Vivendi's annual profit rises on strong music revenue

* Group EBITA up 23 pct in 2017

* Music accounts for three-quarters of op profit

* No plan to list UMG, but still an option - CEO

* Ad unit Havas reports fall in underlying sales (Recasts story, adds details, background)

By Mathieu Rosemain and Gwénaëlle Barzic

PARIS, Feb 15 (Reuters) - Vivendi's music unit lifted group profit last year, offsetting a downturn in its recently-acquired advertising unit Havas and the continuing recovery of its pay-TV division, the group said on Thursday.

The French media giant, led by Chairman and biggest shareholder Vincent Bollore, benefited from a shift in the music industry towards paid streaming services and subscriptions revenue through licensing deals signed with online platforms such as Spotify and Tencent.

Universal Music Group (UMG) accounted for more than three-quarters of the group's core operating profit in 2017, which jumped 23 percent at constant currency and perimeter to 987 million euros ($1.23 billion), helped by the release of records by global stars Sam Smith, U2 and Taylor Swift.

The strong performance by UMG has fuelled speculation about a stock listing and contributed to the rise of Vivendi's shares, which are up 31 percent over the last 12 months, outperforming the Stoxx Europe 600 Media Index.

"We keep on repeating that there s no plan yet as regard to any kind of listing (of UMG)," Chief Executive Arnaud de Puyfontaine said in a call with analysts.

"We keep that possibility as an option," he added.

CANAL PLUS RECOVERY

Vivendi's pay-TV group Canal Plus showed the first signs of a recovery following a 300 million-euro cost cutting plan and a reshuffle of its commercial offering in France, where it lost more than 115,000 individual subscribers in 2017.

In contrast to the two previous years, Vivendi did not release financial figures for Canal Plus in France. Losses for this sub-business alone cut 399 million euros from the group's core operating profit in 2016.

Chief Financial Officer Herve Philippe said there was still room for further cost savings at Canal Plus, without elaborating.

The division was the only one to provide a target for 2018, aiming to generate 450 million euros in earnings before interest, tax and amortisation (EBITA).

Vivendi's group performance contrasted with the downturn at its advertising unit Havas, which was absorbed last year for a total of 3.9 billion euros.

The division, led by Bollore's son Yannick, suffered from a challenging market, leading to a fall in annual underlying sales of 0.8 percent. Operating profit margins fell to 11.2 percent from 14.5 percent.

The workforce and salaries will have to adapt to the new situation, Phillipe said.

Vivendi said it would raise its dividend by 12.5 percent to 0.45 euros per share. ($1 = 0.8017 euros) (Reporting by Mathieu Rosemain and Gwenaelle BarzicEditing by Sudip Kar-Gupta)