Upgrade of FY 2022 guidance on all
KPIs
- Q2 reported growth of +21%
- Q2 organic growth at +10.3% after +17.1% in Q2 2021
- Very solid performance across regions, with U.S. at +10.1%,
Europe +10.1%, Asia +6.5%
- Further acceleration of Publicis Sapient and Epsilon at
+19.1% and +13.7% respectively
- Continued momentum in New business with N°1 rank in broker
league tables
- Increase of Operating margin rate to 17.3%, up 80bps vs. H1
2021
- Headline EPS up +29% at €2.88 and Free Cash Flow up +17% at
€708m
- Upgrade of 2022 guidance: organic growth expected at +6% to
+7%, operating margin rate between 17.5% and 18%, Free Cash Flow at
least at €1.5bn
Regulatory News:
Publicis Groupe (Paris:PUB):
Q2 2022
Net revenue
€3,073m
Reported growth
+21.0%
Organic growth
+10.3%
H1 2022 Results
(EUR million)
H1 2022
2022 vs 2021
Revenue
6,547
+19.2%
Net revenue
5,873
+19.1%
Organic growth
+10.4%
EBITDA
1,287
+22.3%
Operating margin
1,018
+24.9%
Operating margin rate
17.3%
Headline Groupe net income
727
+31.0%
Headline diluted EPS (euro)
2.88
+29.1%
Free Cash Flow1
708
+17.0%
Arthur Sadoun, Chairman and CEO of Publicis Groupe:
“H1 2022 came in at an all-time high for the Groupe on all
KPIs.
Our reported net revenue growth in the first half was at +19.1%.
It was up +10.4% on an organic basis, implying +11.3% on a 3-year
basis, versus pre-pandemic levels.
After a strong start to the year, we recorded in Q2 an increase
of +21% of our net revenue and an organic growth of +10.3%, way
beyond expectations.
There are three reasons behind this remarkable performance,
which comes on top of +17.1% organic growth in Q2 last year. First,
very solid growth across all regions, with the U.S and Europe at
+10%, and Asia at +6.5%, with China remaining positive despite the
lockdowns. Second, further acceleration at Publicis Sapient and
Epsilon which grew +19.1% and +13.7% respectively, confirming our
ability to capture the shift of client investment towards data,
technology and digital business transformation. Last but not least,
we benefitted from the ramp-up of our New Business, after a record
number of wins in 2021. Our momentum since the beginning of the
year continues to place us at the top of the New Business rankings
for the past 12 months, in the latest broker reports.
At the same time, our financial ratios reached new historic
heights in the first half of the year thanks to the uniqueness of
our operating model. Our margin came in at 17.3%, and headline EPS
increased by close to 30%. This performance, combined with our
better visibility on a solid H2 and the strength of our model, make
us confident for the future. We are therefore upgrading our
guidance on all KPIs for 2022, with an organic growth now expected
between +6% to +7% for 2022, an operating margin rate between 17.5%
and 18% and a Free Cash Flow at least at 1.5 billion euros.
Looking ahead, we are ready to face the ongoing uncertainties
caused by the macro-economic context, thanks to our unique
capabilities to help our clients weather any potential challenges
and by leveraging our agile platform organization to sustain
industry-high financial ratios.
I would like to thank our clients for their trust, and our
people for their incredible efforts, which have led us to these
extremely strong results.”
* *
*
Publicis Groupe’s Supervisory Board met on July 20th, 2022,
under the chairmanship of Maurice Lévy, to examine the 2022 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 2022
H1 2021
2022
vs 2021
Data from the Income Statement and Cash
flow Statement
Net revenue
5,873
4,931
+19.1%
Pass-through revenue
674
562
+19.9%
Revenue
6,547
5,493
+19.2%
EBITDA
1,287
1,052
+22.3%
% of Net revenue
21.9%
21.3%
+60bps
Operating margin
1,018
815
+24.9%
% of Net revenue
17.3%
16.5%
+80bps
Operating income
761
598
+27.3%
Net income attributable to the
Groupe
537
414
+29.7%
Earnings Per Share (EPS)
2.15
1.68
+28.0%
Headline diluted EPS2
2.88
2.23
+29.1%
Free Cash Flow before change in
working capital requirements
708
605
+17.0%
Data from the Balance
Sheet
June 30, 2022
Dec 31, 2021
Total assets
34,392
32,846
Groupe share of Shareholders’
equity
9,314
8,588
Net debt (net cash)
464
76
NET REVENUE IN Q2 2022
Publicis Groupe’s net revenue in Q2 2022 was 3,073 million
euros, up +21.0% from 2,539 million euros in 2021. Exchange rates
had a positive impact of 229 million euros. Acquisitions, net of
disposals, accounted for an increase in net revenue of 21 million
euros. Organic growth reached +10.3%.
