Group consolidated sales in FY 2000 amounted to 12,192 million euros, compared with sales of 12,285 euros in FY 1999. Lagardere Media segment sales increase by 4.8%. Excluding changes in the company structures and the effects of exchange rates, Lagardere Media segment sales increased by 5.5%, demonstrating an acceleration in growth from FY 1999.
Matra Automobile sales also increased by 3.4%, confirming the success of the Espace.
The decrease in the contribution of the High Technology segment (-10.6%) can be explained by variations in the group’s structure and changes in the accounting methodologies used at the creation of EADS. On a pro forma basis, sales increased 7,3%..
Group operating income totaled 572 million euros, representing growth of 10% from FY 1999. Following is an analysis of this improvement by segment:
The Lagardere Media segment recorded operating income of 323 million euros, reflecting an increase of 14.4% from FY 1999. The Book, Press and Distribution Services divisions all recorded substantial increases. The Lagardere Active division (Radio, Audiovisual and Digital activities) recorded strong increases in its radio and audiovisual activities. This growth was not sufficient to completely replace most of the missing positive contribution of Grolier Inc. This business has been sold and has not been consolidated since June 2000, which has negatively impacted the operating result of the segment. Investments in new digital media have been financed by cost savings resulting from the elimination of Club Internet from the group consolidated results.
Operating income for the Automobile segment totaled 71 million euros, representing a slight improvement from FY 1999. The improvement is due to a better product mix and production cost management.
In the first half of 2000, the High Technology segment was represented by the company’s 33% equity interest in Aerospatiale Matra. In the second half of 2000, the High Technology segment was represented by the company’s 15.14% equity interest in EADS. In both cases, Lagardere’s ownership was consolidated by the proportionate method. In 1999, the High Technology segment of the Lagardere group represented only the proportionate consolidation of its 33% equity interest in Aerospatiale Matra. The financial statements of EADS for the second semester of 2000 were restated to conform to the French accounting standards, applied by the Lagardere group. Taking into account the extensive changes in group structure, the comparison of 2000 results with previous years is not meaningful.
The company recorded exceptional income of 651 million euros, due principally to capital gains on asset disposals which totaled 851 million euros, of which 843 million euros resulted from the disposal of Club Internet and Grolier Inc. This also includes a reserve for depreciation of fixed assets in the amount of 107 million euros for Lagardere Media and reserves for restructuring and miscellaneous risks.
The company recorded tax expenses of 457 million euros, of which 306 million euros arose from capital gains booked on asset disposals. This amount includes a reserve of 289 million euros for the deferred tax on capital gains resulting from the Club Internet/T-Online transaction. In total, the capital gains after tax totaled 545 million euros.
Amortization of goodwill, of 60 million euros, increased primarily as a result of the amortization of goodwill arising from the acquisition of the remaining shares of Hachette Filipacchi Medias stock, which were acquired through the Public Offer of Exchange executed this year.
