Lagardere Sa · EURONEXT:MMB

Lagardere Sa — Investor Day (May 2014)

52 slides from Lagardere Sa's investor day presentation, May 28, 2014

  1. Slide 1: Investor Day Lagardère

    PRESENTATION INVESTOR DAY LAGARDERE Paris - 28 May 2014

  2. Slide 2: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  3. Slide 3: Hachette Livre is the world's #3 consumer book publisher

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE IS THE WORLD’S #3 CONSUMER BOOK PUBLISHER, A LEADER IN CORE MARKETS Top 3 Consumer book publishers Ranking in core markets worldwide Based on 2013 pro-forma turnover (€m) Based on 2013 market data and results (Consumer: Trade & Education including Higher Ed

  4. Slide 4: In France, Hachette Livre is the #1 publishing player

    INVESTOR DAY – PRESENTATION IN FRANCE, ITS HOME TURF, HACHETTE LIVRE IS THE #1 PUBLISHING PLAYER SPLIT OF 2013 SALES BY BUSINESS France** CONTRIBUTION TO 2013 GLOBAL SALES* 37% Distribution 25% (€ 2,066m) 50% 25% Trade Education Focus on France 3 BUSINESSES TRADE EDUCATION DISTRIBUTION IN FRANCE 201

  5. Slide 5: Hachette Book Group is the #4 player in the US trade market

    INVESTOR DAY – PRESENTATION HACHETTE BOOK GROUP IS THE #4 PLAYER IN THE US TRADE MARKET SPLIT OF 2013 SALES BY BUSINESS USA CONTRIBUTION TO 2013 GLOBAL SALES* Distribution 4% 23% (€ 2,066m) Trade 96% 2 BUSINESSES TRADE DISTRIBUTION 2013 ranking and 5.8%** ~8% market share in volume #4 Main segments

  6. Slide 6: Hachette UK is a leading player in the UK and Commonwealth

    INVESTOR DAY – PRESENTATION HACHETTE UK IS A LEADING PLAYER IN THE UK AND COMMONWEALTH COUNTRIES SPLIT OF 2013 SALES BY BUSINESS UK Education 8% 5% Distribution CONTRIBUTION TO 2013 GLOBAL SALES* (€ 2,066m) 21% Including Ireland, India and Australia 87% Trade Focus on the UK 3 BUSINESSES TRADE EDUCA

  7. Slide 7: Hachette Livre España is a leading player in Spain and Latin America

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE ESPAÑA IS A LEADING PLAYER IN SPAIN AND LATIN AMERICA SPLIT OF 2013 SALES BY BUSINESS Spain & Latin America 4% Distribution CONTRIBUTION TO 2013 GLOBAL SALES* (€ 2,066m) Trade 26% 70% 8% Education EDUCATION TRADE DISTRIBUTION 4 BUSINESSES LATIN AMERICA (SPA

  8. Slide 8: Hachette Livre operates a partworks business worldwide

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE OPERATES A PARTWORKS BUSINESS WITH A STRONG PRESENCE WORLDWIDE Partworks CONTRIBUTION TO 2013 GLOBAL SALES* (€ 2,066m) 11% Editorial do Brazil Germany United Kingdom Ireland Netherlands Russia Canada Belgium Switzerland Austria Japan France Hungary Spain Me

  9. Slide 9: Hachette Collections is the #2 global player in partworks

    INVESTOR DAY – PRESENTATION HACHETTE COLLECTIONS IS THE #2 GLOBAL PLAYER IN PARTWORKS BUSINESS OVERVIEW 23%* 2013 ranking and market #2 share in value - Partworks activity has been extending its international network year after year: compared to 2009, new countries became the main contributors of sa

  10. Slide 10: Extended reach through businesses in developing countries

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE EXTENDED ITS REACH THROUGH BUSINESSES IN DEVELOPING COUNTRIES * * * • Participation in Azbooka- • Launched in 2008 Atticus Publishing Group • English language • Joint venture with Librairie since 2011 consumer book subsidiary • Joint venture with Phoenix An

  11. Slide 11: Hachette Livre published 16,452 new titles in 2013

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE PUBLISHED 16,452 NEW TITLES IN 2013 Examples of 2013 bestsellers Trade Education and Partworks References Literature Illustrated Children Germany Italy France Brazil Japan Russia Russia France 11

  12. Slide 12: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  13. Slide 13: Growth fuelled by acquisitions and international development

