1.4 Business activities and strategy AFR

Created in 1992, Lagardère is an international group with operations in more than 40 countries worldwide. It employs over 30,000 people and generated revenue of €7,211 million in 2019. Under the impetus of Arnaud Lagardère, General and Managing Partner, the Group launched a strategic refocusing around two priority divisions:

Lagardère Publishing is the world’s third-largest book publisher for the general public and educational markets, and the leader in France. Alongside some 6,900 employees, it creates 17,000 original publications each year as well as contributing to their broader circulation by innovating with digital and mobile reading formats. Lagardère Publishing’s activities also extend to adjacent businesses such as Mobile Games and Board Games;
Lagardère Travel Retail is the world’s fourth largest travel retail merchant, with operations in three segments of this very dynamic field: Travel Essentials, Duty Free & Fashion, and Foodservice. Lagardère Travel Retail has 25,000 employees across an international network of more than 4,800 points of sale in around one thousand airports, mainline and urban train stations.

The main objectives of the strategic refocusing are as follows:

to endow the Group with an improved, simpler, more ambitious and more focused business profile;
to improve cash generation in order to fund the growth of the Group’s two priority divisions.

The proceeds from all these disposals will primarily be reinvested in Lagardère Publishing and Lagardère Travel Retail, to provide them with all the resources they need to sustainably secure their positions among the world leaders in their respective markets.
As part of this process, in 2018, the Group began divesting the assets making up Lagardère Active, excluding Lagardère News (see summary table below), with the following main transactions completed during the year:

the radio businesses in the Czech Republic, Poland, Slovakia, Romania and South Africa;
the e-Health division (MonDocteur and Doctissimo);
lthe digital businesses (Boursier.com, Plurimedia and BilletReduc.com);
the press titles in France;
the television unit.

These disposals were carried out within a very short time-frame and on broadly satisfactory financial terms.
In addition, the Audiovisual Production and Distribution division (Lagardère Studios) is in the process of being sold.
Lastly, the Group has received an offer to purchase 75% of Lagardère Sports (excluding Lagardère Live Entertainment).

Items appearing in the Annual Financial Report are cross‑referenced with the following symbol AFR

Summary table of assets sold, pending completion or not yet sold

	2018 revised recurring operating profit^(*) (€m)	2019 recurring operating profit (€m)	Estimated sale value (€m)	Date of sale
Disposals to date
LARI – Eastern Europe	7	-	73	July 2018
Marie Claire	-	-	14	June 2018
MonDocteur Doctissimo	(4)	-	55	July 2018 October 2018
Boursier BilletRéduc Plurimedia Doctipharma	3	-	41	January 2019 February 2019 February 2019 February 2019
LARI - Africa (Jacaranda, Mediamark, Vibe Radio [Senegal and Côte d’Ivoire])	1	-	18	Jacaranda and Vibe Radio: transactions closed in February 2019 Mediamark: transaction closed in September 2019
Magazine Publishing titles (excluding Paris Match, Le Journal du Dimanche and the Elle brand licence)	22	-	52	February 2019
Mezzo	3	1	12	July 2019
DHP, other	1	0	1	July – October 2019
TV Channels, excluding Mezzo	23	2	215	September 2019
Total	56	3

(*) Restated for IFRS 16.

	2018 revised recurring operating profit^(*)	2019 recurring operating profit	Estimated sale value (€m)	Date of sale
Disposals pending completion
Lagardère Sports	32	64	110	Signed 19 February 2020

	Résop révisé 2018 (*)	Résop 2019
Not yet sold
Lagardère Studios	19	15
Total	51	79

(*) Restated for IFRS 16.

Further to these divestments, the Lagardère group is now organised around two divisions: Lagardère Publishing⁽¹⁾, which includes the Group’s Book Publishing and e-Publishing businesses, and areas such as Education, General Literature, Illustrated Books, Partworks, Dictionaries, Youth Works, Mobile Games, Board Games and Distribution. The division operates predominantly in the three main language groups: English, French and Spanish.
Hachette Livre is the world’s third-largest trade book publisher for the general public and educational markets (number one in France, number two in the United Kingdom, number three in Spain, and number four in the United States).
There are several key success factors in Hachette Livre’s strategy:

well-balanced positioning (across geographic areas and publishing segments), allowing it to capitalise on the fastest-growing markets;
decentralised organisation, giving a large degree of autonomy to its different entities and publishing houses;
sustained investment in digital technologies.

In the field of digital technology and the Internet, Lagardère Publishing offers products suited to multiple formats, distribution channels and media, in line with emerging market trends.
The division continues to diversify, having acquired several companies specialising in mobile games and board games. These investments reflect the strategic aim of exploring leisure activities adjacent to the world of publishing, where the business model holds out the prospect of significant cross-fertilisation of content and know-how.
Lastly, as part of the strategy defined for the Group by Arnaud Lagardère, Lagardère Publishing plans to position itself for the potential acquisition of an English-language publisher – yet to be identified – to increase its weight in that linguistic market, where a large part of the economic future of global publishing is being played out.
Lagardère Travel Retail consists of retail operations in transit areas and concessions in three business segments: Travel Essentials, Duty Free & Fashion, and Foodservice.
Lagardère Travel Retail is a pure player and global leader in the travel retail market:

the world’s fourth largest travel retail operator;
the world’s largest international network of travel essentials stores;
the European leader in the travel retail fashion segment;
the world’s fourth-largest Foodservice provider in transit areas.

The division’s strategy is focused on the following priorities:

maintaining the pace of expansion so as to benefit from significant external growth opportunities;
integrating new acquisitions and concessions (acquiring IDF in Belgium, completing the integration of HBF in the United States, opening the concession in Dubai, etc.);
securing the renewal of key contracts;
driving faster innovation in delivered products and services, and sharpening the focus on CSR issues;
strengthening operational excellence and improving margins;
deploying initiatives to optimise cash management and financing requirements.

In addition to Lagardère Sports and Lagardère Studios, the Group also owns the following core business units:

Lagardère News which comprises Paris Match, Le Journal du Dimanche, advertising sales brokerage, licensing management for the Elle brand, Europe 1 and the French music radio networks (Virgin Radio and RFM).

Lagardère News is strategically committed to becoming a boutique source of important news, that is respected as agile, disciplined and reliable, and run like a start-up but with iconic brands to produce highly differentiated content as flexibly and efficiently as possible.

Lagardère Live Entertainment which is active in two segments:
- operating and managing entertainment venues, including the Folies Bergère, Casino de Paris, Bataclan, the Arkéa Arena concession and the public service concession for the Arena du Pays d’Aix;
- producing tours for concerts (Florent Pagny, -M-, Jean-Louis Aubert, etc.) and shows (Salut les copains, DISCO, Love Circus, Les Choristes, etc.).

One of Lagardère Live Entertainment’s primary objectives is to maintain its market leadership in show production.

(1) This Universal Registration Document refers to the Activity of Lagardère Publishing interchangeably as Hachette Livre or Lagardère Publishing.

1.4.1 LAGARDÈRE PUBLISHING

A) PRINCIPAL ACTIVITIES AND MAIN MARKETS

The world’s third-largest trade book publisher for the general public and educational markets⁽¹⁾ (number one in France⁽²⁾, number two in the United Kingdom⁽³⁾, number three in Spain⁽⁴⁾, and number four in the United States⁽⁵⁾), Lagardère Publishing is a federation of publishing companies with a large degree of editorial independence. They are united by common management rules, a concerted effort to expand in digital activities, a coordinated strategy in respect of the global distribution giants, and the same high standards required of the people appointed to positions of responsibility in each company.
Since its foundation in 1826, Hachette Livre has consistently sought to publish, sell and distribute high quality innovative books that satisfy its readers’ thirst for knowledge, culture and entertainment. The company’s employees, who contribute to the growth and ongoing success of this division, continue to pursue this goal.
Hachette Livre has a well-balanced, diversified portfolio that covers much of the editorial spectrum (Education, General Literature, Illustrated Books, Partworks, Dictionaries, Youth Works, Mobile Games, Board Games, Distribution, etc.). Publishing is predominantly in the three main language groups: English, Spanish and French. The portfolio offers new bases for expansion by geographic area and business line, allowing Lagardère Publishing to capitalise on the most buoyant segments and the most dynamic markets.
The division’s business model is present throughout the entire book publishing/distribution value chain. Thanks to its highly reputed publishing houses and brand names, it is able to draw the fullest benefit from its close relationships with authors, the expertise of its sales force, the rigorous logistics organisation of its distribution network and the commitment of its highly trained employees.
The autonomy of the publishing houses, which are independent and fully responsible for their own creative processes and editorial decisions, encourages both creativity and internal competition. The large degree of autonomy that Hachette Livre allows each of its operating divisions is one of the key factors of its success, since each division of Lagardère Publishing forms a federation of small and medium-sized independent publishing houses with their own corporate culture and specific – not to mention unique – editorial tone.
Each publishing house is responsible for relations with its own authors. Excellent individual relationships enable publishers to control the copyright portfolio and offer seamless supply to the paperback sector. In France, they also give rise to merchandising opportunities.
These combined assets make Hachette Livre France’s leading publishing group, ahead of such prominent competitors as Editis, Gallimard-Flammarion, Albin Michel and Média-Participations.
Hachette Livre ranks number one in the fragmented General Adult Literature market, and first in literature for Youth and Illustrated Books, as well as in the traditionally more concentrated Textbook and Dictionaries segments.
Outside France, Hachette Livre conducts its business alongside competitors such as Pearson, Penguin Random House, Scholastic, Simon & Schuster, HarperCollins, Planeta and Holtzbrinck. In just a few years, it has succeeded in moving up from thirteenth to third position among private-capital publishers worldwide.
Most of its new publications are also published in France, the United Kingdom and the United States in digital formats that are marketed in the form of e-books, on every platform, and sometimes downloadable audiobooks.
Hachette Livre has begun to diversify into mobile and board games, to explore new, fast-growing entertainment territories.

(1) World publishing rankings prepared internally by Hachette Livre based on:

the annual financial reports of the groups in question (most cases);
rankings appearing each year in Livres Hebdo (rankings prepared with Rüdiger Wischenbart Content and Consulting, and generally used subsequently in partnership with The Bookseller, Publishers Weekly and Buchreport), and which are sometimes based on direct contacts with the groups in question (i.e., when annual financial reports are not available);
the ranking, which takes into account private publishing companies in the Textbook market (excluding professional, and scientific, technical and medical publishing) and general interest (Trade).

(2) Source: internal analyses based on statistics from the GfK survey panel and the data from the education group of the French publishers association.
(3) Source: internal data based on Nielsen BookScan in the United Kingdom.
(4) Source: internal estimates
(5) Source: internal analyses based on Nielsen BookScan in the United States.

