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Lagardere Sa — Lagardère SCA — Debt Investor Presentation (June 2017)

44 slides from Lagardere Sa's debt investor presentation, June 2017

  1. Slide 1: Credit Investor Presentation June 2017

    CREDIT INVESTOR PRESENTATION June 2017

  2. Slide 2: Disclaimer

    DISCLAIMER This document presents the full-year 2016 results from the consolidated financial statements of Lagardère SCA. This document does not constitute the Annual Financial Report (Rapport Financier Annuel) within the meaning of article L. 451-1-2 of the French monetary and financial Code (Code

  3. Slide 3: Table of Content

    TABLE OF CONTENT GROUP PROFILE slide 4 GROUP STRATEGY slide 8 slide 11 slide 15 slide 19 slide 22 GROUP PERFORMANCE slide 25 GUIDANCE & DIVIDEND slide 29 KEY CREDIT HIGHLIGHTS AND TRANSACTION UPDATES slide 31 Appendix slide 37 3

  4. Slide 4: Group Profile

    GROUP PROFILE

  5. Slide 5: A diversified group with leading brands and market positions

    A DIVERSIFIED GROUP WITH LEADING BRANDS AND MARKET POSITIONS A leader in World #3 Trade book publisher World #3 in Travel Retail Magazine Publishing Leader in football in Africa, 13 French titles Asia and Europe #1 in France, #2 in the UK, Over 4,100 stores in 80 international editions under #3 in S

  6. Slide 6: A diversified business mix…

    A DIVERSIFIED BUSINESS MIX… Revenue breakdown by Recurring EBIT breakdown by division in 2016 division in 2016 Lagardère Lagardère Sports and Entertainment Active 7% m 19% Lagardère Lagardère Sports and Entertainment Active 5% 12% Lagardère Lagardère Publishing Travel Retail 31% 26% Lagardère Lagard

  7. Slide 7: …with a worldwide footprint

    …WITH A WORLDWIDE FOOTPRINT Revenue breakdown by geographic area in 2016 34% 32% 30% 29% 20% 13% 10% 10% 8% 9% 3% 2% 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 France Western Europe Eastern Europe USA & Canada Asia-Pacific Latin America, Africa, Middle East 7

  8. Slide 8: Group Strategy

    GROUP STRATEGY

  9. Slide 9: Businesses growth profile

    BUSINESSES GROWTH PROFILE Growth potential A 3 pillars strategy Invest Digital Travel Retail Sports & Entertainment TV Production Book Publishing Broadcasting* Distribution Magazines Divest Adapt INVESTOR PRESENTATION Market position APRIL 2016 *Radio + TV channels. N.B: Size proportional to revenue

  10. Slide 10: Exposure to declining/non core activities reduced

    EXPOSURE TO DECLINING/NON CORE ACTIVITIES REDUCED 2011 2012 2013 2014 2015 2016 2017 Dec. 2011 Oct. 2012 May 2013 Feb. 2017 July 2014 Feb. 2015 Disposal of BSSL Disposal of Book Disposal of Through 2016 Disposal of Hungarian Disposal of 10 Disposal of Swiss (school supplies Distribution business 25%

  11. Slide 11: Lagardère Publishing

    Lagardere BASED ON AN ORIGINAL NEW STORY BY J.K. ROWLING JOHN TIFFANY & JACK THORN ANEW PLAY BY JACK THORNE.

  12. Slide 12: Successful portfolio of publishing businesses with solid leading positions in core markets

    SUCCESSFUL PORTFOLIO OF PUBLISHING BUSINESSES WITH SOLID LEADING POSITIONS IN CORE MARKETS 2016 revenue by geographic area 2016 revenue by activity Other Other Education 17% 15% 17% France 28% Spain Illustrated Partworks Books 6% 11% 13% US & UK & General Canada Australia Literature 27% 22% 44% Top

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

    GROWTH FUELLED BY ACQUISITION AND INTERNATIONAL DEVELOPMENT Revenue evolution (€m) and cash flow from operations Growth fuelled by acquisitions (2003-2016) before changes in working capital (2003-2016) 2016 2015 2,264 2014 Revenue Cash flow from operations before 2013 changes in working capital 2011

  14. Slide 14: Riding the digital wave

    RIDING THE DIGITAL WAVE E-books E-books contribution to Lagardère Publishing's overall revenue: 8.0% in 2016. E-publishing Reinforcing leadership: Bookouture / acquisition of Britain’s leading independent e-publisher. Mobile apps Exploring new opportunities: UK mobile gaming startups acquisitions fo

  15. Slide 15: Lagardère Travel Retail

    Lagardere

  16. Slide 16: High growth business with leading positions in its 3 segments

    HIGH GROWTH BUSINESS WITH LEADING POSITIONS IN ITS 3 SEGMENTS 2016 revenue* by geographic area 2016 revenue by activity North Foodservice Asia- 16% America Pacific 24% 12% Travel Essentials 46% Duty Free France & Fashion 26% 38% Europe (excl. France) 38% *IFRS revenue, excluding Distribution. Top 10

  17. Slide 17: Diversified growth paths

    DIVERSIFIED GROWTH PATHS A strong development driven both Organic Growth by organic growth and M&A Gain of new concessions [Bridge sales growth (€m, revenue @100%, 2013–2016)] Early 2017 Hong Kong: Liquor & Tobacco (with China Duty Free Group) Early 2017 Geneva: Duty Free 61% 4,162 End 2016 Riyad, D

  18. Slide 18: Improvement of cash generation backed by a resilient business model

    IMPROVEMENT OF CASH GENERATION BACKED BY A RESILIENT BUSINESS MODEL Travel Retail Cash Flow from Operations (€m)* Breakdown of Capex (€m)** 160 4.4% 4.3% 140 4.0% 4,0% +95% 3.5% 56 120 188 100 66 3,0% 48 44 80 135 82 121 2,0% 60 95 40 52 46 44 1,0% 20 0 0,0% 2013 2014 2015 2016 2013 2014 2015 2016 G

  19. Slide 19: Lagardère Active

    Lagardere ACTIVE PSYCHO ETSION ARRETAIT DEFARE LATETE? 3SEAUTE HNIQUES. TONNAIRES ES RFORMANTES | ‘CTION DE CREMES ie verrer TEURS TENDRES 6 JONNENTLAPECHEL IDE DUSAUVAGES NTJOUER. SIMPRIMES EXCLUS SONGELATION DYOVOCYTES (MAMAN D’ELSE TEMOIGNE | ANSLA CUISINE i (NNE-SOPHIEPIC

  20. Slide 20: A diversified business mix with solid leading positions

    A DIVERSIFIED BUSINESS MIX WITH SOLID LEADING POSITIONS 2016 revenue by geographic area 2016 revenue by activity Other Radio International 22% Press 17% 38% Spain France 7% 76% TV 32% Pure Players & BtoB 8% Peers Sound market positions PRESS Radio + TV + Internet #1 #1 #3 #1 Magazine publisher TV pr

  21. Slide 21: Sustain profitability and develop promising growth drivers

    SUSTAIN PROFITABILITY AND DEVELOP PROMISING GROWTH DRIVERS Secure a profitable development Reinforce audiovisual activity CAGR 2012-16 +5% Acquisition of Grupo Boomerang TV in Spain 6.4% 8.5%  Employment protection margin margin plan in 2013. Development in Africa & Asia 78  Keewu in Senegal 64 

  22. Slide 22: Sports and Entertainment

    Lagardere SPORTS AND ENTERTAINMENT

  23. Slide 23: A global network combining international expertise with local market knowledge

    A GLOBAL NETWORK COMBINING INTERNATIONAL EXPERTISE WITH LOCAL MARKET KNOWLEDGE 2016 revenue by geographic area 2016 revenue by activity Rest of France Other Media World 21% 35% rights 21% 21% Asia & Australia Germany 18% 18% Marketing Rest of Europe UK rights 14% 8% 44% Competitive Landscape Leading

  24. Slide 24: A successful recovery plan to prepare for growth

    A SUCCESSFUL RECOVERY PLAN TO PREPARE FOR GROWTH PRESERVING LONG STRENGHTENING CORE DEVELOPING BRAND TERM PARTNERSHIPS SALES ACTIVITIES CONSULTING AND DIGITAL SERVICES Long-term partnerships  Consolidate and expand Brand Consulting comprehensive business on  Acquisition of EKS (specialized YEARS e

  25. Slide 25: Group Performance in 2016

    GROUP PERFORMANCE IN 2016

  26. Slide 26: Highlights

    HIGHLIGHTS (€m) 2015 2016 +2.7% consolidated Revenue 7,193 7,391 +2.5% like-for-like  Continued strong Recurring EBIT of fully organic growth 378 395 +4.6% consolidated companies* momentum in Travel Retail Group operating margin 5.3% 5.3% ≈ Profit – Group share 74 175 +€101m  Solid performance fro

  27. Slide 27: Consolidated statement of cash flows

    CONSOLIDATED STATEMENT OF CASH FLOWS (€m) 2015 2016 Operating cash performance significantly up: Cash flow from operations before changes in working capital 447 557 +25% following +11% last year Changes in working capital 180 26 Non-recurring items in 2015 Net interest paid and income taxes paid (10

  28. Slide 28: Q1 2017 Highlights

    Q1 2017 HIGHLIGHTS (€m) Q1 2017 revenue 1,532 “The Lagardère group posted a sharp 2016 revenue 1,586 increase in like-for-like revenue, buoyed by robust business at Lagardère Publishing, continued momentum at Lagardère Travel Retail Consolidated growth -3.4% and a rebound in business at Lagardère Sp

  29. Slide 29: Guidance & Dividend

    GUIDANCE & DIVIDEND

  30. Slide 30: 2017 Guidance

    2017 GUIDANCE 2017 Guidance: “Group recurring EBIT growth is expected to be between 5% and 8% versus 2016, at constant exchange rates and excluding the impact from disposals of Distribution activities.” Dividend: Ordinary dividend (maintained at €1.30 per share) was paid on 10 May 2017. 30

