Credit investor presentation
This document presents the full-year 2014 results from the consolidated financial statements of SCA. This document does not constitute the Annual Financial Report (Rapport Financier Annuel) within the meaning of article L. 451-1-2 of the French monetary and financial Code (Code monétaire et financier). 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 SCA. These data do not represent forecasts within the meaning of European Regulation No. 809/2004, as amended. Disclaimer 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 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. Please refer to the most recent Reference Document (Document de référence) filed by 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 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 SCA nor any of its subsidiaries are liable for any consequences that could result from the use of any of the above statements. This document does not constitute an offer or invitation to sell or purchase, or any solicitation of any offer to purchase or subscribe for, any securities of SCA. Neither this document, nor any part of it, shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This document is solely for your information on a confidential basis and may not be reproduced, redistributed or sent, in whole or in part, to any other person, including by email or by any other means of electronic communication. In particular, neither this document nor any copy of it may be taken, transmitted or distributed, directly or indirectly, in the United States. The distribution of this document in other jurisdictions may be restricted by law and persons into whose possession this document comes should make themselves aware of the existence of, and observe, any such restrictions. SCA securities have not been and will not be registered under the U.S. Securities Act of 1933 (as amended), and may not be offered or sold in the United States (or to, or for the account or benefit of, U.S. Persons) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. 2
1) Group profile Table of content 2) Group strategy 3) Acquisition of Paradies 4) Group outlook 5) Key credit highlights and transaction rationale 6) Appendix 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 #3 in Travel Retail More than 4,000 shops in 29 countries and 150 airports worldwide Strong expertise in three business lines Duty Free & Luxury Food Services, Travel Essentials Leading magazine publisher 27 French titles 84 international editions under license French #1 TV Production Group France #1 Internet & mobile media Group Major player in Radio Leading global sport rights management agency Leading positions in soccer in Africa, Asia Germany and France Marketing and media rights management, stadium businesses, event production * Services changed its name to Travel Retail in July 2015. It still includes revenues from the Distribution division, to be sold. 5
A balanced business mix and a worldwide presence Active 13% Breakdown of sales by division in 2014 Sports and Entertainment 5% Publishing 28% Travel Retail 53% Breakdown of recurring EBIT by division in 2014 Sports and Entertainment 1% Active 19% Travel Retail 28% Publishing 52% Breakdown of sales by geographic area in 2014 USA/Canada 10% France Western Europe 35% Latin America, Africa, Middle East 34% Eastern Europe 12% Asia/Pacific 7% Presence in more than 30 countries Developed markets*: 79% 2% Emerging markets*: 21% * As % of total net sales 6
Group strategy
Growth potential 12% Invest 10% 8% Digital Travel Retail Businesses growth profile 6% 4% 2% TV Production Sports Broadcasting* Adapt 0% -2% -4% Press wholesale Distribution Book Publishing -6% Magazines -8% 0 2 4 6 8 10 12 Divest Market position *Radio + TV channels. N.B: Size proportional to sales. 8
Megatrends: Impact: 3 pillars strategy: From megatrends to strategic roadmap Digitalisation Mobility Audience fragmentation Value shift to customer knowledge (data management) 1 2 Reduce exposure to declining activities Adapt existing activities and enhance leadership positions Increase in emerging countries wealthy & middle class Globalisation 3 Invest in higher growth activities Increase in air traffic 9
