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Lagardere Sa — Lagardère SCA — Debt Investor Presentation (March 2011)
47 slides from Lagardere Sa's debt investor presentation, March 2011
Slide 1: Fixed Income - Investor Presentation
Fixed Income - Investor Presentation Lagardère S.C.A. March 2011 Dominique D’Hinnin – Co Managing Partner 1
Slide 2: Contents
Contents Overview and outlook….…….….. pages 4 to 8 2010 Highlights….……………….pages 9 to 26 Financial Review 2010.………….pages 27 to 34 Appendix…………………………..pages 35 to 47 2
Slide 3: Disclaimer
Disclaimer 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 the date of the statements
Slide 4: Lagardère Group overview
Lagardère Group overview Media activities : Book publishing Magazine publishing, Retail (esp. in A world leading (education, Audiovisual (radio, TV, travel areas) player in the sport illustrated books, programs production) Press wholesale industry (media and trade) Digital activities distribution ma
Slide 5: Balanced business mix with wide geographic range
Balanced business mix with wide geographic range Well balanced segmental revenue streams with a mix of value and growth businesses Majority of revenue from Europe although increasing contributions from emerging markets FY 2010 Revenue by geographical area 5
Slide 6: Clear strategy for future
Clear strategy for future Focused on four main divisions: Publishing, Active, Services and Unlimited Diversity improves risk profile. Aiming at gaining and maintaining market-leading positions. A pro-active approach towards managing the assets Identify and invest in areas with higher growth: -
Slide 7: Group outlook and guidance
Group outlook and guidance Canal+ France IPO in preparation Postponed on March 16th 2011 due to the bad market conditions after the Japanese events. International magazines disposal Reception of a binding offer from Hearst - €651M enterprise value payable in cash at closing. - Retained real esta
Slide 8: Strategic opportunities/growth drivers
Strategic opportunities/growth drivers • Digital Lagardère • Growth of publishing business Publishing • Growth in emerging markets Lagardère • Advertising market's recovery continues Active • Digital • Global air traffic growth Lagardère • Business diversification continues (product mix, new sites)
Slide 9: 2010 Highlights
© 2010 Highlights lagardere
Slide 10: Key figures
Key figures € m - Provisional figures 2009 2010 ∆% Net sales Modest growth on a reported basis Net sales 7,892 7,966 + 0.9% Decline of 1.8% on a like-for-like basis Recurring EBIT before associates 461 462 + 0.1% Recurring EBIT before associates - o/w Recurring EBIT before Media 463 468 + 1.0% a
Slide 11: Contribution of divisions to recurring EBIT before associates - Media
Contribution of divisions to recurring EBIT before associates - Media Recurring EBIT before associates – Media + 1% 468 Lagardère Publishing: a dip in recurring EBIT before associates in line with the 463 expected decline in blockbuster sales, after an exceptional 2009. Lagardère Active: an increase
Slide 12: Operational Review
the short second life of Mauvaise fille STEPHENIE MEYER AUTHOR OF THE #1 BESTSELLING TWILIGHT SAGA Lagardere
Slide 13: Lagardère Publishing
2010 Full-Year Results Lagardère Publishing A soft landing was experienced in 2010 after an exceptional 2009 (Stephenie Meyer's Twilight saga). 2008: 35 million copies sold worldwide 2009: 45 million copies sold worldwide 2010: 11 million copies sold worldwide Leadership positions affirmed on
Slide 14: Financial data 2010 (1/2)
Financial data 2010 (1/2) Net sales: €2,165m down 4.8% on a reported basis and down 6.3% on a like-for-like basis. Better-than-expected changes, after the exceptional level in 2009: - Decline in the US, UK and Illustrated Books in France, related to the expected end of the Stephenie Meyer phenom
Slide 15: Financial data 2010 (2/2)
Financial data 2010 (2/2) Profitability Change in product mix: lower impact of blockbusters in 2010 (in 2009: Twilight saga by Stephenie Meyer, Dan Brown, etc.). Investments in digital, which accounted for 8% of sales in the US in 2010. Operating EBIT before associates (€ m) 15 15
Slide 16: Operational Review
>] Operational Review Lagardere ACTIVE
Slide 17: Financial data 2010 (1/2)
Financial data 2010 (1/2) Net sales: €1,826m • Up 5.9% on a reported basis and up 3.3% on a like-for-like basis. Press: robust growth in advertising, very marked in France, but more mixed in International markets. Audiovisual activities: - Radio: double-digit growth in advertising for Europe 1.
