Solid results in a transformation
year
Regulatory News:
Publicis Groupe (Paris:PUB):
- Reported net revenue up 9.3% for the full year, with Epsilon
contributing in H2
- Organic growth at -2.3%, in line with update provided in
October
- Operating margin rate up, at 17.3% (1) (+30 basis points),
including c.€100m additional investment in talents
- Headline diluted EPS of €5.02 (+8.2%) (2) and Free Cash Flow
(3) of nearly €1.3 billion (+8.2%)
- Number 1 in New Business for the 2nd year in a row
(4)
- Confirmation of 2020 outlook
2019 Results
(EUR million)
2019
2019 vs 2018
Revenue
11,001
+10.6%
Net revenue
9,800
+9.3%
Organic growth
-2.3%
Operating margin (1)
1,699
+11.6%
Operating margin rate (1)
17.3%
+30bps
Headline Groupe net income
1,188
+9.8%
Headline diluted EPS (euro)
5.02
+8.2%(2)
Free Cash Flow (3)
1,253
+8.2%
Q4 2019 Revenue
Net revenue
€ 2,871 M
Reported growth
+15.2%
Organic growth
-4.5%
(1) Excluding €40m transaction costs related to the acquisition
of Epsilon (2) At constant exchange rates, excluding BEAT Tax.
Reported basis: +8.9% (3) Before change in working capital
requirements (4) Source: Goldman Sachs, JP Morgan
Arthur Sadoun, Chairman and CEO of Publicis Groupe:
« 2019 was a transition year when we completed our model.
We acquired and integrated Epsilon. We changed Publicis
Sapient's management and repositioned its operations around
business transformation through industry verticals. We put in place
a country model to foster cross-fertilization across our expertise
in creativity, media, data and technology. And while we were
implementing our model, we continued to promote a new generation of
leaders in strategic positions, in our most iconic brands, our
biggest countries and for our top clients.
All of these necessary changes, combined with the effects of our
transition, had a negative impact on our organic growth in 2019.
But our model is already delivering concrete results that make us
confident for the future. Our reported growth of +9.3% with Epsilon
reflects the shift in our revenue profile. We are posting strong
financials, increasing our operating margin (1) by +11.6% and
Headline diluted EPS (2) by +8.2%, while investing an additional
c.100 million euros in our talents. Our model and our go-to-market
demonstrate their attractiveness, as illustrated by the new
business ranking: for the second year in a row, we are number one
in the new business league tables.
Now that we have completed our transformation in terms of assets
and organization, we are in position to deliver what our clients
really need to thrive in a world increasingly dominated by the
platforms, as we demonstrated in our recent wins with Disney and
Novartis.
In 2020 our priority is to deliver our organic growth recovery
plan by progressively returning to growth in our traditional
activities; preparing our future revenue streams with Epsilon and
Publicis Sapient, and of course continuing to invest in talents and
learning & development to strengthen our offer.
We have taken great steps forward in our transformation journey.
We are clear on the steps ahead of us and focused on execution. I
would like to thank everyone at Publicis Groupe for their efforts
and all of our clients for their trust. »
* *
*
(1) Excluding €40m transaction costs related to the acquisition
of Epsilon (2) At constant exchange rates, excluding BEAT Tax.
Reported basis: +8.9%
Publicis Groupe’s Supervisory Board met on February 5, 2020,
under the chairmanship of Maurice Lévy, to examine the annual
accounts for 2019 presented by Arthur Sadoun, CEO and Chairman of
the Management Board.
KEY FIGURES
EUR million, except per-share
data and percentages
2019
2018
2019
vs 2018
Data from the Income and Cash flow
Statement
Net revenue
9,800
8,969
+9.3%
Pass-through revenue
1,201
982
+22.3%
Revenue
11,001
9,951
+10.6%
Operating margin before Depreciation &
Amortization
2,245
2,049
+9.6%
% of Net revenue
22.9%
22.8%
10 bps
Operating margin
1,659
1,523
+8.9%
% of Net revenue
16.9%
17.0%
-10 bps
Operating margin excluding transaction
costs (1)
1,699
1,523
+11.6%
% of Net revenue
17.3%
17.0%
+30 bps
Operating income
1,267
1,303
-2.8%
Net income attributable to the
Groupe
841
919
-8.5%
Earnings Per Share (EPS)
3.59
4.01
-10.5%
Headline diluted EPS (2)
5.02
4.61
+8.9%
Dividend per share (3)
2.30
2.12
+8.5%
Free Cash Flow before change in
working capital requirements
1,253
1,158
+8.2%
EUR million Data from the
Balance Sheet
Dec. 31, 2019
Dec. 31, 2018
Total assets
32,659
27,080
+20.6%
Groupe share of Shareholders’
equity
7,401
6,853
+8.0%
Net debt (net cash)
2,713
(288)
-
(1) Transaction costs related to the acquisition of Epsilon
totaled 40 million euros in 2019 (2) 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, divided by the average number of shares on a diluted basis
(3) To be proposed to the shareholders at the AGM of May 27,
2020
NET REVENUE IN FULL YEAR 2019
Publicis Groupe’s net revenue for the full year 2019 was 9,800
million euros, compared with 8,969 million euros in 2018, i.e. a
9.3% increase. At constant exchange rates, growth was 5.9% and the
actual impact of exchange rate variations was positive at 3.1% or
282 million euro. Acquisitions (net of disposals) contributed 760
million euros to net revenue in 2019, reflecting the contribution
of Epsilon from July 2019, and of other acquisitions such as Xebia,
Soft Computing and Rauxa, partially offset by the disposals of PHS
at the end of January 2019 and of Proximedia at the end of April
2019.
Organic growth is -2.3% in 2019. This performance is in line
with the expectations shared in October. It reflects three
well-identified negative factors. Firstly, an impact of attrition
of around 200 basis points; secondly, the effect of contract losses
in media in 2018; and thirdly, the repositioning of Publicis
Sapient in the United States. These negative effects were partially
offset by the continued very good performance of Strategic Game
Changers, which saw its net revenue grow by 18%, and by the
positive effect of budget gains in 2019.
