Lagardere SA

PAR:MMB

Earnings Call Transcript

[Operator]

Ladies and gentlemen, welcome to the Lagardère 2018 Fourth Quarter Revenue Conference Call. I now hand over to Madam Florence Lonis. Madam, please go ahead.

[Florence Lonis, Chief of Investor Relations]

Good morning, everyone. Thank you for joining our conference call for Q4 2018. Today we have with us Arnaud Lagardère, General and Managing Partner; Gerard Adsuar, Group CFO; Marie-Claire Wastiaux the Secretary General and CFO of the Lagardère Publishing division; Dag Rasmussen, the CEO of Lagardère Travel Retail division; and Andrew Georgiou, the CEO of Lagardère Sports and Entertainment division. This morning you will be presented with Q4 2018's revenue. And as usual the conference will end up with a Q&A session.

[Arnaud Lagardère, General & Managing Partner and CEO]

Thank you, Florence. And also with us around the table Ronald Blunden [HCO]. Just if you don't mind, a few words before leaving the floor to Gerard. I have three topics that I'd like to cover very briefly for you. One is on the disposal side. We -- so you've got all the press releases on the different disposals that we made so far. Just a few word I want to tell you that we're on track for the two remaining ones and kind of the large ones. And I think that by June we'll have secured TV Production and by September the sport division disposal. We might be ahead of schedule, especially on TV Production but I wanted to keep a little buffer to avoid disappointing you. I cannot give you any more indication on the price so far, but it's around our expectation. And I think that we are in the right direction. I would like to thank again Gerard and Julien Durant for all the work they've been doing so far for the past months. And it's accelerating now with the management presentation on TV Production and Sport division.Item #2. I had a kick-off meeting with Pierre Leroy, end of last year to -- as I told you during our previous conference call, we designed the corporate of the transformed company, I would say, coming from 4 to our 2 divisions. We focused on 2 main directions. One was obviously cost cutting that we have to do and that we will do. And second is, redesigned the corporate. That doesn't mean that there will not be any more corporate, obviously -- on the contrary, Lagardère SCA will not and will never become a holding company with no meaning. And as far as I'm concerned I will have more time for the pleasure of my colleagues, Dag and Andrew. Much, much more time to focus on publishing and travel retail.They have a huge appetite for acquisitions, huge appetite of growing and huge appetite also to contribute to the transformation of the group. And so far so very good, I'm very happy the way that this new team is working together. Last but not least. Item #3 is the Q4 revenues that were solid, as you could see, mainly due to travel retail, but also to Sport and Publishing. And Publishing was not supposed to have such a good revenue in Q4 because we didn't have aesthetics last year. Do not expect high margins coming from this Q4 because as you know it doesn't come from Education. But we're very happy with the trend that Publishing has been shown on joining Paris the past year. On the other side, Magazine Publishing was down, a little less than 9%. We expected those numbers. They are in line with the budget we had, and in line with the market that we see every single day. So if I wrap-up everything, I just can tell you that we are on track on all topics. And that in the coming months, we'll have quite significant announcement to make to you guys on respecting exactly what I've been saying for the past months, if not past years. We are redesigning the group, changing the financial and industrial profile of the company for the benefit of the shareholders. And I'm kind of very happy with the team I have around me, not to mention obviously Arnaud Nourry, Dag Rasmussen and their team, but also Gerard Adsuar, Julien Durant and every people around the corporate.I'm also very happy with the development of the assets that we'll keep in Lagardère archive, whether it's Europe 1 even if we have some difficulties concerning the ratings. And we're working on this, but also Paris Match, JDD the licenses of ELLE worldwide, everything is on track. And I think that we'll have a very exciting 2019 year. As you said in the U.S., very exciting and challenging at the same time. After my optimism maybe Gerard, he will slow down a little bit for this optimism. I turn the floor to you. Go ahead.

