INVESTOR DAYJune 1, 2006

Press

Page 2

Agenda

Organic growth

Market consolidation

Development in emerging markets

Opportunities in digital

HFM strategy 2006 - 2010: four pillars of growth

Conclusion

HFM presentation

Market outlook 2006 - 2010

Main initiatives 2003 - 2007

Page 3

HFM in the worldHFM is world leader in consumer magazines in terms of number of titlesand international presence (countries and languages)

• More than 260 titles published in 41 countries

• Well diversified portfolio with strong brands (Elle, Marie-Claire, Psychologies, Car & Driver, etc)

• 9,500 employees

• 2005 revenues: €1.9bn, with 55% generated outside France (65% for magazines)

• World leader in consumer magazines in terms of number of titles and international presence (countries and languages)

- No.1 in France and Spain- No.1 foreign player in USA, Spain, Italy, Japan, China- No.3 in Italy and Russia

• Controls its operations in 9 of 10 main markets (exception: Germany)

• Strong Internet development (e-mag, media websites, etc)

Main initiatives 2003 - 2007

Page 5

In a tough market (2001-2005)…Despite a tough magazine advertising market over the past 5 years …

Source: Adbarometer

Magazine advertising

market growthin €(%)

USAFrance, UK, Italy, Spain, Japan

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

11.4% -4.2%In Euro

1995-2000 2001-2005

CAGR

Page 6

… HFM maintained profitability…HFM magazine publishing margins increased slightly in 2001-2005

2001- 2005:

End of 2005

• HFM operating margin (Recurring EBIT / revenues): 8.7%• Target margin by end of 2007: 11.7% • Gap: 3%

Three steps to bridge the gap in a cost-cutting environment:

• Restructuring title, asset and country mix• Scaling back new launch costs to recurring level• Generating incremental EBIT growth from top-line growth

20012001 20022002 20032003 20042004 20052005

10.4% 10.6% 11.0%12.0%

11.5%

8.8% 8.9%9.5% 9.1% 8.9%

Excluding launch costs

Including launch costs

Page 7

Focus on our core business and core countries, selling or shutting down low-margin entities:

1. Focus on magazines (e.g. divestment of regional press)

2. Focus on major countries

Targeted acquisitions:

• Acquisitions in countries where HFM is subscale (USA, UK, Italy,Japan), achieving scale effects through increased market share

Restructuring title, asset and country mix

Roadmap to 2007 margin target (1/4)

Overall target: + 1% of operating margin

Page 8

Scaling back new launch costs to recurring levelSuccessful 2004 - 2005 - 2006 launches:

• France: Public, Choc (new concepts: generational magazines)

• Marie-Claire: Russia, Japan, China, Italy (following the acquisition of 42% of MC)

• Psychologies: Italy, Spain, UK, Russia, China (following the acquisition of 49% of Psycho)

Recurring level from magazines by 2007:• €15m-€20m, vs. €35m-€40m in 2004-2005

Δ ProfitabilityExcluding / Including

launch costs

Roadmap to 2007 margin target (2/4)

1.6% (1) 1.7% 1.5%

2.9%2.6%

20012001 20022002 20032003 20042004 20052005

Overall target: + 1% of operating margin(1) Operating margin as % of revenues

Page 9

Cost-cutting, plus incremental EBIT growth from top-line growth

Ongoing cost-cutting, after the €102m achieved in 2001-2005• Focus on most successful HFM brands• Headcount reduction (USA, UK, France, etc): up to 200 staff• Overhead reductions• Manufacturing and distribution cost savings

Top-line growth:• Organic growth: Market growth assumption 2006 - 2007:

Advertising growth: + 2% to + 4%Circulation growth (volume): -2% to 0%Overall: 0% to + 2%HFM growth: + 0.5% to + 1.5%

Overall target: + 1% of operating margin

Roadmap to 2007 margin target (3/4)

Page 10

To sum up: HFM’s successive steps to improve profitability

Cost-cuttingCost-cutting

• Rapid improvement in profitability

- Withdrawal from printing

- Cost-cutting plan

2001-20022001-2002

• Action necessary to resist price war

- Reinforcement of our brands (e.g. Marie-Claire, Psychologies)

- More new launches(e.g. Public, Choc)

2003-20052003-2005

Editorial development

Editorial development

Roadmap to 2007 margin target (4/4)

