Publicis Groupe : First Quarter 2017 Revenue

(Thomson Reuters ONE) -


First Quarter 2017 Revenue

April 20, 2017


+--------------------------------------------------+
|     |
| |
| * Revenue ?2,328 million |
| |
| * Reported growth +1.6% |
| |
| * Growth at constant currency -0.6% |
| |
| * Organic growth -1.2% |
| |
|     |
+--------------------------------------------------+



Maurice Lévy, Chairman and CEO of Publicis Groupe:

"Our first quarter figures send out faint but encouraging signals as to the
Groupe's situation.  Although organic growth is slightly negative at -1.2%, this
is an improvement on the fourth quarter of 2016.

We expect Q2 to remain in negative territory, but to show an improvement
compared with the first quarter.

To measure performance adequately, organic growth needs to be put into
perspective alongside the impact of past difficulties.  Contribution of account
wins to Q1 revenue illustrates a positive momentum.

This momentum is encouraging in many respects: the implementation of The Power
of One is generating positive feedback from clients; over 60 GCLs and CCLs
(Groupe Client Leaders and Country Client Leaders) have been appointed;
Razorfish has been combined with SapientNitro to form SapientRazorfish, a merger
that is well under way with new teams appointed and simplification progressing.
As a result, notable progress has been made in terms of new business.

Instability continues to prevail in the international environment, causing
companies to proceed with great caution despite strong balance sheets.  Changes
in the field of technology, in consumer behavior and in the media landscape have
led companies to question their business models and marketing strategies.  Our
recent successes show that our investment in Sapient, our own business model,
which has been influenced by innovation and our understanding of advertisers
needs have put us in a strong position to help our clients overcome these
difficult obstacles.  Moreover, Publicis has been substantially transformed to
enable us to provide our clients with even better "end-to-end" service in
business transformation.

I am all the more confident since we have also announced Publicis Groupe's
upcoming change of governance with Arthur Sadoun appointed CEO & Chairman of a
Management Board which will be reinforced by the addition of Steve King to the
Management Board currently comprised of with Jean-Michel Etienne and Anne-
Gabrielle Heilbronner.  I am very happy about the arrangement we have chosen,
especially as this was the solution I advocated before the Nominations Committee
and the Supervisory Board.

As for myself, this results from Madame Badinter's request, approved by the
Supervisory Board.  Should the shareholders so decide, I will become Chairman of
the Supervisory Board to play an active part in the consolidating of our
clients, providing support to our teams when and where I am needed.

The second half of 2017 should see the Groupe posting a more usual level of
growth and I have every confidence in our ability to achieve our 2018
objectives.  The cash we generate enables us to improve the return to
shareholders while managing our debt responsibly."


1 - Q1 2017 REVENUE

Publicis Groupe's consolidated revenue in Q1 2017 was 2,328 million euro, up
1.6% from 2,291 million euro in 2016.  Exchange rates had a positive impact of
50 million euro, i.e. the equivalent of 2.2% of Q1 2016 revenue. Net
acquisitions contributed 14 million euro to revenue in Q1 2017, i.e. the
equivalent of 0.6% of Q1 2016 revenue.  Growth at constant exchange rates was
-0.6%.

Organic growth stood at -1.2% in the first quarter of 2017. It was adversely
affected by more than 400 basis points due to past issues.  Organic growth in Q1
2017 continued to be affected by the weakness of the FMCG sector.  Conversely,
it benefited from the continued growth of accounts awarded since Q2 2016, in
particular those of Walmart, HPE, USAA and Asda.




Breakdown of Q1 2017 revenue by region

----------------------------------------------------------------
EUR Revenue Organic Reported
---------------------
Million Q1 2017 Q1 2016 growth growth
----------------------------------------------------------------
Europe 655 631 +5.5% +3.8%

North America 1,291 1,301 -5.0% -0.8%

Asia Pacific 243 230 +0.8% +5.7%

Latin America 77 71 +4.5% +8.5%

Middle East & Africa 62 58 +1.5% +6.9%
----------------------------------------------------------------
Total 2,328 2,291 -1.2% +1.6%
----------------------------------------------------------------

Europe recorded growth of 3.8%. When the impact of acquisitions and exchange
rates is factored out, organic growth stands at +5.5%. It is worth highlighting
the good performance in France (+11.9%) and the dynamism of the UK and Italy
(respectively +9.1% and +6.3%). Nonetheless, Germany was down 3.6% due to
unfavorable basis of comparison. The situation has been recovering in Russia
with a 20.4% growth.