Successful deals in 2014 and 2015 Press distribution and integrated retail 1 Reduce exposure to declining activities (1/2) December 2014 February 2015 July 2015 Sale of 51% of Inmedio (high-street retail in Poland) Disposal of Swiss Distribution business (ex Payot Naville Distribution) Disposal of Curtis Circulation Company, a US magazines distribution business Magazines July 2014 Disposal of 10 titles in France The disposal of the remaining wholesale press distribution and Integrated Retail activities (in Spain, Hungary, Belgium) is a major priority. The divestment process is well on track. 10
As % of consolidated sales 1 Reduce exposure to declining activities (2/2) 100% 80% 60% 40% 20% 72% 28% 70% 30% 67% 33% Paper activities represented less than 50% of total sales for the first time in 2013 65% 63% 35% 61% 37% 39% 54% 46% 51% 49% 51% 49% 54% 46% Medium term target 2/3 1/3 Paper Non paper 0% 2003 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (e) (e) (e) Paper Non paper Publishing Paper books, partworks, etc. E-books, audiobooks Travel Retail Books, press distribution Other (tobacco, fashion & cosmetics, etc.) Active Magazines Broadcasting, TV production, licensing, digital Sports and Entertainment - 100% non paper
2 Adapt existing activities and enhance leadership position (1/4) Publishing Successful transition to e-book (detail slide 34) Rounding out of porfolio through select acquisitions in the UK: Constable & Robinson and Quercus (fiction and non fiction) Rising Star (primary school textbooks) On-going success of Partworks, developed in house Active Musical radios: developments in Africa (Senegal). Digital: initiatives in e-medical businesses: MonDocteur.fr: first online booking website of medical consultations; Doctripharma.fr: service company allowing French pharmacies to create their own online dispensary. TV / Gulli: now owned at 100% after the acquisition of the 34% minority stake; still the No.1 kids French channel. 12
Travel Retail (1/2) The strategic transformation of the division is well on track: 2 Adapt existing activities and enhance leadership position (2/4) Lagardere Travel Retail*: business mix 26% 24% 22% 16% 15% 18% LTR Distribution distribution (to be (to sold) Wholesale Distribution Integrated Retail 63% LS Travel Retail 60% Travel retail 56% 2012 2013 2014 * Services changed its name to Travel Retail in July 2015. It still includes revenues from the Distribution division, to be sold. 13
Travel Retail (2/2) 2 Adapt existing activities and enhance leadership position (3/4) A significant improvement of the product-mix thanks to the strategy aimed at strengthening the footprint in airports. Travel Retail: mix segment % of IFRS reported sales Travel Essentials * 62% 58% 50% Decreased print exposure Duty Free & Luxury ** 29% 33% 35% Duty Free development Food Services 9% 9% 15% 2012 2013 2014 * News & convenience, gifts & souvenirs, electronics & media. ** Fashion, alcohol & liquors, perfumes & cosmetics, tobacco. 14
Sports and Entertainment The recovery plan is well on track, with a positive recurring EBIT in 2014, despite the negative calendar of events that year. 2 Adapt existing activities and enhance leadership position (4/4) Ongoing strategic transition: a new Executive Committee, a more integrated organisation and the turnaround of the business in Europe. A significant change of the business mix, aimed at delivering a more regular performance. Lagardere Sports and Entertainment: business mix 43% 42% 48% 17% 20% Arena Castela o in Brazil 33% 40% 38% 19% Marketing rights Other activities * 2012 2013 2014 *Stadium management, brand consulting, entertainment. Media rights 15
Recent deals in 2015 Travel Retail April 2015 Acquisition of 17 stores at JFK Airport (New York) 17 fashion and candy sales outlets spread over 1,700 m² in Terminal T4 3 Invest in higher growth activities (1/2) August 2015 Signature of an agreement for the acquisition of Paradies, an airport travel retail leader in North America operating in more than 76 airports (Canada and US airports). Creation of the 2 nd largest player in the North American airport travel retail industry. See slide 18. TV Production May 2015 Acquisition of 82% of Grupo Boomerang TV Leading independent TV Producer in Spain. Sports April 2015 Acquisition of UFA (soccer marketing in Europe, especially in Germany) 16
