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Lagardere Publishing Finishes Just Above Flat on Acquisitions, As HBG USA Gains in Fourth Quarter

February 8, 2018
By Michael Cader

Lagardere Publishing reported fourth quarter and full-year sales results on Thursday (and, in the European tradition, will not report earnings and complete 2017 details until March). Acquisitions lifted the group just above previous results, rebounding from a soft third quarter, with fourth quarter sales of €624 million (up €5 million), and full year sales of €2.289 billion (up €25 million). Acquisitions added €7 million in the fourth quarter, and €33 million in the full year, meaning performance was down slightly without those additions. The company blames that on the weak British pound — and in the year to come the weaker US dollar will also weigh on their results. Those modest results are in line with what chief executive Arnaud Nourry had told analysts in the middle of the year, saying he “would not bet on significant organic growth for the year.”

In the fourth quarter, sales at HBG USA rose 3.6 percent, thanks to Pete Souza’s Obama and good results from their Nashville division. Hachette UK declined 14.3 percent, on the comparison to last year’s Harry Potter-driven quarter, even with the help of a string of acquisitions. The big French division saw an 11 percent increase, driven by the “success of bestselling titles in illustrated books,” Dan Brown’s Origin, and “a good performance in distribution.”

For the full year, that French division gained 3.4 percent, and their Partworks business was up 8.8 percent. The inclusion and integration of Perseus in the first part of the year (since the unit was acquired in April 2016) added €17 million, the Brainbow and Bookouture acquisitions added €8 million each, and IsCool Entertainment added €2 million. In the first half of the year — prior to acquisitions of Jessica Kingsley Publishers, Summersdale, Kyle Cathie and Meadowbrook Press in the fourth quarter — they had spent €37 million on publishing acquisitions. The weaker British pound was “chiefly” responsible for a €50 million negative foreign exchange effect during the year.

In the investor call, cfo Gerard Adsuar noted that “the ebook business has had a slow decrease in the US, slightly up in the UK, and is growing in France but on a very limited basis.” Ebooks comprised 7.1 percent of fourth quarter revenue, down from 7.6 percent a year ago. He added, “the audiobook market is growing very significantly in the US and the UK and also in France, although it’s much smaller, so if we look at digital business all combined we see a growth.”

Filed Under: Earnings Reports, Free, Publishers

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