Lagardere Sa · EURONEXT:MMB
Lagardere Sa — Investor Day (June 2006)
36 slides from Lagardere Sa's investor day presentation, Jun 1, 2006
Slide 1: Investor Day June 01, 2006
INVESTOR DAY June 01, 2006
Slide 2: A long history of growth and acquisitions
Books - A longstanding commitment to profitable growth - Investor Day June 01, 2006 A long history of growth and acquisitions 1826 1980 1996 1998 2000 2001 2003 2004 2006 Hachette Hachette is is founded founded Acquisition Acquisition ofof British British Acquisition Acquisition of of Time Time by L
Slide 3: Focused on the markets where paper will prevail
Books - A longstanding commitment to profitable growth - Investor Day June 01, 2006 Focused on the markets where paper will prevail Book publishing Consumer Professional Trade* Education* 67% 33% Literature / « K-12 » Illustrated Reference & Fiction - Non Primary / Secondary books Partworks Fiction
Slide 4: From local leadership to global presence
Books - A longstanding commitment to profitable growth - Investor Day June 01, 2006 From local leadership to global presence Benchmark 2005 (Trade & Education) including the acquisition of Time Warner Book Group in € Millions Pearson 4,209 Mc Graw Hill Education 2,151 Hachette Livre 2,104 Hachette L
Slide 5: A significant transformation: from French to multi-local leader
Books - A longstanding commitment to profitable growth - Investor Day June 01, 2006 A significant transformation : from French to multi-local leader Split in sales by country (1997-2005) 100% Other 12% Other 31% Other 50% Other 62% Spain 88% UK USA UK Spain 69% UK Spain 50% 50% France Spain France 3
Slide 6: Healthy organic growth and acquisitions have fuelled expansion
Books - A longstanding commitment to profitable growth - Investor Day June 01, 2006 Healthy organic growth and acquisitions have fuelled expansion … Hachette Livre like-for-like sales analysis (1996-2005, € Millions) 2,104 11 Discontinued Business* + 3.9% p.a. organic + 11.8% p.a. external 1,327 200
Slide 7: Hachette Livre has more than doubled its size in three years
Books - A longstanding commitment to profitable growth - Investor Day June 01, 2006 … and Hachette Livre has more than doubled its size in three years Æ Hachette Livre’s targets - formulated in 2003 - have been met: To be at the core of the consolidation of the French and Spanish markets (acquisit
Slide 8: With growth also came a substantial profitability improvement
Books - A longstanding commitment to profitable growth - Investor Day June 01, 2006 With growth also came a substantial profitability improvement Sales and operating margin (2000-2005, € Millions, and % of sales) 1,644 Sales, French GAAP standards Sales, IFRS standards 1,432 1,420 Operating margin 9
Slide 9: Better performance than top industry player averages
Books - A longstanding commitment to profitable growth - Investor Day June 01, 2006 Better performance than top industry player averages Operating Profit / Sales* (%, 2004) 12.6% 12.1% 8.8% 6.9% Market average Market average Trade Market with Hachette Hachette Livre Education Livre mix * Benchmark o
Slide 10: The book market continues to offer solid growth prospects
Books - Solid growth prospects - Investor Day June 01, 2006 The book market continues to offer solid growth prospects Æ The market in which Hachette Livre operates is growing In emerging markets, books embody the access to knowledge (management books, testimonials, self-help books) and education
Slide 11: The global book market is growing, even in industrialized countries
Books - Solid growth prospects - Investor Day June 01, 2006 The global book market is growing, even in industrialized countries Market size 2004 et CAGR 2000-2004 (publishers net sales) Developed markets Emerging markets 10.0% 10.0% 10.0% 9.0% 8.6% 8.0% 8.0% 6.0% CAGR 6.6% 6.0% 4.0% 4.0% 3.3% 4.0% 2
Slide 12: Marketing and segmentation have fuelled market growth
Books - Solid growth prospects - Investor Day June 01, 2006 Marketing and segmentation have fuelled market growth Marabout turnover vs. Market turnover 50 CAGR = 21.4% 45 (vs. market at 4.0%) 40 38.2 35 32.6 28.5 € 15 30 25.4 25 18.8 20 € 25 14.5 15 10 5 € 10 0 2000 2001 2002 2003 2004 2005 € 8 Mara
Slide 13: New segments have emerged
