2012 Full-Year Results - March 7, 2013 - Lagardère
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2012 Full-Year Results March 7, 2013
2012 Full-Year Results / March 7, 2013
Disclaimer
Certain statements contained in this document are forward-looking statements which address our vision of
expected future business and financial performance. Undue reliance should not be placed on such
statements which are subject to risks and uncertainties.
When used in this document, words such as “anticipate”, “believe”, “estimate”, “expect”, “may”, “intend” and
“plan” are intended to identify forward-looking statements. Such statements include, without limitation,
projections for improvements in process and operations, revenues and operating margin growth, cash flow,
performance, new products and services, current and future markets for products and services and other
trend projections as well as new business opportunities.
These forward-looking statements are based upon a number of assumptions which are subject to
uncertainty and trends that may differ materially from future results, depending on a variety of factors
including without limitation:
• general economic conditions, including in particular growth in Europe and North America;
• legal, regulatory, financial and governmental risks related to the businesses;
• certain risks related to the media industry (including, without limitation, technological risks);
• the cyclical nature of some of the businesses.
Please refer to the most recent Reference Document (Document de référence) filed by Lagardère SCA with
the French Autorité des marchés financiers for additional information in relation to such factors, risks and
uncertainties.
Lagardère SCA undertakes no obligation to update or review the forward-looking statements referred to
above. Consequently Lagardère SCA is not liable for any consequences that could result from the use of
any of the above statements.
2
2012 Full-Year Results / March 7, 2013
Contents
Key performance figures pages 4 to 10
Performance by division pages 11 to 20
Group financial results pages 21 to 28
Appendices pages 29 to 41
Significant events pages 42 to 67
3
Key performance figures
4
2012 Full-Year Results / March 7, 2013
Changes of scope: main items (1/3)
Lagardère Active
Increased footprint in Digital:
• acquisition of 96% of LeGuide.com Group, online shopping guide operator,
consolidated as of July 1, 2012;
• acquisition of the online ticketing service site Billetreduc.com at end 2012.
Consolidation in Lagardere Active accounts as of December 31, 2012.
Management of portfolio:
• disposal of the joint-venture with Marie Claire in China as of February 1, 2012,
completing the PMI (International Magazine Publishing) disposal carried out in 2011;
• unbundling of the partnership in magazines with Socpresse in July 2012:
‒ acquisition of minority interest from 50% to 100% in SPF (“Société de Presse
Feminine”), editor of women’s magazine Version Femina;
‒ disposal and deconsolidation of “Publications Groupe Loisirs”, editor of
TV Magazine.
• disposal and deconsolidation of NextIdea Group (digital marketing agencies) as of
October 1, 2012.
5
2012 Full-Year Results / March 7, 2013
Changes of scope: main items (2/3)
Lagardère Services
Continued development of Lagardère Services Travel Retail activities:
• acquisition and full consolidation of:
‒ UG-Air (Praga airport) and Airport Fashion (Geneva airport), as of
January 1, 2012 and March 1, 2012 respectively;
‒ Duty Free Stores Wellington (duty free – airports in Australia and New Zealand)
as of July 1, 2012;
‒ AdR Retail (operator of duty free/duty paid shops in Fiumicino and Campino
airports in Rome) as of October 1, 2012.
• creation of Lyon Duty Free in partnership with Lyon airport and take-over the
Réunion Island (Indian Ocean) airport concession under the partnership with
Servair. Consolidation under the equity method starting from January 1, 2012 and
March 1, 2012 respectively.
Disposals in Wholesale Press Distribution:
• sale and deconsolidation of the book distribution business OLF in Switzerland,
as of October 1, 2012.
6
2012 Full-Year Results / March 7, 2013
Changes of scope: main items (3/3)
Lagardère Unlimited
Increased footprint in Marketing rights and Talent representation:
• acquisition of the following entities, fully consolidated:
‒ 80% of North American company Gaylord Sports Management (re-named
Lagardère Unlimited Arizona), agency specialised in golf and baseball athletes
representation, as of January 1, 2012;
‒ Australian group SMAM, consultancy agency in sport rights marketing, as of
September 2012.
• full consolidation as of May 1, 2012 of the German company Zaechel AG (sport
events promotion and hospitality) previously consolidated under the equity method,
and whose ownership has risen from 30% to 90%.
7
2012 Full-Year Results / March 7, 2013
Group net sales – 2012
Net sales
€7,657m €7,370m
-0.2%
Like-for-like €7,254m €7,239m Like-for-like
2011 net sales* like-for-like 2012 net sales*
2011 2012
In 2012, the Lagardère group activity held up well, almost stable on
a like-for-like basis.
The development strategy for growing business lines (in particular Digital
and Travel Retail) bore fruit, offsetting a still-difficult economy in Europe and
declining print markets.
*At constant perimeter and exchange rate, see definition slide 41. 8
2012 Full-Year Results / March 7, 2013
Key figures – Group
(€m) 2011 2012 Change
Net sales 7,657 7,370 -3.7%
Media Recurring EBIT before associates* 414 358 -€56m
Net income – Group share (707) 89 +€796m
Adjusted net income – Group share 226 207 -€19m
Cash from operating activities 257 391 +€134m
Net debt (end of year) 1,269 1,700 +€431m
Earnings per share (in €) (5.56) 0.70
Dividend per share (in €) 1.30 1.30**
*See definition slide 41.
**For 2012, dividend that will be recommended at the General Shareholders’ Meeting on May 3, 2013.
9
2012 Full-Year Results / March 7, 2013
2012 Media Recurring EBIT, slightly above the FY guidance
+€414m -€49m
-€10m +€355m +€3m +€358m
2011 Reported Ebit Change of Scope Other 2011 Comparable Business 2012 Reported Ebit
Performance
PMI and Russian Provision IOC: -€22m
radio sold LeGuide.com: €5m
Foreign Exchange: €7m
10Performance by division
112012 Full-Year Results / March 7, 2013
Lagardère Publishing: activity
2012 net sales by geographical area 2012 net sales by activity
Other Education
Other
17% 18%
23%
17%* France
22%* 20%*
32%
Spain 33%*
8% Illustrated
Reference
9%* 4% Books
4%* 15%
15%*
USA &
Canada UK & General
23% Australia Literature
23%* 20% 40%
18%* 39%*
2012 net sales: €2,077m (-1.2% like-for-like).
