Note 5 - Segment information
Under the impetus of Arnaud Lagardère, General and Managing Partner, the Group launched a strategic refocusing around two priority divisions, Lagardère Publishing and Lagardère Travel Retail. The Group restructured in 2019 in the wake of the successive disposals of Lagardère Active and Lagardère Sports assets. Its internal reporting is now based on a target business scope, comprising:
- Lagardère Publishing, which includes the Group’s Book Publishing and e-Publishing businesses, covering such areas as Education, General Literature, Illustrated Books, Partworks, Dictionaries, Youth Works, Mobile Games, Board Games and Distribution.
- Lagardère Travel Retail, which consists of retail operations in transit areas and concessions in three business segments: Travel Essentials, Duty Free & Fashion, and Foodservice.
The target scope also includes “Other Activities”, which groups together Lagardère News (Paris Match and Le Journal du Dimanche magazine titles, Europe 1, RFM and Virgin Radio stations, and the Elle brand licence), Lagardère Live Entertainment, Lagardère Paris Racing, and the Group Corporate function. The Corporate function is used primarily to report the effect of financing obtained by the Group and the net operating costs of Group holding companies.
Assets sold or disposals pending completion relating to the former Lagardère Active division (Lagardère Studios) and Lagardère Sports are being monitored separately. Lagardère Sports was sold on 22 April 2020 and Lagardère Studios on 30 October 2020.
The data presented by division were calculated using the same accounting rules and methods as those used in the consolidated financial statements and described in the accompanying notes. The data include key alternative performance measures.
Transactions between business divisions are generally carried out on arm’s length terms.
Comparative information takes into account the reallocation of goodwill in 2019.
5.1 SEGMENT INFORMATION
2020 income statement
| Lagardère Publishing | Lagardère Travel Retail | Other Activities | Total target scope | Assets sold and disposals pending completion at Lagardère Active | Total | Lagardère Sports | |
| Revenue | 2,379 | 1,720 | 229 | 4,328 | 115 | 4,443 | 84 |
| Inter-segment revenue | (4) | - | - | (4) | - | (4) | - |
| Consolidated revenue | 2,375 | 1,720 | 229 | 4,324 | 115 | 4,439 | 84 |
| Other income from ordinary activities | 4 | 18 | 21 | 43 | (2) | 41 | 2 |
| Total income from ordinary activities | 2,379 | 1,738 | 250 | 4,367 | 113 | 4,480 | 86 |
| Recurring operating profit (loss) of fully consolidated companies | 246 | (353) | (47) | (154) | (1) | (155) | (2) |
| Income (loss) from equity accounted companies before impairment losses | 2 | (59) | (1) | (58) | - | (58) | - |
| Restructuring costs | (9) | (36) | (10) | (55) | - | (55) | (3) |
| Gains (losses) on disposals | - | - | (6) | (6) | (1) | (7) | (14) |
| Disposals of assets | - | - | (6) | (6) | (1) | (7) | (14) |
| Fair value adjustments due to change in control | - | - | - | - | - | - | - |
| Impairment losses(*) | (20) | (106) | (6) | (132) | (19) | (151) | - |
| Fully consolidated companies | (20) | (106) | (6) | (132) | (19) | (151) | - |
| Amortisation of acquisition-related intangible assets | (7) | (97) | - | (104) | - | (104) | - |
| Expenses related to acquisitions and disposals | (4) | - | (1) | (5) | - | (5) | - |
| Purchase price adjustment | - | 3 | - | 3 | - | 3 | - |
| Impact of IFRS 16 on concession Agreements | - | (17) | - | (17) | - | (17) | - |
| Gains and losses on leases | - | 171 | - | 171 | - | 171 | - |
| Depreciation of right-of-use assets | - | (401) | - | (401) | - | (401) | - |
| Decrease in lease liabilities | - | 175 | - | 175 | - | 175 | - |
| Interest paid on lease liabilities | - | 32 | - | 32 | - | 32 | - |
| Changes in working capital relating to lease liabilities | - | 6 | - | 6 | - | 6 | - |
| Profit (loss) before finance costs and tax | 208 | (665) | (71) | (528) | (21) | (549) | (19) |
| Items included in recurring operating profit (loss) of fully consolidated companies | |||||||
| Depreciation and amortisation of property, plant and equipment and intangible assets | (36) | (138) | (10) | (184) | (3) | (187) | (5) |
| Depreciation of right-of-use assets – Buildings and other | (32) | (16) | (23) | (71) | (1) | (72) | (3) |
| Cost of free share plans | (3) | (1) | (1) | (5) | - | (5) | - |
(*) Impairment losses on goodwill, property, plant and equipment and intangible assets.
