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MILESTONES 2006 MILESTONES MILESTONES 2006 MILESTONES 2006 MILESTONES LAGARDÈRE | CONTENTS MILESTONES 2006 p. 2 Group organization 2005 p. 4 Message from Arnaud Lagardère p. 6 Management team 2005 p. 8 Expanding your world p. 14 Trend chart 2005 p. 20 Activities 2005-2006 p. 22 Books p. 32 Press p. 42 Distribution Services p. 52 Audiovisual p. 62 High Technologies p. 72 Contacts LAGARDÈRE | GROUP ORGANIZATION 2005 Operating sectors 14.95% strategic stake 2 LAGARDÈRE / GROUP ORGANIZATION 2005 books LAGARDÈRE | GROUP ORGANIZATION 2005 press distribution services audiovisual high technologies Operating in more than 40 countries, Lagardère is a French group and the world leader in two industries: media and high technology. Its media activities constitute a stable core business for Lagardère, one that is built on four distinct and complementary operating sectors: book publishing, the press, distribution and audiovisual. Lagardère’s high-tech activities are illustrated by its 14.95% strategic interest in the European company EADS. Lagardère is also engaged in the communications and aerospace industries, two sectors of significance to France’s national sovereignty. But they mainly provide two opportunities to express one and the same objective: to be responsive, successful and modern. Media successes like Le Livre de Poche, Larousse, JC Lattès, Elle, Paris Match, Virgin, Relay, Europe 1 and Canal J and commercial and technological successes like Airbus and Eurocopter testify to Lagardère's expertise and establish its credibility. Over the past few years, the Group has undergone a major transformation. Led by Arnaud Lagardère since 2003, the Group continues to pursue its mission of promoting and disseminating culture worldwide, while making every effort to preserve and encourage independence, boldness and creativity, which have always defined the company and make up its unique vision. MILESTONES 2006 / LAGARDÈRE 3 LAGARDÈRE 2005-2006 | MESSAGE FROM ARNAUD LAGARDÈRE Being at the head of a Media Group, I know to what extent the immediacy of information in our societies implies the immediacy of decisions. Lagardère Group is responsive. It knows how to seize opportunities and how to measure the consequences of its actions with a short-term perspective in mind. But I also hope to lead the group over the next three decades. And that requires a very long-term strategic vision. That vision unquestionably remains the dominant factor in my eyes. In rapidly changing fields, acting quickly is only viable if it is based on an overall strategy that has been carefully thought out. That certainly holds true for Lagardère, in that our strategy found us well equipped to face the events of 2005 and 2006. First significant event: the acquisition of a 20% stake in Canal+ France. This transaction comes in response to a long-expressed desire to expand our operations in the audiovisual sector. But that is the not the key issue. By reserving the right to withdraw, the right to increase our stake to 34% in three years and the right to outbid if Vivendi were to sell its interest, I have the privilege of withholding judgment on the viability of this economic model. This is a prudent move. It will give us time to study the development of the pay TV sector in France at a time when DTT’s success is creating a new economic environment. 4 LAGARDÈRE / MESSAGE FROM ARNAUD LAGARDÈRE LAGARDÈRE 2005-2006 | MESSAGE FROM ARNAUD LAGARDÈRE Second significant event: the buyout of Time Warner Books in the United States. This major acquisition in the publishing industry confirms that we have chosen the right development objectives. First, we must continue to strengthen our mature businesses to implement a strategy of critical size. Second, we must globalize our businesses to continue growing abroad, particularly in the English-speaking world. Lagardère owes its strength to the complementary nature of its businesses; its book publishing business is currently thriving. After the acquisition of Hodder Headline in 2004, we must now concentrate on integrating these new companies before moving in other directions. The key to success also lies in defining a sound rate of growth. Lastly, I have never stopped expressing my desire to make the media the group’s top priority. Our reduced investment in EADS is further evidence of this. However, I can’t deny that for many of its shareholders, Lagardère Group has greatly benefited from EADS’s growth and will continue to do so. We are and remain at the head of the company with our DaimlerChrysler partners. To conclude, I would like to underscore some basic, unchanging facts. Again this year, our results are remarkable. In 2005, our net sales increased by 5.8% and our operating income grew by 8.9%. But above all, our fundamentals