Publicis Groupe : First Half 2016 Results
(Thomson Reuters ONE) -
First Half 2016 Results
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| (Million euro) H1 2016 2016 vs. 2015 |
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| * Revenue 4,753 +4.6% |
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| Organic growth +2.8% |
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| * Operating margin 619 +5.1% |
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| * Operating margin rate 13.0% |
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| * Group net income 381 +5.0% |
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| * Headline((1) ) EPS, diluted (euro) 1.81 +7.7% |
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| * Free cash-flow before change in WCR 564 +23.1 % |
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(1) After elimination of impairment charges, amortization of intangibles
arising from acquisitions, main capital gains (or losses) on disposals and
revaluation of earn-out payments
2(nd) Quarter 2016
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| (Million euro) Q2 2016 |
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| * Revenue 2,462 |
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| * Reported growth +0.9% |
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| * Growth at constant exchange rates +4.6% |
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| * Organic growth +2.7% |
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+-------------------------------------------------+
Maurice Lévy, Chairman and CEO of Publicis Groupe:
"This first half-year has ended very satisfactorily.
First with the results: organic growth of close to 3%, an operating margin at
13% and a double-digit increase of our free cash flow. Next the implementation
of our new structure, the "Power of One" by the end of June, as expected.
The transformation process launched in December 2015 has completely changed our
approach to communications and our understanding of the way our clients work in
taking on the challenges of the future. This transformation means we can
anticipate our clients' expectations with an "end-to-end" offering that provides
them with full access to the Groupe's resources including our skills in
consulting and technology. This initiative was very well received by our
clients as it is original, modern and, most importantly, it is a comprehensive
solution to the challenges they face. We are beginning to reap the benefits of
this new approach.
Some expected this transformation would require several years to be
implemented. I would like to express my gratitude to all our people who have
had to contend with upheaval within the organization, reassignments, or changes
in responsibility while, at the same time, continuing to provide our clients
with Publicis service at its very best. Despite our concerns of seeing
significant impact from the budgets lost in 2015, they were able to ensure new
business developments which brought us to a satisfactory growth rate in the
2(nd) quarter.
Furthermore, they also left no stones unturned in ensuring the success of other
Publicis initiatives such as Viva Technology, an undertaking organized in
conjunction with Groupe Les Echos. This event was further evidence of the
Groupe's interest and involvement in the digital economy and innovative ideas,
and of the importance it places in supporting start-ups that are the companies
of the future. The great success of this event is also a testament to the
Groupe's credibility in this sector and in the eyes of the major players.
During this event, our "Publicis90" project rewarded 90 start-ups with financial
support: this was our way of celebrating Publicis' 90(th) anniversary in a
constructive and forward-looking manner. It should also be noted that 25 of the
90 winners came from within the Groupe, further evidence of the entrepreneurial
spirit that reigns within the Groupe.
Finally, during Viva Technology, Publicis Groupe and Tencent - the Chinese
internet giant - announced a strategic agreement at global level. This
partnership further reinforces our leadership in digital and technology.
After this particularly active and productive first half-year, we expect the
third quarter to be more difficult due to the full impact of the account losses
of 2015, though this should not jeopardize the upward trend of all the Groupe's
indicators over the full year 2016.
We should not be heavily impacted from the Brexit. Since we operate in the UK in
local currency, as we do in all the countries in which we have operations.
We remain very confident about reaching our 2018 objectives, and believe that we
will start to see and feel the benefits of our transformation more fully as of
2017."
Publicis Groupe's Supervisory Board met on July 20, 2016 under the chairmanship
of
Mrs. Elisabeth Badinter, to examine the accounts for the first half of 2016,
presented by Mr. Maurice Lévy, Chairman of the Management Board and Chief
Executive Officer.
1 - KEY FIGURES
-------------------------------------------------------------------------------
Million euros, excepting percentages and per share H1 2016 H1 2015 2016
data (in euro) vs. 2015
-------------------------------------------------------------------------------
Revenue 4,753 4,542 +4.6%
Operating margin before Depreciation & Amortization 704 675 +4.3%
% of revenue 14.8% 14.9%
Operating margin 619 589 +5.1%
% of revenue 13.0% 13.0%
Operating income 595 554 +7.4%
Group net income 381 363 +5.0%
Headline((1)) EPS, diluted 1.81 1.68 +7.7%
-------------------------------------------------------------------------------
Free Cash Flow before changes in working capital 564 458 +23.1%
requirements
-------------------------------------------------------------------------------
(1) after elimination of impairment charges, amortization of intangibles arising
from acquisitions, main capital gains (or losses) on disposals and revaluation
of earn-out payments
2 - BUSINESS ACTIVITY IN H1 2016
2.1 - Q2 2016 revenue
Publicis Groupe's consolidated revenue for the second quarter of 2016 was 2.462
million euro, up 0.9% from 2,439 million euro in Q2 2015. Exchange rates
impacted revenue negatively by 85 million euro, i.e. the equivalent of 3.5% of
Q2 2015 revenue. Net acquisitions contributed 44 million euro in revenue in Q2
2016, the equivalent of 1.8% of Q2 2015 revenue. Growth at constant exchange
rates was +4.6%.
Organic growth was +2.7% in the second quarter, buoyed by the growth of digital
activities (+5.1%). Development efforts allowed to significantly mitigate the
impact of the loss of media accounts of 2015. However, the impact of these
losses should be much greater in the third quarter.
