Revenue up 4.5% like for like(1) for the
target scope and recurring EBIT(1) for the target scope(2) up
5.6%(3) to €361 million
Sharp rise in free cash flow generation(1)
for the target scope: up 20% to €250 million (excluding changes in
working capital), and by 13% to €278 million including changes in
working capital
Proposed ordinary dividend stable at €1.30
per share
2020 recurring EBIT growth target: between
4% and 6%(4), excluding the impact of the
coronavirus
Action plan in progress at Lagardère Travel
Retail to mitigate the impact of the coronavirus on 2020(5)
Regulatory News:
With the sale of Lagardère Sports and of numerous media
assets, in 2019, the Lagardère group (Paris:MMB) completed the bulk
of its strategic refocusing plan.
In 2019, the Group continued to see strong growth in revenue
and in recurring EBIT based on the target scope(2), driven by
impressive momentum at Lagardère Publishing and Lagardère Travel
Retail as the two divisions took full advantage of the
opportunities resulting from their diverse geographic and business
profiles.
Free cash flow for the target scope (excluding changes in
working capital) totalled €250 million, a rise of 20% year on year
led by strong margin growth in the Group’s two businesses.
The Group also continued to develop its two pillars, with the
acquisitions of Gigamic, Short Books and Blackrock Games at
Lagardère Publishing, and of the International Duty Free group
(IDF) at Lagardère Travel Retail. These acquisitions were mainly
financed out of proceeds from the sale of media assets.
Continued growth
momentum
- The target scope reported revenue of €6,936 million in 2019, up
4.5% like for like. This growth momentum was powered by a solid
performance at Lagardère Travel Retail, which delivered 6.3%
growth, and by a good year at Lagardère Publishing, which advanced
by 2.8%.
Continued rise in recurring
EBIT
- Recurring EBIT was 5.6% higher than in 2018, meeting the
recurring EBIT target for the target scope as confirmed on 7
November 2019 (“Restated for the impact of IFRS 16 on concession
agreements at Lagardère Travel Retail, at constant exchange rates
and excluding Lagardère Travel Retail’s acquisitions of Hojeij
Branded Foods (HBF) and International Duty Free (IDF)”).
- Recurring EBIT for the target scope came in at €361 million
versus €310 million in 2018, buoyed by good performances from
Lagardère Travel Retail and Lagardère Publishing, and by the
consolidation of HBF.
- Profit before finance costs and tax was €411 million in 2019,
compared with €451 million in 2018 which had included the one-off
capital gain on the sale of the office building located in rue
François 1er (Paris, France).
- Profit for the period was €11 million, down from €199 million
in 2018 owing to the adverse impact of discontinued operations.
Restated for non-recurring/non-operating items, adjusted profit
- Group share was €200 million, stable year on year.
Solid financial position
At end-December 2019, net debt stood at €1,461 million. The
leverage ratio (net debt (1)/recurring EBITDA(1)) at both end-2019
and end-2018 was 2.1.
Consolidated data
At 31 December 2019, Lagardère Sports is classified within
“Assets held for sale and associated liabilities” in the
consolidated balance sheet. In accordance with IFRS 5, the
contribution of Lagardère Sports is presented as a single amount on
the face of the 2019 consolidated income statement and consolidated
statement of cash flows, within “Profit (loss) from discontinued
operations” and “Net cash from (used in) discontinued operations”,
respectively. Data for 2018 have been restated for the purposes of
comparability.
- REVENUE AND RECURRING
EBIT(6)
Revenue
Revenue for the Lagardère group came in at €7,211 million for
2019, up 5% on a consolidated basis and up 4.1% like for like.
The difference between
consolidated and like-for-like revenue is essentially attributable
to a €92 million positive foreign exchange effect resulting mainly
from the appreciation of the US dollar. The €18 million negative
scope effect reflects the disposals of media assets, chiefly offset
by the two acquisitions carried out at Lagardère Travel Retail (HBF
and IDF).
Revenue (€m)
Change
2018
2019
on a consolidated
basis
on a like-for-like
basis
Lagardère Publishing
2,252
2,384
+5.9%
+2.8%
Lagardère Travel Retail
3,673
4,264
+16.1%
+6.3%
Other Activities*
301
288
-4.3%
-4.2%
Target scope
6,226
6,936
+11.4%
+4.5%
Non-retained scope**
642
275
-57.2%
-4.6%
LAGARDÈRE
6,868
7,211
+5.0%
+4.1%
* Lagardère News (Paris Match, Le Journal du Dimanche, Europe 1,
Virgin Radio, RFM and the Elle brand licence), the Entertainment
businesses, the Group Corporate function, and the Lagardère Active
Corporate function, whose costs are being wound down by 2020. **
Operations disposed of/disposals pending completion (Lagardère
Active), excluding Lagardère Sports, classified as a discontinued
operation in accordance with IFRS 5.
