1.4 Business activities and strategy AFR

Lagardère is an international group with operations in more than 40 countries worldwide. It employs some 28,000 people and generated revenue of €4,439 million in 2020.
Following the strategic refocusing led by Arnaud Lagardère, General and Managing Partner, the Group is now organised around two core businesses:

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 2020, the global publishing market was hit by the Covid-19 health crisis, but the impact varied by region and led to growth in demand in all of Lagardère Publishing’s geographic markets except France, as people bought more reading material, digital products and board games to offset the suspension of most cultural activities.
In the field of digital technology and the Internet, Lagardère Publishing offers products resonant with emerging market trends and suited to multiple distribution channels, media and formats (e-books, audio books, digital marketing, adaptive learning platforms, etc.).
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, including consumer games in all their components.
Lastly, as part of the strategy defined for the Group by Arnaud Lagardère, the division also plans to continue making targeted acquisitions in its core publishing business, similar to the transactions completed in 2020 (Le Livre Scolaire in France and Laurence King Publishing in the United Kingdom).

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 fifth-largest travel retail operator (second-largest in airport travel retail);
  • the world’s largest international network of travel essentials stores;
  • the European leader in the travel retail fashion segment;
  • the fourth-largest operator in airport core duty free;
  • the world’s fourth-largest Foodservice provider in transit areas.

The Covid-19 health crisis led to a severe contraction in business across the travel and tourism industry. In response, objectives are now focused on preserving cash flow and the earnings stream, while supporting what is expected to be a recovery correlated with momentum in the vaccination campaigns.
The main priorities are to:

  • continue renegotiating contractual lease terms with concession grantors as traffic resumes;
  • diligently manage and optimise inventory and other working capital items;
  • align organisations with the new reality, while maintaining quality of execution and operational excellence;
  • keep pace with the recovery and spur the Group to emerge from the crisis as a faster, stronger, more agile organisation, in particular through the “LEaP Forward” transformation and optimisation programme.

In addition to Lagardère Paris Racing and the Group Corporate function, the Group also owns the following core business units:

Lagardère News, which comprises Paris Match, Le Journal du Dimanche, advertising sales brokerage, licencing management for the Elle brand, Europe 1 and the French music radio networks (Virgin Radio and RFM).
The health crisis also hit Lagardère News by squeezing advertising sales.
While continuing to optimise costs across the business base, Lagardère News is pursuing its core objectives, i.e., assert its identity and develop synergies, restore Europe 1’s audience numbers, drive the faster digital transformation of its Press business, broaden the Elle branded business, grow the radio stations and diversify the revenue stream.

Lagardère Live Entertainment, which is active in two segments:

  • producing concerts (Florent Pagny, -M-, Jean-Louis Aubert, etc.) and shows (Les Souliers Rouges, Salut les copains, DISCO, Love Circus, Les Choristes, etc.);
  • 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.

Against the backdrop of the Covid-19 health crisis, which had a significant negative impact on the activities of Lagardère Live Entertainment due to closure of theatres and concert halls for most of 2020, the main objective of 2021 is to nurture an early recovery despite social distancing and reduced capacities in entertainment venues. Adaptability will remain the guiding principle, as it was throughout 2020. Over the medium term, Lagardère Live Entertainment’s objective will be to maintain its market leadership in show production. The company will also continue to expand through its subsidiary L Productions, by signing both marquee stars and emerging artists.

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

(1) This Universal Registration Document refers to this business 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.
Central management functions in turn enable Hachette Livre to devise an aligned strategy in digital technologies, negotiate from a better position with large accounts and suppliers, and leverage economies of scale.
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, increasingly, as downloadable audiobooks. Hachette Livre has begun to diversify into mobile and board games, to explore new, fast-growing entertainment territories.

A.1 In France(6)

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, Editions du Chêne and Hazan, and in youth works (Hachette JD, Hachette Jeunesse, Hachette Romans, 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(7) thanks to two separate entities: Hachette Éducation and the Alexandre Hatier group and, following its acquisition in 2020, Le Livre Scolaire. 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 around 30% 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 230 million copies per year and supplies more than 15,000 bookshops, online booksellers, speciality stores, 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.

(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 NPD BookScan in the United States.
(6) Hachette Livre’s competitive positions reflect data provided by the GfK panels to which the division subscribes.
(7) Source: internal estimates.

A.2 Outside France(1)

In 2020, Hachette UK was the United Kingdom’s second-largest publisher, with 13.7%(2) of the print trade book market through nine divisions: Octopus for illustrated books; Orion; Hodder & Stoughton; John Murray Press; Headline; Little, Brown and Quercus for general literature, plus Bookouture since 2017; and Hachette Children’s Group 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, since 2019, 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) Source: internal data, based on Nielsen BookScan in the United Kingdom, GfK in Spain and NPD BookScan data in the United States.
(2) Source: Nielsen.

B) Operations during 2020

Contribution to consolidated revenue in 2020: €2,375 million (€2,384 million in 2019).

