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Lagardère 2003-2012

Ten years of transformation

Refocus on Media

2

2003 Organisation

3

Lagardère 2003-2012 / Ten years of transformation

15.04% 100%

100%

34%

99.3%

100%

Lagardère SCA Bank Arjil & Cie

100%

High Tech

EADS

Media & communication

Hachette Livre

Hachette Filipacchi Médias

Lagardère Active Broadcast

MultiThématiques

Lagardère Active Broadband

Hachette Distribution Services

CanalSatellite

27.4%

2012: a Group organised around four major divisions, fully owned

+ two main minority stakes:

: final exit (7.4%) expected in 2013.

France: 20% stake.

4

Lagardère SCA

100% 100% 100% 100%


5

2003-2012 evolution: breakdown of net sales

*Proportional consolidation (15.04%). / **Lagardère Active Broadcast and Lagardère Active Broadband.

2003 2012

16% Hachette

Filipacchi

Médias

36%

8% Hachette

Livre

5% Lagardère

Active**

35% Hachette

Distribution Services

*

52%

28%

14%

6%


6

2003-2012 evolution: breakdown of recurring EBIT before associates

*Proportional consolidation (15.04%). / **Lagardère Active Broadcast and Lagardère Active Broadband. / ***Negative recurring EBIT for Lagardère Unlimited in 2012.

35%

16% Hachette

Livre

31% Hachette

Filipacchi

Médias

4% Lagardère

Active**

14% Hachette

Distribution

Services

*

2003 2012

27%

16%

***

57%


Consolidation of leadership

positions and expansion in

new business areas

7

8

2003-2012: a changing media value chain

RIGHTS AND CONTENT

AGREGATION DISTRIBUTION

Value Digital

Print challenged &

audience

fragmentation

Invest Consolidate &

Digital

Develop non

print

Our strategy:


9

The 2003-2012 strategy conducted by M&A activity…

SDA (JV with ADP)

Vivendi Universal Publishing

Hodder Headline Time Warner Book Group

Newsweb

Sportfive

Doctissimo

World Sport Group

Duty Free in Eastern Europe

Travel Retail in Czech Republic DFS Wellington

AdR Retail (Rome)

LeGuide.com

BilletReduc

French newspapers

International Magazine Publishing (PMI)

Virgin stores

Acquisitions Disposals

Invest in rights and content

Develop non print: Travel Retail

Digital

Consolidation of leadership

Exit from challenged activities & weak positions

Exit from print-related

Divest non core activities


Lagardère Unlimited US

EADS

T-Online

NMPP*

*Nouvelles Messageries de la Presse Parisienne.

… delivered significant profile evolution…

*Duty Free, Digital, TV Production, Lagardère Unlimited, DTT channels, Emerging markets.

**Partworks, Reference, Practical guides, Digital (Lagardère Active), TV Production, licensing, Lagardère Unlimited.

10

0%

20%

40%

60%

80%

100%

High growth

Nonadvertising

Non paper

Digital (Excl.Services)

Rights andcontent

Emergingmarkets

+11 pts

+6 pts

+18 pts

+8 pts

+20 pts

+8 pts

2003

2012

*

**

As % of net sales

Digital

(Excl. Lagardère Services)


-230%

-180%

-130%

-80%

-30%

20%

70%

120%

170%

220%

2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual GDP growth rate (global) Annual ad market growth (global)

Peers margin evolution Lagardère margin evolution

… with proven results

Despite economic crisis, the Lagardère group operating margin remained

stable, while media peers endured a two points margin drop over the period.

Strong

resilience in

2009

Lagardère margin: flat

Peers margin: -2 pts

GDP (global): +0.4 pt

Adv. Market (global): -0.9 pt

2003-2011 change:

100

basis

Source: brokers and peers financial information. 11


2003-2012: Success Stories

sample

12

13

Lagardère Publishing : from world #13 in 2003 to world #2 in trade publishing

2m+ +2m 116m 5m +6m 11 m +

6m 153m 64m 19m

+2m

Number of copies sold

+7m

France Worldwide France Worldwide

2m+ 1.6m

France UK

France USA USA Worldwide Spain


14

Lagardère Publishing: successful transition to digital

1st publisher in the world to sign an agreement with

Google protecting authors’ and publishers’ rights.

