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Local Challenge CFA France
Team C
Recommendation : SELL
LAGARDERE SCA
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%
TARGET PRICE
21.00
SELL
-17% potential downside
Market Profile
52-week Price Range ()
21.02-30.23
294,144
131.1
Market Capitalization
(M)
3,325
Insider Ownership
11.2%
Free Float
74.2%
Beta
1.63
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:
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
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
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%
ACTIVE
5%
SPORTS &
ENTERTAINMENT
60%
Travel Retail
50%
40%
Publishing
30%
20%
Sports and
Entertainment
10%
Active
0%
0%
10%
20%
30%
40%
50%
EBITDA contribution
1945:
Creation
of
Matra,
researching and developing planes,
transport systems and satellites
1992:
Merger
of
Hachette and Matra,
held by Lagardre group
61%
49%
2003
2007
72%
2010
2013
5%
8%
Qatar Invest.
Authority
13%
74%
Arnaud
Lagardre
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
Source: Company data
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
Source: Mdiamtrie
Figure 9: Media consumption: hours
spent per day, world average
3.5
3
2.5
2
2012
1.5
2015
1
0.5
0
TV
Online
Radio
Source: Mdiamtrie
3
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).
Top Countries
United States
36.1%
United Kingdom
16.5%
Canada
16.3%
Spain
12.8%
Germany
11.1%
France
8.9%
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.
Book publishing
Travel Retail
Radio
TV
Magazine
Audiovisual production
Digital
Sport rights
Threat of New
Entrants (1.5)
Rivalry (4)
Bargaining
Power of
Customers (4)
Bargaining
Power of
Suppliers (2.5)
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.
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.
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
6.5
6.0
5.5
5.0
4.5
4.0
-50
50
100
Lagardre
-39
Publishing
Media
Travel Retail
Target Price
Weight
51%
18%
31%
P/E
12.8x
14.3x
16.4x
23.8
7.8
24.7
6.3
9.8
Valuation
Figure 15: DCF assumptions
Risk-free Rate
0.91%
Beta (unlevered)
1.13
6.4%
Cost of Equity
11.2%
Tax rate
26%
Cost of debt
3%
2.2%
Weight of Equity
63%
Weight of Debt
37%
WACC
7.9%
2.0%
I.
DCF Valuation
PV of Terminal
Value
PV of OFCF
81%
Source: Team estimates
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.
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
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
Sales (LHS)
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.
2012
2013
2014
120
8%
100
7%
80
6%
60
5%
4%
40
ROCE (lhs)
Indexed NOPAT (rhs)
Indexed Capital Employed (rhs)
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.
Publishing
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
2.6X
2.5X
2.4X
2.3X
2.2X
2.1X
2.0X
1.9X
1.8X
1.7X
Lagardre
Industry Avg
Other
23%
GBP
6%
CHF
5%
Investment Risks
EUR
58%
USD
8%
1.1
0.85
0.6
CHF/EUR
Source: Factset
GBP/EUR
USD/EUR
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Bresil
China
2012
US
2013
France
2014
2012
2013
2014
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
% 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
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
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
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%
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
2008
2009
2010
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
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
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
Derivative financial instruments
Accrued taxes and employee benefit expense
Sundry payables
Current provisions for contingencies and losses
Current Liabilities
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
2008
2009
2010
2011
2012
2013
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
4,969
1,989
4,682
1,872
3,740
1,157
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
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
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
-
(=) Account receivables + Inventory + Other Current Assets (excluding loans and derivatives instruments)
(=) 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
2008
2009
2010
2011
2012
2013
2014
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
Derivative financial instruments
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%
15
2009
2010
2011
2012
2013
2014
2015E
2016E
2017E
2018E
2019E
825
368
343
(489)
228
1,527
210
335
367
356
366
371
(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
30
(136)
31
26
17
(65)
35
198
48
(61)
17
(7)
(9)
(9)
(9)
(9)
(9)
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
(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)
(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)
472
576
7%
576
518
6%
518
510
6%
510
593
7%
593
598
8%
598
1,676
22%
1,676
460
6%
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
(221)
(276)
(240)
(308)
(256)
(214)
(223)
(204)
(188)
(197)
(200)
(206)
(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%
285
457
60%
197
60%
16
259
32%
143
-45%
372
160%
159
-57%
253
59%
257
2%
291
13%
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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
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Lagardre Publishing
Acquisitions
2
4
1
0
1
0
0
4
4
16
22%
2015
2014
2013
2012
2011
2010
2009
2008
2007
TOTAL
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
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
Feb 08
Mar 11
2,283 M
Oct 13
1,020 M
651 M
18
485 M
Aug 15
Go back
-1.0%
2014
EURO AREA GDP
2015E
USA GDP
2016E
ASIA GDP
2017E
Emirates GDP
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
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Hachette
PRH
LAGARDERE
BERTELSMANN
Harper Collins
NEWS
CORPORATION
Simon&Schuster
CBS CORPORATION
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%
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%
Source : Company
20
8%
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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
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
Sources: World Bank for GDP data and forecast, Airport Council International for airport data
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
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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
Source: Company data
22
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Position
Held Since
Affiliates/Other positions
Arnaud Lagardre
Pierre Leroy
23
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Position
Held Since
Affiliates/Other positions
Dominique dHinnin
Thierry Funck-Brentano
