introduction al vdef - lagardere.com · enables capital reallocation, for full strategy...

28 MAY 2014

INVESTOR DAYINTRODUCTION

INVESTOR DAY PURPOSE

2

INVESTOR DAY / INTRODUCTION / 28 MAY 2014

Over the past years, we’ve been building the foundations of a better growth profile

Next years strategyElaborate on the Group’s growth opportunities

Streamlining our portfolio, with the disposal ofmajor non-core assets and minority stakes

Enhancing our leadership market positions

Investing in growing activities

Increasing the Group’s financial headroom

Today’s agenda:

GROUP PROFILE REMINDER

INVESTOR DAY28 MAY 2014

A DIVERSIFIED MEDIA GROUP WITH LEADING GLOBAL BRANDS AND MARKET POSITIONS

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#1 in France#2 in the UK, #3 in Spain

#4 in the US

27 French titles87 international

editions under license

More than 4,000 shops in 30 countries and

150 airports worldwide

World #3 trade book publisher

A leading digital player

France #1 Internet & mobile media Group

French #1 TV Production Group

Leading magazine publisher

Major player in Radio

A world leader in Travel Retail

Strong expertise in three business

lines

Leading global sports marketing, media and

event management company

Preeminent in football globally, with leading positions in Europe,

Asia and Africa

Major player in golf, tennis, olympicmarketing and

stadiums businesses

A multi-segment publisher

Trade and Illustratedbooks, Education,

Partworks Duty Free & LuxuryFood & Beverage,Travel Essentials

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Divisions owned at 100%Enables capital reallocation, for full strategy implementation

Diversity is a strength

Benefit from several underlyingtrends and business cycles

GDP, school curricula renewals, demographics, air traffic, sports events, etc.

Diversified business models

B to B, B to C, etc.

Diversified business profiles

Growth, cash generation/allocation, profitability, etc.

Mitigates risk

Complementarity

A STRONG PROFILE

2003-2013 KEY FIGURES


Profile improved over the past 10 years

Today: an international Group with diversified geographical exposure2013 net sales breakdown by geography

12%

50%

6%5%14%

13%

Unlimited

12%

17%21% 20%

2003 2007 2010 2013

57%63% 66% 63%

2003 2007 2010 2013

37%

33%

10%

11%7%2%

Groupe

Latin America,Africa, Middle East

ASPAC

Eastern Europe

USA/Canada

Western Europe

France

32%

30%

25%

2%6%5%

Publishing

29%

39%

6%

18%

8%

Services

87%

6% 1%6%

Active

10%

14%16%

Figures excluding International Magazine Publishing disposed in 2011.

42%

51% 56%

Emerging countries: +8 pts International: +6 pts


IMPROVED GEOGRAPHICAL EXPOSURE

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Evolution of print revenues as % of total sales

Evolution of advertising** revenues as % of total sales

Total reduction in print exposure:

Total reduction in advertising exposure:

72%67%

61%

49%

2003 2007 2010 2013

-23 pts

-9 pts

16% 17%14%

7%

2003 2007 2010 2013

*

*

**Advertising sales at Lagardère Active and marketing sales at Lagardère Unlimited.*Excluding EADS proportionate consolidation.


REDUCED EXPOSURE TO PRINTAND ADVERTISING

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SOLID CASH GENERATIONAND BALANCED CASH POLICY

Cash flow from operations

~€4.6bn

Assetsdisposals

~€7.6bn

Return to shareholders31%, ~€3.8bn

Deleveraging21%, ~€2.6bn

Organic growth18%, ~€2.1bn

Acquisitions30%, ~€3.7bn Business

development:

2003-2013 cash sources*

2003-2013 cash usage*

48%

*Figures from 2003 to 2006 excluding EADS proportionate consolidation. 9

~€12.2bn ~€12.2bn

BUSINESS STRATEGY


FROM MEGATRENDS ANALYSIS…

Divest non-core

activities & minority stakes

Invest in higher growth

activities

Enhance leadership positions

2

1

3

Megatrends: Growth strategy:

Re-allocate

cash generation

and capital from

assets disposals

GROWTH:

- Mostly organic innovation, entrepreneurship

- External acquisitions

Impact:

Digitalisation

Mobility

Globalisation

Audience fragmentation

Value shift to customer

knowledge (data

management)

Increase in air traffic

Increase in emerging countries’ wealthy &

middle class


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‐8%

‐6%

‐4%

‐2%

0%

2%

4%

6%

8%

10%

12%

0 2 4 6 8 10 12

Book Publishing

Press

Travel Retail

Television

Radio

Lagardère Unlimited

Digital

DistributionEnhance leadership positions

Divest non-core activitiesand minority stakes

Invest in highergrowth activities

Gro

wth

pot

entia

l

Market position1

2

3

…TO PORTFOLIO ANALYSISINVESTOR DAY / INTRODUCTION / 28 MAY 2014

12

Size proportional to sales.N.B:

ACHIEVEMENTS


DIVEST NON-CORE ACTIVITIES AND MINORITY STAKESINVESTOR DAY / INTRODUCTION / 28 MAY 2014

2011

2001

2006

2.1% of EADS

7.5% of EADS

French local newspapers

International Magazine Publishing

2007Virgin Megastore

2005 T-Online

2013 7.4% of EADS 20% of Canal+ France 25% of Amaury2014

Launch of disposal process of Press Distribution and Integrated

Retail

Disposal of 10 French magazines

Le Monde interactif

Minority stakesNon-core activities

2000Printing activities in SpainEncyclopaedia in the US

Printing activities in Italy, France and Belgium

Distribution in Germany

1

14

ENHANCE LEADERSHIP POSITIONS (1/3)

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From world #11 in 2003 to #3 in 2013

Sustained consolidation of positions across 3 major languages (French, English and Spanish) and across all market segments (trade, education, illustrated, etc.) Acquisition of Editis (France), Grupo Anaya (Spain), Hodder Headline (UK), Time Warner Book Group (US), Albert René (France), Galore Park (UK), Quercus (UK), Hyperion (US), etc.

Successful digital transitionDigital accounts for 10.4% of total sales in 2013

Footprint in emerging countriesArgentina, Mexico, China, Russia, India, Lebanon

Ranking evolution:

Continuous investment in innovation and talent sourcing- Significant success of Partworks developed in house- Major best seller authors in portfolio

2

51%

8%

41%

1

Duty Free

Food Service

Travel essentials66%

4%

30%

1

ENHANCE LEADERSHIP POSITIONS (2/3)

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2

Consolidation of major long term partnershipsJoint ventures with ADP and SNCF

Significant improvement of Travel Retail product mix

Travel Retail sales@100%* breakdown:

*Consolidated sales + 100% of JV’s sales.**Fashion, alcohol & liquors, perfumes & cosmetics, tobacco.***News & convenience, gifts & souvenirs, electronics & media.

Decreased print exposure

Duty Free development

20132003

**

***

+11 pts

-15 pts

ENHANCE LEADERSHIP POSITIONS (3/3)INVESTOR DAY / INTRODUCTION / 28 MAY 2014

82% 67%

7%14 % 7%

8%4%

2007 2013

Middle East

Africa

America

ASPAC

Europe

4%2%5%

Extended geographical exposure

Licensing & digital share in Elle revenues:

36%

Strengthened position of media brands in France

Non European countries from 18% to 33%

+ 15 pts

Extended sports portfolioOther sports than

soccer+16 pts

17

2

84% 68%

16% 32%

2007 2013

Other

Soccer

DEVELOP HIGHER GROWTH ACTIVITIES (1/3)

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3

Acquisitions and gain of concessions in Travel Retail

8 countries28% International*World #5

Source: Lagardère Services, ACI Worldwide Airport Traffic Report. *Consolidated net sales.

2003

DEVELOP HIGHER GROWTH ACTIVITIES (2/3)

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3

Acquisitions and gain of concessions in Travel Retail

8 countries28% International*World #5

30 countries, 150 airports52% International*World #3

Airports classified among the world’s top 100 airports in terms of passenger volume

Other airports

Source: Lagardère Services, ACI Worldwide Airport Traffic Report.

Today

*Consolidated net sales.

2003

DEVELOP HIGHER GROWTH ACTIVITIES (3/3)INVESTOR DAY / INTRODUCTION / 28 MAY 2014

3

Rights & contentBuilt a leadership position in sports markets with the creationof Lagardère UnlimitedBranch out in new business modelsConsulting, stadium solutions, agent

TV Production development- Continuous content creation, with scripted vs. non scripted content rebalancing- Acquisitions (Les Productions 22, B3Com, Réservoir Prod, etc.)

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DigitalDevelopment and acquisition of websites and apps

Educational apps and e-learning platforms

Digital innovation- Sportfive: launch of the first official application for the Orange Africa Cup of

Nations and creation of the Media Center (already adopted by five German soccer clubs)

- Launch of innovative offers by Lagardère Publicité:LP Player (real-time 3D augmented reality), second screen system…

INCREASED SHARE OF HIGHER GROWTH* POTENTIAL ACTIVITIES


2003 2007 2010 2013

Travel Retail excl. Relay

Travel Retail excl. Relay ‐emerging markets

Emerging markets ‐ LagardèrePublishing & Lagardère Active

Lagardère Unlimited‐ emergingmarkets

Lagardère Unlimited excl.emerging markets

TV production

Digital

Higher growth* potential activities:

*Higher growth= GDP+.

11%

25%30%

39%+28 pts

(as % of Group sales)

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AGENDA


INVESTOR DAY

AGENDA

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Lagardère PublishingHachette Livre since 2010Successful digital transformation3 year outlook

10.50 am – 11.10 am: Q&A session Publishing

11.10 am – 11.30 am: coffee break

Lagardère ServicesA new Lagardère ServicesAn attractive market on which Lagardère Services is well positionedA sustained growth exceeding expectationsA widely demonstrated operational excellenceAn ambitious vision for future

1.00 pm – 2.15 pm: lunch

Lagardère UnlimitedGlobal sports market key facts and trendsOverview of Lagardère UnlimitedIllustration of growth perspectives by sport

Lagardère ActiveDigital strategyBrand licensingTV Production

4.00 p.m. Q&A session4.30 p.m. End of Investor Day

introduction al vdef - lagardere.com · enables capital reallocation, for full strategy...

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