Outperforming in Q2 with +7.1% organic
growth
-
Upgrade of FY 2023 guidance on all
KPIs
July 20, 2023
-
Q2 organic growth at +7.1% thanks to revenue mix and New
Business tailwind
-
Continued sustained performance across regions: U.S. +5%,
Europe +15%, China +7%
-
Operating margin rate maintained at historically high level
of 17.3% in H1
-
Headline diluted EPS up +11% at €3.21, Free Cash Flow
slightly up at €725m despite FY’22 R&D tax
payment
-
Upgrade of 2023 guidance despite persistent macro
uncertainties: organic growth now expected at circa +5%, operating
margin rate close to 18%, Free Cash Flow at least
€1.6bn
Q2 2023
H1 2023 Results
|
H1 2023 |
2023 vs 2022 |
|
7,105 |
+8.5% |
|
6,318 |
+7.6% |
|
+7.1% |
|
|
1,093 |
+7.4% |
|
17.3% |
|
- Headline Groupe net income
|
813 |
+11.8% |
- Headline diluted EPS (euro)
|
3.21 |
+11.3% |
|
725 |
+2.4% |
- Free Cash Flow1,2 excluding
2022-related TCJA
|
835 |
+17.9% |
Arthur Sadoun, Chairman and CEO of Publicis
Groupe:
“The first half of the year has been strong for
Publicis.
In Q2, we continue to outperform the
market on organic growth thanks to our unique revenue mix and
new business track record with +7.1%, ahead of expectations
after double-digit growth in 2022.
We delivered the best financial KPIs in the
industry in H1 thanks to our platform organization,
with operating margin at 17.3%, in line with the
historically high level of 2022.
As we shifted from a communication to a
transformation partner for our clients, we are confirming that
we have become a stronger company since 2019 with
our net revenue up +45% on a reported basis and our operating
margin up +68% over this period.
With our investments in Epsilon, powering
Creative and Media through personalization at scale, Sapient and
Marcel, we are uniquely positioned to lead the future of our
industry. It will inevitably be shaped by data, tech and AI that
are already at the heart of our business model both in how we work
for our clients and in the way we operate. But Publicis
is not only future-proof. It is also more resilient to
business cycles, allowing us to upgrade our guidance on all
KPIs for the year despite persistent macroeconomic
uncertainty. We now expect to deliver organic growth at
circa +5% for 2023, above our 3Y CAGR of +4%,
with operating margin rate close to 18%.
I would like to sincerely thank our clients for
their continued trust and all our talent for their dedication
throughout the last months.”
* *
*
Publicis Groupe’s Supervisory Board met on July
19th, 2023, under the
chairmanship of Maurice Lévy, to examine the 2023 first semester
accounts presented by Arthur Sadoun, CEO and Chairman of the
Management Board.
KEY FIGURES
EUR million, except per-share data and
percentages |
H1 2023 |
H1 2022 |
2023 vs 2022 |
Data from the Income Statement and Cash flow
Statement |
|
|
|
Net revenue |
6,318 |
5,873 |
+7.6% |
Pass-through revenue |
787 |
674 |
+16.8% |
Revenue |
7,105 |
6,547 |
+8.5% |
EBITDA |
1,335 |
1,287 |
+3.7% |
% of Net revenue |
21.1% |
21.9% |
-80bps |
Operating margin |
1,093 |
1,018 |
+7.4% |
% of Net revenue |
17.3% |
17.3% |
- |
Operating income |
843 |
761 |
+10.8% |
Net income attributable to the Groupe |
623 |
537 |
+16.0% |
Earnings Per Share (EPS) |
2.48 |
2.15 |
+15.3% |
Headline diluted EPS3 |
3.21 |
2.88 |
+11.3% |
Free Cash Flow before change in working capital requirements |
725 |
708 |
+2.4% |
Data from the Balance Sheet |
June 30, 2023 |
Dec 31, 2022 |
|
Total assets |
33,700 |
35,898 |
|
Groupe share of Shareholders’ equity |
9,188 |
9,635 |
|
Net debt (net cash) |
226 |
(634) |
|
NET REVENUE IN Q2 2023
Publicis Groupe’s net revenue in Q2 2023 was
3,239 million euros, up +5.4% from 3,073 million euros in 2022.
Exchange rates had a negative impact of 73 million euros.
Acquisitions, net of disposals, accounted for an increase in net
revenue of 26 million euros. Organic growth reached +7.1%.
Breakdown of Q2 2023 Net revenue by
region
EUR |
Net revenue |
Reported |
Organic |
million |
Q2 2023 |
Q2 2022 |
Growth |
Growth |
North America |
1,955 |
1,912 |
+2.2% |
+4.9% |
Europe |
809 |
709 |
+14.1% |
+15.2% |
Asia Pacific |
300 |
289 |
+3.8% |
+2.6% |
Middle East & Africa |
91 |
90 |
+1.1% |
+6.5% |
Latin
America |
84 |
73 |
+15.1% |
+5.9% |
Total |
3,239 |
3,073 |
+5.4% |
+7.1% |
North America net revenue was
up +2.2% on a reported basis in Q2 2023, including a negative
impact of the US dollar to Euro exchange rate. Organic growth in
the region was +4.9%, of which +5.0% in the U.S..
Publicis Sapient grew at a very solid +5.1% organically despite
high comparables of 17%, in a context of slower decision making
process for DBT projects. Epsilon grew +6.9% organically, notably
driven by outperforming Digital Media. Canada was
up +2.2% organically.
Net revenue in Europe was up by
+14.1% on a reported basis. It was up by +15.2% on an organic
basis, or +11.6% excluding the contribution of our Outdoor Media
activities & the Drugstore. Organic growth in the
U.K. was +17.0%, with a notable double-digit growth in
Media and at Publicis Sapient. Organic growth in
France was +5.0%4 with double-digit growth in
Media and at Publicis Sapient. Germany was up
+9.5% organically with double-digit growth in Media and very solid
Publicis Sapient. Central & Eastern Europe
grew +17.1% organically thanks to double-digit growth in
Poland, Hungary and Czech
Republic and the resumption of activity in
Ukraine.
