LAGARDÈRE SCA 2007 Full-Year consolidated revenues up 8.5%

Lagardère SCA consolidated revenues for the year ended December 31, 2007 totaled €8,582m, an increase of 8.5% on a reported basis and 3.3% on a like-for-like basis.

• Lagardère Publishing (formerly the Books division) – Excellent quarter in virtually all the countries in which we operate. Sales were particularly robust in the United Kingdom, driven by a raft of successful fiction and non-fiction titles. The very strong growth in the United States since January 2007 was maintained. In France, Literature and Illustrated Books both ended the year strongly.
  
• Lagardère Active (formerly the Press and Audiovisual divisions) – In Magazines (78% of the division’s sales), revenues held up despite the impact of discontinued titles and a tougher advertising market, especially in France. Broadcast activities had a very fine quarter, helped by an excellent performance from International Radio activities and a catch-up in TV Production. Once again, Radio activities in France (especially Europe 1) were hit by retailers switching part of their budgets away from radio, in a deteriorating advertising market.
  
• Lagardère Services (formerly the Distribution Services division) – Very good fourth quarter across virtually all activities. The established growth segments – travel retail in Europe and Asia, and retailing in Central Europe – saw accelerated growth. Wholesale activities, especially in Belgium, Spain and Poland, are still on a downtrend.
  
• Lagardère Sports – The performance was in line with acquisition forecasts.

I – Revenues

Excluding changes in Group structure and the effects of exchange rates, consolidated revenues rose by 3.3% in 2007 to €8,582m. On a constant structure basis but without adjusting for the effects of exchange rates, the increase was 2.2%.

Lagardère Publishing

Revenues reached €2,130m (up 8.6% on a reported basis), including an extra quarter of sales from the Time Warner Book Group (impact: €80m), which in 2006 was consolidated from April 1.
On a like-for-like basis, an excellent final quarter propelled full-year revenue growth to 4.7%, versus 3.0% to end September 2007.

In the United Kingdom, the year ended with a surge in sales. The group published 7 of the top 10 Christmas non-fiction best-sellers (including Bobby Charlton, Russell Brand and Al Murray), and 5 of the top 10 fiction titles (including Martina Cole and Patricia Cornwell).
In the United States, the strong growth seen since the start of the year continued, driven by best-sellers (including Patterson, Baldacci, Hitchens and Meyer) and healthy backlist sales.
In France, the fourth quarter was boosted by a fine contribution from Literature, thanks to authors such as Simone Veil and Philippe Claudel. Illustrated Books also enjoyed solid year-end sales.
In Spain, sales are traditionally sluggish in the final quarter. Over 2007 as a whole, Spain recorded further strong growth not only in Education, but also in General Publishing and Children’s Books.
Finally, Part-Works ended the year well, with steady sales growth in Italy, the United Kingdom and Japan.

Lagardère Active

The division posted full-year like-for-like revenue growth of 1.7%, following a decent final quarter (versus 1.6% to end September 2007). On a reported basis, full-year revenues were down by 1.8% (versus a 3.4% fall to end September 2007), at €2,291m. The main reasons for the drop in revenues were the change to equity accounting for Cellfish (€74m of revenues to end September 2006, when Cellfish ceased to be fully consolidated), and adverse currency effects (the average dollar/euro exchange rate fell by 8.4% over the year). Overall, currency effects had a negative impact of €49m on the division.

Press

Full-year revenues for the Magazines segment rose by 1.7% on a reported basis to €1,782m. Revenues were also higher on a like-for-like basis, by 1.3% over the full year (versus 1.8% to end September 2007).

Fourth-quarter like-for-like revenues remained flat. The main trends during the quarter were:

• Very strong sales growth in Russia and China, especially in advertising.
• A not insignificant negative impact from the discontinuation of titles, of €7.1m in the fourth quarter and €31m over the year as a whole.
• Fine sales growth in the United Kingdom, driven mainly by women’s magazines.
• A good performance from women’s magazines, especially Elle, in virtually all countries.
• Further decline in the lads’ mags segment and in advertising revenues at Télé 7 Jours.
• Tough conditions in the French advertising market.