    INVESTOR DAY – PRESENTATION THE GROWTH OF THE GROUP WAS FUELLED BY ACQUISITIONS AND INTERNATIONAL DEVELOPMENT 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 France UK Spain USA Latin America Argentina Mexico China (JV) Others (JV) India Lebanon Russia (25%) 13

  14. Slide 14: Strong growth over the past ten years

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE HAS POSTED STRONG GROWTH OVER THE PAST TEN YEARS Hachette Livre results 2003-2013 (in €m) Twilight 2,273 2,159 2,165 Revenues 2,130 2,077 2,038 2,066 1,975 CAGR 03-13: +8% 1,644 Increase in net sales in 2013 on like-for-like basis: 1,419 +1.9% vs 2012 959 3

  15. Slide 15: Portfolio across 3 major languages and all market segments

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE HAS SUCCESSFULLY ASSEMBLED A PORTFOLIO OF BUSINESSES ACROSS 3 MAJOR LANGUAGES AND ALL MARKET SEGMENTS 2013 revenues: €2,066m Sales by geographic area* Sales by activity Spain & Latin America Reference 4% 0% Other Partworks 8% Partworks 11% 11% France and ot

  16. Slide 16: Best-in-class, very profitable and cash generative group

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE IS A BEST-IN-CLASS, VERY PROFITABLE AND CASH GENERATIVE GROUP Hachette Livre financing 2003-2013 (€m) 323 301 EBIT 284 277 247 239 246 260 250 228 239 Cash Flow 220 221 223 216 223 217 216 189 173 126 107 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20

  17. Slide 17: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  18. Slide 18: Digital trade market growth rates differ by country

    INVESTOR DAY – PRESENTATION THE DIGITAL TRADE MARKET GROWTH RATES DIFFER BY COUNTRY  Hachette Livre has been instrumental in the transformation of the industry in the USA eBook market development per country (in % of Trade sales in value – publisher price)  Entry of Amazon in 2007 with a high-disc

  19. Slide 19: Penetration of digital in the USA and UK has positive impact

    INVESTOR DAY – PRESENTATION THE PENETRATION OF DIGITAL ON PUBLISHING MARKETS IN THE USA AND THE UK HAS POSITIVE IMPACT Trade market evolution 2011-2013 (net publisher revenues, in $bn for the USA Financial impacts and £bn for the UK) 2011-2013 Print Digital CAGR  Once the investment phase is over,

  20. Slide 20: Publishers dealing with giant technology players

    INVESTOR DAY – PRESENTATION PUBLISHERS ARE NOW DEALING WITH GIANT TECHNOLOGY PLAYERS WHO ENJOY CONSIDERABLE BARGAINING POWER  E-retailers on the digital market are highly concentrated, with Amazon dominant Breakdown of Hachette Livre digital sales by e-retailers in 2013 5% 5% Amazon 8% Amazon Barne

  21. Slide 21: Traditional retail undergoes further concentration

    INVESTOR DAY – PRESENTATION IN ALL BOOK MARKETS, TRADITIONAL RETAIL UNDERGOES FURTHER CONCENTRATION  In most book markets, bookshops and traditional retail experience difficulties or bankruptcies Examples  These difficulties mostly result from financial failures in a changing environment (digital

  22. Slide 22: Digital transformation has increased competition

    INVESTOR DAY – PRESENTATION THE DIGITAL TRANSFORMATION HAS INCREASED COMPETITION Before After  Established competiting publishers  Competiting publishers  … or new entrants in Literature (Actes Sud, Le  New competitors Dilettante…) Retailers  Retailers (but at low level) Self-publishing platfor

  23. Slide 23: Global publishers initiated a new consolidation phase

    INVESTOR DAY – PRESENTATION IN REACTION TO THIS CHANGING LANDSCAPE, GLOBAL PUBLISHERS HAVE INITIATED A NEW CONSOLIDATION PHASE – Acquisition of Flammarion by Gallimard • Transaction closed in September 2012 • Consolidated market share on the French print market of ~13% in value and ~14% in volume –

  24. Slide 24: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  25. Slide 25: Proactive actions for the digital transition (1/2)

    INVESTOR DAY – PRESENTATION SINCE 2007, PROACTIVE ACTIONS HAVE BEEN TAKEN TO SUCCEED IN THE DIGITAL TRANSITION AND PRESERVE MARKET VALUE (1/2)  Securing of rights through systematic acquisition of print and digital rights  Digitization of backlists and systematic release of front list titles in bo