[Gerard Adsuar, Chief Financial Officer]

Okay. Thank you, Arnaud. I will try to give my best. So page -- Slide 3, the group reviews and the peer reviews. The quarter reviews came in a little bit under EUR 2 billion, a rise of 2.1% like-for-like and 4.1% on a consolidated basis. This increase was buoyed by the continuing robust growth at Lagardère Travel Retail and the good performance at Lagardère Publishing and Lagardère Sports, despite tough comparison basis for both. For the full year 2018, revenue totaled EUR 7,258,000,000. So up overall 3.3% on the like-for-like and 2.5% on a consolidated basis. So overall we are very satisfied by this performance, as the group kept up the -- its the gross momentum, followed by the performance of travel retail and achieved, as Arnaud said, despite unfavorable business cycles at Lagardère Publishing and Lagardère Sports.On Slide 4, we detail the impact of scope and currency effects on our full year review. So on one side, the plus 52 million positive scope effect is mainly related to various acquisitions carried out by Lagardère Publishing and also at Lagardère Travel Retail, including $23 million for the HBF acquisition. On the other side, we have a negative currency effect of 100 -- minus EUR 110 million, resulting mainly from the depreciation of the U.S. dollar versus euro or the other PIF.So next slide. Page 5, you can see the breakdown of full year revenue by geographic areas. So we can see, we have a slightly higher presence in the U.S. due to the acquisition of HBF. But overall, we maintain a very robust and diversified footprint worldwide. Let's go now into each division. So Lagardère Publishing on Slide 6. Q3, the quarter revenues totaled EUR 645 million so up 1.4%. But mainly by the success of General Literature in the U.K., particularly with the J.K. Rowling new book, Fantastic Beasts and the -- also in The United States with good [back east] performance and new Nicholas Sparks. So this managed to offset a decline in Partworks in the context of slowdown in Argentina. But also as you remember, the unfavorable comparison [ basis link ] to the success of Illustrated last year. So overall, review for the full year of total EUR 2,252,000,000, down 1.2% like-for-like. Reflecting the decline in educational review by EUR 50 million roughly, due, as you as know to the sort of unprecedented absence of curriculum reform in our 3 countries. This was, but only partially offset by a very strong performance in General Literature, which for the full year was up $22 million. Thanks to the bestselling titles such as: The President is Missing, in the U.S.; Fire and Fury, if you remember in the first half in the U.K.; or Fantastic Beasts from the J.K. Rowling in the last quarter; and also the Michelle Obama book in France, in the last quarter, just to name a few ones. This will have, as you can expect, a negative impact on profit and profitability, as Education accelerates at a much higher contribution amounting than trade. So everything, and as Arnaud mentioned, so everything being equal. A decrease in Education revenue has a more important impact on profit and has the same decrease in trade. Additionally, remember that in 2018 we have no stakes, and we will have also this negative currency effect of the devaluation of the dollar. But all of these obviously is captured in the group guidance of course.On the next slide, we have the breakdown of the Publishing revenues by geographies and also by segments. So you can see the decrease of the Education segment compensated by the increase of the General Literature segment. Lagardère travel retail, now on Slide 8. The fourth quarter revenue was up to EUR 950 million, so a rise of 5.6% like-for-like. To be noted that this quarter, the concessions opened in Geneva, Dakar and Hong Kong in the fourth quarter of 2017 became comparable. So explaining the slowdown in growth but all of this was expected and announced. France was up in the quarter by 6.5%, with a continuing growth in the regional Duty Free platforms. The success of the new ELLE Duty Free Relay concepts and the network expansion in Foodservice. Despite Geneva and Dakar concession becoming comparable. The EMEA region maintained a solid 4.5% growth with good sales performance and positive net for effect in Eastern Europe as well as gross of the regional platforms in Italy. North America reported 5.6% growth in the quarter due to the network expansion in Foodservice. And a combination of successful sales promotions and continued strong passenger traffic. Finally, the Asia Pacific region turned on another good performance in the quarter despite Hong Kong concession becoming comparable as well, with revenues up 7.6% on the back of bullish rules in Asia and a sustained network effect in China in particular. So 2018 revenued totaled EUR 3,673,000,000 for the division. Overall, on the full year, a rise of 8.8% like-for-like and 7.7% based on consolidated figures.Next slide, you can see. So Slide 9, the breakdown of Travel Retail by geographic areas and activity. So you can observe that we are fairly diversified geographically with strong presence, of course, in Europe and the U.S. and it would be even the more important in the U.S. next year with the acquisition -- with the full year acquisition of HBF. And we are also diversified on the three segment of Travel Retail, with roughly 40% in Duty Free, 40% in travel essential and 20% in food.Next slide, Lagardère Active. The Q4 revenues were down 6.6% like-for-like due mainly to the decline of Magazine Publishing, which were down a little bit less than 9% versus last year. Revenues for the Radio segment slightly decreased, minus 2.7% due to the impact of the lower audience figure from the Europe 1 radio station. In the quarter, the TV activities retreated as well, minus 6%, with a slowdown in audio-visual production in the last quarter due to the strong program delivery flow in the previous quarter. I'm sure you remember, our Q3 was up. And overall, TV posted revenue growth overall in the second half of the year. And TV channels advertising reviews also remain unbeat this quarter. Revenues for the full year totaled EUR 895 million, down 2.3% like-for-like. Next page, you can see the breakdown of the activity in particular on -- as the parameter is changing with the future disposal, we have provided here a little bit more detail. On the right-hand side graph of the breakdown of the various activities, which I'm sure would be helpful.Now last but not least. Lagardère Sports and Entertainment, on Slide 12. The fourth quarter revenue was -- came in at EUR 135 million. So up 0.9% like-for-like, thanks to strong performance from the Olympic division and football activities in Europe, offsetting the termination of some tennis activities in Sweden. So overall, the 2018 revenue totaled EUR 478 million. So down 4% like-for-like, due as expected to the unfavorable stocking calendar but -- which was also offset with a very strong performance on the marketing activities in the year. So we are very happy with the performance of the team as we told you also during the last Q3 presentation. So these results confirmed our satisfaction on the strong performance.So on Slide 13, the breakdown of activities that we'll not comment. So finally on Slide 14, the guidance. So we confirm the guidance that we have announced in July, the H1 results, so for itself in the '18, as a group recurring EBIT growth. We expect it to be between 1% and 3% versus 2017 at constant exchange rates excluding the impact of disposal at Lagardère Active and the acquisition of HBF, the Lagardère Travel Retail and that is means in term of numbers between EUR 397 million and EUR 405 million. So this concludes my presentation. So let's start with the Q&A.

