Lagardère SCA: Quarterly Information - Third Quarter of 2009

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2009 objectives reiterated

Lagardère SCA consolidated revenues to end September 2009:
down 3.7% on a reported basis and 3.9% on a like-for-like basis(1).
PARIS--(Business Wire)--
Regulatory News:

Lagardère SCA (Paris:MMB) consolidated revenues for the nine months to end
September 2009 totaled €5,820m, representing a fall of 3.7% on a reported basis
and of 3.9% on a like-for-like basis.

The difference between the falls in revenues on a reported basis and on a
like-for-like basis was marginal. Changes in the scope of consolidation had a
positive effect of €93m, mainly due to the full consolidation of WSG from
January 1, 2009. This was virtually canceled out by adverse exchange rate
effects of €84m (fall in sterling and some Eastern European currencies against
the euro, partly offset by the rise in the U.S. dollar).

Key trends during the third quarter of 2009 on a like-for-like basis were:

* Lagardère Publishing - Sales still growing strongly despite a tough
comparative, driven by a very good autumn literary season in France combined
with double-digit growth in the United States despite the slowing of the
Stephenie Meyer phenomenon.
* Lagardère Active - Pace of contraction in revenues virtually the same as for
the first half of 2009. Broadcast faring better than Press, but still a very
mixed picture from country to country. Advertising revenues down by some 25% on
a deterioration for Magazines in France and International Radio activities,
partly mitigated by an improvement in the trend for French Radio activities.
* Lagardère Services - Similar trends to the first half of 2009. Press
Distribution revenues down by just over 8.0% (or 6.5% excluding the closure of
operations in Poland), with Retail revenues holding steady.
* Lagardère Sports - Marked drop in revenues due to a tough comparative, less
favorable timing of sporting events than in the third quarter of 2008, and a
slowdown in business in Europe.

We are reiterating our guidance of a fall in recurring EBIT before associates
(excluding Lagardère Active) of between zero and no more than 10% at constant
exchange rates. Although economic conditions remain very tough, our objective is
to reach the upper end of this guidance range.

(1) Excluding changes in scope of consolidation and the effect of exchange
rates.

Revenues (€m) Change Change
2009/2008
2009/2008
(reported)
(like-for-like)
2009: 2009: 2009: 2008:
Q1 H1 9 months 9 months
LAGARDERE 1,778.1 3,720.0 5,819.8 6,042.0 (3.7%) (3.9%)
-Lagardère Publishing 462.8 1,009.1 1,693.7 1,563.4 8.3% 8.8%
-Lagardère Active 399.2 831.2 1,226.1 1,516.4 (19.1%) (17.9%)
-- Press 310.0 633.3 939.8 1,176.4 (20.1%) (19.1%)
-- Broadcast 89.2 197.9 286.3 340.0 (15.8%) (13.5%)
-Lagardère Services 782.4 1,618.9 2,516.6 2,613.3 (3.7%) (2.5%)
-Lagardère Sports 133.7 260.8 383.4 348.9 9.9% (12.0%)

I - Revenues

Lagardère Publishing

Revenues for the nine months to end September 2009 were €1,694m, up 8.3% on a
reported basis and 8.8% on a like-for-like basis. Sales grew again in the third
quarter of 2009, rising by 5.1% on a like-for-like basis.

Trends in the various regions during the third quarter of 2009 are described
below:

* In the United States, the pace of sales growth remained very strong through
the summer at over 15% despite a tough comparative, the success of the Stephenie
Meyer saga (Breaking Dawn, New Moon, Twilight and Eclipse) having begun in July
2008. The main growth drivers were books by Edward Kennedy (True Compass), Uwem
Akpan (Say You're One Of Them), Kaylie Jones (Lies My Mother Never Told Me) and
Malcolm Gladwell (Outliers).
* There was further sales growth in the United Kingdom but Spain reported a
slight dip, mainly due to lower sales in Education.
* In France, the autumn literary season was highly satisfactory, with a number
of success stories including books by Justine Lévy (Mauvaise fille, Stock),
Frédéric Beigbeder (Un roman français, Grasset), Alexandre Jardin (Quinze ans
après, Grasset), Françoise Sagan (Toxique, Stock), Sylvie Brunel (Manuel de
guérilla à l'usage des femmes, Grasset) and Antony Beevor (D-Day, Calmann-Lévy).
This performance represents a marked upswing in the quarter.
* Partworks experienced an upturn, mainly in France and Japan.

Lagardère Active

Third-quarter revenues totaled €1,226m, a fall of 19.1% on a reported basis and
of 17.9% on a like-for-like basis, in line with the trend to end June (down
17.7% on a like-for-like basis).

