MUMBAI: Publicis Groupe has been awarded favourable investment-grade ratings by Standard & Poor's and also by Moody's, which indicate the Group's stable outlook.
These ratings are a new milestone for the Group, allowing it to further strengthen its financial structure. Publicis Groupe had announced in 2003 that it would seek investment ratings from the two leading international agencies, and in 2005 began the formal process of obtaining the ratings.
Publicis Groupe chairman and CEO Maurice Lévy said, "These ratings are an important step forward for our Group, demonstrating the two agencies’ recognition of the quality of our balance-sheet structure and of our management. This is also further confirmation of Publicis Groupe's stature as a Top Tier group. As was the case with our entry in the CAC 40 index in 2004, these investment-grade ratings entail new duties regarding financial policies. We will continue to tighten financial discipline at all levels, a discipline that has always been a foundation of our strength."
Publicis Groupe chief financial officer Jean-Michel Etienne added, "This success rewards years of unstinting efforts since the acquisition of Bcom3 to improve our financial structures and to optimise our financial and treasury management. While we now have additional financial leeway, we are also aware that our new status entails new obligations."
The net new business booked in 2005 should be close to $10 billion, maintaining Publicis Groupe's number-one position over the year as a whole. The group confirmed its target of organic growth exceeding six per cent for 2005 as a whole, with an improvement in operating margins.
The outlook for 2006 is very positive, considering both the potential of new business and some improvement in the European business environment also favoured to some extent by the Football World Cup in Germany.
Lévy concludes, "We look to 2006 with confidence in the conviction that our group is fully equipped to meet all of advertisers’ needs. Our holistic approach to communications allows us to make the most of shifts in marketing budgets from one media to another."
According to the targets for growth and operating margin confirmed under the International Financial Reporting Standard (IFRS), while the Publicis Groupe does not publish projections, but it reported on progress in reaching the targets it has set itself.
A company statement said that the ambitious goal of a 17 per cent operating margin for 2008 announced on 9 December, 2004 under French GAAP (Generally Accepted Accounting Principles) is clearly within reach. Under IFRS, the target is now 16.7 per cent for 2008.
