Audiovisual - Arnaud Lagardère / Alain Lemarchand (pdf

Transcription

Audiovisual
INVESTOR DAY
June 1 2006
Table of content
Growth profile - 2002 / 2005
2007 profitability target
Markets & Competitive positions
Digital opportunities
page 2
Lagardere Active
page 3
Lagardere Active – strong organic
growth over the past few years
Revenue
YoY change
2002-2005
CAGR 02-05
Organic growth
140
7.6%
Acquisitions
55
3.1%
Divestitures
-21
-1.2%
Exchange rates
-4
-0.2%
(€M)
2002 revenue
2005 revenue (French GAAP equivalent)
page 4
569
740
IFRS impact
-119
2005 revenue (IFRS)
621
9.2%
Lagardere Active sales house – consistent
outperformance of advertising market (France)…
Advertising revenue
CAGR 2002-2005
4.6%
14.7%
3.6%
Radio
Lagardere Active Publicité
3.4%
TV *
Market
Despite underperformance since 2004 (in terms of audience
share)
Europe 2 (radio)
RTL9 (TV)
* LAP TV : Canal J, Tiji, MCM, MCM Pop, MCM Top, La Chaîne Météo, RTL9
Source : IREP
page 5
… and strong contribution of radio
operations abroad
Revenue
CAGR 02-05
~ 40%
103.2
78.1
Revenue
(French GAAP)
61.2
42.2
35.1
18.8
21.0
-1.4
1999
47.0
25.7
0.7
1.5
1.9
6 5
8.4
Operating Inc.
(French GAAP)
Operating Inc.
(IFRS)
-0.4
2000
Revenue
(IFRS)
2001
2002
2003
2004
2005 *
Operating margin consistantly increasing… up to 10.8 % in 2005
* Restated French GAAP equivalent
page 6
Lagardere Active
page 7
Lagardere Active
Profitability trend over the past few years
2004
2005
2005
excl.
DTT
Revenue
558
621
620
+ 11%
Operating income
37
47
54
+ 46%
6.6%
7.6%
8.7%
+31%
(€M / IFRS)
Operating margin delivered
2007 operating margin target
page 8
8.9%
Change
2004-2005
(excl. DTT)
Lagardere Active
2007 Profitability target
Commited to 2007 operating
margin target of 8.9 %
despite
opening up of retail distribution sector to TV advertising (from
1.1.2007 on)
Impact on radio advertising revenue might exceed -5%
fee reduction from TV distribution platforms (cable and satellite)
Impact on TV theme channels fees around -15% by 2007 (vs.2005)
page 9
Lagardere Active
Action plan to meet profitability target
Portfolio management
9
Divestitures (profitability dilutive activities… with risky prospects)

9
Match TV, B3Com, Studio International…
Accretive acquisitions

radio stations in Russia, Poland and the Czech Republic
Other initiatives
9
9
page 10
Re-engineering

Music division restructuring (Music Radio stations & Music TV
channels under the same management)

Nationwide station network restructuring (Europe 2 & RFM)

Procurement optimization

Crossborder synergies to emphasize between France and Eastern
Europe countries
G&A costs reduction
Lagardere Active

