Publicis Groupe Sa · EURONEXT:PUB
Publicis Groupe Sa — FY2021 Earnings Presentation
54 slides from Publicis Groupe Sa's earnings presentation, Feb 3, 2022
Slide 1: FY 2021 Results
FY 2021 RESULTS 3 February 2022 PUBLICIS:
Slide 2: FY 2021 Highlights
FY 2021 HIGHLIGHTS FY 2021 RESULTS STRATEGIC UPDATE Q&A PUBLICIS:
Slide 3: 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 4: Record Year
RECORD YEAR 2021 results ahead of expectations and exceeding 2019 levels Organic growth Operating margin Free Cash Flow(1) rate +10.0% 17.5% +3% vs. 2019 +20 bps vs. 2019 + Emerging as a stronger company (1) Free Cash Flow before change in Working Capital 4
Slide 5: Strong organic growth in Q4 and FY vs. 2020
ST R O N G O R G A N I C G R OW T H I N Q 4 A N D F Y 2 02 1 VS . 2 02 0 Record numbers for the Groupe, Capturing structural shifts towards Strong growth across regions in context of cyclical recovery 1P data, digital media & commerce U.S. Q4 +8.7% +9.3% FY +9.8% Q4 2021 FY +12.8% Q4 +8.7%(1) Europe
Slide 6: Organic growth vs. 2019
E XC E E D I N G 2 0 1 9 L E V E L S FA S T E R A N D S T R O N G E R T H A N E X P E C T E D ORGANIC GROWTH VS. 2019 +5% +5% Groupe Q4 Groupe H2 vs. H1 +1% +3% +8% Groupe FY U.S. FY 6
Slide 7: #1 in new business in 2021
#1 IN NEW BUSINESS IN 2021 Major global and local wins in 2021 Ranked #1 in 2021 league tables(1) Media U.S. Media Global Media Global Media Global Creative Global Creative, media, data U.S. Media China Media U.K. Media Italy, UK, China Media & Creative Australia Commerce & Digital Australia Creativ
Slide 8: Continued investment to strengthen our model
CONTINUED INVESTMENT TO STRENGTHEN OUR MODEL TARGETED ACQUISITIONS PARTNERSHIPS & JOINT-VENTURES • 2021: c. • 2022: accelerating with -600M M&A envelope to further expand data and tech capabilities 8
Slide 9: An operating model delivering industry-leading financial ratios in 2021
A N O P E R AT I N G M O D E L D E L I V E R I N G I N D U S T R Y- L E A D I N G F I N A N C I A L R AT I O S I N 2 0 2 1 Operating Free Cash Agile structures allowing swift adaptation: margin rate Flow(1) • leading to lean cost base 17.5% • Investment to support growth • Over +9,000 net recruits i
Slide 10: A better and more responsible company
A BETTER A N D M O R E R E S P O N S I B L E C O M PA N Y Diversity, Equality Responsible Fight against & Inclusion marketing climate change Ranked # 1 in our industry on ESG by 8 leading agencies 10
Slide 11: The outstanding commitment of our people
T H E O U T S TA N D I N G C O M M I T M E N T O F O U R P E O P L E THANKING AND ➔Bonus pool doubled vs. 2019 REWARDING OUR PEOPLE ➔A bonus for everyone with the for their Groupe for the past 2 years; resilience, 35 000 employees with no dedication and variable remuneration to receive determination
Slide 12: FY 2021 Results
FY 2021 HIGHLIGHTS FY 2021RESULTS STRATEGIC UPDATE Q&A PUBLICIS:
Slide 13: Net revenue growth accelerating in second half
NET REVENUE G R O W T H V S . 2 0 1 9 A C C E L E R AT I N G I N S E C O N D H A L F (EUR million) Q1 Q2 Q3 Q4 FY 2021 net revenue 2,392 2,539 2,621 2,935 10,487 2020 net revenue 2,481 2,293 2,343 2,595 9,712 Reported growth -3.6% +10.7% +11.9% +13.1% +8.0% Organic growth vs. 2020 +2.8% +17.1% +11.2
Slide 14: Q4 2021 net revenue by geography
Q4 2021 NET REVENUE BY GEOGRAPHY Organic Organic 2021 growth growth (EUR million) Q4 2021 Q4 2020 vs. 2020 vs. 2020 vs. 2019(1) North America 1,734 1,530 +13.3% +8.7% +9% Europe 720 643 +12.0% +8.7% -1% Asia Pacific 302 268 +12.7% +9.2% flat Middle East Africa 94 78 +20.5% +15.3% +1% Latin America 8
Slide 15: Q4 2021 performance North America
Q4 2021 PERFORMANCE NORTH AMERICA Organic Organic 2021 growth growth (EUR million) Q4 2021 Q4 2020 vs. 2020 vs. 2020 vs. 2019(1) North America 1,734 1,530 +13.3% +8.7% +9% U.S. • 57% of Groupe net revenue • Organic growth: +8.7% • Organic growth vs. 2019: +9% • Media: good performance in both tradit
