Publicis Groupe: H1 2011 Results
2nd Quarter 2011
PARIS, July 21, 2011 /PRNewswire/ --
EUR million
- Revenue 1,413 +2.7%
- Organic growth +7.6%
1st half-year 2011
EUR million
- Revenue 2,699 +6.3%
- Organic growth +7.1%
- Operating margin 364 -1.4%
- Operating margin rate 13.5%
(2010: 14.5%) - Net income (attributable to the Groupe) 231 +8.5%
- Diluted headline EPS[2] (€) 1.08 +8%
- Free Cash Flow[1] 269 -2.9%
- Net debt 210 -66%
(1) Before changes in working capital requirements
(2) Before amortization of intangibles arising on acquisitions and impairment
Maurice Lévy, Chairman and CEO of Publicis Groupe, said:
"Organic growth has risen to an excellent 7.6% in the second quarter, bringing overall growth in this Half to 7.1%, exceeding our forecasts. This confirms the validity of our strategic choices.
In order to fuel the Groupe's goal of boosting Internet-related and digital work to take a dominant share of our activity, this First Half has been rich in acquisitions. They notably include Rosetta, one of the largest independent digital and consulting agencies - and, more recently, Big Fuel, a little golden nugget in terms of social media communication.
We're progressing according to plan with our ambitious goals for the BRIC markets.
Overall, all our acquisitions, whatever their size, share a number of qualities. They are particularly creative; their skills are widely recognized in their market; and they will be key elements for the growth of our networks.
Clearly, in order to accelerate our profitable development, we will need to give priority to investment and to talent, particularly after two years of a salary and hiring freeze. This is in line with our announcement in February 2011.
Boosting our margin remains a priority, and in the Second Half we'll be harvesting the first results of that goal.
With our net debt at June 30 reduced to 210 million euros, a debt ratio close to zero and more than 4 million euros of available liquidity, our financial situation gives us some leeway to achieve our ambitious goals, although we will continue to be very attentive to the the world economy which is showing some signs of fragility.
2011 should confirm our goal of higher-than-market growth and improved margins."
* * *
Publicis Groupe's Supervisory Board met on July 20, 2011, under the chairmanship of Elisabeth Badinter, to examine the accounts for the 1st half-year 2011 presented by Maurice Lévy, Chairman of the Management Board.
Key figures
in EUR million, excepting
percentages and per-share data
(in EUR) H1 2011 H1 2010 2011/2010
Data from the Income statement
Revenue 2,699 2,538 +6.3%
Operating margin before
Depreciation & Amortization 411 422 -2.6%
% of revenue 15.2% 16.6%
Operating margin 364 369 -1.4%
% of revenue 13.5% 14.5%
Operating income 349 353 -1.1%
Net Income attributable to the
Groupe 231 213 +8.5%
Earnings Per Share [(1)] 1.14 1.04 +10%
Diluted Earnings Per Share [(2)] 1.03 0.95 +8%
December 31,
Data from the Balance Sheet June 30, 2011 2010
Total Assets 14,284 14,941
Groupe's share of consolidated
shareholders' equity 3,384 3,361
[1] Earnings per share calculations based on an average of 202.2 million shares in circulation in H1 2011, and 204.5 million in H1 2010.
[2] Diluted Earnings per share (EPS) calculations based on 237.2 million shares in H1 2011, and 237.1 million shares in H1 2010. These calculations include stock options, free shares, equity warrants and convertible bonds that dilute EPS. In H1 2011, the instruments diluting EPS were convertible bonds (Oceanes), equity warrants, free share issues and certain stock option tranches at a strike price below the average share price for the period.
Analysis of the key figures
- Activity in H1 2011
Global economy growth reached an annualized 4.3% in the first quarter and forecasts for the full year 2011 are largely unchanged despite a temporary slowdown observed worldwide in the second quarter.
In this context of a buoyant advertising market, Publicis Groupe achieved organic growth of 7.6% in the second quarter and 7.1% for the first half-year.
- Q2 2011 revenue
Consolidated revenue for the second quarter totaled 1,413 million euro, i.e. a 2.7% increase over the 1,376 million euro reported for the corresponding period in 2010 (due to the 87 million euro negative impact of exchange rates).
Q2 organic growth was +7.6%, up from +6.5% in the first quarter. Organic growth was +7.1% in Q2 2010.
- Breakdown of Q2 revenue by region
Q2 2011 vs Q2
(EUR million) Revenue 2010 Organic growth
Q2 2011 Q2 2010
Europe 487 437 +11.4% +11.5%
Nord America 639 679 -5.9% +5.3%
Asia-Pacific 159 154 +3.2% +5.5%
Latin America 89 71 +25.4% +3.7%
Africa and Middle
East 39 35 +11.4% +17.6%
Total 1,413 1,376 +2.7% +7.6%
Second-quarter growth was very strong in virtually all countries and regions around the world despite a slowdown observed in the USA which was offset by growth in developing countries.
