Lagardere Sa · EURONEXT:MMB

Lagardere Sa — Lagardère SCA — H1 2014 Earnings Presentation

62 slides from Lagardere Sa's earnings presentation, Jul 31, 2014

  1. Slide 1: 2014 First-Half Results

    2014 FIRST-HALF RESULTS JULY 31, 2014

  2. Slide 2: Disclaimer

    2014 FIRST-HALF RESULTS / JULY 31, 2014 DISCLAIMER Certain statements contained in this document are forward-looking statements (including objectives and trends), which address our vision of the financial condition, results of operations, strategy, expected future business and financial performance

  3. Slide 3: Contents

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CONTENTS Key performance figures pages 4 to 6 Performance by division pages 7 to 16 Group financial results pages 17 to 25 Appendices to consolidated accounts pages 26 to 37 Significant events pages 38 to 61 3

  4. Slide 4: Key Performance Figures

    KEY PERFORMANCE FIGURES

  5. Slide 5: Changes of Scope: Main Items

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CHANGES OF SCOPE: MAIN ITEMS  Lagardère Publishing • Acquisition of UK book publisher Constable & Robinson. Full consolidation starting January 31, 2014. • Acquisition of UK book publisher Quercus, to be fully consolidated in the second half of the year. • Si

  6. Slide 6: Key Figures – Group

    2014 FIRST-HALF RESULTS / JULY 31, 2014 KEY FIGURES – GROUP H1 H1 Reported Like-for-like (€m) 2013 2014 change change* Net sales 3,406 3,364 -1.2% -2.6% Recurring EBIT before associates** 105 113 +7.6% Profit (loss) – Group share 1,483 (33) -€1,516m Adjusted net profit – Group share 33 33 = Net cash

  7. Slide 7: Performance by Division

    PERFORMANCE BY DIVISION

  8. Slide 8: Lagardère Publishing: Activity

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE PUBLISHING: ACTIVITY H1 2014 net sales by geographical area H1 2014 net sales by activity Other Other Education 20% 17% 13% 18%* 16%* 14%* France 30% Illustrated Spain 32%* Partworks books 5% 14% 14% 6%* 13%* 14%* US & UK & Canada Australia General 2

  9. Slide 9: Lagardère Publishing: Focus on E-book

    2013 Full-Year Results / March 12, 2014 2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE PUBLISHING: FOCUS ON E-BOOK  As expected, the pace of digital transition has slowed down: e-books accounted for 11.3% of sales in H1 2014 (unchanged vs. H1 2013).  Digital for the time being essentially limit

  10. Slide 10: Lagardère Publishing: Profitability

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE PUBLISHING: PROFITABILITY (€m) H1 2013 H1 2014 Change Net sales (a) 917 903 -1.5% Recurring EBIT before associates (b) 71 51 -€20m Operating margin (b)/(a) 7.7% 5.6% -2.1 pts Income from associates 1 1 Non-recurring/non-operating items (12) (5) EBIT

  11. Slide 11: Lagardère Services: Activity

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE SERVICES: ACTIVITY H1 2014 net sales by geographical area H1 2014 net sales by activity US & Asia & Canada Australia 6% 8% Wholesale 6%* 8%* Other Distribution Eastern 10% 22% Europe 6%* 23%* 17% 20%* 37% 63% Switzerland 41%* 59%* 10% France Integrat

  12. Slide 12: Lagardère Services: Profitability

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE SERVICES: PROFITABILITY (€m) H1 2013 H1 2014 Change Net sales (a) 1,814 1,852 +2.1% Recurring EBIT before associates (b) 29 36 +€7m Operating margin (b)/(a) 1.6% 1.9% +0.3 pt Income from associates 2 3 Non-recurring/non-operating items (41) (24) EBIT

  13. Slide 13: Lagardère Active: Activity

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE ACTIVE: ACTIVITY H1 2014 net sales by geographical area H1 2014 net sales by activity International 14% Radio 13%* 23% 21%* Press & France other 86% 60% Television 60%* 87%* 17% 19%*  H1 2014 net sales: €435m (-10% like-for-like). • The decrease in

