Publicis Groupe Sa · EURONEXT:PUB
Publicis Groupe Sa — H1 2016 Earnings Presentation
47 slides from Publicis Groupe Sa's earnings presentation, Jul 21, 2016
Slide 1: Publicis Groupe H1 2016 Results
1 PUBLICIS GROUPE H1 2016 RESULTS July 21, 2016
Slide 2: Disclaimer
2 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
Slide 3: Solid H1 2016 Earnings
3 SOLID H1 2016 EARNINGS H1 2016 Q2 2016 • Revenue • Reported growth +4.6 % +0.9 % • Growth excluding FX +7.1 % +4.6 % • Organic growth +2.8 % +2.7 % • Operating margin +5.1 % Operating margin rate 13.0 % • Groupe net income +5.0 % • Headline EPS, diluted (1) +7.7 % • Free cash flow (before change i
Slide 4: H1 Revenue
4 H1 REVENUE (EUR million) Q1 Q2 H1 2016 REVENUE 2,291 2,462 4,753 2015 REVENUE 2,103 2,439 4,542 Reported growth +8.9% +0.9% +4.6% Growth excluding FX +10.0% +4.6% +7.1% Organic growth +2.9% +2.7% +2.8%
Slide 5: Q2 2016 Revenue by Geography
5 Q2 2016 REVENUE BY GEOGRAPHY Q2 2016 Organic (EUR million) Q2 2016 Q2 2015 vs. Q2 2015 growth Europe 718 681 +5.4% +7.3% North America 1,319 1,323 -0.3% -0.1% Asia Pacific 273 265 +3.0% +5.5% Latin America 81 101 -19.8% +4.8% Middle East Africa 71 69 +2.9% -1.5% Total 2,462 2,439 +0.9% +2.7%
Slide 6: H1 2016 Revenue by Geography
6 H1 2016 REVENUE BY GEOGRAPHY H1 2016 Organic (EUR million) H1 2016 H1 2015 vs. H1 2015 growth Europe 1,349 1,269 +6.3% +5.5% North America 2,620 2,475 +5.9% +1.4% Asia Pacific 503 486 +3.5% +4.7% Latin America 152 191 -20.4% +0.9% Middle East Africa 129 121 +6.6% -0.5% Total 4,753 4,542 +4.6% +2.8
Slide 7: H1 2016 Organic Growth by Country
7 H1 2016 ORGANIC GROWTH BY COUNTRY Argentina, Chile, Japan, Mexico, Netherlands, Norway, Poland, > +10% Romania, South Africa, Thailand, Turkey, Ukraine, Vietnam China, France, Germany, Indonesia, +5% to +10% Italy, Korea, Singapore, Taiwan Australia, Belgium, India, Malaysia, Russia, Spain, 0 to +
Slide 8: Digital Revenue
8 DIGITAL REVENUE H1 2016 H1 2016 H1 2015 vs. H1 2015 EUR million 2,549 2,314 +10.2% % of Groupe revenue 53.6% 50.9% 2016 organic growth: +6.3%
Slide 9: H1 2016 Organic Growth
9 H1 2016 ORGANIC GROWTH North Asia Latin Middle East Europe Total America Pacific America Africa Digital +12.5% +2.5% +23.0% +1.3% +10.7% +6.3% Analog -0.1% -0.4% -3.6% +0.9% -3.5% -0.8% Total +5.5% +1.4% +4.7% +0.9% -0.5% +2.8%
Slide 10: H1 2016 Results
10 H1 2016 RESULTS
Slide 11: Consolidated Income Statement
11 CONSOLIDATED INCOME STATEMENT (1) H1 2016 (EUR million) H1 2016 H1 2015 vs. H1 2015 Revenue 4,753 4,542 +4.6% EBITDA 704 675 Operating margin 619 589 +5.1% as % of revenue 13.0% 13.0% Amortization of intangibles arising from acquisitions (40) (43) Non-current income and expense 16 8 Operating inc
Slide 12: Operating Margin
12 OPERATING MARGIN (EUR million) H1 2016 H1 2015 Revenue 4,753 4,542 Personnel costs (excl. restructuring costs) (3,016) (2,905) Restructuring costs (55) (39) Other operating expenses (978) (923) Depreciation (85) (86) Operating margin 619 589 As a % of revenue 13.0% 13.0%
