Today online revenues are still marginal

Improvements in the efficiency is the priority of Hachette Filipacchi Media (HFM), the armed arm of Lagardère in the press. The first editor of magazines in France and in the world, with 260 titles and a turnover of EUR 1.9 billion, of which 55, from France has set objective to identify a common operational margin of 11.7 in 2007, against 8.7 in 2005. To save these 3 points, it was planned to unbind from 200 to 250 million euros of revenues, too little profitable.

The deconsolidation of the regional daily press, with a return of 6 to 8, lower than that of magazines, is the first step in this process. "Provence" and "Nice morning" will be accommodated in a subsidiary created with the world, which will bring the newspapers of the Midi. The world will hold 51 of the capital of the new entity, against 49 percent for HFM, which will transfer to this company the 100 million euros of debt today worn by its subsidiary Quillet, which manages the PQR. Another consequence: the initiative to create a free daily newspaper in Paris to complete the VillePlus network is more for HFM, but in the world.

On the merits, this evolution must mainly enable HFM mobilize its means on magazines. And this at a time when the market has become more difficult, both from the point of view of the broadcasts of the principle. In a stronger competitive environment, the editor seeks to improve the profitability of the portfolio. Beyond traditional cost reductions, more deficit titles were arrested in their paper versions: "It Girl" in the United States, "zurban" and "Maximum" in France. These last two titles should continue to exist on the Internet in a less expensive economy. Finally, "Top family", mate with the world group, should be assigned.

Erosion of sales

Such as competition, HFM was hit head-on by the arrival of the Prisma press TV quinzomadaires. The France paid "TV 7 days" dissemination was reduced from 2.19 million copies in 2003 to 1.69 million in 2005, according to the OJD, and it could decrease by 2-3 this year. Several other titles suffered an erosion of sales, such as "Isa", "first". "The Sunday newspaper" has seen its circulation decline by 2.7 last year, is lost. To reverse the trend, these titles have been the subject of reminders. Also abroad, the market is difficult. The automotive press in the United States, for example, suffers. But "the portfolio should no longer be subject to significant trade-offs", says the CEO of HFM, Gérald de Roquemaurel.

On the other hand, investments must energize portfolio, even if, as a first step, they weigh on accounts. In 2005, launches and cost 2.6 points of profitability. But "Public" and "Shock", launched in France in 2003 and 2004, "together" show a balance of operations "positive", said the group.

The internationalization of trademarks such as "Psychologies Magazine" or "Marie-Claire" is part of priorities to improve the report forcibly to advertisers. Finally, HFM wants to grow in countries where it is not the sufficient size the United States for example and invest in markets with strong growth potential (China, India, etc.).

Attract readers on the Net

For the future, the great challenge for HFM will however be to accompany the migration of readers of the press to the Internet for paste to new practices and take advantage of the flight of advertising investments on the Web. And as "mobile TV will strongly compete with the news magazine", believe Kepler analysts. Today, online revenues are still marginal. For his catch, HFM promises to invest as much in the paper in the digital in five years. "This could lead to spend 1 of the turnover on the paper press and 1 on the Net," said Gérald de Roquemaurel, who wishes to focus strategy on countries best equipped with broadband: the France, the United States, the Japan and the Korea. In the meantime, he will have to manage the

transition.