Lagardere Sa · EURONEXT:MMB
Lagardere Sa — Investor Day (February 2004)
50 slides from Lagardere Sa's investor day presentation, Feb 2, 2004
Slide 1: Investor Day Paris February 2, 2004
INVESTOR DAY PARIS FEBRUARY 2, 2004
Slide 2: Outline of the Presentation
OUTLINE OF THE PRESENTATION Ô 1 . Introduction Brigitte Gauthier-Darcet Ô 2 . Audiovisual Brigitte Gauthier-Darcet n 2.1 Production / Distribution n 2.2 Theme Channels Ô 3 . Radio Brigitte Gauthier-Darcet Ô 4. Complementarity of Music Media Christophe Sabot Ô 5 . New Media Fabrice Sergent Ô 6. Multi
Slide 3: Introduction
Introduction @ lagardere active
Slide 4: Introduction: Presentation of Lagardere Active
1 . INTRODUCTION : Presentation of Lagardere Active Ô A media group focusing on 5 strategic and complementary areas n Producer and distributor of TV programs n Publisher of theme channels n Radio operator in France and 7 other countries n Publisher of multimedia services n Multimedia advertising rep
Slide 5: Production / Distribution
Production / Distribution @ lagardere active
Slide 6: Production / Distribution: Presentation of the Businesses
2 . 1 . Production / Distribution: Presentation of the Businesses Ô 10 stock production companies : n GMT Productions (Napoléon, Julie Lescaut, Boulevard du Palais,…) n DEMD Productions (Nestor Burma, Joséphine Ange Gardien,…, Le Bleu de l’Océan, 2003 summer serial on TF1) n … 168 hours produced in
Slide 7: Production / Distribution: Business Model – Key Elements
2 . 1 . Production / Distribution: Business Model – Key Elements Ô These companies address the entire market : n The 6 French terrestrial TV channels (TF1, France 2, France 3, France 5, M6, Canal +) n And some theme channels (Equidia, Match TV,...) Ô Our library : 13 000 hours mainly fictions, docum
Slide 8: Production / Distribution: Competitive Position
2 . 1 . Production / Distribution: Competitive Position Ô No. 1 producer of fiction, 23% market share in France No. 2 approximately twice smaller Ô No. 3 producer of one-off programs to be on air in 2003 (No. 5 in 2002) Ô 30 of the most successful 100 audiences in 2003 (14 in 2002) 29 of the 60 most
Slide 9: Production / Distribution: SWOT Analysis
2 . 1 . Production / Distribution: SWOT Analysis Ô Strengths Depth and variety of top talents High quality programs Good business profitability, due to tight management Ô Weaknesses Still insufficient presence in animations and gameshows Ô Opportunities Changes in regulations (access to TV advertisi
Slide 10: Production / Distribution: Growth Prospects
2 . 1 . Production / Distribution: Growth Prospects Ô Consolidate the Group’s pre-eminence in fiction Ô Strengthen production of one-off programs n By a policy aimed at finding young talents n Through the search for innovative formats n By acquiring companies producing one-off programs in the gamesh
Slide 11: Theme Channels
Theme Channels @ lagardere active
Slide 12: Theme Channels: Presentation of the Business
2 . 2 . Theme Channels: Presentation of the Business Ô Properties: 9 channels broadcast mainly in Europe in 4 editorial categories n Music: MCM, MCM TOP, MCM POP, MCM 100% Belge, MEZZO n Children: Canal J, TiJi n Daily life: La Chaîne Météo n People : Match TV n 27.4% share in multiThématiques (publ
Slide 13: Theme Channels: Competitive Position
2 . 2 . Theme Channels: Competitive Position Ô Children area Canal J n No. 2 theme channel, all theme channels viewers combined n No. 1 children channel for 4-10 and 4-14 age group (7,9 %), all theme channels viewers combined TiJi n No. 2 children channel for 4-10 age group (7,3 %), all theme channe
Slide 14: Theme Channels: SWOT Analysis
2 . 2 . Theme Channels: SWOT Analysis Ô Strengths Strong presence on key sectors for advertisers (children, music) Complementarity of TV music channels and radio stations Increasing number of subscribers to CanalSatellite Ô Weaknesses Dependence on the distributor Not backed by a terrestrial TV chan
Slide 15: Theme Channels: Growth Prospects
2 . 2 . Theme Channels: Growth Prospects Ô Growth potential : n Access to TV advertising for previously prohibited sectors reserved until 2007 for cable and satellite channels n Convergence between advertising market share (5%) / audience share (11%) n Constant growth of audience share : from 7% in
Slide 16: Audiovisual Summary
Audiovisual Summary Over a 8 year period, Lagardere Active has collected : Ô Strategic assets: n Talents: producers, anchors, channel executives n Products, brands, catalogs n Audiences Ô A range of know-hows: n Creator of programming n Distributor n Producer for theme channels n Broadcaster of them
Slide 17: Radio
Radio
Slide 18: Radio: Presentation of the Business
3 . Radio: Presentation of the Business Ô 3 national radio stations in France: n A general-interest News & Talk format n A music “generation motor” for 15-34 age group n A contemporary music station for 25-49 age group In a very competitive French radio environment (15 private national broadcasters)