Slide 18: Financial data 2010 (2/2)
Financial data 2010 (2/2) Profitability Significant rise in recurring EBIT before associates: Stellar showing of magazines in France despite the additional losses stemming from Be; Magazines - international: robust momentum, mainly in the US, Russia, and China; Radio stations: growth of Europe
Slide 19: Pro forma figures excluding PMI to be sold and non recurring losses
Pro forma figures excluding PMI* to be sold and non recurring losses 2009 2010 (€m) Lagardère PMI to Virgin Be*** Lagardère PMI to Virgin 17 Be*** Active be 17 Active be sold at end recurring sold recurring sold May 2010 Sales ** 1 026 680 19 / 1 074 742 10 / Recurring 26 5 (14) (2) 58 50 (9) (14) E
Slide 20: Operational Review
Operational Review 20
Slide 21: Financial data 2010 (1/2)
Financial data 2010 (1/2) Net sales: €3,579m Up 5.7% on a reported basis and up 1.7% on a like-for-like basis. Significant growth in Retail, very marked in France and more mixed in international markets. Decline in Distribution activities, but to a lesser extent than in 2009, amid a market dow
Slide 22: Financial data 2010 (2/2)
Financial data 2010 (2/2) Profitability Good performance of our most cyclical activities: Retail in France and airports. Margin recovery in Press Distribution, thanks to cost-cutting efforts launched in 2009. Operating EBIT before associates (€ m) 22
Slide 23: Operational Review
Operational Review 23
Slide 24: Financial data 2010 (1/2)
Financial data 2010 (1/2) Net sales: €396m Down 21.9% on a reported basis and down 23.2% on a like-for-like basis. Gross margin*: €313m vs. €371m in 2009 (-16%) Mixed performance compared to 2009 owing to: - Expected calendar effects; - The non-renewal of some contracts - The impact of the eco
Slide 25: Financial data 2010 (2/2)
Financial data 2010 (2/2) Profitability A contraction in profitability owing to the decline in sales, due to : - Expected calendar effects; - The non-renewal of some contracts - The impact of the economic crisis. Operating EBIT before associates (€ m) Operating EBIT before associates Operating mar
Slide 26: Financial Review 2010
>) Financial Review 2010 lagardere
Slide 27: Financial profile
Financial profile A solid financial situation • Free cash flow: €313m in 2010 • Gearing is stable at 44%, reflecting the health of the Lagardère SCA balance sheet • Evenly-spread debt repayment schedule • A significant liquidity A limited exposure to risk • A limited exposure to currency or interest
Slide 28: Breakdown of 2010 consolidated income statement
Breakdown of 2010 consolidated income statement €65m -€ 184m €462m M€ - €82m - €67m €31m €163m Recurring Income from Non- Net Minority Net income Income tax EBIT before associates recurring/ interest interests attributable to associates non- expense expense the Group operating items Provisional resu
Slide 29: Consolidated income statement
Consolidated income statement 2009 2010 EADS Total EADS Total Lagardère & Non- FY Lagardère & Non- FY €m Media media 2009 Media media 2010 Net sales 7,892 - 7,892 7,966 - 7,966 Recurring EBIT before 463 (2) 461 468 (6) 462 associates Income from associates 29 65 Excluding EADS* 78 - 78 22 - 22 EADS
Slide 30: Consolidated statement of cash flows
Consolidated statement of cash flows €m 2009 2010 Cash flow from operations before interest, taxes & changes in working capital 655 591 Changes in working capital 127 81 Cash flow from operations 782 672 Interest paid and received, and income taxes paid (230) (141) Cash generated by/(used in) operat
Slide 31: Change in net debt, FY 2010 vs. FY 2009
Change in net debt, FY 2010 vs. FY 2009 (€m) 2009 2010 Net debt at start of period (2,619) (1,824) Net cash generated by/(used in) operating and 986 296 investing activities Disposal (acquisition) of treasury shares (2) 5 Dividends (202) (200) Increase/(decrease) in short-term investments (37) 29 Li
Slide 32: Lagardère debt profile at end of 2010
Lagardère debt profile at end of 2010 €1 bn 2014 bond issued Undrawn in September 2009 MLT credit line Cash Interest rate structure : 60% floating 40% fixed Back up liquidity : €1.6bn multicurrency syndicated credit facility with a maturity of 5 years gathering 14 banks Existing covenants : • €473m
Slide 33: Summarized balanced sheet
Summarized balanced sheet Reclassified 2010 2009 2010 (*) Reclassified €m Non-current assets (excl. Investments in associates) 5,206 5,074 (741) 4,333 Investments in associates 2,169 2,061 (1,514) 547 EADS 395 271 271 Other associates 1,774 1,790 (1,514) 276 Current assets (excl. short-term investme
