Publicis Groupe SA · EURONEXT:PUB
Publicis Groupe SA — H1 2023 Earnings Presentation
44 slides from Publicis Groupe SA's earnings presentation, Jul 20, 2023
Slide 1: H1 2023 Results
H1 2023 RESULTS 20 July 2023 ig PuBLICIS
Slide 2: H1 2023 Highlights
H1 2023 HIGHLIGHTS H1 2023 RESULTS STRATEGIC UPDATE Q&A PuBLICIS
Slide 3: Forward-looking statements 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 fr
Slide 4: Key highlights from H1 2023 results
3 KEY HIGHLIGHTS FROM H1 2023 RESULTS 1 2 3 Outperforming the market again on Organic growth +7.1% a2 Organic growth Industry-leading financial ratios at record levels 17.3% u1 Operating Margin Upgrade in FY’23 guidance on all KPls
Slide 5: Outperforming the market again in Q2'23
OUTPERFORMING THE MARKET AGAIN IN Q2’23 ON ORGANIC GROWTH A uniquely balanced revenue mix overdelivering in a still challenging environment : yer Data & tech ° mn Organic Ee epsilon +6.8% wll 45.5% growth after +14% Q2’22 after +19% Q2’22 +7.1% Q2 after +10.3% Q2’22 /3 of Creative revenue Low-single
Slide 6: Strength in differentiated model
STRENGTH IN DIFFERENTIATED MODEL VISIBLE ACROSS REGIONS U.S. Q2 +5.0% after +10.1% Q2’22 Very solid Publicis Sapient despite high comparables Continued strength at Epsilon and acceleration in Media to double-digit Stable Creative as anticipated Europe Q2 +15.2% after +10.1% @Q2’22 UK +17%, led by Pu
Slide 7: Industry-leading financial KPIs
INDUSTRY-LEADING FINANCIAL KPIs THANKS TO PLATFORM ORGANIZATION Operating Free Cash . . . . . a) Operating margin rate at historical highs margin rate Flow! An efficient and agile platform allowing to: 7 3% €725M * Invest in talent with record high bonus pool Vs. 1 500 in HY'22 €835M excl. 2022- * A
Slide 8: Upgrade in 2023 outlook
UPGRADE IN 2023 OUTLOOK Resilience to business cycles Strong H1 results Unchanged H2 expectations —a Upgrade FY 2023 guidance on all KPIs despite persistent macroeconomic uncertainties oe en enero 7 Organic growth Operating Margin rate Free Cash Flow” circa +5% close to 18% at least €1.6bn : ' Above
Slide 9: H1 2023 Results
H1 2023 HIGHLIGHTS H1 2023 RESULTS STRATEGIC UPDATE Q&A PuBLICIS
Slide 10: Net revenue
NET REVENUE (EUR million) Ql Q2 H1 2023 net revenue 3,079 3,239 6,318 2022 net revenue 2,800 3,073 5,873 Reported growth +10.0% +5.4% +7.6% Organic growth +7.1% +7.1% +7.1% PUBLICIS GROUPE 10
Slide 11: Q2 2023 net revenue by geography
Q2 2023 NET REVENUE BY GEOGRAPHY 2023 Organic (EUR million) Q2 2023 Q2 2022 vs. 2022 growth North America 1,955 1,912 +2.2% +4.9% Europe 809 709 +14. 1% #15. 2% — pectic ~*~ OSS % 0% a v2. om _ “dale be can ica —a_ a 7 a % _— a — — >. a8 ms a _— Total 3,239 3,073 +5. 4% +7.1% Geoure: () Organic grow
Slide 12: Q2 2023 performance - North America
PUBLICIS GROUPE Q2 2023 PERFORMANCE - NORTH AMERICA 2023 Organic (EUR million) Q2 2023 Q2 2022 vs. 2022 growth North America 1,955 1,912 +2.2% +4.9% US + 58% of Groupe net revenue + Organic growth: +5.0% + Media: acceleration to double-digit growth in Q2 on top of double-digit last year + Epsilon: c
Slide 13: Q2 2023 performance - Europe