A.1 IN FRANCE (1)
General Literature comprises prestigious publishing houses such as Grasset, Fayard, Stock, Calmann Lévy and Lattès. Each is prominent in a specific domain, but competes with the Group’s other publishing houses and with rival publishing groups’ brands. Le Livre de Poche, which releases paperback reprints for all of the division’s publishing houses as well as for many non-Group publishers, is today France’s leading source of general literature paperbacks.
Hachette Illustré covers the entire range of illustrated works. It is number one in France for both practical guides (Hachette Pratique and Marabout) and travel guides (Hachette Tourisme and Le Routard). Hachette Illustré is also number one in the high-quality illustrated book market with two prestigious publishers, Éditions du Chêne and Hazan, and in youth works (Hachette JD, Hachette Jeunesse Roman, Deux Coqs d’Or, Gautier-Languereau and Le Livre de Poche Jeunesse).
Hachette Livre boasts valuable editorial assets in this market, including characters such as Babar, Noddy, Asterix and Fantômette.
In Textbooks, Hachette Livre is the leading publisher in France⁽²⁾ thanks to two separate entities: Hachette Éducation and the Alexandre Hatier group. These entities include such reputed publishers as Hachette, Hatier, Didier and Foucher and other strong brands (Bled, Bescherelle, Passeport, Littré and Gaffiot), enabling Hachette Livre to occupy a leading position on the extra-curricular book segment.
In Reference and Dictionaries, famous assets include the brands Larousse, Hachette and Harrap’s.
Hachette Livre is number one in France for both monolingual and bilingual dictionaries. With its international reputation, Larousse generates more than 40% of its revenue outside France, and is particularly well established as a brand in Spanish-language books.
The Academic and Professional activity includes Dunod-Armand Colin, the leader in France’s higher education market.
Distribution for Hachette Livre and other non-Group publishing houses under exclusive contracts is carried out through a distribution network managed from the national centre in Maurepas.
Hachette Livre handles 250 million copies per year and supplies more than 15,000 bookshops, newsagents, news stands and supermarkets in France. Hachette Livre Distribution, the number one distributor in France, also operates in Belgium, Switzerland and French-speaking Canada.

A.2 OUTSIDE FRANCE⁽³⁾
In 2019, Hachette UK was the United Kingdom’s second-largest publisher, with 12.2%⁽⁴⁾ of the print trade book market through eight divisions: Octopus for illustrated books; Orion; Hodder & Stoughton; Headline; Little, Brown and Quercus for general literature, plus Bookouture since 2017; and Hachette Children’s Books in the youth works segment.
These divisions and their range of brand names have also enabled Hachette Livre to develop operations in Australia, New Zealand, Ireland, India (where it is number two in the market), Singapore and the English-speaking Caribbean.
Hachette Livre is also a key player in the textbook market with Hodder Education, which ranks third in the market.
Lastly, Hachette Livre has a distribution business in the United Kingdom and recently opened a new, highly automated warehouse in Didcot.
Hachette España has been the third-largest publisher in Spain since Santillana’s acquisition by Penguin Random House, and ranks as the leading publisher of textbooks through Anaya and Bruño. These two publishing houses are key players in the Education market, as well as in the extra-curricular books, General Adult Literature and youth works segments. It is also very well established in Latin America, through its Larousse, Anaya, Bruño, Alianza, Algaida, Barcanova, Xerais and Salvat brands. In Mexico, Hachette Livre is one of the leading textbook publishers, under the Larousse and Patria brands.
In the United States, Hachette Book Group is the fourth-largest trade book publisher thanks to imprints such as Grand Central Publishing, Little, Brown and Company, as well as Little, Brown Books for Young Readers in the youth works segment; FaithWords and Worthy Books in the religious segment; Orbit in science fiction; Perseus in non-fiction; and Mulholland in crime fiction.
Hachette Livre also has distribution operations in the United States.
Partworks are published by the Collections division, and are sold per issue in news stands and by subscription. The Collections division has expanded internationally: Partworks are now published in 16 languages and 36 countries through subsidiaries based in France, the United Kingdom, Italy, Spain, Poland, Japan, Argentina and Russia. This activity’s marketing skills and capacity to create new products rigorously tested for compatibility with each market have made it the world leader, and a driving force behind Hachette Livre’s overall performance.
Worldwide, Hachette Livre is represented either directly or indirectly in more than 70 countries across its various business lines and its 150 brands.

(1) Hachette Livre’s competitive positions reflect data provided by the GfK panels to which the division subscribes.
(2) Source: internal estimates.
(3) Source: internal data, based on Nielsen BookScan in the United Kingdom, internal sources in Spain and Nielsen BookScan data for the United States.
(4) Source: Nielsen.

B) OPERATIONS DURING 2019
Contribution to consolidated revenue in 2019: €2,384 million (€2,252 million in 2018).

Breakdown of revenue by activity

	2019	2018
Éducation	14,6 %	14,1 %
Illustrated Books	13,1 %	12,8 %
General Literature	43,4 %	44,3 %
Partworks	12,3 %	12,2 %
Other (including Reference)	16,6 %	16,6 %
Total	100 %	100 %

Breakdown of revenue by geographic area

	2019	2018
France	29,3 %	28,1 %
United Kingdom	16,3 %	19,1 %
United States	25,5 %	25,8 %
Spain	6,0 %	5,7 %
Other	22,9 %	21,3 %
Total	100 %	100 %

In 2019, the global publishing market saw growth of 1.3% in France⁽¹⁾ and of 1.1% in Spain⁽¹⁾. In the English-speaking countries, the American market edged up slightly overall (all formats combined), while in the United Kingdom⁽²⁾ and in Ireland⁽²⁾, demand rose over the year in value, by 2.4% and 5.0% respectively.
In France, the first year of the new high school reform had a positive impact on educational publishers.
In Spain, the renewal of curricula in six primary grades in Andalusia and the introduction of a free textbook programme in Madrid had a positive impact on textbook sales.
E-book sales continued to decline in the English-speaking markets, while audiobooks extended their spectacular growth across all markets.
Against this backdrop, in 2019, Lagardère Publishing reported revenue of €2,384 million, up 5.9% as reported and 2.8% like-for-like, and recurring operating profit of €220 million, up 10%. The gains were led by the successful sales in France and Spain, the new Asterix album, the growth in Partworks and Mobile Games and the margin improvement plans, particularly in the English-speaking countries.
Lagardère Publishing’s eight-pronged strategy is unchanged:

constant search for growth opportunities through value-creating acquisitions needed to keep Lagardère Publishing among the top-ranking publishing groups worldwide, which is an essential advantage conferring extra influence in negotiations with major customers. These acquisitions may also extend to related segments such as Mobile Games and Board Games, in a commitment to reaching consumers who are shifting from books to other sources of entertainment;
spreading risks across a significant number of markets and market segments in order to smooth out the cyclical effects specific to each one;
concentrating acquisitions and new subsidiaries in countries belonging to language areas that offer critical mass in terms of potential markets;
broad editorial independence for publishing subsidiaries, encouraging creativity, rapid responses and team motivation;
active search for international bestsellers able to attract an extensive readership in all markets where the division operates;
management of distribution both as a cost centre and a strategic link in the book value chain, in all the markets where the division operates;
sustained investment in digital technologies so as to better understand and satisfy authors, booksellers and readers;
selective investments in high-growth markets such as Russia and India.

(1) Source: GfK (by value).
(2) Source: Nielsen BookScan.

Lagardère Publishing’s success in the Digital segment is the result of a rigorously implemented strategy seeking to:

continue to digitise all new content and selected past works by formatting files so that they are compatible with all digital platforms in the market;
support as many new digital platforms selling e-books and audiobooks as possible;
strengthen ties between Lagardère Publishing imprints and their authors by offering a comprehensive range of digital services and unrivalled expertise in marketing and advertising online and on social media;
encourage Lagardère Publishing imprints to develop works that are not easily transferable to digital formats (coffee-table books, box sets, partworks, graphic novels, etc.);
fight piracy aggressively and methodically;
offer high-performance, targeted logistics services to attract partners to the Lagardère Publishing ecosystem, thereby maintaining the output and profitability of its distribution infrastructure without assuming any commercial risk or taking an equity stake in their business.

B.1 IN FRANCE
In France, curriculum reform in two high school grades (years 11 and 12) drove higher revenue at Hachette Education and the Alexandre Hatier group, some of whose extra-curricular publications also sold well.
In addition, General Literature also had a good year, led by Le Livre de Poche, which enjoyed strong growth and consolidated its position as the French market leader with, in particular, the release of Guillaume Musso’s La Jeune Fille et la Nuit and Valérie Perrin’s Changer l’eau des fleurs. The year also saw a number of works garner literary awards, including two published by Grasset: Civilizations by Laurent Binet (Grand Prix du roman de l’Académie française) and Les Grands Cerfs by Claudie Hunzinger (Prix Décembre). As well, Stock won no less than three prizes: the Prix Médicis for La Tentation by Luc Lang; the Prix Femina Essai for Giono, furioso by Emmanuelle Lambert; and the Prix Giono for La Part du fils by Jean-Luc Coatalem.
Lastly, in Illustrated Books, the year was marked by the success of the new Asterix album, La Fille de Vercingétorix, and the robust performance at Hachette Pratique in children’s books and licensing.

B.2 OUTSIDE FRANCE
United States
In an American book market shaped by a slight 1.1% decline in the print segment but lifted by the spectacular growth in audiobook sales for the fifth year in a row, Hachette Book Group (HBG) reported revenue unchanged for the year.
This stability followed on from a strong performance in 2018, when HBG had the highest percentage of best-sellers per total number of titles published, including the year’s best-selling novel, The President is Missing, by Bill Clinton and James Patterson.
The year 2019 saw the market success of books by Malcolm Gladwell (Talking to Strangers), Ronan Farrow (Catch and Kill) and Andrzej Sapkowski, whose The Witcher saga published by Orbit Books was developed into a Netflix series.En outre, les livres politiques de tous bords ont également connu un vif succès, qu’il s’agisse du livre anonyme consacré au fonctionnement de la Maison Blanche (A Warning) ou du livre de Donald Trump Jr. (Triggered).
In addition, political books of all stripes remained highly popular, from the anonymously written exposé of the White House’s inner workings (A Warning) to Donald Trump Jr.’s Triggered.
Lastly, audiobooks pursued their spectacular growth, gaining 22% in 2019, while e-book sales contracted slightly.

United Kingdom and the Commonwealth
In the United Kingdom, 108 Hachette UK titles made it into The Sunday Times bestseller list, including eight at number one. Among the most prominent were Tall Tales and Wee Stories: The Best of Billy Connolly, by Billy Connolly; In a House of Lies, by Ian Rankin; and The Fast 800, by Michael Mosley.
The year’s performance was once again impelled by e-book and audio formats, with a slight 1% decline in e-books and a 31% surge in downloadable audiobook sales.
However, Trade revenue shrank somewhat after an exceptional year in 2018, which saw two J.K. Rowling titles and the massive success of Michael Wolff’s Fire and Fury. As a result, Hachette UK lost a 0.3-point sliver of share in a market up 2.4%.
In addition, while the Education business edged its market share up to 22.9% from 22.6% in 2018, it failed to offset the contraction in the British textbook market.
Lastly, the new Hachette UK distribution centre in Didcot was rated “Very Good” in compliance with the Building Research Establishment Environmental Assessment Method (BREEAM) used to assess a building’s environmental performance.

Spain and Latin America
With 3,269 new titles published in 2019, Hachette España once again demonstrated its expertise in bespoke textbook publishing for an extremely fragmented market, in which each of the 17 regions exercises broad sovereignty over textbook language and content.
The cycle of curriculum reform initiated by the Organic Law for Improvement of the Quality of Education (Ley orgánica para la mejora de la calidad educativa) was completed, and changes of government, at both the national and regional level, compounded by budgetary constraints in the regions, led to the questioning of several programmes and generated something of a wait-and-see attitude among the public authorities.
Nevertheless, in 2019, Hachette España capitalised on the renewal of curricula in six primary grades in Andalusia, where it consolidated its market leadership, and the introduction of a free textbook programme in Madrid.
In General Literature, Grupo Anaya’s bestsellers were El guardián entre el centeno by J.D. Salinger; Circé by Madeline Miller; and El naufragio de las civilizaciones by Amin Maalouf. The Trade division also benefited from strong sales of the new Asterix album.
In Latin America, Larousse Mexico and Patria suffered from a decline in government sales, which was offset by the success of RED Larousse in Mexican private schools.
As a result, revenue in the Spain/Latin America region rose by 10.3% like-for-like in 2019.

