FRANCE. Lagardère Group today suspended market guidance provided in late February about its 2020 performance, amid the deep impact of the COVID-19 crisis, notably on its travel retail arm. It said the full effects could not yet be assessed “precisely and reliably”.
As reported, at the time of publication of 2019 results on 27 February, the impact was mainly being felt at Lagardère Travel Retail, and specifically in Asia Pacific and international airports.
The group issued a 2020 recurring EBIT growth target of between +4% and +6% at constant exchange rates, excluding the acquisition of IDF Belgium and the effect of the Covid-19 epidemic, estimating the adverse impact on recurring EBIT in the first quarter of 2020 (before the impact of action plans) to be around €20 million.
The company said: “The effects of the epidemic have since extended to Lagardère Travel Retail’s other operations and, to a lesser extent, to the rest of the group’s activities, given both the rapid spread of the virus and the government lockdowns and closures that have been ordered in many of the countries in which the group has operations.
“The group is working tirelessly to protect employees, customers and partners, and is also continuing to implement significant measures to mitigate the financial impacts in the following four areas: adapting sales and prices where possible, reducing overheads, reviewing investments, and reducing working capital.”
Given the uncertainty, and amid widespread government-imposed lockdowns and closures, it said, the full impact was currently unclear, so the guidance provided in February has been suspended.
The Managing Partners have also reduced the shareholder dividend from €1.30 to €1 per share, and withdrawn a stock dividend option.
Lagardère Group insisted it remained engaged in its strategy of focusing on the twin pillars of Lagardère Publishing and Lagardère Travel Retail, which had “produced positive results in 2019 with sharp increases in revenue, recurring EBIT and free cash flow”.
It added: “In overcoming this crisis, the group will draw on its historical strengths of boldness, independence and creativity to adapt to a world that is constantly changing, sometimes brutally.”