Books - Solid growth prospects - Investor Day June 01, 2006 New segments have emerged CAGR by Segment US UK France 44.6% 30.6% 23.0% 16.3% 8.1% 8.6% Book Market 4.0% CAGR 2.8% 2.3% 2000-2004 Religious Audio-Books Religious Humour Partworks Mangas 2000-2005 2004-2005 2003-2005 2003-2005 2003-2004 200
Slide 14: Books have their share of innovation breakthroughs
Books - Solid growth prospects - Investor Day June 01, 2006 Books have their share of innovation breakthroughs Hyper-segmentation (e.g. collection, price architecture) 44 000 (2000’s) Segmentation (e.g. tourism, children, self 25 000 help) (1990’s) Paperback 15 000 INTERNET (1950’s) Illustrated TELE
Slide 15: Internet reach and book sales have grown in parallel
Books - Solid growth prospects - Investor Day June 01, 2006 Internet reach and book sales have grown in parallel Weekly hours spent in media-related activities Internet penetration vs. book Non-users vs. experienced Internet users, in the US industry growth in the US (hours, 2004) P2P and Ipod Liste
Slide 16: Internet becomes a new media for books
Books - Solid growth prospects - Investor Day June 01, 2006 Internet becomes a new media for books Internet is a new sales Internet complements Internet is a new media to channel textbooks promote books • The development of on-line • Textbooks are the inescapable • Web sites offer new bookstores enh
Slide 17: The web offers new opportunities to promote brands and books
Books - Solid growth prospects - Investor Day June 01, 2006 The web offers new opportunities to promote brands and books Routard.com 2004/2003 2005/2004 Change in # of copies sold + 3% + 6% Change in # of pages read + 42% + 75% page 17
Slide 18: The development of on-line bookstores enhances books visibility
Books - Solid growth prospects - Investor Day June 01, 2006 The development of on-line bookstores enhances books visibility Share of on-line sales Leaders actively promote the depth and breadth of their offer (%, 2004) #1 most visited merchant website in Europe in 2002 (17.3 M visitors) USA 10.5% "O
Slide 19: Digital products and services create additional opportunities in education
Books - Solid growth prospects - Investor Day June 01, 2006 Digital products and services create additional opportunities in education Æ New products and services are developed, for which brands are of key importance: services to teachers and schools, performance evaluation systems, independent cour
Slide 20: Hachette Livre has developed strong digital know-how in education
Books - Solid growth prospects - Investor Day June 01, 2006 Hachette Livre has developed strong digital know-how in education Production of digital Diffusion/ Distribution of Schools Education tools digital educative content Digital Work Environment Definition •Market of digital education supports i
Slide 21: Our business model provides further organic growth prospects
Books - A business model based on checks and balances - Investor Day June 01, 2006 Our business model, based on a balanced mix of activities, provides further organic growth prospects Æ The business model is based on A balanced mix of activities Balance between the cyclical high margin education
Slide 22: Hachette Livre has a balanced portfolio
HACHETTE LIVRE : Books - A business model based on checks and balances - Investor Day June 01, 2006 Hachette Livre has a balanced portfolio Hachette Livre 2005 pro-forma turnover* Other Distribution 7% 1% Education** Partworks 10% 24% 5% Reference 11% Illustrated 42% Literature * Hachette Livre 2005
Slide 23: International presence in all key market segments
HACHETTE LIVRE : Books - A business model based on checks and balances - Investor Day June 01, 2006 Hachette Livre has international presence in all key market segments International markets Local markets PARTWORKS TRADE • Hachette Livre (FR) • Hachette Collections • Octopus, Orion, (FR) Hodder Head
Slide 24: The virtuous circle of leadership
Books - Contributor to the consolidation of the industry - Investor Day June 01, 2006 The virtuous circle of leadership Commercial Publishing Manufacturing Distribution Presence Æ Magnet for best Æ Economies of Æ Regular presence in Æ Ability to compete for selling authors, as scale in: point of sal
Slide 25: Investments required to create brands will benefit the leaders
