Publicis Groupe: First Half 2017 Results
(Thomson Reuters ONE) -
First Half 2017 Results
July 20, 2017
1(st) half 2017 results
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| |
| |
| * (EUR million) H1 2017 2017 vs 2016 |
| |
| * Revenue 4,843 +1.9% |
| |
| * Organic growth -0.2% |
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| * Operating margin 638 +3.1% |
| |
| * Operating margin rate 13.2% |
| |
| * Net income attributable to the Groupe 387 +1.6% |
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| * Headline EPS, diluted (euro) ((1)) 1.89 +4.4% |
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| * Free cash flow before changes in WCR 594 +5.3% |
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| |
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(1) After elimination of impairment charges, amortization of intangibles
arising from acquisitions, main capital gains (losses) on disposals and revalued
earn-out payments
Q2 2017
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| * Revenue 2,515 |
| |
| * Reported growth +2.2% |
| |
| * Growth at constant exchange rates +1.1% |
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| * Organic growth +0.8% |
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| |
+-----------------------------------------------+
Arthur Sadoun, CEO and Chairman of the Management Board:
"Launched 18 months ago, The Power of One has been one of the boldest moves the
Groupe has made. Maurice Lévy has been the architect and has designed it. We
are now moving to the next stage. The first 6 months of 2017 were particularly
dense, as we modified our governance, defined our action plan and brought
together the teams responsible for taking The Power of One to new heights.
Thanks to our capabilities in consulting, creativity, media and technology,
Publicis Groupe is in a unique position to help transform and grow our clients'
businesses, through big ideas.
We have one objective: become the market leader of marketing and business
transformation. This means being recognized as the indispensable partner of our
clients in their transformation. To achieve this ambition, we need to
accelerate in execution and go deeper in integration. We have set 4 priorities
for the months to come: make our model a reality for all of our clients,
leverage our competitive advantage in technology and consulting, simplify our
organizational structures for greater efficiency; design a culture that attracts
and retains the best talents.
Improving organic growth is our number one imperative. This is because organic
growth is the key metric of the industry, it is the demonstration of our
attractiveness in the market, it is the demonstration that we are competitive
and that our model is both built on our clients' needs and sustainable. Organic
growth is required to attract and retain the best talent on the market. And
obviously it has to come with greater efficiency. This is vital, as we must
remain competitive for our clients and invest in our talents.
We have the right strategy. Our first half results are encouraging. Thanks to
the good account win momentum over the last 12 months, resulting directly from
The Power of One, organic growth exceeded our own expectations in the second
quarter at +0.8% with the US returning to positive territory, and margin
improved by 20 basis points in a low growth context.
When it comes to the outlook for the year, we expect the sequential improvement
in organic growth to continue in third quarter. And we should return to a
growth rate comparable with peers in the second half of the year. For the
longer term, my goals are clear: accelerate growth and increase efficiency. We
are at the beginning of implementing an action plan with our new governing
bodies and we will come back in an articulate and concrete way in the coming
months."
Publicis Groupe's Supervisory Board met on July 19, 2017, under the chairmanship
of Maurice Lévy, to examine the half-yearly accounts at June 30, 2017, presented
by Arthur Sadoun, Chairman of the Management Board and Chief Executive Officer.
KEY FIGURES
-------------------------------------------------------------------------------
EUR million, except percentages and per share date H1 2017 H1 2016 2017
(in euro) vs. 2016
-------------------------------------------------------------------------------
Revenue 4,843 4,753 +1.9%
Operating margin before Depreciation & Amortization 719 704
% of revenue 14.8% 14.8%
Operating margin 638 619 +3.1%
% of revenue 13.2% 13.0%
Operating income 604 595 +1.5%
Net income attributable to the Groupe 387 381 +1.6%
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Headline EPS, diluted ((1)) 1.89 1.81 +4,4%
-------------------------------------------------------------------------------
Free cash flow before changes in working capital 594 564 +5,3%
requirements
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(1) after elimination of impairment charges, amortization of intangibles
arising from acquisitions, main capital gains (losses) on disposals and revalued
earn-out payments
Q2 2017 REVENUE
Publicis Groupe's consolidated revenue for the second quarter of 2017 was 2,515
million euro, up 2.2% from 2,462 million euro in Q2 2016. Exchange rates had a
26-million euro positive impact, i.e. 1.1% of revenue in Q2 2016. Net
acquisitions contributed 8 million euro in Q2 2017, i.e. 0.3% of the revenue
reported in Q2 2016. Growth at constant exchange rates was +1.1%.