Organic growth drivers of travel retail 3 Invest in higher growth activities (2/2) 1. Strong and regular growth of global air traffic (+4% per year) 2. Increase of emerging country passengers travelling in mature countries 3. Increasing externalization of travel retail shops by landlords 4. Increased surface dedicated to travel retail in airports and train stations Roissy Charles De Gaulle airport, Paris Rest of the world 0,9 North America Global traffic growth [Bn passengers / 2013-2021] ASPAC 1.4 Europe 1.6 5,3 0,8 1,5 1,4 1,6 0,9 0,5 4 % 5 % 2 % 7 % 3 % 2.4 7,5 1,2 1,8 2,4 2,1 2.1 X% CAGR. 2013 2021 Source :, ACI. 17
Acquisition of Paradies
Transaction overview Transaction summary EBITDA, synergies and implied multiple Message on antitrust to be discussed with legal counsel Acquisition of Paradies, an airport travel retail leader in North America 100% of the equity of Paradies holding company, Representing c. 80% of Paradies activities in aggregate (in accordance with US regulation Paradies activities are operated in each airport with dedicated legal entities including minority partners, which represent c. 20% of the Enterprise Value of the Paradies Group) Purchase price: $530m1 i.e. 485m Creation of the second largest player in the North American airport travel retail industry Key figures in 2015 2 : operations in more than 76 airports, sales of $515m ( 471m), EBITDA of $62m (12% margin) i.e. 57m Attractive synergy potential: run rate of c. $15m 3 p. a. the 4 th year following the acquisition Transaction proportional EBITDA multiple around 7.5x, based on Fiscal Year 2016 2 estimated EBITDA, pro forma for the run rate synergies Financing $530m underwritten acquisition bridge financing with a 2-year maturity Closing Expected in Q4 2015 (antitrust clearance obtained on September 4, 2015) Conditions to closing: third parties consents 1 On a cash and debt free basis,subject to final adjustment. All figures in USD are converted in at August the 6th 2015 exchange rate : 1.0929 USD for 1 euro 2 Fiscal year ending on 28 June, US GAAP consolidated figures 3 Pre-tax synergies 19
Strategic rationale An attractive market undergoing major redevelopments, thus creating opportunities for retailers An appealing opportunity A large and resilient market ($7.7bn) still relatively fragmented A significant potential for growth: Increasing commercial development of airports (expansion in concessions space and improvement of passengers flow) Rising spending per passengers Good traffic forecasts (+3% from 2015 to 2021 and +2% for the following decade 1 ) A complementary geographical footprint (together Travel Retail and Paradies activities will cover most top North American airports) Paradies local brands combined with access to global brands will significantly enhance the brand portfolio and airports needs The opportunity to acquire a strong and respected pure travel retail player: Historical player with sustainable and profitable growth Large and high-quality brand portfolio A deal with strong potential synergies: (i) central costs and buying power, estimated at $15m per year (run rate basis), and (ii) business development opportunities Paradies has a very strong and experienced management team with diverse capabilities to drive growth and provide best-in-class solutions for its customers, being the travelers, landlords and brands A resilient business profile Diversified and long term concession portfolio with operations in more than 76 airports Strong renewal track record (due to reputation + landlord relationship + recognized quality of operation) Family business since 1960 Diverse product offering: convenience/travel accessories, general merchandise/souvenirs, premium apparel/specialty, readables and food services Immediate market impact ¹ airline companies data and ACI reports The combination of Paradies and Travel Retail would create the #2 player at par with Hudson/Dufry (each company would generate c. $700-800m sales in Travel Essentials/Specialty Retail) 20
COGS 1 synergies Alignment of purchasing conditions to the extent possible Gross margin improvement from scale effect Consolidation of volumes across stores Expected synergies G&A & other synergies Rationalization of central costs Combination of IT projects Total quantifies synergies $15m 2 run rate Additional synergy potential Business development opportunities Sales and marketing firepower alignment Process and systems improvements by integration of best practices and combined experiences International development of owned and franchise brands Full potential of recurring synergy expected to be reached in 2019 ¹ Cost Of Goods Sold 2 Pre tax 21
