PARIS, July 29, 2010 /PRNewswire-FirstCall/ --
Second quarter 2010
(EUR million)
- Revenue 1,376 (+21.3%)
- Organic growth +7.1%
First half 2010
(EUR million)
- Revenue 2,538 (+14.9%)
- Organic growth +5.3%
- Operating margin 369 (+28.6%)
- Operating margin rate 14.5%
- Net income (Group share) 213 (+27.5%)
- Free Cash Flow (1) 277 (+42%)
- Headline diluted EPS (2) 1.00 euro (+12%)
- Debt/equity ratio 0.20
(1) Before changes in WCR
(2) After elimination of impairment, amortization of intangibles arising on acquisitions and the tax credit arising on the deferred tax liability on the Oceane 2014 convertible bond.
Maurice Levy, Chairman and Chief Executive Officer of Publicis Groupe declares:
"With organic growth of 7.1% for the second quarter of 2010 and 5.3% for the half-year, an operating margin of 14.5% and net income up by 27.5%, Publicis Groupe has once again given proof of its energy and ability to create value, even in the aftermath of the worst global economic crisis in many years.
This growth is the result of a strategy that has been effectively executed over a number of years. We were quick to take the digital route, gaining a decisive lead over our competitors and providing clients with the best and most innovative solutions for the new landscape being shaped by the explosion of digital technology.
We also opted for expansion in emerging markets. The economic crisis may have slowed the pace of their growth, but ZenithOptimedia's latest estimates for 2011 and 2012 bode well for strong growth.
The challenges our clients face demand from us greater inventiveness, creativity and innovation, and relentless operational efforts to ensure that they win whatever the circumstances. I would like to thank them for their confidence, and to pay tribute to the hard work of all our teams who have performed wonders within the constraints of strict cost controls, enabling Publicis Groupe to emerge stronger than ever from the crisis.
Tight cost containment since end 2008 and strong growth in revenue have boosted operating margin to an impressive 14.5%, despite the fact that Razorfish is still in the integration phase with a margin that, while improving, is still well below average for the Groupe.
Without lapsing into the euphoria that these half-year results for our Groupe might warrant, I remain firmly convinced that Publicis Groupe will succeed in outperforming the market in terms of both growth and margin."
At its meeting on July 28, 2010, chaired by Mrs. Elisabeth Badinter, the
Supervisory Board of Publicis Groupe examined the first half results for 2010
presented by Mr. Maurice Levy, Chairman and Chief Executive Officer of
Publicis Groupe.
Key figures
EUR million, except for 1st half 2010 1st half 2009 2010/2009
percentages and
per-share data (EUR)
Income statement data
Revenue 2,538 2,209 14.9%
Operating margin before
depreciation and amortization 422 333 26.7%
As % of revenue 16.6% 15.1%
Operating margin 369 287 28.6%
As % of revenue 14.5% 13.0%
Operating income 353 257 37.4%
Net income attributable to Publicis
Groupe 213 167 27.5%
Earnings per share (1) 1.04 0.83 25.3%
Diluted earnings per share (2) 0.95 0.82 15.8%
Balance sheet data June 30, 2010 June 30, 2009
Total assets 14,458 11,408
Shareholders' equity 3,090 2,418
(1) The average number of shares used to calculate earnings per share was 204.5 million for 1st Half 2010 and 200.8 million for 1st Half 2009.
(2) The average number of shares used to calculate diluted earnings per share was 237.1 million for 1st Half 2010 and 206.3 million for 1st Half 2009. This includes stock options, free shares, equity warrants and convertible bonds with a dilutive effect on EPS. For the first six months of 2010, the instruments that diluted EPS were the Oceane convertible bonds, equity warrants, free shares and certain tranches of stock options with a strike price below the average price over the period.
Analysis of key figures
I. First half 2010 activity
The global economy rallied over the first half of 2010. After forecasting a 0.9% increase in 2010 global advertising expenditure in its December 2009 forecast, ZenithOptimedia upgraded its forecast in April this year to 2.2% growth and upped its latest estimate yet again, on July 19, to 3.5%. This steady improvement in growth forecasts is most encouraging.
As the advertising market recovered, Publicis Groupe posted an increase of 14.9% in reported revenue for the first half and organic growth of +5.3%.
Second quarter revenue was up by 21.3% and organic growth rose to 7.1%.
Revenue in first half 2010
Consolidated revenue for the first half of 2010 was EUR 2,538 million compared to EUR 2,209 million for the first half of 2009, an increase of 14.9% (exchange rate impact was positive at EUR 55 million).
Organic growth was 5.3%.