Q2 2023 PERFORMANCE - EUROPE 2023 Organic (EUR million) Q2 2023 Q2 2022 vs. 2022 growth Europe 809 709 +14.1% #15.2%M UK France Germany Central & Eastern Europe 9% of Groupe net revenue Organic growth: +17.0% Double-digit growth in Media Solid performance in Creative Another quarter of double-digit
Slide 14: Q2 2023 performance - Rest of World
Q2 2023 PERFORMANCE - REST OF WORLD 2023 Organic (EUR million) Q2 2023 Q2 2022 vs. 2022 growth Asia Pacific Middle East Africa Latin America 300 289 +3.8% +1.1% 84 73 +15.1% +2.6% +6.5% +5.9% Asia Pacific 9% of Groupe net revenue Organic growth: +2.6% Acceleration in China with +7.0% organic after +
Slide 15: H1 2023 net revenue by geography
H1 2023 NET REVENUE BY GEOGRAPHY 2023 Organic (EUR million) H1 2023 H1 2022 vs. 2022 growth North America 3,893 3,660 +6.4% +5.3% Europe 1,552 1,371 +13.2% +13.8%™ Asia Pacific 550 550 0.0% +1.7% Middle East Africa 179 165 +8. 5% +1. 2% un ay America nr m6 6 — a — =a 5 ou sesunesnn a — Groure, () Or
Slide 16: H1 2023 performance by industry
H1 2023 PERFORMANCE BY INDUSTRY Net revenue growth per client industry“) Leisure Er & neue & travel 9 Public sector +13% 713% & Other +26% Net revenue split Automotive +6% Retail +11% Non-food Financials i 1Y consumer 42% products +2% 13% ™ T Food & beverage 3,298 main clients representing 91% of Gr
Slide 17: Consolidated income statement
CONSOLIDATED INCOME STATEMENT (EUR million) H1 2023 H1 2022 Change Revenue 7,105 6,547 Net revenue 6,318 5,873 +7.6% EBITDA 1,335 1,287 43.7% Operating margin 1,093 1,018 +7.4% Net financial expenses (6) (74) Income taxes (272) (226) Associates 3 5 Minority interests (5) 4 Headline Group Net Income”
Slide 18: Operating margin
OPERATING MARGIN H1 2022 FX/perimeter H1 2022 (EUR million) H1 2023 (comp.) impacts (reported) Net revenue 6,318 5,889 16 5,873 Personnel costs (4,155) (3,870) (12) (3,858) As a % of net revenue 65.8% 65.7% 65.7% Restructuring (45) (30) (30) Other operating expenses (783) (706) (8) (698) Depreciatio
Slide 19: H1 2023 - Change in operating margin
H1 2023 - CHANGE IN OPERATING MARGIN AS A % OF NET REVENUE Net impact of +20bps 17.3% +0bp 17.3% | -20bps : 7 eobps 17.3% —=— H a ' -40bps | ' H1 2022 FX and H1 2022 Fixed Freelance People Restructuring Other Depreciation H1 2023 (reported) perimeter comparable personnel costs incentive operating co
Slide 20: Net financial income (expense)
NET FINANCIAL INCOME (EXPENSE) (EUR million) H1 2023 H1 2022 Interest (expense)/income on net financial debt 42 (27) Interest on lease liabilities (39) (45) Foreign exchange gain (loss) (3) - Other financial expenses” (6) (2) ou worn eS anna oS sen i — (1) _ Includes provisions on financial assets,
Slide 21: Income tax and effective tax rate
INCOME TAX AND EFFECTIVE TAX RATE (EUR million) H1 2023 H1 2022 Reported income taxes 205 189 Reversal in income tax on amortization of intangibles arising from acquisitions 37 34 Reversal in income tax on impairment and real estate consolidation 29 1 Reversal in income tax on other items 1 (8) Head
Slide 22: Headline earnings per share, diluted
HEADLINE EARNINGS PER SHARE, DILUTED‘ +62% | €2.23 €1.98 €1.75 H1 2019 H1 2020 H1 2021 H1 2022 H1 2023 (1) See definition in Supplemental Information 22
Slide 23: Free cash flow