Net revenue in Asia Pacific was
+3.8% on a reported basis, and +2.6% organically.
China accelerated to +7.0% organic growth after
+3.7% in Q1. Thailand sequentially improved while
remaining in negative territory due to the phasing of a large
project, while Singapore, Vietnam and
Japan posted double digit growth.
Australia and New Zealand were
stable.
In Middle East & Africa,
net revenue was up +1.1% on a reported basis, and +6.5% organically
on top of a high comparable basis of +15.3% in Q2 2022.
Net revenue in Latin America
was up +5.9% organically driven by strong Media like in Q1. The
region posted +15.1% on a reported basis notably benefitting from
the acquisition of Practia.
NET REVENUE IN H1 2023
Publicis Groupe’s net revenue for the first half
2023 was 6,318 million euros, up by +7.6% compared to 5,873 million
euros in H1 2022. Exchange rate variations over the period had a
low negative impact of 12 million euros. Acquisitions (net of
disposals) have a positive impact of 40 million euros on net
revenue. Organic growth was +7.1% in H1 2023.
Breakdown of H1 2023 net revenue by
sector
On the basis of 3,298 clients representing 91% of
Groupe net revenue
Breakdown of H1 2023 net revenue by
region
EUR |
Net revenue |
Reported |
Organic |
million |
H1 2023 |
H1 2022 |
growth |
growth |
North America |
3,893 |
3,660 |
+6.4% |
+5.3% |
Europe |
1,552 |
1,371 |
+13.2% |
+13.8% |
Asia Pacific |
550 |
550 |
0.0% |
+1.7% |
Middle East & Africa |
179 |
165 |
+8.5% |
+11.2% |
Latin
America |
144 |
127 |
+13.4% |
+6.7% |
Total |
6,318 |
5,873 |
+7.6% |
+7.1% |
Net revenue in North America
was up by +5.3% on an organic basis in the first half (+6.4% on a
reported basis). The U.S. performed strongly at
+5.4% organically reflecting the strength of our model.
Europe posted +13.8% organic
growth in H1 (+13.2% on a reported basis). Excluding the impact of
the Groupe’s Outdoor Media activities and the Drugstore in France,
the organic growth in Europe is +12.1%. The U.K.
was at +20.3% organic, France at +4.0%5,
Germany at +9.9% and Central & Eastern
Europe at +14.0%.
Asia Pacific net revenue was up
by +1.7% on an organic basis (flat on a reported basis).
China reported an organic growth of +5.6%, and
Australia & New Zealand were
up by +2.4% on an organic basis.
Net revenue in the Middle East and
Africa region was up by +11.2% on an organic basis (+8.5%
reported) and up by +6.7% in Latin America (+13.4%
reported).
ANALYSIS OF H1 2023 KEY FIGURES
Income Statement
EBITDA amounted to 1,335
million euros in H1 2023, compared to 1,287 million euros in H1
2022, up by +3.7%. This represents 21.1% of net revenue.
Personnel costs totaled 4,200
million euros in H1 2023 from 3,888 million euros in H1 2022, an
increase of +8.0% close to the growth in net revenue. As a
percentage of net revenue, personnel expenses were 66.5% in H1
2023, versus 66.2% in H1 2022. Fixed personnel costs were 3,725
million euros and represented 59.0% of net revenue versus 57.5% in
H1 2022. As expected the cost of freelancers decreased by 68
million euros in H1 2023 or 140 basis points, representing 165
million euros. Restructuring costs were 45 million euros, up versus
30 million euros in H1 2022.
Non personel costs amounted to
1,025 million euros in H1 2023, compared to 967 million euros in H1
2022. This represented 16.2% of net revenue in H1 2023 versus 16.5%
of net revenue in H1 2022. They comprised:
- Other operating
expenses (excluding pass-through costs, depreciation &
amortization) amounted to 783 million euros, compared to 698
million euros in H1 2022. This represents 12.4% of net revenue
compared to 11.9% in H1 2022.
- Depreciation and
amortization charge was 242 million euros in H1 2023
compared to 269 million euros in H1 2022, a reduction of 10.0%, or
27 million euros. It reflects the consolidation of our real estate
footprint as well as an increase in the share of SaaS platforms
used by the Groupe and directly expensed.
As a result, the operating
margin amounted to 1,093 million euros, up by +7.4%
compared to H1 2022. This represents an operating margin rate of
17.3% in H1 2023, in line with H1 2022.
Operating margin rates by
geographies were 18.6% in North America, 16.3% in Europe, 17.3% in
Asia-Pacific, 10.1% in Middle East/Africa and 2.8% in Latin
America.
Amortization of intangibles arising from
acquisitions totaled 142 million euros in H1 2023, up by 5
million euros versus H1 2022. Impairment losses on real
estate consolidation charge amounted to 112 million euros
compared to 44 millions in H1 2022 in a context of real estate
footprint optimization.
In addition, non-current
expense was an income of 4 million euros compared to a
cost of 76 million euros in H1 2022 which included a loss related
to the Groupe’s exit from Russia.
Operating income totaled 843
million euros in H1 2023, after 761 million euros in H1 2022.
The financial result,
comprising the cost of net financial debt and other financial
charges and income, is a charge of 14 million euros in H1 2023
compared to a charge of 40 million euros last year.
- The cost of net financial
debt was an income of 42 million euros in H1 2023,
compared to a cost of 27 million euros in H1 2022. It included 59
million euros of financial expenses (56 million euros in H1 2022)
and financial income of 101 million euros, improving from 29
million euros last year largely thanks to higher remuneration on
cash balances.
- Other financial income and
expenses were a charge of 56 million euros in H1 2023,
notably composed by 39 million euros interest on lease liabilities
and 8 million euros cost from the fair value remeasurement of
Mutual Funds. In H1 2022, other financial income and expenses were
a charge of 13 million euros, notably composed by 45 million euros
interest on lease liabilities and 34 million in income from the
fair value remeasurement of Mutual Funds
The revaluation of earn-out
payments amounted to an income of 1 million euros in H1
2023, compared to a charge of 4 million euros in H1 2022.