First half growth reflects the strong recovery in advertising expenditure after the record slump triggered by the 2009 economic crisis. The larger networks, in particular Leo Burnett and Publicis Worldwide along with VivaKi, made the most of the upturn, and digital activities maintained their strong growth trend.
The breakdown of consolidated revenue for the first half of 2010 is as follows: 33% from advertising, 20% from media and 47% from specialized agencies and marketing services (including digital activities).
Breakdown of first half 2010 revenue by region
(EUR million) Revenue Organic Growth
1st half 2010 1st half 2009
Europe 805 738 +3.1%
North America 1,258 1,061 +6.6%
Asia-Pacific 286 238 +6.0%
Latin America 126 109 +10.8%
Africa and Middle East 63 63 -3.3%
Total 2,538 2,209 +5.3%
Almost all the regions, Europe included, saw a return to growth, with the exception of Africa and the Middle East, which is still suffering from Dubai's financial crisis.
North America continues to enjoy good growth. Organic growth for the USA was 7.2%, fuelled by strong growth from all the agencies and significant contributions from the healthcare and digital activities, the latter accounting for 42.5% of the region's revenue.
The Asia Pacific region is growing again, thanks largely to India and Korea.
Every country in Latin America except Chile reported growth.
Expressed in US dollars, first half revenue was USD 3,362 million, an increase of 14.3%.
Revenue in 2nd quarter 2010
Consolidated second quarter 2010 revenue was EUR 1,376 million, an increase of 21.3% on the figure of EUR 1,134 million for the corresponding period in 2009 (the exchange rate impact was positive at EUR 73 million).
Organic growth was +7.1% in the second quarter, a significant improvement on first quarter organic growth of +3.1%.
The second quarter undoubtedly benefited from a low basis of comparison, but the marked upswing in advertising business seen in the first quarter was also maintained.
Growth was also fuelled by new business wins in 2009 and by an increase in advertising spending by major clients.
- Breakdown of 2nd quarter 2010 revenue by region
(EUR million) Revenue Organic Growth
2nd quarter 2nd quarter
2010 2009
Europe 437 381 +7.3%
North America 679 535 +8.1%
Asia-Pacific 154 123 +5.3%
Latin America 71 58 +11.5%
Africa and Middle East 35 37 -10.4%
Total 1,376 1,134 +7.1%
Europe performed well in the second quarter. Only Africa and the Middle East posted negative figures.
Operating margin and operating income
Operating margin before depreciation and amortization was EUR 422 million in first half 2010, up 26.7% from EUR 333 million for the first half of 2009.
Operating margin was EUR 369 million compared with EUR 287 million for the same period in 2009, an increase of 28.6%.
Operating margin rate for the first half of the year was 14.5%, up from 13% for the same period in 2009. This reflects the significant upturn in activity as compared with first half 2009, and continued tight control over costs. The effects of measures taken in 2009, particularly with regard to containing personnel costs, are beginning to be felt.
Operating income for first half 2010 was EUR 353 million compared to EUR 257 million for the corresponding period in 2009, an increase of 37.4%.
Net income
Net income attributable to the Group was EUR 213 million, an increase of 27.5% on the net income of EUR 167 million reported for the first half of 2009.
Net income includes a net financial expense of EUR 42 million and a tax charge of EUR 89 million for the half-year.
Free Cash Flow
The Groupe's free cash flow, excluding changes in WCR, was up sharply (+42% on the corresponding period of 2009) at EUR 277 million. The increase is directly linked to the increase in operating margin before depreciation and amortization.
Net financial debt at June 30, 2010
Net financial debt was EUR 618 million at June 30, 2010 compared to 899 EUR million at June 30, 2009. This figure includes the impact of the partial buyback of Publicis Groupe shares held by SEP Badinter-Dentsu at a cost of EUR 217.5 EUR million. Net financial debt at December 30, 2009 was EUR 313 million, the raise observed at June 30,2010 reflecting the usual seasonal effect.
The Groupe's average net debt for the first half of 2010 was EUR 673 million, down sharply on the figures of EUR 1, 002 million for first half 2009 and EUR 929 million for the full year 2009.
The Groupe's available liquidity position at June 30, 2010 was EUR 3.6 billion.
Shareholders' equity at June 30, 2010
Consolidated shareholders' including minority interests was EUR 3,111 million at June 30, 2010, compared with EUR 2,838 million at December 31, 2009. This includes the impact of allocation of 2009 income (dividends of EUR 107 million distributed).
The debt/equity ratio thus rose from 0.14 at December 31, 2009 to 0.20 at June 30, 2010.
