CFA Challenge Michael Caro

CFA Institute Research Challenge
Hosted by
Local Challenge CFA France
Team C
Recommendation : SELL
LAGARDERE SCA
Last Price : 25.36 (Date: 8/1/2016)

Target Price : 21.00
INDUSTRY : MEDIA
Ticker : MMB-FR
This report is published for educational purposes only by students competing in the CFA Institute Research Challenge.
DCF
23.9
SOTP
18
50%
50%
Lagardre: Muddled Past, Gloomy Future

We initiate coverage of Lagardre SCA (MMB) with a SELL recommendation with a target
price of 21 suggesting 17% downside potential.
Our SELL recommendation is based on three key points: (1) an unattractive
risk/reward profile, (2) diversified but mostly low organic growth activities operating
in a highly competitive environment and (3) a weak corporate strategy with serious
issues on business sustainability.
TARGET PRICE
21.00
SELL
-17% potential downside
Market Profile
52-week Price Range ()
21.02-30.23
Average 3M Daily Volume
294,144
Shares Outstanding (M)
131.1
Market Capitalization
(M)
3,325
Insider Ownership
11.2%
Free Float
74.2%
Beta
1.63
Sources: Factset, Damodaran & team

estimates
Key Metrics
2014 2015E 2016E
Our 3 keys points are supported by an historically non fundamentaly high valuation
multiple (8.6x EV/EBITDA 16e, a 18% premium to the historical average) mainly due to a
lower conglomerate discount which we believe is unjustified for the moment. We derived
our target price of 21 from a combination of a DCF model and sum-of-the-parts
valuations model(including a 25% conglomerate discount) with an equal weighting of
both methods.
Our Sell recommendation relies on
A lack of a business mix advantage with an unaggressive strategy in a highly consolidating
media industry in addition to:
Strong pressure on cash generation: We believe the risk/reward profile of the

group is unattractive due to (1) highly cyclical sales, (2) highly volatile and low net
earning margins and (3) low Capex which highlights future growth issues. Moreover,
we forecast free cash flow 2015-19e CAGR of just 1% due to pressure on margin and
from working capital.
Follower attitude with a short-sighted view corporate strategy: (1) management

lacks expertise in acquisition valuation, which has led to huge impairment losses in
the past, (2) proceeds from divestments have mostly been distributed in the form of
exceptional dividends and not reinvested, contrary to peers practice and (3) complete
home-made corporate management that limits influx of external expertise.
Furthermore, we see low shareholders representation and governance risks with a
group structure of double voting rights for share registered in the name of same
shareholders for more than 4 years.
Sales (M)
7,170
7,378
7,856
EBITDA
Margin
7.6%
7.7%
7.7 %
EPS ()
0.32
1.56
1.74
Payout(%)
410
83
75
N.Debt/
EBITDA
1.9x
2.5x
2.4x
ROCE
7.1%
7.5%
7.1%
Main risk: We believe any major acquisition announcement could have a temporary
positive impact on the share price as well as news flow on assets divestment (Magazine
and Distribution). However we believe this risk is limited due to weak organic growth in
these activities and their currently low valuation.
EV/EBITDA
8.8x
9.0x
8.6x
200
P/E
79.8x
16.2x
14.5x
180
Lagardre
160
Stoxx 600 Media
Team Sentiment Summary

News Flow
High (+)
140
Uncertainties
High (-)
120
Competitive
Advantage
Low (-)
100
Growth Potential
Medium
80
Profitability
Low (-)
60
Payout
High (+)
40
Valuation
High (-)
Governance
Low (-)
25.4
17 % Downside
potential
21.0
Source: Factset
1

Business Description
Figure 1: Activities snapshot with % of

sales
28%
PUBLISHING
L
A
G
A
R
D
E
R
E
53%
Still in transformation from an Aerospace and Publishing company to a more diversified group,
Lagardre SCA was established in 1992 from the merger between Matra Hachette and Lagardre
group. Lagardre is listed on Euronext Paris since June, 1987 (ticker: MMB-FR).
TRAVEL RETAIL
13%
Focus on the Media industry.

Lagardre Publishing (28% of group sales), with its unavoidable Hachette division, is clearly a
core-business division for Lagardre (largest EBITDA contribution with 41%). A segment in
which Lagardre is a worldwide leader among mature and cyclical business.
Lagardre Active (13% of group sales) includes the press business, the audiovisual (radio/TV)
and digital activities as well as the advertising sales and is built on iconic brands such as Elle,
Paris Match, Europe 1 and Gulli among declining activities with digital transformation.
ACTIVE
5%
SPORTS &
ENTERTAINMENT
Source: Company data

Figure 2: 2014 Revenues & EBITDA by
division (%)
Revenues contribution
60%
Travel Retail
50%
40%
Publishing
30%
20%
Sports and
Entertainment
10%
Active
0%
0%
January 11th 2016
10%
20%
30%
40%
50%
With strong interests in Travel Retail and Sports.

The Travel Retail (TR) segment (53% of group sales) is the largest division by sales and is a truly
global player as it employs over 12,800 people and maintains a network of 4,161 stores in 30
countries, 170 airports and 700 stations through 3 activities: Travel Essentials (46% of divisional
sales), Duty Free & Luxury (41%) and Food Services (13%). Since its strategic focus is TR,
Lagardre initiated a process in 2013 to find investors to buy its distribution business which is
currently part of the TR division.
Lagardre Sports and Entertainment (5% of group sales), the smallest division of the Group, is a
globally integrated full service sports marketing agency as well as events and venue manager. A
significant change of the business mix is on track to further focus on emerging markets.
(Appendix 8)
EBITDA contribution
1945:
Creation
of
Matra,
researching and developing planes,
transport systems and satellites
Figure 3: Lagardre in 6 dates
1992:
Merger
of
Hachette and Matra,
held by Lagardre group
2013: Lagardre sells

its EADS and Canal+
stakes
Lagardres history in 6 dates
1826: Louis Hachette lays

the basis of the Hachette
group main activities
A diversified geographical exposure.

Restructuring in Western Europe and Invest more in emerging markets.
To offset a weak economy in Europe, the Lagardres operating activities have been reshaped. On the
other hand the group continues to foster its presence in Asia and Eastern Europe with sales outlets
openings in the TR segment to capture highly increasing spent per passenger (PAX) and air traffic.
(Figure 4)

Figure 5: Evolution of print revenues as
% of total sales
67%
61%
49%
2003
2007
2003: Arnaud Lagardre takes the

lead of Lagardre SCA (French
partnership limited by shares)
An external growth strategy.

For many years, Lagardre has acquired several companies such as SportFive (2006), Doctissimo
(2008), Les Editions Albert-Ren (2008) and more recently Paradies (2015) to adapt to a new
environment. Moreover, as part of its business operations, Lagardre manages certain Travel Retail
contracts in the form of 50-50 joint ventures with its partners like SNCF or Aroport de Paris.
Non-strategic businesses to divest.
Departing with the old media businesses like the declining press distribution business and
advertising mainly established in Western Europe to focus on core activities like TR. (Appendix 9)
Figure 4: Geographical footprint
72%
1987: the company is

listed on Euronext Paris
2010
2013
A reduced dependency on Print businesses

Facing weak growth in the publishing and printed press market, Lagardre has reduced its work
force in paper-related businesses and will continue its cost-cutting plan in the publishing segment,
yet operating in a quite different market environment. (Figure 5)
Sustained investment in digital technologies
Lagardre Publishing, the companys cash cow, generating roughly half of total EBIT has seen its
model being called into question by structural changes that took place throughout the value chain of
the cultural industry. Initially exposed at 2/3 of sales under the Publishing paper market, the group
suffered from the rapid digital shift in the industry. After huge and costly efforts, the company
reversed the paper market exposure to 1/3 of total sales and continues to develop and adapt digitally
its broadcasting and magazines businesses to be well-positioned if market opportunities appear.
2

Figure 6: Share ownership structure
Float
5%
8%
Qatar Invest.
Authority
13%
74%
Arnaud
Lagardre
January 11th 2016
Corporate management
Lagardre is a partnership limited by shares. Lagardres general management is in charge of the
Managing Partners. One Managing Partner and three Co-Managing Partners: Arnaud Lagardre,
Pierre Leroy, Dominique DHinnin, Thierry Funck-Brentano, engage their responsibility of drawing
up the strategy, ensuring the implementation of decisions and controlling the Group. The entire
general management has more than 25 years of experience with Lagardre.
As a conglomerate, Lagardres operating activites are conducted by legally independent companies
grouped together in the 4 business divisions, under the Managing Partners control, each divisions
has its own organization, each of the 4 divisional CEOs have more than 10 years of experience at
Lagardre or in the related industries. (Appendix 17)
Shareholder structure
Via Lagardre Capital & Management (LC&M), Arnaud Lagardre controls 8.2% of the capital and
12.7% of the voting rights of Lagardre SCA. The Qatar Investment Authority holds 12.83% of the
share capital. (Appendix 18)
The shareholders are highly dispersed, 74% of the shares are floating, but mainly held by
institutional investors (Figure 6).
Insiders
Industry Overview and Competitive Positioning

Over the last few years, the media industry has been disrupted by the Internet and is struggling
to find a new path. To succeed in this new environment, companies need to drive both innovation
and efficiency to embrace the changing face of the media industry.
Figure 7: Global media industry

category segmentation: % share
Traditional model still dominates but a shift to an online model is the main challenge to tackle
The media and entertainment sector is in disruptive moment where existing business models
continue to thrive at the same time that new models are emerging. The landscape for media
consumer is substantially different to what it was few years ago. (Figure 9)
The rapidly growing amount of content available via the Internet and the proliferation of devices
such as tablets and smartphones accelerates the translation. The growth reflects the publics rising
demand for content anywhere, anytime and on any device.
Movies &
Entertainment
9%
Advertising
11%
Broadcasting &
Cable TV
48%
Publishing
32%
Consumers are no longer satisfied to enjoy print, video, or other forms of entertainment passively.
With spending turning away from the traditional paid media domains of TV and print towards
electronic devices, advertisers dedicate more resources to digital, database marketing, event
marketing and place-based media.
Source: Mdiamtrie
This changing dynamic poses challenges but also offers opportunities for entertainment content
companies: the Internet channel offers the possibility for these companies to connect with and
Figure 8: Media sources of revenue: % share market directly to consumers. As the smartphone becomes the central device, consumers are forced
to make more complex choices between traditional and new media formats, all of which are available
through the handset.
Telecommunication
services
Different sources of revenue for media companies

Major revenue sources in Media are telecommunications services (c45%), traditional publishing
including books, newspapers, magazines, and software (c20%) and radio and TV content distribution
including broadcasting, cable, and other pay TV subscription services (10%). Additional products
and services include movie production and distribution; music publishing, licensing and recording;
Internet publishing and Web portals; and data processing. (Figure 8)
Additional products and

services
Traditional publishing
Radio & TV content

0%
10% 20% 30% 40% 50%
Source: Mdiamtrie
Figure 9: Media consumption: hours
spent per day, world average
3.5
3
The sixth continent

Travel Retail has undergone a major shift over the past few years that has turned airports and train
stations into shopping destinations. The opportunity to buy goods when travelling is not a new thing
but the concept has changed over time: the range of products on offer and the different types of
shopping opportunities available at airports have become much more diverse. With sales reaching
88 bn in 2014, the worldwide industry of travel commerce is a market that is dynamic and strategic
as it is an important source of revenue for many brands and the primary source of income for many
airports (4% growth CAGR 2015-19e).
Key Industry Trends
2.5
2
2012
1.5
2015
1
0.5
0
TV
Online
Radio
Print
A new media experience

A transformation of advertising budget is underway as we spent more time on mobiles, tablets
and laptops. (Figure 9) This shift requires media companies to increase their focus on
innovation. It also creates opportunities to connect with customers through all devices in real
time and create campaigns across social media.
The division Lagardre Active is grappling with these issue as c40% of revenues of this division
stem from advertising.
Source: Mdiamtrie
3
Figure 10: User penetration in the

ebooks segment
A wave of consolidation
Consolidation is hitting all segments of media, which promise to have a broad impact on the
future of the industry and competition. There is clearly an appetite for consolidation of audience
share and hence than advertising market in each media segment (TV, radio mainly).
Political and cultural concerns for ebooks

The ebook faces an environment in France that is characterized by various factors from politics
and culture. France remains the main market (31% of sales) for Lagardre Publishing. With a
rate of 8.9%, the user penetration in the ebooks segment is low in France, compared to top
countries such as the United States (36.1%) and the United Kingdom (16.5%). In France, the
ebook price-fixing law and the reduced from the book VAT rate decided in 2012 have negative
effects on this sector. Global distribution platforms like Amazon or Apple have brought the
globalization of publishing to a new dimension preventing Lagardre from gaining market share
outside of France. (Figure 10)
A system of tender offer for retail operations

There are different ways to grow in the TR: acquire new businesses or through concessions
which can be won in a tender process launched by airport authorities. Concession agreement is
for the design, construction, operation and maintenance of passenger terminal. A contract will be
awarded to the highest and most qualified bidder who meets the bid requirements. Airports
select the best partner as in-terminal concessions provide an important passenger service. A
well-implemented concession program can also provide financial benefits to the airports
operating budget.
TR not as strong as in the past

Decline in Eastern European travel volumes is responsible for a downturn in the European travel
retail business. The collapse of the Russian Ruble and the Chinese Governments crackdown on
corruption and extravagant spending have led to a marked reduction in spending of the most
important nationalities of travelling shopper. Meanwhile, the weakening currencies of other
developing market economies such as Brazil, as well as lacklustre growth in Europe and the
Americas, have also put the sector under strain.
Top Countries
United States
36.1%
United Kingdom
16.5%
Canada
16.3%
Spain
12.8%
Germany
11.1%
France
8.9%
January 11th 2016
Source: Syndicat National de lEdition
Competitive landscape
Demand is driven by discretionary consumer spending and leisure time. The profitability depends on
effective marketing and creative capital. Large companies have advantage because they can reach
mass audiences through multiple channels.
Small companies can compete effectively by targeting narrow audience segments with niche
products.
The TR industry is competitive but fragmented. More than 40% of the market share is held by 6 main
companies, but each of them develop their activities through different sectors.
Actors in Sports & Entertainment tend to offer sport and entertainment altogether (sport
competition with concerts) to address wider public, offer longer events at an increasing price. This
trend answers the desire of fans to be part of the live experience and of a global entertainment.
Main competitors by business units
Book publishing
Travel Retail
Radio
TV
Magazine
Audiovisual production
Digital
Sport rights
Source: Team research

Porters 5 forces
Figure 11: Porters 5 forces

Threat of
Substitutes (3.5)
Threat of New
Entrants (1.5)
Rivalry (4)
Bargaining
Power of
Customers (4)
January 11th 2016
Bargaining
Power of
Suppliers (2.5)
Source: Team estimates
Rivalry: Players are large, often vertically integrated. These large companies tend to exacerbate
rivalry, as they are formidable rivals and able to exploit economies of scale. In TR, companies
compete fiercely as the ability to win and renew concessions contract is important.
Bargaining power of customers: The very diverse range of services and products on offer to
buyers results in a decrease in buyer power. In TR, Lagardre has some airport retailing
monopolies which reduces customer power.
Bargaining power of suppliers: For media, one factor is that suppliers may be indispensable to
players due to a lack of alternative inputs.
Threat of substitutes: The largest threat is online piracy. Moreover, substitutes are many due to
the broad scope of the industry.
Threat of new entrants: Quite low because of the high fixed costs associated with media. A
further barrier to entry would be the degree of regulation. In sport, the threat is quite high
because of the high ability of small agencies to enter the market and graze market share of large
groups.
Lagardres competitive advantage relies on:

Strong market presence in the TR
Lagardre TR is a global leader in TR with operations in 30 countries on four continents. It has the
largest international network of convenience stores and stores dedicated to cultural leisure products.
Lagardre TR operates a total of 4,161 stores, including 3,687 in Europe, Middle East and Africa, 270
in Asia-Pacific and 204 in North America. With the Relay and Hubiz stores and local store names such
as Newslink, Lagardre currently runs the worlds largest international network of stores located in
travel areas. Furthermore, Lagardre TR operates 337 food service outlets in nine countries. This
market presence helps Lagardre drive business growth which in turn assists in delivering financial
performance. Despite this network, we are still worry that the company strategy largely executed
through acquisition may not generate attractive returns. (Appendix 19)
Figure 12: Monte Carlo Analysis

200
180
160
140
120
100
80
Well-established publishing business

The group has well-established publishing business. According to industry estimates, Lagardre
Publishing is the worlds third-largest book publisher for the general public and educational markets.
Hachette, the groups flagship brand, publishes books in English, Spanish and French languages and
holds leading positions in several of its markets. In addition, the companys strong publishing
business provides access to a large customer base and established distribution channels which can
be leveraged to further enhance the growth prospects. But the decline of the market as well as selfpublishing, falling prices, development of Internet retailers are examples that illustrates the risks
weighing on the future of this division.
60
40
20
0
Investment Summary
We initiate coverage of Lagardre SCA (MMB) with a SELL recommendation and a target price of
21 suggesting 17% downside potential.
Dividend Yield (%)
Figure 13: Dividend and FCF yield in

the industry
7.5
Our SELL recommendation is based on three key points: (1) an unattractive risk/reward profile,(2)
a diversified but mostly low organic growth activities operating in a highly competitive
environment and (3) a weak corporate strategy with serious issues on business sustainability
7.0
Our SELL recommendation relies on
6.5
A lack of advantages relative to peers

Despite asset cleaning, we think the group lack of advantages relative to leaders on each industries
where Lagardre operates. With c80% sale exposure on Europe, the group is too much dependent on
low organic growth activities, with industries experiencing challenging shift in consumer habits
(Digital, Advertising on Magazine, Publishing) and among high consolidation movement which
prouve the real difficulties actors meet to create long term value for shareholders.
6.0
5.5
5.0
4.5
4.0
-50
50
100
FCF Yield (%)

11Peers
Source: Factset
Lagardre
-39
Not attractive risk/reward profile

We believe at current valuation the risk/reward profile of the group is not attractive because
business exposure is highly cyclical on sales and low Capex raise question about future growth
dynamics. We believe at current valuation multiple the fundamental risk profile of the group requires
higher return which are clearly out of access by our view with such valuation level. (Figure 13)
Complete home-made corporate governance raise issue
The home made management lacks expertise on setting adequate price for acquisitions, and implies
huge impairment losses that reduce net income. We do not see signs ahead that could attest the
management decision wisdom. Moreover, Lagardre evolves in very competitive environment where
acquisition activity is huge (strong consolidation), the weak corporate governance profile is clearly
for us a weakness to compete.
5
January 11th 2016
Figure 14: Lagardre SOTP (EV/EBITDA and P/E multiple)
Publishing
Media
Travel Retail
Target Price
Weight
51%
18%
31%
EV/EBITDA Implied EV (M) Price per Share

7.35x
1759
9.76
6.84x
988
6.27
9.03x
2030
7.79
23.8
P/E
12.8x
14.3x
16.4x
23.8
7.8
Implied EPS () Price per Share

0.89
11.4
0.31
4.5
0.54
8.9
24.7
24.7
6.3
9.8
SOTP (EV/EBITDA Multiple ) segment bridge
SOTP (P/E Multiple ) segment bridge
Valuation
Figure 15: DCF assumptions
Risk-free Rate
0.91%
Beta (unlevered)
1.13
Market Risk Premium
6.4%
Cost of Equity
11.2%
Tax rate
26%
Cost of debt
3%
Cost of debt after-tax
2.2%
Weight of Equity
63%
Weight of Debt
37%
WACC
7.9%
Terminal Growth Rate
2.0%
Sources: Factset, Damodaran & Team estimates
Figure 16: Share of enterprise value

19%
I.
DCF Valuation
A stable perpetual Growth Rate

Lagardres nominal perpetual growth rate is based on: (1) The global economic growth:
stabilization of World GDP growth rate at 3% from 2017 (Source: World Bank) and low inflation
forecast, (2) the new strategy set to establish Lagardre in higher-growing, emerging countries and
(3) lower growth in EU and North America. We obtained a long-term growth rate of 2%.
Sales and EBITDA forecasts
We forecast sales separately for each division based on global growth and company strategy. For the
TR division we estimate a sales growth of 4.4% 2015-2019 CAGR, and an EBITDA growth of 8.2% in
the same period. We estimate the publishing division to experience a sales and EBITDA 1.1% CAGR
2015-2019 growth. The EBITDA should grow by 0.89%. CAGR in the same period. The active division
should see its sales decrease by 1.4% 2015-2019 CAGR in line with industry consensus. Finally, we
estimate the sport division to see its sales and EBITDA grow by 1.1% CAGR 2015-2019.
Defining the WACC
To calculate the cost of capital, we used the CAPM. Fama & French model did not show significance
for the size and the book-to-market ratios. We calculated Lagardres beta as the average of beta in
Retail, Media and Publishing & Newspaper.
We used France 10-Year OAT as the risk-free rate.
Note: For further information, please refer to Appendix 24.
PV of Terminal
Value
PV of OFCF
81%
Lagardre currently trades at 8.6x EV/EBITDA 2016e, which is a 14.5% premium to its 10-year
average EV/EBITDA 12-months forward multiples of 7.5x. We believe such a premium is unjustified.
We valued Lagardre using an equal blend between a sum-of-the-parts (SOTP) valuation and a DCF
model, and derived a target price of 21, which is 17% below the current share price.
DCF Target Price

The DCF model captures (1) slowly improving Lagardres FCF (2015-2019e CAGR of 1%), (2) its
important gearing increasing its risk and cost of equity, (3) the slow growth in each of the activities.
Our model points to a target value of 23.9. We ran several sensitivity analysis to analyze the impact
of the inputs on the target price. (Appendix 25) We did not used a Dividend Discount Model, despite
recurring dividend, because our fundamental analysis demonstrates the non sustainability of such
dividend yield relative to peers.
II. Sum-of-the-parts Valuation

We applied a discount of 25% to our blend of relative, which is based on historical discount to peers.
The blend of relative is made of peers multiples (EV/EBITDA, P/FCF and P/Earnings) and multiple
factor regression, which gives us a derived target price of 18.(Appendix 26, Appendix 28)
6
January 11th 2016
1. Sum-of-the-parts using peers multiples
Figure 17: EPS consensus vs team

estimates
Choice of Peers
Direct comparable conglomerates are not available. Therefore we selected 3 peer groups based on
Lagardres divisions: (Appendix 21)
EPS Growth 2015E 2016E 2017E 15-17
Book Publishing, the Lagardre historical activity facing low growth and consolidation
(Pearson, Wiley, News Corporation, Mondadori, Scholastic and Bertelsmann).
Consensus
1.77
1.92
2.00 6.3%
Media, with mostly French companies focusing on TV broadcasting, radio or event management
Team
1.56
1.74
1.68 3.8%
(Next Radio TV, TF1, RTL Group, GL Events, Highlight Communication, NRJ Group).
Estimates
Travel Retail, in which companies deal with food & beverage, travel essentials, duty free and
Premium/
-12% -9.4% -16%
luxury (Autogrill, Dufry, WH Smith, Elior).
EPS VS Consensus
CAGR
Discount
Why We Choose These Three Multiples

We treat EV/EBITDA, P/FCF and P/E equally in our valuation as they represent the company value at
different stage of the financial statements.

Figure 18: Valuation
Target
Weight
price ()
Valuation method
DCF Valuation
SOTP
Multiple factor regression
Average target price
23.9
50%
18
25%
21.2
25%
21
100%
EV/EBITDA
Our Sum-Of-The-Parts analysis shows that TR is the only Lagardre activity trading at a discount
compare to peers when taking EBITDA as drivers while the two others trade at a premium. We
derived a target price before discount of 23.8 from EV/EBITDA valuation. (Appendix 29)
P/Earnings
The P/E method brings almost the same conclusion except for Media which trades at a discount to
peers. We forecast EPS to be multiplied by 4 between 2014 and 2015 mainly thanks to (1) the new
bond issue which lowered the group leverage and (2) a decrease in restructuring costs. We derived a
target price before discount of 24.70 from P/Earnings valuation. (Appendix 30)
P/FCF
We derived a target price before discount of 19 from the P/FCF valuation. (Appendix 31)
2.Multiple Factor Regression
A broad sample of 240 firms (153 in Retail, 40 in Media and 47 in Publishing & Newspaper) was used
to regress forward P/E against 8 variables: leverage, EPS long-term growth rate (g), payout, beta,
market capitalization (logarithm), return on equity, liquidity, default spread for cost of debt.
We obtained a target price before discount of 28.3. (Appendix 32)
Financial Analysis
Figure 19: Sales and EBITDA margin
8,000
8.0%
7,800
7.8%
7,600
7,400
7.6%
7,200
7.4%
7,000
6,800
7.2%
2013
2014
2015e 2016e 2017e
Sales (LHS)
EBITDA Margin (Rhs)
Sources: Company data & Team estimates
Figure 20: EBITDA margin by units

15.5%
Despite the strategic plan announced in 2008 with the aim to boost organic growth, the group
succeeded to deliver -2.1% of organic growth, with a divestment and FX impact of -10bps. We
may see a brighter trend in 2015e with the increasing exposure to TR for example, as the
group recently announced its intention to divest all of its historically lagging Distribution
activity (c20% of group sales). We see 2015e and 2016e as exceptional, thanks to good
momentum in Sport Events and Publishing, further supported by higher exposure to TR.
However, low margin activities with such high volatility, issues with the sustainability of
dividends, lower Capex and higher debt give the group an unattractive risk/reward profile.
Publishing (28% of group sales): a mature and cyclical story
Representing c28% of media sales and c41% of media EBITDA, the publishing business is a cash
machine as c90% of the groups annual DPS is covered by its FCF. (Appendix 13a)
We see positive momentum in 2016e as an education reform is expected in France, boosting sales in
this highly mature industry by 250bps (3% growth in 2016e, with underlying 0.5%). The impact is a
one shot item and will be short in time in our view (over 12 months) is a one shot item. Besides this
one-off item, we expect flat underlying growth in this highly mature industry as reflected by
historical average annual growth in 2008-14 of 0%). Please refer to the Appendix 12 . for the Industry
Snapshot.
Margin squeezed like a lemon
Despite a good business mix contribution (Publishing is ranked #2 after Sport by EBITDA
profitability) (Figure 19) we expect margin pressure on both supply and demand side for three
reasons: (1) a dispute with Amazon reflects the important challenge the industry faces with
bargaining power of retailers, (2) we define the European market as complicated on a regular basis
(e.g. price-fixing law in France) and (3) increasing author royalties that now account for more than
12.5% of the profit distribution among supply chain actors. (Appendix 13b)
13.5%
11.5%
9.5%
7.5%
5.5%
3.5%
2013
2014
2015E
2016E
2017E
We do not see any improvement in EBITDA margin due to this challenging situation and a serious
lack of exposure to e-books which could enhance margins (Publishing generates on average 40% of
its sales in France and only 30% of them are in general literature, the only segment really concerned
by digital revolution so far). Our research indicates potential EBITDA margin in digital of c25%. On
average, peers generate c20% of sales in digital vs. 10% at Lagardre with c13% EBITDA margin
(11% at Lagardre). (Appendix 12)
7
TR (53% of group sales): Game over for the double digit growth game?
Despite long term exposure to the TR business, organic growth at Lagardre did not skyrocket, ranking
well behind its peers. (Figure 21) We believe this low growth trend is due to the diversification of
activities between the 3 sub segments as pure players such as DFS company (LVMH) pulled out of the
game. The group has embarked on a new strategic trajectory, as Distribution is being divested in
exchange of a more dynamic growth industry (TR). With the Paradies acquisition in 2015, we expect
the group (1) to add 0.6bn TR sales by 2019e with prudent 6% sales CAGR (vs 12% in the business
plan pre-acquisition) as North America has mature air traffic with historically high loading factors
(85%) and (2) to continue to generate c4.5% organic growth pa. The inclusion of Paradies with the
announced 12% EBITDA margin would add c1.8% of EBITDA margin percentage points including
15M synergies.
Figure 21: Travel Retail growth, Majors

25%
20%
15%
10%
5%
0%
2012
2013
2014
Source: Companies data

Figure 22: ROCE analysis
9%
120
8%
100
7%
80
6%
60
5%
4%
40
ROCE (lhs)
Indexed NOPAT (rhs)
Indexed Capital Employed (rhs)

Figure 23: Net earning margin/volatility
AVG Net earning margin
12%
10%
Wiley
8%
RTL
Pearson
6%
4%
2%
0%
Lagardre
Dufry
Autogril
l
0% 2% 4% 6% 8% 10% 12%
Std Dev of net earnings
6%
4%
2%
0%
Industry
Active
Sport & Entertainment (5% of group sales): Too many promises, pure players lack growth and
profitability
During the investor day held in May 2014, management described the activity as strong and with
growth potential ahead, supported by a PWC analysis which was referred to. Despite the bullish
expectations of industry specialists, we do not share the same view as historical organic growth has
been lagging in this segment (c5% average in 2008-14), and there are no events that would change the
trend. We expect however EBIT margin improvement, as announced by group, thanks to a efficient cost
cutting efforts (-0.8% EBIT margin in 2014 to 4.6% 2016e). The depreciation strategy of the group
appears to be quite aggressive, as depreciation/sales ratio decreased strongly while sales has been
relatively less volatile. Our research on IMG (sport pure player and direct competitor) revealed a low
growth industry with pressure on profitability. We do not think this segment to grow more than 5% as
announced by the industry experts. Our forecast stands at 1.7% CAGR 2015-19e.
The fall of ROCE at group level, volatility of ROE
Due to the exceptional dividends and non-recurring items, the tax rate of the firm is quite volatile.
Return on capital employed over the 2008-14 period experienced a sharp drop (from 8.7% to 7.5%).
NOPAT margin was divided by two due to the unprofitable Sport activity and the severe margin
pressure in TR (Figure 22). Currently, the ROCE-WACC spread is slightly negative which proves the
mature stage of the Lagardre businesses.
JVS and non-recurring items have a significant impact on the period 2008-14 (positive impact of
c60bps and negative impact c110 bps respectively). We forecast further ROE dilution, as the strategy is
clearly to decrease exposure to minorities but where the management track record remain very lo. Due
to lack of information, we cannot correctly value minorities. (Appendix 38)
High volatility and low earning margin
The Risk/Reward profile of the company does not seem attractive. On average between 2008-14,
Lagardres net earning margin stood at 3.2%with volatility of 7.8%, the group has the lower net
earning unit per point of risk among our selection of peers. (Figure 23) This high volatility is due to
non-recurring items (Restructuring costs, G&L, amortization of intangible related acquisition,
impairments) since 2003 and appear in our view, quite recurring as the group is constantly in
reorganization.
Huge impairments and losses
We analyzed the cumulative bottom line of the P&L and reach the conclusion that the cumulative
exceptional dividend per share of (c22) covered all the impairment and losses which the group has
made (cumulative c21 per share), as a result of expensive acquisitions and weak market conditions.
We see the management M&A activities as dangerous and most of time value dilutive, which can
transform the core coverage payout ratio far above 1, which we believe is not a key ingredient to build
leadership position in highly competitive industries.
Dividend payout is not backed by fundamentals
Historically since 2008, the group maintain its 1.30 dividend per share, while the FCF covered only
0.80. Because the asset cleaning arrived at end, we can be sure of non-exceptional dividends ahead.
Furthermore, we adjusted the reported earnings to core earnings to come to the conclusion that the
group distributes dividend which has been covered by the underlying core earnings, but not from its
cash flow as the conversion ratio falls below 1. However, due to the high amount of non-recurring
items and of the other investment line in the cash flow statement, we think the dividend is at risk if the
historical shareholders value destruction continues.
Figure 24: Capex/sales ratio
Publishing
January 12th 2015
TR
Below industry average CAPEX could have impact on future sales growth :
We used our SOTP peer list to compare Lagardre Capex with major actor by segment. We conclude
that Lagardre has, on average between 2008 and 2014, below industry ratio Capex/Sales (Figure 24).
We believe the investment effort is a key in a high competitive industry in order to generate sufficient
growth and shift to a leader position. (Appendix 42)
Lagardre
Sources: Factset & Companies data