The rate of decline in revenues (excluding the effect of discontinued and
divested titles) was in line with that recorded in the first six months of the
year. In Magazines, the third-quarter figures confirmed the trends observed
during the second quarter: the decline has stabilized in the international
business but deteriorated in France. In Radio, there is a very mixed picture
from region to region, with revenues falling in the international business but
improving in France thanks to good results at Europe 1.

Digital activities accounted for 7.3% of Lagardère Active revenues to end
September 2009 (versus 6.2% in the comparable period of 2008), in line with the
objective of 5%-10% of sales in 2009.

Press

Sales for the Magazines business for the nine months to end September 2009 were
down 20.1% on a reported basis and 19.1% on a like-for-like basis at €940m.

The main trends in advertising revenues in the third quarter of 2009 were:

* A slightly less marked contraction for Magazine Publishing France than for the
international business. The drop in 2009 third-quarter revenues in France was
mainly due to a reduction in advertising spend by the fashion industry, which
hit September sales hard.
* Stabilization in the trend for Magazine Publishing International, with the
pace of contraction still around 30%. The various regions experienced mixed
fortunes. Spain, and to a lesser extent the United States, reported less
negative trends than in the second quarter of 2009, reflecting a more flattering
comparative. There were no significant changes in trends in other countries.
Market share advanced slightly in all countries, especially in the Women`s
segment (where Lagardère is strongest).

Same-title circulation revenues fell by around 5% in the third quarter of 2009,
in line with the trend to end June, again with a mixed picture from country to
country. The situation continues to be better in France, where Lagardère is
still building market share.

Broadcast

Broadcast revenues for the nine months to end September 2009 amounted to €286m,
down 15.8% on a reported basis and 13.5% on a like-for-like basis (versus a
15.0% fall to end June). This reflects an improvement in the third quarter of
2009 (fall of 9.9% on a like-for-like basis), due largely to the effect of the
comparative base.

* Radio

In France, revenues contracted by just 5% in the third quarter of 2009, showing
a very marked improvement relative to a first half that saw advertising revenues
fall by over 15%. Europe 1, which reported growth in the third quarter of 2009,
again significantly outperformed the music stations RFM and Virgin Radio, which
saw a double-digit decline. Over the nine months to end September 2009, the
international radio business reported a similar trend to that seen in the first
half of the year, with a contraction of over 20%.

* Television

The pace of contraction in Television revenues slowed in the third quarter of
2009 thanks to a recovery in program deliveries (in particular, some TV series)
at Lagardère Entertainment. Advertising revenues for digital terrestrial TV
again recorded slight growth.

Lagardère Services

Divisional sales for the nine months to end September 2009 were €2,517m, down
2.5% on a like-for-like basis and 3.7% on a reported basis, which is close to
the rate of contraction reported in the first half of the year. Compared with
the nine months to end September 2008, the division has had to bear negative
exchange rate effects of €60m, mainly due to rises in the average rate of the
euro against the Polish zloty (28% rise) and the Hungarian forint (14% rise).

Retail (which accounts for two-thirds of Lagardère Services revenues) held
steady thanks to the opening of new sales outlets, while press distribution
revenues fell by more than 8% (or 6.5% excluding the effect of the closure of
operations in Poland).

* Revenues at Aélia are being eroded by reduced air travel, and this trend
accelerated slightly in the third quarter of 2009. Conversely, the slight
uptrend in sales at Relay France seen in the second quarter was confirmed, even
though the print media market remained depressed.
* Retail activities followed the same trends as in the first half of the year:
double-digit growth in Romania thanks to expansion of the store network, limited
growth in Germany and the Czech Republic, and a decline in sales in Hungary. In
Spain, the trend - though still negative - was more favorable than in the first
half of the year.

The press distribution business showed a further fall, especially in the United
States and Spain, though the decline was less marked elsewhere in Europe.

Lagardère Sports

Lagardère Sports reported sales of €383m for the first nine months of 2009, up
9.9% on a reported basis but down 12.0% on a like-for-like basis. The difference
between the reported-basis and like-for-like figures was mainly due to the full
consolidation of WSG from January 1, 2009.

As expected, like-for-like revenues fell in the third quarter of 2009 due to a
particularly challenging comparative (31% like-for-like growth in the third
quarter of 2008, driven by major sporting events in the period, especially the
Euro 2008 football tournament). The third quarter of 2009 was also affected by
harsher market conditions in Europe, leading to a decline in some media rights
(especially in the United Kingdom) and in sponsorship contracts.

