Lagardere Sa

Thank you. Good evening, everyone. This conference call will be hosted by Jean-Christophe Thierry, chairman and CEO of Louis Hachette Group, Grégoire Castin, deputy CEO of Louis Hachette Group and deputy CEO in charge of finance for Lagardère. And joining us for this presentation, we have Pauline Auel, our group leader, Secretary General, Mr. Doug Rasmussen, Chairman and CEO of Lagardère Travel Retail, Frédéric Chevalier, CEO of Lagardère Travel Retail. All these participants will share their insights and key highlights. This presentation will be followed by a Q&A session. I now leave the floor to Jean-Christophe Thierry.

Thank you, Emmanuel. Good evening, everyone. I am delighted to present the results of Louis Hachette Group. Driven by the strength and complementarity of all our businesses, our international footprint, and the commitment of our teams, we delivered a revenue of 9.6 billion euros, and a record adjusted EBIT of 551 million euros. This strong momentum also allowed us to continue reducing our debt at a rapid pace. Grégoire will tell you more about the figures in a moment. Lagardère Publishing delivered strong performances in 2025 both in France and in English-speaking markets. A few highlights include, in the United States, Hachette Book Group became the number three publisher in the market. Along with a strong release schedule, our efforts to enhance the value of our catalog paid off with the successful re-release of Twilight, for example. In Europe, the new Asterix adventure was a tremendous success across several markets. In 2026, we will celebrate the 200th anniversary of Hachette, the world's third largest publisher. The bicentennial is an opportunity to reaffirm our mission. making reading and culture accessible to as many people as possible. To mark the occasion, we will host a free literary festival in Paris next month. Lagardère Travel Retail also had a very strong year in 2025, driven by profitable growth as air traffic normalized. A key milestone was the seamless takeover of one of the largest travel retail contracts in history as Schiphol Amsterdam Airport. Within Lagardère Live, 2025 saw the best audience performance in six years for Europe 1, now reaching 2.9 million daily listeners and record attendance at our Arkea Arena in Bordeaux. Finally, for Prisma Media, 2026 will be a year focused on strengthening our core activities in a rapidly evolving market. In summary, one year after the creation of our new company, we have demonstrated the solidity of our strategy as a diversified leader in publishing, travel retail and media. We are confident in our future and our development prospects. Thank you very much all. I will now hand over to Grégoire.

Thank you Jean-Christophe and good evening everyone. I'm also very pleased to share with you this strong Results delivered by Louis Hachette Group this year, the first full year as a listed company. Let me start with the key figures on the slide 4. And as you can see, Louis Hachette Group's revenues reached 9.6 billion euros compared to 9.2 billion euros last year. This confirms the continuation of a solid growth trend in a rather challenging economic environment with an increase of 4% on a reported basis and 3% on a like-for-like basis. Our operating performance was equally robust. Adjusted EBIT rose 8% to more than 550 million euros. This reflects the quality of our businesses and the disciplined execution of our operational strategy. Flash flow generation was also very strong. You know that this was our priority for this year, and we come back to this point later, but you can already see its positive impact on the balance sheet. In 2025, we significantly reduced our net debt by 236 million euros, and this brings the net debt just below 1.6 billion euros with a leverage ratio now under two times, a level that the group has not reached in a long time. Let us now take a closer look at the performance of our different businesses. Starting with the slide 7, with the Lagardère publishing activity, which delivered another year of very solid results. Despite the market environment that has generally been trending downward this year, Lagardère Publishing continues to deliver solid growth, supported by its diversified portfolio of activities and geographies. Revenue was up 3% like-for-like basis this year and crossed the €3 billion threshold. The division delivered solid growth across all markets, as you can see, more specifically in France, Revenue was up 2% in a market down by 1.5%. The illustrated segment benefited from continued demand for coloring books as well as from the strong performance of the new Asterix album, Asterix in Lusitania, which sold over 2 million copies as of today. In general literature, sales were driven by strong new releases, including Dan Bones' The Secret of Secrets at Lattès, the third part of Pierre Lemaitre's saga Un avenir à Dieu at Calman Levy, the Adélaïde de Clermont-Tonnerre's novel Winner of the Renaudo Prize, published by Grasset, and the President Sarkozy's Journal d'un prisonnier at Fayard. The education segment also benefited from the reform of the sixth grade curriculum, as well as the primary level titles. And regarding the US, we are seeing revenue up 3% in a market that was actually down by close to 0.5%. The business benefited from a very strong slate of new releases. Among the top sellers in 25, we had Kelly, Art, Quicksilver, Brimestone. Gone Before Goodbye by Riz Winterspoon and Harlan