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Publicis Groupe: 1st Quarter 2009 Revenue

Posted on: Wednesday, 29 April 2009, 00:30 CDT

PARIS, April 29 /PRNewswire-FirstCall/ -- - 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)

Maurice Levy, Chairman and CEO of Publicis Groupe:

"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 1st quarter 1st 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 & 27 24 +3.0% +12.8% Africa Total 1,075 1,061 -4.4% +1.3%

Europe saw a decline in growth of 6.6%. Most countries - the United Kingdom (EUR 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. The Asia-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, Movenpick 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 publiciscinemas

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: http://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 MAIN GAINS Leo Burnett Caltax petroleum products (Australia), Carrefour (Colombia), MCYS Government Social Awareness (Singapore), MillerCoors (US), Turkcell telecommunications (Turkey), Efes beer (Russia), 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), NZ Defence Force (New Zealand), Panasonic (Indonesia), RTA/Dubai Metro Launch (United Arab Emirates), Suning appliances (China), Tsingtao (China), Kosovo Ministry of Finance, Midea appliances (Chine). 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), Nestle (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: http://www.publicisgroupe.com

SOURCE Publicis Groupe Services

Source: PR Newswire

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