REFERENCE DOCUMENT Containing the Annual Financial Report
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REFERENCE DOCUMENT containing the Annual Financial Report FISCAL YEAR 2017 PROFILE The Lagardère group is a global leader in content publishing, production, broadcasting and distribution, whose powerful brands leverage its virtual and physical networks to attract and enjoy qualifi ed audiences. The Group’s business model relies on creating a lasting and exclusive relationship between the content it offers and its customers. It is structured around four business divisions: • Books and e-Books: Lagardère Publishing • Travel Essentials, Duty Free & Fashion, and Foodservice: Lagardère Travel Retail • Press, Audiovisual (Radio, Television, Audiovisual Production), Digital and Advertising Sales Brokerage: Lagardère Active • Sponsorship, Content, Consulting, Events, Athletes, Stadiums, Shows, Venues and Artists: Lagardère Sports and Entertainment 1945: at the end of World 1986: Hachette regains 26 March 2003: War II, Marcel Chassagny founds control of Europe 1. Arnaud Lagardère is Matra (Mécanique Aviation appointed Managing Partner TRAction), a company focused 10 February 1988: of Lagardère SCA. on the defence industry. Matra is privatised. 2004: the Group acquires 1963: Jean-Luc Lagardère 30 December 1992: a portion of Vivendi Universal becomes Chief Executive Publishing’s French and following the failure of French Offi cer of Matra, which Spanish assets. television channel La Cinq, has diversifi ed into aerospace Hachette is merged into Matra and automobiles. to form Matra-Hachette, and 2007: the Group reorganises Lagardère Groupe, a French around four major institutional 1974: Sylvain Floirat asks partnership limited by shares, brands: Lagardère Publishing, Jean-Luc Lagardère to head is created as the umbrella Lagardère Services (which the Europe 1 radio network. company for the entire became Lagardère Travel Retail ensemble. in 2015), Lagardère Active and Lagardère Sports (which 1977: Jean-Luc Lagardère became Lagardère Sports and is appointed Chairman and Chief 1996: Matra-Hachette Entertainment in 2015). Executive Offi cer of Matra. is absorbed into Lagardère Groupe, which changes its name to Lagardère SCA. the Group sells 1980: Matra acquires 2011: its international the Hachette group, magazine operations. specialised in book publishing 1999: Aerospatiale Matra (Grasset, Fayard, Stock, etc.), is created following the merger magazines and newspapers of Aerospatiale and Matra 2013: the Group divests (Elle, Le Journal du Dimanche, Hautes Technologies. its remaining interest in EADS. etc.) and distribution. 2000: the EADS consortium 2015-2017: the Group 1981: the French State is formed following the merger makes a number of acquisitions, acquires a 51% interest in of Aerospatiale Matra, CASA including audiovisual Matra (excluding Hachette). and DaimlerChrysler Aerospace. production businesses Grupo Europe 1 is sold to the French Boomerang TV and Aito State via Sofi rad. 14 March 2003: Media Group, travel retail Jean-Luc Lagardère and fi rm Paradies, and publishers death of Jean-Luc Lagardère. Daniel Filipacchi are appointed Perseus Books and Bookouture. Chairman and Vice-Chairman of the Board of Directors of Hachette. REFERENCE DOCUMENT containing the Annual Financial Report Fiscal Year 2017 Lagardère SCA French partnership limited by shares (société en commandite par actions) with share capital of €799,913,044.60 Registered offi ce: 4, rue de Presbourg, 75016 Paris – France Telephone: +33 (0)1 40 69 16 00 Lagardère is registered with the Paris Trade and Companies Registry (Registre du commerce et des sociétés) under number 320 366 446 Website: www.lagardere.com The original version of this Reference Document (Document de référence) in French was fi led with the French fi nancial markets authority (Autorité des marchés fi nanciers – AMF) on 3 April 2018 in accordance with article 212-13 of the AMF’s General Regulations. It may be used in connection with a fi nancial transaction if supplemented by an information notice approved by the AMF. This document has been prepared by the Company under the responsibility of the persons who signed the original French Document de référence. REFERENCE DOCUMENT / FISCAL YEAR 2017 CONTENTS 1 OVERVIEW OF THE GROUP 3 5 NET ASSETS, FINANCIAL POSITION AND RESULTS AFR 159 1.1 General information about the issuer 4 1.2 History 4 5.1 Per share data, dividend policy and share performance 160 1.3 Organisation chart – Principal subsidiaries – Relations between the parent company 5.2 Presentation of the fi nancial position and subsidiaries 6 and consolidated fi nancial statements of Lagardère SCA 162 1.4 Business activities and strategy AFR 7 5.3 Lagardère SCA consolidated fi nancial 1.5 Consolidated key fi gures for 2017 31 statements at 31 December 2017 167 1.6 Major investments 32 5.4 