Lagardère SCA: Quarterly Information – Third Quarter 2012

  Lagardère SCA:Quarterly Information – Third Quarter 2012

    Third-quarter 2012 net sales almost stable: €1,963million (down 0.4%
                             like-for-like^(1)).

    Recurring EBIT^(2) from Media activities guidance for 2012 confirmed.

Business Wire

PARIS -- November 13, 2012

Regulatory News:

Lagardère SCA (Paris:MMB)

Third-quarter 2012

The Lagardère group's activity held up well, notably thanks to a return to
sales growth at Lagardère Publishing and continued development in Travel
Retail at Lagardère Services.

Net sales evolution in line with first half trends, in a more challenging
environment.

In this context, the Group is maintaining its 2012 Recurring EBIT from Media
activities guidance (see page 5).

Third-quarter net sales came out to €1,963million, almost stable (-0.4%
like-for-like and -1% on a reported basis).The negative scope effect amounted
to €46 million and was offset by a positive foreign exchange effect
(€35million).

  *Lagardère Publishing: growth resumption, with net sales of €626million
    (up 4.2% on a reported basis, up 0.1% like-for-like). As announced
    previously, activity recovered in the third quarter, with General
    Literature rising sharply in France (+12.4%), the United Kingdom (+17%)
    and the United States (+7.3%), particularly thanks to the release of J.K.
    Rowling's latest novel The Casual Vacancy.
  *Lagardère Active: net sales of €222million, down 11.5% like-for-like and
    down 17% on a reported basis. This difference is primarily due to negative
    scope effect associated with the sale of the final components of
    International Magazine Publishing (PMI) and Radio businesses in Russia.
    Excluding this effect, the slowdown in activity was mainly due to
    temporary delivery shifts to year-end for TV Production activities and to
    a contraction in the advertising market.
  *Lagardère Services: net sales totalled €1,008million, almost stable on a
    reported basis (-0.3%) but up 2.1% like-for-like. In line with its
    development strategy, Travel Retail rose 7.7%, continuing its growth
    trend, while Distribution activities declined (-4.1%).
  *Lagardère Unlimited: net sales of €107million, up 4.1% on a reported
    basis, but down 3.2% like-for-like, primarily due to a less favourable
    sport event schedule.

^(1) At constant scope and exchange rates.

^(2) Recurring EBIT before associates. See definition at the end of the press
release.

At September 30, 2012

Net sales totalled €5,352million and were stable on a like-for-like basis
(-0.3%), but declined on a reported basis (-6.2%). The difference between
like-for-like and reported data is primarily due to a negative scope effect of
€414million, notably caused by Lagardère Active's disposals of PMI, and Radio
activities in Russia in 2011 and, to a lesser extent, Relay's businesses at
Aéroports de Paris now being consolidated using the equity method. This scope
effect was partially offset by a positive foreign exchange effect of
€76million.

I. GROUP CONSOLIDATED NET SALES AND ACTIVITY

                      Net sales (in €m)      Change
                       At         At         Reported   Like-for-like
                       September   September   change      change
                     30, 2011   30, 2012   2012/2011  2012/2011
LAGARDÈRE             5,706      5,352      -6.2%      -0.3%
Lagardère Publishing   1,501       1,531       2%          -1.4%
Lagardère Active       1,074       672         -37.5%      -6.3%
Lagardère Services     2,815       2,829       0.5%        2.3%
Lagardère Unlimited   316        320        1.4%       -4.5%

                      Net sales (in €m)  Change
                                         Reported   Like-for-like
                       Q3 2011   Q3 2012   change      change
                                     2012/2011  2012/2011
LAGARDÈRE             1,982    1,963    -1%        -0.4%
Lagardère Publishing   601       626       4.2%        0.1%
Lagardère Active       267       222       -17%        -11.5%
Lagardère Services     1,011     1,008     -0.3%       2.1%
Lagardère Unlimited   103      107      4.1%       -3.2%

  *Lagardère Publishing

Net sales at September 30, 2012 totalled €1,531million, -1.4% on a
like-for-like basis, an improvement compared to June 30, 2012 (-2.4%). A solid
performance by General Literature in the third quarter enabled to improve net
sales trend, as announced for the second half of 2012.

Third-quarter 2012:

Sales increased 4.2% on a reported basis and 0.1% like-for-like. The
difference is mainly due to a positive foreign exchange effect of €26million,
attributable to the US dollar and pound sterling.

Of note during the third quarter was the stellar performance by General
Literature, which was driven particularly by the late-September publication of
J.K. Rowling's novel The Casual Vacancy in English and French.

The success of EL James' novel Fifty Shades of Grey sales, published in France
by the Group’s division, is not included in the third-quarter figures: these
sales will be included in the fourth quarter.

This solid performance by General Literature was somewhat mitigated by the
slowdown seen in Education across all markets (France, Spain and the United
Kingdom).

In France: The excellent performance posted by General Literature (+12.4%),
following the success of novels by J.K. Rowling, Michael Connelly's The
Reversal and Grégoire Delacourt's La Liste de mes envies, does not offset
entirely the difficult trends in Education (-5.9%), with the education
programme renewal effect being more limited this year.

