Nov 12, 2013
Lagardère confirms annual profit target
Nov 12, 2013
French media group Lagardère confirmed its annual profit target on Tuesday despite a 4.4 percent drop in sales on a reported basis caused by slower sales of books to schools in Europe and unfavorable currency exchange rates.
Demand fell across its four divisions - book publishing, magazines and radio stations, travel retail, and sports marketing - leading it to post third-quarter sales of 1.88 billion euros ($2.52 billion).
The stronger U.S. dollar, British pound, and Japanese yen reduced sales by some 30 million euros compared with a year earlier.
Brokerage Gilbert Dupont had expected sales of 1.93 billion euros.
The family-controlled company, which competes with Pearson Plc and Bertelsmann AG in radio and book publishing, stuck by its 2013 goal of recurring media earnings before interest and tax (EBIT) to grow between 0 and 5 percent versus 2012 at constant exchange rates.
The guidance is based on advertising revenue falling about 7 percent at magazine and radio division Lagardère Active.
Lagardère shares have risen 53 percent this year to close at 26.72 euros on Monday, compared with a 30 percent rise for the European media stocks index
Investors have welcomed Lagardère's moves to restructure its magazine business, as well as a long-awaited agreement to sell its minority stake in pay-TV operator Canal Plus France to partner Vivendi for 1.02 billion euros after a long-running legal battle.
In mid-October, the group said it planned to sell 10 magazine titles to focus on growing its most strategic brands online, such as the French edition of "Elle", in a restructuring that threatens hundreds of jobs.
Lagardère has not yet said how much of the proceeds from the Canal Plus France sale will be returned to investors and how much will be used to reduce debt. Its statement on Tuesday said its net debt-to-equity ratio was set "to decline substantially" by the end of the year because of the asset sale.
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