  14. Slide 14: Lagardère Active: Profitability

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE ACTIVE: PROFITABILITY (€m) H1 2013 H1 2014 Change Net sales (a) 471 435 -7.7% Recurring EBIT before associates (b) 33 35 +€2m Operating margin (b)/(a) 7% 8% +1 pt Income from associates (5) (4) Non-recurring/non-operating items (274) (9) EBIT (246) 2

  15. Slide 15: Lagardère Unlimited: Activity

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE UNLIMITED: ACTIVITY H1 2014 net sales by geographical area H1 2014 net sales by activity Rest of France World 15% Other Media rights 20% 12%* 22% 24% 22%* 14%* 40%* Asia & Germany Australia 29% 19% 26%* 17%* Marketing Rest of rights Europe UK 54% 9%

  16. Slide 16: Lagardère Unlimited: Profitability

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE UNLIMITED: PROFITABILITY (€m) H1 2013 H1 2014 Change Net sales (a) 204 174 -14.6% Recurring EBIT before associates (b) 5 6 +€1m Operating margin (b)/(a) 2.4% 3.6% +1.2 pt Income from associates - 1 Non-recurring/non-operating items (7) (10) EBIT (2)

  17. Slide 17: Group Financial Results

    GROUP FINANCIAL RESULTS

  18. Slide 18: Consolidated Income Statement (1/2)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CONSOLIDATED INCOME STATEMENT (1/2) (€m) H1 2013 H1 2014 Net sales 3,406 3,364 Total recurring EBIT before associates* 105 113 Media activities 138 128 Other activities (33) (15) Income from associates** (2) 1 Non-recurring/non-operating items 1,489 (47) Restr

  19. Slide 19: Consolidated Income Statement (2/2)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CONSOLIDATED INCOME STATEMENT (2/2) (€m) H1 2013 H1 2014 EBIT 1,592 67 Net interest expense (55) (38) Profit before tax 1,537 29 Income tax expense (46) (58) Total net profit (loss) 1,491 (29) Attributable to minority interests (8) (4) Profit (loss) – Group sh

  20. Slide 20: Adjusted Net Income – Group Share

    2014 FIRST-HALF RESULTS / JULY 31, 2014 ADJUSTED NET INCOME – GROUP SHARE (€m) H1 2013 H1 2014 Net profit (loss) attributable to the Group 1,483 (33) Amortisation of acquisition-related intangible assets and other acquisition-related expenses* +10 +17 Impairment losses on goodwill, tangible and inta

  21. Slide 21: Consolidated Statement of Cash Flows

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CONSOLIDATED STATEMENT OF CASH FLOWS (€m) H1 2013 H1 2014 Cash flow from operations before interest, taxes 178 136 Changes in working capital (91) (201) Cash flow from operations 87 (65) Interest paid & received, income taxes paid (98) (61) Cash generated by/(

  22. Slide 22: Change in Net Debt in H1 2014

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CHANGE IN NET DEBT IN H1 2014 €361m -€391m -€959m -€102m (€1091m) Net cash as of Net cash from Dividends Foreign exchange, Net debt 31/12/2013 operating & paid scope and as of investing activities other items 30/06/2014 22

  23. Slide 23: Consolidated Balance Sheet

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CONSOLIDATED BALANCE SHEET (€m) Dec. 31, 2013 June 30, 2014 Non-current assets (excl. investments in associates) 3,579 3,856 Investments in associates 152 154 Current assets (other than short-term investments and cash) 2,817 2,797 Short-term investments and ca

  24. Slide 24: Sound Financial Position

    2014 FIRST-HALF RESULTS / JULY 31, 2014 SOUND FINANCIAL POSITION €2,184m Gross debt breakdown: Preservation of liquidity and well-balanced funding sources Authorised balanced debt repayment schedule credit lines**: €1,645m €1094m*** 14% in 2013 25% Bonds Bank loan €495m 75% et other Treasury*: €539m

  25. Slide 25: Recurring Media EBIT: H1 Performance & 2014 Guidance

    2014 FIRST-HALF RESULTS / JULY 31, 2014 RECURRING MEDIA EBIT: H1 PERFORMANCE & 2014 GUIDANCE  The H1 2014 Recurring media EBIT trend was expected, due to a strong H1 2013: • -7.0% at current exchange rates; • -5.9% at constant exchange rates.  Confirmation of the 2014 FY guidance on recurring Medi

