Full recovery with all KPIs exceeding 2019
levels
- Q2 organic growth at +17.1%, more than recovering vs. Q2
2020 at -13.0%
- New acceleration in the U.S. at +15.2%, with Epsilon at
+31.1% and Publicis Sapient at +27.0%
- Continued momentum in Asia at +13.6%, Europe rebounding at
+23.0%
- U.S. and Asia at +7% organic growth vs. 2019
- Full recovery in H1 overall
- Organic growth at +9.7% vs. -8.0% in H1 2020
- All-time high operating margin rate at 16.5% in a
first-half
- Growth of +27% in Headline EPS at €2.23 and +22% in Free
Cash Flow1 at €605m
- Number 1 in rankings in New Business2 in H1
- Upgrade of all 2021 guidance KPIs with full recovery
expected in one year instead of two: organic growth at 7%,
operating margin rate at 17%, Free Cash Flow between €1.2bn and
€1.3bn
Regulatory News:
Publicis Groupe (Paris:PUB):
Q2 2021 Revenue
€ 2,539 M
+17.1%
+10.7%
H1 2021 Results
H1 2021
2021 vs 2020
5,493
+4.1%
4,931
+3.3%
+9.7%
1,052
+14.0%
815
+31.0%
16.5%
+350bps
- Headline Groupe net
income
555
+33.1%
- Headline diluted EPS
(euro)
2.23
+27.4%
605
+22.2%
Arthur Sadoun, Chairman and CEO of Publicis Groupe:
“In the first half of the year, we had a very strong performance
thanks to our model in an improving business environment.
Not only did we fully recover the revenue lost in 2020, but all
of our KPIs over the first half exceeded 2019 levels.
In Q2, we posted +17.1% organic growth, improving by 2% compared
to 2019, despite the effects of the pandemic.
This overperformance was largely driven by the U.S. and Asia,
which both grew +7% versus 2019.
Our U.S operations posted 15.2% organic growth in Q2, with
Epsilon, PMX and Sapient all delivering above +25%. Asia also
accelerated further with +13.6% organic growth. Europe rebounded
from a low base to +23%, mirroring the progressive lifting of
lockdowns.
In H1 overall, we posted organic growth of +9.7%, leading to an
operating margin rate at 16.5%, the group’s highest ever for a
first half period, while our free cash flow up 22%, at €605
million.
What is more, we once again topped new business rankings for the
first half of the year, thanks to a strong run of wins.
For the remaining part of the year, our ability to capture a
disproportionate part of our clients’ investment in data and
technology means we are in a position to upgrade our 2021 guidance.
We now expect to totally recover to pre-pandemic levels, a year
ahead of our initial expectations, with full year organic growth at
7% and full recovery in H2, and an operating margin of 17%,
provided there are no major deteriorations in the global sanitary
situation.
I’d like to thank our teams for their incredible efforts in this
first half of the year, and our clients for their trust and
partnership. In H2 we are focused on the execution of our plan, in
a context that remains challenging in many parts of the world.
»
* *
*
Publicis Groupe’s Supervisory Board met on July 21, 2021,
under the chairmanship of Maurice Lévy, to examine the 2021 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 2021
H1 2020
2021
vs 2020
Data from the Income Statement and Cash
flow Statement
Net revenue
4,931
4,774
+3.3%
Pass-through revenue
562
504
+11.5%
Revenue
5,493
5,278
+4.1%
EBITDA
1,052
923
+14.0%
% of Net revenue
21.3%
19.3%
+200bps
Operating margin
815
622
+31.0%
% of Net revenue
16.5%
13.0%
+350bps
Operating income
598
254
+135%
Net income attributable to the
Groupe
414
136
+204%
Earnings Per Share (EPS)
1,68
0.57
+195%
Headline diluted EPS (1)
2.23
1.75
+27.4%
Free Cash Flow before change in
working capital requirements
605
495
+22.2%
Data from the Balance
Sheet
June 30, 2021
Dec. 31, 2020
Total assets
29,079
30,161
Groupe share of Shareholders’
equity
7,690
7,182
Net debt (net cash)
1,362
833
(1) 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
NET REVENUE IN Q2 2021
Publicis Groupe's net revenue in Q2 2021 was 2,539 million euros
compared to 2,293 million euros in Q2 2020, up by +10.7%. Exchange
rate variations had a 125 million euros negative impact. The
acquisitions (net of disposals) contributed 2 million euros to net
revenue.
Organic growth was +17.1% in Q2 2021. This implies a recovery
ratio of 102%3 over the period, after a -13.0% decline in Q2 2020
when the Groupe was very impacted by the effects of the Covid-19
pandemic. All regions strongly recovered in the second quarter and
posted double-digit organic growth. Q2 came ahead of expectations
reflecting two main factors. First, an improving global context,
characterized by mass re-openings in Europe and a continued uplift
in the U.S. economy. Second, the strength of the model, which
enabled the Groupe to continue to capture the ongoing shift in
clients’ investment towards data management, digital media,
direct-to-consumer channels and commerce in general.
