INVESTOR PRESENTATION APRIL 2019
DISCLAIMER 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 regarding Lagardère SCA s results or any other performance indicator, but rather trends or targets, as the case may be. 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; 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. No representation or warranty, express or implied, is made as to, and no reliance should be placed upon, the fairness, accuracy, completeness or correctness of such forward-looking statements and Lagardère SCA, as well as its affiliates, directors, advisors, employees and representatives accept no responsibility in this respect. 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
TABLE OF CONTENT GROUP STRATEGY slide 4 GROUP PROFILE slide 9 slide 12 slide 16 slide 20 slide 22 PERFORMANCE slide 25 GUIDANCE slide 33 Appendix slide 35 3
GROUP STRATEGY
A SIMPLER, MORE AMBITIOUS AND MORE FOCUSED BUSINESS PROFILE A Group structured around two priority pillars, to ensure each one is given all the necessary resources to dominate their sectors: Power engine Growth engine Improve the Group s industrial profile: simpler, more ambitious and more focused. Improve cash generation to finance the growth of our businesses. 5
2018, THE YEAR OF THE STRATEGIC REFOCUSING ROLL OUT with significant disposals transactions completed or engaged at Lagardère Active International Radios Most of the Press Magazine titles Digital Assets (including e-health activities) Television business (excluding Mezzo) Closed Under exclusive negotiations and significant reinvestments Lagardère Travel Retail: - Hojeij Branded Foods Lagardère Publishing: - Worthy Publishing Group - Gigamic Acquisition Acquisition Acquisition Acquisitions wholly financed out of proceeds of non-core assets: Lagardère Active businesses and property assets. 6
2019, A TRANSITIONING YEAR TO FOLLOW UP ON STRATEGIC REFOCUSING With a target scope composed of: Lagardère Publishing and Lagardère Travel Retail Other Activities: - Lagardère News - Entertainment businesses - Lagardère Corporate (including Lagardère Active Corporate to be extinguished progressively by 2020) And a non-retained scope splitted into: «Core Businesses» Lagardère Sports Lagardère Studios Mezzo Not yet disposed 7
SUCCESSFULL REINVESTMENTS IN CORE BUSINESSES TO CREATE VALUE At Lagardère Publishing Very positive return on investment track record with acquisitions since 1996. Recent acquisitions to continue to increment catalogue and to buy properties. At Lagardère Travel Retail Strong and diversified concessions network. Selective past acquisitions (advantageous multiples) with smooth integration and on-going synergies. Very strong track record of building global leaders both organically and via M&A. 8
GROUP PROFILE
A DIVERSIFIED GROUP WITH LEADING BRANDS AND MARKET POSITIONS 2018 revenue breakdown by division 2018 revenue breakdown by region Latin America, Africa, Middle East Asia- 3% Pacific 9% No. 3 worldwide in Travel Retail Robust expertise in three business lines 51% 31% No. 3 worldwide (Trade) A multi-segment publisher A major player in the digital sector US and Canada 21% 7,258m France 31% Europe 36% 7,258m 2018 recurring EBIT breakdown by division No. 3 in scripted TV Production in France Major player in Press and Radio in France 12% 6% Leader in football in Africa, Asia and Europe Leader in sponsorship and media rights globally Leader in golf talent management 18% 7% 401m 46% 29% 10
A MEASURED, WELL-BALANCED FINANCIAL STRATEGY A tight rein on net debt providing long-term viability for an attractive dividend payout policy Historical dividend ( /share) Leverage ratio Net debt/recurring EBITDA** Ordinary dividend per share ( ) Extra dividend per share ( ) 9.0 1,368m 1,375m 6.0 5.7%* 2.2x 2.1x* 31/12/2017 31/12/2018 Investment capacity of 500m assuming a leverage ratio of 3x. 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 2011 2012 2013 2014 2015 2016 2017 2018 *Dividend yield based on 22.80 closing price on 12 March 2019. Ordinary dividend stable over the long term ( per share). Large payouts to shareholders following the one-off sales of non-strategic shareholdings. Attractive ordinary dividend yield given the current low interest rate environment. * On a proforma basis (as per credit facility covenant), including 12 months of HBF recurring EBITDA. On a reported basis, ratio is 2.2x. ** Alternative Performance Measure (APM) - See Glossary on slides 51 to 54. 11