#1 supplier of e-books to the United Kingdom

market.

#1 US publisher to sell more than 10m e-books

by the same author (James Patterson).

A strategy aimed at maintaining the publisher’s

position on the book value chain


15

Elle, a leading and prestigious global brand (1/2)

2012

Worlwide in 2012:

54 200 ad pages: #1 worlwide, 30% market share(1)

21m readers 6.6m copies sold/month

(1)High-end women’s magazine segment.

Worlwide in 2012:

10 900 ad pages: #1 worlwide 10m readers

2003

Paid circulation Elle France: Nb of weekly copies

321K 384K

Ad sales in France: €63m

International editions : 58 76

€59m

International editions

sales : €351m €465m


16

Elle, a leading and prestigious global brand (2/2)

Successful diversification:

Nb of product categories x3 in 10 years

Elle products in 80 countries in 2012

(vs. 40 in 2003)

20 000 sales outlets (30% exclusive

stores and dedicated corner stores)

Elle shops, clothes, shoes, kitchen

utensils, Elle coffee-shop (Vietnam),

Elle cosmetics, Elle cars…


17

Aelia: success story of a major player in Travel Retail (1/2)

2003 2012

Net sales (€m)

Nb stores: 126 294

Countries: 1 15

Retail

Space: 13K sqm 54K sqm

Addressed

Traffic: 55m pax 200m pax

427

1,021

10.2% CAGR*

*Compound Annual Growth rate.


18

Aelia: success story of a major player in Travel Retail (2/2)

Best Beauty new

store 2007

Roissy CDG

Best new Fashion &

Leathergoods store 2011

The Fashion Gallery,

Singapore Changi Airport

“Best confectionery

store worldwide

(Dreamstore)” 2012

So Chocolate,

Singapore Changi

Airport


19

Lagardère Unlimited: creation of a leading market position worldwide

since 5 years (1/2)

Emerging markets

38%

High exposure to emerging markets:

2012 net sales breakdown Key positions:

#1 in football in Africa

Leader in sports rights in Asia

#1 in comprehensive marketing for

football clubs in Europe

Key partnerships:

AFC (1) , CAF (2) , IAAF (3) , WTA (4)

20+ football clubs in Europe

(1) Asian Football Confederation. (2) Confederation of African Football. (3) International Association of Athletics Federation. (4) Women’s Tennis Association.

56% 6%

21% 8%

5%

3%

1%

Eastern Europe Western Europe

USA

Latin America

Middle East

Africa ASPAC


20

Lagardère Unlimited: creation of a leading market position worldwide

since 5 years (2/2)

Asia’s largest sports marketing, media

and event management company.

Over 150 employees in 8 offices across

Asia.

Global Network with 300+ partners.


2003-2012: a sound financial

policy

21

22

Balanced and long-term driven cash policy

Cash flow : cumulative 2003-2012

€2.6bn returned to shareholders Cumulative cash

generated by

operations and

disposals

Cumulative

use of cash

Disposals

CF from

operations

Organic growth

Acquisitions

Other

Return to sharholders

Deleveraging €6,635m

24%

€4,447m

5%

26%

37%

7%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Share buyback Dividend

419

500

276

173 167 169

501

179 130

Exceptional dividend

166


23

A level of debt adjusted to the activity and to the economic environment

Well diversified funding sources over the period

Sound financial situation

1,901 1,699

1,120

2,045

2,570 2,619

1,824 1,772

1,269

1,700

0

500

1 000

1 500

2 000

2 500

3 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

€m

Net debt excluding EADS (2002 to 2006) and ORAPA (2006 to 2008)

64%

27%

9%

Gross debt breakdown in 2003

Bonds

Bank loan

Other65%

28%

7%

Gross debt breakdown in 2012

Average:

€1,852m


Sustainable Development

and Corporate Governance

24

2003-2012 Achievements

Continual focus (media,

social networks, etc.)

