2013 Full-Year Results

Transcription

1 2013 Full-Year Results March 12, 2014

2 Disclaimer This document presents the full-year 2013 results from the consolidated financial statements of Lagardère SCA as of December 31, This document does not constitute the Annual Financial Report (Rapport Financier Annuel) within the meaning of article L of the French monetary and financial Code (Code monétaire et financier). Certain statements contained in this document are forward-looking statements (including objectives and trends), which address our vision of the financial condition, results of operations, strategy, expected future business and financial performance of Lagardère SCA. These data do not represent forecasts within the meaning of European Regulation No. 809/2004. When used in this document, words such as anticipate, believe, estimate, expect, may, intend, predict, hope, can, will, should, is designed to, with the intent, potential, plan and other words of similar import 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. Although Lagardère SCA believes that the expectation reflected in such forward-looking statements are reasonable, such statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including without limitations: 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. Accordingly, we caution you against relying on forward-looking statements. The forward-looking statements abovementioned are made as of the date of this document and neither Lagardère SCA nor any of its subsidiaries undertake any obligation to update or review such forward-looking statements whether as a result of new information, future events or otherwise. Consequently neither Lagardère SCA nor any of its subsidiaries are 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 8 Performance by division pages 9 to 18 Group financial results pages 19 to 26 Appendices to consolidated accounts pages 27 to 38 Significant events pages 39 to 64 3

4 Key performance figures 4

5 Changes of scope: main items Lagardère Services In Travel Retail activity, full-year consolidation in 2013 of AdR Retail (operator of duty free/duty paid shops in Rome airports) and Duty Free Stores Wellington (duty free airports in Australia and New Zealand). In 2012, they were consolidated respectively as of October 1 and July 1. Lagardère Active Disposal of 25% interest held in Éditions P. Amaury in May Full-year consolidation of LeGuide group in In 2012, it was integrated as of July 1. Full-year consolidation of BilletRéduc.com in In 2012, only the balancesheet of this entity acquired at year-end was consolitated. EADS Disposal of 7.4% interest holding in EADS group on April 12, Canal+ Disposal of 20% interest holding in Canal+ France on November 05,

6 Group net sales 2013 Net sales 7,370m -2.1% reported 7,216m Like-for-like 2012 net sales* 7,268m -1.3%* like-for-like 7,171m Like-for-like 2013 net sales** The good performance in Book Publishing and Travel Retail operations enabled to partly offset the still-difficult economy in Europe and declining print press markets. *-0.7% excluding end of tobacco sales in Hungary. **At constant perimeter and exchange rates, see definition slide 38. 6

7 Key figures Group ( m) Change Net sales 7,370 7, % Media Recurring EBIT before associates* % Net income Group share 89 1, ,218m Adjusted net income Group share** m Cash flow from operations m Net cash (debt) end of year (1,700) ,061m Earnings per share (in ) Ordinary dividend per share (in ) *** *See definition slide 38. **Excluding the contribution of EADS and non-recurring/non-operating items. ***For 2013, ordinary dividend that will be recommended at the General Shareholders Meeting on May 6, 2014, excluding the interim dividend of 9 paid on May 31,

8 2013 Media Recurring EBIT, slightly above the FY guidance +5.9% + 358m + 21m + 379m - 7m + 372m 2012 Reported Ebit Business Performance 2013 Comparable* Foreign Exchange 2013 Reported Ebit *Calculated using 2012 exchange rates. 8

9 Performance by division 9

10 Lagardère Publishing: activity 2013 net sales by geographical area 2013 net sales by activity Other 18% 17%* Spain 6% 8%* France 32% 32%* Partworks 11% 10%* 17%* Other 16% Education 16% 18%* Illustrated books 15% 15%* US & Canada 25% 23%* UK & Australia 19% 20%* General Literature 42% 40%* 2013 net sales: 2,066m are up (+1.9% like-for-like) thanks to: outstanding performances in General Literature in France (+13.3%), in the US and in the UK and strong increase in Partworks activity on all markets excluding Spain that offset the expected decline in Education in France and Spain. ongoing e-books momentum: digital represents 10.4% of Lagardère Publishing total sales, 30% of Trade sales in the US and 27% of Adult trade sales in the UK. *% of net sales in

11 Lagardère Publishing: focus on e-book Continued growth in digital books, which now make up 10.4% of net sales vs. 7.8% in The digitalisation remains for the time being essentially limited to the US and UK markets: in the US, in a stabilising market, Lagardère Publishing digital sales posted a strong increase in 2013 (+33%) on the back of numerous best sellers; in the UK, where the market is still rising, e-book sales increased by 42% in French and Spanish markets still at an early stage. E-book share as percentage of trade market sales Lagardère Publishing e-book sales 50% United States* 50% United Kingdom** % of total sales 40% 30% 20% 10% 0% 30% 21% 24% 3% 8% % 30% 20% 10% 0% 27% 20% 10% 1% % 8% 6% 2% 0.1% 0.7% *Trade. / **Adult trade. 11

