PUBLICIS GROUPE: H1 2012 Results EPS Diluted +24.3%

PARIS, July 20, 2012 /PRNewswire/ --

1st Half-Year 2012 (EUR million)

  • Revenue                                 3,084    +14.3%
  • Organic Growth                                    +2.8%
  • Operating margin                          415    +14.0%
  • Taux de marge opérationnelle                      13.5%
    (2011 : 13,5%)
  • Net income, attributable to the Groupe    275    +19.0%
  • Diluted EPS (€)                          1.28    +24.3%

Message from Maurice Lévy, Chairman and CEO of Publicis Groupe:

« Just as we announced in our February forecast, organic growth has leveled off in the second quarter. This standstill results essentially from non-recurring events.

New Business has maintained a strong profile, particularly in digital, which should see another double digit increase.

Our third quarter should see a return to much higher growth, at rates far closer to our usual performance. This will confirm our forecast for the year overall.

At 13,5%, our margin is the same as last year's, notwithstanding weak growth in the second quarter. This performance confirms our forecast for the year.

Net income has risen sharply (+19%) and diluted EPS is up by 24%, boosting our balance sheet and giving us the resources we need to meet our goals for profitability and growth.

The world economic situation is both volatile and uncertain. We need to maintain the greatest possible vigilance regarding our costs and investments. Our priority in this respect is to strengthen the competitive profile of the Groupe, in terms of our operations, our product and our penetration of certain markets. In order to ensure the best possible service to our clients and thus the future of our teams, our constant objective will continue to be above-market growth in conditions of profitability. »

Publicis Groupe's Supervisory Board met on July 18, 2012, under the chairmanship of Elisabeth Badinter, to examine the first half-year accounts for 2012 presented by Maurice Lévy, Chairman of the Management Board.

Key figures

    EUR million, except percentages
    and per-share data (EUR)               H1 2012      H1 2011     2012/2011
    Data from the Income Statement
 
    Revenue                                  3,084        2,699         14.3%
    Operating margin before
    depreciation and amortization              468          411         13.9%
    % of revenue                             15.2%         15.2%
    Operating margin                           415          364         14.0%
    % of revenue                             13.5%         13.5%
    Operating income                           392          349         12.3%
    Net income attributable to
    theGroupe                                  275          231         19.0%
 
    Earnings per share (1)                    1.42         1.14         24,6%
 
    Diluted Earnings per share (2)            1.28         1.03         24,3%
 
    Free cash flow before changes in
    working capital requirements               273          269          1.5%
                                           
                                           June 30,   December 31,
    Data from the Balance Sheet               2012           2011
    Total assets                            15,418         16,450
    Groupe share of consolidated
    shareholders' equity                     3,561          3,898


(1)    Earnings per share calculations based on an average of 193.0 million shares in circulation in the first half of 2012, and 202.2 million in the first half of 2011

(2)      Diluted Earnings per share based on an average of 226.6 million shares in the first half of 2012, and 237.2 million in the first of 2011. These calculations include stock options, free shares, equity warrants and convertible bonds that dilute EPS.  Stock options and equity warrants are deemed to have a dilutive effect when their strike price is below the average share price for the period.

Activity in H1 2012

Growth forecasts for 2012 had to be revised downwards as a result of the global economic slowdown, the financial crisis in Europe and the difficulties encountered in a number of economic sectors. At the start of the year, the IMF's global economic growth forecast was 3,5% for 2012, but this estimate should be revised downwards before the fall.

This was the context in which Publicis Groupe found its activity slowing down throughout the world despite a good first quarter and after a number of non-recurring elements (loss of the GM media and Search account, downturn of the healthcare business cycle).

Q2 2012 revenue

Growth of 15.5% saw consolidated revenue, as published, rise to 1,632 million euro in Q2 2012. The impact of exchange rates was 101 million euro.

Organic growth was 1.6%, partly due to the very difficult comparable in Q2 2011 (very strong growth of 7.6%) the European market weakness, the discontinuation of the GM media contract in the second quarter, the downturn in the healthcare cycle.

Q2 2012 revenue by region

    (EUR million)             Revenue          As Published    Organic growth
                    Q2 2012      Q2 2011    Q2 2012 / Q2 2011     Q2 2012
    Europe*            468          459           +2.0%             -1.7%
    North America      782          639          +22.4%             +1.8%
    BRIC + MISSAT**    209          165          +26.7%             +7.8%
    Rest of the
    world              173          150          +15.3%             +3.9%
    Total            1,632        1,413          +15.5%             +1.6%
 


*    Europe excluding Russia and Turkey

**    MISSAT: Mexico, Indonesia, Singapore, South Africa and Turkey

H1 2012 revenue

Consolidated revenue for the first half of 2012 amounted to 3,084 million euro, i.e. a 14.3% increase from 2,699 million for the corresponding period in 2011. The impact of exchange rates was 139 million euro.

Organic growth was 2.8% in the first half-year of 2012. This growth rate is lower than in H1 2011 due to the slowing down of the global economy in the second quarter as well as to the above-mentioned non-recurring elements.

  • Digital activities now account for 33.2% of the Groupe's revenue, compared with 29.0% in 2011. Organic growth was 9.6%, a slowdown by comparison with the first quarter due to a number of non-recurring elements such as the loss of the GM (Search) account and the fall-off in investment in the healthcare sector.

  • High-growth economies generated 24.4% of total revenue, up from 23.2% in H1 2011. Between them, the BRIC and MISSAT countries achieved 8.9% organic growth in H1 2012.

In 2012, the breakdown of consolidated revenue was as follows: 33% from digital services (up from 29% in 2011), 30% from advertising (after 31% in 2011), 19% from the SAMS (20% in 2011) and 18% from media (20% in 2011).