II. NETWORKS
The upturn in advertising markets over the course of the first half of the year is benefiting all the Groupe's networks. The growing contribution from digital activities, up to 28.1% of first half revenue compared with 20.7% (at 2010 exchange rate) for the first half of 2009, once again confirms the Groupe's strategic decision to help its clients keep pace with a changing consumer landscape and the new digital audience. Digital activities are now making their way into every one of the Groupe's networks, bringing the benefits of expertise and new ideas in virtually every area of digital operations, be it search, display, or the social and mobile networks made possible by the creation of the VivaKi Nerve Center (and at the same time avoiding duplication of investments).
III. COST CONTROL
The Groupe continues to exercise tight control over its costs. Cost optimization programs are the focus of unrelenting attention and are ongoing. The deployment of shared service centers, initiated some years ago, continues, as does the process of regionalization. The "Americas" platform, designed to serve the entire continent, is scheduled to go fully operational at the end of this year. The rollout (first local and subsequently global) of ERP, made possible by the integration of most agencies into shared service centers and the adoption of shared processes, continues. The Group expects to achieve a significant reduction in its operating costs from this investment, through global harmonization of processes and systems as from 2012.
Thanks to a solid balance sheet and improved cost control, the Groupe is well placed to meet market needs and sharpen its competitive edge.
IV. New BUSINESS: USD 2.1 BILLION IN NET wins
Publicis Groupe took in USD 2.1 billion in net new business in the first half of 2010, clear testimony to the attractiveness of its products and services (see Appendix for list).
V. ACQUISITIONS
Publicis Groupe has embarked on a process of securing long-term growth by ramping up its engagement in digital activities and emerging economies, both of which are growth drivers for the communications sector today and in the future.
A significant number of targets have been identified, with special interest focusing on the opportunities offered by China.
On March 30, Publicis Groupe announced it had acquired a minority stake in Taterka Comunicacoes (Taterka), an advertising agency based in Sao Paulo, Brazil.
On April 6, 2010, the Groupe acquired Canadian agency In-Sync. Founded in 1989, the Toronto-based agency operates in the health and wellness space, specializing in market research consultancy and offering innovative marketing solutions to its biopharma clients.
At the end of April, Publicis Groupe bought out the minority interests in W&K and holds now 100% of the capital of this Chinese agency, now rebranded Leo Burnett Beijing Communications Co., Ltd.
On May 19, 2010, Publicis Groupe acquired Resolute Communications Ltd. Founded in 2002, Resolute Communications provides healthcare communications programs spanning strategic consulting, medical education, and media and public relations. Resolute is headquartered in London with an office in New York. Resolute will be merged with Publicis Life Brands in London to form a new entity renamed Publicis Life Brands Resolute, that will further entrench Publicis Healthcare Communications Group (PHCG) as a leader in the United Kingdom.
VI. FINANCE
January 2010 saw the early redemption of some of the outstanding 2018 Oceane convertible bonds. According to the 2018 Oceane prospectus, any holder was entitled to request early redemption of all or part of its Oceane bonds at the early redemption price of EUR 45.19 per bond. At the early redemption date, i.e. January 18, 2010, a total of 617,985 Oceane bonds were repaid early for a total amount of EUR 28 million.
The number of Oceane bonds subsequently outstanding is 2,624,538, representing 14.9% of the number initially issued (17,624,521).
Furthermore, in view of the authorization granted by the Combined Annual General Meeting of the shareholders on June 9, 2009, Publicis Groupe SA entered into an agreement on January 8, 2010, with an authorized intermediary, with a view to purchasing 2.7 million Publicis Groupe shares. This authorization was granted for a period of eighteen months from June 9, 2009, i.e. until December 8, 2010. To date, 2,482,440 shares have been purchased under this program.
On May 10, 2010 Publicis Groupe purchased from Dentsu Inc. a block of 7,500,000 of its own shares, held by SEP Dentsu-Badinter, to be cancelled. The total price paid for the block was EUR 217.5 million, equivalent to EUR 29 per share. The shares were immediately cancelled.
VII. RECENT EVENTS
Acquisitions
On July 12, 2010, Publicis Groupe announced its acquisition of G4, a Beijing-based advertising agency. Launched in 2009, G4 offers integrated communications solutions, including advertising, design and strategic consulting, to Nestle in China. G4 has rebranded as Publicis G4 and will join forces with the Publicis Beijing Nestle team. Concentrating all the skills and resources dedicated to Nestle within Publicis G4 will provide an enhanced service to this key customer throughout Greater China and the Asia region.
New Business
New business maintained its dynamic pace at the beginning of second half 2010 after total gains of USD 1 billion for the second quarter.
