Consolidated revenue, Q1 2016 1,586 million compared to 1,572 million in Q1 2015, i.e. growth of 0.9% on a consolidated basis, -2.0% like-for-like and 1.8% like-for-like excluding the calendar impact of sporting events Lagard re confirms its target for recurring EBIT(1) for 2016 Press release (pdf - 498 kB)
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Arnaud Lagard re, General and Managing Partner of Lagard re SCA, said:
As expected, 2016 started out with revenue up 0.9% on a consolidated basis.
During this first quarter, the implementation of our strategic plan led us to continue to reduce our involvement in Distribution and to forge ahead with the integration of the acquisitions of Paradies in the United States and Grupo Boomerang TV in Spain. We also moved to acquire complementary businesses in particular Rising Stars in the United Kingdom, akzio! ajoint and UFA Sports in Germany and, more recently, Perseus in the United States.
Based on this first quarter, we confirm the target for Group Recurring EBIT announced on March 9, while remaining vigilant, given the unstable geopolitical environment and the possible repercussions on our business activities.
I. FIRST-QUARTER REVENUE Group consolidated revenue in the first quarter of 2016 stood at 1,586 million, compared to 1,572 million for the same period in 2015, up 0.9% on a consolidated basis. Like-for-like, this growth came out to -2.0%, adjusted firstly for a - 10 million negative foreign exchange effect mainly due to the depreciation of the pound sterling, the Canadian dollar and the Australian dollar and, secondly, a positive scope effect of 54 million, broken down as follows:
Impact of disposals amounting to - 103 million, primarily relating to divesting from Press Distribution in Switzerland (Naville), the United States (Curtis), and Spain (SGEL) at Lagard re Travel Retail.
External growth transactions amounting to 157 million, primarily at Lagard re Travel Retail (consolidation of Paradies operations and stores at JFK airport in New York), at Lagard re Active (consolidation of Grupo Boomerang TV s Audiovisual Production activities in Spain), Lagard re Publishing (consolidation of Rising Stars) and at Lagard re Sports and Entertainment (consolidation of UFA Sports, EKS and akzio! ajoint).
The impact of these transactions should be felt in the first quarter of 2016, in light of the seasonal impact associated with the schedules of football tournaments in Africa and Asia, with an impact of - 55 million in comparison to the first quarter of 2015. Restated for this effect, the Group's effective growth was 1.8%.
II. REVENUE PER DIVISION
Lagard re Publishing
A quarter that contracted slightly, as every year, but non representative of the trend for the year.
Revenue for the division totalled 415 million, down 1.4% on a consolidated basis and down 2.1% like-for-like. Relative to Q1 2015, data on a consolidated basis should be adjusted, firstly to reflect a negative foreign exchange effect (- 2 million) mainly linked to the depreciation of the pound sterling, and secondly take account of a positive scope effect ( 5 million), notably including the acquisition of Rising Stars in the UK in January 2015 (consolidated as of April 2015).
Just as in previous years, we emphasise that the first quarter traditionally makes a lower contribution to the year as a whole.
On a like-for-like basis, the main changes per geographic area are explained by the following:
In France, after a very busy Q4 2015, business performance was down slightly (-2.2%), as we expected, due to a General Literature release schedule that was lighter than in Q1 2015.
In the United States, activity contracted (-10.3%), due to a less intensive new General Literature release schedule than in Q1 2015, despite two major James Patterson releases, Private Paris and NYPD Red 4.
In the United Kingdom, activity was in decline (-5.2%), mainly owing to e-book sales, hurt by negative comparison effects stemming from the establishment of the agency contract with e-book distributors that took effect in July 2015.
The Spain/Latin America zone reported excellent business performance ( 31.2%) thanks to a one-off export operation to Latin America.
Partworks experienced significant growth ( 15%) attributable to the stunning success of launches in 2015.
E-books: the transition to digital still remains concentrated in the General Literature segment in English-speaking countries:
- In the United States, where the digital market is in contraction, e-book revenue made up 26% of total revenue for the division in Q1 2016.
- In the United Kingdom, where the market seems to be stabilising, revenue for digital stood at 20% of total revenue.
In Q1 2016, Digital accounted for 10.4% of total revenue for Lagard re Publishing (vs. 12.2% in Q1 2015).
Lagard re Travel Retail
Continued growth momentum in Travel Retail
Revenue for the division totalled 852 million ( 7.3% on a consolidated basis and 6.2% like-for-like) owing to a negative exchange rate effect this quarter of - 8 million, primarily linked to the depreciation of the Australian and Canadian dollars and a positive scope effect of 23 million. The scope effect breaks down as follows:
Disposal of Distribution activities in Switzerland (Naville) in February 2015, in the United States (Curtis) in June 2015 and in Spain (SGEL) in February 2016 with an impact of - 100 million.
Acquisitions totalling 123 million, mainly linked to the consolidation of Paradies' US operations beginning in November 2015 and fashion and confectionery stores at JFK Airport (New York) beginning in April 2015.
The strategic transformation of the division is picking up speed. Travel Retail is growing and now represents 81% of revenue for the division, vs. 66% in the first quarter of 2015.
As such, on a like-for-like basis:
