Investor Day 25th of January 2011
0 Disclaimer
Certain of the statements contained in this document are not including without limitation: historical facts but rather are statements of future expectations and other forward-looking statements that are based on management’s General economic and labour conditions, including in particular beliefs. These statements reflect such views and assumptions as of economic conditions in Europe and North America the date of the statements and involve known and unknown risks and Legal, financial and governmental risks (including, without uncertainties that could cause future results, performance or future limitation, certain market risks) related to the businesses events to differ materially from those expressed or implied in such Certain risks related to the media industry (including, without statements. limitation, technological risks) The cyclical nature of some of the businesses. When used in this document, words such as “anticipate”, “believe”, “estimate”, “expect”, “may”, “intend” and “plan” are intended to identify Please refer to the most recent Reference Document (Document de forward-looking statements which address our vision of expected Référence) filed by Lagardère SCA with the French Autorité des future business and financial performance. Such forward-looking marchés financiers for additional information in relation to such factors, statements include, without limitation, projections for improvements in risks and uncertainties. process and operations, revenues and operating margin growth, cash flow, performance, new products and services, current and future Lagardère SCA disclaims any intention or obligation to update or markets for products and services and other trend projections as well review the forward-looking statements referred to above. as new business opportunities. Consequently Lagardère SCA is not responsible for any consequences that could result from the use of any of the above These forward-looking statements are based upon a number of statements. assumptions which are subject to uncertainty and trends that may differ materially from future results, depending on a variety of factors
1 Today’s speakers
OLIVIER GUIGUET KEVIN O’CONNOR COO COO LAGARDÈRE UNLIMITED Inc
Olivier Guiguet was appointed Deputy Chief With more than 20 years of sports industry Operating Officer of Lagardère Unlimited by experience, Kevin O’Connor comes to Lagardère Arnaud Lagardère in 2010. Unlimited from Saddlebrook Sports where he He created Lagardère Sports for Arnaud negotiated training programs and retainer-based Lagardère through the acquisition of Sportfive, services for professional tennis players. the European leader in football rights, of World Through the highest degree of professional Sport Group in Singapore, the football, cricket attention and personal service, Kevin O’Connor and golf leader in Asia, of IEC in Sports, Upsolut expanded the Elite Athlete training business to and PR Event. For Sportfive, he managed the incorporate team sports such as baseball and signing of an agreement granting all African football and hockey. rights until 2016, signed a contract with the Kevin O’Connor’s expertise in recruiting and International Olympic Committee which grants retaining clients has been the foundation of the marketing of its European rights and the Saddlebrook’s growth, expanding during his granting of the exclusive marketing rights of tenure. UEFA Euro 2012 in Asia. Before arriving at Saddlebrook, over 2001 to 2002 Kevin O’Connor served as the executive director of tennis for the Anschutz Entertainment Group (AEG).
2 Today’s speakers
SEAMUS O’BRIEN LAURENT CAROZZI Founder, Chairman & CEO World Sport Chief Financial Officer of Lagardère Unlimited Group Mr. Carozzi has served as Group Financial Seamus O’Brien is founder, Chairman and CEO Controller since 2008, after joining the Lagardère of World Sport Group (WSG), Asia’s leading Group in 2004 as Investor Relations Director. sports marketing, media and event management From 2002 to 2004, he led HSBC’s London- company. Inspired by his passion for sport, based sell-side media research team. In 1999, he Seamus O’Brien established World Sport Group joined Crédit Agricole (Asset Management) as a (then known as Asia Sport Group), in Hong Kong pan-European buy-side media analyst. in 1992 – a company born from a landmark In 1995 he was head of the European markets partnership with the Asian Football Confederation research team and a sell-side analyst for (AFC), the region’s governing body for football. Paribas. He was a consultant in the Industrial Research Department at Crédit Lyonnais from As one of the earliest pioneers in the business, 1992 to 1995. Seamus O’Brien is widely regarded as a key figure in the development of Asian sport and in particular the business of sport within the region. He has influenced and transformed the financial status and legacy of many of the region’s major sports and its athletes. In nearly 20 years, Seamus O’Brien has established World Sport Group as a market leader.