Partworks
Partworks maintained their impressive growth trajectory, enabling Lagardère Publishing to consolidate its global market leadership(1), thanks in large part to 92 successful launches in 36 countries, such as Japan, Germany and France.

(1) Source: internal estimates.

B.3 OBJECTIVES AND ACHIEVEMENTS IN 2019
Lagardère Publishing was looking forward to a year of growth in 2019 after seeing a decline in revenue and recurring operating profit during a challenging 2018.
This anticipation was indeed borne out, with the strongest organic growth since 2009 lifting recurring operating profit by nearly €20 million or 10%.
Among the reasons for satisfaction was the steady growth in Hachette Book Group margins despite flat revenue for the year. Hachette UK also improved its profitability, despite lower revenue and Brexit-related economic tensions.
Partworks, where the division is world leader, also demonstrated the resilience of their business model.
Lastly, the merit of the acquisition of mobile game start-ups in 2017 and 2018 was clearly reflected in those companies’ average growth of more than 50% in 2019.
Hachette Livre also successfully entered the French board game market by acquiring publisher Gigamic and distributor Blackrock Games, both of which are expanding, and by creating two new design studios (Studio H and Funnyfox).

C) OUTLOOK
In 2020, Lagardère Publishing expects to see more modest growth, mainly because the high school reform program will impact only one grade instead of two in 2019.
In addition, 2020 will be a year “without Asterix”.
In this environment, Lagardère Publishing will pursue its strategy of diversifying into mobile and board games, which are enjoying strong growth with a business model that is very similar to book publishing. The division will also continue to make targeted acquisitions in its core publishing business, as was the case in January 2020 with the purchase of a majority stake in Le Livre Scolaire in France.
Lastly, as part of the strategy defined for the Group by Arnaud Lagardère, Lagardère Publishing plans to position itself for the potential acquisition of an English-language publisher – yet to be identified – to increase its weight in that linguistic market, where a large part of the economic future of global publishing is being played out.

1.4.2 LAGARDÈRE TRAVEL RETAIL

A) PRINCIPAL ACTIVITIES AND MAIN MARKETS

With operations in 39 countries and on five continents, Lagardère Travel Retail has been a pure player and global leader in Travel Retail since the sale of its distribution activities in 2017.
At the end of 2019, Lagardère Travel Retail operated a total of 4,832 stores. The geographic breakdown is as follows: 3,525 in Europe, Middle East and Africa, 471 in Asia-Pacific and 836 in North America.
Lagardère Travel Retail, whose strategy is to become the leading travel retail and foodservice operator for passengers, and the preferred partner for licensors in every market segment, operates in transit areas and concessions in three business segments:

Travel Essentials ;
Duty Free & Fashion ;
Foodservice.

And in four geographies:

France ;
EMEA, which covers Europe other than France and business developments in the Middle East and Africa;
ASPAC, which covers the Asia-Pacific region;
North America, which covers the retail businesses in Canada and the United States.

Travel Retail is one of the most attractive niches in retailing along with e-commerce. In the past few years, the market has undergone profound change, globalising, integrating, consolidating and becoming more sophisticated.
Lagardère Travel Retail is stepping up its expansion in this segment by:

leveraging its current positions to increase effectiveness and brand awareness;
expanding its concepts and commercial offerings in all markets;
building on a unique competitive positioning through its expertise in three business segments;
intensifying its organic growth, particularly in the most dynamic markets, led by business development and contract renewals. Compelling examples in 2019 include:
- In France :
  - opening of the new Orly 3 Terminal, with the Travel Essentials and Duty Free businesses, as well as the renovation of Terminal 2E Hall L (Core Duty Free and Fashion) at Paris‑Charles‑de‑Gaulle airport;
  - opening of the Marks & Spencer and Fnac stores at the Paris-Montparnasse train station;
  - opening of the Relay store at the Reunion Island airport;
  - concession wins in hospitals in Clermont Ferrand, Nantes and Pontoise.
- In EMEA :
  - award of a concession to operate new duty free stores dedicated to diplomats in Geneva, Switzerland;
  - concession wins in all three business segments in Italy, at the Rome, Brindisi, Bologna, Florence, Bari, Naples, Catania, Cagliari and other airports;
  - renewal of the Travel Essentials and Duty Free concessions at the Prague airport in the Czech Republic;
  - renewal of the master concession at the Modlin airport in Poland;
  - renewal of the concession to operate the Smullers restaurants in nearly 30 railway stations in the Netherlands.
- In Asia-Pacific:
  - award of the Fashion and Foodservice concessions at the Shanghai-Pudong and Beijing-Daxing airports in China, as well as the opening of several points of sale and restaurants at the Hong Kong airport (including the first airport Monocle store).
- In North America:
  - new concessions in New Orleans, Vancouver, Cincinnati and Dallas in Travel Essentials and in Detroit, Dallas, Denver and Austin in Foodservice.
faster, acquisition-led growth led by the recent purchases of International Duty Free (Belgium’s leading travel retailer) in September 2019 and of foodservice operations in the Czech Republic in May 2019.

In a still consolidating market, Lagardère Travel Retail is now the fourth-largest travel retail operator⁽¹⁾, (second-largest in airport travel retail) and the biggest operating across the three business segments (Travel Essentials, Duty Free & Fashion and Foodservice). As such, Lagardère Travel Retail:

runs the largest international network of stores dedicated to Travel Essentials;
is the European leader⁽¹⁾, in the Travel Retail Fashion segment;
is the fourth-largest⁽¹⁾, operator in airport Core Duty Free;
is the fourth-largest⁽¹⁾, Foodservice operator in transit areas worldwide.

The network includes the following stores operated:

under its own banners:
- either internationally, with Relay, Hubiz, 1Minute, Hub Convenience, Discover, Tech2go, Aelia Duty Free, The Fashion Gallery, The Fashion Place, Eye Love, So Chocolate, Bread&Co., Hello!, So! Coffee, Trib’s, Vino Volo, Natoo, etc.,
- or with a strong local identity, with the Sydney Opera House, BuY Paris Duty Free and Frankfurter Markthalle;
under franchise or licence, with retail partners such as TripAdvisor, Fnac, iStore, Marks & Spencer, Hermès, Victoria’s Secret, Nespresso, Costa Coffee, Burger King, Dean & DeLuca, Eric Kayser and Paul.

a. World leader⁽¹⁾ in Travel Essentials
With the Relay, Hubiz, 1Minute and Hub Convenience stores, as well as local banners, Lagardère Travel Retail currently runs the world’s largest international network of travel essentials stores located in transit areas, including in nearly 160 international airports. The segment counted 2,956 stores worldwide at the end of 2019.
Of these stores, 296 are operated by a network of franchisees in countries such as Belgium, Hungary, Poland, Romania, Turkey, China, India, Pakistan, the United Arab Emirates and Cambodia.
Carrying a full range of travel essentials, the new Relay concept is designed to offer every traveller a suitable selection of what they need to facilitate and enhance their journey. The merchandise offering is now built around five major product categories: food, reading materials, gifts and souvenirs, travel items and children.
In train stations and airports, Lagardère Travel Retail also operates a large number of stores selling electronic devices under the Fnac, iStore, Tech2go and eSavvy names.
Lastly, Lagardère Travel Retail is a souvenir store operator with the international Discover concept, as well as Air de Paris and other local brands related to concessions (Eiffel Tower, Sydney Opera House, etc.).
Competition in the sale of commodity products in transit areas, which was previously local, is becoming global. Dufry, for example, operates in 65 countries; WH Smith in 30; HMSHost (Autogrill) is primarily present in North America and 20 other countries, SSP has operations in 33 countries, Areas in 13; and Valora operates mainly in Germany, Austria, Switzerland, Luxembourg and the Netherlands.

b. A top player worldwide in Duty Free & Fashion
Lagardère Travel Retail also designs and operates stores that cover the classic categories of alcohol, tobacco, perfume, cosmetics and gastronomy, as well as specialised concepts:

under its own store names including Aelia Duty Free, BuY Paris Duty Free, So Chocolate, The Fashion Gallery, etc.;
or through licences for international brands including Hermès, Longchamp, Hugo Boss, Ferragamo, Victoria’s Secret, etc.

In recent years, Lagardère Travel Retail has become the European leader⁽¹⁾ in transit area Fashion sales, led by successful bids in Geneva, Switzerland, the Netherlands, the Avancorpo terminal at the Rome-Fiumicino airport in Italy, the Vienna airport in Austria and the Toulouse airport in France. The segment counted 731 stores worldwide at the end of 2019.
Lagardère Travel Retail also handles onboard sales of high-end products on behalf of certain airlines, including Air France, Alitalia and Iberia, in partnership with the Servair group (acquired by Gategroup in 2016).
Aside from Lagardère Travel Retail, the leading duty-free and speciality retailers in transit locations are Dufry, DFS (LVMH), Lotte and Heinemann.

c. Fast-growing operator in Foodservice
Lagardère Travel Retail operates 1,145 Foodservice points of sale (including 13 operated by a network of franchisees) in 23 countries, including France, the Czech Republic, Poland, Italy, Austria, Iceland, North America, Gabon and Slovakia, as well as the Netherlands following the recent acquisition of Smullers:

under its own store names, with So! Coffee, Bread&Co., Trib’s, Vino Volo, deCanto, Natoo, Smullers, etc.;
through concepts tailored to meet the specific needs of licensors and locations: La Plage and Pan Garni at Nice-Côte d’Azur airport and Teppan at Paris-Charles-de-Gaulle airport in partnership with Thierry Marx (France), Loksins Bar at Keflavik airport (Iceland), Bar Symon at the Pittsburgh airport (United States), etc.;
under franchise agreements with major international brands including Starbucks, Costa Coffee, Prêt à Manger, Burger King, Ajisen Ramen, Eric Kayser, Paul, Dean & DeLuca, etc., or local brands such as SumoSalad, Java U, etc.

As such, this broad brand portfolio, balanced between brands designed specifically for Travel Retail and those operated through partnerships with leading brands offering unique and differentiating customised concepts, allows Lagardère Travel Retail to cover all the specific needs of its B2B and B2C customers with diversified and innovative product offerings.
The operational excellence demonstrated by Lagardère Travel Retail in Foodservice, together with a customised approach for each platform and skilful responses to tenders are major assets when bidding for new concessions in an environment where licensors worldwide are constantly raising the bar.

(1) Source: Moodie Report; Lagardère Travel Retail Strategy Department; company annual reports. The Moodie Report website (www.moodiereport.com) regularly publishes changes in the market share of Travel Retail operators and is recognised as a benchmark in the industry.

