Lagardère – 1st half of 2000 : Operating income + 36.4%

At its meeting of September 27, 2000, the Supervisory Board reviewed the financial statements for the six months ended June 30, 2000 as presented by Jean-Luc Lagardère, General Partner and Chief Executive Officer, and Philippe Camus and Arnaud Lagardère, General Partners and Co-Chief Executive Officers.
Consolidated sales for the first half of 2000 totaled 5,944 million euros, compared with 5,769 million euros for the corresponding period of 1999. This increase resulted mainly from progress made in the Lagardère Médias segment (+8.2%).Excluding changes in the group’s structure and the effects of exchange rates, sales of Lagardère Médias and High Technology increased by 3.7% and 6.8% respectively, while sales of the Automobile segment decreased slightly (-2.6%). Overall, consolidated sales increased by 3.9%.

Operating income increased by 36.4% to 263 million euros.

The increase is attributable to several factors :

• The Lagardère Médias segment recorded operating income of 123 million euros, reflecting an 40% increase over the first half of 1999, excluding changes in the group structure and the effects of exchange rates. All divisions reported increased operating income. The “Digital” division (Audiovisual and Grolier Multimedia) realized the strongest growth rate due to solid results recorded by the Radio and Advertising space agency and decreased expenditures associated with the costs of acquiring new subscribers at Club Internet before its merger with T-Online.

• The High Technology segment, which in the first quarter of 1999 was represented by Lagardère’s 33% holding in Aerospatiale Matra, contributed operating income of 103 million euros. This compares with 42 million euros in first half 1999. Progress in the Airbus division was the driving force behind the growth in the High Technology segment’s revenue, primarily due to more consistent business and a reduction of production costs.

• The Automobile sector produced stable result of €40M, despite a slight decrease in production. This is explained by a better sales product mix and continued cost reduction.

The table below summarizes key figures from the consolidated statement of income :

Exceptional increase of net income

Including an interest loss of €27M , current income totaled €236M. Non-operating income (+ €1,123M) includes, principally, the capital gains generated by the Club-Internet merger with T-Online, the Grolier Inc. sale, and a provision for depreciation of intangible assets within Lagardère Médias segment.

The “income taxes” category includes a provision of €426M for deferred taxes related to the Club-Internet/T-Online merger gain. Overall, taking into account these exceptional items, net income totaled €788M. This compares with €119M in first half 1999.

During the first half 2000, Lagardère acquired a 34% stake in CanalSatellite and a 27.42% stake in MultiThématiques for approximately 1 billion euros. During the same period, EADS, in which Lagardère owns a 15% equity stake, completed an IPO.
Lagardère Médias confirms its objective of attaining double-digit average annual growth rate in operating income between 1999 and 2002.The estimated operating income of EADs is expected to be fairly ahead of the plan presented in july 2000, as a result of the implementation of operational improvements and increased sales activity, particularly in aeronautics.

Lagardère’s Stockholder and Public Information Department is open to visitors at 121, avenue de Malakoff, 75116 Paris, France, and can be reached by telephone at 33 (0) 1.40.69.20.73. Information on the Group may also be obtained Internet : http: //www.lagardere.fr