Organic growth was +0.8% in Q2, a slight improvement on the -1.2% organic growth
recorded in Q1 thanks to the lesser impact of residual difficulties and the good
performance registered in North America. In Q2 2017, while organic growth
continued to be hampered by the weak FMCG sector, it benefited nonetheless from
the growing contributions of account wins since Q2 2016 (particularly Walmart,
HPE, USAA, Asda, Motorola and Lowe's).
Breakdown of Q2 revenue by region
---------------------------------------------------------------
EUR Revenue Organic Reported
---------------------
million Q2 2017 Q2 2016 growth growth
---------------------------------------------------------------
Europe 722 718 +3.2% +0.6%
North America 1,353 1,319 +0.2% +2.6%
Asia Pacific 268 273 -3.3% -1.8%
Latin America 97 81 +2.8% +19.8%
Middle East & Africa 75 71 +0.2% +5.6%
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Total 2,515 2,462 +0.8% +2.2%
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H1 2017 REVENUE
For the first half-year, Publicis Groupe's consolidated revenue amounted to
4,843 million euro, up 1.9% from 4,753 million for the corresponding period in
2016. Exchange rates had a 76-million euro positive impact, i.e. the equivalent
of 1.6% of revenue in H1 2016. Net acquisitions contributed 22 million euro to
revenue in H1 2017, i.e. 0.5% of revenue in H1 2016. Growth at constant
exchange rates was +0.3%.
Organic growth was -0.2% in the first half year 2017, bearing in mind that the
impact of previous difficulties was around 300 basis points.
Breakdown of H1 2017 revenue by region
---------------------------------------------------------------
EUR Revenue Organic Reported
---------------------
million H1 2017 H1 2016 growth growth
---------------------------------------------------------------
Europe 1,377 1,349 +4.3% +2.1%
North America 2,644 2,620 -2.4% +0.9%
Asia Pacific 511 503 -1.4% +1.6%
Latin America 174 152 +3.5% +14.5%
Middle East & Africa 137 129 +0.8% +6.2%
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Total 4,843 4,753 -0.2% +1.9%
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Europe grew by 2.1%. When the impact of acquisitions and exchange rates is
factored out, organic growth was +4.3%. France performed well at +6.2%, while
the UK and Italy posted strong momentum at +7.8% and +10.5% respectively.
Germany recorded negative growth of -2.1% against a very difficult comparable
basis.
Organic growth in North America was back in positive territory in the second
quarter (+0.2%) due to the ramp-up of accounts awarded since the summer of
2016. For the first six months of 2017, organic growth remained negative at
-2.4% as a result of past issues and at a time when more recent accounts have
yet to build up to cruising speed. Revenue was up 0.9% on a reported basis.
Asia Pacific reported positive growth of +1.6% despite organic growth of -1.4%.
China fell 6.9% as a result of difficulties encountered by certain entities.
Singapore was up 6.2% while business is consolidating in India (+0.4% in Q1
followed by +6.4% in Q2).
Latin America reported +14.5% and organic growth of +3.5%. Brazil improved by
1.0% and Mexico continued its strong growth trend at +14.7%.
The Middle East & Africa region reported +6.2% and organic growth of 0.8%.
ANALYSIS OF THE KEY FIGURES
Income statement
The Operating margin before depreciation and amortization was 719 million euro
at June 30, 2017, up 2.1% from 704 million euro in 2016, i.e. a percentage
margin of 14.8% of revenue, unchanged from the first half of 2016.