Breakdown of Q2 2016 revenue by region
----------------------------------------------------------------
In million Revenue Organic Reported
---------------------
euro Q2 2016 Q2 2015 growth growth
----------------------------------------------------------------
Europe 718 681 +7.3% +5.4%
North America 1,319 1,323 -0.1% -0.3%
Asia Pacific 273 265 +5.5% +3.0%
Latin America 81 101 +4.8% -19.8%
Middle East & Africa 71 69 -1.5% +2.9%
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Total 2,462 2,439 +2.7% +0.9%
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2.2 - H1 2016 revenue
Over the first half-year, Publicis Groupe's consolidated revenue totaled 4,753
million euro compared with 4,542 million euro in 2015, i.e. an increase of
4.6%. The impact of exchange rates was a negative 105 million euro, i.e. the
equivalent of 2.3% of H1 2015 revenue. Net acquisitions contributed 191 million
euro to revenue in the first half of 2016, i.e. the equivalent of 4.2% of H1
2015 revenue. Growth at constant exchange rates was +7.1%, and organic growth
stood at +2.8% for the first half of 2016. It should be noted that the
Healthcare sector performed well, and that the Media business continued the
sustained momentum built up in Q1 2016 despite the impact of the accounts lost
in 2015.
Breakdown of H1 2016 revenue by region
----------------------------------------------------------------
In million Revenue Organic Reported
---------------------
euro H1 2016 H1 2015 growth growth
----------------------------------------------------------------
Europe 1,349 1,269 +5.5% +6.3%
North America 2,620 2,475 +1.4% +5.9%
Asia Pacific 503 486 +4.7% +3.5%
Latin America 152 191 +0.9% -20.4%
Middle East & Africa 129 121 -0.5% +6.6%
----------------------------------------------------------------
Total 4,753 4,542 +2.8% +4.6%
----------------------------------------------------------------
Europe grew its revenue by 6.3%. When the impact of acquisitions and exchange
rates is factored out, organic growth was +5.5%. Over the entire region,
digital achieved strong growth (+12.5%). France continued to perform well
(+5.0%) and Germany and Italy continued their strong momentum (growth in the
region of 9%), shored up by better economic situations. The situation was
volatile in Russia with 4.6% growth at June 30, after 9.4% in the first
quarter. The situation is much improved in the UK where growth was 3.6% in H1
(7.4% in Q2).
North America reported growth of 5.9% with organic growth standing at +1.4%.
This growth stemmed mainly from the media and health businesses. Growth was
nevertheless impacted by the 2015 media account losses (Mediapalooza).
Asia Pacific achieved reported growth of 3.5% and organic growth of 4.7%, with
good levels of performance in Greater China (+4.4%).
Latin America was down 20.4% on a reported basis but recorded positive organic
growth of 0.9%. This downturn was notably attributable to the downswing in
Brazil (revenue fell 4.6% despite business stabilizing in the second quarter at
-0.7%). Conversely, Mexico returned to positive growth once again with +11.5%
in H1 (after -14.6% in the first quarter).
The Middle East & Africa achieved reported growth of +6.6% but negative organic
growth of -0.5%.
Breakdown of H1 2016 revenue by region: digital and analog
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Europe North Asia Latin America Middle East & Africa Total
America Pacific
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Digital +12.5% +2.5% +23.0% +1.3% +10.7% +6.3%
Analog -0.1% -0.4% -3.6% +0.9% -3.5% -0.8%
------------------------------------------------------------------------
Total +5.5% +1.4% +4.7% +0.9% -0.5% +2.8%
------------------------------------------------------------------------
The Groupe's growth continued to be driven by its digital activities (organic
growth of +6.3%), with double-digit growth in all regions except North America -
where the Groupe is still experiencing difficulties with Razorfish - and Latin
America. It should also be pointed out that analog activities continued to
decline.
3 - ANALYSIS OF THE KEY FIGURES
3.1 - Income Statement
The Operating margin before depreciation and amortization rose to 704 million
euro in H1 2016, up 4.3% from 675 million euro for the corresponding period in
2015, i.e. 14.8% of revenue (versus 14.9% in H1 2015).
- Personnel costs amounted to 3,071 million euro at June 30, 2016, up 4.3%
from 2,944 million euro for the corresponding period in 2015. Fixed personnel
costs totaled 2,676 million euro, representing 56.3% of revenue after 57.1% in
2015. Freelance costs stood at 219 million euro in H1 2016, compared with 197
million in H1 2015. Restructuring costs rose by 16 million to total 55 million
euro in H1 2016 (versus 39 million euro in H1 2015) as the Groupe undergoes its
reorganization and adjusts to an environment that is increasingly digital-
oriented, while continuing to generate synergies subsequent to the Sapient
acquisition. Operational efficiency will be improved by the various projects in
which the Groupe is investing (ERP roll-out, the development of production
platforms, the continued regionalization of its Shared Services Centers, as well
as various technological developments).
- Other operating costs (excluding depreciation and amortization) totaled 978
million euro after 923 million euro in H1 2015, i.e. 20.6% of total revenue
versus 20.3% in 2015.
Depreciation and amortization totaled 85 million euro in H1 2016, compared with
86 million euro in the first half of 2015.
The Operating margin rose 5.1% to 619 million euro, after 589 million euro in H1
2015. As a percentage of revenue, the margin was 13.0%, i.e. the same percentage
as for the corresponding period in 2015.
