Businesses

2008 Activities

• Send

Despite 2008’s difficult economic and advertising climate, Lagardère Active successfully maintained control of costs and continued turning around its traditional media, while deploying a coherent Internet strategy in all countries where it does business.

While the focus over the last two years was on migrating its activities to digital formats, Lagardère Active has now embarked on a brand expansion strategy, along with efforts to renew and monetize its audiences.

Today, the digital business segment brings together in a single entity, all Lagardère Active brand Internet sites (Elle.fr, Premiere.fr, etc.), as well as its specialinterest websites (Doctissimo.fr, Newsweb.fr, etc.), a powerful new source of audience traffic.

In 2008, two new complementary portals were added to its existing base of websites: one dealing with interior design(Dekio.fr), and the other with music (Musiline.fr).

Also engaged in this monetization strategy, Lagardère Publicité, France’s second largest advertising brokerage, is reinforcing this plan of action thanks to its diversifi ed portfolio of more than 130 brands present on four media.

The Group’s television channels are striving to build the loyalty of new audiences.

This objective is being simultaneously pursued by channels broadcasting on France’s free digital terrestrial television network (Virgin 17 and Gulli) and by cable channels focused on music (Virgin 17, MCM, Mezzo) and on programming targeted at children and youth (Canal J, TiJi, June).

The Group’s generation-specific music radio stations (Virgin Radio, RFM) and the 24 international music stations of Lagardère Active Radio International (LARI), which has 33 million daily listeners, are also pursuing this same audience expansion strategy. The strategy also includes a brand expansion component, which is being pursued in the Group’s radio business segment in particular, with the spin-off of Europe 1 Sport from “premium” general-interest radio station Europe 1 .

The magazine publishing business, whose leading segments (the women's, lifestyle and celebrity segments) have been strengthened even further, benefi ted from the solid performance of such powerful brands as Elle magazine’s expanded network of 42 international editions plus Elle Déco, Paris Match, Télé 7 Jours, Car & Driver, Public, Art & Décoration, Red and Psychologies magazine, among others.

With the launch of its “Active Growth” plan aimed at revitalizing all business segments, Lagardère Active is striving to accelerate the organic growth of its brands by applying leveraging strategies that involve pricing, synergy exploitation, content development and editorial positioning.

Lagardère Active is diversifying its high value-added offers and continuing to develop its brand universes with a new urgency.

It intends to diversify its revenue sources in such high-potential areas as licensing and merchandising, mobile products, e-commerce, events and so on, as demonstrated by a recently concluded agreement pertaining to e-commerce operations with the Japanese company Sumitomo Corp.

In addition, the grouping together of the Group’s audiovisual and production companies under the Lagardère Entertainment banner has strengthened creative synergies and facilitated the development of new areas of expertise in such segments as live entertainment and audiovisual-rights management.

Significant events in 2008

The year 2008 saw the fi rst tangible results of Lagardère Active’s digital migration strategy with general improvement in the economic performance of its digital activities including increasing revenues, which amounted to more than 6.2% of total sales in 2008.

2008 was also marked by the restructuring and editorial renewal of the Group’s main media.

Radio

In an effort to claim new audience share, the brandchange strategy implemented at Virgin Radio and the Virgin 17 DTT channel was a bold move designed to capitalize on a powerful, world-renowned name.

Europe 1 surpassed the 5-million-listeners-per-day mark and grew its cumulative audience by more than 10%, achieving renewed success through profound restructuring of its editorial model.

Print media

A new tagline and updated layouts for Paris Match and Le Journal du Dimanche resulted in significant circulation hikes for these two periodicals. Substantial rises in circulation also gave a boost to the magazines Elle (up 3.4%), Elle à Table (up 3.8%) and Public (up 1.4%). In a highly competitive sector, Elle – the transgenerational magazine par excellence – remains the uncontested leader in the women's magazine segment. Moreover, with the acquisition of the Massin Group, the leading French publisher of interior decoration magazines, and the Psychologies Magazine Group, Lagardère Active significantly strengthened its leading segments.

Television

Lagardère Active maintained its leadership position with the Gulli channel, a huge success on the DTT network.

In more general terms, it reaffirmed its strong, highquality editorial presence on the entire children's and youth segment with Canal J, TiJi and June.

Virgin 17, essentially a music channel, decided to offer bolder, expanded general-interest programming
in an effort to draw the widest possible audience.

In audiovisual production, Lagardère Entertainment companies captured signifi cant audience share, particularly for their French drama and comedy productions.

In this niche, Lagardère Entertainment productions have drawn 150 million viewers since September 2008.

Adverstising

Lagardère Publicité also saw healthy commercial performance: after successfully integrating all its business segments, it outperformed the market in the three main advertising media (press, radio and TV). Moreover, Lagardère Active’s advertising brokerage resolutely negotiated several bends in the digital road by developing a cross-media strategy.

Digital

After a certain number of decisive acquisitions and the launch of several new websites, Lagardère Active is positioned as one of the foremost French media groups in digital audience  with 15 million unique visitors in France and over 50 million worldwide at year-end 2008.

International

Expansion abroad also remained a favoured development route with the launch of international editions of Elle in Indonesia, Finland and Denmark, plus a Chinese edition of Version Femina. Thanks to solid increases in 2008, emerging markets Russia and China offered anticipated growth opportunities and saw magazine launches in the upscale-women’s and home-decorating segments.

In radio, Lagardère Active Radio International (LARI) continued to extend its networks in Poland with Planeta FM and Chillizet. In Romania, LARI launched Vibe FM, a new dance-music format.

These developments echoed the excellent audience results achieved in Russia, Romania, Poland and the Czech Republic, all of which helped LARI bolster its positions in all seven countries