FREE CASH FLOW (EUR million) H1 2023 H1 2022 Change EBITDA” 1,335 1,287 48 Repayment of lease liabilities and related interests (207) (215) 8 Capex, net of disposals” (75) (82) 7 Interests paid and received 17 (63) 80 Tax paid (386) (251) (135) Other items. eee AL een oe enn en Reported Free Cash Fl
Slide 24: Use of cash
USE OF CASH (EUR million) H1 2023 H1 2022 Free Cash Flow before change in WCR™ 725 708 Change in WCR (1,053) (858) Acquisitions (incl. earn-out & net of disposals) (170) (376) Cash impact of Russia exit - (49) Dividends paid (7) (3) Share buy-back, net of sales/ exercise of warrants (193) 7 Non-cash
Slide 25: Net financial debt
NET FINANCIAL DEBT LTM June Dec. 31, LTM June (EUR million) 30, 2023 2022 30, 2022 Net Financial Debt, average 498 685 1,024 Net Financial Debt, at end of period 226 (634) 464 (Average net financial debt + Average Lease liability) / EBITDA 11x 1.2x 1.3x PUBLICIS GROUPE 25
Slide 26: Strategic update
H1 2023 HIGHLIGHTS H1 2023 RESULTS STRATEGIC UPDATE Q&A PuBLICIS
Slide 27: From a communication to a transformation partner for our clients
FROM A COMMUNICATION TO A TRANSFORMATION PARTNER FOR OUR CLIENTS Outperforming the market today Market share gains | Resilience to business cycles Uniquely positioned to lead the future of the industry through data, tech and AI thanks to our investments ici ~~. ee Beant ERSilon Merce At the heart of
Slide 28: Three unmatched competitive advantages to leverage AI for growth
THREE UNMATCHED COMPETITIVE ADVANTAGES TO LEVERAGE AI FOR GROWTH epsilon 8 A/ Data refreshed every 5mn allowing real-time personalization publicis sapient & Al Technology to accelerate & improve processes e MRCL &Al Industry-first Al-led platform since 2017 Business outcomes directly tied to media i
Slide 29: Conclusion
CONCLUSION A strong first half 2023 on all fronts Outperforming on organic growth Delivering historically high financial ratios Upgrading FY 2023 guidance on all KPls SE Resilient to business cycles Future-proof 29
Slide 30: A stronger company
A STRONGER COMPANY DESPITE PERSISTENT MACRO UNCERTAINTIES H1 net revenue growth since 2019 _ H1 Financial KPls growth since 2019 +45% +19% +68% | +70% Groupe Groupe Operating Free Cash reported Organic Margin Flow® +22% +62% U.S. Headline Organic EPS () Free Cash Flow before (110)m€ of TCJA transiti
Slide 31: Q&A
H1 2023 HIGHLIGHTS H1 2023 RESULTS STRATEGIC UPDATE Q&A PuBLICIS
Slide 32: Appendix
APPENDIX PuBLICIS
Slide 33: Net revenue & organic growth calculation
NET REVENUE & ORGANIC GROWTH CALCULATION (EUR million) Ql Q2 2023 Currency impact 2022 net revenue os (EUR million) Ql Q2 Currency impact 2 61 GBP (13) @) 2022 net revenue at 2023 exchange rate (a) “ USD @ 78 (35) 2023 net revenue before impact of acqi Other (4) (31) Net revenue from acquisitions, n
Slide 34: Condensed consolidated income statement
CONDENSED CONSOLIDATED INCOME STATEMENT (EUR million) H1 2023 H1 2022 Net revenue 6,318 5,873 Pass-through revenue 787 674 Revenue 7,105 6,547 EBITDA 1,335 1,287 Depreciation (242) (269) Operating margin 1,093 1,018 Amortization of intangibles arising from acquisitions (142) (137) Impairment / Real
Slide 35: Bridge from reported to condensed comparable income statement
