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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005 | |
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
N/A (Translation of Registrant’s name into English) | 133, AVENUE DES CHAMPS-ELYSÉES 75008 PARIS France (Address of principal executive offices) | THE REPUBLIC OF FRANCE (Jurisdiction of incorporation or organization) |
Title of Each Class: | Name of Each Exchange on Which Registered: | |
American Depositary Shares (as evidenced by American Depositary Receipts), each American Depositary Share representing one Ordinary Share | The New York Stock Exchange, Inc. | |
Ordinary shares, nominal value€ 0.40 per share* | The New York Stock Exchange, Inc. |
* | Listed not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission. |
Ordinary shares, nominal value€ 0.40 per share (title of class) | 197,109,010(1) (number of ordinary shares) |
(1) | Including 13,039,764 ordinary shares held in treasury. |
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• | the advertising and communications industry is highly competitive; | |
• | unfavorable economic conditions may adversely affect our operations; | |
• | laws, regulations or voluntary codes applying in the sectors in which we operate may have an impact on our business; | |
• | our contracts with clients may be terminated at short notice; | |
• | a significant portion of our revenues comes from a small number of large advertisers; | |
• | conflicts of interest between our clients who compete with each other in the same business sector may negatively impact our growth; | |
• | we may be exposed to liabilities from allegations that certain of our clients’ advertising claims may be false or misleading or that our clients�� products may be defective; | |
• | our business is highly dependent on the services of our management and our employees; | |
• | our strategy of development through acquisitions and investments can be risky; | |
• | goodwill on acquisitions and intangible assets, including brands and client relationships, accounted for on the balance sheets of acquired companies may be subject to adjustment; | |
• | internal controls may prove difficult to implement; | |
• | we may not achieve announced numerical targets; | |
• | we are exposed to a number of risks from operating in developing countries; | |
• | downgrades of our credit ratings could adversely affect us; | |
• | currency exchange rate fluctuations and interest rate and market risk may negatively affect our financial results; | |
• | the trading price of our ADSs and dividends paid on our ADSs may be materially adversely affected by fluctuations in the exchange rate for converting euros into U.S. dollars; |
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• | it may not be possible for shareholders to effect service of legal process, enforce judgments of courts outside of France or bring actions based on securities laws of jurisdictions other than France against Publicis, its executive officers or members of its supervisory or management boards; | |
• | the ability of holders of our ADSs to influence the governance of our company may be limited; | |
• | some provisions of French law and ourstatuts(by-laws) could have anti-takeover effects; | |
• | we are subject to corporate disclosure standards that are less demanding than those applicable to some U.S. companies; and | |
• | other matters not yet known to us or not currently considered material by us. |
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Item 1. | Identity of Directors, Senior Management and Advisers |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
As of and for the Year Ended December 31, | ||||||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||
(In millions of euros, except per share data) | ||||||||||||||||||||
IFRS Income statement data: | ||||||||||||||||||||
Revenue | — | — | — | 3,832 | 4,127 | |||||||||||||||
Operating income | — | — | — | 326 | 652 | |||||||||||||||
Net income | — | — | — | 304 | 414 |
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As of and for the Year Ended December 31, | ||||||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||
(In millions of euros, except per share data) | ||||||||||||||||||||
Earnings per share: basic(1) | — | — | — | 1.32 | 1.83 | |||||||||||||||
Earnings per share: diluted(2) | — | — | — | 1.29 | 1.76 | |||||||||||||||
Dividends per share(3) | — | — | — | 0.30 | 0.36 | |||||||||||||||
IFRS Balance sheet data: | ||||||||||||||||||||
Tangible and intangible assets, net | — | — | — | 4,132 | 4,377 | |||||||||||||||
Total assets | — | — | — | 9,855 | 11,744 | |||||||||||||||
Bank borrowings and overdrafts (Short-term and long-term) | — | — | — | 1,765 | 2,137 | |||||||||||||||
Shareholders’ equity | — | — | — | 1,629 | 2,085 |
(1) | Based on the weighted average number of shares outstanding in each period used to compute basic earnings per share, equal to 210.5 million shares in 2004 and 210.4 million shares in 2005. |
(2) | Based on the weighted average number of shares outstanding in each period used to compute diluted earnings per share, equal to 234.0 million shares in 2004 and 2005. |
(3) | Dividends per ADS in U.S. Dollars were $0.35 in 2004 and $0.42 in 2005. (For your convenience, the dividends per share have been translated from the euro amounts actually paid into the corresponding U.S. dollar amounts at the Noon Buying Rate on December 30, 2005. This Noon Buying Rate may differ from the rate that may be used by the Depositary to convert euros to U.S. dollars for purposes of making payments to holders of ADSs.) |
As of and for the Year Ended December 31, | |||||||||||||||||||||
2002(3) | 2003 | 2004 | |||||||||||||||||||
2001 | (Restated) | (Restated) | (Restated) | 2005 | |||||||||||||||||
(In millions of euros, except per share data) | |||||||||||||||||||||
U.S. GAAP Income statement data: | |||||||||||||||||||||
Revenues | 2,434 | 2,969 | 3,863 | 3,825 | 4,127 | ||||||||||||||||
Operating profit (loss) | (466 | ) | 353 | (585 | ) | 402 | 644 | ||||||||||||||
Net income (loss) | (647 | ) | (13 | ) | (777 | ) | 346 | 395 | |||||||||||||
Earnings (loss) per share: basic(1) | (4.76 | ) | (0.09 | ) | (4.25 | ) | 1.90 | 2.16 | |||||||||||||
Earnings (loss) per share: diluted(2) | (4.76 | ) | (0.09 | ) | (4.25 | ) | 1.51 | 1.63 | |||||||||||||
U.S. GAAP Balance Sheet data: | |||||||||||||||||||||
Tangible and intangible assets, net | 3,789 | 8,307 | 7,036 | 6,408 | 6,748 | ||||||||||||||||
Total assets | 6,931 | 14,421 | 13,271 | 12,188 | 14,115 | ||||||||||||||||
Bank borrowings and overdrafts (short-term and long-term) | 1,052 | 3,540 | 3,975 | 2,911 | 3,153 | ||||||||||||||||
Shareholders’ equity | 1,866 | 3,755 | 2,302 | 2,402 | 3,074 |
(1) | Based on the weighted average number of shares outstanding in each period used to compute basic earnings (loss) per share, equal to 139.0 million shares in 2001, 146.0 million shares in 2002, 182.8 million shares in 2003, 182.4 million in 2004, and 182.8 million in 2005. |
(2) | Based on the weighted average number of shares outstanding in each period used to compute diluted earnings (loss) per share, equal to 139.7 million shares in 2001, 171.0 million shares in 2002, 239.5 million shares in 2003, 251.6 million in 2004, and 249.3 million in 2005. |
(3) | 2002 amounts include the operations of Bcom3 Group, Inc. for the period between the acquisition date in September 2002 through December 31, 2002. |
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Average | ||||||||||||||||
Period End(1) | Rate(2) | High | Low | |||||||||||||
2001 | 0.89 | 0.89 | 0.95 | 0.84 | ||||||||||||
2002 | 1.05 | 0.95 | 1.05 | 0.86 | ||||||||||||
2003 | 1.26 | 1.14 | 1.26 | 1.04 | ||||||||||||
2004 | 1.35 | 1.25 | 1.36 | 1.18 | ||||||||||||
2005 | 1.18 | 1.24 | 1.35 | 1.17 | ||||||||||||
October 2005 | 1.21 | 1.19 | ||||||||||||||
November 2005 | 1.21 | 1.17 | ||||||||||||||
December 2005 | 1.20 | 1.17 | ||||||||||||||
2006 (through March 31(3)) | ||||||||||||||||
January 2006 | 1.23 | 1.20 | ||||||||||||||
February 2006 | 1.21 | 1.19 | ||||||||||||||
March 2006 | 1.22 | 1.19 |
(1) | The period end Noon Buying Rate is the Noon Buying Rate on the last business day of the relevant period. |
(2) | The average of the Noon Buying Rates on the last business day of each month during the relevant period. |
(3) | The Noon Buying Rate for March 31, 2006 was 1.21. |
The advertising and communications industry is highly competitive. |
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Unfavorable economic conditions may adversely affect our operations. |
Laws, regulations or voluntary codes applying in the sectors in which we operate may have an impact on our business. |
Our contracts with clients may be terminated at short notice. |
A significant portion of our revenues comes from a small number of large advertisers. |
Conflicts of interest between our clients who compete with each other in the same business sector may negatively impact our growth. |
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We may be exposed to liabilities from allegations that certain of our clients’ advertising claims may be false or misleading or that our clients’ products may be defective. |
• | advertising claims made with respect to our clients’ products or services are false, deceptive or misleading; | |
• | our clients’ products are defective or injurious and may be harmful to the others; or | |
• | marketing, communications or advertising materials created for our clients infringe on the proprietary rights of third parties since client-agency contracts generally provide that the agency agrees to indemnify the client against claims for infringement of intellectual property rights. |
Our business is highly dependent on the services of our management and our employees. |
Our strategy of development through acquisitions and investments can be risky. |
Goodwill on acquisitions and intangible assets, including brands and client relationships, accounted for on the balance sheets of acquired companies may be subject to adjustment. |
Internal controls may prove difficult to implement. |
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We may not achieve announced numerical targets. |
We are exposed to a number of risks from operating in developing countries. |
Downgrades of our credit ratings could adversely affect us. |
Currency exchange rate fluctuations and interest rate and market risk may negatively affect our financial results. |
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The trading price of our ADSs and dividends paid on our ADSs may be materially adversely affected by fluctuations in the exchange rate for converting euros into U.S. dollars. |
• | the U.S. dollar equivalent of the euro trading prices of our ordinary shares on Euronext, which may consequently cause the trading price of our ADSs in the United States to also decline; | |
• | the U.S. dollar equivalent of the proceeds that a holder of our ADSs would receive upon the sale in France of any of our ordinary shares withdrawn from the depositary arrangement; and | |
• | the U.S. dollar equivalent of cash dividends paid in euros on our ordinary shares represented by our ADSs. |
It may not be possible for shareholders to effect service of legal process, enforce judgments of courts outside of France or bring actions based on securities laws of jurisdictions other than France against Publicis, its executive officers or members of its supervisory or management boards. |
The ability of holders of our ADSs to influence the governance of our company may be limited. |
Some provisions of French law and ourstatuts(by-laws) could have anti-takeover effects. |
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We are subject to corporate disclosure standards that are less demanding than those applicable to some U.S. companies. |
Item 4. | Information on the Company |
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• | Traditional advertising services. We provide traditional advertising services primarily through the Publicis, Saatchi & Saatchi and Leo Burnett networks. We also conduct our traditional advertising operations through smaller units, such as Fallon, our 49% interest in Bartle Bogle Hegarty, aU.K.-based agency, Marcel and the Kaplan Thaler Group. | |
• | Specialized agencies and marketing services. In addition to traditional advertising services, we provide specialized communications services such as public relations, corporate and financial communications, healthcare communications (aimed to answer the specific needs of the pharmaceutical industry), direct marketing, sales promotion, CRM (“Customer Relationship Management”), interactive communications, events communications and design. Such services, collectively referred to herein as “SAMS”, are provided through various subsidiaries, including Publicis Dialog, ARC Worldwide, Publicis Healthcare Communications Group (PHCG), Publicis Public Relations and Corporate Communications Group (PRCC), and Publicis Events Worldwide. These specialized communications services are generally provided in conjunction with traditional advertising services. | |
• | Media services. We conduct media buying operations through PGM Publicis Groupe Media, Starcom MediaVest Group, ZenithOptimedia and Denuo, which was recently formed to advise on new media. Our media sales activities are conducted in France through Médias & Régies Europe. |
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• | Expand our SAMS operations — specialized agencies and marketing services |
• | Increase our geographical presence and service offerings |
Services |
Business Structure |
• | Publicis. This network, headquartered in Paris, operates in 83 countries around the world, including Europe and the United States, and is comprised of agencies (including Publicis & Hal Riney, Burrell Communications and Bromley Communications), as well as Publicis Dialog with operations in 36 countries, in order to provide a holistic offering. | |
• | Saatchi & Saatchi. This network headquartered in New York, operating in 80 countries around the world, consists principally of Saatchi & Saatchi agencies, as well as Saatchi & Saatchi X, a worldwide marketing services network organization (shopper’s marketing) operating mostly in the U.S. It also includes The Facilities Group, a U.K. group that provides a range of technical and creative services in the areas of design, audiovisual production and print. |
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• | Leo Burnett. Headquartered in Chicago, the Leo Burnett network operates full service advertising agencies in 83 countries around the world. It also operates a number of SAMS units that focus primarily on direct, database and interactive marketing and sales promotion under ARC Worldwide. |
• | Fallon. This network is headquartered in Minneapolis and has offices in London, Sao Paulo, Hong Kong, Tokyo and Singapore. | |
• | Bartle Bogle Hegarty (BBH). This U.K.-based network, in which we have a 49% interest, is located in London and has offices in Singapore, Tokyo, New York and Sao Paulo. | |
• | Others. Other units in this category include the Kaplan Thaler Group in New York, Marcel in Paris, and Beacon Communications in Tokyo. |
Services |
• | Direct marketing/customer relationship management. CRM focuses on building clients’ relationships with individual customers through the use of direct marketing techniques and other means, as opposed to traditional advertising services which target groups of consumers or the public at large. Through our CRM operations, we assist clients in creating programs to reach individual customers and enhance brand loyalty. In addition, we provide the appropriate tools and database support to maximize the efficiency of those programs. | |
• | Sales promotion. Our sales promotion operations seek to increase sales and awareness of clients’ products and consumer loyalty throughpoint-of-sale promotions, coupon programs and similar means. | |
• | Healthcare communications. We have a network of agencies that work exclusively with clients in the healthcare industry to reach consumers and doctors and other medical professionals through advertising campaigns, medical conferences and symposia, and other means. These agencies also provide marketing services such as public relations, consulting and sales personnel recruitment and training. | |
• | Multicultural and ethnic communications. Some of our agencies have developed expertise in creating advertising and communications services aimed at specific ethnic groups, particularly African-Americans and Hispanics in the U.S. | |
• | Corporate and financial communications. We provide corporate and financial communications services designed to help clients deliver their message to investors and the public and, in particular, to help clients achieve their goals in connection with mergers and acquisitions, initial public offerings, spin-offs, proxy contests and similar matters. We also provide services aimed at helping clients address the communications and public relations aspects of publicized crises and other major events. | |
• | Human resources communications. Through our human resources operations, we create employee recruitment-related advertising, including classified advertising and campaigns to improve a client’s overall image with prospective applicants for companies seeking job applicants and recruiting firms. We also assist clients in developing internal communications programs. | |
• | Public relations. Our public relations services are designed to assist clients with the management of their ongoing relations with the press and the public. These services include: (i) strategic message and identity development to help clients position themselves in their markets and differentiate themselves from their competitors, (ii) product and company launch or re-launch services, which aim to create awareness of and position a product or company with customers, and (iii) media relations services, which help clients enhance their brand recognition and image. |
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• | Design. Our design services are intended to enhance the visual symbols that affect a client’s image and to ensure that the design and packaging of products are consistent with the means used to market them. | |
• | Interactive communications. Our interactive communications services consist primarily of website and intranet design, Internet-related direct marketing and related services and banner advertisement design. | |
• | Events marketing. We organize events for our clients, such as sales force conventions and business events (trade shows, meetings, exhibitions and opening ceremonies) in order to promote a corporate image consistent with the client’s strategic objectives. | |
• | Sports marketing. We plan and execute events and marketing programs for our clients around major sporting events to enable them to communicate with their consumers or their business partners (sponsorship, hospitality packages and marketing rights). | |
• | Production and pre-press. Technologies used for the execution of advertising and communications programs including photography studios, printing and audio and video facilities, as well as digital signage and digital asset management services. |
Business Structure |
• | Direct marketing CRM/sales promotion/digital communications. ARC Worldwide, Publicis Dialog and Saatchi & Saatchi X. | |
• | Healthcare communications. Publicis Healthcare Communications Group. | |
• | Corporate and financial communications, public relations, human resources communications, design. PRCC* (Publicis Consultants, Manning Selvage & Lee and Freud Communications). | |
• | Multicultural and ethnic communications. Bromley Communications, Burrell Communications, Vigilante and Lápiz. | |
• | Events communications. Publicis Events Worldwide. | |
• | Sport marketing. iSe International Sports & Entertainment AG (“iSe”), a joint venture with Dentsu Inc. | |
• | Production, prepress. Capps, Mundocom, WAM, MarketForward. |
* | Publicis announced in April 2005 the creation of Publicis Public Relations and Corporate Communications Group (PRCC) with 1,300 employees carrying out these services in 25 countries under the brands Publicis Consultants, Manning Selvage & Lee and Freud Communications. PRCC is not a new company, and did not result in the merger of agencies. It is a management board whose purpose is to improve the service offerings to clients, similar to PGM (Publicis Groupe Media). |
Services |
• | Media planning. Our media planning operations use computer software and data analysis related to consumer behavior and audience analysis of different media to build the most effective plan to conduct |
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an advertising or communications strategy, tailored to the marketing objectives, the target audience and the budget of our clients. | ||
• | Media buying. Our media buying operations purchase media space for our clients (including television, print, radio, Internet, and cell-phones) necessary to implement clients’ strategies, using our experience and buying power to obtain favorable rates and terms and conditions for our clients. | |
• | Media sales. Our media sales operations sell advertising space in outdoor media, print, radio and movie theaters to advertising and media buying firms on behalf of media companies. In some instances, they sell space to advertising and media buying operations that are part of our group. They do so, however, on an arm’s-length basis, dealing with those businesses on the same terms as other customers. |
Business Structure |
• | Media planning and buying. Publicis Groupe Media (PGM) is comprised of ZenithOptimedia Group and Starcom MediaVest Group. ZenithOptimedia conducts media services operations in 53 countries around the world. It has a strong presence in the U.K., the U.S., Germany, France and Spain. Starcom MediaVest conducts media services operations in 71 countries around the world, with a particularly strong presence in the U.S. | |
• | Media sales. We conduct media sales activities through Médias & Régies Europe and its subsidiaries, including Métrobus (poster advertising in France), Régie 1 (radio in France), Médiavision (movie theater advertising internationally, though mainly in France), and Médiavista (screens located in shopping centers in France and the U.S.). |
Year* | Europe | North America | Rest of the World | Total | ||||||||||
2005 | 1,647 | 1,763 | 717 | 4,127 | ||||||||||
2004 | 1,584 | 1,633 | 615 | 3,832 |
* | 2003 data is not shown as it has not been adjusted for the application of IFRS and is therefore not readily comparable. |
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Publicis | ||
Cadbury, Coca-Cola, Deutsche Telekom, Fidelity, Hewlett-Packard, L’Oréal, Nestlé, Pernod Ricard, | Procter & Gamble, Renault, Sanofi-Aventis, Sprint, Telefonica, UBS, Zurich Financial | |
Leo Burnett | ||
Allstate, ConAgra, Fiat, General Motors, Hallmark, Kellogg’s/Keebler, McDonald’s, | Nintendo, Philip Morris, Procter & Gamble, Samsung, Visa International, Walt Disney | |
Saatchi & Saatchi | ||
Bel Group, Carlsberg, Diageo/Guinness, General Mills, Mead Johnson, | Novartis, Procter & Gamble, T-Mobile, Toyota/Lexus, Visa | |
Starcom MediaVest Group | ||
Allstate, Coca-Cola, General Motors, Kellogg’s/Keebler, Kraft, Mars, Miller Beer, | Morgan Stanley, Philip Morris, Procter & Gamble, Sara Lee, Sun Microsystems, Walt Disney | |
ZenithOptimedia | ||
Hewlett-Packard, JP Morgan Chase, Kingfisher, L’Oréal, Nestlé, | Puma, Richemont, Sanofi-Aventis, Toyota, Verizon |
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Item 4A. | Unresolved Staff Comments |
Item 5. | Operating and Financial Review and Prospects |
• | revenues in line with market trends | |
• | savings and improvement in operating income representing€80 million, including: |
• | 54% from improvements in operating margin rates in certain countries, geographical regions and areas of business; | |
• | 37% from new initiatives to control costs, in particular pooling of administration and related resources on emerging markets, savings through centralized purchasing of services and equipment, and more efficient use of production resources; | |
• | 9% from optimization of administrative expense with the implementation of Shared Service Centers, which provide service support for Group entities. |
• | Average net debt(1)/ operating margin before amortization and depreciation: below 1.5 | |
• | Net debt(2)/ shareholders’ equity: below 0.5 | |
• | Interest cover (i.e., operating margin before amortization and depreciation/cost of net financial debt): over 7 |
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• | Publicis Rogers Communications in Canada; Voyages-sncf.com and sncf.com in France; Fidelity in Asia; Playtex/ Wonderbra and Hewlett-Packard (marketing services) in Europe; Wellpoint and TUMI in the U.S.; Jacob’s, Nobel Biocare and VisitLondon in the U.K.; Nestlé Waters/ Acqua Panna in Italy; and Nestlé multibrand promotion 2006 in Brazil. | |
• | Leo Burnett ConAgra/ Egg Beaters, Reddi-Whip, Turner Classic Movies and Western Union in the U.S., Samsung (global branding) and Washington Mutual in the U.S.; and Monster.co.uk in the U.K. | |
• | Saatchi & Saatchi Ameriprise in the U.S.; Dr. Martens in the U.K.; Toyota/ Prius and Hybrid Synergy Drive in China; Bacardi/ Dewar’s worldwide; P&G/ Millstone Coffee and Novartis/ Excedrin in the U.S.; and Standard Life in the U.K. | |
• | Other advertising networks and agencies Fallon’s new accounts included KitchenAid Home Appliances, Sony, Vanguard and NBC Universal in the U.S.; Volkswagen/ Jetta and Passat in Japan; and More Th>n in the U.K. |
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• | Starcom MediaVest Group LG in Europe; General Motors, Mattel and Simmons in the U.S.; P&G/ Gillette worldwide; and Washington Mutual in the U.S. | |
• | ZenithOptimedia JP Morgan Chase and L’Oréal/ Maybelline in the U.S.; Richemont in Europe and the U.S.; L’Oréal CPD in Greater Europe; Nestlé in Spain, France and Russia; L’Oréal in Canada; DaimlerChrysler in Spain; and Lloyds TSB in the U.K. |
• | Schering-Plough+GsK/ Levitra in the U.S.; BMW, Dyson, U.S. Army and Morgan Stanley in advertising | |
• | the COI (Central Office of Information) in the U.K. in media consultancy and media buying. |
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Allowance for Doubtful Accounts |
Business Combination and Impairment of Goodwill and Other Long Term Intangible Assets |
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Deferred Taxes |
Revenue Recognition |
• | For commission based customer arrangements (excluding production), revenue from advertising creation and media buying services is recognized at the date of publication or broadcast. | |
• | For other customer arrangements, including project based arrangements, fixed fee arrangements and time-based arrangements: revenue is recognized in the accounting period in which the service is rendered. Revenues under fixed fee arrangements are recognized on a straight-line basis which reflects |
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the nature and the scope of services rendered. Revenues under time-based arrangements are recognized on the basis of work performed. | ||
• | For fees based on performance criteria, revenue is recognized when the performance criteria have been met and the customer has confirmed that this is the case. |
Contingent Purchase Price Payments Related to Acquisitions |
Stock-Based Compensation |
Pension |
Restructuring Reserves |
Contingent Liabilities |
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Organic Growth |
• | We apply current year foreign exchange rates to prior year local currency revenue figures, excluding the effects of changes due to acquisitions and dispositions in the following manner: |
• | for entities acquired in the current fiscal year, we include current year revenue figures in the prior year’s comparative revenue figures, in order to exclude the effect of acquisitions; and | |
• | for entities sold in the current fiscal year, we exclude prior year revenue in order to show a comparable scope of consolidation in both fiscal years. |
• | then, the organic growth rate is the ratio of current year revenue to adjusted prior year revenue. See the following table for more detail. |
Total | |||||
(€ millions) | |||||
2004 IFRS | 3,832 | ||||
Components of revenue changes (excluding organic growth): | |||||
Impact of exchange rate changes | 27 | ||||
Other changes in scope of consolidation | 5 | ||||
2004 Revenue at comparable exchange rates and scope of consolidation | 3,864 | ||||
Organic growth(1) | 263 | ||||
2005 | 4,127 |
(1) | in percentage terms, organic growth was 6.82%, calculated by dividing€ 263 million by€ 3,864 million (2004 revenue at comparable exchange rates and scope of consolidation). |
