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Lagardère announces third quarter 2018 results

Paris-November 8, 2018

Lagardère announced results for third quarter 2018 today. Highlights of the company’s financial performance are as follows:

At Hachette Book Group:

CEO Michael Pietsch, said, “Hachette Book Group’s third quarter revenues were solidly ahead of 2017, led by The President is Missing by Bill Clinton and James Patterson, the bestselling novel of 2018 so far. We had dozens of New York Times bestsellers in the quarter—seven of them #1 bestsellers—Including David Sedaris’s Calypso, Sally Field’s In Pieces, James Patterson’s Juror #3 and Texas Ranger, Robert Galbraith’s (aka J. K. Rowling) Lethal White, Sandra Brown’s Tailspin, Neil Patrick Harris’s The Magic Misfits, and Jeanine Pirro’s Liars, Leakers, and Liberals, along with continued strong sales in backlist and downloadable audioDuring the quarter, we also completed our acquisition of the Worthy Publishing Group, an exciting expansion of our vibrant Christian publishing program. We’re anticipating an outstanding finish to the year, with major bestsellers including Nicholas Sparks’s Every Breath, James Patterson and Chris Grabenstein’s Max Einstein, Pete Souza’s ShadeDear Evan Hansen: The Novel by Val Emmich, Steven Levenson, Benj Pasek, and Justin Paul, Long Road to Mercy by David Baldacci, James Patterson’s Target Alex Cross, Michael Connelly’s Dark Sacred NightHow Long ‘til Black Future Month by three-time Hugo Award winner N. K. Jemisin, and Winter Solstice by Elin Hilderbrand, among many others.”

At Hachette Livre:

Hachette Livre: For the first nine months, Hachette Livre delivered revenue of €1.607B, down 2.2% like-for-like over the same period in 2017, and down 3.5 % on a consolidated basis. The difference between these two figures can be explained by a €42M negative foreign exchange effect mainly from the depreciation of the US dollar, partially offset by a €20M positive scope impact mainly associated with the acquisitions of Jessica Kingsley, Summersdale, Kyle Kathie, Bookouture, and IsCool Entertainment.

Through September, business was affected as expected by the decline in the Education segment in France, Spain and the United Kingdom, which was partially offset by good performances in General Literature and in particular the success of bestselling titles such as Bill Clinton and James Patterson’s The President is Missing in the US, Michael Wolff’s Fire and Fury in the UK, and Guillaume Musso’s La Jeune Fille et la Nuit in France.

Third quarter revenues of €607 million were down 6.3% like-for-like and down 6.1% on a consolidated basis. The difference between consolidated and like-for-like figures is due to a positive scope effect of €2 million, mainly reflecting the acquisitions of Jessica Kingsley and Summersdale. The currency effect was neutral for the quarter.

On a like-for-like basis, the main changes in each geographic area can be explained as follows:

  • In France: revenues were down 14.7%, with the slowdown mainly due to the absence of curriculum reform compared to Q3 2017, which benefited from a second year of reform (particularly in the middle school segment).
  • In the US: Hachette Book Group “delivered a sparkling performance, with growth of 5.1% driven by the continued success of the Perseus backlist, especially Jen Sincero’s You are a Badass, and by a strong release schedule at Grand Central Publishing, including Sally Field’s In Pieces,” according to Lagardère’s press release. “Third quarter results were also lifted by the success of Bill Clinton and James Patterson’sThe President is Missing across all formats, especially e-books and digital audio.”
  • In the UK: The decline in business in the UK (down 6.7%) was due mainly to the decline in the Education segment and, to a lesser extent, a lighter release schedule than in 2017, which included successful titles such as Martina Cole’s Damaged and four new Famous Five releases.
  • In Spain/Latin America: Revenues were down 8.2%, attributed to an unfavorable comparison effect in the Education business after a less extensive textbook campaign in 2018. However, Mexico posted a good performance.
  • Partworks: Remained flat (down 0.4%), with continued solid momentum in core collections offsetting the decline observed in Europe, with the exception of Italy.
  • Ebooks: Accounted for 7.7% of total Lagardère Publishing revenue in third-quarter 2018, versus 7.2% in the same period in 2017; digital audio books represented 2.8% of revenue versus 1.8% in the third quarter of 2017.