-H1 2012 revenue by region

    (EUR million)             Revenue            As published   Organic growth
                                                 H1 2012 / H1
                       H1 2012      H1 2011          2011          H1 2012
    Europe*                880          852          +3.3%           +0.6%
    North America        1,506        1,272         +18.4%           +2.6%
    BRIC + MISSAT**        385          299         +28.8%           +8.9%
 
    Rest of the
    world                  313          276         +13.4%           +3.9%
    Total                3,084        2,699         +14.3%           +2.8%


*    Europe excluding Russia and Turkey

**    MISSAT: Mexico, Indonesia, Singapore, South Africa and Turkey

All regions recorded organic growth in the first half of 2012.

-    Europe: the UK posted 4.1% growth while France rose 0.9%. The other western European countries (Germany, Italy, Spain) slowed down, though the trend was more noticeable in the southern European countries.

-    North America: with growth of 2.6%, North America continued to demonstrate its resilience despite the loss of the GM media and Search account and the sluggishness in the healthcare sector. However, this does not in any way question the development of digital services in the USA, as this sector is very much a growth driver by comparison with analog advertising sectors.

-    The BRIC+MISSAT countries posted an aggregate growth rate of 8.9%, with notable performances on the part of Brazil (+12.5%), Russia (+5.9%), India (+15.1%), China (+7.8%), Mexico (+8.9%) and South Africa (20.8%).

-    The Rest of the world, which includes Australia and Japan, grew by 3.9%.

Analysis of key figures

Operating margin & Operating income

The Operating margin before depreciation and amortization was 468 million euro in H1 2012, up 13.9% from 411 million for the corresponding period in 2011.

The Operating margin rose 14% to 415 million euro.

Staff costs reached 1,978 million euro in H1 2012 (up 13.6% increase from 1,740 million for the corresponding period in 2011), i.e. 64.1% of consolidated revenue. Fixed staff costs stood at 57.2% of total revenue, after 57.1% in the first half of 2011. Strict cost management leads the Group to operate in a selective manner with investments in talents through selective recruitments  in growth areas and containing costs in low growth sectors or countries segments. Current investments (ERP or development in technologies) should generate operational efficiency and reduce costs in the medium term. Restructuring costs totaled 31 million euro for the period.

Other operating costs rose 16.4% to 638 million euro (including depreciation and amortization), i.e. 20.7% of total revenue. This includes commercial expenses, which rose 16.7%, of which exceptional items totaled 15 million euro. Conversely, administrative costs continued to fall thanks to programs aimed at optimizing various operating expenses in conjunction with the ramp-up of regional shared services centers. The impact of acquisition-related costs was close to 3 million euro.

Depreciation and amortization for the period was 53 million euro, up from 47 million in H1 2011.

The Operating margin reached 415 million euro, up 14% from 364 million in the first half of 2011.

Operating margin rate stood at 13.5% at June 30, 2012, at exactly the same level as a year beforehand. This percentage remained stable at a high level despite non-recurring commercial expenses totaling 15 million euro and the increased investment in talent and technology.

Amortization of intangibles arising from acquisitions totaled 22 million euro in the first half-year 2012, up from 17 million for the corresponding period in 2011. An impairment charge of 5 million euro was booked during the period (no impairments in H1 2011), and Other non-recurring income amounted to 4 million euro, after a net income of 2 million in 2011.

Operating income was 392 million euro for the period, up from 349 million in H1 2011.

Financial income/expense was a net expense of 8 million euro for the first six months of 2012, down from a net expense of 28 million for the same period in 2011. This performance can be attributed to extraordinary income of 17 million euro  arising from the redemption of the 2012 Eurobonds at maturity and interest rate swap hedging unwinding.

Income tax for the period was 108 million euro, i.e. a forecast effective tax rate of 28.2%, up from 91 million in H1 2011 (effective tax rate unchanged).

The share of profit of Associates amounted to 7 million euro in H1 2012, down from 10 million in H1 2011. Minority interests totaled 8 million euro for the period, down from 9 million in H1 2011.

Net income attributable to the Groupe totaled 275 million euro for the period, up 19% from 231 million in H1 2011.

Free cash Flow

The Groupe's free cash flow, before changes in working capital requirements (WCR), totaled 273 million euro in H1 2012, slightly up from 269 million in 2011.

Net financial debt

Net financial debt was 902 million euro at June 30, 2012, up from 210 million euro at June 30, 2011. This net debt figure was after buying back 18 million shares from Dentsu at a cost of 644 million euro in February. The Groupe's debt / equity ratio was 0.25 at June 30, 2012, after 0.06 at June 30, 2011.

The average net debt in H1 2012 was 856 million euro, (341 million euro if the share buyback from Dentsu is excluded) up from 191 million at June 30, 2011.

At June 30, 2012, the Groupe had available, liquidities totaling 2,626 million euro.

Shareholders' equity

Consolidated shareholders' equity (including minority interests) stood at 3,600 million euro at June 30, 2012, compared with 3,407 million after H1, 2011.

The Groupe's share of consolidated shareholders' equity decreased from 3,898 million euro at December 31, 2011 to 3,561 million at June 30, 2012.  This was essentially due to the buyback of 18 million Publicis Groupe shares from Dentsu at a cost of 644 million euro.

Distinctions / creativity

At the 59th edition of the Cannes Lions International Creativity Festival, Publicis Groupe took a total of 153 Lions, including 3 Grand Prix, 42 Gold, 42 Silver and 66 Bronze awards.

These results show a marked progression in recent years: 101 in 2009, 116 in 2010, and 119 in 2011.

Leo Burnett beat its personal best with 54 Lions, as did Publicis Worldwide with 36 Lions.  Saatchi received 37 Lions, BBH capped a remarkable year with 21 Lions, and BBH London came 2nd in the Agency of the Year category.

Duval Guillaume Modem Antwerp won the Media Agency of the Year award.

Leo Burnett took the Gunn Report's 2011 Asia Pacific Agency Network of the Year award in addition to 46 Lotus awards at ADFEST 2012, becoming the network that received the most awards at the 2012 International Andy Awards 2012, as well as ranking second in the most-awarded network category at the 2012 North American Effie Awards. Leo Burnett was the network that took most awards at the 2012 MENA Cristal Awards. It also took a further 32 prizes at the Clio Awards.