Breakdown of 2019 Net revenue by region
EUR
Net revenue
Reported
Organic
million
2019
2018
growth
growth
Europe
2,630
2,622
+0.3%
-2.0%
North America
5,516
4,795
+15.0%
-3.5%
Asia Pacific
1,006
924
+8.9%
+0.8%
Latin America
326
347
-6.1%
-4.9%
Middle East & Africa
322
281
+14.6%
+10.0%
Total
9,800
8,969
+9.3%
-2.3%
Europe reported a growth of 0.3%. Excluding the impact of
acquisitions and exchange rates, organic growth was -2.0%. The
performance compares to high bases, particularly in the second half
of the year, in the three main countries of the region. France and
the United Kingdom posted slightly negative organic growth of -0.8%
and -0.2% respectively. Net revenue in Germany declined -10.0%
organically, primarily impacted by media losses in 2018.
Net revenue in North America is up 15.0% from 2018, including
the positive impact of the Epsilon acquisition in the last six
months of the year. On an organic basis, the region posted a
decline in net revenue of -3.5% in 2019. The negative factors
explained above apply particularly to the United States, which saw
negative growth of -4.1% over the year. Canada posted organic net
revenue growth of 8.3%.
Asia Pacific net revenue were up 8.9% on a reported basis and
0.8% on an organic basis. Australia recorded a decline of -7.0% in
net revenue on an organic basis, China was down -1.8%, while
Singapore and India recorded double-digit growth (16.5% and 10.4%
respectively).
Net revenue in Latin America was down -6.1%, on a reported
basis. On an organic basis, net revenue was down -4.9% for the
year, despite a positive fourth quarter. This is primarily impacted
by high comparables and the economic situation in some countries.
Business in Brazil was down -10.7% organically over the year.
Mexico saw its net revenue fall -6.1% over the year on an organic
basis.
Net revenue in the Middle East and Africa region rose by 14.6%
thanks to the impact of the rise in the euro and to an increase in
organic growth of 10.0%, driven by the United Arab Emirates
(16.6%).
NET REVENUE IN Q4 2019
Publicis Groupe's net revenue in Q4 2019 was 2,871 million euros
compared to 2,492 million euros in Q4 2018, up by 15.2%. Growth at
constant exchange rate was 12.9%. Exchange rate variations had a
positive impact of 52 million euros (+2.1%). The acquisitions (net
of disposals) contributed 441 million euros to net revenue in Q4
2019, reflecting the contribution of Epsilon from July 2019, and
other acquisitions such as Xebia, Soft Computing and Rauxa,
partially offset by the disposals of PHS at the end of January 2019
and of Proximedia at the end of April 2019.
Organic growth was -4.5% in Q4 2019. This performance is in line
with the indications shared in October. It highlights the impact of
three well-identified negative factors. Firstly, attrition, i.e.
budget cuts by some clients in traditional advertising, continued.
Second, the performance of our media business reflected, as
expected, the fact that our budget gains have not fully offset the
losses incurred since the third quarter of 2018. Finally, the
repositioning of Publicis Sapient in the United States, initiated
by the Groupe in 2019, is having a negative impact on short-term
growth. As announced at the beginning of the year, Publicis Sapient
in the United States is repositioning around business
transformation through industry verticals. This reflects the
structure already in place for Publicis Sapient's international
activities. To do this, several projects have been carried out
simultaneously: part of the digital marketing activity is being
transferred to our communication activities; Publicis Sapient in
the United States is evolving from digital project-based
assignments to longer-term digital transformation ones; the
business is thus gradually refocusing on activities generating
long-term growth.
Breakdown of Q4 2019 Net revenue by region
EUR
Net revenue
Reported
Organic
million
Q4 2019
Q4 2018
growth
growth
Europe
728
753
-3.3%
-7.0%
North America
1,639
1,260
+30.1%
-4.2%
Asia Pacific
302
277
+9.0%
-2.3%
Latin America
107
110
-2.7%
+0.9%
Middle East & Africa
95
92
+3.3%
-1.2%
Total
2,871
2,492
+15.2%
-4.5%
ANALYSIS OF 2019 KEY FIGURES
Income Statement
Operating margin before
depreciation and amortization amounted to 2,245 million euros in
2019, compared to 2,049 million euros in 2018, up by 9.6%,
including the contribution of Epsilon in H2 2019. This translates
into a margin rate of 22.9% of net revenue (22.8% in 2018).
Excluding transaction costs related to the acquisition of Epsilon,
the operating margin before depreciation and amortization reached
2,285 million euros in 2019, representing a margin rate of
23.3%.
- Personnel costs totaled 6,073 million euros at December 31,
2019, up by 5.7% from 5,747 million euro in 2018. This evolution
reflects several factors: the integration of Epsilon in the second
half of the year, investments in talents amounting to c.100 million
euros for both our Game Changers and our media and creative
activities, only partly offset by the adjustment in variable
compensation reflecting the fact that organic growth target has not
been met. As a percentage of net revenue, personnel expenses were
62.0%, compared to 64.1% in 2018, partly reflecting the structure
of Epsilon Income Statement, in which personnel costs are less
significant as a percentage of revenue. Fixed personnel costs of
5,353 million euros represented 54.6% of net revenue versus 55.4%
in 2018. The cost of freelancers was 348 million euros in 2019,
compared to 367 million euros in 2018. Restructuring costs reached
116 million euros in 2019 (104 million euros in 2018) and are part
of the Groupe's ongoing reorganization, "The Power of One", which
results in increased integration of structures and activities at
country level.
- Other operating expenses (excluding depreciation &
amortization) amounted to 2,683 million euros, up from 2,155
million euros in 2018. These costs represent 27.4% of net revenue
compared to 24.0% in 2018. Excluding Epsilon-related transaction
costs of 40 million euros, operating expenses in 2019 amounted to
2,643 million euros, or 27.0% of net revenue. The cost structure of
Epsilon explains the increase in this ratio.
Depreciation and amortization
charge was 586 million euros in 2019, up by 11.4% compared to 2018.
The increase is largely due to the consolidation of Epsilon on the
second half of the year.
The operating margin amounted
to 1,659 million euros, up by 8.9% compared to the 2018 margin of
1,523 million euros. Excluding transaction costs related to the
acquisition of Epsilon, the operating margin was 1,699 million
euros, i.e. a margin rate of 17.3%, up by 30 basis points compared
to 2018. This improvement is mainly due to the decrease in
personnel costs as a percentage of net revenue, the sale of PHS, as
well as favorable currency impacts, partially offset by the
increase in other operating expenses. These elements made it
possible to generate the necessary resources to finance investment
in talents, for both our Game Changers and our creative and media
activities.
