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Lagardere SA — Hachette Livre — Investor Day (February 2004)
29 slides from Lagardere SA's investor day presentation, Feb 2, 2004
Slide 1: Hachette Livre Investor Day
Hachette Livre INVESTOR DAY PARIS FEBRUARY 2, 2004
Slide 2: Table of contents
Table of contents Ô Hachette Livre profile n Competitive position on the world book market n Outline description of our relevant markets n Distinctive features of Hachette Livre’s business portfolio Ô Hachette Livre : our international span of activities n The French speaking world as our homebase n
Slide 3: The sixth world Consumer book publisher
Hachette Livre profile Competitive position on the world book market Hodder Headline Cornelsen 189 190 The sixth world Consumer book publisher Westermann 207 Klett-Gruppe 217 Taylor & Francis 234 Langenscheidt * 260 Blackwell Publishing 262 Wolters Kluwer 300 Mondadori 331 Santillana 347 Time Warner
Slide 4: Book publishing: a highly segmented market
Hachette Livre profile Outline description of our relevant markets Book publishing : a highly segmented market Book publishing Markets relevant for Hachette Livre Consumer Professional Trade Education Prof./ Scient. / 63% 24% Techn. 13% Literature / Illustrated Reference & « K-12 » Fiction - Non Col
Slide 5: Developed markets have recently proven to be sources of growth
Hachette Livre profile Outline description of our relevant markets Developed markets have recently proven to be sources of growth (USA, UK, France etc.) In developed markets growth is sourced from : Ô cycles in governmental reforms (education) n rebound expected in 2004 in Spain, in 2005 in France,
Slide 6: Emerging markets: significant reservoirs for growth
Hachette Livre profile Outline description of our relevant markets Emerging markets : significant reservoirs for growth Ô China, Russia, Central Europe, Latin America... n The book as the basic educational tool n The book as the first entertainment and cultural medium Russia Russia China China Latin
Slide 7: Zoom on the French book market
Hachette Livre profile Outline description of our relevant markets Zoom on the French book market Ô Behind the apparent stability (CAGR 1998-2002 : +2,6%) n Market value : € 2,4 bn, 374 million units in 2002 n far ahead of the music market : € 1,3 bn, 171 million units Ô the different market segment
Slide 8: The British book market: regular and strong growth
Hachette Livre profile Outline description of our relevant markets The British book market : regular and strong growth Ô Annual growth 1998-2002 of +3.1% in domestic consumer market to £2 bn n Difficult time for the educational publishers in 2003-04 Ô Export sales represent approx. 35% of global boo
Slide 9: The Spanish book market: moderate growth underpinned by Education and Export
Hachette Livre profile Outline description of our relevant markets The Spanish book market : moderate growth underpinned by Education and Export Domestic book market (in value) Public price Ô The growth engine in the 3,000 2,675 overall Spanish book market 2,607 2,500 2,362 2,431 2,529 is the educat
Slide 10: The winning business model of Hachette Livre
Hachette Livre profile Distinctive features of Hachette Livre’s business portfolio The winning business model of Hachette Livre Ô Hachette Livre is one of the few multi-lingual / multi-specialist publishers in the world « Consumer » (Trade and Education) market, successfully smoothing the economic c
Slide 11: Strategic position: diversified presence
Hachette Livre profile Distinctive features of Hachette Livre’s business portfolio Strategic position : U.K. diversified presence Ireland Hachette Partworks Nether- Quebec Orion lands Octopus Belgium Germany Poland France Larousse Austria Hatier Switzerland Mexico Spain Mexique Hachette Dunod Dalloz
Slide 12: Strong position resulting from the strategy implemented since 1992
Hachette Livre profile Distinctive features of Hachette Livre’s business portfolio Strong position resulting from the strategy implemented since 1992 Ô Continued growth of the publishing segments in France, then abroad, have offset the decline in door-to-door sales. Turnover in € m Door-to-door Publ
Slide 13: Literature: Fiction / Non-fiction
Hachette Livre : our international span of activities The French speaking world as our homebase Literature : Fiction / Non-fiction Literature Ô A fully integrated business model addressing the whole value chain Others 33% n Autonomy of publishers promoting internal competition and fostering editoria
Slide 14: Education: the company's historical core business
Hachette Livre : our international span of activities The French speaking world as our homebase Education : the company’s historical core business Ô Hachette Livre is the #1 educational publisher in France n Two distinct entities at Hachette : Hachette Education (1826) and Groupe Alexandre Hatier (1
Slide 15: Illustrated books
Hachette Livre : our international span of activities The French speaking world as our homebase Illustrated books Ô Cover the whole range of illustrated books from « useful » to « entertaining » n practical guides and how-to books, travel guides, art books, cartoons n Hachette Pratique, Marabout, Ha