12 Lagardère Publishing: profitability ( m) Change Net sales (a) 2,077 2, % Recurring EBIT before associates (b) Operating margin (b)/(a) 10.7% 10.8% +0.1 pt Income from associates 0 (2) Non-recurring/non-operating items (7) (29) EBIT m 2013 profitability Slight improvement in profitability (+0.1 pt) due to strong General Literature sales based on best-sellers and Partworks dynamic that offset the expected decline in Education. Non-recurring and non-operating items comprise mainly impairment losses on tangible and intangible assets ( 24m). 12

13 Lagardère Services: activity 2013 net sales by geographical area 2013 net sales by activity Eastern Europe 18% 20%* US & Canada 6% 6%* Asia & Australia 8% 8%* Other 7% 5%* Wholesale Distribution 24% 26%* Switzerland 10% 11%* Spain 10% 10%* Belgium 12% 12%* France 29% 28%* 40% 44%* Integrated Retail 16% 18%* 60% 56%* 2013 net sales: 3,745m (-0.9% like-for-like, +0.3% excluding the impact of end of tobacco sales in Hungary). Good performance in Travel Retail fuelled by growth in Duty Free and Food Services, offset by continued decline of printed press products. Improving trends at year s end on both activities. Overall, Travel Retail activities are up (+5% reported, +2.9% like-for-like), especially in Asia (+29.5%), Romania (+7.5%), Czech Republic (+5.6%) and Poland (+4.9%). While Distribution is down (-6% like-for-like, -3.2% excluding the end of tobacco sales in Hungary) despite an improvement at year s end and the success of diversification activities. *% of net sales in

14 Lagardère Services: profitability ( m) Change Net sales (a) 3,809 3, % Recurring EBIT before associates (b) m Operating margin (b)/(a) 2.7% 2.6% -0.1 pt Income from associates 7 8 Non-recurring/non-operating items (31) (62) EBIT m 2013 profitability Good performance in Duty Free and Food Services, in addition to successful diversification as well as savings initiatives in Distribution, are offset by the decline in print products that weighs on profitability. Overall, the recurring EBIT before associates of LS travel retail increases by 3m but decreases by 11m in LS distribution, including a significant one-off item: loss and bad debt provision related to the bankruptcy of a customer (regional wholesale distributor) at Curtis (US). Non-recurring and non-operating items mainly due to impairment of goodwill in Press Wholesale Distribution in Switzerland ( 29m), amortisation of intangible assets ( 14m) and restructuring costs ( 10m). 14

15 Lagardère Active: activity 2013 net sales by geographical area 2013 net sales by activity International 13% 12%* 20%* Radio 21% France 87% 88%* Television 23% 23%* Press & other 56% 57%* 2013 net sales: 996m (-3.8% like-for-like). Decline in magazine circulation (-5.4%) dragged related advertising revenues downwards. Radio demonstrated its defensiveness with a slight upturn in its activity (+0.3%). Overall advertising was down 6.6%. *% of net sales in

16 Lagardère Active: profitability ( m) Change Net sales (a) 1, % Recurring EBIT before associates (b) Operating margin (b)/(a) 6.4% 6.4% = Income from associates 8 2 Non-recurring/non-operating items (69) (375) EBIT 3 (309) - 312m 2013 profitability Profits are stable, with good performances in Radio and TV (Production and Channels) as well as ongoing cost control offsetting the declining trends in magazines. Non-recurring and non-operating items are up, in relation with impairment losses on intangible assets ( 225m) and associates ( 47m), and restructuring costs ( 91m). 16

17 Lagardère Unlimited: activity 2013 net sales by geographical area 2013 net sales by activity Asia & Australia 14% 21%* Rest of World 19% 20%* France 12% 11%* Germany 28% 25%* Other 20% 17%* Media rights 38% 40%* Rest of Europe 16% 16%* UK 11% 7%* Marketing rights 42% 2013 net sales: 409m (-13.6% like-for-like). The decrease is explained by two main negative factors: unfavorable calendar effect mostly at World Sport Group especially with the AFC** contract (no qualifying matches for the Olympic Games), in addition to a negative comparison effect on hospitality activity in Europe (high billing in 2012 due to the Summer Olympics and the Euro 2012); the AFC contract turning into a commission contract (vs. a buy-out previously). This is partially offset by the good performances on German soccer clubs (marketing rights) and on ACN*** media and marketing rights. *% of net sales in / **Asian Football Confederation. / ***Africa Cup of Nations. 43%* 17

18 Lagardère Unlimited: profitability ( m) Change Net sales (a) % Recurring EBIT before associates (b) (33) (11) + 22m Operating margin (b)/(a) - - Income from associates 1 (1) Non-recurring/non-operating items (66) (23) EBIT (98) (35) + 63m 2013 operating profitability Profits are up due mainly to the - 22m provision booked in H for the IOC contract*. Excluding this item, results are stable with a good performance in German soccer clubs and ACN** rights, and a reduced loss in the Media rights trading activity in Europe, which offset the negative calendar effect at World Sport Group. Non-recurring and non-operating items comprise mainly in 2013 restructuring costs ( 14m) and amortisation of intangible assets ( 9m). *International Olympic Committee. / **Africa Cup of Nations. 18

