Universal Registration Document 2022

The Groupe’s development strategy through acquisitions and minority investments may create risks.

Part of the Groupe’s strategy aims at enriching its range of services around advertising, communication, consulting, data, digital transformation and commerce and at developing its operations in high-growth markets. In this context, the identification of acquisition targets may prove tricky and the assessment of the risks associated with an acquisition or equity investment may be incorrect. Sellers may also at times fail to divulge certain risks. The changing and unpredictable regulatory frameworks of certain emerging markets (see Section 2.2.4) and certain local practices in these regions constitute another source of acquisition-related risks. In addition, acquisitions may be concluded on terms that are less favorable than anticipated, and/or the newly acquired companies may either fail to be successfully integrated into Publicis’ existing operations or fail to generate the synergies or other benefits that were expected. Such events could have adverse effects on the Groupe.

A description of the Groupe’s main acquisitions during 2022 appears in Section 1.4.1. (See also Note 3 (Section 6.6) to the consolidated financial statements “Changes to consolidation scope”).

Goodwill from acquisitions and intangible assets (trademarks, client relationships), recorded on the Groupe’s balance sheet for acquired companies may be subject to impairment.

Large sums have been recognized on the Groupe’s balance sheet at December 31, 2022 (with euro 12,546 million in goodwill and euro 1,247 million in intangible assets). Given the nature of its business, the Groupe’s most important assets are, generally, intangible, and are recorded as such. Each year, the the Groupe carries out an assessment of goodwill and intangible assets so as to determine whether they should be impaired. The hypotheses made in order to estimate the forecasted earnings and cash flows during these reassessments may not be confirmed by subsequent actual results. If the Groupe were to record any such impairment, the loss could affect the Groupe’s results and financial position. Analysis of goodwill and intangible assets recorded on the Groupe’s balance sheet is detailed in Notes 11 and 12 to the consolidated financial statements (Section 6.6).

The Groupe may be named as defendant or co-defendant in litigation brought against its clients by third parties, its clients’ competitors, governmental or regulatory bodies, or consumer associations. These actions could, in particular, relate to the following complaints:

• the advertising claims used to promote the products or services of these clients are false, deceptive or misleading;
• the products of these clients are defective or could cause harm to others;
• marketing, communications, or advertising materials created for its clients infringe the intellectual property rights of third parties; client-agency contracts generally require the agency to indemnify the client against claims for infringement of intellectual or industrial property rights.

Any damages and legal fees arising from such actions may have a negative impact on the results of the Groupe. Moreover, Publicis’ reputation could be negatively affected by such allegations.

The Groupe may face an increased reputation risk associated with working for clients perceived to be harmful to the environment.

During the normal course of its business, the Groupe may also receive requests for information from the justice or administrative authorities as part of inquiries into business practices in its industry.

The Groupe is subject to strict anti-corruption regulations. As the Groupe operates in a number of countries where the risk of corruption has been considered high, a breach of these regulations (including due to a compliance failure by a partner) could occur despite the Groupe’s anti-bribery and anti-corruption program. The Company has no knowledge of any governmental, legal or arbitration proceedings, whether pending or threatened, liable to have or having had in the last 12 months, a significant effect on the financial position or profitability of the Company and/or the Groupe, other than those mentioned in Note 21 to the consolidated financial statements (Section 6.6).

Since 2005, Publicis Groupe SA has been publicly rated. Its rating is BBB, with a stable outlook, for Standard & Poor’s, and Baa2, with a stable outlook, for Moody’s Investors Service. A financial rating downgrade could adversely affect the Groupe’s ability to raise funds and result in higher interest rates for future borrowings.

The Groupe is exposed to a liquidity risk when its incoming payments, which represent a multiple of revenue, no longer cover its outgoing payments, and at the same time its ability to raise new financial resources has been exhausted or is insufficient.

In a context of rising interest rates that could weaken certain banks, the Groupe mainly uses leading international banks (core banks).