July 30, 2020 / 5:37 PM / in 10 days

UPDATE 1-Vivendi could list Universal Music before 2023 -CEO

* H1 group core operating profit down 3.8%

* Universal’s H1 profits up 17%

* Music division’s IPO by early 2023 at latest (Adds details, CEO quote)

PARIS, July 30 (Reuters) - French media giant Vivendi could list its most-prized asset, Universal Music Group, before 2023 if the right conditions are met, Chief Executive Officer Arnaud de Puyfontaine said on Thursday after first-half results showed the division’s resilience.

Vivendi, which is controlled by French tycoon Vincent Bollore, said the music unit, home to artists Taylor Swift, Drake and Lady Gaga, was the only business unit within the group to report growth in the first half of this year, when European economies slumped due to the coronavirus crisis.

Vivendi said first-half sales dropped by 2% from a year earlier at constant currency rates to 7.58 billion euros ($8.95 billion). Overall core operating profits fell by 3.8% to 735 million euros, hampered notably by a downturn at advertising unit Havas.

By contrast, Universal’s sales grew by 3.5% over the period, while its core profit jumped by close to 17%, driven by increased online subscriptions and streaming revenues.

The plan to list Universal represents the next milestone in a two-year process launched by Bollore to cash in on the music industry’s revival. In February, Vivendi said it planned to list the unit by early 2023 at the latest.

De Puyfontaine said the recent listing of rival Warner Music Group was another sign of good momentum for the owners of music rights.

“We’re pleased by the success of Warner’s IPO in recent weeks,” de Puyfontaine said in a call with reporters.

“We could anticipate (before) that date (Universal IPO in 2023) if the conditions were right.”

A consortium led by China’s tech giant Tencent Holdings Ltd bought 10% of Universal last December in a deal that valued it at 30 billion euros. The same consortium has the option to buy a further 10% of Universal’s share capital until mid-January 2021.

The first half of this year was also marked by Bollore’s decision to invest in French media company Lagardere through Vivendi, becoming the No. 1 investor in the company with a 21% stake.

Asked if the aim was to merge Vivendi’s publishing unit Editis with its rival Hachette, owned by Lagardere, de Puyfontaine said such an option was not on the agenda for the time being. ($1 = 0.8471 euros) (Reporting by Mathieu Rosemain; Editing by Susan Fenton)

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