Publicis Groupe SA · EURONEXT:PUB
Publicis Groupe SA — Q3 2019 Earnings Presentation
26 slides from Publicis Groupe SA's earnings presentation, Oct 10, 2019
Slide 1: Third Quarter 2019
THIRD QUARTER 2019 10 OCTOBER 2019
Slide 2: Disclaimer
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 ma
Slide 3: Q3 2019 Highlights
Q3 2019 HIGHLIGHTS ae e ° e Teh Sa 9 gts Me e <,' e oe “eee ee cy Ss _ %, om 4 e eon S80 8 O® ar ae oe ng oe dee nS “3 Pe, 2 & geet. @ © Sess eg : ie 506 os A a *e Py bd ra PUBLICIS GROUPE
Slide 4: Q3 2019 Highlights
Q3 2019 HIGHLIGHTS Q3 2019 organic growth of -2.7%, below our internal expectations Explained by both well-identified challenges and the impact of the Groupe’s transition Higher than expected attrition in US traditional advertising Softer performance in Media operations, in the context of hi
Slide 5: Q3 2019 Net Revenue & Net Debt
Q3 2019 NET REVENUE & NET DEBT . tae 8 ore a S08 a mele Sialesione <3 O08 e: 28 sere = ‘ a ; e pa e 20 ae PUBLICIS GROUPE
Slide 6: Net Revenue
NET REVENUE (EUR million) Q1 Q2 Q3 9M 2019 net revenue 2,118 2,234 2,577 6,929 2018 net revenue 2,082 2,198 2,197 6,477 Reported growth +1.7% +1.6% +17.3% +7.0% (1) Organic growth -1.8% +0.1% -2.7% -1.4% (1) -1.6% excluding PHS 6
Slide 7: Q3 Net Revenue by Geography
Q3 NET REVENUE (1) BY GEOGRAPHY 2019 Organic (EUR million) Q3 2019 Q3 2018 vs. 2018 growth Europe 606 614 -1.3% -3.3% North America 1,561 1,214 +28.6% -3.6% Asia Pacific 260 224 +16.1% +2.5% Latin America 75 79 -5.1% -7.2% Middle East Africa 75 66 +13.6% +9.0% Total 2,577 2,197 +17.3% -2.7% (1) Reve
Slide 8: YTD Net Revenue by Geography
YTD NET REVENUE (1) BY GEOGRAPHY 2019 Organic (EUR million) YTD 2019 YTD 2018 vs. 2018 growth Europe 1,902 1,869 +1.8% +0.0% North America 3,877 3,535 +9.7% -3.3% Asia Pacific 704 647 +8.8% +2.2% Latin America 219 237 -7.6% -7.5% Middle East Africa 227 189 +20.1% +15.5% Total 6,929 6,477 +7.0% -1.4%
Slide 9: YTD Net Revenue Organic Growth by Country
YTD NET REVENUE ORGANIC GROWTH BY COUNTRY > +10% Colombia, India, Singapore, United Arab Emirates +5% to +10% Canada, Israel, Italy, Philippines 0 to +5% China, France, Japan, United Kingdom Australia, Brazil, Germany, Indonesia, Mexico, < 0% South Africa, Spain, United States 9
Slide 10: Net Financial Debt
NET FINANCIAL DEBT (1) (EUR million) Q3 2019 Q3 2018 2018 Net Financial Debt, average 1,724 1,410 1,323 Net Financial Debt, at end of period 5,043 1,742 (288) (1) Net debt on finance lease has been reclassified in Lease Liabilities since 1st January 2018, see definition in supplemental information 1
Slide 11: Liquidity as of September 30, 2019
LIQUIDITY AS OF SEPTEMBER 30, 2019 Septembre 30, 2019 Septembre 30, 2018 (EUR million) TOTAL DRAWN AVAILABLE AVAILABLE Committed Facilities 364-day revolving credit facilities 165 - 165 165 5-year revolving credit facility (1) 469 - 469 515 5-year syndicated facility (Club Deal) (2) 2,000 - 2,000 2,
Slide 12: Outlook and Priorities
OUTLOOK AND PRIORITIES . Cry ea oF aoe comets a mele om 8 a ° 8 “Ge rad O56 ae . “ON , e om oy e 2% ag PUBLICIS GROUPE
Slide 13: Updated Outlook
UPDATED OUTLOOK 2019: Organic net revenue to decline by around -2.5% Confirmed 30 bps improvement for margin, reaching 17.3% (1), including the benefit of Epsilon’s consolidation in H2 Confirmed 5% headline EPS growth (2) 2020: Organic net revenue growth between -2% if current trends persist
Slide 14: Key Drivers Sustaining Solid Margins and Cash