Breakdown of revenue by activity

  2020 2019
Education 13.6% 14.6%
Illustrated Books 14.0% 13.1%
General Literature 44.7% 43.4%
Partworks 11.2% 12.3%
Other (including Reference and Distribution) 16.5% 16.6%
Total 100 % 100 %

Breakdown of revenue by geographic area

  2020 2019
France 27.9% 29.3%
United Kingdom 18.0% 16.3%
United States 26.5% 25.5%
Spain 5.5% 6.0%
Other 22.1% 22.9%
Total 100 % 100 %

In 2020, the global publishing market was hit by the Covid-19 health crisis, but the impact varied by region and led to growth in demand in all of Lagardère Publishing’s geographic markets except France.
In France, the first lockdown, from March to May, weighed heavily on book sales, but was followed by a sharp rebound in June that continued into the second half. Overall, the market ended the year down 1.8%(1) in value.
In Spain, the textbook market declined after several regions cancelled their new textbook procurement programmes. The Trade market, on the other hand, held up well against the health crisis and the impact of the successive lockdowns, enabling total market value to edge up 0.8%(1) over the year.
In the English-speaking markets, e-book sales rose sharply in response to the various lockdowns, while audiobooks extended their spectacular growth across every market. Print book markets also rose during the year, by 5.5%(2) in the UK and 8.2%(3) in the US, led by online sales.
Against this backdrop, in 2020, Lagardère Publishing reported revenue of €2,375 million, down a slight 0.4% as reported and 0.8% like-for-like, and recurring operating profit of €246 million, up 12%.
The increase in profit despite the decline in revenue reflected the cost-cutting plans immediately deployed in response to the Covid-19 crisis and the growth in digital formats.
Lagardère Publishing is pursuing the same strategy built on eight core objectives:

  1. constantly explore new growth opportunities by making the high value-creating acquisitions needed to maintain the division 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 Board Games, in a commitment to reaching consumers who are shifting from books to other forms of entertainment;
  2. spread risks across a significant number of markets and market segments to smooth the cyclical effects specific to each one;
  3. concentrate acquisitions and the creation of new subsidiaries in countries belonging to language areas that offer critical mass in terms of potential markets;
  4. offer publishing subsidiaries broad editorial independence to foster creativity, rapid response and team motivation, and therefore the ability to attract and retain the talented people who are the foundation of the division’s organisation and success. This talent is what enables our publishers to discover, support and successfully develop the work of their authors;
  5. actively seek out international bestsellers able to attract an extensive readership in all of the division’s markets;
  6. manage distribution both as a cost centre and a strategic link in the book value chain, in all of the division’s markets;
  7. continue to invest heavily in digital technologies to understand and satisfy authors, booksellers and readers more effectively;
  8. selectively invest in high-growth markets.

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

B.1 In France

In France, the health crisis and the successive lockdowns adversely impacted revenue, which declined by 0.4% in 2020 in every segment except General Literature.
Hachette Éducation and the Alexandre Hatier Group, for example, suffered from the fact that high school curricula were less extensively reformed than in 2019 (a single level revamped over the year), as well as from a steep decline in sales of French as a foreign language (FLE) textbooks due to the health crisis.
Illustrated Books also saw revenues soften due to a very sharp drop in sales of travel guides and the lack of a new Asterix album in 2020. The other divisions, such as how-to books, youth works and manga, all demonstrated very firm resilience.
Lastly, General Literature had a good year despite the closure of bookstores for several weeks. Le Livre de Poche, for example, reported higher revenue in a declining market. This was also the case for large-format publishers, in particular Fayard, led by the publication of Barack Obama’s A Promised Land and new novels by Aurélie Valognes and Virginie Grimaldi, and Calmann-Lévy, with the publication of Guillaume Musso’s La vie est un roman, the reissue of his Skidamarink and the publication of new works by Marie-Bernadette Dupuy. In addition, Stock enjoyed a good year, winning the Grand Prix du Roman, the Académie française’s literary prize, for La grande épreuve by Étienne de Montety, while Grasset published Vanessa Springora’s Consent, one of the year’s most impactful titles. Lastly, Lattès benefited from the popularity of Olivia Ruiz’s first novel, La commode aux tiroirs de couleurs.

B.2 Outside France

United States

In an environment shaped by a sharp 8.2%(1) increase in the print book market and robust growth in e-books and audiobooks, Hachette Book Group (HBG) reported higher revenue in 2020.
The year saw the market success of Andrzej Sapkowski’s The Witcher saga, published by Orbit and developed into a series by Netflix, and the publication of Stephenie Meyer’s new novel, Midnight Sun.
In addition, books on the theme of identity and racism came into high demand in the wake of the Black Lives Matter movement.
Lastly, digital audio and e-books pursued their spectacular growth in 2020, as the successive lockdowns drove gains of 21% and 16%, respectively, that staunched the recent-year erosion in sales.

United Kingdom and the Commonwealth

Hachette UK enjoyed a record year in 2020, with growth of 16.3%(2) in a trade print book market up 5.5%(2).
The e-book and audio formats were major contributors to this performance, with strong growth of 21% and 50%, respectively.
Like Hachette Book Group, Hachette UK benefited from the success of The Witcher saga and the publication of Midnight Sun, but also from the release of the new J.K. Rowling novel, The Ickabog. More broadly, new title sales, particularly at Orion and Little, Brown, rose sharply in 2020 despite the lockdowns.
In addition, the Education business saw a slight contraction in market share after schools remained closed for several months.

Spain and Latin America

Following completion of the curriculum reform cycle initiated by the Organic Law for Improvement of the Quality of Education (LOMCE), changes in majorities in both national and regional parliaments,as well as budgetary constraints in the regions, have generated a certain degree of buying hesitation, which was aggravated by the health crisis in 2020.
This prompted several regions to forego the procurement of new textbooks, causing the Education business to report lower revenues for the year.
Hachette España held up better in General Literature, boosted by the success of Woody Allen’s A propósito de nada and, more generally, the remarkable performance of the Alianza publishing house.
In Latin America, Larousse Mexico and Patria suffered from a steep fall in sales to Mexican private schools and in the Trade segment, in a country hard hit by the health crisis. Only government sales remained resilient.

