EX-99.3 4 dex993.htm INVESTOR PRESENTATION Investor Presentation
CLOSER TO THE FUTURE
December 20, 2006
Exhibit 99.3


1
Notice to Investors:
This
announcement
is
neither
an
offer
to
purchase
nor
a
solicitation
of
an
offer
to
sell
securities.
The
tender
offer
for
the
outstanding
shares
of
Digitas
Inc.
(“Digitas”)
common
stock
described
in
this
press
release
has
not
commenced.
At
the
time
the
offer
is
commenced
an
indirect,
wholly
owned
subsidiary
of
Publicis
will
file
a
tender
offer
statement
on
Schedule
TO
with
the
Securities
and
Exchange
Commission
and
Digitas
will
file
a
solicitation/recommendation
statement
on
Schedule
14D-9
with
respect
to
the
offer.
The
tender
offer
statement
(including
an
offer
to
purchase,
a
related
letter
of
transmittal
and
other
offer
documents)
and
the
solicitation/recommendation
statement
will
contain
important
information
that
should
be
read
carefully
before
any
decision
is
made
with
respect
to
the
tender
offer.
All
of
these
materials
will
be
sent
free
of
charge
to
all
stockholders
of
Digitas
upon
request
by
contacting
Digitas
Investor
Relations
at
617.867.1988
or
investors@digitasinc.com.
In
addition,
all
of
those
materials
(and
all
other
offer
documents
filed
with
the
SEC)
will
be
available
at
no
charge
on
the
SEC’s
Website:www.sec.gov.
Statements
in
this
document
regarding
the
proposed
acquisition
of
Digitas,
the
expected
timetable
for
completing
the
transaction,
future
financial
and
operating
results,
benefits
and
synergies
of
the
transaction,
future
opportunities
for
the
combined
company
and
any
other
statements
about
managements’
future
expectations,
beliefs,
goals,
plans
or
prospects
constitute
forward
looking
statements
the
meaning
of
the
Private
Securities
Litigation
Re-form
Act
of
1995
that
are
based
on
management’s
beliefs,
certain
assumptions
and
current
expectations.
Any
statements
that
are
not
statements
of
historical
fact
(including
statements
containing
the
words
“believes,”
“will,”
“plans,”
“anticipates,”
“expects”
and
similar
expressions)
should
also
be
considered
to
be
forward
looking
statements.
There
are
a
number
of
important
factors
that
could
cause
actual
results
or
events
to
differ
materially
from
those
indicated
by
such
forward
looking
statements,
including:
the
ability
to
satisfy
the
merger
agreement
conditions
and
consummate
the
transaction,
the
timing
of
consummation
of
the
transaction,
the
ability
of
Publicis
to
successfully
integrate
Digitas’
operations
and
employees;
the
ability
to
realize
anticipated
synergies
and
cost
savings;
and
the
other
factors
described
in
Publicis’
Annual
Report
on
Form
10-K
for
the
year
ended
December
31,
2005.
Publicis
disclaims
any
intention
or
obligation
to
update
any
forward
looking
statements
as
a
result
of
developments
occurring
after
the
date
of
this
document.


2
Publicis Groupe
launches friendly offer
to acquire Digitas
A $1.3 billion transaction


3
A leader in the digital
and interactive space
A 100% digital integrated
communication and marketing
services group
Digitas


4
Introduction
Digitas:
2006E Revenues of nearly $400 million
One of the most successful players in the interactive field
More than 2,000 additional talents
A world-class client portfolio
Strong and steady growth
A unique opportunity in the sector


5
Digitas,
headquartered in Boston, founded in 1980 and publicly
listed at the beginning of 2000, is the parent of three leading direct
and digital marketing agencies:
founded in 1980, direct marketing services,
CRM and e-CRM digital agency
founded in 1987, one of the very first
interactive agencies
founded in 1990, digital marketing services,
integrated marketing programs, specialized in
healthcare communications
Digitas
at a glance


6
More than 2,050 talents spread between Boston, Norwalk,
New York, Chicago, Philadelphia, San Francisco and London
Laura Lang
President
Digitas
LLC
Martin Reidy
President
Modem Media
David Kramer
CEO
MBC
Cella
Irvine
CAO
David Kenny
CEO
Management and talents
Digitas
Inc.


