Lagardere Sa · EURONEXT:MMB
Lagardere Sa — Lagardère SCA — FY2011 Earnings Presentation
76 slides from Lagardere Sa's earnings presentation, Mar 8, 2012
Slide 1: 2011 Full-Year Results
2011 Full-Year Results March 8, 2012
Slide 2: Disclaimer
Disclaimer Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and other forward-looking statements that are based on management’s beliefs. These statements reflect such views and assumptions as of the date of the statements
Slide 3: Contents
Contents Key figures ………………………….….pages 4 to 5 Financial indicators by division ……… pages 6 to 24 Summary financial information ……… pages 25 to 35 Appendices ………………………….… pages 36 to 46 Significant events ................................pages 47 to 75 2011 Full-Year Results March 8, 2012 3
Slide 4: Key figures
Lagardere Key figures
Slide 5: Key figures - Group
Key figures - Group Comparable (€m) 2010 2011 Change change* Net sales 7,966 7,657 -3.9% +0.2% Recurring Media EBIT** 468 414 -11.4% -11.1% Consolidated recurring EBIT incl. Non-Media 462 402 - - Net income – Group share 163 (707) - - Adjusted net income – Group share 284 226 - - Net cash from opera
Slide 6: Financial indicators by division
Financial indicators by division 6
Slide 7: Lagardère Publishing
Morgan Sportes ‘Tout, toul de suite LE PETIT @ | AROUsS: ILLUSTRE 301° : 7 fF Debphine = ) i de Vigan , te / Rien ne § oppose a la nujt ; : Prix Roman fat. chs France Tisions 2 i fayard i [Cates Lagardere PUBLISHING
Slide 8: Significant Events of 2011
Significant Events of 2011 Acquired an additional 40% interest in Éditions Albert René (which holds all rights to Astérix), now 100% controlled. Acquired a 25% interest in Atticus Publishing Ltd (Russia). Disposal and deconsolidation of BSSL* at December 1, 2011. E-books on the rise in English-speak
Slide 9: Net sales - 2011
Net sales - 2011 €2,038m, down 5.9% on a reported basis and down 4.4% on a like-for-like basis. – Impact of exchange rates: -1.3%. – Impact of changes in scope of consolidation: -0.2%. Key factors: – a downturn, as expected, in sales in the United States, the United Kingdom and in Illustrated Books
Slide 10: Profitability
Profitability (€m) 2010 2011 Change Net sales (a) 2,165 2,038 -5.9% Recurring EBIT before associates (b) 250 221 -11.8% Operating margin (b)/(a) 11.6% 10.8% Recurring EBIT for 2011 was down due primarily to the end of Stephenie Meyer releases, but also to distributor issues in English-speaking count
Slide 11: Lagardère Active
lagardere ACTIVE
Slide 12: Significant Events of 2011 (1/2)
Significant Events of 2011 (1/2) Disposal of International Magazine Publishing (PMI): – deconsolidation on May 31, 2011, of PMI activities, sold off in the following 13 countries: United States, Italy, Spain, Japan, Netherlands, Hong Kong, Mexico, Taiwan, Canada, Germany, Russia, Ukraine and Czech R
Slide 13: Significant Events of 2011 (2/2)
Significant Events of 2011 (2/2) Disposal on December 23, 2011 of Radio activity in Russia amounting to €123m, including €6m of the cash position. Disposal of equity-accounted interest of 34% in Le Monde Interactif (Lemonde.fr) deconsolidated effective November 30, 2011. Change in management (appoin
Slide 14: Net sales - 2011
Net sales - 2011 €1,441m Non-PMI: €1,075m, down 0.3% on a reported basis and down 0.5% on a like-for-like basis. – Impact of exchange rates: -0.1%. – Impact of changes in scope of consolidation: +0.3%. Key factors excluding PMI: – general slowdown in the advertising market: net sales of non-PMI adve
Slide 15: Profitability
Profitability (€m) 2010 2011 Change Net sales (a) 1,826 1,441 -21.0% Recurring EBIT before associates (b) 85 95 +12.4% Operating margin (b)/(a) 4.6% 6.6% Net sales, non-PMI (c) 1,078 1,075 -0.3% Recurring EBIT before associates, non-PMI (d) 35 56 +60.0% Operating margin, non-PMI (d)/(c) 3.2% 5.2% Re
Slide 16: Lagardère Services
Lagardere SERVICES 16
Slide 17: Significant Events of 2011 (1/2)
Significant Events of 2011 (1/2) Full consolidation: – at January 1, 2011, of Retail activities in Bulgaria and Singapore; – at March 1, 2011, Food services activities in Czech Republic (acquired Coffeeheaven); – at April 1, 2011, of Travel Retail activities in New Zealand (acquisition of points of
Slide 18: Significant Events of 2011 (2/2)
