2012 Full Year Results. Thursday, March 21, 2013

Transcription

1 2012 Full Year Results Thursday, March 21, 2013

2 INTRODUCTORY MATTERS Forward-Looking Information This document contains certain forward-looking statements which speak only as of the date on which they are made. Forward-looking statements relate to projections, anticipated events or trends, future plans and strategies, and reflect Havas current views about future events. They are therefore subject to inherent risks and uncertainties that may cause Havas actual results to differ materially from those expressed in any forward-looking statement. Factors that could cause actual results to differ materially from expected results include changes in the global economic environment or in the business environment, and in factors such as competition and market regulation. For more information regarding risk factors relevant to Havas, please see Havas filings with the Autorité des Marchés Financiers (documents in French) and, up to October 2006, with the U.S. Securities and Exchange Commission (documents in English only). Havas does not intend, and disclaims any duty or obligation, to update or revise any forward-looking statements contained in this document to reflect new information, future events or otherwise. Net New Business Net new business represents the estimated annual advertising budgets for new business wins (which includes new clients, clients retained after a competitive review, and new product or brand expansions for existing clients) less the estimated annual advertising budgets for lost accounts. Havas' management uses net new business as a measurement of the effectiveness of its client development and retention efforts. Net new business is not an accurate predictor of future revenues, since what constitutes new business or lost business is subject to differing judgments, the amounts associated with individual business wins and losses depend on estimated client budgets, clients may not spend as much as they budget, the timing of budgeted expenditures is uncertain, and the amount of budgeted expenditures that translate into revenues depends on the nature of the expenditures and the applicable fee structures. In addition, Havas' guidelines for determining the amount of new business wins and lost business may differ from those employed by other companies. The average net debt (quarterly, semi-annually and annually) is calculated as the difference between the structured gross debt under IFRS (OBSAAR, Eurobond, used credit lines, etc ) and the cash in bank and cash equivalents measured on a daily basis for the main countries integrated in the International cashpool; for the other countries, the average net debt taken into account is the monthly average net debt. The new definition excludes earn-out and buy-out obligations and includes blocked current accounts relating to employee profit-sharing. 2 2

3 2012 Key Figures Revenue : 1,778M in 2012, +2.1% organic growth (at constant exchange rate and scope) vs 2011 and +8% overall growth +2.1% +8.0% Emerging markets represent 17% of total revenue Digital accounts for 26% of total revenue Income from operations reached 240M in 2012 vs 220M in 2011, improving by +9%. Income from operations margin grew +10 bp to 13.5% Net income, group share of 126M in 2012 up +5% Earnings per share as determined on the basis of outstanding shares as at Dec, 31st 2012 amounts to 33 cents ( ) Net debt (2) of 168M as of December 31st, 2012 vs 44M net cash in Average net debt (2) was 225M in 2012 vs 12M in 2011 after 269M share buy-back Strong level of Net New Business (1) to 1.7bn +9.0% +5.0% +16% +22% 3 (1) (2) Definition of «Net New Business» and details on net debt calculation on page 2 Résultats Annuels

4 2012 Revenue by Area % change 2012 vs 2011 Organic Growth EUROPE % +2.3% NORTH AMERICA % +13.5% ASIA PACIFIC & AFRICA % +26.2% LATAM % +9.5% TOTAL 1,778 1, % +8.0% 4 Résultats Annuels 2012

5 Digital at the Core of Our Agencies and Our Strategy To be the world s best company at connecting BRANDS with PEOPLE using CREATIVITY, MEDIA and TECHNOLOGY 5

6 What Makes Havas Different? More integrated More agile More entrepreneurial Smaller legacy business Longer-term focus, Bolloré Group Challenger mentality : WE EXIST TO CHANGE THE INDUSTRY 6

7 1. TO STRENGTHEN OUR POSITION AS THE MOST INTEGRATED, DIGITAL, AGILE, ENTREPRENEURIAL AND CLIENT- FOCUSED COMMUNICATIONS GROUP 7 Résultats Annuels 2012

8 8 The Traditional Holding Company Model

9 Former structure 9 9

10 New structure OTHERS 10 10

11 11 Euro RSCG Worldwide Becomes Havas Worldwide to Underscore Havas s Unique Integrated Structure

12 Offices Rebranding in 120 Cities in 75 Countries

13 13 Havas Media Changes

14 Integration of Creative and Media Paris HQ centralization, similar move in NY during Spring 2013 business synergies leases & rental savings shared services alignment of incentive schemes shared platform e.g. sustainability 14 Résultats Annuels 2012

15 2. DIGITAL AT THE CORE OF ALL OUR ACTIVITIES AND ALL OUR AGENCIES 15 Résultats Annuels 2012