Slide 16: Q4 2021 performance Europe
Q4 2021 PERFORMANCE - EUROPE Organic Organic 2021 growth growth (EUR million) Q4 2021 Q4 2020 vs. 2020 vs. 2020 vs. 2019(1) Europe 720 643 +12.0% +8.7% -1% U.K. France Germany Central & Eastern Europe • 8% of Groupe net revenue • 7% of Groupe net revenue • 3% of Groupe net revenue • 2% of Groupe net
Slide 17: Q4 2021 performance Rest of World
Q4 2021 PERFORMANCE R E ST O F WO R L D Organic Organic 2021 growth growth (EUR million) Q4 2021 Q4 2020 vs. 2020 vs. 2020 vs. 2019(1) Asia Pacific 302 268 +12.7% +9.2% flat Middle East Africa 94 78 +20.5% +15.3% +1% Latin America 85 76 +11.8% +22.6% +9% Asia Pacific Middle East Africa Latin America
Slide 18: FY 2021 net revenue by geography
FY 2021 NET REVENUE BY GEOGRAPHY Organic Organic 2021 growth growth (EUR million) FY 2021 FY 2020 vs. 2020 vs. 2020 vs. 2019(1) North America 6,368 5,997 +6.2% +9.7% +7% Europe 2,534 2,278 +11.2% +9.6%(2) -4%(2) Asia Pacific 1,038 932 +11.4% +10.3% +3% Middle East Africa 304 275 +10.5% +11.9% -1% La
Slide 19: FY 2021 performance by industry
FY 2021 PERFORMANCE BY INDUSTRY Net revenue split Net revenue growth per client industry(2) Energy Leisure & Public & manuf. travel sector & +9% Other +11% Automotive +8% +11% 9%(1) Retail +12% Non-food Financial consumer +5% products +11% 91% Food & beverage TMT +8% +13% 3,574 main clients Healthca
Slide 20: Consolidated income statement
C O N S O L I D AT E D I N C O M E S TAT E M E N T (EUR million) FY 2021 FY 2020 Revenue 11,738 10,788 Net revenue 10,487 9,712 EBITDA(1) 2,317 2,158 Operating margin 1,840 1,558 Non-current income and expenses - 1 Net financial expenses (160) (189) Income taxes (407) (340) Associates - (1) Minority
Slide 21: P&L condensed and operating margin
P & L C O N D E N S E D & O P E R AT I N G M A R G I N FY 2021 as a % of FY 2020 as a % of (EUR million) Net revenue comparable(1) Net revenue Net revenue 10,487 9,539 Personnel costs (6,586) 62.8% (5,976) 62.6% Restructuring costs (53) 0.5% (174) 1.8% Cost of sales (504) 4.8% (354) 3.7% Other opera
Slide 22: FY change in operating margin
F Y 2 0 2 1 - C H A N G E I N O P E R AT I N G M A R G I N AS A % OF NET REVENUE 20bps increase in personnel costs Net impact of +60bps(2) +160bps -110bps +170bps -10bps 17.5% +130bps -110bps -70bps 15.9%(1) FY 2020 Fixed People Freelance Restructuring Cost of sales Depreciation Other FY 2021 compar
Slide 23: Net financial income (expense)
NET FINANCIAL INCOME (EXPENSE) (EUR million) FY 2021 FY 2020 FY 2019 Interest on net financial debt (85) (103) (25) Interest on lease liabilities (70) (77) (70) Foreign exchange gain (loss) 2 (2) (1) Other financial expenses(1) (7) (7) (10) Headline Net financial expenses(2)(3) (160) (189) (106) (1)
Slide 24: Income tax and effective tax rate
I N C O M E TA X A N D E F F E C T I V E TA X R AT E (EUR million) FY 2021 FY 2020 FY 2019 Reported income taxes 307 196 305 Reversal in income tax on amortization of intangibles arising from acquisitions 65 85 51 Reversal in income tax on impairment and real estate consolidation 31 56 46 Reversal i
Slide 25: Headline earnings per share, diluted
H E A D L I N E E A R N I N G S P E R S H A R E , D I LU T E D (1) +17.6% FY 2019 FY 2020 FY 2021 (1) See definition in Supplemental Information 25
Slide 26: Free cash flow
F R E E C AS H F LOW (EUR million) FY 2021 FY 2020 FY 2019 EBITDA(1) 2,317 2,158 2,245 Repayment of lease liabilities and related interests (365) (461) (480) Capex, net of disposals(1) (136) (155) (225) Interests paid and received (80) (113) 11 Tax paid (362) (293) (349) Other items 53 54 51 Free Ca
Slide 27: Use of cash