Broadcast & Broadband

Full-year revenues from the Broadcast & Broadband business were €509m, down 12.6% year-on-year on a reported basis (versus a 19.8% fall to end September 2007). This fall was due partly to disposals (the DMLS TV production company and La Chaîne Météo, which were still consolidated in 2006), but mainly to the change from full consolidation to the equity method in accounting for Cellfish, due to financial investors acquiring an interest in the company.
On a like-for-like basis, revenues rose by 2.9% (versus 0.8% to end September), following a good final quarter.

Radio
In France, where full-year revenues fell by 6.7% (compared with a 4.2% fall to end September), the switch of retailers’ advertising budgets from radio to the established terrestrial TV channels continued. The negative effect was compounded by a weakening advertising market. Europe 1 and RFM were particularly affected, but the recovery at Europe 2 – now rebranded as Virgin Radio – is continuing.
International radio activities saw a further acceleration in an already rapid pace of growth, with full-year revenues up 25.8% (versus 22.7% to end September), once again driven mainly by Russia. Revenues outside France accounted for 42% of the Lagardère Group’s radio revenues over the full year.

Television
TV Production, which in the first half was affected by delays in deliveries (leading to a 9.2% fall in revenues to end September), made up the lost ground after a very good fourth quarter, leaving full-year revenues only 0.2% down.

Theme channels continue to suffer from the cut in subscriber-based royalties paid by the new platform created by the CanalSat/TPS merger, though the effect was once again offset by good growth in digital terrestrial TV revenues. Overall, full-year revenues rose by 3.0%, versus a 1.9% rise to end September 2007.

Lagardère Services

The division enjoyed a very good fourth quarter, with full-year revenues up 3.5% on a like-for-like basis (or 2.9% on a reported basis) at €3,721m, compared with a rise of 2.7% to end September 2007 (or 2.3% on a reported basis).

We are actively pursuing our strategy of transition towards retail activities in Eastern Europe and Asia (where growth rates and margins are higher than in wholesale), helped by favorable economic conditions.

• In France, Aelia posted a further acceleration in growth, and Virgin reported a fine performance.
• In retail, the trends seen since the start of 2007 were unchanged, with solid growth in Germany, Belgium, Switzerland and Spain, and very strong performances in Eastern Europe (Poland, Romania, Czech Republic, Hungary). 
• Growth also remains very robust in Asia.
• The Relay chain reported higher sales, but growth was hampered by the French transport strikes in November, despite a good performance in October and December.
• As in the first nine months, wholesale activities were in decline in Poland, Spain and Belgium.

Lagardère Sports

Lagardère Sports has been contributing to Lagardère SCA consolidated revenues since January 1, 2007, adding €440.0m to the top line during the year ended December 31, 2007.
Sportfive, the division’s main contributor, had a reasonable fourth quarter, the main feature being further qualifying matches for the Euro 2008 football tournament (on a similar level to the fourth quarter of 2006). There were no major one-off sporting events in the latter part of 2007.

II – Outlook

The solid revenue growth achieved during 2007 offers the clearest confirmation yet of our target for full-year growth in recurring EBIT before associates for Media activities, which we still expect to be in the
“5% to 8%” range, based on the same parameters as for our previous guidance:

• euro/dollar exchange rate of 1.30;
• excluding the first-time consolidation of Lagardère Sports.

The Lagardère Group is a market leader in the media sector (books, press, audiovisual, distribution of cultural and entertainment products, and sports rights). The Group also has interests in the high technology sector via a 12.51%
stake in EADS.
Lagardère shares are listed in Paris on Eurolist by Euronext – Compartment A.

(*) Excluding changes in Group structure and the effects of exchange rates.