[Florence Lonis, Chief of Investor Relations]

So please go ahead with the questions.

[Operator]

[Operator Instructions] We already have one question from Mr. Julien from Barclays.

[Julien Roch, MD & European Media Analyst]

My first question is -- Arnaud -- coming back to you into, what do you mean by redesigning the corporate? More cost savings than the EUR 10 million link selling Active? Are you thinking about merging corporate and all the back office of the two remaining divisions? So if you could give us more color on what does that mean redesigning the corporate and maybe a financial impact? That's my first question. The second one is, can you remind us of all the assets you have sold? LARI, French Magazine, Doctissimo, MonDocteur Boursier.com, BilletReduc, did I forget anything? If we could get a disposal price for the 3 online assets, I don't think -- actually there are 4 online assets, sorry. I don't think you've given one. And how much revenues and operating profit all those business in 2018? And my third question is, you gave us the timing of selling key production in Sports. Can you give us some color on the timing of acquisition?

[Arnaud Lagardère, General & Managing Partner and CEO]

Julien, okay. Gerard will give you more details on the prices, including the online assets. We go in the redesign, more cost selling than the EUR 10 million yet. Yes, that's the idea. When you mentioned, Julien, that the we might or could bring up some services from the last 2 divisions to the corporate, that's not the idea. The idea is to continue to be kind of decentralized. And because those divisions need to move faster in a world that move faster. They will need to have all the tools. The idea is more to focus on strategy and finance on the corporate. And on the other, I would say, part of the corporate, maybe to stream them a little bit and make them smaller. And why not have some of them disappear, but this is a work that is in process. And again, it's under the management, the control of, Pierre Leroy, is having discussions with the people of the corporate. He doesn't want to take any decision without having their inputs and their advices. So we have to do this very carefully, but it will be significant. So again, Julien, to make myself maybe clearer, the idea is to continue to be decentralized, but at the same time to probably reinforce some control from the group, which is why the group is and especially around the [ ODIX ] probably redesigned the [ ODIX ] focus on something that is more efficient. For the group, redesign maybe the financial part of it and get some more control for the supervisory board. But again, I want to give you more details later on. You mentioned the $10 million cost saving that we've already announced. The idea is to go further. Don't forget also Julien that in the corporate you have some activities such as the remaining assets of Lagardère Active that we'll have to take care of. There will not be a division in itself. So there will be totally included and merged with the corporate. And obviously that brings reserve to the corporate. The idea is to be either flat or positive corporate plus those activities in the medium term. You also asked a question that I'm waiting for Gerard to be back. He escaped, probably not the question, but he's getting some numbers. He is back, Gerard on the -- to get more details on the disposals we've made and especially on the online assets.