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As of December 31, 2004 | ||||||||||||
(and for the year then ended) | ||||||||||||
As Previously | Impact of | |||||||||||
Reported | Restatement | Restated | ||||||||||
(In millions of euros) | ||||||||||||
Goodwill | 4,281 | 44 | 4,325 | |||||||||
Deferred tax liabilities (non-current) | 542 | 126 | 668 | |||||||||
Total shareholders’ equity | 2,484 | (82 | ) | 2,402 | ||||||||
Net income | 346 | — | 346 |
Revenues |
Operating Margin |
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Operating Income |
Other Income Statement Items |
Cost of Net Financial Debt and Other Financial Expense |
Income Taxes |
Net Income |
Earnings Per Share |
Review by Region |
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Europe |
North America |
Rest of the World |
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Optimum | ||||||||
Ratio | December 31, 2005 | |||||||
Average net debt/ operating margin before depreciation and amortization | <1.50 | 1.21 | ||||||
Net debt/shareholders’ equity | <0.5 | 0.1 | ||||||
Interest cover (operating margin before depreciation and amortization/ cost of net financial debt) | >7 | 9.81 |
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Falling Due | ||||||||||||||||
Less than | One to | More than | ||||||||||||||
Contractual Commitments | Total | One Year | Five Years | Five Years | ||||||||||||
(Millions of euros) | ||||||||||||||||
Commitments given | ||||||||||||||||
Operating lease commitments | 1,309 | 290 | 676 | 343 | ||||||||||||
Commitments to sell investments | 8 | 8 | — | — | ||||||||||||
Guarantees | 113 | 50 | 42 | 21 | ||||||||||||
Total | 1,430 | 348 | 718 | 364 | ||||||||||||
Commitments received | ||||||||||||||||
Sub-lease commitments(1) | 58 | 10 | 34 | 14 | ||||||||||||
Total | 58 | 10 | 34 | 14 |
(1) | Lease rent expense (net of sub-lease income) was M€ 179 in 2005 (as against M€ 186 in 2004). |
• | a guarantee given to a bank in the amount of€ 30 million, as owner of a 45% shareholding in iSe, since January 2005, to finance the acquisition of the license for the hospitality program for the 2006 World Cup Football Championship from FIFA. In addition, a guarantee was also given to a bank in the amount of€ 10 million as support for a line of credit from the bank to iSe. iSe, which was created jointly in 2003 between Publicis (45%) and Dentsu (45%), manages the “Hospitality and Prestige Ticketing” program of the 2006 World Cup Football Championship. See “Additional Information — Material Agreements”. | |
• | guarantees of payment of property taxes and charges relating to the Leo Burnett building in Chicago, for a total amount of 73 million euros over the period up to 2012. |
Following Due | ||||||||||||||||
Less than | One to | More than | ||||||||||||||
Total | One Year | Five Years | Five Years | |||||||||||||
(Millions of euros) | ||||||||||||||||
Commitments received | ||||||||||||||||
Unutilized credit lines(1) | 1,609 | 574 | 1,035 | — | ||||||||||||
Total | 1,609 | 574 | 1,035 | |||||||||||||
Commitments given | ||||||||||||||||
Other commercial commitments | — | — | — | — | ||||||||||||
Total | — | — | — | — |
(1) | See “Exposure to Liquidity Risk” in note 22 to our consolidated financial statements. |
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Bond Convertible into Interpublic Group (IPG) shares — 2% January 2007 |
OCEANE 2018 — 2.75% actuarial January 2018 |
OCEANE 2008 — 0.75% July 2008 |
ORANEs — Bonds redeemable in new or existing shares — September 2022 |
Equity Warrants |
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Payments Due by Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Contractual Obligations | Total | 1 Year | 1-3 Years | 3-5 Years | 5 Years | |||||||||||||||
(In millions of euros) | ||||||||||||||||||||
Long-Term Debt Obligations(1) | 1,784 | 173 | 605 | 6 | 1,000 | |||||||||||||||
Capital (Finance) Lease Obligations | 112 | — | — | — | 112 | |||||||||||||||
Operating Lease Obligations | 1,309 | 290 | 383 | 293 | 343 | |||||||||||||||
Purchase Obligations Reflected on the Balance Sheet under IFRS(2) | 154 | 22 | 48 | 45 | 39 | |||||||||||||||
Other Long-Term Liabilities Reflected on the Balance Sheet under IFRS(3) | 87 | 29 | 43 | 3 | 12 | |||||||||||||||
Total | 3,446 | 514 | 1,079 | 347 | 1,506 |
(1) | Long-term debt obligations relate to OCEANEs and ORANEs, our obligations under our 2007 and 2012 notes, bank loans, bank overdrafts and accrued interest. (see note 22 to our consolidated financial statements). |
(2) | Purchase obligations relate to standard put options to repurchase minority interests, the value of which has been estimated on the basis of contractual clauses as of the latest available date (see “— Commitments for Capital Expenditures”). |
(3) | Other long term liabilities reflected on the balance sheet under IFRS relate to earn-out provisions (see “— Commitments for Capital Expenditures”). |
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Under IFRS, convertible bonds (OCEANE 2008 and OCEANE 2018) and bonds redeemable in shares (ORANEs) are hybrid financial instruments. These financial instruments are comprised of a conversion option (an equity component) recognized in shareholders’ equity and a debt component. The debt component is recognized at fair value at the date of issue. The fair value of the equity component is determined at the date of issuance of the bonds as the difference between the fair value of the bonds and the fair value of the debt component. Under U.S. GAAP, the entire market value, at the date of issue, of the OCEANE 2008 bonds, the OCEANE 2018 bonds, and the ORANEs are recognized as debt. |
Under IFRS, the fair value of stock options at the date of grant is determined in accordance with IFRS 2 “Share-based Payment” and recognized as personnel expenses over the vesting period. The fair value of options is determined using a Black Scholes valuation model. The Group opted for the exception to retrospective application of IFRS 2, allowed by IFRS 1 “First Time Adoption of IFRS”, and only restated plans implemented subsequent to November 7, 2002, for which options are not vested as of January 1, 2005. Under U.S. GAAP, the Group elected to account for its stock-based compensation plans using the “intrinsic value” method under the guidelines of APB 25. |
Under IFRS 1, companies were permitted to recognize adjustments to all or some of their existing assets to record them at their estimated fair values as of January 1, 2004. The Group elected to re-value certain of its assets pursuant to IFRS 1 “First Time Adoption of IFRS”. Under U.S. GAAP, the historical cost of the Company’s assets was not adjusted upon adoption of IFRS. |
In accordance with the option provided by IFRS 1 “First Time Adoption of IFRS”, existing actuarial gains and losses at January 1, 2004 were recognized directly as a reduction of equity. Under |
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U.S. GAAP, actuarial gains and losses are amortized over the expected average residual working lives of the beneficiaries. |
Upon the adoption of IFRS as of January 1, 2004, the gross value of goodwill at the transition date is deemed to be equal to the net value of such goodwill under French GAAP. Under French GAAP, goodwill was amortized on a straight-line basis over a period varying from 10 to 40 years. Subsequent to adoption, goodwill is not amortized but is rather subject to impairment tests performed at least annually, in accordance with IAS 36 “Impairment of Assets”. Under U.S. GAAP, since January 1, 2002, goodwill is no longer amortized in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets” (SFAS 142), but rather is also reviewed at least annually for impairment. |
The Group elected to use the exemption allowed by IFRS 1 to not apply IFRS 3 “Business Combinations” to business combinations that took place before the transition date (January 1, 2004). Therefore, the treatment of the following business combinations under French generally accepted accounting principles (“French GAAP”) has been retained in IFRS, which generates the following principal differences with U.S. GAAP: |
• Saatchi & Saatchi: under French GAAP, the business combination with Saatchi & Saatchi was accounted for in accordance with the alternative method under Article 215 of Rule 99-02 of theComité de Réglementation Comptable(“CRC”). Under U.S. GAAP, the transaction was accounted for using purchase accounting principles, with Publicis Groupe, S.A. being the acquirer on September 8, 2000. Under U.S. GAAP, the assets and liabilities were recognized at fair value at the date of acquisition (2000). | |
• Bcom3: under French GAAP the value of the ordinary shares exchanged for Bcom3 stock and ORANEs issued is based on Publicis’ ordinary share price as of the date of acquisition (on September 24, 2000), or€ 17.60 per share. Under U.S. GAAP, the value of the ordinary shares is based on the five-day average of Publicis’ ordinary share price of€ 36.40 per share (two days before the public announcement of the acquisition on March 7, 2002, the day of announcement, and two days after). | |
• ZenithOptimedia Group: under French GAAP, 50% of Zenith Media shares, acquired in 2000 in conjunction with the acquisition of Saatchi & Saatchi, were initially accounted for in accordance with the alternative method. They were subsequently recognized at their fair value upon acquisition of an additional 25% share of ZenithOptimedia Group and the formation of the ZenithOptimedia Group in 2001. Under U.S. GAAP, the adjustments related to the acquisition of the initial 50% of ZenithOptimedia Group are reversed, since the Saatchi & Saatchi acquisition was recorded using purchase accounting rules. | |
• FCA: under French GAAP, the goodwill arising from the acquisition of the FCA Group in 1993, paid for by issuing new ordinary shares was written off through shareholders’ equity. Under U.S. GAAP, such an accounting treatment is not permitted and thus the goodwill resulting from the acquisition was capitalized as an asset in the balance sheet. | |
• Compensation arrangements: under French GAAP, certain compensation arrangements with former Frankel employees were accounted for as an element of purchase price in purchase accounting. Under U.S. GAAP, to the extent that the compensation is contingent upon continuing |
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employment with the group, it is recognized as compensation expense in the periods in which it is earned. |
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Item 6. | Directors, Senior Management and Employees |
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Elisabeth Badinter | ||
Initially Appointed | November 1987 (appointed as chairperson of the supervisory board in April 1996) | |
Expiration Date of Current Term | June 2006 | |
Principal Function in Publicis | Chairperson of the supervisory board and Chairperson of the supervisory board of Médias & Régies Europe S.A. (France) Member of the nomination and compensation committee of Publicis Groupe S.A. (France) | |
Principal Business Activities Outside Publicis | Author | |
Robert Badinter | ||
Initially Appointed | June 1996 | |
Date of Resignation | March 2, 2006 | |
Principal Function in Publicis | Director | |
Principal Business Activities Outside Publicis | Professor Emeritus, University of Paris I (Panthéon-Sorbonne); honorary attorney | |
Simon Badinter | ||
Initially Appointed | June 1999 | |
Expiration Date of Current Term | June 2011 | |
Principal Function in Publicis | Chairman of the management board, Médias & Régies Europe SA (France); | |
Permanent representative of Médias et Régies Europe of R.A.T.P-Métrobus Publicité SA (France), Médiavision & Jean Mineur SA (France); | ||
Chairman of the management board of Gestion Omni Media Inc. (Canada) and Chairman of the management board and Chief Executive Officer of Omni Media Cleveland Inc. (USA) and Chairman and Chief Executive Officer of Médias & Régies America Inc. (USA). | ||
Principal Business Activities Outside Publicis | None | |
Monique Bercault | ||
Initially Appointed | June 1998 | |
Expiration Date of Current Term | June 2010 | |
Principal Function in Publicis | Director Technical advisor to the chairman of the management board of Médias & Régies Europe | |
Principal Business Activities Outside Publicis | None | |
Michel Cicurel | ||
Initially Appointed | June 1999 | |
Expiration Date of Current Term | June 2010 | |
Principal Function in Publicis | Director President of the nomination and compensation committee of Publicis Groupe S.A. (France) |
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Principal Business Activities Outside Publicis | Chairman of the Management Board of: La Compagnie Financière Edmond de Rothschild Banque SA and | |
Compagnie-Financière Saint-Honoré SA (France); | ||
Chairman of the board of: ERS SA (France), Edmond de Rothschild SGR Spa (Italy), and Edmond de Rothschild SIM Spa (Italy); | ||
Chairman of the supervisory board of: | ||
Edmond de Rothschild Multi Management SAS (France) and Edmond de Rothschild Private Equity Partners SAS (France)*; | ||
Member of the board of: | ||
Banque Privée Edmond de Rothschild (Switzerland), Edmond de Rothschild Limited (U.K.), La Compagnie Financière Holding Edmond et Benjamin de Rothschild SA (Switzerland), La Compagnie Benjamin de Rothschild (Switzerland), Bouygues Telecom SA (France), Cdb Web Tech (Italy), Cir International (Luxembourg)*, Rexecode (Association) (France), and Société Générale SA (France). | ||
Permanent representative of: | ||
Compagnie Financière Edmond de Rothschild Banque (France), Edmond de Rothschild Corporate Finance SA (France), Edmond de Rothschild Asset Management SA (France), Edmond de Rothschild Financial Services (France), Edmond de Rothschild Multi Management SAS (France)*, Equity Vision SA France and Assurances et Conseils Saint-Honoré (France). | ||
Member of the board of Rothschild & Compagnie Banque SCS (France). | ||
Permanent representative of Compagnie-Financière Saint-Honoré on the board of Cogifrance SA (France) | ||
Auditor, Paris-Orléans SA (France) | ||
*Term expired during 2005 | ||
Michel David-Weill | ||
Initially Appointed | June 1990 | |
Expiration Date of Current Term | June 2008 | |
Principal Function in Publicis | Director Member of the Audit committee of Publicis Groupe S.A. (France). | |
Principal Business Activities Outside Publicis | Chairman of Lazard LLC (USA)* (until May 2005); President of Maison Lazard SAS (France)* (until May 2005); | |
President of Malesherbes SAS (France); | ||
Director of the board of: Groupe Danone SA (France), Fonds Partenaires- Gestion (France)*, Lazard Frères Banque (France)*; |
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Managing Director of Lazard Frères & CO LLC (USA); Chairperson of the supervisory board of Eurazeo SA (France); | ||
Managing partner of: | ||
Lazard Frères SAS* (France) (until May 2005), Partena SCS (France) and Partemiel SNC (France)*; | ||
Manager of: | ||
Parteman SNC (France), Parteger SNC (France)* and BCNA; | ||
Chairman of the nomination and compensation committee of Groupe Danone SA (France). | ||
*Term expired during 2005 | ||
Sophie Dulac | ||
Initially Appointed | June 1998 (appointed as vice-chairperson in June 1999) | |
Expiration Date of Current Term | June 2010 | |
Principal Function in Publicis | Director, vice-chairperson | |
Principal Business Activities Outside Publicis | Manager of Sophie Dulac Productions SARL (France), and Sophie Dulac Distributions SARL (France); | |
Chairperson of the board of Les Ecrans de Paris SA (France); | ||
Chairman of Association Paris Tout Court (France). | ||
Michel Halpérin | ||
Initially Appointed | March 2006 (subject to approval of shareholders) | |
Expiration Date of Current Term | June 2008 | |
Principal Business Activities Outside Publicis | Vice-chairperson ofGrand Conseil(2003-2004) de Geneva (Switzerland); | |
Chairman ofGrand Conseil(2005-2006) de Geneva (Switzerland); | ||
Chairman of Human Rights Watch, Geneva International Committee; | ||
Chairman of Amis Suisse de l’Université Ben Gourion du Néguev; | ||
Vice-chairperson of board of BNP PARIBAS SA (Switzerland); | ||
Member of board of Fondation Genève Place Financière. |
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Yutaka Narita | ||
Initially Appointed | June 2002 | |
Expiration Date of Current Term | June 2008 | |
Principal Function in Publicis | Director | |
Principal Business Activities Outside Publicis | Principal advisor & chairman of Dentsu Group, Dentsu Inc.; | |
Chairman of the Japan Advertising Agencies Association; | ||
Chairman of the Japan Audit Bureau of Circulation; | ||
Executive director of FM Japan Ltd.; | ||
Member of the Foundation Board of the Institute for Management Development; | ||
Member of: the French Chamber of Commerce and Industry in Japan, and the Strategic Council on Attractiveness of France; | ||
Professor Emeritus, Beijing University. | ||
Tateo Mataki | ||
Initially Appointed | September 2004 | |
Expiration Date of Current Term | June 2008 | |
Principal Function in Publicis | Director | |
Principal Business Activities Outside Publicis | President and chief executive officer of Dentsu Inc.; | |
Vice president of Japan Marketing Association International Advertising Association Japan Chapter; Organizing Committee for the IAAF World Championship in Athletics 2007; | ||
Chairman of Japan Advertising Agencies Association; | ||
Member of: the Nippon Academy Award Association and The Tokyo Chamber of Commerce and Industry; | ||
Director of: | ||
Tokyo Broadcasting System Television, Inc, Broadcasting of Niigata Inc, Shinetsu Broadcasting Corporation Ltd; Senior Corporate Advisor to Iwate Broadcasting Co., Ltd. | ||
Hélène Ploix | ||
Initially Appointed | June 1998 | |
Expiration Date of Current Term | June 2010 | |
Principal Function in Publicis | Director Member of the Audit Committee: Publicis Groupe S.A. (France). | |
Principal Business Activities Outside Publicis | Chairman of: | |
Pechel Industries Partenaires SAS, Pechel Industries SAS (France), and Pechel Services SAS (France); |
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Member of the board of: | ||
Lafarge (France)*, BNP Paribas (France), Boots Group Plc (UK), and Ferring (Switzerland)*; | ||
Permanent representative of: | ||
Pechel Industries on the boards of Aquarelle.com Group SA (France), Quinette Gallay SA (France), CVBG-Dourthe Kressman SA (France), Xiring SA (France), and CAE International SA (France); | ||
Permanent representative of Pechel Industries Partenaires: SVP Management et Participations SA (France); | ||
Board observer of Ypso Holding SA (Luxembourg); Manager of Hélène Ploix EURL and Hélène Marie Joseph EURL (France); | ||
*Term expired during 2005 | ||
Felix George Rohatyn | ||
Initially Appointed | June 2001 | |
Expiration Date of Current Term | June 2007 | |
Principal Function in Publicis | Director | |
Principal Business Activities Outside Publicis: | Chairman of Rohatyn Associates LLC (USA); | |
Director of: LVMH Moët Hennessy Louis Vuitton S.A. (France) and Rothschilds Continuation Holdings AG (France); | ||
Member of supervisory board of Lagardère Group S.A. (France); | ||
Trustee and vice-chairperson of Carnegie Hall (USA). | ||
Robert Seelert | ||
Initially appointed | August 2000 | |
Expiration Date of Current Term | June 2006 | |
Principal Function in Publicis | Director and chairman of Saatchi & Saachi Worldwide, Inc. (USA); | |
Director and chief executive officer of: | ||
Saatchi & Saatchi Holdings Worldwide, Inc. (USA), Saatchi & Saatchi Compton Worldwide, Inc. (USA), Saatchi & Saatchi North America, Inc. (USA), and Zenith Trustees Limited (USA). | ||
Principal Business Activities outside Publicis: | Director of The Stride Rite Corporation |
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Amaury de Seze | ||
Initially Appointed | June 1998 | |
Expiration Date of Current Term | June 2010 | |
Principal Function in Publicis | Director | |
Principal Business Activities Outside Publicis | President of: | |
Financière PAI partners SAS (France) PAI Partners SAS (France), and Financière PAI SAS (France); | ||
Chairman of PAI partners UK Ltd (UK); | ||
Member of supervisory board of Gras Savoye SCA (France); | ||
Director of: | ||
Carrefour SA (France), Eiffage SA (France), Erbé SA (Belgium), Gepeco SA (France), Groupe Bruxelles Lambert SA (Belgium), Groupe Industriel Marcel Dassault SA (France), PAI Europe III General Partner (France), PAI Europe IV General Partner (France), Power Corporation du Canada Holding Ltd. (Canada), Pargesa SA (Switzerland), Vivarte SA (France), Novalis SAS (France) and Novasaur SAS (France); | ||
Henri-Calixte Suaudeau | ||
Initially Appointed | November 1987 | |
Expiration Date of Current Term | June 2006 | |
Principal Function in Publicis | Director of Publicis Conseil SA (France) | |
Member of the nomination and compensation committee of Publicis Groupe S.A. (France) | ||
Principal Business Activities Outside Publicis | None | |
Gérard Worms | ||
Initially Appointed | June 1998 | |
Expiration Date of Current Term | June 2010 | |
Principal Function in Publicis | Director | |
President of the audit committee of Publicis Groupe S.A. (France) | ||
Principal Business Activities Outside Publicis | Managing partner of: | |
Rothschild et Cie Banque (France), and Rothschild et Cie (France); | ||
Chairman of S.G.I.M. SA (France); | ||
Member of the supervisory board of: Métropole Télévision SA (France), Médias et Régies Europe SA (France), and Paris-Orléans SA (France); | ||
Director of: Editions Atlas SA (France), and Cofide SA (Italy); | ||
Auditor of: Ondéo Degrémont SA (France), and SIACI SA (France). |
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Claudine Bienaimé | ||
Initially Appointed | January 2004 | |
Expiration Date of Current Term | December 2007 | |
Principal Function in Publicis | Director and general secretary | |
Director of: Publicis Conseil SA (France), Médiasystem SA (France), Solange Stricker MS&L France SA (France), Groupe Zenithoptimedia SA (France), Publicis Groupe Investissements BV (Netherlands), Publicis Holdings BV (Netherlands), and Publicis Groupe Holdings BV (Netherlands); | ||
Permanent representative of: Publicis Conseil on the board of: Publicis Finance Services SA (France), Publicis Et Nous SA (France), Paname Communication SA (France)*, Carré Noir SA (France), Re: Sources France SAS (France), Loeb & Associés SA (France), World Advertising Movies SA (France), Publicis Koufra SA (France)*, Publicis Cachemire SA (France)* and 2ème Communication SA (France)*; | ||
Permanent representative of Publicis Groupe on the board of Publicis Technology SA (France); Manager of Drugstore Champs Elysées SNC (France)*; | ||
Member of the Management Committee of Multi Market Services France Holdings SAS (France); General Secretary of Publicis Groupe S.A. (France); Executive vice-president of Rosclodan SA and Sopofam SA (France). | ||
*Term expired during 2005 | ||
Principal Business Activities Outside Publicis | Chief executive officer of Société Immobilière du Boisdormant SA (France); Acting general director of Rosclodan SA (France) and Sopofan (France); Manager of SCI Presbourg Etoile (France); Director of: Gévelot SA (France), P.C.M. Pompes SA (France), Gévelot Extrusion SA (France), and Gurtner SA (France) | |
President of the Audit Committee of Gévelot SA (France) | ||
Jack Klues | ||
Initially Appointed | January 2005 | |
Expiration Date of Term | December 2007 | |
Principal Function in Publicis | Director Chief executive officer of Starcom Media Vest Group, Inc. (USA)*; Chairman of: Starcom Worldwide, Inc. (USA)*; Director of: Starcom Worldwide SA (France), Starlink Services, Inc (USA), Starcom Worldwide SA de CV (Mexico), and Relay, Inc. (USA)*. |
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*Term expired during 2005 | ||
Principal Business Activities Outside Publicis | Director of Off the Street Club | |
Maurice Lévy | ||
Initially Appointed | November 1987 | |
Expiration Date of Current Term | December 2007 | |
Principal Function in Publicis | Chairman of the management board, Chairman and chief executive officer of Publicis Conseil SA (France); Chairman, chief executive officer and director of Publicis USA Holdings, Inc. (USA); Member of the supervisory board of Médias & Régies Europe SA (France) Director of: Optimedia Holdings Limited (U.K.)*, Multi Market Services Limited (U.K.), ZenithOptimedia Group Limited (U.K.), Publicis Communication (Pty) Limited (South Africa), Publicis Johannesburg (Pty) Limited (South Africa)*, Optimedia SA Pty Ltd (South Africa)*, Publicis Communication Pty Limited(Australia)*, Publicis Communication Limited (New Zealand)*, Publicis Canada Inc. (Canada)*, Publicis-Unitros SA (Chile)*, Publicis Ariely Advertising 2000 Limited (Israel)*, Fallon Group, Inc. (USA), MMS USA Holding, Inc. (USA), Publicis USA holdings, Inc. (USA), MarketForward Corporation (USA)*, Publicis & Hal Riney (USA), Publicis.Wet Desert Sdn Bhd (Malaysia)*, Publicis Pakistan Pvt Limited (Pakistan)*, Publicis Ad-Link Group Limited (China)*, Publicis Graphics Group Holding SA (Luxembourg)*, Omagh Pty Limited (Australia)*, Optimedia Australia Pty Limited (Australia)*, Papagena Pty Limited (Australia)*, Publicis Loyalty Pty Limited (Australia)*, Publicis Mojo Pty Limited (Australia)*, Publicis Dialog Pty Limited (Australia)*, Publicis Mojo Limited (New Zealand)*, A.B. Data Limited (Israel)*, Triangle Holdings Limited (U.K.), Asia Baseline Holdings, Inc. (Philippines) President and director of: U.S. International Holding Company, Inc. (USA)*, and D’Arcy Masius Benton & Bowles, Inc. (USA)* Permanent representative of Publicis Groupe S.A. (France) on the board of Publicis Technology SA (France)* | |
Principal Business Activities Outside Publicis | President of the Palais de Tokyo, site de création contemporaine (French association under law 1901) | |
*Term expired during 2005 or during the first quarter of 2006, as applicable | ||
Kevin Roberts | ||
Initially Appointed | September 2000 | |
Expiration Date of Current Term | December 2007 | |
Principal Function in Publicis | Director and President of Saatchi & Saatchi Worldwide Inc. (USA) |
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Principal Business Activities Outside Publicis | Member of the board of: Conill Advertising inc. (USA), Rowland Communications Worldwide, Inc. (USA), Saatchi & Saatchi Compton Worldwide Inc. (USA), Saatchi & Saatchi North America, Inc. (USA), Saatchi & Saatchi Rowland Inc. (USA), Samuncam Disposition N° 4 Corporation (USA), Saatchi & Saatchi Holdings Worldwide Inc. (USA)*, Red Rose Limited (New Zealand), Red Rose Charitable Services Limited (New Zealand), Inspiros Worldwide Limited (New Zealand)*, Lion Nathan plc (U.K.), New Zealand Rugby Football Union (U.K.), North Harbour Rugby Football Union (U.K.), Thomson Murray, Inc. (USA). | |
*Term expired during 2005 or during the first quarter of 2006, as applicable | ||
Bertrand Siguier | ||
Initially Appointed | June 1999 | |
Expiration Date of Current Term | December 2007 | |
Principal Function in Publicis | Director President of Multi Market Services France Holdings SAS (France) Director of: Publicis Cachemire SA (France)*, Publicis Technology SA (France), Publicis Canada Inc. (Canada), Multi Market Services Limited (U.K.), Publicis & Hal Riney (USA), Publicis Hellas Advertising (Greece), Publicis Graphics Group Holding SA (Luxembourg), Publicis Communication Limited (New Zealand), Publicis Mojo Limited (New Zealand), Publicis Graphics Group Holding SA (Luxembourg), Publicis Wet Desert Sdn Bhd (Malaysia), and Publicis Communication (Pty) Ltd (South Africa), Deputy chairman of iSe International Sports and Entertainment AG (Switzerland), Publicis sp.z.o.o. (Poland) | |
*Term expired during 2005 | ||
Principal Business Activities Outside Publicis | Board member of Gantois SA (France), HM Editions (France) Gaumont |
Business Experience of Management Board Members |
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2005 | 2004 | |||||||||||||||||||||||||||
Total Gross | Base | Variable | Attendance | Benefits in | Total Gross | Base | ||||||||||||||||||||||
Compensation | Compensation | Compensation | fees | kind(5) | Compensation | Compensation | ||||||||||||||||||||||
Management Board | ||||||||||||||||||||||||||||
Maurice Lévy | 3,060,430 | 800,080 | 2,260,350 | 3,200,073 | 800,073 | |||||||||||||||||||||||
Claudine Bienaimé | 300,000 | 120,000 | 180,000 | 270,000 | 120,000 | |||||||||||||||||||||||
Jack Klues(1)(3) | 1,608,439 | 643,688 | 952,658 | 12,093 | — | — | ||||||||||||||||||||||
Kevin Roberts(1) | 2,561,550 | 804,610 | 1,733,130 | 23,810 | 5,496,604 | (6) | 805,120 | |||||||||||||||||||||
Bertrand Siguier | 577,440 | 327,440 | 250,000 | 551,296 | 301,296 | |||||||||||||||||||||||
