INVESTOR PRESENTATION
December 2016
DISCLAIMER
Certain statements contained in this document are forward-looking statements (including objectives and trends), which address our
vision of the financial condition, results of operations, strategy, expected future business and financial performance of Lagardère SCA.
These data do not represent forecasts within the meaning of European Regulation No. 809/2004.
When used in this document, words such as “anticipate”, “believe”, “estimate”, “expect”, “may”, “intend”, “predict”, “hope”, “can”, “will”,
“should”, “is designed to”, “with the intent”, “potential”, “plan” and other words of similar import are intended to identify forward-looking
statements. Such statements include, without limitation, projections for improvements in process and operations, revenues and
operating margin growth, cash flow, performance, new products and services, current and future markets for products and services
and other trend projections as well as new business opportunities.
Although Lagardère SCA believes that the expectation reflected in such forward-looking statements are reasonable, such statements
are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a
number of risks and uncertainties, many of which are outside our control, including without limitations:
• general economic conditions, including in particular growth in Europe and North America;
• legal, regulatory, financial and governmental risks related to the businesses;
• certain risks related to the media industry (including, without limitation, technological risks);
• the cyclical nature of some of the businesses.
No representation or warranty, express or implied, is made as to, and no reliance should be placed upon, the fairness, accuracy,
completeness or correctness of such forward-looking statements and Lagardère SCA, as well as its affiliates, directors, advisors,
employees and representatives accept no responsibility in this respect.
Please refer to the most recent Reference Document (Document de référence) filed by Lagardère SCA with the French Autorité des
marchés financiers for additional information in relation to such factors, risks and uncertainties.
Accordingly, we caution you against relying on forward-looking statements. The forward-looking statements abovementioned are made
as of the date of this document and neither Lagardère SCA nor any of its subsidiaries undertake any obligation to update or review such
forward-looking statements whether as a result of new information, future events or otherwise. Consequently neither Lagardère SCA
nor any of its subsidiaries are liable for any consequences that could result from the use of any of the above statements.
2
TABLE OF CONTENT
1) Group profile
Slide 5
2) Group strategy
Slide 9
3) Group performance in H1 2016
Slide 17
4) Guidance and dividend
Slide 28
Appendix: Business updates
Slide 30
INVESTOR PRESENTATION
APRIL 2016
3
GROUP
PROFILE
A DIVERSIFIED GROUP WITH LEADING GLOBAL BRANDS AND MARKET POSITIONS
*
World #3 Trade book publisher
#1 in France, #2 in the UK,
#3 in Spain, #4 in the US
A multi-segment publisher
Trade & Illustrated books,
Education, Partworks
A leading digital player
World #4 in Travel Retail
Leading magazine publisher
More than 4,500 shops in over
30 countries and 220 airports
worldwide
15 French titles
81 international editions under
license
Strong expertise in
three business lines
French #1 TV audiovisual producer
Travel Essentials, Duty Free &
Fashion, Foodservice
To be divested :
Press Wholesale Distribution
Leader in football in Africa, Asia,
England, France and Germany
Leader in sports marketing
in Asia and Africa
France leading Internet & mobile
media group
Major player in Radio in France
*Lagardère Services changed its name to Lagardère Travel Retail in July 2015. It still includes revenues from the Distribution division, to be sold.
Leader in the representation of golf
players worldwide
5
A WORLDWIDE FOOTPRINT WITH AN INCREASING PRESENCE
IN NORTH AMERICA
Breakdown of revenue by geographic area in 2015
35%
32%
34%
34%
12%
13%
10%
10%
7%
2014
2015
France
2014
2015
Western
Europe
2014
2015
Eastern
Europe
2014
2015
USA
& Canada
2014
8%
2015
Asia-Pacific
2%
3%
2014
2015
LATAM,
Middle East,
Africa
6 6
A DIVERSIFIED BUSINESS MIX
Breakdown of revenue by division in 2015
Lagardère Sports and Entertainment
5%
Lagardère Sports and Entertainment
7%
Lagardère
Active
13%
Lagardère
Travel Retail
49%
Breakdown of Recurring EBIT by division in 2015
Lagardère
Publishing
31%
Lagardère
Active
20%
Lagardère
Publishing
49%
Lagardère
Travel Retail
26%
7
7
GROUP
STRATEGY
BUSINESSES GROWTH PROFILE
Growth potential
A 3 pillars strategy
Invest
Digital
Sports &
Entertainment
Travel Retail
3
TV Production
Adapt
Distribution
Broadcasting*
Book Publishing
2
1
Magazines
Divest
INVESTOR PRESENTATION
APRIL 2016
*Radio + TV channels.
