The 2009-13 "Aims and Means Contract" with the French State (extracts)

Preamble

Agence France-Presse's statutes place it under specific obligations to maintain both its editorial independence and its worldwide reach. Those principles guide its missions of gathering and distributing news.

To reinforce its status as an agency with a worldwide vocation, AFP has to push ahead with adapting itself to the growth of the Internet as a mass medium and to the information revolution represented by multimedia.

AFP therefore needs a high-performance technical production system to provide the multimedia products that its users expect. Furthermore, the agency's ability to adapt to the changes under way depends on the evolution of its business model, which alone can guarantee the regular financial resources it needs to develop. The modernisation of AFP's statutes, envisaged for that reason, must absolutely guarantee the independence of its editorial team, which underpins the agency's credibility.

The state has decided to support the agency through these changes by providing it with the financial resources needed for its development.

The present Aims and Means Contract (COM) lays out the agency's commitments and the arrangements for state support for the 2009-2013 period.

Introduction (main extracts)

The revolutions under way in the media sector (the explosion in use of the Internet, the difficulties being experienced by traditional clients, major financial concentrations) are resulting in a changed landscape as regards the constraints under which AFP has operated to date; the agency's financial balance has in the meantime been partially re-established.

The aims and means contract for 2003-2007, the first such agreement in the history of the financial relationship between the French state and AFP, was implemented against a backdrop of quasi-insolvency. The agency had been seriously destabilised both by the impact on its accounts of the 35-hour week agreement and by the implementation of a policy of creating new "development" posts. That involved the creation of around 200 posts between 1999 and 2001. The bursting of the Internet bubble and the disappearance of numerous clients caused an erosion of sales income just as costs were increasing. That obliged AFP to put its main physical asset, the headquarters building on place de la Bourse in Paris, on sale via a lease-back agreement to cover losses of no less than €20 million in 2002 and €14 million in 2003.

Although the results are not completely in line with the initial projections of the previous aims and means contract, efforts to keep costs (and notably the wages bill) under control and to develop sales, along with the increase in the sums paid for subscriptions by the state, have resulted in a turn-around of AFP's net earnings, which have gone from losses of €6 million in 2004 and €3 million in 2005 to profits of $3 million in 2006, €6 million in 2007 and between €3 and €4 million in 2008.

AFP's financial situation has thus improved noticeably.

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In this context, the COM for 2009-2013 should have different ambitions from the preceding one.

The deep changes under way in AFP's sector of activities are resulting in an increase in the level of capital intensity, the entrance of new players onto the market for news and the growth of the Internet as a mass medium. This obliges the agency to make a major strategic realignment if it is to strengthen its status as a news agency with a worldwide vocation.

For those reasons the present contract should notably facilitate:

• A return to conditions of profitability allowing the agency to carry out its missions and to acquire the means to ensure both its development and its ongoing adjustment to changes in the news industry, notably via strong growth in its sales income and by keeping costs in check;
• An acceleration of AFP's modernisation, in particular by adapting its production systems to the new expectations of its customers and to the new digital environment, as well as by making productivity gains;
• A reform of the agency's statutes which will retain the guarantee of its independence while giving it real means to finance its development.

In exchange, the state commits itself to providing financial backing for the changes and adjustments resulting from the agency's commitments. In particular to:

• Guarantee the level of subscriptions taken out by the state over a five-year period (2009 to 2013);
• Provide financial help for AFP's modernisation project.

Furthermore, a monitoring meeting bringing together all the parties involved will be held at the end of each year. It will in particular result in:

• A presentation of the agency's economic performance indicators and financial projections;
• In the event of strong inflation, a re-examination of the rate at which the state's subscriptions are indexed.
• Integration into the aims and means contract of the planned arrangements for the modernisation of the agency's statutes. This to be carried out via a clause to be added to the contract during 2009.

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Contract signed on December 18, 2008