According to the 2011 Gunn Report, Saatchi & Saatchi's "Welcome Back" campaign for T-Mobile received the second highest number of awards for any campaign in the world. Among other awards, Saatchi & Saatchi Belgrade took the Grand Prix at the EACA Care Awards.

Starcom MediaVest Group was voted North America's most efficient media network at the 2012 Effie Awards, and Starcom received two Grand Prix awards for its creativity in 2012 (Grand Prix for Brand Content, and Grand Prix for Client Marketing Strategies).    

MSLGROUP Asia was named PR Network of the Year at the Asia-Pacific PR Campaign Awards

Furthermore, several agencies received Agency of the Year awards:

  • Saatchi & Saatchi Italy was named Agency of the Year after receiving the most awards at the 2012 Italian Art Directors Club;
  • Badillo Nazca Saatchi & Saatchi was voted Agency of the Year for the fourth successive year at the 2012 Cispide Awards;
  • Saatchi & Saatchi Poland was named Agency of the Year by KTR;
  • Starcom MediaVest Group was Agency of the Year at the Festival of Media Global 2012;
  • Publicis Conseil became Agency of Angels 2012 at the Adprint Festival;
  • Leo Burnett Sydney and Melbourne took Promotion Agency of the Year at the AdNews Awards;
  • Hanmer MSL (MSLGROUP) named Agency of the Year by the Public Relations Council in India;
  • Publicis Brussels named Agency of the Year at the Belgian Merit Awards;
  • Publicis Consultants France received the French Agency of the Year 2011 award from the Holmes Report;
  • Performics China named 2011 Agency of the Year by Google;
  • Duval Guillaume named Agency of the Year by Belgium's Creative Club.

Groupe's CSR policy

The Groupe's undertakings, as indeed those of each network and agency, are structured around four themes (social issues, society, governance / economics, and the environment):

- social issues: training and skills

- governance: ethics and profitability

- environment: consuming less, consuming better

- society: Publicis and its role in society

In 2012, the Groupe published its third Corporate Social Responsibility (CSR) report, thus consolidating the scope of its undertakings while significantly increasing the number of indicators in force. This report is available at http://www.publicisgroupe.com/www.publicisgroupe.com.

External growth

Since early 2012, Publicis Groupe has continued to make targeted acquisitions in pursuance of its strategy:

  • Mediagong: an agency in France, specialized in digital strategy consulting, the social media, advergaming and mobile communications.
  • On January 26, Publicis Groupe tabled a friendly bid for Pixelpark, Germany's largest independent group in digital communications. The proposed takeover was approved by the German Federal Cartel Office on February 15, 2012. By the end of March, Publicis Groupe had acquired almost 78% of Pixelpark's shares.
  • The Creative Factory in Russia in order to broaden Saatchi & Saatchi's foothold in this country. This Moscow-based company has a big reputation in its specialist fields, i.e. marketing, digital services, digital production and video.
  • U-LinkBusinessSolutions Co.Ltd., one of China's top agencies specialized in healthcare communications, as well as KingHarvests and Luminous, two specialized marketing agencies based in China and Singapore.
  • Flip Media, one of the large networks of digital agencies in the Middle East. This full-service network is positioned throughout the digital chain, offering services ranging from strategy, digital design and production, to content and technological platforms.
  • Indigo Consulting, Mumbai-based, a full-service Indian agency providing specialized website design and development, referencing, usability research and testing, and marketing online, on mobiles and in the social media. Indigo Consulting will strengthen the Leo Burnett network in India.
  • Longtuo: Beijing-based, digital marketing company with particularly strong e-commerce expertise in creation, customer acquisition, marketing solutions and measurement tools. Longtuo has become part of the Razorfish network and will be named Razorfish Longtuo China.
  • BBR Group, one of Israel's leading communications groups. BBR is a network of creative agencies offering a range of services in creation, brand identity, media, digital services and design.
  • Simultaneously, Publicis Groupe acquired a 20% stake in Ramallah-based ZOOM Advertising, a subsidiary of the Massar Group, and in doing so became the first communications group to invest in the Palestinian market.  Zoom is to be renamed Publicis Zoom and will be aligned with the Publicis Worldwide network. Zoom was founded in 2004 and quickly established itself as the leading agency in the Palestinian communications industry, providing sophisticated digital and interactive tools. Along with its expertise in multimedia applications, Zoom is the local leader in creative and brand strategy.

- Other transactions:

  • In March2012, FranceTélécom-Orange and PublicisGroupe announced a partnership with Iris Capital Management, thus setting up the leading European venture capital investor in the digital economy. Orange and Publicis will together contribute 150 million euro to this initiative. In Q1 2012, Orange and Publicis Groupe each acquired a 24.5% minority stake in Iris Capital Management.
  • In May, Publicis Groupe announced the operational alignment of two of its agencies in France: Saatchi & Saatchi. The new entity, known as Saatchi & Saatchi Duke, will offer shared and complementary services to advertisers. This initiative combines Duke, a pioneering agency in digital communications, with Saatchi & Saatchi, known best for its creativity and strategic ideas. The new entity, Saatchi & Saatchi Duke will provide advertisers with a fluid, integrated response to the issues of consistency and effectiveness that brands face in today's context of audience fragmentation and new consumer demands.

Financial transactions

  • On January 31, 2012, Publicis Groupe SA redeemed its 2012 Eurobonds at maturity for a total of 506 million euro in principal. This redemption was funded by available liquidities within the Groupe.
  • On February 17, Publicis Groupe bought back 18 million of its own shares from Dentsu in the form of a block transaction before the market opened for trading on February 17, for a total of 644.4 million euro (i.e. 35.80 euro per share). The buyback was at a discount of 13.35% to the closing price on February 16, 2012. It will enhance diluted earnings per share by 6% in 2012 and by 7% over a full year. Of the 18 million shares purchased, Publicis canceled 10,759,813. The remaining 7,240,187 shares are being held as Treasury stock and will serve to cover presence- and performance-based share attributions, stock options plans and acquisition programs. This share buyback was entirely funded by available liquidities within the Groupe.
  • On June 29, 2012, Publicis Groupe SA announced its decision to exercise its early redemption option with respect to all of its 3.125% bonds convertible into and/or exchangeable for new or existing Publicis Groupe shares due July 30, 2014, issued on June 24, 2009.