Coben, as well as the anniversary reissues of Twilight. In the UK, gross reached a solid 3% in a slightly declining market, supported by the strong performance of several fiction titles, including Onyx Term by Rebecca Yaros, The Hallmarked Man by Robert Calbraith, and Circle of the Days by Ken Follett, as well as the continued momentum from Frida McFadden's The Housemaid series. The business also benefited from the new distribution partnership with Bloomsbury, initiated in 2024. In Spain and Mexico, revenue was down 6%, mainly due to the curriculum reform in Spain that has started in 22 and that ends at the end of 24. Revenue in part works was up 6%, a remarkable performance given the trend of this market. This was driven in particular by the successful launches of Warhammer Combat Patrol and Disney novels. Finally, board games continue to support Our other revenue segment and our diversification with a strong 10% growth on a like-for-like basis, supported by the carryover sales of Skyjo, with 2 million units sold in 25, along with the successful launch of the new game Flip 7. Now let's have a look to the operating margin of the publishing branch. On slide 22. EBITDA reached 308 million euros compared to 289 million euros in 2024, maintaining predictions operating margin at a very high level. The high level of margin was driven by the top-line growth, of course, and by the favorable sales mix and improvements for the SG&E cost. EBITDA also included the contribution from equity-accounted companies, which came to 6 million in 2025 compared to 1 million in 2024. These favorable effects were partially offset by the restructuring costs of 14 million euros, mainly in the U.S. and in Mexico. Next slide on cash flow. Our strong operating performance translates into steady cash What we show here is the CFFO, the cash generated from the operation including capex before interest and taxes. CFFO came in at a very high level of 361 million euros compared to 330 million euros at the end of 24, a solid increase of 9% considering that 24 was already a record year for the cash generation at publishing level. This year, this amount included 44 million euros related to the proceeds from the sale of the real estate asset in Paris through Dassas and the sale of a domain name moon.com in the U.S. Let's now move on to travel retail on the slide 11. Twenty-five marks another record-breaking year for Lagardère travel retail, first revenue-rich year. 6.1 billion euros. On a like-for-like basis, revenue increased by 4.4%, driven by a significant number of openings and concession wins across Europe, Africa, and the Pacific region. In France, revenue grew 3%, supported by higher air traffic, new concession, and strong commercial initiatives in duty-free businesses. In the EMEA, excluding France, revenue was up 7% with solid growth in the UK, Spain, Poland, Italy, and Albania, driven by traffic growth and network expansion. Africa posted strong momentum as well, up 25% thanks to recent opening in Benin, Cameroon, or Rwanda. In the Americas, revenue was up 3%. In North America, activity was supported by network expansion and strong commercial performance in travel, essential, and dining. despite stable air traffic. South America delivered a strong growth of 28%, driven by the rebound in tourism and the opening of the new Lima airport in Peru. Last but not least, in Asia Pacific, revenue declined by 12%, mainly due to North America, which turnaround, by the way, is well on track. This turnaround impacted the group revenue by close to 2% of growth, so long story short, excluding North Asia, travel retail revenue grew by 6.5% on a like-for-like basis. Let's now turn to profitability on the next slide. We are also pleased to share this record EBITDA of 312 million euros in 2025 of 17% year-on-year. As a result, our opening margin reached 5.1% of revenues compared to 4.6% in 2024. Travel retail achieved this strong performance supported by the top-line growth in Americas and EMEA and also with the China restructuring benefits and, of course, a strict discipline regarding the costs. EBITDA in 2025 also includes 23 million in restructuring charges and 18 million in asset impairments, mainly in Asia and Iceland, related to closure operations in order to preserve the profitability going forward. Going to the cash flow generation on the next slide, the CFFO of our travel retail business stood at 224 million Again, a record level. In this amount, we had an unfavorable impact on working capital from the numerous new duty-free concession openings in Amsterdam, Auckland, and Cambodia this year, and from an increase in inventories in France linked to the opening of a new warehouse. It's also worth noting that capex were slightly lower in 2025, 35 million euros lower this year compared to last year. This is not because we intended to slow down our investments, quite the opposite actually. It's rather linked to the very high level reached in 2024 and derives from the project phasing of the new concessions. Let's now move on to Lagardère Live on slide 15. As you know, this branch brings together our radio channels, news magazines, health licenses, live venues, and artists' production business. In 2025, La Garda Live generated €219 million in revenue. Excluding the impact of Paris Match disposal in November 2024, revenues continue to grow, up 1% year-on-year. The news and radio segment delivered a slight increase, 0.3% compared to last year. The continued expansion