Excluding transaction costs
related to the acquisition of Epsilon, operating margin rates by
major geographic area were 13.7% for Europe, 19.6% for North
America, 17.7% for Asia-Pacific, 13.8% for Latin America and 10.9%
for the Africa / Middle East region.
Amortization of intangibles
arising from acquisitions totaled 204 million euro in 2019, up from
69 million euro in 2018. This increase is mainly due to the new
intangible items arising from the consolidation of Epsilon, as well
as the implementation of our country-model organization that leads
to a change in accounting approach regarding tradenames arising
from acquisitions. Tradenames started to be amortized from 1st July
2019. Impairment losses amounted to 209 million euros, out of which
82 million euros mainly on intangibles. It also includes 127
million euros linked to the real estate consolidation "All in One",
which leads to a reduction in the number of sites, while allowing
better collaboration between the teams. In 2018, impairment losses
were 131 million euros (of which 114 million euros related to real
estate plan “All in One”). In addition, net non-current income is
positive of 21 million euros 2019, resulting from disposals,
compared to a charge of 20 million euros in 2018.
Operating income totaled 1,267
million euro in 2019, after 1,303 million euro in 2018.
The financial result,
comprising the cost of net financial debt and other financial
charges and income, is an expense of 91 million euros in 2019
compared to an expense of 71 million euros in 2018. The net expense
on net financial debt was 25 million euros in 2019, including a 58
million euros interest charge related to Epsilon’s acquisition
debt. Net expense on net financial debt was 11 million euros in
2018. Other financial income and expenses were a charge of 66
million euros, notably composed of 70 million euros interest on
lease liabilities. Other financial income and expenses were a
charge of 60 million euros in 2018, including 58 million euros of
interest on lease obligations.
The revaluation of earn-out
payments amounted to an expense of 22 million euros at year-end,
after an expense of 13 million in 2018.
The tax charge is 305 million
euros, corresponding to an effective tax rate of 25.0% in 2019,
compared to 285 million euros in 2018, corresponding to an
effective tax rate of 24.0%.
The share in the profit of
associates is a loss of 5 million euros, compared to a loss of 4
million euros the previous year. Minority interests were 3 million
euros in 2019 compared to 11 million in 2018.
Overall, Net income
attributable to the Groupe was 841 million euros at December 31,
2019, compared to 919 million euro at December 31, 2018.
Free Cash Flow
EUR million
2019
2018
Operating margin before Depreciation &
Amortization
2,245
2,049
Financial interest paid (net)
11
(3)
Refunding of lease commitments and
associated interest
(480)
(432)
Income tax paid
(349)
(328)
Other
51
68
Cash Flow from operations before change
in WCR
1,478
1,354
Investments in fixed assets
(net)
(225)
(196)
Free Cash Flow before changes
in WCR
1,253
1,158
Variation in working capital
requirements
394
153
Free cash-flow
1,647
1,311
The Groupe’s free cash flow,
excluding change in working capital requirements, was up by 8.2%
compared to 2018, at 1,253 million euros. This upswing is mainly
due to the increase in the operating margin before depreciation and
amortization. The increase in net investments in fixed assets is
mainly due to the consolidation of Epsilon’s activity in the second
half of the year. Tax paid increased from 328 million euros in 2018
to 349 million euros in 2019.
The change in working capital
requirements is 394 million euros in 2019, compared to 153 million
euro in 2018. This increase is related to the continued cash
management policy, particularly on overdue recovery. It also
benefits from the positive contribution of Epsilon’s change in
working capital requirements.
The Groupe’s free cash flow
including variations in working capital requirements was 1,647
million euros up by 25.6% from the previous year.
Net debt
Net financial debt amounted to
2,713 million euros as of December 31, 2019 compared to net cash of
288 million euros as of December 31, 2018. The Groupe's average net
debt in 2019 amounted to 2,375 million euros compared to 1,323
million euros in 2018. The increase in the Groupe's debt reflects
the financing linked to the acquisition of Epsilon, largely funded
by the issue of bonds amounting to 2.25 billion euros in three
tranches.
NEW BUSINESS
In 2019, for the second year in a row, Publicis was ranked first
across the industry in new business league tables1.
Publicis offer demonstrated its attractiveness, in every
dimension, with both new and existing clients. New clients have
elected the Groupe for their marketing transformation, like Disney
globally, LVMH in Europe and British Telecom in the UK. The Groupe
has successfully extended its scope with existing clients and won
new assignments, with Mondelez or NBC Universal, both in the US. In
addition, only one year after the Groupe won the media and digital
assignment of GSK, it has been awarded the Pfizer Consumer
Healthcare media business. Finally, Publicis Groupe has leveraged
its existing relationship with Novartis and Axa and increased its
market share in consolidation pitches.
This momentum is continuing in 2020. Bank of America decided
early February to consolidate its creative business with Leo
Burnett to accelerate their data driven creative approach with the
Groupe.
ACQUISITION OF EPSILON
On April 14, 2019, Publicis Groupe announced that it had entered
into an agreement with Alliance Data Systems Corporation (NYSE:
ADS) to acquire Epsilon for a net acquisition price of $3.95
billion after taking into account the favorable tax impacts related
to the transaction (and a total cash amount of $ 4.45 billion). At
the same time, Publicis Groupe and Alliance Data Systems have
decided to forge a strategic partnership. This acquisition
accelerates the implementation of Publicis Groupe's strategy of
becoming the preferred partner of its customers in their
transformation. The closing, which took place on July 1, 2019, was
announced on July 2.
At the end of 2019, the integration was largely completed.
Epsilon was positioned as the Groupe core expertise in building,
enriching, and activating first party data to irrigate all
activities. Epsilon’s advertising activities were folded into Leo
Burnett while CJ Affiliate has been placed under strategic review,
to explore different ways to unlock value.
OTHER ACQUISITIONS AND DISPOSALS
On January 31, 2019, Publicis Groupe announced the definitive
signing of the sale of Publicis Health Solutions (PHS) to
Altamont Capital Partners (Altamont). PHS, which belonged to the
Publicis Health solution pole, is an organization of medical and
marketing representatives for pharmaceutical, biotechnology,
medical device and diagnostic companies. Its brands, including
Touchpoint, PDI, Tardis Medical, PHrequency and CustomPoint
Recruiting, offer a full range of services to customers.
