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Lagardere Sa — Lagardère SCA — Debt Investor Presentation (October 2012)
40 slides from Lagardere Sa's debt investor presentation, October 2012
Slide 1: Credit Investor Presentation
Credit Investor Presentation October 2012
Slide 2: Disclaimer (1/2)
Credit Investor Presentation – October 2012 Disclaimer (1/2) Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and other forward-looking statements that are based on management’s beliefs. These statements reflect such views
Slide 3: Disclaimer (2/2)
Credit Investor Presentation – October 2012 Disclaimer (2/2) This presentation does not constitute or form a part of any offer or solicitation to purchase or sell securities in the United States or in any other jurisdiction. Securities may not be offered or sold in the United States absent registrat
Slide 4: Table of contents
Credit Investor Presentation – October 2012 Table of contents 1) Group profile and Strategy page 5 to 15 2) H1 Performance page 16 to 21 3) Summary financials & Financing structure page 22 to 25 4) Key credit highlights page 26 to 28 5) Appendices page 29 to 40 4
Slide 5: Group profile & Strategy
Lagardere Group profile & Strategy
Slide 6: Lagardère Group profile
Credit Investor Presentation – October 2012 Lagardère Group profile 2nd Publisher worldwide 1st Magazine publisher World leader Leader on European soccer in France in Travel retail and 1st Publisher in Europe duty free Leader in sports rights in 1st TV production group 4,000 stores mostly Asia and t
Slide 7: 1998-2011: refocus on media, with a balanced business mix
Credit Investor Presentation – October 2012 1998-2011: refocus on media, with a balanced business mix 1998 2011 2015 As % of Recurring EBIT before associates Unlimited (1) Unlimited 36% 23% Media 12% Automotive Active Closed Active Publishing 53% 52% 25% Publishing High tech Services: Services: - Tr
Slide 8: Financial profile – 2011
Credit Investor Presentation – October 2012 Financial profile – 2011 Net sales by division Recurring EBIT by division Unlimited Unimited (1) 6% Publishing Active 23% 27% Services Publishing 48% 53% Services Active 25% 19% (1) Recurring EBIT - 2011 - Unlimited: -€6m Net sales by geographic area Rest
Slide 9: RESILIENCE: Track record in Lagardère Publishing
Credit Investor Presentation – October 2012 RESILIENCE: Track record in Lagardère Publishing Resilient revenues and double-digit margin Net sales Operating margin €2,273m €2,130m €2,159m €2,165m €2,038m* 13.2% 11.2% 11.4% 11.6% 10.8% 2007 2008 2009 2010 2011 *Excluding the Stephenie Meyer effect, ne
Slide 10: RESILIENCE: Lagardère Active: transition to a more resilient profile
Credit Investor Presentation – October 2012 RESILIENCE: Lagardère Active: transition to a more resilient profile 1. Reduce exposure to advertising 2. Maintain leadership in France: strong focus on women and news segments Exposure to the advertising market (as % of sales) Performance in magazine circ
Slide 11: GROWTH: Digital books in Lagardère Publishing
Credit Investor Presentation – October 2012 GROWTH: Digital books in Lagardère Publishing E-book: an opportunity, thanks to a sound business model 1. Relying on e-reader device penetration 2. E-books boom: respectively 27% and 23% of US and UK sales in adult trade in H1 2012 E-book market forecasts
Slide 12: GROWTH: Travel retail in Lagardère Services
Credit Investor Presentation – October 2012 GROWTH: Travel retail in Lagardère Services 1. Increase in air traffic 2. Expansion on emerging markets Global long-term Passenger Forecast Travel Retail revenue in emerging markets* 12 CAGR Passengers (billions) 10 CAGR €768m 4,5 +11% 8 +4.2% €506m 6 3,1
Slide 13: LS Travel Retail strategic objectives
Credit Investor Presentation – October 2012 LS Travel Retail strategic objectives LS Travel Retail sales and Ebitda margin evolution – Proportional view* (2011-2016) Sales growth** Ebitda margin improvement** +10% +0.5 pt to +1.0 pt per annum over the period 2/3 by organic growth Favorable mix e
Slide 14: GROWTH: Global Sports market growth