Breakdown of Q2 2021 Net revenue by region
EUR
Net revenue
Reported
Organic
Recovery
million
Q2 2021
Q2 2020
growth
growth
Ratio3
North America
1,527
1,458
+4.7%
+15.1%
106%
Europe
634
510
+24.3%
+23.0%4
94%4
Asia Pacific
253
215
+17.7%
+13.6%
107%
Middle East & Africa
71
60
+18.3%
+22.8%
94%
Latin America
54
50
+8.0%
+15.9%
92%
Total
2,539
2,293
+10.7%
+17.1%
102%
Net revenue in North America was up by +15.1% on an organic
basis in the second quarter (+4.7% on a reported basis including
the negative impact of the US Dollar/ Euro exchange rate). This
strong performance was driven by a +15.2% organic growth in the
U.S., accelerating from the +5.1% posted in Q1. The recovery ratio
in the U.S. is at 107%, implying a 7% growth compared to 2019
level. In the U.S., Q2 saw a particularly high demand for digital
media, first party data management and direct-to-consumer products
and services. In this context, Epsilon was up by +31.1% and
Publicis Sapient by +27.0% organically. The same trend was visible
in the Groupe’s digital media unit PMX, which supported overall
media growth. Health operations grew double digit again this
quarter. Creative activities were positive, showing sequential
improvement after being flat in Q1, with notably a strong growth in
production activities.
Activities in Europe rebounded from a low base and the region
recovered most of the value lost in 2020 with organic growth at
+23.0%4, mirroring the progressive lifting of lockdowns (+24.3% on
a reported basis). U.K. operations returned to positive growth at
+10.0% organic. In France, all activities bounced back strongly,
with net revenue up by +30.6%5. Germany accelerated to +9.6%
organic growth while Italy was up by +36.9%.
Asia Pacific was up by +13.6% on an organic basis (+17.7%
reported), accelerating in Q2. This translated into a strong
recovery ratio of 107% after an organic growth of -5.7% in Q2 2020.
China reported an organic growth of +8.0%, Australia of +7.3% and
India of +35.4%.
Net revenue in the Middle East and Africa region was up by
+22.8% on an organic basis (+18.3% reported).
Net revenue in Latin America was up by +15.9% on an organic
basis, translating into a recovery ratio of 92% as the region
remained impacted by the sanitary situation. Growth on a reported
basis was +8.0%, as the impact from currencies in the region
remained negative.
NET REVENUE IN H1 2021
Publicis Groupe’s net revenue for the first half 2021 was 4,931
million euros, up by +3.3% compared to 4,774 million euros in H1
2020. Exchange rate variations over the period had a negative
impact of 276 million euros. Acquisitions (net of disposals) have a
negative impact of 1 million euros on net revenue.
Organic growth was +9.7% in H1 2021. This implies a recovery
ratio of 101%6 over the period, after a -8.0% decline in H1 2020.
Following an organic growth of +2.8% in the first quarter, the
Groupe accelerated to +17.1% in the second quarter. In H1 2021, all
regions posted positive organic growth.
Breakdown of H1 2021 net revenue by sector
Automotive
16%
Financial
15%
TMT
14%
Healthcare
13%
Food and beverage
12%
Non Food consumer products
12%
Retail
9%
Public sector / Other
4%
Energy/ Manufacturing
3%
Leisure/ Travel
3%
Based on 3,250 clients representing 92% of the Groupe’s net
revenue.
Breakdown of H1 2021 net revenue by region
EUR
Net revenue
Reported
Organic
Recovery
million
H1 2021
H1 2020
growth
growth
Ratio8
North America
3,032
3,013
+0.6%
+9.7%
106%
Europe
1,195
1,088
+9.8%
+10.0%7
92%7
Asia Pacific
470
434
+8.3%
+9.8%
106%
Middle East & Africa
133
135
-1.5%
+4.3%
92%
Latin America
101
104
-2.9%
+12.0%
94%
Total
4,931
4,774
+3.3%
+9.7%
101%
Net revenue in North America was up by +9.7% on an organic basis
in the first half (+0.6% on a reported basis including the negative
impact of the US Dollar/ Euro exchange rate). This strong
performance was driven by a +10.0% organic growth in the U.S.
reflecting a solid Q1 (+5.1%) and an acceleration to +15.2% in Q2.
Overall, the recovery ratio in the U.S. was 106%8, representing a
growth of +6% compared to H1 2019.
Europe rebounded with a +10.0% organic growth in H1 (+9.8% on a
reported basis). Excluding the impact of the Groupe’s outdoor media
activities and the Drugstore in France, that were closed in Q2
2020, the organic growth in Europe is +9.7%, representing a
recovery ratio of 96%. All countries bounced back although the
performance remained mixed, reflecting different activity mix,
local economic situations and variable comparable basis in H1 2020.
The UK was positive at +3.6% organic, France at +17.2%9, Germany at
+7.8% and Italy up by +28.2%.
Asia Pacific net revenue was up by +9.8% on an organic basis
(+8.3% reported). China reported an organic growth of +5.8%,
Australia was up by +5.1% on an organic basis and India by
+22.6%.
Net revenue in the Middle East and Africa region was up by +4.3%
on an organic basis (-1.5% reported).
Net revenue in Latin America was up by +12.0% on an organic
basis. It was down by -2.9% on a reported basis, as the negative
impact from currencies in the region continued to be significant.
Brazil grew by +11.7% organically and Mexico was almost flat at
-0.4%.