The income tax
charge was 205 million euros in H1 2023, corresponding to
a forecasted effective tax rate of 24.8% in 2023, compared to 189
million euros in H1 2022 corresponding to an effective tax rate of
23.4%.
The share of profit of
associates is a 3 million euros income in H1 2023 (5
million euros income in H1 2022).
Minority interests were a gain
of 5 million euros in H1 2023 compared to a loss of 4 million euros
in Groupe results in H1 2022.
Overall, net income attributable to the
Groupe was 623 million euros in H1 2023, compared to 537
million euros in H1 2022.
Finally the Earning Per Share
was 2.48 euros in H1 2023, compared to 2.15 euros in H1 2022, up by
+15.3%.
Free Cash Flow
EUR million |
H1 2023 |
H1 2022 |
EBITDA |
1,335 |
1,287 |
Repayment of lease liabilities and related interests |
(207) |
(215) |
Investments in fixed assets (net) |
(75) |
(82) |
Financial interest paid (net) |
17 |
(63) |
Tax paid |
(386) |
(251) |
Other |
41 |
32 |
Free cash-flow before changes in WCR |
725 |
708 |
TCJA transitional cash tax related to 2022 paid in January
2023 |
110 |
- |
Free cash-flow before changes in WCR |
835 |
708 |
The Groupe’s free cash flow, before change in
working capital requirements, is up by 17 million euros compared to
H1 2022, to 725 million euros. Excluding the TCJA transitional cash
tax related to 2022 and paid in January 2023, Free cash flow is up
by 127 million euros to 835 million euros.
Repayment of lease liabilities and related
interests amounted to 207 million euros in H1 2023 (215 million
euros in H1 2022). Net investments in fixed assets were 75 million
euros (82 million euros in H1 2022).
Financial interest were an income of 17 million
euros, compared to a cost of 63 million euros in H1 2022,
reflecting higher remuneration on cash balances.
Tax paid amounted to 386 million euros, up by
135 million euros compared to H1 2022 including 110 million euros
due to the TCJA tax payment realized in January 2023 and related to
2022.
Net debt
Net financial debt amounted to 226 million euros
as of June 30, 2023 compared to 634 million euros net cash position
as of December 31, 2022 reflecting the seasonality of the activity.
The Groupe's last twelve months average net debt as of June 30,
2023 amounted to 498 million euros compared to 1,024 million euros
as of June 30, 2022.
ACQUISITIONS AND DISPOSALS
On January 4, 2023, Publicis
announced the acquisition of Yieldify, a
London-based marketing technology company. Founded in 2013,
Yieldify’s leading platform and service enable companies to better
personalize consumers’ website experiences, driving incremental
revenue and other desired outcomes by delivering the right message
at the right time based on a consumer's profile and stage in their
purchase journey. Yieldify will become part of Epsilon, and its
onsite personalization, conversion optimization and customer
journey offerings will complement Epsilon PeopleCloud to better
address the mid-market.
On January 10, 2023, Publicis
announced the acquisition of Advertise BG, one of
the leading performance marketing agencies in Bulgaria. The
strategic acquisition will further reinforce Publicis Groupe
Bulgaria’s competencies in digital transformation, adding firepower
to its existing offering across digital strategy, data, social
media, and digital content creation.
On March 30, 2023, Publicis
announced the acquisition of Practia, based in
Buenos Aires, a leading Latin America independent technology
company and provider of digital business transformation services.
With its 1,200 experienced professionals, this acquisition will
position Publicis Sapient to enter the Latin America market while
establishing a foundation for a nearshore delivery platform that
will enable the company to better service clients based in North
America.
On May 23, 2023, Publicis
announced the acquisition of full stake in Publicis Sapient
AI Labs, an innovative artificial intelligence research
and development joint venture launched in 2020 in partnership
between Publicis Sapient, Elder Research and Tquila. The
acquisition will further strengthen Publicis Sapient’s data &
AI capabilities and enable the company to develop innovative
solutions across industries for a wide range of applications, such
as generative AI, natural language processing (NLP), computer
vision and autonomous systems.
On June 5, 2023, Publicis
announced the acquisition of Corra, based in New
York, an ecommerce leader recognized by Adobe as one of the top
commerce firms in North America. Corra will augment Publicis
Sapient’s existing expertise in commerce solutions, including Adobe
Commerce, while extending Publicis Sapient’s offerings in digital
and omnichannel commerce. By acquiring Corra, Publicis Sapient will
further establish itself as a global leader across the entire Adobe
Product Suite, in addition to further cementing its already leading
capabilities.
On June 15, 2023, Publicis and
Carrefour announced the launch of their joint-venture
Unlimitail, to address the booming retail media
market in Continental Europe, Brazil and Argentina. The launch of
the company comes six months after the initiative was announced and
has been unveiled during VivaTech. Unlimitail will partner with
retailers and brands, bringing the scale, connectivity and
consistency for retail media to reach its full potential in those
geographies. It is built on the most advanced technologies,
“CitrusAd powered by Epsilon”, and the deepest retail expertise
from Carrefour. Unlimitail has already converted its first 13
retail partners, representing together more than 120 million
loyalty customers.
CSR
During the first half of 2023, Publicis Groupe
continued its actions and innovated in its various priorities.
1 - Diversity, Equity and
Inclusion: the 4th edition of "Pause for Action" in the
United States on 27 June 2023 brought together committed employees
to take stock and work together on inclusion, diversity and social
justice. The data published on the diversity of our teams in the
United States shows continued progress on several indicators,
illustrating how far we have come in three years. The Chairman of
the Management Board, Arthur Sadoun, emphasised the importance of
all these actions, which are assessed over the longer term, and
welcomed the financial commitments made with 45 million euros
dedicated to diversity and social justice, as announced in 2020.