Market position
N.B
:
Size proportional to revenue.
9
1
REDUCE EXPOSURE TO DECLINING ACTIVITIES
Press Distribution and Integrated Retail
February 2015
June 2015
Disposal of Swiss Distribution business (ex Payot Naville Distribution)
Disposal of US Distribution business (Curtis)
February 2016
Disposal of Spanish Distribution business (SGEL)
February 2016
Announcement of Belgium Distribution business disposal
Magazines
January 2016
Parents magazine disposal
The disposal of the remaining Wholesale Press Distribution and Integrated Retail activities
(in Hungary and Canada) is a major priority. The divestment process is almost achieved.
10
2
ADAPT EXISTING ACTIVITIES AND ENHANCE LEADERSHIP POSITION
Lagardère Publishing
 Successful management of the ebook impact with the preservation of the pure agency model (retail
price controlled by publishers) in the US and UK digital markets.
 Reinforcement of our leadership position by synergetic acquisitions
(Rising Star, primary school text books in the UK and Perseus, 6th general editor "trade" in the US).
Lagardère Active
 Focus on the optimization of the cost structure.
 Developments in musical radios in French speaking Africa (Ivory Coast).
 Growth of digital revenues from our French offline brands (through Paris Match, Elle, Public, Europe 1…
websites and apps).
INVESTOR PRESENTATION
APRIL 2016
11
2
ADAPT EXISTING ACTIVITIES AND ENHANCE LEADERSHIP POSITION
STREAMLINING OUR
PORTFOLIO OF ACTIVITIES
DEVELOPING BRAND
CONSULTING AND DIGITAL
SERVICES
STRENGHTENING CORE
SALES ACTIVITIES
An international positioning
Long term partnerships illustration
Long-term partnerships
Exclusive relationships with 2 FIFA Confederations
YEARS
22
of continuous partnership
with CAF
21
> Contract until 2028
YEARS
of continuous partnership
with AFC
> Contract until 2020
Tailored partnerships
EUROPEAN
FOOTBALL
1,600 people in more than 26 countries
70
& RUGBY
CLUBS
12
3
INVEST IN HIGHER GROWTH ACTIVITIES
TRAVEL RETAIL: A THRIVING POWER ENGINE…
Tender Offers
Development in Abu Dhabi with a premium concept
May 2016
December 2015
Abu Dhabi: 9 Food stores
A strong development driven both
by organic growth and M&A
[Bridge revenue growth (€m, revenue @100%, 2013–2015)]
Abu Dhabi: Duty Free (3,000 m²)
45%
3,589
55%
Expansion of the existing network
407
October 2015
September 2015
Hong Kong: 7 Travel Essentials and Food stores
Nice: opening of new T1 with an innovative food concept
329
190 Tender offers won1
2,853
+26%
217 Existing contracts
M&A
Creation of the 3rd largest player in North America
2013 revenue Organic growth External growth 2015 revenue
October 2015
US: acquisition of Paradies (present in more than 76 airports)
