Lagardere Sa · EURONEXT:MMB

Lagardere Sa — Investor Day (May 2014)

42 slides from Lagardere Sa's investor day presentation, May 28, 2014

  1. Slide 1: Lagardère Services: Travel for Growth! Investor Day

    LAGARDÈRE SERVICES : TRAVEL FOR GROWTH! INVESTOR DAY LAGARDÈRE Paris – 28 May 2014

  2. Slide 2: Agenda

    INVESTOR DAY – Paris - May 28th, 2014 AGENDA  A new Lagardère Services  An attractive market on which Lagardère Services is well positioned  A sustained growth exceeding expectations  A widely demonstrated operational excellence  An ambitious Vision for the future 2

  3. Slide 3: Lagardère Services in a snapshot

    LAGARDÈRE SERVICES IN A SNAPSHOT Lagardère Services IFRS key financials (€m, 2013) 3,745 96 1,493 60 2,252 58 HO costs Sales -22 & non-core Recurring EBIT Source: Lagardère Services 3

  4. Slide 4: An ambitious transformation strategy announced in 2012

    INVESTOR DAY – Paris - May 28th, 2014 AN AMBITIOUS TRANSFORMATION STRATEGY ANNOUNCED IN 2012 Source: Lagardère Services Investor Day June 12, 2012 4

  5. Slide 5: In distribution, new investors sought to develop and reinvent the business

    INVESTOR DAY – Paris - May 28th, 2014 IN DISTRIBUTION, NEW INVESTORS SEEKED TO DEVELOP AND REINVENT THE BUSINESS  LS Distribution can be further developed and reinvented. It requires investments Lagardère Services is not ready to consent since its strategic focus is Travel Retail  Lagardère Servic

  6. Slide 6: In travel retail, €328m additional sales since 2011 from internal growth

    INVESTOR DAY – Paris - May 28th, 2014 IN TRAVEL RETAIL, €328M ADDITIONAL SALES SINCE 2011 FROM INTERNAL GROWTH1 Non-exhaustive Warsaw airport Lille station Frankfurt station  10-year contract  5 PoS to be opened:  1,000 sqm food court  3,000 sqm to be Eric Kayser, Marks & opened in May 2013 open

  7. Slide 7: In travel retail, €258m additional sales since 2011 from external growth

    INVESTOR DAY – Paris - May 28th, 2014 IN TRAVEL RETAIL, €258M ADDITIONAL SALES SINCE 2011 FROM EXTERNAL GROWTH1 Non-exhaustive Gerzon Coffee Fellows  12 PoS in Schiphol  c. 20 PoS in train airport over 2,400 stations in Germany sqm  Exclusive master-  Key development in franchise in Travel Luxur

  8. Slide 8: Growth profile on track at mid-plan

    INVESTOR DAY – Paris - May 28th, 2014 GROWTH PROFILE ON TRACK AT MID-PLAN Guidance June 2012 Achievements (From 2011 to 2016) 2011 - 20132 Sales1 +10% +10.5% per annum CAGR 2011 - 2013 Ebitda1 margin +0.5 pt to +1.0 pt +0.3 pt over five years after two years 1. Proportional view 2. LS travel retail

  9. Slide 9: Beyond financial guidance, a truly global travel retailer

    INVESTOR DAY – Paris - May 28th, 2014 BEYOND FINANCIAL GUIDANCE, A TRULY GLOBAL TRAVEL RETAILER Global reach: 30 countries, 150 airports Largest integrated Travel Retailer LS travel retail presence in airports Largest Travel Retailers by sales1 (As of April 30th, 2014) (€bn, 2013) Estimates 3.9 3.8

  10. Slide 10: An experienced team to further grow in travel retail

    INVESTOR DAY – Paris - May 28th, 2014 AN EXPERIENCED TEAM TO FURTHER GROW IN TRAVEL RETAIL Emmanuel Vincent de PLACE ROMET COO LS travel retail COO LS travel retail ASPAC EMEA Luc Frédéric Dag Frédéric MANSION RENAULT RASMUSSEN CHEVALIER CFO EVP HR Chairman & CEO EVP Strategy & Communication 10

  11. Slide 11: Agenda

    INVESTOR DAY – Paris - May 28th, 2014 AGENDA  A new Lagardère Services  An attractive market on which Lagardère Services is well positioned  A sustained growth exceeding expectations  A widely demonstrated operational excellence  An ambitious Vision for the future 11

