Lagardere delivers a solid beat on H1 profitability Lagardere reported H1 21 revenues 5% ahead of consensus expectations, driven by a 6% beat on Travel Retail with a faster than expected recovery in the US and Asia. Publishing and Other also delivered ahead of consensus revenue forecasts. Both Publishing and Travel Retail also surprised on the upside in terms of profitability, especially with a decade-high EBIT of EUR110m in Publishing. The 12% flow-through (of the fall in revenues) in Travel Retail came ahead of our 18% forecasts. No detailed outlook for FY21 As at Q1, management did not provide a full-year outlook for group EBITA. It did, however, point out that Publishing H2 21 revenues would be comparable to H2 19 and that FY EBITA margins would be slightly ahead of 10%. In Travel Retail, it reaffirmed a 15-20% flow-through guidance with additional cost savings and the solid H1 performance offset by recovery costs. We still see upside on that guidance. We have raised our EBITA21 forecasts from an operating loss of EUR5m to a profit of EUR125m. We have also adjusted our share count to reflect the recent capital increase on the transformation from an SCA into a regular SA. Underperform maintained Lagardere operating trends are improving. July is seeing a recovery in European Travel Retail but management remains cautious on the impact the Delta variant could have and expects no sequential improvement in August vs. July. We do not believe that the strong bounce in book publishing reading habits is likely to be sustained when markets fully reopen. Lagardere fundamentals are improving in terms of corporate governance, balance sheet risk and operations. But we see more attractive investment opportunities elsewhere in Media and maintain our relative Underperform stance with a revised TP of EUR20.