VIVENDI SE
Société Européenne

42, avenue de Friedland
75380 - PARIS Cedex 08_______________________________
Vivendi SE’s statutory auditors’ report on the review of Universal Music Group’sUnaudited Consolidated Condensed Financial Statements

March 31, 2021

ERNST & YOUNG et Autres

Deloitte & AssociésTour First – TSA 14444

6, place de la Pyramide

92037 Paris-La Défense cedex

92908 Paris-La Défense Cedex

S.A.S. à capital variable

S.A.S. au capital de 2 188 160 €438 476 913 R.C.S. Nanterre

572 028 041 RCS Nanterre

VIVENDI SE
Société Européenne

42, avenue de Friedland
75380 PARIS Cedex 08_______________________________
Vivendi SE’s statutory auditors’ report on the review of Universal Music Group’sUnaudited Consolidated Condensed Financial Statements

March 31, 2021_______________________________To the Management Board of Vivendi SE,

Introduction
At your request and in our capacity as statutory auditors of Vivendi SE, we have reviewed the accompanying Unaudited
Consolidated Condensed Financial Statements (“Financial Statements”) of Universal Music Group (“UMG”) as at March
31, 2021 prepared in the context of a partial divestiture by Vivendi SE of its music business.
Due to the global crisis related to the Covid-19 pandemic, the Financial Statements have been prepared and reviewed
under specific conditions. Indeed, this crisis and the exceptional measures taken in the context of the state of sanitary
emergency have had numerous consequences for companies, particularly on their operations and their financing, andhave led to greater uncertainties on their future prospects. Those measures, such as travel restrictions and remote
working, have also had an impact on the companies' internal organization and the performance of our review procedures
Universal Music Group’s Management is responsible for the preparation and presentation of these Financial Statementsin accordance with the basis set out in the Basis of preparation of the Unaudited Consolidated Condensed Financial
Statements.
Our responsibility is to express a conclusion on these Financial Statements based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, which applies to areview of interim financial information performed by the independent auditor of the entity. A review of Financial
Statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, andapplying analytical and other review procedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing and consequently does not enable us to obtain assurance that wewould become aware of all significant matters that might be identified in an audit. Accordingly, we do not express anaudit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying Financial
Statements are not prepared, in all material respects, in accordance with the basis set in the Basis of preparation of theUnaudited Consolidated Condensed Financial Statements.
Emphasis of matter
Without modifying our conclusion, we draw your attention to:
The note “Basis of preparation of the Unaudited Consolidated Condensed Financial Statements” which explains that the
Financial Statements of Universal Music Group for the first three months of 2021 ended March 31, 2021 “do not
represent a full set of financial statements with regards to IFRS as adopted by the European Union (EU) and IFRS as
published by the International Accounting Standards Board (IASB). Under these accounting standards, only a complete
set of financial statements comprising explanatory notes with comparative financial information including a statementof compliance of these accounting standards, give a true and fair view of the assets and liabilities of the financial positionof UMG for the first three months of 2021, and of the results of its operations for the period then ended”.

2 l VIVENDI SE l Vivendi SE’s statutory auditors’ report on the review of Universal Music Group’s Unaudited Consolidated Condensed Financial
Statements l March 31, 2021

This report shall be governed by and construed in accordance with French law. The courts of France shall have exclusive
jurisdiction in relation to any claim, dispute or difference concerning the engagement letter or this report, and any
matter arising from them. Each party irrevocably waives any right it may have to object to an action being brought inany of those courts, to claim that the action has been brought in an inconvenient forum or to claim that those courts do
not have jurisdiction.

Paris-La Défense, May 10, 2021
The Statutory Auditors
ERNST & YOUNG et Autres

Claire PAJONA

Deloitte & Associés

Thierry QUERON

Géraldine SEGOND

3 l VIVENDI SE l Vivendi SE’s statutory auditors’ report on the review of Universal Music Group’s Unaudited Consolidated Condensed Financial
Statements l March 31, 2021

Monday, May 10, 2021

Unaudited Consolidated Condensed Statements of:- Earnings;- Comprehensive Income;- Financial Position;- Cash Flows; and- Changes in Equity
for the first quarter ended March 31, 2021.