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17 17 HAVAS PARIS

18 HAVAS VILLAGE, PARIS 2,200 EXPERTS CREATIVE, DIGITAL, MEDIA

19 19 HAVAS, NEW YORK

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24 Further Development of Havas Media Tools Expansion of Artémis, our data management platform Created 12 years ago Havas is one of the only groups that has deployed a DMP globally Already used by a majority of clients, in the US and Europe A 30-person team based in London, Madrid, Paris, Shanghai and Boston Further developing Affiperf, our digital trading solution launched in 2010 Development of Paris, London, NY, Mexico and Singapore hubs Current coverage of 35 countries and all main ad exchanges: display, video and mobile Acquisition opportunities to further strengthen our capabilities. No proprietary technology imposed on clients. 24 Résultats Annuels 2012

25 25 Leading the North American Market in Mobile - Agency of the Year, 2 Years Running

26 Havas, only advertising Holding company part of Facebook Client Council Client Council 26

27 27 Leader in Digital Big Data

28 28 Winning Major Digital Business

29 Attracting the Best Digital Talent Matt Howell Global Chief Digital Officer Arnold, prev. Modernista! Dave Dugan Global Commercial Officer Arnold, prev. BzzAgent, Digitas Elliot Seaborn Executive Director Arnold, prev. Digitas Drake Pusey VP, Dir. of Digital Platforms Arnold prev. Isobar Dorothy Gemmell President Havas Life, New York, prev. WebMD Sylvain Le Borgne SVP, Director of Insights & Data Solutions, Havas Media Angela Wei Chief Digital Officer Arnold prev. Time Inc. Rori DuBoff SVP, Director Global Strategy Havas Digital, prev. Ogilvy & Mather Laura Maness Chief Growth Officer Havas Worldwide US, prev. Propane Studio Andrew Altersohn President, Havas Media North America, prev. Digitas, Publicis Maria DePanfilis SVP, Dir. of Analytics Havas Lynx NY prev. CementBloc Marcus Tavares MD Havas Worldwide Digital Brazil prev. Wunderman 29

30 Global Leader in Integrated Digital +249% 26% % digital revenue 9%

31 3. ACQUISITIONS AND START-UPS TO GROW AND DEVELOP EXISTING CORE STRENGTHS AND ADD NEW COMPETENCIES 31 Résultats Annuels 2012

32 Recent Acquisitions and Startups Shanghai Shanghai Singapore 32

33 Recent Acquisitions and Startups Singapore Shanghai Poland China, India, Singapore Shanghai Kenya Rep of Congo South Africa Nigeria 33

34 PURSUE A PATIENT, RIGOROUS AND DIFFERENTIATED ACQUISITION STRATEGY THAT MAXIMIZES SHAREHOLDER VALUE 34

35 4. ACCELERATE DEVELOPMENT IN HIGH-GROWTH MARKETS 35 Résultats Annuels 2012

36 % Share of Revenue in "Emerging" Markets 16% 17% 13% 10% 11,0% 11,0% Havas Digital Revenue

37 2012 Organic Growth by Market > 15 % +10% to +15% +5% to +10% < 5% MAINLAND CHINA, UNITED ARAB EMIRATES, JAPAN, TURKEY, PHILIPPINES, THAILAND, ARGENTINA, PERU, URUGUAY, VENEZUELA AUSTRIA, INDIA, COLOMBIA, SOUTH AFRICA, TUNISIA MEXICO, RUSSIA, BELGIUM, HUNGARY, SINGAPORE, TAIWAN, KOREA, SAUDI ARABIA FRANCE, U.K., SPAIN, GERMANY, PORTUGAL, ITALY, THE NETHERLANDS, SWITZERLAND, AUSTRALIA, US, CANADA, BRAZIL, INDONESIA, H.K. 37

38 5. DEVELOP AND ACCELERATE GLOBAL CLIENT GROWTH 38 Résultats Annuels 2012

39 +170% * Havas Worldwide markets Pernod Ricard brands in 70+ markets * 2002 vs 2012 Revenue % Change

40 +778% * Havas Worldwide is responsible for 160 Reckitt Benckiser brands in 70+ markets Continued year-on-year growth +11% FY * 2002 vs 2012 Revenue % Change

41 +505% * Growth driven by Digital and Network expansion Active in 60+ countries globally Continued year-on-year growth +20% FY * 2002 vs 2012 Revenue % Change

42 Havas WW named to Unilever s First Global Digital Roster in 2009 Havas EHS named as Dove Deo AOR January 2011 Havas EHS named as Unilever Global Consumer Data AOR in December % * * 2009 vs 2012 Revenue % Change

43 6. CONSOLIDATE LEADERSHIP IN SUSTAINABILITY/SOCIAL RESPONSIBILITY 43 Résultats Annuels 2012

44 Consolidate Leadership in Sustainability/Social Responsibility One Young World Meaningful Brands Social Business Idea 44 «Who Cares Wins» published in 9 languages - #WhoCaresWins