B) OPERATIONS DURING 2019
Contribution to consolidated revenue in 2019: €4,264 million (versus €3,673 million in 2018)

Breakdown of revenue by activity

	2019	2018
Travel Essentials	37,8 %	42,0 %
Duty Free & Fashion	39,7 %	40,4 %
Foodservice	22,5 %	17,6 %
Total	100 %	100 %

Breakdown of revenue by geographic area (Travel Retail)

	2019	2018
France	22,5 %	24,3 %
Europe (excluding France), Middle East and Africa	40,6 %	41,9 %
North America	25,0 %	21,1 %
Asia-Pacific	11,9 %	12,7 %
Total	100 %	100 %

Lagardère Travel Retail’s revenue increased by 16.1% as reported and by 6.1% like-for-like in 2019.
The Travel Essentials business accounted for 37.8% of the total for the year, versus 42.0% in 2018, primarily due to firm growth in the Foodservice business. Travel Essentials revenue was buoyed by the strong performance in the existing network, mainly in the EMEA region and North America.
Duty Free & Fashion’s relative contribution to the revenue stream remained stable in 2019, reflecting the steady award of new concessions and the good performance from the existing network. It also reflected the additional revenue from IDF since its acquisition on 20 September 2019.
Lastly, the Foodservice business represented 22.5% of revenue in 2019, compared with 17.6% in 2018, due to the full-year impact of the HBF acquisition in North America (completed in November 2018), the acquisitions in the Czech Republic and the Netherlands (Smullers), and the good performance in the existing network in every region.
All of the regions experienced significant growth in absolute terms. North America’s increased contribution to the geographic revenue stream reflected the full-year impact of the HBF acquisition. The 2019 market environment was characterised by a slowdown in the growth in air traffic in every region.
In addition, pace of business growth was dampened in a number of regions by such factors as currency volatility (especially in the yuan, the rouble and the US dollar), the uncertainty surrounding Brexit, strikes and the yellow vest movement in France, protests and demonstrations in Hong Kong, and the continuing decline in demand for print media.
Slowing growth in air traffic
After rising 4.2% in 2012, 3.9% in 2013, 4.9% in 2014, 6.1% in 2015, 6.5% in 2016, 6.6% in 2017 and 6.3% in 2018, this past year saw air traffic growth slow to 2.9% worldwide, of which: 3.3% in Europe (6.3% in 2018), 3.1% in North America (5.2% in 2018) and 1.8% in Asia-Pacific (8% in 2018)⁽¹⁾.
Further decline in print media revenue
The decline in the press market continued, with volumes down between 5% and 10% depending on the country. Lower volumes have been partially offset by higher prices.
In this environment, growth in Lagardère Travel Retail results was attributable to:

network expansion (through organic and external growth) and the modernisation of stores;
the ongoing strategy of modulating concepts and lines in favour of products enjoying growth (Duty Free, Foodservice and convenience stores, for example);
growth in air traffic;
the development of synergies and the continuous improvement in operational efficiency, which are considerably widening margins while offsetting the increase in rents (more favourable purchasing terms, optimised sales and cost discipline enabled by the worldwide Target Operating Model programme, converging information systems, lower investment costs, etc.).

(1) Source: ACI, at end-November 2019 and end-December 2018.

B.1 FRANCE
In France, aggregate managed revenue⁽²⁾ from the three segments was up 6.3% compared with 2018, with gains in every segment.
Beginning on 5 December, the year saw major social unrest in France, with non-stop strikes that had a serious impact on the Foodservice and Travel Essentials operations in mainline and urban train stations.
Despite this unfavourable environment, the Travel Essentials network delivered growth of 4.2%, while the Foodservice segment increased managed revenue by 7.8%, thanks to the start-up of points of sale at Toulouse airport (December 2018) and of new hospital concessions in Nantes and Clermont-Ferrand (2019). In addition, Food & Beverage products continued to increase their share of managed revenue during the year.
Duty Free & Fashion managed revenue climbed 7.6%, lifted by the 2.6% increase in air traffic in the Paris airports, the opening of the new Orly 3 Terminal, the renovation of Core Duty Free and Fashion operations in Terminal 2E Hall L at Paris-Charles-de-Gaulle airport, and the full-year contribution from the newly integrated Maison du Chocolat boutiques. Regional platforms also benefited from growth in air traffic, with gains of 13.0% at Marseille-Provence, 6.6% at Lyon-Saint-Exupéry, 4.8% at Nice-Côte d’Azur and 10.0% at Bordeaux.

B.2 EUROPE, MIDDLE EAST AND AFRICA (EMEA – EXCLUDING FRANCE
In Italy, revenue rose by 8.8% as reported and by 7.8% like-for-like, mainly due to very robust 11.2% growth in Duty Free, particularly in Rome (wide range of sales initiatives and favourable impact of the passenger mix on average spend), but also in Venice (full-year impact of store upgrades) and in regional airports (rising traffic). Foodservices and Travel Essentials reported like-for-like growth of 2.3% and 3.1% for the year. Revenue gains were also driven by sustained network expansion following the award of a large number of concessions in 2019 and 2018 in all three business segments.
In Poland, consolidated revenue held steady over the year, despite the loss of contracts at Warsaw airport’s Terminal 2 in June 2018. Like-for-like growth came in at a solid 8.7%, primarily thanks to the 11% and 8.4% gains, respectively, in Duty Free and Travel Essentials. The strong performance by the Foodservice business, up 6.5% as reported, reflected the 5% like-for-like increase in revenue and the large number of store openings.
In the Czech Republic, the 4.8% increase in revenue in 2019 was led by the robust 14.1% momentum in Foodservice, which in turn was fuelled by the 8% gain from an acquisition carried out in May 2019. Travel Essentials and Duty Free revenue was stable year-on-year, reflecting a significant decline in average spend per passenger due to unfavourable changes in currency rates and the passenger mix, despite the sharp increase in traffic at the Prague airport.
The rest of the region reported growth of 21%, supported by the acquisition of IDF in Belgium and the full-year impact of The Daily DXB foodservice concession in Dubai, which opened in September 2018. Other noteworthy developments include:

revenue in the Netherlands climbed 41.3% on the acquisition of the Smullers brand and start-up of the Foodservice operations. Fashion revenue held firm year-on-year thanks to the solid momentum of the Gucci and Hermès brands, which offset the reduction in retail space at the main Schiphol Airport store (Amsterdam);
in Romania, the 19.9% increase in revenue was led by the 14.0% growth in the existing network and sustained strong sales of tobacco products;
in Bulgaria, revenue rose by 15.2% thanks to the excellent 10.2% gain in the existing network;
business in Iceland fell 23% following a similar drop in air traffic after WOW Air, the country’s second largest airline, went bankrupt in late March 2019;
in Germany, revenue contracted by 2.7% over the year. The Travel Essentials business saw a 1.7% decrease, attributable to the decline in writing products and the unfavourable impact after inbound Berlin flights were rerouted between Schönefeld and Tegel airports. The temporary closure of the food court in the Frankfurt railway station, from November 2018 to May 2019 due to water damage, dragged Foodservice revenue down by 9.6% for the year.

B.3 ASIA-PACIFIC
In the Pacific, revenue eased back by 1.5% in 2019. In addition to the economic slowdown in Australia, the region suffered from cooling growth in air traffic, combined with an unfavourable passenger mix as demand shifted to domestic fliers from Chinese and other international passengers. In this environment, the Travel Essentials business, which is still exposed to the decline in writing product sales, turned in a limited 1.9% contraction (at constant scope of consolidation and exchange rates). Revenue for the year was also dampened by the closure of several stores in Perth, Brisbane and Melbourne. Lastly, Duty Free reported an 11.2% increase in sales, led by the full-year impact of the Christchurch airport Duty Free stores (opened in late November 2018) and the 3.1% growth in Duty Free sales at the Auckland airport.
In Asia, revenue continued to expand at a sustained pace, gaining 16.8% at constant exchange rates over the year. Sales in Hong Kong, for example, rose by 20.2%, led by the wholesale business set up in late 2017. Albeit low-margin, its revenue, derived from the supply of certain merchandise to the joint venture (with China Duty Free Group) that operates the airport’s alcohol and tobacco concession, rose by 13% in 2019. The Retail business also delivered solid growth of 37%, despite the social unrest that has severely disrupted demand since July 2019. This performance was driven by the opening of new concepts, such as Monocle (Travel Essentials), Wolfgang Puck Kitchen and Bless (Foodservice), as well as by the expansion of the Fashion store network (seven openings since August 2019). In addition, operations in China maintained their robust momentum with revenue surging 41.8%, notably in the Fashion segment, led by the openings of the Shanghai-Pudong, Beijing-Daxing, Zhengzhou and Xinzheng platforms, the full-year impact of the 2018 openings (Shanghai Hongqiao, Beijing Capital, etc.) and sustained growth in traffic on existing platforms (Shenzhen, etc.).

(2) Managed revenue corresponds to total revenue from business operations, regardless of Lagardère Travel Retail’s percentage of control or ownership.

B.4 NORTH AMERICA
Revenue in North America rose by 30.3% as reported and by 3.3% like-for-like in 2019. Like-for-like growth was attributable to the strong performance by the Travel Essentials business (up 1.7%), due in large part to the airports in Charlotte (up 13.5%), Phoenix (up 9.9%), Southwest Florida (up 10.4%) and Detroit (up 6.5%). The Foodservice business also delivered a solid performance, with like-for-like growth of 18.2% mainly driven by the airports in Austin (up 42%), Dallas (up 55%) and Denver (up 21%). In addition, HBF and Vino Volo (acquired in November 2018) were major contributors to the 231% reported increase in Foodservice revenue and the 28% growth in the entire North American region. On the other hand, Duty Free & Fashion saw a 1.3% decline due to closures in Pittsburgh and other cities. Lastly, revenue from the international Travel Essentials and Fashion platforms was impacted by the decline in Chinese passenger traffic caused by the trade dispute with the United States.
Business in North America continued to expand with the opening of five new Travel Essentials stores in New Orleans, four at the Vancouver airport, five in Cincinnati and three in Dallas. In the Foodservice segment, restaurants were opened in Detroit, Denver, Dallas and Austin.
In all, Travel Essentials accounted for 59% of total revenue in North America in 2019, Duty Free & Fashion 9% and Foodservice 32%.

B.5 OBJECTIVES AND ACHIEVEMENTS IN 2019
The first objective for 2019 was to maintain the growth dynamic to capitalise on significant opportunities for expansion. In this regard, the year’s most noteworthy achievements were:

the acquisition in September of International Duty Free, the travel retail market leader in Belgium, with operations in Luxembourg and Kenya as well;
the acquisition in May of Autogrill’s Foodservice assets in the Czech Republic;
the opening in April of the Duty Free and Foodservice platform at Léon-Mba airport in Libreville, Gabon);
the renewal in early February of the concession to operate Smullers restaurants in nearly 30 railway stations in the Netherlands;
numerous concession wins in all regions, particularly North America, China, Hong Kong, Italy, Spain and Romania.

The second objective concerned the integration of new acquisitions and concessions (HBF in the United States, Smullers railway station stores in the Netherlands, Christchurch in New Zealand, etc.). The outcomes of this process were very satisfactory, and the performance delivered was in line with or exceeded expectations.
The third objective concerned the sustained enhancement of the product mix in Travel Essentials by rolling out the new Relay concept in every Lagardère Travel Retail host country. To meet this objective, the division focused its efforts on:

continuing to roll out, in several countries, the new Relay concept bringing the five main categories of travel essentials (food, reading materials, gifts and souvenirs, travel items and children) together under one roof;
modernising concepts to boost revenue.

The fourth objective concerned the acceleration of innovation in the division’s products and services. In this regard, Moodies honoured Lagardère Travel Retail in 2019 with the Best Employee Engagement Award for its Innovation Booster programme, which supports the emergence of new projects to address a country’s needs by taking an intrapreneurial or innovation-driven approach (working with start-ups, universities, etc.). In addition, Lagardère Travel Retail has driven initiatives such as Click & Collect and Shop & Collect to improve the quality and efficiency of the in-store customer journey. These services let customers either order online and pick up their purchases at the store, or buy in-store and pick up their purchases later (after their trip, for example).
The fifth objective concerned the development of the Duty Free & Fashion and Foodservice segments:

in 2019, sales rose by 14% in the Duty Free & Fashion segment, reflecting a strong performance by existing networks in every region and new concession awards in France, Austria, the Middle East, New Zealand, China and Hong Kong. The business was also strengthened by the September acquisition of IDF;
sales in the Foodservice segment soared 48%, spurred by the acquisitions of Autogrill in the Czech Republic and Smullers in the Netherlands, the full-year impact of Hojeij Branded Foods (acquired in 2018), the numerous concessions won in every region, and the good performance in the existing networks in France, Italy, Poland and Austria.