8

Figure 25: Net Debt/EBITDA
January 11th 2016
Above Industry Net Debt/EBITDA:

Lagardre has on average between 2008-14, 2.2x net debt/EBITDA vs peer average of 1.90x (all
segments are include, based on SOTP list). We expect the ratio for Lagardre to reach 2.6x, as the
group increases its debt with the Paradies acquisition (EV of 475m). Based on our forecast, and
with the 6% cash/sales requirement (our historical analysis highlights a cash/sales ratio of between
6-7%), we do not expect the group to reduce its net debt/EBITDA below 2x. Furthermore, evolving in
highly competitive industries with recent consolidation trends, we think the group should make
significant acquisitions to maintain market share. With a high payout ratio, higher Capex
requirement from TR (management indicated a figure above 100m pa) and no longer significant
assets divestures, we are confident with the further debt issuance assumptions.
2.6X
2.5X
2.4X
2.3X
2.2X
2.1X
2.0X
1.9X
1.8X
Figure 26: Cumulative cash analysis 2008-14
1.7X
Lagardre
Industry Avg
Figure 27: Consolidated sales breakdown
Market Risk | Regional paper prices

Lagardre Publishing (28% of group sales) and Lagardre Active (13% of group sales) are affected by
paper price mainly in European, North American and Asian Market. Although there is not a direct link
to a single index, according to companys statistic, these divisions operating profit are subject to
have a negative impact up to 15m in case of a long-term 10% long-term rise in paper prices.
Other
23%
GBP
6%
CHF
5%
Investment Risks
Market Risk | Credit risks

This risk mainly relates to trade receivables. In 2014, the Group was unable to recover certain
receivables in the areas of sports rights marketing and the organization of sporting events.
Receivables amount to 1280m and represent a DSO of 61 days and weigh 17.1% of group sales.
EUR
58%
USD
8%
Market Risk | Exchange rate risks

Lagardres exposure to foreign exchange rate risks on transactions effects, especially with the
strategy to increase its market share in emerging markets. 42% of consolidated sales are generated
outside of the Euro zone. (Figure 27) The sensitivity is, however, not very significant: a 1% rise of the
EUR/USD would decrease the operating profit in 0.4m in 2014. The current trend in the forex
market is favorable to Lagardre (euro depreciation) (Figure 28)

Figure 28: Currency fluctuation
1.6
1.35
Economic Risk | GDP Growth

The sales per passengers in airports and train stations depends on economic climate which has an
impact on the purchasing power of travelers. As 53% of Group sales are from the Travel Retail
division, a decline in GDP growth rate may lead to a decrease in Travel Retail.
1.1
0.85
0.6
CHF/EUR
Source: Factset
GBP/EUR
USD/EUR
Economic Risk | Effects of digital and mobile technologies

A large portion of the Groups revenues derives from businesses that are sensitive to digital and
mobile technologies(digital transition). Innovation in digital and mobile technologies may affect
customers shopping habits, which can have a huge impact on the amount of customers in the Groups
store locations and sales of traditional analogue products such as magazines and printed books.
Transformation from TV to Internet may directly or indirectly create more uncertainty in revenues
directly or indirectly associated with advertising and broadcasting. Ambiguity in various markets has
a negative impact on the profitability for Lagardre.
Strategic Risk | Acquisition risk
Lagardre faces a poor track record regarding acquisitions and integration. The Group acquired
many companies with high valuation multiples, poor performances and high impairment loss.
9
January 11th 2016
Operational Risk | Terrorism

As recent events have shown, media, events and tourism that are open to public are increasing
targeted by terrorists. The growth of the Group which is exposed to these events have increased this
exposure to the impact of terrorist attacks.
Figure 29: GDP Growth

8.0%
7.0%
6.0%
Operational Risk | Geopolitical events

Lagardre has activities in countries sensitive to the risk of credit or liquidity crisis, in 2014, the
Group generated 4% of sales in countries rated Ba1 or lower by Moodys.
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Bresil
China
2012
US
2013
France
2014
Operational Risk | Major contract

Lagardre Sports & Entertainment (5% of group sales) and Lagardre TR (53% of group sales)
submitted a bid in a call for tenders. These 2 divisions have large contracts for sports events or
franchise in airports that are renewed every 3-10 years. There is, however, no guarantee that these
contracts will be renewed and there is a risk of losing contracts or revising pricing up, which would
negatively impact business volumes and margins.
Governance Risk
Lagardre meets the requirement of the AFEP/MEDEF code. However, the General Partner is also
the Chairman of the board, as well as largest shareholders and occupies many important positions in
the group. We think this situation not only reduces other shareholders ability to oppose against the
corporate strategy, but also presents potential conflicts of interest between corporate and personal
benefit. (Appendix )
Source: World Bank
Regulatory Risk | Special regulations

The group is subject to local specific regulations in the countries in which it operates, spread all 4
division, including intellectual property rights, legal copyright registration requirements, rules
governing the pricing of books, and VAT rules in publishing activities. Limitations principally
applicable to the sale of print media, foodstuffs, tobacco, alcohol and duty-free products and
transport operations in TR. Broadcasting service and audiovisual production in Active and Sports &
Entertainment.
Note: Please refer to Appendix 47 For Risk Matrix.
Corporate Governance and Social Responsibility
Figure 30: Remuneration

Compensation
(in millions)
2012
2013
2014
Fixed base salary and

benefits in kind
6.4
5.9
5.9
Variable salary
3.5
4.04
3.3
Extraordinary
compensation
0.026
4.4
Attendance fees
0.021
0.019
Total
9.947
9.959
13.6
Figure 31: Share ownership

Stakeholders
% of shares
Managing Partner
8.18%
Co-Managing Partners
0.16%
Supervisory Board
0.06%
Governance
In accordance with AFEP/MEDEF code, Lagardre meets the independence requirement of
supervisory board, all members are independent (Appendix 48), the establishment of 2 committees
and existence of code of conduct ensure the supervision of management and day-to-day activities.
The compensation and benefits are publicly released (Figure 30 & 31).
However, rights and obligations of shareholders are limited. Double voting rights for share
registered in the name of the same shareholder for at least four years reduce the volatility and
interests for minority shareholders. Shareholders are represented by the Supervisory board to give
consent to the appointment of the Managing Partners by the General Partners, thus they dont have
direct vote right to change a board director unless there are any disagreements between
Supervisory board and General Partners.
Social
Lagardre wants to play a role in improving the living condition and well-being of communities in
the countries in which it operates, in particular through educational, cultural and sportive activities
and initiatives.
Jean-Luc Lagardre Foundation and Elle Foundation have not only taken action in
supporting people with talent in the fields of writing, broadcast, music and digital technology,
encouraging the sharing of expertise, but have supported associations to grant access to education
for all as well as women and children projection, more than 240 young talented peoples beneficed
from the Jean-Luc Lagardre Foundation grants to pursue their major projects since 1991.
Furthermore, corporate efforts are taken to advance workforce diversity and social transformation,
as well as other measures to focus on the growth of employees and offer guidance for young people.
Environment
Lagardre shows best practice to improve its environmental performance by trying to use certified
and recycled paper, managing waste electrical and electronic equipment, creating an innovative
website that allows educators to view all new publications and specimen copied on line to reduce
the carbon footprint of distribution relating to this field of publishing.
10
January 11th 2016
Appendix Table of Contents

Appendix 1. Income Statement
Appendix 2. Margin Contribution by Division
Appendix 3. Balance Sheet
Appendix 4. Strategic Balance Sheet
Appendix 5. Vertical Balance Sheet
Appendix 6. Cash Flow Statement
Appendix 7. Free Cash Flow Restatement
Business Description
Appendix 8. Description of activities
Appendix 9. Acquisitions & Disposals
Appendix 10. GDP Zones and Forecasts
Appendix 11. Major Currency Snapshot
Appendix 12. Publishing Snapshot
Appendix 13. Publishing Industry Profitability Erosion
Appendix 14. Major Zone PAX and Forecast with GDP
Appendix 15. Europe PAX and Forecast with GDP
Appendix 16. Europe PAX and Forecast with Oil Price
Appendix 17. Management Structure
Appendix 18. Share Ownership Structure
Industry Overview
Appendix 19. Worlds busiest airports (by passenger trafic)
Appendix 20. SWOT Analysis
Valuation
Appendix 21. Peers Summary
Appendix 22. GDP growth forecasts
Appendix 23. Target capital structure
Appendix 24. WACC components
Appendix 25. Scenario Analysis
Appendix 26. Multiples summary
Appendix 27. Team Estimates vs Consensus
Appendix 28. Valuation Summary
Appendix 29. SOTP Valuation (EV/EBITDA Multiple)
Appendix 30. SOTP(P/E Multiple)
Appendix 31. FCF per share Valuation
Appendix 32. P/Earnings Regression
Appendix 33. P/Earnings Regression Bridge by Segment
Appendix 34. Forecast of EPS Growth of Peers
Financial Analysis
Appendix 36. Discount to peers
Appendix 37. Extended Dupont Analysis
Appendix 38. Jvs and Recurring Impact on Net Margin
Appendix 39. Degree of Operating Leverage
Appendix 40. Non Recurring Items, 2008-14 Cumulative Analysis per Share
Appendix 41. Profitability and Credit Analysis Snapshot
Appendix 42. Synthetic Credit Rating
Appendix 43. Capex Analysis
Appendix 44. Capex/Sales History with Peers
Appendix 45. Debt breakdown and Interest Rate Forecast
Appendix 46. Financial Interest Forecast based on Historical Data
Investment risk
Appendix 47. Risk Matrix
Corporate governance & social responsibility
Appendix 48. Supervisory Board
11
January 11th 2016
Appendix 1. Income Statement

2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Net Sales Media
Publishing
Active
Travel&Retail
Sport
Other Sales Group
8215 7892 7966

2159 2273 2165
2111 1725 1826
3501 3388 3579
444
507
396
406
397
373
7657
2038
1441
3724
454
391
Reported Sales
Growth
8621 8289 8339 8048 7722 7564 7493 7701 8179 8199 8340 8487
-5.0% -3.9% 0.6% -3.5% -4.1% -2.0% -0.9% 2.8% 6.2% 0.2% 1.7% 1.8%
Opex
-7823 -7619 -7671 -7421 -7163 -7048 -6977 -7159 -7599 -7620 -7749 -7884
EBITDA Media
EBITDA from control structure
EBITDA Group
EBITDA Burden effect from
structure
EBITDA MARGIN
803
-5
798
667
4
670
662
6
668
-0.6%
9.3%
0.4%
8.1%
0.9% -0.8% -1.9% -6.7% -5.1% -4.9% -4.6% -4.6% -4.5% -4.4%
8.0% 7.8% 7.2% 6.8% 6.9% 7.0% 7.1% 7.1% 7.1% 7.1%
D&A
-221
-276
-240
-308
-256
-214
-223
-204
-188
-197
-200
-206
EBIT Media
EBIT Group
587
577
397
394
434
428
331
319
323
304
347
302
330
293
375
338
430
393
419
382
429
392
434
397
Non Recurring Income

(expenses)
Jv's and Associates
2
246
-55
29
-150
65
-919
111
-181
105
1218
7
-93
9
-12
9
-35
9
-35
9
-35
9
-35
9
Financial income
Financial expenses
Net Financial Expenses
Tax Shield
39
-215
-176
6
14
-96
-82
35
21
-103
-82
21
21
-116
-95
-17
11
-93
-82
23
9
-100
-91
7
12
-85
-73
46
15
-64
-49
13
15
-64
-49
13
15
-64
-49
13
15
-64
-49
13
15
-64
-49
13
PreTax earnings
Income tax expense
649
-22
286
-123
627
34
0
129
4.61
0.28
163
27
0
127
1.07
1.21
Tax Rate
Net Earnings
Minorities
Share out
EPS
Payout Ratio
632
-5
627
7370 7216 7170 7378 7856 7876 8017 8164

2077 2066 2004 2133 2197 2208 2219 2231
1014 996
958
944
940
924
908
893
3809 3745 3814 3827 4272 4320 4427 4546
470
409
394
474
447
424
463
495
352
348
323
323
323
323
323
323
570
-11
559
553
-37
516
544
-28
516
570
-28
542
609
-28
581
607
-28
579
619
-28
591
631
-28
603
CAGR
08-14 15-19
-2.2%
-1.2%
-12.3%
1.4%
-2.0%
2.6%
1.1%
-1.4%
4.4%
1.1%
-7.0%
2.7%
261 -584 146 1436 137 286 318 308 317 322
-67
-105
-40
-117
-87
-74
-82
-79
-82
-83
-3.4% -43.0% 25.7% 18.0% 27.5% -8.1% 63.7% 25.7% 25.7% 25.7% 25.7% 25.7%
194
31
0
128
1.27
1.02
-689
18
0
127
-5.56
-0.23
106 1319 50
17
12
8
0
0
0
128
128
131
0.69 10.22 0.32
1.87 0.13 4.10
213
8
236
8
229
8
236
8
240
8
131
1.56
0.83
131
1.74
0.75
131
1.68
0.77
131
1.74
0.75
131
1.77
0.74
-36.0% 3.1%
Appendix 2. Margin Contribution by Division
EBITDA Margin (%)

Publishing
Active
Travel&Retail
Sport
Weight(%)
Publishing
Active
Travel&Retail
Sport
2008
2009
2010
2011
2012
2013
2014
2015E
2016E
2017E
2018E
2019E
9.8
12.3
11.2
5.0
25.9
8.5
14.1
2.9
4.2
29.0
8.3
12.5
6.1
4.5
28.8
8.3
11.8
8.0
4.4
23.3
7.7
11.7
7.8
4.4
16.6
7.7
11.8
7.8
4.4
15.9
7.6
10.9
9.0
4.8
13.7
7.7
10.8
7.5
5.0
16.7
7.7
10.8
7.5
6.0
16.6
7.7
10.7
7.5
6.0
16.4
7.7
10.7
7.5
6.1
16.6
7.7
10.6
7.5
6.1
16.7
33.7
30.0
21.9
14.3
49.0
7.5
21.4
22.0
41.4
17.1
24.3
17.2
38.8
18.4
26.1
16.8
43.2
13.9
29.3
13.7
12
44.7
14.1
29.5
11.8
40.6
15.8
33.6
9.9
41.0
12.4
32.7
13.9
39.3
11.6
36.9
12.1
39.5
11.4
37.6
11.5
38.7
11.0
37.9
12.4
38.0
10.6
38.3
13.1
January 11th 2016
Appendix 3. Balance Sheet
2008
2009
2010
Cash and Equivalents

