PUBLICIS GROUPE IN 2013, A RECORD YEAR

Transcription

1 ANNUAL RESULTS 2013

2 DISCLAIMER This presentation contains forward-looking statements. The use of the words "aim(s)", "expect(s)", "feel(s)", "will", "may", "believe(s)", "anticipate(s)" and similar expressions in this presentation are intended to identify those statements as forward-looking. Forwardlooking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Other than as required by applicable securities laws, Publicis Groupe undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events. Publicis Groupe urges you to review and consider carefully the various disclosures it has made concerning the factors that may affect its business, including the disclosures made under the caption "Risk Factors" in the 2013 Registration Document filed with the French financial markets authority (AMF). For comparative purposes and in accordance with IFRS, 2012 et 2011 figures have been restated to reflect the implementation of the amendments of IAS 19 2

3 PUBLICIS GROUPE IN 2013, A RECORD YEAR (EUR million) excl. merger costs Revenue 6,953 6, vs 2012*** excl. merger costs Reported: +5.2% Organic: +2.6% Operating margin 1,107 1, % % of revenue 15.9% 16.5% Net income % EPS*!3.54! % Free Cash Flow** % Dividend! % * Diluted EPS ** Free Cash Flow (before change in WCR) *** For comparative purposes and in accordance with IFRS, 2012 figures have been restated to reflect the implementation of the amendments of IAS 19 3

4 2013: STRONG RESULTS Revenue " Reported: +5.2% " Organic: +2.6% " Europe: sluggish " BRIC + MISSAT: setback in Q4: -5.9% 4

5 2013: STRONG RESULTS Digital: " Strategic goal achieved: 38% of revenue (Q4: 40%) " FY Organic Growth: +13.9% (Q4: +20.1%) Revenue " Reported: +5.2% " Organic: +2.6% " Europe: sluggish " BRIC + MISSAT: setback in Q4: -5.9% 5

6 2013: STRONG RESULTS Revenue " Reported: +5.2% " Organic: +2.6% " Europe: sluggish " BRIC + MISSAT: setback in Q4: -5.9% Digital " Strategic goal achieved: 38% of revenue (Q4: 40%) " FY Organic Growth: +13.9% (Q4: +20.1%) Significant Operating Margin Improvement " +40bp " 16.5% 6

7 2013: STRONG RESULTS Double Digit Increases " Net Income: +11.5% Revenue " Reported: +5.2% " Organic: +2.6% " Europe: sluggish " BRIC + MISSAT: setback in Q4: -5.9% Digital " Strategic goal achieved: 38% of revenue (Q4: 40%) " FY Organic Growth: +13.9% (Q4: +20.1%) Significant Operating Margin improvement " +40bp " 16.5% " Headline diluted EPS: +10.6% " Dividend: +22.2% " Free Cash Flow: +19% 7

8 2013: A RECORD YEAR 8

9 PUBLICIS GROUPE IN 2013 " Strategic goal achieved in digital: " A new year of double digit growth: FY 13.9% " 38% of Group Revenue in digital: 40% in Q4 " Significant margin improvement: " +40bp despite low organic growth " On track on our plans " Double Digit Increases: " Net Income: +11.5% " Headline diluted EPS: +10.6% " Free Cash Flow: +19% Strong results despite challenging macro economic context 9

10 PUBLICIS GROUPE NEW BUSINESS Net New Business 2013 USD 4.5 billion 10

11 FINANCIAL RESULTS

12 REVENUE 2013 BY GEOGRAPHY (EUR million) Var vs Organic Growth Europe (*) 2,060 1, % -1.6% North America 3,303 3, % +4.7% BRIC + MISSAT (**) % +1.0% RoW % +6.8% Total 6,953 6, % +2.6% * Europe excluding Russia and Turkey ** MISSAT includes Mexico, Indonesia, Singapore, South Africa, Turkey 12

13 GROWTH BY COUNTRY Organic Growth 2013 > 5 % From 0 to 5% < 0% Argentina, Australia, Chile, Colombia, New Zealand, Philippines, Thailand, Turkey, USA Brazil, Canada, Greater China, Czech Republic, Germany, Japan, Mexico, Poland, Russia, Singapore, UK India, Israel, South Africa, Most of other European countries 13