Corporate Officers
director
position
Held Since
Joined Lagardre
Since
Arnaud Nourry
Chairman, CEO
Hachette Livre
23 May 2003
1992
Dag Rasmussen
Chairman,CEO
Lagardre Travel Retail
2011
1988
Denis Olivennes
Chairman,CEO
Lagardre Active
7 november 2011
2010
Arnaud Lagardre
CEO
Lagardre Sports and
Entertainment
Grar Adsuar
Deputy CFO
Lagardre SCA
1987
25 January 2011
1989
24
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A. Share Capital
French
Institutional
Investors
Non-French
investors
12.34%
67.75%
Private
investors
Lagardre
Capital&Management
8.28%
6.79%
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%
Lagardre SCA
(MMB)
C. Principal shareholders
Shareholders
Share Capital
Arnaud Lagardre
8.18%
12.73%
12.827%
9.98%
25
Treasury
Shares
0%
Go back
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
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Weaknesses
Strengths
SWOT
Threats
Opportunities
- Growth opportunities in airport retail division thanks to
growing air traffic and passenger spends
27
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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
Go back
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
37%
Net Debt/(Net Debt+Equity)
63%
Equity/(Net Debt+Equity)
Risk-free rate
0.91%
Beta
1.63
Market premium
Tax rate
25.7%
Cost of debt
3.00%
+ 1
+
+
29
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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%
(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
(204)
(188)
(197)
(200)
(206)
(233)
(228)
(228)
(229)
(206)
(150)
94
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
4,468
1,404
254
2,810
3,129
Shares outstanding
131
Target Price
23.9
WACC
372
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
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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
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
18.10
31
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SALES
MMB Consensus
Team Estimates
Position
2015E
7,146
7,378
3.3%
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%
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
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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%
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
Source: Team estimates
EV Group
Net Debt 2016e
Pension and Minorities 2016e
Equity Value
Share Out
Target Price
4778
1404
254
3120
131
23.80
33
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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%
Target Price
16.4x
32%
14.2x
1.74
24.7
34
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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
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%
Group
Publishing
Travel Retail
Media
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
Go back
28.3
5.3
9.6
13.4
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
Go back
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
Publishing
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%
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%
3.80%
8.20%
12.40%
EBITDA Margin
Active
CAGR 15-19
Sales
-1.40%
NA
NA
-1.40%
NA
NA
Sport
CAGR 15-19
1.10%
NA
1.10%
EBITDA Margin
NA
Sales
NA
NA
Structure
Impairment Loss
None
None
Restructuring
None
Gains/Losses
None
None
37
Go back
25
BENCHMARK P/E NTM
20
20%
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.
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
5.0%
10.0%
15.0%
20.0%
NRJ
TF1
WHSmith
RTL
10
NewsCorp
25.0%
30.0%
35.0%
Go back
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%
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
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
1
579
-41
247
-111
242
-683
-387
-134
152
905
1081
-69
111
-9
223
-26
247
-26
239
-26
246
-26
250
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%
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
Go back
30%
8%
20%
6%
4%
10%
OPEX Growth
OPEX Growth
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%
Go back
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%
12%
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
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
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
Go back
Lagardere Publishing
4%
16%
Wiley
News Corp
0%
2%
Lagardre
Publishing
-2%
4%
6%
8%
Dufry
12%
Pearson
0%
2%
10%
Scholastic
-4%
-6%
8%
Elior
Lagardre
TR
4%
0%
2%
-4%
Mondadori
-8%
5%
Capex/Sales
Lagardere Active
10%
RTL Group
8%
GL Events
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%
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
Go back
Pearson
Wiley
News Corporation
Mondadori
Scholastic
Peers Average Capex/Sales
Lagardere Publishing Capex/Sales
Difference with peers average
TF1
RTL Group
Mondadori
NRJ Group
Peers Average Capex/Sales
Lagardere Active Capex/Sales
Difference with peers average
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
Peers Average Capex/Sales
Lagardere Travel Retail Capex/Sales
Difference with peers average
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
Peers Average Capex/Sales
Lagardere Sport Capex/Sales
Difference with peers average
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%
43
-1.2%
-12.3%
1.4%
-2.0%
Go back
Amount (M)
Maturity
YTM
Interest (M)
% of Debt
492
Oct-17
Fixed
4.1%
1.5%
20.3
27.5%
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%
2009
2010
2011
2012
2013
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%
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
Go back
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
45
High
Governance Risk
Regulatory Risk
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
Go back
director
position
Held Since
Affiliates/Other positions
Xavier de Sarrau
10 Mars 2010
Nathalie Andrieux
3 May 2012
Martine Che ne
29 April 2008
19 May 1998
Director, Bouygues SA
Director, Nexans SA
Director, FFP SA
Director, Scor Holding Switzerland AG(Switzerland)
29 April 2008
Yves Guillemot
6 May 2014
Pierre Lescure
6 May 2014
Jean-Claude Magendie
27 April 2010
3 May 2013
He le ne Molinari
3 May 2012
Javier Monzo n
29 April 2008
Chairman, Telefnica(Spain)
Member of the Board of Directors, ACS actividades de Construccin
y Servicio SA(Spain)
Francois Roussely
11 May 2004
Aline Sylla-Walbaum
3 May 2013
Susan M. Tolson
10 May 2011
director, Novacs
Member of the Executive Committee, Crdit Agricole SA
Chairman and Chief Executive officer, Sofinco
Chairman, Crdit lift SAS
Patrick Valroff
27 April 2010
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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.
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