- Personnel costs amounted to 3,095 million euro at June 30, 2017, up 0.8%
from 3,071 million euro the previous year. Fixed personnel costs of 2,740
million euro represented 56.6% of total revenue, up from 56.3% in 2016.
Freelance costs totaled 199 million euro in H1 2017, down from 219 million in
2016. Restructuring costs stood at 52 million euro in H1 2017 (55 million euro
in 2016) as the Groupe reorganizes around The Power of One which increasingly
integrates structures and activities. Operational efficiency will be enhanced
by the various projects in which the Groupe continues to invest (ERP roll-out,
the development of production platforms, on-going regionalization of the Shared
Services Centers, as well as a number of technological developments).
- Other operating costs (excluding Depreciation & amortization) amounted to
1,029 million euro versus 978 million euro in H1 2016. These costs
represented 21.2% of consolidated revenue (versus 20.6 % in H1 2016).
Depreciation & amortization for the first half-year was 81 million euro, down
slightly from 85 million in H1 2016.
The Operating margin rose 3.1% to 638 million euro, i.e. a percentage operating
margin of 13.2% (up 20 basis points on 2016). This improvement was achieved by
cost savings thanks to the implementation of Power of One which were partly
offset by investments in new contracts, new IT projects and higher other
operating expenses.
The operating margin by region was 13.7% in Europe, 14.1% in North America,
11.9% in Asia Pacific, 5.7% in Latin America and 4.4% in the Middle East &
Africa region.
Amortization of intangibles arising from acquisitions totaled 35 million euro at
June 30, 2017, after 40 million euro for the corresponding period in 2016.
Other non-recurring income (expenses) for the period amounted to income of 1
million euro, compared with income of 16 million euro in H1 2016.
Operating income totaled 604 million euro in H1 2017, up 1.5% from 595 million
euro in H1 2016.
Financial income (expense) - not including the revaluation of earn-out costs -
amounted to an expense of 38 million euro over the first six months of
2017, after an expense of 40 million euro for the corresponding period in 2016.
The cost of net debt was 32 million euro at June 30, 2017, down slightly from
39 million euro in 2016. Other financial income and expenses amounted to a net
expense of 6 million euro in the first half of 2017, compared with a net expense
of 1 million euro in 2016.
The revaluation of earn-out costs was an expense of 22 million euro (versus 10
million in 2016).
Income tax in H1 2017 was 151 million euro (i.e. an effective tax rate of
27.8%), after 162 million euro in H1 2016 (i.e. an effective tax rate of
29.7%). Over the full year 2016, the effective tax rate was 29.0%.
The Associates' share of profit was a negative 2 million euro in H1 2017,
compared with a positive 2 million in 2016. Minority interests totaled 4
million euro at June 30, 2017, i.e. at the same level as in H1 2016.
Overall, Net income attributable to the Groupe amounted to 387 million euro at
June 30, 2017, after 381 million euro at June 30, 2016.
Free cash flow
The Groupe's free cash flow before working capital requirements increased by
5.3% by comparison with the previous year to reach 594 million euro for the
first half of 2017.
Net debt
Net debt totaled 2,092 million euro at June 30, 2017 (i.e. a debt / equity ratio
of 0.37), after 1,244 million euro at year-end 2016 (when the gearing ratio was
0.21). At June 30, 2016, the gearing ratio was 0.38. The Groupe's average net
debt for the first half-year was 1,993 million euro, compared with an average of
2,380 million euro in H1 2016.
HIGHLIGHTS FROM THE FIRST HALF YEAR 2017
Governance and appointments
Since June 1, 2017, Arthur Sadoun has been CEO and Chairman of a Management
Board reinforced by the arrival of Steve King, the current CEO of Publicis
Media, who has teamed up with Jean-Michel Etienne, Executive Vice-President,
Group Chief Financial Officer, and Anne-Gabrielle Heilbronner, Secretary
General.
