PRESS RELEASE: Lagardere: Lagardère SCA: Quarterly
Information - Third Quarter of 2009
Lagardère SCA (Paris:MMB) consolidated revenues for the nine months to
end September 2009 totaled EUR5,820m, representing a fall of 3.7% on a reported
basis and of 3.9% on a like-for-like basis.
The difference between the falls in revenues on a reported basis and on a
like-for-like basis was marginal. Changes in the scope of consolidation had a
positive effect of EUR93m, mainly due to the full consolidation of WSG from
January 1, 2009. This was virtually canceled out by adverse exchange rate
effects of EUR84m (fall in sterling and some Eastern European currencies against
the euro, partly offset by the rise in the U.S. dollar).
Key trends during the third quarter of 2009 on a like-for-like basis were:
-- Lagardère Publishing -
Sales still growing strongly despite a tough comparative, driven by a
very good autumn literary season in France combined with double-digit
growth in the United States despite the slowing of the Stephenie Meyer
phenomenon.
-- Lagardère Active -
Pace of contraction in revenues virtually the same as for the first
half of 2009. Broadcast faring better than Press, but still a very
mixed picture from country to country. Advertising revenues down by
some 25% on a deterioration for Magazines in France and International
Radio activities, partly mitigated by an improvement in the trend for
French Radio activities.
-- Lagardère Services -
Similar trends to the first half of 2009. Press Distribution revenues
down by just over 8.0% (or 6.5% excluding the closure of operations in
Poland), with Retail revenues holding steady.
-- Lagardère Sports -
Marked drop in revenues due to a tough comparative, less favorable
timing of sporting events than in the third quarter of 2008, and a
slowdown in business in Europe.
We are reiterating our guidance of a fall in recurring EBIT before associates
(excluding Lagardère Active) of between zero and no more than 10% at
constant exchange rates. Although economic conditions remain very tough, our
objective is to reach the upper end of this guidance range.
(1) Excluding changes in scope of consolidation and the effect of exchange
rates.
Revenues (EURm) Change Change
2009/2008 2009/2008
(reported) (like-for-like)
=-------------------------------------------------------------------------------
2009: 2009: 2009: 2008:
Q1 H1 9 months 9 months
=-------------------------------------------------------------------------------
LAGARDERE 1,778.1 3,720.0 5,819.8 6,042.0 (3.7%) (3.9%)
=-------------------------------------------------------------------------------
-Lagardère 462.8 1,009.1 1,693.7 1,563.4 8.3% 8.8%
Publishing
=-------------------------------------------------------------------------------
-Lagardère 399.2 831.2 1,226.1 1,516.4 (19.1%) (17.9%)
Active
=-------------------------------------------------------------------------------
=- Press 310.0 633.3 939.8 1,176.4 (20.1%) (19.1%)
=-------------------------------------------------------------------------------
=- Broadcast 89.2 197.9 286.3 340.0 (15.8%) (13.5%)
=-------------------------------------------------------------------------------
-Lagardère 782.4 1,618.9 2,516.6 2,613.3 (3.7%) (2.5%)
Services
=-------------------------------------------------------------------------------
-Lagardère 133.7 260.8 383.4 348.9 9.9% (12.0%)
Sports
=-------------------------------------------------------------------------------
I - Revenues
Lagardère Publishing
Revenues for the nine months to end September 2009 were EUR1,694m, up 8.3% on
a reported basis and 8.8% on a like-for-like basis. Sales grew again in the
third quarter of 2009, rising by 5.1% on a like-for-like basis.
Trends in the various regions during the third quarter of 2009 are described
below:
-- In the United States, the pace of sales growth remained very strong
through the summer at over 15% despite a tough comparative, the
success of the Stephenie Meyer saga (Breaking Dawn, New Moon,
Twilight and Eclipse) having begun in July 2008. The
main growth drivers were books by Edward Kennedy (True Compass),
Uwem Akpan (Say You're One Of Them), Kaylie Jones (Lies My
Mother Never Told Me) and Malcolm Gladwell (Outliers).