New Business

Not including the loss of the GM media account but including all other losses, Publicis Groupe was awarded new business totaling 1.8 billion dollars.

Recent events

Acquisitions

-     On July 7, 2012, in two separate transactions, Publicis Groupe acquired a 51% stake in the BBH network from founders Nigel Bogle and Sir John Hegarty as well as from other partners. BBH is now wholly-owned by Publicis, the latter having previously held a 49% stake for a number of years. Publicis also acquired the entire share capital of NEOGAMA/BBH (acquisition of the 34% held by BBH and the 66% stake owned by founder Alexandre Gama and his associates).  BBH employs around 1,000 people and its network, excluding Brazil, generated revenue of 112.2 million euro in 2011. NEOGAMA, a São-Paulo based agency with operations in Rio de Janeiro, has a staff of 270 and posted revenue of 42.2 million euro in 2011. Through this deal, Triacom and Made in Moon - its two subsidiaries specialized in digital and point-of-sale communications - have become part of Publicis Groupe.

-     On July 11, 2012, Publicis Groupe announced the acquisition of strategic communications consultancy CNC - Communications & Network Consulting AG headquartered in Munich. CNC will become part of MSLGROUP, the Groupe's flagship strategic and corporate communications network.

CNC, which employs around 100 people, is present in 14 cities across Europe, Asia, and North and South America. Since it was founded in 2002, CNC has consistently delivered double-digit annual growth.

-    On July 12, Publicis Groupe announced the merging of the Kaplan Thaler Group with Publicis New York, thus constituting an even stronger creative network that has become Publicis Groupe's flagship in the USA.

Financial transactions

-     Océane Publicis Groupe 2014-3,125% issuer call. On July 19, 2012 24,257,895  Bonds (99,95% of outstanding Bonds) were converted into 24,403,416 new shares. The exercise of the issuer call is a success. It will translate into a decrease of the net debt of €644million, an increase of equity of €644 million, an improved net debt to equity ratio from 0.25 to 0.06 at June 30 2012 (proforma). Interest charges will be reduced by €16 million in the second half year 2012 compared to the second half year 2011 and by €39 million on a full year basis.

Outlook

In a global economic context that is increasingly marked by GDP downwards revisions, ZenithOptimedia reviewed its 2012 advertising market growth forecast from 4.8% in March to 4.3% in June.

Publicis Groupe confirms that H2 2012 growth will be higher than in the first half-year. For several years the Groupe has been anticipating the ever-increasing pace of the deep changes taking place in the world, changes that have a notable impact on advertising (slowing of traditional advertising in mature markets).

Publicis Groupe therefore intends to continue to focus on the development of digital and its expansion in high-growth economies, by giving pride of place to targeted investments in these buoyant segments.

The Groupe's maintains its medium-term goal to generate 75% of its revenue in digital communications and high-growth countries.

Its strong financial situation ensures that it has the means to implement and succeed this strategy. These developments will be managed while maintaining the Groupe's strong profitability.

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. Forward-looking 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 2011 Registration Document filed with the French financial markets authority (AMF).

About Publicis Groupe

Publicis Groupe [Euronext Paris FR0000130577, part of the CAC 40 index] is the third largest communications group in the world, offering the full range of services and skills: digital and traditional advertising, public affairs and events, media buying and specialized communication. Its major networks are Leo Burnett, MSLGROUP, PHCG (Publicis Healthcare Communications Group), Publicis Worldwide, Rosetta and Saatchi & Saatchi. VivaKi, the Groupe's media and digital accelerator, includes Digitas, Razorfish, Starcom MediaVest Group and ZenithOptimedia. Present in 104 countries, the Groupe employs 56,000 professionals.

http://www.publicisgroupe.com | Twitter:@PublicisGroupe | Facebook: http://www.facebook.com/publicisgroupe

Appendix

New Business

H1 2012

1.8 USD billion (net)

Main accounts awarded

Digitas

Heineken Group; L'Oréal China (China); Whipcar (United Kingdom); eBay (USA); Puma (United Kingdom); Axis Bank (India); Samsung (Brazil); Onstar (China); Delta (USA); Aetna Healthcare (USA); Jenn-Air (China); Intel (China, Hong Kong); Emerson (China); Dassault Falcon (China); Nestlé (India); HP (India); HP Indonesia (India); Kraft (USA); TIAA-Cref (USA); Airtel (India); American Express (USA); Dunkin' Donuts (USA); Goodyear (USA); Aflac (USA); Buick (USA) GMC (USA); Harley-Davidson (USA); Sprint (USA); MillerCoors (USA); Nissan (France); L'Oréal (France); Renault (France).

Kaplan Thaler Group

Acorda Therapeutics AMPYRA (USA); Daisy Sour Cream (USA).

Leo Burnett

Novartis - Thera-Flu, Otrivin, Voltaren brands (Lithuania); Inse - (China); Merchant Bank of Sri Lanka - Corporate (Sri Lanka); Mengniu Dairy Company - Zengouli Milk (China); Le Sun Chine Hotel (China); HNH Line - Mobile App (China); Goodyear Dunlop Tires Operations S.A. (Germany); GlaxoSmithKline - Iodex Pain Balm (India); Atria/Campomos Meat Processing Company (Russia); Fragrant Group Ltd. - The Circle, Sukhumvit 11 properties (Thailand); Avis Budget Group - Avis Rent A Car (USA); Ping An Insurance - Vehicle insurance (China); Procter & Gamble and Teva (PGT); BKS Investment Services (Russia); Bacardi (United Kingdom); Bridgestone Americas - Firestone (USA); Arcor (Argentina); Samsung (China, Switzerland, Poland); Profamila (Dominican Republic); Coke GmbH (Germany); Alior Bank (Poland); Free Lanka Trading Ltd. (Sri Lanka); Chocolat Frey (Switzerland); Mister Rice (Switzerland); Coca-Cola Company (USA); Nickelodeon (USA); Ikea (Asia Pacific); Coleman (Japan); Amana Takaful Insurance (Sri Lanka); CIC Holdings (Sri Lanka); Organization of Professional Associations (OPA) (Sri Lanka); Co-Operative Grocery (United Kingdom); Just Group - Jay Jay's (Australia).

