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2016-10-20

Publicis Groupe: Third Quarter 2016 Revenue

Third Quarter 2016

RevenueOctober 20, 2016

3rd Quarter 2016

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| |
| Revenue € 2,315 million |
| Reported growth -0.4% |
| Growth at constant exchange rates +1.5% |
| Organic growth +0.2% |
| |
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At September 30, 2016

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| |
| Revenue € 7,068 million |
| Reported growth +2.9% |
| Growth at constant exchange rates +5.2% |
| Organic growth +1.9% |
| |
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Maurice Lévy, Chairman and CEO of Publicis Groupe:

« Publicis Groupe's revenue at September 30, 2016 was up 2.9% over the
corresponding period in 2015, and by 5.2% when exchange rates are factored
out. Organic growth for the period was 1.9%. Unsurprisingly, growth
decelerated in the third quarter to 0.2%. As announced, the third and fourth
quarters of the year are the most significantly impacted by accounts lost in
the media palooza. This was compounded by projects recently completed at
Razorfish that will only be relayed by new projects in the fourth quarter,
but that will produce their full effect in 2017. Therefore, on the
geographical standpoint, North America showed a sharp downturn (-4.0%) while
Europe reported a strong growth (+7.6%).

As anticipated, it is in 2017 that we will reap the full benefits of the new
"Power of One" organization we are implementing. The initial results are
already there, as evidenced by the large accounts awarded to us by
advertisers such as Wal-Mart, GSK, HPE, Coty and USAA. It is worth noting
"The Power of One" has been very successful at Razorfish which experienced
the best ever quarter for new business.

Regarding the fourth quarter, like every year, economic uncertainties can
result in marketing investments becoming the adjustment variable in the
equation towards the end of the year. We have nonetheless confidence in our
ability to reach our objectives, which is
why the Management Board has moved that the 42% payout ratio we had been
targeting for 2018 be decided as of 2016.

As indicated quite some time ago, the formal process of identifying my
successor will commence in November, leading to a decision to be taken by the
Supervisory Board, no later than at its meeting of February 2017.
»

1 - Q3 2016 REVENUE

Publicis Groupe's consolidated revenue for the third quarter of 2016 was 2,315
million euro, 0.4% below the 2,325 million euro reported for the
corresponding period in 2015. Exchange rates impacted revenue negatively by
45 million euro, i.e. the equivalent of 1.9% of Q3 2015 revenue. Net
acquisitions contributed 31 million euro to revenue in Q3 2016, i.e. the
equivalent of 1.3% of Q3 2015 revenue. Growth at constant exchange rates was
+1.5%.

Organic growth was +0.2% in the third quarter, below the growth rate at June
30 due to the more significant impact of media accounts lost in the 2015
media palooza
- an impact that will remain high in Q4 - and to the end of several digital
projects when new projects have not reached their full growth potential yet.

Breakdown of Q3 2016 revenue by region

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| EUR Revenue Organic Reported |
| Million Q3 2016 Q3 2015 growth growth |
| Europe 643 625 +7.6% +2.9% |
| North America 1,254 1,292 -4.0% -2.9% |
| Asia Pacific 261 260 -0.4% +0.4% |
| Latin America 89 87 +13.1% +2.3% |
| Middle East&Africa 68 61 +4.1% +11.5% |
| Total 2,315 2,325 +0.2% -0.4% |
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2 - REVENUE AT SEPTEMBER 30, 2016

In the first nine months of 2016, Publicis Groupe's consolidated revenue
totaled 7,068 million euro, up 2.9% from 6,867 million euro for the
corresponding period in 2015. Exchange rates adversely affected revenue by
150 million euro, i.e. the equivalent of 2.2% of revenue for the first nine
months of 2015. Net acquisitions contributed 222 million euro during the
first nine months, i.e. the equivalent of 3.2% of 2015 revenue for the same
period. Growth at constant exchange rates was +5.2%, and organic growth
stood at +1.9% at September 30, 2016.