VIII. Outlook
For the second time in succession, ZenithOptimedia has upgraded its forecasts of growth in global advertising expenditure for 2010, most recently to 3.5% growth. These significantly higher forecasts confirm the upturn in the market, after a year of record decline in global advertising expenditure in 2009.
Publicis Groupe's growth rates for the first two quarters of 2010 are a mark of excellent performance and testimony to its judicious strategic choices, with digital activities continuing to expand across all the Groupe's networks and creating the right conditions for innovation and value creation. Emerging economies are returning to growth rates more commensurate with their level of development and opening up new prospects for the Groupe.
These two cornerstones offer assurances of growth both now and in the future.
Investments in talent and in digital activities are still very much ongoing, made possible by strict cost control and a sound financial situation.
With many emerging economies, China in particular, returning to high growth, a recovering US economy (although flat since May), and certain European countries (including France and the UK) holding up well, Publicis Groupe confirms its target of outperforming the market on growth for full year 2010.
"This document contains forward-looking statements. The use of the words "aim(s)," "expect(s)," "feel(s)," "will," "may," "believe(s)," "anticipate(s)" and similar expressions in this press release are intended to identify those statements as forward looking. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than in connection with applicable securities laws, Publicis Groupe undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. Publicis Groupe urges you to review and consider the various disclosures it made concerning the factors that may affect its business carefully, including the disclosures made to the French financial authority (AMF)"
About Publicis Groupe
Publicis Groupe [Euronext Paris: FR0000130577] is the world's third largest communications group. In addition, it is ranked as the world's second largest media counsel and buying group, and is the first global network in digital and healthcare communications. With activities spanning 104 countries on five continents, the Groupe employs approximately 46,000 professionals. Publicis Groupe offers local and international clients a complete range of advertising services through three global advertising networks, Leo Burnett, Publicis, Saatchi & Saatchi, two multi-hub networks, Fallon and 49%-owned Bartle Bogle Hegarty, as well as New York-based Kaplan Thaler Group. Media consultancy and buying is offered through the two first ranked worldwide networks, Starcom MediaVest Group and ZenithOptimedia; and interactive and digital marketing led by the two first ranked Digitas and Razorfish networks. Publicis Groupe launched VivaKi to leverage the combined scale of the autonomous operations of Digitas, Denuo, Razorfish, Starcom MediaVest Group and ZenithOptimedia to develop new services, tools, and next generation digital platforms. Publicis Groupe's specialized agencies and marketing services offer healthcare communications with Publicis Healthcare Communications Group (PHCG, the first network in healthcare communications), sustainability communications and multicultural communications. With MS&LGroup, one of the world's top three PR and Events networks, expertise ranges from corporate and financial communications to public relations and public affairs, branding, social media marketing and events, sports marketing and events.
Web site: http://www.publicisgroupe.com
Appendices
New Business - 1st Half 2010
USD 2.1 billion (net)
Key wins
Digitas
Electronic Arts (Brazil), Topper (Brazil), CA (USA), Goodyear (USA), Aflac (USA), Sears (USA), Whitewave (USA), Olay (Hong Kong/ Taiwan), Airtel (India), Nestle (India), Renault ZE (France)
Fallon
Cadbury Flake (UK), French Connection (global), Nokia (global), The Cosmopolitan of Las Vegas. (USA), Cadillac (USA)
Leo Burnett