3 Introduction: Lagardère Unlimited is the 4th division of Lagardère SCA
Lagardère SCA Average 2008-2009 Sales Lagardère SCA Average 2008-2009 EBIT media
18% 43% 6% 10%
28%
27%
24% 44%
4 Introduction: today’s agenda
Analyzing investment rationale in the Sports & Entertainment business and future trends Global sports expenditure are growing faster than GDP in most geographies 45 B€ Sports market has been growing at an average 6% p.a. over the past 5 years Sports market is estimated to continue to grow at ~4% p.a. in the next 5 years Football will remain the key sport in future years
507 2010 figures are provisional and unaudited 2010 is a low year Why? Sports calendar 396 Revenues Contracts loss EBIT Economic crisis tail end 56 28
2009 2010E Detailing the value chain and long term growth opportunities
Historical core business
5 Introduction: clients testimonials
Ted Ward Vice President Vincent Chupin Vice President, Television of Marketing Geico Dianne E. Hayes - and Audiovisual Rights Head of Global Sports International Olympic Marketing - Reebok Committee Television and International Ltd. Marketing Services Jean-Michel Aulas Chairman & Chief Executive Officer of the Olympique Lyonnais Andy Roddick Group Guy-Laurent Epstein Professional Tennis Marketing Director Player UEFA Events S.A.
6 Investor day presentation agenda
Why be active in the sports business? What is Lagardère Unlimited About? Lagardère Unlimited recent performance Lagardère Unlimited vision 2015 Lagardère Unlimited 2011-2012 outlook Questions and answers session
ACADEMIES REPRESENTATION EVENTS MARKETING MEDIA CONSULTING 7 Investor day presentation agenda
1 Why be active in the sports business?
1 I Why be active in the sports business? 2 I What is Lagardère Unlimited About? 3 I Lagardère Unlimited recent performance 4 I Lagardère Unlimited vision 2015 5 I Lagardère Unlimited 2011-2012 outlook 6 I Questions and answers session
ACADEMIES REPRESENTATION EVENTS MARKETING MEDIA CONSULTING 8 Engines of growth of media industry
1970 1980 1990 2000 2010 2020 SPORT & ENTERTAINMENT
DIGITAL WEB TV RADIO PRESS
9 Global Sports market accounts for ~1% of the overall GDP
Sports industry market build up All revenues generated - In B€, 2009 - by sport industry Sports infrastructure construction Sports practice 350-450 B€ Sporting goods and licensed products Sports entertainment events ~45 B€
~13 B€ All revenues generated through sports events Sponsorship Media rights Ticketing
Intermediated sports revenues Sponsorship Media rights
Lagardère Unlimited Markets (1) Extrapolation from key markets (2) Excluding government subsidies (3) Gross figures representing right owners revenues. Revenues of Agencies are based on a mix of buy out and commissions, hence Lagardère Unlimited sales are not directly comparable to these market gross figures. Sources: A.T. Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 10 Global Sports market is outperforming GDP in most geographies Sports expenditure growth vs. GDP growth ratio by region - Based on 2000-2009 growth on illustrative countries - x 3,8 x 3,5
x 3,5 X 8,2
X 1,9 Europe, North Middle east America and Africa x 2,1
x 1,6 Asia Latin America x 3,0 Pacific x 3,0 (1) x 1,7 Size proportional to market size
Sports expenditure growth / GDP growth
(1) Including investments related to Football World Cup 2014 as well as culture, leisure and other recreational expenditure not isolated Sources: INSEE, Sport England, ROSSTAT, US Census, IBGE, Datamonitor, INEGI, Statistical Yearbook Japan, Deutsche Bank, Destatis, A.T Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 11 Football is by far the largest global sport in value
Sports market by sport - in B€, 2009 - 45,4
19,5
5,8 5,5 3,0 3,6 2,7 2,0 1,9 1,4
Football US Football Baseball Formula 1 Basketball Hockey Tennis Golf Other
43% 13% 12% 7% 6% 4% 4% 3% 8% 100%
Sources: A.T. Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 12 Sports market is split between North America dominated by US sports and the rest of the world dominated by Football Sports market by region and sport - in B€, 2009 -