ANALYSIS OF H1 2021 KEY FIGURES
Income Statement
EBITDA amounted to 1,052
million euros in H1 2021, compared to 923 million euros in H1 2020,
up by 14.0%. This translates into a margin rate of 21.3% of net
revenue (+200 basis points compared to H1 2020 and +100bps compared
to H1 2019).
- Personnel costs totaled 3,174 million euros at June 30, 2021,
down by 1.6% from 3,224 million euros in H1 2020. This evolution
reflects the impact of the cost reduction plan launched in 2020
when the crisis started, partly offset by the continued investment
in the Groupe’s talents. As a percentage of net revenue, personnel
expenses represented 64.4% in H1 2021, down by 310 basis points
compared to 67.5% in H1 2020. This decrease partly reflects the
strong ramp up in net revenue in the first half that was not
immediately matched by a rise in costs. Fixed personnel costs were
2,779 million euros and represented 56.4% of net revenue versus
59.9% in H1 2020. On the other hand, the cost of freelancers
increased by 28 million euros in H1 2021, in parallel with the
uplift in activity, representing 169 million euros. Provision for
bonus increased by 65 million euros to reach 182 million euros in
H1 2021, reflecting the good performance achieved. Restructuring
costs reached 12 million euros, a significant and expected decrease
vs. 69 million euros in H1 2020.
- Other operating expenses (excluding depreciation &
amortization) amounted to 1,267 million euros, compared to 1,131
million euros in H1 2020. This represents 25.7% of net revenue
compared to 23.7% in H1 2020. This includes a rise in cost of sales
for 48 million euros as a couple of large outdoor engagements have
been extended for a short-term period. The related minimum payments
were accounted directly in other operating expenses rather than as
a right of use and lease liability. This increase was partly offset
by a decline in other G&A, notably in travel expenses that
continued to be down year-on-year versus H1 2020.
Depreciation and amortization
charge was 237 million euros in H1 2021 compared to 301 million
euros in H1 2020, down by 21.3%. This decrease of 64 million euros
largely reflects the impact of the short-term contracts described
above in other operating expenses.
As a result, the operating
margin amounted to 815 million euros, up by 31.0% compared to H1
2020. This represents an operating margin rate of 16.5% in the
first half 2021, up by 350 basis points from 13.0% in H1 2020 and
by 150 basis points from the 15.0% in H1 2019 (excluding Epsilon’s
transaction costs).
Operating margin rates by
geographies were 19.2% in North America, 11.0% in Europe, 19.4% in
Asia-Pacific, 5.3% in Middle East/Africa and 2.0% in Latin
America.
Amortization of intangibles
arising from acquisitions totaled 126 million euros in H1 2021,
down by 16 million euros versus H1 2020. Impairment losses amounted
to 92 million euros, a reduction of 139 million euros versus H1
2020. This decrease reflects the advanced stage of the Groupe’s
real estate consolidation plan "All in One", which is leading to a
reduction in the number of sites, while allowing better
collaboration between the teams. In addition, net non-current
income is positive at 1 million euros compared to 5 million euros
in H1 2020.
Operating income totaled 598
million euro in H1 2021, after 254 million euro in H1
2020.
The financial result,
comprising the cost of net financial debt and other financial
charges and income, is a charge of 55 million euros in H1 2021
compared to 90 million euros last year. The net charge on net
financial debt was 45 million euros in H1 2021, including 40
million euros related to Epsilon’s acquisition debt. It compared to
a charge of 48 million euros in H1 2020. Other financial income and
expenses were a charge of 5 million euros in H1 2021, notably
composed by 35 million euros interest on lease liabilities and 32
million in income from the fair value remeasurement of Mutual
Funds. In H1 2020, other financial income and expenses were a
charge of 44 million euros, including 40 million euros of interest
on lease obligations and a charge of 4 million euros from the fair
value remeasurement of Mutual Funds.
The revaluation of earn-out
payments amounted to a charge of 5 million euros at end-June,
compared to an income of 2 million euros in H1 2020.
The tax charge is 135 million
euros in H1 2021, corresponding to a forecast effective tax rate of
24.7% in 2021, compared to 39 million euros in H1 2020,
corresponding to a forecast effective tax rate of 25.0% in
2020.
The share in the profit of
associates is not significant in H1 2021, compared to a loss of 2
million euros in H1 2020.
Minority interests were a loss
of 6 million euros in Groupe results in H1 2021 compared to a loss
of 13 million euros in the previous year.
Overall, net income
attributable to the Groupe was 414 million euros at June 30, 2021,
compared to 136 million euro at June 30, 2020.
Free Cash Flow
EUR million
H1 2021
H1 2020
EBITDA
1,052
923
Repayment of lease liabilities and related
interests
(179)
(234)
Investments in fixed assets (net)
(50)
(73)
Financial interest paid (net)
(82)
(81)
Tax paid
(163)
(74)
Other
27
34
Free cash-flow before changes
in WCR
605
495
The Groupe’s free cash flow,
before change in working capital requirements, is up strongly, by
110 million euros compared to H1 2020, at 605 million euros.
Repayment of lease liabilities and related interests amounted to
179 million euros. Net investments in fixed assets have decreased
by 23 million euros. Financial interest paid mostly include
interests on the acquisition debt of Epsilon, and totalled 82
million euros. Tax paid amounted to 163 million euros, up compared
to 74 million euros in H1 2020. This reflects both the rise in the
Groupe operating income and a catch up effect from some
postponements in 2020 for tax payment in several
countries.