-- There was further sales growth in the United Kingdom but Spain
reported a slight dip, mainly due to lower sales in Education.
-- In France, the autumn literary season was highly satisfactory, with a
number of success stories including books by Justine Lévy (Mauvaise
fille, Stock), Frédéric Beigbeder (Un roman français,
Grasset), Alexandre Jardin (Quinze ans après, Grasset),
Françoise Sagan (Toxique, Stock), Sylvie Brunel (Manuel de
guérilla à l'usage des femmes, Grasset) and Antony Beevor (D-
Day,
Calmann-Lévy). This performance represents a marked upswing in the
quarter.
-- Partworks experienced an upturn, mainly in France and Japan.
Lagardère Active
Third-quarter revenues totaled EUR1,226m, a fall of 19.1% on a reported basis
and of 17.9% on a like-for-like basis, in line with the trend to end June (down
17.7% on a like-for-like basis).
The rate of decline in revenues (excluding the effect of discontinued and
divested titles) was in line with that recorded in the first six months of the
year. In Magazines, the third-quarter figures confirmed the trends observed
during the second quarter: the decline has stabilized in the international
business but deteriorated in France. In Radio, there is a very mixed picture
from region to region, with revenues falling in the international business but
improving in France thanks to good results at Europe 1.
Digital activities accounted for 7.3% of Lagardère Active revenues to end
September 2009 (versus 6.2% in the comparable period of 2008), in line with the
objective of 5%-10% of sales in 2009.
Press
Sales for the Magazines business for the nine months to end September 2009
were down 20.1% on a reported basis and 19.1% on a like-for-like basis at
EUR940m.
The main trends in advertising revenues in the third quarter of 2009 were:
-- A slightly less marked contraction for Magazine Publishing France than
for the international business. The drop in 2009 third-quarter
revenues in France was mainly due to a reduction in advertising spend
by the fashion industry, which hit September sales hard.
-- Stabilization in the trend for Magazine Publishing International, with
the pace of contraction still around 30%. The various regions
experienced mixed fortunes. Spain, and to a lesser extent the United
States, reported less negative trends than in the second quarter of
2009, reflecting a more flattering comparative. There were no
significant changes in trends in other countries. Market share
advanced slightly in all countries, especially in the Women's segment
(where Lagardère is strongest).
Same-title circulation revenues fell by around 5% in the third quarter of
2009, in line with the trend to end June, again with a mixed picture from
country to country. The situation continues to be better in France, where
Lagardère is still building market share.
Broadcast
Broadcast revenues for the nine months to end September 2009 amounted to
EUR286m, down 15.8% on a reported basis and 13.5% on a like-for-like basis (
versus a 15.0% fall to end June). This reflects an improvement in the third
quarter of 2009 (fall of 9.9% on a like-for-like basis), due largely to the
effect of the comparative base.
-- Radio
In France, revenues contracted by just 5% in the third quarter of 2009,
showing a very marked improvement relative to a first half that saw advertising
revenues fall by over 15%. Europe 1, which reported growth in the third quarter
of 2009, again significantly outperformed the music stations RFM and Virgin
Radio, which saw a double-digit decline. Over the nine months to end September
2009, the international radio business reported a similar trend to that seen in
the first half of the year, with a contraction of over 20%.
-- Television
The pace of contraction in Television revenues slowed in the third quarter of
2009 thanks to a recovery in program deliveries (in particular, some TV series)
at Lagardère Entertainment. Advertising revenues for digital terrestrial TV
again recorded slight growth.
Lagardère Services
Divisional sales for the nine months to end September 2009 were EUR2,517m,
down 2.5% on a like-for-like basis and 3.7% on a reported basis, which is close
to the rate of contraction reported in the first half of the year. Compared with
the nine months to end September 2008, the division has had to bear negative
exchange rate effects of EUR60m, mainly due to rises in the average rate of the
euro against the Polish zloty (28% rise) and the Hungarian forint (14% rise).
