Publicis Groupe SA · EURONEXT:PUB
Publicis Groupe SA — Merger or Acquisition (April 2019)
32 slides from Publicis Groupe SA's merger presentation, Apr 15, 2019
Slide 1: Publicis to Acquire Epsilon
PUBLICIS TO ACQUIRE EPSILON 15 April 2019
Slide 2: Disclaimer
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 ma
Slide 3: Publicis to Acquire Epsilon
PUBLICIS TO ACQUIRE EPSILON An acceleration of Publicis Groupe’s strategy to become its clients’ preferred Strategic fit transformation partner by seamlessly connecting creativity, media, technology, consulting and data at scale Value Attractive transaction terms creation leading to double-digit acc
Slide 4: A Highly Compelling Transaction
A HIGHLY COMPELLING TRANSACTION • Publicis will become an industry leader in personalized experiences at scale by putting Epsilon at the core of its operations: • Technology to organize, manage and activate clients’ first-party data A unique • Unparalleled data assets to enrich clients’ first-party
Slide 5: Highly Attractive Financial Impact
HIGHLY ATTRACTIVE FINANCIAL IMPACT • Net purchase price of $3.95bn, after acquisition-related tax step-up, implying an 8.2x 2018 adjusted EBITDA (1) multiple Transaction • 100% cash consideration fully financed in debt and cash on hand highlights • Subject to customary approvals, expected to close i
Slide 6: What Is Epsilon?
WHAT IS EPSILON? : EPSILON PUBLICIS GROUPE
Slide 7: Epsilon Is a Technology Leader Maximizing the Value of Its Clients' Data at Scale
EPSILON IS A TECHNOLOGY LEADER MAXIMIZING THE VALUE OF ITS CLIENTS’ DATA AT SCALE KEY STATS COMPANY BACKGROUND • Technology, platform and software leader with unparalleled data assets to deliver personalized, multi-channel marketing campaigns at #1 71BN scale ranked CRM, email & personalized emails
Slide 8: Epsilon's Advanced Technology & Platform Spans the Full Data Lifecycle
EPSILON’S ADVANCED TECHNOLOGY & PLATFORM SPANS THE FULL DATA LIFECYCLE Email Client Video Data Data Unique Profile 1st-party Activation Onboarding Enrichment Building Image raw data Display Website Mail Format Technology Data Platform Content Clients’ Epsilon Data science and Mass personalization Fi
Slide 9: Epsilon Core Capabilities
EPSILON CORE CAPABILITIES TECHNOLOGY DATA PLATFORM • Proprietary software to organize • Multiple partnerships creating • Integration of client first-party data and manage client first-party data: unparalleled data repositories: and ID creation • CRM (120m purchases seen daily) • Identity/demographic
Slide 10: Accelerating Our Strategy and Our Organic Growth
ACCELERATING OUR STRATEGY AND OUR ORGANIC GROWTH
Slide 11: Publicis + Epsilon: Ideally Positioned to Deliver Personalized Experiences at Scale
PUBLICIS + EPSILON: IDEALLY POSITIONED TO DELIVER PERSONALIZED EXPERIENCES AT SCALE KEY CHALLENGES PUBLICIS + EPSILON SOLUTIONS Rise of consumer expectations Unparalleled data sets to create IDs on who affecting how they feel, think and shop for brands consumers are, what they do and buy Overwhelmin
Slide 12: An End-to-End Positioning to Win in a $1.5tn Industry
AN END-TO-END POSITIONING TO WIN IN A $1.5tn INDUSTRY Traditional holding companies IT & consulting companies Consultancy Technology: Market Media & Marketing Advertising & Data and Data CRM on Business IT services and Research Activation Strategy Creation Services Transformation platform building 1
Slide 13: Epsilon Will Fuel Publicis' Entire Organization and Accelerate Growth
EPSILON WILL FUEL PUBLICIS’ ENTIRE ORGANIZATION AND ACCELERATE GROWTH Enrich creativity with customer insights to improve ideation and build more relevant campaigns Dynamic creative engine to go one step further to adapt to real time context (who consumers are, what they do, what they buy) Connect d
Slide 14: Publicis Will Unlock Epsilon's Full Potential
PUBLICIS WILL UNLOCK EPSILON’S FULL POTENTIAL Access to IT/ Marketing Access to C-Suite ACCESS specialists to increase impact on US client base GLOBAL Access Publicis’ global reach Predominantly US footprint REACH and client portfolio Replication to other verticals VERTICALS Unique Auto platform (He
Slide 15: Publicis with Epsilon