Radio
Television
Production
Sales house
page 11
Lagardere Active
A leading player in radio in France…
3 radio stations
N° 1 radio sales house
Europe 1, Europe 2, RFM
gathering close to 20% audience share
Estimated market share (net
revenue)
Cum. daily reach
Other
7.8%
12.1%
11.3%
9.6%
9.5% 9.3%
8.1% 7.8%
6.5% 6.2%
LAP *
32.8%
IP
28.2%
5.9%
5.2% 5.1%4.8%
4.5%
NR
J
Fr
a n RTL
ce
In
Fr
a n ter
ce
Eu Info
ro
pe
Sk 1
yr
o
No c k
Fr sta
a n lgi
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B
Fu leu
n
Ch ra di
er o
ie
E u FM
ro
pe
2
RF
M
RM
Ri
C
re
et R
Ch TL
an 2
so
ns
3.4%
NRJ Régies
31.2%
* incl. « GIE Les Indépendants » sales contract
Sources : Mediametrie – Daily reach Jan-March 2006 ; Irep, companies annual reports, internal estimation
page 12
… and abroad (22 radio stations)
Russia
Gross ad revenue share
Q1 2006
Other
26%
* incl.
Gazprom
6%
State owned
stations
RBMH 7% Profmedia
Poland
Lagardere
Active *
26%
RMG
18%
ZPR
16%
Broker FM
30%
Other
Lagardere
Active
33%
MMS
39%
* Lagardere Active sales house
** MMS sales house
Lagardere
Active
26%
IP contracts
*
1%
*Lagardere Active sales house
Czech Republic
5%
Agora
7%
State owned
stations
8%
17%
Radio Net
2005
**
AD point
other
2005
3%
9%
N° 1 radio group in Romania
South Africa
Germany
3%
5%
Regional presence
Romania
6%
in Germany &
South Africa
Czech Republic
16%
Impuls *
23%
Sources : Gallup (Russia) ; Expert Monitor (Poland) ; TNS (Czech Republic)
page 13
Lagardere Active
2005 international revenue breakdown
Poland
* Restated incl. RBMH acquisition 26%
Other
1%
Russia *
43%
Radio market dynamics
Mature advertising markets in Western Europe
Fast growing advertising markets in Eastern Europe
(€M)
500
400
CAGR 04-08
23%
CAGR 04-08
12%
300
CAGR 04-08
8%
200
CAGR 04-08
24%
100
0
Russia
Poland
2004
2005
Czech Rep.
2006
2007
Romania
2008
Market opportunity :
in France, Digital Radio
in Eastern Europe, further consolidation… and Digital Radio
Source : Zenith optimedia (march 2006) : before discounts in Poland and Russia, including agencies commission in Poland and the Czech
Republic
page 14
Lagardere Active
The leader on Children & Music TV segments
LA’s position on cable / satellite market in France
29% audience share on 15-24
38.5% audience share on 4-14 children
4.8%
13.1%
3.9%
3.7%
3.4%
8.5%
3.2% 3.2% 3.1%
3.0%
2.6% 2.5%
5.3% 4.9%
4.8%
2.3% 2.2%
4.1% 4.1%
3.2%
Ongoing opportunity to develop TV business :
Digital Terrestrial Television
Source : Mediacabsat 10 (sept 05- feb 06) – cable/satellite environment
page 15
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2.4% 2.1% 2.0% 1.9%
Lagardere Active
A leader in TV production
LA’s position
Market
N° 1 TV group in scripted production
Lagardere
Active
Broadcasted
Telfrance
Prime time
2004-2005
(hours)
57
37
20 114
DEMD other tot.
GMT
77
Carrère

Heavily regulated

TV Production growth correlated to TV
revenues growth
M6
12%
61
France
Télévisions
42%
N°2 TV group in non scripted production
Broadcasted
weekly
2004-2005
(hours)
Endemol
17.1
Maximal
Lagardere
Active
4.1
Angel
other
Arte
3%
Theme
channels
5%
TF1
29%
Léo
3.4 2.2 1.4
Canal +
9%
French scripted production breakdown (estimate)
11.1

France focused
Market opportunities :
TV broadcaster landscape broadened (new players through DTT)
+ multiplication of distribution platforms => trend to more production
Product placement to be introduced by « TV without Frontiers » directive
Sources : Ecran Total n° 305 – september 2005 (scripted) & n° 571 – october 2005 (non scripted) ; TVFI ; CSA, CNC
page 16
Lagardere Active
A pluri-media sales house in France
Lagardere Active Publicité
• N° 1 radio sales
house
Complementary
media
34.7% of commercial
audience share
• N° 1 theme TV sales
house for the following
segments
Children (4-14) : 38.5%
audience share
Young adults (15-34) : 26.3%
audience share
Cross
Media
• 30% monthly reach
on active internet
users
• Original and
exclusive global
communication
proposition
(incl. street mktg)
• Differentiating
affinity
experience
• One stop shop
Combination of in house and third party media
provides power & segmentation capacity
niche targeting
Source : mediametrie, nielsen netratings
page 17
Development opportunities :
performance measurement
direct marketing
Lagardere Active
page 18