Slide 13: Change in Operating Margin as a % of Revenue
13 CHANGE IN OPERATING MARGIN AS A % OF REVENUE 13.0% -40 bp 13.0% +60 bp +10 bp -40 bp +10 bp H1 2015 Impact Personnel Restructuring Other operating SCC H1 2016 of FX and costs costs costs efficiency Reported acquisitions Reported
Slide 14: Net Financial Income (Expenses)
14 NET FINANCIAL INCOME (EXPENSES) (EUR million) H1 2016 H1 2015 H1 2016 vs. H1 2015 BNP Loan 2020, Eurobond 2021 & 2024 (30) (31) 1 Other financial expense net of interest income 2 1 1 Discount on long term debt (earn-out and finance leases) (11) (10) (1) Interest on net financial debt (39) (40) 1
Slide 15: Effective Tax Rate
15 EFFECTIVE TAX RATE H1 2016 H1 2015 Income taxes (EUR million) 162 159 Effective tax rate 29.7% 30.5%
Slide 16: Headline Earnings per Share, Diluted
16 HEADLINE EARNINGS PER SHARE, DILUTED (1) €1.81 +7.7% €1.68 +28.2% €1.31 H1 2014 H1 2015 H1 2016 (1) See definitions in Appendices
Slide 17: Balance Sheet
17 BALANCE SHEET (EUR million) June 30, 2016 June 30, 2015 Goodwill and intangibles 11,588 11,559 Other fixed assets 932 917 Current and deferred tax (472) (399) Working capital (2,354) (2,477) TOTAL 9,694 9,600 Group equity 6,495 6,021 Minority interests 19 29 TOTAL EQUITY 6,514 6,050 Provisions fo
Slide 18: Net Debt / (Net Cash)
18 NET DEBT / (NET CASH) (EUR million) H1 2016 FY 2015 H1 2015 Net Debt (Net Cash), average 2,380 2,429 1,881 Net Debt (Net Cash), at end of period 2,460 1,872 2,906
Slide 19: Financial Ratios
19 FINANCIAL RATIOS Past 12 months Past 12 months Internal ending ending objectives June 30, 2016 June 30, 2015 Average net debt / EBITDA (1) 1.58 1.22 < 1.50 Net Debt / Shareholders’ Equity 0.38 0.48 < 0.50 Interest Cover (2) 23 29 >7 (1) See definitions in Appendices (2) EBITDA / Cost of Net Finan
Slide 20: Liquidity as of June 30, 2016
20 LIQUIDITY AS OF JUNE 30, 2016 (EUR million) TOTAL DRAWN AVAILABLE Committed Facilities 364-day revolving credit facilities 205 120 85 5-year revolving credit facility (1) 517 - 517 5-year syndicated facility (Club Deal) (2) 2,000 - 2,000 Total Committed Facilities 2,722 120 2,602 Cash and Marketa
Slide 21: Free Cash Flow
21 FREE CASH FLOW H1 2016 (EUR million) H1 2016 H1 2015 vs. H1 2015 EBITDA (1) 704 675 Interest paid (12) (18) Tax paid (79) (136) Other items 23 20 Cash flows from operations before change in WCR 636 541 +17.6% Capex, net of disposals (1) (72) (83) Free Cash Flow before change in WCR 564 458 +23.1%
Slide 22: Use of Cash
22 USE OF CASH (EUR million) H1 2016 H1 2015 Free Cash Flow before change in WCR 564 458 Change in WCR (1,102) (814) Acquisitions (net of disposals) (13) (3,002) Earn-out (107) (90) Buy-out (1) (30) (21) Dividends paid (16) (7) Share buy-back - (477) Sales of treasury shares due to exercise of stock
Slide 23: Where Are We Now?