The sixth objective was to take initiatives to improve profitability and cash generation. The division implemented a series of measures enabling it to track performance on a more granular basis, while maintaining the pace of improvement in its working capital requirement. It also optimised its cash management and successfully issued several tenders for banking services. Lastly, the acquisition of HBF in 2018 supported the mutually beneficial sharing of best practices with the Paradies Lagardère teams in 2019 and enhanced their operational excellence.

C) OUTLOOK
Lagardère Travel Retail’s 2020 trading outlook hinges primarily on changes in airport traffic and currencies, as well as broader economic and geopolitical trends.
Objectives are focused on:

maintaining the pace of expansion so as to benefit from significant growth opportunities;
integrating new acquisitions and concessions (acquiring IDF in Belgium, completing the integration of HBF in the United States, opening the concession in Dubai, etc.);
securing the renewal of key contracts;
driving faster innovation in delivered products and services, and sharpening the focus on CSR issues;
l’accélération de l’innovation dans les produits et services fournis, et une attention accrue sur les thématiques de RSE ;
strengthening operational excellence and improving margins;
deploying initiatives to optimise cash management and financing requirements.

Lagardère Travel Retail, which is acknowledged for its leadership positions in its business lines, its operational discipline, its performance culture and its international brands, has many competitive strengths to help it meet these objectives.

1.4.3 OTHER ACTIVITIES

1.4.3.1 LAGARDÈRE NEWS

The following comments describe the position of Lagardère News based on its 2019 scope and business developments. Lagardère News comprises Paris Match, Le Journal du Dimanche, advertising sales brokerage, licensing management for the Elle brand, Europe 1 and the French music radio networks (Virgin Radio and RFM).

A) PRINCIPAL ACTIVITIES AND MAIN MARKETS
With three radio stations (Europe 1, Virgin Radio, RFM), two print media (Paris Match, Le Journal du Dimanche) and a global media imprint (Elle), Lagardère News brings together 7.2 million listeners⁽¹⁾ every day, more than 4.5 million readers⁽²⁾ every week and nearly 12 million unique visitors⁽³⁾ to its digital platforms.

A.1 MAGAZINE PUBLISHING
Following the sale of most of its magazine titles to Czech Media Invest in February 2019, Lagardère News now publishes Paris Match magazine and Le Journal du Dimanche weekly newspaper.
With 13.5 million readers every week⁽¹⁾ across its various formats, Paris Match is France’s leading news magazine, as measured by both audience and circulation. It enjoys a unique market positioning, combining the professionalism of news weeklies, the excitement of photo magazines and stunning coverage of news, culture, lifestyles and people. It can assign seasoned journalists to get to the heart of the world’s most spectacular events, while offering intimate insights into the lives of France’s favourite newsmakers and celebrities.
Every Sunday, Le Journal du Dimanche reaches 3.8 million readers, including France’s top opinion leaders, in a variety of formats. With its scoops and exclusive interviews with political, business and cultural leaders, as well as its hundreds of citations every week in other media, it is the French weekend newspaper of record and one of the country’s most influential newspapers in the fields of politics, business and culture (film and book reviews). Revenue is derived primarily from print and digital advertising sales, magazine distribution and diversification.

A.2 RADIO
Following divestment of the international radio stations in 2018, Radio revenues are now generated mainly in France. Radio station revenues are largely made up of radio and digital advertising revenue, which depend greatly on audience ratings and the state of the advertising market.
With its three national networks, Lagardère News is a major player in the French radio broadcasting market.

Europe 1
Europe 1, France’s benchmark general-interest radio station, offers high-quality programmes for the general public, with 3.2 million daily listeners⁽²⁾.

Virgin Radio
Virgin Radio is a music station for 25 to 34-year-olds, blending creative programming and a dynamic, interactive format. Its mix of well-known pop, rock and electro hits and new tracks reaches 2.1 million listeners a day⁽²⁾.

RFM
Every day, RFM offers 2.1 million listeners⁽²⁾ the very best of music in a general interest, family-friendly format, featuring a rich, distinctive blend of pop, disco, funk and rock.

A.3 ELLE INTERNATIONAL
Much more than just the leading fashion and lifestyle media brand, Elle International is the world’s number one women’s media network, with 33 million readers and 100 million unique visitors per month on 55 digital platforms (websites and social media).
It has no fewer than 78 international editions, including 45 Elle and 25 Elle Décoration, licensed in 45 countries with partners including Hearst, Burda and Aller.
And it also has a non-media licensing business (fashion, beauty, decoration, services, etc.) working with 140 licensees in 80 countries.

A.4 ADVERTISING SALES BROKERAGE
In 2019, Lagardère Publicité News marketed a rich and varied media offering and smart media solutions closely matched to the needs of advertisers, media agencies and communications consultants.
It brokers advertising sales for five of the Group’s iconic and complementary benchmark brands firmly rooted in the daily lives of French people for news, exclusive content and entertainment: Europe 1, Virgin Radio, RFM, Le Journal du Dimanche and Paris Match.
Lagardère Publicité News draws on the full extent of its business expertise, innovative media solutions and the power of its brands to amplify conventional media campaigns or design tailor-made communication solutions (media and non-media) aimed at qualified audiences.
Its offer spans radio, the press, digital formats, experiences and events to meet the specific needs of advertisers, media agencies and communications consultants:

integrated studio;
consulting in editorial strategy, design and creation of original content;
360-degree offers.

Lagardère Publicité News is a powerful name capable of reaching 31 million people, or 58% of the French population, over a three‑week period⁽³⁾.

(1) Source: ACPM Brand One Next Global 2019 V1.
(2) Source: Médiamétrie 126,000 Radio; 13 years and older; Monday-Friday, 5 a.m.-midnight; November-December 2019; cumulative audience.
(3) Source: 2019 Cross Media survey based on March 2019 data; Affimétrie, ACPM and Médiamétrie, base 15 years and older; three weeks exposure; radio, print, fixed, mobile and tablet Internet; Lagardère Publicité News brands: Europe 1, RFM, Virgin Radio, Paris Match, Le Journal du Dimanche, Routard.com, excluding unreleased FG and Oui FM results.

B) OPERATIONS DURING 2019
Contribution to consolidated revenue in 2019: €236 million (versus €257 million in 2018 restated for IFRS 16).
The contribution to consolidated revenue corresponds to the Lagardère News scope, as described in section 1.4.3.1 above.

Breakdown of revenue by activity

	2019	2018 proforma
Magazine Publishing (including advertising sales brokerage)	33,8 %	33,4 %
Radio (including advertising sales brokerage)	46,4 %	48,7 %
Other (essentially Elle International)	19,8 %	17,9 %
Total	100 %	100 %

Breakdown of revenue by geographic area

	2019	2018 proforma
France	76,0 %	79,6 %
International	24,0 %	20,4 %
Total	100 %	100 %

B.1 FRANCE MAGAZINE PUBLISHING
Following the sale of most of its magazine titles to Czech Media Invest in February 2019, Lagardère News’ France Magazine Publishing business now comprises Paris Match and Le Journal du Dimanche.
The celebration of Paris Match’s 70^th anniversary in 2019 offered an opportunity to reaffirm the values expressed in its slogan: “the weight of words, the shock of photos”. Today the magazine has become a 360° media brand with:

the development of special issues;
the creation of a digital version on a Snapchat Discover page;
the development of web series (seven in 2019);
the organisation of conference cruises;
events such as the 16^th annual Student Photojournalism Grand Prize and the third and fourth Rendez-vous des Grands Aventuriers;
des émissions et podcasts en synergies avec Europe 1 tels que les nouveaux podcasts « Paris Match Stories » ;
broadcasts and podcasts in synergy with Europe 1, such as the new “Paris Match Stories” podcasts;
monetising the outstanding Paris Match photo library, with the launch of an online store in summer 2019;
producing video films with the Match Prod production teams.

In an environment characterised by extreme pressure on per-issue sales, circulation revenue declined by 12.6% like-for-like in 2019. This followed a 3.6% contraction in 2018, when sales were supported by highly Paris Match-friendly political and celebrity news.

In 2019, Paris Match maintained its leading position in both per-issue sales and paid circulation in France, with an 8.99% decline from 2018. Competing titles include Télérama, Le Figaro Magazine, M, le magazine du Monde, Le Point, L’Obs, L’Express, Point de Vue and Gala.
Le Journal du Dimanche reported per-issue sales down 9.4% year-on-year, outperforming the 10.5% decline in the daily newspaper market (comprising competitors Libération, Le Monde, Les Échos, L’Équipe, Aujourd’hui en France/Le Parisien and Le Figaro)⁽¹⁾.

On the advertising side, Lagardère News’ two titles outperformed the market as a whole(2).

Paris Match successfully gained 0.8 points of market share from the 14.3% reported in 2018, in a news market down 2% for the year.
Le Journal du Dimanche’s market share edged down 0.1 point in 2019 from the 3.7% posted in 2018, in a market that contracted by 1.3%.

In the digital segment:

In 2019, Paris Match welcomed a total of more than 4.7 million unique visitors to its website every month⁽³⁾, while maintaining an extensive social media presence with 2.8 million followers.
The Journal du Dimanche website attracted a total of 2.1 million unique visitors a month⁽³⁾. Since May 2019, the site has posted a daily newsletter, Le Journal de Demain, at 6:30 pm from Monday to Saturday, in the spirit of the print edition’s editorial promise to give readers a head start on tomorrow’s news. It topped 80,000 subscribers in a just few weeks with a very high 30% open rate.

(1) Source: ACPM, DFP 2018-2019.
(2) Source: Médiamétrie NetRatings; January-December 2019. Paris Match: total excluding miscellaneous advertising, infomedia excluding TV, trade shows and fairs, shows and events. Le Journal du Dimanche: total excluding miscellaneous advertising, legal notices, humanitarian organisations, financial advertising and infomedia excluding TV.
(3) Source: Médiamétrie NetRatings; Global Internet; September 2019.

B.2 RADIO
Europe 1
Key figures:
In 2019, Europe 1 achieved a cumulative audience share of 5.5%⁽¹⁾, down 0.9 percentage points compared with 2018 and 1.7 percentage points compared with 2017.
Europe 1’s audience share was 4.3%⁽¹⁾ in 2019, down 0.8 percentage points compared with 2018 and 1.5 percentage points compared with 2017.
On the commercial targets, Europe 1’s 2019 results were as follows:

2.9% audience share among people aged 25-59⁽²⁾, down 0.5 percentage points compared with 2018 and 1.3 percentage points compared with 2017;
3.9% audience share among upper occupational groups⁽³⁾, down 1.0 percentage points compared with 2018 and 2.0 percentage points compared with 2017.