Net debt
Net financial debt amounted to
1,362 million euros as of June 30, 2021 compared to 833 million
euros as of December 31, 2020. The Groupe's average net debt in H1
2021 amounted to 1,616 million euros compared to 3,684 million
euros in H1 2020.
ACQUISITIONS AND DISPOSALS
There was no significant transaction on the period.
POST CLOSING EVENT
On July 15, 2021, Publicis announced the acquisition of
CitrusAd, a software as a service (SaaS) platform optimizing brands
marketing performances directly within retailer websites.
CitrusAd’s onsite expertise complemented with Epsilon’s offsite
retail media offering, both powered by the CORE ID, uniquely
positions Publicis Groupe to lead the new generation of
identity-led retail media, with transparent measurement validated
by transaction.
In a fast-growing retail media channel set to double in the next
5 years from c. $30bn annually already, this will enable Publicis
Groupe clients to accelerate their growth in this dynamic channel,
give them full visibility on the consolidated performance of their
media investments and an unparalleled access to highly-qualified
first-party data from retailers, equipping them for a cookieless
world.
OUTLOOK
In the first half 2021, the Groupe totally recovered the revenue
lost in the same period in 2020, posting a +9.7% organic growth
after -8.0% in H1 2020, thanks to the strength of its model in an
overall improving business environment.
For the full year 2021 and assuming no major deterioration in
health situation, the Groupe now expects to be in a position to
fully recover its 2020 organic decline of -6.3%, one year ahead of
its initial expectations. This implies an organic growth of 7% for
2021.
Regarding operating margin, the Groupe upgrades its guidance for
the full year 2021 after an exceptionally strong performance in the
first half. 2021 operating margin will come back to pre-pandemic
levels, at 17%, while the Groupe will continue to invest in talents
and product in the second half, to prepare future growth.
The Groupe also upgrades its 2021 guidance for Free Cash Flow
before working capital requirement, which will be between 1.2
billion euros and 1.3 billion euros, further contributing to the
Groupe deleveraging.
CSR
Publicis Groupe has continued making progress on its CSR
roadmap, particularly in subjects of leading priority.
In March 2021, Publicis Groupe's climate change targets for 2030
were validated by the Science Based Targets initiative (SBTi). The
Groupe wants to achieve carbon neutrality by 2030. The action plan
to do this is based on three levers; the drastic reduction of all
impacts by 47% for scopes 1 & 2 and by 14% for scope 3, the use
of 100% renewable energy from direct sources before 2030 and, as a
last resort, the use of carbon offsetting for unavoidable impacts.
In addition, our proprietary tool for evaluating the impacts of
campaigns and projects, A.L.I.C.E (Advertising Limiting Impacts
& Carbon Emissions), is currently being deployed in order to
better assist clients in these areas.
The global pandemic has accelerated the digital transformation
of the Groupe's customers, who must also integrate sustainability
issues into their activities. Climate change and social justice
issues are now important in the criteria of citizen-consumers when
they make their choices. At the same time, and as the European
regulatory context progresses, we observe stronger expectations for
the future being expressed by stakeholders, with more precise
questions coming from investors and shareholders. In this context,
Publicis Groupe announced on 26 May 2021 the creation of a new
Supervisory Board committee dedicated to environmental, societal
and stakeholder issues; this ESG Committee is chaired by Suzy
LeVine.
Equality and inclusion, the fight against racism and for social
justice remained central during the first half of the year. On 2
and 3 June 2021, the 'Pause For Action' days were held for the
second year and provided an opportunity to share progress and good
practice across the Groupe in the areas of diversity, equality and
inclusion, and to discuss the day-to-day work that is essential in
agencies in terms of talent retention and career development. The
2nd of June was dedicated to a global review of the current
situation and practices, and the 3rd of June was dedicated to the
situation in the United States.
Employee health remained a strong internal focus, with different
situations between countries and sometimes painful consequences for
our employees, such as in India where many of our employees were
severely affected. The protection of all employees is an absolute
priority, by following national confinement guidelines and
recommended barrier actions. Local HR/Talent teams remain vigilant
with highly structured recovery plans, ensuring that teleworking is
combined with a gradual return to the office at various sites where
possible.
The Marcel internal platform has become a unifying space, with
quarterly plenary sessions led by Arthur Sadoun, Chairman of the
Management Board, and monthly sessions with country managers and
their Comexes. During this period of uncertainty, the objective is
to maintain a close and regular link with all employees and to
answer their questions. Employees have continued to benefit from
individual support programmes to look after their physical and
mental health, and have wide access to many online training
programmes.
In April 2021, Publicis Groupe announced a partnership between
the Women's Forum for the Economy & Society and the Positive
Economy Institute, as well as a change in the governance of the
Women's Forum with Audrey Tcherkoff, Executive Chair of the
Positive Economy Institute, also appointed Executive Director of
the Women's Forum. The creation of a Global Advisory Council has
also been launched in order to give even greater visibility to the
Women's Forum initiatives.
In June 2021, VivaTech took place in a hybrid format, with a
physical event gathering more than 26,000 participants in Paris
(capacity restricted for health reasons), and digital sessions
during 3 days gathering more than 100,000 participants including
prestigious guests from the Tech industry and innovative
start-ups.