2019 income statement
| Lagardère Publishing | Lagardère Travel Retail | Other Activities | Total target scope | Assets sold and disposals pending completion at Lagardère Active | Total | Lagardère Sports | |
| Revenue | 2,395 | 4,264 | 288 | 6,947 | 275 | 7,222 | 470 |
| Inter-segment revenue | (11) | - | - | (11) | - | (11) | - |
| Consolidated revenue | 2,384 | 4,264 | 288 | 6,936 | 275 | 7,211 | 470 |
| Other income from ordinary activities | 6 | 31 | 38 | 75 | 9 | 84 | - |
| Total income from ordinary activities | 2,390 | 4,295 | 326 | 7,011 | 284 | 7,295 | 470 |
| Recurring operating profit (loss) of fully consolidated companies | 220 | 152 | (11) | 361 | 17 | 378 | 64 |
| Income (loss) from equity accounted companies before impairment losses | 1 | 4 | 1 | 6 | - | 6 | - |
| Restructuring costs | (12) | (14) | (15) | (41) | (1) | (42) | (20) |
| Gains (losses) on disposals | - | (1) | 142 | 141 | (7) | 134 | - |
| Disposals of assets | - | (1) | 142 | 141 | (8) | 133 | - |
| Fair value adjustments due to change in control | - | - | - | - | 1 | 1 | - |
| Impairment losses (*) | - | (6) | (2) | (8) | (26) | (34) | (234) |
| Fully consolidated companies | - | (6) | (2) | (8) | (26) | (34) | (234) |
| Amortisation of acquisition-related intangible assets | (6) | (79) | - | (85) | - | (85) | (1) |
| Expenses related to acquisitions and disposals | (1) | (2) | - | (3) | (1) | (4) | (6) |
| Purchase price adjustment | (1) | (1) | - | (2) | - | (2) | (2) |
| Impact of IFRS 16 on concession Agreements | - | 60 | - | 60 | - | 60 | - |
| Gains and losses on leases | - | 3 | - | 3 | - | 3 | - |
| Depreciation of right-of-use assets | - | (475) | - | (475) | - | (475) | - |
| Decrease in lease liabilities | - | 460 | - | 460 | - | 460 | - |
| Interest paid on lease liabilities | - | 64 | - | 64 | - | 64 | - |
| Changes in working capital relating to lease liabilities | - | 8 | - | 8 | - | 8 | - |
| Profit (loss) before finance costs and tax | 201 | 113 | 115 | 429 | (18) | 411 | (199) |
| Items included in recurring operating profit (loss) of fully consolidated companies | |||||||
| Depreciation and amortisation of property, plant and equipment and intangible assets | (34) | (130) | (11) | (175) | (5) | (180) | (60) |
| Depreciation of right-of-use assets – Buildings and other | (32) | (15) | (24) | (71) | - | (71) | (12) |
| Cost of free share plans | (3) | (2) | (1) | (6) | - | (6) | (1) |
(*) Impairment losses on goodwill, property, plant and equipment and intangible assets.
2020 statement of cash flows
| Lagardère Publishing | Lagardère Travel Retail | Other Activities | Total target scope | Assets sold and disposals pending completion at Lagardère Active | Total | Lagardère Sports and eliminations | |
| Cash flow from (used in) operating activities | 355 | (102) | (42) | 211 | 25 | 236 | (7) |
| Decrease in lease liabilities (*) | (32) | (190) | (12) | (234) | (2) | (236) | (3) |
| Interest paid on lease liabilities (*) | (11) | (34) | (4) | (49) | - | (49) | - |
| Cash flow from (used in) operations before income taxes paid | 312 | (326) | (58) | (72) | 23 | (49) | (10) |
| Income taxes paid | (50) | (6) | 21 | (35) | (3) | (38) | - |
| Cash flow from (used in) operations | 262 | (332) | (37) | (107) | 20 | (87) | (10) |
| Net cash used in investing activities relating to intangible assets and property, plant and equipment | (39) | (120) | (7) | (166) | (3) | (169) | (6) |
| - Purchases | (39) | (121) | (7) | (167) | (3) | (170) | (6) |
| - Proceeds from disposals | - | 1 | - | 1 | - | 1 | - |
| Free cash flow | 223 | (452) | (44) | (273) | 17 | (256) | (16) |
| o/w free cash flow before changes in working capital | 155 | (344) | (44) | (233) | (6) | (239) | 7 |
| Net cash from (used in) investing activities relating to investments | (29) | 3 | 85 | 59 | 1 | 60 | (78) |
| - Purchases | (31) | (2) | (2) | (35) | (1) | (36) | (10) |
| - Proceeds from disposals | 2 | 5 | 87 | 94 | 2 | 96 | (68) |
| Interest received | 2 | 1 | 2 | 5 | - | 5 | - |
| (Increase) decrease in short term investments | - | - | - | - | - | - | - |
| Cash flow from (used in) operations and investing activities | 196 | (448) | 43 | (209) | 18 | (191) | (94) |
(*) Cash flows relating to lease liabilities are shown within net cash from financing activities in the consolidated statement of cash flows.