Breakdown of Q2 2022 Net
revenue by region
EUR
Net revenue
Reported
Organic
million
Q2 2022
Q2 2021
Growth
Growth
North America
1,912
1,527
+25.2%
+10.3%
Europe
709
634
+11.8%
+10.1%
Asia Pacific
289
253
+14.2%
+6.5%
Middle East & Africa
90
71
+26.8%
+15.3%
Latin America
73
54
+35.2%
+20.7%
Total
3,073
2,539
+21.0%
+10.3%
North America net revenue was up +25.2% on a reported
basis in Q2 2022, including a significant positive impact of the US
dollar to Euro exchange rate. Organic growth in the region was
+10.3%. In the U.S., organic growth came at +10.1%,
confirming the country’s strong dynamic in all its activities.
Media posted double-digit growth, while Creative activities saw
their net revenue grow in the high-single digits, with notably
strong Production. Publicis Sapient grew +17.2% organically, as the
demand for business transformation continued to accelerate. Epsilon
grew +13.7% organically, as its Automotive division returned to
positive territory, and with double-digit growth in all other
divisions (Digital Media, Technology, Data). Canada was up
+15.6% organically.
Net revenue in Europe was up by +11.8% on a reported
basis. It was up by +10.1% on an organic basis, or +10.7% excluding
the contribution of our Outdoor Media activities & the
Drugstore. Organic growth in the U.K. was +15.5%, with a
notable double-digit growth in Media and strong expansion at
Publicis Sapient thanks to new business wins contribution. Organic
growth in France was +9.3%3 with strong growth in Media and
at Publicis Sapient. Germany was up +6.5% organically with
strong growth in Media and sequential improvement at Publicis
Sapient, posting positive growth. Central & Eastern
Europe grew +6.4% organically despite activity being stopped in
Ukraine, thanks to double-digit growth in Poland,
Romania and Turkey.
Net revenue in Asia Pacific was +14.2% on a reported
basis, and +6.5% organically. Despite lockdowns in several cities,
China was positive at +2.7% organic growth, supported by New
Business. India, Australia and New Zealand
were up strongly, particularly thanks to Media, and Thailand
performed well again thanks to Publicis Sapient.
In Middle East & Africa, net revenue was up +26.8% on
a reported basis, and +15.3% organically. Organic growth was
largely driven by Creative activities, and by Publicis Sapient in
the Middle-East and Media in Africa.
Net revenue in Latin America was up +35.2% on a reported
basis, and +20.7% organically, with most countries reporting
double-digit growth this quarter, largely driven by Media.
NET REVENUE IN H1 2022
Publicis Groupe’s net revenue for the first half 2022 was 5,873
million euros, up by +19.1% compared to 4,931 million euros in H1
2021. Exchange rate variations over the period had a positive
impact of 354 million euros. Acquisitions (net of disposals) have a
positive impact of 40 million euros on net revenue. Organic growth
was +10.4% in H1 2022.
Breakdown of H1 2022 net revenue by sector
Automotive
15%
Financial
15%
TMT
13%
Healthcare
13%
Food and beverage
12%
Non Food consumer products
12%
Retail
9%
Public sectors & Others
4%
Leisure & travel
4%
Energy & Manufacturing
3%
On the basis of 3,267 clients representing
91% of Groupe net revenue
Breakdown of H1 2022 net
revenue by region
EUR
Net revenue
Reported
Organic
million
H1 2022
H1 2021
growth
growth
North America
3,660
3,032
+20.7%
+9.3%
Europe
1,371
1,195
+14.7%
+12.3%
Asia Pacific
550
470
+17.0%
+10.1%
Middle East & Africa
165
133
+24.1%
+14.5%
Latin America
127
101
+25.7%
+17.3%
Total
5,873
4,931
+19.1%
+10.4%
Net revenue in North America was up by +9.3% on an
organic basis in the first half (+20.7% on a reported basis
including the positive impact of the US Dollar/ Euro exchange
rate). The U.S. performed strongly at +9.1%
organically reflecting a solid Q1 at +8.0% and +10.1% in Q2.
Europe posted +12.3% organic growth in H1 (+14.7% 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 +10.1%. The U.K. was at +13.8% organic,
France at +10.7%4, Germany at +3.9% and Central
& Eastern Europe at +10.4%.
Asia Pacific net revenue was up by +10.1% on an organic
basis (+17.0% reported). China reported an organic growth of
+6.0%, Australia & New Zealand were up by +10.1% on an
organic basis and India by +9.5%.
Net revenue in the Middle East and Africa region was up
by +14.5% on an organic basis (+24.1% reported).
