Publicis Groupe : THIRD QUARTER 2019 10 OCTOBER 2019

THIRD QUARTER 2019

10 OCTOBER 2019

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 from those projected. These forward-looking statements and forecasts are presented as at the date of this document and, other than as required by applicable law, Publicis Groupe does not assume any obligation to update them to reflect new information or events or for any other reason. Publicis Groupe urges you carefully to consider the risk factors that may affect its business, as set out in the Registration Document filed with the French Autorité des marchés Financiers (AMF) and which is available on the website of Publicis Groupe (www.publicisgroupe.com), including an unfavorable economic climate, an extremely competitive market sector, the possibility that our clients could seek to terminate their contracts with us at short notice, the fact that a substantial part of the Group's revenue is derived from certain key clients, conflicts of interest between advertisers active in the same sector, the Group's dependence on its directors and employees, laws and regulations which apply to the Group's business, legal action brought against the Group based on allegations that certain of the Group's commercials are deceptive or misleading or that the products of certain clients are defective, the strategy of growing through acquisitions, the depreciation of goodwill and assets listed on the Group's balance sheet, the Group's presence in emerging markets, exposure to liquidity risk, a drop in the Group's credit rating and exposure to the risks of financial markets.

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Q3 2019

HIGHLIGHTS

Q3 2019 HIGHLIGHTS

• Q3 2019 organic growth of-2.7%, below our internal expectations
• Explained by bothwell-identified challenges and the impact of the Groupe's transition
• • Higher than expected attrition in US traditional advertising
  • Softer performance in Media operations, in the context of high comparable
  • Short-termnegative impact of the repositioning of Publicis Sapient to full DBT in the U.S.

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Q3 2019

NET REVENUE & NET DEBT

NET REVENUE

(EUR million)	Q1	Q2	Q3	9M

2019 net revenue	2,118	2,234	2,577	6,929
2018 net revenue	2,082	2,198	2,197	6,477
Reported growth	+1.7%	+1.6%	+17.3%	+7.0%
Organic growth	-1.8%(1)	+0.1%	-2.7%	-1.4%

(1) -1.6% excluding PHS

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Q3 NET REVENUE (1)BY GEOGRAPHY

(EUR million)	Q3 2019	Q3 2018	2019	Organic
vs. 2018	growth
Europe	606	614	-1.3%	-3.3%
North America	1,561	1,214	+28.6%	-3.6%
Asia Pacific	260	224	+16.1%	+2.5%
Latin America	75	79	-5.1%	-7.2%
Middle East Africa	75	66	+13.6%	+9.0%
Total	2,577	2,197	+17.3%	-2.7%

(1) Revenue less pass-through costs. See definition in Supplemental Information

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YTD NET REVENUE (1)BY GEOGRAPHY

(EUR million)	YTD 2019	YTD 2018	2019	Organic
vs. 2018	growth
Europe	1,902	1,869	+1.8%	+0.0%
North America	3,877	3,535	+9.7%	-3.3%
Asia Pacific	704	647	+8.8%	+2.2%
Latin America	219	237	-7.6%	-7.5%
Middle East Africa	227	189	+20.1%	+15.5%
Total	6,929	6,477	+7.0%	-1.4%

(1) Revenue less pass-through costs. See definition in Supplemental Information

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YTD NET REVENUE ORGANIC GROWTH BY COUNTRY

> +10%

Colombia, India, Singapore, United Arab Emirates

+5% to +10%

Canada, Israel, Italy, Philippines

0 to +5%

China, France, Japan, United Kingdom

< 0%	Australia, Brazil, Germany, Indonesia, Mexico,
South Africa, Spain, United States

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NET FINANCIAL DEBT (1)

(EUR million)	Q3 2019	Q3 2018	2018
Net Financial Debt, average	1,724	1,410	1,323
Net Financial Debt, at end of period	5,043	1,742	(288)

(1) Net debt on finance lease has been reclassified in Lease Liabilities since 1stJanuary 2018, see definition in supplemental information

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LIQUIDITY AS OF SEPTEMBER 30, 2019

		Septembre 30, 2019		Septembre 30, 2018
(EUR million)	TOTAL	DRAWN	AVAILABLE		AVAILABLE
Committed Facilities
364-day revolving credit facilities	165	-	165		165
5-year revolving credit facility (1)	469	-	469		515
5-year syndicated facility (Club Deal) (2)	2,000	-	2,000		2,000
Total Committed Facilities	2,634	-	2,634		2,680
Cash and Marketable Securities	1,231	-	1,231		1,155
Total liquidity	3,865	-	3,865		3,835
Group other uncommitted facilities	214	22	192		231

1. €169 million in 2020, €200 million maturing in 2022, €100 million in 2023

(2) Maturing in 2024

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OUTLOOK AND PRIORITIES

UPDATED OUTLOOK

2019:

• Organic net revenue to decline by around-2.5%
• Confirmed 30 bps improvement for margin, reaching 17.3%(1), including the benefit of Epsilon's consolidation in H2
• Confirmed 5% headline EPS growth(2)

2020:

• Organic net revenue growth between-2% if current trends persist, and +1%
• Operating margin rate to reach a normalized level at around 17% for 2020 and beyond

(1) Excluding transaction costs	13
(2) Fullly diluted. At constant currency, excluding BEAT tax of €30 million (estimated) as of 2019 and transaction costs

KEY DRIVERS SUSTAINING SOLID MARGINS AND CASH

• 2 structural reasons
• • Activity mix weighed on highvalue-added expertise
  • Shared service organization
• Ongoing actions in a low growth context
• • Adjustment of cost base to revenue stream
  • Innovative offer driving superior value
  • Simplification of structures with country model
  • Real Estate consolidation
• Confirming high level of cash flow generation and deleveraging in 4 years
• • Planned Capex of c. €250M in 2019 rising to €300M in 2020 with 12 months of Epsilon

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STRATEGIC OUTLOOK MAKING US CONFIDENT FOR FUTURE GROWTH

A unique combination of data, creativity and technology for our clients

• Continued solid performance from Game Changers: +21% YTD organic growth

Publicis Sapient U.S. to increase its competitive advantage in growing DBT segment

• A strategic shift to capture the growth already seen in its international operations
• Encouraging New business momentum withlong-term transformation projects

Epsilon bringing unique bespoke Solution to clients with unparalleled data assets and AI

• Critical role played in the latest New business wins: Mondelez and Novartis
• Epsilon core data and tech expertise delivering positive growth in Q3

Radically simple organisation fully operational on 1stof January 2020

• Designed to fostercross-fertilisation and increase the focus on small- and mid-sized accounts

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CONCLUSION

CONCLUSION

• Well-identifiedchallenges weighing on Q3 performance
• Cautious approachleading to reset our expectations for the next quarters
• Confirmed 17.3%(1)operating margin rate (+30bps) and 5% headline EPS(2)growth in 2019
• All strategic levers in place:strong focus on executionto bring back organic growth

(1) Excluding transaction costs	17
(2) Fullly diluted. At constant currency, excluding BEAT tax of €30 million (estimated) as of 2019 and transaction costs

SUPPLEMENTAL

INFORMATION

SUPPLEMENTAL INFORMATION

NET REVENUE & ORGANIC GROWTH CALCULATION

	(EUR million)	Q1	Q2	Q3	YTD
	2018 net revenue	2,082	2,198	2,197	6,477
	Currency impact (2)	93	72	65	230
	2018 net revenue at 2019 exchange	2,175	2,270	2,262	6,707
	rate (a)
	2019 net revenue before impact of	2,136	2,273	2,201	6,610
	acquisitions (1)(b)
	Net revenue from acquisitions (1)	(18)	(39)	376	319
	2019 net revenue	2,118	2,234	2,577	6,929
	Organic growth (b/a)	-1.8%	+0.1%	-2.7%	-1.4%
	Organic growth ex PHS (3)	-1.6%	+0.1%	-2.7%	-1.4%

Currency impact

(EUR	Q1	Q2	Q3	YTD
million)
GBP (2)	3	0	(2)	1
USD (2)	90	69	55	214
Other	0	3	12	15
Total	93	72	65	230

1. Acquisitions (Optix, Independent Ideas, Ecosys, Domaines Publics, Payer Science, One Digital, The Shed, Kindred, Xebia, IDC Creation, Brilliant, Soft Computing, E2 Media, Epsilon, Rauxa, DigitasAffinity ID, McCready Bale Media), net of disposals.
2. EUR = USD 1.124 on average in YTD 2019 vs. USD 1.194 on average in YTD 2018 EUR = GBP 0.883 on average in YTD 2019 vs. GBP 0.884 on average in YTD 2018

(3) Publicis Groupe made effective the disposal of Publicis Health Services in January 2019	19

ORGANIC GROWTH FOR STRATEGIC GAME CHANGERS

Net revenue from

our game changers

excluding Epsilon YTD 2019

Organic growth of game

changers(vs YTD 2018)

Share of game changers' in Groupe net revenue

in Q3 excl. Epsilon

c. € 930 million

+21%

16%

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SUPPLEMENTAL INFORMATION

Q3 YTD NET REVENUE BY SECTOR

Other 5%

Leisure/Energy/

Luxury

8%

Food and beverage 12%

Healthcare 10%

2019 (1)

