Universal Registration Document 2022

Publicis Health LLC – Contingent Liability

On May 6, 2021, the Attorney General for the Commonwealth of Massachusetts filed a lawsuit against Publicis Health, LLC, a subsidiary of Publicis Groupe, in connection with the work that that agency and its predecessor agencies did for Purdue Pharma from 2010 to 2018 related to the marketing of opioids. The Attorney General claims that Publicis violated the Massachusetts consumer protection statute and created a public nuisance by participating in Purdue Pharma’s efforts to market and sell opioids. In August 2022, Publicis Health, LLC has likewise been named as a code fendant in several lawsuits, centralized in a multidistrict litigation proceeding in the United States District Court for the Northern District of California, filed by tribes and local governments concerning work that Publicis Health, LLC and its predecessor agencies performed for Purdue Pharma related to the marketing of opioids. Publicis considers these lawsuits, and the lawsuit filed by the Massachusetts Attorney General, to be unfounded.

On November 3, 2022, the Attorneys General of nine states (California, Colorado, Connecticut, Idaho, Oregon, New York, North Carolina, Tennessee, and Vermont) advised that they considered Publicis Health, LLC to have legal exposure related to its work for opioid manufacturers, including Purdue Pharma. Publicis has engaged in discussions with these Attorneys General. Publicis does not know how these discussions may evolve and continues to believe that any claims that may be brought would be unfounded.

Note 22 Pensions and other long-term benefits

Defined benefit pension plans

The Groupe has obligations for a number of defined benefit pension plans, mainly split between:

• pension funds (67% of the Groupe’s obligations): these are rights to which employees have earned entitlement, with external pre-funding requirements predominantly in the US and the UK;
• other mandatory and statutory pension schemes, such as retirement indemnities (30% of the Groupe’s obligations), particularly in France: rights have not vested so payment is uncertain and notably linked to employees still being with the Company upon retirement;
• medical coverage plans for retirees (3% of the Groupe’s obligations) consisting of an effective liability vis-à-vis current pensioners and a provision for current workers (future pensioners), in particular in the US and the UK.

The largest plans are therefore the pension funds in the United Kingdom (28% of the Groupe’s obligations) and in the United States (26% of the Groupe’s obligations):

• in the United Kingdom, the Groupe’s obligations are managed through six pension funds administered by independent Boards of trustees. These independent Boards are made up of representatives of the Groupe, employees and retirees and in some instances an independent expert. These Boards are required by regulation to act in the best interests of plan beneficiaries, notably by ensuring that the pension funds are financially stable, as well as by monitoring their investment policy and management. All of the six pension funds are closed and frozen. All existing entitlements (based on salary and number of years of service to the Groupe) have been frozen: beneficiaries still working will not earn any further entitlement under these defined benefit plans. The pension fund obligations in the United Kingdom relate to retirees (80%), former employees with deferred entitlement who have not yet drawn down their pension entitlements (20%);
• in the United States, the Groupe’s obligations are basically limited to a closed and frozen pension fund. The obligations relate to former employees with deferred entitlement who have not yet drawn down their pension entitlements (32% of obligations), retirees (45% of obligations) and employees still working (23% of obligations).

Defined benefit pension plan valuations were carried out by independent experts. The main countries concerned are the United States, the United Kingdom, Germany, France, Switzerland, Belgium, the United Arab Emirates, Saudi Arabia, South Korea, the Philippines, Japan and India.

No material events occurred during the financial year to affect the value of the Groupe’s liabilities under these plans (significant plan change).

Surplus (deficit)

Publicis Groupe sets aside financial assets to cover these liabilities, primarily in the United Kingdom and the United States, in order to comply with its legal and/or contractual obligations and to limit its exposure to an increase in these liabilities (interest and inflation rate volatility, longer life expectancy, etc.).

The policy to cover the Groupe’s liabilities is based on regular asset-liability management reviews to ensure optimal asset allocation, designed both to limit exposure to market risks by diversifying asset classes on the basis of their risk profile and to better reflect the payment of benefits to beneficiaries, having regard to plan maturity. These reviews are performed by independent advisers and submitted to the Trustees for approval. Investments are made in compliance with legal constraints and the criteria governing the deductibility of such covering assets in each country. Funding requirements are generally determined on a plan-by-plan basis and as a result a surplus of assets in over funded plans cannot be used to cover underfunded plans.