By region, the operating margins were 13.0% in Europe, 14.1% in North America,
11.1% Asia-Pacific, -0.7% in Latin America and 14.7% in the Middle East &
Africa.
Amortization of intangibles arising from acquisitions totaled 40 million euro in
H1 2016, down from 43 million euro in H1 2015. Other non-recurring income
(expenses) netted out at income of 16 million euro, mainly in the form of
capital gains on Mediavision disposal, after 8 million for the corresponding
period in 2015.
Operating income for the first six months of 2016 amounted to 595 million euro,
up 7.4% from 554 million euro in H1 2015.
Financial income (expense), which comprises the cost of net debt and other
financial income and expenses, was a net expense of 50 million euro in the first
half of 2016, after an expense of 33 million euro in 2015. The cost of net debt
was quite stable by comparison with last year (39 million euro in H1 2016 versus
40 million euro in H1 2015). Other financial income (expense) amounted to
income of 11 million euro (mainly due to the revaluation of earn-out payments),
after income of 7 million euro in H1 2015.
Income tax for the period was 162 million euro, i.e. an estimated effective tax
rate of 29.7%, compared with 159 million euro in 2015, corresponding to an
effective tax rate of 30.5%.
The Associates share of profit was 2 million euro versus 3 million euro in H1
2015. Minority interests totaled 4 million euro in 2016, after 2 million euro
in H1 2015.
In total, group net income amounted to 381 million euro in the first half-year
2016, compared with 363 million euro for the corresponding period in 2015.
3.2 - Free cash flow
Before changes in working capital requirements, the Groupe's free cash flow was
564 million euro in H1 2016, compared with 458 million euro in 2015.
3.3 - Net debt
Net debt at June 30, 2016 stood at 2,460 million euro (i.e. a debt / equity
ratio of 0.38) compared with 1,872 million euro at December 31, 2015. The
Groupe's average net debt in the first half of 2016 was 2,380 million euro,
versus 1,881 million euro for H1 2015. For the record, the Sapient acquisition
was completed on February 6, 2015.
3.4 - Shareholders' equity
Consolidated shareholders' equity attributable to the Groupe decreased from
6,556 million euro at December 31, 2015 to 6,495 million euro at June 30, 2016.
4 - GROUPE CSR POLICY
In 2016, Publicis Groupe is continuing its in-house analysis of the Sustainable
Development Goals (SDGs) in order to identify the best themes to work on,
whether independently or in partnership with others. This is the backdrop
against which the Groupe is taking part, alongside five other major
communications groups, in "Common Ground" which is the first sectoral initiative
in favor of the UN's Sustainable Development Goals.
The Groupe's CSR Report is structured around its three main stakeholder groups:
Talent, i.e. employees; Clients; and Society, i.e. citizen-consumers. The cross-
cutting fields of ethics and governance, on the one hand, and environmental
matters on the other hand, are dealt with in two separate chapters.
Concerning talent, the Groupe is taking up the major challenges of diversity and
inclusion, and continues, for instance, to roll out affinity networks locally
(e.g. VivaWomen! or Egalité). It also continues to work on challenges such as
professional development and continuing training, or well-being in the
workplace. Several initiatives have been launched, in particular in training.
As for clients, the challenge for the agencies is to increase their involvement
in responsible marketing and communications through efficient new approaches,
while supporting clients in their digital transformation where innovation is at
the very heart of their concerns. The supplier CSR assessment program has been
implemented, and 100 suppliers (out of the 150 who were invited) have chosen to
join the EcoVadis platform. The CSR Procurement Guidelines are now available on
the Groupe's website.
In terms of Society and consumers-citizens, a Chief Data Privacy Officer has now
been appointed to address the issues and take up the challenges of data
protection.
The Groupe's agencies continue to work actively with local communities, with pro
bono campaigns (provided free of charge) and volunteer work now coming under a
single watchword: Create & Impact. The goal is to boost the positive impact we
bring to Society and to reassert our commitment to human rights. Over the first
half-year, the Women's Forum for the Economy & Society has held events in
Mexico, Dubai and Mauritius, with considerable regional impact and close
attention to recurring issues with which women are faced in these regions and
countries.
In Ethics, the focus has been on updating the procedures supporting Janus, the
in-house code of ethics, as well as collaborative work carried out within inter-
professional organizations at national and international levels.
Finally, the Groupe is pursuing its ongoing efforts to contain and reduce its
impact on the environment. The ambition is to "consume less and better". The
2020 goals for the reduction of our carbon footprint are guided by the EU policy
known as "20-20-20".
The 2015 CSR Report has been independently audited in compliance with the GRI-4
framework, and includes more information and indicators than the 2015
Registration Document. The 52 agencies audited on site represent 35% of total
headcount and all consolidated data were checked and audited. The CSR reporting
process began in late 2015 and continued throughout the first quarter of 2016.
5 - HIGHLIGHTS FROM H1 2016
5.1 - Transformation
During the first six months of 2016 Publicis Groupe implemented the most fully
integrated organization in the entire sector, bringing down the curtain on the
traditional holding company structure with siloed communications groups. For
Publicis Groupe, the goal is to help clients by providing them with the means to
succeed in their own transformation and optimize marketing performance through
access to all of the Groupe's capabilities across the "Power of One"
organization.