Partworks

Partworks sales declined as a result of the health crisis, which had a severe impact on Latin American countries. In addition, business in France suffered from Presstalis’ difficulties in the first quarter.
On the other hand, sales in Japan and Germany showed stronger resistance.

B.3 Objectives and achievements in 2020

Lagardère Publishing expected sales to decline somewhat in 2020, due to the lack of a new Asterix album and the more limited high school curriculum reform programme than in 2019.
This forecast was upended by the health crisis which, from March 2020 onwards, severely impacted the division’s business, particularly in France and Spain. The rebound that began in France in June, and the remarkable resilience of the English-speaking geographies to both the health crisis and the lockdown restrictions fully offset the revenue shortfalls in the March to May period and kept revenue almost in line with 2019.
At €246 million, consolidated recurring operating profit rose by a robust €26 million (up 12%), buoyed by the ambitious cost-cutting plans deployed as early as March in every geography, as well as by the strong growth in the percentage of digital formats in the sales mix. As a result, the improvement in margins was particularly remarkable at Hachette Book Group and Hachette UK.
Partworks, where the division is world leader, also demonstrated the resilience of their business model.
Lastly, the merits of diversifying into board games were clearly evidenced when the division delivered organic growth of 15% in 2020.

C) Outlook

Lagardère Publishing has entered 2021 with the publication of a new Asterix album, but without the prospect of any curriculum reform and an unprecedented degree of uncertainty due to the Covid-19 crisis.
In this environment, the division plans to pursue its strategy of diversifying into board games, which are enjoying strong growth with a business model that is very similar to book publishing.
It will also continue to make targeted acquisitions in its core publishing business, as it did in 2020 with the purchase of Le Livre Scolaire in France and Laurence King Publishing in the United Kingdom.

(1) Source: NPD BookScan (by volume).
(2) Source: Nielsen BookScan (by value).

1.4.2 Lagardère Travel Retail

A) Principal activities and main markets

With operations in 39 countries on five continents, Lagardère Travel Retail is a global industry leader.
At year-end 2020, the division directly operated 4,855 stores contributing to its consolidated revenue stream. The geographic breakdown is as follows: 3,561 in Europe, Middle East and Africa, 474 in Asia-Pacific and 820 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 licencors 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.
Despite prevailing conditions, 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 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 2020 include:
    • In EMEA:
      • several concession awards in all three business segments in Italy, mainly in the Rome, Naples and Palermo airports. Following on from these three wins, Lagardère Travel Retail’s presence was further broadened with the opening of a new Duty Free store in the Cagliari airport and the tender win for the Duty Free business at the Catania airport, Sicily’s leading airport and Italy’s sixth largest in terms of passenger traffic in 2019;
      • the opening of ten new Travel Essentials stores at the new Willy-Brandt Airport in Berlin, including eight opened by year-end 2020 and two scheduled to open in 2021;
      • renewal of the master concession at the Gdansk airport in Poland.
    • In Asia-Pacific:
      • the award of Fashion, Watches & Jewellery, and Perfumes & Cosmetics concessions in China, both at new airports, in Guangzhou, Nanjing and Hangzhou, and at airports where the division was already present, such as Shanghai Hongqiao and Shenzhen. These concessions will add brands such as Bvlgari, Cartier and Burberry to the partnerships managed by the subsidiary;
      • the opening on 30 December 2020 of the second largest Duty Free shopping centre in Hainan, China, in partnership with Hainan Tourism Investment Development;
      • the award of concessions in Japan under the “Made in Pierre Hermé” concept.
    • In North America:
      • concession wins in Oklahoma City and Myrtle Beach, which will include the first Starbucks coffee shop operated by Lagardère Travel Retail in the United States.

In a still consolidating market, Lagardère Travel Retail is now the fifth-largest travel retail operator(1), (second-largest worldwide 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(2) in the Travel Retail Fashion segment;
  • is the fourth-largest(2) operator in airport Core Duty Free;
  • is the fourth-largest(2) Foodservice operator in transit areas worldwide.

The network includes the following stores operated:

  • under its own banners:
    • with a global footprint, such as 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, such as BuY Paris Duty Free, Casa Del Gusto and The Belgian Chocolate House;
    • 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 in Travel Essentials(2)

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 2,988 stores worldwide at the end of 2020.
Of these stores, 389 are operated by a network of franchisees in countries such as Belgium, Hungary, Poland, Romania, 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 31 other countries, SSP has operations in 33 countries, Areas in 13; and Valora operates mainly in Germany, Austria, Switzerland, Luxembourg and the Netherlands.

(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. The latest ranking is based on 2019 figures.
(2) 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. 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 deepened its European presence in transit hub Fashion sales(1), 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.
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 1,126 Foodservice points of sale (including 9 operated by a network of franchisees) in 23 countries, including France, the Czech Republic, Poland, Italy, Austria, Iceland, North America, Gabon and Slovakia, and following the recent acquisition of Smullers, the Netherlands:

  • 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 licencors 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 licencors 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 2020

Contribution to consolidated revenue in 2020: €1,720 million (versus €4,264 million in 2019).

