Lagardère : Significant increase in first half results

Category

Finance

Paris, September 23, 1998

At its meeting of September 23, 1998, the Supervisory Board considered the financial statements for the six months ended June 30, 1998 presented by Jean-Luc Lagardère, chief executive officer, and Philippe Camus and Arnaud Lagardère, co-chief executive officers.

Consolidated sales rise: +10%

Consolidated sales for the first half of 1998 totaled FF 33 billion, vs. FF 30 billion for the corresponding period of 1997. This 10% increase stems principally from progress in the following segments : defense (+23%), automobile (+19%), book publishing (+10%), print media (+13%) and distribution services (+12%).

Excluding changes in group structure and exchange rates, consolidated sales increased by 7.4%, with increases of 6.0%, 17.2% and 6.1% respectively in the High Technologies, Automobile and Transit Systems and Communication/Media sectors.

Operating Income improves markedly : +16.2%

Operating income totaled FF 1,610 million, a 16.2% increase from first half 1997. This increase was attributable to :

  • The High Technologies sector, in which operating income increased by 20.7% to FF 927 million, mostly reflecting progress made on certain major export contracts.
  • The Automobile and Transit Systems sector, in which operating income totaled FF 238 million, up 44%, following the commercial success of the new generation of the Renault-Espace minivans.
  • The Communication/Media sector, in which operating income totaled to FF 509 million, following a small rise of 1.8% from first half 1997. Operating income for the first half of 1998 includes non-recurring expenses (FF 50 million) incurred to revive ” L’Evénement du Jeudi “, which is not included in Hachette Filipacchi Medias’ consolidation. Two divisions – Distribution Services, and Broadcasting, Film and Display – recorded strong increases, while Multimedia Grolier’s contribution fell as a result of significant investments, particularly in activities associated with the Internet.

The table below summarizes key figures from the consolidated statement of income.

(in millions of French francs)

June 30 1998

June 30 1997

Dec. 31 1997

Sales

33,016

30,009

65,903

Operating income

1,610

1,385

3,989

Net financial income (loss)

9

(41)

(121)

Income on ordinary activities

1,619

1,344

3,868

Non-operating income (expenses)

51

(185)

(462)

Income tax

(833)

(380)

(1,266)

Other items

(127)

(147)

(335)

Consolidated net income

710

632

1,805

Net income

544

463

1,380

Net income increases significantly: +17.5%

Income on ordinary activities totaled FF 1,619 million (+20.5%), after including net financial income of FF 9 million.

Consolidated net income includes non-operating income of FF 51 million and income tax of FF 833 million.

Non-operating income includes principally the capital gain realized on the sale of MET to Ericsson, and costs incurred to discontinue operations in mobile telephone terminals, which were reduced by the capital gain realized as a result of the agreement signed with Nokia at the end of June 1998.

The income tax expense for first half 1998 increased in line with earnings. Moreover, in the first half of 1997, Lagardère’s tax consolidation showed tax loss carry-forwards, which reduced the tax expense for that period.

Net income, after deducting minority interests, totaled FF 544 million, an increase of 17.5% on the corresponding period of 1997.

Forecasts for 1998 confirmed

As announced earlier, net income for the full year 1998 should increase significantly.


Lagardère’s Stockholders and Public Information Department is open to visitors at 121 avenue de Malakoff, 75216 Paris, France, and can be reached by telephone at (33.1.

40.69.20.73). Information on the Group may also be obtained through the French Minitel service (3615 – LAGARDERE) or ECOFIL (3615-COB), and through Internet  //www.lagardere.fr

Press Contacts :

Thierry FUNCK-BRENTANO - Tel. 33 1 40 69 16 34

Jean-Pierre JOULIN - Tel. 33 1 40 69 18 04

Roland SANGUINETTI - Tel. 33 1 40 69 16 74 - Mail : presse@lagardere.fr

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