Significant Events of 2011 (2/2) Rise of passenger traffic around the world (+4.9%*) and Europe (+7.1%*). Growth in Retail (+4.1%). Steady decline in Distribution (-3.2%) due to unfavourable changes in the press market. Appointment of Dag Rasmussen as Chairman and Chief Executive Officer of Lagardèr
Slide 19: Net sales - 2011
Net sales - 2011 €3,724m, up 4.0% on a reported basis and up 2.0% on a like-for-like basis. – Impact of exchange rates: +1.4%. – Impact of changes in scope of consolidation: +0.6%. Key factors: – the slump in Distribution activity was largely offset by the rise in Retail activities, driven by good p
Slide 20: Profitability
Profitability (€m) 2010 2011 Change Net sales (a) 3,579 3,724 +4.0% Recurring EBIT before associates (b) 105 105 +0.1% Operating margin (b)/(a) 2.9% 2.8% Profitability was stable in 2011 thanks to growth in net sales, which offset the difficult economic environment and development costs in Asia. Dis
Slide 21: Lagardère Unlimited
Lagardere UNLIMITED ~ 21
Slide 22: Significant Events of 2011
Significant Events of 2011 Integration in the consolidation scope of: – Lagardère Paris Racing, at January 1, 2011; – Best (company specialized in athletes representation), consolidated 12 months in 2011, compared to 8 months in 2010. Change in management: – reorganised the division into three regio
Slide 23: Net sales - 2011
Net sales - 2011 €454m, up 14.5% on a reported basis and up 6.2% on a like-for-like basis. – Impact of exchange rates: -0.6%. – Impact of changes in scope of consolidation: +8.9%. Key factors: – a very good year for World Sport Group (Asian Cup held in January 2011, qualification phases began for th
Slide 24: Profitability
Profitability (€m) 2010 2011 Change Net sales (a) 396 454 +14.5% Gross margin* 313 348 +11.2% Recurring EBIT before associates** (b) 28 (6) Operating margin (b)/(a) 7.1% - Recurring EBIT down sharply due to: – non-recurring items (provisions, lawsuits, unrecovered debts); – lost contracts. Added to
Slide 25: Summary financial information
Summary financial information 25
Slide 26: Lagardère Media income statement data
Lagardère Media income statement data (€m) 2010 2011 Net sales 7,966 7,657 Recurring EBIT before associates 468 414 Contribution from equity-accounted associates* 22 33 Recurring EBIT 490 447 Total non-recurring/non-operating items (136) (692) Restructuring costs (40) (41) Net gains/(losses) on disp
Slide 27: Analysis of non-recurring/non-operating items of Lagardère Media – FY 2011
Analysis of non-recurring/non-operating items of Lagardère Media – FY 2011 Total Lagardère Lagardère Lagardère Lagardère Lagardère (€m) Publishing Active Services Unlimited Media Restructuring costs (1) (16) (14) (10) (41) Gains/(losses) on disposals (4) 22 - - 18 Impairment losses on (3) (27) (5) (
Slide 28: EBIT
EBIT (€m) 2010 2011 Lagardère Media 354 (245) Non-Media activities (54) (13) Impairment loss on Canal+ France investments - (310) Total excluding EADS 300 (568) Equity-accounted contribution from EADS 43 79 TOTAL LAGARDÈRE 343 (489) 2011 Full-Year Results March 8, 2012 28
Slide 29: Consolidated income statement
Consolidated income statement 2010 2011 Lagardère Other Total Lagardère Other Total Media activities* Media activities* €m Net sales 7,966 - 7,966 7,657 - 7,657 Recurring EBIT before 468 (6) 462 414 (12) 402 associates Income from associates 22 43 65 33 79 112 Non-recurring/non-operational (136) (48
Slide 30: Adjusted net income – Group share
Adjusted net income – Group share (€m) 2010 2011 Net income – Group share 163 (707) Equity accounted contribution from EADS (43) (79) Amortisation of acquisition-related intangible assets and other acquisition-related expenses* 25 71 Impairment losses on: - goodwill and intangible assets* 99 585 - a
Slide 31: Consolidated statement of cash flows
Consolidated statement of cash flows (€m) 2010 2011 Cash flow from operations before interest, taxes & changes in working capital 591 597 Changes in working capital 81 (170) Cash flow from operations 672 427 Interest paid & received, income taxes paid (141) (170) Cash generated by/(used in) operatin
Slide 32: Change in net debt, FY 2010 vs. FY 2011
