Lagardère forecasts €900MN write-down

Leading French media group Lagardère is forecasting impairment losses of around €900 million related both to its struggling sports marketing business and to a charge on its 20% stake in pay-TV group Canal+ France. Last Spring, Lagardère had desperately tempted an IPO over this stake with no success. It was valued at €1.5 billion. Those heady days seem a long way away especially given the travails at the sports marketing division initiated, despite criticism, by managing partner Arnaud Lagardère. The “Unlimited” branch gathers all sport diversification into management and broadcasting rights. Overall, the impairment losses are mainly related to these two assets, the group revealed, adding results also take into account the “weak environment in global economy and in stock market”. In its full-year update, Lagardère SCA net sales for 2011 reached €7.65 billion, a 3.9 % fall on reported basis. However, results could be improved by the 7.5 % stake Lagardère owns in European aeronautic company EADS in which Qatari investors have previously said they were keen to acquire a stake in. Media activities by Lagardère Active generated net sales of €1.441 billion at the end of December 2011, down by 21% on a reported basis. The financial year was 2011 was marked by what the company claimed was robust growth in TV Production—up 8.3%, thanks in the main to TV series Borgia—and TV channels (+7%)  owing to good audiences and advertising revenues on DTT channel Gulli. Performances at French magazines (-2.2%) and Radio (-5.5%) “were more mixed” the company said. However, the Group has confirmed its objective for recurring Media EBIT in 2011, and the “decline of about 5% to 12% on a constant exchange rate basis vs. 2010.