This target has been reached thanks in particular to the "Once And
For All Coalition" initiative which funds content creators in
favour of the widest possible diversity.
In March 2023, a special edition of the Women's
Forum was held in Washington, bringing together 250 experts to
discuss education as one of the keys to equity, with a focus on
health, climate and peace. In June 2023, with a view to the third
edition of the Women's Forum Singapore (scheduled for March 2024),
a one-day "Meet-Up" kicked off work on education as a lever for
change, with 80 experts from the region and many talented young
people brought together.
The "Working with Cancer" pledge launched by
Arthur Sadoun in January 2023 has now been taken up by close to 700
companies worldwide, representing more than 20 million employees.
The common objective is to break the taboo of cancer6 in the
workplace, provide better protection for affected employees and
offer them (and their carers) better support. The Publicis Groupe
campaign won the Grand Prix for Good at Cannes Lions in June
2023.
Marcel, the Groupe's internal platform remains a
central place for employees, hosting quarterly plenary sessions led
by country managers and their leaders. It is also the platform used
in the countries for exchange, work and dialogue with stakeholders
on many topical issues. From February 2023, employees have had
access to a series of modules and live sessions, sharing the latest
advances in artificial intelligence and giving them access to a
number of tools to train and collaborate, in order to best support
their customers.
2 - Responsible marketing and business
ethics: the carbon emissions calculation tool A.L.I.C.E
(Advertising Limiting Impacts & Carbon Emissions) is used for
220 clients/brands. A.L.I.C.E enables all the Group's activities
(creation, production, media, technology, events, etc.) to measure
their impact (100 countries) using the GHG Protocol method and with
the support of Bureau Veritas for the calculation methodology and
the updating of emission factors. Publicis Groupe remains very
involved in the work carried out by the industry at international
level, in particular Ad Net Zero on the search for a methodological
consensus on measuring impacts with all stakeholders.
3 - Fighting climate change: as
part of the action plan designed to achieve the carbon emission
reduction targets for 2030 (-50%) & 2040 (-90%), validated by
SBTi (Science Based Targets Initiative) and aligned with the 1.5°
scenario, the Groupe has continued its internal work, in
particular:- The introduction of an internal shadow price for
carbon to mobilise all the Group's agencies in reduction actions
and to better quantify the direct impacts linked to the various
activities,- The introduction of a new voluntary carbon credit plan
(VCCs Plan 2 - 2024/2028) to follow on from the first VCC Plan 1
(2020/2023).
Finally, in June 2023, the success of VivaTech
was confirmed with more than 150,000 visitors in Paris for this 7th
edition - becoming the world's leading event for the Tech sector,
with sessions over three days bringing together more than 11,000
start-ups, around prestigious guests with a peak of 1 billion
impressions on social networks. The VivaTech News channel reached
over 5 million people live over the three days.
The CSR actions of the Groupe and its agencies
are publicly accessible in the CSR section of the Groupe website,
and the data is summarised in the CSR Smart data section.
2023 OUTLOOK
With a better than expected first half 2023, and
driven by the strength of its unique model, the Groupe upgrades its
guidance on all KPIs for the full year 2023 despite persistent
macroeconomic uncertainties.
- Organic growth is now
expected at circa +5%, versus the top half of the +3%
to +5% previous guidance.
- Operating margin rate close
to 18% versus between 17.5% and 18% previously.
- Free cash flow before
working capital requirement of at least 1.6 billion
euros7, versus circa 1.6 billion euros
previously.
NEW BUSINESS
EUROPE
Santen France (Health), Glaxo Smith Kline
(Health), Comité Colbert (Creative), Speedy (Data), Carlsberg
(Creative), Abeille Assurances (Creative), Visa (Technology),
DomusVi (Technology), DocuSign (Creative), The Football Association
Premier League (Creative), Allwyn (Creative), Pivovara Daruvar
(Creative), heroal (Creative), Deutsche Telekom (Creative), DATEV
(Influence), Samsung (DTC), PepsiCo (Media), L’Oréal (Media), Tesco
(Creative), Asda (Technology), Renault (Influence), FoodWell
(Media), Notino (Media), Casavo (Creative), La Poste (Media), Dream
Games (Media), Cassa Depositi e Prestiti (Media), Meggle (Media),
Île-de-France Mobilités (Creative), TotalEnergies (Creative),
Bioderma (Creative), Pernod Ricard (Influence), Ovo Energy
(Creative), Le manège à bijoux (Creative), Inserm (Media), SNCF
(Digital), John Lewis (Creative), Alfa Romeo (Air France KLM
(Influence), Ikea (Creative & media), Gruppo Iren (Creative),
Bulgari (Creative), Gruppo Campari (Influence), Western Union
(Media), Beko (Influence), Société Générale (DBT), IVECO (Media),
Sony Music (Digital)
NORTH AMERICA
Krafton (Influence), Intuit (Creative), Shelter
Movers (Influence), Universite de Sherbrooke (Creative), Steak 'n
Shake (Creative), Loblaws (Cretaive), Mattress Firm (Creative),
Jasco Games (Creative), Wondery (CRM), McDonalds (CRM), Milton
Hershey School (Influence), University of Oklahoma (Production),
Progress Residential (Production), Wyndham Hotels & Resorts
(Production), Robert Walters (Production), HP (Commerce), Sun Life
of Canada (Commerce), Rite Aid (Media), The PUR Company (Media),
MTY Food Group (Influence), General Mills (Commerce), Dunkin’
(Creative), Walgreens (Media), KB Home (Creative), Burger King
(Creative), Sanofi (Influence), Virgin Mobile (Creative), Toronto