Monday May 10, 2021

Unaudited Consolidated Condensed Statement of Earnings(in millions of euros)
Revenues
Cost of revenues
Selling, general and administrative expenses
Restructuring charges
Impairment losses on intangible assets acquired through business combinations
Income from equity affiliates - operational
Earnings before interest and income taxes (EBIT)Interest
Income from investments
Other financial income
Other financial charges
Earnings before provision for income taxes
Provision for income taxes
Earnings from continuing operations
Earnings from discontinued operations
Earnings
Of which
Earnings attributable to shareowners
Non-controlling interests

First Quarter ended March 31,
2021
2020
1,809
1,769
(949)
(932)
(531)
(582)
(5)
(4)
(2)
(3)
322
248
(4)
(2)
1
7
(155)
(109)
(158)
(104)
164
144
(28)
(54)
136
90
136
90
135
1

89
1

Year ended
December 31, 2020
7,432
(3,917)(2,265)
(20)
(9)
1,221
(15)
603
(28)
560
1,781
(412)
1,369
1,369
1,366
3

Universal Music Group / 2

Monday May 10, 2021

Unaudited Consolidated Condensed Statement of Comprehensive Income(in millions of euros)

Earnings

First Quarter ended March 31,
2021
2020

Year ended
December 31, 2020

136

90

1,369

Actuarial gains/(losses) related to employee defined benefit plans, net
Financial assets at fair value through other comprehensive income
Comprehensive income from equity affiliates, net
Items not subsequently reclassified to profit or loss

-

25
25

6
2
8

Foreign currency translation adjustments
Comprehensive income from equity affiliates, net
Other impacts, net
Items to be subsequently reclassified to profit or loss

66
2
68

42
1
43

(194)
(6)
(200)

Charges and income directly recognized in equity

68

68

(192)

Total comprehensive income

204

158

1,177

Of which
Total comprehensive income attributable to shareowners
Total comprehensive income attributable to non-controlling interests

204
-

157
1

1,175
2

Universal Music Group / 3

Monday May 10, 2021

Unaudited Consolidated Condensed Statement of Financial Position
March 31, 2021

December 31, 2020

ASSETS
Goodwill
Non-current content assets
Other intangible assets
Property, plant and equipment
Rights-of-use relating to leases
Investments in equity affiliates
Non-current financial assets
Deferred tax assets
Non-current assets

1,406
3,567
257
416
72
1,767
395
7,880

1,369
3,512
1
254
416
72
1,962
414
8,000

Inventories
Current tax receivables
Current content assets
Trade accounts receivable and other
Current financial assets
Shareowners loans
Cash and cash equivalents
Current assets

84
1
699
1,061
5
764
451
3,065

79
1
677
1,088
1
815
326
2,987

TOTAL ASSETS

10,945

10,987

EQUITY AND LIABILITIESShare capital
Additional paid-in capital
Retained earningsof which earnings attributable to shareowners
Non-controlling interests
Total equity

18,47914,521(31,365)
135
1,635

na
na
1,432
1,366
1,432

Non-current provisions
Long-term borrowings and other financial liabilities
Shareowners borrowings
Deferred tax liabilities
Long-term lease liabilities
Other non-current liabilities
Non-current liabilities

340
1
2,368
769
451
743
4,672

335
1
2,368
828
447
851
4,830

Current provisions
Short-term borrowings and other financial liabilities
Trade accounts payable and other
Short-term lease liabilities
Current tax payables
Current liabilities

114
862
3,537
81
44
4,638

137
640
3,843
78
27
4,725

Total liabilities

9,310

9,555

TOTAL EQUITY AND LIABILITIES

10,945

10,987(in millions of euros)

na: not applicable.