SUCCESSFUL PORTFOLIO OF PUBLISHING BUSINESSES WITH SOLID LEADING POSITIONS IN CORE MARKETS 2018 revenue by geographic area 2018 revenue by activity Other 18% France 28% Other 17% Education 14% Spain 6% 2,252m Partworks 12% 2,252m Illustrated Books 13% US & Canada 29% UK & Australia 19% General Literature 44% Top 3 Consumer book publishers worldwide Based on 2018 pro-forma turnover ( m) (Consumer: Trade & Education including Higher Education) Ranking in core markets ** 3,679 3,359* 2,252 #1 #2 #3 #4 #2 * 2017 data (PRH will release its financial results on March 26 th 2019). **Consumer (trading and education). Based on 2018 average exchange rates. Revenues from STM, professional markets and other activities than book publishing have been excluded when it could be isolated. Sources: Annual reports, Internal estimates, GfK, Nielsen Bookscan. 13
GROWTH FUELLED BY ACQUISITION AND INTERNATIONAL DEVELOPMENT Revenue evolution ( m) and cash flow from operations before changes in working capital Growth fuelled by acquisitions (2003-2018) (2003-2018) 2018 Revenue Cash flow from operations before changes in working capital 2,252 2017 2016 2015 2014 2013 2011 959 2009 A. 2008 2007 83 2003 2018 197 2006 2004 2003 14
RIDING THE DIGITAL WAVE E-books Audiobooks E-publishing Mobile apps E-education E-books contribution to Lagardère Publishing's overall revenue: 7.9% in 2018. Audiobooks contribution to Lagardère Publishing's overall revenue: 2.7% in 2018. Reinforcing leadership: Bookouture / acquisition of Britain s leading independent e-publisher. Exploring new opportunities: Mobile gaming startups acquisitions for cross-fertilization with all imprints (Neon Play / Brainbow Peak/ Is Cool). Spearheading new educational practices: from the digital multi-support version of a textbook to enhanced classroom content including game-changing self-assessment, solutions: acquisition of Rising Stars. 15
HIGH GROWTH BUSINESS WITH LEADING POSITIONS IN ITS 3 SEGMENTS 2018 revenue * by geographic area 2018 revenue by activity EMEA (excl. France) 42% North America 21% 3,673m Asia- Pacific 13% France 24% Duty Free & Fashion 40% Foodservice 17% 3,673m Travel Essentials 43% * IFRS revenue, excluding Distribution. Top 10 Travel Retail operators worldwide Ranking in core markets bn, sales @100%, 2017 7.2 Foodservice Duty Free & Fashion #4 #1 Top 10 #1 4.8 1.6 4.7 * 4.6 3.7 3.4 3.2 2.7 Travel Essentials 2.1 2.0 Foodservice Travel Essentials Core Duty Free Fashion in Europe * Pro forma including 230m$ HBF sales. Sources: Companies reports, The Moodie Report, Lagardère Travel Retail estimates. 17
DIVERSIFIED GROWTH PATHS A strong development mainly driven by organic growth Bridge sales growth ( m at constant exchange rates, IFRS consolidated sales, 2017-2018) 3,401 2017A sales 131 163 * On a like-for-like basis. ** Net of contracts terminated over the period. *** At 2017 exchange rate. 294 41 (88%) (12%) 3,736 *** 41 Organic growth Existing concessions +4.5%* New concessions ** External growth 2018A sales +9.9% August 2018 November 2016 December 2016 October 2015 Organic Growth Gain of new concessions Late 2017 September 2017 May 2017 March 2017 End 2016 December 2015 Late 2017 February 2017 September 2015 November 2018 June 2017 The Netherlands: Foodservice on national railway External Growth Shanghai, Beijing, Wuhan: Duty Free & Fashion, Foodservice Dakar: Duty Free and Travel Essentials Hong Kong: Liquor & Tobacco (with China Duty Free Group) Geneva: Duty Free Riyadh, Dammam, Jeddah: Duty Free Poland: master concession won at Gdansk airport Abu Dhabi: Duty Free & Foodservice Expansion of existing concessions Auckland: opening of a new Duty Free store Prague: Take-over of 9 additional Duty Free stores Rome: Foodservice & Duty Free in Avancorpo Terminal Nice: opening of new T1 with an innovative food concept North America: acquisition of Hojeij Branded Foods Poland: acquisition of Inflight Service activities North America: acquisition of Paradies (present in more than 76 airports) 18