[Gerard Adsuar, Chief Financial Officer]

Yes, we -- so if you recall, so we had -- we have sold LARI for enterprise value of EUR 73 million. So we have sold Marie Claire for EUR 14 million. So on -- we have sold the MonDocteur and Doctissimo for an amount at 100%, an enterprise value of EUR 60 million, 6-0. So as we have 70% -- we had only 70% participation into MonDocteur. The rate was 30% with the fund there. This translates into a cash impact of EUR 55 million. And then finally, we have Boursier, which is a smaller one, with EUR 3.5 million. BilletRéduc, we have not announced the price as we are -- I think we are into -- we are in an exclusive negotiation for the time being. And I think that's it.

[Julien Roch, MD & European Media Analyst]

Yes. As you've given all the numbers, can you remind us the French Magazine? And then the other question was not on the disposal price, but if you take all of that, so LARI, MonDocteur, Doctissimo, Boursier, BilletRéduc and the French Magazine, how much actual revenue and operating profit you had from all those assets in 2018?

[Gerard Adsuar, Chief Financial Officer]

So the -- we announced -- you're right, the price for the press that you have to add, which is EUR 52 million. Now in term of revenues, you have the breakdown on the Page 11, which should give you all the details you need because we have shown the revenues of the international radio, the revenues of the press that we are going to sell, the revenues of Lagardère Studios as well and of the TV channels. So I think you have here all the detail. For what concerns the impact on the profit of the activity of the divestiture that we have made last year, it is an impact -- let me check -- yes, for -- so for the impact of this -- of the sale of the international radios and of the details for and -- that we closed last year, the negative impact is minus EUR 1.4 million -- no, sorry, it's -- no, no, no.

[Florence Lonis, Chief of Investor Relations]

Net of HBF.

[Gerard Adsuar, Chief Financial Officer]

Net of HBF. So the impact which is included in the guidance, sorry, is minus EUR 2.6 million. So we have an impact of 1 -- plus EUR 1.2 million of the acquisition of HBF. So for the activity that we have sold last year, it's minus EUR 2.6 million. The activity of the TV channels that we have not sold yet, but that's where we have announced an extremely period of negotiation with M6, I -- we have provided in the press release that's the impact for -- was in EBIT around EUR 20 million, slightly north of EUR 20 million. For the press that we have not -- that we should close in the next few days, I hope. The rise up for last year is -- roughly is a bit north of EUR 20 million. But remember that we have been spending in the past years some restructuring in this activity. So we should take sort of normative restructuring number for this activity that we sell. At the EBIT level, we have to add the numbers. So it's more in the region of EUR 10 million for the price of EUR 52 million. So I think it's a good multiple for this activity. That is -- I think I have given you all the information that we have provided.

[Julien Roch, MD & European Media Analyst]

By all the online assets together, how much operating profit there were in 2018? The 4 assets you sold.

[Gerard Adsuar, Chief Financial Officer]

But -- in 2018, it was around EUR 3 million because if you want to go from '18 to '19, you have to reduce by I say minus EUR 2.6 million.

[Julien Roch, MD & European Media Analyst]

Because that's the...

[Gerard Adsuar, Chief Financial Officer]

Remember that we sold this activity -- so it's -- sorry, including LARI then, all together.

[Julien Roch, MD & European Media Analyst]

[Foreign Language], what I wanted is a kind of a pro forma '18, if you sold everything for the whole year, so we can see what the impact will be on 2019? So I understand there's no impact in the number yet, but the 4 online businesses you sold, what operating profit did they do in 2018?

[Gerard Adsuar, Chief Financial Officer]

Well, we did not -- I have -- well, I do not have the number here. What I'm telling you is that the overall -- the LARI activity plus the [ ES ] activities, it's -- it was minus -- it was EUR 2.6 million. So if you want to go from the rise up of '18 to '19, and you would have sold only these activities, you have to do minus EUR 2.6 million. Am I clear?

[Julien Roch, MD & European Media Analyst]

Yes. Okay. And the last question for Arnaud was timing of acquisitions. Anything you can say there?

