Lagardere Sa · EURONEXT:MMB
Lagardere Sa — Lagardère SCA — Investor Day (January 2007)
48 slides from Lagardere Sa's investor day presentation, Jan 25, 2007
Slide 1: Investor Day January 25, 2007
INVESTOR DAY January 25, 2007
Slide 2: Warning
2 Warning Investor Day January, 2007 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 t
Slide 3: Agenda - Part Two
3 Agenda - Part Two Investor Day January, 2007 • The Transformation: 2007 - 2010 p. 4 to 39 • Changing the management and mindset p. 4 to 5 • Rationalizing the portfolio p. 6 to 9 • Improving profitability p. 10 to 20 • Boosting the new core business p. 21 to 26 • Merging advertising sales houses p.
Slide 4: The Transformation: 2007 – 2010
4 The Transformation: 2007 – 2010 Investor Day January, 2007 1- Changing the management and mindset 2- Rationalizing 3- Improving the portfolio profitability 6- Digital strategy 4- Boosting the 5- Merging the new core advertising business sales houses
Slide 5: Changing the management and mindset
5 1. Changing the management and mindset Investor Day January, 2007 • Creating a global marketing division team • Creating a digital division • Pooling support functions • Merging the advertising sales houses • Migrating the French magazine press arm to an editor/publisher model • Merging the 2 inte
Slide 6: The Transformation: 2007 – 2010
6 The Transformation: 2007 – 2010 Investor Day January, 2007 1- Changing the management and mindset 2- Rationalizing 3- Improving the portfolio profitability 6- Digital strategy 4- Boosting the 5- Merging the new core advertising business sales houses
Slide 7: Press: optimize title portfolio
7 2.1 Press: optimize title portfolio Investor Day January, 2007 Closing down magazines titles Revenues CAGR 2002-2005 Full year * P&L (*) impact 6% of revenues 3% of revenues 49% of revenues Recurring EBIT Approx. €+7m 23% of HFM titles 7% of HFM titles 29% of HFM titles 0 Revenues < -
Slide 8: Press: optimize the country portfolio
8 2.2 Press: optimize the country portfolio Investor Day January, 2007 Sell and license in sub-critical small countries Revenues per country FRANCE Full year P&L (*) US impact ITALY SPAIN RUSSIA* JAPAN Recurring EBIT Approx. +1 UK CHINA GERMANY** NETHERLAND SWEDEN Approx. CZECH REP.* Revenues KOREA*
Slide 9: Non-Strategic Assets
9 2.3 Non-Strategic Assets Investor Day January, 2007 z Photo Agencies: Full year P&L (*) done impact Recurring EBIT Approx. + €4m z Regional Press: divestiture under way Turnover Approx. - €260m z Other small businesses (*) Based on 2006 unaudited data
Slide 10: The Transformation: 2007 – 2010
10 The Transformation: 2007 – 2010 Investor Day January, 2007 1- Changing the management and mindset 2- Rationalizing 3- Improving the portfolio profitability 6- Digital strategy 4- Boosting the 5- Merging the new core advertising business sales houses
Slide 11: Major cost improvement areas
11 3.1 We have identified 7 cost improvement areas capable of generating full-year savings of €70m Investor Day January, 2007 Major cost improvement areas Technical Technical Overheads & Editorial Production Operations Operations Support Operations (TV) (Press) (Radio & TV) Functions Purchasing / Pr
Slide 12: Efficiency levers: Editorial Operations
12 3.2 Efficiency levers: Editorial Operations Investor Day January, 2007 • Increase individual productivity • Outsource non-strategic activities • Take full advantage of new technologies • Reduce the number of management layers • Improve photo editorial philosophy • Change editorial formats and phi
Slide 13: Efficiency levers: Technical Operations (Press)
13 3.3 Efficiency levers: Technical Operations (Press) Investor Day January, 2007 • Improve overall productivity and reduce purchasing costs by implementing pre-press automated copy flow management • Improve coordinated paper and printing negotiation and review specifications at international level
Slide 14: Efficiency levers: Technical Operations (Radio & TV)
14 3.4 Efficiency levers: Technical Operations (Radio & TV) Investor Day January, 2007 • Reduce need for technical intervention • Promote multi-task technician profiles • Standardize technical equipment • Combine operations and share resources
Slide 15: Efficiency levers: Purchasing/Procurement
15 3.5 Efficiency levers: Purchasing/Procurement Investor Day January, 2007 • Continue to rely on the Lagardère group contracts in non-critical areas • As with paper & print, tighten specifications and negotiations in critical areas (such as real estate, personnel expenses, utilities) • Continue to
Slide 16: Efficiency levers: TV Production
16 3.6 Efficiency levers: TV Production Investor Day January, 2007 • Reduce labor costs through TV production department reorganization and staff sharing • Optimize part-time staff by better planning and resource sharing • Implement purchasing cost reduction programs in pre-production, production, p
Slide 17: Efficiency levers: Support Functions
17 3.7 Efficiency levers: Support Functions Investor Day January, 2007 3 key levers: • Downsize and streamline national support function structures • Optimize global support functions: Finance, IS/IT, Legal • Achieve post-merger synergies: Finance, IS/IT, Legal, Human Resources... Support functions
Slide 18: Lagardère Publicité: the drive for commercial excellence and synergies
18 3.8 Lagardère Publicité: the drive for commercial excellence and synergies Investor Day January, 2007 • Scale up performance by streamlining sales methods and implementing account management policies through a unified management structure • Pool marketing/communication skills and resources • Impr
Slide 19: Improving profitability: significant full-year savings before end 2009
19 3.9 Improving profitability: significant full-year savings before end 2009 Investor Day January, 2007 Recurring €m Turnover EBIT Title portfolio -90 +7 Country portfolio -40 +1 Transformation 0 +70 costs Total savings -130 +78 Non-strategic -260 +4 assets
Slide 20: Transformation Costs
20 Transformation Costs Investor Day January, 2007 • Total cumulated transformation costs over the period 2007-2009 should be in the range of around €80m to €100m. • Around 15% should impact the Recurring EBIT.