The CSR actions of the Groupe and its agencies are publicly
accessible in the CSR section of the Groupe's website, and the data
is summarised in the CSR Smart data section.
* *
*
NEW BUSINESS
EUROPE
Pandora AS (Technology), Polestar Performance AB (Technology),
Nomad Foods (Media), La Poste (Creative), Société des Produits
Nestlé (Technology), Daimler (Technology), Unilever (Technology),
PMU (Technology), TUI Group (Creative), Groupe Casino (Creative),
SNCF (Creative), FNPCA - ARTISANAT (Creative), Procter & Gamble
(Creative), Etihad Airways (Media), Sephora (Data), April
(Technology), ABBVIE (Creative), France Télévisions (Data), Izneo
(Media), Enedis (Creative), G-Star (Creative), Zava (Technology),
Comic Relief (Creative), Brown Forman (Media), Vinted (Media),
DocMorris N.V. (Media), Reckitt Benckiser (Media),
Media-Saturn-Holding GmbH (Creative), Raiffeisen Switzerland
(Creative), AFD (Creative), Sisley Paris (Data), Cilevel Partners
(Data), Carrefour (Data), Fnac Darty (Data), Engie (Data),
Printemps (Data), Adecco (Creative), KOMO (Media), Peek &
Cloppenburg KG (Digital), British Heart Foundation (Creative),
Lindt (Media), CNPA (Creative), Erhard (Creative), EvCon
(Creative), Maty (Creative), BNIC (Creative), Niantic (Digital), DP
World PLC (Media), Primark (Media), AVK (Creative), Thales Group
(Creative), Getin Bank (Media), Inserm (Media), Arterium
(Creative), Nestlé (Media), Hormel Foods VI (Design), Hormel Foods
VI (Design), Gojo Industries VI (Design), EON Performance Media
(Creative), DSM (Health), Jazz (Health), Getir (Creative), SEGRO
(Creative), Grant Thornton (Sustainability consultancy), LEGO
(Sustainability consultancy), Land Securities (Sustainability
consultancy), Purmo (Sustainability), Revolut (Creative), Makuake
(Creative), Biogen (Health), Roche (Health), Pfizer (Health),
Novartis (Health), P&G Pampers (Sustainability consultancy),
PUMA (Influence), Beiersdorf Nivea, Elastoplast and Eucerin
(Creative and Sustainability consultancy), Beko (Sustainability
consultancy), Mondelez Trident (Creative), Coty MaxFactor
(Creative)
NORTH AMERICA
Loblaw Digital (Technology), Verizon Wireless Digital
(Technology), Mercedes-Benz USA (Technology), National Cancer
Institute (Technology), Academy Sports & Outdoors (Technology),
Comcast Corporation (Technology), The Depository Trust &
Clearing Corp (Technology), Fiat Chrysler Automobiles (Technology),
Sally Beauty (Media), Inspire Brands (Media), Samsung (Creative),
Alcohol and Gaming Commission of Ontario (Creative), Unilever
(Creative), Procter & Gamble (Creative), Hut 8 Bitcoin Mining
(Creative), Mercedes-Benz (Creative), MacDonald, Dettwiler and
Associates Inc (Creative), Humana (Media), Sony Interactive
Entertainment (Creative), Region of Peel (Creative), Infiniti
(Creative), National Ovarian Cancer Coalition Inc. (Digital),
Zoetis (Digital), Belcorp (Media), Coventry Direct (Digital),
Mission Lane (Digital), Samsung (Creative), Marriott International
(Technology), Mackenzie Investments (Creative), Goodfood Market
Corp (Creative), Binge Corporation (Creative), Ritual Co
(Creative), Greater Toronto Airports Authority (Creative), Addaday
Intelligent Technologies LLC (Digital), Wisk Aero (Creative), Grupo
Bimbo (Creative), Facebook (Creative)
ASIA PACIFIC/MEA
Garena Online (Creative), PRC - Martell (Creative), L'Oréal
(Media & Creative), Yili (Creative), Yinlu (Creative), Capital
Foods (Creative), Diageo (Creative), Yinlu (Creative), Others
(Creative), Ecco (Creative), AXA (Creative), Samsung (Digital &
Creative), Penang South Island (Power of One), Spotify (Creative),
AMC (Creative), Mercedes-Benz (Creative), Nestlé Content
(Production), Medgulf (Creative), Essilor (Creative), Nestlé Total
(Wyeth) (Power of One), Sephora (Creative), Toyota Motor
Corporation (Creative & Media), Disney Studios / Disney +
(Media), Disney + (Creative), DBS (Media), Great Eastern
(Creative), Pet Culture Group Pty Limited (Media), Estee Lauder
(Commerce), Ontex (Creative), Others (Creative), GSK (Creative),
Godrej Pro Clean (Creative), MamaEarth (Media), Danone (Commerce),
Thai Oil PCL (Creative), AB InBev (Creative), J&J (Commerce),
Disney+ SEA (Media), Expedia (Creative), Wing (Creative), Lazada
(Creative), SAIC R-Car (Creative), STB (Media), Israel Railways
(Creative), Vivo (Creative), Pechoin (Creative), E carX (Creative),
Exxon (Creative), Karaca (Media), NPCI (Creative), Insourcing
(Production), Kalpataru Builders (Creative), Mavi (Creative), Hyatt
(Media), Nestlé (Creative), Tiger Brands (Creative), Arrow
Electronics (Digital), Infiniti (Creative), Aier eye hospital
(Creative), Hikvision (Creative), KRAFTON Creative), Mayo
(Creative), SAIC Volkswagen (Creative), Zhiji Motors (Creative),
Procter & Gamble (Creative), Nestlé (Creative), VSA Health
& Wellness Pvt. Ltd (Commerce), Beiersdorf (Commerce)
LATAM
Grupo SURA (Data), Banco Bradesco (Creative), Citigroup
(Production), Pfizer (Creative), Astrazeneca (Creative), Compania
Nacional de Chocolates de Peru S.A. (Creative), Visa (Creative),
Grupo Nutresa (Creative), Mercedes-Benz (Creative), Heineken
(Creative), PepsiCo (Digital), Grupo Bimbo (Creative), Procter
& Gamble (Creative & Data), Abastece ai (Creative), Tiger
(Creative), Ypê (Creative), Enjoei (Creative), Gavilon (Creative),
Nissan Motor Corporation (Creative), Merck Sharp & Dohme Corp.