Environment

is changing

deeply

25

2003-2012: Lagardère adapts to an increasingly demanding

environment

*Corporate Social Responsibility.

Observers

Keener awareness of environmental, ethical and social challenges

Growing

expectations of

employees,

shareholders,

etc.: transparency

(governance),

risk management

(environmental

risks, reputational

risks, etc.),

ethics, CSR* 1 Corporate governance:

improve and observe good

practices.

Sustainable development:

setting up a CSR organisation and

introducing pragmatic policies

tailored to the Group's businesses.

More stringent

regulatory

requirements (New

Economic

Regulations Act,

Grenelle

Environment

Forum)

Lagardère has moved

into position to answer

these challenges:

1

2


A renewed Supervisory Board with more women and increased independence

Compliance with the AFEP-MEDEF corporate governance code

26

Corporate Governance: improve and observe

good practices 1

New Chairman (independent) since 2010.

Composition: diverse backgrounds and complementary expertise.

Smoother functioning:

• creation of an Appointments and Remuneration Committee in 2010:

– organisation of a procedure for selecting new members.

• shorter terms of office;

• introduction of a self-assessment policy confirmed by an external evaluation.

2003 2012

50% 87% Independent members:

0% 33% Women:


27

Sustainable Development: setting up a CSR organisation and

introducing pragmatic policies tailored to the Group's businesses 2 Regulatory

requirements Expectations of employees

& stakeholders

Increasing use of certified paper from sustainably managed forests:

– 75% for Lagardère Publishing;

– 100% for Lagardère Active magazines.

Energy efficiency campaigns.

Carbon assessment in several divisions: Lagardère Publishing, Lagardère Active, Lagardère Services (Relay).

Drawing up a charter and codes for the Group's partners.

The first publisher to display carbon and origin of paper labels on its books.

Heightened social commitment (Jean-Luc Lagardère Foundation, Elle Foundation).

Rallying employees to support corporate social responsibility efforts.

Talent management project and diversity at Lagardère Active.

1 - Affirm our reputation as a responsible employer

2 - Develop our businesses with respect for the environment

3 - Promote information access and awareness

4 - To be a media group that creates social ties

Four priorities


2012 Full-Year Results

March 7, 2013

28

2012: a significant step

forward

29

30

Multi-party agreement signed on December 5, 2012, clearing the way for EADS’ governance and shareholding structure to be streamlined.

The EADS Extraordinary General Meeting will be held on March 27, 2013.

Lagardère expects to sell all its EADS stake before July 31, 2013, probably through a share buyback program for the most part, and directly on the market for the remaining part.

Proceeds will be used for an exceptional cash return to shareholders and for deleveraging.

Expected sale of EADS (7.4% stake)

Strengthened long term financial solidity

€500m bond successfully issued in October 2012:

• lengthened debt profile maturity; • maintained liquidity on the long run.

2012 Full-Year Results / March 7, 2013

31

Canal+ France


Legal action on February 13, 2013, against Vivendi and Groupe Canal+ for the purpose of obtaining a restitution of €1.6 billion in cash to Canal+ France:

• Lagardère believes that Canal+ France cash management agreement is legally contestable and that the use made by the Vivendi group of the latter has caused significant harm to Canal+ France;

• appearance in the Paris commercial court on March 21, 2013.

Canal+ France IPO:

• this situation has caused a deadlock preventing Canal+ France, as things stand, from going ahead with an IPO in normal conditions.