Group outlook
H1 2015 key figures and FY 2015 guidance ( m) H1 2014 restated* H1 2015 Reported change Like-for-like change** Sales 3,364 3,304-1.8% +2.9% Recurring EBIT of fully consolidated companies 110 122 +11.0% / Group operating margin 3.3% 3.7% +0.4 pt / Profit Group share (35) 9 + 44m / Adjusted profit Group share 31 75 + 44m / The first half results, as well as the outlook for the second half, have enable to raise the target on 2015 recurring EBIT announced in March 2015 From now on, Group Recurring EBIT of fully consolidated companies*** should increase in 2015 by about +7%, compared to 2014 (versus +5% previously): - at constant exchange rates - excluding the effect of the potential disposal of Distribution activities *Including the negative impact related to the retrospective application of IFRIC 21 Levies on H1 2014 figures (see Appendix for further details) **At constant perimeter and exchange rates ***Recurring EBIT of fully consolidated companies of the four operating divisions (previously called the Media Recurring EBIT) + other activities 23
These long term objectives, announced in May 2014, are unchanged. Top-line growth objective Long term objectives (2013-2018) To achieve an organic growth >3% per year by 2018 Recurring EBIT* objective Group recurring EBIT growth of circa 5% per year in average between 2013 and 2018** *Recurring Media EBIT of fully consolidated companies of the four divisions + other activities (i.e. 327m in 2013). **This target, based on 2013 figures, is to be adjusted once the Distribution and Integrated Retail businesses are sold. 24
Key credit highlights and transaction rationale
Net debt / EBITDA* Inaugural bond in 2009 Disposal of International Magazine Publishing (PMI) for 651m in 2011 Disposal of 3 non-core stakes in 2013: - EADS (7.4%): 2.28bn - Canal+ France (20%): 1.02bn - Amaury (25%): 91.4m 2,6x 2,6x 2,8x 2,6x Conservative financial policy 1,9x 1,8x (0,7)x Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Jun-15 Net debt: 1,824m 1,772m 1,269m 1,700m - 361m 954m 1,436m * Defined as recurring operating profit before associates + D&A other than on acquisition-related intangible assets + Dividends received from Associates 26
( 954m) - 278m - 184m - 20m ( 1,436m) Change in net debt in H1 2015 Net debt as of 31/12/2014 Net cash from operating & investing activities Dividends paid Foreign exchange, scope and other items Net debt as of 30/06/2015 27
End of June 2015 Strong liquidity position ( 1.7bn) New 5+1+1-year 1.25bn RCF signed in May 2015. Covenant of 3.5x (net debt / recurring EBITDA) Gross debt centered on capital markets Gross debt breakdown: well-balanced funding sources 14% in 2014 20% 28% 52% Bonds Commercial paper Bank loans & other Diversified funding structure supported by a strong liquidity position Authorised credit lines**: 1,250m Bonds Commercial paper Bank loans & other 803 21% in 2014 65% in 2014 Preservation of liquidity and balanced debt repayment schedule 276 501 502 9 5 Cash*: 451m 527 48 492 497 10 23 Cash available 30/06/2015-30/06/2016 30/06/2016-30/06/2017 30/06/2017-30/06/2018 30/06/2018-30/06/2019 30/06/2019-30/06/2020 30/06/2020 & beyond * Short-term investments and cash. ** Group credit facility excluding authorised credit lines at divisions level. 28
#3 worldwide in Publishing & Travel Retail Conservative financial policy with strong liquidity profile and diversified funding sources A diversified, balanced complementary business mix within the media and travel retail industry A geographically diversified group with 79% of revenues generated in developed countries Resilient base of Publishing & lower exposure of Active to cyclical advertising spend Growth opportunities in Travel Retail, digital & TV production Sound financial profile with a strong liquidity position and diversified funding sources Stable management and shareholder base thanks to the legal structure of the company (Société en commandite par actions = French partnership limited by shares) 29