• Activity in France was up slightly (+0.5%), despite the dip in Education (end of the renewal
of school curricula). Good performance in General Literature, with notably the publication
of best-sellers by J.K. Rowling and E L James, and in Illustrated Books.
• Despite commercially successful books, sales trends in the United Kingdom is down
slightly (-1.9%), due to the strong increase in Digital activities, to still-difficult international
market trends (Australia) and to the disposal of publisher’s lists in Education.
• In the United States, sales trends (-3.4%) reflects the growing share of Digital activities.
Activity is slightly up in volumes (+1.2%).
• Spain is still suffering from the economic crisis.
• Partworks performed well (+3.1%) in Japan and the UK notably.
*% of net sales in 2011. 122012 Full-Year Results / March 7, 2013
Lagardère Publishing: focus on e-book
Continued growth in digital books, which now make up 8% of net sales vs. 6% in 2011.
• E-books represent a significant share of the market in the Anglo-Saxon countries:
‒ the United Kingdom still enjoys sustained growth (x2 vs. 2011)...
‒ ... but a marked slowdown in the United States (“only” +15% vs. 2011).
• In France, as in other Lagardère Publishing’s markets, digital books still make up less than
2% of sales.
• In our Education markets (France, Spain), digital remains very small.
• The growing share of digital weighs on sales, due to lower unit price (with no negative
impact on margins).
• Settlement with DoJ (US) and European Commission puts anti-trust lawsuits to rest.
‒ The “agency model” is preserved.
E-book share – as percentage of trade market sales Lagardère Publishing e-book sales
United States United Kingdom* France** % of total sales
8%
50% 50% 50%
6%
40% 40% 40%
23% 23%
30% 30% 30% 2%
21% 0.7%
20% 20% 10% 20% 0.1%
8% 1.8%
10% 3% 10% 10%
1% 1%
0% 0% 0%
2008 2009 2010 2011 2012 2010 2011 2012 2010 2011 2012 2008 2009 2010 2011 2012
*Adult trade. / **General Literature. 132012 Full-Year Results / March 7, 2013
Lagardère Publishing: profitability
(€m) 2011 2012 Change
Net sales (a) 2,038 2,077 +1.9%
Recurring EBIT before associates (b) 221 223 +€2m
Operating margin (b)/(a) 10.8% 10.7% -0.1 pt
Income from associates 1 0 -
Non-recurring/non-operating items (9) (7) -
EBIT 213 216 +€3m
2012 profitability
• Significant upturn in H2, as expected.
• Operating margin is maintained at a high level:
‒ an excellent year in the UK benefiting from strong commercial success in General
Literature and rising digital sales;
‒ a solid performance in Partworks;
‒ a contrasted year in France, where buoyant results in General Literature, Illustrated
Books and Larousse were offset by the expected decrease in Education;
‒ profitability in the US is down, due to lower sales and to the impact of the settlement
on e-books;
‒ the economic environment in Spain leads to lower profit.
142012 Full-Year Results / March 7, 2013
Lagardère Active: activity
2012 net sales by geographical area 2012 net sales by activity
International Radio
12% 20%
34%* 18%*
Press &
other
57%
66%*
Television
23%
France
16%*
88%
66%*
2012 net sales: €1,014m (-3.9% like-for-like).
• A significant improvement in Q4 compared to end-September, especially in Radio and
TV Production.
• Advertising was down by 5.9%, more pronounced for Magazines (-7.5%) than for
Radio (-3.8%).
• Magazines circulation decreased substantially (-7%), affected by disruptions in
distribution in newsstands. Still, the Group division's titles did better than its
competitors, with the resulting improvement in market share.
• Television (Channels and Audiovisual Production) made progress, as did Brand
Licensing for the division, specifically generated by the Elle brand.
*% of net sales in 2011. 152012 Full-Year Results / March 7, 2013
Lagardère Active: profitability
Change
2011 vs. 2011 Pro
(€m) 2011 Pro forma* 2012 forma
Net sales (a) 1,441 1,028 1,014 -1.4 %
Recurring EBIT before associates (b) 95 46 64 +€18m
Operating margin (b)/(a) 6.6% 4.5% 6.4% +1.9 pts
Income from associates 21 19 8 -
Non-recurring/non-operating items (21) (21) (69) -
EBIT 95 44 3 -€41m
2012 profitability is up on a comparable basis, despite lower revenues, thanks
to:
• tight cost control (overheads and operating expenses) which more than offsets
negative trends in advertising and circulation;
• good performance in TV Channels and Licensing revenues.
Non-recurring and non operating items are up, in relation with restructuring
costs (€28m), impairment of goodwill (€28m) and of property (€5m).
*Figures pro forma, excluding major assets sold (International Magazine Publishing-PMI and Russian radio). 162012 Full-Year Results / March 7, 2013
Lagardère Services: activity
2012 net sales by geographical area 2012 net sales by activity
Switzerland Asia &
11% Australia
Spain 12%* Wholesale
8%
10% 6%* Distribution
12%* 26%
Other 28%*
USA & 5%
4%*
Canada
6%
6%*
France 44% 56%
28% 47%* 53%*
Eastern 29%*
Europe Integrated
20% Retail
18%* 18%
Belgium
12% 19%*
13%*
2012 net sales: €3,809m (+2.2% like-for-like).
• Continued strong growth momentum in Travel Retail, up 8.2% like-for-like:
- growth was especially marked in France in Duty Free (+15% for Aelia) and Central Europe,
as well as the United Kingdom and Germany;
- due to the network's development, the Asia-Pacific area showed real progress at +7.2%,
including 32.5% in Asia. North America was down slightly in an unfavourable economy;
- air traffic pursues its growth (+4.2% worldwide**).
• Distribution was down -4.5% like-for-like, due to substantial decrease in press-related activities.
The division's business mix continued its strategic transformation, ongoing for
several years. Travel Retail now represents 56% of the total compared with 44% for
LS distribution.