Roger Haupt(1)(9) | 5,531,621 | 764,864 | ||||||||||||||||||||||||||
Supervisory Board | ||||||||||||||||||||||||||||
Elisabeth Badinter | 222,939 | 182,939 | 40,000 | 228,939 | 182,939 | |||||||||||||||||||||||
Sophie Dulac | 15,000 | 15,000 | 10,500 | |||||||||||||||||||||||||
Robert Badinter | 15,000 | 15,000 | 10,500 | |||||||||||||||||||||||||
Michel David-Weill | 10,000 | 10,000 | 7,000 | |||||||||||||||||||||||||
Henri-Calixte Suaudeau | 40,000 | 40,000 | 144,056 | (7) | 53,647 | |||||||||||||||||||||||
Monique Bercault | 20,000 | 20,000 | 14,000 | |||||||||||||||||||||||||
Hélène Ploix | 45,000 | 45,000 | 38,000 | |||||||||||||||||||||||||
Gérard Worms | 45,000 | 45,000 | 38,000 | |||||||||||||||||||||||||
Amaury de Seze | 10,000 | 10,000 | 10,500 | |||||||||||||||||||||||||
Simon Badinter(1)(8) | 322,520 | 154,485 | 138,677 | 20,000 | 9,358 | 188,088 | 144,922 | |||||||||||||||||||||
Michel Cicurel | 30,000 | 30,000 | 14,000 | |||||||||||||||||||||||||
Robert L. Seelert(1) | 290,543 | 241,383 | 15,000 | 34,160 | 288,273 | 241,536 | ||||||||||||||||||||||
Felix G. Rohatyn | 15,000 | 15,000 | 10,500 | |||||||||||||||||||||||||
Yutaka Narita | 20,000 | 20,000 | 10,500 | |||||||||||||||||||||||||
Tateo Mataki(2) | 5,000 | 5,000 | ||||||||||||||||||||||||||
Fumio Oshima(4) | 10,000 | 10,000 | 10,500 | |||||||||||||||||||||||||
TOTAL | 9,223,861 | 3,274,625 | 5,514,815 | 355,000 | 79,421 | 16,072,950 | 3,414,397 |
(1) | Compensation defined and paid in dollars. The conversion into euros was made at an average rate of 1 $ = € 0,80461 in 2005 and 1 $ = € 0,88582 in 2004. |
(2) | Mr. Mataki was appointed to the supervisory board on September 9, 2004 to replace Mr. Oshima. |
(3) | Mr. Klues was appointed to the Management Board on January 1, 2005. |
(4) | Mr. Oshima’s term of office expired on September 9, 2004. |
(5) | Benefits in kind do not include the use of official car when it does not constitute material amounts. |
(6) | Amount comprised of bonuses related to the period of 2001 to 2003 (pursuant to agreements concluded during the acquisition of Saatchi & Saatchi). |
(7) | Retirement pay to Mr. Henri-Calixte Suaudeau (Director of the Real Estate Department until April 30, 2004). |
(8) | Variable compensation is subject to the Médias & Régies Europe results. |
(9) | Mr. Roger Haupt resigned from the management board effective as of December 31, 2004. His 2004 compensation includes a retirement indemnity. |
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Stock Options | Average | |||||||||||||||||||
Granted/ | Title of Stock | Price | Expiration | |||||||||||||||||
Purchased | Option (*) | (in euros) | Date | Plan | ||||||||||||||||
Stock options granted from January 1st to December 31, 2005 | ||||||||||||||||||||
Monsieur Maurice Lévy | — | |||||||||||||||||||
Monsieur Kevin Roberts | — | |||||||||||||||||||
Monsieur Bertrand Siguier | — | |||||||||||||||||||
Monsieur Jack Klues | — | |||||||||||||||||||
Madame Claudine Bienaimé | — | |||||||||||||||||||
Monsieur Robert L. Seelert | — | |||||||||||||||||||
Stock options exercised from January 1st to December 31, 2005 | ||||||||||||||||||||
Monsieur Maurice Lévy | — | |||||||||||||||||||
Monsieur Kevin Roberts | — | |||||||||||||||||||
Monsieur Bertrand Siguier | 18,690 | S | 7.09 | 2007/2008 | 7th/8th tranches** | |||||||||||||||
Monsieur Jack Klues | — | |||||||||||||||||||
Madame Claudine Bienaimé | — | |||||||||||||||||||
Monsieur Robert L. Seelert | — |
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2003 | 2004 | 2005 | ||||||||||
Europe | 13,732 | 14,151 | 14,412 | |||||||||
North America | 11,139 | 11,308 | 12,158 | |||||||||
Rest of World | 10,295 | 10,925 | 12,040 | |||||||||
Total | 35,166 | 36,384 | 38,610 |
2003 | 2004 | 2005 | ||||||||||
Commercial | 22% | 22% | 23% | |||||||||
Creative | 17% | 17% | 18% | |||||||||
Production and specialized activities | 15% | 15% | 15% | |||||||||
Media and research | 21% | 22% | 22% | |||||||||
Administration and Management | 17% | 17% | 16% | |||||||||
Other | 8% | 7% | 6% | |||||||||
Total | 100% | 100% | 100% |
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Options Held That | ||||||||||||||||||||||||
are Exercisable for | ||||||||||||||||||||||||
Existing Shares | ||||||||||||||||||||||||
Number | ||||||||||||||||||||||||
Voting Rights of | That are | Weighted | ||||||||||||||||||||||
Shares of Publicis | Publicis Groupe | Options Held for | Conditional | Average | ||||||||||||||||||||
Groupe Owned | Owned(1) | New Shares | Total Number | Options(2) | Price | |||||||||||||||||||
Management Board | ||||||||||||||||||||||||
Maurice Lévy(3) | 4,465,728 | 8,931,456 | 195,500 | 1,120,000 | 300,000 | 24.75 | ||||||||||||||||||
Claudine Bienaimé(4) | 62,815 | 125,630 | 15,500 | 61,000 | 51,000 | 22.40 | ||||||||||||||||||
Jack Klues(5) | — | — | 170,000 | 170,000 | 24.82 | |||||||||||||||||||
Kevin Roberts(6) | 44,000 | 88,000 | 200,000 | 200,000 | 24.82 | |||||||||||||||||||
Bertrand Siguier(7) | 105,000 | 210,000 | 6,000 | 115,000 | 75,000 | 25.40 | ||||||||||||||||||
Supervisory Board | ||||||||||||||||||||||||
Elisabeth Badinter | 6,799,320 | 13,598,640 | ||||||||||||||||||||||
Sophie Dulac | 2,469,460 | 4,938,920 | ||||||||||||||||||||||
Robert Badinter | 200 | 200 | ||||||||||||||||||||||
Michel David-Weill | 1,000 | 1,000 | ||||||||||||||||||||||
Henri-Calixte Suaudeau | 80,381 | 160,762 | ||||||||||||||||||||||
Monique Bercault | 840 | 1,680 | ||||||||||||||||||||||
Hélène Ploix | 8,950 | 13,850 | ||||||||||||||||||||||
Gérard Worms | 340 | 680 | ||||||||||||||||||||||
Amaury de Seze | 200 | 400 | ||||||||||||||||||||||
Simon Badinter | 350 | 700 | ||||||||||||||||||||||
Michel Cicurel | 200 | 200 | ||||||||||||||||||||||
Robert L. Seelert(8) | 200 | 200 | 100,000 | — | 43.55 | |||||||||||||||||||
Felix G. Rohatyn | 1,000 | 2,000 | ||||||||||||||||||||||
Yutaka Narita | 200 | 400 | ||||||||||||||||||||||
Tateo Mataki | 200 | 200 |
(1) | Reflects impact of double voting rights, as applicable. |
(2) | The exercise of these options is subject to meeting certain objectives over the course of a3-year plan “LTIP”(2003-2005). |
(3) | Options held in tranches 9, 11, 15, 16 and 19. |
(4) | Options held in tranches 7, 8, 9, 11, 13 and 17. |
(5) | Options held in tranche 17. |
(6) | Options held in tranche 19. |
(7) | Options held in tranche 9, 11, 13, 16 and 19. |
(8) | Options held in tranche 10. |
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Item 7. | Major Shareholders and Related Party Transactions |
Percentage of | Voting Rights | |||||||||||||||||||
Voting Rights | Reflecting the Double | |||||||||||||||||||
Not Reflecting the | Voting Rights(6) | |||||||||||||||||||
Percentage | Double Voting | |||||||||||||||||||
Held of | Rights of the | Number | Percentage | |||||||||||||||||
Shareholder | Shares Held | Total Shares(5) | Statuts(5) | of Shares | of Shares | |||||||||||||||
Elisabeth Badinter | 20,072,339 | (1) | 10.18 | %(1) | 10.18 | % | 40,144,678 | 17.20 | % | |||||||||||
Dentsu | 17,665,893 | (2) | 8.96 | %(2)(3) | 8.96 | % | 35,056,768 | 15.02 | %(3) | |||||||||||
SEP (Dentsu-Badinter)(4) | 11,024,983 | 5.59 | % | 5.59 | % | 11,024,984 | 4.72 | % |
(1) | Does not include shares held by Dentsu and the SEP with respect to which Ms. Badinter may be deemed to be the beneficial owner due to the contractual arrangements described in “Additional Information — Material Contracts — Elisabeth Badinter/ Dentsu Shareholders’ Agreement” in this annual report. Including such shares, Ms. Badinter would be deemed to beneficially own 48,763,215 shares, representing 24.73% of our total shares, 24.73% voting rights (not reflecting the double voting right) and 36.94% voting rights (reflecting the double voting rights). |
(2) | Does not include shares held by Ms. Badinter and the SEP with respect to which Dentsu may be deemed to be the beneficial owner due to the contractual arrangements described in “Additional Information — Material Contracts — Elisabeth Badinter/ Dentsu Shareholders’ Agreement” in this annual report. Including such shares, Dentsu would be deemed to beneficially own 48,763,215 shares, representing 24.73% of our total shares, 24.73% voting rights (not reflecting the double voting right) and 36.94% voting rights (reflecting the double voting rights). |
(3) | Pursuant to an agreement between our company and Dentsu, its voting rights are capped at 15% of our total voting power. |
(4) | This silent partnership was created in September 2004 by Dentsu and Ms. Badinter to implement the 15% limitation on Dentsu’s voting rights. For a description of the SEP, see “Additional Information — Material Contracts — Elisabeth Badinter/ Dentsu Shareholders’ Agreement” in this annual report. |
(5) | The percentages are calculated based on our total shares, including the 13,039,764 treasury shares. |
(6) | The percentages are calculated based on our total shares, including the 13,039,764 treasury shares and the double voting rights of other shares. |
Percentage of Total Shares(1) | ||||||||||||
Shareholder | 2003 | 2004 | 2005 | |||||||||
Elisabeth Badinter | 10.3 | %(2) | 10.3 | %(2) | 10.2 | %(2) | ||||||
Dentsu | 18.2 | %(3) | 9.2 | %(3) | 9 | %(3) | ||||||
SEP (Dentsu-Badinter) | — | 5.5 | % | 5.6 | % |
(1) | The percentages are calculated based on our total shares, including our treasury shares. |
(2) | Does not include shares held by Dentsu and the SEP with respect to which Ms. Badinter may be deemed to be the beneficial owner due to the contractual arrangements described in “Additional Information — Material Contracts — Elisabeth Badinter/ Dentsu Shareholders’ Agreement” in this annual report. |
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(3) | Does not include shares held by Ms. Badinter and the SEP with respect to which Dentsu may be deemed to be the beneficial owner due to the contractual arrangements described in “Additional Information — Material Contracts — Elisabeth Badinter/ Dentsu Shareholders’ Agreement” in this annual report. |
Increase in | ||||||||
Revenues with | Provision for | |||||||
Related Parties(1) | Doubtful Accounts | |||||||
(Millions of euros) | ||||||||
Dentsu | (27 | ) | — |
(1) | This is the difference between purchases and sales made by the Group with Dentsu. These transactions were carried out at market prices. The purchases and sales were not material for either party, either individually or taken as a whole. |
Payables to | ||||||||||||
Receivables on | Provisions for | Related | ||||||||||
Related Parties | Doubtful Accounts | Parties | ||||||||||
(Millions of euros) | ||||||||||||
Dentsu | 9 | — | 9 |
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Item 8. | Financial Information |
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Item 9. | The Offer and Listing |
Euronext Paris (€) | NYSE ($) | ||||||||||||||||
High | Low | High | Low | ||||||||||||||
Last Six Months | |||||||||||||||||
March, 2006 | 33.60 | 31.72 | 39.90 | 38.07 | |||||||||||||
February, 2006 | 32.36 | 31.03 | 38.52 | 37.18 | |||||||||||||
January, 2006 | 31.25 | 29.29 | 37.95 | 35.50 | |||||||||||||
December, 2005 | 30.19 | 28.48 | 35.54 | 33.76 | |||||||||||||
November, 2005 | 28.90 | 27.23 | 33.09 | 30.90 | |||||||||||||
October, 2005 | 27.72 | 25.70 | 33.09 | 30.90 | |||||||||||||
Last Quarter | |||||||||||||||||
2006 | |||||||||||||||||
First Quarter | 32.40 | 30.68 | 38.79 | 36.91 | |||||||||||||
Last Two Years By Quarter | |||||||||||||||||
2005 | |||||||||||||||||
Fourth Quarter | 28.93 | 27.13 | 33.90 | 31.85 | |||||||||||||
Third Quarter | 28.44 | 23.36 | 34.45 | 28.72 | |||||||||||||
Second Quarter | 25.10 | 21.43 | 31.32 | 27.86 | |||||||||||||
First Quarter | 24.65 | 22.72 | 33.38 | 29.76 | |||||||||||||
2004 | |||||||||||||||||
Fourth Quarter | 25.70 | 22.01 | 33.93 | 28.15 | |||||||||||||
Third Quarter | 24.75 | 20.25 | 29.78 | 24.98 | |||||||||||||
Second Quarter | 26.48 | 21.85 | 32.00 | 26.68 | |||||||||||||
First Quarter | 29.58 | 23.37 | 37.50 | 28.60 | |||||||||||||
Last Five Years | |||||||||||||||||
2005 | 28.93 | 21.43 | 34.45 | 27.86 | |||||||||||||
2004 | 29.58 | 20.25 | 37.50 | 24.98 | |||||||||||||
2003 | 29.35 | 13.83 | 32.75 | 15.47 | |||||||||||||
2002 | 39.90 | 16.70 | 34.95 | 16.70 | |||||||||||||
2001 | 39.27 | 15.83 | 36.88 | 14.75 |
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Item 10. | Additional Information |
• | produce and develop advertising; | |
• | organize shows and radio or television broadcasts, set up radio, television and other programs, use movie theaters, recording or broadcasting studios and projection and viewing rooms, publish documents and publish music, sketches, scripts and theater productions; and | |
• | carry out commercial, financial, industrial and real and movable property transactions directly or indirectly related to the above in order to foster our growth. |
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Dividends |
Voting Rights |
Liquidation Rights |
Preferential Subscription Rights |
Amendments to Rights of Holders |
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Ordinary and Extraordinary Meetings |
• | electing, replacing and removing members of the supervisory board; | |
• | appointing independent auditors; | |
• | declaring dividends or authorizing dividends to be paid in shares; | |
• | approving the company’s annual financial statements; and | |
• | issuing debt securities. |
• | changing our company’s name or corporate purpose; | |
• | increasing or decreasing our share capital; | |
• | creating a new class of equity securities; | |
• | authorizing the issuance of investment certificates or convertible or exchangeable securities; | |
• | establishing any other rights to equity securities; | |
• | selling or transferring substantially all of our assets; and | |
• | voluntarily liquidating our company. |
Calling Shareholders’ Meetings |
• | one or several shareholders holding at least 5% of our share capital; | |
• | in cases of urgency, designated employee representatives or any interested party; | |
• | duly qualified associations of shareholders who have held their shares in registered form for at least two years and who together hold at least 1% of the voting rights of our company; or | |
• | in a bankruptcy, our liquidator or court-appointed agent may also call a shareholders’ meeting in some instances. |
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Notice of Shareholders’ Meetings |
• | designated employee representatives; | |
• | one or several shareholders holding a specified percentage of shares; or | |
• | a duly qualified association of shareholders who have held their shares in registered form for at least two years and who together hold at least 1% of the voting rights in our company. |
Attendance and Voting at Shareholders’ Meetings |
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Proxies and Votes by Mail |
Quorum |
• | an ordinary general meeting; or | |
• | an extraordinary general meeting where an increase in our share capital is proposed through incorporation of reserves, profits or share premium. |
Majority |
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Limitations on Right to Own Securities |
Anti-Takeover Provisions |
Anti-Takeover Effects of Applicable Law and Regulations |
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• | limitations on the voting power of shareholders; and | |
• | shareholders’ agreements that provide for preemptive rights in case of a sale of shares by a shareholder. |
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• | the acquiring party’s intentions; and | |
• | the acquiring party’s ability to elect directors, and financial reliance by us on the acquiring party. |
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• | is not a French tax resident; | |
• | is a tax resident of the U.S. pursuant to Article 4 of the Convention Between the Government of the U.S. of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital (which was signed on August 31, 1994 and generally became effective on January 1, 1996) (the “Treaty”); | |
• | is a citizen or resident of the U.S. for U.S. federal income tax purposes, is a U.S. domestic corporation or is otherwise subject to U.S. federal income taxation on a net income basis in respect of our shares; and | |
• | does not hold our shares in connection with a permanent establishment or a fixed base in France pursuant to Article 5 of the Treaty through which the holder carries on a business or performs personal services. |
• | the holder owns, directly or indirectly, less than 10% of our share capital; | |
• | the holder is a U.S. Tax Resident; | |
• | the holder is entitled to the benefits of the Treaty under the “limitations on benefits” article of the Treaty (Article 30); | |
• | the ownership of our shares is not effectively connected with a permanent establishment or a fixed base in France; | |
• | the holder holds our shares as capital assets; and | |
• | the holder’s functional currency is the U.S. dollar. |
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Taxation of Dividends |
Withholding Tax |
(i) | our shares are beneficially owned by a U.S. Tax Resident, | |
(ii) | such ownership is not effectively connected with a permanent establishment or a fixed base that the holder has in France, and | |
(iii) | the holder has previously established that he or she is a U.S. Tax Resident in accordance with the following procedures: |
• | the U.S. Tax Resident must complete a simplified certificate before the date of payment of the dividend and send it before receiving such payment to the institution which holds the shares on its behalf. This certificate must state that the beneficial owner fulfills the following conditions: |
• | the holder is a U.S. Tax Resident; | |
• | the holder’s ownership of the shares is not effectively connected with a permanent establishment or a fixed base in France; | |
• | the holder owns all the rights attached to the full ownership of the shares including, among other things, the dividend rights; | |
• | the holder fulfills all the requirements under the Treaty to be entitled to the reduced rate of withholding tax, and | |
• | the holder claims the reduced rate of withholding tax. |
Other Entities |
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U.S. Federal Income Taxes |
• | first, as a tax-free return of capital, which will cause a reduction in the adjusted basis of your shares. This adjustment will increase the amount of gain, or decrease the amount of loss, that you will recognize if you later dispose of those shares; and | |
• | second, the balance of the dividend in excess of the adjusted basis will be taxed as capital gain. |
Taxation of Capital Gains |
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PFIC |
• | 75% or more of our gross income is passive income; or | |
• | our assets that produce passive income or that are held for the production of passive income amount to at least 50% of the value of our total assets on average. |
French Estate and Gift Taxes |
• | the individual holder is domiciled in France at the time of making the gift, or at the time of the individual holder’s death; or | |
• | the individual holder used our shares in conducting a business through a permanent establishment or fixed base in France, or the individual holder held our shares for that use. |
French Wealth Tax |
• | the individual holder does not own, alone or with related persons, directly or indirectly, shares, rights or interests the total of which gives right to at least 25% of our earnings; and | |
• | the shares are not held in connection with a permanent establishment or a fixed base in France. |
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U.S. Information Reporting and Backup Withholding |
• | to obtain jurisdiction over our company or our directors in courts in the U.S. in actions predicated on the civil liability provisions of the U.S. federal securities laws; | |
• | to enforce judgments obtained in such actions against us or our directors; | |
• | to obtain judgments against us or our directors in original actions innon-U.S. courts predicated solely upon the U.S. federal securities laws; or | |
• | to enforce against us or our directors innon-U.S. courts judgments of courts in the U.S. predicated upon the civil liability provisions of the U.S. federal securities laws. |
Item 11. | Quantitative and Qualitative Disclosures About Market Risk |
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Maturities | ||||||||||||||||||||||||||||
Total at | Between | Between | Between | Between | ||||||||||||||||||||||||
December 31, | Less than | 1 and | 2 and | 3 and | 4 and | More than | ||||||||||||||||||||||
2005 | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years | 5 Years | ||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||
Fixed rate: | ||||||||||||||||||||||||||||
Eurobond | 750 | — | — | — | — | — | 750 | |||||||||||||||||||||
OCEANEs (debt component) | 858 | 48 | — | 580 | — | — | 230 | |||||||||||||||||||||
ORANEs (debt component) | 36 | 3 | 4 | 3 | 3 | 3 | 20 | |||||||||||||||||||||
Other fixed rate debt | 7 | — | 7 | — | — | — | — | |||||||||||||||||||||
Debt related to finance leases | 112 | — | — | — | — | — | 112 | |||||||||||||||||||||
Total fixed rate | 1,763 | 51 | 11 | 583 | 3 | 3 | 1,112 | |||||||||||||||||||||
Variable rate: | ||||||||||||||||||||||||||||
Bank borrowings | 23 | 12 | 11 | — | — | — | — | |||||||||||||||||||||
Bank overdrafts | 95 | 95 | — | — | — | — | — | |||||||||||||||||||||
Cash and cash equivalents | (1,980 | ) | (1,980 | ) | — | — | — | — | — | |||||||||||||||||||
Total variable rate | (1,862 | ) | (1,873 | ) | 11 | — | — | — | — |
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2005 | ||||
Euro | 25 | % | ||
US Dollar | 42 | % | ||
Pound Sterling | 10 | % | ||
Other | 23 | % | ||
Total revenues | 100 | % |
• | 21 M€ on 2005 consolidated revenues | |
• | 4 M€ on 2005 consolidated operating income |
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I. | Intercompany Receivables and Payables |
Currency | Currency | Amount of Currency | Amount of Currency | Fair Value of the | ||||||||||
Sold | Purchased | Sold | Purchased | Hedge | ||||||||||
(Local currency, in | (Local currency, in | (Millions of | ||||||||||||
millions) | millions) | euros) | ||||||||||||
AUD | EUR | (27.5) | 17.0 | — | ||||||||||
AUD | USD | (54.0) | 40.2 | 0.6 | ||||||||||
CAD | USD | (1.3) | 1.1 | — | ||||||||||
DKK | EUR | (4.6) | 0.6 | — | ||||||||||
DKK | USD | (52.7) | 8.3 | — | ||||||||||
EUR | AUD | (4.5) | 7.3 | — | ||||||||||
EUR | CAD | (2.6) | 3.8 | 0.1 | ||||||||||
EUR | CHF | (21.3) | 32.7 | (0.1 | ) | |||||||||
EUR | GBP | (21.4) | 14.6 | (0.2 | ) | |||||||||
EUR | USD | (763.9) | 915.7 | 10.4 | ||||||||||
GBP | EUR | (8.1) | 11.9 | 0.1 | ||||||||||
GBP | USD | (0.1) | 0.2 | — | ||||||||||
HKD | EUR | (10.7) | 1.1 | (0.1 | ) | |||||||||
HUF | EUR | (181.8) | 0.7 | — | ||||||||||
JPY | EUR | (166.4) | 1.3 | 0.1 | ||||||||||
MYR | AUD | (0.4) | 0.1 | — | ||||||||||
MYR | EUR | (0.1) | — | — | ||||||||||
NOK | EUR | (41.7) | 5.3 | 0.1 | ||||||||||
NZD | EUR | (1.0) | 0.6 | — | ||||||||||
NZD | GBP | (21.6) | 8.8 | 0.3 | ||||||||||
SEK | EUR | (57.6) | 6.2 | — | ||||||||||
SEK | USD | (184.8) | 23.1 | (0.1 | ) | |||||||||
THB | EUR | (233.2) | 4.6 | (0.2 | ) | |||||||||
USD | AUD | (5.0) | 6.6 | (0.1 | ) | |||||||||
USD | CAD | (0.8) | 0.9 | — | ||||||||||
USD | EUR | (81.1) | 67.9 | (0.7 | ) | |||||||||
USD | GBP | (11.5) | 6.6 | (0.4 | ) | |||||||||
Total intercompany receivables and payables | 9.8 |
II. | Third Party Receivables and Payables |
Currency | Currency | Amount of Currency | Amount of Currency | Fair Value of the | ||||||||||
Sold | Purchased | Sold | Purchased | Hedge | ||||||||||
(Local currency, in | (Local currency, in | (Millions of | ||||||||||||
millions) | millions) | euros) | ||||||||||||
EUR | GBP | (8.4) | 5.8 | (0.1 | ) | |||||||||
EUR | USD | (1.0) | 1.2 | — | ||||||||||
GBP | EUR | (13.8) | 20.0 | (0.1 | ) | |||||||||
GBP | USD | (14.2) | 24.5 | — | ||||||||||
MYR | EUR | (1.3) | 0.3 | — | ||||||||||
MYR | GBP | (1.6) | 0.2 | — | ||||||||||
Total third party receivables and payables | (0.2 | ) |
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III. | Future Flows (Dividends and Interest Receivable, Firm Sales) |
Currency | Currency | Amount of Currency | Amount of Currency | Fair Value of the | ||||||||||
Sold | Purchased | Sold | Purchased | Hedge | ||||||||||
(Local currency, in | (Local currency, in | (Millions of | ||||||||||||
millions) | millions) | euros) | ||||||||||||
EUR | GBP | (0.4) | 0.3 | — | ||||||||||
EUR | USD | (0.4) | 0.5 | — | ||||||||||
GBP | USD | (0.3) | 0.5 | — | ||||||||||
USD | EUR | (18.1) | 15.4 | 0.1 | ||||||||||
USD | GBP | (3.4) | 2.0 | — | ||||||||||
USD | SEK | (0.5) | 3.7 | — | ||||||||||
Total future flows(1) | 0.1 |
(1) | On account of their immaterial impact, Publicis did not apply hedge accounting but instead recognized changes in the fair value of the derivatives through income. |
TOTAL I + II + III | 9.7 |
Treasury Stock | Other (IPG shares) | |||||||
Effect on balance sheet assets | n/a | (4 | ) | |||||
Effect on shareholders’ equity | — | (4 | ) | |||||
Effect on net income | — | — |
Item 12. | Description of Securities Other Than Equity Securities |
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Item 13. | Defaults, Dividend Arrearages and Delinquencies |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. | Controls and Procedures |
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Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
2005 | 2004 | |||||||||||||||
(€ millions) | (€ millions) | |||||||||||||||
Ernst & Young | Mazars & | Ernst & Young | Mazars & | |||||||||||||
Audit | Guérard | Audit | Guérard | |||||||||||||
Audit Fees | 5.8 | 3.6 | 6.0 | 4.5 | ||||||||||||
Audit Related Fees | 1.2 | 0.9 | 0.4 | 0.5 | ||||||||||||
Tax Fees | 0.4 | — | 0.1 | — | ||||||||||||
All Other Fees | — | — | — | — | ||||||||||||
Total Fees | 7.4 | 4.5 | 6.5 | 5.0 |
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Item 16D. | Exemptions from the Listing Standards for Audit Committees |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
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(c) | (d) | |||||||||||||||
(a) | (b) | Total Number of | Maximum Number | |||||||||||||
Total | Average | Shares Purchased as | of Shares that May Yet | |||||||||||||
Number of | Price Paid | Part of Publicly | Be Purchased Under | |||||||||||||
Shares | per Share | Announced Plans or | the Plans or | |||||||||||||
Purchased | (in euros) | Programs | Programs(1) | |||||||||||||
January 2005 (January 1 — January 31) | 45,300 | 24.35 | 45,300 | 6,077,294 | ||||||||||||
February 2005 (February 1 — February 28) | 297,000 | 23.72 | 297,000 | 6,202,794 | ||||||||||||
March 2005 (March 1 — March 31) | 235,010 | 24.03 | 235,010 | 6,248,075 | ||||||||||||
April 2005 (April 1 — April 30) | 214,452 | 23.36 | 214,452 | 6,151,585 | ||||||||||||
May 2005 (May 1 — May 31) | 100,600 | 23.31 | 100,600 | 6,483,085 | ||||||||||||
June 2005 (June 1 — June 30) | 188,889 | 24.6 | 188,889 | 6,458,085 | ||||||||||||
July 2005 (July 1 — July 31) | 152,500 | 27.95 | 152,500 | 6,489,560 | ||||||||||||
August 2005 (August 1 — August 31) | 63,000 | 27.38 | 63,000 | 6,475,330 | ||||||||||||
September 2005 (September 1 — September 30) | 196,050 | 26.9 | 196,050 | 6,457,062 | ||||||||||||
October 2005 (October 1 — October 31) | 271,954 | 26.91 | 271,954 | 6,702,062 | ||||||||||||
November 2005 (November 1 — November 30) | 254,515 | 28.74 | 254,515 | 6,687,962 | ||||||||||||
December 2005 (December 1 — December 31) | 200,236 | 29.43 | 200,236 | 6,672,137 |
(1) | Under French Law, we cannot hold, either directly or through a person acting on our behalf, more than 10% of our issued shares. The maximum number yet remaining for purchase therefore reflects this limitation, after taking into account shares bought and sold during the month in question. |
Item 17. | Financial Statements |
Item 18. | Financial Statements |
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/s/ Bruno Perrin | /s/ Isabelle Massa | |
Ernst & Young Audit | Mazars & Guérard, S.A. | |
Represented by Bruno Perrin | Represented by Isabelle Massa |
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/s/ Bruno Perrin | ||
Ernst & Young Audit Represented by Bruno Perrin |
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Notes | 2005 | 2004 | ||||||||||
(Millions of euros) | ||||||||||||
Revenues | 4,127 | 3,832 | ||||||||||
Personnel expenses | 3 | (2,454 | ) | (2,271 | ) | |||||||
Other operating expenses | 4 | (908 | ) | (862 | ) | |||||||
Operating margin before depreciation and amortization | 765 | 699 | ||||||||||
Depreciation and amortization expense (excluding intangibles arising on acquisition) | 5 | (116 | ) | (119 | ) | |||||||
Operating margin | 649 | 580 | ||||||||||
Amortization of intangibles arising on acquisition | 5 | (23 | ) | (29 | ) | |||||||