- H1 2011 revenue
Consolidated revenue for the first half-year 2011 totaled 2,699 million euro, up 6.3% from 2,538 million euro in the first half of 2010 (the impact of exchange rates was -58 million euro).
Organic growth was 7.1% for the half-year, a good performance and an improvement on the 5.3% recorded in 2010.
All activities progressed in H1 2011. Digital now accounts for 29% of total revenue, up from 28.1% in 2010 and is growing much faster than the market as a whole.
High-growth economies represented 23.2% of total revenue.
Consolidated revenue in H1 2011 breaks down as follows: 31% from advertising (33% in 2010), 20% from media (20% in 2010), 49% from the SAMS which include all digital activities (after 47% in 2010).
- Breakdown of H1 revenue by region
(EUR million)
Revenue H1 2011/H1 2010 Organic growth
H1 2011 H1 2010
Europe 895 805 +11.2% +9.1%
Nord America 1,272 1,258 +1.1% +6.7%
Asia-Pacific 307 286 +7.3% +3.5%
Latin America 157 126 +24.6% +6.0%
Africa and Middle 63
East 68 +7.9% +9.1%
Total 2,699 2,538 +6.3% +7.1%
All regions posted growth once again even though the situation can be somewhat contrasted within any given region.
Europe achieved remarkable growth given the very different situations of certain countries:
- Strong growth in France (11.9%), Germany (over 10%), Italy (7.7%) and the central European countries (9.1%, with Russia exceeding 20%);
- Improvements in the UK (+3%) and Spain (+3%);
- Greece and Portugal both posted very negative growth.
North America continued to post growth and reached +6.7%. Despite a moderate slowdown in the second quarter, the USA achieved organic growth of 7.2% driven by solid media growth and the sizeable contribution of the healthcare sector.
Asia-Pacific is growing, mainly due to China (+9.2% for the Greater China region) and despite the weakness of Japan and Korea's slower pace of growth.
Latin America's high growth rate can be attributed to a large number of its countries, most notably Brazil with 7.3% growth.
Africa and the Middle East continue to suffer from the geopolitical situation, though the region achieved sustained growth thanks to the United Arab Emirates.
Operating margin
The Operating margin before depreciation and amortization was 411 million euro in H1 2011, down 2.6% from 422 million euro in H1 2010.
Depreciation and amortization totaled 47 million euro in the first half-year, compared with 53 million euro in 2010.
The Operating margin was 364 million euro, i.e. a 1.4% decrease from 369 million euro for the corresponding period in 2010.
The percentage operating margin was 13.5% in H1 2011, compared with 14.5% in H1 2010. This downturn can mainly be ascribed to personnel expenses, given the Groupe's need to start recruiting again as business gained momentum, but also to the readjustment of salaries after a two-year freeze on recruitment and salaries. Personnel expenses thus amounted to 1,740 million euro for the first half-year, up 7.9% on the corresponding period in 2010. The ratio of personnel expenses to revenue stood at 64.5% for the period. Other operating costs, including depreciation and acquisition costs, rose 7.0% to 595 million euro.
When this growth-induced period of adjustment comes to an end, special attention will be paid to the costs structure to ensure it remains compatible with the Groupe's objectives.
Amortization of intangibles arising from acquisitions was 17 million euro, i.e. at the same level as in H1 2010.
No impairment charges were booked at the end of H1 2011.
Net non-current income reached 2 million euro, up from 1 million euro in 2010.
Operating income was 349 million euro in the first half-year 2011, down 1.1% from the 353 million euro reported in the corresponding period in 2010.
Net income
After net financial expense of 28 million euro (down 33% on H1 2010), income tax totaling 91 million euro (i.e. an effective tax rate of 28.2%, a 50 basis points improvement on H1 2010), the share of profits of Associates at 10 million euro and Minority interests of 9 million euro, the Net income attributable to the Groupe was 231 million euro for H1 2011, up 8.5% from 213 million euro in H1 2010.
Free Cash Flow
Before changes in working capital requirements, the Groupe's free cash flow stood at 269 million euro for the period.
Net debt
Net financial debt was reduced by 408 million euro, i.e. from 618 million euro at June 30, 2010 to 210 million at June 30, 2011. Thus at June 30, 2011 the net debt/equity ratio was 0.06 at June 30, 2011, down from 0.20 at June 30, 2010.
The Groupe's average net debt was reduced by 482 million euro, i.e. from 673 million euro in H1 2010 to 191 million euro in H1 2011.
It should be pointed out that the Groupe has available liquidity at 4,088 million euro (committed facilities). A new syndicated credit facility (Club Deal) was negotiated in July 2011 and is described below under "Recent events".
Shareholders' equity
At June 30, 2011, consolidated shareholders' equity, including minority interests, was 3,407 million euro, compared with 3,382 million at December 31, 2010.
Distinctions for creativity
At the 58th edition of the Cannes international advertising festival, Publicis Groupe received 117 Lions including 16 gold, 39 silver and 62 bronze awards.
Leo Burnett took 40 Lions, including 7 gold, 16 silver and 17 bronze.