Universal Music Group / 4

Monday May 10, 2021

Unaudited Consolidated Condensed Statement of Cash Flows(in millions of euros)
Operating activities
EBIT
Adjustments
Content investments, net
Gross cash provided by operating activities before income tax paid
Other changes in net working capital
Net cash provided by operating activities before income tax paid
Income tax (paid)/received, net
Net cash provided by operating activities
Investing activities
Capital expenditures
Purchases of consolidated companies, after acquired cash
Investments in equity affiliates
Increase in financial assets
Investments
Proceeds from sales of property, plant, equipment and intangible assets
Proceeds from sales of consolidated companies, after divested cash
Disposal of equity affiliates
Decrease in financial assets
Divestitures
Dividends received from equity affiliates
Dividends received from unconsolidated companies
Net cash provided by/(used for) investing activities
Financing activities
Distributions to shareowners
Other transactions with shareowners
Dividends paid by consolidated companies to their non-controlling interests
Transactions with shareowners
Setting up of long-term borrowings and increase in other long-term financial liabilities
Principal payment on long-term borrowings and decrease in other long-term financial liabilities
Principal payment on short-term borrowings
Other changes in short-term borrowings and other financial liabilities
Interest paid, net
Other cash items related to financial activities
Transactions on borrowings and other financial liabilities
Repayment of lease liabilities and related interest expenses
Net cash provided by/(used for) financing activities
Foreign currency translation adjustments of continuing operations
Change in cash and cash equivalents and shareowners loans
Cash and cash equivalents and shareowners loans
At beginning of the period

First Quarter ended March 31,
2021
2020

Year ended
December 31, 2020

322
41
(162)
201
(270)
(69)
(45)
(114)

248
49
(271)
26
(244)
(218)
(39)
(257)

1,221
213
(1,517)
(83)
287
204
(207)
(3)

(11)
(1)
(1)
(13)
19
19
1
7

(20)
1
(19)
1
1
(18)

(66)
(4)
(2)
(3)
(75)
11
1
15
27
2
(46)

(1)
(1)
199
(4)
(3)
192
(17)
174

(3)
(3)
391
(2)
(1)
388
(22)
363

(283)
(11)
(5)
(299)
625
(15)
(3)
607
(91)
217

8
75

(12)
76

(35)
133

1,141

1,008

1,008

At end of the periodof which Shareowners loans
At beginning of the period

1,215

1,084

1,141

815

672

672

At end of the periodof which Cash and cash equivalent
At beginning of the period

764

664

815

326

336

336

451

420

326

At end of the period

Universal Music Group / 5

Monday May 10, 2021

Unaudited Consolidated Condensed Statement of Changes in Equity
First Quarter ended March 31, 2021

(in millions of euros, except number of shares)

BALANCE AS OF DECEMBER 31, 2020
Attributable to Universal Music Group
Attributable to non-controlling interests

CapitalCommon shares
Number of
Share
shares (incapitalthousands)

Retained earnings and other

Additional
paid-in
capitalSubtotal

Retained earnings

Other comprehensive
incomeSubtotal

Total equity

-

-

-

-

1,915
1,914
1

(483)
(482)
(1)

1,432
1,432
-

1,432
1,432
-

1,847,874
1,847,874
1,847,874

18,47918,47918,47914,521
14,521
14,52133,00033,00033,000(33,000)(33,000)(33,000)-(33,000)(33,000)(33,000)-

Contributions by/(distributions to) non-controlling interests
Dividends paid by subsidiaries to non-controlling interests
CHANGES IN EQUITY ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (B)

-

-

-

-

(1)
(1)
(1)

-

(1)
(1)
(1)

(1)
(1)
(1)

Earnings
Charges and income directly recognized in equity
TOTAL COMPREHENSIVE INCOME (C)

-

-

-

-

136
136

68
68

136
68
204

136
68
204

TOTAL CHANGES OVER THE PERIOD (A+B+C)
Attributable to Universal Music Group
Attributable to non-controlling interests

1,847,874
1,847,874-

18,47918,479-14,521
14,521-33,00033,000-(32,865)(32,865)
-

68
68
-

(32,797)(32,797)
-

203
203
-

BALANCE AS OF MARCH, 31, 2021
Attributable to Universal Music Group
Attributable to non-controlling interests

1,847,874
1,847,874-

18,47918,479-14,521
14,521-33,00033,000-(30,950)(30,951)
1

(415)
(414)
(1)

(31,365)(31,365)
-

1,635
1,635
-

Contributions by/(distributions to) shareowners
Contributions by shareowners of their UIM B.V. and UMG Inc. shares to UMG B.V.
Changes in UMG ownership interest in subsidiaries that do not result in a loss of control
CHANGES IN EQUITY ATTRIBUTABLE TO UNIVERSAL MUSIC GROUP (A)Universal Music Group / 6