2006-20072006-2007

Heavy restructuring

Heavy restructuring

• Ongoing cost-cutting plan• Reduction of launch costs• Portfolio restructuring

- Transformation from diversified player to a pure-play magazine publisher (including withdrawal from regional press)

- Focus on most profitable segmentsPortfolio rationalizationAcquisitions to strengthen our market share, in order to reach critical mass in countries where we are subscale

• Internet developments

Market outlook 2006 - 2010

Page 12

2006 - 2010: Magazine circulationPointers for the future

Cautious approach called for

Key factors in magazine circulation trends:• Internet: three issues (Time, Price, Content)• Competitiveness (new products, price war)• New concepts driven by demographics

- Young people still want magazines, but expectationshave changed

- New editorial concepts must be generationally-oriented

- Launch impact on P&L

• Print distribution channels need to adapt

Page 13

2006 - 2010: Consumer magazine advertising market

Consumer magazine advertising market average growth: 3.7% p.a.USA by far the largest market, double-digit growth in emerging markets

Source: Bipe

• Developed countries: The market is growing (3.1% on average), except in JapanStrong growth rate in the USA

• Emerging markets: Double-digit growthBy 2010, both China and Russia will have overtaken Spain

Millions of currenteuros

France Italy Spain UK United States Japan China Russia

1.0%1.6% 3.1%

3.2%

4.7%

-0.2%17.7% 12.7%

Germany

1.7%

0

2,000

4,000

6,000

8,000

10,000

12,000

CAGR 2005/201020052010

9-country average:3.7% p.a.

€20,245m in 2005€24,257m in 2010

9-country average:3.7% p.a.

€20,245m in 2005€24,257m in 2010

Page 14

Strong growth potential for the Internet advertising market

Source: Bipe

• Search engines will account for more than 75% of the Internet advertising market• Magazines expected to have market share in the 10%-15% range; HFM will be

looking for market share of 0.5% in 2010 and 1% in 2015• By 2010, China is expected to overtake Spain and Italy in Internet ad volume

2006 - 2010:Internet advertising market

Millions of current euros

France Italy Spain UK United States Japan China Russia

28.5%31.3% 19.0%

9.3%

13.1%

11.9%

40.2%30.0%

Germany

20.1%

0

2,000

4,000

6,000

8,000

10,000

12,000

CAGR 2005/201020052010

9-country average:14.3% p.a.€9,754m in 2005€19,015m in 2010

9-country average:14.3% p.a.€9,754m in 2005€19,015m in 2010

Page 15

2006 - 2010 growth assumptions (magazines and media websites)To sum up: Print expected to be a tough market, but HFM well placed to capture higher growth

* EBIT/revenues

(1) Digital magazines and media websites

Basis(2005)

Market growth range Comments

Organic growth 1 560 M€ 0 % to 2 %Circulation : - 2 %/ 0 %Advertising : 2 %/ 4 %

( including e-mag )

Emerging countries 137 M€ 10 % to 15 %

ChinaRussiaIndia

Digital 12 M€ 14 % Websites : broadband development

HFM strategy 2006 - 2010

Page 17

Competitive environment: main categories of competitor

HFM has developed an original strategy, both global and localInternational multi-languageNational

Mono-language

Globalbrand

Local brandportfolio

Global strategy:Global and local

brands

Strength

Weakness • Insufficient profitability due to lack of focus

• Profitability depends on local portfolios

• Exposure to country risk

• Problem of ad visibility

• Little potential for growth

• Concentration• Language-based

synergies• Profitability

• Need to create and develop brands

• Low average profitability

• No risk of admarginalization

• Low exposure to country risk

• Lack of international presence

• Risk of admarginalization

• Exposure to country risk

• Expansion and network• Good ad efficiency• Continuous growth of

the portfolio• Strong presence in

emerging markets

Page 18

HFM International Business Model

Establisha platformEstablisha platform

Consolidatewithin national

market

Consolidatewithin national

marketAchieve organic

growthAchieve organic

growth

(1) (2) (3)

• Build a “spider-web” strategy, including ELLE launch in target country

• Acquisitions of platforms in various countries

• Still subscale in some countries (due to midsize acquisitions policy)