14 REVENUE Q BY GEOGRAPHY (EUR million) Q Q Q vs. Q Q4 Organic Growth Europe (*) % +0.1% North America % +2.4% BRIC + MISSAT (**) % -5.9% RoW % +4.8% Total 1,927 1, % +0.7% * Europe excluding Russia and Turkey ** MISSAT includes Mexico, Indonesia, Singapore, South Africa, Turkey 14

15 REVENUE IN MILLION USD Q4 2,460 2,559 FY 9,232 8, % 15

16 DIGITAL % of Group revenue EUR Million % 2, % 2,174 Organic Growth +13.9% 16

17 FAST GROWING MARKETS % of Group revenue EUR Million %* 1, % 1,689 Organic Growth +3.3% * LBi acquisition: geographic footprint mainly in mature markets 17

18 ORGANIC GROWTH BY REGION AND ACTIVITY EUROPE * NORTH AMERICA BRIC + MISSAT ** ROW TOTAL DIGITAL +10.0% +13.1% +20.1% +38.9% +13.9% ANALOG -5.2% -3.1% -1.5% +1.5% -2.9% Total -1.6% +4.7% +1.0% +6.8% +2.6% * Europe excluding Russia and Turkey ** MISSAT includes Mexico, Indonesia, Singapore, South Africa, Turkey 18

19 CONSOLIDATED INCOME STATEMENT (EUR million) 2013 Excl. Merger costs ** 2012* Revenue 6,953 6,610!"#$%&'(%)%&'* +5.2% EBITDA (1) 1,265 1,188 Operating margin 1,145 1,062 +7,8% as % of revenue 16.5% 16.1% Amortization of intangibles arising on acquisitions (49) (45) Impairment (4) (11) Non current income (expense)*** Operating income 1,161 1,045 Net financial costs (21) (32) Income taxes (312) (279) Associates 5 25 Minority interests (17) (27) Group net income % (1) EBITDA: operating margin before depreciation and amortization!"#$%&#'()$)*+,-%(.$(#/-/%)01%+0%)&&#$1)0&-%2+*3%4"567%89:8%;+<.$-/%3),-%=--0%$-/*)*-1%*#%$-;>-&*%*3-%+'(>-'-0*)*+#0%#;%*3-%)'-01'-0*/%#;%4?6%:@!!""#$%&'(&(")'*+,,&-")'"*.''&*/).'"0)/1"2+34)*)(5"%,.%.(&-"6&,7&,"0)/1"86')*.6"19:&"3&&'"&$*4+-&-";,.6"/1&(&"96.+'/("a<$#//%)'#.0*bcd'<7%*)e%-;;-&*b%:f'<7%0-*% 8F'<G 19!!!%40&>.1+0<%FH'< <)+0%#0%1+/(#/)>%#;%4IJ%/3)$-/%+089:C

20 OPERATING MARGIN (EUR million) * excl. Merger costs ** Revenue 6,953 6,610 Personnel costs (4,330) (4,078) Other operating expenses** (1,358) (1,344) Depreciation (120) (126) Operating margin 1,145 1, % 16.1% #*3-$%#(-$)*+0<%-E(-0/-/GL 20

21 2013: CHANGE IN OPERATING MARGIN RATE +40bp +40bp +30bp 16.8% 30bp 16.5% 16.1% -20bp 15.9% -20bp 2012 OI% as reported IAS19 and FX impact* 2012 OI% Dec 13 Fx* Personnel costs Clients one-off SSC optimisation & Occupancy costs Other savings on G&A 2013 OI% excl. Merger costs and 2013 acquisitions 2013 acquisitions 2013 OI% excl. Merger costs * For comparative purposes and in accordance with IFRS, 2012 figures have been restated to reflect the implementation of the amendments of IAS 19 21

