Publicis Groupe Sa · EURONEXT:PUB
Publicis Groupe Sa — FY2020 Earnings Presentation
47 slides from Publicis Groupe Sa's earnings presentation, Feb 3, 2021
Slide 1: FY 2020 Results
Sf = FY 2020 RESULTS 3 February 2021
Slide 2: Forward-looking statements disclaimer
Certain information contained in this document, other than historical information, may constitute forward-looking statements or unaudited financial forecasts. These forward-looking statements and forecasts are subject to risks and uncertainties that could cause actual results to differ materially fr
Slide 3: FY 2020 Highlights
FY 2020 HIGHLIGHTS FY 2020 RESULTS STRATEGIC UPDATE
Slide 4: Solid performance in 2020
SOLID PERFORMANCE IN 2020 DEMONSTRATING THE STRENGTH OF OUR MODEL We contained revenue decline & maintained strong financials in 2020 in a tough Covid-19 context thanks to OUR INVESTMENT in Publicis Sapient & Epsilon OUR COUNTRY MODEL to deliver data + creativity + media + technology end to end a MR
Slide 5: Outperforming the industry in 2020
OUTPERFORMING THE INDUSTRY IN 2020 WITH SOLID PERFORMANCE IN THE U.S. Group Organic growth at -6.3% in 2020, -3.9% in Q4 U.S. Organic growth of -2.0% in 2020, turning positive at +0.5% in Q4 PUBLICIS GROUPE, Capturing the shift in our clients’ investment towards digital channels, e-commerce and dire
Slide 6: Performance of other regions reflects a new wave of lockdown measures in Q4
PERFORMANCE OF OTHER REGIONS REFLECTS A NEW WAVE OF LOCKDOWN MEASURES IN Q4 * Q4 organic growth at -9.1% * -11% organic growth in the UK and in Germany Europe — ; * Sequential improvement in France to -7.2% organic, with positive media . * Q4 organic growth at -8.6% Asia a 5 ; * Improvement in China
Slide 7: Continued market share gains in new business
CONTINUED MARKET SHARE GAINS IN NEW BUSINESS RETENTION AND REINVENTION | CONSOLIDATION NEW CLIENTS WITH EXISTING CLIENTS : WITH EXISTING CLIENTS : WON LOREAL | @) ED | fy hulu er sernona . Preckitt i Media Media i Media Media Media Kraft Hein Benckiser i China Global i Global Global___ North Am. Med
Slide 8: Our country model, activity mix, cost discipline
Our country model Our activity mix Our cost discipline 7
Slide 9: FY 2020 Highlights
Sf = FY 2020 HIGHLIGHTS FY 2020 RESULTS STRATEGIC UPDATE
Slide 10: Net revenue
NET REVENUE (EUR million) Ql Q2 Q3 Q4 FY 2020 net revenue’ 2,481 2,293 2,343 2,595 9,712 2019 net revenue 2,118 2,234 2,577 2,871 9,800 Reported growth +17.1% +2.6% -9.1% -9.6% -0.9% Organic growth -2.9% -13.0% -5.6% -3.9% -6.3% PUBLICIS GROUPE 9
Slide 11: Q4 2020 net revenue by geography
Q4 2020 NET REVENUE BY GEOGRAPHY 2020 Organic (EUR million) Q4 2020 Q4 2019 vs. 2019 growth Europe 643 728 -11.7% -9.1% North America 1,530 1,639 Asia Pacific 268 302 . . . ae — : _ I 36 ~_ —_— ‘07 snenienanane nneniensinanaane - a Total 2,595 2,871 PUBLICIS GROUPE 10
Slide 12: Q4 2020 performance - Europe
RO PUBLICIS GROUPE Q4 2020 PERFORMANCE - EUROPE 2020 Organic (EUR million) Q4 2020 Q4 2019 vs. 2019 growth Europe 643 728 -11.7% -9.1% UK France Germany 8% of Groupe net revenue Organic growth: -11.0% Creative still impacted by the current context Media slightly positive Publicis Health posting agai
Slide 13: Q4 2020 performance - North America
RO PUBLICIS GROUPE Q4 2020 PERFORMANCE - NORTH AMERICA 2020 Organic (EUR million) Q4 2020 Q4 2019 vs. 2019 growth North America 1,530 1,639 -6.7% +0.2% US + 57% of Groupe net revenue * Organic growth: +0.5% * Creative & Media still negative in Q4 due to Covid impact, partly offset by the good perfor