Breakdown of revenue by activity

  2020 2019
Travel Essentials 43.8% 37.8%
Duty Free & Fashion 34.7% 39.7%
Foodservice 21.5% 22.5%
Total 100 % 100 %

Breakdown of revenue by geographic area (Travel Retail)

  2020 2019
France 19.9% 22.5%
Europe (excluding France), Middle East and Africa 43.4% 40.6%
North America 24.0% 25.0%
Asia-Pacific 12.7% 11.9%
Total 100 % 100 %

Lagardère Travel Retail’s revenue decreased by 59.7% as reported and by 60.1% like-for-like in 2020.
During the year, the division’s host regions were impacted by government-mandated travel restrictions in response to the Covid-19 health crisis. Airport points-of-sale were hit harder than other locations in which Lagardère Travel Retail operates, such as rail stations and town centres.
The Travel Essentials business accounted for 43.8% of consolidated revenue in 2020, versus 37.8% in 2019, attesting to the segment’s resilience during the crisis, particularly in tobacco and other regulated products.
The contribution from the Duty Free & Fashion business declined slightly, to 34.7% of the consolidated total from 39.7% in 2019, reflecting the fact that the Duty Free stores are primarily located in airports.
Lastly, the Foodservice business represented 21.5% of consolidated revenue, versus 22.5% in 2019.
In absolute value, all of the geographies reported significant declines in revenue due to the Covid-19 health crisis.

B.1 COVID-19

The Covid-19 health crisis led to a severe contraction in business across the travel and tourism industry.
After rising 6.3% in 2018 and 2.9% in 2019, this past year saw worldwide air traffic plummet 53.1% in the period to October 2020.
In response, Lagardère Travel Retail took immediate action to protect its customers and employees, while implementing a plan to preserve earnings and cash that limited the negative impact of the decline in revenue on operating profit to 19.8%.
The main measures focused on overheads, which were reduced by just over €600 million by:

  • renegotiating the contractual terms of concessions (cancelling fixed lease payments, reducing variable payment rates, deferring due dates);
  • reducing the number of stores kept open and adjusting opening hours in agreement with concession grantors;
  • adjusting payroll costs at every level, through furlough schemes if financed by local authorities, or through redundancies or pay cuts where no such financing was available;
  • lastly, a significant reduction in non-essential costs (i.e., not needed for the company to operate) by limiting or renegotiating business travel costs, consulting fees, maintenance and cleaning expense, and royalties paid.

B.2 France

Lagardère Travel Retail reported a 62.9% fall in trading, due mainly to the measures restricting international air traffic. Non-airport trading declined to a lesser extent (down 47.1%), with rail traffic (mainly domestic) less affected by the travel restrictions.
In this unfavourable environment, the Travel Essentials network saw revenue fall by 55.0% over the year. The train station network contracted by 45.0%, while business in tourist destinations, like the Eiffel Tower, which remained closed for much of the year, plunged 71.3%.
The Foodservice segment declined by 52.9% overall, with a 64.2% drop in transit areas (of which declines of 75.4% in airports and of 53.4% in train stations) and a 44.8% fall in the hospital network.
The Duty Free & Fashion business saw managed sales plummet 71.4% year-on-year, reflecting the 69.6% drop in Paris air traffic that led to a number of terminal closures (Orly airport, for example, was closed from 31 March to 30 June 2020).
Regional hubs also experienced sharp declines in air traffic (70% at the Marseille-Provence and Lyon-Saint-Exupéry airports, 69% at the Nice-Côte d’Azur airport and 71% at the Bordeaux airport), which also led to terminal closures (including terminal 1 at Nice- Côte d’Azur).

B.3 Europe, Middle East and Africa (EMEA – excluding France)

Business in the EMEA region (excluding France) was severely curtailed in 2020, with revenue falling 54% versus 2019 due to the health crisis and its direct consequences, including the collapse in air traffic, border closures, the inability of EU countries to coordinate restriction policies, and the enforcement of strict and/or partial lockdowns since March 2020.
Operations in Italy, the country hardest hit by Covid-19 in the region, saw revenue drop by 77% year-on-year. The Duty Free business was particularly impacted by (i) the shutdown in air traffic during the first lockdown in March-April 2020, which literally brought the country to a standstill; and by (ii) the collapse in international and European tourism over the summer. As a result, Duty Free sales fell by 80% year-on-year after passengers virtually disappeared from the airports. At Rome-Fiumicino airport, for example, passenger traffic shrank by 70% over the period. The Travel Essentials and Foodservice businesses fared better thanks to their railway station stores and, especially, their motorway outlets, which enjoyed strong footfall during the summer, when most Italians drove to their vacation destinations in Italy or in neighbouring countries. Nevertheless, revenue in these two segments ended the year down 70% compared with 2019.
Sales fell 72% year-on-year in the United Kingdom, due to more stringent travel restrictions (border closures and tighter lockdowns) than in other European countries.
In Belgium, which was also heavily impacted by the virus, pro forma Duty Free revenue declined by 75% due to the 74% year-on-year collapse in air passenger traffic at Zaventem airport after air travel was shut down in April and May.
Sales in the Netherlands contracted by 62% over the year, outpacing the 55% decline in passenger traffic at Schiphol airport due to the serious impact on the Fashion business of the lack of Chinese, Russian and American passengers since March 2020.
The Foodservice activity was also hard hit by the decline in railway passenger footfalls caused by the increase in working from home and the implementation of health restrictions (masks, shorter opening hours).
While also heavily impacted by the crisis, particularly since the second half of the year, operations in Central Europe were supported by a more resilient non-airport business.
In Germany, for example, revenue contracted by 52%, mainly on the decline in air traffic and the more restricted opening hours for Foodservice outlets.
In Poland, consolidated revenue ended the year down 60%. At 52%, the year-on-year decline in Duty Free revenue was less pronounced than in other countries thanks to the resilience of domestic travel. Although sales in non-transit area stores held up, the Travel Essentials and Foodservice businesses saw revenue decline by, respectively, 60% and 70% compared to 2019 as people switched from trains and subways to their cars.
Revenue in the Czech Republic fell back 50% versus 2019, mainly pushed down by the 80% year-on-year drop in air traffic at the Prague airport since March 2020. Nevertheless, Travel Essentials stores in train and metro stations showed greater resilience thanks to assortments more closely aligned with their local markets. In addition, the Foodservice business was affected by government mandated store closures, particularly in October-November 2020, when much stricter lockdown measures were deployed during the second wave of the outbreak than during the first wave in March-April.
Business in Romania declined by only 17%, buoyed by the resilience of the shopping mall network and the solid momentum in tobacco sales.
Revenue in Bulgaria was down a limited 11% year-on-year, as a significant increase in tobacco sales in the Travel Essentials network helped to offset some of the Covid-19 impact.
The Foodservice business in Iceland has been seriously hit by the health crisis, with revenue falling 80% following the almost 90% collapse in air traffic compared to 2019.
Lastly, in Africa (Senegal and Gabon) and the Middle East (Dubai and Saudi Arabia), business ended the year down respectively 45% and 66% due to the decline in air traffic.