KEY DRIVERS SUSTAINING SOLID MARGINS AND CASH 2 structural reasons Activity mix weighed on high value-added expertise Shared service organization Ongoing actions in a low growth context Adjustment of cost base to revenue stream Innovative offer driving superior value Simplification of
Slide 15: Strategic Outlook Making Us Confident for Future Growth
STRATEGIC OUTLOOK MAKING US CONFIDENT FOR FUTURE GROWTH A unique combination of data, creativity and technology for our clients Continued solid performance from Game Changers: +21% YTD organic growth Publicis Sapient U.S. to increase its competitive advantage in growing DBT segment A strategic s
Slide 16: Conclusion
CONCLUSION GROUPE
Slide 17: Conclusion
CONCLUSION Well-identified challenges weighing on Q3 performance Cautious approach leading to reset our expectations for the next quarters Confirmed 17.3% (1) operating margin rate (+30bps) and 5% headline EPS (2) growth in 2019 All strategic levers in place: strong focus on execution to bri
Slide 18: Supplemental Information
SUPPLEMENTAL INFORMATION . Cry ea oF aoe comets a mele om 8 a ° 8 “Ge rad O54 ae . “ON , e om oy e 2% ag PUBLICIS GROUPE
Slide 19: Net Revenue & Organic Growth Calculation
SUPPLEMENTAL INFORMATION NET REVENUE & ORGANIC GROWTH CALCULATION (EUR million) Q1 Q2 Q3 YTD Currency impact 2018 net revenue 2,082 2,198 2,197 6,477 (EUR Q1 Q2 Q3 YTD million) Currency impact (2) 93 72 65 230 GBP (2) 3 0 (2) 1 2018 net revenue at 2019 exchange 2,175 2,270 2,262 6,707 rate (a) USD (
Slide 20: Organic Growth for Strategic Game Changers
ORGANIC GROWTH FOR STRATEGIC GAME CHANGERS Net revenue from our game changers c. € 930 million excluding Epsilon YTD 2019 Organic growth of game +21% changers (vs YTD 2018) Share of game changers’ in Groupe net revenue 16% in Q3 excl. Epsilon 20
Slide 21: Q3 YTD Net Revenue by Sector
SUPPLEMENTAL INFORMATION Q3 YTD NET REVENUE BY SECTOR 2019 (1) 2018 Non Food Non Food Retail Retail consumer consumer 8% 7% products products Other 12% Other 5% 13% 6% Leisure/Energy/ Leisure/Energy Luxury /Luxury Automotive 8% Automotive 7% 13% 15% Food and Food and beverage beverage 12% 12% Financ
Slide 22: Gross Debt as of September 30, 2019
SUPPLEMENTAL INFORMATION GROSS DEBT AS OF SEPTEMBER 30, 2019 Breakdown by MATURITY Oct. 2019 – Oct. 2020 – Oct. 2021 – Oct. 2022 – Oct. 2023 – (EUR million) Total Sep. 2020 Sep. 2021 Sep. 2022 Sep. 2023 Onwards Eurobond 2021 (1) (2) 791 - - 791 - - Eurobond 2023 495 - - - - 495 Eurobond 2024 (1) (2)
Slide 23: Net Debt by Currency
SUPPLEMENTAL INFORMATION NET DEBT AS OF SEPTEMBER 30, 2019 Breakdown by CURRENCY (EUR million) Total EUR USD GBP Others Eurobond 2021 (1) (2) 791 791 Eurobond 2023 495 495 Eurobond 2024 (1) (2) 661 661 Eurobond 2025 (1) (2) 787 787 Eurobond 2028 (1) (2) 785 785 Eurobond 2031 (1) (2) 783 783 Medium t
Slide 24: Net Debt by Rate
SUPPLEMENTAL INFORMATION NET DEBT AS OF SEPTEMBER 30, 2019 Breakdown by RATE Earn-out / Fixed Floating (EUR million) Total Buy-out rate rate Eurobond 2021 (1) (2) 791 - 791 - Eurobond 2023 495 - 495 - Eurobond 2024 (1) (2) 661 - 661 - Eurobond 2025 (1) (2) 787 - 787 - Eurobond 2028 (1) (2) 785 - 785
Slide 25: 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 26: Contact
CONTACT Press Delphine Stricker Tel. + 33 1 44 43 72 83 / Email. delphine.stricker@publicisgroupe.com Investor Relations Alessandra Girolami, Vice-President Investor Relations & Strategic Financial Planning Tel. +33 1 44 43 77 88 / Email. alessandra.girolami@publicisgroupe.com Chi-Chung Lo, Investor