2019 statement of cash flows
| Lagardère Publishing | Lagardère Travel Retail | Other Activities | Total target Scope | Assets sold and disposals pending completion at Lagardère Active | Total | Lagardère Sports and eliminations | |
| Cash flow from (used in) operating activities | 306 | 797 | (8) | 1,095 | 29 | 1,124 | 69 |
| Decrease in lease liabilities(*) | (32) | (475) | (12) | (519) | 1 | (518) | (12) |
| Interest paid on lease liabilities(*) | (10) | (66) | (1) | (77) | - | (77) | (1) |
| Cash flow from (used in) operations before income taxes paid | 264 | 256 | (21) | 499 | 30 | 529 | 56 |
| Income taxes paid | (43) | (26) | 24 | (45) | (7) | (52) | (20) |
| Cash flow from (used in) operations | 221 | 230 | 3 | 454 | 23 | 477 | 36 |
| Net cash used in investing activities relating to intangible assets and property, plant and equipment | (35) | (156) | 15 | (176) | (7) | (183) | (48) |
| - Purchases | (35) | (162) | (11) | (208) | (7) | (215) | (48) |
| - Proceeds from disposals | - | 6 | 26 | 32 | - | 32 | - |
| Free cash-flow | 186 | 74 | 18 | 278 | 16 | 294 | (12) |
| o/w free cash flow before changes in working capital | 151 | 87 | (12) | 250 | 10 | 260 | 28 |
| Net cash from (used in) investing activities relating to investments | (30) | (244) | 306 | 32 | (3) | 29 | 8 |
| - Purchases | (32) | (249) | (3) | (284) | (3) | (287) | (1) |
| - Proceeds from disposals | 2 | 5 | 309 | 316 | - | 316 | 9 |
| Interest received | 2 | 3 | 2 | 7 | - | 7 | - |
| (Increase) decrease in short term investments | - | - | - | - | - | - | - |
| Cash flow from (used in) operations and investing activities | 158 | (167) | 326 | 317 | 13 | 330 | (4) |
(*) Cash flows relating to lease liabilities are shown within net cash from financing activities in the consolidated statement of cash flows.
Balance sheet at 31 December 2020
| Lagardère Publishing | Lagardère Travel Retail | Other Activities and eliminations | Total | ||||
| Segment assets | 3,140 | 3,971 | 631 | 7,742 | |||
| Investments in equity-accounted companies | 30 | 16 | 6 | 52 | |||
| Segment liabilities | (1,999) | (2,674) | (561) | (5,234) | |||
| Capital employed | 1,171 | 1,313 | 76 | 2,560 | |||
| Assets held for sale and associated liabilities | - | ||||||
| Net cash and cash equivalents (net debt) | (1,733) | ||||||
| Equity | 827 | ||||||
Balance sheet at 31 December 2019
| Lagardère Publishing | Lagardère Travel Retail | Other Activities and eliminations | Total | ||||
| Segment assets | 3,187 | 5,310 | 652 | 9,149 | |||
| Investments in equity-accounted companies | 29 | 37 | 7 | 73 | |||
| Segment liabilities | (1,910) | (3,756) | (624) | (6,290) | |||
| Capital employed | 1,306 | 1,591 | 35 | 2,932 | |||
| Assets held for sale and associated liabilities(*) | 201 | ||||||
| Net cash and cash equivalents (net debt) | (1,461) | ||||||
| Equity | 1,672 | ||||||
(*) Assets held for sale and associated liabilities include Lagardère Sports and the Audiovisual Production business at Lagardère Active (see note 4.3).
5.2 INFORMATION BY GEOGRAPHICAL SEGMENT
Revenue
| 2020 | 2019 | |
| France | 1,248 | 2,034 |
| European Union (excl. France) | 1,482 | 2,415 |
| Other European countries | 69 | 147 |
| United States and Canada | 1,109 | 1,752 |
| Middle East | 22 | 34 |
| Asia-Pacific | 406 | 690 |
| Other (Africa, Latin America) | 103 | 139 |
| Total | 4,439 | 7,211 |
Segment assets
| 31 Dec. 2020 | 31 Dec. 2019 | |
| France | 2,110 | 2,170 |
| European Union (excl. France) | 2,619 | 3,429 |
| Other European countries | 173 | 202 |
| United States and Canada | 2,288 | 2,582 |
| Middle East | 19 | 23 |
| Asia-Pacific | 482 | 682 |
| Other (Africa, Latin America) | 51 | 61 |
| Total | 7,742 | 9,149 |
Purchases of intangible assets and property, plant and equipment
| 2020 | 2019 | |
| France | 42 | 55 |
| European Union (excl. France) | 41 | 58 |
| Other European countries | - | 2 |
| United States and Canada | 63 | 71 |
| Middle East | - | 1 |
| Asia-Pacific | 22 | 25 |
| Other (Africa, Latin America) | 2 | 3 |
| Total | 170 | 215 |