsidiaries.

Consumption of paper is related to a numberof environmental issues

including waste management, climate change, pollution and deforestation.

Use of paper remains unavoidable for the group but it has put in place

numerous local initiatives to reduce consumption including computerizing

resources such as expense reports and annual appraisal forms, setting

printers to print double-sided by default, removing local printers and

encouraging the use of photocopiers on the network.

Digitick, whose online ticketing business is almost entirely paperless, offers

more advantageous prices to customers who opt for digital tickets over

paper versions.

As well as measures to reduce paper consumption in their communications,

the group’s various subsidiaries promote the use of more environmentally

friendly resources (FSC/PEFC paper). Therefore, 97% of paper used

externally (i.e., excluding ofﬁce use) is FSC or PEFC certiﬁed. In late 2017,

BETC took first place in the PAP50 ranking, which assesses the paper

policies of companies to encourage them to take responsibility and commit

to sustainable practices.

At group level, the consumption of cardboard packaging for products on the

market fell by 33%. This decrease is largely connected to lower sales of

physical media as well as the environmentally friendly design approach

Canal+ applied to its set-top boxes to make them more compact.

emissions generated by the textile industry, estimated at between 3%

and 10% of emissions worldwide, just behind those generated by oil, are

something that Bravado, UMG’s merchandising subsidiary, takes very

seriously. In 2018, it launched a joint initiative alongside EVERYBODY.WORLD

to recycle unsold t-shirts and turn them into a raw material that can be used

again in future products.

More than

43,000 t-shirts, or 21 tons of fabric,

were recycled byBravado and EVERYBODY.WORLD

The use of a kilogram of recycled cotton from textile waste rather than a

kilogram of conventional cotton reduces the global warming impact by 86%.

Management of end-of-life electrical and electronic equipment

The main types of waste generated in the group’s business operations are:

3 waste from ofﬁce activities (e.g., paper, packaging and food waste);

3 electronic equipment used at group subsidiaries (e.g., data servers,

desktop computers and laptops and peripheral devices – keyboards,

mice, printers); and

3 equipment leased to Canal+ Group customers (e.g., set-top boxes),

which are returned at the end of their life cycle.

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To manage end-of-life waste, the group has applied two complementary

approaches for several years now:

3 ﬁrstly, it promotes the reuse of products and equipment to prolong

their lifespan; and

3 secondly, it optimizes the management of ordinary waste (e.g.,

paper and cardboard), electrical waste and electronic equipment

(WEEE) (e.g., computers and printers) from the subsidiaries by

implementing appropriate and traceable processing circuits for each

type of waste.

By allowing customers to return leased equipment, Canal+ Group encour-

ages reuse in its ﬁght against product waste and the increasing scarcity of

natural resources, raw materials and energy.

In Madagascar, Canal+ Group repairs defective set-top boxes sold by other

group entities and returns them to the sales circuit. By reconditioning its

equipment, Canal+ Group reduces its use of raw materials and its

environmental footprint. In 2018, 22,631 set-top boxes were reconditioned

for sale.

Some entities, such as Flab Prod and Gameloft in the Philippines and

Vietnam, resell obsolete equipment to specialist companies who then

recondition it and put it back on the market.

Others donate equipment that is obsolete but still functional to associations

or schools, including Havas entities Ekino, Havas Worldwide Amsterdam

and Media Planning Chile, as well as Dailymotion in France through a skill-

based sponsorship with the Simplon school.

When equipment can no longer be reused or reconditioned, Vivendi

subsidiaries are responsible for disassembling and recycling it in line with

environmental standards.

To optimize its waste management, Canal+ Group collects and processes

end-of-life equipment returned by its customers, calling on qualified

external partners or collective networks when possible.

On a like-for-like basis (excluding Havas) between 2017 and 2018, the

volume of WEEE generated (e.g., computers, screens and printers) remained

stable, with a slight 3% increase. The volume of equipment leased to Canal+

Group customers (e.g., set-top boxes), which were returned at the end of

their life cycle rose by nearly 59% in 2018. This increase is mainly a result of

Canal+ Group’s equipment renewal campaigns on an international level.

Group-wide (excluding Havas), WEEE (all types) collected for recycling

accounts for 73% of the total waste produced.

Monitoring of ordinary waste (e.g., paper, cardboard and food waste) has

been in place since the 2018 reporting period. The recovery rate of non-

hazardous waste came to 45% for the year. This average rate takes into

account the wide disparity between the networks available in different

countries to process this kind of waste and the fact that many entities that

lease their buildings are not able to obtain this information from their

lessors (partly because the indicator was only rolled out recently so the

system for reporting the information is still relatively immature).

Business travel

Business travel is a regular occurrence in Vivendi’s various business lines. It

is an essential part of building and maintaining sound, productive

relationships with customers and business partners. However, mindful of

the associated carbon footprint, the group looks for ways to optimize

business travel to reduce its environmental impact.

In 2018, Vivendi employees traveled 335million kilometers by plane (taking

the consolidation of Havas into account in the reporting scope). Since this

figure remained largely stable between 2017 and 2018, with only an

increase of 7%, Vivendi is placing great importance on the reduction of

emissions caused by business travel as a key focus of its environmental

policy.

As a whole, the subsidiaries encourage low-carbon travel and in particular

make use of new communication tools and working methods (e.g., remote

or peripatetic working) where possible to replace physical meetings by

virtual video conference or conference call meetings to communicate with

employees on remote sites.

In France, the headquarters of Vivendi, Gameloft, Dailymotion and UMG

France carried out a mobility assessment to obtain better knowledge of

their employees’ commuting habits. These companies have implemented

various action plans to improve commutes and reduce their environmental

impacts from 2019.

The Purchasing department, working with group business divisions, is

working to reduce the carbon footprint of company cars by choosing cars

that generate less pollution, particularly electric and LPG models.

For example, the Canal+ Group subsidiary in Gabon has two electric

vehicles available for employee use (e.g., shopping, post ofﬁce and supplier

visits). UMG in the Netherlands has an LPG car for its employees’ business

travel.

Canal+ Madagascar has ﬁtted the cars used by its traveling salespeople

with solar panels so that they can power the equipment used in demonstra-

tions; this is particularly useful in areas where local access to electricity is

limited. Canal+ Haiti also has solar panels that act as a back-up in the event

of power cuts in points of sale in remote areas.

4.4.5.3. The environmental challenges

ofdigitalcontent

The Internet has completely revolutionized the entertainment industry.

While use of plastic has gone down (with CDs and DVDs now less popular,

for example), access to online content and new consumer habits in culture

and entertainment generate new forms of energy consumption that should

not be underestimated. The direct and indirect environmental impacts of the

information and communications technology (ICT) industry is estimated to

represent 14% of greenhouse gas emissions worldwide in 2040 – the

equivalent of current emissions generated by the United States.

To gain a more accurate understanding of the environmental footprint of its

business activities, Vivendi launched a study in late 2018 to assess the

greenhouse gas emissions arising on the consumption and distribution of

content from its subsidiaries UMG, Canal+ Group, Dailymotion and

Gameloft.

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For UMG, greenhouse gas emissions generated in 2018 through listening to

music (by streaming or on physical media) were estimated at more than

350,000tons of CO

eq, representing the equivalent of the average

greenhouse gas emissions generated by more than 30,000 people in France

over a year.

The results of the study for the group’s other businesses will be published

later in 2019.

4.4.5.4. Combating climate change

Vivendi fights climate change on two levels: firstly, with an underlying

strategy and concrete measures in house, and secondly, by raising the

awareness of its customers, who are ﬁrst and foremost citizens.

Although the media industry is not considered to be a major contributor to

greenhouse gas emissions, the group plans to factor climate change issues

into its long-term strategy and business activities, which includes obtaining

better knowledge of the most signiﬁcant causes of emissions.

Greenhouse gas emissions related to the use of the group’s products and

services (e.g., listening to UMG’s music online or on physical media, viewing

programs on Canal+ Group’s channels or Dailymotion’s online videos and

playing Gameloft’s video games) are potentially the most significant.

However, the group considers that these emissions cannot be measured

with enough accuracy to be included in its total emissions assessment.

Collecting these data would require measuring the electricity consumption

of all devices used by customers (e.g., computers, mobile phones and

tablets and televisions) and calculating, on a pro rata basis, the proportion

corresponding to content from the group’s subsidiaries. Consequently,

information about these emissions are provided for indicative purposes only

(see Section4.4.5.3 of this chapter). In addition, the group has very little

control over these sources of emissions.

The main areas where the group has more leverage are business travel, the

purchase of raw materials used to manufacture products sold by the group

(plastic, cardboard and paper), and the energy consumption of its buildings.

Examples of actions that aim to reduce the carbon footprint of these

sources of emissions are presented above.

In 2018, the main cause of emissions (excluding use of products) was

related to business travel (46%), followed by the purchase of raw materials

used to manufacture products sold by the group (plastic, cardboard and

paper).

In addition to the abovementioned steps taken to measure and reduce the

emissions, the group also takes concrete action to contribute to the

worldwide effort to ﬁght climate change.

In September2018, Havas launched “Solidarité Climat”, an innovative,

unique initiative run by the agencies Havas Paris, Havas Events and BETC to

offset the carbon footprint of all their audiovisual, print, digital and events

production. Using methodology deﬁned by a specialist ﬁrm, a correlation is

established between the total cost of a production and its carbon impact.

With the agreement of the advertiser, the carbon cost of each production

(technical expenses only) is added to the cost of the production and

invested in a wind power project in New Caledonia run by the operator

South Pole, which is then authorized to issue a carbon certiﬁcate that the

agencies can send to their customers.

More than 70 customers of Havas Group agencies

took part in the “Solidarité Climat” initiative in 2018

The group also contributes to the ﬁght against climate change through its

subsidiaries by raising awareness among consumers, citizens and

customers about this major challenge in the 21

century.

Alongside the ﬁve major international communication groups, Havas has

been committed to the Common Ground initiative since 2017, which aims to

help achieve the United Nations’ 17 sustainable development goals. Each

group has undertaken to tackle a speciﬁc target, with Havas taking on the

issue of climate change.

Host Havas Sydney’s Palau Pledge campaign is designed to raise tourists’

awareness of the threats to Micronesian archipelago Palau and the

importance of conserving its ecosystem (see Section4.4.3.1 of this chapter).

BETC ran the campaign Save Our Species for its client Lacoste, in partner-

ship with the International Union for Conservation of Nature (IUCN), the

world standard for data about the state of the natural world and the

measures needed to conserve it. During this campaign, Lacoste replaced its

famous logo with ten endangered animals. 1,775 polo shirts were produced,

with the numberof shirts available for each species corresponding to the

exact numberof animals still living. The campaign was highly successful,

quadrupling donations to the IUCN.

Canal+, through its channel Planète+, screened several documentaries to

raise awareness of the importance of protecting the environment: L’Odyssée

pour le Futur, an eight-part series of 52-minute documentaries began

broadcasting in October2018. It follows people who invent the innovative

initiatives of tomorrow to protect the environment, reinventing agriculture,

the economy and transport and ﬁnding new solutions to promote biodiver-

sity. Documentary series Green Cops focuses on people from all over the

world taking a stand against those who harm the environment and their

devastating practices, from deforestation in the wild to waste trafﬁcking,

poaching, unsustainable ﬁshing and illegal gold panning.

UMG in Brazil joined forces with C&A to create a new song and music video

about sustainability to launch a campaign on sustainable production in the

fashion industry. Artist Mahmundi was selected to record the song and

video.

4.4.6. CONTRIBUTING TO LOCAL DEVELOPMENT

Vivendi contributes to the development of the territories in which it

operates, not only through employment, but also by promoting local cultures

and by sharing its expertise. Whether by supporting artistic talents and

working with local producers, investing in infrastructure or helping improve

the skills of creative professionals, the group plays an important part in the

development of the local creative ecosystem. Its preference for purchasing

from local suppliers, supporting associations and helping projects that

promote equal opportunities further compound the group’s contribution to

the economic and social development of the areas in which it operates.

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4.4.6.1. Investing in local economies and skills sharing

Through its activity, Vivendi contributes to creating jobs and supporting

local cultural industries, particularly in countries where they are not fully

structured.

Supporting the local economy

84% of purchases are made from local suppliers

The group has analyzed the purchases made with suppliers and subcontractors,

which account for at least 75% of the overall expenditure of each of the

subsidiaries (see Note on Methodology in Section4.7.1). On average, 84%

of purchases made by UMG, Canal+ Group, Havas Group, Gameloft, Daily-

motion and Vivendi Village are from local suppliers. By choosing proximity,

Vivendi has a positive impact on the local economic fabric by helping to

create jobs.

Vivendi also contributes to the development of the economic and cultural

fabric by involving local businesses in its operations. Committed to

supporting local creative projects, Canal+ Group entities work with many

audiovisual and ﬁlm production companies. In France, 429 local producers–

of immediate broadcast shows, ﬁlms, documentaries, Créations Originales,

animations, series and TV shows – worked with the group’s channels

(excluding Studiocanal) in 2018. In Africa, Canal+ Group worked with over

40 local producers for the purchase and pre-purchase of rights, or to

co-produce series, ﬁlms, documentaries and shows. Similarly, in Poland,

more than 70 local production companies worked with nc+ to provide the

group’s various channels with programs. In Vietnam, K+ partners with

around ten local studios, with which it co-produces movies and sports

programs. In France’s overseas departments and territories, the group

supports local channels by guaranteeing free transportation, a source of

income and access to certain programs. A speciﬁc budget is set aside for

local production. In 2018, Canal+ Antilles launched a call for projects to

production companies in the region for short ﬁlms and documentaries. The

projects selected were ﬁnanced by a support fund launched in partnership

with the Guadeloupe Region.

Promoting skills sharing

In 2018, Vivendi continued its training program for sound engineers

launched in Mali in 2006. This program, which is being held in Bamako, in

the studios of singer-songwriter Salif Keita, was selected by UNESCO for its

contribution to developing local production capacities. Recorded during the

training session, the album Made in Bamako– Volume 2 illustrates the

ability of trainees to record and mix the productions of artists and features

talents from various universes: seven artists from the new Malian scene

and one young photographer who illustrated the cover. Made in Bamako–

Volume 2 invites listeners on a journey of musical discovery, immersing

them in the creative effervescence of Mali and the rest of the African

continent.

Skill sharing is central to many programs set up by Canal+ International to

enhance the professional skills set available in the local cultural sector and

identifying promising young talents. In 2018, Canal+ International continued

its support for the Galaxie Africa production company and its pan-African

journalists training program, by providing practical courses for 15 video

journalists taught by professional reporters in MOOC format (online courses)

and in face-to-face classes. The group also ran the second edition of

L’Afrique au Féminin, a training program aimed at ramping up skills in the

audiovisual sector through seminars on scriptwriting, ﬁlming, video editing

and the use of digital tools. In partnership with Galaxie Africa and CFI, the

French media cooperation agency, the group gave support to seven talents

from seven French-speaking African countries in learning the various

professions in the audiovisual industry and producing a 13-minute report

on“Women in African society”. The production was broadcasted on Canal+

to mark International Women’s Day in March 2019, on the Enquête

d’Afrique program.

Filming is often a chance for providing training on set. This was the case, in

partnership with CFI, for production teams during the shooting of the series

Flingues et Chocolat in Côte d’Ivoire. Some projects also enjoy the support

of Vivendi Create Joy, the group’s solidarity program (see Section4.4.2.3 of

this chapter). Examples include acting training offered to Senegalese actors

working on the series Sakho et Mangane and training for young African

humorists offered by humorist Valery Ndongo.

Canal+ Calédonie, in partnership with the Mission for Cultural Affairs, the

Southern Province, the Jean -Marie Tjibaou Cultural Centre and the Maison

de la Nouvelle-Calédonie, offered a training program to ten selected

candidates in a professional development process during the FAO Film

Festival to support them in the writing of short ﬁlms. In December2018,

after the group and individual sessions led by directors Sacha Woff and Elsa

Diringer, the participants delivered their screenplay. Their films are

scheduled for screening at the festival’s 2019 edition.

Supporting local cultural life and creating new opportunities

foraccess to different forms of creation

Vivendi actively supports regional cultural life by contributing to the

existence of a diverse range of festivals in France. The group ensures

respect for their individual identity by relying on their founding teams.

Itworks on their programming and the welcoming of festival-goers.

Olympia Production, part of Vivendi Village, now owns Garorock – one of

France’s biggest regional festivals – in Marmande, as well as Les

Déferlantes in Argelès-sur-Mer, Live au Campo in Perpignan and the Brive

Festival in Brive-la-Gaillarde (through Festival Production, a joint venture set

up by Vivendi and the Centre France group). OIympia Production also

co-produces the ODP Talence festival, taking charge of programming,

ticketing and communication.

In the United Kingdom, U Live which is also housed within Vivendi Village,

designs and develops a diverse range of festivals held in the heart of the

English countryside: Love Supreme in East Sussex, The Long Road in

Leicestershire, Sundown in Norfolk and Nocturne in the gardens of the

prestigious Blenheim Palace in Woodstock, Oxfordshire. U Live is also

developing Le Crxssing, a Franco-British cultural festival promoting different

forms of artistic expression on both sides of the Channel.

BETC operates out of the Magasins Généraux in Pantin, a former industrial

site it has remodeled as an innovative workplace and vibrant cultural venue

in Eastern Paris, known for having its doors open to all local residents.

Magasins Généraux’s programming is punctuated by artistic and cultural

seasons, taking an exhibition as a starting point and then adding talks,

concerts and workshops. The highlights of 2018 included “Par Amour du

Jeu 1998-2018”, a festival that explored the links between creation,

football and society to mark the World Cup in Russia. The Magasins

Généraux are also home to the Medialab93, a cooperative incubator

mentoring young creative people in Seine-Saint-Denis.

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Some 50-100 years ago, it was mandatory for key classical music artists

visiting Australia to take their artform to regional Australia. As a means of

re introducing this phenomenon and both educating and entertaining

audiences in sections of Australia that are increasingly under-serviced,

Universal Music Australia is on a mission to take its key artists to these very

areas of the country and not simply release recordings by them. This year

saw 14-date tours of Australia from Greta Bradman and Aled Jones.

Audiences not only enjoyed performances from these artists, but more

importantly got to interact with the artists after each concert. Further tours

are planned and a new entity, Decca Concerts, has been developed to act as

the presenter for these.

In Africa, other than ﬁlm festivals (see Section4.4.1.2 of this chapter), the

Canal+ Group subsidiaries support many local events such as the Arondihy

festival in Madagascar and the Amani festival in the Great Lakes region of

the Democratic Republic of Congo, a music festival promoting peace.

To make culture more accessible in countries with less developed infra-

structure and to enhance the cultural offering in Africa, Vivendi continued to

roll out its CanalOlympia movie theaters and venues. By year-end 2018, the

network had 11 theaters in eight countries in Central and West Africa, with

a capacity of 300people for indoor events and several thousand for outdoor

events. The environmentally friendly venues run on solar power and are

fully self-sufﬁcient. The ticket price has been set deliberately low, at around

€2.30, to allow access to as many people as possible. A partnership with

Orange (see Section3.1.5.2 of this chapter) also allows the operator’s

customers to enjoy the Cinédays offer (a free cinema ticket for every ticket

purchased), two days every week. Orange Money, the mobile financial

services offer, will also be phased in as a means of payment.

Nineteen screenings are programmed each week, including four dedicated

to children’s ﬁlms. To support the local cinema industry, at least one of the

films screened every week is an African production. International

productions are also popular with the public. One big hit was Black Panther,

the global phenomenon seen – due to the CanalOlympia network – by

thousands of people on the very continent that plays a starring role in the

film, amplifying the blockbuster’s cultural resonance. These versatile

structures are also venues: the 2018 program included nearly 20 live shows

(concerts, stand up, showcase) and two major sports competitions organized

by Vivendi Sports.

Nearly

560,000 ﬁlm-lovers back in theaters

due to CanalOlympia in Africa

Supporting the same goal of bringing cinema to even more people, Canal+

Group reiterated the La Fête du Cinéma traveling ﬁlm festival in Benin in

2018. The Canal+ caravan spent a month roaming between six cities in

Benin to allow the country’s rural populations to discover the magic of

cinema through a selection of local and African films from the Canal+

catalog. Canal+ also supported another itinerant festival, Afrikabok,

presenting awareness-raising ﬁlms on the theme of health in Senegal. In

Mali, the group supported the Ciné à Dos festival, which takes place on the

beach in Koulikoro, a place where access to theaters is limited.

To mark its 20

anniversary, Canal+ Côte d’Ivoire launched a program to

bring electricity to remote villages using solar panels, removing a major

hurdle to access to entertainment in Africa. Twenty-ﬁve villages in several

regions of the country were chosen for the installation of solar energy kits

coupled with a one-year subscription to Canal+ to promote access to

information and entertainment.

In Gabon and Togo, GVA, Vivendi’s telecom subsidiary in Africa, offers

ﬁber-optic Internet with Canalbox. This ultra-high-speed ﬁberInternet offer

allows Gabonese and Togolese users to enjoy an unlimited connection with

a speed of up to 30 Mb/s, giving them access to all available online content

on mobile devices, which are increasingly widespread in Africa.

Canal+ Group’s subsidiary Canal+ Télécom works to reduce the digital divide

in the West Indies and French Guiana and Réunion. Canal+ Télécom was

named numberone in Martinique and Guadeloupe in 2018 by the nPerf

barometer, logging the best performance on ﬁxed Internet speeds.

4.4.6.2. Getting involved in solidarity initiatives

The group-level Vivendi Create Joy fund provides support for marginalized,

underprivileged or disabled young people or those suffering from illness

(see Section4.4.2.3 of this chapter). Subsidiaries in different territories run

their own sponsorship and solidarity programs.

More than

€8.7million spent by the group in 2018

on corporate foundations, solidarity programs, partnership actions,

patronage and probono support

Supporting employee engagement

Pro bono work and skills sponsorship are a big commitment and a clear

strategic push for Havas Group (see Section4.4.3.1 of this chapter). The

agencies show their commitment by freeing up time for their employees

and encouraging them to lend their time and creativity to charities or non-

proﬁt. The aim is to foster individual initiative and commitment. Pro bono

work is done on creative campaigns but can also involve getting free

advertising space for the associations which are supported.

To share best practices in this area, the Havas CSR department held a

webinar, which was open to the group’s entire CSR network on the topic

“Collaborating with NGOs” in 2018.

Dedicated programs are in place to encourage young talent. At Havas Paris,

Assault Créatif gives free rein to young talent (deﬁned as those with less

than five years of experience and aged under 30) to defend causes that

matter to them, allowing them to use the agency’s resources. A junior team

representing the agency’s various professions puts together an initiative in

favor of a general interest cause such as an awareness building campaign,

a partnership with an association or management of the agency’s social

networks. The agency’s resources are at their disposal to help support their

project. The agency’s employees come together to choose the big cause of

the year.

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Twice a year at Havas Sport and Entertainment, the HSE Academy sets the

agency’s trainees a challenge, offering them the chance to explore their

creativity by responding to an association’s practical communication issues.

UMG pursued the philanthropic program All Together Now. Through this

initiative UMG seeks to support employees’ good work and engagement in

various important causes and to maximize UMG’s impact in key areas of

need across education and health & well-being, especially those with a

connection to music and the arts. In addition to the charities available for

contributions, periodically throughout the year UMG spotlights different

organizations as Featured Giving Opportunities such as non-proﬁts working

for gender equality on International Women’s Day. On November27, 2018,

UMG participated in the global #givingtuesday movement and matched all

employee contributions made on that day at 150%. After the California

wildﬁres in 2018, which were some of the deadliest in the state’s history,

UMG employees were also able to donate money through All Together Now

to help the victims.

In many countries UMG employees regularly donate their time to people –

particularly young people – interested in music business jobs

Contributing to social cohesion

Vivendi contributes to the equal opportunities programs of Sciences Po and

the Université Paris -Dauphine. As a partner in Sciences Po’s “Priority

Education Conventions” program, Vivendi sits on candidate selection panels

and helps mentor students who beneﬁted from the procedure. Each year,

about ﬁve mentoring pairs are formed.At Paris-Dauphine, Vivendi supports

“Parcours Dauphine”, a program that encourages the best students of

partner high schools to apply to the university by mentoring them from their

second-last year in high school and broadening their worldview through a

program, which allows them access to many cultural activities.

In 2018, the group also supported a school trip to Cape Canaveral for

students of the “Maintenance of industrial equipment” vocational bacca-

laureat class at the Théodore Monod technical school in Noisy -le -Sec.

Vivendi is also a stakeholder in the PAQTE (Neighborhood Pact for All

Businesses) project with the French government, communities and other

businesses, which aims to help residents of the city’s priority neighbor-

hoods. The group welcomes work experience students from high schools

classiﬁed as priority education networks to allow them to see how a large

group like Vivendi works and to ﬁnd out about the various jobs it offers. For

example; in music with Universal, in broadcasting with Canal+ Group, in

advertising with Havas and in video games with Gameloft.

In France’s overseas territories, Canal+ Caraïbes and Canal+ Réunion, which

actively contribute to the promotion of overseas talent, have signed a

partnership with Nos Quartiers Ont du Talent offering voluntary mentoring

schemes allowing company employees to help young job seekers.

In mainland France, BETC, based in Pantin in the department of Seine-Saint-

Denis, is very committed locally. Since 2012, the agency has been a signatory

of the Corporate and Territorial Charter with EstEnsemble, a territorial public

entity that brings together nine cities in the department to promote economic

activity and local development. Priority areas include the development of

actions on local employment, integration and disability, the development of

links with schools, universities and training centers and the increase in local

outsourcing and links with the local fabric of small businesses.

Lastly, HumanSeven and BETC of Havas Group have partnered with Kodiko,

an association operating in Paris and Tours which works for the professional

integration of refugees. The two agencies offer individual and collective

support sessions to people with refugee status wishing to enter the job

market, teaching them the professional and cultural codes and helping them

gain autonomy, build a network and increase their chances of ﬁnding a job.

Supporting local communities

The group takes part in solidarity initiatives in the ﬁeld in the areas where it

operates.

Many of the organizations supported by UMG use music to assist vulnerable

people: one such organization is Playlist for Life, an NGO in the United

Kingdom that teaches skills to help family members and care staff ﬁnd the

right music for people with dementia.

In South Africa, the group works with the Foundation for Children with

Hearing Loss to provide early access to hearing technology to children who

are deaf or hearing-impaired.

UMG Nashville was a principal supporter of the First Annual Red Bird

Games, an outdoor sporting event hosted by Capitol Records Nashville

artists, Luke Bryan and Jon Pardi, and the UMG team. Dedicated to funding

the Brett Boyer Foundation, the event raised approximately $2.7million for

congenital heart disease (CHD) research and organizations who support

children and adults with Down syndrome. The decision to support this

worthy cause was an example of UMG Nashville’s ongoing support of its

own artists. In early 2017, Brett Boyer, niece of artist Luke Bryan lost her life

as a result of complications stemming from congenital heart disease. The

Brett Boyer Foundation was formed in direct support of children born with CHD.

Canal+ Group employees in France regularly support local associations such

as Sport dans la Ville and Les Restos du Cœur through collections, sales of

objects or solidarity shopping. In 2018, Studiocanal supported the

organization of preview screenings of its ﬁlm Le Grand Bain in over 20 cities

in France; all the proceeds were donated to Les Restos du Coeur.

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NON-FINANCIAL PERFORMANCE

In Africa, the group supports many youth initiatives in sport, education and

culture. For example, in Senegal and Gabon the Football pour Tous and

Mwana Foot tournaments were supported and school kits were distributed

in Côte d’Ivoire, Mali, Cameroon and Togo, where a big Christmas party was

held for orphaned and destitute children in partnership with NGOs and

neighborhood committees. Supporting young African entrepreneurs is

another line of action, illustrated by local initiatives such as support given

for the Gabonese incubator JA Gabon and the award of the African Women

Entrepreneurship prize by Canal+ International at the African Rethink

Awards.

In Vivendi Village, Vivendi Sports also supports the development of local

talents, notably by providing them with quality equipment that promotes

sport and gives new champions the chance to thrive. In 2018, on the

sidelines of the ﬁrst edition of the Tour de l’Espoir, Vivendi Sports donated

90 bikes to the Cameroon Cycling Federation. It also announced the

distribution of 300 pairs of gloves, 500 t- shirts/shorts sets and 100 pairs of

bearpaw boxing gloves to Senegalese boxing clubs following Jab & Vibes,

the event that marked the return of international boxing in Africa.

Gameloft also took part in several solidarity initiatives in the territories it

covers. In Canada, the Montreal studio prepared meals and collected food

and clothing to help Accueil Bonneau, a local association that works for the

social integration of vulnerable people and those at risk of homelessness. In

Indonesia and Vietnam, Gameloft actively supports several NGOs, relying

on a strong commitment by its employees locally.

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NON-FINANCIAL PERFORMANCE

4.5.Indicator tables

4.5.1. PERFORMANCE INDICATORS

The information below relates to the scope set forth in the Note on Methodology in Section4.7.1 of this chapter.

2018

Attracting and retaining

external talent (a) Numberof hours’ training provided by Canal+ International for creative talent in Africa (b) 1,576

Attracting and retaining

internal talent

Turnover rate (c) 25.75%

of which Universal Music Group 16.35%

of which Canal+ Group 16.20%

of which Havas 34.19%

of which Gameloft 23.66%

of which Vivendi Village 25.54%

of which New Initiatives 37.03%

of which Corporate 11.76%

Responsible content Numberof intervention measures taken by the CSA with respect to Canal+ Group 2

2018 saw a decrease in the numberof intervention measures taken by the CSA (the French broadcast media regulator) with respect

to Canal+ Group, resulting in two rulings compared to six in 2017.

In 2018, Canal+ Group received only one warning for all of its channels combined, relating to remarks made by Dominique Besnehard

on CNews’ morning show, La Matinale, with Jean-Pierre Elkabbach, but no summon was issued.

In its decision on October24, 2018, the CSA penalized Canal+ Group for a lack of information for viewers during the broadcast

of a short program about an African country on one of its channels. It imposed that a statement be read out on the Canal+ channel.

Numberof creative projects by Havas deemed non- compliant by regulatory authorities (d) 287

Numberof campaigns by Havas subjected to intervention measures by the regulatory authorities

and a withdrawal request 2

Two campaigns designed by Havas Group agencies were the subject of withdrawal requests in 2018: a radio advert that the French Board

ofAdvertising Ethics (Jury de déontologie publicitaire) deemed to convey sexist stereotypes and a commercial promoting an automatic

vehicle braking system that the French Board of Advertising Ethics deemed to portray driving without sufﬁcient care.

The majority of rejections received by Havas agencies for campaigns prior to their broadcast in 2018 related to the legibility of terms

andconditions.

Comments:

(a) The following additional performance indicators related to this risk were consolidated and audited for UMG: the numberof voluntary artist departures, the number of

artist agreement renegociations and renewals, the share of non-recorded income and the numberof artist web-stores managed by UMG. Since this information can be

sensitive, it was decided alongside the independent third party not to disclose the associated data.

(b) Hours of individual training are recognized for each person who received training. Hours of collective training are recognized once, regardless of the numberof people

who received training.

(c) The turnover rate is calculated as follows: [(Numberof people hired on permanent contracts in year Y + Numberof departures of people on permanent contracts

in yearY) / 2] / Total employees on permanent contracts at December31 in year Y-1.

The numberof departures of people on permanent contracts is calculated as the difference between the total numberof departures and the numberof people on

temporary contracts whose contracts expired (“End of temporary contract”). Any departures of people on temporary contracts before the end of their contracts, which

would be classiﬁed in “Other reasons” (e.g., death or termination during or at the end of a trial period), could impact the turnover rate because these departures would

be taken into account in the calculation.

(d) In nearly 20% of the countries where Havas agencies operate, local regulatory authorities require creative projects to be submitted to them before being broadcast

in some cases.

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NON-FINANCIAL PERFORMANCE

4.5.2. SOCIAL INDICATORS

Headcount at December31 2018 2017

Universal Music Group 8,319 7,912

Canal+ Group 7,739 7,707

Havas 19,622 18,966

Gameloft 4,456 5,681

Vivendi Village 640 733

New Initiatives 567 490

Corporate 257 254

Total 41,600 41,743

Headcount by gender

2018 2017

Women % Women Men % Men Women % Women Men % Men

Universal Music Group 4,017 48% 4,302 52% 3,793 48% 4,119 52%

Canal+ Group 3,699 48% 4,040 52% 3,763 49% 3,944 51%

Havas 11,080 56% 8,542 44% 10,703 56% 8,263 44%

Gameloft 931 21% 3,525 79% 1,173 21% 4,508 79%

Vivendi Village 297 46% 343 54% 378 52% 355 48%

New Initiatives 188 33% 379 67% 149 30% 341 70%

Corporate 145 56% 112 44% 145 57% 109 43%

Total 20,357 49% 21,243 51% 20,104 48% 21,639 52%

Headcount by age

2018

< 25 years 25-34 years 35-44 years 45-54 years

55 years

andabove Total

Universal Music Group 583 2,819 2,208 1,952 757 8,319

Canal+ Group 561 2,868 2,456 1,437 417 7,739

Havas 2,180 8,993 4,945 2,531 973 19,622

Gameloft 710 2,774 860 96 16 4,456

Vivendi Village 70 302 186 61 21 640

New Initiatives 35 347 151 29 5 567

Corporate 14 49 57 80 57 257

Total 4,153 18,152 10,863 6,186 2,246 41,600

As a percentage 10% 44% 26% 15% 5% 100%

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NON-FINANCIAL PERFORMANCE

Headcount by geographic region

2018

Africa North America

South and

CentralAmerica Asia-Paciﬁc

Europe

(including France)

Universal Music Group 66 3,052 357 1,212 3,632

Canal+ Group 1,699 79 - 468 5,493

Havas 71 3,888 2,937 3,077 9,649

Gameloft 2 558 206 2,312 1,378

Vivendi Village 69 40 - - 531

New Initiatives 125 85 - 5 352

Corporate - 10 - - 247

Total 2,032 7,712 3,500 7,074 21,282

As a percentage 4.9% 18.5% 8.4% 17.0% 51.2%

Headcount by geographic region

2017

Africa North America

South and

CentralAmerica Asia-Paciﬁc

Europe

(including France)

Universal Music Group 64 2,835 350 1,150 3,513

Canal+ Group 1,480 70 - 347 5,810

Havas 71 3,679 2,923 2,719 9,574

Gameloft 2 652 310 2,500 2,217

Vivendi Village 9 38 - - 686

New Initiatives - 93 - 5 392

Corporate - 11 - - 243

Total 1,626 7,378 3,583 6,721 22,435

As a percentage 3.9% 17.7% 8.6% 16.1% 53.7%

HEADCOUNT BY GEOGRAPHIC REGION IN 2018 HEADCOUNT BY GEOGRAPHIC REGION IN 2017

Europe (including France)

21,282

Asia-Pacific

7,074

South and

Central America

3,500

North America

7,712

Africa

2,032

41,600

Europe (including France)

22,435

Asia-Pacific

6,721

South and

Central America

3 ,583

North America

7,378

Africa

1,626

41,743

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NON-FINANCIAL PERFORMANCE

New hires

2018

Permanent contracts Temporary contracts Total

Universal Music Group 1,347 433 1,780

Canal+ Group 937 699 1,636

Havas 5,199 1,518 6,717

Gameloft 376 747 1,123

Vivendi Village 96 99 195

New Initiatives 127 92 219

Corporate 29 23 52

Total 8,111 3,611 11,722

As a percentage 69% 31% 100%

Departures by reason

2018

Resignation Termination Redundancy

End of

temporary

contract Retirement Other reasons Total

Universal Music Group 738 143 144 341 13 65 1,444

Canal+ Group 585 224 243 767 10 140 1,969

Havas 4,885 601 298 653 34 435 6,906

Gameloft 1,286 74 205 56 - 77 1,698

Vivendi Village 133 8 6 24 - 15 186

New Initiatives 125 19 - 96 - 23 263

Corporate 13 7 - 22 - 7 49

Total 7,765 1,076 896 1,959 57 762 12,515

As a percentage 62% 9% 7% 16% < 1% 6% 100%

Training

2018

Employees trained Hours of training

Universal Music Group 6,915 39,740

Canal+ Group 4,568 79,764

Havas 13,405 127,379

Gameloft 3,009 105,159

Vivendi Village 108 2,301

New Initiatives 109 4,501

Corporate 116 2,936

Total 28,230 361,780

As a percentage of headcount 68% -

Proportion of women in management

2018

Total managers Women managers

Percentage of

women managers

Universal Music Group 3,704 1,525 41%

Canal+ Group 3,052 1,328 44%

Havas 5,500 2,949 54%

Gameloft 623 142 23%

Vivendi Village 280 116 41%

New Initiatives 328 89 27%

Corporate 210 111 53%

Total 13,697 6,260 46%

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NON-FINANCIAL PERFORMANCE

2018 % of total headcount 2017 % of total headcount

Headcount

Headcount – Total 41,600 - 41,743 -

Headcount – Men 21,243 51% 21,639 52%

Headcount – Women 20,357 49% 20,104 48%

Headcount on permanent contracts 37,074 89% 36,947 89%

Headcount on temporary contracts 4,526 11% 4,796 11%

Headcount by age

Employees under 25 4,153 10%

Employees 25 to 34 18,152 44%

Employees 35 to 44 10,863 26%

Employees 45 to 54 6,186 15%

Employees aged 55 and above 2,246 5%

Arrivals and departures

Total hires/new arrivals 11,722 - 12,157 -

Of which on permanent contracts 8,111 (69%) - 7,675 (63%) -

Total departures 12,515 - 13,398 -

Of which terminations and redundancies 1,972 (16%) - 2,692 (20%) -

Training

Numberof employees trained 28,230 68% 23,888 57%

Hours of training 361,780 - 346,661 -

Hours of training per participant (average) 12.8 - 14.5 -

Compensation

Personnel costs (a) 3,221.2 - 2,529.4 -

Payroll costs (a) 3,059.2 - 2,398.4 -

Payroll costs as a percentage of revenue 21.96% - 19.27% -

Optional proﬁt sharing (a) 16.0 - 8.5 -

Statutory proﬁt sharing (a) 11.4 - 8.8 -

Absenteeism

Numberof employees with at least one day absent 21,340 51% 22,063 53%

Days absent – Total 299,251 - 267,706 -

Of which for illness 149,642 (50%) - 141,778 (53%) -

Of which for maternity, paternity and adoption leave 111,362 (37%) - 90,170 (34%) -

Health and safety

Numberof workplace accidents resulting in lost work time 83 - 105 -

Numberof days lost due to workplace accidents 1,133 - 2,061 -

Employee relations and collective bargaining agreements

Collective bargaining agreements signed or renewed (France) 46 -

Of which relating to compensation and employee savings plans 31 (67%) -

Of which relating to working conditions, health and safety 9 (20%) -

Organization of working time

Full-time employees 40,023 96%

Part-time employees 1,577 4%

Career development

Numberof temporary contracts transformed into permanent contracts 1,291 -

Professional integration and disabilities

Numberof employees with disabilities 324 -

(a) Figures stated inmillions of euros.

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NON-FINANCIAL PERFORMANCE

4.5.3. ENVIRONMENTAL INDICATORS

Unit 2018 % of total headcount

Energy consumption

Electricity MWh 122,600 86%

Electricity from renewable sources MWh 17,746 16%

Natural gas MWh GCV 9,293 26%

Domestic fuel liters 118,167 19%

Steam used for space heating MWh 7,987 20%

Diesel used by the ﬂeet of vehicles liters 1,340,497 26%

Petrol used by the ﬂeet of vehicles liters 802,024 36%

LPG used by the ﬂeet of vehicles (a) liters 1,552 0.4%

Materials consumption

Purchase of paper for internal use tons 460 85%

Purchase of paper for external use tons 639 24%

Purchases of plastics and acrylics used in the manufacturing of products

brought to market by a group entity tons 15,295 24%

Purchase of cardboard packaging for products brought to market by a group entity tons 909 25%

Waste

Professional WEEE tons 252 67%

Professional WEEE recovered tons 46 35%

Household WEEE (b) tons 74 3%

Household WEEE recovered (b) tons 59 2%

Hazardous waste (excluding WEEE) tons 15 58%

Non-hazardous waste tons 3,818 68%

Non-hazardous waste recycled or recovered tons 1,724 58%

(a) Only two group entities use this type of fuel.

(b) This indicator pertains only to Canal+ Group entities. Household WEEE includes set-top boxes and Internet terminals leased to Canal+ Group end-users. In African

countries most set-top boxes are sold to households which means Canal+ Group is not responsible for collecting the equipment when discarded.

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NON-FINANCIAL PERFORMANCE

GREENHOUSE GAS EMISSIONS

Unit 2018

Greenhouse gas emissions (excluding use of products and purchases of content and services)

Scope 1 greenhouse gas emissions related to energy consumption (a) tons of CO

eq 17,481

Mobile sources tons of CO

eq 6,485

Stationary sources tons of CO

eq 10,996

Of which refrigerants tons of CO

eq 8,630

Of which domestic fuel tons of CO

eq 377

Of which natural gas tons of CO

eq 1,989

Scope 2 greenhouse gas emissions related to energy consumption (b) tons of CO

eq 35,555

Of which electricity (including electricity from renewable sources) tons of CO

eq 34,061

Of which steam tons of CO

eq 1,494

Scope 3 greenhouse gas emissions (c) tons of CO

eq 157,197

Hazardous waste (including WEEE) tons of CO

eq 144

Non-hazardous waste tons of CO

eq 165

Business travel tons of CO

eq 98,257

Purchase of raw materials tons of CO

eq 44,170

Of which plastics tons of CO

eq 43,286

Of which paper tons of CO

eq 1,070

Of which cardboard tons of CO

eq 355

Property (buildings leased or owned) tons of CO

eq 14,461

(a) Scope 1 corresponds to direct emissions, including energy consumption (excluding electricity), fuel combustion and fugitive emissions (e.g., from leaks of refrigerants).

(b) Scope 2 corresponds to indirect emissions from energy consumption, including the consumption of electricity or steam via distribution grids.

(c) Scope 3 corresponds to other emissions produced indirectly by the group’s activities which are not covered in scopes 1 and 2 but which are linked with the value chain

as a whole, including the purchase of raw materials (e.g., paper, cardboard and plastics), the management of waste generated by the activities of Vivendi’s subsidiaries

and business travel by employees. Greenhouse gas emissions relating to the purchase of services and content and emissions generated by the use of products and

services sold are not included in the ﬁgures above, since there is a high degree of uncertainty involved in calculating them (see also Section4.4.5.4, “Combating climate

change”).

The calculation methodology is described in the paragraph entitled “Methodological details and limits in relation to indicators” in (see Note on Methodology

inSection4.7.1) and in the document entitled “Note méthodologique de calcul des émissions de gaz à effet de serre du groupe Vivendi” (in French) which is available

on Vivendi’s website.

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NON-FINANCIAL PERFORMANCE

4.6.Correspondance table

The correspondance table below sets out the categories of information required pursuant to Articles L.225-102-1, R.225-105 and R.225-105-1 of the French

Commercial Code.

It refers readers to the sections of this Annual Report where information relating to each category can be found.

Category of Information Relevant sections in the 2018 Annual Report

Presentation of the business model Chapter 1, Section2.2

Description of the main non-ﬁnancial risks Chapter 1, Section4.3

Description of policies to prevent, identify and mitigate the main non-ﬁnancial risks

and their impact and performance indicators

Chapter 1, Sections 4.4.1.1, 4.4.3.2, 4.4.4, 4.4.5 and

4.5.1; Chapter 2, Section3

Consequences of the Company’s activities and the use of the goods and services it produces

onclimate change Chapter 1, Sections 4.4.5.3 and 4.4.5.4

Societal commitments for sustainable development Chapter 1, Sections 4.4.1, 4.4.2, 4.4.3 and 4.4.6

Circular economy Chapter 1, Section4.4.5.2

Combating food waste Not relevant – Chapter 1, Section4.3.1

Combating food insecurity Not relevant – Chapter 1, Section4.3.1

Respect for animal well-being and responsible, fair and sustainable food Not relevant – Chapter 1, Section4.3.1

Collective bargaining agreements in place in the Company and their impact

on its ﬁnancial performance Chapter 1, Sections 4.4.4.6 and 4.5.2

Working conditions Chapter 1, Section4.4.4

Measures taken to combat discrimination and promote diversity and measures taken

to beneﬁt people with disabilities Chapter 1, Section4.4.2

Measures to combat tax evasion Chapter 1, Section3.5

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NON-FINANCIAL PERFORMANCE

4.7.Veriﬁcation of non-ﬁnancial data

4.7.1. NOTE ON NON-FINANCIAL

REPORTINGMETHODOLOGY

Reference frameworks

The reporting of non-ﬁnancial information is based on internal guidelines

drawn up by Vivendi, with reference to the following national and

international texts: French Executive Order No.2017 – 1180 of July 19, 2017

relating to the publication of Non-Financial Performance Statements; French

Decree No.2017-1265 of August9, 2017, the guidelines of the Global

Reporting Initiative (1) (GRI) and the GRI Media Sector Supplement of

May4, 2012 (2), the ten principles of the United Nations Global Compact

and the OECD Guidelines for Multinational Enterprises.

The internal guidelines, the “Reporting Protocol for Environmental, Social

and Societal Data of the Vivendi Group Companies” (the “Reporting

Protocol”), is updated annually and ensures the consistent application of

deﬁnitions and rules for data gathering, validation and consolidation by all

group companies.

Indicators

The societal, social and environmental indicators are presented in Sections

4.4 and 4.5 of this chapter.

Unless otherwise indicated, the societal, social and environmental

indicators refer to consolidated data as of December31, 2018.

The data presented for 2018 is consolidated. A breakdown by subsidiary is

provided for certain indicators.

Reporting scope

The reporting scope was established in accordance with Articles L.233-1

and L.233-3 of the French Commercial Code and, with the exception of

certain companies, pertains to subsidiaries and controlled companies (see

details at each reporting scope level).

Changes in reporting scope are the result of acquisitions or disposals of

consolidated companies between January1 and December31 of the

relevant reporting year:

3 in the case of a disposal during the reporting year, the data for the

company are not recognized in the scope of that year; and

3 in the case of an acquisition during the reporting year, the data for

the company will be fully consolidated into the reporting as from the

following year, unless that company can provide the required infor-

mation for the reporting year. The acquired company's headcount is

however incorporated into the scope of the current reporting year.

Societal reporting scope

The societal reporting scope corresponds to the group’s business units,

subject to the following clariﬁcations:

3 UMG: unless otherwise indicated, the reporting scope applies to

nine companies that account for 80% of the group’s revenues

(Australia, Brazil, France, Germany, Japan, the Netherlands, South

Africa, the United Kingdom and the United States); the indicator for

digital and physical sales generated by the catalog (works marketed

for more than three years) applies to a wider scope of 50 countries;

3 Canal+ Group: unless otherwise indicated, the reporting scope

applies to the companies located in mainland France and its overseas

departments and territories, Poland, Africa (a focus group of 11coun-

tries: Benin, Burkina Faso, Cameroon, Congo, Democratic Republic of

the Congo, Gabon, Côte d'Ivoire, Madagascar, Mali, Senegal and

Togo) and Vietnam. For some indicators that speciﬁcally apply to the

French company the scope “Canal+” is mentioned;

3 Havas Group: unless otherwise indicated, the reporting scope

applies to a limited numberof entities representing 80% of the

group’s gross proﬁt, except the following indicators, which apply to

a wider scope of the entire group: “Amounts paid to corporate

foundations, outreach programs and patronage and partnership ini-

tiatives”, “Policies to encourage skills volunteering and pro-bono

work”, “Numberand description of pro-bono campaigns carried

out”, “Numberof employees involved in pro-bono/skills voluntee-

ring and monetary equivalent of time spent”, “Commitments to res-

ponsible content”, “Numberand description of creative projects

deemed non-compliant by regulatory authorities”, “Numberand

description of campaigns subjected to intervention measures by

regulatory authorities and a withdrawal request”, “Communication

campaigns helping to raise public awareness of contemporary

issues” and “Consultations with stakeholders during the design of

communication campaigns”;

3 Gameloft: the reporting scope applies to the entire group;

3 Vivendi Village: the reporting scope applies to Vivendi Ticketing

(Digitick and See Tickets), CanalOlympia and L’Olympia; and

3 New Initiatives: the reporting scope applies to Dailymotion.

For the purchasing indicators (see Section4.4.6.1 of this chapter), the data

relate to tier-one suppliers and subcontractors that account for at least 75%

of total purchasing expenditure to facilitate reporting by the business units.

(1) Launched in 1997 by the Coalition for Environmentally Responsible Economies (CERES) in partnership with the United Nations Environment Programme (UNEP), the GRI is a long-term

andinternational, multi-stakeholder initiative that develops and issues guidelines for voluntary sustainability reporting by multi-national corporations wishing to disclose information regarding

theeconomic, environmental and social impact of their activities, products and services. The GRI has not veriﬁed the content of this report or the validity of the information provided therein

(www.globalreporting.org).

(2) The GRI Media Sector Supplement provides reporting guidance for global media industry corporations. Several themes are included such as freedom of expression, media pluralism and content

quality, the representation of cultures, independence, data protection, accessibility and media education.

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NON-FINANCIAL PERFORMANCE

Social reporting scope

The social reporting scope covers all group companies and 100% of the

workforce for the “headcount” indicators. In accordance with the 2018

Reporting Protocol for Environmental, Social and Societal Data of the

Vivendi Group Companies, companies newly consolidated within the

reporting scope during the year appear only in the tables related to

headcount. In 2018, 30 entities were newly consolidated in the group,

including two at UMG (19 people), six at Canal+ Group (353 people), 12 at

Havas (364 people), seven at Vivendi Village (136 people) and three at New

Initiatives (131 people), representing a total of 1,003 people.

In social reporting, unless otherwise indicated:

3 “Vivendi Village” refers to L’Olympia, Olympia Production, Petit

Olympia, CanalOlympia Talents & Spectacles (Benin, Cameroon,

Guinea, Togo, Niger, Burkina Faso, Senegal and Gabon), Festival

Prod, Paddington Group, Théâtre de l’Œuvre and Vivendi Ticketing

(Digitick, Paylogic and See Tickets);

3 “New Initiatives” refers to Dailymotion, Flab Prod, Flab Presse,

Vivendi Content and GVA (France, Gabon and Togo); and

3 “Corporate” refers to the Paris headquarters and the New York

ofﬁce, and “Headquarters” corresponds to the Paris headquarters.

Environmental reporting scope

The environmental reporting scope (89% of employees) is as follows:

3 UMG: the reporting scope applies to 16 countries that account for

90% of the group’s revenues (Australia, Brazil, Canada, France,

Germany, Italy, Japan, Hong Kong, Mexico, the Netherlands, Poland,

Spain, Sweden, Taiwan, the United Kingdom and the United States);

3 Havas: the reporting scope applies to 113 entities with more than

50 employees, located in 36 countries and representing 79% of the

Havas Group’s employees (five entities, representing less than

0.0703% of Vivendi’s employees, were mistakenly excluded when

consolidating Havas in the overall reporting scope);

3 Canal+ Group: the reporting scope applies to the companies located

in mainland France and its overseas departments and territories,

Poland, Africa (11 countries: Benin, Burkina Faso, Cameroon, Congo,

Democratic Republic of the Congo, Gabon, Côte d'Ivoire, Madagascar,

Mali, Senegal and Togo), Haiti and Vietnam;

3 Vivendi Village: the reporting scope applies to Vivendi Ticketing

(Digitick and See Tickets) and L’Olympia;

3 New Initiatives: the reporting scope applies to Dailymotion (Paris

and New York) and Flab Prod;

3 Gameloft: the reporting scope applies to 13 entities: France,

Bulgaria, Belarus, Canada, China, Hungary, Indonesia, Mexico, the

Philippines, Romania, Spain, Ukraine and Vietnam; and

3 Vivendi SA’s registered ofﬁce in Paris.

Methodological details and limits

inrelationtoindicators

Societal, social and environmental indicators may generally reflect

methodological limits due to the lack of harmonization of international and

national deﬁnitions and legislation, or due to the qualitative and therefore

subjective nature of certain data.

Societal indicators

With regard to the indicator “Percentage of purchases made from local

suppliers” (see Section4.4.6.1 of this chapter), the subsidiaries reported on

tier 1 suppliers and subcontractors representing at least 75% of the total

purchasing amount. For Dailymotion, purchases related to IT and technical

infrastructure services were included; for 2018, Dailymotion’s purchases do

not represent a significant amount of the consolidated total (0.14%).

Gameloft’s purchases of content (mostly licenses) are not included in the

scope of this indicator since their very nature means they cannot be

considered local purchases.

Social indicators

The turnover rate is calculated as follows:

[(Numberof people hired on permanent contracts in year Y + Numberof

departures of people on permanent contracts in year Y) / 2] / Total

employees on permanent contracts at December31 in year Y -1.

The numberof departures of people on permanent contracts is calculated

as the difference between the total numberof departures and the

numberof people on temporary contracts whose contracts expired (“End of

temporary contract”). Any departures of people on temporary contracts

before the end of their contracts, which would be classified in “Other

reasons” (e.g., death or termination during or at the end of a trial period)

could impact the turnover rate because these departures would be taken

into account in the calculation.

Environmental indicators

For the environmental scope, the methodology used for data collection

takes into account the nature of the site in terms of its contribution to

electricity consumption. Data is primarily collected for sites with more than

50employees (except for ﬁve Havas entities for which the information could

not be reported, representing less than 1% of group employees), to achieve

a representation of over 90% of real data compared to total estimated

electricity consumption.

Greenhouse gas emissions are calculated based on the emission factors from

the French Environmental and Energy Management Agency (ADEME) database

for calculating carbon footprint, Base Carbone, version 15.0 (September2018).

In the event that emission factors are not available in the database or are not

considered pertinent, factors from other recognized sources, including the GHG

Protocol (www.ghgprotocol.org) and the UK Department for Environment, Food

and Rural Affairs (www.gov.uk/government/publications/greenhouse-gas-

reporting-conversion-factors-2018), may be used.

The list of emission factors used for these calculations is available on the

group’s website.

Any missing data on indicators such as electricity, gas, fuel and steam is

estimated using methodologies based on ADEME factors where these are

applicable or are based on available data (e.g., ratios of ten months out of

12 or ratio per square meter, per person).

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NON-FINANCIAL PERFORMANCE

With regard to data on electricity consumption, the quantities reported

correspond to the quantities invoiced. In the event that data is not available

(as is the case for certain sites not owned by the group), consumption is

estimated based on conversion factors (kW/m

, kWh/ft

). The conversion

factors used for the energy consumption indicators are standard values.

They differ depending on the geographic location of the entities and are

taken from recognized reference guides. Total energy consumption is broken

down to obtain a clearer explanation of the composition of the energy

consumed.

In relation to fuel consumption (gasoline, diesel and propane), the scope of

the indicator “CO

emissions from the use of mobile sources (tCO

eq)”

covers directly-owned vehicles or vehicles used by the site under long-term

leases.

emissions are divided into three categories:

3 scope 1 represents direct greenhouse gas emissions, including

those associated with the consumption of natural gas and domestic

heating fuel and injections of refrigerant ﬂuids during maintenance

operations on air-conditioning installations. The emissions related

to transport from consumption from mobile sources, for directly

owned vehicles or vehicles on long-term leases over which the

group has operational control, are also included;

3 scope 2 includes indirect greenhouse gas emissions resulting from

the use of electricity and steam; and

3 in accordance with changes to carbon reporting requirements

resulting from the French Energy Transition for Green Growth Act, as

published in the ofﬁcial gazette (Journal ofﬁciel de la République

française), on August18, 2015, scope 3 emissions are taken into

account from the 2017 reporting period onwards. Scope 3 repre-

sents external indirect greenhouse gas emissions, including in parti-

cular emissions related to business travel by employees, purchase

of paper, cardboard, plastics and acrylics used in manufacturing

products intended for sale, property (buildings) and emissions

related to the processing of WEEE.

For scope 3, the sources of emissions used were selected according to the

degree of reliability and comprehensiveness of the input data available

(e.g., units of mass and distance).

Reporting tools, consolidation and controls

A central data gathering tool named Perform! is used to report all data

consolidated and audited at different levels.

The IT tool automatically checks the data for consistency during input. An

initial validation is performed by each subsidiary. Consistency checks and a

second validation are performed by each business unit. These indicators are

then grouped together and checked at the group’s headquarters, where a

third validation is performed during consolidation. Lastly, an analytical

review and a general control ensure the overall consistency of headcount

ﬂows between year Y-1 and year Y.

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4.7.Veriﬁcation of non-ﬁnancial data

NON-FINANCIAL PERFORMANCE

4.7.2. INDEPENDENT THIRD PARTY’S REPORT ON THE CONSOLIDATED NON-FINANCIAL STATEMENT

PRESENTEDINTHEMANAGEMENT REPORT

This is a free translation into English of the original report issued in French and is provided solely for the convenience of English speaking readers. This report

should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.

Year ended December 31, 2018

To the General Assembly,

In our quality as an independent third party, accredited by the COFRAC under numbern°3-1050 (whose scope is available at www.cofrac.fr), and as a

memberof the network of one of the statutory auditors of your entity (hereafter “entity”), we hereby report to you on the consolidated non-ﬁnancial statement

for the year ended on December 31, 2018 (hereinafter the “Statement”), included in the management report pursuant to the legal and regulatory provisions

of Articles L.225 102-1, R.225-105 and R.225-105-1 of the French Commercial Code (Code de commerce).

Responsibility of the entity

Pursuant to legal and regulatory requirements, the Board of Directors is responsible for preparing the Statement including a presentation of the business

model, a description of the principal non-ﬁnancial risks, a presentation of the policies implemented considering those risks and the outcomes of said policies,

including key performance indicators.

The Statement has been prepared in accordance with the entity’s procedures (hereinafter the “Criteria”), the main elements of which are presented in the

Statement or which are available online.

Independence and quality control

Our independence is deﬁned by the provisions of Article L.822-11-3 of the French Commercial Code and the Code of Ethics (Code de déontologie) of our

profession. In addition, we have implemented a quality control system, including documented policies and procedures regarding compliance with the ethical

requirements, French professional guidance and applicable legal and regulatory requirements.

Responsibility of the independent third party

On the basis of our work, our responsibility is to provide a report expressing a limited assurance conclusion on:

3 the compliance of the Statement with the provisions of Article R.225-105 of the French Commercial Code;

3 the fairness of the information provided in accordance with Article R.225105 I, 3° and II of the French Commercial Code, i.e., the outcomes, including

key performance indicators, and the measures implemented considering the principal risks, hereinafter the “Information”.

However, it is not our responsibility to comment on:

3 the entity’s compliance with other applicable legal and regulatory provisions, particularly the French duty of care law and anti-corruption and tax

evasion legislation;

3 the compliance of products and services with the applicable regulations.

Nature and scope of the work

Our work described below has been performed in accordance with the provisions of ArticlesA. 225 1 et seq. of the French Commercial Code determining the

conditions in which the independent third party performs its engagement and with the professional guidance applicable in France to such engagements, as

well as to the international ISAE standard 3000 – Assurance engagements other than audits or reviews of historical ﬁnancial information.

The work that we conducted allows us to assess the compliance of the Statement with regulatory provisions and the fairness of the Information:

3 We obtained an understanding of the entity’s activities and of all the companies included in the scope of consolidation, the statement of the main

social and environmental risks related to this activity, and, where applicable, the impact of this activity on compliance with human rights and

anti-corruption and tax evasion legislation, as well as the resulting policies and their outcomes;

3 We assessed the suitability of the Criteria with respect to their relevance, completeness, reliability, neutrality and understandability with due

consideration of industry best practices, where appropriate;

3 We veriﬁed that the Statement includes each category of social and environmental information set out in Article L.225-102-1 III of the French

Commercial Code, as well as information regarding human rights and the anti-corruption and tax evasion legislation;

3 We veriﬁed that the Statement includes an explanation for the absence of the information required by the 2

paragraph of III of Article L.225-102-1

of the French Commercial Code;

3 We veriﬁed that the Statement presents the business model and the principal risks associated with the activity of all the entities included in the scope

of consolidation; including where relevant and proportionate, the risks associated with their business relationships, their products or services, as well

as their policies, measures and outcomes, including key performance indicators;

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NON-FINANCIAL PERFORMANCE

3 We veriﬁed, where relevant with respect to the principal risks or the policies presented, that the Statement provides the information required under

Article R.225-105 II of the French Commercial Code;

3 We assessed the process used to select and validate the principal risks;

3 We asked about the existence of internal control and risk management procedures the entity has put in place;

3 We assessed the consistency of the outcomes and the key performance indicators with respect to the principal risks and policies presented;

3 We veriﬁed that the Statement covers the consolidated scope, i.e. all the companies included in the scope of consolidation in accordance with Article

L.233-16 of the French Commercial Code, within limitations set out in the Statement;

3 We assessed the data collection process implemented by the entity to ensure the completeness and fairness of the Information;

3 For the key performance indicators and other quantitative outcomes that we considered to be the most important presented in Appendix1, we

implemented:

– analytical procedures to verify the proper consolidation of the data collected and the consistency of their trends;

– substantive tests using sampling techniques, in order to verify the proper application of the deﬁnitions and procedures and reconcile the data with

the supporting documents. This work was carried out on a selection of contributing entities listed hereinafter: Canal+ UES, Canal+ International

RDC, Havas Media France, BETC, Havas Worldwide London Ltd, UMG France, UMG USA, Gameloft France which cover 18% of employees;

3 We consulted documentary sources and conducted interviews to corroborate the qualitative information (measures and outcomes) that we considered

the most important presented in Appendix1;

3 We assessed the overall consistency of the Statement based on our knowledge of the entity.

We believe that the work carried out, based on our professional judgement, is sufﬁcient to provide a basis for our limited assurance conclusion; a higher level

of assurance would have required us to carry more extensive procedures.

Means and resources

Our veriﬁcation work mobilized the skills of seven people and took place between October2018 and February2019 on a total duration of intervention of about

twelve weeks.

We conducted twenty-one interviews with the persons responsible for the preparation of the Statement including, in particular, the General Management,

Administration and Finance, Human Resources, Public Affairs, Legal, Marketing and CSR departments.

Conclusion

Based on our work, we have not identiﬁed any signiﬁcant misstatement that causes us not to believe that the non-ﬁnancial statement complies with the

applicable regulatory provisions and that the Information, taken together, is fairly presented, in compliance with the Criteria.

Comment

Without qualifying our conclusion above and in compliance with the provisions of ArticleA. 225-3 of the French Commercial Code, we have the following

comment:

3 Policies relating to responsible contents, human rights and attraction and retention of internal talents, may sometimes still show a lack of consistency

in their international deployment.

Paris-La Défense, February28, 2019

French original signed by:

Independent Veriﬁer

ERNST & YOUNG et Associés

Partner, Sustainable Development

Éric Duvaud

Partner

Claire Pajona

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NON-FINANCIAL PERFORMANCE

Appendix1: Information considered as the most important

Social Information

Quantitative Information (including key performance indicators) Qualitative Information (actions or results)

Turnover on permanent contracts (All activities)

Numberof collective agreement (Canal+ France)

Actions for recruiting talents and employer brand (All activities)

Programs to develop internal talents and leadership (All activities)

Actions for quality of working life (All activities)

Training programs (All activities)

Organization of social dialog (Canal+ France)

Environmental information

Quantitative Information (including key performance indicators) Qualitative Information (actions or results)

Main sources of greenhouse gas emissions (All activities)

Actions taken to ﬁght climate change, in particular advertising campaign tackling

climate change (Havas)

Societal information

Quantitative Information (including key performance indicators) Qualitative Information (actions or results)

Share of employees trained to sexual and moral harassment prevention (%) (Havas)

Numberof creative projects considered non-compliant by advertising regulators

(Havas)

Numberof campaigns subjected to an intervention from advertising regulators

andto a removal request (Havas)

Numberof interventions made by the CSA (warnings, summons, sanctions)

againstCanal+ Group (Canal+ France)

Numberof training hours of local African talents (Canal+ International)

Actions taken to defend human rights in particular whistleblowing procedures

(Canal+, Havas)

Training program to prevent harassment (Havas)

Respect of digital stores guidelines on contents (Gameloft)

Respect of group’s guidelines on contents (Havas)

Respect of ethics rules and Ethics Charter (Canal+)

Training program of local African talents (Canal+ International)

Monitoring of attraction and retention of external talents (UMG)

Program implemented for personal data protection (All activities)

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STUDIOCANAL

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RISKFACTORS 98

1.1. Risks associated with the group’s operations 98

1.2. Financial risks 100

1.3. Legal risks 101

INTERNALCONTROLANDRISKMANAGEMENT

102

2.1. Internal control procedures 102

2.2. Risk monitoring and management 104

2.3. Key procedures for ﬁnancial and accounting information 106

2.4. Information and communication 107

2.5. Outlook 107

COMPLIANCEPOLICY

108

3.1. Anti-corruption policy 108

3.2. Duty of vigilance program 109

3.3. Personal data protection 111

Risk Factors, Internal Control

and Risk Management,

Compliance Policy

The Passenger

Mia and the White Lion

1.1. Risks associated with the group’s operations

RISKFACTORS

Section 1

RiskFactors

Vivendi regularly conducts a review of the risk factors that could have a

negative impact on its operations or results. This review is presented to the

Risk Committee, the Management Board and the Audit Committee. Vivendi

has not identiﬁed any signiﬁcant risks other than those described below.

The Risk Committee also assesses the adequacy of the internal procedures

in place for reducing the risks to which the group may be exposed. It notiﬁes

the Audit Committee, the Supervisory Board and the Management Board of

its main conclusions and recommendations.

The Compliance Committee, set up by the Management Board in 2018, is

responsible for measures and procedures to identify and prevent risks

asrequired by Law No. 2016-1691 of December9, 2016 (referred to as the

Sapin II Act), Law No.2017-399 of March27, 2017 on the duty of vigilance

and the General Data Protection Regulation (EU) 2016/679 (GDPR). The

Compliance Committee works in association with the Risk Committee.

For a description of the work of the Compliance Committee and Risk Committee,

see Sections1.2.10.4 and 1.2.10.5 of Chapter3 of this Annual Report.

This section takes into account the provisions of EU regulation “Prospectus

3” (Regulation (EU) 2017/1129 of June14, 2017), which will come into

effect on July21, 2019. The risk factors are presented below in decreasing

order of importance within each category.

1.1. Risks associated with the group’s operations

1.1.1. RISKS ASSOCIATED WITH THE INCREASING COST

OF EXCLUSIVE CONTENT AND PREMIUM RIGHTS

INTHE GROUP’S VARIOUS BUSINESSES

Vivendi’s businesses are faced with an increasingly competitive interna-

tional environment driven by global entities with dominant positions (GAFA),

the vertical concentration of operators and the emergence of highly

aggressive new competitors. These factors lead to overbidding in the

market for exclusive content and premium rights.

Faced with this cost increase, the Vivendi group exercises strict cost

discipline coupled with a reasonable investment policy and beneﬁts from a

broad catalog of diversified, exclusive rights. A policy of acquiring

alternative sports rights and its own production of exclusive programs has

also helped absorb the effects of this overall cost increase and the potential

loss of some premium rights in the medium and/or long term.

1.1.2. RISKS ASSOCIATED WITH PIRACY

ANDCOUNTERFEITING

Vivendi’s businesses are highly reliant on intellectual property rights, which

the group owns either outright or under distribution licenses.

The increasing access rate to high-speed Internet, technological progress and

the difﬁculties which the public authorities face in protecting rights holders are

facilitating the unauthorized reproduction of music and audiovisual, thereby

contributing to the development of illegal digital practices. The illegal use of

the group’s intellectual property rights and content could affect the group’s

results and the growth outlook for its businesses.

Vivendi invests signiﬁcant ﬁnancial resources into combating piracy and is

working more closely with key sector operators, such as rights holders,

internet service providers (ISPs) and sports federations. In addition, regular

action is taken to raise public authority awareness of the problem to help

ﬁnd effective means to combat piracy.

For a detailed analysis of piracy issues and measures taken by each of the

group’s business units to combat them, see Section3 of Chapter1 of this

Annual Report.

1.1.3. DISINTERMEDIATION RISKS

The entertainment market in which Vivendi operates is changing rapidly,

driven by the development of high-speed broadband and the rapid spread of

new consumer viewing habits such as non-linear and on-demand television.

Vertical consolidation in the audiovisual market and the arrival of new

players, such as advertising consultants and live streaming companies,

coupled with the creation of OTT TV packages by publishers or rights

agencies, could have an impact on the development of packages provided

by the group, along with its revenue and operating results.

Vivendi pays close attention to these market trends and has a recognized

and differentiating expertise in content production, editorialization and

distribution. The group forges strategic partnerships with major market

operators to reduce its exposure to disintermediation risk.

1.1.4. RISKS ASSOCIATED WITH TALENT

In the music, publishing, video games and advertising sectors, the ability to

identify and retain internal and external talent, such as artists, creator,

authors, managers and some technical proﬁles, is a key success factor for

the group in an environment characterized by both mobility and competition.

If Vivendi were to lose the ability to attract new talent or support, its growth

prospects or ﬁnancial position could be affected.

Vivendi has implemented a strategy aimed at attracting and retaining the

best talent to preserve the operation of the group’s functions as well as its

reputation. Its presence in more than 100 countries and the reputation of

the group and its brands enable it to identify, attract and retain the talent

needed to develop the group’s businesses.

1.1.5. RISKS ASSOCIATED WITH CYBERCRIME

Vivendi’s operations are reliant on the quality and resilience of its data

centers and service platforms. The resurgence in the past few years of

attempts to saturate digital services and penetrate IT systems could disrupt

the service provided to customers or subscribers and could have an impact

on the organization of the group’s operations or on its reputation.

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1.1. Risks associated with the group’s operations

RISKFACTORS

The security of infrastructures and information systems is an ongoing

concern for Vivendi’s group. Security audits are conducted regularly with

support from outside specialist companies. Detection systems and incident

response processes are deployed in the group’s critical activities.

1.1.6. RISKS ASSOCIATED WITH DATA PROTECTION

Due to the diversity of its operations, Vivendi processes vast amounts of

personal data, particularly in the advertising and TV sectors. Given its broad

geographic footprint, the group is subject to the various national data

protection regulations in the countries where it operates. It is now also

subject to the new European General Data Protection Regulation (GDPR),

which came into effect in May2018.

In 2016, Vivendi appointed a Group Data Protection Ofﬁcer at headquarters

level. Within the group, each operating entity has its own Data Protection

Ofﬁcer responsible for overseeing compliance with the relevant national

personal data protection regulation.

For a detailed description of the measures taken to ensure the group’s

compliance with personal data protection regulations, see Section2 of

this chapter.

1.1.7. RISKS ASSOCIATED WITH CORRUPTION

The group operates in a global and highly competitive environment. It is

subject to various regulations regarding the prevention of corruption and

inﬂuence peddling, and in particular, the new, tighter French regulations on

identifying and preventing corruption risk. In this context, Vivendi has

identified the main risks and implemented anti-corruption procedures

covering all of its subsidiaries and setting out the guiding principles and

conduct to be observed in that respect. The objective of the anti-corruption

system is to protect the group’s reputation and ensure the continued trust of

its stakeholders.

The system is supervised by the Group Chief Compliance Ofﬁcer and the

Group Compliance Ofﬁcer. The Compliance Committee, created in 2018,

reviews the implementation of measures to prevent corruption in the

group’s various operating entities. An Audit Compliance team reporting to

the Internal Audit Control Department makes sure that the anti-corruption

measures are properly applied.

For a more detailed description of these measures, see Section3 of this

chapter.

1.1.8. RISKS ASSOCIATED WITH THE LACK

OFCOMMERCIAL SUCCESS OF RECORDED

MUSIC,FILMS, VIDEO GAMES AND CONTENT

ORSERVICES PRODUCED, PUBLISHED

ORMARKETED BY THE GROUP

The production and distribution of content or services represent a signiﬁcant

portion of Vivendi’s revenues. The commercial success of speciﬁc content

will depend on how the public responds to it, which cannot always be

predicted. The existence and success of competing offers and the general

economic environment will also both have an impact. The lack of commercial

success of new content or services published, distributed or marketed by the

group could have a negative impact on its revenue and results.

Additionally, when such operations are based on content provided by third

parties, no assurance can be given that such third parties will always agree

to transfer their rights to various media on ﬁnancial and commercial terms

acceptable to Vivendi.

1.1.9. RISKS ASSOCIATED WITH THE CONDUCT

OFOPERATIONS IN VARIOUS COUNTRIES

Vivendi conducts its operations in several markets in more than 100countries.

The main risks associated with conducting its operations internationally are

asfollows:

3 each local economic and political situation;

3 restrictions on capital repatriation;

3 unexpected changes in the regulatory environment;

3 the various tax systems, which may have an adverse effect on the

results of Vivendi’s operations or on its cash ﬂow and, in particular,

regulations relating to transfer pricing and withholding tax on the

repatriation of funds; and

3 tariff barriers, customs duties, export controls and other trade barriers.

The majority of businesses most at risk are still in the development stage

and do not yet make a significant contribution to the group’s financial

results. Vivendi’s broad geographic footprint reduces the potential impact of

a failure in a particular local market.

1.1.10. RISKS ASSOCIATED WITH ADVERSE ECONOMIC

AND FINANCIAL CONDITIONS

The unfavorable trends in the economic environment experienced in recent

years in regard to consumer purchasing power and consumer conﬁdence

may lead customers or subscribers to postpone or reduce their spending on

the products, services and content offered by the group or affect their ability

to pay for them, which, in turn, could have a negative impact on Vivendi’s

revenues and results.

Each year, Vivendi conducts impairment tests on the value of its purchased

assets and those which have a finite or infinite operating life to assess

whether the book value of such assets exceeds their recoverable value. An

unfavorable economic environment could lead Vivendi to record impairment

losses on such assets where necessary (see Note9 to the Consolidated

Financial Statements in Chapter4 of this Annual Report).

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1.2. Financial risks

RISKFACTORS

1.2. Financial risks

1.2.1. EQUITY MARKET VALUE RISKS

As part of a sustainable investment strategy, Vivendi has built up an equity

portfolio comprising listed and unlisted French and European companies in

the telecommunications and media sector that are leaders in the production

and distribution of content.

As of December31, 2018, Vivendi had a portfolio of listed non-controlling

equity interests, including a €429million receivable related to the forward

sale of the balance of its interest in Ubisoft (see Note2.3 to the Consoli-

dated Financial Statements for the year ended December31, 2018 in

Chapter4 of this Annual Report). The portfolio had an aggregate market

value of approximately €3.9billion (before taxes) as of that date. Vivendi is

exposed to the risk of fluctuation in the value of these interests: as of

December31, 2018, the net unrealized loss with respect to the interests in

Telecom Italia, Mediaset, Spotify and Tencent Music was approximately

€1.8billion (before taxes). A 10% uniform decrease in the value of all of

these shares would have a cumulative negative impact of approximately

€2.5billion on Vivendi’s ﬁnancial position; a 20% uniform decrease in the

value of all of these shares would have a cumulative negative impact of

approximately €2.9billion on Vivendi’s ﬁnancial position.

1.2.2. EXCHANGE RATE RISK

Management of the group’s exchange rate risk is centralized within

VivendiSA’s Finance and Treasury Department for all its controlled

subsidiaries, except in circumstances where a newly acquired subsidiary is

authorized, during a transition period, to continue to carry out foreign

exchange spot transactions or standard currency hedges. This policy mainly

seeks to hedge budget exposures (80%) related to monetary flows

generated by operations in currencies other than the euro, as well as

external ﬁrm contractual commitments (100%), which is essentially related

to the acquisition of editorial content (sports, TV and ﬁlm rights), and certain

industrial capital expenditures (e.g., set-top boxes) made in foreign

currencies. Most of the hedging instruments are foreign currency swaps or

forward contracts that have a maturity of less than one year. Given the

exchange rate hedges in place, a uniform adverse change of 1% in the euro

against all foreign currencies in position as of December31, 2018 would

have a non-signiﬁcant cumulative impact on net earnings (approximately

€1million). In addition, the group may hedge foreign currency exposure

resulting from foreign-currency denominated ﬁnancial assets and liabilities.

However, due to their non-significant nature, net exposures related to

subsidiaries’ net working capital (internal flows of royalties as well as

external purchases) are generally not hedged and the associated risks are

settled at the end of each month by translating the amounts into the

functional currency of the relevant operating entities.

Additionally, the depreciation of the British pound (GBP) against the euro,

following the referendum held on June23, 2016 endorsing the United

Kingdom’s exit from the European Union (“Brexit”), mainly impacted

Universal Music Group’s revenues in 2017. In addition, Vivendi performed a

detailed analysis of the impact of interest and foreign exchange rate changes

on the group’s debt and ﬁnancial assets, as well as on pension funds, and a

report was submitted to Vivendi’s Audit Committee to that effect. As of the

date of this report, no signiﬁcant impact on Vivendi’s consolidated ﬁnancial

position has been recognized. Other potential effects that could impact the

group as a result of Brexit will be assessed when the terms of the United

Kingdom’s departure from the European Union are known.

1.2.3. INVESTMENT RISK AND COUNTERPARTY RISK

VivendiSA centralizes daily cash surpluses (cash pooling) of all controlled

entities (i) which are not subject to local regulations restricting the transfer

of ﬁnancial assets, or (ii) which are not subject to other agreements.

As of December31, 2018, the group’s cash position amounted to

€4,392million (compared to €2,026million as of December31, 2017), of

which €3,354million was held by VivendiSA (compared to €1,072million as

of December31, 2017).

Vivendi’s investment policy mainly aims to minimize its exposure to

counterparty risk. Consequently, Vivendi allocates a portion of the amounts

available within (i) mutual funds with a low risk class (1 or 2) as deﬁned by the

European Securities and Markets Authority’s (ESMA) synthetic risk and reward

indicator (SRRI) which comprises seven risk classes, and (ii) credit institutions

with high long-term or short-term credit ratings (at least A-(Standard & Poor’s)/

A3(Moody’s) and A-2(Standard & Poor’s)/P-2(Moody’s), respectively).

Moreover, Vivendi allocates investments among selected banks and limits the

amount of each such investment.

1.2.4. CREDIT RISK

Vivendi does not consider there to be a signiﬁcant risk of non-recovery of

trade accounts receivable for its business segments: the large individual

customer base and the broad variety of customers and markets, as well as

the geographic diversity of its business segments (mainly Universal Music

Group, Canal+ Group, Havas and Gameloft), enable Vivendi to minimize the

risk of credit concentration related to trade accounts receivable.

Havas provides advertising and communications services to a wide range of

clients operating in multiple industry sectors around the world. Havas

grants payment terms to all qualiﬁed customers. It does not believe it is

exposed to any undue concentration of credit risk related to either a speciﬁc

country or client. Consequently, the concentration of credit risk and

accounts receivable is limited. In 2015, Havas selected a leading credit

insurer to cover its main client credit risks worldwide. This credit insurance

cover began in July2015 and continued since then, including in 2018.

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1.3. Legal risks

RISKFACTORS

1.2.5. INTEREST RATE RISK

Vivendi’s interest rate risk management seeks to reduce its net exposure to

interest rate increases. Therefore, Vivendi uses, if needed, pay-ﬂoating and

pay-fixed interest rate swaps. These instruments enable the group to

manage and reduce volatility for future cash flows related to interest

payments on borrowings.

1.2.6. LIQUIDITY RISK

As of February11, 2019 (the date of Vivendi’s Management Board meeting

that approved the Consolidated Financial Statements for the year ended

December31, 2018), Vivendi considers that the cash ﬂows generated by its

operating activities, its cash surpluses, net of the cash used to reduce its

debt, as well as the cash available through undrawn bank credit facilities

will be sufﬁcient to cover its operating expenses and investments, its debt

service (including redemption of bonds), the payment of income taxes, the

distribution of dividends and any potential share repurchases made under

existing corporate authorizations, as well as its investment projects, if any,

for the next 12 months.

For a detailed analysis of market risks (interest rates, foreign exchange

rates, market liquidity and stock prices), see Notes12, 13, 14 and 19 to the

Consolidated Financial Statements for the year ended December31, 2018 in

Chapter4 of this Annual Report.

1.3. Legal risks

1.3.1. RISKS ASSOCIATED WITH REGULATIONS

APPLICABLE TO THE GROUP’S OPERATIONS

In the ordinary course of its business, Vivendi must comply with complex,

restrictive and evolving regulations, particularly those governing the

broadcasting and communication sectors.

Substantial changes in the legislative environment and the application or

interpretation of regulations by the French Competition Authority or by

administrative, judicial or other authorities, particularly with respect to

competition law and tax law, may result in Vivendi incurring additional costs

or altering the products and services it offers, which may materially impact

its business, ﬁnancial position, results and development prospects.

In addition, certain operations of the group are dependent on obtaining or

renewing licenses issued by regulatory authorities such as the Conseil

supérieur de l’audiovisuel in France (French Broadcasting Authority). The

process of obtaining or renewing these licenses can be long, complex and

costly. Pursuant to Article40 of Law No.86-1067 of September30, 1986 on

freedom of communication, no more than 20% of the share capital or voting

rights of a company holding a license for a French language television

service can be held, either directly or indirectly, by one or more non-French/

non-EU shareholders. Consequently, Canal+ Group, the wholly-owned

Vivendi subsidiary that holds 100% of Société d’Édition de Canal Plus

(SECP), is authorized to broadcast Canal+ and the C8, CStar, CNews and

Planète channels, which are also wholly-owned. The analysis carried out by

Vivendi and its legal advisers of the relevant legal provisions, and the

interpretation of them by the Conseil d’État (French Council of State) in its

Administrative Notice of June27, 2002, have led Vivendi to conclude that if

the combined interests of non-French/non-EU shareholders were to exceed

20% of the share capital or voting rights of Vivendi, which indirectly holds a

broadcasting license, this could constitute a breach of the provisions of the

aforementioned Article40. Vivendi’s ability to achieve its strategic

objectives may be impaired if it is unable to obtain or retain in a timely

manner the licenses required to conduct, continue or expand its operations.

For a detailed description of the regulatory environment in which the group

operates, see Section3 of Chapter1 of this Annual Report.

1.3.2. LITIGATION RISKS

The group is, or could become, involved in a numberof lawsuits or investi-

gations initiated by shareholders, consumers, business partners,

competitors, artists, and third parties – particularly in the communications

industry – or regulatory and tax authorities. In some of these cases, if

Vivendi fails to negotiate an amicable settlement, it may be ordered to pay

damages or ﬁnancial penalties.

For a description of the main disputes and investigations involving the

group, see Note23 to the Consolidated Financial Statements in Chapter4 of

this Annual Report.

Vivendi recognizes a provision each time a risk is identified, is likely to

materialize and is either quantiﬁable or can be estimated with reasonable

accuracy. At any time during such legal proceedings, events may occur

which result in a reassessment of the risk. With the exception of the main

legal proceedings and investigations described in Note23 to the

Consolidated Financial Statements (see Chapter4 of this Annual Report),

Vivendi considers it unlikely that current legal proceedings will have a

material adverse impact on the group’s ﬁnancial position.

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2.1. Internal control procedures

INTERNALCONTROLANDRISKMANAGEMENT

Section 2

Internalcontrolandriskmanagement

2.1. Internal control procedures

Vivendi strives to maintain the highest standards of internal control and

ﬁnancial disclosure. To further this objective, the Financial Information and

Communication Procedures Committee meets regularly (ﬁve times in 2018).

This committee assists the Chairman of the Management Board and the

Chief Financial Ofﬁcer in their duties to ensure that Vivendi fully complies

with its disclosure obligations to investors, the public and the French

regulatory and market authorities. It is chaired by the General Counsel and

is comprised of representatives from all of the company’s corporate

operational departments.

It is responsible for the assessment of information which Vivendi is required

to make publicly available and includes: (i) periodic information, including

disclosure of documents to investors and ﬁnancial markets in compliance

with French ﬁnancial market regulations, (ii) press releases related to half-

yearly ﬁnancial results, and (iii) presentations to investors and analysts.

For a description of the functions and activities of this committee in 2018,

see Section1.2.10.6 of Chapter3 of this Annual Report.

2.1.1. DEFINITION AND OBJECTIVES

OFINTERNALCONTROL

The company manages internal control through a set of procedures

established by Vivendi’s Management Board and implemented by its

employees to ensure that the following objectives are met:

3 compliance with laws and regulations as well as adherence to the

group’s corporate values;

3 the implementation of guidelines and strategies established by the

Management Board;

3 the prevention and monitoring of operational and ﬁnancial risks as

well as the management of the risk of error, risk of fraud, risk to the

company’s reputation and risks associated with corporate social

responsibility;

3 the optimization of internal processes to ensure the effectiveness of

operations and efﬁcient use of resources; and

3 the completeness and accuracy of accounting, ﬁnancial and man-

agement information.

Since Vivendi’s delisting from the New York Stock Exchange and the

termination of its registration with the U.S. Securities and Exchange

Commission (SEC) in 2007, Vivendi has worked with its Statutory Auditors

to gradually update its objectives and general principles of internal control,

which are largely based on the framework established by the AMF and its

recommendations.

These principles are based on:

3 promoting a culture of internal control and principles of integrity;

3 the identification and analysis of risk factors that may adversely

impact the achievement of the group’s objectives;

3 the organization and establishment of procedures aimed at ensuring

the implementation of the goals set by the Management Board;

3 the periodic review of control measures and an ongoing search for

areas of improvement; and

3 the process of sharing information relating to internal control.

However, as with any system of control, the application of these principles

cannot provide absolute certainty that all risks will be completely eliminated

or brought under control.

2.1.2. SCOPE OF INTERNAL CONTROL

Vivendi is currently organized into six business units (Universal Music

Group, Canal+ Group, Havas, Gameloft, Vivendi Village(1) and Dailymotion).

Each of these entities must implement the strategies set by the Manage-

ment Board, including internal control objectives. Each entity has a tailored

set of internal control measures that includes the implementation of the

group’s procedures and the deﬁnition and implementation of procedures

speciﬁc to each business unit, depending on its organization, culture, risk

factors and operational requirements. As the parent company, Vivendi

ensures the internal control measures in question exist and adequately

address the needs of each entity, particularly with respect to the accounting

and financial procedures applied by group entities that are fully

consolidated.

2.1.3. COMPONENTS OF INTERNAL CONTROL

Control environment

Rules of conduct and ethics applicable to all employees

Vivendi ensures that all aspects of corporate responsibility are considered

in the operation of its business. It has a Charter of Values that focuses on

consumers, value creation, teamwork, corporate social responsibility,

cultural diversity, creativity and ethics. Vivendi is a signatory to the United

Nations Global Compact.

(1) Vivendi Village includes Vivendi Ticketing, l’Olympia, the Théâtre de l’Œuvre, CanalOlympia, Vivendi Talents, Vivendi Sports, Olympia Production, Festival Production and Copyrights.

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2.1. Internal control procedures

INTERNALCONTROLANDRISKMANAGEMENT

A Compliance Program also sets general rules of ethics applicable to all

group employees regardless of their seniority and position. For a description

of the Compliance Program, which is currently being reviewed, see

Section3.2 below.

The protection of personal data remains a major concern for Vivendi.

Accordingly, the general counsels of the various business units and legal

departments within the group are aware of the need to update the latest

Charters on data and content protection and good practice guidelines for the

protection of sensitive data. Against this backdrop, in 2016, the group once

again reinforced these controls by appointing a Data Ofﬁcer who reports to

the Group General Counsel. Controls were further strengthened in 2017 by

the appointment of Data Ofﬁcers in each business unit. Section3.3 below

contains a detailed presentation of the measures taken to ensure the group’s

compliance with regulations regarding the protection of personal data.

Responsibilities and commitments

of each business unit’s General Management

Every six months, the Chairman and Chief Financial Ofﬁcer of each business

unit sign a representation letter certifying compliance with internal control

procedures linked to the preparation of ﬁnancial statements and ﬁnancial

and industry-based information that guarantees the accuracy, integrity and

reliability of ﬁnancial disclosure.

Upon the proposal of the Audit Committee, Vivendi has established a Code

of Financial Ethics that applies to VivendiSA senior executives responsible

for communications, and ﬁnancial and accounting reporting.

Rules on securities market ethics

Vivendi complies with the regulatory requirements of the European

Directive 2014/57 of April16, 2014 and European Regulation 596/2014 of

the same date, effective July3, 2016 (Market Abuse Regulation), the

positions and recommendations of the AMF published on October26, 2016

and the recommendations of the AFEP/MEDEF Code as revised in

June2018. Consequently, the purchase or sale of company securities is

prohibited during the period from the date on which a memberof the

Supervisory Board or the Management Board becomes aware of precise

market information concerning the company’s day-to-day business or

prospects which, if made public, would likely have a material impact on the

company’s share price, up to the date on which this information is made

public. In addition, such transactions are prohibited for 30 calendar days

preceding and including the day of publication of the company’s half-yearly

and annual financial statements and for a period of 15 calendar days

preceding and including the day of publication of the company’s quarterly

sales results. To ensure clarity, the company prepares and distributes a

summary schedule setting out the periods during which transactions

involving company shares are prohibited (“blackout periods”). Pursuant to

the AFEP/MEDEF Code, hedging transactions of any kind on the company’s

securities following the exercise of stock options are prohibited.

Blackout periods are the subject of individual reminders sent via e-mail

whenever necessary including before each identiﬁed Financial Reporting

period.

Delegation of powers

The delegation of operational powers, whether on a single occasion or on a

recurring basis, is one of the responsibilities of Vivendi’s Management

Board and of the General Management of each of the group’s business

units. These delegations of powers are updated and formalized on a regular

basis in accordance with the evolving role and responsibilities of the

relevant delegates.

Segregation of duties

A segregation of operating and financial duties is implemented both at

headquarters and in the group’s business units.

Human resources policy

The group’s human resources policy helps strengthen internal control

procedures, notably through a recruitment and promotion methodology that

is in line with the delegations of authority in place and based on an assess-

ment and remuneration system that uses predeﬁned criteria.

Compliance with laws and regulations

The Legal departments at headquarters and in the group’s business units

provide support to the key managers and employees involved to ensure that

they are aware of the applicable laws and regulations and informed, when

necessary, of any changes, so that the group’s internal procedures can be

kept up-to-date.

Internal processes contributing to asset protection

The IT departments at headquarters and in the group’s business units

implement backup and security procedures to ensure the quality and

security of operations, including in the event of a major incident.

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2.2. Risk monitoring and management

INTERNALCONTROLANDRISKMANAGEMENT

2.2. Risk monitoring and management

Vivendi’s Risk Committee is responsible for identifying and reviewing

measures to manage risks within business units that are likely to affect

achievement of the group’s objectives.

The assessment of risks at a group level is based on a qualitative and

quantitative approach within each business unit. In 2018, risk mapping was

updated at Canal+ Group, Universal Music Group and Gameloft, and risk

mapping was conducted at Dailymotion by the Audit and Risk department,

based on interviews held with senior and operating managers. These risk

maps, as well as those prepared by Havas, were then reviewed by the heads

of the business units, the Risk Committee, Vivendi’s Management Board and

the Statutory Auditors, and presented to Vivendi’s Audit Committee.

The major risks faced by the company are described in Section1 of this chapter.

Vivendi’s General Counsel and Legal department are responsible for the

prevention and management of risks relating to ethics, competition and

conﬂicts of interest. Financial risks, including liquidity, credit and market

risks, are managed by Vivendi’s Finance, Risk Management and Treasury

department through a centralized organization at the company’s headquar-

ters.

Operational risks are managed by each business unit, taking into account

the speciﬁc characteristics of their operations (e.g., regulatory risks in the

pay-TV business, risks associated with infringement of intellectual property

rights in the music, publishing and communication businesses and risks

associated with piracy and counterfeiting in the ﬁlm and music businesses).

The policy of covering insurable risks, such as the risk of damage and

operating losses from accidents, natural disasters and civil liability risks, is

monitored by Vivendi’s Insurance Department in collaboration with the

Finance department and the General Counsel. For a description of the

current insurance programs, see Chapter1 of this Annual Report.

In 2018, all the documents submitted to the Risk Committee were brought

to the attention of the Statutory Auditors. The Statutory Auditors also

receive, at the meetings of the Audit Committee, a summary of the work

done by the Risk Committee.

2.2.1. INTERNAL CONTROL ACTIVITIES

Control operations are performed primarily by the functional and operational

management teams in accordance with existing reference procedures.

The following bodies ensure the monitoring of internal control measures:

Supervisory Board

Vivendi’s Supervisory Board ensures the effectiveness of the internal control

and risk management measures deﬁned and implemented by the Manage-

ment Board. If necessary, the Supervisory Board may use its general powers

to carry out any actions or conduct investigations it deems appropriate.

Audit Committee

The Audit Committee comprises independent members of the Supervisory

Board. Pursuant to the powers conferred upon it, the Audit Committee

prepares the decisions of the Supervisory Board and provides recommenda-

tions and issues opinions to the Supervisory Board on a wide range of

matters. In February2018, upon the proposal of its Chairman, the Audit

Committee reviewed and made improvements to its multi-year program.

This program notably includes:

3 the half-year Consolidated Financial Statements and annual ﬁnancial

statements of VivendiSA, prepared by the Management Board;

3 a report on quarterly activity;

3 a review of impairment tests;

3 a review of the company’s ﬁnancial management (debt, investments

and foreign exchange);

3 the assessment and coverage of operational and ﬁnancial risks;

3 a review of pension commitments;

3 changes in accounting standards, methods and accounting principles,

the company’s scope of consolidation and the company’s off-balance

sheet commitments;

3 the consistency and effectiveness of internal control procedures and

a review of this report;

3 the Internal Audit report;

3 tax-related risks;

3 major legal proceedings including legal and regulatory issues;

3 insurance policies;

3 the CSR policy;

3 material internal control weaknesses and corruption and fraud cases

where applicable; and

3 the appointment and compensation of the Statutory Auditors.

A report is systematically presented by the Chairman of the Audit Commit-

tee to Vivendi’s Supervisory Board and sent to every memberof the Audit

Committee and Supervisory Board.

Vivendi’s Audit Committee long ago established a specific procedure to

control or limit engagements in respect of “Non-Audit Services” (NAS)

entrusted to the auditors, in accordance with a pre-approved procedure and

speciﬁc reporting:

3 all NAS engagements must be pre-approved by the Chairman of the

Audit Committee. However, by exception, the Chairman of the Audit

Committee may delegate the pre-approval of NAS engagements

with a unit value of less than €500,000 to the Senior Vice President–

Group Consolidation and Financial Reporting; and

3 at each meeting of the Audit Committee, the Senior Vice President –

Group Consolidation and Financial Reporting reports to the Audit

Committee on the list (e.g., type, amount and auditor in question) of

NAS engagements pre-approved by the Chairman of the Audit

Committee, as applicable, or by the Senior Vice President – Group

Consolidation and Financial Reporting since the last meeting of the

Audit Committee.

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2.2. Risk monitoring and management

INTERNALCONTROLANDRISKMANAGEMENT

In practice, Vivendi caps NAS engagements at 20-25% of statutory audit fees.

In 2018, Vivendi’s Audit Committee met four times, with an attendance rate

of 100%. For a description of its work, see Section1.1.1.13 of Chapter3

ofthis Annual Report.

Management Board

The Management Board is responsible for defining, implementing and

monitoring internal control and risk management procedures that are both

suitable and effective. If a problem arises with any of these measures, the

Management Board ensures that the necessary corrective action is taken.

Risk Committee

The Risk Committee is chaired by the Chairman of Vivendi’s Management

Board and has the following permanent members: the Management Board

members, the Senior Vice President for Audit and Risk, the Head of Legal

Affairs, the Vice President for Corporate Social Responsibility and

Compliance and the Head of Insurance. Business unit representatives are

invited to committee meetings depending on the agenda. A report on the

work of the Risk Committee is presented to the Audit Committee of Vivendi’s

Supervisory Board.

The role of Vivendi’s Risk Committee is to make recommendations to the

Management Board in the following areas:

3 the identification and assessment of the risks potentially arising

from activities carried out within the Vivendi group, such as social

and environmental risks, risks related to compliance with laws and

regulations, risks relating to ethics, competition and conflicts of

interest, and risks related to the security of information systems;

3 the examination of the adequacy of the risk coverage and the level

of residual risk;

3 the review of insurable risks and the insurance program; and

3 the identiﬁcation of risk factors and forward-looking statements in the

documents issued by the group, in collaboration with the Compliance

Committee.

The Risk Committee met twice in 2018. The main topics covered include the:

3 monitoring of the risks identiﬁed during the risk mapping process

carried out in 2017 and review of the new risk maps prepared in

2018 at UMG, Canal+, Havas, Gameloft and Dailymotion;

3 raising of awareness of information security issues;

3 review of cybersecurity issues and IT security;

3 review and monitoring of the risks identified in the group’s risk

mapping;

3 creation of a Compliance Audit team, reporting to the Audit and Risk

department, responsible for monitoring the various compliance

measures undertaken within the group and raising awareness of the

group’s best practices among the operating teams most affected;

and

3 review and monitoring of insurance policies.

Management Committees

Each division presents the operating and ﬁnancial indicators for all of the

activities within its scope to the Management Board and the group’s

corporate operational departments monthly.

Audit and Risk Department

The Vivendi Audit and Risk department (15 auditors for ﬁnancial audits and

external resources for IT audits) reports to the Chief Financial Officer of

Vivendi. It is responsible for independently assessing the quality of internal

controls at every level of the organization. Its activities are governed by a

Charter approved by the Audit Committee. In addition, Havas has an Audit

Committee and an audit team comprising a Director and ﬁve auditors.

The Audit and Risk department is responsible for performing an independent

assessment of the effectiveness of internal control processes, based on an

annual audit plan approved by the group’s Management Board and

presented to the Audit Committee. This plan stems from both an

independent analysis of the operational, IT, legal and ﬁnancial risks of each

business unit and a consultation with the General Management of each

business unit. Reports on the audit work carried out are sent to Vivendi’s

General Management, as well as to operational and functional manage-

ment and their superiors. Summary reports are presented at each Audit

Committee meeting along with any comments made by the Statutory

Auditors. Follow-up audits are performed within 12months to ensure that

recommended action plans and agreed corrective measures (if any) have

been implemented. A half-yearly internal audit report is presented to the

Management Board and the Supervisory Board.

The group may encounter cases of fraud in connection with its operations

which, as soon as they are identiﬁed, are systematically reported to the

Audit Committee. They may also be the subject of special investigations

and may result in penalties.

In 2018, a Compliance Audit team reporting to the Audit and Risk depart-

ment was set up as part of the roll-out of the anti-corruption and duty of

vigilance programs. It contributes to disseminating best practices within the

group.

2.2.2. INTERNAL CONTROL MONITORING

The work performed by the Statutory Auditors as part of their review and

assessment of internal control is described in a detailed presentation to the

General Management of the business units concerned. A summary of their

conclusions was presented to Vivendi’s Audit Committee.

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2.3. Key procedures for ﬁnancial and accounting information

INTERNALCONTROLANDRISKMANAGEMENT

2.3. Key procedures for ﬁnancial and accounting information

The procedures listed below help reinforce internal controls regarding the

processing of ﬁnancial and accounting information disclosed by Vivendi. In

updating these procedures, the provisions of the guide on applying internal

control procedures in relation to financial disclosures, contained in the

internal control standards published by the AMF, were taken into account.

Consolidation and Financial Reporting: the group’s Consolidated Financial

Statements and its Financial Reports are prepared in accordance with IFRS

accounting standards (International Financial Reporting Standards), based on

accounting data prepared by the management for each business unit. The

IFRS standards used are those adopted by the European Union, published by

the IASB (International Accounting Standards Board) and compulsory at the

end of the accounting period, except in the event of early application. The

principal aspects linked to the preparation of the Consoli dated Financial

Statements and the Financial Report are subject to specific procedures.

These include an impairment test on goodwill and other intangible assets

held by the company, carried out during the fourth quarter of each ﬁscal year,

the valuation of employee beneﬁts, duties and taxes (see below) and off-

balance sheet commitments. The Consolidated Financial Statements and the

Financial Report are closed and approved by the Management Board each

half-year and are then reviewed by the Audit Committee. The annual and

half-year Consolidated Financial Statements and Financial Report are

reviewed by the Supervisory Board, which consults with the Audit

Committee. The statements and report are published every six months. The

Consolidated Financial Statements are subject to a limited half-yearly review

and an annual audit by the group’s Board of Statutory Auditors.

Budget and management control: every year, each business unit presents its

strategy and annual budget for the following year to the group’s General

Management. After approval by Vivendi’s Management Board, a summary

is then presented to the Supervisory Board and to the Audit Committee.

Quantitative and qualitative targets used as a basis to assess annual

performance are then set for each business unit’s management. Budgets are

reviewed each month and updated three times per year.

Investments/divestments: any investments or divestments must receive

prior approval from the Investment Committee, which comprises the

Chairman and members of the Management Board, key managers at

headquarters and the Chief Operating Ofﬁcers and Chief Financial Ofﬁcers

of the business units. This procedure applies, subject to speciﬁc thresholds,

to all investment transactions (e.g., acquisitions of businesses or equity

interests, the launch of new businesses through joint ventures or alliances

with minority partners, license agreements, and the purchase of rights) and

to all divestitures of a subsidiary, an equity interest or an intangible asset.

The Investment Committee meets twice a month. Cases are reviewed by

the Finance department. Any transaction involving amounts greater than

€100million and €300million must receive the prior approval of the

Management Board and the Supervisory Board, respectively, pursuant to

their Internal Regulations.

Monitoring of investment transactions: in connection with the regular

monitoring of value creation, Vivendi’s Management Board has strength-

ened the process of carrying out a post-completion analysis of investment

transactions, supplementing the existing budgetary reviews and half-yearly

Financial Reporting. The purpose of this analysis is to validate the imple-

mentation of controls as well as compare the actual ﬁnancial performance

against the business plan originally approved for the acquisition. It takes

into account both the progressive integration of companies acquired by the

business units and the impact of changing market conditions following the

acquisition date. Vivendi’s Audit and Risk department reviews the conclu-

sions, which are then presented to Vivendi’s General Management and, for

major action plans, to the Management Board. An annual summary is pre-

sented to Vivendi’s Audit Committee.

Monitoring of ﬁnancial commitments: as part of the Financial Reporting

process, the business units prepare a list of commitments given and

received on a half-yearly basis. These commitments are presented by the

Legal and Financial Ofﬁcers of the business units at meetings held with

Vivendi’s Management, which take place as part of the closing process for

the annual financial statements. They are also presented to the Audit

Committee once a year.

Sureties, endorsements and guarantees: pursuant to the company’s by-laws

and the Internal Regulations of the Supervisory Board, the granting of

sureties, endorsements and guarantees by Vivendi to its subsidiaries is

subject to prior approval in accordance with the following rules:

3 any commitment equal to or less than €300million, which is part of

an aggregate commitment of €1billion, is subject to the approval of

the Management Board, which may delegate such power. The

approval requires the signatures of both the Chief Financial Ofﬁcer

and the General Counsel, who may delegate this power; and

3 any commitment higher than €300million and any commitment,

regardless of the amount, where the cumulative amount of

commitments is higher than €1billion, is subject to the approval of

the Supervisory Board. The approval requires the signature of the

Chairman of the Management Board.

