REGISTRATION DOCUMENT 2016 Annual Financial Report Contents Message from the Chairperson 2 4 CONSOLIDATED FINANCIAL Message from the Chairman 4 STATEMENTS – YEAR 2016 147 Publicis: 90 years of history 8 4.1 Consolidated income statement 148 Strategy 9 4.2 Consolidated statement of Key fi gures 10 comprehensive income 149 4.3 Consolidated balance sheet 150 Talent 12 4.4 Consolidated statement of cash fl ows 151 Governance 13 4.5 Consolidated statement of changes in equity 152 Glossary and Defi nitions 14 4.6 Notes to the consolidated fi nancial statements 154 4.7 Statutory auditors’ report on the 1 PRESENTATION consolidated fi nancial statements 209 OF THE GROUP 15 1.1 Key fi gures 16 1.2 Group history 17 PARENT COMPANY FINANCIAL 5 STATEMENTS 2016 211 1.3 Organization chart 21 1.4 Activities and strategy 22 5.1 Income statement 212 1.5 Investments 30 5.2 Balance sheet at December 31 213 1.6 Major contracts 34 5.3 Statement of cash fl ows 215 1.7 Research and development 35 5.4 Notes to the fi nancial statements 1.8 Risk factors 37 of Publicis Groupe SA 216 5.5 Results of Publicis Groupe SA over the past fi ve years 234 5.6 Statutory auditors’ report on the fi nancial 2 GOVERNANCE statements 235 AND COMPENSATION 47 2.1 Governance of Publicis Groupe 48 2.2 Report on corporate COMPANY INFORMATION offi cers’ compensation 73 AND CAPITAL STRUCTURE 237 2.3 Related-party transactions 102 6 2.4 Corporate Social Responsibility (CSR) 108 6.1 Information about the Company 238 6.2 Ownership structure 241 6.3 Share capital 243 6.4 Stock market information 251 3 COMMENTARY ON THE FINANCIAL YEAR 133 3.1 Introduction 135 7 GENERAL 3.2 Organic growth 137 SHAREHOLDERS’ MEETING 255 3.3 Analysis of the consolidated results 138 3.4 Financial and cash position 141 3.5 Publicis Groupe SA (parent company of the Group) 144 ADDITIONAL INFORMATION 257 3.6 Dividend distribution policy 145 8 8.1 Documents on display 258 3.7 Outlook 146 8.2 Registration Document responsibility and declaration 259 8.3 Statutory auditors 260 8.4 Cross-reference table for the Registration Document 261 8.5 Cross-reference table for the annual fi nancial report 263 8.6 Cross-reference table for the management report 264 The elements of the Annual Financial Report are clearly identified in the table of contents using the pictogram 2016 REGISTRATION DOCUMENT ANNUAL FINANCIAL REPORT GROUP PROFILE Publicis Groupe is a world leader in the marketing, communication and digital transformation of businesses. Present throughout the value chain from consulting to creation and production, Publicis Groupe serves its clients through an interdisciplinary, unifi ed and fl uid organization that facilitates access to all its expertise worldwide. It focuses on four major solution hubs: Publicis Communications, Publicis Media, Publicis.Sapient and Publicis Health. Each of these four solution hubs operates on the Group’s main global markets and is supported by Publicis One on the other markets. Publicis One combines all of the Group’s agencies under one roof and offers our clients the full range of available services. The Group is present in more than 100 countries. This Registration Document was filed with the Autorité des marchés financiers (the French Financial Markets Authority, or AMF) on May 9, 2017, in accordance with article 212-13 of the AMF General Regulation. It may be used in the framework of a financial transaction only if supplemented by a Transaction Note certified by the AMF. This document has been prepared by the issuer and involves the liability of its signatories. Copies of the Registration Document are available from Publicis Groupe SA, 133, avenue des Champs-Élysées, 75008 Paris, and on the Publicis Groupe SA website: www.publicisgroupe.com and that of the AMF: www.amf-france.org. This english language version of the 2016 Registration Document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate presentation of the original. However, in all matters of interpretation, views or opinion expressed in the original language version of the document in French take precedence over the translation. This Registration Document contains all the elements of the annual financial report. PUBLICIS GROUPE SA - 2016 Registration Document 1 MESSAGE FROM THE CHAIRPERSON Message from the Chairperson Élisabeth Badinter Staying young at heart, curious, and with an appetite for One of these men, the founder, laid the foundations for life: this is undoubtedly the secret behind Publicis’ longevity. the methods of communication. The other, his successor, My father, Marcel Bleustein-Blanchet, was a strong believer extended the geographical scope of the business. They in this and he was passionate about growing our Groupe’s also shared the same