Lagardere Sa · EURONEXT:MMB
Lagardere Sa — H1 2005 Earnings Presentation
65 slides from Lagardere Sa's earnings presentation, Sep 14, 2005
Slide 1: Analyst Meeting – First Half 2005 Results
1 Analyst Meeting September 14, 2005 Æ First Half 2005 Results
Slide 2: Contents
2 Contents 9 Consolidated financial statements --------------- p. 3 to 22 9 Financial indicators by division -------------------- p.23 to 36 9 Reconciliation of recurring EBIT before associates to EBIT ---------------------------------- p.37 to 40 9 Additional balance sheet information -------- p.41
Slide 3: Consolidated financial statements
3 Consolidated financial statements First half of 2005 Æ First Half 2005 Results
Slide 4: Main changes in scope of consolidation
Main changes in scope of consolidation 4 Books Full consolidation of British publisher Hodder Headline (included from October 1 only in 2004). Press Proportionate consolidation (49%) of Psychologies Magazine (included from July 1 only in 2004). Distribution Full consolidation of Newslink (retail cha
Slide 5: Main changes in scope of consolidation
Main changes in scope of consolidation 5 Other Divestment of the activities of Arjil & Associés at the end of 2004. activities EADS Following a capital increase resulting from the exercise of employee stock options, the rate used for the proportionate consolidation of EADS was 15.09% for H1 2005, vs
Slide 6: Net sales by division
Net sales by division 6 €12,296m 4,795 €6,152m €5,692m 2,190 2,418 7,501 3,502 3,734 H1 2004 H1 2005 FY 2004 Lagardère Media EADS 8.1% growth on a consolidated basis 6.6% growth for Lagardère Media Æ First Half 2005 Results
Slide 7: Lagardère Media – Net sales by business segment
Lagardère Media – Net sales by business segment 7 €7,501m 558 1,420 1,848 €3,502m €3,734m 306 268 575 720 908 909 3,675 1,751 1,799 H1 2004 H1 2005 FY 2004 Distribution Services Press Books Lagardere Active - Growth on a like-for-like basis: 2.8% - Impact of consolidation of Hodder Headline in H1 20
Slide 8: Lagardère Media – Net sales by geographical area
Lagardère Media – Net sales by geographical area 8 4% 4% 4% 9% 8% 8% 41% 44% 43% 46% 44% 45% H1 2004 H1 2005 FY 2004 France Rest of Europe USA & Canada Rest of the world Æ First Half 2005 Results
Slide 9: Recurring EBIT before associates by division
Recurring EBIT before associates by division 9 €823m 3 €415m €331m 350 3 221 151 470 177 195 (1) H1 2004* H1 2005 FY 2004* * After reallocating 2004 corporate costs recharged to Lagardère Media by “Other activities” using 2005 allocation rates Lagardère Media EADS Other Activities - Growth in recurr
Slide 10: Lagardère Media – Recurring EBIT before associates by business segment
Lagardère Media – Recurring EBIT before associates by business segment 10 €470m 37 164 €177m €195m 34 168 30 34 53 72 68 101 41 40 H1 2004* H1 2005 FY 2004* * After reallocating 2004 corporate costs recharged to Lagardère Media by “Other activities” using 2005 allocation rates Distribution Services
Slide 11: Non-recurring items
Non-recurring items 11 €12m 35 -€9m -€3m 2 2 (3) (11) (2) (18) (5) H1 2004 H1 2005 FY 2004 Lagardère Media EADS Other Activities Æ First Half 2005 Results
Slide 12: Non-recurring items by type
Non-recurring items by type 12 Media & Other Activities €30m 7 Media & Other Media & Other Activities Activities 104 €2m -€5m EADS EADS EADS 5 2 5 (1) (1) (11) (2) (9) (18) (72) H1 2004 H1 2005 (9) FY 2004 EADS Net gain/(loss) on disposals Restructuring costs Impairment of PP&E and intangibles Rever
Slide 13: Income from associates by business segment
Income from associates by business segment 13 €54m €52m €39m 13 19 7 41 32 33 H1 2004 H1 2005 FY 2004 Lagardère Media EADS - CanalSat contribution: - H1 2005: €27m - H1 2004: €25m Æ First Half 2005 Results
Slide 14: Earnings before interest & tax (EBIT) by division