B.4 Asia-Pacific

More than elsewhere, business in the Asia-Pacific region was particularly impacted by the extremely radical political decisions restricting both international and domestic travel. The closure of the Australian and New Zealand borders in March 2020 caused an immediate plunge in international air traffic. Australia’s state borders also remained closed for several months, which had a considerable impact on domestic traffic. As a result, revenue declined by 74% compared with 2019.
In Singapore and Hong Kong, which are exclusively international hubs, traffic slowed to a trickle in first quarter 2020, pushing revenue down by, respectively, 81% and 73% (excluding Hainan).
On 30 December 2020, Lagardère Travel Retail opened the second largest Duty Free shopping centre in Hainan, in partnership with Hainan Tourism Investment Development Co. Ltd (HTI). Lagardère Travel Retail is supplying HTI with merchandise in such categories as Perfumes & Cosmetics, Fashion & Accessories, Watches & Jewellery, Wine & Spirits, Confectionery & Fine Food and Toys, and assisting the company in operating the 30,000 sq.m in retail space on five floors.
In addition, once the Covid-19 epidemic was brought under control, business in China rebounded very quickly with an 18% gain led by the opening of the Hangzhou, Nanjing and Guangzhou platforms, the award of additional concessions in Shanghai Hongqiao and Shenzhen, and the full year contribution from the 2019 openings (Shanghai-Pudong, Beijing-Daxing, Zhengzhou, etc.). The health crisis severely impacted domestic traffic between February and May 2020, before returning to 2019 levels in the second half of the year. The crisis spurred the development of new retail channels such as online live stream shopping, where the product is presented and tried live on social media, and customers purchase with a click.
Lastly, a new organisation was set up in Japan to support the opening of two “Made in Pierre Hermé” boutiques in the Tokyo train station.

B.5 North America

In 2020, revenue in North America declined by 61.2% as reported and by 60.4% at constant scope of consolidation and exchange rates, mainly due to the health crisis and the attendant lockdowns, curfews and precautionary measures.
Nevertheless, the North American business continued to expand with the opening of new outlets over the year, including eight in Salt Lake City, six in Milwaukee, one in Broward County and three in San Antonio.
2020 revenue over the region as a whole breaks down as follows between the various segments: Travel Essentials 63%, Duty Free & Fashion 7% and Foodservice 30%.

B.6 Objectives and achievements in 2020

The main objectives for 2020 were as follows:

  • continue to improve our operational excellence;
  • successfully integrate the 2019 acquisitions and the new stores opened after their concessions were won in 2019;
  • maintain the growth dynamic;
  • step up innovation and the ability to address CSR issues in both our daily and our strategic decisions.

However, given the magnitude of the health crisis across the industry, from the beginning of the year, the focus shifted to deploying measures to protect employees and preserve operating profit and cash.

C) Outlook

The outlook for Lagardère Travel Retail’s business in 2021 primarily depends on the recovery in air traffic.
Objectives have been focused on preserving cash flow and the earnings stream, while supporting what is expected to be a recovery correlated with momentum in the vaccination campaigns. The main priorities are to:

  • continue renegotiating contractual terms with concession grantors as traffic resumes;
  • diligently manage and optimise cash flow, inventory and other working capital items;
  • align organisations with the new reality, while maintaining quality of execution and operational excellence;
  • keep pace with the recovery and spur the Group to emerge from the crisis sooner, as a stronger, more agile organisation, in particular through the “LEaP Forward” transformation and optimisation program, which is structured around the following issues:
    • optimising the corporate costs by finding the right balance between central control and local empowerment;
    • pooling more indirect procurement;
    • merchandise and procurement policies;
    • improving the supply chain and in-store processes;
    • accelerating the convergence of information systems.

With its widely recognised operational discipline, culture of empowering its subsidiaries and of performance, Lagardère Travel Retail can leverage a number of competitive advantages to 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 2020 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 6.3 million listeners(1) every day, more than 3.9 million readers(2) every week and nearly 13.5 million unique visitors(3) to its digital platforms.

A.1 Press

Lagardère News publishes Paris Match magazine and the Le Journal du Dimanche weekly newspaper.
With 13.6 million readers every month(2) 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 month, Le Journal du Dimanche reaches 4.2 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 France’s most predominant weekend newspaper 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

With its three national networks, Lagardère News is a major player in the French radio broadcasting market.
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.

Europe 1

Europe 1, France’s benchmark general-interest radio station, offers high-quality programmes for the general public, with 2.7 million daily listeners(4).

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 is enjoyed by more than 1.6 million listeners a day(4).

RFM

Every day, RFM offers to more than 2 million listeners(4) the very best of music in a general interest, family-friendly format, featuring a rich blend of pop, disco, funk and rock.