Slide 14: Q4 2020 performance - Rest of World
Q4 2020 PERFORMANCE - REST OF WORLD 2020 Organic (EUR million) Q4 2020 Q4 2019 vs. 2019 growth Asia Pacific 268 302 “11.3% -8.6% Latin America 76 107 -29.0% -10.8% Middle East Africa 78 95 -17.9% -12.1% Asia Pacific + 10% of Groupe net revenue * Organic growth: -8.6% * Media in line with the perform
Slide 15: FY 2020 net revenue by geography
FY 2020 NET REVENUE BY GEOGRAPHY 2020 Organic (EUR million) FY 2020 FY 2019 vs. 2019 growth Europe 2,278 2,630 -13.4% “12.7% North America 5,997 5,516 +8.7% -2.4% Asia Pacific 932 1,006 7. 4% “6. 7% Tana Amerie er er ee) oo 8 o% _ “wade ca can atic —.. — a "7 — TH ~~ _ —— Tc. > oy — on (1) -10.8% ex
Slide 16: Net revenue organic growth by country
NET REVENUE ORGANIC GROWTH BY COUNTRY > 0% -10% to 0% -10% to -20% < -20% RO PUBLICIS GROUPE Q4 2020 Argentina, Indonesia, South Korea, Netherlands, New Zealand, United States Brazil, Canada, China, France, Japan, Spain, United Arab Emirates Germany, India, Italy, Mexico, United Kingdom Austria, Aus
Slide 17: Consolidated income statement
CONSOLIDATED INCOME STATEMENT (EUR million) FY 2020 FY 2019 Revenue 10,788 11,001 Net revenue 9,712 9,800 EBITDA 2,158 2,245 Operating margin 1,558 1,659 Operating margin excl. Epsilon transaction costs 1,558 1,699 Non-current income and expenses 1 qa Net financial expenses (189) (106) Income taxes
Slide 18: Operating margin
OPERATING MARGIN (EUR million) FY 2020 FY 2019 Net revenue 9,712 9,800 Personnel costs (6,067) (5,957) Restructuring costs (175) (116) Other operating expenses (1,432) (1,586) Depreciation (480) (482) Operating margin 1,558 1,659 as a % of Net revenue 16.0% 16.9% Operating margin excl. Epsilon trans
Slide 19: FY 2020 - Cost reduction plan
FY 2020 - COST REDUCTION PLAN 8,101 €467m net cost reduction 520 | oo €525m cost reduction at constant bonuses Operating expenses 2019 PUBLICIS FX and Comparable Personnel Real estate Other Additional Operating Perimeter operating —_—Cost of sales expenses plan All in GBA (including bonus expenses i
Slide 20: FY 2020 - Change in operating margin
FY 2020 - CHANGE IN OPERATING MARGIN AS A % OF NET REVENUE 17.3% -60bps -80bps +280bps 16.0% | | -30bps +60bps — | | 2019 FX and 2019 at 2020 Restructuring 2019 at Fixed People Bad debt Freelance Occupancy G&A 2020 reported structure FX and comparable personnel incentive costs costs structure restru
Slide 21: Net financial income (expense)
NET FINANCIAL INCOME (EXPENSE) (EUR million) FY 2020 FY 2019 Interest expenses (143) (14) Other financial expense net of Interest income 46 95 Discount on long term debt (6) (6) ~ — = ~ — LEENA oe sense on se Interest on lease liabilities (77) (70) Foreign exchange gain (loss) (2) q) Other financial
Slide 22: Income tax and effective tax rate
INCOME TAX AND EFFECTIVE TAX RATE (EUR million) FY 2020 FY 2019 Effective tax rate 196 24. Reported income taxes Reversal come tax on amortization of intangibles a ig from acqu 85 Reversal in income tax on impairment and real estate consolidation 56 46 Reversal in income tax on other items 3 (6) 340
Slide 23: Headline earnings per share, diluted
HEADLINE EARNINGS PER SHARE, DILUTED‘ €5.02 » -14.9% €4.27 ———————.,, — — | <= =~ FY 2019 FY 2020 Seouee. (1) See definition in Supplemental Information en
Slide 24: Dividend