Slide 34: Stockholders' equity and net debt
Stockholders’ equity and net debt €m 2009 2010 Stockholders’ equity 4,082 4,018 Net debt (1,824) (1,772) Gearing 44.7% 44.1% A new syndicated loan of €1,645m for five years replaced in January 2011 a previous syndicated loan of €2.2bn. 34
Slide 35: Appendix
Appendix 35
Slide 36: The advantages of diversity
The advantages of diversity The Lagardère group’s current structure features a balanced and diversified portfolio: Businesses units with steady growth, benefiting from their strong positioning and leadership on solid markets with good fundamentals: - Lagardère Publishing; - Retail. Businesses wi
Slide 37: Key events
Key events The level of activity in 2010 exceeded the level achieved in 2008 and reflect the solid fundamentals of the publishing market. In France • General Literature: a sound performance (several literature prizes) failed to offset the unfavourable base of comparison (solid success of Dan Brown i
Slide 38: Key events (1/2): scope of consolidation
Key events (1/2): scope of consolidation Disposal and deconsolidation of the Virgin 17 TV channel from May 31, 2010. Reclassification in balance sheet of December 31, 2010 as “assets / liabilities held for sale” of: • The 20% stake in Canal+ France which until December 31, 2009 was accounted for by
Slide 39: Key events (2/2): activity
Key events (2/2): activity Press A significant improvement in advertising since the second quarter, both in France and international markets. Circulation was slightly down at comparable structure. In France : - Successful launch of the Be magazine in March 2010; - An advertising performance ahea
Slide 40: Key events
Key events Full consolidation as of February 1, 2010 of Aelia CZ, which operates airport retail outlets in the Czech Republic. A year of sharp improvement, following the crisis, with air traffic* seeing robust growth worldwide (+6.3%), in Europe (+4.4%) and Asia-Pacific (+11.8%). Retail: 70.6% of ne
Slide 41: Key events
Key events Acquisition of Best, a US company specialising in athlete and celebrity representation, consolidated as of April 2010. A decline in 2010 was anticipated on account of: Expected calendar effects: lower number of qualifying matches at the European Cup and World Cup (very partially offset
Slide 42: Adjusted net income (excluding EADS)
Adjusted net income (excluding EADS) €m 2009 2010 Net income attributable to the Group 137 163* Equity-accounted contribution from EADS 49 (43) Equity-accounted contribution from Canal+ France (62) - Amortisation of acquisition-related intangible assets and impairment losses – net of taxes 54 25 Net
Slide 43: Analysis of non-recurring/non-operating items – FY 2010
Analysis of non-recurring/non-operating items – FY 2010 Lagardèr Lagardère Lagardèr Lagardère Non- (€ m) e Total Publishing e Active Services media Unlimited Restructuring costs (3) (22) (7) (8) (50) (90) Gains (losses) on disposals (12) 50 - - 2 40 Impairment losses on goodwill and intangible asset
Slide 44: Analysis of non-recurring/non-operating items – FY 2009
Analysis of non-recurring/non-operating items – FY 2009 Lagardère Lagardère Lagardère Lagardère Non- (€ m) Publishing Active Services Unlimited media Total Restructuring costs (9) (61) (14) (8) (1) (93) Gains/(losses) on disposals - (14) (1) - 539 524 and related risks Impairment losses on goodwill
Slide 45: Principal associates
Principal associates 2009 2010 Balance Income Income (€ m) sheet statement Balance sheet statement EADS 395 (49) 271 43 Canal+ France* 1,507 42 - - Marie Claire** 128 (27) 127 3 Other associates 139 8 149 19 Total 2,169 (26) 547 65 * Reclassified as assets held for sale in 2010. ** After recognition
Slide 46: Debt by maturity as of 31/12/2010
Debt by maturity as of 31/12/2010 1 to 5 >5 (€ m) < 1 year years years Total Bond issues 169 1,249 - 1,418 Bank borrowings 181 664* - 845 Finance lease obligations 2 0 - 2 Liabilities arising from commitments to buy out - 29 1 30 minority interests Other debt 189 2 8 199 TOTAL 541 1,944 9 2,494 Shor
Slide 47: Lagardère IR Team
Lagardère IR Team Anthony Mellor Investor Relations Director Tel: 33 1 40 69 18 02 amellor@lagardere.fr Nathalie FRIZZOLE Investor Relations Tel: 33 1 40 69 67 88 nfrizzole@lagardere.fr Josefin GUSTAVSEN Assistant Tel: 33 1 40 69 19 22 Fax: 33 1 40 69 22 72 jgustavsen@lagardere.fr Address: 4 rue de
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