French media and telecom group Vivendi posted on Wednesday an 18% rise in adjusted full-year net profit, as its Universal Music Group division reported revenues up slightly.

The parent group made a full-year net adjusted profit of €2.614 billion ($3.43 billion), pulled along by its Maroc Telecom subsidiaries and its games, French mobile and pay-TV units. The result was in-line with analysts' forecasts. In 2005, the corresponding figure was €2.218 billion ($2.9 billion).

Group revenue rose 2.9% to €20.04 billion ($26 billion).

Vivendi also raised its dividend 20% to €1.20 ($1.50) a share for the year 2006.

The group confirmed its 2007 and 2011 target of adjusted net profit of at least €2.7 billion ($3.54 billion) and between €3.5 billion ($4.6 billion) and €4 billion ($5.2 billion), respectively.

UMG posted sales of €4.955 billion ($6.51 billion), up 1.3% on the previous year. Revenues for 2007 are expected to remain stable or slightly growing -- excluding the potential income from BMG Publishing.

The company highlighted bestselling album titles from U2, Andrea Bocelli, Snow Patrol, Nelly Furtado, the Killers, and solid carryover sales from The Pussycat Dolls.

In a press conference held this morning (March 7) in Paris, Vivendi chairman of the management board and CEO Jean-Bernard Lévy said, "UMG is currently in a transition phase but will contribute to the group's growth targeted for 2011."

Levy said UMG's strategy is to diversify revenue streams, naming several business models tested lately such as subscription or advertising-based services and expressing high hopes on digital.

UMG's digital revenue rose 84% year-on-year to approximately €500 million ($657.39 million), accounting for 10% of the music major's revenue. Internet accounting for "a bit more than 50%" of UMG's digital revenue, the company said. The precise balance between mobile and Internet income, however, was not broken out.

Levy rejected the possibility of a slowdown of digital music growth, saying early 2007 results showed a revenue increase of 50% year-on-year for UMG.

The group is also planning to expose its artists in a growing variety of media, including TV and mobile. Levy unveiled the launch of a music-based Internet television in 2007, on which Vivendi is working with P2P company Joost. Further details would not be unveiled.

Levy finally said the 2006 acquisition of BMG Music Publishing and of labels Vale Music in Spain and Arsenal Music in Brazil was part of UMG's revenue diversification strategy. "The acquisition of BMG Publishing would double our size on the publishing market," he said. "We are still waiting for the go ahead of European competition authorities."

During the press conference, Vivendi also announced that CFO Jacques Espinasse would retire at the end of April and be replaced by Philippe Capron, who joined the company in January.

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