(Creative), Civica Pay (Creative & Media), Merck & Co
(Creative), TikTok (Media), Groupe Renault (Media), Shopee (Media),
Bacio di Latte (Media)
GLOBAL
AB InBev (Data), Nissan Motor Corporation – Infiniti (Creative),
Stellantis (Media)
* *
*
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), including an unfavorable economic
climate, a highly competitive industry, risks related to disruption
in the advertising and communication sector, risks related to
employees, the possibility that our clients could seek to terminate
their contracts with us on short notice, risks of IT system
failures and cybercrime, risks associated with mergers and
acquisitions, risks associated with the confidentiality of personal
data, risks of litigation, governmental, legal and arbitration
proceedings, risks associated with the Groupe’s financial rating
and exposure to liquidity risks.
About Publicis Groupe - The Power of One
Publicis 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
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Appendices
Net revenue: organic growth
calculation
(million euro)
Q1
Q2
6 months
Impact of currency at end June
2021 (million euro)
2020 net revenue
2,481
2,293
4,774
GBP (2)
3
Currency impact (2)
(151)
(125)
(276)
USD (2)
(245)
2020 net revenue at 2021 exchange rates
(a)
2,330
2,168
4,498
Others
(35)
2021 net revenue before acquisition impact
(1) (b)
2,395
2,537
4,932
Total
(276)
Net revenue from acquisitions (1)
(3)
2
(1)
2021 net revenue
2,392
2,539
4,931
Organic growth (b/a)
+2.8%
+17.1%
+9.7%
(1) Acquisitions (Third Horizon, Octopus, Balance Internet,
Taylor Herring) net of disposals (PC Epsilon Fitness, Sirius,
Found).
(2) EUR = USD 1.202 on average in H1 2021 vs. USD 1.101 on
average in H1 2020
EUR = GBP 0.866 on average in H1 2021 vs. GBP 0.873 on average
in H1 2020
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, the impact of US tax
reform, the revaluation of earn-out costs and Epsilon transaction
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.
Average net debt: Average of monthly net debt at end of
month.
Dividend pay-out: Dividend per share / Headline diluted
EPS.
Recovery ratio: calculated as 100 x [1 + organic growth
(n-1)] x [1 + organic growth (n)].
Consolidated income statement
(in millions of euros)
June 30, 2021 (6
months)
June 30, 2020 (6
months)
December 31, 2020 (12
months)
Net revenue10
4,931
4,774
9,712
Pass-through revenue
562
504
1,076
Revenue
5,493
5,278
10,788
Personnel costs
Other operating costs
(3,174)
(1,267)
(3,224)
(1,131)
(6,242)
(2,388)
Operating margin before depreciation
& amortization
1,052
923
2,158
Depreciation and amortization expense
(excluding acquisition-related intangible
assets)
(237)
(301)
(600)
Operating margin
815
622
1,558
Amortization of intangibles from
acquisitions
(126)
(142)
(339)
Impairment loss
(92)
(231)
(241)
Non-current income and expenses
1
5
5
Operating income
598
254
983
Financial expense
Financial income
Cost of net financial debt
Other financial income and expenses
Revaluation of earn-out payments
(57)
12
(45)
(5)
(5)
(95)
47
(48)
(44)
2
(185)
66
(119)
(79)
(17)
Pre-tax income of consolidated
companies
543
164
768
Income taxes
(135)
(39)
(196)
Net income of consolidated
companies
408
125
572
Share of profit of associates
-
(2)
(1)
Net income
408
123
571
Of which:
- Net income attributable to
non-controlling interests
(6)
(13)
(5)
Net income attributable to equity
holders of the parent company
414
136
576
Per share data (in euros) - Net
income attributable to equity holders
of the parent company
Number of shares
246,106,455
237,468,157
239,838,347
Earnings per share
1,68
0.57
2.40
Number of diluted shares
248,475,342
238,280,061
241,926,553
Diluted earnings per share
1,67
0.57
2.38
Consolidated statement of comprehensive income
(in millions of euros)
June 30, 2021
(6 months)
June 30, 2020 (6
months)
December
31, 2020 (12 months)
Net income for the period
(a)
408
123
571
Comprehensive income that will not be
reclassified to income statement
- Actuarial gains (and losses) on defined
benefit plans
24
(24)
(20)
- Deferred taxes on comprehensive income
that will not be reclassified to income statement
(6)
4
3
Comprehensive income that may be
reclassified to income statement
- Remeasurement of hedging instruments
17
(134)
(89)
- Consolidation translation
adjustments
233
(133)
(633)
Total other comprehensive income
(b)
268
(287)
(739)
Total comprehensive income for the
period (a) + (b)
676
(164)
(168)
Of which:
- Total comprehensive income for the
period attributable to non-controlling interests
(6)
(10)
(7)
- Total comprehensive income for the
period attributable to equity holders of the parent company