North America returned a revenue decline of 0.8% while recording organic growth
of -5.0% due to the impact of past issues, at a time when new projects had not
yet ramped up to their full potential.

Asia Pacific reported growth of 5.7% (0.8% on an organic basis). China was up
2.6%. Activity in Singapore went up 7.3%. In India, we are consolidating our
activity: after posting an increase of almost 9% in the first quarter of 2016,
growth was 0.4% during the first three months of 2017.

Latin America grew its revenue by 8.5% partly due to exchange rates as organic
growth for the region was 4.5%. Activities in Brazil went down 1.7% and Mexico
sustained a strong growth rate (+25.7%).

The Middle East & Africa reported growth of 6.9% (1.5% on an organic basis).

Breakdown of Q1 2017 revenue by region: Digital & Tech and Analog

------------------------------------------------------------------------------
  Europe North Asia Latin Middle East Total
America Pacific America & Africa
------------------------------------------------------------------------------
Digital & Tech +4.8% -5.3% +9.4% +13.0% +38.8% -1.3%
------------------------------------------------------------------------------
Analog +6.2% -4.5% -4.3% +2.9%   -8.9% -1.1%
------------------------------------------------------------------------------
Total +5.5% -5.0% +0.8% +4.5%  +1.5% -1.2%
------------------------------------------------------------------------------

Digital & Tech's contribution to total revenue rose 1.4% to 1,273 million euro.
Digital & Tech accounts for 55% of the Groupe's revenue.


2 - NET DEBT

At March 31, 2017, net debt amounted to 2,339 million euro, compared with 1,244
million euro at December 31, 2016. The Groupe's average net debt at March
31, 2017 was 1,677 million euro, down 19.8% in twelve months by comparison with
its average net debt of 2,092 million euro at March 31, 2016.


3 - HIGHLIGHTS OF THE FIRST QUARTER 2017

3.1 - Governance

Maurice Levy's succession plan as CEO & Chairman of the Management Board was
announced on January 26, 2017.

From June 1, 2017, Arthur Sadoun will take on the role of CEO & Chairman of the
Management Board. Steve King, CEO of Publicis Media will also join the
Management Board, alongside current members Jean-Michel Etienne, Executive Vice-
President and CFO, and Anne-Gabrielle Heilbronner, Secretary General.

To continue to develop the Groupe, the Management Board will be able to count on
the collaboration of top quality leaders, Alan Wexler and Chip Register of
Publicis.Sapient, Nick Colucci of Publicis Health, Jarek Ziebinski of Publicis
One, as well as Rishad Tobaccowala, Publicis Groupe's Strategy & Growth Officer,
in the field of strategy and the client-centric approach.

The Supervisory Board has proposed that, upon completion of his current term of
office, Maurice Lévy join its ranks as Chairman.  This motion will be put to a
vote before the shareholders at their AGM on May 31, 2017.

3.2 - Acquisition

In January 2017, Publicis Communications acquired two companies: The Abundancy
and Ardent. These agencies will add to Leo Burnett's growing arsenal of data,
creative and technology capabilities. Ardent provides proprietary technology
that uses search data to understand behavior and predict consumer intent, and
The Abundancy applies these learnings to inform custom content. Together, they
count sixty employees who have joined the Leo Burnett team, now under the
leadership of Andrew Swinand in the US.


4 - OUTLOOK

The implementation of One Company and the transformation from a "holding" to a
"connecting" company are taking place according to the announced plan, with
excellent feedback from clients regarding the new Power of One offering.  Recent
successes in client retention (GMC, Mars) as well as client and budget wins
(Walmart, HPE, USAA, and HSBC) and re-gains (Kellog's Special K) are promising
signs that Publicis Groupe is ready to resume its growth.

As announced, the second quarter of 2017 will remain affected by past issues,
and new accounts momentum should allow the return to a more satisfactory organic
growth rate in the second half of 2017. Thus the 2018 plan should materialize as
expected.

The One Company concept ("no silo, no solo") developed by Publicis Groupe seems
to be setting a trend, as well as the end-to-end approach from consulting to
creativity through technology.  Publicis Groupe's lead should be favorable in
the quarters to come.