Earnings before interest & tax (EBIT) by division 14 €889m 345 €361m €464m 3 242 147 546 211 225 (3) (2) H1 2004* H1 2005 FY 2004* * After reallocating 2004 corporate costs recharged to Lagardère Media by “Other activities” using 2005 allocation rates Lagardère Media EADS Other Activities EBIT growt
Slide 15: Net interest income/(expense) by division
Net interest income/(expense) by division 15 -€97m -€41m -€33m 2 3 7 (26) (25) (11) (59) (17) (45) H1 2004 H1 2005 FY 2004 Lagardère Media EADS Other Activities Æ First Half 2005 Results
Slide 16: Income taxes
Income taxes 16 -€100m -€121m -€240m (47) (42) (53) (132) (79) (108) H1 2004 H1 2005 FY 2004 Media & Other Activities EADS Æ First Half 2005 Results
Slide 17: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement 17 (€m) H1 2004 H1 2005 FY 2004 Media & Media & Media & Other EADS Total Other EADS Total Other EADS Total Activities Activities Activities Net sales 3,502 2,190 5,692 3,734 2,418 6,152 7,501 4,795 12,296 EBIT 214 147 361 222 242 464 544 345 889 Net interest expe
Slide 18: Cash flow from operations
Cash flow from operations 18 Cash flow from operations before interest, taxes and Changes in working capital changes in working capital €1,187m +€223m €589m €532m 636 -€55m -€150m 264 267 8 104 260 551 (159) 322 (158) (41) 272 H1 2004 H1 2005 FY 2004 H1 2004 H1 2005 FY 2004 Media & Other Activities
Slide 19: Cash Flow Statement
Cash Flow Statement 19 (€m) H1 2004 H1 2005 FY 2004 Media & Media & Media & Other EADS Total Other EADS Total Other EADS Total Activities Activities Activities Cash flow from operations before interest, taxes and changes in 260 272 532 267 322 589 636 551 1,187 working capital Changes in working cap
Slide 20: Consolidated balance sheet
Consolidated balance sheet 20 (€m) June 30, 2005 December 31, 2004 Media & EADS Total Media & EADS Total Other Other Activities Activities Non-current assets 5,661 4,521 10,182 5,573 3,618 9,191 Current assets 3,474 4,931 8,405 4,438 4,337 8,775 of which short term investments & cash 811 1,542 2,353
Slide 21: Stockholders' equity and net cash/(debt)
Stockholders’ equity and net cash/(debt) 21 €4,910m €4,163m -€433m -€410m Dec. 31, 2004 June 30, 2005 Stockholders' equity Net cash/(debt) Æ First Half 2005 Results
Slide 22: Net debt
Net debt 22 (€m) Dec 31, 2004 Change June 30, 2005 Net debt 433 (23) 410 EADS net cash 640 27 667 T-Online 626 (581) 45 Net debt 1,699 (577) 1,122 (excluding EADS & T-Online) Æ First Half 2005 Results
Slide 23: Financial indicators by business segment
23 Financial indicators by business segment Æ First Half 2005 Results
Slide 24: Net sales by business segment
Net sales by business segment 24 (€m) H1 2004 H1 2005 FY 2004 Books 575 720 1,420 Press 908 909 1,848 Distribution Services 1,751 1,799 3,675 Lagardere Active 268 306 558 Lagardère Media 3,502 3,734 7,501 EADS 2,190 2,418 4,795 TOTAL 5,692 6,152 12,296 Æ First Half 2005 Results
Slide 25: Recurring EBIT before associates
Recurring EBIT before associates 25 (€m) H1 2004* H1 2005 FY 2004* Books 34 53 164 Press 72 68 168 Distribution Services 41 40 101 Lagardere Active 30 34 37 Lagardère Media 177 195 470 EADS 151 221 350 Other activities 3 (1) 3 Recurring EBIT before 331 415 823 associates * After reallocating 2004 co
Slide 26: Lagardère Media – Profit & Loss Statement
Lagardère Media – Profit & Loss Statement 26 (€m) H1 2004* H1 2005 FY 2004* Net sales 3,502 3,734 7,501 Recurring EBIT before associates 177 195 470 Income from associates 32 33 41 Non-recurring items 2 (3) 35 EBIT 211 225 546 Net interest expense (26) (25) (59) Net profit before tax & minority inte
Slide 27: Lagardère Active Broadcast & Broadband
Lagardere Active Broadcast & Broadband 27 Net sales & Recurring EBIT before associates (€m) H1 2004* H1 2005 Broadcast Broadband Lagardere Broadcast Broadband Lagardere Active Active Radio TV Radio TV Net sales 122 101 45 268 130 123 53 306 Recurring EBIT before 30 1 (1) 30 32 8 (6) 34 associates *
Slide 28: Lagardère Media – Cash Flow Statement