At Lagardère:

The Lagardère group delivered revenue of €1.895 billion in the third quarter, compared to €1.858 billion in Q3 2017, an increase of 2.6% like-for-like and 2.0% on a consolidated basis. The difference between the two figures reflects a negative foreign exchange effect of €4 million, primarily due to the depreciation of the Australian and New Zealand dollars. The €6 million negative scope effect mainly relates to the divestment of LARI by Lagardère Active, offset in part by acquisitions at Lagardère Publishing.

Through September, the group’s revenues were €5.261 billion, up 3.7% like-for-like and up 1.9% on a consolidated basis. The difference between the two figures is attributable to a positive scope effect resulting from acquisitions in the Publishing and Travel Retail divisions, partially offset by divestments by Lagardère Active and press distribution activities in the Travel Retail division. The negative foreign exchange effect resulted primarily from the depreciation of the US dollar.

Read Lagardère’s press release for further details. If you have questions about today’s announcement, please contact me. Lagardère’s next financial report will be Q4 revenues on February 7, 2019, followed by full-year 2018 financial results on March 13, 2019.

Lagardère announces first half 2018 results

Paris-July 26, 2018

Lagardère announced results for First Half 2018 today. Highlights of the company’s financial performance are as follows:

At Hachette Book Group:

CEO Michael Pietsch said, “First half revenues and profits grew from 2017, with excellent ongoing backlist performance and strong publishing programs across divisions. Hachette hardcovers have held the #1 slot in both fiction and nonfiction for six consecutive weeks on the New York Times Best Sellers list, led by Bill Clinton and James Patterson’s thriller The President Is Missing and David Sedaris’s essay collection Calypso. Hachette Audio continued its steady growth, and our Client Services business had a strong first half.  Readers remain intensely interested in politics and we’ve tapped into that with bestsellers including Trump’s America by Newt Gingrich, Russian Roulette by David Corn and Michael Isikoff, and continued sales of Obama: An Intimate Portrait by Pete Souza. Other first-half bestsellers include The Fallen by David Baldacci, James Patterson’s The 17th Suspect, Jake Tapper’s The Hellfire Club, You Are A Badass by Jen Sincero, Elin Hilderbrand’s The Perfect Couple, Min Jin Lee’s Pachinko, the Pulitzer Prize winner Less by Andrew Sean Greer, and The Wild Robot Escapes by Peter Brown.  The steady growth of the Avalon Travel imprint brought it to #1 market share in the category in the first half.  We’re looking forward to an extremely strong second half, with major books from Sally Field, James Patterson, Sandra Brown, David Baldacci, Michael Connelly, Robert Galbraith (aka J.K. Rowling), Joyce Meyer, Joel Osteen, Kim Stanley Robinson, Ann Leckie, Ambassador Wendy Sherman, Neil Patrick Harris, Flea, the creators of Dear Evan Hansen, Kate Atkinson, and many others.”

At Hachette Livre:

Hachette Livre delivered revenue of €1 billion in the first half of the year, up 0.5% like-for-like (-1.9% on a consolidated basi) over first half 2017; the difference between consolidated and like-for-like figures was due to negative (-€42M) foreign exchange effect associated with the depreciation of the U.S. dollar and a positive (+€18M) scope effect due mainly to Hachette UK’s acquisitions of Bookouture, Jessica Kingsley Publishing, Summersdale, and IsCool Entertainment.

  • In France: first half 2018 revenues were up 2.5%, driven primarily by General Literature and strong sales for author Guillaume Musso, good momentum at Le Livre de Poche, and an upward trend for Distribution.
  • In the US: revenues rose 1.4%, reflecting the success of The President Is Missing by James Patterson and Bill Clinton, and “the sustained release schedule at Perseus, which offset the contraction at Nashville following the success of Paul Young’s The Shack in first half 2017,” according to Lagardère’s press release.
  • In the UK: revenues were down 2.5%. Excellent sales for Michael Wolff’s Fire and Fury at Little, Brown Book Group did not offset the full effect of the contraction in the frontlist at Headline and Hodder.
  • In Spain/Latin America: revenues were down 5.1% due to unfavorable comparison with strong textbook sales in first half 2017.
  • Partworks: revenues rose 2.7%, with particularly strong sales in Latin America, France, and Italy.
  • Ebooks: accounted for 8.4% of total Lagardère Publishing revenue in first-half 2018, compared to 8.8% in the same period last year.