Retail	Non Food
consumer
8%
products
	12%

Automotive 15%

Financial 17%

TMT 13%

Other 6%

Leisure/Energy

/Luxury

7%

Food and beverage 12%

Healthcare 12%

2018

Retail	Non Food
consumer
7%
products
	13%

TMT 13%

Automotive 13%

Financial 17%

(1) Based on 3,619 clients representing 89% of net revenue

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SUPPLEMENTAL INFORMATION

GROSS DEBT AS OF SEPTEMBER 30, 2019

Breakdown by MATURITY

(EUR million)	Total	Oct. 2019 -	Oct. 2020 -	Oct. 2021 -	Oct. 2022 -	Oct. 2023 -
Sep. 2020	Sep. 2021	Sep. 2022	Sep. 2023	Onwards
Eurobond 2021 (1) (2)	791	-	-	791	-	-
Eurobond 2023	495	-	-	-	-	495
Eurobond 2024 (1) (2)	661	-	-	-	-	661
Eurobond 2025 (1) (2)	787	-	-	-	-	787
Eurobond 2028 (1) (2)	785	-	-	-	-	785
Eurobond 2031 (1) (2)	783	-	-	-	-	783
Medium term loans (1)	1 612	485	-	827	150	150
Earn out / Buy out	327	101	73	57	42	54
Other debt (1)	33	18	15	-	-	-
Total gross debt	6 274	604	88	1 675	192	3 715

1. Including fair values of associated derivatives
2. Eurobond swapped in USD at fixed rate

No covenants

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SUPPLEMENTAL INFORMATION

NET DEBT AS OF SEPTEMBER 30, 2019

Breakdown by CURRENCY

(EUR million)	Total	EUR	USD	GBP	Others
Eurobond 2021 (1) (2)	791		791
Eurobond 2023	495	495
Eurobond 2024 (1) (2)	661		661
Eurobond 2025 (1) (2)	787		787
Eurobond 2028 (1) (2)	785		785
Eurobond 2031 (1) (2)	783		783
Medium term loans (1)	1 612	449	1 163
Earn out / Buy out	327	13	257	14	43
Other (1)	33	(55)	91	6	(9)
Cash & marketable securities	(1 231)	(86)	(335)	(17)	(793)
Net debt (cash)	5 043	816	4 983	3	(759)

(1)	Including fair values of associated derivatives	23
(2)	Eurobond swapped in USD at fixed rate

SUPPLEMENTAL INFORMATION

NET DEBT AS OF SEPTEMBER 30, 2019

Breakdown by RATE

(EUR million)	Total	Earn-out /	Fixed	Floating
Buy-out	rate	rate
Eurobond 2021 (1) (2)	791	-	791	-
Eurobond 2023	495	-	495	-
Eurobond 2024 (1) (2)	661	-	661	-
Eurobond 2025 (1) (2)	787	-	787	-
Eurobond 2028 (1) (2)	785	-	785	-
Eurobond 2031 (1) (2)	783	-	783	-
Medium term loans (1) (3)	1 612	-	336	1 276
Other debt (1)	33	-	-	33
Total gross debt ex. earn out/buy out	5 947	-	4 638	1 309
Earn-out /Buy-out	327	327	-	-
Cash & marketable securities	(1 231)	-	-	(1 231)
Net debt (cash)	5 043	327	4 638	78

(1)	Including fair values of associated derivatives
(2)	Eurobond swapped in USD at fixed rate	24
(3)	Including 367mUSD swapped in fixed rate

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 impact of acquisitions, disposals and currencies.

EBITDA:Operating margin before depreciation.

Operating margin:Net revenue after personnel costs, other operating expenses (excl. non-current income and expense) and depreciation (excl. amortization of intangibles arising on acquisitions).

Operating margin rate:Operating margin as a percentage of net revenue.

Headline Group Net Income:Net income attributable to the Groupe, after elimination of impairment charges, amortization of intangibles arising from acquisitions, the main capital gains (or losses) on disposals, change in the fair value of financial assets, the impact of US tax reform, the revaluation of earn-out debt and Epsilon transaction costs.

EPS (Earnings per share):Group net income divided by average number of shares, not diluted.

EPS, diluted (Earnings per share, diluted):Group net income divided by average number of shares, diluted.

Headline EPS, diluted (Headline Earnings per share, diluted):Headline group net income, divided by average number of shares, diluted

Capex:Net acquisitions of tangible and intangible assets, excluding financial investments and other financial assets.

Free Cash Flow:Net cash flow from operating activities less interests paid & received, repayment of lease liabilities & related interests linked to operating activities

Free Cash Flow before change in working capital requirements:Net cash flow from operating activities less interests paid & received, repayment of lease liabilities & related interests and changes in WCR linked to operating activities

Net Debt (or financial net debt):Sum of long and short financial debt and associated derivatives, net of treasury and cash equivalents excluding lease liability since 1stJanuary 2018.

Average net debt:Average of monthly net debt at end of each month.

Dividendpay-out:Dividend per share / Headline diluted EPS.

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CONTACT

Press

Delphine Stricker

Tel.+ 33 1 44 43 72 83 /[e-mail]

Investor Relations

Alessandra Girolami,Vice-President Investor Relations & Strategic Financial Planning

Tel.[phone] /[e-mail]

Chi-ChungLo, Investor Relations Manager

Tel.[phone] /[e-mail]

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