Change in net debt, FY 2010 vs. FY 2011 (€m) 2010 2011 Net debt at start of period (1,824) (1,772) Net cash generated by/(used in) operating and investing activities 320 766 Disposal (acquisition) of minority interests (24) (21) Disposal (acquisition) of treasury shares 5 (3) Dividends (200) (195) I
Slide 33: Consolidated balance sheet
Consolidated balance sheet (€m) 2010 2011 Non-current assets (excl. investments in associates) 4,333 3,626 Investments in associates 2,054 1,771 EADS 271 277 Other associates 1,783 1,494 Current assets (other than short-term investments and cash) 2,695 2,781 Short-term investments and cash 722 737 H
Slide 34: Stockholders’ equity and net debt
Stockholders’ equity and net debt (€m) 2010 2011 Stockholders’ equity 4,018 3,024 Net debt (1,772) (1,269) Gearing 44.1% 42.0% 2011 Full-Year Results March 8, 2012 34
Slide 35: Sound financial position
Sound financial position Prudent financial policy focused 2011 : on diversification of funding sources – renewal in January 2011 of the Debt breakdown 2010 9% 6% 2011 syndicated bank loan (€1.6bn); – significant reduction in net 27% 34% indebtedness: -€503m. 57% 67% A significant effort at reducing
Slide 36: Appendices
Lagardere Appendices
Slide 37: Group profile – 2011
Group profile – 2011 Net sales by division Recurring EBIT by division Unlimited 6% Services Publishing 27% 25% Publishing Services Active 52% 48% Active 19% 23% Note: Recurring EBIT - 2011 - Unlimited: -€6m Net sales by geographic area 2011 Full-Year Results March 8, 2012 37
Slide 38: Analysis of non-recurring/non-operating items of Lagardère group – FY 2011
Analysis of non-recurring/non-operating items of Lagardère group – FY 2011 Lagardère Other Group (€m) Media activities* Total Restructuring costs (41) (41) Gains/(losses) on disposals 18 (1) 17 Impairment losses on goodwill (585) (310) (895) and intangible assets Amortisation of acquisition-related
Slide 39: Contribution from equity-accounted associates
Contribution from equity-accounted associates (€m) 2010 2011 Lagardère Publishing 3 1 Lagardère Active 12 21 Lagardère Services 7 10 Lagardère Unlimited - 1 Total Lagardère Media 22 33 Other activities 43 (231) TOTAL 65 (198) 2011 Full-Year Results March 8, 2012 39
Slide 40: Principal associates
Principal associates 2010 2011 Balance Income Balance Income (€m) sheet statement sheet statement EADS 271 43 277 79 Canal+ France 1,507 - 1,197 (310) Marie Claire 127 3 125 6 Other associates 149 19 172 27 Total 2,054 65 1,771 (198) 2011 Full-Year Results March 8, 2012 40
Slide 41: Cash flow statement data - Lagardère Publishing
Cash flow statement data - Lagardère Publishing (€m) 2010 2011 Cash flow from operations before interest, taxes & changes in 276 228 working capital Changes in working capital 27 (42) Cash flow from operations 303 186 Interest paid & received, income taxes paid (87) (56) Cash generated by/(used in)
Slide 42: Cash flow statement data - Lagardère Active
Cash flow statement data - Lagardère Active (€m) 2010 2011 Cash flow from operations before interest, taxes & changes in 122 123 working capital Changes in working capital 22 (69) Cash flow from operations 144 54 Interest paid & received, income taxes paid (60) (75) Cash generated by/(used in) opera
Slide 43: Cash flow statement data - Lagardère Services
Cash flow statement data - Lagardère Services (€m) 2010 2011 Cash flow from operations before interest, taxes & changes in 158 153 working capital Changes in working capital 10 (37) Cash flow from operations 168 116 Interest paid & received, income taxes paid (23) (30) Cash generated by/(used in) op
Slide 44: Cash flow statement data - Lagardère Unlimited
Cash flow statement data - Lagardère Unlimited (€m) 2010 2011 Cash flow from operations before interest, taxes & changes in 100 103 working capital Changes in working capital (11) (17) Cash flow from operations 89 86 Interest paid & received, income taxes paid (18) (30) Cash generated by/(used in) o
Slide 45: Off balance sheet commitments
Off balance sheet commitments (€m) 2010 2011 Commitments to purchase shares from third parties (other 14 25 than minority interests) Commitments given in connection with ordinary activities: - contract guarantees and performance bonds 70 73 - guarantees in favour of third parties or non-consolidated
Slide 46: Definitions of Recurring Media EBIT and EBITDA