• Consolidate by acquisitions, bolted onto existing platform

• Reach critical mass so as to increase efficiency vis-à-visadvertisers

• Strengthen HFM’s bargaining power to counter concentration of the entire value chain: media agencies, paper manufacturers, etc

• Increase profitability (cost synergies, scale effects, market share value)

• Increased size offers greater potential for launching new titles

• International presence allows rollout of powerful titles across many countries

• Revenue synergies via cross-pollination of successful brands and formats

Source: HFM

Local and international platforms for long-term profitable growth

Page 19

HFM historical phases (1981- 2006)A series of growth and consolidation cycles

HFM Magazine Revenues - Basis 100 (Constant $ rate – excluding inflation)

100

120

140

160

180

200

220

240

260

280

300

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Growth /International expansion

Growth ConsolidationConsolidationPMF Reorganization

Magazine advertising

market growth

in €(in %)

USAFrance, UK, Italy, Spain, Japan

-20%-15%-10%-5%0%5%

10%15%20%25%30%

99 00 01 02 03 04 05

In €01 - 05

CAGR - 4.2%

Page 20

2006 - 2010: HFM strategyFour pillars of growth

To sum up/ HFM strategy will be built on four pillars, designed to provide higher growth and profitability

Organicgrowth

Organicgrowth ConsolidationConsolidation Digital

developmentsDigital

developments

(3)(1) (4)

• Launch new concepts / brands with strong editorial content (high cover price)

• Focus on high profitability titles

• Use HFM and IGA networks to roll out strongest concepts internationally

• Reach critical mass in major countries where HFM is still subscale:

- United States- UK- Italy- Japan

• Increase profitability (market share value)

• Take advantage of broadband

• Develop digital magazines

• Reach leadership positions in Media sites (main segments and countries)

• Gain significant Internet ad market share

• High growth and profitability

Emergingmarkets

Emergingmarkets

(2)

• Take advantage of fast-growing markets

- China- Russia- India

• Take advantage of high growth and profitability

Page 21

HFM strategy (1) :Organic growth

Note : excluding licencesSources: HFM

Organic growth (new concepts international and local) will balance natural attrition of one part of portfolio

0

1

2

3

4

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

1 2

53

43

2 2 24

3 34

24 4 4

3

12

89

3

11 3

2

12 2

65

65

2

512

4

0

5

10

15

20

25

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

New title launches

International development (presence in new countries)

• Growing importance of local brands• Find new concepts to be tested locally and

then to be internationalized

• Development of an international network from 1985 to 1995

• Organic growth (new concepts international and local) balancing natural attrition of one part of portfolio

• Conservative assumptions on organic growth for HFM (0.5% to 1.5%)

International brands

Local brands

Page 22

Magazine market still very fragmented

Market size: advertising + diffusion (subscription and single copy) revenues Source: PriceWaterhouse Coopers, China Statistics Yearbook, ZenithOptimedia, HFM, DDM, PPA Marketing, Annual reports, analyses and estimates HFM

France GermanyUnited Kingdom

SpainItaly

United States Japan China

7 55 2324Market size (retail) ($bn)

5 3

Other 68%

Other54%

Other48%

Other 70%Market share by

competitor in the main countries

(in %)

20%

0%

40%

60%

80%

100%

3%

67%

Russia

1

Other 67%

Other39%

Other65%

Other86%

Top 333%

Top 339%

Top 352% Top 3

46%

Top 361%

Top 335%

Top 330%

33%

14%

26%

HFM

Top313%

9%

3%

4%

3%

3%

19%

9%

HFM strategy (2) :Market consolidation

Page 23

There is a strong value to national market share

Source: HFM analysis

25%-35%

7%-12%

7% - 10%7% - 10%

Central costs(corporate, HR, Finance, IT, publishers, etc)

Editorial costs (journalists, photos, etc)

Manufacturing costs (paper, printing)

National

NationalInternational

(for international concepts)

International(for international concepts)

Scale effect(unit cost gain for each

doubling of size)Typical cost structure (%)

Value to size

Selling costs (advertising, promotion, etc)

International (paper)National (printing)

25%-40%

25%-35%

20% - 25%

5% - 7%

10% - 15%

2% - 5%

Relationship between national market share and profitability (1/3)

Page 24

HFM will expand in its major markets to improve growth and profitability

USAUSA UKUK ItalyItaly

Synergies: examples by country

2006 revenue x 2

HFM US profitability rate:

5 to 7 points

2006 revenue x 2

HFM Italy profitability rate:

6 to 8 points

2006 revenue x 3

HFM UK profitability rate:

8 to 10 points

Relationship between national market share and profitability (2/3)

Source: HFM analysis

Page 25

Relationship between national market share and profitability (3/3)

There is a strong value to national market share; HFM’s profitability is linked to its weighted average market share

(1) Special interest magazines (2) 2005 figures for HFM (3) Excluding Regional (4) Excluding PQR supplementsSource: published data

Operating income/

revenues(%)

Weighted average market share(%)

Specialists (1)

Meredith

Condé NastEurope

RCSMagazines

SpringerPlayboy

Primedia

Emap

Bertelsmann (G+J)

Time Inc

HFM (3)

(Global)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0% 5% 10% 15% 20% 35%

-4%

-2% DennisPublishing

Edipresse

Mondadori

- 2004 -

HFM(France) (4)

HFM(Spain)

HFM(UK)

HFM(USA)

HFM(Italy)

• HFM’s profitability is linked to its weighted average market share

• HFM’s profitability in France and Spain is high, thanks to strong positions

• HFM is still sub-scale in UK, Italy and the USA

Page 26

Russia and Eastern Europe, China, India: strong growth and profitability potential

* NB: Indian advertising market growth = 2005-2008India will experience strong demographic growth (2005-2010): +1.2% per year

Sources: BIPE, MINEFI-DGTPE, ZenithOptimedia

Russia China India

GDP 2005 - 2010 (in volume)per year

+ 12.2% + 7.4% + 8.6%

Advertising market growth2005 - 2010

per year+ 13.1% + 13.6% + 13.5%*

Consumer mag ad market growth

2005 - 2010per year

+ 12.7% + 17.7% nd*

HFM strategy (3): Emerging markets (1/2)0

Page 27

HFM can build on past investment to grow in Eastern Europe and coastal China*

HFM strategy: Emerging markets (2/2)

* And India, depending on market deregulation

• Strong growth in China and Russia based on launches of international magazines:

- China: Marie-Claire (2002), Elle Deco (2004), 25 ans (2004), Psychologies (2006), Photo (2006), Quo (2006)

- Russia: Maxim Russia (2002), Elle Girl (2003),Maxim Ukraine (2003), Psychologies (2005)

• Acquisition and extension of IMG Network in Russia (46 towns)

HFM Revenues(China + Russia)

2001 2005

x4.2

2010

x1.7

Main initiatives (2002 - 2005)

• Mix of organic growth and acquisitions in Russia and China, plus market concentration

• Reinforcement of IMG network in Russia

2006 - 2010Developments

Russia

China

Page 28

HFM strategy (4): a global digital strategy

HFM will also use its brands to achieve strong growth over the next few years in digital magazine and media websites. Example: Elle

Global print brand

Multimedia brand

Magazine content

Media Websites

Print Digital Magazine(digital kiosk)

Substitution

Development

Specific content (different from magazine)

Consistent with brand positioning

Traffic oriented (importance of advertising revenue)

Development of new sources of revenues

Mobile and

other

Licensing

Page 29

HFM strategy:a multiplatform strategy

HFM is developing a multiplatform strategy (example: Elle )

MAGAZINESPRINT E-MAG

FREQUENCYSet:

weekly,monthly, etc

Set / Flexible (Special issues,

teasers, etc)

VISUAL & AUDIO

UNIVERSE

Text PhotosLayout

Text PhotosLayout

+ Rich media

BUSINESS MODEL

- Circulation/Ad- Fixed & Variable costs

- Fully-protectedad space

- Circulation/Ad- Low-cost- Fully-protected ad space

Page 30

HFM strategy:digital magazines

HFM will expand in digital magazines (already 15,000 subscribers in US)

PaperMagazine

PaperMagazine

Publishing(content and marketing)

Advertising page sales

Distribution

Retail (news-stand cost)

DigitalMagazineDigital

Magazine

Manufacturing

100% 40%Total

Percentage of value chain controlled by publisher

50% 90%-100%

Digitalization• Long term increase in sales volumes (print

and digital):- Winning new readers (attractive product

for young people, strength abroad, etc)- Winning new markets (emerging markets

with under-developed distribution: China, India, etc.)