GROUP RECURRING EBIT
Group recurring EBIT
(€m)
Change (€m)
2018*
2019
Lagardère Publishing
200
220
+20
Lagardère Travel Retail
121
152
+31
Other Activities**
(11)
(11)
0
Target scope
310
361
+51
Non-retained scope***
75
17
-58
LAGARDÈRE
385
378
-7
* Restated for IFRS 16. See appendices at
the end of the press release.
** Lagardère News (Paris Match, Le Journal du Dimanche, Europe
1, Virgin Radio, RFM and the Elle brand licence), the Entertainment
businesses, the Group Corporate function, and the Lagardère Active
Corporate function, whose costs are being wound down by 2020. ***
Operations disposed of/disposals pending completion (Lagardère
Active), excluding Lagardère Sports, classified as a discontinued
operation in accordance with IFRS 5.
Group recurring EBIT totalled €378 million, down €7 million
on 2018.
Recurring EBIT based on the target scope rose by €51 million
year on year, to €361 million. The scope effect resulting from
the acquisitions of HBF and IDF added €27 million, while changes in
exchange rates added €7 million to the recurring EBIT figure.
Excluding these scope and foreign exchange effects, recurring EBIT
for the target scope climbed 5.6% or €17 million, lifted by a
strong year at Lagardère Publishing in both Illustrated Books and
Education, as well as improved profitability for US operations, and
by Lagardère Travel Retail thanks to a good showing in EMEA and
North America.
Recurring EBIT for the non-retained scope amounted to €17
million, down €58 million year on year owing mainly to the various
disposals at Lagardère Active during the year.
Revenue
Lagardère Publishing revenue was €677 million in
fourth-quarter 2019, up 5.0% on a consolidated basis and up 1.7%
like for like, thanks notably to the publication of a new Asterix
album in late October 2019.
Full-year 2019:
Revenue totalled €2,384 million for the year, up 5.9% on a
consolidated basis and up 2.8% like for like.
Revenue growth in 2019 was chiefly driven by a good performance
in Education – particularly in France and Spain, the success of the
new Asterix album, and sustained growth in Partworks and Mobile
Games.
Revenue for France was up 6.3%, spurred by a sharp rise in
Education on the back of the reform of two French high school
levels, and by a solid increase in Illustrated Books thanks to the
international success of the new Asterix album, La Fille de
Vercingétorix, along with a good performance at Hachette Pratique,
Hachette Jeunesse Licences and Larousse. General Literature also
had a good year, buoyed by the publication of the large-format
version of Guillaume Musso’s La Vie secrète des écrivains, and by
growth in Le Livre de Poche paperbacks led by the publication of
Musso’s La Jeune Fille et la Nuit, and Valérie Perrin’s Changer
l’eau des fleurs. Lastly, Mobile Games also continued to generate
good momentum.
The United Kingdom fell 1.4%, as a good performance for the
backlist and for digital sales at Bookouture and the success of
Billy Connolly’s Tall Tales and Wee Stories late in the year failed
to offset an unfavourable comparison effect resulting from the
success of Michael Wolff’s Fire and Fury in 2018 and of the J.K.
Rowling/Robert Galbraith titles published in the last quarter of
that year.
The United States slipped 1.0%. A sharp rise in revenue from
digital audiobooks led by Malcolm Gladwell’s Talking to Strangers,
as well as the success of Andrzej Sapkowski’s The Witcher at Orbit
late in the year, only partially offset the unfavourable comparison
effect with 2018, which had been boosted by the remarkable success
of James Patterson and Bill Clinton’s The President is Missing and
by the publication of Nicholas Sparks’ Every Breath.
Spain/Latin America posted 10.3% revenue growth, spurred by
curriculum reform in Spain (concerning all primary school levels in
Andalusia) and by the launch of the new Asterix album at Bruño.
Partworks delivered revenue growth of 4.9%, reflecting the good
performance of first-half launches (particularly models and leisure
crafts) in Japan, Germany and France.
E-books accounted for 7.7% of total Lagardère Publishing revenue
in 2019 versus 7.9% in 2018, while digital audiobooks represented
3.4% of revenue versus 2.7% in 2018.
Recurring EBIT
Lagardère Publishing reported €220 million in recurring EBIT, up
€20 million on 2018.
Recurring EBIT growth was led mainly by France, with Illustrated
Books buoyed by publication of a new Asterix album and Education by
high school reform, as well as by Spain (new primary school
textbooks) and the United States (growth in audiobooks and
operating cost efficiency plan). Recurring EBIT for the division
also benefited from a positive foreign exchange effect resulting
from the appreciation of the US dollar.
Revenue
Revenue for fourth-quarter 2019 totalled €1,117 million, up
17.8% on a consolidated basis and up 5.8% like for like. The
fourth-quarter performance was driven mainly by dynamic trading for
the EMEA scope (excluding France) and for continental China.