Slide 19: Radio: Business Model – Key Elements
3 . Radio: Business Model – Key Elements Ô 85% of net revenue from advertising à a very cyclical business Most costs are fixed (schedule, broadcast, promotion) n More than half of the costs are constituted by payroll charges n Program generally set for the broadcast season (from september to june) n
Slide 20: Radio: Competitive Position
3 . Radio: Competitive Position Ô Very competitive environment in a context frozen by regulations n 3 main private players: Lagardere Active, NRJ, RTL n 3 small ones : Skyrock, RMC Info, Radio Classique, competing for growth n A 7th player, on the audience market only: the state-owned stations Ô Mar
Slide 21: Radio: SWOT Analysis
3 . Radio: SWOT Analysis Ô Strengths Programming expertise Complementary formats reaching every age group Abroad: strong Group positions in a balanced portfolio of countries Ô Weaknesses Insufficient coverage of the country by our stations Ô Opportunities Changes in regulation (categories, threshold
Slide 22: Radio: Growth Prospects
3 . Radio: Growth Prospects Ô Continue to improve coverage, by obtaining new frequencies Ô Internationally, consolidate our positions in countries where we are already present, while studying the possibility of investing in new countries Ô Develop the complementarity of media between music radio and
Slide 23: Complementarity of Media
Complementarity of Media
Slide 24: A Unique Radio Landscape
4 . Complementarity of Media A Unique Radio Landscape Ô The French radio landscape today: n A peculiar French situation that is not found in any other country n 15 different national music and/or news stations This situation is unique in the world today. 24
Slide 25: Segmentation of Content
4 . Complementarity of Media Segmentation of Content Ô Radio is a business sector that is not exempt from the basic rules of marketing: Create desire, be unique, and make it known. Ô Our every day policy: n Respect for the genetic codes of the brand n Respect for our promise concerning our products
Slide 26: Segmentation of Content (continued)
4 . Complementarity of Media Segmentation of Content (continued) Ô To survive and grow in the face of the combined offering of music and entertainment (mornings and evening talk shows) presented by our competitors: n Be segmented n Be different n Be capable of inducing a feeling of “ownership” “maki
Slide 27: Music Radio and Interactivity
4 . Complementarity of Media Music Radio and Interactivity Ô An intense listener/radio station relationship through the “participatory links” that arise from conventional resources, such as: n Fixed wire and mobile phones, n Text messaging, n Email, n The communities that we have developed on our We
Slide 28: Music Radio and Spin-offs
4 . Complementarity of Media Music Radio and Spin-offs Ô Strong identifiable brands that are already producing lines of derivative products: CDs and DVDs Ô with Europe 2 “un maxx’ de bruit” the “un maxx’ de frisson” collection Ô with RFM “le meilleur du cinéma” or “night fever” that constitute compl
Slide 29: Music Radio and Downloading; Music Radio and Concerts
4 . Complementarity of Media Music Radio and Downloading Ô The commercial market for music downloads has no choice but to organize itself. Ô We will be a media player in this process through the development of Virgin Méga. Music Radio and Concerts Ô The market for organizing concerts is changing par
Slide 30: Music Radio and Music TV Channels
4 .Complementarity of Media Music Radio and Music TV Channels Downloading, Concerts, Derivative products, Interactivity, Are applied on the MCM channels in the same way as in the FM business, And by promoting synergies between the two fields. 30
Slide 31: New Media
New Media @ lagardere active
Slide 32: New Media: Presentation of the Business
5. New Media : Presentation of the Business Géography : Scope of presentation : LAGARDERE ACTIVE BROADBAND Nouveaux médias rev.2002: Approx. m109 E Mobile Main services and brands : Chat/Dating Lifestyle Pictures Music Internet Minority shareholder : Content Syndication 32
Slide 33: New Media: Focus on mobile (1)
5 . New Media : Focus on mobile (1) Ô Mobile device accelerate paying content services penetration ! Animated MP3 Colored Real tones pictures downloads Voice mail pictures logos greetings Java Jeux Java 2.0 Single ton Tele- Polyphonic Games Java ringtones greetings ringtones applets Bingo SMS video
Slide 34: New Media: Mobile Data Market Europe vs USA
5 . New Media : Mobile Data Market Europe vs USA EUROPE USA Western European Mobile Western European Mobile ARPU US Mobile Subscribers US Mobile ARPU Subscribers €/Month MM $/Month MM 400 40 35 200 174 183 60 326 332 33 34 164 54 54 53 53 350 312 320 31 31 32 153 52 52 285 301 1 1 9 141 42 2 2 300 8
