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2013 FIRST HALF RESULTS Friday, August 30, 2013
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INTRODUCTORY MATERS
2013 FIRST HALF RESULTS
Forward-Looking Information This document contains certain forward-looking statements which speak only as of the date on which they are made. Forward-looking statements relate to projections, anticipated events or trends, future plans and strategies, and reflect Havas’ current views about future events. They are therefore subject to inherent risks and uncertainties that may cause Havas’ actual results to differ materially from those expressed in any forward-looking statement. Factors that could cause actual results to differ materially from expected results include changes in the global economic environment or in the business environment, and in factors such as competition and market regulation. For more information regarding risk factors relevant to Havas, please see Havas’ filings with the Autorité des Marchés Financiers (documents in French) and, up to October 2006, with the U.S. Securities and Exchange Commission (documents in English only). Havas does not intend, and disclaims any duty or obligation, to update or revise any forward-looking statements contained in this document to reflect new information, future events or otherwise. Net New Business Net new business represents the estimated annual advertising budgets for new business wins (which includes new clients, clients retained after a competitive review, and new product or brand expansions for existing clients) less the estimated annual advertising budgets for lost accounts. Havas' management uses net new business as a measurement of the effectiveness of its client development and retention efforts. Net new business is not an accurate predictor of future revenues, since what constitutes new business or lost business is subject to differing judgments, the amounts associated with individual business wins and losses depend on estimated client budgets, clients may not spend as much as they budget, the timing of budgeted expenditures is uncertain, and the amount of budgeted expenditures that translate into revenues depends on the nature of the expenditures and the applicable fee structures. In addition, Havas' guidelines for determining the amount of new business wins and lost business may differ from those employed by other companies. The average net debt (quarterly, semi-annually and annually) is calculated as the difference between the structured gross debt under IFRS (OBSAAR, Eurobond, used credit lines, etc…) and the cash in bank and cash equivalents measured on a daily basis for the main countries integrated in the International cashpool; for the other countries, the average net debt taken into account is the monthly average net debt. The new definition excludes earn-out and buy-out obligations and includes blocked current accounts relating to employee profit-sharing.
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H1 2013 KEY FIGURES
• Income from Operations reached €109M in H1 2013 against €99M in H1 2012, increasing by +10%.
• Record Income from operations margin at 13.0% (vs 11.9% H1 2012) and operating margin was 12.0%
• Revenue:
€451M in Q2 2013, +1.7% in terms of organic growth
€837M in H1 2013, increasing by +1% and by +0.5% in terms of organic growth (at constant exchange rates and scope)
• Emerging markets represent 16% of total revenue
• Digital accounts for 25% of total revenue
• Net income, Group share of €58M in H1 2013, up 3% negatively impacted by the rise of corporate tax rates
• Earnings per share was 15 cents (€) in H1 2013 vs 13 cents (€) in H1 2012, up 15%
• Net debt of €372M as of June 30, 2013 vs €444M as of June 30, 2012. Average net debt (1)
was €239M in H1 2013 vs €80M in H1 2012
(1) Definition on page 2
2013 FIRST HALF RESULTS
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REBOUND OF ORGANIC GROWTH IN Q2 2013
Organic growth Q1 Q2 H1 2013 2013 2013
EUROPE -0.3% 0.8% 0.3% Of which
France 1.2% 3.3% 2.3% UK 0.7% 2.0% 1.4%
Rest of Europe -2.4% -2.1% -2.2%
NORTH AMERICA -3.9% 0.2% -1.8%
REST OF THE WORLD 5.1% 7.2% 6.2% Of which
Asia Pacific & Africa 1.0% -2.6% -0.9% Latin America 8.6% 15.1% 12.3%
TOTAL -0.9% 1.7% 0.5%
2013 FIRST HALF RESULTS
MAJOR WINS
2013 FIRST HALF RESULTS 5
KEY FACTS H1 2013 CREATIVE, MEDIA & DIGITAL INTEGRATED
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NEW HEADQUARTERS 200 HUDSON STREET NEW YORK
2013 FIRST HALF RESULTS
KEY FACTS H1 2013
7 2013 FIRST HALF RESULTS
ACQUISITIONS / START UPS
2006 H1 2013
9%
25%
DIGITAL SHARE IN REVENUE
2013 FIRST HALF RESULTS 8
KEY FACTS H1 2013 TALENT
Natasha Murray Managing
Director at Havas Media U.K.