Slide 21: The Transformation: 2007 – 2010
21 The Transformation: 2007 – 2010 Investor Day January, 2007 1- Changing the management and mindset 2- Rationalizing 3- Improving the portfolio profitability 6- Digital strategy 4- Boosting the 5- Merging the new core advertising business sales houses
Slide 22: Boosting the new core business: Press (French Market)
22 4.1 Boosting the new core business: Press (French Market) Investor Day January, 2007 • No new national magazine launches in 2007 • Significant editorial remake Paris Match/Choc! • Télé 7 Jours: new format combining off and on-line • Launch of regional issues of Elle • Cross-media marketing campai
Slide 23: Boosting the new core business: Press (International)
23 4.2 Boosting the new core business: Press (International) Investor Day January, 2007 • Selective launches (in our strong segments) in the USA, UK, Italy (Dona 24), Spain, Netherlands, Japan • Solve critical mass problems in the USA and the UK • Continue to invest in China and Russia • Continue ou
Slide 24: Boosting the new core business: Radio
24 4.3 Boosting the new core business: Radio Investor Day January, 2007 France • Europe 1: leverage and expand the brand via multi-platform content • Europe 2: reinforce music/youth segment positioning • RFM: maintain and exploit market leadership International • Leverage profitability of existing b
Slide 25: Boosting the new core business: TV
25 4.4 Boosting the new core business: TV Investor Day January, 2007 • Reinforce Kids theme: international TV developments, mobile services, web, TV production • Europe 2 TV has a unique position in DTT • We have a strong asset with MCM on cable and satellite. The expected decline of MCM revenue str
Slide 26: Boosting the new core business: Production
26 4.5 Boosting the new core business: Production Investor Day January, 2007 Drama • Consolidate our leadership in quality French drama • Develop suitable 52-minute formats Entertainment & Animation • Acquire new competencies & challenge existing leadership in France Rationalization • Restructuring
Slide 27: The Transformation: 2007 – 2010
27 The Transformation: 2007 – 2010 Investor Day January, 2007 1- Changing the management and mindset 2- Rationalizing 3- Improving the portfolio profitability 6- Digital strategy 4- Boosting 5- Merging the the new advertising core business sales houses
Slide 28: Merging the advertising sales houses: Lagardère Publicité will be French No.2
28 5.1 Merging the advertising sales houses: Lagardère Publicité will be French No.2… Investor Day January, 2007 Publicité No.2 advertising sales Unique portfolio in 5 media with house in the market strong brands positioned on key advertising target groups Advertising spend (€bn) €1,066m revenues Ra
Slide 29: Offering the most comprehensive range of media on the market
29 5.2 …offering the most comprehensive range of media on the market Investor Day January, 2007 The most comprehensive sales house in France General Theme Magazine Daily Free press Outdoor Radio Internet Regional International interest TV TV press press Publicité Publicité 3 3 3 3 3 3 3 3 3 3 3 3 3
Slide 30: The Transformation: 2007 – 2010
30 The Transformation: 2007 – 2010 Investor Day January, 2007 1- Changing the management and mindset 2- Rationalizing 3- Improving the portfolio profitability 6- Digital strategy 4- Boosting the 5- Merging the new core advertising business sales houses
Slide 31: Digital strategy
31 6.1 Digital strategy Investor Day January, 2007 Traditional media Digital media Migrate 100 million Acquire expertise and Lagardère Active Media audience on the web customers to the web Become a web leader in terms of revenues in all key segments/themes by 2010 Stimulate and develop LAM business
Slide 32: 4 levers to make us web leader by 2010
32 6.2 4 levers to make us web leader in all key segments/themes by 2010 Investor Day January, 2007 1. Organic growth 2. Digital acquisitions 3. Digital alliances 4. Dedicated organizational structure
Slide 33: Digital strategy: our ambition
33 6.3 Digital strategy: our ambition Investor Day January, 2007 z In 2006, Lagardère Active Media digital revenues are expected to account for 1% of total revenues (estimates, unaudited) z By 2009 (on a full-year basis), digital activities are expected to represent 5% to 10% of total revenues, depe
Slide 34: Organic growth: launch or re-launch of 100+ web sites
34 6.4 Organic growth: launch or re-launch of 100+ web sites Investor Day January, 2007 Leisure/ Theme Women Home Parent Celeb Auto Music Kids News TV Major cluster: FRANCE key country for this segment US Important cluster: REST OF EUROPE > 5 sites REST OF Minor cluster: THE < 5 sites, low WORLD rev
Slide 35: Organic growth: become state-of-the art on the internet