Distribution trends were also fairly poor.

Overall activity was down (-3.8%).

In English-speaking countries: General Literature rose sharply in the United
States (+7.3%) and the United Kingdom (+17%), with the publication of J.K.
Rowling's novel in these two markets and a generally strong schedule of new
releases in the United Kingdom.

In Spain: activity declined (-5.4%) in trade and to a lesser extent in
Education on the Spanish market, partially offset by a significant rise in
activity on the Mexican market.

Solid performance by Partworks (+2.6%), which are enjoying major success in
Japan and the United Kingdom, should also be noted.

E-books continued their rise and accounted for 20% of total third-quarter
Adult trade book sales in the United States and 20% in the United Kingdom,
thereby representing 6.4% of total net sales in the Lagardère Publishing
division. The relative decline in e-books proportion compared to first half is
due to timing differences between the recognition of physical book sales and
digital sales, regarding mainly J.K. Rowling’s book copies.

  *Lagardère Active

Net sales totalled €672million as of the end of September 2012, down 6.3%
like-for-like and down 37.5% on a reported basis. The difference between
reported and like-for-like sales is mainly due to a negative scope effect of
€357 million, primarily associated with the sale of PMI and Radio activities
in Russia.

The decline in activity over the first nine months of the year is largely due
to a sharp contraction in the advertising market (with advertising revenues
down 7.4% over the period), in addition to negative comparison effect for
circulation (see below). Note, however, that the Group’s division is showing
greater resilience in circulation than the market as a whole, thanks to its
brands’ leading positions in the women's high-end segment.

Third-quarter 2012:

Net sales totalled €222million, down 11.5% on a like-for-like basis. There
was a more marked downturn this quarter on advertising, down 8.6%.

Magazine Publishing: the decline in net sales (-7%) is primarily due to the
drop in advertising (-8%) and circulation (-9%) revenues. This decline in
circulation is partially explained by an unfavourable basis for comparison,
since the third quarter of 2011 had benefited from a highly eventful season.
However, the women's high-end segment (Elle) held up well, with, in addition,
the overhaul of Be magazine, which was well-received by advertisers.

Radio: the worsening advertising environment in France explains the drop in
sales by Radio in France (-7.3%), specifically music radio. International
radio activity also declined substantially (-13.6%).

TV production: The delays in delivery schedule, that weighted on the third
quarter, should be offset at year's end with deliveries scheduled for the
fourth quarter, specifically the series of Transporter, the series, Borgia
(season 2) and Jo (starring Jean Reno). Overall, activity was down 35%.

TV channels are still posting a positive dynamic (+3.7%).

Digital activities are down (-9.5% on a like-for-like basis) due to the
adverse developments at NextIdea, which was sold off by the Group’s division
in September. For LeGuide.com, growth continues, with activity up +10.5% in
the third quarter. LeGuide.com activities were consolidated starting July 1^st
and accounts for €10million of Lagardère Active's third-quarter sales.

  *Lagardère Services

Net sales totalled €2,829million at September 30, 2012, up 0.5% on a reported
basis or 2.3% on a like-for-like basis. The difference is explained by a scope
effect (-€59million) notably due to the move to the equity method when
consolidating Relay’s businesses at Aéroports de Paris and, to a lesser
extent, for Duty Free in Lyon. The foreign exchange effect was slightly
positive (+€10m).

Over the first nine months of the year, activity benefited from the solid
dynamic of Travel Retail, up 8.6% in all geographic areas. Growth was
especially strong in France in Duty Free (+17.4% for Aelia) and Central Europe
(+17.3% in Poland), but also in the United Kingdom (+12.5%) and in Germany
(+10.7%). Asia posts strong growth figures (+33%) thanks to the extension of
the network.

Third-quarter 2012:

Net sales totalled €1,008million, down 0.3% on a reported basis and up 2.1%
like-for-like. Continued evolution of the division’s activity mix, with Travel
Retail totalling now 56% of net sales (+3 points compared to 3^rd quarter
2011), versus 44% for LS distribution (Integrated retail and Press wholesale
distribution).

LS travel retail:

Travel Retail posted 7.7% growth, driven by the good trend in airport
activities, especially in France (+15.9% with modernization of points of sale
in Paris and the good performances of travel retail platforms in the
provinces) and Eastern Europe (+14.6% in Poland, thanks to good performances
by Duty Free and development of foodservice activities). Business grew sharply
in Asia (+27%), thanks to the development of new concepts in Singapore and new
concessions won in Malaysia.

LS distribution:

Distribution was down 4.1% due to the structural decline in print products and
the economic crisis in Spain.

Activity trend is slightly improving compared to the first half, thanks to a
favourable comparison effect especially in the United States and Switzerland.

Hungary and Canada recorded respectively +4.2% and +3.2% growth thanks to
diversification efforts.

Lagardère Unlimited

Net sales at September 30, 2012 totalled €320million, up on a reported basis
(+1.4%), and down on a like-for-like basis (-4.5%). This is essentially
explained by the sporting events calendar: the non-occurrence of the Asian Cup
in 2012 was only partially offset by the Olympic Games qualifying matches, the
ACN^(3) and good performances on soccer clubs in Germany.

