Lagardere Sa · EURONEXT:MMB
Lagardere Sa — Investor Day (February 2005)
24 slides from Lagardere Sa's investor day presentation, February 2005
Slide 1: Hachette Livre
HACHETTE LIVRE ILAGARDERE LAGARDERE
Slide 2: Table of contents
Table of contents ÎBook publishing is a growing and attractive business 3-6 ÎHow does Hachette Livre capture growth and performance ? 7-9 ÎGrowth drivers of Hachette Livre business portfolio 10-15 Î2004 : the transformation 16-21 ÎWhy is Hachette Livre well positioned to deliver future performance ?
Slide 3: Book publishing is a growing and attractive business: long life expectancy for books
Book publishing is a growing and attractive business Long life expectancy for books ÎBooks remain the #1 cultural product in most countries 2003 Books Pay TV Video Music Cinema value volume value volume value volume (France) value volume value volume Retail sales > €4,5 bn n/a € 2,8 bn n/a € 2,2 bn
Slide 4: Book publishing is a growing and attractive business: Why?
Book publishing is a growing and attractive business Why ? Î Durable demand thanks to the book’s following features : z The key to access reading and, as such, all formats of information, entertainment and culture. z Its “symbolic” place in almost all cultures : children are exposed to books from bi
Slide 5: Book publishing is a highly segmented market (1/2)
Book publishing is a growing and attractive business Book publishing is a highly segmented market with diversified business models (1/2) Trade Education Prof./ Scient. / 63% 24% Techn. 13% Literature Reference & « K-12 » Illustrated books College / University Fiction - Non Fiction Partworks Primary
Slide 6: Book publishing is a highly segmented market (2/2)
Book publishing is a growing and attractive business Book publishing is a highly segmented market with diversified growth rates (2/2) ÎIn most countries, behind the overall market growth, the various segments show highly different trends z Zoom on the French book market : CAGR 1998-2003 : +2,8% CAGR
Slide 7: How does Hachette Livre capture growth and performance?
How does Hachette Livre capture growth and performance ? 1992-95 : recovery 1996-2003 : growth & internationalisation & strategic repositioning Continued growth of the publishing External growth both in France and abroad, together with segments in France has started to offset investments in Partwork
Slide 8: Significant improvement in profitability
How does Hachette Livre capture growth and performance ? This strategy has allowed Hachette Livre to show significant improvement in profitability… PROFITABILITY GROWTH Turnover (in M€) Op. profit (in €m) Op. margin 11,1% 12,0% 120 9,6% 10,0% 100 950 959 7,7% 107 7,0% 8,0% 846 80 6,3% 91 830 5,8% 6,
Slide 9: Very high cash conversion rates
How does Hachette Livre capture growth and performance ? … with very high cash conversion rates CASH FLOW % CASH FLOW / OP. PROFIT Free cash flow * (in M€) 102 120% 91% 95% 100% 90% 81% 80% 76% 74% 67 66% 60% 53 40% 42 39 37 38 20% 0% 1997 1998 1999 2000 2001 2002 2003 1997 1998 1999 2000 2001 2002
Slide 10: Partworks: one of the key growth drivers in the last years
Growth drivers of Hachette Livre business portfolio Partworks : one of the key growth drivers in the last years ÎKey success factors of the business model include : z Marketing-driven selection of collectible topics and heavy upfront launching investments in order to generate long term customer loya
Slide 11: Literature: Fiction / Non-fiction (France)
Growth drivers of Hachette Livre business portfolio Literature : Fiction / Non-fiction (France) The business model is based on : Î The combination of z Innovative small first edition imprints (Grasset, Fayard, Stock, Calmann-Lévy, Lattès etc.) Publishing a great number of low-risk titles and enjoy
Slide 12: Education: the company's highly profitable core business (France)
Growth drivers of Hachette Livre business portfolio Education : the company’s highly profitable core business (France) Î High entry barriers due to the important investment required to gain customer access. Î High priority in long term public investment, worldwide Î A cyclical market subject to gove