1 Source: Goldman Sachs, JP Morgan
On February 7, 2019, Publicis Groupe confirmed that it had
finalized on February 6, 2019 the acquisition of 82.99% of the
capital of Soft Computing, French leader in Data Marketing,
at a price of 25 euros per share, i.e. a total amount of
approximately 43.4 million euros. This acquisition was carried out
with the founding shareholders and their families and follows the
lifting of all the suspensory conditions relating to the agreements
signed on December 19, 2018. The proposed price shows a premium of
66.67% compared to the closing price on December 19, 2018. Founded
in 1984 by Eric Fischmeister and Gilles Venturi, Soft Computing is
a company specializing in data and its exploitation for digital
marketing and the transformation of the customer experience. This
leading structure, with more than 400 talents, supports most of the
large companies in the distribution, services and finance sectors.
In April 2019, the Groupe acquired the remaining minority interests
in Soft Computing, on which it now has a 100% control.
On February 14, 2019, Publicis Groupe announced that following a
competitive sales process, conducted with the help of a large local
bank, the group entities holding the companies of Proximedia
group entered in exclusive negotiations with the company Ycor
with a view to selling the entire Proximedia group. Present in
France, Belgium, Holland and Spain, Proximedia provides digital
services to VSEs, SMEs, traders and artisans for their presence on
the Web and their promotion. The sale was completed during the
first half of 2019.
On August 19, 2019, Publicis Groupe announced its acquisition of
Rauxa, an independent, full-service marketing agency. Rauxa
has become part of Publicis Media, the media solution hub of
Publicis Groupe. Founded in 1999, the agency has averaged
double-digit growth every year, with a net revenue of around 70M$
in 2018, and more than 300 employees spanning New York, Los
Angeles, San Francisco, Seattle, Orange County and Dallas. Rauxa’s
clients include Verizon, Samsung, Alaska Airlines, Vans, Celgene
and 20 other leading client brands. Rauxa operates as a Publicis
Media agency brand in the United States, and continues to be led by
its founder Jill Gwaltney, and its President and Chief Executive
Officer Gina Smith, reporting to David Penski, COO Publicis Media
U.S and Chairman of PMX and Tim Jones, CEO of Publicis Media
Americas. Rauxa will work closely alongside Publicis Media’s
digital agencies (Moxie, MRY and Digitas) driving deeper
communications touchpoints across strategy, CRM and personalized
creative.
NOMINATIONS
In 2019, the Groupe continued to promote a new generation of
leaders in strategic positions, in its most iconic brands, its
biggest countries and its top clients. The Groupe invested an
additional 100 million euros in talents, promoted 100 leaders
internally, and hired 150 top executives.
Publicis Sapient, the digital business transformation hub of
Publicis Groupe, announced the appointment of John Maeda as
Chief Experience Officer. The selection of Maeda signals Publicis
Sapient’s ongoing commitment to pushing the boundaries of how
businesses create exponential value for their customers and
markets. In this role, John joins the Creative Executive Collective
of Publicis Groupe whereby creative leadership is multi-faceted and
structured to develop the necessary broad palette of creativity for
the modern world – dynamic creativity brought to life through
stories, experiences and innovation.
Publicis Groupe UK appointed Ben Mooge in the
newly-created position of Chief Creative Officer, Publicis Groupe
UK, illustrating the Groupe’s commitment to putting the creative
product at the very heart of the business. It recognises
creativity’s value to clients and talent and its true potential
when connected with data and technology.
Publicis Groupe announced two executive leadership
infrastructures (namely, Publicis Groupe U.S. ComEx and Publicis
Communications U.S. organized into three Zones) that will drive
U.S. governance, accelerate the implementation of the Groupe’s
strategy, and further transform the Groupe’s creative offering.
Publicis Groupe US ComEx will be accountable for
advancing the Groupe's strategy and steering overall performance
and growth for the Group and its clients, in the company’s largest
market. Publicis Groupe U.S. ComEx is chaired by Arthur Sadoun,
Chairman and CEO, Publicis Groupe, and comprises of Tim Jones, CEO,
Publicis Media Americas; Bryan Kennedy, CEO, Epsilon; Ros King,
EVP, Global Clients, Publicis Groupe; Steve King, COO, Publicis
Groupe & CEO, Publicis Media; Adrian Sayliss, CFO, Publicis
Groupe North America; Carla Serrano, CSO, Publicis Groupe; Liz
Taylor, CCO, Publicis Communications US & CCO, Leo Burnett
Worldwide, Nigel Vaz, CEO, Publicis Sapient; and Dave Penski, COO
Publicis Media U.S and Chairman of PMX.
Publicis Communications U.S. has been organized into
three zones to catalyse transformation and cross-fertilization of
the Groupe’s creative brand portfolio spanning brands such as Leo
Burnett, Saatchi & Saatchi, Publicis, BBH and Fallon. The West
zone will be led by Andrew Bruce, CEO, Publicis Communications
West; the Center zone will be headed up by Andrew Swinand, CEO,
Publicis Communications Center; and the East zone will be under the
leadership of Jem Ripley who returns to Publicis Groupe as Publicis
Communications CEO East. Additionally, Ripley will also lead
Publicis Sapient’s marketing transformation business and clients in
the U.S., which will transit to Publicis Communications. The
digital business transformation capability remains within the
Publicis Sapient hub.
Publicis Groupe has appointed Ian Wharton as Executive
Creative Director at Publicis Sapient, the Groupe's digital
transformation hub. Ian Wharton joins the Publicis Groupe UK
creative teams, led by Ben Mooge, Chief Creative Officer of
Publicis Groupe UK, and is part of the Publicis Sapient Global
Experience team, where he is responsible for designing projects of
excellence.
Publicis Groupe has formed the North Asia zone, made up
of China, Hong Kong, Taiwan, South Korea and Japan, to drive
synergy on digital practices, content, production and digital
business transformation across these markets to further enhance the
Power of One offering for our clients. Jane Lin-Baden took
up the position of General Manager of the North Asia region, in
parallel with her position of Managing Partner of Publicis Groupe
APAC. In order to strengthen its positioning in these countries,
the Group has made several appointments. Katie Xie has been
appointed Chief Talent Officer of the North Asia region to lead the
HR and Talent organization of five markets in the region; she
previously held the position of HR Executive Director for Disney
North Asia region across all its lines of business. Andy Ho
joins the Groupe as Global Client Partner of Publicis Groupe China,
he brings 22 years of experience in the automotive, FMCG and
technology sectors, through leadership positions in various
agencies, including Group Strategist, Integration & Innovation
of Dentsu Aegis China, Key Client President of Beijing Dentsu, as
well as MD of McGarryBowen China. Irene Chang has also been
promoted to Managing Director of Publicis Media Taiwan.