Net revenue in Latin America was up by +17.3% on an
organic basis (+25.7% reported). Brazil grew by +17.1%
organically and Mexico was at +7.4%.
ANALYSIS OF H1 2022 KEY FIGURES
Income Statement
EBITDA amounted to 1,287 million euros in H1 2022,
compared to 1,052 million euros in H1 2021, up by +22.3%. This
translates into a margin rate of 21.9% of net revenue (up 60 basis
points compared to H1 2021).
- Personnel costs totaled 3,888 million euros at June 30,
2022, up by +22.5% from 3,174 million euros in H1 2021, as the
Groupe continued to invest in its talent. As a percentage of net
revenue, personnel expenses were 66.2% in H1 2022, versus 64.4% in
H1 2021. Fixed personnel costs were 3,375 million euros and
represented 57.5% of net revenue versus 56.4% in H1 2021. The cost
of freelancers increased by 64 million euros in H1 2022, reflecting
the strong activity uplift, representing 233 million euros.
Restructuring costs were 30 million euros, up versus 12 million
euros in H1 2021.
- Other operating expenses (excluding depreciation &
amortization) amounted to 1,372 million euros, compared to 1,267
million euros in H1 2021. This represents 23.4% of net revenue
compared to 25.7% in H1 2021, improving by 230 basis points. The
agile structure of the Groupe allowed to contain G&A costs in a
context of top line increase. In addition, the accounting treatment
linked to the renewal of two large outdoor media contracts for 5
and 10 years, as mentioned in 2021 accounts, resulted in a
technical 80 basis point impact, entirely offset in depreciation;
those contracts having been accounted for as cost of sales in 2021
are now accounted for as right of use and lease liability leading
to depreciation.
Depreciation and amortization charge was 269 million
euros in H1 2022 compared to 237 million euros in H1 2021, up by
13.5%, or 32 million euros. This rise reflects the combination of
foreign exchange rates, the offsetting of the Outdoor Media
contract renewal described above, partly mitigated by our actions
over the last years to optimize our real estate footprint and our
decision to expense rather than capitalize some IT costs.
Given the neutral impact of the accounting treatment of the two
outdoor media contracts on operating expenses including
depreciation, the Groupe operating leverage represents 250 basis
points.
As a result, the operating margin amounted to 1,018
million euros, up by +24.9% compared to H1 2021. This represents an
operating margin rate of 17.3% in H1 2022, up by 80 basis points
from 16.5% in H1 2021.
Operating margin rates by geographies were 19.2% in North
America, 13.3% in Europe, 20.9% in Asia-Pacific, 5.5% in Middle
East/Africa and 7.1% in Latin America.
Amortization of intangibles arising from acquisitions
totaled 137 million euros in H1 2022, up by 11 million euros versus
H1 2021. Impairment losses or real estate consolidation charge,
linked to the Groupe’s real estate consolidation plan “All in One”,
amounted to 44 million euros, a reduction of 48 million euros
versus H1 2021.
In addition, non-current expense was at 76 million euros
compared to an income of 1 million euros in H1 2021. This item
includes a 87 million euros loss linked to the Groupe’s exit from
Russia as announced in March 2022.
Operating income totaled 761 million euro in H1 2022, after 598
million euro in H1 2021.
The financial result, comprising the cost of net financial debt
and other financial charges and income, is a charge of 44 million
euros in H1 2022 compared to 55 million euros last year.
- The net charge on net financial debt was 27 million euros in H1
2022. This included 49 million euros largely of interest related to
Epsilon’s acquisition debt, partly mitigated by interest income of
29 million euros, a 17 million euros increase compared to H1 2021
that reflected higher cash balances and interest rates, in
particular in the U.S. It compared to a charge of 45 million euros
in H1 2021.
- Other financial income and expenses were a charge of 13 million
euros in H1 2022, notably composed by 45 million euros interest on
lease liabilities and 34 million in income from the fair value
remeasurement of Mutual Funds. In H1 2021, 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.
The revaluation of earn-out payments amounted to a charge of 4
million euros at end-June, broadly in line with the 5 million euros
charge in H1 2021.
The tax charge is 189 million euros in H1 2022, corresponding to
a forecast effective tax rate of 23.4% in 2022, compared to 135
million euros in H1 2021, corresponding to a forecast effective tax
rate of 24.7%.
The share in the profit of associates is 5 million in H1 2022,
while it was non significant in H1 2021.
Minority interests were a loss of 4 million euros in Groupe
results in H1 2022 compared to a loss of 6 million euros in the
previous year.
Overall, net income attributable to the Groupe was 537 million
euros at June 30, 2022, compared to 414 million euro at June 30,
2021.