[Arnaud Lagardère, General & Managing Partner and CEO]

Yes, Julien, you can imagine that both Dag and Arnaud are working hard on this just to be the first one to cash out, I would say. It depends on the target we have in mind. If you are looking for premium acquisitions, I would say, we're still looking for the Publishing side. No, it's -- I don't want to mention the targets, but you probably have it in mind. When targets are not for sale officially, it takes time, it takes a lot of work to convince people to sell them, if they want to do it. So we are in that process, and it takes a little time so nothing would happen by June, I'm pretty sure. And then we'll see what happens. Obviously, we have plan Bs, plan Cs and so on. But we want to remain focused on the premium targets and not spend the money on -- and find ourselves lack of money if the premium targets are open for sale. On Travel Retail, it's pretty much the same thing. So overall, I don't see anything happening by June. And then -- which is fine, by the way because we still have -- we haven't cashed in the disposal of most of our assets. It will come in month by month starting now. And the 3 main assets, TV Production, TV channels and Sports, I don't think we'll cash them in by June definitely or maybe around June, so we have a little time on this. But we're working on this, Julien, and I understand that part 2 of this transformation, which is acquisitions is obviously key. So we're doing whatever we can. And don't worry, we're 100% focused on this. Julien, maybe turning on back to the second question. I see that you're not 100% satisfied with the answers. What I suggest is that maybe Gerard work on the online part of it more in depth and get back to you and all of you guys maybe to give you more precise numbers. Right, Julien?

[Julien Roch, MD & European Media Analyst]

Yes. Okay.

[Operator]

[Operator Instructions] We have a question from Charles-Louis Scotti from Kepler Cheuvreux.

[Charles-Louis Scotti]

My first question is about the curriculum reforming the traditional business. If I understand well, the contribution from the curriculum reform will be back-end noted in 2019 where the press would be front-end loaded. So can we expect the negative impact from the profitability of the Publishing activity in H1 '19? Then my second question, can you give us a trading update because we are offering in Q1 as the really good trend recording in Q4 continued into Q1, especially in the Travel Retail segment? Then on the IFRS 16, I know that they will have a -- delivering session next week, but is the impact of the application of IFRS 16 really done for you? And then last question on your small acquisition of Gigamic, can you give us an idea of the contribution and the price paid?

[Arnaud Lagardère, General & Managing Partner and CEO]

Okay, Charles. Who wants to start? You want to start, Paradies, or -- yes? Okay, Paradies, go ahead.

[Gregg Paradies, Chief Executive Officer and President]

Thank you, Arnaud. I can start on the curriculum reform in '19 in France. So obviously, it will drive our revenues up in '19 in France. But as you know the reform in high school, we should bear in the mind that high school is a smaller segment in education in France. There are 3 levels in high school versus 4 in middle school and 5 in primary. So it's a smaller segment, with less students per level. And as Arnaud already mentioned last time, we will have 2 levels reformed in '19. And we have a strong uncertainty in the level of financing by the regions in France. So we will -- obviously, we will make to textbooks for the two levels, but we don't know yet very precisely as the level of revenues that we will drop on this in '19. So this is what I can say for the high school reform in France. And as you probably already know, we do not expect curriculum changes in Spain and in the U.K. in the near future. As far as Gigamic is concerned, I just can tell you that they generate around EUR 15 million of revenues and that the EBIT margin is around -- is between 10% to 15%. And maybe just to complement on high school and the high school reform, the other uncertainty we have, I mentioned the level of public funding by the regions. And we also have another uncertainty on the percentage of digital textbooks in '19. So we don't know precisely what will be the choice of the regions between digital and paper textbooks. So this is obviously another uncertainty for revenues and margins in '19.

[Arnaud Lagardère, General & Managing Partner and CEO]

Okay, Paradies, thank you. Gerard, quick words on the IFRS 16.

[Gerard Adsuar, Chief Financial Officer]

Well, on IFRS 16, yes, that's a relevant to us. And this is why I will be holding sort of education session next week dedicated to this topic. So we will have all the answer to the questions during this specific presentation. And of course, you will have the impact also when we will announce the results, full year results in March. I remember that everybody that this is a norm which will be implemented from January 2019 onwards.

[Arnaud Lagardère, General & Managing Partner and CEO]

Okay. About Q1 2019, could you start, Andrew, about the Sports division and then Dag and Paradies?

[Andrew Georgiou, Chief Executive Officer]

Yes. From the Sports division, Q1 is a pretty strong quarter for us because of the AFC Asian Cup, which took place in the U.A.E., which was a very strong performing asset from our Asian football portfolio. The rest of the division has continued to trend as normal from the previous year. So no surprises, no specific ups or downs, it's really the Asian cup that is driving the performance in Q1.