Reducing costs

DTT

Increasing brand exposure… extending current businesses

Developing new businesses
Digitalization – improved cost
efficiency opportunity
Lower broadcasting costs
9
Digitalization => compression => multiplexing
On top of distribution capacity increase,
same network costs shared by many more programs
=> Lower broadcasting costs per program (and better quality)
Lower production costs
9
Automated and user friendly systems
=> less workforce required to operate them
=> product & service development at low incremental cost
=> Potential for digital developments benefiting from low break even point
page 19
Lagardere Active
page 20

Reducing costs

DTT

DTT’s take up in France exceeds
initial forecasts
1.3 M « adapters » sold in 2005, vs. 1 M (max) expected
2 M in March 2006 + 0.5 M set top boxes (and other devices) including DTT
adapters
Penetration will accelerate as digital TV sets are being massively
manufactured
Digital terrestriel coverage
Households in Million
Latest forecasts for free DTT channels
(incl. terrestrial, cable & satellite, ISP)
9 2006 : 40% of French TV households
Coverage in % of population
18
100%
Satellite ?
85%
15
80%
Terrestrial
65%
12
50%
60%
9
12% DTT
28% must deliver (cable, satellite, ISP)
9 Analogue switch-off by 2011
40%
6
3
20%
0
0%
2005
2006
2007
2008
Households (M)
Sources : CSA, NPA conseil (march 2006)
page 21
2009
2010
Coverage
2011
DTT, a mid to long term growth
opportunity for Lagardere Active
Advertising market
Audience

Increase in viewing time by DTT
households
3h45 => 4h02
+17 mn
4.1%
Audience share 4+
3.1%
1.2%

0.5%
0.5%
BFM
TV
i-Télé

Transfer of advertising revenues to new
DTT channels as audiences shift
Estimated net revenues (€M) to be captured by DTT
4.3%
3.1%
1.4%
612
0.7%
France Europe NRJ 12
4
2 TV
NT1
W9
Gulli
274
TMC
Gulli, the only free-to-air children channel
9 5,4% audience share on 4-14
9 gathers whole families (39 % of children
watch programs with their parents)
2010
2014
OMD France March 2005
Canal J, the only pay children channel
Europe 2 TV very strong on target
9 on 15-24 n° 1 channel on DTT and
multi-channel TV
DTT activities should be profitable
from 2011 on
Sources : mediametrie (2 jan – 2 april 2006) 4+ people : DTT adapter equiped households, study by Qualiquanti march 2006
page 22
Lagardere Active
page 23