MSLGROUP

Walmart (Hong Kong); Taitra (Taiwan).

PublicisWorldwide

Confused.com (United Kingdom); Astelit (Ukraine); Nutricia/Day Care (Netherlands); PostNL (Netherlands); Johnson&Johnson/Vision Care (Netherlands); Randstad (Netherlands); Reiswezen (Netherlands); Danone/Actimel, Activia (Netherlands); Dutch Heart Foundation (Netherlands); Qantas (Australia). REECL (Bulgaria); BVG (Germany); Infoteam Software (Germany); Knorr-Bremse (Germany); L'Oreal-Garnier Oila (Germany); Maschinenfabrik Reinhausen (Germany); Nestlé/Nescafé, Nesquick (Germany); Siemens/Mobility and Logistics (Germany); Movistar (Venezuela); Everything Everywhere (London).

Saatchi & Saatchi

Kraft Foods - Kool-Aid, Capri Sun (USA); Air new Zealand (New Zealand); Parmalat (Italy); Virgin Strauss (UK); Big W (Australia); Port of Antwerp (Belgium); Canal+ (Poland); Carnival Cruise Lines (Australia); Chivas - digital (China); COFCO Lolas (China); Bintan (Singapore/Saatchi Lab); DG Com/European Parliament - Visual identity (Belgium/ pan-European); Kraft Foods - Kool-Aid, CapriSun (US Hispanic); Nike Foundation (United Kingdom/Nigeria); Subway (Singapore/Saatchi Lab); Club Med (France/global); Radisson Edwardian Hotels (United Kingdom), MillerCoors/Miller Lite (USA/NY), ASB Bank (New Zealand).

Starcom MediaVest Group

Dabur India (India); DiGi Telecommunications Sdn Bhd (Malaysia); Lazurde (UAE); Polbank (Poland); ZhuJiang Beer (China); Heineken (Global); Lower Silesia Voivodship 2012 Campaign (Poland); Bertel O Steen (Norway); Björn Borg (Norway); C'estbon (China); Kaz (PUR) (USA); Axis Bank (India).

ZenithOptimedia  

ABD IBRAHIM (Turkey); VAKKO (Turkey); Santander (Mexico); Kobe & Lyne (Indonesia); Qantas (Australia); Home Depot (Canada); Rabobank (Germany); Totalizator Sportowy (Poland); Maspex (Poland); Nestlé (Hong Kong); Energy Market Authority (Singapore); Darty (Turkey); AMK (Turkey); Kiler (Turkey); Qualitynet (Kuwait); Daymod (Turkey); Dollardex (Singapore); Science Centre Board (Singapore); Save Our Planet Investments Pte Ltd (Singapore); Tatil.com (Turkey); Euro 2012 (Poland); Aviva (France); Ministry of National Development (Singapore).

2012 Press Releases

01-11-2012    Half-Year financial statement liquidity contract with SG Securities (Paris)

01-18-2012    Publicis Groupe acquires Mediagong, one of France's most innovative digital agencies

01-25-2012    Publicis Groupe acquires The Creative Factory, strengthening Saatchi & Saatchi in Russia

01-25-2012    Publicis Groupe regrets that a long-lasting relationship with GM has ended

01-26-2012    Publicis Groupe to acquire Pixelpark AG, Germany's largest independent digital group, via a friendly takeover bid for Eur 1.70 per share

02-01-2012    Publicis Groupe acquires Flip Media, a leading middle eastern digital agency

02-09-2012    Publicis Groupe : 2011 Annual Results

02-13-2012    Publicis Groupe publishes public tender offer document for Pixelpark AG

02-17-2012    Publicis Groupe announces buy-back of 18 million of its own shares from Dentsu

02-22-2012    Publicis Groupe accelerates China expansion with acquisition of U-Link business solutions Co. Ltd

03-08-2012    Publicis Groupe acquires King Harvests and Luminous, accelerating its expansion in China and Singapore

03-08-2012    Pixelpark: Publicis Groupe waives minimum acceptance quota of 75% and re-opens the acceptance period until March 21, 2012

03-08-2012    France Télécom-Orange and Publicis Groupe partner with Iris Capital Management to create a leading European venture capital investor in the digital economy

03-15-2012    Publicis Groupe announces Sébastien Danet's appointment as Chairman of VivaKi France

03-20-2012    Pixelpark: Publicis secures more than 76% of the shares in Pixelpark AG

03-29-2012    Press Release of the Supervisory Board

04-19-2012    Q1 2012 Revenue

04-24-2012    Publicis Groupe acquires Indigo Consulting, award-winning Indian digital marketing & technology agency

04-26-2012    Publicis Groupe announces the appointment of Anne-Gabrielle Heilbronner

05-14-2012    Publicis Groupe acquires Longtuo, aiming for a dominant role in China's booming e-Commerce market

05-21-2012    Publicis Groupe announces the creation of saatchi&saatchi duke, a new entity combining the Saatchi&Saatchi and Duke agencies in France

05-29-2012    Publicis Groupe Annual General Shareholder's Meeting dividend set at 0.70 euros per share. Supervisory board: Elisabeth Badinter re-elected President.