Platforms in North America also performed well in the fourth
quarter. However, social incidents in France and Hong Kong dampened
these gains.
Full-year 2019:
Revenue totalled €4,264 million for the year, up 16.1% on a
consolidated basis and up 6.3% like for like.
Despite the slowdown towards the end of the year owing to the
strikes, France reported a sharp 7.6% rise in revenue, buoyed by
good Duty Free trading at regional platforms (Nice, Marseille and
Nantes), growth in the Foodservice network (Toulouse) and the
success of the new Relay concept at Travel Essentials.
The EMEA region (excluding France) enjoyed robust momentum (up
6.9%), attributable to a good performance in Italy for Duty Free
operations (Rome, Venice and regional airports) and Travel
Essentials (favourable network impact), as well as in Romania,
Spain and Portugal. The Middle East also reported solid revenue
growth, with the opening of the new Dubai Foodcourt and ongoing
business expansion in Africa.
In North America, business grew by 2.9% (by 3.6% on a same-store
basis), reflecting a dynamic performance at Travel Essentials
driven by sales initiatives and Foodservice operations, despite the
adverse impact of US-China trade tensions on Canadian airport
traffic.
Asia-Pacific advanced 7.2%, spurred by growth in China
(continental China and Hong Kong) which benefited from the new
openings and modernisation initiatives carried out in 2018 and
2019. Business contracted in the Pacific region due to the economic
slowdown in Australia and an unfavourable network effect, despite
the full-year impact of new outlets opened in Christchurch, New
Zealand.
Recurring EBIT
Recurring EBIT moved up €31 million to €152 million.
This impressive increase mainly reflects the impact of the
acquisitions of HBF in November 2018 and of IDF in the final
quarter of 2019, and bullish performances from North America and
Italy. France also had a very good year in 2019, despite the impact
of the strikes. Business continued to ramp up despite events in
Hong Kong, the collapse of the Icelandic airline WOW Air and the
weak Australian economy.
Revenue
Revenue for 2019 totalled €288 million, down 4.2% like for
like and down 4.3% on a consolidated basis.
The revenue decline for Other Activities is chiefly the result
of a 12.5% fall in Radio revenue owing to lower audience figures
for Europe 1. Revenue also contracted for Lagardère News (down
6.9%), as upbeat advertising revenues failed to fully counter the
drop in circulation revenues, which accelerated towards the end of
the year owing to the strikes in France.
Recurring EBIT
Recurring EBIT for Other Activities in 2019 remained stable
year on year, at a negative €11 million.
The gradual reduction in overheads linked to the disappearance
of the former Lagardère Active Corporate function, whose costs are
being fully wound down in 2020, was offset by the combined impact
of a decline in Europe 1 advertising revenues and in the
circulation of press titles.
Revenue for the non-retained scope in 2019 was down 57.2% on a
consolidated basis, at €275 million. Recurring EBIT amounted to €17
million for the year.
- MAIN INCOME STATEMENT
ITEMS
(€m)
2018*
2019
Revenue
6,868
7,211
Group recurring EBIT
385
378
Income from equity-accounted
companies**
3
6
Non-recurring/non-operating items
22
(33)
Impact of IFRS 16 on concession
agreements
41
60
Profit before finance costs and
tax
451
411
Interest expense on lease liabilities
(76)
(85)
Finance costs, net
(57)
(53)
Profit before tax
318
273
Income tax expense
(124)
(55)
Profit (loss) from discontinued
operations
5
(207)
Profit for the period
199
11
Minority interests
22
26
Profit (loss) - Group share
177
(15)
* Restated for IFRS 16. See appendices at
the end of the press release.
** Before impairment losses.
- Income from equity-accounted companies
Income from equity-accounted companies (before impairment
losses) came in at €6 million in 2019, versus €3
million one year earlier, buoyed by good performances from the
joint operations at Lagardère Travel Retail.
- Non-recurring/non-operating items
Non-recurring/non-operating items represented a net negative
amount of €33 million, compared with a net positive amount of €22
million in 2018, and mainly included:
- €134 million in net disposal gains, chiefly relating to the
sale of TV channels in September 2019 (€99 million), BilletReduc in
February 2019 (€18 million) and South African Radio operations (€13
million) in January 2019. In 2018, net disposal gains amounted to
€205 million, including a gain of €245 million on the sale of the
rue François 1er office building in Paris (France) and a loss of
€40 million on the sale of the interest in Marie Claire group;
- €34 million in impairment losses against property, plant and
equipment and intangible assets, including €6 million attributable
to Lagardère Travel Retail and €26 attributable to the non-retained
scope;
- €42 million in restructuring costs, a sharp €29 million
decrease on 2018, including €15 million at Other Activities
resulting from the late-2019 redundancy plan for the Group
Corporate function, €14 million at Lagardère Travel Retail
including HBF integration costs, and €12 million at Lagardère
Publishing relating to the streamlining of distribution centres in
the United Kingdom;
- €91 million in amortisation of intangible assets and costs
relating to the acquisition of consolidated companies, including
€82 million for Lagardère Travel Retail and €8 million for
Lagardère Publishing.