Short term bank loans and overdrafts
Net Cash
Short-Terms Investments
Account Receivables
Inventory
Other Current Assets
Derivative financial instruments
Loans
Current Assets
835
(259)
576
117
1,647
551
933
404
40
4,527
764
(245)
519
78
1,468
538
857
12
34
3,750
616
654
648
1,748
528
797
713
723
738
786
(105)
(60)
(49)
(71)
(68)
(68)
(68)
(68)
(68)
(68)
511
594
599
1,677
460
729
645
655
670
718
106
83
55
36
38
38
38
38
38
38
1,189
1,276
1,255
1,239
1,280 1,266 1,343 1,343 1,343 1,343
523
542
581
559
578
555
556
556
557
557
914
900
978
1,005
959
895
951
953
969
986
14
11
5
4
7
7
7
7
7
7
55
52
29
10
10
10
10
10
10
10
3,417 3,518 3,550 4,601 3,400 3,567 3,618 3,631 3,662 3,728
Net Property Plant, and Equipment

Goodwill
Intangible Assets
Deferred Tax Assets
Investments in non consolidated companies
Loans and receivables
Investments in Associates
Non-Current Assets
Assets held for sale
Total Assets
636
2,980
1,340
203
121
81
2,443
7,804
12,331
2011
2012
2013
1,845
1,191
522
82
522
229
336
4,727
1,754
492
533
96
480
245
370
3,970
1,618
541
578
92
438
306
342
3,915
1,613
163
606
3
480
326
317
3,508
1,651
238
642
1
460
249
293
3,534
1,645
806
693
1
433
240
342
4,160
Long-Term Debt
Deferred Tax Liabilities
Provisions for pensions
Non-current provisions for contingencies and
losses
Other non-current liabilities:
Non Current Liabilities
Liabilities associated with assets held for sales
Total liabilities
2,380
243
94
2,174
223
102
1,953
126
101
1,843
143
101
2,165
290
119
189
252
3,158
7,885
179
395
3,073
7,043
170
219
2,569
399
6,883
162
147
2,396
5,904
Share Capital
Reserves
Retained Earnings(Deficit)
Shareholder's Equity
800
2,962
593
4,355
800
3,021
137
3,958
800
2,923
163
3,886
Minority Interest
Total Equity
91
4,446
124
4,082
11,125
11,125
12,331
12,331
2015E 2016E 2017E 2018E 2019E
635
625
712
739
762
840 1,107 1,146 1,178 1,208 1,208
2,810
2,583 1,837
1,799
1,619
1,740
1,740 1,740 1,740 1,740 1,740
1,386
846
746
1,016
885
1,045
1,283 1,283 1,283 1,283 1,283
169
167
184
236
190
199
199
199
199
199
199
90
49
64
47
59
56
56
56
56
56
56
116
63
83
85
64
69
69
69
69
69
69
2,169
2,054 1,771
1,451
152
159
159
159
159
159
159
7,375
6,387 5,397 5,373 3,731 4,108 4,612 4,652 4,684 4,713 4,713
1,097
13
437
11,125 10,901 8,928 9,360 8,332 7,508 8,180 8,270 8,315 8,375 8,441
Accounts Payable
Short-Term Debt
Other Payable
Accrued taxes and employee benefit expense
Sundry payables
Current provisions for contingencies and losses
Current Liabilities
Total Equity and Liabilities

Total Assets
2014
1,702
1,713
490 1,033
525
562
1
1
443
443
249
249
273
273
3,683 4,275
1,717
1,033
599
1
443
249
273
4,315
1,718
558
600
1
443
249
273
3,842
1,719
558
611
1
443
249
273
3,854
1,720
558
622
1
443
249
273
3,866
617
245
117
1,030
289
155
1,084
289
155
1,084
289
155
1,559
289
155
1,559
289
155
1,559
289
155
168
93
2,835
6,369
158
108
1,245
5,405
158
112
1,744
5,427
158
112
1,798
6,073
158
112
1,798
158
112
2,273
158
112
2,273
158
112
2,273
6,113
6,115
6,127
6,139
800
2,856
(707)
2,949
800
2,020
89
2,909
800
742
1,307
2,849
800
1,141
41
1,982
800
2,008
800
2,058
800
2,100
800
2,149
800
2,202
132
4,018
75
3,024
82
2,991
78
2,927
99
2,081
99
2,107
99
2,157
99
2,199
99
2,248
99
2,301
10,901
10,901
8,928
8,928
9,360
9,360
8,332
8,332
7,508
7,508
8,180
8,180
8,270
8,270
8,315
8,315
8,375
8,375
8,441
8,441
13
January 11th 2016
Appendix 4. Strategic Balance Sheet
2008
2009
2010
2011
2012
2013
2014 2015E 2016E 2017E 2018E 2019E
Current Operating Assets

Current Operating Liabilities
Net Working Capital
Variation
NWC/sales
3,131
2,863
2,626 2,718 2,814 2,803 2,817 2,716 2,850 2,853 2,869 2,887
3,118
3,012
2,940 3,025 3,002 3,011 2,919 2,968 3,008 3,010 3,022 3,034
13
-149
-314
-307
-188
-208
-102 -252 -158 -158 -152 -147
134
(162)
(164)
7
118
(20)
106 (150)
94
(0)
5
5
0.15% -1.80% -3.76% -3.81% -2.44% -2.75% -1.36% -3.27% -1.93% -1.92% -1.83% -1.74%
Fixed Assets
Goodwill
Intangible
Investment in Joint Venture and Associates
Total Non Current Operating Assets
636
2,980
1,340
2,564
4,956
635
2,810
1,386
2,259
4,831
625
712
739
762
840 1,107 1,146 1,178 1,208 1,208
2,583 1,837 1,799 1,619 1,740 1,740 1,740 1,740 1,740 1,740
846
746 1,016
885 1,045 1,283 1,283 1,283 1,283 1,283
2,103 1,835 1,498
211
215
215
215
215
215
215
4,054 3,295 3,554 3,266 3,625 4,129 4,169 4,201 4,230 4,230
Total Capital Employed

Total Capital Employed Without GoodWill
4,969
1,989
4,682
1,872
3,740
1,157
Cash and Equivalent

Gross Debt
Net debt/(cash)
Other Financial Assets
Other financial Liabilities
Net Financial Assets (Liabilities)
835
3,571
2,736
3.43
642
82
560
764
2,666
1,902
2.84
239
96
143
616
654
648 1,748
2,494 2,006 2,403 1,423
1,878 1,352 1,755 (325)
2.81
2.16
3.14 (0.63)
238
229
173
114
92
3
1
1
146
226
172
113
Other Operating Assets

Other Operating Liabilities
Net Operating Assets (Liabilities)
203
495
(292)
169
618
(449)
Provisions
Shareholders funds
Minorities
Equity capital
619
4,355
91
4,446
651
3,958
124
4,082
613
580
580
617
586
586
586
586
586
586
3,886 2,949 2,909 2,849 1,982 2,008 2,058 2,100 2,149 2,202
132
75
82
78
99
99
99
99
99
99
4,018 3,024 2,991 2,927 2,081 2,107 2,157 2,199 2,248 2,301
Total Assets
Total Liabilities
12,331
12,331
11,125
11,125
10,901
10,901
1,264
744
520
2,988
1,151
197
290
(93)
8,928
8,928
-
3,366
1,567
3,058
1,439
3,523
1,783
3,877 4,011 4,043 4,078 4,083

2,137 2,271 2,303 2,338 2,343
528
797
713
723
738
786
1,520 2,117 2,117 2,117 2,117 2,117
992 1,320 1,404 1,394 1,379 1,331
1.92
2.44
2.42
2.41
2.33
2.21
124
124
124
124
124
124
1
1
1
1
1
1
123
123
123
123
123
123
673
190
199
199
199
199
199
199
383
353
401
401
401
401
401
401
290 (163) (202) (202) (202) (202) (202) (202)
9,360
9,360
-
8,332
8,332
-
7,508
7,508
-
8,180
8,180
-
8,270
8,270
-
8,315
8,315
-
8,375
8,375
-
8,441
8,441
-
Current Operating Assets
(=) Account receivables + Inventory + Other Current Assets (excluding loans and derivatives instruments)
Current Operating Liabilities

Total Capital Employed
Other Financial Assets
Other Operating Assets
Other Operating Liabilities
(=) Accounts Payable + Accrued Taxes and employee benefit expense + Sundry payable + Other Payable
(=) Net working capital + Total non Current operating assets
(=) Short and Long term Loans + Derivatives + Short Term Investments
(=) Deferred tax assets + Assets held for sales
(=) Deferred tax liabilities + Other non Current liabilities + Liabilities held for sales
14
January 11th 2016
Appendix 5. Vertical Balance Sheet
2008
2009
2010
2011
2012
2013
2014
2015E 2016E 2017E 2018E 2019E
7%
1%
13%
4%
8%
3%
0%
37%
7%
1%
13%
5%
8%
0%
0%
34%
6%
1%
11%
5%
8%
0%
1%
31%
7%
1%
14%
6%
10%
0%
1%
39%
7%
1%
13%
6%
10%
0%
0%
38%
21%
0%
15%
7%
12%
0%
0%
55%
7%
1%
17%
8%
13%
0%
0%
45%
9%
0%
16%
7%
11%
0%
0%
44%
8%
0%
16%
7%
12%
0%
0%
44%
8%
0%
16%
7%
12%
0%
0%
43%
8%
0%
16%
7%
12%
0%
0%
43%
9%
0%
16%
7%
12%
0%
0%
44%
5%
24%
11%
2%
1%
1%
20%
63%
0%
100%
6%
25%
12%
2%
1%
1%
19%
66%
0%
100%
6%
24%
8%
2%
0%
1%
19%
59%
10%
100%
8%
21%
8%
2%
1%
1%
20%
60%
0%
100%
8%
19%
11%
3%
1%
1%
16%
57%
5%
100%
9%
19%
11%
2%
1%
1%
2%
45%
0%
100%
11%
23%
14%
3%
1%
1%
2%
55%
0%
100%
14%
21%
16%
2%
1%
1%
2%
56%
0%
100%
14%
21%
16%
2%
1%
1%
2%
56%
0%
100%
14%
21%
15%
2%
1%
1%
2%
57%
0%
100%
15%
21%
15%
2%
1%
1%
2%
57%
0%
100%
15%
21%
15%
2%
1%
1%
2%
56%
0%
100%
Accounts Payable
Short-Term Debt
Other Payable
Accrued taxes and employee benefit expense
Sundry payables
Current provisions for contingencies and losses
Current Liabilities
15%
10%
4%
1%
4%
2%
3%
38%
16%
4%
5%
1%
4%
2%
3%
36%
15%
5%
5%
1%
4%
3%
3%
36%
18%
2%
7%
0%
5%
4%
4%
39%
18%
3%
7%
0%
5%
3%
3%
38%
20%
10%
8%
0%
5%
3%
4%
50%
23%
7%
7%
0%
6%
3%
4%
49%
21%
13%
7%
0%
5%
3%
3%
52%
21%
13%
7%
0%
5%
3%
3%
52%
21%
7%
7%
0%
5%
3%
3%
46%
21%
7%
7%
0%
5%
3%
3%
46%
20%
7%
7%
0%
5%
3%
3%
46%
Long-Term Debt
Deferred Tax Liabilities
Provisions for pensions
Non-current provisions for contingencies and
losses
Other Non Current Liabilities
Non Current Liabilities
Liabilities associated with assets held for sales
Total liabilities
19%
2%
1%
20%
2%
1%
18%
1%
1%
21%
2%
1%
23%
3%
1%
7%
3%
1%
14%
4%
2%
13%
4%
2%
13%
4%
2%
19%
3%
2%
19%
3%
2%
19%
3%
2%
2%
2%
26%
0%
64%
2%
4%
28%
0%
63%
2%
2%
24%
4%
63%
2%
2%
27%
0%
66%
2%
1%
30%
0%
68%
2%
1%
15%
0%
65%
2%
1%
23%
0%
72%
2%
1%
22%
0%
74%
2%
1%
22%
0%
74%
2%
1%
27%
0%
74%
2%
1%
27%
0%
73%
2%
1%
27%
0%
73%
Share Capital
Reserves
Retained Earnings(Deficit)
Shareholder's Equity
6%
24%
5%
35%
7%
27%
1%
36%
7%
27%
1%
36%
9%
32%
-8%
33%
9%
22%
1%
31%
10%
9%
16%
34%
11%
15%
1%
26%
10%
0%
0%
24%
10%
0%
0%
25%
10%
0%
0%
25%
10%
0%
0%
25%
9%
0%
0%
26%
Minority Interest
Total Equity
1%
36%
1%
37%
1%
37%
1%
34%
1%
32%
1%
35%
1%
28%
1%
26%
1%
26%
1%
26%
1%
27%
1%
27%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Cash and Equivalents

Short-Terms Investments
Account Receivables
Inventory
Other Current Assets
Loans
Current Assets
Net Property Plant, and Equipment
Goodwill
Intangible Assets
Deferred Tax Assets
Investments in non consolidated companies
Loans and receivables
Investments in Associates
Non-Current Assets
Assets held for sale
Total Assets
Total Equity and Liabilities

Total Assets
15
January 11th 2016
Appendix 6. Cash Flow Statement

2008
PreTax Earning
2009
2010
2011
2012
2013
2014
2015E
2016E
2017E
2018E
2019E
825
368
343
(489)
228
1,527
210
335
367
356
366
371
(-) Depreciation and amortisation

(+) Other Items
(+) Change in Current Assets
(-) Change in Current Liabilities
(=) Change in Working Capital
(201)
(209)
172
38
141
(257)
(28)
(268)
(106)
(127)
(238)
58
(236)
(72)
(81)
(305)
548
92
85
170
(246)
92
95
(23)
21
(214)
(1,337)
(11)
9
(116)
(223)
(39)
14
(92)
49
(204)
12
(101)
49
(150)
(188)
35
134
40
94
(197)
35
3
3
(0)
(200)
35
17
11
5
(206)
35
17
12
5
(+) Dividends from equity accounted companies

(+) (Income) loss equity accounted companies
30
(136)
31
26
17
(65)
35
198
48
(61)
17
(7)
(9)
(9)
(9)
(9)
(9)
Gross Cash Flow from Operating Activities

Net Financial Income
Net Income Tax
Net CFO
570
(194)
(178)
198
781
(111)
(119)
551
672
(67)
(74)
531
427
(87)
(83)
257
531
(76)
(64)
391
570
(86)
(149)
335
355
(69)
(75)
211
692
(49)
(74)
569
487
(49)
(82)
356
579
(49)
(79)
451
586
(49)
(82)
456
598
(49)
(83)
466
Capex for Intangible and PP&E

Capex for other assets and Investments
Proceeds from investing activities
(Increase) decrease in short term investments
Net CFI
(225)
(484)
778
8
77
(240)
(63)
700
37
434
(228)
(82)
104
(29)
(235)
(253)
(99)
840
21
509
(264)
(384)
85
28
(535)
(296)
(41)
3,418
29
3,110
(249)
(282)
50
(481)
(233)
(475)
(228)
-
(708)
(228)
(228)
(228)
(229)
(229)
(206)
(206)
Other Financing Items

