Arnaud de Puyfontaine, chief executive of Vivendi, has given a strong indication of how the media giant will benefit from its 2017 acquisition of the Havas group during the company's quarterly earnings call.
Last June, Vivendi acquired a 60% stake in Havas for €2.3bn, bringing under its wing agencies like Victors & Spoils, FullSix, Arena, Arnold, H4B and Work Club. Furthermore, there is a familial tie between the two companies, French billionaire Vincent Bolloré has a controlling share in Vivendi, while his son Yannick is chief executive of Havas. There has been much speculation around how the ad network will tie into the wider Vivendi operation.
In its financial update for the fourth quarter, De Puyfontaine said that the European company is looking to scale so it can compete globally across content, media and comms. Under its wing it boasts the likes of Universal Music Group, Gameloft and Canal+ Group, giving it a substantial presence in multiple entertainment mediums. He tied Havas into this picture. “The acquisition of Havas makes total sense in a digital environment where content, distribution and communication converge."
He added: “Havas is a very rare and strategic asset, it has unique clarity to knowhow which is very difficult to replicate.”
In the second half of 2017, Havas "had a positive impact of €1.1bn on Vivendi's revenues" and the group will now lean heavier on Havas for consumer expertise which De Puyfontaine said is “becoming an ever-stronger competitive advantage in the digital world”.
There has been much speculation around the coming together of what is a media buyer and a media seller. De Puyfontaine provided more detail on how both firms will benefit from each other. “Customer knowledge and insights are the key to better exploit data, foster positive synergies and improve the monetisation of our content in the whole value chain. In exchange, Havas gains the unique access to Vivendi’s premium content and community of talent, offering it grounds and more attractive way to connect with their audiences.”
Underlining the scale of this content, he earlier said: “We own very powerful assets in the entertainment industry, which now work together as a crazy industrial group and are integrated to generate more value.”
On the content creation front, he said that the next step is to meet the expectations of viewers, “especially the next generation of the digital consumers”. This content will be distributed through the Vivendi network and its partners, Telecos and digital platforms, to improve its reach which is currently around 300 million unique viewers per month.
To grow this he said: “We are investing in new businesses with high value creation potential, video platforms, new content format, live venues just to name a few. Everything is now in place to successfully fulfill our ambitious industrial vision.”
Overall, Vivendi announced its revenue rose 15% in 2017. However, year-over-year Havas revenues were down 1.1% in the second half.
"In a challenging environment Havas moved very quickly in implementing a plan to reduce overhead and G&A costs, which competed into exceptional charges of 24 million including 15 million of restructuring charges. With respect to the full-year 2017, Havas just like its industry peers struggled due to the changes in its market entertainment in the media sector," he said.
Du Puyfontaine is optimistic in his outlook for 2018, saing "good and rapid measures have been made to acknowledge the transition of the industry" which should come into fruition this year.