Credit Investor Presentation – October 2012 GROWTH: Global Sports market growth 1. Sports market growth (media rights, sponsorship, ticketing) in $bn CAGR +6% CAGR + 3% Source : PwC. 2. Our strategy: turnaround the existing assets and expand progressively in • New sports • New geographies • New busi
Slide 15: Travel retail, digital, and sports are clear expansion areas
Credit Investor Presentation – October 2012 Travel retail, digital, and sports are clear expansion areas Lagardère businesses mapping EXPAND Growth Digital Travel retail Sports Rights Magazines, Radio, TV, Book TV Production Publishing Distribution DIVEST ENHANCE VALUE Market position 15
Slide 16: H1 Performance
Lagardere H1 Performance
Slide 17: Lagardère Publishing: Financial data
Credit Investor Presentation – October 2012 Lagardère Publishing: Financial data H1 2012 sales by geographical area FY 2011 sales by activity (H1 2012 NS) Other Other Education 18% 23% 20% France 33% Spain 7% Reference Illustrated 4% books 14% United States & United General Canada Kingdom littératur
Slide 18: Lagardère Active: Financial data
Credit Investor Presentation – October 2012 Lagardère Active: Financial data H1 2012 sales by geographical area H1 2012 sales by activity International Radio 8% 23% Press & other TV and TV 61% production 16% France 92% H1 2012 highlights: Change • Net sales -3,7% like-for-like: negative trends in H1
Slide 19: Lagardère Services: Financial data
Credit Investor Presentation – October 2012 Lagardère Services: Financial data H1 2012 sales by geographical area H1 2012 sales by activity Switzerland Asia & Wholesale 12% Australia Spain 7% Distribution 10% Other 26% 28%* United 5% States & Canada 6% 44% 56% France 47%* 53%* Eastern 28% Europe Int
Slide 20: Lagardère Unlimited: Financial data
Credit Investor Presentation – October 2012 Lagardère Unlimited: Financial data H1 2012 sales by geographical area H1 2012 sales by activity Other Rest of Germany 13% World 10%* 21% 23% United Media Kingdom rights 5% 46% 51%* France Marketing 11% rights Asia 24% 41% 39%* Rest of Europe 16% *% of net
Slide 21: 2012 group outlook and guidance
Credit Investor Presentation – October 2012 2012 group outlook and guidance The second half of the year should benefit from a significant improvement in profitability after a first half performance that cannot be extrapolated to the full year, and which is traditionally weaker in terms of the Group'
Slide 22: Summary financials & Financing structure
Summary financials & Financing structure 22
Slide 23: Key figures – Full year
Credit Investor Presentation – October 2012 Key figures – Full year Comparable (€m) 2010 2011 Change change* Net sales 7,966 7,657 -3.9% +0.2% Recurring Media EBIT** 468 414 -11.4% -11.1% Consolidated recurring EBIT incl. Non-Media 462 402 -€60m / Net income – Group share 163 (707) ns / Adjusted net
Slide 24: Sound financial position: 2007 – 2011 achievements
Credit Investor Presentation – October 2012 Sound financial position: 2007 – 2011 achievements Significant effort at reducing Prudent financial policy focused the level of debt on diversification of funding sources Debt breakdown (excluding Mandatory exchangeable bond) €2,570 m Net debt down 2007 20
Slide 25: Sound financial position and conservative financial policy
Credit Investor Presentation – October 2012 Sound financial position and conservative financial policy Proven ability to deleverage from 2010 to 2011 • Leverage (net debt/Ebitda) reduced by 0.8 points to reach 2.0x end 2011 • H1 2012 saw an increase in net debt due to seasonal negative Free cash flo
Slide 26: Key credit highlights
Lagardere Key credit highlights
Slide 27: Key credit highlights
Credit Investor Presentation – October 2012 Key credit highlights Leading market positions in Publishing (#2 worldwide publisher) & Services (worldwide leader in Travel Retail) A diversified, complementary & unique business mix within the media industry A geographically diversified group with c.2/3
Slide 28: Offering summary