Parking Authority (Creative), HealthPartners Canada (Influence),
Groupe Atallah (Media), Kicking Horse Coffee (Creative &
Influence), General Motors Company (Production), Tillamook County
Creamery Association (Creative), Signet Jewelers (Media), Blue
Diamond Growers (Media), Turo (Creative), UPS (Creative), LVMH
(Media), Shark Beauty (Creative), New Age Products (Media), Samsung
(Commerce), TGI Fridays (Media)
ASIA PACIFIC/MEA
Miele (CRM), United Homeware Company (Creative),
Krungthai Bank (Creative), Anker (Media), Royal Automobile Club
(Media), Charles & Keith (Commerce), Nick Did This (Media),
Nine Network (Creative), Essity (Media), OSHO (DBT), La Trobe
University (DBT), LVMH (Production), Cathay Pacific Airways
(Commerce), Pepsico (Production), Duolingo (Creative), Aeries
Financial Technologies (Media), Central Provident Fund Board
(Production), AIA Company (Media), Haleon (Production), LOréal
(Media & Production), The Standard Bank of South Africa
(Creative), Sanofi (Creative), Nestlé (Production), Diageo
(Commerce), Mondelez (Production), Pizza Hut (Creative), Cancer
Council Victoria (Media), Emirates NBD (Creative), Grupo Bimbo
(Creative), Microsoft (Influence), JioMart (Creative), AkBank
(Media), Novartis (Creative & Production), United Breweries
(Production), Charlotte Tilbury Beauty (Creative), Genesis Motor
(Creative), Torrent Pharmaceuticals (Creative), More Retail
(Media), GlaxoSmithKline (Creative), Crocs (Creative), Shanghai
Neobio (Creative), FWD Group (Media), Bank of China (Media), Yili
(Creative), Singhealth (Digital), P&G (Digital), Oritain
(Creative & Media), Neom Company (Creative), Renault (Media),
Bosideng (Production), HSBC (Creative), BASF (Creative), Union Bank
of the Philippines (Creative), Roborock (Production), Indeed
(Influence), Samsonite (Media), New Balance (Production), Keypath
Education (Media), Jio-bp (Digital), Enamor (Digital), UniScholars
(Creative)
LATAM
LOréal (Media), Bayer (Media), Samsung (Media),
Nestlé (Creative), PicPay (Creative), Pizza Hut (Commerce), Polla
Chilena (Media)
GLOBALAdobe (Media), Mondelez
(Production), King (Creative), Ninjacart (Creative), Alvarium
Tiedemann (Creative), Amplifon (Creative), Pfizer (Creative, Media,
Data, Production)
* **
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
from those projected. These forward-looking statements and
forecasts are presented at the date of this document and, other
than as required by applicable law, Publicis Groupe does not assume
any obligation to update them to reflect new information or events
or for any other reason. Publicis Groupe urges you to carefully
consider the risk factors that may affect its business, as set out
in the Universal Registration Document filed with the French
Autorité des Marchés Financiers (AMF) and which is available on the
website of Publicis Groupe (www.publicisgroupe.com).
About Publicis Groupe - The Power of
OnePublicis Groupe [Euronext Paris FR0000130577, CAC 40]
is a global leader in communication. The Groupe is positioned at
every step of the value chain, from consulting to execution,
combining marketing transformation and digital business
transformation. Publicis Groupe is a privileged partner in its
clients’ transformation to enhance personalization at scale. The
Groupe relies on ten expertise concentrated within four main
activities: Communication, Media, Data and Technology. Through a
unified and fluid organization, its clients have a facilitated
access to all its expertise in every market. Present in over 100
countries, Publicis Groupe employs around 98,000 professionals.
www.publicisgroupe.com | Twitter:@PublicisGroupe | Facebook |
LinkedIn | YouTube | Viva la Difference!
ContactsPublicis Groupe
|
Lizzie Dewhurst |
Corporate Communications |
+44 794 991 81 94 |
lizzie.dewhurst@publicis.com |
Michelle McGowan |
Corporate Communications |
+1 312 315 5259 |
michelle.mcgowan@publicisgroupe.com |
Alessandra Girolami |
Investor Relations |
+ 33 1 44 43 77 88 |
alessandra.girolami@publicisgroupe.com |
Lionel Benchimol |
Investor Relations |
+ 33 1 44 43 70 27 |
lionel.benchimol@publicisgroupe.com |
Lorène Fleury |
Investor Relations |
+ 33 1 44 43 57 24 |
lorene.fleury@publicisgroupe.com |
Appendices
Net revenue: organic growth
calculation
(million euro) |
Q1 |
Q2 |
H1 |
|
Impact of currency at end June 2023
(million euro) |
2022 net revenue |
2,800 |
3,073 |
5,873 |
|
GBP (2) |
(20) |
Currency impact (2) |
61 |
(73) |
(12) |
|
USD (2) |
43 |
2022 net revenue at 2023 exchange rates (a) |
2,861 |
3,000 |
5,861 |
|
Others |
(35) |
2023 net revenue before acquisition impact (b) |
3,065 |
3,213 |
6,278 |
|
Total |
(12) |
Net revenue from acquisitions (1) |
14 |
26 |
40 |
|
|
2023 net revenue |
3,079 |
3,239 |
6,318 |
|
|
Organic growth (b/a) |
+7.1% |
+7.1% |
+7.1% |
|
|
(1) Acquisitions (Profitero, Practia, Tremend,
Tquila, Wiredcraft, Yieldify, Retargetly, Corra, Bizon,
VivNetworks, Cheat, Changi, ARBH, Perlu, Advertise Bulgaria), net
of disposals (Russia, Qorvis, Makers Lab)(2) EUR =
USD 1.081 on average in H1 2023 vs. USD 1.094 on average in H1
2022 EUR = GBP 0.877 on average in H1
2023 vs. GBP 0.842 on average in H1 2022
Definitions
Net revenue or Revenue less pass-through
costs: Pass-through costs mainly concern production and
media activities, as well as various expenses incumbent on clients.
These items that can be re-billed to clients do not come within the
scope of assessment of operations, net revenue is a more relevant
indicator to measure the operational performance of the Groupe’s
activities.
Organic growth: Change in net
revenue excluding the impact of acquisitions, disposals and
currencies.
EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization): Operating margin before
depreciation & amortization.
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 a percentage of net revenue.