Publicis was awarded 29 Lions, and Saatchi&Saatchi received a further 27 Lions.
Leo Burnett took more awards than any other agency for the second consecutive year at the Andy Awards, was also awarded the Best of Show prize at the National Addys Awards in the USA, and was the big winner at the 2011 Clio Awards, while Leo Burnet/Arc Worldwide won 10 Effie Awards in the USA.
Digitas and American Express won the Grand Clio at the Clio Awards, and Digitas took gold at the Effies for the "Real Women of Philly" campaign. Kitcatt Nohr Digitas won the award for the best integrated campaign at the Revolution Awards in the UK.
Publicis Brazil received a Grand prix in the Integrated Media category for Nestlé-Purina-Proplan. Publicis also brought home 15 trophies from the 2011 New York Festivals. ZenithOptimedia was named Media Agency of the Year by Top Marketers in Singapore. Starcom MediaVest took more awards than any other competitor at the Internationalist Awards for Innovation in Media, and received the Grand Prix at the Mediacat Out of Home Awards.
External growth
The first half-year proved a very busy period for Publicis Groupe in terms of external growth, with its policy focus on priority activities and regions:
- Strengthening of its presence in the UK in interactive communications and public relations through the acquisitions of Chemistry, Airlock, Holler and Kittcat Nohr;
- Reinforcing operations in Brazil by taking control of Talent (after acquiring a minority stake in 2010) and by acquiring Tailor Made and GP7;
- Reinforcement in greater China through the acquisition of Taiwan-based consulting firm ICL, the Dreams agency (China) which is very active in healthcare, and Genedigi, one of the biggest and best known agencies in public relations (China);
- Consolidation in healthcare: acquisition of Publicis Consulting (France) and Watermelon (India).
- Finally, in May, the Groupe announced the acquisition of Rosetta in the USA, one of the last independent interactive agencies of significant size. Rosetta will contribute new skills and positioning in consulting. The transaction was closed in early July.
All these acquisitions are clearly consistent with the Groupe's strategy of expansion in high-growth countries - with priority given to China and Brazil - and reinforcement of its digital skill sets to enable Publicis Groupe to broaden the spectrum of its offering while keeping abreast of the very rapid developments taking place in the communications sector.
Cost management
After a period of accelerated investment, particularly given the need to recruit new talents (especially in digital services), and a return to normal levels of compensation after a nearly in two-year freeze on recruitment and salaries, the Groupe plans to ensure that the ratio of personnel expenses to revenue remains consistent with its profitability objectives.
The shared service centers (SSCs) program continues to be rolled out, with the completion of the "Americas" platform commenced in 2009 for the American continent, and the creation of a new platform in South-East Asia in 2009. These property consolidation programs continue to be a priority, as are purchasing programs at global and regional level, for the Groupe's own expenses but also for production costs.
The ERP roll-out is still on-going. This has been made possible by the very large number of agencies in the shared services centers as well as the implementation of standardized processes and systems.
These measures will give the Groupe better control over its operating expenses.
New Business: 2.4billion dollars in net new business
Publicis Groupe was awarded 2.4 billion US dollars worth ofNet New Business during the first six months of the year. Since January 1, the Groupe is proud to count the following among its new clients: ADP, C&A China, Carl Zeiss Sports Optic, FNAC, Guerlain, Lenovo, Microsoft, Pages Jaunes and Sonic (list attached).
Recent events
Acquisitions
July 5th. Closing of the Rosetta deal in the USA.
Publicis Groupe acquired Rosetta for a consideration of 575 million dollars in cash from the Groupe's liquidities. According to the terms of the agreement, Rosetta executives with a stake in the capital are also eligible for an earn-out in 2014, based on the agency's performance over the 2011-2013 period.
Rosetta will continue to operate autonomously, as a standalone brand within Publicis Groupe, under the leadership of founder and CEO Chris Kuenne who will remain at the helm. Chris Kuenne will report directly to Jean-Yves Naouri, Chief Operating Officer of Publicis Groupe.
The addition of Rosetta to the Groupe's other digital activities (including Digitas, Razorfish and Publicis Modem) will bolster its position as a major global player in digital communications. This acquisition means digital will now account for over 30% of the Groupe's revenue.
Publicis Groupe's consolidated results will include those of Rosetta from July 1, 2011. Organic growth figures will not include Rosetta's results for one year after the initial consolidation of the new acquisition, i.e. until June 30, 2012.
July 11. Acquisition of a majority stake in DPZ, one of Brazil's top advertising agencies.
According to the terms of the agreement, Publicis Groupe has acquired a 70% interest in the new agency with immediate effect, and has an option to purchase the remaining 30% within two to three years. DPZ will retain its name and will operate as a standalone entity within Publicis Groupe.
July 18. Acquisition of a stake in Big Fuel, the New York-based social media agency.
According to the terms of the agreement, Publicis Groupe acquired a 51% stake up front with an option on the remaining capital from 2014.
With over 170 employees, Big Fuel is the only pure-play social media agency in the market. Its staff focuses all its endeavors on the strategy, creation, distribution, management and analysis of social media.