Other
Golf
Tennis
Formula1
US sports(1)
Football
43% 13% 4% 40%
(1) NFL (US Football), MLB (Baseball, NBA (Basketball) NHL (Hockey), NASCAR (Motor sports), NCAA (University sports). Sources: A.T. Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 13 US Sports market is ~40% of the Sports market and offers business potential in marketing
US share in total and addressable Sports market US Sports intermediation addressable market - in B€ - - in B€ -
(1) Sports market Addressable Market US Sports Marketing 45,4 13,2 Centralization level
League 27,3 8,2 Media Gate Teams Marketing 18,1 5,0
Rest of the World Centralization has driven value of the top 4 US Sports(2) North America Revenue sharing increases overall competition quality Centralization brings clarity and simplicity Locked structure limits financial risks due to relegations (1) AddressableSources: A.T./ Not addressableKearney analysis in a pure intermediary business model (2) NFL (US Football), MLB (Baseball), NBA (Basket-ball), NHL (Hockey) Sources: A.T. Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 14 Lagardère Unlimited entered the US market through Talent Management
Focus on Talent Management in the US
15 athletes out of the Top 30 worldwide are from the US - in % total and % revenues -
50%
57%
Lagardère Unlimited has strong assets on US Talent business Joel Segal (NFL) and Dan Fegan (NBA), Lagardère Unlimited’s head of football (US) and basketball respectively, have been named two of “The 12 Best Sports Agents In the World” by Business Insider, with top currently negotiated deals in excess of $340M.
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 15 Media and Marketing revenues account for ~70% of the Sports market
Total : 45,4 B€ Sports market 19,5 B€ 17,8 B€ 3,0 B€ 1,9 B€ 1,4 B€ 1,8 B€ by business and sport 11% - in B€, 2009 - 20% 35% 32% 35% 16,0 B€ 40% Media 42%
Marketing 21% 36% 16,1 B€ 27% 38% 76%(3) 40% 58% Ticketing
Other (1) 26% 12,0 B€ 25% 30% 44% 13% 20% 22% 6% 3% 1,3 B€ Football US Sports(2) Formula 1 Tennis Golf Other
(1) Football player transfer revenues — (2) NFL (US Football), NBA (Basketball), Baseball, NASCAR (motor sports), NCAA (university sports) (3) Including F1 teams non cash contribution — Sources: A.T. Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 16 Sports market has been growing at an average 6% per annum over the past 5 years
Major sports growth rate and market size by geography - 2005 – 2009 -
Weighted average CAGR
Sources: A.T. Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 17 Although cyclical, Sports market sustains a long term growth Global sports and addressable markets evolution - in B€, 2005-2009 -
Sports market
Intermediation addressable market
Calendar effects are amplified on the intermediation addressable market % CAGR
(1) Of which Olympic games, UEFA Euro, FIFA World Cup final phases and qualifiers Sources: Federations and leagues annual reports, Sportbusiness, A.T. Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 18 Within addressable market, media rights are by far more cyclical than the marketing business Total Sports and addressable markets evolution - in B€, 2005-2009 -
Media
Marketing
% CAGR
(1) Of which Olympic games, UEFA Euro, FIFA World Cup final phases and qualifiers Sources: Federations and leagues annual reports, Sportbusiness, A.T. Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 19 Sports market will continue to grow in the next cycle
Sports market by sport - In B€, from 2005 to 2015 -
Football remains a strong engine of 2009 – 2015 growth % CAGR
Sources: A.T Kearney analysis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 20 Key highlights
Sports expenditure growth has continuously outperformed GDP
Football is by far the global leading sport
Intermediation addressable media market (Sport agencies) is more cyclical
Growth prospects remain favourable
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 21 Investor day presentation agenda