- New flexibility in pricing policy

• New sources of advertising revenues:- Rich media (“e-mag” audience value)- Sponsored links and better efficiency

tracking

• Strong increase in profitability:- Eliminating costs that severely limit

magazine profitability at present (print, distribution, etc)Potential 60% cost reduction and15%-30% margin growth, dependingon the title’s revenue structure

Page 31

E-MAG

HFM strategy:a multiplatform strategy

HFM is developing a multiplatform strategy (example: Elle)

FREQUENCYSet:

weekly,monthly, etc

Set / Flexible (Special issues,

teasers, etc)Constantly updated

VISUAL & AUDIO

UNIVERSE

Text PhotosLayout

Text PhotosLayout

+ Rich media

Constantly updated

Text Photos Videos Sound

Interactive content

Text Photos, Videos

Logos Ringtones

SoundInteractive content

BUSINESS MODEL

- Circulation / Ad- Fixed & Variable

costs- Fully-protected ad

space

- Circulation / Ad- Low costs- Fully-protected ad space

- Advertising driven- Fixed costs

- Pay-per-act andsubscriptions

- Fixed costs

MEDIA WEBSITES OTHERSMAGAZINES

PRINT

Page 32

HFM has a strong and growing Internet presence in 2006

HFM strategy:media websites

• 125 HFM magazine websites in 2006, in 27 countries

• Strong brands, well positioned in growing Internet segments: auto (Car and Driver), women (Elle, Woman’s Day, Psychologies), celebrities (Public)

• Substantial, rapidly-growing traffic:- 11.6m unique visitors per month (March 2006)

- 175m page views per month (March 2006)

- November 2005 – March 2006: page views on HFM websites up 24%

• Fast-growing revenues- 2005 website revenues: €12m- 2006 estimated website revenues: €20m (up 67%)

Page 33

Our strategy: focus on five key markets and segments …

AutomotiveUS

AutomotiveUS

WomenUS

WomenUS

WomenFrance

WomenFrance

Celebrities/Entertainment

France

Celebrities/Entertainment

FranceWomen

AsiaWomen

Asia

• Pragmatic strategy: Focus on 5 main segments with strong Internet growthpotentialEach segment may include several brands (magazine or other)

• Our strengths: Brands, content and community Know-how, and the resources to fund investment

• Worldwide strategy for the women’s segment based on the Elle network and our other key brands (Elle, Marie-Claire, Psychologies, already sold as a package to advertisers in a “Women’s Media Pack’)

HFM strategy:media websites

Page 34

Example: www.public.fr …

HFM strategy:media websites

Celebrities/EntertainmentFrance

Celebrities/EntertainmentFrance

Launch date: Nov 2004 • 2005: 3.7m page views per month

150,000 unique visitors per month

• 2006 target: 7.5m page views300,000 unique visitors

Website’s strengths:• “Youth” and “celebrities” segments

• Public TV: 3 hrs per week, in partnership with Yahoo!

• Content reactivity (gossips, forum, blogs, games, etc)

• “Public waps” available on NRJ mobile and I-mode

Page 35

Example: the ELLE network

HFM strategy:media websites

26 ELLE websites already set up around the world:

• 14 in Europe, 7 in Asia, 4 in North America, 1 in Africa

• US and Japan monthly page views: + 15m per website

• Brand extension: Elle Girl (6 websites), Elle Déco (6 websites)

Page 36

HFM strategy:media websites

Media websites in HFM’s main segments will deliver profitable growth

Total HFM 2006 2010

Page views/month 165 M x 3 to x 5

x 2 to x 4

x 4 to x 6

% EBIT/Revenue ns 15 to 30 %

Unique visitors/month 11 M

Revenue 20 M€

Conclusion

Page 38

ConclusionHFM strategy

GLOBALIZATION DIGITALIZATION CONSOLIDATION

Increase our presence in target markets

Two priorities:

Leading and emerging markets

Critical mass

Digitalize the value chain

Production AdvertisingDistribution

Make significant acquisitions

To combine growthand profitability

To be proactive in a changing market

Over the next 5 years, HFM’s unique network will enable us to:• Continue launching strong concepts and brands, and roll them out

internationally • Continue building a strong presence in emerging markets (especially

Russia and China) • Build a strong position in digital• Be one of the top players in local industry consolidation