682
(154)
(161)
Consolidated balance sheet
(in millions of euros)
June 30, 2021
December 31, 2020
Assets
Goodwill, net
11,175
10,858
Intangible assets, net
1,408
1,509
Right-of-use assets related to leases
1,544
1,645
Property, plant and equipment, net
607
626
Deferred tax assets
178
137
Investments in associates
23
24
Other financial assets
260
232
Non-current assets
15,195
15.031
Inventories and work-in-progress
277
230
Trade receivables
8,818
9,508
Assets on contracts
1,029
889
Other current receivables and assets
801
803
Cash and cash equivalents
2,959
3,700
Current assets
13,884
15,130
Total assets
29,079
30,161
Equity and
Liabilities
Share capital
101
99
Additional paid-in capital and retained
earnings, Group share
7,589
7,083
Equity attributable to holders of the
parent company
7,690
7,182
Non-controlling interests
(46)
(22)
Total equity
7,644
7,160
Long-term borrowings
3,461
3,653
Long-term lease liabilities
1,819
1,850
Deferred tax liabilities
235
247
Long-term provisions
493
468
Non-current liabilities
6,008
6,218
Trade payables
11,330
12,887
Liabilities on contracts
347
404
Short-term borrowings
834
856
Short-term lease liabilities
295
292
Income taxes payable
343
296
Short-term provisions
234
234
Other creditors and current
liabilities
2,044
1,814
Current liabilities
15,427
16,783
Total equity and liabilities
29,079
30,161
Consolidated statement of cash flows
(in millions of euros)
June 30, 2021
(6 months)
June 30, 2020
(6 months)
December
31, 2020 (12
months)
Cash flow from operating
activities
Net income
408
123
571
Neutralization of non-cash income and
expenses:
Income taxes
135
39
196
Cost of net financial debt
45
48
119
Capital losses (gains) on disposal of
assets (before tax)
(1)
(5)
(6)
Depreciation, amortization and impairment
loss
455
674
1,180
Share-based compensation
25
28
55
Other non-cash income and expenses
11
47
94
Share of profit of associates
-
2
1
Dividends received from associates
2
2
2
Taxes paid
(163)
(74)
(293)
Change in working capital
requirements(1)
(1,191)
(853)
1,047
Net cash flows generated by (used in)
operating activities (I)
(274)
31
2,966
Cash flow from investing
activities
Purchases of property, plant and equipment
and intangible assets
(50)
(83)
(167)
Disposals of property, plant and equipment
and intangible assets
-
10
12
Purchases of investments and other
financial assets, net
4
(7)
(9)
Acquisitions of subsidiaries
(77)
(37)
(146)
Disposals of subsidiaries
-
2
1
Net cash flows generated by (used in)
investing activities (II)
(123)
(115)
(309)
Cash flow from financing
activities
Dividends paid to holders of the parent
company
-
-
(102)
Dividends paid to non-controlling
interests
(2)
(4)
(10)
Proceeds from borrowings(2)
1
2,091
2
Repayment of borrowings(2)
(190)
(1,436)
(1,302)
Repayment of lease liabilities
(144)
(194)
(384)
Interest paid on lease liabilities
(35)
(40)
(77)
Interest paid
(94)
(106)
(184)
Interest received
12
25
71
Buy-out of non-controlling interests
(4)
-
(10)
Net (buybacks)/sales of treasury shares
and warrants
9
3
8
Net cash flows generated by (used in)
financing activities (III)
(447)
339
(1,988)
Impact of exchange rate fluctuations
(IV)
102
75
(379)
Change in consolidated cash and cash
equivalents (I + II + III + IV)
(742)
330
290
Cash and cash equivalents on January 1
3,700
3,413
3,413
Bank overdrafts on January 1
(3)
(6)
(6)
Net cash and cash equivalents at
beginning of year (V)
3,697
3,407
3,407
Cash and cash equivalents at closing
date
2,959
3,743
3,700
Bank overdrafts at closing date
(4)
(6)
(3)
Net cash and cash equivalents at end of
the year (VI)
2,955
3,737
3,697
Change in consolidated cash and cash
equivalents (VI - V)
(742)
330
290
- Breakdown of change in working capital requirements
Change in inventory and
work-in-progress
(32)
67
139
Change in trade receivables and other
receivables
847
2,605
(24)
Change in accounts payable, other payables
and provisions
(2,006)
(3,525)
932
Change in working capital
requirements
(1,191)
(853)
1,047
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
Translation
reserve
Fair value
reserve
Equity
attributable
to equity
holders of
the parent company
Non-controlling
interests
Total equity
245,577,779
December 31, 2020
99
4,307
3,585
(816)
7
7,182
(22)
7,160
Net income
414
414
(6)
408
Other comprehensive income, net
of tax
233
35
268
268
Total comprehensive income for
the period
-
-
414
233
35
682
(6)
676
5,018,232
Dividends
2
264
(493)
(227)
(2)
(229)
296,350
Share-based compensation, net of
tax
28
28
28
Effect of acquisitions and
commitments to buy out non-controlling interests
16
16
(16)
0
241,301
Equity warrant exercise
0
7
7
7
698,159
(Buybacks)/sales of treasury