Impairment | 5 | (33 | ) | (215 | ) | |||||||
Non-current income (expense) | 6 | 59 | (10 | ) | ||||||||
Operating income | 652 | 326 | ||||||||||
Cost of net financial debt | 7 | (78 | ) | (108 | ) | |||||||
Other financial income (expense) | 7 | (14 | ) | (6 | ) | |||||||
Income of consolidated companies before taxes | 560 | 212 | ||||||||||
Income taxes | 8 | (157 | ) | (112 | ) | |||||||
Net change in deferred taxes related to the OBSA/ CLN transactions and deferred tax assets related to the conversion to IFRS | — | 198 | ||||||||||
Net income of consolidated companies | 403 | 298 | ||||||||||
Equity in net income of non-consolidated companies | 13 | 11 | 6 | |||||||||
Net income | 414 | 304 | ||||||||||
Net income attributable to minority interests | 28 | 26 | ||||||||||
Net income attributable to equity holders of the parent | 386 | 278 | ||||||||||
Per share data(in euros) | 9 | |||||||||||
Number of shares | 210,415,990 | 210,535,541 | ||||||||||
Net earnings per share | 1.83 | 1.32 | ||||||||||
Number of shares — diluted | 233,816,994 | 233,984,337 | ||||||||||
Net earnings per share — diluted | 1.76 | 1.29 |
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Notes | 2005 | 2004 | ||||||||||
(Millions of euros) | ||||||||||||
ASSETS | ||||||||||||
Goodwill, net, | 10 | 2,883 | 2,623 | |||||||||
Intangible assets, net | 11 | 763 | 740 | |||||||||
Property and equipment, net | 12 | 580 | 609 | |||||||||
Deferred tax assets | 8 | 216 | 368 | |||||||||
Investments accounted for by the equity method | 13 | 33 | 17 | |||||||||
Other financial assets | 14 | 118 | 143 | |||||||||
Non-current assets | 4,593 | 4,500 | ||||||||||
Inventory and costs billable to clients | 15 | 580 | 437 | |||||||||
Accounts receivable | 16 | 4,014 | 3,282 | |||||||||
Other receivables and other current assets | 17 | 577 | 450 | |||||||||
Cash and cash equivalents | 18 | 1,980 | 1,186 | |||||||||
Current assets | 7,151 | 5,355 | ||||||||||
Total assets | 11,744 | 9,855 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Capital stock | 79 | 78 | ||||||||||
Additional paid-in capital and retained earnings | 2,006 | 1,551 | ||||||||||
Shareholders’ equity | 19 | 2,085 | 1,629 | |||||||||
Minority interests | 20 | 31 | ||||||||||
Total equity | 2,105 | 1,660 | ||||||||||
Long-term financial debt (more than 1 year) | 22 | 1,913 | 1,492 | |||||||||
Deferred tax liabilities | 8 | 220 | 365 | |||||||||
Long-term provisions | 20 | 539 | 537 | |||||||||
Non-current liabilities | 2,672 | 2,394 | ||||||||||
Accounts payable | 4,605 | 3,694 | ||||||||||
Short-term financial debt (less than 1 year) | 22 | 224 | 273 | |||||||||
Income taxes payable | 263 | 206 | ||||||||||
Short-term provisions | 20 | 120 | 106 | |||||||||
Other creditors and other current liabilities | 23 | 1,755 | 1,522 | |||||||||
Current liabilities | 6,967 | 5,801 | ||||||||||
Total liabilities and shareholders’ equity | 11,744 | 9,855 | ||||||||||
Net financial debt | 22 | 207 | 618 |
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2005 | 2004 | |||||||
(Millions of euros) | ||||||||
I — Cash flows from operating activities | ||||||||
Net income | 414 | 304 | ||||||
Income taxes | 157 | (86 | ) | |||||
Cost of net financial debt | 78 | 108 | ||||||
Capital (gains) losses on disposal (before tax) | (58 | ) | 10 | |||||
Depreciation, amortization and impairment on property and equipment and intangible assets | 172 | 363 | ||||||
Non-cash expenses on stock options and similar items | 20 | 20 | ||||||
Other non-cash income and expenses | 11 | 13 | ||||||
Equity in net income of unconsolidated companies | (11 | ) | (6 | ) | ||||
Dividends received from equity accounted investments | 9 | 7 | ||||||
Restructuring expenditure | (30 | ) | (79 | ) | ||||
Taxes paid | (167 | ) | (114 | ) | ||||
Interest paid | (93 | ) | (73 | ) | ||||
Interest received | 44 | 46 | ||||||
Change in working capital requirements(1) | 74 | 264 | ||||||
Net cash provided by operating activities | 620 | 777 | ||||||
II — Cash flows from investing activities | ||||||||
Purchases of property and equipment and intangible assets | (83 | ) | (104 | ) | ||||
Proceeds from sale of property and equipment and intangible assets | 8 | 3 | ||||||
Proceeds from sale of investments and other financial assets, net | 7 | 468 | ||||||
Acquisitions of subsidiaries | (71 | ) | (124 | ) | ||||
Disposals of subsidiaries | 98 | — | ||||||
Net cash flows provided by (used in) investing activities | (41 | ) | 243 | |||||
III — Cash flows from financing activities | ||||||||
Dividends paid to parent company shareholders | (55 | ) | (47 | ) | ||||
Dividends paid to minority shareholders of subsidiaries | (19 | ) | (23 | ) | ||||
Cash received on new borrowings | 747 | 455 | ||||||
Reimbursement of borrowings | (460 | ) | (1,307 | ) | ||||
Net purchases of treasury stock and equity warrants | 7 | (9 | ) | |||||
Net cash flows provided by (used in) financing activities | 220 | (931 | ) | |||||
IV — Impact of exchange rate fluctuations | 72 | (39 | ) | |||||
Net change in consolidated cash flows (I + II + III + IV) | 871 | 50 | ||||||
Cash and cash equivalents at January 1 | 1,186 | 1,415 | ||||||
Bank overdrafts at January 1 | (172 | ) | (451 | ) | ||||
Net cash and cash equivalents at beginning of year | 1,014 | 964 | ||||||
Cash and cash equivalents at December 31 | 1,980 | 1,186 | ||||||
Bank overdrafts at December 31 | (95 | ) | (172 | ) | ||||
Net cash and cash equivalents at end of year | 1,885 | 1,014 | ||||||
Net change in cash and cash equivalents | 871 | 50 |
(1) | Breakdown of change in working capital requirements |
Change in inventory and costs billable to clients | (97 | ) | (47 | ) | ||||
Change in accounts receivable and other receivables | (391 | ) | 76 | |||||
Change in accounts payable, other creditors and provisions | 562 | 235 | ||||||
Change in working capital requirements | 74 | 264 |
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Gains and | ||||||||||||||||||||||||||||||
Reserves | Losses | |||||||||||||||||||||||||||||
Additional | and | Recognized | ||||||||||||||||||||||||||||
Number of | Capital | Paid-In | Retained | Through | Shareholders’ | Minority | Total | |||||||||||||||||||||||
Shares | Stock | Capital | Earnings | Equity | Equity | Interests | Equity | |||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||||
195,378,253 | January 1, 2004 before deduction of treasury stock | 78 | 2,557 | (968 | ) | 154 | 1,821 | 28 | 1,849 | |||||||||||||||||||||
(13,012,389) | Deduction of treasury stock existing at January 1(a) | (323 | ) | (323 | ) | (323 | ) | |||||||||||||||||||||||
182,365,864 | January 1, 2004 after deduction of treasury stock | 78 | 2,557 | (1,291 | ) | 154 | 1,498 | 28 | 1,526 | |||||||||||||||||||||
Change in value of available for sale investments(1) | (9 | ) | (9 | ) | (9 | ) | ||||||||||||||||||||||||
Change in cumulative translation adjustment | (107 | ) | (107 | ) | (1 | ) | (108 | ) | ||||||||||||||||||||||
Gains and losses recognized through equity | — | — | — | (116 | ) | (116 | ) | (1 | ) | (117 | ) | |||||||||||||||||||
Net income for the year | 278 | 278 | 26 | 304 | ||||||||||||||||||||||||||
Total recognized income and expenses for the year | - | — | 278 | (116 | ) | 162 | 25 | 187 | ||||||||||||||||||||||
92,808 | Increase in capital stock of Publicis Groupe SA | — | — | — | — | — | — | — | ||||||||||||||||||||||
Dividends paid | (20 | ) | (27 | ) | (47 | ) | (23 | ) | (70 | ) | ||||||||||||||||||||
Share-based compensation | 20 | 20 | 20 | |||||||||||||||||||||||||||
Effect of acquisitions and of commitments to purchase minority interests | 1 | 1 | ||||||||||||||||||||||||||||
Reversal of Saatchi & Saatchi provisions | 2 | 2 | 2 | |||||||||||||||||||||||||||
Reversal of Italian Bond provisions | 3 | 3 | 3 | |||||||||||||||||||||||||||
195,471,061 | December 31, 2004 before deduction of treasury stock | 78 | 2,537 | (692 | ) | 38 | 1,961 | 31 | 1,992 | |||||||||||||||||||||
(367,000) | Purchases/sales of treasury stock(b) | (9 | ) | (9 | ) | (9 | ) | |||||||||||||||||||||||
(13,382,843) | Deduction of treasury stock existing at December 31, 2004(c=a+b) | (332 | ) | (332 | ) | (332 | ) | |||||||||||||||||||||||
182,088,218 | December 31, 2004 after deduction of treasury stock | 78 | 2,537 | (1,024 | ) | 38 | 1,629 | 31 | 1,660 | |||||||||||||||||||||
Change in value of available for sale investments(1) | (16 | ) | (16 | ) | (16 | ) | ||||||||||||||||||||||||
Hedge on net investment | 9 | 9 | 9 | |||||||||||||||||||||||||||
Change in cumulative translation adjustment | 116 | 116 | 5 | 121 | ||||||||||||||||||||||||||
Gains and losses recognized through equity | 109 | 109 | 5 | 114 | ||||||||||||||||||||||||||
Net income for the year | 386 | 386 | 28 | 414 | ||||||||||||||||||||||||||
Total recognized income and expenses for the year | 386 | 109 | 495 | 33 | 528 | |||||||||||||||||||||||||
1,637,949 | Increase in capital stock of Publicis Groupe SA | 1 | 47 | (48 | ) | — | — | |||||||||||||||||||||||
Dividends paid | (55 | ) | (55 | ) | (19 | ) | (74 | ) | ||||||||||||||||||||||
Share-based compensation | 20 | 20 | 20 | |||||||||||||||||||||||||||
Buyback of equity warrants (BSA) | (2 | ) | (2 | ) | (2 | ) | ||||||||||||||||||||||||
Additional interest on Oranes | (2 | ) | (2 | ) | (2 | ) | ||||||||||||||||||||||||
Partial early redemption of the 2018 Oceane (equity component) | (9 | ) | (9 | ) | (9 | ) | ||||||||||||||||||||||||
Effect of acquisitions and of commitments to purchase minority interests | (25 | ) | (25 | ) | ||||||||||||||||||||||||||
197,109,010 | December 31, 2005 before deduction of treasury stock | 79 | 2,584 | (402 | ) | 147 | 2,408 | 20 | 2,428 | |||||||||||||||||||||
343,079 | Purchases/sales of treasury stock(d) | 9 | 9 | 9 | ||||||||||||||||||||||||||
(13,039,764) | Deduction of treasury stock existing at December 31, 2005(e=c+d) | (323 | ) | (323 | ) | (323 | ) | |||||||||||||||||||||||
184,069,246 | December 31, 2005 after deduction of treasury stock | 79 | 2,584 | (725 | ) | 147 | 2,085 | 20 | 2,105 |
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December 31, 2005 | December 31, 2004 | |||||||
(Millions of Euros) | ||||||||
Revaluation of property | 105 | 105 | ||||||
Revaluation of available for sale investments | 24 | 40 | ||||||
Hedge on net investment | 9 | — | ||||||
Cumulative translation adjustment | 9 | (107 | ) | |||||
Total gains and losses recognized through equity | 147 | 38 |
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1. | Accounting Policies |
1.1. | Consolidation Principles and Policies |
Reporting Currency |
Investments in Subsidiaries |
Investments in Associates |
Transactions in Foreign Currencies |
F-8
Table of Contents
Translation of Financial Statements Denominated in Foreign Currencies |
• | Assets and liabilities are translated at year-end exchange rates; | |
• | Income statement items are translated at average exchange rates for the year; | |
• | Translation gains and losses resulting from the application of these rates are recognized in “Gains and losses recognized through equity — change in cumulative translation adjustment” for the Group share with the remainder being recorded in minority interests in the balance sheet. |
Elimination of Intercompany Transactions |
Research and Study Costs |
Goodwill |
F-9
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Intangible Assets |
• | They are identifiable, i.e., they result from legal or contractual rights, or | |
• | They are separable from the acquired entity. |
Property and Equipment |
• | Buildings: 20 to 70 years. | |
• | Fixtures, fittings and general installations: 10 years. | |
• | Office furniture and equipment: 5 to 10 years. | |
• | Vehicles: 4 years. | |
• | Computer hardware: 2 to 4 years. |
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Table of Contents
Leases |
Investments |
Loans and Advances to Equity Accounted and Non-Consolidated Companies |
Inventory and Costs Billable to Clients |
F-11
Table of Contents
Accounts Receivable |
Derivatives |
• | Fair value hedges, which are used to hedge against changes in the fair value of a recognized asset or liability, | |
• | Cash flow hedges, which are used to hedge against exposure to changes in future cash flows, and | |
• | Hedges of net investments. |
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Cash and Cash Equivalents |
Treasury Stock |
Bonds |
• | Bonds reimbursable in cash: |
The bonds are initially recognized at their fair value, which corresponds to the amount of cash received, net of issue costs. | |
Subsequent to initial recognition, bonds are recognized at amortized cost, using the effective interest rate method, which takes account of all issue costs and any redemption premium or discount. |
• | Bonds with conversion options and bonds reimbursable in shares: |
In the case of bonds convertible into shares (OCEANEs), bonds reimbursable in shares (ORANEs) and bonds with detachable equity warrants (OBSAs), the debt component and the equity component are separately recognized as of the date of initial recognition. The fair value of the debt component on issue is determined by discounting the future contractual cash flows using the market interest rate that would have been applicable if the company had issued a bond with the same conditions but without a conversion option. | |
The value of the equity component is determined at the date of issue as the difference between the fair value of the debt component and the fair value of the entire bond. The value of the conversion option is not revised during subsequent financial years. | |
Issue costs are allocated between the debt component and the equity component on the basis of their respective carrying amounts at the date of issue. | |
The debt component is subsequently measured on an amortized cost basis. |
Buyout Commitments to Minority Shareholders |
• | On initial recognition, these commitments are recognized in financial debt at the discounted value of the purchase commitment, with the double entry being booked to minority interests and, for the balance, to goodwill, | |
• | Subsequent changes in the value of the commitment are recognized by adjusting the amount of goodwill, |
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• | On expiration of the commitment, if the purchase does not take place, the entries previously recognized are reversed; if the purchase is completed, the amount recognized in financial debt is reversed against the cash outflow related to the purchase of the minority shareholding. |
Provisions |
• | The Group has a current obligation (legal or constructive) resulting from a past event, | |
• | It is probable that an outflow of resources embodying economic benefits will be necessary to extinguish the obligation, and, | |
• | The amount of the obligation can be estimated reliably. |
• | Provisions for litigation and claims |
The Group recognizes a provision in each case where a risk related to litigation or a claim of any type (commercial, regulatory, tax or employee related) is identified, where it is probable that an outflow of resources will be necessary to extinguish this risk and where a reliable estimate of costs to be incurred can be made. In such cases, the amount of the provision (including any related penalties) is determined by the agencies and their experts, under the supervision of the Group’s head office teams, on the basis of their best estimate of the probable costs related to the litigation or the claim. |
• | Provisions for restructuring |
Restructuring costs are fully provided for in the period in which the decision to implement the restructuring plan is made and announced. | |
In the context of an acquisition, restructuring plans which do not constitute liabilities for the acquired enterprise at the date of acquisition are recognized as expenses. | |
These costs consist primarily of severance and early retirement payments, other employment expenses, and, in some cases, of write-downs of property and equipment and other assets. |
• | Vacant property provisions |
A provision is recognized for the amount of rent and related expenses to be paid — net of any sublease revenues to be received — for all buildings that are sublet or vacant and are not intended to be used in the context of the Group’s principal activities. | |
In the context of acquisitions, provisions are also recorded when the acquired company has property rental contracts with less favorable terms than those prevailing in the market at the acquisition date. |
• | Pensions and other post-employment benefits |
The Group recognizes commitments related to pensions and other post-employment benefits in accordance with the type of plan in question: |
• | Defined contribution plans: the amount of Group contributions paid to the plan is recognized as an expense of the period; |
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• | Defined benefit plans: the cost of defined benefits is separately determined for each plan using the projected unit cost actuarial method. Actuarial gains and losses are recognized in income or expense when cumulative non-recognized actuarial gains and losses for a given scheme exceed 10% of the greater of the amount of the defined benefit commitment obligation or the fair value of plan assets. These gains and losses are recognized over the expected average residual working life of the employees covered by the plans. |
The effect of unwinding the discount on employee benefit commitments, net of the expected return on plan assets is recognized in “Other financial income (expense)”. |
Accounts Payable |
Revenues |
• | For commission based customer arrangements (excluding production): |
• | advertising creation: recognition at date of publication or broadcast, | |
• | media space buying services: recognition at date of publication or broadcast; |
• | For other customer arrangements (project based arrangements, fixed fee arrangements, time-based arrangements, etc.): |
Revenue is recognized in the accounting period in which the service is rendered. Revenues under fixed fee arrangements are recognized on a straight-line basis which reflects the nature and the scope of services rendered. Revenues under time-based arrangements are recognized on the basis of work performed. |
• | Fees based on performance criteria: |
Revenue is recognized when the performance criteria have been met and the customer has confirmed its agreement. |
Publicis Stock Options |
Non-Current Income (Expense) |
F-15
Table of Contents
Cost of Net Financial Debt and Other Financial Income (Expense) |
Income Taxes |
Earnings per Share and Diluted Earnings per Share |
F-16
Table of Contents
• | The “Impairment” and “Amortization of intangibles arising on acquisition” captions, and | |
• | Certain specifically designated unusual income and expenses (recorded under the “Non-current income (expense)” caption). |
1.3 | Principle Sources of Uncertainty Arising from Use of Estimates |
• | Provisions | |
• | Impairment of goodwill and intangible assets | |
• | Measurement at fair value of the options granted under Publicis Groupe S.A.’s stock option plans |
1.4 | Impact of IFRS Standards and IFRIC Interpretations Which are Published but Not Yet in Force |
2. | Changes in the Scope of Consolidation |
• | In September 2005, the Group acquired 50.01% of Freud Communications, the principal independent Public Relations company in the United Kingdom, | |
• | In November 2005, the Group acquired 70% of the Eventive group, which is market leader in the events business in Austria and a major player in both Germany and Switzerland. |
2.2 | Disposals in the Year |
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3. | Personnel Expenses and Headcount |
2005 | 2004 | |||||||
(Millions of | ||||||||
euros) | ||||||||
Remuneration | 1,964 | 1,822 | ||||||
Social security expenses | 316 | 287 | ||||||
Post-employment benefits | 63 | 59 | ||||||
Stock-option expense | 20 | 20 | ||||||
Temporaries and freelances | 91 | 83 | ||||||
Total | 2,454 | 2,271 |
Breakdown of Headcount |
By Geographical Area: |
2005 | 2004 | |||||||
Europe | 14,412 | 14,151 | ||||||
North America | 12,158 | 11,308 | ||||||
Rest of the world | 12,040 | 10,925 | ||||||
Total | 38,610 | 36,384 |
By Function (in %): |
2005 | 2004 | |||||||
Commercial | 23% | 22% | ||||||
Creative | 18% | 17% | ||||||
Production and specialized activities | 15% | 15% | ||||||
Media and research | 22% | 22% | ||||||
Administration and Management | 16% | 17% | ||||||
Other | 6% | 7% | ||||||
Total | 100% | 100% |
4. | Other Operating Expenses |
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5. | Depreciation, Amortization and Impairment |
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Amortization expense on other intangible assets (excluding intangibles arising on acquisition) | (19 | ) | (10 | ) | ||||
Depreciation of property and equipment | (97 | ) | (109 | ) | ||||
Depreciation and amortization expense (excluding intangibles arising on acquisition) | (116 | ) | (119 | ) | ||||
Amortization of intangibles arising on acquisition | (23 | ) | (29 | ) | ||||
Impairment of intangibles arising on acquisition | (11 | ) | (123 | ) | ||||
Impairment of goodwill | (6 | ) | (92 | ) | ||||
Impairment of property and equipment | (16 | ) | — | |||||
Impairment | (33 | ) | (215 | ) | ||||
Total depreciation, amortization and impairment | (172 | ) | (363 | ) |
Impairment of Intangibles Arising on Acquisition |
Impairment of Goodwill |
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• | Discounting of future cash flows at a pre-tax rate of 8.5% after tax (12% before tax), | |
• | Growth of revenues over the period 2006-2010 in line with the average expected growth of the creative agency networks, | |
• | A terminal growth rate of 3%, | |
• | Constant levels of margins over the period of the business plan and beyond. |
Impairment of Property and Equipment |
6. | Non-current Income (Expense) |
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Capital gains (losses) on disposal of assets(1) | 80 | (2 | ) | |||||
Capital gains (losses) on redemption of financing instruments(2) | (22 | ) | (7 | ) | ||||
Other non-current income (expense) | 1 | (1 | ) | |||||
Non-current income (expense) | 59 | (10 | ) |
(1) | In 2005, this is mainly comprised of the capital gain on the sale of shareholdings in JC Decaux Netherlands, VKM, and SOPACT, as well as 33% of Metrobus. |
(2) | In 2005, this represents the capital loss on redemption of 62.36% of the Oceane 2018. In 2004, it represents the capital loss on the redemption of the bond component of the OBSA and the sale of the CLN. |
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7. | Net Financial Costs |
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Interest expense on loans and bank overdrafts | (114 | ) | (144 | ) | ||||
Interest expense on finance lease obligations | (10 | ) | (10 | ) | ||||
Interest income | 46 | 46 | ||||||
Cost of net financial debt | (78 | ) | (108 | ) | ||||
Foreign exchange gains (losses) | (51 | ) | 29 | |||||
Change in the fair value of derivatives | 47 | (23 | ) | |||||
Financial expense related to unwinding of discount on long-term vacant property provisions (at a rate of 5%) | (7 | ) | (8 | ) | ||||
Net financial expense related to unwinding of discount on pension provisions | (4 | ) | (5 | ) | ||||
Dividends received from unconsolidated companies | 1 | 1 | ||||||
Other financial income (expense) | (14 | ) | (6 | ) | ||||
Net financial costs | (92 | ) | (114 | ) |
8. | Income Taxes |
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Current tax expense | (233 | ) | (180 | ) | ||||
Tax loss carryforwards and tax credits which reduced current tax expense but were not recognized in assets in prior periods | 43 | 35 | ||||||
Total current tax expense | (190 | ) | (145 | ) | ||||
Net deferred tax expense related to the creation and reversal of temporary differences | 33 | 33 | ||||||
Changes in provisions against deferred tax assets and recognition of deferred tax assets(1) | — | — | ||||||
Total deferred tax income (expense) | 33 | 33 | ||||||
Income taxes | (157 | ) | (112 | ) |
(1) | Excluding, in 2004, 57 M€ of recognition of deferred tax assets related to conversion to IFRS which are included under the “Net change in deferred taxes related to the OBSA/ CLN transactions and deferred tax assets related to the conversion to IFRS” caption in the Income Statement . |
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2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Income of consolidated companies before taxes | 560 | 212 | ||||||
Capital gain on disposals of JC Decaux Netherlands, VKM, SOPACT and 33% of Metrobus | (87 | ) | — | |||||
Capital loss on the redemption of the debt component of the OBSA and the sale of the CLN | — | 7 | ||||||
Goodwill impairment, excluding impairment arising from the use of tax losses which were not recognized at the time of acquisition of Bcom3 | 1 | 88 | ||||||
Impairment of property and equipment | 16 | — | ||||||
Income before non-current gains and losses | 490 | 307 | ||||||
French tax rate | 33,83 | % | 34,33 | % | ||||
Expected tax expense: | (166 | ) | (105 | ) | ||||
Effect of: | ||||||||
— Differences in income tax rates | (4 | ) | (4 | ) | ||||
— Income taxed at reduced rates | — | — | ||||||
— Use of prior tax losses and recognition of deferred tax assets in respect of prior year losses(1) | 43 | 35 | ||||||
— Losses in year for which no deferred tax asset was recognized and provisions against deferred tax assets | (22 | ) | (12 | ) | ||||
— Permanent differences | (8 | ) | (26 | ) | ||||
Income taxes per the income statement(2): | (157 | ) | (112 | ) | ||||
Effective tax rate | 32,0 | % | 36,5 | % |
(1) | Excluding, in 2004, 57 M€ of recognition of deferred tax assets related to conversion to IFRS which are included under the “Net change in deferred taxes related to the OBSA/ CLN transactions and deferred tax assets related to the conversion to IFRS” caption in the Income Statement. |
(2) | Excluding net change in deferred taxes related to the OBSA/ CLN transactions and deferred tax assets related to the conversion to IFRS. |
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2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Short-term | 70 | 98 | ||||||
Long-term | 354 | 327 | ||||||
Effect of offset of deferred tax assets and liabilities by tax group(1) | (208 | ) | (57 | ) | ||||
Total deferred tax assets | 216 | 368 | ||||||
Short-term | (31 | ) | (36 | ) | ||||
Long-term | (397 | ) | (386 | ) | ||||
Effect of offset of deferred tax assets and liabilities by tax group(1) | 208 | 57 | ||||||
Total deferred tax liabilities | (220 | ) | (365 | ) | ||||
Deferred tax assets (liabilities), net | (4 | ) | 3 |
(1) | Offset in 2005 takes account of the creation of a single tax group during the year in the United States. |
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Deferred tax assets arising on temporary differences (excluding Bcom3) | 235 | 223 | ||||||
Deferred tax assets on hybrid bonds | 13 | 15 | ||||||
Deferred tax assets on restructuring and vacant property commitments related to the Bcom3 acquisition | 104 | 116 | ||||||
Deferred tax assets arising on tax loss carryforwards | 72 | 71 | ||||||
Effect of offset of deferred tax assets and liabilities by tax groups | (208 | ) | (57 | ) | ||||
Total deferred tax assets | 216 | 368 | ||||||
Deferred tax liabilities related arising on temporary differences (excluding hybrid bonds) | (61 | ) | (31 | ) | ||||
Deferred tax liabilities on hybrid bonds | (31 | ) | (54 | ) | ||||
Deferred tax liabilities attributable to adjustment of assets and liabilities at fair value on acquisition | (282 | ) | (283 | ) | ||||
Deferred tax liability arising on the Champs Elysées building being restated at fair value (as deemed cost) | (54 | ) | (54 | ) | ||||
Effect of offset of deferred tax assets and liabilities by tax groups | 208 | 57 | ||||||
Total deferred tax liabilities | (220 | ) | (365 | ) | ||||
Deferred tax assets (liabilities), net | (4 | ) | 3 |
F-23
Table of Contents
9. | Earnings per Share and Diluted Earnings per Share |
2005 | 2004 | |||||||||||
Net income used for the calculation of earnings per share(in millions of euros) | ||||||||||||
Net income attributable to equity holders of the parent | a | 386 | 278 | |||||||||
Impact of dilutive instruments: | ||||||||||||
— Savings in financial expenses related to the conversion of debt instruments, net of tax(1) | 25 | 23 | ||||||||||
Net income attributable to equity holders of the parent — diluted | b | 411 | 301 | |||||||||
Number of shares used for the calculation of earnings per share | ||||||||||||
Average number of shares in circulation | 182,818,378 | 182,410,541 | ||||||||||
Shares to be issued to redeem the ORANEs | 27,597,612 | 28,125,000 | ||||||||||
Average number of shares used for the calculation | c | 210,415,990 | 210,535,541 | |||||||||
Impact of dilutive instruments:(2) | ||||||||||||
