Outperforming in Q2 with +7.1% organic
growth
Upgrade of FY 2023 guidance on all
KPIs
Regulatory News:
Publicis Groupe (Paris:PUB):
- Q2 organic growth at +7.1% thanks to revenue mix and New
Business tailwind
- Continued sustained performance across regions: U.S. +5%,
Europe +15%, China +7%
- Operating margin rate maintained at historically high level
of 17.3% in H1
- Headline diluted EPS up +11% at €3.21, Free Cash Flow
slightly up at €725m despite FY’22 R&D tax payment
- Upgrade of 2023 guidance despite persistent macro
uncertainties: organic growth now expected at circa +5%, operating
margin rate close to 18%, Free Cash Flow at least €1.6bn
Q2 2023
€3,239m
+5.4%
+7.1%
H1 2023 Results
H1 2023
2023 vs 2022
7,105
+8.5%
6,318
+7.6%
+7.1%
1,093
+7.4%
17.3%
- Headline Groupe net income
813
+11.8%
- Headline diluted EPS (euro)
3.21
+11.3%
725
+2.4%
- Free Cash Flow1,2 excluding 2022-related TCJA
835
+17.9%
1 Before change in working capital requirements.
2 Reported H1 2023 FCF of €725m includes a €110m cash tax
payment made in January 2023 relating to 2022. This payment
reflects the impact of the new application of the U.S. Tax Cuts and
Jobs Act (TCJA) on the capitalization of R&D expenses,
confirmed late December 2022. Excluding this payment, H1 2023
FCF is at €835m, up 17.9% compared to H1 2022.
Arthur Sadoun, Chairman and CEO of Publicis Groupe:
“The first half of the year has been strong for Publicis.
In Q2, we continue to outperform the market on organic growth
thanks to our unique revenue mix and new business track record with
+7.1%, ahead of expectations after double-digit growth in 2022.
We delivered the best financial KPIs in the industry in H1
thanks to our platform organization, with operating margin at
17.3%, in line with the historically high level of 2022.
As we shifted from a communication to a transformation partner
for our clients, we are confirming that we have become a stronger
company since 2019 with our net revenue up +45% on a reported basis
and our operating margin up +68% over this period.
With our investments in Epsilon, powering Creative and Media
through personalization at scale, Sapient and Marcel, we are
uniquely positioned to lead the future of our industry. It will
inevitably be shaped by data, tech and AI that are already at the
heart of our business model both in how we work for our clients and
in the way we operate.
But Publicis is not only future-proof. It is also more resilient
to business cycles, allowing us to upgrade our guidance on all KPIs
for the year despite persistent macroeconomic uncertainty. We now
expect to deliver organic growth at circa +5% for 2023, above our
3Y CAGR of +4%, with operating margin rate close to 18%.
I would like to sincerely thank our clients for their continued
trust and all our talent for their dedication throughout the last
months.”
Publicis Groupe’s Supervisory Board met on July 19th, 2023,
under the chairmanship of Maurice Lévy, to examine the 2023 first
semester accounts presented by Arthur Sadoun, CEO and Chairman of
the Management Board.
KEY FIGURES
EUR million, except per-share
data and percentages
H1 2023
H1 2022
2023
vs 2022
Data from the Income Statement and Cash
flow Statement
Net revenue
6,318
5,873
+7.6%
Pass-through revenue
787
674
+16.8%
Revenue
7,105
6,547
+8.5%
EBITDA
1,335
1,287
+3.7%
% of Net revenue
21.1%
21.9%
-80bps
Operating margin
1,093
1,018
+7.4%
% of Net revenue
17.3%
17.3%
-
Operating income
843
761
+10.8%
Net income attributable to the
Groupe
623
537
+16.0%
Earnings Per Share (EPS)
2.48
2.15
+15.3%
Headline diluted EPS3
3.21
2.88
+11.3%
Free Cash Flow before change in
working capital requirements
725
708
+2.4%
Data from the Balance
Sheet
June 30, 2023
Dec 31, 2022
Total assets
33,700
35,898
Groupe share of Shareholders’
equity
9,188
9,635
Net debt (net cash)
226
(634)
3 Net income attributable to the Groupe, after elimination of
impairment charges, amortization of intangibles arising on
acquisitions, the main capital gains (or losses) on disposals,
change in the fair value of financial assets, the revaluation of
earn-out costs, divided by the average number of shares on a
diluted basis
NET REVENUE IN Q2 2023
Publicis Groupe’s net revenue in Q2 2023 was 3,239 million
euros, up +5.4% from 3,073 million euros in 2022. Exchange rates
had a negative impact of 73 million euros. Acquisitions, net of
disposals, accounted for an increase in net revenue of 26 million
euros. Organic growth reached +7.1%.
Breakdown of Q2 2023 Net revenue by
region
EUR
Net revenue
Reported
Organic
million
Q2 2023
Q2 2022
Growth
Growth
North America
1,955
1,912
+2.2%
+4.9%
Europe
809
709
+14.1%
+15.2%
Asia Pacific
300
289
+3.8%
+2.6%
Middle East & Africa
91
90
+1.1%
+6.5%
Latin America
84
73
+15.1%
+5.9%
Total
3,239
3,073
+5.4%
+7.1%
North America net revenue was up +2.2% on a reported
basis in Q2 2023, including a negative impact of the US dollar to
Euro exchange rate. Organic growth in the region was +4.9%, of
which +5.0% in the U.S.. Publicis Sapient grew at a very
solid +5.1% organically despite high comparables of 17%, in a
context of slower decision making process for DBT projects. Epsilon
grew +6.9% organically, notably driven by outperforming Digital
Media. Canada was up +2.2% organically.