II - Significant events affecting the financial position and
results of Lagardère SCA at September 30, 2009

* Recurring EBIT before associates
* Given the trend in reported-basis consolidated revenues, Lagardère Media EBIT
before associates fell year-on-year in the nine months to end September 2009,
with the erosion in revenues at Lagardère Active only partially offset by the
cost-cutting measures announced in March 2009. For the other divisions, while
Lagardère Publishing is well ahead of budget, the situation is less favorable at
Lagardère Services and Lagardère Sports.
* The contribution from EADS (accounted for as an associate) was included on the
basis of a 10.0% interest through March 2009. This percentage has been reduced
to 7.5% for the rest of the year following the delivery of the final tranche of
the Mandatory Exchangeable Bonds (exchangeable for EADS shares) to Natixis on
March 24, 2009.
* Non-recurring items mainly comprise the gain on disposal of the EADS shares,
restructuring costs at Lagardère Active, and impairment losses charged against
certain intangible assets.

* Net interest expense

The fall in net interest expense reflects the effect of the redemption of the
Mandatory Exchangeable Bonds in March 2009, combined with the impact of lower
interest rates.

* Net debt

The main items impacting consolidated net debt are as follows:

* the dividend payout of €194m;
* the €664m proceeds from the disposal of EADS shares on redemption of the final
one-third tranche of the Mandatory Exchangeable Bond.
* Other significant events during the third quarter of 2009

None of Lagardère`s divisions made any significant acquisitions during the
quarter.

Report of the examiner appointed by the AMF Enforcement Committee

The report of the examiner appointed by the Enforcement Committee of the
Autorité des Marchés Financiers (AMF) in connection with the investigation into
dealings in EADS shares was delivered on July 28, 2009, and completely
exonerated the Lagardère Group.

Successful bond issue

On September 24, 2009, the Group launched and set the terms of its first-ever
public bond issue. The 5-year issue, which raised €1bn, matures in 2014 and
bears annual interest of 4.875%. This issue has enabled Lagardère SCA to
diversify its sources of finance and extend the average maturity of its debt.
The proceeds of the issue will be used primarily to repay the syndicated loan
maturing 2012.

III - Outlook

Given a more favorable comparative (lower revenue growth in the fourth quarter
of 2008), the decline in revenues for the fourth quarter of 2009 could be less
marked than that reported in the nine months to end September.

Unlike the other divisions though, Lagardère Publishing faces a particularly
challenging fourth-quarter comparative, as the success of the Stephenie Meyer
saga drove like-for-like sales growth to 6.0% in the fourth quarter of 2008.
While the division`s prospects for the final quarter of 2009 still look good,
given the publication in France of Dan Brown`s latest and the new Astérix book,
the pace of growth is likely to slow considerably.

For Lagardère Active, visibility remains very poor, and we can expect the
downtrend seen in the third quarter of 2009 to continue. Nevertheless, the
decline could be slightly less marked at the end of the year thanks to a more
favorable comparative.

Lagardère Services will enjoy a more favorable comparative, while a recovery in
air traffic could lead to a slight recovery in the pace of top-line growth,
especially in Asia.

Lagardère Sports is set for a difficult end to the year given the tensions in
the European media rights market (fallout from the collapse of Setanta Sports)
and, to a lesser extent, in the sponsorship market.

In light of these factors, we are reiterating the guidance for Media recurring
EBIT before associates that we issued in March 2009:

As regards Lagardère Active, we would point out that:

* Each 1% loss of advertising revenue has a negative impact of between €8m and
€10m on recurring EBIT before associates over a full year before any cost
savings, on top of which come the unavoidable knock-on effect of rises in some
operating costs (approximately €35m) and the cost of continuing with our
initiatives to prepare for the future (approximately €10m).
* Cost savings arising from measures already taken and from the additional
measures announced in March 2009 (One Step Further plan) are expected to have a
positive impact of at least €90m in 2009. At end September, progress on the One
Step Further cost-cutting plan was slightly ahead of forecasts.

For our other activities, we are reiterating our guidance of a fall in recurring
EBIT before associates of between zero and no more than 10% at constant exchange
rates. Although economic conditions remain very tough, our objective is to reach
the upper end of this guidance range.

Lagardère is a pure media group (books, press, broadcast, digital, travel retail
and press distribution, sports trading and sports rights), and is among the
world leaders in the sector.

Lagardère holds a 7.5% stake in EADS, over which it exercises joint control.
Lagardère shares are listed on Euronext Paris.

Lagardère SCA
Press
Thierry Funck-Brentano, +33 (0)1 40 69 16 34
tfb@lagardere.fr
or
Ramzi Khiroun, +33 (0)1 40 69 16 33
rk@lagardere.fr
or
Investor Relations
Virginie Banet, +33 (0)1 40 69 18 02
vbanet@lagardere.fr

Copyright Business Wire 2009