Free Cash Flow
EUR million
H1 2022
H1 2021
EBITDA
1,287
1,052
Repayment of lease liabilities and related
interests
(215)
(179)
Investments in fixed assets (net)
(82)
(50)
Financial interest paid (net)
(63)
(82)
Tax paid
(251)
(163)
Other
32
27
Free cash-flow before changes
in WCR
708
605
The Groupe’s free cash flow, before change in working capital
requirements, is up strongly, by 103 million euros compared to H1
2021, at 708 million euros. Repayment of lease liabilities and
related interests amounted to 215 million euros. Net investments in
fixed assets were 82 million euros, up from 50 million euros in H1
2021. Financial interest paid (mostly include interests on the
acquisition debt of Epsilon) totalled 63 million euros. Tax paid
amounted to 251 million euros, up compared to 163 million euros in
H1 2021. This increase reflected the higher profit before tax of
the company, in addition to diverse impact of which the true-up
effects of 2021 tax.
Net debt
Net financial debt amounted to 464 million euros as of June 30,
2022 compared to 76 million euros as of December 31, 2021. The
Groupe's last twelve months average net debt as of June 30, 2022
amounted to 1,024 million euros compared to 2,252 million euros as
of June 30, 2021.
ACQUISITIONS AND DISPOSALS
On March 8, 2022, Publicis finalized the acquisition of
Tremend, based in Bucharest (Romania), a fast-growing large
independent software engineering company. Tremend currently reaches
60 million of its clients’ end users with its proven technology and
will serve as the newest global delivery center for Publicis
Sapient, expanding its Digital Business Transformation
capabilities. With over 16 years of experience in product
engineering, Tremend has 650 strong software engineering talent
across high demand skills.
On March 15, 2022, Publicis announced its exit from
Russia, by ceding the ownership of its agencies to local
management. The Groupe handed over control of its Russian
operations to Sergey Koptev, Founding Chairman of Publicis in
Russia, with the clear contractual condition of ensuring a future
for its 1,200 employees there. The Groupe stopped its business and
investments in Russia, and the cession was effective immediately.
Our first quarter’s financial statements include a related 87
million euros exceptional disposal loss, and Russia was
deconsolidated from April 1st, 2022.
On May 3, 2022, Publicis announced the acquisition of
Profitero a leading SaaS global ecommerce intelligence platform
helping brands analyse and optimize their sales, marketing and
operations performance across more than 700 retail websites around
the world and 70 million products. Profitero’s products,
technology, and 300 employees will further scale and supercharge
Publicis Groupe’s existing commerce capabilities around the
world.
On June 14, 2022, Publicis announced the acquisition of
Wiredcraft, a digital product consultancy and technology company
focused on China and APAC, with offices in Shanghai and Singapore.
Wiredcraft brings together over 100 local and international experts
in technology, design, engineering, product management, consulting,
and data, to help global brands create and launch digital products.
Wiredcraft delivers solutions across digital transformation,
direct-to-consumer e-commerce and customer loyalty data.
CSR
Publicis Groupe continued to make progress on each of its major
priorities.
1 - Diversity, Equity and Inclusion: the 3rd edition of
"Pause for Action" in the United States on June 29, 2022 brought
together more than 13,000 employees committed to sharing and acting
on issues of inclusion, diversity and social justice. The data
published on the diversity of our teams in the United States shows
a positive evolution, even if it remains clear that efforts must be
relentlessly pursued, as the Chairman of the Management Board,
Arthur Sadoun, reminded us, particularly in terms of recruitment,
retention and promotion.
Employee health remained a concern with the gradual return to
face-to-face work in most of the countries gradually emerging from
the pandemic. Employee protection is a priority in all entities,
and local HR/Talent teams remain vigilant in combining
telecommuting and return to the office to facilitate a hybrid work
environment.
Marcel, Publicis Groupe's internal platform has reached a 90%
adoption rate and is central in several ways. On the one hand, it
is the place for large-scale exchanges, where internal events such
as "Pause For Action" or the quarterly plenary sessions led by the
country managers and their leaders take place. On the other hand,
with Marcel Classes, employees can access a constantly enriched
training offer and are now offered individualized training paths
with the implementation of the unique "Growth Dashboard" for each
and every one, which evolves according to the needs of the company
or the technologies and expectations of the employees.
2 - Responsible Marketing: Our A.L.I.C.E (Advertising
Limiting Impacts & Carbon Emissions) tool is being deployed
more and more widely, enabling teams to measure the carbon
emissions of projects and campaigns carried out for clients, and
above all, to implement solutions to reduce impacts as much as
possible. A.L.I.C.E allows all activities proposed to clients to be
measured (creation, production, media, technology, events...) in
100 countries, following the GHG Protocol method and with the
support of Bureau Veritas on the calculation methodology and the
updating of emission factors.