IMPROVEMENT OF CASH GENERATION BACKED BY A RESILIENT BUSINESS MODEL Travel Retail Cash Flow from Operations * Breakdown of Capex ** 188 +66% 207 224 175 155 135 115 95 4.3% 4.4% 4.0% 56 54 66 3.5% 50 4,0% 3,0% 135 75 55 82 83 77 2,0% 35 44 1,0% 15 2015 2016 2017 2018 5 2015 2016 2017 2018 0,0% New Stores Renewal & maintenance % of revenue * Travel Retail perimeter only (excluding Distribution) Cash Flow from Operations before changes in working capital. ** Capex Travel Retail, excluding Distribution. 19
A DIVERSIFIED BUSINESS MIX WITH SOLID LEADING POSITIONS 2018 revenue by geographic area 2018 revenue by activity Rest of World 16% Others 5% Spain 7% France 77% Lagardère Studios 24% 895m 895m Non-Core Press 27% TV Channels 12% Press 15% International Radio 3% French Radio 14% Peers Radio + TV + Internet Sound market positions #1 #3 #1 Magazine publisher in France Scripted TV production in France Youth and family TV channels in France 21
A GLOBAL NETWORK COMBINING INTERNATIONAL EXPERTISE WITH LOCAL MARKET KNOWLEDGE 2018 revenue by geographic area 2018 revenue by activity Rest of World 21% France 18% Live Entertainment 10% Media rights 16% Asia & Australia 17% Rest of Europe 11% 438m Other 438m Germany 27% 20% UK 13% Marketing rights 47% Competitive Landscape Leading Positions In football in Africa, Asia and Europe In sponsorship and media rights globally In golf talent management 23
A SUCCESSFUL RECOVERY PLAN AND A GROWTH SECURED WITH RENEWAL AND ADDITION OF MAJOR CONTRACTS PRESERVING LONG TERM PARTNERSHIPS STRENGHTENING CORE SALES ACTIVITIES DEVELOPING BRAND CONSULTING AND DIGITAL SERVICES Division returned to profitability in 2014 n.m. 6.9% (33) 30 2012 2018 Long-term partnerships YEARS 23 of continuous partnership with CAF > Contract until 2028 YEARS 18 of continuous partnership > Contract until 2030 Tailored partnerships 100 with CGF EUROPEAN FOOTBALL & RUGBY CLUBS Consolidate and expand comprehensive business on existing territories in Football Europe Focus on CAF next cycles Leverage our Media and Sponsorship sales network to create value for rights holders Entered into exclusive media distribution partnership with International Handball Federation. Launch of Lagardère Plus, a global agency with a mission to transform traditional brand sponsorships into highly inventive and impactful marketing platforms: - partnership exploratory and strategy; - comprehensive digital strategies; - production & management of digital content; - mobile and tablet apps for rights-holders; - social apps & activations for rights-holders and brands; - data analysis. 24
GROUP PERFORMANCE IN 2018
HIGHLIGHTS Solid performance from Travel Retail and Sports & Entertainment divisions Due to the absence of curriculum reform, lower performance from Publishing Free cash flow substantially improved. ( m) 2017* 2018 Revenue 7,084 7,258 Group recurring EBIT** 399 401 Group operating margin** 5.6% 5.5% Profit Group share 176 194 Adjusted profit Group share** 214 222 Free cash flow** 283 471 Net debt at end of year** (1,368) (1,375) Earnings per share (in ) 1.36 1.49 Ordinary dividend per share (in ) 1.30 1.30*** +2.5% consolidated +3.3% like-for-like** * Restated for IFRS 15 using the retrospective method. ** Alternative Performance Measure (APM) See Glossary on slides 51 to 54. *** Ordinary dividend that will be recommended at the General Meeting on 10 may 2019. 26
LAGARDÈRE PUBLISHING: ACTIVITY 2018 revenue by geographic area 2018 revenue by activity Other 18% 19%* Spain 6% 6%* 2,252m France 28% 29%* Other 17% 16%* Partworks 12% 12%* Education 14% 16%* Illustrated Books 13% 2,252m 13%* *% of revenue in 2017 US & Canada 29% 27%* UK & Australia 19% 19%* Change in recurring EBIT ( m) and operating margin (%) General Literature 44% 43%* 9.2% 8.4% 210 190 2017 2018 27
LAGARDÈRE TRAVEL RETAIL: ACTIVITY 2018 revenue by geographic area 2018 revenue by activity North America Asia-Pacific 21% 13% 22%* 12%* EMEA (excluding France) 42% 41%* *% of revenue in 2017 3,673m France 24% 25%* Travel Essentials 43% 44%* 3,673m Foodservice 17% 17%* Change in recurring EBIT ( m) and operating margin (%) Duty Free & Fashion 40% 39%* 3.3% 3.3% 112 119 2017 2018 28