Monday May 10, 2021
First Quarter ended March 31, 2020

Retained earnings and otherTotal equity

Retained earnings

Other comprehensive
incomeBALANCE AS OF DECEMBER 31, 2019
Attributable to Universal Music Group
Attributable to non-controlling interests

3,275
3,272
3

(291)
(290)
(1)

2,984
2,982
2

Contributions by/(distributions to) shareowners
Universal Music Group S.A.S. transferred to Vivendi SE
CHANGES IN EQUITY ATTRIBUTABLE TO UNIVERSAL MUSIC GROUP (A)(2,428)(2,428)(2,428)-(2,428)(2,428)(2,428)Contributions by/(distributions to) non-controlling interests
Dividends paid by subsidiaries to non-controlling interests
CHANGES IN EQUITY ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (B)

(3)
(3)
(3)

-

(3)
(3)
(3)

Earnings
Charges and income directly recognized in equity
TOTAL COMPREHENSIVE INCOME (C)

90
(1)
89

69
69

90
68
158

TOTAL CHANGES OVER THE PERIOD (A+B+C)
Attributable to Universal Music Group
Attributable to non-controlling interests(2,342)(2,340)
(2)

69
69
-

(2,273)(2,271)(2)

BALANCE AS OF MARCH, 31, 2020
Attributable to Universal Music Group
Attributable to non-controlling interests

933
932
1

(222)
(221)
(1)

711
711
-

(in millions of euros)

Universal Music Group / 7

Monday May 10, 2021

Year ended December 31, 2020
(in millions of euros)

Retained earnings and other
Retained earnings

Other comprehensive income

Total equity

BALANCE AS OF DECEMBER 31, 2019
Attributable to Universal Music Group
Attributable to non-controlling interests

3,275
3,272
3

(291)
(290)
(1)

2,984
2,982
2

Contributions by/(distributions to) shareownersof which Universal Music Group S.A.S. transferred to Vivendi SEof whichDistribution by Universal International Music B.V. paid to shareowners
Changes in UMG ownership interest in subsidiaries that do not result in a loss of control
CHANGES IN EQUITY ATTRIBUTABLE TO UNIVERSAL MUSIC GROUP (A)(2,711)(2,428)(283)(13)(2,724)-(2,711)(2,428)(283)(13)(2,724)

(5)
(5)
(5)

-

(5)
(5)
(5)

Earnings
Charges and income directly recognized in equity
TOTAL COMPREHENSIVE INCOME (C)

1,369
1,369

(192)
(192)

1,369
(192)
1,177

TOTAL CHANGES OVER THE PERIOD (A+B+C)
Attributable to Universal Music Group
Attributable to non-controlling interests(1,360)(1,358)
(2)

(192)
(192)
-

(1,552)(1,550)(2)

BALANCE AS OF DECEMBER 31, 2020
Attributable to Universal Music Group
Attributable to non-controlling interests

1,915
1,914
1

(483)
(482)
(1)

1,432
1,432
-

Contributions by/(distributions to) non-controlling interests
Dividends paid by subsidiaries to non-controlling interests
CHANGES IN EQUITY ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (B)

Universal Music Group / 8

Monday May 10, 2021

Note to the Consolidated Condensed Financial Statements
Universal Music Group (UMG) is the world leader in music-based entertainment, with a broad array of businesses engaged in recorded music,
music publishing, merchandising and audiovisual content in more than 60 countries. Featuring the most comprehensive catalog of recordings
and songs across every musical genre, UMG identifies and develops artists and produces and distributes the most critically acclaimed andcommercially successful music in the world. Committed to artistry, innovation and entrepreneurship, UMG fosters the development of services,
platforms and business models in order to broaden artistic and commercial opportunities for its artists and create new experiences for fans.
The Consolidated condensed Financial Statements present the financial and accounting situation of UMG together with interests in equity
affiliates. Amounts are reported in euros and all values are rounded to the nearest million.
On May 10, 2021, at a meeting held at the headquarters of the company, the Board of Directors of UMG B.V. approved the Unaudited
Consolidated Condensed Financial Statements for the three months ended March 31, 2021.