For the record : definitions of Recurring Media EBIT and EBITDA Recurring Media EBIT of consolidated companies is defined as the difference between result before financial charges and tax and the following items of the profit and loss statement: – Contribution of associates – Gains or losses on disp
Slide 47: Significant events
Lagardere Significant events
Slide 48: Contents
Contents Lagardère Publishing……………… pages 49 to 53 Lagardère Active ………………….. pages 54 to 59 Lagardère Services ….……………. pages 60 to 69 Lagardère Unlimited .……………… pages 70 to 75 2011 Full-Year Results March 8, 2012 48
Slide 49: Lagardère Publishing
Morgan Sportes ‘Tout, toul de suite LE PETIT @ | AROUsS: ILLUSTRE 301° : 7 fF Debphine = ) i de Vigan , te / Rien ne § oppose a la nujt ; : Prix Roman fat. chs France Tisions 2 i fayard i [Cates Lagardere PUBLISHING
Slide 50: France
France An excellent year, in line with 2010, despite an unfavourable comparison (end of the Twilight phenomenon), thanks notably to good performances from: – Education; – General Literature; – Larousse; – Distribution. 2011 Full-Year Results March 8, 2012 50
Slide 51: International
International United States marked by the decline in print and the rise of e-books, as well as the failure of Borders (625 stores). Recurring EBIT was less impacted than sales. A difficult year in the United Kingdom and Australia (failure of RedGroup in Australia). Good performance by Spain thanks t
Slide 52: Digital
Digital 20% of sales in the United States, with a slowing trend in growth. 10% of sales in the United Kingdom, and growing fast. Less than 1% of sales in France, but the conditions are right for a take- off in 2012: Fnac and Amazon products on the market, and the e-book single price act adopted. Spe
Slide 53: Other activities
Other activities Partworks were resilient thanks to emerging markets and Japan. The US courts and the European Commission are examining a purported e-book price-fixing infraction: – five publishing groups are implicated, including Hachette Livre; – full cooperation from Hachette Livre, which conside
Slide 54: Lagardère Active
lagardere ACTIVE
Slide 55: Magazines - France
Magazines - France In Magazine Publishing - France (PMF), Lagardère Active confirmed its leadership position in circulation and advertising in 2011. Advertising After the partial recovery in 2010 (+7.5%), on the heels of a 17% drop in 2009, PMF posted virtually stable sales and had good performances
Slide 56: Television
Television Television activities had a strong showing thanks to large audiences brought in (specifically by Gulli), which positively impacted Advertising Sales Brokerage. Gulli The year was marked by the strong growth of the Gulli channel, whose advertising resources rose by more than 30% between 20
Slide 57: TV Production & Distribution
TV Production & Distribution Very good performance in Lagardère Entertainment's activities in 2011, up 8.3% on a like-for- like basis. The television market in France – The year was marked by continued recovery in the advertising market and a further increase in viewing time in France (3'47" per day
Slide 58: Radio
Radio Radio net sales down 2.7% on a like-for-like basis Europe 1 – Europe 1 confirmed the success of its new line-up by gaining 267,000 new listeners in one year. In addition, the station's leadership built on influential targets: Europe 1 was the number-one station with occupational groups and exe
Slide 59: Digital
Digital Already a joint leader in media group audiences, with 16.2 million UV, Lagardère Active posted performance slightly higher than market (+4.7%). Main Sites – Doctissimo.fr, the top French site for women, launched its video platform with a daily show, La minute santé. Elle.fr, the leading upsc
Slide 60: Lagardère Services
Lagardere SERVICES 60
Slide 61: Context
Context In 2011, major changes were made within the Lagardère Services organisation and the new strategic plan was implemented. – Following the retirement of Jean-Louis Nachury, Dag Rasmussen took over as Chairman and Chief Executive Officer of Lagardère Services in August 2011. – Now, the division
Slide 62: A sustained development strategy
A sustained development strategy Growth in Travel Retail is still sustained: – partnership with ADP extended and reinforced: • SDA* contract extended and resumption of "fashion" activities following the purchase of 50% of The Nuance Group in the joint-venture operating those franchises in Paris' air