3 – Fight against climate change: the targets for 2030
& 2040 aligned with the 1.5° scenario have been further
validated and strengthened following the methodological change at
the end of 2021 of SBTi (Science Based Targets Initiative),
- 2030 - "Near-Term target" with a 50% reduction in Scopes 1+2+3
emissions, including the use of 100% direct renewable energy
sources before 2030
- 2040 – “Long-Term target” with a 90% reduction in emissions
from scopes 1+2+3, integrating the use of carbon offsetting and
sequestration for the residual impacts that cannot be reduced.
In addition, for the first time in Berlin, the Women's
Forum brought together 300 participants for a day of debates
and workshops on the themes of gender equality in health, climate
and peace. The "Call to Action" addressed to the leaders of the G7
countries contains 10 recommendations on the absolute necessity of
increasing gender equality and better integrating it into all
political and economic decisions.
In mid-June 2022, VivaTechnology took place in a hybrid
way with a physical event gathering more than 91,000 participants
in Paris, with online sessions during 3 days gathering nearly
300,000 professionals around prestigious guests from Tech and
start-ups. The VivaTech News channel passed the 4.3 million hits
mark. In total, for this 6th edition, 400 million people in 140
countries were reached by this event, with a record 3 billion plus
views on social networks.
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 summarized in the CSR Smart data section.
OUTLOOK
With its strong first half 2022, the current business momentum
and the strength of its model, the Groupe is confident for the
future and is in a position to upgrade its full year 2022 guidance
on all KPIs.
The Groupe now anticipates full year 2022 organic growth to land
between +6 and +7% vs. +4 to +5% previously, operating margin rate
between 17.5% and 18%, versus c.17.5% previously, and Free cash
flow before working capital requirement of at least 1.5 billion
euros, versus c.1.4 billion euros previously.
NEW BUSINESS
EUROPE
Primark (Data), abrdn (Media), Heineken (Content), Biffa PLC
(Commerce), HomeExchange (Digital Media Planning & Buying),
Wild (Creative), LVMH (Media), Air Liquide (Digital), Churchilll
Insurance (Creative), Neue Zürcher Zeitung AG (Creative), Valoria
Capital (Creative), Aroma-Zone (Creative), Metro (Creative),
Mundicenter (Creative), Sky Italia (Creative), Sberbank (Content),
Mapfre (Media), The Ministry of Education and Science of Bulgaria
(Influence), Landkreditt Bank (Media), United Parcel Service
(Data), Ferrero (Creative), Expo Serbia (Creative), Campari
(Influence), BNP Paribas (Creative), Avon Products (Media),
Barclaycard (Creative), Betclic (Creative), Santé Publique France
(Production & Digital), Piaggio (Media), South Western Railway
(DBT), Hammerson (Creative), Assurpeople.com (Creative), Softbank
(Creative), Open (Creative), Castel Afrique (Creative), My Money
Bank (Creative), D&G (Creative), Promod (Creative), Royal Canin
(Creative), Atlantic Grupa (Content), TotalEnergies (Content),
Storytel (Creative), Shopee (Media), Société Générale (Content),
Wolters Kluwer Health (Media), Finderella (DBT), BSH Home
Appliances (Content)
NORTH AMERICA
McDonald’s (Media), Walmart (Media), Toyota Motor Corporation
(DBT), KFC (Media), Boar's Head (DBT), Auto Club Group
(Integrated), CVS Health (Creative), Kruger Inc (Influence),
Properly (Influence), Liquor Control Board Of Ontario (Influence),
Dos Equis (Digital), Colgate (Digital), Off-Lease Only Auto
(Digital), Unilever (Shopper), Nestlé (Digital), Inspire Brands
(Digital & CRM), The Kraft Heinz Company (Digital), Zespri
(Digital), Trident - Mondelez International (Creative), The Scotts
Miracle-Gro Company (DBT), Xero (Influence), Amazon (Data), Loblaw
(Influence), Regal Entertainment Group (Production), Pacaso
(Creative), Nestlé (Data), Intel (Shopper), Cherry Lane Canada
(Influence), Heineken (Commerce), Suntory Group (Commerce), HP
(Commerce), Dalio Philanthropies (DBT), Toyota Motor Corporation