Chrysler (UK, Germany, Turkey), Samsung (Malaysia, Czech Republic, Thailand, Kazakhstan), COI/BIS (UK), Research in Motion- Blackberry (UK), DUFRY- duty free (Mexico), Sigma Alimentos (Mexico), Koleston (Colombia), Nestle (Guatemala), Sanofi-Aventis (Guatemala), Canon (Thailand), Amway (China), Siemens (China), Merrill Lynch (Korea), British Council (Sri Lanka), BMW (Malaysia), Pilipinas Shell (Philippines), Arla Food (Russia), Nycomed (Latvia), The ITI Group (Poland), Altıparmak (Turkey), El-Bi Electrics (Turkey), Turkcell (Turkey), Ulker (Turkey), Delipapier Sofidel (France), Campero (Guatemala, Salvador), V-Inspired (UK), Cemex (Costa Rica), World Gold Council (Turkey), Dubai International Film Festival, Tele2 (Kazakhstan), Fiat (Mexico), Cipher Lab (Taiwan)
MS&L Group
What's on (India), World Gold Council (China), Central agency for national insurance (France), National Defense Ministry (France), Klepierre Segece (France), Pernod Ricard (France), RapidShare (Germany), Apoteket (Sweden)
Publicis Worldwide
Dolce Gusto (France, USA), Chrysler (Canada), City of Toronto (Canada), Metro (Canada), Siemens Energy (Germany, Asia), Telefonica / Movistar (Spain), Sky News / Online project (UK), Cafe do Brasil (Italy), Orogel (Italy), J.K. Helene Curtis (India), Reserve Bank of India / VIP Bags (India), SCMP Classified Post (Hong Kong), Le Monde (France), Ricola (France), Descamps (France), Carte d'Or (France), Cyrillus (France), GT Land Plaza (China), La Halle (France), Aeroports de la Cote d'Azur (France), Nestle / Dairy Culinary (Mexico), Bupa (UK), Concha y Toro / VCT (Brazil), Hamburger / Financial (Germany), Bud Light (Canada), Beefeater Gin (UK), Randstad (UK), Belle Avenue (Thailand), Black Canyon (Thailand), Wellcome / Social business (Germany), Emirates Airlines (Netherlands), Stivoro / Anti-smoking campaign (Netherlands), Musee du Louvre (France), Losc / Lille Football Club (France), Hammerson (France), Shanghai World Expo's / Information & communication pavilion account, Virgin Mobile (Australia), City of Dreams / Digital account (Hong Kong), Indigo Books / Largest Canadian book retailer, (Canada), Hasbro (Canada), Canadian Olympic Foundation (Canada), Fiat / Punto Evo / International launch in Spain, Portugal, Netherlands, Belgium, Ireland, Poland ( France), BNP Paribas / Investment Partners (Netherlands), Nestle Maggi (Malaysia)
Saatchi & Saatchi
Arla Foods - Lurpak (Global except for UK), BNP Paribas (Poland), Red.es digital TV (Spain), Chrysler & Dodge SUV (China), Vinda (China), Carlsberg: Dali, Wusu, XiXia (China), Petrobras (Brazil), Sanitarium (New Zealand), Toyota (Italy)
Starcom MediaVest Group
Honda (Germany, Italy, Norway, Poland, Sweeden, UK), CBS Film (USA), Turner (USA), Napa Auto Parts (USA), Nintendo (Netherlands), Dutch Government (Netherlands), Van Haren (Netherlands), Silesia Voivodship (Poland), Ministry of Environment (Poland), Skyways (Sweeden), FEW Online Retail (Sweeden), Prudential Direct Insurance (Taiwan), Coca-Cola (France), Mitre 10 (Australia), Mars Wrigley (China), in.gr (Greece), General Mills (China), Supermac's (Ireland), AIB (Ireland), IKKS (Netherlands), Provident (Poland), Aflac (USA), Avon (USA), Kraft/Cadbury (global), American Egg Board (USA)
The Kaplan Thaler group
Aflac (USA)
ZenithOptimedia
Aviva (global), Reckitt Benckiser (global), Beijing Tourism Board, China Merchant Bank, Maoduoli (China), Electrolux (Vietnam), Georgia Pacific (Romania), Vivartia (Romania), BN Telecom (Turkey), Dyo (Turkey), Pegasus Airlines (Turkey), SAB Miller (Ecuador), Axtel (Mexico), Lindt (United Arab Emirates), Catalonian Government (Spain), Ministry of Environment (Spain), Perfume Shop (UK), Remington Consumer Products (USA), Beijing Lan Hai Cold Mineral Water (China), Warner Bros (Singapore), Universal Pictures (Mexico), Hubei Mobile (China), Reckitt Benckiser (China), AS Watson (APAC)
Glossary
Operating margin rate: operating margin/revenue.
Average half-year net debt: half-year average of average monthly net debt.
Free cash flow: cash flow from operations minus capital expenditures for tangible and intangible fixed assets, excluding acquisitions.
Net new business: this figure is derived not from financial reporting but from estimated media-marketing budgets based on annual business (net of losses) from new and existing clients.