Transaction rationale The contemplated hybrid and/or senior bond offering(s) would: Support in its portfolio strategic improvement Strengthen s capital structure (hybrid to be accounted 100% as equity under IFRS) Take advantage of the current low rate environment to further extend the group s average debt maturity; and Diversify s sources of funding by tapping into the current strong demand for the hybrid asset class The proceeds of the contemplated hybrid and/or senior offering(s) will be used: (i) to refinance or replace in part the bridge loan entered into for the purpose of financing the payment of the purchase price of the Paradies acquisition by Travel Retail; and (ii) for general corporate purposes 30
Key feature of the Hybrid Security Contemplated hybrid structure Issuer Issuer Rating Bonds Ranking Maturity Optional Redemption Interest Step up SCA Not Rated Euro [ ] Undated Deeply Subordinated Fixed to Reset Rate Bonds (the Bonds ) Deeply subordinated, senior only to ordinary shares and any other class of share capital of the Issuer Perpetual On [, 2020] (the First Call Date ) and on any Interest Payment Date thereafter Interest payable annually in arrear Fixed rate until the First Call Date, then, and every 5 years thereafter, the interest rate resets to a rate equal to the 5 year swap rate plus [ ] (the initial credit spread) plus a step up of 500bps 500bps at the First Call Date Additional 500bps if the Bonds are not called upon the occurrence of a Change of Control Call Event Optional interest deferral Optional deferral of interest payments (in whole but not in part) at the Issuer s discretion Any deferred interest constitutes Arrears of Interest No optional deferral if in the prior 12 months a Mandatory Payment Event has occurred (discretionary payment, redemption or repurchase of parity or junior obligations subject to certain exceptions) Arrears of Interest Early Redemption Rights Governing Law Listing / Denominations May be settled in cash at any time at the Issuer s discretion but shall become due and payable upon the earliest of: i. 10 business days following a Mandatory Payment Event ii. The next Interest Payment Date on which the Issuer does not elect to defer the relevant interest payment iii. Redemption of the Bonds iv. Liquidation of the Issuer Arrears of interest bear interest at the corresponding rate of interest of the Bonds, in accordance with Article 1154 of the French Code civil Gross-up Event, Withholding Tax Event, Change of Control Call Event, Repurchase event: at par Tax Deductibility Event and Accounting Event: at 101% of the par amount before the First Call Date and par thereafter French Law Luxembourg Stock Exchange / EUR 100k 31
Appendix
2014 sales by geographical area 2014 sales by activity Publishing: Activity 6%* Spain 6% Other 18% 18%* US & Canada 24% 25%* France 31% 32%* UK & Australia 21% 19%* Partworks 12% 11%* Other 17% 16%* General Literature 40% 42%* Education 16% 16%* Illustrated books 15% 15%* ( m) 2013 2014 Change Sales (a) 2,066 2,004-3.0% Recurring EBIT of fully consolidated companies (b) 223 197-26m Operating margin (b)/(a) 10.8% 9.8% -1.0 pt Income (loss) from equity-accounted companies (2) 2 / Non-recurring/non-operating items (29) (30) / EBIT 192 169-23m *% of sales in 2013 33
As expected, the weight of e-books has decreased in H1 2015. Digital for the time being remains essentially limited to the traditional fiction/nonfiction segment, in the US and UK markets, with similar market trends: Publishing: successful transition to digital in the US, in a decreasing market (confirming the slowdown noticed since H1 2014), Publishing digital sales decreased. It reflects market trend, fewer movie tie-ins vs. H1 2014, and the impact of the new contract with Amazon; in the UK, where the market is stabilizing, e-book sales decreased due to fewer best sellers vs. H1 2014, and to a change in VAT rate; French and Spanish markets still at an early stage. E-book share as percentage of trade market sales United States* United Kingdom** Publishing e-book sales % of total sales 30% 29% 21% 24% 26% 24% 20% 27% 31% 36% 33% 6.0% 8.0% 11.3% 10.4% 10.3% 10.7% 10% 8% 1% 2.0% 2010 2011 2012 2013 2014 H1 2014 *Trade. / **Adult trade. H1 2015 2010 2011 2012 2013 2014 H1 2014 H1 2015 2010 2011 2012 2013 2014 H1 2014 H1 2015 34
