Businesses

2008 Activities

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Lagardère Publishing, whose book-publishing brand is Hachette Livre, confronted the contraction in its markets with some signifi cant competitive advantages.

In 2008 (particularly the second half), despite very difficult market conditions for the book-publishing industry worldwide, Lagardère Publishing proved that its economic model provided better protection against the effects of the economic crisis than that of many competitors. With a solid presence in three core language markets (English, French and Spanish) and in almost all market segments, Lagardère Publishing suffered less than its peers from the uncertain economic climate and market downturns in various regions, making it possible for Lagardère to successfully pursue growth in both sales and operating profit.

Above and beyond these structural advantages, the Group benefited from a rare bonus in the form of a sharp upward sales spiral for phenomenally successful American author Stephenie Meyer’s books. Her Twilight tetralogy sold nearly 30 million copies under various Lagardère Publishing brands across the entire spectrum of English and French language markets.

Lagardère Publishing’s book-distribution business in all countries where the Group operates also cushioned market fluctuations by controlling flows and profiting from third-party publishers' business volume without assuming their risks.

In the digital realm, Lagardère Publishing acquired the French company Numilog, which manages e-book storage and distribution platforms for the Group as well as providing the same service for third-party publishers and serving client platforms under “white-label” partnership arrangements.

In education, the Group continued to boost continuity between textbooks and their digital versions, and in the trade-book segment its efforts focused on enhancing the value of its existing brands on the Internet, a strategy that proved successful.

In the United States, the downloading of e-books – an insignificant market in 2007 – increased at a spectacular rate in 2008.

Significant events in 2008

France

2008 was a year of mixed results for Hachette Livre in France: disappointing in general literature, healthy at Larousse and in the education segment despite glum markets, and excellent in the illustrated- book segment.

Literature experienced significant setbacks compared with 2007, which saw the release of best-selling works by Dan Brown and Simone Veil plus various bestsellers dealing with the political scene.
Most publishers had a difficult time in 2008, penalized as they were by late releases (Dan Brown at Lattès), low restocking levels and high book return rates. The Stock publishing house was the only one to have a very good year, bolstered by new orders for Simone Veil's bestseller and by Jean-Louis Fournier’s Femina Prize win.

In the education segment, Hachette Education and the Hatier Group recorded very positive results despite declining textbook markets in the secondary school segment, due to a lack of reform, and in the primary-school segment, which was disrupted by the late announcement of reforms.

In the illustrated-book segment, Hachette Illustré had an excellent year again, driven by Stephenie Meyer’s phenomenal performance in the youth segment and by the ongoing superb showing of Hachette Pratique and Marabout , which released a profusion of “object” books. The Chêne and Hazan publishing houses also had numerous successful releases in the coffee-table book segment.

Turnaround efforts at Larousse continued apace despite erosion in the dictionary market, with notable success in the guide and practical-book markets, particularly in the cookbook and youth segments. Larousse’s cost structure is reaping the benefits of organizational changes introduced two years ago.

In distribution, activity levels are now in line with those of 2007, despite the departure of First Editions on 1 January 2008 and the serious impact of processing problems caused by increased numbers of returned books. In terms of organization, the industrial and commercial branch was strengthened in order to boost responsiveness to client needs and market developments.

The Group has also set up a completely restructured Internet site (Hachette.com) that meets Internet 2.0 standards, complete with interactive features, online video and user-friendly reader communities.

Also in 2008, Lagardère Publishing evaluated the carbon balance of its French activities and is set to report the results in early 2009. This evaluation will serve as a benchmark for future improvements.

In addition, at the Frankfurt Book Fair, Hachette Livre unveiled a new worldwide logo – a more contemporary, elegant design, with broader international appeal.