7
Top 20 clients


8
Digitas
Financial Highlights (in $ million)
Revenues and Growth (%)
EBITA and Margin (%)
A growing revenue base
And an operating margin of 10.7% in 2006
(2)
(1)
Source:
Thomson
Consensus
as
at
December
19
2006
(2)
EBITA
presented
post
restructuring
expenses
($2.4
million
in
2006E)
and
stock-based
compensation
($9.0
million
in
2006E)
209.5
251.6
340.5
390.0
na
20.1%
35.3%
14.5%
2003A
2004A
2005A
2006E(1)
17.6
31.2
40.3
41.7
8.4%
12.4%
11.8%
10.7%
2003A
2004A
2005A
2006E(1)


9
The digital communication market:
Size of the market in 2006:
$24 billion
Growth rate in 2007:
+28 %
Estimated size in 2009:
$43 billion
Investments in digital communication will represent:
In 2006:
6% of world advertising spending
In 2010:
10% of world advertising spending
Over
10% of advertising spending in the United States,
United Kingdom, Japan, Korea, Taiwan, Australia,
Canada, Israel, Norway, Sweden …
Why Digitas
?
Digital Communication: what is at stake?


10
Digital and interactive represent an increasing portion of advertisers’
communication plans
The role of the Internet and mobile communications in the
development of e-commerce and m-commerce
The leading role of digital marketing in certain sectors: financial
services, tourism, mail-order, leisure and transportation
The important role of digital in the automotive industry, healthcare,
new technologies, …
A fundamental and irreversible evolution
A significant growth driver for communication groups
A strong and comprehensive digital and
interactive offer has become vital
Why
Digitas ?


The Transaction


12
The Transaction
The deal
Publicis Groupe
launches a friendly offer to acquire 100% of
the shares of Digitas
Description of the offer:
Cash Tender Offer of $13.50 for each Digitas
share                     
Amount of the transaction:
$1,295 million (€981 million), taking into account the fully
diluted capital
Key Points


13
Publicis Group will launch a Two-step Cash Tender Offer for 100%
of Digitas
securities. This offer will be shortly filed with the U.S.
Securities and Exchange Commission
The commencement of the offer is expected to take place before
the end of December 2006 and the offer will remain open for 20
business days
If all conditions to the offer are satisfied, including the tender of a
majority of the fully diluted shares of Digitas, Publicis Groupe
will
purchase all of the shares tendered. The balance of the Digitas
shares would be acquired in one of two ways
If at least 90% of the outstanding shares are purchased in
the offer, a “short form merger”
would be completed in
February 2007
If more than 50% but less than 90% of the shares are
tendered into the offer, a shareholders meeting of Digitas
will be necessary and a “long form merger”
would be
completed late in the first quarter or early in the second
quarter of 2007
The Transaction
A 2-step process


The Strategic Rationale


15
Publicis Groupe
+
Digitas
=
A world leader in
digital marketing services
The Strategic Rationale


16
Today, digital and interactive is present in all of Publicis Groupe’s
activities (advertising networks, media agencies, healthcare
communications, direct marketing)
Technology is evolving and creating the need to have additional
entities 100% focused on the digital/interactive/mobile world
Several internal developments including the launch of Denuo
2006: more acquisitions contributing to the development of digital
expertise:
Solutions (India)
Betterway
(China)
Pôle
Nord
(France)
Moxie Interactive (USA)
The major step: Digitas
The Strategic Rationale
Publicis Groupe’s
digital strategy


17
To provide the most comprehensive digital offer in the most
important market in the world
To increase the share of marketing services in the overall revenue
mix: 34% of its revenues in SAMS with the Digitas
transaction,
compared to 28% currently, and share of digital
communication/CRM at nearly 15%
To benefit from the strongest growth opportunity in the most
promising segment of the coming years and to arm itself with a new
growth driver
To increase its human and creative capital with a branch entirely
dedicated to digital, making it even more attractive to new talents
To deepen and widen its global presence in this sector, by launching
Digitas
brands in key markets
The Strategic Rationale
The acquisition of Digitas
would enable
Publicis Groupe


18
A solid portfolio of clients, complementary to those of Publicis
Groupe
Reinforcing its position as global leader in healthcare
communications, a key sector for Publicis Groupe
with Medical
Broadcasting LLC
Technological and trade agreements with the most powerful search
engines in the world: Google, Yahoo! and MSN, three who represent
85% of the trade activity of key word searches
A unique combination of talents in the digital sector
The Strategic Rationale
Digitas, the best strategic opportunity for
Publicis Groupe


19
For Publicis Groupe
shareholders:
A price which compares favorably with multiples of Digitas’
peers
2.7x 2007E revenues
(1)
16.2x 2007E EBITDA
(1)
An accretive transaction on an EBITA per share (4% in 2007
and 6% in 2008) and accretive on a fully diluted EPS basis as
early as 2008
based on cautious cost synergies assumptions
before any revenue synergies resulting either from
internationalization of Digitas
services offering or from
cross fertilization of shared customer base between the
two groups
For Digitas
shareholders:
A price that offers a premium
of 23.5% compared to the closing price on Dec. 19, 2006
of
29.1% compared to the last 3 month average
The Strategic Rationale
A good transaction for both Publicis Groupe
and Digitas
shareholders
(1) Based
on Thomson Consensus 2007