LAGARDÈRE ACTIVE: ACTIVITY 2018 revenue by geographic area 2018 revenue by activity Others Other 16% 16%* Spain 7% 6%* 895m France 77% 78%* Lagardère Studios 24% 21%* 5% 5%* 895m Non-Core Press 27% 27%* *% of revenue in 2017 restated for IFRS 15 using the retrospective method. TV Channels 12% 11%* International Radio 3% French Radio 14% 6%* 14%* Change in recurring EBIT ( m) and operating margin (%) Press 15% 15%* Non-core business Retained business 7.5% * 8,4% 70 75 *% margin in 2017 restated for IFRS 15 using the retrospective method. 2017 2018 29
LAGARDÈRE SPORTS AND ENTERTAINMENT: ACTIVITY 2018 revenue by geographic area 2018 revenue by activity Other 21% 25%* France 18% 18%* Live Entertainment 10% 10% * Media rights 16% 22%* Asia & Australia 17% 17%* Rest of Europe UK 11% 13% 12%* 8%* Other 438m Germany 438m 27% 20% 24%* 20%* Marketing rights 47% 44%* *% of revenue in 2017 restated for IFRS 15 using the retrospective method. Change in recurring EBIT ( m) and operating margin (%) 4.7% * 22 6.9% 30 2017 2018 *% margin in 2017 restated for IFRS 15 using the retrospective method. 30
CONSOLIDATED STATEMENT OF CASH FLOWS ( m) 2017* 2018 Cash flow from operations before changes in working capital 536 505 Changes in working capital (71) 55 Taxes paid excluding taxes on property disposals (61) (35) Net cash from operating activities** 404 525 Purchases/disposals of tangible and intangible assets*** (246) (237) Free cash flow excluding property disposals 158 288 Proceeds from property disposals net of tax paid and related refitting costs 125 183 Free cash flow**** 283 471 Purchases of investments Disposals of investments Net cash from operating and investing activities 234 279 Dividend paid and other (143) (229) Interest paid (70) (57) Change in net debt 21 (7) Net debt** (1,368) (1,375) (68) 19 (340) 148 Substantial improvement attributable to Lagardère Publishing and Lagardère Travel Retail Including 130m at Lagardère Travel Retail with a significant portion relating to new stores/concessions In 2018, HBF acquisition covered by proceeds from non-core assets disposals * Restated for IFRS 15 using the retrospective method. ** Before tax paid on property disposals. *** Excluding property disposals and refitting costs. **** Alternative Performance Measure (APM) See Glossary on slides 51 to 54. 31
FINANCING POLICY A stable debt level. HBF acquisition funded by non-core asset disposals (Lagardère Active assets and office buildings) 2019 Bond refinancing will reshuffle repayment schedule positively Leverage ratio Net debt/recurring EBITDA** Authorised credit lines**: 1,250m 1,368m 1,375m 499m 2.2x 2.1x* 31/12/2017 31/12/2018 Cash*: 710m 71m 496m 152m 26m 48m 492m 297m 4m Available cash 2019 2020 2021 2022 2023 2024 & beyond * On a proforma basis (as per credit facility covenant), including 12 months of HBF recurring EBITDA. On a reported basis, ratio is 2.2x. ** Alternative Performance Measure (APM) - See Glossary on slides 51 to 54. *Short-term investments and cash, excluding 8m of derivative assets. **Undrawn Group credit facility excluding authorised credit lines at divisional level. 32
GUIDANCE
GUIDANCE 2019 2019 RECURRING EBIT* GROWTH TARGET BASED ON TARGET SCOPE**: The Lagardère group expects 2019 recurring EBIT* growth based on the target scope to be between 4% and 6% at constant exchange rates and excluding the acquisition of HBF. NON-RETAINED BUSINESS SCOPE***: Based on constant exchange rates, the contribution to recurring EBIT in 2019 for businesses not disposed to date (which represented 78 million in 2018) is expected to be between 80 million and 90 million on a full-year basis. * Including IFRS 16 impact on buildings and other only. Impact on concession contracts of Travel Retail is neutralised in REVISED Recurring EBIT. See Glossary on slide 51 to 54. ** Lagardère Publishing and Lagardère Travel Retail (core businesses), as well as Other Activities including Lagardère News (Paris Match, le Journal du Dimanche, Europe 1, Virgin Radio, RFM and the Elle licence), the Entertainment businesses, the Group Corporate function, and the Lagardère Active Corporate function whose costs will be wound down by 2020. *** Recurring EBIT for assets disposed to date is minimal, since the Press business was deconsolidated with effect from 1 January 2019 and the amounts corresponding to the other assets are not significant. 34
APPENDIX: BUSINESS UPDATES