- Impact of IFRS 16 on concession agreements
The impact of applying IFRS 16 on concession agreements amounted
to a positive €60 million in 2019, versus a positive €41 million in
2018.
- Interest expense on lease liabilities
Interest expense on lease liabilities represented €85 million
in 2019, versus €76 million
in 2018. The €9 million rise in this item results from the
consolidation of HBF and IDF.
Net finance costs amounted to €53 million in
2019, a slight improvement on
the prior year.
Income tax expense totalled €55 million, down €69 million
year on year. Income tax expense in 2018 notably included €83
million in one-off tax payable on the sale by Lagardère Active of
the rue François 1er office building in Paris (France) and €14
million in tax savings resulting from the Lagardère Active
restructuring plan.
- Profit (loss) from discontinued operations
Discontinued operations relate
to Lagardère Sports, which generated a total loss of €207 million
in 2019 (the purchase offer received in December 2019 led the Group
to recognize a €234 million impairment loss against the
business).
Taking account of all these items, profit for the year came
out at €11 million, including a loss of €15 million attributable to
the Group. Profit attributable to minority interests in 2019
was €26 million, versus €22 million attributable to minority
interests in 2018, reflecting the performance of Le Livre de Poche
paperbacks at Lagardère Publishing and North American and Italian
operations at Lagardère Travel Retail.
ADJUSTED PROFIT - GROUP
SHARE
Adjusted profit - Group share (excluding
non-recurring/non-operating items) totalled €200 million in
2019, in line with the 2018 figure.
(€m)
2018*
2019
Group recurring EBIT**
385
378
Income from equity-accounted
companies***
+3
+6
Interest expense on lease liabilities –
buildings and other leases
-17
-19
Finance costs, net
-57
-53
Tax effects****
-85
-77
o/w attributable to minority interests
-29
-35
Adjusted profit - Group share**
200
200
* Restated for IFRS 16. See appendices at
the end of the press release.
** Alternative performance measure, see
definition at the end of the press release.
*** Before impairment losses.
**** Excluding tax on
non-recurring/non-operating items.
EARNINGS PER SHARE
Earnings per share - Group share represented a negative €0.12,
versus a positive €1.36 in 2018. Adjusted earnings per share -
Group share was €1.55, versus €1.54 in 2018. The number of shares
comprising the share capital was unchanged from the previous
year.
- OTHER FINANCIAL
INFORMATION
Cash flow from operations and investing activities
(€m)
2018*
2019
Cash flow from operations before
changes in working capital and income taxes paid**
439
495
Changes in working capital
18
34
Income taxes paid excluding taxes on
property disposals
(30)
(52)
Cash flow from operations**
427
477
Purchases/disposals of property, plant and
equipment and intangible assets***
(186)
(197)
Free cash flow excluding property
disposals
241
280
Property disposals net of tax paid and
related refitting costs
183
14
Free cash flow****
424
294
Purchases of investments
(339)
(287)
Disposals of financial investments
148
323
Cash flow from operations and investing
activities
233
330
* Restated for IFRS 16. See appendices at the end of the press
release. ** Before taxes on property disposals. *** Excluding
property disposals and refitting costs. **** Alternative
performance measure.
- Cash flow from operations
Cash flow from operations before changes in working capital
amounted to €495 million in 2019 compared to €439 million in
2018. This increase chiefly results from the favourable impact
of business at Lagardère Publishing (€32 million) and Lagardère
Travel Retail (€49 million), only partly offset by the €32 million
decline for the non-retained scope.
Changes in working capital represented an inflow of €34
million over the year, compared to an inflow of €18 million in
2018. This €16 million increase reflects (i) a rise of €49
million for Lagardère Publishing resulting from lower author
advances at the end of the year and a year-on-year reduction in
Partworks inventories, which had been affected by a busy launch
schedule at the end of 2017, and (ii) a rise of €26 million for the
non-retained scope, including a €22 million inflow relating to the
collection of a portion of the proceeds from the sale of most of
the magazine publishing titles to Czech Media Invest (CMI). The
increase is offset by a €73 million decline for Lagardère Travel
Retail (2018 had been boosted by a favourable one-off impact linked
to the working capital optimisation drive).
Income taxes paid (excluding tax on property disposals)
totalled €52 million in 2019 compared to €30 million in 2018.
The increase in this item reflects adverse changes in tax
settlements in connection with tax consolidation in France and the
impact of higher taxation on cross-border trade in the United
States.