19 Group financial results 19

20 Consolidated income statement (1/2) ( m) Net sales 7,370 7,216 Media recurring EBIT before associates* Recurring EBIT before associates from other activities* (19) (45) Income from associates** 105*** 7 Non-recurring/non-operating items (216) 1,193 Restructuring costs (40) (122) Gains/(losses) on disposals (3) 1,671 Impairment losses (138) (328) Amortisation of acquisition-related intangible assets and other acquisition-related expenses (35) (28) EBIT 228 1,527 *See definition slide 38. / **Before impairment losses. / ***EADS contribution + 89m. 20

21 Consolidated income statement (2/2) ( m) EBIT 228 1,527 Net interest expense (82) (91) Income before tax 146 1,436 Income tax expense (40) (117) Total net income 106 1,319 Attributable to minority interests (17) (12) Net income Group share 89 1,307 21

22 Adjusted net income Group share ( m) Net income attributable to the Group 89 1,307 Equity accounted contribution from EADS (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* 5 (1,624) Tax contribution on dividends paid to shareholders - 40 Exceptional bonus for employees* - 14 Adjusted net income excluding EADS *Net of taxes. 22

23 Consolidated statement of cash flows ( m) Cash flow from operations before interest, taxes Changes in working capital (21) 116 Cash flow from operations Interest paid & received, income taxes paid* (140) (235) Cash generated by/(used in) operating activities Acquisition of property, plant & equipment and intangible assets (264) (296) Disposal of property, plant & equipment and intangible assets 20 8 Free cash flow Acquisition of financial assets (384) (41) Disposal of financial assets 65 3,410 (Increase)/decrease in short-term investments Net cash from operating & investing activities (144) 3,445 *Including in 2013 a 40m payment of tax contribution on dividends. 23

24 Change in net debt in ,445m - 1,339m - 1,700m - 45m + 361m Net debt as of 31/12/2012 Net cash from operating & investing activities Dividends paid Foreign exchange, scope and other items Net cash as of 31/12/

25 Consolidated balance sheet ( m) Dec. 31, 2012 Dec. 31, 2013 Non-current assets (excl. investments in associates) 3,922 3,579 Investments in associates 1, Current assets (other than short-term investments and cash) 2,847 2,817 Short-term investments and cash 703 1,784 Held-for-sale assets TOTAL ASSETS 9,360 8,332 Stockholders equity 2,991 2,927 Non-current liabilities (excl. debt) Non-current debt 2, Current liabilities (excl. debt) 3,296 3,354 Current debt Held-for-sale liabilities - - TOTAL LIABILITIES AND EQUITY 9,360 8,332 25

26 Sound financial position 2013 Strong liquidity. High financial flexibility resulting from the net cash position. Gross debt centered on bond market. 35% in 2012 Gross debt breakdown of funding sources 14% 86% 65% in 2012 Bonds Bank loan et other - 1,700m + 361m + 3,429m Authorised credit lines****: Preservation of liquidity and balanced debt repayment schedule + 1,645m Net debt/ EBITDA** 3,1x 31/12/ /12/2013 Treasury***: + 1,784m + 806m Cash available + 2m + 101m + 494m + 6m + 14m & beyond *Net debt-to equity ratio. **See definition slide 38. ***Short-term investments and cash. ****Group credit facility excluding authorised credit lines at divisions level. 26

27 Appendices to consolidated accounts 27

28 Group profile 2013 Lagardère Active 14% Net sales by division Lagardère Unlimited 6% Lagardère Publishing 28% Recurring EBIT by division Lagardère Active 17% Lagardère Publishing 58% Lagardère Services 52% Lagardère Services 25% Note: Recurring EBIT/Lagardère Unlimited: - 11m. Net sales by geographic area 2012 Net sales by geographic area 2013 Eastern Europe 12% USA & Canada 10% France 36% Eastern Europe 11% USA & Canada 10% France 37% Asia- Pacific 7% Asia- Pacific 7% Other 3% Other 2% Emerging countries: 22% Western Europe 32% Emerging countries: 20% Western Europe 33% 28

29 Recap of Media performance by division Net sales ( m) 2013 net sales Reported m change Reported change Like-for-like change* Lagardère Publishing 2,066-11m -0.5% +1.9% Lagardère Services 3,745-64m -1.7% -0.9%** Lagardère Active m -1.9% -3.8% Lagardère Unlimited m -13.0% -13.6% Total Media 7, m -2.1% -1.3%*** Recurring Media EBIT before associates ( m) 2013 EBIT Reported m change Reported change Change at constant exchange rates Lagardère Publishing % +2.8% Lagardère Services 96-8m -7.3% -6.1% Lagardère Active % -0.3% Lagardère Unlimited (11) + 22m - - Total Media m +4.0% +5.9% *At constant perimeter and exchange rates. / **+0.3% excluding end of tobacco sales in Hungary. / ***-0.7% excluding end of tobacco sales in Hungary. 29

30 Analysis of non-recurring/non-operating items in 2013 ( m) Lagardère Publishing Lagardère Services Lagardère Active Lagardère Unlimited Total Lagardère Media Other activities Total Lagardère Restructuring costs (3) (10) (91) (14) (118) (4) (122) Gains/(losses) on disposals - (4) (11) - (15) 1,686 1,671 Impairment losses (24) (32) (272) - (328) - (328) Amortisation of acquisitionrelated intangible assets and acquisition-related expenses (2) (16) (1) (9) (28) - (28) TOTAL (29) (62) (375) (23) (489) 1,682 1,193 30

