Investor Presentation Investor Presentation September 2009 Investor Presentation / 1
Presentation by Dominique D’Hinnin CFO of Lagardère SCA Investor Presentation / 2
Disclaimer Certain 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. When used in this document, words such as “anticipate”, “believe”, “estimate”, “expect”, “may”, “intend” and “plan” are intended to identify forward-looking statements which address our vision of expected future business and financial performance. Such forward-looking 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. These forward-looking statements are based upon a number of assumptions which are subject to uncertainty and trends that may differ materially from future results, depending on a variety of factors including without limitation: General economic and labour conditions, including in particular economic conditions in Europe and North America Legal, financial and governmental risks (including, without limitation, certain market 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. 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. Investor Presentation / 3
Investor Presentation A clear strategy for the future Lagardère is a diversified media group focused on 4 main divisions: Publishing, Active (Press, Radio and TV), Services and Sports • Our diversity (cyclical-acyclical/ mature-non mature businesses/ domestic-international) improves our risk profile • We target market leading positions and 100% ownership in each of our businesses Our strategy is to allocate more capital to higher growth areas • Sports: currently 11% of our EBIT, target of 20% in 4 to 5 years, with average growth of 5% to 7% in sports marketing and rights management • Digital activities: 6.2% of Lagardère Active in 2008, vs. target of about 10.0% in 2010 Shareholder-friendly • Dividend per share has risen by around +8% a year on average since 2003 • We have a track record in share buybacks, including €102m in September/October 2008 following €337m in 2007 Investor Presentation / 4
Investor Presentation Lagardère SCA Key Figures Operating results to end June 2009 confirm our ability to meet our full-year guidance: Revenues: €3,720m / - 3.5% like-for-like and - 2.2% on a reported basis Consolidated recurring EBIT before associates: €186m / - 27.0% Recurring EBIT before associates from €172m / +19.4% Media activities (excl. Lagardère Active): Net income: €318m / - 50.9% Net income adjusted (exc. EADS): €129m / -18.9% Net debt at 31.06.2009: €2,143m vs. €2,731m in 1H 2008 Investor Presentation / 5
Investor Presentation Lagardère SCA 2008 full-year figures 2008 revenues: €8,214m 2008 Media Recurring EBIT: €657m 5% 26 % 11% 37% 19% 43% 26% 33% Investor Presentation / 6
Investor Presentation / 7 Lagardère Publishing
Investor Presentation A Balanced Portfolio of Assets Lagardère Publishing 2008 revenues: €2,159m 2% 11% 13% 22% 4% 31% 7% 8% 2% 20% 10% 18% 34% 18% Investor Presentation / 8
Investor Presentation Competitive Position in the World Book Market Pearson 4 744 Hachette Livre 2 159 1 900 Houghton Mifflin Harcourt* Random House* 1 837 McGraw -Hill Education 1 803 Lagardère Publishing: No.2 1 760 Planeta + Editis* De Agostini* 1 616 2007-2008 sales(*) in € million Scholastic 1 612 1 381 Holtzbrinck* Cengage Learning 1 259 HarperCollins 1 014 901 Shogakukan* Kodansha* 885 Shueisha* 852 812 Reader's Digest 0 1 000 2 000 3 000 4 000 5 000 Note 1: The impact of the 2007 USD exchange rate is dominant for all American players. Note 2: Professional publishing sales have been excluded as far as they could be isolated. * 2007 turnover. Investor Presentation / 9
Investor Presentation What next for Lagardère Publishing? Continued organic growth: • Proactive exploration of business opportunities in large emerging countries • Partworks start-up in Russia to offset decline in mature markets (France, Spain, UK) • Implementation of digital plan to capitalize on growth of e-book market (Extension of Numilog services to UK, Monetization of Larousse.fr, Distribution of digital Text Books) Further consolidation: • Be prepared to seize attractive acquisition opportunities to round out our portfolio: UK, Spain (trade) & USA (trade) Investor Presentation / 10
Investor Presentation Evolution of Lagardère Publishing Recurring EBIT • * 1999-2004 French GAAP ** 2004-2005 IFRS: Recurring EBIT Before Associates after reallocating central costs • *** 2006 onward:post IAS 31 implementation •**** 2009 After management fees charged by Non-Media activities based on the rules applied in 2009 Investor Presentation / 11
Investor Presentation / 12 Lagardère Active
Investor Presentation Broadcast (2008 revenues: €520m) 50% of Lagardère Radio’s business is 40% of the Broadcast business is in in France: our 3 stations (Europe 1, Virgin TV: Radio, RFM) together have nearly 20% • Strong position in TV Production in France audience share… • Successful launch of DTT channels: 3.8% audience share leader o in 4-14 age group in 2008 …50% is in the Rest of the World with 1.3% audience share leader in o strong position in Eastern Europe 15-24 age group in 2008 • Leader in Children’s TV segments with 14.8% national audience share of 4-10 age group • Shareholder of Canal+ France (20%) Investor Presentation / 13
Investor Presentation Evolution of Lagardère Active: Broadcast Recurring EBIT • * 1999-2004 French GAAP ** 2004-2005 IFRS: Recurring EBIT Before Associates after reallocating central costs •*** 2006 onward: post IAS 31 implementation **** 2009 After management fees charged by Non-Media activities based on the rules applied in 2009 Investor Presentation / 14
Investor Presentation Press (2008 revenues: €1,591m) •An international network in 44 countries WESTERN EUROPE 22% 22% • RUSSIA 12% 12% UNITED STATES 19% 19% ASIA & OTHERS 8% 8% Controlled subsidiaries: 128 magazines Joint venture: 40 magazines License: 50 magazines FRANCE 39% 39% Brand extension dynamic 41 editions (39 editions last year) Investor Presentation / 15
Investor Presentation Evolution of Lagardère Active: Press Recurring EBIT • * 1999-2004 French GAAP ** 2004-2005 IFRS: Recurring EBIT Before Associates after reallocating central costs •*** 2006 onward: post IAS 31 implementation **** 2009 After management fees charged by Non-Media activities based on the rules applied in 2009 Investor Presentation / 16
Investor Presentation Lagardère Active: Objectives for 2009 What factors will affect Lagardère Active recurring EBIT in 2009? • A decline in our advertising revenues: other things being equal, each 1% loss of advertising revenue has a negative impact of €8m to €10m on full-year recurring EBIT, before any cost savings • Increases in some operating expenses (especially paper prices): negative impact around €35m on full-year recurring EBIT • The need to continue investing in the businesses and countries of the future (such as the internet, digital terrestrial television and China), and to consolidate our leadership positions: negative impact of around €10m on full-year recurring EBIT Investor Presentation / 17
Investor Presentation Lagardère Active: Objectives for 2009 How have we responded? • Active 2009 Plan – “One Step Further” • Rationalization of the business portfolio • In addition to cost-cutting, we will rationalize our After the Active 2009 plan, which in 2009 will portfolio of businesses: have generated cumulative savings of €86m relative to 2006 (including €20m in full year 2009), • discontinuing, selling or out-licensing we are announcing a new cost-cutting plan to selected magazines achieve €70m of savings from 2009: • refocusing on: • tight control over salaries - strong brands • restructuring in some countries - our leadership positions • renegotiating contracts with printers • enhancing our presence in high-growth • cuts in promotional costs activities: • cuts in editorial costs - digital terrestrial television - emerging markets - digital activities Investor Presentation / 18
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