  26. Slide 26: Proactive actions for the digital transition (2/2)

    INVESTOR DAY – PRESENTATION SINCE 2007, PROACTIVE ACTIONS HAVE BEEN TAKEN TO SUCCEED IN THE DIGITAL TRANSITION AND PRESERVE MARKET VALUE (2/2) Fostering  Supporting competition among e-retailers to avoid dominant position in the value chain: competition development of a large network of clients com

  27. Slide 27: Digital in trade is now a reality for Hachette Livre

    INVESTOR DAY – PRESENTATION DIGITAL IN TRADE IS NOW A REALITY FOR HACHETTE LIVRE, WITH THE USA AND THE UK FAR AHEAD  Hachette Livre digital revenues increased strongly since 2010 and now account for ~10% of total revenues, driven by strong growth of Trade digital sales from Hachette Book Group and

  28. Slide 28: Digital remains marginal in education to date

    INVESTOR DAY – PRESENTATION DIGITAL REMAINS MARGINAL IN EDUCATION TO DATE  Hachette Livre has successfully concentrated its investment and strategic focus on organic development when other players (Vivendi,…) did proceed to very expensive build up of digital acquisitions  In European countries, th

  29. Slide 29: Innovative actions in digital educational publishing

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE IS PROACTIVELY IMPLEMENTING INNOVATIVE ACTIONS REGARDING DIGITAL EDUCATIONAL PUBLISHING  Several initiatives have been implemented by Hachette in order to be ahead in digital and ready when the market takes off  Examples in France: – Development and produ

  30. Slide 30: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  31. Slide 31: Publisher's role remains central in creation, production and sale of books

    INVESTOR DAY – PRESENTATION PUBLISHER’S ROLE REMAINS CENTRAL IN THE CREATION, PRODUCTION AND SALE OF BOOKS A publisher is a sifter: culling of contents,  Advice and recommendations for cultural Consumers focusing on superior works products needed among a high number of projects submitted  Traditio

  32. Slide 32: Digital in trade creates additional market opportunities

    INVESTOR DAY – PRESENTATION DIGITAL IN TRADE CREATES ADDITIONAL MARKET OPPORTUNITIES  Hachette Livre aims at reaching new readers by selling its ebooks worldwide: – The digital sales network of the group is being extended to new territories – Worldwide ebook distribution can allow the group to meet

  33. Slide 33: Digital education market expected to be an opportunity by 2025

    INVESTOR DAY – PRESENTATION DIGITAL EDUCATION MARKET, STILL MARGINAL IN EUROPE, IS EXPECTED TO REPRESENT AN OPPORTUNITY BY 2025  In the countries where Hachette Livre operates, digital market for Education is still marginal: – The more advanced digital education market is the UK: ~10% of the publis

  34. Slide 34: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  35. Slide 35: Trade ebook penetration about to stabilize at 25%-35% in the USA

    INVESTOR DAY – PRESENTATION CONTEXT: TRADE EBOOK PENETRATION IS ABOUT TO STABILIZE AT 25%-35% IN THE USA AND LIKELY TO REACH 35% IN THE UK  Ebooks share of total sales in the USA should continue to increase but at a lower pace to stabilize between 25-35% by 2017  UK market will follow the US marke

  36. Slide 36: Strategic priorities (1/3): strengthen successful business model

    INVESTOR DAY – PRESENTATION STRATEGIC PRIORITIES (1/3): STRENGTHEN SUCCESSFUL BUSINESS MODEL  Stand by our economic business model in which value is preserved: – Promote interoperability through unique format & DRM – Retain control over ebook pricing – Support sales in bookstores  Be vigilant on i

  37. Slide 37: Strategic priorities (2/3): develop digital sales network worldwide

    INVESTOR DAY – PRESENTATION STRATEGIC PRIORITIES (2/3): DEVELOP DIGITAL SALES NETWORK IN ORDER TO REACH WORLDWIDE PRESENCE  Achieve worldwide ebook distribution for the group by end 2014  Distribution agreement between Hachette Book Group and Hachette UK to expand presence in English language mark

  38. Slide 38: Strategic priorities (3/3): develop CRM for direct access to readers

    INVESTOR DAY – PRESENTATION STRATEGIC PRIORITIES (3/3): DEVELOP CRM IN ORDER TO GAIN DIRECT ACCESS TO READERS  Information pertaining to the final client belongs to retailers  Today Big data allows more players of the value chain to gain access to consumer knowledge and contacts: Consumer Insight

  39. Slide 39: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  40. Slide 40: Hachette Livre will have to follow industry consolidation