(Influence), Nearmap (Influence), Metrolinx (Content), Pernod
Ricard (Commerce), MTY Food Group (Influence), Takeda
Pharmaceuticals (Media)
ASIA PACIFIC/MEA
ByteDance (Media), L'Oréal (Media & Content), Volkswagen
Group (Influence), Vivo Communication Technology Co (Content),
Nestlé (Media & Influence), McDonald's (Creative), Wellington
Management Company (DBT), PlayerzPot Media Pvt. Ltd. (Creative),
SmarTone Telecommunications Holdings Limited (Media), Abbott
Laboratories (Commerce), Singapore Telecommunications (Content),
Geely Auto Group (Content), Deliveroo (Media), PlayerzPot Media
Pvt. Ltd. (Media), Jardine Restaurant Group (Media), Clarins Group
(Media), Cool Inc (Media), Humsafar Trust (Creative), Zoomcar
(Media), XYXX Apparels (Media), BMW Malaysia (Creative &
Digital), PepsiCo (Media & Creative), e& - Etisalat
(Creative), Krungthai Bank (Content), Infinix Mobility (Content),
Citigroup (Content), Easy Crypto NZ (Media), Meta (Creative),
Singapore Ministry of Communications and Information (Media),
Westpac Banking Corporation (CRM), Cashrewards (Media), City of
Melbourne (Media), Shandong Hongchang cultural and Creative
Industrial Park (DBT, New Balance (Production), Amica Financial
Technologies (Media), Body Cupid (Commerce), Bank of China (Media),
Samsung (DBT), Essity Hygiene & Health (Media, GlaxoSmithKline
(DBT), Neom (Media), Shandong Culture & Travel Media Group
(DBT), SAIC Volkswagen (Creative), Eureka Forbes (Media), Chunghwa
Telecom (Creative), Sephora (Creative), Procter & Gamble
(Creative), Lexus (Creative), Ekaterra - Lipton Tea, Pukka Herbs
(Media), Edrington (Media), Mix & Match Travel (Media)
LATAM
AB InBev (Creative), MeatMe (Media & Content), Autoridad del
Canal de Panama (Media), Scotiabank Inc (Creative), Compania
Nacional de Chocolates de Peru (Content), SodaStream (Media),
Alfred Kärcher SE & Co. KG (Media), Celebrity Cruises (Media),
Alpina (Creative), Citigroup (Creative), Walmart (Media &
Content), VeriTran (Creative), Nestlé (Content & CRM), Logitech
(Media)
GLOBAL
AB InBev (Media), Siemens (Creative), Norwegian Cruise Line
(Media), Singapore Tourism Board (Media & Creative)
* *
*
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 associated with the
confidentiality of personal data, the Groupe’s business dependence
on its management and employees, risks associated with mergers and
acquisitions, risks of IT system failures and cybercrime, the
possibility that our clients could seek to terminate their
contracts with us on short notice, risks associated with the
reorganization of the Groupe, 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
fluid organization, its clients have a facilitated access to all
its expertise in every market. Present in over 100 countries,
Publicis Groupe employs around 90,000 professionals.
www.publicisgroupe.com |
Twitter:@PublicisGroupe | Facebook | LinkedIn | YouTube | Viva la
Difference!
Appendices
Net revenue: organic growth
calculation
(million euro)
Q1
Q2
H1
Impact of currency at end June
2022 (million euro)
2021 net revenue
2,392
2,539
4,931
GBP (2)
12
Currency impact (2)
125
229
354
USD (2)
290
2021 net revenue at 2022 exchange rates
(a)
2,517
2,768
5,285
Others
52
2022 net revenue before acquisition impact
(b)
2,781
3,052
5,833
Total
354
Net revenue from acquisitions (1)
19
21
40
2022 net revenue
2,800
3,073
5,873
Organic growth (b/a)
+10.5%
+10.3%
+10.4%
(1)
Acquisitions (CitrusAd, Tremend,
Profitero, Boomerang, Balance Internet, BBK, Wiredcraft,
Taylor Herring, Octopus UK, Means
Advertising, Like-A-Rainbow), net of disposals (Russia, DPZ&T
and Nexus)
(2)
EUR = USD 1.094 on average in H1 2022 vs.
USD 1.202 on average in H1 2021
EUR = GBP 0.842 on average in H1 2022 vs.
GBP 0.866 on average in H1 2021
Definitions
Net revenue: Revenue less pass-through costs which
comprise amount paid to external suppliers engaged to perform a
project and charged directly to clients. Those costs are mainly
Production & Media costs and out of pocket expenses.
Organic growth: Change in net revenue excluding the
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.