Véronique Weill has been appointed General Manager of Publicis Groupe. She will
take on her position as of September 1, 2017 and will be in charge of
Re:Sources, IT, real estate, insurance and M&A. Véronique spent 21 years with
J.P. Morgan, mainly in the USA, where she was in charge of operations and IT at
global level. She then joined Axa in 2006, where, as a member of the Management
Committee, she focused on operations, technology, digital, marketing and
innovation. As Axa's Chief Operating Officer and then Chief Customer Officer,
she helped make Axa one of the world's leading insurance brands.
Carla Serrano, CEO of Publicis New York and Chief Strategy Officer at Publicis
Communications, has been promoted to Chief Strategy Officer at Publicis Groupe.
Throughout her career, Carla has held strategic management positions in large
networks and creative agencies. Before joining Publicis, Carla Serrano was CEO
of Naked NA, CSO of TBWA Chiat/DAY NY and Chair at Berlin Cameron and Partners.
Publicis Groupe announced the creation of two new management committees in
addition to its Management Board (Directoire).
The first is known as the Executive Committee and is responsible for the
Groupe's transformation. It will meet every month and is comprised of the
following members, in addition to the members of the Management Board:
- Chip Register, Co-CEO, Publicis.Sapient
- Carla Serrano, Chief Strategy Officer, Publicis Groupe
- Nigel Vaz, President, DigitasLBi
- Véronique Weill, General Manager, Publicis Groupe
- Alan Wexler, Co-CEO, Publicis.Sapient
The second committee, the Management Committee, will meet every quarter and will
oversee Groupe operations and execution of its strategy. It is comprised of the
Executive Committee members plus the following:
- Valérie Beauchamp, EVP Business Development, Publicis Groupe
- Justin Billingsley, COO Publicis Communications
- Agathe Bousquet, Présidente France, Publicis Groupe (taking office from
September 1)
- Gerry Boyle, CEO APAC, Publicis Media
- Andrew Bruce, CEO North America, Publicis Communications
- Nick Colucci, CEO, Publicis Health
- Lisa Donohue, Global Brand President, Starcom
- Tim Jones, CEO North America, Publicis Media
- Loris Nold, COO Publicis Communications
- Rishad Tobaccowala, Chief Growth Officer, Publicis Groupe
- Alexandra Von Plato, Group President, Publicis Health
- Jarek Ziebinski, CEO, Publicis One
As submitted by the Supervisory Board, Maurice Lévy has become a member of the
Supervisory Board which he now chairs. This proposal was approved by the
shareholders at the Shareholders' meeting of May 31, 2017.
External growth
In January 2017, Publicis Communications acquired two digital agencies, namely
The Abundancy and Ardent. These agencies will add to Leo Burnett's arsenal of
data, creative and technological capabilities. Ardent provides proprietary
technology that uses search data to understand behavior and predict consumer
intent, while The Abundancy applies these learnings to inform custom content.
Together, these two agencies count 60 professionals who have now joined Leo
Burnett under newly appointed CEO Andrew Swinand in the USA.
Finance
On March 13, 2017, Publicis Groupe entered into a share buyback agreement with
an Investment Services Provider under the share buyback program authorized by
the Shareholders' meeting of May 25, 2016. The buyback period extended from
March 14 to June 30, 2017.
This agreement was capped at 5,000,000 shares at an average price not exceeding
the limits set by the Shareholders' meeting of May 25, 2016. Shares purchased
on the last two days in June were only settled and delivered at the start of
July, pursuant to stock market regulations. On June 30, 2017, the 4,878,002
treasury shares effectively delivered, and bought within this agreement for a
consideration of 316 million euro, had been purchased at an average of 64.66
euro per share (64.86 euro including tax on financial transactions).
OUTLOOK
The early part of 2017 has shown encouraging signs. Publicis Groupe returned to
positive growth in the second quarter and the operating margin has been improved
despite the backdrop of weak growth. The momentum of accounts won has been
good, including some prestigious wins such as HSBC, Bel and McDonald's.