DIVIDEND €2.12 €2.00 €1.152 = a, Dividend % = 6.8% 9 pay-out © 44.9% 22.9% 46.8% — 2018 2019 2020 2020 dividend to be submitted to May 26, 2021 AGM’s approval Option for dividend in cash or shares pusticis (1) See definition in Supplemental Information GROUPE (2) Dividend reduced from 2.30 euros to
Slide 25: Free cash flow
FREE CASH FLOW (EUR million) FY 2020 FY 2019 EBITDA” 2,158 2,245 Interests paid and received (113) 1 Repayment of lease liabilities and related interests (461) (480) Tax paid (293) (349) Other items coccinea ccna bccn Cash flows from operations before Capex" co) 1,345 1,478 Capex, net of disposals 2
Slide 26: Use of cash
RO PUBLICIS GROUPE USE OF CASH (EUR million) FY 2020 FY 2019 Free Cash Flow before change in WCR “? 1,190 1,253 Change in WCR 1,047 394 Acquisitions (net of disposals) (20) (3,950) Earn-out & Buy-out (144) (125) Dividends paid (112) (297) Share buy-back, net of sales 8 2 Exercise of warrants - 5 Non
Slide 27: Balance sheet
BALANCE SHEET (EUR million) Dec. 31, 2020 Dec. 31, 2019 Goodwill and intangibles 12,367 13,608 Net right of use 1,645 2,122 Other fixed assets 882 969 Current and deferred tax (326) (498) Working capital (3,731) (2,969) TOTAL 10,837 13,232 Group equity 7,182 7,401 Minority interests nn ee TOTAL EQUI
Slide 28: Net financial debt
NET FINANCIAL DEBT (EUR million) FY 2020 FY 2019 Net Financial Debt, average 3,286 2,375 Net Financial Debt, at end of period 833 2,713 Qe PUBLICIS GROUPE 27
Slide 29: Financial ratios
FINANCIAL RATIOS 2020 2019 Internal objectives (Average net financial debt + Average Lease liability) / EBITDA 2.6x 2.1x < 2.2x (Net financial debt + Lease liability) / Shareholders’ Equit 0.41x 0.71x < 0.80x EBITDA / Cost of net financial debt & Lease liability 11x 24x > 7x Sue (1) See definitions
Slide 30: Liquidity as of December 31, 2020
LIQUIDITY AS OF DECEMBER 31, 2020 Dec. 31, 2020 Dec. 31, 2019 (EUR million) Total Drawn Available Available 364-day revolving credit facilities 165 - 165 165 5-year revolving credit facility 441 - 441 467 5-year syndicated facility (Club Deal) 2,000 - 2,000 2,000 Total Committed Facilities 2,606 - 2
Slide 31: Strategic Update
FY 2020 HIGHLIGHTS FY 2020 RESULTS STRATEGIC UPDATE
Slide 32: 2021: Another challenging year
2021: ANOTHER CHALLENGING YEAR The ongoing pandemic means we will double down on 3 priorities: KEEPING OUR PEOPLE STRONG MAKING OUR CLIENTS WINAN A PLATFORM WORLD IMPROVING OUR. EFFICIENCY PUBLICIS GROUPE 34
Slide 33: Keep our people strong
KEEP OUR PEOPLE STRONG NS SAFETY Prioritizing physical & mental health FLEXIBILITY Fluid working practices, resource allocation, access to learning & career tracking through Marcel DIVERSITY Accelerating our DE&l agenda, guided by the Diversity Progress Council GROUPE
Slide 34: Help our clients win in a platform world
9, HELP OUR CLIENTS WINZIN A PLATFORM WORLD 4 imperatives to unlock growth : p g Top 200 clients™: 5 a REAL DISRUPTIVE * +1.8% net revenue, accelerating in Q4 IDENTITIES eis * FMCG and healthcare growth more than offsets auto and finance decline Client industry performances on 12 months Leisure, Ene
Slide 35: Improve our efficiency
(GS By, ji Ry, IMPROVE OUR EFFICIENCY 4 structural competitive advantages to maintain best-in-class financials while investing in future growth GLOBAL COUNTRY SHARED MARCEL DELIVERY MODEL SERVICES CENTERS Centralized support Supporting non-client- 80,000 users Over 10,000 experts in functions in eac
