Lagardère : Strong earnings growth in Media activities – A year of transition for Aerospatiale Matra before its integration into EADS

At its meeting on March 22, 2000, the Supervisory Board considered the financial statements for the fiscal year ended December 31, 1999 as presented by Jean-Luc Lagardère, Chief Executive Officer, and Philippe Camus and Arnaud Lagardère, Co-Chief Executive Officers.

This 14.9% increase stems principally from progress in each of the Group’s business segments: Lagardère Médias (+8%), Aerospatiale Matra (+33.1% on Matra Hautes Technologies in 1998), and Automobile (+1.8%).

Excluding changes in the Company’s structure and the effect of exchange rates, consolidated sales increased by 2.9% overall, with increases of 3.4%, 2.6% and 1.8% respectively in the Lagardère Médias, Aerospatiale Matra, and Automobile segments.

Operating income amounted to 520 million euros, a decrease of 19.2% from FY 1998. This decline is attributable to several factors:

• The Lagardère Médias segment recorded operating income of 292 million euros, reflecting an increase close to 20% from FY 1998. Three divisions — Book Publishing, Print Media and Distribution Services — recorded increases in operating income. The contribution of the Digital division (Audiovisual and Multimedia Grolier) decreased despite a significant improvement in the radio broadcasting sector. This decrease was due to the elimination of Giraudy’s positive contribution (this subsidiary has been disposed of and is not consolidated in 1999) and to the significant investments made to pursue the rapid development of activities associated with the Internet.

• The 33% interest held in Aerospatiale Matra, which now replaces the Group’s former High Technology segment and is consolidated using the proportionate method, contributed to a sharply reduced operating income of 158 million euros compared to 343 million euros in FY 1998. Although less significant than expected, this decrease resulted from the previously announced transition in the Defense activities (missile systems and combat aircraft) and from the now resolved technical difficulties encountered in Satellite activities. This confirms that the Aerospatiale Matra group is proceeding ahead of its business plan to double the operating margin by the year 2003.

• The Automobile segment, in which operating income totaled 70 million euros was down 9.7% owing principally to the accelerating pace of new product development.

Consolidated statement of income:

Non-operating income includes capital gains of 166 million euros realized on disposals (principally Giraudy and Skyrock) and non-recurring costs of 150 million euros (restructuring costs and costs incurred by Aerospatiale Matra as a result of operations related to the merger of Aerospatiale with Matra Hautes Technologies, Aerospatiale’s privatization and Aerospatiale-Matra’s subsequent IPO).

In addition, the losses recorded by Aerospatiale as a result of the restructuring of its foreign currency hedging positions (401 million euros) and the gain recorded on the sale of its equity interest in Sextant Avionique (182 million euros) were restated and charged directly to the Aerospatiale Matra shareholders’ equity in Lagardère’s books as of January 1, 1999. These two items, therefore, had no effect on Lagardère’s consolidated results.

Net income, after deducting minority interests, totaled 241 million euros compared with 280 million euros in 1998.

Outlook

Lagardère Médias plans to further improve the operating margin of its traditional media divisions.

The digital media division, strengthened by its alliances with Canal+ and Deutsche Telekom, will speed up its internet (portals, e.commerce web sites and e.advertising sales agency), mobile, thematic channel and interactive service broadcast related developments.

These developments will be implemented in France as well as internationally.

Dividend maintained

The Company’s managing partners decided to propose that the General Meeting of Shareholders approves the distribution of a net dividend of 0.78 euro (5.12 French francs) per share (plus a tax credit of 0.39 euro or 2.56 French francs).

CO-OPTION

Pierre Lescure, Chairman and CEO of Canal+, was co-opted to be a member of Lagardère’s supervisory board .

Please note that the Public and Shareholder Information Center is open to visitors at 121 avenue Malakoff, PARIS, 16th (Tel. 01.40.69.20.73) and that any information regarding the group can also be obtained via MINITEL 3615, Code LAGARDERE or on ECOFIL: 3615 COB or on the Internet at: //www.lagardere.com