Q1 2015 Revenue

Q1 2015 EuroBusiness Media (EBM): Publicis Groupe, the world’s third largest communications group, has reported its revenue for the first quarter of 2015. Maurice Lévy welcome, you are the CEO of Publicis Groupe. We begin by a look at the Q1 revenue. What’s your analysis of the first quarter figures? Maurice Lévy: Our revenue for Q1 has increased by 31.7%. This is due partially to the acquisition of Sapient which has been included in our numbers since February 6, 2015. We have also benefitted from the impact of forex for about 15%. So in total, we have an increase of 31.7%. If we look now at organic growth, we are quite pleased with the numbers that we have been able to deliver, which is 0.9%+, circa 1%, while we were expecting to be with a slight negative growth. It is not yet what Publicis can deliver, it is not yet where we should be. It is an encouraging sign for the full year. So we feel quite confident with our revenue growth. EBM: Now, looking at digital growth, it stands right now at 4.7% for the first quarter. Publicis Groupe usually reports better figures than this. What happened? Maurice Lévy: What happened is fairly simple. It is the consequence of last year’s issues that we had with the loss of the media of Microsoft, and we had a nice share of digital media. And also the fact that the Razorfish issues are continuing in the first quarter and in the second quarter, for probably two months of the second quarter. So we are still impacted. If we had to neutralize these numbers, we should be at 6.5% growth. So we feel quite good. And if you compare 4.7% with 0.9%, it shows clearly that we have the right strategy for the Group. EBM: One other element that was interesting, the performance of BRIC countries looks contrasted this quarter. How do you explain this? Maurice Lévy: There are some issues that are very different. If we look at Russia, we are facing the macro situation of Russia, which is impacted by the Ukraine crisis, the sanctions and also by the oil price and the basic resources. China is a very different story. China is delivering a stagnant number, so we are at -1% (with no consequence on the full year), and this is due to the fact that China has moved from an infrastructure investment to a consumption expenditure. In that case the transfer/transition from investment in infrastructure to consumption has not yet been completely achieved. So we expect this to grow progressively in the year. India, on the contrary, we have a very good first quarter with a growth of 5.7%. Regarding Brazil, the situation is due to the social crisis that Brazil is facing. We do hope that this will not last very long and that we will see in the second half of the year a much better situation. SAPIENT INTEGRATION EBM: Another major topic that we are covering today is Publicis Groupe’s integration of Sapient. The deal to acquire Sapient was closed on February 6th, 2015. How is that integration going and can you confirm that you will deliver the expected synergies? Maurice Lévy: We are extremely confident that not only we will deliver the expected synergies, but we will also deliver some other synergies which are the growth synergies. There are a few things that are extremely interesting. The first one, and the most important, is that the relationship between the teams and the integration teams are working extremely well. We are witnessing every day a very strong collaboration, and the implementation of the 90-day plan is going extremely well. This 90-day plan is set to design the solution for the future. How are we going to deliver a common platform for Publicis.Sapient? How are we going to leverage India? How are we going to share talent? And what kind of savings can we expect? All this is today working extremely well. There are teams who are working on each of the work streams and the first results are quite interesting. So we feel very pleased with the way this plan is going on and we feel extremely comfortable and very encouraged by the collaboration between the two teams. So this is something which is generating great hope. And more importantly, and probably the most important aspect of what we are achieving here is the transformation of Publicis Groupe. We will be able to serve our clients like no other company will be. And that is our cutting edge. This is our competitive edge. This is what will make Publicis Groupe unique in this competitive environment. BALANCE SHEET EBM: Next stop we are taking a look at the balance sheet. You recently launched a share buy-back program. Can you remind us of the context of this program? Maurice Lévy: In fact, when we acquired Bcom3, we had paid part of the shares in ORA. This concept of ORA are bonds which are either reimbursable in shares, new or existing. We have decided that we will reimburse, in an anticipated way, these bonds with existing shares: 12.6 million shares, 50% of which are coming from our treasury stock, and 50% are coming from a share buy-back program. All this will be done at the beginning of July, if the AGM accepts the proposition, the resolution for this anticipated reimbursement. And this will be extremely good for the shareholders, as we will not have to issue new shares. THE HOT TOPIC EBM: Next stop, a look at one of the moment’s hot topics. There is an ongoing debate in the United States about rebates and kickbacks. What’s Publicis Groupe’s stance on this issue? Maurice Lévy: We are not participating in this debate. We have a clear contract with our clients and we are absolutely rigorous in respecting transparency and the contracts. All our clients have the possibility of auditing the numbers. Our numbers have been regularly audited and we are participating in the audit very collaboratively, and until now nothing has been found. Publicis is extremely rigorous in the way we are handling the contracts of our clients. We feel responsible for them and we are committed to transparency. OUTLOOK EBM: And lastly, we take a look at the outlook for the next quarter and for 2015. What do you expect for Q2 and what do you expect for the full year of 2015 for Publicis Groupe? Maurice Lévy: We had a very bad year last year and we suffered from that, and we are still suffering from the consequences of last year. This has impacted Q1, will probably impact partially Q2, but we feel very good about the full year. Q1 has been above expectations. We expect Q2 to be firmer and stronger, if you prefer, than Q1. And we expect Q3 and Q4 to be even stronger. For the full year 2015, we confirm that we will be at least in line with the market delivery. EBM: Thanks very much for your insights, Maurice Lévy, CEO of Publicis Groupe. Maurice Lévy: Thank you.