*% of net sales in 2011. / **Source: ACI data at October 31, 2012. 172012 Full-Year Results / March 7, 2013
Lagardère Services: profitability
(€m) 2011 2012 Change
Net sales (a) 3,724 3,809 +2.3%
Recurring EBIT before associates (b) 105 104 -€1m
Operating margin (b)/(a) 2.8% 2.7% -0.1 pt
Income from associates 9 7 -
Non-recurring/non-operating items (28) (31) -
EBIT 86 80 -€6m
2012 profit is almost stable thanks to growth in net sales, especially in Duty Free
and Food Services, which offset the difficult environment in Distribution.
• Travel Retail: the rise of profitability benefits from very good performance in Duty Free in
France and in Eastern Europe but is negatively impacted by development costs in Asia-
Pacific area.
• Distribution: decrease in profitability due to a decline of Press Distribution, mostly in the US,
Switzerland and Spain, despite efforts on costs and resilience of Integrated Retail.
Non-recurring and non-operating items comprise: restructuring costs (€7m),
impairment of goodwill (€5m), amortisation of acquisition-related intangible
assets (€11m).
182012 Full-Year Results / March 7, 2013
Lagardère Unlimited: activity
2012 net sales by geographical area 2012 net sales by activity
Rest of Germany Other
World 25% 17%
20% 21%* 16%*
16%*
Media rights
40%
UK 46%*
Asia
7% Marketing
21%
6%* rights
24%*
43%
France 38%*
11%
Rest of
Europe 11%*
16% .
22%*
2012 net sales: €470m (-5.9% like-for-like).
• Downturn at Sportfive largely due to the impact of the unfavourable draw for the UEFA
qualification matches for the 2014 soccer World Cup, as well as the expiry of media
rights contracts to some football championships in Europe.
• These known items were partially offset by the occurrence of the CAN**, and by good
performances with football clubs in Germany.
• Also notable at World Sport Group was a negative calendar effect (AFC*** occurring in
2011 and not in 2012), partially offset by the new UAFA**** contract.
*% of net sales in 2011. / **Africa Cup of Nations. / ***Asian Football Cup. / ****Union of Arab Football Associations. 192012 Full-Year Results / March 7, 2013
Lagardère Unlimited: profitability
(€m) 2011 2012 Change
Net sales (a) 454 470 +3.5%
Recurring EBIT before associates (b) (6) (33) -€27m
Operating margin (b)/(a) - - -
Income from associates 1 1 -
Non-recurring/non-operating items* (634) (66) -
EBIT (639) (98) +€541m
2012 operating profitability
• Recurring EBIT before associates is hit by three main items:
‒ the -€22m provision loss on IOC** contract (2014 and 2016 Olympic games);
‒ the unfavourable draw on UEFA qualifying matches;
‒ a less favourable sport event calendar.
• World Sport Group profit increases thanks to good performance.
Non-recurring and non operating items comprise mainly impairment of
goodwill (€49m), amortisation of acquisition-related intangible assets (€13m).
*Amortisation of acquisition-related intangible assets was -€73m in 2011 and -€13m in 2012. / **International Olympic Committee. 20Group financial results
212012 Full-Year Results / March 7, 2013
Consolidated income statement (1/2)
2011 2012
Lagardère Other Lagardère Other
(€m) Media activities* Total Media activities* Total
Net sales 7,657 - 7,657 7,370 - 7,370
Recurring EBIT before
414 (12) 402 358 (19) 339
associates**
Income from associates*** 33 79**** 112 16 89**** 105
Non-recurring items (692) (311) (1,003) (173) (43) (216)
Restructuring costs (41) - (41) (40) - (40)
Gains/(losses) on disposals 18 (1) 17 (3) - (3)
Impairment losses on goodwill, (585) (310) (95) (43) (138)
(895)
tangible & intangible fixed assets
Amortisation of acquisition-related
intangible assets and other (84) - (84) (35) - (35)
acquisition-related expenses
EBIT (245) (244) (489) 201 27 228
*Non-media, Canal+ France and EADS. / **See definition slide 41. / ***Before impairment loss. / ****EADS contribution.
222012 Full-Year Results / March 7, 2013
Consolidated income statement (2/2)
2011 2012
Lagardère Other Lagardère Other
(€m) Media activities* Total Media activities* Total
EBIT (245) (244) (489) 201 27 228
Net interest expense (44) (51) (95) (25) (57) (82)
Income before tax (289) (295) (584) 176 (30) 146
Income tax expense (150) 45 (105) (143) 103 (40)
Total net income (439) (250) (689) 33 73 106
Attributable to minority interests (18) - (18) (17) - (17)
Net income – Group share (457) (250) (707) 16 73 89
*Non-media, Canal+ France and EADS.
232012 Full-Year Results / March 7, 2013
Adjusted net income – Group share
(€m) 2011 2012
Net income attributable to the Group (707) 89
Equity accounted contribution from EADS (79) (89)
Amortisation of acquisition-related intangible assets and other
acquisition-related expenses* 71 27
Impairment losses on goodwill, tangible and intangible fixed assets* 895 138
Restructuring costs* 36 37
Gains (losses) on disposals* 10 5
Adjusted net income excluding EADS** 226 207
Adjusted earnings per share excluding EADS (in €) 1.78 1.62
*Net of taxes.
**2011 adjusted net income includes €46m of net income from consolidated activities of PMI and Radio in Russia prior to their disposal.