- Purchases/disposals of property, plant and equipment and
intangible assets
Net purchases and disposals of property, plant and equipment
and intangible assets (excluding property disposals) represented an
outflow of €197 million in 2019, chiefly relating to Lagardère
Travel Retail (€156 million), with a significant portion
corresponding to the opening of new stores. The balance (€35
million) results essentially from Lagardère Publishing and is
mainly attributable to the end of investments in logistics projects
in the United Kingdom and in new information systems projects in
France.
Further to the implementation of the strategic refocusing plan,
free cash flow for the target scope excluding changes in working
capital is presented in the following table: - illustrating the
generation of free cash flow for the Group's new scope, stripping
out the volatility of changes in working capital, which should be
neutral over the long term; and - presenting separately the
contribution of non-retained assets together with the costs
associated with the refocusing plan.
2018*
2019
Cash flow from operations before changes
in working capital and income taxes paid**
402
491
Income taxes paid excluding taxes on
property disposals
-14
-46
Purchases/disposals of property, plant and
equipment and intangible assets***
-180
-195
Free cash flow excluding changes in
working capital for the target scope
+208
+250
Changes in working capital for the target
scope
+38
+28
Free cash flow for the target
scope
+246
+278
Property disposals net of tax paid and
related refitting costs
+183
+14
Restructuring costs relating to the
Group’s strategic refocusing
-
-19
Other cash flow from operations –
non-retained scope****
-5
+21
Free cash flow for the non-retained
scope
+178
+16
Free cash flow**
424
294
* Restated for IFRS 16. See appendices at
the end of the press release.
** Alternative performance measure.
*** Excluding property disposals and
refitting costs.
**** Operations disposed of/disposals
pending completion (Lagardère Active), excluding Lagardère Sports,
classified as a discontinued operation in accordance with IFRS
5.
The Group’s free cash flow totalled €294 million in 2019
versus €424 million in 2018. The €130 million decrease reflects the
sharp decrease in free cash flow for the non-retained scope
(negative €162 million impact), partly offset by a significant €32
million improvement in free cash flow for the target scope.
Excluding changes in working capital, free cash flow for the
target scope was €250 million, up €42 million on 2018 thanks to
a sharp rise for the Group’s two businesses (cash flow from
operations before changes in working capital up €89 million),
tempered by a rise in income taxes paid (€32 million negative
impact) and in purchases of property, plant and equipment and
intangible assets (€15 million negative impact) related mainly to
the consolidation of HBF.
Changes in working capital represented a positive €28 million
impact, €10 million lower than in 2018.
As a result, free cash flow for the target scope was €278
million, up €32 million year on year.
Free cash flow for the non-retained scope totalled €16 million
in 2019, down by €162 million versus 2018, driven by:
- the €169 million decrease in property disposals, with 2018
including the sale of the rue François 1er office building in Paris
(France);
- outflows relating to restructuring costs for the former
Lagardère Active Corporate function;
- partly offset by a higher contribution from divested
activities, including an inflow of €22 million relating to the
collection of a portion of the proceeds from the sale of most of
the magazine publishing titles to Czech Media Invest (CMI).
- Purchases/disposals of investments
Purchases of investments represented an outflow of €287
million and mainly related to the acquisition of the IDF group
in Belgium, and to a lesser extent the acquisition of Autogrill Cz
in the Czech Republic by Lagardère Travel Retail. Purchases of
investments also include Lagardère Publishing’s acquisitions of
Gigamic and Blackrock Games in France, and of Short Books in the
United Kingdom.
Disposals of financial investments represented an inflow of
€323 million (including €7 million in interest received) in
2019, with €316 million of this amount corresponding mainly to
disposals at Lagardère Active as part of the strategic refocusing
plan, including the sale of the TV channels in September 2019, of
BilletReduc and most of the magazine publishing titles in France in
February 2019, and of South African Radio operations in January
2019.
Cash flow from operations and investing activities
In all, cash flow from operations and investing activities
represented a net inflow of €330 million in 2019, compared with a
net inflow of €233 million in 2018.
FINANCIAL POSITION
At end-December 2019, net debt stood at €1,461 million compared
to €1,367 million one year earlier. Acquisitions were primarily
financed out of proceeds from disposals carried out in 2019.
- The Group's liquidity position remains very solid, with
€2,163 million in available liquidity (available cash and
short-term investments reported on the balance sheet totalling €913
million and an undrawn amount on the syndicated credit line of
€1,250 million).
- The Group continues to enjoy a healthy financial position,
with a stable leverage ratio (net debt(1)/recurring EBITDA(1)) of
2.1.
- KEY EVENTS SINCE 7 NOVEMBER
2019
- Chairmanship of the Supervisory Board of Lagardère
SCA
At its meeting on 4 December 2019, the Supervisory Board, acting
on the recommendation of the Appointments, Remuneration and
Governance Committee, decided to appoint Patrick Valroff as its
Chairman and as Chairman of the Audit Committee of Lagardère SCA,
further to the resignation of Xavier de Sarrau for personal
reasons.