*         *
*
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. These forward-looking statements and forecasts 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 Registration Documents filed with the French Autorité des Marchés
Financiers (AMF) and which is available on the website of Publicis Groupe
(www.publicisgroupe.com), including an unfavorable 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, 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, driven through the alchemy
of creativity and technology. Publicis Groupe offers its clients seamless access
to its tools and expertise through modular offering. Publicis Groupe is
organized across four Solutions hubs: Publicis Communications (Publicis
Worldwide, Saatchi & Saatchi, Leo Burnett, BBH, Marcel, Fallon, MSL,
Prodigious), Publicis Media (Starcom, Zenith, Mediavest | Spark, Blue 449,
Performics), Publicis.Sapient (SapientRazorfish, DigitasLBi, Sapient Consulting)
and Publicis Health. These 4 Solution hubs operate across principal markets, and
are carried across all others by Publicis One, a fully integrated service
offering bringing together the Groupe's expertise 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 currency in Q1 |
| (in million euros) | Q1 | | 2017 |
| | | | (in million euros) |
| | | +---------+-----------------+
|2016 revenue |2,291| |GBP ((2))| (21)|
| | | +---------+-----------------+
|Currency impact ((2)) | 50| |USD ((2))| 44|
| | | +---------+-----------------+
|2016 revenue at 2017 exchange rates (a) |2,341| |Others | 27|
+------------------------------------------+-----+ +---------+-----------------+
|2017 revenue before impact of acquisitions|2,314| |Total | 50|
|((1)) (b) | | | | |
| | | +---------+-----------------+
|Revenue from acquisitions ((1)) | 14|
| | |
|2017 revenue |2,328|
| | |
|Organic growth (b/a) |-1.2%|
| | |
+------------------------------------------+-----+

(1) Acquisitions (MercerBell, Vertiba, Seven Seconds, Insight Redéfini, Venus
Communications, Arcade, Digitouch, PT Publicis Metro Indonesia, PT Indonesia
Media Exchange, North Notch, Metadesign, Regicom, Ardent, The Abundancy), net of
disposals.

(2) EUR = USD 1.065 at end March 2017 vs. USD 1.103 at end March 2016
EUR = GBP 0.860 at end March 2017 vs. GBP 0.771 at end March 2016






New Business : Main wins at end March 2017


Bradesco (Brazil), Petrobras (Brazil), eBay (France), Nokia (South Africa), Uber
(Singapore), Singtel (Singapore), Marriott (USA), SNHU (USA), Chromebook (USA),
Truecaller (Sweden)

Aldi Stores (Australia), Ego (Australia), Southern Cross Travel Insurance
(Australia), Fiat Chrysler Automobiles (EMEA / APAC), KFC Corporation (USA),
Lowes (USA), Mattel (USA), MolsonCoors (USA & UK), Le Groupe Bel (Global), Merck
(Global), Singapore Tourism Board (Global)

Mattel (USA), Carnival Corporation (USA), FirstNet / AT&T Gov't Solutions (USA)


OCBC (Malaysia), Reckitt Beckenzier (Malaysia), 20th Fox Century (Malaysia),
Ikea (Malaysia), BEL (Czech Republic), Societe Generale (Serbia), P&G
(Netherlands), FCA (Netherlands), ABINVEB (Colombia)






2017 press releases


09-01-2017        Publicis Communications: Appointment at Leo Burnett USA and
two acquisitions in digital

11-01-2017        Publicis Communications: Appointment at Saatchi & Saatchi;
Robert Senior leaves the Groupe

18-01-2017        Publicis One: Appointment in Japan

19-01-2017        Publicis One: Appointment in Turkey

26-01-2017        Governance announcement at Publicis Groupe

01-02-2017        Publicis Communications: Appointment for the Nordics region

03-02-2017        Publicis.Sapient: Appointment at DigitasLBi; Luke Taylor
leaves the Groupe

07-02-2017        Appointment of Laurent Carozzi as Publicis Groupe's Chief
Performance Officer

09-02-2017        2016 annual results

21-02-2017        Viva Technology: 2(nd) edition on June 15-17, 2017

13-03-2017        Share Repurchase Agreement

16-03-2017        Publicis.Sapient: launch of SapientRazorfish's integrated
offering

22-03-2017        Partnership between Publicis Groupe and Microsoft





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 / Headline diluted EPS.




press release:
http://hugin.info/156954/R/2096951/793564.pdf



This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Publicis Groupe via GlobeNewswire

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