Cash ﬂow, ﬁnancing and liquidity: VivendiSA has an international cash pooling

arrangement which enables it to centralize the cash surpluses and shortages of

its controlled subsidiaries on a daily or weekly basis. Vivendi’s investment

management policy is aimed at minimizing and diversifying its exposure to

counterparty risk with low-risk mutual funds (fonds commun de placements)

and commercial banks that have high credit ratings. VivendiSA also centralizes

hedge transactions (both exchange and interest rates) for all its controlled

subsidiaries, except in certain cases where a subsidiary is authorized, during a

transition period, to continue to carry out foreign exchange spot transactions or

standard currency hedges. The cash positions of business units, the weekly

variations in cash ﬂow and the cash ﬂow forecasts over 13 rolling months are

monitored on a bi-monthly basis by a Treasury Committee. Exposure to foreign

exchange and interest rate risk is reported monthly to the Treasury Committee,

it being specified that foreign exchange positions are monitored daily. The

majority of medium- and long-term financing transactions are managed at

headquarters and are subject to the prior approval of the Management Board

and Supervisory Board, in accordance with their Internal Regulations. A

ﬁnancial management presentation is made to the Audit Committee at least

once a year. Monthly reporting on the net financial cash position, to the

Chairman of the Supervisory Board and the Management Board, is

supplemented by regular budget forecasting of cash flow for the year. The

monthly update on the net ﬁnancial cash position is provided to members of

the Supervisory Board in a monthly activity report. As part of the half-yearly

procedure for approving Vivendi’s consolidated accounts, the Financing and

Treasury department reviews and approves all the notes to the Consolidated

Financial Statements relating to cash, debt and ﬁnancial risks.

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2.5. Outlook

INTERNALCONTROLANDRISKMANAGEMENT

Taxes: the VivendiSA Tax department also provides advisory services for

the group’s subsidiaries and defends their tax interests before the local tax

authorities.

Litigation: major disputes are monitored directly or coordinated by the

group’s General Counsel. A report relating to litigation involving Vivendi and

its business units is prepared by the group’s legal department in

collaboration with the general counsels and heads of the legal departments

of the main business units. A table is updated every month based on

information provided by the business units and is communicated to the

Management Board and Supervisory Board. A summary is included in the

Management Board’s quarterly business report to the Supervisory Board

and the Audit Committee is notified. The Supervisory Board, Audit

Committee and Management Board are kept informed of material ongoing

litigation matters by the General Counsel at all times.

2.4. Information and communication

The group’s values, Anti-Corruption Code, Compliance Program, Data and

Content Protection Charter and CSR policy are made available to employees

and to the public on the Vivendi website at www.vivendi.com.

Group procedures designed to assist with the preparation of financial and

accounting information are updated once a year and are available in French

and English on the group’s Intranet site. These procedures, which must be

applied by each of the business units and headquarters, include: the IFRS

accounting principles and the IFRS-compatible chart of accounts for the Vivendi

group; the principles and procedures applicable to treasury transactions

(banking relationships, foreign exchange and finance/investment); the

procedures applicable to investment transactions, sales of assets, short-term

and long-term financing transactions, the monitoring of disputes, the

monitoring of sureties, endorsements and guarantees; and the rules relating to

the prior approval of assignments entrusted to the Statutory Auditors of

VivendiSA.

Training materials relating to the application of IFRS standards within the

group are available online and are accessible to all employees. Training is

organized each year by the Corporate Consolidation and Financial Reporting

department at headquarters.

2.5. Outlook

In 2019, Vivendi will continue to assist its business units with regard to

internal control and related responsibilities. In particular, it will focus on the

integration of Editis, including carrying out risk mapping using group

methodology, and implementing group procedures. The new compliance

team will continue in its efforts relating to internal control. Five principal

themes (securing sources of revenue and revenue assurance, operating cost

control, raising teams’ awareness of external fraud and implementing

controls to limit such fraud risks, IT security and data protection) will

continue to be the focus of a cross-disciplinary initiative by the Audit and

Risk department.

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3.1. Anti-corruption policy

COMPLIANCEPOLICY

Section 3

Compliancepolicy

Vivendi conducts its operations with strict respect to national and

international regulatory standards. This approach is shared by all employees

of the group and its business partners and is documented in the compliance

policy that has been rolled out at all subsidiaries since 2016. As part of the

roll-out of this policy, the Management Board set up a Compliance

Committee in the fourth quarter of 2018. The Committee is responsible for

measures and procedures to identify and prevent risks as required by Law

No.2016-1691 of December9, 2016 (referred to as the Sapin II Act), Law

No.2017-399 of March27, 2017 on the duty of vigilance and EU General

Data Protection Regulation No.2016/679. It works closely with the Risk

Committee to fulﬁll these responsibilities.

The Compliance Committee is composed of a minimum of ﬁve members: the

Vice President – Corporate Social Responsibility and Compliance, the group

Head of Legal Affairs, the Chief Data Ofﬁcer, the Head of Compliance Audit

and the Head of Integrated Reporting and Compliance Projects. It is chaired

by the Group Chief Compliance Ofﬁcer.

The Compliance Committee meets at least twice a year. Its function is to

make recommendations to the Management Board and prepare its

decisions or issue opinions, particularly with regard to the implementation,

roll-out and monitoring of the vigilance and anti-corruption policy and the

personal data protection program.

In addition, the group’s Ethics Code, which brings together the principles

and rules of conduct applicable to the group and its employees, is currently

being reviewed.

3.1. Anti-corruption policy

The fight against corruption is one of the components of Vivendi’s

compliance policy and was a primary focus for the group and all its

subsidiaries in 2018.

3.1.1. ANTI-CORRUPTION POLICY GOVERNANCE

The Compliance Committee monitors the implementation and roll-out of the

compliance policy as a whole, particularly anti-corruption measures for the

group’s activities. It makes recommendations to the Management Board

with regard to compliance risk management.

The anti-corruption policy is rolled out under the supervision of the Group

Chief Compliance Ofﬁcer. The Group Chief Compliance Ofﬁcer coordinates

the implementation of the policy’s measures in the subsidiaries, working

alongside Compliance Ofﬁcers and compliance contacts in each business

unit. The Group Chief Compliance Ofﬁcer reports to the Audit Committee

and Risk Committee, which is responsible for monitoring compliance with

the anti-corruption policy.

3.1.2. ANTI-CORRUPTION POLICY MEASURES

Roll-out of the main components of the policy in the business units began in

2018 and will be completed in 2019 to manage and control non-compliance

risks in line with the rules in place.

Anti-Corruption Code

Vivendi’s Anti-Corruption Code addresses situations identiﬁed during the

risk mapping process and sets out a code of conduct. This code applies to

all Vivendi group employees. To this end, the Anti-Corruption Code was

translated into 20 languages. It takes into account applicable local rules and

regulations in countries where the group is present, particularly the Foreign

Corrupt Practices Act (FCPA) in the United States and the UK Bribery Act.

Universal Music Group’s Code of Conduct, which sets out certain provisions

for the prevention of corruption in line with US regulations, has been

retained in its subsidiaries and amended with speciﬁc requirements imposed

by the Sapin II Act.

Risk mapping

Risks are identiﬁed through an analysis conducted with operational ofﬁcers

at subsidiaries, based on a questionnaire and interviews. The risks are then

prioritized and will be subject to an additional review in 2019.

Whistleblowing procedure

An internal whistleblowing system has been available to group employees

since the issue of the Anti-Corruption Code. The whistleblowing platform is

dedicated to cases of corruption as deﬁned by the Sapin II Act. It describes

the rights and responsibilities of whistleblowers. A detailed procedure has

been put in place for analyzing the seriousness and severity of the alert and

the investigations are likely to be instigated as a result.

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3.2. Duty of vigilance program

COMPLIANCEPOLICY

Employee training

An online mandatory training module dedicated to anti-corruption issues

was implemented to help employees gain a better understanding of at-risk

behavior and best practices. Classroom sessions were organized in certain

countries and they will continue in 2019.

Assessment procedures

Accounting control procedures have been thoroughly reviewed in all the

group’s subsidiaries. Existing procedures and documentation have been

analyzed by the Finance departments, coordinated by the designated

ﬁnancial compliance contacts. An action plan to consolidate the control

processes has been rolled out.

Vivendi also intends to set up a process to assess the integrity of third

parties in business relationships with the group. A study to choose an

analysis tool compatible with the group’s existing indexing tools will be

carried out in 2019.

Review of anti-corruption policy measures

An audit plan is in the process of being ﬁnalized. It will focus in particular

on the implementation of the anti-corruption policy in group entities. In

2019, the Compliance Audit team will regularly report on the progress of its

work to the Risk Committee and Audit Committee.

3.2. Duty of vigilance program

The program is based on the set of rules from the Compliance Program,

which is currently being reviewed. It takes into account regulations related

to the duty of vigilance of parent companies and principal contractors. It

applies to all group subsidiaries and is based on a set of reasonable

measures aimed at identifying and preventing serious risks and infringe-

ments on human rights, fundamental freedoms and health and safety in the

activities of the group, its suppliers and its subcontractors.

3.2.1. IMPLEMENTATION OF THE VIGILANCE PROGRAM

The program relating to vigilance obligations is managed by the Compliance

Committee, which ensures that the measures taken adequately address the

risks identiﬁed and that they are properly applied with respect to the group’s

various stakeholders. The CSR and Compliance department implements

vigilance measures relating to the group’s activities in collaboration with CSR

contacts in the subsidiaries. Vigilance measures with respect to the group’s

business partners are run by the subsidiaries’ Purchasing departments.

The Audit Committee and Risk Committee jointly monitor the deployment of

the program. Priority areas in the supplier and subcontractor chain identiﬁed

through the vigilance process and the related action plans will be

communicated to the members of the Committees in 2019.

The Compliance Audit team is involved in reviewing the proper implementa-

tion of the measures provided for by the program. Work on this began in

2018.

3.2.2. THE NEW GROUP ETHICS CODE

As part of the overhaul of the Compliance Program, which began in 2018, a

wider consultation with group stakeholders will be set up to incorporate

issues relating to human rights and fundamental freedoms, health and

safety and the environment.

The Anti-Corruption Code and the personal data protection policy are

directly linked to the group Ethics Code.

The group Ethics Code also invites subsidiaries to deﬁne their own ethics

rules to meet the standards of their business sector. A numberof internal

charters are already in place in some entities. A harmonization process will

be carried out to ensure that the principles set out in these internal

documents are aligned with the group Ethics Code.

3.2.3. RISKS AND AREAS FOR VIGILANCE

IDENTIFIEDINTHE VIGILANCE PROGRAM

Two approaches were used in assessing risks linked to vigilance obliga-

tions: firstly, an assessment of the vigilance risks associated with the

group’s activities, which was carried out as part of the process assessing

non-ﬁnancial risks; and secondly, an assessment of the chain of suppliers

and subcontractors used by the group in producing and distributing its

products and services, which was carried out based on an analysis jointly

with the Purchasing departments in the various entities.

Identiﬁcation of the risks resulting

from the group’s activities

The group has analyzed the risks associated with its activities, taking into

account Vivendi’s human rights policy. The group has established its

commitment to ensuring respect for human rights in its content production

and distribution business. Supporting creativity, publishing, undertaking to

act as a responsible cultural player and promoting diversity and inclusion fall

within the realm of human rights, as described in many documents

promulgated by the United Nations, particularly Unesco’s Universal

Declaration on Cultural Diversity, the Guiding Principles on Business and

Human Rights, and the agenda of Sustainable Development Goals for 2030.

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3.2. Duty of vigilance program

COMPLIANCEPOLICY

As well as human rights, this analysis focused on health, safety and envi-

ronmental issues. For a description of this analysis, see Section4 of

Chapter1. For a presentation of Vivendi’s proposals for managing these

risks, see this Sectionof this chapter.

Identiﬁcation of areas for vigilance resulting

from the activities of suppliers and subcontractors

In 2018, the supplier and subcontractor chain was reviewed alongside a

review of the subsidiaries’ Purchasing departments, giving rise to a detailed

assessment of issues relating to the group’s purchasing policy.

This review focused on: the scope of purchasing and the existing policy; the

analysis and assessment of the data collected; and the creation of a

numberof action plans. It covered the entire supply chain, except for UMG,

which already has procedures in place under its Supplier Vigilance Program

(see details on UMG’s Global Vendor Management Ofﬁce below).

The collection and centralization of key data for each major family or

category of purchases (e.g., total expenses incurred, numberof suppliers

involved and procedures put in place along the supply chain) allowed the

group to carry out an initial assessment and identify the following areas for

vigilance:

3 the scope of content purchases;

3 the application of vigilance measures in purchases of advertising

space; and

3 the strengthening of vigilance measures for purchases of electronic

equipment.

In 2019, particular attention will be paid to these areas, which will be

presented to the Risk Committee along with the associated action plans,

which will be rolled out in the business units to improve risk management

along the supplier chain. These action plans will be structured around four

key priorities:

3 the alignment of purchasing policies in the business units;

3 an update of compliance clauses in purchasing and service agreements;

3 the implementation of a tool to assess suppliers and subcontractors;

and

3 the setting out of monitoring indicators.

These action plans will also help raise the awareness of the group’s business

partners to the group’s compliance policy.

At UMG, the Global Vendor Management Ofﬁce (VMO) is responsible for the

purchasing policy for suppliers and subcontractors. It has a CSR Policy in

place and a Supplier Vigilance Program, which provides for regular meetings

between the VMO and Bravado, the subsidiary responsible for merchandising

activities.

In line with the VMO’s principles, Bravado has also issued a set of internal

documents (Manufacturer’s agreement, Vendor Compliance Guide to UK

and US vendors) setting out commitments and requirements for its

suppliers. Among other points, suppliers are required to provide a complete

list of their subcontractors with a view to ensuring transparency along the

supply chain.

In 2018, the VMO evaluated 102 first-tier suppliers, an increase of 40%

compared to the previous year. The department also assessed contract

lifecycle management software in collaboration with operational

departments. To communicate and promote its principles, the VMO has

worked with UMG’s Global Procurement department to develop an internal

platform to share resources relating to governance and best practices. The

VMO and Global Procurement teams will continue work on this platform in

2019, meeting several times a month to share best practices and encourage

new initiatives.

3.2.4. WHISTLEBLOWING SYSTEM

Having launched its whistleblowing platform in 2018 as part of its anti-

corruption measures, Vivendi plans to add to the procedure in 2019 by

rolling out a speciﬁc system for alerts on situations relating to the group’s

vigilance commitments.

3.2.5. MONITORING OF THE VIGILANCE PROGRAM

In 2018, the Compliance Audit team began a review of the compliance of

French subsidiaries with legal provisions on inter-company payment times,

which will continue in 2019.

110

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3.3. Personal data protection

COMPLIANCEPOLICY

3.3. Personal data protection

Managing personal data is a key issue in the Vivendi group’s businesses.

The group takes careful steps to ensure that personal data protection rules

are applied to secure the trust it has built with its audiences. In particular,

this vigilance became formalized when the group adopted its Data and

Content Protection Charter in 2008, which covers rules pertaining to the

collection and management of customers’ personal data and the protection

of content.

Fully recognizing the importance of this issue for the group, Vivendi’s

General Management planned for all subsidiaries to participate in a GDPR

compliance program overseen by the group’s General Counsel, coordinated

by its Chief Data Ofﬁcer and rolled out at subsidiaries by Data Protection

Ofﬁcers from 2017.

A speciﬁc governance system was deﬁned for this compliance program,

with operational steering committees at each business unit and a central

group committee. Every quarter, the group committee meets with the

General Counsel, Data Protection Ofﬁcers, and representatives from the

Programs department and from the departments affected by the application

of GDPR, such as legal, technical and security departments. Its role is to

centralize the monitoring of projects underway at entities, deﬁne priorities

and oversee the work of cross-business focus groups (e.g., HR and subcon-

tractor agreements).

Following GDPR’s entry into force in May2018, Vivendi decided to turn the

group committee responsible for the compliance program into a Data

Protection Committee, reporting to the group’s General Counsel, responsible

for laying the foundations for more extensive governance of data issues,

directing Privacy and Security compliance and promoting associated

initiatives within the business units.

The priority action plans for GDPR compliance were rolled out in 2018 in

each business unit according to group guidelines (responsibilities, exercise of

personal data rights, updating contract terms and conditions and harmonizing

privacy notices on the group’s websites and mobile applications). The

associated resources have also been reinforced with the appointment of

Data Protection Ofﬁcers and representatives in charge of personal data. In

addition, e-learning platforms with training modules on personal data

protection have helped raise awareness among employees on a wider scale.

Lastly, the group is continuing to take steps to increase its policies’

effectiveness, particularly through effectiveness audits, indicator tests, and

by making the “privacy and security by design” approach systematic in all

its initiatives involving personal data, both in-house and with its partners

and suppliers.

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CRÉATIONS ORIGINALES, CANAL+

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Hippocrate

Le Bureau des Légendes

Corporate Governance of Vivendi,

CompensationofCorporateOfﬁcersofVivendi,

GeneralInformationabouttheCompany

CORPORATE GOVERNANCE OF VIVENDI 114

1.1. Administrative, management and supervisory bodies 116

1.2. Management Board 137

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

150

2.1. Compensation policy for Corporate Ofﬁcers of Vivendi for 2019 150

2.2. Elements of compensation paid and beneﬁts awarded

during2018 to corporate ofﬁcers of Vivendi 154

2.3. Performance shares awarded to the Chairman

andmembersofthe Management Board 161

2.4. Compensation Summary Tables 165

2.5. Elements of compensation and beneﬁts of any kind paid

orawarded to executive and non-executive ofﬁcers for their service

in such capacity, in respect of ﬁscal year 2018, and submitted

to the Combined General Shareholders’ Meeting ofApril15, 2019 170

2.6. Trading in company securities 181

GENERALINFORMATIONABOUTTHECOMPANY

184

3.1. Corporate and CommercialName 184

3.2. Place of Registration and Registration Number 184

3.3. Date of Incorporation andTerm 184

3.4. Registered Ofﬁce, Legal Form and Laws Applicable

toVivendi’sBusiness 184

3.5. Fiscal Year 184

3.6. Access to Legal Documents and Regulated Information 185

3.7. Memorandum and by-laws 185

3.8. Share Capital 187

3.9. Major Shareholders 192

Appendix: Stock Subscription Option Plans

andPerformanceSharePlans 194

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CorporateGovernanceofVivendi

CORPORATEGOVERNANCEOFVIVENDI

Section 1

CorporateGovernanceofVivendi

This section constitutes an integral part of the report on corporate governance referred to in Article L.225-68 of the French Commercial Code (Code de

commerce) and reviewed by the Supervisory Board at its meeting on February14, 2019.

Since 2005, Vivendi has opted for a two-tier governance structure consisting of a Supervisory Board and a Management Board. This separated structure maintains

a balance between management functions and oversight functions. It allows the Management Board to act with the promptness and efﬁciency required to

perform its corporate management duties. Furthermore, the balanced and diversiﬁed composition of the Supervisory Board ensures that it is able to exercise the

very best judgment and foresight, and guarantees the integrity and engagement of its members in performing their supervisory and oversight duties.

The Management Board is supported by six internal committees:

(average age)

meetings

in 2018

99%

attendance rate

in 2018

MANAGEMENT

BOARD

(7 MEMBERS)

Executive

Committee

Management

Committees

Investment

Committee

Compliance

Committee

Risk

Committee

Financial

Information and

Communication

Procedures

Committee

For a detailed description of the composition, functions and activities of these committees, please see Section 1.2.10 of this chapter.

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CorporateGovernanceofVivendi

CORPORATEGOVERNANCEOFVIVENDI

13 13

In exercising its supervisory and control duties, the Supervisory Board relies on the following structure:

member

representing

employee

shareholders

member

representing

employees

(average age)

4.2 years

Average Board

membership

meetings

in 2018

96.4%

attendance

rate

60%

independent

(a)

Vice Chairman

and lead

independent

member

55%

women

(b)

SUPERVISORY BOARD

(12 MEMBERS)

(a) Excluding the member representing employee shareholders and the member representing employees.

(b) Excluding the member representing employees.

The Supervisory Board reviews and determines the company’s strategic

plans. It monitors the decisions made by the Management Board on an

ongoing basis and authorizes substantial acquisitions, sales, internal

restructuring transactions and other transactions that could have an impact

on the group’s ﬁnancial structure, including strategic partnership agreements.

The Supervisory Board carries out any veriﬁcation or control checks it deems

appropriate and is provided with all documents it deems useful to the

fulﬁllment of its purpose and function. Upon the proposal of the Corporate

Governance, Nominations and Remuneration Committee, it appoints the

members of the Management Board, who may be removed at any time, and

sets the policy and criteria for determining, allocating and granting their

compensation elements.

With respect to the relationship between the Management Board and the

Supervisory Board, the Management Board prepares a status report every

quarter, which is communicated and reviewed by the Supervisory Board.

Inaddition, the Chairman of the Management Board must provide

information on a regular basis to the Chairman of the Supervisory Board on

the company’s operations and signiﬁcant events. More generally, members

of the Supervisory Board are kept informed on a regular basis, by any means

by either the Management Board or its Chairman, regarding the company’s

financial position, cash flow and obligations, as well as any significant

events or transactions relating to the company.

In 2015, the Supervisory Board set in place a system of advisors whereby

each memberof the Management Board acts as the advisor to one or more

members of the Supervisory Board. This system fosters greater dialog and

exchange between Supervisory Board and Management Board members.

At the close of the General Shareholders’ Meeting held on April19, 2018,

and following a recommendation from the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board

unanimously decided to appoint Yannick Bolloré to replace Vincent Bolloré

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1.1. Administrative, management and supervisory bodies

CORPORATEGOVERNANCEOFVIVENDI

as its Chairman. With a wide-ranging vision of Vivendi’s businesses

centered around content, media and communication as well as experience

in integrating a multinational company, Yannick Bolloré was considered the

best person to oversee Vivendi as it continues to deploy its strategy. The

decision demonstrates the Supervisory Board’s conﬁdence in the guiding

vision of its core shareholder, a multinational family business, which

ensures stability and long-term prospects for the group and its talents and

for all of its shareholders and other stakeholders.

As Chairman of the Supervisory Board, Yannick Bolloré performs the duties

and exercises the powers set forth by law and the company’s by-laws. No

other function has been assigned to him.

As Chairman and CEO of Havas, a position he has held since August30,

2013, Yannick Bolloré implements the strategy deﬁned by Vivendi for the

Havas Group and reports to the Management Board in this regard in the

same way as the other executives of the group’s main business units. The

combination of these two roles, which stems from Vivendi’s acquisition of

Havas, is not of a nature that could undermine the necessary balance of

powers or the proper conduct of business. When Vivendi’s Supervisory

Board discusses any matter relating, directly or indirectly, to its Chairman,

he is asked to leave the Supervisory Board meeting during voting and

deliberations. In such situations, the Vice Chairman is temporarily

responsible for chairing the meeting and leading its deliberations.

During its meeting of April19, 2018 and following a recommendation by the

Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board renewed Philippe Bénacin’s term as Vice Chairman and

appointed him as lead independent memberof the Supervisory Board. In his

capacity as lead independent member, Philippe Bénacin ensures the

absence of conflicts of interest, the smooth running of the Board and

compliance with the principles of good governance. For more information

about the lead independent member’s role and responsibilities, please see

Section1.1.1.9 of this chapter.

1.1. Administrative, management and supervisory bodies

Vivendi has referred to and fully applied the AFEP/MEDEF Code of

Corporate Governance for Publicly Traded Companies, as amended in

June2018 (hereinafter the “AFEP/MEDEF Code”).

1.1.1. SUPERVISORY BOARD

The Supervisory Board is a collegiate body. Its decisions are the respon-

sibility of all of its members who must keep them conﬁdential.

The Supervisory Board, taken as a whole, may make any public statement in

the form of press releases to inform the market.

1.1.1.1. General Provisions

The Supervisory Board is made up of a maximum of 18 members. Each

memberserves a four-year term (Article7 of Vivendi’s by-laws). The

Supervisory Board may appoint one or two non-voting members (censeurs)

(Article10-6 of Vivendi’s by-laws). Non-voting members participate in an

advisory capacity at meetings of the Supervisory Board and may attend

meetings of the committees set up by the Supervisory Board. They are

appointed for a maximum term of four years.

Except for the memberrepresenting employees and the member

representing employee shareholders, each memberof the Supervisory

Board must own a minimum of 1,000 shares for his or her term of ofﬁce

(Article7-2 of Vivendi’s by-laws).

Each memberof the Supervisory Board undertakes to regularly attend

Supervisory Board meetings and General Shareholders’ Meetings.

Members of the Supervisory Board may attend meetings by videoconfe-

rencing or other telecommunication means (Article10 of Vivendi’s by-laws).

At the close of each annual General Shareholders’ Meeting, the numberof

members of the Supervisory Board over the age of 70, as of the closing date

of the previous ﬁscal year, must not exceed one-third of the members. If this

limit is exceeded, the oldest members are deemed to have resigned at the

close of such General Shareholders’ Meeting (Article7-3 of Vivendi’s

by-laws).

1.1.1.2. Composition of the Supervisory Board –

Independence, Diversity and Expertise

ofMembers

Composition of the Supervisory Board

As of the date of publication of this Annual Report, the Supervisory Board

has 12 members, including one memberrepresenting employee

shareholders and one memberrepresenting employees.

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CORPORATEGOVERNANCEOFVIVENDI

13 13

SUPERVISORY BOARD MEMBERS: DATES OF APPOINTMENT AND NUMBEROF SHARES HELD

Supervisory Board

members Position Age

Numberof

positions

held in listed

companies

outside the

group(1)

Date of initial

appointment and

most recent

re-election to the

Supervisory Board

Committee

member End of term

Numberof

held

Yannick Bolloré (*) Chairman of the Supervisory Board

Memberof the Supervisory Board

39 0 SB 04/19/2018

AGM 04/25/2017

SB 05/11/2016 n/a AGM 2020 3,616

Philippe Bénacin Vice Chairman, lead independent member

Independent memberof the Supervisory Board

60 1 SB 04/19/2018

SB 06/24/2014

AGM 04/19/2018

AGM 06/24/2014 B AGM 2022 14,100

Tarak Ben Ammar (2) Independent memberof the Supervisory Board 69 1 AGM 04/17/2015 A AGM 2019 1,003

Vincent Bolloré (**) (3) Memberof the Supervisory Board

Chairman of the Supervisory Board

66 0 AGM 04/25/2017

AGM 04/30/2013

SB 12/13/2012

SB 04/25/2017

SB 06/24/2014 A, B AGM 2021 6,000

Paulo Cardoso (a) Memberof the Supervisory Board 45 0 DUP 10/19/2017

WC 10/16/2014 B, C 10/18/2020 n/a

Dominique Delport (4) Memberof the Supervisory Board 51 0 AGM 04/17/2015 n/a AGM 2019 -

Véronique Driot-Argentin Memberof the Supervisory Board 56 0 AGM 04/25/2017 C AGM 2021 1,366

Aliza Jabès Independent memberof the Supervisory Board 56 0 AGM 04/19/2018

AGM 06/24/2014

AGM 04/29/2010 B AGM 2022 7,833

Cathia Lawson-Hall Independent memberof the Supervisory Board 47 0 AGM 04/19/2018

AGM 04/21/2016

SB 09/02/2015 A, C AGM 2022 1,000

Sandrine Le Bihan (b) Memberof the Supervisory Board 48 0 AGM 04/25/2017 C AGM 2021 3,197

Michèle Reiser Independent memberof the Supervisory Board 69 0 AGM 04/19/2018 A, C AGM 2022 1,000

Katie Stanton (c) Independent memberof the Supervisory Board 49 0 AGM 04/19/2018

AGM 06/24/2014 A AGM 2022 1,000

n/a: not applicable.

(*) Chairman of the Supervisory Board since April19, 2018.

(**) Chairman of the Supervisory Board until April19, 2018.

(1) Numberof positions held, taking into account the exemptions set forth in the French Commercial Code and the AFEP/MEDEF Code. For a detailed list of current and

previous positions, please refer below to the Section “Main Activities of the Current Members of the Supervisory Board”.

(2) Memberwhose term of ofﬁce will expire at the close of the General Shareholders’ Meeting to be held on April15, 2019 (not standing for re-election).

(3) Memberwho has chosen to end his term of ofﬁce at the close of the General Shareholders’ Meeting to be held on April15, 2019.

(4) Memberwhose renewal of term is proposed to the General Shareholders’ Meeting of April15, 2019.

(a) Memberrepresenting employees.

(b) Memberrepresenting employee shareholders.

A: Audit Committee.

B: Corporate Governance, Nominations and Remuneration Committee.

C: Corporate Social Responsibility (CSR) Committee.

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Changes in the Composition of the Supervisory Board and its Committees in 2018

Supervisory Board Audit Committee

Corporate Governance,

Nominations and Remuneration

Committee CSR Committee

Yannick Bolloré Chairman

(since April19, 2018)

Member

(until April19, 2018)

Member

(until April19, 2018)

Philippe Bénacin Vice Chairman and lead

independent

member(renewalApril19, 2018)

- Chairman

(renewal April19, 2018)

Vincent Bolloré Chairman

(until April19, 2018)

Member

(since April19, 2018)

Member

(since April19, 2018)

Dominique Delport Member

(no change)

- Member

(until March26, 2018)

Aliza Jabès Member

(renewal April19, 2018)

- Member

(renewal April19, 2018)

Cathia Lawson-Hall Member

(renewal April19, 2018)

Chairwoman

(renewal April19, 2018)

- Member

(renewal April19, 2018)

Virginie Morgon Member

(until April19, 2018)

- Member

(until April19, 2018)

Michèle Reiser Member

(since April19, 2018)

Member

(since April19, 2018)

- Member

(since April19, 2018)

Katie Stanton Member

(renewal April19, 2018)

Member

(renewal April19, 2018)

- -

Independence of Supervisory Board members

Excluding the memberrepresenting employee shareholders and the

memberrepresenting employees, the Supervisory Board has 10members,

including six independent members (60%).

A memberis independent if he or she has no direct or indirect relationship

of any kind (other than a non-substantial shareholding in the company) with

the company, its group or its management that could affect his or her

independent judgment (as deﬁned in the AFEP/MEDEF Code).

Classiﬁcation of an independent member, and the criteria used to determine

whether a Director meets such classiﬁcation, are reviewed by the Corporate

Governance, Nominations and Remuneration Committee when considering

and discussing the appointment and re-election of members to the

Supervisory Board. The Corporate Governance, Nominations and

Remuneration Committee also reviews the status of the Supervisory Board

members regularly throughout their term of ofﬁce and may change their

classiﬁcation if there is any doubt as to their continued independence.

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13 13

INDEPENDENCE OF SUPERVISORY BOARD MEMBERS WITH REGARD TO THE CRITERIA

SET OUT IN ARTICLE8 OF THE AFEP/MEDEF CODE

Criteria 1 2 3 4 5 6 7 8

Independent

member

Supervisory Board

members

Not an

employee or

executive

ofﬁcer

cross-

directorships

signiﬁcant

business

relationships

No family

ties

Not an

auditor

Term

hasnot

exceeded

12years

Does not

receive any

variable

compensation

(in cash or

securities)

linked to

Vivendi’s

performance

Does not

represent

amajor

shareholder

Yannick Bolloré - √ - - √ √ - √ -

Philippe Bénacin √ √ √ √ √ √ √ √ √

Tarak Ben Ammar √ √ √ √ √ √ √ √ √

Vincent Bolloré - √ - - √ √ √ - -

Paulo Cardoso - √ √ √ √ √ √ √ n/a

Dominique Delport (1) - √ - √ √ √ - √ -

Véronique Driot-Argentin - √ √ √ √ √ √ √ -

Aliza Jabès √ √ √ √ √ √ √ √ √

Cathia Lawson-Hall √ √ √ √ √ √ √ √ √

Sandrine Le Bihan - √ √ √ √ √ √ √ n/a

Michèle Reiser √ √ √ √ √ √ √ √ √

Katie Stanton √ √ √ √ √ √ √ √ √

n/a: not applicable.

(1) Executive positions within the Havas Group until April30, 2018.

Following its review of the independence of Tarak Ben Ammar, Chairman

and Chief Executive Ofﬁcer of Quinta Communications, which has a video

and television rights license agreement with Studiocanal (an indirectly

owned, wholly controlled subsidiary of Vivendi), the Corporate Governance,

Nominations and Remuneration Committee, having regard to Article8.5 of

the AFEP/MEDEF Code, concluded that this business relationship was not

material. In 2018, it represented €1.7million charged by Studiocanal to the

Quinta Communications company, i.e., 0.4% of Studiocanal’s revenue over

the period. Furthermore, the ﬁve-year term of this agreement, entered into

in 2015, is standard for this type of business.

The Corporate Governance, Nominations and Remuneration Committee also

reviewed the status of Aliza Jabès, Chairwoman of Nuxe Développement,

and Philippe Bénacin, Chairman and Chief Executive Ofﬁcer of Interparfums.

Having regard to Article8.5 of the AFEP/MEDEF Code, the Committee

concluded that the business relationships conducted on an arm’s length

basis by certain Vivendi subsidiaries with Interparfums and the Nuxe Group

were not material and were not of a nature to compromise the Board

members’ judgment or their independence in exercising their duties.

For a description and quantiﬁcation of these business relationships, please

see Note 21.3 “Other Related-Party Transactions” in the Notes to the

Consolidated Financial Statements for the ﬁscal year ended December31,

2018, presented in Section4 of this Annual Report.

Diversity and Expertise of the Members of the Supervisory Board

The Corporate Governance, Nominations and Remuneration Committee is in

charge of identifying and monitoring the skills and expertise available

within the Supervisory Board and its committees. When reviewing the

proﬁles presented, the committee takes into particular consideration the

following factors:

3 ability to represent all Vivendi shareholders’ interests;

3 sound judgment, integrity and commitment;

3 alignment of skills and expertise with the Vivendi group’s businesses

and strategy;

3 contribution to the diversity of the Board and its committees; and

3 absence of potential conﬂicts of interest.

Vivendi’s Supervisory Board examined the diversity policy for members of

the Supervisory Board further to a review by the Corporate Governance,

Nominations and Remuneration Committee. The Supervisory Board

comprises six women (55%) (the employee representative is not counted in

calculating this percentage, pursuant to Law No.2011-103 of January27,

2011 concerning gender parity on Boards of Directors and Supervisory

Boards, and professional equality). One memberof the Supervisory Board is

a foreign national.

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CORPORATEGOVERNANCEOFVIVENDI

All Supervisory Board members contribute to the smooth running of the Board due to their sound, impartial judgment and their compliance with the principles

of good governance. Given the experience and involvement of each member, the Board has expertise in the following areas, in line with Vivendi’s strategy:

Communication,

media

and content

100%

Development

and strategy

75%

International

67%

Digital/New

technologies

75%

Financial

and accounting

expertise

92%

Governance

and organization

92%

Human Resources

and CSR

100%

Out of the eight members with international experience, three have expertise in emerging markets.

Changes in the Composition of the Supervisory Board Subject

toShareholder Approval at the General Shareholders’ Meeting

tobe Held on April15, 2019

Tarak Ben Ammar is not standing for re-election. The General Shareholders’

Meeting of April15, 2019 will be invited to renew the term of office of

Dominique Delport. Given that Vincent Bolloré has decided to step down at

the close of the next General Shareholders’ Meeting, shareholders will be

asked to elect Cyrille Bolloré as a new memberof the Supervisory Board.

Cyrille Bolloré has experience in an integrated multinational company and in

the content, media and communication businesses. His appointment would

also strengthen the Supervisory Board’s expertise in issues relating to

emerging markets and, in particular, Africa.

For detailed information about the current members of the Supervisory

Board and the nominee proposed for election at the General Shareholders’

Meeting of April15, 2019, please refer to the Sections “Main Activities of

the Current Members of the Supervisory Board” and “Information about the

nominee for the Supervisory Board submitted for the approval of the

General Shareholders’ Meeting to be held on April15, 2019” below.

At the close of the General Shareholders’ Meeting to be held on April15,

2019, and subject to approval of the relevant resolutions, the Supervisory

Board will have 11 members including six women, one memberrepresenting

employee shareholders, appointed pursuant to Article L.225-71 of the

French Commercial Code, and one memberrepresenting employees,

appointed pursuant to Article L.225-79-2 of the French Commercial Code,

the other members having been appointed pursuant to Article L.225-75 of

the French Commercial Code. Excluding the memberrepresenting employee

shareholders and the memberrepresenting employees, the Supervisory

Board will have ﬁve independent members out of eleven (56%).

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13 13

Main Activities of the Current Members of the Supervisory Board

YANNICK BOLLORÉ

Chairman of the Supervisory Board

French citizen.

Havas – 29/30, quai de Dion-Bouton –

92800 Puteaux – France

EXPERTISE AND EXPERIENCE

Yannick Bolloré is a graduate of Paris

Dauphine University. He is Chairman and

Chief Executive Ofﬁcer of the Havas Group,

one of the world’s largest communications

groups with revenue of $2billion and more

than 20,000 employees in 100 countries.

He co-founded the production company WY

Productions in 2002 (Hell, Yves Saint

Laurent). In 2006, he joined his family

group, the Bolloré Group, to launch and

develop its media division. Within ﬁve

years, Bolloré Média (D8, D17) became the

leading independent French TV group and

was subsequently sold to Canal+, making

the Bolloré Group a shareholder in Vivendi.

He then joined the Havas Group in 2011

and became Chairman and Chief Executive

Ofﬁcer in 2013. He initiated a major

restructuring of the group to make it

themost integrated and forward-thinking

business in its industry. In 2017, Vivendi

obtained control of the Havas Group.

Yannick Bolloré was appointed Chairman

ofthe Supervisory Board of Vivendi in

April2018.

Yannick Bolloré was named a Young Global

Leader in 2008 by the World Economic

Forum. He has received numerous honors

and awards from international associations

and the business press. He is also a

Chevalier de l’Ordre des Arts et des Lettres.

POSITIONS CURRENTLY HELD

Havas Group (in France)

3 Havas, Chairman of the Board of Directors

andManaging Director

3 Havas Media France, Director

3 W & Cie, permanent representative of Havas

ontheBoard of Directors

Havas Group (outside France)

3 Havas North America, Inc. (United States), Chairman

3 Havas Worldwide LLC (United States), Chairman

andExecutive Vice President

3 Havas Middle East FZ, LLC (United Arab Emirates),

Director

OTHER POSITIONS AND OFFICES

(INFRANCE)

BolloréSA (*), Vice Chairman and Director

3 Financière de l’Odet (*), Director

3 Bolloré Participations, Director

3 Financière V, Director

3 Omnium Bolloré, Director

3 JC Decaux Bolloré Holding, member

of the Executive Board

3 Soﬁbol, memberof the Supervisory Board

3 Musée Rodin, Director

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Havas 360, Chairman

3 HA Pôle Ressources Humaines, Chairman

and Chief Executive Ofﬁcer and Director

3 Mediamétrie, permanent representative of Havas

onthe Board of Directors

3 Havas Paris, permanent representative of Havas

on the Board of Directors

3 Havas Paris, Chairman and Chief Executive Ofﬁcer

andDirector

3 Havas Life Paris, permanent representative of Havas

onthe Board of Directors

3 MFG R&D, memberof the Supervisory Board

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING THE

LAST FIVE YEARS (OUTSIDE FRANCE)

Havas Media Africa, memberof the Executive Board

3 Havas Media Group SpainSA (Spain), Director

3 Arena Communications Network SL (Spain), Director

3 Havas Worldwide Brussels (Belgium), permanent

representative of Havas on the Board of Directors

(*) Listed on a regulated market.

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PHILIPPE BÉNACIN

Vice Chairman and lead independent member

of the Supervisory Board and Chairman

of the Corporate Governance, Nominations

and Remuneration Committee

French citizen.

Interparfums – 4, rond-point

des Champs-Élysées – 75008 Paris – France

EXPERTISE AND EXPERIENCE

Philippe Bénacin graduated from Essec

in1983, the year in which he founded

Interparfums with Jean Madar.

AsChairman and Chief Executive Ofﬁcer,

Philippe Bénacin developed Interparfums’

portfolio of licensed brands, supply chain,

international distribution and, more

generally, the company’s strategy

andgrowth, including its IPO in 1995.

Interparfums is a major player in the

Perfume and Cosmetics market and

manages, among others, the brands Lanvin,

Montblanc, Jimmy Choo, Karl Lagerfeld,

Boucheron, Van Cleef & Arpels, Repetto,

and Balmain.

Regularly recognized for the quality of its

Financial Reporting, the Interparfums Group

has earned a numberof awards and prizes,

including the prestigious Prix Cristal de la

transparence de l’information ﬁnancière

and the Prix de l’Audace Créatrice, awarded

to Philippe Bénacin by French Prime

Minister François Fillon.

POSITIONS CURRENTLY HELD

(INFRANCE)

InterparfumsSA (*), Co-Founder and Chairman

andChief Executive Ofﬁcer

3 Interparfums Holding, Chairman of the Board

ofDirectors

POSITIONS CURRENTLY HELD

(OUTSIDE FRANCE)

Interparfums Inc. (United States),

President(non-executive) and Vice Chairman

of the Board ofDirectors

3 Interparfums Luxury Brands (United States),

President(non-executive) and Vice Chairman

oftheBoard of Directors

3 Inter España Parfums & Cosmetiques SL (Spain),

Director

3 Interparfums Srl (Italy), Director

3 Interparfums Switzerland, Director and Manager

3 Interparfums Singapore Pte Ltd, Director

3 Parfums Rochas Spain S.L., Chairman of the Board

ofDirectors

OTHER POSITIONS AND OFFICES

None

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

(OUTSIDEFRANCE)

Interparfums Ltd (Great Britain), Director

(*) Listed on a regulated market.

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13 13

TARAK BEN AMMAR

Independent member of the Supervisory Board

whose term of ofﬁce will expire at the close

of the General Shareholders’ Meeting to be held

on April 15, 2019 (not standing for re-election).

French citizen.

8, avenue de Montmorency –

75016 Paris – France

EXPERTISE AND EXPERIENCE

Tarak Ben Ammar is an entrepreneur

inaudiovisual media both within Europe

and worldwide.

He began his career in 1974 by convincing

anumberof American producers to produce

parts of their ﬁlms in Tunisia. As a result,

heparticipated in the production of a

numberof international ﬁlms, including

theblockbusters Star Wars (George Lucas)

and Raiders of the Lost Ark (Steven

Spielberg). He has also co-produced and

distributed more than 70 movies, including

the prestigious La Traviata (Franco

Zefﬁrelli), Pirates (Roman Polanski),

ThePassion of the Christ (Mel Gibson)

andL’Or Noir (Jean-Jacques Annaud).

Simultaneously, he developed a group

thatis now present in several countries,

including:

3 in France, through his company Quinta

Communications, he participated in the

development of the French ﬁlm industry,

and, as an investor, he partnered with

Luc Besson to found Cité du Cinéma, set

to become a ﬁrst-class international ﬁlm

studio;

3 in Italy, his subsidiary Prima TV has

rapidly established its position as the

fourth-largest multimedia group, behind

Mediaset, RAI and Sky, primarily

through the company Eagle, the largest

independent distributor in the country.

In2013, the telecommunications group

Nabil Sawiris purchased a stake in

Prima;

3 in North Africa, he is committed

topromoting the values of tolerance

andfreedom in his country of birth.

Heco-founded the TV channel Nessma,

which has become the leading television

channel in Tunisia, Algeria and Libya and

the second biggest channel in Morocco.

On account of its independence and

democratic views, this channel played

acentral role in the Arab Spring

andtheﬁght against radical Islam.

He graduated from Georgetown University

in Washington, D.C. with a degree

ininternational economics.

POSITIONS CURRENTLY HELD

(INFRANCE)

A Prime GroupSAS, memberof the Supervisory Board

3 Euronews SA, member of the Supervisory Board

POSITIONS CURRENTLY HELD

(OUTSIDE FRANCE)

Holland Coordinator & Service Company B.V.

(Netherlands), shareholder and Managing Director

3 A1 International Investment B.V. (Netherlands),

Supervisory Director

3 NessmaSA (Luxembourg), Director

3 Andromeda TunisieSA (Tunisia), Chairman

and Chief Executive Ofﬁcer

3 Quinta Communications Distribution TunisieSARL

(Tunisia), Manager

3 Quinta Communications LTC GammarthSARL (Tunisia),

Manager

3 Carthago Films ServicesSARL (Tunisia), Manager

3 Empire ProductionsSARL (Tunisia), Manager

3 Holland Coordinator & Service Company Italia SpA

(Italy), Chairman of the Board of Directors and Director

3 Eagle Pictures SpA (Italy), Chairman of the Board

ofDirectors and Director

3 Europa Network Srl (Italy), Director

3 Prima TV SpA (Italy), Chairman of the Board of Directors

and Director

3 Delta Films Limited (UK), Director

3 Delta (The Last Legion) Limited (UK), Director

3 Delta (Young Hannibal) Limited (UK), Director

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

EdisonSAS (France), memberof the Board of Directors

3 Quinta Communications SA, Chairman of the Board

of Directors and Managing Director

3 Téléclair SARL, Manager

POSITIONS PREVIOUSLY HELD THAT

HAVE EXPIRED DURING THE LAST FIVE

YEARS (OUTSIDE FRANCE)

Mediobanca SpA (*) (Italy), member

of the Supervisory Board

3 Telecom Italia SpA (*) (Italy), Director

3 The Weinstein Company Holdings LLC (USA),

Board Member

3 Lux Vide Finanziaria per iniziative audiovisive

etelematiche SpA (Italy), Director

3 Europa TV SpA (Italy), Chairman of the Board

ofDirectors and Director

3 Quinta Communications USA, Inc. (USA), Director

3 Quinta Communications Italia Srl (Italy), Chairman

ofthe Board of Directors and Director

3 Imperium SpA (Italy), Chairman of the Board

ofDirectors and Director

3 La Centrale Finanziare Generale SpA (Italy),

ViceChairman of the Board of Directors and Director

(*) Listed on a regulated market.

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Pursuant to Recommendation 18 of the AFEP/MEDEF Code, “an Executive Ofﬁcer should not hold more than two other directorships in listed corporations,

including foreign corporations, not afﬁliated with his or her group”.

The AFEP/MEDEF Code Application Guide further provides that “the limit above does not apply to directorships held by an Executive Ofﬁcer in subsidiaries

and holdings, held alone or together with others, of companies whose main activity is to acquire and manage such holdings.”

All positions held by Vincent Bolloré within listed companies are:

3 ﬁrstly, within the Bolloré Group, which is controlled by Vincent Bolloré (1) (Financière de l’Odet, BolloréSA, Blue Solutions, Financière Moncey, Société

Industrielle et Financière de l’Artois and Compagnie du Cambodge); and

3 secondly, within equity interests (2) of BolloréSA (Vivendi, Socﬁn and its subsidiaries), the main activity of which is to acquire or manage its subsidiaries

and interests and where Vincent Bolloré serves as Corporate Ofﬁcer (Chairman-CEO of BolloréSA).

These positions, held outside the Bolloré Group but in interests held by BolloréSA, meet the required conditions to beneﬁt from the exemption and therefore

need not be subject to application of the rules governing more than one directorship.

Vincent Bolloré’s situation is thus consistent with the provisions of the AFEP/MEDEF Code concerning the accumulation of positions, since the positions he

holds in listed companies are either within his group, or are subject to the exemption provided for in the AFEP/MEDEF Code.

(1) Through the Group company Bolloré Participations, of which Vincent Bolloré is Chairman and Chief Executive Ofﬁcer.

(2) Pursuant to Article L.233-2 of the French Commercial Code, an “equity interest” is deﬁned as an ownership interest of between 10% and 50% of the share capital.

VINCENT BOLLORÉ

Member of the Supervisory Board

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Vincent Bolloré holds a Master’s degree

inLaw and is the Chairman and Chief

Executive Ofﬁcer of the Bolloré Group.

In1970, he began his career as a

representative at Banque de l’Union

Européenne before joining Compagnie

Financière Edmond de Rothschild in 1976.

In 1981, he became Chairman and Chief

Executive Ofﬁcer of the Bolloré Group and

its paper business. Under Vincent Bolloré’s

management, the group became one of the

world’s 500 largest companies. As a listed

company, the Bolloré Group holds a strong

position in each of its businesses, which

are organized into three divisions: Transport

and Logistics, Communication and Media,

and Electricity Storage. The Bolloré Group

also manages a long-term investment

portfolio.

POSITIONS CURRENTLY HELD

Vivendi group (in France)

3 Canal+ Group, memberof the Supervisory Board

Bolloré Group (in France)

3 BolloréSA (*), Chairman and Chief Executive Ofﬁcer

3 Bolloré Participations, Chairman and Chief Executive

Ofﬁcer

3 Financière de l’Odet (*), Chairman of the Board

ofDirectors (separate management)

3 Blue Solutions (*), Chairman of the Board of Directors

(separate management)

3 Somabol, Chairman

3 Omnium Bolloré, Chief Executive Ofﬁcer and Director

3 Financière V, Chief Executive Ofﬁcer and Director

3 Financière Moncey (*), Director

3 Société Industrielle et Financière de l’Artois (*),

permanent representative of Bolloré Participations

onthe Board of Directors

3 Compagnie du Cambodge (*), permanent representative

of Bolloré Participations on the Supervisory Board

Bolloré Group (outside France)

3 Nord-Sumatra Investissements, Chairman and Deputy

Director

3 Financière du Champ de Mars, Chairman and Deputy

Director

3 BB GroupeSA, Chairman of the Board of Directors

3 Plantations des Terres Rouges, Director

OTHER POSITIONS AND OFFICES

(INFRANCE)

Fred & Farid Group, permanent representative

ofBolloré

OTHER POSITIONS AND OFFICES

(OUTSIDE FRANCE)

SAFA Cameroun (*), permanent representative

ofBolloré Participations on the Board of Directors

3 Société des Caoutchoucs de Grand Bereby (SOGB) (*),

Vice Chairman

3 Bereby Finances, Vice Chairman

3 Socﬁnaf (*) (formerly Intercultures), Director

3 Liberian Agricultural Company (LAC), Director

3 Plantations Nord-Sumatra Ltd, Director

3 Socﬁn (*) (formerly Socﬁnal), Director

3 Socﬁnasia (*), Director

3 Socﬁndo, Director

3 Socﬁn KCD, Director

3 Bereby Finances, permanent representative of Bolloré

Participations on the Board of Directors

3 Société Camerounaise de Palmeraies (Socapalm) (*),

permanent representative of Bolloré Participations

onthe Board of Directors

3 Société des Caoutchoucs de Grand Bereby (SOGB) (*),

permanent representative of Bolloré Participations

onthe Board of Directors

3 Brabanta, permanent representative of Bolloré

Participations on the Board of Directors

3 SOGB, Vice Chairman

3 COVIPHAMA, Director

3 Plantations Socﬁnaf Ghana, Director

3 Socﬁn Agricultural Company, Director

3 Socﬁnco FR, Director

POSITIONS PREVIOUSLY HELD THAT

HAVE EXPIRED DURING THE LAST FIVE

YEARS (IN FRANCE)

Vivendi, Chairman of the Supervisory Board

3 Canal+ Group, Chairman of the Supervisory Board

3 Studiocanal, Memberof the Supervisory Board

3 Société Anonyme Forestière et Agricole (SAFA),

permanent representative of Bolloré Participations

onthe Board of Directors

POSITIONS PREVIOUSLY HELD THAT

HAVE EXPIRED DURING THE LAST FIVE

YEARS (OUTSIDE FRANCE)

Generali, Vice Chairman

3 Socﬁnco, Director

3 Palmeraies du Cameroun (Palmcam), permanent

representative of Bolloré Participations on the Board

ofDirectors

3 Brabanta, Co-Manager

3 Centrages, Director

3 Bolloré Transport & Logistics Congo, permanent

representative of Bolloré Participations on the Board

ofDirectors

(*) Listed on a regulated market.

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13 13

PAULO CARDOSO

Employee representative on the Supervisory Board

and Chairman of the CSR Committee

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Paulo Cardoso, a trained accountant, joined

Compagnie Générale des Eaux in 1997

asadministrative manager in the

Communications department.

In 2001, he joined the Finance department’s

accounting unit. In 2002, he moved to the

Treasury department, where he is

responsible for the Canal+ Group’s cash

management and the group’s network

systems.

POSITIONS CURRENTLY HELD

None

OTHER POSITIONS AND OFFICES

None

POSITIONS PREVIOUSLY HELD THAT

HAVE EXPIRED DURING THE LAST FIVE

YEARS (IN FRANCE)

Memberand Treasurer of Vivendi’s Works Council

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DOMINIQUE DELPORT

Member of the Supervisory Board whose renewal

of term is proposed to the General Shareholders’

Meeting of April 15, 2019

French citizen.

Vice Media UK – New North Place –

London EC2A 4JA – United Kingdom

EXPERTISE AND EXPERIENCE

Dominique Delport is a graduate of the EM

Lyon (École Supérieure de Commerce de

Lyon) and a winner of the MBA Moot Corp

International Challenge hosted by the

University of Texas, Austin. He is also the

recipient of an Emmy Award.

He has had three distinct professional

careers: television journalist, Internet

entrepreneur, and head of a media agency,

all of which give him expertise in content,

digital and media at an international level.

Dominique Delport began his career

asDeputy Chief Editor for the television

channel M6 Lyon, and then became Chief

Editor at M6 Lille. In 1996, he was

appointed Chief Editor at M6, the second

largest private television channel in France.

From 1996 to 2000, he directed the news

program 6 Minutes (fourmillion daily

viewers) and news reports including Zone

Interdite and Capital.

In April2000, he gave up his career

intelevision to move into the world

ofstartups, forming the streaming

multimedia company Streampower,

wherehe served as Chairman and Chief

Executive Ofﬁcer.

In October2001, Streampower became a

75% subsidiary of the Rivaud Media group

(Bolloré Group).

In 2003, Dominique Delport launched a

daily program on Canal+, Merci pour l’info,

and in 2004, for France 5, he created and

produced the program C.U.L.T.,an

interactive televised broadcast on urban

cultures featuring live videos from bloggers.

After participating in the launch of Direct 8

(TNT), Dominique Delport hosted the

weekly show titled 8-Fi, a live broadcast

devoted to new media and technologies.

Dominique Delport joined Media Planning

Group (MPG) on February1, 2006 as

Managing Director, while retaining his

position as Chairman and Chief Executive

Ofﬁcer at Streampower. He was appointed

Chief Executive of MPG France in

June2006 and then, in February2007,

Managing Director of Havas Media France.

In February2008, he was promoted to the

position of Chairman-Managing Director

ofHavas Media France, a position he held

until the end of 2015.

In February2009, he was elected to a

two-year term as President of the Union

ofMedia Consulting and Purchasing

(UDECAM), an organization representing

allFrench media agencies.

Following the success of the integrated

organization of Havas Media France,

hewas named Managing Director

oftheHavas Media Group global network.

In April2016, he was appointed President

of Vivendi Content and Studioplus,

aposition he also held until April2018.

In March2017, Dominique Delport was

appointed Global Managing Director

andChief Client Ofﬁcer of the Havas Group,

a position he held until April2018.

In April2018, he joined Vice Media, where

he serves as President of International

Operations and Chief Revenue Ofﬁcer.

POSITIONS CURRENTLY HELD

None

OTHER POSITIONS AND OFFICES

None

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Vivendi group (in France)

3 Vivendi ContentSAS, President

3 Studio+, Chairman

3 Studio+ France, Chairman

3 Vivendi Entertainment, Chairman

Havas Group (in France)

3 Havas, Global Managing Director and Chief Client

Ofﬁcer

3 Havas Media Africa, Chairman and member

of the Executive Board

3 MFG R&DSA, Chairman of the Management Board

3 Havas Productions SNC, Manager

3 Havas Media France, Chairman and Chief Executive

Ofﬁcer

3 Udecam, Chairman

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING THE

LAST FIVE YEARS (OUTSIDE FRANCE)

Havas Group (outside France)

3 Arena Media Communications, Co-Manager

3 Havas Media Belgium, Director

3 Ze Cake Group Ltd., Chairman

3 Ze Ais Group Ltd., Chairman

3 Havas Sports Limited, Chairman

3 Arena Blm Ltd, Chairman

3 Arena Quantum Ltd, Chairman

3 Cake Group Ltd, Chairman

3 Elisa Interactive Ltd, Chairman

3 Cake Media Ltd, Chairman

3 Media Planning Ltd, Chairman

3 Ais Group Ltd, Chairman

3 Arena Blm Holdings Ltd (United Kingdom), Chairman

3 BLM Cliverd Ltd, Director

3 Forward 1 UK Ltd, Director

3 BLM Two Ltd, Director

3 BLM Azure Ltd, Director

3 BLM Red Ltd (United Kingdom), Director

3 Forward Holding Spain, Sole Director

3 S.L.U. (Spain), Sole Director

3 Forward Média Peru, Director

3 SAC, Director

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13 13

VÉRONIQUE

DRIOT-ARGENTIN

Member of the Supervisory Board –

employee of Vivendi SA

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Véronique Driot-Argentin joined Compagnie

Générale des Eaux in 1989 where she began

her career in the press services group of the

Corporate Communications department.

In1991, she joined the Île-de-France

Regional Water Authority and then, in 1994,

moved to the Human Resources department

of Générale des Eaux as special assistant

tothe Group Head of Human Resources

working in employee relations, a position

she continues to hold at Vivendi.

In 2011, she began working with Vivendi’s

Head of Training and has been a Training

Manager in the Human Resources

Department since 2016.

Véronique Driot-Argentin has been the

CFTC trade union delegate since 2006.

She sat on the Employment Tribunal in Paris

from 2008 to 2015.

Since 2014, she has been a town councillor

in Villecresnes (Val-de-Marne département)

and Vice President of the Social Housing

and Action Management Committee.

POSITIONS CURRENTLY HELD

None

OTHER POSITIONS AND OFFICES

Vivendi group (in France)

3 Group Works Council, member

3 IDSE, memberof the bureau

3 Vivendi’s Single Staff Delegation (DUP), secretary

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

None

ALIZA JABÈS

Independent member of the Supervisory Board

French citizen.

Nuxe Group – 127, rue d’Aguesseau –

92100 Boulogne-Billancourt – France

EXPERTISE AND EXPERIENCE

Aliza Jabès is a graduate of the Institut

d’Études Politiques de Paris. She holds

anMBA from New York University (NYU).

She began her career as a ﬁnancial analyst

for the Eli Lilly laboratory in Indianapolis

(USA). At the start of the 1990s, she decided

to go into business and took over NUXE,

atthe time a tiny cosmetics laboratory

inParis, with the goal of building a

wide-reaching natural beauty brand. In the

space of just a few years, NUXE became

aleading global cosmetics group. It also

hasa strong position in the wellbeing

industry, with more than 50 deluxe spa

centers inFrance and abroad.

In 2007 and 2011, NUXE’s strategy

ininnovation and industrial property

wasrecognized and rewarded twice by

theFrench National Institute of Industrial

Property (INPI).

Aliza Jabès has regularly won awards

andhonors for her exceptional career.

In 2011, she received the prestigious

Prixde l’Entrepreneur de l’Année

fromEY– L’Express. In 2012, Cosmetic

Executive Women (CEW) gave her the

Achiever Award for her exceptional career

in the cosmetics industry, and in 2014 she

won the Trophée Femmes en Or

(HavasInternational) in the “Women in

Business”category, which rewarded her

forher creativity and entrepreneurial spirit.

After being promoted to the rank of

Chevalier de la Légion d’Honneur in 2008,

she was named Ofﬁcier de l’Ordre National

du Mérite in 2015.

POSITIONS CURRENTLY HELD

NUXE Group (in France)

3 NUXE Développement, Chairwoman

NUXE Group (outside France)

3 NUXE Hong Kong Limited, Managing Director

3 NUXE GmbH (Germany), Manager

3 NUXE Polska sp. Zoo (Poland), Chairwoman

3 NUXE Ireland DAC, Director

3 NUXE UK Ltd, Managing Director

3 NUXE Istanbul Kozmetik Ürünleri Ticaret Limited Sirketi

(Turkey), Chairwoman

3 Laboratoire NUXE Portugal Unipessoal Lda, Manager

3 Laboratoire NUXE España S.L., Manager

3 NUXE SuisseSA, Director

3 NUXE BelgiumSA, Director

3 Laboratoire NUXE Italia S.r.l., Director

OTHER POSITIONS AND OFFICES

(INFRANCE)

Fédération des entreprises de la beauté (FEBEA),

Director

3 Pharmaceutical Council of the French Syndicate

ofCosmetic Products (SFCP), Chairwoman

3 Commission for the award of the French “Palace”

status prize, Member

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

None

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CATHIA LAWSON-HALL

Independent member of the Supervisory Board

and Chairwoman of the Audit Committee

French citizen.

Société Générale – 17, cours Valmy –

92800 Paris-La Défense 7 – France

EXPERTISE AND EXPERIENCE

Cathia Lawson-Hall holds a post-graduate

degree (DEA) in Finance from Paris

Dauphine University in France. She is

incharge of the overall relationship and

strategic consulting with governments,

large corporates and ﬁnancial institutions

inAfrica at Société Générale. Cathia

Lawson-Hall is also Head of the Financial

Institutions Group for Africa at Société

Générale.

Previously, she was Managing Director,

Co-Head of Debt Capital Markets for

anumberof large corporates in France,

Belgium and Luxembourg. Cathia

Lawson-Hall joined Société Générale in

1999 as a sales-side credit analyst covering

the telecommunications and media sectors

before moving into ﬁnancial consulting.

Shehas over 20 years’ experience

incorporate and investment banking.

POSITIONS CURRENTLY HELD

Société Générale Côte d’Ivoire, Director

3 Société Générale Bénin, Director

OTHER POSITIONS AND OFFICES

(INFRANCE)

Société Générale, Head of Coverage and Investment

Banking for Africa

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

None

SANDRINE LE BIHAN

Member of the Supervisory Board,

representing employee shareholders

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Sandrine Le Bihan, a trained accountant,

joined Compagnie Générale des Eaux

in1992 as a manager in the Securities

department.

In 2003, she became Group Company

Directory and Database Manager within

Vivendi’s Legal department. She works in

corporate and securities laws, including

employee shareholding schemes.

POSITIONS CURRENTLY HELD

None

OTHER POSITIONS AND OFFICES

Vivendi group (in France)

3 “Vivendi Groupe Épargne” collective investment fund,

Chairwoman and memberof the Supervisory Board

3 “Opus Vivendi” collective investment fund, Member

ofthe Supervisory Board representing the fund’s unit

holders

3 Vivendi’s Single Staff Delegation (DUP), representative

and treasurer

3 Group Works Council, member

3 IDSE, memberof the bureau

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Vivendi Works Council, Deputy Secretary and Treasurer

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MICHÈLE REISER

Independent member of the Supervisory Board

French citizen.

MRC – 6, place Saint-Germain-des-Prés –

75006 Paris – France

EXPERTISE AND EXPERIENCE

Michèle Reiser is a philosopher by

profession. In 1975, she started a weekly

literary show for young people on French TV

channel FR3, which she hosted for eight

years. She also had a literary column in

LeMonde de l’Éducation and later worked

regularly at ExLibris.

As a ﬁlmmaker, producer and TV ﬁlm

author, she produced documentaries,

proﬁles and major stories on key themes

broadcast on France 2, France 3, France 5,

Canal+ and Arte between 1983 and 2005,

including:

3 social issues – Les Trois Mousquetaires

à Shanghai and La Vie en rollers;

3 politics – she produced the Un Maire,

une Ville collection with Alain Juppé

inBordeaux and Jean-Claude Gaudin

inMarseille;

3 psychiatric issues – Le Cinéma de notre

anxiété, Un homme sous haute

surveillance, and Épilepsies;

3 romantic traditions – Les Amoureux

deShanghai, L’Amour au Brésil, and

LesAmoureux du Printemps de Prague;

3 child and adolescent development–

Premiers émois, Vis ta vie, ou

lesparents ça sert à rien, La vérité

sortde la bouche des enfants; and

3 proﬁles – Reiser, Juppé, François

Truffaut, correspondance à une voix.

She also directed musical and theatre

shows as well as operas, including

LeBarbier de Séville with Ruggero

Raimondi.

She founded Les Films du Pharaon and

served as its Director from 1998-2005.

In January2005, she was appointed a

memberof France’s Audiovisual Council by

the French President and presided over the

Audiovisual Production, Free Private

Channels, Advertising and Cinema and

Music working groups over her six-year

term.

From 2008 to 2012, she founded and

presided over the Commission on the image

of women in the media. At the end of each

year, the Commission published a report

emphasizing that although women have

visibility, they are still conﬁned to a

particular role and that men are still the

only ones whose knowledge is considered

legitimate. This observation brought to light

the notion of an “expert”, which will be

thesubject of the second report presented

in December2011 during a symposium

atthe French National Assembly titled

“Lesexpertes, bilan d’une année

d’autorégulation” (Experts: Results of One

Year of Self-Regulation). The Commission

was awarded permanent status by

thePrime Minister in 2011.

In 2010, she co-presided over the work

ofthe Commission on associations’ access

to audiovisual media, which produced a

report that was submitted to the Prime

Minister in January2011.

She was a memberof the Gender Equality

Observatory from 2010 to 2012.

In 2013, Michèle Reiser founded

theconsultancy ﬁrm, MRC.

She has chaired the jury of the Gulli Book

Prize since 2014.

In 2015, she created the Paris-Mezzo

classical music festival, which became

theFestival de Paris in 2017.

She published two novels with Albin

Michel: Dans le creux de ta main in 2008,

and Jusqu’au bout du festin in 2010, which

won the Prix de la révélation littéraire

in2010 from Aufeminin.com.

She was promoted to the rank of Chevalier

de l’Ordre de la Légion d’honneur in 2010

and named Chevalier de l’Ordre National

duMérite in 2004.

POSITIONS CURRENTLY HELD

(INFRANCE)

Radio France, memberof the Board of Directors

3 Radio France, memberof the Strategic Committee

OTHER POSITIONS AND OFFICES

MRC, Manager

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

None

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KATIE STANTON

Independent member of the Supervisory Board

American citizen.

Color Genomics – 831 Mitten Road, Burlingame

CA 94010 – United States

EXPERTISE AND EXPERIENCE

In June2016, Katie Stanton joined Color

Genomics as Chief Marketing Ofﬁcer.

Sheisa graduate of Rhodes College (1991)

and holds a Master’s degree from

theSchool of International Public Affairs

(SIPA) at Columbia University.

Katie Stanton is the founding partner

of#Angels, a Silicon Valley-based

investment group. Until 2016, she was

Global Media Vice President for Twitter.

Previously, she served as Vice President

forInternational Market Development with

Twitter, responsible for partnerships, user

growth and key operations in the strategic

markets of Europe, Latin America, the

Middle East and Africa. She participated in

the setting up of a numberof international

ofﬁces, including in the United Kingdom,

Japan, France, Spain, Brazil and Germany.

Before joining Twitter, she worked at the

White House, the US State Department,

Google and Yahoo.

POSITIONS CURRENTLY HELD

(OUTSIDE FRANCE)

Color Genomics, Chief Marketing Ofﬁcer

OTHER POSITIONS AND OFFICES

None

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

(OUTSIDEFRANCE)

Twitter, Global Media Vice President

3 Time Inc, Director

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Information about the nominee for the Supervisory Board submitted for the approval of the General Shareholders’ Meeting to be held on April15, 2019

CYRILLE BOLLORÉ

French citizen.

Tour Bolloré – 31-32, quai de Dion-Bouton –

92811 Puteaux Cedex – France

MANAGEMENT EXPERTISE

ANDEXPERIENCE

A graduate of ParisDauphine University,

Cyrille Bolloré holds a Master’s degree in

economics and management, with a major

in ﬁnance.

He was Deputy Manager of Supplies

andLogistics at Bolloré Energy from

November2007 to November2008,

andthen Manager from December2008

toAugust 2010. He was appointed Chief

Executive Ofﬁcer of Bolloré Energy

inSeptember2010 and Chairman

inOctober2011.

He became Vice Chairman and Managing

Director of Bolloré in August 2012 and

Deputy Chief Executive Ofﬁcer of Bolloré

inJune2013.

He was Chairman of Bolloré Logistics until

December2014, Chairman of Bolloré

Transport Logistics from November2014

toMay2016, and has been Chairman

ofBolloré Transport & Logistics Corporate

(formerly Bolloré Transport & Logistics)

since April2016.

In September2017, he was appointed

ViceChairman and Chief Executive Ofﬁcer

of Financière de l’Odet.

Cyrille Bolloré has experience in an integrated

multinational company and in the content, media

and communication businesses. His appointment

would also strengthen the Supervisory Board’s

expertise in issues relating to emerging markets,

in particular, Africa.

Cyrille Bolloré is Vincent Bolloré’s son.

POSITIONS CURRENTLY HELD

Bolloré Group (in France)

3 Bolloré Energy, Chairman of the Board of Directors

3 Bolloré Transport & Logistics Corporate

(formerlyBolloré Transport & Logistics), Chairman

3 BolloréSA (*), Deputy Chief Executive Ofﬁcer,

ViceChairman Managing Director

3 Compagnie du Cambodge (*), Chairman

oftheManagement Board

3 Soﬁbol, Chairman of the Supervisory Board

3 BlueElec, Chairman

3 Financière de l’Odet (*), Chief Executive Ofﬁcer,

ViceChairman and Director

3 Bolloré Participations, Director

3 Financière V, Director

3 Omnium Bolloré, Director

3 Société Industrielle et Financière de l’Artois (*),

Director

3 Blue Solutions (*), Director

3 Financière Moncey (*), permanent representative

ofCompagnie du Cambodge on the Board

3 Société Française Donges Metz, permanent

representative of Financière de Cézembre on the Board

3 Bolloré Africa Logistics, permanent representative

ofBolloré Transport & Logistics Corporate on the Board

3 Bolloré Logistics, permanent representative of Bolloré

Transport & Logistics Corporate on the Board

3 Sogetra, permanent representative of Globolding

ontheBoard

Bolloré Group (outside France)

3 Financière du Champ de Mars, Director

3 SFASA, Director

3 Nord Sumatra Investissements, Director

3 Plantations des Terres Rouges, Director

3 African Investment Company, Director

3 Bolloré Transport & Logistics Congo (formerly Bolloré

Africa Logistics Senegal), permanent representative

ofSociété de Participations Africaines on the Board

OTHER POSITIONS AND OFFICES HELD

(IN FRANCE)

None

OTHER POSITIONS AND OFFICES

(OUTSIDE FRANCE)

Socﬁnaf (*), permanent representative of Bolloré

Participations on the Board

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Bolloré Group (in France)

3 Bolloré Africa Railways, Director

3 Compagnie du Cambodge, Chairman and Member

ofthe Supervisory Board

3 Société Industrielle et Financière de l’Artois,

ChiefExecutive Ofﬁcer

3 Bolloré Africa Logistics, permanent representative

ofBolloré Transport Logistics on the Board

3 Bolloré Logistics, permanent representative

ofBolloréTransport Logistics on the Board

3 SDV Logistique Internationale, permanent

representative of Bolloré Transport Logistics

ontheBoard

3 Kerné Finance, permanent representative

ofBolloréTransport Logistics on the Board

3 La Charbonnière, permanent representative

ofBolloréEnergy on the Board

Other positions and ofﬁces held (in France)

3 Comité Professionnel des Stocks Stratégiques

Pétroliers (CPSSP), Vice Chairman

3 Société des Pipelines de StrasbourgSARL,

Memberofthe Management Board

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

(OUTSIDEFRANCE)

Bolloré Group (outside France)

3 CICASA (CH), Director

3 Satram HuilesSA (CH), Director

3 Camrail, permanent representative of Société

Financière Panafricaine on the Board

3 Congo Terminal, permanent representative

ofSocopaoon the Board

3 Douala International Terminal, permanent

representative of Société de Participations Africaines

on the Board

Other positions and ofﬁces held (outside France)

3 CIPCH BV (NL), Director

(*) Company whose securities are admitted to trading on a regulated market.

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1.1.1.3. Family Relationships

Vincent Bolloré is the father of Yannick Bolloré, both of whom are members

of the Supervisory Board. To the company’s knowledge, there are no other

family ties between any members of the Supervisory Board.

In addition, there is a family relationship between a Supervisory Board

memberand a Management Board memberin the person of Cédric de

Bailliencourt, the nephew of Vincent Bolloré. To the company’s knowledge,

there are no other family relationships between the Supervisory Board

members and the Management Board members.

1.1.1.4. Absence of Conﬂicts of Interest

To the company’s knowledge, there are no actual or potential conﬂicts of

interest between Vivendi and any memberof the Supervisory Board with

regard to their personal interests or other responsibilities.

Pursuant to the internal rules of the Supervisory Board, its members have a

duty to inform the Supervisory Board of any actual or potential conflict of

interest they have encountered, or might encounter in the future. These rules

also provide that the role of the lead independent memberis to coordinate

within the Corporate Governance, Nominations and Remuneration Committee,

procedures for identifying, managing and preventing any actual or potential

conﬂicts of interest within the Supervisory Board.

When the Supervisory Board discusses any matter relating, directly or

indirectly, to one of its members, the memberconcerned may be asked to

leave the Supervisory Board meeting during the voting and deliberations.

For matters relating to the Chairman of the Supervisory Board, the Vice

Chairman is temporarily responsible for chairing the meeting.

Any business relationships between the Havas Group, of which Yannick

Bolloré is Chairman and Chief Executive Ofﬁcer, the Bolloré Group of which

Vincent Bolloré is Chairman and Chief Executive Ofﬁcer and certain Vivendi

subsidiaries are ordinary business relationships entered into on an arm’s

length basis and are unlikely to create actual or potential conflicts of

interest between Vivendi and Vincent and Yannick Bolloré. For a description

and quantiﬁcation of these business relationships, please see Note 21.3

“Other Related-Party Transactions” in the Notes to the Consolidated

Financial Statements for the fiscal year ended December31, 2018,

presented in Chapter4 of this Annual Report.

1.1.1.5. Absence of Any Conviction for Fraud,

LiabilityAssociated with a Business Failure,

Public Accusation and/or Sanction

Over the past ﬁve years, to the company’s knowledge:

3 no memberof the Supervisory Board has been convicted of any

fraud-related matter;

3 no memberof the Supervisory Board has been associated with

bankruptcy, receivership or liquidation while serving on an adminis-

trative, management or supervisory body;

3 no ofﬁcial public accusation or sanction has been brought against or

imposed on any memberof the Supervisory Board; and

3 no memberof the Supervisory Board has been prevented by a court

from acting as a memberof an administrative, management or

supervisory body or from participating in the management of a

public issuer, with the exception, in the latter case, of the following:

– in the context of the bankruptcy proceedings against Quinta

Industries, of which Quinta Communications was an administrator at

the time of the company’s court-ordered liquidation on December15,

2011, the Versailles Court of Appeal, in its decision issued on

February20, 2018, confirmed the decision of the Nanterre

Commercial Court issued on December16, 2016 prohibiting Tarak

Ben Ammar from directing, managing, administering or controlling a

company for a period of three years from the date of that decision,

excluding currently held functions. In a statement received by

Vivendi on March7, 2019, Mr. Tarak Ben Ammar indicated that, in a

rectifying court order issued on April10, 2018, the Versailles Court of

Appeal speciﬁed that the current functions of Mr. Tarak Ben Ammar

as corporate officer were not excluded from the court-ordered

prohibition and that he had lodged two appeals with the French

Supreme Court (Cour de cassation) and requested the lifting of the

prohibition before the Commercial Court of Nanterre. He also stated

that pending the outcome of these appeals, he had resigned from all

his functions as corporate officer, with the exception of those of

Supervisory Board member, due to the nature of such function; and

– on January22, 2014, pursuant to Articles 187 ter and 187

quinquies of Italian Legislative Decree No.58/1998 (Testo Unico

della Finanza), Financière du Perguet and Financière de l’Odet, as

well as Vincent Bolloré, were jointly and severally ordered to pay

an administrative fine of €1million each in relation to the

companies’ acquisition of 3% of the capital in the Italian company

Premafin (excluding any personal acquisition), and were

prohibited from holding corporate ofﬁcer positions in Italy for a

period of 18 months, which had no effect as the latter held no

such ofﬁcer positions on that date.

1.1.1.6. Agreements between the Company

andMembers of the Supervisory Board –

Service Agreements

At its meeting held on September2, 2015, upon the recommendation of the

Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board authorized a service agreement between Vivendi and

Dominique Delport (non-independent member) for five years starting

October1, 2015.

Under the terms and conditions of this service agreement, which was

entered into following approval of the shareholders of the company at the

General Shareholders’ Meeting of April21, 2016, Dominique Delport

rendered services and advice on the creation and use of new digital content

tools as part of the development of Vivendi Content and Dailymotion.

In the context of digital strategy development, which requires both internal

Vivendi group resources and external services, particularly with regard to

original and unique digital content formats, the Supervisory Board

determined that it was in the company’s interest to use Dominique Delport’s

services considering his vast experience in these ﬁelds.

Total annual fees were set at a ﬁxed amount of €300,000.

Upon the recommendation of the Corporate Governance, Nominations and

Remuneration Committee, on May11, 2017, the Supervisory Board decided

to remove the €200,000 maximum variable component set forth in this

agreement. The amendment to this agreement with Dominique Delport was

approved by the Combined Shareholders’ Meeting held on April19, 2018.

The service agreement was terminated on March26, 2018 and the prorated

amount paid to Dominique Delport in 2018 was €75,000.

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13 13

In addition, on March26, 2018, Dominique Delport ceased to exercise any

operational duties within the Vivendi group. As a result, pursuant to the

terms and conditions of this agreement, he no longer beneﬁts from a long-

term incentive plan open to executives of the group who are most involved

in the development of Dailymotion, which plan is indexed on the growth of

Dailymotion’s enterprise value as of June30, 2020, based on a third-party

appraisal, compared to its acquisition value (€271.25million) (1). For

additional information on this matter, please see the Statutory Auditors’

special report on related-party agreements and commitments in

Chapter4.4.7. of this Annual Report.

1.1.1.7. Loans and Guarantees Granted

toMembersofthe Supervisory Board

The company has not granted any loans or issued any guarantees to any

memberof the Supervisory Board.

1.1.1.8. Internal Regulations and Jurisdiction

oftheSupervisory Board

Authority and Functions of the Supervisory Board pursuant

toFrench Law and the Company’s By-Laws

The Chairman and Vice Chairman of the Supervisory Board, elected for a

period not exceeding their terms as members of the Supervisory Board, are

responsible for convening the Supervisory Board as often as is required in

the interest of the company and for chairing its debates.

Upon the proposal of the Corporate Governance, Nominations and

Remuneration Committee, the Supervisory Board appoints the members of

the Management Board and sets the policy and criteria for determining,

allocating and granting their compensation elements. The members may be

removed at any time.

The Supervisory Board reviews and determines the company’s strategic

plans. It authorizes the Management Board to implement substantial

acquisitions, sales, internal restructuring transactions and other transactions

that could have an impact on the group’s financial structure, including

strategic partnership agreements. It also reviews the company’s corporate

social responsibility (CSR) policy.

The Supervisory Board oversees the Management Board’s management of

the company in compliance with the law and the company’s by-laws.

It may proceed with any veriﬁcation or control checks it deems appropriate

and is provided with all documents it deems useful to the fulﬁllment of its

purpose and functions.

Internal Regulations

The Internal Regulations of the Supervisory Board is a purely internal

document intended to supplement the company’s by-laws by setting out the

Supervisory Board’s operational procedures and the rights and duties of its

members. It is not enforceable against third parties and may not be invoked

by them against members of the Supervisory Board.

Functions and Powers of the Supervisory Board

undertheInternalRegulations

Based upon the recommendations of the Corporate Governance, Nominations

and Remuneration Committee, the Supervisory Board issues opinions on the

proposed candidacies of Vivendi’s Corporate Ofﬁcers for positions as Directors

or members of the Supervisory Boards in other entities.

The following transactions require the prior approval of the Supervisory

Board:

3 disposals or sales of all or a portion of investments in companies,

where any individual transaction exceeds €300million;

3 issues of securities that, directly or indirectly, give rights to the

share capital of the company or issues of convertible bonds in

excess of €100million;

3 issues of non-convertible bonds in excess of €500million, except in

respect of transactions for the purpose of renewing debt obligations

on more favorable terms than those initially granted to the company;

3 share repurchase programs proposed at the Ordinary Shareholders’

Meeting, and ﬁnancing transactions that are material or that may

substantially alter the ﬁnancial structure of the company, with the

exception of ﬁnancing to optimize the company’s debt structure;

3 the grant of sureties, endorsements and guarantees by the Manage-

ment Board in favor of third parties, provided that each individual

obligation does not exceed €300million and that together all

obligations do not exceed €1billion. This authorization, which is given

to the Management Board for 12 months, is reviewed every year;

3 substantial internal restructuring transactions, transactions falling

outside the company’s publicly disclosed strategy and strategic

partnership agreements;

3 the setting up of stock option plans, performance share plans or any

other mechanisms with a similar purpose or effect;

3 the grant of stock options or performance shares to members of the

Management Board, and the determination of the numberof shares

they must own during their terms of ofﬁce;

3 the submittal of proposals to the General Shareholders’ Meeting to

amend the company’s by-laws, allocate proﬁts and set the dividend

amount; and

3 the setting of the compensation policy and its components for the

members of the Management Board, and the drafting of the

sections of the corporate governance report and resolutions that

relate to such compensation policy to be submitted to the General

Shareholders’ Meeting.

1.1.1.9. Role and Responsibilities of the Lead

Independent Memberof the Supervisory Board

Upon the recommendation of the Corporate Governance, Nominations and

Remuneration Committee, the Supervisory Board may designate a lead

independent memberfrom among the members qualiﬁed as independent by

the Supervisory Board.

The lead independent membercarries out this role for the term of his or her

ofﬁce as a memberof the Supervisory Board, unless the Board decides to

terminate the role or the lead independent memberno longer qualiﬁes as an

independent member, for whatever reason.

The lead independent memberis responsible for:

3 assessing the Board’s operating procedures: the lead independent

memberis responsible for overseeing the assessment process, in

association with the General Counsel, and for reporting on said

assessment to the Board, in association with the Corporate Governance,

Nominations and Remuneration Committee;

(1) Assuming an increase in Dailymotion’s value, the amount of his compensation under the incentive plan would be capped at 1% of this increase.

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3 preventing conflicts of interest: working within the Corporate

Governance, Nominations and Remuneration Committee, the lead

independent membercoordinates the work carried out to identify,

review and manage any actual or potential conﬂicts of interest within

the Supervisory Board, informs the Chairman of any such conﬂicts of

interest and reports to the Board on the work undertaken; and

3 ensuring the conditions necessary for the Board’s smooth operation:

the lead independent memberensures compliance with the internal

rules of the Supervisory Board and with the recommendations set

out in the AFEP/MEDEF Code. He or she may make any suggestion

or recommendation he or she deems useful. He or she ensures that

Board members are able to fulﬁll their duties in the best possible

manner and in the interests of all shareholders and that they receive

sufﬁcient information to fulﬁll such duties.

1.1.1.10. Supervisory Board Information and Decisions

Members of the Supervisory Board receive all the information necessary to

perform their duties. Before any meeting, they may request any further

documents they consider useful. Members of the Supervisory Board have

the right to obtain information under the procedures set forth below.

Information Provided Prior to Meetings of the Supervisory Board

The Chairman of the Supervisory Board, with the assistance of the General

Counsel, must send appropriate information to the other members of the

Supervisory Board, depending on the items on the agenda.

Information Provided to the Supervisory Board on a Regular Basis

In addition to the regular information provided to the Supervisory Board by

the Management Board regarding the company’s operations and signiﬁcant

events, as well as on Vivendi’s ﬁnancial position, cash ﬂow and obligations,

the Management Board provides a quarterly report to the Supervisory Board

on its activities and the group’s operations.

Requests for information from members of the Supervisory Board relating to

speciﬁc matters are sent to the Chairman and General Counsel who, along

with the Chairman of the Management Board, are responsible for responding

to such requests as soon as reasonably practicable. To supplement the

information provided to them, members of the Supervisory Board are entitled

to meet with the Management Board and the senior managers of the

company, with or without the presence of members of the Management

Board, after notice has been given to the Chairman of the Supervisory Board.

Collective Nature of the Supervisory Board’s Decisions

andConﬁdentiality of Information

The Supervisory Board acts as a body with collective responsibility. Its

decisions are the responsibility of all of its members. Members of the

Supervisory Board and any person attending meetings of the Supervisory

Board are bound by strict conﬁdentiality obligations with respect to any

company information they receive in the context of meetings of the

Supervisory Board and any of its committees, or conﬁdential information

presented by the Chairman of the Supervisory Board or Management Board

and identiﬁed as such.

If the Supervisory Board is aware of speciﬁc conﬁdential information that, if

made public, could have a material impact on the share price of the

company or the companies under its control, within the meaning of Article

L.233-3 of the French Commercial Code, members of the Supervisory Board

must refrain both from disclosing such information to any third party and

from dealing in the company’s securities until such information has been

made public.

Pursuant to Article10.3 of the AFEP/MEDEF Code, the Supervisory Board

meets at least once a year without any of the Management Board members

being present. In addition, whenever members express the need, and

depending on the agenda, the Supervisory Board is entitled to meet without

the presence of its Chairman.

1.1.1.11. Activities of the Supervisory Board in 2018

In 2018, the Supervisory Board met seven times, with an average

attendance rate of 96.4%.

It considered among others, the following matters:

3 the review of the operational progress of the group’s main business

activities;

3 the group’s internal and external growth prospects, main strategic

initiatives and opportunities;

3 the regular review of acquisition and disposal projects;

3 the disposal of Vivendi’s interest in Ubisoft;

3 the unwinding of the hedge on the interest held by Vivendi in the

Fnac-Darty Group;

3 the review and completion of preliminary transactions relating to

potential changes in Universal Music Group’s share ownership

structure;

3 the plan to sell part of Universal Music Group’s share capital;

3 acquisition of 100% of the share capital of Editis;

3 the monitoring of changes in the governance of Telecom Italia;

3 the review of the plan to convert the company into a European

Company;

3 the assessment of the quality and structure of the group’s balance

sheet;

3 the review and approval of the proposals and work of the Audit

Committee, as applicable;

3 the review of the consolidated and statutory ﬁnancial statements for

ﬁscal year 2017, the 2018 budget, the information contained in the

2018 half-year ﬁnancial statements approved by the Management

Board and the 2018 quarterly revenue information;

3 the group cash position;

3 the renewal of the EMTN program;

3 the review of related-party agreements approved during previous

periods;

3 the review of the quarterly business reports prepared by the

Management Board;

3 the review and approval of the proposals and work of the Corporate

Governance, Nominations and Remuneration Committee, as

applicable;

3 the composition of the Supervisory Board and its committees;

3 the renewal of the terms of office of the Management Board’s

members;

3 the review of succession plans within the group;

3 the assessment of the performance of the Supervisory Board and its

committees;

3 the compensation of the Chairman of the Supervisory Board;

3 the setting of the compensation of the Chairman and members of

the Management Board;

3 the grant of performance shares to members of the Management

Board;

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13 13

3 the review of the company’s equal opportunities, gender parity and

diversity policy;

3 the employee shareholding policy and status;

3 the share capital increases reserved for employees in 2018 and

2019;

3 the review and approval of the proposals and work of the CSR

Committee, as applicable;

3 the review of the company’s corporate social responsibility (CSR)

policy;

3 the approval of the resolutions relating to the compensation of the

members of the Supervisory Board and the Management Board,

submitted to the General Shareholders’ Meeting held on April19, 2018;

3 the review of the resolutions approved by the Management Board

and submitted to the General Shareholders’ Meeting held on

April19, 2018; and

3 the monitoring of ongoing legal investigations and proceedings.

1.1.1.12. Assessment of the Supervisory Board’s

Performance

On a regular basis, and at least once every three years, the Supervisory

Board undertakes a formal assessment of its performance alongside the

Corporate Governance, Nominations and Remuneration Committee.

At its meeting on February14, 2019, the Supervisory Board conducted an

assessment of its performance based on a questionnaire issued to each

memberof the Supervisory Board and through individual interviews led by

Vivendi’s General Counsel and supervised by the lead independent member.

The review highlighted that the Supervisory Board members:

3 were satisfied with the size of the Board and its composition in

terms of age, nationality and diversity;

3 were satisﬁed with the length of notice given for Board meetings,

the way in which Board meetings are conducted, the consideration

given to their requests, and the allocation of work between the

Board and its Committees;

3 felt that they received sufﬁcient information to fulﬁll their role;

3 were of the view that the Board dealt with issues and subjects

within its scope and that its involvement in the company’s major

decisions was satisfactory, particularly in relation to ﬁnancial and

strategic issues, but also in the areas of non-ﬁnancial information

and corporate social responsibility; and

3 noted that the Supervisory Board was mindful about promoting

value creation over the long term.

1.1.1.13. Committees of the Supervisory Board

Organization and Operating Procedures of the Committees

The Supervisory Board has established three specialized committees and

decided on their composition and functions, namely: (i) the Audit

Committee, (ii) the Corporate Governance, Nominations and Remuneration

Committee, and (iii) the CSR Committee. The members of these committees

are indicated in the respective Composition sections below. The functions of

the committees may not include delegated powers granted to the

Supervisory Board by law or pursuant to the company’s by-laws, or reduce

or limit the powers of the Management Board. Within the scope of the

powers granted to it, each committee issues proposals, recommendations

or advice, as required.

SUPERVISORY BOARD

Audit

Committee

CSR

Committee

Corporate

Governance,

Nominations and

Remuneration

Committee

80%

independent

(a)

67%

independent

(a)

members

meetings /

100%

attendance rate

in 2018

meetings /

100 %

attendance rate

in 2018

67%

independent

(a)

meetings /

96.6 %

attendance rate

in 2018

members

(a) Excluding the member representing employees.

(b) Excluding the member representing employee shareholders and the member representing employees.

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1.1. Administrative, management and supervisory bodies

CORPORATEGOVERNANCEOFVIVENDI

The Supervisory Board has appointed a Chairman for each committee. The

three Committees of the Supervisory Board are comprised of Supervisory

Board members, appointed by the Supervisory Board. The members are

appointed on a personal basis and cannot be represented by a delegate.

Each committee determines the frequency of its meetings, which are held

at the registered ofﬁce of the company or in any other place that may be

agreed by the Chairman of the committee. Committee meetings can also be

held using videoconferencing or other telecommunications means.

The Chairman of each committee sets the agenda for meetings after

consultation with the Chairman of the Supervisory Board. Minutes of each

committee meeting are taken under the authority of the Chairman of the

relevant committee, and are sent to the members of the committee and to

all other members of the Supervisory Board. Information about the

committees’ work is included below.

Each committee may request from the Management Board any document it

deems necessary to fulﬁll its role and carry out its functions. The committee

may carry out or commission surveys to provide information for the Supervisory

Board’s discussions, and may request external consulting expertise as required.

The Chairman of each committee may invite all members of the Supervisory

Board to attend a committee meeting. However, only committee members

can take part in its deliberations. Each committee may decide to invite any

individual of its choice to its meetings, as needed.

In addition to permanent committees, the Supervisory Board may establish

internal committees comprised of all or some of its members, each for a

limited term for transactions or assignments that are exceptional in terms of

their importance or nature.

Audit Committee

Composition

The Audit Committee is currently composed of ﬁve members, four of whom

are independent and all of whom have ﬁnance or accounting expertise. Its

members are: Cathia Lawson-Hall (Chairwoman), Tarak Ben Ammar, Vincent

Bolloré, Michèle Reiser and Katie Stanton.

Activity

Following their appointment, members of the committee are informed as

required of the accounting, ﬁnancial and operational standards used within

the company and the group.

In 2018, the Audit Committee met four times, in the presence of the

company’s Statutory Auditors, with an attendance rate of 100%. The Audit

Committee received information from, among other sources, the company’s

Statutory Auditors, the Chief Financial Officer, the General Counsel, the

Head of Legal Affairs, the Senior Vice President of Financing and Treasury,

the Senior Vice President of Planning and Group Controller, the Senior Vice

President of Taxes, and the Senior Vice President of Audit and Risks.

Its work primarily consisted of a review of:

3 the financial statements for fiscal year 2017, the 2018 half-year

ﬁnancial statements, the Statutory Auditors’ reports and the 2018

ﬁrst and third quarter revenue information;

3 the 2018 budget;

3 the group’s ﬁnancial policy and ﬁnancial position;

3 asset impairment tests;

3 the group’s financial management (investment, debt and foreign

exchange);

3 the process for monitoring changes in accounting standards;

3 the internal audit of the headquarters and subsidiaries, and internal

control procedures within the group;

3 the analysis of risks and associated key audits;

3 the report of the Supervisory Board on corporate governance;

3 tax risks and changes in France’s tax laws and regulations;

3 the insurance program;

3 pension commitments;

3 the re-appointment of the Statutory Auditors;

3 the non-audit services provided by the Statutory Auditors and their

fees;

3 the implementation and deployment of the compliance program

relating to anti-corruption measures, the duty of vigilance and

personal data protection;

3 the risk map and the 2019 audit plan; and

3 the monitoring of ongoing legal investigations and proceedings.

Corporate Governance, Nominations and Remuneration Committee

Composition

The Corporate Governance, Nominations and Remuneration Committee

currently comprises four members, two of whom are independent, i.e., a

majority of its members are independent (1). Its members are Philippe

Bénacin (Chairman), Vincent Bolloré, Paulo Cardoso and Aliza Jabès.

Activity

In 2018, the Corporate Governance, Nominations and Remuneration

Committee met ﬁve times, with an attendance rate of 96.6%.

Its work primarily focused on the following matters:

3 the compensation of the Chairman of the Supervisory Board;

3 the ﬁxed and variable compensation of members of the Management

Board and its Chairman;

3 the 2017 bonuses paid in 2018;

3 the expenses of the Corporate Ofﬁcers;

3 the compensation policy for 2018;

3 review of the resolutions approved by the Management Board and

the Supervisory Board and submitted to the General Shareholders’

Meeting held on April19, 2018;

3 the implementation of an annual performance share plan in 2018;

3 the implementation of a capital increase reserved for employees in

2018;

3 the main features of the capital increase and the leveraged plan

reserved for group employees for 2019;

3 the appointment of Yannick Bolloré as Chairman of the Supervisory

Board;

3 the composition of the Supervisory Board and its committees;

3 the renewal of the terms of office of the Management Board’s

members and its Chairman;

3 the review of the independence of the Supervisory Board members;

3 the assessment of the performance of the Supervisory Board and its

committees;

(1) Excluding the memberrepresenting employees.

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1.2. Management Board

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3 the review of the succession plans within the group and the

retention of key employees; and

3 the review of the company’s equal opportunities, gender parity and

diversity policy.

Corporate Social Responsibility (CSR) Committee

Composition

The CSR Committee is currently composed of ﬁve members, two of whom

are independent. Its members are Paulo Cardoso (Chairman), Véronique

Driot-Argentin, Cathia Lawson-Hall, Sandrine Le Bihan and Michèle Reiser.

Activity

In 2018, the CSR Committee met twice, with an attendance rate of 100%.

Its work primarily focused on the following matters:

3 risk ranking and the non-ﬁnancial performance statement;

3 the diversity policy; and

3 the “Create Joy” solidarity program.

1.2. Management Board

MANAGEMENT BOARD

members

(average age)

meetings in 2018

99%

attendance rate

1.2.1. GENERAL PROVISIONS

Pursuant to Article12 of Vivendi’s by-laws, the Management Board may be

composed of a minimum of two and a maximum of seven members.

Members of the Management Board are appointed by the Supervisory

Board to serve four-year terms. The terms of office of members of the

Management Board expire no later than at the close of the General

Shareholders’ Meeting held to approve the financial statements for the

ﬁscal year during which the memberreaches the age of 68. However, the

Supervisory Board may extend that member’s term, on one or more

occasions, for a period not exceeding two years in total (Article12 of

Vivendi’s by-laws).

Pursuant to Article14 of Vivendi’s by-laws, each memberof the Management

Board may choose to attend meetings by videoconferencing or telecom-

munication means.

As of 2015, each memberof the Management Board acts as an advisor to

one or more members of the Supervisory Board. This system fosters greater

dialog and exchange between Supervisory Board and Management Board

members.

1.2.2. COMPOSITION OF THE MANAGEMENT BOARD

Members of the Management Board are appointed by the Supervisory

Board upon the recommendation of the Corporate Governance, Nominations

and Remuneration Committee. The Supervisory Board ensures that the

membership of the Management Board enables it to implement the group’s

strategy in the best interests of all shareholders and other stakeholders.

Management Board members may hold a wide range of positions within the

Vivendi group or its core shareholder.

The Management Board currently has seven members, whose terms of

ofﬁce are due to expire on June23, 2022 (1). For detailed information about

the Management Board members, please see below under “Main Activities

of the Current Members of the Management Board”.

When Vivendi was fully consolidated in the ﬁnancial statements of BolloréSA,

the Supervisory Board, upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, decided that it was in the interests

of all Vivendi shareholders for the Management Board to benefit from the

additional experience of two representatives of the Bolloré Group, in charge of

inter-group coordination in relation to accounting standards and financial

communications, respectively. During 2018, the remit of the representatives in

question, Gilles Alix and Cédric de Bailliencourt, was extended to include more

operational aspects of the Vivendi group’s activities, particularly in Africa. In

addition, some Management Board members may hold operational positions

within the group, notably at Gameloft, Groupe Vivendi Africa and Vivendi Village.

(1) Terms of ofﬁce renewed for a four-year period starting June24, 2018, following a decision made by the Supervisory Board on May17, 2018.

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1.2. Management Board

CORPORATEGOVERNANCEOFVIVENDI

Management Board Members

Name Primary position Age

Date of

initial

appointment and

most recent

re-election

Numberof

positions held in

listed companies

outside of the

group(*)

Individual

attendance rate

of Management

Board members

Numberof shares

held directly or

through the PEG (**)

Arnaud de Puyfontaine Chairman of the Management Board

Memberof the Management Board

54 04/23/2018

06/24/2014

04/23/2018

11/26/2013 1 100% 201,112

Gilles Alix Memberof the Management Board

andSeniorVice President responsible

forinter-group coordination

60 04/23/2018

09/01/2017

0 100% 1,826

Cédric de Bailliencourt Memberof the Management Board

andSeniorVice President responsible

forinvestor relations and inter-group ﬁnancial

communications

49 04/23/2018

09/01/2017

1 93% 2,573

Frédéric Crépin Memberof the Management Board,

GroupGeneral Counsel and Group Chief

Compliance Ofﬁcer

49 04/23/2018

11/10/2015

0 100% 159,195

Simon Gillham Memberof the Management Board, Chairman

of Vivendi Village and Senior Executive Vice

President, Communications of Vivendi

63 04/23/2018

11/10/2015

1 100% 119,449

Hervé Philippe Memberof the Management Board

andChiefFinancial Ofﬁcer

60 04/23/2018

06/24/2014 1 100% 41,586

Stéphane Roussel Memberof the Management Board

andChiefOperating Ofﬁcer and Chairman

andChief Executive Ofﬁcer of Gameloft

57 04/23/2018

06/24/2014

1 100% 139,542

(*) Numberof positions held, taking into account the exemptions set forth in the French Commercial Code and the AFEP/MEDEF Code. For a detailed list of current and

previous positions, please see the section entitled “Main Activities of the Current Members of the Management Board” below.

(**) Units held in the Group Savings Plan (PEG) are valued based on Vivendi’s share price at the close of business on December31, 2018, i.e., €21.280.

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1.2. Management Board

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Main Activities of the Current Members of the Management Board

ARNAUD DE PUYFONTAINE

Chairman of the Management Board

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Arnaud de Puyfontaine is a graduate of

theESCP (1988), the Multimedia Institute

(1992) and Harvard Business School (2000).

He started his career as a consultant at

Arthur Andersen and then in 1989 worked

as a project manager at Rhône-Poulenc

Pharma in Indonesia.

In 1990, he joined Le Figaro as Deputy

Director.

In 1995, as a memberof the founding team

of the Emap group in France, he headed

Télé Poche and Studio Magazine, managed

the acquisition of Télé Star and Télé Star

Jeux, and launched the Emap Star Division,

before becoming Chief Executive Ofﬁcer

ofEmap France in 1998.

In1999, he was appointed Chairman

andChief Executive Ofﬁcer of Emap France,

and, in 2000, joined the Executive Board

ofEmap plc. He led several M&A deals,

and concomitantly, from 2000 to 2005,

served as Chairman of EMW, the Emap/

Wanadoo digital subsidiary.

InAugust 2006, he was appointed

Chairman and Chief Executive Ofﬁcer

ofEditions Mondadori France.

InJune2007, he became General Manager

ofall digital business for the Mondadori

group.

In April2009, Arnaud de Puyfontaine joined

the US media group Hearst as Chief

Executive Ofﬁcer of its UK subsidiary,

Hearst UK.

In 2011, on behalf of the Hearst group,

heled the acquisition from the Lagardère

group of 102 magazines published abroad,

and, in June2011, was appointed Executive

Vice President of Hearst Magazines

International. In August 2013, he was

appointed Managing Director of Western

Europe. He has also been Chairman ofESCP

Europe Alumni.

From Januaryto June2014, Arnaud de

Puyfontaine was a memberof the Vivendi

Management Board and Senior Executive

Vice President in charge of its media and

content operations. Since June24, 2014,

hehas been Chairman of the Management

Board.

POSITIONS CURRENTLY HELD

Vivendi group (in France)

3 Universal Music France (SAS), Chairman

oftheSupervisory Board

3 Canal+ Group, memberof the Supervisory Board

3 Havas, Director

3 Antinea 6, Chairman of the Board of Directors

3 Editis Holding, Chairman of the Board of Directors

OTHER POSITIONS AND OFFICES

(INFRANCE)

Innit, memberof the Advisory Committee

3 French-American Foundation, Honorary Chairman

OTHER POSITIONS AND OFFICES

(OUTSIDE FRANCE)

Telecom Italia SpA (*) (Italy), Director

andmemberofthe Strategic Committee

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Studiocanal, Memberof the Supervisory Board

3 Canal+ Group, Chairman of the Supervisory Board

3 Canal+ Group, Vice Chairman of the Supervisory Board

3 Banijay Group (SAS), permanent representative

ofVivendi on the Supervisory Committee

3 Kepler, Independent Director

3 Melty group, Director

3 French-American Foundation, Chairman

3 ESCP Europe Alumni, Chairman

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

(OUTSIDEFRANCE)

Telecom Italia SpA (*) (Italy), Executive Chairman,

Director and Vice Chairman of the Board of Directors

3 GVT ParticipaçoesSA (Brazil), Chairman of the Board

ofDirectors

3 The National Magazine Company Limited

(UnitedKingdom), Director

3 Hearst-Rodale UK Limited (United Kingdom), Director

3 Handbag.com Limited (United Kingdom), Director

3 Hearst Magazines UK 2012-1 (United Kingdom),

Director

3 F.E.P. (UK) Limited (United Kingdom), Director

3 COMAG (Condé Nast Magazine Distributors Limited)

(United Kingdom), Director

3 PPA (Professional Publishers Association)

(UnitedKingdom), Director

3 Compagnie Internationale de Presse et de Publicité

(Monaco), Director

3 Hearst Magazines, S.L. (Spain), Director

3 Hearst Magazines Italia S.p.A (Italy), Director

3 Iceberg lux, memberof the Advisory Committee

3 Gloo Networks plc.(*) (Great Britain), Non-Executive

Chairman

3 Schibsted Media group, Independent Director

(*) Listed on a regulated market.

