Publicis Groupe: Q1 2015 Revenue
(Thomson Reuters ONE) -
PRESS RELEASE
April 21, 2015
PUBLICIS GROUPE
Q1 2015 Revenue
Q1 2015 ? 2,103 million % Change:
Q1 2014 ? 1,597 million +31.7%
Organic growth: +0.9%
Maurice Lévy, Chairman and CEO of Publicis Groupe:
"Our revenue is up to slightly over 30%, partly due to the positive impact of
exchange rates, and partly to the inclusion of Sapient since completing the
acquisition. As we'll continue to see, this is one of the important milestones
of the Groupe's transformation.
We expected organic growth to be slightly down this quarter, but, on the
contrary, it is up almost 1%. This isn't yet the growth rate we expect to see
out of Publicis Groupe, but is nonetheless an encouraging return to growth.
The main event of this early part of the year has been the completion of the
Sapient acquisition, an event that gives Publicis Groupe a new strategic
dimension while excelling the Groupe's transformation. The integration process
is already underway and the prevailing spirit is excellent.
Today's sudden, radical changes in lifestyle and consumption in an
unprecedentedly digital world leave all economic players facing a new set of
challenges. The blurring of boundaries can be found everywhere - in longstanding
industry sectors and even in the shift to omni-channel - both have brought the
advent of new competitors forcing companies to transform themselves at the risk
of "uberisation". They have to rethink their processes, their practice, their
marketing, their customer relations and, more fundamentally, their business
model.
In this new environment, I think it would be fair to say that our Groupe is
ahead of the curve. With the acquisition of Sapient, Publicis Groupe has become
the only global group present all along the value chain - from consulting to
marketing, from communications to commerce - brought to life through an
outstanding expertise in the most high-performing technologies. We are working
on commercial propositions that should enable us to achieve all our medium-term
goals.
For now, we are gradually implementing our growth program. The second quarter
will be better than the first, albeit with modest growth, as announced, that of
the Groupe should be considerably stronger in the second half of the year."
I - Revenue
Publicis Groupe's consolidated revenue for the first quarter of 2015 was 2,103
million euro, a 31.7% increase on 1,597 million euro for the corresponding
period in 2014.
Exchange rates had a 215 million euro positive impact on revenue, i.e. 13.5% of
revenue in Q1 2014, as a result of over 50% of the Groupe's revenue being in
dollars and sterling, and due to the weakening of the euro against these two
currencies by 21.7% and 11.4% respectively. Expressed in dollars, the Groupe's
revenue in Q1 was 2,366 million dollars (+8.2%). When exchange rates are
factored out, revenue growth stands at 16.1%.
Acquisitions contributed 274 million euro or 17.2% of revenue. The completion
of the Sapient acquisition is one of the highlights of the first quarter. This
transaction is an important milestone in the transformation of Publicis Groupe,
making it the undisputed leader of the digital era. Publicis Groupe can now
establish itself more rapidly as the leader in corporate digital transformation,
at the crossroads of marketing, communications, omni-channel commerce and
technology.
Organic growth was +0.9%. Though global economic growth has seen contrasting
trends since the start of the year, Publicis Groupe has achieved growth notably
as a result of its strong presence in digital which has become its main
activity. Digital activities progressed by +4.7% and now account for 50.2% of
total revenue. Healthcare also performed well.
1. Revenue by region
Though Europe has benefitted from a combination of positive factors (the
strengthening of the dollar, the fall in oil prices, the ECB's monetary policy),
the growth outlook remains limited by persistent unemployment. The US economy is
still the world's bastion of high growth and continued low interest rates should
go on shoring up growth throughout 2015. In the emerging markets, the economic
environment remained fragile in the first quarter, particularly in Russia and
Brazil due to the sharp increases in interest rates to contain the weakening of
the ruble and real.