ambition; to play an important role in brand. Publicis’ ability to stay current, together with its great changing the business landscape, both at that time and in strength and aptitude for self-renewal, have continuously the future. And so, they developed this small family business contributed to the outstanding success the Groupe has seen with a unique and special personality. When the Company thus far. expanded globally, it always remained true to its culture. Nine decades later, Publicis is still here, The trust and respect between these two men was the key to the same strong and innovative entity Publicis’ success. Nine decades later, it has always been, yet also completely Maurice Lévy’s era has been a fundamental part of the transformed. Publicis is still here, the same Groupe’s history. And when I look back on our journey, strong and innovative entity His achievements are nothing short of impressive: he has led I am proud to see that we have Publicis through major expansions and transformations, at a steadfastly kept to our founding it has always been, yet also rapid pace, and he has established new standards and a new values, and that these still apply today: stature for the Company. Under his leadership, our Groupe completely transformed. ethics, courage, loyalty and confidence has become the third largest in the world, increasing from in our talented employees, without 3,000 employees to 80,000. Revenue has grown fiftyfold and whom nothing would be possible. Our market capitalization by almost 100%. motivated teams, both today and in the past, their investment, creativity and boldness, are the keystone to the Groupe’s Maurice Lévy was able to tackle the digital revolution with vitality. I would like to take this opportunity to express our ease – well before the rest of the world – and ensured that sincere gratitude to them all. Publicis would become a world leader in this industry. Lastly, in 2016, his decisions have strengthened the Groupe’s 2017 is the start of a new chapter in the Publicis story, a 90- founding principles and its commitment to the economy of year adventure originally conceived of by two exceptional the future. men: Marcel Bleustein-Blanchet and Maurice Lévy, both of whom were driven by the same entrepreneurial spirit and the A man of ethics, with strong beliefs, Maurice Lévy is a same vision of the future. profound humanist and undoubtedly one of the world’s most influential people. On behalf of the Supervisory Board and myself, I would like to thank him for his unwavering devotion and commitment – for the past 46 years! – to a successful Publicis Groupe. 2 PUBLICIS GROUPE SA - 2016 Registration Document MESSAGE FROM THE CHAIRPERSON On May 31, 2017, Maurice Lévy’s term of office will come range of skills offered by the Directoire, which has recently to an end, following 30 years as Chairman of the Groupe’s welcomed the arrival of Steve King, CEO of Publicis Media. Directoire. Exemplary governance is part of what sets us apart, and it is And we were confident that his replacement would be essential that this be maintained. a current employee. Publicis has no shortage of high- The unconditional trust that has prevailed between Maurice performing, first-class individuals who are familiar with how Lévy and me over the past 20 years has undeniably our Groupe operates, its history and who share its values. contributed to Publicis’ success. It has enabled us to run the Maurice Lévy and I have spent much time pondering this Company efficiently, to hold discussions in a constructive and decision. Following the work carried out by the Appointments calm manner, and has facilitated the decision-making process. Committee and a rigorous selection process during which we In my opinion, it is vital that this fluidity continue to be part considered some exceedingly talented individuals, our final of our governance. decision was to appoint a bright young man by the name of Arthur Sadoun. For the past ten years or so, Arthur Sadoun has worked alongside Maurice Lévy, in an environment of shared trust. Arthur Sadoun possesses all of the skills required to take Within their profound mutual respect and close bond that the reins. In particular, he has a quality that is rare and has grown closer over the years, I have witnessed all of the invaluable in our business: a passion for client satisfaction. ingredients for success. He possesses a unique understanding of client needs and the challenges they face – including the transformation of their It is for this reason that I have Exemplary own economic models. suggested that Maurice Lévy take over from me as Chairman of the governance is part In addition to his professional and personal attributes, Arthur Supervisory Board.