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE WILL HAVE TO FOLLOW THE INDUSTRY CONSOLIDATION THAT HAS BEEN INITIATED BY LARGE ANGLO-SAXON PLAYERS  Joint venture between Penguin and Random House announced in October 2012 and completed in July 2013, creating a giant competitor especially in the US and t

  41. Slide 41: Six strategic priorities to consolidate market position

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE IS PURSUING SIX STRATEGIC PRIORITIES TO CONSOLIDATE ITS MARKET POSITION 1  International development in Partworks  Development of the distribution activity for Organic third-party clients growth  Development of catalogs in the USA mainly  Source more ke

  42. Slide 42: International development in partworks

    INVESTOR DAY – PRESENTATION 1 HACHETTE LIVRE WILL PURSUE ITS INTERNATIONAL DEVELOPMENT IN PARTWORKS  Partworks activity of Hachette Collections experienced growth in 2013 except in Spain  Hachette Collections maintains its strategy of expansion by: – Paying strong attention to investment costs in

  43. Slide 43: Hachette Livre intends to add new distribution clients

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE INTENDS TO ADD NEW DISTRIBUTION 1 CLIENTS  Hachette Livre’s distribution strategy is customized in each country with the objective to implement the most powerful organization: − Internalizing the distribution capacity in core markets (US, UK, France, Spain

  44. Slide 44: Hachette Livre is busy growing its catalogs

    INVESTOR DAY – PRESENTATION 1 HACHETTE LIVRE IS BUSY GROWING ITS CATALOGS… Implementation of author-friendly Development of catalogs policies  As an example, Hachette Book Group is  Hachette Livre intends to reinforce links executing strategy to expand its Non between publishers and authors throug

  45. Slide 45: Source more key authors and licenses

    INVESTOR DAY – PRESENTATION 1 … IN ORDER TO SOURCE MORE KEY AUTHORS AND LICENSES  Editorial leadership is necessary to attract new talents: Hachette Livre endeavors to reach the best authors, thanks to its reputation and brand recognition, as well as a privileged access to agents  Hachette Livre i

  46. Slide 46: US book market is essential for editorial leadership

    INVESTOR DAY – PRESENTATION 2 THE US BOOK MARKET IS ESSENTIAL FOR THE EDITORIAL LEADERSHIP OF THE GROUP  The US book market is larger than the UK market in terms of: – Readership – Number of new titles published  It is necessary to be a bigger player in the USA than in the UK in order to secure en

  47. Slide 47: Be a premier league competitor in the US trade market

    INVESTOR DAY – PRESENTATION HACHETTE INTENDS TO BE A PREMIER LEAGUE COMPETITOR IN 2 THE US TRADE MARKET AS SIZE IS, AND WILL CONTINUE TO BE, A CRITICAL ASSET IN THE FORTHCOMING YEARS IN THIS MARKET The US market is dominated Hachette Livre strategy and by a few players rationale 2013 top 5 pro-forma

  48. Slide 48: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  49. Slide 49: Monitoring book markets worldwide to expand internationally

    INVESTOR DAY – PRESENTATION HACHETTE LIVRE IS MONITORING BOOK MARKETS WORLDWIDE WITH A VIEW TO EXPAND INTERNATIONALLY  Hachette Livre constantly monitors book markets worldwide.  After opening for business in China, India, Russia and Middle East (Lebanon), Hachette Livre intends to pursue its inte

  50. Slide 50: Established presence in French-speaking African countries

    INVESTOR DAY – PRESENTATION THANKS TO ESTABLISHED PRESENCE IN FRENCH-SPEAKING AFRICAN COUNTRIES, HACHETTE LIVRE ENSURES A LONG TERM LEADING POSITION IN THESE MARKETS  Strong economic and demographic growth Presence of Hachette Livre International in French-speaking countries in Africa in Africa Tun

  51. Slide 51: Agenda

    INVESTOR DAY – PRESENTATION AGENDA  Hachette Livre since 2010 – Hachette Livre today – 2003-2013 highlights  Hachette Livre’s successful digital transformation – Market environment: a new deal – Actions put in place and results today – Opportunities  Three year outlook – Pursue digital transforma

  52. Slide 52: Conclusion

    INVESTOR DAY – PRESENTATION CONCLUSION  Hachette Livre is the world’s #3 consumer book publisher with a strong presence worldwide  The group delivers solid and predictable results thanks to a balanced portfolio  Digital modifies the market environment of publishing but represents an opportunity f

Lagardère — Investor Day (May 2014) on 6ix