Finance
On July 13, 2011, Publicis Groupe S.A. penned a new syndicated five-year multicurrency facility for 1.2 billion euro. This Club Deal is a general-purpose facility that follows on the previous facility dated December 17, 2004.
Syndication commenced on June 21, 2011 for 1 billion euro and was well oversubscribed at the closing date, enabling Publicis Groupe to raise the amount to 1.2 billion euro.
This facility enhances the Groupe's management of its liquidity maturities. Furthermore, once again there are no financial covenants attached to this new facility.
New business awarded since July 1
The start of H2 2011 continues to prove a busy period for new business, notably with the awarding of the Burger King accounts.
Outlook
After first-quarter organic growth of 6.5%, followed by 7.6% in the second quarter, the growth rate for the first half-year 2011 was 7.1%, thus consolidating the pick-up observed in the advertising market since the second quarter of 2010.
These growth rates constitute an excellent level of performance. Digital business continuing to develop, and to create conditions to innovation and the creation of value for all the networks. Growth is further boosted by our reinforced presence in high-growth countries, a strategy that has been gathering pace over the last year, particularly in China and Brazil. These two pillars of Publicis Groupe's strategy open up new prospects while ensuring both current and future growth.
ZenithOptimedia's most recent forecast for 2011, down marginally from 4.2% in April to 4.1% in July, is a reflection of the potential impact of a slowdown in the US economy offset by improvements in other parts of the world (especially in fast-growing countries) and by the sustained development of the Internet.
Investment in talent, emerging economies and digital businesses continues to take pride of place, whilst cost control and a sound financial position are still top priorities. The Groupe will consistently improve its operating margin in the coming quarters.
In a context of growth in France, Germany and the USA - despite a moderate slowdown in the second quarter in the latter - and thanks to the very satisfactory level of business in fast-growing countries, notably China, Publicis Groupe confirms its objective of outperforming the advertising market in terms of growth in 2011.
*
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 2010 Registration Document filed with the French financial markets authority (AMF).
About Publicis Groupe
Publicis Groupe [listed on the Euronext Paris Exchange - FR0000130577 - and part of the CAC 40 index] is the world's third largest communications group. With activities spanning 104 countries on five continents, Publicis Groupe employs approximately 51,000 professionals and offers local and international clients a complete range of advertising services through three global networks: Leo Burnett, Publicis, Saatchi & Saatchi, and numerous agencies including Fallon, 49%-owned Bartle Bogle Hegarty, and Kaplan Thaler Group. VivaKi combines digital and media expertise, allowing clients to connect with consumers in a holistic way, with Starcom MediaVest Group and ZenithOptimedia worldwide media networks; and interactive and digital marketing led by Digitas and Razorfish networks. VivaKi develops new services, tools, and next generation digital platforms. Publicis Groupe offers healthcare communications with Publicis Healthcare Communications Group (PHCG, the first global network in healthcare communications). And with MSLGROUP, one of the world's top five PR and Events networks, also provides expertise in corporate and financial communications, public affairs, branding, and social media marketing.
Website: http://www.publicisgroupe.com/ | Twitter: @PublicisGroupe | Facebook: http://www.facebook.com/publicisgroupe
Attachments
New Business - H1 2011
2.4 billion US dollars (net)
Main >
Principal Wins
KAPLAN
Starwood (USA)
Leo Burnett
