Slide 1: 2016 Full Year Results
2016 FULL YEAR RESULTS February 28th, 2017
Slide 2: Introductory Matters: Forward-Looking Information
INTRODUCTORY MATERS Forward-Looking Information This document contains certain forward-looking statements which speak only as of the date on which they are made. Forward-looking statements relate to projections, anticipated events or trends, future plans and strategies, and reflect Havas’ current vi
Slide 3: A look back! 2013-2016
A look back! 2013-2016
Slide 4: Our People: 10,000 people joined us in the last 3 years
Our People 10,000 people joined us in the last 3 years 20,000 * (*) Headcount end of december: 19,663
Slide 5: Havas 2013 vs 2016: people, revenue, EBIT
PEOPLE REVENUE EBIT Havas 2013! 15,800 1.7bn€ 223M€ Havas 2016! 19,663 2.3bn€ 297M€ Revenue breakdown Havas Creative 63% Europe 50% Havas Media 37% US 36% Asia 8% Latam 6%
Slide 6: 19 acquisitions over 2014 / 2015 for a total of 134M€
19 acquisitions over 2014 / 2015 for a total of 134M€ GT Media (incl. Intervalles, EGC) Successful integration of Full6, including tech network development (Ekino) VIETNAM
Slide 7: 5 new companies entered the Group in 2016
Havas 2016 Growth! ! 5 new companies ! entered the Group in 2016:! Target Media (UK) Lemz (The Netherlands) TP1 (Canada) Mr Smith (New Zealand) Beebop (Germany)
Slide 8: Creative Business
Creative ! Business!
Slide 9: Creative awards
Creative awards 720 735 900 970 2013 2014 2015 2016 GLM 2017
Slide 10: Significant Clients Development and New Business Wins
Significant Clients Development and New Business Wins
Slide 11: New Offerings
New Offerings helia.
Slide 12: Media Business
Media! Business!
Slide 13: Media Tools & Tech Partnerships
Media Tools & Tech Partnerships Value Building Platforms PROGRAMMATIC MOBILE LOCAL & OOH SOCIAL PERFORMANCE DATA CAPACITY Data & Technology Partners
Slide 14: Significant Clients Development and New Business Wins
Significant Clients Development and New Business Wins This has been the driving force of our global growth success! 2013 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Expected. Report not published yet.
Slide 15: Havas Villages
Havas Villages #47 BANGKOK JAKARTA, PRAGUE BARCELONA JOHANNESBURG THE REUNION ISLAND BEIJING KUALA LUMPUR SAN FRANCISCO BOGOTA LISBON SAO PAULO BOSTON LONDON SEOUL BRUSSELS MADRID SHANGHAI BUDAPEST MANCHESTER" SINGAPORE BUENOS AIRES MELBOURNE SYDNEY CHICAGO MEXICO TAIPEI TOKYO COPENHAGUE MILAN TORON
Slide 16: Havas Village Barcelona
Havas Village Barcelona
Slide 17: Havas Village Madrid
Havas Village Madrid
Slide 18: BETC Pantin
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Slide 19: Havas Village Costa Rica
Havas Village Costa Rica
Slide 20: Havas Village Amsterdam
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Slide 21: Financials
Financials!
Slide 22: Sustained organic growth trend in 2016
Sustained organic growth trend in 2016 Revenue in €m Revenue 2016 2,188 2,276 +4.0% 1,792 1,772 1,865 +3.1% Organic Growth 2012 2013 2014 2015 2016 22
Slide 23: A balanced 2016 revenue portfolio
A balanced 2016 revenue portfolio LATAM Transport & leisure APAC & France Other Africa 6% 20% 12% 8% 37% 19% Services Healthcare Media Group 4% 16% UK 12% Cosmetics & 63% fashion Creative Group 35% 4% Finance 20% Retail 11% 5% Auto North 8% TMT America Rest of 11% Europe Food & drinks 9% By division
Slide 24: European organic trends outperformed in 2016
European organic trends outperformed in 2016 +2.1% +5.1% NA EUROPE -1.8% APAC -2.6% LATAM 24
Slide 25: Significant Q4 recovery in the US
Significant Q4 recovery in the US Q1 16 Q2 16 Q3 16 Q4 16 +1.2% +0.3% -1.2% +7.3% North America +4.1% +3.4% +7.7% +5.4% Europe -7.1% -8.7% Asia Pacific +4.3% +8.9% Latam +11.4% +2.6% -6.3% -12.8% 25 TOTAL +3.4% +2.7% +2.0% +4.2%
Slide 26: Acquisitions compensated by negative forex effects
Acquisitions compensated by negative forex effects P&L Exchange rate effect Perimeter effect 2016 vs 2015 2016 vs 2015 Revenue Revenue impact impact - €60m + €80m 26
Slide 27: Improvement in all performance indicators
Improvement in all performance indicators Variance €m 2015 2016 2016/2015 P&L Revenue 2,188 2,276 +4.0% Compensation (1,339) (1,419) Other expenses and income from operations (534) (528) Income from operations 315 329 +4.5% Restructuring charges (cash items) (14) (4) EO & provisions (non-cash items)
Slide 28: Income from operations margin reached 14.5%