— Effect of exercise of dilutive stock options | 228,591 | 276,383 | ||||||||||
— Shares resulting from the conversion of the convertible bonds(1) | 23,172,413 | 23,172,413 | ||||||||||
Number of shares — diluted | d | 233,816,994 | 233,984,337 | |||||||||
(in euros) | ||||||||||||
Earnings per share | a/c | 1.83 | 1.32 | |||||||||
Earnings per share — diluted | b/d | 1.76 | 1.29 |
(1) | Only the 2008 OCEANEs are taken into account for the calculation of earnings per share as the 2018 OCEANEs have an anti-dilutive effect on EPS. |
(2) | Equity warrants and stock options whose exercise price is greater than the average share price for 2005, as well as the 2018 OCEANEs, are not taken into account in the calculation of diluted earnings per share because of their anti-dilutive nature. |
F-24
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2005 | 2004 | |||||||||||
Net income used for the calculation of Headline earnings per share(1) (in millions of euros) | ||||||||||||
Net income attributable to equity holders of the parent | 386 | 278 | ||||||||||
Items excluded: | ||||||||||||
— Amortization of intangibles arising on acquisition, net of tax | 14 | 18 | ||||||||||
— Impairment, net of tax | 24 | 164 | ||||||||||
— Capital gains, net of tax, on the sale of JC Decaux Netherlands, VKM, SOPACT and 33% of Metrobus, net of tax | (87 | ) | — | |||||||||
— Capital loss on the redemption of the Oceane, net of tax | 16 | — | ||||||||||
— Capital gains on the OBSA/ CLN transactions, net of tax | — | (134 | ) | |||||||||
— Deferred tax assets related to conversion to IFRS | — | (57 | ) | |||||||||
Adjusted net income attributable to equity holders of the parent | e | 353 | 269 | |||||||||
Impact of dilutive instruments: | ||||||||||||
— Savings in financial expenses related to the conversion of debt instruments, net of tax | 25 | 23 | ||||||||||
Adjusted net income attributable to equity holders of the parent — diluted | f | 378 | 292 | |||||||||
Number of shares used for the calculation of earnings per share Average number of shares in circulation | 182,818,378 | 182,410,541 | ||||||||||
Shares to be issued to redeem the ORANEs | 27,597,612 | 28,125,000 | ||||||||||
Average number of shares used for the calculation | c | 210,415,990 | 210,535,541 | |||||||||
Impact of dilutive instruments: | ||||||||||||
— Effect of exercise of dilutive stock options | 228,591 | 276,383 | ||||||||||
— Shares resulting from the conversion of convertible bonds | 23,172,413 | 23,172,413 | ||||||||||
Number of shares — diluted | d | 233,816,994 | 233,984,337 | |||||||||
(en euros) | ||||||||||||
Headline earnings per share(1) | e/c | 1.68 | 1.28 | |||||||||
Headline earnings per share(1) — diluted | f/d | 1.62 | 1.25 |
(1) | Earnings per share before amortization of intangibles arising on acquisition, impairment, capital gain (loss) on the disposals of JC Decaux Netherlands, VKM, SOPACT and 33% of Metrobus, the OBSA/ CLN transactions (net of tax) and the recognition of deferred tax assets related to conversion to IFRS. |
• | Exercise of the put on the Oceane 2018 in January 2006: 1,149,587 Oceanes were redeemed, thus eliminating an equivalent number of potential shares. | |
• | Public equity warrant buyback offer initiated on January 13, 2006: the offer resulted in the buyback of 22,107,049 equity warrants, leading to the elimination of an equivalent number of potential shares. |
10. | Goodwill |
F-25
Table of Contents
Europe | North America | Rest of the World | Total | ||||||||||||||
(Millions of euros) | |||||||||||||||||
Net value at December 31, 2004 | 856 | 1,367 | 400 | 2,623 | |||||||||||||
2005 financial year: | |||||||||||||||||
- Gross goodwill at January 1, 2005 | 910 | 1,378 | 444 | 2,732 | |||||||||||||
- Changes in the year (including translation adjustments) | 125 | 96 | 53 | 274 | |||||||||||||
Total gross value | 1,035 | 1,474 | 497 | 3,006 | |||||||||||||
Impairment | (59 | ) | (12 | ) | (52 | ) | (123 | ) | |||||||||
Net value at December 31, 2005 | 976 | 1,462 | 445 | 2,883 |
Gross | Net | |||||||||||
Value | Impairment | Value | ||||||||||
(Millions of euros) | ||||||||||||
At January 1, 2004 | 2,711 | (18 | ) | 2,693 | ||||||||
Acquisitions/ impairment | 99 | (92 | ) | 7 | ||||||||
Changes related to the recognition of commitments to purchase minority interests(1) | (38 | ) | — | (38 | ) | |||||||
Disposals and derecognition | (22 | ) | — | (22 | ) | |||||||
Translation adjustment and other | (18 | ) | 1 | (17 | ) | |||||||
December 31, 2004 | 2,732 | (109 | ) | 2,623 | ||||||||
Acquisitions/impairment | 72 | (6 | ) | 66 | ||||||||
Changes related to the recognition of commitments to purchase minority interests(1) | 50 | — | 50 | |||||||||
Disposals and derecognition | (8 | ) | — | (8 | ) | |||||||
Translation adjustment and other | 160 | (8 | ) | 152 | ||||||||
December 31, 2005 | 3,006 | (123 | ) | 2,883 |
(1) | While awaiting a specific IFRS or an IFRIC interpretation, commitments to purchase minority interests have been recognized in financial debt with the double entry being booked to minority interests and, for the balance, to goodwill. Any future changes in such minority interests as well as any change in the valuation of such commitments will modify the related goodwill balance. |
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Table of Contents
11. | Intangible assets, net |
Client Relationships | Software and Other | |||||||||||||||||||||||
Gross | Amortization/ | Gross | Amortization/ | |||||||||||||||||||||
Value | Impairment | Net Value | Value | Impairment | Net Value | |||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||
January 1, 2004 | 564 | (62 | ) | 502 | 100 | (68 | ) | 32 | ||||||||||||||||
Additions | 3 | — | 3 | 28 | — | 28 | ||||||||||||||||||
Amortization | — | (29 | ) | (29 | ) | — | (10 | ) | (10 | ) | ||||||||||||||
Impairment | — | (95 | ) | (95 | ) | — | — | — | ||||||||||||||||
Disposals and write-off | (5 | ) | 1 | (4 | ) | (10 | ) | 8 | (2 | ) | ||||||||||||||
Translation and other | (28 | ) | 13 | (15 | ) | (19 | ) | 7 | (12 | ) | ||||||||||||||
December 31, 2004 | 534 | (172 | ) | 362 | 99 | (63 | ) | 36 | ||||||||||||||||
Additions | — | — | — | 32 | — | 32 | ||||||||||||||||||
Amortization | — | (23 | ) | (23 | ) | — | (19 | ) | (19 | ) | ||||||||||||||
Impairment | — | (11 | ) | (11 | ) | — | — | — | ||||||||||||||||
Disposals and derecognition | (3 | ) | 3 | — | (7 | ) | 6 | (1 | ) | |||||||||||||||
Translation and other | 61 | (31 | ) | 30 | (7 | ) | (4 | ) | (11 | ) | ||||||||||||||
December 31, 2005 | 592 | (234 | ) | 358 | 117 | (80 | ) | 37 |
Tradenames | Total intangible assets | |||||||||||||||||||||||
Gross | Gross | Amortization/ | ||||||||||||||||||||||
Value | Impairment | Net Value | Value | Impairment | Net Value | |||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||
January 1, 2004 | 382 | — | 382 | 1,046 | (130 | ) | 916 | |||||||||||||||||
Additions | — | — | — | 31 | — | 31 | ||||||||||||||||||
Amortization | — | — | — | (39 | ) | (39 | ) | |||||||||||||||||
Impairment | — | (28 | ) | (28 | ) | — | (123 | ) | (123 | ) | ||||||||||||||
Disposals and write-off | — | — | — | (15 | ) | 9 | (6 | ) | ||||||||||||||||
Translation and other | (14 | ) | 2 | (12 | ) | (61 | ) | 22 | (39 | ) | ||||||||||||||
December 31, 2004 | 368 | (26 | ) | 342 | 1,001 | (261 | ) | 740 | ||||||||||||||||
Additions | — | — | — | 32 | — | 32 | ||||||||||||||||||
Amortization | — | — | — | — | (42 | ) | (42 | ) | ||||||||||||||||
Impairment | — | — | — | — | (11 | ) | (11 | ) | ||||||||||||||||
Disposals and write-off | — | — | — | (10 | ) | 9 | (1 | ) | ||||||||||||||||
Translation and other | 30 | (4 | ) | 26 | 84 | (39 | ) | 45 | ||||||||||||||||
December 31, 2005 | 398 | (30 | ) | 368 | 1,107 | (344 | ) | 763 |
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Table of Contents
12. | Property and Equipment, Net |
Land and | ||||||||||||
buildings | Other | Total | ||||||||||
(Millions of euros) | ||||||||||||
Gross value at January 1, 2004 | 317 | 1,038 | 1,355 | |||||||||
Additions | — | 94 | 94 | |||||||||
Disposals and write offs | (4 | ) | (130 | ) | (134 | ) | ||||||
Changes to scope of consolidation | — | — | — | |||||||||
Translation and other | (12 | ) | (99 | ) | (111 | ) | ||||||
Gross value at December 31, 2004 | 301 | 903 | 1,204 | |||||||||
Additions | — | 69 | 69 | |||||||||
Disposals and write offs | (2 | ) | (106 | ) | (108 | ) | ||||||
Changes to scope of consolidation | — | (58 | ) | (58 | ) | |||||||
Translation and other | 52 | 54 | 106 | |||||||||
Gross value at December 31, 2005 | 351 | 862 | 1,213 | |||||||||
Accumulated depreciation at December 31, 2004 | (8 | ) | (587 | ) | (595 | ) | ||||||
Increases(1) | (6 | ) | (107 | ) | (113 | ) | ||||||
Reversals | 1 | 101 | 102 | |||||||||
Changes to scope of consolidation | — | 38 | 38 | |||||||||
Translation and other | (37 | ) | (28 | ) | (65 | ) | ||||||
Accumulated depreciation at December 31, 2005 | (50 | ) | (583 | ) | (633 | ) | ||||||
Net value at December 31, 2005 | 301 | 279 | 580 |
(1) | Including 16 millions of impairment on other property and equipment (See note 5). |
F-28
Table of Contents
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Gross value of buildings | 131 | 116 | ||||||
Depreciation | (28 | ) | (22 | ) | ||||
Net value | 103 | 94 |
13. | Investments Accounted for by the Equity Method |
Carrying Amount | ||||
(Millions of euros) | ||||
Amount at January 1, 2005 | 17 | |||
Acquisitions | 12 | |||
Disposals | (3 | ) | ||
Group share of earnings of equity accounted investments | 11 | |||
Dividends paid | (9 | ) | ||
Effect of translation and other | 5 | |||
Amount at December 31, 2005 | 33 |
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Share in balance sheets of associated companies | ||||||||
Current assets | 122 | 67 | ||||||
Non-current assets | 108 | 95 | ||||||
Total assets | 230 | 162 | ||||||
Current liabilities | 190 | 133 | ||||||
Non-current liabilities | 7 | 12 | ||||||
Total liabilities | 197 | 145 | ||||||
Net assets | 33 | 17 |
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Table of Contents
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Share of income of associated companies | ||||||||
Revenues | 55 | 43 | ||||||
Net income | 11 | 6 | ||||||
Carrying amount of the investment | 33 | 17 |
14. | Other Financial Assets |
December 31, | December 31, | ||||||||
2005 | 2004 | ||||||||
(Millions of euros) | |||||||||
Available-for-sale financial assets | |||||||||
• IPG shares | 43 | 52 | |||||||
• Other | 10 | 13 | |||||||
Loans and advances to equity accounted and non-consolidated companies | 6 | 7 | |||||||
Other non-current financial assets | 86 | 90 | |||||||
Gross value | 145 | 162 | |||||||
Provisions | (27 | ) | (19 | ) | |||||
Net value | 118 | 143 |
2004 | ||||
(En millions de dollars) | ||||
Revenues | 6,387 | |||
Net income | (558 | ) | ||
Shareholders’ equity at December 31, | 1,718 |
15. | Inventory and Costs Billable to Clients |
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Gross value | 585 | 439 | ||||||
Provisions against inventories and costs billable to clients | (5 | ) | (2 | ) | ||||
Net value | 580 | 437 |
F-30
Table of Contents
16. | Accounts Receivable |
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Trade accounts receivable | 4,039 | 3,323 | ||||||
Notes receivable | 51 | 11 | ||||||
Gross value | 4,090 | 3,334 | ||||||
Provision for doubtful accounts | (76 | ) | (52 | ) | ||||
Net book value | 4,014 | 3,282 |
17. | Other Receivables and Other Current Assets |
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Taxes receivable | 171 | 155 | ||||||
Receivables on transactions performed as an agent (media space purchases) | 131 | 86 | ||||||
Advances to suppliers | 36 | 31 | ||||||
Prepayments and accrued income | 68 | 69 | ||||||
Derivatives hedging current assets and liabilities | 1 | 1 | ||||||
Derivatives on intercompany loans and borrowings(1) | 12 | 2 | ||||||
Derivatives hedging net investment(1) | 26 | — | ||||||
Other receivables and other current assets | 156 | 109 | ||||||
Gross value | 601 | 453 | ||||||
Provisions | (24 | ) | (3 | ) | ||||
Net value | 577 | 450 |
(1) | These current assets are included in the calculation of net financial debt (see Note 22) |
18. | Cash and Cash Equivalents |
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Cash and bank balances | 767 | 1,128 | ||||||
Marketable securities | 1,213 | 58 | ||||||
Total | 1,980 | 1,186 |
F-31
Table of Contents
19. | Shareholders’ Equity |
Share Capital of the Parent Company |
• | 1,562,129 shares issued in redemption of the first tranche of the Orane | |
• | 75,820 shares issued in the context of exercise of options |
Early Redemption of the Oceane 2018 Bonds |
Deduction of Treasury Stock Existing at December 31, 2005 |
Number of | ||||||||
Shares | Gross Value | |||||||
(Millions of euros except | ||||||||
shares) | ||||||||
Treasury stock held at December 31, 2004(1) | 13,382,843 | 332 | ||||||
Options exercised | (64548 | ) | (2 | ) | ||||
Other movements 2005(1) | (278531 | ) | (7 | ) | ||||
Treasury stock held at December 31, 2005(1) | 13,039,764 | 323 |
(1) | Including shares held under the liquidity contract |
Dividends Voted and Proposed |
Per Share | Total | |||||||
(Millions of euros) | ||||||||
(except per share | ||||||||
data in€) | ||||||||
Dividends paid in 2005 (in respect of the 2004 financial year) | 0.30 | 55 | ||||||
Dividends proposed to the Annual General Meeting (in respect of the 2005 financial year) | 0.36 | 71 | (1) |
(1) | Amount for all existing shares at December 31, 2005, including treasury stock. |
F-32
Table of Contents
20. | Provisions |
Pensions | ||||||||||||||||||||||||||||
and Other | ||||||||||||||||||||||||||||
Post- | Litigation | |||||||||||||||||||||||||||
Vacant | Employment | and | ||||||||||||||||||||||||||
Restructuring | Property | Sub-Total | Benefits | Claims | Other | Total | ||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||
January 1, 2004 | 102 | 232 | 334 | 272 | 54 | 149 | 809 | |||||||||||||||||||||
Increases | 12 | 9 | 21 | 38 | 4 | 22 | 85 | |||||||||||||||||||||
Releases on use | (55 | ) | (47 | ) | (102 | ) | (58 | ) | (4 | ) | (35 | ) | (199 | ) | ||||||||||||||
Other releases | — | — | — | — | — | — | — | |||||||||||||||||||||
Changes to scope of consolidation | — | — | — | — | — | — | — | |||||||||||||||||||||
Translation and other | (3 | ) | (18 | ) | (21 | ) | (10 | ) | (8 | ) | (13 | ) | (52 | ) | ||||||||||||||
December 31, 2004 | 56 | 176 | 232 | 242 | 46 | 123 | 643 | |||||||||||||||||||||
Increases | 10 | 8 | 18 | 22 | 5 | 32 | 77 | |||||||||||||||||||||
Releases on use | (35 | ) | (21 | ) | (56 | ) | (22 | ) | — | (14 | ) | (92 | ) | |||||||||||||||
Other releases | — | — | — | — | — | (1 | ) | (1 | ) | |||||||||||||||||||
Changes to scope of consolidation | — | — | — | — | — | (4 | ) | (4 | ) | |||||||||||||||||||
Translation and other | 3 | 19 | 22 | 1 | (3 | ) | 16 | 36 | ||||||||||||||||||||
December 31, 2005 | 34 | 182 | 216 | 243 | 48 | 152 | 659 | |||||||||||||||||||||
Of which long-term | 21 | 170 | 191 | 215 | 27 | 106 | 539 | |||||||||||||||||||||
Of which short-term | 13 | 12 | 25 | 28 | 21 | 46 | 120 |
Restructuring Provisions and Vacant Property Provisions |
Restructuring Provisions |
Vacant Property Provisions |
• | Defined benefit pension plans, | |
• | Post-employment health cover plans, and | |
• | Other post-employment benefits such as deferred remuneration and long-service awards. |
F-33
Table of Contents
21. | Defined Benefit Pension Commitments and Post-employment Health Cover |
December 31, 2005 | December 31, 2004 | |||||||||||||||||||||||
Post- | Post- | |||||||||||||||||||||||
Pension | Employment | Pension | Employment | |||||||||||||||||||||
Change in the Actuarial Benefit Obligation | Plans | Health Cover | Total | Plans | Health Cover | Total | ||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||
Actuarial benefit obligation at start of year | (348 | ) | (38 | ) | (386 | ) | (329 | ) | (37 | ) | (366 | ) | ||||||||||||
Service cost | (16 | ) | (1 | ) | (17 | ) | (15 | ) | (1 | ) | (16 | ) | ||||||||||||
Interest expense on benefit obligation | (20 | ) | (2 | ) | (22 | ) | (20 | ) | (2 | ) | (22 | ) | ||||||||||||
Contributions by plan participants | — | — | — | — | (1 | ) | (1 | ) | ||||||||||||||||
Plan amendments | (1 | ) | — | (1 | ) | — | — | — | ||||||||||||||||
Acquisitions, disposals | (15 | ) | — | (15 | ) | (2 | ) | — | (2 | ) | ||||||||||||||
Actuarial gains and (losses) | (42 | ) | — | (42 | ) | (13 | ) | (1 | ) | (14 | ) | |||||||||||||
Benefits paid and plan settlements | 28 | 2 | 30 | 18 | 3 | 21 | ||||||||||||||||||
Translation adjustments | (31 | ) | (6 | ) | (37 | ) | 13 | 1 | 14 | |||||||||||||||
Actuarial benefit obligation at end of year | (445 | ) | (45 | ) | (490 | ) | (348 | ) | (38 | ) | (386 | ) |
December 31, 2005 | December 31, 2004 | |||||||||||||||||||||||
Post- | Post- | |||||||||||||||||||||||
Pension | Employment | Pension | Employment | |||||||||||||||||||||
Change in Fair Value of Plan Assets | Plans | Health Cover | Total | Plans | Health Cover | |||||||||||||||||||
Total | ||||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||
Fair value of plan assets at start of year | 218 | — | 218 | 195 | — | 195 | ||||||||||||||||||
Actual return on plan assets | 31 | — | 31 | 18 | — | 18 | ||||||||||||||||||
Employer contributions | 14 | — | 14 | 30 | — | 30 | ||||||||||||||||||
Contributions by plan participants | — | — | — | — | — | — | ||||||||||||||||||
Acquisition, disposals | 1 | — | 1 | 2 | — | 2 | ||||||||||||||||||
Benefits paid and plan settlements | (22 | ) | — | (22 | ) | (20 | ) | — | (20 | ) | ||||||||||||||
Translation adjustments | 19 | — | 19 | (7 | ) | — | (7 | ) | ||||||||||||||||
Fair value of plan assets at end of year | 261 | — | 261 | 218 | — | 218 | ||||||||||||||||||
Surplus (deficit) | (184 | ) | (45 | ) | (229 | ) | (130 | ) | (38 | ) | (168 | ) | ||||||||||||
Unrecognized actuarial (gains) and losses | 41 | 2 | 43 | 12 | 1 | 13 | ||||||||||||||||||
Unrecognized past service cost | — | — | — | — | — | — | ||||||||||||||||||
Net provision for defined benefit pension commitments and post-employment health cover | (143 | ) | (43 | ) | (186 | ) | (118 | ) | (37 | ) | (155 | ) | ||||||||||||
Provision for other long-term benefits | (57 | ) | — | (57 | ) | (87 | ) | — | (87 | ) | ||||||||||||||
Total provision for pension commitments and other post-employment benefits | (200 | ) | (43 | ) | (243 | ) | (205 | ) | (37 | ) | (242 | ) |
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December 31, 2005 | December 31, 2004 | |||||||||||||||||||||||
Post- | Post- | |||||||||||||||||||||||
Pension | Employment | Pension | Employment | |||||||||||||||||||||
Net Periodic Pension Cost | Plans | Health Cover | Total | Plans | Health Cover | Total | ||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||
Service cost | (17 | ) | (1 | ) | (18 | ) | (15 | ) | (1 | ) | (16 | ) | ||||||||||||
Interest expense on benefit obligation(1) | (20 | ) | (2 | ) | (22 | ) | (20 | ) | (2 | ) | (22 | ) | ||||||||||||
Expected return on plan assets(1) | 18 | — | 18 | 17 | — | 17 | ||||||||||||||||||
Amortization of unrecognized past service cost | — | — | — | — | — | — | ||||||||||||||||||
Amortization of unrecognized actuarial (gains) and losses | — | — | — | — | — | — | ||||||||||||||||||
Defined benefit plan expense | (19 | ) | (3 | ) | (22 | ) | (18 | ) | (3 | ) | (21 | ) | ||||||||||||
Expenses under other plans | (45 | ) | — | (45 | ) | (43 | ) | — | (43 | ) | ||||||||||||||
Net periodic pension cost | (64 | ) | (3 | ) | (67 | ) | (61 | ) | (3 | ) | (64 | ) |
(1) | Being a net financial cost of 4 M€ classified in “Other financial income (expense)” (See Note 7) |
Actuarial Assumptions | Pension Plans | |||||||||||||||||||||||||||||||
(Weighted average rates) | Post-Employment Health Cover | |||||||||||||||||||||||||||||||
Rest of the | Total | |||||||||||||||||||||||||||||||
December 31, 2005 | North America | Europe | World | Total | North America | Europe | Total | Group | ||||||||||||||||||||||||
Discount rate | 5.50 | % | 4.76 | % | 2.00 | % | 5.07 | % | 5.50 | % | 5.00 | % | 5.00 | % | 5.10 | % | ||||||||||||||||
Expected return on plan assets | 7.50 | % | 6.58 | % | n/a | 6.85 | % | n/a | n/a | n/a | 6.85 | % | ||||||||||||||||||||
Future salary increases | n/a | 3.85 | % | 1.50 | % | 3.82 | % | 5.00 | % | n/a | 5.00 | % | 4.08 | % | ||||||||||||||||||
Future pension increases | n/a | 2.69 | % | 1.00 | % | 2.68 | % | n/a | n/a | n/a | 2.69 | % |
Pension Plans | ||||||||||||||||||||||||||||||||
Post-Employment Health Cover | ||||||||||||||||||||||||||||||||
Rest of the | Total | |||||||||||||||||||||||||||||||
December 31, 2004 | North America | Europe | World | Total | North America | Europe | Total | Group | ||||||||||||||||||||||||
Discount rate | 6.00 | % | 5.47 | % | 3.00 | % | 5.70 | % | 6.00 | % | 5.75 | % | 5.98 | % | 5.75 | % | ||||||||||||||||
Expected return on plan assets | 8.50 | % | 7.50 | % | n/a | 8.39 | % | n/a | n/a | n/a | 8.00 | % | ||||||||||||||||||||
Future salary increases | n/a | 3.68 | % | 2.50 | % | 3.68 | % | 5.00 | % | n/a | 5.00 | % | 3.75 | % | ||||||||||||||||||
Future pension increases | n/a | 2.56 | % | 1.00 | % | 2.56 | % | n/a | n/a | n/a | 2.50 | % |
Allocation of Plan Assets | 2005 | 2004 | ||||||
Shares | 60.6 | % | 64.5 | % | ||||
Bonds | 37.0 | % | 31.0 | % | ||||
Real estate | 0.2 | % | 2.5 | % | ||||
Other | 2.2 | % | 2.0 | % | ||||
Total | 100 | % | 100 | % |
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December 31, 2005 | ||||||||||||||
Post- | ||||||||||||||
Pension | Employment | |||||||||||||
Estimate of Employer Contributions for 2006 and of Future Benefits Payable | Plans | Health Cover | Total | |||||||||||
(Millions of euros) | ||||||||||||||
Estimate of employer contributions | ||||||||||||||
2006 | 21 | — | 21 | |||||||||||
Estimate of future benefits payable | ||||||||||||||
2006 | 26 | 2 | 28 | |||||||||||
2007 | 24 | 3 | 27 | |||||||||||
2008 | 26 | 3 | 29 | |||||||||||
2009 | 27 | 3 | 30 | |||||||||||
2010 | 29 | 3 | 32 | |||||||||||
Years 2011 to 2015 | 158 | 13 | 171 | |||||||||||
Total over the next 10 financial years | 290 | 27 | 317 |
December 31, 2005 | December 31, 2004 | |||||||||||||||||||||||
Breakdown Between US and Non-US plans | US | Non-US | Total | US | Non-US | Total | ||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||
Actuarial benefit obligation at end of year | (228 | ) | (262 | ) | (490 | ) | (185 | ) | (201 | ) | (386 | ) | ||||||||||||
Fair value of plan assets at end of year | 114 | 147 | 261 | 100 | 118 | 218 | ||||||||||||||||||
Surplus (deficit) | (114 | ) | (115 | ) | (229 | ) | (85 | ) | (83 | ) | (168 | ) | ||||||||||||
Unrecognized actuarial gains and losses | 13 | 30 | 43 | 3 | 10 | 13 | ||||||||||||||||||
Net provision for defined benefit commitments | (101 | ) | (85 | ) | (186 | ) | (82 | ) | (73 | ) | (155 | ) |
December 31, 2005 | December 31, 2004 | |||||||||||||||||||||||
US | Non-US | Total | US | Non-US | Total | |||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||
Service cost | (14 | ) | (4 | ) | (18 | ) | (13 | ) | (3 | ) | (16 | ) | ||||||||||||
Interest expense on benefit obligation | (11 | ) | (11 | ) | (22 | ) | (11 | ) | (11 | ) | (22 | ) | ||||||||||||
Expected return on plan assets | 10 | 8 | 18 | 8 | 9 | 17 | ||||||||||||||||||
Amortization of unrecognized past service cost | — | — | — | — | — | — | ||||||||||||||||||
Amortization of unrecognized actuarial (gains) and losses | — | — | — | — | — | — | ||||||||||||||||||
Defined benefit plan expense | (15 | ) | (7 | ) | (22 | ) | (16 | ) | (5 | ) | (21 | ) | ||||||||||||
Expenses under other plans | (25 | ) | (20 | ) | (45 | ) | (14 | ) | (29 | ) | (43 | ) | ||||||||||||
Net periodic pension cost | (40 | ) | (27 | ) | (67 | ) | (30 | ) | (34 | ) | (64 | ) |
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Increase of 1% | Decrease of 1% | |||||||
(Millions of euros) | ||||||||
Impact on service cost and interest expense on the benefit obligation | — | — | ||||||
Effect on the benefit obligation at year end | (6 | ) | 6 |
22. | Financial Debt |
Number of | ||||||||||||
Securities | 2005 | 2004 | ||||||||||
(Millions of | ||||||||||||
euros) | ||||||||||||
Bonds (excluding accrued interest) issued by Publicis Groupe S.A.: | ||||||||||||
750,000 | Eurobond 4.125% — January 2012 (Effective rate 4.30%) | 750 | — | |||||||||
6,633,921 | OCEANEs 2.75% — January 2018 (Effective rate 7.37%) | 278 | 692 | |||||||||
23,172,413 | OCEANEs 0.75% — July 2008 (Effective rate 6.61%) | 580 | 547 | |||||||||
1,562,129 | ORANEs 0.82% variable — September 2022 (Effective rate 8.50%) | 36 | 40 | |||||||||
750 | Bond convertible into IPG shares — 2% — January 2007 | 7 | 7 | |||||||||
Other debt: | ||||||||||||
Accrued interest | 15 | 12 | ||||||||||
Other borrowings and lines of credit | 23 | 29 | ||||||||||
Bank overdrafts | 95 | 172 | ||||||||||
Debt related to finance leases | 112 | 97 | ||||||||||
Debt related to acquisition of shareholdings | 87 | 90 | ||||||||||
Debt arising from commitments to purchase minority interests | 154 | 79 | ||||||||||
Total financial debt | 2,137 | 1,765 | ||||||||||
Of which long-term | 1,913 | 1,492 | ||||||||||
Of which short-term | 224 | 273 |
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Table of Contents
Debt Arising from | ||||
Commitments to | ||||
Purchase | ||||
Minority Interests | ||||
(Millions of | ||||
euros) | ||||
At December 31, 2004 | 79 | |||
Debts contracted in the year | 93 | |||
Buyouts exercised | (10 | ) | ||
Revaluation of the debt and translation adjustments | (8 | ) | ||
At December 31, 2005 | 154 |
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Financial debt (long and short-term) | 2,137 | 1,765 | ||||||
Fair value of the derivative hedging net investment(1) | 59 | — | ||||||
Fair value of derivatives on intercompany loans/ borrowings(1) | (9 | ) | 39 | |||||
Cash and cash equivalents | (1,980 | ) | (1,186 | ) | ||||
Net financial debt | 207 | 618 |
(1) | Included in “other receivables and other current assets” (see Note 17) and “other creditors and other current liabilities” (see Note 23). |
2005 | 2004 | |||||||||||||||||||||||||||||||
Maturity | Maturity | |||||||||||||||||||||||||||||||
Less than | 1 to | More than | Less than | 1 to | More than | |||||||||||||||||||||||||||
Total | 1 Year | 5 Years | 5 Years | Total | 1 Year | 5 Years | 5 Years | |||||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||||||
Bonds and other bank borrowings | 1,784 | 173 | 611 | 1,000 | 1,499 | 220 | 564 | 715 | ||||||||||||||||||||||||
Debt related to finance leases | 112 | — | — | 112 | 97 | — | — | 97 | ||||||||||||||||||||||||
Debt related to acquisition of shareholdings | 87 | 29 | 46 | 12 | 90 | 16 | 43 | 31 | ||||||||||||||||||||||||
Debt arising from commitments to purchase minority interests | 154 | 22 | 93 | 39 | 79 | 37 | 40 | 2 | ||||||||||||||||||||||||
Total | 2,137 | 224 | 750 | 1,163 | 1,765 | 273 | 647 | 845 |
Analysis by Currency |
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Euros | 1,037 | 1,418 | ||||||
US dollars | 956 | 174 | ||||||
Other currencies | 144 | 173 | ||||||
Total | 2,137 | 1,765 |
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Table of Contents
Analysis by Interest Rate Category |
Exposure to Liquidity Risk |
23. | Other Creditors and Other Current Liabilities |
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Millions of euros) | ||||||||
Payables on transactions performed as an agent (media space purchases) | 425 | 306 | ||||||
Advances received | 410 | 267 | ||||||
Liabilities to personnel | 312 | 206 | ||||||
Tax liabilities (except income taxes) | 171 | 156 | ||||||
Derivatives hedging current assets and liabilities | 1 | — | ||||||
Derivatives on intercompany loans and borrowings(1) | 3 | 41 | ||||||
Derivatives hedging net investment(1) | 85 | — | ||||||
Other current liabilities | 348 | 546 | ||||||
Total | 1,755 | 1,522 |
(1) | These current liabilities are included in the calculation of net financial debt (see Note 22) |
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Table of Contents
24. | Off-balance Sheet Commitments |
Contractual Commitments |
2005 | 2004 | |||||||||||||||||||||||||||||||
Maturity | Maturity | |||||||||||||||||||||||||||||||
Less than | 1 to | More than | Less than | 1 to | More than | |||||||||||||||||||||||||||
Total | 1 Year | 5 Years | 5 Years | Total | 1 Year | 5 Years | 5 Years | |||||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||||||
Commitments given | ||||||||||||||||||||||||||||||||
Operating lease commitments(1) | 1,309 | 290 | 676 | 343 | 1,375 | 237 | 816 | 322 | ||||||||||||||||||||||||
Commitments to sell investments | 8 | 8 | — | — | 8 | 8 | — | — | ||||||||||||||||||||||||
Guarantees | 113 | 50 | 42 | 21 | 272 | 209 | 35 | 28 | ||||||||||||||||||||||||
