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Warner’s New Owner Lagard’re Sees Growth in ’06

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September 21 – September 28, 2006 Edition

Warner’s New

Owner Lagard’re

Sees Growth in ’06

PARIS, FRANCE/9/21/06—Lagard’re, a leading French media and technology group, reported a 7.6 percent increase in media group earnings before taxes in the first half of the year for 2006. The company, which bought Time Warner Books Group earlier this year, has renamed that division Hachette Book Group USA, home of Warner Books, Little Brown and several other U.S. imprints.

Lagard’re “Books” segment performed well despite tough comparatives in the early part of the year. Sales rose by 2.0% like-for-like (13.6% on a reported basis). Sales in General Literature fell in France, but by less than expected, with the dwindling Dan Brown effect partly offset by healthy sales at some other publishers, especially Fayard. Part-Works, General Literature in the UK, Education and Distribution all reported highly satisfactory growth. The first-time consolidation of Time Warner Book Group from April 2006 added €98m to first-half net sales.

The favorable “Books” increase helped offset slower sales in the “Press” segment where net sales slipped by 1.1% on a like-for-like basis. The Press unit is faced with challenging market conditions in terms of both advertising (low advertising spend on auto magazines in the United States) and circulation (magazines for men in France).

The company expects the “Books” segment to end in good growth for 2006, as the seasonal upswing in the Education business cuts in from the third quarter, while the Press segment will remain flat. The better-than-expected performances from the “Books”, “Distribution” and “Active” segments are offsetting the current weakness of the “Press” segment.

Thus the company is forecasting an overall like-for-like growth in Media activities to be up by about 5% or more by year’s end.

Hachette has licensed the use of the Warner Books logo from Warner’s former parent, Time Warner Inc. Hachette, which bought the Warner Books Group from Time Warner, Inc. earlier this year, is not affiliated with Time Warner, Inc.