The purpose of this reorganization is to endow the Groupe with a more client-
centric structure. Four dedicated "solution hubs" have been set up to serve
clients on a cross-cutting basis:
- Publicis Communications, headed by CEO Arthur Sadoun, spans the creative and
communications networks: Publicis Worldwide, Leo Burnett, Saatchi & Saatchi,
BBH, Fallon, Marcel, MSL (public relations) and Prodigious (production)
- Publicis Media is run by CEO Steve King, and encompasses media and
connectivity skills: Starcom, Zenith, Mediavest Spark, Optimedia Blue 449, and
the performance entities such as Performics
- Publicis.Sapient is led by CEO Alan Herrick and covers the consulting /
technology / digital spectrum: SapientNitro, Sapient Consulting, DigitasLBi and
Razorfish
- Publicis Health, under CEO Nick Colucci, combines all the entities working
for laboratories and healthcare companies: DigitasHealth LifeBrands, Publicis
LifeBrands, Saatchi & Saatchi Wellness, Publicis Health Media, Touchpoint
Solutions
All these solution hubs operate in the top 20 markets. Elsewhere, Publicis One,
headed by CEO Jarek Ziebinski, provides an integrated, one-stop organization in
each country.
The solutions hubs are now fully operational. The Global Client Leaders have
been appointed and are in charge of clients, across all capabilities, with
direct accountability through client P&L.
The Groupe should reap the benefits of this reorganization in the forthcoming
quarters.
5.2 -ANA report (Association of National Advertisers)
On June 7, 2016, the ANA (Association of National Advertisers) published a
report incriminating business practices between communications agencies and
advertisers. We can only be surprised by ANA's choice in particular as this
report is based on allegations and situations that refer to undisclosed
companies and individuals and are then used to make very broad-based and
unverifiable accusations. Publicis Groupe was keen to state its position.
Publicis Groupe has very stringent in-house rules and regulations, including a
Code of Ethics, which serves as a reference in controlling procedures and
financial reporting. We constantly revise our working methods to ensure that
they are best in class and our employees have to apply them rigorously. All
contract negotiations with our clients include standards of transparency that
they deem appropriate and we commit to fully abide by the terms of the contract
we enter into alongside our clients.
5.3 - Change in perimeter
- MercerBell is a leading Australian agency in the field of customer
experience. MercerBell is specialized in CRM and digital strategy, creativity,
content and technology, and will be integrated into Saatchi & Saatchi. This
agency, which was founded in 1999, has a team of 65 professionals and a customer
base that includes Toyota, Foxtel, Quantas, BT, Allianz and ASX.
- Vertiba, the Salesforce partner, is specialized in marketing solutions.
Founded in 2010, Vertiba is headquartered in Boulder, Colorado. Vertiba's
skills will be integrated into the Publicis.Sapient platform.
- Seven Seconds, the London (UK) based e-commerce and digital specialist, was
founded in 2013 and will be integrated into BBH. Its main clients are British
Airways, Barclays, Boots, Tesco Retail and Tesco Bank.
- Venus Communications, is one of the leading public relations agencies in
Vietnam. Venus has been integrated into the MSL brand, which in turn is part of
Publicis One in Vietnam. Over the last 10 years, Venus and MSL have worked
together successfully on numerous assignments. The agency, which was founded in
1998, has over 40 employees and a prestigious client portfolio that includes
MasterCard, FedEx, Rolls Royce, BAT, Mead Johnson and Sanofi.
- Troyka Group: in which Publicis Groupe has taken a stake, is West Africa's
first fully integrated communications services group. The Troyka group is
comprised of six agencies, i.e. Insight Communications, The Thinkshop, All
Seasons Media, Media Perspectives, The Quadrant Company, and Hotsauce.
Starting out with Insight Communications in 1980, the Troyka group now has 300
employees over six agencies across the entire region. The Troyka agencies work
with prestigious international brands such as Heineken, Shell, Samsung,
Unilever, Google, P&G, Microsoft, Ford and Axa, as well as with national brands
including Oando, Nestoil, Africa Investor, Jagal, and Olam.
Publicis Groupe has been investing regularly in Africa in recent years, in view
of the high growth potential of this market. By way of this equity investment,
Publicis Groupe will use Troyka to launch its network in Nigeria, thereby
creating a powerful communications entity that will have a competitive edge in
all skill sets in West Africa
On June 1, 2016, Publicis Groupe acknowledged the decision by JCDecaux to
abandon the project to acquire the former's 67% stake in the share capital of
Metrobus due to demands made by the French competition authority (Autorité de la
concurrence). In conjunction with Metrobus and JCDecaux (which still owns a
33% stake), Publicis Groupe will now examine all the options to provide Metrobus
with the best possible conditions for its development.
5.4 - The Groupe's commitment to start-ups
- Viva Technology Paris. In conjunction with Groupe Les Echos, Publicis Groupe
staged a global event in Paris bringing together start-ups and the main
stakeholders in the digital environment. This rendez-vous, held from June 30 to
July 2, attracted 5,000 start-ups, dozens of large industrial groups and
investors, and included over 300 conferences with the biggest names in the
global hi-tech sector. With over 45,000 visitors in three days, Viva Technology
proved a great success and underscored the pre-eminent place of Publicis Groupe
in the global digital economy. This event should be staged again next year.
- Publicis90. On the occasion of its 90(th) anniversary, Publicis Groupe
launched a project named Publicis90. This idea was to provide 90 projects or
start-ups with financial aid and the support of the Groupe's digital experts.