Total | 1,430 | 348 | 718 | 364 | 1,655 | 454 | 851 | 350 |
2005 | 2004 | |||||||||||||||||||||||||||||||
Maturity | Maturity | |||||||||||||||||||||||||||||||
Less | More | Less | More | |||||||||||||||||||||||||||||
than | 1 to | than | than | 1 to | than | |||||||||||||||||||||||||||
Total | 1 Year | 5 Years | 5 Years | Total | 1 Year | 5 Years | 5 Years | |||||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||||||
Commitments received | ||||||||||||||||||||||||||||||||
Sub-lease commitments(1) | 58 | 10 | 34 | 14 | 39 | 8 | 20 | 11 | ||||||||||||||||||||||||
Total | 58 | 10 | 34 | 14 | 39 | 8 | 20 | 11 |
(1) | Lease rent expense (net of sub-lease income) was 179 M€ in 2005 (as against 186 M€ in 2004). |
Guarantees |
• | A guarantee given to a bank in an amount of 30 M€, as owner of a 45% shareholding in a company called iSe International Sports & Entertainment AG, which finances, since January 2005, acquisition of the license for the hospitality program for the 2006 World Cup Football Championship from FIFA. In addition a guarantee was also given to a bank in an amount of 10 M€ as support for a line of credit from the bank to iSe. |
iSe, which was created jointly in 2003 between Publicis (45%) and Dentsu (45%), manages the “Hospitality and Prestige Ticketing” program of the 2006 World Cup Football Championship. |
• | A guarantee of payment of real estate taxes and operating expenses relating to the Leo Burnett in Chicago, for a total amount of 73 M€ over the period to 2012. |
Other Commercial Commitments |
2005 | 2004 | |||||||||||||||||||||||||||||||
Maturity | Maturity | |||||||||||||||||||||||||||||||
Less than | 1 to | More than | Less than | 1 to | More than | |||||||||||||||||||||||||||
Total | 1 Year | 5 Years | 5 Years | Total | 1 Year | 5 Years | 5 Years | |||||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||||||
Commitments received | ||||||||||||||||||||||||||||||||
Unutilized credit lines | 1,609 | 574 | 1,035 | — | 1,476 | 441 | 1,035 | — | ||||||||||||||||||||||||
Commitments given | ||||||||||||||||||||||||||||||||
Other commercial commitments | — | — | — | — | — | — | — | — |
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Table of Contents
Commitments under Finance Lease Arrangements |
2005 | 2004 | |||||||||||||||||||||||||||||||
Maturity | Maturity | |||||||||||||||||||||||||||||||
Less than | 1 to | More than | Less than | 1 to | More than | |||||||||||||||||||||||||||
Total | 1 Year | 5 Years | 5 Years | Total | 1 Year | 5 Years | 5 Years | |||||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||||||
Minimum payments | 345 | 10 | 41 | 294 | 307 | 10 | 35 | 262 | ||||||||||||||||||||||||
Effect of discounting | (233 | ) | (10 | ) | (41 | ) | (182 | ) | (210 | ) | (10 | ) | (35 | ) | (165 | ) | ||||||||||||||||
Present value of minimum payments | 112 | — | — | 112 | 97 | — | — | 97 |
Commitments Related to Bonds and to ORANEs |
• | Bond Convertible into IPG Shares — 2% January 2007 |
However, following the exercise of the “put option” in February 2004, only 750 convertible bonds remain in circulation at December 31, 2005. Publicis could thus be required, in case of a request for exchange, to deliver a maximum of 183,223 Interpublic Group shares in redemption of the bond. |
• | OCEANE 2018 — 2.75% actuarial January 2018 |
In addition, the bondholders have the possibility of requesting early redemption in cash, of all or part of the bonds they own, on January 18 in 2006, 2010, and 2014. The early redemption price is calculated in such a way as to provide a gross annual actuarial yield on the bond of 2.75% at the date of redemption. |
• | OCEANE 2008 — 0.75% actuarial July 2008 |
• | ORANEs — Bonds Redeemable in New or Existing Shares — September 2022 |
Obligations Related to Equity Warrants |
F-41
Table of Contents
25. | Financial Instruments |
Fair Value |
December 31, 2005 | ||||||||
Carrying | ||||||||
Amount | Fair Value | |||||||
(Millions of euros) | ||||||||
Financial assets: | ||||||||
Cash and cash equivalents | 1,980 | 1,980 | ||||||
Available-for-sale assets (IPG and others) | 48 | 48 | ||||||
Other financial assets | 70 | 70 | ||||||
Derivatives in asset position | 39 | 39 | ||||||
Financial liabilities: | ||||||||
Convertible bonds (OCEANEs) — debt component | 858 | 912 | ||||||
ORANEs — debt component | 36 | 48 | ||||||
Eurobond | 750 | 804 | ||||||
Debt related to finance leases | 112 | 184 | ||||||
Commitments to purchase minority commitments and earn-outs payable | 241 | 241 | ||||||
Other loans | 140 | 140 | ||||||
Derivatives in liability position | 89 | 89 |
26. | Management of Market Risks |
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Table of Contents
Maturities | ||||||||||||||||||||||||||||
Total at | ||||||||||||||||||||||||||||
December 31, | Less than | Between 1 and | Between 2 and | Between 3 and | Between 4 and | More than | ||||||||||||||||||||||
2005 | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years | 5 Years | ||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||
Fixed rate: | ||||||||||||||||||||||||||||
Eurobond | 750 | — | — | — | — | — | 750 | |||||||||||||||||||||
OCEANEs (debt component) | 858 | 48 | — | 580 | — | — | 230 | |||||||||||||||||||||
ORANEs (debt component) | 36 | 3 | 4 | 3 | 3 | 3 | 20 | |||||||||||||||||||||
Other fixed rate debt | �� | 7 | — | 7 | — | — | — | — | ||||||||||||||||||||
Debt related to finance leases | 112 | — | — | — | — | — | 112 | |||||||||||||||||||||
Total fixed rate | 1,763 | 51 | 11 | 583 | 3 | 3 | 1,112 | |||||||||||||||||||||
Variable rate: | ||||||||||||||||||||||||||||
Bank borrowings | 23 | 12 | 11 | — | — | — | — | |||||||||||||||||||||
Bank overdrafts | 95 | 95 | — | — | — | — | — | |||||||||||||||||||||
Cash and cash equivalents | (1,980 | ) | (1,980 | ) | — | — | — | — | — | |||||||||||||||||||
Total variable rate | (1,862 | ) | (1,873 | ) | 11 | — | — | — | — |
2005 | ||
Euro | 25% | |
US Dollar | 42% | |
Pound Sterling | 10% | |
Other | 23% | |
Total revenues | 100% |
F-43
Table of Contents
• | 21 M€ on 2005 consolidated revenues | |
• | 4 M€ on 2005 consolidated operating income |
Amount of | ||||||||||||||||
Currency Sold | Amount of Currency | Fair Value of | ||||||||||||||
(Local Currency, | Purchased (Local | the Hedge | ||||||||||||||
Currency Sold | Currency Purchased | in Millions) | Currency, in Millions) | (Millions of Euros) | ||||||||||||
AUD | EUR | (27.5 | ) | 17.0 | — | |||||||||||
AUD | USD | (54.0 | ) | 40.2 | 0.6 | |||||||||||
CAD | USD | (1.3 | ) | 1.1 | — | |||||||||||
DKK | EUR | (4.6 | ) | 0.6 | — | |||||||||||
DKK | USD | (52.7 | ) | 8.3 | — | |||||||||||
EUR | AUD | (4.5 | ) | 7.3 | — | |||||||||||
EUR | CAD | (2.6 | ) | 3.8 | 0.1 | |||||||||||
EUR | CHF | (21.3 | ) | 32.7 | (0.1 | ) | ||||||||||
EUR | GBP | (21.4 | ) | 14.6 | (0.2 | ) | ||||||||||
EUR | USD | (763.9 | ) | 915.7 | 10.4 | |||||||||||
GBP | EUR | (8.1 | ) | 11.9 | 0.1 | |||||||||||
GBP | USD | (0.1 | ) | 0.2 | — | |||||||||||
HKD | EUR | (10.7 | ) | 1.1 | (0.1 | ) | ||||||||||
HUF | EUR | (181.8 | ) | 0.7 | — | |||||||||||
JPY | EUR | (166.4 | ) | 1.3 | 0.1 | |||||||||||
MYR | AUD | (0.4 | ) | 0.1 | — | |||||||||||
MYR | EUR | (0.1 | ) | — | — | |||||||||||
NOK | EUR | (41.7 | ) | 5.3 | 0.1 | |||||||||||
NZD | EUR | (1.0 | ) | 0.6 | — | |||||||||||
NZD | GBP | (21.6 | ) | 8.8 | 0.3 | |||||||||||
SEK | EUR | (57.6 | ) | 6.2 | — | |||||||||||
SEK | USD | (184.8 | ) | 23.1 | (0.1 | ) | ||||||||||
THB | EUR | (233.2 | ) | 4.6 | (0.2 | ) | ||||||||||
USD | AUD | (5.0 | ) | 6.6 | (0.1 | ) | ||||||||||
USD | CAD | (0.8 | ) | 0.9 | — |
F-44
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Amount of | ||||||||||||||||
Currency Sold | Amount of Currency | Fair Value of | ||||||||||||||
(Local Currency, | Purchased (Local | the Hedge | ||||||||||||||
Currency Sold | Currency Purchased | in Millions) | Currency, in Millions) | (Millions of Euros) | ||||||||||||
USD | EUR | (81.1 | ) | 67.9 | (0.7 | ) | ||||||||||
USD | GBP | (11.5 | ) | 6.6 | (0.4 | ) | ||||||||||
Total intercompany receivables and payables | 9.8 |
Amount of | ||||||||||||||||
Currency Sold | Amount of Currency | Fair Value of the | ||||||||||||||
(Local Currency, | Purchased (Local | Hedge (Millions of | ||||||||||||||
Currency Sold | Currency Purchased | in Millions) | Currency, in Millions) | Euros) | ||||||||||||
EUR | GBP | (8.4 | ) | 5,8 | (0,1 | ) | ||||||||||
EUR | USD | (1.0 | ) | 1,2 | — | |||||||||||
GBP | EUR | (13.8 | ) | 20,0 | (0,1 | ) | ||||||||||
GBP | USD | (14.2 | ) | 24,5 | — | |||||||||||
MYR | EUR | (1.3 | ) | 0,3 | — | |||||||||||
MYR | GBP | (1.6 | ) | 0,2 | — | |||||||||||
Total third party receivables and payables | (0.2 | ) |
Amount of | Amount of | |||||||||||||||
Currency Sold | Currency | |||||||||||||||
(Local | Purchased (Local | Fair Value of the | ||||||||||||||
Currency, in | Currency, in | Hedge (Millions of | ||||||||||||||
Currency Sold | Currency Purchased | Millions) | Millions) | Euros) | ||||||||||||
EUR | GBP | (0.4 | ) | 0.3 | — | |||||||||||
EUR | USD | (0.4 | ) | 0.5 | — | |||||||||||
GBP | USD | (0.3 | ) | 0.5 | — | |||||||||||
USD | EUR | (18.1 | ) | 15.4 | 0.1 | |||||||||||
USD | GBP | (3.4 | ) | 2.0 | — | |||||||||||
USD | SEK | (0.5 | ) | 3.7 | — | |||||||||||
Total future flows(1) | 0.1 |
(1) | On account of their immaterial impact, Publicis did not apply hedge accounting but instead recognized changes in the fair value of the derivatives through income. |
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Treasury Stock | Other (IPG Shares) | |||||||
Effect on balance sheet assets | n/a | (4 | ) | |||||
Effect on shareholders’ equity | — | (4 | ) | |||||
Effect on net income | — | — |
27. | Segment Reporting |
Information by Geographical Area |
North | Rest of | |||||||||||||||
Europe | America | the World | Total | |||||||||||||
(Millions of euros) | ||||||||||||||||
2005 | ||||||||||||||||
Income statement items: | ||||||||||||||||
Revenue(1) | 1,647 | 1,763 | 717 | 4,127 | ||||||||||||
Depreciation and amortization expense (excluding intangibles arising on acquisition) | (49 | ) | (49 | ) | (18 | ) | (116 | ) | ||||||||
Operating margin | 238 | 315 | 96 | 649 | ||||||||||||
Amortization of intangibles arising on acquisition | (7 | ) | (13 | ) | (3 | ) | (23 | ) | ||||||||
Impairment | (20 | ) | (11 | ) | (2 | ) | (33 | ) | ||||||||
Equity in net income of non-consolidated companies | 9 | 1 | 1 | 11 | ||||||||||||
Balance sheet items: | ||||||||||||||||
Goodwill and intangible assets, net | 1,209 | 1,890 | 547 | 3,646 | ||||||||||||
Property and equipment, net | 299 | 225 | 56 | 580 | ||||||||||||
Deferred tax assets | 41 | 157 | 18 | 216 | ||||||||||||
Investments accounted for by the equity method | 21 | 10 | 2 | 33 | ||||||||||||
Other financial assets | 36 | 70 | 12 | 118 | ||||||||||||
Current assets (liabilities)(2) | (188 | ) | (1,111 | ) | (273 | ) | (1,572 | ) | ||||||||
Deferred tax liabilities | (104 | ) | (75 | ) | (41 | ) | (220 | ) | ||||||||
Long-term provisions | (189 | ) | (345 | ) | (5 | ) | (539 | ) | ||||||||
Disclosures in respect of the cash flow statement: | ||||||||||||||||
Purchases of property and equipment and intangible assets | (38 | ) | (30 | ) | (15 | ) | (83 | ) | ||||||||
Purchases of investments and other financial assets, net | 4 | 2 | 1 | 7 | ||||||||||||
Acquisitions of subsidiaries | (46 | ) | (12 | ) | (13 | ) | (71 | ) | ||||||||
Calculated expenses on stock options and similar items | 8 | 8 | 4 | 20 | ||||||||||||
Other calculated income and expenses | 2 | 9 | — | 11 |
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North | Rest of | |||||||||||||||
Europe | America | the World | Total | |||||||||||||
(Millions of euros) | ||||||||||||||||
2004 | ||||||||||||||||
Income statement items: | ||||||||||||||||
Revenue(1) | 1,584 | 1,633 | 615 | 3,832 | ||||||||||||
Depreciation and amortization expense (excluding intangibles arising on acquisition) | (53 | ) | (49 | ) | (17 | ) | (119 | ) | ||||||||
Operating margin | 220 | 288 | 72 | 580 | ||||||||||||
Amortization of intangibles arising on acquisition | (12 | ) | (13 | ) | (4 | ) | (29 | ) | ||||||||
Impairment | (46 | ) | (129 | ) | (40 | ) | (215 | ) | ||||||||
Equity in net income of non-consolidated companies | — | 2 | 4 | 6 | ||||||||||||
Balance sheet items: | ||||||||||||||||
Goodwill and intangible assets, net | 1,068 | 1,803 | 492 | 3,363 | ||||||||||||
Property and equipment, net | 352 | 206 | 51 | 609 | ||||||||||||
Deferred tax assets | 90 | 240 | 38 | 368 | ||||||||||||
Investments accounted for by the equity method | 16 | — | 1 | 17 | ||||||||||||
Other financial assets | 82 | 33 | 28 | 143 | ||||||||||||
Current assets (liabilities)(2) | (137 | ) | (1,042 | ) | (180 | ) | (1,359 | ) | ||||||||
Deferred tax liabilities | (142 | ) | (185 | ) | (38 | ) | (365 | ) | ||||||||
Long-term provisions | (215 | ) | (265 | ) | (57 | ) | (537 | ) | ||||||||
Disclosures in respect of the cash flow statement: | ||||||||||||||||
Purchases of property and equipment and intangible assets | (42 | ) | (43 | ) | (19 | ) | (104 | ) | ||||||||
Purchases of investments and other financial assets, net | 472 | (3 | ) | (1 | ) | 468 | ||||||||||
Acquisitions of subsidiaries | (100 | ) | (21 | ) | (3 | ) | (124 | ) | ||||||||
Calculated expenses on stock options and similar items | 8 | 8 | 4 | 20 | ||||||||||||
Other calculated income and expenses | 2 | 11 | — | 13 |
(1) | As a result of the manner in which this indicator is calculated (difference between billings and cost of billings), no eliminations are required between the different zones. |
(2) | Current assets (liabilities) are comprised of the following balance sheet captions: inventories and costs billable to clients, accounts receivable, other receivables and other current assets, accounts payable, income taxes payable, short-term provisions and other creditors and other current liabilities. |
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28. | Publicis Groupe S.A. Stock Options |
Description of Existing Plans |
• | Long Term Incentive Plan (LTIP) 2003-2005: (seventeenth tranche in 2003, nineteenth tranche in 2004, twentieth tranche in 2005) |
• | Plan granted in 2004 (eighteenth tranche); Plan granted in 2003 (sixteenth tranche); Plans granted in 2002 (thirteenth tranche, fourteenth tranche and fifteenth tranche): |
• | Plan granted in 2001 (eleventh tranche): |
• | Plan granted in 2000 (tenth tranche): |
• | Ex Publicis Communication plans (sixth to ninth tranches): |
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Characteristics of Publicis Stock Option Plan in Progress at 31/12/2005 |
Exercise | ||||||||||||||||||||||||||||
Price of | Outstanding | Of Which | Remaining | |||||||||||||||||||||||||
Shares with 0.40 | Type of | Date of | Options | Options at | Exercisable | Expiry | Contractual Life | |||||||||||||||||||||
Par Value | Option | Grant | (€) | 31/12/05 | at 31/12/05 | Date | (In Years) | |||||||||||||||||||||
6th tranche | Subscription | 26/04/1996 | 4.91 | 12,870 | 12,870 | 2006 | 0.32 | |||||||||||||||||||||
7th tranche(1) | Subscription | 10/03/1997 | 5.63 | 25,600 | 25,600 | 2007 | 1.21 | |||||||||||||||||||||
8th tranche | Subscription | 11/03/1998 | 8.66 | 40,500 | 40,500 | 2008 | 2.19 | |||||||||||||||||||||
9th tranche | Subscription | 04/11/1998 | 10.24 | 282,500 | 282,500 | 2008 | 2.84 | |||||||||||||||||||||
10th tranche | Purchase | 07/09/2000 | 43.55 | 100,000 | 100,000 | 2010 | 4.68 | |||||||||||||||||||||
11th tranche | Purchase | 23/04/2001 | 33.18 | 380,000 | 380,000 | 2011 | 5.31 | |||||||||||||||||||||
13th tranche | Purchase | 18/01/2002 | 29.79 | 104,600 | 2012 | 6.05 | ||||||||||||||||||||||
14th tranche | Purchase | 10/06/2002 | 32.43 | 5,000 | 2012 | 6.44 | ||||||||||||||||||||||
15th tranche | Purchase | 08/07/2002 | 29.79 | 220,000 | 2012 | 6.52 | ||||||||||||||||||||||
16th tranche | Purchase | 28/08/2003 | 24.82 | 517,067 | 2013 | 7.65 | ||||||||||||||||||||||
17th tranche(2) | Purchase | 28/08/2003 | 24.82 | 7,010,200 | 2013 | 7.65 | ||||||||||||||||||||||
18th tranche | Purchase | 28/09/2004 | 24.82 | 11,000 | 2014 | 8.74 | ||||||||||||||||||||||
19th tranche(2) | Purchase | 28/09/2004 | 24.82 | 1,832,186 | 2014 | 8.74 | ||||||||||||||||||||||
20th tranche(2) | Purchase | 24/05/2005 | 24.76 | 887,975 | 2015 | 9.39 | ||||||||||||||||||||||
Total of all tranches | 11,429,498 | 841,470 | ||||||||||||||||||||||||||
Average exercise price | 24.92 | 24.26 |
(1) | After a technical correction of the balance of outstanding options under the 7th tranche at December 31, 2000 (+ 20 190 options). |
(2) | Conditional options whose exercise is subject to meeting objectives over the course of a 3 year plan |
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Movements in 2004-2005 on Publicis Stock Option Plans |
Outstanding | Options | Outstanding | Options | Outstanding | ||||||||||||||||||||||||||||||||||||
Exercise | Options at | Options | Options | Cancelled or | Options at | Options | Options | Cancelled or | Options at | |||||||||||||||||||||||||||||||
Shares with 0.40 | Price | December 31, | Granted in | Exercised | Lapsed in | December 31, | Granted in | Exercised | Lapsed in | December 31, | ||||||||||||||||||||||||||||||
Par Value | (Euros) | 2003 | 2004 | in 2004 | 2004 | 2004 | 2005 | in 2005 | 2005 | 2005 | ||||||||||||||||||||||||||||||
4th tranche | 6.37 | 28,760 | (28,760 | ) | 0 | 0 | ||||||||||||||||||||||||||||||||||
5th tranche | 6.63 | 45,290 | (11,070 | ) | 34,220 | (9,880 | ) | (24,340 | ) | 0 | ||||||||||||||||||||||||||||||
6th tranche | 4.91 | 51,670 | (24,250 | ) | 27,420 | (14,550 | ) | 12,870 | ||||||||||||||||||||||||||||||||
7th tranche (1) | 5.63 | 59,550 | (14,560 | ) | 44,990 | (19,390 | ) | 25,600 | ||||||||||||||||||||||||||||||||
8th tranche | 8.66 | 58,500 | 58,500 | (18,000 | ) | 40,500 | ||||||||||||||||||||||||||||||||||
9th tranche | 10.24 | 301,500 | (5,000 | ) | 296,500 | (14,000 | ) | 282,500 | ||||||||||||||||||||||||||||||||
10th tranche | 43.55 | 100,000 | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||||||
11th tranche | 33.18 | 380,000 | 380,000 | 380,000 | ||||||||||||||||||||||||||||||||||||
12th tranche(2) | 29.79 | 2,943,135 | (2,943,135 | ) | 0 | |||||||||||||||||||||||||||||||||||
13th tranche | 29.79 | 104,600 | 104,600 | 104,600 | ||||||||||||||||||||||||||||||||||||
14th tranche | 32.43 | 5,000 | 5,000 | 5,000 | ||||||||||||||||||||||||||||||||||||
15th tranche | 29.79 | 220,000 | 220,000 | 220,000 | ||||||||||||||||||||||||||||||||||||
16th tranche | 24.82 | 517,067 | 517,067 | 517,067 | ||||||||||||||||||||||||||||||||||||
17th tranche | 24.82 | 9,498,000 | (1,484,000 | ) | 8,014,000 | (1,003,800 | ) | 7,010,200 | ||||||||||||||||||||||||||||||||
18th tranche | 24.82 | 0 | 11,000 | 11,000 | 11,000 | |||||||||||||||||||||||||||||||||||
19th tranche | 24.82 | 0 | 1,959,086 | 1,959,086 | (126,900 | ) | 1,832,186 | |||||||||||||||||||||||||||||||||
20th tranche | 24.76 | 0 | 0 | 935,192 | (47,217 | ) | 887,975 | |||||||||||||||||||||||||||||||||
Total of all tranches | 14,313,072 | 1,970,086 | (54,880 | ) | (4,455,895 | ) | 11,772,383 | 935,192 | (75,820 | ) | (1,202,257 | ) | 11,429,498 | |||||||||||||||||||||||||||
Average exercise price | 25.66 | 24.82 | 5.93 | 27.94 | 24.77 | 24.76 | 7.19 | 24.45 | 24.92 | |||||||||||||||||||||||||||||||
Average share price on exercise | 24.50 | 25.52 |
(1) | After a technical correction of the balance of outstanding options under the 7th tranche at December 31, 2000 (+ 20 190 options) |
(2) | Plan put in place in execution of commitments made on acquisition of Saatchi & Saatchi. Exercise of options granted under this plan was subject to the achievement of objectives over the period 2001- 2003. The objectives were not achieved and all options under the plan were thus cancelled |
Outstanding | Options | Outstanding | Outstanding | |||||||||||||||||||||||||||||||||||||
Exercise | Options at | Options | Cancelled | Options at | Options | Options at | Of Which | Remaining | ||||||||||||||||||||||||||||||||
Type of | Price of | December 31, | Exercised | or Lapsed | December 31, | Exercised | December 31, | Exercisable at | Expiry | Contractual | ||||||||||||||||||||||||||||||
Option | Options | 2003 | in 2004 | in 2004 | 2004 | in 2005 | 2005 | 31/12/05 | Date | Life (In Years) | ||||||||||||||||||||||||||||||
Purchase | $ | 24.40 | 137,034 | (16,546 | ) | (12,620 | ) | 107,868 | (60,245 | ) | 47,623 | 47,623 | 2008 | 2.6 | ||||||||||||||||||||||||||
Average exercise price | $ | 24.40 | $ | 24.40 | $ | 24.40 | $ | 24.40 | $ | 24.40 | $ | 24.40 | $ | 24.40 | ||||||||||||||||||||||||||
Average share price on exercise | € 24,50 | € 25,52 |
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20th Tranche | ||||||||
(a) | (b) | |||||||
(Millions of euros) | ||||||||
Number of options granted during the year | 467,596 | 467,596 | ||||||
Initial valuation of the option granted | 2.06 | 2.78 | ||||||
Assumptions: | ||||||||
Share price at the date of grant (in euros) | 22.99 | 22.99 | ||||||
Exercise price (in euros) | 24.76 | 24.76 | ||||||
Volatility of the Publicis share | 21 | % | 21 | % | ||||
Average duration of the option | 1.9 | 2.9 | ||||||
Rate of return on dividends | 1.22 | % | 1.22 | % | ||||
Risk free rate | 2.17 | % | 2.39 | % |
(a) | Options which can be exercised as from April 2006 |
(b) | Options which can be exercised as from April 2007 |
29. | Related Party Disclosures |
Increase in Provision | ||||||||
Revenues with Related | for Doubtful | |||||||
Parties(1) | Accounts | |||||||
(Millions of euros) | ||||||||
Dentsu | (27 | ) | — |
(1) | This is the difference between purchases and sales made by the Group with Dentsu .These transactions were carried out at market prices. |
Receivables on | Provisions for | Payables to Related | ||||||||||
Related Parties | Doubtful Accounts | Parties | ||||||||||
(Millions of euros) | ||||||||||||
Dentsu | 9 | — | 9 |
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2005 | 2004 | |||||||
(Millions of | ||||||||
euros) | ||||||||
Overall gross remuneration(1) | 9 | 16 | ||||||
Post employment benefits(2) | (1 | ) | 2 | |||||
Termination or end-of-contract payments(3) | — | — | ||||||
Other long-term benefits(4) | — | 2 | ||||||
Share-based payment(5) | 2 | 1 |
(1) | Remuneration, bonuses, indemnities, directors’ fees and benefits in kind paid during the year. |
(2) | Change in pensions provisions (net impact on the income statement). In 2005, the impact is a net reversal, taking account of amounts paid which are included in line (1). |
(3) | Expense recognized in the income statement in respect of provisions for termination or end of contract payments. |
(4) | Expense recognized in the income statement in respect of provisions for deferred conditional remuneration and bonuses. |
(5) | Expense recognized in the income statement in respect of Publicis Groupe S.A. stock option plans |
30. | Post-Balance Sheet Events |
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31. | Reconciliation with US GAAP |
32. | Effects of First Time Application of IFRS |
32.1 | Presentation of Standards Applied |
• | The transition date balance sheet at January 1, 2004, being the date at which the definitive impacts of transition to IFRS are recognized in shareholders’ equity, | |
• | The balance sheet at December 31, 2004 and the income statement for the year then ended. |
• | IFRS standards and interpretations applicable at December 31, 2005, | |
• | Publicis’ current view of the likely resolution of technical questions and drafts in the course of being examined by the IASB and the IFRIC (concerning the treatment of buyout commitments to minority shareholders), and | |
• | Options retained and exemptions used by Publicis in preparing its consolidated financial statements for 2005. |
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• | Recognition of 131 M€ of deferred tax liabilities through shareholders equity in the opening balance sheet in respect of the tradenames recognized on acquisition of Bcom3. | |
• | Alignment of the amount of the finance lease obligation in respect of the Chicago building with the amount at which the property is recorded in the opening balance sheet. In addition, the depreciable life of the building was reduced to the length of the lease contract. The impact on the opening balance sheet was (45) M€ on financial debt, (19) M€ on deferred tax assets, (1) M€ on property and equipment and 25 M€ on shareholders’ equity. The impact on 2004 results is not material, | |
• | Offset of 57 M€ of deferred tax assets recognized in the 2004 IFRS income statement of Publicis Groupe SA with deferred tax liabilities of the tax group of that company, | |
• | Change in the calculation of earnings per share, with a view to excluding “Amortization of intangibles arising on acquisition” from the calculation of headline earnings per share (EPS before impairment and certain unusual items). Earnings per share thus calculated are 1.28 euro (instead of 1.19 euro as published in June 2005) for basic EPS and 1.25 euro (instead of 1.17 euro) for diluted EPS. |
32.2 | Accounting Options Related to First-Time Application of IFRS |
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Designation of Financial Instruments as Being Measured at Fair Value Through Income or as Available-for-sale |
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32.3. | Impact of Conversion to IFRS Standards |
32.3.1 | Impact of First Time Application of IFRS Standards |
French Standards | IFRS | IFRS | January 1, 2004 | |||||||||||||
(1) | Reclassifications | Adjustments | IFRS | |||||||||||||
(Millions of euros) | ||||||||||||||||
Assets | ||||||||||||||||
Goodwill, net | 2,596 | — | 97 | 2,693 | ||||||||||||
Intangible assets, net | 916 | — | — | 916 | ||||||||||||
Property and equipment, net | 463 | — | 172 | 635 | ||||||||||||
Deferred tax assets | — | 405 | (1 | ) | 404 | |||||||||||
Investments accounted for by the equity method | 30 | 30 | ||||||||||||||
Other financial assets | 476 | (12 | ) | 49 | 513 | |||||||||||
Non-current assets | 4,481 | 393 | 317 | 5,191 | ||||||||||||
Inventory and costs billable to clients | 416 | — | — | 416 | ||||||||||||
Accounts receivable | 3,263 | — | — | 3,263 | ||||||||||||
Other receivables and other current assets | 1,095 | (393 | ) | 16 | 718 | |||||||||||
OCEANE redemption premium | 215 | — | (215 | ) | — | |||||||||||
Marketable securities | 196 | (196 | ) | — | — | |||||||||||
Cash | 1,219 | (1,219 | ) | — | — | |||||||||||
Cash and cash equivalents | — | 1,415 | — | 1,415 | ||||||||||||
Current assets | 6,404 | (393 | ) | (199 | ) | 5,812 | ||||||||||
Total assets | 10,885 | — | 118 | 11,003 | ||||||||||||
Liabilities and equity | ||||||||||||||||
Capital stock | 78 | — | — | 78 | ||||||||||||
Additional paid-in capital and retained earnings | 626 | — | 794 | 1,420 | ||||||||||||
Shareholders’ equity | 704 | — | 794 | 1,498 | ||||||||||||
Minority interests | 55 | — | (27 | ) | 28 | |||||||||||
Total equity | 759 | — | 767 | 1,526 | ||||||||||||
ORANEs | 495 | — | (495 | ) | — | |||||||||||
Long-term financial debt (more than 1 year) | 3,188 | (675 | ) | (576 | ) | 1,937 | ||||||||||
Deferred tax liabilities | 232 | 339 | 571 | |||||||||||||
Long-term provisions | 1,041 | (431 | ) | — | 610 | |||||||||||
Other non-current liabilities | — | 5 | — | 5 | ||||||||||||
Non-current liabilities | 4,229 | (869 | ) | (237 | ) | 3,123 | ||||||||||
Accounts payable | 3,590 | — | 2 | 3,592 | ||||||||||||
Short-term financial debt (less than 1 year) | — | 761 | 81 | 842 | ||||||||||||
Income taxes payable | — | 276 | — | 276 | ||||||||||||
Short-term provisions | — | 199 | — | 199 | ||||||||||||
Other creditors and other current liabilities | 1,812 | (367 | ) | — | 1,445 | |||||||||||
Current liabilities | 5,402 | 869 | 83 | 6,354 | ||||||||||||
Total liabilities and equity | 10,885 | — | 118 | 11,003 |
(1) | French standards at January 1, 2004 after taking account of changes in accounting policies related to CRC rule04-03 related to the consolidation of special purpose entities (which applies to the entity which |
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issues the Credit Linked Notes) and recommendation n°R-03-01, issued on April 1, 2003 related to rules for the recognition and measurement of commitments for pension and similar benefits. |
Shareholders’ equity at December 31, 2003, in accordance with CRC rule 99-02, as published | 726 | |||
Effects of changes in accounting policy | (22 | ) | ||
Shareholders’ equity at January 1, 2004, in accordance with CRC rule 99-02 | 704 |
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Deferred | ||||||||||||||||||||||||||||
Building at | Commitments | Tax | Total IFRS | |||||||||||||||||||||||||
133 | Available- | to Purchase | Liabilities | Adjustments | ||||||||||||||||||||||||
Champs- | Financing | for-sale | Minority | on | January 1, | |||||||||||||||||||||||
