Lagardere Sa · EURONEXT:MMB

Lagardere Sa — Investor Day (February 2005)

19 slides from Lagardere Sa's investor day presentation, Feb 1, 2005

1. Slide 1: Investor Day, February 1, 2005

   INVESTOR DAY February 1, 2005 LAGARDERE

2. Slide 2: Agenda

   AGENDA 2 Extracting Long Term Value (A. Lagardère) 9h00-10h30 Lagardere Active (A. Lagardère & A. Lemarchand) Break 10h30 - 10h45 Books (A. Nourry) 10h45 - 11h45 Press (G. de Roquemaurel) 11h45 - 12h45 Lunch/ Workshop EADS (P. de Bausset) 13h00 – 14h00 Distribution Services (J.-L. Nachury) 14h15 – 1

3. Slide 3: Extracting Long Term Value

   Extracting Long Term Value Lagardere’s growth model: a diversified media group

4. Slide 4: Lagardere's way

   Extracting Long Term Value: Lagardere’s way 4 Lagardere key objectives are: Š To create value , a combination of EBITA and FCF growth with a strong balance sheet Š To pursue the transformation of our leading European positions into leading Worldwide franchises Š To build a financially attractive and

5. Slide 5: Why a diversified media group structure?

   Extracting Long Term Value: why a diversified media group structure? 5 To keep LT growth options open: press, books, radio, TV To avoid any future gridlock: technology, advertising slowdown, increased competition… To avoid the risk of having to reinvent ourselves: Lagardere is already international,

6. Slide 6: Refocusing 1998-2005

   Extracting Long Term Value: Refocusing 6 1998 2005 Š High Technology Š High Technology: 15% Š Matra Automobile EADS Š Telecommunication Š Arjil Bank Š Grolier Š Club Internet Š HFM Print division Š Giraudy BOOKS PRESS DISTRIBUTION SERVICES AUDIOVISUAL

7. Slide 7: The Full Control Rule

   Extracting Long Term Value: The Full Control Rule 7 Key strategic priority: full control over the management and assets of our businesses Consistent policy since 1988 of buying out minorities to increase control over our businesses: Š HFM Š Europe 1 Š RCS Š HF UK Š Lagardere Thématique Rejecting num

8. Slide 8: The Full Control Rule: As a result

   Extracting Long Term Value: The Full Control Rule 8 As a result: Š Lagardere has only a few minority stakes and these are small, Š The limited stakes held by minority investors are closely monitored in our business entities . Exceptions to the Full Control Rule are made mainly for strategic purposes

9. Slide 9: Balanced growth at the group level

   Extracting Long Term Value: balanced growth at the group level 9 Combining organic growth & acquisitions Boosting organic growth with acquisitions: Š Editis Š Hodder Headline Š Rusconi Š Fujin Gaho Mix of cyclical businesses (advertising-20% sales, travel retail) and non cyclical businesses (Press d

10. Slide 10: Balanced growth at the divisions' level

    Extracting Long Term Value: a balanced growth at the divisions’s level 10 Portfolio management: each division can also rely on a diversified business mix Š Books: 3 countries & 3 businesses (trade, education, & partworks) Š Press: 36 countries & 250 magazines Š Distribution services: retail & wholes

11. Slide 11: What does LT mean?

    Extracting Long Term Value: what does LT mean? 11 Limited partnership structure creates strong personal commitment on the part of Arnaud Lagardere Š Unlimited personal liability Š Shareholder Š Lifetime involvement Influence on the company’s management style: Š Every penny counts Š Dilution averse:

12. Slide 12: The LT Vision: Future Shape

    Extracting Long Term Value: the LT Vision 12 Future Shape Š 20 % of future sales should be generated by digital media Š Sources: • Lagardere Active: radio, TV, broadband • Books • Distribution Services: VirginMega BOOKS PRESS DISTRIBUTION SERVICES AUDIOVISUAL

13. Slide 13: The LT Vision: Future acquisitions

    Extracting Long Term Value: the LT Vision 13 Future acquisitions: Š Press: USA, UK, other European countries, Asia, Russia,… Š Digital Media: TV, other activities Š Books: Spain, UK, other European countries BOOKS PRESS DISTRIBUTION SERVICES AUDIOVISUAL

14. Slide 14: How finance backs up the LT Strategy

    Extracting Long Term Value How finance backs up the LT Strategy

15. Slide 15: Free Cash Flows by division

    Free Cash Flows by division (after adjustments 1) 15 338 M€ 32 256 M€ 273 M€ 96 39 48 104 M€ Hors Pôle 108 M€ 82 174 53 153 Lagardere 31 Active 29 M€ 58 111 Books 103 43 82 87 97 Press 23 32 46 25 Distribution (4) (8) (25) (40) (58) (50) (69) (14) Services (14) (25) BOOKS 1998 1999 2000 2001 2002 20

16. Slide 16: Conversion Rate

    Conversion Rate of Operating Income, after normative 16 interest expense and income tax into adjusted Free Cash Flows 143% 135% 133% 63% 55% 21% 1998 1999 2000 2001 2002 2003 BOOKS PRESS DISTRIBUTION SERVICES AUDIOVISUAL

17. Slide 17: The balance sheet is still underleveraged

    Extracting Long Term Value: 17 The balance sheet is still underleveraged Š 30% gearing (end of June 2004) Š Keeping fire power for future acquisitions BOOKS PRESS DISTRIBUTION SERVICES AUDIOVISUAL

18. Slide 18: Strict acquisitions criteria are key to value accretion

    Extracting Long Term Value: 18 Strict acquisitions criteria are key to value accretion 3 criteria: Š Good knowledge of the target ‘s business Š Potential synergies Š No specific risk Expected ROI Š 3 positives: 10% after tax Š 2 positives: 15% after tax Š 1 positive: 25% after tax BOOKS PRESS DISTRI

19. Slide 19: Keeping ambitious LT growth and margin targets

    Extracting Long Term Value: 19 Keeping ambitious LT growth and margin targets, without milking the business Margin targets (French GAAP): Š Books: 12% Š Press: 12% Š Distribution Services: 3% Š Lagardere Active: 10% 2004 pro-forma EBITA growth: range between +7% & +10%. BOOKS PRESS DISTRIBUTION SERV

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