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Lagardère announces third quarter 2019 results

Paris-November 7, 2019

Lagardère announced results for Q3 2019 today. Highlights of the company’s financial performance are as follows:

 

At Hachette Book Group:

Hachette Book Group CEO Michael Pietsch said, “Hachette Book Group’s third quarter revenue was essentially even with last year’s, despite a challenging comparison to 2018, when James Patterson and Bill Clinton’s The President Is Missing was propelling HBG’s sales. Sales were bolstered by the publication of Malcolm Gladwell’s Talking to Strangers, by continued growth in downloadable audio, and by a strong program of adult thrillers.  HBG had 55 New York Times bestsellers in Q3 2019 including four titles at #1 – Malcolm Gladwell’s Talking to Strangers, Donna Tartt’s The Goldfinch, David Baldacci’s One Good Deed, and Elin Hilderbrand’s Summer of ’69.

The fourth quarter is off to a strong start, with newsworthy books such as Ronan Farrow’s bestseller Catch and Kill and intense anticipation for A Warning by Anonymous, on sale November 19.  Our #1 bestsellers so far this quarter include The Night Fire by Michael Connelly, A Tale of Magic by Chris Colfer, The 19th Christmas by James Patterson and Maxine Paetro, and Shea Serrano’s Movies (and Other Things). We were thrilled at the news that PublicAffairs authors Abhijit V. Banerjee and Esther Duflo were awarded the 2019 Nobel Prize in Economics, with their new book Good Economics for Hard Times to be published on November 12.

We are looking forward to a strong finish to the year, with rising holiday sales of the bestsellers above, a large and lively slate of conservative political books including Triggered by Donald Trump Jr., and new books from many of our most exciting authors, including James Patterson’s dual laydown Criss Cross and Ali Cross, David Baldacci’s A Minute to Midnight, Holly Black’s The Queen of Nothing, Joel Osteen’s The Power of Favor, and Flea’s memoir Acid for the Children.   And we are looking forward to welcoming a new Publisher for Hachette Nashville, Daisy Hutton, who arrives November 11 and will oversee the Christian and conservative publishing programs at FaithWords, Worthy, and Center Street.”

 

At Hachette Livre:

Hachette Livre: For the first nine months, Hachette Livre delivered revenue of €1.707 billion, up 3.3% like-for-like over the same period in 2018, and up 6.2% on a consolidated basis. The difference between these two figures is attributed to a €32 million positive foreign exchange effect mainly from the appreciation of the US dollar, and to a lesser extent tied to the acquisitions of Gigamic (France), Worthy Publishing (US), and Short Books (UK).

Revenue growth through September was the result of a sharp increase in France, primarily in Education and General Literature, as well as by a good performance in Partworks and momentum in Mobile Games.

Third quarter revenues of €663 million were up 6.6% like-for-like and up 9.1% on a consolidated basis. The difference between consolidated and like-for-like revenue is reflects a €9 million positive foreign exchange effect primarily due to the appreciation of the US dollar and, to a lesser extent, a €7 million positive scope effect from the acquisitions of Gigamic and Short Books.

The main changes in Q3 in each geographic area (on a like-for-like basis) can be explained as follows:

  • In France: revenues were up 12.2%, driven by a sharp uptick in the Education segment due to high school curriculum reform, and by good results at Larousse, Illustrated Books, and Distribution, along with strong momentum for Mobile Games.
  • In the US:Hachette Book Group’s revenue remained stable (-0.3%), “reflecting a good showing at Little, Brown (publication of Malcolm Gladwell’s Talking to Strangers in September), at Young Readers and at Grand Central Publishing,” according to Lagardère’s press release. These strong performances were not enough to counter the challenging comparisons with Q3 2018 results for Perseus (notably, strong sales for Jen Sincero’s You are a Badass in that quarter) and Hachette Nashville.
  • In the UK: Revenue in the United Kingdom declined 0.6%, mainly due to a quieter release schedule for Adult Trade, and slower sales in Education.
  • In Spain/Latin America: strong 19.4% revenue growth in the region, attributed to curriculum reform in Spain and Mexico.
  • Partworks: growth of 5.6%, reflecting the success of the Voitures de Tintin and Disney Golden Books collections in France, and good momentum in Japan and Germany.
  • Ebooks: ebooks (including textbooks) accounted for 7.8% of total Lagardère Publishing revenue in Q3 2019, compared to 7.7% in Q3 2018. Digital audio books represented 2.9% of revenue versus 2.8% in the same period in 2018.

At Lagardère:

The Lagardère group delivered revenue of €2.0 billion in the third quarter, compared to €1.895 billion in Q3 2018, an increase of 4.1% like-for-like and 5.5% on a consolidated basis. The difference between consolidated and like-for-like revenue reflects a €20 million positive foreign exchange effect due to the appreciation of the US dollar. The net €9 million positive scope effect is mainly tied to the acquisition at Lagardère Travel Retail of HBF in the United States, offset by the disposal at Lagardère Active of most of the magazine publishing titles in France as part of the Group’s strategic refocusing on Travel Retail and Publishing.

 

Through September, the group’s revenues were €5.612 billion, up 5.7% like-for-like and up 6.7% on a consolidated basis. The difference between these figures reflects a €76 million positive foreign exchange effect (appreciation of the US dollar), and net €13 million negative scope effect mainly due to disposals and acquisitions mentioned above at Lagardère Active and Lagardère Travel Retail.

 

Read Lagardère’s press release for further details