The table below presents the Groupe's financial ratios for 2021 and 2022:
| 2022 | 2021 | |
|---|---|---|
| (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 20221.2 |
(Average net financial debt + average lease liabilities) / operating margin before depreciation and amortization 2021 1.6 |
| (Net financial debt + lease liabilities) / equity | (Net financial debt + lease liabilities) / equity 20220.20 |
(Net financial debt + lease liabilities) / equity 2021 0.25 |
| 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) 202227 |
Interest coverage: operating margin before depreciation and amortization / (cost of net financial debt + interest on lease liabilities) 2021 15 |
To address liquidity risk, Publicis holds both a substantial amount of cash (cash and cash equivalents) totaling euro 4,616 million as of December 31, 2022 and also undrawn confirmed credit lines representing a total of euro 2,000 million as of December 31, 2022 and corresponding to a multi-currency syndicated credit facility maturing in 2024. This credit facility has been renewed until 2026 up to euro 1,579 million.
These immediately or almost immediately available sums allow the Groupe to broadly meet its general funding requirements.
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) which 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 financing 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.
Publicis has a BBB rating with a stable outlook from the rating agency S&P Global, as well as a Baa2 rating with a stable outlook by Moody’s Investors Service. There were no developments in the ratings of these two agencies in financial year 2022.
See also Notes 23 and 29 to the consolidated financial statements (Section 6.6 “Notes to the consolidated financial statements”).
As of December 31, 2022, and at the closing date of the financial statements, 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.
The Groupe has established a group-wide policy for selecting authorized banks as counterparties for all its subsidiaries. This policy requires that deposits be made in authorized banks and that in general all banking services be provided exclusively by these banks. The list of authorized banks is reviewed periodically by the Groupe Treasury Department. Exceptions to this policy are handled centrally for the entire Groupe by the Treasury Office.
Given its cash position and its confirmed unused credit lines amounting to euro 6,616 million at December 31, 2022, the Groupe has the necessary liquidity to meet its operating requirements and investment plan.