Headline Group Net Income: Net
income attributable to the Groupe, after elimination of impairment
charges / real estate transformation expenses, amortization of
intangibles arising on acquisitions, the main capital gains (or
losses) on disposals, change in the fair value of financial assets
and the revaluation of earn-out costs.
EPS (Earnings per share): Group
net income divided by average number of shares, not diluted.
EPS, diluted (Earnings per share,
diluted): Group net income divided by average number of
shares, diluted.
Headline EPS, diluted (Headline Earnings
per share, diluted): Headline group net income, divided by
average number of shares, diluted.
Capex: Net acquisitions of
tangible and intangible assets, excluding financial investments and
other financial assets.
Free Cash Flow before changes in working
capital requirements: Net cash flow from operating
activities less interests paid & received, repayment of lease
liabilities & related interests and before changes in WCR
linked to operating activities
Free Cash Flow: Net cash flow
from operating activities less interests paid & received,
repayment of lease liabilities & related interests
Net Debt (or financial net
debt): Sum of long and short financial debt and associated
derivatives, net of treasury and cash equivalents, excluding lease
liabilities since 1st January 2018.
Average net debt: Average of
monthly net debt at end of month.
Dividend pay-out: Dividend per
share / Headline diluted EPS.
Organic Growth vs. 2019:
calculated as ([1 + organic growth (n-3)] * [1 + organic growth
(n-2)] * [1 + organic growth (n-1)] * [1 + organic growth
(n)])-1
Consolidated income statement
(in millions of euros) |
|
30 June 30, 2023(6
months)(6 months) |
30 June 30, 2022(6
months)(6 months) |
December 31, 2022(12 months) |
Net
revenue 8 |
|
6.318 |
5,873 |
12,572 |
Pass-through revenue |
|
787 |
674 |
1,624 |
Revenue |
|
7,105 |
6,547 |
14,196 |
Personnel costsOther
operating costs |
|
(4,200) (1,570) |
(3,888)(1,372) |
(8,211)(3,184) |
Operating margin
before depreciation & amortization |
|
1,335 |
1,287 |
2,801 |
Depreciation and
amortization (excluding intangibles from acquisitions) |
|
(242) |
(269) |
(535) |
Operating
margin |
|
1,093 |
1,018 |
2,266 |
Amortization of
intangibles from acquisitions |
|
(142) |
(137) |
(287) |
Impairment loss |
|
(112) |
(44) |
(109) |
Other non-current income and
expenses |
|
4 |
(76) |
(103) |
|
|
|
|
1,434 |
Operating
income |
|
843 |
761 |
1,767 |
Financial
expenseFinancial incomeCost of net financial
debtOther financial income and expensesRevaluation of
earn-out payments |
|
(59)10142(56)1 |
(56)29(27) (13)(4) |
(118)101(17)(100)(2) |
Pre-tax income of
consolidated companies |
|
830 |
717 |
1,648 |
Income taxes
|
|
(205) |
(189) |
(431) |
Net income of
consolidated companies |
|
625 |
528 |
1,217 |
Share of profit of
associates |
|
3 |
5 |
5 |
Net
income |
|
628 |
533 |
1,222 |
Of which:- Net income
attributable to non-controlling interests |
|
5 |
(4) |
- |
Net income
attributable to equity holders of the parent company |
|
623 |
537 |
1,222 |
Per share data (in euros) - Net income
attributableto equity holders of the parent
company |
|
|
|
|
Number of shares |
|
250,829,338 |
250,274,576 |
250,972,110 |
Earnings per share |
|
2.48 |
2.15 |
4.87 |
|
|
|
|
|
Number of diluted shares |
|
253,618,058 |
252,508,128 |
253,605,167 |
Diluted earnings per share |
|
2.46 |
2.13 |
4.82 |
Consolidated statement of comprehensive
income
(in millions of euros) |
|
June 30, 2023(6 months) |
June 30, 2022(6 months) |
December 31, 2022(12 months) |
Net income for the period (a) |
|
628 |
533 |
1,222 |
|
|
|
|
|
Comprehensive income that will not
be reclassified to income statement
|
|
|
|
|
- Actuarial gains (and losses) on defined benefit plans |
|
(6) |
91 |
42 |
- Deferred taxes on comprehensive income that will not be
reclassified to income statement |
|
2 |
(22) |
(10) |
Comprehensive income that may be
reclassified to income statement
|
|
|
|
|
- Remeasurement of hedging instruments |
|
13 |
8 |
(21) |
- Consolidation translation adjustments |
|
(217) |
676 |
311 |
Total other comprehensive income (b) |
|
(208) |
753 |
322 |
|
|
|
|
|
Total comprehensive income for the period (a) +
(b) |
|
420 |
1,286 |
1,544 |
Of which: |
|
|
|
|
- Comprehensive income for the period attributable to
non-controlling interests |
|
(2) |
(1) |
- |
- Comprehensive income for the period attributable to equity
holders of the parent company |
|
422 |
1,287 |
1,544 |
Consolidated balance sheet
(in
millions of euros) |
|
June 30, 2023 |
December 31, 2022 |
Assets |
|
|
|
Goodwill, net |
|
12,636 |
12,546 |
Intangible assets, net |
|
1,094 |
1,247 |
Right-of-use assets related to leases |
|
1,672 |
1,753 |
Property, plant and equipment, net |
|
582 |
610 |
Deferred tax assets |
|
199 |
186 |
Investments in associates |
|
55 |
55 |
Other
financial assets |
|
351 |
394 |
Non-current assets |
|
16,589 |
16,791 |
Inventories and work-in-progress |
|
319 |
327 |
Trade
receivables |
|
10,729 |
12,089 |
Contract assets |
|
1,451 |
1,149 |
Other
receivables and current assets |
|
930 |
926 |
Cash
and cash equivalents |
|
3,682 |
4,616 |
Current assets |