Consolidated income statement
(in millions of euros)
June 30, 2022 (6
months)
June 30, 2021 (6
months)
December 31, 2021 (12
months)
Net revenue5
5,873
4,931
10,487
Pass-through revenue
674
562
1,251
Revenue
6,547
5,493
11,738
Personnel costs
(3,888)
(3,174)
(6,639)
Other operating costs
(1,372)
(1,267)
(2,782)
Operating margin before depreciation
& amortization
1,287
1,052
2,317
Depreciation and amortization expense
(excluding acquisition-related intangible
assets)
(269)
(237)
(477)
Operating margin
1,018
815
1,840
Amortization of intangibles from
acquisitions
(137)
(126)
(256)
Impairment loss
(44)
(92)
(122)
Non-current income and expenses
(76)
1
(28)
Operating income
761
598
1,434
Financial expense
Financial income
Cost of net financial debt
Other financial income and expenses
Revaluation of earn-out payments
(56)
29
(27)
(13)
(4)
(57)
12
(45)
(5)
(5)
(115)
30
(85)
27
(33)
Pre-tax income of consolidated
companies
717
543
1,343
Income taxes
(189)
(135)
(307)
Net income of consolidated
companies
528
408
1,036
Share of profit of associates
5
-
0
Net income
533
408
1,036
Of which:
-Net income attributable to
non-controlling interests
(4)
(6)
9
Net income attributable to equity
holders of the parent company
537
414
1,027
Per share data (in euros) - Net
income attributable to equity holders of the parent
company
Number of shares
250,274,576
246,106,455
248,620,158
Earnings per share
2.15
1.68
4.13
Number of diluted shares
252,508,128
248,475,342
251,695,105
Diluted earnings per share
2.13
1.67
4.08
Consolidated statement of comprehensive income
(in millions of euros)
June 30, 2022
(6 months)
June 30, 2021
(6 months)
December 31, 2021
(12 months)
Net income for the period
(a)
533
408
1,036
Comprehensive income that will not be
reclassified to income statement
- Actuarial gains (and losses) on defined
benefit plans
91
24
48
- Deferred taxes on comprehensive income
that will not be reclassified to income statement
(22)
(6)
(8)
Comprehensive income that may be
reclassified to income statement
- Remeasurement of hedging instruments
8
17
29
- Consolidation translation
adjustments
676
233
590
Total other comprehensive income
(b)
753
268
659
Total comprehensive income for the
period (a) + (b)
1,286
676
1,695
Of which:
- Total comprehensive income for the
period attributable to non-controlling interests
(1)
(6)
9
- Total comprehensive income for the
period attributable to equity holders of the parent company
1,287
682
1,686
Consolidated balance sheet
(in millions of euros)
June 30, 2022
December 31, 2021
Assets
Goodwill, net
12,841
11,760
Intangible assets, net
1,433
1,379
Right-of-use assets related to leases
1,946
1,489
Property, plant and equipment, net
613
615
Deferred tax assets
172
175
Investments in associates
46
25
Other financial assets
393
276
Non-current assets
17,444
15,719
Inventories and work-in-progress
328
277
Trade receivables
10,853
11,315
Assets on contracts
1,324
979
Other current receivables and assets
1,101
897
Cash and cash equivalents
3,342
3,659
Current assets
16,948
17,127
Total assets
34,392
32,846
Equity and
liabilities
Share capital
102
101
Additional paid-in capital and retained earnings,Group share
9,212
8,487
Equity attributable to holders of the
parent company
9,314
8,588
Non-controlling interests
(34)
(33)
Total equity
9,280
8,555
Long-term borrowings
3,431
3,446
Long-term lease liabilities
2,369
1,801
Deferred tax liabilities
294
274
Long-term provisions
485
543
Non-current liabilities
6,579
6,064
Trade payables
14,086
14,479
Liabilities on contracts
487
470
Short-term borrowings
149
184
Short-term lease liabilities
358
288
Income taxes payable
368
328
Short-term provisions
268
274
Other creditors and current
liabilities
2,817
2,204
Current liabilities
18,533
18,227
Total equity and liabilities
34,392
32,846
Consolidated statement of cash flows
(in millions of euros)
June 30, 2022
(6 months)
June 30, 2021
(6 months)
December 31, 2021
(12 months)
Cash flow from
operating activities
Net income
533
408
1,036
Neutralization of non-cash income and
expenses:
Income taxes
189
135
307
Cost of net financial debt
27
45
85
Capital losses (gains) on disposal of
assets (before tax)
76
(1)
28
Depreciation, amortization and impairment
loss
450
455
855
Share-based compensation
30
25
52
Other non-cash income and expenses
16
11
5
Share of profit of associates
(5)
-
-
Dividends received from associates
3
2
2
Taxes paid
(251)
(163)
(362)
Change in working capital requirements
(1)
(858)
(1,191)
(216)
Net cash flows generated by (used in)
operating activities (I)
210
(274)
1,792
Cash flow from
investing activities
Purchases of property, plant and equipment
and intangible assets
(84)
(50)
(139)
Disposals of property, plant and equipment
and intangible assets
2
-
3
Purchases of investments and other
financial assets, net
18
4
4
Acquisitions of subsidiaries
(400)
(77)
(276)
Disposals of subsidiaries (2)
(43)
-
3
Net cash flows generated by (used in)