Q1 2015 revenue by region
-------------------------------------------------------------
EUR million Revenue Organic Reported
Q1 2015 Q1 2014 growth growth
-------------------------------------------------------------
Europe ((1)) 575 474 +1.7% +21.3%
North America 1,152 795 +0.8% +44.9%
BRIC+MISSAT ((2)) 215 190 -2.6% +13.2%
Rest of the world 161 138 +4.0% +16.7%
-------------------------------------------------------------
Total 2,103 1,597 +0.9% +31.7%
-------------------------------------------------------------
(1) Europe excluding Russia and Turkey
(2) BRIC: Brazil, Russia, India, China
MISSAT: Mexico, Indonesia, Singapore, South Africa, Turkey
Europe (excluding Russia and Turkey) saw its revenue progress by 21.3%. When
acquisitions and the impact of exchange rates are factored out, organic growth
stands at 1.7%. France and Germany posted 4.2% and 1.8% growth respectively.
Conversely, though the UK market continued to be vibrant, Publicis has been
experiencing challenges in several of its businesses and recorded negative
growth (-4.2%) in Q1 2015. The southern European countries returned to
positive growth (+2.7%), though this growth was achieved against a weak basis of
comparison (especially in Greece). Digital posted strong growth (+7.7%).
North America saw its revenue grow by 44.9%. When acquisitions and the impact
of exchange rates are factored out, organic growth stands at 0.8%, a modest
increase stemming from digital activities where growth was weak too (+1.3%).
The BRIC and MISSAT countries recorded negative organic growth of -2.6% (+13.2%
reported growth). In difficult economic environments, revenue fell sharply in
both Russia and Brazil (-10%). China dropped 1% due to a sluggish luxury goods
sector. India continues on the road to recovery with growth of +5.7%. Mention
should also be made of the decline in South Africa (-5.6%) following on the
trend observed in 2014.
The Rest of the world recorded growth of 4%.
2. Revenue growth by activity
Publicis Groupe's growth has been driven by its strong presence in digital. The
table below shows the good performance of digital activities (+4.7%),
particularly in Europe and the high-growth countries, which offsets the decline
in analog (-1.8%).
-----------------------------------------------------------------------
Europe ((1)) North America BRIC + MISSAT ((2)) Rest of Total
the world
-----------------------------------------------------------------------
Digital +7.7% +1.3% +24.8% +20.5% +4.7%
-----------------------------------------------------------------------
Analog -1.5% +0.3% -8.4% -0.9% -1.8%
-----------------------------------------------------------------------
Total +1.7% +0.8% -2.6% +4.0% +0.9%
-----------------------------------------------------------------------
(1) Europe excluding Russia and Turkey
(2) BRIC: Brazil, Russia, India, China
MISSAT: Mexico, Indonesia, Singapore, South Africa, Turkey
Digital has become the Groupe's main activity and now accounts for 50.2% of
total revenue, thus confirming the raising of the objective to 60% by 2018.
II - Cost control
With a view to improving its operating margin in the medium-term, Publicis
Groupe is integrating Sapient while continuing to invest in (regionalization of
its Shared Services Centers, production platforms, ERP) and simplify its
organization.
III - External growth, new launch, financial transactions
1. Acquisitions
- Expicient Inc., a leading global omni-channel services firm with significant
expertise in inventory and order management systems (OMS).
- Epic Communications, South Africa's leading independent integrated strategic
communications agency.
- Relaxnews is a press agency (member of Fédération Française des Agences de
Presse and of the International Press and Telecom Council) with global expertise
in consulting, production and management of content for the digital
transformation of media and firms (exclusive negotiations in process).
- Monkees, the agency of reference in France for digital marketing and social
media.
2. Blue 449 launch
ZenithOptimedia has launched a new global media network to drive business growth
and further develop new and innovative approaches to communications. Called Blue
449, the new network has its headquarters in London at the offices of Walker
Media, which has rebranded to become the founding office of ZenithOptimedia's
new global agency.
Blue 449 will have 17 city hubs by the end of this year and will operate
collaboratively with the other ZenithOptimedia brands: Zenith, Optimedia,
Performics, and Newcast. The new network will also benefit from access to the
extensive range of services within the Publicis Groupe and VivaKi, in a new
framework for clients called 'Open Source'.