Slide 63: Travel Retail in France (1/2)
Travel Retail in France (1/2) Relay France – Net sales down slightly by 1.6%. • The scope effect of the transfer of stores in the Paris airports to the joint-venture Relay@ADP was -5.4 points (equity accounting of Relay sales outlets in ADP, a consequence of creating the joint-venture Relay@ADP). •
Slide 64: Travel Retail in France (2/2)
Travel Retail in France (2/2) Aelia – Sales were up +11.1% (+11% like-for-like) with: • Airports up 12.5% thanks to a sharp rise in net sales per passenger (especially fashion) and to growth in air traffic (up 6% in Paris); • Euronord (Eurostar sales outlets in Lille) at +4.5% with the recovery of c
Slide 65: Travel Retail in Europe
Travel Retail in Europe Germany – Activity increased 4.4% thanks to continued development, which brought 7.4 growth points with eight additional sales outlets, bringing the network to 84 sales outlets in late 2011. – Won franchises in six stations and the new airport in Berlin (nine sales outlets).
Slide 66: Travel Retail in North America
Travel Retail in North America North America – Retail activities in Canada and the United States down 1.2%: • on a like-for-like network basis, activity was up 0.6%: • good performances posted in airports... • ...offset sagging sales in tourist areas and downtown, affected by the bad weather at the
Slide 67: Travel Retail in Asia-Pacific
Travel Retail in Asia-Pacific Asia – Initial consolidation of Singapore and China on January 1, 2011. – Presence in Hong Kong, Singapore, China and Taiwan, with a network of 108 sales outlets compared to 61 sales outlets at end 2010. – Net sales up strongly +55.6% with significant growth in China (4
Slide 68: Distribution Activities (1/2)
Distribution Activities* (1/2) Belgium – Integrated Retail activities down 3.5% due to streamlining of the network which now includes 264 sales outlets (-11 sales outlets vs. 2010). On a like-for-like network basis, net sales were down 1.2%. – Distribution fell 2.4% of which -2.3% was in print media
Slide 69: Distribution Activities (2/2)
Distribution Activities* (2/2) North America – Distribution in the United States: the year was marked by a still-difficult economic environment that was reflected on the market, down significantly. In this context, consolidated net sales for Curtis were affected, falling 16.9%. – Distribution in Can
Slide 70: Lagardère Unlimited
Lagardere UNLIMITED ~ 70
Slide 71: Organisation
Organisation Division reorganised into three regions, and new managers appointed: – Alain Lemarchand, Chief Operating Officer for Europe and Africa; – Seamus O’Brien, Chief Operating Officer for Asia-Pacific and the Middle East; – Kevin O’Connor, Chief Operating Officer for the United States and Sou
Slide 72: Europe and Africa Area (1/2)
Europe and Africa Area (1/2) Management of broadcasting rights: – Sportfive acquired additional rights to the qualifying matches for the 2014 World Soccer Cup and continued marketing UEFA Euro 2012TM, the Africa Cup of Nations and the 2014 Winter Olympics and 2016 Summer Olympics; – IEC in Sports si
Slide 73: Europe and Africa Area (2/2)
Europe and Africa Area (2/2) Organisation and management of sports events: – successful Berlin Skoda Velothon (13,000 starters) and London Triathlon (4,500 registered, event sold out); – created a new triathlon (San Diego) included in the ITU World Triathlon Series, operated by Upsolut beginning in
Slide 74: Asia-Pacific and Middle East Area
Asia-Pacific and Middle East Area Management of broadcasting rights and marketing of rights and associated products: – sold media and marketing rights to the AFC (Asian Football Confederation) contract: Asian Cup 2011, Olympic Qualifiers and Champions League; – acquired media and marketing rights to
Slide 75: United States and South America Area
United States and South America Area Organisation and management of sports events: – 2011: took over the WTA Citi Open (women's tennis, Washington). Representation of celebrities: – major addition to the portfolio of athletes represented, especially in tennis (more than 500 players and celebrities r
Slide 76: 2011 Full-Year Results
2011 Full-Year Results March 8, 2012