Friday, March 18, 2016

Lagardère hurry to degrease – Liberation

The titles resist, staffing based

In the profession, employees of Lagardère Active, a subsidiary of Lagardère media group, do not have the reputation of being red. In an almost unanimous impulse, they nevertheless Thursday began a strike that should prevent the publication of certain weekend. The reason for their anger? The announcement by the direction of a plane of 220 voluntary redundancies within the press division of the company. The editors of Paris Match, Elle, Télé 7 Jours and Sunday newspaper would be particularly affected. The case of the Sunday newspaper speaks for itself. He could lose almost a third of its workforce reduced by 16 posts

Internally, the magnitude of the shock treatment, which was feared surprises . “The employees who will remain are worried. They wonder how they are going to continue to make headlines with so little, “ says Mariana Sanchez, Associate SNJ-CGT. The Inter requires “gel” the plan. On the side of management, it says it wants to “adapt to the new press’s economy,” with the dissemination and advertising revenues decline structurally. It will do the same with fewer people. “We are not yet in line with the market, which will continue to decline,” it is added to Lagardère Active. The head of the branch, Denis Olivennes, promised that there would be no layoffs. The figure of 220 departures is an objective to achieve a “target organization” in direction. It could change depending on the actual number of volunteers.

These precautions did not visibly calmed anger rumbling. “The unions, who wanted to negotiate, are completely overwhelmed by a very basic recovery “ tells a reporter. The pill all goes worse than titles like Paris Match, Elle or Télé 7 Jours make money. These magazines, among the most powerful of the French press, is still selling very well. Paris Match and It are broadcast respectively 555 000 and 330 000 copies per week.

The new redundancy plan is part of a program the overall savings of 50 million euros. This is the fourth of its kind in less than ten years for a group that is accustomed to living permanently reducing costs. “It tightens the bolts everywhere,” admits a source within the direction. The subsidiary has increased from 4300 to 3500 employees since the end of 2012.

Written pass, the words remain

Officially this screw tightening answers a refocusing strategy to broadcasting, a more flourishing area at the time of any screen and Queen fiction. Editor of the channel Gulli, the company swears by the production, which is already a big actress in France, Lagardère Studios (C in air, Josephine Guardian Angel, Borgia …). It seeks to expand this business overseas. Last year, it bought Boomerang, a Spanish production company. A first step, according to its leaders. This policy is at the expense of the press, historical business group that represents only 41% of the turnover of its media industry. Or straw within 400 million, against € 2 billion when Arnaud Lagardère took over in 2003, the empire built by his father, Jean-Luc and Daniel Filipacchi, which at the time was the world’s largest magazine publisher. Obviously, the heir does not believe that this market has a future, and the general trend does not really have anything to prove him wrong. So it liquid.

Over the past decade, he started by selling its regional titles, in 2007 and its 102 international editions, in 2011, and finally a dozen magazines in 2014. Recently, he sought to separate from Télé 7 Jours, France Sunday and Ici Paris – without success. But “it will not sell the sacred perimeter composed of Paris Match, Elle and the Sunday newspaper,” says a relative. These brands would be full potential. In the group, nobody believes that promise. “It disengages from the press,” summarizes Mariana Sanchez, Associate SNJ-CGT. The announced job cuts will not really say the desire to develop the titles. On the contrary. “Of course it will sell them, reacts old part of the house. It also promised not to give in to international issues. “ Arnaud Lagardère is encouraged in this by the financial results. Contrary to what might suggest that voluntary redundancy plan, they are good. Worn by audiovisual turnover of Lagardère Active has increased in 2015, to complete 962 million. Operating profitability, it also increased, reaching 8.2% of revenues (79 million euros). Yes, the subsidiary is profitable. Over the economic plans and disposals of newspapers, the margin has almost doubled since she had fallen to 4.6% in 2010.

Dividends conquer

From from its 7 billion euros in turnover, the Lagardère group, also present in the publishing, distribution and sports, has plenty bear the decay of its magazines. But “leaders are obsessed with profitability,” says a former executive of the group, who had to deal with this permanent injunction to trace cash. Hence this umpteenth savings plan, designed to maintain the level of margin and weaken even powerful headlines. “Arnaud Lagardère care less press” adds a former head of Lagardère Active. To listen to the accounting logic long ago superseded industrial strategy in the mind of the CEO.

The temptation to spit the beast reflects the personal financial situation of Arnaud Lagardère. Between 2005 and 2007, it has invested heavily to establish its control over the group, from 5% to 10% of capital. Debt his personal company, Lagardère Capital & amp; Management, exploded accordingly, reaching € 435 million end of 2009, the last known official figure. Although it has decreased significantly since, according to the sale of assets and shares, “Arnaud has no choice, it is an infernal logic, it must sell to repay” says the former official. And tighten the costs to increase profitability of the group. Two requirements which are then used to pay generous dividends to shareholders, Arnaud Lagardère himself.

More than 3.2 billion euros were paid in capital remuneration past seven years. The sum is enormous in terms of the operational profitability of the Group (EUR 378 million in 2015) and its performance. Despite the difficulties and the successive plans of economy of the media sector, the ordinary dividend at € 1.30 per share has not changed since 2008. A perfectly consistent assumed atop Group. In a nice euphemism financial, Arnaud Lagardère talks about his title Exchange as a “return value”. “The dividend is proposed to the General Meeting of shareholders and subject to their vote, “ reminds his side the group hierarchy. Way to say it is quite transparent.

Investors nice to be pampered, they begin to wonder where will the group. On March 9, the day of publication of the 2015 results, Lagardère has made a huge 13% drop in the stock market. As if markets were worried about being too generously compensated. A peak.

Jerome Lefilliâtre


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