242012 Full-Year Results / March 7, 2013
Consolidated statement of cash flows
(€m) 2011 2012
Cash flow from operations before interest, taxes 597 552
Changes in working capital (170) (21)
Cash flow from operations 427 531
Interest paid & received, income taxes paid (170) (140)
Cash generated by/(used in) operating activities 257 391
Acquisition of property, plant & equipment and intangible assets (253) (264)
Disposal of property, plant & equipment and intangible assets 26 20
Free cash flow 30 147
Acquisition of financial assets (99) (384)
Disposal of financial assets 814 65
(Increase)/decrease in short-term investments 21 28
Net cash from operating & investing activities 766 (144)
252012 Full-Year Results / March 7, 2013
Change in net debt in 2012
€1,700m
€31m
€64m
€192m
€144m
€1,269m
Net debt as of Net cash from Dividends paid Acquisition of FX, scope and Net debt as of
31/12/2011 operating & minority other items 31/12/2012
investing interests
activities
262012 Full-Year Results / March 7, 2013
Consolidated balance sheet
(€m) 2011 2012
Non-current assets (excl. investments in associates) 3,626 3,922
Investments in associates 1,771 1,451
EADS 277 -
Other associates 1,494 1,451
Current assets (other than short-term investments and cash) 2,781 2,847
Short-term investments and cash 737 703
Held-for-sale assets 13 437
TOTAL ASSETS 8,928 9,360
Stockholders’ equity 3,024 2,991
Non-current liabilities (excl. debt) 553 670
Non-current debt 1,843 2,165
Current liabilities (excl. debt) 3,345 3,296
Current debt 163 238
Held-for-sale liabilities - -
TOTAL LIABILITIES AND EQUITY 8,928 9,360
272012 Full-Year Results / March 7, 2013
Sound financial position
Gross debt breakdown:
well-balanced funding sources
2012
• Gearing* is 57% in 2012 vs. 42% in 2011. 7%
• Successful issue in October of a five-year
Bonds
maturity bond totalling €500 million. 28%
65% Bank loan
Other
Preservation of liquidity and
€1,678m
€1,700m balanced debt repayment schedule
Authorized
credit lines****:
€1,269m
975
886
769
Net debt/
EBITDA** 2,0x 3,1x 495
Treasury***:
703 238
3 12
Cash 2013 2014 2015 2016 2017 2018
available &
2011 2012 beyond
*Net debt-to equity ratio. ***Short-term investments and cash.
**See definition slide 41. ****Group credit facility excluding authorized credit lines at divisions level.
28Appendices
292012 Full-Year Results / March 7, 2013
Group profile – 2012
Net sales by division Recurring EBIT by division
Lagardère
Unlimited
6% Lagardère
Services
Lagardère 27%
Publishing
28%
Lagardère Lagardère
Services Publishing
52% 57%
Lagardère
Active Lagardère
14% Active
16% Note: Recurring EBIT/Lagardère Unlimited: -€33m.
Net sales by geographic area 2011 Net sales by geographic area 2012
USA & USA &
Canada Canada
11% 10%
Eastern Eastern
France France
Europe Europe
36% 36%
12% 12%
Asia- Asia-
Pacific Pacific
7% 7%
Other Other
2% 3%
Western Western
Europe Europe
32% 32%
Emerging countries: 21% Emerging countries: 22%
302012 Full-Year Results / March 7, 2013
Recap of Media performance by division
Net sales
(€m) 2012 net sales €m change Change vs 2011
Lagardère Publishing 2,077 +€39m +1.9%
Lagardère Active 1,014 -€427m -29.6%
Lagardère Services 3,809 +€85m +2.3%
Lagardère Unlimited 470 +€16m +3.5%
Total Media 7,370 -€287m -3.7%
Recurring Media EBIT before associates
(€m) 2012 EBIT €m change Change vs 2011
Lagardère Publishing 223 +€2m +0.8%
Lagardère Active 64 -€31m -32.1%
Lagardère Services 104 -€1m -1.1%
Lagardère Unlimited (33) -€27m -
Total Media 358 -€56m -13,6%
312012 Full-Year Results / March 7, 2013
EBITDA
(€m) 2011 2012 €m change Change vs 2011
Lagardère Publishing 241 247 +€6m +2.2%
Lagardère Active 139 52 -€87m -62,6%
Lagardère Services 150 162 +€12m +8.4%
Lagardère Unlimited 96 75 -€21m -21.9%
Total Media 626 536 -€90m -14.4%
Other activities 8 17 +€9m +122.3%
TOTAL 634 553 -€81m -12.8%
Note: see definition slide 41.
322012 Full-Year Results / March 7, 2013
Analysis of non-recurring/non-operating items in 2012
Total
Lagardère Lagardère Lagardère Lagardère Lagardère Other Total
(€m) Publishing Active Services Unlimited Media activities Lagardère
Restructuring costs (3) (28) (7) (2) (40) - (40)
Gains/(losses) on disposals 3 (4) (3) 1 (3) - (3)
Impairment losses on
goodwill, tangible and (6) (34) (6) (49) (95) (43) (138)
intangible fixed assets
Amortisation of acquisition-
related intangible assets
(1) (3) (15) (16) (35) - (35)
and acquisition-related
expenses
TOTAL (7) (69) (31) (66) (173) (43) (216)
332012 Full-Year Results / March 7, 2013
Main associates
Balance Sheet Income Statement
2011 2012 2011 2012
(€m)
EADS (7.39%)* 277 - 79 89
Canal+ France (20%) 1,197 1,154 (310) (43)
Marie Claire (42%) 125 125 6 5
Amaury (25%) 99 98 7 1
Other associates 73 74 20 9
TOTAL 1,771 1,451 (198) 61
*Reclassified in held-for-sale assets.