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1.2. Management Board

CORPORATEGOVERNANCEOFVIVENDI

GILLES ALIX

Member of the Management Board

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Gilles Alix is a graduate of the EM Lyon

(École Supérieure de Commerce de Lyon)

and is a certiﬁed public accountant.

Hehasbeen the Chief Executive Ofﬁcer

ofthe Bolloré Group since 2006.

He began his auditing career at BEFEC in

1982. He joined the Bolloré Group in 1987

as Chief Financial Ofﬁcer of the ﬁlm division

based in Brittany. His functions were then

extended to all industrial divisions, after

which he was appointed Director of

Management Control of the group in 1994.

From 1997, Gilles Alix held various

positions in the transport and logistics

division of the group, notably withSAGA

and DELMAS, where he served

asChairman from 1999 to 2006.

Gilles Alix was appointed to the Vivendi

Management Board on September1, 2017.

He is a Chevalier de la légion d’honneur

and a Chevalier de l’Ordre national

duMérite.

POSITIONS CURRENTLY HELD

Vivendi group (in France)

3 Vivendi Group Africa (SAS), Chairman

3 Havas Media France (SA), Director

Bolloré Group (in France)

3 BlueElec (SAS), Chief Executive Ofﬁcer

3 Société Autolib’ (SAS), Chairman

3 Bluealliance (SAS), Chairman

3 Blue Project (SAS), Chairman

3 Société Bordelaise Africaine (SAS), Chairman

3 BlueSun (SAS), Chairman

3 Compagnie des Tramways de Rouen, Director

3 Bolloré Africa Logistics, Director

3 Bolloré Logistics (SAS), Director

3 Soﬁbol, memberof the Supervisory Board

3 BolloréSA (*), permanent representative

ofBolloréParticipations on the Board of Directors

3 Bolloré Energy, permanent representative

ofBolloréonthe Board of Directors

3 Financière de Cézembre, permanent representative

ofBolloré on the Board of Directors

3 MP 42, permanent representative of Bolloré

ontheBoard of Directors

3 Société Française Donges-Metz, permanent

representative of Bolloré on the Board of Directors

3 Socotab, permanent representative of MP 42

ontheBoard of Directors

Bolloré Group (outside France)

3 African Investment Company, Chairman of the Board

ofDirectors

3 Participaciones y Gestion FinancieraSA, Chairman

ofthe Board of Directors

3 Pargeﬁ Helios Iberica Luxembourg, Chairman

oftheBoard of Directors

3 Bolloré Transport & Logistics Gabon (formerly Bolloré

Africa Logistics Gabon), Director

3 Blue Solutions Canada Inc. (formerly Bathium Canada

Inc.), Director

3 Empresa de Manutencion y Consignation MaritimaSA,

Director

3 Internacional de Desarrollo PortuariosSA, Director

3 Movimientos Porturios InternacionalesSA, Director

3 Operativa Internacional PorturiaSA, Director

3 Participaciones e Inversiones PorturiasSA, Director

3 Participaciones Ibero InternacionalesSA, Director

3 PDI, Director

3 Progosa Investment, Director

3 P.T.R. FinancesSA, Director

3 SorebolSA, Director

3 SNO Investments Ltd, Director

3 Pargeﬁ Helios Iberica Luxembourg, Director

3 Sorebol UK Ltd, Director

3 Douala International Terminal, permanent

representative of SocopaoSA on the Board of Directors

3 Bolloré Transport & Logistics Senegal (formerly Bolloré

Africa Logistics Senegal), permanent representative

ofSociété de Participations Africaines on the Board

ofDirectors

3 Conakry Terminal, permanent representative of Société

de Participations Africaines on the Board of Directors

3 Bolloré Transport & Logistics Congo (formerly Bolloré

Africa Logistics Congo), permanent representative

ofSociété d’Exploitation Portuaire Africaine

ontheBoard of Directors

3 Bolloré Transport & Logistics Cameroun (formerly

Bolloré Africa logistics Cameroun), permanent

representative of SDV Mining Antrak Africa

ontheBoard of Directors

3 Congo Terminal, permanent representative of SDV

Mining Antrak Africa on the Board of Directors

3 La Forestière Équatoriale, permanent representative

ofSociété Bordelaise Africaine on the Board

ofDirectors

3 Camrail, permanent representative of SCCF

ontheBoard of Directors

3 JSA Holding B.V., Managing Director

3 Blue Congo, Chairman of the Management Committee

OTHER POSITIONS AND OFFICES

(INFRANCE)

Fred & Farid Group (SAS)

POSITIONS AND OFFICES PREVIOUSLY

HELD THAT HAVE EXPIRED DURING

THE LAST FIVE YEARS

Havas, permanent representative of Financière

deSainte-Marine on the Board of Directors

3 Bluecub (SAS), Chairman

3 Bluely (SAS), Chairman

3 Bluelib (SAS), Chairman

3 Bluestorage, Chairman

3 Blue Sun, Chairman and Chief Executive Ofﬁcer

3 Whaller (SAS), Director

3 Bolloré Logistics (SAS), Director

3 Blue Project, memberof the Management Committee

3 Havas Media Africa (SAS), memberof the Executive

Board

3 Blues Solutions, Chief Executive Ofﬁcer

3 Bolloré Transport & Logistics Corporate,

ChiefExecutiveOfﬁcer

3 Bluebus, Director

3 Samrail, Director

3 W&Cie, permanent representative of Bolloré

3 CD Africa, memberof the Strategic Committee

3 Bolera Minera, Director

3 Bolloré Telecom, memberof the Management

Committee

3 Euro Media Group, Director

3 I.E.R., Chairman

(*) Listed on a regulated market.

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CÉDRIC DE BAILLIENCOURT

Member of the Management Board

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Cédric de Bailliencourt is a graduate

oftheBordeaux Institut d’Études Politiques.

He holds a Master’s degree in Political

andSocial Communications from

theParis-Sorbonne I University.

He has served as the Bolloré Group’s Chief

Financial Ofﬁcer since 2008, as Vice

Chairman of Bolloré and, since 2002,

asVice Chairman and Chief Executive

Ofﬁcer of Financière de l’Odet. He joined

the Bolloré Group in 1996 as Chairman

ofBolloré Participations.

Cédric de Bailliencourt is a member

ofVallourec’s Supervisory Board

andapermanent representative

ofCompagnie du Cambodge on the

Supervisory Board of Banque Hottinguer.

Cédric de Bailliencourt was appointed

tothe Vivendi Management Board

onSeptember1, 2017.

POSITIONS CURRENTLY HELD

Bolloré Group (in France)

3 Financière de l’Odet (*), Vice Chairman and Deputy

Chief Executive Ofﬁcer

3 BolloréSA (*), Vice Chairman of the Board of Directors

3 Compagnie du Cambodge (*), Vice Chairman

oftheSupervisory Board

3 Compagnie des Tramways de Rouen, Chairman

oftheBoard of Directors

3 Financière Moncey (*), Chairman of the Board

ofDirectors

3 Société des Chemins de Fer et Tramways du Var

etduGard, Chairman of the Board of Directors

3 Société Industrielle et Financière de l’Artois (*),

Chairman of the Board of Directors

3 Compagnie des Glénans, Chairman

3 Compagnie de Tréguennec, Chairman

3 Compagnie de Guénolé, Chairman

3 Compagnie de Guilvinec, Chairman

3 Compagnie de Pleuven, Chairman

3 Financière de Kerdevot, Chairman

3 Financière V, Chairman

3 Financière de Beg Meil, Chairman

3 Financière d’Ouessant, Chairman

3 Financière du Perguet, Chairman

3 Financière de Pont-Aven, Chairman

3 Imperial Mediterranean, Chairman

3 Compagnie de Pont-l’Abbé, Chairman

3 Financière de Quimperlé, Chairman

3 Compagnie de Concarneau, Chairman

3 Compagnie de l’Argol, Chairman

3 Socarﬁ, Manager

3 Compagnie de Malestroit, Manager

3 Bolloré Participations, Director

3 Omnium Bolloré, Director

3 Compagnie du Cambodge (*),

MemberoftheSupervisory Board

3 Socotab, permanent representative of Bolloré

ontheBoard of Directors

3 Soﬁbol, memberof the Supervisory Board

Bolloré Group (outside France)

3 Redlands Farm Holding, Chairman

3 Plantations des Terres Rouges, Chairman

oftheBoardof Directors

3 PTR Finances, Chairman of the Board of Directors

3 SFA, Chairman of the Board of Directors

3 African Investment Company, Director

3 Financière du Champ de Mars, Director

3 La Forestière Équatoriale (*), Director

3 BB Groupe, Director

3 PTR Finances, Director

3 Sorebol, Director

3 Techniﬁn, Director

3 Pargeﬁ Helios Iberica Luxembourg, Director

3 Participaciones y gestion ﬁnancieraSA, permanent

representative of Pargeﬁ Helios Iberica LuxembourgSA

on the Board of Directors

3 Nord-Sumatra Investissements, permanent

representative of Bolloré Participations on the Board

ofDirectors

OTHER POSITIONS AND OFFICES

(INFRANCE)

Musée National de la Marine, Director

3 Vallourec (*), memberof the Supervisory Board

3 Banque Hottinguer (formerly Banque Jean-Philippe

Hottinguer & Cie), permanent representative

ofCompagnie du Cambodge on the Board of Directors

OTHER POSITIONS AND OFFICES

(OUTSIDE FRANCE)

Socﬁnasia (*), permanent representative of Bolloré

Participations on the Board of Directors

3 Socﬁnde, permanent representative of Bolloré

Participations on the Board of Directors

3 Terrasia, permanent representative of Bolloré

Participations on the Board of Directors

3 Socﬁn (formerly Socﬁnal) (*), permanent representative

of Bolloré Participations on the Board of Directors

3 InduservicesSA., permanent representative of Bolloré

Participations on the Board of Directors

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Compagnie de Cornouaille, Chairman

3 Financière de l’Odet (*), Chief Executive Ofﬁcer

3 Compagnie du Cambodge (*), Chairman

oftheManagement Board

3 Blueboat (formerly Compagnie de Bénodet), Chairman

3 Financière de Sainte-Marine, Chairman

3 SCI Lombertie, Co-Manager

3 Socﬁnaf (formerly Intercultures) (*), permanent

representative of Bolloré Participations on the Board

ofDirectors

(*) Listed on a regulated market.

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FRÉDÉRIC CRÉPIN

Member of the Management Board

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Frédéric Crépin is a graduate of the Institut

d’Études Politiques de Paris (Sciences-Po),

and holds a Master’s degree in European

business law from the Université

Panthéon-Assas (Paris II), a Master’s degree

in labor and employment law from the

Université Paris Ouest Nanterre La Défense

(Paris X Nanterre), and an LLM degree

(Master of Laws) from New York University

School of Law.

Admitted to the bars of both Paris and

NewYork, Frédéric Crépin began his career

working as an attorney at several law ﬁrms.

He was an associate at Siméon & Associés

in Paris from 1995 to 1998 and at Weil

Gotshal & Manges LLP in New York from

1999 to 2000.

From July 2000 to August 2005, Frédéric

Crépin served as a Special Advisor

totheGeneral Counsel and as a

memberofthe Legal department of Vivendi

Universal before being appointed Senior

Vice President and Head of the Legal

Department of Vivendi in August 2005.

InJune2014, he was named General

Counsel of the Vivendi group.

InSeptember2015, he became General

Counsel of Canal+ Group. In October2018,

he was appointed Group Chief Compliance

Ofﬁcer.

He was appointed to the Vivendi

Management Board on November10, 2015.

POSITIONS CURRENTLY HELD

Vivendi group (in France)

3 Canal+ Group, memberof the Supervisory Board

3 Société d’édition de Canal+, permanent representative

of the Canal+ Group on the Board of Directors

3 Universal Music France (SAS),

memberoftheSupervisory Board

3 Gameloft, Director

3 Dailymotion, Director

3 Canal Olympia, Director

3 L’Olympia (SAS), Director

3 SIG 116 (SAS), Chairman

3 SIG 120 (SAS), Chairman

Vivendi group (outside France)

3 Vivendi Holding I LLC. (United States), Director

3 Vivendi Exchangeco Inc. (Canada), Vice Chairman

OTHER POSITIONS AND OFFICES

(OUTSIDE FRANCE)

None.

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Studiocanal, Memberof the Supervisory Board

3 Canal+ France, memberof the Supervisory Board

3 SFR, Director

3 SFR, permanent representative of Vivendi on the Board

of Directors

3 SIG 50, Chairman and Chief Executive Ofﬁcer

andDirector

3 SIG 73, Chairman and Chief Executive Ofﬁcer

andDirector

3 SIG 108 (SAS), Chairman

3 SIG 114 (SAS), Chairman

3 SIG 115 (SAS), Chairman

3 SIG 117 (SAS), Chairman

3 SIG 119 (SAS), Chairman

3 MyBestPro (formerly Wengo), Director

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS

(OUTSIDEFRANCE)

Telecom Italia, SpA (Italy), Director and member

ofthe Strategy Committee andtheNominations

and Remuneration Committee

3 Activision Blizzard, Inc. (United States), Director,

Chairman of the Governance and Nominations

Committee and Memberof the Human Resources

Committee

(*) Listed on a regulated market.

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SIMON GILLHAM

Member of the Management Board

British citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Simon Gillham holds degrees from

theUniversities of Sussex and Bristol.

In1981, Simon Gillham began his career

atThomson where he was responsible

forlanguage and management training.

In1985 he formed his own training

andcommunication company: York

Consultants. In 1991 he was appointed

VicePresident Communications of Thomson

Consumer Electronics and subsequently

joined the CarnaudMetalbox group in 1994.

In early 1999, Simon Gillham became

VicePresident, Global Communications

oftheValeo group before taking on the role

of Vice President, Communications

atHavas in April2001. He joined Vivendi

in2007, serving as Senior Executive

VicePresident, Communications & CSR.

Simon Gillham is Chairman of Vivendi

Village. In this role, he oversees the

activities of Vivendi Ticketing (Digitick,

SeeTickets and Paylogic), L’Olympia

andthe Théâtre de l’Œuvre. He is also

responsible for LIVE activities, Olympia

Production and U-Live at Vivendi Village.

Heis Chairman of the Copyrights Group

Limited in the United Kingdom.

He was appointed to the Vivendi

Management Board on November10, 2015.

He is Chairman of CA Brive Rugby Club.

POSITIONS CURRENTLY HELD

Vivendi group (in France)

3 Canal+ Group, memberof the Supervisory Board

3 Universal Music France (SAS),

memberoftheSupervisory Board

3 Dailymotion, Director

3 Digitick, Director

3 Vivendi Village (SAS), Chairman

3 L’Olympia (SAS), Chairman

3 UBU Productions (SAS), Chairman

Vivendi group (outside France)

3 See Group Limited (United Kingdom), Chairman

oftheBoard of Directors

3 The Way Ahead Group (United Kingdom), Chairman

ofthe Board of Directors

3 UK Ticketing Ltd (United Kingdom), Chairman

oftheBoard of Directors

3 The Copyrights Group Limited (United Kingdom),

Chairman

3 Vivendi Ticketing US LLC (USA), Director

3 Paddington and Company Limited (United Kingdom),

Director

3 Marketreach Licencing Services Limited

(UnitedKingdom), Director

OTHER POSITIONS AND OFFICES

(INFRANCE)

Fnac Darty (*), permanent representative of Compagnie

Financière du 42 avenue de Friedland on the Board

ofDirectors

3 CA Brive Rugby Club, Chairman

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

MyBestPro (formerly Wengo) (SAS), Chairman

3 Digitick, Chairman of the Board of Directors

3 Studiocanal, Memberof the Supervisory Board

3 Canal+ France, memberof the Supervisory Board

3 Watchever, Chairman of the Board of Directors

3 The Franco-British Chamberof Commerce, Director

(*) Listed on a regulated market.

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HERVÉ PHILIPPE

Member of the Management Board

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Hervé Philippe is a graduate of the Institut

d’Études Politiques de Paris and holds

adegree in Economic Sciences. He began

his career with Crédit National in 1982

asaccount manager for business ﬁnancing

inthe Île-de-France region.

In 1989, he joined the French market

authority, the Commission des opérations

de bourse (COB) as manager of the French

listed company sector. From 1992 to 1998,

he served as Head of the Transactions

andFinancial Information department.

In 1998, he joined the Sagem group, where

he held the positions of Director of Legal

and Administrative Affairs at SagemSA

(1998-2000), Chief Administrative

andFinancial Ofﬁcer at Sﬁm (1999-2000),

and Director of Communication

atSagemSA (2000-2001). In 2001, he took

on the role of Chief Financial Ofﬁcer

andbecame a memberof the SagemSA

Management Board in 2003.

Hervé Philippe was appointed Chief

Financial Ofﬁcer of the Havas Group

inNovember2005 and, in May2010, was

named Deputy Chief Executive Ofﬁcer

(Directeur général délégué) until

December31, 2013.

He has served as Vivendi’s Chief Financial

Ofﬁcer since January1, 2014 and as a

memberof its Management Board since

June24, 2014.

POSITIONS CURRENTLY HELD

Vivendi group (in France)

3 Canal+ Group, Vice Chairman of the Supervisory Board

3 Compagnie Financière du 42 avenue de Friedland (SAS),

Chairman

3 Dailymotion, Director and memberof the Audit

Committee

3 Universal Music France (SAS),

memberoftheSupervisory Board

3 Antinea 6, Director

3 Editis Holding, Director

3 Banijay Group Holding (SAS), permanent representative

of Vivendi Content on the Supervisory Committee

OTHER POSITIONS AND OFFICES

(INFRANCE)

Harvest (*), Director

3 Sifraba 2, Director

3 CA Brive Rugby Club, Director

OTHER POSITIONS AND OFFICES

(OUTSIDE FRANCE)

None

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Studiocanal, Memberof the Supervisory Board

3 SFR, Director

3 Havas, permanent representative of Financière

deLongchamp on the Board of Directors

3 Havas Life Paris, permanent representative of Havas

onthe Board of Directors

3 Havas Media France, permanent representative

ofHavas on the Board of Directors

3 Providence, permanent representative of Havas

ontheBoard of Directors

3 BETC, permanent representative of Havas

ontheSupervisory Board

3 OPCI de la Seine et de l’Ourcq, Chairman of the Board

of Directors

3 LNE, Chairman of the Board of Directors

3 HA Pôle Ressources Humaines, Chairman and Chief

Executive Ofﬁcer and Director

3 Havas 04, Chairman and memberof the Supervisory

Board

3 Havas 08, Chairman

3 Rosapark (formerly Havas 11), Chairman

3 Havas 12, Chairman

3 Havas 14, Chairman

3 Havas 16, Chairman

3 Havas Immobilier, Chairman

3 Havas Participations, Chairman

3 Financière de Longchamp, Chairman

3 Havas RH, Chairman

3 Havas Worldwide Paris, Director

3 W & Cie, Director

3 Havas Finances Services, Co-Manager

3 Havas Publishing Services, Co-Manager

3 Havas IT, Manager

3 Havas, Deputy Chief Executive Ofﬁcer

3 Leg, Chairman

3 MFG R&D, Vice Chairman and

memberoftheSupervisory Board

3 Sifraba, Director

3 Jean Bal, Director

POSITIONS AND OFFICES PREVIOUSLY

HELD THAT HAVE EXPIRED

DURINGTHE LAST FIVE YEARS

(OUTSIDE FRANCE)

Telecom Italia SpA (Italy) (**), Director

3 GVT Participações S.A. (Brazil), Director

3 Maroc Telecom, memberof the Supervisory Board

3 GR.POSA (Belgium), Director

3 HR GardensSA (Belgium), Director

3 HR Gardens BelgiumSA (Belgium), Director

3 EMDS GroupSA (Belgium), Director

3 Banner Hills Systems Sprl (Belgium), Manager

3 Field Research Corporation (United States), Chairman

3 Havas Creative Inc. (United States), Senior Vice

President and Director

3 Havas North America Inc. (United States), Executive

Vice President and Director

3 Data Communique Inc. (United States), Director

3 Havas Middle East FZ LLC (United Arab Emirates),

Director

3 Havas Management Portugal Unipessoal Lda (Portugal),

Manager

3 Havas Worldwide LLC (United States), Manager

3 Washington Printing LLC (United States), Manager

3 Havas Worldwide Brussels (Belgium), permanent

representative of Havas on the Board of Directors

(**) Listed on a non-regulated market.

(*) Listed on a regulated market.

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STÉPHANE ROUSSEL

Member of the Management Board

French citizen.

Vivendi – 42, avenue de Friedland –

75008 Paris – France

EXPERTISE AND EXPERIENCE

Stéphane Roussel is a graduate of the

École des Psychologues Praticiens de Paris.

Stéphane Roussel began his career working

for the Xerox group from 1985 to 1997.

From 1997 to 2004, he held positions within

the Carrefour group. He was ﬁrst appointed

Director of Human Resources for

hypermarkets in France, before becoming

Director of Human Resources Development

for international business and then Director

of Human Resources France for the entire

Carrefour group.

From 2004 to 2009, he served as SFR’s Vice

President of Human Resources. From 2009

to 2012, Stéphane Roussel held the

position of Executive Vice President

ofHuman Resources at Vivendi before

being appointed Chairman and Chief

Executive Ofﬁcer of SFR in June2012,

aposition he held until May2013, at which

time he joined Vivendi’s General

Management.

Stéphane Roussel was appointed to the

Vivendi Management Board on June24,

2014. Since November2015, he has been

Vivendi’s Chief Operating Ofﬁcer, after

serving as its Senior Executive Vice

President, Development and Organization

since October2014.

In June2016, he was appointed Chairman

and Chief Executive Ofﬁcer of Gameloft SE.

POSITIONS CURRENTLY HELD

Vivendi group (in France)

3 Gameloft SE, Chairman and Chief Executive Ofﬁcer

3 Canal+ Group, memberof the Supervisory Board

3 Dailymotion, Director

3 Universal Music France (SAS),

memberoftheSupervisory Board

3 Banijay Group (SAS), memberof the Supervisory

Committee

OTHER POSITIONS AND OFFICES

(INFRANCE)

Wetechcare, Chairman

3 Le Cercle de l’Excellence RH, Chairman

3 Les Entreprises pour la Cité, Director

3 La Charte de la Diversité, Spokesman

3 Fnac Darty (*), permanent representative of Vivendi

onthe Board of Directors

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING

THELAST FIVE YEARS (IN FRANCE)

Vivendi group Africa (SAS), Chairman

3 Banijay Group (SAS), memberof the Supervisory

Committee

3 Studiocanal, Memberof the Supervisory Board

3 Numericable-SFR, permanent representative

ofCompagnie Financière du 42 avenue de Friedland

onthe Board of Directors

3 Fondation SFR, memberof the Board of Directors

3 SFR, Chairman and Chief Executive Ofﬁcer

3 Fondation SFR, Chairman of the Board of Directors

3 Digitick S.A., Chairman of the Board of Directors

3 Arpejeh, President

POSITIONS PREVIOUSLY HELD

THATHAVE EXPIRED DURING THE

LAST FIVE YEARS (OUTSIDE FRANCE)

Telecom Italia SpA (Italy) (*), Director

3 GVT Participações S.A. (Brazil), Director

3 Activision Blizzard, Director

3 See Group Limited (United Kingdom), Director

3 UK Ticketing Ltd (United Kingdom), Director

3 Vivendi group Africa Bénin (SAS), Chairman

(*) Listed on a regulated market.

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CORPORATEGOVERNANCEOFVIVENDI

1.2.3. FAMILY RELATIONSHIPS

Cédric de Bailliencourt, a memberof the Management Board, is the nephew

of Vincent Bolloré, a memberof the Supervisory Board.

To the company’s knowledge, no other family relationships exist between

any of the members of the Management Board, or between any of them and

any memberof the Supervisory Board.

1.2.4. ABSENCE OF CONFLICTS OF INTEREST

To the company’s knowledge, there are no actual or potential conﬂicts of

interest between Vivendi and any memberof the Management Board with

regard to their personal interests or other responsibilities. Cédric de

Bailliencourt and Gilles Alix, Vice Chairman of the Board of Directors of

BolloréSA and Chief Executive Ofﬁcer of the Bolloré Group, respectively,

abstain from taking part in Management Board meeting deliberations

relating to transactions that could occur with the Bolloré Group.

Management Board members are obliged to inform the Group Chief

Compliance Ofﬁcer of any actual or potential conﬂict of interest they have

encountered, or might encounter in the future.

1.2.5. ABSENCE OF ANY CONVICTION FOR FRAUD,

LIABILITY ASSOCIATED WITH A BUSINESS FAILURE

OR PUBLIC PROSECUTION AND/OR SANCTION

Over the past ﬁveyears, to the company’s knowledge, no memberof the

Management Board has been convicted of any fraud-related matter, no

ofﬁcial public accusation or sanction has been brought against any

memberof the Management Board, and no memberof the Management

Board has been associated with a bankruptcy, receivership or liquidation

while serving on an administrative, management or supervisory body, or has

been prevented by a court from acting as a memberof an administrative,

management or supervisory body or from participating in the management

of a public issuer.

1.2.6. AGREEMENTS BETWEEN THE COMPANY

ANDMEMBERS OF THE MANAGEMENT

BOARD–SERVICE AGREEMENTS

As Corporate Ofﬁcers, members of the Management Board are bound by an

employment contract with the company, with the exception of Arnaud de

Puyfontaine, who waived the benefit of his employment contract, in

compliance with the recommendations of the AFEP/MEDEF Code, following

his appointment as Chairman of the Management Board by the Supervisory

Board, at its meeting held on June24, 2014.

No memberof the Management Board is party to a service agreement

entered into with Vivendi or any of its subsidiaries, pursuant to which that

membermay be entitled to receive any beneﬁts.

1.2.7. LOANS AND GUARANTEES GRANTED

TOMEMBERSOF THE MANAGEMENT BOARD

The company has not granted any loans or issued any guarantees to any

memberof the Management Board.

1.2.8. JURISDICTION AND INTERNAL REGULATIONS

OFTHE MANAGEMENT BOARD

Authority of the Management Board Pursuant

toFrenchLaw and the Company’s By-Laws

With respect to third parties, the Management Board is granted the

broadest powers to act in any circumstance on behalf of the company,

subject to the scope of the company’s corporate purpose and to those

situations where such power is expressly granted by law to the Supervisory

Board or the Shareholders’ Meetings, and to matters that require the prior

approval of the Supervisory Board.

Internal Regulations

The Internal Regulations of the Management Board is a purely internal

document intended to ensure that the company’s Management Board

functions properly and adheres to the most recent rules and regulations to

promote good corporate governance. It is not enforceable against third

parties and may not be invoked by them against members of the

Management Board.

1.2.9. FUNCTIONS AND ACTIVITIES

OFTHEMANAGEMENT BOARD IN 2018

The Management Board is responsible for the day-to-day management of

the company, the conduct of its business and the implementation of its

strategy. Pursuant to applicable law, the company’s by-laws and the

Supervisory Board’s internal rules, the Management Board must obtain prior

authorization from the Supervisory Board for certain transactions and

initiatives (see paragraph1.1.1.8 above).

In carrying out its management duties, the Management Board is supported

by several internal committees comprised of operational ofﬁcers or directors

at headquarters and at the group’s main subsidiaries.

In 2018, the Management Board met a total of 15 times, with an attendance

rate of 99%. It considered among others, the following matters:

3 the group’s internal and external growth prospects;

3 the principal strategic opportunities and initiatives;

3 the activities of the group’s main subsidiaries;

3 the disposal of Vivendi’s interest in Ubisoft;

3 the unwinding of the hedge on the interest held by Vivendi in the

Fnac-Darty Group;

3 the review and completion of preliminary transactions relating to

potential changes in the Universal Music Group’s share ownership

structure;

3 the plan to sell part of Universal Music Group’s share capital;

3 the acquisition of 100% of the share capital of Editis;

3 the monitoring of changes in the governance of Telecom Italia;

3 the plan to sell MyBestPro;

3 the review of the plan to convert the company into a European

Company;

3 the quality and structure of the group’s balance sheet;

3 the review and approval of the statutory and consolidated ﬁnancial

statements for fiscal year 2017, the 2018 and 2019 budgets, the

2018 half-year ﬁnancial statements and the 2018 quarterly revenue

information;

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13 13

3 the group’s ﬁnancial position;

3 the group’s cash position;

3 the group’s ﬁnancial communications;

3 the renewal of the EMTN program;

3 the preparation of quarterly activity reports for the Supervisory Board;

3 the work of the group’s Internal Audit department;

3 the group compensation policy;

3 the implementation of an annual performance share plan and an

annual capital increase reserved for group employees in 2018;

3 the main features of the capital increase and the leveraged plan

reserved for group employees for 2019;

3 the development and retention of key talent;

3 the deployment of the anti-corruption program and the creation of a

Compliance Committee in charge of implementing, deploying and

monitoring corruption prevention and detection measures and the

personal data protection program;

3 gender parity and diversity within the group;

3 the notice to the General Shareholders’ Meeting held on April19,

2018; and

3 the monitoring of ongoing legal investigations and proceedings.

1.2.10. INTERNAL COMMITTEES

In order to perform its management functions and duties, the Management

Board relies on several internal committees comprised of operational

ofﬁcers or directors at headquarters and at the group’s main subsidiaries.

1.2.10.1. Executive Committee

An Executive Committee, presided over by the Chairman of the Management

Board and comprising 16 members, including five women (31%), meets

each month with the Management Board members. Its members, each

within their ﬁelds of expertise, assist the Management Board in implementing

strategic activities and contribute to the action plans issued by the

headquarters and the principal business units.

Its members are:

3 Bernard Bacci, Group Head of Taxes;

3 François Bisiaux, Vice President, Securities and Corporate Law;

3 Florent de Cournuaud, Vice President, Management and Business

Plan Control;

3 Laurence Daniel, Senior Vice President, Mergers and Acquisitions;

3 Marie-Annick Darmaillac, Vice President, Corporate Social Respon-

sibility (CSR) and Compliance;

3 Jean-Louis Erneux, Vice President, Press Relations and New Media;

3 Stéphanie Ferrier, Vice President, Facilities;

3 Xavier Le Roy, Executive Vice President, Investor Relations;

3 Caroline Le Masne, Senior Vice President, Head of Legal Affairs,

Vivendi group;

3 Laurent Mairot, Executive Vice President, Special Advisor to the

Chairman of the Management Board;

3 Ilenia Michelotti, Vice President, Mergers and Acquisitions;

3 Mathieu Peyceré, Executive Vice President, Group Human Resources;

3 Marc Reichert, Group Financing & Treasury Director;

3 Pierre Le Rouzic, Senior Vice President, Group Consolidation and

Financial Reporting;

3 Vincent Vallejo, Senior Vice President, Audit & Special Projects; and

3 Frédéric Vallois, Vice President, Internal Communications & Editorial.

1.2.10.2. Management Committees

Every month, as part of a rigorous review process at the end of each month,

the executive managers of all group business units (Universal Music Group,

Canal+ Group, Havas, Gameloft, Vivendi Village and Dailymotion) are

required to present: their results for the month to the Management Board,

an analysis of their operational and strategic positioning, their ﬁnancial

targets established in the budget and the monitoring of the completion of

such ﬁnancial targets, their action plans, and other key matters of interest.

1.2.10.3. Investment Committee

Composition

The Investment Committee comprises the Chairman and members of the

Management Board, key managers at headquarters and, when appropriate,

the Chief Operating Ofﬁcers and Chief Financial Ofﬁcers of the business

units.

Powers

The Investment Committee reviews all investment and disposal transactions.

This procedure applies to all transactions, whatever the amount, including

the acquisition or disposal of equity interests and the launch of new

businesses, and to any other ﬁnancial commitment such as the purchase of

rights or real estate agreements.

Any transaction involving amounts greater than €100million and€300million

must receive the prior approval of the Management Board and the

Supervisory Board, respectively.

Activity in 2018

The Investment Committee meets twice a month. The examination of any

transaction relies on the work and presentations made beforehand by the

Finance department.

1.2.10.4. Compliance Committee

To support the deployment of the group’s compliance program, the

Management Board set up a Compliance Committee in the fourth-quarter of

2018. The Compliance Committee is responsible for measures and

procedures to identify and prevent risks as required by Law No.2016-1691

of December9, 2016 (referred to as the Sapin II Act), Law No.2017-399 of

March27, 2017 on corruption and the duty of vigilance and EU General Data

Protection Regulation No.2016/679. In the exercise of its duties, it works

closely with the Risk Committee.

Composition

The Compliance Committee comprises at least five members: the Vice

President for Corporate Social Responsibility & Compliance, the Head of

Legal Affairs, the Chief Data Ofﬁcer, the Commitment and CSR Promotion

Manager, the Vice President Integrated Report & Compliance Projects, and

the Group Chief Compliance Ofﬁcer, who chairs the committee.

Powers

The Compliance Committee meets at least twice a year. Its role is to make

recommendations to the Management Board, contribute to its decisions and

issue opinions, notably in relation to the implementation, deployment and

monitoring of corruption prevention and detection measures and the

personal data protection program.

A mandatory e-learning module has been introduced to make it easier for

group employees to understand and apply the anti-corruption code

implemented by Vivendi.

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1.2.10.5. Risk Committee

The role of the Risk Committee is to identify and review risk management

systems within business units that are likely to have an inﬂuence on the

achievement of the group’s objectives.

Composition

The committee is chaired by the Chairman of Vivendi’s Management Board

and has the following permanent members: the Chief Operating Ofﬁcer, the

Chief Financial Ofﬁcer, the General Counsel, the Chairman of Vivendi Village

and Senior Executive Vice President, Communications for Vivendi, the Senior

Vice President responsible for inter-group coordination, the Senior Vice

President responsible for investor relations and inter-group financial

communications, the Senior Vice President, Audit and Risks, the Vice

President, CSR and Compliance, and the Head of Insurance. Business unit

representatives are invited to committee meetings depending on the agenda.

Powers

The role of the Vivendi Risk Committee is to make recommendations to the

Management Board in the following areas:

3 the identiﬁcation and assessment of the risks potentially arising from

activities carried out within the group, such as regulatory risks, social

and environmental risks, risks related to ethics, competition and

conﬂicts of interest, and risks related to the security of information

systems;

3 the examination of the adequacy of the risk coverage and the level

of residual risk;

3 the review of insurable risks and the insurance program; and

3 the review of risk factors and forward-looking statements in the

documents issued by the group, in liaison with the Compliance

Committee.

A report on the work of the Risk Committee is put before the Audit

Committee of Vivendi’s Supervisory Board.

All the documents submitted to the Risk Committee were brought to the

attention of the Statutory Auditors. The Statutory Auditors also receive, at

the meetings of the Audit Committee, a summary of the work of the Risk

Committee.

Activity in 2018

The Risk Committee met twice in 2018. Its proceedings primarily consisted of:

3 the review of cybersecurity issues and IT security;

3 the review and monitoring of the risks identified during the risk

mapping processes carried out within the group;

3 the creation of a Compliance Audit team, reporting to Internal Audit,

and responsible for monitoring compliance measures undertaken

within the group and raising awareness of the group’s best practices

among the operating teams most affected; and

3 the review and monitoring of the insurance program.

1.2.10.6. Financial Information and Communication

Procedures Committee

This committee is responsible for the review and validation of financial

information before its release.

Composition

The committee is presided over by the Group General Counsel. Its members

are nominated by the Chairman of the Management Board. At a minimum,

the committee is made up of the Vivendi executives holding the following

positions:

3 Group General Counsel;

3 Chief Financial Ofﬁcer;

3 Senior Vice President responsible for investor relations and inter-

group ﬁnancial communications;

3 Senior Vice President, Communications;

3 Senior Vice President, Consolidation and Financial Reporting;

3 Senior Vice President, Financing and Treasury;

3 Senior Vice President, Audit & Risks;

3 Senior Vice President, Head of Legal Affairs; and

3 Executive Vice President, Investor Relations and Corporate Develop-

ment.

Members of the committee may appoint additional members who are

managers from the above-mentioned departments, or alternates. The

committee currently comprises 15 regular attendees.

Powers

The committee assists the Chairman of the Management Board and the

group’s Chief Financial Ofﬁcer in ensuring that Vivendi fulﬁlls its disclosure

requirements with respect to investors, the public and the regulatory and

market authorities, speciﬁcally the AMF and Euronext Paris, in France.

In pursuing its duties and objectives, the committee ensures that Vivendi

has established adequate controls and procedures so that:

3 any ﬁnancial information that must be disclosed to investors, the

public or the regulatory authorities is reported within the deadlines

set forth by applicable laws and regulations;

3 all corporate communications are subject to appropriate veriﬁcation

pursuant to the procedures set up by the committee;

3 all information requiring disclosure to investors or appearing in the

documents recorded or filed with any regulatory authority is

communicated to the company’s senior management, including the

Chairman of the Management Board and the group’s Chief Financial

Officer, prior to disclosure so that decisions regarding such

information can be made in a timely manner;

3 assessments of Vivendi’s procedures, and those of its business

units, for controlling information as well as internal control

procedures, are monitored under the supervision of the Chairman of

the Management Board and the group’s Chief Financial Ofﬁcer;

3 the Chairman of the Management Board and the group’s Chief

Financial Ofﬁcer are advised of any major procedural issues of which

the committee should be informed, and which are likely to affect

Vivendi’s procedures for controlling information as well as its internal

control procedures. The committee issues recommendations, where

necessary, for changes to be made to these controls and procedures.

The committee monitors the implementation of changes approved by

the Chairman of the Management Board and the group’s Chief

Financial Ofﬁcer; and

3 more generally, the Chairman of the Management Board and the

group’s Chief Financial Ofﬁcer are able to effectively receive any

information they might request.

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13 13

Activity in 2018

The committee meets at the request of the Chairman of the Management

Board, the Chief Financial Ofﬁcer, the Chairman of the committee, or one of

its members. Meetings are held following each meeting of the Audit

Committee and are coordinated with the schedule for disclosing ﬁnancial

information on the group’s results. In 2018, the committee met ﬁve times. Its

proceedings primarily consisted of:

3 examining the annual and half-year ﬁnancial statement certiﬁcation

letters signed by the Chairman and Chief Financial Ofﬁcer of each of

the group’s business units;

3 reviewing the financial information published in the annual and

half-year ﬁnancial statements and the quarterly revenue statements

and the information published in the Annual Report; and

3 reviewing the business report and the non-ﬁnancial performance

statement.

The committee reports on its work to the Chairman of the Management

Board and informs the Audit Committee, as necessary.

2.1.Compensation policy

for Corporate Ofﬁcers of Vivendi for 2019

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

Section 2

CompensationofCorporateOfﬁcersofVivendi

This section constitutes an integral part of the report on corporate governance referred to in Article L.225-68 of the French Commercial Code (Code de

commerce) and reviewed by the Supervisory Board during its meeting on February14, 2019.

2.1.Compensation policy for Corporate Ofﬁcers of Vivendi for 2019

This section presents the principles and criteria governing the determina-

tion, distribution and allocation of fixed and variable compensation and

beneﬁts of any kind payable to Corporate Ofﬁcers of Vivendi, due to their

service in such capacity, which will be submitted to the Combined General

Shareholders’ Meeting of April15, 2019, pursuant to Article L.225-82-2 of

the French Commercial Code. In accordance with this Articleand Article

L.225-100 II. of the French Commercial Code, payment of the variable

component of the Management Board members’ compensation for 2018 is

subject to the approval of the General Shareholders’ Meeting of April15,

2019.

2.1.1. COMPENSATION POLICY FOR THE CHAIRMAN

ANDMEMBERS OF THE SUPERVISORY BOARD

2.1.1.1. Compensation policy for the Chairman

oftheSupervisory Board

Since the company became a société anonyme with a Management Board

and Supervisory Board in 2005, the Chairman of the Supervisory Board has

been awarded compensation based on his level of involvement in deﬁning

and developing the group’s strategy and his role in the review of proposed

acquisitions of controlling or minority interests. His compensation is set by

the Supervisory Board upon the recommendation of the Corporate

Governance, Nominations and Remuneration Committee. The Chairman of

the Supervisory Board receives director’s fees, which are deducted from the

amount of his compensation.

At its meeting held on February14, 2019 and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board decided to maintain the Chairman of the Supervisory

Board’s compensation for 2019 at €400,000, from which the amount of his

director’s fees (€60,000) is deducted. His compensation has remained

unchanged since 2014.

2.1.1.2. Compensation of the Members

oftheSupervisory Board

Directors’ fees

Within the overall limit of €1.5million per year, unchanged since it was set

by the Combined General Shareholders’ Meeting held on April24,2008, the

payment of directors’ fees to members of the Supervisory Board is based on

attendance at meetings and the numberof meetings held by the Supervisory

Board and its committees. Payment of directors’ fees is made on a half-

yearly basis, in arrears.

At its meeting held on June 24, 2014, the Supervisory Board decided to pay

directors’ fees, subject to an attendance condition and calculated on a pro-

rata basis, as follows: each memberof the Supervisory Board receives a

ﬁxed annual directors’ fee of €60,000; each memberof the Audit Committee

receives an annual attendance fee of €40,000 (€55,000 for its Chairman);

each memberof the Corporate Governance, Nominations and Remuneration

Committee receives an annual attendance fee of €30,000 (€45,000 for its

Chairman); and (as decided by the Supervisory Board meeting of May11,

2017) each memberof the CSR Committee receives an annual attendance

fee of €20,000 (€30,000 for its Chairman).

The gross amount of directors’ fees (before tax and withholding) for 2018

was €1,140,000. This amount is itemized in Section2.2.1.2 below.

Apart from directors’ fees, members of the Supervisory Board may receive

compensation from the company for special assignments or services (see

Section1.1.1.6 of this chapter).

Nominated pursuant to Articles L.225-71 and L.225-79-2 of the French

Commercial Code, respectively, the employee shareholder representative

and the employee representative have entered into employment contracts

with VivendiSA under the terms of which they receive compensation

commensurate with their position in the company (salary, incentive plans

and performance shares, as applicable).

Members of the Supervisory Board who exercise an executive function in a

related company within the meaning of Article L.225-197-2 of the French

Commercial Code or who have an employment contract with VivendiSA or

a related company may be granted performance shares under the conditions

set out in Article L.225-197-1 of the French Commercial Code.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.1.1.3. Proposed resolution to be submitted to

theCombined General Shareholders’ Meeting

of April15, 2019

Fourteenth resolution: Approval of the principles and criteria

fordetermining, allocating and granting the elements

ofcompensation and beneﬁts of any kind applicable

tothemembers of the Supervisory Board and to its Chairman

fortheir service in such capacity, in respect of ﬁscal year 2019.

The General Shareholders’ Meeting, after having reviewed the report on

corporate governance referred to in Article L.225-68 of the French

Commercial Code describing the compensation policy for the company’s

Corporate Ofﬁcers established pursuant to Article L.225-82-2 of the French

Commercial Code, approves the principles and the criteria for determining,

allocating and awarding the ﬁxed and variable elements making up the total

compensation and the beneﬁts of any kind applicable to the members of the

Supervisory Board and to its Chairman for their service in such capacity, in

respect of ﬁscal year 2019, as set out in Section2.1.1 of this chapter.

2.1.2. COMPENSATION POLICY RELATING

TO PRINCIPLES AND CRITERIA FOR SETTING

THECOMPENSATION OF THE CHAIRMAN

ANDMEMBERS OF THE MANAGEMENT

BOARD INRESPECT OF FISCAL YEAR 2019

2.1.2.1. General

At its meeting held on February14, 2019, the Supervisory Board, upon the

recommendation of the Corporate Governance, Nominations and

Remuneration Committee, reviewed and reinforced certain elements of the

compensation policy which applied to the Chairman and members of

Vivendi’s Management Board in 2019. The amendments made were made

to take into consideration the feedback from discussions with several of

Vivendi’s investor shareholders.

These amendments include:

3 the implementation of differentiated ﬁnancial criteria for the assess-

ment of short-term compensation (variable portion) and long-term

compensation (granting of performance shares);

3 removing for performance share grants the possibility of offsetting

the results of each of the two indicators (internal and external)

against each other;

3 the cancellation of the possibility to maintain all rights to performance

shares for beneﬁciaries who leave the company during the three-

year vesting period;

3 the right for the Supervisory Board to reduce, as applicable, the

vesting rate of performance shares in light of speciﬁc circumstances

that would not be reflected in the level of achievement of the

criteria set for the internal indicator; and

3 the increase of the minimum achievement level of performance

objectives conditioning the payment of severance compensation to

the Chairman of the Management Board.

The purpose of the policy, in both the short and long term, is to better align

the compensation of Corporate Ofﬁcers with shareholder interests. With

this in mind, close attention has been paid to three main criteria:

3 the quantitative balance of compensation, with particular attention

paid to variable and long-term portions in line with the group’s

development and growth;

3 the quality of the criteria used to determine the annual variable

portion. These criteria are based on both quantitative and qualitative

targets proposed by the Corporate Governance, Nominations and

Remuneration Committee and set by the Supervisory Board, giving

special consideration to the issues defined in the company’s

corporate social responsibility (CSR) policy; and

3 the group’s long-term development, through the grant of perfor-

mance shares that are subject to an internal indicator based on

criteria tied to the group’s medium-term ﬁnancial performance, and

to an external indicator based on criteria aimed at bringing manage-

ment interests closer in line with those of shareholders.

This policy will apply when determining the compensation of the executive

management of major subsidiaries, with different weightings and criteria

that are adapted to their business operations.

2.1.2.2. Compensation elements of the Members

of theManagement Board

Fixed Portion

Each year, upon the recommendation of the Corporate Governance, Nomina-

tions and Remuneration Committee, the Supervisory Board sets the com-

pensation of the members of the Management Board based on the level of

responsibility of each memberand taking into account benchmark studies of

practices in a sample of French and international companies in the same

business sectors (1) conducted by independent consulting ﬁrms.

Annual Variable Portion

This is based on precise and adjusted quantitative and qualitative criteria. In

order to provide dynamic support for the group’s challenges, the weighting

assigned to the quantitative and qualitative criteria used in calculating the

reference annual variable portion of compensation is intended to reﬂect the

importance of, and progress made in, strategic efforts.

Quantitative Criteria

Quantitative criteria are based on the ﬁnancial indicators that the Corporate

Governance, Nominations and Remuneration Committee has deemed most

relevant to the assessment of the ﬁnancial performance of the group and its

major subsidiaries, whose businesses are based on a very similar economic

model: the sale of content and services. These ﬁnancial indicators are group

EBIT and cash flow from operations after interest and income tax paid

(group CFAIT). They allow for the accurate measurement of the performance

and income recorded by each business unit in line with Vivendi’s value

creation and strategy.

Qualitative Criteria

Qualitative criteria are based on a series of priority actions assigned to

executive and non-executive ofﬁcers and deﬁned in line with the group’s

strategy and the action plans approved for each business unit.

They allow for the assessment of the ability of ofﬁcers to implement and

complete planned disposals or acquisitions, undertake the necessary

strategic realignments in an increasingly competitive environment, and

identify new directions with regard to content and services offerings.

(1) Atos, BT (United Kingdom), Capgemini, CGI (Canada), Lagardère, Publicis, RELX Group (United Kingdom), Sap (Germany), Sky (United Kingdom), Telenor (Norway), Thomson Reuter (Canada), Veon

(Netherlands) and WPP (United Kingdom).

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Criteria for 2019

At its meeting held on February14, 2019 and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board set the following weightings and targets:

3 ﬁnancial targets (60% weighting unchanged from 2018):

– 40%: group EBIT (1), and

– 20%: Cash ﬂow from operations after interest and tax (CFAIT);

3 measurable priority actions (40% weighting):

– 11%: implementation of the strategic and ﬁnancial partnership for

the development of UMG,

– 9%: signiﬁcant progress as regards the situation in Italy,

– 9%: pursue growth opportunities and revenue and cost synergies,

– 6%: reduce the group’s exposure to risk (legal and tax disputes),

and

– 5%: implement measures to integrate the group’s corporate social

responsibility (CSR) initiatives.

These qualitative criteria take into account the extent of the group’s

corporate social responsibility and its corresponding initiatives and

commitments (promoting cultural diversity, encouraging knowledge sharing,

protecting and empowering young people, and reconciling the use of

personal data with its protection).

Weighting of the variable portion (unchanged from 2018)

For 2019, the variable portion is equal to 80% of ﬁxed compensation if the

targets are achieved, with a maximum of 100% if the targets are substan-

tially exceeded. In any event, and for all of the targets (ﬁnancial targets and

priority actions), if the threshold of 50% is not reached, its weighting in the

determination of the variable portion of compensation is zero.

Removal of the Proration for Annual Fixed

and Variable Compensation

At its meeting held on February14, 2019 and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board decided, in light of the increasingly important roles

played by Gilles Alix and CédricdeBailliencourt within Vivendi, to no longer

apply the proration of 50% on the fixed and variable portions of their

compensation from January1, 2019.

Extraordinary Compensation

No payment of extraordinary compensation or special award of performance

shares has been authorized for 2019.

Grant of Performance Shares

Purpose

Annual compensation is supplemented by deferred compensation that

reflects the company’s longer-term challenge, to bring the interests of

management in line with those of shareholders, in the form of grants of

performance shares, which vest subject to an internal indicator made up of

several criteria separate from those that apply to variable compensation

(short-term portion), and subject to an external indicator. The two indicators,

internal and external, apply to Corporate Ofﬁcers as well as to all employee

beneﬁciaries.

The Supervisory Board, upon the recommendation of the Corporate

Governance, Nominations and Remuneration Committee, approves the criteria

for the ﬁnal grant of performance shares and sets the limits (threshold, target

and maximum) for calculating the level of performance to be achieved, thus

determining whether the shares are to vest in full or in part.

For the performance shares granted in February2019, vesting is subject to

the following conditions:

3 the internal indicator (70% weighting) is tied to the group’s adjusted

net income per share (50%) and Cash ﬂow from operations after

interest and tax (CFAIT) (20%) between January1,2019 and

December31, 2021; and

3 the external indicator (30% weighting) is tied to the change in

Vivendi’s share price relative to the EURO STOXX

Media index

(20%) and the CAC 40 index (10%) between January1, 2019 and

December31, 2021.

Achievement of the targets is assessed over a three-year period.

Weighting Indicators

70 Internal indicator: ﬁnancial targets

50 Adjusted net income per share

Cash ﬂow from operations after interest and income tax paid

(groupCFAIT)

30 External indicator: average stock market indices

performance (1)

20 EURO STOXX

Media

10 CAC 40

(1) Dividends reinvested.

Calculation

At its meeting held on February14, 2019 and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board decided, for share grants from 2019 onwards, to remove

the possibility of offsetting the results of each of the two indicators (internal

and external) against each other: all performance shares vest after three

years subject, in all cases, to beneﬁciaries being present in the company at

the end of the holding period, and provided the weighted sum of each

indicator (internal or external) meets or exceeds the 100% threshold. No

shares vest under an indicator (internal or external) if the performance of

such indicator is below 50%. An arithmetic calculation is made for interim

results. No shares vest if the performances of both indicators (internal and

external) are below 50%.

Section2.3.4 of this chapter shows the calculation of the achievement rate

for the performance criteria of each indicator set for the share plans granted

in 2016.

(1) Different criteria to that applied to more long-term components (granting of performance shares in 2019) – Adjusted net income per share.

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The table below shows the impact in previous years of applying performance criteria and setting the threshold and target applicable to each of these criteria

to the vesting rate of performance share plans.

Year of Vesting 2013 2014 2015 2016

Reference period for the assessment of performance criteria 2013-2014 2014-2015 2015-2016-2017 2016-2017-2018

Vesting rate 76% 75% 75% 75%

Vesting conditions for performance shares held

by Corporate Ofﬁcers

Following the assessment of achievement of the performance criteria tied

to the plans, performance shares vest at the end of a three-year period

(since 2015), subject to the beneficiaries being present in the company

during the vesting period. The shares must also be held by the beneﬁciaries

for an additional two-year period (holding period).

At its meeting held on February14, 2019 and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board decided to remove (for share grants from 2019 onwards)

the possibility of retaining all rights to performance shares, should beneﬁ-

ciaries resign or leave the company at the initiative of the company (except

in the event of gross misconduct). These rights may be maintained, where

applicable, in proportion to the presence of the beneficiaries during the

vesting period, provided that the applicable performance conditions are met

at the end of the three-year vesting period (1).

Beneﬁts of any Kind in Addition to Compensation

Benefits of any kind granted to the Chairman and members of the

Management Board may include the use of a company car without a driver,

profit sharing (under VivendiSA’s collective agreement), a time saving

account (CET), employer contribution to social charges surpluses and GSC

coverage (job-loss insurance for the Chairman of the Management Board

who has waived the beneﬁt of his employment contract).

Signing Bonus – Deferred Compensation

Signing Bonus

When Management Board members are hired externally, the Supervisory

Board may, upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, award them a signing bonus in

cash or in performance shares to compensate for the loss of deferred

compensation in their previous functions outside the Vivendi group.

Long-Term Cash Incentive

No long-term cash incentive plan has been granted to members of the

Management Board.

Non-Compete Payments

The members of the Management Board are not entitled to non-compete

beneﬁts.

Severance Payments

Members of the Management Board who also have an employment

contract are not entitled to any type of severance payment due to

termination of their office. Except for the Chairman of VivendiSA’s

Management Board (see Section2.2.2.1 of this chapter), Corporate Ofﬁcers

are contractually entitled to a severance payment in the event of

termination of their employment contract at Vivendi’s initiative. These

payments are limited to 18 months’ salary and consist of a ﬁxed amount and

a target variable.

Supplemental Pension Plan

As is the case for a numberof other senior executives of VivendiSA, the

Chairman and members of the Management Board are eligible for the sup-

plemental deﬁned-beneﬁt pension plan, as implemented in December2005

and approved by the Combined General Shareholders’ Meeting held on

April20, 2006.

The main terms of this pension plan include: (i) a minimum of three years’

seniority with the company, (ii) progressive maximum acquisition of

seniority rights, limited to 20 years, which, according to a sliding scale, is

not to exceed 2.5% per year and is progressively reduced to 1%, (iii) a

reference salary for calculating pension payments equal to the average of

the last three years of ﬁxed and variable compensation, recalculated on an

annual basis where necessary, with a dual upper limit (the reference salary

is capped at 60 times the social security limit (€2,383,920 in 2018) and the

acquisition of rights is limited to 30% of the reference salary), (iv)

entitlement to a 60% survivor pension in the event of death, (v) rights

maintained in the event of retirement at the initiative of the company after

the age of 55, provided no other professional activities are resumed, and (vi)

loss of beneﬁts in the event of departure from the company, for any reason,

before the age of 55.

Pursuant to Article L.225-90-1 of the French Commercial Code, the

Supervisory Board resolved to submit the increase in the conditional rights of

members of the Management Board under the group supplemental deﬁned-

beneﬁt pension plan, for which they are eligible, to the following criteria,

which are assessed each year: no increase in income shall apply if, for the

year under consideration, the group’s ﬁnancial results (adjusted net income

and operating cash flow) amount to less than 80% of the budget and if

Vivendi’s share performance is less than 80% of the average performance of

a composite index (50% CAC 40 and 50% EUROSTOXX

Media).

In accordance with the provisions of Article L.225-90-1 of the French

Commercial Code, this commitment in favor of the members of the

Management Board and its Chairman, whose mandate was renewed by the

Supervisory Board at its meeting of May17, 2018 for a period of four years

from June 24, 2018, is subject to the approval of the General Shareholders’

Meeting of April15, 2019.

The information required by ArticleD.225-104-1 of the French Commercial

Code, deriving from Decree No.2016-182 of February23,2016, is shown in

Section2.2.2.3 of this chapter.

2.1.2.3. Proposed resolution to be submitted to the

Combined General Shareholders’ Meeting

ofApril15, 2019

Fifteenth resolution: Approval of the principles and criteria

fordetermining, allocating and granting the elements

ofcompensation and beneﬁts of any kind applicable

totheChairman of the Management Board for his service

insuchcapacity, in respect of ﬁscal year 2019.

The General Shareholders’ Meeting, after having reviewed the report on

corporate governance referred to in Article L.225-68 of the French

Commercial Code describing the compensation policy for the company’s

Corporate Ofﬁcers established pursuant to Article L.225-82-2 of the French

Commercial Code, approves the principles and the criteria for determining,

allocating and awarding the ﬁxed and variable elements making up the total

(1) For the Chairman of the Management Board, see Section2.2.2.1 of this chapter.

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awardedduring2018 to corporate ofﬁcers of Vivendi

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

compensation and the beneﬁts of any kind applicable to the Chairman of the

Management Board for his service in such capacity, in respect of ﬁscal year

2019, as set out in Section2.1.2 of this chapter.

Sixteenth resolution: Approval of the principles and criteria

fordetermining, allocating and granting the elements

ofcompensation and beneﬁts of any kind applicable

tothemembers of the Management Board for their service

insuchcapacity, in respect of ﬁscal year 2019.

The General Shareholders’ Meeting, after having reviewed the report on

corporate governance referred to in Article L.225-68 of the French

Commercial Code describing the compensation policy for the company’s

Corporate Ofﬁcers established pursuant to Article L.225-82-2 of the French

Commercial Code, approves the principles and the criteria for determining,

allocating and awarding the ﬁxed and variable elements making up the total

compensation and the beneﬁts of any kind applicable to the Chairman of the

Management Board for their service in such capacity, in respect of ﬁscal

year 2019, as set out in Section2.1.2 of this chapter.

2.2.Elements of compensation paid and beneﬁts

awardedduring2018 to corporate ofﬁcers of Vivendi

This Section2.2 presents the elements of the compensation policy applied

to the Chairman and members of the Supervisory Board and to the

Chairman and members of the Management Board in 2018, as approved by

the General Shareholders’ Meeting of April19,2018 (Resolutions 13 to 15).

2.2.1. ELEMENTS OF COMPENSATION OF THE MEMBERS

OF THE SUPERVISORY BOARD AND ITS CHAIRMAN

2.2.1.1. Compensation of the Chairman

oftheSupervisory Board in 2018

Fixed compensation

85%

(€340,000)

Director’s fees

15%

(€60,000)

Total

€400,000

In 2018, the compensation of the Chairman of the Supervisory Board, which

was set at €400,000, includes director’s fees for €60,000 (1) and is broken

down as follows:

3 Vincent Bolloré, in his capacity as Chairman of the Supervisory

Board until April19, 2018, was paid a gross amount of €122,376,

including €20,000 in director’s fees; and

3 Yannick Bolloré, in his capacity as Chairman of the Supervisory

Board since April19, 2018, was paid a gross amount of €277,624,

including €40,000 in director’s fees.

At its meeting held on February14, 2019 and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board decided not to change the compensation of the Chairman

of the Supervisory Board for 2019.

(1) The amount of compensation remained unchanged in 2017, in respect of which Vincent Bolloré, in his capacity as Chairman of the Supervisory Board, was paid a gross amount of €400,000, including

€60,000 in director’s fees.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.2.1.2. Directors’ fees

Individual Amounts of Director’s fees and Other Compensation Received by Members of the Supervisory Board

(in euros – rounded to the nearest euro)

Members of the Supervisory Board

Amounts

paid for 2017

Amounts

paid for 2018

Individual attendance rate at Supervisory Board

and Committee meetings in 2018

Supervisory

Board

Audit

Committee

Corporate

Governance,

Nominations

and

Remuneration

Committee CSR Committee

Yannick Bolloré, Chairman (a) (1) 130,000 80,000 100% 100% 100% -

Philippe Bénacin, Deputy Chairman 105,000 105,000 100% - 100% -

Tarak Ben Ammar 97,500 92,500 85.7% 100% - -

Vincent Bolloré (b) (2) 60,000 110,000 100% 100% 100% -

Nathalie Bricault(c) 20,000 na na - - -

Pascal Cagni(c) 20,000 na na - - -

Paulo Cardoso 105,000 120,000 100% - 100% 100%

Yseulys Costes(c) 10,000 na na - - -

Dominique Delport(d) (3) 90,000 65,000 100% - 100% -

Véronique Driot-Argentin (e) (4) 60,000 80,000 100% - - 100%

Aliza Jabès 90,000 80,000 85.7% - 100% -

Alexandre deJuniac(c) 20,000 na na - - -

Cathia Lawson-Hall 115,000 135,000 100% 100% - 100%

Sandrine Le Bihan (e) 60,000 80,000 100% - - 100%

Virginie Morgon (f) 45,000 7,500 50% - 0% -

Michèle Reiser (g) na 85,000 100% - 100% 100%

Katie Stanton 90,000 100,000 100% 100% - -

Total 1,117,500 1,140,000

na: not applicable.

(a) Chairman of the Supervisory Board since April19, 2018 and memberof the Audit Committee and Corporate Governance, Nominations and Remuneration Committee until

April19, 2018.

(b) Chairman of the Supervisory Board until April19, 2018 and memberof the Audit Committee and Corporate Governance, Nominations and Remuneration Committee since

April19, 2018.

(d) Memberof the Corporate Governance, Nominations and Remuneration Committee until March26, 2018.

(e) Memberof the Supervisory Board since April25, 2017.

(f) Memberof the Supervisory Board until April19, 2018.

(g) Memberof the Supervisory Board since April19, 2018.

(1) In 2018, Yannick Bolloré received €1,058,993 in compensation in his capacity as Chairman and Chief Executive Ofﬁcer of Havas, which included a ﬁxed component

of€1,050,000 and €8,993 in beneﬁts of all kind (no variable compensation was paid in 2018 in respect of ﬁscal year 2017). In his capacity as Chairman and Chief

Executive Ofﬁcer of Havas, he was also awarded 18,000 Vivendi performance shares (see Note 18.1 to the Consolidated Financial Statements for the year ended

December31, 2018 in Chapter4 of the Annual Report – 2018 Document de Référence). He does not receive director’s fees from the Havas’ Group.

(2) In 2018, Vincent Bolloré received €4,286 in director’s fees as a memberof the Supervisory Board of Canal+ Group.

(3) In 2018, Dominique Delport received €1,775,437 in gross compensation as an employee of Havas Media France (a subsidiary fully controlled by HavasSA).

(4) In 2018, Véronique Driot-Argentin received €73,948 in gross compensation and €6,527 in incentive bonus as an employee of VivendiSA.

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2.2.Elements of compensation paid and beneﬁts

awardedduring2018 to corporate ofﬁcers of Vivendi

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.2.2. ELEMENTS OF COMPENSATION OF THE MEMBERS

OF THE MANAGEMENT BOARD AND ITS CHAIRMAN

2.2.2.1. Status and compensation of the Chairman

oftheManagement Board

In compliance with the recommendations of the AFEP/MEDEF Code of

Corporate Governance, Arnaud de Puyfontaine waived the beneﬁt of his

employment contract following his appointment as Chairman of the

Management Board by the Supervisory Board at its meeting held on

June24, 2014.

At its meeting held on February15, 2018, the Supervisory Board decided to

apply a 60% proration factor to the reference amount of ﬁxed and variable

compensation for 2018 of the Chairman of the Management Board. This

decision was made in order to take into account Arnaud De Puyfontaine’s

appointment as Executive Chairman of the Board of Directors of Telecom

Italia on June1, 2017. His compensation was set as follows:

Fixed compensation

(in euros)

Variable compensation

(in euros)

Fixed reference amount Proration factor (60%)

Target (80%) Maximum (100%)

Target reference

amount Proration factor

(60%)

Maximum reference

amount Proration factor

(60%)

1,200,000 720,000 960,000 576,000 1,200,000 720,000

These elements were decided prior to the Supervisory Board being informed

of the change in Arnaud de Puyfontaine’s position with Telecom Italia, which

took place after the General Shareholders’ Meeting held on April19, 2018.

At its meeting held on May17, 2018, the Supervisory Board noted the

termination of the Chairman of the Management Board’s mandate as

Executive Chairman of the Board of Directors of Telecom Italia, effective on

April24, 2018. This thereby resulting in:

3 the cancellation of the ﬁxed portion of his compensation in respect

of 2018 (€900,000 before taxes and social security contributions),

i.e., €611,538 not paid; and

3 the non-payment in 2018 of the variable portion of his compensation

in respect of 2017, i.e., €525,998.

Upon the recommendation of the Corporate Governance, Nominations and

Remuneration Committee and having reviewed the consequences of the

change in the position of the Chairman of the Management Board within

the Board of Directors of Telecom Italia, at its meeting held on July30,

2018, the Supervisory Board decided to:

3 no longer apply a proration factor to his reference compensation and

to award him a ﬁxed compensation of €1,400,000(before taxes and

social security contributions) in 2018. The criteria and thresholds

used to determine the variable portion of his compensation in respect

of 2018 remain unchanged; and

3 approve a one-time payment of €390,000 (before taxes and social

security contributions).

The level of the above-mentioned elements of compensation, which includes

the reintegration of the proration factor of 40% for the ﬁxed and variable

portions in respect of the period between January1 and April30, 2018,

remains lower than the amounts not paid by Telecom Italia following the

termi na tion of the executive functions of the Chairman of the Management

Board.

The change in compensation before taxes and social security contributions for the Chairman of the Management Board of Vivendi between 2017 and 2019is

as follows:

(in euros)

2017 2018 2019

Vivendi Telecom Italia Vivendi Telecom Italia Vivendi

Fixed compensation 1,200,000 525,000 1,400,000 (1) 288,462 1,400,000

Variable compensation

(for the previous year) 900,000 (2) - 540,000 - (3) 1,050,000

Performance shares (book value) (4) 718,500 - (5) 992,500 - (6) 774,800

One-time payment - - 390,000 - -

Total 2,818,500 525,000 3,322,500 288,462 3,224,800

Total Vivendi + Telecom Italia 3,343,500 3,610,962 3,224,800

(1) Amounts prorated – annual basis: €900,000 (source: https://www.telecomitalia.com/content/dam/telecomitalia/en/archive/documents/investors/AGM_and_

Meetings/2018/Report_on_Remuneration_2017.pdf).

(2) Achievement rate: 100.19% (source: https://www.telecomitalia.com/content/dam/telecomitalia/en/archive/documents/investors/AGM_and_Meetings/2018/Report_

on_Remuneration_2017.pdf)

(3) Based on an achievement rate of 75% (see below).

(4) Includes 50,000 performance shares granted in 2017.

(5) Includes 50,000 performance shares granted in 2018.

(6) Includes 40,000 performance shares granted in 2019.

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2.2.Elements of compensation paid and beneﬁts

awardedduring2018 to corporate ofﬁcers of Vivendi

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

At its meeting held on February14, 2019, the Supervisory Board, upon the recommendation of the Corporate Governance, Nominations and Remuneration

Committee, reviewed the achievement rate of the ﬁnancial targets and the priority actions set out in the table below to calculate the reference variable

portion for ﬁscal year 2018. With respect to priority actions, the Supervisory Board, upon the recommendation of the Corporate Governance, Nominations and

Remuneration Committee, chose to factor in the situation in Italy which is not reﬂected in the ﬁnancial results:

Determination of variable compensation for 2018

Weighting (in points)

Indicators

2018 targets (in millions of euros) (*)

Points obtainedTargets met Maximum

Threshold

50% Target 80% Maximum 100%

Achieved

in2018

48 60 Group ﬁnancial targets 58

32 40 Group EBIT 1,096 1,144 1,194 1,182 38

16 20

Cash ﬂow from operations after interest

andincome tax paid (group CFAIT) 575 596 625 822 20

32 40

Priority actions of the Vivendi

Management team Achievement rate 17

16 20

Initiate external growth opportunities

andintegrate new entities

Opportunities taken (Editis) and satisfactory integration of Havas

Group. Position of Vivendi in Italy to be clariﬁed 5

16 20

Ensure the group’s organic growth

throughthe following actions: 12

7 8

Reduce the group’s exposure to risk

(legaland tax disputes)

Satisfactory prevention and management of disputes pending

theresolving of the dispute with Mediaset 3

5 7

Continue to encourage activity between

business units and develop revenue

and cost synergies

Increasing numberof collaborative projects between Havas Group

and other Vivendi subsidiaries. Successful ongoing development

ofsynergies at all group levels 5

4 5

Develop CSR-related initiatives Consolidation of CSR-related initiatives: promote cultural diversity,

protect and empower young people, encourage knowledge sharing,

reconcile the use of personal data with its protection 4

80 100 Total (ﬁnancial targets and priority actions) 75

(*) At constant exchange rates.

At its meeting held on February14, 2019, the Supervisory Board set the

reference variable compensation for the Chairman of the Management

Board in respect of fiscal year 2018 at 75% of his reference fixed

compensation based on the points obtained for each criterion. The amount

of variable compensation that will be paid in 2019 in respect of 2018,

subject to the approval of the General Shareholders’ Meeting of April15,

2019 (Resolution 7), amounts to €1,050,000 before taxes and social security

contributions.

On May17, 2018, upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board granted

50,000 performance shares (1) to Arnaud de Puyfontaine. Vesting of these

performance shares is subject to the fulfillment, over three consecutive

ﬁscal years (2018, 2019 and 2020) of performance conditions, assessed at

the end of each period and based on criteria involving the following

weighting: internal criteria (70% weighting), which includes group EBIT

(35%) and Cash ﬂow from operations after interest and tax (group CFAIT)

(35%), which is to be recorded as of December31, 2020, and an external

criterion (30% weighting) tied to the change in Vivendi’s share price relative

to the EURO STOXX

Media (20%) and the CAC 40 (10%) between

January1, 2018 and December31, 2020.

(1) The value of the beneﬁt for each performance share awarded in 2018 is €19.85. This estimated value per share is given for indicative purposes only. It is calculated using the binomial model used

to measure the value of share-based payments pursuant to IFRS 2. This theoretical value does not necessarily represent the gain that could be made on the future sale of the shares, which will

depend on the share price on the vesting date in 2021 and on the date of sale of the shares (as of 2023).

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2.2.Elements of compensation paid and beneﬁts

awardedduring2018 to corporate ofﬁcers of Vivendi

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

Calculation of compensation for 2019

At its meeting held on February14, 2019 and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board approved the compensation of the Chairman of the

Management Board for 2019 as follows:

3 ﬁxed compensation: €1,400,000 (unchanged from 2018); and

3 variable compensation: target of 80% of fixed compensation if

targets are achieved and a maximum of 100% if the targets are

substantially exceeded (1).

At the same meeting, the Supervisory Board granted the Chairman of the

Management Board 40,000 performance shares (2) subject to the

fulﬁllment, over three consecutive ﬁscal years of various conditions (see

Section2.1.2.2 of this chapter).

The chart below, based on the Total Shareholder Return (TSR), shows

Vivendi’s position in relation to the panel of companies used in the

benchmarking study (3) to determine the elements of compensation for the

Chairman of the Management Board.

It demonstrates the consistency between his compensation and Vivendi’s

stock market performance in comparison to this panel of companies.

2014-2018 – ADJUSTED STOCK MARKET PERFORMANCE

Compensation level

Source: Cabinet Boracay TSR

90%

80%

70%

60%

50%

40%

30%

20%

10%

0% 20% 40% 60% 80% 100%

100%

SAP

CGI

REE

ATO

VIV

TEL

LAG

Pub

WPP

THO

SKY

Cap

Conditional Severance Package for the Chairman

of the Management Board upon Termination of his Position

At its meeting held on February27, 2015, the Supervisory Board noted that

Arnaud de Puyfontaine no longer beneﬁted from his employment contract,

which was waived following his appointment as Chairman of the

Management Board, nor did he beneﬁt from any termination beneﬁts in the

event of dismissal. As a result, the Board decided, upon the recommen-

dation of the Corporate Governance, Nominations and Remuneration

Committee, that in the event of termination of his duties at the initiative of

the company, he would be entitled to compensation, subject to performance

conditions as recommended in the AFEP/MEDEF Code. This severance

payment would not be payable in the event of resignation or retirement.

This severance compensation would be capped at a gross amount equal to

18months of the target compensation (on the basis of the last ﬁxed

compensation and the last annual bonus earned over a full year).

At its meeting held on February14, 2019 and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board decided:

3 to increase the achievement rate of performance criteria set for the

severance compensation from 80% to 90%; and

3 to remove the possibility of maintaining all rights to performance

shares should he leave the company. These rights may be main-

tained, where applicable, in proportion to his presence in the

company during the vesting period, provided that the applicable

performance conditions are met at the end of the three-year vesting

period.

(1) In any event, if the threshold of 50% is not reached, its weighting in the determination of the variable portion of compensation is zero.

(2) The value of the beneﬁt for each performance share awarded in 2019 is €19.37. This estimated value per share is given for indicative purposes only. It is calculated using the binomial model used

to measure the value of share-based payments pursuant to IFRS 2 relating to the valuation of compensation paid in shares (share-based payments). This theoretical value does not necessarily

represent the gain that could be made on the future sale of the shares, which will depend on the share price on the vesting date in 2022 and on the date of sale of the shares (as of 2024).

(3) See Section2.1.2.2 of this chapter.

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2.2.Elements of compensation paid and beneﬁts

awardedduring2018 to corporate ofﬁcers of Vivendi

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

Such conditional commitment referred to in Article L.225-90-1 of the French

Commercial Code was authorized by the Supervisory Board meeting of

February27, 2015 and approved by the General Shareholders’ Meeting held

on April17, 2015 (Resolution 10). The new conditions governing the

payment of the conditional severance package is subject to the approval of

the General Shareholders’ Meeting of April15, 2019 (Resolution 3).

In accordance with Article L.225-90-1 of the French Commercial Code, the

continuation of this commitment in favor of the Chairman, as described in

this paragraphand in the Statutory Auditors’ special report, is subject to

the approval of the General Shareholders’ Meeting of April15,2019

(Resolution 17).

If the bonus paid during the reference period (the 12-month period

preceding notiﬁcation of departure) is:

3 greater than the target bonus, the calculation of the compensation

will only take into account the amount of the target bonus; or

3 less than the target bonus, the amount of the compensation will, in

any event, be capped at two years of the compensation actually

received (in compliance with the AFEP/MEDEF Code), and may not

exceed 18 months of the target compensation.

This compensation would not be payable if the group’s financial results

(adjusted net income and cash ﬂow from operations) were less than 90%

(compared to 80% previously) of the budget over the two years prior to

departure, and if Vivendi’s stock performance was less than 90% (compared

to 80% previously) of the average performance of a composite index (CAC 40

(50%) and EURO STOXX

Media (50%)) over the last twenty-four months.

2.2.2.2. Status and Compensation of Members

oftheManagement Board

With the exception of the Chairman, the members of the Management

Board hold employment contracts. At its meeting held on February14, 2019,

the Supervisory Board, upon the recommendation of the Corporate

Governance, Nominations and Remuneration Committee, reviewed the

achievement of the financial targets and priority actions (1) used to

calculate the variable portion of compensation for members of the

Management Board (target of 80%, maximum of 100%) for ﬁscal year 2018.

Based on the points obtained for each criterion, variable compensation of

the Management Board members for ﬁscal year 2018 was set at 75% of

fixed compensation (see table above – Determination of variable

compensation for 2018).

The amount of variable compensation due to each memberof the

Management Board in respect of 2018), subject to the approval of the

General Shareholders’ Meeting of April15, 2019 (Resolutions 8 to 13), is

provided below:

Fixed and variable compensation of Members of the Management Board for 2018 – Numberof performance shares granted in 2018

Fixed compensation (in euros) Variable compensation (in euros)

Performance

shares (1)

Fixed

compensation Proration

Reference variable portion

Proration

Variable (*)

(ineuros)Target Achieved

Gilles Alix (2) 500,000 50% 80% 75% 50% 187,500 -

Cédric de Bailliencourt (2) 400,000 50% 80% 75% 50% 150,000 -

Frédéric Crépin 800,000 na 80% 75% na 600,000 35,000

Simon Gillham 750,000 na 80% 75% na 562,500 30,000

Hervé Philippe 940,000 na 80% 75% na 705,000 20,000

Stéphane Roussel 1,000,000 na 80% 75% na 750,000 40,000

na: not applicable.

(*) Payment is subject to the approval of the General Shareholders’ Meeting of April15, 2019 (Resolutions 8 to 13).

(1) The value of the beneﬁt for each performance share awarded in 2018 is €19.85. This estimated value per share is given for indicative purposes only. It is calculated using

the binomial model used to measure the value of share-based payments pursuant to IFRS 2. This theoretical value does not necessarily represent the gain that could be

made on the future sale of the shares, which will depend on the share price on the vesting date in 2021 and on the date of sale of the shares (as of 2023).

(2) Given the functions of Gilles Alix and Cédric de Bailliencourt within Bolloré Group and upon the recommendation of the Corporate Governance, Nominations and

Remuneration Committee, the Supervisory Board, at its meeting of February15,2018, decided to apply a 50% proration factor to the amount of their ﬁxed and variable

compensation in respect of ﬁscal year 2018. Bolloré Group does not control Vivendi within the meaning of Article L.233-16 of the French Commercial Code.

(1) In any event, if the threshold of 50% is not reached, its weighting in the determination of the variable portion of compensation is zero.

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2.2.Elements of compensation paid and beneﬁts

awardedduring2018 to corporate ofﬁcers of Vivendi

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

Compensation for 2019 – Numberof performance shares

At its meeting of February14, 2019, the Supervisory Board set the elements of ﬁxed and variable compensation for Management Board members in 2019 as

follows:

Fixed compensation

(in euros)

Variable compensation (in euros)

Performance

shares(1)Target Maximum

Gilles Alix 600,000 80% 100% -

Cédric de Bailliencourt 400,000 80% 100% -

Frédéric Crépin 800,000 80% 100% 35,000

Simon Gillham 750,000 80% 100% 30,000

Hervé Philippe 940,000 80% 100% 20,000

Stéphane Roussel 1,000,000 80% 100% 40,000

(1) The value of the beneﬁt for each performance share awarded in 2019 is €19.37. This estimated value per share is given for indicative purposes only. It is calculated using

the binomial model used to measure the value of share-based payments pursuant to IFRS 2. This theoretical value does not necessarily represent the gain that could be

made on the future sale of the shares, which will depend on the share price on the vesting date in 2022 and on the date of sale of the shares (as of 2024).

2.2.2.3. Information required by ArticleD.225-104-1 of the French Commercial Code,

deriving from Decree No.2016-182 of February23, 2016

Seniority within the

group as of 2018

(in years)

Annuity growth

rate(1)

(in %)

Total pension

acquired in 2018

(ineuros)

Estimated pension

acquired at the

closeof 2018

(before tax and

contributions–

ineuros)

Arnaud de Puyfontaine 5 2.50 48,500 238,392

Gilles Alix 2 2.50 15,625 22,500

Cédric de Bailliencourt 2 2.50 12,500 18,000

Frédéric Crépin 19 1.00 13,625 403,200

Simon Gillham 12 1.25 15,703 270,000

Hervé Philippe 5 2.50 41,125 169,200

Stéphane Roussel 15 1.25 27,500 520,125

(1) 1 to 5 years: 2.5%; 6 to 15years: 1.25%; 16 to 20years: 1%; over 20 years: 0%.

Calculation of the increase in income applicable to the supplemental deﬁned-beneﬁt pension plan – ﬁscal year 2018

At its meeting held on February14, 2019, the Supervisory Board noted the satisfaction of one of the criteria that determines the annuity growth rate. As the

ﬁnancial targets had been exceeded, the rate for 2018 was approved.

Financial criteria (in millions of euros)

Fiscal year 2018

Targets Achieved Achievement rate

Adjusted net income 1,068 1,157 108%

Operating cash ﬂow 884 1,126 127%

Average stock market indices performance (1) -4.6% -3.1% +1.5 points

(1) Composite weighted index – CAC 40 (50%) and EURO STOXX

Media (50%), reinvested dividends.

The provision for 2018 for members of the Management Board under this pension plan structure totaled €7million.

2.2.3. HIGHEST COMPENSATION PAID WITHIN THE GROUP

In ﬁscal year 2018, the compensation of the ten highest-paid VivendiSA employees in France totaled €12.23 million, including beneﬁts of any kind.

In 2018, the total compensation for the ten highest-paid employees in the group as a whole was €62.9 million, including beneﬁts of any kind. None of the

Management Board members were among these ten highest-paid employees.

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2.3.Performance shares awarded to the Chairman

andmembersofthe Management Board

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.3. Performance shares awarded to the Chairman

andmembersofthe Management Board

In 2018, awards made under performance share plans consisted of 1.632 million shares, or 0.125% of the share capital. Performance shares granted to

members of the Management Board are presented in the table below. They represent 0.013% of the share capital and 10.72% of the overall grant.

The total numberof shares granted each year to all beneﬁciaries pursuant to the authorization given by the General Shareholders’ Meeting of April19, 2018

(Resolution 27) cannot exceed 0.33% of the share capital on the date of grant, and 0.035% for members of the Management Board.

2.3.1. PERFORMANCE SHARES GRANTED TO MEMBERS OF THE MANAGEMENT BOARD IN 2018: PLAN2018-05–1

OFMAY17, 2018 (AMF RECOMMENDATIONS, TABLE 6)

Numberof rights to

shares granted during

the ﬁscal year

Value of rights under

the method used

forConsolidated

Financial Statements

(ineuros)(a)

Vesting date

of the rights

Date of availability

ofshares

Performance

conditions (b)

Arnaud de Puyfontaine 50,000 992,500 05/18/2021 05/19/2023 Yes

Gilles Alix - - - - -

Cédric de Bailliencourt - - - - -

Frédéric Crépin 35,000 694,750 05/18/2021 05/19/2023 Yes

Simon Gillham 30,000 595,500 05/18/2021 05/19/2023 Yes

Hervé Philippe 20,000 397,000 05/18/2021 05/19/2023 Yes

Stéphane Roussel 40,000 794,000 05/18/2021 05/19/2023 Yes

Total 175,000 3,473,750 na na na

na: not applicable.

(a) The retained value of the unit right, pursuant to IFRS 2, was €19.85.

Vesting of performance shares granted in 2018 will be reviewed in 2021, in accordance with the Plan Regulations, and these shares will not be available until 2023.

(b) Assessed over three years.

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2.3.Performance shares awarded to the Chairman

andmembersofthe Management Board

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.3.2. HISTORY OF PERFORMANCE SHARES GRANTED (AMF RECOMMENDATIONS, TABLE 8)

2018 2017 2016 2015 (adjusted) 2014 (adjusted)

Date of the General Shareholders’ Meeting

approving the share grant

AGM

04/19/2018

AGM

04/21/2016

AGM

04/21/2016

AGM

06/24/2014

AGM

04/21/2011

Date of the Supervisory Board meeting 05/17/2018 02/23/2017 05/11/2016 02/27/2015 02/21/2014

Grant date 05/17/2018 02/23/2017 05/11/2016 02/27/2015 02/21/2014

Maximum numberof shares that may be granted

pursuant to the authorization of the General

Shareholders’ Meeting 13,000,447 12,870,878 13,686,208 13,516,006 13,396,099

Maximum numberof shares that may be granted

during the year based on grants already made 4,290,147 4,247,389 4,516,448 4,460,282 4,420,712

Total numberof shares granted 1,631,750 1,547,750 1,320,440 1,565,880 400,796

Numberof rights canceled due to the departure

ofbeneﬁciaries 7,500 19,500 22,030 55,020 0

Numberof Shares Granted to Members

of the Management Board

Arnaud de Puyfontaine, Chairman 50,000 50,000 (c) 95,000 (b) 70,000 (a)105,497

Gilles Alix - na na na na

Cédric de Bailliencourt - na na na na

Frédéric Crépin 35,000 40,000 (c) 50,000 na na

Simon Gillham 30,000 30,000 (c) 50,000 na na

Hervé Philippe 20,000 40,000 (c) 50,000 (b) 50,000 0

Stéphane Roussel 40,000 40,000 (c) 50,000 (b) 50,000 0

Vesting date 05/18/2021 02/24/2020 05/13/2019 02/28/2018 02/22/2016

Date of availability 05/19/2023 02/25/2022 05/14/2021 03/02/2020 02/23/2018

na: not applicable.

(a) The performance criteria achievement rate was 75% and accordingly, 79,123 shares vested in 2016.

(b) The performance criteria achievement rate was 75% for 2015, 2016 and 2017 and accordingly, the numberof shares vesting on February28,2018 was capped

at 52,500shares and 37,500 shares, respectively.

(c) The performance criteria achievement rate was 75% for 2016, 2017 and 2018 and accordingly, the numberof shares vesting on May13, 2019 will be capped

at 71,250shares and 37,500 shares, respectively, subject to the presence of the beneﬁciaries in the company (see Section2.3.4 of this chapter).

2.3.3. PERFORMANCE SHARES THAT BECAME AVAILABLE IN 2018, FOR MEMBERS OF THE MANAGEMENT BOARD

DURING THEIR TERM OF OFFICE (AMF RECOMMENDATIONS, TABLE 7)

Performance shares that became available

for each memberof the Management Board

(Plan awarded in 2014) Plan numberand date

Numberof shares that

became available

Vesting

conditions

Arnaud de Puyfontaine 2014/02-1 02/21/2014 79,123 Yes

Gilles Alix na na na

Cédric de Bailliencourt na na na

Frédéric Crépin na na na

Simon Gillham na na na

Hervé Philippe na na na

Stéphane Roussel na na na

na: not applicable (no grants in 2014).

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2.3.Performance shares awarded to the Chairman

andmembersofthe Management Board

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.3.4. ASSESSMENT OF PERFORMANCE CRITERIA FOR FISCAL YEARS 2016, 2017 AND 2018

FOR VESTING OF SHARES IN 2019 UNDER THE 2016 PERFORMANCE SHARE PLANS – PLAN 05-2016-1

At its meeting held on February14, 2019, the Supervisory Board, after a review by the Corporate Governance, Nominations and Remuneration Committee,

approved the level of achievement of objectives for the cumulative ﬁscal years 2016, 2017 and 2018 for the performance share plan granted to the members

of the Management Board by the Supervisory Board on May11, 2016. All of the criteria that had been set were satisﬁed (see table below). However, since

the negative impact of the situation in Italy is not reﬂected in the ﬁnancial results, the Supervisory Board decided to only conﬁrm 75% of the initial grant of

the 2016 performance shares. Consequently, 73,750 rights to performance shares granted to members of the Management Board in 2016 were canceled.

Objectives 2016-2018

Achievement

Change/

Target % weighting RateWeighting Indicators Threshold Target Maximum

80 Internal indicator: ﬁnancial targets (1)

40 Adjusted net income per share +5.0% +15.0% +20.0% +31.7% +16.7 points 200% 80%

30 Growth in group EBITDA +5.0% +10.0% +15.0% +16.6% +6.6 points 172% 52%

10 Growth in group EBITA margin (in points) +1.0 +2.0 +3.0 +0.7 -1.3 points 0% 0%

Total internal indicator 132%

20 External indicator: average stock market

indices performance (2)

15 EURO STOXX

Media -8.4% -5.4% -2.4% +25.3% +30.7 points 200% 30%

5 CAC 40 +9.0% +12.9% +16.8% +25.3% +12.4 points 200% 10%

Total external Indicator 20%

Total (3) 100%

(1) Achieved, restated of certain exceptional items.

(2) Reinvested dividends.

(3) Capped at 100%.

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2.3.Performance shares awarded to the Chairman

andmembersofthe Management Board

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.3.5. GRANT OF STOCK OPTIONS TO MEMBERS

OF THE MANAGEMENT BOARD

The company has not granted any stock options since 2013.

2.3.6. STOCK OPTIONS EXERCISED IN 2018 BY CORPORATE

OFFICERS (AMF RECOMMENDATIONS, TABLE 5)

In 2018, Stéphane Roussel exercised 59,842 stock options at a price of

€20.15 (Plan 2008/04).

Frédéric Crépin exercised 34,922 stock options at a price of €20.15 (Plan

2008/04). Simon Gillham exercised 40,799 stock options at a price of €11.76

(Plan 2012/04).

2.3.7. CONDITIONS FOR CORPORATE OFFICERS TO HOLD

SHARES RECEIVED FROM THE EXERCISE OF STOCK

OPTIONS AND GRANTS OF PERFORMANCE SHARES

At its meeting held on March6, 2007, pursuant to Articles L.225-185 and

L.225-197-1 of the French Commercial Code, the Supervisory Board

approved rules for members of the Management Board in relation to the

holding of shares received from the exercise of stock options and

performance shares granted since 2007.

Members of the Management Board must hold in a registered account and

until the end of their term of ofﬁce a numberof shares received from the

exercise of stock options and the grant of performance shares since the

2007 plan was adopted. These must be equal to at least 20% of the net

capital gain recorded each year (if a gain is recorded) from exercise of the

stock options or sale of the performance shares.

2.3.8. CONDITIONS SPECIFIC TO VIVENDI

At its meeting held on February27, 2015, and upon the recommendation of

the Corporate Governance, Nominations and Remuneration Committee, the

Supervisory Board decided to amend the rules on the obligation for

Corporate Ofﬁcers and senior executives of the group to hold shares of the

company to provide that, within a maximum of ﬁve years after they take up

their positions:

3 the Chairman and the members of the Management Board must

retain a numberof shares equal to one year of their fixed gross

compensation and target bonus in a registered account. These must

be held until they leave their positions; and

3 members of General Management and the senior executives of

each of the operational subsidiaries must retain a numberof shares

equal to six months of their ﬁxed gross compensation and target

bonus in a registered account. These must be held until they leave

their positions.

2.3.9. LARGEST GRANTS OF PERFORMANCE SHARES

ANDEXERCISES OF STOCK OPTIONS IN 2018,

EXCLUDING CORPORATE OFFICERS

(AMFRECOMMENDATIONS, TABLE 9)

The ten largest grants to beneﬁciaries other than Corporate Ofﬁcers totaled

218,000 performance shares, representing 13.32% of the total numberof

performance shares granted in 2018, and 0.016% of the share capital. The

ten largest exercises of stock options, other than by Corporate Officers,

consisted of a total of 423,366 stock options at an average weighted price

of €18.27.

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2.4.Compensation Summary Tables

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.4.Compensation Summary Tables

2.4.1. SUMMARY OF GROSS COMPENSATION PAID (BEFORE TAXES AND SOCIAL SECURITY CONTRIBUTIONS)

ANDTHEVALUE OF PERFORMANCE SHARES GRANTED TO EACH MEMBEROF THE MANAGEMENT BOARD

DURINGFISCAL YEAR 2018 (AMF RECOMMENDATIONS, TABLE 1)

(in euros) 2017 2018

Arnaud de Puyfontaine

Chairman of the Management Board

Gross compensation paid 2,124,831 2,355,872

Book value of stock options granted na na

Book value of performance shares granted (a) 718,500 992,500

Total 2,843,331 3,348,372

Gilles Alix (1)

Memberof the Management Board and Senior Vice President in charge of inter-group coordination

Gross compensation paid (2) 166,687 (3) 321,915

Book value of stock options granted na na

Book value of performance shares granted (a) na na

Total 166,687 321,915

Cédric de Bailliencourt (1)

Memberof the Management Board and Senior Vice President in charge of investor relations

andinter-group ﬁnancial communications

Gross compensation paid (4) 133,368 (5) 257,756

Book value of stock options granted na na

Book value of performance shares granted (a) na na

Total 133,368 257,756

Frédéric Crépin

Memberof the Management Board and Group General Counsel

Gross compensation paid 1,366,524 1,441,989

Book value of stock options granted na na

Book value of performance shares granted (a) 574,800 694,750

Total 1,941,324 2,136,739

Simon Gillham

Memberof the Management Board, Chairman of Vivendi Village and Senior Executive Vice President,

Communications of Vivendi

Gross compensation paid 1,167,111 1,282,395

Book value of stock options granted na na

Book value of performance shares granted (a) 431,100 595,500

Total 1,598,211 1,877,895

Hervé Philippe

Memberof the Management Board and Chief Financial Ofﬁcer

Gross compensation paid 1,671,696 1,696,433

Book value of stock options granted na na

Book value of performance shares granted (a) 574,800 397,000

Total 2,246,496 2,093,433

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2.4.Compensation Summary Tables

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

(in euros) 2017 2018

Stéphane Roussel

Memberof the Management Board and Chief Operating Ofﬁcer

Gross compensation paid 2,153,529 2,268,806

Book value of stock options granted na na

Book value of performance shares granted (a) 574,800 794,000

Total 2,728,329 3,062,806

na: not applicable.

(1) Memberof the Management Board since September1, 2017. Gilles Alix and Cédric de Bailliencourt receive compensation from Bolloré Group, which does not control

Vivendi within the meaning of Article L.233-16 of the French Commercial Code.

(2) Amount prorated; annual basis: €500,000.

(3) Prorated amount of the variable compensation in respect of ﬁscal year 2017, paid in 2018 after application of a proration of 50%: €62,500.

(4) Amount prorated; annual basis: €400,000.

(5) Prorated amount of the variable compensation in respect of ﬁscal year 2017, paid in 2018 after application of a proration of 50%: €50,000.

(a) The book value is calculated based on the numberof performance shares. The retained value of the unit right is shown in the ﬁnancial statements pursuant to IFRS 2 (for

a description of the valuation of securities settled through the issuance of shares, see Note 22 to the Consolidated Financial Statements in Chapter4). The value is

€14.37 for each performance share granted in February2017 and €19.85 for each performance share granted in May2018.

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2.4.Compensation Summary Tables

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.4.2. SUMMARY TABLE OF COMPENSATION (BEFORE TAXES AND SOCIAL SECURITY CONTRIBUTIONS) OF MEMBERS

OFTHE MANAGEMENT BOARD DURING FISCAL YEARS 2017 AND 2018 (AMF RECOMMENDATIONS, TABLE 2)

(in euros)

Fiscal year 2017 Fiscal year 2018

Amounts paid Amounts owed Amounts paid Amounts owed

Arnaud de Puyfontaine, Chairman of the Management Board

Fixed compensation 1,200,000 1,200,000 (1) 1,400,000 (1) 1,400,000

Variable compensation for 2016 900,000 - - -

Variable compensation for 2017 - (2) 540,000 (2) 540,000 -

Variable compensation for 2018 - - - (1) 1,050,000

Other compensation na na na na

Director’s fees na na (3) 857 (3) 857

Beneﬁts of any kind (*) 24,831 24,831 25,015 25,015

One-time payment (1) na na (4) 390,000 (4) 390,000

Total 2,124,831 1,764,831 2,355,872 2,865,872

Gilles Alix, Memberof the Management Board (5)

Fixed compensation (6) 166,667 (6) 166,667 (8) 250,000 (8) 250,000

Variable compensation for 2017 - (7) 62,500 (7) 62,500 -

Variable compensation for 2018 - - - (8) 187,500

Other compensation na na na na

Director’s fees na na na na

Beneﬁts of any kind(**) 20 20 9,415 9,415

Total 166,687 229,187 321,915 446,915

Cédric de Bailliencourt, Memberof the Management Board (5)

Fixed compensation (9) 133,333 (9) 133,333 (8) 200,000 (8) 200,000

Variable compensation for 2017 - (7) 50,000 (7) 50,000 -

Variable compensation for 2018 - - - (8) 150,000

Other compensation na na na na

Director’s fees na na na na

Beneﬁts of any kind(**) 35 35 7,756 7,756

Total 133,368 183,368 257,756 357,756

Frédéric Crépin, Memberof the Management Board

Fixed compensation 750,000 750,000 800,000 800,000

Variable compensation for 2016 560,000 - - -

Variable compensation for 2017 - 562,500 562,500 -

Variable compensation for 2018 - - - 600,000

Other compensation na na na na

Director’s fees (10) 35,000 (10) 35,000 (11) 38,429 (11) 38,429

Beneﬁts of any kind (**) 21,524 21,524 41,060 41,060

Total 1,366,524 1,369,024 1,441,989 1,479,489

Simon Gillham, Memberof the Management Board

Fixed compensation 675,000 675,000 750,000 750,000

Variable compensation for 2016 470,000 - - -

Variable compensation for 2017 - 506,250 506,250 -

Variable compensation for 2018 - - - 562,500

Other compensation na na na na

Director’s fees na na (3) 4,286 (3) 4,286

Beneﬁts of any kind (**) 22,111 22,111 21,859 21,859

Total 1,167,111 1,203,361 1,282,395 1,338,645

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2.4.Compensation Summary Tables

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

(in euros)

Fiscal year 2017 Fiscal year 2018

Amounts paid Amounts owed Amounts paid Amounts owed

Hervé Philippe, Memberof the Management Board

Fixed compensation 940,000 940,000 940,000 940,000

Variable compensation for 2016 705,000 - - -

Variable compensation for 2017 - 705,000 705,000 -

Variable compensation for 2018 - - - 705,000

Other compensation na na na na

Director’s fees na na (3) 3,429 (3) 3,429

Beneﬁts of any kind (**) 26,696 26,696 48,004 48,004

Total 1,671,696 1,671,696 1,696,433 1,696,433

Stéphane Roussel, Memberof the Management Board

Fixed compensation 1,000,000 1,000,000 1,000,000 1,000,000

Variable compensation for 2016 750,000 - - -

Variable compensation for 2017 - 750,000 750,000 -

Variable compensation for 2018 - - - 750,000

Other compensation (12) 340,000 (12) 340,000 (12) 450,000 (12) 450,000

Director’s fees (10) 35,000 (10) 35,000 (11) 39,286 (11) 39,286

Beneﬁts of any kind (**) 28,529 28,529 29,520 29,520

Total 2,153,529 2,153,529 2,268,806 2,268,806

na: not applicable.

(1) Fixed compensation in respect of 2018 of €1,400,000 and cancellation of the application of the 60% proration to his ﬁxed and variable compensation in respect of 2018

following the termination of the executive functions of Arnaud de Puyfontaine at Telecom Italia and the non-payment in 2018 by Telecom Italia of his variable

compensation in respect of 2017 (see Section2.2.2.1 of this chapter).

(2) To take into account Arnaud De Puyfontaine’s appointment as Executive Chairman of the Board of Directors of Telecom Italia on June1, 2017 and upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee, the Supervisory Board decided at its meeting of February15, 2018, to apply

a 60% proration factor to his variable compensation in respect of 2017, to be paid in 2018 (annual basis: €900,000).

(3) Director’s fees paid by Canal+ Group.

(4) Amount paid following the termination, on April24, 2018, of the executive functions of Arnaud de Puyfontaine at Telecom Italia and the non-payment in 2018

byTelecom Italia of his variable compensation in respect of 2017 (see Section2.2.2.1 of this chapter).

(5) Memberof the Management Board since September1, 2017.

(6) Amount prorated; annual basis: €500,000.

(7) Given the functions of Gilles Alix and Cédric de Bailliencourt within Bolloré Group and upon the recommendation of the Corporate Governance, Nominations and

Remuneration Committee, the Supervisory Board, at its meeting of February15,2018, decided to apply a 50% proration factor to their variable compensation in respect

of 2017, to be paid in 2018.

(8) Given the functions of Gilles Alix and Cédric de Bailliencourt within Bolloré Group and upon the recommendation of the Corporate Governance, Nominations and

Remuneration Committee, the Supervisory Board, at its meeting of February15,2018, decided to apply a 50% proration factor to the ﬁxed and variable compensation

of Gilles Alix and Cédric de Bailliencourt in respect of ﬁscal year 2018 (see Section2.2.2.1 of this chapter).

(9) Amount prorated; annual basis: €400,000.

(10) Director’s fees paid by Gameloft SE.

(11) Director’s fees paid by Gameloft SE and Canal+ Group.

(12) Compensation paid by Gameloft SE.

(*) Beneﬁts of any kind include the use of a company car without a driver and GSC coverage (job-loss insurance for Corporate Ofﬁcers).

(**) Beneﬁts of any kind include, depending on the case, the use of a company car without a driver, proﬁt sharing, employer contribution to social charges surpluses and the

partial liquidation of the time savings account (CET).

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2.4.Compensation Summary Tables

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.4.3. SUMMARY OF COMMITMENTS ISSUED IN FAVOR OF THE CHAIRMAN AND MEMBERS

OF THE MANAGEMENT BOARD (AMF RECOMMENDATIONS, TABLE 11)

Employment contract

Eligibility for supplemental

pension plan (1)

Compensation or other

beneﬁts due or that may

become due at the end

of a term in ofﬁce Non-compete payment

Yes No Yes No Yes No Yes No

Arnaud de Puyfontaine

Chairman of the Management Board (2)X X (3)X X

Gilles Alix

Memberof the Management Board X X X X

Cédric de Bailliencourt

Memberof the Management Board X X X X

Frédéric Crépin

Memberof the Management Board X X X X

Simon Gillham

Memberof the Management Board X X X X

Hervé Philippe

Memberof the Management Board X X X X

Stéphane Roussel

Memberof the Management Board X X X X

(1) Subject to plan terms and conditions and to the criteria governing the annual annuity growth rate (see Sections 2.1.2.2 and 2.2.2.3).

(2) Arnaud de Puyfontaine waived the beneﬁt of his employment contract following his appointment as Chairman of the Management Board by the Supervisory Board on

June 24, 2014.

(3) Commitment approved at the General Shareholders’ Meeting held on April17, 2015.

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2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

2.5.Elements of compensation and beneﬁts of any kind paid

orawarded to executive and non-executive ofﬁcers for their

service in such capacity, in respect of ﬁscal year 2018, and

submitted to the Combined General Shareholders’ Meeting

ofApril15, 2019

2.5.1. VINCENT BOLLORÉ, CHAIRMAN OF THE SUPERVISORY BOARD UNTIL APRIL19, 2018 (RESOLUTION 5)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €102,376 Amount prorated; annual basis: €340,000.

Gross ﬁxed compensation set by the Supervisory Board on February15, 2018 upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee,

underthe principles and criteria for setting the compensation of the Chairman and members

of the Supervisory Board for 2018 for their service in such capacity, as approved

by the Supervisory Board at the same meeting and by the General Shareholders’ Meeting

ofApril19, 2018 (Resolution 13).

2018 variable compensation na The Chairman of the Supervisory Board does not receive any variable compensation.

Variable deferred compensation na The Chairman of the Supervisory Board does not receive any variable deferred compensation.

Multi-year variable compensation na The Chairman of the Supervisory Board does not receive any multi-year variable compensation.

Extraordinary compensation na The Chairman of the Supervisory Board does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013. In addition, pursuant to French law,

the Chairman of the Supervisory Board is not eligible for grants of stock options.

Performance shares na Pursuant to French law, the Chairman of the Supervisory Board is not eligible for grants

ofperformance shares.

Director’s fees €20,000 Fixed amount.

Beneﬁts of any kind na The Chairman of the Supervisory Board does not receive any beneﬁts.

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment na The Chairman of the Supervisory Board will not receive a severance payment in respect

of his term of ofﬁce.

Non-compete payment na The Chairman of the Supervisory Board receives no payment of this kind.