TRANSFORMATION METHOD 1 A strategy to drive growth and improve profitability and cash generation, while maintaining a long-term vision. 2 Choice and objective of the timing of disposals and reinvestments. 3 Reinvestments broadly accretive in terms of recurring EBIT, cash generation and acquisition multiples. 4 Launched in June 2017, our transformation has resulted in disposals in progress and a strategic acquisition for Lagardère Travel Retail in North America, with the Group exploring other avenues for reinvestment. 36
PERSEUS ACQUISITION EXPANSION OF NON-FICTION AND BACKLIST PUBLISHING PROGRAMS Date of creation: 1996. Date of acquisition: 1 st April 2016. 2015 revenue: 90m Activities: Non-fiction / Backlist publishing programs. 9 imprints: Avalon Books, Basic Books, DACapo Press, Public Affairs, Running Press, etc. Market Positionning: Major general trade publisher in the United States. Markets: United States + United Kingdom. Synergies: The synergies for us will come to finding our own way out of the global Perseus infrastructure and running the business through our own infrastructure, which will take about 18 months. 37
TRAVEL RETAIL ORGANIC GROWTH DRIVERS A favourable product mix evolution (in m, revenue@100% 2016-2018) 4.2bn +8.1% 4.5bn +8.2% 4.9bn Liquor Tobacco Gourmet food & confectionary Perfume & Cosmetics Fashion 6% 6% 6% 17% 17% 17% 9% 9% 8% 14% 14% 14% 10% 11% 12% Food & Beverage 19% 21% 22% Print Other * 10% 8% 7% 15% 14% 16% 2016 2017 2018 * Other mainly includes: travel accessories, gifts & souvenirs and convenience products (phone cards, lottery, etc.). 38
GROWTH HAS BEEN DRIVEN BY THE AWARD OF MAJOR TENDER OFFERS IN ALL THREE BUSINESSES Focus on major airport tender offers won since 2014 2014 2015 2016 2017 2018 Reykjavik Krakow Hong Kong Phoenix Geneva Dakar Gabon San Francisco Vienna Melbourne T4 Auckland Luxembourg Gdansk Prague Gold Coast Malaga Orlando Warsaw T1 Abu Dhabi Riyadh & Dammam & Jeddah Hong Kong Christchurch NS Station (NL) 39
AND BY SELECTIVE M&A OPERATIONS Focus on M&A operations performed from 2014 to 2018 Gerzon Closed in January 2014 12 PoS in Schiphol airport Operations in Fashion Annual sales: 55m Airest Closed in April 2014 200 PoS in 11 countries Operations mainly in Foodservice Annual sales: 200m Saveria Closed in April 2015 17 PoS located at JFK T4 Operations in Fashion & Conf. Annual sales: 20m Coffee Fellows Closed in January 2014 18 PoS in German train stations Operations in Foodservice Annual sales: 10m Paradies Closed in October 2015 520 PoS located in 75 airports Operations in the 3 businesses Annual sales: 480m Hojeij Branded Foods Closed in November 2018 124 PoS in 38 airports Operations in Foodservice Annual sales: $225m Inflight Service activities in Poland and Northern Ferries Closed in June 2017 9 PoS in airports and seaport Operations in Duty Free Annual sales: 20m 40
PARADIES LAGARDÈRE: CREATING A REGIONAL LEADER Overview of Paradies Lagardère Paradies Lagardère 2017 key figures #3 in North America 98 airports 6,000 employees $852m revenue A new entity managed by an experienced leadership team A brand portfolio tailor made for the North American market A unique and complementary North American footprint A strong and long-lasting relationship with landlords Source: Paradies internal data. 41
ACQUISITION OF HOJEIJ BRANDED FOODS: REINFORCING LAGARDÈRE TRAVEL RETAIL IN NORTH AMERICA AND IN FOODSERVICE GLOBALLY (1/3) HBF 2017 key figures 124 restaurants across 38 airports Profile of HBF Leading airport Foodservice travel retail operator in North America Transaction overview Recognised operational excellence with leading proprietary and partner brands Successful acquisition in 2017 of Vino Volo, #1 airport wine bar chain in the US and Canada 40+ brand relationships and proprietary concepts $225m revenue 1 Transaction summary EBITDA, synergies and implied multiple Acquisition of 100% of Hojeij Branded Foods (HBF) Purchase price: $330 million 2 Attractive synergy potential with run rate of circa $10 million per annum the fourth year following the acquisition Transaction EBITDA multiple (on a valuation gross of partners share) of seven times estimated 2018 Pro Forma EBITDA 3 including run rate synergies 1 Including 12 months revenue of Vino Volo, acquired in July 2017. 2 Based on debt and cash free valuation, net of partners share in operating JVs (ACDBE programmes) estimated to be 16% over the period of the business plan. 3 Pro Forma EBITDA is defined as Reported EBITDA adjusted for the run-rate performance of shops opening and closing in 2018 as well as the USD 10 million run-rate impact of recurring synergies. 42