22 NET FINANCIAL COSTS (EUR million) * Eurobond 2012 and 2015!"# (4) (6) Oceane 2014!$# - (22) Oceane 2018!%# (3) (3) Oranes (2) (2) Interest on bank debt (19) (19) Financial charges on bonds and bank debt (a) (28) (52) Interest income on cash and cash equivalents (b) Total (a) + (b) (8) (28) Financial income linked to the extinction of the Eurobond 2012 debt (non cash) - 17 Other financial expenses &!'#( (13) (21) Net financial costs (21) (32)!"#$%&'(%)%&'* (4) 20 (17) 8 11 (1) Eurobond 2012: fully reimbursed in January 2012; Eurobond 2015 : fixed rate of 4,25% following the SWAP unwinding in January 2013, whose impact is an income of 5m! in (2) Oceane 2014: fully converted in July 2012; (3) Oceane 2018: 78,7% of the existing bonds converted on 10 th December At the end of January 2014, 100% of the bonds have been either converted or reimbursed. (4) Includes: Interest on finance lease, Earn Out Revaluation, Interest on discounted Earn Out Debt, foreign exchange gain/(loss), provision on financial assets, dividends outside the Group and interest on long term provisions. 22 * In application of IAS 19 revised, 2012 figures have been restated with a (6)m! impact on line Other financial expenses.

23 EFFECTIVE TAX RATE 2013 (+M) % 2012 (+M) % Income taxes % 279 & 28.8% * For comparative purposes and in accordance with IFRS, 2012 figures have been restated to reflect the implementation of the amendments of IAS 19 23

24 EARNINGS PER SHARE +9.0%** ** (EUR) +10.6% Diluted EPS Headline diluted EPS* * After elimination of impairment charge, amortization on intangibles arising on acquisition, main capital / remeasurement gains (losses), earn out revaluation and merger costs ** Excluding merger costs For comparative purposes and in accordance with IFRS, 2011 and 2012 figures have been restated to reflect the implementation of the amendments of IAS 19 24

25 BALANCE SHEET AT 31 DECEMBER 2013 (EUR million) * Goodwill and intangibles 7,062 6,649 Other fixed assets Current and deferred tax (131) (91) Working capital (2,547) (2,259) TOTAL 5,046 5,070 Group equity 5,094 4,614 Minority interests Equity 5,132 4,658 Provisions for risk & charges Net (cash) debt (593) (218) TOTAL 5,046 5,070 Net Debt/Equity Ratio cash positive cash positive * For comparative purposes and in accordance with IFRS, 2012 figures have been restated to reflect the implementation of the amendments of IAS 19 25

26 BALANCE SHEET SIMPLIFICATION " ORANE holders unanimously agreed in October 2013: " Publicis Omnicom merger " Mandatory early redemption of ORANES in exchange of Publicis shares at completion of the merger " 2014 current coupon " OCEANE 2018: Early Redemption in December 2013 " 79% of the existing bonds were converted into shares, leading to a decrease in financial debt of 100 million euros " Remaining bonds fully converted and/or reimbursed in cash in January 2014, through exercise of the issuer call option " Exercise of the Warrants (BSA) " At the end of 2013, 2,757,571 warrants had been exercised at a price of 30.5 euros (84 million euros have been cashed in, representing the cash proceed of capital increase) " 2,845,128 warrants remain exercisable as of 31 December

27 NET DEBT Average Net Debt in!m Net Debt in!m (December 31) Cash Cash (110) (465) (628) (490)

28 FREE CASH FLOW (EUR million) * 2011* EBITDA (1) 1,227 1,188 1,032 Interests paid (11) (37) (51) Tax paid (244) (306) (212) Other items Cash flows from operations before change in WCR 1, Investments (Capex), net of proceeds (123) (120) (112) Free Cash Flow before change in WCR % (1) EBITDA: operating margin before depreciation and amortization (2) Acquisition of tangible and intangible fixed assets net, excluding the purchase of investments and other financial assets net * For comparative purposes and in accordance with IFRS, 2012 & 2011 figures have been restated to reflect the implementation of the amendments of IAS 19 28

29 USE OF CASH (EUR million) * 2011* Free Cash Flow before change in WCR Change in WCR Acquisitions (net of disposals) (488) (454) (599) Earn-out (190) (45) (87) Buy-out (97) (30) (12) Dividends paid (130) (150) (143) Share buy-back (182) (644) - Sales of Treasury shares due to exercise of stock options Exercise of warrants Non-cash impact on Net Debt (203) Variation of Net Debt (216) * For comparative purposes and in accordance with IFRS, 2012 & 2011 figures have been restated to reflect the implementation of the amendments of IAS 19 29