Income from operations margin reached 14.5% 2015 2016 Variance P&L Organic growth +3.1% Income from operations margin 14.4% 14.5% +10bps EBIT margin 13.4% 13.1% -30bps EPS as reported, in euro 0.41 0.42 +2.4% 28
Slide 29: Operating margin: 14.5%
Operating margin: 14.5% P&L 14.1% 14.4% 14.5% 13.8% 13.6% 13.4% 13.1% 12.5% 12.0% 11.0% 9.5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 29
Slide 30: Improvement of operating expenses ratio
Improvement of operating expenses ratio €m 2015 2016 Variance P&L Revenue 2,188 2,276 +4.0% Opex -534 -528 -1.1% Of which depreciation & amortisation -46 -47 +2.2% Of which real estate leases -84 -92 +9.5% Opex ratio 24.4% 23.2% -120 bps New biz and Telecommunications well under control, remaining p
Slide 31: Cost reduction plan – to be continued
Cost reduction plan – to be continued P&L • Further optimisation potential on travel costs (online booking) • Ongoing management of IT / telecom costs • Confirmed selectivity on entertainment & new business costs 31
Slide 32: Details about other operating expenses
Details about other operating expenses P&L • High level in 2016 = €31.6m (vs €22m in 2015) • €3.2m linked to London Village, other cash items were limited • €4.9m earn-out update (non-cash item) • €23m provisions in the US & Mexico (non-cash item) 32
Slide 33: Compensation ratio reflects investment in talent
Compensation ratio reflects investment in talent €m 2015 2016 Variance P&L Revenue 2,188 2,276 +4.0% Compensation 1,339 1,419 +6.0% Of which bonuses 105 86 -18.1% Compensation ratio 61.2% 62.3% +110 bps Headcount at end of December 18,592 19,663 +5.8% 33
Slide 34: Corporate taxes & financial costs
Corporate taxes & financial costs P&L €m 2015 2016 Variance Financial charges 16 20 +25% Full year cost of Dec 2015 Bond issue = €8m Income tax 86 83 -3.5% Effective tax rate 31.0% 30.0% -100 bps Lower share of Profit before tax in the US 34
Slide 35: Resilient cash-flow generation
Resilient cash-flow generation €m +256 Cash Flow Capex 149 Dividend Financial investments Net Other / Net financial Cash Cash +14 +7 December December -2 2015 2016 Change Equity in WCR -58 increase -77 88 Cash flow -79 35
Slide 36: Ongoing reduction in net debt despite Villages and acquisitions
Ongoing reduction in net debt despite Villages and acquisitions 165 90 Headquarter Share repurchase acquisition in offer in 2012: 2011: €159m €269m 2010 2011 2012 2013 2014 2015 2016 -47 -43 -88 -159 -149 End of period net debt in €m 36
Slide 37: Slight reduction of average net debt in 2016
Slight reduction of average net debt in 2016 Average net debt in €m Share repurchase offer in 2012: €269m 258 221 179 Acceleration of external growth in Headquarter 2015: €82m invested acquisition in 2011: €159m 54 29 34 9 2010 2011 2012 2013 2014 2015 2016 37
Slide 38: Consolidated Balance sheet
Consolidated Balance sheet €m Assets 12/31/15* 12/31/16 Liabilities 12/31/15* 12/31/16 Intangible and 2,291 2,347 Consolidated tangible assets equity 1,653 1,767 Provisions 169 165 Net deferred taxes 88 82 Net financial debt (88) (149) WCR (461) (468) Earn-out / Buy-out 178 184 Total 1,918 1,961 Tot
Slide 39: Sound financial ratios
Sound financial ratios €m 2015 2016 Variance Net debt at the end December -88 -149 -61 Average net debt 54 34 -20 EBITDA 367 385 +18 Equity 1,653 1,767 +114 Financial costs -16 -20 -4 Covenants Gearing 2016 (end of period) -5% -8% Gearing 2016 (average net debt) 3% 2% Leverage: ND end of period / EB
Slide 40: Enhanced liquidity at the end of 2016
Enhanced liquidity at the end of 2016 €m Undrawn mid-term committed credit lines 510 Undrawn 365-day committed credit lines 77 Cash and cash equivalents 810 Total of potential liquidity 1,397 Available uncommitted credit lines 241 Available commercial paper program 300 Total financing resources 1,93
Slide 41: Steady increase of the dividend payment
Steady increase of the dividend payment 2016 Dividend 0.18€ to be paid in cash or equity Pay-out ratio +64% 0.18 0.15 +20% 0.13 2015 2016 0.11 36.5% 42.7% 2013 2014 2015 2016 41 AGM on May 10th. Ex-dividend date: May 17th. Payment date: June 13th.
Slide 42: Conclusion
CONCLUSION 1. New Business signed by Media & expected from Creative in the US should boost the Havas top line in 2017 2. Mid Term Operating Margin target 15% unchanged 3. Acceleration of the integration journey in 2017 4. Dividend up to 18 cts 42