Dividends paid to owners of parent
Dividends paid to minority
Net Change in Debt
Net CFF
(102)
(174)
(28)
131
(173)
(1)
(171)
(31)
(852)
(1,055)
8
(167)
(33)
(41)
(233)
(24)
(167)
(28)
(551)
(770)
(60)
(166)
(26)
414
162
(18)
(1,323)
(16)
(1,004)
(2,361)
(47)
(945)
(16)
58
(950)
(3)
(170)
(16)
597
408
(26)
(170)
(16)
(212)
(26)
(170)
(16)
(212)
(26)
(170)
(16)
(212)
(26)
(170)
(16)
(212)
269
(84)
11
14
48
460.0
728.7
9%
728.7
644.8
8%
644.8
655.3
8%
655.3
669.8
8%
669.8
717.7
8%
10
40
Other Effects
Change in cash and cash equivalents
2
104
12
(58)
(71)
(8)
87
83
(13)
5
(6)
1,078
4
(1,216)
Cash and Equivalents, Beginning of the year

Cash and Equivalents, End of Year
NET CASH/SALES
472
576
7%
576
518
6%
518
510
6%
510
593
7%
593
598
8%
598
1,676
22%
1,676
460
6%
Appendix 7. Free Cash flow Restatement
2008
Revenue
Growth
Opex
2009
2010
2011
2012
2013
2014
2015E
2016E
2017E
2018E
2019E
8,621
-5.0%
-7823
8,289
-3.9%
-7619
8,339
0.6%
-7671
8,048
-3.5%
-7421
7,722
-4.1%
-7163
7,564
-2.0%
-7048
7,493
-0.9%
-6977
7,701
2.8%
-7159
8,179
6.2%
-7599
8,199
0.2%
-7620
8,340
1.7%
-7749
8,487
1.8%
-7884
(=) EBITDA
(-) D&A
(=) EBIT
% Margin
(-) Tax on Operating Income
% Tax Rate
(=) NOPAT
798
(221)
577
6.7%
(147)
25.5%
430
670
(276)
394
4.8%
(100)
25.5%
294
668
(240)
428
5.1%
(109)
25.5%
319
627
(308)
319
4.0%
(81)
25.5%
238
559
(256)
304
3.9%
(77)
25.5%
226
516
(214)
302
4.0%
(77)
25.5%
225
516
(223)
293
3.9%
(75)
25.5%
218
542
(204)
338
4.4%
(86)
25.5%
252
581
(188)
393
4.8%
(100)
25.5%
293
579
(197)
382
4.7%
(97)
25.5%
285
591
(200)
392
4.7%
(100)
25.5%
292
603
(206)
397
4.7%
(101)
25.5%
296
(+) Depreciation & Amortisation
(221)
(276)
(240)
(308)
(256)
(214)
(223)
(204)
(188)
(197)
(200)
(206)
(-) Capex for PPE and Intangible

(-) Change in NWC
(225)
141
(240)
(127)
(228)
(81)
(253)
170
(264)
21
(296)
(116)
(249)
49
(233)
(150)
(228)
94
(228)
(0)
(229)
5
(206)
5
412
-10%
123
-70%
(=) Free Cash Flow

Growth in FCF
285
457
60%
197
60%
16
259
32%
143
-45%
372
160%
159
-57%
253
59%
257
2%
291
13%
January 11th 2016
Go back
Appendix 8. Description of activities
LAGARDERE
28% of sales
Books and e-Books
publishing
13% of sales
53% of sales
Travel Essentials,
Free & Luxury
Foodservice
Press
activities
and
magazine
publishing,
audiovisual (TV, radio,
audiovisual production),
digital and advertising
sales brokerage
Duty
and
17
5% of sales
Athlete
representation,
venue consulting, events
production
and
management, marketing
rights
January 11th 2016
Go back
Appendix 9. Acquisitions & Disposals
Lagardre Publishing
Acquisitions
2
4
1
0
1
0
0
4
4
16
22%
2015
2014
2013
2012
2011
2010
2009
2008
2007
TOTAL
Lagardre Travel Retail
Disposals
1
1
1
0
1
1
3
2
6
16
36%
Acquisitions
1
1
3
6
1
0
1
1
0
14
19%
Disposals
2
3
0
0
0
0
0
0
1
6
14%
Lagardre Active
Acquisitions
2
2
4
3
0
1
2
4
7
25
Disposals
2
2
2
1
5
3
3
0
1
19
Lagardre Sports and

Entertainment
Acquisitions
Disposals
3
1
2
0
1
0
1
0
1
0
2
0
1
0
4
0
2
2
17
3
24%
7%
35%
43%
NB: This table highlights the number of acquisitions and disposals by division for each year. The most
dynamic division is Lagardre Active with 35% of group acquisitions and 43% of group disposals
98.2 M
70 M
865 M
Feb 08
Jun 12
55 M
Dec 08
Nov 06
May 15
Apr 14
Acquisitions
Lagardre Acquisition & Divesture Timeline

Divestures
Apr 13
Feb 08
Mar 11
2,283 M
Oct 13
1,020 M
651 M
18
485 M
Aug 15
January 11th 2016
Go back
Appendix 10. GDP Zones and Forecasts

11.0%
9.0%
7.0%
5.0%
3.0%
1.0%
2013
-1.0%
2014
EURO AREA GDP
2015E
USA GDP
2016E
ASIA GDP
2017E
Emirates GDP
Source: World Bank
Appendix 11. Major Currency Snapshot

90
4.5
EUR/RUB
80
4.0
70
3.5
EUR/BRL
60
3.0
50
40
01/14
07/14
01/15
2.5
01/14
07/15
EUR/USD
1.4
9.0
07/14
01/15
07/15
EUR/CNY
8.5
8.0
1.3
7.5
1.2
7.0
1.1
1.0
01/14
6.5
07/14
01/15
6.0
01/14
07/15
Source: Factset
19
07/14
01/15
07/15
January 11th 2016
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Appendix 12. Publishing Snapshot

Publisher
Holding
Hachette
PRH
LAGARDERE
BERTELSMANN
Harper Collins
NEWS
CORPORATION
Simon&Schuster
CBS CORPORATION
LFY Revenue (M)

LFY Organic Growth
Organic Average % 5 Yr
Reported Growth Average % 5 Yr
2029
-1.8%
-2.6%
-1.3%
3324
0.70%
6.06%
13.63%
1257
-3.07%
0.59%
8.91%
586
NA
NA
-0.31%
LFY EBITDA
LFY EBITDA Margin
5 Year Average EBITDA Margin
221
10.9%
11.9%
452
13.6%
13.5%
167
13.3%
10.5%
81
13.8%
12.0%
LFY Geographic Exposure

USA
UK
Europe
Other
21.3%
18.2%
37%
24%
55.6%
11.8%
16.1%
17%
44.0%
26.6%
2.0%
27%
89%
2%
2%
7%
Digital exposure
c10%
c20%
c25%
c25%
Appendix 13a. Publishing FCF dividend coverage
Source : Company
Appendix 13b. Publishing Industry Profitability Erosion
Source : The book publishing industry, 3rd edition
20
8%
January 12th 2015
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Appendix 14: Major Zone PAX and Forecast with GDP
EUROPE PAX
EURO AREA GDP
2008
1.2%
6.7%
2009
-5.8%
-10.0%
2010
3.0%
-1.1%
2011
6.8%
7.8%
2012
1.0%
-5.9%
2013
2.2%
4.2%
2014
4.7%
3.1%
2015E
1.7%
1.5%
2016E
1.9%
1.8%
2017E
1.8%
1.6%
CAGR 20082013
1.9%
-1.3%
NORTH AMERICA
USA GDP
-2.9%
1.7%
-4.0%
-2.0%
2.6%
3.8%
2.1%
3.7%
3.4%
4.2%
-1.6%
3.7%
5.3%
3.9%
12%
2.7%
1.4%
2.8%
0.9%
2.4%
1.2%
2.6%
ASIA
ASIA GDP
0.1%
26.1%
45.1%
9.6%
21.5%
20.9%
6.8%
22.7%
16.0%
11.5%
5.1%
10.5%
5.9%
7.9%
7.5%
6.7%
7.5%
6.7%
7.4%
6.6%
18.1%
8.5%
Middle East
Emirates GDP
9.0%
22.3%
9.2%
-19.6%
15.4%
12.8%
8.0%
21.5%
13.2%
7.2%
15.2%
8.1%
9.4%
-0.2%
11.0%
2.2%
10.9%
3.7%
10.9%
3.8%
12.2%
6.2%
WorldWide
World GDP
-1.2%
9.6%
2.6%
-5.2%
5.4%
9.7%
4.8%
10.8%
4.1%
2.1%
3.1%
2.8%
3.0%
2.6%
3.0%
2.8%
3.0%
3.3%
3.0%
3.2%
2.3%
3.9%
Sources : World Bank for GDP data and forecast, Airport Council International for airport data
Appendix 15: Europe PAX and Forecast with GDP
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
-12%
2008
2009
2010
2011
2012
EUROPE PAX
2013
2014
2015E
2016E
2017E
2015
2016
2017
EURO AREA GDP
Sources: World Bank for GDP data and forecast, Airport Council International for airport data
Appendix 16: Europe PAX and Forecast with Oil Price

40%
30%
20%
10%
0%
-10%
2008
2009
2010
2011
2012
2013
2014
-20%
-30%
-40%
-50%
EUROPE PAX
OIL PRICE
Sources: OPEC for GDP data and forecast, Airport Council International for airport data
21
January 11th 2016
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Appendix 17. Management Structure

A. Partners
Lagardre SCA is a French partnership limited by shares, who has two categories of Partners.
Lagardre SCA
(MMB)
Limited
Partners**
General
Partners*
Arjil
CommanditeArco
Arnaud
Lagardre
B. Executive Committee
Executive
Committee
Ramzi Khiroun
Spokesman for the Managing
Partners
Managing
Partners
Arnaud
Lagardre
Arnaud Lagardre
Chairman
General and Managing
Partner
Arjil
CommanditeArco
Pierre Leroy
Secretary General
Co-Managing Partner
Dominique DHinnin
CFO
Co-Managing Partner
Thierry Funck-Brentano
Chief HRCSDO
Co-Managing Partner
*As a French partnership limited by shares, two General Partners are liable to an unlimited extent for
companys liability.
*Limited Partners are represented by a Supervisory Board, and managed by Managing Partners
*In Lagardre SCA, General Partners are also Managing Partners
22
January 11th 2016
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Appendix 17. Management structure

The members of the Executive Committee
Director
Position
Held Since
Affiliates/Other positions
Arnaud Lagardre
Managing Partners of Lagardre SCA
Managing Partners since March 2003

Tenure: 29 Years
Pierre Leroy
Co-Managing Partner of Lagarde re

SCA
Secretary General of the Lagarde re
group
Director and CEO of MMB in 1987

Chairman and CEO of Lagardre
Socits in 1988 Secretary General of
Lagardre group in 1993
Tenure: 29 Years
23
Chairman and Chief Executive Officer, Arjil Commandite e-Arco

SA
Chairman, Lagarde re SAS
Chairman, Lagarde re Capital & Management SAS
Chairman and Chief Executive Officer and
Chairman of the Board of Directors of Lagarde re Media SAS
Director, Hachette Livre SA
Chairman of the Supervisory Board, Lagarde re Services SAS
Chairman of the Supervisory Board, Lagarde re Active SAS
Chairman of the Executive Committee,
Lagarde re Unlimited SAS
Director, Lagarde re Ressources SAS
Chairman, Lagarde re Unlimited Inc.
Permanent representative, Lagarde re Unlimited Inc.
Managing Member, Lagarde re Unlimited LLC
Chairman, Sports Investment Company LLC
Member of the Board of Directors, World Sport Group
Investments Ltd
Holdings Ltd
Chairman, Fondation Jean-Luc Lagarde re
Chairman, Lagarde re Paris Racing Ressources sports
association (not-for-profit organisation)
Chairman, Lagarde re Paris Racing sports association (not-forprofit organisation)
Director, Deputy Chairman and Chief Operating Officer, Arjil
Commandite e Arco SA
Chairman, Lagarde re Ressources SAS
Director, Deputy Chairman and Chief Operating Officer,
Lagarde re Media SAS
Member of the Supervisory Board, Lagarde re Services SAS
Member of the Supervisory Board, Lagarde re Active SAS
Director, Lagarde re Active Broadcast
(a Monaco-based joint-stock corporation)
Chairman of the Supervisory Board,
Socie te dExploitation des Folies Berge re SAS
Liquidator, Financie re de Pichat & Compagnie SCA
Chairman, Lagarde re Participations SAS
Chairman, Lagarde re Expression SAS
Chairman, Dariade SAS
Chairman, Sofrimo SAS Chairman, Holpa SAS
Permanent representative of Lagarde re Participations to the
Board of Directors, Galice SA
Representative, Lagarde re Participations, Chairman, He lios
SAS
Director, Ecrinvest 4 SA
Director, Fondation Jean-Luc Lagarde re
Chairman and Chief Executive Officer, Lagarde re Paris Racing
Ressources SASP
Manager, Team Lagarde re SNC
Member of the Board of Directors, Lagarde re UK Ltd Director,
Lagarde re Capital & Management SAS
January 11th 2016
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Appendix 17. Management structure

The members of the Executive Committee
Director
Position
Held Since
Dominique dHinnin

SCA
CFO, Lagarde re group
CFO since 1998

Tenure: 18 Years
Thierry Funck-Brentano

SCA
Chief Human Relations,
Communications and Sustainable
Development Officer, Lagarde re group
Entire career with the Lagardre group

Tenure: 23 Years
Chief Operating Officer, Arjil Commandite e-Arco

SA Director and Chief Operating Officer, Lagarde re Media SAS
Chairman and Chief Executive Officer, Ecrinvest 4 SA
Permanent representative of Lagarde re Media SAS to the
Board of Directors of Lagarde re Active Broadcast (a Monacobased joint-stock corporation)
Member of the Supervisory Board, Matra Manufacturing &
Services SAS
Director, Marie Claire Album SA
Director, Holding E. Prouvost SA
Member of the Board of Directors, Lagarde re North America,
Inc.
Director and Chief Operating Officer, Arjil Commandite e-Arco
SA
Director and Chief Operating Officer, Lagarde re Media SAS
Permanent representative of Lagarde re Media SAS to the
Board of Directors, Hachette Livre SA
Chairman and member of the Management Committee,
Lagarde re Unlimited SAS
Holdings Ltd
Investments Ltd
Representative, Lagarde re Unlimited, Chairman, Lagarde re
Unlimited Stadium Solutions SAS
Director, Lagarde re Active Broadcast (a Monaco-based jointstock corporation)
Member of the Supervisory Board, Socie te dExploitation des
Folies Berge re SAS
Director, Lagarde re Capital & Management SAS
Chairman of the Supervisory Board, Matra Manufacturing &
Services SAS
Director, Ecrinvest 4 SA
Director, Fondation Jean-Luc Lagarde re
Director, Secretary General and Treasurer, Lagarde re Paris
Racing Ressources sports association (not-for-profit
organisation)
Secretary General and member of the steering committee,
Lagarde re Paris Racing sports association
Corporate Officers
director
position
Held Since
Joined Lagardre
Since
Other positions held before replacement
Arnaud Nourry
Chairman, CEO
Hachette Livre
23 May 2003
1992
Director, Groupe Alexandre Hatier
Dag Rasmussen
Chairman,CEO
Lagardre Travel Retail
2011
1988
COO, president, Lagardre Travel Retail
Denis Olivennes
Chairman,CEO
Lagardre Active
7 november 2011
2010
president, Canal+ France