  26. Slide 26: Appendices to Consolidated Accounts

    APPENDICES TO CONSOLIDATED ACCOUNTS

  27. Slide 27: Group Profile – H1 2014

    2014 FIRST-HALF RESULTS / JULY 31, 2014 GROUP PROFILE – H1 2014 Net sales by division Recurring EBIT by division Lagardère Lagardère Unlimited Unlimited 5% 5% Lagardère Lagardère Lagardère Active Publishing Publishing 13% 27% Lagardère 40% Active 27% Lagardère Lagardère Services Services 28% 55% Net

  28. Slide 28: Recap of Media Performance by Division

    2014 FIRST-HALF RESULTS / JULY 31, 2014 RECAP OF MEDIA PERFORMANCE BY DIVISION  Net sales (€m) H1 2014 net Reported Reported Like-for-like sales €m change change change* Lagardère Publishing 903 -€14m -1.5% -1.0% Lagardère Services 1,852 +€38m +2.1% -0.1% Lagardère Active 435 -€36m -7.7% -10.0% Lag

  29. Slide 29: Analysis of Non-Recurring/Non-Operating Items in H1 2014

    2014 FIRST-HALF RESULTS / JULY 31, 2014 ANALYSIS OF NON-RECURRING/NON-OPERATING ITEMS IN H1 2014 Total Lagardère Lagardère Lagardère Lagardère Lagardère Other Total (€m) Publishing Services Active Unlimited Media activities Lagardère Restructuring costs (3) (10) (5) (4) (22) - (22) Gains/(losses) on

  30. Slide 30: Main Associates

    2014 FIRST-HALF RESULTS / JULY 31, 2014 MAIN ASSOCIATES Balance Sheet Income Statement 2013 2014 2013 2014 (as of (as of (as of (as of (€m) 31/12/2013) 30/06/2014) 30/06/2013) 30/06/2014) Marie Claire (42%) 90 90 - - Other associates 62 64 (2) 1 Total before impairment losses 152 154 (2) 1 Impairmen

  31. Slide 31: Cash Flow Statement Data – Lagardère Publishing

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CASH FLOW STATEMENT DATA – LAGARDÈRE PUBLISHING (€m) H1 2013 H1 2014 Cash flow from operations before interest, taxes 77 53 Changes in working capital (95) (154) Cash flow from operations (18) (101) Interest paid & received, income taxes paid (28) (22) Cash ge

  32. Slide 32: Cash Flow Statement Data – Lagardère Services

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CASH FLOW STATEMENT DATA – LAGARDÈRE SERVICES (€m) H1 2013 H1 2014 Cash flow from operations before interest, taxes 54 60 Changes in working capital (42) (52) Cash flow from operations 12 8 Interest paid & received, income taxes paid (13) (11) Cash generated b

  33. Slide 33: Cash Flow Statement Data – Lagardère Active

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CASH FLOW STATEMENT DATA – LAGARDÈRE ACTIVE (€m) H1 2013 H1 2014 Cash flow from operations before interest, taxes 27 16 Changes in working capital (20) (10) Cash flow from operations 7 6 Interest paid & received, income taxes paid (27) (10) Cash generated by/(

  34. Slide 34: Cash Flow Statement Data – Lagardère Unlimited

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CASH FLOW STATEMENT DATA – LAGARDÈRE UNLIMITED (€m) H1 2013 H1 2014 Cash flow from operations before interest, taxes 44 17 Changes in working capital 56 31 Cash flow from operations 100 48 Interest paid & received, income taxes paid (3) (4) Cash generated by/(

  35. Slide 35: Off Balance Sheet Commitments

    2014 FIRST-HALF RESULTS / JULY 31, 2014 OFF BALANCE SHEET COMMITMENTS (€m) 2013 H1 2014 Commitments to purchase shares from third parties - - (other than minority interests) Commitments given in connection with ordinary activities: - contract guarantees and performance bonds 143 174 - guarantees in