Net revenue in Europe was up by +14.1% on a reported
basis. It was up by +15.2% on an organic basis, or +11.6% excluding
the contribution of our Outdoor Media activities & the
Drugstore. Organic growth in the U.K. was +17.0%, with a
notable double-digit growth in Media and at Publicis Sapient.
Organic growth in France was +5.0%4 with double-digit growth
in Media and at Publicis Sapient. Germany was up +9.5%
organically with double-digit growth in Media and very solid
Publicis Sapient. Central & Eastern Europe grew +17.1%
organically thanks to double-digit growth in Poland,
Hungary and Czech Republic and the resumption of
activity in Ukraine.
Net revenue in Asia Pacific was +3.8% on a reported
basis, and +2.6% organically. China accelerated to +7.0%
organic growth after +3.7% in Q1. Thailand sequentially
improved while remaining in negative territory due to the phasing
of a large project, while Singapore, Vietnam and
Japan posted double digit growth. Australia and
New Zealand were stable.
In Middle East & Africa, net revenue was up +1.1% on
a reported basis, and +6.5% organically on top of a high comparable
basis of +15.3% in Q2 2022.
Net revenue in Latin America was up +5.9% organically
driven by strong Media like in Q1. The region posted +15.1% on a
reported basis notably benefitting from the acquisition of
Practia.
4 Excluding Outdoor Media activities & the Drugstore
NET REVENUE IN H1 2023
Publicis Groupe’s net revenue for the first half 2023 was 6,318
million euros, up by +7.6% compared to 5,873 million euros in H1
2022. Exchange rate variations over the period had a low negative
impact of 12 million euros. Acquisitions (net of disposals) have a
positive impact of 40 million euros on net revenue. Organic growth
was +7.1% in H1 2023.
Breakdown of H1 2023 net revenue by
sector Automotive
15%
Financial
15%
Healthcare
13%
Food and beverage
13%
TMT
12%
Non Food consumer products
11%
Retail
10%
Public sectors & Others
4%
Leisure & travel
4%
Energy & Manufacturing
3%
On the basis of 3,298 clients representing 91%
of Groupe net revenue
Breakdown of H1 2023 net revenue by
region
EUR
Net revenue
Reported
Organic
million
H1 2023
H1 2022
growth
growth
North America
3,893
3,660
+6.4%
+5.3%
Europe
1,552
1,371
+13.2%
+13.8%
Asia Pacific
550
550
0.0%
+1.7%
Middle East & Africa
179
165
+8.5%
+11.2%
Latin America
144
127
+13.4%
+6.7%
Total
6,318
5,873
+7.6%
+7.1%
Net revenue in North America was up by +5.3% on an
organic basis in the first half (+6.4% on a reported basis). The
U.S. performed strongly at +5.4% organically reflecting the
strength of our model.
Europe posted +13.8% organic growth in H1 (+13.2% on a
reported basis). Excluding the impact of the Groupe’s Outdoor Media
activities and the Drugstore in France, the organic growth in
Europe is +12.1%. The U.K. was at +20.3% organic,
France at +4.0%5, Germany at +9.9% and Central
& Eastern Europe at +14.0%.
Asia Pacific net revenue was up by +1.7% on an organic
basis (flat on a reported basis). China reported an organic
growth of +5.6%, and Australia & New Zealand were
up by +2.4% on an organic basis.
Net revenue in the Middle East and Africa region was up
by +11.2% on an organic basis (+8.5% reported) and up by +6.7% in
Latin America (+13.4% reported).
5 Excluding Outdoor Media activities and the Drugstore
ANALYSIS OF H1 2023 KEY FIGURES
Income Statement
EBITDA amounted to 1,335 million euros in H1 2023,
compared to 1,287 million euros in H1 2022, up by +3.7%. This
represents 21.1% of net revenue.
Personnel costs totaled 4,200 million euros in H1 2023
from 3,888 million euros in H1 2022, an increase of +8.0% close to
the growth in net revenue. As a percentage of net revenue,
personnel expenses were 66.5% in H1 2023, versus 66.2% in H1 2022.
Fixed personnel costs were 3,725 million euros and represented
59.0% of net revenue versus 57.5% in H1 2022. As expected the cost
of freelancers decreased by 68 million euros in H1 2023 or 140
basis points, representing 165 million euros. Restructuring costs
were 45 million euros, up versus 30 million euros in H1 2022.
Non personel costs amounted to 1,025 million euros in H1
2023, compared to 967 million euros in H1 2022. This represented
16.2% of net revenue in H1 2023 versus 16.5% of net revenue in H1
2022. They comprised:
- Other operating expenses (excluding pass-through costs,
depreciation & amortization) amounted to 783 million euros,
compared to 698 million euros in H1 2022. This represents 12.4% of
net revenue compared to 11.9% in H1 2022.