After an initial phase of stringent selection over a period of several months,
the winners were selected from among the 3,500 contestants from 130 countries,
and received their awards at a ceremony held during Viva Technology.
5.5 - Global partnership with Tencent
Publicis Groupe has signed a global strategic partnership with Tencent, the
internet giant that operates the most popular social and media platforms in
China. The partnership is the first-of-its-kind collaboration across a global
advertising group and all 11 products of Tencent, China's largest internet
company. It is also the first partnership that transcends the Groupe's three
solution hubs of Publicis Media, Publicis Communications and Publicis.Sapient.
This agreement will cement the two groups' relationship at a global level with a
mission to breed innovations whilst offering clients all of Tencent's
innovations through a unique borderless approach built on three pillars:
- Future Capabilities: Through this partnership, Publicis Groupe and Tencent
will launch a 'Drugstore' incubation facility, to curate, invest in and
cultivate the start-ups of the future. This will provide breakthrough offerings
to our clients in data and ad tech as well as across new VR and AR enabled
platforms;
- Data: Through its connected strategy, Tencent will offer Publicis Groupe
access to its vast and rich online behavioral data, benefiting clients through
improved programmatic offerings, cross-screen planning capabilities and
conversion performance;
- Content: The two companies will partner on the co-creation and co-investment
of web native content to drive unique content opportunities and new content
models for key clients.
6 - OUTLOOK
The IMF's recent announcements underscore the uncertainties surrounding the
global economic environment, on top of geopolitical risks. The result of the
"Brexit" referendum on June 23, 2016 increases anxiety with respect to the
impact of the exit out of Europe could have on the UK but more broadly on to
Europe overall. The violent events in the US, France and Turkey add to those
uncertainties. Despite this environment and the difficulties in certain sectors
of the economy, the good results achieved by Publicis Groupe confirm its
previous guidance of improved financial indicators across the board: revenue,
operating margin, adjusted diluted EPS, and dividend payout, even though we
expect a more difficult 3rd quarter.
The Groupe's transformation is the most radical ever imagined in its sector. It
is being carried out to meet clients' new requirements brought about by the
fierce competition ushered in by the development of digital technology. Digital
has not only empowered consumers, it has caused the physical and digital worlds
to converge, with the emergence of numerous newcomers that are completely
challenging the established order. Publicis Groupe has abolished the notion of
holding company with silo-type operating structures and now provides a complete
array of services from consulting right up to the materialization of campaigns
through the alchemy of creation and technology within an operating entity of
"connecting company".
* * *
Disclaimer
Certain information contained in this document, other than historical
information, may constitute forward-looking statements or unaudited financial
forecasts. These forward-looking statements and forecasts are subject to risks
and uncertainties that could cause actual results to differ materially from
those projected. They are presented as at the date of this document and, other
than as required by applicable law, Publicis Groupe does not assume any
obligation to update them to reflect new information or events or for any other
reason. Publicis Groupe urges you carefully to consider the risk factors that
may affect its business, as set out in the 2015 Registration Document filed with
the French Autorité des Marchés Financiers (AMF) and which is available on the
website of Publicis Groupe (www.publicisgroupe.com), including an unfavourable
economic climate, an extremely competitive market sector, the possibility that
our clients could seek to terminate their contracts with us at short notice, the
fact that a substantial part of the Group's revenue is derived from certain key
clients, conflicts of interest between advertisers active in the same sector,
the Group's dependence on its directors and employees, laws and regulations
which apply to the Group's business, legal action brought against the Group
based on allegations that certain of the Group's commercials are deceptive or
misleading or that the products of certain clients are defective, the strategy
of growing through acquisitions, the depreciation of goodwill and assets listed
on the Group's balance sheet, the Group's presence in emerging markets, the
difficulty of ensuring internal controls, exposure to liquidity risk, a drop in
the Group's credit rating and exposure to the risks of financial markets.
About Publicis Groupe - The Power of One
Publicis Groupe [Euronext Paris FR0000130577, CAC 40] is a global leader in
marketing, communication, and digital transformation. Active across the entire
value chain, from consulting to creation, and production, Publicis Groupe
offers its clients a transversal, unified and fluid model allowing them access
to all the Groupe's tools and expertise around the world. Publicis Groupe is
organized across four Solutions hubs: Publicis Communications, Publicis Media,
Publicis.Sapient and Publicis Health. These 4 Solutions hubs operate across
principal markets, and are carried across all others by Publicis One. Publicis
One is a fully integrated service offering making the Groupe's expertise
available to all clients, under one roof.