Retail (which accounts for two-thirds of Lagardère Services revenues)
held steady thanks to the opening of new sales outlets, while press distribution
revenues fell by more than 8% (or 6.5% excluding the effect of the closure of
operations in Poland).
-- Revenues at Aélia are being eroded by reduced air travel, and this
trend accelerated slightly in the third quarter of 2009. Conversely,
the slight uptrend in sales at Relay France seen in the second quarter
was confirmed, even though the print media market remained depressed.
-- Retail activities followed the same trends as in the first half of the
year: double-digit growth in Romania thanks to expansion of the store
network, limited growth in Germany and the Czech Republic, and a
decline in sales in Hungary. In Spain, the trend - though still
negative - was more favorable than in the first half of the year.
The press distribution business showed a further fall, especially in the
United States and Spain, though the decline was less marked elsewhere in Europe.
Lagardère Sports
Lagardère Sports reported sales of EUR383m for the first nine months of
2009, up 9.9% on a reported basis but down 12.0% on a like-for-like basis. The
difference between the reported-basis and like-for-like figures was mainly due
to the full consolidation of WSG from January 1, 2009.
As expected, like-for-like revenues fell in the third quarter of 2009 due to a
particularly challenging comparative (31% like-for-like growth in the third
quarter of 2008, driven by major sporting events in the period, especially the
Euro 2008 football tournament). The third quarter of 2009 was also affected by
harsher market conditions in Europe, leading to a decline in some media rights (
especially in the United Kingdom) and in sponsorship contracts.
II - Significant events affecting the financial position andresults of Lagard&
#232;re SCA at September 30, 2009
-- Recurring EBIT before associates
-- Given the trend in reported-basis consolidated revenues, Lagardère
Media EBIT before associates fell year-on-year in the nine months to
end September 2009, with the erosion in revenues at Lagardère Active
only partially offset by the cost-cutting measures announced in March
2009. For the other divisions, while Lagardère Publishing is well
ahead of budget, the situation is less favorable at Lagardère
Services
and Lagardère Sports.
-- The contribution from EADS (accounted for as an associate) was
included on the basis of a 10.0% interest through March 2009. This
percentage has been reduced to 7.5% for the rest of the year following
the delivery of the final tranche of the Mandatory Exchangeable Bonds
(exchangeable for EADS shares) to Natixis on March 24, 2009.
-- Non-recurring items mainly comprise the gain on disposal of the EADS
shares, restructuring costs at Lagardère Active, and impairment
losses
charged against certain intangible assets.
-- Net interest expense
The fall in net interest expense reflects the effect of the redemption of the
Mandatory Exchangeable Bonds in March 2009, combined with the impact of lower
interest rates.
-- Net debt
The main items impacting consolidated net debt are as follows:
-- the dividend payout of EUR194m;
-- the EUR664m proceeds from the disposal of EADS shares on redemption of
the final one-third tranche of the Mandatory Exchangeable Bond.
-- Other significant events during the
third quarter of 2009
None of Lagardère's divisions made any significant acquisitions during
the quarter.
Report of the examiner appointed by the AMF Enforcement Committee
The report of the examiner appointed by the Enforcement Committee of the
Autorité des Marchés Financiers (AMF) in connection with the
investigation into dealings in EADS shares was delivered on July 28, 2009, and
completely exonerated the Lagardère Group.
Successful bond issue
On September 24, 2009, the Group launched and set the terms of its first-ever
public bond issue. The 5-year issue, which raised EUR1bn, matures in 2014 and
bears annual interest of 4.875%. This issue has enabled Lagardère SCA to
diversify its sources of finance and extend the average maturity of its debt.
The proceeds of the issue will be used primarily to repay the syndicated loan
maturing 2012.
III - Outlook
Given a more favorable comparative (lower revenue growth in the fourth quarter
of 2008), the decline in revenues for the fourth quarter of 2009 could be less
marked than that reported in the nine months to end September.