- Depreciation and amortization charge was 242 million
euros in H1 2023 compared to 269 million euros in H1 2022, a
reduction of 10.0%, or 27 million euros. It reflects the
consolidation of our real estate footprint as well as an increase
in the share of SaaS platforms used by the Groupe and directly
expensed.
As a result, the operating margin amounted to 1,093
million euros, up by +7.4% compared to H1 2022. This represents an
operating margin rate of 17.3% in H1 2023, in line with H1
2022.
Operating margin rates by geographies were 18.6% in North
America, 16.3% in Europe, 17.3% in Asia-Pacific, 10.1% in Middle
East/Africa and 2.8% in Latin America.
Amortization of intangibles arising from acquisitions
totaled 142 million euros in H1 2023, up by 5 million euros versus
H1 2022. Impairment losses on real estate consolidation
charge amounted to 112 million euros compared to 44 millions in
H1 2022 in a context of real estate footprint optimization.
In addition, non-current expense was an income of 4
million euros compared to a cost of 76 million euros in H1 2022
which included a loss related to the Groupe’s exit from Russia.
Operating income totaled 843 million euros in H1 2023,
after 761 million euros in H1 2022.
The financial result, comprising the cost of net
financial debt and other financial charges and income, is a charge
of 14 million euros in H1 2023 compared to a charge of 40 million
euros last year.
- The cost of net financial debt was an income of
42 million euros in H1 2023, compared to a cost of 27 million euros
in H1 2022. It included 59 million euros of financial expenses (56
million euros in H1 2022) and financial income of 101 million
euros, improving from 29 million euros last year largely thanks to
higher remuneration on cash balances.
- Other financial income and expenses were a charge of 56
million euros in H1 2023, notably composed by 39 million euros
interest on lease liabilities and 8 million euros cost from the
fair value remeasurement of Mutual Funds. In H1 2022, other
financial income and expenses were a charge of 13 million euros,
notably composed by 45 million euros interest on lease liabilities
and 34 million in income from the fair value remeasurement of
Mutual Funds
The revaluation of earn-out payments amounted to an
income of 1 million euros in H1 2023, compared to a charge of 4
million euros in H1 2022.
The income tax charge was 205 million euros in H1
2023, corresponding to a forecasted effective tax rate of 24.8% in
2023, compared to 189 million euros in H1 2022 corresponding to an
effective tax rate of 23.4%.
The share of profit of associates is a 3 million euros
income in H1 2023 (5 million euros income in H1 2022).
Minority interests were a gain of 5 million euros in H1
2023 compared to a loss of 4 million euros in Groupe results in H1
2022.
Overall, net income attributable to the Groupe was 623
million euros in H1 2023, compared to 537 million euros in H1
2022.
Finally the Earning Per Share was 2.48 euros in H1 2023,
compared to 2.15 euros in H1 2022, up by +15.3%.
Free Cash Flow
EUR million
H1 2023
H1 2022
EBITDA
1,335
1,287
Repayment of lease liabilities and related
interests
(207)
(215)
Investments in fixed assets (net)
(75)
(82)
Financial interest paid (net)
17
(63)
Tax paid
(386)
(251)
Other
41
32
Free cash-flow before changes
in WCR
725
708
TCJA transitional cash tax
related to 2022 paid in January 2023
110
-
Free cash-flow before changes
in WCR
835
708
The Groupe’s free cash flow, before change in working capital
requirements, is up by 17 million euros compared to H1 2022, to 725
million euros. Excluding the TCJA transitional cash tax related to
2022 and paid in January 2023, Free cash flow is up by 127 million
euros to 835 million euros.
Repayment of lease liabilities and related interests amounted to
207 million euros in H1 2023 (215 million euros in H1 2022). Net
investments in fixed assets were 75 million euros (82 million euros
in H1 2022).
Financial interest were an income of 17 million euros, compared
to a cost of 63 million euros in H1 2022, reflecting higher
remuneration on cash balances.
Tax paid amounted to 386 million euros, up by 135 million euros
compared to H1 2022 including 110 million euros due to the TCJA tax
payment realized in January 2023 and related to 2022.
Net debt
Net financial debt amounted to 226 million euros as of June 30,
2023 compared to 634 million euros net cash position as of December
31, 2022 reflecting the seasonality of the activity. The Groupe's
last twelve months average net debt as of June 30, 2023 amounted to
498 million euros compared to 1,024 million euros as of June 30,
2022.
ACQUISITIONS AND DISPOSALS
On January 4, 2023, Publicis announced the acquisition of
Yieldify, a London-based marketing technology company.
Founded in 2013, Yieldify’s leading platform and service enable
companies to better personalize consumers’ website experiences,
driving incremental revenue and other desired outcomes by
delivering the right message at the right time based on a
consumer's profile and stage in their purchase journey. Yieldify
will become part of Epsilon, and its onsite personalization,
conversion optimization and customer journey offerings will
complement Epsilon PeopleCloud to better address the
mid-market.
On January 10, 2023, Publicis announced the acquisition
of Advertise BG, one of the leading performance marketing
agencies in Bulgaria. The strategic acquisition will further
reinforce Publicis Groupe Bulgaria’s competencies in digital
transformation, adding firepower to its existing offering across
digital strategy, data, social media, and digital content
creation.
