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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, thank you for joining us today to Lagardere SA Q3 2022 Revenue Conference Call. I am Emmanuel Rapin, Head of Investor Relations. I will be guiding you through this presentation.
This morning, we have with us Arnaud Lagardere, Chairman and Chief Executive Officer of Lagardere SA; Sophie Stabile, Group CFO; Fabrice Bakhouche, Deputy Chief Executive Officer of Hachette Livre; Dag Rasmussen, Chairman and CEO of Lagardère Travel Retail.
This morning, we will be presenting the Q3 2022 revenue on this conference call, and it will end up with a Q&A session. [Operator Instructions] Please note that I will be reading the questions from financial analysts to be answered.
Now I leave the floor to Arnaud Lagardere.
Thank you very much, and good morning to all of you. You've seen the press release. It speaks for itself. We are very happy to demonstrate that LTR, Lagardère Travel Retail, is back due to the market certainly, but also to the efforts that have been done for the past years, cutting costs, being very cautious. You don't see it in the sales, but you will see it at the end of the year, I hope. So a very, very high growth coming from Lagardère Travel Retail.
Publishing, also very resilient in a market that is quite difficult. Not as fast growing as it was in 2021 and 2022, for example. But still, we are doing a lot of efforts that, again, you don't see in the sales, but that you will see by the end of the year on the costs that are growing very, very fast, as you know, paper cost and so on. But as it is said in the press release, we are fighting hard to keep or to be around 11% of margin.
So we will obviously answer to all your questions later on, and I will leave the floor right away to Sophie, please, to give us the details of Q3. Sophie, go ahead.
Thank you, Arnaud. Good morning, everyone, and thank you for joining us for Lagardere's Q3 revenue presentation. I will take you through the highlights of the company's performance for the third quarter of 2022.
Lagardere Group followed a strong growth trajectory. Over the first 9 months, revenue is up 34.1% like-for-like, and for the third quarter, revenue grew by 27.7%.
First, revenue of Lagardère Publishing up plus 3.6% like-for-like, lifted by the success of new titles and international footprint. Second, Lagardère Travel Retail continued strong recovery, up plus 53.8% like-for-like on the back of very good summer activity. And last, a slight business decrease by 1.3% like-for-like in our Other Activities.
Let's see how we performed. Group revenue grew to EUR 1.9 billion, which represents a plus EUR 518 million increase versus last year and a 35.5% reported growth. Growth is driven by the exceptional increase in the Travel Retail business, the red block on the slide, and the continued high level of Lagardère Publishing activity.
The difference between like-for-like and reported growth is due to the positive EUR 81 million currency effect, mainly, of course, the impact of the rising dollar and the positive EUR 33 million scope effect following M&A acquisitions by Lagardère Publishing, and Dubai Creative Stable Holdings acquisitions by Lagardère Travel Retail in 2022.
Now let's focus on our divisions' performances. Lagardère Publishing is up plus 3.6% versus last year on a like-for-like basis, benefiting from its international diversified network. On a reported basis, the growth was up plus 12%, benefiting from a positive EUR 31 million scope effect due to the acquisition of the U.S. publisher Workman Publishing last year and the acquisition of Paperblanks, the world #2 in premium notebooks, in January this year.
Digging into geography, growth was particularly strong in the U.S., up plus 4.7%, and in the U.K., up plus 8.6%, while the U.K. publishing market is only slightly growing. Spain and Mexico achieved an excellent plus 10.5% performance, with Spain benefiting from the effect of the school reform. In France, after an outstanding performance last year, the activity was still up plus 1% despite the slower market conditions, minus 1% over the third quarter according to [SECO]. Overall, the division recorded a strong momentum in the adult trade segment across our different geographies.
Moving on to the performance by segment. On the first 9 months, sales remained high and up plus 0.8% versus 2021. The business was driven by hungering demand for Young Adults, lifted by the popularity of some titles in social networks like TikTok, such as Ali Hazelwood's The Love Hypothesis, and positive impact from the Netflix effect.
Bestsellers had rising revenue in key geographies, lifted by leading authors. Guillaume Musso and Virginie Despentes in France, Delia Owens in the U.K and Colleen Hoover in the U.S. and the U.K. However, the education sector in France performed more modestly than last year due to a decrease in public funding for primary and secondary textbooks because of budgetary arbitration by local authorities.
I will now move on to Lagardère Travel Retail performance by geography. In Q3 2022, Lagardère Travel Retail revenue kept improving on the back of air traffic recovery at EUR 1.1 billion [indiscernible], very close to that of 2019 reported figures. This represents an outstanding plus 53.8% like-for-like growth versus last year and up 61.3% in reported figures. This performance was mainly driven by a very dynamic intra-European, African and Middle Eastern market on the back of the summer performance. France revenue increased by plus 63% versus Q3 2021, benefiting from the domestic intra-European and transatlantic flights during the summer. EMEA, excluding France, also increased by plus 54% with a strong performance in Italy, Belgium and the U.K. Traffic growth is also strong in North America, with the U.S. reaching the 2019 level of sales and a strong rebound in Canada. Nevertheless, we continue to observe a slower growth in North Asia, where the zero-COVID policy prevent the restart of domestic and international traffic of Chinese passengers. Moving on to the performance by segment. Globally speaking, this quarter confirmed the dynamic recovery initiated at the beginning of 2022. Revenue down just 3.1% behind the level of Q3 2019 on a like-for-like basis. This shows the acceleration of Lagardère Travel Retail recovery, thanks to its well exposed international footprint and operational excellence. Our global presence, especially in the U.S. and in Europe, enabled us to further widen the gap in the IATA global traffic figures, which remain affected by China.