The Groupe's top priority is to improve its organic growth and there are quite a
number of projects still on-going. Our ambition is to post higher growth than
our competitors by becoming the leader in marketing and operational
transformation. Four concrete measures have been taken for this purpose: make
our model a reality for all of our clients, leverage our competitive advantage
in technology and consulting, simplify our organizational structures for greater
efficiency; design a culture that attracts and retains the best talents.
We expect the sequential improvement in organic growth to continue in Q3. And
we should return to a growth rate comparable with peers in the second half of
the year. For the longer term, goals are identified: accelerate growth and
increase efficiency. The Groupe is at the beginning of implementing an action
plan with new governing bodies. A concrete and articulate update will be
provided in the coming months.
* *
*
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, Spark Foundry, 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 |
| (in million euro) | Q1 | Q2 | H1 | | currencies |
| | | | | | in H1 2017 |
| | | | | |(in million euro) |
| | | | | +---------+--------+
|2016 revenue |2,291|2,462|4,753| |GBP ((2))| (41)|
| | | | | +---------+--------+
|Currency impact ((2)) | 50| 26| 76| |USD ((2))| 78|
| | | | | +---------+--------+
|2016 revenue at 2017 exchange rates (a)|2,341|2,488|4,829| |Others | 39|
+---------------------------------------+-----+-----+-----+ +---------+--------+
|2017 revenue before impact of |2,314|2,507|4,821| |Total | 76|
|acquisitions ((1)) (b) | | | | | | |
| | | | | +---------+--------+
|Revenue from acquisitions ((1)) | 14| 8| 22|
| | | | |
|2017 revenue |2,328|2,515|4,843|
| | | | |
| | | | |
|Organic growth (b/a) |-1.2%|+0.8%|-0.2%|
| | | | |
+---------------------------------------+-----+-----+-----+
(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 1.082 at end June 2017 vs. USD 1.116 at end June 2016
EUR = GBP 0.860 at end June 2017 vs. GBP 0.779 at end June 2016
New Business: Main wins at end June 2017
Bradesco (Brazil), Petrobras (Brazil), eBay (France), Nokia (South Africa), Uber
(Singapore), Singtel (Singapore), Marriott (USA), SNHU (USA), Chromebook (USA),
Truecaller (Sweden), Match.com (Meetic) (Pan-Europe), Great West Life (Canada),
USAA (USA), AkzoNobel (Global), Culligan (water filtration/conditioning systems)
(USA)
20th Century Fox (Australia), Aldi Stores Limited (Australia), Coty Luxury
(Denmark), Ego (Australia), Expedia (Singapore), KFC (USA), Lowe's (USA), Mattel
(USA), Merck (EMEA), Molson Coors (USA & UK), NBCF (National Breast Cancer
Foundation) (USA), PartyPoker (Norway), Royal Caribbean Cruises (UK), Singapore
Tourism (Global), Southern Cross Travel Insurance (Australia), Bel Group
(Global), Carpetright (UK), CCU (Compania de las Cervecerias Unidas)
(Argentina), Coty Luxury (Norway), Credit Suisse Group (Italy), Danks Hardware
(Australia), Dubai Corporation for Tourism & Commerce Marketing (Middle East),
Euroloan Consumer Finance (Poland), Fondazione Ania (Italy), Grupa Allegro
(Poland), H&R Block (USA), JC Jeans & Clothes (Sweden), Kolonial.no (Norway),
Luminous Power Technologies (India), Materialgruppen AB Kimberly-Clark (Sweden),
P&G (UK), PayU India (India), Procter & Gamble (UK & Ireland), ZTE Mobile
(India)
Mattel (USA), Carnival Corporation (USA), FirstNet / AT&T Government Solutions
(USA), Lyft (USA), GSK (USA), The Nature Conservancy (USA), Intermarche (France)
OCBC (Malaysia), Reckitt Beckenzier (Malaysia), 20th Fox Century (Malaysia),
Ikea (Czech Republic), BEL (Czech Republic), l'Oréal (Czech Republic), Société
Générale (Serbia), P&G (The Nertherlands), FCA (The Nertherlands), Skoda (The
Nertherlands), Aldi (Belgium), Informazout (Belgium), ABinBEV (Colombia),
Renault (Argentina)
Novartis (USA), Genentech (USA), Shire (USA), Adapt (USA), AMAG (USA), Sunovion
(USA), Clinigen Group (Global), Purdue (USA), Merck & Co (USA), Intarcia
Therapeutics (USA), Flexion Therapeutics (USA), AbbVie (USA), Ipsen (USA)
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
18-04-2017 Appointment of Agathe Bousquet as President of the Groupe in
France
20-04-2017 Q1 2017 Revenue
09-05-2017 Publicis Groupe announces the appointment of Céline Fronval as
Groupe General Counsel
31-05-2017 Combined General Shareholders' Meeting
14-06-2017 Publicis Groupe Boosts Management Structure with Two Senior
Nominations and New Governing Bodies
19-06-2017 Publicis Groupe and Alibaba Announce China Uni Marketing
Partnership
20-06-2017 Publicis Groupe Builds the First Professional Assistant Platform
Powered by AI and Machine Learning
Définitions
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.