MAS Institute of Management & Technology (India); Micro Cars Limited (India); POM Wonderful (Japan); Triumph International (Japan); LSH Holding (Kuwaït); LibanPost (Lebanon); Petronas Dagangan (Malaysia); Universidad Mexicana (Mexico); McDonald's (UK and USA); Flight Network (Canada); IKEA (Canada); Samsung (Hong Kong); Sun Hung Kai Properties (Hong Kong); Six senses resorts & spas (India); Sinar Mas (Indonesia); Indofood (Indonesia); Allergan (Mexico); Airphil Express (Philippines); Yahoo (Singapore); Dorchester Hotel Collection (UK); Wanke Shenyang (China); Costa Croisieres (France); Stepper Eyewear (Hong Kong); Beit Misk (Lebanon); Red Cross (UK); Giant Bicycles (Australia); DHL (Colombia); APM Terminals (Costa Rica); Sri Lanka Telecom (India); Petronas (Malaysia); Coca Cola (Colombia); Samsung (India); Indofood (Indonesia); 22nd Philippine Advertising Congress (Philippines); Pernod Ricard (Thaïland); Property Perfect (Thaïland); Ikea (Thaïland); Wanke Shenyang (China); Temposcan Pharmaceuticals (Indonesia); Parrot (Japan); Petronas Group (Malaysia); Wijeya Newspapers (Sri Lanka); Chevrolet (Thaïland); Nongpho Dairy Co-operative Ltd. (Thaïland); Coca-Cola (Costa Rica, India); Wikimedia (Germany); Lankem Ceylon Ltd (India); Tokyo Cement (India); Auro Holdings (India); Samsung (Indonesia); Ilusión (Mexico); Walmart (Mexico); Asia Motor Works (India); Gumtree (Australia); Pakistan International Airlines (Pakistan) ; Pakistan State Oil (Pakistan); TaxSpanner (India); Qtel (Qatar)
MSLGroup
TAQA (UK and Dubai); Special K (USA); Sodexo (USA); Keurig (USA); Schools Serve (USA); Mass Assn Health Plans (USA); Home Depot (USA); Carrabba's (USA); Clear Ballot Group (USA); UTC (USA); Ancestry.com (USA); AQMD-Incremental (USA); AstraZeneca (China)
Publicis Worldwide
Fresco/Vogliazzi (Italy); Heineken (Italy); Bernina International (Switzerland); Università Bocconi (Italy); Ministro del Lavoro (Italy), Jùpiter (Spain); Merino/Merinolam-Vegit (India);LG/global digital business (World); PMU (France); RATP (France); Fnac (France); Aéroports de Paris (France); Cortal Consors (France); Institut Géographique National (France); Amway/Nutrilite (China); Nestlé Infant Nutrition/Nestlé Mio (Italy); Jigsaw (UK); Betboo (Brazil); Tourism Ireland (UK); Cascades Groupe Tissu (Canada); SCA-Tena (Hong Kong); Duracell (Hong Kong); Sara Lee/Ball Park (USA); Assurance Maladie (France); Les Vins de Bordeaux (France); Angel Broking (India); Haribo/Dragibus (France)
PHCG
Somaxon (USA); United Therapeutics (USA)
Razorfish
Starwood (USA), Disney (USA), Microsoft (USA)
Saatchi & Saatchi
Lenovo Group Limited (USA); Piaget (France); Assogestioni (Italy); Kavli (Sweden); UNIMED RJ (Brazil); Hanaka kyselka (Czech Republic); Toyota-Aygo, SUV range and Yaris (Italy); Swissôtel (Switzerland); Club Brugge (Belgium); Exellent (Belgium); Vlerick (Belgium); DG Sanco/EC anti smoking (Belgium); Haagen-Dazs (Belgium); Fostplus (Belgium) ; Wonderful Pistachios (UK, Germany); Swisscom (Switzerland); Skoda Auto India (India); OLX India (India); Bharat Petroleum (India); Mando (Korea); Handelsbanken (Sweden); Avis (Germany); WeightWatchers (UK)
Starcom MediaVest Group
Tourism Malaysia (Malaysia); Heineken (Czech Republic); Dairy Queen (USA); China Telecom (China); SATS (Singapore); Singapore Grand Prix (Singapore), Uniqlo (Singapore); Nyhavn Rejser (Denmark); Full Tilt Poker (Italy); BZWBK (Poland); Lotos (Poland); Upstream (United Arab Emirates); Dreams (UK); YPF (Argentina); Microsoft (USA); Disney (USA); Disney Pan regional TV Cable (Argentina); hotels.com-Expedia (China); Regione Lombardia (Italy); I mobile (Thaïland); Kraft Foods (United Arab Emirates); Lactel (United Arab Emirates); MAC (GM dealer) (United Arab Emirates); ZAFCO (United Arab Emirates).
ZenithOptimedia
Rioja Wines (Spain); JPMorgan Chase (USA); Wallmart (China); ABB (China); Motorcorp (New Zealand); United Overseas Bank (Singapore); Emporiki Bank (Greece); Banco Financiero y de Ahorro (Espagne); Interbrands (Sweden); RecycleBank (USA); Jenny Craig (USA); Autotrader (USA); AZ/Medimmune (USA); C&A (China); Tourism Malaysia (Malaysia); MOM (Singapore); city of Antwerp (Belgium); Nyhavn Rejser (Denmark); L'Oreal (Greece); Khazan (Kuweït); MarCons (Kuweït); Galderma (Sweden); Parship (Sweden); Unum (UK); L'Oreal USA (USA); EDMC Incremental (USA); Reckitt Benckiser (India), Disney (USA); Jazeera Childrens Channel (Mideast and Africa); Hachette Fascicoli (Romania); Pegasus (Romania); EU Funds campaign (Romania); Fire Prevention Campaign (Spain); Deli (Belgium); KMDA (Belgium); Rich Bake (Egypt); Peak Performance (Europe, USA, Asia); Carlsberg (China); PPTV (China); Honda (India); Infocom Development Authority (Singapore); Merino (India); Science Centre Singapore (Singapore)
Digitas
Pages jaunes (France); Dassault (France); Chili's (USA); Kaiser-Permanente (USA); Intuit (USA); Mars Petcare (USA); Comcast (USA); Delta (USA); Mead Johnson (USA); Post (USA); American Express (USA); Harley Davidson (China); L'Oreal (France); OnStar (China); Nestlé (France); Samsung (UK)