To restore its historic positioning and influence, Europe 1 was entirely revamped with a new look and feel in September 2019. It is being supported in this process by such in-house talents as Matthieu Belliard, who hosts the morning show, Matthieu Noël in the 4-6 p.m. slot and Sonia Mabrouk for the morning political interview, along with Christophe Hondelatte, Anne Roumanoff, Raphaëlle Duchemin, Émilie Mazoyer and Mélanie Gomez. There are also a number of newcomers like Nathalie Levy or returning stars like Philippe Vandel. In this way, Europe 1 is committed to becoming once more the radio station for a changing world and everyone who is excited to be in it.
This is reflected in a programming schedule that is wide open to the world, as well as more responsible and more sustainable, with shows that re-embrace the station’s four pillars – information, entertainment, culture and storytelling – backed by musical programming resonant with its target audience. More specifically, the station is championing economic innovation, social progress and beneficial technological breakthroughs, as celebrated in such programmes as Raphaëlle Duchemin’s La France bouge, or events like the Trophées de l’avenir Europe 1, which honour researchers, students, entrepreneurs, writers, citizens or elected officials who are actively striving to make a difference by helping to build a sustainable, harmonious society.
Lastly, Europe 1 continued to explore new ways of listening to the radio with the launch, in September 2018, of the Europe 1 Studio label to create original podcast content. So far, eight original programmes have been created, including “3h56”, “Déclic”, “En route avec” and “Les Attaquantes”, which have been listened to 24 million times⁽⁴⁾.

Music radio
Virgin Radio, second most popular music radio in France, in cumulative audience in the 25-49 demographic
In a very anaemic music radio market, Virgin Radio reported a cumulative audience of 4.3% and an audience share of 2.4%⁽⁵⁾, corresponding to 2.1 million daily listeners⁽⁵⁾.
With 1.5 million listeners between the ages of 25 and 49 during the day (5 a.m. to midnight), Virgin Radio ranks second in the world of music radio⁽⁵⁾.
In the morning, Camille Combal’s Virgin Tonic (7-10 a.m.) held both its cumulative audience (2.6%) and audience share (3%) firm in the targeted 13 years old and over demographic. He attracted a total of 1.4 million listeners to his slot every day⁽⁵⁾.
From fifth-ranked in November-December 2018, Virgin Tonic rose in 2019 to France’s third most popular morning show in cumulative audience among the 25-49 age group, all formats combined, and second among music stations⁽⁵⁾.

RFM: improved performance, led by gains in the 35-49 age group
Listened to by 2.1 million people a day, RFM improved both its cumulative audience and audience share over the year, by 98,000 listeners and 0.1 points, respectively⁽⁶⁾.
It also retained the second-highest audience share (3%) in the adult music segment’s 35 and older demographic⁽⁶⁾.
The station’s popularity is also being buoyed by a strong morning line-up, with Élodie Gossuin and Albert Spano in the 6-9:30 a.m. slot helping more than 1.1 million listeners to start the day. During the year, Le Meilleur des Réveils gained 128,000 new listeners, the strongest growth of any French music radio programme⁽⁶⁾.

Changes in Lagardère News’ cumulative radio audience in France are as follows (5 a.m.-midnight; 13 years and older; Monday-Friday):

Cumulative audience %	2013	2014	2015	2016	2017	2018	2019
Europe 1	9,0 %	8,9 %	9,0 %	8,1 %	7,2 %	6,4 %	5,5 %
Virgin Radio	4,3 %	4,2 %	4,7 %	5,0 %	4,8 %	4,5 %	4,3 %
RFM	4,4 %	4,6 %	4,5 %	4,4 %	4,2 %	4,1 %	4,0 %

Source: Médiamétrie 126,000 Radio; 13 years and older; Monday-Friday, 5 a.m.-midnight; January-December; cumulative audience (%).

(1) Source: Médiamétrie 126,000 Radio; 13 years and older; Monday-Friday, 5 a.m.-midnight; January-December 2019; cumulative audience and audience share.
(2) Source: Médiamétrie 126,000 Radio; 25-59 years; Monday-Friday; 5 a.m.-midnight; January-December 2019; audience share.
(3) Source: Médiamétrie 126,000 Radio; upper occupational groups; Monday-Friday; 5 a.m.-midnight; January-December 2019; audience share.
(4) Source: internal data; first season.
(5) Source: Médiamétrie 126,000 Radio; 13 years and older; 25-49 years; average Monday-Friday; 5 a.m.-midnight and 7-10 a.m.; November‑December 2019; cumulative audience, audience share and quarter-hour average.
(6) Source: Médiamétrie 126,000 Radio; 13 years and older; 35 years and older; upper occupational individuals; average Monday-Friday; 5 a.m.‑midnight; November-December 2019; cumulative audience, audience share and time spent listening.

B.3 ELLE INTERNATIONAL
For Elle’s international licensing business, 2019 was shaped by:
In the media segment:

the launch of Elle Décoration in Portugal;
the acquisition of Elle Canada and Elle Québec by KO Média;
the launch of speciality TV channel Elle Fictions in Québec, by V Média;
the acquisition of Elle Middle East by Patrimony Media;
the signature of a licensing agreement to launch Elle in Brazil in 2020;
sustained expansion in the events business, with Elle Active (Japan, Italy, China, etc.), Elle Weekender UK, Elle Women in Tech (United States and Norway), Elle International Beauty Awards, Elle Deco International Design Awards, etc.

In the non-media segment

the opening of two Elle Cafés, one in Shanghai, China, in a book store in Xintiandi Square, and the other in Bangkok, Thailand, in the Siam Takashimaya Department Store;
the launch of the Elle Homme line in China;
the worldwide launch of Elle watches with the Fossil Group;
the launch of Elle Sport and Elle Kids Europe;
the opening of the first Elle Decor Café pop-up in the Plaza Hotel in New York City, NY, United States.

B.4 OBJECTIVES AND ACHIEVEMENTS IN 2019
In 2019, Lagardère News, comprising Europe 1, Virgin Radio, RFM, Paris Match, Le Journal du Dimanche, the advertising sales brokerage and the Elle brand licensing business, endeavoured to structure and strengthen its news-related businesses, supported by its strong brands, high-quality content and independent editorial teams.
Over the year, Lagardère News also gradually structured its support functions, which were created when the Lagardère Active organisation was spun off into separate, self-managing divisions. Lastly, Lagardère News remained highly focused on measures designed to contain expenses in order to improve its overall operating performance.

C) OUTLOOK
Lagardère News’ three core print media, radio and brand licensing businesses have a future to build together, in a shared commitment to becoming a boutique source of important news, respected as agile, disciplined and reliable, run like a start-up but with iconic brands to produce highly differentiated content as flexibly and efficiently as possible.

1.4.3.2 LAGARDÈRE LIVE ENTERTAINMENT

A) PRINCIPAL ACTIVITIES AND MAIN MARKETS
Since its creation in 2011, Lagardère Live Entertainment (LLE) has leveraged its expertise to grow two strategically related businesses:

venue operation and management;
production of live shows and concerts.

With its unrivalled capabilities and peerless infrastructure, Lagardère Live Entertainment now comprises seven companies operating in France:

Lagardère Live Entertainment (holding company);
L Productions (concert and show production);
Théâtre des Folies Bergère;
Casino de Paris ;
Bataclan ;
Arkéa Arena ;
Arena du Pays d’Aix.

In 2019, Lagardère Live Entertainment and its subsidiaries employed the full-time equivalent of 115 people across France (including occasional performers).

A.1 PRODUCTION OF LIVE SHOWS AND CONCERTS
Since its founding, Lagardère Live Entertainment has steadily expanded its artist roster. Alongside such established stars as Florent Pagny, Matthieu Chedid (-M-) and Jean-Louis Aubert, it has gradually built up an A-list of emerging artists with a new generation of talents like Leonie and Laurie Darmon.
Each strategy is different and intrinsic to the artist, which is why Lagardère Live Entertainment has to guarantee the excellence of all its artist services, in marketing, advertising, digital strategy, ticketing, technical support, budgeting, booking, etc.
At the same time, Lagardère Live Entertainment’s success has been built on its experience in producing musical shows, with blockbuster hits like Salut les copains, DISCO, Love Circus and Les Choristes.

A.2 VENUE MANAGEMENT
The venue portfolio has also been enhanced over the years, both by acquiring iconic Parisian music halls and theatres, like the Folies Bergère, Casino de Paris and Bataclan, and by investing in major venues in the rest of France, such as the Arkéa Arena concession in Bordeaux and the public service concession for the Arena du Pays d’Aix in Aix-en-Provence.
The management system for these venues comprises support services centralised at the head office and operational services devolved to each self-managing venue. In addition, the system encourages skills synergies among the venues and the sharing of capabilities and practices. In this way, the expertise and experience of the company’s assets can flow through to each unit, with the shared goal of driving growth.

B) LAGARDÈRE LIVE ENTERTAINMENT: AN EXCEPTIONAL YEAR IN 2019
Thanks to a year that saw outstanding attendance in its concert halls and record ticket sales for its artists, Lagardère Live Entertainment has taken a new step forward in cementing its position as the French market leader in show production.

B.1 LIVE SHOWS AND PRODUCTION
In 2019, nearly a million ticketholders attended concert and show tours by Lagardère Live Entertainment artists, at such noteworthy events as:

Phil Collins at Groupama Stadium in Lyon: 35,000 spectators;
-M-: a total of 700,000 spectators at more than 90 concerts, of which four at the AccorHotels Arena in Paris and five at La Seine Musicale in Boulogne-Billancourt;
Kev Adams: 114 shows, including one broadcast on the TF1 television channel that was watched by 3.21 million people;
Jean-Louis Aubert: 36 sold-out concerts in 2019 (including eight at the Bataclan) before a tour in the Zénith arenas in 2020.

The year also saw the start-up of marketing for the Les Choristes musical in China and the production of Tears for Fears’ French concert dates.
At the same time, through its L Productions subsidiary, Lagardère Live Entertainment undertook a strategy of developing emerging artists by signing some very promising new talent.
Lagardère Live Entertainment offered exceptionally high-quality shows thanks to the major resources invested in delivering the finest possible experience. In addition, bold, responsible initiatives have been undertaken to conserve resources at a time when shows are becoming increasingly energy-intensive, in a commitment to transferring everyday practices to the performing arts:

reducing a tour’s carbon footprint by banning plastic;
limiting travel by aeroplane and car;
using recycled paper for promotional flyers.

B.2 VENUE MANAGEMENT
The venue management business had an excellent year in 2019, with 743 shows and a total of more than one million spectators. In particular, the Arkéa Arena in Bordeaux continued to leverage the city’s popularity and energy by deploying a strategy that appealed to both productions and the general public. In 2019, it was the busiest venue in France outside Paris, with more than 480,000 ticket buyers in all and a blockbuster hit with the Enfoirés show early in the year (60,000 spectators).
In addition, the Folies Bergère hosted Jean-Paul Gaultier’s Fashion Freak Show, which attracted record attendance.
Lastly, the Bataclan completely revamped its visual identity and shifted its programming focus to new creations, residencies and other types of artistic expression. In this way, audiences will be able to experience the one-of-a-kind venue in a totally new way and reclaim it as their own. Since its reopening in 2016, the number of booking dates has steadily increased year after year.

C) OUTLOOK
One of primary objectives for 2020 is to maintain Lagardère Live Entertainment’s market leadership in show production. The division will continue to expand through its subsidiary L Productions, by signing both leading stars and emerging artists discovered through its constant A&R search for the new talents who will make the music of tomorrow.
Lagardère Live Entertainment’s presence in France may be broadened, thanks in particular to two major tenders for strategic venues, to which it has submitted ambitious bids aligned with the quality of the facilities.
Lastly, the 2020 tours by -M- and Jean-Louis Aubert, covering around 100 dates, will have a significant impact over the year.

1.4.4 DISPOSALS PENDING COMPLETION

1.4.4.1 LAGARDÈRE SPORTS

A) PRINCIPAL ACTIVITIES AND MAIN MARKETS
Lagardère Sports is an integrated global marketing agency offering a comprehensive range of services for sports rights holders, brands, athletes and the media:

marketing, sponsorship and brand partnerships;
content creation, media rights, production and distribution;
stadium and arena management solutions;
athlete management;
event management;
brand consulting, activation and digital services.