2014 sales by geographical area 2014 sales by activity Travel Retail: Activity Eastern Europe 17% 18%* Italy 6% 3%* Switzerland 9% 10%* Spain 9% 10%* US & Canada 6% 6%* Asia- Pacific 8% 8%* Belgium 12% 12%* Other 7% 4%* France 26% 29%* Wholesale Distribution 22% 24%* Integrated Retail 15% 16%* 63% 60%* ( m) 2013 2014 Change Sales (a) 3,745 3,814 +1.8% Recurring EBIT of fully consolidated companies (b) 96 105 + 9m Operating margin (b)/(a) 2.6% 2.7% +0.1 pt Income from equity-accounted companies 8 6 / Non-recurring/non-operating items (62) (64) / EBIT 42 47 + 5m *% of sales in 2013 35
2014 sales by geographical area 2014 sales by activity Active: Activity International 14% 13%* 87%* France 86% Radio 22% 21%* TV 26% 23%* Press 45% 49%* Pure digital 7% 7%* ( m) 2013 2014 Change Sales (a) 996 958-3.8% Recurring EBIT of fully consolidated companies (b) 64 73 + 9m Operating margin (b)/(a) 6.4% 7.6% +1.2 pt Income from equity-accounted companies 2 4 / Non-recurring/non-operating items (375) (21) / EBIT (309) 56 + 365m *% of sales in 2013 36
2014 sales by geographical area 2014 sales by activity Sports and Entertainment: Activity USA & Canada 8% 6%* Asia & Australia 20% 14%* Rest of World 15% 13%* Rest of Europe 9% 16%* France 14% UK 7% 12%* 11%* Germany 27% 28%* Other** 33% 20%* Marketing rights 48% 42%* Media rights 19% 38%* ( m) 2013 2014 Change Sales (a) 409 394-3,8% Recurring EBIT of fully consolidated companies (b) (11) 4 + 15m Operating margin (b)/(a) - 1.0% - Loss from equity-accounted companies (1) (3) Non-recurring/non-operating items (23) (19) EBIT (35) (18) + 17m *% of sales in 2013 **.Stadium management, brand consulting, entertainment, athlete representation 37
FY 2014 consolidated income statement (1/2) ( m) 2013 2014 Sales 7,216 7,170 Total recurring EBIT of fully consolidated companies 327 342 Media activities 372 379 Other activities (45) (37) Income from equity-accounted companies* 7 9 Non-recurring/non-operating items 1,193 (142) Restructuring costs (122) (66) Gains/(losses) on disposals 1,671 (5) Fair value adjustment resulting from changes in control - 25 Impairment losses (328) (41) Amortisation of acquisition-related intangible assets and other acquisition-related expenses (28) (55) EBIT 1,527 209 *Before impairment losses 38
( m) 2013 2014 EBIT 1,527 209 FY 2014 consolidated income statement (2/2) Net interest expense (91) (73) Profit before tax 1,436 136 Income tax expense (117) (87) Total profit 1,319 49 Attributable to minority interests (12) (8) Profit Group share 1,307 41 39
FY 2014 adjusted profit group share ( m) 2013 2014 Profit Group share 1,307 41 Amortisation of acquisition-related intangible assets and other acquisition-related expenses* Impairment losses on goodwill, tangible and intangible fixed assets* +20 +42 +298 +41 Restructuring costs* +117 +53 Gains/losses on disposals* -1,624 +5 Fair value adjustment resulting from changes in control* - -25 Tax contribution on dividends paid +40 +28 Exceptional bonus for employees* +14 - Adjusted profit - Group share 172 185 *Net of taxes 40
FY 2014 consolidated statement of cash flows ( m) 2013 2014 Cash flow from operations before interest, taxes 454 403 Changes in working capital 116 (49) Cash flow from operations 570 354 Interest paid & received, income taxes paid (235) (144) Cash generated by operating activities 335 210 Acquisition of property, plant & equipment and intangible assets (296) (249) Disposal of property, plant & equipment and intangible assets 8 16 Free cash flow 47 (23) Acquisition of financial assets (41) (282) Disposal of financial assets 3,410 34 (Increase)/decrease in short-term investments 29 - Net cash from operating & investing activities 3,445 (271) 41
FY 2014 consolidated balance sheet ( m) Dec. 31, 2013 Dec. 31, 2014 Non-current assets (excl. investments in associates and joint ventures) 3,579 3,949 Investments in associates and joint ventures 152 159 Current assets (other than short-term investments and cash) 2,817 2,834 Short-term investments and cash 1,784 566 Total assets 8,332 7,508 Stockholders equity 2,927 2,081 Non-current liabilities (excl. debt) 628 714 Non-current debt 617 1,030 Current liabilities (excl. debt) 3,354 3,193 Current debt 806 490 Total liabilities and equity 8,332 7,508 42