Elysées | Instruments | Assets | Interests | Tradenames | Other | 2004 | ||||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Goodwill, net | 97 | 97 | ||||||||||||||||||||||||||
Intangible assets, net | ||||||||||||||||||||||||||||
Property and equipment, net | 159 | 13 | 172 | |||||||||||||||||||||||||
Deferred tax assets | 18 | (19 | ) | (1 | ) | |||||||||||||||||||||||
Investments accounted for by the equity method | ||||||||||||||||||||||||||||
Other financial assets | 49 | 49 | ||||||||||||||||||||||||||
Non-current assets | 159 | 18 | 49 | 97 | (6 | ) | 317 | |||||||||||||||||||||
Inventory and costs billable to clients | ||||||||||||||||||||||||||||
Accounts receivable | ||||||||||||||||||||||||||||
Other receivables and other current assets | 14 | 2 | 16 | |||||||||||||||||||||||||
OCEANE redemption premium | (215 | ) | (215 | ) | ||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||
Current assets | (201 | ) | 2 | (199 | ) | |||||||||||||||||||||||
Total assets | 159 | (183 | ) | 49 | 97 | — | (4 | ) | 118 | |||||||||||||||||||
Liabilities and equity | ||||||||||||||||||||||||||||
Capital stock | ||||||||||||||||||||||||||||
Additional paid-in capital and retained earnings | 104 | 742 | 49 | (131 | ) | 30 | 794 | |||||||||||||||||||||
Shareholders’ equity | 104 | 742 | 49 | (131 | ) | 30 | 794 | |||||||||||||||||||||
Minority interests | (32 | ) | — | 5 | (27 | ) | ||||||||||||||||||||||
Total equity | 104 | 742 | 49 | (32 | ) | (131 | ) | 35 | 767 | |||||||||||||||||||
ORANEs | (495 | ) | (495 | ) | ||||||||||||||||||||||||
Long-term financial debt (more than 1 year) | (579 | ) | 48 | (45 | ) | (576 | ) | |||||||||||||||||||||
Deferred tax liabilities | 55 | 149 | 131 | 4 | 339 | |||||||||||||||||||||||
Long-term provisions | ||||||||||||||||||||||||||||
Other non-current liabilities | ||||||||||||||||||||||||||||
Non-current liabilities | 55 | (430 | ) | 48 | 131 | (41 | ) | (237 | ) | |||||||||||||||||||
Accounts payable | 2 | 2 | ||||||||||||||||||||||||||
Short-term financial debt (less than 1 year) | 81 | 81 | ||||||||||||||||||||||||||
Income taxes payable | ||||||||||||||||||||||||||||
Short-term provisions | ||||||||||||||||||||||||||||
Other creditors and other current liabilities | ||||||||||||||||||||||||||||
Current liabilities | 81 | 2 | 83 | |||||||||||||||||||||||||
Total liabilities and equity | 159 | (183 | ) | 49 | 97 | — | (4 | ) | 118 | |||||||||||||||||||
See Note 32.3.3 | a | b | e | f | g | h |
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French | IFRS | IFRS | ||||||||||||||
Standards | Reclassifications | Adjustments | 2004 IFRS | |||||||||||||
(Millions of euros) | ||||||||||||||||
Revenues | 3,825 | 7 | — | 3,832 | ||||||||||||
Personnel expenses | (2,197 | ) | (54 | ) | (20 | ) | (2,271 | ) | ||||||||
Other operating expenses | (921 | ) | 59 | (862 | ) | |||||||||||
Operating margin before depreciation and amortization | 707 | 12 | (20 | ) | 699 | |||||||||||
Depreciation and amortization expense (excluding intangibles arising on acquisition) | (117 | ) | — | (2 | ) | (119 | ) | |||||||||
Operating margin | 590 | 12 | (22 | ) | 580 | |||||||||||
Amortization of intangibles arising on acquisition | (29 | ) | — | — | (29 | ) | ||||||||||
Impairment(1) | (123 | ) | (88 | ) | (4 | ) | (215 | ) | ||||||||
Non-current income (expense) | 0 | 23 | (33 | ) | (10 | ) | ||||||||||
Operating income | 438 | (53 | ) | (59 | ) | 326 | ||||||||||
Net financial costs | (39 | ) | 39 | — | — | |||||||||||
Interest income (expense) on net financial debt | — | (45 | ) | (63 | ) | (108 | ) | |||||||||
Other financial income (expense) | — | (6 | ) | — | (6 | ) | ||||||||||
Income of consolidated companies before taxes | 399 | (65 | ) | (122 | ) | 212 | ||||||||||
Exceptional items | 23 | (23 | ) | — | — | |||||||||||
Income taxes | (134 | ) | — | 22 | (112 | ) | ||||||||||
Net change in deferred taxes related to the OBSA/ CLN transactions and deferred tax assets related to the conversion to IFRS | 130 | — | 68 | 198 | ||||||||||||
Net income of consolidated companies | 418 | (88 | ) | (32 | ) | 298 | ||||||||||
Equity in net income of non-consolidated companies | 6 | — | — | 6 | ||||||||||||
Goodwill amortization | (188 | ) | 88 | 100 | — | |||||||||||
Net income | 236 | — | 68 | 304 | ||||||||||||
Net income attributable to minority interests | 26 | 26 | ||||||||||||||
Net income attributable to equity holders of the parent | 210 | — | 68 | 278 | ||||||||||||
Per share data(in euros) | ||||||||||||||||
Number of shares — basic | 182,410,451 | 210,535,541 | ||||||||||||||
Earnings per share | 1.15 | 1.32 | ||||||||||||||
Number of shares — diluted | 251,607,849 | 233,984,337 | ||||||||||||||
Earnings per share — diluted | 0.97 | 1.29 |
(1) | Under French standards this caption only includes impairment on intangibles arising from acquisitions (goodwill impairment is included in the “goodwill amortization” line) |
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Total | ||||||||||||||||||||
Financing | Stock | Goodwill | Adjustments | |||||||||||||||||
Instruments | Options | Amortization | Other | to 2004 | ||||||||||||||||
(Millions of euros) | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Personnel expenses | (20 | ) | (20 | ) | ||||||||||||||||
Other operating expenses | ||||||||||||||||||||
Operating margin before depreciation and amortization | (20 | ) | (20 | ) | ||||||||||||||||
Depreciation and amortization expense (excluding intangibles arising on acquisition) | (2 | ) | (2 | ) | ||||||||||||||||
Operating margin | (20 | ) | (2 | ) | (22 | ) | ||||||||||||||
Amortization of intangibles arising on acquisition | ||||||||||||||||||||
Impairment | (4 | ) | (4 | ) | ||||||||||||||||
Non-current income (expense) | (33 | ) | (33 | ) | ||||||||||||||||
Operating income | (33 | ) | (20 | ) | (4 | ) | (2 | ) | (59 | ) | ||||||||||
Interest income (expense) on net financial debt | (63 | ) | (63 | ) | ||||||||||||||||
Other financial income (expense) | ||||||||||||||||||||
Income of consolidated companies before taxes | (96 | ) | (20 | ) | (4 | ) | (2 | ) | (122 | ) | ||||||||||
Income taxes | 22 | 22 | ||||||||||||||||||
Net change in deferred taxes related to the OBSA/CLN transactions and deferred tax assets related to the conversion to IFRS | 11 | 57 | 68 | |||||||||||||||||
Net income of consolidated companies | (63 | ) | (20 | ) | (4 | ) | 55 | (32 | ) | |||||||||||
Equity in net income of non-consolidated companies | ||||||||||||||||||||
Goodwill amortization | 100 | 100 | ||||||||||||||||||
Net income | (63 | ) | (20 | ) | 96 | 55 | 68 | |||||||||||||
Net income attributable to minority interests | ||||||||||||||||||||
Net income attributable to equity holders of the parent | (63 | ) | (20 | ) | 96 | 55 | 68 | |||||||||||||
See note 32.3.3 | b | c | d | h |
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French | IFRS | IFRS | December 31, 2004 | |||||||||||||
Standards | Reclassifications | Adjustments | IFRS | |||||||||||||
(Millions of euros) | ||||||||||||||||
Assets | ||||||||||||||||
Goodwill, net | 2,470 | — | 153 | 2,623 | ||||||||||||
Intangible assets, net | 740 | — | — | 740 | ||||||||||||
Property and equipment, net | 439 | — | 170 | 609 | ||||||||||||
Deferred tax assets | — | 371 | (3 | ) | 368 | |||||||||||
Investments accounted for by the equity method | 17 | 17 | ||||||||||||||
Other financial assets | 106 | 37 | 143 | |||||||||||||
Non-current assets | 3,772 | 371 | 357 | 4,500 | ||||||||||||
Inventory and costs billable to clients | 437 | — | — | 437 | ||||||||||||
Accounts receivable | 3,282 | — | — | 3,282 | ||||||||||||
Other receivables and other current assets | 833 | (371 | ) | (12 | ) | 450 | ||||||||||
OCEANE redemption premium | 202 | — | (202 | ) | — | |||||||||||
Marketable securities | 67 | (67 | ) | — | — | |||||||||||
Cash | 1128 | (1,128 | ) | — | — | |||||||||||
Cash and cash equivalents | 1,195 | (9 | ) | 1,186 | ||||||||||||
Current assets | 5,949 | (371 | ) | (223 | ) | 5,355 | ||||||||||
Total assets | 9,721 | — | 134 | 9,855 | ||||||||||||
Liabilities and equity | ||||||||||||||||
Capital stock | 78 | 78 | ||||||||||||||
Additional paid-in capital and retained earnings | 803 | 748 | 1,551 | |||||||||||||
Shareholders’ equity | 881 | 748 | 1,629 | |||||||||||||
Minority interests | 46 | (15 | ) | 31 | ||||||||||||
Total equity | 927 | 733 | 1,660 | |||||||||||||
ORANEs | 495 | (495 | ) | — | ||||||||||||
Long-term financial debt (more than 1 year) | 1,960 | (146 | ) | (322 | ) | 1,492 | ||||||||||
Deferred tax liabilities | 184 | 181 | 365 | |||||||||||||
Long-term provisions | 827 | (290 | ) | 537 | ||||||||||||
Other non-current liabilities | ||||||||||||||||
Non-current liabilities | 2,787 | (252 | ) | (141 | ) | 2,394 | ||||||||||
Accounts payable | 3,694 | 3,694 | ||||||||||||||
Short-term financial debt (less than 1 year) | 236 | 37 | 273 | |||||||||||||
Income taxes payable | 206 | 206 | ||||||||||||||
Short-term provisions | 106 | 106 | ||||||||||||||
Other creditors and other current liabilities | 1,818 | (296 | ) | 1,522 | ||||||||||||
Current liabilities | 5,512 | 252 | 37 | 5,801 | ||||||||||||
Total liabilities and equity | 9,721 | — | 134 | 9,855 |
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Deferred | ||||||||||||||||||||||||||||||||
Building | Commitments | Tax | ||||||||||||||||||||||||||||||
at 133 | Available- | to Purchase | Liabilities | Total IFRS | ||||||||||||||||||||||||||||
Champs- | Financing | for-sale | Minority | on | Adjustments | |||||||||||||||||||||||||||
Elysées | Instruments | Goodwill | Assets | Interests | Tradenames | Other | Dec 31, 2004 | |||||||||||||||||||||||||
(Millions of Euros) | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Goodwill, net | 94 | 59 | 153 | |||||||||||||||||||||||||||||
Intangible assets, net | ||||||||||||||||||||||||||||||||
Property and equipment, net | 158 | 12 | 170 | |||||||||||||||||||||||||||||
Deferred tax assets | 15 | (18 | ) | (3 | ) | |||||||||||||||||||||||||||
Investments accounted for by the equity method | ||||||||||||||||||||||||||||||||
Other financial assets | 37 | 37 | ||||||||||||||||||||||||||||||
Non-current assets | 158 | 15 | 94 | 37 | 59 | — | (6 | ) | 357 | |||||||||||||||||||||||
Inventory and costs billable to clients | ||||||||||||||||||||||||||||||||
Accounts receivable | ||||||||||||||||||||||||||||||||
Other receivables and other current assets | (12 | ) | (12 | ) | ||||||||||||||||||||||||||||
OCEANE redemption premium | (202 | ) | (202 | ) | ||||||||||||||||||||||||||||
Cash and cash equivalents | (9 | ) | (9 | ) | ||||||||||||||||||||||||||||
Current assets | (214 | ) | (9 | ) | (223 | ) | ||||||||||||||||||||||||||
Total assets | 158 | (199 | ) | 94 | 37 | 59 | — | (15 | ) | 134 | ||||||||||||||||||||||
Liabilities and equity | ||||||||||||||||||||||||||||||||
Capital stock | ||||||||||||||||||||||||||||||||
Additional paid-in capital and retained earnings | 104 | 564 | 94 | 37 | (126 | ) | 75 | 748 | ||||||||||||||||||||||||
Shareholders’ equity | 104 | 564 | 94 | 37 | (126 | ) | 75 | 748 | ||||||||||||||||||||||||
Minority interests | (20 | ) | — | 5 | (15 | ) | ||||||||||||||||||||||||||
Total equity | 104 | 564 | 94 | 37 | (20 | ) | (126 | ) | 80 | 733 | ||||||||||||||||||||||
ORANEs | (495 | ) | (495 | ) | ||||||||||||||||||||||||||||
Long-term financial debt (more than 1 year) | (322 | ) | 42 | (42 | ) | (322 | ) | |||||||||||||||||||||||||
Deferred tax liabilities | 54 | 54 | 126 | (53 | ) | 181 | ||||||||||||||||||||||||||
Long-term provisions | ||||||||||||||||||||||||||||||||
Other non-current liabilitiesNon-current liabilities | 54 | (268 | ) | 42 | 126 | (95 | ) | (141 | ) | |||||||||||||||||||||||
Accounts payable | ||||||||||||||||||||||||||||||||
Short-term financial debt (less than 1 year) | 37 | 37 | ||||||||||||||||||||||||||||||
Income taxes payable | ||||||||||||||||||||||||||||||||
Short-term provisions | ||||||||||||||||||||||||||||||||
Other creditors and other current liabilities | ||||||||||||||||||||||||||||||||
Current liabilities | 37 | 37 | ||||||||||||||||||||||||||||||
Total liabilities and equity | 158 | (199 | ) | 94 | 37 | 59 | — | (15 | ) | 134 | ||||||||||||||||||||||
See Note 32.3.3 | a | b | d | e | f | g | h |
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Discount Rate Used | Fair Value | Fair Value | Fair Value | |||||||||||||||||
for Calculation of | of the | of the | of the | |||||||||||||||||
the Debt (Market | Debt on | Conversion | Instrument | |||||||||||||||||
Rate on Issue) | Date of Issue | Issue | Option | on Issue | ||||||||||||||||
(Millions of euros) | ||||||||||||||||||||
OBSA | 8.5% | September 2002 | 445 | 197 | 642 | |||||||||||||||
OCEANE 2018 | 7.37% | January 2002 | 580 | 110 | 690 | |||||||||||||||
OCEANE 2008 | 6.61% | July 2003 | 509 | 163 | 672 | |||||||||||||||
ORANEs(1) | 8.5% | September 2002 | 47 | 448 | 495 | |||||||||||||||
Total | 1,581 | 918 | 2,499 |
(1) | Classified in a separate caption “ORANEs”, outside shareholders equity, under French standards. |
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Effect in Reducing | Impact Net of Tax | |||||||||||
Discount Rate Used for | the Amount of the | on Shareholders’ | ||||||||||
Calculation of the Debt | Debt at | Equity at | ||||||||||
(Market Rate on Issue) | January 1, 2004 | January 1, 2004 | ||||||||||
(Millions of euros) | ||||||||||||
OBSA | 8.5% | (187 | ) | 123 | (3) | |||||||
OCEANE 2018 | 7.37% | (280 | )(2) | 36 | ||||||||
OCEANE 2008 | 6.61% | (155 | ) | 97 | ||||||||
ORANEs(1) | 8.5% | 43 | 467 | |||||||||
Total | (579 | ) | 723 |
(1) | Classified in a separate caption “ORANEs”, outside shareholders equity under French standards. |
(2) | Including (215) M€ resulting from the reclassification of the redemption premium into debt. |
(3) | Detachable equity warrants on the OBSAs. |
Additional | ||||
Finance Expense | ||||
2004 | ||||
(Millions of | ||||
euros) | ||||
OBSA | 7 | (1) | ||
OCEANE 2018 | 30 | |||
OCEANE 2008 | 29 | |||
ORANEs | (3) | |||
Total | 63 |
(1) | Restatement of the reversal through the income statement of the detachable equity warrants recognized under French GAAP. |
Treatment of Credit Linked Notes and the Transaction Involving the Sale of the CLNs and the Redemption of the Bond Component of the OBSA |
Effect on the Transition Date Balance Sheet at January 1, 2004 |
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Effect on the Balance Sheet at December 31, 2004 |
16th | 17th | 18th | 19th | |||||||||||||||||||||
Tranche | Tranche | Tranche | Tranche | |||||||||||||||||||||
a | b | a | b | |||||||||||||||||||||
(Millions of euros) | ||||||||||||||||||||||||
Initial valuation per option granted | 7.83 | 6.67 | 7.56 | 5.05 | 3.16 | 4.02 | ||||||||||||||||||
Assumptions: | ||||||||||||||||||||||||
Share price at the date of grant (in euros) | 24.84 | 24.84 | 24.84 | 23.14 | 23.14 | 23.14 | ||||||||||||||||||
Exercise price (in euros) | 24.82 | 24.82 | 24.82 | 24.82 | 24.82 | 24.82 | ||||||||||||||||||
Volatility of the Publicis share | 34 | % | 34 | % | 34 | % | 24 | % | 24 | % | 24 | % | ||||||||||||
Average duration of the option | 5.0 | 3.7 | 4.7 | 5.0 | 2.6 | 3.6 | ||||||||||||||||||
Rate of return of dividends | 1.12 | % | 1.12 | % | 1.12 | % | 1.12 | % | 1.12 | % | 1.12 | % |
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• | On initial recognition, these commitments are recognized in financial debt at the discounted value of the purchase commitment, with the double entry being booked to minority interests and, for the balance, to goodwill, | |
• | Subsequent changes in the value of the commitment are recognized by adjusting the amount of goodwill, | |
• | On expiration of the commitment, if the purchase does not take place, the entries previously recognized are reversed; if the purchase is completed, the amount recognized in financial debt is reversed against the cash outflow related to the purchase of the minority shareholding. |
Effect on the Transition Date Balance Sheet at January 1, 2004 and on the Balance Sheet at December 31, 2004 |
g) | Deferred Tax Liabilities on the Tradenames Recognized on Acquisition of Bcom3 |
• | Foreign currency hedging instruments |
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• | Treasury stock |
• | Recognition of deferred tax assets |
• | Depreciation of property and equipment |
• | Finance lease of the Chicago building |
• | Pension commitments |
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Reconciliation between 2004 earnings per share and diluted earnings per share under French standards and IFRS |
2004 | ||||||||||||
French Standards | 2004 IFRS | |||||||||||
Net income used for the calculation of earnings per share (in millions of euros) | ||||||||||||
Net income attributable to equity holders of the parent | a | 210 | 278 | |||||||||
Impact of dilutive instruments: | ||||||||||||
— Savings in financial expenses related to the conversion of debt instruments, net of tax(1) | 34 | 23 | ||||||||||
Net income attributable to equity holders of the parent — diluted | b | 244 | 301 | |||||||||
Number of shares used for the calculation of earnings per share Average number of shares in circulation | 182,410,541 | 182,410,541 | ||||||||||
Shares to be issued to redeem the ORANEs | — | 28,125,000 | ||||||||||
Average number of shares used for the calculation | c | 182,410,541 | 210,535,541 | |||||||||
Impact of dilutive instruments:(2) | ||||||||||||
— Shares to be issued to redeem the ORANEs | 28,125,000 | — | ||||||||||
— Effect of exercise of dilutive stock options | 275,374 | 276,383 | ||||||||||
— Shares resulting from the conversion of the convertible bonds | 40,796,934 | 23,172,413 | ||||||||||
Number of shares — diluted | d | 251,607,849 | 233,984,337 |
2004 | ||||||||||||
French Standards | 2004 IFRS | |||||||||||
(In euros) | ||||||||||||
Earnings per share | a/c | 1.15 | 1.32 | |||||||||
Earnings per share — diluted | b/d | 0.97 | 1.29 |
(1) | Only the 2008 OCEANEs are taken into account for the calculation of earnings per share as the 2018 OCEANEs have an anti-dilutive effect on EPS. |
(2) | Equity warrants and stock options whose exercise price is greater than the average share price for 2004, as well as the 2018 OCEANEs, are not taken into account in the calculation of diluted earnings per share because of their anti-dilutive nature. |
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2004 | ||||||||
IFRS | ||||||||
Net income used for the calculation of Adjusted(1) earnings per share (Millions of euros) | ||||||||
Net income attributable to equity holders of the parent | 278 | |||||||
Items excluded: | ||||||||
— Amortization of intangibles arising on acquisition, net of tax | 18 | |||||||
— Impairment, net of tax | 164 | |||||||
— Capital gain on OBSA/ CLN transactions, net of tax | (134 | ) | ||||||
— Deferred tax assets related to conversion to IFRS | (57 | ) | ||||||
Adjusted net income attributable to equity holders of the parent | e | 269 | ||||||
Impact of dilutive instruments: | ||||||||
— Savings in financial expenses related to the conversion of debt instruments, net of tax | 23 | |||||||
Adjusted net income attributable to equity holders of the parent — diluted | f | 292 | ||||||
Number of shares used for the calculation of earnings per share | ||||||||
Average number of shares in circulation | 182,410,541 | |||||||
Shares to be issued to redeem the ORANEs | 28,125,000 | |||||||
Average number of shares used for the calculation | c | 210,535,541 | ||||||
Impact of dilutive instruments: | ||||||||
— Effect of exercise of dilutive stock options | 276,383 | |||||||
— Shares resulting from the conversion of convertible bonds | 23,172,413 | |||||||
Number of shares — diluted | d | 233,984,337 | ||||||
(In euros) | ||||||||
Headline earnings per share(1) | e/c | 1.28 | ||||||
Headline earnings per share(1) — diluted | f/d | 1.25 |
(1) | Earnings per share before amortization of intangibles arising on acquisition, impairment, capital gain on the OBSA/CLN transactions (net of tax) and the recognition of deferred tax assets related to conversion to IFRS. |
a) Fully Consolidated Companies |
Company Name | Operating Name(s) | % Control | % Interest | Country | ||||||||
Publicis Conseil | Publicis Conseil | 99,61% | 99,61% | France | ||||||||
Publicis Régions | Publicis Régions | 99,84% | 99,45% | France | ||||||||
Global Event Management | Global Event Management | 100% | 99,61% | France | ||||||||
Publicis Dialog | Publicis Dialog | 100% | 99,61% | France | ||||||||
Mediasystem | Mediasystem | 99,96% | 99,57% | France | ||||||||
Publicis Consultants | Publicis Consultants | 100% | 100% | France | ||||||||
Carré Noir | Carré Noir | 100% | 100% | France | ||||||||
Saatchi & Saatchi France | Saatchi & Saatchi France | 100% | 100% | France | ||||||||
Leo Burnett France | Leo Burnett France | 100% | 100% | France | ||||||||
Mundocom | Mundocom | 100% | 99,61% | France |
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Company Name | Operating Name(s) | % Control | % Interest | Country | ||||||||
Medicus Paris | Medicus Paris | 99,97% | 99,97% | France | ||||||||
Starcom Worldwide | Starcom Worldwide | 100% | 100% | France | ||||||||
Groupe ZenithOptimedia France | Groupe ZenithOptimedia France | 100% | 100% | France | ||||||||
Le Monde Publicité | Le Monde Publicité | 49% | 49% | France | ||||||||
Metrobus | Metrobus | 67% | 67% | France | ||||||||
Mediavision | Mediavision | 66,63% | 66,63% | France | ||||||||
Régie I | Régie I | 49% | 49% | France | ||||||||
Drugstore Champs Elysées | Drugstore Champs Elysées | 100% | 100% | France | ||||||||
Challenger House | Challenger House | 100% | 100% | France | ||||||||
Chow Communications | Chow Communications | 100% | 99,61% | France | ||||||||
eventive Altenhuber Riha(b) | eventive | 100% | 70% | Germany | ||||||||
Publicis Frankfurt | Publicis Frankfurt | 100% | 100% | Germany | ||||||||
Publicis Hamburg | Publicis Hamburg | 100% | 100% | Germany | ||||||||
BMZ + more Management | BMZ | 100% | 100% | Germany | ||||||||
Buhler and Partners | Buhler and Partners | 100% | 100% | Germany | ||||||||
Publicis Kommunikations agentur | Publicis Kommunikations agentur | 100% | 100% | Germany | ||||||||
Saatchi & Saatchi | Saatchi & Saatchi Germany | 100% | 100% | Germany | ||||||||
Leo Burnett Services | Leo Burnett Germany | 100% | 100% | Germany | ||||||||
TKM Starcom Frankfurt | TKM Starcom Frankfurt | 100% | 100% | Germany | ||||||||
Zenith More Media | Zenith More Media | 90,50% | 90,50% | Germany | ||||||||
Optimedia Gesellschaft für Media-Services | Opimedia Germany | 100% | 100% | Germany | ||||||||
Publicis Communication | Publicis Communication | 100% | 100% | Australia | ||||||||
Optimedia Australia | Optimedia Australia | 100% | 100% | Australia | ||||||||
Saatchi & Saatchi Communications | Saatchi & Saatchi Communications | 100% | 100% | Australia | ||||||||
Leo Burnett | Leo Burnett | 100% | 100% | Australia | ||||||||
Starcom Worldwide Australia | Starcom Worldwide Australia | 100% | 100% | Australia | ||||||||
Publicis Groupe Austria | Publicis Austria | 100% | 100% | Austria | ||||||||
Leo Burnett | Leo Burnett Brussels | 100% | 100% | Belgium | ||||||||
Publicis Brasil Comunicaçao | Pubilicis Sales Norton | 100% | 100% | Brazil | ||||||||
Finance Nazca Publicidade Brazil | Finance Nazca Publicidade Brazil | 51% | 51% | Brazil | ||||||||
Leo Burnett Publicidade | Leo Burnett Publicidade | 100% | 100% | Brazil | ||||||||
Publicis Canada | Publicis Canada | 70% | 70% | Canada | ||||||||
Saatchi & Saatchi Advertising | Saatchi & Saatchi Canada | 100% | 100% | Canada | ||||||||
Leo Burnett Company | Leo Burnett Company | 100% | 100% | Canada | ||||||||
TMG MacManus Canada | Bensimon Byrne | 100% | 100% | Canada | ||||||||
ZenithOptimedia Canada | ZenithOptimedia Canada | 100% | 100% | Canada | ||||||||
Saatchi & Saatchi Great Wall Advertising Co | Saatchi & Saatchi China | 70% | 70% | China | ||||||||
Leo Burnett China | Leo Burnett China | 100% | 100% | China | ||||||||
Leo Burnett Shanghai Advertising Co | Leo Burnett Shanghai Advertising Co | 70% | 70% | China | ||||||||
Publicis Ad Link Group | Publicis Ad Link Group | 96% | 96% | China |
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Company Name | Operating Name(s) | % Control | % Interest | Country | ||||||||
Leo Burnett Colombia | Leo Burnett Colombia | 100% | 100% | Colombia | ||||||||
Welcomm Publicis Worldwide | Publicis Welcomm | 70% | 70% | Korea | ||||||||
Leo Burnett Korea | Leo Burnett Korea | 100% | 100% | Korea | ||||||||
Publicis Communication Espana | Publicis Casadevall y Pedreño | 100% | 100% | Spain | ||||||||
Vitruvio-Leo Burnett | Vitruvio-Leo Burnett | 100% | 100% | Spain | ||||||||
Grupo K/Arc | Grupo K/Arc | 100% | 100% | Spain | ||||||||
Starcom Worldwide Media Estrategia | Starcom Worldwide Media Estrategia | 74% | 74% | Spain | ||||||||
Optimedia Spain | Optimedia Spain | 99,73% | 99,73% | Spain | ||||||||
Zenith Media Spain | Zenith Media Spain | 100% | 100% | Spain | ||||||||
Pharma Consult Services | Medicus, S&S Healthcare (a) | 100% | 100% | Spain | ||||||||
Publicis USA | Publicis USA | 100% | 100% | United States | ||||||||
Publicis & Hal Riney | Publicis & Hal Riney | 100% | 100% | United States | ||||||||
Publicis NY | Publicis Dialog | 96,69% | 96,69% | United States | ||||||||
Lionel Sosa | Bromley Communications | 49% | 49% | United States | ||||||||
Saatchi & Saatchi North America | Saatchi & Saatchi North America | 100% | 100% | United States | ||||||||
Conill Advertising | Saatchi & Saatchi Conill | 100% | 100% | United States | ||||||||
Thompson Murray | Saatchi & Saatchi X | 100% | 100% | United States | ||||||||
Leo Burnett USA | Leo Burnett USA , Lapiz, Vigilante (a) | 100% | 100% | United States | ||||||||
Leo Burnett Detroit | SMG Directory Marketing | 100% | 100% | United States | ||||||||
Martin Retail Group | Chemistri Martin Group | 70% | 70% | United States | ||||||||
Arc worldwide | Arc, Ileo, Frankel (a) | 100% | 100% | United States | ||||||||
Fallon USA | Fallon USA | 100% | 100% | United States | ||||||||
Williams Labadie | Williams Labadie | 100% | 100% | United States | ||||||||
Kaplan Thaler Group | Kaplan Thaler Group | 100% | 100% | United States | ||||||||
Manning Selvage & Lee | Manning Selvage & Lee | 100% | 100% | United States | ||||||||
Publicis Events | Publicis Events, CLT Meetings | 100% | 100% | United States | ||||||||
Capps Digital | Capps Digital | 100% | 100% | United States | ||||||||
Nelson Communications | Nelson Communications | 100% | 100% | United States | ||||||||
Medicus Group International | Medicus Group, Discovery International, Lifebrands, Science and Medicine (a) | 100% | 100% | United States | ||||||||
Saatchi & Saatchi Healthcare Com | Saatchi & Saatchi Healthcare Com | 100% | 100% | United States | ||||||||
Publicis Selling Solutions | Publicis Selling Solutions, Arista Marketing Assoc. (a) | 100% | 100% | United States | ||||||||
Science Oriented Solutions | Science Oriented Solutions | 100% | 100% | United States | ||||||||
Starcom Media Vest Group USA | Starcom, Planworks (a) | 100% | 100% | United States | ||||||||
Starlink Services | Starlink Services | 100% | 100% | United States | ||||||||
Media Vest Worldwide | Media Vest Worldwide | 100% | 100% | United States | ||||||||
Relay | Relay St Louis | 100% | 100% | United States |
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Company Name | Operating Name(s) | % Control | % Interest | Country | ||||||||
Optimedia International U.S., Inc | Optimedia International U.S. | 100% | 100% | United States | ||||||||
Zenith Media Services | Zenith Media Services | 100% | 100% | United States | ||||||||
Publicis Helsinki | Publicis Finland | 90,39% | 90,39% | Finland | ||||||||
European Advertising Organisation SA of Advertisements Promotion & Publications | Leo Burnett Greece | 100% | 100% | Greece | ||||||||
Leo Burnett | Leo Burnett Hungary | 100% | 100% | Hungary | ||||||||
Saatchi & Saatchi Hungary | Saatchi & Saatchi Hungary | 100% | 100% | Hungary | ||||||||
TLG India | Leo Burnett India, Starcom Wordwide (a) | 87,57% | 87,57% | India | ||||||||
Publicis Ariely Advertising 2000 | Publicis Ariely | 75% | 75% | Israel | ||||||||
Publicis Italy | Publicis Italy | 100% | 100% | Italy | ||||||||
Saatchi & Saatchi Italy | Saatchi & Saatchi Italy | 99% | 99% | Italy | ||||||||
Leo Burnett Italy | Leo Burnett Italy | 100% | 100% | Italy | ||||||||
Starcom Mediavest Group Italy | Starcom Mediavest Group Italy | 100% | 100% | Italy | ||||||||
ZenithOptimedia Italy | ZenithOptimedia Italy | 100% | 100% | Italy | ||||||||
Beacon Communications | Beacon Communications, Starcom Japan (a) | 66% | 66% | Japan | ||||||||
Medicus KK | Medicus Tokyo | 100% | 100% | Japan | ||||||||
Publicis Graphics | Publicis Graphics | 60% | 60% | Lebanon, Jordan, Bahrain, Egypt, UAE, Saudi Arabia, Kuwait, Turkey | ||||||||
Leo Burnett Advertising | Leo Burnett Malaysie | 100% | 100% | Malaysia | ||||||||
Publicis Arredondo de Haro | Publicis Arredondo de Haro | 68,62% | 68,62% | Mexico | ||||||||