2011 Press releases
01-26-2011 Publicis Groupe Proposes to Acquire Chemistry through a Recommended Cash Offer
01-27-2011 Publicis Groupe Increases its Stake in Wefcos - Véronique Morali Appointed Wefcos President
02-10-2011 Publicis Groupe 2010 Annual Results
02-17-2011 Publicis Groupe Acquires London-Based Holler Strengthening Leo Burnett Digital Offer
02-21-2011 Publicis Groupe Launches Publicis Webformance - An Initiative Aimed at Supporting Small and Medium Businesses
02-23-2011 Publicis Groupe Acquires Interactive Communications Ltd. in Taiwan
03-03-2011 Publicis Groupe Acquires Kitcatt Nohr in the UK
03-10-2011 Publicis Groupe Acquires London-Based Airlock in its Latest UK Digital Operation
03-22-2011 Publicis Groupe Acquires India-Based Watermelon
03-30-2011 Jean-Yves Naouri Is Named Executive Chairman of Publicis Worldwide
04-15-2011 Publicis Groupe Sells Its Stake in Freud Communications
04-18-2011 Publicis Groupe Takes Majority Stake in Brazil's Talent Group
04-21-2011 Publicis Groupe : 1st Quarter 2011 Revenue
04-26-2011 Publicis Groupe Acquires Sao Paulo Agency GP7 Furthering Its Expansion into the Brazilian Market
04-27-2011 Publicis Groupe Revitalizes Leo Burnett Brazil Operations
05-12-2011 Publicis Groupe Acquires Beijing-Based Dreams
05-17-2011 Publicis Groupe to Acquire Rosetta. One of the Fastest Growing Digital Marketing Agencies in North America
06-20-2011 Publicis Groupe Further Expands in China with Acquisition of Genedigi
06-28-2011 Publicis Groupe launches Operations in Ecuador
07-04-2011 Publicis Groupe Acquires leading Swiss Agency Spillmann/Felser/Leo Burnett
07-05-2011 Acquisition of Rosetta closed
07-06-2011 Notice of adjustment to the conversion ratio for the 2014 convertible bonds (OCEANE)
07-15-2011 Publicis Groupe S.A. signs a EUR 1.2 billion multi-currency revolving credit facility
07-18-2011 Social Marketing Company to Serve as Strategic Social Media Center for VivaKi Agencies
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.
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.
Free cash flow: cash flow from operations minus capital expenditures for tangible and intangible fixed assets, excluding acquisitions.
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.
Consolidated financial statements - June 30, 2011 (unaudited)
Consolidated income statement
June 30, June 30,
(in millions of euros) 2011 2010 2010
Revenue 2,699 2,538 5,418
Personnel expenses (1,740) (1,613) (3,346)
Other operating expenses (548) (503) (1,105)
Operating margin before depreciation and
amortization 411 422 967
Depreciation and amortization expense
(excluding intangibles arising from
acquisitions) (47) (53) (111)
Operating margin 364 369 856
Amortization of intangibles arising from
acquisitions (17) (17) (34)
Impairment loss - - (1)
Non-current income and expenses 2 1 14
Operating income 349 353 835
Financial expense (42) (40) (81)
Financial income 16 6 16
Cost of net financial debt (26) (34) (65)
Other financial income and expenses (2) (8) (11)
Pre-tax income of consolidated companies 321 311 759
Income taxes (91) (89) (216)
Net income of consolidated companies 230 222 543
Share of profit of associates 10 - 8
Net income 240 222 551
Of which:
- Net income attributable to
non-controlling interests (minority
interests) 9 9 25
- Net income attributable to equity
holders of the parent company (Group
share) 231 213 526
Per share data (in euros) - Net income
attributable to equity holders of the
parent company
Number of shares 202,244,660 204,545,563 202,149,754
Earnings per share 1.14 1.04 2.60
Number of diluted shares 237,179,816 237,073,116 235,470,461
Earnings per share - diluted 1.03 0.95 2.35
Consolidated statement of comprehensive income
June 30, June 30,
(in millions of euros) 2011 2010 2010
Net income for the period (a) 240 222 551
Other comprehensive income
- Revaluation of available-for-sale
investments 7 (1) 12
- Actuarial gains and losses on defined
benefit plans 6 (24) (10)
- Consolidation translation adjustments (145) 431 297
- Deferred taxes on other comprehensive
income (1) 7 4
Total other comprehensive income (b) (133) 413 303
Total comprehensive income for the period
(a) + (b) 107 635 854
Of which:
- Attributable to non-controlling
interests (minority interests) 7 18 33
- Attributable to equity holders of the
parent company (Group share) 100 617 821
Consolidated Balance Sheet
December 31,
(in millions of euros) June 30, 2011 2010
Assets
Goodwill, net 4,350 4,278
