2012 Full-Year Results

Transcription

1 2012 Full-Year Results March 7, 2013

2 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

3 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

4 Key performance figures 4

5 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 Consolidation in Lagardere Active accounts as of December 31, 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,

6 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, 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,

7 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 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

8 Group net sales 2012 Net sales 7,657m 7,370m Like-for-like 2011 net sales* 7,254m -0.2% like-for-like 7,239m Like-for-like 2012 net sales* 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

9 Key figures Group ( m) Change Net sales 7,657 7, % Media Recurring EBIT before associates* m Net income Group share (707) m Adjusted net income Group share m Cash from operating activities m Net debt (end of year) 1,269 1, m Earnings per share (in ) (5.56) 0.70 Dividend per share (in ) ** *See definition slide 41. **For 2012, dividend that will be recommended at the General Shareholders Meeting on May 3,

10 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 Performance 2012 Reported Ebit PMI and Russian radio sold Provision IOC: - 22m LeGuide.com: 5m Foreign Exchange: 7m 10

11 Performance by division 11

12 Lagardère Publishing: activity 2012 net sales by geographical area Other 17% 17%* Spain 8% 9%* USA & Canada 23% 23%* France 32% 33%* UK & Australia 20% 18%* Reference 4% 4%* 2012 net sales by activity 22%* Other 23% General Literature 40% 39%* Education 18% 20%* Illustrated Books 15% 15%* 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

13 Lagardère Publishing: focus on e-book Continued growth in digital books, which now make up 8% of net sales vs. 6% in 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 50% 40% 30% 20% 10% United States 21% 8% 3% 1% 23% 50% 40% 30% 20% 10% United Kingdom* 23% 10% 1% 50% 40% 30% 20% 10% France** 1.8% % of total sales 2% 0.7% 0.1% 6% 8% 0% % % *Adult trade. / **General Literature. 13

14 Lagardère Publishing: profitability ( m) Change Net sales (a) 2,038 2, % Recurring EBIT before associates (b) m Operating margin (b)/(a) 10.8% 10.7% -0.1 pt Income from associates Non-recurring/non-operating items (9) (7) - EBIT m 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. 14

15 Lagardère Active: activity 2012 net sales by geographical area International 12% 34%* 18%* 2012 net sales by activity Radio 20% France 88% 66%* Television 23% 16%* Press & other 57% 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

16 Lagardère Active: profitability ( m) Pro forma* 2012 Change vs Pro forma Net sales (a) 1,441 1,028 1, % Recurring EBIT before associates (b) m Operating margin (b)/(a) 6.6% 4.5% 6.4% +1.9 pts Income from associates Non-recurring/non-operating items (21) (21) (69) - EBIT m 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). 16

17 Lagardère Services: activity 2012 net sales by geographical area 2012 net sales by activity USA & Canada 6% 6%* Eastern Europe 20% 18%* Spain 10% 12%* Switzerland 11% 12%* Belgium 12% 13%* Asia & Australia 8% 6%* Other 5% 4%* France 28% 29%* 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 / **Source: ACI data at October 31, % 47%* Wholesale Distribution 26% 28%* Integrated Retail 18% 19%* 56% 53%* 17

18 Lagardère Services: profitability ( m) Change Net sales (a) 3,724 3, % Recurring EBIT before associates (b) m Operating margin (b)/(a) 2.8% 2.7% -0.1 pt Income from associates Non-recurring/non-operating items (28) (31) - EBIT m 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). 18

19 Lagardère Unlimited: activity 2012 net sales by geographical area 2012 net sales by activity Rest of World 20% 16%* Germany 25% 21%* Other 17% 16%* Media rights 40% 24%* Asia 21% Rest of Europe 16% 22%* UK 7% 6%* France 11% 11%*. Marketing rights 43% 38%* 46%* 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 / **Africa Cup of Nations. / ***Asian Football Cup. / ****Union of Arab Football Associations. 19

20 Lagardère Unlimited: profitability ( m) Change Net sales (a) % Recurring EBIT before associates (b) (6) (33) - 27m Operating margin (b)/(a) Income from associates 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 / **International Olympic Committee. 20

21 Group financial results 21

22 Consolidated income statement (1/2) ( m) Lagardère Media Other activities* Total Lagardère Media Other activities* Net sales 7,657-7,657 7,370-7,370 Recurring EBIT before associates** Total 414 (12) (19) 339 Income from associates*** 33 79**** **** 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, tangible & intangible fixed assets (585) (310) (895) (95) (43) (138) Amortisation of acquisition-related intangible assets and other acquisition-related expenses (84) - (84) (35) - (35) EBIT (245) (244) (489) *Non-media, Canal+ France and EADS. / **See definition slide 41. / ***Before impairment loss. / ****EADS contribution. 22