The launch of Blue 449 follows the acquisition of Walker Media in 2014 by
Publicis Groupe.
Blue 449 will be led by Global Chairman, Sebastien Danet, and Global Managing
Director, James Shoreland. Sebastien Danet is a Global Managing Partner at
ZenithOptimedia and Chairman VivaKi France. James Shoreland has been promoted
from EVP, Director Corporate Development, ZenithOptimedia US to the new MD
position at Blue 449.
3. Finance
- Share buyback
On March 17, 2015, before trading opened on the Paris stock market, Publicis
Groupe purchased 2,406,873 of its own shares in a block transaction from the
Badinter family for a total consideration of 175.8 million euro, i.e. 73.03 euro
per share. This transaction is part of a broader framework consisting of the
share buyback program authorized by the AGM of May 28, 2014 and the 2022 Orane
bond early redemption approved by the Supervisory Board at its meeting of
September 15, 2014 and announced on September 16, 2014. The early redemption
will be subject to approval by the shareholders at the Groupe's forthcoming AGM
on May 27, 2015.
The transaction was carried out at a discount of 2% to the weighted average
share price of the five previous days' trading, and at a discount of 4.5% to the
closing price on March 16, 2015.
The entire transaction was funded by Publicis Groupe's available liquidities.
- Share buyback contract
Publicis Groupe has entered into a share buyback contract with an investment
services provider for the purposes of the Share Buyback Program authorized by
the Combined Annual General Meeting of its shareholders on May 28, 2014.
This contract was signed on March 27, 2015 and relates to a maximum of
3,935,000 shares at an average share price not exceeding the limit imposed by
the combined AGM of May 28, 2014. The actual price of these shares will be
calculated on the basis of the arithmetical average of the average prices
weighted by the volumes traded each day during the buyback period, and shall not
exceed that arithmetical average.
Under the terms of the contract, the buyback period shall extend from March
30, 2015 to July 31, 2015 at the latest.
This transaction falls within the framework of the early redemption of the 2022
Orane bonds mentioned above.
- Redemption of the 4.25% Eurobond issue
Publicis Groupe redeemed its 4.25% Eurobond at maturity in March 2015 for a
total of 253 million euro. This redemption was fully funded out of Publicis
Groupe's available liquidities. Given the 3.85% effective rate of interest on
this bond issue, the redemption will help reduce the average cost of the
Groupe's outstanding gross debt.
IV - Net debt at March 31, 2015
At March 31, 2015, net debt totaled 2,966 million euro after 29 million euro at
March 31, 2014. At year-end 2014, the Groupe posted a cash-positive situation
of 985 million euro.
V - Outlook
When updating its forecast on March 30, 2015, media observatory ZenithOptimedia
reduced its global advertising media expenditure growth forecast to +4.4% for
2015, down from +4.9% in December 2014. This 50-basis point reduction stemmed
from the crisis in Russia, Ukraine and Belarus, in addition to the slowdown in
China. By region, its expects the USA to continue to post sustained growth
(+3.7%), with western Europe growing by a mere 3.1% while advertising
expenditure in eastern and central Europe declines by 5.2%. Asia-Pacific and
Latin America are expected to grow by 5.2% and 11.2% respectively.
Organic growth is expected to be higher in the second half-year. The Groupe's
high exposure to digital activities will ensure its future growth and the
continued improvement of its margins between now and 2018.
***
Forthcoming event
Annual General Meeting of shareholders
on Wednesday, May 27, 2015 at 10 a.m.
at Publicis Cinémas
129 Avenue des Champs-Elysées, 75008 Paris
.
Disclaimer
This presentation contains forward-looking statements. The use of the words
"aim(s)," "expect(s)," "feel(s)," "will," "may," "believe(s)," "anticipate(s)"
and similar expressions in this presentation are intended to identify those
statements as forward looking. Forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ materially from
those projected. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this presentation. Other than as
required by applicable securities laws, Publicis Groupe undertakes no obligation
to publish revised forward-looking statements to reflect events or circumstances
after the date of this presentation or to reflect the occurrence of
unanticipated events. Publicis Groupe urges you to review and consider carefully
the various disclosures it has made concerning the factors that may affect its
business, including the disclosures made under the caption "Risk Factors" in the
2014 Registration Document filed with the French financial markets authority
(AMF).
