Third-Quarter 2023 Revenue

Paris, 13 October 2023, 5:35 p.m.

Arnaud Lagardère, Chairman and Chief Executive Officer of Lagardère SA, commented: “The

Lagardère group is continuing to actively develop its two core businesses, Lagardère Publishing and Lagardère Travel Retail. We recorded revenue growth of 9.6% in third-quarter 2023, thanks to very solid performances from our two divisions. After an exceptional summer, particularly in the United States and Europe, Lagardère Travel Retail’s revenue reached a record high. Lagardère Publishing also maintained a high level of revenue despite a market that was overall less dynamic overall than last year. In the first nine months of 2023, consolidated revenue was up by more than €900 million year on year.”  

I.             REVENUE

Revenue for the Lagardère group totalled €5,914 million for the first nine months of 2023, up 18.1% as reported and up 15.3% like-for-like. The difference between reported and like-for-like data is attributable to a €170 million positive scope effect, mainly due to the acquisitions of Marché International AG (Germany) and 

Costa Coffee (Poland) by Lagardère Travel Retail, and of Welbeck Publishing Group (United Kingdom) by Lagardère Publishing, as well as to a €48 million negative currency effect, mainly related to the depreciation of the US dollar

(€22 million negative impact) and the pound sterling (€17 million negative impact).  

Third-quarter 2023 revenue came in at €2,213 million, up 11.7% as reported and up 9.6% like for like. The difference between reported and like-for-like data reflects an €83 million positive scope effect and a €44 million negative currency effect.  

Change

                                                                                Revenue (€m)

vs. 2022 (%)

*                Lagardère News (Paris Match, Le Journal du Dimanche, JDD Magazine, Europe 1, Europe 2, RFM, and the Elle brand licence), Lagardère  Live Entertainment, Lagardère Paris Racing and the Group Corporate function.

Change

                                                                                 Revenue (€m)

 vs. 2022 (%)

*                Lagardère News (Paris Match, Le Journal du Dimanche, JDD Magazine, Europe 1, Europe 2, RFM, and the Elle brand licence), Lagardère  Live Entertainment, Lagardère Paris Racing and the Group Corporate function.

Unless otherwise specified, the changes presented below for third-quarter 2023 are calculated on a like-for-like basis.

⚫ Lagardère Publishing 

Revenue for Lagardère Publishing totalled €2,014 million for the first nine months of 2023, up 0.9% as reported and up 0.3% like for like. Despite disparate market conditions in France and the United States, Lagardère Publishing maintained strong trading momentum. The difference between reported and like-for-like data is attributable to a €38 million positive scope effect, chiefly linked to the acquisition of Welbeck Publishing Group, and to a €27 million negative currency effect (related to the US dollar and the pound sterling). 

Revenue for third-quarter 2023 amounted to €767 million, down by a slight 1.6% versus the prior-year period.  

In France, revenue for the division retreated by 5.0% in a slightly declining market, primarily reflecting the fact that

Guillaume Musso did not release a new large-format or Livre de Poche paperback during the period. Beyond that,

General Literature was buoyed by several bestsellers, including Nicolas Sarkozy’s Le temps des combats, Cédric Sapin-Defour’s Son odeur après la pluie, Panayotis Pascot’s La prochaine fois que tu mordras la poussière and Sorj Chalandon’s L’Enragé. Illustrated Books was once again lifted by the popularity of a number of Young Adult titles, including Sarah Rivens’ Captive series and Fallen Angel by Camille Creati, as well as by good momentum for Tourist Guides on the back of the recovery in travel.

In the United Kingdom, revenue rose by 5.6% in a slightly more buoyant market, driven by the Adult Trade segment with frontlist successes such as Stephen King’s Holly and Rebecca Yarros’s Fourth Wing – which was highly popular on social media – and a strong backlist performance. 

In the United States, revenue was down 5.2% on the back of a lighter publication schedule compared to the same period in 2022 and a downward trend in the overall publishing market in the third quarter. 

In Spain/Latin America, revenue was up by a robust 9.3%, mainly due to the peak of the school curriculum reform campaign in Spain and a strong performance by the Trade segment in Mexico. 

Revenue from Partworks was down by 8.2%, owing to a less dynamic launch campaign at the beginning of the year than in 2022.

E-books accounted for 9.0% of total Lagardère Publishing revenue in third-quarter 2023, unchanged from the same period of 2022, while digital audiobooks represented 4.1% of revenue compared to 4.0% in third-quarter 2022.

⚫ Lagardère Travel Retail 

Revenue for Lagardère Travel Retail totalled €3,719 million for the nine months ended 30 September 2023, up 31.2% year on year as reported and up 26.5% like for like. The difference between reported and like-for-like data is attributable to a €128 million positive scope effect and a €22 million negative currency effect (related to the US dollar and Chinese yuan). 

Third-quarter 2023 revenue came to €1,390 million, up 21.4% as reported and up 17.7% like for like. 

In France, revenue for the division grew by 10.8% year on year, led by especially brisk trading at regional airports. 

The EMEA region (excluding France) maintained strong momentum, with revenue jumping 19.3% thanks to regional European and international – notably US – traffic, with especially strong performances in Italy (up 30.6%) and Poland (up 18.4%). 

The Americas reported another period of strong growth, with revenue up 13.6%, driven by business in the United States (up 11.6%) and a sharp surge in activity in Canada (up 27.5%) following the return of Asian travellers. 

The Asia-Pacific region saw a strong upturn in business, with revenue up 45.7% following the reopening of the borders in China and versus a low comparison basis in 2022. 