Unlike the other divisions though, Lagardère Publishing faces a
particularly challenging fourth-quarter comparative, as the success of the
Stephenie Meyer saga drove like-for-like sales growth to 6.0% in the fourth
quarter of 2008. While the division's prospects for the final quarter of 2009
still look good, given the publication in France of Dan Brown's latest and the
new Astérix book, the pace of growth is likely to slow considerably.
For Lagardère Active, visibility remains very poor, and we can expect the
downtrend seen in the third quarter of 2009 to continue. Nevertheless, the
decline could be slightly less marked at the end of the year thanks to a more
favorable comparative.
Lagardère Services will enjoy a more favorable comparative, while a
recovery in air traffic could lead to a slight recovery in the pace of top-line
growth, especially in Asia.
Lagardère Sports is set for a difficult end to the year given the
tensions in the European media rights market (fallout from the collapse of
Setanta Sports) and, to a lesser extent, in the sponsorship market.
In light of these factors, we are reiterating the guidance for Media recurring
EBIT before associates that we issued in March 2009:
As regards Lagardère Active, we would point out that:
-- Each 1% loss of advertising revenue has a negative impact of between
EUR8m and EUR10m on recurring EBIT before associates over a full year
before any cost savings, on top of which come the unavoidable knock-on
effect of rises in some operating costs (approximately EUR35m) and the
cost of continuing with our initiatives to prepare for the future
(approximately EUR10m).
-- Cost savings arising from measures already taken and from the
additional measures announced in March 2009 (One Step Further plan)
are expected to have a positive impact of at least EUR90m in 2009. At
end September, progress on the One Step Further cost-cutting plan was
slightly ahead of forecasts.
For our other activities, we are reiterating our guidance of a fall in
recurring EBIT before associates of between zero and no more than 10% at
constant exchange rates. Although economic conditions remain very tough, our
objective is to reach the upper end of this guidance range.
Lagardère is a pure media group (books, press, broadcast, digital, travel
retail and press distribution, sports trading and sports rights), and is among
the world leaders in the sector.
Lagardère holds a 7.5% stake in EADS, over which it exercises joint
control. Lagardère shares are listed on Euronext Paris.
Lagardère SCA (Paris:MMB) consolidated revenues for the nine months to
end September 2009 totaled EUR5,820m, representing a fall of 3.7% on a reported
basis and of 3.9% on a like-for-like basis.
The difference between the falls in revenues on a reported basis and on a
like-for-like basis was marginal. Changes in the scope of consolidation had a
positive effect of EUR93m, mainly due to the full consolidation of WSG from
January 1, 2009. This was virtually canceled out by adverse exchange rate
effects of EUR84m (fall in sterling and some Eastern European currencies against
the euro, partly offset by the rise in the U.S. dollar).
Key trends during the third quarter of 2009 on a like-for-like basis were:
-- Lagardère Publishing -
Sales still growing strongly despite a tough comparative, driven by a
very good autumn literary season in France combined with double-digit
growth in the United States despite the slowing of the Stephenie Meyer
phenomenon.
-- Lagardère Active -
Pace of contraction in revenues virtually the same as for the first
half of 2009. Broadcast faring better than Press, but still a very
mixed picture from country to country. Advertising revenues down by
some 25% on a deterioration for Magazines in France and International
Radio activities, partly mitigated by an improvement in the trend for
French Radio activities.
-- Lagardère Services -
Similar trends to the first half of 2009. Press Distribution revenues
down by just over 8.0% (or 6.5% excluding the closure of operations in
Poland), with Retail revenues holding steady.
-- Lagardère Sports -
Marked drop in revenues due to a tough comparative, less favorable
timing of sporting events than in the third quarter of 2008, and a
slowdown in business in Europe.
We are reiterating our guidance of a fall in recurring EBIT before associates
(excluding Lagardère Active) of between zero and no more than 10% at
constant exchange rates. Although economic conditions remain very tough, our
objective is to reach the upper end of this guidance range.
(1) Excluding changes in scope of consolidation and the effect of exchange
rates.