31 Main associates Balance Sheet Income Statement ( m) EADS (7.39%) Canal+ France (20%) 1, Marie Claire (42%) Amaury (25%) Other associates Total before impairment losses 1, Impairment losses* (44) (47) TOTAL 61 (40) *In 2013: Marie Claire 35m, O.E.E - Because 12m. In 2012: Canal+ France 43m, other 1m. 31

32 Cash flow statement data Lagardère Publishing ( m) Cash flow from operations before interest, taxes Changes in working capital (21) 38 Cash flow from operations Interest paid & received, income taxes paid (50) (62) Cash generated by/(used in) operating activities Acquisition of property, plant & equipment and intangible assets (43) (41) Disposal of property, plant & equipment and intangible assets 11 - Free cash flow Acquisition of financial assets (6) (5) Disposal of financial assets 1 1 (Increase)/decrease in short-term investments - - Net cash from operating & investing activities

33 Cash flow statement data Lagardère Services ( m) Cash flow from operations before interest, taxes Changes in working capital (29) (35) Cash flow from operations Interest paid & received, income taxes paid (31) (39) Cash generated by/(used in) operating activities Acquisition of property, plant & equipment and intangible assets (99) (125) Disposal of property, plant & equipment and intangible assets 8 2 Free cash flow 5 (38) Acquisition of financial assets (248) (7) Disposal of financial assets 3 2 (Increase)/decrease in short-term investments Net cash from operating & investing activities (212) (14) 33

34 Cash flow statement data Lagardère Active ( m) Cash flow from operations before interest, taxes Changes in working capital 6 27 Cash flow from operations Interest paid & received, income taxes paid (57) (45) Cash generated by/(used in) operating activities Acquisition of property, plant & equipment and intangible assets (10) (16) Disposal of property, plant & equipment and intangible assets - 5 Free cash flow 6 16 Acquisition of financial assets (91) (5) Disposal of financial assets (Increase)/decrease in short-term investments - - Net cash from operating & investing activities (25)

35 Cash flow statement data Lagardère Unlimited ( m) Cash flow from operations before interest, taxes Changes in working capital Cash flow from operations Interest paid & received, income taxes paid (19) (13) Cash generated by/(used in) operating activities Acquisition of property, plant & equipment and intangible assets (108) (109) Disposal of property, plant & equipment and intangible assets 1 - Free cash flow (5) (18) Acquisition of financial assets (38) (20) Disposal of financial assets - 10 (Increase)/decrease in short-term investments - - Net cash from operating & investing activities (43) (28) 35

36 Off balance sheet commitments ( m) Commitments to purchase shares from third parties (other than minority interests) 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 Commitments received: - counter-guarantees of commitments given other commitments received Mortgages and pledges

37 Lagardère Unlimited Guaranteed minimum payments At December 2013 entities forming part of Lagardère Unlimited had guaranteed minimum future payments amounting to 680m 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 2013 the amounts due under marketing contracts signed by these same entities with broadcasters and partners amounted to 1,055m, breaking down as follows by maturity: Maturity ( m) & beyond Total Sports rights marketing contracts signed with broadcasters and partners ,055 1,281 37

38 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 - Gains/(+losses) on disposals + 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: 2013 net sales to exclude companies consolidated for the first time during the year, and 2012 net sales to exclude companies divested in 2013; 2013 and 2012 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. 38

39 Significant events 39

40 Overall performance Substantial increase in net sales (+1.9% like-for-like) and operating profit (+0.3%). Strong performances in core markets Fiction best sellers and new Asterix album in France. Year-end print and digital best sellers in the United Kingdom, including record #1 non fiction. Across the board print and digital performance in the United States. Partworks success worldwide. outweigh the anticipated decline in Education. No change of curriculum in France resulting in a drop in sales. Same situation in Spain. 40

41 France Net sales up by 0.8%. Spectacular performance of the Fifty Shades trilogy (2 million copies sold), and of Inferno. Successful launch of the new Asterix album (Asterix and the Picts), created by a new team (2.3 million copies in French, 24 translations in 15 countries). Slowdown at Education due to the non-renewal of school curricula. Reference and Illustrated imprints holding out in soft markets. Children publishing performance boosted by the Violetta phenomenon. Solid year in Distribution and two new third party clients joining in Profits, flat, still account for about 50% of Hachette Livre s global performance. 41

42 International markets Significant growth in Partworks. Solid resistance in all European markets but Spain. Continued growth in Japan, Russia and English language markets. Sales up 1.5% in the United Kingdom, Australia and New Zealand zone. Massive presence in the christmas best seller lists (6 out of 10 in fiction. Alex Ferguson autobiography, with a record 1.4 millions copies, # 1 in non fiction). Strong performance in Education (curriculum change in Scotland). Solid year in Children and Illustrated. Weak market conditions in Australia and New Zealand. 6% growth in the United States. Superb performance in fiction best seller lists. Significant e-book growth in a flat market -12.8% in Spain and Latin America due to economic environment (Spain), political troubles (Argentina) and lack of curriculum change in Spain. 42

