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 audio. During 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 Shade, Dear 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 Night, How 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.
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.