On March 30, 2023, Publicis announced the acquisition of
Practia, based in Buenos Aires, a leading Latin America
independent technology company and provider of digital business
transformation services. With its 1,200 experienced professionals,
this acquisition will position Publicis Sapient to enter the Latin
America market while establishing a foundation for a nearshore
delivery platform that will enable the company to better service
clients based in North America.
On May 23, 2023, Publicis announced the acquisition of
full stake in Publicis Sapient AI Labs, an innovative
artificial intelligence research and development joint venture
launched in 2020 in partnership between Publicis Sapient, Elder
Research and Tquila. The acquisition will further strengthen
Publicis Sapient’s data & AI capabilities and enable the
company to develop innovative solutions across industries for a
wide range of applications, such as generative AI, natural language
processing (NLP), computer vision and autonomous systems.
On June 5, 2023, Publicis announced the acquisition of
Corra, based in New York, an ecommerce leader recognized by
Adobe as one of the top commerce firms in North America. Corra will
augment Publicis Sapient’s existing expertise in commerce
solutions, including Adobe Commerce, while extending Publicis
Sapient’s offerings in digital and omnichannel commerce. By
acquiring Corra, Publicis Sapient will further establish itself as
a global leader across the entire Adobe Product Suite, in addition
to further cementing its already leading capabilities.
On June 15, 2023, Publicis and Carrefour announced the
launch of their joint-venture Unlimitail, to address the
booming retail media market in Continental Europe, Brazil and
Argentina. The launch of the company comes six months after the
initiative was announced and has been unveiled during VivaTech.
Unlimitail will partner with retailers and brands, bringing the
scale, connectivity and consistency for retail media to reach its
full potential in those geographies. It is built on the most
advanced technologies, “CitrusAd powered by Epsilon”, and the
deepest retail expertise from Carrefour. Unlimitail has already
converted its first 13 retail partners, representing together more
than 120 million loyalty customers.
CSR
During the first half of 2023, Publicis Groupe continued its
actions and innovated in its various priorities.
1 - Diversity, Equity and Inclusion: the 4th edition of
"Pause for Action" in the United States on 27 June 2023 brought
together committed employees to take stock and work together on
inclusion, diversity and social justice. The data published on the
diversity of our teams in the United States shows continued
progress on several indicators, illustrating how far we have come
in three years. The Chairman of the Management Board, Arthur
Sadoun, emphasised the importance of all these actions, which are
assessed over the longer term, and welcomed the financial
commitments made with 45 million euros dedicated to diversity and
social justice, as announced in 2020. This target has been reached
thanks in particular to the "Once And For All Coalition" initiative
which funds content creators in favour of the widest possible
diversity.
In March 2023, a special edition of the Women's Forum was held
in Washington, bringing together 250 experts to discuss education
as one of the keys to equity, with a focus on health, climate and
peace. In June 2023, with a view to the third edition of the
Women's Forum Singapore (scheduled for March 2024), a one-day
"Meet-Up" kicked off work on education as a lever for change, with
80 experts from the region and many talented young people brought
together.
The "Working with Cancer" pledge launched by Arthur Sadoun in
January 2023 has now been taken up by close to 700 companies
worldwide, representing more than 20 million employees. The common
objective is to break the taboo of cancer6 in the workplace,
provide better protection for affected employees and offer them
(and their carers) better support. The Publicis Groupe campaign won
the Grand Prix for Good at Cannes Lions in June 2023.
Marcel, the Groupe's internal platform remains a central place
for employees, hosting quarterly plenary sessions led by country
managers and their leaders. It is also the platform used in the
countries for exchange, work and dialogue with stakeholders on many
topical issues. From February 2023, employees have had access to a
series of modules and live sessions, sharing the latest advances in
artificial intelligence and giving them access to a number of tools
to train and collaborate, in order to best support their
customers.
2 - Responsible marketing and business ethics: the carbon
emissions calculation tool A.L.I.C.E (Advertising Limiting Impacts
& Carbon Emissions) is used for 220 clients/brands. A.L.I.C.E
enables all the Group's activities (creation, production, media,
technology, events, etc.) to measure their impact (100 countries)
using the GHG Protocol method and with the support of Bureau
Veritas for the calculation methodology and the updating of
emission factors. Publicis Groupe remains very involved in the work
carried out by the industry at international level, in particular
Ad Net Zero on the search for a methodological consensus on
measuring impacts with all stakeholders.
6 Cancer or serious diseases
3 - Fighting climate change: as part of the action plan
designed to achieve the carbon emission reduction targets for 2030
(-50%) & 2040 (-90%), validated by SBTi (Science Based Targets
Initiative) and aligned with the 1.5° scenario, the Groupe has
continued its internal work, in particular:
- The introduction of an internal shadow price for carbon to
mobilise all the Group's agencies in reduction actions and to
better quantify the direct impacts linked to the various
activities,
- The introduction of a new voluntary carbon credit plan (VCCs
Plan 2 - 2024/2028) to follow on from the first VCC Plan 1
(2020/2023).
Finally, in June 2023, the success of VivaTech was confirmed
with more than 150,000 visitors in Paris for this 7th edition -
becoming the world's leading event for the Tech sector, with
sessions over three days bringing together more than 11,000
start-ups, around prestigious guests with a peak of 1 billion
impressions on social networks. The VivaTech News channel reached
over 5 million people live over the three days.
