Final Results

Lagardere S.C.A.
08 March 2006


     8.9% GROWTH IN LAGARDRE SCA RECURRING EBIT BEFORE ASSOCIATES TO €896M
 
          7.1% GROWTH IN LAGARDRE MEDIA RECURRING EBIT BEFORE ASSOCIATES
 
     10.3% GROWTH IN LAGARDRE MEDIA TARGET RECURRING EBIT BEFORE ASSOCIATES
             (EXCL. STOCK OPTIONS, INVESTMENT IN DTT, AND AT €/$: 1.3)
 
      CONSOLIDATED NET INCOME FOR LAGARDERE EXCL. EADS: €431M (UP 20.0%)


    

On March 8, 2006, the Supervisory Board reviewed the 2005 consolidated financial
statements of LAGARDERE SCA, as presented by Arnaud Lagardere, General Partner,
Philippe Camus and Pierre Leroy, co-Managing Partners.


Highlights for the year ended December 31, 2005:

-     Lagardere Media net sales up 5.3% at €7,901m (up 2.5% like-for-like)

-     Lagardere Media recurring EBIT before associates up 7.1% at €503m.
      Excluding stock option costs and investment in digital terrestrial 
      television DTT), and at a €/$ exchange rate of 1.3, the increase is 10.3%, 
      beating the ' 5%-9%' guidance announced in September 2005.

-     Solid growth of 20.0% in consolidated net income before minorities
      of LAGARDERE excluding EADS (20.8% after minorities).

-     Net cash flow from operations excluding EADS up nearly 10% at €654m,
      vs. €595m in 2004.



-     Further debt reduction: net bank debt (excluding EADS and T-online)
      of €1,120m, vs. €1,699m in 2004.



-    Proposed dividend of €1.10 per share to be paid out of 2005 profits,
     compared with €1 paid out of 2004 profits (excluding exceptional dividend 
     of €2 paid in July 2005).




CONSOLIDATED NET SALES


LAGARDERE SCA consolidated net sales were up 5.8% at €13,013m (vs. €12,296m in
2004).


-       Lagardere Media net sales up 2.5% on a like-for-like basis

Net sales at Lagardere Media were up 2.5% like-for-like, at €7,901m.


The Books division recorded another year of solid growth, with like-for-like
sales up 3.5%. Hachette Livre also benefited from the full-year consolidation of
Hodder Headline, which added €176m. The Press division saw like-for-like sales
edge up 0.6%. The Distribution division' like-for-like sales were up 2%,
gradually erasing the weak first quarter over the rest of the year, the final
quarter being particularly good. Lagardere Active had an excellent year, with
like-for-like net sales up 9.2%.



-      EADS contribution to consolidated net sales up 6.6% at €5,112m


Airbus and Eurocopter were the main drivers of growth, to which all divisions
contributed, except for MTA (Military Transport Aircraft). Airbus delivered 378
aircraft in 2005, 58 more than in the previous year, mainly A320-family
single-aisle planes.

Eurocopter deliveries reached 334 units, 55 more than in 2004, including 5 Tigre
assault helicopters. These deliveries, combined with billings on military
programs, lifted Eurocopter net sales (100% basis) to €3.2bn, 15% more than in
the previous year.



RECURRING EBIT BEFORE ASSOCIATES


-      Recurring EBIT before associates (excluding stock options and
investment in DTT, and at €/$: 1.3) of Lagardere Media up 10.3%



The Lagardere Media division, which contributed €503m (up 7.1%), recorded growth
of 10.3% relative to 2004, excluding the cost of stock options and investment in
DTT and at €/$: 1.3.


Lagardere Media                                     2004       2005    % growth
Recurring EBIT before associates                   470.1      503.3       7.1%
Stock option plans                                 +10.1      +21.8
Investment in DTT                                   0          +7.3
2005 at €/$ of 1.3                                             -2.5
Restated recurring EBIT before associates         480.2       529.9       10.3%



On a reported basis (including investment in DTT and stock options), Lagardere
Media achieved an operating margin of 6.4% in 2005, compared with 6.3% in 2004.