Lagardère Media – Cash Flow Statement 28 (€m) H1 2004 H1 2005 FY 2004 Cash flow from operations before interest, taxes & changes in working capital 272 277 684 Changes in working capital (93) (136) 41 Net cash flow from operations 179 141 725 Interest paid & received and income taxes paid (160) (108
Slide 29: Lagardère Media – Cash Flow Statement by business segment (H1 2005)
Lagardère Media - 29 Cash Flow Statement by business segment (H1 2005) (€m) Distribution Lagardere Lagardère Books Press Services Active Media Cash flow from operations before interest, taxes & changes in working capital 68 68 65 76 277 Changes in working capital (82) (16) (30) (8) (136) Net cash fl
Slide 30: Lagardère Media – Cash Flow Statement by business segment (H1 2004)
Lagardère Media - 30 Cash Flow Statement by business segment (H1 2004) (€m) Distribution Lagardere Lagardère Books Press Services Active Media Cash flow from operations before interest, taxes & changes in working capital 49 86 67 70 272 Changes in working capital (70) (29) (4) 10 (93) Net cash flow
Slide 31: EADS – Restated Profit & Loss Statement (H1 2005)
EADS – Restated Profit & Loss Statement (H1 2005) 31 (€m) Amortization/ EADS depreciation of EADS Reclassification 100% fair value EADS 15.091% (as of financial (in Lagardère adjustments to 100% (restated) consolidated by format) items Lagardere) non-current assets Net sales 16,020 16,020 2,418 EBIT
Slide 32: EADS – Profit & Loss Statement
EADS – Profit & Loss Statement 32 (€m) H1 2004 H1 2005 FY 2004 Net sales 2,190 2,418 4,795 Recurring EBIT before associates 151 221 350 Income from associates 7 19 13 Non-recurring items (11) 2 (18) EBIT 147 242 345 Net interest expense (17) (11) (45) Net profit before tax & minority interests 130 2
Slide 33: EADS – Contribution to Lagardère Cash Flow Statement
EADS - Contribution to Lagardère Cash Flow Statement 33 (€m) H1 2004 H1 2005 FY 2004 Cash flow from operations before interest, taxes & changes in working capital 272 322 551 Changes in working capital 8 104 264 Net cash flow from operations 280 426 815 Interest paid & received and income taxes paid
Slide 34: EADS – Contribution to Lagardère consolidated balance sheet
EADS – Contribution to Lagardère consolidated balance sheet 34 (€m) June 30, 2005 EADS Lagardère EADS 100% EADS 100% restatements (restated) 15.091% (restated) Non-current assets 35,760 (5,798) 29,962 4,521 Current assets 32,292 382 32,674 4,931 of which short-term investments & cash 9,836 382 10,21
Slide 35: Lagardère – Net Profit & Loss from Other Activities
Lagardère - Net Profit & Loss from “Other Activities” 35 (€m) H1 2004* H1 2005 FY 2004* EBIT 3 (1) 3 Non-recurring items 0 (2) (5) Net interest expense 2 3 7 Net profit 5 0 5 * After reallocating 2004 corporate costs recharged to Lagardère Media by “Other Activities” using 2005 allocation rates Æ Fi
Slide 36: Lagardère: Summary of Net Profit
Lagardère: Summary of Net Profit 36 (€m) H1 2004 H1 2005 FY 2004 Lagardère Media 185 200 487 EADS 130 231 300 Other Activities 5 0 5 Net profit before tax 320 431 792 Income tax expense (100) (121) (240) Net profit before minority interests 220 310 552 Net profit 192 267 495 Minority interests 28 43
Slide 37: Reconciliation of recurring EBIT before associates to EBIT
37 Reconciliation of recurring EBIT before associates to EBIT Details by business segment Æ First Half 2005 Results
Slide 38: Reconciliation of recurring EBIT to EBIT – H1 2005
Reconciliation of recurring EBIT before associates 38 tEBIT– H1 2005 (€m) Books Press Distribution Lagardere Other Total excl. EADS Total Services Active Activities EADS Lagardère Recurring EBIT before 53 68 40 34 (1) 194 221 415 associates Impairment of PP&E and (1) (1) (1) intangibles Net gain/(lo
Slide 39: Reconciliation of recurring EBIT to EBIT – H1 2004
Reconciliation of recurring EBIT before associates 39 to EBIT – H1 2004 (€m) Books Press Distribution Lagardere Other Total EADS Total Services Active Activities excl. Lagardère EADS Recurring EBIT before 34 72 41 30 3 180 151 331 associates Impairment of PP&E and (1) (1) (1) intangibles Net gain/(l
