Publicis Groupe: 1st Quarter 2009 Revenue
* Reuters is not responsible for the content in this press release.
* Revenue: EUR 1,075 million
* Revenue Growth (published): +1.3%
* Organic growth: -4.4%
* New Business: USD 1.7 billion
(Publicis Groupe ranked no. 1 by Nomura)
PARIS--(Business Wire)--
Regulatory News:
Maurice Lévy, Chairman and CEO of Publicis Groupe (Paris:PUB):
"With a rise of 1.3% in published revenue and a 4.4% decline in organic growth,
Publicis Groupe is holding up well in this fiercely turbulent economic crisis.
Although I cannot be satisfied with the decrease in our organic growth, all
available indicators seem to point in the same direction: market deterioration
is much worse than anticipated. Our main competitors have published numbers with
a decline between 5.6% and 6.6%, clearly showing that Publicis Groupe is gaining
market share. The strategy followed over the last few years is bearing fruit:
growth in digital activities and emerging markets has helped to cushion the
shock. In addition, our comprehensive and well-adapted offer has proven
successful for advertisers: Publicis Groupe was ranked 1st in New Business in
2008, a distinction we have maintained throughout the first quarter of 2009. We
have an even bigger lead and everything indicates that we should maintain this
advantage over our competitors in the month of April. We are strengthening this
commercial success by forging stronger ties with our clients across all sectors.
Efforts made by the group are fully focused on the following four objectives:
providing better service to our clients in these difficult times, gaining market
share, protecting our margins and consolidating Publicis Groupe's financial
health. Forecasts suggest that the low point will be this summer, with the
second half of 2009 proving better than the first. Recovery is expected in the
summer of 2010. The latest indicators support this view."
I.REVENUE
Group consolidated revenue came to EUR 1,075 million for the first quarter of
2009, up 1.3% from a year earlier.
Organic growth was -4.4% for the quarter, declining less than the overall
market.
II.ACTIVITY OF THE FIRST QUARTER
The resilience of revenue and the relatively limited decline in organic growth
in the first quarter were attributable mainly to the effects of the strategy
implemented over the last few years. The market decline was cushioned by growth
of digital activities in the United States. Steady performance from emerging
markets like Latin America, Turkey, Central Europe and the Middle East combined
to reduce the negative impact of mature economies. In the 1st quarter 2009,
Advertising represented 38% of total revenue, SAMS 41% (including 100% of
digital activities) and Media activities 21%. Digital activities alone accounted
for 20.5% of total revenue, compared with 17.6% in the 1st quarter 2008 and
19.6% for the full year 2008 (at 2009 exchange rate).
The client portfolio remains well diversified, with over 50% showing growth. The
automotive sector is in steep decline (nearly 20% at constant exchange rate) and
represented 13% of revenue in the first quarter of 2009, compared with 15% in
the full year 2008.
Revenue by Geographic Region
(in millions of euros) Revenue Organic growth 2009/2008
1(st) quarter 1(st) quarter
2009 2008
Europe 357 403 -6.6 % -11.6 %
North America 526 466 -3.6 % +13.0 %
Asia-Pacific 114 116 -6.3 % -1.6 %
Latin America 51 52 +3.1 % -2.1 %
Middle East & Africa 27 24 +3.0 % +12.8 %
Total 1,075 1,061 -4.4 % +1.3 %
Europe saw a decline in growth of 6.6%. Most countries - the United Kingdom
(-4.9%), France (-7.4%) and especially southern Europe (-20.5%) - were hurt by
the slowdown of the first quarter, which was even more pronounced in March.
Germany is still in positive territory (0.9%), and central European countries
continued to experience solid growth (14.8%).
North America, with negative growth of -3.6%, is resisting better, mainly
because of digital activities. TheAsia-Pacific region was strongly penalized by
Korea, Japan and Australia.
Latin America and the countries of Africa and the Middle East continued to grow.
In this difficult economic situation, Publicis Groupe remains determined to
protect its profitability and financial health. Certain measures taken since
September 2008, such as a hiring freeze and other targeted adjustments, are
being maintained in 2009. The emphasis on managing operating costs, further
development of optimization operations such as simplified structures, the
"multi-door" policy, and the consolidation of Shared Service Centers such as
"Americas" will pay off in 2009 and especially in 2010.
The implementation of an ERP at the group level was launched at the beginning of
the year.
* NET DEBT AT MARCH 31, 2009
On January 19, 2009, Publicis Groupe bought back 12.7% of the original issue
amount of the Oceane 2018 (Oceane Publicis Groupe SA 2018-2.75%-FR0000180127) in
the amount of EUR 95 million.
At March 31, 2009, net debt came to EUR 1,097 million, compared with EUR 1,077
million at March 31, 2008.