Supplemental pension plan na The Chairman of the Supervisory Board is not eligible for Vivendi’s supplemental deﬁned-beneﬁt

pension plan.

na: not applicable.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Fifth resolution: Approval of the elements of compensation and the beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 toVincent

Bolloré in his capacity as Chairman of the Supervisory Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Vincent Bolloré in his capacity as Chairman of the Supervisory Board (until April19, 2018), as set out in the Annual

Report – 2018 Document de Référence– Chapter3 – paragraph2.5.1 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or

awarded to executive and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018, and submitted to the Combined General

Meeting of Shareholders of April15, 2019”.

2.5.2. YANNICK BOLLORÉ, CHAIRMAN OF THE SUPERVISORY BOARD FROM APRIL19, 2018 (RESOLUTION 6)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €237,624 Amount prorated; annual basis: €340,000.

Gross ﬁxed compensation set by the Supervisory Board on February15, 2018 upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee,

underthe principles and criteria for setting the compensation of the Chairman and members

of the Supervisory Board for 2018, as approved by the Supervisory Board at the same meeting

andby the General Shareholders’ Meeting of April19, 2018 (Resolution 13).

2018 variable compensation na The Chairman of the Supervisory Board does not receive any variable compensation.

Variable deferred compensation na The Chairman of the Supervisory Board does not receive any variable deferred compensation.

Multi-year variable compensation na The Chairman of the Supervisory Board does not receive any multi-year variable compensation.

Extraordinary compensation na The Chairman of the Supervisory Board does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013. In addition, pursuant to French law,

the Chairman of the Supervisory Board is not eligible for grants of stock options.

Performance shares na Pursuant to French law, the Chairman of the Supervisory Board is not eligible for grants

ofperformance shares.

Director’s fees €40,000 Fixed amount.

Beneﬁts of any kind na The Chairman of the Supervisory Board does not receive any beneﬁts.

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment na The Chairman of the Supervisory Board will not receive a severance payment in respect

of his term of ofﬁce.

Non-compete payment na The Chairman of the Supervisory Board receives no payment of this kind.

Supplemental pension plan na The Chairman of the Supervisory Board is not eligible for Vivendi’s supplemental deﬁned-beneﬁt

pension plan.

na: not applicable.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Sixth resolution: Approval of the elements of compensation and beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 to Yannick

Bolloré in his capacity as Chairman of the Supervisory Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Yannick Bolloré in his capacity as Chairman of the Supervisory Board (since April19, 2018), as set out in the Annual

Report – 2018 Document de Référence – Chapter3 – paragraph2.5.2 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or

awarded to executive and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018, and submitted to the Combined General

Meeting of Shareholders of April15, 2019”.

2.5.3. ARNAUD DE PUYFONTAINE, CHAIRMAN OF THE MANAGEMENT BOARD (RESOLUTION 7)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €1,400,000 Fixed compensation increased from €1,200,000 (1) to €1,400,000 by the Supervisory Board

at its meetings of May17, 2018 and July30, 2018 upon the recommendation of the Corporate

Governance, Nominations and Remuneration Committee and following the termination of Arnaud

De Puyfontaine’s responsibilities as Executive Chairman of the Board of Directors of Telecom Italia

and the non-payment in 2018 by Telecom Italia of his variable compensation in respect of 2017

(see Section2.2.2.1 of this chapter).

2018 variable compensation €1,050,000 At its meeting on February14, 2019 and upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board reviewed the achievement rate

of the quantitative and qualitative criteria used to determine the reference amount of variable

compensation to be paid to the Chairman of the Management Board in respect of ﬁscal year 2018.

It amounted to 75% of his ﬁxed compensation (see Section2.2.2.1 of this chapter).

Variable deferred compensation na The Chairman of the Management Board does not receive any variable deferred compensation.

Multi-year variable compensation na The Chairman of the Management Board does not receive any multi-year variable compensation.

Extraordinary compensation na The Chairman of the Management Board does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013.

Performance shares €992,500

(book value)

Grant of 50,000 performance shares by the Supervisory Board on May17, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee.

Vesting of these performance shares is subject to the fulﬁllment of performance conditions over

three consecutive ﬁscal years (2018-2020). Vesting of these performance shares requires

satisfaction of two internal indicators (70%): Group EBIT (35%) and Cash ﬂow from operations

after interest and tax (group CFAIT) (35%), to be determined as of December31, 2020 based on

the cumulative ﬁscal years 2018, 2019 and 2020; and an external indicator (30%): Vivendi share

performance between January1,2018 and December31, 2020 relative to two indices:

the EURO STOXX

Media (20%) and the CAC 40 (10%) (see Section2.2.2.1 of this chapter).

Director’s fees na Arnaud de Puyfontaine does not receive director’s fees for his role as Chairman

of the Management Board.

Beneﬁts of any kind €25,015 Company car without a driver, job-loss insurance (GSC) and employer contribution to social

charges surpluses.

One-time payment €390,000 Upon the recommendation of the Corporate Governance, Nominations and Remuneration

Committee, at its meetings of May17 , 2018 and July30, 2018, the Supervisory Board, decided

topay Arnaud de Puyfontaine a one-time payment of €390,000 following the termination

onApril24, 2018, of his responsibilities as Executive Chairman of the Board of Directors

ofTelecom Italia and the non-payment in 2018 by Telecom Italia of his variable compensation

inrespect of 2017 (see Section2.2.2.1 of this chapter).

(1) Prior to the application of a 60% proration in respect of the functions of Executive Chairman of the Board of Directors of Telecom Italia. Gross ﬁxed compensation was

initially set by the Supervisory Board on February15, 2018, upon the recommendation of the Corporate Governance, Nominations and Remuneration Committee, in line

with the principles and criteria for setting the compensation of the Chairman of the Management Board for 2018, as approved by the Supervisory Board at the same

meeting and by the General Shareholders’ Meeting of April19, 2018 (Resolution 14).

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2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment None Conditional commitment in the event of termination at the initiative of the company, subject

toperformance conditions (see Section2.2.2.1 of this chapter).

Non-compete payment None The Chairman of the Management Board receives no payment of this kind.

Supplemental pension plan None As is the case for a numberof the Vivendi group’s senior executives, the Chairman

of the Management Board is eligible for the deﬁned-beneﬁt supplemental pension plan set up

inDecember2005, approved by the Combined General Shareholders’ Meeting held

on April20, 2006.

Upper limit: 30% of reference salary (ﬁxed plus variable) capped at 60times the social security

maximum. Presence at the company at the time of retirement is required.

Annuity growth rate in 2018, including a seniority-based increase within the group: 2.50%

subjectto performance criteria. Amount of potential pension acquired in 2018: €48,500

(seeSection2.2.2.3 of this chapter).

na: not applicable.

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Seventh resolution: Approval of the elements of compensation and beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 to Arnaud

de Puyfontaine in his capacity as Chairman of the Management Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Arnaud de Puyfontaine in his capacity as Chairman of the Management Board, as set out in the Annual Report –

2018 Document de Référence – Chapter3 – paragraph2.5.3 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or awarded to

executive and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018 and submitted to the Combined General Meeting of

Shareholders of April15, 2019”.

2.5.4. GILLES ALIX – MEMBEROF THE MANAGEMENT BOARD AND SENIOR VICE PRESIDENT

IN CHARGE OF INTER–GROUP COORDINATION SINCE SEPTEMBER1, 2017 (RESOLUTION 8)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €250,000 After application of a 50% proration in respect of his functions within Bolloré Group.

Gross ﬁxed compensation set by the Supervisory Board on February15, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee

and in line with the principles and criteria for setting the compensation of the members

of the Management Board for 2018, as approved by the Supervisory Board at the same meeting

and by the General Shareholders’ Meeting of April19, 2018 (Resolution 15).

2018 variable compensation €187,500 At its meeting on February14, 2019 and upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board reviewed the achievement rate

of the quantitative and qualitative criteria used to determine the reference variable compensation

to be paid to Gilles Alix in respect of ﬁscal year 2018. It amounted to 75% of his ﬁxed

compensation of €375,000, namely €187,500 after a 50% proration (see Section2.2.2.2

of this chapter).

Variable deferred compensation na Gilles Alix does not receive any variable deferred compensation.

Multi-year variable compensation na Gilles Alix does not receive any multi-year variable compensation.

Extraordinary compensation na Gilles Alix does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013.

Performance shares na Gilles Alix was not awarded any performance shares in 2018.

Director’s fees na Gilles Alix does not receive director’s fees for his role as a memberof the Management Board.

Beneﬁts of any kind €9,415 No company car. Proﬁt sharing (under VivendiSA’s collective agreement) and employer

contribution to social charges surpluses.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment None Gilles Alix does not beneﬁt from any commitment to receive a severance payment in respect

of his corporate ofﬁce.

Non-compete payment None Gilles Alix receives no payment of this kind.

Supplemental pension plan None As is the case for a numberof the Vivendi group’s senior executives, Gilles Alix is eligible for the

supplemental deﬁned-beneﬁt pension plan set up in December2005, approved by the Combined

General Shareholders’ Meeting held on April20, 2006.

Upper limit: 30% of reference salary (ﬁxed plus variable) capped at 60times the social security

maximum. Presence at the company at time of retirement is required.

Annuity growth rate in 2017, including a seniority-based increase within the group: 2.50% subject

to performance criteria. Amount of potential pension acquired in 2018: €15,625 (see

Section2.2.2.3 of this chapter).

na: not applicable.

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Approval of the elements of compensation and beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 to Gilles Alix in his capacity

as a memberof the Management Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Gilles Alix in his capacity as a memberof the Management Board, as set out in the Annual Report – 2018

Document de Référence – Chapter3 – paragraph2.5.4 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or awarded to

executive and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018 and submitted to the Combined General Meeting of

Shareholders of April15,2019”.

2.5.5. CÉDRIC DE BAILLIENCOURT – MEMBEROF THE MANAGEMENT BOARD AND SENIOR VICE PRESIDENT

INCHARGEOF INVESTOR RELATIONS AND INTER-GROUP FINANCIAL COMMUNICATIONS

SINCE SEPTEMBER1, 2017 (RESOLUTION 9)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €200,000 After application of a 50% proration in respect of his functions within Bolloré Group.

Gross ﬁxed compensation set by the Supervisory Board on February15, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee

and in line with the principles and criteria for setting the compensation of the members

of the Management Board for 2018, as approved by the Supervisory Board at the same meeting

and by the General Shareholders’ Meeting of April19, 2018 (Resolution 15).

2018 variable compensation €150,000 At its meeting on February14, 2019 and upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board reviewed the achievement rate

of the quantitative and qualitative criteria used to determine the reference amount of variable

compensation to be paid to Cédric de Bailliencourt in respect of ﬁscal year 2018. It amounted

to75% of his ﬁxed compensation of €300,000, namely €150,000 after a 50% proration

(seeSection2.2.2.2 of this chapter).

Variable deferred compensation na Cédric de Bailliencourt does not receive any variable deferred compensation.

Multi-year variable compensation na Cédric de Bailliencourt does not receive any multi-year variable compensation.

Extraordinary compensation na Cédric de Bailliencourt does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013.

Performance shares na Cédric de Bailliencourt was not awarded any performance shares in 2018.

Director’s fees na Cédric de Bailliencourt does not receive director’s fees for his role as a member

of the Management Board.

Beneﬁts of any kind €7,756 No company car. Proﬁt sharing (under VivendiSA’s collective agreement) and employer

contribution to social charges surpluses.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment None Cédric de Bailliencourt does not beneﬁt from any commitment to receive a severance payment

inrespect of his corporate ofﬁce.

Non-compete payment None Cédric de Bailliencourt receives no payment of this kind.

Supplemental pension plan None As is the case for a numberof the Vivendi group’s senior executives, Cédric de Bailliencourt

iseligible for the supplemental deﬁned-beneﬁt pension plan set up in December2005, approved

by the Combined General Shareholders’ Meeting held on April20, 2006.

Upper limit: 30% of reference salary (ﬁxed plus variable) capped at 60times the social security

maximum. Presence at the company at time of retirement is required.

Annuity growth rate in 2018, including a seniority-based increase within the group: 2.50%

subjectto performance criteria. Amount of potential pension acquired in 2018: €12,500

(seeSection2.2.2.3 of this chapter).

na: not applicable.

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Ninth resolution: Approval of the elements of compensation and beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 to Cédric

de Bailliencourt in his capacity as a memberof the Management Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Cédric de Bailliencourt in his capacity as a memberof the Management Board, as set out in the Annual Report –

2018 Document de Référence – Chapter3 – paragraph2.5.5 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or awarded to

executive and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018 and submitted to the Combined General Meeting of

Shareholders of April15, 2019”.

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2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

2.5.6. FRÉDÉRIC CRÉPIN – MEMBEROF THE MANAGEMENT BOARD AND GROUP GENERAL COUNSEL (RESOLUTION 10)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €800,000 Gross ﬁxed compensation set by the Supervisory Board on February15, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee

and in line with the principles and criteria for setting the compensation of the members

of the Management Board for 2018, as approved by the Supervisory Board at the same meeting

and by the General Shareholders’ Meeting of April19, 2018 (Resolution 15).

2018 variable compensation €600,000 At its meeting on February14, 2019 and upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board reviewed the achievement rate

of the quantitative and qualitative criteria used to determine the amount of variable compensation

to be paid to Frédéric Crépin in respect of 2018. It amounted to 75% of his ﬁxed compensation

(see Section2.2.2.2 of this chapter).

Variable deferred compensation na Frédéric Crépin does not receive any variable deferred compensation.

Multi-year variable compensation na Frédéric Crépin does not receive any multi-year variable compensation.

Extraordinary compensation na Frédéric Crépin does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013.

Performance shares €694,750

(book value)

Grant of 35,000 performance shares by the Supervisory Board on May17, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee.

Vesting of these performance shares is subject to the fulﬁllment of performance conditions over

three consecutive ﬁscal years (2018-2020). Vesting of these performance shares requires

satisfaction of two internal indicators (70%): Group EBIT (35%) and Cash ﬂow from operations

after interest and tax (group CFAIT) (35%), to be determined as of December31, 2020 based on

the cumulative ﬁscal years 2018, 2019 and 2020; and an external indicator (30%): Vivendi share

performance between January1,2018 and December31, 2020 relative to two indices:

theEUROSTOXX

Media (20%) and the CAC 40 (10%) (see Section2.2.2.2 of this chapter).

Director’s fees na Frédéric Crépin does not receive director’s fees for his role as a memberof the Management

Board.

Beneﬁts of any kind €41,060 No company car. Proﬁt sharing (under Vivendi’s collective agreement), employer contribution

tosocial charges surpluses and partial liquidation of time saving account (CET).

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment None Frédéric Crépin does not beneﬁt from any commitment to receive a severance payment in respect

of his corporate ofﬁce.

18 months (ﬁxed salary plus target bonus) under his employment contract.

Non-compete payment None Frédéric Crépin receives no payment of this kind.

Supplemental pension plan None As is the case for a numberof the Vivendi group’s senior executives, Frédéric Crépin is eligible

forthe supplemental deﬁned-beneﬁt pension plan set up in December2005, approved

by the Combined General Shareholders’ Meeting held on April20, 2006.

Upper limit: 30% of reference salary (ﬁxed plus variable) capped at 60 times the social security

maximum. Presence at the company at time of retirement is required.

Annuity growth rate in 2018, including a seniority-based increase within the group: 1.00%

subjectto performance criteria. Amount of potential pension acquired in 2018: €13,625

(seeSection2.2.2.3 of this chapter).

na: not applicable.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Tenth resolution: Approval of the elements of compensation and beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 to Frédéric

Crépin in his capacity as a memberof the Management Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Frédéric Crépin in his capacity as a memberof the Management Board, as set out in the Annual Report – 2018

Document de Référence – Chapter3 – paragraph2.5.6 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or awarded to executive

and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018 and submitted to the Combined General Meeting of Shareholders

of April15, 2019”.

2.5.7. SIMON GILLHAM – MEMBEROF THE MANAGEMENT BOARD, CHAIRMAN OF VIVENDI VILLAGE

AND SENIOR EXECUTIVE VICE PRESIDENT, COMMUNICATIONS OF VIVENDI (RESOLUTION 11)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €750,000 Gross ﬁxed annual compensation set by the Supervisory Board on February15, 2018, upon

therecommendation of the Corporate Governance, Nominations and Remuneration Committee

and in line with the principles and criteria for setting the compensation of the members

of the Management Board for 2018, as approved by the Supervisory Board at the same meeting

and by the General Shareholders’ Meeting of April19, 2018 (Resolution 15).

2018 variable compensation €562,500 At its meeting on February14, 2019 and upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board reviewed the achievement rate

of the quantitative and qualitative criteria used to determine the amount of variable compensation

to be paid to Simon Gillham in respect of 2018. It amounted to 75% of his ﬁxed compensation

(seeSection2.2.2.2 of this chapter).

Variable deferred compensation na Simon Gillham does not receive any variable deferred compensation.

Multi-year variable compensation na Simon Gillham does not receive any multi-year variable compensation.

Extraordinary compensation na Simon Gillham does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013.

Performance shares 595,500

(book value)

Grant of 30,000 performance shares by the Supervisory Board on May17, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee.

Vesting of these performance shares is subject to the fulﬁllment of performance conditions over

three consecutive ﬁscal years (2018-2020). Vesting of these performance shares requires

satisfaction of two internal indicators (70%): Group EBIT (35%) and Cash ﬂow from operations

after interest and tax (group CFAIT) (35%), to be determined as of December31, 2020 based on

the cumulative ﬁscal years 2018, 2019 and 2020; and an external indicator (30%): Vivendi share

performance between January1,2018 and December31, 2020 relative to two indices:

theEUROSTOXX

Media (20%) and the CAC 40 (10%) (see Section2.2.2.2 of this chapter).

Director’s fees na Simon Gillham does not receive director’s fees for his role as a memberof the Management

Board.

Beneﬁts of any kind €21,859 No company car. Proﬁt sharing (under VivendiSA’s collective agreement) and employer

contribution to social charges surpluses.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment None Simon Gillham does not beneﬁt from any commitment to receive a severance payment in respect

of his corporate ofﬁce.

18 months (ﬁxed salary plus target bonus) under his employment contract.

Non-compete payment None Simon Gillham receives no payment of this kind.

Supplemental pension plan None As is the case for a numberof the Vivendi group’s senior executives, Simon Gillham is eligible

forthe supplemental deﬁned-beneﬁt pension plan set up in December2005, approved

by the Combined General Shareholders’ Meeting of April20, 2006.

Upper limit: 30% of reference salary (ﬁxed plus variable) capped at 60times the social security

maximum. Presence at the company at the time of retirement is required.

Annuity growth rate in 2018, including a seniority-based increase within the group: 1.25%

subjectto performance criteria. Amount of potential pension acquired in 2018: €15,703

(seeSection2.2.2.3 of this chapter).

na: not applicable.

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Eleventh resolution: Approval of the elements of compensation and beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 to Simon

Gillham in his capacity as a memberof the Management Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Simon Gillham in his capacity as a memberof the Management Board, as set out in the Annual Report – 2018

Document de Référence – Chapter3 – paragraph2.5.7 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or awarded to executive

and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018 and submitted to the Combined General Meeting of Shareholders

of April15, 2019”.

178

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2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

2.5.8. HERVÉ PHILIPPE – MEMBEROF THE MANAGEMENT BOARD AND CHIEF FINANCIAL OFFICER (RESOLUTION 12)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €940,000 Gross ﬁxed compensation set by the Supervisory Board on February15, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee

and in line with the principles and criteria for setting the compensation of the members

of the Management Board for 2018, as approved by the Supervisory Board at the same meeting

and by the General Shareholders’ Meeting of April19, 2018 (Resolution 15).

2018 variable compensation €705,000 At its meeting on February14, 2019 and upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board reviewed the achievement rate

of the quantitative and qualitative criteria used to determine the amount of variable compensation

to be paid to Hervé Philippe in respect of 2018. It amounted to 75% of his ﬁxed compensation

(seeSection2.2.2.2 of this chapter).

Variable deferred compensation na Hervé Philippe does not receive any variable deferred compensation.

Multi-year variable compensation na Hervé Philippe does not receive any multi-year variable compensation.

Extraordinary compensation na Hervé Philippe does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013.

Performance shares €397,000

(book value)

Grant of 20,000 performance shares by the Supervisory Board on May17, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee.

Vesting of these performance shares is subject to the fulﬁllment of performance conditions over

three consecutive ﬁscal years (2018-2020). Vesting of these performance shares requires

satisfaction of two internal indicators (70%): Group EBIT (35%) and Cash ﬂow from operations

after interest and tax (group CFAIT) (35%), to be determined as of December31, 2020 based on

the cumulative ﬁscal years 2018, 2019 and 2020; and an external indicator (30%): Vivendi share

performance between January1,2018 and December31, 2020 relative to two indices:

theEUROSTOXX

Media (20%) and the CAC 40 (10%) (see Section2.2.2.2 of this chapter).

Director’s fees na Hervé Philippe does not receive director’s fees for his role as a memberof the Management

Board.

Beneﬁts of any kind €48,004 Company car without a driver. Proﬁt sharing (under Vivendi’s collective agreement), employer

contribution to social charges surpluses and partial liquidation of time saving account (CET).

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment None Hervé Philippe does not beneﬁt from any commitment to receive a severance payment in respect

of his corporate ofﬁce.

18 months (ﬁxed salary plus target bonus) under his employment contract.

Non-compete payment None Hervé Philippe receives no payment of this kind.

Supplemental pension plan None As is the case for a numberof the Vivendi group’s senior executives, Hervé Philippe is eligible

forthe supplemental deﬁned-beneﬁt pension plan set up in December2005, approved by the

Combined General Shareholders’ Meeting held on April20, 2006.

Upper limit: 30% of reference salary (ﬁxed plus variable) capped at 60times the social security

maximum. Presence at the company at the time of retirement is required.

Annuity growth rate in 2018, including a seniority-based increase within the group: 2.50%

subjectto performance criteria. Amount of potential pension acquired in 2018: €41,125

(seeSection2.2.2.3 of this chapter).

na: not applicable.

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2.5.Elements of compensation and beneﬁts

submitted to the Combined General Shareholders’ Meeting

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Twelfth resolution: Approval of the elements of compensation and beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 to Hervé

Philippe in his capacity as a memberof the Management Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Hervé Philippe in his capacity as a memberof the Management Board, as set out in the Annual Report – 2018

Document de Référence – Chapter3 – paragraph2.5.8 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or awarded to executive

and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018 and submitted to the Combined General Meeting of Shareholders

of April15, 2019”.

2.5.9. STÉPHANE ROUSSEL – MEMBEROF THE MANAGEMENT BOARD AND CHIEF OPERATING OFFICER (RESOLUTION 13)

Compensation elements

for ﬁscal year 2018

Amount or value

(before taxes and

social security

contributions) Description

Fixed compensation €1,000,000 Gross ﬁxed compensation set by the Supervisory Board on February15, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee

and in line with the principles and criteria for setting the compensation of the members

of the Management Board for 2018, as approved by the Supervisory Board at the same meeting

and by the General Shareholders’ Meeting of April19, 2018 (Resolution 15).

2018 variable compensation €750,000 At its meeting on February14, 2019 and upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, the Supervisory Board reviewed the achievement rate

of the quantitative and qualitative criteria used to determine the amount of variable compensation

to be paid to Stéphane Roussel in respect of 2018. It amounted to 75% of his ﬁxed compensation

(see Section2.2.2.2 of this chapter).

Variable deferred compensation na Stéphane Roussel does not receive any variable deferred compensation.

Multi-year variable compensation na Stéphane Roussel does not receive any multi-year variable compensation.

Extraordinary compensation na Stéphane Roussel does not receive any extraordinary compensation.

Stock options na The company has not granted any stock options since 2013.

Performance shares €794,000

(book value)

Grant of 40,000 performance shares by the Supervisory Board on May17, 2018, upon the

recommendation of the Corporate Governance, Nominations and Remuneration Committee.

Vesting of these performance shares is subject to the fulﬁllment of performance conditions over

three consecutive ﬁscal years (2018-2020). Vesting of these performance shares requires

satisfaction of two internal indicators (70%): Group EBIT (35%) and Cash ﬂow from operations

after interest and tax (group CFAIT) (35%), to be determined as of December31, 2020 based on

the cumulative ﬁscal years 2018, 2019 and 2020; and an external indicator (30%): Vivendi share

performance between January1,2018 and December31, 2020 relative to two indices:

theEUROSTOXX

Media (20%) and the CAC 40 (10%) (see Section2.2.2.2 of this chapter).

Director’s fees na Stéphane Roussel does not receive director’s fees for his role as a memberof the Management

Board.

Beneﬁts of any kind €29,520 Company car without a driver. Proﬁt share (under VivendiSA’s collective agreement) and employer

contribution to social charges surpluses.

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COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

Deferred compensation elements owed

or granted in 2018 that were subject

tothe prior approval of the General

Shareholders’ Meeting under the

procedure applying to related-party

agreements and commitments Amount Description

Severance payment None Stéphane Roussel does not beneﬁt from any commitment to receive a severance payment

inrespect of his corporate ofﬁce.

18 months (ﬁxed salary plus target bonus) under his employment contract.

Non-compete payment None Stéphane Roussel receives no payment of this kind.

Supplemental pension plan None As is the case for a numberof the Vivendi group’s senior executives, Stéphane Roussel is eligible

for the supplemental deﬁned-beneﬁt pension plan set up in December2005, approved by the

Combined General Shareholders’ Meeting held on April20, 2006.

Upper limit: 30% of reference salary (ﬁxed plus variable) capped at 60times the social security

maximum. Presence at the company at the time of retirement is required.

Annuity growth rate in 2018, including a seniority-based increase within the group: 1.25%

subjectto performance criteria. Amount of potential pension acquired in 2018: €27,500

(seeSection2.2.2.3 of this chapter).

na: not applicable.

Proposed resolution to be submitted to the Combined General Shareholders’ Meeting of April15, 2019

Thirteenth resolution: Approval of the elements of compensation and beneﬁts of any kind paid or awarded in respect of ﬁscal year 2018 to

Stéphane Roussel in his capacity as a memberof the Management Board.

The General Shareholders’ Meeting, having reviewed the report on corporate governance referred to in Article L.225-68 of the French Commercial Code,

approves, pursuant to Article L.225-100 II. of the French Commercial Code, the elements of the total compensation and the beneﬁts of any kind paid or

awarded in respect of ﬁscal year 2018 to Stéphane Roussel in his capacity as a memberof the Management Board, as set out in the Annual Report – 2018

Document de Référence – Chapter3 – paragraph2.5.9 of Section2.5 titled “Elements of compensation and beneﬁts of any kind paid or awarded to executive

and non-executive ofﬁcers for their service in such capacity, in respect of ﬁscal year 2018 and submitted to the Combined General Meeting of Shareholders

of April15, 2019”.

2.6.Trading in company securities

Stock Trading Ethics

In compliance with the European Market Abuse Regulation No. 596/2014 of

April16, 2014, the recommendations of the AFEP/MEDEF Code and the

rules applicable within Vivendi, purchase and sale transactions involving

the company’s securities are prohibited during the period from the date

when a memberof the Supervisory Board or Management Board becomes

aware of precise information concerning the company’s day-to-day business

or prospects which, if it were made public, would be likely to have a

signiﬁcant effect on the company’s share price, up to the date when this

information is made public.

In addition, pursuant to Vivendi’s internal rules, such transactions are

prohibited for a period of 30 calendar days up to and including the date of

publication of the company’s quarterly, half-year and annual financial

statements.

Vivendi prepares and distributes a summary schedule setting out the

blackout periods during which transactions involving the company’s shares

are prohibited. This schedule also makes clear that the periods indicated do

not preclude the existence of other blackout periods that may apply, due to

awareness of specific market information concerning developments in

Vivendi’s business or prospects which, if made public, would be likely to

have a material impact on the company’s share price.

At its meeting held on January24, 2007, Vivendi’s Management Board

prohibited the use of all hedge transactions on stock options, shares

resulting from the exercise of stock options, performance shares, and the

company’s securities in general, through the hedged purchase or sale of

shares or the use of any other option mechanism.

These prohibitions appear in the rules of the stock option and performance

share plans, and beneficiaries of these plans are reminded of them in

individual grant letters. This prohibition also appears in the internal rules of

the Supervisory Board and Management Board.

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2.6.Trading in company securities

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

2.6.1. TRADING IN SECURITIES BY MEMBERS OF THE SUPERVISORY BOARD AND THE MANAGEMENT BOARD IN 2018

Pursuant to Article223-26 of the General Regulations of the AMF (Autorité des marchés ﬁnanciers), the table below sets out transactions involving the

company’s securities in 2018 up to the date of registration of this Annual Report that were reported to the company and to the AMF:

Name

Awards (1) / Purchases (2) / Restitutions (3) / Other (4)

Date Quantity

Unit price

(in euros)

Compagnie de Cornouaille (Bolloré Group) February2018 (5) 21,355,170 (6) 16.5742

March 2018 (2) 18,015,265 (6) 20.9006

April2018 (2) 38,441,355 (6) 20.9336

June 2018 (2) 7,643,887 (6) 21.1274

October2018 (3) 13,475,000 (6) 0.0000

October2018 (4) 6,993,008 (6) 21.4500

November2018 (4) 8,360,428 (6) 21.5300

December2018 (4) 9,555,662 (6) 20.9300

December2018 (3) 10,000,000 (6) 0.0000

Financière de Larmor (Bolloré Group) August 2018 (2) 11,000,000 (6) 21.5397

September2018 (2) 650,234 (6) 21.5000

October2018 (2) 15,478,143 (6) 21.3497

November2018 (2) 2,162,366 (6) 21.1162

December2018 (2) 7,475,859 (6) 20.9952

January2019 (2) 44,389 20.8000

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2.6.Trading in company securities

COMPENSATIONOFCORPORATEOFFICERSOFVIVENDI

Name

Awards (1) / Purchases (2) /

Restitutions (3) / Other (4)

Exercise of stock

subscription options Sales Subscriptions (Group Savings Plan)

Date Quantity

Unit

price

(in euros) Date Quantity

Unit

price

(in euros) Date Quantity

Unit

price

(in euros) Date Quantity

Unit

price

(in euros)

Michèle Reiser 01/11/2019 (2) 1,000 21.84

Arnaud de

Puyfontaine 02/28/2018 (1) 52,500 na

Gilles Alix 02/22/2018 (2) 200 20.85 07/19/2018 (7) 2,953.4357 9.9800

07/19/2018 (8) 109.3490 19.3270

Cédric de

Bailliencourt

07/19/2018 (7) 3,292.9154 9.9800

07/19/2018 (8) 113.8300 19.3270

Frédéric Crépin 02/28/2018 (1) 37,500 na (9) 04/11/2018 34,922 20.15 04/11/2018 34,922 21.3137 07/19/2018 (7) 6,091.4204 9.9800

(10) 02/15/2019 20,000 16.06 02/15/2019 20,000 24.30 07/19/2018 (8) 113.5210 19.3270

(10) 02/22/2019 14,907 16.06 02/22/2019 14,907 24.20

(11) 02/28/2019 9,922 15.80 02/28/2019 9,922 25.10

(11) 02/28/2019 5,000 15.80 02/28/2019 5,000 25.50

(13) 02/28/2019 1,461 11.76 02/28/2019 1,461 25.50

(14) 03/05/2019 873 13,88 03/05/2019 873 25.55

(12) 03/05/2019 276 17,19 03/05/2019 276 25.55

Simon Gillham 02/28/2018 (1) 18,750 na (13) 06/11/2018 40,799 11.76 07/19/2018 (7) 5,664.3398 9.9800

07/19/2018 (8) 113.7070 19.3270

Hervé Philippe 02/28/2018 (1) 37,500 na 07/19/2018 (7) 2,869.1852 9.9800

07/19/2018 (8) 113.5210 19.3270

Stéphane Roussel 02/28/2018 (1) 37,500 na (9) 04/11/2018 59,842 20.15 04/11/2018 59,842 21.65 07/19/2018 (7) 10,864.5852 9.9800

(10) 02/15/2019 20,000 16.06 02/15/2019 20,000 24.082 07/19/2018 (8) 113.7170 19.3270

(10) 02/15/2019 19,784 16.06 02/15/2019 19,784 24.0754

na: not applicable.

(1) Vesting of performance shares (Plan 02-2015).

(2) Purchased on the market.

(3) Partial and early restitution of securities lent under the loan agreement of October7, 2016 maturing on June 25, 2019 relating to 34,700,000 shares.

(4) Asset-backed drawdowns.

(5) Exercise of 21,355,170 share purchase options giving right to a total of 21,355,170 Vivendi shares acquired as part of an agreement signed on October5, 2016 (AMF

Notice No. 2016DD452487).

(6) Average weighted share price.

(7) Groupe Vivendi Relais 2018 mutual fund units (as part of the capital increase reserved for employees and corporate ofﬁcers of the Vivendi group who are members of

the group’s Savings Plan).

(8) Opus 18 Levier Vivendi units (as part of the capital increase reserved for employees and corporate ofﬁcers of the Vivendi group who are members of the group’s Savings

Plan).

(9) Exercise of stock options (April2008 plan).

(10) Exercise of stock options (April2009 plan).

(11) Exercise of stock options (April2010 plan).

(12) Exercise of stock options (April2011 plan).

(13) Exercise of stock options (April2012 plan).

(14) Exercise of stock options (September2012 plan).

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3.1. Corporate and CommercialName

GENERALINFORMATIONABOUTTHECOMPANY

Section 3

Generalinformationaboutthecompany

3.1. Corporate and CommercialName

Pursuant to Article1 of Vivendi’s by-laws, the corporate name of the company is Vivendi.

The General Shareholders’ Meeting of April15, 2019, will invite shareholders to vote on the change of the company’s legal form to a société européenne

(European Company). Therefore, subject to approval at the above-mentioned meeting, effective upon completion of the Company’s conversion into a European

Company, its corporate name shall be followed by the words “Société Européenne” or the initials “SE”.

3.2. Place of Registration and Registration Number

The company is registered with the Paris Trade and Companies Registry under reference number343 134 763. Its Siret numberis 343 134 763 00048 and its

APE code is 6420Z.

3.3. Date of Incorporation andTerm

As set forth in Article1 of Vivendi’s by-laws, the company’s term is 99 years beginning on December18, 1987. The company’s term will therefore expire on

December17, 2086, except in the event of extension or early dissolution.

3.4. Registered Ofﬁce, Legal Form and Laws Applicable

toVivendi’sBusiness

Pursuant to Article3 of Vivendi’s by-laws, the company’s registered and head ofﬁce is located at 42, avenue de Friedland, 75380 Paris Cedex 08, France.

The company does not have any branches in France or abroad.

Pursuant to Article1 of Vivendi’s by-laws, Vivendi is a French limited liability company (société anonyme) with a Management Board (Directoire) and a

Supervisory Board (Conseil de surveillance). The company is governed by French legislative and regulatory provisions relating to corporations and in particular

the provisions of the French Commercial Code (Code de commerce).

The General Shareholders’ Meeting of April15, 2019 will invite shareholders to vote on the change of the company’s legal form from a société anonyme to a

société européenne (European Company).

Subject to approval at the above-mentioned meeting, Vivendi will become a European Company with a Management Board (Directoire) and a Supervisory

Board (Conseil de surveillance) governed by the provisions of (i) European Council Regulation (EC) 2157/2001 of October8,2001 on the statute for a European

company (SE), (ii) European Council Directive 2001/86/EC of October8, 2001, (iii) the French Commercial Code (Code de commerce), including provisions

relating to companies in general and European Companies in particular and (iv) the company’s by-laws.

3.5. Fiscal Year

Pursuant to Article18 of Vivendi’s by-laws, the company’s ﬁscal year begins on January1

and ends on December31

of each year.

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3.7. Memorandum and by-laws

GENERALINFORMATIONABOUTTHECOMPANY

3.6. Access to Legal Documents and Regulated Information

Legal documents relating to the issuer are available for review at the company’s registered ofﬁce. Periodic and ongoing regulated information may be found

on the company’s website (www.vivendi.com) under “Regulated Information”.

3.7. Memorandum and by-laws

3.7.1. CORPORATE PURPOSE

Pursuant to Article2 of Vivendi’s by-laws, the company’s main corporate

purpose, directly and indirectly, both in France and internationally, is: to

provide communication, telecommunication, and interactive services

(directly or indirectly) to individuals, businesses or public sector customers;

to market products and services related to the foregoing; to engage

(whether directly or indirectly), in commercial, industrial, ﬁnancial, securities

and real estate transactions, which (i) are related (directly or indirectly) to

the aforementioned purpose or to any other similar or related purpose, or (ii)

contribute to the achievement of such purpose; and more generally the

management and acquisition, either by subscription, purchase, contribution,

exchange or through any other means, of shares, bonds and any other

securities of companies already existing or yet to be formed, including the

possibility of selling such securities.

3.7.2. RIGHTS, PREFERENCES AND RESTRICTIONS

ATTACHED TO THE COMPANY’S SHARES AND TO

EACH CLASS OF EXISTING SHARES, IF APPLICABLE

Pursuant to Articles 4 and 5 of Vivendi’s by-laws, the shares are all of the

same class and may be held in either registered or bearer form, unless

provided otherwise by law.

Pursuant to Article6 of Vivendi’s by-laws, each share carries a right of

ownership to the company’s assets and liquidation surplus, in a proportion

equal to the portion of the share capital it represents. Whenever a certain

numberof shares is necessary to exercise a right, shareholders who do not

own said numberof shares shall be responsible, if necessary, for grouping

the shares corresponding to the required quantity. Subscription rights

attached to shares belong to the holder of the usufruct rights (usufruitier).

3.7.3. ACTIONS NECESSARY TO CHANGE

THERIGHTSOFSHAREHOLDERS

Regarding rights attached to the company’s shares and changes to the

company’s share capital, Vivendi’s by-laws do not contain any provisions

that are more restrictive than those required by law.

3.7.4. SHAREHOLDERS’ MEETINGS

Pursuant to Article16 of Vivendi’s by-laws, Shareholders’ Meetings are

convened and held in accordance with applicable law.

Shareholders’ Meetings are held at the company’s registered ofﬁce or at

any other place indicated in the meeting notice. When convening such a

meeting, the Management Board may decide to publicly broadcast the

Shareholders’ Meeting in full via videoconference or by another form of

remote transmission. If applicable, this decision shall be published in the

meeting notice and convening notice.

The Works Council may also appoint two of its members to attend

Shareholders’ Meetings. The Chairman of the Management Board, or any

other authorized person, will notify the Works Council, by any means, of the

date and location of any Shareholders’ Meeting which has been convened.

Each shareholder, without regard to the numberof shares held, is entitled,

upon proof of his or her identity and standing as a shareholder, to

participate in the Shareholders’ Meetings, subject to: (i) the recording of his

or her shares on or before midnight (Paris time) on the second business

daypreceding the Shareholders’ Meeting (the “Record Date”), whereby:

3 registered shareholders are recorded under their name in the

nominative share register on ﬁle with the company; or

3 bearer shareholders are recorded under the name of their ﬁnancial

intermediary acting as holder of record, in the bearer share register

on ﬁle with the authorized intermediary;

and (ii) if necessary, the provision of all relevant documents to the company

to prove his or her identity as a shareholder in accordance with applicable law.

The registration or recording of shares in the bearer share account held by

the authorized intermediary is authenticated by a shareholding certiﬁcate

(attestation de participation) delivered by said intermediary in accordance

with applicable laws and regulations.

Pursuant to Article17 of Vivendi’s by-laws, voting rights attached to shares

belong to usufruct holders (usufruitiers) in Ordinary Shareholders’ Meetings

and to legal owners of title (nu-propriétaires) in Extraordinary or Special

Shareholders’ Meetings, unless otherwise agreed by both parties and

provided that the company is notiﬁed of such agreement by said parties.

Subject to applicable laws and regulations, shareholders may send their

proxy and voting forms by mail, either in paper form or, where approved by

the Management Board and published in the meeting notice and the

convening notice, by remote transmission. Proxy or voting forms sent by

mail must be received by the company by 3:00 p.m. (Paris time) on the day

prior to the Shareholders’ Meeting.

The proxy or voting form may, if necessary, contain the shareholder’s

electronic signature, authenticated by a reliable and secure process,

enabling identiﬁcation of the shareholder as well as authentication of his or

her vote.

Shareholders’ Meetings are chaired by the Chairman of the Supervisory

Board.

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3.7. Memorandum and by-laws

GENERALINFORMATIONABOUTTHECOMPANY

Pursuant to French law, a double voting right is automatically granted to

each share that has been held continuously in registered form in the name

of the same shareholder for more than two years.

3.7.5. DETERMINATION, ALLOCATION

ANDDISTRIBUTIONOF EARNINGS

Pursuant to Article19 of its by-laws, Vivendi’s statement of earnings

summarizes the difference between its income and charges for the ﬁscal

year, less amortization, depreciation and any provisions, and the resulting

income.

Where applicable, at least 5% of the group’s ﬁscal year’s earnings, less any

deferred losses, are withheld for allocation to statutory reserves. This

ceases to be mandatory when the statutory reserves reach an amount equal

to 10% of the share capital, and enters into effect again, if, for any reason,

the same statutory reserves fall below this percentage.

The Shareholders’ Meeting may set aside such sums as the Management

Board deems appropriate for transfer to contingency funds, ordinary or

extraordinary reserves, retained earnings, or for distribution.

In accordance with applicable law and Vivendi’s by-laws, distributable

earnings are equal to earnings for the ﬁscal year, less losses carried forward

and allocations to reserves, plus earnings carried forward from previous

ﬁscal years.

Dividends are ﬁrst paid out of current earnings.

Except in the event of a reduction in share capital, dividends shall not be

distributed to shareholders when said capital is, or would subsequently

become, less than the amount of the share capital plus the amount of

reserves that may not be distributed under applicable law or Vivendi’s

by-laws.

Revaluation surpluses may not be distributed, but may be wholly or partially

capitalized.

The Shareholders’ Meeting may resolve to distribute funds deducted from

available reserves by speciﬁcally identifying the reserve line items from

which said deductions are to be made.

The manner in which dividends will be paid is determined by Vivendi’s

General Shareholders’ Meeting or, failing that, by the Management Board.

Dividends must be paid no later than nine months after the end of the ﬁscal

year, unless extended by court order.

The Shareholders’ Meeting has the right to grant each shareholder the

option to receive all or part of the annual dividend or interim dividend

distributed in the form of cash, shares, or payment in kind.

Dividends which remain unclaimed ﬁve years after the date of payment are

no longer distributable.

3.7.6. PROVISIONS HAVING THE EFFECT

OFDELAYING,DEFERRING

ORPREVENTINGACHANGE INCONTROL

Vivendi’s by-laws do not contain any provisions that would have the effect

of delaying, deferring or preventing a change in control of the company.

3.7.7. PROVISIONS GOVERNING THE THRESHOLD

ABOVEWHICH SHAREHOLDER OWNERSHIP

MUSTBE DISCLOSED

Pursuant to Article5 of Vivendi’s by-laws, the company may, at any time and

in accordance with applicable laws and regulations, request that the

relevant central depository for financial instruments provide it with

information in relation to any of the company’s securities that confer a right

to vote (either immediately or in the future) at Shareholders’ Meetings.

Any personal data or information obtained are used solely for the purpose

of identifying the owners of bearer shares and analyzing Vivendi’s share

ownership structure on any given date. In accordance with the provisions of

the French Law No.78-17 of January6,1978, owners of securities have the

right to access, amend and delete any personal information about

themselves. To do so, a request must be submitted to Vivendi’s legal

department or to the following e-mail address: [email protected].

Failure by shareholders or their intermediaries to disclose such information

may, under the conditions determined by law, lead to the suspension or

forfeiture of dividends or voting rights attached to such shares.

Any person, acting alone or in concert, who becomes the holder (directly or

indirectly) of a fraction of the share capital, voting rights or securities giving

rights to the share capital of the company which are equivalent to, or in

excess of, 0.5%, or a multiple thereof, shall send a notice to the company

by registered letter with acknowledgment of receipt. This must be done

within 15 calendar days of crossing any of these thresholds. This notice

shall specify the aggregate numberof shares, voting rights or securities

giving future rights to the share capital of the company that said person

holds, whether directly or indirectly, alone or in concert.

Any person who fails to comply with this notiﬁcation requirement is, upon

request by one or more shareholders holding at least 0.5% of the company’s

share capital, subject to penalties in accordance with applicable law.

Any person, acting alone or in concert, is also required to inform the

company within 15 calendar days if the percentage of share capital or

voting rights that such person holds falls below any of the above-mentioned

thresholds.

3.7.8. PROVISIONS GOVERNING CHANGES IN SHARE

CAPITAL WHERE SUCH CONDITIONS ARE MORE

STRINGENT THAN REQUIRED BY LAW

None.

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3.8. Share Capital

GENERALINFORMATIONABOUTTHECOMPANY

3.8. Share Capital

3.8.1. AMOUNT OF ISSUED SHARE CAPITAL

As of December31, 2018, the company’s share capital amounted to €7,184,288,078.00, divided into 1,306,234,196 shares with a par value of €5.50 each. The

numberof gross voting rights totaled 1,387,889,074.

All shares may be held in registered or bearer form and are transferable. The shares are traded on Euronext Paris (Compartment A) (ISIN code:

FR0000127771). LEI n° 969500FU4DRAEVJW7U54.

3.8.2. SHARES NOT REPRESENTING CAPITAL

None.

3.8.3. AUTHORIZED BUT NON-ISSUED SHARE CAPITAL

Details of the delegations of authority and authorizations approved by the General Shareholders’ Meetings of April25, 2017 and April19, 2018, and

submitted for approval by the General Shareholders’ Meeting of April15, 2019 are shown below.

ISSUES OF SECURITIES WITH PREFERENTIAL SUBSCRIPTION RIGHTS

Transactions

Source

Resolution

number

Duration of the

authorization

(expiry date)

Maximum nominal

amount of share

capital increase

Capital increase (ordinary shares and marketable securities

giving right to the share capital)

30 – 2019

21 – 2017

26 months (June2021)

26months (June2019)

(a) 750million, i.e. ≈ 10.44% of the share capital

(a) 750million, i.e. ≈ 10.60% of the share capital

Capital increase by incorporation of reserves

31 – 2019

22 – 2017

26 months (June2021)

26months (June2019)

375million, i.e. ≈ 5.22% of the share capital

375million, i.e. ≈ 5.25% of the share capital

ISSUES OF SECURITIES WITHOUT PREFERENTIAL SUBSCRIPTION RIGHTS

Transactions

Source

Resolution

number

Duration of the

authorization

(expiry date)

Maximum nominal

amount of share

capital increase

Contributions in kind to the company 26 – 2018 26months (June2020) (b) 5% of the share capital

ISSUES RESERVED FOR EMPLOYEES OF VIVENDI

Transactions

Source

Resolution

number

Duration of the

authorization

(expiry date) Main Terms

Share capital increase reserved for employees that are

members of the Employee Stock Purchase Plan (ESPP)

32 – 2019

(c)28 – 2018

26months (June2021)

26months (June2020)

(b) Maximum of 1% of the share capital on

the Management Board’s decision date

33 – 2019

(d)29 – 2018

18months (Oct.2020)

18months (Oct.2019)

Grant of existing or future performance shares (e)27 – 2018 38 months (June2021) Maximum of 1% of the share capital on the grant date

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3.8. Share Capital

GENERALINFORMATIONABOUTTHECOMPANY

SHARE REPURCHASES

Transactions

Source

Resolution

number

Duration of the

authorization

(expiry date) Main Terms

Share repurchase program

(f) 27 – 2019 18months (Oct.2020) 10% of the share capital

Maximum purchase price per share: 25euros

(130.6million shares)

5% of the share capital

Maximum purchase price per share: 24euros

(64.8million shares)

(g) 24 – 2018 18months (Oct.2019)

Public share buyback offer (OPRA) 29 – 2019 12months (April2020) 25% of the share capital

Maximum purchase price per share: 25euros

(326.6million shares)

Share cancellations/Share repurchase program

Share cancellations/OPRA

28 – 2019

(g) 25 – 2018

(f) 29 – 2019

18months (Oct.2020)

18months (Oct.2019)

12 months

10% of the share capital over a 24-month period

25% of the share capital

(a) Aggregate maximum amount for capital increases, all transactions included.

(b) This amount is applied to the maximum aggregate amount of €750million, set in the 30

resolution of the 2019 General Shareholders’ Meeting.

(d) Used for 0.34% of the share capital in July2018.

(e) Used for 0.12% of the share capital in May 2018 and for 0.13% of the share capital in February2019.

(f) The number of shares repurchased for cancellation under the 27

resolution, if any, shall be deducted from the maximum amount set in the 29

resolution.

(g) Not used.

3.8.4. SHARES HELD BY THE COMPANY

3.8.4.1. Summary of the Previous Share Repurchase Program (2017/2018)

The Combined General Shareholders’ Meeting of April25, 2017, pursuant to Resolution 19, authorized the Management Board to implement a share

repurchase program for 10% of the share capital at a maximum price per share of €20.

The Management Board did not use this authorization.

Aggregate Numberof Purchases and Sales/Transfers of Shares from April25, 2017 to April19, 2018

(other than Shares Purchased under the Liquidity Agreement)

Numberof shares held as of April25, 2017: 39,419,670 (of which 12,730 to cover performance share plans and 39,406,940 for external growth transactions).

Numberof shares

Value/share price/

Average price

per share (in euros)

Total value

(in euros)

Period from April25, 2017 to December31, 2017 (a)

Purchase - - -

Sale/Transfer (12,018) 18.04 (216,816)

Period from January1, 2018 to April19, 2018(b)

Purchase - - -

Sale/Transfer (*)(760,781) 18.25 (13,883,960)

(*) Transfer to beneﬁciaries of performance share plans, after the reallocation of 4,313,431 treasury shares to cover performance share plans approved by the Management

Board at its meeting of December18, 2017.

(a) As of December31, 2017, Vivendi directly held 39,407,652 treasury shares with a nominal value of €5.50 per share, i.e., 3.04% of its share capital, allocated to covering

free performance share plans (4,314,143 shares) and for external growth transactions (35,093,509 shares).

(b) As of April19, 2018, Vivendi directly held 38,646,871 treasury shares with a nominal value of €5.50 per share, i.e., 2.94% of its share capital, allocated to covering free

performance share plans (3,555,362 shares) and for external growth transactions (35,093,509 shares).

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3.8. Share Capital

GENERALINFORMATIONABOUTTHECOMPANY

3.8.4.2. Current Share Repurchase Program (2018-2019)

The Combined General Shareholders’ Meeting of April19, 2018, pursuant to Resolution 24, authorized the Management Board to implement a share

repurchase program for 5% of the share capital at a maximum price per share of €24.

The Management Board did not use this authorization.

Aggregate Numberof Purchases and Sales/Transfers of Shares from April19, 2018 to February28, 2019

(other than Shares Purchased under the Liquidity Agreement)

Numberof shares held as of April19, 2018: 38,646,871.

Numberof shares

Value/share price/

Average price

per share (in euros)

Total value

(in euros)

Period from April19, 2018 to December31, 2018

Purchase - - -

Sale/Transfer (*) (383,685) 18.40 (7,059,190)

Period from January1, 2019 to February28, 2019

Purchase - - -

Sale/Transfer (*) (52,731) 18.40 (970,166)

(*) Transfer to certain beneﬁciaries of free performance share plans.

3.8.4.3. Cancellation of Shares by Reduction of Share

Capital during the last 24 months

None.

3.8.4.4. Treasury Shares (Other than Shares Held

Pursuant to the Liquidity Agreement)

Position as of December31, 2018

As of December31, 2018, Vivendi directly held 38,263,186 of its own shares

with a nominal value of €5.50 each, representing 2.93% of the share

capital, including 3,169,677 shares allocated to performance share plans

and 35,093,509 shares held for external growth transactions.

As of December31, 2018, the book value of the portfolio totaled

€646.9million, representing a market value of €812.7million as of that date.

Position as of February28, 2019

As of February28, 2019, Vivendi held 38,210,455 of its own shares

representing 2.93% of its share capital, including 35,093,509 shares held

for external growth transactions, and 3,116,946 shares allocated to covering

free performance share plans.

3.8.4.5. Liquidity Agreement

Since January3, 2005, Vivendi has been party to a liquidity agreement that

complies with the AMAFI’s Code of Ethics. The term of this agreement is

one year, renewable tacitly for equal periods.

The liquidity agreement has been suspended since 2016.

3.8.4.6. Treasury Shares held by the Group

As of December31, 2018, Vivendi’s subsidiaries held 465 shares of the

company.

3.8.4.7. Open Positions on Derivative Financial

Instruments as of December31, 2018

None.

3.8.5. CONVERTIBLE SECURITIES, EXCHANGEABLE

SECURITIES OR WARRANT SECURITIES

3.8.5.1. Bonds Convertible into New Shares and/or

Exchangeable for Existing Shares (OCEANE)

No OCEANEs are outstanding.

3.8.5.2. Bonds Mandatorily Redeemable in Shares

(ORA)

No ORAs are outstanding.

3.8.5.3. Warrants (BSA)

No BSAs are outstanding.

3.8.6. STOCK PURCHASE OR SUBSCRIPTION

PLANS(STOCK-OPTIONS)

Since 2013, Vivendi has not granted any stock options.

3.8.7. PERFORMANCE SHARE GRANTS

Grants of performance shares are subject to the achievement of internal

ﬁnancial targets (with a weighting of 70%) and the performance of Vivendi

shares against two trading indices (with a weighting of 30%) (see

Section2.1.2.2 of this chapter).

In 2018, 141,320 shares were deﬁnitively granted to American and Brazilian

beneﬁciaries under the 2014 plans and 629,586 shares were deﬁnitively

granted to beneﬁciaries under the 2015 plans. 373,560 Vivendi shares were

delivered to beneficiaries of Havas plans who did not sign a liquidity

undertaking following the simplified tender offer made by Vivendi in

September2017.

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GENERALINFORMATIONABOUTTHECOMPANY

3.8.8. ACQUISITION RIGHTS OR OBLIGATIONS IN RESPECT OF AUTHORIZED BUT NON-ISSUED CAPITAL

None.

3.8.9. OPTIONS OR CONDITIONAL OR UNCONDITIONAL AGREEMENTS OVER A GROUP MEMBER

None.

3.8.10. CHANGES IN SHARE CAPITAL OVER THE LAST FIVE YEARS

Transactions

Amount Share capital amounts

Date

Nominal value

(in euros)

Premium (*)

(in euros)

Numberof

issued shares In shares In euros

Share capital as of December31, 2013 1,339,609,931 7,367,854,620.50

Stock option exercise 05/12/2014 5.50 11.89 5,101,160 1,344,711,091 7,395,911,000.50

Stock option exercise 06/16/2014 5.50 11.97 3,082,646 1,347,793,737 7,412,865,553.50

AGA 50 Plan 07/17/2014 5.50 - 727,118 1,348,520,855 7,416,864,702.50

Stock option exercise 01/13/2015 5.50 11.78 3,079,783 1,351,600,638 7,433,803,509.00

Performance share plans 2013-02 03/03/2015 5.50 - 1,481,884 1,353,082,522 7,441,953,871.00

Stock option exercise 04/16/2015 5.50 13.03 9,214,291 1,362,296,813 7,492,632,471.50

Performance share plan 2011-04 04/16/2015 5.50 - 270,925 1,362,567,738 7,494,122,559.00

Performance share plan 2011-04-03 04/22/2015 5.50 - 77,514 1,362,645,252 7,494,548,886.00

Stock option exercise 06/22/2015 5.50 12.57 1,115,534 1,363,760,786 7,500,684,323.00

2015 Employee stock purchase plan 07/16/2015 5.50 13.707 3,914,166 1,367,674,952 7,522,212,236.00

Performance share plan 2013-10 10/22/2015 5.50 - 39,577 1,367,714,529 7,522,429,909.50

Performance share plan 2013-12-1 12/14/2015 5.50 - 56,109 1,367,770,638 7,522,738,509.00

Stock option exercise 01/11/2016 5.50 9.60 551,932 1,368,322,570 7,525,774,135.00

Performance share plans 2014-02-1 and 2 02/22/2016 5.50 - 96,137 1,368,418,707 7,526,302,888.50

Stock option exercise 04/11/2016 5.50 10.06 202,135 1,368,620,842 7,527,414,631.00

Cancellation of treasury shares by way of capital reduction 06/17/2016 5.50 - 86,874,701 1,281,746,141 7,049,603,775.50

2016 Employee stock purchase plan 07/28/2016 5.50 9.076 4,869,781 1,286,615,922 7,076,387,571.00

Stock option exercise 01/09/2017 5.50 7.56 471,922 1,287,087,844 7,078,983,142.00

Stock option exercise 04/18/2017 5.50 6.97 220,974 1,287,308,818 7,080,198,499.00

2017 Employee stock purchase plan 07/25/2017 5.50 10.749 4,160,092 1,291,468,910 7,103,079,005.00

Stock option exercise 10/16/2017 5.50 11.43 2,946,981 1,294,415,891 7,119,287,400.50

Stock option exercise 01/15/2018 5.50 13.34 1,642,992 1,296,058,883 7,128,323,856.50

Stock option exercise 04/16/2018 5.50 13.53 3,985,826 1,300,044,709 7,150,245,899.50

2018 Employee stock purchase plan 07/19/2018 5.50 13.827 5,185,878 1,305,230,587 7,178,768,228.50

Stock option exercise 12/31/2018 5.50 10.08 1,003,609 1,306,234,196 7,184,288,078.00

(*) Weighted average premium in euros.

As of December31, 2018, the potential share capital of the company totaled €7,224,135,451.50, divided into 1,313,479,173 shares after taking into account

7,244,977 stock options, which may give rise to the issuance of 7,244,977 shares.

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GENERALINFORMATIONABOUTTHECOMPANY

3.8.11. MARKET INFORMATION

3.8.11.1. Places of Listing – Stock Exchange Price

Source: Euronext Paris.

STOCK EXCHANGE PRICE FOR VIVENDI ORDINARY SHARES – EURONEXT PARIS

Compartment A (code FR0000127771)

(in euros) Average price High Low

Numberof

shares traded

Transaction

amounts

2017

January 17.8148 18.3800 16.9400 73,600,229 1,308,266,113

February 16.9395 17.4550 15.9600 72,386,174 1,218,917,397

March 17.1254 18.2500 16.3300 88,403,509 1,512,739,023

April 18.1047 19.2350 17.3550 77,498,800 1,408,879,260

May 18.9393 19.6800 17.8950 100,909,082 1,907,645,934

June 20.1302 20.8200 19.2850 97,650,866 1,968,328,857

July 19.7455 20.2800 19.2500 68,230,124 1,346,857,797

August 19.3524 20.3700 18.3950 77,938,181 1,506,179,943

September 20.6740 21.4200 19.8200 78,615,487 1,626,846,792

October 21.0855 21.6200 20.3550 60,456,999 1,272,539,146

November 22.0657 23.4950 20.5600 86,429,542 1,912,949,153

December 22.4861 23.2700 21.7950 66,036,366 1,475,744,398

2018

January 23.6227 24.8700 22.2400 90,844,949 2,149,880,207

February 21.6260 23.5600 20.2600 97,135,806 2,094,050,396

March 21.1243 22.0700 20.3000 99,353,034 2,097,429,567

April 21.2315 21.8900 20.7100 122,765,738 2,594,247,971

May 22.8136 23.5500 20.9800 84,947,180 1,926,993,111

June 21.5048 22.0900 21.0000 75,386,730 1,622,978,038

July 21.0205 22.6700 20.4000 79,429,281 1,675,016,995

August 22.0091 22.6800 21.2300 77,755,855 1,705,810,281

September 21.9830 22.6200 21.5000 71,646,438 1,575,407,852

October 21.6483 22.4100 20.9000 85,014,218 1,835,545,823

November 21.5573 22.4600 20.9400 69,901,654 1,510,498,946

December 21.3032 22.6500 20.8100 66,910,285 1,426,953,214

2019

January 21.7109 22.5000 20.8000 55,796,525 1,212,612,080

February 23.4005 25.9000 22.1500 73,210,184 1,731,593,518

3.8.11.2. Financial securities intermediary

BNP Paribas Securities Services

GCT – Service Émetteurs

Les Grands Moulins de Pantin

9, rue du Débarcadère

93761 Pantin Cedex

3.8.12. AMERICAN DEPOSITARY RECEIPT (ADR) PROGRAM

Vivendi does not sponsor any American Depositary Receipt (ADR) program for its shares. Any ADR program currently in existence is “unsponsored” and is not

linked in any way to Vivendi. Vivendi denies any responsibility or liability in relation to any such program.

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3.9. Major Shareholders

GENERALINFORMATIONABOUTTHECOMPANY

3.9. Major Shareholders

3.9.1. SHARE OWNERSHIP AND VOTING RIGHTS

As of December31, 2018, the company’s share capital amounted to €7,184,288,078, divided into 1,306,234,196 shares, and the numberof gross voting rights (1)

totaled 1,387,889,074 and the numberof net voting rights (2) totaled 1,349,625,423 taking into consideration the numberof treasury shares held on that date.

As of December31, 2018, to the Management Board’s knowledge, the major shareholders who held shares in registered form or had sent a notice of crossing

of a statutory threshold to the company were as follows:

Groups % of capital

% of voting

rights (gross)

Number

of shares

Numberof voting

rights (gross)

Bolloré Group (3) 26.28 28.51 (*) 343,224,948 (*) 395,657,787

Société Générale 4.64 4.36 60,553,851 60,553,851

BlackRock Inc. 3.68 3.44 48,068,734 47,762,900

CDC-BPI/DFE 2.96 2.85 38,726,199 39,575,649

PEG Vivendi 2.44 3.50 31,840,875 48,627,787

DNCA Finance 0.59 1.03 7,726,518 14,326,518

Treasury shares 2.93 2.76 38,263,651 38,263,651

Other shareholders 56.49 53.54 737,829,420 743,120,931

Total 100.00 100.00 1,306,234,196 1,387,889,074

(*) Including 11,225,000 Vivendi shares temporarily held by Compagnie de Cornouaille pursuant to a temporary share sale agreement (initially in respect

of 34,700,000 Vivendi shares for its beneﬁt), which may be returned, in whole or in part, at any time until June 25, 2019, and 13,344,830 Vivendi shares as a result of

off-market acquisition of physically-settled call options that are exercisable at any time until June 25, 2019 and classiﬁed as assimilated shares by Compagnie

de Cornouaille pursuant to Article L.233- 9 I, 4° of the French Commercial Code (Code de commerce).

(1) After taking into account the numberof shares with double voting rights and the numberof treasury shares held on these dates.

(2) Total numberof voting rights attached to the total numberof shares less shares deprived of voting rights.

(3) Upon crossing the 25% threshold of Vivendi’s voting rights on June25, 2018, and in accordance with ArticleL. 233-7, paragraph VII of the French Commercial Code and

Article223-17 of the General Regulation (Règlement général) of the French Financial Markets Authority (AMF), Mr.Vincent Bolloré, (both for himself and on behalf of

Compagnie de Cornouaille, of which he controls and is legally deemed to be acting in concert), made the following statement of intent in respect to Vivendi for the next

six months:

Compagnie de Cornouaille acquired 1,044,622 additional shares on June25, 2018, which were ﬁnanced in cash;

– the declarant has not entered into any agreement establishing a concerted action with respect to Vivendi;

– the declarant contemplates continuing to purchase Vivendi shares depending primarily on market opportunities;

– the declarant, who has complied with the single model of control under IFRS10 since April26, 2017, but not those laid down in ArticleL. 233-3 of the French

Commercial Code, wishes to continue increasing his control;

– the investment in Vivendi reﬂects Bolloré Group’ conﬁdence in Vivendi’s capacity to develop and its willingness to support Vivendi in its strategy;

– the declarant does not plan to carry out any of the transactions set out in Article233-17, paragraph 1, subparagraph 6 of the General Regulation (Règlement général)

of the French Financial Markets Authority (AMF), subject to the planned transactions concerning Universal Group (UMG) recently discussed by Vivendi;

– the declarant holds 13,344,830 call options that enable it to acquire 13,344,830 Vivendi shares, at any time until June25, 2019, and plans to exercise them

depending, in particular, on market conditions;

– as borrower, the declarant is party to a temporary sale agreement in respect of 34,700,000 Vivendi shares carrying an equal amount of voting rights; the declarant is

not a party to any other temporary sale agreement; and

– the declarant plans to request additional supervisory directorships on the company’s Supervisory Board.

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3.9. Major Shareholders

GENERALINFORMATIONABOUTTHECOMPANY

3.9.2. PLEDGE OF COMPANY SHARES HELD IN REGISTERED FORM

As of December31, 2018, 148,547,130 shares held in registered form were pledged, representing 11.38% of the share capital of the company as of that date.

3.9.3. CONTROL OF THE COMPANY – SHAREHOLDERS’ AGREEMENTS

As of December31, 2018, to the company’s knowledge, no shareholder other than those listed in the table on the previous page held 5% or more of the

company’s share capital or voting rights, and there were no Shareholders’ agreements, whether publicly disclosed or not, which related to Vivendi’s

securities.

3.9.4. NOTICES MADE IN RELATION TO THE CROSSING OF STATUTORY THRESHOLDS

In 2018, the company received several notices in relation to the crossing of statutory thresholds from the Bolloré Group (upwards) and from BlackRock, Inc.

(upwards and downwards) and from Société Générale.

3.9.5. CHANGES IN SHARE OWNERSHIP OVER THE LAST THREE YEARS (AS OF DECEMBER31)

2018 2017 2016

Number

of shares

% of

capital

voting

rights

(gross)

Number

of shares

% of

capital

voting

rights

(gross)

Number

of shares

% of

capital

voting

rights

(gross)

Bolloré Group 343,224,948 26.28 28.51 265,832,839 20.51 29.56 265,832,839 20.65 24.70

Société Générale 60,553,851 4.64 4.37 62,039,274 4.79 4.10

BlackRock, Inc. 48,068,734 3.68 3.44 63,977,450 4.94 4.23 59,279,286 4.61 4.37

CDC-BPI/DFE 38,726,199 2.96 2.85 38,726,199 2.99 2.62 38,726,199 3.01 2.92

Vivendi employees 31,840,875 2.44 3.50 35,703,280 2.75 3.65 42,061,381 3.27 4.65

DNCA Finance 7,726,518 0.59 1.03 12,781,345 0.99 1.50

Treasury shares 38,263,651 2.93 2.76 39,408,117 3.04 2.60 27,614,332 2.15 2.15

Other shareholders 736,825,811 56.49 53.54 777,590,379 59.99 51.74 833,573,807 66.31 61.21

Total 1,306,234,196 100.00 100.00 1,296,058,883 100 100 1,287,087,844 100 100

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Appendix: Stock Subscription Option Plans

andPerformanceSharePlans

Appendix: Stock Subscription Option Plans

andPerformanceSharePlans

Details of Stock Subscription Option Plans and Performance Share Plans

Stock subscription option plans (in euros)

Date of the

General

Shareholders’

Meeting

Date of the

Supervisory

Board’s or the

Management

Board’s

Meeting Grant date

Numberof options granted

Vesting date

for options

Expiration

date

Adjusted

exercise

price

Numberof options

Total number

of which, numbergranted to

members of governing and

managing bodies

exercised in

2018 (*)

canceled

in 2018 (*)

outstanding

asof Dec.31,

2018 (*)

beneﬁciaries of options

Numberof

beneﬁciaries

Numberof

options

04/28/2005 02/26/2008 04/16/2008 646 4,839,200 3 304,000 04/17/2011 04/16/2018 20.15 2,405,564 967,498 0

04/28/2005 02/28/2008 04/16/2008 7 732,000 7 732,000 04/17/2011 04/16/2018 20.15 139,682 0

04/24/2008 02/26/2009 04/16/2009 6 1,240,000 6 1,240,000 04/17/2012 04/16/2019 16.06 269,619 149,236

04/24/2008 02/24/2009 04/16/2009 707 5,321,120 4 368,000 04/17/2012 04/16/2019 16.06 777,478 2,108,123

04/24/2008 10/23/2009 10/23/2009 12 40,000 0 0 10/24/2012 10/23/2019 16.60 8,735 27,944

04/24/2008 02/25/2010 04/15/2010 5 1,148,000 5 1,148,000 04/16/2013 04/15/2020 15.80 449,090 279,435

04/24/2008 02/24/2010 04/15/2010 775 4,149,200 4 368,000 04/16/2013 04/15/2020 15.80 145,799 2,288,143

04/24/2008 04/28/2010 06/04/2010 11 40,000 0 0 06/05/2013 06/04/2020 16.99 20,303 13,928

04/24/2008 09/21/2010 09/21/2010 1 5,000 0 0 09/22/2013 09/21/2020 16.34 5,800

04/24/2008 02/28/2011 04/13/2011 5 717,500 5 717,500 04/14/2014 04/13/2021 17.19 326,807 162,316

04/24/2008 02/22/2011 04/13/2011 556 1,809,200 5 270,000 04/14/2014 04/13/2021 17.19 83,203 1,151,752

04/21/2011 08/30/2011 08/30/2011 3 36,600 0 0 08/31/2014 08/30/2021 17.19 466 0

04/21/2011 10/25/2011 10/25/2011 2 2,000 0 0 10/26/2014 10/25/2021 17.19 1,162

04/21/2011 02/29/2012 04/17/2012 5 633,625 5 633,625 04/18/2015 04/17/2022 11.76 218,013 86,697

04/21/2011 02/28/2012 04/17/2012 544 1,880,259 5 270,000 04/18/2015 04/17/2022 11.76 144,676 919,501

04/21/2011 07/16/2012 07/16/2012 1 1,600 0 0 07/17/2015 07/16/2022 12.80 1,580

04/21/2011 09/27/2012 09/27/2012 4 135,000 4 135,000 09/28/2015 09/27/2022 13.88 49,360

Total 4,989,435 967,498 7,244,977

(*) Adjustment following payment in 2010 of the dividend for ﬁscal year 2009 by withholding from reserves, the grant of one new share for 30 old shares in 2012, the

payment in 2013 of the dividend for ﬁscal year 2012 by withholding from reserves, and the ordinary distribution of €1per share in 2014 from additional paid-in capital.

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GENERALINFORMATIONABOUTTHECOMPANY

Appendix: Stock Subscription Option Plans

andPerformanceSharePlans

Performance share plans

Date of the

General

Shareholders’

Meeting

Date of the

Supervisory

Board’s or the

Management

Board’s

Meeting Grant date

Numberof rights to performance shares

Vesting

date(*)

Date of

availability

ofshares

Numberof rights to performance shares

Total number

of which, numbergranted to

members of governing and

managing bodies

Number

ofrights

canceled in

2018

Numberof

acquired

shares at the

end of the

vesting period

in 2018

Number of rights

outstanding

as of

December31,

2018, after

adjustments

beneﬁciaries

performance

Numberof

beneﬁciaries

Numberof

rights to

performance

04/21/2011 01/29/2014 01/29/2014 1 100,000 0 0 01/01/2017 01/31/2018 79,097 0

04/21/2011 01/29/2014 01/29/2014 1 50,000 0 0 01/02/2019 01/03/2019 (a) 52,731

04/21/2011 01/29/2014 01/29/2014 1 100,000 0 0 01/30/2016 01/31/2018 62,223 0

06/24/2014 02/27/2015 02/27/2015 3 170,000 3 170,000 02/28/2018 03/02/2020 42,500 127,500 0

06/24/2014 02/11/2015 02/27/2015 245 857,680 2 75,000 02/28/2018 03/02/2020 158,349 491,961 0

06/24/2014 02/11/2015 02/27/2015 86 319,040 0 0 02/28/2018 03/02/2020 11,860 (b) 266,180

06/24/2014 02/11/2015 02/27/2015 2 102,080 0 0 02/28/2018 03/02/2020 25,000 (b) 75,000

06/24/2014 05/05/2015 05/05/2015 1 100,000 0 0 05/06/2018 05/07/2020 25,000 (b) 75,000

06/24/2014 07/06/2015 07/06/2015 9 12,000 0 0 07/09/2018 07/10/2020 2,625 7,875 0

06/24/2014 07/06/2015 07/06/2015 1 2,080 0 0 07/07/2018 07/08/2020 (b) 2,080

06/24/2014 08/26/2015 08/26/2015 1 3,000 0 0 08/27/2018 08/28/2020 750 2,250 0

04/21/2016 05/11/2016 05/11/2016 5 295,000 5 295,000 05/13/2019 05/14/2021 (f) 295,000

04/21/2016 05/09/2016 05/11/2016 252 695,410 0 0 05/13/2019 05/14/2021 30,360 (f) 619,910

04/21/2016 05/09/2016 05/11/2016 81 322,030 0 0 05/13/2019 05/13/2021 14,580 (c)(f) 299,230

04/21/2016 11/07/2016 11/07/2016 1 8,000 0 0 11/08/2019 11/09/2021 (f) 8,000

04/21/2016 02/23/2017 02/23/2017 5 200,000 5 200,000 02/24/2020 02/25/2022 200,000

04/21/2016 02/16/2017 02/23/2017 320 902,940 7 135,000 02/24/2020 02/25/2022 34,410 850,030

04/21/2016 02/16/2017 02/23/2017 105 440,810 2 60,000 02/24/2020 02/25/2022 25,050 (d) 414,760

04/21/2016 06/12/2017 06/12/2017 1 4,000 0 0 06/15/2020 06/16/2022 4,000

04/19/2018 05/17/2018 05/17/2018 5 175,000 5 175,000 05/18/2021 05/19/2023 175,000

04/19/2018 05/14/2018 05/17/2018 359 945,750 9 168,000 05/18/2021 05/19/2023 4,100 941,650

04/19/2018 05/14/2018 05/17/2018 163 511,000 2 58,000 05/18/2021 05/19/2023 3,400 (e) 507,600

04/19/2018 12/10/2018 12/10/2018 2 4,000 0 0 12/13/2021 12/14/2023 4,000

Total 377,984 770,906 4,790,171

(*) The ﬁrst day following the end of the vesting period of 3 years.

(a) Granted to a Brazil-resident beneﬁciary, to be registered in an account in 2019.

(b) Granted to Brazil-, US- and UK-resident beneﬁciaries, to be registered in an account in 2020.

(d) Granted to certain foreign-resident beneﬁciaries, to be registered in an account in 2022.

(e) Granted to certain foreign-resident beneﬁciaries, to be registered in an account in 2023.

(f) These plans were adjusted following calculation of the level of achievement of the associated performance criteria after the Supervisory Board meeting of February14, 2019

(see Section2.3.4 of this chapter). 73,750 rights granted to members of the Management Board were cancelled in accordance with the deﬁnitive vesting rate approved

by the Supervisory Board (75%).

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GAMELOFT

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NOTA

In accordance with European Commission Regulation (EC) 809/2004 (Article28), which sets out the disclosure obligations for

issuers of securities listed on a regulated market within the European Union (implementing Directive 2003/71/EC, the

“Prospectus Regulation”), the following items are incorporated by reference into this report:

3 the 2017 Financial Report, the Consolidated Financial Statements for the year ended December31, 2017, prepared under

IFRSand the relatedStatutory Auditors’ report on the Consolidated Financial Statements, presented on pages188 to 317

of the Document de référence No.D.18-0126, which was ﬁled on March13, 2018 with the French Autorité des marchés

ﬁnanciers (AMF) and on pages188 to 317 of the English translation of the Document de référence No.D.18-0126; and

3 the 2016 Financial Report, the Consolidated Financial Statements for the year ended December31, 2016, prepared under

IFRSand the relatedStatutory Auditors’ report on the Consolidated Financial Statements, presented on pages182 to 299

of the Document de référence No.D.17-0170, which was ﬁled on March14, 2017 with the French Autorité des marchés

ﬁnanciers (AMF) and on pages182 to 299 of the English translation of the Document de référence No.D.17-0170.

Asphalt 9: Legends

Dragon Mania Legends

Asphalt 9: Legends

Dragon Mania Legends

Financial Report, Statutory Auditors’ Report

ontheConsolidated Financial Statements,

Consolidated Financial Statements, Statutory

Auditors’ Report on the Financial Statements,

Statutory Financial Statements

KEY CONSOLIDATED FINANCIAL DATA FOR THE LAST FIVE YEARS 198

I — 2018 FINANCIAL REPORT 199

1.EARNINGS ANALYSIS: GROUP AND BUSINESS SEGMENTS 199

1.1. Consolidated Statement of Earnings 200

1.2. Analysis of the Consolidated Statement of Earnings 201

1.3. Analysis of revenues and operating results

by business segment 205

2.LIQUIDITY AND CAPITAL RESOURCES

215

2.1. Liquidity and equity portfolio 215

2.2. Cash ﬂow from operations analysis 217

2.3. Analysis of investing and ﬁnancing activities 219

3.OUTLOOK

220

4.FORWARD-LOOKING STATEMENTS 221

5.OTHER DISCLAIMERS 221

II — APPENDIX TO THE FINANCIAL REPORT 222

Quarterly revenues by business segment 222

III — AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

223

Statutory Auditors’ report on the Consolidated Financial Statements 223

Consolidated Statement of Earnings 228

Consolidated Statement of Comprehensive Income 229

Consolidated Statement of Financial Position 230

Consolidated Statement of Cash Flows 231

Consolidated Statements of Changes in Equity 232

Notesto the Consolidated Financial Statements 234

IV — 2018 STATUTORY FINANCIAL STATEMENTS

319

1. Statutory Auditors’ Report on the Financial Statements 320

2. 2018 Statutory Financial Statements 324

3. Notes to the 2018 Statutory Financial Statements 328

4. Subsidiaries and Afﬁliates 352

5. Maturity of Trade payable and Trade receivable 353

6. Financial Results of the Last Five Years 354

7. Statutory Auditors’ Special Report

onRegulatedAgreementsandCommitments 355

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Key consolidated ﬁnancial data for the last ﬁve years

PRELIMINARY COMMENTS

In 2018, Vivendi applied two new accounting standards:

3 IFRS15 – Revenues from Contracts with Customers: in accordance with IFRS15, Vivendi applied this change of accounting standard to 2017

revenues, thereby ensuring comparability of the data relative to each period of 2018 and 2017 contained in this report. The data presented

below with respect to ﬁscal years 2014 to 2016 are historical and therefore are unrestated; and

3 IFRS9 – Financial Instruments: in accordance with IFRS9, Vivendi applied this change of accounting standard to the 2018 Statement of

Earnings and Statement of Comprehensive Income and restated its opening balance sheet as of January1, 2018; therefore, the data relative

to prior years contained in this report is not comparable.

For a detailed description, please refer to Notes1 and 28 to the Consolidated Financial Statements for the year ended December31, 2018.

In addition, Vivendi deconsolidated GVT, SFR and Maroc Telecom group as from May28,2015, November27, 2014 and May14, 2014, respectively,

i.e., the date of their effective sale by Vivendi. In compliance with IFRS5, these businesses have been reported as discontinued operations for the

relevant periods as set out in the table of selected key consolidated ﬁnancial data below in respect of data reﬂected in the Statement of Earnings and

Statement of Cash Flows.

Year ended December31,

2018 2017 2016 2015 2014

Consolidated data

Revenues 13,932 12,518 10,819 10,762 10,089

Income from operations (a) 1,439 1,098 853 1,061 1,108

Adjusted earnings before interest and income taxes (EBITA) (a) 1,288 969 724 942 999

Earnings before interest and income taxes (EBIT) 1,182 1,018 887 521 545

Earnings attributable to VivendiSA shareowners 127 1,216 1,256 1,932 4,744

Of which earnings from continuing operations attributable

to VivendiSA shareowners 127 1,216 1,236 699 (290)

Adjusted net income (a) 1,157 1,300 755 697 626

Net Cash Position/(Financial Net Debt) (a) 176 (2,340) 1,231 7,172 4,681

Total equity 17,534 17,866 19,612 21,086 22,988

Of which VivendiSA shareowners’ equity 17,313 17,644 19,383 20,854 22,606

Cash ﬂow from operations (CFFO) (a) 1,126 989 729 892 843

Cash ﬂow from operations after interest and income tax paid (CFAIT) (a) 822 1,346 341 (69) 421

Financial investments (694) (3,685) (4,084) (3,927) (1,244)

Financial divestments 2,303 976 1,971 9,013 17,807

Dividends paid by VivendiSA to its shareholders 568 499 (b) 2,588 (b) 2,727 (c) 1,348

Purchases/(sales) of VivendiSA’s treasury shares - 203 1,623 492 32

Per share data

Weighted average numberof shares outstanding 1,263.5 1,252.7 1,272.6 1,361.5 1,345.8

Earnings attributable to VivendiSA shareowners per share – basic 0.10 0.97 0.99 1.42 3.52

Adjusted net income per share 0.92 1.04 0.59 0.51 0.46

Numberof shares outstanding at the end of the period (excluding treasury shares) 1,268.0 1,256.7 1,259.5 1,342.3 1,351.6

Equity per share, attributable to VivendiSA shareowners 13.65 14.04 15.39 15.54 16.73

Dividends per share paid 0.45 0.40 (b) 2.00 (b) 2.00 (c) 1.00

Inmillions of euros, numberof shares inmillions, data per share in euros.

(a) The non-GAAP measures of Income from operations, EBITA, Adjusted net income, Net Cash Position (or Financial Net Debt), Cash ﬂow from operations (CFFO) and Cash

ﬂow from operations after interest and income tax paid (CFAIT) should be considered in addition to, and not as a substitute for, other GAAP measures of operating and

ﬁnancial performance as presented in the Consolidated Financial Statements and the related notes, or as described in this Financial Report. Vivendi considers these to

be relevant indicators of the group’s operating and ﬁnancial performance. Each of these indicators is deﬁned in the appropriate sectionof this Financial Report. In

addition, it should be noted that other companies may have deﬁnitions and calculations for these indicators that differ from those used by Vivendi, thereby affecting

comparability.

(b) With respect to ﬁscal year 2015, Vivendi paid an ordinary dividend of €3 per share, i.e., an aggregate dividend payment of €3,951million. This amount included

€1,363million paid in 2015 (ﬁrst interim dividend of €1 per share) and €2,588million paid in 2016 (€1,318million for the second interim dividend of €1 per share and

€1,270million representing the balance of €1 per share). In addition, in 2015, Vivendi paid a dividend with respect to ﬁscal year 2014 of €1 per share, i.e., €1,364million.

(c) On June30, 2014, VivendiSA paid an ordinary dividend of €1 per share to its shareholders from additional paid-in capital, treated as a return of capital distribution to

shareholders.

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1.Earnings analysis: group and business segments

2018 FINANCIAL REPORT

13 13

I – 2018 Financial Report

PRELIMINARY COMMENTS

On February11, 2019, the Management Board approved the Financial Report and the Audited Consolidated Financial Statements for the year ended

December31, 2018. Upon the recommendation of the Audit Committee, which met on February12, 2019, the Supervisory Board, at its meeting held on

February14, 2019, reviewed the Financial Report and the Audited Consolidated Financial Statements for the year ended December31, 2018, as

previously approved by the Management Board on February11, 2019.

The Consolidated Financial Statements for the year ended December31, 2018 have been audited and certiﬁed by the Statutory Auditors without

qualiﬁed opinion. The Statutory Auditors’ report on the Consolidated Financial Statements is included in the preamble to the Financial Statements.

1.Earnings analysis: group and business segments

PRELIMINARY COMMENTS

Change of accounting standards

In 2018, Vivendi applied two new accounting standards:

3 IFRS15 – Revenues from Contracts with Customers: in accordance with IFRS15, Vivendi applied this change of accounting standard to 2017

revenues, thereby ensuring comparability of the data relative to each period of 2018 and 2017 contained in this report; and

3 IFRS9 – Financial Instruments: in accordance with IFRS9, Vivendi applied this change of accounting standard to the 2018 Statement

ofEarnings; therefore, the data relative to 2017 contained in this report is not comparable.

For a detailed description, please refer to Notes1 and 28 to the Consolidated Financial Statements for the year ended December31, 2018.

Non-GAAP measures

“Income from operations”, “EBITA” and “adjusted net income”, all non-GAAP measures, should be considered in addition to, and not as a substitute for,

other GAAP measures of operating and ﬁnancial performance as presented in the Consolidated Financial Statements and the related notes, or as

described in this Financial Report. Vivendi considers these to be relevant indicators for the group’s operating and ﬁnancial performance.

Vivendi Management uses income from operations, EBITA and adjusted net income for reporting, management and planning purposes because they

exclude most non-recurring and non-operating items from the measurement of the business segments’ performances. Under Vivendi’s deﬁnition:

3 the difference between EBITA and EBIT consists of the amortization of intangible assets acquired through business combinations, the

impairment of goodwill and other intangibles acquired through business combinations, the income from equity afﬁliates – operational, as well

as other charges and income related to transactions with shareowners;

3 income from operations is calculated as EBITA, as presented in the Adjusted Statement of Earnings, before share-based compensation costs

and special items, due to their unusual nature and particular signiﬁcance; and

3 adjusted net income includes the following items: EBITA; income from equity affiliates; interest (corresponding to interest expense on

borrowings net of interest income earned on cash and cash equivalents); income from investments (including dividends and interest received

from unconsolidated companies); and taxes and non-controlling interests related to these items. It does not include the following items:

amortization of intangible assets acquired through business combinations and related to equity afﬁliates; impairment losses on goodwill and

other intangible assets acquired through business combinations; other charges and income related to transactions with shareowners; other

ﬁnancial charges and income; earnings from discontinued operations; provisions for income taxes and adjustments attributable to non-

controlling interests; non-recurring tax items (in particular the changes in deferred tax assets pursuant to VivendiSA’s Tax Group and the

Consolidated Global Proﬁt Tax Systems and the reversal of tax liabilities related to risks extinguished over the period).

Moreover, it should be noted that other companies may have deﬁnitions and calculations for these non-GAAP measures that differ from those used by

Vivendi, thereby affecting comparability.

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1.1. Consolidated Statement of Earnings

Year ended December31,

% Change2018 2017

Revenues 13,932 12,518 +11.3%

Cost of revenues (7,618) (7,302)

Selling, general and administrative expenses excluding amortization of intangible assets

acquired through business combinations (4,875) (4,118)

Income from operations (*) 1,439 1,098 +31.0%

Restructuring charges (115) (88)

Other operating charges and income (36) (41)

Adjusted earnings before interest and income taxes (EBITA) (*) 1,288 969 +33.0%

Amortization and depreciation of intangible assets acquired through business combinations (113) (124)

Reversal of reserve related to the Securities Class Action litigation in the United States - 27

Income from equity afﬁliates – operational 7 146

Earnings before interest and income taxes (EBIT) 1,182 1,018 +16.1%

Income from equity afﬁliates – non-operational 122 -

Interest (47) (53)

Income from investments 20 29

Other ﬁnancial charges and income (763) (100)

(790) (124)

Earnings before provision for income taxes 514 894 -42.4%

Provision for income taxes (357) 355

Earnings from continuing operations 157 1,249 -87.4%

Earnings from discontinued operations - -

Earnings 157 1,249 -87.4%

Non-controlling interests (30) (33)

Earnings attributable to Vivendi SA shareowners 127 1,216 -89.6%

Earnings attributable to VivendiSA shareowners per share – basic (in euros) 0.10 0.97

Earnings attributable to VivendiSA shareowners per share – diluted (in euros) 0.10 0.94

Adjusted net income (*) 1,157 1,300 -11.1%

Adjusted net income per share – basic (in euros) (*) 0.92 1.04

Adjusted net income per share – diluted (in euros) (*) 0.91 1.00

Inmillions of euros, except per share amounts.

(*) Non-GAAP measures.

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1.2. Analysis of the Consolidated Statement of Earnings

1.2.1. REVENUES

In 2018, Vivendi’s revenues amounted to €13,932million, compared to

€12,518million in 2017, an increase of €1,414million (+11.3%), notably as

a result of the consolidation of Havas (+€1,108million). At constant

currency and perimeter (1), Vivendi’s revenues increased by 4.9% compared

to 2017. For the second year in a row, Universal Music Group’s revenues

increased by 10.0% (2) and Canal+ Group’s revenues were stable.

For the second half of 2018, at constant currency and perimeter, Vivendi’s

revenues increased by 5.7% compared to the second half of 2017, an

improvement compared to the ﬁrst half of 2018 (+3.9% compared to the ﬁrst

half of 2017), mainly driven by Universal Music Group (+12.8% for the

second half, compared to +6.8% for the ﬁrst half).

For the fourth quarter of 2018, at constant currency and perimeter, Vivendi’s

revenue growth was +5.6% compared to the fourth quarter of 2017, as

opposed to +3.3% for the first quarter of 2018, +4.6% for the second

quarter, and +5.7% for the third quarter (for quarterly revenues by business

segment, please refer to the appendix to the Financial Report).

For a detailed analysis of revenues by business segment, please refer to

Section 1.3 below.

1.2.2. OPERATING RESULTS

Cost of revenues amounted to €7,618million, compared to €7,302million

in 2017, an increase of €316million.

Selling, general and administrative expenses excluding amorti-

zation of intangible assets acquired through business combinations

amounted to €4,875million, compared to €4,118million in 2017, an increase

of €757million.

Depreciation and amortization of tangible and intangible assets are

included either in the cost of revenues or in selling, general and

administrative expenses. Depreciation and amortization, excluding

amortization of intangible assets acquired through business combinations,

amounted to €340million (compared to €337million in 2017), and notably

related to Canal+ Group’s set-top boxes, as well as Studiocanal’s catalogs,

ﬁlms and television programs.

Income from operations amounted to €1,439million, compared to

€1,098million in 2017, an increase of €341million (+31.0%), notably

resulting from the consolidation of Havas (+€123million). At constant

currency and perimeter, income from operations increased by €250million

(+22.7%) driven by the growth of Universal Music Group (+€177million) and

Canal+ Group (+€78million), which continues its recovery in France.

EBITA amounted to €1,288million, compared to €969million in 2017, an

increase of €319million (+33.0%), notably resulting from the consolidation

of Havas (+€104million). At constant currency and perimeter, EBITA

increased by €240million (+24.7%), driven by the growth of Universal Music

Group (+€168million) and Canal+ Group (+€98million), which continues its

recovery in France. In addition, EBITA included:

3 restructuring charges of €115million, compared to €88million in

2017, primarily incurred by Havas (€30million, compared to

€15million for the second half of 2017), Universal Music Group

(€29million, compared to €17million in 2017), Canal+ Group

(€28million, compared to €49million in 2017) and Corporate

(€19million, compared to €1million in 2017); and

3 other operating charges and income excluded from income

from operations, which was a net charge of €36million, compared

to a net charge of €41million in 2017. They notably included a

-€22million charge relating to share-based compensation plans in

2018, compared to -€31million in 2017.

For a detailed analysis of income from operations and EBITA by business

segment, please refer to Section 1.3 below.

EBIT amounted to €1,182million, compared to €1,018million in 2017, an

increase of €164million. It included the following:

3 amortization and depreciation of intangible assets acquired

through business combinations for €113million, compared to

€124million in 2017, a €11million improvement;

3 the reversal of reserve related to the Securities Class Action

litigation in the United States, which represented a net proﬁt of

€27million for the first half of 2017. As a reminder, on April6,

2017, Vivendi announced that it had entered into an agreement to

settle the remaining claims still in dispute with certain class

plaintiffs for $26million, which together with the judgments

previously entered, resolved the entire litigation for an aggregate

amount of $78million; and

3 income from equity afﬁliates – operational, which was a proﬁt

of €7million, compared to a profit of €146million in 2017. This

decrease of €139million resulted from the reclassiﬁcation in 2018

of Vivendi’s share of Telecom Italia’s net earnings (€122million) in

“income from equity afﬁliates – non-operational”, to account for the

decrease of Vivendi’s inﬂuence over Telecom Italia in 2018 (please

refer below and to Note11.2 to the Consolidated Financial

Statements for the year ended December31, 2018). In 2017, this

amount primarily included Vivendi’s share of Telecom Italia’s net

earnings, calculated based on the financial information publicly

disclosed by Telecom Italia, which represented a profit of

€144million.

(1) Constant perimeter reﬂects the impacts of the acquisition of Havas (July3, 2017), the acquisition of Paylogic by Vivendi Village (April16, 2018) and the sale of Radionomy by Vivendi Village

(August17, 2017).

(2) At constant currency and perimeter, compared to 2017.

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1.2.3. INCOME FROM EQUITY AFFILIATES–

NON-OPERATIONAL

Income from equity afﬁliates – non-operational amounted to a proﬁt

of €122million, compared to nil in 2017. In 2018, this amount related to

Vivendi’s share of Telecom Italia’s net earnings, calculated based on the

ﬁnancial information publicly disclosed by Telecom Italia (1). In 2017, the

share of Telecom Italia’s net earnings (€144million) was recorded as

“income from equity afﬁliates – operational” (please refer above and to

Note11.2 to the Consolidated Financial Statements for the year ended

December31, 2018).

1.2.4. FINANCIAL RESULTS

In 2018, interest was an expense of €47million (compared to €53million in

2017). In this amount:

3 interest expense on borrowings amounted to €64million, compared

to €68million in 2017. This change notably reﬂected the decrease in

the average interest rate on borrowings to 1.39% (compared to

1.60% in 2017), partially offset by the increase in the average

outstanding borrowings to €4.6billion (compared to €4.3billion in

2017); and

3 interest income earned on the investment of cash surpluses

amounted to €17million, compared to €15million in 2017. This

change reﬂected the increase in the average interest rate on cash

investments to 0.50% (compared to 0.40% in 2017), partially offset

by the decrease in the average outstanding cash investments to

€3.4billion (compared to €3.7billion in 2017).

Income from investments amounted to €20million, compared to

€29million in 2017. This amount mainly included dividends received from

Telefonica of €11million (compared to €20million in 2017), as well as the

interest from the bonds issued by Banijay Group Holding and Lov Banijay

and subscribed to by Vivendi for €6million (compared to €7million in 2017).

Other ﬁnancial charges and income were a net charge of €763million,

compared to a net charge of €100million in 2017. In 2018, other ﬁnancial

charges included the write-down of the value of the Telecom Italia shares

accounted for under the equity method, for €1,066million. Notwithstanding

Vivendi’s expected improvement of Telecom Italia’s outlook, Vivendi wrote-

down the value of its interest in Telecom Italia accounted for under the

equity method notably to take into account the uncertainty affecting

Telecom Italia’s governance, which increases the non-execution risks

associated with the company’s industrial plan given Vivendi’s lower power

to participate in Telecom Italia’s ﬁnancial and operating policy decisions,

and to take into account the changes in Telecom Italia’s competitive and

regulatory environment. Other ﬁnancial income included the revaluation

between January1 and December31, 2018 of the interests in Spotify and

Tencent Music for an aggregate amount of €312million, as well as in

Ubisoft for €53million, reported to proﬁt or loss in accordance with the new

accounting standard IFRS9, applicable since January1, 2018.

In 2018, Vivendi realized a capital gain of €1,213million on the sale of its

interest in Ubisoft. Of this amount, only the portion corresponding to the

revaluation of such interest in 2018 (€53million) was recorded in the

Statement of Earnings for the year ended December31, 2018, in accordance

with the new IFRS9 accounting standard, applicable since January1, 2018.

The remaining portion of the capital gain (€1,160million) related to the

revaluation of such interest up until December31, 2017, was recorded in

“charges and income directly recognized in equity” as of December31,

2017, in accordance with the former IAS 39 accounting standard, and

reclassiﬁed as retained earnings as of January1, 2018 as a result of the

ﬁrst-time application of IFRS9. Under IAS 39, which was applicable up until

December31, 2017, it would have been reported to proﬁt or loss.

1.2.5. PROVISION FOR INCOME TAXES

In 2018, provision for income taxes reported to adjusted net income

was a net charge of €253million, compared to a net income of €195million

in 2017, representing an unfavorable change of €448million. In 2017, the

tax net income reported to adjusted net income notably included (i) a

current tax income of €409million recorded following the litigation relating

to the Consolidated Global Proﬁt Tax System of 2011, where VivendiSA

secured a favorable settlement, and (ii) the current tax income of

€25million, corresponding to moratorium interest, relating to the refund to

VivendiSA and its subsidiaries of the amounts paid under the 3% tax on

dividend distributions, following the decision of the French Constitutional

Council dated October6, 2017, where it was ruled that this tax contribution

was unconstitutional (please refer to Note6 to the Consolidated Financial

Statements for the year ended December31, 2018).

Excluding these two non-recurring favorable impacts, provision for income

taxes reported to adjusted net income in 2017 would have been a net

charge of €239million, compared to a net charge of €253million in 2018,

i.e., an unfavorable change of €14million. This change mainly reﬂected the

increase in the tax charges of Universal Music Group and Canal+ Group,

partially offset by the increase in current tax savings from Vivendi’s Tax

Group System in France. In 2018, the growth in Universal Music Group’s

taxable income in the United States resulted in a federal tax charge of

€48million, which reﬂected the impact of the tax reform applicable from

January1, 2018. In 2017, the federal tax charge was nil, taking into account

the current tax savings resulting from the utilization of the tax losses carried

forward in the United States (€96million). The growth in Canal+ Group’s

taxable income primarily resulted from the recovery of its businesses in

France. The increase in current tax savings from Vivendi’s Tax Group System

in France in 2018 (€168million, compared to €86million in 2017) notably

resulted from the integration of Havas and its subsidiaries as from

January1, 2018.

In 2018, the effective tax rate reported to adjusted net income

amounted to 20.1%, compared to 25.3% in 2017 restated from the two

non-recurring favorable impacts. This decrease of approximately 5 points in

the effective tax rate reported to adjusted net income mainly reﬂected the

increase in 2018 of the current tax savings from Vivendi’s Tax Group System

in France, as well as the decrease in the federal tax rate in the United

States, while unutilized tax losses generated by businesses under

development were almost stable.

In 2018, provision for income taxes reported to net income was a net

charge of €357million, compared to a net income of €355million in 2017. In

2017, the tax net income reported to net income notably included (i) a

(1) On November8, 2018 (Financial Statements for the ﬁrst nine months of 2018) and on March6, 2018 (Financial Statements for the year ended December31, 2017): please refer to Note11.2 to the

Consolidated Financial Statements for the year ended December31, 2018.

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13 13

current tax income of €409million recorded following the litigation relating

to the Consolidated Global Proﬁt Tax System of 2011, where VivendiSA

secured a favorable settlement, as well as (ii) a current tax income of

€243million corresponding to the refund to VivendiSA (€207million

principal and €24million moratorium interest) and to its subsidiaries

(€11million principal and €1million moratorium interest) of the amounts

paid under the 3% tax on dividend distributions, following the decision of

the French Constitutional Council dated October6, 2017, where it was ruled

that this tax contribution was unconstitutional (please refer to Note6 to the

Consolidated Financial Statements for the year ended December31, 2018).

Excluding the two non-recurring favorable impacts, the provision for income

taxes reported to net income in 2017 would have been a net charge of

€297million, compared to a net charge of €357million in 2018, i.e., an

unfavorable change of €60million. In addition to the explanatory reasons

for the increase in the tax charge reported to adjusted net income, in 2018,

this increase in the tax charge reported to net income included, the deferred

tax charge relating to the revaluation through proﬁt or loss of the interests

in Spotify and Tencent Music for an aggregate amount of -€72million, in

accordance with the new accounting standard IFRS9, applicable since

January1,2018. In 2017, provision for income taxes also included a net

deferred tax income of €79million following the change of the corporate

federal tax rate applicable in the United States since January1, 2018. This

also included a deferred tax charge of -€119million corresponding to the

write-off of deferred tax assets related to losses carried forward by Havas,

primarily in France. In addition, the deferred tax savings relating to

VivendiSA’s Tax Group System were almost stable (a charge of €2million in

2018, compared to an income of €3million in 2017).

1.2.6. NON-CONTROLLING INTERESTS

In 2018, earnings attributable to non-controlling interests amounted

to €30million, compared to €33million in 2017. They mainly included the

non-controlling interests of nc+ in Poland, Canal+ International and VTV in

Vietnam.

1.2.7. EARNINGS ATTRIBUTABLE

TOVIVENDISASHAREOWNERS

In 2018, earnings attributable to VivendiSA shareowners amounted

to a profit of €127million (or €0.10per share – basic), compared to

€1,216million in 2017 (or €0.97 per share – basic), a decrease of

€1,089million (-89.6%). In 2018, the increase in EBIT (+€164million) and the

revaluation between January1 and December31, 2018 of the interests in

Spotify, Tencent Music and Ubisoft for an aggregate amount of

+€365million, were offset by the write-down of the Telecom Italia shares

accounted for under the equity method (-€1,066million) and the increase in

provision for income taxes (-€712million). In 2017, the tax net income

reported to adjusted net income notably included a current tax income of

€409million recorded following the litigation relating to the Consolidated

Global Proﬁt Tax System of 2011, where VivendiSA secured a favorable

settlement. This also included the current tax income of €243million

(including €25million of moratorium interest) relating to the refund received

by VivendiSA and its subsidiaries of the amounts paid under the 3% tax on

dividend distributions. Excluding these two non-recurring favorable tax

impacts, the net income would have been a proﬁt of €564million in 2017.

1.2.8. ADJUSTED NET INCOME

(inmillions of euros)

Year ended December31,

2018 2017 % Change

Revenues 13,932 12,518 +11.3%

Income from operations 1,439 1,098 +31.0%

EBITA 1,288 969 +33.0%

Income from equity afﬁliates – operational 7 205

Income from equity afﬁliates – non-operational 182 -

Interest (47) (53)

Income from investments 20 29

Adjusted earnings from continuing operations before provision for income taxes 1,450 1,150 +26.1%

Provision for income taxes (253) 195

Adjusted net income before non-controlling interests 1,197 1,345

Non-controlling interests (40) (45)

Adjusted net income 1,157 1,300 -11.1%

In 2018, adjusted net income was a proﬁt of €1,157million (or €0.92 per

share – basic), compared to €1,300million in 2017 (or €1.04per share –

basic), a decrease of €143million (-11.1%). The growth in EBITA

(+€319million), resulting from the consolidation of Havas and the

performance of Universal Music Group and Canal+ Group, was offset by the

correlative increase of provision for income taxes (-€448million). In 2017,

the tax net income reported to adjusted net income notably included a

current tax income of €409million recorded following the litigation relating

to the Consolidated Global Proﬁt Tax System of 2011, where VivendiSA

secured a favorable settlement. This also included the current tax income of

€25million corresponding to moratorium interest relating to the refund

received by VivendiSA and its subsidiaries of the amounts paid under the

3% tax on dividend distributions. Excluding these two non-recurring

favorable tax impacts, the adjusted net income would have been a proﬁt of

€866million in 2017, compared to a proﬁt of €1,157million in 2018, i.e., an

increase of €291million (+33.6%).

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Reconciliation of earnings attributable to VivendiSA shareowners to adjusted net income

(inmillions of euros)

Year ended December31,

2018 2017

Earnings attributable to VivendiSA shareowners (a) 127 1,216

Adjustments

Amortization and depreciation of intangible assets acquired through business combinations 113 124

Amortization of intangible assets related to equity afﬁliates 60 59

Reversal of reserve related to the Securities Class Action litigation in the United States (a) - (27)

Other ﬁnancial charges and income 763 100

Provision for income taxes on adjustments 104 (160)

Impact of adjustments on non-controlling interests (10) (12)

Adjusted net income 1,157 1,300

(a) As reported in the Consolidated Statement of Earnings.