  36. Slide 36: Lagardère Unlimited – Guaranteed Minimum Payments

    2014 FIRST-HALF RESULTS / JULY 31, 2014 LAGARDÈRE UNLIMITED – GUARANTEED MINIMUM PAYMENTS  At June 30, 2014 entities forming part of Lagardère Unlimited had guaranteed minimum future payments amounting to €628m under long-term contracts for the sale of TV and marketing rights. These payments break

  37. Slide 37: Definitions of Recurring Media EBIT, EBITDA, Like-for-Like and Free Cash Flow

    2014 FIRST-HALF RESULTS / JULY 31, 2014 FOR THE RECORDS: DEFINITIONS OF RECURRING MEDIA EBIT, EBITDA, LIKE-FOR-LIKE NET SALES AND FREE CASH FLOW  Recurring EBIT before associates is defined as the difference between earnings before interest and tax and the following items of the profit and loss sta

  38. Slide 38: Significant Events

    Ione Picks — _ ——_ Fa Lagardere

  39. Slide 39: Overall Performance (1/3)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 OVERALL PERFORMANCE (1/3)  US net sales up by 5.6% due to strong best seller offering, despite Amazon punitive practices.  UK net sales slightly up (+1.1%) against strong 2013 performance.  French net sales down 9% due to declining market, higher returns an

  40. Slide 40: Overall Performance (2/3)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 OVERALL PERFORMANCE (2/3)  Ongoing dispute with Amazon in the US over terms. • No discounting of Hachette Book Group titles by Amazon + shipping delays on print + no preordering. • Negative impact on print and e-book sales, partially offset by higher volumes

  41. Slide 41: Overall Performance (3/3)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 OVERALL PERFORMANCE (3/3)  Acquisition of Constable & Robinson and Quercus in the UK in March. • £30m sales/year. • Quality front and back lists. • Quercus publisher of Millenium in the UK.  Negative forex impact due to strong euro vs. dollar and pound. 41

  42. Slide 42: Digital Activities

    2014 FIRST-HALF RESULTS / JULY 31, 2014 DIGITAL ACTIVITIES  Total e-book revenue: 11.3% of net sales, stable vs. first half 2013. • 29% in the US (vs. 34% in H1 2013) due to e-books slowdown and Amazon punitive tactics. • 36% in the UK (vs. 31% in H1 2013). • 3.8% in France (in fiction/non-fiction)

  43. Slide 43: Significant Events

    SIGNIFICANT EVENTS

  44. Slide 44: Background

    2014 FIRST-HALF RESULTS / JULY 31, 2014 BACKGROUND  The rise (+5.1%)1 in passenger traffic worldwide has improved compared to last year. The growth is particularly dynamic in Europe and ASPAC.  Despite the continuous sustained decline in the print media markets, 2014 half-year consolidated net sal

  45. Slide 45: Travel Retail in France

    2014 FIRST-HALF RESULTS / JULY 31, 2014 TRAVEL RETAIL IN FRANCE  Aelia • 100% managed net sales up by +3.1% attributable to: ‒ an increase of +3.6% at Paris airports thanks to the on-going improvement of the Fashion activities (+6.4%) and a favourable traffic impact that compensate the negative FX

  46. Slide 46: Travel Retail in Europe (1/2)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 TRAVEL RETAIL IN EUROPE (1/2)  Italy (Rome airports) • H1 2014 at +26% vs. 2013 following the very positive impact of Fiumicino stores refurbishment and despite the construction impact of Ciampino and the still challenging economic environment. • Operational

  47. Slide 47: Travel Retail in Europe (2/2)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 TRAVEL RETAIL IN EUROPE (2/2)  Poland • Net sales growth of +1.5%. The expected decline of the Duty Free activities (-3.6%) – impacted by the transfer of Ryanair flights from Warsaw airport to Modlin airport since its reopening in October 2013 – is more than

  48. Slide 48: Travel Retail in North America

    2014 FIRST-HALF RESULTS / JULY 31, 2014 TRAVEL RETAIL IN NORTH AMERICA  Retail activity in Canada and the United States is increasing by +9.7%: • dynamic growth within the comparable network of +5.9% driven by both positive traffic trend and development of non print products; • positive contributio

