Universal Registration Document 2025

2/ Valuation of goodwill

(Notes 1.3 « Goodwill », 7 « Depreciation, amortization and impairment loss » and 12 « Goodwill » to the consolidated financial statements)

(Notes 1.3 « Goodwill », 7 « Depreciation, amortization and impairment loss » and 12 « Goodwill » to the consolidated financial statements)
Key audit point	The business development of Publicis Groupe includes external growth transactions which may give rise to the recognition of goodwill in the balance sheet. As of December 31, 2025, net goodwill amounts to euro 13 293 million in the consolidated balance sheet of Publicis Groupe SA. Goodwill are subject to impairment tests at least once a year. An impairment loss is recognized if the recoverable amount becomes lower than the carrying amount, the recoverable amount being the higher between fair value (determined by applying market multiples), net of disposal costs, and value in use (determined from discounted future cash flows). The valuation of the recoverable amount of goodwill involves the use of several estimates mainly based on management judgment, in particular with regards to: the assessment of the competitive, economic and financial environment in the countries where the Groupe operates, the market multiples retained or the Group’s ability to generate operating cash flows as a result of strategic plans, with the amount of revenue and operating margin, and the determination of discount rates and long-term growth rates. We considered valuation of goodwill as a key audit matter given their significant amount in the consolidated financial statements and due to the sensitivity of certain assumptions retained by management to determine their recoverable amount.
Our audit response	We obtained an understanding of the procedures and key controls set up by management to perform the impairment tests and notably for the determination of the cash flows used to determine the recoverable amounts. In order to assess the reliability of the business plan used to determine the recoverable amounts, we have: compared the five-year financial projections (2026-2030) used for impairment testing with the previous pluriannual financial projections and with the actual results for the fiscal years concerned; compared the main assumptions used in the five-year financial projections with the explanations obtained through interviews with the independent expert engaged by Publicis Groupe SA for impairment tests’ purpose and with the financial managers of the Groupe; compared the main assumptions used by Publicis Groupe SA’s management on revenue and operating margin with external data; verified the consistency of the future cash flow estimates with the main assumptions made, derived from the five-year financial projections (2026-2030) approved by financial management, of which the year 2026 which is based on the annual budget presented to the Board of Directors; examined the sensitivity analyses performed by the independent expert and performed our own sensitivity analyses on the key assumptions to assess the possible impacts of these assumptions on the conclusions of the impairment tests. We involved our valuation experts in order to: assess the methods used to determine the discount and long-term growth rates, compare these rates with market data or external sources and re-compute these rates using our own data sources; support the level of market multiples retained, with our own data sources, when the recoverable amount is determined using the market multiples approach; test the mathematical accuracy of the models. We assessed the appropriateness of the information related to the valuation of goodwill disclosed in note 7 to the consolidated financial statements, which includes the key assumptions used to determine the recoverable amounts.