The CSR actions of the Groupe and its agencies are publicly
accessible in the CSR section of the Groupe website, and the data
is summarised in the CSR Smart data section.
2023 OUTLOOK
With a better than expected first half 2023, and driven by the
strength of its unique model, the Groupe upgrades its guidance on
all KPIs for the full year 2023 despite persistent macroeconomic
uncertainties.
- Organic growth is now expected at circa +5%, versus the
top half of the +3% to +5% previous guidance.
- Operating margin rate close to 18% versus between 17.5%
and 18% previously.
- Free cash flow before working capital requirement of at
least 1.6 billion euros7, versus circa 1.6 billion euros
previously.
7 Based on 1.10 EUR/USD exchange rate
NEW BUSINESS
EUROPE
Santen France (Health), Glaxo Smith Kline (Health), Comité
Colbert (Creative), Speedy (Data), Carlsberg (Creative), Abeille
Assurances (Creative), Visa (Technology), DomusVi (Technology),
DocuSign (Creative), The Football Association Premier League
(Creative), Allwyn (Creative), Pivovara Daruvar (Creative), heroal
(Creative), Deutsche Telekom (Creative), DATEV (Influence), Samsung
(DTC), PepsiCo (Media), L’Oréal (Media), Tesco (Creative), Asda
(Technology), Renault (Influence), FoodWell (Media), Notino
(Media), Casavo (Creative), La Poste (Media), Dream Games (Media),
Cassa Depositi e Prestiti (Media), Meggle (Media), Île-de-France
Mobilités (Creative), TotalEnergies (Creative), Bioderma
(Creative), Pernod Ricard (Influence), Ovo Energy (Creative), Le
manège à bijoux (Creative), Inserm (Media), SNCF (Digital), John
Lewis (Creative), Alfa Romeo (Air France KLM (Influence), Ikea
(Creative & media), Gruppo Iren (Creative), Bulgari (Creative),
Gruppo Campari (Influence), Western Union (Media), Beko
(Influence), Société Générale (DBT), IVECO (Media), Sony Music
(Digital)
NORTH AMERICA
Krafton (Influence), Intuit (Creative), Shelter Movers
(Influence), Universite de Sherbrooke (Creative), Steak 'n Shake
(Creative), Loblaws (Cretaive), Mattress Firm (Creative), Jasco
Games (Creative), Wondery (CRM), McDonalds (CRM), Milton Hershey
School (Influence), University of Oklahoma (Production), Progress
Residential (Production), Wyndham Hotels & Resorts
(Production), Robert Walters (Production), HP (Commerce), Sun Life
of Canada (Commerce), Rite Aid (Media), The PUR Company (Media),
MTY Food Group (Influence), General Mills (Commerce), Dunkin’
(Creative), Walgreens (Media), KB Home (Creative), Burger King
(Creative), Sanofi (Influence), Virgin Mobile (Creative), Toronto
Parking Authority (Creative), HealthPartners Canada (Influence),
Groupe Atallah (Media), Kicking Horse Coffee (Creative &
Influence), General Motors Company (Production), Tillamook County
Creamery Association (Creative), Signet Jewelers (Media), Blue
Diamond Growers (Media), Turo (Creative), UPS (Creative), LVMH
(Media), Shark Beauty (Creative), New Age Products (Media), Samsung
(Commerce), TGI Fridays (Media)
ASIA PACIFIC/MEA
Miele (CRM), United Homeware Company (Creative), Krungthai Bank
(Creative), Anker (Media), Royal Automobile Club (Media), Charles
& Keith (Commerce), Nick Did This (Media), Nine Network
(Creative), Essity (Media), OSHO (DBT), La Trobe University (DBT),
LVMH (Production), Cathay Pacific Airways (Commerce), Pepsico
(Production), Duolingo (Creative), Aeries Financial Technologies
(Media), Central Provident Fund Board (Production), AIA Company
(Media), Haleon (Production), LOréal (Media & Production), The
Standard Bank of South Africa (Creative), Sanofi (Creative), Nestlé
(Production), Diageo (Commerce), Mondelez (Production), Pizza Hut
(Creative), Cancer Council Victoria (Media), Emirates NBD
(Creative), Grupo Bimbo (Creative), Microsoft (Influence), JioMart
(Creative), AkBank (Media), Novartis (Creative & Production),
United Breweries (Production), Charlotte Tilbury Beauty (Creative),
Genesis Motor (Creative), Torrent Pharmaceuticals (Creative), More
Retail (Media), GlaxoSmithKline (Creative), Crocs (Creative),
Shanghai Neobio (Creative), FWD Group (Media), Bank of China
(Media), Yili (Creative), Singhealth (Digital), P&G (Digital),
Oritain (Creative & Media), Neom Company (Creative), Renault
(Media), Bosideng (Production), HSBC (Creative), BASF (Creative),
Union Bank of the Philippines (Creative), Roborock (Production),
Indeed (Influence), Samsonite (Media), New Balance (Production),
Keypath Education (Media), Jio-bp (Digital), Enamor (Digital),
UniScholars (Creative)
LATAM
LOréal (Media), Bayer (Media), Samsung (Media), Nestlé
(Creative), PicPay (Creative), Pizza Hut (Commerce), Polla Chilena
(Media)
GLOBAL
Adobe (Media), Mondelez (Production), King (Creative), Ninjacart
(Creative), Alvarium Tiedemann (Creative), Amplifon (Creative),
Pfizer (Creative, Media, Data, Production)
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 at the
date of this document and, other than as required by applicable
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Appendices
Net revenue: organic growth
calculation
(million euro)
Q1
Q2
H1
Impact of currency at end June
2023 (million euro)
2022 net revenue
2,800
3,073
5,873
GBP (2)
(20)
Currency impact (2)
61
(73)
(12)
USD (2)
43
2022 net revenue at 2023 exchange rates
(a)
2,861
3,000
5,861
Others
(35)
2023 net revenue before acquisition impact
(b)
3,065
3,213
6,278
Total
(12)
Net revenue from acquisitions (1)
14
26
40
2023 net revenue
3,079
3,239
6,318
Organic growth (b/a)
+7.1%
+7.1%
+7.1%
(1)
Acquisitions (Profitero, Practia, Tremend,
Tquila, Wiredcraft, Yieldify, Retargetly, Corra, Bizon,
VivNetworks, Cheat, Changi, ARBH, Perlu, Advertise Bulgaria), net
of disposals (Russia, Qorvis, Makers Lab)
(2)
EUR = USD 1.081 on average in H1 2023 vs.