Publicis Groupe has appointed Margaret Key Chief
Executive Officer, MSL, Asia Pacific, Middle East and Africa. She
is in charge of driving MSL's strategy across the region while
overseeing all MSL's global clients and key strategic initiatives
across talents and capabilities, with a view to continue
strengthening MSL's presence across the markets and within the
region.
Publicis Groupe announced the appointment of Anupriya
Acharya as Chief Executive Officer, South Asia. In this newly
created role, Acharya will be leading Publicis Groupe's country
agenda across India and Sri Lanka. Her primary responsibilities
will include driving greater integration across the Groupe’s
operations to deliver end to end marketing transformation to
existing clients while winning the trust of new ones, as well as
cultivating and attracting the best talent across Agencies and
Practices. She will be supported by the India leadership team,
comprising all the agencies’ CEOs, including creative, media,
digital, influence, data and technology.
Publicis Groupe has appointed industry veteran leader Cary
Huang Chief Executive Officer of Media, Digital of Publicis
Groupe in China. He will oversee all Media, Digital and Commerce
brands in China, including Starcom, Zenith, Spark, Performics,
Digitas, Publicis Commerce.
OUTLOOK
The transformation of Publicis Groupe is now finalized in terms
of assets and structures. The teams’ priority in 2020 is to focus
on the execution of the strategy and on returning to organic
growth.
The Groupe is well-positioned and now has the assets and the
talents that its clients need. The Groupe has taken the necessary
actions to lay the foundations for profitable and sustainable
growth, which should enable it to return to positive growth over
time. A sequential improvement will be visible fairly rapidly.
However, half-year performance should remain negative, most notably
in the 1st quarter.
The Groupe is confirming the outlook communicated in October
2019, with organic growth between -2% and +1%. The Groupe also
confirms its ambition of an operating margin rate at around 17%,
supported by the simplification of its structures and its new
sources of revenue.
* *
*
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 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, an extremely competitive market sector, the possibility
that our clients could seek to terminate their contracts with us at
short notice, the fact that a substantial part of the Group’s
revenue is derived from certain key clients, conflicts of interest
between advertisers active in the same sector, the Group’s
dependence on its directors and employees, laws and regulations
which apply to the Group’s business, legal action brought against
the Group based on allegations that certain of the Group’s
commercials are deceptive or misleading, the strategy of growing
through acquisitions, the depreciation of goodwill and assets
listed on the Group’s balance sheet, the Group’s presence in
emerging markets, exposure to liquidity risk, a drop in the Group’s
credit rating and exposure to the risks of financial markets.
About Publicis Groupe - The Power of One
Publicis Groupe [Euronext Paris FR0000130577, CAC 40] is a
global leader in marketing, communication, and digital
transformation, driven through the alchemy of data, creativity,
media and technology, uniquely positioned to deliver personalized
experience at scale. Publicis Groupe offers its clients a seamless
end-to-end service to address all their marketing and
transformation challenges. Publicis Groupe is organized across
Solutions hubs: Publicis Communications (Publicis Worldwide,
Saatchi & Saatchi, Leo Burnett, BBH, Marcel, Fallon, MSL,
Prodigious), Publicis Media (Starcom, Zenith, Spark Foundry,
Performics, Digitas), Publicis Sapient and Publicis Health.
Epsilon, the data-driven marketing and tech company and its
platform Conversant, is positioned at the center of the group
fueling all the group’s operations. Present in over 100 countries,
Publicis Groupe employs nearly 84,000 professionals.
www.publicisgroupe.com | Twitter:@PublicisGroupe | Facebook |
LinkedIn | YouTube | Viva la Difference!
Appendices
Net revenue: organic growth
calculation
(million euro)
Q1
Q2
Q3
Q4
12 months
Impact of currency at end
December 2019 (million euro)
2018 net revenue
2,082
2,198
2,197
2,492
8,969
GBP (2)
8
Currency impact (2)
93
72
65
52
282
USD (2)
252
2018 net revenue at 2019 exchange rates
(a)
2,175
2,270
2,262
2,544
9,251
Others
22
2019 net revenue before acquisition impact
(1) (b)
2,136
2,273
2,201
2,430
9,040
Total
282
Net revenue from acquisitions (1)
(18)
(39)
376
441
760
2019 net revenue (1)
2,118
2,234
2,577
2,871
9,800
Organic growth (b/a)
-1.8%
+0.1%
-2.7%
-4.5%
-2.3%
(1) Acquisitions (Optix, Independent Ideas, Ecosys, Domaines
Publics, Payer Science, One Digital, The Shed, Kindred, Xebia, IDC
Creation, Brilliant, Soft Computing, E2 Media, Epsilon, Rauxa,
DigitasAffinity ID, McCready Bale Media, RDL, SearchForce) net of
disposals.