Credit Investor Presentation – October 2012 Offering summary Issuer: Lagardère SCA Rating: Unrated €1.6bn Debt maturity profile – End June 2012 Maturity: 5 yr Authorized credit lines Size: Benchmark Format: Fixed rate Treasury Documentation: Stand alone Cotation: Luxembourg Liquidity Jun 12- Jun 13-
Slide 29: Appendices
Lagardere Appendices
Slide 30: Shareholding structure
Credit Investor Presentation – October 2012 Shareholding structure Capital at end July 2012 Number of shares 131 133 286 Number of voting rights 162 080 709 Share capital at end July 2012 Voting rights at end July 2012 French institutional French institutional investors investors 16.66% Qatar * Reta
Slide 31: Consolidated income statement (1/2)
Credit Investor Presentation – October 2012 Consolidated income statement (1/2) H1 2011 H1 2012 Lagardère Other Lagardère Other (€m) Media activities* Total Media activities* Total Net sales 3,724 - 3,724 3,389 - 3,389 Recurring EBIT before 168 (8) 160 112 (6) 106 associates** Income from associates
Slide 32: Consolidated income statement (2/2)
Credit Investor Presentation – October 2012 Consolidated income statement (2/2) H1 2011 H1 2012 Lagardère Other Lagardère Other (€m) Media activities* Total Media activities* Total EBIT 154 1 155 76 36 112 Net interest expense (22) (23) (45) (11) (29) (40) Income before tax 132 (22) 110 65 7 72 Inco
Slide 33: Adjusted net income – Group share
Credit Investor Presentation – October 2012 Adjusted net income – Group share (€m) H1 2011 H1 2012 Net income attributable to the Group 28 36 Equity accounted contribution from EADS (9) (42) Amortisation of acquisition-related intangible assets and other acquisition-related expenses* 22 13 Impairmen
Slide 34: Consolidated statement of cash flows
Credit Investor Presentation – October 2012 Consolidated statement of cash flows (€m) H1 2011 H1 2012 Cash flow from operations before interest, taxes 282 237 Changes in working capital (278) (191) Cash flow from operations 4 46 Interest paid & received, income taxes paid (62) (44) Cash generated by
Slide 35: Consolidated balance sheet
Credit Investor Presentation – October 2012 Consolidated balance sheet (€m) Dec. 31, 2011 June 30, 2012 Non-current assets (excl. investments in associates) 3,626 3,677 Investments in associates 1,771 1,673 EADS 277 185 Other associates 1,494 1,488 Current assets (other than short-term investments a
Slide 36: Main associates
Credit Investor Presentation – October 2012 Main associates Balance Sheet Income Statement 2011 2012 2011 2012 (as of (as of (as of (as of (€m) 31/12/2011) 30/06/2012) 30/06/2011) 30/06/2012) EADS (7.4%) 277 185 9 42 Canal+ France (20%) 1,197 1,197 - - Marie Claire (42%) 125 125 3 2 Amaury (25%) 99
Slide 37: Recap of Media performance by division
Credit Investor Presentation – October 2012 Recap of Media performance by division Net sales (€m) H1 2012 net sales €m change Change vs H1 2011 Lagardère Publishing 905 +€5m +0.5% Lagardère Active 450 -€357m -44.2% Lagardère Services 1,821 +€17m +1.0% Lagardère Unlimited 213 - - Total Media 3,389 -€
Slide 38: EBITDA
Credit Investor Presentation – October 2012 EBITDA (€m) H1 2011 H1 2012 €m change Change vs H1 2011 Lagardère Publishing 83 69 -€14m -16.3% Lagardère Active 78 30 -€48m -61.3% Lagardère Services 76 71 -€5m -6.7% Lagardère Unlimited 59 42 -€17m -29.3% Total Media 296 212 -€84m -28.4% Other activities
Slide 39: For the record: definitions of Recurring Media EBIT and EBITDA
Credit Investor Presentation – October 2012 For the record : definitions of Recurring Media EBIT and EBITDA Recurring Media EBIT of consolidated companies is defined as the difference between result before financial charges and tax and the following items of the profit and loss statement: Contribu
Slide 40: Lagardère IR Team
Credit Investor Presentation – October 2012 Lagardère IR Team Anthony MELLOR Head of Investor Relations Tel: 33 1 40 69 18 02 Josefin GUSTAVSEN amellor@lagardere.fr Assistant Tel: 33 1 40 69 19 22 Fax: 33 1 40 69 22 72 jgustavsen@lagardere.fr Sophie BARBOSA Investor Relations Deputy Head Tel: 33 1 4
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