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Investor Day – January 25, 2007 (copie)



Paris, January 25, 2007

Arnaud Lagardère has invited the financial community to meet the new Lagardère Active Media management team, and to hear a presentation about the division’s aims and objectives.

Lagardère Active Media

The division is engaged in a three-year process designed to:

1. Return our Magazines business to the path of profitable growth.
2. Build the foundations of a new division, Lagardère Active Media, whose mission will be to become a leading player in content generation (especially digital) and content aggregation in the markets where we operate.

Combining HFM and Lagardere Active will enable us to meet these ambitious objectives.

Pulling together existing skills, resources and content will enable us to create broad international content portfolios, especially in digital.
The future growth of the division will be largely dependent on digital content, and we intend to accelerate production of this type of content over the coming years.
In addition, in response to the changing needs of our advertiser clients, merging our advertising sales houses should enable us to provide a more comprehensive and innovative cross-media offering.
Finally, the cost savings generated by combining the two entities should help us resist better the current slowdown in growth in the magazines sector.

Didier Quillot has carried out a comprehensive review of the division’s strengths and weaknesses in its markets, and will be presenting his conclusions (available together with the rest of his presentation at

This review has led to the development of a new 6-point strategy:

1. Introducing a new management team and a new organizational structure for the division, and embedding a new corporate culture geared more towards marketing and digital.

2. Rationalizing the business portfolio.

    a. Further magazine closures are likely, which will in most cases cause negative revenue growth and operating losses. The full-year impact on recurring EBIT on a 2006 basis* will probably be about +€7m (on about – €90m of revenues).
    b. Some international operations which are too small and not profitable enough will be sold and replaced by licensing agreements. The full-year net impact of these measures on a 2006 basis* is expected to be about – €40m on revenues and +€1m on recurring EBIT.
    c. Finally, the division will pursue the refocusing policy started in 2006. The impact of the sale of the photo agency business, regional press and some other activities, once completed, is likely to be – €260m on revenues and + €4m on recurring EBIT (full-year 2006 basis*).

3. Improving profitability, which should bring full-year savings of some €70m between now and end 2009.

4. Boosting the core Magazines, Radio and Audiovisual businesses.

5. Merging the Interdeco (HFM) and Lagardere Active advertising sales houses.

6. Implementing an ambitious digital strategy, combining organic growth and acquisitions. By the end of 2009 – again on a full-year basis – digital revenues are projected to represent between 5% and 10% of Lagardère Active Media revenues, depending on our ability to make acquisitions (against less than 1% in 2006, based on unaudited data). These revenues should generate EBIT margin better than that on print magazines.

Transformation costs for the division (cumulative, 2007-2009) are in a range from €80m to €100m.

By 2010, the new management team is aiming to have:

    * improved the profitability of the division;
    * completed the digital transformation as regards content and sites;
    * succeeded in developing a strong cross-media presence in 5 or 6 worldwide audience categories.


Effective January 1, 2007, the Lagardère Group will apply the allowed alternative treatment provided by IAS 31 (Interests in Joint Ventures) of accounting for interests in jointly-controlled entities using the equity method instead of the proportionate consolidation method.

The most significant entities affected by this change in method will be:
– the EADS Group;
– in the Distribution division: Société de distribution aéroportuaire (SDA);
– in the Press division: Version Femina, Psychologies Magazine, Hachette Marie Claire Italia, Elle Verlag, Disney Hachette Press;
– in Lagardere Active: Jeunesse TV (Gulli);
– in the Books division: Harlequin.

The impact on revenues and recurring EBIT is shown below:

  2005 actuals
€m Revenues Recurring EBIT Margin %
Books 1,644 189 11.5 %
Press 1,863 161 8.7 %
Distribution 3,773 106 2.8 %
Active 621 47 7.5 %
Media 7,901 503 6.4 %

  2005 pro-forma
(excl. proportionately-consolidated entities)
€m Revenues Recurring EBIT Margin % Change
Books 1,631 187 11.5 % 0.0 %
Press 1,772 151 8.5 % -0.2 %
Distribution 3,704 100 2.7 % -0.1 %
Active 615 49 8.0 % 0.5 %
Media 7,722 487 6.3 % -0.1 %

These changes will have no impact on EPS.

* unaudited estimates

The Lagardère Group is a market leader in the media sector (books, distribution, press and audiovisual). The Group also has interests in the high technology sector via a 14.98% stake in EADS.
Lagardère shares are listed on Eurolist by Euronext Paris – Compartment A.

Press Contacts :

Thierry Funck-Brentano - Tel. 33 1 40 69 16 34 -

Arnaud Molinié - Tel. 33 1 40 69 16 72 -

Investor Relations contact

Laurent Carozzi - Tel. 33 1 40 69 18 02 -

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