Slide 36: Conclusion & outlook
CONCLUSION & OUTLOOK We stood strong in the storm in 2020 thanks to our transformation Uncertainty caused by the virus to continue No organic growth guidance for full year 2021 at this stage Q1 expected to be negative, growth to return in Q2 Improvement in operating margin rate up to 50bps in 2021 F
Slide 37: Appendix
APPENDIX
Slide 38: Net revenue & organic growth calculation
NET REVENUE & ORGANIC GROWTH CALCULATION (EUR million) Ql Q2 Q3z Q4 2020 Currency impact 2019 net revenue (EUR - million) Ql Q2 Q3 Q4 Currency impact @ 33 q) (95) S6i8 vet 5030 Sack ‘ GBP 2 3 @) qa) ay 201 net revenue exchange rate 2151 2,233 2,482 se os USD @ 33 24 (55) (96) 2020 net revenue before
Slide 39: FY 2020 net revenue by sector
FY 2020 NET REVENUE BY SECTOR (1) Other Leisure/Energy/Luxury 5% Automotive 16% Non Food consumer Financial products services 1% 15% Healthcare T™T 12% 13% Food and beverage 13% ay (1) Based on 3,620 clients representing 91% of net revenue 38
Slide 40: Condensed consolidated income statement
CONDENSED CONSOLIDATED INCOME STATEMENT (EUR million) FY 2020 FY 2019 Net revenue 9,712 9,800 Pass-through revenue 1,076 1,201 Revenue 10,788 11,001 EBITDA 2,158 2,245 Depreciation (600) (586) Operating margin 1,558 1,659 Amortization of intangibles arising from acquisitions (339) (204) Impairment /
Slide 41: Pass-through revenue 2020 split
4 0 - 40 (1) Pass-through revenue of €1,076 million in 2020 are split between €1,190 million as pass-through costs and €120 million as depreciation
Slide 42: Pass-through revenue 2019 split
(1) Pass-through revenue of €1,201 million in 2019 are split between €1,097 million as pass-through costs and €104 million as depreciation 41
Slide 43: Debt as of December 31, 2020
DEBT AS OF DECEMBER 31, 2020 Breakdown by maturity 2025 (EUR million) Total 2021 2022 2023 2024 Onwards Eurobond 2021 699 699 Eurobond 2024 602 602 Eurobond 2025 725 725 MM @) Eurobond 2031 () (2 718 718 Medium term loans “) 150 150 Earn out / Buy out 265, 101 83 40 38 3 Other debt © 151 143 8 Total
Slide 44: Net debt as of December 31, 2020
NET DEBT AS OF DECEMBER 31, 2020 Breakdown by currency (EUR million) Total EUR USD GBP Others Eurobond 2021 699 699 Eurobond 2023 497 497 Eurobond 2024 602 602 Eurobond 2025 (0) 725 725 Eurobond 2028 “) 726 726 Eurobond 2031? 718 718 Medium term loans “ 150 150 Earn-out / Buy-out 265 8 171 3 83 ‘Oth
Slide 45: As of December 31, 2020: breakdown by rate
AS OF DECEMBER 31, 2020 Breakdown by rate (EUR million) Total Earn-out / Buy-out Fixed rate Floating rate Eurobond 2021 699 699 ‘Eurobond 2023 497 497 ‘Eurobond 2024 602 602 ‘Eurobond 2025 0@ 725 725 Eurobond 2028 “) @ 726 726 Eurobond 2031 718 718 Medium term loans 150 Other debt “ 151 Total gross
Slide 46: Definitions
DEFINITIONS Net revenue: Revenue less pass-through costs which comprise amount paid to external suppliers engaged to perform a project and charged directly to clients. Those costs are mainly production & media costs and out of pocket expenses. Organic growth: Change in net revenue excluding the impa
Slide 47: Contact
CONTACT Press Delphine Stricker, Group Communications Director Tel. + 33 6 38 81 40 00 / Email. delphine.stricker@publicisgroupe.com Investor Relations Alessandra Girolami, Vice-President Investor Relations & Strategic Financial Planning Tel. + 33 144 43 77 88 / Email. al: ndra.girolami@pubilici: Br