  12. Slide 12: Travel retail: a highly specialized niche in the retail world

    INVESTOR DAY – Paris - May 28th, 2014 TRAVEL RETAIL: A HIGHLY SPECIALIZED NICHE IN THE RETAIL WORLD Café Leffe, Tours railway station The Fashion Gallery, Changi airport Traveler hubiz, Warsaw metro station Brand A multi-channel and multi-category industry Source: Lagardère Services 12

  13. Slide 13: A €88bn market

    INVESTOR DAY – Paris - May 28th, 2014 A €88BN MARKET Travel Retail market size Estimates (€bn, %, 2013) S = €88bn S = €88bn Foodservice 9% €35bn, 40% 24% RoW 32% 37% €27bn, 31% 40% Travel Essentials 55% 12% €13bn, 14% 54% ASPAC 30% 35% €32bn, 36% Duty Free & Luxury Fashion 64% 60% €40bn, 46% Europe

  14. Slide 14: An attractive industry thanks to sound drivers fuelling top line growth

    INVESTOR DAY – Paris - May 28th, 2014 AN ATTRACTIVE INDUSTRY THANKS TO SOUND DRIVERS FUELLING TOP LINE GROWTH Travel Retail PAX1 SPP2 market growth = growth x growth Stores Travel Retail PAX Category Nationality market growth = growth x growth + commercial + mix effectiveness Growth over + the past

  15. Slide 15: Sound drivers fuel top-line growth (1/2) PAX growth illustration

    INVESTOR DAY – Paris - May 28th, 2014 SOUND DRIVERS FUEL TOP-LINE GROWTH (1/2) PAX GROWTH ILLUSTRATION Sound long-term air traffic perspectives Global trends supporting rail traffic Air traffic evolution Length of high-speed railway lines (billions of passengers, 2013 - 2021) (thousands of km, 2012

  16. Slide 16: Sound drivers fuel top-line growth (2/2) SPP growth illustration

    INVESTOR DAY – Paris - May 28th, 2014 SOUND DRIVERS FUEL TOP-LINE GROWTH (2/2) SPP GROWTH ILLUSTRATION Category growth Commercial effectiveness Nationality mix Heathrow Terminal 2 Top 10 spending nationalities – Weight in airport1 metrics (share of total international pax and of core duty-free sales

  17. Slide 17: Lagardère Services well positioned to benefit from industry growth

    INVESTOR DAY – Paris - May 28th, 2014 LAGARDÈRE SERVICES WELL POSITIONED TO BENEFIT FROM INDUSTRY GROWTH LS travel retail consolidated sales @100% breakdown by channel and business line (€bn, %, 2013) 2% S = €2.9bn Foodservice €0.2bn, 7% 9% 25% Travel Essentials 36% €1.5bn, 52% 91% 59% Duty Free & L

  18. Slide 18: Attractive industry triggering high return, yet with very different P&L profiles

    INVESTOR DAY – Paris - May 28th, 2014 ATTRACTIVE INDUSTRY TRIGGERING HIGH RETURN, YET WITH VERY DIFFERENT P&L PROFILES Illustrative An Infrastructure Manager (IM) has a duty-free contract to tender / a subsidiary running the duty-free to outsource… Option A Iso-IRR Option B The IM favors high rents

  19. Slide 19: Growing sophistication required to seize growth and maintain profits

    INVESTOR DAY – Paris - May 28th, 2014 GROWING SOPHISTICATION REQUIRED TO SEIZE GROWTH AND MAINTAIN PROFITS Marketing Operations SNCF: 300 PoS, the vast majority to be refitted within 18 months Business development …and more! Abu Dhabi Airports unveils upcoming tender, Feb. 2014 Source: Lagardère Ser

  20. Slide 20: Lagardère Services' integrated business model

    INVESTOR DAY – Paris - May 28th, 2014 LAGARDERE SERVICES’ INTEGRATED BUSINESS MODEL: A DIFFERENTIATING MODEL DELIVERING TOP LINE GROWTH & a local …delivering A central development adaptation… growth Consolidated sales @100% (€bn, % CAGR, 2011-13) Duty Free core Aelia Duty Free, L’Occitane Duty Free

  21. Slide 21: Possible industry consolidation, especially in duty free

    INVESTOR DAY – Paris - May 28th, 2014 POSSIBLE INDUSTRY CONSOLIDATION, ESPECIALLY IN DUTY FREE Estimates Top Travel Retailers’ relative size vs. LS travel retail (Base 100 for LS travel retail, 2013 pro-forma1) Travel Retail Travel Essentials Foodservice Duty Free & Luxury Top 5 market share 19% 27%