1. Net of contracts terminated over the period.
April 2015
JFK airport (New York) : acquisition of 17 stores
13
3
INVEST IN HIGHER GROWTH ACTIVITIES
… WITH UNIQUE POSITIONNING ON THREE SEGMENTS AND DIVERSIFIED GEOGRAPHICAL EXPOSURE
Revenue breakdown of Lagardère Travel
Retail by business line
[in % of 2015 total revenue]
Revenue breakdown of Lagardère Travel
Retail by Region
[in % of 2015 total revenue]
Eastern
Europe
17%
42%
41%
Foodservice
17%
US & Canada
9%
Asia-Pacific
10%
Other
Western
Europe
11%
France
23%
Italy
8%
Spain
10%
Belgium
12%
14
3
INVEST IN HIGHER GROWTH ACTIVITIES
MAY 2015: ACQUISITION OF GRUPO BOOMERANG TV, LEADING INDEPENDENT PRODUCER IN SPAIN
 Transaction: acquisition of 82 %
 2015 revenue: €77m
 Activities: Fiction / Entertainment / Production / Distribution, Others
 Fiction catalogue: 23 programs
 Non-fiction catalogue: >100 programs
 Markets: Spain + LATAM (Chile, Colombia, Peru)
15
GROUP
PERFORMANCE
IN H1 2016
GROUP KEY FIGURES
H1 2015
H1 2016
(€m)
 Results in line with
management
expectations.
 Seasonality impact
especially for
Sports and
Entertainment.
 Travel Retail
confirmed as
growth driver of
the Group.
 Control of the
indebtness despite
seasonality.
Revenue
Recurring EBIT of fully
consolidated companies*
Group operating margin
Profit – Group share
Adjusted profit – Group share
Free cash flow*
Net debt at end of the period
*See definitions slide 22.
**Net debt as of 31/12/2015.
+3.8% reported
+0.5% like-for-like*
3,304
3,431
122
101
3.7%
2.9%
9
44
+€35m
75
65
-€10m
(84)
47
+€131m
(1,551)**
(1,739)
-€188m
-17.2%
-0.8pt
17
ACTIVITY AND PROFITABILITY
H1 2016 revenue by activity
H1 2016 revenue by geographical area
Other
19%
Other
16%
18%*
France
28%
Spain
5%
17%*
28%*
5%*
US & Canada
27%
23%*
PROFITABILITY
12%*
15%*
General
Literature
43%
UK & Australia
21%
26%*
13%*
Illustrated
Books
14%
Partworks
13%
*% of revenue in H1 2015.
Education
14%
43%*
13.1%
3.7%
(€m)
162
36
H1 2015
3.7%
36
H2 2015
Recurring EBIT of fully consolidated companies
H1 2016
Operating Margin (in %)
18
ACTIVITY AND PROFITABILITY
H1 2016 revenue by geographical area
H1 2016 revenue by activity
Distribution
(Wholesale Distribution
& Integrated Retail) 18%
AsiaPacific
10%
US & Canada
21%
7%*
30%*
10%*
Eastern
Europe
17%
France
22%
17%*
Other
Western
Europe
Italy
8%
7%
12%*
8%*
Travel Retail
82%
*% of revenue in H1 2015.
70%*
23%*
Spain
3%
10%*
Belgium
12%
13%*
PROFITABILITY
3.9%
2.0%
1.8%
72
(€m)
36
30
H1 2015
H2 2015
Recurring EBIT of fully consolidated companies
H1 2016
Operating Margin (in %)
19
ACTIVITY AND PROFITABILITY
H1 2016 revenue by activity
H1 2016 revenue by geographical area
Other
International
17%
Radio
22%
14%*
22%*
Spain
7%
France
76%
3%*
Press
40%
*% of revenue in H1 2015.