USD 1.094 on average in H1 2022
EUR = GBP 0.877 on average in H1 2023 vs.
GBP 0.842 on average in H1 2022
Definitions
Net revenue or Revenue less pass-through costs:
Pass-through costs mainly concern production and media activities,
as well as various expenses incumbent on clients. These items that
can be re-billed to clients do not come within the scope of
assessment of operations, net revenue is a more relevant indicator
to measure the operational performance of the Groupe’s
activities.
Organic growth: Change in net revenue excluding the
impact of acquisitions, disposals and currencies.
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization): Operating margin before depreciation &
amortization.
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 net revenue.
Headline Group Net Income: Net income attributable to the
Groupe, after elimination of impairment charges / real estate
transformation expenses, amortization of intangibles arising on
acquisitions, the main capital gains (or losses) on disposals,
change in the fair value of financial assets and the revaluation of
earn-out costs.
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): Headline group net income, divided by average number
of shares, diluted.
Capex: Net acquisitions of tangible and intangible
assets, excluding financial investments and other financial
assets.
Free Cash Flow before changes in working capital
requirements: Net cash flow from operating activities less
interests paid & received, repayment of lease liabilities &
related interests and before changes in WCR linked to operating
activities
Free Cash Flow: Net cash flow from operating activities
less interests paid & received, repayment of lease liabilities
& related interests
Net Debt (or financial net debt): Sum of long and short
financial debt and associated derivatives, net of treasury and cash
equivalents, excluding lease liabilities since 1st January
2018.
Average net debt: Average of monthly net debt at end of
month.
Dividend pay-out: Dividend per share / Headline diluted
EPS.
Organic Growth vs. 2019: calculated as
([1 + organic growth (n-3)] * [1 + organic growth (n-2)] * [1 +
organic growth (n-1)] * [1 + organic growth (n)])-1
Consolidated income statement
(in millions of euros)
June 30, 2023
(6 months)
June 30, 2022
(6 months)
December 31, 2022
(12 months)
Net revenue8
6.318
5,873
12,572
Pass-through revenue
787
674
1,624
Revenue
7,105
6,547
14,196
Personnel costs
(4,200)
(3,888)
(8,211)
Other operating costs
(1,570)
(1,372)
(3,184)
Operating margin before depreciation
& amortization
1,335
1,287
2,801
Depreciation and amortization
(242)
(269)
(535)
(excluding intangibles from
acquisitions)
Operating margin
1,093
1,018
2,266
Amortization of intangibles from
acquisitions
(142)
(137)
(287)
Impairment loss
(112)
(44)
(109)
Other non-current income and expenses
4
(76)
(103)
Operating income
843
761
1,767
Financial expense
(59)
(56)
(118)
Financial income
101
29
101
Cost of net financial debt
42
(27)
(17)
Other financial income and expenses
(56)
(13)
(100)
Revaluation of earn-out payments
1
(4)
(2)
Pre-tax income of consolidated
companies
830
717
1,648
Income taxes
(205)
(189)
(431)
Net income of consolidated
companies
625
528
1,217
Share of profit of associates
3
5
5
Net income
628
533
1,222
Of which:
- Net income attributable to
non-controlling
5
(4)
-
interests
Net income attributable to equity
holders of the parent company
623
537
1,222
Per share data (in euros) - Net
income attributable
to equity holders of the parent
company
Number of shares
250,829,338
250,274,576
250,972,110
Earnings per share
2.48
2.15
4.87
Number of diluted shares
253,618,058
252,508,128
253,605,167
Diluted earnings per share
2.46
2.13
4.82
8 Net revenue: Revenue less pass-through costs. Those costs are
mainly production & media costs and out-of-pocket expenses. As
these items that can be passed on to clients are not included in
the scope of analysis of transactions, the net revenue indicator is
the most appropriate for measuring the Groupe’s operational
performance.