30 FINANCIAL RATIOS * Optimum Ratio Average Net Debt / EBITDA (1) < 1.50 #$%&'$(%&)&*+,-$+./0$-12&3456%7 cash positive cash positive < 0.50 Interest Cover (EBITDA (1) / Cost of Net Financial Debt) > 7 (1) EBITDA: Earnings (operating margin) before depreciation and amortization * For comparative purposes and in accordance with IFRS, 2012 figures have been restated to reflect the implementation of the amendments of IAS 19 30

31 DIVIDEND EUR per share Dividend: +22.2% in 2013 Option: cash or shares 31

32 DIVIDEND 30.2 Pay-out ratio (%) Pay-out Mid Term Objective: 35% For comparative purposes and in accordance with IFRS, 2012 & 2011 figures have been restated to reflect the implementation of the amendments of IAS 19 32

33 LIQUIDITY AT 31 DECEMBER 2013 (EUR million) Total Drawn Available Committed Facilities 364-day revolving credit facilities year revolving credit facility* year syndicated facility (Club Deal) - maturing July 2016** 1,200-1,200 Total Committed Facilities 1,909-1,909 Cash and Marketable Securities 1,442-1,442 Total liquidity 3,351-3,351 Group other uncommitted facilities * 400m! maturing 2018, 54m! maturing 2017, 50m! maturing 2014 ** Maturing

34 RETURN ON CAPITAL EMPLOYED * 12.6% Average ROCE = Operating Income after Tax (using ETR) / Average capital employed Capital employed including Saatchi & Saatchi goodwill not recognized in IFRS consolidated financial statements * Excluding merger costs (ROCE including merger costs: 13.1%) 34

35 MERGER UPDATE

36 MERGER UPDATE " Anti-trust: " Clearance obtained in US, Europe and 12 countries around the world (without conditions) " Merger still under review in China " Other key regulatory authorizations to be obtained before closing " S4 to be filed (SEC) " European prospectus to be submitted to the AFM " Planning and preparing the integration " 36

37 OUTLOOK

38 ZO AD SPEND FORECAST 2014 Forecast* as of December 2013 Worldwide (Media) +5.3% United States +4.7% Japan +2.2% Eurozone including +0.7% Germany +1.5% France +0.3% Italy -2.9% Spain +1.8% United Kingdom +6.2% China +10.5% Brazil +5.0% * ZenithOptimedia Major Media Ad Forecasts for 2014 current prices (%) Ad Agencies Revenue Growth Estimate,%($-. 38

39 2018 OBJECTIVES STAND-ALONE 1/2 Publicis Groupe activities weight Digital 33% 38.4% 50% Fast Growing Markets 25% 24.4% 35% Revenue in growing segments: ON TARGET Overlap 3% 4.1% 10% Revenue in digital / FGM 55% 58.7% 75% 39

40 2018 OBJECTIVES STAND-ALONE 2/2 18% - 20% 16,5% Operating Margin: ON TARGET

41 OBJECTIVES 2014 SUCCESSFULLY COMPLETE THE PUBLICIS - OMNICOM MERGER ACCELERATE INTERNAL 2018 PLAN AS STAND ALONE 41

42 Q&A

43 ANNUAL RESULTS 2013

44 APPENDIX

45 REVENUE BY ACTIVITY Media SAMS 16% 19% in % 18% in % 33% in 2012 Digital 30% 30% in 2012 Advertising 45

46 REVENUE BY SECTOR % 6% 4% 4% FMGC 33% TMT Healthcare Automotive 11% 5% 4% 5% 34% Finance 13% Leisure/Energy/luxury 13% Retail 13% 16% Others 12% 16% Based on 1,899 clients representing 83% of Group revenue 46

47 SPLIT OF REVENUE BY SECTOR " Digital vs. Analog 26% 54% 41% 40% 38% 60% 45% 74% 46% 59% 60% 62% 40% 55% FMCG TMT Automotive Retail Healthcare Finance Leisure/Energy/Luxury Analog Based on 1,899 clients representing 83% of Group revenue Digital 47

