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Due to be floated on Sept. 21, the company
helps to promote and distribute boyband BTS and singers such as
Taylor Swift and Ariana Grande as well as making earnings from
rights.
Universal is already valued at around 33 billion euros ($38.80
billion), based on deals struck so far to sell off part of the
group to investors including U.S. billionaire William Ackman.
Vivendi will spin off 60% of the unit to its own shareholders as
part of the process.
Universal executives said at a capital markets day on Wednesday
that they expected 2021 revenue to grow by over 10% at constant
currencies, with earnings before interest, taxes, depreciation
and amortisation (EBITDA) rising over 20%.
That would mark a bounce from 2020, when annual sales reached
7.4 billion euros, up 4.7% on a comparable basis.
The company also said it would pay out half of its profits as
dividends in the medium term, although it did not detail when
payments would start.
Vivendi shares turned positive after the disclosures and were up
0.48% at the market close.
"I believe that we're at the beginning of a new cycle, a new
wave of growth," Chairman and Chief Executive Lucien Grainge
said.
Universal, which competes with rivals such as Warner and Sony,
reaps streaming revenues from subscription platforms such as
Spotify, with royalties flowing back to the artists it
represents.
It overcame a challenge to the music industry's model in the
2000s when online piracy was rife by leaning on paid downloads
and subscriptions, which have caught on.
Physical sales of records have also recovered this year after a
blip at the start of COVID-19 lockdowns in 2020, and Universal
is pushing ahead with new models, striking music licensing deals
with social media sites such as TikTok or in areas like video
games and fitness applications.
Vivendi, controlled by French billionaire Vincent Bollore, has
not ruled out share buybacks as a way to support Vivendi's stock
after the Universal initial public offering (IPO), which will
see it spin off its big cash cow.
Vivendi also owns pay-TV group Canal Plus, advertising group
Havas and publishing unit Editis.
($1 = 0.8504 euros)
(Reporting by Sarah White and Gwenaelle Barzic in Paris and Toby
Sterling in Amsterdam, Writing by Dominique Vidalon and Sarah
White; Editing by Benoit Van Overstraeten and Barbara Lewis)
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