Lagardere Sa · EURONEXT:MMB
Lagardere Sa — Investor Presentation (March 2012)
53 slides from Lagardere Sa's investor presentation, March 2012
Slide 1: Investor Presentation March 2012
Investor Presentation March 2012
Slide 2: Table of contents
Table of contents 1) Group profile and strategy p. 3 2) 2011 performance p. 16 3) Appendix & group financial review p. 27 2
Slide 3: Group profile and strategy
Lagardere Group profile and strategy
Slide 4: Lagardère is a 100% media Group
Lagardère is a 100% media Group 2nd Publisher worldwide 1st Magazine publisher Leader on European soccer in France market with a portfolio of 30 World leader federations 1st Publisher in Europe 1st TV production group in Travel retail in France 4,000 stores mostly Leader in sports rights in in trave
Slide 5: 1998-2011: Successful business portfolio reorganisation
1998-2011: Successful business portfolio reorganisation REFOCUS ON MEDIA, WITH A BALANCED BUSINESS MIX 1998 2011 2015 Unlimited * Unlimited 36% 12% Media Automotive 23% Closed Active Publishing Active 53% 25% Publishing 52% Services: High tech - Travel retail Services: - Wholesale (to be divested) T
Slide 6: Travel retail, digital, and sports are clear expansion areas
Travel retail, digital, and sports are clear expansion areas Lagardère businesses mapping EXPAND growth Expansion areas Size proportional to revenues Retail Digital media Sports Book International publishing Magazines, Magazine business* Radio, TV Historical core businesses Wholesale press distribut
Slide 7: A diversified and innovative model
A diversified and innovative model ...combining growth A resilient and return to platform... shareholders 1 Resiliency in ...with 2 Publishing development and Print of high growth media... activities... ...while maintaining ...and return 4 to 3 a solid balance shareholders. sheet... 7
Slide 8: Lagardère Publishing: track record
Lagardère Publishing: track record 1 Resilient revenues and double-digit profits Net sales Operating margin €2,273m €2,130m €2,159m €2,165m €2,038m* 13.2% 11.2% 11.4% 11.6% 10.8% 2007 2008 2009 2010 2011 *Excluding the Stephenie Meyer effect, net sales were resilient in 2011 (down 0.3% on a like-for
Slide 9: Lagardère Active: transition to a more resilient profile
Lagardère Active: transition to a more resilient profile 1 1. Reduce exposure to advertising 2. Maintain and develop leadership in France: strong focus on women and news segments Exposure to the advertising market (as % of sales) Performance in magazine circulation better than the market 57% 57% Cir
Slide 10: Lagardère Publishing: growth in digital
Lagardère Publishing: growth in digital 2 E-book: A sound business model 1. Relying on e-reader device penetration and new technologies. Development of e-Pub 3 technology: new book formats (illustrated) available in digital version (interactivity). 2. E-books boom: respectively 20% and 10% of US and
Slide 11: Lagardère Services: growth in travel retail
Lagardère Services: growth in travel retail 2 1. Increase in air traffic 2. Expansion on emerging markets Global long-term Passenger Forecast Lagardère Services Retail revenue in emerging markets * 12 Passengers (billions) CAGR €768m 10 +11% +4.2% 4,5 per year 8 €506m 6 3,1 International 2,2 2,3 2,4
Slide 12: Lagardère Unlimited: growth in the global Sports market
Lagardère Unlimited: growth in the global Sports market 2 1. Sports market growth (media rights, sponsorship, ticketing) in €bn +4% p.a. CAGR -%- 2005- 2009- +6% p.a. 2009 2015 12.9 Other 11% 8% 9.2 Golf 3% 4% Tennis 2% 3% 58.3 45.4 Formula 1 3% 4% 36.2 US Sports 5% 4% Football 8% 4% 2005 2009 2015
Slide 13: Increased presence in emerging markets
Increased presence in emerging markets 2 Emerging markets: x5.5 between 1998 and 2011 Group sales breakdown by region 2011 Emerging countries sales breakdown by region: Emerging countries 4% Eastern 22% Europe Africa North America 25% 12% 1% 11% Latin America 1% Western Europe 26% 32% Asia / France
Slide 14: Focus on return to shareholders