With more than 1,200 employees worldwide and over 50 years of experience in the industry, Lagardère Sports has a global network of experts dedicated to delivering innovative solutions.

A.1 FOOTBALL

Europe
Lagardère Sports works with more than 100 football clubs across Europe.
In Germany, Lagardère Sports has exclusive marketing agreements with 13 football clubs in the top three divisions and is also a non-exclusive partner of many other clubs.
In France, Lagardère Sports has signed exclusive marketing agreements with six Ligue 1 and Ligue 2 clubs and is also a non-exclusive partner of many other clubs.
In the United Kingdom, it manages sales and advertising helping football clubs in the Premier League and the Football League maximise value from their commercial rights. Lagardère Sports is also an exclusive partner of the Football Association (FA).
Lastly, Lagardère Sports works with clubs, governing bodies and leagues in several other European countries, including Spain, Poland, Hungary, Denmark and the Netherlands.

Africa
In Africa, the agency manages the media and marketing rights of the Confederation of African Football (CAF), which includes events such as the Total African Cup of Nations (AFCON) and the CAF Champions League.
In November 2019, the CAF unilaterally decided to terminate its agency agreement with Lagardère Sports. Lagardère strongly contests this decision, which, in its view, is unlawful, unreasonable and unjustified. As provided under the contract, Lagardère has initiated arbitration proceedings on the merits before the International Chamber of Commerce (ICC) in Geneva, to order to obtain compensation from CAF for the losses incurred.

Asia
In Asia, the Lagardère Sports portfolio includes all the commercial media and marketing rights for the Asian Football Confederation (AFC), which includes events such as the AFC Asian Cup and the AFC Champions League.
The agency also works closely with the ASEAN Football Federation (AFF), managing the AFF Suzuki Cup, the most popular football championship in South-east Asia.
Lastly, Lagardère Sports also distributes the media rights for the Thai League.

Americas
Lagardère Sports markets the Confederation of North, Central America and Caribbean Association’s (CONCACAF) media rights for all international territories.

A.2 GOLF
The golf business of Lagardère Sports includes athlete and event management.
The agency manages a portfolio of more than 85 players and helps to organise golf events around the world, including:

United States: two PGA events (Safeway Open and CareerBuilder Challenge), five Korn Ferry Tour tournaments and several charity events;
Asia-Pacific: Emirates Australian Open, SMBC Singapore Open.

A.3 OLYMPIC SPORTS AND MAJOR EVENTS
Lagardère Sports’ Olympic sports and major events business includes sponsorship rights management, consulting services, marketing of media rights and managing bid processes for the Olympic Games and other events.
Lagardère Sports advises and represents a diverse portfolio of sports bodies at all levels of the Olympic movement: National Olympic Committees (NOCs), major international multi-sport events (including the Commonwealth Games) and Olympic sports federations.
Through its specialist agency Event Knowledge Services (EKS), Lagardère Sports manages bid processes for Olympic Games and major events, including creating bid strategies and supporting the development of detailed technical aspects of a Games plan. Involvement may begin at the earliest stages of bid preparation and continue well beyond the closing ceremony.
In addition, through CGF Partnerships, its innovative alliance with the Commonwealth Games Federation (CGF), Lagardère Sports advises the CGF on a new event delivery model whilst also developing new long-term marketing strategies and strengthening community relations in host cities.

A.4 MEDIA
Lagardère Sports has established itself as a leading manager of sports media rights, with a portfolio of more than 7,000 hours of programming covering around a hundred rights holders. Lagardère Sports also provides rights-holders with production and post-production services globally and produces original content across multiple platforms.
Its media rights portfolio includes several international federations, such as the International Handball Federation (IHF), the International Swimming Federation (FINA), the International Table Tennis Federation (ITTF) the Badminton World Federation (BWF) and World Athletics.

A.5 STADIUMS AND ARENAS
Lagardère Sports advises its clients on the development, management and operation of stadiums and multi-purpose venues, as well as guiding them through the process of implementing once-in-a-lifetime projects. It also advises several rights-holders of European football stadiums and sports leagues. Its approach to stadium and arena solutions spans the entire range of services needed to successfully design, finance, build, operate and market a modern and attractive venue.
Lagardère Sports is the exclusive commercial partner for the Singapore Sports Hub, the world’s largest sports infrastructure project built through a public-private partnership (PPP). It manages the sale of all of the commercial rights, including sponsorships and corporate hospitality. Since the Singapore Sports Hub opened, Lagardère Sports has secured 24 partnerships for the venue and significantly exceeded the aggregate annual revenue targets.

A.6 BRAND CONSULTING AND RIGHTS ACTIVATION
Lagardère Sports transforms traditional brand sponsorships into highly inventive and high impact marketing platforms. It provides advisory and activation services for some of the largest and most recognised brands in the world, helping them to maximise their investments in sport, entertainment, and lifestyle properties. It also offers innovative digital solutions and provides consulting to rights holders and brands to help them rethink their digital strategies and increase revenue in this area.
The agency’s global consulting and activation offering to clients includes established offices in Berlin, Dallas, Frankfurt, Hamburg, London, Manchester, Munich, New York, Paris, Shanghai, Singapore and Tokyo.
Globally, Lagardère Sports has a huge range of experience in creating, managing and activating sponsorship and talent campaigns, a deep understanding of fans across the web, mobile and social media and a track record of innovative activation campaigns with premium properties and brands.

B) OPERATIONS DURING 2019
Contribution to consolidated revenue in 2019: €470 million (versus a restated^(*) €395.6 million in 2018).

Breakdown of revenue by activity

	2019	2018 (*)
TV rights and production	34,3 %	18,0 %
Marketing rights	45,4 %	52,4 %
Other	20,3 %	29,6 %
Total	100 %	100 %

Breakdown of revenue by geographic area

	2019	2018 (*)
Europe	52,7 %	58,5 %
Asia-Pacific	17,9 %	19,1 %
United States and South America	13,0 %	14,6 %
Africa	15,8 %	7,6 %
Middle East	0,6 %	0,2 %
Total	100 %	100 %

^(*)Restated 2018 revenue excludes Lagardère Live Entertainment and Lagardère Paris Racing.

The increased contribution from Media activities (34% of the total in 2019, versus 18% in 2018) was mainly attributable to seasonal factors and major events that occurred in 2019 but not in 2018 (especially the 2019 AFC Asian Cup, the 2019 Total AFCON and the Handball World Championship).
Revenue from Marketing activities rose slightly over the year. Activities in Europe (mainly football clubs in Germany and France, but also operations in the United Kingdom) and the staging of the 2019 AFC Asian Cup and the 2019 Total AFCON more than offset the absence of such prior-year events as the Commonwealth Games in Australia. The decrease in Marketing’s relative contribution, from 52% to 45%, was primarily due to a base effect related to the increase in Media activities.
Lastly, the share of “Other” activities fell significantly, to 20% from 30% in 2018. These activities mainly relate to:

athlete management;
brand consulting;
venue consulting and events organisation.

The decline in revenue and the relative contribution from “Other” activities reflected the sale or disposal of certain businesses and the non-recurrence of certain contracts.
Geographically speaking, the contribution from Africa rose sharply, to 16% from 7% in 2018, led by the staging in 2019 of the Total African Cup of Nations (held every two years) and the AFC Asian Cup, some of whose broadcasters are based in African countries, therefore generating business on the continent.
The relative contribution from Asia remained stable, at 18% compared to 19% in 2018. The favourable impact from the cyclical staging of AFC games (such as the AFC Asian Cup in 2019) was dampened by the absence of the Commonwealth Games, which were held in Australia in 2018, and by the fact that some of the activities are based in Africa. The stability of the region’s relative weighting reflected the other major sports events held during the year.
The share of the United States and South America region contracted somewhat, to 13% from 15% in 2018. Revenue was up slightly for the year, but its relative share of the total declined due to the Lagardère Sports’ strong performance in other regions. The relative weighting of Europe decreased from 59% to 53% in 2019. Revenue rose in euro terms, lifted by the staging of the men and women’s Handball World Championships during the year. However, given the overall increase in Lagardère Sports’ revenue for the year, Europe’s relative weighting in the total declined.

The cyclical nature of Lagardère Sports’ activities and competitive environment
The world’s major sporting events follow two to four-year cycles. This cyclical nature has an impact on all sports-related professions whose activity depends on the timing of these events. In view of Lagardère Sports’ current portfolio, 2020 is a low point in the 2017-2020 sports cycle. Lagardère Sports’ competitive environment mainly comprises a limited number of international agencies that operate in several businesses, sports and geographic areas, as well as more local players in each of its markets.

B.1 FOOTBALL
Europe
In 2019, Lagardère Sports announced that its sales agency partnership with the English Football Association (FA) had been extended, thereby consolidating a successful year-long collaboration. In France, Lagardère Sports and AS Saint-Etienne (ASSE) extended their partnership covering the negotiation of ASSE partnership contracts and the marketing of its hospitality rights, B2B ticketing and seminars until 2030.
In Germany, the agency renewed its exclusive marketing agency partnership with SG Dynamo Dresden until 2025.
Lagardère Sports, the official marketing partner of the Polish Football Association (PZPN) has linked up with Onefootball, one of Europe’s most popular digital football platforms, to offer live streaming of Polish Cup fixtures to football fans around the world.
Lastly, Lagardère Sports continues to support leading football rights-holders throughout Europe.

Africa
In 2019, Lagardère Sports signed two major CAF sponsorship agreements, one with Continental for Total AFCON until 2023 and the other with 1xBet for all major CAF events.
In addition, Lagardère Sports enabled the 2019 Total AFCON to secure extensive media coverage that delighted fans around the world.
In November 2019, the CAF unilaterally decided to terminate the agency agreement with Lagardère Sports. The agency believes that the decision was unwarranted and is taking all the necessary steps to defend its interests.

Asia
As an official AFC partner, Lagardère Sports enabled the 2019 AFC Asian Cup to reach more than 836 million football fans across all of AFC’s digital platforms.
The agency also helped to create the International Super Cup, a new international football tournament designed by Kaisa Culture Sports and Tourism Group that will provide an invaluable opportunity for premier football clubs to amplify their presence in China. Lastly, as the exclusive media rights distributor for Japan’s professional football league (J League), Lagardère Sports formed an innovative international distribution partnership for the league with Rakuten Inc., to support the launch of its new Rakuten Sports entertainment platform.

B.2 GOLF
In 2019, Lagardère Sports continued its work as a golf talent agency, representing more than 85 players, including Phil Mickelson, Jon Rahm, Keegan Bradley and Brandt Snedeker. In addition, the agency organised several tournaments in the United States, including PGA Tour events such as the Safeway Open and the American Express.
In Asia Pacific, Lagardère Sports organised the Singapore Open SMBC and the Emirates Australian Open, two of the most prestigious golf events in 2019. In particular, the tournament in Sydney attracted world-class golfers and major partners including Emirates, TAG Heuer, Fujitsu, HSBC and Yamaha.