Presentation of the Lagardère SCA parent 1.7 Major contracts AFR 33 company fi nancial statements 253 1.8 Real estate property 34 5.5 Lagardère SCA parent company fi nancial statements at 31 December 2017 256 5.6 Statutory Auditors’ report 2 CORPORATE GOVERNANCE 35 on the Company’s fi nancial statements 270 2.1 Corporate Governance Report AFR 36 5.7 Statutory Auditors’ report 2.2 Remuneration and benefi ts of the Managing on the consolidated fi nancial statements 273 Partners and of the Executive Committee 72 5.8 Statutory Auditors’ special report on regulated agreements and commitments 277 3 RISK FACTORS AND CONTROL SYSTEM AFR 97 3.1 Risk factors 98 6 RECENT DEVELOPMENTS AND OUTLOOK 279 3.2 Description of internal control and 6.1 Recent developments (since 1 January 2018) AFR 280 risk management procedures 103 6.2 Outlook 280 6.3 Earnings forecast 280 4 CORPORATE SOCIAL RESPONSIBILITY AND CORPORATE CITIZENSHIP – ETHICS AFR 115 7 ADDITIONAL INFORMATION 281 4.1 CSR – Key priorities, stakeholders and responsible governance 116 7.1 Persons responsible for the information contained in the Reference Document 282 4.2 Implementation of the strategic «core business» priorities 121 7.2 Statement by the persons responsible for the Reference Document AFR 282 4.3 Implementation in priority action areas 138 7.3 Details of the Statutory Auditors 282 4.4 Monitoring of other regulatory information 145 7.4 Documents on display 283 4.5 Methodology and scope 152 4.6 Report of the independent third-party entity 154 8 CROSS-REFERENCE TABLES 285 4.7 Implementation of the duty of care law for parent companies 156 8.1 Cross-reference table with the Annual Financial Report 286 8.2 Cross-reference table for the Reference Document in accordance with Annex 1 of European Regulation no. 809/2004 287 8.3 Corporate social responsibility cross-reference table 291 Items appearing in the Annual Financial Report are cross-referenced with the following symbol AFR 2 2017 Reference Document CHAPTER 1 - Overview of the Group 1 1 OVERVIEW OF THE GROUP 2 3 1.1 GENERAL INFORMATION 1.5 CONSOLIDATED KEY FIGURES ABOUT THE ISSUER 4 FOR 2017 31 1.1.1 Company name and commercial name 4 1.5.1 Consolidated key fi gures 31 1.1.2 Registered offi ce, address, telephone 4 1.5.2 Per share data 31 4 1.1.3 Legal form and governing law 4 1.6 MAJOR INVESTMENTS 32 1.1.4 Place of registration and registration number 4 1.6.1 Investment and innovation policy 32 1.1.5 Date of incorporation and term of the Company 4 1.6.2 Major investments in 2015 32 1.6.3 Major investments in 2016 33 1.2 HISTORY 4 1.6.4 Major investments in 2017 33 5 1.3 ORGANISATION CHART – 1.7 MAJOR CONTRACTS AFR 33 PRINCIPAL SUBSIDIARIES – RELATIONS BETWEEN THE PARENT 1.7.1 Major contracts binding the Group 33 COMPANY AND SUBSIDIARIES 6 1.7.2 Contracts involving major commitments for the whole Group 34 1.4 BUSINESS ACTIVITIES AFR 7 AND STRATEGY 1.8 REAL ESTATE PROPERTY 34 1.4.1 Lagardère Publishing 9 6 1.4.2 Lagardère Travel Retail 14 1.4.3 Lagardère Active 18 1.4.4 Lagardère Sports and Entertainment 26 7 Items appearing in the Annual Financial Report are cross-referenced with the following symbol AFR 8 2017 Reference Document 3 CHAPTER 1 - Overview of the Group 1.1 GENERAL INFORMATION ABOUT THE ISSUER 1.1.1 COMPANY NAME AND COMMERCIAL NAME Company name: Lagardère SCA Commercial name: Lagardère 1.1.2 REGISTERED OFFICE, ADDRESS, TELEPHONE Registered offi ce: Postal address: 4 rue de Presbourg - Paris 16e (75), France 4 rue de Presbourg, 75116 Paris, France Telephone: +33 (0)1 40 69 16 00 1.1.3 LEGAL FORM AND GOVERNING LAW Lagardère is a French partnership limited by shares (société en commandite par actions – SCA). 1.1.4 PLACE OF REGISTRATION AND REGISTRATION NUMBER Lagardère is registered with the Paris Trade and Companies Registry (Registre du commerce et des sociétés) under number 320 366 446. 1.1.5 DATE OF INCORPORATION AND TERM OF THE COMPANY Lagardère was incorporated on 24 September 1980 for a term that will expire on 15 December 2079. 1.2 HISTORY The original purpose of Lagardère SCA, named MMB up to the end Since then, the following changes have taken place in the Group's of 1992, and subsequently Lagardère group until June 1996, was to structure: unite all media sector assets held by the Matra group in 1982 prior ϐ Major alliances in the Defence and Space industries: this to the French State's acquisition of an interest in Matra's capital, so European alliance strategy was initiated in the early 1990s, and that the State would not be in a position of control. underwent an important development in 1999 when Aerospatiale Under the initiative and management of Jean-Luc Lagardère, the Matra was formed through the contribution of Matra Hautes Company then took control of Hachette, followed by Matra, which Technologies – which held all of Lagardère SCA's aerospace returned to the private sector in early 1988.