Basis of preparation of the Unaudited Consolidated Condensed Financial Statements
The Unaudited Consolidated Condensed Financial Statements (as defined below) of Universal Music Group (as defined below) for the first
three months of 2021 have been prepared by Vivendi SE (“Vivendi”) in its capacity as the controlling shareholder of Universal Music Group B.V.
(“UMG B.V.”) and its subsidiaries Universal Music Group Inc. (“UMG Inc.”) and Universal International Music B.V. (“UIM B.V.”) pursuant to
Section 7.04. Information and Inspection Rights. of UMG B.V. Shareholders Agreement.
On February 26, 2021, Vivendi and the consortium led by Tencent contributed their respective 80% and 20% shares in both UIM B.V. and UMG
Inc. to UMG B.V. Following this contribution, Vivendi and Tencent respectively own 80% and 20% of UMG B.V., which owns 100% of UIM B.V.
and 100% of UMG Inc.
The Unaudited Consolidated Condensed Financial Statements comprise the Consolidated Condensed Statements of:






Earnings;
Comprehensive Income;Financial Position;
Cash Flows; andChanges in Equity.

As such, the Consolidated Condensed Financial Statements of UMG for the first three months of 2021 do not represent a full set of financial
statements with regards to International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and IFRS as publishedby the International Accounting Standards Board (IASB). Under these accounting standards, only a complete set of financial statements
comprising explanatory notes with comparative financial information including a statement of compliance of these accounting standards, givea true and fair view of the assets and liabilities of the financial position of UMG for the first three months of 2021, and of the results of its
operations for the period then ended.
The Consolidated Condensed Financial Statements of UMG have been drawn up based on the accounting data of UMG B.V. and its subsidiaries
for the first three months of 2021. Except as described above, they are presented and have been prepared in accordance with IAS 34 – Interim
Financial Reporting as endorsed by the European Union (EU) and published by the IASB, with mandatory application as of March 31, 2021.
Amendments to IFRS standards applicable as from January 1, 2021, had no material impact on UMG’s Consolidated Condensed Financial
Statements, notably the amendments to the IFRS 9 – Financial Instruments, IFRS 7 – Financial Instruments: Disclosures, and IFRS 16 – Leases
standards which relate to the Interest Rate Benchmark Reform (Phase 2).
As a reminder, UMG applied IFRS 16 with retrospective effect as from January 1, 2019 without restating comparative periods in the combined
financial statements. In accordance with IFRS 16, the impact of the change of accounting standard was recorded by UMG in the opening
balance sheet as of January 1, 2019; moreover, UMG applied this change of accounting standard to the Statement of Financial Position,
Statement of Earnings and Statement of Cash Flows in 2019.
As a reminder, in 2018, UMG applied two new accounting standards:
 IFRS 15 – Revenue from contracts with customers: in accordance with IFRS 15, as from 2017, UMG applied this change of accounting
standard to revenues; and IFRS 9 – Financial instruments: in accordance with IFRS 9, as from 2018, UMG applied this change of accounting standard to theStatement of Earnings and Statement of Comprehensive Income restating its opening balance sheet as of January 1, 2018.

Universal Music Group / 9

Monday May 10, 2021
Vivendi is a European company, which since January 7, 2020, has been subject to the provisions of French commercial company law that are
applicable to it in France, including the Council Regulation EC No. 2157/2001 of October 8, 2001 on the statute for a European company andthe French Commercial Code (Code de commerce).
UMG B.V. is a private limited company having its official seat in the Netherlands, which since February 26, 2021, is subject to the provisionsof the Dutch commercial company law that are applicable to it in the Netherlands.
Context
On December 31, 2019, Vivendi and a Tencent-led consortium, which includes Tencent Music Entertainment and other financial co-investors,
entered into an agreement for a planned equity investment in Universal Music Group (UMG). This agreement provides for:

the purchase by this consortium of 10% of UMG’s share capital, based on an enterprise value of €30 billion for 100% of UMG’sshare capital; andan option for this consortium to acquire, on the same valuation basis, an additional interest of up to 10% of UMG’s share capital
until January 15, 2021.