CEO, FNAC
Arnaud Lagardre
CEO
Lagardre Sports and
Entertainment
Grar Adsuar
Deputy CFO
Lagardre SCA
1987
25 January 2011
1989
24
CFO, Telecommunication satellites business of Astrium
January 11th 2016
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Appendix 18. Share ownership structure
A. Share Capital
French
Institutional
Investors
Non-French
investors
12.34%
67.75%
Private
investors
Lagardre
Capital&Management
8.28%
6.79%
Employees & Group

Savings plan
investment Funds
2.67%
Treasury
Shares
2.27%
Lagardre SCA
(MMB)
B. Voting Rights
French
Institutional
Investors
Non-French
investors
13.03%
63.2%
Private
investors
Lagardre
Capital&Management
12.73%
8.18%
Employees & Group

Savings plan
investment Funds
2.86%
Lagardre SCA
(MMB)
C. Principal shareholders
Shareholders
Share Capital
The rights to Vote
Arnaud Lagardre
8.18%
12.73%
Qatar Investment Authority
12.827%
9.98%
25
Treasury
Shares
0%
January 11th 2016
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Appendix 19. Worlds busiest airports (by passenger trafic)
Lagardre Travel Retail presence
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Location
Atlanta - Hartsfield-Jackson
Beijing
London Heathrow
Tokyo - Haneda
Los Angeles
Dubai
Chicago - O'Hare
Paris - CDG
Dallas - Fort Worth
Hong Kong
Frankfurt
Jakarta Soekarno-Hatta
Istanbul - Atatrk
Amsterdam - Schiphol
Canton Baiyun
Changi
New York - JFK
Denver
Shanghai - Pudong
Kuala Lumpur
Country
USA
China
United Kingdom
Japan
USA
United Arab Emirates
USA
France
USA
China
Germany
Indonesia
Turkey
Netherlands
China
Singapore
USA
USA
China
Malaysia
Number of passengers
96,178,899
86,130,390
73,408,442
72,826,862
70,665,472
70,475,636
70,015,746
63,808,796
63,523,489
63,148,379
59,566,132
57,005,406
56,767,108
54,978,023
54,780,346
54,091,802
53,635,346
53,472,514
51,651,800
48,932,471
NB: A portfolio of stores in 220 airports across four continents. Among the
20th busiest airports in the world, Lagardre TR is present in 11 airports.
Sources: Company data & Airport Council International
26
January 11th 2016
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Appendix 20. SWOT Analysis
Weaknesses
Strengths
- Still too dependent on mature and low growth activities

(Publishing 40% EBIT group part)
- Diversified activities: four businesses related to media

- Ability to reorganize itself towards growing activities
- Few synergies between sport and entertainment (10% of

EBITDAR media) and other media segments
- Responsive to economic changes (acquisitions)

- Important cash return for shareholders from recent
divestures (EADS and Canal+)
- Poor corporate governance (Partnership limited by shares)

- Disability to well price acquisitions: Le Guide, Sportfive
- Ability to adapt itself to globalization, digitalization trends

- Emblematic radio and magazines
SWOT
Threats
Opportunities
- Growth opportunities in airport retail division thanks to
growing air traffic and passenger spends
- Intense competition in all the business activities affecting

the groups market share
- Growth with potential acquisitions (Travel retail & Active)
- High competition with market leaders on the online retail

(Google and Amazon)
- Digital revolution: double screen eBook and smartphones

will bear margin in Publishing industry
- Global economic slowdown: Lagardre is subject to growth

slowdown of advertising in Europe
- Industry consolidation reduces Lagardres sales power
27
January 11th 2016
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Appendix 21. Peers summary
Book Publishing
Media
Travel Retail
Company Name
Market Cap Bn
(12/28/2015)
Total Revenue
M
Total EBITDA
Sales per
Margin
Business Unit M
BU
%Revenue
Net
Debt/EBITDA
Pearson
8,597
6,503
17.7%
6,503
100%
2.54x
News Corp
7,335
7,406
11.3%
1,667
23%
-2.12x
John Wiley
2,369
1,553
20.3%
1,553
100%
1.47x
Scholastic
1,203
1,308
6.7%
1,308
100%
-3.46x
Mondadori
263
1,238
6.9%
346
28%
3.97x
Lagardre
3,573
7,110
11.0%
2,004
28%
2.82x
Median
2,369
1,553
11.3%
1,553
1.47x
RTL Group
11,609
6,003
21.0%
6,003
100%
0.88x
News Corp
7,335
7,406
11.3%
5,731
77%
-2.12x
TF1
2,079
2,029
9.6%
2,029
100%
-1.66x
NRJ Group
784
380
15.8%
380
100%
-2.61x
GL Events
372
942
11.2%
942
100%
3.08x
Highlight
Communications
265
298
22.4%
298
100%
-0.04x
Mondadori
263
1,238
6.9%
889
72%
3.97x
Lagardre
3,573
7,110
10.4%
1,352
19%
Median
784
1,238
11.3
942
Dufry
5,887
4,973
12.0%
4,973
100%
2.82x
-0.04x
4.52x
Elior
3,260
5,581
8.1%
5,581
100%
3.33x
WH Smith
2,737
1,579
14.3%
706
45%
-0.10x
Autogrill
2,231
4,766
8.6%
2,732
57%
2.56x
Lagardre
3,573
7,110
4.8%
3,814
54%
2.82x
Median
2,998
4,869
10.3%
3,852
Source: Factset
28
2.95x
January 11th 2016
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Appendix 22. GDP growth forecasts
World Economy %
World (WBG members)
US
Euro Area
Central & Eastern Europe
East Asia & Pacific
China
2010
4.3
2.5
2.0
0.2
9.8
10.6
2011
3.2
1.6
1.7
1.6
8.4
9.5
2012
2.5
2.2
-0.7
0.6
7.4
7.8
2013
2.4
1.5
-0.2
2.8
7.1
7.7
2014
2.6
2.4
0.9
2.1
6.8
7.3
2015E 2016E 2017E

2.4
2.9
3.1
2.5
2.7
2.4
1.5
1.7
1.7
2.9
3.3
3.7
6.4
6.3
6.2
6.9
6.7
6.5
Source: World Bank
Appendix 23. Target capital structure
37%
Net Debt/(Net Debt+Equity)
63%
Equity/(Net Debt+Equity)
Appendix 24. WACC components
Weighted Average Cost of Capital
Risk-free rate
0.91%
France 10 Years OAT
Based on A. Damodaran's data: average beta of publishing

& newspaper, retail and broadcasting sectors
Based on A. Damodaran's data: total equity risk premium
6.41%
of France
Cost of equity 11.4%
Beta
1.63
Market premium
Tax rate
25.7%
Based on Lagardre data
Cost of debt
3.00%
Based on Lagardre data
Cost of debt after-tax 2.23%

WACC 7.9%
NB: Damodarans data are dated December 2015

= +
=

+ 1
+
+
29
January 11th 2016
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Revenue
2015E
2016E
2017E
2018E
2019E
7,701
8,179
8,199
8,340
8,487
Growth
2.8%
Opex
-7159
6.2%
-7599
0.2%
-7620
1.7%
-7749
1.8%
-7884
(=) EBITDA
542
581
579
591
603
(-) D&A
(204)
(188)
(197)
(200)
(206)
(=) EBIT
338
393
382
392
397
% Margin
4.4%
(-) Tax on Operating Income
(86)
% Tax Rate
25.5%
4.8%
(100)
25.5%
4.7%
(97)
4.7%
(100)
25.5%
4.7%
(101)
25.5%
25.5%
(=) NOPAT
252
293
285
292
296
(+) Depreciation & Amortisation
(204)
(188)
(197)
(200)
(206)
(-) Capex for PPE and Intangible
(233)
(228)
(228)
(229)
(206)
(-) Change in NWC
(150)
94
(=) Free Cash Flow

Growth in FCF
WACC
159
253
257
291
160%
-57%
59%
2%
13%
7.93%
2.0%
Terminal Value
5,000
P V of terminal value
3,685
P V of OFCF
FCF
18%
783
Entreprise value 2015
4,468
Net debt 2015
1,404
Minority 2015e + Pension for Obligations 2015e
254
E 2015 = EV - Net debt - Minorities and Pension
2,810
E 2016 = E 2015 *(1+Ke)
3,129
Shares outstanding
131
Target Price
23.9
WACC
372
Perpetuity growth rate
WACC
(0)
Terminal
Value, 82%
7.5%
7.7%
7.9%
8.1%
8.3%
1.6%
24.3
23.0
21.8
20.6
19.6
Perpetuity Growth
1.8%
2.0%
25.4
26.7
24.1
25.2
22.8
23.9
21.6
22.6
20.5
21.4
2.2%
28.0
26.5
25.0
23.7
22.4
2.4%
29.5
27.8
26.3
24.8
23.5
7.5%
7.7%
7.9%
8.1%
8.3%
1.6%
-4.4%
-9.5%
-14.3%
-18.8%
-23.0%
Perpetuity Growth
1.8%
2.0%
0.2%
5.1%
-5.2%
-0.7%
-10.3%
-6.0%
-15.0%
-11.1%
-19.5%
-15.8%
2.2%
10.4%
4.2%
-1.5%
-6.8%
-11.8%
2.4%
16.1%
9.5%
3.4%
-2.3%
-7.6%
30
January 11th 2016
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Appendix 26. Multiples summary
Business valuation(M)
EV/EBITDA
Publishing
1759
Media
988
Travel Retail
2030
EV Group 2016
4778
Net Debt
1404
Minorities
254
Conglomerate discount
-25%
Target Price ()
17.85
NB: EV/EBITDA is computed as EV at the beginning of the fiscal year divided by the forecast EBITDA of the
same fiscal year.
P/Earnings Valuation
FY16E
Estimated EPS
1.73
Average P/E segment
14.2x
Conglomerate discount
-25%
Target Price ()
18.52
NB: We applied a conglomerate discount of 25% to Lagardre target price because we believe the company
not to be a specialist in each of them and we dont see synergies between them.
Multiples valuation
Target price ()
P/Earnings
18.52
EV/EBITDA
17.85
Average Target Price ()
18.10
Sources: Team estimates & Factset
31
January 11th 2016
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Appendix 27. Team Estimates VS Consensus
SALES
MMB Consensus
Team Estimates
Position
2015E
7,146
7,378
3.3%
Team Estimates VS Consensus

2016E
7,350
7,856
6.9%
2017E
7,522
7,887
4.9%
EBITDA
MMB Consensus
Team Estimates
Premium/Discount
2015E
573
569
-0.8%
2016E
640
618
-3.5%
2017E
663
612
-7.8%
EPS
MMB Consensus
Team Estimates
Premium/Discount
2015E
1.8
1.5
-15.7%
2016E
1.9
1.7
-10.2%
2017E
2.0
1.6
-19.7%
Appendix 28. Valuation Summary
Multiple
TP
Weight
EV/EBITDA
23.8
25%
P/E
24.7
25%
REGRESSION P/E
28.3
25%
P/FCF
19.0
25%
Conglomerate
Discount
Multiple Valuation
18.00
50%
DCF Valuation
23.90
50%
Target Price
21.00
25%
32
January 11th 2016
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Appendix 29. SOTP Valuation (EV/EBITDA Multiple)
EV/EBITDA
2016E
2017E
EBITDA CONSENSUS
2015E
2016E
2017E
CAGR 1517
Publishing
Pearson
Wiley
News Corporation
Mondadori
Scholastic
Industry Multiple
Publishing EBITDAe*
Target EV
7.4x
8.8x
4.8x
6.4x
7.3x
7.3x
248
1759
7.2x
7.3x
4.1x
5.4x
6.4x
6.4x
244
1550
869
349
948
78
110
818
390
1004
91
132
843
470
1063
102
145
-1.5%
16.0%
5.9%
14.4%
14.8%
233
248
244
2.5%
6.9x
8.6x
6.4x
5.8x
4.2x
7.9x
6.8x
144
988
5.4x
8.1x
5.4x
5.6x
3.9x
6.4x
5.5x
139
765
191
1346
78
111
70
57
212
1399
91
118
73
73
261
1470
102
116
77
85
16.9%
4.5%
14.4%
2.2%
4.9%
22.1%
150
144
139
-3.77%
6.6x
9.5x
10.8x
8.1x
8.8x
225
2030
5.9x
8.0x
10.4x
7.4x
7.7x
229
1811
377
725
170
508
405
990
177
543
436
1116
183
575
7.54%
24.07%
3.75%
6.39%
186
225
229
10.78%
Active, Sport and Entertainment
TF1
RTL Group
Mondadori
GL Events
HightLight Com
NRJ Group
Industry Multiple
Media EBITDAe*
Target EV
Travel and Retail
Autogrill
Dufry
WHSmith
Elior
Travel Retail Multiple
Travel Retail EBITDAe*
Target EV
EV Group
Net Debt 2016e
Pension and Minorities 2016e
Equity Value
Share Out
Target Price
4778
1404
254
3120
131
23.80
We find a before discount target price of 23.80

using the EV/EBITDA multiple by division. We
used the Factset Consensus for each peer to
obtain the industry multiple. We used our team
estimates EBITDA to derive the target price.
Sources : Factset, Consensus & Team estimates
33
January 11th 2016
Go back
Appendix 30. SOTP (P/E Multiple)
P/E
EPS Estimate
2016E
2015E
2016E
2017E
CAGR 1517
PSON-GB
Pearson
10.7x
0.70
0.64
0.66
-3.3%
JW.A-US
Wiley
12.8x
2.79
3.27
3.80
16.8%
NWSA-US
News Corporation
19.7x
0.57
0.64
0.71
11.6%
MN-IT
Mondadori
9.5x
0.05
0.10
0.12
60.2%
SCHL-US
Scholastic
20.2x
1.33
1.87
1.63
10.7%
Publishing Multiple
12.8x
Weight
50%
TFI-FR
TF1
19.6x
0.46
0.50
0.65
19.0%
RTL-BE
RTL Group
14.8x
4.81
4.98
5.26
4.5%
MN-IT
Mondadori
9.5x
0.05
0.10
0.12
60.2%
GLO-FR
GL Events
10.8x
1.34
1.52
1.48
5.1%
HLG-ETR
HightLight Com
13.8x
0.34
0.40
0.44
14.1%
NRG-FR
NRJ Group
22.8x
0.29
0.41
0.51
33.3%
Media Multiple
14.3x
Weight
19%
AGL-IT
Autogrill
26.3x
0.23
0.31
0.38
28.0%
DUFN-CH
Dufry
12.7x
5.19
8.76
11.20
46.9%
SMWH-GB
WHSmith
16.9x
0.94
1.01
1.09
7.9%
ELIOR-FR
Elior
15.9x
0.99
1.12
1.22
11.4%
Travel Retail Multiple

Weight
Average PE Segments
Lagardre EPS (e) Team Estimates
Target Price
16.4x
32%
14.2x
1.74
24.7
Sources : Factset Consensus & Team estimates
34
We find a before discount target

price of 24.7 using the P/E multiple
by division. We applied the EBIT
2016E weight by division to find the
repartition P/E between activities.
We used the Factset Consensus for
each peer to obtain the industry
multiple. We used our team
estimates EPS to derive the target
price.
January 11th 2016
Go back
Appendix 31. FCF per share Valuation
P/FCF
2016E
2017E
Pearson
News Corporation
Scholastic
TF1
RTL Group
GL Events
HightLight Com
NRJ Group
Dufry
WHSmith
Elior
Median Multiple
Lagardre FCF Team estimates
Share Out
FCF/share
TP
15.4x
11.2x
19.6x
13.9x
12.3x
15.9x
32.9x
25.4x
9.0x
15.7x
17.7x
15.7x
159
131
1.21
19.0
13.0x
9.9x
18.7x
12.4x
11.7x
8.6x
15.4x
19.6x
8.2x
14.7x
13.8x
13.0x
253
131
1.93
FCF per Share CONSENSUS