2 What is Lagardère Unlimited about?
1 I Why be active in the sports business? 2 I What is Lagardère Unlimited About? 3 I Lagardère Unlimited recent performance 4 I Lagardère Unlimited vision 2015 5 I Lagardère Unlimited 2011-2012 outlook 6 I Questions and answers session
ACADEMIES REPRESENTATION EVENTS MARKETING MEDIA CONSULTING 22 Lagardère Unlimited is set up to support Lagardère ambitions in Sports and Entertainment businesses
Organizer of the Swedish Open 2010 tennis tournament held in Båstad 2009 (ATP tour) European leader in American company specialized in sports the management of 2008 sports marketing and personalities and media rights celebrities The leading Asian sports representation 2007 marketing, media and event management company
German marketing agency and organizer of sports events
Specialist in the management and negotiation 2006 of sports rights mainly for Olympic sports
Sports academy and resort in Paris
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 23 2011 perimeter will be enlarged
Lagardère Unlimited perimeter evolution 2010 2011
PERIMETER CHANGE
Lagardère Live PERIMETER CHANGE Entertainment
UK / France
Revenues 2010E 383 M€ +13 M€(1)
2010 figures are provisional and unaudited = 396 M€
(1) BEST contribution for 8 months of activity in 2010 Sources: Lagardère Unlimited Financials SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 24 Lagardère Unlimited value chain is about enhancing value of properties through rights, events management and content packaging
Own properties Structure and trade Operate Produce live and Structure concepts rights and manage events in studio content for the benefit of Media Venue property owners Marketing Marketing Broadcast & (talents and sports organizations) Licensing Ticketing webcast, mobile Intellectual properties Arenas Hospitality Competition shaping On site servicing (calendar, rules) Events
Lagardère Unlimited expertise applies to sport today and entertainment performance tomorrow
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 25 Lagardère Unlimited value chain is about enhancing value of properties through skilled rights negotiation and structuring, quality events management and state-of the art content production and distribution
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 26 Entertainment business is a natural extension of Lagardère Unlimited
Lagardère Unlimited value chain A natural extension of the business… Sports Live and unique events Strong overlaps of involved stakeholders (broadcasters, arenas, sponsors) Similar requirements throughout the value chain: Concept development Rights monetization Entertainment Event production and organization Illustration : revenues from Concerts in France Content packaging - in M€ - …bringing multiple synergies +9% 605 480 425 427 Strong fundamentals fueling growth 357 382 375 No structural cyclicality Contained risk of piracy Strong complementarities of Lagardère current business
2003 2004 2005 2006 2007 2008 2009 Sources: CNV, SNEP SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 27 Since 2008, Lagardère Unlimited has expanded in new sports, geographies and across the value chain
2008 announced strategy 2010 Key Facts 1 Increasing share of revenues in Africa and expansion Geographical of marketing activities to new countries in Europe 1 expansion 2 Olympic games 2014 / 2016 media contracts 3 Creation of Lagardère Unlimited Stadium Solutions 2 1 Expand business in Asia Pacific Develop in Expand in new sports: Cricket, Golf, etc. new sports 2 3 End to end competition management or ownership (AFC, One Asia) Expand on the 3 value chain 2 IAAF World Championships contract 3 Production capabilities development
1 Expand business in North America 2 Expand footprint to US Sports 3 Increase of Talent business
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 28 Lagardère Unlimited has expanded its portfolio outside of football
Overview of Lagardère Unlimited Other sports business by sport - In % revenues(1), 2010 - Rugby
Tennis
Cricket
Golf
Football
2010 figures are provisional and unaudited
(1) Business models effects not included (commission vs. buy out), but mix presented is close to gross margin mix Source: Lagardère Unlimited financials SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 29 Lagardère Unlimited operates in major sports across main regions
Lagardère Unlimited sports footprint by region
Europe & Middle East North Latin Africa & Asia America America
Football Golf Cricket
Tennis Rugby
Athletics US Sports Winter sports
Olympic Games
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 30 Lagardère Unlimited main revenues come from media and marketing rights management in Football, but also in Cricket and Golf