Slide 40: Reconciliation of recurring EBIT to EBIT – FY 2004
Reconciliation of recurring EBIT before associates 40 to EBIT – FY 2004 (€m) Books Press Distribution Lagardere Other Total EADS Total Services Active Activities excl. Lagardère EADS Recurring EBIT before 164 168 101 37 3 473 350 823 associates Impairment of PP&E and (1) (50) (4) (17) (72) (72) inta
Slide 41: Additional balance sheet information
41 Additional balance sheet information Æ First Half 2005 Results
Slide 42: Lagardère – Debt maturity (excluding EADS)
Lagardère – Debt maturity (excluding EADS) 42 (€m) June 30, 2005 Less than 1 to 5 years Over 5 years Total 1 year Bonds 165 130 467 762 Bank borrowings 91 506 48 645 Finance lease obligations 11 70 4 85 Other long-term debt 202 20 9 231 Short-term borrowings 165 165 TOTAL 634 726 528 1,888 Short-ter
Slide 43: Off balance sheet commitments (excluding EADS)
Off balance sheet commitments (excluding EADS) 43 (€m) June 30, Dec 31, 2005 2004 Commitments to purchase shares from: - minority investors in subsidiaries fully consolidated by Lagardère 40 40 - joint investors in subsidiaries proportionately consolidated by Lagardère 15 39 Commitments given in con
Slide 44: Margin Targets
Margin Targets 44 IFRS French GAAP • after corporate cost re allocation • after SO costs Books 12.0% 11.3% Press 12.0% 11.7% Distribution Services 3.0% 3.5% Lagardere Active 10.0% 8.9% Æ First Half 2005 Results
Slide 45: Significant events
45 Significant events Æ First Half 2005 Results
Slide 46: Books – Overview
46 Æ OVERVIEW 2005 first-half performances: Net sales: up 7.2% on a like-for-like basis up 25.2% on a reported basis Recurring EBIT before associates: up 58% Market context in the first half of 2005: Very weak growth in French publishing market Marked decline in point-of-sale footfall
Slide 47: Books – France
47 Æ FRANCE Literature: Continuing impact of Da Vinci Code (Lattès): 400,000 copies sold year-to-date Anges et Démons (Lattès): 850,000 copies sold since March 2005 Very good performances by Grasset and Calmann-Lévy Education: First half not meaningful for this segment Hachette Educati
Slide 48: Books – France and Spain
48 Æ FRANCE Academic & Trade: Start of year in line with growth and margin targets Proposed sale of Dalloz to Éditions Lefebvre Sarrut announced in June 2005: trade publishing is not regarded as core to Hachette’s consumer publishing business Distribution: Preparations continue for integra
Slide 49: Books – UK and 2005 outlook
49 Æ UK Acquisition of Hodder Headline: a milestone in the expansion of Lagardère First half of 2005 focused on reorganization of Hachette UK Change of management at Octopus Strong sales performances at Orion and Watts Æ 2005 FULL-YEAR OUTLOOK Clear strategy, focused on expansion in: cor
Slide 50: Press – Overview
50 Æ OVERVIEW 2005 first-half performances: Net sales: up 0.6% on a like-for-like basis up 0.2% on a reported basis Recurring EBIT before associates: down 6.0% Market context in the first half of 2005: Tension in magazine advertising market in most countries Intensifying competition for
Slide 51: Press – Magazine publishing: France
51 Æ MAGAZINE PUBLISHING: FRANCE Portfolio News-stand sales ahead overall, subscription sales steady Good performances from Paris-Match, Elle and Entrevue Rest of the portfolio fairly flat Public: Circulation of over 340,000 paid-for copies (source: DSH July 04/June 05) Over 1,150,000
Slide 52: Press – Magazine publishing: International
52 Æ MAGAZINE PUBLISHING: INTERNATIONAL USA: Advertising market under severe pressure, second quarter better than first Russia: TV guides conquering more cities Spain: Satisfactory performance, thanks to launches Italy: Advertising revenues holding steady, decline in circulation halted UK:
Slide 53: Press – Regional daily press and outlook