2015E
2016E
2017E
0.5
1.1
1.7
0.5
4.2
0.1
0.0
0.4
-21.9
1.0
0.9
0.4
1.1
1.9
0.7
6.0
1.0
0.2
0.4
12.3
1.1
1.0
0.5
1.3
2.0
0.8
6.3
1.9
0.4
0.5
13.6
1.2
1.3
CAGR 1517
6.6%
8.1%
7.5%
21.3%
23.1%
NS
NS
10.9%
NS
7.3%
19.1%
Sources : Factset, Consensus and Team estimates
Appendix 32. P/Earnings regression
Group
Publishing
Travel Retail
Media
Weight* EPS 2016e Regression Multiple Target Value

100%
1.73
16.3x
28.3
51%
0.88
15.2x
13.4
31%
0.54
17.9x
9.6
18%
0.31
16.9x
5.3
NB: A broad sample of 240 firms (153 in Retail, 40 in Media and 47 in Publishing & Newspaper) was used to
regress forward P/E against 8 variables: leverage, EPS long-term growth rate (g), payout, beta, market
capitalization (logarithm), return on equity, liquidity, default spread for cost of debt. We then applied the *EBIT
2016e weight of each Lagardres activity to get a global group P/E which we multiplied by the forecasted 2016
EPS.
35
January 11th 2016
Go back
Appendix 33. P/Earnings Regression Bridge by Segment
28.3
5.3
9.6
13.4
Appendix 34. Forecast of EPS Growth of Peers
Companies
2016E
2017E
Lagardre
16%
-5%
Pearson
-10%
1%
Wiley
17%
16%
News Corporation
16%
12%
Mondadori
104%
17%
Scholastic
37%
-11%
Companies
2016E
2017E
Lagardre
16%
-5%
TF1
6%
30%
RTL Group
2%
7%
Mondadori
104%
17%
GL Events
15%
-5%
HightLight Com
19%
10%
NRJ Group
43%
27%
Companies
2016E
2017E
Lagardre
16%
-5%
Autogrill
34%
18%
Dufry
73%
24%
WHSmith
8%
7%
Elior
12%
7%
Source: Factset
36
January 11th 2016
Go back

Bear Case
BASE CASE
Bull Case
26.20
Average TP
19.10
21.00
Up/Downside
-25%
-17%
3.5%
Recommendation
SELL
SELL
NEUTRAL
DCF TP
EV/EBITDA TP
20.45
17.80
23.90
18.00
30.7
21.70
CAGR 15-19
-1.00%
1.10%
3.20%
Sales
Underlying organic growth at -1.5%. 50m additional

sales for the french education reform in 2016.
Publishing
EBITDA CAGR 15-19

EBITDA Margin
Underlying organic growth at 0.5%. 75m additional Underlying organic growth at 1.5%. 150m additional
sales for the french education reform in 2016
sales for the french education reform in 2016
-1.92%
0.89%
3.70%
10Bps pa decrease in EBITDA Margin with defavorable

Constant digital part, pressure on margin from author 5 Bps increase in EBITDA Margin with digital business
digital mix. Strong pressure on margin from author
royalties (-5bps on margin pa)
mix. No pressure from author royalties
royalties (-10bps on margin pa )
Travel & Retail and Distribution

CAGR 15-19
Sales
2.00%
4.40%
Underlying TravelR organic growth at CAGR 3.4% and Underlying organic growth at 2% with deteriorating
10% for Distribution. Contraction for 2016 and 2017
emerging market economies (Russia, Bresil and China ) .
with low oil prices and high volatility on emerging FX.
Paradies segment sales growth at c4%.
Paradies segment sales growth at c6%
5.5%
Underlying organic growth at 5%. Paradies Sales
growth at c10%
EBITDA CAGR 15-19
3.80%
8.20%
12.40%
EBITDA Margin
Increase in the EBITDA Margin with 6% from Paradies,

no synergies.
Increase in the EBITDA Margin with 8% from Paradies,

linear syngeries of 16M in 2019, and constant
underlying segment margin at 5.1%.
Increase in the EBITDA Margin with 12% from

Paradies, linear syngeries of 16M in 2019, and
constant underlying TR margin
Active
CAGR 15-19
Sales
-1.40%
NA
Underlying organic growth at -4.5% on magazine

segment and 1% growth in the audiovisual.
EBITDA CAGR 15-19

EBITDA Margin
NA
-1.40%
NA
Constant EBITDA Margin at 7.5%
NA
Sport
CAGR 15-19
1.10%
NA
High cyclicality in sales growth. Strong years in 2016

and 2017 but low activity thereafter.
EBITDA CAGR 15-19
1.10%
EBITDA Margin
NA
Regression model for the estimates of EBITDA Margin

based on historical operating leverage.
Sales
NA
NA
Structure
Impairment Loss
45M from LeGuide, NewsWeb and BilletReduc
None
None
Restructuring
70M Restructuring Costs Pa
35M Restructuring costs (constant) pa.
None
Gains/Losses
None
25M Gains from Deutsche Bank Sales in 2016
None
37
January 11th 2016
Go back
Appendix 36. Discount to peers
Premium/discount to peers : at current stock price the

discount is on the bottom of its cycle
Industry vs MMB P/E NTM, : Historically, the group

always traded at c20% discount to peers
30%
25
BENCHMARK P/E NTM
20
20%
MMB P/E NTM
Premium or Discount
10%
0%
15
-10%
Median 20%
-20%
10
-30%
-40%
12/10 10/11 08/12 06/13 04/14 02/15 12/15
5
12/10 09/11 06/12 03/13 12/13 09/14 06/15
Sources: Factset & team estimates
We compared the Lagardere P/E NTM to the benchmark P/E NTM which we obtained by classifying each peers
into their sub industries, and weighting each sub industries median P/E NTM with the annual division weight for
Lagardere. We could therefore compute a premium or discount based on how expensive Lagardere should trade
with its exposures on industries and how much it currently trade in the market.
We underline two important point 1/Lagardere experienced above median discount, between October 2012 and
August 2014. The team researchs found a downward revision of NTM EPS consensus with a slight increase in price
and 2/Currently the stock is trading near its 5 years median up of its cycle, we believe the stock to trade at c25%
discount to peers at end 2016.
EPS NTM Consensus
We believe conglomerate discount is justified

30
Autogrill
2.00
25
Next Radio TV
1.80
Scholastic
1.60
1.40
1.20
P/E 2016E
20
Elior
15
Lagardre
1.00
0.80
0
0.0%
GL Events
HighLight
Fair value valuation

R = 0.7018
5.0%
10.0%
15.0%
20.0%
CAGR EPS 15-17

NRJ
TF1
WHSmith
RTL
10
NewsCorp

38
25.0%
30.0%
35.0%
January 11th 2016
Go back
Appendix 37. Extended Dupont Analysis

Tax Burden Ex Associates
(x) Interest burden
(x) Non Recurring Impact
(x) EBIT Margin
(=) Net profit margin ex
associates
Total asset turnover (exassociates)
Effect of associates on assets
turnover
(x) Total asset Turnover
(=) ROA
(x) Leverage
(=) ROE
2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
0.74
0.74
0.74
0.74
0.74
0.74
0.74
0.74
0.74
0.74
0.74
0.74
0.70
0.76
0.71
1.16
0.33
0.94
0.64
0.85
0.86
0.86
0.86
0.87
1.00
0.86
0.65
-1.88
0.40
5.03
0.68
0.96
0.91
0.91
0.91
0.91
6.7%
4.8%
5.1%
4.0%
3.9%
4.0%
3.9%
4.4%
4.8%
4.7%
4.7%
4.7%
3.5%
2.3%
1.7%
-6.4%
0.4%
14.0%
1.3%
2.7%
2.8%
2.7%
2.7%
2.7%
1.13
1.07
1.06
0.88
1.02
1.07
0.97
1.03
0.98
0.99
0.98
0.97
0.30
0.27
0.25
0.23
0.19
0.03
0.03
0.03
0.03
0.03
0.03
0.03
1.43
1.34
1.31
1.11
1.21
1.10
1.00
1.06
1.01
1.01
1.00
0.99
3.07% 2.15% 1.66% -7.28% 0.38% 13.07% 1.29% 2.59% 2.85% 2.74% 2.81% 2.83%
2.24
6.9%
2.24
4.8%
2.26
2.41
3.7% -17.5%
2.70
2.85
1.0% 37.3%
3.68
3.97
3.91
3.86
3.80
3.73
4.8% 10.3% 11.2% 10.6% 10.7% 10.6%
(VS) ROE include associates

12.52% 5.56% 5.42% 13.75% 4.64% 37.51% 5.21% 10.70% 11.60% 10.99% 11.07% 10.98%
Magnitude Effect from associates 82.2% 15.2% 44.6% -21.5% 348.9% 0.7% 9.5% 4.4% 3.9% 4.1% 3.9% 3.9%
Highlight: We used an extended DuPont Analysis to underline the magnitude effect Associates and JVS have on
ROE. On average between 2008 and 2014 the magnitude impact on ROE stand at 68.5%. Due to this important
level, we think a more detailed analysis provide useful information on the underlying core business profitability
of Lagardere.
Appendix 38. Jvs and Non Recurring Impact on Net Margin
Revenue
EBITDA
EBIT
NOPAT
Normalized net earnings
2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
8,621 8,289 8,339 8,048 7,722 7,564 7,493 7,701 8,179 8,199 8,340 8,487
9.3%
8.1%
8.0%
7.8%
7.2%
6.8%
6.9%
7.0%
7.1%
7.1%
7.1%
7.1%
6.7%
4.8%
5.1%
4.0%
3.9%
4.0%
3.9%
4.4%
4.8%
4.7%
4.7%
4.7%
429
293
318
237
226
224
218
251
292
284
291
295
298
232
257
166
165
157
163
215
256
248
255
259
Share of Results Associates

JV's
Profit Ex Associates
34
246
578
27
29
288
31
65
353
18
111
295
17
105
287
12
7
176
8
9
180
8
9
232
8
9
273
8
9
265
8
9
272
8
9
276
After Tax non Recurring Item

Normalized net earnings
1
579
-41
247
-111
242
-683
-387
-134
152
905
1081
-69
111
-9
223
-26
247
-26
239
-26
246
-26
250
Net Earnings Margin Core

Net Earnings Margin With JV's
Magnitude from JV's To Core
Net Earnings Margin
Magnitude from Non Recurring
3.46% 2.80% 3.08% 2.07% 2.13% 2.07% 2.18% 2.79% 3.13% 3.02% 3.06% 3.05%
6.70% 3.47% 4.23% 3.67% 3.71% 2.32% 2.41% 3.01% 3.33% 3.23% 3.26% 3.25%
94.0% 24.2% 37.3% 77.5% 74.1% 12.1% 10.4% 7.9% 6.6% 6.9% 6.7% 6.6%
6.7%
3.0%
2.9%
-4.8% 2.0% 14.3% 1.5%

0.3% -14.2% -31.6% 231.1% -46.9% 514.9% -38.3%
2.9%
3.0%
2.9%
2.9%
2.9%
-3.8%
-9.5%
-9.8%
-9.6%
-9.4%
Highlight and Methodology: We used the normalized tax rate of 25.5% (2008-2014 median tax rate) to compute
NOPAT and to adjust each line below on the income statement from respective tax impact. We found net earnings
margin core and net earnings margin with JVs. This analysis demonstrate (1) the important contribution from
JVS ( which the group announced to progressively disinvest ) and (2) the value destruction the management
decisions occurred from core to net earnings margin.
*Net earnings Core : NOPAT After tax financial expenses
*Net earnings with JvS : Net earnings core + Jvs and Associates income
*Net earning margin : Net earning Core + Jvs and Associates + After Tax non Recurring Items
39
January 11th 2016
Go back
Appendix 39. Degree of Operating Leverage
Lagardere Travel Retail
30%
8%
20%
6%
4%
10%
OPEX Growth
OPEX Growth
Lagardere Sport Entertainment
0%
-30%
-20%
-10%
0%
10%
20%
-10%
-20%
2%
-10.0%
-5.0%
0%
0.0%
-2%
5.0%
-4%
y = 0.9689x + 6E-05
R = 0.9908
-6%
y = 1.0796x + 0.0284
R = 0.9022
-8%
Sales Growth
-30%
Sales Growth
Lagardere Publishing
Lagardere Active
10%
8%
5%
6%
-40.0%
OPEX Growth
OPEX Growth
4%
2%
-10.0%
-5.0%
0%
0.0%
-2%
-4%
10.0%
5.0%
10.0%
-30.0%
-20.0%
-10.0%
0%
0.0%
-5%
-10%
-15%
y = 0.8871x - 0.0085
R = 0.9239
-20%
-25%
y = 0.7881x + 0.0015
R = 0.9572
-30%
-6%
Sales Growth
Sales Growth
-35%
Appendix 40. Non Recurring Items, 2008-14 Cumulative Analysis per Share
18.31
40
10.0%
January 11th 2016
Go back
Appendix 41. Profitability and Credit Analysis Snapshot
EBITDA Margin
EBIT Margin
ROCE
Debt/EBITDA
Net Debt/EBITDA
2009
2010
2011
2012
2013
2014
2015E
2016E
2017E
2018E
2019E
8.1%
6.7%
5.9%
4.00
2.84
8.0%
4.8%
6.8%
3.77
2.81
7.8%
5.1%
6.3%
3.17
2.16
7.2%
4.0%
7.5%
4.22
3.14
6.8%
3.9%
6.7%
2.57
-0.63
6.9%
4.0%
7.1%
2.79
1.92
7.0%
3.9%
7.1%
3.72
2.45
7.1%
4.4%
7.5%
3.48
2.45
7.1%
4.8%
7.1%
3.49
2.45
7.1%
4.7%
7.2%
3.42
2.39
7.1%
4.7%
7.2%
3.36
2.26
Exhibit : 2014 released figures for major indicators vs peers and historical Lagardere performance
Lagardre historical high*
14%
Lagardre 2014 data
12%
Lagardre historical low*
10%
Peers average**
8%
14x
12x
10x
8x
6%
6x
4%
4x
2%
2x
0%
0x
EBITDA Margin
EBIT Margin
ROCE
Net Debt/EBITDA
Debt/EBITDA
Highlights : We analyzed the historical performance of the group relative to its 2014 released number to conclude that most of them are
historically low. Relative to peers, we underline the same conclusion that the group underperform industries on EBITDA and EBIT margin and
ROCE.
*Based on 2008-2014 period analysis
**Based on SOTP company list, 2008-2014 period analysis
Appendix 42. Synthetic Credit Rating