05-31-2012    The Supervisory Board's decision - May 29, 2012

06-18-2012    Publicis Groupe to acquire BBR Group becoming one of Israel's leading communications groups

06-18-2012    Publicis Groupe becomes first communications group to enter the Palestinian market through acquisition of an equity stake in Zoom Advertising

06-19-2012    Russel Kelley retires after 10 years as General Counsel of Publicis Groupe. Eric-Antoine Fredette appointed General Counsel

06-27-2012    New conversion/exchange Ratio for the Océanes 3.125% due July 30th, 2014

06-28-2012    Overview of the share buyback program authorized by shareholders at their Combined Ordinary and Extraordinary General Meeting of May 29, 2012

06-29-2012    Notice of the exercise of early redemption option with respect to the 3.125% Bonds convertible into and/or exchangeable for new or existing Publicis Groupe shares due July 30, 2014

07-03-2012    Half-Year financial statement liquidity contract with SG Securities (Paris)

07-05-2012    BBH becomes 100% owned by Publicis Groupe. Deal includes acquisition of Brazil-based agency NEGAMA/BBH

07-10-2012    Publicis Groupe: Cessation and Implementation of a Liquidity Contract

07-10-2012    Publicis Groupe acquires CNC, German-based strategic consultancy network with global footprint will align to MSLGROUP

Glossary

Net financial debt (or net debt): equals the long and short term financial debt plus associated derivatives fair value, less cash and cash equivalent

Average Half Year net debt: half year average of average monthly net debt.

Net new business: this figure is derived not from financial reporting but from estimated media-marketing budgets based on annual business (net of losses) from new and existing clients.

Operating margin: The operating margin is equal to the revenue after deduction of personnel expenses, other operating expenses (excluding non current income and expenses), depreciation and amortization (excluding intangible arising from acquisitions).

Operating margin rate: operating margin/revenue.

Organic growth calculation

                                                             Currency impact
                    (EUR million)                 H1 2012     (EUR million)
    2011 Revenue                                    2,699     GBP(2)      11
    Currency impact                                   139     GBP(2)     100
    2011 Revenue at 2012 exchange rate (a)          2,838     Others (2)  28
    2012 Revenue before impact of acquisitions
    (1) (b)                                         2,917     Total      139
    Revenue from acquisitions (1)                     167
    2012 Revenue                                    3,084
    Organic Growth (b/a)                             +2.8%


  1. Acquisitions ( Kitkatt Nohr, Airlock, Holler, Chemistry, Talent, ICL , GP7, Watermelon, S&S South Africa, Genedigi Group,Dreams, Rosetta Marketing Group, Big Fuel, LB ZurichSpillman/Felser, DPZ Group, Nuatt, Schwartz, Brand Connections,Gomye, Wangfan,Ciszewski,The Creative Factory,Flip, Luminous, Mediagong, Webformance Saint Brieuc, Indigo, King Harvests, UBS,Pixelpark,Longtuo) net of disposals

2. Average Exchange rate at June. 30, 2012:     1 USD = 0.771 EUR
       1 GBP = 1.1216 EUR

Consolidated financial statements

June 30, 2011 (unaudited)

Consolidated income statement

                                                               June
                                                 June 30th,    30th,  December
                                                     2012      2011  31st, 2011
    (in millions of euros)                        6 months  6 months 12 months
    Revenue                                          3,084    2,699      5,816
    Personnel expenses                             (1,978)  (1,740)    (3,615)
    Other operating expenses                         (638)    (548)    (1,167)
    Operating margin before depreciation and
    amortization                                       468      411      1,034
    Depreciation and amortization expense
    (excluding intangibles arising from
    acquisitions)                                     (53)     (47)      (103)
    Operating margin                                   415      364        931
    Amortization of intangibles arising from
    acquisitions                                      (22)     (17)       (38)
    Impairment loss                                    (5)        -          -
    Non-current income and expenses                      4        2         21
    Operating income                                   392      349        914
    Financial expense                                 (44)     (42)       (89)
    Financial income                                    30       16         33
    Cost of net financial debt                        (14)     (26)       (56)
    Other financial income and expenses                  6      (2)          2
    Pre-tax income of consolidated companies           384      321        860
    Income taxes                                     (108)     (91)      (248)
    Net income of consolidated companies               276      230        612
    Share of profit of associates                        7       10         17
    Net income                                         283      240        629
    Of which:
 
    - Net income attributable to
    non-controlling interests (minority
    interests)                                           8        9         29
    - Net income attributable to equity
    holders of the parent company (Group
    share)                                             275      231        600


    Per share data (in euros) - Net income attributable to equity holders
    of the parent company
 
    Number of shares                      193,000,835 202,244,660 202,547,757
    Earnings per share                           1,42        1,14        2.96
 
    Number of diluted shares              226,598,082 237,179,816 237,066,159
    Diluted earnings per share                   1,28        1,03        2,64
 


Consolidated statement of comprehensive income

                                                          June      December
                                           June 30th,     30th,        31st,
    (in millions of euros)                      2012      2011          2011
    Net income for the period (a)                283       240           629
    Other comprehensive income
    - Revaluation of
    available-for-sale investments                 2         7           (3)
    - Actuarial gains and losses on
    defined benefit plans                       (44)         6          (51)
    - Consolidation translation
    adjustments                                   66     (145)            49
    - Deferred taxes on other
    comprehensive income                          11       (1)            16
    Total Other comprehensive income
    (b)                                           35     (133)            11
 
    Total comprehensive income for
    the period (a) + (b)                         318       107           640
    Of which:
    - Attributable to non-controlling
    interests (minority interests)                 8         7            29
    - Attributable to equity holders
    of the parent company (Group
    share)                                       310       100           611


Consolidated balance sheet

                                                        June 30th,   December 31th,
    (in millions of euros)                                2012            2011
    Assets
    Goodwill, net                                        5,438           5,207
    Intangible assets, net                                 983             985
    Property, plant and equipment, net                     491             496
    Deferred tax assets                                    137              82
    Investments in associates                               50              43
    Other financial assets                                 137             113
    Non-current assets                                   7,236           6,926
    Inventory and work in progress                         385             343
    Accounts receivable                                  6,434           6,446
    Other receivables and current assets                   591             561
    Cash and cash equivalents                              772           2,174
    Current assets                                       8,182           9,524
 