342012 Full-Year Results / March 7, 2013
Cash flow statement data – Lagardère Publishing
(€m) 2011 2012
Cash flow from operations before interest, taxes 228 217
Changes in working capital (42) (21)
Cash flow from operations 186 196
Interest paid & received, income taxes paid (56) (50)
Cash generated by/(used in) operating activities 130 146
Acquisition of property, plant & equipment and intangible assets (29) (43)
Disposal of property, plant & equipment and intangible assets - 11
Free cash flow 101 114
Acquisition of financial assets (16) (6)
Disposal of financial assets (5) 1
(Increase)/decrease in short-term investments - -
Net cash from operating & investing activities 80 109
352012 Full-Year Results / March 7, 2013
Cash flow statement data – Lagardère Active
(€m) 2011 2012
Cash flow from operations before interest, taxes 123 67
Changes in working capital (69) 6
Cash flow from operations 54 73
Interest paid & received, income taxes paid (75) (57)
Cash generated by/(used in) operating activities (21) 16
Acquisition of property, plant & equipment and intangible assets (15) (10)
Disposal of property, plant & equipment and intangible assets 2 -
Free cash flow (34) 6
Acquisition of financial assets (18) (91)
Disposal of financial assets 814 60
(Increase)/decrease in short-term investments - -
Net cash from operating & investing activities 762 (25)
362012 Full-Year Results / March 7, 2013
Cash flow statement data – Lagardère Services
(€m) 2011 2012
Cash flow from operations before interest, taxes 153 156
Changes in working capital (37) (29)
Cash flow from operations 116 127
Interest paid & received, income taxes paid (30) (31)
Cash generated by/(used in) operating activities 86 96
Acquisition of property, plant & equipment and intangible assets (80) (99)
Disposal of property, plant & equipment and intangible assets 19 8
Free cash flow 25 5
Acquisition of financial assets (26) (248)
Disposal of financial assets - 3
(Increase)/decrease in short-term investments 21 28
Net cash from operating & investing activities 20 (212)
372012 Full-Year Results / March 7, 2013
Cash flow statement data – Lagardère Unlimited
(€m) 2011 2012
Cash flow from operations before interest, taxes 103 101
Changes in working capital (17) 20
Cash flow from operations 86 121
Interest paid & received, income taxes paid (30) (19)
Cash generated by/(used in) operating activities 56 102
Acquisition of property, plant & equipment and intangible assets (113) (108)
Disposal of property, plant & equipment and intangible assets 5 1
Free cash flow (52) (5)
Acquisition of financial assets (38) (38)
Disposal of financial assets 5 -
(Increase)/decrease in short-term investments - -
Net cash from operating & investing activities (85) (43)
382012 Full-Year Results / March 7, 2013
Off balance sheet commitments
(€m) 2011 2012
Commitments to purchase shares from third parties
25 -
(other than minority interests)
Commitments given in connection with ordinary activities:
- contract guarantees and performance bonds 102 156
- guarantees in favour of third parties or
44 34
non-consolidated companies
- other commitments given 4 6
Commitments received:
- counter-guarantees of commitments given 44 34
- other commitments received 24 79
Mortgages and pledges - -
392012 Full-Year Results / March 7, 2013
Lagardère Unlimited – Guaranteed minimum
At December 2012 entities forming part of Lagardère Unlimited had guaranteed minimum
future payments amounting to €880m under long-term contracts for the sale of TV and
marketing rights. These payments break down as follows by maturity:
Maturity 2013 2014 2015 2016 2017 2018 & Total
beyond
(€m)
Guaranteed minimum
payments under sports
197 146 124 107 67 239 880
rights marketing
contracts
At December 2012 the amounts due under marketing contracts signed by these same entities
with broadcasters and partners amounted to €1,281m, breaking down as follows by maturity:
Maturity 2013 2014 2015 2016 2017 2018 & Total
(€m) beyond
Sports rights marketing
contracts signed with
471 260 239 137 56 118 1,281
broadcasters and
partners
402012 Full-Year Results / March 7, 2013
For the records: definitions of Recurring Media
EBIT, EBITDA, Like-for-like net sales and Free cash flow
Recurring Media EBIT before associates is defined as the difference between earnings before
interest and tax and the following items of the profit and loss statement:
• contribution of associates;
• gains or losses on disposals of assets;
• impairment losses on goodwill, property, plant and equipment and intangible assets;
• restructuring costs;
• items related to business combinations:
‒ expenses on acquisitions;
‒ gains and losses resulting from acquisition price adjustments;
‒ amortisation of acquisition-related intangible assets.
EBITDA is defined as: Earnings before interest and tax + Depreciation and amortisation +
Impairment losses on goodwill, property, plant and equipment and intangible fixed assets -
Positive contribution (+ Negative contribution) of associates + Dividends received from
associates.
Like-for-like net sales were calculated by adjusting:
• 2012 net sales to exclude companies consolidated for the first time during the year, and 2011 net sales
to include companies divested in 2012;
• 2012 and 2011 nets sales based on 2012 exchange rates.
Free cash flow is defined as: Net cash generated by operating and investing activities, excluding
acquisitions/disposals of financial assets and short-term investments.
41Significant events
42Significant events
432012 Full-Year Results / March 7, 2013
Overall performance
Net sales up by +1.9% at €2,077m.
• Positive contribution from foreign exchange effect (especially the US dollar and
the pound sterling).
Operational cash flow at +€146m, +€109m after net investment.
442012 Full-Year Results / March 7, 2013
France
Net sales up by +0.5%
• Slight dip in Education (-3.8%) due to the end of the
renewal of school curricula, which had contributed
significantly to net sales and earnings in 2010 and 2011.
• General fiction and non-fiction buoyed in particular by the
success of J.K. Rowling and E L James’ novels.
• Illustrated Books up by +0.9%.
452012 Full-Year Results / March 7, 2013
International market
In the United States, sales decline by -3.4% but volume
grows by +1.2% as e-books capture increasing share of the
market, improving margins.
In the United Kingdom, sales decline by -1.9% for same
reasons despite big holiday season front list (J.K. Rowling,
I. Rankin, K. Mosse, M. Binchy).
• Commonwealth markets, especially Australia, soften.
In Spain, the financial crisis negatively affects government
textbook procurement as well as consumer spending.
462012 Full-Year Results / March 7, 2013
Digital activities
Share of revenue generated by e-books now stands at 7.7% worldwide,
23% and 15% of net sales respectively in the United States and the United
Kingdom (21% of Adult trade* net sales in the UK).
• Growth in the US still double-digit but slowing (+15%).
• Growth in the UK still very strong (x2).
• Digital in France still very low (Significant events
482012 Full-Year Results / March 7, 2013
Magazines in France
In 2012, on the magazine market, Lagardère Active confirmed its leaderships on both
circulation and advertising.
Advertising
In a depressed environment, the print advertising revenue declined by -8% in 2012. However, most
of the Lagardère Active magazines such as Elle, Elle Décoration, Télé 7 Jours or Parents stayed
strong leaders on their competitive sets .