Slide 35: Business Models
5 . Business Models 1) Technical expertise 2) Marketing expertise : - mobile operators distribution - advertising on print, TV, radio COMMUNITIES COMMUNITIES CONTENT CONTENT àSUBSCRIBERS àPAY PER VIEW Wap STATISTICS BILLING FRONT OFFICES WAP Imode Java BREW Magazines MOBILE OPERATORS CONNECTIVITY 35
Slide 36: New Media: Competitive Position
5. New Media : Competitive Position Itouch International Match.com Prosodie Jamba Publishing Hosting 123 MM Computel AGL ADT Broadsystem Newtech InfoSpace ATS Zingy Local Jet MM 36
Slide 37: New Media: SWOT Analysis
5 . New Media : SWOT Analysis Ô Strengths Ô Internal mobile expertise Ô Operating practice on the audiotex markets since 1994 Ô Weaknesses Ô Operating presence in 4 key countries Ô No mobile carrier’s ownership Ô Track record in mass market advertising since Club-Internet Ô No large TV station owner
Slide 38: New Media: Growth Prospects (2) / Conclusion
5 . New Media : Growth Prospects (2) / Conclusion Ô Existing brands, products, expertise and technologies with local presence in 4 countries. Ô Fast growing market overall, with l Late US growth l Opportunity to consolidate existing businesses in Europe Ô … Strong opportunity to strengthen and exten
Slide 39: Lagardere Active Advertising Sales Company
Lagardere Active Advertising Sales Company
Slide 40: Lagardere Active Publicité: The French advertising market
6. Lagardere Active Publicité The French advertising market Ô 8.6 Billion Euros invested in the French media market in 2003 (+) Internet Cinema Outdoor 0,7% 0,8% Advertising 11,3% National TV 29,0% (+) Other press 17,1% Cable TV 1,5% (+) Radio 7,4% (+) National Daily Press 15,3% Magazines 16,9% 40 S
Slide 41: Lagardere Active Publicité's markets
6. Lagardere Active Publicité’s markets The audiovisual sales company of the Lagardere Group is positionned on both an « historical » market and two « emerging » markets. Ô1 « historical » advertising market : n Radio with a national and local commercialisation Ô 2 « emerging » advertising markets w
Slide 42: LAP's position on these different markets (radio)
6. LAP’s position on these different markets Ô Radio On a highly concentrated market (3 major players : LAP, IP, NRJ) Lagardere Active Publicité owns very strong brands and is present on every level. n A historical leading role (2nd commercial radio, commercial coverage share) with an innovative for
Slide 43: LAP's position on these different markets (TV, web)
6. LAP’s position on these different markets Ô Televison : n Large commercial portfolio (26 cable TV and 5 local or regional TV) composed of television channels edited by the group and channels owned by other groups (primarly AB group) which makes LAP the leading sales rep with 30% coverage share. n
Slide 44: Lagardere Active Publicité: Market conditions
6. Lagardere Active Publicité Market conditions Ô Clients’ media strategies are becoming more and more complex (search of opportunities, simultaneous work on different targets, etc…) Ô Investments based on more and more quantitative criteria ; the effective audience ; with a more and more accurate e
Slide 45: Lagardere Active Publicité's strengths
6. Lagardere Active Publicité’s strengths Ô Owned by a major media company Ô Powerful media brands with very strong added value which can be sold as a global media : cross-media Ô A dynamic team with very ambitious objectives : n more turnover and market share n A guarantee of efficiency and perfect
Slide 46: Annexes
Annexes @ lagardere active
Slide 47: The French advertising market
6. Lagardere Active Publicité The French advertising market Ô In 2002, companies have invested 29,3 Billion euros for their communication in France which represents a small increase (+0.6%) after the strong increases until 2000 (up to +8%) and the steadiness of 2001. Ô 2% of the national GDP is devo
Slide 48: Advertising income of the major media from 1998 to 2003
6. Lagardere Active Publicité Advertising income of the major media from 1998 to 2003 Millions of euros Mkt share Var 2003 vs Var 2003 vs 1998 1999 2000 2001 2002 2003 2003 1998 2001 press 3 499 3 861 4 150 3 987 3 866 3 789 44% 8% -5% télévision 2 473 2 684 3 046 2 867 2 921 3 038 35% 23% 6% outdoo
Slide 49: Sectorial breakdown of the brutto radio turnover
6. Lagardere Active Publicité Sectorial breakdown of the brutto radio turnover Other 8% Tourism Distribution 4% 24% Food 6% Transport 8% Media Telecom 8% 16% Publishing 8% Services Culture and 10% leisure 8% 49 Source : Secodip janvier-december 2003
Slide 50: Ranking of commercial stations
6. Lagardere Active Publicité Ranking of commercial stations 12,1 8,1 6,9 5,4 5,2 4,1 3,8 3,5 3,4 2,6 2,5 1,8 1,1 0,8 FM J C L L2 M NR RT K FM RM 1 2 E O RF ue ns RT M OC PE PE GI DI siq so IE AL RA RO RO YR ER an as ST N SK EU EU Ch Cl CH FU NO R. & R 50 Source : Médiamétrie 75 000+ November-decemb