Sale of a first tranche of 10% of Universal Music Group’s share capital
On March 31, 2020, Vivendi completed the sale of 10% of UMG’s share capital to a Tencent-led consortium. This transaction resulted in a cash
inflow of €2,842 million for Vivendi.
Sale of a second tranche of 10% of Universal Music Group’s share capital
On December 17, 2020, the consortium decided to exercise the option to acquire an additional 10% of UMG.
On January 29, 2021, Vivendi completed the sale of the additional 10% of UMG’s share capital to a Tencent-led consortium, based on an
enterprise value of €30 billion for 100% of UMG’s share capital. This transaction resulted in a cash inflow of €2,847 million for Vivendi.
As from this date, the Tencent-led consortium owns 20% of UMG.
Planned distribution of 60% of Universal Music Group’s share capital and its listing on the stock market
On February 13, 2021, Vivendi announced that it will study the planned distribution of 60% of UMG’s share capital and its listing by the end of
2021. This distribution, exclusively in kind, would take the form of an exceptional distribution (“special dividend”). The listing of UMG’s shares,
issued by its holding company, would be applied for on the regulated market of Euronext NV in Amsterdam, in a country that has been one of
UMG’s historical homes.
As part of the deal signed in December 2019, Vivendi and the consortium led by Tencent agreed upon a reorganization of the shareholding
structure under a unique holding “UMG B.V.”. On February 26, 2021, Vivendi and the consortium led by Tencent contributed their respective
80% and 20% shares in both UIM B.V. and UMG Inc. to UMG B.V. based on an equity value of €33 billion for 100% of UMG’s share capital.
On March 29, 2021, a Vivendi Extraordinary Shareholders’ Meeting was called to modify the company’s by-laws and make the principle of this
distribution in kind possible and pursue this project. Following the approval by 99.98% positive votes at the Extraordinary General Meeting ofMarch 29, 2021, of an amendment to the company's by-laws, which now allows Vivendi to distribute dividends or interim dividends, reserves
or premiums by way of the delivery of assets in kind, including financial securities, Vivendi will ask its shareholders at the Annual Shareholders'Meeting to be held on June 22, 2021, to adopt a position on the plan to make an exceptional distribution in kind in the form of UMG shares to
its shareholders, with completion expected in fall 2021.
Minority interest in Universal Music Group’s operations in China
In addition, a separate agreement was entered into on March 31, 2020, enabling Tencent Music Entertainment to acquire a minority interestin the share capital of the UMG’s subsidiary that owns its Greater China operations.
Scope of combination/consolidation
Until February 25, 2021, the arrangement that constituted the combined UMG group was not a legal entity in its own right and was made up
of entities under the common control of Vivendi. Until this date, UMG principally comprised the entities held directly and indirectly by UMG
Inc. and UIM B.V.
On February 26, 2021, Vivendi and the consortium led by Tencent contributed their respective 80% and 20% shares in both UIM B.V. and UMG
Inc. to UMG B.V. based on an equity value of €33 billion for 100% of UMG’s share capital. Following this contribution, Vivendi and Tencent
respectively own 80% and 20% of UMG B.V. which own 100% of UIM B.V. and 100% of UMG Inc. without any change on UMG’s scope of
combination/consolidation.
The reorganization of the shareholding structure having no impact on UMG’s scope of combination/consolidation, the Unaudited Consolidated
Condensed Financial Statements of Universal Music Group combine the same like items of assets, liabilities, equity, income, expenses andUniversal Music Group / 10