48 REVENUE & ORGANIC GROWTH " Calculation (EUR million) Dec. YTD Q4 Sep. YTD 2012 Revenue 6,610 1,899 4,711 Currency impact (237) (89) (148) 2012 Revenue at 2013 exchange rate (a) 6,373 1,810 4, Revenue before impact of acquisitions (1) (b) 6,538 1,823 4,715 Revenue from acquisitions (1) Currency impact (EUR million) (EUR million) Dec. YTD Q4 Sep. YTD GBP (21) (5) (16) USD (98) (36) (62) Other (118) (48) (70) Total (237) (89) (148) 2013 Revenue 6,953 1,927 5,026 Organic growth (b/a) +2.6% +0.7% +3.3% (1)Acquisitions (Webformance Saint Brieuc, Indigo, Flip, King Harvests, UBS, Pixelpark, Longtuo, BBR, BBH, Neogama, CNC, Webformance Bordeaux, AR Media, Arachnid, Resultrix, Webformance Spain, Diplomatic Cover, Grita, Istrat, Outside Line, Bromley, Monterosa, Rokkan, LBI, Blue Parrot, Market Gate, Taterka, Convonix, Netalk, Neev, BosZ, Espalhe, Engauge, Poke, TPM, ZO Romania, Jana, Interactive Solutions, ETO, Heartbeat, Verilogue, Synergize, Walker Media, Beehive, Prima, ZO South Africa, Lighthouse, Polarix, Owen Kessel)net of disposals 2013: 1 EUR = USD 2012: 1 EUR = USD 1 EUR = GBP 1 EUR = GBP 48

49 REVENUE BY GEOGRAPHY IN USD (USD million) FY 2013 FY 2012 Var. 2013/2012 Europe (*) 2,735 2, % North America 4,386 4, % BRIC + MISSAT (**) 1,219 1, % RoW % Total 9,232 8, % * Europe excluding Russia and Turkey ** MISSAT includes Mexico, Indonesia, Singapore, South Africa, Turkey All entities translated into US dollars using the following average exchange rates: 2013: 1 EUR = USD 2012: 1 EUR = USD 49

50 GROSS DEBT AT 31 DECEMBER 2013 " Split by MATURITY (EUR million) Total onwards Oceane 2018* Eurobond Oranes Earn out / Buy out Other debt** Total gross debt No covenants * Fully reimbursed in January 2014 ** Including fair value of associated derivatives 50

51 GROSS DEBT AT 31 DECEMBER 2013 " Split by CURRENCY (EUR million) Total EURO USD GBP Others Oceane Eurobond Oranes Earn out / Buy out Other debt* Total gross debt Cash & marketable securities** (1,442) (1,260) 414 (37) (559) Net debt (cash) (593) (836) (325) &()*+,-./*0(12/3(42,-56(71(2667+/285.(.53/428/456 &&(91853(5115+8(71(+-335*+:(6;2<6 51

52 NET DEBT AT 31 DECEMBER 2013 " Split by RATE (EUR million) Total Earn-out / Buy-out Fixed rate Variable rate Oceane Eurobond Oranes Other debt* !"#$%&'(")) *+,# +-.%/*01' +$(1 "/#2,/3 "/# Earn out / Buy out Cash & marketable securities (1,442) - - (1,442) Net debt (cash) (593) (1,352) &()*+,-./*0(12/3(42,-56(71(2667+/285.(.53/428/456 52

53 CONSOLIDATED INCOME STATEMENT (EUR million) 2013 Excl. Merger costs Merger Costs * Revenue 6,953 6,953 6,610 EBITDA (1) 1,265 (38) 1,227 1,188 Operating margin 1,145 (38) 1,107 1,062 Amortization of intangibles arising on acquisitions (49) (49) (45) Impairment (4) (4) (11) Non current income (expense) Operating income 1,161 (38) 1,123 1,045 Net financial costs (21) (21) (32) Income taxes (312) 14 (298) (279) Associates Minority interests (17) (17) (27) Group net income 816 (24) * For comparative purposes and in accordance with IFRS, 2012 figures have been restated to reflect the implementation of the amendments of IAS 19 53

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