(1) Source: Médiamétrie 126,000 Radio; Monday-Friday, 5 a.m.-midnight; 13 years and older; Europe 1, Virgin Radio and RFM; November- December 2020; cumulative audience.
(2) ACPM One Next 2020 V4 / ACPM Brand One Next Global 2020 V4.
(3) Médiamétrie NetRatings, total Internet audience in France, November 2020, unduplicated audience: Europe 1 (B), Le Journal du Dimanche (B), Paris Match (B), Virgin Radio (B), RFM (B); basis: 2 years and older.
(4) Source: Médiamétrie 126,000 Radio; 13 years and older; Monday-Friday, 5 a.m.-midnight; November-December 2020; cumulative audience

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.
Lastly, it also includes a non-media licensing business (fashion, beauty, decoration, services, etc.) working with 150 licensees in 80 countries.

A.4 Advertising sales brokerage

In 2020, 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. The division brokers advertising sales for the Europe 1, Virgin Radio and RFM radio stations, Paris Match magazine and Le Journal du Dimanche weekly, as well as for Oüi FM (in greater Paris) and Radio FG (in greater Paris and Nice). These are all iconic, standard-setting brands offering a close strategic fit and firm roots in the daily lives of French people avid for news and entertainment.
The division’s brokerage services span radio, print, digital and experiential formats to meet the specific needs of advertisers, media agencies and communications consultants. Lagardère Publicité News draws on the full extent of its business expertise, innovative media solutions and powerful brands to amplify conventional media campaigns or design tailor-made communication solutions.
Lagardère Publicité News is a powerful name capable of reaching 30 million people, or 57% of the French population, over a three-week period(1).

B) Operations during 2020

Contribution to consolidated revenue in 2020: €203 million (vs €236 million in 2019).

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

  2020 2019
of which Press 34.7% 33.8%
of which Radio 49.2% 46.4%
Other (essentially Elle International) 16.1% 19.8%
Total 100 % 100 %

Breakdown of revenue by geographic area

  2020 2019
France 82.3% 76.0%
International 17.7% 24.0%
Total 100 % 100 %

2020 was shaped by the sharp slowdown in all forms of economic activity in France and around the world due to the Covid-19 health crisis and the successive lockdowns.
That led to a sharp fall in advertising sales in the five media (TV, cinema, radio, print, outdoor advertising) with internet down 9.6% in full-year 2020(2). TV proved to be the most resilient medium, with spend contracting by 11%(2), followed by radio (down 12.7%(2)) and print (down 26.2%)(3). Digital, on the other hand, was up 3%(4) in 2020.

B.1 Press

In the Press business, 2020 was doubly impacted by (i) the health crisis, which caused a decline in advertising spend in a large number of markets and a drop in store footfalls for many long weeks; and (ii) the court-ordered receivership of Presstalis in the first half.
Circulation revenue for Paris Match and Le Journal du Dimanche ended the year down 4% on a like-for-like basis, compared with a 13% decline in 2019. Within the circulation revenue stream, subscriptions held up well, digital sales rose sharply and print sales suffered. However, both titles increased their market share.
Newsstand sales of Paris Match and Le Journal du Dimanche were dampened by industrial action at Presstalis and the closure of certain sales outlets, before conditions returned to normal in late September 2020.
In this environment, Lagardère News continued to publish its titles every week, responsibly pursuing its commitment to reporting the latest political and general news without ever compromising on quality.

(1) Source: 2020.1 Cross Media survey based on March 2020 data; Affimétrie, ACPM and Médiamétrie, base 15 years and older; one month’s exposure; radio, print, fixed, mobile and tablet Internet; Lagardère Publicité News brands: Europe 1, RFM, Virgin Radio, Paris Match, Le Journal du Dimanche, excluding unreleased FG and Oüi FM results.
(2) Source: BUMP 2020.
(3) Source: BUMP 2020, commercial and digital advertising.
(4) Source: BUMP 2020, search + social networks + display + other.

  • Paris Match maintained its leading position in paid circulation among French news magazines, with an average 511,996 copies per issue in 2020, stable(1) compared to 2019. In addition, it was voted magazine of the year by the French Union of Magazine Publishers (SEPM).
  • Le Journal du Dimanche confirmed its position as one of France’s leading national newspapers, with a 5.2%(1) increase in paid circulation in 2020 and an average 147,958 copies per issue.

In advertising:

  • The magazine market suffered a severe 29.7% decline following the withdrawal of advertisers across a number of industries, including luxury goods, automobiles, cruises, travel and tourism(2). Paris Match struggled in this environment, with reported performance further dampened by an unfavourable comparison with the very news-heavy 2019 (Notre Dame cathedral fire, death of Jacques Chirac, 70th anniversary of Paris Match, etc.).
  • Le Journal du Dimanche demonstrated firm resilience in a newspaper market down 16.2%(2), delivering revenue on a par with 2019.

In the digital segment:

  • In 2020, Paris Match welcomed, on average, more than 5.4 million unique visitors to its website and its app every month, or 760,000 more than in 2019(3). It also maintained an extensive social media presence with three million followers.
  • Le Journal du Dimanche welcomed, on average, nearly 3.1 million unique visitors to its website and its app every month, or 822,000 more than in 2019(3). Since May 2019, the website has posted a daily newsletter, Le Journal de Demain, at 6:30 p.m. from Monday to Saturday, in the spirit of the print edition’s editorial promise to give readers a head start on tomorrow’s news.

