9. Risks related to artificial intelligence
Description of the risk
Artificial intelligence (AI) is rapidly evolving and is increasingly being integrated into the Groupe’s service offerings and its operations. It raises new challenges in terms of the performance of the services offered to clients, as well as in terms of competitiveness and compliance. Should the Groupe fail to deliver the highest quality of service to its clients within acceptable time frames and on adequate scale, it could have adverse effects on its financial position and results. In addition, the difficulty of monetizing the gains made by AI could negatively impact the Groupe’s financial performance.
The inappropriate or harmful use of AI could also lead to a loss of trust among stakeholders, including clients, consumers and employees.
Finally, the regulatory framework is being strengthened around AI, with the introduction of specific laws and regulations in several countries. In the European Union, the Artificial Intelligence Act came into force in 2024 and will be gradually implemented until 2027. Similar regulations were also enforced in Latin America and certain US states. This regulatory change requires the Groupe to constantly adapt to ensure its compliance and avoid potential sanctions.
Risk management
Over the last ten years, the Groupe has invested euro 12 billion in data, technology and AI. The Groupe planned to invest an additional euro 300 million in its AI strategy over three years, including euro 100 million already committed for 2024.
With the arrival of generative artificial intelligence in 2023, all Groupe employees had access to various AI tools in Marcel to enable them to experiment and develop their skills in a secure environment.
CoreAI is Publicis Groupe’s artificial intelligence platform, designed to unify and activate the Groupe’s proprietary data in order to transform AI into marketing intelligence to serve the growth of its clients. CoreAI enables each of the Groupe’s business lines to maximize the use of AI by providing rigorous data analytics for communication strategies, optimized media buying plans to accelerate sales, personalized content at scale, software and digital products which can be deployed rapidly.
The Groupe has set up an operational governance specific to AI, integrating client expectations with those of the operational needs of the various business lines.
At the same time, the uses of AI were framed with Guidelines (Generative AI Acceptable Use Guidelines and AI Legal Guidelines). These were circulated to all employees, in order to address important topics, such as the verification of information on the models used to train AIs, on the protection of personal data, on the respect of intellectual property... On Marcel, a dedicated section called PL.AI was set up with 3,000 training modules. The Groupe rolled out mandatory training at the end of 2024 on Generative AI Ethics and Responsible Use.
10. Groupe’s liquidity and financial rating
Description of the risk
The rating agencies Moody’s and Standard & Poor’s confirmed Groupe’s credit ratings in 2024 (respectively Baa1 and BBB+). 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 several times its 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 addition, a deterioration in customer payment terms could affect the Groupe’s available cash.
The increase in interest rates may lead to an increase in the cost of borrowing, which could have a negative impact on its profitability and its ability to make future investments.
Risk management
The Groupe mainly uses leading international banks (core banks).
As of December 31, 2024, the Groupe had liquid assets, calculated as the sum of cash and undrawn confirmed credit lines, at the highest level in its industry.
Groupe cash management continued to benefit from the introduction of local centralized cash pooling centers in the Groupe’s main markets (domestic cash poolings). Two financial companies established in Dublin since 2014 continue to strengthen the Groupe’s structure to manage financing transactions and the short-term investing of subsidiaries’ liquidity. Since 2017, one of these two companies, MMS Multi Euro Services DAC, has been 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 to centralize cash pooling for most of the Groupe’s US entities.