About Publicis Groupe
Publicis Groupe [Euronext Paris FR0000130577, CAC 40] is a global leader in
marketing, communication, and business transformation. In a world marked by
increased convergence and consumer empowerment, Publicis Groupe offers a full
range of services and skills: digital, technology & consulting with
Publicis.Sapient (SapientNitro, Sapient Global Markets, Sapient
Government Services, Razorfish Global, DigitasLBi, Rosetta) - the world's
largest most forward-thinking digitally centered platform focused exclusively on
digital transformation in an always-on world - as well as creative networks such
as BBH, Leo Burnett, Publicis Worldwide, Saatchi & Saatchi, public affairs,
corporate communications and events with MSLGROUP, ad tech
solutions with VivaKi, media strategy, planning and buying through Starcom
MediaVest Group and ZenithOptimedia, healthcare communications, with Publicis
Healthcare Communications Group (PHCG), and finally, brand asset production with
Prodigious. Present in 108 countries, the Groupe employs more than 76,000
professionals.
www.publicisgroupe.com | Twitter: (at)PublicisGroupe |
Facebook: www.facebook.com/publicisgroupe | LinkedIn: Publicis Groupe
| http://www.youtube.com/user/PublicisGroupe | Viva la Difference !
Contacts
Publicis
Groupe
Peggy Corporate + 33 (0)1
Nahmany Communications 44 43 72 83 peggy.nahmany(at)publicisgroupe.com
Jean-Michel Investor + 33 (0)1
Bonamy Relations 44 43 77 88 jean-michel.bonamy(at)publicisgroupe.com
Stéphanie Investor + 33 (0)1
Constand Relations 44 43 74 44 stephanie.constand(at)publicisgroupe.com
Appendices
New Business -1(er) quarter 2015
Mains Gains
BBH/NEOGAMA
Tesco (United Kingdom), Magnum Watches (Brazil), Viva Channel (Brazil), Vale
(Brazil).
Leo Burnett
Fererro Chocolates (Italy), Allergan Medical Aesthetics (Singapore), OSN Cable &
Network Provider (United Arab Emirates).
MSLGROUP
Alcon (USA), 24 Hour Fitness (USA), Rover.com (USA), AIG (France), Conforama
(France), Elior (France), Michelin (France), Cathay Pacific (Netherlands),
Ranstad Holding (Netherlands), Nivea (Poland), ThyssenKrupp AG (Poland), ING
(Poland), Mahanagar Gas Limited (India), Alstom (India), Belkin International
(Singapore, Hong Kong, China), Alibaba.com (China), Orient Europharma (Taiwan).
Publicis Worldwide
Arla (Belgium), Mobistar (Belgium), Fédération des Médecins Omnipraticiens du
Québec (Canada), BASF (Brazil), Henkel (Brazil), Metro_ Santiago (Chile),
Sodimac (Chile), Universidad de Piura (Peru), Tencent (China), Heinz ABC
(Indonesia), Tourism NT (Australia), Civil Engineering Institute (Macedonia),
Roche Macedonia (Macedonia).
Saatchi & Saatchi
HomeAway - integrated (c/o) (United Kingdom), Benecol - Pan European (United
Kingdom), Praktiker - digital (Poland), Drinkworks/Monteith's Cider (Australia),
Bank SA (Australia), Bank of Melbourne (Australia), Berlitz (Japon), Acer
(Singapore), ADT (South Africa), Cadillac (United Arab Emirates / Middle East &
North Africa).