Adjusted net income per share

Year ended December31,

2018 2017

Basic Diluted Basic Diluted

Adjusted net income (inmillions of euros) 1,157 1,157 1,300 (a) 1,254

Numberof shares (inmillions)

Weighted average numberof shares outstanding (b) 1,263.5 1,263.5 1,252.7 1,252.7

Potential dilutive effects related to share-based compensation - 5.1 - 4.8

Adjusted weighted average numberof shares 1,263.5 1,268.6 1,252.7 1,257.5

Adjusted net income per share (in euros) 0.92 0.91 1.04 1.00

(a) Corresponded only to the impact for Vivendi of Telecom Italia’s dilutive instruments, calculated based on the ﬁnancial information publicly disclosed by Telecom Italia

with a three-month reporting lag (please refer to Note11.2 to the Consolidated Financial Statements for the year ended December31, 2018).

(b) Net of the weighted average numberof treasury shares (38.5million shares in 2018, compared to 37.5million in 2017).

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1.3. Analysis of revenues and operating results by business segment

(inmillions of euros)

Year ended December31,

2018 2017 % Change

% Change at

constantcurrency

% Change at

constantcurrency

andperimeter (a)

Revenues

Universal Music Group 6,023 5,673 +6.2% +10.0% +10.0%

Canal+ Group 5,166 5,198 -0.6% -0.3% -0.3%

Havas 2,319 1,211 na na na

Gameloft 293 320 -8.3% -5.1% -5.1%

Vivendi Village 123 109 +12.6% +13.1% +11.5%

New Initiatives 66 51 +30.5% +30.5% +30.5%

Elimination of intersegment transactions (58) (44)

Total Vivendi 13,932 12,518 +11.3% +14.1% +4.9%

Income from operations

Universal Music Group 946 798 +18.4% +22.1% +22.1%

Canal+ Group 429 349 +23.1% +22.4% +22.4%

Havas 258 135 na na na

Gameloft 4 10 -60.4% -56.4% -56.4%

Vivendi Village (9) (6)

New Initiatives (79) (87)

Corporate (110) (101)

Total Vivendi 1,439 1,098 +31.0% +33.9% +22.7%

EBITA

Universal Music Group 902 761 +18.4% +22.1% +22.1%

Canal+ Group 400 300 +33.6% +32.8% +32.8%

Havas 215 111 na na na

Gameloft 2 4 -55.8% -41.9% -41.9%

Vivendi Village (9) (18)

New Initiatives (99) (92)

Corporate (123) (97)

Total Vivendi 1,288 969 +33.0% +36.1% +24.7%

na: not applicable.

(a) Constant perimeter reﬂects the impacts of the acquisition of Havas (July3, 2017), the acquisition of Paylogic by Vivendi Village (April16, 2018) and the sale of

Radionomy by Vivendi Village (August17, 2017).

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1.3.1. UNIVERSAL MUSIC GROUP (UMG)

(inmillions of euros)

Year ended December31,

2018 2017 % Change

% Change at

constantcurrency

% Change at

constantcurrency

and perimeter

Recorded music 4,828 4,559 +5.9% +9.8% +9.8%

Subscriptions and streaming 2,596 1,971 +31.7% +37.3% +37.3%

Other digital sales (a) 479 685 -30.0% -26.6% -26.6%

Physical sales 949 1,156 -17.9% -16.1% -16.1%

License and other 804 747 +7.5% +10.7% +10.7%

Music publishing 941 854 +10.3% +14.5% +14.5%

Merchandising and other 273 283 -3.5% -1.5% -1.5%

Elimination of intersegment transactions (19) (23)

Revenues 6,023 5,673 +6.2% +10.0% +10.0%

Income from operations 946 798 +18.4% +22.1% +22.1%

Income from operations margin 15.7% 14.1% +1.6 pts

Restructuring charges (29) (17)

Income/(charges) related to share-based compensation plans (4) (9)

Other special items excluded from income from operations (11) (11)

EBITA 902 761 +18.4% +22.1% +22.1%

EBITA margin 15.0% 13.4% +1.6 pts

Recorded music revenues by geographic area

North America 2,224 2,090 +6.4% +11.5% +11.5%

Europe 1,580 1,513 +4.4% +5.5% +5.5%

Asia 618 563 +9.8% +13.0% +13.0%

Latin America 153 155 -1.5% +14.5% +14.5%

Rest of the world 253 238 +6.2% +11.3% +11.3%

4,828 4,559 +5.9% +9.8% +9.8%

(a) Mainly included download sales.

Recorded music best sellers, in value (source: MusicMart)

Year ended December31, 2018 Year ended December31, 2017

Artist Title Artist Title

Drake Scorpion Taylor Swift Reputation

Post Malone Beerbongs & Bentleys Kendrick Lamar DAMN

Lady Gaga and Bradley Cooper A Star Is Born Drake More Life

The Beatles The Beatles (White Album) The Weeknd Starboy

XXXTentacion ? Luis Fonsi Despacito & Mis Grandes Éxitos

Migos Culture II Various Artists Moana

Imagine Dragons Evolve Imagine Dragons Evolve

Ariana Grande Sweetener The Beatles Sgt. Pepper’s

Kendrick Lamar Black Panther: The Album Post Malone Stoney

Post Malone Stoney Sam Smith The Thrill Of It All

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13 13

In 2018, Universal Music Group’s (UMG) revenues amounted to

€6,023million, up 10.0% at constant currency and perimeter compared to

2017 (+6.2% on an actual basis).

Recorded music revenues grew by 9.8% at constant currency and perimeter

thanks to the growth in subscription and streaming revenues (+37.3%),

driven by the increase in subscribers and a stronger market share, which

more than offset the continued decline in both download (-23.5%) and

physical (-16.1%) sales.

Recorded music best sellers for the year included releases from Drake, Post

Malone, The Beatles and XXXTentacion, as well as the soundtrack release

from A Star is Born.

Globally, UMG had every one of the top ﬁve tracks, the top four artists and

the top three albums on Spotify in 2018. Additionally, UMG artists occupied

the top ﬁve positions and 14 of the top 20 positions on Apple Music’s Global

Top 100 Songs 2018.

Music publishing revenues grew by 14.5% at constant currency and

perimeter, also driven by increased subscription and streaming revenues, as

well as higher revenues generated from performance rights and

synchronization.

Merchandising and other revenues decreased by 1.5% at constant currency

and perimeter, due to lower touring activity.

Driven by the growth in revenues, UMG’s income from operations amounted

to €946million, up 22.1% at constant currency and perimeter compared

to2017 (+18.4% on an actual basis), and UMG’s EBITA amounted to

€902million, up 22.1% at constant currency and perimeter compared

to2017 (+18.4% on an actual basis).

In 2018, several of the world’s most iconic artists signed or re-signed with

UMG, including ground-breaking deals with Taylor Swift, The Rolling Stones

and Sir Elton John, demonstrating that UMG is the preferred partner for

artists for all stages and virtually every aspect of their careers.

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1.3.2. CANAL+ GROUP

(inmillions of euros)

Year ended December31,

2018 2017 % Change

% Change at

constantcurrency

% Change at

constantcurrency

and perimeter

TV in Mainland France (a) 3,137 3,249 -3.4% -3.4% -3.4%

International TV 1,567 1,482 +5.7% +6.8% +6.8%

Studiocanal 462 467 -1.2% -0.6% -0.6%

Revenues 5,166 5,198 -0.6% -0.3% -0.3%

Income from operations 429 349 +23.1% +22.4% +22.4%

Income from operations margin 8.3% 6.7% +1.6 pts

Income/(charges) related to share-based compensation plans (3) (6)

Other special items excluded from income from operations 2 6

EBITA before restructuring charges 428 349 +22.6% +21.8% +21.8%

Restructuring charges (28) (49)

EBITA 400 300 +33.6% +32.8% +32.8%

EBITA margin 7.7% 5.8% +1.9 pts

Pay-TV subscribers (inthousands)

Self-distributed individual subscribers in Mainland France 4,733 4,950 -217

Canal customers via wholesale partnerships (b) 3,093 3,117 -24

International individual subscribers 7,831 6,948 +883

Africa 4,110 3,458 +652

Poland 2,194 2,171 +23

Overseas 583 530 +53

Vietnam 884 789 +95

Myanmar (Burma) 60 - +60

Total Canal+ Group individual subscribers 15,657 15,015 +642

Collective subscribers 591 579 +12

Total Canal+ Group subscribers 16,248 15,594 +654

Mainland France Pay-TV

Churn rate (over a 12-month rolling period) (c) 13.6% 15.8% -2.2 pts

Net ARPU Premium (in euros) (d) 44.8 45.5 -€0.7

Net ARPU (in euros) (e) 45.4 45.7 -€0.3

(a) Corresponds to pay-TV and free-to-air channels (C8, CStar and CNews) in mainland France.

(b) Includes the strategic partnership agreements with Free, Orange and Bouygues Telecom. Certain subscribers may also have subscribed to a Canal+ offer.

(c) Churn rate by individual subscriberwith commitment over a 12-month period, excluding customers via wholesale partnerships and those beneﬁting from a LDA (Liberté

d’Annuler) option.

(d) Net ARPU (Average revenue per user) per individual Premium subscriberwith and without commitment, excluding wholesale partnerships.

(e) Net ARPU per individual subscriberwith commitment, excluding wholesale partnerships.

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13 13

In 2018, Canal+ Group’s revenues amounted to €5,166million, almost stable

compared to 2017 (-0.3% at constant currency and perimeter).

At the end of December2018, Canal+ Group’s overall subscriberportfolio

(individual and collective subscribers in France and internationally) stood at

16.2million, compared to 15.6million at the end of December2017,

representing net growth of 654,000 subscribers.

Revenues from television operations in mainland France decreased slightly

(-3.4% at constant currency and perimeter) due to the decline in the

individual subscriberbase (7.8million, compared to 8.1million at the end of

December2017), despite a positive change in the churn rate, which

decreased by 2.2 points over the year to 13.6%. This decline was due in

particular to the drop in Canalplay’s subscriberbase and the termination of

the Canalsat offer in favor of the new Canal offers and subscriptions via

wholesale partnerships with telecom operators. However, the Canal+

channel’s individual subscriberbase recorded a net year-on-year increase in

subscribers of 251,000. Including collective subscriptions, the total

subscriberportfolio in mainland France reached 8.3million.

International operations delivered a strong increase in revenues of 6.8% at

constant currency and perimeter, primarily due to the very strong growth in

the individual subscriberbase (+883,000 year-on-year) to which all the

territories contributed, without exception.

Studiocanal’s revenues amounted to €462million, a slight year-on-year

decrease (-0.6% at constant currency and perimeter) due to an unfavorable

2017 comparable basis (particularly with the worldwide success of

Paddington 2) and despite signiﬁcant growth in TV operations and increased

catalog revenues. In France, Studiocanal was the second largest French ﬁlm

distributor in 2018 with more than 10million theater tickets sold, thanks in

particular to the success of Sink or Swim (4.3million tickets sold), Mia and

the White Lion (1.4million tickets sold), and In Safe Hands (0.8million

tickets sold) during the fourth quarter.

In 2018, Canal+ Group’s proﬁtability increased sharply compared to 2017.

Income from operations amounted to €429million, compared to

€349million in 2017 (+22.4% at constant currency and perimeter).

EBITA before restructuring charges amounted to €428million, up nearly

€80million year-on-year. EBITA after restructuring charges amounted to

€400million, compared to €300million in 2017 (+32.8% at constant

currency and perimeter). This strong EBITA growth was notably due to the

cost savings plan initiated in 2016, the signiﬁcant improvement in mainland

France and sustained international development.

On November8, 2018, Canal+ Group announced the renewal of its

agreement with the French cinema, extending until the end of 2022 a

historic partnership of more than 30 years. This agreement was a

prerequisite for the signing on December21, 2018 of the new media release

chronology which protects and strengthens the unique position of Canal+

which can now offer new movies to its subscribers as early as 6months

after their theatrical release.

In the fourth quarter of 2018, Canal+ Group also strengthened its sports

offer, especially around football, with the acquisition of the broadcasting

rights in France for the English Premier League and in Poland for the

Ekstraklasa. Canal+ Group is proud to have won the exclusive rights in

France for the Premier League, the most widely broadcast football league in

the world. Canal+ will offer the 380 Premier League matches on its

channels and on myCANAL. The agreement covers three seasons

(2019/2020, 2020/2021 and 2021/2022) and will start in August2019. In

addition, the acquisition of Moto GP’s rights for the ﬁrst time illustrates the

group’s desire to diversify its sports offer, in line with recent developments

in boxing and women’s football.

A new global distribution agreement entered into on November14, 2018

with the TF1 Group allows all TF1 Group channels and related non-linear

services to be integrated into the Canal offers. The group had entered into a

similar agreement with M6 Group in early 2018.

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1.3.3. HAVAS

As a reminder, since July3, 2017, Vivendi has fully consolidated Havas.

(inmillions of euros)

Year ended December31, 12-month pro forma data

2018 2017 (a) 2017 % Change

% Change at

constantcurrency

and perimeter

Revenues 2,319 1,211 2,374 -2.3% +0.5%

Net revenues (b) 2,195 1,151 2,259 -2.8% +0.1%

Income from operations 258 135 254 +1.8% -

Income from operations/net revenues 11.8% 11.7% 11.2% +0.6 pts

Income/(charges) related to share-based compensation plans (12) (3) (10)

Other special items excluded from income from operations (1) (6) (8)

EBITA before restructuring charges 245 126 236 +3.8% +1.9%

Restructuring charges (30) (15) (24)

EBITA 215 111 212 +1.7% -0.7%

EBITA/net revenues 9.8% 9.6% 9.4% +0.4 pts

Net revenues by geographic area

Europe 1,109 575 1,123 -1.2% -1.4%

Of which France 438 226 452 -3.1% -3.4%

United Kingdom 261 123 242 +8.1% +4.8%

North America 766 391 789 -2.9% +1.3%

Asia Paciﬁc and Africa 192 111 201 -4.9% -

Latin America 128 74 146 -12.7% +5.8%

2,195 1,151 2,259 -2.8% +0.1%

(a) Corresponds to the ﬁnancial data consolidated by Vivendi since July3, 2017.

(b) Net revenues correspond to Havas’s revenues less the pass-through costs rebilled to customers (please refer to Note1.3.4.3 to the Consolidated Financial Statements

for the year ended December31, 2018).

Reﬂecting an excellent fourth quarter 2018, Havas’s revenues amounted to

€693million, up 6.5% at constant currency and perimeter. Organic net

revenue growth was 4.8% compared to the fourth quarter of 2017 (+6.7%

excluding the impact of Arnold).

In 2018, Havas’s revenues amounted to €2,319million, up 0.5% at constant

currency and perimeter compared to 2017 (pro forma). Net revenues

amounted to €2,195million (compared to €2,259million in 2017 pro forma),

up 0.1% organically (+1.9% excluding the impact of Arnold) and down 2.8%

on an actual basis mainly due to negative currency effects.

With an organic growth of 2.7% in the second half of 2018, compared to

-2.9% in the first half of 2018, Havas confirmed the net sequential

improvement in organic net revenue growth. All its businesses (creative,

health and wellness and media) contributed to this upturn.

In 2018, Havas increased its proﬁtability. Havas’s income from operations

reached €258million, compared to €254million in 2017 (pro forma), a

+0.6point increase in the income from operations/net revenues margin to

11.8%. EBITA amounted to €215million, compared to €212million in 2017,

representing an increase of +0.4 points in the EBITA/net revenues margin.

EBITA before restructuring charges was up 3.8% compared to 2017 (+1.9%

organically).

The North American agencies performed very well in the fourth quarter of

2018, thanks to Havas Media, Havas Health & You, Havas Edge and

Abernathy/AMO.

Business in Europe continued to show progress at the end of the year,

supported once again by robust performances in France and in the United

Kingdom. In France, BETC, Havas Paris and Ekino/Fullsix agencies were the

major contributors. The United Kingdom conﬁrmed its recovery driven by the

excellent performance from the media businesses, and the continued

dynamism of the healthcare communications business at Havas Lynx and the

creative business at Havas London. Italy continued to show steady growth,

while performances from the other European countries remained mixed.

Latin America conﬁrmed its recovery, driven by the media businesses.

Asia-Pacific returned a slightly negative performance, penalized by

Australia, while China and India both reported sustained growth.

Havas pursued its policy of targeted acquisitions, completing several

acquisitions in 2018:

3 Catchi, the leading digital conversion rate optimization (CRO)

specialist across Australia and New Zealand;

3 Deekeling Arndt Advisors (DAA), a leading German communications

consultancy providing communicative support and political ﬂanking

of equity market transactions, reputation management and crisis

communications;

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13 13

3 Étoile Rouge, a communications agency dedicated to luxury and

lifestyle brands in France;

3 M&C consultancy, a UK-based specialist in healthcare market

access; and

3 Republica, the leading independent multicultural marketing agency

in the United States, based in Miami, Florida.

In addition, on December14, 2018, Havas Group entered into an agreement

to acquire a 51% interest in the largest Baltics-based communications

group, formed by the merger of Estonian-owned Idea Group and Lithuanian-

owned Publicum Group. The new combined entity will operate under the

name Havas Baltics and will represent the Havas Group in Estonia,

Lithuania and Latvia.

Major awards won by Havas:

In the fourth quarter of 2018, the Palau Pledge campaign, created by

Australian agency Host/Havas for the Palau Legacy Project, continued to

garner awards, notably at the D&AD Impact Awards and at the LIAA. In

2018, it became one of the most awarded campaigns worldwide.

Havas Group’s agencies won 6 awards at the LIAA.

At the Clio Health Awards, Havas Lynx took 5 awards, BETC Brazil was

awarded 1 Gold and Havas Republica, one of the agencies acquired by

Havas in 2018, carried off 1 Silver and 1 Bronze.

Several Havas agencies did well at the Epica Awards, taking home a total

of 23 awards.

At the Cristal Festival, Host/Havas was awarded the Grand Prix in the

Promo & Activation category, other agencies scooped a total of 35 awards

and Havas was, once again, named Advertising Network of the Year.

Adweek named Rosapark its International Agency of the Year.

Major account wins over the fourth quarter of 2018:

3 Healthcare communications: Havas Health & You: Novartis

Genentech, AbbVie, Chemocentryx and Sage Therapeutics;

3 Creative: Adidas, Henkel, Nestle, Savencia, Amway; and

3 Media: Puma, Reckitt, Correos, Caisse des dépôts, Gameloft.

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1.Earnings analysis: group and business segments

2018 FINANCIAL REPORT

1.3.4. GAMELOFT

(inmillions of euros)

Year ended December31,

2018 2017 % Change

% Change at

constant currency

% Change at

constantcurrency

and perimeter

Revenues 293 320 -8.3% -5.1% -5.1%

Income from operations 4 10 -60.4% -56.4% -56.4%

Restructuring charges (4) (1)

Charges related to share-based compensation plans 2 (5)

Other special items excluded from income from operations - -

EBITA 2 4 -55.8% -41.9% -41.9%

Revenues by geographic area

EMEA (Europe, the Middle East, Africa) 100 107

Asia Paciﬁc 73 89

North America 97 94

Latin America 23 30

293 320

Average Unique Users (inmillions)

Monthly Active Users (MAU) 98 128

Daily Active Users (DAU) 11 15

In 2018, Gameloft’s OTT revenues (sales of games on platforms such as

Apple, Google, Microsoft and Amazon) which represents 72% of Gameloft’s

total revenues, were up 2.1% at constant currency. This increase partially

offset the decline in the activity related to telecom operators, which is

structurally in decline due to the gradual replacement of traditional mobile

phones by smartphones, and the decrease in advertising sales. In 2018,

Gameloft’s revenues amounted to €293million, down 5.1% at constant

currency and perimeter.

Gameloft released two new games on smartphones in 2018: Dungeon

Hunter Champions and Asphalt 9: Legends, the latest opus of the No.1

mobile racing franchise that has recorded more than 35million downloads

since its launch on July26,2018 and was among Gameloft’s Top 5

bestselling games in 2018.

Gameloft’s catalogue (63% of 2018 revenues generated by its own

franchises), including its bestselling games such as Disney Magic

Kingdoms, Marchof Empires, Dragon Mania Legends, Asphalt 8: Airborne

and Asphalt 9: Legends, which accounted for 47% of Gameloft’s total

revenues in 2018, is particularly resilient.

In 2018, Gameloft’s income from operations amounted to €4million, and

EBITA amounted to €2million, including restructuring charges for €4million.

Gameloft and the LEGO Group announced the release in 2019 of a LEGO

game that will bring 40 years of LEGO miniﬁgure history and universes to

mobiles.

In December2018, Gameloft acquired FreshPlanet, the multi-award-winning

maker of the SongPop mobile games with more than 100million downloads.

In line with Gameloft’s philosophy to provide the best gaming experiences

to players of all ages and countries, this acquisition is a new milestone in

the company’s expansion strategy.

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1.Earnings analysis: group and business segments

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13 13

1.3.5. VIVENDI VILLAGE

(inmillions of euros)

Year ended December31,

2018 2017 % Change

% Change at

constantcurrency

% Change at

constantcurrency

andperimeter (a)

Revenues 123 109 +12.6% +13.1% +11.5%

Of which Vivendi Ticketing 58 52 +9.9% +11.1% -4.0%

Live 34 18 +94.9% +94.9% +94.9%

Income from operations (9) (6)

Restructuring charges (2) (2)

Income/(charges) related to share-based

compensation plans - -

Other special items excluded from income

from operations 2 (10)

EBITA (9) (18)

(a) Constant perimeter reﬂects the impacts of the acquisition of Paylogic (April16, 2018) and the sale of Radionomy (August17, 2017).

In 2018, Vivendi Village’s revenues amounted to €123million, an increase of

12.6% (+ 11.5% at constant currency and perimeter) compared to 2017.

Ticketing revenues amounted to €58million, up 9.9% compared to 2017

following the acquisition of Paylogic in April2018. Vivendi Village now has

a ticketing network with a strong presence in Continental Europe, the

United Kingdom and the United States, which had a record year with more

than 20million tickets sold.

Live activities, which encompass Olympia Production, festivals and venues in

France and Africa, recorded revenues of €34million, an increase of 94.9%

compared to 2017. Olympia Production recorded very strong growth with

more than 1,100 shows. It has a diversiﬁed portfolio of 32artists (music and

comedy) and four regional festivals in France (compared to two in 2017),

including Garorock, one of the country’s largest festivals with an attendance

of 145,000 people, acquired at the end of 2018. L’Olympia enjoyed a very

good year with 280shows, its level of activity prior to November2015.

In Africa, CanalOlympia, with 11 cinema and entertainment venues in eight

countries at the end of 2018, is meeting the challenge of strong demand for

cinema: its average attendance rate (24%) is almost double that of France.

Vivendi Sports organized its ﬁrst two events in 2018, le Tour de l’Espoir (a

cycling race in Cameroon) and Jab&Vibes (a boxing competition in Senegal).

Vivendi Village’s income from operations amounted to a loss of €9million in

2018, compared to a loss of €6million in 2017. Excluding the investments in

Africa, income from operations was positive at €2million. EBITA amounted

to a loss of €9million, compared to a loss of €18million in 2017.

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1.Earnings analysis: group and business segments

2018 FINANCIAL REPORT

1.3.6. NEW INITIATIVES

In 2018, New Initiatives, which includes Dailymotion, Vivendi Content and GVA,

recorded revenues amounting to €66million, up 30.5% compared to 2017.

GVA is deploying a ﬁbernetwork on the African continent, enabling major

cities to benefit from very high-speed Internet services. In 2018, GVA

opened two locations in Gabon and Togo, and acquired a business in Congo.

GVA is planning to make signiﬁcant investments, which will weigh on its

proﬁtability for the ﬁrst few years of operation.

Since June2017, Dailymotion has focused on premium content and has

improved its video base. Its audience for premium content has almost

doubled in the space of a year, reaching 2.2billion views at the end of 2018,

compared to 1.2billion at the end of 2017. This strategy has enabled

Dailymotion to enter into many partnerships with leading global publishers.

In total, more than 300 agreements were concluded in 2018, including 100

in the United States and dozens in territories where Dailymotion previously

had little presence (Korea, Vietnam, India). The audience in these new

countries has grown signiﬁcantly.

In 2018, Dailymotion also reviewed its advertising ecosystem. The company

created its own programmatic platform and content monetization system

(live or programmatic). It is currently working on new formats.

New Initiatives’ income from operations amounted to a loss of €79million,

compared to a loss of €87million in 2017. New Initiatives’ EBITA amounted

to a loss of €99million, compared to a loss of €92million in 2017.

1.3.7. CORPORATE

Corporate’s income from operations was a net charge of €110million,

compared to a net charge of €101million in 2017, an unfavorable change of

€9million, primarily due to the increase in legal fees, notably relating to

ongoing litigation and non-recurring positive items recorded in 2017.

Corporate’s EBITA was a net charge of €123million, compared to a net

charge of €97million in 2017, an unfavorable change of €26million mainly

relating to the change in income from operations and an increase in

restructuring charges.

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2.Liquidity and capital resources

2018 FINANCIAL REPORT

2.Liquidity and capital resources

2.1. Liquidity and equity portfolio

PRELIMINARY COMMENTS

3 The “Net Cash Position” and the “Financial Net Debt”, non-GAAP measures, should be considered in addition to, and not as a substitute for,

GAAP measures presented in the Consolidated Statement of Financial Position, as well as any other measure of indebtedness reported in

accordance with GAAP. Vivendi considers these to be relevant indicators of the group’s liquidity and capital resources. Vivendi Management

uses these indicators for reporting, management and planning purposes.

3 The Net Cash Position (and the Financial Net Debt) are calculated as follows:

i. cash and cash equivalents, as reported in the Consolidated Statement of Financial Position, corresponding to cash in banks, money market

funds and bond funds, which satisfy ANC and AMF position expectations expressed in November2018, and other highly liquid short-term

investments with initial maturities of generally three months or less, as required by IAS 7 (please refer to Note1.3.5.11 to the

Consolidated Financial Statements for the year ended December31, 2018);

ii. cash management ﬁnancial assets, included in the Consolidated Statement of Financial Position under “ﬁnancial assets”, relating to

ﬁnancial investments, that do not satisfy the criteria for classiﬁcation as cash equivalents set forth in IAS7, and, with respect to money

market funds, which satisfy ANC and AMF position expectations expressed in November2018; and

iii. derivative ﬁnancial instruments, net (assets and liabilities) where the underlying instruments are Financial Net Debt items, as well as cash

deposits securing borrowings included in the Consolidated Statement of Financial Position under “ﬁnancial assets”;

less:

iv. value of borrowings at amortized cost.

3 For a detailed description, please refer to Note14 “Cash position” and to Note19 “Borrowings and other ﬁnancial liabilities and ﬁnancial risk

management” to the Consolidated Financial Statements for the year ended December31, 2018.

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2.Liquidity and capital resources

2018 FINANCIAL REPORT

2.1.1. CHANGES IN LIQUIDITY

(inmillions of euros)

Cash and cash

equivalents

Borrowings at

amortized cost and

other ﬁnancial items (a)

Net Cash Position/

(Financial Net Debt)

(Financial Net Debt) as of December31, 2017 1,951 (4,291) (2,340)

(Outﬂows)/inﬂows:

Operating activities 1,187 - 1,187

Investing activities 1,286 520 1,806

Financing activities (610) 120 (490)

Foreign currency translation adjustments (21) 34 13

Net Cash Position as of December31, 2018 3,793 (3,617) 176

(a) “Other ﬁnancial items” include cash management ﬁnancial assets and derivative ﬁnancial instruments relating to the interest rate and foreign currency risk management

(assets and liabilities).

As of December31, 2018, Vivendi’s Net Cash Position amounted to

€176million, compared to a Financial Net Debt of -€2,340million as of

December31, 2017, an increase of €2,516million. This favorable change

was mainly attributable to the following items:

3 a €1,580million inflow as part of the sale of Vivendi’s 27.27%

interest in Ubisoft at a price of €66 per share for an aggregate

consideration of €2.0billion (including €1,511million received on

March23, 2018, €69million received on October3, 2018 and

€429million still to be received under the forward sale of the

remainder of its interest which is expected to occur on March5,

2019; please refer to Note2.3 to the Consolidated Financial

Statements for the year ended December31, 2018);

3 a €373million inflow as part of the sale on the market of the

Telefonica shares held by Vivendi in Novemberand December2018;

3 a €267million inﬂow received on July12, 2018 as part of the sale of

Vivendi’s interest in Fnac Darty (please refer to Note2.4 to the

Consolidated Financial Statements for the year ended December31,

2018); and

3 net cash provided by operating activities (after income tax paid) for

€1,187million.

These inflows were partially offset by the dividend paid by Vivendi on

April24, 2018 with respect to fiscal year 2017 for €568million and net

capital expenditures for €341million.

During the ﬁrst quarter of 2019, the following events will impact the cash

position:

3 on January31, 2019, Vivendi completed the acquisition of 100% of

Editis’s share capital, representing an €833million outﬂow, which

includes the repayment of Editis’s debt (please refer to Note2.2 to

the Consolidated Financial Statements for the year ended

December31, 2018);

3 on February11, 2019, pursuant to a decision of the Versailles

Administrative Court of Appeal regarding the use of foreign tax

receivables by Vivendi for the payment of the tax income in respect

of the fiscal year ended December31, 2012, Vivendi received a

request for repayment from the tax authorities in the amount of

€239million. Vivendi has 30 days to satisfy this request (please

refer to Note6.1 to the Consolidated Financial Statements for the

year ended December31, 2018); and

3 on March5, 2019, Vivendi will receive €429million under the

forward sale of its remaining interest in Ubisoft (please refer to

Note2.3 to the Consolidated Financial Statements for the year

ended December31, 2018).

2.1.2. EQUITY PORTFOLIO

As of December31, 2018, Vivendi held a portfolio of listed non-controlling

equity interests, including a receivable of €429million on the forward sale

of its remaining interest in Ubisoft (please refer to Note2.3 to the

Consolidated Financial Statements for the year ended December31, 2018).

As of December31,2018, the aggregate market value of this portfolio was

approximately €3.9billion (before taxes), compared to €6.4billion as of

December31, 2017 (which notably included the entire interest in Ubisoft, as

well as the interests in Telefonica and Fnac Darty): please refer to Notes11

and 12 to the Consolidated Financial Statements for the year ended

December31, 2018.

As of February11, 2019 (the date of Vivendi’s Management Board meeting

that approved the Consolidated Financial Statements for the year ended

December31, 2018), the value of this portfolio was approximately

€4.0billion (before taxes).

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2018 FINANCIAL REPORT

2.2. Cash ﬂow from operations analysis

PRELIMINARY COMMENT

“Cash ﬂow from operations” (CFFO) and “cash ﬂow from operations after interest and taxes” (CFAIT), non-GAAP measures, should be considered in

addition to, and not as substitutes for, other GAAP measures of operating and ﬁnancial performance as presented in the Consolidated Financial

Statements and the related notesor as described in this Financial Report. Vivendi considers these to be relevant indicators of the group’s operating and

ﬁnancial performance.

(inmillions of euros)

Year ended December31,

2018 2017 % Change

Revenues 13,932 12,518 +11.3%

Operating expenses excluding depreciation and amortization (12,192) (11,141) -9.4%

1,740 1,377 +26.3%

Restructuring charges paid (106) (73) -45.7%

Content investments, net (137) (317) +56.8%

Of which payments to artists and repertoire owners, net at UMG:

Payments (933) (834) -11.8%

Recoupment and other 812 692 +17.4%

(121) (142) +15.4%

Of which ﬁlm and television rights, net at Canal+ Group:

Acquisition paid (508) (615) +17.4%

Consumption 670 708 -5.4%

162 93 +73.4%

Of which sports rights, net at Canal+ Group:

Acquisition paid (906) (911) +0.6%

Consumption 865 941 -8.1%

(41) 30 na

Neutralization of change in provisions included in operating expenses (29) (30) +5.6%

Other cash operating items 9 (3) na

Other changes in net working capital (28) 265 na

Net cash provided by/(used for) operating activities before income tax paid 1,449 1,219 +18.8%

Dividends received from equity afﬁliates and unconsolidated companies 18 29 -39.5%

Capital expenditures, net (capex, net) (341) (259) -31.5%

Cash ﬂow from operations (CFFO) 1,126 989 +13.8%

Interest paid, net (47) (53) +12.0%

Other cash items related to ﬁnancial activities 5 (61) na

Income tax (paid)/received, net (262) 471 na

Cash ﬂow from operations after interest and income tax paid (CFAIT) 822 1,346 -39.0%

na: not applicable.

2.2.1. CHANGES IN CASH FLOW

FROM OPERATIONS(CFFO)

In 2018, cash ﬂow from operations (CFFO) generated by the group’s business

segments amounted to €1,126million (compared to €989million in 2017), a

€137million improvement. These amounts included capital expenditures

(net) generated by the group’s business segments for €341million (compared

to €259million in 2017), a deterioration of -€82million mainly at Universal

Music Group (-€47million) and Canal+ Group (-€22million). In 2018, cash

ﬂow from operations (CFFO) generated by the group’s business segments,

before capital expenditures (net), amounted to €1,467million (compared to

€1,248million in 2017), an improvement of €219million. This change mainly

resulted from the strong operating performance of Universal Music Group

(+€239million), primarily driven by the growth in subscription streaming

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2018 FINANCIAL REPORT

services, as well as Canal+ Group’s growth (+€43million), partially offset by

the decline of Havas (-€61million), which resulted from the consolidation of

Havas as from the second half of 2017. Havas’s change in working capital is

usually unfavorable in the first half, due to the seasonality of cash

generation. For the second half of 2018, cash ﬂow from operations (CFFO)

generated by Havas, before capital expenditures (net), amounted to

€356million, compared to €329million for the second half of 2017.

2.2.2. CASH FLOW FROM OPERATIONS (CFFO) BY BUSINESS SEGMENT

(inmillions of euros)

Year ended December31,

2018 2017 % Change

Universal Music Group 838 646 +29.8%

Canal+ Group 259 238 +8.7%

Havas 230 308 na

Gameloft 1 7 na

Vivendi Village (3) (20)

New Initiatives (82) (90)

Corporate (117) (100)

Cash ﬂow from operations (CFFO) 1,126 989 +13.8%

na: not applicable.

2.2.3. CHANGES IN CASH FLOW FROM OPERATIONS

AFTER INTEREST AND INCOME TAX PAID (CFAIT)

In 2018, cash flow from operations after interest and income tax paid

(CFAIT) was an €822million net inﬂow (compared to €1,346million in 2017),

a decrease of €524million, primarily resulting from the unfavorable change

in cash ﬂow relating to income taxes.

In 2018, cash ﬂow relating to income taxes was a €262million net outﬂow

(compared to a €471million net inﬂow in 2017). In 2017, it notably included

(i) a €346million inﬂow received on April18, 2017 as part of the litigation

settlement relating to the tax credits utilized by Vivendi in ﬁscal year 2012,

(ii) a €223million inﬂow relating to the refund to VivendiSA of the amounts

paid with respect to the 3% tax on dividend distributions following the

decision of the French Constitutional Council, dated October6, 2017, where

it was ruled that the tax contribution was unconstitutional, as well as (iii) a

refund of tax installments paid in 2016 under the French Tax Group System

for ﬁscal year 2016 (€136million), and (iv) a €10million inﬂow at Universal

Music Group in the United Kingdom, relating to a litigation settlement.

In 2018, the financial activities generated a €42million net outflow

(compared to €114million in 2017). In 2018, they mainly included net

interest paid (-€47million, compared to -€53million in 2017). In addition,

cash generated by foreign exchange risk hedging instruments was a

+€13million inﬂow, compared to a -€52million outﬂow in 2017, notably due

to the depreciation of the dollar(USD) against the euro.

2.2.4. RECONCILIATION OF CFAIT TO NET CASH PROVIDED BY OPERATING ACTIVITIES

(inmillions of euros)

Year ended December31,

2018 2017

Cash ﬂow from operations after interest and income tax paid (CFAIT) 822 1,346

Adjustments

Capital expenditures, net (capex, net) 341 259

Dividends received from equity afﬁliates and unconsolidated companies (18) (29)

Interest paid, net 47 53

Other cash items related to ﬁnancial activities (5) 61

Net cash provided by operating activities (a) 1,187 1,690

(a) As presented in the Consolidated Statement of Cash Flows.

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2018 FINANCIAL REPORT

2.3. Analysis of investing and ﬁnancing activities

2.3.1. INVESTING ACTIVITIES

(inmillions of euros)

Refer to Notes

to the Consolidated

Financial Statements

Year ended

December31, 2018

Financial investments

Acquisition of cash management ﬁnancial assets

14 (520)

Other (174)

Total ﬁnancial investments (694)

Financial divestments

Sale of Ubisoft shares

2.3 1,580

Sale of Telefonica shares

12 373

Sale of Fnac Darty shares

2.4 267

Redemption of the balance of the “new ORAN 1” issued by Banijay Group Holding

11.1 25

Other 58

Total ﬁnancial divestments 2,303

Dividends received from equity afﬁliates and unconsolidated companies 18

Capital expenditures, net

3 (341)

Net cash provided by/(used for) investing activities (a) 1,286

(a) As presented in the Consolidated Statement of Cash Flows.

2.3.2. FINANCING ACTIVITIES

(inmillions of euros)

Refer to Notes

to the Consolidated

Financial Statements

Year ended

December31, 2018

Transactions with shareowners

Distribution to VivendiSA’s shareowners

15 (568)

Capital increase subscribed by employees as part of the Stock Purchase Plan

18 100

Exercise of stock options by executive management and employees

18 89

Dividends paid by consolidated companies to their non-controlling interests (47)

Other (15)

Total transactions with shareowners (441)

Transactions on borrowings and other ﬁnancial liabilities

Redemption of bonds

19 (100)

Interest paid, net

5 (47)

Other (22)

Total transactions on borrowings and other ﬁnancial liabilities (169)

Net cash provided by/(used for) ﬁnancing activities (a) (610)

(a) As presented in the Consolidated Statement of Cash Flows.

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3.Outlook

2018 FINANCIAL REPORT

3.Outlook

Dividend

Vivendi’s Supervisory Board approved the Management Board’s proposal to

pay an ordinary dividend of €0.50 per share with respect to ﬁscal year 2018,

which will be submitted to the Annual General Shareholders’ Meeting to be

held on April15, 2019 for approval. This dividend represents an increase of

11.1% compared to the dividend distributed with respect to ﬁscal year 2017

and a return of approximately 2.3%. The coupon detachment date would be

April16, 2019 and the payment date April18, 2019.

Outlook

Vivendi is conﬁdent in the evolution of its main businesses in 2019. As regards Canal+ Group, after a strong improvement in its proﬁtability in 2018, it will

continue its improvement efforts and its 2019 proﬁtability is expected to be even better than it was in 2018.

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5.Other Disclaimers

2018 FINANCIAL REPORT

4.Forward-Looking Statements

Cautionary note

This Financial Report contains forward-looking statements with respect to Vivendi’s ﬁnancial condition, results of operations, business, strategy, plans and

outlook of Vivendi, including the impact of certain transactions, the payment of dividends and distributions as well as share repurchases. Although Vivendi

believes that such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance. Actual

results may differ materially from the forward-looking statements as a result of a numberof risks and uncertainties, many of which are outside Vivendi’s

control, including, but not limited to, the risks related to antitrust and other regulatory approvals, and to any other approvals which may be required in

connection with certain transactions, as well as the risks described in the documents of the group ﬁled by Vivendi with the Autorité des marchés ﬁnanciers

(the “AMF”) (the French securities regulator), and in its press releases, if any, which are also available in English on Vivendi’s website (www.vivendi.com).

Accordingly, readers are cautioned against relying on such forward-looking statements. These forward-looking statements are made as of the date of this

Financial Report. Vivendi disclaims any intention or obligation to provide, update or revise any forward-looking statements, whether as a result of new

information, future events or otherwise.

5.Other Disclaimers

Unsponsored ADRs

Vivendi does not sponsor any American Depositary Receipt (ADR) facility in respect of its shares. Any ADR facility currently in existence is “unsponsored” and

has no ties whatsoever to Vivendi. Vivendi disclaims any liability in respect of any such facility.

Translation

This Financial Report is an English translation of the French version of the report and is provided solely for the convenience of English-speaking readers. This

translation is qualified in its entirety by the French version, which is available on the company’s website (www.vivendi.com). In the event of any

inconsistencies between the French version of this Financial Report and the English translation, the French version will prevail.

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Quarterly revenues by business segment

APPENDIX TO THE FINANCIAL REPORT

II – Appendix to the Financial Report

Quarterly revenues by business segment

(inmillions of euros)

2018

Three months ended

March31,

Three months ended

June30,

Three months ended

September30,

Three months ended

December31,

Universal Music Group 1,222 1,406 1,495 1,900

Canal+ Group 1,298 1,277 1,247 1,344

Havas 506 567 553 693

Gameloft 70 71 74 78

Vivendi Village 23 29 36 35

New Initiatives 16 16 15 19

Elimination of intersegment transactions (11) (14) (19) (14)

Revenues 3,124 3,352 3,401 4,055

(inmillions of euros)

2017

Three months ended

March31,

Three months ended

June30,

Three months ended

September30,

Three months ended

December31,

Universal Music Group 1,284 1,382 1,319 1,688

Canal+ Group 1,272 1,283 1,252 1,391

Havas (a) - - 552 659

Gameloft 84 77 78 81

Vivendi Village 26 30 25 28

New Initiatives 10 13 11 17

Elimination of intersegment transactions (3) (3) (16) (22)

Revenues 2,673 2,782 3,221 3,842

(a) As a reminder, since July3, 2017, Vivendi has fully consolidated Havas.

Note: As from January1, 2018, Vivendi applied the new accounting standard IFRS15 – Revenues from Contracts with Customers (please refer to Notes1

and 28 to the Consolidated Financial Statements for the year ended December31, 2018).

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Statutory Auditors’ report on the Consolidated Financial Statements

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

III – Audited Consolidated Financial Statements

fortheyear ended December31, 2018

PRELIMINARY COMMENT

In 2018, Vivendi applied two new accounting standards:

3 IFRS15 – Revenues from Contracts with Customers: in accordance with IFRS15, Vivendi applied this change of accounting standard to 2017

revenues, thereby ensuring comparability of the data relative to each period of 2018 and 2017 contained in this report; and

3 IFRS9 – Financial Instruments: in accordance with IFRS9, Vivendi applied this change of accounting standard to the 2018 Statement of

Earnings and Statement of Comprehensive Income and restated its opening balance sheet as of January1, 2018; therefore, the data relative

to 2017 contained in this report is not comparable.

For a detailed description, please refer to Notes1 and 28 to the Consolidated Financial Statements for the year ended December31, 2018.

Statutory Auditors’ report on the Consolidated Financial Statements

To the Annual General Meeting of Vivendi,

OPINION

In compliance with the engagement entrusted to us by your Annual General Meetings, we have audited the accompanying consolidated ﬁnancial statements

of Vivendi for the year ended December31, 2018.

In our opinion, the consolidated ﬁnancial statements give a true and fair view of the assets and liabilities and of the ﬁnancial position of the group as at

December31, 2018 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by

the European Union.

The audit opinion expressed above is consistent with our report to the Audit Committee.

BASIS FOR OPINION

Audit Framework

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufﬁcient

and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial

Statements sectionof our report.

Independance

We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January1, 2018 to the date of our report

and speciﬁcally we did not provide any prohibited non-audit services referred to in Article5 (1) of Regulation (EU) No.537/2014 or in the French Code of Ethics

for Statutory Auditors (Code de déontologie de la profession de commissaire aux comptes).

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Statutory Auditors’ report on the Consolidated Financial Statements

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

OBSERVATIONS

Without qualifying our conclusion above, we draw your attention to Sections1.1.1 and 1.1.2 of the notesto the consolidated ﬁnancial statements, which

describe the changes in accounting methods relating to the mandatory application as from January1, 2018 of standards IFRS9 – Financial instruments and

IFRS15 – Revenue from contracts with customers.

In particular, the cumulated unrealized capital gain as at December31, 2017 relating to Vivendi’s interest in Ubisoft (€1,160m) was recorded as retained

earnings as of January1, 2018 as part of the ﬁrst-time application of accounting standard IFRS9. In accordance with IAS39 which was applicable until

December31, 2017, it would have been reported to proﬁt or loss as part of the sale that occurred during the period.

JUSTIFICATION OF ASSESSMENTS – KEY AUDIT MATTERS

In accordance with the requirements of ArticlesL.823-9 and R.823-7 of the French Commercial Code (Code de commerce) relating to the justiﬁcation of our

assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most signiﬁcance

in our audit of the consolidated ﬁnancial statements of the current period, as well as how we addressed those risks.

These matters were addressed in the context of our audit of the consolidated ﬁnancial statements as a whole, and in forming our opinion thereon, and we do

not provide a separate opinion on speciﬁc items of the consolidated ﬁnancial statements.

Valuation of goodwill (notes1.3.5.2, 1.3.5.7 and 9 to the consolidated ﬁnancial statements)

Key audit matter Our response

As at December31, 2018, goodwill is recorded in the balance sheet for a net

carrying amount of €12,438m, for a total balance sheet of €34,403m. It has

been allocated to the cash generating units (CGUs) or, where applicable,

groups of cash-generating units, of the activities into which the companies

acquired have been integrated.

Each year, management ensures that the carrying amount of the goodwill

does not exceed its recoverable amount. The impairment test methods thus

implemented by management are described in the notesto the consolidated

accounts; they involve a signiﬁcant amount of judgements and assumptions,

notably concerning:

3 Future cash ﬂow forecasts;

3 Perpetual growth rates used for projected ﬂows;

3 Discount rates (WACC) applied to estimated cash ﬂows;

3 The selection of sample companies included among the transaction

or stock market comparables.

Consequently, any variation in these assumptions may have a significant

impact on the recoverable amount of the goodwill and necessitate the

recognition of an impairment loss, where applicable.

We consider the valuation of goodwill to be a key audit matter due to (i) its

materiality in the group’s accounts, (ii) the judgements and assumptions

required to determine its recoverable amount.

We analyzed the compliance of the methods adopted by your company with

the accounting standards in force, in particular concerning the determina-

tion of the cash generating units (CGUs) and the methods used to estimate

the recoverable amount.

We obtained the impairment tests for each CGU or group of CGUs and

examined the determination of the value of each CGU. We paid particular

attention to those where the carrying amount is close to the estimated

recoverable amount, those where the historical performance showed

differences in relation to the forecasts, and those operating in volatile

economic environments.

We examined the competence of the experts appointed by your company

for the valuation of certain CGUs or groups of CGUs. We took noteof the

key assumptions used for all the CGUs or groups of CGUs and:

3 compared the business forecasts underpinning the determination of

cash flows with the information available, including the market

prospects and past achievements, and in relation to management’s

latest estimates (assumptions, budgets and strategic plans where

applicable);

3 compared the perpetual growth rates used for the projected ﬂows

with market analyses and the consensus of the main professionals

concerned;

3 compared the discount rates used (WACC) with our internal

databases, assisted by ﬁnancial valuation specialists included in our

teams;

3 examined the selection of companies included among the

transaction or stock market comparables in order to compare it with

the relevant samples according to market analysts and our

knowledge of the market.

We obtained and reviewed the sensitivity analyses performed by mana-

gement, which we compared with our own calculations to assess what

level of variation in the assumptions would require the recognition of

goodwill impairment.

Lastly, we assessed the appropriateness of the information disclosed in the

notesto the consolidated ﬁnancial statements.

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Statutory Auditors’ report on the Consolidated Financial Statements

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Valuation of the Telecom Italia equity afﬁliate (notes1.3.2 and 11.2 to the consolidated ﬁnancial statements)

Key audit matter Our response

The value of the Telecom Italia equity-accounted investment amounts to

€3,130m after depreciation as at December31, 2018. At year-end, your

company ensures that it is not necessary to recognize an impairment loss for

this investment, by comparing its recoverable amount with the carrying

amount recorded in the group’s accounts.

The recoverable amount has been estimated using the usual valuation

methods (discounted cash ﬂows; market comparables model).

Your company used the services of an expert to assist you in the valuation of

the recoverable amount of this asset. Given the volatility observed in the

company’s stock market performance during the last financial year, we

consider that the assessment of this equity-accounted investment represents

a key audit matter.

We obtained the documentation relating to the valuation of the equity-

accounted value of Telecom Italia.

We examined the competence of the expert appointed by your company.

With the assistance of our valuation specialists:

3 we took noteof the models and key assumptions used to determine

discounted cash ﬂows (long-term growth rate, forecast margin rate,

discount rate), comparing these items with the information in our

internal databases;

3 we took noteof the market multiples used by the expert to assess

the relevance of the estimates resulting from the discounted cash

flows method, comparing these items with market practice and

data.

Finally, we assessed the appropriateness of the information disclosed in the

notesto the consolidated ﬁnancial statements.

Analysis of the disputes with the Mediaset group and with the former minority shareholders

(notes1.3.8, 1.5, 6.5, 16, 22.4 and 23 to the consolidated ﬁnancial statements)

Key audit matter Our response

The group’s activities are conducted in a constantly evolving environment and

within a complex international regulatory framework. The group is not only

subject to significant changes in the legislative environment and in the

application and interpretation of regulations, but it also has to contend with

litigation arising in the normal course of its business.

Your company exercises its judgement in assessing the risks run relative to

the disputes with the Mediaset group and with certain foreign institutional

investors, and recognizes a provision when the expense liable to result from

these disputes is probable and the amount can either be quantified or

estimated within a reasonable range.

We consider this subject to be a key audit matter given the amounts at stake

and the level of judgement required for the determination of the provisions.

We analyzed all the information made available to us, including, when

applicable, the written conﬁrmations from external advisors mandated by

your company, relating to (i) the dispute between your company and the

Mediaset group and its shareholders and (ii) the dispute between your

company and certain foreign institutional investors concerning alleged harm

resulting from the ﬁnancial communication of your company and its former

CEO between 2000 and 2002.

We examined the estimates of the risk performed by the management and

notably compared them with the information made available to us by the

Vivendi group’s advisers.

In addition, we analyzed the lawyers’ answers received in response to our

requests for conﬁrmation concerning these disputes.

Finally, we veriﬁed the information concerning these risks disclosed in the

notesto the consolidated accounts.

SPECIFIC VERIFICATIONS

As required by French legal and regulatory texts, we have also veriﬁed in accordance with professional standards applicable in France the information

pertaining to the group presented in the management report of the Management Board.

We have no matters to report as to its fair presentation and its consistency with the consolidated ﬁnancial statements.

We attest that the consolidated non-ﬁnancial statement provided for in ArticleL.225-102-1 of the French Commercial Code (Code de commerce) is included

in the group’s management report, it being speciﬁed that, in accordance with the provisions of ArticleL.823-10 of said Code, the information contained in this

statement has not been veriﬁed by us regarding its fairness or consistency with the consolidated ﬁnancial statements.

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Statutory Auditors’ report on the Consolidated Financial Statements

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Appointment of the Statutory Auditors

We were appointed as Statutory Auditors of Vivendi by the Annual General Meetings held on April25, 2017 for DELOITTE & ASSOCIÉS and on June15, 2000

for ERNST & YOUNG et Autres.

As at December31, 2018, DELOITTE ET ASSOCIÉS and ERNST & YOUNG et Autres were in the second year and nineteenth year of total uninterrupted

engagement respectively.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE CONSOLIDATED

FINANCIALSTATEMENTS

Management is responsible for the preparation and fair presentation of the consolidated ﬁnancial statements in accordance with International Financial

Reporting Standards as adopted by the European Union and for such internal control as management determines is necessary to enable the preparation of

consolidated ﬁnancial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated ﬁnancial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing,

as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or to cease

operations.

The Audit Committee is responsible for monitoring the ﬁnancial reporting process and the effectiveness of internal control and risks management systems

and where applicable, its internal audit, regarding the accounting and ﬁnancial reporting procedures.

The consolidated ﬁnancial statements were approved by your Management Board.

STATUTORY AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

Objectives and audit approach

Our role is to issue a report on the consolidated ﬁnancial statements. Our objective is to obtain reasonable assurance about whether the consolidated

ﬁnancial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error

and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the

basis of these consolidated ﬁnancial statements.

As speciﬁed in ArticleL.823-10-1 of the French Commercial Code (Code de commerce), our statutory audit does not include assurance on the viability of the

Company or the quality of management of the affairs of the Company.

As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditor exercises professional judgment

throughout the audit and furthermore:

3 Identiﬁes and assesses the risks of material misstatement of the consolidated ﬁnancial statements, whether due to fraud or error, designs and

performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufﬁcient and appropriate to provide a basis for his

opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

3 Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but

not for the purpose of expressing an opinion on the effectiveness of the internal control.

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Statutory Auditors’ report on the Consolidated Financial Statements

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

3 Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by

management in the consolidated ﬁnancial statements.

3 Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a

material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the Company’s ability to continue as a going concern.

This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or conditions may cause the

Company to cease to continue as a going concern. If the Statutory Auditor concludes that a material uncertainty exists, there is a requirement to draw

attention in the audit report to the related disclosures in the consolidated ﬁnancial statements or, if such disclosures are not provided or inadequate,

to modify the opinion expressed therein.

3 Evaluates the overall presentation of the consolidated ﬁnancial statements and assesses whether these statements represent the underlying

transactions and events in a manner that achieves fair presentation.

3 Obtains sufﬁcient appropriate audit evidence regarding the ﬁnancial information of the entities or business activities within the group to express an

opinion on the consolidated ﬁnancial statements. The Statutory Auditor is responsible for the direction, supervision and performance of the audit of

the consolidated ﬁnancial statements and for the opinion expressed on these consolidated ﬁnancial statements.

Report to the Audit Committee

We submit a report to the Audit Committee which includes in particular a description of the scope of the audit and the audit program implemented, as well

as the results of our audit. We also report signiﬁcant deﬁciencies, if any, in internal control regarding the accounting and ﬁnancial reporting procedures that

we have identiﬁed.

Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were of most signiﬁcance in the audit of the

consolidated ﬁnancial statements of the current period and which are therefore the key audit matters that we are required to describe in this report.

We also provide the Audit Committee with the declaration provided for in Article6 of Regulation (EU) No.537-2014, conﬁrming our independence within the

meaning of the rules applicable in France as set out in particular in ArticlesL.822-10 to L.822-14 of the French Commercial Code (Code de commerce) and in

the French Code of Ethics for Statutory Auditors (Code de déontologie de la profession de commissaire aux comptes). Where appropriate, we discuss with the

Audit Committee the risks that may reasonably be thought to bear on our independence, and the related safeguards.

Paris-La Défense, February14, 2019

The Statutory Auditors

French original signed by

DELOITTE & ASSOCIÉS ERNST & YOUNG et Autres

Jean Paul Séguret Jacques Pierres

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Consolidated Statement of Earnings

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Consolidated Statement of Earnings

Note

Year ended December31,

2018 2017

Revenues 4 13,932 12,518

Cost of revenues

4 (7,618) (7,302)

Selling, general and administrative expenses (5,022) (4,281)

Restructuring charges

3 (115) (88)

Impairment losses on intangible assets acquired through business combinations

3 (2) (2)

Reversal of reserve related to the Securities Class Action litigation in the United States

23 - 27

Income from equity afﬁliates – operational

11 7 146

Earnings before interest and income taxes (EBIT)

3 1,182 1,018

Income from equity afﬁliates – non-operational

11 122 -

Interest

5 (47) (53)

Income from investments 20 29

Other ﬁnancial income

5 418 43

Other ﬁnancial charges

5 (1,181) (143)

(790) (124)

Earnings before provision for income taxes 514 894

Provision for income taxes

6 (357) 355

Earnings from continuing operations 157 1,249

Earnings from discontinued operations - -

Earnings 157 1,249

Of which

Earnings attributable to VivendiSA shareowners 127 1,216

Non-controlling interests 30 33

Earnings attributable to VivendiSA shareowners per share – basic

7 0.10 0.97

Earnings attributable to VivendiSA shareowners per share – diluted

7 0.10 0.94

Inmillions of euros, except per share amounts, in euros.

The accompanying notesare an integral part of the Consolidated Financial Statements.

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Consolidated Statement of Comprehensive Income

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Consolidated Statement of Comprehensive Income

(inmillions of euros) Note

Year ended December31,

2018 2017

Earnings 157 1,249

Actuarial gains/(losses) related to employee deﬁned beneﬁt plans, net 31 29

Financial assets at fair value through other comprehensive income (233) na

Comprehensive income from equity afﬁliates, net (2) 14

Items not subsequently reclassiﬁed to proﬁt or loss (204) 43

Foreign currency translation adjustments 228 (848)

Unrealized gains/(losses), net 2 685

Comprehensive income from equity afﬁliates, net

11 (162) (46)

Other impacts, net 38 (40)

Items to be subsequently reclassiﬁed to proﬁt or loss 106 (249)

Charges and income directly recognized in equity

8 (98) (206)

TOTAL COMPREHENSIVE INCOME 59 1,043

Of which

Total comprehensive income attributable to VivendiSA shareowners 40 1,002

Total comprehensive income attributable to non-controlling interests 19 41

na: not applicable.

The accompanying notesare an integral part of the Consolidated Financial Statements.

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Consolidated Statement of Financial Position

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Consolidated Statement of Financial Position

(inmillions of euros) Note December31, 2018 January1, 2018 (a)

ASSETS

Goodwill

9 12,438 12,084

Non-current content assets

10 2,194 2,087

Other intangible assets 437 440

Property, plant and equipment 986 930

Investments in equity afﬁliates

11 3,418 4,526

Non-current ﬁnancial assets

12 2,102 4,502

Deferred tax assets

6 675 627

Non-current assets 22,250 25,196

Inventories 206 177

Current tax receivables

6 404 406

Current content assets

10 1,346 1,160

Trade accounts receivable and other

13 5,314 5,208

Current ﬁnancial assets

12 1,090 138

Cash and cash equivalents

14 3,793 1,951

Current assets 12,153 9,040

TOTAL ASSETS 34,403 34,236

EQUITY AND LIABILITIES

Share capital 7,184 7,128

Additional paid-in capital 4,475 4,341

Treasury shares (649) (670)

Retained earnings and other 6,303 6,835

VivendiSA shareowners’ equity 17,313 17,634

Non-controlling interests 221 222

Total equity

15 17,534 17,856

Non-current provisions

16 1,431 1,515

Long-term borrowings and other ﬁnancial liabilities

19 3,448 4,170

Deferred tax liabilities

6 753 589

Other non-current liabilities 248 226

Non-current liabilities 5,880 6,500

Current provisions

16 438 412

Short-term borrowings and other ﬁnancial liabilities

19 888 373

Trade accounts payable and other

13 9,572 9,019

Current tax payables

6 91 76

Current liabilities 10,989 9,880

Total liabilities 16,869 16,380

TOTAL EQUITY AND LIABILITIES 34,403 34,236

(a) In 2018, Vivendi applied two new accounting standards: IFRS15 – Revenues from Contracts with Customers and IFRS9 – Financial Instruments, with no signiﬁcant

impact on the Consolidated Statement of Financial Position (please refer to Note28 to the Consolidated Financial Statements for the year ended December31, 2018).

The accompanying notesare an integral part of the Consolidated Financial Statements.

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Consolidated Statement of Cash Flows

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Consolidated Statement of Cash Flows

(inmillions of euros) Note

Year ended December31,

2018 2017

Operating activities

EBIT

4 1,182 1,018

Adjustments

20.1 432 253

Content investments, net (137) (317)

Gross cash provided by operating activities before income tax paid 1,477 954

Other changes in net working capital (28) 265

Net cash provided by operating activities before income tax paid 1,449 1,219

Income tax (paid)/received, net

6.2 (262) 471

Net cash provided by operating activities 1,187 1,690

Investing activities

Capital expenditures

3 (351) (261)

Purchases of consolidated companies, after acquired cash

2 (116) (3,481)

Investments in equity afﬁliates

11 (3) (2)

Increase in ﬁnancial assets

12 (575) (202)

Investments (1,045) (3,946)

Proceeds from sales of property, plant, equipment and intangible assets

3 10 2

Proceeds from sales of consolidated companies, after divested cash 16 (5)

Disposal of equity afﬁliates 2 -

Decrease in ﬁnancial assets

12 2,285 981

Divestitures 2,313 978

Dividends received from equity afﬁliates

11 5 6

Dividends received from unconsolidated companies

12 13 23

Net cash provided by/(used for) investing activities 1,286 (2,939)

Financing activities

Net proceeds from issuance of common shares in connection with VivendiSA’s

share-based compensation plans

18 190 152

Sales/(purchases) of VivendiSA’s treasury shares

15 - (203)

Distributions to VivendiSA’s shareowners

15 (568) (499)

Other transactions with shareowners (16) (10)

Dividends paid by consolidated companies to their non-controlling interests (47) (40)

Transactions with shareowners (441) (600)

Setting up of long-term borrowings and increase in other long-term ﬁnancial liabilities

19 4 855

Principal payment on long-term borrowings and decrease in other long-term ﬁnancial liabilities (3) (8)

Principal payment on short-term borrowings

19 (193) (1,024)

Other changes in short-term borrowings and other ﬁnancial liabilities

19 65 64

Interest paid, net

5 (47) (53)

Other cash items related to ﬁnancial activities 5 (61)

Transactions on borrowings and other ﬁnancial liabilities (169) (227)

Net cash provided by/(used for) ﬁnancing activities (610) (827)

Foreign currency translation adjustments of continuing operations (21) (45)

Change in cash and cash equivalents 1,842 (2,121)

Cash and cash equivalents

At beginning of the period

14 1,951 4,072

At end of the period

14 3,793 1,951

The accompanying notesare an integral part of the Consolidated Financial Statements.

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Consolidated Statements of Changes in Equity

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Consolidated Statements of Changes in Equity

YEAR ENDED DECEMBER31, 2018

(inmillions of euros, except numberof shares)

Note

Capital Retained earnings and other

Total

equity

Common shares

Additional

paid-in

capital

Treasury

shares Subtotal

Retained

earnings

Other

comprehensive

income Subtotal

Number

ofshares

(inthousands)

capital

BALANCE AS OF

DECEMBER31, 2017 – RESTATED 1,296,059 7,128 4,341 (670) 10,799 6,537 530 7,067 17,866

Attributable to VivendiSA shareowners 1,296,059 7,128 4,341 (670) 10,799 6,294 551 6,845 17,644

Attributable to non-controlling interests - - - - - 243 (21) 222 222

Restatements related to the application of IFRS9 - - - - - 1,342 (1,338) 4 4

Attributable to VivendiSA shareowners - - - - - 1,342 (1,338) 4 4

Attributable to non-controlling interests - - - - - - - - -

Restatements related to the application

ofIFRS9 and IFRS15 by equity afﬁliates - - - - - (16) 2 (14) (14)

Attributable to VivendiSA shareowners - - - - - (16) 2 (14) (14)

Attributable to non-controlling interests - - - - - - - - -

BALANCE AS OF JANUARY1, 2018 1,296,059 7,128 4,341 (670) 10,799 7,863 (806) 7,057 17,856

Attributable to VivendiSA shareowners 1,296,059 7,128 4,341 (670) 10,799 7,620 (785) 6,835 17,634

Changes in VivendiSA’s ownership interest in its

subsidiaries that do not result in a loss of control - - - - - 243 (21) 222 222

Contributions by/distributions to VivendiSA

shareowners 10,175 56 134 21 211 (572) - (572) (361)

Dividend paid on April24, 2018 with respect

toﬁscal year 2017 (€0.45 per share)

15 - - - - - (568) - (568) (568)

Capital increase related to share-based

compensation plans

18 10,175 56 134 21 211 (4) - (4) 207

Of which employee Stock Purchase Plans

(July19, 2018) 5,186 28 72 - 100 - - - 100

exercice of stock-option by executive

management and employees 4,989 27 62 - 89 - - - 89

Changes in VivendiSA’s ownership interest

inits subsidiaries that do not result in a loss

ofcontrol - - - - - - - - -

Changes in equity attributable to Vivendi SA

shareowners (A) 10,175 56 134 21 211 (572) - (572) (361)

Contributions by/distributions to non-controlling

interests - - - - - (40) - (40) (40)

Changes in non-controlling interests that result

in a gain/(loss) of control - - - - - 20 - 20 20

Changes in equity attributable

tonon-controlling interests (B) - - - - - (20) - (20) (20)

Earnings - - - - - 157 - 157 157

Charges and income directly recognized in equity

8 - - - - - 38 (136) (98) (98)

Total comprehensive income (C) - - - - - 195 (136) 59 59

Total changes over the period (A+B+C) 10,175 56 134 21 211 (397) (136) (533) (322)

Attributable to VivendiSA shareowners 10,175 56 134 21 211 (399) (133) (532) (321)

Attributable to non-controlling interests - - - - - 2 (3) (1) (1)

BALANCE AS OF DECEMBER31, 2018 1,306,234 7,184 4,475 (649) 11,010 7,466 (942) 6,524 17,534

Attributable to VivendiSA shareowners 1,306,234 7,184 4,475 (649) 11,010 7,221 (918) 6,303 17,313

Attributable to non-controlling interests - - - - - 245 (24) 221 221

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Consolidated Statements of Changes in Equity

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

YEAR ENDED DECEMBER31, 2017

(inmillions of euros, except numberof shares)

Capital Retained earnings and other

Total

equity

Common shares

Additional

paid-in

capital

Treasury

shares Subtotal

Retained

earnings

Other

comprehensive

income Subtotal

Number

ofshares

(inthousands)

capital

BALANCE AS OF DECEMBER31, 2016 1,287,088 7,079 4,238 (473) 10,844 8,004 764 8,768 19,612

Attributable to VivendiSA shareowners 1,287,088 7,079 4,238 (473) 10,844 7,748 791 8,539 19,383

Attributable to non-controlling interests - - - - - 256 (27) 229 229

Contributions by/distributions to VivendiSA

shareowners 8,971 49 103 (197) (45) (481) - (481) (526)

Sales/(purchases) of treasury shares - - - (203) (203) - - - (203)

Dividend paid on May4, 2017 with respect

to ﬁscal year 2016 (€0.40 per share) - - - - - (499) - (499) (499)

Capital increase related to share-based compensation plans 8,971 49 103 6 158 18 - 18 176

Of which employee Stock Purchase Plans (July25, 2017) 4,160 23 45 - 68 - - - 68

exercise of stock-options by executive

management and employees 4,811 26 58 - 84 - - - 84

Changes in VivendiSA’s ownership interest related

toa combination of businesses under common control - - - - - (2,155) (65) (2,220) (2,220)

Acquisition of Havas - - - - - (2,155) (65) (2,220) (2,220)

Changes in VivendiSA’s ownership interest in its

subsidiaries that do not result in a loss of control - - - - - 4 - 4 4

Changes in equity attributable to Vivendi SA

shareowners (A) 8,971 49 103 (197) (45) (2,632) (65) (2,697) (2,742)

Contributions by/distributions to non-controlling interests - - - - - (34) - (34) (34)

Changes in non-controlling interests related to

acombination of businesses under common control - - - - - (4) (4) (8) (8)

Recognition of Havas’s non-controlling interests - - - - - 19 (4) 15 15

Changes in non-controlling interests that result in a gain/

(loss) of control - - - - - (5) - (5) (5)

Changes in equity attributable to non-controlling

interests (B) - - - - - (43) (4) (47) (47)

Earnings - - - - - 1,261 - 1,261 1,261

Charges and income directly recognized in equity - - - - - (41) (165) (206) (206)

Total comprehensive income (C) - - - - - 1,220 (165) 1,055 1,055

Total changes over the period (A+B+C) 8,971 49 103 (197) (45) (1,455) (234) (1,689) (1,734)

Attributable to VivendiSA shareowners 8,971 49 103 (197) (45) (1,442) (240) (1,682) (1,727)

Attributable to non-controlling interests - - - - - (13) 6 (7) (7)

BALANCE AS OF DECEMBER31, 2017 – AS PUBLISHED 1,296,059 7,128 4,341 (670) 10,799 6,549 530 7,079 17,878

Attributable to VivendiSA shareowners 1,296,059 7,128 4,341 (670) 10,799 6,306 551 6,857 17,656

Attributable to non-controlling interests - - - - - 243 (21) 222 222

Restatements related to the application of IFRS15

with retrospective effect - - - - - (12) - (12) (12)

Attributable to VivendiSA shareowners - - - - - (12) - (12) (12)

Attributable to non-controlling interests - - - - - - - - -

BALANCE AS OF DECEMBER31, 2017 – RESTATED 1,296,059 7,128 4,341 (670) 10,799 6,537 530 7,067 17,866

Attributable to VivendiSA shareowners 1,296,059 7,128 4,341 (670) 10,799 6,294 551 6,845 17,644

Attributable to non-controlling interests - - - - - 243 (21) 222 222

The accompanying notesare an integral part of the Consolidated Financial Statements.

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Notesto the Consolidated Financial Statements

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Notesto the Consolidated Financial Statements

NOTE1.

ACCOUNTING POLICIES AND VALUATION METHODS 236

1.1. Compliance with accounting standards 236

1.1.1. Financial Instruments 236

1.1.2. Revenues 237

1.2. Presentation of the Consolidated Financial Statements 237

1.2.1. Consolidated Statement of Earnings 237

1.2.2. Consolidated Statement of Cash Flows 237

1.2.3. Operating performance of each operating segment and the group 238

1.2.4. Consolidated Statement of Financial Position 239

1.3. Principles governing the preparation oftheConsolidated

Financial Statements 239

1.3.1. Use of estimates 239

1.3.2. Principles of consolidation 239

1.3.3. Foreign currency translation 240

1.3.4. Revenues and associated costs 240

1.3.5. Assets 243

1.3.6. Assets held for sale and discontinued operations 246

1.3.7. Financial liabilities 246

1.3.8. Other liabilities 247

1.3.9. Deferred taxes 248

1.3.10. Share-based compensation 249

1.4. Related parties 249

1.5. Contractual obligations and contingent assets and liabilities 249

1.6. New IFRSstandards and IFRIC interpretations that have been

published but are not yet effective 250

NOTE2.

MAJOR EVENTS 250

2.1. Opening of Universal Music Group’s share capital 250

2.2. Acquisition of Editis 250

2.3. Sale of interest in Ubisoft 250

2.4. Sale of interest in Fnac Darty 251

NOTE3.

SEGMENT DATA 252

3.1. Main aggregates of the Statement of Earnings

byoperatingsegment 252

3.2. Statement of Financial Position by operating segment 255

NOTE4.

EBIT 257

NOTE5.

FINANCIAL CHARGES AND INCOME 257

NOTE6.

INCOME TAXES 258

6.1. French Tax Group and Consolidated Global Proﬁt Tax Systems 258

6.2. Provision for income taxes and income tax paid

bygeographicarea 260

6.3. Effective tax rate 261

6.4. Deferred tax assets and liabilities 262

6.5. Tax litigation 264

NOTE7.

EARNINGS PER SHARE 265

NOTE8.

CHARGES AND INCOME DIRECTLY RECOGNIZED IN EQUITY 266

NOTE9.

GOODWILL 267

9.1. Changes in goodwill 267

9.2. Goodwill impairment test 267

NOTE10.

CONTENT ASSETS AND COMMITMENTS 271

10.1. Content assets 271

10.2. Contractual content commitments 272

NOTE11.

INVESTMENTS IN EQUITY AFFILIATES 273

11.1. Main investments in equity afﬁliates 273

11.2. Telecom Italia 274

NOTE12.

FINANCIAL ASSETS 276

NOTE13.

NET WORKING CAPITAL 278

NOTE14.

CASH POSITION 279

NOTE15.

EQUITY 280

NOTE16.

PROVISIONS 281

NOTE17.

EMPLOYEE BENEFITS 282

17.1. Analysis of expenses related to employee beneﬁt plans 282

17.2. Employee deﬁned beneﬁt plans 282

17.2.1. Assumptions used in the evaluation andsensitivity analysis 282

17.2.2. Analysis of the expense recorded and of the amount

ofbeneﬁtspaid 283

17.2.3. Analysis of net beneﬁt obligations with respect to pensions

andpost-retirement beneﬁts 284

17.2.4. Beneﬁts estimation and future payments 286

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Notesto the Consolidated Financial Statements

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE18.

SHARE-BASED COMPENSATION PLANS 287

18.1. Plans granted by Vivendi 287

18.1.1. Equity-settled instruments 287

18.1.2. Employee stock purchase and leveraged plans 288

18.2. Restricted and performance share plans granted by Havas 289

18.3. Restricted share plans granted byGameloft S.E. 290

18.4. Dailymotion’s long-term incentive plan 290

NOTE19.

BORROWINGS AND OTHER FINANCIAL LIABILITIES

ANDFINANCIAL RISK MANAGEMENT 290

19.1. Fair market value of borrowings and other ﬁnancial liabilities 291

19.2. Bonds 291

19.3. Bank credit facilities 291

19.4. Borrowings by maturity 292

19.5. Interest rate risk management 292

19.6. Foreign currency risk management 293

19.7. Derivative ﬁnancial instruments 295

19.8. Credit ratings 296

NOTE20.

CONSOLIDATED CASH FLOW STATEMENT 296

20.1. Adjustments 296

20.2. Investing and ﬁnancing activities withnocash impact 297

NOTE21.

RELATED PARTIES 297

21.1. Corporate Ofﬁcers 297

21.2. Bolloré Group 298

21.3. Other related-party transactions 299

NOTE22.

CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS 301

22.1. Contractual obligations and commercial commitments 301

22.2. Other commitments given or received relating to operations 302

22.3. Share purchase and sale commitments 302

22.4. Contingent assets and liabilities subsequent to given or received

commitments related tothedivestiture or acquisition of shares 303

22.5. Shareholders’ agreements 305

22.6. Collaterals and pledges 305

NOTE23.

LITIGATION 305

NOTE24.

MAJOR CONSOLIDATED ENTITIES OR ENTITIES ACCOUNTED

FOR UNDER THE EQUITY METHOD 311

NOTE25.

STATUTORY AUDITORS FEES 313

NOTE26.

AUDIT EXEMPTIONS FOR UMG SUBSIDIARIES

INTHEUNITEDKINGDOM 314

NOTE27.

SUBSEQUENT EVENTS 314

NOTE28.

RESTATEMENT OF COMPARATIVE INFORMATION 315

28.1. Restatements of the Consolidated Statement of Earnings 315

28.2. Restatements of the Consolidated Statement of Financial Position 317

28.3. Restatements of the Consolidated Financial Assets 318

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Vivendi is a limited liability company (société anonyme) incorporated under French law and subject to French commercial company law including the

French Commercial Code (Code de commerce). Vivendi was incorporated on December18, 1987, for a term of 99 years expiring on December17, 2086,

except in the event of an early dissolution or unless its term is extended. Its registered ofﬁce is located at 42 avenue de Friedland – 75008 Paris (France).

Vivendi is listed on Euronext Paris (Compartment A).

Vivendi is an integrated content, media and communications group. The company operates businesses throughout the media value chain, from talent

discovery to the creation, production and distribution of content. Universal Music Group is the world leader in music, engaged in recorded music, music

publishing and merchandising. It owns more than 50 labels covering all music genres. Canal+ Group is the leading pay-TV operator in France, also

engaged in Poland, Africa and Asia. Its subsidiary Studiocanal is a leading European player in the production, sale and distribution of movies and TV

series. Havas is one of the world’s largest global communications group covering all the communications disciplines: creativity, media expertise and

healthcare/wellness. Gameloft is one of the leading mobile game publishers in the world, with 2million games downloaded daily across all platforms.

Vivendi Village brings together Vivendi Ticketing (in Europe and the United States), the companies that own and manage all Paddington intellectual

property rights (except for the publishing rights), as well as live performance through Olympia Production, Festival Production and venues in Paris

(L’Olympia and Théâtre de L’Œuvre) and in Africa (CanalOlympia). New Initiatives groups together Dailymotion, one of the world’s largest video content

aggregation and distribution platforms, as well as Vivendi Content, the new content creation unit, and Group Vivendi Africa (GVA), a subsidiary

dedicated to the development of ultra-high-speed Internet service in Africa.

The Consolidated Financial Statements reﬂect the ﬁnancial and accounting situation of Vivendi and its subsidiaries (the “group”) together with interests

in equity afﬁliates. Amounts are reported in euros and all values are rounded to the nearestmillion.

On February11, 2019, at a meeting held at the headquarters of the company, the Management Board approved the Financial Report and the Audited

Consolidated Financial Statements for the year ended December31, 2018. They were reviewed by the Audit Committee at its meeting held on

February12, 2019 and the Supervisory Board at its meeting held on February14, 2019.

The Consolidated Financial Statements for the year ended December31, 2018 will be submitted to Vivendi’s shareholders for approval at the Annual

General Shareholders’ Meeting to be held on April17, 2019.

NOTE1. ACCOUNTING POLICIES AND VALUATION METHODS

1.1. COMPLIANCE WITH ACCOUNTING STANDARDS

The 2018 Consolidated Financial Statements of VivendiSA have been

prepared in accordance with International Financial Reporting Standards

(IFRS) as endorsed by the European Union (EU), and in accordance with

IFRSpublished by the International Accounting Standards Board (IASB) with

mandatory application as of December31, 2018.

Among the new IFRSstandards and IFRIC interpretations, which applied

from January1, 2018, the main subjects for Vivendi relate to financial

instruments and revenues.

1.1.1. Financial Instruments

IFRS9 – Financial instruments, which was issued by the IASB on July24,

2014, endorsed by the EU on November22, 2016 and published in the

Ofﬁcial Journal of the EU on November29, 2016, applies mandatorily from

January1, 2018. Vivendi applied this standard with retrospective effect

from January1, 2018.

IFRS9 applies to all ﬁnancial instruments and sets the principles governing

the classification and measurement of financial assets and liabilities,

impairment for credit risk on ﬁnancial assets (including impairment of trade

receivables) and hedge accounting.

The main impacts for Vivendi on the accounting of ﬁnancial instruments

relates to the classiﬁcation of ﬁnancial assets. Thus, from January1, 2018,

financial assets have been classified into the accounting categories

“ﬁnancial assets at amortized cost”, “ﬁnancial assets at fair value through

other comprehensive income” and “ﬁnancial assets at fair value through

proﬁt or loss”.

This classiﬁcation depends on the entity‘s business model for managing the

ﬁnancial assets and on contractual terms enabling to determine whether

the cash flows are solely payments of principal and interest (SPPI). The

ﬁnancial assets that contain an embedded derivative are considered in their

entirety to determine whether their cash ﬂows are SPPI.

For Vivendi, the main material impact of the application of this standard

relates to the election of the accounting classification for the equity

portfolio, considering the removal of the “available-for-sale” category under

which these interests were accounted for until December31,2017:

3 for certain equity securities, including Ubisoft, Vivendi elected to

classify such securities into the category “fair value through proﬁt or

loss”; the difference (€1,338million) between the carrying value as

of December31, 2017 and the purchase price was reclassiﬁed from

charges and income directly recognized in equity, to be subsequently

reclassiﬁed to proﬁt or loss, to retained earnings. In particular, as

part of the initial application of the IFRS9 accounting standard, the

cumulative unrealized capital gain as of December31, 2017,

relating to Vivendi’s interest in Ubisoft (€1,160million), was

recorded as retained earnings as of January1, 2018. Under IAS39,

which was applicable until December31, 2017, it would have been

reported to proﬁt or loss as part of the sale that occurred during the

ﬁrst half of 2018 (please refer to Note2.3); and

3 for other equity securities, Vivendi elected to classify such securities

into the category “fair value through other comprehensive income

not reclassified subsequently to profit or loss”; the difference

(-€197million) between the carrying value as of December31, 2017

and the purchase price was reclassiﬁed from charges and income

directly recognized in equity, to be subsequently reclassiﬁed to proﬁt

or loss, to charges and income directly recognized in equity, not to

be subsequently reclassiﬁed to proﬁt or loss.

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

The application of this standard has no other material impact on Vivendi‘s

Consolidated Financial Statements. On January1, 2018, consolidated equity

was adjusted to account for the cumulative impacts of the application of

IFRS9. For a description of these main impacts, please refer to Note28. The

comparative period in the notesto the consolidated ﬁnancial statements,

which were impacted by IFRS9, is presented as of January1, 2018, to the

extent applicable.

1.1.2. Revenues

IFRS15 – Revenue from Contracts with Customers, was issued by the IASB

on May28, 2014, endorsed by the EU on September22, 2016, published in

the Ofﬁcial Journal of the EU on October29, 2016, and applies mandatorily

from January1, 2018.

Vivendi applied IFRS15 retrospectively from January1, 2017. The 2017

Consolidated Financial Statements, mainly the Statement of Earnings, have

been adjusted for comparison purposes. The main impacts for Vivendi of the

application of IFRS15 are not material on Vivendi’s Consolidated Financial

Statements and are detailed in Note28.

IFRS15 sets forth new principles in terms of revenue recognition (notably

regarding the identiﬁcation of performance obligations and the allocation of

the transaction price for contracts involving multiple elements), and

changes criteria for analyzing agent and principal considerations, as well as

the inclusion of variable consideration. The main point of attention for

Vivendi relates to the accounting of intellectual property licensing revenues.

Intellectual property licensing

(musical and audiovisual works)

These licenses transfer to a customer either a right to use an entity’s

intellectual property as it exists at the point in time at which the license is

granted (static license), or a right to access an entity’s intellectual property

as it exists throughout the license period (dynamic license).

Revenues are accounted for when the performance obligation promised in

the contract is satisfied (static license) or over time as it is satisfied

(dynamic license), i.e., when the seller transfers the risks and rewards of the

right to use/access the intellectual property and the customer obtains

control of the use/access of that license. Consequently, revenues from

static licenses are recognized at the point in time when the license is

transferred, and the customer is able to use and beneﬁt from the license.

Revenues from dynamic licenses are accounted for over time, over the

license period from the date the customer is able to use and beneﬁt from

the license.

Analysis of the Agent/Principal relationship

in the sales transactions involving a third party

If the nature of the entity’s promise is a performance obligation to provide

the speciﬁed goods or services itself, then the entity acts on its own behalf

and it is “principal” in the sale’s transaction: it accounts for revenue for the

gross amount of consideration to which it expects to be entitled in

exchange for the goods or services provided, and the commission due to the

third-party as cost of revenues. If the entity arranges for a third-party to

provide the goods or services speciﬁed in the contract, then it recognizes as

revenues, the net amount of consideration to which it expects to be entitled

in exchange for the goods or services provided.

1.2. PRESENTATION

OFTHECONSOLIDATEDFINANCIALSTATEMENTS

1.2.1. Consolidated Statement of Earnings

The main line items presented in Vivendi’s Consolidated Statement of

Earnings are revenues, income from equity afﬁliates, interest, provision for

income taxes, net earnings from discontinued or held for sale operations,

and net earnings. The Consolidated Statement of Earnings presents a

subtotal of Earnings Before Interest and Tax (EBIT) equal to the difference

between charges and income (excluding those financing activities,

discontinued or held for sale operations, and income taxes).

The charges and income relating to ﬁnancing activities consist of interest,

income from investments, as well as other ﬁnancial charges and income as

deﬁned in paragraph 1.2.3 and presented in Note5.

Changes in presentation of the Consolidated

Statement of Earnings

To ensure the consistency of the presentation of Vivendi’s Consolidated

Statement of Earnings with the one prepared by Bolloré Group, which decided

to fully consolidate Vivendi into its Consolidated Financial Statements as from

April26, 2017, Vivendi made the following changes in presentation of its

Consolidated Statement of Earnings as from January1, 2017:

3 when the companies over which Vivendi exercises a significant

influence engage in operations that are similar in nature to the

group’s operations, income from equity affiliates is classified to

“Earnings Before Interest and Income Taxes” (EBIT); and

3 the impacts related to ﬁnancial investment operations, which were

previously reported in “other operating charges and income” in EBIT,

are reclassified to “other financial charges and income”. They

include capital gains or losses on the divestiture or depreciation of

equity afﬁliates and other ﬁnancial investments.

Moreover, the impacts of transactions with shareowners (except when

directly recognized in equity), in particular the €240million reversal of

reserve recorded as of December31, 2016 relating to the Liberty Media

litigation in the United States, continue to be recorded in EBIT.

In accordance with IAS1, Vivendi has applied these changes in presentation

to all periods previously published.

1.2.2. Consolidated Statement of Cash Flows

Net cash provided by operating activities

Net cash provided by operating activities is calculated using the indirect

method based on EBIT. EBIT is adjusted for non-cash items and changes in

net working capital. Net cash provided by operating activities excludes the

cash impact of ﬁnancial charges and income and net changes in working

capital related to property, plant and equipment, and intangible assets.

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Net cash used for investing activities

Net cash used for investing activities includes changes in net working

capital related to property, plant and equipment, and intangible assets as

well as cash from investments (particularly dividends received from equity

afﬁliates). It also includes any cash ﬂows arising from the gain or loss of

control of subsidiaries.

Net cash used for ﬁnancing activities

Net cash used for financing activities includes net interest paid on

borrowings, cash and cash equivalents, bank overdrafts, as well as the cash

impact of other items related to ﬁnancing activities such as premiums from

the early redemption of borrowings and the settlement of derivative

instruments. It also includes cash flows from changes in ownership

interests in a subsidiary that do not result in a loss of control (including

increases in ownership interests).

1.2.3. Operating performance of each operating

segment and the group

Vivendi considers Adjusted Earnings Before Interest and Tax (EBITA), income

from operations, Adjusted net income (ANI), and Cash Flow From Operations

(CFF0), non-GAAP measures, to be relevant indicators of the group’s

operating and ﬁnancial performance.

EBITA

Vivendi considers EBITA, a non-GAAP measure, to be a relevant measure to

assess the performance of its operating segments as reported in the

segment data. It enables Vivendi to compare the operating performance of

operating segments regardless of whether their performance is driven by

the operating segment’s organic growth or by acquisitions. To calculate

EBITA, the accounting impact of the following items is excluded from the

income from EBIT:

3 the amortization of intangible assets acquired through business

combinations;

3 impairment losses on goodwill and other intangibles acquired

through business combinations;

3 income from equity afﬁliates having similar operating activities; and

3 other income and charges related to transactions with shareowners,

which include gains and losses recognized in business combina-

tions, as well as gains or losses incurred from the gain or loss of

control in a business.

Income from operations

Vivendi considers income from operations, a non-GAAP measure, to be a

relevant measure to assess the performance of its operating segments as

reported in the segment data. As defined by Vivendi, income from

operations is calculated as EBITA, before share-based compensation costs

related to equity-settled plans and cash-settled plans, and special items

due to their unusual nature or particular signiﬁcance.

Adjusted net income

Vivendi considers adjusted net income, a non-GAAP measure, to be a

relevant measure to assess the group’s operating and ﬁnancial performance.

Vivendi Management uses adjusted net income because it provides a better

illustration of the underlying performance of continuing operations by

excluding most non-recurring and non-operating items. Adjusted net income

includes the following items:

3 EBITA (2);

3 income from equity afﬁliates (1);

3 interest (1), equal to interest expense on borrowings net of interest

income earned on cash and cash equivalents;

3 income from investments (1), including dividends and interest

received from unconsolidated companies; and

3 taxes and non-controlling interests related to these items.

It does not include the following items:

3 amortization of intangibles acquired through business combinations

(2) as well as impairment losses on goodwill and other intangibles

acquired through business combinations (1) (2);

3 other income and charges related to transactions with shareowners

(1), as deﬁned above;

3 other financial charges and income (1), equal to capital gains or

losses related to divestitures, or the depreciation of equity afﬁliates

and other ﬁnancial investments, the proﬁt and loss related to the

change in value of ﬁnancial assets and the termination or change in

value of ﬁnancial liabilities, which primarily include changes in the

fair value of derivative instruments, premiums from the early

redemption of borrowings, the early unwinding of derivative

instruments, the cost of issuing or cancelling credit facilities, the

cash impact of foreign exchange transactions (other than those

related to operating activities, included in EBIT), as well as the

effect of undiscounting assets and liabilities, and the financial

components of employee beneﬁts (interest cost and expected return

on plan assets);

3 earnings from discontinued operations (1); and

3 provisions for income taxes and adjustments attributable to non-

controlling interests and non-recurring tax items (notably the

changes in deferred tax assets pursuant to VivendiSA’s tax group

and the Consolidated Global Proﬁt Tax Systems, and the reversal of

tax liabilities relating to risks extinguished over the period).

Cash Flow From Operations (CFFO)

Vivendi considers cash ﬂow from operations (CFFO), a non-GAAP measure,

to be a relevant measure to assess the group’s operating and financial

performance. The CFFO includes net cash provided by operating activities,

before income tax paid, as presented in the Statement of Cash Flows, as

well as dividends received from equity affiliates and unconsolidated

companies. It also includes capital expenditures, net that relate to cash

used for capital expenditures, net of proceeds from sales of property, plant

and equipment, and intangible assets.

(2) Items as reported by each operating segment as reported in the segment data.

(1) Items as presented in the Consolidated Statement of Earnings.

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

The difference between CFFO and net cash provided by operating activities

consists of dividends received from equity afﬁliates and unconsolidated

companies and capital expenditures, net (which are included in net cash

used for investing activities), income tax paid, net and net cash provided by

operating activities of discontinued operations, which are excluded from

CFFO.

1.2.4. Consolidated Statement of Financial Position

Assets and liabilities that are expected to be realized, or intended for sale

or consumption, within the entity’s normal operating cycle (generally

12months), are recorded as current assets or liabilities. If their maturity

exceeds this period, they are recorded as non-current assets or liabilities.

Moreover, certain reclassifications were made to the 2017 and 2016

Consolidated Financial Statements to conform to the presentation of the

2018 and 2017 Consolidated Financial Statements.

1.3. PRINCIPLES GOVERNING THE PREPARATION

OFTHECONSOLIDATED FINANCIAL STATEMENTS

Pursuant to IFRSprinciples, the Consolidated Financial Statements have

been prepared on a historical cost basis, with the exception of certain

assets and liabilities, for which IFRS13 – Fair Value Measurement relating

to measurement and disclosures applies. Relevant categories are detailed

below.

The Consolidated Financial Statements include the ﬁnancial statements of

Vivendi and its subsidiaries after eliminating intragroup items and

transactions. Vivendi has a December31

year-end. Subsidiaries that do not

have a December31

year-end prepare interim ﬁnancial statements at that

date, except when their year-end falls within the three months preceding

December31

Acquired subsidiaries are included in the Consolidated Financial Statements

of the group as of the date of acquisition.

1.3.1. Use of estimates

The preparation of Consolidated Financial Statements in compliance with

IFRSrequires the group’s management to make certain estimates and

assumptions that they consider reasonable and realistic. Although these

estimates and assumptions are regularly reviewed by Vivendi Management,

based in particular on past or anticipated achievements, facts and

circumstances may lead to changes in these estimates and assumptions

which could have an impact on the reported amount of group assets,

liabilities, equity or earnings.

The main estimates and assumptions relate to the measurement of:

3 revenue: estimates of provisions for returns and price guarantees

(please refer to Note1.3.4);

3 provisions: risk estimates, performed on an individual basis, noting

that the occurrence of events during the course of procedures may

lead to a risk reassessment at any time (please refer to Notes1.3.8

and 16);

3 employee beneﬁts: assumptions are updated annually, such as

the probability of employees remaining within the group until

retirement, expected changes in future compensation, the discount

rate and the inﬂation rate (please refer to Notes1.3.8 and 17);

3 share-based compensation: assumptions are updated annually, such

as the estimated term, volatility and the estimated dividend yield

(please refer to Notes1.3.10 and 18);

3 deferred taxes: estimates used for the recognition of deferred tax

assets are updated annually with factors such as expected tax rates

and future tax results of the group (please refer to Notes1.3.9 and 6);

3 goodwill and other intangible assets: valuation methods used to

identify intangible assets acquired through business combinations

(please refer to Note1.3.5.2);

3 goodwill, intangible assets with indeﬁnite useful lives and assets

inprogress: assumptions relating to impairment tests performed

oneach of the group’s cash-generating units (CGUs), future cash

flows and discount rates are updated annually (please refer to

Notes1.3.5.7 and 9);

3 UMG content assets: estimates of the future performance of

beneficiaries who received advances are recognized in the

Statement of Financial Position (please refer to Notes1.3.5.3 and

10); and

3 certain ﬁnancial instruments: valuation method at fair value deﬁned

according to the three following classiﬁcation levels (please refer to

Notes1.3.5.8, 1.3.7, 12, 14 and 19):

– level 1: fair value measurement based on quoted prices in active

markets for identical assets or liabilities,

– level 2: fair value measurement based on observable market data

(other than quoted prices included under Level 1), and

– level 3: fair value measurement based on valuation techniques

using inputs for the asset or liability that are not based on obser-

vable market data.

The fair value of trade accounts receivable and other, cash and cash

equivalents, and trade accounts payable is a reasonable estimate of

fair value, due to the short maturity of these instruments.

1.3.2. Principles of consolidation

For a list of Vivendi’s major subsidiaries, joint ventures and associated

entities, please refer to Note24.

Consolidation

All companies in which Vivendi has a controlling interest, namely those in

which it has the power to govern ﬁnancial and operational policies to obtain

beneﬁts from their operations, are fully consolidated.

Control as deﬁned by IFRS10 – Consolidated Financial Statements is based

on the three criteria below to be fulfilled cumulatively to assess if the

parent company exercises control:

3 a parent company has power over a subsidiary when the parent

company has existing rights that give it the current ability to direct

the relevant activities of the subsidiary, i.e., the activities that

signiﬁcantly affect the subsidiary’s returns. Power may arise from

existing or potential voting rights, or contractual arrangements.

Voting rights must be substantial, i.e., exercisable at any time

without limitation, particularly during decision making processes

related to significant activities. Assessment of the exercise of

power depends on the nature of the subsidiary’s relevant activities,

the internal decision-making process, and the allocation of rights

among the subsidiary’s other shareowners;

3 the parent company is exposed, or has rights, to variable returns

from its involvement with the subsidiary which may vary as a result

of the subsidiary’s performance. The concept of returns is broadly

defined and includes, among other things, dividends and other

economic benefit distributions, changes in the value of the

investment in the subsidiary, economies of scale, and business

synergies; and

3 the parent company has the ability to use its power to affect the

returns. Exercising power without having any impact on returns

does not qualify as control.

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Consolidated Financial Statements of a group are presented as if the group

was a single economic entity with two categories of owners: (i)the owners

of the parent company (VivendiSA shareowners) and (ii) the owners of non-

controlling interests (minority shareholders of the subsidiaries). A non-

controlling interest is defined as the interest in a subsidiary that is not

attributable, whether directly or indirectly, to a parent company. As a result,

changes to a parent company’s ownership interest in a subsidiary that do not

result in a loss of control only impact equity, as control of the economic entity

does not change. Hence, in the event of the acquisition of an additional

interest in a consolidated entity after January1, 2009, Vivendi recognizes the

difference between the acquisition price and the carrying value of non-

controlling interests acquired as a change in equity attributable to VivendiSA

shareowners. Conversely, any acquisition of control achieved in stages or a

loss of control gives rise to proﬁt or loss in the statement of earnings.

Accounting for joint arrangements

IFRS11 – Joint Arrangements establishes principles for ﬁnancial reporting

by parties to a joint arrangement.

In a joint arrangement, parties are bound by a contractual arrangement,

giving these parties joint control of the arrangement. An entity that is a

party to an arrangement shall assess whether the contractual arrangement

gives all the parties or a group of the parties control of the arrangement

collectively. Once it has been established that all the parties or a group of

the parties collectively control the arrangement, joint control exists only

when decisions about the relevant activities require the unanimous consent

of the parties that collectively control the arrangement.

Joint arrangements are classiﬁed into two categories:

3 joint operations: these are joint arrangements whereby the parties

that have joint control of the arrangement have rights to the assets,

and obligations for the liabilities, relating to the arrangement. Those

parties are called joint operators. A joint operator shall recognize

100% of wholly-owned assets/liabilities, expenses/revenues of the

joint operation, and its share of any of those items held jointly; and

3 joint ventures: these are joint arrangements whereby the parties that

have joint control of the arrangement have rights to the net assets of

the arrangement. Those parties are called joint venturers. Each joint

venturer shall recognize its interest in a joint venture as an invest-

ment and shall account for that investment using the equity method

in accordance with IAS 28 – Investments in Associates and Joint

Ventures (please refer below).

Equity accounting

Entities over which Vivendi exercises signiﬁcant inﬂuence as well as joint

ventures are accounted for under the equity method.

Significant influence is deemed to exist when Vivendi holds, whether

directly or indirectly, at least 20% of the voting rights in an entity unless it

can be clearly established that Vivendi does not exercise a significant

influence. Significant influence can be evidenced through other criteria,

such as representation on the entity’s Board of Directors or equivalent

governing body, participation in policy-making of ﬁnancial and operational

processes, material transactions with the entity or the interchange of

managerial personnel.

1.3.3. Foreign currency translation

The Consolidated Financial Statements are presented inmillions of euros.

The functional currency of VivendiSA and the presentation currency of the

group is the euro.

Foreign currency transactions

Foreign currency transactions are initially recorded in the functional

currency of the entity at the exchange rate prevailing at the date of the

transaction. At the closing date, foreign currency monetary assets and

liabilities are translated into the entity’s functional currency at the exchange

rate prevailing on that date. All foreign currency differences are expensed,

with the exception of differences resulting from borrowings in foreign

currencies which constitute a hedge of the net investment in a foreign

entity. These differences are allocated directly to charges and income

directly recognized in equity until the divestiture of the net investment.

Financial statements denominated in a foreign currency

Except in cases of significant exchange rate fluctuation, financial

statements of subsidiaries, joint ventures or other associated entities for

which the functional currency is not the euro are translated into euros as

follows: the Consolidated Statement of Financial Position is translated at

the exchange rate at the end of the period, and the Consolidated Statement

of Earnings and the Consolidated Statement of Cash Flows are translated

using average monthly exchange rates for the period. The resulting

translation gains and losses are recorded as foreign currency translation

differences in charges and income directly recognized in equity. In

accordance with IFRS1, Vivendi elected to reverse the accumulated foreign

currency translation differences against retained earnings as of January1,

2004. These foreign currency translation differences resulted from the

translation into euros of the ﬁnancial statements of subsidiaries that use

foreign currencies as their functional currencies. Consequently, these

adjustments are not applied to earnings on the subsequent divestiture of

subsidiaries, joint ventures or associates whose functional currency is not

the euro.

1.3.4. Revenues and associated costs

Revenues from contracts with customers are recorded when performance

obligations promised in the contract are satisﬁed, and for an amount for

which it is highly probable that a significant reversal in the amount of

cumulative revenue recognized will not occur. Revenues are reported net of

discounts.

1.3.4.1. Universal Music Group (UMG)

Recorded Music

The sales of recorded music (physical, digital downloading or streaming) are

intellectual property licenses granted by UMG to distributors or digital

platforms and which give them certain rights over the company’s musical

works. In its relationship with the distributor/digital platform and the end

customer, UMG cannot be “principal”, as the distributor or the digital

platform is responsible for setting the transfer of control conditions of the

right of use granted by the license to the end customer (broadcasting, price

setting and conditions for reselling the physical devices).

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FORTHEYEAR ENDED DECEMBER31, 2018

Physical sales of recorded music (CDs, DVDs and Vinyls)

These intellectual property licenses are static licenses transferring to the

customer a right to use UMG‘s recordings as they exist at the point in time

at which the license is granted, i.e., on the physical device sold.

Revenues from the physical sales of recorded music, net of a provision for

estimated returns (please refer to Note1.3.4.5) and rebates, if any, are

accounted for, either: (i) upon the sale to the distributor, at the shipping

point for products sold free on board (FOB) or on delivery for products sold

free on destination; or (ii) upon the sale to the ﬁnal customer for consign-

ment sales.

Digital sales of recorded music, via downloading or streaming

bysubscription or free of charge

These intellectual property licenses are generally dynamic licenses

providing a right to access the entire catalog of recorded music as it exists

throughout the license period considering potential add-ons to, or

withdrawals from, the catalog during that period.

The consideration paid by the digital platform is variable in the form of a

sales-based or a usage-based royalty. Revenues are then accounted for

when these subsequent sales or usages occur. Revenues from digital sales

of recorded music, for which UMG has sufﬁcient, accurate, and reliable data

from digital platforms, are recognized at the end of the month in which the

sale or usage is made by the end customer. If such data is not available,

revenues are recognized when the digital platform notiﬁes UMG of the sale

or usage by the end customer.

For digital sales of recorded music streaming by subscription or free of

charge, certain contracts may include a non-refundable minimum guarantee

which is generally recoupable and is in substance an advance payment. In

the case of a dynamic license, the minimum guarantee is spread over the

period to which it relates to and takes into account the amount of royalties

that is actually recoupable. The minimum guarantee is hence apportioned in

accordance with the accounting for these royalties.

Music publishing

Music publishing relates to the use by a third party of the copyrights on

musical works owned or administered by UMG, which are intellectual

property licenses that UMG grant to the third party and which provides a

right to access a catalog of recorded music, as these intellectual property

licenses are dynamic licenses.

The consideration paid by the third-party, notably a collection society (e.g.,

company for the collective management of intellectual-property rights) is

variable in the form of a royalty based on the usage by the third party. The

variable consideration being accounted for when these subsequent usages

occur, revenues from music publishing are accounted for when the

collection society notifies UMG of the usage by the end customer and

collectability is assured.

Merchandising

Revenues from merchandising are recognized either upon sale to the end

customer, from direct sales during touring, concessions and over the

internet; on delivery for sales by a third-party distributor; when a contract is

signed, or when an invoice has been issued and the collectability is assured

for sales of rights attached to merchandising products.

1.3.4.2. Canal+ Group

Terrestrial, satellite or ADSL television subscription services

Subscription to programs

Each subscription to a contract for pay-tv services is considered as a series

of distinct services that are substantially the same and that have the same

pattern of transfer to the customer. The provision of set-top boxes, digital

cards and access fees do not represent distinct services or goods, and they

are combined with the subscription service as a single performance

obligation satisﬁed over time, as the customer simultaneously receives and

consumes the benefits provided by Canal+ Group’s performance as the

pay-tv services are supplied. In its relationship with the third-party

distributor and the end customer, Canal+ Group acts as “principal” in the

transaction with the end customer for the self-distribution contracts as it is

responsible for the activation of the subscription of the end customer and

for setting the selling price.

Revenues, net of potential gratuities granted, are then accounted for over

the period the service is provided from the activation date of the

subscription and as the service is provided.

Video-on-demand and television-on-demand services

The video-on-demand service, which allows customers to have unlimited

access to a catalog of programs through streaming and the television-on-

demand service, and through providing access to one-time programs by

downloading or streaming, are distinct services from the subscription

service. In its relationship with the third-party distributor and the end

customer, Canal+ Group is not “principal”, as the third-party distributor is

responsible for the performance of the service both technically and

commercially.

The video-on-demand service is a performance obligation which is satisﬁed

over time, and the revenues are accounted for over the period it is provided

to the customer. The television-on-demand service is a performance

obligation satisﬁed at a point in time, and the revenues are accounted for

when the content is available for broadcasting.