For further information, please visit our website: http://www.finance.publicisgroupe.com
2010 Press Releases
08/01/10 Share repurchase program
11/01/10 Partnership between the Women's Forum and Terrafemina
18/01/10 OCEANES 2018 - early redemption
05/02/10 Lov Group and Publicis Groupe in exclusive negotiations
17/02/10 2009 Annual Results
16/03/10 Management Board bonuses
30/03/10 Publicis Groupe acquires a minority stake of Brazilian agency
Taterka Comunicacoes
06/04/10 Publicis Groupe Acquires In-Sync Healthcare Agency
22/04/10 Publicis Groupe: First Quarter 2010 Revenue - Back to Growth
26/04/10 Re-Elections at the Publicis Groupe Supervisory Board
29/04/10 Publicis Groupe Acquires Remaining Capital of Leo Burnett / W&K
Beijing Advertising Co. Ltd
10/05/10 Publicis Groupe Announces its Acquisition from Dentsu Inc. of
7,500,000 of its own Shares in Order to Cancel Them
19/05/10 Publicis Groupe acquires Resolute Communications, in Healthcare
Communications
01/06/10 Publicis Groupe Annual General Shareholders' Meeting - Dividend
set at 0.60 Euros per Share
01/06/10 Supervisory Board and Management Board of Publicis Groupe
28/06/10 Daniele Bessis Joins Publicis Groupe as CEO of Re:Sources
Worldwide
12/07/10 Publicis Groupe Acquires G4 Advertising co. Ltd. in China
For further information: http://www.publicisgroupe.com
Publicis Groupe
Consolidated financial statements - June 30, 2010 (unaudited)
Consolidated income statement
(in millions of euros) June 30, June 30, 2009
2010 2009
Revenue 2,538 2,209 4,524
Personnel expenses (1,613) (1,423) (2,812)
Other operating expenses (503) (453) (940)
Operating margin before depreciation
and amortization 422 333 772
Depreciation and amortization expense
(excluding intangibles arising on
acquisition) (53) (46) (92)
Operating margin 369 287 680
Amortization of intangibles arising on
acquisition (17) (15) (30)
Impairment - (20) (28)
Non-current income (expense) 1 5 7
Operating income 353 257 629
Interest expense (40) (34) (73)
Interest income 6 9 12
Cost of net financial debt (34) (25) (61)
Other financial income (expenses) (8) (2) (9)
Income of consolidated companies before
taxes 311 230 559
Income taxes (89) (59) (146)
Net income of consolidated companies 222 171 413
Share in net income of associates - 1 4
Net income 222 172 417
Of which:
- Net income attributable to
non-controlling interests
(Minority interests) 9 5 14
- Net income attributable to equity
holders of the parent company 213 167 403
Per share data (in euros) - Net income
attributable to equity holders of the
parent company
Number of shares 204,545,563 200,760,562 202,257,125
Net earnings per share 1.04 0.83 1.99
Number of shares - diluted 237,073,116 206,261,458 220,867,344
Net earnings per share - diluted 0.95 0.82 1.90
Consolidated statement of comprehensive income
(in millions of euros) June 30, June 30, 2009
2010 2009
Net income for the year (a) 222 172 417
Other comprehensive income
- Valuation of available-for-sale
investments at fair value (1) 4 12
- Actuarial gains and losses on defined
benefit plans (24) (16) (4)
- Translation of foreign operations 431 (12) (59)
- Deferred taxes on other comprehensive
income 7 5 1
Other comprehensive income for the period
(b) 413 (19) (50)
Total comprehensive income for the period
(a) + (b) 635 153 367
Of which:
- Comprehensive income attributable to
non-controlling interests (Minority
interests) 18 7 17
- Comprehensive income attributable to
Equity holders of the parent company 617 146 350
Consolidated balance sheet
(in millions of euros) June 30, 2010 December 31, 2009
Assets
Goodwill, net 4,416 3,928
Intangible assets, net 937 835
Property and equipment, net 480 458
Deferred tax assets 96 73
Investments in associates 42 49
Other financial assets 113 94
Non-current assets 6,084 5,437
Inventory and costs billable to clients 406 290
Accounts receivable 5,941 4,875
Other receivables and other current assets 609 548
Cash and cash equivalents 1,418 1,580
Current assets 8,374 7,293
Total Assets 14,458 12,730
Liabilities and shareholders' equity
Share capital 76 79
Additional paid-in capital and retained earnings 3,014 2,734
Equity attributable to holders of the
parent company 3,090 2,813
Non-controlling Interests (Minority interests) 21 25
Total Equity 3,111 2,838
Long-term financial debt (more than 1 year) 1,812 1,796
Deferred tax liabilities 235 214
Long-term provisions 499 449
Non-current liabilities 2,546 2,459
Accounts payable 6,858 5,835
Short-term financial debt (less than 1 year) 227 214
Income taxes payable 75 63
Short-term provisions 105 100
Other creditors and other current liabilities 1,536 1,221
Current liabilities 8,801 7,433
Total Liabilities and Equity 14,458 12,730
Consolidated cash flow statement