    Total assets                                        15,418          16,450
 
                                                       June 30th,    December 31th,
                                                          2012            2011
    Liabilities and equity
    Share capital                                           74              77
    Additional paid-in capital and retained
    earnings, Group share                                3,487           3,821
    Equity attributable to holders of the
    parent company (Group share)                         3,561           3,898
    Non-controlling interests (minority
    interests)                                              39              33
    Total equity                                         3,600           3,931
    Long-term borrowings                                   726           1,460
    Deferred tax liabilities                               254             240
    Long-term provisions                                   523             486
    Non-current liabilities                              1,503           2,186
    Trade payables                                       7,493           7,745
    Short-term borrowings                                  961             838
    Income taxes payable                                    52              66
    Short-term provisions                                  164             137
    Other creditors and current liabilities              1,645           1,547
    Current liabilities                                 10,315          10,333
 
    Total liabilities and equity                        15,418          16,450


Consolidated cash flow statement

                                                                      December
                                              June 2012 June 2011         2011
    (in millions of euros)                     6 Months  6 Months    12 Months
    Cash flow from operating activities
    Net income                                      283       240          629
    Neutralization of non-cash income and
    expenses:
    Income taxes                                    108        91          248
    Cost of net financial debt                       14        26           56
    Capital (gains) losses on disposals
    (before tax)                                    (3)       (1)         (19)
    Depreciation, amortization and impairment
    on property, equipment and intangible
    assets                                           80        64          141
    Non-cash expenses on stock options and
    similar items                                    12        13           26
    Other non-cash income and expenses              (7)         2            1
    Share of profit of associates                   (7)      (10)         (17)
    Dividends received from associates                4         9           14
    Taxes paid                                    (151)     (104)        (212)
    Interest paid                                  (32)      (32)         (80)
    Interest received                                12        15           29
    Change in working capital requirements        (374)     (396)           73
    Net cash provided by (used in) operating
    activities (I)                                 (61)      (83)          889
    Cash flows from investing activities
    Purchases of property, equipment and
    intangible assets                              (42)      (46)        (116)
    Proceeds from sale of property, equipment
    and intangible assets                             2         2            4
    Purchases of investments and other
    financial assets, net                          (19)       (1)           13
    Acquisitions of subsidiaries                   (99)     (142)        (728)
    Disposals of subsidiaries                         -        29           28
    Net cash flows provided by (used in)
    investing activities (II)                     (158)     (158)        (799)
    Cash flows from financing activities
    Capital increase                                  -         -            -
    Dividends paid to holders of the parent
    company                                           -         -        (129)
    Dividends paid to non-controlling
    interests                                      (23)      (11)         (14)
    Cash received on new borrowings                   6        71           77
    Reimbursement of borrowings                   (544)      (12)         (29)
    Net purchases of non controlling
    interests                                      (27)       (3)         (11)
    Net (purchases)/sales of treasury shares
    and equity warrants                           (596)        41           51
    Net cash flows provided by (used in)
    financing activities (III)                  (1,184)        86         (55)
    Impact of exchange rate fluctuations (IV)         8      (75)         (17)
    Net change in consolidated cash flows (I
    + II + III + IV)                            (1,395)     (230)           18
    Cash and cash equivalents on January, 1       2,174     2,164        2,164
    Bank overdrafts on January, 1                  (28)      (36)         (36)
    Net cash and cash equivalents at
    beginning of period (V)                       2,146     2,128        2,128
 
    Cash and cash equivalents at closing date       772     1,933        2,174
    Bank overdrafts at closing date                (21)      (35)         (28)
    Net cash and cash equivalents at closing
    date (VI)                                       751     1,898        2,146
    Net change in cash and cash equivalents
    (VI - V)                                    (1,395)     (230)           18
 
    (1) Breakdown of change in working
    capital requirements:
    Change in inventory and work in progress       (34)      (11)          (6)
    Change in accounts receivable and other
    receivables                                     156      (17)        (267)
    Change in accounts payable, other
    payables and provisions                       (496)     (368)          346
    Change in working capital requirements        (374)     (396)           73
 


Consolidated statement of changes inequity

                                                                                     Equity
                                                       Reserves                attributable
    Number of                                          and                   to the holders      
                                    Share   Additional earnings             Fair     of the    
    outstanding  (in millions of            paid-in    brought  Translation value    parent   
    shares       euros)             capital capital    forward  reserve     reserve company      
    185,996,063  January 1, 2012       77     2,479      1,251     (39)       130     3,898      
                 Net income                                275                          275      
                 Other
                 comprehensive
                 income:
                 Fair value
                 adjustments to
                 available-for-sale
                 investments                                                    2         2      
                 Actuarial gains
                 and losses on
                 defined benefit
                 plans (1)                                (33)                         (33)   
                 Consolidation
                 translation
                 adjustments                                         66                  66   
                 Total other
                 comprehensive
                 income                                   (33)       66         2        35   
                 Total income and
                 expenses for the
                 period                                    242       66         2       310   
                 Publicis Groupe SA
    (10,759,813) capital increase     (4)     (381)                                   (385)   
                 Dividends                               (119)                        (119)   
                 Share-based
                 compensation (1)                           14                           14   
                 Additional
                 interest on Orane                         (4)                          (4)   
                 Effect of
                 acquisitions and
                 commitments to buy
                 out
                 non-controlling
                 interests
                 (minority
                 interests)                                 18                           18   
                 Oceane 2014
     1,462,108   conversion             1        39          1                           41   
                 Purchases/sales of
    (4,643,758)  treasury shares                         (212)                        (212)   
    172,054,600  June 30, 2012         74    2 ,137      1,191       27       132     3,561   

    TABLE CONTINUED BELOW                                    
                                    
    Number of                       Non-controlling
                                    interests
    outstanding  (in millions of    (minority        Total
    shares       euros)             interests)      equity
    185,996,063  January 1, 2012        33          3 ,931
                 Net income              8             283
                 Other
                 comprehensive
                 income:
                 Fair value
                 adjustments to
                 available-for-sale
                 investments                             2
                 Actuarial gains
                 and losses on
                 defined benefit
                 plans (1)                            (33)
                 Consolidation
                 translation
                 adjustments                            66
                 Total other
                 comprehensive
                 income                                 35
                 Total income and
                 expenses for the
                 period                  8             318
                 Publicis Groupe SA
    (10,759,813) capital increase                    (385)
                 Dividends            (23)           (142)
                 Share-based
                 compensation (1)                       14
                 Additional
                 interest on Orane                     (4)
                 Effect of
                 acquisitions and
                 commitments to buy
                 out
                 non-controlling
                 interests
                 (minority
                 interests)              21             39
                 Oceane 2014
     1,462,108   conversion                             41
                 Purchases/sales of
    (4,643,758)  treasury shares                     (212)
    172,054,600  June 30, 2012           39          3,600