The Publishing division achieved profits of €40 million, down €1 million compared to first-half 2017. Positive momentum in General Literature in France and improved profitability in the United States only partly offset downturn in business in Spain and a slight decline in the UK.

At Lagardère:

The Lagardère group delivered revenue of €3.36 billion (+4.4% growth like-for-like, +1.8% on a consolidated basis) for first half 2018, with the increase reflecting “strong growth at Lagardère Travel Retail (+9.9%), as well as a solid contribution by Lagardère Publishing and Lagardère Active despite the unfavorable market environments,” according to the company’s press release. Group profit remained stable year on year at €132 million. The difference between consolidated and like-for-like sales reflects a negative (-€110M) foreign exchange effect due to depreciation of the US dollar, and a positive (+€25M) scope effect relating to acquisitions in the Publishing and Travel Retail divisions and divestitures in the Active division.

Read Lagardère’s press release for further details.

Lagardère announces Q1 2018 revenue

Paris-May 17, 2018

Lagardère announced results for First Quarter 2018 today. Highlights of the company’s financial performance are as follows:

At Hachette Book Group:
CEO Michael Pietsch said, “Our good first quarter results came from many places: #1 bestselling books by HBG house authors James Patterson, David Baldacci, Douglas Preston & Lincoln Child, and Brad Meltzer, from backlist hits like You Are a Badass by Jen Sincero, Obama: An Intimate Portrait by Pete Souza, and Pachinko by Min Jin Lee, and from breakout bestsellers including Michael Isikoff & David Corn’s riveting Russian Roulette, Jennifer Palmieri’s powerful Dear Madam President, Peter Brown’s delightful The Wild Robot Escapes and Vashti Harrison’s inspiring Little Leaders.

“Since Q1’s end we’ve had the spectacular news that Andrew Sean Greer’s brilliant and joyful novel Less was awarded the 2018 Pulitzer Prize for Fiction, and that Attica Locke received the Edgar Award for Best Novel for Bluebird, Bluebird. Our biggest book of the year, James Patterson and President Bill Clinton’s thriller The President Is Missing, goes on sale next month, and is certain to be a major publishing event.”

HBG has had 63 New York Times bestsellers so far this year, including 15 #1 bestsellers.  Looking ahead at the third quarter, we have exciting new books from Sally Field, Elin Hilderbrand, Sandra Brown, Joyce Meyer, Megan Abbott, Flea, Neil Patrick Harris, and Kate Atkinson, among many others. Recent acquisitions include books from Harlan Coben, Malala Yousafzai, Marie Kondo, Daniel Kahneman, and the team behind Dear Evan Hansen.

At Hachette Livre:
Hachette Livre delivered revenue of €442M, up .5% over first quarter 2017 on a consolidated basis and up 2.9% like-for-like; the difference between consolidated and like-for-like figures was due to negative (-€23M) foreign exchange effect associated with the depreciation of the U.S. dollar and pound sterling, as well as a positive (+€12M) scope effect due mainly to Hachette UK’s acquisitions of Brainbow, Bookouture, Summersdale, and Jessica Kingsley Publishing.   

  • In France: Q1 2018 revenues were up 1.7%, due primarily to Larousse, Le Livre de Poche paperbacks, and Illustrated Books.
  • In the US: business in the U.S. “delivered solid growth (up 5.4%), lifted by the continued success of the backlist, especially Pete Souza’s Obama: An Intimate Portrait, and by a busy release schedule at Grand Central Publishing and Perseus,” according to Lagardère’s press release.
  • In the UK: good business momentum (+1.4%) was spurred by Michael Wolff’s Fire and Fury at Little, Brown Book Group.
  • In Spain/Latin America: revenues were up 4.3% driven by Education in Spain.
  • Partworks: revenues rose 6.3%, with particularly strong sales in France and Italy.
  • Ebooks: accounted for 9.1% of total Lagardère Publishing revenue in Q1 2018, compared to 10% in Q1 2017.