USE OF CASH (EUR million) FY 2021 FY 2020 FY 2019 Free Cash Flow before change in WCR(1) 1,427 1,190 1,253 Change in WCR (216) 1,047 394 Acquisitions (net of disposals)(2) (283) (164) (4,075) Dividends paid (236) (112) (297) Share buy-back, net of sales (137) 8 2 Exercise of warrants 10 - 5 Non-cash
Slide 28: Net financial debt
NET FINANCIAL DEBT (EUR million) FY 2021 FY 2020 FY 2019 Net Financial Debt, average 1,530 3,286 2,375 Net Financial Debt, at end of period 76 833 2,713 (Average net financial debt + Average Lease liability) / EBITDA 1.6x 2.6x 2.6x 28
Slide 29: Dividend
DIVIDEND Groupe decision to reduce dividend due to Covid-19 pandemic (2) Dividend 45.8% 22.9% 46.8% 47.8% pay-out(1) 2019 2020 2021 Dividend to be fully paid in cash Decision to remove scrip option to stabilize share count (1) See definition in Supplemental Information 29
Slide 30: 2022 cash allocation
2 0 2 2 C A S H A L L O C AT I O N Dividend payout Dividend 45-50% c. vs. c.45% previously fully in cash vs. c.50% in cash previously M&A Deleveraging -600M -400M vs. -300M in 2021 average net debt c. -2022 30
Slide 31: Strategic Update
FY 2021 HIGHLIGHTS FY 2021 RESULTS STRATEGIC UPDATE Q&A PUBLICIS:
Slide 32: 3 priorities for 2022
3 PRIORITIES FOR 2022 AS W E E M E R G E ST R O N G E R F R O M L AST T WO Y E A R S Leverage Give our people Deliver our unique assets more opportunity profitable & in data and technology to progress responsible growth 32
Slide 33: Leverage our unique assets in data and country model
1 L E V E R A G E O U R U N I Q U E A S S E T S I N D ATA & COUNTRY MODEL Creative Media Digital Experience OMNICHANNEL CREATIVE EXPERIENCES Identity & 1P Data Management D i g i t a l B u s i n e ss Tra n s fo r m a t i o n GLOBAL CAPABILITIES 33
Slide 34: Our clients are facing 3 marketing revolutions
1 O U R C L I E N T S A R E FA C I N G 1 - IDENTITY 2 - NEW DIGITAL MEDIA 3 - DIRECT-TO-CONSUMER Advanced TV 18K engineers & developers to build platforms and digital ecosystems and address the shift from paid to owned Transaction-based data & identity solutions Successfully launched in channels to
Slide 35: With a unique scaled and integrated model
1 … W I T H A U N I Q U E S C A L E D & I N T E G R AT E D M O D E L To address and lead the 3 marketing revolutions: 1 - IDENTITY 2 - NEW DIGITAL MEDIA 3 - DIRECT-TO-CONSUMER 35
Slide 36: #1 in new business 3x in the last 4 years
1 #1 in new business 3X in the last 4 years(1) Cumulative net reported wins, 2018-2021 estimated billings $bn(1) 7.7 3.8 3.2 Peer 3 Peer 4 Peer 1 Peer 2 -2.0 -3.2 (1) Source: JP Morgan Research 36
Slide 37: Give our people more opportunity to progress
2 GIVE OUR PEOPLE MORE OPPORTUNITY TO PROGRESS A PERSONALIZED GROWTH UNIQUE PROFESSIONAL P L AT F O R M EXPERIENCES • 90% adoption rate • Initiatives to reinvent the Future of Work, • Learning hub, with 30,000 classes available to attract and retain talent • 13 courses on average taken by each • Wor
Slide 38: Deliver profitable and responsible growth
3 D E L I V E R P R O F I TA B L E A N D R E S P O N S I B L E G R O W T H P R O F I TA B L E G R O W T H RESPONSIBLE GROWTH Fight against Global Responsible Country DE&I climate Delivery marketing Model change Centers 1st holding with Once and For All Groupe coalition; 2030 climate Global objective
Slide 39: 2022 Outlook
2 02 2 O U T LO O K Organic growth Operating margin Free Cash Flow(1) rate between 4% and 5% c. 17.5% c. (1) Free Cash Flow before change in Working Capital 39
Slide 40: Conclusion
CONCLUSION EMERGING FROM THE CRISIS STRONGER, financially and commercially Committed to: • Accelerate on organic growth vs. last 2-year growth ENTERING 2022 WITH • Continue to deliver industry- CONFIDENCE leading financials thanks to our robust foundations 40
Slide 41: Q&A
FY 2021 HIGHLIGHTS FY 2021 RESULTS STRATEGIC UPDATE Q&A PUBLICIS:
Slide 42: Appendix
APPENDIX PUBLICIS:
Slide 43: Net revenue and organic growth calculation
N E T R E V E N U E & O R G A N I C G R O W T H C A L C U L AT I O N (EUR million) Q1 Q2 Q3 Q4 FY 2021 Currency impact 2020 net revenue 2,481 2,293 2,343 2,595 9,712 (EUR million) Q1 Q2 Q3 Q4 FY Currency impact(2) (151) (125) 4 81 (191) GBP(2) (2) 6 11 14 29 2020 net revenue at 2021 exchange rate 2,
Slide 44: Condensed consolidated income statement
C O N D E N S E D C O N S O L I D AT E D I N C O M E S TAT E M E N T (EUR million) FY 2021 FY 2020 Net revenue 10,487 9,712 Pass-through revenue 1,251 1,076 Revenue 11,738 10,788 EBITDA 2,317 2,158 Depreciation (477) (600) Operating margin 1,840 1,558 Amortization of intangibles arising from acquisi
Slide 45: Bridge from reported to condensed comparable income statement
BRIDGE FROM REPORTED T O C O N D E N S E D C O M PA R A B L E I N C O M E S TAT E M E N T FY 2021 FY 2020 P&L P&L Pass-through P&L P&L Pass-through FX/Perimeter condensed (EUR million) reported impact condensed reported impact Impact comparable Net revenue 10,487 10,487 9,712 (173) 9,539 Pass-throug
Slide 46: FY 2021 bridge from condensed consolidated to headline income statement
4 6 F Y 2 0 2 1 B R I D G E F R O M C O N D E N S E D C O N S O L I D AT E D T O H E A D L I N E I N C O M E S TAT E M E N T Amortization Impairment / Change in of intangibles Real estate fair value Main FY 2021 arising from consolidation of financial Capital Earn-out FY 2021 (EUR million) P&L acqui
Slide 47: FY 2020 bridge from condensed consolidated to headline income statement
4 7 F Y 2 0 2 0 B R I D G E F R O M C O N D E N S E D C O N S O L I D AT E D T O H E A D L I N E I N C O M E S TAT E M E N T Amortization Impairment / Change in Anticipated of intangibles Real estate fair value Main unwinding of FY 2020 arising from consolidation of financial Capital cross currency
Slide 48: Balance sheet
BALANCE SHEET (EUR million) Dec. 31, 2021 Dec. 31, 2020 Goodwill and intangibles 13,139 12,367 Net right of use 1,489 1,645 Other fixed assets 916 882 Current and deferred tax (330) (326) Working capital (3,677) (3,731) TOTAL 11,537 10,837 Group equity 8,588 7,182 Minority interests (33) (22) TOTAL
Slide 49: Gross debt as of December 31, 2021
GROSS DEBT AS OF DECEMBER 31, 2021 Breakdown by maturity 2026 (EUR million) Total 2022 2023 2024 2025 Onwards Eurobond 2023 498 498 Eurobond 2024 601 601 Eurobond 2025(1)(2) 769 769 Eurobond 2028(1)(2) 778 778 Eurobond 2031(1)(2) 786 786 Earn out / Buy out 222 116 70 25 8 3 Other debt(1) 81 76 5 Tot
Slide 50: Net debt as of December 31, 2021 by currency
NET DEBT AS OF DECEMBER 31, 2021 Breakdown by currency (EUR million) Total EUR USD GBP Others Eurobond 2023 498 498 Eurobond 2024 601 601 Eurobond 2025(1)(2) 769 769 Eurobond 2028(1)(2) 778 778 Eurobond 2031(1)(2) 786 786 Earn-out / Buy-out 222 15 103 13 91 Other debt(1) 81 11 54 5 11 Cash & marketa
Slide 51: Net debt as of December 31, 2021 by rate
NET DEBT AS OF DECEMBER 31, 2021 Breakdown by rate (EUR million) Total Earn-out / Buy-out Fixed rate Floating rate Eurobond 2023 498 498 Eurobond 2024 601 601 Eurobond 2025(1)(2) 769 769 Eurobond 2028(1)(2) 778 778 Eurobond 2031(1)(2) 786 786 Other debt(1) 81 81 Total gross debt ex. earn-out/buy-out
Slide 52: Liquidity as of December 31, 2021
LIQUIDITY AS OF DECEMBER 31, 2021 Dec. 31, 2021 Dec. 31, 2020 (EUR million) Total Drawn Available Available 364-day revolving credit facilities - - - 165 5-year revolving credit facility(1) 244 - 244 441 5-year syndicated facility (Club Deal)(2) 2,000 - 2,000 2,000 Total Committed Facilities 2,244 -
Slide 53: 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 54: Contact
C O N TA C T 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 1 44 43 77 88 / Email. alessandra.girolami@publ