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Lagardere Sa — Lagardère SCA — Investor Presentation (December 2016)
40 slides from Lagardere Sa's investor presentation, December 2016
Slide 1: Investor Presentation
INVESTOR PRESENTATION December 2016
Slide 2: Disclaimer
DISCLAIMER Certain statements contained in this document are forward-looking statements (including objectives and trends), which address our vision of the financial condition, results of operations, strategy, expected future business and financial performance of Lagardère SCA. These data do not repr
Slide 3: Table of Content
TABLE OF CONTENT 1) Group profile Slide 5 2) Group strategy Slide 9 3) Group performance in H1 2016 Slide 17 4) Guidance and dividend Slide 28 Appendix: Business updates Slide 30 INVESTOR PRESENTATION APRIL 2016 3
Slide 4: Group Profile
GROUP PROFILE
Slide 5: A Diversified Group with Leading Global Brands and Market Positions
A DIVERSIFIED GROUP WITH LEADING GLOBAL BRANDS AND MARKET POSITIONS * World #3 Trade book publisher World #4 in Travel Retail Leading magazine publisher Leader in football in Africa, Asia, 15 French titles England, France and Germany #1 in France, #2 in the UK, More than 4,500 shops in over 30 count
Slide 6: A Worldwide Footprint with an Increasing Presence in North America
A WORLDWIDE FOOTPRINT WITH AN INCREASING PRESENCE IN NORTH AMERICA Breakdown of revenue by geographic area in 2015 35% 34% 34% 32% 12% 13% 10% 10% 7% 8% 2% 3% 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 France Western Eastern USA LATAM, Asia-Pacific Middle East, Europe Europe & Canad
Slide 7: A Diversified Business Mix
A DIVERSIFIED BUSINESS MIX Breakdown of revenue by division in 2015 Breakdown of Recurring EBIT by division in 2015 Lagardère Sports and Entertainment Lagardère Sports and Entertainment 7% 5% Lagardère Lagardère Active Active 13% Lagardère 20% Publishing 31% Lagardère Publishing 49% Lagardère Lagard
Slide 8: Group Strategy
GROUP STRATEGY
Slide 9: Businesses Growth Profile: A Pillars Strategy
BUSINESSES GROWTH PROFILE A 3 pillars strategy Growth potential Invest Digital Travel Retail Sports & Entertainment 3 TV Production Adapt Broadcasting* Book Publishing Distribution 2 1 Magazines Divest INVESTOR PRESENTATION Market position APRIL 2016 *Radio + TV channels. N.B Size proportional to re
Slide 10: Reduce Exposure to Declining Activities
1 REDUCE EXPOSURE TO DECLINING ACTIVITIES Press Distribution and Integrated Retail February 2015 Disposal of Swiss Distribution business (ex Payot Naville Distribution) June 2015 Disposal of US Distribution business (Curtis) February 2016 Disposal of Spanish Distribution business (SGEL) February 201
Slide 11: Adapt Existing Activities and Enhance Leadership Position
2 ADAPT EXISTING ACTIVITIES AND ENHANCE LEADERSHIP POSITION Lagardère Publishing Successful management of the ebook impact with the preservation of the pure agency model (retail price controlled by publishers) in the US and UK digital markets. Reinforcement of our leadership position by synerget
Slide 12: Adapt Existing Activities and Enhance Leadership Position
2 ADAPT EXISTING ACTIVITIES AND ENHANCE LEADERSHIP POSITION STRENGHTENING CORE DEVELOPING BRAND STREAMLINING OUR SALES ACTIVITIES CONSULTING AND DIGITAL PORTFOLIO OF ACTIVITIES SERVICES An international positioning Long term partnerships illustration Long-term partnerships Exclusive relationships wi
Slide 13: Invest in Higher Growth Activities: Travel Retail
3 INVEST IN HIGHER GROWTH ACTIVITIES TRAVEL RETAIL: A THRIVING POWER ENGINE… Tender Offers A strong development driven both by organic growth and M&A Development in Abu Dhabi with a premium concept [Bridge revenue growth (€m, revenue @100%, 2013–2015)] May 2016 Abu Dhabi: 9 Food stores December 2015
Slide 14: Invest in Higher Growth Activities: Three Segments, Diversified Exposure
3 INVEST IN HIGHER GROWTH ACTIVITIES … WITH UNIQUE POSITIONNING ON THREE SEGMENTS AND DIVERSIFIED GEOGRAPHICAL EXPOSURE Revenue breakdown of Lagardère Travel Revenue breakdown of Lagardère Travel Retail by business line Retail by Region [in % of 2015 total revenue] [in % of 2015 total revenue] US &