43 Digital activities Share of net sales generated by e-books at 10.4% worldwide. The US market is stabilising: e-book share of overall US market reached 23.3% vs. 23% in In this context, Hachette Book Group s e-books share reached 30% of net sales on the back of high share of best sellers vs. competition. Hachette UK at 19% and still growing. France still low (3% of adult fiction and non-fiction net sales). E-book prices are stable in key countries. 43

44 Significant events 44

45 Background The rise (+3.4%) 1 in passenger traffic worldwide has slowed down last year. However, after a challenging first half, the growth dynamic has gradually improved in the second half, mainly in Europe and in Asia-Pacific. Despite a sustained decline in the print media markets and the effects of the economic crisis, 2013 consolidated net sales grew by +0.3% at constant rates and perimeter, and when stripping out the impact of the end of tobacco sales in Hungary: +5.0% for LS travel retail (+2.9% at constant rate and like-for-like basis), double digit net sales growth in Duty Free & Luxury (+20%) and Food Services (+13%) % for LS distribution (-3.2% when stripping out the tobacco ban, at constant rate and likefor-like basis). In this difficult environment, growth project momentum remained strong and the year was marked by: successful integration of the new acquisitions: Rome airports activities and DFS Wellington in the Pacific region; gain or renewal of major contracts: SNCF, Warsaw T1, fashion in Spain, Lille, Prague, Adelaide, Queenstown, Sofia bus terminal; several acquisitions in Travel Retail including Coffee Fellows in Germany (15 stores), Gerzon (fashion retail) at Amsterdam airport and Airest ( 200m net sales, 82% of which in Food Services, presence in 11 countries, Duty Free & Food Services at Venice airport); few acquisitions in Distribution to accelerate the diversification: Crossings Fine Food in the United States (import of European gourmet products), Sprinter (service to e-retailers) and LDS Distributor (distribution of convenience products) in Hungary. 1 Source: ACI data at October 31,

46 Travel Retail in France Aelia 100% managed net sales up by +4,4% attributable to: an increase of +6,5% at Paris airports thanks to the strong improvement of the Fashion activities (+13.1%), the full-year effect of the modernisation of stores in 2012 (terminals S4, A/C), and despite the works that impacted strongly the terminal 2F sales in sales in the regions outside Paris are flat vs. last year: good performances on the French regions compensate the negative perimeter effect following the closing of specialised concepts such as L Occitane or Virgin at Paris airports. Relay 100% managed net sales are flat (-0.4%): unfavorable environment : decrease of consumption on national market; limited increase of traffic (railways and airports). and strong decrease of the print products (-7.2%) : Presstalis strikes in Q1, economic crisis and switch to digital. compensated by successful commercial initiatives and the modernisation of the network: strong growth of the food & beverage (+12.1%) and gifts and souvenirs (+5.6%) categories; opening of Gare Saint-Lazare stores and roll out of the new convenience and food services concepts (Hubiz or Trib s); development of Air de Paris concept. Sustained development activities: signing of an exclusive franchise contract with Marks & Spencer Simply Food in Travel Retail; renewal of the SNCF contract (307 sales outlets) for 10 years following a very competitive tender; gain of several significant tenders in food & beverage (Lille Flandres, Trib s in Arras, Café Leffe and Trib s in Tours, Eric Kayser in Avignon..) and hospital cafeterias (Tenon, Saint-Omer, Amiens, Troyes, Morlaix, Clermont ). 46

47 Travel Retail in Europe Italy (Rome airports) First full-year of operations for LS travel retail Roma after a take-over in October Results are in line with our expectations even if the traffic is significantly below the projections (-7.3%). All stores have been modernised according to plan, and entirely new commercial and customer services programmes are in place. United Kingdom Growth of +3.8% attributable to a good performance of the major airport platforms (+2.6%) and the full-year effect of the opening of four additional sales outlets in 2012 (+1.2 point). 15 sales outlets at the end of 2013, as in Germany Sales increase of +3.4 %: Travel Retail is stable at -0,4% with decreasing performance of the constant network (-7.8 %) strongly impacted by the change of passengers flows at Frankfurt airport (since October 2012) compensated by the non comparable network (+7.4% due to full-year effect opening in 2012). Growth of Food Services (+3.8 %) thanks to the opening of Frankfurt train station concession in May 2013 (10 stores) and the acquisitions of 19 Coffee Fellows stores and a Burger King store in The network consists in 122 sales outlets, +31 vs (30 sales outlets in Food Services). 47