Sales of advertising spaces

These are sales of television advertising spaces (in the form of classic TV

commercials and of partnerships for shows or events) or advertising spaces

on the website (videos and advertising banners).

Pay and free-to-air television

In regard to commercials, the distinct performance obligation is the reach of

a gross rating point which generally comprises a set of advertising

messages aimed at a specific target audience and satisfied over time.

Revenues from these sales, net of rebates if any, are accounted for over the

period of the advertising campaign, generally because the advertising

commercials are broadcasted considering potential free periods granted.

Website

Each type of advertising impression (advertising display) represents a

distinct performance obligation, because the advertiser can benefit

separately from each type of advertising imprint, satisﬁed at a point in time.

Revenues from the sale of advertising spaces on the website, net of

rebates, if any, are accounted for when the advertising imprints are

produced, i.e., when the advertisements are broadcasted on the website.

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Film and television programs

Physical sales of movies (DVDs and Blu-rays)

Please refer to the sectionon physical sales of recorded music (CDs, DVDs

and Vinyls) at UMG.

Sales of exploitation rights of audiovisual works

These sales are intellectual property licenses granted by Canal+ Group to

broadcasters or to distributors and which give them certain rights over its

audiovisual works. These licenses are static licenses because they transfer

a right to use the films as they exist at the point in time at which the

licenses are granted. In its relationship with the third-party distributor and

the end customer, Canal+ Group is not “principal” in the transaction with

the end customer, as the distributor is responsible for the delivery of the ﬁlm

and for the price setting to the end customer.

Revenues from the sale of the exploitation rights are recorded from the

moment the client is able to use it and obtain the remaining beneﬁts. When

the consideration paid by the customer is a ﬁxed price, revenues from the

sales of exploitation rights are recorded from the latest of the delivery and

the opening of the exploitation window set contractually or legally (refer to

the media chronology in France). When the consideration paid by the

customer is variable in the form of a sales-based royalty to the end

customer, revenues are recognized as the subsequent sale occurs.

1.3.4.3. Havas

Revenues from Havas derive substantially from fees and commissions for

its activities:

3 creative: advice and services provided in the fields of communi-

cations and media strategy; and

3 media: planning and purchase of advertising spaces.

For each sale’s transaction, Havas identiﬁes if it acts as “principal” or not,

based on its level of responsibility in the execution of the performance

obligation, the control of the inventory and the price setting. Revenues are

then recognized, net of costs incurred for production when Havas does not

act as “principal”.

When Havas acts as “principal”, certain pass-through costs rebilled to

customers, which were deducted from revenues in accordance with IAS18

(applicable until December31, 2017), are now recorded as revenues and as

costs of revenues in accordance with IFRS15. Given that these pass-through

costs are not included in the measurement of the operating performance,

Havas decided to use a new indicator, “net revenues”, corres ponding to

revenues less these pass-through costs rebilled to customers.

Commissions are accounted for at a point in time, at the date the service is

performed or at the date the media is aired or published.

Fees are accounted for as revenues as per the following:

3 one-off or project fees are recognized at the point in time when the

service is performed. If these fees include a qualitative aspect, they

are result is assessed by the client at the end of the project; and

3 ﬁxed fees are generally recognized over time on a straight-line basis

reﬂecting the expected duration of the service; fees based on time

spent are recognized as work is performed.

Certain contractual arrangements with clients also include performance

incentives pursuant to which Havas is entitled to receive additional

payments based upon its performance for the client, measured against

specified qualitative and quantitative objectives. Havas recognizes the

incentive portion of the revenue under these contractual arrangements

when it is considered highly probable that the qualitative and quantitative

goals are achieved in accordance with the arrangements.

1.3.4.4. Gameloft

Digital sales of video games on mobile devices

The gaming experience sold by Gameloft is composed of a license to use a

video game on mobile devices (which can be pre-set on the mobile

terminal), and, if any, adds-in, which allows the player to progress in the

video game (virtual elements, time-limited events and multi-player

functionality).

The grant of a video game to an end customer through a third-party

distributor, digital platform, telecom operator or mobile device manufacturer,

as well as the virtual elements acquired in the video game, the time-limited

events and the multi-player functionality, represent a single performance

obligation in the form of an intellectual property license granted by

Gameloft to third-party distributors.

These licenses are static because they transfer a right to use the video

game as it exists at the point in time at which the license is granted, as

Gameloft has no obligation to update the video game. In its relationship

with the third-party distributor and the end customer, Gameloft acts as

“principal” in the transaction with the end customer, when Gameloft is

responsible for providing the video game license and for setting the price to

the end customer.

The consideration paid by the third-party distributor is variable in the form

of a sales-based royalty. Revenues are then accounted for when the

subsequent sale occurs.

Sales of advertising spaces in video games,

in the form of videos and advertising banners

The advertising display in a video game is an advertising impression

corresponding to a distinct performance obligation, as the advertiser can

beneﬁt separately from each type of advertising impression, satisﬁed at a

point in time.

Revenues from the sale of advertising spaces in video games, net of rebates

if any, are then accounted for when the advertising impressions are

produced, i.e., when the advertisements are published. When the sale is

made by a third party (media agency or auction platform), Gameloft is

generally “principal” in the sale’s transaction with the advertiser, notably

when Gameloft is responsible for technically supplying the advertising

impression, as well as for setting the price.

1.3.4.5. Other

Provisions for estimated returns and price guarantees are deducted

from sales of products to customers through distributors. The provisions are

estimated based on past sales statistics and take into account the economic

environment and product sales forecast to ﬁnal customers.

Selling, general and administrative expenses primarily include

salaries and employee beneﬁts, rent, consulting and service fees, insurance

costs, travel and entertainment expenses, administrative department costs,

provisions for receivables and other operating expenses.

Advertising costs are expensed when incurred.

Slotting fees and cooperative advertising expenses are recorded as a

reduction in revenues. However, cooperative advertising at UMG is treated

as a marketing expense and expensed when its expected benefit is

individualized and can be estimated.

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1.3.5. Assets

1.3.5.1. Capitalized ﬁnancial interest

When appropriate, Vivendi capitalizes ﬁnancial interest incurred during the

construction and acquisition period of intangible assets, and property, plant and

equipment, these interests being included in the cost of qualifying assets.

1.3.5.2. Goodwill and business combinations

Business combinations from January1, 2009

Business combinations are recorded using the acquisition method. Under

this method, upon the initial consolidation of an entity over which the group

has acquired exclusive control:

3 the identifiable assets acquired and the liabilities assumed are

recognized at their fair value on the acquisition date; and

3 non-controlling interests are measured either at fair value or at the

non-controlling interest’s proportionate share of the acquiree’s net

identifiable assets. This option is available on a transaction-by-

transaction basis.

On the acquisition date, goodwill is initially measured as the difference

between:

(i) the fair value of the consideration transferred, plus the amount of

non-controlling interests in the acquiree and, in a business combina-

tion achieved in stages, the acquisition-date fair value of the

previously held equity interest in the acquiree; and

(ii) the net fair value of the identiﬁable assets and liabilities assumed

on the acquisition date.

The measurement of non-controlling interests at fair value results in an

increase in goodwill up to the extent attributable to these interests, thereby

leading to the recognition of a “full goodwill”. The purchase price allocation

shall be performed within 12 months after the acquisition date. If goodwill

is negative, it is recognized in the Statement of Earnings. Subsequent to the

acquisition date, goodwill is measured at its initial amount less recorded

accumulated impairment losses (please refer to Note1.3.5.7 below).

In addition, the following principles are applied to business combinations:

3 on the acquisition date, to the extent possible, goodwill is allocated

to each cash-generating unit likely to benefit from the business

combination;

3 contingent consideration in a business combination is recorded at

fair value on the acquisition date, and any subsequent adjustment

occurring after the purchase price allocation period is recognized in

the Statements of Earnings;

3 acquisition-related costs are recognized as expenses when incurred;

3 in the event of the acquisition of an additional interest in a subsi-

diary, Vivendi recognizes the difference between the acquisition price

and the carrying value of non-controlling interests acquired as a

change in equity attributable to VivendiSA shareowners; and

3 goodwill is not amortized.

Business combinations prior to January1, 2009

Pursuant to IFRS1, Vivendi elected not to restate business combinations

that occurred prior to January1, 2004. IFRS3, as published by the IASB in

March2004, retained the acquisition method. However, its provisions

differed from those of its revised standard in respect of the main following

items:

3 minority interests were measured at their proportionate share of the

acquiree’s net identiﬁable assets as there was no option for measu-

rement at fair value;

3 contingent consideration was recognized in the cost of acquisition

only if the payment was likely to occur and the amounts could be

reliably measured;

3 transaction costs that were directly attributable to the acquisition

formed part of acquisition costs; and

3 in the event of the acquisition of an additional interest in a subsidiary,

the difference between the acquisition cost and the carrying value of

minority interests acquired was recognized as goodwill.

1.3.5.3. Content assets

UMG

Royalty advances to artists, songwriters, and co-publishers are capitalized

as an asset when their current popularity and past performances provide a

reasonable basis to conclude that the probable future recoupment of such

royalty advances against earnings otherwise payable to them is reasonably

assured. Royalty advances are recognized as an expense as subsequent

royalties are earned by the artist, songwriter or co-publisher. Any portion of

capitalized royalty advances not deemed to be recoverable against future

royalties is expensed during the period in which the loss becomes evident.

These expenses are recorded in cost of revenues.

Royalties earned by artists, songwriters, and co-publishers are recognized

as an expense in the period during which the sale of the product occurs,

less a provision for estimated returns.

Change in estimate

Music rights and catalogs include music catalogs, artists’ contracts and

music publishing rights acquired through business combinations. The

annual review of the value of the intangible assets, undertaken by Vivendi

at year-end 2016 led to a change in the amortization method of music rights

and catalogs as from January1, 2017, which notably resulted in an

extension of the amortization period from 15 to 20 years. As part of this

review, Vivendi concluded that the value of music rights and catalogs had

increased and that the useful life was longer than previously estimated,

given recent changes in the outlook for the international music market,

driven in particular by the development of subscription streaming services.

In 2017, the impact over the period of this forward-looking change in

estimate on the amortization expense amounted to €94million (net of

deferred taxes).

Canal+ Group

Film, television or sports broadcasting rights

When entering into contracts for the acquisition of ﬁlm, television or sports

broadcasting rights, the rights acquired are classified as contractual

commitments. They are recorded in the Statement of Financial Position and

classiﬁed as content assets as follows:

3 film and television broadcasting rights are recognized at their

acquisition cost when the program is available for screening and are

expensed over their broadcasting period;

3 sports broadcasting rights are recognized at their acquisition cost at

the opening of the broadcasting period of the related sports season or

upon the ﬁrst payment and are expensed as they are broadcast; and

3 expensing of ﬁlm, television or sports broadcasting rights is included

in cost of revenues.

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Theatrical ﬁlms and television rights produced

or acquired to be sold to third parties

Theatrical films and television rights produced or acquired before their

initial exhibition to be sold to third parties, are recorded as a content asset

at capitalized cost (mainly direct production and overhead costs) or at their

acquisition cost. The cost of theatrical films and television rights are

amortized, and other related costs are expensed, pursuant to the estimated

revenue method (i.e., based on the ratio of the current period’s gross

revenues to estimated total gross revenues from all sources on an individual

production basis). Vivendi considers that amortization pursuant to the

estimated revenue method reﬂects the rate at which the entity plans to

consume the future economic beneﬁts related to the asset, and there is a

high correlation between revenue and the consumption of the economic

beneﬁts embodied in the intangible assets.

Where appropriate, estimated losses in value are provided in full against

earnings for the period in which the losses are estimated, on an individual

product basis.

Film and television rights catalogs

Catalogs comprise ﬁlm rights acquired for a second television screening, or

produced or acquired ﬁlm and television rights that are sold to third parties

after their ﬁrst television screening (i.e., after their ﬁrst broadcast on a free

terrestrial channel). They are recognized as an asset at their acquisition or

transfer cost and amortized as groups of films, or individually, based

respectively on the estimated revenue method.

1.3.5.4. Research and development costs

Research costs are expensed when incurred. Development expenses are

capitalized when the feasibility and, in particular, proﬁtability of the project

can reasonably be considered certain.

Cost of internal use software

Direct internal and external costs incurred for the development of computer

software for internal use, including website development costs, are

capitalized during the application development stage. Application

development stage costs generally include software conﬁguration, coding,

installation and testing. Costs of signiﬁcant upgrades and enhancements

resulting in additional functionality are also capitalized. These capitalized

costs are amortized over 5 to 10 years. Maintenance, minor upgrades, and

enhancement costs are expensed as they are incurred.

Cost of developing video games

Development costs of video games are capitalized when both the technical

feasibility and the management’s intention to complete the game so that it

will be available for use and sale are veriﬁed, and when the recoverability is

reasonably assured. Because of the uncertainty that exists regarding those

criteria, the recognition requirements of IAS 38 are usually not met until the

game is launched. Therefore, costs of developing mobile games are

expensed as incurred.

1.3.5.5. Other intangible assets

Intangible assets separately acquired are recorded at cost, and intangible

assets acquired in connection with a business combination are recorded at

their fair value at the acquisition date. The historical cost model is applied to

intangible assets after they have been recognized. Assets with an indeﬁnite

useful life are not amortized but are subject to an annual impairment test.

Amortization is accrued for assets with a finite useful life. Useful life is

reviewed at the end of each reporting period.

Other intangible assets include trade names, customer bases and licenses.

By contrast, music catalogs, trade names, subscribers’ bases and market

shares generated internally are not recognized as intangible assets.

1.3.5.6. Property, plant and equipment

Property, plant and equipment are carried at historical cost less any

accumulated depreciation and impairment losses. Historical cost includes

the acquisition cost or production cost, costs directly attributable to

transporting an asset to its physical location and preparing it for its

operational use, the estimated costs relating to the demolition and the

collection of property, plant and equipment, and the rehabilitation of the

physical location resulting from the incurred obligation.

When property, plant and equipment include signiﬁcant components with

different useful lives, they are recorded and amortized separately.

Amortization is calculated using the straight-line method based on the

estimated useful life of the assets. Useful lives of the main components are

reviewed at the end of each reporting period and are as follows:

3 buildings: 5 to 40 years;

3 equipment and machinery: 3 to 8 years;

3 set-top boxes: 5 to 7 years; and

3 other: 2 to 10 years.

Assets ﬁnanced by ﬁnance lease contracts are capitalized at the lower of

the fair value of future lease payments and the market value and the related

debt is recorded as “Borrowings and other ﬁnancial liabilities”. In general,

these assets are amortized on a straight-line basis over their estimated

useful life, corresponding to the duration applicable to property, plant and

equipment in the same category. Amortization expenses on assets acquired

under such leases are included in amortization expenses.

After initial recognition, the cost model is applied to property, plant and

equipment.

Vivendi has elected not to apply the option available under IFRS1, involving

the remeasurement of certain property, plant and equipment at their fair

value as of January1, 2004.

On January1, 2004, in accordance with IFRS1, Vivendi decided to apply

IFRIC Interpretation 4 – Determining whether an arrangement contains a

lease, which mainly applies to commercial supply agreements for the

Canal+ Group satellite capacity, which are commercial service agreements

that, in general, do not convey a right to use a speciﬁc asset. Contract costs

under these agreements are consequently expensed as operational costs

for the period.

1.3.5.7. Asset impairment

Each time events or changes in the economic environment indicate a risk of

impairment of goodwill, other intangible assets, property, plant and

equipment, and assets in progress, Vivendi re-examines the value of these

assets. In addition, in accordance with applicable accounting standards,

goodwill, other intangible assets with an indefinite useful life, and

intangible assets in progress are all subject to an annual impairment test

undertaken in the fourth quarter of each ﬁscal year. This impairment test is

performed to compare the recoverable amount of each Cash Generating

Unit (CGU) or, if necessary, groups of CGU to the carrying value of the

corresponding assets (including goodwill). A CGU is the smallest identiﬁable

group of assets that generates cash inﬂows that are largely independent of

the cash inﬂows from other assets or groups of assets. Vivendi operates

through different media and content businesses. Each business offers

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different products and services that are marketed through various channels.

CGUs are independently deﬁned at each business level, corresponding to

the group operating segments. For a description of Vivendi’s CGUs and

groups of CGUs, please refer to Note9.

The recoverable amount is determined for each individual asset as the

higher of: (i) its value in use; and (ii) its fair value (less costs to sell) as

described hereafter. If the asset does not generate cash inﬂows that are

largely independent of other assets or groups of assets, the recoverable

amount is determined for the group of assets. In particular, an impairment

test of goodwill is performed by Vivendi for each CGU or group of CGUs,

depending on the level at which Vivendi Management measures return on

operations.

The value in use of each asset or group of assets is determined, subject to

exceptions, as the discounted value of future cash ﬂows (Discounted Cash

Flow method (DCF)) by using cash flow projections consistent with the

budget of the following year and the most recent forecasts prepared by the

operating segments.

Applied discount rates are determined by reference to available external

sources of information, usually based on ﬁnancial institutions’ benchmarks,

and reﬂect the current assessment by Vivendi of the time value of money

and risks speciﬁc to each asset or group of assets.

Perpetual growth rates used for the evaluation of CGUs are those used to

prepare budgets for each CGU or group of CGUs, and beyond the period

covered, are consistent with growth rates estimated by the business by

extrapolating growth rates used in the budgets, without exceeding the

long-term average growth rate for the markets in which the group operates.

The fair value (less costs to sell) is the price that would be received from the

sale of an asset or group of assets in an orderly transaction between market

participants at the measurement date, less costs to sell. These values are

generally determined on the basis of market data (stock market prices or

comparison with similar listed companies, with the value attributed to

similar assets or companies in recent transactions) or, in the absence of

such data, on the basis of discontinued cash ﬂows.

If the recoverable amount is lower than the carrying value of an asset or

group of assets, an impairment loss equal to the difference is recognized in

EBIT. In the case of a group of assets, this impairment loss is ﬁrst recorded

against goodwill.

The impairment losses recognized in respect of property, plant and

equipment, and intangible assets (other than goodwill) may be reversed in a

later period if the recoverable amount becomes greater than the carrying

value, within the limit of impairment losses previously recognized.

Impairment losses recognized in respect of goodwill cannot be reversed at

a later date.

1.3.5.8. Financial assets

Financial assets are initially recognized at fair value corresponding, in

general, to the consideration paid, which is best evidenced by the

acquisition cost (including associated acquisition costs, if any). Thereafter,

ﬁnancial assets are measured at fair value or at amortized cost depending

on which ﬁnancial asset category they belong to.

From January1, 2018, ﬁnancial assets are classiﬁed into the accounting

categories “financial assets at amortized cost”, “financial assets at fair

value through other comprehensive income” and “ﬁnancial assets at fair

value through proﬁt or loss”.

This classiﬁcation depends on the entity‘s business model for managing the

ﬁnancial assets and on contractual terms enabling to determine whether

the cash flows are solely payments of principal and interest (SPPI). The

ﬁnancial assets that contain an embedded derivative should be considered

in full to determine whether their cash ﬂows are SPPI.

Financial assets at fair value

These include ﬁnancial assets at fair value through other comprehensive

income, derivative ﬁnancial instruments with a positive value (please refer to

Note1.3.7) and other ﬁnancial assets measured at fair value through proﬁt or

loss. Most of these ﬁnancial assets are actively traded in organized ﬁnancial

markets, as their fair value is calculated by reference to the published market

price at the period end. Fair value is estimated for ﬁnancial assets which do

not have a published market price on an active market. As a last resort, when

a reliable estimate of fair value cannot be made using valuation techniques

in the absence of an active market, the group values financial assets at

historical cost, less any impairment losses.

Financial assets at fair value through other comprehensive income include:

3 unconsolidated companies that are not held for trading: Vivendi

elected to classify these into the category “fair value through other

comprehensive income”. Unrealized gains and losses on ﬁnancial

assets at fair value through other comprehensive income are

recognized in charges and income directly recognized in equity until

the ﬁnancial asset is sold, collected or removed from the Statement

of Financial Position in another way, at which time the accumulated

gain or loss previously reported in charges and income directly

recognized in equity is transferred to retained earnings and never

reclassiﬁed to proﬁt or loss. Dividends and interest received from

unconsolidated companies are recognized in proﬁt or loss; and

3 debt instruments held within a business model whose objective is

achieved by both collecting contractual cash flows and selling

ﬁnancial assets, and whose contractual terms give rise on speciﬁed

dates to cash flows that are solely payments of principal and

interest on the principal amount outstanding. Unrealized gains and

losses on ﬁnancial assets at fair value through other comprehensive

income are recognized in charges and income directly recognized in

equity until the ﬁnancial asset is sold, collected or removed from the

Statement of Financial Position in other ways, at which time the

accumulated gain or loss previously reported in charges and income

directly recognized in equity is expensed in other ﬁnancial charges

and income.

Other ﬁnancial assets measured at fair value through proﬁt or loss mainly

consist of assets held for trading which Vivendi intends to sell in the near

future (primarily marketable securities) and other ﬁnancial assets unless it

is measured at amortized cost or at fair value through other comprehensive

income. Unrealized gains and losses on these assets are recognized in other

ﬁnancial charges and income.

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Note1. Accounting policies and valuation methods

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Financial assets at amortized cost

Financial assets at amortized cost consist of debt instruments held within a

business model whose objective is to hold financial assets to collect

contractual cash ﬂows that are solely payments of principal and interest on

the principal amount outstanding. At the end of each period, these assets

are measured at amortized cost using the effective interest method. If there

is objective evidence that an impairment loss has been incurred, the amount

of this loss, measured as the difference between the financial asset’s

carrying value and its recoverable amount (equal to the present value of

estimated future cash flows discounted at the financial asset’s initial

effective interest rate), is recognized in proﬁt or loss. Impairment losses

may be reversed if the recoverable amount of the asset subsequently

increases in the future.

Impairment of ﬁnancial assets

Vivendi assesses the expected credit loss associated with its financial

assets recognized at amortized cost and debt instrument recognized at fair

value through other comprehensive income on a prospective basis. A loss

allowance for expected credit loss based on probability of default is

recognized at initial recognition. The loss allowance is updated for changes

in these expected credit losses at each reporting date to reﬂect changes in

credit risk since initial recognition.

To assess whether there has been a significant increase in credit risk,

Vivendi compares the credit risk at the reporting date with the credit risk at

the date of initial recognition based on reasonable forward-looking

information and events, including credit ratings if available, significant

adverse economic changes (actual or expected), financial or business

environment that are expected to result in a material change in the

borrower’s ability to meet its obligations.

The deﬁnition of default and write off policy are deﬁned speciﬁcally within

each operating entity.

1.3.5.9. Inventories

Inventories are valued at the lower of cost or net realizable value. Cost

comprises purchase costs, production costs and other supply and packaging

costs. These are usually calculated using the weighted average cost

method. Net realizable value is the estimated selling price in the normal

course of business, less estimated completion costs and selling costs.

1.3.5.10. Trade accounts receivable

Trade accounts receivable are initially recognized at fair value, which is

generally equal to their nominal value. Expected loss rates on trade

receivables are calculated by the relevant operating entities over their

lifetime from initial recognition and are based on historical data that also

incorporates forward-looking information. In addition, account receivables

from customers subject to insolvency proceedings or customers with whom

Vivendi is involved in litigation or a dispute are generally impaired in full.

1.3.5.11. Cash and cash equivalents

The “cash and cash equivalents” category, defined in accordance with

IAS7, consists of cash in banks, monetary UCITS, which satisfy ANC and

AMF position expectations expressed in November2018, and other highly

liquid investments with initial maturities of generally three months or less.

Investments in securities, investments with initial maturities of more than

three months without an early termination option and bank accounts

subject to restrictions (blocked accounts), other than restrictions due to

regulations speciﬁc to a country or activity sector (e.g., exchange controls),

are not classiﬁed as cash equivalents but as ﬁnancial assets. Moreover, the

historical performances of the investments are monitored regularly to

conﬁrm their cash equivalents accounting classiﬁcation.

1.3.6. Assets held for sale

and discontinued operations

A non-current asset or a group of assets and liabilities is held for sale when

its carrying value may be recovered principally through its divestiture and

not by its continued utilization. To meet this deﬁnition, the asset must be

available for immediate sale and the divestiture must be highly probable.

These assets and liabilities are recognized as assets held for sale and

liabilities associated with assets held for sale, without offset. The related

assets recorded as assets held for sale are valued at the lowest value

between the fair value (net of divestiture fees) and the carrying value

(i.e.,at their cost less accumulated depreciation and impairment losses),

and are no longer depreciated.

An operation is qualiﬁed as discontinued when it represents a separate

major line of business and the criteria for classiﬁcation as an asset held for

sale have been met or when Vivendi has sold the asset. Discontinued

operations are reported on a single line of the Statement of Earnings for the

periods reported, comprising the earnings after tax of discontinued

operations until divestiture and the gain or loss after tax on sale or fair

value measurement, less costs to divest the assets and liabilities of the

discontinued operations. In addition, cash ﬂows generated by discontinued

operations are reported on a separate line of the Statement of Consolidated

Cash Flows for the relevant periods.

1.3.7. Financial liabilities

Long-term and short-term borrowings and other ﬁnancial liabilities include:

3 bonds and credit facilities, as well as various other borrowings

(including commercial paper and debt related to ﬁnance leases) and

related accrued interest;

3 obligations arising out of commitments to purchase non-controlling

interests;

3 bank overdrafts; and

3 the negative value of other derivative financial instruments.

Derivatives with positive values are recorded as ﬁnancial assets in

the Statement of Financial Position.

Borrowings

All borrowings are initially accounted for at fair value net of transaction

costs directly attributable to the borrowing. Borrowings bearing interest are

subsequently valued at amortized cost, applying the effective interest

method. The effective interest rate is the internal yield rate that discounts

future cash ﬂows over the term of the borrowing. In addition, where the

borrowing comprises an embedded derivative (e.g., an exchangeable bond)

or an equity instrument (e.g., a convertible bond), the amortized cost is

calculated for the debt component only, after separation of the embedded

derivative or equity instrument. In the event of a change in expected future

cash flows (e.g., redemption occurs earlier than initially expected), the

amortized cost is adjusted against earnings to reﬂect the value of the new

expected cash ﬂows, discounted at the initial effective interest rate.

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Note1. Accounting policies and valuation methods

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Commitments to purchase non-controlling interests

Vivendi has committed to purchase the non-controlling interests of some of

the minority shareowners of its fully consolidated subsidiaries. These

purchase commitments may be optional (e.g., put options) or mandatory

(e.g., forward purchase contracts).

The following accounting treatment has been applied in respect of commit-

ments made on or after January1, 2009:

3 upon initial recognition, the commitment to purchase non-controlling

interests is recognized as a ﬁnancial liability for the present value of

the purchase price under the put option or forward purchase

contract, mainly offset by the book value of non-controlling interests

and the remaining balance through equity attributable to VivendiSA

shareowners;

3 subsequent changes to the value of the commitment are recognized

as a ﬁnancial liability through an adjustment to equity attributable

to VivendiSA shareowners; and

3 upon maturity of the commitment, if the non-controlling interests

are not purchased, the previously recognized entries are reversed; if

the non-controlling interests are purchased, the amount recognized

in ﬁnancial liabilities is reversed, offset by the cash outﬂow relating

to the purchase of the non-controlling interests.

Derivative ﬁnancial instruments

Vivendi uses derivative financial instruments to manage and reduce its

exposure to ﬂuctuations in interest rates, and foreign currency exchange

rates. All instruments are either listed on organized markets or traded over-

the-counter with highly-rated counterparties. These instruments include

interest rate and currency swaps, and forward exchange contracts. All

these derivative ﬁnancial instruments are used for hedging purposes. At the

inception of the hedging relationship there is the formal designation and

documentation of the hedging relationship and the entity’s risk management

objective and strategy for undertaking the hedge.

Derivatives are initially measured at fair value on the settlement date and

are subsequently remeasured at fair value on each succeeding reporting

date. The recognition of subsequent changes in fair value depends on

whether the derivative is designated as a hedging instrument and, if

applicable, the nature of the hedged item and the type of hedging

relationship designated. When these contracts qualify as hedges for

accounting purposes, gains and losses arising on these contracts are offset

in earnings against the gains and losses relating to the hedged item.

When forward contracts are used as hedging instruments, Vivendi only

qualiﬁes as hedging instruments the change in the fair value of the forward

contract related to the variation of the spot exchange rate. Changes in the

forward points are excluded from the hedging relationship and are

recognized in ﬁnancial result.

Fair value hedge

When the derivative ﬁnancial instrument hedges exposures to ﬂuctuations

in the fair value of an asset or a liability recognized in the Statement of

Financial Position or of a ﬁrm commitment which is not recognized in the

Statement of Financial Position, it is a fair value hedge. The instrument is

remeasured at fair value in earnings, with the gains or losses arising on

remeasurement of the hedged portion of the hedged item offset on the

same line of the Statement of Earnings, or, as part of a forecasted

transaction relating to a non-ﬁnancial asset or liability, at the initial cost of

the asset or liability.

Cash ﬂow hedge

When the derivative ﬁnancial instrument hedges cash ﬂows, it is a cash ﬂow

hedge. The hedging instrument is remeasured at fair value and the portion of

the gain or loss that is determined to be an effective hedge is recognized

through charges and income directly recognized in equity, whereas its

ineffective portion is recognized in earnings, or, as part of a forecasted

transaction on a non-ﬁnancial asset or liability, they are recognized at the

initial cost of the asset or liability. When the hedged item is realized,

accumulated gains and losses recognized in equity are released to the

Statement of Earnings and recorded on the same line as the hedged item.

Net investment hedge

When the derivative financial instrument hedges a net investment in a

foreign operation, it is recognized in the same way as a cash ﬂow hedge.

Derivative financial instruments which do not qualify as a hedge for

accounting purposes are remeasured at fair value and resulting gains and

losses are recognized directly in earnings, without remeasurement of the

underlying instrument.

Furthermore, income and expenses relating to foreign currency instruments

used to hedge highly probable budget exposures and firm commitments

contracted pursuant to the acquisition of editorial content rights (including

sports, audiovisual and ﬁlm rights) are recognized in EBIT. In all other cases,

gains and losses arising on the fair value remeasurement of instruments are

recognized in other ﬁnancial charges and income.

1.3.8. Other liabilities

Provisions

Provisions are recognized when, at the end of the reporting period, Vivendi

has a legal obligation (statutory, regulatory or contractual) or a constructive

obligation, as a result of past events, and it is probable that an outﬂow of

resources embodying economic benefits will be required to settle the

obligation and the obligation can be reliably estimated. Where the effect of

the time value of money is material, provisions are discounted to their

present value using a pre-tax discount rate that reflects current market

assessments of the time value of money. If the amount of the obligation

cannot be reliably estimated, no provision is recorded and a disclosure is

made in the notesto the Consolidated Financial Statements.

Employee beneﬁt plans

In accordance with the laws and practices of each country in which it

operates, Vivendi participates in, or maintains, employee benefit plans

providing retirement pensions, post-retirement health care, life insurance

and post-employment beneﬁts to eligible employees, former employees,

retirees and such of their beneﬁciaries who meet the required conditions.

Retirement pensions are provided for substantially all employees through

deﬁned contribution plans, which are integrated with local social security

and multi-employer plans, or defined benefit plans, which are generally

managed via group pension plans. The plan funding policy implemented by

the group is consistent with applicable government funding requirements

and regulations.

Deﬁned contribution plans

Contributions to defined contribution and multi-employer plans are

expensed during the year.

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Note1. Accounting policies and valuation methods

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Deﬁned beneﬁt plans

Deﬁned beneﬁt plans may be funded by investments in various instruments

such as insurance contracts or equity and debt investment securities,

excluding Vivendi shares or debt instruments.

Pension expenses and defined benefit obligations are calculated by

independent actuaries using the projected unit credit method. This method

is based on annually updated assumptions, which include the probability of

employees remaining with Vivendi until retirement, expected changes in

future compensation and an appropriate discount rate for each country in

which Vivendi maintains a pension plan. The assumptions adopted in 2017

and 2018, and the means of determining these assumptions, are presented

in Note17. A provision is recorded in the Statement of Financial Position

equal to the difference between the actuarial value of the related beneﬁts

(actuarial liability) and the fair value of any associated plan assets, and

includes past service cost and actuarial gains and losses.

The cost of deﬁned beneﬁt plans consists of three components recognized

as follows:

3 the service cost is included in selling, general and administrative

expenses. It comprises current service cost, past service cost

resulting from a plan amendment or a curtailment, immediately

recognized in proﬁt and loss, and gains and losses on settlement;

3 the ﬁnancial component, recorded in other ﬁnancial charges and

income, consists of the undiscounting of the obligation, less the

expected return on plan assets determined using the discount rate

retained for the valuation of the beneﬁt obligation; and

3 the remeasurements of the net defined benefit liability (asset),

recognized in items of other comprehensive income not reclassiﬁed

to proﬁt and loss, mainly consist of actuarial gains and losses, i.e.,

changes in the present value of the deﬁned beneﬁt obligation and

plan assets resulting from changes in actuarial assumptions and

experience adjustments (representing the differences between the

expected effect of some actuarial assumptions applied to previous

valuations and the effective impact).

Where the value of plan assets exceeds benefit obligations, a financial

asset is recognized up to the present value of future refunds and the

expected reduction in future contributions.

Some other post-employment beneﬁts, such as life insurance and medical

coverage (mainly in the United States) are subject to provisions which are

assessed through an actuarial calculation comparable to the method used

for pension provisions.

On January1, 2004, in accordance with IFRS1, Vivendi decided to record

unrecognized actuarial gains and losses against consolidated equity.

1.3.9. Deferred taxes

Differences existing at closing between the tax base value of assets and

liabilities and their carrying value in the Consolidated Statement of

Financial Position give rise to temporary differences. Pursuant to the liability

method, these temporary differences result in the accounting of:

3 deferred tax assets, when the tax base value is greater than the

carrying value (expected future tax saving); and

3 deferred tax liabilities, when the tax base value is lower than the

carrying value (expected future tax expense).

Deferred tax assets and liabilities are measured at the expected tax rates

for the year during which the asset will be realized or the liability settled,

based on tax rates (and tax regulations) enacted or substantially enacted by

the closing date. They are reviewed at the end of each year, in line with any

changes in applicable tax rates.

Deferred tax assets are recognized for all deductible temporary differences,

tax loss carry-forwards and unused tax credits, insofar as it is probable that

a taxable proﬁt will be available, or when a current tax liability exists to

make use of those deductible temporary differences, tax loss carry-forwards

and unused tax credits, except where the deferred tax asset associated

with the deductible temporary difference is generated by initial recognition

of an asset or liability in a transaction which is not a business combination,

and that, at the transaction date, does not impact earnings, nor tax income

or loss.

For deductible temporary differences resulting from investments in

subsidiaries, joint ventures and other associated entities, deferred tax

assets are recorded to the extent that it is probable that the temporary

difference will reverse in the foreseeable future and that a taxable proﬁt

will be available against which the temporary difference can be utilized.

The carrying value of deferred tax assets is reviewed at each closing date,

and revalued or reduced to the extent that it is more or less probable that a

taxable proﬁt will be available to allow the deferred tax asset to be utilized.

When assessing the probability of a taxable proﬁt being available, account

is taken, primarily, of prior years’ results, forecasted future results, non-

recurring items unlikely to occur in the future and the tax strategy. As such,

the assessment of the group’s ability to utilize tax losses carried forward is

to a large extent judgment-based. If the future taxable results of the group

proved to differ significantly from those expected, the group would be

required to increase or decrease the carrying value of deferred tax assets

with a potentially material impact on the Statement of Financial Position

and Statement of Earnings of the group.

Deferred tax liabilities are recognized for all taxable temporary differences,

except where the deferred tax liability results from goodwill or initial

recognition of an asset or liability in a transaction which is not a business

combination, and that, at the transaction date, does not impact earnings,

tax income or loss.

For taxable temporary differences resulting from investments in subsidiaries,

joint ventures and other associated entities, deferred tax liabilities are

recorded except to the extent that both of the following conditions are

satisﬁed: the parent, investor or venturer is able to control the timing of the

reversal of the temporary difference and it is probable that the temporary

difference will not be reversed in the foreseeable future.

Current tax and deferred tax shall be charged or credited directly to equity,

and not earnings, if the tax relates to items that are credited or charged

directly to equity.

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Note1. Accounting policies and valuation methods

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

1.3.10. Share-based compensation

With the aim of aligning the interests of its executive management and

employees with its shareholders’ interests by providing them with an

additional incentive to improve the company’s performance and increase its

share price on a long-term basis, Vivendi maintains several share-based

compensation plans (share purchase plans, performance share plans and

bonus share plans) or other equity instruments based on the value of the

Vivendi share price (stock options), which are settled either in equity

instruments or in cash. Grants under these plans are approved by the

Management Board and the Supervisory Board. In addition, the deﬁnitive

grant of stock options and performance shares is contingent upon the

achievement of speciﬁc performance objectives set by the Management

Board and the Supervisory Board. Moreover, all granted plans are

conditional upon active employment at the vesting date.

In addition, Dailymotion has set up a long-term incentive plan for certain

key executives. This plan will be settled in cash and the value will be

derived from the growth of Dailymotion’s enterprise value.

Please refer to Note18 for details of the features of these plans and for the

status of the plans initially granted by Gameloft S.E. and by Havas.

Share-based compensation is recognized as a personnel cost at the fair value

of the equity instruments granted. This expense is spread over the vesting

period, i.e., three years for stock option plans and for performance share

plans (two years for performance shares granted before June24, 2014), and

two years for Vivendi’s bonus share plans, other than in speciﬁc cases.

Vivendi uses a binomial model to assess the fair value of such instruments.

This method relies on assumptions updated at the valuation date such as

the calculated volatility of the relevant shares, the discount rate correspon-

ding to the risk-free interest rate, the expected dividend yield, and the

probability of relevant managers and employees remaining employed within

the group until the exercise of their rights.

However, depending on whether the instruments granted are equity-settled

or cash-settled, the valuation and recognition of the expense will differ:

Equity-settled instruments

The expected term of the option granted is deemed to be the mid-

point between the vesting date and the end of the contractual term.

3 The value of the instruments granted is estimated and ﬁxed at grant

date.

3 The expense is recognized with a corresponding increase in equity.

Cash-settled instruments

The expected term of the instruments granted is deemed to be

equal to one-half of the residual contractual term of the instrument

for vested rights, and to the average of the residual vesting period

at the remeasurement date and the residual contractual term of the

instrument for unvested rights.

3 The value of instruments granted is initially estimated at grant date

and is then re-estimated at each reporting date until the payment

date and the expense is adjusted pro rata taking into account the

vested rights at each such reporting date.

3 The expense is recognized as a provision.

3 Moreover, as plans settled in cash are primarily denominated in us

dollars, the value ﬂuctuates based on the eur/usd exchange rate.

Share-based compensation cost is allocated to each operating segment, pro

rata to the numberof equity instruments or equivalent instruments granted

to their managers and employees.

The dilutive effect of stock options and performance shares settled in equity

through the issuance of Vivendi shares which are in the process of vesting

is reﬂected in the calculation of diluted earnings per share.

In accordance with IFRS1, Vivendi elected to retrospectively apply IFRS2 as

of January1, 2004. Consequently, all share-based compensation plans for

which rights remained to be vested as of January1, 2004 were accounted

for in accordance with IFRS2.

1.4. RELATED PARTIES

Group-related parties are those companies over which the group exercises

exclusive control, joint control or significant influence, shareholders

exercising joint control over group joint ventures, non-controlling interests

exercising signiﬁcant inﬂuence over group subsidiaries, Corporate Ofﬁcers,

group management and directors and companies over which the latter

exercise exclusive control, joint control, or signiﬁcant inﬂuence.

The transactions with subsidiaries over which the group exercises control

are eliminated within the intersegment transactions (a list of the group’s

major consolidated entities is set out in Note24). Moreover, commercial

relationships among subsidiaries of the group, aggregated in operating

segments, are conducted on an arm’s length basis on terms and conditions

similar to those which would be offered by third parties. The operating

costs of VivendiSA’s headquarters, after the allocation of a portion of these

costs to each of the group’s businesses, are included in the Corporate

operating segment.

1.5. CONTRACTUAL OBLIGATIONS

ANDCONTINGENTASSETS AND LIABILITIES

Once a year, Vivendi and its subsidiaries prepare detailed reports on all

material contractual obligations, commercial and ﬁnancial commitments and

contingent obligations, for which they are jointly and severally liable. These

detailed reports are updated by the relevant departments and reviewed by

senior management on a regular basis. To ensure completeness, accuracy

and consistency of these reports, some dedicated internal control procedures

are carried out, including (but not limited to) the review of:

3 minutes of meetings of the shareholders, Management Board,

Supervisory Board and committees of the Supervisory Board in

respect of matters such as contracts, litigation, and authorization of

asset acquisitions or divestitures;

3 pledges and guarantees with banks and ﬁnancial institutions;

3 pending litigation, claims (in dispute) and environmental matters as

well as related assessments for unrecorded contingencies with

internal and/or external legal counsels;

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Note2. Major events

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

3 tax examiner’s reports and, if applicable, notices of reassessments

and tax expense analyses for prior years;

3 insurance coverage for unrecorded contingencies with the risk

management department and insurance agents and brokers with

whom the group contracted;

3 related-party transactions for guarantees and other given or

received commitments; and more generally

3 major contracts and agreements.

1.6. NEW IFRSSTANDARDS AND IFRIC

INTERPRETATIONS THAT HAVE BEEN

PUBLISHEDBUT ARE NOT YET EFFECTIVE

Among IFRSstandards and IFRIC interpretations issued by the IASB/IFRSIC

as of the date of approval of these Consolidated Financial Statements, but

which are not yet effective, and for which Vivendi has not elected for an

earlier application, the main standard which may have an impact on Vivendi

is IFRS16 – Leases.

IFRS16 was issued by the IASB on January13, 2016, endorsed by the EU on

October31, 2017 and published in the Official Journal of the EU on

November9, 2017, and mandatorily applies for ﬁnancial years commencing

on or after January1, 2019.

Licenses of intellectual property granted by a lessor and right held by a

lessee under licensing agreement are not within the scope of IFRS16,

Vivendi mainly focused on the accounting of real estate leases contracts for

which Vivendi is the lessee.

On a preliminary basis, Vivendi determined that the lease liability, estimated

as of January1, 2019 in accordance with IFRS16, would amount to

approximately €1.3billion, which does not include at this stage the

potential impact of the consolidation of Editis as from February1, 2019.

Assessment of the final impact of the application of IFRS16 on the

Statement of Earnings, the aggregate comprehensive income, the

Statement of Financial Position, the Statement of Cash Flows (presentation),

and the content of the notesto the Consolidated Financial Statements will

be ﬁnalized during the year ended December31, 2019.

Vivendi has applied IFRS16 with retrospective effect from January1, 2019

using the modiﬁed retrospective approach and without restatement of the

comparative periods in the consolidated ﬁnancial statements.

NOTE2. MAJOR EVENTS

2.1. OPENING OF UNIVERSAL MUSIC GROUP’S

SHARECAPITAL

The sale process for up to 50% of Universal Music Group’s share capital to

one or more strategic partners is moving forward:

3 corporate structure reorganization was completed at the end of

2018;

3 launch of Vendor Due Diligence at the beginning of 2019; and

3 meetings were held with the pre-selected banks. The ﬁnal selection

of the ﬁnancial advisors that will assist Vivendi in ﬁnding the best

partners for Universal Music Group should be completed in the

coming weeks.

A floor price will be set for the entry of partners into Universal Music

Group’s share capital.

2.2. ACQUISITION OF EDITIS

Following the share purchase agreement entered into on November15,

2018 with the Spanish group Planeta, based on an enterprise value of

€900million, on January31, 2019, Vivendi completed the acquisition of

100% of the share capital of Editis, the second-largest French-language

publishing group, representing an €833million outflow, including the

repayment of Editis’s debt. The French Competition Authority had authorized

the transaction unconditionally on January2, 2019. Vivendi has fully

consolidated Editis since February1, 2019.

Editis recorded revenues of approximately €750million.

Vivendi and Editis share a recognized expertise in the development and

management of rights to cultural works and share the same passion for

managing creativity and talent. This acquisition is a logical step in the

building of a large content, media and communications group. It also marks

the return of this French publishing powerhouse to a European group with a

global reach.

Arnaud de Puyfontaine, Chairman of Vivendi’s Management Board, has

taken on the additional role of Chairman of Editis’s Board of Directors. Pierre

Conte has been conﬁrmed as Chief Executive Ofﬁcer.

Editis encompasses around 50 prestigious publishing houses (e.g., Nathan,

Robert Laffont, Julliard, Plon, Belfond, Presses de la Cité, Pocket or Solar).

With a large portfolio of internationally-acclaimed authors, 4,000 new

books published each year and a catalogue of more than 45,000titles, Editis

employs 2,400 people and has leading positions in the fields of fiction,

children’s books, non-ﬁction, graphic and illustrated books, educational and

reference books. Through its subsidiary Interforum, it is also a leader in

book selling/distribution.

2.3. SALE OF INTEREST IN UBISOFT

On March20, 2018, Vivendi announced the sale of its entire 27.27%

interest in Ubisoft (30,489,300 shares) at a price of €66per share,

representing an aggregate amount of €2billion. This interest had been

acquired by Vivendi over the past three years for €794million.

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Note2. Major events

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

In connection with this sale, Vivendi received €1,511million on March23,

2018 (sale of 22,898,391 shares) and €69million on October3, 2018 (sale of

1,040,909 shares). The balance of the sale proceeds that remains to be

received by Vivendi amounts to €429million under the forward sale of its

remaining interest in Ubisoft (6,550,000 shares) which will occur on

March5, 2019. As of December31, 2018, Vivendi recorded in the

Consolidated Statement of Financial Position, a receivable on share

disposal for such amount of the forward sale.

Vivendi has given an undertaking to Ubisoft to sell all the shares it owns by

March7, 2019, the settlement date. In addition, Vivendi made the commit-

ment to refrain from purchasing Ubisoft shares for a period of ﬁve years.

Vivendi realized a capital gain of €1,213million on the sale of the interest in

Ubisoft on March20, 2018. However, of this amount, only the portion

corresponding to the revaluation of the interest in 2018 (€53million), was

recorded in the Statement of Earnings for the year ended December31, 2018,

in accordance with the new IFRS9 accounting standard, applicable since

January1, 2018. The remaining portion of the capital gain (€1,160million)

corresponded to the revaluation of the interest until December31, 2017, which

was recorded in “charges and income directly recognized in equity” as of

December31, 2017, in accordance with the former IAS 39 accounting standard,

and reclassiﬁed as retained earnings as of January1, 2018, as part of the initial

application of the IFRS9. Under IAS 39, which was applicable until

December31, 2017, it would have been reported to proﬁt or loss as part of the

sale that occurred during the ﬁrst half of 2018.

2.4. SALE OF INTEREST IN FNAC DARTY

On January16, 2018, Vivendi entered into a hedging transaction to protect

the value of its 11% interest in Fnac Darty. The hedge involved an over-the-

counter instrument combining a forward sale, based on a reference price of

€91 per share and a share market loan. Vivendi had retained the option to

settle this transaction either in cash or in shares at maturity.

On July2, 2018, Vivendi decided to settle the transaction in shares, which

were delivered on July10, 2018. On July12, 2018, Vivendi received a cash

payment of €267million corresponding to the hedge price of €90.61 per

share, after making an initial investment in May2016 of €159million, i.e.,

€54per share.

Mr.Stéphane Roussel and Mr.Simon Gillham, members of Vivendi’s

Management Board, have agreed to remain members of Fnac Darty’s Board

of Directors.

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Note3. Segment data

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE3. SEGMENT DATA

Vivendi Management evaluates the performance of its business segments

and allocates necessary resources to them based on certain operating

performance indicators (segment earnings and cash ﬂow from operations).

Income from operations and EBITA reﬂect the earnings of each business

segment.

The operating segments presented hereunder are strictly identical to the

information given to Vivendi’s Management Board.

Vivendi’s main businesses are aggregated within the following operating

segments:

3 Universal Music Group: sale of recorded music (digital and

physical), exploitation of music publishing rights, as well as artist

services and merchandising;

3 Canal+ Group: publishing and distribution of premium and

thematic pay-TV and free-to-air channels in France, Poland, Africa

and Asia, as well as production, sales and distribution of movies

and TV series.

3 Havas: communications group covering all the communications

disciplines (creativity, media expertise and healthcare/wellness);

3 Gameloft: creation and publishing of downloadable video games

for mobile phones, tablets, triple-play boxes and smart TVs;

3 Vivendi Village: Vivendi Ticketing (in Europe and the United States

through See Tickets, Digitick and Paylogic), the companies that own

and manage all Paddington intellectual property rights (except for

the publishing rights), live performance through Olympia Production,

Festival Production, the venues in Paris (L’Olympia and Théâtre de

L’Œuvre) and in Africa (CanalOlympia), as well as MyBestPro, which

was sold on December21, 2018;

3 New Initiatives: Dailymotion (video content aggregation and

distribution platform), Vivendi Content (new content creation unit)

and Group Vivendi Africa (development of ultra-high-speed Internet

service in Africa);

3 Corporate: central services.

Intersegment commercial operations are conducted on an arm’s-length

basis on terms and conditions similar to those which would be offered by

third parties.

3.1. MAIN AGGREGATES OF THE STATEMENT OF EARNINGS BYOPERATINGSEGMENT

Revenues by activity

(inmillions of euros)

Year ended December31,

2018 2017

Intellectual property licensing 6,508 6,171

Subscription services 4,474 4,493

Advertising, merchandising and other 3,008 1,898

Elimination of intersegment transactions (58) (44)

Revenues 13,932 12,518

Revenues by geographic area

Revenues are broken down by customer location.

(inmillions of euros)

Year ended December31,

2018 2017

France 4,280 31% 4,402 35%

Rest of Europe 3,282 24% 2,871 23%

Americas 4,395 31% 3,527 28%

Asia/Oceania 1,373 10% 1,178 10%

Africa 602 4% 540 4%

Revenues 13,932 100% 12,518 100%

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Main aggregates of the Statement of Earnings

(inmillions of euros)

Year ended December31,

2018 2017

Revenues

Universal Music Group 6,023 5,673

Canal+ Group 5,166 5,198

Havas 2,319 1,211

Gameloft 293 320

Vivendi Village 123 109

New Initiatives 66 51

Elimination of intersegment transactions (58) (44)

13,932 12,518

Income from operations

Universal Music Group 946 798

Canal+ Group 429 349

Havas 258 135

Gameloft 4 10

Vivendi Village (9) (6)

New Initiatives (79) (87)

Corporate (110) (101)

1,439 1,098

Restructuring charges

Universal Music Group (29) (17)

Canal+ Group (28) (49)

Havas (30) (15)

Gameloft (4) (1)

Vivendi Village (2) (2)

New Initiatives (3) (3)

Corporate (19) (1)

(115) (88)

Income/(charges) related to share-based compensation plans

Universal Music Group (4) (9)

Canal+ Group (3) (6)

Havas (12) (3)

Gameloft 2 (5)

Vivendi Village - -

New Initiatives - -

Corporate (5) (8)

(22) (31)

Other non-current operating charges and income

Universal Music Group (11) (11)

Canal+ Group 2 6

Havas (1) (6)

Gameloft - -

Vivendi Village 2 (10)

New Initiatives (17) (2)

Corporate 11 13

(14) (10)

Adjusted earnings before interest and income taxes (EBITA)

Universal Music Group 902 761

Canal+ Group 400 300

Havas 215 111

Gameloft 2 4

Vivendi Village (9) (18)

New Initiatives (99) (92)

Corporate (123) (97)

1,288 969

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Note3. Segment data

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Reconciliation of EBIT to EBITA and to income from operations

(inmillions of euros)

Year ended December31,

2018 2017

EBIT (a) 1,182 1,018

Adjustments

Amortization of intangible assets acquired through business combinations 111 122

Impairment losses on intangible assets acquired through business combinations (a) 2 2

Reversal of reserve related to the Securities Class Action litigation in the United States (a) - (27)

Income from equity afﬁliates – operational (a) (7) (146)

EBITA 1,288 969

Adjustments

Restructuring charges (a) 115 88

Charges related to share-based compensation plans 22 31

Other non-current operating charges and income 14 10

Income from operations 1,439 1,098

(a) As reported in the Consolidated Statement of Earnings.

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

3.2. STATEMENT OF FINANCIAL POSITION BY OPERATING SEGMENT

Segment assets and liabilities

(inmillions of euros) December31, 2018 January1, 2018

Segment assets (a)

Universal Music Group 9,715 8,512

Canal+ Group 7,624 7,636

Havas 5,301 5,319

Gameloft 706 713

Vivendi Village 251 225

New Initiatives 542 551

Corporate 5,392 8,296

Of which investments in equity afﬁliates 3,130 4,242

listed equity securities (b) 1,363 3,751

29,531 31,252

Segment liabilities (c)

Universal Music Group 4,320 3,647

Canal+ Group 2,451 2,533

Havas 3,678 3,761

Gameloft 70 71

Vivendi Village 167 139

New Initiatives 70 64

Corporate 933 957

11,689 11,172

(a) Segment assets include goodwill, content assets, other intangible assets, property, plant and equipment, equity afﬁliates, ﬁnancial assets, inventories and trade

accounts receivable, and other.

(b) The decrease in the amount of listed equity securities mainly related to the sale of Vivendi’s interest in Ubisoft (on March20, 2018), Fnac Darty (on July10, 2018) and

Telefonica (in Novemberand December2018): please refer to Notes2 and 12.

Additional operating segment data is presented in the following notes: Note9 “Goodwill” and Note10 “Content assets and commitments”.

Segment assets by geographic area

(inmillions of euros) December31, 2018 January1, 2018

France 10,050 34% 11,509 37%

Rest of Europe 8,911 30% 10,082 32%

Americas 9,487 32% 8,724 28%

Asia/Oceania 812 3% 720 2%

Africa 271 1% 217 1%

Segment assets 29,531 100% 31,252 100%

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Note3. Segment data

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Capex, depreciation and amortization

(inmillions of euros)

Year ended December31,

2018 2017

Capital expenditures, net (capex net) (a)

Universal Music Group 110 63

Canal+ Group 166 144

Havas 38 21

Gameloft 6 6

Vivendi Village 7 11

New Initiatives 10 13

Corporate 4 1

341 259

Increase in tangible and intangible assets

Universal Music Group 127 73

Canal+ Group 192 138

Havas 37 21

Gameloft 6 7

Vivendi Village 7 15

New Initiatives 10 9

Corporate 1 1

380 264

Depreciation of tangible assets

Universal Music Group 46 53

Canal+ Group 133 154

Havas 38 20

Gameloft 6 8

Vivendi Village 4 2

New Initiatives 6 6

Corporate 1 -

234 243

Amortization of intangible assets excluding those acquired through business combinations

Universal Music Group - -

Canal+ Group 72 66

Havas 8 4

Gameloft 1 1

Vivendi Village - 13

New Initiatives 25 10

Corporate - -

106 94

Amortization of intangible assets acquired through business combinations

Universal Music Group 80 84

Canal+ Group 16 12

Havas - 1

Gameloft 14 21

Vivendi Village - 2

New Initiatives 1 2

Corporate - -

111 122

Impairment losses on intangible assets acquired through business combinations

Universal Music Group - -

Canal+ Group - 2

Havas - -

Gameloft - -

Vivendi Village - -

New Initiatives 2 -

Corporate - -

2 2

(a) Relates to cash used for capital expenditures, net of proceeds from sales of property, plant and equipment, and intangible assets.

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Note5. Financial charges and income

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE4. EBIT

PERSONNEL COSTS AND AVERAGE EMPLOYEE NUMBERS

(inmillions of euros) Note

Year ended December31,

2018 2017

Salaries 2,538 1,962

Social security and other employment charges 537 451

Capitalized personnel costs (16) (15)

Wages and expenses 3,059 2,398

Share-based compensation plans

18 22 31

Employee beneﬁt plans

17 88 69

Other 52 31

Personnel costs 3,221 2,529

Annual average numberof full-time equivalent employees (inthousands) 41.6 32.1

ADDITIONAL INFORMATION ON OPERATING EXPENSES

Advertising costs amounted to €371million in 2018 (compared to

€379million in 2017).

Expenses recorded in the Statement of Earnings, with respect to service

contracts related to satellite transponders amounted to €102million in 2018

(compared to €104million in 2017).

Net expense recorded in the Statement of Earnings, with respect to

operating leases amounted to €274million in 2018 (compared to

€202million in 2017). This increase of €72million mainly resulted from the

consolidation of Havas on July3, 2017.

Research and development costs amounted to a net charge of €135million

in 2018 (compared to €154million in 2017).

TAXES ON PRODUCTION

Taxes on production amounted to €118million in 2018 (compared to

€149million in 2017), of which €33million related to taxes on television

services (compared to €63million in 2017).

NOTE5. FINANCIAL CHARGES AND INCOME

INTEREST

(inmillions of euros) Note

Year ended December31,

2018 2017

(Charge)/Income

Interest expense on borrowings (a)

19 (64) (68)

Interest income from cash, cash equivalents and investments 17 15

Interest (47) (53)

Fees and premiums on borrowings and credit facilities issued (2) (2)

(49) (55)

(a) Included the annual coupon of the €700million bond issued by VivendiSA and maturing in December2019 for €34million in 2018 and in 2017 (please refer to Note19.2).

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Note6. Income taxes

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

OTHER FINANCIAL INCOME AND CHARGES

(inmillions of euros) Note

Year ended December31,

2018 2017

Capital gain on ﬁnancial investments (a) 377 12

Effect of undiscounting assets (b) 18 5

Expected return on plan assets related to employee beneﬁt plans

17.2 11 10

Foreign exchange gain 10 7

Change in value of derivative instruments 2 8

Other - 1

Other ﬁnancial income 418 43

Write-down of the Telecom Italia shares accounted for under the equity method

11.2 (1,066) -

Downside adjustment on ﬁnancial investments - (47)

Effect of undiscounting liabilities (b) (20) (12)

Interest cost related to employee beneﬁt plans

17.2 (27) (22)

Fees and premiums on borrowings and credit facilities issued (2) (2)

Foreign exchange loss (10) (9)

Other (56) (51)

Other ﬁnancial charges (1,181) (143)

Net total (763) (100)

(a) Other ﬁnancial income included the revaluation between January1 and December31, 2018 of the interests in Spotify and Tencent Music for an aggregate amount of

€312million, as well as in Ubisoft for €53million (please refer to Note2.3), reported to proﬁt or loss in accordance with the new accounting standard IFRS9, applicable

since January1, 2018.

(b) In accordance with applicable accounting standards, where the effect of the time value of money is material, assets and liabilities are initially recorded in the Statement

of Financial Position in an amount relating to the present value of the expected revenues and expenses. At the end of each subsequent period, the present value of such

assets and liabilities is adjusted to account for the passage of time.

NOTE6. INCOME TAXES

6.1. FRENCH TAX GROUP AND CONSOLIDATED

GLOBALPROFIT TAX SYSTEMS

VivendiSA benefits from the French Tax Group System and, up until

December31, 2011 inclusive, it benefited from the Consolidated Global

Proﬁt Tax System pursuant to Article209 quinquies of the French Tax Code.

As from January1, 2012, VivendiSA benefits only from the French Tax

Group System.

3 Under the French Tax Group System, Vivendi is entitled to consoli date

its own tax profits and losses with the tax profits and losses of the

French subsidiaries that are at least 95% owned, directly or indirectly,

by it. As of December31, 2018, this mainly applies to Universal Music

Group, Canal+ Group, Havas and Gameloft entities in France, as well

as the companies involved in the group’s development projects in

France (e.g., Vivendi Village and Dailymotion).

3 Up until December31, 2011, the Consolidated Global Profit Tax

System enabled Vivendi to obtain a tax authorization. This allowed

the company to consolidate its own tax proﬁts and losses with the

tax proﬁts and losses of subsidiaries that were at least 50% owned,

directly or indirectly, by it and that were also located in France or

abroad. This authorization was granted for an initial five-year

period– from January1, 2004 to December31, 2008 – and was

then renewed, on May19, 2008, for a three-year period – from

January1, 2009 to December31, 2011. As a reminder, on July6,

2011, Vivendi lodged a request with the French Ministry of Finance

to renew its authorization to use the Consolidated Global Proﬁt Tax

System for a three-year period – from January1, 2012 to

December31, 2014.

3 In 2011, pursuant to changes in French Tax Law, the Consolidated

Global Proﬁt Tax System was terminated as of September6, 2011,

and the deduction for tax losses carried forward was capped at 60%

of taxable income. Since 2012, the deduction for tax losses carried

forward has been capped at 50% of taxable income and the

deductibility of interest limited to 85% of financial charges, net

(reduced further to 75% as from January1, 2014).

The French Tax Group and Consolidated Global Proﬁt Tax Systems have the

following impact on the valuation of Vivendi’s tax attributes (tax losses,

foreign tax receivables and tax credits carried forward):

3 In 2012, Vivendi, considering that it was entitled to use the Consolidated

Global Proﬁt Tax System up until the end of the authorization period

granted by the French Ministry of Finance (i.e., until December31,

2011), ﬁled a contentious claim for a €366million refund in respect of

ﬁscal year 2011. In a decision dated October25, 2017, marking the

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Note6. Income taxes

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

end of legal proceedings brought before administrative courts, the

French Council of State (Conseil d’État) recognized that Vivendi had a

legitimate expectation that it would be afforded the Consolidated

Global Profit Tax System for the entire period covered by the

authorization, including for the ﬁscal year ending December31, 2011.

Given that the power of final adjudication is vested in the French

Council of State and that its decision is not subject to appeal, the

amount of €366million paid to Vivendi, coupled with moratorium

interest of €43million, were definitively acquired by Vivendi. As a

result, Vivendi recorded a tax income of €409million for the ﬁscal year

ended December31, 2017.

3 Moreover, considering that Vivendi’s foreign tax receivables available

upon the exit from the Consolidated Global Proﬁt Tax System may be

carried forward after the end of the authorization period, Vivendi

requested a refund of the tax paid in respect of the ﬁscal year ended

December31, 2012. On May8, 2013, Vivendi received a refund of

€201million, which was subsequently challenged by the tax

authorities in connection with a tax audit. Consequently, Vivendi

provisioned €208million for the associated risk in its Financial

Statements for the year ended December31, 2012, increasing the

amount to €221million as of December31, 2013. In its Financial

Statements for the year ended December31, 2014, Vivendi

maintained and increased this provision by €11million (the amount

of additional default interest), totaling an amount of €232million.

This was subsequently decreased to €228million as of December31,

2015 after the deduction of ordinary tax credits. In connection with

this audit, on March31, 2015, Vivendi made a payment of

€321million, relating to the €221million and €11million mentioned

above. This amount increased a further €89million due to additional

penalties.

3 On June29, 2015, after the tax audit was completed, Vivendi

challenged the tax authorities in regard to the tax payment, the

default interest and the penalties, for which no provision had been

accrued upon the recommendation of its advisors. Vivendi has since

brought this case before the Administrative Court of Montreuil. On

March16, 2017, the Administrative Court of Montreuil ruled in favor

of Vivendi. Pursuant to this decision, on April18, 2017, Vivendi

received (i) a €315million refund relating to the principal tax amount

due in 2012 (€218million), as well as default interest (€10million)

and additional penalties (€87million), and (ii) moratorium interest

(€31million), which totaled €346million. The Ministry appealed this

decision with respect to the principal tax amount due; therefore, in

its Financial Statements for the year ended December31, 2017,

Vivendi maintained the provision relating to the principal refund

(€218million), the default interest (€10million), and the moratorium

interest (€23million), i.e., a total provision of €251million. Given

that the Ministry’s appeal did not include penalties (€87million),

Vivendi recorded a tax income of €9million in its Financial

Statements as of December31, 2017, relating to the portion of

moratorium interest irrevocably earned by Vivendi. On November22,

2018, the Versailles Administrative Court of Appeal quashed the

March16, 2017 decision of the of the Administrative Court of

Montreuil and ordered Vivendi to pay the amount of the additional

contributions to which it was subject for the year ended

December31, 2012. However, it granted discharge of the default

interest charged to Vivendi. In its ﬁnancial statements for the ﬁscal

year ended December31, 2018, Vivendi recorded a net income of

due to the discharge of default interest (€10million) and the

corresponding moratorium interest (€2million), reducing the total

amount provisioned to €239million (€218million with respect to the

principal amount and €21million with respect to moratorium

interest). On December31, 2018, Vivendi ﬁled an appeal with the

French Council of State requesting the quashing of the decision of

the Versailles Administrative Court of Appeal. On February11, 2019,

pursuant to a decision of the Versailles Administrative Court of

Appeal, Vivendi received a request for repayment from the tax

authorities in the amount of €239million. Vivendi has 30 days to

satisfy this request. Considering that the amount is provisioned in

Vivendi’s Financial Statements, this payment will have no impact on

the Statement of Earnings.

3 On June15, 2017, following the Administrative Court of Montreuil

ruling of March16, 2017, Vivendi made a claim for the repayment of

the tax amount due for the year ended December31, 2015

(€203million). Vivendi recorded a provision as of December31,

2017 in the amount of the refund requested (€203million) and

maintained this provision in its Financial Statements for the year

ended December31, 2018 pending the decision of the French

Council of State (Conseil d’État) mentioned above.

3 In the Financial Statements for the year ended December31, 2018, the

tax results of the subsidiaries comprised within the scope of

VivendiSA’s French Tax Group System are calculated based on

estimates. As a result, the amount of tax attributes as of December31,

2018 could not be reliably determined. As of December31, 2018,

taking into account the impact of the estimated 2018 tax results and

before the effects of the ongoing tax audits on the amount of tax

attributes (please refer to Note6.5), it is anticipated that VivendiSA

will likely be able to achieve €781million in tax savings from tax

attributes (based on the income tax rate applicable as of January1,

2019, i.e., 32.02%). At a rate of 25.83% applicable in 2022, it is

anticipated that Vivendi would achieve €630million in tax savings from

tax attributes.

3 VivendiSA values its tax attributes on the basis of one year’s

forecasted results, taken from the following year’s budget. On this

basis, in 2019, it is anticipated that Vivendi will likely be able to

achieve tax savings of €114million from the French Tax Group System

(based on the income tax rate applicable in 2019, i.e., 32.02%).

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Note6. Income taxes

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

6.2. PROVISION FOR INCOME TAXES AND INCOME TAX PAID BYGEOGRAPHICAREA

Provision for income taxes

(inmillions of euros)

Year ended December31,

2018 2017

(Charge)/Income

Current

France (16) (a) 572

Rest of Europe (68) (37)

United States (b) (98) (16)

Rest of the world (98) (87)

(280) 432

Deferred

France 12 (c) (116)

Rest of Europe (d) (89) -

United States (c) (e) (11) (e) 34

Rest of the world 11 5

(77) (77)

Provision for income taxes (357) 355

(a) Included a current tax income of €409million from litigation relating to the Consolidated Global Proﬁt Tax System of 2011, where VivendiSA secured a favorable

settlement. It also included the current tax income of €243million relating to the refund received by VivendiSA and its subsidiaries of the amounts paid in respect of the

3% tax on dividend distributions.

(b) In 2018, it included a federal tax charge which reﬂected the impact of the tax reform in the United States as from January1, 2018.

(c) Included a deferred tax charge of -€106million relating to the write-off of deferred tax assets relating to tax losses carried forward by Havas in France.

(d) In accordance with the new accounting standard IFRS9, applicable since January1, 2018, it included the deferred tax charge relating to the revaluation through proﬁt

or loss of the interest in Spotify and Tencent Music for an aggregate amount of -€72million.

(e) Included a net deferred tax income of €79million following changes in the federal corporate tax rate applicable in the United States as from January1, 2018.

The tax reform initiated in 2017 introduces significant changes in the

calculation of the corporate tax in the United States. As from January1,

2018, the federal corporate tax rate has been reduced from 35% to 21%.

However, this rate reduction is accompanied by a widening of the taxable

base through the introduction of a minimum tax on income earned in

countries with low-tax rates (minimum tax on global intangible low-taxed

income “GILTI”) and the introduction of a tax mechanism expenditures that

erode s the tax bases (base erosion and anti-abuse tax “BEAT”). More

generally, the new law limits the deduction of expenses previously

deductible without limitation. The impacts of this new legislation recorded

as of December31, 2017 and December31, 2018, reﬂect our best estimate

pending the publication of instructions commenting on this reform and

clariﬁcation on the interpretation of certain previously issued instructions.

The amounts recorded will therefore be adjusted in 2019, particularly in the

light of changes in our interpretations and assumptions, as well as further

clariﬁcations or instructions from the US legislator or the US tax authorities.

Income tax paid

(inmillions of euros)

Year ended December31,

2018 2017

France (76) (a) 622

Rest of Europe (47) (20)

United States (43) (53)

Rest of the world (96) (78)

Income tax (paid)/collected (262) 471

(a) Included an inflow of €346million as part of the litigation settlement relating to foreign tax receivables utilized by VivendiSA in fiscal year 2012, as well as a

€223million inﬂow relating to the refund to VivendiSA of amounts paid in relation to the 3% tax on dividend distributions.

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Note6. Income taxes

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

6.3. EFFECTIVE TAX RATE

(inmillions of euros, except %)

Year ended December31,

2018 2017

Earnings (before non-controlling interests) 157 1,249

Eliminations

Income from equity afﬁliates (129) (146)

Earnings from discontinued operations - -

Provision for income taxes 357 (355)

Earnings from continuing operations before provision for income taxes 385 748

French statutory tax rate 34.43% 34.43%

Theoretical provision for income taxes based on French statutory tax rate (133) (258)

Reconciliation of the theoretical and effective provision for income taxes

Earnings tax rates differences (a) 212 41

Impacts of the changes in tax rates (2) (b) 89

Use or recognition of tax losses 222 178

Depreciation or non-recognition of tax losses (98) (c) (258)

Changes in deferred tax assets related to VivendiSA’s French Tax Group

and the Consolidated Global Proﬁt Tax Systems (2) 3

Adjustments to tax expense from previous years 8 9

Capital gain or loss on the divestiture of or downside adjustments on ﬁnancial investments or businesses 18 -

Favorable settlement of the litigation related to the Consolidated Global Proﬁt Tax System of 2011 - (d) 409

3% tax on VivendiSA’s dividends - (8)

Refunds with respect to the 3% tax on dividends paid by VivendiSA and its subsidiaries - (e) 243

Write-down of the Telecom Italia shares accounted for under the equity method (f) (367) -

Other (215) (93)

Provision for income taxes (357) 355

Effective tax rate 92.6% -47.5%

(a) Included for 2018, a favorable rate effect following the change in the federal corporate tax rate applicable in the United States. The tax reform initiated in 2017

introduces signiﬁcant changes in the calculation of the corporate tax in the United States. As from January1, 2018, the federal corporate tax rate has been reduced from

35% to 21%. However, this rate reduction is accompanied by a widening of the taxable base through the introduction of a minimum tax on income earned in countries

with low-tax rates (minimum tax on global intangible low-taxed income “GILTI”) and the introduction of a tax mechanism expenditures that erode s the tax bases (base

erosion and anti-abuse tax “BEAT”). More generally, the new law limits the deduction of expenses previously deductible without limitation. The impacts of this new

legislation recorded as of December31, 2017 and December31, 2018, reﬂect our best estimate pending the publication of instructions commenting on this reform and

clariﬁcation on the interpretation of certain previously issued instructions. The amounts recorded will therefore be adjusted in 2019, particularly in the light of changes

in our interpretations and assumptions, as well as further clariﬁcations or instructions from the US legislator or the US tax authorities.

(b) Included a net deferred tax income of €79million following changes in the federal corporate tax rate applicable in the United States as from January1, 2018.

(c) Included a deferred tax charge of -€119million corresponding to the write-off of deferred tax assets relating to tax losses carried forward by Havas, primarily in France.

(d) Related to a current tax income of €409million, a result of the litigation relating to the Consolidated Global Proﬁt Tax System of 2011, where VivendiSA secured

favorable settlement (please refer to Note6.1).

(e) Related to a current tax income of €243million from the refund to Vivendi and its subsidiaries of amounts paid in relation to the 3% tax on dividend distributions (please

refer to Note6.5).

(f) In 2018, the result included the write-down of the value of the Telecom Italia shares accounted for under the equity method, for €1,066million, non-taxable.

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Note6. Income taxes

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

6.4. DEFERRED TAX ASSETS AND LIABILITIES

Changes in deferred tax assets/(liabilities), net

(inmillions of euros)

Year ended December31,

2018 2017

Opening balance of deferred tax assets/(liabilities), net (a) 38 26

Consolidation of Havas - 106

Provision for income taxes (77) (77)

Charges and income directly recorded in equity (13) (7)

Other business combinations - (27)

Changes in foreign currency translation adjustments and other (26) 15

Closing balance of deferred tax assets/(liabilities), net (78) 36

(a) As of January1, 2018, deferred tax assets included the impact of the restatements related to the application of IFRS9 for +€2million (please refer to Note28.2).

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Note6. Income taxes

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Components of deferred tax assets and liabilities

(inmillions of euros) December31, 2018 January1, 2018

Deferred tax assets

Recognizable deferred taxes

Tax attributes – VivendiSA Tax Group (a) (b) 781 875

Tax attributes – US Tax Group (a) (c) 214 233

Tax attributes – Havas Group (a) (d) 274 315

Tax attributes – Other subsidiaries (a) 279 441

Other 693 589

Of which non-deductible provisions 115 94

employee beneﬁts 169 186

working capital 177 156

Total gross deferred taxes 2,241 2,453

Deferred taxes, unrecognized

Tax attributes – VivendiSA Tax Group (a) (b) (667) (755)

Tax attributes – US Tax Group (a) (c) (214) (233)

Tax attributes – Havas Group (a) (d) (249) (297)

Tax attributes – Other subsidiaries (a) (255) (396)

Other (181) (145)

Total deferred tax assets, unrecognized (1,566) (1,826)

Recorded deferred tax assets 675 627

Deferred tax liabilities

Asset revaluations (e) (335) (340)

Other (418) (249)

Recorded deferred tax liabilities (753) (589)

DEFERRED TAX ASSETS/(LIABILITIES), NET (78) 38

(a) The amounts of tax attributes in this table, were estimated at the end of the relevant ﬁscal years. In jurisdictions which are signiﬁcant to Vivendi, mainly France and the

United States, tax returns are ﬁled on May1 and September15 at the latest of the following year, respectively. As a result, the amount of tax attributes shown in this

table and the amount reported to tax authorities may differ, and if necessary, may need to be adjusted in this table at the end of the following year.

(b) Related to deferred tax assets recognizable in respect of tax attributes by VivendiSA as head of the French Tax Group (please refer to Note6.1); i.e., €781million as of

December31, 2018 (compared to €875million as of December31, 2017), in respect of tax losses only, taking into account the estimated impact (-€36million) of 2018

transactions (taxable income and use or expiration of tax credits) and the change in the income tax rate in France, which was reduced from 34.43% to 32.02% as from

January1, 2019 (-€58million), but before taking into account the ﬁnal contingent outcome of ongoing tax audits (please refer to Note6.5). In France, tax losses can be

carried forward indeﬁnitely and Vivendi considers that the foreign tax receivables can be carried forward for a minimum period of ﬁve years upon exit from the

Consolidated Global Proﬁt Tax System.

(c) Primarily related to deferred tax assets recognizable in respect of tax credits carried forward by Universal Music Group, Inc. in the United States as head of the US Tax

Group, i.e., $244million as of December31, 2018 (compared to $278million as of December31, 2017), taking into account the estimated impact (-$34million) of 2018

transactions, but before taking into account the ﬁnal contingent outcome of ongoing tax audits (please refer to Note6.5). The cumulative amount of ordinary tax losses

carried forward by the group in the United States was fully consumed as of December31, 2017.

(d) As of December31, 2017, Havas recorded a deferred tax charge of -€119million from the write-off of deferred tax assets relating to tax losses carried forward, primarily

in France. HavasSA’s Tax Group ended on December31, 2017. As from January1, 2018, HavasSA and its subsidiaries located in France have been included in

VivendiSA’s Tax Group.

(e) These tax liabilities, stemming from asset revaluations and resulting from the purchase price allocation of entities acquired by the group, are cancelled upon amortization

or divestiture of the related assets and do not and will not generate any current tax liabilities.

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Note6. Income taxes

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

6.5. TAX LITIGATION

In the normal course of business, VivendiSA and its subsidiaries are subject

to tax audits by the relevant tax authorities in the countries in which they

conduct or have conducted business. Various tax authorities have proposed

adjustments to the ﬁnancial results ﬁled by Vivendi and its subsidiaries for

ﬁscal year 2017 and prior years, under statutes of limitation applicable to

Vivendi and its subsidiaries. The potential charges that may result from

these audits give rise to provisions to the extent that they are considered

probable and quantiﬁable. Regarding ongoing tax audits, no provision is

recorded where the impact which may result from an unfavorable outcome

cannot be reliably assessed. To date, Vivendi Management believes that

these tax audits are unlikely to have a material impact on the group’s

ﬁnancial position or liquidity.

Regarding VivendiSA, in respect of the Consolidated Global Profit Tax

System, the tax audit for ﬁscal years 2006, 2007, 2008, 2009 and 2010 is

still ongoing, as are the tax audits for ﬁscal years 2011 and 2012, relating to

VivendiSA or its tax group. Under these audits, the tax authorities

challenged Vivendi’s right to use its foreign tax receivables for the payment

of its 2012 tax obligation year. Similarly, Vivendi requested the reimbur-

sement of its 2015 tax payment by contentious claim, requesting the

deduction of these foreign tax receivables. In any event, the impact in

relation to the use of foreign tax receivables upon exit from the Global Proﬁt

Tax System of 2012 and 2015 were recorded as provisions for €239million

and €203million, respectively.

More specifically, regarding the tax audit for fiscal years 2008 to 2011,

VivendiSA is subject to a rectification procedure for which the tax

authorities challenge the accounting and ﬁscal treatment of NBC Universal

shares received in consideration of the sale of Vivendi Universal

Entertainment shares in 2004. Additionally, the tax authorities challenged

the deduction of the €2.4billion loss recorded as part of the sale of these

shares in 2010 and 2011. The National Direct Tax System (Commission

Nationale des Impôts Directs) before which proceedings were brought,

rendered its opinion on December9, 2016, which was notiﬁed to VivendiSA

on January13, 2017, in which it declared the discontinuation of the adjust-

ments suggested by the tax authorities. Moreover, as the disagreement

found its basis in an administrative doctrine, Vivendi asked for the opinion

to be cancelled on the grounds that it was tantamount to adding to the law.

On May29, 2017, the French Council of State (Conseil d’État) favorably

received Vivendi’s appeal for misuse of authority. This audit is still ongoing

and Vivendi Management believes that it has solid legal grounds to defend

its positions for determining the taxable income for the ﬁscal years under

audit.

In respect of the US Tax Group, the tax audit for ﬁscal years 2008, 2009 and

2010 were settled through a tax reimbursement of $6million. The tax audit

for fiscal years 2011, 2012, and 2013 is ongoing. On January31, 2018,

Vivendi was informed by the US tax authorities that ﬁscal years 2014, 2015

and 2016 were under audit. Vivendi Management believes that it has solid

legal grounds to defend its positions for determining the taxable income for

the ﬁscal years under audit.

Regarding the additional tax contribution of 3% on dividend distributions

paid by VivendiSA for a total amount of €214million in relation to the

dividends paid in ﬁscal year 2013 and in ﬁscal years 2015 to 2017, these

contributions were challenged before the tax authorities and the

Administrative Court of Montreuil. Following a decision of the French

Constitutional Council (Conseil constitutionnel) dated October6, 2017,

pursuant to which it determined that the 3% tax on dividend distributions

was unconstitutional, the tax authorities proceeded to carry out a rebate of

the litigious contributions and to their refund. Consequently, Vivendi

withdrew from its actions before the Administrative Court. In addition, in

accordance with applicable law, these refunds gave rise to the payment of

moratorium interest to Vivendi, to be applied through the effective

restitution date. In its Financial Statements for the year ended December31,

2017, VivendiSA recorded a tax income of €207million from the litigation

settlement, and moratorium interest of €24million. Regarding the tax

contributions paid by Canal+ Group (€4million) and Havas (€7million), these

contributions have been challenged before the tax authorities. Canal+

Group and Havas were reimbursed, with moratorium interest of €1million.

Regarding the dispute over the validity of the merger between SFR and

Vivendi Telecom International (VTI) dated December2011, which entails a

potential challenge of the integration of SFR within the Vivendi tax group in

respect of ﬁscal year 2011, SFR was informed, in a letter dated November8,

2017, that the tax authorities were withdrawing their adjustment proposal,

conﬁrming Vivendi’s position that it had solid legal grounds upon which to

challenge the tax authorities’ position.

With regard to the Havas Group, HavasSA ﬁled a contentious claim for the

refund of the withholding tax paid by the company between 2000 and 2002

on the redistribution of dividends from European subsidiaries (i.e.,

€38million). Following the filing of the case before the Administrative

Court, the Paris Court of Appeal and the Versailles Court of Appeal, on

July28, 2017, the French Council of State (Conseil d’État) found that the

appeal in cassation lodged by Havas against the decision of the Versailles

Court of Appeal was inadmissible. This decision irrevocably ended the tax

litigation and prevented Havas from receiving a refund of the withholding

tax. To restore Havas’s right to compensation, three combined actions were

instituted: (i) a claim before the European Commission, (ii) a ﬁling before the

European Court of Human Rights, and (iii) a claim for compensation under

an action for damages against the state. Vivendi Management believes that

it has solid legal grounds to defend its positions for determining the taxable

income for the ﬁscal years under audit.

In addition, under HavasSA and Havas International’s tax audits for ﬁscal

years 2002 to 2005, the French Administration rectiﬁed the tax result of

HavasSA tax group, thereby reducing the overall deﬁcit reported by the tax

group by €267million. This rectification was challenged before the tax

authorities. Following filings made before the Administrative Court of

Montreuil and the Versailles Court of Appeal, on July12, 2017, the French

Council of State (Conseil d’État) overturned the Court of Appeal’s ruling,

which was unfavorable to Havas, and remanded the case to that same

court. On August28, 2017, Havas ﬁled an appeal before the Versailles Court

of Appeal. In a decision dated July3, 2018, the Versailles Court of Appeal

confirmed Havas’s positions and decided to restore HavasSA’s deficit

results of €267million.

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Note7. Earnings per share

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE7. EARNINGS PER SHARE

Year ended December31,

2018 2017

Basic Diluted Basic Diluted

Earnings (inmillions of euros)

Earnings from continuing operations attributable to VivendiSA shareowners 127 127 1,216 (a) 1,182

Earnings from discontinued operations attributable to VivendiSA shareowners - - - -

Earnings attributable to VivendiSA shareowners 127 127 1,216 1,182

Numberof shares (inmillions)

Weighted average numberof shares outstanding (b) 1,263.5 1,263.5 1,252.7 1,252.7

Potential dilutive effects related to share-based compensation - 5.1 - 4.8

Adjusted weighted average numberof shares 1,263.5 1,268.6 1,252.7 1,257.5

Earnings per share (in euros)

Earnings from continuing operations attributable to VivendiSA shareowners per share 0.10 0.10 0.97 0.94

Earnings from discontinued operations attributable to VivendiSA shareowners per share - - - -

Earnings attributable to VivendiSA shareowners per share 0.10 0.10 0.97 0.94

(a) Related only to the impact for Vivendi of Telecom Italia’s dilutive instruments, calculated based on the ﬁnancial information publicly disclosed by Telecom Italia with a

three-month reporting lag (please refer to Note11.2).

(b) Net of the weighted average numberof treasury shares (38.5million shares in 2018, compared to 37.5million shares in 2017).

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Note8. Charges and income directly recognized in equity

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE8. CHARGES AND INCOME DIRECTLY RECOGNIZED IN EQUITY

DETAILS OF CHANGES IN EQUITY RELATED TO OTHER COMPREHENSIVE INCOME

(inmillions of euros)

Items not subsequently

reclassiﬁed to proﬁt or loss

Items to be subsequently

reclassiﬁed to proﬁt or loss

Actuarial

gains/(losses)

related to

employee

deﬁned beneﬁt

plans (a)

Financial

assets at

fairvalue

through other

comprehensive

income

Unrealized gains/(losses)

Foreign

currency

translation

adjustments

Other

comprehensive

income from

equity

afﬁliates, net

Other

comprehensive

income

Available-

for-sale

securities

Hedging

instruments (b) Total

Balance as of December31, 2016 (247) - 489 44 533 365 113 764

Charges and income directly

recognized in equity 29 - (c) 650 35 685 (848) (31) (165)

Items to be reclassiﬁed

to proﬁt or loss na - - (3) (3) - - (3)

Tax effect - - 2 1 3 - - 3

Consolidation of Havas (54) - - - - (14) (1) (69)

Balance as of December31, 2017 (272) - 1,141 77 1,218 (497) (d) 81 530

Restatements related

to the application of IFRS9 (e) - (198) (1,141) 1 (1,140) - - (1,338)

Restatements related to the

application of IFRS9 and IFRS15 by

equity afﬁliates - - - - - - 2 2

Balance as of January1, 2018 (272) (198) na 78 78 (497) 83 (806)

Charges and income directly

recognized in equity 40 (224) - 3 3 228 (164) (117)

Items to be reclassiﬁed

to proﬁt or loss - (7) - - - - - (7)

Tax effect (10) (2) - - - - - (12)

Balance as of December31, 2018 (242) (431) na 81 81 (269) (d) (81) (942)

na: not applicable.

(a) Please refer to Note17.

(b) Please refer to Note19.7.

(d) Included foreign currency translation from Telecom Italia for -€20million as of December31, 2018, compared to +€111million as of December31, 2017.

(e) Notably included the reclassiﬁcation to retained earnings of the €1,160million unrealized capital gain as of December31, 2017 relating to Vivendi’s interest in Ubisoft

(please refer to Note2.3).

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Note9. Goodwill

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE9. GOODWILL

(inmillions of euros) December31, 2018 December31, 2017

Goodwill, gross 26,804 26,084

Impairment losses (14,366) (14,000)

Goodwill 12,438 12,084

9.1. CHANGES IN GOODWILL

(inmillions of euros) December31, 2017 Impairment losses

Business

combinations

Changes in foreign

currency translation

adjustments and other December31, 2018

Universal Music Group 4,736 - 14 (a) 227 4,977

Canal+ Group 4,576 - 23 (4) 4,595

Havas 1,878 - 42 20 1,940

Gameloft 583 - 8 - 591

Vivendi Village 103 - (b) 23 (1) 125

New Initiatives 208 (1) 3 - 210

Total 12,084 (1) 113 242 12,438

(inmillions of euros) December31, 2016 Impairment losses

Business

combinations

Changes in foreign

currency translation

adjustments and other December31, 2017

Universal Music Group 5,401 - 13 (a) (678) 4,736

Canal+ Group 4,573 - 11 (8) 4,576

Havas - - (c) 1,918 (40) 1,878

Gameloft 609 - (d) (26) - 583

Vivendi Village 196 - (e) (65) (f) (28) 103

New Initiatives 208 - - - 208

Total 10,987 - 1,851 (754) 12,084

(a) Primarily included the foreign currency translation of the dollar (USD) against the euro.

(b) Notably included the provisional goodwill attributable to Paylogic, a ticketing and technology company acquired by Vivendi Village on April16, 2018.

(d) Related to the purchase price for Gameloft as of June29, 2016, which was allocated to the technology and the game engines (€42million; useful life estimated

at3years) net of the resulting deferred tax liabilities (€15million), based on analyses and estimates prepared by Vivendi. The ﬁnal amount of goodwill attributable

toGameloft amounted to €583million.

(e) Related to the purchase price for Paddington as of June30, 2016, which was allocated to the brand (€77million; indeﬁnite useful life) net of the resulting deferred tax

liabilities (€12million), valued based on analyses and estimates prepared by Vivendi.

(f) Notably related to the sale of Radionomy on August17, 2017.

9.2. GOODWILL IMPAIRMENT TEST

In 2018, Vivendi tested the value of goodwill allocated to its Cash-

Generating Units (CGU) or groups of CGU applying valuation methods

consistent with previous years. Vivendi ensured that the recoverable

amount of CGU or groups of CGU tested exceeded their carrying value

(including goodwill). The recoverable amount is determined as the higher of

the value in use determined by the discounted value of future cash ﬂows

(Discounted Cash Flow method (DCF)) and the fair value (less costs to sell),

determined on the basis of market data (stock market prices, comparable

listed companies, comparison with the value attributed to similar assets or

companies in recent acquisition transactions). For a description of the

methods used for the impairment test, please refer to Note1.3.5.7.

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Note9. Goodwill

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Presentation of CGU or groups of CGU

Operating Segments Cash Generating Units (CGU) CGU or groups of CGU tested

Universal Music Group

Recorded music

Universal Music Group (a)Music publishing

Artist services and merchandising

Canal+ Group

Pay-TV in Mainland France

Pay-TV in France (mainland and overseas), Poland,

Africa and Asia, and free-to-air TV in France (a)

Canal+ International (b)

nc+ (Poland)

Free-to-air TV in France

Studiocanal Studiocanal

Havas

Spain (c) Spain (c)

North America North America

France France

Other territories Other territories

Gameloft Gameloft Gameloft

Vivendi Village

See Tickets See Tickets

Digitick Digitick

Paylogic (d) Paylogic (d)

L’Olympia L’Olympia

Paddington Paddington

CanalOlympia CanalOlympia

New Initiatives

Dailymotion Dailymotion

Vivendi Content Vivendi Content

Group Vivendi Africa Group Vivendi Africa

(a) Corresponds to the level of monitoring return on investments.

(b) Relates to pay-TV in France overseas, Africa and Asia.

(d) As of December31, 2018, no goodwill impairment test attributable to Paylogic was completed given that the acquisition date of Paylogic (April16, 2018) was close to

the ﬁnancial closing date.

During the fourth quarter of 2018, Vivendi performed a goodwill impairment test on each CGU or group of CGU, on the basis of valuations of recoverable

amounts determined through internal valuations or with the assistance of third-party appraisers. As a result, Vivendi Management concluded that, as of

December31, 2018, the recoverable amount for each CGU or group of CGU tested exceeded their carrying value.

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Note9. Goodwill

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Presentation of key assumptions used

for the determination of recoverable amounts

The value in use of each CGU or group of CGU is usually determined as the

discounted value of future cash flows by using cash flow projections

consistent with the 2019 budget and the most recent forecasts prepared by

the operating segments. These forecasts are prepared on the basis of

ﬁnancial targets as well as the following main key assumptions: discount

rate, perpetual growth rate and EBITA as defined in Note1.2.3, capital

expenditures, the competitive and regulatory environments, technological

developments and level of commercial expenses. When the business plan of

a CGU or group of CGU is not available at the time of the re-examination of

the value of goodwill, Vivendi ensures that the recoverable amount exceeds

the carrying value on the basis market data only. The recoverable amount

used for the relevant CGU or group of CGU was determined based on its

value in use in accordance with the main key assumptions set out below.

Operating segments CGU or groups of CGU tested

Valuation Method Discount Rate (a) Perpetual Growth Rate

2018 2017 2018 2017 2018 2017

Universal Music Group Universal Music Group na (b)

DCF & comparables

model

na (b) 9.00% na (b) 2.125%

Canal+ Group

Pay-TV in France (mainland and

overseas), Poland, Africa and Asia,

and free-to-air TV in France

na (c)

DCF & comparables

model

na (c) (d) na (c) (d)

Studiocanal DCF DCF 8.00% 8.80% 0.50% 0.50%

Havas

Spain DCF DCF 8.03% 7.90% 2.00% 2.00%

North America DCF DCF 8.10% 8.20% 2.00% 2.00%

France DCF DCF 7.90% 7.80% 2.00% 2.00%

Gameloft Gameloft

DCF & comparables

model

DCF & comparables

model

8.50% 8.50% 2.00% 2.00%

Vivendi Village

See Tickets DCF DCF 11.00% 11.00% 2.00% 2.00%

Paddington DCF DCF 8.60% 9.00% 1.00% 1.00%

New Initiatives Dailymotion

DCF & comparables

model

DCF & comparables

model

11.50% 11.50% 2.00% 2.00%

na: not applicable.

(a) The determination of recoverable amounts using a post-tax discount rate applied to post-tax cash ﬂows provides recoverable amounts consistent with the ones that

would have been obtained using a pre-tax discount rate applied to pre-tax cash ﬂows.

(b) To achieve the highest possible valuation for Universal Music Group, given the favorable change in the international music market, driven in particular by the strong

development of subscription streaming services, Vivendi stated in 2018 that it is willing to sale up to 50% of Universal Music Group’s share capital to one or more

strategic partners and that such process could be completed within an 18-month timeframe.

(c) Based on multiple valuations observed in recent acquisitions, Vivendi considered that Canal+ Group’s recoverable amount exceeded its carrying value. Canal+ Group did not

update its business plan at year-end 2018, given the uncertainties around its program offering following the expiration of the League 1 football rights in France in 2020.

(d) Discount rates and perpetual growth rates applied in 2017 to test this group of UGT were as follows:

Discount rate Perpetual growth rate

2018 2017 2018 2017

Pay-TV

Mainland France (c) 6.70% (c) 1.00%

France overseas (c) 7.70% (c) 1.00%

Africa (c) 11.20% (c) 2.00%

Poland (c) 7.00% (c) 1.50%

Vietnam (c) 9.20% (c) 2.00%

Free-to-air TV in France (c) 8.10% (c) 1.00%

With respect to free-to-air TV in France, the recoverable amount was determined on the basis of market data (comparable listed companies and comparison with the

value attributed to similar companies in recent acquisition transactions).

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Note9. Goodwill

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Sensitivity of recoverable amounts

December31, 2018

Discount rate Perpetual growth rate Discounted cash ﬂows

Applied rate

(in %)

Increase in the

discount rate in order

for the recoverable

amount to be equal to

the carrying amount

(in numberof points)

Applied rate

(in %)

Decrease in the

perpetual growth rate

in order for the

recoverable amount

to be equal to the

carrying amount

(in numberof points)

Decrease in the

discounted cash ﬂows in

order for the recoverable

amount to be equal to the

carrying amount

(in %)

Universal Music Group (a) na na na na na

Canal+ Group (b)

Pay-TV in France (mainland and overseas), Poland,

Africa and Asia, and free-to-air TV in France na na na na na

Studiocanal 8.00% +2.02 pts 0.50% -3.78 pts -23%

Havas

Spain 8.03% +7.40 pts 2.00% -15.65 pts -57%

North America 8.10% +6.77 pts 2.00% -12.72 pts -52%

France 7.90% +6.90 pts 2.00% -12.36 pts -54%

Gameloft (c) na na na na na

Dailymotion (c) na na na na na

December31, 2017

Discount rate Perpetual growth rate Discounted cash ﬂows

Applied rate

(in %)

Increase in the

discount rate in order

for the recoverable

amount to be equal to

the carrying amount

(in numberof points)

Applied rate

(in %)

Decrease in the

perpetual growth rate

in order for the

recoverable amount

to be equal to the

carrying amount

(in numberof points)

Decrease in the

discounted cash ﬂows in

order for the recoverable

amount to be equal to the

carrying amount

(in %)

Universal Music Group 9.00% +8.68 pts 2.125% -21.25 pts -57%

Canal+ Group

Pay-TV in France (mainland and overseas), Africa,

Poland and Vietnam, and free-to-air TV in France (d) +1.45 pts (d) -3.07 pts -19%

Studiocanal 8.80% +1.67 pts 0.50% -2.48 pts -20%

Havas

Spain 7.90% +7.86 pts 2.00% -15.06 pts -58%

North America 8.20% +4.05 pts 2.00% -6.89 pts -39%

France 7.80% +6.13 pts 2.00% -10.24 pts -53%

Gameloft (c) na na na na na

Dailymotion (c) na na na na na

na: not applicable.

(a) Please refer to reference b. in the table above.

(b) Please refer to reference c. in the table above.

(c) The acquisitions of Gameloft and Dailymotion, on June29, 2016 and June30, 2015, respectively, were part of Vivendi’s strategy to build a global content and media

group. Gameloft and Dailymotion were fully consolidated into the group and they are currently being reconﬁgured. With the assistance of a third-party appraiser, Vivendi

ensured that the recoverable amounts of Gameloft and Dailymotion as of December31, 2017 and as of December31, 2018, which were determined using standard

valuation methods (the value in use, determined as the discounted value of future cash ﬂows, and the fair value, determined on the basis of market data: stock market

prices, comparable listed companies, comparison with the value attributed to similar assets or companies in recent acquisition transactions) were at least equal to their

value at the acquisition date.

(d) For a presentation of the applied rates, please refer to the table in reference (d) above.

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Note10. Content assets and commitments

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE10. CONTENT ASSETS AND COMMITMENTS

10.1. CONTENT ASSETS

(inmillions of euros)

December31, 2018

Content assets, gross

Accumulated

amortization and

impairment losses Content assets

Music catalogs and publishing rights 8,523 (7,159) 1,364

Advances to artists and repertoire owners 1,045 - 1,045

Merchandising contracts and artists services 20 (20) -

Film and television costs 6,792 (6,107) 685

Sports rights 437 - 437

Other 48 (39) 9

Content assets 16,865 (13,325) 3,540

Deduction of current content assets (1,381) 35 (1,346)

Non-current content assets 15,484 (13,290) 2,194

(inmillions of euros)

December31, 2017

Content assets, gross

Accumulated

amortization and

impairment losses Content assets

Music catalogs and publishing rights 8,105 (6,767) 1,338

Advances to artists and repertoire owners 704 - 704

Merchandising contracts and artists services 21 (21) -

Film and television costs 6,503 (5,713) 790

Sports rights 408 - 408

Other 42 (35) 7

Content assets 15,783 (12,536) 3,247

Deduction of current content assets (1,177) 17 (1,160)

Non-current content assets 14,606 (12,519) 2,087

Changes in content assets

(inmillions of euros)

Year ended December31,

2018 2017

Opening balance 3,247 3,223

Amortization of content assets excluding those acquired through business combinations (49) (27)

Amortization of content assets acquired through business combinations (79) (83)

Impairment losses on content assets acquired through business combinations - -

Increase 2,737 2,762

Decrease (2,597) (2,537)

Business combinations 3 36

Changes in foreign currency translation adjustments and other 278 (127)

Closing balance 3,540 3,247

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Note10. Content assets and commitments

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

10.2. CONTRACTUAL CONTENT COMMITMENTS

Commitments given recorded in the Statement of Financial Position: content liabilities

Content liabilities are mainly recorded in “Trade accounts payable and other” or in “Other non-current liabilities” whether they are current or non-current, as

applicable.

(inmillions of euros)

Minimum future payments as of December31, 2018

Total minimum future

payments as of

December31, 2017Total

Due in

2019 2020-2023 After 2023

Music royalties to artists and repertoire owners 2,049 2,037 12 - 1,843

Film and television rights (a) 169 169 - - 139

Sports rights 434 434 - - 468

Creative talent, employment agreements and others 297 177 119 1 132

Content liabilities 2,949 2,817 131 1 2,582

Off-balance sheet commitments given/(received)

(inmillions of euros)

Minimum future payments as of December31, 2018

Total minimum future

payments as of

December31, 2017Total

Due in

2019 2020-2023 After 2023

Film and television rights (a) 2,630 1,134 1,494 2 2,724

Sports rights (b) 1,735 942 782 11 2,022

Creative talent, employment agreements and others (c) 1,172 542 590 40 1,112

Given commitments 5,537 2,618 2,866 53 5,858

Film and television rights (a) (188) (91) (97) - (212)

Sports rights (7) (3) (4) - (16)

Creative talent, employment agreements and others (c) not available

Other (3) (1) (2) - -

Received commitments (198) (95) (103) - (228)

Total net 5,339 2,523 2,763 53 5,630

(a) Mainly includes contracts valid over several years for movies and TV production broadcasting rights (mainly exclusivity contracts with major US studios), pre-purchases

of rights in the French cinema industry, Studiocanal’s ﬁlm production and co-production commitments (given and received), and Canal and nc+ multichannel digital TV

package broadcasting rights. They are recorded as content assets when the broadcast is available for initial release or after the initial signiﬁcant payment. As of

December31, 2018, provisions recorded in respect of these commitments amounted to €26million (compared to €27million as of December31, 2017).

In addition, these amounts do not include commitments under contracts for channel diffusion rights and non-exclusive distribution of channels, in respect of which Canal+

Group did not grant or receive minimal guaranteed amounts. The variable amount of these commitments cannot be reliably determined and is not reported in either the

Statement of Financial Position or in the commitments and is instead recorded as an expense for the period in which it was incurred. Based on an estimate of the future

subscriberbase at Canal+ Group, given commitments would have increased by a net amount of €407million as of December31, 2018, compared to €630million as of

December31, 2017. These amounts notably included the renewal of the distribution agreement with beIN Sports on July11, 2016, for a four-year period.

Moreover, on November8, 2018, Canal+ Group announced the renewal of its May7, 2015 agreement with all the cinema professional organizations (ARP, BLIC and

BLOC), extending until December31, 2022 a historic partnership of more than 30 years between Canal+ and the French cinema. Pursuant to this agreement, SECP

(Société d’Édition de Canal Plus) undertook to invest 12.5% of its annual revenues every year in the ﬁnancing of European cinematographic works. With respect to

audiovisual, pursuant to the agreements entered into with producers’ and authors’ organizations in France, Canal+ Group is required to invest 3.6% of its total net annual

revenue in the ﬁnancing of heritage works every year. Only ﬁlms for which an agreement in principle is made with producers are accounted for in the off-balance sheet

commitments, as it is otherwise not possible to reliably determine a future and total estimate of commitments under agreements with cinema professional organizations

and with producers’ and authors’ organizations.

(b) Notably included broadcasting rights held by Canal+ Group to the following sport events:

– the French professional Soccer League 1, for the season 2019/2020 for the two premium lots (€549million);

– the English Premier League, on an exclusive basis in France and in Poland, for the three seasons 2019/2020 to 2021/2022, awarded on October31, 2018;

– the National French Rugby Championship “Top 14”, on an exclusive basis, for the four seasons 2019/2020 to 2022/2023; and

– Formula 1, Formula 2 and GP3 racings, on an exclusive basis, for the seasons 2019 and 2020.

These commitments will be accounted for in the Statement of Financial Position either upon the start of every season or upon an initial signiﬁcant payment.

(c) Primarily relates to UMG, which routinely commits to pay agreed amounts to artists and other parties upon delivery of content or other products (“Creative talent and

employment agreements”). Until the artist or the other party has delivered his or her content or until the repayment of an advance, UMG discloses its obligation as an

off-balance sheet given commitment. While the artist or the other party is obligated to deliver content or another product to UMG (these arrangements are generally

exclusive), this counterpart cannot be reliably determined and, thus, is not reported in received commitments.

