Vivendi says turnaround on track as Canal+ loses nearly half million subs in 2016

Canal+ lost close to half a million subscribers in France last year, pushing revenues down by 4.7% to €5.25 billion despite an uplift in the final quarter thanks to its new partnership with Orange and Free.

Canal+ lost 492,000 subscribers in France to take its total to 5.25 million at the end of last year, taking French pay TV revenues down 6.1%.

Internationally, Canal+ added 692,000 subscribers in Africa over the course of the year, taking its total base there to 2.8 million.

As of the end of 2016, Canal+ Group had an overall base of 11.5 million individual subscribers and an additional 2.9 million Free and Orange subscribers that took Canal+ services through the new partnerships.

In addition to solid international growth, Canal+ saw strong growth in the free-to-air segment, with advertising revenues boosted by the performance of its C8 channel, the fourth-most watched DTT channels at the end of the year and fifth most watched channel overall.

Revenues from production arm StudioCanal fell sharply, down 26.1% on 2015, with the prior year performance seeing a strong boost from the success of Paddington.

Operating income was €303 million, compared with €542 million in 2015. EBITA amounted to €240 million, down from €454 million in 2015. EBITA from the Canal+ channels in France was negative €399 million, down from a €264 EBITA loss for the previous year.

Speaking to analysts after Canal+ parent company Vivendi’s results were announced, Vivendi chief financial officer Hervé Philippe said that Canal+’s €300 million cost-cutting programme was on track, with €100 million of savings already in place, but that the unit’s performance had been hit by lower advertising revenues for Canal+ following the reduction of its free-to-air window. He said that an increase in profits from Africa could not offset this decline.

CEO Arnaud de Puyfontaine said it was too early to judge theimpact of Vivendi’s revamp of Canal+’s offering, but that early signs were “encouraging”.

De Puyfontaine admitted that the market for premium sports was more competitive than before, but said that Canal+ had faced competition previously, sucessively from TPS, Orange and BeIN Sports. He said Canal+’s sports line-up remained “the only one that is very comprehensive and strong” and a “must-have” for sports fans, despite the entry into the market of SFR.

De Puyfontaine declined to comment on “the future of the relationship” between Vivendi and Orange following speculation that Orange could buy the pay TV operator or that Vivendi could take a stake in the telecom giant. He said that the pair had a relationship and that nothing had been ruled out, but that no “formal pitch” was under discussion.

Vivendi overall posted revenues of €10.8 billion for the year, down 0.2%, and EBIT of €1.2 billion, down 2.9%.