  49. Slide 49: Travel Retail in Asia-Pacific

    2014 FIRST-HALF RESULTS / JULY 31, 2014 TRAVEL RETAIL IN ASIA-PACIFIC  Pacific • Despite a still challenging environment, net sales grew by +2% thanks to: ‒ the Duty Free activity driven by the renovation of the Adelaide stores and the addition of a Victoria’s Secret store; ‒ concepts and product m

  50. Slide 50: Distribution Activities (1/2)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 DISTRIBUTION ACTIVITIES (1/2)  Belgium • Integrated Retail activities experienced a slight increase in sales (+1.1%): press decline (-5.5%) was fully compensated by the good performance of tobacco (+8.0%) and the development of food & beverage and accessories

  51. Slide 51: Distribution Activities (2/2)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 DISTRIBUTION ACTIVITIES (2/2)  North America • H1 2014 was impacted by the continued rapid decline in press sales, which impacted both Curtis (-15.8%) and LS distribution North America (-11.1%). • In Canada, the decline was however mitigated by the developmen

  52. Slide 52: Significant Events – Lagardère Active

    SIGNIFICANT EVENTS Lagardere ACTIVE

  53. Slide 53: Magazine Publishing

    2014 FIRST-HALF RESULTS / JULY 31, 2014 MAGAZINE PUBLISHING  Advertising • The print advertising revenue went down by 10.7%. However, most of the Lagardère Active magazines such as Elle, Elle Décoration, Télé 7 Jours or Parents stay strong leaders on their competitive sets.  Circulation • The circ

  54. Slide 54: Radio

    2014 FIRST-HALF RESULTS / JULY 31, 2014 RADIO  Europe 1 (news and entertainment radio station in France) • Remains the number 3 radio station in France. Europe 1 has reduced the audience gap with the first two leaders and, this season (September 2013‒June 2014), has achieved its best audience resul

  55. Slide 55: Television

    2014 FIRST-HALF RESULTS / JULY 31, 2014 TELEVISION  Free TV Gulli • Increase by 30% of audience share (4-10 years old) in June 2014 vs. June 2013, in spite of the repositioning of TV channel France 4 into a kids channel since April 1st 2014. • Gulli has renewed with the leadership position on kids

  56. Slide 56: TV Production and Distribution

    2014 FIRST-HALF RESULTS / JULY 31, 2014 TV PRODUCTION AND DISTRIBUTION  42.4% revenue decrease in H1 2014 vs. H1 2013 mainly due to the high level of activity in H1 2013. • Acquisition of non scripted production company Groupe Réservoir as of February 5 th 2014. • Acquisition of scripted company Sa

  57. Slide 57: Digital

    2014 FIRST-HALF RESULTS / JULY 31, 2014 DIGITAL  Lagardère Active is the second media group in France on the web and the first on mobile phones with 19 million unique visitors1, and consolidated its digital position in 2014. • Doctissimo, the health and wellness information leader with over 8 milli

  58. Slide 58: Significant Events – Lagardère Unlimited

    SIGNIFICANT EVENTS Lagardere UNLIMITED «

  59. Slide 59: Corporate / Organisation

    2014 FIRST-HALF RESULTS / JULY 31, 2014 CORPORATE / ORGANISATION  Creation of an Executive Committee: • setting the strategic direction; • managing the business on a day to day basis; • responsible for the transition to a globally integrated business.  Ongoing turnaround of the business in Europe:

  60. Slide 60: Business Units (1/2)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 BUSINESS UNITS (1/2)  Football • Initiated the implementation of an integrated European football platform. • Expanded its footprint in Germany, the UK and the Netherlands (clubs, single rights and panel advertising). • Signed commercial deals in China for the

  61. Slide 61: Business Units (2/2)

    2014 FIRST-HALF RESULTS / JULY 31, 2014 BUSINESS UNITS (2/2)  Olympics • Distributed the Sochi 2014 Winter Olympic Games media rights. • Commercialised the 2014 Glasgow Commonwealth Games.  Stadiums, arenas and theatres • Set up of a Brazilian activity, including the operation of two stadiums in p

  62. Slide 62: First-Half Results

    2014 FIRST-HALF RESULTS JULY 31, 2014

Lagardère SCA — H1 2014 Earnings Presentation on 6ix