Focus on return to shareholders 3 A proactive remuneration policy with stable A shareholder-friendly use of cash policy ordinary dividends Cumulative cash generated Cumulative use of cash by operations and since year-end 2007 Returns to shareholders, in €m paid in the year disposals Others 6% €4bn O
Slide 15: Sound financial position
Sound financial position 4 2011 : Prudent financial policy focused on diversification of funding sources – Renewal of the syndicated bank loan Debt breakdown (excluding ORAPA) (€1.6bn); 2007 2011 – significant reduction in net bevt -€503m 17% 6% 25% – Gearing lowered to 42% 27% 67% 58% A significant
Slide 16: 2011 Performance
Lagardere 2011 Performance
Slide 17: 2011, a resilient year
2011, a resilient year The Group demonstrated its resiliency : despite a troubled and difficult economic environment, notably in Europe, the Group maintained its revenues. Net sales: 2010 2011 €7 966m €7 657m 2010 Up 0,2% 2011 like-for-like* €7 522m like-for-like €7 540m like-for-like* net sales net
Slide 18: 2011, a year of active business portfolio management
2011, a year of active business portfolio management Accelerated business portfolio management, enabling to reduce exposure to advertising cyclicality Successful disposal of International Magazine Publishing – €648m; – Lower exposure to the international advertising market, which was extremely volat
Slide 19: Major changes to the organisation, strategic goals maintained
Major changes to the organisation, strategic goals maintained Management changes in three divisions: – Lagardère Active: a new Chairman of the Executive Board (Denis Olivennes); – Lagardère Services: a new Chairman and Chief Executive Officer (Dag Rasmussen); – Lagardère Unlimited: appointment of th
Slide 20: Key figures - Group
Key figures - Group Comparable (€m) 2010 2011 Change change* Net sales 7,966 7,657 -3.9% +0.2% Recurring Media EBIT** 468 414 -11.4% -11.1% Consolidated recurring EBIT incl. Non-Media 462 402 -€60m / Net income – Group share 163 (707) ns / Adjusted net income – Group share 284 226 -€58m / Net cash f
Slide 21: Lagardère Publishing: Financial data
Lagardère Publishing: Financial data FY 2011 sales by geographical area FY 2011 sales by activity Other 17% Other Education 23% 20% France 33% Spain 9% Reference Illustrated 4% books 14% US & Canada General 23% UK littérature 18% 39% Comparable* Key figures of FY 2011 : (€m) 2010 2011 Change Change
Slide 22: Lagardère Active: Financial data
Lagardère Active: Financial data FY 2011 sales by geographical area FY 2011 Sales by Activity 2011 splits without PMI (International magazine business) International 12,5% Radio 24% Press 55% France Television 87,5% 21% Key figures of FY 2011: (€m) 2010 2011 Change Comparable change Net sales (a) 1,
Slide 23: Lagardère Services: Financial data
Lagardère Services: Financial data FY 2011 sales by geographical area FY 2011 Sales by Activity Switzerland Asia & 12% Australia Spain 6% Wholesale 12% Other 28% 2011 sales 4% 2011 sales US & -3.2% +4.1% Canada 6% France Retail Eastern 29% 72% Europe 18% Belgium 13% Comparable Key figures of FY 2011
Slide 24: Lagardère Unlimited: Financial data
Lagardère Unlimited: Financial data FY 2011 sales by geographical area FY 2011 Sales by Activity Rest of World Germany 16% Other 21% 16% UK Media rights Asia 6% Marketing 46% 24% rights France 38% 11% Rest of Europe 22% Key figures of FY 2011 : Comparable (€m) 2010 2011 Change change Net sales (a) 3
Slide 25: Lagardère Unlimited 2011: a year of restructuring
Lagardère Unlimited 2011: a year of restructuring Growth in sales as predicted due to a favourable calendar of events. A very disappointing year, to be improved, due to: – non-recurring items (provisions, litigation, uncollected debt), loss-making contracts and the effects of the non-renewal of some
Slide 26: 2012 group outlook and guidance
2012 group outlook and guidance Guidance – For 2012, at constant perimeter (PMI and Russian radio excluded) and exchange rates, the recurring EBIT before associates from media activities should remain stable compared to 2011. This guidance is based on the hypothesis of a stable level of advertising
Slide 27: Appendix: Group Financial Review
APPENDIX Group Financial Review 27
Slide 28: Consolidated income statement