ACQUISITION OF HOJEIJ BRANDED FOODS: REINFORCING LAGARDÈRE TRAVEL RETAIL IN NORTH AMERICA AND IN FOODSERVICE GLOBALLY (2/3) Strategic rationale An attractive travel foodservice market in North America A large travel foodservice market (50% of total North American travel retail market) supported by sound drivers and significant potential for growth thanks to: Solid traffic forecasts Very dynamic segment with growing demand from travelers and landlords awareness Reinforcing Lagardère Travel Retail in North America Combining the activities of Paradies Lagardère and HBF creates the third-largest operator in the North American airport travel retail and restaurant industry. With operations in more than 110 airports, the combination of HBF and Paradies Lagardère would generate an overall annual sales in excess of $1.1 billion, with circa $350 million in food and beverage sales. Both Lagardère Travel Retail and HBF are Atlanta-based and have a strong cultural fit and high quality oriented business models A very strong and experienced management team 43
ACQUISITION OF HOJEIJ BRANDED FOODS: REINFORCING LAGARDÈRE TRAVEL RETAIL IN NORTH AMERICA AND IN FOODSERVICE GLOBALLY (3/3) Expected synergies Sales uplift synergies Roll-out of HBF concepts/brands, well positioned for specific consumer needs Improved menu tailoring and customer targeting Operational know-how and excellence in execution Alignment of purchasing conditions to the extent possible on food products as well as on COGS 1 synergies beverages Consolidation of volumes between Paradies Lagardère and HBF, which will improve bargaining power with vendors Better costs of goods management G&A 2 & other synergies Creation of a dedicated Foodservice business unit, which will improve efficiencies Consolidation and rationalisation of central functions and costs Convergence towards a dedicated and business-oriented IT system Total quantified synergies $10 millions 3 run rate 1 Cost Of Goods Sold. 2 General and administrative. 3 Pre tax. Full potential of recurring synergies to be reached in 2021 44
ABU DHABI INTERNATIONAL AIRPORT: A MAJOR STEP IN MIDDLE-EAST Overview of Abu Dhabi contract awarded Key figures 10-year contract on core duty free categories, confectionery and fine foods 13 PoS over 3,000 sq.m. 10-year estimated cumulated revenue: 2.1bn 7 Food and Beverage contracts awarded in April 2016 50/50 joint venture created to bid and run operations Source: Lagardère Travel Retail internal data. Multi-category shops Le Club iconic shop 45
KEY FEATURES AND RATIOS OF TENDER OFFERS IN THE AIRPORT TRAVEL RETAIL ENVIRONMENT Contracts are awarded through tender offer processes where travel retail operators answer RFPs on packages depending on the retail space location and / or the product line targeted Main ratios 1 Business line Duty Free & Fashion Travel Essentials Foodservice Surface (sq.m.) 500 10,000 30 200 50 300 Capex ( /sq.m.) 3,000 5,000 (incl. brand contrib.) 1,000 3,000 2,000 5,000 (incl. kitchen) Length (years) 5 10 5 7 7 10 Rent (% of sales) Exclusivity 15 40 8 30 10 35 Most of the time supported by a Minimum Guaranteed 2 Rare (de facto in some cases) 1 Ratios 90% within standard deviation from the mean. 2 MG could be fixed, indexed on traffic and/or inflation, monthly or annual. Source: Lagardère Travel Retail estimates. 46
ELLE: THE WOMEN BRAND 47
2019 SPORTS EVENTS CALENDAR 2019 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter AFCON Football Africa AFCON U20 AFCON Qualifiers (matchday 6) AFCON U17 AFCON U23 Champions League & Confederation Cup 2018-19 Super Cup (for CL&CC 2018) Super Cup (for CL&CC 19) AFC Champions League + AFC Cup Football Asia Asian Cup AFC Futsal Golf Singapore Open Australia Open Media Handball Men WC 48
APPENDIX: FINANCIAL UPDATES
AN EXCELLENT SHAREHOLDER RETURN 270 Lagardère share: +121% 250 230 Shareholder return* Indexes based (100 at 1 January 2013) 210 190 170 150 130 CAC 40: +77% STOXX Europe 600 Media: +82% 110 90 01/01/2013 01/01/2014 01/01/2015 01/01/2016 01/01/2017 01/01/2018 01/01/2019 Lagardère CAC 40 Stoxx Europe 600 Media *Source: Capital IQ and Datastream as of 31 December 2018. 50