Free Cash Flow before changes in working capital requirements: Net cash flow
from operating activities before changes in WCR linked to operating activities.
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.
Consolidated income statement
30
June June December
(in millions of Notes 30, 2017 30, 2016 31, 2016
euros)
(6 months) (6 months) (12 months)
(6 months)
Revenue 4,843 4,753 9,733
Personnel expenses 3 (3,095) (3,071) (6,059)
Other operating expenses (1,029) (978) (1,992)
Operating margin before 719 704 1,682
depreciation and amortization
Depreciation and amortization
expense
4 (81) (85) (166)
(excluding intangibles from
acquisitions)
Operating Margin 638 619 1,516
(79)
Amortization of intangibles 4 (35) (40)
from acquisitions
Impairment 4 - - (1,440)
Non-current income and expenses 5
1 16 12
Operating income 604 595 9
Financial expenses
(54) (54) (107)
Financial income
22 15 33
Cost of net financial debt
6 (32) (39) (74)
Revaluation of earn-out
payments on acquisitions 6 (22) (10) (108)
Other financial income and 6 (6) (1) -
expenses
Pre-tax income of consolidated 544 545 (173)
companies
Income Taxes 7 (151) (162) (342)
Net income of consolidated 393 383 (515)
companies
Share of profit of associates 10 (2) 2 (5)
Net income 391 385 (520)
Of which:
- Net income attributable to 4 4 7
non-controlling interests
Net income attributable to
equity holders of the parent 387 381 (527)
company
-------------------------------------------------------------------------------
Per share data (in euros) - Net
income attributable
8
to equity holders of the parent
company
Number of shares 224,581,868 221,728,433 223,498,871
Earnings per share 1.72 1.72 (2.36)
Number of diluted shares 228,808,205 224,617,656 223,498,871
Diluted earnings per share 1.69 1.70 (2.36)
-------------------------------------------------------------------------------
Consolidated statement of comprehensive income
June 30, 2017 June 30, 2016 December 31, 2016
(in millions of euros)
(6 months) (6 months) (12 months)
--------------------------------------------------------------------------------
Net income for the period (a) 391 385 (520)
Comprehensive income that will
not be reclassified to income
statement
- Actuarial gains (and losses) 6 (48) (4)
on defined benefit plans
- Deferred taxes on
comprehensive income that will (18) 15 14
not be reclassified to income
statement
Comprehensive income that may be
reclassified to income statement
- Revaluation of available-for-
sale investments and hedging (20) (11) 31
instruments
- Consolidation translation (358) (67) 100
adjustments
Total other comprehensive income (390) (111) 141
(b)
Total comprehensive income for 1 274 (379)
the year (a) + (b)
Of which:
- Total comprehensive income
attributable to non-controlling
interests 2 4 7
- Total comprehensive income
attributable to equity holders
of the parent company (1) 270 (386)
--------------------------------------------------------------------------------
Consolidated balance sheet
Notes June 30, 2017 December 31, 2016
(in millions of euros)
---------------------------------------------------------------------------
Assets
Goodwill, net 9 8,718 9,150
Intangible assets, net 1,213 1,345
Property, plant and equipment, net 581 640
Deferred tax assets 143 150
Investments in associates 10 77 87
Other financial assets 11 183 182
Non-current assets 10,915 11,554
Inventories and work in progress 429 406
Trade receivables 9,086 10,010
Other current receivables and assets 653 698
Cash and cash equivalents 1,151 2,228
Current assets 11,319 13,342
Total assets 22,234 24,896
-------------------------------------------------------------------------------
Equity and liabilities
Share capital 92 90
Additional paid-in capital and retained earnings, Group share 5,526 5,965