48 Travel Retail in Europe Poland Net sales growth of +4.9% driven by: continuous strong performance of the Duty Free business: +16.6% (positive effect on Warsaw traffic from the closing of Modlin regional airport until October 2013); growth of Food Services activities (+12.3% mainly from So! Coffee concepts); Travel Essentials growth (+0.9%), mainly constrained by Inmedio (-6.2% impacted by the decrease of press and tobacco sales and the disappointing economic conditions). Czech Republic Net sales increase of +5.6% in 2013, mainly fuelled by the development of the network (comparable growth at +1.7% and 15 additional stores). The growth is driven by both the Duty Free (+3.2 points, positively impacted by the modernisation of the stores and new commercial initiatives) and the Food Services segments (+3.1 points, with 14 additional stores), while the Travels Essentials remains nearly flat (-0.2 point) despite a very strong decrease in press (-9.6%). Romania and Bulgaria Romania: net sales up +7.4%, with a network of 205 sales outlets (+7 sales outlets vs. 2012). Bulgaria: business grew by +22.7%, with a network of 90 sales outlets (+10 sales outlets vs. 2012). 48

49 Travel Retail in North America Retail activities in Canada and the United States are almost flat at -0.4%: decreasing performance of the comparable network (-1.0%), highly impacted by the decrease in print products (-9.6%), only partially compensated by the development of other products such as souvenirs & accessories or food & confectionary; positive contribution of the non comparable network (+0.6 point), the 2012 closings (La Guardia and JFK) being compensated by the full-year impact of 2012 openings (Edmonton, Austin and Pearson) and 2013 openings (Los Angeles, Detroit, Houston, Trudeau and JFK T8). 49

50 Travel Retail in Asia-Pacific Pacific 2013 has been affected by tight economic conditions, and a difficult and competitive environment: the significant drop in book sales continued, and the September 2012 restrictive tobacco policy has had a full-year impact in Despite this difficult environment, net sales continued to expand by +3.1%, mainly thanks to the full-year impact of DFS Wellington (16 stores acquired in July 2012). The network comprises 137 sales outlets (stable compared with 2012). Asia Consolidated sales picked up by a strong +29.3%, thanks notably to continuous traffic growth, improvement of existing Singapore operations (confectionery, specialty & fashion) and development of the fashion activity in China. LS travel retail is now present in Singapore, China, Hong Kong, Taiwan and Malaysia with a total network of 113 stores (+25 vs. 2012, driven by new fashion and travel essentials projects in Shenzhen Terminal 3). Recent entry into Malaysia, where LS travel retail opened two stores mid-2012 (Longchamp & Billabong-Lonely Planet), also contributed to grow the business. Activities will be extended in 2014 following the gain of the general merchandise concessions at KLIA2. 50

51 Distribution activities Belgium Distribution activity declined by -5.3%, including -5.1% in press and -7.0% in phone cards. Integrated Retail activities slightly increased by 0.3%. Spain Business in Spain eroded by -5.7% in a difficult economic environment: Retail activities fell by -3.6% and Distribution activities declined by -6.2%. Noticeable improvement in Q4. Switzerland Retail activity is stable at -0.5%, mainly thanks to Airport Fashion and the good performance of Payot. Distribution activity declined by -5.4% (OLF excluded), with a -8.9% drop in press sales. 51

52 Distribution activities Hungary Integrated Retail activity declined by -42.3%, since it suffered significantly from: the Tobacco ban law enforced mid-july (number of sales outlets selling tobacco went from 42,000 to 6,000; no international and/or large retailer can obtain those licenses); the change in mobile prepaid sales recognition method (commission-based contract). Excluding these two impacts, the Retail activity declined by -8.1%, mainly due to sales outlets closings following the tobacco ban. Distribution activity eroded by -6.3% (managed net sales) also due to non recurring effects: change in mobile prepaid sales accounting method; modification of the Hungarian Post distribution contract; acquisitions of LDS Distributor (January 2013), a convenience distribution company, and Sprinter (May 2013), a home delivery and 3PL company. Excluding the above impacts, the Distribution activity is stable. North America 2013 was impacted by the continued rapid decline in press sales, which impacted both Curtis (-8.4%) and LS distribution North America (-8.0%). In Canada, the success of diversification activities, particularly through Euro-Excellence (company importing and distributing fine European food products acquired in July 2011), helped to partially offset the decline in press sales. 52

53 Significant events 53

54 French Magazine Publishing In a particularly depressed magazine market, Lagardère Active maintains its leadership on both circulation and advertising. Advertising The print advertising revenue declined by -10.1%, which is consistent with the magazine market. However, most of the Lagardère Active magazines such as Elle, Elle Décoration, Télé 7 Jours or Parents stay strong leaders on their competitive sets. Circulation Overall, the circulation revenue is down by -5.4%, with a good resistance of the subscription revenue. The newsstand decline has been partially offset by price increases on key magazines (Paris Match, France Dimanche, Ici Paris, Elle, Public). Significant events In October 2013, Lagardère Active announced a strategic decision to focus its portfolio on its leading brands, which have a strong digital development potential. The magazines to be sold are the following: Auto Moto, Be, Campagne Décoration, Le Journal de la Maison, Maison & Travaux, Mon Jardin & Ma Maison, Psychologies magazine and Union, as well as their digital developments. It is also planned to sell the print editions of Première and Pariscope. Elle received the Best Brand Magazine Award rewarding its global brand strategy development on new media (web, tablets and mobile phones) and also new fields (special events, services ). Licensing revenues have increased by +4% vs. 2012, thanks to the business development including the launch of Elle in Australia (September 2013), Elle Decoration in Mexico (April 2013) and two editions of Elle Men in Hong Kong (September 2013) and Thailand (November 2013). Furthermore, the development of the network continues with, for example, the planned launch of Elle in Malaysia (March 2014). Public celebrated in June its 10 th anniversary. The brand remains the leader of the celebrity market on all digital devices: websites, mobile phones and apps. In May, Paris Match enhanced its editorial offer revamping the magazine itself with a new layout and new sections and bringing to market a new website using the responsive design technology. 54