Consolidated income statement 2010 2011 Lagardère Other Total Lagardère Other Total Media activities* Media activities* €m Net sales 7,966 - 7,966 7,657 - 7,657 Recurring EBIT before 468 (6) 462 414 (12) 402 associates Income from associates 22 43 65 33 79 112 Non-recurring/non-operational (136) (48
Slide 29: Consolidated balance sheet as of December 31st
Consolidated balance sheet as of December 31st (€m) 2010 2011 Non-current assets (excl. investments in associates) 4,333 3,626 Investments in associates 2,054 1,771 EADS 271 277 Other associates 1,783 1,494 Current assets (other than short-term investments and cash) 2,695 2,781 Short-term investment
Slide 30: Consolidated statement of cash flows
Consolidated statement of cash flows (€m) 2010 2011 Cash flow from operations before interest, taxes & changes in working capital 591 597 Changes in working capital 81 (170) Cash flow from operations 672 427 Interest paid & received, income taxes paid (141) (170) Cash generated by operating activiti
Slide 31: Stockholders' equity and net debt
Stockholders’ equity and net debt (€m) 2010 2011 Stockholders’ equity 4,018 3,024 Net debt (1,772) (1,269) Gearing 44.1% 42.0% A significant effort at reducing the level of debt €1,772 m €1,269m Net debt/ 2,8x EBITDA* 2,0x 2010 2011 *See definition in appendices. 31
Slide 32: Main associates
Main associates 2010 2011 Balance Income Balance Income (€m) sheet statement sheet statement EADS 271 43 277 79 Canal+ France 1,507 - 1,197 (310) Marie Claire 127 3 125 6 Other associates 149 19 172 27 Total 2,054 65 1,771 (198) 32
Slide 33: Off balance sheet commitments
Off balance sheet commitments (€m) 2010 2011 Commitments to purchase shares from third parties (other than 14 25 minority interests) Commitments given in connection with ordinary activities: - contract guarantees and performance bonds 70 73 - guarantees in favour of third parties or non-consolidated
Slide 34: Non-recurring/non-operating items – FY 2011
Non-recurring/non-operating items – FY 2011 Lagardère Other Group (€m) Media activities* Total Restructuring costs (41) (41) Gains/(losses) on disposals 18 (1) 17 Impairment losses on goodwill (585) (310) (895) and intangible assets Amortisation of acquisition-related intangible assets and other acq
Slide 35: Cash flow statement data - Publishing
Cash flow statement data - Publishing (€m) 2010 2011 Cash flow from operations before interest, taxes & changes in working capital 276 228 Changes in working capital 27 (42) Cash flow from operations 303 186 Interest paid & received, income taxes paid (87) (56) Cash generated by operating activities
Slide 36: Cash flow statement data - Active
Cash flow statement data - Active (€m) 2010 2011 Cash flow from operations before interest, taxes 122 123 & changes in working capital Changes in working capital 22 (69) Cash flow from operations 144 54 Interest paid & received, income taxes paid (60) (75) Cash generated by/(used in) operating activ
Slide 37: Cash flow statement data - Services
Cash flow statement data - Services (€m) 2010 2011 Cash flow from operations before interest, taxes 158 153 & changes in working capital Changes in working capital 10 (37) Cash flow from operations 168 116 Interest paid & received, income taxes paid (23) (30) Cash generated by operating activities 1
Slide 38: Cash flow statement data - Unlimited
Cash flow statement data - Unlimited (€m) 2010 2011 Cash flow from operations before interest, taxes 100 103 & changes in working capital Changes in working capital (11) (17) Cash flow from operations 89 86 Interest paid & received, income taxes paid (18) (30) Cash generated by operating activities
Slide 39: For the record: definitions of Recurring Media EBIT and EBITDA
For the record : definitions of Recurring Media EBIT and EBITDA Recurring Media EBIT of consolidated companies is defined as the difference between result before financial charges and tax and the following items of the profit and loss statement: – Contribution of associates – Gains or losses on disp
Slide 40: Dividend