32

M&A activity in 2012 is in line with our growth strategy

Digital LeGuide.com (shopping

comparator)

BilletReduc.com (online

ticketing)

Travel

Retail

AdR Retail (Rome)

DFS Wellington (Duty Free in Autralia and New Zealand)

UG-Air (Duty Free in Prague)

Rights &

Content

Zaechel (sport events promotion & hospitality)

SMAM (sports marketing rights consultancy in Australia)

Gaylord Sports Management (athletes representation in the US)

Acquisitions Disposals

Declining

business OLF (book distribution

in Switzerland)


33

Successful integration of acquired companies

Net sales:

+16% in 2012 (like-for-like)

+24% in Q4 2012 (like-for-like)

AdR Retail Increase in sales and significant

improvement of SPP* despite less

favourable traffic figures.

Initial targets exceeded.

*Sales per passenger.

Good performance, in line with

expectations


2012 Business highlights

34

35

US: 23% of net sales (+15% vs. 2011).

UK: 23% of adult trade net sales (x2 vs. 2011).

Settlement with the DoJ and European Commission: agency model preserved.

General Literature: another great vintage

UK: 20 #1 titles in Sunday

Times’ best-seller list.

US: 30 #1 titles in New York

Times’ best-seller list for printed

books and 6 titles for e-books.

800k 400k

E-books keep growing

UK, USA, France

France France


36

2012 competitive positions in France:

Development in digital through new business models.

Development of licensing activities: +11% in 2012.

TV Production: confirmed position after a strong increase in 2011.

Leadership maintained in a challenging environment

1st magazine publisher

1st audiovisual production group

1st TV offer for Children & Family

1st media group on the web and mobile phones

Continued expansion in new businesses


37

Dynamic organic growth and modernization of sales outlets:

• opening of new terminals in Roissy CDG, new Fashion concession in Xi’an (China), gain of Specialty outlets in Malaysia, of Food Services concession in Frankfurt train station, Dallas, Los Angeles and Chicago airports…

• gain of convenience outlets for the SNCF in France, renewal of the Eiffel Tower souvenirs concession in Paris…

• continued development of new concepts: iStore, Tech2go, Hubiz , Trib’s…

Strong momentum in Travel Retail

up 8.2%

Travel Retail

net sales

France: +15% for Aelia

UK: +10.7%, Germany: +8.8%

Asia: +32.5%

Central Europe : +13.4%

Passenger traffic*: +4.2% worldwide

+7.3% in ASPAC

*Source: ACI data at October 31, 2012.


38

Strong project momentum:

Decreased exposure to premium media rights in Europe: • investment in other business models;

• total exposure decreased by -6 pts in 2012 vs. 2011.

Continued business development for Lagardère Unlimited

• successfully relaunched the UAFA Arab cup (football);

• managed the media and marketing rights of the

Orange Africa Cup of Nations;

• enlarged its portfolio of exclusive commercial

relationships with German and French football clubs;

• expanded its talent representation practice

in the US;

• reinforced its Stadium and Arena and

Entertainment businesses international footprints.


2012 Performance

39

Activity remained stable despite a challenging environment:

€7,370m (-0.2% like-for-like)

Recurring media EBIT slighlty above guidance: €358m (+€3m, i.e. +0.8%)

Cash from operating activities sharply up: €391m vs. €257m in 2011

Dividend maintained: 1.30€ per share*

40

2012 results illustrate the resiliency

of our Group

*To be approved by the General Shareholders’ Meeting on May 3, 2013.


75

85

95

105

115

125

Lagardère

CAC40

DJ Stoxx Media

Lagardère stock outperformed the market

and the media index

100

basis

Lagardère: +23.9%

CAC 40: +15.2%

DJ Stoxx Media: +17.4%

2012 performance:


41

2013 Outlook

42

In 2013, the Media recurring EBIT before associates is expected to increase by between 0% to 5% at constant exchange rates, compared to 2012.

This guidance is based notably on the assumption of a circa 5% decrease of advertising sales for Lagardere Active.

43

Guidance 2013


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