|
17,111 |
19,107 |
|
|
|
|
Total assets |
|
33,700 |
35,898 |
Equity and liabilities |
|
|
|
Share
capital |
|
102 |
102 |
Additional paid-in capital and retained earnings, Groupe share |
|
9,086 |
9,533 |
Equity attributable to holders of the parent company –
Groupe share |
|
9,188 |
9,635 |
Non-controlling interests |
|
(44) |
(35) |
Total equity |
|
9,144 |
9,600 |
Long-term borrowings |
|
3,085 |
2,989 |
Long-term lease liabilities |
|
2,124 |
2,197 |
Deferred tax liabilities |
|
203 |
219 |
Long-term provisions |
|
553 |
504 |
Non-current
liabilities |
|
5,965 |
5,909 |
Trade
payables |
|
13,861 |
15,660 |
Contract liabilities |
|
444 |
549 |
Short-term borrowings |
|
625 |
627 |
Short-term lease liabilities |
|
353 |
360 |
Income taxes payable |
|
328 |
486 |
Short-term provisions |
|
278 |
291 |
Other
creditors and current liabilities |
|
2,702 |
2,416 |
Current liabilities |
|
18,591 |
20,389 |
|
|
|
|
Total equity and liabilities |
|
33,700 |
35,898 |
Consolidated statement of cash flows
(in millions of euros) |
June 30, 2023(6 months) |
June 30, 2022(6 months) |
December 31, 2022(12 months)
|
Cash flow from operating
activities |
|
|
|
Net income |
628 |
533 |
1,222 |
Neutralization of non-cash income and expenses: |
|
|
|
Income taxes |
205 |
189 |
431 |
Cost of net financial debt |
(42) |
27 |
17 |
Capital losses (gains) on disposal of assets (before tax) |
(2) |
76 |
103 |
Depreciation, amortization and impairment losses |
496 |
450 |
931 |
Share-based compensation |
41 |
30 |
64 |
Other non-cash income and expenses |
51 |
16 |
86 |
Share of profit of associates |
(3) |
(5) |
(5) |
Dividends received from associates |
2 |
3 |
3 |
Taxes paid |
(386) |
(251) |
(430) |
Change in working capital requirements |
(1,053) |
(858) |
(5) |
Net cash flows generated by (used
in) operating activities (I) |
(63) |
210 |
2,417 |
Cash flow from investing
activities |
|
|
|
Purchases of property, plant and equipment and intangible
assets |
(75) |
(84) |
(198) |
Disposals of property, plant and equipment and intangible
assets |
- |
2 |
4 |
Purchases of investments and other financial assets, net |
(10) |
18 |
11 |
Acquisitions of subsidiaries |
(158) |
(400) |
(523) |
Disposals of subsidiaries |
- |
(43) |
(43) |
|
|
|
|
Net cash flows generated by (used
in) investing activities (II) |
(243) |
(507) |
(749) |
Cash flow from financing
activities |
|
|
|
Dividends paid to holders of the parent company |
- |
- |
(603) |
Dividends paid to non-controlling interests |
(7) |
(3) |
(4) |
Proceeds from new borrowings |
4 |
5 |
- |
Repayment of borrowings |
- |
(10) |
(10) |
Repayment of lease liabilities |
(168) |
(170) |
(317) |
Interest paid on lease liabilities |
(39) |
(45) |
(87) |
Interest paid |
(86) |
(84) |
(101) |
Interest received |
103 |
21 |
84 |
Buy-outs of non-controlling interests |
(2) |
- |
(3) |
Net (buybacks)/sales of treasury shares and warrants |
(193) |
7 |
41 |
Net cash flows generated by (used
in) financing activities (III) |
(388) |
(279) |
(1,000) |
Impact of exchange rate
fluctuations (IV) |
(239) |
258 |
300 |
Change in consolidated cash and
cash equivalents (I + II + III + IV) |
(933) |
(318) |
968 |
Cash and cash equivalents on January 1 |
4,616 |
3,659 |
3,659 |
Bank overdrafts on January 1 |
(1) |
(12) |
(12) |
Net cash and cash equivalents at beginning of year
(V) |
4,615 |
3,647 |
3,647 |
Cash and cash equivalents at closing date |
3,682 |
3,342 |
4,616 |
Bank overdrafts at closing date |
- |
(13) |
(1) |
Net cash and cash equivalents at closing date
(VI) |
3,682 |
3,329 |
4,615 |
Change in consolidated cash and
cash equivalents (VI - V) |
(933) |
(318) |
968 |
Consolidated statement of changes in
equity
Number of outstanding shares |
(in
millions of euros) |
Share capital |
Additional paid-in capital |
Reserves and earnings brought forward |
Translationreserve
|
Fair value reserve |
Equity attributable to equity holders of the parent
company |
Non-controlling interests |
Total equity |
|
|
|
251,992,065 |
December 31, 2022 |
102 |
4,037 |
5,324 |
85 |
87 |
9,635 |
(35) |
9,600 |
|
|
Net
income |
|
|
623 |
|
|
623 |
5 |
628 |
|
|
Other
comprehensive income, net of tax |
|
|
|
(210) |
9 |
(201) |
(7) |
(208) |
|
|
Total income and expenses for the period |
0 |
0 |
623 |
(210) |
9 |
422 |
(2) |
420 |
|
- |
Dividends |
|
(701) |
(25) |
|
|
(726) |
(7) |
(733) |
|
- |
Share-based compensation, net of tax |
|
|
50 |
|
|
50 |
|
50 |
|
|
Effect
of acquisitions and commitments to buy-out non-controlling
interests |
|
|
1 |
|
|
1 |
|
1 |
|
- |
Equity
warrant exercise |
|
|
0 |
|
|
0 |
|
0 |
|
(1,490,149) |
(Buybacks)/Sales of treasury shares |
|
|
(194) |
|
|
(194) |
|
(194) |
|
250,501,916 |
June 30, 2023 |
102 |
3,336 |
5,779 |
(125) |
96 |
9,188 |
(44) |
9,144 |
|
Number of outstanding shares |
(in
millions of euros) |
Share capital |
Additional paid-in capital |
Reserves and earnings brought forward |
Translationreserve
|
Fair value reserve |
Equity attributable to equity holders of the parent
company |
Non-controlling interests |
Total equity |
|
|
|
249,600,509 |
December 31, 2021 |
101 |
4,581 |
4,056 |
(226) |
76 |
8,588 |
(33) |
8,555 |
|
|
Net
income |
|
|
537 |
|
|