Marketing Media
Talents Owned competitions Consulting
Talents
Academies
UK Talents France SIZE PROPORTIONAL TO REVENUES
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 31 Lagardère Unlimited strengths
Lagardère Unlimited key strengths Growth driver for Lagardère Market key facts Leader on the greatest sport Growing market Global reach and expertise Live and unique content network
Worldwide opportunities Lagardère Unlimited Consolidation in progress differentiation elements Financial stability Stakeholders trends Global value chain expertise Growing and maturing properties Multi support and multi technologies integration know how Evermore demanding sponsors and broadcasters Inspiring public expectations
32 Key highlights
Lagardère Unlimited is set up to support Lagardère ambitions in Sports and Entertainment businesses
Sports entertainment value chain is about enhancing value of properties through rights, event management and content packaging
Lagardère Unlimited has a strong expertise across this value chain, in major sports worldwide
Lagardère Unlimited main revenues come from media and marketing rights management in Football, but also in Cricket and Golf
Going forward, Lagardère Unlimited strategy is to expand in new sports, new geographies and across the value chain
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 33 Investor day presentation agenda
3 Lagardère Unlimited recent performance
1 I Why be active in the sports business? 2 I What is Lagardère Unlimited About? 3 I Lagardère Unlimited recent performance 4 I Lagardère Unlimited vision 2015 5 I Lagardère Unlimited 2011-2012 outlook 6 I Questions and answers session
ACADEMIES REPRESENTATION EVENTS MARKETING MEDIA CONSULTING 34 Lagardère Unlimited revenues and EBIT for 2007-2010E
Lagardère Unlimited Revenues and EBIT evolution - in M€, 2007-2010E - 507 75 REVENUES EBIT 440 444 2% 67 396 56 3% 64% 48% 55%
28 52% 34% 42%
2007 2008 2009 2010E 2007 2008 2009 2010E Buy out revenues 2010 figures are provisional and unaudited Commission revenues Other Sources : Lagardère Unlimited Financials
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 35 Negative impact of calendar explains most of 2010 low EBIT Lagardère Unlimited EBIT evolution(1) – bridge analysis - in M€, 2008-2010E - 74 0 Calendar effect : UEFA qualifiers & friendlies Perimeter : Euro 2008 final phase WSG (2009)(2) -33 BEST (2010)
-13 28
0 Contract loss : Europa League 2010 figures are French Federation provisional and unaudited
2008 PERIMETER CALENDAR CONTRACT LOSS OTHER PERFORMANCE 2010E (1) in constant euros (2 ) WSG accounted for in equity method in 2008 Sources: Lagardère Unlimited Financials, A.T. Kearney Analysis SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 36 Media – Rights owners rely on agencies to upfront monetize their assets
Buy out model Commission model Role Principal Service provider Typical right Federations media rights • Clubs Marketing owners and type • Leagues Media Rights Risk Rights selling (price)< Rights buying (price) Rights owner revenues < minimum guarantee
Potential upside Unlimited Negotiated incentive above right owner revenues (%)
Balance sheet Capitalization of rights acquired Capitalization of the signing fee Impact
P&L Impact • Revenues (selling the right) • Revenues (% of right owner revenues) • Right amortization (spot or contract duration) • Signing fee amortization (contract duration)
Cash patterns signing fee
Broadcasters Right owners Broadcasters Right owners
right selling right buying right selling commission
cash movements
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 37 Media – Lagardère Unlimited has a strong media rights portfolio in Football worldwide FOOTBALL OTHER SPORTS Leagues & clubs Federations
2010E Sales 46% Qualifiers contribution Europe International rights 2010 figures are provisional Qualifiers 2014 & 2016 and unaudited And 4 other leagues Final phase (Asia) Overview of portfolio Qualifiers Final phase Domestic rights Asia International rights Qualifiers
Qualifiers Final phase Domestic rights Africa Domestic International rights rightsQualifiers
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 38 Marketing – Comprehensive marketing concept is a unique concept developed to enhance marketing revenues
12 9 Clubs examples (comprehensive) 2010E Sales 40% Borussia Dortmund contribution Bayer 04 Leverkusen 2010 figures are provisional Hertha BSC and unaudited Hamburger SV 12 Overview of portfolio 8 Olympique Lyonnais - # clubs - Paris Saint Germain RC Lens AS St Etienne
Panels Shirt Lagardère Unlimited teams sell panels Lagardère Unlimited defines Shirt and organize servicing rights and finds the best sponsor