Books - Contributor to the consolidation of the industry - Investor Day June 01, 2006 Investments required to create brands will benefit the leaders Trade Education Best-selling authors increasingly attracted by A high entry-barrier market, leading imprints and highly concentrated, with few publishi
Slide 26: Entering the UK market, the first step towards international stature
Books - Contributor to the consolidation of the industry - Investor Day June 01, 2006 Entering the UK market, the first step towards international stature Æ The acquisition of Hodder Headline was a unique opportunity for Lagardère To become #2 player in the UK Trade market, the second largest in E
Slide 27: Hodder Headline has a balanced and diversified portfolio
Books - Contributor to the consolidation of the industry - Investor Day June 01, 2006 Hodder Headline has a balanced and diversified portfolio* UK Consumer: 98.2 M£** Hodder Headline sales by activity (%, 2005) Æ Hodder General: £ 39.8 M Æ John Murray: £ 3.6 M General fiction (60%) and non fiction
Slide 28: A strong foothold in the attractive Spanish-speaking book market
Books - Recent additions to the portfolio reinforce the model - Investor Day June 01, 2006 A strong foothold in the attractive Spanish-speaking book market The Spanish market is developed Anaya reinforces the group's presence in the and feeds the Latin American market Spanish speaking world # 1 co
Slide 29: TWBG has demonstrated superior, bestseller-driven, revenue growth
Books - Recent additions to the portfolio reinforce the model - Investor Day June 01, 2006 TWBG has demonstrated superior, bestseller-driven, revenue growth Æ Favorable segment mix, and growing within segments faster than the market Æ Its key strength and market positioning is in identifying and dev
Slide 30: Establishing a US presence in trade, a strategic opportunity
Books - Recent additions to the portfolio reinforce the model - Investor Day June 01, 2006 Establishing a US presence in trade, a strategic opportunity Transatlantic channeling of bestsellers (35 titles) Æ Prior to the acquisition, Hachette Livre was the only top player not present on both sides of
Slide 31: Time Warner Book Group activities
Books - Recent additions to the portfolio reinforce the model - Investor Day June 01, 2006 Time Warner Book Group activities Split in sales by geographic area Split in sales by Imprints (% of net sales, 2005) (% of net sales, 2005) Bulfinch Audio- Other Books ANZ* Young Warner UK 3% 4% Readers 4% 3%
Slide 32: Time Warner Book Group imprints
Books - Recent additions to the portfolio reinforce the model - Investor Day June 01, 2006 Time Warner Book Group imprints Warner Books: mainstream publishing with Little Brown: Hardcover bestseller focus, mass market bias Literary background Æ Hardcover, mass market and trade paperback Æ Hardcover,
Slide 33: Time Warner Book Group imprints
Books - Recent additions to the portfolio reinforce the model - Investor Day June 01, 2006 Time Warner Book Group imprints Young Readers: Series-driven hits on dynamic Nashville: At the forefront of market growth market Æ Juvenile books Æ Include two imprints: Æ Hardbound and Paperbacks (since 2002)
Slide 34: Hachette Livre will contribute to the consolidation of the industry
Books - What's next for Hachette Livre ? Investor Day June 01, 2006 Hachette Livre will contribute to the consolidation of the industry in its three key language clusters Æ Hachette Livre is now ideally positioned to benefit from local markets growth Leader advantage in France, UK, and Spain (Educ
Slide 35: Opportunities for growth in 3 key areas
Books - What's next for Hachette Livre ? Investor Day June 01, 2006 Opportunities for growth in 3 key areas (segments, markets) Market Share Analysis US UK Spain Trade Education Trade Education Trade Education Room for Room for Room for Room for growth Other growth growth growth** 25% Top 2 to 5 30%
Slide 36: In summary
Books - What's next for Hachette Livre ? Investor Day June 01, 2006 In summary … Æ Hachette Livre is one of the few book publishing groups with global reach and multicultural exposure (English, French, Spanish) Æ Thanks to Hachette Livre’s financial performance, the Group provides authors and publis