| Optimal ratio post-IFRS 16 | 12/31/12021 | 12/31/2020 | |
|---|---|---|---|
| (Average net financial debt + average lease liabilities) / operating margin before depreciation and amortization | (Average net financial debt + average lease liabilities) / operating margin before depreciation and amortization Optimal ratio post-IFRS16 < 2.2 |
(Average net financial debt + average lease liabilities) / operating margin before depreciation and amortization 12/31/120211.6 |
(Average net financial debt + average lease liabilities) / operating margin before depreciation and amortization 12/31/2020 2.6 |
| (Net financial debt + lease liabilities) / equity | (Net financial debt + lease liabilities) / equity Optimal ratio post-IFRS16 < 0.80 |
(Net financial debt + lease liabilities) / equity 12/31/120210.25 |
(Net financial debt + lease liabilities) / equity 12/31/2020 0.41 |
| Interest coverage: operating margin before depreciation and amortization / (cost of net financial debt + interest on lease liabilities) | Interest coverage: operating margin before depreciation and amortization / (cost of net financial debt + interest on lease liabilities) Optimal ratio post-IFRS16 > 7 |
Interest coverage: operating margin before depreciation and amortization / (cost of net financial debt + interest on lease liabilities) 12/31/1202115 |
Interest coverage: operating margin before depreciation and amortization / (cost of net financial debt + interest on lease liabilities) 12/31/2020 11 |
In order to manage its liquidity risk, Publicis has substantial cash and cash equivalents amounting to euro 3,659 million and confirmed unused credit lines amounting to euro 2,244 million as of December 31, 2021. The main component of these credit lines is a multi-currency syndicated facility in the amount of euro 2,000 million, maturing in 2024. This credit facility has been renewed until 2026 up to euro 1,579 million.
These immediately available or almost-immediately available amounts enable the Groupe to meet its general financing requirements, as well as pay its financial debt maturing in less than one year (including minority interest buyout commitments).
They only include standard credit default event clauses (liquidation, cessation of payment, default on the debt itself or on the repayment of another debt above a given threshold) and are generally applicable above a threshold of euro 25 million.
The Groupe has not established any credit derivatives to date.
Groupe cash management continued to benefit from the introduction of local centralized cash-pooling centers in the Groupe’s main markets (domestic cash poolings). Since 2006, an international cash pooling structure has been implemented with the goal of pooling all cash for the Groupe as a whole.
Two financial companies established in Dublin in 2014 were added to the Groupe structure to manage financial transactions and the short-term investing of subsidiaries’ liquidity. In 2017, one of these two companies, MMS Multi Euro Services DAC, became the lynchpin of the centralization of international cash pooling for the entire Groupe. The other company, MMS Ireland DAC, whose functional currency is the dollar, became the lynchpin of the centralization of cash pooling for most of the Groupe’s US entities.
It bears noting that the Groupe’s cash resources are, for the most part, centralized in Ireland. Cash resources not centralized in Ireland are, for the most part, held by subsidiaries in countries where funds can be freely transferred and centralized.
On October 16, 2019, S&P downgraded Publicis’ rating from BBB+ to BBB with a stable outlook. There was no new element concerning the rating of this agency during the 2021 fiscal year.
On May 5, 2021, Moody’s confirmed the Baa2 rating, but changed the outlook from negative to neutral.
See also Notes 23 and 29 to the consolidated financial statements (Section 6.6 “Notes to the consolidated financial statements”).
As of December 31, 2021, and at the date of the closing of accounts, there were no rating triggers or financial covenants for short-term bank credit lines, syndicated loans, confirmed medium-term bilateral bank credit lines or bond debt likely to restrict the Groupe’s liquidity.
There are no legal or economic restrictions likely to limit or significantly restrict any transfers of funds to the parent company in the near future.
Given its cash position and its confirmed unused credit lines amounting to euro 5,903 million at December 31, 2021, the Groupe has the necessary liquidity to meet its operating requirements and investment plan over the next 12 months.