23 WHERE ARE WE NOW ?
Slide 24: The Power of One: A Unique End-to-End Offering
24 THE POWER OF ONE: A UNIQUE “END-TO-END” OFFERING • Traditional CREATION • TV • Radio • Print • Outdoor PUBLICIS PUBLICIS MEDIA COMMUNICATIONS MEDIA PLANNING • Digital • Website • Programmatic • Data analytic • Search Sapient Inside CLIENT MEDIA • Emerging media: advanced TV, Digital BUYING out-of
Slide 25: Global Client Leaders
25 GLOBAL CLIENT LEADERS A KEY ROLE IN THE NEW ORGANIZATION • Global Client Leaders (GCL) have been appointed Our aim: help our clients solve their problems, build their brands, accelerate their sales and transform their businesses A partner to our clients, to leverage all of our assets to bring
Slide 26: Publicis' 90th Anniversary
26 PUBLICIS’ 90TH ANNIVERSARY • Launch of #Publicis90, a global initiative to provide funding and mentoring for a selection of 90 of the most innovative startups or scale-ups A tribute to the entrepreneurial spirit of Publicis founder Marcel Bleustein-Blanchet • Over 3,500 applications from more t
Slide 27: Publicis Groupe at the Forefront of Innovation
27 PUBLICIS GROUPE AT THE FOREFRONT OF INNOVATION • International event organized by Publicis Groupe and Groupe Les Echos, dedicated to the growth of startups, to digital transformation and innovation. For its first edition, Viva Technology Paris brought together over 45,000 visitors of which tens
Slide 28: Global Strategic Partnership with Tencent
28 GLOBAL STRATEGIC PARTNERSHIP WITH TENCENT • The first partnership with all 11 products of Tencent, China’s largest internet company, that transcends Publicis Groupe’s three solution hubs: Publicis Media, Publicis Communications, Publicis.Sapient • The partnership will cover 3 key areas: • Future
Slide 29: Conclusion
29 CONCLUSION
Slide 30: Conclusion: Solid First Half, Confirmed 2016 Outlook
30 2016 • Solid first half of the year Confirmed 2016 outlook Q3 organic growth impacted by last year’s account losses Good progress in delivering savings and Sapient synergies Further dividend pay out increase expected in 2016 (vs. 39.5% in 2015) • Potential impact of Brexit In 2015, the
Slide 31: Our Priorities for 2016-2017
31 OUR PRIORITIES FOR 2016-2017 1 Transformation Finalize the transformation in H1 2016 2 Outlook CONCLUSION Achieve our 2016 objectives 3 Organic growth Benefit from Groupe transformation as early as 2017
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Slide 33: Appendices
33 APPENDICES
Slide 34: H1 2016 Revenue in USD Million
34 H1 2016 REVENUE IN USD MILLION H1 2016 H1 2016 H1 2015 vs. H1 2015 Revenue 5,304 5,064 +4.7%
Slide 35: H1 2016: Revenue by Activity
35 H1 2016: REVENUE BY ACTIVITY Analog & Digital Media = 24% 11% Media SAMS 11% in 2015 14% 13% in 2015 54% 51% in 2015 Digital 21% 25% in 2015 Advertising
Slide 36: H1 Revenue by Sector
36 H1 REVENUE BY SECTOR (1) H1 2016 H1 2015 Retail Non Food Retail Non Food 6% consumer 5% consumer Other Other products products 6% 7% 15% 16% Leisure/Energy/ Leisure/Energy/ Luxury Luxury 7% 7% Automotive 14% Food and Automotive beverage 14% Food and beverage 12% 11% Financial Healthcare Healthcar
Slide 37: H1 2016 Revenue by Sector: Analog vs. Digital
37 H1 2016 REVENUE BY SECTOR (1) : ANALOG VS. DIGITAL 26% 30% 37% 38% 46% 59% 62% 61% 74% 70% 63% 62% 54% 41% 38% 39% Non Food consumer Food and beverage TMT Automotive Retail Healthcare Financial Leisure/Energy/Luxury products Digital Analog (1) Based on 2,840 clients representing 85% of Groupe rev