B.2 Radio

Europe 1

Key figures:

In 2020, Europe 1 had a cumulative audience of 5%(4), down 0.5 points compared with 2019 and down 1.4 points compared with 2018.
Audience share stood at 4.1%(4), down 0.2 points on 2019 and 1 point on 2018.
Europe 1’s 2020 performance against its commercial targets was as follows:

  • 2.8% audience share in the 25-59 demographic(5), down 0.1 points versus 2019 and 0.6 points versus 2018;
  • 3.8% audience share among AB+ listeners(6), down 0.1 points compared with 2019 and 1.1 points compared with 2018.

For the 2020-2021 season, Europe 1 is focused on maintaining a sense of continuity, with Matthieu Belliard continuing to anchor the morning slot and Sonia Mabrouk conducting the political interview, but with Nicolas Canteloup providing two comedic interludes this season. During the rest of the day, listeners could enjoy such familiar voices as Christophe Hondelatte, Anne Roumanoff, Olivier Delacroix, Patrick Cohen, Émilie Mazoyer and Mélanie Gomez.
In a commitment to moving upmarket and gaining new listeners, Europe 1 refreshed its line-up by bringing in two major talents, with Stéphane Bern joining Matthieu Noël between 4 p.m. and 6 p.m. and Julian Bugier taking the helm for Europe Soir.
They will support Europe 1’s goal of further expanding its global horizons to reaffirm the station’s solid positioning in its four traditional pillars: news, entertainment, culture and storytelling. As exemplified in the La France bouge programme, Europe 1 wants to express an optimistic, constructive vision of tomorrow’s world, as it continues to engage with people seeking to push back borders, innovate and actively participate in building a positive, harmonious society. More than ever, Europe 1 hopes to let its advertising slogan resonate and “listen to the world change.”
Lastly, the station is demonstrating its agility in responding to new listening patterns with innovative content. In one example, more than 107 million podcasts(7) were downloaded in 2020, a 30% increase on 2019 that has firmly established the station as a leading player in this new market.

Music radio

Of all the radio stations in France, Virgin Radio is the one that resonates most with the 25-49 demographic, which represents nearly three out of four listeners (71%).

In a very anaemic music radio market, where the health crisis had an outsized impact on younger programming, Virgin Radio reported a cumulative audience of 3% and an audience share of 1.9%(8).
2020 saw the departure of Camille Combal in June, after six seasons on Virgin Radio in the morning, and the arrival of Manu Payet, who took over as anchor of Virgin Tonic, the morning show in the 7 a.m. to 10 a.m. slot.
From September to December, Manu’s show reached more than one million listeners(9), comparable to his predecessor’s audience numbers from January to June (excluding the lockdown).
It also remained the second most popular music station morning show with the 25-49 age bracket, based on cumulative audience(10).

RFM, steadfast loyalty:

Listened to by more than 2 million people each day, RFM still enjoys one of the longest time spent listening levels in the French music radio market, at one hour 35 minutes a day, or four minutes more than in 2019(11).

(1) Source: ACPM-OJD 2020.
(2) Source: BUMP 2020.
(3) Source: Médiamétrie - NetRatings Global Internet; Average January-November 2020 vs. Average January-November 2019.
(4) Source: Médiamétrie 126,000 Radio; 13 years and older; Monday-Friday, 5 a.m.-midnight; January-December 2020; cumulative audience and audience share.
(5) Source: Médiamétrie 126,000 Radio; 25-59 years; Monday-Friday; 5 a.m.-midnight; January-December 2020; audience share.
(6) Source: Médiamétrie 126,000 Radio; AB+ listeners; Monday-Friday; 5 a.m.-midnight; January-December 2020; audience share
(7) Source: Médiamétrie eStat Podcast; 2020 vs. 2019.
(8) Source: Médiamétrie 126,000 Radio; 13 years and older; average Monday-Friday, 5 a.m.-midnight; November-December 2020; cumulative audience and audience share.
(9) Source: Médiamétrie 126,000 Radio; 13 years and older; average Monday-Friday, 7 a.m. to 10 a.m.; September-December 2020; cumulative audience.
(10) Source: Médiamétrie 126,000 Radio; 25-49 years; average Monday-Friday; 7 a.m. to 10 a.m.; September-December 2020; cumulative audience; ranking among music stations.
(11) Source: Médiamétrie 126,000 Radio; 13 years and older; average Monday-Friday; 5 a.m. to midnight; November-December 2020 vs. November- December 2019; cumulative audience and time spent listening per listener

The station’s performance is being buoyed by:

  • a strong morning line-up, with Élodie Gossuin and Albert Spano in the 6 a.m. to 9:30 a.m. slot helping more than one million listeners to start their day. Audience share of their programme, Le Meilleur des Réveils rose by 0.2 points to 2.6% over the year(1);
  • increasingly popular musical programming, with the 9:30 a.m. to 4 p.m. slot gaining 61,000 new listeners and 0.1 points of audience share(2);
  • historically high weekend audiences, with a 4% share topping the French music station league tables (3).

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 2020
Europe 1 9.0% 8.9% 9.0% 8.1% 7.2% 6.4% 5.5% 5.0%
Virgin Radio 4.3% 4.2% 4.7% 5.0% 4.8% 4.5% 4.3% 3.4%
RFM 4.4% 4.6% 4.5% 4.4% 4.2% 4.1% 4.0% 3.9%

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

B.3 Elle international

For Elle’s international licensing business, 2020 was shaped by:

In the media segment:

  • the launch of Elle in Brazil;
  • the launch of Elle in Kazakhstan;
  • the signature of a worldwide Elle Education licensing agreement for online education programmes;
  • further development of certain online events, with Elle Active (France, Italy, Japan, etc.), Elle Deco International Design Awards, etc.;
  • the simultaneous publication of Special Green issues in 30 editions of Elle and 10 editions of Elle Decoration, to celebrate the 50th anniversary of Earth Day.