are all excellent. Lagardère Group is healthy, has very little debt and is managed with unfailing rigor. I give my commitment to our shareholders that Lagardère is a stable company. By taking this for granted, we sometimes lose sight of its true significance. In an environment of globalized economies, with its attendant opportunities and risks, it seems important to recall just how valuable that is. Arnaud Lagardère MILESTONES 2006 / LAGARDÈRE 5 LAGARDÈRE | MANAGEMENT TEAM 2005 Management team Media and high technology are business sectors in which individuals’ skills and expertise bring a competitive advantage. Lagardère Group benefits every day from the creativity and boldness of its more than 48,000 men and women. Leading them and working with Arnaud Lagardère, the group’s executives strive to preserve the independence of their employees. Without this inde- pendence, there would be no freedom of creativity or expression for our authors, journalists and publishers. These professionals are both autonomous and responsible for the choices they make. 6 LAGARDÈRE / MANAGEMENT TEAM 2005 Dominique D’Hinnin Thierry Funck-Brentano Jean-Paul Gut Gérald Arnaud Molinié Executive Vice-President, Executive Vice-President, Chief Operating Officer, de Roquemaurel Chief of Staff, Chief Financial Officer, Human Relations EADS Member of Lagardère SCA Lagardère SCA and Communications, Member of the Executive the Executive Executive Committee Member of the Executive Lagardère SCA Committee Committee Secretary Committee Member of the Executive Committee Arnaud Lagardère General and Managing Partner, Lagardère SCA Chairman and Chief Executive Officer, Lagardère Media Chairman of the Board of Directors, EADS Philippe Camus Pierre Leroy Deputy Chairman Director and Chief and Chief Operating Operating Officer, Officer, ARCO ARCO Co-Managing Partner Co-Managing Partner Gérald Jean-Louis Nachury de Roquemaurel Chairman and Chief Arnaud Nourry Chairman and Arnaud Lagardère Executive Officer, Chairman and Chief Chief Executive Chairman, Hachette Executive Officer, Officer, Hachette Lagardere Active Distribution Services Hachette Livre Filipacchi Médias MILESTONES 2006 / LAGARDÈRE 7 LAGARDÈRE | OVERVIEW 2005-2006 | LAGARDÈRE | OVERVIEW 2005-2006 | LAGARDÈRE | OVERVIEW 2005-2006 Expanding your world In 2005, the group’s financial health and development potential were manifested by the strengthening of its positions in its core operating activities (Books, Press, Distribution and Audiovisual) and by the growing success of EADS (a global leader in aeronautics), in which Lagardère has a strategic stake. Content as a focus of activity. Four highly complementary media operating divisions represent the group’s core activity, thanks to which Lagardère makes a significant contribution to the promotion of culture, knowledge and information throughout the world. – The book division: the world’s third- largest publishing group with the buy-out of Time Warner Book Group, Hachette Livre publishes high-quality works in the general literature, textbook and illustrated book segments, as well as booklets sold at newsstands. – The press division: the world’s leading magazine publisher with a portfolio of 260 magazines, Hachette Filipacchi Médias maintained its No. 1 rank in 2005 by relying on the healthy positions of its leading titles and by taking advantage of the growth stemming from recently launched investments. – The distribution division: Hachette Distribution Services promotes access to a wide range of cultural products by continuing to develop its leading worldwide > 8 LAGARDÈRE / OVERVIEW 2005-2006 RVIEW 2005-2006 | LAGARDÈRE | OVERVIEW 2005-2006 | LAGARDÈRE | OVERVIEW 2005-2006 > press-distribution network and by renewing numerous retail concession contracts in transportation hubs. – The audiovisual division: as a major player in radio, television (special-interest channels and production companies) and new media, Lagardere Active opened up fresh areas for development in 2005 with the launch of Digital Terrestrial Television. 2005: Excellence in the spotlight A worldwide presence. With operations in With revenue growth of 5.8%, Lagardère SCA once again achieved outstanding results some 40 countries, the Lagardère group in 2005. All the group’s divisions contributed to this success. Consolidated operating generated 70% of its revenues through earnings before interest and taxes (recurring EBIT) grew by 8.9%, while the media international activities in 2005. Some 57% division’s recurring EBIT grew by 7.1%. The high degree of transparency shown by the of the employees of the media division Group in the publication of these excellent results was publicly recognized when the Group received the 2005 award for the best annual report for companies included

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