35 6.5 Organic growth: become state-of-the art on the internet Investor Day January, 2007 • Make our websites more attractive via interactivity, web 2.0, video, etc. • Integrate more new technologies: podcast, VoD, etc. • Network websites / create synergies between sites • Develop new 100% online co
Slide 36: Organic growth: integrate more new technologies
36 6.6 Organic growth: integrate more new technologies (e.g. in music) Investor Day January, 2007 Two key new areas for music development: IP radio/web TV and Mobile • Develop IP radio/web TV in countries where we have radio and/or TV stations • Launch new IP radio/web TV in other countries • Target
Slide 37: Digital acquisitions: main acquisition criteria
37 6.7 Digital acquisitions: main acquisition criteria Investor Day January, 2007 Digital acquisitions: • Main focus on France, Europe and the US • Affinity with our strong core segments • Consistent with Lagardere SCA investment criteria • Leading audience figures for its segment • Strong managemen
Slide 38: Digital alliances
38 6.8 Digital alliances Investor Day January, 2007 • Build strong alliances to accelerate traffic growth on our websites, so they can become traffic hubs in our key segments • Learn from and use our partners’ internet competencies and know-how • Extend alliances to advertising unit management Examp
Slide 39: Organization
39 6.9 Organization Investor Day January, 2007 Digital activities Leisure/ Women Shelter Parent People Car Music Kids News TV Segment Value / strategy Support functions International approximately 250 people at the end of 2007 B2B & partnership Technologies
Slide 40: Agenda
40 Agenda Investor Day January, 2007 • The Transformation: 2007 - 2010 p. 4 to 39 • Changing the management and mindset p. 4 to 5 • Rationalizing the portfolio p. 6 to 9 • Improving profitability p. 10 to 20 • Boosting the new core business p. 21 to 26 • Merging advertising sales houses p. 27 to 29
Slide 41: Strong ambition…
41 Strong ambition… Investor Day January, 2007 Digital investment 2010 and after - New business model: from media to content and HIGH audience aggregation 2007-2009 - Transformation & digital development MEDIUM 2007- Change & rationalization Efficiency & MEDIUM HIGH profitability Contribution from d
Slide 42: … served by a clear vision & mission
42 … served by a clear vision & mission Investor Day January, 2007 Mission Focus on delivering large audiences in 5 or 6 key markets worldwide through a cross-media approach Use the digital transformation to leverage our growth How and drive organizational change • Brands • Content Differentiation f
Slide 43: Become a content factory and a content leader
43 Become a content factory and a content leader Investor Day January, 2007 • Establish content production links between media activities • Exploit under-used content • Source concepts from one activity and roll them out to other activities • Generate revenue from by-products • Use the web and digit
Slide 44: Become a digital factory
44 Become a digital factory Investor Day January, 2007 LAM content & LAM Digital LAM distribution production Factory channels Press Magazines TV Production TV Digitalization of Radio stations all LAM content Radio stations and production Rights buying Web Internet Mobile
Slide 45: World leader in audience aggregation and content production: Women's
45 The aim: to become a world leader in audience aggregation and content production Investor Day January, 2007 Print Print Extensions 25m readers of print editions Launches of new web-driven magazine 39 editions concepts with UGC moderated content Web user evaluation/feedback on articles N
Slide 46: World leader in audience aggregation and content production: Auto
46 The aim: to become a world leader in audience aggregation and content production Investor Day January, 2007 Print Extensions Print Launch of new offline 18m readers of the paper edition participating concepts New sections inherited from platform blogs Events TV/WebTV/ US events and Europe
Slide 47: World leader in audience aggregation and content production: Kids
47 The aim: to become a world leader in audience aggregation and content production Investor Day January, 2007 Production TV/Web TV/Web radio Focus on kids productions New headings derived from blogs or Content based on comment/ UGC (video recording, etc) feedback from the Web 24/24 Web TV K
Slide 48: Final words
48 Final words Investor Day January, 2007 In the digital world, themes/content/audiences will be more important than media channels • By 2010, the new management team is aiming to have: • Improved the profitability of the division • Completed the digital transformation as regards content and sites •