* NEW BUSINESS: USD 1.7 BILLION OF NET GAINS
Despite reservation shown by advertisers, Publicis Groupe took in USD 1.7
billion in net New Business in the first quarter, proof of its dynamic teams and
the relevance of its offer. This performance puts Publicis Groupe at the front
of the pack in terms of New Business wins for the first three months of the year
(source: Nomura ranking).
The month of April is slated to be highly satisfactory, with the new HP-PCS
account (Personal Computers for Europe, the Middle East and Africa) and
confirmation of the following wins: Shanghai Expo 2010, Visa 2012 and Siemens
(China).
III. FIRST QUARTER HIGHLIGHTS
* EMPLOYEE SHAREHOLDING
As approved at the combined shareholders meeting on June 3, 2008 (23rd
resolution), Publicis Groupe`s Management Board has decided to closely associate
the employees to Publicis Groupe development.
Firstly, the Management Board decided, with the Supervisory Board`s approval, to
allocate 50 free shares in the first half of 2009 to each of the 4,500 employees
in France working in subsidiaries in which Publicis Groupe owns over 50%. The
granting of these shares will not be performance related, but will be offered to
those with the company for a minimum of three months and will be subject to a
two-year holding period from the date the shares are granted.
The free share scheme in France is the first step of a broader-based employee
share-ownership program which will gradually benefit all the group`s employees
in countries where the group has significant operations. This plan will be
implemented in the coming two years in order to take into account the diverse
legal systems and tax regimes.
Secondly, a co-investment program has been offered to approximately 160 key
executives to enable them to participate in a Publicis Groupe share investment
program.
This program is based on a personal investment through a dedicated structure,
and real financial commitment on the part of the key executives. It also
includes retention and group performance incentives. Subject to certain
conditions, executive-investors will receive free shares rewarding loyalty after
three or four years according to local rules. In addition, executive-investors
may receive performance-related free shares based on Publicis Groupe`s organic
growth and operating margin compared with its peers.
Concerning the members of the Management Board, the free share allocation will
be in compliance with the AFEP/MEDEF recommendations of October 2008. Those free
shares will only be awarded based on the group`s growth and margin performance
by comparison with its peers. The rules concerning continued presence in the
group and the holding period will be the same for everyone.
By involving employees to the greatest extent possible and creating a structure
of co-investment and incentive, the group intends to show its appreciation to
those who are the true reasons for its success. Furthermore, the group wishes to
encourage its employees to provide their clients with innovative, creative, and
high-performance solutions. The group also wants to encourage its employees to
work towards growth, both by winning new business and by consolidating long-term
margins in order to preserve the culture and independence of Publicis Groupe.
* ACQUISITIONS IN THE 1ST QUARTER 2009
In early April, Publicis Groupe acquired Nemos, a leading Swiss agency in
interactive communication. Founded in 2002 and based in Zurich, Nemos is one of
the top agencies in multimedia and flash programming. With a team of ten digital
experts, Nemos counts Carlsberg, Mövenpick and Condor Films among its clients.
This acquisition is yet another demonstration of Publicis Groupe's determination
to continue to enrich its digital offer through targeted acquisitions in the
sector.
IV.OUTLOOK
The most recent ZenithOptimedia forecasts show a decline in worldwide
advertising spending of 6.9% hurting analog media while digital continues to
grow.
These latest forecasts should be considered in the context of forecasts made at
the end of last year, which estimated that advertising spending worldwide would
show negative growth of -0.2%. These numbers reflect the unprecedented economic
slowdown worldwide. Other market indicators, while slightly less negative,
deliver the same message.
In this context, Publicis Groupe, strengthened by its strategic choices, is
intensely focused on cost management with the constant concern of protecting its
margins and financial health.
The relevance of the Publicis Groupe offer and the strength and energy of its
teams around the world are attested to by new business of USD 1.7 billion. The
group`s priority of gaining market share is being achieved.
# # #
Next Shareholders' Meeting: June 9, 2009, at 10 a.m. at publiciscinémas
About Publicis Groupe
Publicis Groupe [Euronext Paris: FR0000130577] is the world's fourth largest
communications group. In addition, it is ranked as the world's second largest
media agency, and is a global leader in digital and healthcare communications.
With activities spanning 104 countries on five continents, the Groupe employs
approximately 45,000 professionals. Publicis Groupe offers local and
international clients a complete range of advertising services through three
global advertising networks, Leo Burnett, Publicis, Saatchi & Saatchi, and two
multi-hub networks, Fallon and 49%-owned Bartle Bogle Hegarty. Media consultancy
and buying is offered through two worldwide networks, Starcom MediaVest Group
and ZenithOptimedia; and interactive and digital marketing led by Digitas.