Slide 13: Illustrated books (France)
Growth drivers of Hachette Livre business portfolio Illustrated books (France) Î Cover the whole range of illustrated books from « useful » to « entertaining » z practical guides and how-to books, travel guides, art books, cartoons Î As well as Children’s books : z Well-known series based on Hachett
Slide 14: Distribution (France)
Growth drivers of Hachette Livre business portfolio Distribution (France) [Maurepas] Î The Hachette Livre distribution is a state of the art warehouse and information system, servicing all our Trade publishing divisions. Î Given the high volumes provided by the Group, this fixed cost-based division
Slide 15: UK Publishing
Growth drivers of Hachette Livre business portfolio UK Publishing Before the acquisition of Hodder Headline, Hachette Livre was #5 in UK Trade publishing with Orion, Octopus and Watts. ÎOrion is one of the most successful commercial Trade publishers in the UK market z 620 new titles in 2004 z Frontl
Slide 16: Acquisition of Hodder Headline
2004 : the transformation Acquisition of Hodder Headline : expansion in Education in the English speaking market continued international growth in worldwide Trade publishing ÎHodder Headline is the # 4 player in the UK trade market and # 6 in the UK textbook publishing market ÎHodder Headline is one
Slide 17: Hodder Headline: balanced business mix and attractive returns
2004 : the transformation Hodder Headline : balanced business mix and attractive returns ÎThe acquisition of Hodder Headline offers Hachette Livre the unique opportunity to: z Replicate in the UK its business model of diversified consumer publishing and distribution z Become the # 2 player in the UK
Slide 18: Spain: with Anaya, Hachette Livre becomes the #1 educational publisher
2004 : the transformation Spain : with Anaya, Hachette Livre becomes the #1 educational publisher Anaya profile : a major diversified Spanish publisher Î With a historical focus on primary and secondary Education z #1 pre-school, #1 primary, #2 secondary z Historical presence in Latin America Î Also
Slide 19: Reference / Education
2004 : the transformation Reference / Education Î Larousse is #1 in France on the monolingual as well as bilingual dictionaries market with market share > 70% z The French dictionaries market is large-sized due to specific historical and cultural reasons Mexico z 80% of French households own a copy
Slide 20: Hachette Livre jumped from rank 11 to 5
2004 : the transformation Hachette Livre jumped from rank 11 to 5 Westermann 207 Klett-Gruppe 208 WSOY 228 Cornelsen 233 Langenscheidt * 250 Taylor & Francis 251 Blackwell Publishing 251 Wolters Kluwer 304 Santillana 334 Mondadori 370 Time Warner Book Group * 423 John Wiley 436 Bonnier Books 525 Edi
Slide 21: Further internationalisation
2004 : the transformation U.K. Further internationalisation Ireland Hachette Partworks Quebec Orion Orion Nether- Total turnover : Hodder Headline lands 50% France Octopus Belgium Germany Poland 50% international France Larousse Hatier Switzerland Austria Mexico Spain Mexique Dunod Hachette Dalloz H
Slide 22: Hachette Livre benefits from a very well-balanced strategic position
Why is Hachette Livre well positioned to deliver future performance ? Key strength for delivering future performance : Hachette Livre benefits from a very well-balanced strategic position Î Hachette Livre is now one of the top multi-lingual / multi-specialist publishers in the worldwide « Consumer »
Slide 23: Management focuses on creativity and cost control
Why is Hachette Livre well positioned to deliver future performance ? Key strength for delivering future performance : Hachette Livre’s management focuses on: ÎPromotion of internal growth through fostering of creativity : z Publishers autonomy and responsibility The publisher is the engine of the
Slide 24: Next steps
Why is Hachette Livre well positioned to deliver future performance ? Next steps ÎIn 2005-06 the Hachette Livre management will dedicate its efforts to build the synergies resulting from the 2004 transformation. ÎWhile focus will be put primarily on organic growth, Îthere will be further consolidati