Slide 16: Integration of Editis assets: access to new major segments in 2004
Hachette Livre : our international span of activities The French speaking world as our homebase Through the integration of Editis assets, Hachette Livre will get access to new major segments in 2004 Ô Dictionaries / Reference : Larousse n The New Dictionary of the French Language was first published
Slide 17: Salesforce
Hachette Livre : our international span of activities The French speaking world as our homebase Salesforce Direct sales Door to (mail order - Ô In an environment where supermarkets and door Internet incl. clubs) 3% 2% Other 19% 10% 2nd level chains play an increasing role, French bookshops 9% Specia
Slide 18: Distribution
Hachette Livre : our international span of activities The French speaking world as our homebase Distribution Ô Completion of an organisational scheme by flow : OUTSOURCING MAUREPAS COMPANY CENTRAL SERVICE PROVIDER WAREHOUSE Subscription flows Reorders supermarkets 10 CASH & CARRY 2 REGIONAL • Centra
Slide 19: Partworks: one of the key growth drivers in the last years
Hachette Livre : our international span of activities The French speaking world as our homebase Partworks : one of the key growth drivers in the last years Ô Business model based on customer retention and international cloning : n Marketing-driven selection of collectible topics, heavy upfront launc
Slide 20: Internationalisation in partworks
Hachette Livre : our international span of activities A major inroad in the worldwide international markets : partworks Internationalisation in partworks Ireland U.K. (1996-2003) Nether- Quebec lands Belgium Germany Poland Switzer- Austria Mexico land Mexique France LATIN AMERICA Portugal Italy Spai
Slide 21: Hachette Livre is the #5 Trade publisher in the UK
Hachette Livre : our international span of activities A prominent and growing presence on the English speaking market Hachette Livre is the #5 Trade publisher in the UK behind Bertelsmann (Random House), Pearson (Penguin / DK), News Corp. (HarperCollins) and WHSmith (Hodder Headline) Ô Hachette Livr
Slide 22: Spain: with Anaya, Hachette Livre becomes the #1 educational publisher
Hachette Livre : our international span of activities The attainment of a leading position on Spanish speaking markets Spain : with Anaya, Hachette Livre becomes the #1 educational publisher Spanish education market (2002) Ô Anaya’s integration into Hachette Livre is an Public price, €625 m ideal fi
Slide 23: Historical financial performance: profitability and growth
Key features of competitive and financial performance and outlook Historical financial performance PROFITABILITY GROWTH Op. profit Op. margin 12,0% Turnover (in M €) 120 9,6% 10,0% 100 7,7% 950 91 8,0% 80 7,0% 6,0% 6,3% 830 846 In € m 5,8% 768 822 60 6,0% 65 699 58 52 4,0% 40 46 41 20 2,0% 0 0,0% 19
Slide 24: Historical financial performance: cash flow and economic value added
Key features of competitive and financial performance and outlook Historical financial performance CASH FLOW ECONOMIC VALUE ADDED Free cash flow * (in M €) in M€ 50,0 67 40,8 40,0 53 30,0 42 39 23,6 37 38 20,0 14,2 11,5 10,0 7,1 2,3 0,0 1997 1998 1999 2000 2001 2002 1 997 1 998 1 999 2 000 2 001 2 0
Slide 25: Competitive position: summary
Key features of competitive and financial performance and outlook Competitive position : summary EDUCATION TRADE PARTWORKS (International) 1 Bertelsmann 1 Reed 2 Pearson UK 2 Wolters Kluwer 3 Harpers Collins 3 Pearson 4 WH Smith 5 Hachette Livre 1 DeAgostini 1 Santillana 1 Planeta 2 RCS Libri (Fabbr
Slide 26: SWOT analysis
Key features of competitive and financial performance and outlook Competitive position : summary SWOT analysis STRENGTHS WEAKNESSES n Diversified presence on the Consumer market (multi-lingual / multi-specialist) and agile segment management nHeadroom for extra growth on the French speaking markets
Slide 27: Profitability can still outperform its track record
Key features of competitive and financial performance and outlook Perspectives of profit improvement Although excellent, profitability can still outperform its track record Ô The Group anticipates benefits from : n the synergetic effect of Editis assets integration n the expected rebound of educatio
Slide 28: Hachette Livre is one of the best positioned to take its development further
Hachette Livre : development perspectives Up-to-date portfolio diagnosis Among the largest world publishers, Hachette Livre is one of the best positioned to take its development further Ô Hachette Livre demonstrated its ability to optimise the management of its brand portfolio, including in periods
Slide 29: Maintaining the momentum on the strategic road
Hachette Livre : development perspectives Maintaining the momentum on the strategic road Ô Beyond this first step, the strategy proposed by Hachette Livre for 2004- 2008 is articulated around the following directions : n To expand in education on the English speaking market n To extend the illustrat