Lagardère was forced to significantly revise down its forecast for operating profit for 2011 because of the difficulties encountered by the sports center in the first half.
An adjustment of annual objectives of the media group was expected, with Lagardère early March release a forecast that does not take into account the ongoing sale of its assets in international press whose impact is estimated at 35 million euros for exercise.
The surprise comes from Lagardère Unlimited, the results were significantly lower than expected by the group for the first half, forcing it to revise down further his ambitions for the year to expect a decline in the 5 to 7% of its recurring EBIT before associates (operating profit) media.
Without even considering the sale of its international magazines, the group could achieve a growth "somewhat positive" in operating profit in 2011 due to the underperformance of its sports division as it was previously an increase of about 10%.
"I remain very confident in the fact that sport is an engine of growth for the group in the years to come," said managing partner Arnaud Lagardère, in a conference call."What we have seen, this is not a problem but a problem of strategy execution."
It has set itself the ambition to make the pole a world leader in sport by 2015, investing over one billion euros since its inception, but the smallest of the divisions of the group has never been profitable.
After a blip in 2010, Unlimited had back hair of the beast in the sporting calendar for a more favorable but the division was weighed down by the first half of the items, including a dispute over cricket in India as well as implementation problems that resulted in an overhaul of its management.
IPO CANAL + FRANCE STILL SUSPENDED
The chief financial officer Dominic D'Hinnin said the shortfall was $ 40 million for the first six months, adding that some of the difficulties likely to continue in the second half.
"Sports has really collapsed, and it's not over," said Conor O'Shea, an analyst at Kepler Securities."The only positive is that this activity was considered low enough and at least the other divisions have posted results in line with expectations".
In the first six months of the year, the Media recurring EBIT before associates spring down 6.9% at constant exchange rates to 168 million euros to a total turnover of 3.72 billion euros.
The market was expecting an average of 178 Media recurring EBIT before associates million for a turnover of 3.673 billion euros, according to estimates by six analysts.
The group's performance was supported by the Services division, which owns the chain of newsagents and bookstores Relay, thanks to the sustained level of air traffic.
The publishing division, however, continued to suffer from dwindling sales of "Twilight" vampire saga by Stephenie Meyer successful, but should return to growth in the second half, said Dominic D'Hinnin.
Lagardère Active, which includes including Paris Match and Europe 1, has its share decreased by 3.1% on a comparable turnover excluding international magazines including the assignment to the U.S. was cordoned off for Hearst most end of May.
Asked about the proposed IPO of 20% held by the group in Canal + France, Arnaud Lagardere has confirmed that the current market conditions did not allow for time to consider a resumption of the process, suspended after the Japanese earthquake last March.
Asked if Lagardère could return to the table in discussions with Vivendi holding the remaining 80%, Dominique D'Hinnin said, "we want to sell and that's it."
Before the publication of results, Lagardère has closed up 2.26% to 23.80 euros. Since the beginning of the year, as a sign down nearly 23% while the index of pan-European media has given 14.34%.