Slide 38: Revenue & Organic Growth Calculation
38 REVENUE & ORGANIC GROWTH CALCULATION (EUR million) Q1 Q2 H1 Currency impact (EUR million) 2015 revenue 2,103 2,439 4,542 Q1 Q2 H1 Currency impact (2) (20) (85) (105) GBP (2) (7) (19) (26) 2015 revenue at 2016 exchange rate (a) 2,083 2,354 4,437 USD (2) 23 (24) (1) 2016 revenue before impact of Ot
Slide 39: Q2 2016 Revenue by Geography (Alternative Breakdown)
39 Q2 2016 REVENUE BY GEOGRAPHY (ALTERNATIVE BREAKDOWN) Reported Organic (EUR million) Q2 2016 Q2 2015 growth growth Europe (1) 702 663 +5.9% +7.3% North America 1,319 1,323 -0.3% -0.1% BRIC + MISSAT (2) 254 261 -2.7% +5.4% Rest of the world 187 192 -2.6% +2.6% Total 2,462 2,439 +0.9% +2.7% (1) Euro
Slide 40: H1 2016 Revenue by Geography (Alternative Breakdown)
40 H1 2016 REVENUE BY GEOGRAPHY (ALTERNATIVE BREAKDOWN) Reported Organic (EUR million) H1 2016 H1 2015 growth growth Europe (1) 1,320 1,238 +6.6% +5.4% North America 2,620 2,475 +5.9% +1.4% BRIC + MISSAT (2) 459 476 -3.6% +3.6% Rest of the world 354 353 +0.3% +2.9% Total 4,753 4,542 +4.6% +2.8% (1)
Slide 41: Gross Debt as of June 30, 2016
41 GROSS DEBT AS OF JUNE 30, 2016 Breakdown by MATURITY July 2016 – July 2017 – July 2018 – July 2019 – July 2020 (EUR million) Total June 2017 June 2018 June 2019 June 2020 onwards Eurobond 2021 (1) 787 - - - - 787 Eurobond 2024 (1) 662 - - - - 662 Medium term loan 1,438 - 479 479 480 - Earn out /
Slide 42: Net Debt as of June 30, 2016: Breakdown by Currency
42 NET DEBT AS OF JUNE 30, 2016 Breakdown by CURRENCY (EUR million) Total EURO USD GBP Others Eurobond 2021 (1) (2) 787 - 787 - - Eurobond 2024 (1) (2) 662 - 662 - - Medium term loan 1,438 446 992 - - Earn out / Buy out 387 63 133 66 125 Other debt (1) 250 121 103 5 21 Cash & marketable securities (
Slide 43: Net Debt as of June 30, 2016: Breakdown by Rate
43 NET DEBT AS OF JUNE 30, 2016 Breakdown by RATE Earn-out / Fixed Floating (EUR million) Total Buy-out rate rate Eurobond 2021 (1) (2) 787 - 787 - Eurobond 2024 (1) (2) 662 - 662 - Medium term loan 1,438 - - 1,438 Other debt (1) 250 - 96 154 Total gross debt excluding earn out/buy out 3,137 1,545 1
Slide 44: Group Net Income to Headline Group Net Income Reconciliation
44 GROUP NET INCOME TO HEADLINE GROUP NET INCOME RECONCILIATION (EUR million) H1 2016 H1 2015 Group net income 381 363 Amortization of intangibles arising on acquisitions, net of tax 25 28 Net capital gains / (losses) on disposal of assets (10) (3) Revaluation of earn-out 10 (5) Headline Group Net I
Slide 45: Definitions
45 DEFINITIONS • EBITDA: operating margin before depreciation. • Operating margin: Revenue after personnel costs, other operating expenses (excl. non-current income and expense) and depreciation (excl. amortization of intangibles arising on acquisitions). • Operating margin rate: Operating margin as
Slide 46: Contacts
46 CONTACTS • Press Peggy Nahmany, Vice-President, Director of Communications Tel. +33 1 44 43 72 83 Email. peggy.nahmany@publicisgroupe.com • Investor Relations Jean-Michel Bonamy, Vice-President Investor Relations & Strategic Financial Planning Tel. +33 1 44 43 77 88 Email. jean-michel.bonamy@publ
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