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Note11. Investments in equity afﬁliates

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE11. INVESTMENTS IN EQUITY AFFILIATES

11.1. MAIN INVESTMENTS IN EQUITY AFFILIATES

As of December31, 2018, the main companies accounted for by Vivendi under the equity method were as follows:

3 Telecom Italia: ﬁxed and mobile telephony operator in Italy and Brazil;

3 Banijay Group Holding: producer and distributor of television programs; and

3 Vevo: premium music video and entertainment platform.

(inmillions of euros)

Voting interest Net carrying value of equity afﬁliates

December31, 2018 January1, 2018 December31, 2018 January1, 2018

Telecom Italia (a) 23.94% 23.94% 3,130 4,242

Banijay Group Holding (b) 31.4% 31.4% 145 142

Vevo 49.4% 49.4% 81 80

Other na na 62 62

3,418 4,526

na: not applicable.

(a) As of December31, 2018, Vivendi held 3,640million Telecom Italia ordinary shares with voting rights, i.e., 23.94%, representing 17.15% of the total share capital. Based

on the stock market price as of December31, 2018 (€0.4833 per ordinary share), the market value of this interest amounted to €1,759million. For an analysis of the value

of Vivendi’s interest in Telecom Italia as of December31, 2018, please refer to paragraph11.2 below.

(b) On December21, 2018, the balance of the “new ORAN 1” issued by Banijay Group Holding was early redeemed in cash for €25million. On July6, 2017, a portion of this bond

had been early redeemed in cash for €39million and converted into Banijay Group Holding shares (bringing Vivendi’s interest in Banijay Group Holding from 26.2% to 31.4%).

Change in value of investments in equity afﬁliates

(inmillions of euros)

Year ended December31,

2018 2017

Opening balance (a) 4,526 4,416

Acquisitions - 40

Sales - -

Write-downs (b) (1,066) -

Income from equity afﬁliates (c) 129 146

Change in other comprehensive income (164) (32)

Dividends received (7) (6)

Other - (24)

Closing balance 3,418 4,540

(a) In accordance with the new IFRS9 and IFRS15 accounting standards, the opening balance sheet as of January1, 2018 was restated by equity afﬁliates (please refer to

Note28.2).

(b) Vivendi wrote-down the value of its interest in Telecom Italia for €1,066million (please refer below).

(c) Primarily included Vivendi’s share of Telecom Italia’s net earnings for €122million in 2018 (please refer below), compared to €144million in 2017.

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Note11. Investments in equity afﬁliates

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

11.2. TELECOM ITALIA

Equity accounting of Telecom Italia

As of December31, 2018, with no change compared to December31, 2017,

Vivendi held 3,640million Telecom Italia ordinary shares, representing

23.94% of the voting rights and 17.15% of the total share capital of

Telecom Italia, while taking into account non-voting savings shares with

privileged dividend rights. Since December31, 2017, the following main

events occurred:

3 On March22, 2018, with effect from April24, 2018, the three

members of Telecom Italia’s Board of Directors representing Vivendi

resigned, including Mr.Arnaud de Puyfontaine, Executive Chairman

of Telecom Italia’s Board of Directors since June1, 2017.

3 On May4, 2018, Telecom Italia’s Shareholders’ Meeting appointed

five Board candidates out of the ten candidates proposed by

Vivendi, including Messrs.Arnaud de Puyfontaine and Amos

Genish. Vivendi’s Board candidate slate had 47% of the votes cast

compared to 49% of the votes cast for Elliott’s slate which obtained

ten directors.

3 On May7, 2018, Telecom Italia’s Board of Directors unanimously

appointed Mr.Amos Genish as Amministratore Delegato (Chief

Executive Officer) of Telecom Italia. On this occasion, Vivendi

reaffirmed its long-term commitment to Telecom Italia. As a

reminder, Vivendi supported the 2018-2020 industrial plan

announced by Mr.Amos Genish on March12, 2018, which was

unanimously approved by Telecom Italia’s Board of Directors.

3 On May16, 2018, Telecom Italia’s Board of Directors considered

that Vivendi was no longer exercising “management and

coordination activities” (attività di direzione e coordinamento,

according to Article2497-bis of the Italian Civil Code) over Telecom

Italia and consequently terminated the “management and

coordination activities” that had been exercised by Vivendi since

July27, 2017.

3 On November13, 2018, Telecom Italia’s Board of Directors revoked

the executive powers of Amministratore Delegato held by Mr.Amos

Genish, who remains a memberof the Board of Directors.

3 On December14, 2018, Vivendi requested the Telecom Italia Board

of Directors to convene a Shareholders’ Meeting as soon as

possible to vote for the appointment of new statutory Auditors.

Vivendi also requested that the agenda of the Shareholders’

Meeting includes a vote on the dismissal of ﬁve Board members

from the Elliott list.

Notwithstanding the change in the governance of Telecom Italia in 2018,

and the subsequent decrease of Vivendi’s inﬂuence over Telecom Italia’s

Board of Directors, Vivendi continues to consider that it has the power to

participate in Telecom Italia’s financial and operating policy decisions,

particularly given the 23.94% voting rights it holds in Telecom Italia, and, as

a result, it is deemed to exercise a signiﬁcant inﬂuence over Telecom Italia.

To account for this decrease of influence over Telecom Italia in 2018,

Vivendi has been recording its share of Telecom Italia’s net earnings as

“income from equity afﬁliates – non-operational”. In 2017, it was recorded

as “income from equity afﬁliates – operational”.

Vivendi’s share of Telecom Italia’s earnings

Vivendi relies on Telecom Italia’s public ﬁnancial information to account for

its interest in Telecom Italia under the equity method. Given Vivendi’s and

Telecom Italia’s respective publication dates of their ﬁnancial statements,

Vivendi always accounts for its share of Telecom Italia’s net earnings with a

three-month reporting lag. Therefore, for ﬁscal year 2018, Vivendi’s earnings

take into account its share of Telecom Italia’s net earnings for the fourth

quarter of 2017 and for the first nine months of 2018, i.e., a total of

€122million, which was calculated as follows:

3 €8million, attributable to Vivendi’s share of Telecom Italia’s proﬁt

for the fourth quarter of 2017, calculated based on the financial

information for the year ended December31, 2017, as publicly

disclosed by Telecom Italia on March6, 2018;

3 €174million, attributable to Vivendi’s share of Telecom Italia’s proﬁt

for the ﬁrst nine months of 2018, calculated based on the ﬁnancial

information for the ﬁrst nine months of 2018, as publicly disclosed

by Telecom Italia on November8, 2018; and

3 -€60million, excluded from adjusted net income, relating to the

amortization of intangible assets related to the purchase price

allocation for Telecom Italia.

In addition, Vivendi’s share of Telecom Italia’s charges and income directly

recognized in equity amounted to -€168million in 2018, including

-€130million related to foreign currency translation adjustments.

Value of Vivendi’s interest in Telecom Italia

as of December 31, 2018

As of December31, 2018, the stock market price of Telecom Italia ordinary

shares (€0.4833) decreased compared to the average purchase price paid by

Vivendi (€1.0709). In particular, Vivendi has observed the significant

decrease in the stock market price of Telecom Italia since May4, 2018, the

date of Telecom Italia’s Shareholders Meeting during which the Board of

Directors’ composition was changed and a new Chairman was appointed.

Consistent with previous ﬁscal year-ends, Vivendi tested the value of its

interest in Telecom Italia, to determine whether the recoverable amount

exceeded its carrying value. With the assistance of a third-party appraiser,

Vivendi used the standard valuation methods: the value in use, determined

as the discounted value of future cash ﬂows; the fair value, determined on

the basis of market data: stock market prices, comparable listed companies

and comparison with the value attributed to similar assets or companies in

recent acquisition transactions. Notwithstanding Vivendi’s expected

improvement of Telecom Italia’s outlook, Vivendi wrote-down the value of

its interest accounted for under the equity method for €1,066million,

notably to take into account the uncertainty affecting Telecom Italia’s

governance, which increases the non-execution risks associated with the

company’s industrial plan given Vivendi’s lower power to participate in

Telecom Italia’s ﬁnancial and operating policy decisions, and to take into

account the changes in Telecom Italia’s competitive and regulatory

environment. Therefore, in Vivendi’s Consolidated Financial Statements for

the year ended December31, 2018, the value of Telecom Italia shares

accounted for under the equity method was €3,130million.

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Note11. Investments in equity afﬁliates

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Financial information related to 100% of Telecom Italia

The main aggregates of the Consolidated Financial Statements, as publicly disclosed by Telecom Italia, are as follows:

(inmillions of euros)

Nine months Financial

Statements as of

September30, 2018

Annual Financial

Statements as of

December31, 2017

Date of publication by Telecom Italia: November8, 2018 March6, 2018

Non-current assets 54,038 58,452

Current assets 9,533 10,331

Total assets 63,571 68,783

Total equity 21,901 23,783

Non-current liabilities 29,062 32,612

Current liabilities 12,608 12,388

Total liabilities 63,571 68,783

Of which net ﬁnancial debt (a) 26,127 26,091

Revenues 14,077 19,828

EBITDA (a) 5,778 7,790

Earnings attributable to Telecom Italia shareowners (868) 1,121

Total comprehensive income/(loss) attributable to Telecom Italia shareowners (1,530) 527

(a) Non-GAAP measures (“Alternative Performance Measures”), as publicly disclosed by Telecom Italia.

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Note12. Financial assets

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE12. FINANCIAL ASSETS

(inmillions of euros)

December31, 2018 January1, 2018

Total Current Non-current Total Current Non-current

Financial assets at fair value through proﬁt or loss

Term deposits (a) 549 549 - 50 50 -

Level 1

Bond funds (a) 50 50 - 25 25 -

Listed equity securities 789 - 789 1,956 - (b) 1,956

Other ﬁnancial assets 5 5 - 5 5 -

Level 2

Unlisted equity securities - - - 348 - 348

Derivative ﬁnancial instruments 38 16 22 19 4 15

Level 3 – Other ﬁnancial assets (c) 44 - 44 62 - 62

Financial assets at fair value through other comprehensive income (d)

Level 1 – Listed equity securities 936 - 936 1,798 - 1,798

Level 2 – Unlisted equity securities 20 - 20 13 - 13

Level 3 – Unlisted equity securities 47 - 47 47 - 47

Financial assets at amortized cost (e) 714 470 244 317 54 263

Financial assets 3,192 1,090 2,102 4,640 138 4,502

The three classiﬁcation levels for the measurement of ﬁnancial assets at fair value are deﬁned in Note1.3.1.

(a) Relates to cash management ﬁnancial assets, included in the cash position: please refer to Note14.

(b) Related to Vivendi’s interest in Ubisoft, which was reclassiﬁed as “fair value through proﬁt or loss” as of January1, 2018.

(c) These ﬁnancial assets notably included the fair value of the bond redeemable into either shares or cash (ORAN 2) subscribed to by Vivendi in 2016 in connection with its

investment in Banijay Group Holding. As of January1, 2018, they also included the balance of the bond redeemable into either shares or cash (“new” ORAN 1) which

was early redeemed in cash (€25million) on December21, 2018.

(d) These assets relate to listed and non-listed equity securities, which Vivendi decided to classify as “fair value through other comprehensive income”. These ﬁnancial

assets had been classiﬁed as “ﬁnancial assets available-for-sale” until December31, 2017.

(e) As of December31, 2018, these ﬁnancial assets notably included:

– a receivable of €429million on the forward sale of the remaining interest in Ubisoft (please refer to Note2.3);

– a bond redeemable in cash subscribed to by Vivendi in 2016 in connection with its investment in Banijay Group Holding for €55million; and

– a €70million cash deposit made in March2017 pursuant to an agreement to purchase a piece of land on the île Seguin, in the Parisian suburb Boulogne Billancourt.

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Note12. Financial assets

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

LISTED EQUITY AND FINANCIAL ASSETS PORTFOLIO

December31, 2018

Numberof

shares held

Voting

interest

Ownership

interest

Average

purchase

price (a)

Stock

market

price

Carrying

value

Change in

value over

the period (b)

Cumulative

unrealized

capital gain/

(loss) (b)

Sensitivity at

+/-10 pts

(inthousands) (in €/share) (in millions of euros)

Mediaset 340,246 (c) 9.99% 28.80% 3.70 2.74 934 (165) (325) +93/-93

Ubisoft (d) 6,550 5.23% 5.80% 31.98 na 429 na na na

Other 791 440 632 +79/-79

Total 2,154 275 307 +172/-172

December31, 2017

Numberof

shares held

Voting

interest

Ownership

interest

Average

purchase

price (a)

Stock

market

price

Carrying

value

Change in

value over

the period (b)

Cumulative

unrealized

capital gain/

(loss) (b)

Sensitivity at

+/-10 pts

(inthousands) (in €/share) (inmillions of euros)

Mediaset 340,246 (c) 29.94% 28.80% 3.70 3.23 1,099 (300) (160) +110/-110

Ubisoft 30,489 29.04% 27.27% 26.12 64.14 1,956 929 1,160 +195/-195

Telefonica (e) 49,247 0.95% 0.95% 11.56 8.13 400 (34) (169) +40/-40

Fnac Darty (f) 2,945 11.05% 11.05% 54.00 100.70 297 108 138 +30/-30

Other 3 - (2) -

Total 3,754 703 967 +375/-375

na: not applicable.

(a) Includes acquisition fees and taxes.

(b) As from January1, 2018, these amounts (before taxes) are either reported to proﬁt or loss, or recorded as other comprehensive income not subsequently reclassiﬁed to

proﬁt or loss in accordance with IFRS9. As of December31, 2017, under IAS 39, they were recorded as other charges and income directly recognized in equity.

(c) The partnership agreement entered into between Vivendi and Mediaset on April8, 2016 is the subject to litigation. As of December31, 2017, Vivendi held

340,246thousand Mediaset shares, representing 29.94% of the voting rights. On April9, 2018, in compliance with the undertakings given to the AGCOM, Vivendi

transferred the portion of its voting rights in excess of 10% to an independent Italian trustee (please refer to Note23).

(d) As part of the sale of its entire 27.27% interest in Ubisoft (i.e., 30,489thousand shares), 6,550thousand shares will be sold on March5, 2019 in a forward sale (please

refer to Note2.3). As of December31, 2018, Vivendi recorded in the Consolidated Statement of Financial Position, a receivable on share disposal for the amount of such

forward sale (€429million).

(e) In Novemberand December2018, Vivendi sold on the market its Telefonica shares for an aggregate amount of €373million. In 2018, Vivendi received €11million in

dividends from Telefonica, compared to €20million in 2017.

(f) On July2, 2018, Vivendi decided to settle in shares the hedging transaction entered into in January2018 regarding its interest in Fnac Darty. The settlement was

completed on July10, 2018 and Vivendi received cash proceeds of €267million on July12, 2018 (please refer to Note2.4).

EQUITY MARKET VALUE RISKS

As part of a sustainable investing strategy, Vivendi built an equity portfolio

comprising listed and non-listed French and European companies in the

telecommunication and media sectors that are leaders in the production

and distribution of content.

As of December31, 2018, Vivendi held a portfolio of listed non-controlling

equity interests, including a receivable of €429million on the forward sale

of the remaining interest in Ubisoft (please refer to Note2.3). As of

December31, 2018, the aggregate market value of this portfolio was

approximately €3.9billion (before taxes). Vivendi is exposed to the risk of

ﬂuctuation in the value of these interests: as of December31, 2018, the net

unrealized capital gains or losses with respect to the interests in Telecom

Italia, Mediaset, Spotify and Tencent Music, represented a net unrealized

capital loss amounting to approximately €1.8billion (before taxes). A 10%

uniform decrease in the value of all of these shares would have a

cumulative negative impact of approximately €2.5billion on Vivendi’s

financial position; a 20% uniform decrease in the value of all of these

shares would have a cumulative negative impact of approximately

€2.9billion on Vivendi’s ﬁnancial position.

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Note13. Net working capital

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE13. NET WORKING CAPITAL

CHANGES IN NET WORKING CAPITAL

(inmillions of euros) January1, 2018 (a)

Changes in

operating

working

capital (b)

Business

combinations

Divestitures

in progress

completed

Changes in

foreign

currency

translation

adjustments Other (c) December31, 2018

Inventories 177 29 - - 3 (3) 206

Trade accounts receivable and other 5,208 65 28 (17) (6) 36 5,314

Of which trade accounts receivable 3,828 (29) 14 (9) (15) 51 3,840

trade accounts

receivable write-offs (182) (20) - 3 - 2 (197)

Working capital assets 5,385 94 28 (17) (3) 33 5,520

Trade accounts payable and other 9,019 64 60 (3) 39 393 9,572

Other non-current liabilities 226 2 (1) - 4 17 248

Working capital liabilities 9,245 66 59 (3) 43 410 9,820

Net working capital (3,860) 28 (31) (14) (46) (377) (4,300)

(inmillions of euros) December31, 2016

Changes in

operating

working

capital (b)

Business

combinations

Divestitures

in progress

completed

Changes in

foreign

currency

translation

adjustments Other (c) December31, 2017

Inventories 123 (24) 91 - (10) (3) 177

Trade accounts receivable and other 2,273 499 (d) 2,636 (12) (147) (31) 5,218

Of which trade accounts receivable 1,340 416 2,242 (7) (102) (61) 3,828

trade accounts

receivable write-offs (163) 5 (23) - 5 4 (172)

Working capital assets 2,396 475 2,727 (12) (157) (34) 5,395

Trade accounts payable and other 5,614 746 (e) 3,067 (23) (350) (35) 9,019

Other non-current liabilities 126 (6) 35 - (4) 75 226

Working capital liabilities 5,740 740 3,102 (23) (354) 40 9,245

Net working capital (3,344) (265) (375) 11 197 (74) (3,850)

(a) As of January1, 2018, net working capital included the restatements related to the application of IFRS9 for -€10million (please refer to Note28.2).

(b) Excludes content investments made by Canal+ Group and Universal Music Group.

(c) Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments.

(d) Included €2,629million relating to the integration of Havas.

(e) Included €3,043million relating to the integration of Havas.

TRADE ACCOUNTS RECEIVABLE AND OTHER

Credit risk

Vivendi does not consider there to be a signiﬁcant risk of non-recovery of

trade accounts receivables for its business segments: the large individual

customer base, the broad variety of customers and markets, as well as the

geographic diversity of its business segments (mainly Universal Music

Group, Canal+ Group, Havas and Gameloft), enable Vivendi to minimize the

risk of credit concentration related to trade accounts receivable.

Havas provides advertising and communications services to a wide range of

clients operating in various industry sectors around the world. Havas grants

credit to all qualiﬁed clients. It does not believe it is exposed to any undue

concentration of credit risk related to either a specific country or client.

Consequently, concentrations of credit risk on accounts receivable are

limited. In 2015, Havas selected a leading credit insurer to cover its main

client credit risks worldwide. Deployment of this credit insurance cover

began in July2015 and continued since then, including in 2018.

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Note14. Cash position

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

TRADE ACCOUNTS PAYABLE AND OTHER

(inmillions of euros) Note December31, 2018 December31, 2017

Trade accounts payable 4,938 4,909

Music royalties to artists and repertoire owners

10.2 2,037 1,830

Other 2,597 2,280

Trade accounts payable and other 9,572 9,019

NOTE14. CASH POSITION

Vivendi’s cash position comprises cash and cash equivalents, as well as cash management ﬁnancial assets classiﬁed as current ﬁnancial assets. As deﬁned

by Vivendi, cash management ﬁnancial assets relate to ﬁnancial investments, which do not satisfy the criteria for classiﬁcation as cash equivalents set forth

in IAS 7, and, with respect to money market funds, which satisfy ANC and AMF position expectations expressed in November2018.

(inmillions of euros)

December31, 2018 December31, 2017

Carrying value Fair value Level (a) Carrying value Fair value Level (a)

Term deposits 549 na na 50 na na

Bond funds and other 50 50 1 25 25 1

Cash management ﬁnancial assets 599 75

Cash 438 na na 389 na na

Term deposits and current accounts 1,999 na na 1,257 na na

Money market funds 1,306 1,306 1 275 275 1

Bond funds 50 50 1 30 30 1

Cash and cash equivalents 3,793 1,951

Cash position 4,392 2,026

na: not applicable.

(a) Level 1 corresponds to a measurement based on quoted prices in active markets (the three classiﬁcation levels for the measurement of ﬁnancial assets at fair value are

deﬁned in Note1.3.1).

In 2018, the average interest rate on Vivendi’s investments was 0.50% (compared to 0.40% in 2017).

INVESTMENT RISK AND COUNTERPARTY RISK

VivendiSA centralizes daily cash surpluses (cash pooling) of all controlled

entities (i) which are not subject to local regulations restricting the transfer

of ﬁnancial assets, or (ii) which are not subject to other agreements.

As of December31, 2018, the group’s cash position amounted to

€4,392million (compared to €2,026million as of December31, 2017), of

which €3,354million was held by VivendiSA (compared to €1,072million as

of December31, 2017).

Vivendi’s investment policy mainly aims to minimize its exposure to

counterparty risk. Consequently, Vivendi allocates a portion of the amounts

available within (i) mutual funds with a low risk class (1 or 2) as deﬁned by

the European Securities and Markets Authority’s (ESMA) synthetic risk and

reward indicator (SRRI) which comprises seven risk classes, and (ii) credit

institutions with high long-term or short-term credit ratings (at least A-

(Standard & Poor’s)/A3 (Moody’s) and A-2 (Standard & Poor’s)/P-2 (Moody’s),

respectively). Moreover, Vivendi allocates investments among selected

banks and limits the amount of each such investment.

LIQUIDITY RISK

As of February11, 2019 (the date of Vivendi’s Management Board meeting

that approved the Consolidated Financial Statements for the year ended

December31, 2018), Vivendi considers that the cash ﬂows generated by its

operating activities, its cash surpluses, net of the cash used to reduce its

debt, as well as the cash available through undrawn bank credit facilities

(please refer to Note19.3) will be sufﬁcient to cover its operating expenses

and investments, its debt service (including redemption of bonds), the

payment of income taxes, the distribution of dividends and any potential

share repurchases under existing authorizations, as well as its investment

projects, if any, for the next 12months.

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Note15. Equity

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE15. EQUITY

CHANGES IN THE SHARE CAPITAL OF VIVENDISA

(inthousands) December31, 2018 December31, 2017

Numberof shares comprising the share capital (nominal value: €5.5 per share) 1,306,234 1,296,059

Treasury shares (38,264) (39,408)

Numberof shares, net 1,267,970 1,256,651

Numberof voting rights, gross 1,387,889 1,513,250

Treasury shares (38,264) (39,408)

Numberof voting rights, net 1,349,625 1,473,842

On July19, 2018, Vivendi made a capital increase of €100million, by

issuing 5,186thousand new shares through an employee stock purchase

plan and leveraged plan (please refer to Note18).

As of December31, 2018, Vivendi’s share capital amounted to

€7,184,288,078, divided into 1,306,234,196 shares. In addition, as of

December31, 2018, 7.2million stock options and 4.8million performance

shares were outstanding, representing a potential maximum nominal share

capital increase of €66million (i.e., 0.92%).

SHARE REPURCHASES

On April19, 2018, the General Shareholders’ Meeting renewed the

authorization given to Vivendi’s Management Board to repurchase shares of

the company within the limit of 5% of Vivendi’s share capital and at a

maximum price of €24 per share.

As of December31, 2018, Vivendi held 38,264thousand treasury shares,

representing 2.93% of its share capital (compared to 3.04% of its share

capital as of December31, 2017).

Among the resolutions to be submitted to a vote at the Shareholders’

Meeting to be held on April15, 2019, the shareholders will be asked to

approve two resolutions relating to share repurchases:

3 The renewal of the authorizations granted to the Management

Board by the Shareholders Meeting of April19, 2018 to repurchase

shares of the company within the limit of 10% of the share capital

at a maximum purchase price of €25 per share, and to reduce the

company’s share capital within the limit of 10% by cancelling the

shares acquired.

3 Granting to the Management Board authorization to purchase

shares of the company by way of a public share buyback offer

(OPRA) within the limit of 25% of Vivendi’s share capital at a

maximum purchase price of €25 per share, and to cancel the shares

acquired.

SHAREHOLDERS’ DIVIDEND DISTRIBUTIONS

On February11, 2019 (the date of Vivendi’s Management Board meeting

that approved the Consolidated Financial Statements for the year ended

December31, 2018 and the allocation of earnings for the ﬁscal year then

ended), the Management Board decided to propose to shareholders the

payment of an ordinary dividend of €0.50 per share representing a total

distribution of approximately €634million. This proposed distribution was

presented to, and approved by, Vivendi’s Supervisory Board at its meeting

held on February14, 2019, and will be submitted to the Annual General

Shareholders’ Meeting to be held on April15, 2019 for approval.

On April24, 2018, with respect to ﬁscal year 2017, an ordinary dividend of

€0.45 per share was paid (following the coupon detachment on April20,

2018), representing a total distribution of €568million.

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Note16. Provisions

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE16. PROVISIONS

(inmillions of euros) Note December31, 2018 December31, 2017

Employee beneﬁts (a) 697 746

Restructuring costs (b) 55 59

Litigations

23 247 260

Losses on onerous contracts 37 61

Contingent liabilities due to disposal (c) 20 16

Other (d) 813 785

Provisions 1,869 1,927

Deduction of current provisions (438) (412)

Non-current provisions 1,431 1,515

(a) Included deferred employee compensation as well as provisions for deﬁned employee beneﬁt plans (€661million as of December31, 2018 and €712million as of

December31, 2017), but excluded employee termination reserves recorded under restructuring costs.

(b) Primarily included provisions for restructuring at UMG (€13million as of December31, 2018, compared to €9million as of December31, 2017) and at Canal+ Group

(€40million as of December31, 2018, compared to €50million as of December31, 2017).

(c) Certain commitments given in relation to divestitures are the subject of provisions. These provisions are not signiﬁcant and the amount is not disclosed because such

disclosure could be prejudicial to Vivendi.

(d) Notably included the provisions with respect to the 2012 and 2015 French Tax Group System (€239million and €203million as of December31, 2018, respectively), as

well as litigation provisions for which the amount and nature are not disclosed because such disclosure could be prejudicial to Vivendi.

CHANGES IN PROVISIONS

(inmillions of euros)

Year ended December31,

2018 2017

Opening balance 1,927 2,141

Addition 280 451

Utilization (231) (a) (270)

Reversal (123) (a) (503)

Business combinations - 172

Divestitures, changes in foreign currency translation adjustments and other 16 (64)

Closing balance 1,869 1,927

(a) Notably included the reversal of reserve related to the securities class action in the United States for an aggregate amount of €100million (please refer to Note23).

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Note17. Employee beneﬁts

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE17. EMPLOYEE BENEFITS

17.1. ANALYSIS OF EXPENSES RELATED TO EMPLOYEE BENEFIT PLANS

The table below provides information about the cost of employee beneﬁt plans excluding its ﬁnancial component. The total cost of deﬁned beneﬁt plans is

set forth in Note17.2.2 below.

(inmillions of euros) Note

Year ended December31,

2018 2017

Employee deﬁned contribution plans 62 46

Employee deﬁned beneﬁt plans

17.2.2 26 23

Employee beneﬁt plans 88 69

This cost increase was primarily due to the full-year effect of the consoli-

dation of Havas since July3, 2017: €32million for employee defined

contribution plans (€17million in 2017) and €6million for employee deﬁned

beneﬁt plans (€3million in 2017).

17.2. EMPLOYEE DEFINED BENEFIT PLANS

17.2.1. Assumptions used in the evaluation

and sensitivity analysis

Discount rate, expected return on plan assets,

andrateofcompensation increase

The assumptions underlying the valuation of deﬁned beneﬁt plans were

made in compliance with the accounting policies presented in Note1.3.8

and have been applied consistently for several years. Demographic

assumptions (including notably the rate of compensation increase) are

company specific. Financial assumptions (notably the discount rate) are

determined by independent actuaries and other independent advisors and

are reviewed by Vivendi’s Finance department. The discount rate is

therefore determined for each country by reference to yields on notesissued

by investment grade companies having a credit rating of AA and maturities

identical to that of the valued plans, generally based on relevant rate

indices. The discount rates selected are therefore used, at year-end, to

determine a best estimate by Vivendi’s Finance department of expected

trends in future payments from the ﬁrst beneﬁt payments.

In accordance with amended IAS 19, the expected return on plan assets is

estimated using the discount rate used to value the obligations of the

previous year.

In weighted average

Pension beneﬁts Post-retirement beneﬁts

2018 2017 2018 2017

Discount rate (a) 2.3% 2.2% 3.9% 3.7%

Rate of compensation increase 1.7% 1.5% na na

Duration of the beneﬁt obligation (in years) 15.0 15.5 8.8 9.4

na: not applicable.

(a) A 50 basis point increase (or a 50 basis point decrease, respectively) to the 2018 discount rate would have led to a decrease of €1million in pre-tax expense (or an

increase of €1million, respectively) and would have led to a decrease in the obligations of pension and post-retirement beneﬁts of €84million (or an increase of

€87million, respectively).

Assumptions used in accounting for pension beneﬁts, by country

United States United Kingdom Germany France

2018 2017 2018 2017 2018 2017 2018 2017

Discount rate 4.00% 3.75% 2.75% 2.50% 1.50% 1.50% 1.50% 1.50%

Rate of compensation increase (weighted average) na na 3.50% 3.50% 1.75% 1.75% 3.47% 3.25%

na: not applicable.

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Note17. Employee beneﬁts

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Assumptions used in accounting for post-retirement beneﬁts, by country

United States Canada

2018 2017 2018 2017

Discount rate 4.00% 3.75% 3.75% 3.50%

Rate of compensation increase na na na na

na: not applicable.

Allocation of pension plan assets

December31, 2018 December31, 2017

Equity securities 13% 12%

Debt securities 21% 20%

Diversiﬁed funds 10% 15%

Insurance contracts 39% 41%

Real estate 1% 1%

Cash and other 16% 11%

Total 100% 100%

Pension plan assets are mainly ﬁnancial assets actively traded in organized

ﬁnancial markets.

These assets do not include occupied buildings or assets used by the group

nor shares or debt instruments of Vivendi.

Cost evolution of post-retirement beneﬁts

For the purpose of measuring post-retirement beneﬁts, Vivendi assumed the

annual growth in the per capita cost of covered health care beneﬁts would

slow down from 6.7% for the under 65 years of age and 65 years of age and

older categories in 2018, to 4.4% in 2026 for these categories. In 2018, a

one-percentage-point increase in the assumed cost evolution rates would

have increased post-retirement beneﬁt obligations by €6million and the

pre-tax expense by €0.3million. Conversely, a one-percentage-point

decrease in the assumed cost evolution rates would have decreased post-

retirement benefit obligations by €5million and the pre-tax expense by

€0.2million.

17.2.2. Analysis of the expense recorded and of the amount of beneﬁts paid

(inmillions of euros)

Pension beneﬁts Post-retirement beneﬁts Total

2018 2017 2018 2017 2018 2017

Current service cost 27 24 - - 27 24

Past service cost (2) (2) - - (2) (2)

(Gains)/losses on settlements - - - - - -

Other 1 1 - - 1 1

Impact on selling, administrative and general expenses 26 23 - - 26 23

Interest cost 22 17 5 5 27 22

Expected return on plan assets (11) (10) - - (11) (10)

Impact on other ﬁnancial charges and income 11 7 5 5 16 12

Net beneﬁt cost recognized in proﬁt or loss 37 30 5 5 42 35

In 2018, beneﬁts paid amounted to (i) €50million with respect to pensions (€90million in 2017), of which €17million paid by pension funds (€63million in2017),

and (ii) €8million paid with respect to post-retirement beneﬁts (€11million in 2017).

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

17.2.3. Analysis of net beneﬁt obligations with respect to pensions and post-retirement beneﬁts

The consolidation of Havas on July3, 2017 resulted in a net provision of €104million corresponding to historical carrying values reported in Havas’s

Consolidated Statement of Financial Position, stemming from beneﬁt obligations valued at €254million less the value of plan assets for €150million.

Changes in value of beneﬁt obligations, fair value of plan assets, and funded status

(inmillions of euros) Note

Employee deﬁned beneﬁt plans

Year ended December31, 2018

Beneﬁt

obligation

Fair value of

planassets

Net (provision)/

asset recorded in

the statement of

ﬁnancial position

(A) (B) (B)-(A)

Opening balance 1,253 549 (704)

Current service cost 27 (27)

Past service cost (2) 2

(Gains)/losses on settlements - - -

Other - (1) (1)

Impact on selling, administrative and general expenses (26)

Interest cost 27 (27)

Expected return on plan assets 11 11

Impact on other ﬁnancial charges and income (16)

Net beneﬁt cost recognized in proﬁt or loss (42)

Experience gains/(losses) (a) (7) (5) 2

Actuarial gains/(losses) related to changes in demographic assumptions (9) 9

Actuarial gains/(losses) related to changes in ﬁnancial assumptions (b) (32) 32

Adjustment related to asset ceiling - - -

Actuarial gains/(losses) recognized in other comprehensive income 43

Contributions by plan participants 3 3 -

Contributions by employers - 58 58

Beneﬁts paid by the fund (17) (17) -

Beneﬁts paid by the employer (42) (42) -

Business combinations - - -

Divestitures of businesses - - -

Transfers - - -

Foreign currency translation and other 4 (3) (7)

Closing balance 1,205 553 (652)

Of which wholly or partly funded beneﬁts 799

wholly unfunded beneﬁts (c) 406

Of which assets related to employee beneﬁt plans 9

provisions for employee beneﬁt plans (d)

16 (661)

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Note17. Employee beneﬁts

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

(inmillions of euros) Note

Employee deﬁned beneﬁt plans

Year ended December31, 2017

Beneﬁt

obligation

Fair value of

planassets

Net (provision)/

asset recorded in

the statement of

ﬁnancial position

(A) (B) (B)-(A)

Opening balance 1,179 482 (697)

Current service cost 24 (24)

Past service cost (2) 2

(Gains)/losses on settlements - - -

Other - (1) (1)

Impact on selling, administrative and general expenses (23)

Interest cost 22 (22)

Expected return on plan assets 10 10

Impact on other ﬁnancial charges and income (12)

Net beneﬁt cost recognized in proﬁt or loss (35)

Experience gains/(losses) (a) 25 (30) (55)

Actuarial gains/(losses) related to changes in demographic assumptions (10) 10

Actuarial gains/(losses) related to changes in ﬁnancial assumptions (e) (87) 87

Adjustment related to asset ceiling - - -

Actuarial gains/(losses) recognized in other comprehensive income (42)

Contributions by plan participants 3 3 -

Contributions by employers - 63 63

Beneﬁts paid by the fund (63) (63) -

Beneﬁts paid by the employer (38) (38) -

Business combinations 2 - (2)

Consolidation of Havas 254 150 (104)

Divestitures of businesses - - -

Transfers - - -

Foreign currency translation and other (56) (27) 29

Closing balance 1,253 549 (704)

Of which wholly or partly funded beneﬁts 834

wholly unfunded beneﬁts (c) 419

Of which assets related to employee beneﬁt plans 8

provisions for employee beneﬁt plans (d)

16 (712)

(a) Includes the impact on the beneﬁt obligations resulting from the difference between actuarial assumptions at the previous year-end and effective beneﬁts during the

year, and the difference between the expected return on plan assets at the previous year-end and the actual return on plan assets during the year.

(b) Included €29million attributable to an increase in discount rates, of which €23million relating to the United Kingdom and €4million relating to the United States.

(c) In accordance with local laws and practices, certain plans are not covered by plan assets. As of December31, 2018 and 2017, such plans principally comprised

supplementary pension plans in the United States, pension plans in Germany and post-retirement beneﬁt plans in the United States.

(d) Included a current liability of €51million as of December31, 2018 (compared to €53million as of December31, 2017).

(e) Included -€72million attributable to an increase in discount rates, of which -€5million relating to the United States, -€19million relating to the United Kingdom,

-€19million relating to Germany and -€24million relates to France.

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Note17. Employee beneﬁts

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Beneﬁt obligation, fair value of plan assets, and funded status detailed by country

(inmillions of euros)

Pension beneﬁts (a) Post-retirement beneﬁts (b) Total

December31, December31, December31,

2018 2017 2018 2017 2018 2017

Beneﬁt obligation

US companies 113 118 107 111 220 229

UK companies 432 469 2 2 434 471

German companies 184 192 - - 184 192

French companies 279 268 3 3 282 271

Other 75 78 10 12 85 90

1,083 1,125 122 128 1,205 1,253

Fair value of plan assets

US companies 52 54 - - 52 54

UK companies 395 398 - - 395 398

German companies 2 2 - - 2 2

French companies 52 43 - - 52 43

Other 52 52 - - 52 52

553 549 - - 553 549

Underfunded obligation

US companies (61) (64) (107) (111) (168) (175)

UK companies (c) (37) (71) (2) (2) (39) (73)

German companies (182) (190) - - (182) (190)

French companies (227) (225) (3) (3) (230) (228)

Other (23) (26) (10) (12) (33) (38)

(530) (576) (122) (128) (652) (704)

(a) No employee deﬁned beneﬁt plan individually exceeded 10% of the aggregate value of the obligations and underfunded obligations under these plans.

(b) Primarily relates to medical coverage (hospitalization, surgery, doctor visits and drug prescriptions), post-retirement and life insurance beneﬁts for certain employees

and retirees in the United States. In accordance with current regulations in relation to the funding policy of this type of plan, the plan is not funded. The main risks for

the group relate to changes in discount rates as well as increases in the cost of beneﬁts (please refer to the sensitivity analysis described in Note17.2.1).

(c) In December2017, the UMPGS fund in the United Kingdom purchased a buy-in insurance policy, covering pension beneﬁts. This insurance policy is an asset to the

UMGPS plan. It was purchased following the exercise by some beneﬁciaries of the right to exit the UMGPS plan against a payment in cash. Vivendi continues to

undertake the beneﬁts with regards to the remaining beneﬁciaries of the plan. In principle, the beneﬁt obligations are equal to the plan’s assets, and no net pension

liability is recorded in the Consolidated Statement of Financial Position.

17.2.4. Beneﬁts estimation and future payments

For 2019, hedge fund contributions and beneﬁt payments by Vivendi to retirees are estimated at €44million in respect of pensions, of which €27million

relates to pension funds and €9million relates to post-retirement beneﬁts.

Estimates of future beneﬁt payments to beneﬁciaries by the relevant pension funds or by Vivendi (in nominal value for the following 10years) are as follows:

(inmillions of euros)

Pension

beneﬁts

Post-retirement

beneﬁts

2019 41 10

2020 58 10

2021 43 9

2022 60 9

2023 59 9

2024-2028 283 40

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Note18. Share-based compensation plans

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE18. SHARE-BASED COMPENSATION PLANS

18.1. PLANS GRANTED BY VIVENDI

18.1.1. Equity-settled instruments

Transactions relating to outstanding instruments that occurred in 2017 and 2018 were as follows:

Stock options Performance shares

Numberof

outstanding

stockoptions

(inthousands)

Weighted average

strike price of

outstanding

stockoptions

(in euros)

Numberof

outstanding

performance

(inthousands)

Balance as of December31, 2016 24,620 19.1 3,216

Granted - na 1,548

Exercised/Issued (a) (4,811) 17.6 (342)

Forfeited (6,557) 24.7 na

Cancelled (50) 20.2 (119)

Balance as of December31, 2017 13,202 16.8 4,303

Granted - na 1,636

Exercised/Issued (a) (4,989) 17.9 (771)

Forfeited (968) 20.2 na

Cancelled - na (b) (378)

Balance as of December31, 2018 (c) 7,245 15.6 (d) 4,790

Acquired/Exercisable as of December31, 2018 7,245 15.6 -

Rights acquired as of December31, 2018 - na 418

na: not applicable.

(a) In 2018, beneﬁciaries exercised stock options at the weighted average stock market price of €22.3 (compared to €21.1 for stock options exercised in 2017).

(b) At its meeting held on February15, 2018, after a review by the Corporate Governance, Nominations and Remuneration Committee, the Supervisory Board approved the

level of satisfaction of objectives set for the cumulative ﬁscal years 2015, 2016 and 2017 for the performance share plan granted in 2015. It was conﬁrmed that not all

the criteria had been met. The ﬁnal grant of the 2015 performance share plan represented 75% of the initial grant, as adjusted. Consequently, 243,464 rights to

performance shares, which were granted in 2015, were cancelled and 42,500 of the cancelled rights were for members of the Management Board. In addition,

134,520 rights were cancelled due to the termination of employment of certain beneﬁciaries.

(c) At the stock market price on December31, 2018, the cumulated intrinsic value of remaining stock options to be exercised was estimated at €41million.

(d) The weighted-average remaining period before delivering performance shares was 1.7 years.

Please refer to Note15 for a description of the potential impact on the share capital of VivendiSA of the outstanding stock options and performance shares.

Outstanding stock options as of December31, 2018

Range of strike prices

Number

(inthousands)

Weighted average

strike price

(in euros)

Weighted average

remaining life

(in years)

Under €15 1,057 11.9 3.3

€15-€16 2,568 15.8 1.3

€16-€17 2,305 16.1 0.3

€17-€18 1,315 17.2 2.3

More than €18 - - -

7,245 15.6 1.5

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Note18. Share-based compensation plans

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Performance share plans

On May17, 2018, Vivendi granted to employees and executive management

1,632thousand performance shares, of which 175,000 were granted to

members of the Management Board. On February23, 2017, Vivendi granted

to employees and executive management 1,544thousand performance

shares, 200,000 of which were to members of the Management Board.

As of May17, 2018, the share price was €23.03 and the expected dividend

yield was 1.95% (compared to €16.95 and 2.36% as of February23, 2017,

respectively). After taking into account the cost associated with the

retention period of the shares (described below), the discount for non-

transferability was set at 8.1% of the share price as of May17, 2018

(compared to 8.4% in 2017). Consequently, the fair value of each granted

performance share was estimated at €19.85 (compared to €14.37 in 2017),

corresponding to an aggregate fair value of the plan of €32million

(compared to €22million in 2017).

Subject to satisfaction of the performance criteria, performance shares

deﬁnitely vest at the end of a three-year period, subject to the presence of

the beneﬁciaries in the group (vesting period), and the shares must be held

by the beneﬁciaries for an additional two-year period (retention period). The

compensation cost is recognized on a straight-line basis over the vesting

period. The accounting methods that are applied to estimate and recognize

the value of these granted plans are described in Note1.3.10.

Satisfaction of the objectives that determine the deﬁnitive grant of perfor-

mance shares is assessed over a three-year consecutive period based on

the following performance criteria:

3 internal indicators (with a weighting of 70%):

– the group’s earnings before interest and income taxes – EBIT

(35%), and

– the group’s cash ﬂow from operations after interest and income

tax paid – CFAIT (35%);

3 external indicators (with a weighting of 30%) tied to changes in

Vivendi’s share price compared to the STOXX

Europe Media index

(20%) and to the CAC 40 index (10%).

The granted shares correspond to the same class of common shares making

up the share capital of VivendiSA, and as a result, at the end of the three-

year vesting period, beneficiaries will be entitled to the dividends and

voting rights attached to these shares. The compensation cost recognized

corresponds to the estimated value of the equity instruments granted to the

beneficiary, and is equal to the difference between the fair value of the

shares to be received and the aggregate discounted value of the dividends

that were not received over the vesting period.

In 2018, the charge recognized with respect to all performance share plans

amounted to €16million, compared to €18million in 2017.

18.1.2. Employee stock purchase and leveraged plans

On July19, 2018 and July25, 2017, Vivendi made capital increases through

employee stock purchase plans and leveraged plans which gave the group’s

employees and retirees an opportunity to subscribe for Vivendi shares.

These shares, which are subject to certain sale or transfer restrictions

during a ﬁve-year period, are subscribed to at a discount of up to 15% on

the average opening market price for Vivendi shares during the 20 trading

days preceding the date of the Management Board meeting which set the

subscription price for the new shares to be issued. The difference between

the subscription price for the shares and the share price on that date

represents the benefit granted to the beneficiaries. In addition, Vivendi

applied a discount for non-transferability during a ﬁve-year period, which is

deducted from the benefit granted to the employees. The value of the

subscribed shares is estimated and fixed at the date on which the

subscription price for the new shares to be issued is set.

The applied valuation assumptions were as follows:

2018 2017

Grant date June18 June22

Data at grant date:

Share price (in euros) 21.57 20.58

Expected dividend yield 2.09% 1.94%

Risk-free interest rate -0.11% -0.21%

5-year interest rate in ﬁne 3.81% 3.93%

Repo rate 0.36% 0.36%

Discount for non-transferability per share 17.49% 18.44%

Under the employee stock purchase plan (ESPP), 734thousand shares were

subscribed for in 2018 through a company mutual fund (fonds commun de

placement d’entreprise) at a price of €19.327 per share (compared to

651thousand shares at a price per share of €16.25 in 2017). In 2018, no

charges were recognized, as the beneﬁt granted, which is equal to the positive

difference between the subscription price and the stock price at the end of the

subscription period on June18, 2018 (discount of 10.40%) was lower than the

discount for non-transferability (17.49%). In 2017, the beneﬁt granted (21.00%)

was higher than the discount for non-transferability (18.44%) and the charge

recognized with respect to the ESPP amounted to €1million.

Under the leveraged plan, 4,259thousand shares were subscribed for in

2018 through a company mutual fund at a price of €19.327per share

(compared to 2,587thousand shares at a price of €16.25 in 2017). The

leveraged plan entitles employees and retirees of Vivendi and its French

and foreign subsidiaries to subscribe for Vivendi shares through a reserved

share capital increase, while obtaining a discounted subscription price, and

to ultimately receive the capital gain (calculated pursuant to the terms and

conditions of the plan) equal to 10shares for each subscribed share. A

financial institution mandated by Vivendi hedges this transaction. In

addition, 193thousand shares were subscribed for as part of an employee

shareholding plan implemented for employees of the group’s Japanese

subsidiaries (compared to 922thousand shares as part of a similar plan for

employees of the group’s American subsidiaries in 2017). In 2018, the

charge recognized with respect to the leveraged plan amounted to nearly

€1million, compared to €5million in 2017.

Transactions carried out in France and foreign countries through company

mutual funds (fonds commun de placement d’entreprise; employee stock

purchase and leveraged plans) resulted in a capital increase on July19,

2018 of an aggregate value of €100million (including issue premium),

compared to €68million on July25, 2017.

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Note18. Share-based compensation plans

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

18.2. RESTRICTED AND PERFORMANCE

SHAREPLANSGRANTED BY HAVAS

The restricted and performance share plans were valued based on the stock

market price of Havas shares as of the date of the Board of Directors’

meeting that approved the grant of these shares. Subject to satisfaction of

the performance criteria for certain plans, shares deﬁnitely vest at the end

of a period of 36 to 51 months, subject to the presence of the beneﬁciaries

in the group.

As of December31, 2018, Havas’s outstanding plans were as follows:

3 On January19, 2015, the Board of Directors granted 2,420thousand

performance shares for the employees and directors of HavasSA

and its subsidiaries in France and abroad.

3 On March19, 2015, the Board of Directors granted 70thousand

performance shares to Mr.Yannick Bolloré, Chief Executive Ofﬁcer

of HavasSA.

3 On August27, 2015, the Board of Directors granted a plan of

120thousand performance shares to all employees of French

companies.

3 On May10, 2016, the Board of Directors granted three plans for a

total of 2,784thousand restricted shares and performance shares to

the group’s senior executives and managers in France and abroad,

including 90thousand shares for Mr.Yannick Bolloré.

3 On July21, 2016, the Board of Directors granted 148thousand

restricted shares to all employees in France.

3 On February28, 2017, the Board of Directors granted 1,699thousand

restricted shares to the group’s senior executives in France and

abroad.

In light of both the implementation of the mandatory squeeze-out resulting

in the absence of liquidity for Havas shares and the change of control of

Havas to Vivendi, Vivendi’s Supervisory Board resolved that the restricted

and performance shares granted by Havas would be replaced by Vivendi

shares, on the basis of 0.44 Vivendi share for every one Havas share.

In 2018, beneﬁciaries of Havas restricted or performance shares have been

individually given the option of being deﬁnitively granted the corresponding

shares initially granted to them, subject to having entered into a liquidity

contract with Vivendi, which contains:

3 a put option, giving such beneﬁciaries the right to sell their Havas

restricted and performance shares to Vivendi within thirty calendar

days from the first business day following the date of vesting of

their Havas restricted and performance shares; and

3 a call option, giving Vivendi the right to acquire the relevant Havas

restricted and performance shares within fifteen calendar days

following the expiry of the exercise period of the abovementioned

put option.

The exercise price of these options will be the cash equivalent, for one

Havas share, of the market value of 0.44 Vivendi share calculated on the

basis of the average stock market price for Vivendi shares on Euronext

Paris, weighted by the daily trading volumes on the regulated market of

Euronext Paris, during the ten trading days preceding the date of vesting of

Havas restricted and performance shares.

By way of derogation, given the proximity of the vesting period applicable to

a plan that had been granted on January29, 2014 (vested on April29,

2018), this exercise price was equal to the tender offer price, i.e., €9.25 per

Havas share, for the beneﬁciaries of this plan.

As of December31, 2018, 2,297thousand Havas shares were subject to a

liquidity agreement and will therefore be granted to the beneficiaries

subject to their presence upon maturity of each plan, and then acquired by

Vivendi. 3,570thousand Havas shares will be exchanged for approxima-

tively 1,571thousand Vivendi shares (on the basis of 0.44 Vivendi for every

one Havas share).

Transactions relating to outstanding shares that have occurred since July3, 2017 (the date on which Vivendi took control of Havas) were as follows:

Numberof outstanding shares

(inthousands)

Balance as of December31, 2016 -

Resulting from the business combination 8,275

Forfeited -

Cancelled (342)

Balance as of December31, 2017 7,933

Forfeited (a) (1,719)

Cancelled (347)

Balance as of December31, 2018 5,867

(a) With respect to the plan granted on January29, 2014 and which expired on April29, 2018, 870thousand shares were paid in cash by Vivendi at a price of

€9.25pershare and 849thousand Havas shares were exchanged for 374thousand Vivendi shares, on the basis of 0.44 Vivendi share for every one Havas share in

accordance with the terms and conditions of the plan described above.

In 2018, the charge recognized in respect of all restricted and performance share plans granted by Havas amounted to €10million, compared to €4million in

the second half of 2017.

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Note19. Borrowings and other ﬁnancial liabilities

andﬁnancialriskmanagement

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

18.3. RESTRICTED SHARE PLANS GRANTED BYGAMELOFT S.E.

The restricted share plans of Gameloft S.E. (“Gameloft”) were valued on the basis of the stock market price of the Gameloft share as of the date of the Board

of Directors meeting that approved the grant of restricted shares, taking into account the retention period on the shares following vesting. The deﬁnitive grant

of shares to beneﬁciaries is conditional upon the beneﬁciary’s employment contract with the company being continuously in force throughout the entire

vesting period, of two or four years depending on the plan.

Transactions on outstanding restricted shares that occurred in 2017 and 2018 were as follows:

Numberof outstanding

restricted shares

(inthousands)

Balance as of December31, 2016 1,333

Issued (553)

Forfeited -

Cancelled (46)

Balance as of December31, 2017 734

Issued (306)

Forfeited -

Cancelled (87)

Balance as of December31, 2018 (a) 341

(a) The weighted-average remaining period before delivering restricted shares was 0.96year.

In the second half of 2018, the beneﬁciaries approved the liquidity agreement proposed by Vivendi. The numberof shares referred to in this agreement was

1,606thousand shares.

18.4. DAILYMOTION’S LONG-TERM INCENTIVE PLAN

In 2015, Vivendi implemented a long-term incentive plan for a ﬁve-year period for certain key executives of Vivendi. This plan is tied to the growth of

Dailymotion’s enterprise value compared to its acquisition value, to be measured as of June30, 2020, based upon an independent expertise. In the event of

an increase in Dailymotion’s value, the amount of the compensation with respect to the incentive plan is capped at a percentage of such increase, depending

on the beneﬁciary. Within the six months following June30, 2020, the plan will be settled in cash, if applicable.

In accordance with IFRS2, a compensation expense must be estimated and accounted for at each reporting date until the payment date. As of

December31,2018, no charges were accounted for with respect to this plan, unchanged compared to prior years.

NOTE19. BORROWINGS AND OTHER FINANCIAL LIABILITIES

ANDFINANCIALRISKMANAGEMENT

(inmillions of euros) Note

December31, 2018 January1, 2018

Total Long-term Short-term Total Long-term Short-term

Bonds 19.2 4,050 3,350 700 4,150 4,050 100

Short-term marketable securities issued - - - - - -

Bank overdrafts 98 - 98 75 - 75

Accrued interest to be paid 17 - 17 18 - 18

Bank credit facilities (drawn conﬁrmed)

19.3 - - - - - -

Cumulative effect of amortized cost

19.1 (14) (13) (1) (18) (18) -

Other 65 10 55 141 12 129

Borrowings at amortized cost 4,216 3,347 869 4,366 4,044 322

Commitments to purchase non-controlling interests 114 98 16 144 103 41

Derivative ﬁnancial instruments

19.7 6 3 3 33 (a) 23 10

Borrowings and other ﬁnancial liabilities 4,336 3,448 888 4,543 4,170 373

(a) In accordance with IFRS9, the fair value of the options pursuant to which Banijay Group Holding and Lov Banijay may redeem the bonds in shares was reclassiﬁed as a

reduction of ﬁnancial assets as from January1, 2018 (please refer to Notes12 and 28.2).

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Note19. Borrowings and other ﬁnancial liabilities

andﬁnancialriskmanagement

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

19.1. FAIR MARKET VALUE OF BORROWINGS AND OTHER FINANCIAL LIABILITIES

(inmillions of euros)

December31, 2018 January1, 2018

Carrying

value

Fair market

value Level (a)

Carrying

value

Fair market

value Level (a)

Nominal value of borrowings 4,230 4,384

Cumulative effect of amortized cost (14) (18)

Borrowings at amortized cost 4,216 4,291 na 4,366 4,506 na

Commitments to purchase non-controlling interests 114 114 3 144 144 3

Derivative ﬁnancial instruments 6 6 2 33 33 2

Borrowings and other ﬁnancial liabilities 4,336 4,411 4,543 4,683

na: not applicable.

(a) The three classiﬁcation levels for the measurement of ﬁnancial liabilities at fair value are deﬁned in Note1.3.1.

19.2. BONDS

(inmillions of euros)

Interest rate (in %)

Maturity December31, 2018 January1, 2018nominal effective

Bonds issued by VivendiSA

€850million (September2017) (a) 0.875% 0.99% September 2024 850 850

€600million (November2016) (a) 1.125% 1.18% November 2023 600 600

€1billion (May2016) (a) 0.750% 0.90% May 2021 1,000 1,000

€500million (May2016) (a) 1.875% 1.93% May 2026 500 500

€700million (December2009) (b) 4.875% 4.95% December 2019 700 700

Bonds issued by HavasSA

€400million (December2015) (a) 1.875% 1.94% December 2020 400 400

€100million (July2013) (a) 3.125% 3.125% July 2018 (c) - 100

Nominal value of bonds 4,050 4,150

(a) Bonds listed on the Euronext Paris Stock Exchange.

(b) Bonds listed on the Luxembourg Stock Exchange.

On March22, 2017, Vivendi set up a €3billion Euro Medium-Term Note

(EMTN) program giving Vivendi full ﬂexibility to issue bonds. This program

was renewed on March23, 2018 and filed with the AMF (Autorité des

marchés ﬁnanciers) under visa n°18-090 for a 12-month period. Its renewal

was approved by the Management Board on January21, 2019.

Bonds issued by VivendiSA contain customary provisions related to events

of default, negative pledge and rights of payment (pari-passu ranking).

They also contain an early redemption clause in the event of a change of

control (1) if, as a result of any such event, the long-term rating of VivendiSA

is downgraded below investment grade status (Baa3/BBB-).

Bonds issued by Havas contain an early redemption clause in the event of a

change of control (2).

19.3. BANK CREDIT FACILITIES

As of December31, 2018, VivendiSA had a €2billion undrawn syndicated

bank credit facility, maturing on October29, 2021. Taking into account the

absence of short-term marketable securities issued and backed by this bank

credit facility, €2billion of this facility was available as of December31,

2018. At the end of each half-year, VivendiSA was required to comply with a

Proportionate Financial Net Debt (3) to EBITDA (4) ﬁnancial covenant over a

12-month rolling period, not exceeding 3 for the duration of the loan. Non-

compliance with this covenant could result in the early redemption of the

bank credit facility if it were drawn, or its cancellation. As of December31,

2018, VivendiSA was in compliance with its ﬁnancial covenant.

(1) In the bonds issued in May2016 and November2016, Bolloré Group was carved out of the change-of-control provision.

(2) Change of control is deﬁned as the settlement/delivery of a tender offer following which one or more individual(s) or legal entitie(s) which does/do not belong to Bolloré Group and Vivendi, acting

in isolation or in concert, acquire(s) over 50% of HavasSA’s share capital or voting rights.

(3) Relates to Financial Net Debt as deﬁned by Vivendi, plus derivative ﬁnancial instruments whose underlying instruments are not Financial Net Debt items and commitments to purchase non-controlling

interests.

(4) Relates to EBITDA as deﬁned by Vivendi plus dividends received from unconsolidated companies.

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Note19. Borrowings and other ﬁnancial liabilities

andﬁnancialriskmanagement

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

On January16, 2019, VivendiSA’s syndicated bank credit facility was

amended for an amount of €2.2billion and its maturity was extended to

January16, 2024 (with two one-year extension options). In addition,

committed bilateral credit facilities granted by leading banks were signed

by Vivendi in January2019, for an aggregate available amount of

€1.2billion maturing in January2024.

All these credit facilities are no longer required to comply with ﬁnancial

covenants but they contain customary provisions relating to events of

default and covenants applicable to Vivendi in terms of negative pledge and

merger transactions.

As of February11, 2019 (the date of Vivendi’s Management Board meeting

that approved the Consolidated Financial Statements for the year ended

December31, 2018), €3.3billion of VivendiSA’s facilities were available,

taking into account the short-term marketable securities issued and backed

by these credit facilities for €100million.

On February11, 2019, Vivendi’s Management Board adopted a proposal to

increase the maximum amount of VivendiSA’s short-term marketable

securities program authorized by the Banque de France to €3.4billion. This

proposal was presented to, and approved by, Vivendi’s Supervisory Board at

its meeting held on February14, 2019.

In addition, HavasSA has committed credit facilities, undrawn as of

December31, 2018, granted by leading banks for an aggregate amount of

€510million, including €330million maturing in 2020, €30million maturing

in 2021 and €150million maturing in 2023. These credit facilities are

required to comply with the following ﬁnancial covenants at each annual

closing date:

3 Adjusted EBITDA (1) to Net interest expense (2) ratio must be

higher than 3.5 (3); and

3 Adjusted Net Debt (4) to Adjusted EBITDA ratio must be lower than 3.

As of February11, 2019 (the date of Vivendi’s Management Board meeting

that approved the Consolidated Financial Statements for the year ended

December31, 2018), €3.7billion of Vivendi group’s (VivendiSA and

HavasSA) facilities were available, taking into account the short-term

marketable securities issued and backed by these credit facilities for

€240million.

19.4. BORROWINGS BY MATURITY

(inmillions of euros) December31, 2018 January1, 2018

Maturity

< 1 year (a) 869 21% 322 7%

Between 1 and 2 years 403 9% 703 16%

Between 2 and 3 years 1,003 24% 406 9%

Between 3 and 4 years 1 - 1,001 23%

Between 4 and 5 years 601 14% - -

> 5 years 1,353 32% 1,952 45%

Nominal value of borrowings 4,230 100% 4,384 100%

(a) As of December31, 2018, short-term borrowings (with a maturity period of less than one year) notably included Vivendi’s bond maturing in December2019 for

€700million, as well as bank overdrafts for €98million. As of January1, 2018, they notably included HavasSA’s bond, which expired on July11, 2018 for €100million,

as well as bank overdrafts for €75million.

The average “economic” term of the group’s financial debt, calculated

based on the assumption that available medium term credit lines may be

used to redeem the group’s shortest term borrowings, was 5.3years as of

December31, 2018 (taking into account the new bank ﬁnancing signed in

January2019), compared to 5.0 years as of December31, 2017.

As of December31, 2018, the future undiscounted cash ﬂows related to

borrowings and other financial liabilities amounted to €4,558million

(compared to €4,862million as of January1, 2018) with a carrying value of

€4,336million (compared to €4,543million as of January1, 2018) and are

set out in Note22.1 in the group’s contractual minimum future payments

schedule.

19.5. INTEREST RATE RISK MANAGEMENT

Vivendi’s interest rate risk management seeks to reduce its net exposure to

interest rate increases. Therefore, Vivendi uses, if needed, pay-ﬂoating and

pay-ﬁxed interest rate swaps. These instruments thus enable the group to

manage and reduce volatility for future cash flows related to interest

payments on borrowings.

As of December31, 2018, the nominal value of borrowings at ﬁxed interest

rate amounted to €4,097million (compared to €4,218million as of

December31, 2017) and the nominal value of borrowings at floating

interest rate amounted to €133million (compared to €166million as of

December31, 2017).

As of December31, 2018 and December31, 2017, Vivendi did not subscribe

to any pay-ﬂoating or pay-ﬁxed interest rate swaps.

(1) Corresponds, on the basis of Havas’s consolidated ﬁnancial statements as of December31 of each year, to income from operations plus intangible and tangible ﬁxed asset depreciation and

amortization, stock option charges and other compensation as deﬁned by IFRS2.

(2) Corresponds, on the basis of Havas’s consolidated ﬁnancial statements as of December31 of each year, to the total amount of ﬁnancial expenses minus interest income, excluding net provisions

on ﬁnancial assets and ﬁnancial expenses in connection with the repurchase or the restructuring of the convertible bond lines.

(3) This covenant does not apply to the credit facilities maturing in 2023.

(4) Corresponds, at a given date and on the basis of Havas’s consolidated ﬁnancial statements, to convertible bonds and other borrowings and ﬁnancial liabilities (excluding convertible bonds to be

redeemed in shares) minus cash and cash equivalents as recorded in Havas’s consolidated ﬁnancial statements prepared under IFRS.

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Note19. Borrowings and other ﬁnancial liabilities

andﬁnancialriskmanagement

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

19.6. FOREIGN CURRENCY RISK MANAGEMENT

Breakdown by currency

(inmillions of euros) December31, 2018 January1, 2018

Euro – EUR 4,111 97% 4,288 98%

US dollar – USD 8 - 1 -

Other 111 3% 95 2%

Nominal value of borrowings before hedging 4,230 100% 4,384 100%

Currency swaps USD 693 1,334

Other currency swaps (71) 192

Net total of hedging instruments (a) 622 1,526

Euro – EUR 4,733 112% 5,814 133%

US dollar – USD (685) -16% (1,333) -31%

Other 182 4% (97) -2%

Nominal value of borrowings after hedging 4,230 100% 4,384 100%

(a) Notional amounts of hedging instruments translated into euros at the closing rates.

Foreign currency risk

The group’s foreign currency risk management is centralized by VivendiSA’s

Financing and Treasury Department for all its controlled subsidiaries, except

if, during a transition period, an acquired subsidiary is authorized to pursue,

at its level, spot and forward exchange transactions. This policy primarily

seeks to hedge budget exposures (at an 80% level) resulting from monetary

ﬂows generated by operations performed in currencies other than the euro

as well as from external firm commitments (at a 100% level), primarily

relating to the acquisition of editorial content (e.g., sports, audiovisual and

ﬁlm rights) and certain capital expenditures (e.g., set-top boxes), realized in

currencies other than the euro. Most of the hedging instruments are foreign

currency swaps or forward contracts that have a maturity period of less

than one year. Considering the foreign currency hedging instruments set up,

an unfavorable and uniform euro change of 1% against all foreign

currencies in position as of December31, 2018, would have a non-

significant cumulative impact on net earnings (around €1million). In

addition, the group may hedge foreign currency exposure resulting from

foreign-currency denominated ﬁnancial assets and liabilities. Moreover, due

to their non-signiﬁcant nature, net exposures related to subsidiaries’ net

working capital (internal ﬂows of royalties as well as external purchases)

are generally not hedged. The associated risks are settled at the end of

each month by translating the amounts into the functional currency of the

relevant operating entities.

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Note19. Borrowings and other ﬁnancial liabilities

andﬁnancialriskmanagement

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

The following tables set out the foreign currency risk management instruments used by the group; the positive amounts relate to currencies to be received

and the negative amounts relate to currencies to be delivered at contractual exchange rates:

(inmillions of euros)

December31, 2018

Notional amounts Fair value

Total USD PLN GBP Other Assets Liabilities

Sales against the euro (408) (131) (170) (62) (45) - 3

Purchases against the euro 1,727 942 128 133 524 19 2

Other - (235) 100 94 41 5 1

1,319 576 58 165 520 24 6

Breakdown by accounting category of foreign currency hedging instruments

Cash Flow Hedge

Sales against the euro (33) (1) (16) - (16) - -

Purchases against the euro 92 45 - - 47 4 -

Other - (23) 14 - 9 - -

59 21 (2) - 40 4 -

Fair Value Hedge

Sales against the euro (313) (130) (154) - (29) - 3

Purchases against the euro 913 780 - 133 - 13 1

Other - (136) 86 49 1 5 1

600 514 (68) 182 (28) 18 5

Economic Hedging (a)

Sales against the euro (62) - - (62) - - -

Purchases against the euro 722 117 128 - 477 2 1

Other - (76) - 45 31 - -

660 41 128 (17) 508 2 1

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Note19. Borrowings and other ﬁnancial liabilities

andﬁnancialriskmanagement

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

(inmillions of euros)

January1, 2018

Notional amounts Fair value

Total USD PLN GBP Other Assets Liabilities

Sales against the euro (362) (73) (132) (30) (127) 2 3

Purchases against the euro 2,094 1,548 93 193 260 3 26

Other - 68 (95) 2 25 - 4

1,732 1,543 (134) 165 158 5 33

Breakdown by accounting category of foreign currency hedging instruments

Cash Flow Hedge

Sales against the euro (79) - (7) (11) (61) 2 -

Purchases against the euro 50 23 - 2 25 - -

Other - 16 (16) - - - -

(29) 39 (23) (9) (36) 2 -

Fair Value Hedge

Sales against the euro (281) (73) (125) (19) (64) - 3

Purchases against the euro 891 781 - 106 4 1 19

Other - 86 (79) 2 (9) - 3

610 794 (204) 89 (69) 1 25

Economic Hedging (a)

Sales against the euro (2) - - - (2) - -

Purchases against the euro 1,153 744 93 85 231 2 7

Other - (34) - - 34 - 1

1,151 710 93 85 263 2 8

(a) The economic hedging instruments relate to derivative ﬁnancial instruments that are not eligible for hedge accounting pursuant to IAS9.

In addition, the depreciation of the British pound (GBP) against the euro, following the referendum held on June23, 2016 endorsing the United Kingdom’s exit

from the European Union (“Brexit”), mainly impacted Universal Music Group’s revenues in 2017. In addition, Vivendi has thoroughly reviewed the impact of

interest and foreign exchange rate changes on the group’s debt and ﬁnancial assets, as well as on pension funds, and a report was submitted to Vivendi’s

Audit Committee to that effect. As of the date of this report, no signiﬁcant impact on Vivendi’s consolidated ﬁnancial position has been recognized. Other

potential effects that could impact the group as a result of the Brexit will be assessed once the terms of the United Kingdom’s departure from the European

Union are known.

19.7. DERIVATIVE FINANCIAL INSTRUMENTS

Value on the Statement of Financial Position

(inmillions of euros) Note

December31, 2018 January1, 2018

Assets Liabilities Assets Liabilities

Interest rate risk management 19.5 - - - -

Foreign currency risk management

19.6 24 6 5 33

Other 14 - 14 (a) -

Derivative ﬁnancial instruments 38 6 19 33

Deduction of current derivative ﬁnancial instruments (7) (3) (4) (10)

Non-current derivative ﬁnancial instruments 31 3 15 23

(a) In accordance with IFRS9, the fair value of the options pursuant to which Banijay Group Holding and Lov Banijay may redeem the bonds in shares was reclassiﬁed as a

reduction of ﬁnancial assets as from January1, 2018 (please refer to Notes12 and 28.2).

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Note20. Consolidated Cash Flow Statement

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Unrealized gains and losses recognized directly in equity

(inmillions of euros)

Cash Flow Hedge

Net Investment

Hedge Total

Interest rate risk

management

Foreign currency risk

management

Balance as of December31, 2016 2 3 39 44

Charges and income directly recognized in equity - (7) 42 35

Items to be reclassiﬁed to proﬁt or loss (2) (1) - (3)

Tax effect - 1 - 1

Balance as of December31, 2017 - (4) 81 77

IFRS9 restatements - 1 - 1

Balance as of January1, 2018 - (3) 81 78

Charges and income directly recognized in equity - 3 - 3

Items to be reclassiﬁed to proﬁt or loss - - - -

Tax effect - - - -

Balance as of December31, 2018 - - 81 81

19.8. CREDIT RATINGS

As of February11, 2019 (the date of Vivendi’s Management Board meeting that approved the Consolidated Financial Statements for the year ended

December31, 2018), Vivendi’s credit ratings were as follows:

Rating agency Type of debt Ratings Outlook

Standard & Poor’s

Long-term corporate debt BBB

Stable

Senior unsecured debt BBB

Moody’s Long-term senior unsecured debt Baa2 Stable

NOTE20. CONSOLIDATED CASH FLOW STATEMENT

20.1. ADJUSTMENTS

(inmillions of euros) Note

Year ended December31,

2018 2017

Items related to operating activities with no cash impact

Amortization and depreciation of intangible and tangible assets

3 453 461

Change in provision, net (25) (31)

Other non-cash items from EBIT 4 (6)

Other

Reversal of reserve related to the Securities Class Action litigation in the United States

23 - (27)

Income from equity afﬁliates – operational

11 (7) (146)

Proceeds from sales of property, plant, equipment and intangible assets 7 2

Adjustments 432 253

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Note21. Related parties

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

20.2. INVESTING AND FINANCING ACTIVITIES

WITHNOCASH IMPACT

In 2018, there was no signiﬁcant investing and ﬁnancing activities with no

cash impact.

On July6, 2017, a portion of the “new ORAN 1” issued by Banijay Group

Holding was early redeemed in cash for €39million and converted into

Banijay Group Holding shares, bringing Vivendi’s interest in Banijay Group

Holding from 26.2% to 31.4% (please refer to Note11.1).

NOTE21. RELATED PARTIES

Vivendi’s related parties are the Corporate Ofﬁcers, who are members of

Vivendi’s Supervisory and Management Boards, and other related parties

including:

3 companies fully consolidated by Vivendi. The transactions between

these companies have been eliminated for the preparation of

Vivendi’s Consolidated Financial Statements;

3 companies over which Vivendi exercises a signiﬁcant inﬂuence;

3 all companies in which Corporate Ofﬁcers or their close relatives

hold signiﬁcant voting rights;

3 minority shareholders exercising a significant influence over the

group’s subsidiaries; and

3 Bolloré Group’s related parties, as Vivendi has been fully consoli-

dated by Bolloré Group since April26, 2017.

21.1. CORPORATE OFFICERS

Supervisory Board

The Supervisory Board is currently comprised of 12 members, including an

employee shareholder representative and an employee representative. It is

made up of six women, i.e., a ratio of 55% (in accordance with Law n°2011-

103 of January27, 2011, the employee representative is not taken into

account for the calculation of this percentage). In 2018, the composition of

the Supervisory Board has changed as follows:

3 on April19, 2018, Vivendi’s General Shareholders’ Meeting

appointed Ms. Michèle Reiser as a memberof the Supervisory

Board for a four-year term, and renewed the terms of office of

Ms.Aliza Jabès, Ms.Cathia Lawson-Hall, Ms.Katie Stanton and

Mr.Philippe Bénacin as members of the Supervisory Board for the

same period; and

3 following the Shareholders’ Meeting of April19, 2018, Vivendi’s

Supervisory Board unanimously appointed Mr.Yannick Bolloré as

Chairman, replacing Mr.Vincent Bolloré, who remains a memberof

the Supervisory Board. The Supervisory Board also confirmed

Mr.Philippe Bénacin as Vice Chairman.

With respect to ﬁscal year 2018, the gross compensation of the Chairman of

the Supervisory Board amounted to €400,000, including directors’ fees of

€60,000, allocated as follows:

3 the gross compensation of Mr.Vincent Bolloré, as Chairman of the

Supervisory Board until April19, 2018, amounted to €122,376,

including directors’ fees of €20,000; for 2017, the compensation of

Mr.Vincent Bolloré as Chairman of the Supervisory Board amounted

to €400,000, including directors’ fees of €60,000; and

3 the gross compensation of Mr.Yannick Bolloré, as Chairman of the

Supervisory Board since April19, 2018, amounted to €277,624,

including directors’ fees of €40,000.

In addition, as Chairman and Chief Executive Ofﬁcer of Havas, a Vivendi

subsidiary, Mr.Yannick Bolloré received a ﬁxed compensation, as well as

beneﬁts in kind, totaling a gross amount of €1,058,993 in 2018 (no variable

compensation was paid in 2018 with respect to ﬁscal year 2017), compared

to €1,408,993 in 2017 (ﬁxed and variable compensation). On May17, 2018,

Mr.Yannick Bolloré benefited from an allocation of 18,000 Vivendi’s

performance shares, subject to the satisfaction of the performance criteria

(please refer to Note18.1.1).

The gross amount of directors’ fees paid to the other members of the

Supervisory Board with respect to ﬁscal year 2018 was an aggregate gross

amount of €1,140,000 (compared to €1,117,500 with respect to ﬁscal year

2017).

Moreover, on March26, 2018, the services contract between Mr.Dominique

Delport and Vivendi terminated, as did his membership on the Corporate

Governance, Nominations and Remuneration Committee of Vivendi’s

Supervisory Board, although he remains a memberof the Board. Under the

terms of the services contract, since October1, 2015, Mr.DominiqueDelport

had been providing assistance and advice regarding the creation and use of

new digital content as part of the development of Dailymotion. As a result

of the termination of this contract, Mr.DominiqueDelport no longer beneﬁts

from the long-term incentive plan tied to the growth of Dailymotion’s

enterprise value compared to its acquisition value and no longer has any

operational responsibilities within the group. Under the services contract,

Mr.Dominique Delport received a gross amount of €75,000 in 2018,

compared to €300,000 in 2017.

Finally, as an employee of Havas Media France (subsidiary of HavasSA),

Mr.Dominique Delport received a total gross compensation of €1,775,437 in

2018 (compared to €1,446,312 in 2017).

Management Board

The Management Board is currently comprised of seven members. At its

meeting held on May17, 2018, the Supervisory Board, upon the recommen-

dation of the Corporate Governance, Nominations and Remuneration

Committee, unanimously approved the renewal for a four-year period of the

term of office (which expired on June23, 2018) of each memberof the

Management Board and its Chairman.

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Note21. Related parties

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

In 2018, the gross compensation paid by the Vivendi group to the

Management Board members amounted to €9.6million (compared to

€8.7million in 2017). This amount included:

3 ﬁxed compensation of €5.3million (compared to €4.9million in 2017);

3 variable compensation of €3.6million paid in 2018 with respect to

ﬁscal year 2017 (compared to €3.4million paid in 2017 with respect

to ﬁscal year 2016);

3 other compensation and directors’ fees paid by controlled

subsidiaries; and

3 beneﬁts in kind.

The charge recorded by Vivendi with respect to equity-settled share-based

compensation plans granted to the members of the Management Board

amounted to €3.3million in 2018 (compared to €3.7million in 2017).

The Supervisory Board, at its meeting held on February14, 2019, conﬁrmed

that the performance criteria applying to the growth rate of rights under the

group deﬁned beneﬁt supplemental pension plan had been met with respect

to ﬁscal year 2018. The charge recorded by Vivendi related to vested rights

under pension commitments in favor of Management Board members

amounted to €7.0million (compared to €8.7million in 2017). As of

December31, 2018, the amount of net pension obligations toward the

Management Board members amounted to €44.4million (compared to

€43.0million as of December31, 2017).

The Chairman of the Management Board, Mr.Arnaud de Puyfontaine

waived his employment contract. In accordance with the resolutions

approved by the General Shareholders’ Meeting held on April17, 2015, he

was granted entitlement to severance compensation in the event of the

involuntary termination of his employment, subject to the satisfaction of

performance conditions. At its meeting held on February14, 2019, the

Supervisory Board, upon the recommendation of the Corporate Governance,

Nominations and Remuneration Committee, decided:

3 to increase from 80% to 90% the minimum achievement level of

performance objectives conditioning the payment of the severance

compensation; and

3 to revoke his right to maintain all rights to performance shares.

These rights may be maintained, if appropriate, pro rata to the

duration of his presence within the group during the vesting period,

subject to the satisfaction of the related performance criteria.

At its meetings held on May17, 2018 and July30, 2018, after having

examined the impact of the termination of his executive duties with

Telecom Italia on April24, 2018 (1), the Supervisory Board, upon the

recommendation of the Corporate Governance, Nominations and

Remuneration Committee, decided (i) to no longer apply a pro rata factor to

his reference compensation for 2018, (ii) to increase the ﬁxed part of his

reference compensation to €1,400,000 for 2018, the performance criteria

and thresholds used to determine the variable part remain unchanged, and

(iii) to pay him a single amount of €390,000.

On May17, 2018, the Chairman of the Management Board received an

annual grant of 50,000 performance shares.

The report on corporate governance contained in Chapter 3 of the 2018

Annual Report contains a detailed description of the compensation policy,

setting out the principles and criteria for determining, distributing and

attributing the ﬁxed and variable components of the overall compensation

and the beneﬁts of any kind attributable to VivendiSA’s Corporate Ofﬁcers

in connection with their term of ofﬁce. This chapter also contains details of

the ﬁxed and variable components of their compensation and the beneﬁts

of any kind paid or attributed to the Corporate Officers with respect to

ﬁscal year 2018.

21.2. BOLLORÉ GROUP

On February16, 2018, Bolloré Group, which held 34.7million call options on

Vivendi shares, announced that it had exercised 21.4million options,

representing 1.7% of Vivendi’s share capital, at an average exercise price of

€16.57, which had been previously set in October2016. This transaction did

not change Bolloré Group’s reported interest in Vivendi given the

assimilation of these options pursuant to ArticleL.233-9I,4° of the French

Commercial Code (Code de commerce).

On March2, 2018, Bolloré Group acquired 2million Vivendi shares on the

market at a price of €20.425 per share. Since that date, and until June25,

2018, Bolloré Group acquired 57.3million Vivendi shares on the market at

an average price of €20.95 per share.

On June25, 2018, Bolloré Group crossed the 25% threshold of Vivendi’s

share capital and held 325,133,093 Vivendi shares, representing

415,565,932 voting rights, i.e., 25.01% of the share capital and 29.20% of

the gross voting rights. Upon crossing this 25% threshold of Vivendi’s share

capital and in accordance with ArticleL.233-7, paragraph VII of the French

Commercial Code (Code de commerce) and Article223-17 of the AMF’s

General Regulations (Règlement général), Mr.Vincent Bolloré both for

himself and for Compagnie de Cornouaille, which he controls and with

whom he is deemed by law to be acting in concert, made the following

statement of intent with respect to Vivendi for the next six months (please

refer to AMF notice No.218C1161, dated July2, 2018):

3 on June25, 2018, Compagnie de Cornouaille acquired

1,044,622 additional shares which were financed using its

available cash;

3 the declarant has not entered into any agreement establishing a

concerted action with respect to Vivendi;

3 the declarant contemplates continuing to purchase Vivendi shares

depending primarily on market opportunities;

3 since April26, 2017, the declarant already meets the criteria for

exclusive control in accordance with IFRS10, but not those set by

ArticleL.233-3 of the French Commercial Code (Code de commerce);

the declarant wishes to continue strengthening its control without

launching a public tender offer for Vivendi;

3 the investment in Vivendi reflects Bolloré Group’s confidence in

Vivendi’s capacity to develop and its willingness to support Vivendi

in its strategy;

3 the declarant does not contemplate any of the transactions referred

to in Article223-17 I, 6° of the AMF’s General Regulations

(Règlement général), subject to the potential transactions regarding

Universal Music Group (UMG) recently mentioned by Vivendi;

3 the declarant holds 13,344,830 call options that enable it to acquire

13,344,830 Vivendi shares, at any time until June25, 2019, and it

plans to exercise them depending, in particular, on market

conditions;

3 the declarant is party to a temporary sale agreement, as borrower,

in respect of 34,700,000 Vivendi shares carrying an equal amount of

voting rights; the declarant is not a party to any other temporary

sale agreement; and

3 the declarant plans to request additional appointments to the

company’s Supervisory Board.

Between June26 and December27, 2018, Bolloré Group acquired

41.6million Vivendi shares on the market at an average price of €21.30 per

share. On October18, October25, and December21, 2018, Bolloré Group

declared that it had early returned a total of 23.5million Vivendi shares of

the 34.7million temporarily held. As of December27, 2018, Bolloré Group

(1) Elimination of the payment by Telecom Italia of his ﬁxed compensation with respect to ﬁscal year 2018 as from that date and non-payment of his variable compensation with respect to ﬁscal year 2017.

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Note21. Related parties

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

declared that it held 343,224,948 (1) Vivendi shares representing

395,657,787 voting rights, i.e., 26.28% of Vivendi’s share capital and

28.51% of the gross voting rights.

In light of the analysis conducted by Bolloré Group, following Vivendi’s

General Shareholders’ Meeting held on April25, 2017, of other facts and

circumstances that indicate its ability to direct the relevant activities of

Vivendi, Bolloré Group determined that the conditions of control within the

meaning of IFRS10 were fulﬁlled. The shareholding in Vivendi, which had

previously been accounted for using the equity method since October7,

2016, was fully consolidated from April26, 2017.

In addition, on April24, 2018, as part of the payment of the dividend by

Vivendi to its shareholders with respect to ﬁscal year 2017, Bolloré Group

received a dividend of €134million (compared to a dividend with respect to

ﬁscal year 2016 of €92million paid in 2017).

Moreover, on July3, 2017, Vivendi acquired the 59.2% interest in Havas

held by Bolloré Group for €2,317million paid in cash. This transaction is

regulated by the procedure applying to related-party agreements and the

price of €9.25 per share was submitted to a third-party appraisal in

accordance with applicable laws and regulations. Since July3, 2017,

Vivendi has fully consolidated Havas and the transactions between Havas

and Vivendi’s other subsidiaries are eliminated within the intersegment

transactions.

21.3. OTHER RELATED-PARTY TRANSACTIONS

Vivendi’s other related parties are companies over which Vivendi exercises

a signiﬁcant inﬂuence (i.e., primarily Telecom Italia, Banijay Group Holding

and Vevo: please refer to Note11) and companies in which Vivendi’s

Corporate Ofﬁcers or their close relatives hold signiﬁcant voting rights. They

notably included Bolloré Group and its subsidiaries, either directly or

indirectly controlled by Mr.Vincent Bolloré, a memberof Vivendi’s

Supervisory Board, and his family. Moreover, as Bolloré Group has fully

consolidated Vivendi since April26, 2017, Vivendi’s related parties also

include Bolloré Group’s related parties (in particular Mediobanca).

In addition, certain Vivendi subsidiaries maintain business relationships, on

an arm’s-length basis, involving non-material amounts, with Quinta

Communications Group (controlled by Mr.Tarak Ben Ammar, a memberof

Vivendi’s Supervisory Board), Groupe Nuxe (controlled by Ms.Aliza Jabès, a

memberof Vivendi’s Supervisory Board) and Interparfums (controlled by

Mr.Philippe Bénacin, Vice Chairman of Vivendi’s Supervisory Board).

In addition, the table below also includes the transactions with Havas

Group and its subsidiaries (previously 59.2% held by Bolloré Group and

whose Chairman and Chief Executive Officer is Mr.Yannick Bolloré,

Chairman of Vivendi’s Supervisory Board) until the consolidation of Havas in

Vivendi’s Financial Statements on July3, 2017.

(inmillions of euros) December31, 2018 January1, 2018

Assets

Non-current content assets 1 1

Non-current ﬁnancial assets 86 103

Of which Banijay Group Holding and Lov Banijay bonds 73 92

Trade accounts receivable and other 60 66

Of which Bolloré Goup 5 4

Telecom Italia (a) 29 34

Banijay Group Holding (b) 2 2

Mediobanca (c) 3 5

Liabilities

Trade accounts payable and other 29 21

Of which Bolloré Group 13 10

Banijay Group Holding (b) 10 6

Off-balance sheet contractual obligations, net 168 183

Of which Banijay Group Holding (b) 140 180

(1) Including (i) 11,225,000 Vivendi shares temporarily held by Compagnie de Cornouaille pursuant to a temporary share sale agreement (initially in respect of 34,700,000 Vivendi shares for its beneﬁt),

which may be returned, in whole or in part, at any time until June25, 2019, and (ii) 13,344,830 Vivendi shares as a result of off-market acquisition of physically-settled call options that are exercisable

at any time until June25, 2019 and classiﬁed as assimilated shares by Compagnie de Cornouaille pursuant to ArticleL.233-9I,4° of the French Commercial Code (Code de commerce).

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Note21. Related parties

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

(inmillions of euros)

Year ended December31,

2018 2017

Statement of earnings

Operating income 236 214

Of which Bolloré Group 8 5

Havas Group (d) na 3

Telecom Italia (a) 24 15

Banijay Group Holding (b) 2 2

Mediobanca (c) 1 -

Quinta Communications (e) 2 2

Other (Interparfums and Groupe Nuxe) (f) - -

Operating expenses (108) (136)

Of which Bolloré Group (24) (12)

Havas Group (d) na (26)

Banijay Group Holding (b) (52) (60)

Quinta Communications (e) - -

Other (Interparfums and Groupe Nuxe) (f) - -

Advertising transactions

Of which revenue made through Havas’s agencies (d) na 26

media purchases made through Havas’s agencies (d) na (36)

na: not applicable.

(a) Certain Vivendi subsidiaries have rendered operating services to Telecom Italia and its subsidiaries, on an arm’s-length basis (mainly communication services and music

sales): operating income of €14.8million for Havas (€6.9million for the second half of 2017), €4.4million for Universal Music Group (€6.3million in 2017), 4.2million for

Gameloft (€1.4million in 2017) and €0.9million for Vivendi Content (€0.1million in 2017).

(b) Vivendi and its subsidiaries (mainly Canal+ Group) entered into production and program purchase agreements with certain Banijay Group Holding subsidiaries on an

arm’s-length basis.

(c) Certain Havas Group subsidiaries have rendered communications services to Mediobanca and its subsidiaries on an arm’s-length basis.

(d) As from July3, 2017, Vivendi has fully consolidated Havas and the transactions between Havas and Vivendi’s other subsidiaries have been eliminated within the

intersegment transactions. During the ﬁrst half of 2017, certain Havas Group subsidiaries have rendered operating services to Vivendi and its subsidiaries on an arm’s-

length basis. Regarding Canal+ Group:

– as part of their advertising campaigns, customers of Havas Group entered into transactions with Canal+ Group through media agencies for an aggregate amount of

€25million for the ﬁrst half of 2017;

– as part of the advertising campaigns promoting Canal+, Canalsat and Canalplay, Canal+ Group purchased media from major media companies through Havas Group

and its media agencies for €34million for the ﬁrst half of 2017;

– media and production services, broadcasting rights and fees were realized by Havas Group and its subsidiaries for €12million for the ﬁrst half of 2017; and

– Havas Group and its subsidiaries designed and developed advertising campaigns promoting Canal+ Group for €5million for the ﬁrst half of 2017.

(e) Canal+ Group sold rights to Studiocanal catalog movies to Quinta Communications, notably Paddington 2, representing an operating income of €1.7million in 2018

(compared to €1.9million in 2017). In addition, on October8, 2015, Studiocanal and Quinta Communications entered into an agreement to sell video, TV and Video-on-

demand exploitation rights in France and in other French-speaking territories for 28 movies, for a ﬁve-year period. Pursuant to this contract, Canal+ Group recorded an

operating charge of €0.3million in 2018 (unchanged compared to 2017).

(f) Certain Vivendi subsidiaries maintained business relationships, on an arm’s-length basis, involving non-signiﬁcant amounts with Interparfums and Groupe Nuxe.

The following constitutes complementary information about certain related-

party transactions (of which the amounts are included in the table above):

3 CanalOlympia (Vivendi Village’s subsidiary) and Bolloré Africa

Logistics (Bolloré Group’s subsidiary) entered into an agreement to

take over the operations of nine Bluezones and two Bluebus lines of

Bolloré Africa Logistics, for an eight-year period starting January1,

2018, with the aim to develop the CanalOlympia’s venues network

in Africa. For the occupancy of land and buildings, and for the solar

energy supply, CanalOlympia payed a rent of €0.5million in 2018,

and will pay a rent of €1million in 2019, and then €1.5million per

year from 2020 to 2027. Given that CanalOlympia and Bolloré Africa

Logistics have no common directors and executive managers, this

agreement is not regulated by the procedure applying to related-

party agreements.

3 On June2, 2017, VivendiSA acquired a 5% interest in the Economic

Interest Grouping (GIE – Groupement d’intérêt économique) Fleet

Management Services, a Bolloré Group’s subsidiary dedicated,

among other things, to providing air transport operations, for a

consideration of €0.1million. This acquisition entailed the

correlative transfer of the corresponding share of reciprocal

receivables and payables related to the special depreciation of the

GIE’s assets, i.e., receivables for €1.8million and payables for the

same amount as of December31, 2018 (compared to €1.6million as

of December31, 2017). In addition, Havas acquired a 2% interest in

this GIE. In 2017, the charge recognized with respect to the use of

the GIE’s services by Vivendi group amounted to €2.3million in 2018

(compared to €1.4million in 2017).

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Note22. Contractual obligations and other commitments

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE22. CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS

Vivendi’s material contractual obligations and contingent assets and

liabilities include:

3 certain contractual obligations relating to the group’s business

opera tions, such as content commitments (please refer to Note10.2),

contractual obligations and commercial commitments recorded in the

Statement of Financial Position, including ﬁnance leases, off-balance

sheet operating leases and subleases and off-balance sheet

commercial commitments, such as long-term service contracts and

purchase or investment commitments;

3 commitments related to the group’s consolidation scope made under

acquisitions or divestitures such as share purchase or sale commit-

ments, contingent assets and liabilities subsequent to given or

received commitments related to the divestiture or acquisition of

shares, commitments under Shareholders’ agreements and

collateral and pledges granted to third parties over Vivendi’s assets;

3 commitments related to the group’s ﬁnancing: undrawn conﬁrmed

bank credit facilities as well as the management of interest rate,

foreign currency and liquidity risks (please refer to Note19); and

3 contingent assets and liabilities resulting from legal proceedings in

which Vivendi and/or its subsidiaries are either plaintiff or defen-

dant (please refer to Note23).

22.1. CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

(inmillions of euros) Note

Minimum future payments as of December31, 2018

Total minimum future

payments as of

December31, 2017Total

Payments due in

2019 2020-2023 After 2023

Borrowings and other ﬁnancial liabilities 4,558 944 2,212 1,402 4,862

Content liabilities

10.2 2,949 2,817 131 1 2,582

Consolidated statement of ﬁnancial positionitems 7,507 3,761 2,343 1,403 7,444

Contractual content commitments

10.2 5,339 2,523 2,763 53 5,630

Commercial commitments 128 (210) 151 187 (1,204)

Operating leases and subleases 1,453 207 676 570 1,502

Net commitments not recorded in the Consolidated

Statement of Financial Position 6,920 2,520 3,590 810 5,928

Contractual obligations and commercial

commitments 14,427 6,281 5,933 2,213 13,372

Off-balance sheet commercial commitments

(inmillions of euros)

Minimum future payments as of December31, 2018

Total minimum future

payments as of

December31, 2017Total

Due in

2019 2020-2023 After 2023

Satellite transponders 471 77 259 135 390

Investment commitments 179 116 47 16 125

Other 560 255 269 36 772

Given commitments 1,210 448 575 187 1,287

Satellite transponders (124) (65) (59) - (133)

Other (a) (958) (593) (365) - (2,358)

Received commitments (1,082) (658) (424) - (2,491)

Net total 128 (210) 151 187 (1,204)

(a) Includes minimum guarantees to be received by the group pursuant to distribution agreements entered into with third parties, notably Internet Service Providers and

other digital platforms.

In addition, Canal+ Group entered into distribution agreements of Canal channels with the telecom operators Free, Orange and Bouygues Telecom. The variable amounts

of these commitments, which are based on the numberof subscribers, cannot be reliably determined and are not reported in either the Statement of Financial Position

or described in the commitments. They are instead recorded as an expense or income in the period in which they were incurred.

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Note22. Contractual obligations and other commitments

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

In addition, on March14, 2017, Boulogne Studios, a wholly-owned

subsidiary of Vivendi, entered into a bilateral land purchase agreement with

“Val de Seine Aménagement”, the local public urban developer of the

Parisian suburb Boulogne-Billancourt, for a construction project on the île

Seguin. This purchase agreement is subject to certain conditions precedent,

in particular the procurement of a building permit. This project would

consist of building a campus of approximately 150,000 m² which could, in

five to seven years, house a group of companies notably operating in

business sectors such as media and content, as well as digital, sports and

sustainable development. On that date, to guarantee the satisfaction of its

purchase obligations amounting to a total of approximately €330million,

Vivendi paid a €70million deposit that will be returned if the transaction is

not completed by Vivendi.

Off-balance sheet operating leases and subleases

(inmillions of euros)

Minimum future leases as of December31, 2018

Total minimum future

leases as of

December31, 2017Total

Due in

2019 2020-2023 After 2023

Buildings 1,436 208 664 564 1,502

Other 21 3 12 6 9

Leases 1,457 211 676 570 1,511

Buildings (4) (4) - - (9)

Subleases (4) (4) - - (9)

Net total 1,453 207 676 570 1,502

22.2. OTHER COMMITMENTS GIVEN OR RECEIVED

RELATING TO OPERATIONS

Given commitments amounted cumulatively to €37million (compared to

€40million as of December31, 2017). In addition, Vivendi and Havas have

granted guarantees in various forms to ﬁnancial institutions or third parties

on behalf of their subsidiaries in the course of their operations.

Received commitments amounted cumulatively to €10million (compared to

€9million as of December31, 2017).

22.3. SHARE PURCHASE AND SALE COMMITMENTS

In connection with the purchase or sale of operations and ﬁnancial assets,

Vivendi has granted or received commitments to purchase or sell securities:

3 Vivendi has given an undertaking to Ubisoft to sell all the shares it

owns by March7, 2019, the settlement date. In addition, Vivendi

made the commitment to refrain from purchasing Ubisoft shares for

a period of ﬁve years (please refer to Note2.3);

3 Vivendi subscribed to bonds redeemable in shares or cash issued by

Banijay Group Holding and Lov Banijay (please refer to Note11.1);

3 in Novemberand December2018, Vivendi sold on the market its

Telefonica shares, pursuant to its commitment to the Brazilian

Competition Authority (CADE). This commitment remained in force

as long as Vivendi simultaneously held shares of Telefonica and

Telecom Italia, provided that these two companies operated in the

Brazilian telecom market; and

3 certain liquidity rights relating to the strategic partnership entered

into between Canal+ Group, ITI and TVN as described in Note22.5

below.

In addition, Vivendi and its subsidiaries granted or received put and call

options on shares in equity afﬁliates and unconsolidated investments.

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Note22. Contractual obligations and other commitments

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

22.4. CONTINGENT ASSETS AND LIABILITIES SUBSEQUENT TO GIVEN OR RECEIVED COMMITMENTS

RELATEDTOTHEDIVESTITURE OR ACQUISITION OF SHARES

Ref. Context Characteristics (nature and amount) Expiry

Contingent liabilities

Sale of Ubisoft (October2018) Unlimited speciﬁc warranties. -

Sale of GVT (May2015)

Representations and warranties, limited to speciﬁcally identiﬁed tax matters, capped

at BRL 180million.

(a) Sale of Maroc Telecom group (May2014) Commitments undertaken in connection with the sale. -

(b) Sale of Activision Blizzard (October2013)

– Unlimited general warranties; and

– Tax warranties capped at $200million, under certain circumstances.

(c)

Acquisition of Bolloré Group’s channels

(September2012)

Commitments undertaken, in connection with the authorization of the acquisition, with:

– the French Competition Authority; and

– the French Broadcasting Authority.

2019

Divestiture of PTC shares (December2010)

Commitments undertaken to end litigation over the share ownership of PTC:

– Guarantees given to the Law Debenture Trust Company (LDTC), for an amount

up to 18.4% for the ﬁrst €125million, 46% between €125million

and€288million, and 50% thereafter; and

– Guarantee given to Poltel Investment’s (Elektrim) judicial administrator.

(d)

Canal+ Group’s pay-TV activities in France

(January2007-July2017)

Approval of the acquisition of TPS and CanalSatellite subject to compliance

withinjunctions ordered by the French Competition Authority.

2019

Divestiture of PSG (June2006) Unlimited speciﬁc warranties. 2018

Divestiture of UMG manufacturing and distribution

operations (May2005)

Various commitments for manufacturing and distribution services, expired at the end

ofJanuary2017.

2017

NBC Universal transaction (May2004)

andsubsequent amendments (2005-2010)

– Breaches of tax representations; and

– Obligation to cover the Most Favored Nation provisions.

(e) Sale of real estate assets (June2002)

Autonomous ﬁrst demand guarantees given to Nexity, not implemented and expired

inJune2017, capped at €150million in total (tax and decennial guarantees).

2017

Other contingent liabilities Cumulated amount of €20million (compared to €27million as of December31, 2017). -

Contingent assets

Acquisition of the companies that own and manage

all Paddington intellectual property rights, except

forthe publishing rights (June2016)

General and speciﬁc warranties (including tax matters and guarantees related

to the intellectual property).

2023

Acquisition of Bolloré Group’s channels

(September2012)

Warranties capped at €120million, not implemented and expired

as of December31, 2017.

2017

Acquisition of EMI Recorded Music (September2012)

– Commitments relating to full pension obligations in the United Kingdom

assumed by Citi; and

– Warranties relating to losses stemming from taxes and litigation claims,

inparticular those related to pension obligations in the United Kingdom.

Acquisition of Kinowelt (April2008) Speciﬁc warranties, notably on ﬁlm rights granted by the sellers. -

Other contingent assets Cumulated amount of €30million (compared to €43million as of December31, 2017). -

The accompanying notesare an integral part of the contingent assets and liabilities described above.

(a) The main terms of the Maroc Telecom group sale were as follows:

– Vivendi gave certain customary representations and warranties to Etisalat relating to SPT (the holding company of Maroc Telecom group), Maroc Telecom and its

subsidiaries. Vivendi also gave a numberof speciﬁc warranties;

– the indemnity amount payable by Vivendi in respect of indemniﬁable losses incurred by Maroc Telecom or one of its subsidiaries was determined in proportion to the

percentage of ownership held indirectly by Vivendi in the relevant company on the closing date (i.e., 53% for Maroc Telecom);

– Vivendi’s overall indemniﬁcation obligation was capped at 50% of the initial sale price, such threshold being increased to 100% in respect of claims related to SPT;

– Vivendi’s indemniﬁcation obligations in respect of these warranties, other than those related to taxes and SPT, effective for a 24-month period, expired in May2016.

Claims for tax-related indemnities could be made until January15, 2018. The indemnity in respect of SPT remained in effect until the end of a four-year period

following the closing date (i.e., May14, 2018); and

– to guarantee the payment of any speciﬁc indemnity amounts referenced above, Vivendi delivered a bank guarantee to Etisalat in the amount of €247million, which

expired on February15, 2018. This amount had been reduced to €9million.

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Note22. Contractual obligations and other commitments

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Vivendi had agreed to counter-guarantee SFR for any amount that could be claimed by Etisalat or any third party other than Etisalat in relation to the sale of its interest

in Maroc Telecom:

– with respect to the sale agreement entered into with Etisalat, this commitment expired upon termination of Etisalat’s right to make a claim against Vivendi and SFR,

i.e., May14, 2018; and

– this commitment, which also covered any amount that SFR could be required to pay to any third party other than Etisalat, has expired in the absence of any request

from Numericable Group within the applicable statutes of limitations.

(b) In connection with the sale of 88% of Vivendi’s interest in Activision Blizzard, which was completed on October11, 2013 (the “Closing Date”), Vivendi, ASAC II LP, and

Activision Blizzard gave certain reciprocal commitments customary for this type of transaction (i.e., representations, warranties and covenants). Vivendi, ASAC II LP, and

Activision Blizzard undertook to indemnify each other against any losses stemming from any breach of their respective commitments. Such indemniﬁcation is unlimited

as to time and amount.

In addition, Vivendi has agreed to indemnify Activision Blizzard with respect to any tax or other liabilities of AmberHolding SubsidiaryCo. (“Amber”), the Vivendi

subsidiary acquired by Activision Blizzard, relating to periods preceding the Closing Date. Such indemniﬁcation is unlimited as to time and amount. Tax attributes (mainly

net operating loss) held by Amberand assumed by Activision Blizzard were estimated at more than $700million, which represent a potential future tax beneﬁt of

approximately $245million. Vivendi agreed to indemnify Activision Blizzard, under certain circumstances, with respect to these tax attributes, subject to a cap of

$200million limited to ﬁscal years ending on or prior to December31, 2016.

As a reminder, in connection with the creation of Activision Blizzard in July2008, Activision and Vivendi entered into customary agreements for this type of transaction,

including tax sharing and indemnity agreements.

(c) As part of the French Competition Authority’s approval of the acquisition of the Direct 8 and Direct Star channels (renamed C8 and CStar, respectively) granted on

July23, 2012 and renewed on April2, 2014, Vivendi and Canal+ Group gave certain commitments for a ﬁve-year period, renewable once.

On June22, 2017, the French Competition Authority decided to keep, lift or revise certain commitments.

These commitments provide for restrictions on the acquisition of rights to American movies and television series from certain American studios (Canal+ Group can

henceforth enter into output deals bundling free-to-air and pay-TV rights with two American studios) and for French movies (the joint purchase of both free-to-air and

pay-TV rights for more than 20 original French-language ﬁlms per year is prohibited), the separate negotiation of pay-TV and free-to-air rights for certain recent movies

and television series, limitations on the acquisition by C8 and CStar of French catalog movies from Studiocanal (limited to 50% of the total numberand total value of

French catalog movies purchased annually by each of these channels).

These commitments are operative until December31, 2019. If market conditions change signiﬁcantly, Canal+ Group will be able to request that these commitments be

lifted or partially or totally revised. An independent trustee, who was proposed by Canal+ Group and approved by the French Competition Authority on August30, 2017,

is responsible for monitoring the implementation of the commitments.

In addition, on September18, 2012, the French Broadcasting Authority (Conseil Supérieur de l’Audiovisuel) approved the acquisition of the Direct 8 and Direct Star

channels (renamed C8 and CStar, respectively), subject to compliance with certain commitments relating to broadcasting, investment obligations and transfer rights.

(d) On August30, 2006, the merger between Canal+ Group’s pay-TV operations in France and TPS was authorized, in accordance with the merger control regulations,

pursuant to a decision of the French Minister of Economy, Finance and Industry, subject to Vivendi and Canal+ Group complying with certain undertakings for a maximum

period of six years, with the exception of those commitments concerning the availability of channels and Video-on-demand (VOD), which could not exceed ﬁve years.

On October28, 2009, the French Competition Authority opened an enquiry regarding compliance with certain undertakings given by Canal+ Group in connection with the

merger of Canalsatellite and TPS.