Equity attributable to holders of the parent company 12 5,618 6,055
Non-controlling interests 12 10
Total equity 5,630 6,065
Long-term borrowings 14 2,589 3,028
Deferred tax liabilities 589 649
Long-term provisions 13 533 556
Non-current liabilities 3,711 4,233
Trade payables 10,071 11,992
Short-term borrowings 14 555 283
Income taxes payable 123 88
Short-term provisions 13 131 130
Other creditors and current liabilities 2,013 2,105
Current liabilities 12,893 14,598
Total equity and liabilities 22,234 24,896
Consolidated statement of cash flows
June 30, 2017 June 30, 2016 December 31, 2016
(in millions of euros)
(6 months) (6 months) (12 months)
Cash flows from operating
activities
Net income 391 385 (520)
Neutralization of non-cash
income and expenses:
Income taxes 151 162 342
Cost of net financial debt 32 39 74
Capital (gains) losses on - (16) (9)
disposals (before tax)
Depreciation, amortization and
impairment loss on property, 116 125 1,685
plant and equipment and
intangible assets
Non-cash expenses on stock 28 19 55
options and similar items
Other non-cash income and 25 15 115
expenses
Share of profit of associates 2 (2) 5
Dividends received from 1 - 3
associates
Taxes paid (115) (79) (257)
Interest paid (26) (22) (106)
Interest received 26 10 40
Change in working capital (1,013) (1,102) (355)
requirements((1))
Net cash flows generated by
(used in) operating activities (382) (466) 1,072
(i)
Cash flows from investing
activities
Purchases of property, plant and (39) (73) (173)
equipment and intangible assets
Disposals of property, plant and 2 1 7
equipment and intangible assets
Purchases of investments and (6) (2) (12)
other financial assets, net
Acquisitions of subsidiaries (176) (129) (240)
Disposals of subsidiaries 2 11 7
Net cash flows generated by
(used in) investing activities (217) (192) (411)
(ii)
Cash flows from financing
activities
Dividends paid to holders of the - - (193)
parent company
Dividends paid to non- (5) (16) (20)
controlling interests
Proceeds from borrowings 25 61 513
Repayment of borrowings (22) (1) (517)
Net purchases of non-controlling (23) (30) (44)
interests
Net (purchases)/sales of (287) 8 24
treasury shares and exercise of
equity warrants
Net cash flows generated by
(used in) financing activities (312) 22 (237)
(iii)
Impact of exchange rate (166) 19 126
fluctuations (IV)
Change in consolidated cash and (1,077) (617) 550
cash equivalents (i + ii + iii +
iv)
Cash and cash equivalents on 2,228 1,672 1,672
January 1
Bank overdrafts on January 1 (25) (19) (19)
Net cash and cash equivalents at 2,203 1,653 1,653
beginning of year (V)
Cash and cash equivalents at 1,151 1,064 2,228
closing date
Bank overdrafts at closing date (25) (28) (25)
Net cash and cash equivalents at 1,126 1,036 2,203
end of year (VI)
Change in consolidated cash and (1,077) (617) 550
cash equivalents (vi - v)
(1) Breakdown of change in
working capital requirements
Change in inventory and work in (44) (74) 28
progress
Change in trade receivables and 424 325 (222)
other receivables
Change in accounts payable, (1,393) (1,353) (161)
other payables and provisions
Change in working capital (1,013) (1,102) (355)
requirements
Consolidated statement of changes in equity
Reserves Translation Equity
Number of Share Additional and 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
225,367,784 January 1, 2017 90 3,429 2,118 255 163 6,055 10 6,065
Net income 387 387 4 391
Other
comprehensive (355) (33) (388) (2) (390)
income, net of
tax
------------------------------------------------------------------------------------------------
Total income
and expenses 387 (355) (33) (1) 2 1
for the period
------------------------------------------------------------------------------------------------