Publicis Groupe recently launched VivaKi to leverage the combined scale of the
autonomous operations of Digitas, Starcom MediaVest Group, Denuo and
ZenithOptimedia to develop new services, tools, and next generation digital
platforms. Publicis Groupe`s Specialized Agencies and Marketing Services offer
healthcare communications, corporate and financial communications,
sustainability communications, shopper marketing, public relations, CRM and
direct marketing, event and sports marketing, and multicultural communications.
Web site: www.publicisgroupe.com
This presentation 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).
APPENDIX
1ST QUARTER 2009 NEW BUSINESS
USD 1.7 billion (net)
MAIN GAINS
LEO BURNETT
Caltax petroleum products (Australia), Carrefour (Colombia), MCYS Government
Social Awareness (Singapore), MillerCoors (US), Turkcell telecommunications
(Turkey), Wella tone-P&G (Russia), Falabella department store (Colombia), TVO
television station (Canada), Alfa telecommunications (Lebanon), Peroni, Molson,
Mil.B beer (US).
PUBLICIS
Alitalia (Italy), Carrefour (France/International), Procter & Gamble Crest (UK),
Vichy (UK), Wrigley (China), Zurich Connect (Switzerland), Century 21 (France).
SAATCHI & SAATCHI
BingoLotto (UK), House of Travel (New Zealand),Invalidity Insurance
(Switzerland), LMG International car insurance (Thailand), Panasonic
(Indonesia),RTA/Dubai Metro Launch (United Arab Emirates),Suning appliances
(China),Tsingtao (China), Kosovo Ministry of Finance, Midea appliances
(Chine),Cadbury Dairy Milk (Australia/New Zealand)
STARCOM MEDIAVEST GROUP :
Alfa telecommunications (Lebanon), Capital One (UK), Cerveceria Nacional
(Panama), Heinz (Mexico), Honda (Spain), Kraft Foods (United Arab Emirates),
Metro Group (Poland), PTC telecommunications (Poland), PZU financial services
(Poland), Schering Plough Claritin (Hungary), CNAMTS health insurance (France),
Supermercados Plaza`s (Venezuela), Bupa International health insurance (UK),
British Gas (UK), Comcast (US).
ZENITHOPTIMEDIA :
Al-Bandar Group multibrand store (Saudi Arabia), Nestlé (The Netherlands),
Si.mobil Vodafone (Slovenia), Jenny Craig (US), Ubank (Australia), Jamena Gas
Networks (Australia), China Mobile (China), T38/40 slimming product (Portugal),
MTV (UK), Panasonic (Indonesia), Turismo de Valencia (Spain), Haberturk press
(Turkey), BA airline (Digital) (UK), Kang Yuan pharmaceuticals (China), Parques
Reunidos theme park (Spain), sanofi-aventis (Ukraine).
PUBLICIS HEALTHCARE COMMUNICATIONS GROUP (PHCG) :
sanofi-aventis Aplenzin anti-depressant (US), Biogen-Idec neurological (US).
PUBLICIS CONSULTANTS
Biscuit LeClerc (US), Carrefour (France), City of The Hague (The Netherlands),
Diageo (UK), FIMF online banking (Germany), Lactalis dairy products (Italy),
Ministry of Agriculture (The Netherlands), Ministry of Economy, Industry and
Employment (France), Roman Meal (US), Sanofi Aventis (Germany).
FALLON
The Auteurs (UK).
DIGITAS:
LVMH, I Discovery education (India), Abbott pharmaceuticals (US), GE Healthcare
(US), Carrefour (France), SAFRAN (France), Nissan (Europe), Total (France).
Q1 2009 PRESS RELEASES:
01/08/09 Mathias Emmerich is
appointed Senior Vice
President of Publicis
Groupe
01/14/09 Philippe Lentschener to
leave Publicis Groupe
02/04/09 Isabelle Simon joins
Publicis Groupe as Senior
Vice President
02/11/09 2008 Annual Results
02/20/09 Results of the standing
purchase offer for holders
of OCEANEs maturing on
January 18, 2018
03/11/09 Publicis Groupe involves
its employees in group
growth
03/24/09 136 Publicis key executives
invest heavily in the group
04/15/09 Publicis Groupe pursues its
global digital expansion
with the acquisition of
Nemos, Swiss leader in
multimedia and flash
programming
04/16/09 Publicis Groupe wins
Hewlett-Packard Personal
Systems Group pan-European
advertising and digital
communications
04/23/09 Reference Document
(financial statements) made
available
For further information: www.publicisgroupe.com
Publicis Groupe
Investor Relations:
Martine Hue, + 33 (0)1 44 43 65 00
martine.hue@publicisgroupe.com
or
External Communications:
Peggy Nahmany, + 33 (0)1 44 43 72 83
peggy.nahmany@publicisgroupe.com
Copyright Business Wire 2009
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