The United States

2008 was an exceptional year in the US, thanks primarily to the release of a veritable publishing phenomenon in the form of four young-adult novels by Stephenie Meyer. Published by Little, Brown Book Group’s teenage division, the series racked up total sales of over 25 million copies during the year on the American market alone. With this achievement, Stephenie Meyer joins a very select club – alongside such legendary writers as J.K. Rowling and Dan Brown – whose members have created unique imaginary worlds with global appeal. Two of Meyer’s books, Twilight and Breaking Dawn, appeared at the top of the year’s bestseller lists, all categories combined. A number of other highly popular works helped to briefly boost the Hachette Book Group from fifth to second place among American publishers in December of 2008, including Cross Country by James Patterson (1.2 million copies sold), The Lucky One by Nicholas Sparks (a print run of 1.2 million copies), Outliers by essayist Malcolm Gladwell (820,000 copies) and The Shack by William P. Young (4 million copies sold).

The Hachette Book Group had no fewer than 107 titles on the New York Times bestseller list in 2008, with 35 of them reaching the No. 1 spot – an achievement unparalleled in the history of American publishing. In addition, Book Business Magazine declared Hachette Book Group “the best book-publishing company to work for” in 2008.

The United Kingdom and Commonwealth

Hachette UK retained the No. 1 position among British publishers in 2008 with 15.9% market share in the general publishing market. Its share of the youth segment grew from 10.2% to 12.3%, putting the Group in second place in that market.

In fiction, Hachette UK saw 26 of its titles reach No. 1 on the Sunday Times bestseller list and maintained an average of 25% of all listed titles, a fi gure that rose to 35% during the holiday season. Linwood Barclay’s No Time for Goodbye, published by Orion, was named Bestseller of the Year with 650,000 copies sold, while more than 3.7 million copies of Stephenie Meyer’s four Twilight books were sold in the UK and Commonwealth countries. Hachette UK also had two books shortlisted for the “Man Booker Prize” for Fiction, the UK’s most prestigious literary award: The Clothes on their Backs by Linda Grant (Virago) and The Sea of Poppies by Amitav Ghosh (John Murray).

In Australia, sales were exceptional for the year, exceeding AUS 100 million for the first time.

A new subsidiary, Hachette India, was rolled out in May. A wholly-owned subsidiary of Hachette UK , Hachette India’s mission is to publish those works deemed suitable for the Indian market in English and to create a catalogue of original works by Indian authors writing in English. In the education segment, Hachette UK posted mixed results in the school market in a reform year, which was offset, however, by growth in the trade-book segments covering higher education and foreign-language manuals. In the illustrated-book market, Octopus continues to experience difficulties, particularly in the UK trade-book segment, while exports are improving thanks to US co-editions and foreign-language editions.

Spain and Latin America

In 2008, Anaya and Bruño had a good year in general publishing, the literature segment held up well at Algaida, and Alianza Editorial reaped a bumper crop of literary prizes. At Anaya , Catedra and Alianza Editorial, backlisted titles like Lazarillo de Tomes and 1080 Recetas de Cocina saw renewed success (sales of one and a half million copies), while great literary classics by J.D. Salinger, William Golding and Federico Garcia Lorca continued to sell at a sustained pace with cumulative sales of several hundred thousand copies.

A new brand, Boveda, was created for historical novels.

In the education segment, 2008 provided a favourable environment for two series: an elementary level Spanish-language line and a mathematics series for lower and upper secondary levels. Moreover, education-related legislation called for an overhaul of texts in the following segments: Educacion Infantil, 3° and 4°; Educacion Primaria, 2° and 4°; Educacion Secundaria Obligatoria; and 1° Bachillerato. In this context, the textbooks segment experienced outstanding growth of nearly 9%.

The Anaya Group’s Internet portal benefited from a complete makeover in 2008.

In Mexico, business was on the upswing at Larousse thanks to sales to the government and healthy results in the French-as-a-foreign-language segment

The serial-book market

The serial-book segment was down against 2007, particularly in mature markets in France, Italy and Spain. This decline was partially offset by solid performance in the UK thanks to the adaptation of the highly successful Tricot and Bismarck collections for this market