Present in over 100 countries, Publicis Groupe employs nearly 80,000
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 jean-
Bonamy Relations 44 43 77 88 michel.bonamy(at)publicisgroupe.com
Chi-Chung Investor + 33 (0)1
Lo Relations 44 43 66 69 chi-chung.lo(at)publicisgroupe.com
Appendices
Organic growth calculation
+---------------------------------------+-----+-----+-----+ +---------------+
| | | | | | Impact of |
| | | | | |exchange rates |
| (in million euro) | Q1 | Q2 | H1 | | (in million |
| | | | | | euro) |
| | | | | | H1 |
| | | | | +---------+-----+
|2015 revenue |2,103|2,439|4,542| |GBP ((2))| (26)|
| | | | | +---------+-----+
|Currency impact ((2)) | (20)| (85)|(105)| |USD ((2))| (1)|
| | | | | +---------+-----+
|2015 revenue at 2016 exchange rates (a)|2,083|2,354|4,437| |Others | (78)|
+---------------------------------------+-----+-----+-----+ +---------+-----+
|2016 revenue before impact |2,144|2,418|4,562| |Total |(105)|
|of acquisitions ((1)) (b) | | | | | | |
| | | | | +---------+-----+
|Revenue from acquisitions ((1)) | 147| 44| 191|
| | | | |
|2016 revenue |2,291|2,462|4,753|
| | | | |
|Organic growth (b/a) |+2.9%|+2.7%|+2.8%|
| | | | |
+---------------------------------------+-----+-----+-----+
(1) Acquisitions (Star Reacher, Sapient, B2B, Expicient, Practice iLeo Romania,
Relaxnews, C, Match Media, Domani, AKOM 360, TMC, Voden, 2DataFish, Frubis, The
Solution Group, Glickman, TCC, First Click, August Media, Langland, PDI,
MercerBell, Vertiba, Seven Seconds, Insight Redéfini, Venus Communications), net
of disposals.
(2) EUR = USD 1.116 in H1 2016 vs. USD 1.115 in H1 2015
EUR = GBP 0.779 in H1 2016 vs. GBP 0.732 in H1 2015
New Business : Main wins of H1 2016
Volkswagen (China), Mondelez gum & candy (China), Wetherm (Greater China),
Marubi (Greater China), Snapdeal (India), Yakult (Brazil), Carrefour (Brazil),
Wine (Brazil), Movida (Brazil), Cadillac (USA), P&G Dish (USA), Acer Global
(South Africa), Morrisons (UK), P&G (UK), Nestlé (UK), Belimo (Switzerland),
Duracell International (Poland), Samsung / Brown Goods (Poland), Mlekpol
(Poland), Experian (UK), Asda (UK), Netflix (USA), Macy's (USA), Marubi (China),
BAIC international (China), L'Oréal (China), Petco (China), Health Promotion
Board (Singapore), Snapdeal (India), Yakult (Brazil), Carrefour (Brazil), WINE
(Brazil), Lactalis (Brazil), Movida (Brazil), Ladbrokes (Australia), Walmart
(USA)
Shine Lawyers (Australia), Metricon Homes (Australia), EziBuy (Australia), AFL
(Australia), Crosby Texter (Australia), BMBS/Daimler (China), DBS
(Singapore/China/India), Shangri-La (China/Hong Kong), EDB (Ingapore), Urban
Clap (India), Gander Mountain (USA), Snapchat (USA), THE One (UAE/GCC), Lidl
(Denmark), ORCHESTRA (France), VTECH (France), FinexKap (France), Generali
(Switzerland), INLAC (Spain), Worten (Spain), Pepe Jeans (Spain), 4 Finance
(Poland), SAB Miller (Poland), OBI (Poland), Frisco (Poland), Nomad Foods
(Europe), Deutsche Bahn (Germany), Masmovil (Spain), Asda (UK), Anacor
Pharmaceuticals (USA), Discover (USA), Dole (USA), Groupon (USA), Motorola
(USA), SGM (China), Tmall/Alibaba (China), YouXin (China), Coca Cola (Russia),
The Study Group (Australia), DJI (Global), Aviva (Global), Air France (Global
SEO)
Mastercard (Australia), Sunsuper (Australia), Pinpoint (Australia), Angie's List
(USA), Time Inc. (USA), Whole Foods (USA), Travelers (USA), Cardinal Health
(USA), Genetech (USA), TransAmercia (USA),
J Jill (USA), Silicon (USA), Starbucks (USA), CSM Bakery (USA), Manulife
(Canada), Kering (UK), PGA Europe (UK), Congstar (Germany), Clinique Men (USA),
ABBVie (USA), HCA (UK), CBL & Associates Properties (USA), Michael Kors (USA),
Huawei (China), RBS (UK), Gallagher Bassett (USA), Cybersource (USA), UPS (USA),
Cigna (USA), Wakefern (USA), USC Shoah Foundation (USA), Kelloggs (UK), Under
Amour (USA), Sony (USA)
Acer (Indonesia), Electronic City (Indonesia), JDID (Indonesia), Scotiabank
(Chile), Histadrut (Israel), Arkia (Israel), Mediamarkt (Turkey), BSH Ikiakes
Syskeves A.B.E. (Greece), Nestlé (Greece), Newsphone Hellas (Greece), Dutch
Government (Netherlands), Meetic (Netherlands), Cortefiel (Belgium), MCM
(Belgium), NortSails (Belgium), Teva (Belgium), Walmart (Guatemala)
H1 2016 press releases
13-01-2016 Publicis Communications Announces Priorities & Key Appointments
28-01-2016 Leadership change at Leo Burnett Worldwide
11-02-2016 2015 annual results
03-03-2016 Publicis.Sapient acquires Vertiba, a Salesforce Gold Consulting
Partner
10-03-2016 MSL acquires Venus Communications Ltd in Vietnam
10-03-2016 Publicis Media Unfolds Its Organisation Powered by Four Global
Brands - Starcom, Zenith, Mediavest | Spark, and Optimedia | Blue 449
17-03-2016 Publicis Groupe Partners with The Troyka Group in Nigeria
24-03-2016 Publicis Groupe Launches Sapient Inside: The Combined Power of
Publicis Communications and the Publicis.Sapient Platform
31-03-2016 Publicis Groupe Named the Most Attractive Employer in the
Services Sector by the Randstad Awards
31-03-2016 Publicis One Announces its Global and Regional Leadership
21-04-2016 Q1 2016 revenue
28-04-2016 Publicis One announces its local leadership in Philippines
18-05-2016 Publicis Media announces leadership in France
25-05-2016 Combined General Shareholders' Meeting
01-06-2016 Publicis Groupe announces Chief Revenue Officer's sabbatical to
deal with family issue. Laura Desmond to return January 1, 2017
01-06-2016 Decision by JCDecaux to abandon its proposed acquisition of 67%
of the Metrobus share capital held by Publicis Groupe
07-06-2016 ANA Report: Publicis Groupe Statement
13-06-2016 Agreement with Samsung to end the discussions regarding a
possible investment in Cheil Wordwide alongside associated collaboration
Definitions
EBITDA: operating margin before depreciation.
