Vivendi's New 'Galaxy' of Companies: Time for a Clearer Strategy

As Vivendi's new 'galaxy' of companies - Canal+, Havas, and Louis Hachette Group - settle into their independent orbits, investors and analysts are calling for a clearer strategy to instill confidence in the market. The recent spin-offs, backed by the Bolloré family, aimed to unlock value by breaking up the French media conglomerate, but the market has yet to fully embrace the new entities.

The combined market capitalization of the four companies (including Vivendi) was 7.7 billion euros ($7.92 billion) as of January 17, 2025, based on LSEG data. Before the break-up, Vivendi was worth about 8.3 billion euros. However, only Louis Hachette shares are currently above their listing price, and Vivendi is trading above the last closing price before the split as adjusted by Euronext.

Canal+, the largest company, has been the laggard, with its shares down 31% since they listed on December 16, 2024. Analysts and investors have cited a lack of clear strategy, disappointing financial guidance, and uncertainty around Canal+'s acquisition of broadcaster MultiChoice as factors contributing to the weak performance.

To reassure investors, Canal+, Havas, and Louis Hachette Group should outline specific strategies that address these concerns. Here are some key areas they should focus on:

1. Canal+:
* Provide clear financial guidance that aligns with investor expectations, including realistic targets for revenue growth and Adjusted EBIT margin improvement.
* Offer a dividend policy to reassure investors about future returns.
* Clarify the integration plan and expected synergies from the MultiChoice acquisition, addressing the uncertainty around Canal+'s listing eligibility for certain indexes and the potential impact on shareholder composition.
2. Havas:
* Outline a clear organic net revenue growth target for the next two years, with a focus on exceeding 2.0% growth in 2025.
* Set a specific target for the adjusted EBIT margin, aiming for a range between 12.5% and 13.5% in 2025.
* Establish a dividend policy that reflects Havas' growth and cash-generating profile, with a target payout ratio of around 40% of net income in 2025.
* Address the governance concerns raised by Barclays, such as the potential impact of the current structure on board changes and hostile takeovers.
3. Louis Hachette Group:
* Detail a strategy for maximizing value creation for shareholders through steady dividend distributions while preserving growth opportunities.
* Set a specific target for dividend payouts, aiming to distribute a minimum of 85% of the Lagardère Group's net income in 2025.
* Provide clarity on the strategic objectives and growth plans for the Lagardère Group, including any potential acquisitions or divestments.

By outlining these specific strategies, Canal+, Havas, and Louis Hachette Group can help investors better understand their respective business models, financial prospects, and commitment to shareholder value. This should help to reassure investors and address the concerns raised in the article.



In conclusion, Vivendi's new 'galaxy' of companies needs more time to explain their strategies to convince investors that the break-up was worth it. By providing clear financial guidance, addressing governance concerns, and outlining specific growth plans, Canal+, Havas, and Louis Hachette Group can instill confidence in the market and unlock the full value of the spin-offs. As analysts and investors continue to monitor the situation, they should remain patient and give the newly independent companies the time they need to execute their strategies and deliver long-term value.