- Sale of Lagardère Sports to H.I.G. Capital
On 16 December 2019, the Lagardère group announced that it had
received an offer from H.I.G. Capital to acquire 75% of the capital
of Lagardère Sports. The preliminary sale agreement was signed on
20 February 2020. The transaction is targeted to close before the
end of the first quarter of 2020 and is subject to clearance from
the competition authorities.
2020 RECURRING EBIT(1) GROWTH TARGET
BASED ON TARGET SCOPE
The Lagardère group expects 2020 recurring EBIT(1) growth
to be between 4% and 6% at constant exchange rates, excluding the
acquisition of IDF and the impact of the coronavirus.
The COVID-19 epidemic has had
a marked impact on business levels at Lagardère Travel Retail since
the middle of January, chiefly in the Asia-Pacific zone as well as
at its international hubs (notably as regards Chinese tourist
spending at European destinations). In view of the change in
business levels observed to date, Lagardère estimates that COVID-19
will have an adverse impact on recurring EBIT, excluding the impact
of the Group’s action plan, of around €20 million in the first
quarter of 2020.
Around half of this impact is
expected to be offset over the course of the year by the
progressive ramp-up of various initiatives that are already being
implemented in all geographies (e.g., optimisation of site opening
hours and rents in agreement with landlords, optimisation of
operating costs).
Obviously, it is not currently
possible to foresee how the epidemic will develop going forward.
The Group is continuing to monitor the situation very carefully,
with a view to implementing any additional measures across all of
its geographies as and when appropriate.
DIVIDEND
As for 2018, shareholders at the Annual General Meeting will be
asked to approve a €1.30 per share dividend for the 2019 fiscal
year. Shareholders will be given the option of receiving the
dividend payment in shares, allowing the Group to strengthen its
financial flexibility in supporting the development of its two
pillars while maintaining shareholder return.
- Supervisory Board meeting The Supervisory Board meeting was held on 27
February 2020 to review the parent company and consolidated
financial statements for 2019.
- Lagardère Investor Day The Group's Investor Day will be held on 25
March 2020 at 2:00 p.m.
- First-quarter 2020 revenue First-quarter 2020 revenue will be released
on 30 April 2020 at 8:00 a.m. A conference call will be held at
10:00 a.m. on the same day.
- General Meeting – Fiscal year 2019 The General Meeting
of Shareholders will be held on 5 May 2020 at 10:00 a.m. at the
Carrousel du Louvre in Paris.
- Ordinary dividend The
ex-dividend date for the ordinary dividend (proposed at €1.30 per
share) for 2019 is expected to be 7 May 2020, with a payment date
as from 28 May 2020.
- First-half 2020 results First-half 2020 results will be released on
30 July 2020 at 5:35 p.m. A conference call will be held at 5:45
p.m. on the same day.
- Third-quarter 2020 revenue Third-quarter 2020 revenue will be released
on 5 November 2020 at 8:00 a.m. A conference call will be held at
10:00 a.m. on the same day.
***
FOURTH-QUARTER 2019
REVENUE:
Revenue (€m)
Change
Q4 2018
Q4 2019
on a consolidated
basis
on a like-for-like
basis
Lagardère Publishing
645
677
+5.0%
+1.7%
Lagardère Travel Retail
948
1,117
+17.8%
+5.8%
Other Activities*
91
80
-12.1%
-10.1%
Target scope
1,684
1,874
+11.3%
+3.4%
Non-retained scope**
196
88
-55.1%
+8.0%
LAGARDÈRE
1,880
1,962
+4.4%
+3.6%
* Lagardère News (Paris Match, Le Journal du Dimanche, Europe 1,
Virgin Radio, RFM and the Elle brand licence), the Entertainment
businesses, the Group Corporate function, and the Lagardère Active
Corporate function, whose costs are being wound down by 2020. **
Operations disposed of/disposals pending completion (Lagardère
Active), excluding Lagardère Sports, classified as a discontinued
operation in accordance with IFRS 5.
CHANGES IN SCOPE OF CONSOLIDATION AND
EXCHANGE RATES
Full-year 2019:
The difference between consolidated and like-for-like revenue
data is attributable to a €92 million positive foreign exchange
effect resulting chiefly from fluctuations in the US dollar, and to
an €18 million negative scope effect, breaking down as:
- a €359 million negative impact resulting from disposals carried
out in 2018 and 2019 at Lagardère Active as part of the strategic
refocusing plan, including €248 million relating to the sale of
most of the magazine publishing titles to Czech Media Invest in
January 2019, €51 million relating to the sale of the TV channels
in September 2019 and €30 million relating to the sale of Radio
operations in Eastern Europe;
- a €314 million positive impact chiefly resulting from Lagardère
Travel Retail’s acquisitions of HBF in late November 2018 and of
IDF at the end of September 2019;
- a €23 million positive impact at Lagardère Publishing, mainly
reflecting the February 2019 acquisition of Gigamic.