Operating margin: Revenue after personnel costs, other operating expenses (excl.
non-current income and expense) and depreciation (excl. amortization of
intangibles arising on acquisitions).
Operating margin rate: Operating margin as a percentage of revenue.
Headline Group Net Income: Group net income after elimination of impairment
charges, amortization of intangibles arising from acquisitions, main capital
gains (or losses) on disposals and revaluation of earn-out payments
EPS (Earnings per share): Group net income divided by average number of shares,
not diluted.
EPS, diluted (Earnings per share, diluted): Group net income divided by average
number of shares, diluted.
Headline EPS, diluted (Headline Earnings per share, diluted): Group net income
after elimination of impairment charges, amortization of intangibles arising
from acquisitions, main capital gains (or losses) on disposals and revaluation
of earn-out payments, divided by average number of shares, diluted.
Capex: Net acquisitions of tangible and intangible assets, excluding financial
investments and other financial assets.
ROCE (Return On Capital Employed): Operating Margin after Tax (using Effective
Tax Rate) / Average employed capital. Capital employed include Saatchi & Saatchi
goodwill which is not recognised in consolidated accounts under IFRS.
Net Debt (or financial net debt): Sum of long and short financial debt and
associated derivatives, net of treasury and cash equivalents.
Average net debt: Average of monthly net debt at end of month.
Dividend pay-out: Dividend per share / EPS.
Consolidated income statement
30 December
(in millions of Notes June 30, 2016 June 30, 2015 31, 2015
euros) (6 months) (6 months) (12 months)
6 months
Revenue 4,753 4,542 9,601
Personnel expenses 3 (3,071) (2,944) (5,988)
Other operating expenses (978) (923) (1,952)
Operating margin before
depreciation and 704 675 1,661
amortization
Depreciation and
amortization expense 4 (85) (86) (174)
(excluding intangibles
arising from acquisitions)
Operating margin 619 589 1,487
Amortization of intangibles 4 (40) (43) (89)
arising from acquisitions
Impairment 4 - - (28)
Non-current income and 5 16 8 8
expenses
Operating income 595 554 1,378
Financial expenses (54) (56) (109)
Financial income 15 16 35
Cost of net financial debt 6 (39) (40) (74)
Other financial income and 6 (11) 7 (15)
expenses
Pre-tax income of 545 521 1,289
consolidated companies
Income taxes 7 (162) (159) (386)
Net income of consolidated 383 362 903
companies
Share of profit of 10 2 3 8
associates
Net income 385 365 911
Of which:
- Net income attributable to 4 2 10
non-controlling interests
Net income attributable to
equity holders of the parent 381 363 901
company
-------------------------------------------------------------------------------
Per share data (in euros) - Net income
attributable 8
to equity holders of the parent company
Number of shares 221,728,433 224,245,793 222,677,137
Earnings per share 1.72 1.62 4.05
Number of diluted shares 224,617,656 228,586,966 226,018,018
Diluted earnings per share 1.70 1.59 3.99
-------------------------------------------------------------------------------
Consolidated statement of comprehensive income
June 30, 2016 June December 31, 2015
(in millions of euros) (6 months) 30, 2015 (12 months)
(6 months)
-------------------------------------------------------------------------------
Net income for the period (a) 385 365 911
Comprehensive income that will
not be reclassified to income
statement
- Actuarial gains (and losses) (48) 26 4
on defined benefit plans
- Deferred taxes on
comprehensive income that will 15 (7) (1)
not be reclassified to income
statement
Comprehensive income that may be
reclassified to income statement
- Revaluation of available-for-
sale investments and hedging (11) 10 5
instruments
- Consolidation translation (67) 218 156
adjustments
- Deferred taxes on
comprehensive income that may be - - -
reclassified to income statement
Total other comprehensive income (111) 247 164
(b)
Total comprehensive income for 274 612 1,075
the period (a) + (b)
Of which:
- Total comprehensive income
attributable to non-controlling 4 4 13
interests
- Total comprehensive income
attributable to equity holders 270 608 1,062
of the parent company
-------------------------------------------------------------------------------
Consolidated balance sheet
(in millions of euros) Notes June 30, 2016 December 31, 2015
---------------------------------------------------------------------------
Assets
Goodwill, net 9 10,115 10,211
Intangible assets, net 1,473 1,541
Property, plant and equipment, net 626 660
Deferred tax assets 173 159
Investments in associates 10 128 116
Other financial assets 11 178 174
Non-current assets 12,693 12,861
Inventories and work in progress
479 411
Trade receivables 9,198 9,733
Other current receivables and assets 728 769
Cash and cash equivalents 1,064 1,672
Current assets 11,469 12,585
Total assets 24,162 25,446
-------------------------------------------------------------------------------