Slide 15: Acquisition of Grupo Boomerang TV
3 INVEST IN HIGHER GROWTH ACTIVITIES MAY 2015: ACQUISITION OF GRUPO BOOMERANG TV, LEADING INDEPENDENT PRODUCER IN SPAIN Transaction: acquisition of 82 % 2015 revenue: €77m Activities: Fiction / Entertainment / Production / Distribution, Others Fiction catalogue: 23 programs Non-fiction cat
Slide 16: Group Performance in H1 2016
GROUP PERFORMANCE IN H1 2016
Slide 17: Group Key Figures
GROUP KEY FIGURES H1 2015 H1 2016 (€m) +3.8% reported Results in line with Revenue 3,304 3,431 +0.5% like-for-like* management expectations. Recurring EBIT of fully 122 101 -17.2% Seasonality impact consolidated companies* especially for Sports and Group operating margin 3.7% 2.9% -0.8pt Enterta
Slide 18: Activity and Profitability: Publishing
ACTIVITY AND PROFITABILITY H1 2016 revenue by geographical area H1 2016 revenue by activity Other Other Education 19% 16% 14% 18%* France 17%* 13%* 28% Spain 28%* Illustrated 5% Partworks Books 5%* 13% *% of revenue in H1 2015. 14% 12%* 15%* US & Canada UK & Australia General 27% 21% Literature 26%*
Slide 19: Activity and Profitability: Travel Retail
ACTIVITY AND PROFITABILITY H1 2016 revenue by geographical area H1 2016 revenue by activity Distribution Asia- (Wholesale Distribution US & Canada & Integrated Retail) 18% 21% Pacific 7%* 10% 30%* 10%* Eastern Travel Retail Europe 17% *% of revenue in H1 2015. 82% 17%* France 70%* 22% 23%* Other Wes
Slide 20: Activity and Profitability: Active
ACTIVITY AND PROFITABILITY H1 2016 revenue by geographical area H1 2016 revenue by activity Other International Radio 17% 22% 14%* 22%* Spain 7% Press France 3%* 40% 76% *% of revenue in H1 2015. 83%* 43%* TV 29% 28%* Pure Players & BtoB 9% 7%* PROFITABILITY 8.8% 7.6% 7.6% 46 33 33 (€m) H1 2015 H2 2
Slide 21: Activity and Profitability: Sports and Entertainment
ACTIVITY AND PROFITABILITY H1 2016 revenue by geographical area H1 2016 revenue by activity Rest of World France 16% 27% Media rights 25%* 18% Other Asia & 13%* 31%* 34% Australia 13% 25%* 24%* Rest of Marketing Europe Germany rights 16% 21% 48% 21%* 44%* UK 10%* 7% 7%* PROFITABILITY 12.4% 2.1% 32 (
Slide 22: H1 2016 Update: Revenue by Division
H1 2016 UPDATE: REVENUE BY DIVISION Reported Reported Like-for-like (€m) H1 2016 €m change change change* Resilient performance, supported by good Lagardère Publishing 970 +€2m +0.3% -0.2% momentum in Partworks, Education in Spain and Literature & Distribution in France. Lagardère Travel Strong
Slide 23: H1 2016 Update: Recurring EBIT by Division
H1 2016 UPDATE: RECURRING EBIT BY DIVISION Reported (€m) H1 2016 €m change Strong increase in profitability in the US and success of Lagardère Publishing 36 +€0m Partworks offset by a decline in digital revenue in the UK and expenses related to French curricular reform. Performance buoyed by the
Slide 24: H1 2016 Update: Consolidated Statement of Cash Flows
H1 2016 UPDATE: CONSOLIDATED STATEMENT OF CASH FLOWS (€m) H1 2015 H1 2016 Cash flow from operations before interest, taxes 168 181 Up 7.7% Changes in working capital (97) (153) Deterioration of €56m mainly due to Cash flow from operations 71 28 non-recurring items in Lagardère Sports and Entertainme
Slide 25: Financing Policy
FINANCING POLICY Cautious management of the balance … preserving a bold dividend policy sheet despite a significant acquisition… Leverage ratio Historical dividends (€/share) Net debt/Recurring EBITDA* €1,739m Ordinary dividend per share (€) €1,551m Extra dividend per share (€) €1,436m 9.0 2.8x
Slide 26: Definitions
DEFINITIONS Recurring EBIT of fully consolidated companies is defined as the difference between profit before finance costs and tax and the following items of the profit and loss statement: • income (loss) from equity-accounted companies; • gains (losses) on disposals of assets; • impairment losse
Slide 27: Guidance and Dividend