The Books division turned in a very fine performance. Education in France
continues to improve its market share in a weakening market. Anaya had a
successful year, thanks to the Education segment and part-works sales. In
France, as expected, General Literature was the main growth-driver. Sales of '
The Da Vinci Code' (750,000 copies in 2005) and of 'Anges et Demons'
(1 million copies) were supplemented by the literary prizes won at the end of
the year (Prix Goncourt for Grasset, Prix Interallie for Fayard, Prix Renaudot
for Stock...). However, the Larousse Group was hit by tough comparatives.

Hodder Headline's contribution was better than expected.

Overall, operating margin was maintained at 11.5%, compared with 11.6% in 2004,
despite the inclusion of an additional six-month stock option plan.





Lagardere Active posted record recurring EBIT before associates of €47m, against
€37m in 2004, after taking into account the investment in DTT (€7.3m) and the
additional six-month stock option plan. Operating margin increased sharply from
6.6% in 2004 to 7.5% in 2005. The impact on recurring EBIT before associates of
the drop in sales at Europe 2 and lackluster sales for Europe 1 was more than
offset by the contributions from International Radio and good results from the
Audiovisual business. Investments by Lagardere Active Broadband (digital
activities excluding Radio and Television) cost €9m in 2005 vs. €5m in 2004, and
reflect increased support for the high-growth BlingTones business in the United
States (digital content for mobile phones).



The Distribution division saw recurring EBIT before associates rise by nearly
5.5% to €106m. The French performance was excellent, boosted by recovery at
Aelia and a big increase in the contribution from Relay. Virgin moved into the
black. The American and Australian businesses also had a very good year. Belgium
was down on the previous year, though Eastern Europe was in line with forecasts.



The Press division, as expected, achieved recurring EBIT before associates of
€161m, 4% lower than in 2004. Excluding the impact of stock options, recurring
EBIT before associates was down only 2.2%. The cost of new launches (just under
€40m) hit 2005 results hard, as did the loss of a custom publishing contract
with Philip Morris (contribution of around €5m). The competitive environment in
France remains tough and the recovery in advertising spend soft. However, the
success of the new launches and the withdrawal of loss-making titles enabled the
French division to return to growth.

In addition to the loss of the custom publishing contract, the United States
suffered from weak advertising spend by carmakers, especially at the start of
the year. The Italian and Japanese subsidiaries, which are undergoing
restructuring, recorded better results after a difficult 2004. As in previous
years, sales in emerging markets (Russia, China) held up very well throughout
the year.




-    EADS significantly improved its contribution to LAGARDERE's
consolidated recurring EBIT before associates to €392m (vs. €350m in 2004)



In 2005, EADS again posted record results: an excellent performance largely due
to strong earnings growth, not only for Airbus but also for the Defense and
Space divisions.




Overall, for LAGARDERE SCA, recurring EBIT before associates was €896m (against
€823m in 2004).



INCOME FROM ASSOCIATES



Income from associates for LAGARDERE excluding EADS was €63m, against €41m in
2004.

The increase was due to a further improvement in the contribution from CanalSat
(€45m vs. €39m in 2004) and fine performances from Marie-Claire and the Amaury
group. 2004 was also affected by a €13m charge to provisions for impairment
relating to the stake in multiThematiques, which did not recur in 2005.



NON-RECURRING ITEMS


Non-recurring items showed a charge of €67m for LAGARDERE excluding EADS,
including €59m of impairment losses on intangible assets in Audiovisual (mainly
on theme channels) and Press (publication titles and photo agencies).

Most of the rest related to restructuring costs incurred by the Press division.



FINANCIAL INCOME/EXPENSE


Net financial expense at LAGARDERE SCA amounted to €76m (against €97m in 2004).
Excluding the EADS contribution, net financial expense was static at €53m, vs.
€52m in 2004.
The 2004 figure did not include the interest on the liability relating to
divested Editis assets, which was just under €15m. If we restate 2004 net
financial expense to include this interest, 2005 net financial expense showed an
improvement, in line with debt reduction.


INCOME TAXES


For the group as a whole, income taxes totaled €142m, including €126m for EADS.