Hospitality Other match day revenues Lagardère Unlimited team maximizes Lagardère Unlimited organizes hospitality revenues selling boxes and match day tribunes and shops business seats Require local Lagardère Unlimited team support
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 39 Events management – Lagardère Unlimited leverages its expertise with talents, teams, organizations, sponsors and broadcasters to maximize event impacts
2010E Sales 12% contribution Exhibitions & Friendlies Existing events New events creation 2010 figures are provisional Key Relationship with teams and Sport expertise Sport expertise and unaudited enabler talents Financial capability Relationship with teams and talents Overview of portfolio - by origin-
Venue Ticketing Lagardère Unlimited coordinates Lagardère Unlimited organizes ticket interactions with organizations, sales and manages revenues Events athletes, referees and arenas, management Hospitality On site servicing Lagardère Unlimited Lagardère Unlimited ensures supervises servicing sponsors get contracted visibility
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 40 Talent – Lagardère Unlimited is consolidating a growing position in talent representation
64 44 2010E Sales 2% Talents examples contribution 2010 figures are provisional US and unaudited sports Reggie Bush Michael Vick Basketball Dwight Howard Joakim Noah Overview of portfolio N.FL. - # of talents -
87 19 Andy Roddick 29 10 Caroline Wozniacki Gaël Monfils Other Justine Henin sports Others Lewis Moody Golf Rugby Thierry Dusautoir Tennis
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 41 Key highlights
Recent low performance can be explained by: Impact of calendar Contract loss
Lagardère Unlimited is building and already leveraging a broad expertise in the various business segments, allowing us to be confident in our 2015 prospects
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 42 Investor day presentation agenda
4 Lagardère Unlimited vision 2015
1 I Why be active in the sports business? 2 I What is Lagardère Unlimited About? 3 I Lagardère Unlimited recent performance
4 I Lagardère Unlimited vision 2015 5 I Lagardère Unlimited 2011-2012 outlook 6 I Questions and answers session
ACADEMIES REPRESENTATION EVENTS MARKETING MEDIA CONSULTING 43 There are 3 main origins for sport agencies within current competition panel
Mapping of a selection of sports marketing agencies
GENERALISTS
BROADCASTERS SPONSORS
Few competitors have been able to integrate specificities of the 3 main Formula One stakeholder types in the sports Management entertainment business RIGHTS OWNERS
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 44 Despite a strong historical link with rights owners, Lagardère Unlimited has combined capacities and expertise to meet stakeholders’ specificities Mapping of Lagardère Unlimited entities
GENERALISTS
BROADCASTERS SPONSORS
RIGHTS OWNERS
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 45 Lagardère Unlimited has broadened its global presence along the value chain
Overview of origin and DNA for the sport market players
Global Reach
Globalization level: Local Regional Global
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 46 Lagardère Unlimited should benefit from a positive 2011-2013 momentum Historic cycle Future cycle 2008 2009 2010 2011 2012 2013 Calendar of major events
Euro Final Phase
Euro Qualifiers
World Cup Qualifiers properties Asian Cup
Olympic Tournament Qualifiers
World Cup Qualifiers Unlimited Unlimited (1) Africa Cup
IAAF World Championships
Lagardère Calendar effect Year on Year
Positive Impact on Lagardère Unlimited financials
(1) Decision taken in May 2010 to move Africa Cup on odd years starting in 2013
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 47 Lagardère Unlimited is diversifying its models across the value chain Lagardère Unlimited portfolio examples
Partnership / End to end AFC, African Cup of Nations, properties management One Asia golf tournament
Talent Management Tennis, NFL, NBA athletes
Media rights management UEFA Federations portfolio
Marketing rights management French and German football clubs Expand Comprehensive marketing on the Value chain Marketing rights management UK and Spanish football clubs Selective marketing
Event management Boston Marathon
Post-production Ski races, Handball
Production Highlights, Clips, etc. (multisports)
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 48 Illustrative business models –
AFC scope and implemented synergies
AFC value evolution Centralize control Create a variety of Deliver maximum Production of within governing structured rights exposure for rights quality content body Market to Develop venue & Maximize Restructure sponsors and media event revenues broadcast and competitions buyers other revenue Raise competition opportunities across standards all media platforms worldwide