Dividend A policy of maintaining a stable dividend payout, representing around 75% of adjusted net earnings per share (excluding EADS). 1,4 75% 80% 1,30 € 1,30 € 1,30 € 1,30 € 1,30 € 70% 1,2 63% 1,20 € 57% 58% 55% 1,10 € 60% 1 1,00 € 48% 47% 50% 0,90 € 42% 43% 0,8 Dividend per Share (€) 40% 0,6 30%
Slide 41: Strategy: activities across the whole media value chain
Strategy: activities across the whole media value chain RIGHTS AND AGREGATION DISTRIBUTION CONTENT 41
Slide 42: Group profile – 2011
Group profile – 2011 Net sales by division Recurring EBIT by division Unlimited 6% Services Publishing 27% 25% Publishing Services Active 52% 48% Active 19% 23% Note: Recurring EBIT - 2011 - Unlimited: -€6m Net sales by geographic area Asia-Pacific Other Rest of 7% 2% Europe 8% France 36% USA & Cana
Slide 43: Shareholding structure
Shareholding structure Capital at end December 2011 Number of shares 131,133,286 Number of voting rights 163,985,023 Share capital at end 2011 Voting rights at end 2011 French institutional French institutional investors investors 18.61% Retail Retail investors 19.63% investors Qatar * 10.52% 8.53%
Slide 44: 2011-2015 calendar
2011-2015 calendar Historical cycle Future cycle 2008 2009 2010 2011 2012 2013 2014 2015 Euro Final Phase Euro Qualifiers World Cup Qualifiers Asian Cup Olympic Tournament Qualifiers World Cup Qualifiers 1 1 Africa Cup IAAF World Championships Calendar effect Year on Year Positive Impact on Lagardèr
Slide 45: Active – Reminder: disposal of PMI in 2011
Active – Reminder: disposal of PMI in 2011 Disposal of International Magazine Publishing (PMI): – Deconsolidation on May 31, 2011, of PMI activities, sold off in the following 13 countries: United States, Italy, Spain, Japan, Netherlands, Hong Kong, Mexico, Taiwan, Canada, Germany, Russia, Ukraine a
Slide 46: e-Books: Answer to potential threat (1/5)
e-Books: Answer to potential threat (1/5) Risk # 1 : Self-publishing “Big ticket authors will publish themselves online” – But who will pay them their big advances up front ? – Who will help them improve their copy ? – Who will manage their promo tours and their web sites ? – Who will do their marke
Slide 47: e-Books: Answer to potential threat (2/5)
e-Books: Answer to potential threat (2/5) Risk # 2 : Disintermediation “Large e-tailers will become publishers” – The largest e-tailer (Amazon) only commands a 15% market share (print & ebook). Who wants to limit his audience to such a small fraction of the market ? – Who can be sure his/her e-publi
Slide 48: e-Books: Answer to potential threat (3/5)
e-Books: Answer to potential threat (3/5) Risk # 3 : Piracy “Why buy e-books when it’s so easy to download them illegally ?” – DRMs and piracy tracking agencies are a good deterrent. – The demographics of books buyers are not similar to those of music consumers (older, more affluent, more law-abidin
Slide 49: e-Books: Answer to potential threat (4/5)
e-Books: Answer to potential threat (4/5) Risk # 4 : e-tailer market dominance “A high retail price policy is unsustainable when access to market is controlled by a few huge players ” – So far, no e-tailer has been able to dominate the market. – Market shares are volatile as the « big Five » (Amazon
Slide 50: e-Books: Answer to potential threat (5/5)
e-Books: Answer to potential threat (5/5) Risk # 5 : Profitability “Migrating from print to digital will negatively impact the profitability of the publishing industry” – Many high margin books (illustrated, coffee-table, how-to, boxes…) still don’t lend themselves to digitization. – School book dig
Slide 51: 2012 Investor Calendar
2012 Investor Calendar May 3rd 2012: General meeting of Shareholders – 10.00 am CET at the Carrousel du Louvre in Paris May 10th 2012: Q1 2012 sales – 8.00 amCET June 12th 2012: investor half-day on Travel retail – 9:00 am– 13:00 am CET in Paris August 30th 2012: 2012 half-year results – 5.40 pm CET
Slide 52: Lagardère IR Team
Lagardère IR Team Anthony MELLOR Head of Investor Relations Josefin GUSTAVSEN Tel: 33 1 40 69 18 02 Assistant amellor@lagardere.fr Tel: 33 1 40 69 19 22 Fax: 33 1 40 69 22 72 Sophie BARBOSA jgustavsen@lagardere.fr Investor Relations Deputy Head Tel: 33 1 40 69 67 88 sbarbosa@lagardere.fr Address: 4
Slide 53: 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