45 6. BRILLIANT CREATIVITY 45 Résultats Annuels 2012

46 Havas Wins 27 Lions at Cannes 2012, +20% vs 2011 Grand Prix 1 (BETC, Canal+ The Bear ) Gold 5 Silver 8 Bronze 13 46

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49 49 Main New Business wins in 2012

50 RESULTS & FINANCIAL STRUCTURE 2012

51 Consolidated P&L M 2011 Revenue 1,645 Compensation (1,002) Other expenses and income from operations (424) Income from operations 220 Other operating expenses and income (23) Operating income 197 Net financial expense (31) Income of consolidated companies before tax 166 Income tax (38) Net income of consolidated companies 128 Minority interests (8) Net income, group share ,778 (1,094) (445) 240 (21) 219 (29) 190 (55) 135 (9) 126 Variance 2012/ % +9% +11% +14% +5% +5% Restated EPS (1) in % 51 (1) EPS as determined on the basis of Havas SA outstanding capital shares at 31/12/12

52 Margins M Variance 2012/2011 Revenue 1,645 1,778 +8% Organic growth Income from operations % % Income from operations margin (in %) 13.4% 13.5% Operating income % Operating income margin (in %) 12.0% 12.3% Net income, group share % Restated EPS in (1) % 52 (1) EPS as determined on the basis of Havas SA outstanding capital shares at 31/12/12

53 Progression of Income from Operations Margin 13,1% 13,4% 13,5% 12,7% 9,5% 11,0% 12,0% Havas Digital Revenue

54 Compensation Ratio Evolution M Variation Compensation % o/w bonuses % o/w severance Freelance costs % Compensation incl. Free lance ex. severance % in % of revenue 63.3% 63.3% Average headcounts 14,830 15, % 54

55 Other Expenses from Operations Under Control: +5% Other expenses from op Forex Effect Amort. Leases IT & telecom New biz and com. costs Other expenses from op

56 Income Tax Increase of income tax rate from 23% to 29% Higher income tax to pay (France, Mexico, US, China,...) Deferred tax assets: - USA: end of deferred tax assets - France: lower utilization rate of deferred tax assets 56

57 Cash Flow Statement M Net income of consolidated companies Amortization, provisions and financial cost Operating cash flow Change in WCR Cash flow from operations Investments (incl. Buy-out) Change in capital * Dividends Net proceeds from borrowings Financial charges and forex effect Change in net cash position Change in net cash excl. Share buy-back * OPRA / OPAS effect = 269M

58 Consolidated Balance Sheet M Assets 12/31/1 1 Intangible and tangible assets 1,866 Net differed tax 80 12/31/1 2 1, Liabilities Consolidated equity 12/31/1 1 1,306 Provisions 102 Net financial debt (44) 12/31/1 2 1, WCR (494) (472) Earn out / Buy-out Total 1,452 1,516 Total 1,452 1,516 58

59 Change in Net Debt Calculation Closing net debt Average net debt Former definition Total E/O and B/O Employee profit-sharing blocked in current accounts New definition

60 Closing and Average Net Debt Net debt of 168M as of 12/31/2012 vs 44M net cash as of 12/31/2011. Average net debt (1) of 225M in 2012 vs 12M in (1) Definition of net debt on page 2

61 Liquidity as of 12/31/2012 ( M) Undrawn mid-term committed credit lines 376 Undrawn 365 day committed credit lines 79 Cash and cash equivalents 530 Total of potential liquidity 985 Available uncommitted credit lines 194 Available commercial paper program 210 Total of financing resources 1,389 61

62 Financial Ratios M Net Debt Equity 1,306 1,136 Gearing Adjusted EBITDA (1) Net debt / adjusted EBITDA -0.2x 0.6x Average net debt (2) Average net debt / adjusted EBITDA 0.0x 0.8x Financial result Adjusted EBITDA / Financial Result 8.3x 9.6x 62 (1) Adjusted EBITDA = Income from operations plus intangible and tangible fixed assets depreciation and amortization, stock option charges and other compensation defined by IFRS 2 (2) Definition of average net debt on page 2

63 Stable Dividend of 0.11 per Share but Significant Cash Return Thanks to Buy-Back 301M 52m Havas shares bought and cancelled in 2012 Dividend proposal of 0.11 per share, payment date: 06/12/ Share buy-back Dividends

64 Conclusion Structural advantage: agile & entrepreneurial Continued success growing global clients Unique "digital at the core " model in all agencies Confirmed objective to increase operating margins Ongoing acquisiton policy focused on digital with clear financial criteria Sustained cash return policy in the long run 64