GUIDANCE AND DIVIDEND
Slide 28: 2016 Guidance and Dividend
2016 GUIDANCE AND DIVIDEND 2016 guidance • In 2016, the recurring EBIT of fully consolidated companies* is expected to grow slightly above 10% compared to 2015: - at constant exchange rates; - excluding the effect of the potential disposal of Distribution activities. Dividend • Ordinary dividend
Slide 29: Appendix: Business Updates
APPENDIX: BUSINESS UPDATES
Slide 30: Perseus Acquisition
PERSEUS ACQUISITION: EXPANSION OF NON-FICTION AND BACKLIST PUBLISHING PROGRAMS Date of creation: 1996 Date of acquisition: 1st April 2016 2015 revenue: ≈ €90m Activities: Non-fiction / Backlist publishing programs 9 imprints: Avalon Books, Basic Books, DACapo Press, Public Affairs, Running
Slide 31: Travel Retail Organic Growth Drivers
TRAVEL RETAIL ORGANIC GROWTH DRIVERS Strong market fundamentals Global traffic growth [Bn passengers / 2013-2021] 1. Strong and regular growth of global air traffic (+4% per year) 2. Increase of emerging country passengers travelling in mature countries 3. Increasing externalization of travel retail
Slide 32: Travel Retail Organic Growth Drivers: Product Mix
TRAVEL RETAIL ORGANIC GROWTH DRIVERS A favourable product mix evolution [in €m, managed revenue 2011-2015] (1) Other mainly includes: travel accessories, gifts & souvenirs and convenience products (phone cards, lottery, …) 32
Slide 33: Paradies Acquisition: A Game Changer in North America
PARADIES ACQUISITION: A GAME CHANGER IN NORTH AMERICA Purchase price : $530m for 100% of the equity net of minority partners1) Key 7.5x EV/EBITDA post run rate synergies2) financial Double digit EBITDA margin terms Expected $15m synergies per year as of 2019: Margin synergies G&A synergi
Slide 34: Paradies Lagardère: Creating a Regional Leader
PARADIES LAGARDÈRE: CREATING A REGIONAL LEADER Overview of Paradies Lagardère Paradies Lagardère 2015 key figures A new entity managed A unique and #3 by an experienced complementary North in North leadership team American footprint America 100 airports 6,000 employees A brand portfolio tailor A str
Slide 35: Paradies: Integration Project on Track
PARADIES: INTEGRATION PROJECT ON TRACK ✓ Strong and integrated management to keep momentum Immediate integration of senior leadership team Decision to have main HQ in Atlanta Focus ✓ Focusing on quick wins Margins and trade negotiations Business development integration ✓ A clearly defined pa
Slide 36: Abu Dhabi International Airport: A Major Step in Middle-East
ABU DHABI INTERNATIONAL AIRPORT: A MAJOR STEP IN MIDDLE-EAST Overview of Abu Dhabi core Duty Free contract awarded 10-year contract on core duty free categories, confectionery and fine foods Key 13 PoS over 3,000 sqm figures 10-year estimated cumulated revenue: €3bn 9 Food and Beverage contr
Slide 37: Travel Retail Business Mix Evolution
TRAVEL RETAIL BUSINESS MIX EVOLUTION Lagardere Travel Retail: improvement of the business mix 27% Distribution* 44% 40% 37% (to be sold) 73% Travel Retail 56% 60% 63% 2012 2013 2014 2015 The repositioning and development strategy of Lagardère Travel Retail is almost achieved, with the advanced dispo
Slide 38: A Worldwide Growing Sports Market
A WORLDWIDE GROWING SPORTS MARKET Growth outlook for the Sports market Worldwide Sports market Growth factors [€ billion, 2015] Worldwide growth of 5% a year, driven by 110 media and marketing rights Merchandising 15 Media rights 27 +5% +5% +5% Marketing rights 34 +6% Ticketing 34 INVESTOR PRESENTAT
Slide 39: We Deliver Our Partners Comprehensive Solutions to Generate Value
WE DELIVER OUR PARTNERS COMPREHENSIVE SOLUTIONS TO GENERATE VALUE 39
Slide 40: Lagardère IR Team and Calendar
LAGARDÈRE IR TEAM AND CALENDAR IR team details Calendar (all time is CET) Florence Lonis Announcement of FY 2016 revenue Chief of Investor Relations Q4 revenue will be released on 9 February 2017 at 8:00 a.m. Tel: +33 1 40 69 18 02 A conference call will be held at 10:00 a.m. on the same day. flon
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