55 Radio Europe 1 Radio station: number 3 in France has been a very good year for Europe 1 since its audience share has improved on its main commercial target (25-59 years old listeners) from 6.3% to 7.5% on yearly basis 1. High quality programmes focusing on news have been implemented throughout They have led to good audience figures and an increase in advertising sales. Europe1.fr: very good performance throughout 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, and was the only French radio to exceed 6 million podcasts. RFM No.2 adult-music radio station on the years old target with 3.0% audience share 1, RFM has reached its highest level since 2008 (2,473,000 listeners and 4.7% daily reach) on the last audience wave 1. Virgin Radio Virgin Radio focused on pop rock electro music and achieved on the years old target on a yearly basis an additional +0.6 audience share and +7 minutes of listenership time 1. International radios 2013 saw mixed performances from one country to another: robust advertising growth in Romania and Germany mitigated by decrease in Poland, Czech Republic and Slovakia. The slowdown noted in 2012 in our SMS activity in Poland continued throughout the year. In March 2013, Lagardère Active Radio International (LARI) started broadcasting in Czech Republic the frequencies acquired from BBC Radiocom. With Radio Zet Gold launched in 15 cities across Poland on July 1 st, LARI created a new brand which intends to strengthen the main radio brand Radio Zet. Radio Zet Gold is a music station for years, replacing radio station Planeta FM which was targeting young people. 1 Source: Médiamétrie; November-December / 2 Source: Médiamétrie; Nielsen NetRatings. / 3 Source: Médiamétrie estat; Catch-Up Radio; December 2013; France. 55

56 Television TV channels were still very dynamic in 2013, especially in Russia where TiJi and Gulli continued to grow at double digit pace. Free TV channels/gulli: in 2013, the revenues have decreased versus 2012: 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 2012; and partly because of a decreasing advertising TV market in France. In this environment, Lagardère Active manages to keep its TV leadership over the kids market and represents the first TV offer for children in France With Gulli, TiJi and Canal J. Pay TV channels: no renewal of major contracts in 2013; after an increasing turnover in 2012, 2013 has been a consolidation year; operations for launching Mezzo in Asia have been initiated in Digital and merchandising revenues: in 2013, licensing and merchandising business have continued to grow especially around the Gulli brand. Replay TV consumption continued to rise highly in 2013 and Gulli.fr is the leader website for children in France. 56

57 TV Production and Distribution 2.4 % revenue decrease in 2013 vs mainly due to the shutdown of animation production activity in H Productions deliveries of the six remaining episodes of Borgia season 2 for Canal+ and the last four episodes of Jo for TF1. Television market in France Decreasing audience share for all historical French channels except for TF1 and Arte in 2013 vs TV ad spending market decreased -5% in the first nine months of 2013 vs Ad spending negative trends are impacting the program budgets and production investments of historical channels. Lagardère Entertainment performances After being the No. 1 scripted producer in France, Lagardère Entertainment is becoming also the No. 1 non scripted producer in Lagardère Entertainment enjoyed the resounding success of short format serie Nos chers voisins (TF1), which was on TOP 100 audience in 2013, as well as its new short format Pep s (TF1) launched in The other series of Lagardère Entertainment continue to attract good viewing figures, particularly Joséphine, ange gardien, Clem, and Famille d accueil. C dans l air, broadcast daily on France 5, continues to attract good viewing figures and has been renewed for a three years contract starting September Launching of Borgia season 3 for Canal+ and Transporter season 2 for M6, which will be delivered in 2014 (Atlantique Productions). Acquisition of non scripted production company Groupe Réservoir as of February 5, Source: Médiamétrie. / 2 Source: IREP. / 3 Source: Écran Total. 57

58 Digital Lagardère Active remains the leading media group in France on web and mobile devices with 19 million unique visitors 1. Doctissimo.fr remains the health and wellness information leader with over 8 million unique visitors 1. Doctissimo.fr is developing its offer thanks to the acquisition of MonDocteur.fr, which is the first medical appointment online website, with already users in Paris. Furthermore, Doctissimo prepares the launching of Doctipharma, a solution which enables pharmacies to sell some of their products online. BilletReduc.com was elected the best online ticket selling service by the FEVAD². It is the French leader of low cost booking with more than 2,7 million tickets sold in Boursier.com, the leading French editorial agency on financial data, has launched a patrimonial section with L Argent & Vous. The aim is to target individual customers. The LeGuide group is facing the large-scale development of Google Shopping leading to a decrease in traffic for all market players. Therefore, the group is aiming at developing new sources of alternative traffic and implementing innovative solutions. The LeGuide group has adopted in 2013 powerful tools such as a new datacenter, a business intelligence platform and a new SEM optimisation traffic acquisition platform. 1 Source: Médiamétrie, NetRatings; connection from all places; January-December / ²E-commerce and distance selling federation. 58