3,992,216 Dividends 2 242 (414) (170) (5) (175)
Share-based
383,457 compensation, 30 30 30
net of tax
Effect of
acquisitions
and commitments (9) (9) 5 (4)
to buy-out non-
controlling
interests
298,085 Equity warrant 9 9 9
exercise
(3,754,991) Purchases/sales (296) (296) (296)
of treasury
shares
226,286,551 June 30, 2017 92 3,680 1,816 (100) 130 5,618 12 5,630
Earnings per share (basic and diluted)
(in millions of euros, except for share data) June 30, 2017 June 30, 2016
-------------------------------------------------------------------------------
Net income used for the calculation of
earnings per share
Net income attributable to equity holders of A 387 381
the parent company
Impact of dilutive instruments:
- Savings in financial expenses linked to the
conversion of debt instruments, - -
net of tax
----------------------------
Group net income - diluted B 387 381
Number of shares used to calculate earnings
per share
Number of shares at January 1 225,945,387 222,540,740
Shares created over the period 344,728 197,830
Treasury shares to be deducted (average for (1,708,247) (1,010,137)
the year)
----------------------------
Average number of shares used for the C 224,581,868 221,728,433
calculation
Impact of dilutive instruments:
Free shares and dilutive stock options((1)) 3,588,145 2,093,218
Equity warrants((1)) 638,192 796,005
----------------------------
Number of shares - diluted D 228,808,205 224,617,656
(in euros)
EARNINGS PER SHARE A/C 1.72 1.72
Diluted earnings per share B/D 1.69 1.70
1. Only stock options and warrants with a dilutive impact, i.e. whose strike
price is lower than the average strike price, are included in the
calculation. For H1 2017 and 2016, all stock options and warrants not yet
exercised at the reporting date had a dilutive impact.
Headline earnings per share (basic and diluted)
(in millions of euros, except for share data) June 30, 2017 June 30, 2016
-------------------------------------------------------------------------------
Net income used to calculate headline earnings
per share((1))
Group net income 387 381
Items excluded:
Amortization of intangibles from acquisitions, 23 25
net of tax
Revaluation of earn-out payments 22 10
Main capital gains (losses) on disposal of - (10)
assets, net of tax
----------------------------
Headline Group net income E 432 406
Impact of dilutive instruments:
- Savings in financial expenses linked to the
conversion of - -
debt instruments, net of tax
----------------------------
Headline Group net income, diluted F 432 406
Number of shares used to calculate earnings
per share
Number of shares at January 1 225,945,387 222,540,740
Shares created over the period 344,728 197,830
Treasury shares to be deducted (average for (1,708,247) (1,010,137)
the year)
----------------------------
Average number of shares used for the C 221,728,433
calculation 224,581,868
Impact of dilutive instruments:
- Free shares and dilutive stock options 3,588,145 2,093,218
- Equity warrants 638,192 796,005
----------------------------
Number of diluted shares D 228,808,205 224,617,656
(in euros)
-------------------------------------------------------------------------------
Headline earnings per share((1)) E/C 1.92 1.83
Headline earnings per share - diluted((1)) F/D 1.89 1.81
1. EPS after elimination of the impairment losses, amortization of intangibles
from acquisitions, the main capital gains and losses on disposal of assets
and the revaluation of earn-out payments.
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
Unternehmensinformation / Kurzprofil:
Datum: 20.07.2017 - 08:14 Uhr
Sprache: Deutsch
News-ID 553112
Anzahl Zeichen: 59824
contact information:
Town:
Paris
Kategorie:
Business News
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