Revenues (EURm) Change Change
2009/2008 2009/2008
(reported) (like-for-like)
=-------------------------------------------------------------------------------
2009: 2009: 2009: 2008:
Q1 H1 9 months 9 months
=-------------------------------------------------------------------------------
LAGARDERE 1,778.1 3,720.0 5,819.8 6,042.0 (3.7%) (3.9%)
=-------------------------------------------------------------------------------
-Lagardère 462.8 1,009.1 1,693.7 1,563.4 8.3% 8.8%
Publishing
=-------------------------------------------------------------------------------
-Lagardère 399.2 831.2 1,226.1 1,516.4 (19.1%) (17.9%)
Active
=-------------------------------------------------------------------------------
=- Press 310.0 633.3 939.8 1,176.4 (20.1%) (19.1%)
=-------------------------------------------------------------------------------
=- Broadcast 89.2 197.9 286.3 340.0 (15.8%) (13.5%)
=-------------------------------------------------------------------------------
-Lagardère 782.4 1,618.9 2,516.6 2,613.3 (3.7%) (2.5%)
Services
=-------------------------------------------------------------------------------
-Lagardère 133.7 260.8 383.4 348.9 9.9% (12.0%)
Sports
=-------------------------------------------------------------------------------
I - Revenues
Lagardère Publishing
Revenues for the nine months to end September 2009 were EUR1,694m, up 8.3% on
a reported basis and 8.8% on a like-for-like basis. Sales grew again in the
third quarter of 2009, rising by 5.1% on a like-for-like basis.
Trends in the various regions during the third quarter of 2009 are described
below:
-- In the United States, the pace of sales growth remained very strong
through the summer at over 15% despite a tough comparative, the
success of the Stephenie Meyer saga (Breaking Dawn, New Moon,
Twilight and Eclipse) having begun in July 2008. The
main growth drivers were books by Edward Kennedy (True Compass),
Uwem Akpan (Say You're One Of Them), Kaylie Jones (Lies My
Mother Never Told Me) and Malcolm Gladwell (Outliers).
-- There was further sales growth in the United Kingdom but Spain
reported a slight dip, mainly due to lower sales in Education.
-- In France, the autumn literary season was highly satisfactory, with a
number of success stories including books by Justine Lévy (Mauvaise
fille, Stock), Frédéric Beigbeder (Un roman français,
Grasset), Alexandre Jardin (Quinze ans après, Grasset),
Françoise Sagan (Toxique, Stock), Sylvie Brunel (Manuel de
guérilla à l'usage des femmes, Grasset) and Antony Beevor (D-
Day,
Calmann-Lévy). This performance represents a marked upswing in the
quarter.
-- Partworks experienced an upturn, mainly in France and Japan.
Lagardère Active
Third-quarter revenues totaled EUR1,226m, a fall of 19.1% on a reported basis
and of 17.9% on a like-for-like basis, in line with the trend to end June (down
17.7% on a like-for-like basis).
The rate of decline in revenues (excluding the effect of discontinued and
divested titles) was in line with that recorded in the first six months of the
year. In Magazines, the third-quarter figures confirmed the trends observed
during the second quarter: the decline has stabilized in the international
business but deteriorated in France. In Radio, there is a very mixed picture
from region to region, with revenues falling in the international business but
improving in France thanks to good results at Europe 1.
Digital activities accounted for 7.3% of Lagardère Active revenues to end
September 2009 (versus 6.2% in the comparable period of 2008), in line with the
objective of 5%-10% of sales in 2009.
Press
Sales for the Magazines business for the nine months to end September 2009
were down 20.1% on a reported basis and 19.1% on a like-for-like basis at
EUR940m.
The main trends in advertising revenues in the third quarter of 2009 were:
-- A slightly less marked contraction for Magazine Publishing France than
for the international business. The drop in 2009 third-quarter
revenues in France was mainly due to a reduction in advertising spend
by the fashion industry, which hit September sales hard.