Grade
AAA
EBIT Interest coverage
23.8
EBITDA interest coverage
25.5
Total debt/Ebitda
0.4
FFO/total debt
203.3
FOCF/total debt
127.6
ROIC
27.6
Total debt/Capital
12.4
Source : S&P Corporate Rating Criteria 2006
AA
19.5
24.6
0.9
79.9
44.5
27
28.3
EBIT
EBITDA/In
Total
Interest
CFO/DEBT
terest net Debt/EBITDA
Coverage
Pearson
BBB
A
BB
BB
JohnWiley
A
AAA
BBB
BBB
NewsCorporation
#N/A Not rated
AAA
Not rated
Arnoldo Mondadori
CCC
CCC
CCC
CCC
Scholastic
A
AAA
AAA
AAA
Next Radio TV
AAA
AAA
A
AA
TF1
AAA
AAA
AAA
AAA
RTL Group
AAA
AAA
AA
AA
NRJ Group
AAA
AAA
AAA
AAA
Autogrill
CCC
BB
B
BB
Dufry
B
BB
CCC
CCC
WhSmith
AAA
AAA
AAA
AAA
Lagardre
Not rated
CCC
Not rated
B
A
8
10.2
1.6
48
25
17.5
37.5
BBB
4.7
6.5
2.2
35.9
17.3
13.4
42.5
BB
2.5
3.5
3.5
22.4
8.3
11.3
53.7
B
1.2
1.9
5.3
11.5
2.8
8.7
75.9
ROCE
Total
debt/capital
Overall
Grade
Rating
Equivalent
Not rated
B
Not rated
Not rated
Not rated
B
CCC
A
Not rated
Not rated
Not rated
AAA
Not rated
AA
BBB
AAA
B
AAA
AA
AAA
AA
AAA
B
B
AAA
BB
21
26
14
6
33
33
36
37
35
11
9
42
6
BB
BBB
B
CCC
A
A
AA
AA
A
CCC
CCC
AAA
CCC
Source : Factset andTeam estimates, based on 2014 data only
41
CCC
0.4
0.9
7.9
5
-2.1
3.2
113.5
Equivalence de Note
AAA
AA
A
BBB
BB
B
CCC
Not rated
7
6
5
4
3
2
1
0
January 11th 2016
Go back
Appendix 43. Capex Analysis
Lagardere Publishing
Lagardere Travel Retail
4%
16%
Wiley
News Corp
0%
2%
Lagardre
Publishing
-2%
4%
6%
8%
Dufry
12%
Pearson
0%
CAGR Sales Growth
CAGR Sales Growth
2%
10%
Scholastic
-4%
-6%
8%
Elior
Lagardre
TR
4%
0%
2%
-4%
Mondadori
-8%
5%
Capex/Sales
Lagardere Active
Lagardere Sport Entertainment

4%
10%
RTL Group
8%
GL Events
CAGR Sales Growth
CAGR Sales Growth
4%
Autogrill
-8%
Capex/Sales
6%
4%
HighLight
Communication
2%
0%
-2%
3%
WH Smith
0%
5%
-4%
10%
15%
20%
Lagardre Sport
&Enternainment
25%
30%
NRJ Group
0%
0%
-4%
2%
TF1
4%
6%
8%
Mondadori
-8%
-12%
Lagardre
Active
-16%
Capex/Sales
Capex/Sales
Highlight : We used our SOTP peer list to build a Capex/Sales relative analysis. We conclude that Lagardre, on
on most of segment, devote less % of sales than its peers which we believe can affect future growth sales
potential. Furthermore, our efficient indicator (Sales Cagr/(Capex/Sales) ) indicates often a lower impact on
sales from the capex efforts.
Capex/Sales
Wiley
Pearson
News Corp.
Scholastic
BU Publishing
Mondadori
7.6%
2.9%
4.3%
7.6%
2.0%
0.7%
Sales 08-14
CAGR
Publishing
2.1%
0.2%
-0.2%
-2.0%
-1.2%
-7.0%
Efficient
Indicator
Rank
0.27
0.07
-0.05
-0.27
-0.63
-10.52
#1
#2
#3
#4
#5
#6
0.27
0.05
-1.26
-8.38
-10.52
#1
#2
#3
#4
#5
Capex
/Sales
Dufry
Elior
BU TR
WHSmith
Autogrill
Active
NRJ Group
RTL Group
TF1
BU Active
Mondadori
6.9%
3.4%
2.8%
1.5%
0.7%
1.9%
0.2%
-3.5%
-12.3%
-7.0%
Sales 0814 CAGR
Travel&Retail
4.0%
12.1%
3.5%
5.3%
2.5%
1.4%
2.9%
-2.1%
3.4%
-4.5%
Efficient
Indicator
Rank
2.99
1.51
0.59
-0.73
-1.34
#1
#2
#3
#4
#5
Sport&Entertainment
42
GL Events
HightLight
BU Sport
8.0%
25.4%
20.4%
7.6%
0.6%
-2.0%
0.95
0.02
-0.10
#1
#2
#3
January 11th 2016
Go back
Appendix 44. Capex/Sales History with Peers
Pearson
Wiley
News Corporation
Mondadori
Scholastic
Peers Average Capex/Sales
Lagardere Publishing Capex/Sales
Difference with peers average
TF1
RTL Group
Mondadori
NRJ Group
Lagardere Active Capex/Sales
Sales 08-14
CAGR
2008
2009
2010
2011
2012
2013
2014
AVG
2.5
11.0
3.7
1.0
5.6
3.7
2.1
-44%
2.3
12.0
3.7
0.0
5.4
3.7
1.2
-67%
2.3
6.1
6.0
1.0
6.9
6.0
0.9
-85%
3.0
6.7
4.3
1.1
5.2
4.3
1.4
-67%
3.0
6.2
3.7
0.5
7.2
3.7
2.1
-45%
3.6
5.5
4.4
0.8
19.0
4.4
2.0
-55%
3.7
6.0
4.4
0.3
3.6
3.7
4.0
8%
2.9
7.6
4.3
0.7
7.6
4.2
2.0
-51%
0.2%
2.1%
-0.2%
-7.0%
-2.0%
3.4
4.2
1.9
3.9
2.1
2.5
1.8
2.8
-3.5%
3.1
1.0
6.0
3.3
2.1
-35%
4.1
0.0
8.0
4.1
2.2
-46%
4.1
1.0
8.7
3.0
1.0
-67%
3.5
1.1
6.9
3.7
1.0
-72%
3.2
0.5
5.8
2.7
1.0
-63%
2.8
0.8
6.3
2.6
1.6
-39%
3.2
0.3
0.2%
-7.0%
1.9%
1.8
1.4
-23%
3.4
0.7
6.9
3.0
1.5
-49%
3.4
3.6
3.5
3.8
3.5
2.1
-39%
0.0
3.6
3.2
3.7
3.4
2.6
-23%
4.1
6.2
2.8
3.6
3.9
3.3
-14%
4.0
4.8
3.3
3.1
3.7
2.9
-20%
3.4
4.0
2.9
3.5
3.5
2.5
-29%
-4.5%
12.1%
-2.1%
5.3%
4.8
21.0
12.9
24.9
93%
11.5
30.8
21.1
23.0
9%
9.4
36.0
22.7
26.7
17%
8.8
17.8
13.3
10.2
-23%
8.0
25.4
16.7
20.4
24%
7.6%
0.6%
Autogrill
Dufry
WHSmith
Elior
Lagardere Travel Retail Capex/Sales
5.7
3.5
2.1
2.7
2.9
2.2
3.5
2.3
-34%
2.7
1.9
-28%
3.7
3.8
3.2
3.4
3.5
1.9
-46%
GL Events
HightLight Com
Lagardere Sport Capex/Sales
9.2
23.2
16.2
11.3
-30%
6.4
23.9
15.2
19.9
31%
6.1
25.3
15.7
27.0
72%
Sources : Factset andTeam estimates
43
-1.2%
-12.3%
1.4%
-2.0%
January 11th 2016
Go back
Appendix 45. Debt Breakdown and Interest Rate Forecast

Breakdown of debt
Amount (M)
Maturity
Coupon Type Interest Rate
YTM
Interest (M)
% of Debt
Bond Unsecured 31/10/2017
492
Oct-17
Fixed
4.1%
1.5%
20.3
27.5%
Bond Unsecured 9/19/2019
497
Sep-19
Fixed
2.0%
2.0%
9.9
27.7%
Bank loans
103
8%
8.2
5.7%
Other Debt
171
8%
13.7
9.5%
Commercial Paper
527
0.3%
1.6
29.4%
Financial Lease
Total Debt
Jun-16
0.1%
1,792
Interest Rate
53.7
3.00%
Appendix 46. Financial Interest Forecast based on Historical Data

2008
Interest Income on Loans
Marketable Securities Income
Gains on derivative
Other financial Income
Total Financial income
Financial Assets in the Balance Sheet
Net Interest Received
2009
2010
2011
2012
2013
2014 S1 2014 S1 2015
25
12
14
13
39
14
21
21
11
12
478
128
181
152
8%
11%
12%
14%
91
51
56
55
67
12%
18%
21%
11%
6%
Avg
12%
Sources : Company Data, in Million
Highlights : Our analysis focus on the net interest received from the 2008-2014 period and the debt breakdown in 2014. We applied in
our forecast 12% as financial interest received ( based on financial assets in balance sheet ) and 3% interest expenses on gross debt
and other financial liabilities.
44
January 11th 2016
Go back
Appendix 47. Risk Matrix
High
Effects of Digital
and Mobile
Governance Risk
Technologies
Major Contract
Median
I
m
p
a
c
t
Paper Prices
Special
Regulations
GDP
Terrorism
Exchange Rate
Risk
Acquisition Risk
Credit Risks
Geopolitical
Events
Low
Probability
Low
Market Risk
Median
Economic Risk
Strategic Risk
Operational Risk
Source: Teams Estimate
45
High
Governance Risk
Regulatory Risk
January 11th 2016
Go back
Supervisory Board
Laure Rivire-Doumenc
Secretary
Xavier de Sarrau
Chairman
Audit Committee
Appointements,
Remuneration and
Governance
Committee
Other members
Xavier de Sarrau
Chairman of
Committee
Franois David
Chairman of
Committee
Martine Chne
Nathalie Andrieux
Georges Chodron de
Courcel
Yves Guillemot
Franois David
Pierre Lescure
Jean-Claude
Magendie
Aline SyliaWalbaum
Soumia Belaidi
Malinbaum
Javier Monzo n
Patrick Valroff
Hlne Molinari
Franois Roussely
Susan M.Tolson
46
January 11th 2016
Go back
director
position
Held Since
Xavier de Sarrau
Chairman of the Board

Chairman of the Audit Committee
10 Mars 2010
Member of the Supervisory Board, JC Decaux

Chairman of the Audit Committee and Ethics Committee, JC decaux
Director, Oredon Associates(UK)
Nathalie Andrieux
Member of the Board

Member of the Audit Committee
3 May 2012
Member of the French Digital Council

Chair, Mediapost Holding
Director, Docapost
Member of the Supervisory Board and Member of The Strategic
Committee, la Banque Postale
Martine Che ne
Member of the Board
29 April 2008
Worked in Lagardre more than 25 years(1984 2009)
Georges Chodron de Courcel
Member of the BoardMember of the

Appointments, Remuneration and
Governance Committee
19 May 1998
Director, Bouygues SA
Director, Nexans SA
Director, FFP SA
Director, Scor Holding Switzerland AG(Switzerland)
Franc ois David

Audit Committee Chairman of the
29 April 2008
Honorary Chairman, Coface group

Member of the Board, Order of the Legion of Honour
Member of the Supervisory Board, Galate Films
Yves Guillemot
Member of the Board
6 May 2014
President and CEO, Ubisoft Entertainment SA

Deputy CEO and Director, Gameloft SE, Guillemot Coporation SA
Director,Rmy Cointreau
Director, Advanced Mobile Applications Ltd(UK)
Pierre Lescure

6 May 2014
Chairman, AnnaRose productions SAS

Director, havas Advertising
Member of the Executive Commission, Prisa TV and Digital+(Spain)
Jean-Claude Magendie
Member of the Board
27 April 2010
President, European College for Conflict resolution

First President of the Paris Court of Appeal
Chairman, Association mdiation entreprises
Soumia Belaidi Malinbaum

3 May 2013
Deputy CEO of keyrus

Member of the Educational Board, HEC Paris
Member of the Board of Director, Universit paris Dauphine
Director and chair of the Audit Committee, FMM
Member of the Board of Directors, Institut du monde arabe (IMA)
He le ne Molinari

3 May 2012
Legal manager of AHM conseil

Vice president, Be-Bound
COO and member of the Executive Council of MEDEF
Javier Monzo n
Member of the Board
29 April 2008
Chairman, Telefnica(Spain)
Member of the Board of Directors, ACS actividades de Construccin
y Servicio SA(Spain)
Francois Roussely
Member of the Board
11 May 2004
Honorary senior advisor, French National Audit Office(Cour des

Comptes)
Deputy Chairman, Crdit Suisse Europe
Deputy Chairman, Fondation du Collge de France
Honorary chairman, EDF
Aline Sylla-Walbaum

Audit Committee
3 May 2013
Vice-Chair of the Board of Directors, Orchestre de Paris

Member of the Board Directors, Muse dOrsay
Member of the Board Directors, Louvre-Lens museum
International Managing Director, Christie
Susan M. Tolson
Member of the Board
10 May 2011
Director, WorldLine E-Payment Services Member of the Audit,

Governance and Remunration Committees
Honorary Chair, American Friends of The muse dOrsay
Director, the American Cinmathque
director, Novacs
Member of the Executive Committee, Crdit Agricole SA
Chairman and Chief Executive officer, Sofinco
Chairman, Crdit lift SAS
Patrick Valroff

Audit Committee
27 April 2010
47
Disclosures:
Ownership and material conflicts of interest:
The author(s), or a member of their household, of this report does not hold a financial interest in the securities of this company.
The author(s), or a member of their household, of this report does not know of the existence of any conflicts of interest that might bias the
content or publication of this report.
Receipt of compensation:
Compensation of the author(s) of this report is not based on investment banking revenue.
Position as a officer or director:
The author(s), or a member of their household, does not serve as an officer, director or advisory board member of the subject company.
Market making:
The author(s) does not act as a market maker in the subject companys securities.
Disclaimer:
The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be
reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. The information
is not intended to be used as the basis of any investment decisions by any person or entity. This information does not constitute investment
advice, nor is it an offer or a solicitation of an offer to buy or sell any security. This report should not be considered to be a recommendation by
any individual affiliated with Lagardre, CFA Institute or the CFA Institute Research Challenge with regard to this companys stock.
48

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Last Price : 25.36 (Date: 8/1/2016)

Lagardre: Muddled Past, Gloomy Future

Average 3M Daily Volume

Shares Outstanding (M)

Sources: Factset, Damodaran & team

Strong pressure on cash generation: We believe the risk/reward profile of the

Follower attitude with a short-sighted view corporate strategy: (1) management

Stoxx 600 Media

Team Sentiment Summary

CFA Institute Research Challenge

Figure 1: Activities snapshot with % of

Focus on the Media industry.

Source: Company data

January 11th 2016

With strong interests in Travel Retail and Sports.

Source: Company data

Figure 3: Lagardre in 6 dates

2013: Lagardre sells

Lagardres history in 6 dates

1826: Louis Hachette lays

A diversified geographical exposure.

Source: Company data

Source: Company data

2003: Arnaud Lagardre takes the

An external growth strategy.

Figure 4: Geographical footprint

1987: the company is

A reduced dependency on Print businesses

CFA Institute Research Challenge

January 11th 2016

Industry Overview and Competitive Positioning

Figure 7: Global media industry

Different sources of revenue for media companies

Additional products and

Radio & TV content

10% 20% 30% 40% 50%

The sixth continent

Key Industry Trends

A new media experience

CFA Institute Research Challenge

Figure 10: User penetration in the

Political and cultural concerns for ebooks

A system of tender offer for retail operations

TR not as strong as in the past

January 11th 2016

Source: Syndicat National de lEdition

Main competitors by business units

Source: Team research

CFA Institute Research Challenge

Figure 11: Porters 5 forces

January 11th 2016

Source: Team estimates

Lagardres competitive advantage relies on:

Figure 12: Monte Carlo Analysis

Well-established publishing business

Source: Team estimates

Dividend Yield (%)

Figure 13: Dividend and FCF yield in

Our SELL recommendation relies on

A lack of advantages relative to peers

FCF Yield (%)

Not attractive risk/reward profile

CFA Institute Research Challenge