2003 Annual Sales

The revenue achieved in 2003 will allow Lagardere Media to reach once again a double digit growth rate of its operating income.

Overall, the different Lagardere Media activities recorded a slight slow down of their organic growth during the 4th quarter, deriving from the particularly high 2002 comparison basis. For reference, the organic growth rates recorded during the 2002 4th quarter for the Radio/Television, Distribution, Book activities amounted respectively to 28%, 12% and 8%. All the activities grew for the full year 2003. The Book division recorded the highest performance with an above the market growth rate. The Magazine Publishing division resumed growth despite a still difficult advertising environment -in particular since the Irak conflict outbreak. Hachette Distribution Services maintained its position in the face of a retrenched airline traffic level and an erosion of the music sales in the Virgin retail network. At last, the Radio and Television activities benefited from a sustained growth, meanwhile the new media activities (Lagardere Active Broadband) recorded a significant decrease -in particular in Germany.

(*) excluding changes in group structure and the effect of exchange rates
NS: Not Significant; NA: Not Available

In a 2003 environment overshadowed by an important appreciation of the Euro (approximately 17% against the US Dollar, 9% against the British Pound and 11% against the Japanese Yen), Lagardère Media revenues declined slightly (- 1.9%). Consolidated Lagardère revenues dropped by -5.8% as a result of the deconsolidation of Matra Automobile which took effect on January 1st, 2003.

“Lagardère Media” revenues, excluding changes in the group structure, edged down -2.4%. Excluding as well the effects of exchange rates, the growth rate is + 2.1%.

Hachette Livre

For the full year 2003, Hachette Livre experienced once again a growth rate that is above the market. Despite a particularly high 4th quarter 2002 comparison basis, the internal growth for the full year amounts to +3.5%, especially as a result of the dynamic French and Spanish activities as well as the “partworks” business in Europe.

Hachette Filipacchi Médias

After having benefited during most of the 1st quarter from a turnaround in the advertising market that began in the 4th quarter of 2002, in particular in the U.S., the Magazine Publishing activities experienced a wait and see attitude by the advertisers since the outbreak of the war in Iraq. In Europe and Japan, the 4th quarter recorded a small decline of the advertising revenues. In total, Hachette Filipacchi Médias posts a growth rate on a like-for-like basis, above 1%, following two years of consecutive decline.

Hachette Distribution Services

After a good start earlier this year, Hachette Distribution Services has been facing an exceptionally difficult economic environment, in particular in its travel retail business (in airports as a result of the war in Iraq and SARS, and in the train and subway stations in France as a result of the repetitive strikes in May and June).
In total, as a result of the strong growth in the Eastern European activities as well as the development of the “Virgin Megastore” network in France since November 2001 (new store openings in Montpellier, Nice, Toulouse, Nantes, Melun-Sénart and Paris Barbès), Hachette Distribution Services experienced an internal growth rate above + 2%.

Lagardere Active

Lagardere Active revenues grew organically by +3%.

The Radio activity, which had a mixed performance from one month to the other during the 1st half of 2003, benefited from a steadier and reinforced revenue growth, in particular during the last four months. Visibility on the future outlooks remains poor.

During the same period, the Television activities experienced a double digit growth rate as a result of the dynamism of the Production division as well as the success of the thematic channels -and of CanalSatellite, their main distribution platform.

Lagardere Active Broadband revenues decreased by approximately a quarter, given the poor performance of its German subsidiary on the audiotel services market. However it benefited from a strong acceleration of its mobile activities, notably in France, with a development during the last quarter sustained by the launch of new services and the growth of the number of multimedia mobiles.

(*) excluding changes in group structure and the effect of exchange rates

Despite its impact on revenues, the decline of the Dollar will have a limited impact on Lagardère Media profitability in 2003. In fact, the activities that are exposed to a US Dollar risk are located in the U.S. and thus have costs in US Dollars as well. As a result, the US Dollar risk is limited to the profit, which, in addition, was partially covered in 2003 by hedging contracts.

Revenues for the “EADS” line represents 15.07% of EADS sales. In accordance with the French accounting standards used by Lagardère SCA, when hedging against exchange rate fluctuations, sales generated in foreign currencies are converted at a rate determined by the hedging instrument (rather than at the current exchange rate). EADS sales were restated to conform to these standards. Full year 2003 EADS revenues grew by 3.9%. The Airbus division, which delivered 305 airplanes in 2003 versus 303 in 2002, presents nevertheless a slight decline given the US Dollar weakening. However, all the Defense activities recorded an increase in their revenues and in particular the Military Transport Aircraft division, which benefited from the first billing for the A400M program.