  1. The actuarial gains and losses on defined benefit plans as well as share-based compensation take into account the associated taxes deferred.
                                                                                     Equity
                                                                               attributable
                                                                             to the holders
                                                        Reserves                     of the
    Number of                    Capital   Additional and       Translation Fair     parent
    outstanding (in millions of   stock    paid-in    retained  reserve     value            
    shares      euros)                     capital    earnings              reserve company  
 
    182,371,
    070         January 1, 2011      77        2,432     807         (88)      133    3,361     
                Net income                               231                            231     
                Other 
                comprehensive
                income:
                Fair value
                adjustments to
 
                available-for-sale
                investments                                                    7          7     
                Actuarial gains
                and losses on
                defined benefit
                plans(1)                                   5                              5
                Consolidation
                translation
                adjustments                                         (143)             (143)
                Total other
                comprehensive
                income                                     5        (143)      7      (131)
                Total income and
                expenses for the
                period                -            -     236        (143)      7        100
                Publicis Groupe SA
    150,575     capital increase      -
                Dividends                              (129)                          (129)
                Share-based
                compensation (1)                          15                             15
                Additional
                interest on Oranes                       (4)                            (4)
                Effect of
                acquisitions and
                commitments to buy
                out
                non-controlling
                interests                                                                  
                Purchases/sales of
    1,485,457   treasury shares                           41                             41
    184,007,102 June 30, 2011        77        2,432     966        (231)     140     3,384

    TABLE CONTINUED BELOW



    Number of                   
    outstanding (in millions of Non-controlling Total
    shares      euros)          interests       equity
 
    182,371,
    070         January 1, 2011     21           3,382
                Net income           9             240
                Other 
                comprehensive
                income:
                Fair value
                adjustments to
 
                available-for-sale
                investments                          7
                Actuarial gains
                and losses on
                defined benefit
                plans(1)                             5
                Consolidation
                translation
                adjustments         (2)          (145)
                Total other
                comprehensive
                income              (2)          (133)
                Total income and
                expenses for the
                period                7            107
                Publicis Groupe SA
    150,575     capital increase      
                Dividends          (12)          (141)
                Share-based
                compensation (1)                    15
                Additional
                interest on Oranes                 (4)
                Effect of
                acquisitions and
                commitments to buy
                out
                non-controlling
                interests             7              7
                Purchases/sales of
    1,485,457   treasury shares                     41
    184,007,102 June 30, 2011        23          3,407

 


(1)    The actuarial gains and losses on defined benefit plans as well as share-based compensation take into account the associated taxes deferred

Earnings per share and diluted earnings per share

    (in millions of euros, except for share
    data)                                     30 june 2012 30 june 2011
    Net income used for the calculation of
    earnings per share
    Group net income                                   275          231
    Impact of dilutive instruments:
    - Savings in financial expenses related
    to the conversion of debt instruments,
    net of tax (1)                                      14           14
    Group net income - diluted                         289          245
    Number of shares used to calculate
    earnings per share
    Average number of shares that make up the
    share capital                              186,024,782  191,676,022
    Treasury shares to be deducted (average
    for the year)                             (10,207,366)  (8,176,910)
    Shares to be issued to redeem the Oranes    17,183,419   18,745,548
    Average number of shares used for the
    calculation                                193,000,835  202,244,660
    Impact of dilutive instruments: (2)
    - Free shares and dilutive stock options     4,508,286    5,377,868
    - Warrants                                   1,228,951    1,171,104
    - Shares resulting from the conversion of
    convertible bonds (1)                       27,860,010   28,386,184
    Number of diluted shares                   226,598,082  237,179,816
    (in euros)
    Earnings per share                                1.42         1.14
 
    Diluted earnings per share                        1.28         1.03


  1. The Oceanes 2018 and 2014 are factored into the calculation of diluted EPS over the two years .
  2. 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.

Headline earnings per share (basic and diluted)

    (in millions of euros, except for share                         30 june
    data)                                          30 june 2012        2011
    Net income used to calculate headline (1)
    earnings per share
    Group net income                                        275         231
    Items excluded:
    - Amortization of intangibles from
    acquisitions, net of tax                                 14          10
    - Impairment, net of tax                                  3           -
    - Revaluation of earn-out payments                      (7)           -
    Headline group net income                   e           285         241
    Impact of dilutive instruments:
    - Savings in financial expenses linked to
    the conversion of debt instruments, net of
    tax                                                      14          14
    Headline group net income, diluted          f           299         255
 
    Number of shares used to calculate
    earnings per share
    Average number of shares that make up the
    share capital                                   186,024,782 191,676,022
    Treasury shares to be deducted (average
    for the year)                                  (10,207,366) (8,176,910)
    Shares to be issued to redeem the Orane          17,183,419  18,745,548
    Average number of shares used for the
    calculation                                 c   193,000,835 202,244,660
    Impact of dilutive instruments:
    - Free shares and dilutive stock options          4,508,286   5,377,868
    - Warrants                                        1,228,951   1,171,104
    - Shares resulting from the conversion of
    the convertible bonds                            27,860,010  28,386,184
    Number of diluted shares                    d   226,598,082 237,179,816
    (in euros)
    Headline earnings per share (1)            e/c         1.47        1.19
 
    Headline earnings per share - diluted (1)  f/d         1.32        1.08


(1) EPS before amortization of intangibles resulting from acquisitions, impairment, revaluation of earn-out payments.


Contacts

Publicis Groupe

Peggy Nahmany, Corporate Communication, +33(0)1-44-43-72-83

Martine Hue, Investor Relations, +33(0)1-44-43-65-00

SOURCE Publicis Groupe



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