Consolidated statement of comprehensive income
(in millions of euros)
June 30, 2023
(6 months)
June 30, 2022
(6 months)
December 31, 2022
(12 months)
Net income for the period
(a)
628
533
1,222
Comprehensive income that will not be
reclassified to income statement
- Actuarial gains (and losses) on defined
benefit plans
(6)
91
42
- Deferred taxes on comprehensive income
that will not be reclassified to income statement
2
(22)
(10)
Comprehensive income that may be
reclassified to income statement
- Remeasurement of hedging instruments
13
8
(21)
- Consolidation translation
adjustments
(217)
676
311
Total other comprehensive income
(b)
(208)
753
322
Total comprehensive income for the
period (a) + (b)
420
1,286
1,544
Of which:
- Comprehensive income for the period
attributable to non-controlling interests
(2)
(1)
-
- Comprehensive income for the period
attributable to equity holders of the parent company
422
1,287
1,544
Consolidated balance sheet
(in millions of euros)
June 30, 2023
December 31, 2022
Assets
Goodwill, net
12,636
12,546
Intangible assets, net
1,094
1,247
Right-of-use assets related to leases
1,672
1,753
Property, plant and equipment, net
582
610
Deferred tax assets
199
186
Investments in associates
55
55
Other financial assets
351
394
Non-current assets
16,589
16,791
Inventories and work-in-progress
319
327
Trade receivables
10,729
12,089
Contract assets
1,451
1,149
Other receivables and current assets
930
926
Cash and cash equivalents
3,682
4,616
Current assets
17,111
19,107
Total assets
33,700
35,898
Equity and
liabilities
Share capital
102
102
Additional paid-in capital and retained
earnings, Groupe share
9,086
9,533
Equity attributable to holders of the
parent company – Groupe share
9,188
9,635
Non-controlling interests
(44)
(35)
Total equity
9,144
9,600
Long-term borrowings
3,085
2,989
Long-term lease liabilities
2,124
2,197
Deferred tax liabilities
203
219
Long-term provisions
553
504
Non-current liabilities
5,965
5,909
Trade payables
13,861
15,660
Contract liabilities
444
549
Short-term borrowings
625
627
Short-term lease liabilities
353
360
Income taxes payable
328
486
Short-term provisions
278
291
Other creditors and current
liabilities
2,702
2,416
Current liabilities
18,591
20,389
Total equity and liabilities
33,700
35,898
Consolidated statement of cash flows
(in millions of euros)
June 30, 2023
(6 months)
June 30, 2022
(6 months)
December 31, 2022
(12 months)
Cash flow from
operating activities
Net income
628
533
1,222
Neutralization of non-cash income and
expenses:
Income taxes
205
189
431
Cost of net financial debt
(42)
27
17
Capital losses (gains) on disposal of
assets (before tax)
(2)
76
103
Depreciation, amortization and impairment
losses
496
450
931
Share-based compensation
41
30
64
Other non-cash income and expenses
51
16
86
Share of profit of associates
(3)
(5)
(5)
Dividends received from associates
2
3
3
Taxes paid
(386)
(251)
(430)
Change in working capital requirements
(1,053)
(858)
(5)
Net cash flows generated by (used in)
operating activities (I)
(63)
210
2,417
Cash flow from
investing activities
Purchases of property, plant and equipment
and intangible assets
(75)
(84)
(198)
Disposals of property, plant and equipment
and intangible assets
-
2
4
Purchases of investments and other
financial assets, net
(10)
18
11
Acquisitions of subsidiaries
(158)
(400)
(523)
Disposals of subsidiaries
-
(43)
(43)
Net cash flows generated by (used in)
investing activities (II)
(243)
(507)
(749)
Cash flow from
financing activities
Dividends paid to holders of the parent
company
-
-
(603)
Dividends paid to non-controlling
interests
(7)
(3)
(4)
Proceeds from new borrowings
4
5
-
Repayment of borrowings
-
(10)
(10)
Repayment of lease liabilities
(168)
(170)
(317)
Interest paid on lease liabilities
(39)
(45)
(87)
Interest paid
(86)
(84)
(101)
Interest received
103
21
84
Buy-outs of non-controlling interests
(2)
-
(3)
Net (buybacks)/sales of treasury shares
and warrants
(193)
7
41
Net cash flows generated by (used in)
financing activities (III)
(388)
(279)
(1,000)
Impact of exchange rate fluctuations
(IV)
(239)
258
300
Change in consolidated cash and cash
equivalents (I + II + III + IV)
(933)
(318)
968
Cash and cash equivalents on January 1
4,616
3,659
3,659
Bank overdrafts on January 1
(1)
(12)
(12)
Net cash and cash equivalents at
beginning of year (V)
4,615
3,647
3,647
Cash and cash equivalents at closing
date
3,682
3,342
4,616
Bank overdrafts at closing date
-
(13)
(1)
Net cash and cash equivalents at
closing date (VI)
3,682
3,329
4,615
Change in consolidated cash and cash
equivalents (VI - V)
(933)
(318)
968
Consolidated statement of changes in equity
Number of outstanding shares (in millions of euros)
Share
capital Additional paid-in capital Reserves and
earnings brought forward Translation reserve Fair
value reserve Equity attributable to equity holders of the