  22. Slide 22: Agenda

    INVESTOR DAY – Paris - May 28th, 2014 AGENDA  A new Lagardère Services  An attractive market on which Lagardère Services is well positioned  A sustained growth exceeding expectations  A widely demonstrated operational excellence  An ambitious Vision for the future 22

  23. Slide 23: Strong growth of travel retail over the period

    INVESTOR DAY – Paris - May 28th, 2014 STRONG GROWTH OF TRAVEL RETAIL OVER THE PERIOD Lagardère Services IFRS consolidated sales (€m,%, 2011 - 2013) +0.6% 3,724 3,745 936 Distribution 1,041 1,493 1,737 40% 47% 557 Integrated Retail -14% 696 2,252 1,986 60% 53% +13% 2011 2013 Source: Lagardère Service

  24. Slide 24: Following LS Distribution disposal, a pure travel retail player with €2.4bn sales

    INVESTOR DAY – Paris - May 28th, 2014 FOLLOWING LS DISTRIBUTION DISPOSAL, A PURE TRAVEL RETAIL PLAYER, WITH €2.4bn SALES, Lagardère Services IFRS consolidated sales after Distribution disposal (€m, 2013) 2013 after Other perimeter Distribution Total 2013 Distribution1 impacts2 disposal 1,493 (1,379)

  25. Slide 25: LS travel retail consolidated sales @100% up by 26% over the period

    INVESTOR DAY – Paris - May 28th, 2014 LS TRAVEL RETAIL CONSOLIDATED SALE @ 100% UP BY 26% OVER THE PERIOD, CONSISTENTLY WITH GUIDANCE Bridge LS travel retail1 IFRS consolidated sales to consolidated sales @100% (€m, 2013) Financial markets Travel Retail benchmark benchmark 255 2,853 254 2,598 2,344

  26. Slide 26: Internal growth remains the main development path

    INVESTOR DAY – Paris - May 28th, 2014 INTERNAL GROWTH REMAINS THE MAIN DEVELOPMENT PATH, HOWEVER SUCCESSFUL ACQUISITIONS ARE ACCELERATING THE GROWTH LS travel retail consolidated sales @100% growth breakdown by nature (€m, 2011 - 2013) 258 2,853 328 149 Tenders won +26% 2,267 179 Existing contracts

  27. Slide 27: An international player operating across all geographies and all channels

    INVESTOR DAY – Paris - May 28th, 2014 AN INTERNATIONAL PLAYER OPERATING ACROSS ALL GEOGRAPHIES AND ALL CHANNELS LS travel retail consolidated sales @100% breakdown by geography and channel (€bn, %, 2013) S = €2.9bn Others1 €0.5bn, 18% 13% (vs. 21% in 2011) 15% 32% 3% Stations €0.6bn, 22% 27% (vs. 24

  28. Slide 28: Growth fueled by duty free & luxury and foodservice business lines

    INVESTOR DAY – Paris - May 28th, 2014 GROWTH FUELED BY THE FAST GROWING AND MORE PROFITABLE DUTY FREE & LUXURY AND FOODSERVICE BUSINESS LINES… LS travel retail consolidated sales @100% by business line (%, 2011 – 2014 B) Foodservice 6% +41% 8% + 13% Travel Essentials 55% +7% 51% + 46% Duty Free & Lu

  29. Slide 29: Driving a favorable mix evolution

    INVESTOR DAY – Paris - May 28th, 2014 … DRIVING A FAVORABLE MIX EVOLUTION LS travel retail consolidated sales @100% by product category (%, 2011 - 2014 B) Other 26% 24% 22% Food & Beverage 7% 10% 17% Print 16% 14% 11% Liquor 6% 6% 6% Tobacco 25% 24% 20% Fashion 5% 6% 11% Perfume & Cosmetics 15% 16%

  30. Slide 30: LS Distribution disposal: a €50m impact on recurring EBIT

    INVESTOR DAY – Paris - May 28th, 2014 LS DISTRIBUTION DISPOSAL: A €50M IMPACT ON THE RECURRING EBIT BEFORE ASSOCIATES Lagardère Services IFRS Recurring EBIT before associates after Distribution disposal (€m, 2013) Other perimeter 2013 Total 2013 Distribution1 impacts2 Pro forma 60 (56) (4) 2 58 60 H

