6.2 Outlook AFR
Further to its strategic refocusing, the Group’s balance is based on two main divisions – Lagardère Publishing and Lagardère Travel Retail – for which the effects of the health crisis diverge sharply. For 2021, the environment remains uncertain against the backdrop of a gradual easing of the intensity of the pandemic. Lagardère is pressing ahead with its Group-wide cost cutting efforts.
For Lagardère Publishing, the positive impacts on its book sales are likely to diminish in 2021, as leisure and cultural establishments reopen for business. In addition, the absence of any curriculum reform in 2021 will counter the positive impacts of the release of the new Asterix album in the fourth quarter of 2021.
The favourable mix effect driven by strong digital media sales in 2020, particularly in English-speaking countries, is expected to diminish and slightly affect profitability in 2021.
Trading at Lagardère Travel Retail closely mirrors trends in air passenger traffic. Lagardère Travel Retail will press ahead with the earnings protection initiatives launched in 2020, which resulted in a very favourable flow-through ratio of 19.9% in 2020, a benchmark in its industry. These cost-cutting actions should enable Lagardère Travel Retail to minimise flow through in 2021 versus 2019, depending on the pace of the recovery. Lagardère Travel Retail is also actively continuing efforts to control cash, especially as regards working capital and capital expenditure in 2021.
In light of the various aforementioned uncertainties, the Lagardère group did not issue any guidance for 2021.