Circulation
Overall, the circulation revenue is down by -7%. The subscription revenue partially offset the
newsstand decline. However, most of the magazines won market shares on their competitive
sets.
Significant events:
• launch of an e-commerce business on Be website in October;
• the same month, Be changed its frequency from weekly to monthly, with promising achievements
in both circulation and advertising;
• our shares in TV Magazine were sold to Socpresse;
• development of licensing of the international publishing business with the launch of
Elle Decoration in the Philippines;
• new distribution partnership between Version Femina and Le Républicain Lorrain.
492012 Full-Year Results / March 7, 2013 Radio Europe 1 • Europe 1 radio: Europe 1 has improved its audience share on its main commercial target: 6.3% (+0.3%) on listeners aged 25 to 59 on a year on year basis1. 2012’s turning point was the appointment of Fabien Namias as Editor-in-chief. He has focused on bringing more stability to the programs and strengthening the news output through exclusive events and a sharper editorial line. The strategy is to develop core audience loyalty. The November 2012 figures confirmed the solid audience basis. • Europe1.fr: very good performance throughout 2012 The website has reached more than 2.4 million unique visitors each month2, throughout 2012. Europe 1 was also the most podcasted of all French radios, with a monthly average of more than 5.3 million podcasts3, and was the only French radio to exceed 6 million podcasts. RFM • No.2 adult-music radio station on the 35-49 year olds target with 2.8% audience share1, RFM remains the radio with the longest listenership time (1h39min). Virgin Radio • Virgin Radio focused on pop music since summer 2012, and achieved on its target (25-34 year olds) on a year on year basis an additional +0.4 audience share, +10% average audience and +10 minutes of listenership time1. International radios • 2012 saw mixed performances from one country to another: advertising growth in Poland, Slovakia and Germany mitigated by decrease in Czech Republic and Romania. A slowdown in SMS activity in Poland was noted throughout the year. • In all countries in which it operates, last surveys show that Lagardère Active Radio International (LARI) was able to strengthen the audience share of its radios compared to last year. 1Source: Médiamétrie; November-December 2012. / 2Source: Médiamétrie; Nielsen NetRatings. / 3Source: Médiamétrie eStat; Catch-Up Radio; December 2012; France. 50
2012 Full-Year Results / March 7, 2013
Television
TV channels were still very dynamic in 2012, especially in Russia where TiJi
and Gulli doubled their turnover in 2012.
• Free TV channels / Gulli: in 2012, the revenues have been stable versus 2011 partly
because of increased competition in Digital Terrestrial Television (DTT) French market.
D8 is now run by Groupe Canal+ and six new DTT channels have been launched in
December.
• With Gulli, TiJi and Canal J, the Lagardère group has strengthened its TV leadership
over the kids market and represents the first TV offer for children in France.
• Pay TV channels:
‒ the division has reached an agreement with Groupe Canal+ in renewing the key
distribution contract of all its Pay TV channels (Canal J, TiJi, MCM, June, Mezzo,
Mezzo HD) until June 2016, at the current financial conditions;
‒ in addition, the contract with Numericable, the French cable operator, was also
renewed for three more years.
• Digital and merchandising revenues: in 2012, the division has continued to develop
the licensing business. Replay TV consumption rose highly in 2012 and Gulli.fr is the
leader website for children in France. The opening of a second Gulli Parc is planned in
Q2 2013.
512012 Full-Year Results / March 7, 2013
TV Production and Distribution
Lagardère Entertainment stabilised its turnover in 2012, after a strong increase in 2011.
Television market in France:
• in 2012, further rise in the number of hours spent watching TV which was up by three additional
minutes compared to 2011 and amounted to 3 hours 50 minutes 1;
• in December 2012, launch of six new DTT channels offering new growth perspectives at the
expense mainly of historical channels;
• negative trends in advertising spend impact the program budgets and production investments of
historical channels.
Lagardère Entertainment’s performances:
• in 2012, Lagardère Entertainment enjoyed the resounding success of short format series
Nos chers voisins on TF1;
• Atlantique Productions, a subsidiary 100% owned by Lagardère Entertainment, has benefited
from a strong increase of its activity with the delivery of the international series Transporter,
broadcast in France on M6, as well as the delivery of the first 6 episodes of Borgia season 2 for
Canal+ and the first 4 episodes of Jo, a crime series for TF1;
• Lagardère Entertainment’s other series continue to attract good viewing figures, particularly
Joséphine, ange gardien, Clem, Boulevard du Palais and Famille d’accueil;
• strong development of immediate broadcast activities for DTT channels, due to the recent
acquisition of production companies;
• the program C dans l’air, broadcast daily on France 5, continues to attract good audience
figures.
1Source: Médiamétrie. 522012 Full-Year Results / March 7, 2013
Digital
Lagardère Active is the leading media group in France on the web and mobile phones with
20 million unique visitors1, and consolidated its digital position in 2012.
Lagardère Active expanded its model through other types of audience monetisation:
• by acquiring LeGuide.com in July 2012, which operates the No.1 price comparison business in
Europe and generates revenues on a cost-per-click (CPC) basis. LeGuide.com operates in
14 European countries and references 155 million offers from 78,000 online retailers;
• with the launch of La Place Media in September 2012, by Lagardère Publicité in association with
Amaury Médias, FigaroMedias, and TF1 Publicité. La Place Media markets, on an exclusive basis,
through real time bidding, the qualified digital audience of 80 media sites;
• by acquiring BilletReduc.com in December, an online ticketing service for events and the French
market leader in reduced price ticket reservations with more than 2.2 million tickets sold in 2012.
Lagardère Active also strengthened its position around its media sites, including in the
most dynamic video and mobile segments.
• Doctissimo.fr, the leading French women’s site with 8,5 million unique visitors, pursued its video
development with Doctissimo Play, a new well-being and health channel on YouTube.
• Elle.fr, with 2.6 million unique visitors, innovated in 2012 by launching DailyElle: the first media site
in France launched with web responsive design technology, which automatically adapts the site to
users’ screens (web, mobile, tablet).
• Since September 2012, Europe 1 broadcast live more than seven hours of programs in video.