43%*
83%*
TV
29%
28%*
Pure Players
& BtoB
9%
7%*
8.8%
PROFITABILITY
7.6%
7.6%
33
46
33
(€m)
H1 2015
H2 2015
Recurring EBIT of fully consolidated companies
H1 2016
Operating Margin (in %)
20
ACTIVITY AND PROFITABILITY
H1 2016 revenue by geographical area
Rest of World
16%
H1 2016 revenue by activity
France
27%
25%*
Other
34%
13%*
Asia &
Australia
13%
Media rights
18%
31%*
25%*
24%*
Rest of
Europe
16%
10%*
Marketing
rights
48%
Germany
21%
44%*
21%*
UK
7%
7%*
PROFITABILITY
12.4%
2.1%
32
(4.7%)
(€m)
5
(12)
H1 2015
H2 2015
Recurring EBIT of fully consolidated companies
H1 2016
Operating Margin (in %)
21
H1 2016 UPDATE: REVENUE BY DIVISION
(€m)
H1 2016
Lagardère Publishing
970
Reported
€m change
+€2m
Reported
change
+0.3%
Like-for-like
change*
-0.2%
 Resilient performance, supported by good
momentum in Partworks, Education in Spain
and Literature & Distribution in France.
 Strong growth despite terrorist attacks in
Europe thanks to strong network momentum.
Paradies in line with expectations.
Lagardère Travel
Retail
1,790
+€150m
+9.1%
+5.4%
Lagardère Active
436
-€1m
-0.5%
-7.4%
Lagardère Sports
and Entertainment
235
-€24m
-9.0%
-11.7%
3,431
+€127m
+3.8%
+0.5%
Total
*At constant perimeter and exchange rates.
 Uneven performance (Press down and Radio
up) combined with an unfavourable
comparison basis in TV Production.
 As expected, unfavourable sporting calendar
effect with the organisation of two major
soccer competitions in 2015.
22
H1 2016 UPDATE: RECURRING EBIT BY DIVISION
(€m)
Lagardère Publishing
H1 2016
36
Reported
€m change
+€0m
Lagardère Travel Retail
36
+€6m
Lagardère Active
33
+€0m
5
-€27m
110
-€21m
(9)
-€0m
101
-€21m
Lagardère Sports and
Entertainment
Total operating activities
Other activities
Total
 Strong increase in profitability in the US and success of
Partworks offset by a decline in digital revenue in the
UK and expenses related to French curricular reform.
 Performance buoyed by the integration of new activities.
 Good performance in Europe, despite the impact of
terrorist attacks.
 Negative trend in Magazine offset by a cost reduction
plan.
 Unfavourable delivery phase in TV Production.
 As expected, unfavourable sporting calendar effect.
23
H1 2016 UPDATE: CONSOLIDATED STATEMENT OF CASH FLOWS
H1 2015
H1 2016
Cash flow from operations before interest, taxes
168
181
Changes in working capital
(97)
(153)
71
28
(26)
(36)
45
(8)
(133)
(133)
4
188
(84)
47
(194)
9
(278)
56
(204)
(244)
(482)
(188)
(1,551)*
(1,739)
(€m)
Cash flow from operations
Interest paid & received, income taxes paid
Cash generated by/(used in) operating activities
Acquisition of property, plant & equipment and intangible assets
Disposal of property, plant & equipment and intangible assets
Free cash flow
Acquisition/(disposal) of financial assets
Net cash from operating & investing activities
Dividend paid and others
Change in net debt
Net debt
*Net debt as of 31/12/2015.
Up 7.7%
Deterioration of €56m mainly due to
non-recurring items in Lagardère
Sports and Entertainment.
Lagardère Travel Retail is the main
contributor (+€64m) to cash from
operating activities.
FCF improvement (up €131m)
despite continued investment in
Travel Retail helped by the disposal
of non-operating asset.
24
FINANCING POLICY
 Cautious management of the balance
sheet despite a significant acquisition…
 … preserving a bold dividend policy
Historical dividends (€/share)
Leverage ratio
Net debt/Recurring EBITDA*
€1,739m
€1,436m
€1,551m
Ordinary dividend per share (€)
Extra dividend per share (€)
9.0
2.8x
**
2.6x
2.4x
**
6.0
6.1%*
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
2008
2009
2010
2011
2012
2013
2014
2015
*Dividend yield based on €21.42 closing price on 27/07/2016.
30/06/2015
31/12/2015
30/06/2016
 Leverage increase compared to 30 June 2015
(0.2x higher) largely due to the Paradies acquisition.