Starcom MediaVest Group
TomTom (Global), Mars (USA), UNHCR (Italy), Poczta Polska (Poland), Viacom
(Poland), Liberty Insurance (Poland),
ZenithOptimedia
eis.de (Allemagne), Pixmania (France), Toyota (Slovakia, Czech Republic),
Mercedes-Benz (Romania),
BRD - Groupe Société Générale (Romania), Bella Food (Romania), AXN Europe
Limited (Romania), L'Oréal (Bolivia), Viva (Bolivia), ABInBev (Bolivia), Nestlé
(Bolivia), NH Hotels (Colombia), Istanbul Cerrahi Hospital (Turkey), The
Euroepan Commission (Armenia), Alkaloid (Armenia).
2015 press releases
08-01-2015 Publicis Groupe Extends Tender Offer to Acquire Sapient
15-01-2015 Publicis Groupe Names Anthony Gazagne President of PublicisLive
23-01-2015 Publicis Groupe Extends Tender Offer to Acquire Sapient
27-01-2015 Publicis Groupe Acquires French Digital Marketing Agency Monkees
to be aligned with Publicis Activ
29-01-2015 Jean-Michel Bonamy Joins Publicis Groupe as Vice-President
Investor Relations & Strategic Financial Planning
04-02-2015 Publicis Groupe and Sapient Receive all Regulatory Approvals for
Proposed Acquisition
06-02-2015 Publicis Groupe Completes Acquisition of Sapient
12-02-2015 2014 annual results
16-02-2015 Publicis Groupe and Relaxnews Announce the Start of Exclusive
Negotiations in View of the Acquisition of Relaxnews, press agency specialized
in lifestyle content creation, at a valuation of ?9.58 per share
26-02-2015 Publicis Groupe Acquires Integrated Strategic Communications
Agency, Epic Communications. Agency to Join the MSLGROUP Network in South Africa
12-03-2015 Publicis Groupe Strengthens Publicis.Sapient's Leadership in
Omni-Channel and Connected Commerce with Acquisition of Expicient Inc
17-03-2015 Share Buyback
25-03-2015 Update On Publicis Groupe Always On Platform
30-03-2015 Share Buyback Contract
Definitions
Net financial debt (or net debt): equals the long and short term financial debt
plus associated derivatives fair value, less cash and cash equivalent
Average net debt: average of average monthly net debt.
Operating margin: The operating margin is equal to the revenue after deduction
of personnel expenses, other operating expenses (excluding non-current income
and expenses), depreciation and amortization (excluding intangible arising from
acquisitions).
Operating margin rate: operating margin/revenue.
Organic growth calculation
+---------------------------------+-------+ +----------------------------------+
| | | | Impact of exchange rates by |
| (in million euros) |Q1 2015| | currency |
| | | | (EUR million) |
| | | | Q1 |
| | | +------------+---------------------+
|2014 revenue | 1,597| |GBP ((2)) | 16|
| | | +------------+---------------------+
|Currency impact ((2)) | 215| |USD ((2)) | 167|
| | | +------------+---------------------+
|2014 revenue at 2015 exchange | 1,812| |Others( (2))| 32|
|rates (a) | | | | |
+---------------------------------+-------+ +------------+---------------------+
|2015 revenue before impact of | 1,829| |Total | 215|
|acquisitions ((1)) (b) | | | | |
| | | +------------+---------------------+
|Revenue from acquisitions ((1)) | 274|
| | |
|2015 revenue | 2,103|
| | |
|Organic growth (b/a) | +0.9%|
| | |
+---------------------------------+-------+
(1) Acquisitions (L&K India, Hawkeye, Lead 2 Action, Salter Baxter, Crown,
Proximedia, Ambito 5, Liquorice, Nurun, Turner Duckworth, Tangerine, Run, ZME,
Machine, BrandsRock, 3Share, Relevant 24, Monkees, ZO Puerto Rico, AKM3, Vivid,
Epic, Spindrift, Star Reacher, Sapient, Expicient, Practice iLeo Romania), net
of disposals.
(2) EUR = USD 1.125 in Q1 2015 vs. USD 1.370 in Q1 2014
EUR = GBP 0.743 in Q1 2015 vs. GBP 0.828 in Q1 2014
This announcement is distributed by GlobeNewswire on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Publicis Groupe via GlobeNewswire
[HUG#1912705]
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Datum: 21.04.2015 - 07:34 Uhr
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