• Public.fr, which was launched in 2011, ranked market leader in its segment on the web (3.3 million
unique visitors) and on mobile (0.8 million unique visitors).
• With 1.8 million unique visitors in December 2012, the TV program application Télé 7 is the
No.1 TV application in the OJD ranking of mobile applications.
1Source: Médiamétrie, Netratings; connection from all places; December 2012 if not otherwise stated. 532012 Full-Year Results / March 7, 2013
Lagardère Active Enterprises
Development of the international licensing business with new
license contracts in 2012:
• Middle East (1st half of 2012) with Landmark (ready-to-wear for women, men and
accessories);
• India with Arvind (ready-to-wear for women) since April;
• launch of an Elle cosmetics line at Kohl’s in the United States (April) as well as Elle Girl
lines in Asia, and at Sephora in China;
• opening of a second Elle Café (Vietnam);
• launch of the new Elle Outdoor brand in South Korea;
• launch of the Nissan Micra Elle in Europe.
End of December 2012, revenues (mainly from Elle licensing) have increased
by +11% vs. end of December 2011.
54Significant events
552012 Full-Year Results / March 7, 2013
Background
Continued rise in passenger traffic worldwide (+4.2%)*, despite a gradual
slowdown in the second half of the year, and the decline of the intra-European
traffic in the last quarter.
Despite a sustained decline in the print media markets and the effects of the
economic crisis, consolidated net sales at the end of December 2012 grew by
+2.2% at constant rates and on a like-for-like basis:
• +8.2% for LS travel retail;
• -4.5% for LS distribution.
In this difficult environment, project momentum remained strong and the year
was marked by:
• the finalization of several acquisitions including the duty free activities in the Rome
airports, DFS Wellington in the Pacific region (a company operating duty free stores and
a website), and Fashion activities in Geneva;
• dynamic organic growth and continued efforts to modernize and diversify sales outlets:
opening of terminal S4 and of the terminals AC link in Paris, a new Fashion concession
in Xi’an (China), gain of Specialty outlets in Malaysia, Food Services concession in the
Frankfurt train station, Boutiques du Quotidien convenience outlets for the SNCF,
Specialty and Food Services outlets in Dallas, Los Angeles and Chicago airports,
renewal of the Eiffel Tower souvenirs concession in Paris…
*Source: ACI data at October 31, 2012. 562012 Full-Year Results / March 7, 2013
Travel Retail in France
Aelia
• 100% managed net sales up by +20.2% attributable to:
‒ an increase of +21.8% at Paris airports thanks to the Fashion activities takeover, the
modernisation of stores (Roissy A/C and S4 terminals refits) and dynamic commercial
initiatives;
‒ sales in the regions outside Paris up by +19.6%, driven by Marseille, Nice and
Bordeaux airports, and Eurotunnel;
‒ the opening of the duty free business of La Réunion;
‒ and in-flight retail sales continuing to perform well despite the impact of strikes in Spain.
Relay
• Net sales (excluding the impact of Relay@ADP) grew by +1.3% attributable to:
‒ commercial initiatives and the transformation of the network, which brought in
+1.0 point: strong growth in food & beverage (+9.4%) and tobacco (+2.0%) have offset
the continued downtrend in print media (press: -5.3% and books: -9.6%);
‒ growth of the network with non-constant sales bringing in +0.3 point through the
opening of new concepts (Hubiz or Trib’s) and the gain of several tenders (hospital
cafeterias, airports, railways, etc).
• The company secured the renewal of the Eiffel Tower concession and the Relay@ADP
joint venture went through a heavy modernisation programme.
• The network reached 866 sales outlets at the end of 2012, in line with 2011.
572012 Full-Year Results / March 7, 2013
Travel Retail in Europe
Italy (Rome airports)
• Smooth take-over process since October 1, first results are in line with expectations.
United Kingdom
• Growth in business of +10.7% attributable to the opening of four additional sales outlets and
winning the Duty Free concession at London City airport in May 2011.
• 15 sales outlets at the end of 2012 versus 11 at the end of 2011.
Germany
• Increase in activity of +8.8% driven by the network development. The opening of the Berlin
international airport (Willy Brandt), initially scheduled for June, is now pushed back to end of
2014.
• Strong development in the Food Services segment with the gain of the Frankfurt train
station Food Services concession (opening scheduled in 2013, full-year net sales estimated
at €8m) and the acquisition of the travel activities of the Coffee Fellows coffee chain (to be
taken over in 2013).
• The network consists in 91 sales outlets end of year.
Poland
• Sustained growth (+14.8%):
‒ very strong performance of the Duty Free business: +29.2% (increase of market share
and impact of UEFA Euro 2012™);
‒ growth of the Travel Essentials: +10.8% (1 Minute, Hubiz and Virgin; +36 sales outlets)
and Food Services networks (Empik Café: +21%; +13 sales outlets compared to 2011).
582012 Full-Year Results / March 7, 2013
Travel Retail in Europe
Czech Republic
• Strong sales increase (+32.8%) following the past 12 months acquisitions (+50 sales
outlets) and stores modernisation despite the traffic decline in Prague: -8% vs. 2011.
• The growth is driven by the Duty Free (+82%) and Food Services segments (+95%) while
through product and concept diversification, the Travel Essentials network increases by
+4% despite a difficult economic environment.
Romania and Bulgaria
• Romania: net sales up +16% with a network of 198 sales outlets (+13 sales outlets
compared to December 31, 2011).
• Bulgaria: business grew by +22.5% with a network of 80 sales outlets (+20 sales outlets
compared to December 31, 2011).
Travel Retail in North America
Retail activities in Canada and the United States are almost flat at -0.3%
excluding the 53rd accounting week in 2011, and decreased by -2.2% on a reported basis:
‒ good performance recorded in airports despite the decline of print media products, heavy
construction programs in key airports and Sandy hurricane in the fourth quarter...
‒ drop in sales in tourist areas and downtown, affected by difficult economic conditions and
the drop in print media products.
• Openings of new sales outlets contributed +1.5 point (Boston, Edmonton, Montego Bay and
success of the iStore concept).