Reducing costs

DTT

(France)
Radio
Lagardere Active has the asset collection
and expertise to address a multiplatform
strategy in a segmented world
Television
Kids
Young
adults
Adults
*
* Superior socioprofessional category
page 24
Internet
Mobile
CanalJ.net
Tiji.fr
Gulli.fr
FillesTV.fr
Canal J by
CanalSat mobile
E2.fr
RFM.fr
MCM.net
webradios
E2 and E2 TV on
Orange 3G
MCM Top by
CanalSat mobile
Virginmega for
mobile
europe1.fr
News on SFR by
E1
Podcast
TV production
Sales
Distribution &
Other
Lagardere
Images
International
Some examples of digital
developments on the internet
Podcasting audio & video
Opportunity for addressing
younger audiences
page 25
Web Radios & TV
Segmented audio and video
streams
Rock Classics 70, Rock
Alternative, Rock UK 80, Rock US
80, Nouvelle Scène, etc.
Digital Radio, a short to medium
term opportunity in France
An opportunity for Lagardere Active to enrich and expand
its radio service
page 26
+
Potential distribution extension to any device
+
Better coverage for existing networks
+
More room for new developments (regulation wise)
+
Additional features for listeners
+
Digital broadcasting much less expensive
-
Increased competition in an already intense competition
environment
Broadcast Mobile TV, a short to
medium term opportunity in France
Demand for mobile TV services is there
Content will be required
9 Existing DTT channels key for mobile TV uptake
(consumer will need service continuity from fixed indoor
to mobile outdoor)
9 Specific formats to be developed
Tentative
timetable
regulatory framework by end of 2006
launch in 2007 in main cities
full deployment by analogue switch-off
An opportunity for Lagardere Active in France as a theme channel
editor as well as a TV producer
page 27
Children segment – A collection of
assets to leverage in the digital world
Lagardere Active enjoys a unique position in France
9 No 1 on cable/satellite TV with 3 complementary brands (Canal J, TiJi, Filles
TV)
9 The only children channel both on free (Gulli) and pay (Canal J) DTT
9 The only structure controlling children channels on every TV platforms
(sat, cable, DSL, DTT) & an animation production entity (Timoon)
=> bringing in a powerful agregation and promotion capacity
Expansion opportunities
9 Multiplatform distribution (from cab/sat & DTT to the internet & any mobile
device…)
9 Licensing / Merchandising (not tapped by Lagardere Active yet)
=> building a much broader content portfolio is key
Implement a dynamic content production and right acquisition strategy
9 Share investment through coproductions with other kid channels
(european/canadian)
page 28
Development opportunities
in TV production…
… where Lagardere Active can capitalize on its strong expertise
and track record
(22 of the best 100 TV audiences on prime time French TV in 2005)
Development opportunity of low cost new production processes and
concepts to address new markets (such as DTT…)
Development opportunity of new specific content for new platforms
(such as mobiles or the internet)
Development opportunity of by-products from its leading productions
adapted
to new platforms and uses (previews, bonus, best of, etc.)
&
Focus on right ownership (especially VOD, internet, mobile, licensing rights…)
to maximize the value that can be extracted from the TV Production
business
Sources : mediametrie (Mediamat, 4+), excluding soccer
page 29
Lagardere Active
to tap into internet advertising boom
Internet advertising spending
Internet Sales Houses ranking in
France
(2005 gross revenues)
(M€)
700
600
LAP first media sales house on the
internet
CAGR 05-08
35%
Orange
500
16.4%
Yahoo
15.2%
10.0%
MSN
400
CAGR 05-08
71%
300
200
CAGR 05-08
22%
8.4%
AOL
Lycos
CAGR 05-08
64%
7.1%
Pages jaunes
5.8%
Tiscali
5.1%
100
LAP
3.6%
0
TF1
France
Czech
Republic
Poland
Romania
2005 2006 2007 2008
Sources : Zenith optimedia (march 2006), Yacast
page 30
Russia
2.9%
Lagardere Active
page 31

Reducing costs

DTT

Growth acceleration in Mobile
content services
An explosive market opportunity : mobile content worldwide
U.S.
Europe
U.S.$ in b illion s
U.S.$ in b illion s
$14
$14
12
12
10
R:
AG
72
%
$9
C
10
Asia
U.S.$ in b illion s
4
R:
G
A
1%
$13
$14
12
$10
8
6
6
4
4
4
2
2
C
6
$5
$1
$3
2007
$12
2009
$5
2
0
0
0
2005
8%
$8
8
8
C
10
2
R:
G
A
2005
2007
2009
2005
2007
2009
Cellfish Media 2005 Revenues €103M, generating 200 million digital transactions per year.
-
Original content studios in Paris and New York with significant successes such as
Blingtones, the first music label for cellphones (7m Blingtones sold in 05)
-
Content distribution through a global network of wireless carrier portals in the US and in
Europe with a reach of 350 million subs
-
Key partnerships include Orange, SFR, Bouygues, Cingular, T-Mobile, Verizon…
-
Key products : music, ringtones, wallpapers, videos, games and creating Mobile Social
Networking applications (user generated content : blogs, chat, dating).
page 32
Lagardere Active
Growth outlook
Over the next 5 years (2006-2010)
Expected developments to fuel overall
revenue growth *
Eastern Europe growth dynamics
Digital growth opportunities
9 Radio abroad : +15 to 20% / year
9 TV : +6 to 7% / year
International revenues by 2010: about 30%
(up from 20% in 2005)
Overall profitability to further increase
* Excluding possible divestitures
page 33