-- Stabilization in the trend for Magazine Publishing International, with
the pace of contraction still around 30%. The various regions
experienced mixed fortunes. Spain, and to a lesser extent the United
States, reported less negative trends than in the second quarter of
2009, reflecting a more flattering comparative. There were no
significant changes in trends in other countries. Market share
advanced slightly in all countries, especially in the Women's segment
(where Lagardère is strongest).
Same-title circulation revenues fell by around 5% in the third quarter of
2009, in line with the trend to end June, again with a mixed picture from
country to country. The situation continues to be better in France, where
Lagardère is still building market share.
Broadcast
Broadcast revenues for the nine months to end September 2009 amounted to
EUR286m, down 15.8% on a reported basis and 13.5% on a like-for-like basis (
versus a 15.0% fall to end June). This reflects an improvement in the third
quarter of 2009 (fall of 9.9% on a like-for-like basis), due largely to the
effect of the comparative base.
-- Radio
In France, revenues contracted by just 5% in the third quarter of 2009,
showing a very marked improvement relative to a first half that saw advertising
revenues fall by over 15%. Europe 1, which reported growth in the third quarter
of 2009, again significantly outperformed the music stations RFM and Virgin
Radio, which saw a double-digit decline. Over the nine months to end September
2009, the international radio business reported a similar trend to that seen in
the first half of the year, with a contraction of over 20%.
-- Television
The pace of contraction in Television revenues slowed in the third quarter of
2009 thanks to a recovery in program deliveries (in particular, some TV series)
at Lagardère Entertainment. Advertising revenues for digital terrestrial TV
again recorded slight growth.
Lagardère Services
Divisional sales for the nine months to end September 2009 were EUR2,517m,
down 2.5% on a like-for-like basis and 3.7% on a reported basis, which is close
to the rate of contraction reported in the first half of the year. Compared with
the nine months to end September 2008, the division has had to bear negative
exchange rate effects of EUR60m, mainly due to rises in the average rate of the
euro against the Polish zloty (28% rise) and the Hungarian forint (14% rise).
Retail (which accounts for two-thirds of Lagardère Services revenues)
held steady thanks to the opening of new sales outlets, while press distribution
revenues fell by more than 8% (or 6.5% excluding the effect of the closure of
operations in Poland).
-- Revenues at Aélia are being eroded by reduced air travel, and this
trend accelerated slightly in the third quarter of 2009. Conversely,
the slight uptrend in sales at Relay France seen in the second quarter
was confirmed, even though the print media market remained depressed.
-- Retail activities followed the same trends as in the first half of the
year: double-digit growth in Romania thanks to expansion of the store
network, limited growth in Germany and the Czech Republic, and a
decline in sales in Hungary. In Spain, the trend - though still
negative - was more favorable than in the first half of the year.
The press distribution business showed a further fall, especially in the
United States and Spain, though the decline was less marked elsewhere in Europe.
Lagardère Sports
Lagardère Sports reported sales of EUR383m for the first nine months of
2009, up 9.9% on a reported basis but down 12.0% on a like-for-like basis. The
difference between the reported-basis and like-for-like figures was mainly due
to the full consolidation of WSG from January 1, 2009.
As expected, like-for-like revenues fell in the third quarter of 2009 due to a
particularly challenging comparative (31% like-for-like growth in the third
quarter of 2008, driven by major sporting events in the period, especially the
Euro 2008 football tournament). The third quarter of 2009 was also affected by
harsher market conditions in Europe, leading to a decline in some media rights (
especially in the United Kingdom) and in sponsorship contracts.
II - Significant events affecting the financial position andresults of Lagard&
#232;re SCA at September 30, 2009
-- Recurring EBIT before associates
-- Given the trend in reported-basis consolidated revenues, Lagardère
Media EBIT before associates fell year-on-year in the nine months to
end September 2009, with the erosion in revenues at Lagardère Active
only partially offset by the cost-cutting measures announced in March
2009. For the other divisions, while Lagardère Publishing is well
ahead of budget, the situation is less favorable at Lagardère
Services
and Lagardère Sports.