parent company Non-controlling interests Total
equity
251,992,065
December 31, 2022
102
4,037
5,324
85
87
9,635
(35)
9,600
Net income
623
623
5
628
Other comprehensive income, net
of tax
(210)
9
(201)
(7)
(208)
Total income and expenses for
the period
0
0
623
(210)
9
422
(2)
420
-
Dividends
(701)
(25)
(726)
(7)
(733)
-
Share-based compensation, net of
tax
50
50
50
Effect of acquisitions and
commitments to buy-out non-controlling interests
1
1
1
-
Equity warrant exercise
0
0
0
(1,490,149)
(Buybacks)/Sales of treasury
shares
(194)
(194)
(194)
250,501,916
June 30, 2023
102
3,336
5,779
(125)
96
9,188
(44)
9,144
Number of outstanding
shares
(in millions of euros)
Share capital
Additional paid-in
capital
Reserves and earnings brought
forward
Translation
reserve
Fair value reserve
Equity attributable to equity
holders of the parent company
Non-controlling
interests
Total equity
249,600,509
December 31, 2021
101
4,581
4,056
(226)
76
8,588
(33)
8,555
Net income
537
537
(4)
533
Other comprehensive income, net
of tax
673
77
750
3
753
Total income and expenses for
the period
-
-
537
673
77
1,287
(1)
1,286
-
Dividends
(599)
(599)
(3)
(602)
246,225
Share-based compensation, net of
tax
29
29
29
Effect of acquisitions and
commitments to buy-out non-controlling interests
2
2
3
5
161,412
Equity warrant exercise
1
3
4
4
1,116,166
(Buybacks)/Sales of treasury
shares
3
3
3
251,124,312
June 30, 2022
102
4,584
4,028
447
153
9,314
(34)
9,280
Earnings per share (basic and diluted)
(in millions of euros, except for share
data)
June 30, 2023
June 30, 2022
Net income used for the calculation of
earnings per share
Net income share attributable to equity
holders of the parent company
A
623
537
Impact of dilutive instruments:
- Savings in financial expenses related to
the conversion of debt instruments, net of tax
-
-
Net income – Groupe share – diluted
B
623
537
Number of shares used to calculate
earnings per share
Number of shares at January 1
254,311,860
253,462,409
Shares created over the period
-
133,430
Treasury shares to be deducted (average
for the period)
(3,482,522)
(3,321,264)
Average number of shares used for the
calculation
C
250,829,338
250,274,576
Impact of dilutive instruments:
- Free shares and dilutive stock
options
2,788,720
2,124,694
- Equity warrants (BSA)
-
108,858
Number of diluted shares
D
253,618,058
252,508,128
(in euros)
Earnings per share
A/C
2.48
2.15
Diluted earnings per share
B/D
2.46
2.13
Headline earnings per share (basic and diluted)
(in millions of euros, except for share
data)
June 30, 2023
June 30, 2022
Net income used to calculate headline
earnings per share(1)
Net income – Groupe share
623
537
Items excluded:
- Amortization of intangibles from
acquisitions, net of tax
105
103
- Impairment loss, net of tax
83
33
- Revaluation of earn-out payments
(1)
4
- Main capital gains and losses on
disposal of assets and fair value adjustment of financial assets,
net of tax(2)
3
50
Headline Groupe net income
E
813
727
Impact of dilutive instruments:
- Savings in financial expenses related to
the conversion of debt instruments, net of tax
-
-
Headline Groupe net income, diluted
F
813
727
Number of shares used to calculate
earnings per share
Number of shares at January 1
254,311,860
253,462,409
Shares created over the period
-
133,430
Treasury shares to be deducted (average
for the period)
(3,482,522)
(3,321,264)
Average number of shares used for the
calculation
C
250,829,338
250,274,576
Impact of dilutive instruments:
- Free shares and dilutive stock
options
2,788,720
2,124,694
- Equity warrants (BSA)
-
108,858
Number of diluted shares
D
253,618,058
252,508,128
(in euros)
Headline earnings per share(1)
E/C
3.24
2.90
Headline earnings per share –
diluted(1)
F/D
3.21
2.88
(1) EPS after elimination of impairment losses, amortization of
intangibles from acquisitions, the main capital gains and losses on
disposal and fair value adjustment of financial assets and
revaluation of earn-out payments.
(2) As of June 30, 2023, the main capital gains and losses on
disposal amount to euro 4 million and the fair value adjustment of
financial assets amounts to euro (7) million. At June 30, 2022, the
main capital gains and losses on disposal amount to euro (79)
million and the fair value adjustment of financial assets amounts
to euro 29 million.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230719373017/en/
Lizzie Dewhurst, Corporate Communications +44 794 991 81 94
lizzie.dewhurst@publicis.com Michelle McGowan, Corporate
Communications +1 312 315 5259 michelle.mcgowan@publicisgroupe.com
Alessandra Girolami, Investor Relations + 33 1 44 43 77 88
alessandra.girolami@publicisgroupe.com Lionel Benchimol, Investor
Relations + 33 1 44 43 70 27 lionel.benchimol@publicisgroupe.com
Lorène Fleury, Investor Relations + 33 1 44 43 57 24
lorene.fleury@publicisgroupe.com
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