OPERATIONS DISPOSED OF OR IN EXCLUSIVE
SALE NEGOTIATIONS
Disposals to date
2018 recurring EBIT*
2019 recurring EBIT
Estimated sale value
(€m)
Date of sale
LARI – Eastern Europe
7
-
73
July 2018
Marie Claire
-
-
14
June 2018
MonDocteur
(4)
-
55
July 2018
Doctissimo
October 2018
Boursier
3
41
January 2019
BilletReduc
-
February 2019
Plurimédia
February 2019
Doctipharma
February 2019
LARI - Africa (Jacaranda, Mediamark, Vibe
Radio [Senegal and Côte d'Ivoire])
1
18
Jacaranda and Vibe Radio:
transactions closed in February 2019
-
Mediamark: closing subject to
regulatory clearance
Magazine publishing titles (excluding
Paris Match, Le Journal du Dimanche and the Elle brand licence)
22
-
52
February 2019
Mezzo
3
1
12 at 60%, and 20 at 100%
July 2019
DHP, other
1
0
1
July-October 2019
TV channels, excluding Mezzo
23
2
215
September 2019
Total
56
3
* Restated for IFRS 16. See appendices at
the end of the press release.
Disposals pending completion
2018 recurring
EBIT*
2019 recurring EBIT
Estimated sale value
(€m)
Date of sale
Lagardère Sports
32
64
110
Closed 20 February 2020
Not yet sold
Lagardère Studios
19
15
Total
51
79
* Restated for IFRS 16. See
appendices at the end of the press release
Lagardère uses alternative performance measures which serve as
key indicators of the Group’s operating and financial performance.
These indicators are tracked by the Executive Committee in order to
assess performance and manage the business, as well as by investors
in order to monitor the Group’s operating performance, along with
the financial metrics defined by the IASB. These indicators are
calculated based on accounting items taken from the consolidated
financial statements prepared under IFRS and a reconciliation with
those items is provided in this press release, in the full-year
2019 results presentation, or in the notes to the consolidated
financial statements.
Like-for-like revenue is used by the Group to analyse revenue
trends excluding the impact of changes in the scope of
consolidation and in exchange rates.
The like-for-like change in revenue is calculated by comparing:
- revenue for the period adjusted for companies consolidated for
the first time during the period and revenue for the prior-year
period adjusted for consolidated companies divested during the
period; - revenue for the prior-year period and revenue for the
current period adjusted based on the exchange rates applicable in
the prior-year period.
The scope of consolidation comprises all fully-consolidated
entities. Additions to the scope of consolidation correspond to
business combinations (acquired investments and businesses), and
deconsolidations correspond to entities over which the Group has
relinquished control (full or partial disposals of investments and
businesses, such that the entities concerned are no longer included
in the Group’s financial statements using the full consolidation
method). The difference between consolidated and like-for-like
figures is explained in section VII - Appendices of this press
release.
The Group's main performance indicator is recurring operating
profit of fully consolidated companies (recurring EBIT), which is
calculated as follows:
Profit before finance costs and tax
Excluding:
- Income from equity-accounted companies before impairment
losses
- Gains (losses) on disposals of assets
- Impairment losses on goodwill, property, plant and equipment,
intangible assets and investments in equity-accounted
companies
- Items related to business combinations: - Acquisition-related
expenses - Gains and losses resulting from purchase price
adjustments and fair value adjustments due to changes in control -
Amortisation of acquisition-related intangible assets
- Specific major disputes unrelated to the Group’s operating
performance
- Items related to leases and finance lease arrangements: -
Cancellation of fixed rental expense* on concession agreements -
Depreciation of right-of-use assets on concession agreements -
Gains and losses on lease modifications under concession
agreements
* Cancellation of fixed rental expense on concession agreements
is equal to the repayment of the lease liability, the associated
change in working capital and interest paid in the statement of
cash flows.
The reconciliation between recurring operating profit of fully
consolidated companies (recurring EBIT) and profit before finance
costs and tax is set out in the full-year 2019 results
presentation, on slide 18.
Operating margin is calculated by dividing recurring operating
profit of fully consolidated companies (recurring EBIT) by
revenue.
- Recurring EBITDA over a rolling
12-month period
Recurring EBITDA is calculated as recurring operating profit of
fully consolidated companies (Group recurring EBIT) plus dividends
received from equity-accounted companies, less depreciation and
amortisation charged against property, plant and equipment and
intangible assets, amortisation of the cost of obtaining contracts,
and the cancellation of fixed rental expense* on property and other
leases, plus recurring EBITDA from discontinued operations.
* Cancellation of fixed rental expense on concession agreements
is equal to the repayment of the lease liability, the associated
change in working capital and interest paid in the statement of
cash flows.
The reconciliation between recurring EBITDA and recurring
operating profit of fully consolidated companies (recurring EBIT)
is set out in the full-year 2019 results presentation, on slide
39.