23 Consolidated income statement (2/2) ( m) Lagardère Media Other activities* Total Lagardère Media Other activities* EBIT (245) (244) (489) 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) Attributable to minority interests (18) - (18) (17) - (17) Net income Group share (457) (250) (707) Total *Non-media, Canal+ France and EADS. 23

24 Adjusted net income Group share ( m) 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* Impairment losses on goodwill, tangible and intangible fixed assets* Restructuring costs* Gains (losses) on disposals* 10 5 Adjusted net income excluding EADS** Adjusted earnings per share excluding EADS (in ) *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. 24

25 Consolidated statement of cash flows ( m) Cash flow from operations before interest, taxes Changes in working capital (170) (21) Cash flow from operations Interest paid & received, income taxes paid (170) (140) Cash generated by/(used in) operating activities Acquisition of property, plant & equipment and intangible assets (253) (264) Disposal of property, plant & equipment and intangible assets Free cash flow Acquisition of financial assets (99) (384) Disposal of financial assets (Increase)/decrease in short-term investments Net cash from operating & investing activities 766 (144) 25

26 Change in net debt in m 64m 31m 1,700m 144m 1,269m Net debt as of 31/12/2011 Net cash from operating & investing activities Dividends paid Acquisition of minority interests FX, scope and other items Net debt as of 31/12/

27 Consolidated balance sheet ( m) Non-current assets (excl. investments in associates) 3,626 3,922 Investments in associates 1,771 1,451 EADS Other associates 1,494 1,451 Current assets (other than short-term investments and cash) 2,781 2,847 Short-term investments and cash Held-for-sale assets TOTAL ASSETS 8,928 9,360 Stockholders equity 3,024 2,991 Non-current liabilities (excl. debt) Non-current debt 1,843 2,165 Current liabilities (excl. debt) 3,345 3,296 Current debt Held-for-sale liabilities - - TOTAL LIABILITIES AND EQUITY 8,928 9,360 27

28 Full-Year Results / March 7, 2013 Sound financial position 2012 Gearing* is 57% in 2012 vs. 42% in Successful issue in October of a five-year maturity bond totalling 500 million. Gross debt breakdown: well-balanced funding sources 28% 7% 65% Bonds Bank loan Other 1,700m 1,678m Preservation of liquidity and balanced debt repayment schedule Net debt/ EBITDA** 1,269m 2,0x 3,1x Authorized credit lines****: 975 Treasury***: Cash available & beyond *Net debt-to equity ratio. **See definition slide 41. ***Short-term investments and cash. ****Group credit facility excluding authorized credit lines at divisions level.

29 Appendices 29

30 Group profile 2012 Net sales by division Recurring EBIT by division Lagardère Unlimited 6% Lagardère Publishing 28% Lagardère Services 27% Lagardère Services 52% Lagardère Publishing 57% Lagardère Active 14% Lagardère Active 16% Note: Recurring EBIT/Lagardère Unlimited: - 33m. Net sales by geographic area 2011 USA & Canada 11% Eastern Europe 12% France 36% Net sales by geographic area 2012 Eastern Europe 12% USA & Canada 10% France 36% Asia- Pacific 7% Other 2% Emerging countries: 21% Western Europe 32% Asia- Pacific 7% Other 3% Emerging countries: 22% Western Europe 32% 30

31 Recap of Media performance by division Net sales ( m) 2012 net sales m change Change vs 2011 Lagardère Publishing 2, m +1.9% Lagardère Active 1, m -29.6% Lagardère Services 3, m +2.3% Lagardère Unlimited m +3.5% Total Media 7, m -3.7% Recurring Media EBIT before associates ( m) 2012 EBIT m change Change vs 2011 Lagardère Publishing m +0.8% Lagardère Active 64-31m -32.1% Lagardère Services 104-1m -1.1% Lagardère Unlimited (33) - 27m - Total Media m -13,6% 31

32 EBITDA ( m) m change Change vs 2011 Lagardère Publishing m +2.2% Lagardère Active m -62,6% Lagardère Services m +8.4% Lagardère Unlimited m -21.9% Total Media m -14.4% Other activities m % TOTAL m -12.8% Note: see definition slide

33 Analysis of non-recurring/non-operating items in 2012 ( m) Lagardère Publishing Lagardère Active Lagardère Services Lagardère Unlimited Total Lagardère Media Other activities Total 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 intangible fixed assets Amortisation of acquisitionrelated intangible assets and acquisition-related expenses (6) (34) (6) (49) (95) (43) (138) (1) (3) (15) (16) (35) - (35) TOTAL (7) (69) (31) (66) (173) (43) (216) 33