(in millions of euro) June 30, June 30, 2009
2010 2009
Cash flows from operations
Net income 222 172 417
Adjustment for non-cash income and
expenses:
Income taxes 89 59 146
Cost of net financial debt 34 25 61
Capital (gains) losses on disposal
(before tax) (1) (4) (10)
Depreciation, amortization and
impairment on property and equipment and
intangible assets 70 81 150
Non-cash expenses on stock options and
similar items 15 12 24
Other non-cash income and expenses 3 5 11
Equity in net income of associates - (1) (4)
Dividends received from equity accounted
investments 11 6 9
Taxes paid (103) (86) (157)
Interest paid (36) (51) (75)
Interest received 7 10 16
Change in working capital requirements(1) (266) (495) 59
Net cash flows provided by (used in)
operating activities (I) 45 (267) 647
Cash flows from investment operations
Purchases of property and equipment and
intangible assets (35) (33) (74)
Proceeds from sale of property and
equipment and intangible assets 1 - 10
Proceeds from sale of investments and
other financial assets, net (5) 3 10
Acquisition of subsidiaries (48) (70) (298)
Divestment of subsidiaries 1 - 1
Net cash flows provided by (used in)
investment operations (II) (86) (100) (351)
Cash flows from financing operations
Capital Increase - - -
Dividends paid to parent company
shareholders - - (107)
Dividends paid to minority shareholders
of subsidiaries (14) (15) (26)
Cash received on new borrowings 13 734 744
Reimbursement of borrowings (59) (115) (108)
Net (purchases)/sales of treasury shares
and equity warrants (249) 1 5
Cash received on hedging transactions - - -
Net cash flows provided by (used in)
financing operations (III) (309) 605 508
Impact of exchange rate fluctuations (IV) 173 34 (94)
Net change in consolidated cash flows (I
+ II + III + IV) (177) 272 710
Cash and cash equivalents as of January 1, 1,580 867 867
Bank overdrafts as of January 1, (33) (30) (30)
Net cash and cash equivalents at
beginning of period 1,547 837 837
Cash and cash equivalents at end of
period 1,418 1,162 1,580
Bank overdrafts at end of period (48) (53) (33)
Net cash and cash equivalents at end of
period 1,370 1,109 1,547
Net change in cash and cash equivalents (177) 272 710
(1) Breakdown of change in working
capital requirements
Change in inventory and costs billable
to clients (73) 31 29
Change in accounts receivable and other
receivables (458) 729 160
Change in accounts payable, other
creditors and provisions 265 (1,255) (130)
Variation in working capital
requirements (266) (495) 59
Statement of changes in consolidated shareholders' equity
Number of (in millions of Capital Additional Reserves Translation
outstanding euros) stock paid-in and reserve
shares capital retained
earnings
178,854,301 January 1, 2009 78 2,553 (105) (315)
Net income for the 167
period
Other
comprehensive
income
Valuation of
available-for-sale
investments at
fair value
Actuarial gains (11)
and losses on
defined benefit
plans
Translation of (14)
foreign operations
Total other - - (11) (14)
comprehensive
income
Total - - 156 (14)
comprehensive
income for the
period
Equity component 49
of OCEANE 2014
Dividends (107)
Share-based 12
compensation
Additional (3)
interest on Oranes
Effect of changes
in scope of
consolidation and
of commitments to
purchase minority
interests
72,910 Purchases/sales of 1
treasury shares
178,927,211 June 30, 2009 78 2,553 3 (329)
Number of (in millions Fair-value Equity Non-Controlling Total
of outstanding euros) reserve attributable Interest Equity
shares to holders (Minority
of the interests)
parent
company
178,854,301 January 1, 2009 109 2,320 30 2,350
Net income for the 167 5 172
period
Other
comprehensive
income
Valuation of 4 4 4
available-for-sale
investments at
fair value
Actuarial gains (11) (11)
and losses on
defined benefit
plans
Translation of (14) 2 (12)
foreign operations
Total other 4 (21) 2 (19)
comprehensive
income
Total 4 146 7 153
comprehensive
income for the
period
Equity component 49 49
of OCEANE 2014
Dividends (107) (15) (122)
Share-based 12 12
compensation
Additional (3) (3)
interest on Oranes
Effect of changes - 3 3
in scope of
consolidation and
of commitments to
purchase minority
interests
72,910 Purchases/sales of 1 1
treasury shares
178,927,211 June 30, 2009 113 2,418 25 2,443
Number of (in millions of Capital Additional Reserves Translation
outstanding euros) stock paid-in and reserve
shares capital retained
earnings
187,168,768 January 1, 2010 79 2,600 390 (377)
Net income 213
Other
comprehensive
income
Valuation of
available-for-sale
investments at
fair value
Actuarial gains (17)
and losses on
defined benefit
plans
Translation of 422
foreign operations
Total other - - (17) 422
comprehensive
income
Total - - 196 422