20
Reinforcing the digital offer to Publicis Groupe
clients
Enriching Publicis Groupe’s
client portfolio
Activating Digitas’
capabilities on a global basis through Publicis
Groupe’s
various entities
The Strategic Rationale
Operational synergies


21
Media operations technology development to serve all Publicis media
agencies. Use of combined offerings to strengthen relationships with
major portals and online media companies such as Google, Yahoo!
and MSN
Digital production savings by building capabilities to serve website
and flash development across all Publicis Groupe
agencies
Cross-selling opportunities into each other’s bases and international
expansion opportunities for Digitas’
clients across Publicis Groupe’s
global networks
The Strategic Rationale
Organizational synergies


22
Creation of a center of recruitment expertise
Unique digital training programme developed by Digitas
and
applicable to all Groupe’s
entities
Mixing cultures and enriching talents, and new career opportunities
for all the employees in this field
The Strategic Rationale
Talent synergies


23
Public company costs (Compensation and related expenses,
insurance and professional fees)
Corporate infrastructure costs leveraging Publicis Groupe’s
shared
services such as finance, legal, and Information Technology
Potential real estate savings
The Strategic Rationale
Cost synergies


24
Publicis Groupe
after the transaction
Segmentation of revenue by activity
Before
After
SAMS 28%
Advertising
46%
Media 26%
SAMS 34%
Advertising
42%
Media 24%
After the transaction, Digital
and Interactive activities will
represent more than 15% of
Publicis Groupe’s
revenue


Financial impact
of the transaction


26
Financial Impact
Equity Value:
$13.50 per share offer price x 85.8 million of shares =
$1,158 million (€877 million)
Plus: 1.1 million of restricted shares rolled over into Publicis
shares for a cost of $14.7 million (€11.2 million)
Plus: 780,000 warrants and 13.5 million of options in-the-
money with a net cost of $122 million (€92 million)
(1)
$1,158 (€877) + 14.7 (€11.2)+ $122 (€92) =
$1,295 (€981)
Transaction Amount:
1€=1,3200$
(1) Net of proceeds from conversion
An Equity Value of $1,295 million (€981 million)


27
Financial Impact
Required Financing:
Digitas’
restricted shares and options (vested and non-
vested) are converted into, respectively, Publicis’
shares and
options and do not have to be funded
Implies an attribution of 3.2 million of treasury shares
underlying the new options
(1)
No new issuance of Publicis Groupe
shares
Only the warrants are paid at a cost of $9 million (€6 million)
Less: Digitas’
cash estimated at $129 million (€98 million)
$1,158 (€877) + $9 (€6) -
$129 (€98) = $1,038 (786)
1€=1.3200$
(1) Net of proceeds from conversion
A “cash”
cost of $1,038 million (€786 million)
Transaction Amount


28
15.6%
11.8%
15.8%
EBITA (%)
41,850
2,050
39,800
Staff
18.2%
14.8%
18.5%
EBITDA (%)
719
44
684
Operating margin
(EBITA)
843
55
799
Operating profit before
depreciation (EBITDA)
4,614
370
4,317
Net revenues
Publicis Groupe
+
Digitas
(in €
million)
Digitas
(1)
(in $ million)
Publicis Groupe
(in €
million)
June 30, 2006
(last 12 months)
Publicis Groupe
and Digitas
Pro Forma
Financial Impact
1€=1.245$ (average rate on the period)
(1)
EBITDA and EBITA presented post restructuring expenses and stock-based compensation


29
Financial Impact
on financial ratios of Publicis Groupe:
Publicis Groupe
confirms that it maintains its financial policy
within the limit of the ratios previously communicated to
market
It also expects to return back
in the limits of its financial
ratios within 18 to 24 months
on the results of the Group:
The transaction is expected to be accretive on EBITA per
share (4% in 2007 and 6% in 2008) and is expected to be
accretive on a fully diluted EPS basis as early as 2008
with cautious assumptions in terms of cost synergies
and before any revenues synergies
Impact of the transaction:


30
Publicis Groupe
after the transaction
Objective:
Taking into account the synergies and the growth expected in 2007
and 2008, Publicis Groupe
should be able to maintain its operating
margin objective (16.7% in 2008) while
integrating Digitas
Operating margin target by 2008 unchanged
at 16.7%


31
Publicis Groupe
+
Digitas
Closer to the Future
Publicis Groupe
Post-merger


32
Viva La Difference


33