53 Æ REGIONAL DAILY PRESS Local advertising still performing well Circulation sales steady, with price rise in Nice offsetting volume erosion Marseilleplus freesheet in line with business plan, and enjoying editorial synergies with the Puissanceplus network Good performances from Version Fem
Slide 54: Distribution Services – Overview
54 Æ OVERVIEW 2005 first-half performances: Net sales: up 1.2% on a like-for-like basis up 2.7% on a reported basis Recurring EBIT before associates: down 1.1% on a like-for-like basis (up 1.1% on a reported basis) Retail: Ahead of 2004 thanks to recovery in air passenger traffic and expan
Slide 55: Distribution Services – France
55 Æ FRANCE Relais H: Net sales up 0.8% on first half of 2004 Growth for Tour Eiffel and hospitals networks, SNCF network flat Further diversification as new formats rolled out Press and tobacco markets in decline Aelia: Net sales up 7.1% in the first half of 2005 Trading upturn in a
Slide 56: Distribution Services – Europe
56 Æ EUROPE Belgium: Retail network sales slightly down (by 0.5%) on contraction in the press market Net sales for the AMP press distribution business up 1.1% in H1 2005 (declining press market, but growth in phonecards) Spain: SGEL net sales down 5.5% in the first half of 2005 Part-work
Slide 57: Distribution Services – Eastern Europe
57 Æ EASTERN EUROPE Poland: Retail operations up 26% on network expansion (318 outlets, vs 240 in June 2004) Distribution up 6.8% thanks to growth in the press market Hungary: Sales up 1.1%, despite marked decline in the press market, thanks to growth in the modernized store network (51 ne
Slide 58: Distribution Services – North America, Australia and outlook
58 Æ NORTH AMERICA Net sales for distribution business stable vs H1 2004, despite a declining press market Retail activities up 2.2% on H1 2004 United States: Sales up 3.5% on recovery in airport footfall Canada: 1.7% up on H1 2004 on buoyant air passenger traffic and expansion of Canadi
Slide 59: Audiovisual – Overview
59 Æ OVERVIEW 2005 first-half performances: Net sales: up 12.2% on a like-for-like basis up 14.3% on a reported basis Recurring EBIT before associates: up 13.8% Æ Audiovisual First Half 2005 Results
Slide 60: Audiovisual – Advertising sales houses and radio
60 Æ ADVERTISING SALES HOUSES Net sales up 1% compared with first half of 2004 Growth driven by TV advertising sales, with radio advertising sales flat versus 2004 Æ RADIO Net sales up 8.6% compared with the first half of 2004 International radio sales up 4% on a like-for-like basis France
Slide 61: Audiovisual – Television
61 Æ TELEVISION Net sales up 21% versus first half of 2004 thanks to: Production (up 29%), especially GMT Productions Theme Channels (up 8%) Theme Channels: Good results in the latest round of MediaCabstat audience ratings, for the period from December 27, 2004 to June 12, 2005 Canal J a
Slide 62: Audiovisual – New media
62 Æ NEW MEDIA Changes in scope: Scope now includes: mobile phone content/service activities web/CD-Rom activities July 2005 sale of Lagardere Active Broadband stake in Greenland Interactive Business overview: Net sales up 17% on first half of 2004 Growth driven by strong rise in mob
Slide 63: Lagardère share performance
63 Lagardère share performance Æ First Half 2005 Results
Slide 64: Lagardère share price vs CAC 40 and DJ STOXX Media
LAGARDERE Share Price - 350 64 Lagardere vs. «CAC 40» & «DJ STOXX MEDIA» 300 250 From March 1998* to September 12, 2005 200 €58,45 ** 150 100 Source: DATASTREAM 50 ** 09/12/05 0 1998 1999 2000 2001 2002 2003 2004 2005 LAGARDERE DJ STOXX MEDIA CAC 40 Æ First Half 2005 Results * Arnaud Lagardère appoi
Slide 65: Share price performance – Lagardère vs. CAC40
Share price performance – Lagardère vs. CAC40 65 800 from Jan. 1993* to September 12, 2005 (monthly average) 700 600 500 400 LAGARDERE 300 CAC Index 200 100 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 January, 1993* - Share price base: 100 = € 13 (FRF 85) * Dec. 1992 - Merger