(2) EUR = USD 1.119 on average in 2019 vs. USD 1.180 on average
in 2018 EUR = GBP 0.877 on average in 2019 vs. GBP 0.885 on average
in 2018
New Business: Main wins in 2019
PUBLICIS COMMUNICATIONS
Google (USA), Barclays (UK), Samsung (UK & USA), Massage
Envy (USA), Cumberland Farms (USA), Nestlé (Australia), RAMS
Financial Group (Australia), Health Promotion Board (HPB)
(Singapore), Banco Safra (Brazil), Perdigão (Brazil), Distell
(South Africa), MillerCoors, Coors Light (USA), Facebook Messenger
(USA), Oppo (China), Nesqino (China), Nescafe (Brazil), Lincoln
China (China), Aramco Eastern Province Festival (Saudi Arabia),
Tesco Mobile (UK), Fan Duel Group (USA), Visit Victoria
(Australia), Total (France), Coral (UK), Cooper Tire (USA),
Servicemaster (USA), KeyBank (USA), The Cronos Group (Canada), CTC
(USA), Mondelez (USA), British Telecom (UK), Axa Group (Global),
Beiersdorf AG (Nivea) (Global), Citic Bank (Greater China), Tencent
(Greater China), Sephora (France), Align Technology (USA), KeyBank
(USA), TruGreen (USA), Tracfone (Saudi Arabia), G20 (Saudi
Secretariat) (Saudi Arabia), Tamn (Abu Dhabi Government) (UAE),
Bundesminidterium fuer Arbeit und Soziales (Germany), Adcock Ingram
(South Africa), Ferrero (Italy), Alphabet Fuhrparkmanagement GmbH
(Germany), Sanlam Asset Management ( South Africa), Lodha
Developers (India), Ambev (Brazil), Servicemaster (USA), Ladbrokes
Coral (UK & Ireland)
PUBLICIS MEDIA
Agata Katowice (Poland), Banco De Oro (Philippines), CDO
Foodsphere (Philippines), Coca-Cola (Philippines), Distell (South
Africa), Driven Brands (USA), E. Wedel (Poland), FCA (Canada), Flo
(Turkey), Friso (China), GreatCall (USA), Grupa Lotos (Poland), GSK
(Portugal, Spain, Thailand, Denmark), Honor (China), Honor Mobiles
(India), Huawei (China), Lactalis (Denmark, Malaysia, Spain),
McDonald's (Russia), NBC Universal (USA), ONCE (Spain), OVS
(Italy), Purplebricks (USA), Reckitt Benckiser (India, Philippines,
Spain), Tomorrow Bank (Thailand), Twitter (USA), Visa (Mexico),
Vuclip India (India), WeWork (China, Taiwan), Cassa Depositi e
Prestiti (Italy), Greenleaf (USA), Hero Electronix (India), Lotos
(Poland), LVMH (Middle East), mobile.de (Germany), mobile.de / eBay
Motors (Germany), Orlen (Poland), Polo Ralph Lauren (USA), Realme
Mobile (India), Tchibo (Czech Republic, Slovakia), Telkom (South
Africa), Vinamilk Corp. (Vietnam), LVMH (EMEA), Alaska Milk Corp.
(Philippines), Alcon (India, Mexico, USA), Australian Unity
(Australia), Edeka (Germany), Ferrero (Indonesia, New Zealand,
South Korea, Taiwan), Kellogs (Australia, New Zealand), Lowes
(Canada), LVMH (Austria, Belgium, Czech Republic, Denmark, Finland,
Germany, Greece, Norway, Poland, Portugal, Spain, Sweden, Ukraine),
Mattel (Canada), Maxis (Malaysia), Netto (Germany), Republic TV
(India), Three Hutchison (UK), Vistaprint (Canada, USA), Walmart
(India), Disney (Global), AXA (Global), Eurowings (EMEA), Abbott
Nutrition (Taiwan), Align Technology (Singapore, Taiwan), AXA (UK),
Century Pacific Food Inc. (Philippines), Coty (Germany, Italy, UK,
USA), Danone (China), Domitys (France), Eurowings (Austria,
Germany, Italy, Switzerland, UK), Ferrero (China, Thailand, UK),
Hero MotoCorp (India), Lapeyre (France), McDonald's (Taiwan),
McMillan (UK), Pernod Ricard (Taiwan), Pfizer (France, Italy,
Spain), Shanghai Disney Resort (China), Sodiaal Groupe (France),
Unieuro (Italy), UpGrad (India), Well Yes (USA), Wyeth Consumer
Healthcare/ Pfizer (China)
PUBLICIS SAPIENT
Goldman Sachs (USA), World Fuel Services Corporation (USA), UBS
AG (USA), Heathrow Airport (UK), Citigroup Technology (USA),
Bacardi-Martini (USA), Neiman Marcus (USA), Government of Abu Dhabi
(UAE), Telefonica (Spain), The Capital Group Inc. (USA), Northern
Trust (USA), Gibson Energy Inc. (Canada), BT Pensions (UK), ADNOC
(UAE)
PUBLICIS HEALTH
Abbott (USA & Canada), Abbvie (USA), Amazon (USA),
Boehringer Ingelheim (Global), Bristol-Myers Squibb (France), Roche
(Global & EMEA), Merck & Co. (USA), Novo Nordisk (USA),
Sanofi Genzyme (USA), Sunovion Pharmaceuticals, Inc. (USA &
Canada), Alfasigma (USA & Canada), Pfizer (Global), Supernus
Pharma (USA), AbbVie (Global), ACADIA Pharmaceuticals Inc. (USA),
GlaxoSmithKline (Global), HCA Healthcare (USA), Novartis (USA),
Oncopeptides (USA), Johnson & Johnson (USA), Regeneron
Pharmaceuticals (USA), Sanofi Pasteur (Global), Align Technology
(Global), Align Technology (Global), Arena Pharmaceuticals
(Global), Edward LifeSciences (USA & Canada), Parexel (Global),
Takeda (USA & Canada)
2019 press releases
08-01-2019 Publicis Groupe appoints Michael Rebelo as Chief
Executive Officer, Australia & New-Zealand
24-01-2019 Publicis Groupe appoints Bertilla Teo and Michael Lee
as co-Chief Executive Officers, Greater China
30-01-2019 Publicis Groupe finalizes the sale of its medical
representative division, PHS
06-02-2019 Publicis Groupe: 2018 annual results
07-02-2019 Publicis Groupe finalizes the acquisition of soft
computing
11-02-2019 Publicis Groupe announces the appointment of
Alessandra Girolami as VP, investor relations & strategic
financial planning
04-02-2019 Publicis Groupe enters into exclusive negotiations
with Ycor for the sale of its digital services subsidiary,
Proximedia
27-02-2019 Publicis Groupe Malaysia Appoints Abraham Varughese
as Chief Creative Officer
07-03-2019 Supervisory Board
26-03-2019 Publicis Groupe Named Adobe’s Digital Experience
Partner Of The Year For The Americas
01-04-2019 Statement
03-04-2019 Publicis Groupe Agencies Score High Marks on The
Human Rights Campaign’s 2019 Corporate Equality Index
09-04-2019 Publicis Groupe Germany appoints Frank-Peter Lortz as
CEO of Publicis Communications Germany
14-04-2019 Publicis Groupe Announces Plan to Acquire Epsilon
14-04-2019 Publicis Groupe: 1st quarter 2019 revenue
17-04-2019 Availability of the 2018 Reference Document
24-04-2019 2018 dividend
02-05-2019 Mark Tutssel Leaving Leo Burnett after Illustrious
Three-Decade Career
07-05-2019 Maurice Lévy inducted into the Advertising Hall of
Fame 2019 by the American Advertising Federation (AAF)