34 Main associates Balance Sheet Income Statement ( m) EADS (7.39%)* Canal+ France (20%) 1,197 1,154 (310) (43) Marie Claire (42%) Amaury (25%) Other associates TOTAL 1,771 1,451 (198) 61 *Reclassified in held-for-sale assets. 34

35 Cash flow statement data Lagardère Publishing ( m) Cash flow from operations before interest, taxes Changes in working capital (42) (21) Cash flow from operations Interest paid & received, income taxes paid (56) (50) Cash generated by/(used in) operating activities Acquisition of property, plant & equipment and intangible assets (29) (43) Disposal of property, plant & equipment and intangible assets - 11 Free cash flow Acquisition of financial assets (16) (6) Disposal of financial assets (5) 1 (Increase)/decrease in short-term investments - - Net cash from operating & investing activities

36 Cash flow statement data Lagardère Active ( m) Cash flow from operations before interest, taxes Changes in working capital (69) 6 Cash flow from operations 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 (Increase)/decrease in short-term investments - - Net cash from operating & investing activities 762 (25) 36

37 Cash flow statement data Lagardère Services ( m) Cash flow from operations before interest, taxes Changes in working capital (37) (29) Cash flow from operations Interest paid & received, income taxes paid (30) (31) Cash generated by/(used in) operating activities 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 Net cash from operating & investing activities 20 (212) 37

38 Cash flow statement data Lagardère Unlimited ( m) Cash flow from operations before interest, taxes Changes in working capital (17) 20 Cash flow from operations Interest paid & received, income taxes paid (30) (19) Cash generated by/(used in) operating activities 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) 38

39 Off balance sheet commitments ( m) Commitments to purchase shares from third parties (other than minority interests) 25 - Commitments given in connection with ordinary activities: - contract guarantees and performance bonds guarantees in favour of third parties or non-consolidated companies other commitments given 4 6 Commitments received: - counter-guarantees of commitments given other commitments received Mortgages and pledges

40 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 ( m) & beyond Total Guaranteed minimum payments under sports 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 ( m) & beyond Total Sports rights marketing contracts signed with broadcasters and partners ,281

41 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. 41

42 Significant events 42

43 Significant events 43

44 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. 44

45 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 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%. 45

46 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. 46

47 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 (<2%). Virtually non-existent in Spain. Settlement with the US Department of Justice (DoJ) and European Commission puts anti-trust lawsuits to rest. The agency model is preserved. Other activities Solid growth (+3.1%) in Partworks worldwide. Best sellers in Japan and the United Kingdom. Distribution still delivering solid performance in France. *Books meant for the general public adult. 47

48 Significant events 48

49 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 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. 49

50 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 basis 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 month 2, throughout Europe 1 was also the most podcasted of all French radios, with a monthly average of more than 5.3 million podcasts 3, and was the only French radio to exceed 6 million podcasts. RFM No.2 adult-music radio station on the year olds target with 2.8% audience share 1, 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 time 1. 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. 1 Source: Médiamétrie; November-December / 2 Source: Médiamétrie; Nielsen NetRatings. / 3 Source: Médiamétrie estat; Catch-Up Radio; December 2012; France. 50

51 Television TV channels were still very dynamic in 2012, especially in Russia where TiJi and Gulli doubled their turnover in 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 Q

52 TV Production and Distribution Lagardère Entertainment stabilised its turnover in 2012, after a strong increase in 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. 1 Source: Médiamétrie. 52

53 Digital Lagardère Active is the leading media group in France on the web and mobile phones with 20 million unique visitors 1, and consolidated its digital position in 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 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. 1 Source: Médiamétrie, Netratings; connection from all places; December 2012 if not otherwise stated. 53

54 Lagardère Active Enterprises Development of the international licensing business with new license contracts in 2012: Middle East (1 st 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

55 Significant events 55

56 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,

57 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 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 joint venture went through a heavy modernisation programme. The network reached 866 sales outlets at the end of 2012, in line with

58 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 sales outlets at the end of 2012 versus 11 at the end of 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 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). 58

59 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 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 53 rd 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). 59

60 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 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 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. 60

61 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, 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). 61

62 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 points). 62

63 Significant events 63

64 Media rights World Sport Group Successfully relaunched the UAFA Arab Cup last edition was in 2002 organised in Saudi Arabia in July Was appointed to distribute media and marketing rights of the Gulf Cup organised in January Renewed its international media rights distribution contract with the Japan football league (J. League). Continued to sell media and marketing rights of the 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 IEC in Sports Was appointed to distribute the international rights for the Swiss Football League. 64

65 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 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 ( 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. 65

66 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. 66

67 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 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. 67