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Lagardère<br />
France/Media Analyser<br />
Lagardère (Hold)<br />
Hold<br />
Recommendation unchanged<br />
Share price: EUR<br />
closing price as of 07/05/2012<br />
Target price: EUR<br />
Target Price unchanged<br />
Reuters/Bloomberg<br />
23.73<br />
24.00<br />
L<strong>AG</strong>A.PA/MMB FP<br />
Market capitalisation (EURm) 3,182<br />
Current N° of shares (m) 134<br />
Free float 89%<br />
Daily avg. no. trad. sh. 12 mth 488,622<br />
Daily avg. trad. vol. 12 mth (m) 13<br />
Price high 12 mth (EUR) 29.49<br />
Price low 12 mth (EUR) 16.25<br />
Abs. perf. 1 mth 9.18%<br />
Abs. perf. 3 mth 8.73%<br />
Abs. perf. 12 mth -17.96%<br />
Key financials (EUR) 12/10 12/11e 12/12e<br />
Sales (m) 9,570 9,199 8,781<br />
EBITDA (m) 742 (484) 635<br />
EBITDA margin 7.8% nm 7.2%<br />
EBIT (m) 334 (722) 408<br />
EBIT margin 3.5% nm 4.6%<br />
Net Profit (adj.)(m) 189 (849) 348<br />
ROCE 8.7% 9.2% 7.6%<br />
Net debt/(cash) (m) 2,129 1,525 1,697<br />
Net Debt/Equity 0.4 0.4 0.5<br />
Debt/EBITDA 2.9 -3.2 2.7<br />
Int. cover(EBITDA/Fin. int) 7.5 (4.2) 7.9<br />
EV/Sales 0.5 0.4 0.4<br />
EV/EBITDA 6.7 nm 5.8<br />
EV/EBITDA (adj.) 5.5 4.5 5.6<br />
EV/EBIT 14.8 nm 9.0<br />
P/E (adj.) 27.8 nm 11.6<br />
P/BV 1.1 0.9 1.0<br />
OpFCF yield 7.0% 0.1% 1.8%<br />
Dividend yield 5.5% 5.5% 5.5%<br />
EPS (adj.) 1.33 (6.01) 2.46<br />
BVPS 34.81 27.09 28.20<br />
DPS 1.56 1.56 1.56<br />
30 vvdsvdvsdy<br />
28<br />
26<br />
24<br />
22<br />
20<br />
18<br />
16<br />
Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12<br />
Source: Factset<br />
Analyst(s):<br />
L<strong>AG</strong>ARDERE Stoxx Media (Rebased)<br />
Eric Ravary, CM - CIC Securities<br />
eric.ravary@cmcics.com<br />
+33 1 45 96 79 53<br />
Small Internet acquisition<br />
The facts: yesterday morning Lagardère announced the launch of a friendly<br />
takeover bid for LeGuide.com, at a price of EUR24, vs a closing price on Friday of<br />
EUR19.92.<br />
Our analysis: This values LeGuide.com at EUR84m, and EUR52m in terms of EV<br />
(net of cash on the balance sheet at end-2011), to be compared to 2011 revenue<br />
of EUR28.3m and EBIT of EUR9.3m, i.e. a reasonable multiple of 5.6x 2011 EBIT.<br />
LeGuide.com is a shopping guide operator that allows the comparing of 161m<br />
offers from 76,200 e-merchants; it totals 16.8m unique visitors (before the recent<br />
acquisition of Ciao, a German competitor) and operates in 14 European countries.<br />
The management should remain under the company's orders. Lagardère is<br />
resuming its Internet acquisitions, the last of which took place in the midst of the<br />
bubble, in 2007, and led to large writedowns on the balance sheet; on a group<br />
scale, this operation is modest, but it is difficult to see its coherence with the<br />
group's Media activities: the company has explained that it wishes to develop and<br />
monetise Internet audiences excluding Media (bearing in mind that the<br />
monetisation of its Media websites has stalled).<br />
Conclusion & Action: At the <strong>AG</strong>M on 3 May, the management indicated that the<br />
Q3 revenue (release on 10 May) would fall (we forecast +0.4%, but our forecast of<br />
stability in Sport is probably optimistic; we forecast -4% for advertising revenue).<br />
We advise waiting for better visibility over withdrawal from Canal+ (despite<br />
confirmation of the intention to launch an IPO at the end of 2012) and the paying<br />
out of cash to shareholders to awaken interest in a discounted stock; Sport<br />
remains a risk factor threatening earnings.<br />
Page 28 of 80 European Securities Network<br />
Please refer to important disclaimer on the last page
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