At Lagardère:
The Lagardère group delivered 5% growth in revenue for first quarter 2018, “fueled by organic growth momentum at Lagardère Travel Retail and a good performance from Lagardère Publishing.” The company reported consolidated revenue of €1.555 billion in the first quarter, up 5.0% like-for-like and up 1.5% consolidated versus Q1 2017. The difference between consolidated and like-for-like sales reflects a negative (-€63M) foreign exchange effect due to depreciation of the US dollar, and a positive (+€10M) scope effect relating to acquisitions by Hachette UK.

Please read Lagardère’s press release for further details.

Lagardère announces 2017 full-year revenue and profit

Paris-March 8, 2018

Last month, Lagardère announced their fourth quarter sales and their full year revenue for 2017. Today, they followed up with an announcement of their full year 2017 results, a more detailed report that includes operating profit. Highlights are as follows:

At Hachette Book Group:
CEO Michael Pietsch said, “We published some of the bestselling writers in the industry in 2017—James Patterson, David Baldacci, Michael Connelly, Rick Steves, and Sandra Brown, among many others—and were thrilled with phenomenal sales for Pete Souza’s OBAMA: An Intimate Portrait, which maintains its strong trajectory in 2018. Superb publishing across our imprints delivered bestsellers and prizes, and we made exciting acquisitions all year long. This positive trend continues with Grand Central Publishing’s announcement today that they have acquired five new novels by #1 bestselling author Harlan Coben, a writer we have deeply admired for years, and a thrilling addition to Hachette Book Group’s roster of bestselling authors.”

In 2017, HBG had 167 books on the New York Times bestsellers list, including 34 #1 titles. We also had 144 books hit the USA Today list, 10 of which were #1 bestsellers.

Highlights for 2018 include Bill Clinton and James Patterson’s thriller The President is Missing in June, a memoir from legendary actress Sally Field, In Pieces, in September, and Every Breath, Nicholas Sparks’s first novel in two years, coming in October. And Alexis Okeowo’s debut book A Moonless, Starless Sky recently won the PEN/Open Book Award.

At Hachette Livre:
Hachette Livre delivered revenue of €2.289B in 2017, up 1.9% like-for-like over 2016 (up 1.1 % on a consolidated basis). The difference between these two figures reflects a €50M negative foreign exchange effect and a €33M positive scope effect resulting from the consolidation of Perseus, and the acquisitions of Brainbow and Bookouture for Hachette UK.

The Publishing Division’s EBIT of €210 million (9.2% margin) is an increase of €2 million over 2016. The increase was “mainly attributable to a strong performance in the United States, underpinned by successful releases as well as continued profitability gains as a result of the ongoing cost-cutting plan,” according to Lagardère’s press release.

  • In France: 2017 revenues were up 3.4%, driven by Astérix et la TransitaliqueDan Brown’s Origin, a record year at Le Livre de Poche paperbacks, and by textbook publishing.
  • In the US: HBG’s revenues were up 2.7% on the prior year, “lifted by a busy release schedule, especially at Perseus and Nashville,” according to the company’s release.
  • In the UK: revenue fell 3.9% due to the comparison with strong sales for Harry Potter and the Cursed Child in 2016.
  • In Spain/Latin America: revenues declined 5.2% on prior year due to Spain’s curricular reform in 2016.
  • Partworks: revenue grew 8.8%, with particularly strong sales in Argentina and Japan.
  • Ebooks: accounted for 7.9% of total Lagardère Publishing revenue in in 2017, compared to 8.0% in 2016.

 At Lagardère:

Lagardère delivered revenues of €7.069 billion in 2017, up 4.0% like for like. The company reported profit of €403 million, an increase of €8 million over prior year.

Please read Lagardère’s press release for more information, and don’t hesitate to contact me if you have questions about today’s announcement.

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