16-05-2019 Renault Group adds a new dimension to its on-board
editorial content platform and enters into a strategic agreement
with Publicis Groupe
23-05-2019 Publicis Groupe announces the appointment of Delphine
Stricker as VP, Director of Communications
28-05-2019 Significant progress on the financing of the Epsilon
acquisition
29-05-2019 Combined General Shareholders’ Meeting
05-06-2019 Publicis Groupe successfully places a 2.25 billion
euros bond issue
17-06-2019 Publicis Groupe UK strengthens its “country model”
with the appointment of Ben Mooge as Chief Creative Officer
18-06-2019 Publicis Sapient Announces Appointment of John Maeda
as Chief Experience Officer
02-07-2019 Publicis Groupe finalizes the acquisition of
Epsilon
04-07-2019 Publicis Groupe announces appointments in North
Asia
11-07-2019 Publicis Groupe announces appointments in the United
States to accelerate its transformation
22-07-2019 Viva Technology announces the dates of its 5th
edition Rendez-vous in Paris from 11 to 13 June 2020
14-08-2019 Description of the share buyback program authorized
by the Combined Ordinary and Extraordinary Shareholders' Meeting of
May 29, 2019
19-08-2019 Publicis Groupe acquires Rauxa in the United States,
an integrated marketing agency
04-09-2019 Publicis Groupe announces appointments in North
Asia
08-10-2019 Publicis Groupe launches Epsilon France
10-10-2019 Publicis Groupe: 3rd Quarter 2019 Revenue
05-11-2019 Publicis Groupe wins partnership for AXA's
advertising creation, strategy and media buying in four of its key
markets
22-11-2019 Publicis Groupe appoints Margaret Key as Chief
Executive Officer of MSL APAC and MEA
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: Operating margin before depreciation.
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 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)
2019
2018
Net revenue(1)
9,800
8,969
Pass-through revenue
1,201
982
Revenue
11,001
9,951
Personnel costs
Other operating costs
(6,073)
(2,683)
(5,747)
(2,155)
Operating margin before depreciation
and amortization
2,245
2,049
Depreciation
(excluding acquired intangible assets)
(586)
(526)
Operating Margin
1,659
1,523
Amortization of intangibles from
acquisitions
(204)
(69)
Impairment loss
(209)
(131)
Non-current income and expenses
21
(20)
Operating income
1,267
1,303
Financial expense
Financial income
Cost of net financial debt
Revaluation of earn-out payments
Other financial income and expenses
(137)
112
(25)
(22)
(66)
(81)
70
(11)
(13)
(60)
Pre-tax income of consolidated
companies
1,154
1,219
Income taxes
(305)
(285)
Net income of consolidated
companies
849
934
Share of profit of associates
(5)
(4)
Net income
844
930
Of which:
- Net income attributable to
non-controlling interests
3
11
Net income attributable to equity
holders of the parent company
841
919
Per-share data (in euros) - Net
income attributable to equity holders of the parent company
Number of shares
234 293 034
229,231,677
Earnings per share
3,59
4.01
Number of diluted shares
236 608 597
234,564,382
Diluted earnings per share
3,55
3.92
(1) 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.
Consolidated statement of comprehensive income
(in millions of euros)
2019
2018
Net income for the period
(a)
844
930
Comprehensive income that will not be
reclassified to income statement
- Actuarial gains (and losses) on defined
benefit plans
(29)
22
- Deferred taxes on comprehensive income
that will not be reclassified to income statement
5
(2)
Comprehensive income that may be
reclassified to income statement
- Remeasurement of hedging instruments
(84)
6
- Consolidation translation
adjustments
78
73
Total other comprehensive income
(b)
(30)
99
Total comprehensive income for the
period (a) + (b)
814
1,029
Of which:
- Total comprehensive income for the
period attributable to non-controlling interests
3
10
- Total comprehensive income for the
period attributable to equity holders of the parent company
811
1,019
Consolidated balance sheet
(in millions of euros)
December 31, 2019
December 31, 2018
Assets
Goodwill, net
11,629
8,751
Intangible assets, net
1,979
1,125
Right-of-use assets related to leases
2,122
1,732
Property, plant and equipment, net
720
611
Deferred tax assets
143
150
Investments in associates
32
62
Other financial assets
218
215
Non-current assets
16,843
12,646
Inventories and work-in-progress
411
367
Trade receivables
10,233
9,115
Assets on contracts
1,002
874
Other current receivables and assets
757
689
Cash and cash equivalents
3,413
3,206
Assets held for sale
-
183
Current assets
15,816
14,434
Total assets
32,659
27,080
Equity and
Liabilities
Share capital
96
94
Additional paid-in capital and retained
earnings, Group share
7,305
6,759
Equity attributable to holders of the
parent company
7,401
6,853
Non-controlling interests
(9)
0
Total equity
7,392
6,853
Long-term borrowings
4,286
2,425
Long-term lease liabilities
2,196
1,648
Deferred tax liabilities
413
446
Long-term provisions
426
384
Non-current liabilities
7,321
4,903
Trade payables
13,411
12,176
Liabilities on contracts
353
284
Short-term borrowings
1,602
449
Short-term lease liabilities
336
393
Income taxes payable
351
365
Short-term provisions
170
125
Other creditors and current
liabilities
1,723
1,432
Liabilities held for sale
-
100
Current liabilities
17,946
15,324
Total equity and liabilities
32,659
27,080
Consolidated statement of cash
flows
En millions of euros)
2019
2018
Cash flow from
operating activities
Net income
844
930
Neutralization of non-cash income and
expenses:
Income taxes
305
285
Cost of net financial debt
25
11
Capital losses (gains) on disposal of
assets (before tax)
(20)
20
Depreciation, amortization and impairment
loss
999
726
Share-based compensation
49
63
Other non-cash income and expenses
88
76
Share of profit of associates
5
4
Dividends received from associates
2
2
Taxes paid
(349)
(328)
Change in working capital
requirements(1)
394
153
Net cash flows generated by (used in)
operating activities (I)
2,342
1,942
Cash flow from
investing activities
Purchases of property, plant and equipment
and intangible assets
(232)
(207)