 Leverage increase compared to 31 December 2015
(0.4x higher) mainly due to the business seasonality.
 Long-term stability of the ordinary dividend per share.
 Friendly shareholder policy post exceptional disposals.
 Attractive ordinary yield in the current low-interest rate
environment.
*See definition slide 22.
**On a proforma basis (as per credit facility covenant), including 12 months of Paradies recurring EBITDA.
25
DEFINITIONS
 Recurring EBIT of fully consolidated companies is defined as the difference between profit before finance costs and tax
and the following items of the profit and loss statement:
• income (loss) from equity-accounted companies;
• gains (losses) on disposals of assets;
• impairment losses on goodwill, property, plant and equipment and intangible assets;
• restructuring costs;
• items related to business combinations:
- expenses on acquisitions;
- gains and losses resulting from acquisition price adjustments and fair value adjustment resulting from changes in control;
- amortisation of acquisition-related intangible assets.
 Like-for-like revenue were calculated by adjusting:
• 2016 revenue to exclude companies consolidated for the first time during the year, and 2015 revenue to exclude companies divested
in 2016;
• 2016 and 2015 revenue based on 2015 exchange rates.
 Free cash flow is defined as: cash generated by/(used in) operating activities added with acquisitions/disposals of intangible assets
and property, plant and equipment.
 Recurring EBITDA is defined as recurring EBIT of fully consolidated companies added with:
• depreciation and amortisation of intangible assets and property, plant and equipment;
• dividends received from equity-accounted companies.
26
GUIDANCE
AND DIVIDEND
2016 GUIDANCE AND DIVIDEND
 2016 guidance
• In 2016, the recurring EBIT of fully consolidated companies* is expected to grow slightly
above 10% compared to 2015:
- at constant exchange rates;
- excluding the effect of the potential disposal of Distribution activities.
 Dividend
• Ordinary dividend for fiscal year 2015 maintained: €1.30 per share.
• It was paid on 10 May 2016.
INVESTOR PRESENTATION
APRIL 2016
*Recurring EBIT of fully consolidated companies of the four operating divisions + other activities.
28
APPENDIX:
BUSINESS
UPDATES
PERSEUS ACQUISITION:
EXPANSION OF NON-FICTION AND BACKLIST PUBLISHING PROGRAMS
 Date of creation: 1996
 Date of acquisition: 1st April 2016
 2015 revenue: ≈ €90m
 Activities: Non-fiction / Backlist publishing programs
 9 imprints: Avalon Books, Basic Books, DACapo Press, Public Affairs, Running Press…
 Market Positionning: Major general trade publisher in the US
 Markets: US + UK
 Synergies: The synergies for us will come to finding our own way out of the global
Perseus infrastructure and running the business through our own infrastructure, which will
take about 18 months.
30
TRAVEL RETAIL ORGANIC GROWTH DRIVERS
Strong market fundamentals
Global traffic growth
[Bn passengers / 2013-2021]
1.
2.
3.
4.
Strong and regular growth of global air traffic (+4% per year)
Increase of emerging country passengers travelling in mature countries
Increasing externalization of travel retail shops by landlords
Increased surface dedicated to travel retail in airports and train stations
7.5
4%
5.3
Rest of the world
0,9 America
North
1.2
5%
1.8
0.8
0,9
1.5
0,5
2%
2.4
7%
ASPAC
1.4
1.4
Europe
1.6
1.6
2.4
3%
2.1
2.1
2021
2013
Roissy Charles De Gaulle airport, Paris
X%
CAGR.
Source: Lagardère, ACI.