Dorothy Gemmell
President Havas Life, New York, prev. WebMD
Andrew Benett Global President Havas Worldwide
Robert LePlae CEO Arnold Worldwide
Patti Clifford Chief Talent
Officer, Havas Creative
Dominique Delport Chairman Havas Media
France, Global Managing Director
Havas Media Group
Raphaël de Andreis
CEO Havas Media France
Elliot Seaborn Executive Director
Arnold
Carola Salvato GM of Havas Life
Italy
Matt Weiss CMO
Havas Worldwide
Darren Moran Executive
Creative Director Havas
Worldwide NY
Tim Maleeny Chief Strategy Officer Havas Worldwide NY
Agathe Bousquet
PDG Havas Worldwide Paris
Filip Nilsson, Executive Creative
Director BETC
KEY FACTS H1 2013 DIGITAL TALENT
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Angela Wei Chief Digital Officer Arnold prev. Time
Inc.
Matt Howell Global Chief Digital
Officer Havas Creative
Laura Maness Chief Growth Officer
Havas Worldwide US, prev. Propane
Studio
Brendan Tansey CEO, Socialistic
China prev. CEO
Wunderman UK
Corey Mitchell President of Arnold
Worldwide New York Former MRM And
TBWA
Drake Pusey VP, Dir. of Digital
Platforms Arnold prev. Isobar
Sean Lyons Global Chief Digital Officer
Havas Worldwide, prev. R/GA
Vin Farrell Global Chief Content
Officer Havas Worldwide
prev. R/GA
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SIGNIFICANT IMPROVEMENT OF OPERATING MARGINS
€M H1 12 Variance 2013/2012
Revenue 829 +1%
Income from operations 99 +10%
Income from operations margin 11.9%
Net income, Group share 56 +3%
in % of revenue 6.8%
H1 13
837
109
13.0%
58 6.9%
Operating income 93 +8%
Operating income margin 11.2%
100
12.0%
Compensation (510) +2%
Compensation in % of revenue 61.6%
(518)
62.0%
H1 11
765
95
12.4%
53 6.9%
85
11.1%
(471)
61.6%
Earnings per share (in €) 0.12 0.13 0.15 +15%
2013 FIRST HALF RESULTS
RECORD PROFITABILITY IN H1 2013 INCOME FROM OPERATIONS MARGIN: 13.0%
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H1 2009 H1 2013
13.0%
10.1%
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RESULTS & FINANCIAL STRUCTURE H1 2013
2013 FIRST HALF RESULTS
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CONSOLIDATED P&L
€M H1 12
Revenue 829 Compensation (510) Other expenses and income from operations (220) Income from operations 99 Other operating expenses and income (6) Operating income 93 Net financial expense (14)
Income of consolidated Co. Before tax 79
Income tax (21)
Net income of consolidated companies 58
Minority interests (2)
Net income, Group share 56
H1 13
837
(518) (210) 109
(9)
100
(13)
88
(25)
63
(5)
58
+1%
+10%
+8%
+8%
+7%
+3%
Variance 2013/2012
Headcount at end of period 15,540 15,720 +1%
2013 FIRST HALF RESULTS
COMPENSATION RATIO EVOLUTION
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€M H1 2012 H1 2013 Variance
Compensation 510 518 +2% o/w bonuses 12 15 +16% o/w severance 7 7
Free lance costs 25 20 -20%
Compensation incl. Free lance ex. severance 528 531 +1%
in % of revenue 63.7% 63.4%
Average headcounts 15,416 15,709 +2%
2013 FIRST HALF RESULTS
WATCHFUL MANAGEMENT OF OTHER EXPENSES FROM OPERATIONS
15
210
-4 -5
-3
+2
220
170
180
190
200
210
220
230
Autres charges op. S1 2012
Effet change Loyers Free lance Voyages, promotion, frais