Disposals of property, plant and equipment
and intangible assets
7
11
Purchases of investments and other
financial assets, net
20
(11)
Acquisitions of subsidiaries
(4,143)
(260)
Disposals of subsidiaries
88
19
Net cash flows generated by (used in)
investing activities (II)
(4,260)
(448)
Cash flow from
financing activities
Dividends paid to holders of the parent
company
(285)
(210)
Dividends paid to non-controlling
interests
(12)
(10)
Proceeds from borrowings
3,413
11
Repayment of borrowings
(485)
(159)
Repayment of lease liabilities
(403)
(374)
Interest paid on lease liabilities
(77)
(58)
Interest paid
(96)
(69)
Interest received
107
66
Buyouts of non-controlling interests
(40)
(21)
Net (buybacks)/sales of treasury shares
and warrant
7
9
Net cash flows generated by (used in)
financing activities (III)
2,129
(815)
Impact of exchange rate fluctuations
(IV)
4
133
Change in consolidated cash and cash
equivalents (I + II + III + IV)
215
812
Cash and cash equivalents on January 1
3,206
2,407
Bank overdrafts on January 1
(14)
(27)
Net cash and cash equivalents at
beginning of year (V)
3,192
2,380
Cash and cash equivalents at closing
date
3,413
3,206
Bank overdrafts at closing date
(6)
(14)
Net cash and cash equivalents at end of
the year (VI)
3,407
3,192
Change in consolidated cash and cash
equivalents (VI - V)
215
812
(1) Breakdown of change in working capital
requirements
Change in inventory and work in
progress
(14)
42
Change in trade receivables and other
receivables
(529)
(274)
Change in accounts payable, other payables
and provisions
937
385
Change in working capital
requirements
394
153
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
Minority interests
Total equity
231,240,308
December 31, 2018
94
3,926
2,875
(263)
221
6,853
-
6,853
Net income
841
841
3
844
Other comprehensive income, net
of tax
78
(108)
(31)
(0)
(31)
Total comprehensive income for
the year
841
78
(108)
811
3
814
4,481,915
Dividends
2
206
(493)
(285)
(12)
(297)
522,277
Share-based compensation, net of
tax
48
48
48
Effect of acquisitions and
commitments to buy out non-controlling interests
(40)
(40)
(40)
183,068
Equity warrant exercise
0
5
5
5
529,259
(Buybacks)/sales of treasury
shares
9
9
9
236,956,827
December 31, 2019
94
4,137
3,240
(185)
113
7,401
(9)
7,392
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
Minority interests
Total equity
226,295,805
January 1, 2018
92
3,680
2,336
(337)
195
5,966
2
5,968
Net income
919
919
11
930
Other comprehensive income, net
of tax
74
26
100
(1)
99
Total comprehensive income for
the year
919
74
26
1,019
10
1,029
4,323,480
Dividends
2
243
(455)
(210)
(10)
(220)
210,612
Share-based compensation, net of
tax
63
63
63
Effect of acquisitions and
commitments to buy out non-controlling interests
(1)
(1)
(2)
(3)
87,984
Equity warrant exercise
0
3
3
3
322,427
(Buybacks)/sales of treasury
shares
13
13
13
231,240,308
December 31, 2018
94
3,926
2,875
(263)
221
6,853
-
6,853
Earnings per share (basic and diluted)
(in millions of euros, except for share
data)
2019
2018
Net income used for the calculation of
earnings per share
Group net income
A
841
919
Impact of dilutive instruments:
- Savings in financial expenses linked to
the conversion of debt instruments, net of tax
-
-
Group net income – diluted
B
841
919
Number of shares used to calculate
earnings per share
Number of shares at January 1
235,249,801
230,627,725
Shares created over the year
2,457 867
2,426,498
Treasury shares to be deducted (average
for the year)
(3,414 634)
(3,822,546)
Average number of shares used for the
calculation
C
234 293 034
229,231,677
Impact of dilutive instruments:
-Free shares and dilutive stock options
(1)
1 951 354
4,815,491
-Equity warrants (1)
364 209
517,214
Number of diluted shares
D
236,608,597
234,564,382
(in euros)
Earnings per share
A/C
3.59
4.01
Diluted earnings per share
B/D
3.55
3.92
(1) Only stock options and warrants with a dilutive impact, i.e.
whose strike price is lower than the average strike price, are
included in the calculation. At December 31, 2019 the stock options
not yet exercised have not been taken into consideration due to
their accretive impact on earnings per share.
Headline earnings per share (basic and diluted)
(in millions of euros, except for share
data)
2019
2018
Net income used to calculate headline
earnings per share(1)
Group net income
841
919
Items excluded:
- Amortization of intangibles from
acquisitions, net of tax
153
55
- Impairment loss(2), net of tax
163
103
- Main capital gains and losses on
disposals of asset and change in fair value of financial assets,
net of tax
(21)
10
- Epsilon acquisition related costs
30
- Net effect of the tax reform in the
United States
-
(18)
- Revaluation of earn-out payments
22
13
Headline Group net income
E
1,188
1,082
Impact of dilutive instruments:
- Savings in financial expenses related to
the conversion of debt instruments, net of tax
-
-
Headline Group net income, diluted
F
1,188
1,082
Number of shares used to calculate
earnings per share
Number of shares at January 1
235,249,801
230,627,725
Shares created over the year
2,457 867
2,426,498
Treasury shares to be deducted (average
for the year)
(3,414 634)
(3,822,546)
Average number of shares used for the
calculation
C
234 293 034
229,231,677
Impact of dilutive instruments:
- Free shares and dilutive stock
options
1 951 354
4,815,491
- Equity warrants
364 209
517,214
Number of diluted shares
D
236,608,597
234,564,382
(in euros)
Headline earnings per share(1)
E/C
5.07
4.72
Headline earnings per share - diluted
(1)
F/D
5.02
4.61
(1) EPS after elimination of the impairment losses, amortization
of intangibles from acquisitions, the main capital gains and losses
on disposal of assets, the change in the fair value of financial
assets, the revaluation of earn-out payments and Epsilon
acquisition related costs.
(2) this amount includes the impairment losses on right-of-use
assets related to leases for euro 95 million in 2019 and euro 114
million in 2018
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200205005907/en/
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