Lagardere Sa · EURONEXT:MMB
Lagardere Sa — Investor Day (February 2005)
22 slides from Lagardere Sa's investor day presentation, February 2005
Slide 1: Lagardère Active: A focus on Radio
LAGARDERE ACTIVE A focus on Radio 1
Slide 2: Summary
SUMMARY ÎKey figures Î Radio in France z Advertising market z Competitive landscape z Europe 1 z Music radio stations (Europe 2 & RFM) z Perspectives Î Lagardere Active Radio International (LARI) 2
Slide 3: Key Figures
KEY FIGURES | 3 | LAGARDERE
Slide 4: Key figures
Key figures Î Lagardere Active – consolidated (in Euro millions) 2002 2003 Revenue 568,0 580,0 Operating income 14,0 27,0 Î Lagardere Active Broadcast – consolidated (in Euro millions) 2002 2003 Revenue 462,0 509,0 Operating income 23,3 32,4 Î Radio activities Revenue 272,0 287,4 var. 10,7% 5,7% Ope
Slide 5: Radio in France
RADIO IN FRANCE | 5 | LAGARDERE
Slide 6: Advertising market: revenue breakdown per media / country
Advertising market… revenue breakdown per media / country FRANCE : #1 radio market in Europe (along with the UK) Radio 26 % 19 % 26 % 14 % 15 % Television 16 % 21 % 30 % 21 % 12 % Consumer 21 % 32 % 27 % 14 % 6% Magazines Newspapers 12 % 31 % 31 % 13 % 13 % 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100
Slide 7: Advertising market... still very dynamic
Advertising market… still very dynamic Î Advertising revenue + 15 % for radios between 1999 and 2003 vs. + 12 % for TV and + 3 % for plurimedia Î Market share for radio growing from 7.0 % to 7.9 % of total plurimedia advertising revenue over the same period Radio advertising revenues in France 760 8
Slide 8: Advertising market... outlook
Advertising market… outlook Î2004 : + 4.8 % increase z Radio benefits from strong competitive advantages flexibility adressing advertisers’ demand for reactivity ability to provide measurable returns on ad spending (TV-like approach : agencies going for the cheapest GRP cost) Î 2005 : + 2.9 % in
Slide 9: Advertising market... trend
Advertising market… trend Annual growth rate Million euros 15% 1200 1000 10% 800 4.8% 5% 4.3% 2.9% 600 0% 400 -5% 200 -10% 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source : Ad Barometer (BIPE / Interdeco, sept. 2004) 9
Slide 10: Competitive landscape... a concentrated market
Competitive landscape … a concentrated market Î 13 networks attract more than 80 % of commercial radio audience … of which 10 owned by LAGARDERE + RTL + NRJ Female Young 20 25 30 35 40 45 50 55 Seniors Male 10
Slide 11: Europe 1... Lagardère's flagship radio station
11 (%) 5 6 7 8 9 10 11 12 se- oc- 96 no- de- 96 ja- ma- 97 av- jn- 97 se- oc- 97 no- de- 97 no- de- 98 se- oc- 98 av- jn- 98 ja- ma- 98 ja- ma- 99 av- jn- 99 se- oc- 99 no- de- 99 ja- ma- 00 (audience ratings 1996 – 2004) av- jn- 00 se- oc- 00 no- de- 00 Îan innovative ’’News & Talk’’ format ja- ma-
Slide 12: Europe 1... a strong franchise
EUROPE 1… a strong franchise ÎTargeting high education & high income audiences Î A unique blend of expertise, positioning and brand z a high barrier to entry z a kind of TF1 equivalent in the French radio landscape z a long lasting model 12
Slide 13: Europe 2 and RFM... improving profitability
EUROPE 2 and RFM… improving profitability Î National network, Europe 2 and RFM getting closer to filling the gap with main competitor NRJ OPERATING MARGIN - NATIONAL OPERATIONS 60% 50% 40% 30% 20% 10% 0% 2001 2002 2003 LAGARDERE ACTIVE FM NRJ GROUP 13
Slide 14: Radio in France... perspectives
Radio in France… perspectives Ϋ Paquet Telecom » new regulation Î TV ad market open to retail sector starting 2007 Î Additional regulatory changes to come … Î From analog to digital broadcasting 14
Slide 15: Lagardère Active Radio International (LARI)
(Mm \agardere active \ radio international (LARI) LAGARDERE
Slide 16: LARI - 18 stations in 7 countries
LARI - 18 stations in 7 countries… 27 million listeners every day Poland Czech Republic Germany Russia South Africa Romania Hungary Current & future EU members Others 16
Slide 17: Leadership positions
Leadership positions n° 2 in Russia (M) M Music N&T News&Talk n° 1 in South Africa (M) n° 2 in Poland (M, N&T) n°1 in Czech Republic (M, N&T) n° 1 in Sarreland (M) n°1 in Romania (M, N&T) Rank among private stations ∼ daily reach Monday to Friday LARI is tapping markets representing a potential of 2
Slide 18: A global approach for a multi-local strategy
A global approach for a multi-local strategy Î Lagardère’s industrial know-how z programming / marketing / network devlpt & mngt / sales organization ... a key competitive advantage to create and develop 100% local stations local brand local programming local management Î Ideally positioned fo
Slide 19: LARI's underlying profitability
LARI ‘s underlying profitability 2003 2003 2003 as reported proforma* 100% Operating margin 4,4% 8,4% 12,4% * Based on 2004 equity stake levels Major changes occured in 2004 : 9 Russia – Europa Plus, from 60% to 100% (consolidated proportionally before & globally from 2004) 9 South Africa – Radmark,
Slide 20: Strong drivers for short and long-term growth
Strong drivers for short and long-term growth TOP LINE Î Advertising growth prospects for the next 3 years + 11,4 % * for LARI vs. + 5,5% worldwide Î Advertising in its early stage (Russia…) => significant room for growth mid to long-term Î Organic growth opportunities (additional frequencies… 21 aw
Slide 21: Strong drivers for short and long-term growth: bottom line
Strong drivers for short and long-term growth BOTTOM LINE (margin expansion) ÎImplementation of best practices through internal benchmarking z LARI’s most profitable station : 55 % operating margin ! ÎAdditional local cost synergies through network extension z new frequencies & participation to mark
Slide 22: LARI outlook
LARI outlook LARI very well positioned for achieving double digit operating margin within the next 3 years 22