In the non-media segment:

  • the launch of an Elle Decoration paint collection with Crown in Europe;
  • the launch of a women’s ready-to-wear fashion line in Japan with QVC;
  • the launch of Elle Sport, Elle Lingerie and Elle Kids in the United Kingdom;
  • the signature of a worldwide Elle Decoration wallpaper licensing agreement with Erismann;
  • the signature of a hairdresser salon contract in China.

B.4 Objectives and achievements in 2020

In 2020, the Lagardère News teams demonstrated agility, commitment and creativity in responding to the year’s very unusual business environment. They worked hard to keep all of the division’s media vibrant and capable of fulfilling their core news and entertainment missions. In this completely novel situation, they steadfastly continued to offer reliable, insightful news and highquality entertainment.
Lagardère News also remained sharply focused on diligently managing costs to limit the impact of the decline in its revenues.

C) Outlook

The 2021 outlook primarily depends on the recovery of advertising. Lagardère News remains committed to asserting its identity as a group of influential, creative, impactful media brands.
While continuing to optimise costs across the business base, Lagardère News will pursue its core objectives in 2021, to express its identity and develop synergies, restore Europe 1’s audience numbers, drive the faster digital transformation of its Press business, broaden the Elle branded business, grow the radio stations and diversify the revenue stream.

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:

  • the production of live shows and concerts;
  • the management of concert and entertainment venues.

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 2020, Lagardère Live Entertainment and its subsidiaries employed the full-time equivalent of 101 people across France (including occasional performers).

(1) Source: Médiamétrie 126,000 Radio; 13 years and older; average Monday-Friday; 6 a.m. to 9:30 a.m.; November-December 2020 vs. November- December 2019; cumulative audience and audience share.
(2) Source: Médiamétrie 126,000 Radio; 13 years and older; average Monday-Friday; 9:30 a.m. to 4 p.m.; November-December 2020 vs. November- December 2019; cumulative audience and audience share.
(3) Source: Médiamétrie 126,000 Radio; 13 years and older; average Saturday-Sunday, 5 a.m.-midnight; November-December 2020; audience share.

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, Laurie Darmon and Philippine Delaire.
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 Les Souliers Rouges, 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 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: A year marred by the health crisis in 2020

Contribution to consolidated revenue in 2020: €5.4 million (vs €27.1 million in 2019).

Breakdown of revenue by activity

  2020 2019
of which production of live shows and concerts 13% 38%
of which venue management 87% 62%
Total 100% 100%

In 2019, Lagardère Live Entertainment took a new step forward in cementing its position as the French market leader in show production, thanks to a year that saw outstanding attendance in its concert halls and record ticket sales for its artists.
Unfortunately, in 2020, the company was prevented from maintaining its growth momentum by the Covid-19 crisis and the resulting government-mandated health precautions that directly impacted the live entertainment business.
In an attempt to fight the spread of the Covid-19 virus, the government imposed a series of restrictions from March 2020:

  • March 15 to June 2020: entertainment venues closed to the public;
  • July to October 2020: successively, capacity limited to 1,000 people; mandatory seating and face masks; each group of fewer than six people spaced at least one seat apart; curfew from 9 p.m. to 6 a.m., etc.;
  • November to December 2020: entertainment venues closed to the public.

These measures and the health crisis forced the postponement of Jean-Louis Aubert’s tour in 2021, the cancellation of tours by -Mand emerging talents Leonie and Laurie Darmon, and the shutdown of the Les Souliers Rouges show, then running at the Folies Bergère.

B.1 Production of Live Shows and Concerts

2020 was expected to be a prolific year, with:

  • the continuation and finale of the -M- tour;
  • Jean-Louis Aubert’s tour, with 30 shows scheduled on the Zénith circuit;
  • Les Souliers Rouges at the Folies Bergère;
  • Laurie Darmon and Leonie on tour, first in clubs and then in festivals.

Nevertheless, this very unusual year enabled Lagardère Live Entertainment to sign emerging new talents like comedian Philippine Delaire, while expanding the digital presence of its artists via live streaming. -M- and Jean-Louis Aubert, for example, were among the artists attracting the most views during their Facebook Live events.
At the same time, the company pursued its commitment to raising awareness of social responsibility issues among its employees, contract entertainment workers and service providers. During the tours, this commitment was demonstrated by such initiatives as replacing single-use bottled water with water fountains and personalised water bottles and implementing selective waste sorting systems, etc.

B.2 Venue management

After an exceptional year in 2019, with 743 shows and more than one million spectators, the above-mentioned health measures unfortunately prevented the venues from operating normally in 2020. In all, more than 300 shows were postponed or cancelled in Lagardère Live Entertainment venues.

C) Outlook

The primary objective in 2021 will be to restart the business as soon as possible in compliance with any social distancing, reduced capacity and customer journey rules. Adaptability will remain the guiding principle, as it was throughout the past year.
Although activity in entertainment venues is likely to remain very limited in first-half 2021 due to the ongoing health restrictions, a return to more normal levels is expected in the second half of the year.
On the show production side, the major upcoming event will be the Jean-Louis Aubert and Florent Pagny tours in the autumn of 2021. Over the medium term, Lagardère Live Entertainment’s objective will be to maintain its market leadership in show production.
The company will also continue to expand through its subsidiary L Productions, by signing both marquee stars and emerging artists, supported in particular by its constant A&R search for the new talents who will make the music of tomorrow.