Intangible assets, net 827 856
Property, plant and equipment,
net 445 464
Deferred tax assets 85 75
Investments in associates 47 140
Other financial assets 117 113
Non-current assets 5,871 5,926
Inventory and work in progress 313 326
Accounts receivable 5,607 5,953
Other receivables and current
assets 560 572
Cash and cash equivalents 1,933 2,164
Current assets 8,413 9,015
Total assets 14,284 14,941
Liabilities and equity
Share capital 77 77
Additional paid-in capital and
retained earnings, Group share 3,307 3,284
Equity attributable to holders of
the parent company (Group share) 3,384 3,361
Non-controlling interests 23
(minority interests) 21
Total equity 3,407 3,382
Long-term borrowings 1,327 1,783
Deferred tax liabilities 208 219
Long-term provisions 413 458
Non-current liabilities 1,948 2,460
Trade payables 6,493 7,216
Short-term borrowings 820 290
Income taxes payable 57 39
Short-term provisions 127 118
Other creditors and current
liabilities 1,432 1,436
Current liabilities 8,929 9,099
Total liabilities and equity 14,284 14,941
Consolidated cash flow statement
June 30, June 30,
(in millions of euros) 2011 2010 2010
Cash flows from operating activities
Net income 240 222 551
Neutralization of non-cash income and
expenses:
Income taxes 91 89 216
Cost of net financial debt 26 34 65
Capital (gains) losses on disposals
(before tax) (1) (1) (14)
Depreciation, amortization and
impairment loss on property, plant and
equipment and intangible assets 64 70 146
Non-cash expenses on stock options and
similar items 13 15 26
Other non-cash income and expenses 2 3 6
Share of profit of associates (10) - (8)
Dividends received from associates 9 11 14
Taxes paid (104) (103) (219)
Interest paid (32) (36) (76)
Interest received 15 7 17
Change in the working capital
requirement [1] (396) (266) 287
Net cash flows generated by (used in)
operating activities (I) (83) 45 1,011
Cash flows from investing activities
Purchases of property, plant and
equipment and intangible assets (46) (35) (103)
Proceeds from sale of property, plant
and equipment and intangible assets 2 1 25
Purchases of investments and other
financial assets, net (1) (5) 5
Acquisitions of subsidiaries (142) (48) (166)
Disposals of subsidiaries 29 1 1
Net cash flows generated by (used in)
investing activities (II) (158) (86) (238)
Cash flows from financing activities
Capital increase - - -
Dividends paid to holders of the parent
company - - (107)
Dividends paid to non-controlling
interests (11) (14) (21)
Proceeds from borrowings 71 13 7
Repayment of borrowings (12) (59) (52)
Net purchases of non-controlling
interests (3) - (9)
Net (purchases)/sales of treasury shares
and warrants 41 (249) (198)
Net cash flows generated by (used in)
financing activities (III) 86 (309) (380)
Impact of exchange rate fluctuations
(IV) (75) 173 188
Net change in consolidated cash and cash
equivalents (I + II + III + IV) (230) (177) 581
Cash and cash equivalents on January 1 2,164 1,580 1,580
Bank overdrafts on January 1 (36) (33) (33)
Net cash and cash equivalents at
beginning of year (V) 2,128 1,547 1,547
Cash and cash equivalents on June 30 1,933 1,418 2,164
Bank overdrafts on June 30 (35) (48) (36)
Net cash and cash equivalents at end of
year (VI) 1,898 1,370 2,128
Net change in cash and cash equivalents (230) (177) 581
(1) Breakdown of change in the working
capital requirement
Change in inventory and work in progress (11) (73) (14)
Change in accounts receivable and other
receivables (17) (458) (855)
Change in accounts payable, other
creditors and provisions (368) 265 1,156
Change in the working capital
requirement (396) (266) 287
Statement of changes in consolidated shareholders' equity
Reserves
Number of Capital Additional and Translation
outstanding (in millions of stock paid-in retained reserve
shares euros) capital earnings
187,168,768 January 1, 2010 79 2,600 390 (377)
Net income 213
Other
comprehensive
income:
Fair value
adjustments to
available-for-sale
investments
Actuarial gains
and losses on
defined benefit
plans[1] (17)
Consolidation
translation
adjustments 422
Total other
comprehensive
income - - (17) 422
Total income and
expenses for the
period - - 196 422
Dividends (107)
Share-based
compensation[1] 19
Additional
interest on Oranes (3)
Effect of
acquisitions and
commitments to buy
out
non-controlling
interests
Publicis Groupe SA
capital increase
(7,500,000) and cancellation
of treasury shares (3) (215)
Purchases/sales of
(807,764) treasury shares (31)
178,861,004 June 30, 2010 76 2,385 464 45
Cont.