On July23, 2012, the merger was once again cleared by the French Competition Authority, subject to compliance with 33 injunctions. These injunctions were issued for

a ﬁve-year period, renewable once.

On June22, 2017, following the reexamination of such injunctions, the French Competition Authority decided to maintain, lift or revise certain of these injunctions.

These injunctions, which have been implemented by Canal+ Group since June22, 2017, consist of the following main components:

– Acquisition of movie rights:

• prohibition on entering into output deals for French ﬁlms except if another pay-TV producer were to enter into an output deal with any of the ﬁve main French

producers/coproducers; and

• disposal by the Canal+ Group of its interest in Orange Cinema Series – OCS SNC or, failing this, adoption of measures that can “neutralize” Canal+ Group’s impact

on Orange Cinema Series – OCS SNC.

– Distribution of pay-TV special-interest channels:

• distribution of a minimum numberof independent channels, distribution of any channel holding premium rights, exclusive or not, and preparation of a reference offer

relating to taking over independent channels included in the Canalsat offer including, among other things, the assumptions and methods to calculate minimal

compensation for these independent channels.

– Video-on-demand (VOD) and subscription video-on-demand (SVOD):

• prohibition on purchasing VOD and SVOD exclusive broadcasting rights to original French-language ﬁlms owned by French right holders and combining these rights

with the purchases of rights for linear broadcast on pay-TV;

• limitation on the exclusive transfer of VOD and SVOD rights to Canal+ Group from Studiocanal’s French ﬁlm catalog; and

• prohibition on entering into exclusive distribution deals for the beneﬁt of Canal+ Group’s VOD and SVOD offers on Internet Service Provider platforms.

These injunctions are operative until December31, 2019. If market conditions change signiﬁcantly, Canal+ Group will be able to request that these injunctions be lifted

or partially or totally revised. An independent trustee, who was proposed by Canal+ Group and approved by the French Competition Authority on August30, 2017, is

responsible for monitoring the implementation of the injunctions.

(e) In connection with the sale of real estate assets to Nexity in June2002, Vivendi granted two autonomous ﬁrst demand guarantees, one for €40million and one for

€110million, to several subsidiaries of Nexity (SAS Nexim 1 to 6). The guarantees were not implemented and expired on June30, 2017.

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Several guarantees given during prior years in connection with asset

acquisitions or disposals have expired. However, the time periods or statute

of limitations of certain guarantees relating, among other things, to

employees, environment and tax liabilities, in consideration of share

ownership, or given notably in connection with the winding-up of certain

businesses or the dissolution of entities are still in effect. To the best of

Vivendi’s knowledge, no material claims for indemniﬁcation against such

liabilities have been made to date.

In addition, when settling disputes and litigation, Vivendi regularly delivers

commitments for damages to third parties, which are customary for

transactions of this type.

Earn-out commitments related to the divestiture

or acquisition of shares

Vivendi and its subsidiaries entered into agreements with certain minority

shareholders providing for earn-out payments. They notably included

capped earn-outs payable in 2020 and 2022 under the agreement entered

into in June2016 for the acquisition of 100% of the companies that own

and manage all Paddington intellectual property rights, except for the

publishing rights.

22.5. SHAREHOLDERS’ AGREEMENTS

Under existing shareholders’ or investors’ agreements (primarily those

relating to nc+), Vivendi holds certain rights (e.g., pre-emptive rights and

rights of first offer) that give it control over the capital structure of its

consolidated companies having minority shareholders. Conversely, Vivendi

has granted similar rights to these other shareholders in the event that it

sells its interests to third parties.

Moreover, pursuant to other Shareholders’ agreements or the bylaws of

other consolidated entities, equity afﬁliates or unconsolidated interests,

Vivendi or its subsidiaries have given or received certain rights (pre-emptive

and other rights) entitling them to maintain their rights as shareholder.

In addition, in compliance with ArticleL.225-100-3 of the French Commer-

cial Code, it is hereby stated that certain rights and obligations of Vivendi

under existing Shareholders’ agreements may be amended or terminated in

the event of a change of control of Vivendi or a tender offer for Vivendi’s

shares. These Shareholders’ agreements are subject to confidentiality

provisions.

Strategic partnership among Canal+ Group,

ITI and TVN

Certain liquidity rights were given at the level of nc+ under the strategic

partnership formed in November2012 in relation to television services in

Poland. Given that Canal+ Group did not exercise its call option to acquire

TVN’s 32% interest in nc+ at market value, TVN now has liquidity rights in

the form of an initial public offering of its interest in nc+.

22.6. COLLATERALS AND PLEDGES

As of December31, 2018 and 2017, no material asset in Vivendi’s

Statement of Financial Position was subject to a pledge or mortgage for the

beneﬁt of third parties.

NOTE23. LITIGATION

In the normal course of its business, Vivendi is subject to various lawsuits,

arbitrations and governmental, administrative or other proceedings

(collectively referred to herein as “Legal Proceedings”).

The costs which may result from these Legal Proceedings are only

recognized as provisions when they are likely to be incurred and when the

obligation can reasonably be quantiﬁed or estimated, in which case, the

amount of the provision represents Vivendi’s best estimate of the risk and is

based on a case-by-case assessment of the risk level, provided that Vivendi

may, at any time, reassess such risk if events occur during such proceedings.

As of December31, 2018, provisions recorded by Vivendi for all claims and

litigation were €247million, compared to €260million as of December31,

2017 (please refer to Note16).

To the company’s knowledge, there are no Legal Proceedings or any facts of

an exceptional nature (including any pending or threatened proceedings in

which it is a defendant), which may have or have had in the previous 12

months a material effect on the company and on its group’s financial

position, proﬁt, business and property, other than those described herein.

The status of proceedings disclosed hereunder is described as of

February11, 2019 (the date of Vivendi’s Management Board meeting that

approved the Consolidated Financial Statements for the year ended

December31, 2018).

LBBW et al. against Vivendi

On March4, 2011, 26 institutional investors from Germany, Canada,

Luxembourg, Ireland, Italy, Sweden, Belgium and Austria ﬁled a complaint

against Vivendi with the Paris Commercial Court seeking to obtain damages

for losses they allegedly incurred as a result of four financial communi-

cations issued by Vivendi in Octoberand December2000, September2001

and April2002. Subsequently, on April5 and April23, 2012, two similar

complaints were ﬁled against Vivendi: the ﬁrst one by a US pension fund,

the Public Employee Retirement System of Idaho, and the other by six

German and British institutional investors. Lastly, on August8, 2012, the

British Columbia Investment Management Corporation also filed a

complaint against Vivendi based on the same grounds. On January7, 2015,

the Paris Commercial Court appointed a “third party” responsible for

checking the standing of the claimants and reviewing the documentation

provided by them to evidence their alleged holding of the securities. The

latter ﬁled his ﬁnal reports during the ﬁrst half of 2018. The ﬁrst hearings on

the merits were held in the second half of 2018.

California State Teachers Retirement System et al.

against Vivendi

On April27, 2012, 67 institutional foreign investors ﬁled a complaint against

Vivendi before the Paris Commercial Court seeking damages for losses they

allegedly incurred as a result of the financial communications made by

Vivendi, between 2000 and 2002. On June7 and September5 and 6, 2012,

26 new plaintiffs joined these proceedings. In November2012 and

March2014, 12 plaintiffs withdrew from these proceedings. On January7,

2015, the Commercial Court of Paris appointed a “third party” responsible

for checking the standing of the claimants and reviewing the documentation

provided by them to evidence their alleged holding of the securities. The

latter ﬁled his ﬁnal reports during the ﬁrst half of 2018. The ﬁrst hearings on

the merits were held in the second half of 2018.

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Vivendi Deutschland against FIG

Further to a claim ﬁled by CGIS BIM (a former subsidiary of Vivendi) against

FIG to obtain the release of part of a payment remaining due pursuant to a

buildings sale contract, FIG obtained, on May29, 2008, the annulment of

the sale and an award for damages following a judgment of the Berlin Court

of Appeal. On December16, 2010, the Berlin Court of Appeal conﬁrmed the

decision of the Regional Berlin Court in April2009, which decided in CGIS

BIM’s favor and conﬁrmed the invalidity of the reasoning of the judgment

and therefore overruled the order for CGIS BIM to repurchase the building

and pay damages. This decision is now ﬁnal. In parallel, FIG ﬁled a second

claim for additional damages in the Berlin Regional Court which was served

on CGIS BIM on March3, 2009. On June19, 2013, the Berlin Regional Court

ordered CGIS BIM to pay FIG the sum of €3.9million together with interest

from February27, 2009. CGIS BIM has appealed this decision. At a hearing

held at the Berlin Court of Appeal on January8, 2018, the judge proposed a

settlement, the terms of which were accepted by both parties, thereby

putting an end to this litigation.

Mediaset against Vivendi

On April8, 2016, Vivendi entered into a strategic partnership agreement

with Mediaset. This agreement provided for a swap of a 3.5%interest in

Vivendi in exchange for a 3.5% interest in Mediaset and 100% of the share

capital of the pay-TV company Mediaset Premium, a subsidiary of

Mediaset.

Vivendi’s purchase of Mediaset Premium was based on ﬁnancial assumptions

provided by Mediaset to Vivendi in March2016. These assumptions raised

some questions within Vivendi, which were communicated to Mediaset. The

agreement signed on April8, 2016 was subsequently subject to a “due

diligence review” (carried out for Vivendi by the advisory firm Deloitte), as

contractually agreed. It became clear from this audit and from Vivendi’s

analyses that the figures provided by Mediaset prior to the signing of the

agreement were not realistic and were founded on an artiﬁcially-inﬂated base.

While Vivendi and Mediaset had been in discussions in an effort to ﬁnd an

alternative transaction structure to the one provided for in the April8, 2016

agreement, Mediaset terminated these discussions on July26, 2016 by

publicly rejecting the proposal Vivendi submitted to it. This proposal

consisted of a swap of 3.5% of Vivendi’s share capital in exchange for 20%

of Mediaset Premium’s share capital and 3.5% of Mediaset’s share capital

and, for the balance, the issuance by Mediaset to Vivendi of bonds

convertible into Mediaset shares over time.

Subsequently, Mediaset together with its affiliate RTI, and Fininvest,

Mediaset’s majority shareholder each filed a complaint against Vivendi

before the Milan Civil Court seeking to obtain speciﬁc performance of the

April8, 2016 agreement and the related Shareholders’ agreement as well

as compensation for alleged damages. In particular, the plaintiffs claim that

Vivendi did not ﬁle its notiﬁcation to the European Commission with respect

to the transaction and thus blocked the lifting of the last condition

precedent to the completion of the transaction. Vivendi maintains that

despite its timely completion of the pre-notification process with the

Commission, the Commission would not have accepted a formal ﬁling while

the parties were discussing their differences.

At the ﬁrst hearing held in the case, the judge invited the parties to come

closer together to try to reach an amicable settlement to their dispute. To

this end, on May3, 2017, the parties initiated mediation proceedings before

the Chamberof National and International Arbitration of Milan.

Despite this mediation, on June9, 2017, Mediaset, RTI and Fininvest ﬁled

another complaint against Vivendi seeking damages totaling €2billion for

Mediaset and RTI, and €1billion for Fininvest, in connection with Vivendi’s

acquisition of Mediaset shares at the end of 2016. According to the

plaintiffs, who unsuccessfully requested that this action be consolidated

with the first two, these acquisitions were carried out in breach of the

April8, 2016 agreement, the Italian media regulations and unfair

competition rules. In addition, the complaint includes a demand that Vivendi

be required to divest the shares of Mediaset which were allegedly bought

in breach of applicable law and the April8, 2016 agreement. Lastly, the

plaintiffs have requested that, pending such divestiture, Vivendi be enjoined

from exercising its rights (including voting rights) on such Mediaset shares.

On February27, 2018, the Court noted the termination of the mediation

proceedings and scheduled a hearing for October23, 2018, which was

postponed to December4, 2018. During this hearing, Fininvest, RTI and

Mediaset renounced their claim to speciﬁc performance of the April8, 2016

agreement, while pursuing their claim for compensation for alleged

damages, in the amount of up to (i) €720million for Mediaset and RTI, for

non-performance of the April8, 2016 agreement, and (ii) € 1.3billion for

Fininvest, for non-performance of the above-mentioned Shareholders’

agreement, for the harm linked to the change in the Mediaset share price

between July26 and August2, 2016 and various damages relating to the

alleged illegal acquisition of Mediaset shares by Vivendi at the end of 2016.

Fininvest is also seeking damages for an amount to be determined by the

Court for harm done to its decision-making procedures and image. The next

hearing will be held on March12, 2019.

Other proceedings related to Vivendi’s entry

into the share capital of Mediaset

Following Vivendi’s entry into the share capital of Mediaset through open

market purchases of shares during the months of Novemberand

December2016, culminating in a shareholding of 28.80%, Fininvest stated

that it had ﬁled a complaint against Vivendi for market manipulation with

the Milan public prosecutor’s ofﬁce and the Consob, the Italian ﬁnancial

markets regulator.

In addition, on December21, 2016, the AGCOM, the Italian communications

authority, opened an investigation into the compatibility between the

increase in Vivendi’s holdings in Mediaset’s share capital and its position as

a shareholder of Telecom Italia under Italian media regulations.

On April18, 2017, the AGCOM issued a decision in which it determined that

Vivendi was not in compliance with the regulations. Vivendi, which had 12

months to come into compliance, appealed against this decision to the

Regional Administrative Court of Lazio. Pending the decision on this appeal,

the AGCOM acknowledged Vivendi’s proposed action plan setting out how it

will comply with the decision. On April9, 2018, in compliance with the

undertakings given to the AGCOM, Vivendi transferred the portion of its

shareholding in excess of 10% of Mediaset’s voting rights to an independent

trustee. On November5, 2018, the Regional Administrative Court of Lazio

decided to suspend its decision and refer to the European Court of Justice

the analysis of the compatibility of the Italian rule under Article43 of the

TUSMAR, as applied by AGCOM, with the free movement principle

enshrined in the Treaty on the Functioning of the European Union.

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Telecom Italia

On August5, 2017, the Italian Government informed Vivendi that it was

opening a formal investigation into whether certain provisions of Law

Decree No.21 of 15March2012 on special powers of the Italian

Government relative to the defense and national security sectors (Article1)

and to activities of strategic importance in the ﬁelds of energy, transport

and communications (Article2), had been respected by Telecom Italia and

Vivendi. Vivendi considered the provisions of that decree inapplicable to

Vivendi. In particular, (i) Article1, concerning the defense and national

security sectors had never been hitherto declared and communicated to the

market given the nature of the activities carried out by Telecom Italia, and

(ii) Article2, which relates to the energy, transport and communications

sectors, does not apply to Vivendi since it refers to purchases of signiﬁcant

shareholdings made by non-European entities.

Additionally, and in the same timeframe as the above-mentioned investi-

gation, on September13, 2017, the Consob declared that Vivendi exercises

de facto control over Telecom Italia. Vivendi and Telecom Italia formally

contest this position and appealed to the competent courts.

On September28, 2017, the Presidency of the Council of Ministers declared

that (i) the notification made by Vivendi under Article1 of the aforemen-

tioned legislative decree as a precautionary measure was made late and (ii)

Telecom Italia had not made a notification under Article1 of the decree

following a change of control over its asset that are of strategic importance

in the fields of energy, transport and communications. Therefore, the

Presidency of the Council of Ministers launched proceedings against

Telecom Italia for failing to make the required notiﬁcation under Article2 of

the same legislative decree. Vivendi and Telecom Italia have appealed this

ﬁnding.

Furthermore, by a decree dated October16, 2017, the Italian Government

decided to exercise the special powers laid down in Article1 of the 2012

legislative decree, relative to the defense and national security sectors. This

decree imposes a numberof organizational and governance measures on

Vivendi and Telecom Italia and its two subsidiaries, Telecom Italia Sparkle

Spa (“Sparkle”) and Telsy Elettronica e Telecomunicazioni Spa (“Telsy”). In

particular, Telecom Italia, Sparkle and Telsy must have a division in charge

of supervising all activities related to defense and national security, which

is fully autonomous and endowed with human and financial resources

sufﬁcient to guarantee its independence, and to appoint to their governing

bodies a memberwho is an Italian citizen, who is approved by the Italian

Government and who has security clearance. It also requires the

establishment of a Supervisory Committee under the auspices of the

Council of Ministers (Comitato di monitoraggio) to monitor compliance with

these obligations. On February13, 2018, Vivendi and Telecom Italia ﬁled an

appeal against this decree with the Italian Presidency of the Council of

Ministers.

In addition, by a decree dated November2, 2017, the Italian Government

decided to implement the special powers conferred by Article2 of the 2012

legislative decree, relative to the fields of energy, transport and

communications. This decree imposes on Telecom Italia the obligation to

implement development, investment and maintenance plans for its

networks to guarantee their operation and security, to provide universal

service, and, more generally, to satisfy public interest in the medium and

long term, under the control of the Comitato di monitoraggio, who must be

notiﬁed of any reorganization of the Telecom Italia group’s holdings or any

project having an impact on the security, availability and operation of the

networks. On March2, 2018, Vivendi and Telecom Italia filed an appeal

against this decree with the Italian Presidency of the Council of Ministers.

By a decree dated May8, 2018, the Italian Government imposed an

administrative ﬁne of €74millions on Telecom Italia for failure to comply with

its information obligations (failure to notify under Article2 of Law Decree

No.21 of March15, 2012, see above). On July5, 2018, the Administrative

Regional Court of Lazio suspended the enforcement of such ﬁne.

Etisalat against Vivendi

On May12, 2017, Etisalat and EINA ﬁled a request for arbitration before the

International Court of Arbitration of the International Chamberof Commerce

pursuant to the terms of the agreement for the sale of SPT/Maroc Telecom

entered into on November4, 2013, the closing of which took place on

May14, 2014. This request concerned several claims in respect of

representations and warranties made by Vivendi and SFR in connection

with the sale agreement. On January3, 2019, the Arbitral Tribunal rendered

its decision, rejecting Etisalat’s claim for compensation in its entirety.

Parabole Réunion

In July2007, the Parabole Réunion filed a legal action before the Paris

Tribunal of First Instance following the termination of its rights to exclusively

distribute the TPS channels in Reunion Island, Mayotte, Madagascar and

Mauritius, and the degradation of the channels made available to it.

Pursuant to a decision dated September18, 2007, Canal+ Group was

prohibited, under threat of a ﬁne, from allowing the broadcast by third parties

of these channels or replacement channels that have substituted these

channels and was ordered to replace the TPS Foot channel in the event it is

dropped. Canal+ Group appealed this decision. In a ruling dated June19,

2008, the Paris Court of Appeal partially reversed the judgment and stated

that these replacement channels were not to be granted exclusively if the

channels were made available to third parties prior to the merger with TPS.

Parabole Réunion was unsuccessful in its claims concerning the content of

the channels in question. On November10, 2009, the French Supreme Court

dismissed the appeal brought by Parabole Réunion.

On September24, 2012, Parabole Réunion filed a claim against Canal+

France, Canal+ Group and Canal+ Distribution before the enforcement

magistrate of the Court of First Instance of Nanterre seeking enforcement of

the ﬁne imposed by the Paris Tribunal of First Instance and conﬁrmed by the

Court of Appeal. On November6, 2012, Parabole Réunion expanded its

claim to cover the TPS Star, Cinecinema Classic, Cult and Star channels. On

April9, 2013, the enforcement magistrate dismissed in part Parabole

Réunion’s claim and declared the rest inadmissible. He took care to recall

that Canal+ Group had no legal obligation with respect to the content or the

maintaining of programming on channels made available to Parabole

Réunion and held, after noting that production of the TPS Foot channel had

not stopped, that there was no need to replace this channel. Parabole

Réunion filed a first appeal against this decision on April11, 2013. On

May22, 2014, the Versailles Court of Appeal declared this appeal

inadmissible due to Parabole Réunion’s lack of representative capacity. On

February14, 2014, Parabole Réunion ﬁled an appeal on points of law and

ﬁled a second appeal against the April9, 2013 decision. On April9, 2015,

the French Supreme Court overturned the May22, 2014 decision of the

Versailles Court of Appeal in which the appeal ﬁled by Parabole Réunion on

April11, 2013 was declared inadmissible. The case was remanded to the

Paris Court of Appeal which, on May12, 2016, upheld the decision of the

Court of First Instance and dismissed all of Parabole Réunion’s claims. In a

decision issued on September28, 2017, the French Supreme Court

dismissed Parabole Réunion’s appeal against the decision of the Court of

Appeal of Paris.

At the same time, on August11, 2009, Parabole Réunion ﬁled a complaint

against Canal+ Group before the Paris Tribunal of First Instance, requesting

that the Tribunal order Canal+ Group to make available a channel with a

level of attractiveness similar to that of TPS Foot in 2006 and to pay

damages. On April26, 2012, Parabole Réunion also filed a complaint

against Canal+ France, Canal+ Group and Canal+ Distribution before the

Paris Tribunal of First Instance requesting the Tribunal to acknowledge the

failure of the companies of the group to fulﬁll their contractual obligations

to Parabole Réunion and their commitments to the Ministry of Economy.

These two actions have been consolidated into a single action. On April29,

2014, the Paris Tribunal of First Instance partially recognized the admissibility

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of Parabole Réunion’s claim with respect to the period following June19,

2008 and recognized the contractual liability of Canal+ Group due to the

degradation of the quality of channels made available to Parabole Réunion.

The Tribunal also ordered an expert report on the damages suffered by

Parabole Réunion, rejecting the assessment produced by the latter. On

June3, 2016, the Paris Court of Appeal upheld the April29, 2014 decision

of the Paris Tribunal of First Instance. Canal+ Group ﬁled an appeal against

this decision to the French Supreme Court, which was dismissed on

January31, 2018.

In an order issued on October25, 2016, the Pre-Trial Judge held that the

April29, 2014 decision in which Canal+ Group was ordered to compensate

Parabole Réunion established in principle a debt of the latter, even if the

assessment of its amount was still to be finalized. The Judge ordered

Canal+ Group to pay the sum of €4million as an advance. On January17,

2017, the Paris Tribunal of First Instance ordered Canal+ Group to pay the

sum of €37,720,000, with provisional enforceability. On February23, 2017,

Parabole Réunion appealed against that decision to the Paris Court of

Appeal. On July20, 2017, Canal+ Group ﬁled its response to the appeal and

a cross-appeal. Due to the failure of Parabole Réunion group to file its

response within the time period prescribed by law, on December8, 2017,

Canal+ Group filed a motion raising thefailure to meetsuch deadline

and,consequently, seeking an invalidation of the expertise ordered on

October12, 2017 (see below). On June7, 2018, the Pre-Trial Judge of the

Paris Court of Appeal issued an order, dismissing the request for the

invalidation of the expertise underway. Canal+ Group lodged a petition for

review against this order, which it withdrew in October2018, noting the

progress of the expertise.

On May29, 2017, Parabole Réunion raised an incidental question in order to

have the court appoint an additional expert to assess the loss in value of its

business. On October12, 2017, the Pre-Trial Judge of the Paris Court of

Appeal granted this request and a judicial expert was appointed. On

December17, 2018, Parabole Réunion raised a new incidental question

before the Pre-Trial Judge of the Paris Court of Appeal in order to have the

court clarify the mission of the judicial expert who has, at this stage, halted

his work.

Action brought by the French Competition Authority

regarding Practices in the Pay-TV Sector

On January9, 2009, further to its voluntary investigation and a complaint by

Orange, the French Competition Authority sent Vivendi and Canal+Group a

notification of allegations. It alleged that Canal+Group has abused its

dominant position in certain Pay-TV markets and that Vivendi and Canal+

Group colluded with TF1 and M6, on the one hand, and with Lagardère, on

the other.

On November16, 2010, the French Competition Authority rendered a

decision in which it dismissed the allegations of collusion, in respect of all

parties, and certain other allegations, in respect of Canal+ Group. The

French Competition Authority requested further investigation regarding

ﬁberoptic TV and catch-up TV, Canal+ Group’s exclusive distribution rights

on channels broadcast by the group and independent channels as well as

the extension of exclusive rights on TF1, M6 and Lagardère channels to

ﬁberoptic and catch-up TV. On October30, 2013, the French Competition

Authority took over the investigation into these aspects of the case, but

noaction has been taking since December2013. In April2018, the French

Competition Authority informed Canal+ Group of the closure of the case.

Canal+ Group against TF1, M6 and France Télévision

On December9, 2013, Canal+ Group filed a complaint with the French

Competition Authority against the practices of the TF1, M6 and France

Télévision groups in the French-language ﬁlm market. Canal+ Group claims

that the defendants added certain pre-emption rights to co-production

contracts aimed at restricting competition. On February23, 2018, the French

Competition Authority served a notification of grievances on France

Télévision, TF1 and M6. The case will be reviewed by the French

Competition Authority at its meeting to be held on February13, 2019.

TF1 against Canal+ Group

On May7, 2018, TF1 filed a complaint against Canal+ Group for infrin-

gement of its neighboring rights and trademarks, as well as for unfair

competition. TF1 alleges that Canal+ Group continued the distribution of its

linear channels and its associated services on all its networks beyond the

end date of the agreement. After the parties reached an agreement, TF1

withdrew from these proceedings.

TF1 and M6 agreements

On September30, 2017, Canal+ Group ﬁled summary requests before the

French Council of State (Conseil d’État) seeking an annulment of the

decisions of the French Broadcasting Authority (Conseil supérieur de

l’audiovisuel) (the “CSA”) of July20 and 27, 2017 relating to the TF1 and

M6 channels, respectively. These decisions renew the authorizations for the

terrestrial transmission of TF1 and M6, in the context of the requests of the

two groups to obtain compensation for the distribution of their free-to-air

DTT channels, including their eponymous TF1 and M6 channels. On

November26, 2018, after reaching an agreement with TF1, Canal+ Group

withdrew from the proceedings against TF1.

Aston France and Strong against Canal+ Group

On September25, 2014, Aston notiﬁed the French Competition Authority

about Canal+ Group’s decision to stop selling its satellite subscription called

“cards only” (enabling the reception of Canal+/Canalsat programs on Canal

Ready-labeled satellite set-top boxes, manufactured and distributed by third

parties, including Aston). In parallel, on September30, 2014, Aston ﬁled a

request for injunctive relief against Canal+ Group before the Commercial

Court of Paris, seeking a stay of the decision of the Canal+ Group to

terminate the Canal Ready partnership agreement and thus stop the

marketing of satellite subscriptions called “cards only”. On October17, 2014,

the Paris Commercial Court issued an order denying Aston’s requests. On

November4, 2014, Aston appealed this decision and, on January15, 2015,

the Paris Court of Appeal, ruling in chambers, granted its requests and

suspended the decision of Canal+ Group to stop selling its “cards only”

subscriptions until the French Competition Authority rendered its decision on

the merits of the case. On March21, 2018, Canal+ Group received the French

CompetitionAuthority’s preliminary assessment setting out its competition

concerns. On April4, 2018, Canal+ Group submitted to the French

Competition Authority a proposal for commitments. On July24, 2018, the

French Competition Authority, considering that the commitments, in force

until December31, 2021, met both the need to fight against piracy and

maintain an alternative offer of set-top boxes to the ones leased by Canal+

Group, decided to make them compulsory and closed the proceedings.

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In addition, on January18, 2019, Strong ﬁled an application with the Paris

Commercial Court for injunctive relief requesting the Court to order the

suspension of Canal+ Group’s decision to stop marketing subscriptions on

Canal Ready-labeled satellite set-top boxes (cards only) following the

above-mentioned decision of the French Competition Authority. Aston,

which had not contested the commitments made by Canal+ Group to the

French Competition Authority, voluntarily intervened in this injunctive relief

proceeding. A decision is expected on February22, 2010.

Top 14 Rugby (2019-2023)

By a letter registered on July19, 2016, the French Competition Authority

was notiﬁed by Altice of a referral regarding the practices implemented in

the tender process for the granting of broadcasting rights to Top 14 Rugby

for the seasons 2019/2020 to 2022/2023. The French Competition Authority,

having formally recognized that Altice had withdrawn its complaint, closed

the case.

Canal+ Group against Numericable-SFR

On October4, 2017, Canal+ Group ﬁled a complaint against Numericable-

SFR before the Paris Commercial Court for customer poaching and breach of

contract, in which it asked the Court to issue an injunction to stop such

practices and to award damages. After the parties reached an agreement,

Canal+ Group withdrew from these proceedings on October9, 2018.

Touche Pas à Mon Poste

On June7, 2017, the French Broadcasting Authority (Conseil supérieur de

l’audiovisuel) (the “CSA”) decided to sanction C8 for a sequence broadcast

on the show “TPMP” on December7, 2016. The CSA considered that this

sequence in which the presenter of the show, Cyril Hanouna, and one of its

columnists, Capucine Anav, are seen engaging in a game on set during an

“off” sequence, undermined the image of women. The sanction consisted of

the suspension of advertising broadcasts during the show, “Touche Pas à

Mon Poste” and its rebroadcasts, as well as well during the 15 minutes

before and the 15 minutes after its broadcast, for a period of two weeks

from the second Monday following notiﬁcation of the decision.

On the same date, the CSA sanctioned C8 for another sequence broadcast

on the show “TPMP! La grande Rassrah” on November3, 2016. The CSA

considered that this new sequence, the filming by hidden camera of

Matthieu Delormeau, a columnist for the show, violated his dignity. This

sanction consisted of the suspension of advertising broadcasts during the

show, “Touche Pas à Mon Poste” and its rebroadcasts, as well as during the

15 minutes before and the 15 minutes after its broadcast, for a period of

one week.

On July3, 2017, following the two decisions of the CSA, C8 filed two

appeals with the French Council of State (Conseil d’État). On July4, 2017,

C8 filed two claims for compensation with the CSA which claims were

rejected by implied decision. On November2, 2017, C8 appealed against

each of these to the Council of State. On June18, 2018, the Council of State

dismissed C8’s action for annulment of the CSA’s ﬁrst decision, but granted

the second application, overturning the CSA’s second decision. The Council

of State’s decision to dismiss C8’s action for annulment of the CSA’s ﬁrst

decision is the subject of an appeal pending before the European Court of

Human Rights, ﬁled in December2018. The claims for compensation are

being reviewed by the Council of State. A decision is expected in the ﬁrst

quarter of 2019.

On July26, 2017, the CSA decided to sanction C8 for a sequence broadcast

on the show “TPMP Baba hot line” on May18, 2017, considering that the

channel violated the principle of respect for privacy and its obligation to

ﬁght against discrimination, and imposed a monetary ﬁne of €3million.

Following this decision, on September22, 2017, C8 filed an action for

annulment before the Council of State, which was dismissed on June18,

2018. This decision is the subject of an appeal pending before the European

Court of Human Rights, ﬁled in December2018. Similarly, C8 ﬁled a claim

for compensation with the CSA, whose implicit rejection of it was

challenged before the Council of State on January25, 2018. On

September7, 2018, C8 withdrew its claim for compensation.

Rovi Guides, Inc. against Canal+ Group

Rovi Guides ﬁled a request for mediation before the International Chamber

of Commerce for the breach by Canal+ Group of an electronic program guide

license agreement entered into in 2008 and for the non-payment of royalties

related thereto between January1, 2016 and June30, 2017.

The mediation terminated without an agreement and Rovi Guides ﬁled a

request for arbitration on June1, 2018.

Harry Shearer and Century of Progress Productions

against Studiocanal, Universal Music Group

and Vivendi

A complaint was ﬁled in California federal court against Studiocanal and

Vivendi by Harry Shearer, through his company Century of Progress

Productions, in his capacity as a creator, actor and composer of the ﬁlm

“This Is Spinal Tap”, an American ﬁlm produced and ﬁnanced in 1984 by

Embassy Pictures (Studiocanal is the successor to Embassy’s rights).

Mr.Shearer is seeking damages for breach of contractual obligations to

provide exploitation accounts, fraud, and failure to exploit the film’s

trademark, and is also seeking attribution of the trademark. On February8,

2017, four new plaintiffs, co-creators of the ﬁlm, joined the proceedings. On

February28, 2017, in response to the complaint, the defendants filed a

motion to dismiss, in which they asked the Court to declare the claims of

the new plaintiffs to be inadmissible and to deny the claim for fraud. On

September28, 2017, the Court issued its decision. With respect to

inadmissibility, it dismissed the claims of three of the four co-creators as

well as the fraud claim but gave permission to the plaintiffs to ﬁle amended

complaints in their individual capacities as well as to supplement their

fraud claim. On October19, 2017, a new complaint (the “Second Amended

Complaint”) was filed, which reintroduced the claims of three plaintiffs

previously found to be inadmissible and added Universal Music Group

(UMG) as a plaintiff. On December21, 2017, UMG and Studiocanal each

ﬁled a motion to dismiss in response. By decision of August28, 2018, the

Court (i) denied Studiocanal’s motion to dismiss the plaintiffs’ fraud claim.

While the Court did not recognize the existence of fraud, it left open the

possibility for the plaintiffs to prove it in the subsequent proceedings on the

merits; and (ii) granted some of UMG’s motions but with leave for the

plaintiffs to ﬁle an amended complaint with respect to these claims. The

Court also denied UMG’s motion to dismiss the plaintiffs’ application for

declaratory relief to terminate and recover from UMG the copyrights in the

sound recordings from the motion picture in the United States; this point

will therefore be decided in the context of the proceedings on the merits.

On September18, 2018, the plaintiffs ﬁled their new complaint (the “Third

Amended Complaint”). In parallel, the parties have decided to enter into

mediation with the ﬁrst meeting to be held on March11, 2019. The parties

suspended the proceedings on the merits until the end of the mediation.

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Note23. Litigation

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Maitena Biraben against Canal+

Maitena Biraben challenged her termination by Canal+ for gross misconduct

before the French Labor Court (Conseils de Prud’hommes). On September27,

2018, the French Labor Court rendered its decision, finding that

Ms.Biraben’s termination was without justiﬁed cause. The Court ordered

Canal+ to pay total amount of €3,246,456.22, representing €38,456.22 in

backpay and paid leave, €148,000 in severance pay, €510,000 in damages

and €2,550,000 in termination compensation. Canal+ appealed against this

judgment.

Investigation by the Departmental Directorate

for the Protection of Populations in the Hauts-de-Seine

On April20, 2018, the Departmental Directorate for the Protection of the

Populations of the Hauts-de-Seine (Direction Départementale de la

Protection des Populations des Hauts-de-Seine) (DDPP92) ordered Canal+

Group to stop positioning enriched offers to its subscribers during the term

of their contract, a practice which the Court described as selling without

prior order. On June19, 2018, Canal+ Group ﬁled a notice of appeal with the

French Minister of the Economy, which was rejected on August9, 2018. On

October5, 2018, Canal+ Group ﬁled an appeal with the Administrative Court

of Cergy-Pontoise.

Complaints against Music Industry Majors

in the United States

In 2006, several complaints were ﬁled before the Federal Courts in New

York and California against Universal Music Group and the other music

industry majors for alleged anti-competitive practices in the context of sales

of CDs and Internet music downloads. These complaints have been

consolidated before the Federal Court in New York. The motion to dismiss

filed by the defendants was granted by the Federal Court on October9,

2008, but this decision was reversed by the Second Circuit Court of Appeals

on January13, 2010. The defendants subsequently filed a motion for

rehearing which was denied. A petition was filed with the US Supreme

Court which rejected it on January10, 2011. On July18, 2017, the Court

dismissed the motion for class certification filed by the plaintiffs who

appealed against the decision. On December8, 2017, the Second Circuit

Court of Appeals refused to hear the appeal. In November2018, the parties

entered into a settlement agreement, putting an end to this litigation.

Mireille Porte against Interscope Records, Inc.,

Stefani Germanotta and Universal Music France

On July11, 2013, the artist Mireille Porte (AKA “Orlan”) ﬁled a complaint

against Interscope Records, Inc., Stefani Germanotta (AKA “Lady Gaga”)

and Universal Music France with the Paris Tribunal of First Instance for the

alleged copyright infringement of several of Orlan’s artistic works. On

July7, 2016, the Paris Tribunal of First Instance denied all of Mireille Porte’s

claims. Ms.Porte ﬁled an appeal against this decision. On May15, 2018,

the French Court of Appeal upheld the lower court’s decision.

Aspire against Cash Money Records and UMG

On April7, 2017, Aspire Music Group ﬁled a complaint with the New York

State Supreme Court against Cash Money Records alleging breach of

contract and non-payment of proﬁts from Drake’s ﬁrst six albums. Following

unsuccessful negotiations, the plaintiff amended its complaint to add UMG

as a defendant on April12, 2018. UMG filed a motion to dismiss on the

grounds that it lacks privity with Aspire and is not liable for Cash Money’s

contractual obligations to Aspire. The Court denied UMG’s motion to

dismiss, and UMG appealed that decision.

Investigation by U.S. federal prosecutors into

business practices in the advertising industry

On June11, 2018, Havas received a subpoena for documents relating to

one of its Spanish subsidiaries, Havas Media Alliance WWSL. These

documents have been provided to the relevant US authorities. This request

by the federal prosecutors appears to relate to business practices involving

discounts and rebates. At this stage, Havas is not a party to any proceedings

and is not being interviewed.

Investigation into the services provided

by Havas Paris to Business France

On February7, 2019, Havas Paris, a subsidiary of HavasSA, was indicted

for having benefited from favoritism in an amount of €379,319. This

indictment was brought in the context of a judicial investigation opened by

the Paris Public Prosecutor’s Ofﬁce for the offence of favoritism allegedly

committed by Business France when it organized a communication event

which it entrusted to Havas Paris. Havas Paris denies the claims against it

and immediately appealed against this decision.

Glass Egg vs. Gameloft Inc., Gameloft SE,

Gameloft Iberica and Vivendi SA

On August23, 2017, Glass Egg, a company specializing in the design of 3D

cars for use in video games, sued Gameloft Inc., Gameloft SE, Gameloft

Iberica and VivendiSA in the U.S.District Courtfor the Northern District

ofCalifornia. It is seeking damages for copyright infringement, unfair

competition and misappropriation of trade secrets. The Court allowed the

plaintiff to amend its initial complaint three times. On September17, 2018,

Gameloft Inc. responded to Glass Egg’s fourth amended complaint, denying

all its claims. Discovery has begun and is expected to continue during the

ﬁrst half of 2019. In addition, in an order dated February12, 2018, the Court

determined that it had no jurisdiction over Gameloft Iberica and VivendiSA.

The admissibility of the complaint against Gameloft SE is remains

challenged and the Court has ordered limited discovery to determine

whether it has jurisdiction.

Reti Televisive Italiane (RTI) against Dailymotion

Since 2012, several legal actions have been ﬁled by RTI against Dailymotion

before the Civil Court of Rome. Similar to claims it has made against other

major online video platforms, RTI is seeking damages for infringement of its

neighboring rights (audiovisual production and broadcasting rights) and

unfair competition as well as the removal of the contested content from the

Dailymotion platform.

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Note24. Major consolidated entities or entities

accounted forunderthe equity method

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE24. MAJOR CONSOLIDATED ENTITIES OR ENTITIES ACCOUNTED

FORUNDERTHE EQUITY METHOD

As of December31, 2018, approximately 1,140 entities were consolidated or accounted for under the equity method (unchanged compared to December31, 2017).

Country

December31, 2018 December31, 2017

Accounting

Method

Voting

Interest

Ownership

Interest

Accounting

Method

Voting

Interest

Ownership

Interest

Vivendi S.A. France Parent company Parent company

Universal Music Group, Inc. United States C 100% 100% C 100% 100%

Universal Music Group Holdings, Inc. United States C 100% 100% C 100% 100%

UMG Recordings, Inc. United States C 100% 100% C 100% 100%

Vevo United States E 49.4% 49.4% E 49.4% 49.4%

Universal Music Group S.A.S. (ex-SIG 104) France C 100% 100% C 100% 100%

Universal International Music B.V. Netherlands C 100% 100% C 100% 100%

Universal Music Entertainment GmbH Germany C 100% 100% C 100% 100%

Universal Music, LLC Japan C 100% 100% C 100% 100%

Universal Music France S.A.S. France C 100% 100% C 100% 100%

Universal Music Holdings Ltd. United Kingdom C 100% 100% C 100% 100%

EMI Group Worldwide Holding Ltd. United Kingdom C 100% 100% C 100% 100%

Groupe Canal+ S.A. France C 100% 100% C 100% 100%

Société d’Édition de Canal Plus France C 100% 100% C 100% 100%

Multithématiques S.A.S. France C 100% 100% C 100% 100%

Canal+ International S.A.S. France C 100% 100% C 100% 100%

C8 France C 100% 100% C 100% 100%

Studiocanal S.A. France C 100% 100% C 100% 100%

ITI Neovision (nc+) Poland C 51% 51% C 51% 51%

VSTV (a) Vietnam C 49% 49% C 49% 49%

Havas S.A. France C 100% 100% C 100% 100%

Havas Health, Inc. United States C 100% 100% C 100% 100%

Havas Media Group USA, LLC United States C 100% 100% C 100% 100%

Havas Worldwide New York, Inc. United States C 100% 100% C 100% 100%

BETC France C 100% 100% C 100% 100%

Havas Edge, LLC United States C 100% 100% C 100% 100%

Havas Media France France C 100% 100% C 100% 100%

Arnold Worldwide, LLC United States C 100% 100% C 100% 100%

Havas Paris France C 99% 99% C 99% 99%

Socialyse France C 100% 100% C 100% 100%

Havas Media Group Spain,SA. Spain C 100% 100% C 100% 100%

Afﬁperf Limited United Kingdom C 100% 100% C 100% 100%

Havas Worldwide Chicago, Inc. United States C 100% 100% C 100% 100%

Gameloft S.E. France C 100% 100% C 100% 100%

Gameloft Inc. United States C 100% 100% C 100% 100%

Gameloft Inc. Divertissement Canada C 100% 100% C 100% 100%

Gameloft Iberica S.A. Spain C 100% 100% C 100% 100%

Gameloft Software Beijing Ltd. China C 100% 100% C 100% 100%

Gameloft S. de R.L. de C.V. Mexico C 100% 100% C 100% 100%

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Note24. Major consolidated entities or entities

accounted forunderthe equity method

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Country

December31, 2018 December31, 2017

Accounting

Method

Voting

Interest

Ownership

Interest

Accounting

Method

Voting

Interest

Ownership

Interest

Vivendi Village S.A.S. France C 100% 100% C 100% 100%

See Tickets United Kingdom C 100% 100% C 100% 100%

Paylogic (b) Netherlands C 100% 100% - - -

Digitick France C 100% 100% C 100% 100%

MyBestPro (c) France - - - C 100% 97%

L’Olympia France C 100% 100% C 100% 100%

CanalOlympia France C 100% 100% C 100% 100%

Olympia Production France C 100% 100% C 100% 100%

Festival Production France C 70% 70% C 70% 70%

Paddington and Company Ltd. United Kingdom C 100% 100% C 100% 100%

New Initiatives

Dailymotion France C 100% 100% C 100% 100%

Group Vivendi Africa France C 100% 100% C 100% 100%

Vivendi Content France C 100% 100% C 100% 100%

Studio+ France C 100% 100% C 100% 100%

Banijay Group Holding France E 31.4% 31.4% E 31.4% 31.4%

Corporate

Telecom Italia Italia E 23.94% 17.15% E 23.94% 17.15%

Boulogne Studios France C 100% 100% C 100% 100%

Poltel Investment Poland C 100% 100% C 100% 100%

C: consolidated; E: equity afﬁliates.

(a) VSTV (Vietnam Satellite Digital Television Company Limited) is held at 49% by Canal+ Group and 51% by VTV (the Vietnamese public television company). This company

has been consolidated by Vivendi because Canal+ Group has both operational and ﬁnancial control over it pursuant to an overall delegation of power that was granted

by the majority shareholder and under the company’s bylaws.

(b) On April16, 2018, Vivendi Village acquired Paylogic, a ticketing and technology company based in Amsterdam.

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Note25. Statutory Auditors fees

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE25. STATUTORY AUDITORS FEES

Fees paid by VivendiSA in 2018 and 2017 to its Statutory Auditors and members of the Statutory Auditor ﬁrms were as follows:

(inmillions of euros)

Deloitte et Associés Ernst & Young et Autres

TotalAmount % Amount %

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017

Statutory audit, certiﬁcation, consolidated and individual ﬁnancial statements audit

Issuer 0.6 0.6 6% 6% 0.7 0.7 12% 13% 1.3 1.3

Fully consolidated subsidiaries 9.0 8.8 92% 90% 3.7 3.6 64% 70% 12.7 12.4

Subtotal 9.6 9.4 98% 96% 4.4 4.3 76% 83% 14.0 13.7

Services other than certiﬁcation of ﬁnancial statements as required by laws and regulations (a)

Issuer - - - - 0.1 0.1 2% 2% 0.1 0.1

Fully consolidated subsidiaries - - - - - - - - - -

Subtotal - - - - 0.1 0.1 2% 2% 0.1 0.1

Services other than certiﬁcation of ﬁnancial statements provided upon the entity’s request (a)

Issuer 0.1 0.4 1% 4% - - - - 0.1 0.4

Fully consolidated subsidiaries 0.1 - 1% - 1.3 0.8 22% 15% 1.4 0.8

Subtotal 0.2 0.4 2% 4% 1.3 0.8 22% 15% 1.5 1.2

Total 9.8 9.8 100% 100% 5.8 5.2 100% 100% 15.6 15.0

(a) Include services required by law and regulation (e.g., reports on capital transactions, comfort letters, validation of the consolidated declaration of extra-ﬁnancial

performance) as well as services provided upon request of Vivendi or its subsidiaries (due diligence, legal and tax assistance, various reports).

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Note26. Audit exemptions for UMG

subsidiaries intheUnited Kingdom

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE26. AUDIT EXEMPTIONS FOR UMG SUBSIDIARIES INTHEUNITED KINGDOM

Vivendi S.A. has provided guarantees to the following UMG subsidiaries, incorporated in England and Wales, under the registered numberindicated, in order

for them to claim audit exemptions, with respect to ﬁscal year 2018, under Section479A of the UK Companies Act 2006.

Name Company Number

Dub Dub Productions Ltd. 03034298

EGW USD 08107589

E.M.I. Overseas Holdings Ltd. 00403200

EMI (IP) Ltd. 03984464

EMI Group (Newco) Ltd. 07800879

EMI Group Electronics Ltd. 00461611

EMI Group International Holdings Ltd. 01407770

EMI Group Worldwide 03158106

EMI Group Worldwide Holdings Ltd. 06226803

EMI Ltd. 00053317

EMI Recorded Music (Chile) Ltd. 07934340

EMI Records France Holdco Ltd. 06405604

Estupendo Records Ltd. 03278620

Mawlaw 388 Ltd. 03590255

Relentless 2006 Ltd. 03967906

Twenty-First Artists Ltd. 01588900

Name Company Number

Trinifold Music Ltd. 01781138

Universal/Anxious Music Ltd. 01862328

Universal/Momentum Music Ltd. 01946456

Universal/Momentum Music 2 Ltd. 02850484

Universal SRG Music Publishing Ltd. 02898402

Universal Music (UK) Holdings Ltd. 03383881

Universal Music Holdings (UK) Ltd. 00337803

Universal Music Leisure Ltd. 03384487

Universal Music Publishing MGB Holding UK Ltd. 05092413

Universal SRG Group Ltd. 00284340

Universal SRG Music Publishing Copyrights Ltd. 02873472

Universal SRG Studios Ltd. 03050388

V2 Music Group Ltd. 03205625

Virgin Music Group 02259349

Virgin Records Overseas Ltd. 00335444

NOTE27. SUBSEQUENT EVENTS

The signiﬁcant events that occurred between the closing date and February11, 2019 (the date of Vivendi’s Management Board meeting that approved the

Consolidated Financial Statements for the year ended December31, 2018) were as follows:

3 in January2019, VivendiSA completed new bank ﬁnancings (please refer to Note19.3);

3 on January31, 2019, Vivendi announced the closing of the acquisition of 100% of the share capital of Editis, the second-largest French-language

publishing group (please refer to Note2.2); and

3 on February11, 2019, Vivendi’s Management Board decided to propose to shareholders two resolutions relating to share repurchases which will be

submitted to a vote at the General Shareholders’ Meeting to be held on April15, 2019 (please refer to Note15).

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Note28. Restatement of comparative information

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

NOTE28. RESTATEMENT OF COMPARATIVE INFORMATION

In 2018, Vivendi applied two new accounting standards:

3 IFRS15 – Revenues from Contracts with Customers: in accordance

with IFRS15, Vivendi applied this change of accounting standard to

2017 revenues, thereby ensuring comparability of the data relative

to each period of 2018 and 2017 contained in this report (please

refer to Note1); and

3 IFRS9 – Financial Instruments: in accordance with IFRS9, Vivendi

applied this change of accounting standard to the 2018 Statement

of Earnings and Statement of Comprehensive Income and restated

its opening balance sheet as of January1, 2018; therefore, the data

relative to 2017 contained in this report is not comparable (please

refer to Note1).

28.1. RESTATEMENTS OF THE CONSOLIDATED STATEMENT OF EARNINGS

Impacts related to the application of IFRS 15 on revenues by business segment

(inmillions of euros)

2017

Three months

ended March31,

Three months

ended June30,

Three months

ended

September30,

Three months

ended

December31,

Year ended

December31,

Revenues (as previously published) (A)

Universal Music Group 1,284 1,382 1,319 1,688 5,673

Canal+ Group 1,278 1,290 1,257 1,421 5,246

Havas (a) - - 525 626 1,151

Gameloft 68 62 63 65 258

Vivendi Village 26 30 25 28 109

New Initiatives 10 13 11 17 51

Elimination of intersegment transactions (3) (3) (16) (22) (44)

Total Vivendi 2,663 2,774 3,184 3,823 12,444

IFRS15 restatements (B)

Universal Music Group - - - - -

Canal+ Group (6) (7) (5) (30) (48)

Havas (a) - - 27 33 60

Gameloft 16 15 15 16 62

Vivendi Village - - - - -

New Initiatives - - - - -

Elimination of intersegment transactions - - - - -

Total Vivendi 10 8 37 19 74

Restated revenues (A+B)

Universal Music Group 1,284 1,382 1,319 1,688 5,673

Canal+ Group 1,272 1,283 1,252 1,391 5,198

Havas (a) - - 552 659 1,211

Gameloft 84 77 78 81 320

Vivendi Village 26 30 25 28 109

New Initiatives 10 13 11 17 51

Elimination of intersegment transactions (3) (3) (16) (22) (44)

Total Vivendi 2,673 2,782 3,221 3,842 12,518

(a) As a reminder, Vivendi has fully consolidated Havas since July3, 2017.

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Note28. Restatement of comparative information

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

Restatements of the Statement of Earnings

Year ended December31, 2017

Published IFRS15 restatements Restated

Revenues 12,444 74 12,518

Cost of revenues (7,210) (92) (7,302)

Selling, general and administrative expenses excluding amortization of intangible assets

acquired through business combinations (4,118) (4,118)

Income from operations (*) 1,116 (18) 1,098

Restructuring charges (88) (88)

Other operating charges and income (41) (41)

Adjusted earnings before interest and income taxes (EBITA) (*) 987 (18) 969

Amortization and depreciation of intangible assets acquired through business combinations (124) (124)

Reversal of reserve related to the Securities Class Action litigation in the United States 27 27

Income from equity afﬁliates – operational 146 146

Earnings before interest and income taxes (EBIT) 1,036 (18) 1,018

Income from equity afﬁliates – non-operational - -

Interest (53) (53)

Income from investments 29 29

Other ﬁnancial charges and income (100) (100)

(124) - (124)

Earnings before provision for income taxes 912 (18) 894

Provision for income taxes 349 6 355

Earnings from continuing operations 1,261 (12) 1,249

Earnings from discontinued operations - -

Earnings 1,261 (12) 1,249

Non-controlling interests (33) (33)

Earnings attributable to VIVENDISA Shareowners 1,228 (12) 1,216

Earnings attributable to VivendiSA shareowners per share – basic (in euros) 0.98 0.97

Earnings attributable to VivendiSA shareowners per share – diluted (in euros) 0.95 0.94

Adjusted net income (*) 1,312 (12) 1,300

Adjusted net income per share – basic (in euros)

(*) 1.05 1.04

Adjusted net income per share – diluted (in euros)

(*) 1.01 1.00

Inmillions of euros, except per share amounts.

(*) Non-GAAP measures.

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Note28. Restatement of comparative information

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

28.2. RESTATEMENTS OF THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(inmillions of euros)

December31, 2017

IFRS9

restatements

IFRS9 and IFRS15

restatements by

equity afﬁliates January1, 2018Published

IFRS15

restatements Restated

ASSETS

Goodwill 12,084 12,084 12,084

Non-current content assets 2,087 2,087 2,087

Other intangible assets 440 440 440

Property, plant and equipment 930 930 930

Investments in equity afﬁliates 4,540 4,540 (14) 4,526

Non-current ﬁnancial assets 4,583 4,583 (81) 4,502

Deferred tax assets 619 6 625 2 627

Non-current assets 25,283 6 25,289 (79) (14) 25,196

Inventories 177 177 177

Current tax receivables 406 406 406

Current content assets 1,160 1,160 1,160

Trade accounts receivable and other 5,218 5,218 (10) 5,208

Current ﬁnancial assets 138 138 138

Cash and cash equivalents 1,951 1,951 1,951

Current assets 9,050 - 9,050 (10) - 9,040

Total assets 34,333 6 34,339 (89) (14) 34,236

EQUITY AND LIABILITIES

Share capital 7,128 7,128 7,128

Additional paid-in capital 4,341 4,341 4,341

Treasury shares (670) (670) (670)

Retained earnings and other 6,857 (12) 6,845 4 (14) 6,835

VivendiSA shareowners’ equity 17,656 (12) 17,644 4 (14) 17,634

Non-controlling interests 222 222 222

Total equity 17,878 (12) 17,866 4 (14) 17,856

Non-current provisions 1,515 1,515 1,515

Long-term borrowings and other ﬁnancial

liabilities 4,263 4,263 (93) 4,170

Deferred tax liabilities 589 589 589

Other non-current liabilities 226 226 226

Non-current liabilities 6,593 - 6,593 (93) - 6,500

Current provisions 412 412 412

Short-term borrowings and other ﬁnancial

liabilities 373 373 373

Trade accounts payable and other 9,001 18 9,019 9,019

Current tax payables 76 76 76

Current liabilities 9,862 18 9,880 - - 9,880

Total liabilities 16,455 18 16,473 (93) - 16,380

TOTAL EQUITY AND LIABILITIES 34,333 6 34,339 (89) (14) 34,236

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FORTHEYEAR ENDED DECEMBER31, 2018

28.3. RESTATEMENTS OF THE CONSOLIDATED FINANCIAL ASSETS

(inmillions of euros)

December31, 2017 IFRS9 restatements January1, 2018

Total Current

Non-

current

Available-

for-sale

securities

Financial

assets at

amortized

cost Total Current

Non-

current

Financial assets at fair value

through proﬁt or loss

Term deposits 50 50 - - - 50 50 - Term deposits

Level 1 Level 1

Bond funds 25 25 - - - 25 25 - Bond funds

Listed equity securities 3,754 - 3,754 (1,798) - 1,956 - 1,956 Listed equity securities

Other ﬁnancial assets 5 5 - - - 5 5 - Other ﬁnancial assets

Level 2 Level 2

Unlisted equity securities 361 - 361 (13) - 348 - 348 Unlisted equity securities

Derivative ﬁnancial instruments 19 4 15 19 4 15 Derivative ﬁnancial instruments

Level 3 – Other ﬁnancial assets 69 - 69 (47) 40 62 - 62 Level 3 – Other ﬁnancial assets

Financial assets at fair value

through other comprehensive

income

1,798 - 1,798 - 1,798 Level 1 – Listed equity securities

13 - 13 - 13 Level 2 – Unlisted equity securities

47 - 47 - 47 Level 3 – Unlisted equity securities

Financial assets

at amortized cost 438 54 384 - (121) 317 54 263

Financial assets

at amortized cost

Financial assets 4,721 138 4,583 - (81) 4,640 138 4,502 Financial assets

2018 Statutory Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

IV – 2018 Statutory Financial Statements

1. Statutory Auditors’ Report

on the Financial Statements 320

2. 2018 Statutory Financial Statements 324

3. Notes to the 2018 Statutory Financial Statements 328

Signiﬁcant Events in 2018 328

NOTE1.

ACCOUNTING RULES AND METHODS 329

NOTE2.

OPERATING LOSSES 331

NOTE3.

NET FINANCIAL INCOME/(LOSS) 331

NOTE4.

NET EXCEPTIONAL ITEMS 333

NOTE5.

INCOME TAXES 333

NOTE6.

INTANGIBLE ASSETS AND PROPERTY,

PLANTANDEQUIPMENT 335

NOTE7.

LONG-TERM INVESTMENTS 335

NOTE8.

CURRENT ASSETS 336

NOTE9.

TREASURY SHARES 337

NOTE10.

OTHER MARKETABLE SECURITIES AND CASH 337

NOTE11.

RECEIVABLES MATURITY SCHEDULE 338

NOTE12.

DEFERRED CHARGES 338

NOTE13.

UNREALIZED FOREIGN EXCHANGE GAINS AND LOSSES 338

NOTE14.

EQUITY 338

NOTE15.

STOCK OPTION PLANS AND PERFORMANCE SHARE PLANS 340

NOTE16.

PROVISIONS 341

NOTE17.

BORROWINGS 341

NOTE18.

DEBT MATURITY SCHEDULE 342

NOTE19.

ITEMS IMPACTING SEVERAL ITEMS OF THE STATEMENT

OFFINANCIAL POSITION 343

NOTE20.

COMPENSATION OF CORPORATE OFFICERS 343

NOTE21.

MANAGEMENT SHARE OWNERSHIP 343

NOTE22.

NUMBEROF EMPLOYEES 344

NOTE23.

FINANCIAL COMMITMENTS AND CONTINGENT LIABILITIES 344

NOTE24.

LITIGATION 347

NOTE25.

INSTRUMENTS USED TO MANAGE BORROWINGS 350

NOTE26.

FOREIGN CURRENCY RISK MANAGEMENT 350

NOTE27.

FAIR VALUE OF DERIVATIVE INSTRUMENTS 351

NOTE28.

SUBSEQUENT EVENTS 351

4. Subsidiaries and Afﬁliates 352

5. Maturity of Trade payable and Trade receivable 353

6. Financial Results of the Last Five Years 354

7. Statutory Auditors’ Special Report

onRegulatedAgreements Commitments 355

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1. Statutory Auditors’ Report on the Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

1. Statutory Auditors’ Report on the Financial Statements

This is a translation into English of the Statutory Auditors’ report on the ﬁnancial statements of the company issued in French and it is provided solely for the

convenience of English-speaking users. This Statutory Auditors’ report includes information required by European regulations and French law, such as

information about the appointment of the Statutory Auditors or veriﬁcation of the management report and other documents provided to the shareholders.

Thisreport should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

Year ended December31, 2018

To the Annual General Meeting of Vivendi,

OPINION

In compliance with the engagement entrusted to us by your annual general meetings, we have audited the accompanying ﬁnancial statements of Vivendi for

the year ended December31, 2018.

In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the company as at

December31,2018 and of the results of its operations for the year then ended in accordance with French accounting principles.

The audit opinion expressed above is consistent with our report to the Audit Committee.

BASIS FOR OPINION

Audit Framework

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufﬁcient

and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Statutory Auditors’ Responsibilities for the Audit of the Financial Statements section

of our report.

Independence

We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January1, 2018 to the date of our report

and speciﬁcally we did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No. 537/2014 or in the French Code of Ethics

for Statutory Auditors (Code de déontologie de la profession de Commissaire aux comptes).

JUSTIFICATION OF ASSESSMENTS – KEY AUDIT MATTERS

In accordance with the requirements of Articles L.823-9 and R.823-7 of the French Commercial Code (Code de commerce) relating to the justiﬁcation of our

assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most signiﬁcance

in our audit of the ﬁnancial statements of the current period, as well as how we addressed those risks.

These matters were addressed in the context of our audit of the ﬁnancial statements as a whole, and in forming our opinion thereon, and we do not provide

a separate opinion on speciﬁc items of the ﬁnancial statements.

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1. Statutory Auditors’ Report on the Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

Valuation of equity investments (Notes 1.3 and 7 of the Notes to the ﬁnancial statements)

Key audit matter Our response

Equity investments and equity portfolio securities amount to a net

value of €19,453million as at December31, 2018, for a total balance

sheet of €26,218million. The realizable value of equity investments is

determined in relation to their value in use, generally calculated based

on discounted future cash ﬂows, a method that involves a signiﬁcant

amount of judgements and assumptions, notably concerning:

3 future cash ﬂow forecasts;

3 perpetual growth rates used for projected ﬂows;

3 discount rates (WACC) applied to estimated cash ﬂows.

Consequently, any variation in these assumptions may have a signiﬁ-

cant impact on the value in use of these equity investments and

necessitate the recognition of an impairment loss, where applicable.

We consider the valuation of the equity investments to be a key audit

matter due to (i)their materiality in your company’s accounts, (ii)the

judgements and assumptions required to determine their value in use.

We analyzed the compliance of the methods adopted by your company with the

accounting standards in force, concerning the method of estimating the value in

use of equity investments.

We obtained the valuation reports for each of the equity investments concerned or

the analysis carried out by your company where applicable and paid particular

attention to those where the carrying amount is close to the estimated value in

use, those where the historical performance showed differences in relation to the

forecasts and those operating in volatile economic environments.

We examined the competence of the experts appointed by your company.

In particular, for the equity investments valued according to the discounted future

cash ﬂows method, we took note of the key assumptions used and:

3 compared the business forecasts underpinning the determination of cash

ﬂows with the information available, including the market prospects and

past achievements, and in relation to management’s latest estimates

(assumptions, budgets and strategic plans where applicable);

3 compared the perpetual growth rates used for the projected ﬂows with

market analyses and the consensus of the main professionals concerned;

3 compared the discount rates used (WACC) with our internal databases,

assisted by ﬁnancial valuation specialists included in our teams.

For evaluations based on a comparison method, we examined the selection of

companies included among the transaction or stock market comparables in order

to compare it with the relevant samples according to market analysts and our

knowledge of the market.

We obtained and reviewed the sensitivity analyses performed by management,

which we compared with our own calculations to assess what level of variation in

the assumptions would require the recognition of an impairment loss on the equity

investments concerned.

Lastly, we reviewed the information relating to these risks presented in the notes

to the ﬁnancial statements.

Analysis of disputes with the Mediaset group and with the former minority shareholders

(Notes1.7and24oftheNotes to the ﬁnancial statements)

Key audit matter Our response

Your company’s activities are conducted in a constantly evolving

environment and within a complex international regulatory framework.

Your company is not only subject to significant changes in the

legislative environment and in the application and interpretation of

regulations, but it also has to contend with litigation arising in the

normal course of its business.

Your company exercises its judgement in assessing the risks run relative

to the disputes with the Mediaset group and with certain foreign

institutional investors, and recognizes a provision when the expense

liable to result from these disputes is probable and the amount can

either be quantiﬁed or estimated within a reasonable range.

We consider this subject to be a key audit matter given the amounts at

stake and the level of judgement required for the determination of the

provisions.

We analyzed all the information made available to us, including, when applicable, the

written conﬁrmations from external advisors mandated by your company, relating to (i)

the dispute between your company and the Mediaset group and its shareholders and

its shareholders, and (ii) the dispute between your company and certain foreign

institutional investors concerning alleged harm resulting from the financial

communication of your company and its former CEO between 2000 and 2002.

We examined the estimates of the risk performed by the management and notably

compared them with the information made available to us by your company’s

advisers.

In addition, we analyzed the lawyers’ answers received in response to our requests

for conﬁrmation concerning these disputes.

Finally, we assessed the appropriateness of the information disclosed in the notes

to the ﬁnancial statements.

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1. Statutory Auditors’ Report on the Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

SPECIFIC VERIFICATIONS

We have also performed, in accordance with professional standards applicable in France, the speciﬁc veriﬁcations required by French legal and regulatory

texts.

Information provided in the Management Report and in the Other Documents Provided to the Shareholders

withrespect to the ﬁnancial position and the ﬁnancial statements

We have no matters to report as to the fair presentation and the consistency with the ﬁnancial statements of the information given in the management report

of the Management Board and in the other documents provided to the shareholders with respect to the ﬁnancial position and the ﬁnancial statements.

We attest that the information relating to payment times referred to in article D. 441-4 of the French Commercial Code (Code de commerce) is fair and

consistent with the ﬁnancial statements.

Report on Corporate Governance

We conﬁrm the existence in the Report on Corporate Governance of the information required by Articles L.225-37-3 and L.225-37-4 of the French Commercial

Code (Code de commerce).

Concerning the information given in accordance with the requirements of Article L.225-37-3 of the French Commercial Code (Code de commerce) relating to

remunerations and beneﬁts received by the members of the Executive Board and of the Supervisory Board and any other commitments made in their favor,

we have veriﬁed its consistency with the ﬁnancial statements, or with the underlying information used to prepare these ﬁnancial statements and, where

applicable, with the information obtained by your company from controlling and controlled companies. Based on this work, we attest the accuracy and fair

presentation of this information.

With respect to the information relating to items that your company considered likely to have an impact in the event of a public purchase or exchange offer,

provided pursuant to Article L.225-37-5 of the French Commercial Code (Code de commerce), we have agreed these to the source documents communicated

to us. Based on our work, we have no observations to make on this information.

Other information

In accordance with French law, we have veriﬁed that the required information concerning the identity of the shareholders and holders of the voting rights has

been properly disclosed in the management report.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Appointment of the Statutory Auditors

We were appointed as Statutory Auditors of Vivendi by the annual general meetings held on April 25, 2017 for Deloitte & Associés and on June15, 2000 for

Ernst & Young et Autres.

As at December31, 2018, Deloitte et Associés and Ernst & Young et Autres were in the second year and nineteenth year of total uninterrupted engagement

respectively.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of the ﬁnancial statements in accordance with French accounting principles and for such

internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether

due to fraud or error.

In preparing the financial statements, management is responsible for assessing the company’s ability to continue as a going concern, disclosing, as

applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the company or to cease

operations.

The Audit Committee is responsible for monitoring the ﬁnancial reporting process and the effectiveness of internal control and risks management systems

and where applicable, its internal audit, regarding the accounting and ﬁnancial reporting procedures.

The ﬁnancial statements were approved by your Management Board.

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1. Statutory Auditors’ Report on the Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

STATUTORY AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Objectives and audit approach

Our role is to issue a report on the ﬁnancial statements. Our objective is to obtain reasonable assurance about whether the ﬁnancial statements as a whole

are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material

if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial

statements.

As speciﬁed in Article L.823-10-1 of the French Commercial Code (Code de commerce), our statutory audit does not include assurance on the viability of the

company or the quality of management of the affairs of the company.

As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditor exercises professional judgment

throughout the audit and furthermore:

3 Identiﬁes and assesses the risks of material misstatement of the ﬁnancial statements, whether due to fraud or error, designs and performs audit

procedures responsive to those risks, and obtains audit evidence considered to be sufﬁcient and appropriate to provide a basis for his opinion. The

risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control.

3 Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but

not for the purpose of expressing an opinion on the effectiveness of the internal control.

3 Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by

management in the ﬁnancial statements.

3 Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a

material uncertainty exists related to events or conditions that may cast signiﬁcant doubt on the company’s ability to continue as a going concern. This

assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or conditions may cause the company

to cease to continue as a going concern. If the Statutory Auditor concludes that a material uncertainty exists, there is a requirement to draw attention

in the audit report to the related disclosures in the ﬁnancial statements or, if such disclosures are not provided or inadequate, to modify the opinion

expressed therein.

3 Evaluates the overall presentation of the ﬁnancial statements and assesses whether these statements represent the underlying transactions and

events in a manner that achieves fair presentation.

Report to the Audit Committee

We submit a report to the Audit Committee which includes in particular a description of the scope of the audit and the audit program implemented, as well

as the results of our audit. We also report signiﬁcant deﬁciencies, if any, in internal control regarding the accounting and ﬁnancial reporting procedures that

we have identiﬁed.

Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were of most signiﬁcance in the audit of the

ﬁnancial statements of the current period and which are therefore the key audit matters that we are required to describe in this report.

We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No.537/2014, conﬁrming our independence within the

meaning of the rules applicable in France as set out in particular in Articles L.822-10 to L.822-14 of the French Commercial Code (Code de commerce) and in

the French Code of Ethics for Statutory Auditors (Code de déontologie de la profession de Commissaire aux comptes). Where appropriate, we discuss with

the Audit Committee the risks that may reasonably be thought to bear on our independence, and the related safeguards.

Paris-La Défense, February14, 2019

The Statutory Auditors

French original signed by:

DELOITTE & ASSOCIÉS ERNST & YOUNG et Autres

Jean Paul Séguret Jacques Pierres

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2. 2018 Statutory Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

2. 2018 Statutory Financial Statements

I. STATEMENT OF EARNINGS

(inmillions of euros) Note 2018 2017

Operating income

Total revenues 68.3 66.5

Reversal of provisions and expense reclassiﬁcations 10.2 16.9

Other income 0.1

Total I 78.6 83.4

Operating expenses

Other purchases and external charges 133.5 101.5

Duties and taxes other than income tax 3.2 16.8

Wages and salaries and social security contributions 70.6 74.4

Depreciation, amortization and charges to provisions 26.2 26.4

Other expenses 1.4 1.2

Total II 234.9 220.3

Loss from operations (I - II)

2 (156.3) (136.9)

Financial income

From equity afﬁliates and other long-term securities (dividends) 1,076.8 275.1

From long-term receivables 59.7 57.0

Other interest and similar income 109.9 95.2

Reversal of provisions and expense reclassiﬁcations 28.6 40.7

Foreign exchange gains 512.6 926.1

Net proceeds from the sale of marketable securities 2.8

Total III 1,787.7 1,396.9

Financial expenses

Amortization and charges to ﬁnancial provisions 1,151.5 266.2

Interest and similar charges 186.7 116.5

Foreign exchange losses 512.1 873.1

Net expenses on marketable securities sales 0.9 0.7

Total IV 1,851.2 1,256.5

Net ﬁnancial income/(Loss) (III - IV)

3 (63.5) 140.4

Earnings/(Losses) from ordinary operations before tax (I - II + III - IV) (219.9) 3.5

Exceptional income

From non-capital transactions 4.2

From capital transactions 1,876.7 39.7

Reversals of provisions and expense reclassiﬁcations 218.4 539.8

Total V 2,095.1 583.7

Exceptional expenses

Related to non-capital transactions 17.1 86.2

Related to capital transactions 989.5 44.5

Exceptional depreciation, amortization and charges to provisions 47.6 271.7

Total VI 1,054.2 402.4

Net exceptional items (V - VI)

4 1,040.8 181.3

Income tax (charge)/credit (VII)

5 130.3 518.3

Total income (I + III + V + VII) 3,961.4 2,582.3

Total expenses (II + IV + VI) 3,010.1 1,879.2

EARNINGS FOR THE YEAR 951.3 703.1

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2. 2018 Statutory Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

II. STATEMENT OF FINANCIAL POSITION

ASSETS

(inmillions of euros)

Note

Gross

Depreciation

and amortization Net

12/31/2018 12/31/2017

Non-current assets

Intangible assets

6 9.9 8.7 1.3 1.0

Property, plant and equipment

6 58.8 56.0 2.8 3.2

Long-term investments (a)

7 24,869.8 4,307.0 20,562.8 23,596.5

Investments in afﬁliates and Long-term portfolio securities 22,159.7 2,706.4 19,453.3 22,995.7

Loans to subsidiaries and afﬁliates 1,602.5 1,600.6 1.9 1.8

Other long-term investment securities 599.8 599.8 590.1

Loans

Other 507.9 507.9 8.9

Total I 24,938.5 4,371.7 20,566.8 23,600.7

Current assets

Receivables (b) 2,925.0 292.6 2,632.4 2,524.1

Trade accounts receivable and related accounts 23.4 4.1 19.3 11.0

Other receivables 2,901.6 288.5 2,613.1 2,513.1

Marketable securities and equivalent receivables 2,762.7 0.9 2,761.8 1,095.7

Treasury shares

9 57.6 57.6 78.6

Other securities

10 2,705.0 0.9 2,704.1 1,017.1

Cash at bank and in hand

10 235.3 235.3 154.1

Prepayments (b) 16.3 16.3 15.9

Total II 5,939.3 293.5 5,645.8 3,789.8

Deferred charges (III)

12 5.4 5.4 7.9

Unrealized foreign exchange losses (IV)

Total assets (I + II + III + IV) 30,883.3 4,665.2 26,218.1 27,398.4

(a) Portion due in less than one year 517.1 19.4

(b) Portion due in more than one year 34.1 9.9

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2. 2018 Statutory Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

EQUITY AND LIABILITIES

(inmillions of euros)

Note

12/31/2017 12/31/2017

Equity 14

Share capital 7,184.3 7,128.3

Additional paid-in capital 9,288.5 9,155.0

Reserves

Legal reserve 752.7 752.7

Other reserves

Retained earnings 1,607.3 1,471.7

Earnings for the year 951.3 703.1

Total I 19,784.1 19,210.8

Provisions

16 574.9 553.0

Total II 574.9 553.0

Liabilities (a)

Convertible and other bond issues

17 3,665.8 3,665.8

Bank borrowings (b)

17 84.3 100.8

Other borrowings

17 2,016.8 3,792.7

Trade accounts payable and related accounts 28.9 16.3

Tax and employee-related liabilities 29.8 28.1

Amounts payable in respect of PP&E and related accounts 2.9 3.0

Other liabilities 26.2 27.9

Deferred income

Total III 5,854.8 7,634.6

Unrealized foreign exchange gains (IV)

13 4.3

Total equity and liabilities (I + II + III + IV) 26,218.1 27,398.4

(a) Portion due in more than one year 2,959.9 3,654.7

Portion due in less than one year 2,894.9 3,979.9

(b) Includes current bank facilities and overdrafts 84.3 100.8

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2. 2018 Statutory Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

III. STATEMENT OF CASH FLOWS

(inmillions of euros) 2018 2017

Earnings for the year 951.3 703.1

Elimination of non-cash income and expenses

Charges to amortization 3.3 3.7

Charges to depreciation and provisions net of (reversals)

Operating 12.7 7.7

Financial 1,122.1 225.5

Exceptional (170.8) (268.1)

Capital gains (866.2) 12.0

Dividends received in assets (9.6)

Other income and charges without cash impact 16.7 51.9

Operating cash ﬂows before changes in working capital 1,059.5 735.8

Changes in working capital (34.6) 193.1

Net cash provided by/(used in) operating activities 1,024.8 928.9

Capital expenditure (0.7) (0.8)

Purchases of investments in afﬁliates and securities (8.0) (4,165.2)

Increase in loans to subsidiaries and afﬁliates (59.8) (57.0)

Receivables related to the sale of non-current assets and other ﬁnancial receivables (465.6) 658.8

Proceeds from sales of intangible assets and PP&E 1.4

Proceeds from sales of investments in afﬁliates and securities 2,220.7 8.2

Decrease in loans to subsidiaries and afﬁliates

Increase in deferred charges relating to ﬁnancial instruments (1.7)

Net cash provided by/(used in) investing activities 1,687.9 (3,557.7)

Net proceeds from issuance of shares 189.5 152.1

Dividends paid (567.5) (499.2)

New long-term borrowings secured 844.6

Principal payments on long-term borrowings (750.0)

Increase (decrease) in short-term borrowings (16.5) (117.3)

Change in net current accounts (550.1) 235.5

Treasury shares (202.0)

Net cash provided by/(used in) ﬁnancing activities (944.6) (336.3)

Change in cash 1,768.2 (2,965.1)

Opening net cash (a) 1,171.2 4,136.3

Closing net cash (a) 2,939.4 1,171.2

(a) Cash and marketable securities net of impairment (excluding treasury shares).

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3. Notes to the 2018 Statutory Financial Statements

2018 STATUTORY FINANCIAL STATEMENTS

3. Notes to the 2018 Statutory Financial Statements

Preliminary note: all references to dollars are in US dollars.

SIGNIFICANT EVENTS IN 2018

Main changes in the equity portfolio

Opening of Universal Music Group’s share capital

The sale process for up to 50% of Universal Music Group’s share capital to

one or more strategic partners is moving forward:

3 corporate structure reorganization was completed at the end of

2018;

3 launch of Vendor Due Diligence at the beginning of 2019; and

3 meetings were held with the pre-selected banks. The ﬁnal selection

of the ﬁnancial advisors that will assist Vivendi in ﬁnding the best

partners for Universal Music Group should be completed in the

coming weeks.

A floor price will be set for the entry of partners into Universal Music

Group’s share capital.

Acquisition of Editis

Following the share purchase agreement entered into on November15,

2018 with the Spanish group Planeta, based on an enterprise value of

€900million, on January31, 2019, Vivendi completed the acquisition of

100% of the share capital of Editis, the second-largest French-language

publishing group, representing an €833million outflow, including the

repayment of Editis’s debt. The French Competition Authority had authorized

the transaction unconditionally on January2, 2019.

Editis recorded revenues of approximately €750million.

Editis encompasses around 50 prestigious publishing houses (e.g., Nathan,

Robert Laffont, Julliard, Plon, Belfond, Presses de la Cité, Pocket or Solar).

With a large portfolio of internationally-acclaimed authors, 4,000 new

books published each year and a catalogue of more than 45,000 titles, Editis

employs 2,400 people and has leading positions in the fields of fiction,

children’s books, non-ﬁction, graphic and illustrated books, educational and

reference books. Through its subsidiary Interforum, it is also a leader in

book selling/distribution.

Sale of interest in Ubisoft

On March20, 2018, Vivendi announced the sale of its entire 27.27%

interest in Ubisoft (30,489,300 shares) at a price of €66 per share,

representing an aggregate amount of €2billion. This interest had been

acquired by Vivendi over the past three years for €794.1million.

In connection with this sale, Vivendi received €1,511.2million on March23,

2018 (sale of 22,898,391 shares) and €69million on October3, 2018 (sale of

1,040,909 shares). The balance of the sale proceeds that remains to be

received by Vivendi amounts to €428.7million under the forward sale of its

remaining interest in Ubisoft (6,550,000 shares) which will occur on

March5, 2019.

In 2018, Vivendi realized a capital gain of €994.9million on the sale of the

interest in Ubisoft. As of December31, 2018, Vivendi retained 5.80% of

Ubisoft’s share capital, representing a book value of €209million.

Vivendi has given an undertaking to Ubisoft to sell all the shares it owns by

March7, 2019, the settlement date. In addition, Vivendi made the commitment

to refrain from purchasing Ubisoft shares for a period of ﬁve years.

Sale of interest in Fnac Darty

On January16, 2018, Vivendi entered into a hedging transaction to protect

the value of its 11% interest in Fnac Darty. The hedge involved an over-the-

counter instrument combining a forward sale, based on a reference price of

€91 per share and a share market loan. Vivendi had retained the option to

settle this transaction either in cash or in shares at maturity.

On July2, 2018, Vivendi decided to settle the transaction in shares, which

were delivered on July10, 2018. On July12, 2018, Vivendi received a cash

payment of €266.8million corresponding to the hedge price of €90.61 per

share, after making an initial investment in May2016 of €159million, i.e.,

€54 per share.

Mr. Stéphane Roussel and Mr. Simon Gillham, members of Vivendi’s

Management Board, have agreed to remain members of Fnac Darty’s Board

of Directors.

Sale of Telefonica shares

In Novemberand December2018, pursuant to its commitment to the

Brazilian Competition Authority (CADE) in connection with the sale of GVT in

2015, Vivendi sold its Telefonica shares on the market for an aggregate

amount of €373million.

In 2018, Vivendi received net dividends of €9.7million from Telefonica.

Transfer of the shares in Mediaset to an independent trustee

The partnership agreement entered into between Vivendi and Mediaset on

April8, 2016 is the subject of litigation proceedings. As of December31,

2017, Vivendi held 340,246 thousand Mediaset shares, representing 29.94%

of the voting rights. On April9, 2018, in compliance with the under takings

given to the AGCOM, Vivendi transferred the portion of its voting rights in

excess of 10% to an independent Italian trustee (see Note7, Long-term

Investments and Note24, Litigation).

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Note1. Accounting Rules and Methods

2018 STATUTORY FINANCIAL STATEMENTS

NOTE1. ACCOUNTING RULES AND METHODS

1.1. GENERAL PRINCIPLES AND

CHANGEINACCOUNTING METHODS

The statutory ﬁnancial statements for the ﬁscal year ended December31,

2018 have been prepared and presented in accordance with applicable

French laws and regulations, and in particular the regulations of the ANC

(AutoritédesNormesComptables), France’snational accountingstandards

authority, relating to the general accounting plan (Plan Comptable Général

or “PCG”), in particular ANC Regulation No.2014-03.The application of ANC

Regulation No.2018-01 related to changes in accounting policies, changes

in accounting estimates and corrections of errors did not result in any

changes in the presentation of Vivendi’s statutory ﬁnancial statements or

their comparability.

The accounting principles and methods are identical to those applied for the

preparation of the 2017 statutory ﬁnancial statements.

The company makes certain estimates and assumptions that it considers

reasonable and reliable. These estimates and assumptions are based on

past or anticipated events, and relate in particular to the measuring of asset

impairment (see Note7, Long-term Investments) and provisions (see

Note16, Provisions) as well as to employee benefits (see Note1.9,

Employee beneﬁt plans). Despite regular review, facts and circumstances

may lead to changes in such estimates and assumptions, which may have

an impact on the amount of assets, liabilities, equity or earnings recognized

by the company.

The annual Statutory Financial Statements are available online on vivendi.com.

Consolidating companies

Since April26, 2017, the Vivendi group has been fully consolidated by

Bolloré Group, whose parent companies are BolloréSA (Siren: 055 804 124)

and Financière de l’Odet (Siren: 056 801 046).

Moreover, VivendiSA is the parent company of the Vivendi group.

1.2. INTANGIBLE ASSETS AND PROPERTY,

PLANTANDEQUIPMENT

Intangible assets and property, plant and equipment are valued at acquisi-

tion cost.

Depreciation and amortization are calculated using the straight-line method

and, where appropriate, the declining balance method over the useful lives

of the relevant assets.

1.3. LONG-TERM INVESTMENTS

Investments in afﬁliates and long-term portfolio

securities and other investment securities

Shares of companies, the long-term ownership of which is deemed to be

beneﬁcial to Vivendi’s business, are classiﬁed as investments in afﬁliates.

Long-term portfolio securities include securities of companies which

Vivendi expects to realize satisfactory returns over the medium to long term

without interfering with the management of such companies.

Investments in afﬁliates, long-term portfolio securities and other investment

securities are recorded at acquisition cost. If their value exceeds their value-

in-use, an impairment loss is recorded for the difference between the two.

Investments in affiliates are valued based on their value-in-use (PCG

Art.221-3). Value-in-use is generally determined based on the discounted

value of future cash ﬂows, although a more suitable method may be used

where appropriate, such as comparative stock market values, values

resulting from recent transactions, stock market prices in the case of listed

entities, or the share held in net equity.

Long-term portfolio securities are valued based on their market value taking

into consideration the general prospects of the companies concerned (PCG

Art.221-5).

The value-in-use of securities in foreign currencies is calculated using the

exchange rate applicable on the closing date for both listed securities (PCG

Art.420-3) and unlisted securities.

Vivendi expenses investment and security acquisition costs in the ﬁscal year

during which they are incurred.

Loans to subsidiaries and afﬁliates

Loans to subsidiaries and afﬁliates consist of medium and long-term loans

to group companies. They do not include current account agreements with

group subsidiaries that are used for day-to-day management of cash

surpluses and shortfalls. Impairment losses are recorded based on the risk

of non-recovery.

Treasury shares

All treasury shares held by Vivendi that are: (i) in the process of cancellation,

(ii) allocated to covering performance share plans and external growth

transactions, or (iii) acquired pursuant to a liquidity contract, are recorded as

Long-term Investments. Impairment losses are recorded on shares held for

the purpose of a share exchange or payment in external growth transactions

and on shares acquired under a liquidity contract if their value-in-use, which

corresponds to the average share price during closing month, is lower than

their book value (PCG Art.221-6).

All remaining treasury shares held by Vivendi are recorded as marketable

securities (see Note1.5, Marketable securities).

1.4. OPERATING RECEIVABLES

Operating receivables are recorded at nominal value. A provision is there-

fore made, as appropriate, based on the risk of non-recovery.

1.5. MARKETABLE SECURITIES

Treasury shares

Treasury shares purchased for delivery to employees pursuant to perfor-

mance share plans are recorded as marketable securities.

At year-end, the shares allocated to speciﬁc plans are not depreciated but

the probable outﬂow of resources corresponding to the expected loss in

value when the shares are delivered to the beneficiaries is subject to a

provision (see Note1.8, Stock option plans and performance share plans).

For those shares not allocated to specific plans, an impairment loss is

recognized, as appropriate, to reduce their net value down to their stock

market value based on the average share price during the month of closing.

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Note1. Accounting Rules and Methods

2018 STATUTORY FINANCIAL STATEMENTS

Other marketable securities

All other marketable securities are recorded at acquisition cost. An impair-

ment loss is recorded for the difference between the two if the estimated

value-in-use at the end of the period is lower than the acquisition cost. The

value-in-use of securities in foreign currencies is calculated using the

exchange rates applicable on the closing date.

1.6. DEFERRED CHARGES RELATING

TOFINANCIALINSTRUMENTS

Issue costs in relation to bonds and lines of credit are amortized equally

over the term of such instruments.

1.7. PROVISIONS

A provision is recorded if Vivendi has an obligation to a third party and it is

probable or certain that an outﬂow of resources will be necessary to settle

this obligation, without receipt of equivalent consideration from the third

party.

The provision is equal to the best estimate, taken at period-end, of the

outflow of resources necessary to settle the obligation, where the risk

exists at the end of the period.

The assumptions underlying the provisions are regularly reviewed and any

necessary adjustments are recorded.

Where it is not possible to provide a reliable estimate for the amount of the

obligation, a provision is not recorded and disclosure is made in the notes to

the ﬁnancial statements (see Note24, Litigation).

1.8. STOCK OPTION PLANS

ANDPERFORMANCESHAREPLANS

When the company implements a performance share plan or a stock option

plan that is settled by the delivery of treasury shares, a provision is

recognized. This provision is calculated based on the market price of Vivendi

shares as at the grant date or the estimated share purchase price at year-

end. In the case of stock option plans, the probable outﬂow of resources

making up the provision is equal to the cost of the shares repurchased less

the exercise price paid by the employees (PCG Art. 624-8).

Pursuant to the PCG Art.624-14, expenses, charges and reversals in relation

to the grant of stock options and free shares to company employees, are

recorded as personnel costs.

1.9. EMPLOYEE BENEFIT PLANS

Vivendi applies the reference method defined by ANC Regulation

No.2018-01 (PCG, Art.324-1) and uses method 1 of Recommendation ANC

No. 2013-02 regarding the valuation of, and accounting methods for,

pension commitments and similar beneﬁts.

The provision recorded for obligations in relation to employee beneﬁt plans

includes all Vivendi employee beneﬁt plans, i.e., retirement/termination

payments, pensions and supplemental pensions. It is calculated as the

difference between the value of the actuarial obligations and plan assets,

net of actuarial gains and losses and unrecognized past service costs.

The actuarial obligation is calculated using the projected unit credit method

(each period of activity generates additional entitlement). Actuarial gains

and losses are recognized using the “corridor method”. This consists of

recording, in the profit and loss account for the relevant period, the

amortization calculated by dividing the portion of actuarial gains and losses

which exceeds the greater of 10% of: (i) the obligation and (ii) the fair value

of the plans’ assets as of the beginning of the ﬁscal year, by the average

remaining working life expectancy of the beneﬁciaries.

1.10. FOREIGN CURRENCY-DENOMINATED

TRANSACTIONS

Foreign currency-denominated income and expense items are translated

using average monthly rates or, as applicable, using the exchange rate

negotiated during speciﬁc transactions.

Foreign currency-denominated receivables, payables, marketable securities

and cash balances are translated at the exchange rates applicable on the

accounting closing date (PCGArt.420-5).

Unrealized gains and losses recognized on translation of foreign currency

borrowings, loans, receivables and payables, using exchange rates

prevailing on the accounting closing date, are recorded in the Statement of

Financial Position as unrealized foreign exchange gains and losses. A

provision for foreign exchange losses is recorded in respect of unhedged

and unrealized exchange losses (PCG, Art.420-5).

Cash and and foreign currency current accounts existing at the end of the

ﬁscal year are converted into local currency at the exchange rate on the last

business day of the period. Translation differences recognized as assets and

liabilities are recorded in the proﬁt and loss account for the year, except

when the provisions relating to hedging transactions are applicable (PCG

Art.420-7).

Vivendi seeks to secure the exchange rate of assets and liabilities denominated

in foreign currencies, particularly through the implementation of derivative

financial instruments. Foreign exchange gains and losses realized on the

hedging instruments are classiﬁed in the Statement of Financial Position as

deferred revenue or expenses until the gain or loss on the hedged item is

recognized (see Note1.11, Derivative ﬁnancial instruments).

1.11. DERIVATIVE FINANCIAL INSTRUMENTS

ANDHEDGING OPERATIONS

Vivendi uses derivative ﬁnancial instruments to: (i) reduce its exposure to

market risks associated with interest and foreign exchange rate

fluctuations, and (ii) secure the value of certain financial assets. These

instruments are traded over-the-counter with highly-rated counterparties.

Pursuant to Article628-11 of the PCG, unrealized or realized income and

expenses generated by interest rate and currency hedging instruments are

recorded with the income and expenses of the hedged items.

Unrealized gains on derivative instruments not eligible for hedge accounting

(isolated open positions) are not included in the calculation of income.

Conversely, unrealized losses on these instruments are recorded as Net

ﬁnancial charges.

As a result, changes in the value of hedging instruments are not recognized

in the Statement of Financial Position, unless the full or partial recognition

of these variations ensures a symmetrical treatment with the hedged item.

Premiums and discounts associated with foreign currency forward sales and

purchases are spread over the duration of the hedge and recognized as

ﬁnancial income or expense.

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Note3. Net Financial Income/(Loss)

2018 STATUTORY FINANCIAL STATEMENTS

NOTE2. OPERATING LOSSES

2.1. REVENUES

Revenues consisting of charges for services provided by Vivendi and rebilling of costs to its subsidiaries, amounted to €68.3million in 2018, compared to

€66.5million in 2017.

2.2. OPERATING EXPENSES AND EXPENSE RECLASSIFICATIONS

Operating expenses amounted to €234.9million in 2018, compared to €220.3million in 2017.

Within this total, “other purchases and external charges” represented €133.5million in 2018, compared to €101.5million in 2017. Other purchases and

external charges, including amounts rebilled to subsidiaries (recorded in revenues) and expense reclassiﬁcations (recorded in the Statement of Earnings as

reversal of provisions and expense reclassiﬁcations), are broken-down as follows:

(inmillions of euros) 2018 2017

Non stored purchases 0.8 0.7

Rent 9.5 8.7

Insurance (a) 16.8 20.2

Service providers, temporary staff and sub-contracting 24.5 10.7

Commissions and professional fees (b) 66.2 44.0

Bank services 0.2 1.7

Other external services 15.5 15.5

Sub-total other purchases and external charges 133.5 101.5

Amounts rebilled to subsidiaries (revenues) (21.4) (11.2)

Expense reclassiﬁcations (1.7)

Total net of rebilled expenses and expense reclassiﬁcations 112.1 88.6

(a) Including €8.1million paid in 2018 (€12.1million in 2017) on plans for the coverage of supplementary pension liabilities, other than retirement termination payments.

(b) The change in commissions and professional fees is mainly due to fees related to M&A transactions, and legal fees related to litigation.

NOTE3. NET FINANCIAL INCOME/(LOSS)

Net ﬁnancial income/(loss) is broken-down as follows:

(inmillions of euros) 2018 2017

Net ﬁnancing costs (26.9) (19.4)

Dividends received 1,076.8 275.1

Foreign exchange gains & losses 0.5 53.0

Other ﬁnancial income and expenses (58.6) (4.1)

Movements in ﬁnancial provisions (1,055.4) (164.2)

Total (63.5) 140.4

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Note3. Net Financial Income/(Loss)

2018 STATUTORY FINANCIAL STATEMENTS

3.1. FINANCING COSTS

The net financing costs amounted to -€26.9million in 2018, compared

-€19.4million in 2017, which, among other items, included:

3 charges resulting from bond issues amounting to -€67.9million in

2018, compared to -€66.9million in 2017 (see Note17, Borrowings);

3 external investment income and net capital gains on disposals of

marketable securities amounting to €8.8million in 2018, compared

to €13.3million in 2017;

3 net income earned on current accounts with subsidiaries amounting

to €7.1million in 2018, compared to €21.8million in 2017. The net

change is primarily due to the increase in interest rates paid on

deposits in US dollar current accounts; and

3 premiums and discounts associated with forward currency transac-

tions used for hedging, resulting in a positive net amount of

€25.1million in 2018, compared to €12.4million in 2017.

3.2. DIVIDENDS RECEIVED

In 2018, Income from affiliates amounted to €1,076.8million, which

primarily comprised dividends from Universal Music Group Inc. (UMG Inc.)

of €735.5million ($839million) in cash and €9.6million ($11million) in

shares of Vivendi Holding 1, from UMGSAS (fka SIG 104) of €245.8million,

from Havas of €76.1million and from Telefonica of €9.7million.

In 2017, Income from afﬁliates amounted to €275.1million, which primarily

comprised dividends from Universal Music Group, Inc. (UMG Inc.) of

€253.8million ($300million) and Telefonica of €16.7million.

3.3. FINANCIAL PROVISIONS AND IMPAIRMENTS

The value of Groupe Canal+SA is determined based on its value in

use which was established in 2017, on the basis of recoverable

amounts, determined by discounting future cash ﬂows (Discounted

Cash Flow Method (DCF)).

Based on multiple valuations observed in recent acquisitions,

Vivendi considered that Canal+ Group’s recoverable amount is at

least equal to its carrying value. Canal+ Group did not update its

business plan at year-end 2018, given the uncertainties around its

program offering following the expiration of the League 1 football

rights in France in 2020.

3 To achieve the highest possible valuation for Universal Music

Group, given the favorable change in the international music

market, driven in particular by the strong development of

subscription streaming services, Vivendi stated in 2018 that it is

willing to sale up to 50% of Universal Music Group’s share capital

to one or more strategic partners and that such process could be

completed within an 18-month timeframe.

The value of UMG Inc and UMGSAS, the two companies held by

VivendiSA engaged in the music business, appreciated in 2018 and

continue to exceed their book values.

3 The acquisitions of Gameloft and Dailymotion, on June29, 2016 and

June30, 2015, respectively, were part of Vivendi’s strategy to build a

global content and media group. Gameloft and Dailymotion were

fully consolidated into the group and they are currently being

reconﬁgured. With the assistance of a third-party appraiser, Vivendi

ensured that the recoverable amounts of Gameloft and Dailymotion

as of December31, 2017 and as of December31, 2018, which were

determined using standard valuation methods (the value in use,

determined as the discounted value of future cash ﬂows, and the fair

value, determined on the basis of market data: stock market prices,

comparable listed companies, comparison with the value attributed

to similar assets or companies in recent acquisition transactions)

were at least equal to their value at the acquisition date.

Vivendi recognized an impairment loss of €73million on the current

account advanced to Dailymotion, and granted the company a debt

waiver in respect of €55million.

3 As of December31, 2018, the stock market price of Telecom Italia

ordinary shares (€0.48) decreased compared to the average

purchase price paid by Vivendi (€1.08). In particular, Vivendi has

observed the significant decrease in the stock market price of

Telecom Italia since May4, 2018, the date of Telecom Italia’s

Shareholders’s Meeting during which the Board of Directors’

composition was changed and a new Chairman was appointed.

Without change compared to previous year-ends, Vivendi tested the

value of its interest in Telecom Italia, to determine whether the

recoverable amount exceeded its carrying value. With the assis-

tance of a third-party appraiser, Vivendi used the standard valuation

methods: the value in use, determined as the discounted value of

future cash ﬂows; the fair value, determined on the basis of market

data: stock market prices, comparable listed companies and

comparison with the value attributed to similar assets or companies

in recent acquisition transactions. Notwithstanding Vivendi’s

expected improvement of Telecom Italia’s outlook, Vivendi recorded

in 2018 an impairment charge of €800.7million, notably to take into

account the uncertainty affecting Telecom Italia’s governance, which

increases the non-execution risks associated with the company’s

industrial plan given Vivendi’s lower power to participate in Telecom

Italia’s financial and operating policy decisions, and to take into

account the changes in Telecom Italia’s competitive and regulatory

environment.

3 Concerning Mediaset (see Signiﬁcant Events in 2018), the impair-

ment losses recognized in 2018 include: (i) the impairment on the

rights over the shares transferred to an independent Italian trustee

in Aprilfor €135.1million, calculated based on the annual closing

price of Mediaset shares, and (ii) the impairment on the Mediaset

shares held by Vivendi on December31, 2018, calculated based on

the average price of Mediaset shares during December(PCG,

Art.833-7), i.e., €52.9million.

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Note5. Income taxes

2018 STATUTORY FINANCIAL STATEMENTS

NOTE4. NET EXCEPTIONAL ITEMS

In 2018, a net exceptional gain of €1,040.8million was recorded, compared

to a net exceptional gain of €181.3million in 2017. It primarily comprised

the following items:

3 net income related to the sale of shares (see “Signiﬁcant Events”),

in particular (i) a net capital gain of €994.9million related to the sale

of 23.9million shares of Ubisoft, (ii) a net capital gain of

€107.8million realized on the sale of Fnac Darty shares and (iii) a

net capital loss of €196.2million on the sale of Telefonica shares,

offset by the reversal of impairment of €155.6million;

3 a charge of €47.7million related to the coverage of performance

share plans benefiting employees of Vivendi subsidiaries:

€6.7million in respect of deliveries of Vivendi shares in 2018 and a

net charge of €17.7million to cover performance share plans

beneﬁting employees other than VivendiSA employees, and a loss

of €6.9million (deliveries in 2018) and a net charge of €29.5million

to cover deliveries of Vivendi Shares to beneficiaries of Havas

performance share plans maturing in 2019 and 2020 who did not

sign a liquidity undertaking following the buyout offer followed by a

squeeze-out made by Vivendi for the shares of Havas in 2017 (see

Note9, Treasury Shares and Note16, Provisions); and

3 a reversal of provision for €11.4million related to risks associated

with the tax refund request lodged by Vivendi and its use of foreign

tax receivables following its exit from the Consolidated Global Proﬁt

Tax System, in respect of the ﬁscal year ended December31, 2012

(see, Note5, Income taxes and Note16, Provisions).

NOTE5. INCOME TAXES

VivendiSA beneﬁts from the French Tax Group System and considers that,

until December31, 2011 inclusive, it beneﬁted from the Consolidated Global

Proﬁt Tax System, as permitted under Article209 quinquies of the French

Tax Code. Since January1, 2012, Vivendi only beneﬁts from the French Tax

Group System.

3 Under the French Tax Group System, Vivendi is entitled to

consolidate its own tax proﬁts and losses with the tax proﬁts and

losses of French subsidiaries that are at least 95% owned, directly

or indirectly by it. As of December31, 2018, this mainly applies to

Universal Music Group, Canal+ Group, Havas and Gameloft entities

in France, as well as the companies involved in the group’s

development projects in France (e.g., Vivendi Village, Dailymotion).

At year-end 2018, Vivendi recorded an income tax credit of

€119.1million under the French Tax Group System.

3 Until December31, 2011, the Consolidated Global Proﬁt Tax System,

for which Vivendi obtained a tax authorization, enabled Vivendi to

consolidate its own tax proﬁts and losses with the tax proﬁts and

losses of subsidiaries that were at least 50% owned, directly or

indirectly, by it and located in France or abroad. This authorization

was granted for an initial ﬁve-year period, from January1, 2004 to

December31, 2008, and then was renewed, on May19, 2008, for a

three-year period, from January1, 2009 to December31, 2011. As a

reminder, on July6, 2011, Vivendi lodged a request with the French

Ministry of Finance to renew its authorization to use the Consoli-

dated Global Proﬁt Tax System for a three-year period, from Janu-

ary1, 2012 to December31, 2014.

3 In 2011, pursuant to changes in French Tax Law, the Consolidated

Global Proﬁt Tax System was terminated as of September6, 2011,

and the deduction for tax losses carried forward was capped at 60%

of taxable income. Since 2012, the deduction for tax losses carried

forward has been capped at 50% of taxable income and the

deductibility of interest limited to 85% of financial charges, net

(75% as from January1, 2014).

The impacts of the French Tax Group and Consolidated Global Proﬁt Tax

Systems on the valuation of Vivendi’s tax attributes (tax losses, foreign tax

receivables and tax credits carried forward) are as follows:

3 In 2012, Vivendi, considering that it was entitled to use the Consoli-

dated Global Proﬁt Tax System up until the end of the authorization

period granted by the French Ministry of Finance (i.e., until

December31, 2011), filed a contentious claim for a €366million

refund in respect of ﬁscal year 2011. In a decision dated October25,

2017, marking the end of legal proceedings brought before

administrative courts, the French Council of State (Conseil d’État)

recognized that Vivendi had a legitimate expectation that it would be

afforded the Consolidated Global Profit Tax System for the entire

period covered by the authorization, including for the fiscal year

ending December31, 2011. Given that the power of ﬁnal adjudication

is vested in the French Council of State and that its decision is not

subject to appeal, the amount of €366million paid to Vivendi,

coupled with moratorium interest of €43million, were deﬁnitively

acquired by Vivendi. As a result, Vivendi recorded a tax income of

€409million for the ﬁscal year ended December31, 2017.

3 Moreover, considering that Vivendi’s foreign tax receivables

available at the exit from the Consolidated Global Proﬁt Tax System

can be carried forward upon the end of the authorization, Vivendi

requested a tax refund for the ﬁscal year ended December31, 2012.

On May8, 2013, Vivendi received a refund of €201million. This

refund was then challenged by the tax authorities in relation to a tax

audit and Vivendi provisioned the associated risk for a principal

amount of €208million in its Financial Statements for the year

ended December31, 2012, increased to €221million as of

December31, 2013. In its Financial Statements for the year ended

December31, 2014, Vivendi maintained and increased this provision

by €11million (the amount of additional default interest), for a total

amount of €232million which was subsequently decreased to

€228million as of December31, 2015 after the deduction of

ordinary tax credits. As part of this tax audit, on March31, 2015,

Vivendi made a payment of €321million, corresponding to the

amounts of €221million and €11million mentioned above,

increased by additional penalties of €89million.

3 On June29, 2015, after the tax audit was completed, Vivendi

challenged the tax authorities in regard to the tax payment, the

default interest and the penalties, for which no provision had been

accrued upon the recommendation of its advisors. Vivendi has since

brought this case before the Administrative Court of Montreuil. On

March16, 2017, the Administrative Court of Montreuil ruled in favor

of Vivendi. Pursuant to this decision, on April18, 2017, Vivendi

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