shares
2
2
2
251,831,821
June 30, 2021
101
4,578
3,552
(583)
42
7,690
(46)
7,644
Number of outstanding
shares
(in millions of euros)
Share capital
Additional
paid-in capital
Reserves
and
earnings
brought forward
Translation
reserve
Fair value
reserve
Equity
attributable
to equity
holders of
the parent company
Non-controlling
interests
Total equity
236,956,827
December 31, 2019
96
4,137
3,240
(185)
113
7,401
(9)
7,392
Net income
136
136
(13)
123
Other comprehensive income, net
of tax
(136)
(154)
(290)
3
(287)
Total comprehensive income for
the period
-
-
136
(136)
(154)
(154)
(10)
(164)
Dividends
(273)
(273)
(4)
(277)
274,325
Share-based compensation, net of
tax
28
28
28
Effect of acquisitions and
commitments to buy out non-controlling interests
0
0
2
2
1,602
Equity warrant exercise
-
0
0
0
0
1,164,001
(Buybacks)/sales of treasury
shares
28
28
28
238,396,755
June 30, 2020
96
4,137
3,159
(321)
(41)
7,030
(21)
7,009
Earnings per share (basic and diluted)
(in millions of euros, except for share
data)
June 30, 2021
June 30, 2020
Net income used for the calculation of
earnings per share
Net income attributable to equity holders
of the parent company
A
414
136
Impact of dilutive instruments:
- Savings in financial expenses related to
the conversion of debt instruments, net of tax
-
-
Group net income – diluted
B
414
136
Number of shares used to calculate
earnings per share
Number of shares at January 1
247,769,038
240,437,061
Shares created over the period
205,975
46,238
Treasury shares to be deducted (average
for the period)
(1,868,558)
(3,015,142)
Average number of shares used for the
calculation
C
246,106,455
237,468,157
Impact of dilutive instruments:
- Free shares and dilutive stock
options
2,201,787
714,961
- Equity warrants (BSA)
167,100
96,943
Number of diluted shares
D
248,475,342
238,280,061
(in euros)
Earnings per share
A/C
1.68
0.57
Diluted earnings per share
B/D
1.67
0.57
Headline earnings per share (basic and diluted)
(in millions of euros, except for share
data)
June 30, 2021
June 30, 2020
Net income used to calculate headline
earnings per share(1)
Group net income
414
136
Items excluded:
- Amortization of intangibles from
acquisitions, net of tax
94
107
- Impairment loss, net of tax
70
173
- Revaluation of earn-out payments
5
(2)
- Main capital gains (losses) on disposal
of assets and fair value adjustment of financial assets, net of
tax
(28)
3
Headline Group net income
E
555
417
Impact of dilutive instruments:
- Savings in financial expenses related to
the conversion of debt instruments, net of tax
-
-
Headline Group net income, diluted
F
555
417
Number of shares used to calculate
earnings per share
Number of shares at January 1
247,769,038
240,437,061
Shares created over the period
205,975
46,238
Treasury shares to be deducted (average
for the period)
(1,868,558)
(3,015,142)
Average number of shares used for the
calculation
C
246,106,455
237,468,157
Impact of dilutive instruments:
- Free shares and dilutive stock
options
2,201,787
714,961
- Equity warrants (BSA)
167,100
96,943
Number of diluted shares
(in euros)
D
248,475,342
238,280,061
Headline earnings per share(1)
E/C
2.26
1.76
Headline earnings per share –
diluted(1)
F/D
2.23
1.75
- 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.
- As of June 30, 2021, the main capital gains and losses on
disposal amount to euro 1 million and the fair value adjustement of
financial assets amounts to euro 27 million. As of June 30, 2020,
the fair value adjustment of financial assets amounted to euro (3)
million.
1 Before change in working capital requirements 2 Source:
COMvergence 3 Recovery ratio calculated as: 100 * [1 + organic
growth (n-1)] * [1 + organic growth (n)] 4 +16.9% excluding outdoor
media activities and the Drugstore, i.e. a 97% recovery ratio 5
Excluding outdoor media activities and the Drugstore 6 Recovery
ratio calculated as: 100 * [1 + organic growth (n-1)] * [1 +
organic growth (n)] 7 +9.7% excluding outdoor media activities and
the Drugstore, i.e. a 96% recovery ratio 8 Recovery ratio
calculated as: 100 * [1 + organic growth (n-1)] * [1 + organic
growth (n)] 9 Excluding outdoor media activities and the Drugstore
10 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 Group’s operational
performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210721005986/en/
Publicis Groupe
Delphine Stricker Corporate Communications + 33 (0)6 38 81 40 00
delphine.stricker@publicisgroupe.com
Alessandra Girolami Investor Relations + 33 (0)1 44 43 77 88
alessandra.girolami@publicisgroupe.com
Brice Paris Investor Relations + 33 (0)1 44 43 79 26
brice.paris@publicisgroupe.com
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