Long term partnership virtuous circle 1993 1997 2001 2005 2009 2012 2016 1997 2001 2005 2009 2012 2016 2020
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 49 Illustrative business models
Centralize rights Package Increase playing Maximize Consolidate corporate opportunities and broadcast tournament golf partnerships standards opportunities and across the region in Deliver pan-Asian Create high- reach worldwide all major markets marketing platform profile events in major Asian cities
Long term partnership virtuous circle
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 50 An organic growth program is in place to prepare for the next sports cycle beyond 2013
Lagardère Unlimited growth plan
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 51 Plan for growth is structured around geographical, business and sports development opportunities
Lagardère Unlimited plan for growth
Marketing Media 2010
2015
SPORTS Sport strategy Expand Consolidate Expand Develop
Sports Football Football Golf Golf Tennis Tennis VALUE CHAIN Cricket Various Motor sports Mass events Athletics Various GEOGRAPHIES
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 52 Lagardère Unlimited targets to further expand sports and geographies Definition of Lagardère Unlimited sports target footprint by region
Europe & Middle East North Latin Africa & Asia America America Football Golf US Sports Tennis Cricket Athletics Rugby Motor sports Winter sports Others Others non sports
Current Lagardère Unlimited footprint 2015 target
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 53 Key highlights
Lagardère Unlimited is clearly a major global player active on key sports and geographies
Lagardère Unlimited should benefit from a positive calendar effect for 2011-2013
A growth plan is in place to achieve 2015 objectives
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 54 Investor day presentation agenda
5 Lagardère Unlimited 2011-2012 outlook
1 I Why be active in the sports business? 2 I What is Lagardère Unlimited About? 3 I Lagardère Unlimited recent performance
4 I Lagardère Unlimited vision 2015 5 I Lagardère Unlimited 2011-2012 outlook 6 I Questions and answers session
ACADEMIES REPRESENTATION EVENTS MARKETING MEDIA CONSULTING 55 Methodology suggestions
Sporting events calendar: to significantly offset its impact on sales growth numbers, compare odd years between themselves – same with even years
Buy-out sales vs commissions: to assess a sales growth performance free of the impact of the evolution of the mix buy-out sales vs commissions sales, use the calculation : gross margin = sales – amortization of sports rights
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 56 Key indicators Lagardère Unlimited
M€ 2009 2010E
Consolidated sales 507 396
Sales, at constant rate (2009) – (a) 507 391
Amortization of sports rights – (b) 136 83
Gross margin (c) = (a) – (b) 371 308
Impact of contract losses (d)(1) 50 12
Base gross margin = (c) – (d) 321 296
2010 figures are provisional and unaudited
(1) Mainly Europa Cup, FFF and Handball Championship Sources : Lagardère Unlimited Financials
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 57 Key indicators
M€ 2009 2010E
Base gross margin 321 296
Including Media 163 113
Including Marketing 148 141
Others & Events sales 10 42
2010 figures are provisional and unaudited
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 58 Ratio
Recurring Ebit margin ratio 2009 2010E
Media 30% 18%
Marketing 13% 12%
2010 figures are provisional and unaudited
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 59 2009-2011 Toolkit
Gross margin expected growth Up to market growth
Recurring Ebit margin, media 30% - 40%
Recurring Ebit margin, marketing 10% - 15%
Overheads & other activities recurring Ebit -17M€ to -23M€
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 60 2010-2012 Toolkit
Gross margin expected growth 3% - 8%
Recurring Ebit margin, media 20% - 30%
Recurring Ebit margin, marketing 15% - 20%
New events & other opportunities Further Ebit improvement
Overheads & other activities recurring Ebit -17M€ to -23M€
SPORTS BUSINESS ? I WHAT IS LAGARDÈRE UNLIMITED ABOUT ? I RECENT PERFORMANCE I VISION 2015 I 2011-2012 OUTLOOK I Q & A 61 Investor day presentation agenda
6 Questions and answers session
1 I Why be active in the sports business? 2 I What is Lagardère Unlimited About? 3 I Lagardère Unlimited recent performance 4 I Lagardère Unlimited vision 2015 5 I Lagardère Unlimited 2011-2012 outlook
6 I Questions and answers session
ACADEMIES REPRESENTATION EVENTS MARKETING MEDIA CONSULTING 62