de New Biz
Autres charges op. S1 2013
2013 FIRST HALF RESULTS
Others expenses form
op. H1 2012
Forex effect Leases Travel, promotion,
New Biz
Other expenses
form op. H1 2013
Free lance
€M H1 12+ H2 11
H1 13+ H2 12
Net income of consolidated companies + 131 + 139 Non cash items +37 +56
Cost of net debt +21 +23
Cash flow from operations + 189 + 218 Investments - 265 - 62**
Dividends - 53 - 54
Net proceeds from borrowings +12 -162
Financial interests and change in equity -280* +18
Change in WCR -8 -53
Forex effect +24 -12
Change in net cash position -381 -107
CASH FLOW STATEMENT OVER THE LAST 12 MONTHS
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* OPRA / OPAS effects = -€269M ** US headquarter move = -€14M
2013 FIRST HALF RESULTS
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CONSOLIDATED BALANCE SHEET AT 06/30/13
Total
€M
Assets 06/30/12 Liabilities and equity 06/30/12
Intangible and tangible assets
1,926 Consolidated equity 1,079
Net deferred tax 90 Provisions 110
WCR (309)* Net financial debt 444*
Total 1,707* 1,707*
06/30/13
1,933
81
(255)
1,759
06/30/13
1,162
121
372
1,759
104 74 Earn-out & buy-out
(*) Blocked current accounts relating to employee profit-sharing are included in the new definition of the net financial debt since December 31, 2012.
2013 FIRST HALF RESULTS
CLOSING AND AVERAGE NET DEBT
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-357
-266
-107
-34
41
-80
-239
-376
-292
-132
-92 -39
-444
-372
-450
-400
-350
-300
-250
-200
-150
-100
-50
0
50 S1 2007 S1 2008 S1 2009 S1 2010 S1 2011 S1 2012 S1 2013
Moyenne Clôture
Net debt of €372M as of 06/30/13 vs 444 M€ as of 06/30/12, Average net debt(1) of €239M in H1 2013 vs €80M in H1 2012
NB: On June 30,2013, net debt with the former definition would be €468M vs €510M on June 30, 2012
2013 FIRST HALF RESULTS
H1 2007 H1 2008 H1 2009 H1 2010 H1 2011 H1 2012 H1 2013
Average Closing
(1) Definition « average net debt » on page 2
LIQUIDITY AS OF 06/30/2013 (1) (M€)
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Undrawn mid-term committed credit lines 376 476 Undrawn 365 day committed credit lines 78 78 Cash and cash equivalents 299 398
Total of potential liquidity 753 952
Available uncommitted credit lines 194 194 Available commercial paper program 220 220 Total of financing resources 1,167 1,366
(1) €100m bond issue done on July 11, 2013 (5 years maturity) signature of a new €100m 5 years-committed credit line on August 28, 2013
Actual Proforma (1)
2013 FIRST HALF RESULTS
FINANCIAL RATIOS OVER THE LAST 12 MONTHS
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M€ 06/30/12 06/30/13
Net debt 444 372 Total equity 1,079 1,162 Gearing 0.41 0.32
Adjusted EBITDA (1) 263 291 Net debt / Adjusted EBITDA 1.7x 1.3x
Average net debt (2) 80 239 Average net debt/ Adjusted EBITDA 0.3x 0.8x
Financial result -30 -28 Adjusted EBITDA / Financial Result 8.7x 10.3x
(1) Adjusted EBITDA = income from operations plus intangible and tangible fixed assets depreciation and amortization, stock option charges and other compensation defined by IFRS 2
(2) Definition on page 2
2013 FIRST HALF RESULTS
2013 FIRST HALF RESULTS Friday, August 30, 2013