of European audience helped offset software trends in music radio and regarding the advertising market. The press business also performed well, supported by the launch of Le Gide News and by strong contributions from Hell's international licensing and by the ongoing momentum of our diversification strategy. Our live entertainment activities had a particularly strong year, posting 6% growth, driven by successful concertos organized by Hell Productions, and a record year at the Arkea Arena in Bordeaux. Going to slide 16, Lagardère Live, as you can see, strongly halts its operating losses in 2025, delivering a 37 million year-on-year improvement, supported, of course, by significant cost-saving measures. The year 25 was still impacted by around 10 million in restructuring costs. These costs relate to reduction of staffing costs as well as efforts to streamline the real estate portfolio inherited from a time when Lagardère-Médias perimeter was significantly larger than it is today. So as you can see, we are fully committed to continuously reducing operating costs within this new division. And excluding these restructuring charges, EBITDA would therefore be closer to a loss of around 10 million. We are not here break-even, but as you can see, we are getting closer. The cash flow also improved sharply with cash burn reduced threshold. CFFO came in at minus 11 million euros compared to minus 43 million the previous year. And before wrapping up our review of the group performance, let me share a few comments on Prisma Media. For the full year 2025, Prisma Media delivered revenue of €266 million, down 9% on the reported basis. This reflects both the ongoing contraction of the print press market, the consumption patterns, and the shift in digital advertising markets. To respond and adapt to these challenging market conditions, we launched two restructuring plans, one in June and another one in December 25, covering around 300 employees, more than one-third of the total workforce. is to, of course, safeguard profitability. PRISMA is still profitable. I will come back to this later in 2025, besides the restructuring cost. These certain changes in governments were also put in place, and the new leadership team initiated several other strategic actions. First, we strengthened Our People Magazine portfolio with the acquisition of EC Paris and France Dimanche in December 2005, two magazines which are profitable today and less impacted by the market changes that I just mentioned. Second, we decided to refocus on our core businesses and flagship brands with the planned investment of our luxury magazines. And third, at the same time, Vivendi is expected to take 14% minority stake with a cash consideration. These last two transactions are currently under review by the staff representative bodies and are expected to be finalized by the end of this semester. Let's now move to the next slide with a focus on Prisma Media profitability. As you can see, Prisma's EBITDA stood at minus 43 million in 2025, a decrease mainly reflected in the decline in the top line and the impact of the restructuring cost of 49 million euros. Let me point out again that excluding this cost, this restructuring cost, EBITDA remained positive at 6 million for 2025. And of course, our aim is definitely to keep Prisma EBITDA in this positive territory. Now that we covered the group, the performance for each division, let me walk you through the financials at group level, starting with revenues on slide 11. The total group revenue reached, again, 9.6 million in 2025. As you can see, reported revenue growth was 4%. As I already mentioned, it represented almost 400 million additional revenue in absolute terms. This year, again, organic growth remains the main driver. contributing 310 million euros across all our businesses. The main scope effect came from the start of the duty-free operation at Amsterdam Schiphol Airport in May 25, as well as the acquisition of Sterling Publishing at the end of 24, and 999 Games at the beginning of 25, offsetting the sale of Paris Match in November 24. Regarding Amsterdam Duty Free, the tender we won in December 24 led to the acquisition of a 70% stake in a new joint venture with Amsterdam Airport, retaining the remaining 30%. So to be clear, this new concession has been accounted for as an acquisition and therefore is not included in our like-for-like growth. On the negative side, foreign exchange had an adverse impact this year, quite a strong impact, with the US dollar being the main currency affecting our revenue, reflecting our strong presence in the US, both for travel retail and publishing. Despite this adverse impact, as you can see, the growth is still very strong. Let's move on to EBITDA on the next slide, slide 22. As shown on this slide, we had a solid and steady improvement in 2024 and 2025. EBITDA rose from 490 million in 2023 to 551 million in 2025, representing more than 60 million euro increase. We are particularly pleased to see that this high level of EBITDA continues to be almost evenly supported by our two core activities. with again 312 million contributed by travel retail and 308 million by publishing. Overall, this reflects a strong and balanced performance across the group's key businesses. Let's have a look now at the rest of the P&L. Below EBITDA, after deducting amortization of intangible assets related to M&A and the positive adjustment linked to the IFRS 16, profit before interest and tax reached 429 