Benefiting from the massive return of intra-European travels and transatlantic flights, especially from the U.S. to Europe, Duty Free and Foodservice segments experienced strong growth. Moving on to Other Activities on Slide 9.
For the third quarter, Other Activities revenue slightly declined by 1.3% on a comparable basis. The entertainment business is dynamic with an improved performance versus Q3 2021. However, Lagardère News sales were down 6.6% due to a slower advertising market, which negatively impacted our Radio, Press and Elle licensing activities performance.
Let's check at our outlook. Given Lagardère Travel Retail's performance, the group is slightly improving its overall outlook for 2022. Lagardère Publishing, as you remember, revenue are set to be stable versus 2022, yet profitability will probably be affected by less favorable market condition in the context of cost inflation. Therefore, we expect 2022 operating margin to be close to 11% when we had anticipated it would be slightly above 11%. This doesn't affect our global guidance, which is slightly improved when combined with Lagardère Travel Retail's great performance. Because we keep addressing operational capacity to the pace of recovery and striving towards operational excellence, in this context, our outlook target is improved with the flow-through range between 5% to 10% versus a 10% to 15% range previously.
Regarding Corporate, we maintained our efforts on cost reduction and expect to save another EUR 10 million, thus reaching EUR 35 million in 2022 after our plan.
To conclude, I would like to stress that in the environmental key significant uncertainties, we focus of efforts to secure the profitability of our various businesses. I would like to thank you for your attention. We are now available to answer your questions.
Yes. We are opening the Q&A session, and we have 4 questions from Christophe Cherblanc, from Societe Generale. I will read the 4 questions. The first one is, Travel Retail, do you have visibility on how much of the EUR 100 million of the LEAP action plan we could effectively retain given the inflation? Second question, is it fair to expect that for full year 2023 for Travel Retail, we'll see a pre-COVID EBITDA level? Third question, again on Travel Retail. Working capital, how does Travel Retail revenue recovery impact the working capital normalization? And the last one is about the big decision, if the Simon & Schuster acquisition by Penguin is blocked by the DOJ, would you be interested?
Dag, you can start.
Yes, I'll start. So regarding the LEAP project, EUR 100 million is the objective at 2019 volumes. And we maintain this objective of EUR 100 million. It's true that inflation might eat part of it, but -- and increasing rents as well. But I mean, it's really something which contributes to an improvement in results. So it's really fair to expect that '23 will see more than a return to pre-COVID EBITDA levels. Working cap, we've worked a lot on inventory and all components of working cap. Inventories are down, really well managed. So we are in a favorable working cap position, which means that when inflation increased, if it's at [indiscernible] compared to the present mix, it's cash generation. So regarding Lagardère Travel Retail, we definitely plan to have a favorable working cap and inflow and work [indiscernible]. As I shared this is a work in progress and subject to the usual disclaimers like inflation, geopolitical environment and so on. But I will say that our central scenario is very positive.
Okay. Thank you, Dag. As far as Simon & Schuster is concerned, that is a big if. But if happens, meaning that it's coming back for sale, which would mean that, one, the DOJ blocked the sale to Random House, and two, Paramount is wishing to sell it again. So actually, there are 2 ifs, we would be interested, obviously.
If it happens before Brussels gives the green light to the sale of Editis and open a new era for Lagardere, meaning that Vivendi is definitely -- has definitely a controlling interest, if it happens before, we wouldn't be able to do it as a team with Vivendi. But we have the ability to do it by ourselves. So the answer is definitely, again, yes.
If it happens after Vivendi gets the green light by Brussels, we would also do it. I mean, as a team with Arnaud de Puyfontaine and his team, which would give us maybe a little plus. But we know that Vivendi is behind us anyway even if they cannot help us. They are behind us anyway. And we take the assumption that Brussels will give a green light, whether it's right away or in a little more time. So assuming that Brussels will give at the end a go, we will have the facility to get Vivendi behind us after the deal is made.
So I mean, definitely, we are interested as we were before. We were not able to give a price because it was in the middle of the COVID and it was a difficult time for us. But now as you can see on the press release, the company has recovered mostly and will continue to grow. So it's a great time for us, finally. And then hopefully, it's a great time for us to be able to cut a deal. There will be competition. We know that, but we are ready to face that competition. So we are still optimistic.
But again, there are 2 ifs, so let's not be too optimistic. We'll see what happens in the coming months, maybe coming weeks, we don't know exactly. But it will happen, I think, very quickly, probably by the end of the year. Yes or no, we'll see what happens. Next question?
Thank you. In fact, we are waiting for a few seconds to see if there are any more questions. But right now, we have answered the four at present.
Okay. Sure. Let's wait a little bit.
I think we are good. Arnaud, maybe if you want to close the presentation.
No, there's not much to say. Again, as I said in the introduction, the press release speaks for itself, but we have still a lot to do on the cost. And there are a lot of opportunities, not only on the publishing side but also on the travel retail side because the market is consolidating in this area as you saw with the -- what happened a couple of months ago with Dufry and Autogrill. So we expect more movements, and we will also, as we do it for publishing, be part of them so that both divisions can have the ability to grow.
And again, that's -- it's a blessing that we have Vivendi with us and more and more with us. I'm really expecting the answer from Brussels with hope and as fast as possible. It would clarify a lot of things for us. And again, it's a very, very positive thing that happens to our company. So I would like to thank, to conclude, all the teams in Travel Retail, especially for the incredible job they've done, and also in publishing because I know it's -- I wouldn't say it's a hard time because you've seen, I mean, the growth is very little, but it's still there, but the market is very difficult. And they know it and they are fighting back, especially on the cost.
But I hope that at the end of the year, we will be able to present a very nice result and a very nice margin also on that side. Thank you very much to all of you, and talk to you very soon. Bye-bye.