Year-End Report Shows Hachette Performed Well

March 20, 2008
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March 14 – March 20, 2008 Edition

Year-End Report

Shows Hachette

Performed Well

PARIS/3/13/08– Lagardere SCA, the French publishing and media giant, reported yesterday that Hachette publishing units in the U.S. and Canada contributed 18% (about $500 million) to total publishing group sales of €2.13 billion ($2.77 billion) for 2007. The financial report from Lagardere includes full-year results from Time Warner Trade Group, which had 2006 revenues of about $408 million (16%).

Lagardere spokesmen said the North American publishing units have not experienced cutbacks in consumer spending yet, but a recession is possible later in the year.

The full Lagardere Publishing (formerly the Books division) division ended full-year performance with sales up 4.7% on a like-for-like basis and 8.6% on a reported basis at €2,130m. Growth was driven primarily by operations in the United States and in Spain (where Education performed well). Sales of bestsellers in the United Kingdom and France accelerated sharply in the latter part of the year.

Consolidated financial statements for the year ending December 31, 2007 were presented to the Supervisory Board March 12.

Key figures for the year ended December 31, 2007:

Net sales: solid growth of 8.5% to €8,582m (up 3.3% on a like-for-like basis). Strong growth of 22% in recurring EBIT before associates to €636m, and 10.4% growth for the Media division (excluding Lagardere Sports, and at a constant euro/dollar rate of 1.30). Positive contribution of €211m from non-recurring/non-operating items (vs. a negative contribution of €40m in 2006). The 2007 figure mainly comprises a €472m gain arising on the sale of a 2.5% interest in EADS, less €203m of impairment losses on some Media division assets. Increase in net interest expense to €204m (vs. €174m 4m in 2006), mainly as a result of Lagardere’s acquisitions policy (20% of Canal+ France, Newsweb in late 2006; Sportfive, Jumpstart, Nextedia and other businesses in 2007) and share buybacks. Strong growth in net income to €534m (vs. €291m in 2006). ). Excluding the contribution from EADS, and after stripping out non-recurring/non-operating items and the effect on net interest expense of the Mandatory Exchangeable Bond(2), adjusted net income was €361m (vs. €389m in 2006). Adjusted ed earnings per share was down slightly (by 3.2%) at €2.70, due mainly to an increase in interest expense (some of which was not immediately tax-deductible) arising from the financing of the acquisitions made in 2007 and from a lower contribution from Canal+ France (as compared with the CanalSat contribution in 2006).

Digital revenues rose sharply during the year, contributing 3.1% of Lagardere Active net sales in 2007 compared with approximately 1% in 2006.

Lagardere Publishing recorded a fine performance, with recurring EBIT before associates up 9.4% (operating margin: 11.2%). All operating segments contributed to growth. France had a good year, thanks largely to Education and Larousse, which benefited from remedial measures taken in 2006. The United States (strong performance by bestsellers) and Spain (good year in Education) also stood out.

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