million euros, representing a seventh increase year-on-year. Below this line, the finance costs improved by 21 million euros in 2025, driven by a reduction of the gross debt and a lower average cost of debt. Interest expense on lease liability increased by 8%, reflecting new, renewed, and amended lease contracts, particularly in the United States, Oakland, Warsaw, or Prague. Income tax decreased to 73 million euros compared to 93 million in 24, mainly due to exceptional items recorded last year. And as a result, net profit rose to 112 million euros, an improvement of 50 million euros supported by lower finance costs and reduced tax burden. The level of minority interest is explained by the increase of Lagardère earnings, of which, as you know, Louis Hachette captures only 66%, also impacted by the decrease of the losses in Asia that are shared with minorities, and the fact that Prisma's losses significant this year due to restructuring are fully borne by Louis Hachette Group. Despite that, as you can see, net results group share significantly increased from 13 to 22 million euros. On the next slide, you can see the improvements again in terms of cash flow generation, our CFO increased from 357 million in 2023 to 558 million in 2025, a sharp uplift of 155 million euros in two years. This reflects again the solid operational momentum across the group. This section on cash flow naturally leads us to the balance sheet and more specifically to the evolution of our net debt on the slide 25. On this slide, you can see our usual net debt bridge over the last 12 months. And beyond the CFFO that I mentioned, our outflows include 100 million of tax paid and 96 million euros in financial interests. Altogether, our CFAET, that is the cash flow after tax and interest, amounted to 363 million euros. On the M&A front, the group remains active, but reasonable this year, in line with our strategy, with the acquisition, as I already mentioned, of 999 Games, Sterling Union Square Publishing, Le Routard, in France, by Lila Garder Publishing, The first installment payment for the acquisition of the 70% stake in the GenVenture operating the Schiphol travel retail concession that I already mentioned and also the acquisition of ICI Paris and France Dimanche for Prisma. In the opposite direction, we received also around 40 million euros from the repayment of a vendor loan granted to Sport5 following the disposal of Lagardère Sport in 2020. In May, we also paid a 6 cents dividend per share representing a total of 59 million euros. We also distributed 85 million to minority shareholders including 32 million to minority shareholders of Lagardère itself and 53 million euros to minorities at publishing and travel retail level. All in all, these movements bring net debt just below 1.6 billion euros at the end of this year. At this point, I would like to make a brief remark for those monitoring net debt at Lagardère level. Just like Louis Hachette Group, Lagardère's net debt also improved, ending this year at exactly 1.6 billion, which represents a 255 million reduction year on year. As a result, Lagarde's net debt ratio fell also below 2 times, 1.96 times, to be accurate, at the end of 2025, compared to 2.4 times a year earlier. We are currently on track and even a little bit in advance with our leveraging strategy, but of course we remain fully focused on continuing this effort. And to continue on this topic, let's move on to the next slide. As you know, in 2025, the Lagardère Group successfully issued A 500 million euro five-year bond, the transaction was more than three times oversubscribed by the market, demonstrating investors' confidence in the group's solid performance. Lagardère also raised 300 million euros through a private placement structure in euro with a mix of maturity up to five years and fixed and floating rates. After these two refinancing operations for 800 million euros, our net debt, as you can see, is now well diversified and well balanced between bank loans, private holders, and bonds. And the maturities are also well spread until 2030, as you can see on this slide, and the weight average maturity is 2.9 years. Let's now move to the conclusion and to sum up the key message for 26. So first, I would tend to say that we will continue to consolidate our leading position by staying fully focused on the solid execution of our strategy across all the businesses. This includes promising release schedule for Lagarde Air Publishing. Lagarde Air Travel Retail will also capitalize on major openings completed in 2025 and growing air traffic which will support growth momentum going forward. Our aim is still to deliver growth to increase margin with a strict cost discipline. And second, we also want to continue to deliver the group, but we will invest to fuel the future growth. And we will remain attentive to Bolton acquisition opportunities when they could make strategic trends. Third, regarding the dividend fiscal year 25, we will propose an ordinary dividend of $0.06 per share to be submitted To the AGM in May, the ex-dividend date will be May 7, with this payment starting on May 11. So 26 priorities reflect again a balanced approach, reinforcing our strategic position, continuing to reduce debt. and maintaining a disciplined and predictable shareholder return supported by strong operational momentum in both publishing and travel retail. Thanks a lot for your attention, and we are now available to answer the questions that you may have.