Monday May 10, 2021
cash flows of the parent with those of its subsidiaries in both the combined financial statements before this transaction and the consolidated
financial statements after this transaction, in accordance with IFRS 10.B86(a). Hence, UMG’s net equity remains unchanged before and after
the contribution.
As such, following the principle of continuity of financial statements, on February 26, 2021, in UMG B.V.’s Consolidated Financial Statements,
the contribution of €33 billion was directly recorded as an increase in equity attributable to UMG B.V. shareowners (€18.5 billion in sharecapital and €14.5 billion in additional paid-in capital), and the contribution of €33 billion was fully neutralized in UMG B.V.’s retained earnings.
Core Business
UMG is the worldwide leader in music, engaged in recorded music, music publishing and merchandising. It owns more than 50 labels covering
all music genres. UMG is home to the greatest local and international artists of all time, including The Beatles, Rolling Stones, U2, Andrea
Bocelli, Lady Gaga, Helene Fischer and more, as well as many of the biggest artists of the year, such as The Weeknd, Billie Eilish, Post Malone,
and Taylor Swift.
 The recorded music business discovers and develops recording artists, marketing and promoting their music across a wide array offormats and platforms. Its activities also extend to other areas, such as live events, sponsorship, film and television.
 The music publishing business discovers and develops songwriters and owns and administers the copyright for musical compositions
used in recordings, public performances and related uses, such as films and advertisements.
 The merchandising business produces and sells artist-branded and other branded products through multiple sales channels, including
fashion retail, concert touring and the Internet. Its activities also extend to other areas, such as brand rights management.
Accounting conventions used when preparing the historical combined financial statements
As a reminder, as a first-time adopter, Combined Financial Statements were prepared for UMG for the fiscal years ended December 31, 2018,2017 and 2016 in accordance with IFRS 1 – First-Time Adoption of International Financial Reporting Standards. In accordance with IFRS 1.D16,
if a subsidiary adopts IFRS later than its parent company, the assets and liabilities in the subsidiary’s opening balance sheet may be measured
as either: the carrying amounts based on the subsidiary’s contribution to the parent company’s historical consolidated financial statements, after
restating adjustments relating to the consolidation procedures and to the accounting for the business combination in which the parent
acquired the subsidiary; or the carrying amounts as determined in accordance with IFRS 1, applied at the date of the subsidiary’s transition to IFRS. In this case,the options in IFRS 1 applied by the subsidiary may differ from those applied by the parent.
Pursuant to the option provided in IFRS 1, UMG’s first IFRS combined financial statements were prepared by measuring its assets and liabilities
at the carrying amounts, based on UMG’s contribution to Vivendi’s historical financial statements, after eliminating adjustments relating to its
consolidation by the Vivendi Group and to the impacts of accounting for the business combinations pursuant to which Vivendi acquired interests
in UMG Inc. and UIM B.V. and their subsidiaries. As of January 1, 2016, the net book value of the goodwill arising from Vivendi’s acquisitionof UMG in December 2000 (€3,756 million) as well as the related cumulative translation adjustment (CTA) as of December 31, 2016, 2017 and2018 (+€177 million, -€328 million and -€156 million, respectively), and as of December 31, 2019 and 2020 (-€70 million and -€417 million,
respectively) and as of March 31, 2020 and 2021 (-€9 million and -€327 million, respectively), were reversed through adjustments to retained
earnings.
The scope of combination excludes as from January 1, 2016 Vivendi Holding I LLC (“VH I”), which was wholly-owned by UMG Inc. until the endof 2018 but had no impact on UMG’s contribution to Vivendi’s Statement of Financial Position. Therefore, these Combined Financial Statements
eliminate the statement of income impacts for the years ended December 31, 2018, and 2017 relating to: the interest expense on a borrowing granted by VH I to UMG Inc.; and the related income tax effects, if any.
The scope of combination also excludes as from March 19, 2020 Universal Music Group S.A.S. (“UMG S.A.S.”), which was merged into Vivendi
S.E. as of that date.
Intercompany transactions between UMG and other Vivendi Group’s entities
Balances pertaining to current transactions between UMG entities and other entities in the Vivendi Group have been presented on the balance
sheet as third-party assets or liabilities in the Consolidated Condensed Financial Statements. All loans and borrowings between UMG entities
and other Vivendi Group entities have been presented as financial assets or liabilities in the Consolidated Condensed Financial Statements.

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Monday May 10, 2021
Translation of financial statements of foreign companies
Pursuant to IFRS 1.D13, in the Combined Financial Statements, the cumulative translation adjustment (CTA) accounted for in othercomprehensive income (to be subsequently reclassified to profit or loss) was set to zero as of January 1, 2016. Therefore, the gain or loss on
a subsequent disposal of any foreign operation of the consolidated UMG only includes translation differences recorded since January 1, 2016.
Except as described above, no adjustment was made in UMG’s Consolidated Condensed Financial Statements to UMG’s contribution toVivendi’s historical financial statements.

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