[Arnaud Lagardère, General & Managing Partner and CEO]

Okay. Dag?

[Dag Inge Rasmussen, Chairman and Chief Executive Officer]

Yes, regarding Travel Retail, there's no slowdown that we can observe. It's fairly stable compared to the Q4 figures for the time being.

[Arnaud Lagardère, General & Managing Partner and CEO]

Paradies?

[Gregg Paradies, Chief Executive Officer and President]

For Q1, in Publishing, it will be probably as well pretty stable compared to '18. And you should bear in mind that in '18, we had Fire and Fury in the U.K. So probably as far as the U.K. is concerned, we will have a negative comparison impact in '19. But for the rest, no precise invitation at that stage.

[Arnaud Lagardère, General & Managing Partner and CEO]

Let me cover the active part. Maybe, Gerard, you should -- you could tell everybody how we will ask the quite tricky question, how we -- will we consolidate and what will we consolidate in 2019, considering the assets that we will sell mid-year. As far as Active is concerned, the assets that we will keep long term -- I mean, this year at least, which is Europa, Match, JDD and the licenses of ELLE, it's on track. As you know, the difficulty we have and that's the only one, but it's significant. It's -- it is Europa and we are working on this. So we try to -- as much as we can to compensate the bad ratings with the -- some cost reductions and also at the same time, find a way to beef up a little bit the revenues coming from advertising. Match is doing well. JDD is doing well so far, but it's only a month. And the licenses from ELLE and whether it's coming from the magazines themselves, royalties we get from Hearst, for example, and also all the merchandising we do in Asia are on track and doing well so far, but again, I mean, it's just a month. But the good momentum is still on. Gerard?

[Gerard Adsuar, Chief Financial Officer]

Yes. So for next year what you should consider is that we will sell progressively the assets, the remaining assets over the time, within the time frame that Arnaud has mentioned. So -- but today, most probably in the first half, we will have the profit and the revenues from the activities, TV and Lagardère Studios and Sports. So it will be done proportionally into the number of months that we have then during the year as we have done for LARI and over the ELLE definitely this last year. So that's -- yes, that's the way we see it.

[Arnaud Lagardère, General & Managing Partner and CEO]

And obviously for the guidance that we will give you March 13, it will be on a comparable basis. And you will have obviously all the details on the assets that we've sold, the assets that we would keep a few months and so on. So we'll do our best, so that you have a very clear and clean idea of the group in the future, focusing again on Publishing and Travel Retail. Is that okay with you, Charles?

[Charles-Louis Scotti]

Yes. Just one sort of question on the curriculum reform. You mentioned digital. How digital is impacting your Publishing business, not only on profitability? And do you see [ a rapid room for digital ] in cultural reform -- in France and in Europe more broadly speaking?

[Gregg Paradies, Chief Executive Officer and President]

I would say that as far as the high school is concerned, probably the impact of digital will be higher than for other levels compared to medium school and obviously primary school. We anticipate that the impact of digital will be higher. And so it will mitigate a little bit the rebound effect of the first year of the reform and it will reduce to a certain extent the [ significance ] of our business in education because obviously it will kind of generate additional revenues over the year, but it will reduce as well the rebound for the first year of the reform.

[Arnaud Lagardère, General & Managing Partner and CEO]

Yes. So this -- we've been dealing with this for a long time that it was -- if we want to make a long story short, digital is not a threat. It's an opportunity for the book publishing, which is unfortunately not the same for Magazine Publishing and so on. As you've seen it during the e-book ramp-up and then stabilization for the past year, so whatever happens, we'll be there. We'll be a leader and we will focus on developing the content, the asset and the distribution channel, whatever it is. So it's a good thing for us anyway. Maybe we'll take another question? Or Charles, do you have another question?

[Charles-Louis Scotti]

No, no.

[Operator]

[Operator Instructions] We don't have any more question for the moment. [Operator Instructions] We have a question from Patrick Wellington from Morgan Stanley.

[Patrick Thomas Wellington]

A couple of things. Firstly on the timing of disposals, you'd be very helpful in that respect. I think there's a bit of delay, isn't there? I thought we were going to get the 3 big disposals come by the end of June. So you seem very optimistic about getting the 2 TV disposals done by that time. But the Sports disposal seems to have moved slightly to the right. And I wondered whether there was anything behind that. And then secondly, there's been a bit of coverage in the French press about your relations, both within the capital and with the Qatari core shareholder. And I just wondered whether there's anything you can tell us about that. As an Anglo-Saxon, I missed some of the nuance sometimes, I think. So anything you can tell us there would be helpful.