GLOSSARY (1/4) Lagardère uses alternative performance measures which serve as key measures of the Group's operating and financial performance. These indicators are tracked by the Executive Committee in order to assess performance and manage the business, as well as by investors in order to monitor the Group's operating performance, along with the financial metrics defined by the IASB. These indicators are calculated based on accounting items taken from the consolidated financial statements prepared under IFRS and a reconciliation with those items is provided either in this presentation or in the press release or in the notes to the consolidated financial statements. The like-for-like change in revenue is calculated by comparing: 2018 revenue to exclude companies consolidated for the first time during the period, and 2017 revenue to exclude companies divested in 2018; 2018 and 2017 revenue based on 2017 exchange rates. Recurring EBIT (Group recurring EBIT). The Group's main performance indicator is recurring operating profit of fully consolidated companies, which is calculated as follows: Profit before finance costs and tax excluding: Income (loss) from equity-accounted companies before impairment losses; Gains (losses) on disposals of assets; Impairment losses on goodwill, property, plant and equipment, intangible assets and investment in equity-accounted companies; Net restructuring costs; Items related to business combinations: - Acquisition-related expenses; - Gains and losses resulting from purchase price adjustments and fair value adjustment due to changes in control; - Amortisation of acquisition-related intangible assets. Specific major disputes unrelated to the Group's operating performance. 51
GLOSSARY (2/4) Operating margin is calculated by dividing recurring EBIT of fully consolidated companies (Group recurring EBIT) by revenue. Recurring EBITDA over a rolling 12-month period is calculated as recurring EBIT of fully consolidated companies (Group recurring EBIT) plus dividends received from equity-accounted companies, less amortisation and depreciation charged against intangible assets and property, plant and equipment, less amortisation of signing fees. Adjusted profit Group share is calculated on the basis of profit for the period, excluding non-recurring/non-operating items, the related tax effect and minority interests, as follows: Profit for the period excluding: Gains (losses) on disposals of assets; Impairment losses on goodwill, property, plant and equipment, intangible assets and investments in equity-accounted companies; Net restructuring costs; Items related to business combinations: - Acquisition-related expenses; - Gains and losses resulting from purchase price adjustments and fair value adjustments due to changes in control; - Amortisation of acquisition-related intangible assets. Specific major disputes unrelated to the Group's operating performance; Tax effects of the above items, including the tax on dividends paid in France; Non-recurring changes in deferred taxes; Adjusted profit attributable to minority interests: Profit for the period attributable to minority interests on the above items. Free cash flow is calculated as cash flow from operations plus net cash flow relating to acquisitions and disposals of intangible assets and property, plant and equipment. Net debt is calculated as the sum of the following items: Short-term investments and cash and cash equivalents, Financial instruments designated as hedges of debt, non-current debt and current debt. 52