Equity and liabilities
Share capital 89 89
Additional paid-in capital and retained earnings, Group share 6,406 6,467
Equity attributable to holders of the parent company 12 6,495 6,556
Non-controlling interests 19 27
Total equity 6,514 6,583
Long-term borrowings 14
2,996 3,086
Deferred tax liabilities 636 658
Long-term provisions 13 575 527
Non-current liabilities 4,207 4,271
Trade payables
10,316 11,766
Short-term borrowings 14 436 305
Income taxes payable 87 110
Short-term provisions 13 145 162
Other creditors and current liabilities 2,457 2,249
Current liabilities 13,441 14,592
Total equity and liabilities 24,162 25,446
Consolidated statement of cash flows
(in millions of euros) June 30, 2016 June 30, 2015 December 31, 2015
(6 months) (6 months) (12 months)
Cash flows from operating
activities
Net income 385 365 911
Neutralization of non-cash
income and expenses:
Income taxes 162 159 386
Cost of net financial debt 39 33 74
Capital (gains) losses on (16) (11) (7)
disposals (before tax)
Depreciation, amortization and
impairment on property, plant 125 129 291
and equipment and intangible
assets
Non-cash expenses on stock 19 16 38
options and similar items
Other non-cash income and 15 6 19
expenses
Share of profit of associates (2) (3) (8)
Dividends received from - 1 2
associates
Taxes paid (79) (136) (303)
Interest paid (22) (36) (114)
Interest received 10 18 37
Change in working capital (1,102) (814) 79
requirements((1))
Net cash flows generated by
(used in) operating activities (466) (273) 1,405
(I)
Cash flows from investing
activities
Purchases of property, plant
and equipment and intangible (73) (84) (231)
assets
Disposals of property, plant
and equipment and intangible 1 1 2
assets
Purchases of investments and (2) (4) (18)
other financial assets, net
Acquisitions of subsidiaries (129) (3,070) (3,265)
Disposals of subsidiaries 11 2 3
Net cash flows generated by
(used in) investing activities (192) (3,155) (3,509)
(II)
Cash flows from financing
activities
Dividends paid to holders of - - (240)
the parent company
Dividends paid to non- (16) (7) (18)
controlling interests
Proceeds from borrowings 61 1,866 1,453
Repayment of borrowings (1) (259) (265)
Net purchases of non- (30) (27) (33)
controlling interests
Net (purchases)/sales of 8 (450) (441)
treasury shares and equity
warrants
Net cash flows generated by
(used in) financing activities 22 1,123 456
(III)
Impact of exchange rate 19 156 169
fluctuations (IV)
Change in consolidated cash (617) (2,149) (1,479)
and cash equivalents (I + II +
III + IV)
Cash and cash equivalents on 1,672 3,158 3,158
January 1
Bank overdrafts on January 1 (19) (26) (26)
Net cash and cash equivalents 1,653 3,132 3,132
at beginning of period (V)
Cash and cash equivalents at 1,064 1,090 1,672
closing date
Bank overdrafts at closing (28) (107) (19)
date
Net cash and cash equivalents 1,036 983 1,653
at closing date (VI)
Change in consolidated cash (617) (2,149) (1,479)
and cash equivalents (VI - V)
(1) Breakdown of change in
working capital requirements
Change in inventory and work (74) (90) (65)
in progress
Change in accounts receivable 325 398 (1,311)
and other receivables
Change in accounts payable, (1,353) (1,122) 1,455
other payables and provisions
Change in working capital (1,102) (814) 79
requirements
Consolidated statement of changes in equity
Reserves Equity
Number of Share Additional and Translation Fair attributable Non-
outstanding (in millions of capital paid-in earnings reserve value to the controlling Total
shares euros) capital brought reserve holders of interests equity
forward the parent
company
221,323,901 January 1, 2016 89 3,252 2,938 155 122 6,556 27 6,583
Net income 381 381 4 385
Other
comprehensive (67) (44) (111) - (111)
income, net of
tax
-------------------------------------------------------------------------------------------------
Total
comprehensive 381 (67) (44) 270 4 274
income for the
period
-------------------------------------------------------------------------------------------------
Dividends (356) (356) (16) (372)
Share-based
462,580 compensation, 19 19 19
net of tax
Effect of
acquisitions
and commitments (2) (2) 4 2
to buy-out non-
controlling
interests
85,762 Equity warrant 3 3 3
exercise
320,702 Purchases/sales 5 5 5
of treasury
shares
222,192,945 June 30, 2016 89 3,255 2,985 88 78 6,495 19 6,514
Reserves Equity
Number of Share Additional and Translation Fair attributable Non
outstanding (in millions of capital paid-in earnings reserve value to the -controlling Total
shares euros) capital brought reserve holders of interests equity
forward the parent
company
213,308,491 January 1, 2015 88 3,236 2,646 3 113 6,086 29 6,115
Net income 363 363 2 365
Other
comprehensive 216 29 245 2 247
income, net of
tax
------------------------------------------
Unternehmensinformation / Kurzprofil:
Datum: 21.07.2016 - 07:39 Uhr
Sprache: Deutsch
News-ID 484503
Anzahl Zeichen: 65606
contact information:
Town:
Paris
Kategorie:
Business News
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