comprehensive
income for the
period
Dividends paid (107)
Share-based 19
compensation
Additional (3)
interest on Oranes
Effect of changes
in scope of
consolidation and
of commitments to
purchase minority
interests
(7,500,000) Cancellation of (3) (215)
Publics Groupe SA
shares
(807,764) Purchases/sales of (31)
treasury shares
178,861,004 June 30, 2010 76 2,385 464 45
Number of (in millions Fair-value Equity Non-Controlling Total
of outstanding euros) reserve attributable Interests Equity
shares to holders (Minority
of the interests)
parent
company
187,168,768 January 1, 2010 121 2,813 25 2,838
Net income 213 9 222
Other
comprehensive
income
Valuation of (1) (1) (1)
available-for-sale
investments at
fair value
Actuarial gains (17) (17)
and losses on
defined benefit
plans
Translation of 422 9 431
foreign operations
Total other (1) 404 9 413
comprehensive
income
Total (1) 617 18 635
comprehensive
income for the
period
Dividends paid (107) (14) (121)
Share-based 19 19
compensation
Additional (3) (3)
interest on Oranes
Effect of changes
in scope of
consolidation and
of commitments to
purchase minority
interests - (8) (8)
(7,500,000) Cancellation of (218) (218)
Publics Groupe SA
shares
(807,764) Purchases/sales of (31) (31)
treasury shares
178,861,004 June 30, 2010 120 3,090 21 3,111
Earnings per share calculation details
Earnings per share and diluted earnings per share
(In millions of euro except for shares) June 30, 2010 June 30, 2009
Net income used for the calculation of
earnings per share
Net income attributable to equity holders
of the parent a 213 167
Impact of dilutive instruments:
- Savings in financial expenses related
to the conversion of debt instruments,
net of tax (1) 13 2
Net income attributable to equity holders
of the parent - diluted b 226 169
Number of shares used for the calculation
of earnings per share
Average number of shares composing the
company's share capital 195,469,852 196,020,983
Treasury shares to be deducted (average
for the year) (11,231,966) (17,130,227)
Shares to be issued to redeem the Oranes 20,307,677 21,869,806
Average number of shares used for the
calculation c 204,545,563 200,760,562
Impact of dilutive instruments: (2)
- Free shares and dilutive stock options 3,904,161 1,045,823
- Equity warrants (BSA) 172,692 -
- Shares resulting from the conversion of
convertible bonds (1) 28,450,700 4,455,073
Number of shares - diluted
(en euro) d 237,073,116 206,261,458
Net earnings per share a/c 1.04 0.83
Net earnings per share - diluted b/d 0.95 0.82
(1) In 2010 and 2009, both Oceane 2018 and Oceane 2014 were taken into account for the calculations (the Oceane 2014, issued in June 2009, was only included for one month for the first semester 2009).
(2) Only stock-options and equity warrants with a dilutive effect (whose exercise price is lower than the average share price for the period) are taken into consideration.
Headline earnings per share and diluted earnings per share
(In millions of euro except for shares) June 30, 2010 June 30, 2009
Net income used for the calculation of
headline earnings per share (1)
Net income attributable to equity holders
of the parent 213 167
Items excluded:
- Amortization of intangibles arising on
acquisition, net of tax 10 9
- Impairment, net of tax - 16
- Deferred tax asset linked to Oceane 2014(2) - (11)
Headline income attributable to equity
holders of the parent e 223 181
Impact of dilutive instruments:
- Savings in financial expenses related to
the conversion of debt instruments, net of
tax 13 2
Adjusted net income attributable to equity f
holders of the parent - diluted 236 183
Number of shares used for the calculation
of earnings per share
Average number of shares composing the
company's share capital 195,469,852 196,020,983
Treasury shares to be deducted (average
for the year) (11,231,966) (17,130,227)
Shares to be issued to redeem the Oranes 20,307,677 21,869,806
Average number of shares used for the
calculation c 204,545,563 200,760,562
Impact of dilutive instruments:
- Free shares and dilutive stock options 3,904,161 1,045,823
- Equity warrants (BSA) 172,692 -
- Shares resulting from the conversion of
convertible bonds 28,450,700 4,455,073
Number of shares - diluted
(in euro) d 237,073,116 206,261,458
Headline earnings per share (1) e/c 1.09 0.90
Headline earnings per share - diluted (1) f/d 1.00 0.89
(1) Earnings per share before Amortization of intangibles from acquisitions, impairment and deferred tax assets linked to equity component of Oceane 2014.
(2) Effect of deferred tax asset recognized against deferred tax liabilities linked to equity component of Oceane 2014 recorded as equity.
SOURCE Publicis Groupe
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