59 Brand licensing activities Development of the international licensing business with new contracts in 2013: opening of a new Elle Café in Japan (Tokyo) July 2013; launch of Smartphone and touchpad accessories in Europe November 2013; launch of amenities Elle Spa in Thailand; launch of handbags, luggage and lunchbox lines in Canada; launch of beauty appliances in South Korea; two key partners (ready-to-wear in Japan and South Korea) have renewed their trust in our brand Elle for another five years; launch of the first touchpad with Label Parents. At the end of December 2013, revenues (mainly from Elle licensing) have increased by +3% vs. end of December

60 Significant events 60

61 Significant events 1/4 Football Media rights: sold the media rights of the 2013 Orange Africa Cup of Nations; continued to sell media rights of the Asian Football Cup (AFC) competitions; sold African, European and Asian qualifiers for the 2014 FIFA World Cup. Marketing rights: continued to sell marketing rights of the AFC competitions; managed the marketing rights of the 2013 Orange Africa Cup of Nations; extended its comprehensive marketing contracts with Hannover 96 and Hamburg SV; extended its current comprehensive marketing contract with FC Utrecht; signed two German clubs, Hertha BSC Berlin and Hamburger SV, for its digital loyalty programme; signed the first ever AFC deal with a Chinese sponsor (Tsingtao Beer); sold hospitality rights for the 2013 UEFA Champions League final and the 2013 Europa League final. Organisation and management of events: assisted the local organisation committee for the organisation and commercialisation of the FIFA club World Cup held in Morocco in December

62 Significant events 2/4 Other team sports: basketball, volleyball, handball, rugby, football (NFL 1 ) Media rights: signed a new agreement with the FIBA 2 to distribute the media rights of its competitions across Asia; distributed the FIVB 3 Grand Champions Cup hosted in Japan. Marketing rights: signed a marketing partnership with the French National Handball League for which it brokered a sponsorship with Konica Minolta; brokered the 4-year shirt sponsor deal between Joker, the fruit juice brand, and the French Basketball Federation (shirt sponsor of the French national teams plus other rights); signed an agreement with Stade français Paris for hospitality sales. Organisation and management of events: signed a 5-year contract with the French National Handball League to be the promoter of the new Hand Star Game, whose first edition was held in December Talent representation: signed nine top NCAA 4 football players in the 2013 NFL Draft, highlighted by three first round picks, which included the first pick overall (Eric Fisher). 1 National Football League. / ²International Basketball Federation. / 3 International Volleyball Federation. / 4 National Collegiate Athletic Association. 62

63 Significant events 3/4 Tennis Media rights: distributed worldwide media rights of all WTA Premier events; extended its agreement with the French Tennis Federation to distribute Roland-Garros media rights across Asia. Marketing rights: signed a new title sponsor for ATP tournament in Stockholm (Audi to replace BMW); renewed its agreement with Roland-Garros for hospitality sales. Organisation and management of events: signed a 5-year agreement with WTA and Singapore to be the promoter of the WTA Championships (final event of the season) that will be hosted in Singapore from 2014 to Talent representation: signed talent representation agreements with Andy Murray, winner of the 2013 Wimbledon Championships. Golf Organisation and management of events: acquired two golf events in Sweden: the Nordea Masters (European Tour) and the Helsingborg Open (Ladies European Tour); acquired Jeff Sanders Promotions, an events company, specialising in the production, management and marketing of golf tournaments in the US, including the Web.com Tour s premier events. Talent representation: acquired Crown Sports Management, a US-based golf talent representation agency, transforming Lagardère Unlimited US into the largest golf management company on the PGA Tour; Major stars that joined Lagardère Unlimited Golf in the Crown Sports acquisition include Brandt Snedeker, Davis Love III, Stewart Cink, Lucas Glover, David Duval, Chris Kirk, and Harris English; signed talent representation agreements with Jordan Spieth, the PGA Tour s 2013 Rookie of the Year. 63

64 Significant events 4/4 Olympic sports Media rights: continued to sell Sochi 2014 and Rio 2016 media rights; extended its agreement with FINA 1 to distribute worldwide media rights of the World Cup of Swimming series; became FIG 2 official media rights agency. Marketing rights: continued to sell marketing rights to the Glasgow Commonwealth Games 2014; signed an exclusive sales agreement with the French Cycling Federation to launch a professional cycling team; renewed its agreement with British Swimming. Consulting and operations of stadiums and arenas Signed a first project in Qatar for the Qatar Olympic Committee: a consulting project on the Lusail Multi-purpose Hall. Continued to sell marketing rights of the Singapore Sports Hub. Signed agreements with the French National Rugby League, the French National Basketball League and the Belarus Football Association on stadium consulting. Signed three projects in Russia with the 2018 FIFA World Cup stadiums. Started working on the preparation of the UEFA Euro 2016 (consulting agreement). Live entertainment Launched DISCO, a new musical that won the award of Best musical of the year by Le Parisien-Aujourd hui en France. 1 International Swimming Federation. / ²International Gymnastics Federation. 64

65 2013 Full-Year Results March 12, 2014