537 |
(4) |
533 |
|
|
Other
comprehensive income, net of tax |
|
|
|
673 |
77 |
750 |
3 |
753 |
|
|
Total income and expenses for the period |
- |
- |
537 |
673 |
77 |
1,287 |
(1) |
1,286 |
|
- |
Dividends |
|
|
(599) |
|
|
(599) |
(3) |
(602) |
|
246,225 |
Share-based compensation, net of tax |
|
|
29 |
|
|
29 |
|
29 |
|
|
Effect
of acquisitions and commitments to buy-out non-controlling
interests |
|
|
2 |
|
|
2 |
3 |
5 |
|
161,412 |
Equity
warrant exercise |
1 |
3 |
|
|
|
4 |
|
4 |
|
1,116,166 |
(Buybacks)/Sales of treasury shares |
|
|
3 |
|
|
3 |
|
3 |
|
251,124,312 |
June 30, 2022 |
102 |
4,584 |
4,028 |
447 |
153 |
9,314 |
(34) |
9,280 |
|
Earnings per share (basic and
diluted)
(in
millions of euros, except for share data) |
|
June 30, 2023 |
June 30, 2022 |
Net income used for the
calculation of earnings per share |
|
|
|
Net income share attributable to equity
holders of the parent company |
A |
623 |
537 |
Impact of dilutive instruments: |
|
|
|
- Savings in financial expenses related
to the conversion of debt instruments, net of tax |
|
- |
- |
Net income – Groupe share – diluted |
B |
623 |
537 |
Number of shares used to
calculate earnings per share |
|
|
|
Number of shares at January 1 |
|
254,311,860 |
253,462,409 |
Shares created over the period |
|
- |
133,430 |
Treasury shares to be deducted (average
for the period) |
|
(3,482,522) |
(3,321,264) |
Average number of shares used for the
calculation |
C |
250,829,338 |
250,274,576 |
Impact of dilutive instruments: |
|
|
|
- Free shares and dilutive stock
options |
|
2,788,720 |
2,124,694 |
- Equity warrants (BSA) |
|
- |
108,858 |
Number of diluted shares |
D |
253,618,058 |
252,508,128 |
(in euros) |
|
|
|
Earnings per share |
A/C |
2.48 |
2.15 |
|
|
|
|
Diluted earnings per
share |
B/D |
2.46 |
2.13 |
Headline earnings per share (basic and
diluted)
(in millions of euros, except for share data) |
|
June 30, 2023 |
June 30, 2022 |
Net income used to calculate headline earnings per
share(1) |
|
|
|
Net income – Groupe share |
|
623 |
537 |
Items excluded: |
|
|
|
- Amortization of intangibles from acquisitions, net of tax
|
|
105 |
103 |
- Impairment loss, net of tax
|
|
83 |
33 |
- Revaluation of earn-out payments
|
|
(1) |
4 |
- Main capital gains and losses on disposal of assets and fair
value adjustment of financial assets, net of tax(2)
|
|
3 |
50 |
Headline Groupe net income |
E |
813 |
727 |
Impact of dilutive instruments: |
|
|
|
- Savings in financial expenses related to the conversion of debt
instruments, net of tax |
|
- |
- |
Headline Groupe net income, diluted |
F |
813 |
727 |
|
|
|
|
Number of shares used to calculate earnings per
share |
|
|
|
Number of shares at January 1 |
|
254,311,860 |
253,462,409 |
Shares created over the period |
|
- |
133,430 |
Treasury shares to be deducted (average for the period) |
|
(3,482,522) |
(3,321,264) |
Average number of shares used for the calculation |
C |
250,829,338 |
250,274,576 |
Impact of dilutive instruments: |
|
|
|
- Free shares and dilutive stock options |
|
2,788,720 |
2,124,694 |
- Equity warrants (BSA) |
|
- |
108,858 |
Number of diluted shares |
D |
253,618,058 |
252,508,128 |
(in euros) |
|
|
|
Headline earnings per share(1) |
E/C |
3.24 |
2.90 |
|
|
|
|
Headline earnings per share – diluted(1) |
F/D |
3.21 |
2.88 |
(1) EPS after elimination of impairment losses,
amortization of intangibles from acquisitions, the main capital
gains and losses on disposal and fair value adjustment of financial
assets and revaluation of earn-out payments.
(2) As of June 30, 2023, the main capital gains and
losses on disposal amount to euro 4 million and the fair value
adjustment of financial assets amounts to euro (7) million. At June
30, 2022, the main capital gains and losses on disposal amount to
euro (79) million and the fair value adjustment of financial assets
amounts to euro 29 million.
1 Before change in working capital
requirements.
2 Reported H1 2023 FCF of €725m
includes a €110m cash tax payment made in January 2023 relating to
2022. This payment reflects the impact of the new application of
the U.S. Tax Cuts and Jobs Act (TCJA) on the capitalization of
R&D expenses, confirmed late December 2022. Excluding
this payment, H1 2023 FCF is at €835m, up 17.9% compared to H1
2022.
3 Net income attributable to the Groupe, after
elimination of impairment charges, amortization of intangibles
arising on acquisitions, the main capital gains (or losses) on
disposals, change in the fair value of financial assets, the
revaluation of earn-out costs, divided by the average number of
shares on a diluted basis
4 Excluding Outdoor Media activities & the
Drugstore5 Excluding Outdoor Media activities and the Drugstore
6 Cancer or serious deseases
7 Based on 1.10 EUR/USD exchange rate
8 Net revenue: Revenue less pass-through costs.
Those costs are mainly production & media costs and
out-of-pocket expenses. As these items that can be passed on to
clients are not included in the scope of analysis of transactions,
the net revenue indicator is the most appropriate for measuring the
Groupe’s operational performance.
Please find the press release here
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