Breakdown of revenue at September 30, 2016 by region

-----------------------------------------------------------
| EUR Revenue Organic Reported |
| Million 9M 2016 9M 2015 growth growth |
| Europe 1,992 1,894 +6.2% +5.2% |
| North America 3,874 3,767 -0.5% +2.8% |
| Asia Pacific 764 746 +2.9% +2.4% |
| Latin America 241 278 +5.1% -13.3% |
| Middle East&Africa 197 182 +1.0% +8.2% |
| Total 7,068 6,867 +1.9% +2.9% |
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Europe's revenue grew by 5.2%. When the impact of acquisitions and exchange
rates is factored out, organic growth stands at +6.2%, with a strong
performance in France (above 5%), and strong momentum in Germany and Italy
(growth of close to 10%), helped by a more conducive macroeconomic
environment. The situation was volatile in Russia where growth stood at more
than 9% at September 30 after growth of almost 5% in the first half year.
The UK has picked up sharply and recorded growth of almost 5% (including +7%
in the third quarter). Digital continued to post high growth in Europe
generally (+13.9%)

North America reported growth of 2.8% at September 30, though organic growth
was -0.5% (organic growth was -4.0% in the third quarter). This downturn was
attributable to media subsequent to the loss of certain media accounts in the
2015 media palooza
, as well as the end of several digital projects at a time when new projects
have not reached their full growth potential yet.

Asia Pacific reported growth of 2.4% (organic growth of 2.9%), with especially
satisfactory performance levels in China and India.

Latin America was down 13.3% on a reported basis mainly due to exchange rates
as this area recorded positive organic growth of 5.1%. Brazil picked up to
record strong revenue growth of 10.9% in the third quarter, and Mexico
continued to boast high growth (+20.5% in Q3 after 11.5% in the first half
year).

The Middle East&Africa achieved reported growth of 8.2% and organic growth of
1.0%.

Breakdown of revenue at September 30, 2016 by region: digital and analog

---------------------------------------------------------------
| Europe North Asia Latin Middle East Total |
| |
| America Pacific America &Africa |
| Digital +13.9% +0.3% +19.2% +3.2% +7.8% +4.9% |
| Analog -0.2% -1.8% -4.7% +5.5% -0.9% -1.3% |
| Total +6.2% -0.5% +2.9% +5.1% +1.0% +1.9% |
---------------------------------------------------------------

The Groupe's growth continued to be driven by its digital activities (organic
growth of +4.9%), with double-digit growth in Europe and Asia Pacific. North
America only grew by +0.3% due to the media account losses of 2015 and the
end of several digital projects when new projects have been recorded a slow
start. Despite the Q3 slowdown of organic growth that can be ascribed to the
very strong comparable period in 2015, Sapient continues to be buoyed posting
a satisfactory growth rate at September 30. It should also be pointed out
that analog activities continued to decline.

3 - NET DEBT

At September 30, 2016, net debt amounted to 2,452 million euro, compared with
1,872 million euro at December 31, 2015. The Groupe's average net debt at
September 30, 2016 was 2,443 million euro after 2,305 million euro at
September 30, 2015. It should be recalled that the Sapient acquisition was
completed on February 6, 2015.

4 - HIGHLIGHTS AT SEPTEMBER 30, 2016

4.1 - Transformation

During the first half of 2016, Publicis Groupe ended the traditional structure
of the holding company and silos and has reorganized its operations by
putting clients at the heart of the Groupe. Thus, clients have access to all
the Groupe's capabilities ("The Power of One") to meet their needs in
commerce, marketing or transformation.

The Groupe should reap the benefits of this organization in the forthcoming
quarters. The initial results are very promising with accounts gained that
include Wal-Mart, P&G's home care brands, Asda, GSK, HPE and USAA.

4.2 - Digital

Activities in digital and technology now represent 54% of Groupe revenue. The
Sapient integration is going well and its performance is very satisfactory.
Razorfish, which suffered headwinds for several quarters, recorded in the
third quarter its best quarter ever in terms of new business in its history
thanks to the support of Sapient and "The Power of One".

4.3 - Groupe commitment to start-ups

- Viva Technology Paris.
In conjunction with Groupe les Echos
, Publicis Groupe staged a global event in Paris bringing together start-ups
and the main stakeholders in the digital environment. This rendez-vous, held
from June 30 to July 2, attracted 5,000 start-ups, dozens of major industrial
groups and investors, and included over 300 conferences with the top names in
the global high-tech sector. With over 45,000 visitors in three days, Viva
Technology proved a tremendous success and underscored the pre-eminent place
of Publicis Groupe in the global digital economy. This event should be
staged every year from now on.

- Publicis90.
On the occasion of its 90th anniversary, Publicis Groupe launched a project
named Publicis90. The idea was to provide 90 projects or start-ups with
financial aid and the support of the Groupe's digital experts. After an
initial phase of stringent selection over a period of several months, the
winners were selected from among the 3,500 contestants from 130 countries,
and received their awards at a ceremony held during Viva Technology.

4.4 - Global partnership with Tencent

Publicis Groupe has entered into a strategic partnership with Tencent, the
internet gia...

Författare Hugin

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