Net revenue
Net revenue is calculated as revenue less pass-through costs which are the amounts paid to external suppliers engaged to perform a project and charged directly to clients. Whether the Group acts as “Agent” or “Principal”, the Group incurs third party
costs on behalf of clients, directly re-invoiced to the clients. These costs mainly relate to production and media activities, as well as out-of-pocket expenses (especially travel costs) and are recorded into operational costs. As these items can
be re-invoiced to clients, they are not included in the scope of assessment of operations, then the “net revenue” indicator used to measure the Group’s operational performance excludes the re-invoicing of such costs.
Publicis Groupe share subscription or purchase option plans
The fair value of the options granted is recognized in employee benefits expense over the vesting period of the options. This is determined by an independent expert, generally using the Black-Scholes model. By way of exception, where the plan contains
market objectives, the Monte-Carlo method is used. For plans containing non-market performance objectives, the Group evaluates the probability that the objectives will be achieved and takes account of this estimate in its calculation of the number
of shares to be delivered.
Publicis Groupe free share plans
The fair value of the free shares granted is recognized in employee benefits expense over the vesting period of the rights. This value is determined by an independent expert and is equal to the market price per share on the date of the award, adjusted
to reflect the expected loss of dividend(s) during the vesting period. By way of exception, where the plan contains market objectives, the Monte-Carlo method is used. For plans containing non-market performance objectives, the Group evaluates the
probability that the objectives will be achieved and takes account of this estimate in its calculation of the number of shares to be delivered.
Non-current income and expenses
In order to facilitate the analysis of the Group’s operational performance, Publicis records exceptional income and expenses under “Non-current income and expenses”. This line item mainly includes gains and losses on the disposal of assets.
Operating margin before depreciation & amortization
The operating margin is equal to revenue after deducting personnel expenses and other operating expenses (excluding other non-current income and expenses as defined above).
Operating margin
The operating margin is equal to revenue after deducting personnel expenses, other operating expenses (excluding other non-current income and expenses described above) and depreciation and amortization expense (excluding intangibles from acquisitions).
The operating margin, which represents operating income expressed as a percentage of revenue, is an indicator used by the Group to measure the performance of cash-generating units and of the Group as a whole.
Cost of net financial debt and other financial income and expenses
The cost of net financial debt includes financial expenses on borrowings and interest income on cash and cash equivalents. Other financial income and expenses mainly include interest expenses on lease liabilities, the effects of discounting long-term
provisions for vacant properties and pension provisions (net of return on plan assets), the effect of revaluation of earn-out payments on acquisitions, changes in the fair value of financial assets and foreign exchange gains and losses.