592012 Full-Year Results / March 7, 2013
Travel Retail in Asia-Pacific
Pacific
• 2012 has been affected by tight economic conditions and a more difficult competitive
environment: the Australian dollar remained high affecting tourism-related activities,
the significant drop in book sales continued, and a new and more restrictive tobacco policy has
entered in force in September 2012.
• Despite this difficult environment, net sales continued to expand by +8.9%:
‒ acquisition of 11 sales outlets in New Zealand in April 2011;
‒ Duty Free activity in New Caledonia (began in January 2011) grew considerably in 2012
(+23%);
‒ acquisition of DFS Wellington (+15 duty free stores in New Zealand and in Australia
including an online activity) in July 2012.
• The network comprises 136 sales outlets (+22 compared to 2011).
Asia
• Net sales picked up a strong +32.2% thanks to the development of the business in
Singapore (Fashion and Confectionary) and good performance of the railway network in
China.
• LS travel retail is present in Singapore, China, Hong Kong, Taiwan and Malaysia with a total
network of 93 sales outlets (-16 vs. 2011), following the closure of unprofitable stores in
China.
• Entry into Malaysia where LS travel retail opened two stores (Longchamp & Billabong-
Lonely Planet) at the terminal 1 of Kuala Lumpur International Airport (KLIA). Activities will be
extended in 2013 following the gain of the General Merchandise concession at KLIA2.
602012 Full-Year Results / March 7, 2013
Distribution activities
Belgium
• Integrated Retail activities declined by -0.5% as a result of streamlining the network. On a
like-for-like network basis, net sales remain flat.
• Distribution activity declined by -6.9%, including -7.8% in press.
Spain
• Business in Spain eroded by -8.8% in a very difficult economic environment (publishers and
airlines bankruptcies, high unemployment rate...): Retail activities fell by -8,5% and
Distribution activities declined by -9%.
• Acquisition of Celeritas, an e-logistics company, on August 31.
Switzerland
• The high level of the Swiss franc had a very noticeable impact on all activities in Switzerland:
‒ Retail activity grew by +1.4%, thanks to the acquisition of Airport Fashion;
‒ Distribution activity declined by -6.1% with a -8.8% drop in press sales.
• Acquisition of Airport Fashion, a company operating two fashion boutiques in the Geneva
airport; takeover on March 1, 2012.
• The process of the book distribution disposal has been completed, OLF is deconsolidated since
October 1.
Hungary
• Integrated Retail activity grew by +5.5%.
• Distribution activity was stable at +0.2% (managed net sales).
612012 Full-Year Results / March 7, 2013
Distribution activities
North America
• 2012 was marked by the continued rapid decline in press sales, which impacted both Curtis
(-12%) and LS distribution North America (-11%).
• The success of Diversification activities – particularly Euro-Excellence (company importing
and distributing fine European food products acquired in July 2011) – helped to partially
offset the decline in press sales (growth of +14.6 points).
62Significant events
632012 Full-Year Results / March 7, 2013
Media rights
World Sport Group
• Successfully relaunched the UAFA Arab Cup – last edition was in 2002 – organised in
Saudi Arabia in July 2012.
• Was appointed to distribute media and marketing rights of the Gulf Cup organised in
January 2013.
• Renewed its international media rights distribution contract with the Japan football
league (J. League).
• Continued to sell media and marketing rights of the 2013-2016 Asian Football
Confederation.
Sportfive
• Significantly increased its revenues from the sale of UEFA Euro 2012™ rights across
49 Asian countries, compared with the 2008 event.
• Managed the marketing and media rights of the Orange AFCON 2012, played in
Gabon and Equatorial Guinea in January and February 2012, as well as the Orange
AFCON 2013 played in South Africa in January and February 2013.
IEC in Sports
• Was appointed to distribute the international rights for the Swiss Football League.
642012 Full-Year Results / March 7, 2013
Marketing rights
Sportfive
• Enlarged its portfolio of exclusive commercial relationships with German (FC Carl Zeiss
Jena, VfR Aalen) and French football clubs (OGC Nice).
• Signed an exclusive agreement with FC Utrecht, setting foot in the Netherlands.
• Was appointed to be the exclusive agency for the marketing of rights for the BMW
Open tennis tournament in Munich (ATP 250) from 2013 to 2015.
• Diversified its activity by becoming exclusive partner of Michel Desjoyaux (sailing).
• Launched an online ticket reservation platform with hospitality services for the German
football leagues (www.official-vip.com).
• Extended its hospitality offer in France: Gucci Masters, Formula 1, Champions League
Final, Opéra de Paris, etc.).
• Acquired 90% of Zaechel, a German-based travel and hospitality agency.
World Sport Group
• Acquired 100% of SMAM (Sports Marketing and Management), an Australian-based
sports marketing agency, specialised in Olympic Sports.
652012 Full-Year Results / March 7, 2013
Talent representation
Lagardère Unlimited US
• Acquired 80% of Gaylord Sports Management, an Arizona-based talent management
company, specialised in golf (notably Phil Mickelson) and baseball.
Management and operations of stadiums and arenas
World Sport Group
• Continued its consultancy role for the Singapore Sports Hub, including the sale of
marketing rights, part of its long term partnership (25 years).
Lagardère Unlimited Stadium Solutions
• Reinforced its international footprint by signing consultancy contracts in Russia and
India.
• Won a consultancy contract for the 2014 World Equestrian Games.
662012 Full-Year Results / March 7, 2013
Organisation and management of events
Upsolut
• Created Upsolut Oceania to expand activities.
• Organised two additional stages of the 2012 ITU World Triathlon Series: San Diego
on May 10-12, and Stockholm on August 25-26.
• Was appointed by ITU* to organise additional stage of the 2013 ITU World Triathlon
Series: Auckland on April 6-7.
IEC in Sports
• Developed, organised and distributed the Swix Ski Classics Tour, an European tour
of cross country skiing events.
Lagardère Unlimited Live Entertainment
• Premiered Salut les copains at the Folies Bergère in Paris on October 18.
• Expanded internationally Mozart, l’opéra rock, with 70 shows in South Korea.
*International Triathlon Union. 67You can also read