investing activities (II)
(507)
(123)
(405)
Cash flow from
financing activities
Dividends paid to holders of the parent
company
-
-
(227)
Dividends paid to non-controlling
interests
(3)
(2)
(9)
Proceeds from borrowings (3)
5
1
9
Repayment of borrowings (3)
(10)
(190)
(862)
Repayment of lease liabilities
(170)
(144)
(295)
Interest paid on lease liabilities
(45)
(35)
(70)
Interest paid
(84)
(94)
(106)
Interest received
21
12
26
Buy-out of non-controlling interests
-
(4)
(14)
Net (buybacks)/sales of treasury shares
and warrants
7
9
(127)
Net cash flows generated by (used in)
financing activities (III)
(279)
(447)
(1,675)
Impact of exchange rate fluctuations
(IV)
258
102
238
Change in consolidated cash and cash
equivalents (I + II + III + IV)
(318)
(742)
(50)
Cash and cash equivalents on January
1st
3,659
3,700
3,700
Bank overdrafts on January 1st
(12)
(3)
(3)
Net cash and cash equivalents at
beginning of year (V)
3,647
3,697
3,697
Cash and cash equivalents at closing
date
3,342
2,959
3,659
Bank overdrafts at closing date
(13)
(4)
(12)
Net cash and cash equivalents at end of
the year (VI)
3,329
2,955
3,647
Change in consolidated cash and cash
equivalents (VI - V)
(318)
(742)
(50)
(1) Breakdown of change in working capital requirements
Change in inventory and
work-in-progress
(39)
(32)
(23)
Change in trade receivables and other
receivables
633
847
(1,218)
Change in accounts payable, other payables
and provisions
(1,452)
(2,006)
1,025
Change in working capital
requirements
(858)
(1,191)
(216)
(2) Including (49)m€ used in related to
the disposal of Russian activities
(3) See Note 15
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
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 comprehensive income 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
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
Earnings per share (basic and diluted)
(in millions of euros, except for share
data)
June 30, 2022
June 30, 2021
Net income used for the calculation of
earnings per share
Net income attributable to equity holders
of the parent company
A
537
414
Impact of dilutive instruments:
- Savings in financial expenses related to
the conversion of debt instruments, net of tax
-
-
Group net income – diluted
B
537
414
Number of shares used to calculate
earnings per share
Number of shares at January 1st
253,462,409
247,769,038
Shares created over the period
133,430
205,975
Treasury shares to be deducted (average
for the period)
(3,321,264)
(1,868,558)
Average number of shares used for the
calculation
C
250,274,576
246,106,455
Impact of dilutive instruments:
- Free shares and dilutive stock
options
2,124,694
2,201,787
- Equity warrants (BSA)
108,858
167,100
Number of diluted shares
D
252,508,128
248,475,342
(in euros)
Earnings per share
A/C
2.15
1.68
Diluted earnings per share
B/D
2.13
1.67
Headline earnings per share (basic and diluted)
(in millions of euros, except for share
data)
June 30, 2022
June 30, 2021
Net income used to calculate headline
earnings per share (1)
Group net income
537
414
Items excluded:
- Amortization of intangibles from
acquisitions, net of tax
103
94
- Impairment loss, net of tax
33
70
- Revaluation of earn-out payments
4
5
- Main capital gains (losses) on disposal
of assets and fair value adjustment of financial assets, net of tax
(2)
50
(28)
Headline Group net income
E
727
555
Impact of dilutive instruments:
- Savings in financial expenses related to
the conversion of debt instruments, net of tax
-
-
Headline Group net income, diluted
F
727
555
Number of shares used to calculate
earnings per share
Number of shares at January 1st
253,462,409
247,769,038
Shares created over the period
133,430
205,975
Treasury shares to be deducted (average
for the period)
(3,321,264)
(1,868,558)
Average number of shares used for the
calculation
C
250,274,576
246,106,455
Impact of dilutive instruments:
- Free shares and dilutive stock
options
2,124,694
2,201,787
- Equity warrants (BSA)
108,858
167,100
Number of diluted shares
D
252,508,128
248,475,342
(in euros)
Headline earnings per share (1)
E/C
2.90
2.26
Headline earnings per share – diluted
(1)
F/D
2.88
2.23
(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, 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. As of June 30, 2021, the main capital gains and losses on
disposal amount to euro 1 million and the fair value adjustment of
financial assets amounts to euro 27 million.
______________________________________
1 Before change in working capital
requirements
2 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
3 +6.6% including Outdoor Media activities
& the Drugstore
4 Excluding Outdoor Media activities and
the Drugstore
5 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/20220720005981/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
Clémence Vermersch Investor Relations + 33 (0)1 44 43 72 17
clemence.vermersch@publicisgroupe.com
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