Third-quarter 2012:

Net sales stand came out to €107million, up on a reported basis (+4.1%) and
down on a like-for-like basis (-3.2%), with the difference reflecting positive
scope and foreign exchange effects.

Good performance by Sportfive, with net sales up 8.4%, due to the good
performance of European federations' activities (qualifying matches for the
2014 World Cup).

These positive trends were offset by a lag in sports events in Asia in the
fourth quarter, as well as difficult conditions in the US, which had a
negative impact on attendance and sponsorship revenues.

^(3) Africa Cup of Nations.

II. Key events since June 30, 2012

  *On October 17, 2102, Lagardère launched a bond issue totalling €500
    million with five-year maturity (October 2017) and a 4.125% annual coupon.
    About €118 million of the proceeds from that issue have already been
    allocated to reducing the amount of the €1 billion bond maturing in
    October 2014. The balance is allocated to the partial repayment of amounts
    drawn on the syndicated bank loan.

  *Lagardère Services consolidates its position in Duty Free with the
    acquisition on September 28, 2012, of the activities of AdR Retail,
    enabling LS travel retail to become the exclusive operator of eight duty
    free/duty paid shops in Rome’s airports (Fiumicino and Ciampino). This
    acquisition, on a major tourist location, represents a significant growth
    potential, with notably important retail space extensions throughout the
    duration of the contract, including +50% in 2013. Lagardère Services
    became thus the N°2 in Europe on this business sector.
    Furthermore, Lagardère Services made an entrance in July in the core duty
    free market in the Pacific region with the acquisition of DFS Wellington
    in Australia and New-Zealand.
  *In September 2012, Lagardère Active launched an additional bid for the
    shares of LeGuide.com, the leading online shopping comparator, of which it
    has already owned 61.4% of the capital since June 2012. Per this
    additional bid, the Group thus holds 96.5% of the company's capital in
    all, for a total amount of €74 million, net of acquired cash.
  *On September 19, 2012, Lagardère Publishing agreed to an amicable
    settlement of the lawsuit brought by the European Commission regarding the
    distribution of e-books. As was the case in the United States a few months
    earlier with the US Department of Justice (DoJ), Lagardère Publishing has
    committed to renegotiating its agency contracts with distributors to allow
    them more flexibility in setting sale prices for a two-year period.

III. Outlook

  *Profitability

With the third-quarter trends and the year-end outlook, the Group maintains
the target Recurring EBIT from Media activities, per the terms set out on
March 8: not including the two components described below, and at constant
scope (not including PMI and Radio activities in Russia) and exchange rates,
2012 Recurring EBIT from Media should be stable compared to 2011.

The two factors not included in this target, which concern Lagardère
Unlimited, are as follows:

- provision for risk related to the contract with the IOC, of which
€22million was contracted in the first half;

- the potentially positive settlement of the dispute with the Board of Control
for Cricket in India.

  *Financial Position

The Group's financial position remains solid, with good liquidity and
diversified financing sources. The bond issue launched in October 2012 has
consolidated this situation, extended the average debt maturity, and further
balanced out the repayment schedule.

Net debt is predicted to rise slightly at year's end versus end 2011, due to
the financial investments made (acquisition of LeGuide.com for €74million and
AdR Retail for €229million). On the other hand, working capital requirements
are enjoying a favourable seasonal effect, as usual in the second half of the
year, specifically for Lagardère Publishing.

Investor calendar

  *Announcement of 2012 net sales
    2012 full-year net sales will be released on February 7, 2013 at 8:00a.m.
    A conference call will be held at 10:00a.m. on the same day.

  *Announcement of 2012 full-year results
    2012 full-year results will be released on March 7, 2013 at 5:35p.m. A
    presentation meeting will take place on the same day at 5:45p.m.

DEFINITION OF RECURRING MEDIA EBIT

Recurring Media EBIT of consolidated companies is defined as the difference
between result before financial charges and tax and the following items of the
profit and loss statement:

  *contribution of associates;
  *gains or 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;
       *amortization of acquisition-related intangible assets.

Lagardère is a world-class pure-play media group (Book and e-Publishing;
Press, Audiovisual, Digital and Advertising Sales Brokerage; Travel Retail and
Distribution; Sport Industry and Entertainment).

With a holding of around 7.5%, Lagardère jointly controls EADS.

Lagardère shares are listed on Euronext Paris.

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 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 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.

Lagardère SCA disclaims any intention or obligation to update or review the
forward-looking statements referred to above. Consequently Lagardère SCA is
not responsible for any consequences that could result from the use of any of
the above statements.

Contact:

Lagardère SCA
Press:
Thierry FUNCK-BRENTANO, +33 (1) 40 69 16 34
tfb@lagardere.fr
or
Ramzi KHIROUN, +33 (1) 40 69 16 33
rk@lagardere.fr
or
Investor Relations:
Anthony MELLOR, +33 (1) 40 69 18 02
amellor@lagardere.fr