Equity
attributable
to the
holders of
Number of Fair the parent
outstanding (in millions of value Non-controlling Total
shares euros) reserve company interests equity
187,168,768 January 1, 2010 121 2,813 25 2,838
Net income 213 9 222
Other
comprehensive
income:
Fair value
adjustments to
available-for-sale
investments (1) (1) (1)
Actuarial gains
and losses on
defined benefit
plans[1] (17) (17)
Consolidation
translation
adjustments 422 9 431
Total other
comprehensive
income (1) 404 9 413
Total income and
expenses for the
period (1) 617 18 635
Dividends (107) (14) (121)
Share-based
compensation[1] 19 19
Additional
interest on Oranes (3) (3)
Effect of
acquisitions and
commitments to buy
out
non-controlling
interests - (8) (8)
Publicis Groupe SA
capital increase
(7,500,000) and cancellation
of treasury shares (218) (218)
Purchases/sales of
(807,764) treasury shares (31) (31)
178,861,004 June 30, 2010 120 3,090 21 3,111
Reserves
Number of Capital Additional and Translation
outstanding (in millions of stock paid-in retained reserve
shares euros) capital earnings
182,371,
070 January 1, 2011 77 2,432 807 (88)
Net income 231
Other
comprehensive
income:
Fair value
adjustments to
available-for-sale
investments
Actuarial gains
and losses on
defined benefit
plans[1] 5
Consolidation
translation
adjustments (143)
Total other
comprehensive
income 5 (143)
Total income and
expenses for the
period - - 236 (143)
Publicis Groupe SA
150,575 capital increase -
Dividends (129)
Share-based
compensation [(1)] 15
Additional
interest on Oranes (4)
Effect of
acquisitions and
commitments to buy
out
non-controlling
interests
Purchases/sales of
1,485,457 treasury shares 41
184,007,102 June 30, 2011 77 2,432 966 (231)
Cont.
Equity
attributable
to the
holders of
Number of Fair the parent
outstanding (in millions of value Non-controlling Total
shares euros) reserve company interests equity
182,371,
070 January 1, 2011 133 3,361 21 3,382
Net income 231 9 240
Other
comprehensive
income:
Fair value
adjustments to
available-for-sale
investments 7 7 7
Actuarial gains
and losses on
defined benefit
plans[1] 5 5
Consolidation
translation
adjustments (143) (2) (145)
Total other
comprehensive
income 7 (131) (2) (133)
Total income and
expenses for the
period 7 100 7 107
Publicis Groupe SA
150,575 capital increase
Dividends (129) (12) (141)
Share-based
compensation [1] 15 15
Additional
interest on Oranes (4) (4)
Effect of
acquisitions and
commitments to buy
out
non-controlling
interests 7 7
Purchases/sales of
1,485,457 treasury shares 41 41
184,007,102 June 30, 2011 140 3,384 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 calculation details
Earnings per share and diluted earnings per share
(in millions of euros, except for share June 30, June 30,
data) 2011 2010
Net income used for the calculation of
earnings per share
Group net income a 231 213
Impact of dilutive instruments:
- Savings in financial expenses related
to the conversion of debt instruments,
net of tax [1] 14 13
Group net income - diluted b 245 226
Number of shares used to calculate (net)
earnings per share
Average number of shares that make up the
share capital 191,676,022 195,469,852
Treasury shares to be deducted (average
for the year) (8,176,910) (11,231,966)
Shares to be issued to redeem the Oranes 18,745,548 20,307,677
Average number of shares used for the
calculation c 202,244,660 204,545,563
Impact of dilutive instruments: [2]
- Free shares and dilutive stock options 5,377,868 3,904,161
- Warrants 1,171,104 172,692
- Shares resulting from the conversion of
convertible bonds [1] 28,386,184 28,450,700
Number of diluted shares d 237,179,816 237,073,116
(in euros)
Earnings per share a/c 1.14 1.04
Earnings per share - diluted b/d 1.03 0.95
- In 2011 and 2010, the 2018 and 2014 Oceanes are included in the calculation.
- Only stock options and warrants with a dilutive impact, i.e., whose strike price is lower than the average strike price for the period, are included in the calculation.
- Headline earnings per share and diluted earnings per share
(in millions of euros, except for share June 30, June 30,
data) 2011 2010
Net income used to calculate headline
[(1)] earnings per share
Group net income 231 213
Items excluded:
- Amortization of intangibles from
acquisitions, net of tax 10 10
- Impairment, net of tax - -
Recurrent Group net income e 241 223
Impact of dilutive instruments:
- Savings in financial expenses linked to
the conversion of debt instruments, net of
tax 14 13
Recurrent Group net income, diluted f 255 236
Number of shares used to calculate net
earnings per share
Average number of shares comprising the
share capital 191,676,022 195,469,852
Treasury shares to be deducted (average
for the year) (8,176,910) (11,231,966)
Shares to be issued to redeem the Oranes 18,745,548 20,307,677
Average number of shares used for the
calculation c 202,244,660 204,545,563
Impact of dilutive instruments:
- Free shares and dilutive stock options 5,377,868 3,904,161
- Warrants 1,171,104 172,692
- Shares resulting from the conversion of
convertible bonds 28,386,184 28,450,700
Number of diluted shares d 237,179,816 237,073,116
(in euros)
Headline earnings per share [1] e/c 1.19 1.09
Headline earnings per share - diluted
[1] f/d 1.08 1.00
- Net earnings per share before amortization of intangibles resulting from acquisition and impairment.
PUBLICIS GROUPE CONTACTS
Peggy Nahmany, Corporate Communication: +33(0)1-44-43-72-83
[email protected]
Martine Hue, Investor Relations: + 33(0)1-44-43-65-00
[email protected]
SOURCE Publicis Groupe
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