  31. Slide 31: Key Credit Highlights and Transaction Rationale

    KEY CREDIT HIGHLIGHTS AND TRANSACTION RATIONALE

  32. Slide 32: A prudent financial policy

    A PRUDENT FINANCIAL POLICY Historical Net debt / EBITDA* ratio Inaugural Disposal of 3 non-core stakes $530m Free cash flow Disposal of bond in in 2013: Paradies generation of International Magazine 2009 - EADS (7.4%): €2.28bn acquisition €416m (inc. one- Publishing (PMI) for - Canal+ France (20%):

  33. Slide 33: Outstanding debt & maturity profile

    OUTSTANDING DEBT & MATURITY PROFILE  Gross debt breakdown in 2016:  Preservation of liquidity and well balanced debt strong direct access to credit investors repayment schedule Total Liquidity €1,731m 11% 9% Authorised Bonds credit Bank loans & other lines** €829m Commercial paper €1,250m €501m €5

  34. Slide 34: Key credit highlights

    KEY CREDIT HIGHLIGHTS  A unique legal structure (SCA) allowing stable shareholder base and management continuity.  A well diversified worldwide leader with leading brands and solid market positions. • A global leader in content publishing, production, broadcasting and distribution, whose powerful

  35. Slide 35: Transaction rationale

    TRANSACTION RATIONALE  Reinforce its long-term partnership with bond holders.  Proactively manage and optimize its debt and financial structure while maintaining a conservative financial profile. • Benefit from the solid current financial market conditions to further extend the Group’s average deb

  36. Slide 36: Contemplated bond structure

    CONTEMPLATED BOND STRUCTURE Issuer Lagardère SCA Issuer Rating Unrated Size €300m “no Grow” Ranking Senior Unsecured Maturity 7 years Standalone / Change of Control / Make Whole / Documentation 3-month par call / Clean-up clause (80%) Governing Law French Law Listing / Denomination Luxembourg Stock

  37. Slide 37: Appendix: Business Updates

    APPENDIX: BUSINESS UPDATES

  38. Slide 38: Lagardère Publishing: Activity

    LAGARDÈRE PUBLISHING: ACTIVITY 2016 revenue by geographic area 2016 revenue by activity Other Other Education 17% 15% 17% 17%* France 16%* 16%* 28% Spain 29%* Illustrated 6% Partworks Books 6%* 11% 13% 11%* 17%* US & Canada UK & General 27% Australia Literature 25%* 22% 44% 23%* 40%* Change in recur

  39. Slide 39: Lagardère Travel Retail: Activity

    LAGARDÈRE TRAVEL RETAIL: ACTIVITY 2016 revenue by geographic area 2016 revenue by activity US & Canada Distribution Asia- (Wholesale Distribution 21% Pacific & Integrated Retail) 9%* 10% 15% 10%* 27%* Eastern Europe Travel Retail 17% France 85% 17%* 22% 73%* 23%* Other Western Europe Italy Belgium 8

  40. Slide 40: Lagardère Active: Activity

    LAGARDÈRE ACTIVE: ACTIVITY 2016 revenue by geographic area 2016 revenue by activity Other International Radio 17% 22% 13%* 21%* Spain 7% Press 6%* France 38% 76% 41%* 81%* TV 32% 32%* Pure Players & BtoB 8% 6%* Change in recurring EBIT (€m) and operating margin (%) 8.2% 8.5% 79 78 *% of revenue in 2

  41. Slide 41: Lagardère Sports and Entertainment: Activity

    LAGARDÈRE SPORTS AND ENTERTAINMENT: ACTIVITY 2016 revenue by geographic area 2016 revenue by activity Rest of World France 21% 21% Media rights 25%* 21% 13%* 26%* Other 35% 32%* Asia & Australia 18% Germany 17%* 18% 22%* Marketing rights Rest of Europe UK 44% 14% 8% 9%* 42%* 14%* Change in recurring

  42. Slide 42: Worldwide growth in travel retail is estimated at 5% per annum

    WORLDWIDE GROWTH IN TRAVEL RETAIL IS ESTIMATED AT 5% PER ANNUM Growth in global air passenger traffic [%, 2015-2040] Strong market fundamentals Global average annual growth rate: 4.9% 1. Strong and regular growth of global air traffic (+4% per year) Europe +3.7% 2. Increase of emerging country North

  43. Slide 43: 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

  44. Slide 44: Lagardère IR team and calendar

    LAGARDÈRE IR TEAM AND CALENDAR IR team details Calendar (all time is CET) Florence Lonis  Lagardère Publishing Investor Day Chief of Investor Relations Lagardère Publishing will be holding an Investor Day in Vanves, (92), Tel: +33 1 40 69 18 02 on 12 June 2017 from 2:30 p.m. to 6:00 p.m. flonis@lag

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