has maintained a stable dividend policy Dividends paid over time 10,30 Stable dividend policy 9,00 7,30 6,00 1,10 1,20 1,30 1,30 1,30 1,30 1,30 1,30 1,10 1,20 1,30 1,30 1,30 1,30 1,30 1,30 1,30 1,30 mai-06 mai-07 mai-08 mai-09 mai-10 mai-11 mai-12 mai-13 mai-14 mai-15 For the eighth year in a row, the ordinary dividend amounted to 1.30 per share in 2015 Exceptional dividends: 2013: 9.0 per share derived from the s group s sale of its 7.4% interest in EADS 2014: 6.0 per share related to the sale of the s group s stake in Canal+ France 43
Impact related to the retrospective application of IFRIC 21 Levies on H1 2014 figures: - - 3m on Recurring EBIT of fully consolidated companies IFRIC 21 impact on H1 2014 figures - - 2m on Profit Group share and Adjusted profit Group share - The new interpretation IFRIC 21 modifies the obligating event that gives rise to the recognition of a liability to pay a levy or contribution. The obligating event for the recognition of the liability is now the activity that triggers the payment of the levy, as defined by the tax authorities 44
Profile of Paradies Paradies is a leading operator in airport travel retail in the North American industry with operations in more than 76 airports and 515M in sales 1 with a portfolio of long-term concessions. Moreover, broad location portfolio provides a diversification from geography, weather and airline route patterns Created as a family business in 1960, Paradies is controlled by the private equity investment firm Freeman Spogli & Co (since 2010), with the Paradies family still owing a minority share Paradies is renowned in the US for the quality of its operations and management, having won the industry s Best Airport Retailer award in 20 successive years Paradies is a leading operator in convenience and travel essentials, having initiated a strong diversification strategy in gift & souvenirs, fashion, accessories and specialty (primarily with strong brands such as Brooks Brothers, PGA, CNBC etc.), and recently started developing its Food & Beverage business Historical Revenue Growth show resilience [in $ million; end June FY] Recession 2015E Breakdown of sales by category [in $ million breakdown based on YTD May figures] Premium Food Services Apparel & 4% Specialty 16% General Merchandise & Souvenirs 20% Readables 13% Convenience & Travel Accessories 47% $500 9/11 and Recession $250 Recession Recession 1 End June fiscal year, US GAAP consolidated figures $0 FY '60 FY '79 FY '83 FY '87 FY '91 FY '95 FY '99 FY '03 FY '07 FY '11 FY '15 45
North American Travel Retail industry size Competitive landscape Foodservice Core Duty [in $ billion 2014] = 7.7 v Free Essentials & Specialty v v The North American airport travel retail industry Foodservice 4.0 52% Core Duty Free 1.2 16% Essentials & Specialty 2.5 32% 52% 16% 32% + v v v v v v v v v v Airports v v v Key market takeaways A $7.7bn market with varying dynamics across segments: Foodservice: growing and highly fragmented market mainly driven by domestic traffic with limited onboard free food offer Core Duty Free: more limited offer compared to other regions (EMEA, ASPAC) due to the predominance of domestic traffic Travel Essentials: number 1 competitor is Hudson (Dufry) Critical size is a key challenge Source: Travel Retail estimates, company reports, Moodies ¹ Ranking based on estimated sales 46
Combined profiles Sales breakdown by division Sports and Entertainment 6% Active 13% Travel Retail 53% Publishing 28% o/w Distribution 19% Sports and Entertainment 5% Active 13% Travel Retail 56% Publishing 26% o/w Distribution 18% Sales 2014 = 7,170m Sales 2014 = 7,629m EBITDA breakdown by division Sports and Entertainment 12% Active 14% Travel Retail 29% Publishing 45% Sports and Entertainment 11% Active 13% Travel Retail 35% Publishing 41% EBITDA 2014 = 533m 1 EBITDA 2014 = 582m 1 Source: and Travel Retail ¹ Breakdown excluding EBITDA from other activities of - 37m) 47
IR Team and calendar Anthony MELLOR Head of Investor Relations Tel: 33 1 40 69 18 02 amellor@lagardere.fr Hacène BOUMENDJEL Investor Relations Deputy Head Tel: 33 1 40 69 67 88 hboumendjel@lagardere.fr Josefin MAISONDIEU Assistant Tel: 33 1 40 69 19 22 jmaisondieu@lagardere.fr IR team details Calendar (all time is CET) Announcement of 9 months 2015 sales November 10 2015 at 8:00 am A conference call will be held at 10:00 a.m. on the same day Address: 4 rue de Presbourg 75116 Paris - FRANCE Tickers: Bloomberg (MMB FP), Reuters (LAGA.PA) 48 V12