⚫ Other Activities

Revenue for Other Activities totalled €181 million for the first nine months of 2023, up 1.6% as reported and down by a slight 0.5% like for like. 

Third-quarter 2023 revenue amounted to €56 million, stable year on year as reported and down 6.6% like for like. 

Lagardère Live Entertainment’s revenue contracted by 9% following a slight reduction in programming compared with 2022. 

Revenue for Lagardère News^[3] contracted by 7% in the third quarter. 

II.            KEY EVENTS SINCE 25 JULY 2023 

Signature by Lagardère Travel Retail of an agreement to acquire Tastes on the Fly

On 6 September 2023, Lagardère Travel Retail entered into an agreement to acquire 100% of Tastes on the Fly, which operates restaurants and Food & Beverage concepts in the United States and Canada, covering 25 locations across five major airport platforms. 

Combining the activities of Lagardère Travel Retail and Tastes on the Fly, which is expected to generate revenue of USD 180 million in 2023, would create a USD 1.5 billion player ranking number two in the North American Travel Retail and Foodservice industry.

The completion of this transaction, pending the approval of the competent competition authorities and other customary conditions, is expected to take place during the fourth quarter of 2023.

III.     LIQUIDITY

The Group’s liquidity position remains solid, with €1,178 million in available liquidity (available cash and short-term investments reported on the balance sheet totalling €346 million and an undrawn amount on the revolving credit facility of €832 million). 

IV.      FULL-YEAR 2023

Despite the uncertain economic and geopolitical environment, the Lagardère group remains confident in its ability to maintain a high level of results, thanks to the dynamism and responsiveness of its teams, and the diversified geographical presence of its two core businesses: 

•       despite pressures on costs, Lagardère Publishing should maintain relatively similar performances to 2022; 

•       in a normalised environment, as global traffic continues to recover, Lagardère Travel Retail has potential for revenue and profitability growth, including LEaP initiatives.

V.        INVESTOR CALENDAR^[4]

•       Full-year 2023 results: Tuesday, 27 February 2024 at 5:35 p.m. 

•       First-quarter 2024 revenue: Thursday, 25 April 2024 at 8:00 a.m.

•       Annual General Meeting: Thursday, 25 April 2024 at 10:00 a.m.

VI.      APPENDICES

CHANGES IN SCOPE OF CONSOLIDATION AND EXCHANGE RATES

For the nine months ended 30 September 2023, the difference between reported and like-for-like data is attributable to a €170 million positive scope effect, and to a €48 million negative currency effect, chiefly resulting from the depreciation of the US dollar (€22 million negative impact).

The scope effect can be analysed as follows: 

•       a €149 million positive impact from acquisitions by Lagardère Travel Retail, mainly Marché International AG (€112 million positive impact), Costa Coffee in Poland (€27 million positive impact) and Creative Table Holdings Ltd (€10 million positive impact), a €38 million positive impact at Lagardère Publishing, mainly from the acquisition of Welbeck Publishing Group (€22 million positive impact) and the consolidation of NEI CEDA (€11 million positive impact), and a €4 million positive impact for Other Activities due to the acquisition of Euterpe Promotion;  

•       a €21 million negative impact from disposals, mainly reflecting the creation of the joint venture incorporating Lagardère Travel Retail’s activities in Australia and New Zealand, which was accounted for as a disposal.

For third-quarter 2023, the difference between reported and like-for-like data is attributable to a €83 million positive scope effect, and to a €44 million negative currency effect, chiefly resulting from the depreciation of the US dollar (€32 million negative impact). 

The scope effect can be analysed as follows: 

•       a €62 million positive impact from acquisitions by Lagardère Travel Retail, mainly Marché International AG (€51 million positive impact) and Costa Coffee in Poland (€11 million positive impact), a €17 million positive impact at Lagardère Publishing, mainly from the acquisition of Welbeck Publishing Group (€9 million positive impact) and the consolidation of NEI CEDA (€7 million positive impact), and a €4 million positive impact for Other Activities due to the acquisition of Euterpe Promotion.  

VII.     GLOSSARY

Lagardère uses alternative performance measures which serve as key indicators of the Group’s operating and financial performance. These indicators are tracked by the Executive Committee in order to assess performance and manage the business, as well as by investors in order to monitor the Group’s operating performance, along with the financial metrics defined by the IASB. These indicators are calculated based on accounting items taken from the consolidated financial statements prepared under IFRS and a reconciliation with those items is provided in this press release or in the third-quarter 2023 revenue presentation.

➢ Like-for-like revenue

Like-for-like revenue is used by the Group to analyse revenue trends excluding the impact of changes in the scope of consolidation and in exchange rates.

The like-for-like change in revenue is calculated by comparing:

-         revenue for the period and revenue for the prior-year period adjusted for companies consolidated for the first time during the period and consolidated companies divested during the period;

-         revenue for the period and revenue for the prior-year period adjusted based on the exchange rates applicable in the period.

The scope of consolidation comprises all fully-consolidated entities. Additions to the scope of consolidation correspond to business combinations (acquired investments and businesses), and deconsolidations correspond to entities over which the Group has relinquished control (full or partial disposals of investments and businesses, such that the entities concerned are no longer included in the Group’s financial statements using the full consolidation method).

The difference between reported and like-for-like figures is explained in section VI – Appendices of this press release.

            Press Contact                                                                                            

presse@lagardere.fr

Investor Relations Contact

            Emmanuel Rapin                                        Tel. +33 1 40 69 17 45              erapin@lagardere.fr