[Arnaud Lagardère, General & Managing Partner and CEO]

Okay. Yes, on the timing -- and again, that could be faster, but TV, whether it's Production or channel, it's doing fine. We have a price range. We -- for the TV channel, it's done with an exclusive period of time with them fixed, and we're very happy with this. And on the TV Production, it's going really, really fast. We're having management presentation right now. And again, I'm -- I'd like to take a little buffer because at the end, since we have a lot of contenders, about 6 -- 5, sorry. Some of them are investment funds, some others are industrial companies. So -- and they are kind of close to each other, which is good for us because it means that we have the right price. And at the end, we'll have to choose the best offer. So it's a process we want to get -- we want to give some time, we want to be cautious and we want to do it the right way, not only for the shareholders, but also for the company that we will sell and the management team that we sell because they are part of the process. On Sports, there's nothing behind, absolutely nothing behind. It's just that it takes a little more time because it's a little more complex. The offers are coming from literally everywhere from the world as you could imagine because we have activities which is not the case in the TV channel and TV Production in the U.S., in Europe and in Asia. So it's a big thing to deal with. So that's why I took a little buffer. And again, as I said to Julien before, since we don't have any targets or any -- well, we have target, sorry, but since we don't have any precise acquisitions that we are negotiating right now, it gives us a little more time, maybe to gain. And this is our job, tens of millions or maybe just billions, it doesn't matter. So we have a little time on this and less pressure, which is better to get a higher price. But there's nothing behind this, don't worry. About Qatar, to tell you the truth, I didn't really get your point but I've read the press also with you. Globally, we have a very good relation with Qatar, always had. They've always voted in the favor of what the supervisory board presented to the General Assembly for the past -- they've been here since 2006, so for the past 12 years. And I think that they will they continue to do so. So you can put a part of the excitement that is coming from the activists, and we are dealing with those guys in a separate matter. So we don't have any worries and you shouldn't have any worries. What's important is that all shareholders are on track with the strategy, which is the case. And as far as the execution is concerned, they should trust her because so far we've done a great job. And if you look at the track record of the company, both disposals and acquisitions, I think we've done a great job. I mean, we haven't succeeded in every single thing obviously. We made some mistakes obviously, small one but some obviously. And it's my responsibility to recognize that. But you can trust even myself or Arnaud Nourry or Dag Rasmussen will be at the same time cautious but aggressive on the acquisitions, very aggressive. And you can count on us to protect the interest of the shareholders. Patrick, yes, go ahead.

[Patrick Thomas Wellington]

No, I think that's right. You have very good record on disposals. And the market seems to have in mind that each of your TV units should raise about EUR 200 million. I think from your response that you think you can do somewhat better than that?

[Arnaud Lagardère, General & Managing Partner and CEO]

On the TV channel?

[Patrick Thomas Wellington]

TV channels and TV Production, the market seems to have EUR 200 million in for each of those.

[Arnaud Lagardère, General & Managing Partner and CEO]

Yes, right, right. It's -- but -- well, to tell you the truth, we don't have the precise number. I would give it to you if we had it. We have a window. And it's going to be the TV channel, I hope. It's going to be slightly higher than EUR 200 million. If you add also Mezzo, that will be for sale, not to [ M6 ], but we are in the middle of the process. We own 60% of Mezzo as you know. If you add this, we'll be quite higher than EUR 200 million, yes. And so our TV Production is our concern. I cannot give you any numbers because we don't have the definite numbers, but we are targeting a higher number than EUR 200 million also. And that's pretty much what I can tell you. I'm sorry, Patrick.

[Patrick Thomas Wellington]

No, that's very helpful.

[Arnaud Lagardère, General & Managing Partner and CEO]

Is there any other question? I don't think there are any questions. So we would like to thank you all for your time. And if you need any more precise answer, especially on the -- Julien's question around Internet properties that we've sold, please don't hesitate to call me or Florence. We'd be more than happy to give you more precise answers. Thank you so much, and talk to you next time. Bye-bye.

[Florence Lonis, Chief of Investor Relations]

Thank you, bye.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.