31
TRAVEL RETAIL ORGANIC GROWTH DRIVERS
A favourable product mix evolution
[in €m, managed revenue 2011-2015]
(1) Other mainly includes: travel accessories, gifts & souvenirs and convenience products (phone cards, lottery, …)
32
PARADIES ACQUISITION: A GAME CHANGER IN NORTH AMERICA
Key
financial
terms
Significant
expected
synergies
 Purchase price : $530m for 100% of the equity net of minority partners1)
 7.5x EV/EBITDA post run rate synergies2)
 Double digit EBITDA margin
 Expected $15m synergies per year as of 2019:
 Margin synergies
 G&A synergies
 Other potential synergies (not quantified): Sales and marketing/ best practices/
international development of owned and franchised brands
1) On a debt and cash free basis
2) Pre-tax, full potential of recurring synergy expected to be reached in 2019
Source: Lagardère Travel Retail internal data
33
PARADIES LAGARDÈRE: CREATING A REGIONAL LEADER
Overview of Paradies Lagardère
Paradies
Lagardère
2015 key
figures
#3
in North
America
A new entity managed
by an experienced
leadership team
A unique and
complementary North
American footprint
A brand portfolio tailor
made for the North
American market
A strong and longlasting relationship with
landlords
100
airports
6,000
employees
$770m
revenue
Source: Paradies internal data
34
PARADIES: INTEGRATION PROJECT ON TRACK
✓ Strong and integrated management to keep momentum
Focus

Immediate integration of senior leadership team

Decision to have main HQ in Atlanta

Margins and trade negotiations

Business development integration
✓ Focusing on quick wins
✓ A clearly defined path towards full integration
Integration

Target organization with progressive integration (Platforms and Corporate)

Margin and topline upsides
Expected synergies will be reached after full integration is
completed (2019)
35
ABU DHABI INTERNATIONAL AIRPORT: A MAJOR STEP IN MIDDLE-EAST
Overview of Abu Dhabi core Duty Free contract awarded
 10-year contract on core duty free categories,
confectionery and fine foods
Key
figures
 13 PoS over 3,000 sqm
 10-year estimated cumulated revenue: €3bn
 9 Food and Beverage contracts awarded in April 2016
50/50 joint venture created
to bid and run operations
Multi-category shops
Source: Lagardère Travel Retail internal data
Le Club iconic shop
36
TRAVEL RETAIL BUSINESS MIX EVOLUTION
Lagardere Travel Retail: improvement of the business mix
40%
37%
56%
60%
63%
2012
2013
2014
44%
27%
73%
Distribution*
(to be sold)
Travel Retail
2015
The repositioning and development strategy of Lagardère Travel Retail is almost
achieved, with the advanced disposal process of the Distribution activities and the
accelerated organic growth in Travel Retail.
INVESTOR PRESENTATION
APRIL 2016
*Press Wholesale Distribution and Integrated Retail.
37
A WORLDWIDE GROWING SPORTS MARKET
Growth outlook for the Sports market
Worldwide Sports market
Growth factors
[€ billion, 2015]
110
Merchandising
15
Media rights
27
Worldwide growth of 5% a year, driven by
media and marketing rights
+5%
+5%
Marketing rights
+5%
34
+6%
Ticketing
INVESTOR PRESENTATION
APRIL 2016
Source: Lagardère, PWC.
34
2015
Globalization of rights accelerating
38
WE DELIVER OUR PARTNERS COMPREHENSIVE SOLUTIONS TO GENERATE
VALUE
39
LAGARDÈRE IR TEAM AND CALENDAR
Calendar
IR team details
(all time is CET)
Florence Lonis
Chief of Investor Relations
Tel: +33 1 40 69 18 02
[email protected]
Hacène Boumendjel
Investor Relations Officer
Tel: +33 1 40 69 67 88
[email protected]
 Announcement of FY 2016 revenue
Q4 revenue will be released on 9 February 2017 at 8:00 a.m.
A conference call will be held at 10:00 a.m. on the same day.
 Announcement of FY 2016 results
Full Year will be released on 8 March 2017 at 17:35
Josefin Maisondieu
Assistant
Tel: +33 1 40 69 19 22
[email protected]
Address: 4 rue de Presbourg 75116 Paris - FRANCE
Tickers: Bloomberg (MMB FP), Reuters (LAGA.PA)
40