GLOSSARY (3/4) In the context of the first-time application of IFRS 16 Leases, effective 1 January 2019, the Group has elected to retain its existing alternative performance measures with certain modifications, in particular the neutralisation of pure accounting effects and distortions created by the new standard on the concessions businesses. From 1 January 2019, these indicators will be monitored by the Executive Committee to assess operating performance and manage the business, along with the financial metrics defined by the IASB. These indicators will be calculated based on accounting items taken from the consolidated financial statements prepared under IFRS and a reconciliation with those items will be provided. To prevent any confusion during the transition period between the alternative performance measures before and after the application of IFRS 16, each corresponding definition is preceded with REVISED. REVISED Recurring EBIT (REVISED Group recurring EBIT). The Group's main performance indicator is recurring operating profit of fully consolidated companies, which is calculated as follows: Profit before finance costs and tax excluding: Income (loss) from equity-accounted companies before impairment losses; Gains (losses) on disposals of assets; Impairment losses on goodwill, property, plant and equipment, intangible assets and investment in equity-accounted companies; Net restructuring costs; Items related to business combinations: - Acquisition-related expenses; - Gains and losses resulting from purchase price adjustments and fair value adjustment due to changes in control; - Amortisation of acquisition-related intangible assets. Specific major disputes unrelated to the Group's operating performance. Items related to leases: (NEW) - Cancellation of fixed rental expense* on concessions; - Depreciation of right-of-use assets on concessions; - Gains and losses on lease modifications. * Cancellation of fixed rental expense is equal to the repayment of the lease liability, the associated change in working capital and interest paid in the statement of cash flows. 53
GLOSSARY (4/4) REVISED Recurring EBITDA over a rolling 12-month period is calculated as REVISED recurring EBIT of fully consolidated companies (REVISED Group recurring EBIT) plus dividends received from equity-accounted companies, less amortisation and depreciation charged against intangible assets and property, plant and equipment, less amortisation of signing fees, less depreciation of right-of-use assets for buildings and other items (NEW), less cancellation of fixed rental expense* for buildings and other items (NEW). REVISED Adjusted profit Group share is calculated on the basis of profit for the period, excluding non-recurring/non-operating items, net of tax and minority interests, as follows: Profit for the period excluding: Gains (losses) on disposals of assets; Impairment losses on goodwill, property, plant and equipment, intangible assets and investments in equity-accounted companies; Net restructuring costs; Items related to business combinations: - Acquisition-related expenses; - Gains and losses resulting from purchase price adjustments and fair value adjustments due to changes in control; - Amortisation of acquisition-related intangible assets. Specific major disputes unrelated to the Group's operating performance; Items related to leases: (NEW) - Cancellation of fixed rental expense* on concessions; - Depreciation of right-of-use assets on concessions; - Interest expense on lease liabilities on concessions; - Gains and losses on lease modifications. Tax effects of the above items, including the tax on dividends paid in France; Non-recurring changes in deferred taxes; Adjusted profit attributable to minority interests: Profit for the period attributable to minority interests on the above items. REVISED Free cash flow is calculated as cash flow from operations including repayment of lease liabilities and associated interest paid (NEW) plus net cash flow relating to acquisitions and disposals of intangible assets and property, plant and equipment. * Cancellation of fixed rental expense is equal to the repayment of the lease liability, the associated change in working capital and interest paid in the statement of cash flows. 54
LAGARDÈRE IR TEAM IR team details Florence Lonis Chief of Investor Relations Tel: +33 1 40 69 18 02 flonis@lagardere.fr Dounia Amouch Investor Relations Officer Tel: +33 1 40 69 67 88 damouch@lagardere.fr Calendar* (all time is CET) Publication of Q1 2019 revenue 7 May 2019 at 8:00 a.m. Publication of H1 2019 results 25 July 2019 at 5:35 p.m. Publication of Q3 2019 revenue 14 November 2019 at 8:00 a.m. Sophie Reille Assistant Tel: +33 1 40 69 21 14 sreille@lagardere.fr Address: 42 rue Washington - 75408 Paris - France Tickers: Bloomberg (MMB FP), Reuters (LAGA.PA) * These dates can be subjected to change. 55