PUBLICIS WITH EPSILON A natural extension of Publicis’ capabilities The first to cover the full spectrum of services at scale Best positioned to meet clients’ new imperatives and foster organic growth Committed to remain at the forefront of data privacy and ethical standards Accelerating our strateg
Slide 16: The Transaction
THE TRANSACTION : EPSILON PUBLICIS GROUPE
Slide 17: Transaction Highlights
TRANSACTION HIGHLIGHTS • Net purchase price of $3.95 billion after acquisition-related tax step-up • Implied 8.2x 2018 Adjusted EBITDA(1) multiple • Cash consideration of $4.40 billion payable to ADS at closing • Double-digit accretion to both headline EPS and free cash flow (2) from first full year
Slide 18: Acquisition Financing and Financial Policy
ACQUISITION FINANCING AND FINANCIAL POLICY • 100% cash transaction • Financed though a bridge loan and part of Publicis Groupe’s own cash • Publicis Groupe has obtained a firm commitment from BNP Paribas and Citi on a 12-month bridge loan that can be renewed 2 x 6 months • Opportunity to extend debt
Slide 19: Publicis Groupe Including Epsilon Main Indicators in 2018
PUBLICIS GROUPE INCLUDING EPSILON MAIN INDICATORS IN 2018 Combined PUBLICIS (EUR million) EPSILON (1) ADJUSTMENT (3) With run rate cost GROUPE reduction being implemented at Epsilon Net Revenue 8,969 1,641 (2) 10,610 EBITDA 1,652 403 8 2,063 Margin (%) 18.4% 24.5% 19.4% Operating margin 1,501 275 38
Slide 20: Accretive to Headline EPS and FCF
ACCRETIVE TO HEADLINE EPS AND FCF (before any transaction-related synergies) Combined (EUR million) PUBLICIS EPSILON (1) ADJUSTMENT With run rate cost GROUPE reduction being implemented at Epsilon Operating margin 1,501 275 38 (2) 1,814 Net financial income (expenses) (25) (132) (157) Income taxes (
Slide 21: Ongoing Cost Reduction Initiatives at Epsilon and Potential Synergies
ONGOING COST REDUCTION INITIATIVES AT EPSILON AND POTENTIAL SYNERGIES • Ongoing cost reduction program at Epsilon with an expected run-rate impact of €60m per annum • Internal rationalization plan in progress on a stand-alone basis • Phased towards run-rate in 2022 • Main cost reduction areas: • Pro
Slide 22: Integration Plan
INTEGRATION PLAN : EPSILON PUBLICIS GROUPE
Slide 23: In-Depth Review of Epsilon Provided Full Confidence on Assets
IN-DEPTH REVIEW OF EPSILON PROVIDED FULL CONFIDENCE ON ASSETS … DATA & Validated compatibility between Epsilon and Publicis Groupe’s assets in US and India and TECHNOLOGY how to leverage the combination of the two DATA PRIVACY Confirmed compliance with existing environment and readiness for upcoming
Slide 24: ... and a Clear Roadmap for a Successful Integration
… AND A CLEAR ROADMAP FOR A SUCCESSFUL INTEGRATION • Epsilon’s Technology, Data and Platforms will be managed as a standalone entity at the core of Publicis, irrigating all Groupe operations, under the leadership of Bryan Kennedy, reporting directly LEVERAGE EPSILON’S to Arthur Sadoun and joining th
Slide 25: Conclusion
CONCLUSION Bs % EPSILON PUBLICIS GROUPE
Slide 26: Conclusion
CONCLUSION One-time opportunity to acquire the technology platform of scale with unparalleled data Why Epsilon? assets that will accelerate the implementation of our winning model Meet the shift in clients’ investments Why now? in the era of data-enabled digital-first marketing Fast-forwarding our s
Slide 27: Q&A
Q&A Se d EPSILON PUBLICIS GROUPE
Slide 28: Supplemental Information
SUPPLEMENTAL INFORMATION Se EPSILON PUBLICIS GROUPE
Slide 29: Breakdown of Adjustments
BREAKDOWN OF ADJUSTMENTS Interest Run rate cost Stand-alone expenses of reduction Share-based TOTAL (EUR million)(1) operating costs acquisition Tax step-up being compensation ADJUSTMENTS after carve-out debt, net of implemented tax at Epsilon EBITDA (21) (30) 60 8 Operating margin (21) 60 38 Net fi
Slide 30: Combined Publicis Groupe
Combined PUBLICIS (EUR million) EPSILON (1) ADJUSTMENT (3) With run rate cost GROUPE reduction being implemented at Epsilon EBITDA 1,652 403 8 2,063 Margin (%) 18.4% 24.5% 19.4% Operating margin 1,501 275 38 1,814 Margin (%) 16.7% 16.7% 17.1% Non-Current income and expenses (2) (2) Net financial inc
Slide 31: Phasing of Ongoing Cost Reduction Plan at Epsilon
PHASING OF ONGOING COST REDUCTION PLAN AT EPSILON +60 EUR million +50 +30 Ongoing cost reductions +10 being implemented Restructuring costs -10 -20 -20 2019 2020 2021 2022 30
Slide 32: Merci
MERCI Se EPSILON PUBLICIS GROUPE