  31. Slide 31: LS travel retail EBITDA increased by 31%, above guidance

    INVESTOR DAY – Paris - May 28th, 2014 LS TRAVEL RETAIL EBITDA INCREASED BY 31%, ABOVE GUIDANCE LS travel retail bridge to Normalized Operating Ebitda (proportional) (€m, %, 2011; 2013) 128 110 18 +31% 98 50 60 Recurring Depreciation & Normalized LS Share Normalized 2011 Ebit before Amortization oper

  32. Slide 32: Increasing investment supporting a faster development path

    INVESTOR DAY – Paris - May 28th, 2014 INCREASING INVESTMENT SUPPORTING A FASTER DEVELOPMENT PATH Annual LS travel retail consolidated sales Annual total capital expenditures incl. @100% growth acquisitions in LS travel retail (€m, % CAGR, 2006 - 2013) (€m, 2006 - 2013) 319 +12% 2,853 Financial Tangi

  33. Slide 33: Continued increase of contract maturity and above 90% renewal rate

    INVESTOR DAY – Paris - May 28th, 2014 CONTINUED INCREASE OF LS TRAVEL RETAIL MATURITY RATE AND ABOVE 90% RENEWAL RATE MAINTAINED LS travel retail consolidated sales @100% breakdown by contract maturity (%, 2011 - 2013) €2.3bn €2.9bn Below one year 8% 8% 37% Renewal rate Two to five years 44% exceeds

  34. Slide 34: Favorable evolution of business line mix expected

    INVESTOR DAY – Paris - May 28th, 2014 FAVORABLE EVOLUTION OF BUSINESS LINE MIX EXPECTED LS travel retail consolidated sales @100% by business line (%, 2011 - 2016 E) Foodservice 5% 15% Travel Essentials 55% 40% 40% 45% Duty Free & Luxury 2011 2016 E Source: Lagardère Services 34

  35. Slide 35: Favorable evolution of channel mix expected

    INVESTOR DAY – Paris - May 28th, 2014 FAVORABLE EVOLUTION OF CHANNEL MIX EXPECTED LS travel retail consolidated sales @100% by channel (%, 2011 - 2016 E) Others 21% 16% 16% Stations 24% 68% Airports 55% 2011 2016 E Source: Lagardère Services 35

  36. Slide 36: Agenda

    INVESTOR DAY – Paris - May 28th, 2014 AGENDA  A new Lagardère Services  An attractive market on which Lagardère Services is well positioned  A sustained growth exceeding expectations  A widely demonstrated operational excellence  An ambitious Vision for the future 36

  37. Slide 37: Agenda

    INVESTOR DAY – Paris - May 28th, 2014 AGENDA  A new Lagardère Services  An attractive market on which Lagardère Services is well positioned  A sustained growth exceeding expectations  A widely demonstrated operational excellence  An ambitious Vision for the future 37

  38. Slide 38: Great results achieved thanks to our stakeholders' support

    INVESTOR DAY – Paris - May 28th, 2014 GREAT RESULTS ACHIEVED THANKS TO OUR STAKEHOLDERS’ SUPPORT What we discussed today Source: Lagardère Services 38

  39. Slide 39: Numerous new contracts currently addressable

    INVESTOR DAY – Paris - May 28th, 2014 NUMEROUS NEW CONTRACTS CURRENTLY ADDRESSABLE Illustrative Duty Free & Luxury Travel Essentials Foodservice Multiple categories And many others… Source: Lagardère Services 39

  40. Slide 40: Confidence in our ability to capture some of these opportunities

    INVESTOR DAY – Paris - May 28th, 2014 CONFIDENCE IN OUR ABILITY TO CAPTURE SOME OF THESE OPPORTUNITIES Fantastic portfolio of Pure Travel Retailer concessions Great operational Winning positioning expertise Source: Lagardère Services 40

  41. Slide 41: An increased focus on growth

    INVESTOR DAY – Paris - May 28th, 2014 AN INCREASED FOCUS ON GROWTH External growth Duty Free & Luxury Restructure Foodservice Grow / Transform Travel Essentials Internal growth Surface reflecting sales size Source: Lagardère Services 41

  42. Slide 42: Guidance improved

    INVESTOR DAY – Paris - May 28th, 2014 GUIDANCE IMPROVED LS travel retail1 guidance (€m, %, 2011; 2013; 2016) 2011 Guidance June 2012 Guidance May 2014 2013 (From 2011 to 2016) (From 2013 to 2016) +10% 10.5% +5% to +10% Sales2 CAGR per annum 2011 - 2013 per annum Ebitda2 margin 4.6% +0.5 pt to +1.0 p

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