Leo Burnett Mexico | Leo Burnett Mexico | 100% | 100% | Mexico | ||||||||
Starcom Worldwide | Starcom Worldwide | 100% | 100% | Mexico | ||||||||
Olabuenga Chemestri | Olabuenga Chemestri | 75% | 75% | Mexico | ||||||||
JKL Oslo | JKL Oslo | 99,10% | 99,10% | Norway | ||||||||
Publicis Mojo | Publicis Mojo | 100% | 100% | New Zealand | ||||||||
Saatchi & Saatchi | Saatchi & Saatchi New Zealand | 100% | 100% | New Zealand | ||||||||
Jimenez Basic Advertising | Jimenez Basic | 53,09% | 46,91% | Philippines | ||||||||
Publicis Amsterdam | Publicis Amsterdam | 100% | 100% | Netherlands | ||||||||
Leo Burnett Amsterdam | Leo Burnett Amsterdam | 100% | 100% | Netherlands | ||||||||
Saatchi & Saatchi Netherlands | Saatchi & Saatchi Netherlands | 100% | 100% | Netherlands | ||||||||
Publicis Dialog NL | Publicis Dialog NL | 100% | 100% | Netherlands | ||||||||
Leo Burnett Warsaw | Leo Burnett Warsaw | 100% | 100% | Poland | ||||||||
Publicis Publicidade | Publicis Portugal | 83% | 83% | Portugal | ||||||||
Badillo Nazca S&S Inc | Badillo Nazca S&S Inc | 100% | 100% | Puerto Rico | ||||||||
Publicis | Publicis UK | 100% | 100% | United Kingdom | ||||||||
Publicis Dialog | Publicis Dialog UK | 100% | 100% | United Kingdom | ||||||||
Publicis Blue Print | Publicis Blue Print | 100% | 100% | United Kingdom | ||||||||
Zed UK | Zed UK | 100% | 100% | United Kingdom |
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Company Name | Operating Name(s) | % Control | % Interest | Country | ||||||||
Creators of Multi Media Art Ltd | Mundocom Comma | 100% | 100% | United Kingdom | ||||||||
Saatchi & Saatchi UK | Saatchi & Saatchi UK | 100% | 100% | United Kingdom | ||||||||
The Facilities Group | The Facilities Group | 70% | 70% | United Kingdom | ||||||||
Leo Burnett | Leo Burnett | 100% | 100% | United Kingdom | ||||||||
Arc Integrated Marketing | Arc Integrated Marketing | 100% | 100% | United Kingdom | ||||||||
Fallon London | Fallon UK | 100% | 100% | United Kingdom | ||||||||
The Triangle Group | The Triangle Group | 100% | 100% | United Kingdom | ||||||||
Masius UK | Masius UK | 100% | 100% | United Kingdom | ||||||||
MS&L UK | MS&L UK | 100% | 100% | United Kingdom | ||||||||
Publicis Healthcare Communications Group | Publicis Healthcare Communications, The Medicus Group (a) | 100% | 100% | United Kingdom | ||||||||
Starcom Motive | Starcom Media Vest | 100% | 100% | United Kingdom | ||||||||
ZenithOptimedia Group | ZenithOptimedia UK | 100% | 100% | United Kingdom | ||||||||
Freud Communications Limited (b) | Freud Communications Limited | 100% | 50,01% | United Kingdom | ||||||||
Leo Burnett Moscow | Leo Burnett Moscow | 100% | 100% | Russia | ||||||||
Publicis United | Publicis United Russia | 100% | 100% | Russia | ||||||||
Rodnaya Rech | Mother Tongue | 99% | 99% | Russia | ||||||||
Publicis Singapore | Publicis Singapore, Publicis Eureka (a) | 98,80% | 98,80% | Singapore | ||||||||
Saatchi & Saatchi | Saatchi & Saatchi Singapore | 100% | 100% | Singapore | ||||||||
TLG Communications | Leo Burnett, Starcom Singapore (a) | 100% | 100% | Singapore | ||||||||
JKL Stockholm | JKL Stockholm | 100% | 100% | Sweden | ||||||||
Starcom Sweden | Starcom Sweden | 93,74% | 93,74% | Sweden | ||||||||
Publicis Zürich | Publicis Zürich | 100% | 100% | Switzerland | ||||||||
Fisch Meier Direkt | Fischmeier | 100% | 100% | Switzerland | ||||||||
Optimedia Switzerland | Optimedia Switzerland | 100% | 75% | Switzerland | ||||||||
Saatchi & Saatchi Simko | Saatchi & Saatchi Simko | 100% | 100% | Switzerland | ||||||||
Leo Burnett Taiwan | Leo Burnett Taiwan, Arc Taiwan (a) | 100% | 100% | Taiwan | ||||||||
Star Reachers Group | Star Reachers Group | 100% | 100% | Thailand | ||||||||
Saatchi & Saatchi Thailand | Saatchi & Saatchi Thailand | 100% | 100% | Thailand | ||||||||
Markom Leo Burnett Reklem Hizmeltri | Leo Burnett Istanbul Markom | 100% | 100% | Turkey | ||||||||
Leo Burnett | Leo Burnett United Arab Emirates | 100% | 100% | UAE | ||||||||
Starcom Media Vest Group | Starcom United Arab Emirates | 100% | 100% | UAE | ||||||||
Publicis Venezuela | Publicis Venezuela | 60% | 60% | Venezuela |
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b) Equity Accounted Companies |
Company Name | Operating Name | % Control | % Interest | Country | ||||||||||
Bartle Bogle Hegarty | BBH | 49% | 49% | United Kingdom | ||||||||||
International Sports and | ||||||||||||||
Entertainment | iSe | 45% | 45% | Switzerland | ||||||||||
Burrell Communications | Burrell (c) | 49% | 49% | United States |
(a) | These entities bring together several tradenames or businesses |
(b) | Acquisitions in the year |
(c) | Burrell Communications is henceforth 49% owned and is accounted for under the equity method |
Mergers: Publicis Koufra, Publicis Cachemire, Paname Communication, Guillaume Tell (France) Disposals: JC Decaux Netherlands |
Entities which have fallen below the threshold for publication: Publicis Meetings, Publicis Events, ECA 2, Médias & Régies Europe, Publicis Johannesburg, Saatchi & Saatchi Austria, Publicis Belgium, Saatchi & Saatchi Belgium, Mediavest Toronto, Starcom Toronto, Publicis Denmark, Saatchi & Saatchi Denmark, Saatchi & Saatchi Spain, Winner & Associates, Johnston & Associates, Semaphore Partners, Rowland, New World Health, Publicis Hellas, Publicis Hungary, Publicis Ambiance Advertising, Adverbox (Mundocom Italy), MS&L Italy, Saatchi & Saatchi Japon, Publicis Japon, Publicis Wet Desert, Saatchi & Saatchi Malaysia, ZenithOptimedia Netherlands, Publicis Pologne, BMZ/Park, Leo Burnett Lisbon, Leo Burnett Prague, Starcom Russia, Leo Burnett Annonsbyra, Publicis Taiwan, Saatchi & Saatchi Taiwan, Publicis Thailand, Leo Burnett Venezuela, Saatchi & Saatchi Vietnam. |
34. | Summary of Differences Between International Financial Reporting Standards and Generally Accepted Accounting Principles in the United States of America. |
As of December 31, 2004 | ||||||||||||
(and for year then ended) | ||||||||||||
As Previously | Impact of | |||||||||||
Reported | Restatement | Restated | ||||||||||
(In millions of euros) | ||||||||||||
Goodwill | 4,281 | 44 | 4,325 | |||||||||
Deferred tax liabilities (non-current) | 542 | 126 | 668 | |||||||||
Total shareholders’ equity | 2,484 | (82 | ) | 2,402 | ||||||||
Net income | 346 | — | 346 |
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December 31, | |||||||||||||
Notes | 2005 | 2004 | |||||||||||
(In millions | |||||||||||||
of euros) | |||||||||||||
Net income as determined under IFRS | 386 | 278 | |||||||||||
U.S. GAAP adjustments: | |||||||||||||
OCEANEs 2008 | 1 | 31 | 29 | ||||||||||
OCEANEs 2018 | 1 | 21 | 30 | ||||||||||
ORANEs | 2 | (4 | ) | (3 | ) | ||||||||
Stock-based compensation | 3 | (12 | ) | 20 | |||||||||
Pensions and postretirement benefits | 4 | (2 | ) | (2 | ) | ||||||||
Revaluation of tangible fixed assets | 5 | 1 | 1 | ||||||||||
Sale-leaseback transaction | 6 | 2 | 2 | ||||||||||
Business combinations: Saatchi & Saatchi | 7.1 | (44 | ) | (46 | ) | ||||||||
Business combinations: Bcom3 | 7.2 | — | 24 | ||||||||||
Business combinations: Other | 7.3 | — | — | ||||||||||
Goodwill | 8 | 1 | 88 | ||||||||||
Other | 9 | — | |||||||||||
Deferred income taxes on above adjustments | 15 | 6 | (75 | ) | |||||||||
Net income as determined under U.S. GAAP | 395 | 346 |
December 31, | |||||||||||||
Notes | 2005 | 2004 | |||||||||||
€ | € | ||||||||||||
(In millions, | |||||||||||||
except per | |||||||||||||
share data) | |||||||||||||
Earnings Per Share | |||||||||||||
Earnings per share as determined under U.S. GAAP | 9 | ||||||||||||
Basic | 2.16 | 1.90 | |||||||||||
Diluted | 1.63 | 1.51 | |||||||||||
Weighted average common shares outstanding (in millions) | |||||||||||||
Basic | 183 | 182 | |||||||||||
Diluted | 249 | 251 |
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December 31, | |||||||||||||
Notes | 2005 | 2004 | |||||||||||
(In millions of | |||||||||||||
euros) | |||||||||||||
Shareholders equity as determined under IFRS | 2,085 | 1,629 | |||||||||||
U.S. GAAP adjustments: | |||||||||||||
OCEANEs 2008 | 1 | (88 | ) | (120 | ) | ||||||||
OCEANEs 2018 | 1 | 2 | (28 | ) | |||||||||
ORANEs | 2 | (402 | ) | (455 | ) | ||||||||
Stock-based compensation | 3 | — | — | ||||||||||
Pensions and postretirement benefits | 4 | (23 | ) | (7 | ) | ||||||||
Revaluation of tangible fixed assets | 5 | (157 | ) | (158 | ) | ||||||||
Sale-leaseback transaction | 6 | (25 | ) | (23 | ) | ||||||||
Business combinations: Saatchi & Saatchi | 7.1 | 1,480 | 1,430 | ||||||||||
Business combinations: Bcom3 | 7.2 | 389 | 325 | ||||||||||
Business combinations: Other | 7.3 | (154 | ) | (154 | ) | ||||||||
Goodwill | 8 | 277 | 276 | ||||||||||
Other | 5 | (4 | ) | ||||||||||
Deferred income taxes on above adjustments | 15 | (315 | ) | (309 | ) | ||||||||
Shareholders’ equity as determined under U.S. GAAP | 3,074 | 2,402 | (*) |
(*) | As restated (See above) |
1. | OCEANEs 2008 and 2018 |
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2. | ORANEs |
(i) | an equity component representing the fact that they may only be settled by Publicis for a fixed number of its own ordinary shares and the instrument includes no contractual obligation to deliver cash or to exchange financial assets or liabilities that are potentially unfavorable to Publicis, and |
(ii) | a debt component representing the right of the holder to receive periodic payments from Publicis based on a the higher of a minimum contractual rate per annum or a rate per annum determined on the basis of historical dividend payments of Publicis. |
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3. | Stock-based Compensation |
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4. | Pensions and Postretirement Benefits |
Net Income | Shareholders’ | ||||||||||||||||
(For the | Equity | ||||||||||||||||
Year Ended | (As of | ||||||||||||||||
December 31) | December 31) | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
U.S. GAAP adjustments: | |||||||||||||||||
Unrecognized actuarial gains and losses | (2 | ) | (2 | ) | 21 | 23 | |||||||||||
Minimum pension liabilities | — | — | (44 | ) | (30 | ) | |||||||||||
Total adjustment, before income taxes | (2 | ) | (2 | ) | (23 | ) | (7 | ) | |||||||||
Unrecognized actuarial gains and losses |
Minimum pension liabilities |
5. | Revaluation of Tangible Fixed Assets |
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6. | Sale-leaseback Transaction |
7. | Business Combinations |
7.1 | Business Combinations: Saatchi & Saatchi |
• | Assets and liabilities are recorded at historical cost less accumulated depreciation at the combination date; and | |
• | The results of operations and cash flows are combined from the acquisition date to year-end. |
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Net Income | Shareholders’ | ||||||||||||||||
(For the | Equity | ||||||||||||||||
Year Ended | (As of | ||||||||||||||||
December 31) | December 31) | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
U.S. GAAP adjustments: | |||||||||||||||||
Goodwill and intangible assets | (22 | ) | (29 | ) | 2,131 | 2,059 | |||||||||||
Impairment of goodwill | — | — | (570 | ) | (570 | ) | |||||||||||
Impairment of intangible assets | — | — | (223 | ) | (223 | ) | |||||||||||
Contingent value rights | — | — | 49 | 49 | |||||||||||||
Stock-based compensation | — | — | 148 | 148 | |||||||||||||
Net operating loss carry-forwards | (22 | ) | (17 | ) | (55 | ) | (33 | ) | |||||||||
Total adjustment, before income taxes | (44 | ) | (46 | ) | 1,480 | 1,430 | |||||||||||
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7.2 | Business Combinations: Bcom3 (As Restated) |
Net Income | |||||||||||||||||
(For the | Shareholders’ | ||||||||||||||||
Year Ended | Equity (As of | ||||||||||||||||
December 31) | December 31) | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
U.S. GAAP adjustments: | |||||||||||||||||
Determination of purchase price | — | 24 | 1,334 | 1,334 | |||||||||||||
Deferred tax liabilities | — | — | 131 | 131 | |||||||||||||
Goodwill impairment and amortization | — | — | (934 | ) | (934 | ) | |||||||||||
Currency translation adjustments | — | — | (142 | ) | (206 | ) | |||||||||||
Total adjustment, before income taxes | — | 24 | 389 | 325 | |||||||||||||
7.2.1 | Determination of Purchase Price |
French | ||||||||||||||
GAAP | Difference in | |||||||||||||
(Retained in | Purchase | |||||||||||||
IFRS under | Price/ | |||||||||||||
IFRS 1) | U.S. GAAP | Goodwill | ||||||||||||
(In millions of euros) | ||||||||||||||
Value of securities issued as consideration for Bcom3: | ||||||||||||||
Publicis ordinary shares | 990 | 2,048 | 1,058 | |||||||||||
ORANEs: | 495 | 1,024 | 529 | |||||||||||
OBSAs (hybrid instrument): | ||||||||||||||
Amount before tax effect | 642 | 858 | 216 | |||||||||||
Tax effect | 73 | 133 | 60 | |||||||||||
Total OBSAs | 715 | 991 | 276 | |||||||||||
Aggregate value of securities issued as consideration for Bcom3 | 2,200 | 4,063 | 1,863 | |||||||||||
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7.2.2 | Deferred Tax Liabilities (As Restated) |
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7.3 | Business Combinations: Other |
Net Income | Shareholders’ | ||||||||||||||||
(For the | Equity | ||||||||||||||||
Year Ended | (As of | ||||||||||||||||
December 31) | December 31) | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
U.S. GAAP adjustments: | |||||||||||||||||
ZenithOptimedia Group | — | — | (77 | ) | (77 | ) | |||||||||||
FCA Group | — | — | 44 | 44 | |||||||||||||
Compensation arrangements | — | — | (15 | ) | (15 | ) | |||||||||||
Restructuring costs | — | — | (106 | ) | (106 | ) | |||||||||||
Total adjustment, before income taxes | — | — | (154 | ) | (154 | ) | |||||||||||
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8. | Goodwill Impairment and Amortization |
9. | Basic Earnings per Share and Diluted Earnings per Share |
10. | Written Put Options Related to Minority Interests |
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• | On issuance, these conditional obligations are recognized as financial debt at the present value of the future purchase commitment, with the counterpart recorded as a reduction of minority interests (to the extent of the historical cost of the minority interest) and the excess, if any, is recorded as goodwill. | |
• | Subsequent changes in the present value of the conditional obligations are recognized by adjusting the amount of goodwill. | |
• | On expiration of the conditional obligation, if the purchase does not take place, the entries previously recognized are reversed. If the purchase is completed, the amount recognized in financial debt is debited against the cash outflows related to the purchase of the minority shareholdings. |
11. | Classification of Pension Costs (Interest Cost and Return on Plan Assets) |
12. | Deferred Income Taxes |
13. | Cumulative Translation Adjustments |
14. | Other |
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15. | Deferred Income Tax on Above Adjustments |
Period Ended | ||||||||
December 31, | ||||||||
2005 | 2004 | |||||||
(In millions of | ||||||||
euros) | ||||||||
Revenues | 4,127 | 3,825 | ||||||
Salaries and related expenses | (2,468 | ) | (2,199 | ) | ||||
Office and general expenses | (908 | ) | (924 | ) | ||||
Depreciation and amortization(1) | (193 | ) | (300 | ) | ||||
Other operating income (loss) | 86 | — | ||||||
Operating income (loss) | 644 | 402 | ||||||
Net financial income (loss) | (61 | ) | (41 | ) | ||||
Other income (expense), net | — | 17 | ||||||
Income (loss) before income taxes | 583 | 378 | ||||||
Income taxes | (171 | ) | (12 | ) | ||||
Income (loss) after income taxes | 412 | 366 | ||||||
Equity in net income of non-consolidated companies | 11 | 6 | ||||||
Minority interest | (28 | ) | (26 | ) | ||||
Net income (loss) | 395 | 346 | ||||||
December 31, | ||||||||
2005 | 2004 | |||||||
(Restated) | ||||||||
(In millions of | ||||||||
euros) | ||||||||
Comprehensive Income under U.S. GAAP | ||||||||
Net income (loss) as determined under U.S. GAAP | 395 | 346 | ||||||
Other comprehensive income (loss), net of taxes | ||||||||
Unrealized gain/(loss) on available-for-sale securities | (16 | ) | 1 | |||||
Financial instruments | 9 | — | ||||||
Foreign currency translation adjustment | 259 | (177 | ) | |||||
Minimum pension liability adjustment | (14 | ) | (7 | ) | ||||
Comprehensive income (loss) | 633 | 163 | ||||||
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December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(Restated) | ||||||||
(In millions of euros) | ||||||||
Assets | ||||||||
Cash and cash equivalents | 1,980 | 1,128 | ||||||
Accounts receivable | 4,014 | 3,282 | ||||||
Other current assets | 1,207 | 1,033 | ||||||
Current assets | 7,201 | 5,443 | ||||||
Goodwill | 4,624 | 4,324 | ||||||
Intangible assets | 1,466 | 1,412 | ||||||
Property and Equipment, net | 507 | 511 | ||||||
Other non current assets | 317 | 498 | ||||||
Total non current assets | 6,914 | 6,745 | ||||||
Total assets | 14,115 | 12,188 | ||||||
Liabilities and shareholders’ equity | ||||||||
Current portion of long-term debt, capital lease obligations and short-term borrowings | 292 | 277 | ||||||
Accounts payable | 4,605 | 3,694 | ||||||
Accrued expenses and other liabilities | 2,102 | 1,943 | ||||||
Current liabilities | 6,999 | 5,914 | ||||||
Long-term debt and capital lease obligations, less current portion | 2,861 | 2,634 | ||||||
Other non-current liabilities | 1,116 | 1,192 | ||||||
Minority interest | 65 | 46 | ||||||
Non current liabilities | 4,042 | 3,872 | ||||||
Capital stock | 79 | 78 | ||||||
Additional paid-in-capital | 4,827 | 4,752 | ||||||
Retained earnings (deficit) | (745 | ) | (1,094 | ) | ||||
Treasury stock | (323 | ) | (332 | ) | ||||
Accumulated Comprehensive Income | (764 | ) | (1,002 | ) | ||||
Shareholders’ equity | 3,074 | 2,402 | ||||||
Total liabilities and shareholders’ equity as adjusted for U.S. GAAP | 14,115 | 12,188 |
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December 31, | ||||||||
2005 | 2004 | |||||||
(Restated) | ||||||||
(In millions of | ||||||||
euros) | ||||||||
Accumulated other comprehensive income (loss): | ||||||||
Unrealized gains on securities | 21 | 36 | ||||||
Financial instruments | 9 | — | ||||||
Foreign currency translation adjustment | (750 | ) | (1,008 | ) | ||||
Minimum pension liability adjustment | (44 | ) | (30 | ) | ||||
Accumulated other comprehensive income (loss) | (764 | ) | (1,002 | ) | ||||
• | Intangible Assets |
Net | |||||||||||||
Gross Carrying | Accumulated | Carrying | |||||||||||
Amount | Depreciation* | Amount | |||||||||||
(In millions of euros) | |||||||||||||
At December 31, 2005 | |||||||||||||
Trade names and client relationships | 2,169 | 738 | 1,431 | ||||||||||
Software and other | 121 | 86 | 35 | ||||||||||
Total | 2,290 | 824 | 1,466 | ||||||||||
At December 31, 2004 (Restated) | |||||||||||||
Trade names and client relationships | 2,015 | 637 | 1,378 | ||||||||||
Software and other | 103 | 69 | 34 | ||||||||||
Total | 2,118 | 706 | 1,412 | ||||||||||
* | Includes impairment of€357 million, and€346 million in 2005 and 2004 respectively. |
Year Ending December 31, | (In millions of euros) | |||
2006 | 63 | |||
2007 | 62 | |||
2008 | 44 | |||
2009 | 44 | |||
2010 | 44 |
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• | Pensions and Postretirement Benefits |
Pensions and | ||||||||
Similar Benefits | ||||||||
U.S. | Non-U.S. | |||||||
(In millions of | ||||||||
euros) | ||||||||
Estimated employer’s contribution in 2006 | 13 | 8 | ||||||
Estimated benefit payments: | ||||||||
2006 | 18 | 10 | ||||||
2007 | 18 | 9 | ||||||
2008 | 19 | 10 | ||||||
2009 | 19 | 11 | ||||||
2010 | 21 | 11 | ||||||
2011 and thereafter | 110 | 61 |
• | Long-Term Debt |
Year | (In millions of€) | |||
2006 | 292 | |||
2007 | 148 | |||
2008 | 669 | |||
2009 | 60 | |||
2010 | 63 | |||
Thereafter | 1,921 | |||
Subtotal | 3,153 | |||
Less: Current maturities | (292 | ) | ||
2,861 | ||||
• | Employees Stock Option Plans |
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2005 | 2004 | |||||||
Net earnings — U.S. GAAP | ||||||||
Net income (loss) as reported | 395 | 346 | ||||||
Add: Stock-based employee compensation expense, net of tax, included in reported net income (loss) | 25 | — | ||||||
Deduct: Stock-based compensation expense determined under fair value method for all awards, net of tax | (17 | ) | (15 | ) | ||||
Pro forma net income (loss) | 403 | 331 | ||||||
Basic earnings per common share | ||||||||
As reported | € | 2.16 | € | 1.90 | ||||
Pro forma | € | 2.20 | € | 1.81 | ||||
Diluted earnings per common share | ||||||||
As reported | € | 1.63 | € | 1.51 | ||||
Pro forma | € | 1.66 | € | 1.45 | ||||
• | Income Taxes |
December 31, | ||||||||
2005 | 2004 | |||||||
(In millions of | ||||||||
euros) | ||||||||
Net income before taxes and minority interests: | ||||||||
France | 40 | (88 | ) | |||||
Foreign | 531 | 306 | ||||||
Total | 571 | 218 | ||||||
Income tax expense: | ||||||||
France | 15 | (199 | ) | |||||
Foreign | (172 | ) | 113 | |||||
Total | (157 | ) | (86 | ) | ||||
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• | Earnings Per Share |
2005 | 2004 | |||||||
(In millions | ||||||||
except per share | ||||||||
data) | ||||||||
Numerator: | ||||||||
Earnings from continuing operations (U.S. GAAP) | € | 395 | € | 346 | ||||
Earnings available to shareholders — for basic earnings per share | € | 395 | € | 346 | ||||
Earnings from continuing operations (U.S. GAAP) | € | 395 | € | 346 | ||||
After-tax saving of OCEANEs and ORANEs interest if converted | € | 11 | € | 34 | ||||
Earnings available to shareholders — for diluted earnings per share | € | 406 | € | 380 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share — weighted-average shares | 183 | 182 | ||||||
Potential dilutive common shares — employee stock options | 9 | 1 | ||||||
Potential dilutive common shares — OCEANEs | 30 | 40 | ||||||
Potential dilutive common shares — ORANEs | 28 | 28 | ||||||
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions | 249 | 251 | ||||||
Basic earnings available to shareholders per common share | € | 2.16 | € | 1.90 | ||||
Earnings available to shareholders per common share — assuming dilution | € | 1.63 | € | 1.51 | ||||
F-94
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• | Leases |
Operating Sublease | Operating Leases, | |||||||||||||||
Years Ending December 31, | Capital Leases | Operating Leases | Income | Net | ||||||||||||
(In millions of euros) | ||||||||||||||||
2006 | 10 | 290 | (10 | ) | 280 | |||||||||||
2007 | 10 | 199 | (10 | ) | 189 | |||||||||||
2008 | 10 | 184 | (9 | ) | 175 | |||||||||||
2009 | 10 | 160 | (8 | ) | 152 | |||||||||||
20010 | 11 | 133 | (7 | ) | 126 | |||||||||||
Thereafter | 294 | 343 | (14 | ) | 329 | |||||||||||
Total minimum lease payments | 345 | 1,309 | (58 | ) | 1,251 | |||||||||||
Less: amount representing interest | (233 | ) | ||||||||||||||
Total obligation under capital leases | 112 | |||||||||||||||
Less: current portion | (10 | ) | ||||||||||||||
Long-term portion | 102 | |||||||||||||||
• | Segment Information |
• | Subsequent Events |
• | New Accounting Pronouncements |
F-95
Table of Contents
F-96
Table of Contents
Exhibit | ||||
Number | Description | |||
1 | Statuts (by-laws) of Publicis Groupe S.A. (unofficial English translation) (incorporated by reference from Exhibit 1 to the Annual Report of Publicis Groupe S.A. on Form 20-F for the fiscal year ended December 31, 2001). | |||
2 | We agree to furnish a copy of an English translation of any instrument defining the rights of holders of our long term indebtedness to the SEC upon its request. | |||
4.1 | Strategic Alliance Agreement, dated as of November 30, 2003, by and between Publicis Groupe S.A. and Dentsu Inc. (incorporated by reference from Exhibit 99.3 to the Schedule 13D/A filed by Dentsu Inc. on December 5, 2003). | |||
4.2 | Shareholders’ Agreement, dated as of November 30, 2003, by and between Publicis Groupe S.A. and Dentsu Inc. (incorporated by reference from Exhibit 99.4 to the Schedule 13D/A filed by Dentsu Inc. on December 5, 2003). | |||
4.3 | First Amendment to Shareholders’ Agreement, dated as of September 24, 2004, by and between Publicis Groupe S.A. and Dentsu Inc. (incorporated by reference from Exhibit 99.11 to the Schedule 13D/A filed by Dentsu Inc. on October 7, 2004). | |||
4.4 | Shareholders’ Agreement, dated as of November 30, 2003, by and between Elisabeth Badinter and Dentsu Inc. (incorporated by reference from Exhibit 99.5 to the Schedule 13D/A filed by Dentsu Inc. on December 5, 2003). | |||
4.5 | First Amendment to Shareholders’ Agreement, dated as of September 24, 2004, by and between Elisabeth Badinter and Dentsu Inc. (incorporated by reference from Exhibit 99.10 to the Schedule 13D/A filed by Dentsu Inc. on October 7, 2004). | |||
4.6 | CEO Employment Agreement, dated as of January 1, 2001, among Roger A. Haupt, Bcom3 Group, Inc., Leo Burnett Worldwide, Inc., and Leo Burnett USA, Inc. (“Haupt Employment Agreement”) (incorporated by reference from Exhibit 10.5 to the report on Form 10 of Bcom3 Group, Inc. filed on April 30, 2001). | |||
4.7 | Amendment to Haupt Employment Agreement dated as of March 26, 2003 (incorporated by reference from Exhibit 4.5 to the Annual Report of Publicis Groupe S.A. on Form 20-F for the fiscal year ended December 31, 2003). | |||
4.8 | Agreement, dated as of November 3, 2005, by and between Saatchi & Saatchi North America, Inc. and Kevin Roberts (incorporated by reference from Exhibit 4.8 to the Annual Report of Publicis Groupe S.A. on Form 20-F/A for the fiscal year ended December 31, 2004). | |||
4.9 | Agreement, dated as of November 3, 2005, by and among Saatchi & Saatchi North America, Inc., Saatchi & Saatchi Limited and Red Rose Limited (incorporated by reference from Exhibit 4.9 to the Annual Report of Publicis Groupe S.A. on Form 20-F/A for the fiscal year ended December 31, 2004). | |||
4.10 | Annuity Agreement, dated as of November 3, 2005, by and among Saatchi & Saatchi North America, Inc. and Kevin Roberts (incorporated by reference from Exhibit 4.10 to the Annual Report of Publicis Groupe S.A. on Form 20-F/A for the fiscal year ended December 31, 2004). | |||
4.11 | Employment Agreement, dated as of September 8, 2002, by and between Saatchi & Saatchi North America, Inc. and Robert L. Seelert (incorporated by reference from Exhibit 4.5 to the Annual Report of Publicis Groupe S.A. on Form 20-F for the fiscal year ended December 31, 2003). | |||
4.12 | Employment Agreement, dated as of July 1, 2004, by and among Jack Klues, Publicis Groupe S.A. and Starcom Worldwide division of Leo Burnett USA, Inc. (incorporated by reference from Exhibit 4.11 to the Annual Report of Publicis S.A. on Form 20-F for the fiscal year ended December 31, 2004). |
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Exhibit | ||||
Number | Description | |||
4.13 | Executive Consulting Agreement, dated as of December 21, 2004, by and between Leo Burnett Worldwide, Inc. and Roger Haupt (incorporated by reference from Exhibit 4.12 to the Annual Report of Publicis S.A. on Form 20-F for the fiscal year ended December 31, 2004). | |||
4.14 | Consulting Services Agreement, dated as of November 8, 2004, by and between Publicis Groupe S.A. and Roger A. Haupt (incorporated by reference from Exhibit 4.13 to the Annual Report of Publicis S.A. on Form 20-F for the fiscal year ended December 31, 2004). | |||
4.15 | By-Laws (statuts) of the Societe en Participation by and between Elisabeth Badinter and Dentsu Inc., adopted September 24, 2004 (unofficial English translation) (incorporated by reference from Exhibit 99.9 to the Schedule 13D/A filed by Dentsu Inc. on October 7, 2004). | |||
8 | List of Subsidiaries. See note 33 to our financial statements. | |||
11 | Code of Ethics (incorporated by reference from Exhibit 11 to the Annual Report of Publicis S.A. on Form 20-F for the fiscal year ended December 31, 2004). | |||
12.1 | Certification by Maurice Lévy, Chairman of the Management Board and Chief Executive Officer, required by Section 302 of the Sarbanes-Oxley Act of 2002. | |||
12.2 | Certification by Jean-Michel Etienne, Chief Financial Officer, required by Section 302 of the Sarbanes-Oxley Act of 2002. | |||
13.1 | Certification by Maurice Lévy, Chairman of the Management Board and Chief Executive Officer, and Jean-Michel Etienne, Chief Financial Officer, required by Section 906 of the Sarbanes-Oxley Act of 2002. | |||
15.1 | Report of the Supervisory Board Chairman on the Preparation and Organization of the Supervisory Board Work and the International Control Procedures (English translation). |
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Publicis Groupe S.A. |
By: | /s/ Maurice Lévy |
______________________________________ Name: Maurice Lévy | |
Title: Chief Executive Officer and | |
Chairman of the Management Board |