- Adjusted profit - Group
share
Adjusted profit - Group share is calculated on the basis of
profit for the period, excluding non-recurring/non-operating items,
net of the related tax and of minority interests, as follows:
Profit for the period
Excluding:
- Gains (losses) on disposals of assets
- Impairment losses on goodwill, property, plant and equipment,
intangible assets and investments in equity-accounted
companies
- Items related to business combinations: - Acquisition-related
expenses - Gains and losses resulting from purchase price
adjustments and fair value adjustments due to changes in control -
Amortisation of acquisition-related intangible assets
- Specific major disputes unrelated to the Group’s operating
performance
- Non-recurring changes in deferred taxes
- Items related to leases and finance lease arrangements: -
Cancellation of fixed rental expense* on concession agreements -
Depreciation of right-of-use assets on concession agreements -
Interest expense on lease liabilities under concession agreements -
Gains and losses on lease modifications under concession
agreements
- Tax effects of the above items
- Profit (loss) from discontinued operations
- Adjusted profit attributable to minority interests: profit
attributable to minority interests adjusted for minorities' share
in the above items
= Adjusted profit - Group share
* Cancellation of fixed rental expense on concession agreements
is equal to the repayment of the lease liability, the associated
change in working capital and interest paid in the statement of
cash flows.
The reconciliation between profit and adjusted profit - Group
share is set out in the full-year 2019 results presentation, on
slide 34.
Free cash flow is calculated as cash flow from operations before
changes in working capital, the repayment of lease liabilities and
related interest paid, changes in working capital and interest paid
plus net cash flow relating to acquisitions and disposals of
property, plant and equipment and intangible assets.
The reconciliation between cash flow from operations and free
cash flow is set out in the full-year 2019 results presentation, on
slide 32.
Net debt is calculated as the sum of the following items:
- Short-term investments and cash and cash equivalents
- Financial instruments designated as hedges of debt
- Non-current debt
- Current debt
= Net debt
The reconciliation between balance sheet items and net debt is
set out in the full-year 2019 results presentation, on slide
38.
***
A live webcast of the presentation of the
full-year 2019 results will be available today at 5:45 p.m. (CET)
on the Group’s website (www.lagardere.com).
The presentation slides will be made
available at the start of the webcast.
A replay of the webcast will be available
online later in the evening.
***
Created in 1992, Lagardère is an international group with
operations in more than 40 countries worldwide. It employs over
30,000 people and generated revenue of €7,211 million in 2019. In
2018, the Group launched its strategic refocusing around two
priority divisions: Lagardère Publishing (Book and e-Publishing,
Mobile and Board games) and Lagardère Travel Retail (Travel
Essentials, Duty Free & Fashion, Foodservice). The Group’s
operating assets also include Lagardère News and Lagardère Live
Entertainment. Lagardère shares are listed on Euronext Paris.
www.lagardere.com
Important Notice: Some of the statements contained in
this document are not historical facts but rather are statements of
future expectations and other forward-looking statements that are
based on management’s beliefs. These statements reflect such views
and assumptions prevailing as of the date of the statements and
involve known and unknown risks and uncertainties that could cause
future results, performance or future events to differ materially
from those expressed or implied in such statements. Please refer to
the most recent Universal Registration Document filed by Lagardère
SCA with the French Autorité des marchés financiers for additional
information in relation to such factors, risks and uncertainties.
Lagardère SCA has no intention and is under no obligation to update
or review the forward-looking statements referred to above.
Consequently Lagardère SCA accepts no liability for any
consequences arising from the use of any of the above
statements.
1 Aternative performance measure, see definition at the end of
the press release. 2 Lagardère Publishing, Lagardère Travel Retail,
Lagardère News (Paris Match, Le Journal du Dimanche, Europe 1,
Virgin Radio, RFM, the Elle brand licence), the Entertainment
business, the Group Corporate function and the Lagardère Active
Corporate function, whose costs are being wound down by 2020. 3
Restated for the impact of IFRS 16 on concession agreements at
Lagardère Travel Retail, at constant exchange rates and excluding
Lagardère Travel Retail’s acquisition of HBF and IDF. 4 At constant
exchange rates, excluding the impact of Lagardère Travel Retail’s
acquisition of IDF. 5 The adverse impact to date and action plans
are described on page 10 in the “Outlook” section. 6 The Group's
consolidated financial statements have been audited. The audit
report will be signed off once the specific verifications have been
completed. 7 Dates may be susceptible to change
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200227005770/en/
Press Contacts Thierry
Funck-Brentano Tel. +33 1 40 69 16 34 tfb@lagardere.fr
Ramzi Khiroun Tel. +33 1 40 69 16 33 rk@lagardere.fr
Investor Relations Contact
Emmanuel Rapin Tel. +33 1 40 69 17 45 erapin@lagardere.fr
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