-- The contribution from EADS (accounted for as an associate) was
included on the basis of a 10.0% interest through March 2009. This
percentage has been reduced to 7.5% for the rest of the year following
the delivery of the final tranche of the Mandatory Exchangeable Bonds
(exchangeable for EADS shares) to Natixis on March 24, 2009.
-- Non-recurring items mainly comprise the gain on disposal of the EADS
shares, restructuring costs at Lagardère Active, and impairment
losses
charged against certain intangible assets.
-- Net interest expense
The fall in net interest expense reflects the effect of the redemption of the
Mandatory Exchangeable Bonds in March 2009, combined with the impact of lower
interest rates.
-- Net debt
The main items impacting consolidated net debt are as follows:
-- the dividend payout of EUR194m;
-- the EUR664m proceeds from the disposal of EADS shares on redemption of
the final one-third tranche of the Mandatory Exchangeable Bond.
-- Other significant events during the
third quarter of 2009
None of Lagardère's divisions made any significant acquisitions during
the quarter.
Report of the examiner appointed by the AMF Enforcement Committee
The report of the examiner appointed by the Enforcement Committee of the
Autorité des Marchés Financiers (AMF) in connection with the
investigation into dealings in EADS shares was delivered on July 28, 2009, and
completely exonerated the Lagardère Group.
Successful bond issue
On September 24, 2009, the Group launched and set the terms of its first-ever
public bond issue. The 5-year issue, which raised EUR1bn, matures in 2014 and
bears annual interest of 4.875%. This issue has enabled Lagardère SCA to
diversify its sources of finance and extend the average maturity of its debt.
The proceeds of the issue will be used primarily to repay the syndicated loan
maturing 2012.
III - Outlook
Given a more favorable comparative (lower revenue growth in the fourth quarter
of 2008), the decline in revenues for the fourth quarter of 2009 could be less
marked than that reported in the nine months to end September.
Unlike the other divisions though, Lagardère Publishing faces a
particularly challenging fourth-quarter comparative, as the success of the
Stephenie Meyer saga drove like-for-like sales growth to 6.0% in the fourth
quarter of 2008. While the division's prospects for the final quarter of 2009
still look good, given the publication in France of Dan Brown's latest and the
new Astérix book, the pace of growth is likely to slow considerably.
For Lagardère Active, visibility remains very poor, and we can expect the
downtrend seen in the third quarter of 2009 to continue. Nevertheless, the
decline could be slightly less marked at the end of the year thanks to a more
favorable comparative.
Lagardère Services will enjoy a more favorable comparative, while a
recovery in air traffic could lead to a slight recovery in the pace of top-line
growth, especially in Asia.
Lagardère Sports is set for a difficult end to the year given the
tensions in the European media rights market (fallout from the collapse of
Setanta Sports) and, to a lesser extent, in the sponsorship market.
In light of these factors, we are reiterating the guidance for Media recurring
EBIT before associates that we issued in March 2009:
As regards Lagardère Active, we would point out that:
-- Each 1% loss of advertising revenue has a negative impact of between
EUR8m and EUR10m on recurring EBIT before associates over a full year
before any cost savings, on top of which come the unavoidable knock-on
effect of rises in some operating costs (approximately EUR35m) and the
cost of continuing with our initiatives to prepare for the future
(approximately EUR10m).
-- Cost savings arising from measures already taken and from the
additional measures announced in March 2009 (One Step Further plan)
are expected to have a positive impact of at least EUR90m in 2009. At
end September, progress on the One Step Further cost-cutting plan was
slightly ahead of forecasts.
For our other activities, we are reiterating our guidance of a fall in
recurring EBIT before associates of between zero and no more than 10% at
constant exchange rates. Although economic conditions remain very tough, our
objective is to reach the upper end of this guidance range.
Lagardère is a pure media group (books, press, broadcast, digital, travel
retail and press distribution, sports trading and sports rights), and is among
the world leaders in the sector.
Lagardère holds a 7.5% stake in EADS, over which it exercises joint
control. Lagardère shares are listed on Euronext Paris.
(END) Dow Jones Newswires
11-05-090215ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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