The tax charge payable by Lagardere excluding EADS was positively impacted by
non-recurring items of €99m, mostly reversals of non-recurring provisions
(resolution of tax disputes and new rules on the taxation of perpetual loan
notes).


MINORITY INTERESTS in net income amounted to €32m, of which €5m related to EADS.




Taking these various items into account, consolidated net income rose by 35.3%
to €670m.

Consolidated net income for Lagardere excluding EADS was €404m, 20.8% higher
than in 2004.


                                                 2004                                     2005

In millions of euros             Lagardere      EADS    Lagardere Group   Lagardere       EADS    Lagardere Group
                                group excl.                  Total       group excl.                   Total
                                    EADS                                     EADS
Net sales                          7,501        4,795       12,296          7,901        5,112        13,013
Recurring EBIT before               473          350          823            504          392           896
associates
Non-recurring items                  30         (18)          12             (67)         (3)          (70)
Income from associates               41          13           54              63           31           94
EBIT                                544          345          889            500          420           920
Net financial expense               (52)        (45)         (97)            (53)         (23)         (76)
Income taxes                       (132)        (108)        (240)           (16)        (126)         (142)
Net income before minority          360          192          552            431          271           702
interests
Minority interests                  (25)        (32)         (57)            (27)         (5)          (32)
Net income                          335          160          495            404          266           670




                                                                        2004                    2005

Net income excluding EADS                                               335                      404

Tax-related non-recurring items                                          0                      (99)

Reversal of provision on T-Online shares, net of tax                    (88)                      0

Adjusted net income excluding EADS                                      247                      305

Impairment losses on PP&E, goodwill and intangibles                      85                      55

Adjusted net income excluding EADS                                      332                      360
(before impairment losses on PP&E, goodwill and intangibles)



DEBT REDUCTION


At December 31, 2005, net bank debt amounted to €863m, an increase on the end
December 2004 figure of €433m.

Excluding EADS and T-Online, net debt was €1,120m, against €1,699m at end 2004.

The acquisitions of Time Warner Book Group and 20% of Canal+ France took place
after year-end and had no impact on debt at December 31, 2005.



NET CASH FLOW FROM OPERATIONS


In the year ended December 31, 2005, net Cash-flow from operating and investing
activities by LAGARDERE excluding EADS surged from €463m in 2004 to €857m,
reflecting the following developments:



Cash flow from operations before interest, taxes, and changes in working capital
(excluding EADS) was up 4.1% at €663m.



Changes in working capital were virtually neutral at -€9m, compared with -€41m
in 2004. At Lagardere Media, the change in working capital was slightly positive
after the impact of incorporating Hodder Headline in Q4 2004. The contribution
of Other Activities improved significantly, after being heavily negative in
2004.



Acquisitions of property, plant & equipment and intangibles (net of disposals,
and excluding EADS) fell sharply from €192m in 2004 to €150m in 2005, due mainly
to the Press division's acquisition of its head office in 2004 (€63m).



In 2004, investments in financial assets (net of disposals, and excluding EADS)
were affected by the sale of Editis assets (€667m), counterbalanced by the
acquisition of Hodder Headline. The net figure was a positive €275m. In 2005,
the figure was negative €20m.



The decrease in short-term investments (€582m in 2005) was due to the sale of
T-Online shares.



DIVIDEND


The Managing Partners will ask the General Meeting of the Shareholders to
approve payment of a dividend of €1.10 per share, compared with the dividend of
€1 paid out of 2004 profits. The proposed payment reflects the sound financial
health of LAGARDERE SCA and its confidence about future performances.



Paris, March 8, 2006





The Lagardere Group is a market leader in the media sector (books, distribution/
retailing of cultural products, press and audiovisual). The Group also has
interests in the high technology sector via a 14.95% stake in EADS.



The Lagardere Group is listed on the Premier Marche of the Paris Bourse.


Press contacts:


Thierry FUNCK-BRENTANO                          tel. [phone]
                                                e-mail : [e-mail]

Arnaud MOLINIE                                  tel. [phone]
                                                e-mail : [e-mail]

Investor Relations contact:

Laurent CAROZZI                                 tel. [phone]

                                                e-mail : [e-mail]





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