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Lagardere Q4 Net Sales Down, Yet Lifts FY13 Earnings View; Stock Up

Shares of Lagardere SCA (LGDDF.PK) increased around 4 percent in Paris trading after the French conglomerate lifted its forecast for fiscal 2013 recurring media EBIT, a key earnings metric, citing sales above forecasts at Lagardere Publishing and in Travel Retail segments. Meanwhile, the company recorded lower net sales for its fourth quarter and full year.

For the fourth quarter, net sales declined 4.2 percent year-over-year to 1.93 billion euros related to a very negative currency effect due to the rise of the euro. On a like-for-like basis, sales were down 2.1 percent.

The company noted that Lagardere Services segment experienced the continued unfavorable effect of the end of tobacco sales in Hungary, subsequent to a change in regulations in July 2013. Excluding this, activity at Lagardere Services would be up 2.5 percent like-for-like for the quarter, and the evolution as a whole would be reduced to negative 1 percent.

In the quarter, Lagardere Publishing segment's activity grew 6.7 percent on a like-for-like basis to 569 million euros, benefited by good performance on almost all markets, in particular in the UK, France and in Partworks.

At Lagardere Services, travel retail activity continued its growth trend with 4.6 percent increase on a like-for-like basis, benefited by improvement in all countries, specifically in the Travel Essentials segment.

The company noted that Lagardere Active segment's net sales went down 10.4 percent on a like-for-like basis, due mainly to the atypical delivery schedule of TV Production. Excluding this, trends were better in distribution and more difficult in advertising.

At Lagardere Unlimited, like-for-like net sales fell 26.8 percent as activity was, as expected, negatively impacted by a less-promising events calendar.

For the full year 2013, net sales declined 2.1 percent on a reported basis and 1.3 percent on a like-for-like basis to 7.22 billion euros. In the year, a negative currency effect was partially offset by a positive scope effect related primarily to acquisitions in Travel Retail and the LeGuide group.

Lagardere noted that at year's end, it benefited from improved trends in General Literature, Illustrated books, Partworks and Travel Retail. These were offset by an unfavorable calendar effect at Lagardere Active in Audiovisual Production and at Lagardere Unlimited.

For the year 2013, recurring media EBIT increase is expected slightly above 5 percent, exceeding the announced guidance, the company said.

While announcing its third-quarter results in November, Lagardere had said that recurring EBIT from Media activities would grow between 0 percent and 5 percent compared to 2012 at constant exchange rates.

The company is scheduled to release full-year 2013 results on March 12.

In Paris, Lagardere shares are currently trading at 28.28 euros, up 0.99 euros or 3.65 percent.

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by RTT Staff Writer

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