B.3 OLYMPIC SPORTS AND MAJOR EVENTS
As part of its exclusive long-term marketing partnership with the Australian Olympic Committee (AOC) and Paralympics Australia (PA), Lagardère Sports continued to develop the AOC’s portfolio of partners for the Olympic cycle running until Tokyo 2020, expanding it to 30 partners and 10 suppliers by the end of 2019. During the year, Lagardère Sports was very active in signing new partnerships, with leading organisations such as Meat & Livestock Australia, Jockey, Royal Australian Mint, Optus (Unleashed), Mondelēz International, Danone (YoPRO), Elastoplast, XTM, Volley and others to be announced in 2020.
In addition, as a strategic partner of the New Zealand Olympic Committee (NZOC), Lagardère Sports facilitated partnerships with Sky, Griffin’s Food Company, Mondelēz International and other top brands.
As the exclusive marketing agency of the British Olympic Association (BOA), Lagardère Sports signed new partnerships, including with Pladis Group, Purplebricks and British Airways, and secured law firm Gowling WLG’s agreement to become the first official sponsor of the 2020 Commonwealth Games.
Lastly, as a strategic partner of the Paris 2024 Olympic Games, Lagardère Sports secured the agreement of BPCE banking group (Banque Populaire, Caisse d’Epargne, Banque Palatine and the Natixis brands) to become the first corporate to join the Paris 2024 partnership program. The six-year agreement came into effect at the beginning of January 2019.

B.4 ESPORTS
In 2019, Lagardère Sports continued to broaden its footprint in the Esports market by signing several partnerships with video game teams and publishers.
In particular, it inked an exclusive multi-year strategic marketing partnership with the new League of Legends European Championship (LEC), the official governing body for the League of Legends competition in Europe.
The agency has also signed a strategic cooperation agreement with video game publisher Riot Games and the Freaks 4U Gaming agency to organise and promote the 2019 Premier Tour, before developing a regional tournament series for League of Legends players in Germany, Austria and Switzerland starting in 2020. In 2019, Lagardère Sports was also appointed as the exclusive agent to market commercial rights for the Playerunknown’s Battlegrounds (PUBG) 2019 PUBG Nations Cup and the 2019 PUBG Global Championship, enabling the agency to up its ante in the Battle Royale genre.
In the same vein, Lagardère Sports is acting as the exclusive sales agent for T1 Entertainment & Sports, the three-time World League of Legends champion team, with responsibility for marketing the team’s commercial rights, including managing all brand partnerships and sponsorship engagements.
Lastly, Lagardère Sports won best prize in the Games & Esports
category at the 2019 IAB MIXX Awards in Poland, in recognition of its
digital “Ekstraklasa Games” campaign, which enabled the best FIFA
20 players to compete with one another in online qualifying games.

B.5 OTHER SPORTS
Lagardère Sports is partnering with the International Handball Federation (IHF) to distribute the media rights to the men’s and women’s World Championships from 2019 to 2025. The agreement spans eight global competitions beginning with the 26th IHF Men’s World Championship in Germany and Denmark in January 2019. Lagardère Sports is also the first agency ever to have signed an exclusive contract to represent the International Netball Federation (INF) in marketing and distributing its international media rights. The contract, which runs from 2018 to 2023, got under way with the 2019 World Cup in Liverpool in July 2019. The agreement also includes the 2023 World Cup, as well as Fast5 tournaments, the Youth World Cup and World Cup qualifiers.
Moreover, the agency continued to distribute the media rights for regular season and play-off games organised for the Kontinental Hockey League (KHL) for the 2019-2020 and 2020-2021 seasons. In 2019, Lagardère Sports also renewed its partnership with the French Tennis Federation (FFT) covering the hospitality programme for the 2020 and 2021 French Open and Rolex Paris Masters.
Lastly, the agency also continued to grow its talent management business in 2019, expanding the portfolio to more than 130 American football players and more than 105 baseball players. Ten of its clients were chosen for the 2019 NFL Draft, including four in the first round.

B.6 BRAND CONSULTING AND RIGHTS ACTIVATION
In 2019, Lagardère Sports continued to support its long-term customers Citibank, Bridgestone, Epson, EA Sports and Danone. The agency also advised Hyundai Motor France during the launch of the #HyundaiPreums promotion as part of its partnership with the Olympique Lyonnais (OL) football team. Launched on 3 December at the Groupama Stadium in Lyon, during the game between OL and Lille OSC (LOSC), the activation enabled the fastest fan to win two spots to watch the game on premium leather seats close to the pitch. It will be repeated throughout the 2019-2020 Ligue 1 Conforama season.
Separately, Volkswagen appointed Lagardère Sports as its new agency partner, in charge of guest management, ticketing and hospitality for the automaker’s football sponsoring partnerships. The new relationship is focused on Volkswagen’s partnerships with the German Football Association and UEFA, with an emphasis on the UEFA Euro 2020 tournament.
The agency also assisted French national power utility EDF in designing and producing the official partnership launch film for the Paris 2024 Olympic and Paralympic Games.
In addition, Lagardère Sports helped water technology company Xylem and Manchester City FC to launch a new marketing campaign called “Closer Than You Think”. The agency and Xylem used creative, multimedia storytelling to show audiences how every country on earth faces serious – and escalating – water issues.
Lastly, during the FIFA Women’s World Cup France 2019, Lagardère Sports launched the “True Passion” campaign for Hyundai to celebrate the excitement of football and promote women’s football.

B.7 OBJECTIVES AND ACHIEVEMENTS IN 2019
In 2019, Lagardère Sports once again played a major role in world football, helping to deliver a record number of digital activations for the Total AFCON Cup, while continuing to manage leading AFC assets, such as the 2019 AFC Asian Cup.
Lagardère Sports also renewed its collaborative relationship with the English Football Association, as its official sales agency partner, and extended its strategic partnerships with three European clubs, ASSE, Ferencváros TC and SG Dynamo Dresden. The agency successfully developed new partnerships for its represented rights holders, such as the ones signed between Borussia Dortmund (BVB) and Deezer, Hamburger SV (HSV) and Emirates, and OL and Deliveroo.
Lagardère Sports remained one of the world’s leading organisers of golf tournaments, including the Emirates Australian Open and the SMBC Singapore Open in Asia, as well as the American Express, the Safeway Open and the Korn Ferry Tour tournaments in the United States.
In addition, the agency continued to expand its presence in Esports by forging a long-term strategic partnership with Riot Games for the LEC competition, for which it has already secured a large number of partners.
Lastly, Lagardère Sports continued to broaden its mainly US-based portfolio of leading golf, tennis, American football and baseball athletes.

C) OUTLOOK
In late 2019, the Lagardère group announced its plan to sell 75% of the Lagardère Sports agency to H.I.G. Capital, a global private equity investment firm based in Miami, Florida, USA.
The Lagardère group will retain management of Lagardère Live Entertainment, which produces music events and shows in France.
The planned sale, which is subject to clearance from French competition authorities, will allow Lagardère to refocus its business base on its two priority divisions, Lagardère Publishing and Lagardère Travel Retail.

1.4.4.2 LAGARDÈRE STUDIOS

A) PRINCIPAL ACTIVITIES AND MAIN MARKETS
In the Audiovisual Production and Distribution segment, Lagardère Studios provides archive programmes (drama, documentaries) and programmes for immediate broadcast (features, light entertainment, etc.) to a large majority of broadcasters and digital platforms in France, Spain, Finland and the Netherlands, as well as, more marginally, in French-speaking Africa. Lagardère Studios also produces corporate and web videos.
In 2019, Lagardère Studios rose from the third to the second-largest producer of drama programming in France, with more than 59 hours of original drama broadcast in prime time between 1 September 2018 and 31 August 2019⁽¹⁾, compared with 45 hours the year before.
Lagardère Studios also remained the second-largest producer of programmes for immediate broadcast⁽²⁾, with more than 1,012 hours broadcast over the same period on French channels, or nearly 200 hours more than in the 2018 period.
In Spain, Lagardère Studios is a leading independent audiovisual production group, with approximately 600 hours of programming delivered in 2019.
Revenue generated by the audiovisual production activity consists of broadcaster financing. Other sources of financing such as co-producers, local and regional authorities, and the French national cinema board (CNC) help fund production. In France, the audiovisual production business is also eligible for tax credits.
The audiovisual distribution activity is based on a portfolio of broadcasting rights for audiovisual works supplied, among others, by the Lagardère Studios production activity. In recent years, Lagardère Studios Distribution has increased its investments in minimum guarantees to broaden its third-party distribution contracts, particularly for French and European drama programming.
Audiovisual distribution revenue is derived from the sale of these broadcasting rights for audiovisual works for specific markets and a specific length of time.

(1) Source: Écran Total – 2019 ranking of drama producers.
⁽²⁾ Source: Écran Total – 2019 ranking of producers of programmes for immediate broadcast.

B) OPERATIONS DURING 2019
In 2019, Lagardère Studios, through its Spanish subsidiary Boomerang TV, acquired the 50% of outstanding shares it did not already own in Barcelona-based Nova Veranda from Catalan media group Grupo Good. Nova Veranda has produced, in particular, the series Merlí, which was initially made for the local TV3 channel but has since won international acclaim after being picked up by Netflix. As a wholly-owned subsidiary, it offers Lagardère Studios a second drama and light entertainment production label in Spain, alongside Madrid-based Boomerang TV.
In December 2019, Lagardère Studios also sold Carson Prod to its founding executive. The company primarily produces entertainment programmes for France Télévisions and real-life documentaries (Crimes, Héritages, etc.) for NRJ 12.
In France, Lagardère Studios’ recurring prime-time series continued to enjoy very good ratings, particularly Caïn, Tandem, Joséphine, ange gardien and Clem. Lagardère Studios also produced single-episode works and hit mini-series like Paris-Brest, Une mort sans importance and Une île. In addition, Save Ferris Studios, which was created in 2017, delivered its first drama production in 2019, Meurtres à Tahiti, which earned excellent ratings when it aired on France 3 on 28 December 2019⁽¹⁾. Lastly, Atlantique Productions, working through US producer Endeavor Content, produced the Netflix series, The Eddy, whose first two episodes were directed by Damien Chazelle.
In programmes for immediate broadcast, Réservoir Prod’s daily magazine Ça commence aujourd’hui saw its ratings improve in 2019, with audience share among viewers four years and older regularly exceeding 13%. Other such programmes, like Maison à vendre, Recherche appartement ou maison and C dans l’air, maintained their audience shares over the year. In addition, 909 Productions produced the second seasons of Retour à l’état sauvage and Constructions sauvages for RMC Découverte. Lastly, the documentary series Grégory, produced by Imagissime and streamed online by Netflix in September 2019, was a critical and ratings success, ranking as one of the ten most streamed programmes in December 2019⁽²⁾.
In Spain, Boomerang TV produced the first “senior” version of La Voz, in addition to the “adult” and “kids” versions. It also continued to produce the daily series El Secreto de Puente Viejo and Acacias 38, which are broadcast by Antena 3 and TVE, respectively, and sold to Mediaset in Italy. Lastly, Boomerang TV produced an eight-episode mini-series for Atres Studios and Amazon. In the Netherlands, Skyhigh TV delivered a number of first-season programmes, including Hotel Rules, a variation of House Rules for hotels.
In Finland, Aito Media delivered two new drama series, Ring the Bells and Mother-in-Paw.
Lastly, in Africa, Keewu delivered the third season of the C‘est la vie series and the Shuga series for MTV.

C) OUTLOOK
As part of the Group’s strategic refocusing around its two priority divisions (Lagardère Publishing and Lagardère Travel Retail), the plan to dispose of Lagardère Active’s media assets (other than Lagardère News) continued pace in 2019 and the process to divest the Audiovisual Production and Distribution unit (Lagardère Studios) is now under way.

(1) Source: Mediamat-Médiamétrie
(2) Source: BetaSerie

UNIVERSAL REGISTRATION DOCUMENT INCLUDING THE ANNUAL FINANCIAL REPORT FISCAL YEAR 2019

Sommaire

1.4 Business activities and strategy AFR

1.4.1 LAGARDÈRE PUBLISHING

1.4.2 LAGARDÈRE TRAVEL RETAIL

1.4.3 OTHER ACTIVITIES

1.4.4 DISPOSALS PENDING COMPLETION