BRIDGE FROM REPORTED TO CONDENSED COMPARABLE INCOME STATEMENT (EUR million) P&L reported H1 2023 Pass-through impact P&L condensed H1 2022 P&L P&L Pass-through FX/Perimeter Condensed reported impact Impact comparable Net revenue Pass-through revenue Revenue Personnel costs Restructuring costs Pass-t
Slide 36: H1 2023 condensed consolidated income statement
H1 2023 CONDENSED CONSOLIDATED INCOME STATEMENT Amortization Impairment / Change in fair ofintangibles Real estate value of H1 2023 arising from consolidation financial Main Capital Earn-out H1 2023 (EUR million) P&L acquisitions charge assets Gain/loss revaluation Headline Net revenue 6,318 6,318 P
Slide 37: H1 2022 condensed consolidated income statement
H1 2022 CONDENSED CONSOLIDATED INCOME STATEMENT Amortization Impairment / Change in fair ofintangibles Real estate value of H1 2022 arising from consolidation _ financial Main Capital Earn-out H1 2022 (EUR million) P&L acquisitions charge assets Gain/loss revaluation Headline Net revenue 5,873 5,873
Slide 38: Gross debt as of June 30, 2023
GROSS DEBT AS OF JUNE 30, 2023 Breakdown by maturity July 2022- July 2023- July 2024- July 2025- July 2026 (EUR million) Total June 2023. June2024 June2025 June 2026 Onwards Eurobond 2023 500 500 - - - - Eurobond 2024 601 - 601 - - - Eurobond 2025 “? 2) 789 Eurobond 2028 (? 2) 813 - - - - 813 Eurobo
Slide 39: Balance sheet
BALANCE SHEET June 30, June 30, (EUR million) 2023 Dec. 31, 2022 2022 Goodwill and intangibles 13,730 13,793 14,274 Net right of use 1,672 1,753 1,946 Other fixed assets 989 1,059 1,052 Current and deferred tax (183) (380) (352) Working capital (3,529) (3,907) (3,696) TOTAL 12,679 12,318 13,224 Grou
Slide 40: Debt as of June 30, 2023 - by currency
DEBT AS OF JUNE 30, 2023 Breakdown by currency (EUR million) Total EUR USD GBP Others Eurobond 2024 601 601 Eurobond 2025 “) @) 789 - 789 Eurobond 2028 “ (2) 813 - 813 Eurobond 2031 @) 831 - 831 340 35 257 12 36 Farn-out /B Other debt 34 16 u 1 6 Cash & marketable securities (3,682) (649) (1,953) (2
Slide 41: Debt as of June 30, 2023 - by rate
DEBT AS OF JUNE 30, 2023 Breakdown by rate (EUR million) Total Earn-out / Buy-out Fixed rate Floating rate Eurobond 2023 500 - 500 - “Eurobond 2024 601 - 601 - Eurobond 2025 “) 2) 789 - 789 - “Eurobond 2028 ()@) 813 - 813 - Eurobond 2031“ @ 831 - 831 - “Other debt © Total gross 3,568 - 3,557 ah] Ear
Slide 42: Liquidity as of June 30, 2023
LIQUIDITY AS OF JUNE 30, 2023 June 30, 2023 June 30, 2022 (EUR million) Total Drawn __ Available Available 5-year syndicated facility (Club Deal) 2,000 - 2,000 2,000 Total Committed Facilities 2,000 - 2,000 2,000 Cash and Marketable Securities 3,682 3,342 Total liquidit: PUBLICIS: () Of which €421m
Slide 43: Definitions
DEFINITIONS Net revenue: Revenue less pass-through costs which comprise amount paid to external suppliers engaged to perform a project and charged directly to clients. Those costs are mainly production & media costs and out of pocket expenses. Organic growth: Change in net revenue excluding the impa
Slide 44: Contact
CONTACT Press Lizzie Dewhurst, Corporate Communications | Tel. + 44 794 9918194 | Email. [email protected] Clarisse Fort Hallereau, Corporate Communications | Tel. +33 6 33 50 05 74 | Email. [email protected] Michelle McGowan, Corporate Communications | Tel. +1 312